Promote La Jolla leaders met Monday with the supervisor who oversees small-business districts and learned what documentation was used by the city auditor’s office to conclude that the PLJ had misused funds and double-billed the city and county.
President Rick Wildman called the meeting “very collaborative … we kind of figured out what the problem was: sloppy accounting.”
Now, he added, “we think it’s a math problem.”
Among those attending were Meredith Dibden-Brown, who heads the city’s office of Small Business Manager, her assistant and Andrew Wander, a representative of the city attorney’s office.
Deputy City Attorney Andrew Jones, who is handling the case, said Monday that there was “nothing new to report.”
Former PLJ President Deborah Marengo, who also attended the meeting, said the challenge now is “to go back through and clarify the invoices and checks. … It was a good meeting, but we still have a lot of work to do.”
In all, the city auditor said PLJ was responsible for debts totaling $112,070. Of that, $46,747 is due to the city for “duplicate and prohibited expenditures.”
The remaining $65,323 is for money due on a line of credit with First Republic Bank. The money, held in a certificate of deposit for the Coastal Access and Parking Board, was seized by the bank as payment on the overdue loan.
The misuse of funds allegation revolves around whether business improvement district money had been used to pay interest on the loan.
Wildman said clearing up the situation with the bank is a “Catch 22,” because PLJ wants to work out the situation with the bank but the bank wants the contract renewed.
Compounding that, the city council won’t consider the renewal and won’t give the group its normal funding until the current issues are resolved. Because the council doesn’t meet in August, nothing is likely to happen until September.
He said he’s hoping for a solution that would have the bank return the money and PLJ working out a payment plan to clear the debt.
He also said Dibden-Brown’s office would work with PLJ to set up new accounting procedures. It was recommended that PLJ establish a finance committee to review expenditures and make sure they follow procedures.
Also on Monday, John Weil, an aide to Supervisor Pam Slater-Price issued a statement that she has recommended “that funding for Promote La Jolla to operate the Motor Car Classic be rescinded and instead be awarded to the La Jolla Historical Society for the same purpose. This will be a board action at her recommendation.
On June 26, John Bolthouse, executive director of the historical society, announced that they would assume responsibility for the event in the face of PLJ’s financial predicament.
Wildman said he was pleased with the action because “it fits with the plan for the historical society” to take leadership.
Weil also wrote that Slater-Price based her decision on several factors, including the fact that the society “is now the lead agency” and it will simplify accounting.
But he also wrote that Slater-Price “will not award county funding until they have cleared up their billing issues with the city” and because PLJ “may be in arrears paying their bills.”
“As stewards of pubic money we cannot risk having public funds attached to pay previous debts,” Weil continued.
Although he wrote they are “confident” PLJ will get the situation righted, he also noted “an agency must be financially solvent to receive public funds.”
At its meeting last week, PLJ Treasurer Daisy Fitzgerald outlined a 2010 budget with “a bottom line that is much lower” and leaves the post of executive director open until the first quarter of the 2009-10 fiscal year. The board agreed to delay action until August.
In other action, the board:
- accepted the resignations of George Hauer and Brian Miller, leaving the board with two open seats;
- appointed Wildman, Shannon Turner, Glen Rasmussen and Marengo - who said she did not plan to run again - as the nominating committee;
- agreed that the annual Gallery & Wine Walk should be held Sept. 24 or Oct. 1 and referred the matter to the marketing company assisting with the event, and
- discussed plans for solar-powered Big Belly trash cans and agreed to let the La Jolla Town Council pursue the project.