LAKE COUNTY — Lake County Community Action Agency (LCCAA) board of directors continue efforts to sort out the agency”s financial mess. Actions were taken Tuesday to dispose of real property and discussions concerning employee insurance benefit deficits and possible future actions also took place.
The board reviewed a letter from the Department of Community Services and Development (CSD) indicating the CSD”s intent to terminate Community Services Block Grant (CSBG) contracts and revoke the LCCAA”s eligible entity status. Following review, the board indicated that it will likely voluntarily agree to terminate CSBG contracts and relinquish its eligible entity status to allow designation of a new provider and restoration of CSBG-funded services to the community as quickly as possible.
“This appears to be the direction we have to go in,” Tom Jordan, board president said.
According to the letter, the CSD has not received response to a Feb. 17 letter requesting an update on the LCCAA”s operational/financial status. “LCCAA received Peer to Peer assistance, but the agency”s Board of Directors has not been able to identify and/or pursue any viable course of action either toward recovery or dissolution of the agency,” the letter from Denise Arend, CSD acting chief deputy director states. “Although LCCAA was able to locate and provide only a small portion of its financial records to CSBG peer consultants and CSD Audit staff, both the peer report and CSD”s solvency review indicate that the agency faces a large operating deficit and debts totaling over $340,000.”
The letter also cites that the agency”s 2009 audit was due to the CSD in September 2010 and is delinquent under the terms of the CSBG contract. A delinquency letter was issued on Nov. 10, 2010, the letter states.
“Under the above circumstance, CSD must take immediate action to ensure that the CSBG portion of the LCCAA”s funding can be utilized, as quickly as possible, to serve low-income communities in Lake County,” Arend stated in the letter.
The CSD provided the agency with four options for response. The board indicated it will likely act on Option C, which is to voluntarily terminate CSBG contracts and designations.
The board voted to amend its by-laws in order to better clarify language related to disposal of capital assets, including real property. Jordan said former language made it sound like the board could not dispose of property at all. New language clearly dictates that proceeds from any capital sale will be directed toward agency operations and that no single individual can profit from the sale of capital assets.
Following amendment to the by-laws, the board proceeded with discussion of disposal of real property located in Clearlake that the agency used to provide transitional housing. The board is working with area realtor Sharon Bassham to dispose of the property.
According to Bassham, there are currently three offers on the property, all of which she said are higher than the market value of the property. She said they are all as is, cash offers.
The board voted to proceed with the offer that yields the greatest return. The agreement will require a firm financial commitment within 14 days of Tuesday. Should the terms not be met, the agency will move onto the next highest offer.
The board said its first priority at present is sorting out employee benefit insurance issues. Former LCCAA employee Denise Newman cited about $5,000 in personal medical bill debt. She indicated that while some payments by the insurance carrier were made to the agency, the agency did not pay the providers. Board director Cindy Poindexter is taking the lead in collecting insurance and billing information from the former employees in order to determine which bills were paid and what is still outstanding.
The board also indicated that it intends to send letters to collection agencies requesting that the burden of payment be taken off the employees and directed toward the LCCAA.
Contact Denise Rockenstein at drockenstein@clearlakeobsever.com or call her directly at 994-6444, ext. 11.
