New leadership to address senior center’s financial stability, transparency
January 7, 2021 | By Cheryl Casey
The Waterbury Area Senior Center is usually a gathering place and hub of activity including the daily Meals on Wheels program serving seniors in and around Waterbury. Photo by Lisa Scagliotti
Correction: This story was corrected to indicate that the IRS penalty for late payroll taxes covered the period from 2014-2017.
* * *
For the Waterbury Area Senior Citizens Association, operational and financial challenges brought on by the coronavirus pandemic have only compounded growing worries about its management.
The association operates the Waterbury Area Senior Center on Stowe Street in Waterbury and is funded by a combination of sources, including private donations and local, state, and federal taxpayer dollars.
The senior center plays a vital role in the Waterbury-area community. More than just managing the Meals on Wheels program and providing congregate meals to senior citizens, the senior center nourishes the social and emotional well-being of local seniors. Its programs include bingo and dominos get-togethers, exercise classes, and blood-pressure screenings.
The isolation inherent to a pandemic has posed a considerable challenge to the Center’s ability to conduct these programs and seniors’ abilities to access them.
Taxpayers in the towns served by the association -- Waterbury, Duxbury, Bolton, Moretown, and Middlesex -- constitute a significant source of funding to the Meals on Wheels program. According to Waterbury’s annual Town Report in March 2020, the association received $30,000 from the town in 2019. The appropriation was the same in 2020 with $10,000 budgeted in the General Fund and another $20,000 approved by voice vote at Town Meeting.
The center is requesting $30,000 again this year, and the Waterbury Select Board will be reviewing its appropriation at its meeting next Monday, Jan. 11, as it works on drafting the budget to present to voters in March.
In addition to Waterbury, the town of Middlesex in 2020 appropriated $10,000; Moretown budgeted $4,999, Duxbury $2,500, and Bolton $1,000 for the association’s Meals on Wheels service.
The Central Vermont Council on Aging provides federal funding, kicking in $3.76 per meal that the senior center serves each year, according to the Council’s Nutrition and Wellness Director Kathy Paquet.
But the organization’s track record points to struggles. In the past three years, it has had three executive directors and according to tax documents publicly available, it has posted deficits five times since 2007.
Faced with new challenges due to the COVID-19 pandemic, the organization is filling vacancies on its board of directors and looking to get its financial matters in better focus.
Rocky annual meeting
The tenuous situation was evident at the association’s annual meeting held Nov. 9 via Zoom video conference.
Attendance at the meeting was a mix of board members old and new, prospective board members, senior center volunteers, and interested members of the public. Although Executive Director Vicki Brooker – appointed to the post during the pandemic having served twice as interim director in the last two years – appeared nominally in charge of the agenda, moments of awkward silence stretched uncomfortably as no one seemed to be leading the meeting.
Justin Blackman, who joined the board only four weeks earlier, attempted to fill some of those voids, pulling out a copy of the bylaws for reference.
The meeting was also short on substance and context.
Brooker’s financial report consisted of only a handful of numbers for the year to date: the association’s revenue ($257,564.12), its expenses ($240,894.75), the amount saved by Kitchen Manager Kim Hough by switching food vendors ($15,000), the total number of Meals on Wheels delivered (17,409), and the number of individuals who had been served these meals (112).
State Rep. Theresa Wood, D-Waterbury, was on the video call and asked Brooker for the numbers to be put into context. “It’s hard to judge data without seeing comparisons,” Wood said. Brooker had no details to offer, indicating she “hasn’t figured out the database yet.”
Brooker was similarly unable to answer Wood’s follow-up questions about whether the association had applied for grants under the federal CARES Act, and how much of the association’s revenue might have come from this funding.
Later in an interview, Wood remarked that even though the association is a private nonprofit, “when you accept public funds, in my estimation, you really have an obligation to be totally transparent to the public. That means presenting a budget, financial statements, potential changes that you’re thinking about or major changes that have happened.”
The lack of context for the numbers presented at the annual meeting was concerning, Wood continued. “The public really has no opportunity to ask relevant questions because they didn’t really see a full picture of the organization,” she said.
Details on how the current number of meals being served compares to previous years, how that number compares with estimates, whether expenses are on track with projections, etc. are all crucial context to be provided in an organization’s annual report to its stakeholders.
“It’s one thing if you’re a private nonprofit and you go out and fundraise and you get 100% of your money from private donors,” Wood said. “When you accept public money, and you in fact request public money, you have an obligation to be up front with the public and your funding sources.”
Brooker did not respond to requests for an interview or email inquiries about why the annual report contained so little detail.
Background ahead of funding request
The IRS mandates that nonprofits make exemption applications and three years’ worth of tax returns available to the public upon request. According to the National Council of Nonprofits, an advocacy group for charitable nonprofits in the United States, best practices in accountability and transparency go above and beyond legal requirements.
The group’s website addresses the ethics of fundraising: “A fundamental financial transparency practice is to make it easy for visitors to a nonprofit’s website to find information about the nonprofit's budget-size and its sources of revenue, as well as information about board composition, programs, outcomes/impact, staffing, and donors.” Timely reports are also expected to be provided to any government funding sources.
Waterbury Town Manager Bill Shepeluk confirmed via email that he has received “financial statements from the Waterbury Area Senior Citizens Association, including a balance sheet and income/expense statements for its fiscal year that ended October 31, 2020.”
He added that each year, a representative from the senior center attends a select board meeting often during the town’s budget building process to answer questions. “Financial statements are generally provided by the organization and they are reviewed briefly by the Board,” Shepeluk said.
In an interview several days after the annual meeting, Blackman confirmed that “full and clear financials have been made available to the Board,” but he “really couldn’t comment” on why that information was not made available at the meeting.
Blackman admitted his newness to the Board meant he did not yet know enough information to answer a number of questions and that he would like future annual meeting reports to have more detail. He added that within a few months he expected better understand and be able to answer questions about the association’s administrative and financial operations.
At Monday’s Waterbury Select Board meeting, Shepeluk said Blackman is expected to attend the next board meeting Jan. 11 to discuss the senior center and its funding request for 2011. Shepeluk shared the association’s financial statement sent to the town for review. It shows the organization ended its fiscal year on Sept. 30, 2020 with $16,669 of net income. It’s unclear how program income totaled nearly $102,000 despite a budgeted amount of $67,500. Fundraising was down about 22% at just under $12,000 compared with a projected $54,000; donations were off by 12% at almost $127,000 of an anticipated $144,000, according to the statement. The report confirms cost-saving measures implemented by Hough in the kitchen.
‘Transparency’ as a theme and goal
During the November annual meeting “transparency” was the predominant theme among board members. Roger Tubby, another recent addition to the board, repeatedly lauded a purported renewed commitment to transparency during a discussion on encouraging community involvement in meetings and fundraising. “Making this [participation] available to the larger community is marvelous,” he said.
Outgoing Board Chair Phil Walbridge expressed his hope that new initiatives and new leadership would “make us a clear and transparent organization again.”
Walbridge did not reply to a follow-up request asking him to clarify what he meant by “again.”
Transparency in financial reporting and strategic planning takes on even greater significance for an organization whose end-of-year net assets have varied widely in recent years.
According to the 990-EZ forms obtained through ProPublica, the association has ended its fiscal year with negative net assets for the last two years of available tax filings: -$3,485 in 2018 and -$5,756 in 2017. The association experienced a similar trend from 2007-2009, reporting negative assets ranging from -$7,544 to -$14,254.
Figures for the intervening years show a widely different financial picture. Tax forms show positive reported net assets of $24,965 in 2010 and then $64,026 in 2011, for example.
At the board’s regular monthly meeting on Nov. 16, outgoing Treasurer Wendy Magee’s report referred to an application to the IRS that she noted was still under review, to “abate the interest and penalties” of $12,160.08, on the prior year’s late payroll taxes.
During that meeting, however, board members struggled with the level of transparency to offer. Unused to having members of the public or press in attendance, board members debated at several points what information should and should not be shared with non-members.
Before Paquet could review the new Central Vermont Council on Aging contract with Brooker and the board, Tubby pointed out that “we need to make sure the information being shared is publicly available. We cannot talk about information such as personnel, contract negotiations. We should not talk about financials that are not publicly available, such as unaudited financials.”
He further cautioned, “Let’s be aware of how we are proceeding. If this is an open meeting, then it should be warned, broadcast to the entire community.”
Magee explained that board meetings have been public in the past, although “we haven’t been the greatest about notifying people publicly of when they are going to occur. We have made the beginning of the meetings public and then gone into executive session” for such things as human resources matters or “financial issues that haven’t been audited and made ready for the public,” she said.
Blackman added that he had invited a member of the press to attend, wanting local reporting to “help be a mouthpiece to the community for what’s going on.”
Paquet’s explanation revealed that the new contract was standard and differed little from the previous year’s.
When it came time for the treasurer’s report from Magee, she and Tubby again debated sharing information, specifically about whether financial details were considered “audited” and therefore public. Tubby referenced the 990 filings, audited by Sullivan Powers & Co., as the numbers “that are publicly presentable.” He went on to express “that unless somebody knows differently, I’m not sure that our operational expenses, revenues, etc., are public knowledge.”
Magee disagreed. “That’s not my understanding,” she responded. “It’s nothing we haven’t supplied to, say, the Town of Waterbury when they’ve asked for our balance sheet or our profit and loss statement.”
Magee vouched for the financials. “[The numbers] have been audited from the standpoint of the duties of the treasurer,” she said. “The accounts are reconciled every month...and there’s nothing in here I wouldn’t feel comfortable giving out for information.”
Blackman again settled the confusion: “We have a duty to be open about what’s going on, and I don’t think there’s anything to hide in what we happen to have in the bank at the moment or some of our monthly operational figures, understanding these are monthly numbers being given out.”
Time to ‘think outside the box’
Magee’s final report as treasurer carried a strong message for Blackman, newly elected as board chair, and the rest of the board. Revenue and expense details compared against the FY21 budget that the board approved in October already indicate a slow start to the new budget year.
A month and a half into the new fiscal year, expenses were on track with projections but revenue was falling short. The association had brought in 6.34% of its projected budget of $225,199, well short of the 12.5% anticipated for that time period. “We are underachieving in our income...by almost $14,000,” Magee reported. The association anticipates a one-time COVID relief check of $23,000 from Central Vermont Council on Aging, “but we really need to keep a close eye on the income,” Magee cautioned.
For Blackman, the 2021 priorities for the association are to keep the Meals on Wheels program running and create a reopening plan for the senior center that brings back events once public health restrictions ease on community gatherings.
“This Board is going to have to be very good at thinking outside the box” for fundraising, Blackman observed. To that end, he has established a fundraising committee and he invites members of the community to get involved to help come up with new ideas. In addition to Blackman and Tubby, two other new board members are John Castaldo and Ron Guylas. Previous Chair Walbridge remains along with experienced directors Mark Forkey, Arliss Fuglie and Mandy Brennan.
Looking ahead, Blackman said he expects the association to be “a leaner, meaner machine, ready to do things better and learn from the challenges.”
Cheryl Casey is an associate professor of Communication at Champlain College and lives in Waterbury Center.