May 17, 2023 849 PM
MARFA — After failure to complete years of mandatory audits led to the loss of key grant money for the organization, Big Bend Community Action Committee’s Board of Directors terminated the nonprofit’s top staff, throwing the embattled nonprofit into disarray as community leaders scrambled to salvage the remaining programs.
Leadership of the committee — which provides economic assistance to low-income residents across five counties through state grants — have not completed fiscal audits required by the federal government dating back to 2019, leading the Texas Department of Housing and Community Affairs (TDHCA) to defund the utility assistance program provided through the group.
Two weeks ago, after the defunding, Executive Director Adan Estrada and Financial Officer Bernie Zelazny were fired. Last week, remaining staffers and board members gathered at the committee’s Marfa office for a series of meetings on the organization’s future. At the first meeting, on Thursday, some decisions were made swiftly, with Brewster County Judge Greg Henington initiating motions — Presidio County Judge Joe Portillo was appointed chairman of the board, while Big Bend Regional Hospital District Director JD Newsom was appointed interim CEO, “as long as we can have him,” said Henington.
Newsom was present to offer his nonprofit expertise as the committee struggled to get back on its feet, and ended up agreeing to the temporary appointment — it was unclear how long he would be able to fulfill it, given the demands of heading up the hospital district. On Thursday, he gave his assessment of the organization’s current situation.
“The organization is in crisis right now,” said Newsom. “The upper leadership is not here anymore, so there’s going to be a lot of pieces to pick up. It’s also a great opportunity to fix a lot of issues the organization has and come out stronger, but it’s going to take a lot of time and effort.”
The challenges facing the organization were many, and overlapping. Most pressing was the matter of the lost utility assistance program — TDHCA’s Comprehensive Energy Assistance Program (CEAP) — which is now in the process of being transferred to another nonprofit, Community Action Committee of South Central Texas, that will provide those funds to Big Bend area residents.
“The folks receiving utility assistance are going to be in crisis without making sure they’re transitioned to the new organization that’s coming in,” said Newsom. “I think a lot of folks are very anxious about: are they going to have their electricity on next month?”
Recipients of the funds will have to re-apply for the program, Board Member Becky Brewster told The Big Bend Sentinel, but are not in danger of losing their assistance — the funds will simply be funneled to them through a different channel now. “The funds are available to provide energy assistance in our region,” Brewster explained. “It’s just going to take some time for this new agency to get the applications and get the people recertified.”
The organization’s loss of the CEAP is a significant financial hit — one that will have an impact on administrative salaries, said Newsom. Staffers responsible for providing utility assistance through BBCAC have been laid off, their jobs now redundant. Those funds had provided the bulk of the salaries of the now-fired executives, said Brewster.
And just completing the outstanding audits will be a massive blow to the group’s shaky finances. The organization currently has a little over $100,000 in its accounts, said Brewster at Thursday’s meeting; it is estimated that each audit will cost the organization approximately $25,000, meaning $75,000 total to get up to date.
“This would wipe out anything that we have,” said Brewster.
In order to get through the period of crisis, in the short term, Newsom recommended the committee take a look at its finances and ensure expenses are in line with revenue. At present, it isn’t always meeting that goal. BBCAC was spending more than it was taking in to keep up a contract with All Aboard America, a charter bus service to surrounding cities. And despite having just a handful of vehicles in operation right now for its transportation program, the organization last year spent over $61,000 insuring 33 vehicles.
Henington swiftly put forth a number of cost-saving measures that flew through the board. The board passed motions to renegotiate or cancel its contract with All Aboard America, and to cancel its lease on its Alpine office (the organization also has offices in Presidio and Van Horn). The board also decided to take an inventory of its vehicles and see which could be declared surplus and auctioned — a process that was apparently set in motion years ago, but stalled for unknown reasons — and explore taking unused vehicles off the insurance policy.
As for how the organization got into its current mess in the first place, a visit from a state representative on Friday made clear that trouble had been brewing for some time. Micheal De Young, director of TDHCA’s Community Affairs Division, told board members that his office had previously raised concerns about BBCAC’s finances and had tried to help steer it on the right course over the past two to three years, to no avail. His office had sent a consultant previously, and had sent a “very sharp fiscal person” from an El Paso nonprofit, “each time trying to help, to try and get it to work.”
“I regret that we’re at this point that we’re shedding programs and we’re in a tough spot, but we have to ultimately do what’s right for the low-income residents of the counties,” said De Young.
At the point that TDHCA defunded the group’s utility assistance program, BBCAC leadership had received several warnings. De Young said he had called Adan Estrada, then executive director, in the fall of 2022 to warn him that the outstanding audits would soon become a problem; he called again that winter to prod Estrada again, only to be told the 2019 audit would be concluded by January 2023. To date, the outstanding audits still have not been filed, said De Young.
TDHCA’s hands were tied at this point, explained De Young — the federal government requires the audits be completed each year to prove all funds are accounted for and being administered properly. With three years of missing audits, the agency’s compliance division declined to recommend BBCAC for funding.
“We’ve had entities that had a CFO get sick or go out and their records were a little bit amiss — they applied for an extension on their audit and we usually grant it as long as we have the previous year’s audit,” said De Young. “This has gone on too long at this point.”
Bernie Zelazny, former financial officer, told The Big Bend Sentinel he felt unfairly saddled with the blame of the incomplete audits. He attributed the holdup on those filings to outstanding paperwork that the executive director had to provide.
“The problem was materials on payroll, like sign in-sheets and some information on the former weatherization program, which were things that Adan [Estrada] could provide but I couldn’t,” said Zelazny.
Estrada did not return multiple requests for comment.
At this point, with the loss of CEAP, BBCAC still has the Community Services Block Grant (CSBG), a federal grant contracted through the state agency — through that grant, BBCAC receives $150,000. But those funds are administered quarterly, and BBCAC currently has just $75,000 of that grant money in contract, $37,500 of which has already been expensed. The organization is projecting to spend approximately $17,286 in March alone, though that report has yet to be filed. In short, the existing funds are dwindling.
Relying entirely on one grant is likely unsustainable in the long term, said De Young — without other federal funds in significant chunks, it will be difficult to maintain the staff necessary to keep client services running.
“Moving forward, it’s a very difficult walk with a very rural agency and meeting all the requirements of CSBG and making sure that we get all this moving in the right direction,” said De Young. “In my 20 years, I’ve seen probably 15 agencies try this. We have very few CSBG-only agencies — we have two right now, Big Bend being one of them.”
Fortunately, BBCAC’s transportation program — a crucial service offering rides to medical appointments and more for folks otherwise without transit options — has “really great cash flow,” said Newsom, and doesn’t seem in jeopardy. (“It seems like the transportation program is hale and hearty,” said Brewster). But the gradual peeling off of programs — BBCAC had already dropped its weatherization program, which provided insulation services — and lack of funds leaves the future of the organization in question.
“If we keep not doing the programs, then eventually, what are we going to be doing?” said Brewster.
Judge Portillo, now chairman of the board of the organization, said on Tuesday that he wasn’t interested in pointing fingers as to the former upheaval. He was currently hard at work with those still on board to keep the organization above water — keeping the transportation program active, for example, would be vital for many area residents.
“Please, let’s come together, let’s reunite, let’s salvage what we have,” he said. “The mission they have that’s left, transportation, is a vital function for those that can’t drive. We have people that are blind. We have people that don’t own a vehicle. We have people that need dialysis.”
Asked whether he was concerned about existential threats to BBCAC, Portillo declined to entertain the thought.
“I refuse to even let that cross my mind,” he said. “I am going to do everything possible to make sure that what we have continues.”
Correction: A previous version of article used the acronym BBCA to refer to the Big Bend Community Action Committee. The correct acronym is BBCAC. We regret the error.