The Board of the Roosevelt Island Operating Corporation (RIOC) is looking to give away about $640,000 to benefit Island residents. The funds are left over in the Public Purpose Fund.

At the July 13 Board meeting, its members set aside a resolution brought to the table by David Kraut, a resident member of the Board, who is heading up a Board group charged with making recommendations on distribution of the funds. Kraut had proposed a plan closely similar to past practice, in which the Roosevelt Island Council of Organizations (RICO) and the Residents Association (RIRA) Common Council made recommendations to the RIOC Board. That approach was opposed by a public speaker, Jessica Rademaker.

Kraut responded to a WIRE request for his views on use of the funds, and a means for arriving at the best method. His memo to the Board and his response follow, along with Jessica Rademaker's comments to the Board. Kraut's memo read:

"At the time Manhattan Park was built, it was recognized that the increased population of the Island would make additional demands on our various social infrastructures that were beyond our resources at the time. RIOC negotiated with the Starrett Corporation an agreement that certain Payments in Lieu of Taxes would accrue to the Island to meet these various social needs. These payments, eventually totaling approximately $4,000,000, were labeled Public Purpose Funds. Later, in concert with various citizens' groups, RIOC dedicated approximately 3/4 of the money to 'capital projects,' and reserved approximately 1/4 of the money to future 'social service' needs.

"The 'capital projects' portion of the funds were spent fairly quickly and to positive result. The main beneficiaries were the new Octagon Park and the Cultural Center. The park, with its playing fields, tennis courts and garden plots, is in use virtually year-round, and the cultural center is likewise in constant use for performance classes, public presentations and meetings, and also includes the Island's only synagogue. These expenditures were clearly successful.

"The record for the 'social service' portion of the funds presents less clear results. A large grant for the establishment of an Island-wide social service umbrella agency showed no strong positive result. Various ongoing grants for demonstrated needs likewise 'failed,' in the sense that the agencies thus started or supported failed to attract ongoing funding from other sources.

"Certain fund allocations have been more successful. From time to time we have been approached by various Island agencies or groups which had been long-established prior to the Funds' establishment, seeking temporary or 'tide-over' funds to meet emergency or temporary needs on a 'one-time' or 'ad hoc' basis, and these efforts have been generally useful. The various agencies or entities used the emergency funding to get themselves through their particular temporary short-falls, and then continued to provide their basic service responsibilities through their other, more-regular funding channels.

Problems

"1. The basic problem facing this Agency is whether we should be active in the social service area at all. Previous to the establishment of the Public Purpose Funds, RIOC had no designated social service responsibilities beyond our broad legal mandate to 'operate, manage and develop' Roosevelt Island. The existence of the Public Purpose Funds has caused us to accept a responsibility for which we are neither operationally staffed or equipped nor philosophically prepared. Nonetheless, that responsibility does now exist and will continue to do so as long as Public Purpose Funds exist. We have both a fiduciary and a social responsibility to see that these Funds are dispersed in the wisest possible manner.

"2. The next problem for this Agency is to establish a modality whereby Funds will be dispersed. In the view of this writer, such modality must combine prudence with a willingness to experiment and try new things. Furthermore, in my view, the method of distribution must actively seek the broadest possible input from the entire Roosevelt Island community.

Recommendations

"[My resolution] outlines a preliminary application process entailing the use of forms and structures currently existing, with some modifications. The application form is to be forwarded to the Roosevelt Island Council of Organizations (RICO) for recommendations as to structure, informational needs, and possible overall suitability of the basic proposal. After RICO has made its best efforts to ensure that the proposal is viable and fundable, the proposal should be forwarded to the Roosevelt Island Residents Association (RIRA) Common Council for public comment and response. Those comments and responses should then be forwarded to the Public Purpose Funds Advisory Committee, to be included as supporting information to the Board at the time the Committee brings the funding request forward for a Board vote per resolution. The Board has final say-so concerning Fund distribution, and may accept or deny any application.

"Two major considerations must be recognized and addressed here, brought to my attention by RIOC Director Susan Whitaker, who also chairs RICO, and RIOC Director Patrick Stewart, who is currently president of RIRA. Generally, these considerations might be labeled Conflict of interest and inclusivity.

"Conflict of Interest: RICO and RIRA, as currently constituted, might be considered as separate Island organizations in their own respective right, and might conceivably at some future time come to RIOC for funding needs of their own. In fact, RICO as formerly administered was the organization requesting funding for the umbrella-type social service needs administration referred to above. And RIRA has several times approached the Board for funding of voting machines to ensure the fairness of their Island-wide elections. In such situations, they manifestly should not be passing on their own requests, and I anticipate that their proposals should come directly to the Board.

"Inclusivity: Ms. Whitaker has shared with me her concern that RICO as currently constituted might not be considered to represent a broad-enough spectrum of Island groups to make a meaningful assessment of any requesting organization's funding proposal. While I cannot speak for her directly in the context of this memorandum, it is my understanding that she intends to reach out to a broader group of organizations to develop meaningful input on specific spending proposals. This would be a very positive development, in my view, and would lead the Board to additional confidence that sufficiently broad views have been heard.

Conclusion

"The Board has wrestled with the issue of Public Purpose Funding many times over the years. We have recognized and accepted our responsibility to disburse these funds wisely, and sought varying modalities to do so. We have not always been successful, neither in achieving the desired effects of our spending nor of satisfying all the views or needs of every part of the Island community. Nonetheless, the Funds exist and ought to be distributed. It is my expectation and belief that the methodology broadly outlined in the enclosed Proposed Resolution Language and described in this memorandum will provide a modality by which we can meet our responsibility in a timely and judicious manner."

Kraut's comments in response to The WIRE's request for a statement:

"There are several problems surrounding the public purpose funds. First is the existence of the funds themselves. As I mentioned in my memo, RIOC was not set up by law to be a social services agency, nor is it equipped or staffed to be one. The Board of Directors has final responsibility for how the funds are used, but many members of the Board see their strengths as being greater in other areas. So one answer to the question, 'What do we do with these funds?'might be simply, 'Spend them.' And that seems to be the way the Board is currently trending.

"The Board assumes that I, Patrick Stewart, Susan Whitaker and perhaps also Kevin Fullington would logically have the best sense of the Island's needs as we are resident here, and they appointed Pat, Susan and myself as an advisory committee to make spending recommendations to the Board.

"So the question that faces our committee is how to make those recommendations fairly and equably. Our first thought was to revive the old method where the Roosevelt Island Council of Organizations worked with applicants to get their proposals in order and then the Residents Association gave their views as to the suitability of the grant.

"Contrary to some popular notions, RIRA never had any final say-so as to who got grants or who did not.

"As a former RIRA President myself, I tended toward the view that the funds are 'the people's monies' and so RIRA, as representative of the people generally, ought to have say-so over their spending. However, the State of New York disagrees, and it is the State's view which will prevail here: RIOC's Board will continue to have the only decision-making power over these funds, just as they always have in the past.

"RIRA has no legal authority, and neither does the President of RIOC, despite what some folks around here might think. Every Public Purpose grant in the past has been authorized by the Board and only by the Board.

"In the past I carried a particular burden because for a long time I was the only resident on the Board, and other directors turned to me for advice on spending decisions. I don't know how good a job I did but that doesn't matter: I was there, and I was doing it, and the board very often followed my lead. But I am very glad that we have a strong resident presence on the Board now to spread the opinions and the responsibilities around.

"We on the committee are still faced with the responsibility of devising a fair and equable parceling of the funds. One thing I learned very early in the previous process is that people will naturally be suspicious of any method which seems to have been foisted on them from above. I sympathize with those feelings, but the fact remains that the Board will make the final decisions, and they will be basing those decisions on the recommendations of this committee. So I guess it behooves us on the committee to make our ears as widely available as possible.

"People are already coming to me with specific spending requests and recommendations, and I'm lending my ear to all of them. My personal propensity is to distribute these funds as widely as possible. I see a wide variety of social needs on this Island which are not being met by any agency which I can see. I would hope that residents or residents' groups can recommend viable solutions and then prove to the Board that they have what it takes to see them through. Those are the proposals I want to fund.

"I should also point out that some of our attempts might well fail, and there is no use pretending this is not the case. Organizations have received funds from us in the past and not met their objectives, no matter how sound their basic proposal or how well-run their organization might be, nor for that matter how popular their basic idea was. I have no reason to assume this won't happen again.

"But, if the choice is only to support iron-clad, guaranteed proposals, then we will end up sitting on this money forever, because nothing in life is guaranteed. And the Board's current direction is clear. The Island has needs and we have money. We want to get this money out and moving in the community to see if we can't address some of these needs.

"We will, as in the past, be requiring a fair amount of background information in our proposal process. We want to be able to have confidence that any organization requesting funding is strong, active and viable, or at any rate composed of people with a proved track record in the past. We want the need for funds to be well-supported in clear statements of purpose and as much research and documentation as possible. And we will need to be assured of safeguards that the money will not be wasted or squandered.

"But it is not my intention to pre-judge any application based on any previous criteria, nor will I allow others to deflect my thinking in this area. Many people on this Island are very adept at finding reasons not to do things. We are masters of negativity. I prefer people who want to do things, and will see them through. And all such people are encouraged to find positive uses for the funds available. Your Board wants to help you achieve your vision."