Vice Mayor: Segurola Attack on KB Foundation is “Ugly”

Council Member Katie Petros, left, looks at Council Member Iganacio Segurola during a discussion about funding for community programs administered by the Key Biscayne Community Foundation, June 18, 2019. Segurola said the Foundation should cease administration of the programs. (Key News/Tony Winton)

Key Biscayne Village Council Member Ignacio Segurola is taking aim at the Key Biscayne Community Foundation, saying the charity should no longer administer several programs for Village residents including work with the elderly, the Historical Society,  the Freebee shuttle program and the Fourth of July Parade.

His comments came during a budget workshop last Tuesday where the Council is considering a request from several community groups for at least $253,000 in the 2020 budget that would be administered by the Foundation.

Segurola, who said he could not get enough documentation to review current spending, said the contract between the Foundation and the Village for services in return for office space “creates the appearance of impropriety.”

Several Council members immediately shot back.

“It’s ugly,” said Vice Mayor Allison McCormick, as she leaned over to Mayor Mike Davey while Segurola continued his broadside.

“You’re the one who is creating the impropriety,” she said, interrupting Segurola. McCormick said his leveling of accusations in a public forum, even as he admitted he didn’t have facts, was not responsible.

“It’s a big problem,” Segurola insisted, saying if he couldn’t get his questions answered, neither could taxpayers.

“It isn’t a big problem,” responded Mayor Davey, who said he will work with the Village manager to make sure all documentation for spending is provided.

Jennifer Stearns Buttrick, the Foundation’s attorney, said the organization’s tax return is a public record and it files quarterly reports with the Village. “Many of the statements were derogatory and false,” she said. “He chose to get up on the dais, ignorant.”

Segurola’s main contention was that as a policy matter, private entities should not administer Village programs, because, he said, that is more properly done by the administration.

But in fact, millions of dollars of Village services are already administered by private contractors, ranging from garbage hauling to tree trimming to traffic crossing guards. Indeed, the Village Manager has said she plans to outsource more Village work: she privatized code compliance operations earlier this month. Segurola joined all of his colleagues in approving the privatization contract unanimously.

According to the organization’s  2017 filings with the IRS, it spent about 97% of its income on programs, which would place it among highly efficient charities. Charity Watch, a leading nonprofit watchdog, considers a charity to be highly efficient when the program percentage exceeds 75%. It did not rate the Foundation.

The Foundation and the Village use different tax accounting years, so comparing year-to-year figures is not straightforward. In 2017, for example, the charity reported $472,707 in funding from the Village on its tax return.  The Foundation says $225,051 of that was for the Freebee ride service. The remainder was spent on a mix of directly-run programs, such as the Citizen Scientist program, and “pass-through” funding to other groups that use the Foundation’s charitable infrastructure. By doing so, those groups can accept both donations and government support and minimize overhead, Buttrick said.

For Freebee, Buttrick said the charity simply passed invoices along at cost and did not charge the Village any administrative expense. She said the ride service was launched by the charity at the Village’s request because it could get the program running faster than the government could. A plan to transfer the program to the Village is being discussed, but Manager Andrea Agha was not available for comment on the projected financing nor other aspects of the budget.

Nationally, municipalities outsource about 20% of service delivery to for-profit companies; about ten percent goes to non-profits like the Key Biscayne Community Foundation, according to a recently published study by the International City/County Management Association. In Florida, many state and municipal services are administered almost exclusively by nonprofits, ranging from foster care to museums and cultural programs, Buttrick said.

Chamber of Commerce Next?

When Council members pointed out that the Key Biscayne Chamber of Commerce also uses village office space, Segurola said he wanted to look at that relationship as well. The Chamber  promotes island businesses and tourism and maintains a visitor center. It is seeking $81,000 in 2020.

Council Member Ed London questioned Segurola’s concern over relatively small portions of the Village budget. “You’re concerned about $500,000 – $600,000,” he said, “But you haven’t raised a damn thing about the $30 million that we spend that is not transparent to anybody.”

London said previous Councils approved outsourcing work to the Foundation to provide services more efficiently than the Village could.

EDITOR’S NOTE:  Key News nonprofit parent company, Island Media Inc., receives private donations and back office support via the Foundation’s charitable structure. Neither Key News nor Island Media receive taxpayer funding.