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Urban League's finances teeter

The Tampa affiliate talks of fiscal reforms after the national group puts it on probation and the United Way breaks ties.

By JEFF TESTERMAN
Published February 16, 2005

TAMPA - For 83 years, the Tampa-Hillsborough Urban League has worked to help the county's neediest residents, from fighting for a hospital for black people to providing job training and housing relocation help.

But in recent months, signs of financial distress have appeared with alarming regularity, placing the mission of the venerable organization in doubt.

Problems with fiscal accountability were so numerous that the National Urban League placed its Tampa affiliate on probation, Tampa league officials said, making it ineligible for funding from the national group. And a major benefactor, the United Way of Tampa Bay, went even further, terminating its relationship with the local Urban League.

"They're not in particularly good shape," said Hillsborough County Budget Director Eric R. Johnson, basing his remark on a recent audit. "They're living on the edge financially."

The signs of trouble began popping up a year ago, when the league was slapped with more than $150,000 in IRS liens for failing to pay payroll taxes. A contractor filed another lien for more than $400,000 for renovation work on the league's new headquarters in the Centro Espanol building. The nonprofit's employee health plan was canceled when a $38,000 premium went unpaid. The league also fell behind on its mortgage payments, an audit shows.

Last month, Hillsborough County, which contracts with the league for services, rejected a request for a $32,910 reimbursement for 270 people who attended Dr. Martin Luther King Jr. Day services at the First Baptist Church of College Hill. Attendance at a prayer service did not meet the requirements of the league's contract to provide race relations symposiums, county officials said.

A few days later, the county declared the league's $97,512 contract in default when the league missed a deadline to file an annual audit.

The United Way of Tampa Bay put the league on probation because of fiscal questions. It asked the Pinellas Urban League, a separate entity, to oversee United Way funding to the Tampa chapter, according to Pinellas CEO Herman Lessard. Then, this week, the United Way confirmed it would terminate its partnership with the league March 31.

In the fiscal year that ends in June, the league is receiving $60,000 for job training and $94,500 for a family nurturing and literacy program. Now, that $154,500 will vanish from the league's budget.

"The audit we did receive did not provide us with the sense of comfort that all the bases are being covered," said Diana Baker, president and CEO of the United Way of Tampa Bay. "The community needs a strong Urban League, but at this point, it doesn't appear the agency can meet the community's needs."

The Tampa-Hillsborough Urban League's board chairman, Thomas Huggins, admitted to being "a little puzzled" by the United Way's action, because of numerous corrective steps already taken.

"I guess our recovery is not as quick as they wanted," Huggins said. He said more reforms are under way.

Last year's audit of the Tampa league was finally delivered to Hillsborough County on Feb. 4, more than 90 days later than required. It revealed serious deficiencies.

The league had $1.2-million in accounts payable and was "significantly past due" in paying payroll taxes, health insurance, contributions to employee retirement accounts, and assorted vendors and contractors, according to auditor Leonard Marsocci.

The CPA also remarked that "accurate financial information was being withheld by the league's former financial officer." Asked about that, Marsocci said his comment referred to negligent bookkeeping.

Johnson, the county budget director, said he thinks the league overextended its finances when it approved a $5-million plan to renovate its new headquarters in the historic Centro Espanol de West Tampa building at 2306 N Howard Ave.

The two-story brick building, which features arched windows and ornate tile floors, was built in 1912. A social services center for Spanish-speaking residents, the structure was listed in the National Register of Historic Places in 1974.

Construction delays ate up funds and delayed possible lease agreements for offices on the building's first floor, and today, there is no cash left to renovate the building's cavernous theater, now shuttered and littered with debris.

"You can be romanced by buildings like that, but if they had a do-over, I'm sure they'd take it," said Bob Gilbertson, president and CEO of the Tampa Metropolitan YMCA, which partnered with the league in an $804,137 dropout prevention and jobs training program last year.

Gilbertson's assessment of the Urban League's performance: "Their administration has not been strong, but everybody agrees the work they do on the street is first-rate."

A similar assessment came from Lillian Stringer, spokeswoman for the Tampa Housing Authority, which extended a multiyear contract to the league to provide services to 3,100 families forced to relocate from College Hill and Ponce de Leon public housing.

"Their services were excellent," Stringer said.

In addition to those more recent efforts, the Urban League over the years pushed for the first high school and hospital for blacks in Tampa, and secured the employment of the first black police officers and civil service employees in the city.

Facing news of probation by the National Urban League and budget cuts by the United Way, local league officials say reforms will be accelerated.

A new financial consultant, Frank Galindo, was brought in to oversee accounting matters, said Darrell Daniels, the league's acting CEO since the retirement last year of the league's longtime leader, Joanna Tokley. An oversight committee has been appointed to monitor spending, Daniels added.

Earlier this month, Wachovia Bank advanced $325,000 to the league - taking an existing loan to $1.82-million - to provide cash to erase the IRS liens and pay for employee health insurance and retirement contributions.

Late last year, the county stepped up with a check for $422,837 to pay off the last construction lien on the Centro Espanol building. It was not a loan but a gift, requiring payback only if the league sells the building.

Why hand cash to an organization with a faltering financial statement?

"We have a long-term relationship with them, and they have a good record of delivering services," said Johnson, the budget director. "And they were clearly in a cash-flow crisis."

"It's been a long, hard road for us, but we are developing our recovery plan," said Huggins. "The board recognizes it's necessary to save this organization's legacy. We have always maintained services to our constituents, and that remains our commitment to the community."

--Times researcher Cathy Wos contributed to this story. Jeff Testerman can be reached at 813 226-3422 or by e-mail at testerman@sptimes.com

[Last modified February 16, 2005, 01:20:12]