Rancho Mirage Files Lawsuit Against Own Non-Profit

The city of Rancho Mirage filed a lawsuit against the nonprofit Friends of the Rancho Mirage Public Library Friday and officially ended its relationship with the organization.

The lawsuit is an attempt to recover more than $2.1 million the organization raised over more than a decade in the name of the public library.

The Friends organization was created in 1996 and the city paid to have it incorporated.

Under the Articles of Incorporation, the mission of the organization was specifically to raise money for the library.

But according to the city, that hasn’t been happening.

The city says board members of the Friends of the Rancho Mirage Public Library illegally changed its bylaws in 2009.

“It raised a gigantic stink,” said Dana Hobart, mayor pro-tem.

The original Bylaws created in 1996 clearly stats that, “Any funds contributed to the corporation… shall be contributed to the Rancho Mirage Public Library within two years after the corporation’s fiscal year in which such funds are received.”

In 2008, e-mails among members of the board show it’s president, Joseph Lund, called for a board vote to approve giving $25,000 to the Palm Springs International Film Festival.

“When that happened a big stink arose,” said Hobart. “A lot of people said, ‘Wait a second, you can’t do that. You can’t give money donated to the library to somebody else,’ which should have been obvious to Mr. Lund, but apparently it wasn’t.”

The vote passed to give money to the festival but it was rescinded after some members eventually resigned in protest.

Hobart and former board members who spoke on condition of anonymity say Lund had been a longtime screener for the film festival.

“Whether that was a conflict of interest or not, I’ll leave that for someone else to decide,” said Hobart.

In February 2009, the city manager requested the organization surrender all money collected by the organization on behalf of the city.

Six days later the board voted to change its Bylaws.

The new version states, “The board of directors shall consider at least annually, the expenditure of funds contributed to the corporation.”

“But the effect of that language is, ‘We will consider your requests for your money but we can ignore your requests and give you nothing,'” said Hobart.

Lund did not return any of News Channel 3’s phone calls for this report and all past and present members of the board contacted declined to speak on camera.

“We don’t want them to put us in the position of having to make a request for having our own money,” said Hobart. “This money was contributed by people all over town who though they were contributing money to our library.”

The city has officially cut off all ties to the organization.

It said library services to the community will not be affected.