Cincinnati Enquirer reporters Carrie Blackmore Smith and James Pilcher explain how money is spent and flows through the Cincinnati Park Board and the Cincinnati Parks Foundation. Wochit
A new lawsuit against the city of Cincinnati by a Park Board member.
A tongue lashing for Cincinnati's mayor by the head of a prominent local foundation, who says the Cincinnati Park Board's fight "should be every citizen's fight."
Just what is going on?
What's behind to this epic battle between the Cincinnati Park Board and Mayor John Cranley's administration? It's money, specifically who controls the millions in a dozen endowments that benefit the parks and pay for a range of items, including the floral clock in Eden Park.
New appointment results in lawsuit
Cincinnati Park Board chair Dianne Rosenberg sued the city Friday, as well as Cranley and the City Council members who voted for her replacement after council picked Cranley ally Jim Goetz to her seat on Wednesday.
Rosenberg, who was named to the board in 2015 and named chair last year, has asked a judge to bar the city from replacing her at year's end without a hearing on her case.
On Friday, Tim Maloney, president and CEO of the Carol Ann and Ralph V. Haile, Jr. /U.S. Bank Foundation, made his support for Rosenberg known in an opinion piece submitted to The Cincinnati Enquirer.
"There are some politicians who believe that the Park Board's private trusts and endowment funds are public funds," Maloney wrote. "And though they believe the City should have control of those dollars, they have been unable to seize control since the Board of Park Commissioners has been standing in their way."
"The Board of Park Commissioners should stand in their way," Maloney continued. "And so should all future park commissioners."
What are they fighting about?
At the center of this squabble are endowments given to Cincinnati Parks decades ago by private citizens in their wills. There are roughly 12 of these funds with a total market value of more than $10 million.
The endowments are held by private banks and the Park Board has a set limit on spending from each fund every year so that the investments grow and last into the future. Some of the funds have guidance on how they're to be spent, others do not.
Today, gifts of this kind would be given to the Cincinnati Parks Foundation. But the foundation didn't exist when the bequests creating the endowments were made.
When the Park Board spends money from these endowments, it moves the money into a private bank account held by the Park Board at PNC Bank.
State Auditor Dave Yost slammed the city in an audit released earlier this year, saying the city puts itself at financial and legal risk by not using the same transparent public accounting system with these funds as it does with other public funds.
The Park Board and Haile's argument
Maloney, of the Haile Foundation, writes in his op-ed that the people who left these endowments "would wail if they knew of this fraudulent scheme." He said in an interview what concerns him is "adhering to donor intent."
For its part, Haile made substantial donations to Cincinnati Parks through the Cincinnati Parks Foundation, including $5 million for Carol Ann's Carousel in Smale Riverfront Park. Rosenberg and her husband gave $1 million for the swings at Smale.
The Park Board and Maloney have expressed concern that, if the money were instead placed in the city's coffers, it could be spent or controlled at the whim of city council or the mayor.
They point to prior statements by former city solicitors who gave the Park Board sole responsibility for the endowment funds.
"... The Board is being asked to relinquish the very responsibility entrusted in it by the charter and those individuals who entrusted the endowments to the Park Board,” the Park Board wrote in a letter to Cincinnati City Manager Harry Black on Oct. 26, 2015.
The two parties and their lawyers have been trying to come to an agreement about it ever since.
The mayor's argument
Cranley also says he has the charter, basically the city's constitution, on his side.
"The Park Board will absolutely have the sole discretion to spend this money," he said. "But it doesn’t mean they can spend it freely like a country club account. It was given to a public body, the public has the right to know how it is spent."
Cranley said the board's spending of endowment money has been questionable at times – such as a helicopter ride over the Grand Canyon and expensive trips, meals and car allowances for top parks employees. The board made and then rescinded an improper $200,000 donation to the parks' failed tax levy campaign in 2015. This year, the board paid a lawyer more than $100,000 to fight the city over the endowment issue, saying the city solicitor's office had a conflict of interest.
Right now, the public must take the Park Board at its word for how endowment money is spent. The board earlier this year said it had begun documenting every expenditure at their monthly meeting. That had not happened consistently before.
Cranley says a deeper level of accountability is necessary to be certain the parks department is following state and federal hiring and bidding laws required of all public offices.
The mayor says he is not asking the board to move the trusts but to agree to one of two options.
The first option is to transfer any dollars spent out of those trusts into the city's financial system, which has built-in checks and balances, and not into the Park Board's private PNC Bank account.
Or, the Park Board could transfer the trusts to the Cincinnati Parks Foundation.
"This is not about control for us," Cranley said. "We have made that clear, this is about transparency."
What's next?
For now, it looks like Rosenberg will hold her place at the helm of the Park Board until this is battled out in court.