The attachment, titled "Preliminary Plan," has never been made available to the public. In apparent violation of the $150,000 expense cap imposed by the city's memorandum of understanding, the document itemized a total of $629,000 in foundation expenses projected to occur over a "one-year plan."
Of that, $195,000 was allocated to "Salaries and Benefits (Executive Director/Administrative Asst.)," $70,000 for "consulting services," $160,000 for "Publications and Public Relations," including $45,000 for "Agency services," $50,000 for "Banners," and $25,000 for "video," $25,000 for "organizational meetings," $15,000 for "office equipment and furnishings," and $15,000 for "board related activities."
Whether or not Herring or others on the city manager's staff signed off on the spending plan is not documented in the material turned over by the city. Herring did not return phone calls. But according to a series of documents on foundation letterhead, each labeled "Financial Report," the foundation quickly began spending down the city's contribution.
During the period from January 1, 2002, through December 31, 2002, according to the documents, the foundation spent $8515 for "Foundation Support" and $66,242.18 on "Charitable Expenses." Another expense, labeled "Beginning Distributable Balance on January 1, 2002," was listed as $11,950. The fund closed out the year with $920,123.89, which included $6832.66 in "Earnings on Investment Activity."
The next quarter, from January 1, 2003, through March 31, 2003, the foundation report says it spent $3632.82 for "foundation support" and $72,269.10 for "charitable expenses." It earned just $2061.07 on "Investment activity," ending the quarter with $846,283. A similar pattern prevailed through the next three quarters. Nowhere in the documents provided by the city is any clue to who received the money or details as to how it was spent.
By the fourth quarter, ending on December 31, 2003, the remaining balance of the taxpayers' million-dollar contribution to the library foundation was down to $564,187.99. During 2003, a total of $12,907 worth of "foundation support" and $348,665.65 of "charitable expenses" had been paid out. Just $5636.77 of "investment activity" earnings on the balance were paid in during the entire year, according to the document.
According to an undated document provided by the city, the library foundation provided an "income report" listing two contributions it was apparently claiming credit for: $3.5 million from the "Hervey Family" for construction of the Skyline Hills Library, and $100,000 from the "Reuben H. Fleet Fnd. Fund" for the Point Loma Library. The document also listed the city's million-dollar contribution, as well as the $5636.77 it earned on that money. The statement concluded that "Total Income" of the foundation was $4,605,647.56.
Another undated one-page foundation document turned over by the city, entitled "San Diego Public Library Foundation Contributions and Goals," lists a "Goal of $53 million from 'other than City' funds." The document goes on to itemize "2002-03 commitments" of $43 million, including $5.35 million for "Logan Heights," $5.7 million for "Point Loma," $5.2 million for "La Jolla," $3.5 million for "Skyline-Hervey Family," $2.5 million "Skyline-Foundation pledge," and $20 million for "New Main."
The document also lists an "additional" $10 million for "New Main" in "March 04," another "additional" $5 million for "New Main" in "June 04," and an "additional" $5 million for "New Main and Branches" in "December 04." The document provided no other details.
With city officials remaining mum and documents scarce, it is difficult to know whether they were satisfied with the foundation's representation of its fundraising performance. Former city libraries development director William Sannwald, who was recently forced into retirement during a downsizing move, says that in his estimation the library foundation played only a minimal role, if any, in obtaining the Hervey money for Point Loma and Skyline.
In fact, the record shows that the $5 million Hervey contribution to the Point Loma Library, listed on foundation documents among "2002-03 commitments," was officially announced in February 2001, about two months before the foundation was incorporated and 16 months before it received the city's million dollars. Another contribution claimed in part by the foundation -- $1 million from Harle G. Montgomery for the La Jolla Library -- was first reported in June, 2001 by Union-Tribune society writer Burl Stiff. The Jacobs family contribution of $3.5 million for the La Jolla branch had also been announced well before the June 2001 groundbreaking, about a year before the city issued its check to the foundation.
The biggest contribution claimed by the foundation in pursuit of its $53 million goal, the $20 million for the "New Main" library, is not even from a private source. Instead it is a grant from the State of California.
One sign that city auditors began to raise questions about the library foundation's excessive expenditures and accounting practices is contained in an e-mail dated last December 11 from assistant city auditor Phil Phillips to city librarian Anna Tatar. The subject was "Library Foundation Funds," The e-mail says, "Would you please provide me with the status of obtaining the required financial status reports regarding the $1 million we provided as seed money for the Library system's donation campaign. As we had discussed previously, it is important that this be obtained as soon as possible."
Apparently Tatar did not reply, because Phillips e-mailed again, this time on February 2 of this year, renewing his request for the information. "Have you received the required reports yet? If not, I will seriously need to discuss scheduling of an audit of use of the funds and to determine the remaining balance. I will also be discussing these funds with Lisa in relationship to the budget bowl."
The same day, according to the records released by the city, Tatar replied to Phillips via e-mail, saying, "I will hand deliver the report to you tomorrow afternoon. I am meeting with Jim Bowers, the staff member who put the report together. Thanks for your patience."
Three days later, on February 5, Phillips e-mailed Tatar. The subject was "Library Foundation Financial Reports."
"I will be submitting the provided reports to our internal audit division to review for inconsistencies, potential noncompliance and violation of the terms of the MOU," wrote Phillips.