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Dallas City Council wants clarity on Fair Park First contracts after $5.7M in misallocated funds

Keren Carrión/KERA
An accountant's report into Fair Park First and its for-profit partner Oak View Group found $5.7 million in misallocated restricted donor funds.

Dallas City Council members want clarity on the roles and responsibilities of nonprofit Fair Park First, its for-profit managing group Oak View Group, and the city following an accountant's report that found $5.7 million in misallocated donor funds.

City Council heard a briefing on the report for the first time Wednesday. Council members spent two hours in private executive session to go over the contracts made in 2018 that created the nonprofit and for-profit agreement between the city, Fair Park First, and Spectra Venue Management which is now Oak View Group.

Although the report was mentioned during last week's City Council Parks, Trails, & the Environment Committee meeting, council members were unable to ask questions because it had not been released at the time.

Council member Kathy Stewart, who is on the council's parks committee, said she felt "profound disappointment" after reviewing all the documents.

"We have disappointment for the people who treasure Fair Park as an asset for the city of Dallas, we have disappointment for the neighborhoods that surround Fair Park, and for the people who've made generous donations to support Fair Park," Stewart said.

The report, released Oct. 9, revealed $5.7 million in restricted donor funds were used for park operations and unqualified projects.

The initial report said "the Operator ultimately failed to comply with the requirements" of the restricted donor funds. It was corrected a day later to take out the "operator" reference at Oak View Group's request; otherwise OVG would "commence legal action," according to a report by the Dallas Morning News.

O'Dell previously told KERA that OVG only processes the accounts for Fair Park First and processes invoices at its direction.

"We actually have emails that show that the former leadership of Fair Park First actually provided direction to us on how to fund and pay for some of the expenditures that are in question," O'Dell said.

The emails, obtained by KERA, consist of messages by former CEO Brian Luallen authorizing invoices between 2021 and 2024. Luallen resigned from his position earlier this year citing an environment that was "very difficult and uncomfortable to navigate."

"This has taken a great toll on me personally, particularly impacting my health which I must prioritize," Luallen said in his resignation letter.

Veletta Forsythe-Lill, Fair Park First board president, said the nonprofit made approvals but were in the dark on the full scope of the finances.

"They have the bank accounts, the invoices would come to them," Forsythe-Lill said. "Certainly there were requests to pay for different things. Absolutely. But, the staff on Fair Park First side could not see a complete picture of the finances."

During Wednesday's briefing, representatives with both Fair Park First and OVG went back and forth on who was responsible for shortfalls and who approved the misallocated funds.

Under the current contracts, there are no specifics of who is at fault if something goes wrong, City Council member Chad West said — something that has contributed to the finger-pointing between the two groups.

"If I was a donor, I would want to make sure, one, that these financial obligations are met, but two, that the structure is in place moving forward so that if you guys leave and some new group comes on board, this doesn't happen again," West said.

Both Forsythe-Lill and O'Dell previously said they are open to reexamining the contracts to fit the groups' current needs and to clarify responsibilities.

Interim City Manager Kimberly Tolbert​​​ said staff will "move with the speed of urgency" to define a pathway forward for council members concerning contracts with Fair Park First and OVG.

"I feel that we're going to be in sync and we'll be able to come back and share with you and actually keep you abreast of where we are throughout this process," Tolbert said.

City staff plan to conduct regular briefings on their progress.

Deputy Mayor Pro Tem Adam Bazaldua called on both Fair Park First and OVG to take responsibility for their obligations outlined in the contract.

"I'd like for us to do this collaboratively moving forward and in what's in the best interest of our city and Fair Park," Bazaldua said.

Got a tip? Email Megan Cardona at mcardona@kera.org.

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Megan Cardona is a daily news reporter for KERA News. She was born and raised in the Dallas-Fort Worth area and previously worked at the Fort Worth Star-Telegram.