Almost all of a controversial security deposit will be returned to the Carnegie Arts Center, following Turlock City Council action on Tuesday.

Turlock will return $70,000 of $80,000 remaining on deposit, plus accrued interest. Further, Turlock will pay the Foundation interest payments on the remaining $10,000 by July 31 of each calendar year.

The Carnegie Arts Foundation originally made a $100,000 performance security deposit in October 2009 – one of many terms of the Foundation's lease agreement to control and operate the Carnegie Arts Center.

But on May 8, 2012, eight months after the center's opening, the Foundation requested the full deposit be waived and returned. At the time, a split council agreed to return $20,000, retaining $80,000 at least until an annual report on the Carnegie's operations was delivered.

Since then, the Carnegie Foundation has exceed expectations, according to both city staff and the Carnegie's annual report, delivered to council in January.

“They are in good standing,” said Turlock Police Lt. Ron Reid, Assistant to the City Manager. “I made contact with members of the city staff to confirm the Carnegie is in better shape than they had originally expected.”

According to Carnegie Executive Director Rebecca Phillips Abbott, the returned funding will serve as a flexible cash reserve, which the Carnegie can invest to earn additional money. But most importantly, Phillips Abbott said the return of funding would be in accordance with Turlockers' wishes.

“The funds were originally donated by citizens of Turlock to run an art center, and we'd like to go through with that original commitment on behalf of the citizens,” Phillips Abbott said.

The measure passed by a 4-1 vote, with Councilwoman Amy Bublak dissenting. Bublak asked the Carnegie to supply an independently certified accounting of the Foundation's finances before returning any funding.

“I'm looking for someone who is not partisan to look at it,” Bublak said. “You say you're solvent, and that's wonderful.”

Should the Carnegie be independently certified as solvent, Bublak said she would move to return the entire security deposit.

But Phillips Abbott objected to the requirement, as the refund was already delayed for a year in anticipation of the Foundation's first annual report to council. That report included an overview of the Carnegie's finances.

“With all due respect, we have met the requirements of an annual report to council at this point,”
Phillips Abbott said.

The majority of the Turlock City Council agreed with Phillips Abbott.

“I think we made a fairly strong case at that time that upon receipt of the first annual report we would reconsider the issue,” Councilman Bill DeHart said. “Carnegie has complied with our request.”

With no further discussion, the matter was approved.

Mayor John Lazar did let slip one secret before discussion was done, though: the Carnegie Arts Center will be the recipient of a U.S. Conference of Mayors award next month. No further information on the award was made available, as Lazar's announcement was premature.

“I wasn't supposed to say anything,” Lazar said.