With embezzlement probe underway, Aspen council not ready to give grant to Red Brick
October 12, 2017
Since at least 2008, the Red Brick Council for the Arts has regularly received annual grants of $30,000 from the city's Wheeler Opera House fund, but the majority of the Aspen City Council is second-guessing doing that again in the wake of an alleged embezzlement scandal at the nonprofit.
The Red Brick Council earlier this year requested a $40,000 grant from a fund managed by the city-owned Wheeler Opera House, whose board ultimately recommended $30,000.
But when that request moved up the ladder to the City Council at a work session this week, four of the five elected officials balked at the proposal, at least for now.
"Right now I feel uncomfortable about providing that," Councilman Adam Frisch said Thursday, noting the Wheeler board's recommendation came before the embezzlement probe was made public.
Frisch's discomfort, he said, came in the wake of the city's announcement Sept. 28 that the Pitkin County District Attorney's Office is investigating Angela Marasco Callen, the director of the Red Brick Council from 2013 to 2017, for bilking approximately $150,000 from the nonprofit.
As director of the Red Brick Council, Callen oversaw the management of the city-owned Red Brick Center for the Arts, which is a venue for nonprofit artists and organizations as well as educational camps, classes and other offerings. The Red Brick Council fired her in June, around the time the allegations surfaced. Callen has yet to be arrested or charged with a crime.
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Frisch said he isn't ready to close the book on the Red Brick Council. But he, like Councilman Ward Hauenstein, want further assurances the nonprofit has a solid grasp on its finances before they rubber-stamp another grant request.
"It's really important for the community's sake, for the city's sake and for those artists renting space there that it is being looked after and its programming continues on," Frisch said.
He suggested the city oversee the Red Brick just like it does with other Aspen-owned buildings such as the Wheeler Opera House and the Yellow Brick School, which is home to child care services and some city offices.
Both directors of the Wheeler and Yellow Brick report to supervisors with the city. That has not been the case at the Red Brick, which has operated autonomously under the oversight of the Red Brick Council.
However, a management agreement calls for the Red Brick Center to "keep up-to-date books and records that reflect all revenues and all expenditures incurred in connection with the management and operation of the property." The Red Brick Center also has been required to provide a "detailed statement of all revenues and expenditures" on a monthly basis to the city, though it is unclear if that agreement was actually carried out.
Hauenstein said the Red Brick Council likely will land the $30,000 Wheeler grant — a final decision won't be made until November, and checks to the nonprofits aren't cut until April — but "we need to let them know this is a very serious matter."
Twenty grant proposals from nonprofit arts organization are on the table this budget season; the Wheeler Board has recommended $395,000 in distributions from its fund, with only the Red Brick's being questioned by the council at Tuesday's work session.
Other nonprofits receive grants from the city as well, and Hauenstein said all nonprofit boards and administrators should go through some type of training so they can adequately manage their finances.
"Ultimately, the buck stops with the city," Hauenstein said. "Somebody has to take responsibility for this other than the person who allegedly did this or the board that oversees it. The city is giving money to these nonprofits, and when $150,000 goes missing, you just don't sweep it under the rug and don't do anything."
Mayor Steve Skadron and Councilman Bert Myrin could not be reached for comment, nor could Jackie Kasabach, president of the Red Brick Council.
The lone council person in favor of tentatively approving the grant request was Ann Mullins, who is the council's representative on the Red Brick Council's board.
"I actually argued in favor or the Red Brick because of what happened," she said. "Now might be the time when they need more money than ever, and speaking to its last 20-plus years of service to the community, and to have an event like this, and there's no question it's terrible what happened, but they shouldn't be punished for that."
The Red Brick Council reported revenue of $234,000 with $226,010 in expenses, including $112,954 for employee compensation, on its 2015 tax form, the most recent year available. Callen earned $71,500 along with an additional $7,021 for other benefits that year.
In the meantime, the city has taken temporary control of the Red Brick's finances.
The City Council is in the throes of reviewing numerous components of its proposed budget for 2018. Among next year's expected expenses are nearly $50 million for capital projects and almost $70 million for operations, with total net appropriations of $125.6 million.