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NewCities Institute- $7 million gone and $600 K in the hole
The Nugget Casino in Sparks.

Kentucky Public Auditor Crit Luallen today released a scathing report on the Kentucky League of Cities and its spending practices. Sylvia Lovely, the CEO and Executive Director of the League, announced her retirement after a series of articles appeared in the Lexington Herald Leader.

The 17 page summary of the report can be read at KLC Auditor's Summary. A bullet by bullet account of the League’s profligate spending, insider deals, loans to officers and trips to the Bahamas is at the Kentucky.com website. We would not dare to steal their well deserved thunder.
 
Following a reader’s tip, we hied off in a little bit different direction.
 
One of the services reviewed by the Auditor is the NewCities Institute. It’s a 501(c)(3) tax exempt organization established in September 2000 with the stated goal of researching and innovating communities with civic engagement.  Ms. Lovely serves as president.
 
The Kentucky Secretary of State’s Office has quite a list of Kentucky stars on NewCities Board of Directors. Names like former Governor Martha Layne Collins, recently retired Kentucky Education & Workforce Development Secretary Helen Mountjoy, Virginia Fox, who served many years as head of KET, Kris Kimmel, head of Kentucky Science and Technology Center, attorney and Morehead State Board of Regents member John C. Merchant are among the directors of New Cities.
 
Tim Kelly, publisher of the Lexington Herald Leader was listed as a director in May 2009. His name has since disappeared from the list of directors on the NewCities website as have several other names. An email was sent to the LexHerald writer Linda Blackford asking about Kelly’s time on the NewCities Board produced this response from Blackford:
 
In the original stories we printed on KLC at the end of June, we had a statement from Kelly, who resigned from the board because of conflict of interest concerns.
 
This was in the story:
 
  (Herald-Leader Publisher Timothy M. Kelly was added to the board of the NewCities Institute for a one-year term this year along with several other former board members of the Partnership for Successful Schools after the merger of the two organizations. After learning of the newsroom's impending stories about the League of Cities, Kelly said, he resigned from the board last week in order to be able to perform his role as publisher without any perceived conflict of interest.)”
 
According to the Auditor, NewCities was supported over the past 8 ½ years with over $7 million dollars in cash and in kind support from the Kentucky League of Cities. Despite that, the Institute showed a $603,000 net operating loss.
 
And what became of the money? The website lists NewCity Moscow as one of its success stories. Not to panic. The Institute was not investing in the Russian capital. Moscow is in Idaho. Nor is Moscow, Kentucky a NewCity.
 
 In 2005, the NewCities' website rhapsodized “…Moscow, Idaho became the first pilot project of the “America’s First NewCities” initiative. It was a year long project designed to help the community to make intentional choices for improving economic growth while building on its innate strengths and uniqueness.”
 
Moscow, Idaho, home of the University of Idaho, has an active arts community. One wonders why Moscow needed intervention from a Kentucky nonprofit to boost civic engagement.  At left, tourist attraction McConnell Mansion (no relation to the Kentucky McConnell).

 From the Moscow Chamber of Commerce website:
 
“PERFORMING ARTS opportunities abound in Moscow and its twin town Pullman, Washington.  The UI Hartung Theatre, a 417-seat theatre located on the University of Idaho campus, offers performances throughout the year.  The Idaho Repertory Theatre, founded in 1953, is one of the Northwest’s oldest professional summer theatre companies.  The Kenworthy Performing Arts Centre(KPAC) is located in downtown Moscow and offers films and live theatre.  The Moscow Community Theatre, founded in 1976, features family drama, comedy, and musical productions.  WSU Theatrein Pullman presents theatrical productions in modern campus facilities.  The Pullman Civic Theatre, founded in 1946, performs five plays yearly and has an active children’s wing. “ excerpted from Moscow ID Chamber of Commerce
 
Another of the NewCities projects was “fast growing” Sparks, Nevada where
 
“The NewCities Institute collaborated with the city of Sparks, Nevada to engage the residents of this fast growing city in a discussion about the future of community partnerships. Representatives from Sparks’ diverse communities assembled to identify strategies to begin to work together on a wide range of issues. NCI President Sylvia L. Lovely led the weekend retreat held in October 2007.”
 
Sparks is a city of 90,000 in the high desert.  Here’s what Sparks says about itself on Official Sparks NV website
 
“Our beautiful and family-oriented city of nearly 90,000 residents is located in the Truckee Meadows between the Carson and Virginia Mountain Ranges at an elevation of nearly 4,500 feet. We share our beautiful valley on the eastern slope of the Sierra with our neighbor to the west, Reno. Our climate is mild, with lots of sun, low humidity and rainfall, and a full four seasons.  
 
Since the 1990’s Sparks has grown tremendously, offering residents and visitors a wide array of services and activities. Sparks was reported as the fastest growing city in Nevada between 1999 - 2008 and continues to grow. Quality of life is cited as one of the main reasons people relocate to the Sparks area. Summer and winter outdoor activities abound!”
 
Again, one has to wonder what led to the choice of Sparks for aid from NewCities. The fact that Sparks and Reno, “The Biggest Little City in the World” are just a stones’ throw apart may well have had something to do with the decision to work with the area.
 
In Kentucky, Morehead and Rowan County received six months of attention from the NewCities Institute. The effort resulted in a series of listening sessions. Madisonville/Hopkins County launched an effort in 2007. Again, NewCities had a series of listening sessions, then produced a report.
 
The question that should be answered by the very smart, savvy people on the NewCities Board of Directors is: was this all worth $7 million dollars?  
 
While the Institute is not a public agency per se, the Auditor found that at least 15% of the money going to its parent – Kentucky League of Cities – came from dues paid by cities out of taxpayer dollars.
 
The question that must be directed to city officials that pay dues to KLC is why it took a newspaper expose to bring these expenditures to the public’s attention.
 
Is it so much the custom in government to drive big cars and take big trips to interesting places that not one city official raised an eyebrow or a finger until the Lexington Herald Leader began its series? 
 
According to the Lexington Herald Leader’s report, elected officials on the KLC Board are complaining that other board members aren’t taking the audit seriously. 
 
Will indictments and perp walks get the attention of the insider club that runs boards and commissions like KLC and NewCities?

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