Emails show city ignored financial warnings from Glenwood art center
May 22, 2017
Board members and staffers from the Glenwood Springs Center for the Arts tried to alert the city of Glenwood Springs to red flags at the nonprofit starting in 2015. But until recently, city officials brushed off those concerns.
Glenwood Springs police are investigating art center finances, an investigation that started days after the former executive director Christina Brusig resigned in early April. Since then the city has cut off funding for the art center, and the nonprofit has severely cut back its operations amid a forensic audit. For a couple of weeks, the organization's board was weighing whether to shut down for good.
Results of a Post Independent open records request for city emails about the art center's finances show tips to the city, first in 2015, then again in 2016, about the nonprofit's financial troubles.
Documents provided to the PI also show that art center board members last month discovered multiple bank accounts, accounts that had been overdrawn and bounced paychecks, among other issues.
The first known tip came in September 2015, when two art center board members, Karin Cooper-Phelps and Annie Olson, emailed Jeff Hecksel, who was then the town manager, with a list of concerns about the nonprofit's finances and operations. Those concerns centered on Brusig's management.
"The Art Center is not only in financial crisis, but is being poorly managed. I'm not sure if the city can do this, but I would suggest an audit of the (art center's) books," they wrote. They resent the email to Hecksel after apparently hearing nothing for two weeks.
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The city manager then forwarded that email to Brusig, saying, "From my perspective, the City has no oversight responsibility for the (art center). The City's responsibility to ensure the agreements between the City and the (art center) are fulfilled."
The information Cooper-Phelps and Olson provided had also gone to the art center board but apparently with the same results.
A former art center bookkeeper, Jessica Kidd, resigned around September 2015, saying the stress of the nonprofit's financial issues had become too much for her. "During my ten years working as bookkeeper for the Center for the Arts, I have never seen the Center for the Arts in such poor financial shape," Kidd wrote in her resignation letter, which Cooper-Phelps and Olson recently provided the city.
"When I have tried to address these concerns with Christina, she has told me not to worry. But I do worry. And it's been keeping me up at night for quite some time. I simply cannot afford to continue to have this level of stress in my life."
Then in May 2016, another art center insider tried to warn the city, this time headed by acting City Manager Drew Gorgey. Dana Peterson, a former ballet instructor at the art center, called him with concerns, specifically about the art center's financial management.
In an email to the city's human resources director, Gorgey wrote that she was concerned with Brusig's management, teachers going unpaid, how donations from sponsors and other funds were being used and inadequate bookkeeping.
Peterson told the Post Independent on Monday that she also had tried to tip off the city's human resources department twice in 2015.
She asked the city to investigate, because Brusig was technically a city employee. Gorgey explained the city's relationship to the art center in a similar way as Hecksel, emphasizing its lack of oversight responsibility. The city referred her to the art center board, but Peterson wasn't comfortable going that route because the board was "friends with, and favorable to, Brusig," Gorgey wrote. "I know Dana personally, and I have a friendship with Christina, so I likely need to step out of this one right away," he added.
After speaking with Peterson, Susan Kurk, the city's human resources director, wrote back to Gorgey that "I reiterated the City's position as the administrator of payroll and benefits only, and directed her back to the Board of (the art center)."
Peterson said Monday that she taught at the art center for six years, and she was willing to put her neck out and speak up three different times because she loves the organization. She felt like the city had shrugged off serious concerns raised about the art center. She became emotional when she spoke about the art center, though she remains optimistic that community support will pull the nonprofit back into a bright future.
"I don't want to demonize Christina" because the city holds a great deal of responsibility as well, she said. "When you have 10 people calling you about the same issues, you can't be an ostrich and stick your head in the sand."
On Monday, Cooper-Phelps said she believed others at the art center had contacted the city with suspicions about the center's management.
Still missing from the picture is the period leading up to Brusig's resignation. And since news arose about the police investigation, the art center board has been tight lipped about the circumstances of her resignation and what information the board had before that. But immediately after Brusig's departure, emails were flying as the art center staff and board started to realize their financial picture.
"Thanks for meeting with us today. It really has been a rough day; particularly regarding staff upset about the disruption to their lives and their checks bouncing," Kate McRaith, art center board president, wrote to current City Manager Debra Figueroa on April 6, the day after Brusig's resignation. "One employee was upset as her rent was due today, and I didn't really know what to tell her. You'd better believe I'm hearing about it!"
McRaith was looking to secure an advance from the city to get the teachers paid, and the city agreed to pay a $20,000 advance.
On April 10, McRaith wrote to Figueroa that she was "very disturbed" by what they had learned about the art center's bookkeeping issues. McRaith said staff had shared suspicious stories "that involve reputable bookkeepers who (stopped) working at the center because they were nervous about what was happening, disappearances, and replaced hard drives on the financial computer."
Stacey Barnum, the art center board's treasurer, emailed Figueroa on the same day with a list of recently discovered issues. She reported finding accounts that didn't show the history of money that they should have, possibly other art center accounts at a different bank, overdrawn accounts, multiple accounts for Summer of Music, an account that had been closed by the bank after too many days of insufficient funds, money that wasn't there for Dancers Dancing costumes even though parents had been billed for the costumes and costumes that had never been ordered.
Art center staff had also told Barnum "that some information presented at various board meetings concerning grants that had been awarded to the art center, employment of a part time grant writer, and the purchase of a $10,000 grant software program were most likely false," Barnum wrote. "Many teachers have had their paychecks bounce this week and historically we are discovering that payroll has been spotty," she wrote. "Some teacher's checks have bounced more than once."
Figueroa then requested all the art center's financial records starting in 2014, when Brusig became executive director. "It is our intent to have our auditor help us sort through these records," the city manager wrote.
Figueroa also noted in an email to Charlie Willman, the art center's sometimes attorney, that Brusig's final paycheck included a payout of more than 200 hours of vacation, because she did not take any vacation from 2015 to 2017.
Soon after news broke about the police investigation into the art center, Olson and Cooper-Phelps again sent the city the list of concerns they had originally disclosed two years earlier.
They expressed their distress that no one from the city or the board had taken them seriously when they first raised their concerns and requested an investigation. "Had immediate action taken place, with a suggestion from us, to do an audit, the Art Center would not be in the financial disaster that it is now," Olson wrote on April 22.
She also stressed the board's share of responsibility and its lack of attention to the center's day-to-day operations. The last audit of the art center was in 2014, the year Brusig became executive director, and that report showed the center in good shape, wrote Olson.
In an April 28 press release announcing that it would cut off funding for the art center, the city continued to emphasize that it has no supervisory responsibility over the art center and its director.