Unaccounted for Kiewit Pacific funds released to the senior
Tough Love Is Necessary To Wean
Senior Service Association
Off CSD Bail Outs
association should be returned to the community's fund !
CSD Board holds a duty to monitor all dispursements and use of the special designated funds.
• Editorial •
December 14, 2012
Challenging an iconic and beloved institution in any community will
strike a tender nerve with many; and so it is with the Newberry Springs Community Alliance
taking a position that the Newberry Springs Senior Service Association needs a change in its
This need was dramatically illustrated at the October 2012
Newberry CSD general meeting when the seniors' association came forth and requested funds
for an operational bail out for the third time!
According to the Community Alliance, the dependence by the seniors
upon CSD financial rescues has become chronic. The seniors were previously given $13,000; then
$20,000; and now they are currently seeking $24,000 for a year from the CSD as their operational
deficits seriously deepen. For years now the senior association has demonstrated an
inability to reverse its growing red ink.
The fund money is a "trust."
The source of the seniors' bail out funds is the Kiewit Pacific community fund.
This fund, originally $350,000, was acquired from Kiewit Pacific in November 2004 in
settlement of the CSD's removal of an appeal that was made by the CSD and local citizens against an
operational permit granted to Kiewit Pacific by the county. The appeal
was made to block Kiewit Pacific from meeting a contractual deadline. This forced
Kiewit Pacific into a monetary settlement. Note: Other conditions of the agreement
were more costly to Kiewit Pacific than the cash-out.
The Kiewit Pacific settlement contract states in part: "Kiewit in
its desire to contribute to the overall well being of the community and as a new community
business with the support from the CSD shall contribute to the community through the CSD a
donation in the amount of $350,000. This donation shall be distributed by the CSD in the
sums of $20,000 for emergency services and $330,000 to be used at the discretion of the CSD
for the benefit of the community."
The Community Alliance feels that it can be meritoriously argued that
the donation was given under the expressed written stipulation that the money was given for the
exclusive "benefit" and the "overall well being of the community;"
and that the CSD was vested ("shall be distributed by the CSD") as the custodian (trustee)
to distribute the funds at its discretion "for the benefit of the community."
Now eight years after the gift was given, the reasonableness of the CSD's
discretion in handling the fund distribution is being considered by the Community Alliance as a
fiduciary breach of the CSD's duty. The contractual $20,000 for emergency services was
quickly used by the fire department; but the Community Alliance points to funds that have been
lost on the purchase of a road grader that has had no benefit to the community and which the
purchase was hotly argued; the fund has been gutted of $33,000 that is financially unaccountable
with the senior association; and other portions of the fund that have sat idle and haven't been
placed to beneficial use after eight years.
CSD conducted a community survey in December 2004.
As part of the CSD's proper due diligence in initially handling the
agreement, the CSD in December 2004 prudently conducted an extensive community survey to find
the community's highest priorities and compiled the respondents' responses in early 2005.
The survey revealed that the community primarily wanted road improvements and recreational
opportunities for its youth. Interestingly, only two respondents to the survey wanted any
of the donated funding being directed to the senior association. Despite the CSD having
acquired the community's directive, the CSD has failed for eight years to perform its
duty to use the funds for the highest and best use as designated by the community.
Trust funds are special.
The Kiewit Pacific funds were donated as a gift to the
community and are not part of the CSD's reserve or general operating funds. Therefore,
the funds have represented a unique opportunity for the community to leverage the funds with
outside grants for the construction of long term infrastructure; such as a recreational facility
for the community.
Rather than directing the funds for such a purpose, the Community Alliance
notes that the CSD appears to be using the money as a reserve slush fund and breaching its duty by
draining the fund to money losers that do not represent the best management and long term benefit
for the community.
The community's funds that have been directed to the senior
association have apparently not been monitored by the CSD nor by the senior association itself
as to what true value (if any) is being returned to the community. Rather than demanding a
forensic audit for an accountability of the trust funds previously given for senior association
services, the CSD now appears to be poised to give more funds under similar losing
conditions. As overseer of the funds, the CSD has been seriously breaching its duty,
according to the Community Alliance.
To stop the cascading momentum of the Kiewit Pacific community fund from
being further depleted to what the Community Alliance feels is a mismanaged private operation,
the Community Alliance has taken a 'Tough Love' position in a very public wake-up call.
The senior association should not be allowed further Kiewit Pacific community funds.
The senior center's operation provides a service that is respected
and appreciated within Newberry Springs. Yet, some seniors do not want to tolerate
the continuous mismanagement involving red ink; and don't wish to further injure the community's
ability to build much needed infrastructure, especially for future generations.
Newberry CSD's duty over the community fund.
The CSD was given control of the Kiewit Pacific funds (as a
vested trustee-type administrator) and the CSD holds a discretionary yet fiduciary
responsibility to manage the funds to the 'Highest and Best Use' for the betterment
of the community. As trustee, the CSD is responsible for the money but does not
own it as the funds were a gift "to the community."
In holding a trustee relationship, the CSD is responsible for any
mismanagement of the fund; including any lost, missing, or unaccountable funds that the CSD has
allocated under its control; as the funds were given with the stipulated direction "for the
benefit of the community." As a principle co-signer to the Kiewit Pacific agreement,
the Newberry CSD contractually obligated itself to the expressed terms and conditions of the
Under the earlier survey undertaken by the CSD itself to establish the
community's designation of the 'Highest and Best Use' for the establishment of the designated
use of the funds, the senior association had only two votes from the entire community!
If the CSD cannot demonstrate that it has properly distributed and
monitored the funds allocated under its control to the highest and best designated use, then
the CSD needs to replace any misused or unaccountable funds to the community fund.
On target is the $33,000 previously allocated to the senior
association in which no expenditures for the performance of contracted services have been
publicly demonstrated. Where is the CSD's monitoring? If portions or all of these
funds cannot be financially accounted for in benefiting the community to the highest and
best use as directed by the community, then any unaccountable funds allocated to the senior
association must be replaced to the community's fund. The CSD as the trustee overseer of
the community trust fund holds the liability and the fiduciary duty to see that this is done.
CSD is also responsible for collaterial damages to the community.
The CSD is responsible for the damages that the community has suffered
from the lack of benefits resulting from eight years of nonuse of the designated funds;
funds that could have been used for youth recreational needs. The community has lost
the opportunity for a youth recreation facility that could have existed for one entire generation
Attacking the messenger.
A few members of the community that do support the current
senior association's management have attacked the Community Alliance's recent editorials.
These management supporters have voiced knee-jerk accusations that
the Community Alliance's statements are based upon false and unsubstantiated information;
and that the Community Alliance is attempting to ruin an important Newberry institution.
These supporters do not wish to acknowledge the 'wake-up' call that the senior association's
management are the ones that have been slowly ruining the organization as clearly demonstrated
by the continued financial bail outs.
In a small community, there is the human behavior of supporting
long time friends and neighbors; this can become political and obstruct the recognization
of business reality. As the small senior association's membership may have its best
management available; courses in business and financial training may be the best remedy.
Facts are facts, and the paperwork held by the Community Alliance
(some documents are now linked in the editorials) substantiates the truth of the editorials.
Like Social Security, the direction of the senior association cannot financially continue unless
modified by competent management.
When a business seeks a loan, it must open its financial records for the
lender to view any irregularities. The senior association wants public bail out money
but refuses to open its books to the public.
The Barstow Senior Center has the last several years of its full
financials publicly posted to the Internet, online 24/7 for the world to inspect.
Most nonprofit 501(c)(3)s want to be transparent. What is the Newberry Springs Senior
Service's management trying to hide?
Like an addict taking money from others, the first step to recovery
is admission of the problem. Unfortunately, the senior association does not appear
ready to admit that their management is the problem. Rather, the seniors' management is
pointing to other factors; not their management's incompetence to foresee and timely manage those
The Community Alliance continues its excellent reporting; the seniors
association's disgruntled attacks against Community Alliance only demonstrates the unwillingness
to acknowledge the root cause of the senior association's chronic problem.
• • •