City to audit Main Street groups

September 23, 2011
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The city Department of Neighborhood Development (DND) will this year send compliance officers out to all 18 Boston Main Street organizations, DND spokesperson Jessica Shumaker told the Gazette this week.

Following that, the city will conduct rolling audits of one-third of the organizations every year, she said, and offer increased technical support for Main Street boards that request it.

The heightened oversight follows the discovery in July by the board of directors of Hyde/Jackson Square Main Street (HJSMS) that at least $20,000 the city paid the group had disappeared.

Neither Marc LaCasse, a lawyer heading up the investigation into the missing funds on behalf of the HJSMS board, nor Jason LaGorga, president of the board, responded to Gazette requests for comment for this article. Shumaker told the Gazette the HJSMS investigation is still ongoing.

Shumaker stressed that the disappearance of the funds was an isolated incident in the 16-year history of the Boston Main Streets program. She said that the city is still confident in the Main Streets model, and noted that the National Trust for Historic Preservation, which runs the national National Trust Main Streets Center, reaccredited Boston’s program in July.

While the 18 main streets organizations in the city—including HJSMS, JP Centre/South Main Streets and Egleston Square Main Street in JP—are independent, private nonprofits, their fates are largely guided by the city.

The local nonprofits were all founded in response to requests for proposals put out by the city’s Boston Main Streets program. Additionally, the city is their main funder, and the scope of the work that they do is closely defined by contracts that they sign with the city, a Gazette review of the contracts found.

The city covers Main Streets directors’ $30,000-a-year salary, and a city-managed private foundation provides each of the 18 groups with about $25,000 for operating costs each year. The funding largely comes from federal Community Development Block Grants and local neighborhood development funding. They all also do private fund-raising, with varying degrees of success.

But the contracts also state that the nonprofits are “exclusively responsible for all debts” they accrue and are otherwise responsible for their own finances. That is in line with laws governing nonprofit corporations, nonprofit lawyer Jeffrey Hurwit told the Gazette.

The contracts stipulate that the local organizations have to hold at least three events per year, one fund-raiser, one customer-attracting event and one “special” event. They also require Main Street organizations to maintain a functioning safety and cleanliness program; and up-to-date lists of priority storefront improvement projects and “infrastructure and streetscape needs.”

Failure to comply with those and other terms could result in the suspension of funding and could place “the contractor’s status as a Boston Main Streets District in jeopardy,” the contract states.

Hurwit told the Gazette that, in general, public-private partnerships like parks friends groups “have become increasingly popular as budgets have been getting cut in the last twenty years.” They allow donors to support local projects they are interested in and give local communities a greater voice in the issues that the groups are formed to deal with, he said.

In general, one drawback of the set-up is that it is sometimes unclear “who is calling the shots,” Hurwit said. But, “From a nonprofit law perspective” Main Streets’ mission being largely determined by the city “is fine,” he said.

 

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