The city auditor’s office is examining Promote La Jolla’s financial records, Rick Wildman, president of the business improvement district’s board said last week.
At issue is money contributed and spent by an allied organization that was called the Promote La Jolla Foundation when it was formed and is now known as the La Jolla Destination Marketing Alliance.
Wildman said the “city has taken an interest” in what has occurred because money spent on the foundation’s marketing efforts went through the business improvement district account and because some of its members were not in the business improvement district.
City Auditor Eduardo Luna said on May 14 that he could not “share any information into (that) at this point,” but said he expects to wrap up the process in a couple of weeks.
Wildman said he and Tiffany Sherer, the former executive director, met individually with the auditors staff during the week of April 27.
City ‘looking to help’“I think the city is looking to help us rather than assign blame for what was a complicated process (in which) some formalities may have been ignored,” he said.
The previous Promote La Jolla board formed the foundation in 2003 to raise money from businesses outside the Village group’s 30-block boundaries. The foundation included establishments like the La Jolla Shores Hotel and the Lodge at Torrey Pines.
Because the two groups are both nonprofits, Wildman said, they should have had separate bank accounts and records.
The situation is further complicated because Promote La Jolla owes more than $64,000 to First Republic Bank on a line of credit that is guaranteed by the foundation.
Some interest payments--about $7,000--apparently were made with business improvement district funds, which is against city policy, according to Wildman.
“We need to distinguish between the money borrowed by the foundation and PLJ,” he said.
Working with the bankUntil the city helps them sort things out, they cannot move forward on negotiations with the bank to resolve the debt, he noted.
The financial picture also played into planning for several key events--the annual La Jolla Motor Car Classic and the Gallery and Wine Walk. (See related story.)
Peter Wagener, who has been on the board for 12 years but does not plan to seek another term at the end of the year, said Friday that the solution is to make adjustments to journal entries to clear up any confusion.
“The money was used to pay for marketing,” he said.
He added: “We all know there was no money missing,” although they may have had “sloppy accounting.”
Praise for ShererWagener praised Sherer for her marketing expertise and knowledge of how to get things done, but noted that “she was not an accountant.”
While he credited the previous board for “a pretty good job” of marketing La Jolla, he said he’s concerned now that “there is a drive to get Promote La Jolla to self-destruct.”
He said talk at Wednesday’s meeting was “all looking backwards. I resist that idea. We should look forward, go raise money and market La Jolla.”
The idea of last weekend’s dog parade was a good one, Wagner said, but the group should not have voted to give all of the proceeds to a charity when Promote La Jolla is in debt.
He said the group’s future hinges on finding a replacement for Sherer who has the talent and knowledge to raise money and get things done.
Interviews startedWildman said Thursday that the executive committee has interviewed two candidates and was to talk to three others this week.
“We need to be sure that we will be able to operate within our means,” he added. “In other words, we will need to find someone who can be productive and whom we can afford given our current budget constraints.”
During the meeting, Wagener and board members Reza Ghasemi and Bill Berkley, who were also on the previous board and fundraised and donated to the foundation efforts, were visibly upset about the situation.
“This would have slid by … if we had not made a mountain out of it,” Berkley said.
Ghasemi added, “Someone called the city to make it look bad"--a claim Wildman denied.
The issue came up, Wildman responded, because “the audit didn’t give a clear picture of our financial state.”
Ghasemi and Wagener, who were co-signers on the PLJ account under the previous board, asked where the foundation’s records, including canceled checks, were.
Both appeared surprised when Wildman told them none existed and that there was no foundation bank account.
Board Vice President Jennifer Clark reminded those at the meeting that the board is supposed to be transparent in its actions.
“Are we supposed to ignore (the problem),” she said. “It’s not us versus them or new versus old. There is a debt and we have to pay it back.”