Wednesday, May 22, 2013
By Randy Billings rbillings@mainetoday.com
Staff Writer
PORTLAND – Olive P. Cummings died in December 2000, leaving a will that established several endowment trusts. One of them benefited the city of Portland, for the express purpose of planting deciduous shade trees in the Eastern and Western cemeteries.
A maintenance worker tends the grounds in Evergreen Cemetery in Portland. The city’s use of an endowment trust for two other cemeteries has come under scrutiny.
Gordon Chibroski/Staff Photographer
CITY-CONTROLLED TRUSTS AND BALANCES AS OF DEC. 31, 2011
• ALAN ARGONDIZZA, established July 15, 1996, by a former principal of Longfellow Elementary School “to provide campership to needy students at the school.”
BALANCE: $143
STATUS: Active
• ASA CLAPP, undated, to benefit “poor widows, inhabitants of said city, and such married women, who in consequence of neglect or vices of their husbands may be suffering from want for common necessities if life.” Portland Provident Association appointed to distribute the interest.
BALANCE: $26,324
STATUS: Dormant
• CLAPP, no records, intended to provide for orphaned children.
BALANCE: $52,647
STATUS: Dormant
• BAXTER HOSPITAL, established Feb. 2, 1970, “to be used solely for the purpose” of operating the Portland City Hospital, which is now the Barron Center.
BALANCE: $143,613
STATUS: Active
• BAXTER CEMETERY, established Feb. 2, 1970, for the purpose of “keeping in good repair, order and condition the following: (a) The Cemetery Monument of the Baxter Family Lot in said Evergreen Cemetery (b) The Bronze Tablet and Boulder in “Mayor Baxter’s Woods” (c) The James Phinney Baxter memorial of granite and bronze construction of said Baxter Boulevard and accepted by said city.”
BALANCE: $77,865
STATUS: Active
• BAXTER WOODS, Feb. 2, 1970, “in caring for and maintaining ‘Mayor Baxter’s Woods’ in the Deering District of Portland.”
BALANCE: $559,224
STATUS: Active
• STANLEY PULLEN, “for support and improvement of the Stanley Pullen Library of the Portland firemen.”
BALANCE: $4,644
STATUS: Active
• IRA FARRINGTON, Farrington Book Fund to buy books at Portland Public Library. Also named Maine General Hospital and Maine Eye and Ear Infirmary as beneficiary.
BALANCE: $9,459
STATUS: Active
• ANNE FOSS, July 2, 1986, to establish the Anne Foss Curriculum Computer Fund, with income “being used in elementary schools for computer instructions, subscriptions to periodicals, purchases of books or supplies, registration of workshops, seminars to include travel expenses for students and teachers.”
BALANCE: $6,989
STATUS: Dormant
• FRED RICHARDS, Feb. 10, 1972, memo by City Manager John Menario, $15,000 “for the benefit of such deserving persons, residents of Portland, who are poor and needy as may be selected by the trustee.”
BALANCE: $981
STATUS: Active
• HOWARD RUSSELL, “support the boys’ athletic programs in Portland and Deering high schools for the football and baseball programs. In determining support, the city shall have unlimited discretion in allocating the income to the athletic departments for these purposes.”
BALANCE: $88,273
STATUS: Active
• ETHEL STONE, 1957, “Free milk for children attending McLennan School whose parents are unable to purchase such milk.” On March 21, 1974, Judge Dana Childs of Cumberland County Probate Court granted permission for the city to use the funds for “the benefit of needy children” attending Reiche Elementary School, which opened the previous year.
BALANCE: $60,815
STATUS: Dormant
• WILLEY TRUST, 1925, Anna C. Willey Trust for the establishment of the Phineas J. Willey Concerts. “Free outdoor concerts to be given … during the summer months of each and every year – given by what are commonly known as Military Bands.”
BALANCE: $3,585
STATUS: Active
• ANNIE LOUISE LORD, established in 1933, no records, city indicates it is used to buy books.
BALANCE: $10,917
STATUS: Dormant
• JAMES MCKEOUGH, no records.
BALANCE: $2,593
STATUS: Dormant
• MOULTON-WIDOWS WOOD, no records, provide wood (heat) for widows.
BALANCE: $5,690
STATUS: Dormant
• MERLE NELSON, established in 1984, to reward an outstanding teacher.
BALANCE: $3,588
STATUS: Active
• WESCOTT TRUST, established in 1955, for operating expenses.
BALANCE: $256,217
STATUS: Active
But when Donald Talbot, the Cummings trustee, was conducting his annual review of the endowments last year to issue payments to the beneficiaries, he decided to look deeper into the cemetery trust.
"I figured there had to be a lot of money accumulating there," said Talbot, a certified public accountant from Falmouth. "I mean, how many deciduous trees can you plant?"
Instead of finding a well-funded account, Talbot noticed questionable expenditures, including the purchase of large quantities of super humus. After walking the cemeteries with a landscape architect, he believes the material was not even used there.
"They bought a lot of the stuff that sounds like it might have been put in a baseball field, or a golf course, or something like that," Talbot said. "It certainly didn't go to the cemetery."
That may not be the only questionable use of the trust fund. According to city spreadsheets, thousands of dollars have been spent since 2002 on trees for the two cemeteries. But Talbot and the landscape architect observed mostly older trees during their site visit, particularly in Western Cemetery.
"(What we saw) didn't square with what (the city) gave me for records of what they spent," Talbot said. "We couldn't find the trees in Western Cemetery."
Also, about $10,000 since 2002 was spent on removing stumps and pruning trees, according to city records. Expenditures like that technically violate the terms of the trust, which specifically states money can only be used for the "placement of deciduous shade trees."
The confusion reflects the complex, murky world of endowment trusts established by generous, well-meaning citizens to benefit the communities where they live.
While trusts generally seem to serve the purpose for which they are intended, changing conditions, poor record-keeping and other factors can sometimes imprison funds or make it difficult to carry out their terms -- which may have been in place for scores of years.
The issue of outdated trusts is fairly common for municipalities, according to Stephen Langsdorf, an attorney at Preti Flaherty law firm who represents six municipalities in Maine, including Augusta.
He said endowment trusts can sometimes be more work than they're worth, and some municipalities are becoming more reluctant to accept these types of gifts. "These things can get very complicated as time goes on," he said.
Endowment trusts typically have a baseline, nonexpendable balance that accumulates interest, which can be spent by the beneficiary, in this case the city. Trusts outline specific instructions in their wills about how the money can be used.
The city of Portland currently manages 18 such trusts, the principals of which are valued at more than $2.36 million. More than 100 other trusts have been set up for school scholarships and specific cemetery plots. Other trusts are managed by outside entities, which in turn provide payment to the city.
As of Dec. 31, the endowment trusts had an expendable balance of about $1.3 million. But more than $105,000 of that expendable balance cannot be accessed by the city, mostly because the trusts have outlived their original purpose, according to Portland City Hall spokeswoman Nicole Clegg.
For example, in 1845 Asa Clapp established a $4,000 trust, with the interest intended to benefit "poor widows, inhabitants of (Portland), and such married women, who in consequence of neglect or vices of their husbands may be suffering from want for common necessities of life."
(Continued on page 2)
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