City may seek ‘misappropriated public funds’ from arts board
The city will pay former teachers of the Glenwood Springs Center for the Arts more than $20,000 in back wages, but only if the governing arts council agrees to end its contract with the city and give up its building lease.
If the organization does not accept the offer within the next week, the city may take legal action to go after the arts council and, “if appropriate, individual board members, to collect misappropriated public funds,” according to a motion drafted by City Attorney Karl Hanlon and read by City Councilor Kathryn Trauger at the Thursday City Council meeting.
The move comes after a three-week stay since the city first considered severing contract ties with the nonprofit arts council, ending some $50,000 in annual funding to the organization. The city has also threatened to terminate the lease for the city-owned former hydroelectric building on Sixth Street where the Center for the Arts is located.
Since then, the city and representatives from the arts council have been in negotiations to have the city take over arts programming this fall while efforts are underway to rebuild the organization.
A counterproposal from arts center attorney Charlie Willman put on the table just this week, details of which were not provided, was turned down by the city, leaving council little choice but to make its final offer.
The deal would involve the city paying up to $20,652 directly to former teachers of arts center programs who have gone unpaid since financial troubles surfaced earlier this year.
If the arts council opts not to “voluntarily and unconditionally” give up its public arts contract with the city, as well as its building lease, within seven days, the city will move to terminate the contract itself.
The building lease would be allowed to continue, however, until it is set to expire at the end of December 2019, as long as the arts council lives up to the lease terms, Hanlon explained.
Hanlon said there is ample evidence of financial misdealings by the organization, which he called “functionally bankrupt” at a special July 26 meeting, to unilaterally terminate the agreements.
A city audit of arts center finances that was released in June detailed thousands of dollars of “likely unauthorized” expenses.
The city asked Glenwood police to investigate art center finances after the April resignation of former Executive Director Christina Brusig and it became clear that the nonprofit was in financial trouble.
The audit outlined a long list of questionable expenses, including a trip to Disneyland by members of Brusig’s family, and possibly misappropriated money, all while racking up $11,750 in non-sufficient funds fees over the past two years. Brusig has said the Disney trip was related to an arts center dance program competition in California.
Among the money that has been unaccounted for was a $10,000 grant given by the city to the arts council earlier this year for purposes of creating a public arts program.
The City Council motion, which passed 6-1, also authorized city staff to begin offering art and dance programming as part of the Glenwood Springs Community Center offerings this fall.
Willman declined to comment on behalf of the arts center until the board has had a chance to meet and weigh the city’s bail-out offer.
“This has been an agonizing period of time … but I see this as a way to move forward,” Trauger said. “One of the primary responsibilities of a board of directors is fiduciary, and this board has failed in that area.”
As for the public money that has gone unaccounted for, “we need to make sure we at least try to recover those funds, or figure out what happened to them,” Trauger said.
Councilor Rick Voorhees said he doesn’t view the city’s actions as punitive, but rather “as a way to put things back together, and move in a cooperative manner … to put something together that works for everyone.”
Councilor Jonathan Godes voted against the move, saying he was uncomfortable using taxpayer money to bail out a nonprofit organization. Otherwise, he agreed with the city’s position, he said.
Also Thursday, City Council followed through in creating an arts and culture advisory board to promote the arts and recommend how the city can provide various arts education programming and events.
The new advisory board, to be appointed by City Council, will be charged with finding ways to provide funding and partner with a variety of arts-related organizations to bring awareness to the arts and open access to arts education programs.
The board is to include seven members, five from within city limits and two who may reside outside city limits but within the 81601 ZIP code, or who own property or a business within the city.
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For the time being, the city will hold off on making any changes to the 27th Street roundabout.