Members of the Costa Mesa Senior Center board want permission to read a section of a man's trust that set up a memorial fund to benefit the center.
The request is for more specific information on whether the memorial fund can only be used to pay for center programming, such as classes and social activities, as some board members speculate, or if it can be used to shore up the organization's ailing financial health.
The budget problems came to light after the city published an audit predicting that the senior center's general fund would run dry by June.
Board members are brainstorming ways to keep the doors open. One idea presented was to request $160,000 from the memorial foundation, which was created after senior center enthusiast Albert Dixon died 12 years ago.
The senior center board voted 7 to 2 on Feb. 18 to request funds from the foundation. However, the vote came with significant debate, since a majority of the senior center board have not seen documentation of Dixon's final wishes.
Some of the board members suggested holding off on accepting funds from the Albert Dixon Memorial Foundation until after they review the trust.
Several senior center visitors who knew Dixon said he wanted the money to be used to support activities and programs, not operating costs.
"We need to see the legal documentation to see how we are supposed to be using this money," board member Stella Adkins said during the meeting. "We haven't seen any legal documents on this. We've asked several times."
Adkins requested that board members hold off on requesting the funds until they know for sure whether the money was earmarked specifically for programming. Her appeal did not gain traction with her peers.
Senior center board President Judy Lindsay hasn't see the document either. Lindsay, who also sits on the foundation board, explained that the board and staff are "looking into it."
"I've never seen it," she said. "No one's really read it thoroughly yet. All I've known is what board members have told me."
However, on Tuesday, foundation President Mike Scheafer said he reviewed Dixon's estate documents and that they did not include specifications about how the money gifted to the center was supposed to be spent.
The debate among senior center board members and staff over requesting funds highlights a larger problem at the senior center, including a lack of transparency and miscommunication, some board members assert.
"There's a distinct lack of communication between the parties down there that leads to not trusting one another," Scheafer said. "It all boils down to a lack of communication."
The man behind the donation
If the foundation board approves the request, the money would be debited in four transactions — starting May 1, 2014, and ending May 1, 2015 — with the goal of providing the senior center with enough funding to keep its doors open for several years.
The foundation was created in 2006 after Dixon's second wife died, leaving the senior center $650,000.
Dixon, a mild-mannered man, was a daily fixture at the center, located at 695 W. 19th St., until his death in 2002.
The money was gifted to the center "to provide funds for the disadvantaged and aged and to support the programs and activities of the Costa Mesa Senior Center," according to the Dixon Foundation's tax forms.
"We've always looked at it as a backup — a rainy day fund," Scheafer said. "If the center needs help, I think the Dixon foundation needs to be responsive to that."
Senior Center Executive Director Aviva Goelman said the Albert Dixon money was not earmarked just for senior center programs, adding that it can be used to benefit the senior center in any way.
Goelman declined to provide the Daily Pilot with Dixon's trust or other documentation to prove his intent.
"It's a man's trust, and I don't think he would want it to be made public," she said. "I've seen the papers and there's nothing in there … he just left the money."
However, some board members aren't sure the center's current financial predicament falls under the requirements needed to ask for the foundation's help.
This year, the center has spent $474,202 of its $679,500 annual budget on payroll expenses for six full- and seven part-time employees. Though the center receives some public funding and enjoys non-profit status, Goelman declined to discuss her salary or those of other employees.
In 2009, Goelman earned $102,160, according to the organization's tax forms. Nonprofit tax forms require organizations to list their five highest compensated employees, as long as they make at least $100,000 per year.
Her salary is not listed on the 2010 or 2011 published tax documents. Goelman said her salary in those years was "nowhere near $100,000."
"I must have cashed out some vacation time that year," she said of 2009. "I don't remember."
This isn't the first time that the senior center has approached the foundation to request funds.
Goelman has made various requests, including asking for money to assist with the Gatsby-themed fundraising party in October, which ultimately lost about $2,000 after expenses were paid, Scheafer said.
The foundation was prepared to move forward with the request, but the senior center board ultimately declined to accept the funds.
"They thought they had enough money," Scheafer said.
Goelman said she never personally approached the foundation for money, saying that in the situations where the board directed her to ask for assistance, the foundation declined to provide funds.
"It was the Albert Dixon board that refused it," she said.
While awaiting the decision from the Albert Dixon Memorial Foundation, the senior center board hasn't yet detailed how it plans to reduce expenses.
"I don't think they have a plan at all," Scheafer said. "Eventually, the Albert Dixon fund is going to run out. I would like to see a plan showing that the senior center board can help themselves as well."
A 22-page audit the city released Jan. 7 shed light on the center's grim financial situation and proposed 15 recommendations.
The senior center, an independent, nonprofit corporation created in 1987, serves 300 to 400 seniors daily. Three city-appointed directors sit on the senior center board. The rest of the board is made up of people who apply to serve.
While the West 19th Street facility is an independent organization, the city annually grants it $240,000 in funding. This fiscal year, the center also received an estimated $535,570 worth of in-kind services from the city, including rent and building maintenance, according to the audit.
Goelman criticized the senior center board for refusing to engage in fundraising efforts, which she alleges is one of its main duties.
According to the senior center board's bylaws, members are required to have five standing committees, including a Fund Development Committee.
The committee was disbanded before the Gatsby-themed party — the center's first fundraiser in eight years — because none of the other board members wanted to help with fundraising, said Lindsay, the board's president.
"It's not up to them to do all of the work," she said. "They met a few times and brought ideas to the board, but nothing seemed to grab their attention."
Traveling to committee and regular board meetings is taxing for some members.
"When you have to go to committees between health issues, it becomes a problem for seniors," she said.
Still, Goelman emphasized that board members are responsible for fundraising.
"I think this board is a problem," she said. "They're not bringing in any money. That's not the kind of board that the center needs."
The foundation is waiting for the senior center board to send a formal request for funds, Scheafer said. He predicts the foundation will make a decision by May.
[For the record, 5:38 p.m. Feb. 26: An earlier version of this story incorrectly called the document that set up the Albert Dixon Memorial Foundation a will. In fact, it is a trust. ]