What is the El Paso Zoological Society? ABC-7 explains its role amid ongoing conflict with city

EL PASO, Texas (KVIA) --For several months now,  ABC-7 has continuously reported on the ongoing conflict between the City of El Paso and the El Paso Zoological Society. For that reason, ABC-7 believes it is important for you to understand what the Zoo Society did during its partnership with the city. 

Under the most recent agreement reviewed by ABC-7, the Zoological Society was tasked with promoting and supporting the Zoo and its programs in conservation, education and recreation. The agreement also required the Zoo Society to fundraise and help manage volunteers for the zoo.  

BACKGROUND

The Society says it has been partners with the El Paso Zoo for over 60 years.

Last week, the El Paso City Council directed staff to pursue other fundraising opportunities after voting on February 26 not to renew its 2012 license agreement with the Zoo Society after its expiration on March 17. 

The City maintains its confident the zoo, which it says has a $10.1 million budget, will be able to absorb the Society’s responsibilities.

Some of the services the Society says it provides to the zoo include capital fundraising. 

Capital funding is the money that lenders and equity holders provide to a business for daily and long-term needs. Some examples of projects the Zoo Society has funded for the zoo include, but is not limited to, the digital x-ray equipment in the veterinary clinic, the McKee Giraffe Shade Structure and Viewing Hut, the Hunt Family Splash Pad, and the Foster Tree House Playground, according to the Society's website.

Funding has been the main point of contention between the City of El Paso and the Zoo Society. Many questions remain about how much money was raised from the Society selling zoo memberships.  

DETAILS OF AGREEMENT

According to the agreement between the City and Zoo Society, the non-profit got 75% of the membership sales, while the city got 25%. 

At least 25% of membership sales had to be spent on the development, marketing, operation, education, conservation and promotion of the zoo, the agreement showed. All the remaining money had to be spent on the betterment of the zoo, or society-sponsored projects that had to be agreed on. 

The El Paso Zoological Society maintains it doesn’t have to turn over its remaining funds to the City. 

At a news conference on Tuesday, Interim City Manager Col. Cary Westin said the city tried reaching a new agreement with the Society after its most recent contract expired. Westin said the city did not feel the 75-25% ratio was good for the city.

During the city's press conference Tuesday, officials said the 75% that went to the Zoo Society was supposed to be used to support operations conducted by the Society, as well as the betterment of the zoo.

The city claims, however, that the Society continued to use funds for purposes other than supporting the Zoo and Botanical Garden. The city also alleges the Society "refused to provide" financial information, and details about what funds were available.

The Zoo Society previously stated it did not need to provide an account of its funds to the city, as their agreement expired two years ago.

FUNDS

Earlier this month, ABC-7 asked the Zoo Society how much money it has in the bank from membership sales, who has access to it, and whether the sum includes both the 75% and 25%.  

“The agreement states that all the funds must be 'spent/used by the Society' for the purposes for which they were raised,” Zoo Society Board President Pam Agullo said in an email, dated May 18, after ABC-7 repeatedly asked questions about the membership money. “There is nothing in the agreement that says that any of the funds must be transferred to the City. Neither 25 nor 75%. The City is ignoring the language of the agreement. Even when the agreement was in place, the Society never gave/transferred funds to the City to be used without any checks or balances. Instead, the Zoo director submitted reimbursement requests and the Society reviewed those and approved or disapproved them. The amount of funds is really not the issue.”

During a press conference Tuesday, Mayor Oscar Leeser said the city has been selling zoo memberships for the past 30 days. With the revenue the city has made in that time, city officials said they expect to make approximately half a million dollars off of the memberships in a one-year period.

But Leeser said last year, the city received $107,000 from membership sales.

ABC-7 asked the Zoo Society for comment on the city's allegations that the Society won't account for its funds.

A Society official claims the city alleges it did not get the Society's communication agreeing to the "mutual audit." 

Three days later, on May 23, the city said the offer to a mutual audit was "factually untrue."

"The City has not directly communicated to the Society of our request for a full accounting," city leaders said that day.

TIMELINE

ABC-7 reported on May 20, that the Society accepted the City's offer to conduct a "mutual audit" of both the Zoo's and the Society's finances.

The city had previously stated it would be willing to do a comprehensive financial audit.

A May 23 letter Zoo Society officials said was sent by the its attorney, Elisaveta Dolghih, to City Attorney Karla Nieman, read in part:

"The Society recently learned from the news articles about comments made by the Zoo
Director, Joe Montisano, boasting that he had made the City $1.6 million by 'killing' the Zoo
Society’s relationship with the City. Putting aside the inflammatory nature of his comments and
his motivation in making them, if this is the information that he conveyed to the City – that the
Society has $1.6 million in funds – that information is verifiably false. I am writing this letter in
an effort to correct this misinformation. In the event this information was used in the City’s
decision to reject the donation agreement offered by the Society and to reject the Society’s offers
of mediation and a mutual audit, as I can appreciate that being presented with a donation agreement
that reflects the dollar amount far less than was represented by the Zoo Director could be upsetting,
the Society hopes the City will reconsider its rejection of the donation agreement upon review of
the information I provide below."

The letter later read in part:

"The Society desires to clarify this information and again offers to engage in a mutual audit
of the Society funds and the Zoo funds, as proposed by Mr. Westin and announced by the City in
its press release on May 20th, to dispel any assumption the City may have about the amount of the
Society’s funds. The Society also would like to dispel the assumption that the Society spends 75%
of its funds on its operating expenses and the salaries to its employees, which is incorrect. The
operating expenses include expenses incurred in putting on fundraising events, creating marketing
materials and other similar tasks that have allowed the Society to raise millions of dollars of
donations."

On Tuesday, the City of El Paso said it filed two complaints- one with the Texas Attorney General Charitable Trust Division, the other with the Internal Revenue Service-- over what it calls the "Society's failure to comply with the city's request to properly close out the 2012 License Agreement and continued use of funds for other than their intended purpose: to support the El Paso Zoo and Botanical Gardens."

The city also filed a claim with the Zoological Society's insurance carrier.

Less than two hours after the city announced it filed its complaints and claim against the Society Tuesday, the Zoo Society announced it is suing the city. The Society filed the suit Friday, according to court records.

ABC-7 will bring you a timeline of events regarding this ongoing story, on ABC-7 at 6.