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Home My WebLink AboutNB 2 FEEDBACK FDATN 05-21-90r DATE: TO: FROM: May 16, 1990 William A. Huston, City Manager Administrative Services Department SUBJECT: FEEDBACK FOUNDATION EMERGENCY FUNDS RECOMMENDATION: Pleasure of the City Council. ALTERNATIVES: 1 NEW -BUSINESS N0. 2 5/21/90 Inter - Com 1. To provide "actual -cost" funding to the Feedback Foundation for nutrition services for June 1990 in the amount of 3 400_ --- which staff estimates will cover wages, food, and other program costs. (Wages are approximately $1,500 and program costs are approximately $1,900.) 2. To provide the $6,000 requested from Feedback Foundation. (This is based on a percentage of the cash deficit and is not related to actual costs for Tustin services.) CONDITIONS: Whatever alternative the City Council chooses, staff recommends the following conditions of payment be communicated to Feedback and the County Area Agency on Aging: 1. An independent auditor be retained by the County to do a complete "all funds" audit of Feedback Foundation. 2. A management audit be conducted as well, to ensure that Feedback Foundation is operated efficiently and effectively. 3. The recommendations from both the financial and management audits be included as stipulations for renewal of the next contract between Feedback Foundation and the Area Agency on Aging. BACKGROUND: Feedback Foundation, in partnership with the City of Tustin, provides a hot lunch program at the Tustin Area Senior Center. The City provides program and dining space, custodial support, office space, utilities, and staff supervision at no cost to the Feedback Foundation. The City also provides $5,500 to the Consolidated Transportation Services Agency for senior transportation. The Page 2 Feedback Foundation contracts with the County of Orange to provide this program with federal funding through the Older Americans Act. In May the City Council received a letter from Shirley Cohen, Executive Director of the Feedback Foundation, stating that the Foundation had a "serious emergency" on its hands of a cash deficit of nearly $200,000. The Executive Director said that unless the host cities and the counties grant emergency funds, that Feedback may be forced to close nutrition sites for the month of June. In this letter, Ms. Cohen asked the City for $6,000, based upon a percentage formula of the entire deficit. As far as staff can ascertain, this is not related to actual program costs for a month. Ms. Cohen asserts that the cash deficit is due to a 1114% increase in raw food costs and a sharp decline in participant donations." She also cites a slow growth rate in an Anaheim Adult Day Care Center. After review, staff has concluded Feedback's current financial problems appear to have two causes: 1. Older Americans Act funding has not kept pace with increased demands for service; Feedback Foundation apparently has increased its service without forecasting the outcome at the end of the fiscal year. 2. There appears to be a lack of fiduciary responsibility on the part of the Feedback Foundation regarding its funds. A lower -level accountant has been terminated. Questions regarding executive oversight and management remain. The California Department of Aging administers Older Americans Act funds. This is a federal source of funding which gets "filtered" several times. The appropriation comes from the federal Act itself, then to the State of California who administers contracts with each county; in Orange County it is the Area Agency on Aging, A.A.A., which then oversees a contract with the Feedback Foundation. The California Department of Aging has made a subjective decision that Orange County would receive no cost -of - living increases, because the per capita income in Orange County is higher than other counties with whom the State Department works. For example, Alameda County may have received a cost -of -living increase, while Orange County has receive none for the past eight years. This is a national problem; Older Americans Act nutrition funds have not kept up with demand; however, the Feedback Foundation has not upheld its contract with the County of Orange to provide a certain number of meals in fiscal 89-90. The Feedback Foundation, this late in the year, has come up with a serious cash deficit about which it knew nothing just several months ago. This is a serious problem. Page 3 The Director of the Orange County Area Agency on Aging, Peggy Weatherspoon, has been contacted by telephone. Her position at that time was that the County A.A.A. desired to "buy time" to get Feedback through this crisis and make the necessary arrangements for evaluation of current management. In a letter dated May 8, the A.A. A. Director was very supportive of Feedback; and it is staff' s understanding that the County of Orange has allocated $100,000 in emergency funds. Another alternative staff reviewed was contracting with another non-profit organization to provide Tustin meals. Tustin is on the border of the area that is served by South County Seniors, and staff asked whether it would be possible to have that non-profit organization provide meals to our seniors. According to Peggy Weatherspoon, the only way the City can take advantage of federal money for senior nutrition services is to contract with the Feedback Foundation. The County A.A.A. has announced that a meeting concerning the 1990/91 Feedback Foundation contract will be held May 24. Staff has been told that more support from the cities may be requested at that time. Staff will attend and keep Council informed. Meanwhile, Council can review Attachment "B" to see what actions the other host cities have taken as of this writing. Royleen A. White, Director Community and Administrative Services RAW:kd Attachment A: Letter from Shirley Cohen to City Council Attachment B: Host City Actions RAW:FDBKFUND.WP ATTACHMENT "A" ORANGE COUNTYInce -,-Feedback Foundation F I 1200 N. KNOLLWOOD CIRCLE • ANAHEIM, CA 92801 • (714) 220-0224 April 30, 1990 The Honorable Richard B. Edgar Mayor, City of Tustin 300 Centennial Way Tustin, CA 92680 Dear Mayor Edgar and City Council Members: We have a serious emergency on our hands which requires immediate consideration and assistance. Feedback Foundation has a cash deficit of nearly S200,000 due to a 14% increase in raw food costs and a sharp decli.ne in participant donations. A slow growth rate in the number of participants at the Anaheim Adult Day Health Care Center, due to inadequate transportation, has also been a major factor placing us in a serious cash emergency situation. To avoid closing our nutrition sites for the month of June, we are asking our host cities to assist us through this crisis by granting emergency funds to make up half of the deficit. We are requesting the County of Orange to assist us with the other half. By June 30, 1990, we will have served 44,144 meals to elderly Tustin residents, or 6% of our total annual meals. Thus, we respectfully request a 6% Council Contingency Fund allocation of $6,000. Each day, we serve 1,689 meals at congregate sites, and 855 meals to homebound persons. We regretfully and respectfully request this item be placed on the May 7, 1990, Council Agenda. If emergency funds are not forthcominCP g by the end of May, Feedback may be forced to close nutrition sites for the month of June. Thank S you for your consideration of this request. If you have any questions, � please contact me at 220-0224. The City of Tustin has always been wonderful to us and to its senior residents, and we are deeply appreciative of your continued support. Sincerely, Shirley A. Cohen Executive Director SAC/hh Enclosure cc: City Council Hembers William Huston, City Manager Attachment B HOST CITY ACTION CITY FEEDBACK REQUEST STATUS Anaheim $17,000 $17,000 (Council approved) Brea $ 61000 Will pay additional salaries for June, up to $2,900 Buena Park $ 61000 No support available due to HCD funding restrictions Costa Mesa $12,000 $12,000 (Council approved) Fountain $ 11000 Unknown Valley Fullerton $ 51000 Will pay $5,000 as requested with the condition that $4,000 be allocated to the Meals on Wheels program. Huntington $ 91000 No support available Beach due to HCD funding restriction Laguna Beach $ 21000 $2,000 (Council will consider) La Habra $ 31000 $1,900 - salaries Orange $10,000 $15,000 (Council approved) Placentia $ 11000 $1,000 (Council will consider) Santa Ana $22,000 $22,000 (Council approved) RAW:HOSTCTY.wp