Public Watchdog.org

Are City Donations To Private Charities Unlawful? (Updated 05/24/10)

05.24.10

A little over a year ago we first questioned why the Park Ridge City Council was simply giving away $187,000 of public funds to certain private community organizations (“Public Subsidies Demand Transparency,” 04/27/09).  The Council went on to raise that amount to $246,000 on May 18, 2009, which did its share to contribute to the past year’s multi-million dollar deficit. 

According to the published agenda and memo [pdf], at tonight’s Committee of the Whole (“COW”) meeting the Council will discuss the actual appropriation of the $190,080 to those various private community groups that was budgeted by the Council last month.  As you will recall, that’s one of the categories of expenditures that Mayor Dave Schmidt, in his veto message, suggested should be cut – a suggestion that got the silent treatment from every alderman except Joe Sweeney (1st). 

So we think it’s a good time to question why the Council is once again giving away indiscriminate sums of increasingly scarce public funds to private organizations, but this time with greater emphasis on the Council’s legal authority to make such donations – especially when those organizations can use the money however, and wherever, they choose with absolutely no strings attached and no requirement that they account to the City or its taxpayers for that use.
 
It seems as if our public officials – save, perhaps, for Mayor Dave Schmidt and Ald. Sweeney – believe they’ve got the authority to do whatever they want in this regard.  Either that, or they merely are blissfully ignorant of the legal scope of their authority altogether.  But we can’t find anything in the City Code that empowers the Council to donate public funds to anybody.  

And the Illinois Constitution seems to forbid such donations altogether by providing, in Article VIII, Sec. 1(a), that “[p]ublic funds, property or credit shall be used only for public purposes.”  

What specific “public purposes” are served by giving away City funds to these organizations without making darn certain that every penny is used solely for Park Ridge residents to provide specific, corresponding quid pro quo services for the money?  And where in the Illinois Constitution, the Illinois statutes, or the Park Ridge Code does it prescribe or even permit such donations? 

As we noted a year ago, the words of Congressman David S. “Davy” Crockett remain instructive on this point: “We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money.” 

Notably, in that same speech Crockett personally offered to donate one week’s pay to the charitable interest in question, and he encouraged his colleagues to do likewise so that the amount raised privately would compensate for, and even exceed, the public funds not being appropriated.  But, tellingly, after heeding Crockett’s words and voting down the private charitable appropriation, not one of those members of Congress who advocated donating public funds offered a dime from his own purse.  

As we’ve written before: If these private organizations can show that they provide essential City services and do so less expensively and/or more efficiently than the City can, then the City should be contracting with these organizations for specific services.  That way, these organizations could get fair value for the services they actually provide to Park Ridge residents; and Park Ridge taxpayers would finally get accountability for the money going to these private organizations. 

Why hasn’t the City Council ever done this?  

We can think of plenty of reasons, especially given the propensities of the majority of aldermen currently inhabiting the seats around The Horseshoe.  But this problem isn’t the creation of the current Council: it also was standard operating procedure for Councils past, although it escaped scrutiny because more favorable economic conditions and more of a “herd” mentality allowed past Councils to quietly ignore it. 

Even if these contributions are completely legal, however, we believe they are foolish and extremely bad public policy.  But the absence of any readily ascertainable legal authority for them makes their legality the more pressing issue. 

Will any public official have the nerve to question the legality of these donations, or will they continue to bury their heads in the sand while blithely giving away more public funds even as they cut truly “essential” City services?  

Update (05/25/10): A knowledgeable reader just directed us to a provision, (”CPS 6?)[pdf], of the City’s Policy Manual, which was only recently added to the City’s new website.

That provision permits use of public funds for private non-governmental organizations “in limited circumstances…when such organization provides a service that is deemed to be of substantial benefit to the community” – but only if the City first determines that: there is a “need for offered service(s); there will be a “benefit for [sic] such service(s)”; the level of “[p]rivate financial support for the service(s)”; and the extent of the “volunteer support for the service(s).”  

Because City policies don’t trump the Illinois Constitution or state statutes, however, we still believe the lawfulness of the City’s actions, and even this Policy provision itself, are in doubt.

Not only that, but over the past two years we have seen and heard nothing in the way of hard evidence, either from the organizations themselves or from the City, that establishes a specific “need” for, or a specific “benefit” from, any of the “services” purportedly provided by these organizations, much less any meaningful discussion of the “private financial support” and the “community volunteer support” for these organizations or their services.

In fact, we’d hazard a guess that none of those factors have been given serious consideration – and we don’t mean the “$8 of services for every $1 of City donation” idle speculation offered by Alds. Allegretti, Ryan and Wsol, among others – since this policy was last revised in 1991. 

But we thank our reader for providing this resource material.