For nearly two years, the city of Hermosa Beach has allowed nonprofit organizations to raise money by selling advertising space on banners over major streets. However, the city may have violated its own rules by allowing a city bargaining group to participate in the program and use some of the revenue for union activities.

The Hermosa Beach Firefighters Association differs from most nonprofit organizations because, in addition to its charitable activities, it is also a labor union which negotiates contracts and makes political donations. Nonetheless, the City Council approved its participation in the program in 2000.

According to the City Council-approved policy regulating the banner program, all proceeds must go toward charitable causes.

“Hermosa Beach nonprofit organizations providing benefits to the city as a whole may reserve banner space to sell banners to commercial advertisers for the purpose of fund-raising,” it reads. Participants must “utilize the proceeds exclusively for charitable purposes and certify that no commissions or rebates are being paid to any individual for any purpose, including soliciting advertisers.”

According to an official with the Firefighters Association, not all of the funds raised through the banner program go to charity. Association President Paul Hawkins said that some of the money goes into the group’s reserve account, which he said is used for unforeseen emergencies.

Hawkins explained that the association’s reserves pay for matters related to lawsuits, labor issues or to pay the funeral costs if a firefighter died on the job. Hawkins said the association will collect $7,500 from the program.

“As the statistics have shown, firefighting is the most dangerous profession in America and so it would not only be tragic but embarrassing if something should happen and we didn’t have money in our reserves,” said Hawkins.

Using money from the banner program and other sources, the association makes donations to the Torrance Memorial Hospital Burn Center, the Alisa Ann Rusch Burn Foundation and a trust fund established for the children of Hermosa Beach firefighter Mike Lines, who died in the line of duty 10 years ago.

“We have pledged that the money from the banner program is going to be used for charitable uses and for the protection of our own members,” Hawkins said.

Hermosa Beach Mayor Kathy Dunbabin said that the city’s Public Works Department made the initial decision about which nonprofits would be allowed to participate in the banner program, and that this was confirmed by a council vote.

“The participants have to be nonprofit organizations providing benefits to the city as a whole,” she said.

According to Hermosa Beach City Attorney Mike Jenkins, the program allows organizations to use the funds strictly for charitable purposes. City laws state that the gift of public funds is only deemed appropriate if the expenditure serves the public purpose, even if it is used in serving the public purpose in an incidental way.

“These organizations must use the funds from the banner program strictly for charitable purposes and we would certainly like to take a closer look at them if these funds are not being used in this way,” said Jenkins. “From what I have been told, this organization qualified for the program.”

At least one member of the City Council said he would be interested in looking into the association’s participation.

A call for new rules

Councilman Michael Keegan said he would like to amend the policies so that unions and certain nonprofits are prohibited from participating in the program.

“My position is that I would like to present this to the council and get it on a future agenda so that the city will exclude any nonprofits that are either a union group or any group where its principal goals and objectives are not for charitable purposes,” he said. “These groups should not qualify in the future for this program.”

Hermosa Beach Councilman Art Yoon said he views the association as both a charity and an advocacy organization.

“I don’t think the firefighters should have to be excluded from the banner program,” he said. “But any proceeds derived from the banner program should go strictly to the accounts set up for their charitable contributions and not used for political purposes.”

Political activities

In addition to its charitable donations and union activities, the Hermosa Beach Firefighters Association is also one of the city’s most active political organizations.

Hawkins emphasized that campaign contributions are put in a separate account, which holds no more than $1,000 at any time. He said the association is careful not to mix money from these accounts.

According to Hermosa Beach campaign financial statements, the HBFA gave no money to any City Council candidates in the 2001 election, but did endorse Yoon and Council candidates Ron Pizer and Mary Lou Weiss. Endorsement from the union sometimes takes the form of advertising and efforts on the part of the membership.

In 1997, the association contributed $405 to the re-election campaigns of council members John Bowler, Julie Oakes and J.R. Reviczky. In 1999, the association gave $1,800 to help defeat Measure “D,” which would have repealed the city’s utility user tax.

“We have made minor contributions but we are careful not to contribute too much,” added Hawkins. “If we are excited about a City Council candidate, we don’t contribute more than $200, and we are more inclined to donate hours than money. We don’t want to get too involved in endorsing candidates because we don’t want to give the impression that we are influencing the candidates.”

Yoon said that the association’s active role in city politics should compel the city to ensure that there is not a conflict of interest in how its banner program is administered. He noted that the association chose not to support an incumbent in the 2001 election who had voted against the program.

The association did not endorse Reviczky in 2001, but has endorsed him in past elections. Reviczky said that the reason the association took back its endorsement probably had nothing to do with his voting against the creation of the program in 2000.

“It is not that I have any kind of prejudice toward nonprofit groups making money, but I’m not in favor of doing it this way and my vote (against the banner program) was based on what I thought was best for the community,” explained Reviczky. “I think I know why the Firefighters Association didn’t endorse me and to my knowledge it had nothing to do with this program. I think more significant issues govern whom it supports or doesn’t support.”

Other nonprofit groups which have contributed to past elections include the Aloha Days group and the Chamber of Commerce. Aloha Days, which is also eligible for the banner program, gave $150 in the 2001 election to fight Measure “F,” which would have created stricter policies for beach events.

Hawkins added the association is a labor union because it is required to be one, but that the group first started out as a charitable nonprofit. According to the association’s 1964 bylaws, the group was founded to promote good will and the mutual support of sworn firefighters in Hermosa Beach.

“We try to avoid calling ourselves a labor union even though we are a part of the International Firefighters Association,” said Hawkins. “We don’t have any operating costs except for the purchase of stamps. We are not in the money-making business and all of the money we receive goes right back into the organization.”