PORTLAND – Olive P. Cummings died in December 2000, leaving a will that established several endowment trusts. One of them benefited the city of Portland, for the express purpose of planting deciduous shade trees in the Eastern and Western cemeteries.
But when Donald Talbot, the Cummings trustee, was conducting his annual review of the endowments last year to issue payments to the beneficiaries, he decided to look deeper into the cemetery trust.
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“I figured there had to be a lot of money accumulating there,” said Talbot, a certified public accountant from Falmouth. “I mean, how many deciduous trees can you plant?”
Instead of finding a well-funded account, Talbot noticed questionable expenditures, including the purchase of large quantities of super humus. After walking the cemeteries with a landscape architect, he believes the material was not even used there.
“They bought a lot of the stuff that sounds like it might have been put in a baseball field, or a golf course, or something like that,” Talbot said. “It certainly didn’t go to the cemetery.”
That may not be the only questionable use of the trust fund. According to city spreadsheets, thousands of dollars have been spent since 2002 on trees for the two cemeteries. But Talbot and the landscape architect observed mostly older trees during their site visit, particularly in Western Cemetery.
“(What we saw) didn’t square with what (the city) gave me for records of what they spent,” Talbot said. “We couldn’t find the trees in Western Cemetery.”
Also, about $10,000 since 2002 was spent on removing stumps and pruning trees, according to city records. Expenditures like that technically violate the terms of the trust, which specifically states money can only be used for the “placement of deciduous shade trees.”
The confusion reflects the complex, murky world of endowment trusts established by generous, well-meaning citizens to benefit the communities where they live.
While trusts generally seem to serve the purpose for which they are intended, changing conditions, poor record-keeping and other factors can sometimes imprison funds or make it difficult to carry out their terms — which may have been in place for scores of years.
The issue of outdated trusts is fairly common for municipalities, according to Stephen Langsdorf, an attorney at Preti Flaherty law firm who represents six municipalities in Maine, including Augusta.
He said endowment trusts can sometimes be more work than they’re worth, and some municipalities are becoming more reluctant to accept these types of gifts. “These things can get very complicated as time goes on,” he said.
Endowment trusts typically have a baseline, nonexpendable balance that accumulates interest, which can be spent by the beneficiary, in this case the city. Trusts outline specific instructions in their wills about how the money can be used.
The city of Portland currently manages 18 such trusts, the principals of which are valued at more than $2.36 million. More than 100 other trusts have been set up for school scholarships and specific cemetery plots. Other trusts are managed by outside entities, which in turn provide payment to the city.
As of Dec. 31, the endowment trusts had an expendable balance of about $1.3 million. But more than $105,000 of that expendable balance cannot be accessed by the city, mostly because the trusts have outlived their original purpose, according to Portland City Hall spokeswoman Nicole Clegg.
For example, in 1845 Asa Clapp established a $4,000 trust, with the interest intended to benefit “poor widows, inhabitants of (Portland), and such married women, who in consequence of neglect or vices of their husbands may be suffering from want for common necessities of life.”
But Clegg says the city cannot meet that specific purpose, so income on that trust, which had grown to $26,324, is inaccessible to the city. Clegg said the same holds true for the Ethel Stone trust. That fund, established in 1974 by a City Council order, was designed to provide “free milk for children attending McLennan School whose parents are unable to purchase such milk.”
“Now the federal government provides funds for all school kids to have milk,” she said.
Other trusts considered dormant by the city include: Clapp trust for orphans, $52,647; Annie Louise Lord trust for school books, $10,917; Anne Foss trust for computer education, $6,989; James McKeough trust, $2,593; Moulton-Widow’s Wood trust to provide wood for heat for widows, $5,690.
The city contends these trusts are dormant because they have outlived their original purposes. But some of the funds may be inaccessible because the city can’t find the official documentation, such as wills or City Council orders, that outlines their intended uses.
Clegg said it is possible some of the documents were burned in the Great Fire of 1866, which destroyed City Hall, or separate fires in 1908 that burned City Hall and the Cumberland County Probate Court.
Or, Clegg said, the missing documents could be buried in other city departments.
“We have discussed the opportunity this (situation) would present for a civic-minded historian that would be interested in helping the city research some of these older trusts and see if there is a member of the family that we could connect with,” Clegg said,
Regarding the Cummings cemetery trust, Clegg said the city has planted enough trees using the funding, but the time has come to maintain those trees. “Things have evolved,” she said.
Langsdorf, the municipal lawyer, said the easiest route for towns to take in amending a will without going to probate court is to work directly with a descendant or trustee. As long as no one with legal standing objects to proposed changes, the will can be altered, with the blessing of the state Attorney General’s Office, to allow a use consistent with the original agreement, he said.
“But that’s not very typical or easy to do, because some of the trusts are so old,” Langsdorf said.
That is the case in Portland, where City Attorney Gary Wood is trying to work with Talbot to amend the cemetery trust language to add more flexibility in how the fund can be used. If the process goes smoothly, the city will consider pursuing changes to other dormant trusts, he said.
Wood cited the Baxter trusts as other endowments the city would like to change. One fund contains $77,865 to maintain the family plots in Evergreen Cemetery, and another has nearly $560,000 to maintain Baxter Woods, a plaque and a boulder.
“Over time that money grows substantially, so that it is far greater than what is needed to maintain that gravesite and tombstone,” Wood said.
Before changes can be made to the Cummings cemetery trust, Talbot said city officials must account for the funds that were apparently misused. The city should return those funds to the trust before discussing how to amend the will, he said.
“I have no qualms about broadening the language,” Talbot said. “To me, it seems a little silly to lock up these funds. I’d like to put those funds to work, but in the cemeteries, not for anywhere else.”
Staff Writer Randy Billings can be contacted at 791-6346 or at:
rbillings@mainetoday.com
Twitter: @randybillings
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