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Southwest Neighborhoods Inc. cut out of funding cycle; city wants financial audit after complaints over transparency

PMG FILE PHOTO - Multnomah Arts Center is known citywide as a haven for creative artists. It also houses the office for Southwest Neighborhoods Inc. Board members for SWNI say records requested by the city are locked up in the arts center.Portland city commissioners excluded a Southwest Portland neighborhood coalition from nearly $300,000 in annual funding Thursday, July 9, saying they want a closer look at the organization's financial records first.

On recommendation from Commissioner Chloe Eudaly, the City Council amended its vote to distribute $1.6 million in grant funds to the city's five nonprofit neighborhood coalitions, approving grants for all but Southwest Neighborhoods Inc., (SWNI.) Commissioners excluded SWNI from the funding cycle, pending an audit of the organization's finances.

Neighborhood coalitions, also called district coalitions, act as umbrella groups to neighborhood associations and exist primarily to ensure residents' voices are represented in city decision-making processes. SWNI represents 17 neighborhood associations.

Eudaly said the Office of Community & Civic Life, which oversees Portland's neighborhood coalitions like SWNI, became alarmed when SWNI's own board members were denied records relating to past emails and financial documents. The city agency intervened back in April, to ensure the organization was meeting its bylaws and upholding the terms of its contract with the city. Civic Life requested nearly 10 years worth of records from Southwest Neighborhoods Inc.

Instead, SWNI responded with a cost estimate of $31,885 to fulfill the city's request for documents, including staff time, copying fees and attorney fees to review documents for confidentiality.

Coalitions like the one representing Southwest Portland get the bulk of their funding from the city. About 85% of SWNI's annual revenue comes from the city's Civic Life office , via noncompetitive grant agreements. Some coalitions are entirely city funded.

In an email exchange, SWNI's executive director, Sylvia Bogert, advised city staffers that many of the records were either already in the city's archives, or available on SWNI's website. The rest are stored away in boxes within SWNI's headquarters inside the Multnomah Arts Center, which is closed due to COVID-19.

Additionally, some of the records were considered nondisclosable because they are personnel files related to a $130,000 embezzlement at SWNI that was discovered in 2011. The employee responsible eventually was convicted and SWNI leaders said tighter financial practices and oversight were implemented.

PMG FILE PHOTO - Portland City Commissioner Chloe Eudaly, pictured here in a file photo, led the charge to withhold funding to Southwest Neighborhoods Inc., pending a city review of the organization's finances. Before the July 9 council vote, Eudaly, who oversees Civic Life, called SWNI's correspondence with the city and lack of transparency "troubling."

"This response was troubling and necessitates that we do not award more funding to this organization until we can determine if there has been any issue with SWNI's governance or finances," Eudaly said. "I had certainly hoped it wouldn't come to this, but at this moment in time, I see no other options."

Bogert said SWNI wasn't trying to block the release of the records, but wanted board members and the city to narrow the scope of the request, because it involves thousands of documents.

"We are trying to cooperate, but the volume of this request, it's just going to take us a little bit of time because we don't have access to our office," Bogert said. "I think council understood that and is allowing us some time to get those records."

Some say they suspect the organization isn't maintaining the kind of financial safeguards to prevent malfeasance from happening again.

"The SWNI treasurer abruptly quit in the middle of the October board meeting and subsequently was hired to audit the books he previously managed," said Shannon Hiller-Webb, a SWNI board member and South Burlingame Neighborhood Association member. Hiller-Webb was one of the board members behind the initial records request to SWNI. She said when she joined the board last year, she wanted a clearer picture of the organization's past decision-making process.

"I was experiencing threats of removal from the board for my efforts advancing equity and I learned in late November that another board member had experienced something similar," Hiller-Webb noted. "Never did I think my request for records would be viewed as a threat." She said input from past SWNI members gave her cause for concern.

Other recent SWNI actions have drawn criticism.

Last month, the Connection reported SWNI applied for and received a $66,000 Payroll Protection Program loan. That raised eyebrows of some of SWNI's own board members, and some city employees who feared the group might be trying to redirect some of its annual grant funding for other purposes, in order to make use of the PPP loan money. SWNI later said it would reallocate up to $25,000 of its PPP loan to local neighborhood and business associations in its jurisdiction.

Prior to voting on district coalition funds, commissioners declined to review a staff presentation from Civic Life about SWNI, or listen to public testimony from more than 20 people who had signed up to speak about that agenda item.

Mayor Ted Wheeler and commissioners advised against "airing dirty laundry" at a public meeting. Wheeler instead offered to meet with some of them privately to hear their concerns.

Eudaly noted she's confident SWNI will produce the rest of the records requested and its funding will be reinstated shortly afterward.

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