On July 6 th the Lompoc City Council considered the potential formation of a nonprofit corporation to be managed by the city. This idea originated on March 19, 2019; a motion for the staff to “return at a future date with information on the legal costs of forming a California nonprofit organization to fund City projects” passed on a 4-1 vote (Councilmember Victor Vega voted no).
According to the staff report, the purpose of this nonprofit would be to “create an entity that could apply for grants from non-governmental organizations, and to make it easier for individuals and entities to donate money for city purposes by allowing them to donate to tax-exempt organization.”
As Noozhawk reported: “City officials have said that the fire and police departments preferred not to accept contributions directly from the cannabis industry, although council members have remained divided on whether that provided the impetus for creating a new foundation.”
This issue may be resolved by voters this September when a local cannabis manufacturers tax appears on the ballot.
Unlike other privately organized and managed nonprofits whose purpose is to benefit public safety, parks and recreation or the arts, this nonprofit would be operated by a board of directors consisting of the city manager, who is a non-voting member acting on the direction of the board of directors as the executive director, one councilmember as the chairperson and the chairs of the Public Safety Commission, the Beautification and Appearance Commission, the Library Commission, and the Park and Recreation Commission; and two representatives of businesses located in the city of Lompoc.
The privately run nonprofits have provided many successful projects over the past few years that benefit the entire community at no cost and used no city staff time. Softball fields have been renovated, a bike skills park built and maintained, Little League fields overhauled, and citywide beautifications projects completed.
Although the directors of the new nonprofit would receive no compensation for serving on the board, Councilmember Dirk Starbuck suggested that this wouldn’t be without cost to taxpayers; in addition to start up filing costs the staff report indicated that “staff time will be required to provide administrative support, financial services including accounting, applying for grants, preparing state and federal filings, and preparing staff reports and gathering other information to advise the board of directors, as needed.”
Starbuck asked pointedly: “How much money are we going to sink into a nonprofit initially to start it? It looks like several thousand dollars because we don’t do things real fast, and it will take staff time to prepare a bunch of paperwork.“
Starbuck continued: “This is going to be an ongoing cost,” for staff to prepare grants and file necessary paperwork with the granting agency.
Councilmember Gilda Cordova then pointed out that the city already employs a grant writer, so a new employee wouldn’t be hired to do this job. And, Mayor Jenelle Osborne said most grants include “administrative costs” to manage the grant and prepare reports. Thus, many of the overhead costs would be absorbed as grants were received.
A motion to accept the staff report and direct formation of the nonprofit included the nomination of Councilmember Cordova to be the first chairperson of the newly founded nonprofit and rename it as the Lompoc Community Benefit Foundation. The motion passed with a unanimous vote.
The creation of a foundation like this, managed by a local government entity isn’t new. Whether it succeeds or not is an open question. As Councilmember Jeremy Ball pointed out, and the city attorney affirmed, the council can always dissolve the nonprofit if it doesn’t work.
Now the hard work of soliciting other privately operated nonprofits and potential contributors to team up with the city operated nonprofit will start. It’s not unheard of for people to have concerns about the government overseeing the use of government or private grant funding and they may want to retain some control over how the money is spent.
The proposal that was approved offers no opportunity for the privately operated nonprofits to have any control if they provide grant funding for a project.
The foundation is set up to issue tax receipts, some may be more willing to donate more than they currently do through their utility bill (Library, Human Services, Mural Society, etc.) or make larger donations for the first time to gain the benefit of a tax deduction.
We’ll have to wait and see how this all works out.
— Ron Fink, a Lompoc resident since 1975, is retired from the aerospace industry. He has been following Lompoc politics since 1992, and after serving for 23 years appointed to various Lompoc commissions, retired from public service. The opinions expressed are his own.
