Shaken and sweating out their liability in the short-term, the leaders of one of Culver City’s historic iconic groups, the Sister Cities Committee, were feeling this morning like the young person forced out of his parents’ home well before he was prepared to venture into the scary world.
Affirming a judgment first expressed in the middle of last year — that Sister Cities had become a potential financial risk for City Hall — the City Council noisily voted unanimously last night to alter its relationship. The group now is free to pursue non-profit status or “expanded funding opportunities”.
It will continue to receive its $14,000 annual allocation, but the Committee will have to seek its own insurance.
Going with Majority
Staffers said research showed most sister cities’ groups are operated as non-profits.
Striking at what he believes is the core of the dispute between the two bodies, Councilman Steve Rose said afterward: “Sister Cities expects the full funding to be handed to them while all they want to do is spend money.”
Vice Mayor Carol Gross, who led the Council meeting in the absence of the ailing Mayor Alan Corlin, scolded the Sister Cities Committee for spending the last six months avoiding the obviously inevitable — applying for 501(c )(3) status.
‘What They Should Have Done’
“This situation has been known since last August,” Ms. Gross scolded. “If they had acted sooner, they would have their
(IRS-approved non-profit status) by now.”
Relations, long cordial and probably taken for granted, had noticeably frayed between the Council and officials of the much loved and revered Sister Cities Committee ever since the group queued up at the pay window six months ago for its annual funding check.
After flourishing for 45 years under the airtight, fiscally protective banner of the city, the hallowed but now subdued Committee stands outside of City Hall, a free agent, struggling to learn how to fly.
The Committee is expected to file papers immediately for 501(c )(3) status. Once accomplished, it would then be poised to apply for liability insurance — a crucial sticking point in this debate.
Liability insurance is a premier concern when groups of Sister Cities people are criss-crossing the globe, from distant countries to Culver City and back again.
How Wide Will Gap Be?
How long the fretting members of Sister Cities will be without coverage is not clear, attorney Paul Jacobs, a member of Sister Cities, told the newspaper this morning.
“We plan to file today (for non-profit status),” he said. “Hopefully we will be receiving the articles of incorporation quickly. Whether it’s 2, 3 weeks or 60 days, I don’t know the time period. My understanding is that when we receive them, we can talk to an insurance carrier about getting a binder.”
Accountant Charles Deen, working with the Committee, issued the following statement early this morning:
“Deen & Company CPAs has enjoyed a 100% success record in applying for our clients’ 501(c)(3) status at IRS. Since application fee money of $750 is at risk, we take extra care with the package of documents going to the IRS. If the application is rejected for any set of reasons, the IRS keeps that money. For a small non-profit, that is wasting their precious dollars.
“We have had the IRS issue the Determination Letters within 30-60 days from application IRS receipt date at the non-profit service center in Covington, KY. The key is having a complete, amply-documented with exhibits, application when first submitted. Each non-profit is unique and has a different story to tell and to fully document. Each unique story tends to reflect the volunteers who devote their time to their local community effort. The challenge is communicating to the volunteers in order to obtain sufficient factual information that can be packaged in a way that the IRS will understand the merits of the application.
“For any project related to the city of Culver City, we do pro bono work — to avoid a monetary conflict of interest by virtue of the fact that Charles Deen serves as a Parks & Recreation Commissioner and, until last year, Susan Deen served as a Cultural Affairs Commissioner.
“With tax season fast approaching, Deen & Company will do enough preliminary work with Sister Cities members (asking the right questions, asking for various documentation, allowing them to tell their story, and being very patient with volunteers) to be able to file the Form 1023 Application by the end of April 2008.”
With the next Sister Cities program six months off, the present timeline would appear to be tailored for even a groundmoving transformation in status.
But not to hear Sister Cities leaders tell the story. They fear for their own personal liability insurance risk now that the city is withdrawing its coverage.
Emerging as the chief critic of the way Sister Cities was being run — too casual, incandid, shoddy and occasionally entitled, he said — Councilman Rose insisted on seeing their books.
The Breaking Point
For reasons that were not fully explained, then or now, the books were not made available to the Council while prominent members ardently attested to the Committee’s veracity, honesty and trustworthiness.
This led some members to charge that the City Council was trying to kill off the Sister Cities program, which Mr. Rose strongly denied. “No member has attacked Sister Cities’ programming,” Mr. Rose said. “The Council is simply concerned that Sister Cities comply with state and federal laws.”
Councilman Gary Silbiger has been a lone voice on the dais championing the pro-side of the Sister Cities’ cause. Reacting to earlier criticism that he should recuse himself because his wife had become a member of the Committee’s Executive Board, Mr. Silbiger took what seemed like an extraordinary measure last night.
He produced what he identified as a letter of resignation, dated yesterday and signed by his wife, announcing the end of her relationship with the Executive Board, freeing him to participate.
Silbiger’s Last Stand
During the lengthy run-up to the anticipated vote, Mr. Silbiger repeatedly invoked a fear that the Committee’s continuity and well-being would be jeopardized if the Council abruptly withdrew its financial support.
Reassurances did not cool his ardor for maintaining some of the city’s support devices.
Stepping directly to the forefront, Councilman Scott Malsin orchestrated the final vote by questioning staffers, and sweeping away verbal debris and eliminating real and imagined impediments.
Mr. Silbiger, somewhat uncharacteristically, joined the majority at the end instead of holding his original position. “I am disappointed,” he said, “because the city of Culver City is losing on this. But I will vote for the motion,” he said, “because that would be better than voting against it.”