Tempers flare as Promote LJ tackles budget, audit issues

While they continue to function as a group, Promote La Jolla at this point is no longer officially recognized as a city business improvement district, President Rick Wildman told the board last week.

So when the issue of approving a budget and spending money on an audit came up, questions were raised about how the group can take actions since it doesn’t have income from city reimbursements and doesn’t have any authority.

Despite that, Wildman said, it is still a 501(c)6 and is entitled to conduct business.

Promote La Jolla is one of four merchant groups that have not had their agreements with the city renewed. Reasons range from a formal city auditor’s investigation that concluded PLJ misused city funds or double-billed the city to false information being distributed to the public, said former President Deborah Marengo, who has been working with Wildman and city officials to resolve PLJ’s predicament.

At times the meeting reached a boiling point, with Marengo and Wildman alternately blaming each other and their associates for the situation they face.

Treasurer Daisy Fitzgerald told the group they had less than $2,000 in cash after current obligations are covered, not counting monies owed to cover $160,000 in “undisclosed debt.”

Before the City Council will consider PLJ’s application - which was pulled from their agenda in May - the organization has to do several things:

• Present a 2010 budget and an audit that combines the workings of PLJ and the PLJ Foundation, an independent group that Marengo has said shared goals and monies with the city-approved district.
• Show the city it is working with First Republic Bank to resolve a dispute over the bank’s taking of about $65,000 in city money that PLJ held in its bank account for the Parking and Coastal Access programs. The bank contends since the money was in PLJ’s account, it is rightfully theirs to use to cover the delinquent account.
• Convince the city that $47,000 identified in the budget as “misused or double-billed” monies were, in fact, legitimate.

At this point, both Wildman and Marengo said they believe the $47,000 will be resolved once Maryam Bakhsh finishes reviewing every check, invoice and reimbursement request submitted to the city.
The board did approve a proposed 2010 budget, that assumes city reimbursements are renewed and indebtedness resolved.

Board member Terry Underwood, general manager of the Grande Colonial Hotel, called it “a good proposed starting point” that would have to be reviewed if there is “lingering debt.”

That left the issues of the bank debt and the audit up for discussion, both of which had board members debating their Catch 22-like situation.

They don’t have money to pay for an audit, but need it to get back in the city’s good graces, said Glen Rasmussen.

And, as Marengo noted, the bank won’t talk to them since their business improvement district contract is suspended along with their income.

She said letters Wildman wrote to the bank about the line of credit were “threatening” and “an embarrassment” that led to the resignations of six board members in the past month.

When discussion turned to the audit, tempers flared again.

It took Oren Gabsch, who served on the PLJ board years ago, to focus the discussion.

“Everybody needs to take a deep breath,” he said. “If you’re balking at a $3,800 bill, you can balk, but if you don’t (get the audit), you can’t go back to the council.”

He added that a lot of the discussion “is very distasteful. This community needs PLJ now more than ever.”

Ultimately, the board voted to attempt to negotiate a lower price for the auditor’s work, to accept Marengo’s offer of funds from the foundation and help to pay the auditor before paying others whose bills are outstanding. The foundation has reportedly been inactive since it applied for city funds earlier this year.