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Legal Battle Over $1.6 Million for Santa Monica Youth Center Ends

Santa Monica Real Estate Company, Roque and Mark


Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

By Jason Islas
Staff Writer

October 7, 2013 -- Santa Monica's Pico Youth and Family Center, which has been embroiled in controversy over the management of its finances, will no longer have to rely on City Hall for its primary source of funding.

After months of negotiations, lawyers managing the estate of late Santa Monica Philanthropist Peggy Bergmann have released $1.6 million to form an endowment the nonprofit.

The money, which will be earmarked to fund the nonprofit's programs and services targeting at-risk youth, will be released to the nonprofit in increments of up to $161,500 annually by the Santa Barbara Foundation.

“We are very pleased that the matter has been resolved and that all the funds bequeathed by Ms. Bergmann will now be utilized to accomplish the good work she intended,” attorney Sonya Sultan, one of the executors of the Bergmann estate, told The Lookout Sunday.

“We wish the PYFC all the best as it moves forward with its important mission to help improve the lives of young people and their families in our community,” she said.

The PYFC recently had its funding slashed by the City Council from more than $300,000 to about $250,000 a year after officials became concerned that the nonprofit was overly reliant on City funds.

In May 2012, City officials said that they found a number of irregularities in the nonprofit's books, including duplicate paychecks for top staffers. (“Santa Monica Youth Center Given Final Ultimatum,” May 21, 2012)

City officials have also expressed concern about possible conflict of interest issues arising because the PYFC's executive director, Oscar de la Torre, is also a member of the School Board.

In order to prevent the nonprofit from losing public funds, de la Torre told the City Council that he would step down as the nonprofit's executive director. However, he remains the PYFC's interim director.

While the organization's leadership began moving toward reform, efforts came to a grinding halt in January after several members of the nonprofit's new board quit. (“Santa Monica Youth Center Recovery Impeded by Internal Battle, Documents Show,” January 4)

It was amidst that struggle that the Bergmann endowment got held up.

Now with a new primary funding source, de la Torre may not have to step down, but that remains unclear.

Since the endowment will likely only fund about half of the organization's expenses, it is unlikely that the PYFC will be able to afford to severe its relationship with the City entirely.

And, if the organization continues to take public money, its leadership will remain subject to the requirements City Hall puts on all the nonprofits it subsidizes.

As of press time, de la Torre had not returned several phone calls and emails requesting comment.

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