RIOC Overrules RIRA Public Purpose Fund Recommendations

January 7, 2019

The Roosevelt Island Operating Corporation (RIOC) board passed a resolution at their last board meeting overruling the Roosevelt Island Residents Association’s (RIRA) public purpose fund recommendations, agreeing to take 5% of funds from other applicants and giving that sum to the Carter Burden Network Senior Center. It's a move that undoes years of effort by Islanders seeking some decision-making ability in how funds are spent in their own community.


In support of her resolution, the President of RIOC, Susan Rosenthal, relied on a letter she received from Carter Burden CEO William Dionne, as well as her own interactions with the Carter Burden Network, to justify the change: “I think they’ve done an impressive job for our community,” and “in fact, they’re doing a lot, and they do need our money.”


What are Public Purpose Funds?


The Public Purpose Fund was created in 1989 when the developers of Manhattan Park paid the sales tax on construction materials into the fund (rather than paying the actual sales tax). Grants from that fund were made to Island Kids, the Roosevelt Island Visual Art Association, and many other Island organizations.


Public-purpose funds (PPF) are intended as investments in the direct services of eligible entities – supporting programs and projects that enrich the Roosevelt Island community. Organization programming cannot solely benefit one individual or family at the expense of the Island community at large.


The 2018-2019 Public Purpose Fund Committee, l-r: F. Scott Piro, Dave Evans, Erin Feely-Nahem, and Frank Farance 


By 2008, that money had run out, but RIOC, under then-president Steve Shane, made the first annual contribution of $100,000 from RIOC’s operating funds to the Public Purpose Fund and proposed that RIRA administer the fund. The rationale was that “the wisdom of the community as to the appropriate allocation among them would be expressed through RIRA.”


The Public Purpose Fund Process


RIOC gave RIRA criteria to make the assessment, a two-page document divided into four sections, the first three of which correspond to the candidate's completed application. The fourth section, titled “General Evaluation,” is intended to measure the overall strength of the application without referring to specific questions answered on the form.


The application process is rigorous. Prior to being evaluated by RIRA’s PPF committee, organizations are required to supply RIOC with proof of appropriate licenses and permits for provision of the services they perform, as well as IRS forms, budgets, staff lists, and many other documents. To maintain the integrity of the process, RIRA PPF committee members are vetted for conflicts. Then, prior to discussion or vote on the PPF committee’s recommendations to the full RIRA board, all council members with conflicts, including leadership position, fiduciary relationship, or membership on a non-profit applicant’s board, must recuse themselves.

Former RIOC President, Steve Shane


The architect of the plan, Shane, said, “Assuming this goes as we expect, the RIRA recommendation will be tantamount to approval,” though final grants still must be approved by the RIOC Board of Directors. From 2008 through the 2017-2018 cycle, it has been. During that time, groups have petitioned the RIOC board to make changes in what they plan to do with the money, and they have also requested rolling the money over when they were unable to accomplish certain projects within the year. But until this cycle, RIOC never overruled RIRA’s initial assessments.


Without a Hitch


In their presentation at the PPF public session, Carter Burden Network Director Lisa Fernandez explained that they provide “above and beyond the spectrum of services required by the Department of the Aging [their funders].” They explained that the disbursement of $340,000 from the Department of the Aging takes care of salaries, insurance and lunches, but that they would like to increase their instructor budget. She said, “We have a suggestion box and we get a lot of suggestions for classes we don’t offer, and we’d like to offer them.”


RIRA voted to accept the PPF committee’s recommendations at their November 2018 meeting, including the grant of $3,250 for the Carter Burden Network. The only recommendation that prompted any discussion by the common council was regarding the Roosevelt Island Visual Arts Association, requesting funding for heating and cooling their space. The disbursement to Carter Burden did not merit any commentary by council members in attendance that evening.


During the November meeting’s public session, Roosevelt Island Historical Society’s Judy Berdy spoke on behalf of the Carter Burden Network. “Every group, aside from one, received more than $9,000,” she exclaimed, adding, “This is a disgrace to our seniors. Don’t treat them like they don’t count. I hope this board considers that this was an unfair amount and reevaluates their recommendation.” There was no response from the common council.


Not Always This Easy


In 2016, both the Roosevelt Island Seniors Association, and the Carter Burden Network requested funds. When the PPF committee presented the common council with their recommendations that year, there was heated discourse. In true Island fashion, most council members seemed aligned with one group or the other and emotions were high.


Last year it was the Roosevelt Island Visual Arts Association whose proposed grant, for rent, inspired a lot of discourse. Should they get grant money from RIOC, just to give that money back to RIOC in the form of rent? Many RIRA representatives were conflicted but ultimately voted in favor of the PPF committee's recommendation.


What Happened this Year?


Ratification by the full RIOC board is the final step prior to RIRA’s funding recommendations becoming final. Between the November RIRA board meeting and RIOC’s December 13 board meeting, Carter Burden CEO William Dionne sent RIOC a letter asking the RIOC board of directors to reconsider their PPF award recommendation.


Rosenthal then prepared a resolution to put in front of the RIOC board increasing the Carter Burden Network’s grant at the expense of every other group.


At the meeting, former RIRA president and RIOC board member David Kraut characterized the proposed resolution as a “situation where we’re actually refusing RIRA’s recommendations; it is an across-the-board renunciation of RIRA’s express view.”


He alluded to the struggle for Islanders to realize democracy: “It took so long to get to the point of RIRA making these decisions. As a matter of good faith in RIRA, we’ve generally voted along with RIRA’s recommendations.”


 Dave Evans, Roosevelt Island Residents Association Public Purpose Committee Chair


In response, Rosenthal said, “At the end of the day, it is our responsibility. We are not rubber stamps.” PPF committee chair Dave Evans didn’t argue; “I am going to follow orders. I have no pride of authorship. At the end of the day, it’s the board’s decision.”


Evans confirmed that his committee followed RIOC’s criteria and said that there was no “ill will” or “discrimination” against any applicant and, as proof, described himself as “about as senior as you can get.”


“This is the first time, in the many years that RIRA has volunteered to do the massive scut-work of determining the allocations, that the committee's labors have been ignored,” commented former RIRA President Matthew Katz.


What’s Next for the PPF Process?


Without an allegation that RIRA abused their discretion or failed to follow the guidelines set forth by RIOC, it is unclear why RIOC took this liberty (besides just because they can) or why they didn’t opt to give the Carter Burden Network other money and avoid this controversy.


RIRA consists of all volunteers, and members who serve on its PPF committee do so because they take this, their role in disbursing a small piece of the Island budget, very seriously. F. Scott Piro, a member of the committee, said, “As the newest member of the PPF Committee, I did not take the lead on the project. But I took it very seriously, devoted a lot of my free time to being a fair judge, and followed the instructions to base fund allocations according to the strength of the applications.”


Katz, who presided over RIRA when the council first started assessing the PPF, thinks it might be time for RIOC to take on this role. “It seems to me that this relationship has run its course and RIOC, with its large staff, can determine the allocation unilaterally.


RIRA has devoted the many man-hours required to accomplish this job competently and responsibly, and without any compensation, on the premise that residents know the resident-based and operated 501(c) organizations better than RIOC. If that hard work will be second-guessed by RIOC in the future, they should take on the responsibility.”


There is currently no appeals process to overrule PPF decisions. Evans says, “We have a historically valid and flexible process that has been, and will continue to be, tweaked where necessary.” Will what happened this cycle impact public faith in RIRA and the PPF process going forward?


Evans isn’t concerned. “The project is a blessing and an asset to our Island non-profits approved by RIOC as worthy candidates who need a bit of help. In that regard, I continue to believe in the RIRA Common Council being able to help facilitate all applicants crossing the finish line.”


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