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On heels of Civic Life audit, Southwest district coalition warns of lawsuit without renewed funding

PMG FILE PHOTO - A cyclist rides past the Multnomah Arts Center building in Southwest Portland, where Southwest Neighborhoods Inc. leases space from the city of Portland. The district coalition sent a stern letter to city leaders saying a lawsuit could be forthcoming if the city doesn't restore the coalition's funding.A neighborhood coalition that was cut off from city funding earlier this year is hoping to work its way back into the fold on the heels of a damning assessment of the Office of Community & Civic Life.

Southwest Neighborhoods Inc. is asking city commissioners to reestablish annual grant funding to the nonprofit coalition.

The coalition also is weighing the option of suing the city.

In a letter sent to the city, the coalition points to the recent Civic Life audit, completed by Portland-based consulting firm ASCETA. The assessment called for greater accountability and showed a troubling work environment within the city bureau. The audit's release led to the recent departure of the bureau's director and several other top employees. Each received a severance package as they resigned.

SWNI's board said the behavior called out in the report is evidence it didn't get a fair shake from the city bureau. The letter asks the city to fully reinstate annual funding for SWNI in the city's budget; allow the group to submit a formal response to a forensic audit of the coalition conducted last year; and delay plans to hire two new coordinators and set up a new district office in the Civic Life bureau as part of the city's ongoing plans to replace the role of SWNI.

"Southwest Neighborhoods, Inc. (SWNI), as a longstanding city District Coalition Office for the City of Portland, can attest to the mismanagement and mistreatment reported in the ASCETA audit that dominated Civic Life's internal operations for the past three years and that it also extended into its external, community programs," the May 26 letter sent to the city states. SWNI asserts that its relationship with the city and annual funding deteriorated under former Director Suk Rhee's leadership.

"Former Director Rhee's active campaign against SWNI began in February 2020. It was built on a foundation of anti-neighborhood bias, misinformation, and poor contract management," the letter states.

SWNI's board of directors met on May 26 and narrowly voted to approve including the mention of a potential legal action in the letter sent to city commissioners.

"Southwest Neighborhood, Inc.'s volunteers are deeply concerned that absent swift legal action members of our community that serve SW Portland will continue to be harmed and defamed as a result of engaging with the Office of Community & Civic Life," the letter states.

SWNI's president, Leslie Hammond, has been said she's been in talks with Portland City Commissioner Mingus Mapps about how to get SWNI's city contract restored. Mapps previously worked at the Civic Life office before being elected last November. Mapps has been friendly to SWNI, but he doesn't oversee the Civic Life bureau and his authority is limited.

"I support SWNI and all the Southwest neighborhoods, but I want to be sensitive and honor that any decisions will and should be made by the Commissioner-in-charge of the Office of Community and Civic Life," Mapps stated when asked for comment.

It's unclear what impact, if any, the letter and behind-the-scenes lobbying will have.

Commissioner Jo Ann Hardesty, who oversees the Civic Life bureau, said she has no intention of reversing her decision to cut city funding to the Southwest Portland district coalition.

"The decision around SWINI's funding was just made in March. That decision stands and was unrelated to the wider assessment of Civic Life in the ASCETA report," Hardesty said in a statement to Pamplin Media Group.PMG FILE PHOTO - Commissioner Jo Ann Hardesty

The thinly veiled threat of litigation to the city wasn't the only talk of lawsuits from the organization. SWNI's board also discussed the possibility of suing Umpqua Bank after the financial institution rejected SWNI's request for a second-round Paycheck Protection Program loan in May. SWNI received a nearly $66,000 PPP loan last year. Since then, the organization laid off all but one part-time staffer.

During a board meeting in late May, Hammond said Umpqua staff initially gave her the impression the second-draw loan application would be approved. In its May newsletter, SWNI reported the organization "received approval for a $70,800 federal grant."

But a letter to Hammond from Umpqua Bank dated May 10 indicates SWNI didn't qualify for the loan the second time around.

"When I talked to the bank vice president, he said he didn't believe the loan included rehiring people," Hammond told the SWNI board. "He was only looking at the loan for maintaining our single employee, therefore he disapproved it."

Board discussion of the PPP loan request was limited, at Hammond's request. A memo sent to board members prior to the May 26 meeting advised them not to talk at length about the financial matter, in an attempt to avoid press coverage.

"I would prefer that we not discuss the loss of the PPP in the meeting in detail as there will be reporters there and we have no answers yet," Hammond wrote, asking that board members instead have private phone calls with her or a member of the coalition's executive committee.

Since then, Hammond indicated there will be no legal action taken by SWNI against the bank.

Despite emphatic pleas to the city to restore SWNI's administrative role and funding, the coalition's own path forward is murky.

The Civic Life office is in the process of finding staff and sponsors to take over services for Southwest Portland's neighborhood groups. Within SWNI, finances are dwindling and so are board members.

Hammond indicated in May that she won't seek another term as president and the organization's treasurer announced his plans to leave before July. Southwest Hills Residential League, or SWRHL, announced in June it is changing its district coalition membership from SWNI to Neighbors West Northwest. At least three other neighborhood associations have begun the process to become 501©(3) organizations and operate independently.

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