PLJ board examining credit line
Promote La Jolla’s new executive board learned recently that the organization faces an April 1 deadline to pay off what appears to be a $64,000 balance on an outstanding line of credit with a local bank.
Daisy Fitzgerald, a new board member and the new treasurer, told the full board of the business improvement district (BID) during last week’s meeting that she discovered the obligation while reviewing an auditor’s report.
The audit, covering the period ending June 30, 2008, shows the line of credit for $115,000, with a balance of $80,813. It also shows a loan from a board member of $6,975.
Since then, Fitzgerald said Saturday, the amount appears to have risen to about $64,000.
As of June 30, PLJ had a cash balance of $91,735 with accounts receivable of $77,912.
Separate entitiesWhile the line of credit was issued to PLJ, the guarantor is the Promote La Jolla Foundation, which is identified as a separate entity that was organized by the former board of PLJ.
(Some of those people remain on the board, including Deborah Marego, the former PLJ president.)
Marengo noted that the group was renamed the La Jolla Destination Marketing Alliance - a group that still exists.
Records at the Secretary of State’s office indicate the alliance application was filed April 22, 2003, but show no records - active or otherwise - for the foundation.
The alliance recently sought funds from the city’s Tourism Promotion Corp. for an extensive marketing campaign but was turned down, a fact that Marengo said leaves the group with no money.
Marengo and Sherer did not respond to questions seeking additional information about the two organizations.
The audit recommended changes in recordkeeping and tracking income and expenses and also raised questions about the relationship between Promote La Jolla and the foundation.
“I was very surprised,” Fitzgerald said Saturday about the credit line. The bank seems willing to work with them on the impending due date, she added.
President Rick Wildman said he noticed the obligation when reviewing the books and saw that they were paying $200 a month on the credit line.
Seeking detailsWhat remains to be sorted out is how that money was used, Fitzpatrick added.
During the March 11 board meeting, Marengo said she was “pretty sure” the money went into the BID account, but noted that the board had no records available that day to review the transfers.
The board agreed that Fitzgerald, Marengo and Executive Director Tiffany Sherer should meet as soon as possible to go over how credit line monies were spent. A full report is expected at the April meeting.
PLJ operates on fees paid to the city by businesses within the 30-block Village area as well as from special events like the Gallery and Wine Walk and the La Jolla Motor Car Classic. The organization also sells bus and parking passes through an agreement with the city.
It often takes a couple of months to get reimbursed by the city, Sherer noted.
“Anytime we had to make a big expense, it came from the line of credit,” Marengo said.
Sherer noted that some funds from the credit line were used to purchase the bus passes and, when the city reimbursed PLJ, the money “was returned in a lump sum to the line of credit.”
Audit detailsThe audit report, prepared by The Guerrero Company, states that "$57,251 (from the line of credit) were spent in advertising.”
Executive Director Tiffany Sherer explained during the meeting that the foundation was formed as a 501(c)(6) to collect money from the broader La Jolla area outside the Village.
She said funds from the three-year private fundraising campaign totaled about $250,000.
Sherer said, though, that not all the money was for advertising and the PLJ Web site and that there had been no advertising done in two years.