Newport Library Tiff Widens Into ‘Barroom Brawl’

An embittered and outspoken battle has broken out in the otherwise quietest of places--the Newport Beach Public Library.

It culminated last week in the library’s governing board of trustees throwing the library’s foundation out of the main library building--the very institution it was created to support--although that decision was reversed later in the week.

The fight involves some of Newport Beach’s more prominent residents, and centers on such issues as the library’s main mission and who should control the money that pays for some of its programs. So heated has the debate between the foundation and the library’s board become that the City Council has been dragged into the fray.

“What started as a tempest in a teapot is now a barroom brawl,” said library trustees Chairman Jim Wood, publisher of Coast Magazine.

At stake is about $1.5 million, which the foundation raised and now wants to set aside as an endowment to maintain its roster of speakers and other enrichment programs in the library system. The library’s board of trustees, however, wants control of that money, saying the foundation’s financial operations have lacked accountability.

“The problem is that the trustees are trying to overstep their boundaries,” said foundation Chairman David Carmichael.

This uncivil war of words has caused some in the city to fear a withering of donations and, ultimately, a tarnishing of the library system’s reputation.

“I’m absolutely beside myself with grief,” said Lucille Kuehn, a foundation member and former mayor. “We have to save the library!”

*

Newport Beach is among the few cities in Orange County to fund and operate its own library system rather than be part of the county system. Its airy central library on Avocado Avenue, which opened in July 1994, took national awards for its architecture. And the library has avoided many of the cutbacks that plagued county library branches in the wake of the 1994 county bankruptcy.

The relationship between board and foundation began to fray after the board wrote a strongly worded letter accusing the nonprofit of financial mismanagement. The trustees wanted some changes in the symbiotic relationship in which the 22-member foundation raises funds and the five-member board decides how the money is distributed. Trustees threatened that if they didn’t get greater clarity on precisely how the foundation uses its money, they would kick the group out of its one-room office in the library.

“If [the foundation] wants to use the good name of the library and rent free office space, we need a minimal understanding of how they are conducting their business,” said Wood.

Board members accused the foundation of murky accounting records, skimming the endowment fund and using 50% to 70% of funds raised on operating costs.

But an independent audit found no misdoing by the foundation, despite what trustees said were confusing financial records. The financial gleaning turned out to be a fight over the foundation’s proposed 2000 budget to use the interest from the endowment money for fund-raising.

And the lopsided operating costs turned out to be a fight over semantics. While trustees consider expensive public events, such as the Distinguished Speaker Series and the Manuscript Series, as operating costs, the foundation sees these as programming costs and maintains it has stayed well below the 15% level of total donations on which other libraries operate.

*

The dispute “started small and has spiraled completely out of control,” said Tracy Keys, the foundation’s only paid employee. “This is more damaging to the reputation then anything that has gone on.”

The foundation’s claims gained further support when City Atty. Bob Burnham said that as a private, nonprofit fund-raising group, the foundation legally must have a certain measure of independence.

Trustees maintain that they were just doing their job and trying to be responsible with the donations.

During its six years, the foundation has raised more than $2 million from community donations and has donated more than $500,000 to the library. The rest is tucked away in the disputed endowment fund to help the institution buy books.

At the center of this storm is Wood--a colorful local character and prominent entrepreneur. He has been described as a visionary by fellow trustees and in less-glowing terms by foundation members.

“All I want to be is a catalyst--to get things started,” Wood said.

Some foundation members say the fight was sparked by their refusal to endorse Wood’s vision of turning the library into Newport’s cultural hub. Don Adkinson, foundation vice chairman, said that tensions rose last year when foundation members wouldn’t hand over $100,000 to help the board build arches in front of the library.

Wood and the other trustees called that ludicrous. “I just thought it would be a good idea and that the foundation would like to use it as a naming event in their endowment campaign,” Wood said. Their refusal “was not a problem.”

In line with the effort to turn the site into a hub for community activities, Wood is also spearheading efforts to build a $12-million Arts and Education Center next door.

The foundation refused to support this project. Still, he promoted the project at library events.

In doing so, he butted heads with an equally prominent foundation supporter: Elizabeth Stahr, the force behind the first foundation that raised $2 million to build the library in 1994. Despite Stahr’s accusation that Wood was illegally chairing the library trustees while trying to build interest for the proposed Arts and Education center board, the city attorney decided that there was no conflict.

The two groups spent a few months trying to hammer out an agreement. But that fell apart last week. The fight pitting Newport’s former council members, lawyers, local business leaders and even a former mayor against each other became so heated that last Tuesday the City Council reluctantly stepped in to keep them apart by offering the foundation temporary space in City Hall and proposing to bring in an intermediary. The foundation has embraced the idea; Wood says too much time has been spent on the issue.

“I can’t say that I totally understand,” said Mayor John Noyes, adding that the fight appeared to be a mix of conflicting personalities and old issues. “We’ve got good people trying to do good things on both sides.”