Where Did The Money Go?

UPDATED: Sept. 23, 2011

“Where did the money go?” Tullahoma Fine Arts Center board member Kevin Farris asked Troy McFarland, who found himself on the hot seat at TFAC's September board meeting. McFarland, who served as board president, was apparently blind-sided by members, who demanded that he resign and repay the center $10,441, they allege has been “misappropriated.”

McFarland's reply was as sketchy as the center's paperwork has been since January. A recent financial audit, conducted by Allen McGee and Associates, found that the center “failed to maintain supporting documentation for 144 of the 151 disbursements made, totaling $38,551.” According to the audit, $10,694 in checks were written to McFarland for “reimbursements of construction costs, advertising and other expenses.”
Beginning last fall, MiddleTennesseeArts.com asked to view the minutes of TFAC board meeting and the treasurer's reports, only to be repeatedly rebuffed. Documents received in the last two weeks reveal the center had a total balance of $30,482.91 in several banks in December. This included $20,953.22 of the Williams Trust Endowment Fund.

Created in 1968, its founders bet that the center would thrive, supported by an art-loving community. But since 2001, the arts center has been on a losing streak, hemorrhaging money. Even with the City of Tullahoma pumping tax-payer money into it.
The center had deficits for seven of the last nine fiscal years, ending in 2010, with excess money only for 2004 and 2007. In all, the center lost $49,189 since the 2001 fiscal year.

Last fall, the Tullahoma Board of Mayor and Aldermen gave the center $10,400. This fiscal year's budget proposes to pay the center a percentage of the city's hotel-motel tax proceeds. According to Tullahoma City Administrator Jody Baltz, TFAC should receive approximately the same as last year, maybe a little more.

TFAC bookkeeper Jamie Knight told the board on September 8, that the center owes more than $9,000 and “has only $1,000 in the bank.” According to Knight, the city had to step in to prevent the Tullahoma Utility Board from cutting power off to the center, due to an unpaid $1,200 bill.

As they did last fall, city officials are once again rallying behind the center.
Newly-elected Mayor Lane Curlee said the center is “an asset for Tullahoma” and the city will continue to support it financially.

Alderman Greg Sandlin agrees it is vital to the city's economy and cultural well-being. But added that “we shouldn't write another check until we can see some financial responsibility on the board at TFAC.”

This was Sandlin's sentiment last year when the city held back funding for TFAC until a viable board was in place at the center. Under pressure from TFAC membership, Lucy Hollis resigned as president on August 23, 2010, citing “recent and continuing health problems.” A new seven-member board headed by McFarland was elected a few weeks later, and the city restored funding.

McFarland made radical changes at the center, cleaning it out, bringing in new furniture, new artists and drafting new bylaws—but “we were definitely shooting from the hip,” said McFarland.

Shooting from the hip for the board included voting McFarland TFAC executive director, another position also held by his predecessor, Hollis, and using a controversial provision of the new bylaws to squelch opposing views.
The proposed clause allowed any TFAC member to “be expelled or suspended by the Board of Directors.”

Even though the bylaws had not been approved by the general membership, Keith Moore was removed from the board in January, for his “actions and non-actions,” according to an unsigned letter Moore said he received from TFAC a few days later.

According to an unofficial copy of the minutes of the January 6 meeting, the “non-action” was not helping deliver a Christmas tree to the center. And the “actions” were talking to the Tullahoma News about Moore's concern over the direction McFarland was taking the center.

Moore, who did not attend the meeting, was voted out by McFarland, Corresponding Secretary Jon Gray, Vice President Leslie Wurst and Treasurer Roxane Garrett. Only Farris opposed the motion.

Also at the January meeting, Gray requested a policy be developed to prevent “negative [press] coverage of internal issues.”

Sometime after the January meeting, Garrett and Wurst resigned.
In April, when MTA tried to determine who was then serving on the board, McFarland and Gray refused to say.

Gray, who is co-owner of Peahead Productions, which produces The Newsleader cable program in Tullahoma, said he was tired of MTA's negative stories about the center and that there was “only good news” at the center.

“We have enough people on the board,” said Gray. “You are dragging us all in the ditch, and we have one wheel on the float. Don't knock the damn axle off before we get the second wheel on. Every time it's like some cloak and dagger sh--. I can't answer your question.”

Knight said that last week, she, Farris and TFAC Treasurer Becky Shelton filed a report with the Tullahoma Police Department alleging that McFarland had “misappropriated” $15,000. She said that amount may be revised as further facts are gathered.

District Attorney General Mickey Layne said that if the Tullahoma police conclude the investigation, “we will likely present the case to the grand jury. If it is concluded in time, that would be on October 11.”

Layne said he did not believe the investigation would be lengthy “considering the type of documentation with this case.”

According to Tullahoma Police Chief Paul Blackwell, McFarland was charged with “theft of property” from the arts center amounting to around $2,200. Blackwell said McFarland turned himself in to the Coffee County Jail in Manchester on Wednesday and posted bond.

“We're continuing to look into the matter and are working with the fine arts center [gathering information],” said Blackwell, adding that additional charges could be forthcoming.

McFarland told the board, earlier this month, he had taken actions to make a “dramatic change” at the center, but denied he had taken money for himself.

“I knew when I brought Jamie in, she would find all of this stuff. [It was not] that I thought I would get away with something or flying off to Jamaica with a big bag of money,” said McFarland.

“A lot of decisions were made without the approval of the general membership, but were made by either myself or the handful of board members that were left,” said McFarland. “You're back at zero. Everything I've done to this point makes no difference. I feel sorry for the next person coming behind me. I wanted to leave the place better than it was when I found it. And look-wise you've got it—but, internally its a mess.”

McFarland could not be reached Friday for additional comment.

TFAC will hold a special membership meeting beginning at 6pm on September 29, during which new board members will be elected and the proposed new bylaws will be voted on.