Red Flag on Spencer Trust Spending
Barrington Town Councilor Ann Strong stirs debate on the type of allocation that should be allowed by the trustees from the Amey Tucker Spencer Fund.
A red flag was raised at the second meeting in two months – after meeting usually once a year -- of the Barrington Town Council and finance director sitting as the six trustees of the Amey Tucker Spencer Fund on Monday, March 4.
The red flag involved the type of allocation the money in the fund, known as the Spencer Trust, should be used for. It came when the trustees got to the agenda item on “previous expenditures.”
Town Councilor Ann Strong believes allocations from the $3.357 million fund should be given only for needs that meet “the true spirit of the will” of Wilton H. Spencer, who died in 1936. His will set up the trust fund.
Strong pointed specifically to a $200,000 loan given to the developer of the Walker Farm Lane affordable housing development.
“I don’t think that fits in this spirit,” Strong said, even though the Spencer Trust by-laws list affordable housing as one of the social services to be delivered to “poor and unfortunate persons” in Barrington.
Gary Morse of Barrington, a frequent critic of affordable housing in Rhode Island, agreed. He said candidates for Spencer Trust aid should not be people who have $90,000 a year incomes, which qualifies them for those subsidized homes.
In determining an appropriate allocation, Morse said, “it might be better to look at what the Spencer Trust isn't” -- not what it is.
Either way, he said, people in Barrington who are on food stamps or are getting heating assistance – not people from outside of Barrington who are able to buy affordable housing here – would appear to be the appropriate targets of the trust fund's allocations.
Barrington Solicitor Mike Ursillo, whose law firm was paid out of the Spencer Trust fund for legal work tied to the closing for Walker Farm Lane, said: “You can certainly determine how the money is spent going forward.”
The by-laws seem to limit the spending of the money to tax-exempt, charitable organizations that can deliver social services to the poor, including but not limited to affordable housing, house repairs, transportation, meals and education.
Town Councilor Bill DeWitt proposed setting up a separate 5 to 7 member commission similar to the Housing Board of Trustees to disburse the funds.
No other trustees supported that proposal after Ursillo said Spencer's will was silent about who should administer the fund except for the “town,” which is interpreted to mean the Town Council.
No matter the type of allocation, Huff said, the trustees can only spend around $84,000 a year – the interest from investing the funds with a conservative strategy. They can’t dip into the principal.
There is about $339,000 in interest that has built up and is available to spend, Huff said.
Gary Morse
6:56 am on Friday, March 8, 2013
Answers have not been forthcoming by the legacy Town Council members as to why this Trust sat on the shelf for almost 2 1/2 years after 2005 with no disbursements.
Further, why is a 2005 Trust that is supposed to help Barrington residents in need only being publicly discussed in 2013?
Affordable housing is not a proper initiative since the Trustees have no control over who buys an affordable home. Qualified buyers of affordable housing can have annual incomes over $100,000, and have unlimited amounts in a bank account. How are these people "poor and unfortunate" being the requirement for people who are helped by the trust.
Councilor Strong made the best suggestion at Monday nights meeting. The Trustees should hire an attorney qualified in trust work to set up the trust in accordance with RI laws. This work should have been done 8 years ago.
Beverly Romano
7:17 am on Friday, March 8, 2013
Why do they always need to hire and pay someone to do something that is basically common sense? This trust was already set up years ago. From 1936 it would be interesting to know about its activity over the years. It should be published on occasion. ...and now they want to pay (from which account or whose tax dollars) to do something they should have done right along. Absolutely brilliant.
Gary Morse
7:45 am on Friday, March 8, 2013
Beverly,
The trust was with the Spencer heirs from 1936 to 2000. The heirs filed a lawsuit in 2000 over the contention that their payments prior to 2000 were too low. The lawsuit was settled and the trust finally came to the town in January 2005.
As far as getting an attorney to tell the Trustees what their duties are under the terms of the will, that is not uncommon. Common sense and the law can often produce very different outcomes.
At the moment, not getting professional legal advice may leave the trustees in a vulnerable position. Consider the duties to reconcile the prior disbursements that took place between 2007 and 2012 when there were no named Trustees on file with the AG's office in a Charitable Trust Registration Statement.
The trustees are fiduciaries and cannot pull a George Bush "who could have known" excuse.
Lorraine F
8:00 am on Friday, March 8, 2013
I'm just glad that this trust is no longer being hidden from the rightful beneficiaries.
The entire town council has a duty to clear this mess up via an independent third party review. The legacy council members should be ashamed of themselves for hiding this trust from town residents for so long.
How many people in need went without help for the past 8 years because the trust funds were being saved up for special council projects?
PatchReader
9:01 am on Friday, March 8, 2013
I would agree with the idea of a separate group administering the funds & grant. Having the Council do it involves too many conflicts of interest, even with the trust being set up per RI laws. We can't depend on community watchdogs to keep an eye on the Councils actions all the time.
Gary Morse
9:42 am on Friday, March 8, 2013
PatchReader,
There is a group like this already who were doing the Spencer Trust Fund allocations. It's the Barrington Housing Board of Trustees. The problem is that they have received no guidance from a trust specialist on how to handle these matters.
On December 18, 2012, West Elmwood Housing went to a Housing Board meeting requesting that funds from the Spencer Trust be used to give "add-on" mortgages in order to sell the remaining homes at Walker Farms. The terms were not discussed, but it appeared these would be in the form of foregivable mortgages. The comment was made by a board member "This is what the Spencer Trust is for".
Not discussed was the fact that West Elmwood Housing had already been given $715,000 from RI Housing for the same purpose of paying West Elmwodd Housing an additional amount in each sale. Why the Spencer Trust was going to be used to supplement the $715,000 was never brought up.
When the question came up as to the legality, the point was made that there was no money to get legal advice for the Housing Board.
The council decisions are more open and I believe it is better to keep this very public based on the history.
PatchReader
6:57 pm on Friday, March 8, 2013
Gary,
It still seems as though a "Housing Board" could have an inherent bias, compared to a truly independent board of volunteers. I sit on the board of a foundation and have great fun giving away money to worthy groups & individuals, while following a relatively simple set of guidelines.
In the moment
9:59 am on Friday, March 8, 2013
Would be great to see some truly judicious oversight of this fund and any other resource like it that is part of the Town. How about providing some of those funds to TapIn - the group that most truly advocates for the needy in the community? Their volunteers are tireless, and the organization overall could really use a better space to work in.
Jen
12:44 pm on Friday, March 8, 2013
I agree that in the spirit of the trust Tap-in clearly falls in the category of "poor and unfortunate persons". Let's also think about the elderly who often can't afford their prescription medications or to make basic household repairs. Granted, we live in a town where this isn't as big a problem as in other areas but it still exists. If the Town would put the word out that they have this money to give to a truly worthy cause they would be inundated with ideas.
Gary Morse
3:45 am on Saturday, March 9, 2013
Jen,
You are correct that we can use the money in better ways such as for elderly home repairs.
In Barrington, there is also the Community Development Block Grant home repair fund which is a program similar to the Spencer Trust, only a lot more money than the Spencer Trust.
Residents might say "what home repair program?". That's because just like the Spencer Trust was well hidden for 8 years, the CDBG home repair program funds are quietly being redirected over to affordable housing developers.
Compare for example our largely unknown home repair program against the Town of Smithfield's similar program:
http://smithfieldri.com/planner/cdbg/
Now look for this program on our town website (hint - you won't find anything similar).
I spoke to the Smithfield Town Planner and he said that their CDBG home repair money is used up before it even arrives because the town residents are fully aware of the program.
What we have in Barrington are town officials preoccupied with working for affordable housing developers, not town residents.
This situation has become out of control. Our entire list of public officials from the town council down has abandoned resident interests in favor of affordable developers.
The fact that there has been no investigation on how affordable developers have hijacked our limited CDBG funds, along with most of the money out of the Spencer Trust, is a complete failure of our town government.
B/STOCK
12:04 am on Saturday, March 9, 2013
I seems every day something new comes along that pushes me one step closer to moving out of Barrington & R. I. What a shame it is for a few to try to turn a jewel like Barrington into your normal R. I. town
Beverly Romano
8:03 am on Saturday, March 9, 2013
WoW. Gary has certainly done his homework on this. This is great new information which i (and I'm sure many others) are not aware of. This information should be made public in the local Barrington Times. Further, what is all this excitement and rush of late years with the affordable housing here in town. There are so many other cities and towns larger than Barrington. What's the jackpot advantage by doing this all over Barrington? Federal tax grants? More town tax dollars as income? There has got to be more than just stockpiling house on top of house with 5,000 sq ft lots. Not to mention the additional traffic. Does this mean Barrington needs to hire additional staff? Lastly, affordable housing prices? What are now the income levels/number of family member criteria to qualify? Eventually all the "native" and/or long- time residents in Barrington will think about leaving...then the entire town will become affordable with "for rent" and "for sale" signs on every other street ! !
Gary Morse
9:26 am on Saturday, March 9, 2013
Thanks Beverly!
These programs are available to low income residents, but our Town officials have an agenda, and it's not weighted to help our current low income residents. Keeping the programs out of sight is one way to slowly redirect the money over to affordable housing developers.
Yesterday, there was a meeting at the town hall (but not posted on the town calendar) where West Elmwood Housing made a pitch that instead of the town going for more CDBG home repair money, West Elmwood wanted the money given to them in order to improve their profit margin on the Walker Farms project.
They didn't say what the current profit margin is, nor did our Town Planner ask during the meeting.
Here is a list of the subsidies already received for Walker Farms:
1) A Spencer Trust Fund disbursement not paid back to the Trust in an
approximate amount of $6,000 for development work.
2) A no-interest loan of $123,000 from the Spencer Trust which was paid back, but with an investment loss to the Spencer Trust.
3) Barrington CDBG funds of more than $500,000 to purchase the Walker Farm land from the Souza estate on November 14, 2007
3) RI Housing Resources Commission - The Home Investment Partnership Program for $600,000 (as recorded in the town land records).
4) RI Housing Resources Commission - The Building Homes RI Agreement, for
$715,000 (as recorded in the town land records).
Now they want more. Who is our Town Planner working for?
Gary Morse
9:44 am on Saturday, March 9, 2013
You can read about the HUD CDBG program at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/communitydevelopment/programs
Eligable activites are stated as:
"...each activity must meet one of the following national objectives for the program: benefit low- and moderate-income persons, prevention or elimination of slums or blight, or address community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available."
The above "benefit low- and moderate-income persons" criteria should not be expanded to encompass "improving the profit margins for affordable developers" as our Town Planner seems to want us to believe.