La Jolla Town Council takes action on trustee’s handling of fundraising event, installs new officers

By Pat Sherman

The La Jolla Town Council (LJTC) began its May 8 meeting at La Jolla Rec Center on a high note, with its new officers taking the oath, and elected officials honoring the service of Dean Haskins and son, Steve Haskins — both La Jolla attorneys who have served as LJTC presidents (Steve’s term began during this month’s meeting, when immediate past-president Cindy Greatrex handed him the gavel).

However, the meeting ended with a less celebratory discussion, as trustees voted to hold an election among the LJTC’s general membership to decide whether fellow trustee Nancy Gardner should be removed from the board, in relation to how proceeds from the Oct. 5, 2013 La Jolla Dancing with the Stars fundraiser were managed. Trustees say actions taken by Gardner, who served as its planning committee and event chair, may have violated LJTC bylaws.

During the LJTC’s December 2013 meeting (at which Gardner was not present) it was announced that the sold-out event, held at the Hilton La Jolla Torrey Pines, brought in a little more than $6,000 in proceeds for its trustee-selected beneficiaries.

Trustees voted to give the LJTC 60 percent of the proceeds, while the La Jolla Christmas Parade Foundation received 20 percent and the both the La Jolla Community Center and Montana-based Warriors and Quiet Waters Foundation (a nonprofit that provides fly fishing trips for wounded servicemen and women) each received 10 percent.

In January, checks to all four beneficiaries were signed and distributed by Gardner (who said she has since been taken off the event account).

LJTC trustee Ann Kerr Bache, who is also the La Jolla Christmas Parade and Holiday Festival event chair, decided to donate the parade’s share of the proceeds to the LJTC, she said, because the LJTC “sponsored us for many years … and housed us in their offices at no charge.”

By the time the LJTC deposited Gardner’s Parade Foundation check in its own account, during the first week of March (the transfer first had be approved by the Parade Foundation Board), a stop payment order had been placed on it.

Greatrex told the

La Jolla Light

she later learned that the attorney for the nonprofit San Diego Police Historical Association (SDPHA) — which lent its 501(c)3 nonprofit status to the event, and ended up handling all its finances — placed the stop payment, due to concerns about whether La Jolla Dancing with the Stars was a “legal” fundraising event, Greatrex said.

Although the SDPHA, for which Gardner is a volunteer commissioner, was initially procured to process credit card payments at a lower rate, it was eventually deemed the sole fiscal agent for the event.

According to SDPHA Vice-president Steve Willard, SDPHA authorized a fictitious name to be secured for the event and a bank account to be opened, both in the name of La Jolla Dancing with the Stars (the latter to prevent co-mingling with funds in the SDPHA’s account).

Although the LJTC expected the SDPHA to re-deposit the Parade Foundation’s 20 percent, it never happened.

Instead, Gardner invited the

Light

and another publication to attend an April 30 press event at the offices of the La Jolla Real Estate Brokers Association (REBA), where SDPHA Vice-president Willard presented Warriors and Quiet Waters with what he referred to as “an additional donation” of $1,238 “in the name of the La Jolla Town Council.”

LJTC trustees were not notified in advance of this additional donation to Quiet Waters (beyond the initial 10 percent it received), nor allowed to vote on it as they had the other beneficiaries.

Addressing meeting attendees May 8, Town Council President Haskins said he had been contacted by members of the Town Council and the community, who expressed concern after reading about the additional donation to Warriors and Quiet Waters in another local newspaper.

“This is something that really needs to be dealt with,” Haskins said May 8. “No matter what actions we need to take, we need to take them to maintain the integrity of this organization.”

Quiet Waters: The fourth beneficiary

In July of 2013, the LJTC board voted that any proceeds from the event would be split between three La Jolla organizations (including the LJTC). Quiet Waters was added as a fourth beneficiary during the next month’s meeting, following a plea from Gardner and a presentation from San Diegan Clifford Myers of Quiet Waters (who accepted the check for the additional donation last month).

At the time, LJTC trustee Glenda Rothberg questioned whether such a vote followed LJTC bylaw procedures, particularly given that Quiet Waters received the fewest trustee votes during the July, 2013 meeting. (Two other causes that were not selected, including San Diego-based Voices for Children, each received one more vote than Quiet Waters.)

“I’m trying to figure out how it jumped the line,” Rothberg questioned.

At the time, Gardner (then first vice-president and part of LJTC’s executive committee) said the executive committee was asking trustees to include Quiet Waters to help salvage the event, which she said had lost sponsors and dancers since the three local beneficiaries were announced.

Gardner told the

Light

the event’s celebrity judge and emcee suggested to her that people wouldn’t donate to La Jolla projects, and that a beneficiary that could “tug at the heartstrings” was required to sell tickets.

LJTC Secretary Charles Hartford, himself a wounded veteran who did not vote to include Quiet Waters as a beneficiary, said during the May 8 meeting he was disappointed to seek Gardner’s removal, but felt it was “the right thing to do.”

“I made it clear to members of this body, and to the event committee, that I thought any proceeds should be directed to La Jolla’s specific needs and not to a wounded veteran organization; that is my opinion still,” Hartford said.

“It was extremely troubling to see the report of an additional donation to Quiet Waters made in the name of the La Jolla Town Council this past week … in lieu of other deserving — and local — charities, such as Voices for Children. … I personally have no reason to believe anything else but that the Quiet Waters charity provides a great service to wounded veterans, but they’re in Bozeman, Montana, teaching fly-fishing.

“Closer to home we have many well-deserving organizations that can serve our veterans and our military.”

Hartford further alluded to what trustees see as Gardner’s failure as event chair to provide a financial report for the event in a timely manner — something required of past event chairs and which Haskins and other trustees say the LJTC has yet to receive.

“We rightly expected transparent reporting and accountability from the trustee who was self-appointed and solely responsible (for the event),” Hartford said. “In (event) committee meetings, in our public meetings and in our executive meetings we made that need abundantly clear.

“In fact, the lack of transparency and financial accountability led to the resignation and exit from the committee of several trustees,” including original event chair and recently deceased trustee Rob Hildt

who trustees say resigned from the event and LJTC board due to friction with Gardner), and trustee Charles M. Schevker, who designed the event website and its online credit card payment mechanism.

LJTC First Vice-president Rothberg made the motion May 8 that a vote be taken by mail ballot of the entire LJTC membership “for the purpose of seeking the removal of Nancy Gardner as a trustee of the La Jolla Town Council.”

“This is required because trustee Gardner has violated the binding public vote of the Town Council,” Rothberg’s motion stated. “She publically represented that she was representing the La Jolla Town Council when she recently presented a donation to an organization (Quiet Waters). In presenting this donation she acted solely and individually without the required voting approval of the Town Council.”

Gardner insisted that it was not her decision to present Quiet Waters with additional monies.

“I got a phone call from the Police Historical Association telling me what they were going to do,” she said (which Willard confirmed). “I was (present) when it was discussed at their board and I did hear their attorney say (the Parade’s donation to the LJTC) could be considered money laundering, but I had no voice in it. I didn’t know anything about it.”

Kerr Bache questioned “Why did you choose to present it at REBA instead of coming back to the Town Council and telling us?”

Gardner read the following statement from the SDPHA regarding the additional Quiet Waters donation: “Upon review of the finances of the La Jolla Dancing with the Stars event we discovered an un-cashed check of $1,238 made payable to the La Jolla Parade Foundation. Upon further inquiry it was discovered that while the check had been made to the parade foundation, they had agreed to provide that money to the La Jolla Town Council.

“After conferring with our legal advisors as to how to proceed in a manner that was legal, ethical and oriented to the original intent of the event — to raise money for Warriors and Quiet Waters (‘and others in the community,’ Gardner added while reading the letter) — we became deeply concerned about the appearance of such a transaction. To some it could appear as though there was an effort to use the 501(c)3 nonprofit status of the Parade Foundation to disguise a financial contribution to the La Jolla Town Council, a 501(c) 6 organization. Under the United States Internal Revenue Code a 501(c)6 organization is tax exempt, however donations to such an organization are not tax deductible.”

Haskins later told the

Light

“A 501(c)3 can donate funds to other nonprofits and the recipient entity need not be a 501(c)3 but those funds are restricted to charitable purposes only.”

Though Gardner tended a handwritten resignation letter during the meeting, the board proceeded with the vote to explore her removal, which passed, sans votes by Gardner and trustee Ramin Pourtymour.

Gardner later told the

Light

, via e-mail, she questioned the “motivation of wasting the Town Council’s resources to send out 500 mailings to embarrass me with an obviously improbable, false allegation to get me to resign, when I have already resigned in writing.

“Where is the $3,800 that Town Council has already gotten?” from the event, she questioned. “It has never been reported by the treasurer in the town council bank account.” (Haskins and Greatrex provided electronic copies of bank statements showing the money had been deposited.)     LJTC trustee Rich Ticho said he hopes the experience leads to better oversight of the Town Council’s finances and event procedures.

In other LJTC news

Meet the Mayor:

District 1 City Councilmember Sherri Lightner announced that San Diego Mayor

Kevin Faulconer

will hold a “meet the mayor” event for District 1 at 5 p.m. Monday, June 16 at La Jolla Rec Center, 615 Prospect St. San Diego Police Chief Shelley Zimmerman, a former captain for SDPD’s Northern Division (which serves La Jolla), will also be in attendance.

Appointments/time change:

Trustees voted to elect trustee

Yolanda de Riquer

as LJTC’s representative to the Coastal Access and Parking Board, and

Henry Chiu

as its representative to the Development Permit Review committee. In addition, trustees voted to move La Jolla’s

Traffic and Transportation

committee meetings from the fourth Thursday of the month to the third Thursday of the month (as did the La Jolla Community Planning Association in April).

Eco-friendly Defense:

Representing 52nd District Congressmember

Scott Peters

, Sarah Czarnecki noted that Peters recently introduced the Department of Defense Energy Security Act of 2014 (with U.S. Sen. Mark Udall, of Colorado), which Czarnecki said would “increase the amount of renewable and sustainable energy that the Department of Defense uses, increase security for our armed forces … and reduce fuel costs” (on which she said the DOD spent $14.8 billion last year).

“My boss likes to say that the biggest proponent for solar energy that he’s met while in Washington, D.C. is not the League of Conservation Voters or the Sierra Club — it’s the commandant of the Marine Corps, because when he has soldiers that are there transporting fuel, they are put in harm’s way,” Czarnecki said. “We had 3,000 soldiers killed since Sept. 11 through attacks on fuel convoys. If you move to solar energy in the field, putting panels on tents and backpacks for powering small electronics, and on vehicles to keep the technology they are using cool, it will not only keep our men and women who are serving safe, but it will reduce costs.”

Czarnecki also said that “during a marathon session” of the National Defense Authorization Act (NDAA) on May 7, Rep. Peters sponsored an amendment, which was adopted by the committee and included in the bill, that prevented the Department of Defense from taking over firefighting efforts and support aircraft, C-130s, that have long been operated by the California National Guard and the Governor, "to make sure that our response times are still quick.”

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