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Plaintiffs target Southwest Neighborhoods Inc., saying city-funded group is a public agency

PMG FILE PHOTO - The Multnomah Arts Center in Southwest Portland houses the office of Southwest Neighborhoods Inc. SWNI faces a lawsuit from two residents over public records they say the district coalition should have been legally required to release.Southwest Portland's district coalition is being sued over its pushback on a public records request.

A legal complaint filed Monday, Oct. 12, in Multnomah County Circuit Court asserts Southwest Neighborhoods Inc. (SWNI) is the functional equivalent of a public agency, and as such, must comply with the Oregon Public Records Act.

The lawsuit, brought by Southwest Portland residents Marie Tyvoll and Shannon Hiller-Webb, takes aim at SWNI's failure to produce records requested by Tyvoll, a former SWNI board member.

SWNI is one of seven district coalitions in Portland representing 17 neighborhood associations. District coalitions are largely funded through contracts with the city and overseen by Portland's Office of Community and Civic Life. The coalitions typically serve as public outreach and civic engagement liaisons on behalf of the city. Two of the coalitions are entirely staffed by city employees.

Tyvoll requested copies of several items while she was actively serving on the SWNI board. Her request included documents related to the organization's finances, fiscal oversight and handling of an internal embezzlement at SWNI back in 2011. The embezzlement was investigated and an employee was indicted, but Tyvoll and Hiller-Webb said they suspected additional financial malfeasance occurred during the same timeframe but was never investigated. Tyvoll's records request also included email correspondence and a slew of other documents spanning nearly a decade. Her request was denied.

"I am appalled at the actions SWNI has taken against SW residents who requested records regarding issues of governance, transparency and financial accountability given SWNI's history of embezzlement," Tyvoll stated in a news release Monday. "SWNI has repeatedly delayed their response to these requests or denied them outright."

Tyvoll served on SWNI's board of directors as the representative for the Hillsdale Neighborhood Association. Hiller-Webb currently represents the South Burlingame neighborhood on the SWNI board.

Hiller-Webb has also run into roadblocks when requesting documents from SWNI, noting the coalition's leaders "pick and choose what they want to release."

After SWNI declined to provide the records to Tyvoll, she asked the Multnomah County District Attorney's Office to weigh in. Initially, the DA's Office lumped SWNI in with neighborhood associations, saying they didn't qualify as public bodies. Tyvoll asked for another review, noting the distinction between neighborhood associations, which are not directly funded by the city, and district coalitions, which are paid by the city to perform tasks like public outreach. The DA called it a "close call," but ruled that coalitions like SWNI are not public bodies.

"This case is a close call. On the one hand is the importance to the city of the district coalitions in furthering community engagement," District Attorney Rod Underhill wrote on May 18. "On the other, SWNI has no public employees; it is an organization that arose independent of government; and the city has no control over its operations apart from the power to stop funding it."

The lawsuit filed Monday argues that SWNI should have never been considered exempt from Oregon's public records law, because it is the functional equivalent of a government body. Like most other district coalitions in Portland, SWNI gets the bulk of its annual funding from contracts with the city and related city bureaus. In fact, roughly 20% of Civic Life's annual budget goes toward funding district coalitions.

The most recent round of contracts with the city's district coalitions totaled more than $1.6 million.

"It's not an insignificant amount of money going to these nonprofit coalitions throughout the city, and that's not lost on us," Hiller-Webb said in September, before the lawsuit was filed.

Alan Kessler, a Portland-based attorney representing Tyvoll and Hiller-Webb, says that matters when considering the function and purpose of an organization.

"I don't think Underhill got it right," Kessler said of the former DA's opinion issued in May. "I don't think he got it right with respect to neighborhood associations, either, to be honest. I think these are publicly funded bodies that do work that is fundamental to the city. I think ONI — now Civic Life — is basically the civic outreach arm of the city of Portland, which doesn't do much of its own outreach otherwise. The city bureaus often don't have lists of people to contact, they rely on their district associations. The city has effectively outsourced its public communication function."

It's unclear what impact, if any, the lawsuit would have on the city's other district coalitions if the plaintiffs win.

SWNI representatives did not respond to requests for comment Monday.

During previous interviews, Sylvia Bogert, executive director of SWNI, has said the coalition's initial reluctance to release the swath of records stems from its concern over some older documents being confidential and exempt from disclosure, even to sitting board members.

"We felt we were following Civic Life's standards on what is privileged and confidential," Bogert told the Connection in late August, noting documents related to legal matters and personnel could create legal liability for SWNI if they were released to the public.

SWNI's initial response to the records request marked the beginning of a tailspin for the district coalition.

Months-long battle over transparency

While the DA didn't compel SWNI to release the records requested by Tyvoll, Civic Life did.

Around the same time as the DA's Office's review of the request was under way, the city bureau intervened to request the same records that were denied to Tyvoll.

SWNI responded by questioning Civic Life's legal ability to request the records before issuing a nearly $31,000 cost estimate to produce the documents, which included staff time to review each document.

SWNI became embattled with the city.

A few months later in July, when it came time for the Portland City Council to renew its contracts with each of the district coalitions, it renewed all but SWNI's, citing concerns over finances and transparency. Instead, the city temporarily withheld funds and commissioned a forensic audit of SWNI's finances and operations, which is ongoing.

Since then, the city's Bureau of Environmental Services, which had also previously contracted with SWNI, pulled its funding and diverted funds to a different district coalition — Neighbors West-Northwest.

"SWNI's estimate of $30K to provide records to Civic Life is beyond my comprehension since SWNI is primarily funded by taxpayer money and they must provide these records as per their contract with Civic Life," Tyvoll noted.

Officials with Civic Life say they offered to review the confidential documents of concern with SWNI early on, but the coalition instead hired an attorney.

"If you went through and identified every single email with a half-page description of why (it was confidential), we felt it was better to have legal counsel represent us," Bogert noted in August.

SWNI's board of directors said in September they expect the organization will run out of money before the end of the year. Employee furloughs were put in place recently.

City officials, including Portland Mayor Ted Wheeler during a recent neighborhood association event, said SWNI is in the process of turning over the requested documents to the city for audit. Wheeler indicated he expects the process will go smoothly, so SWNI can eventually see its city contract restored.

For Hiller-Webb, even if the documents eventually become public record, she doesn't want others to go through what she and Tyvoll did.

"My intent with this complaint is to ensure that taxpayers, who are the primary funders of the coalitions, who seek access will have the transparency provided to them as SWNI's mission is to serve all," Hiller-Webb said.


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