WHO’S PAYING FOR THIS? SAN LEADNRO SET TO CONTRIBUTE $122,000 TO ACAP FIASCO
By Steven Tavares
The San Leandro City Council will need to do something nearly every city in Alameda County is grappling with—how to pay for the rapid and controversial fall of a three-decades-old program designed to help those in poverty, but now nears dissolution because of gross mismanagement by its director and governing board.
The cost of the plan to square away the finances and debts of the Associated Community Action Program (ACAP) could run as high as $1.9 million, according to a report before the San Leandro City Council for discussion Monday night. The figure is similar to estimates brought before other cities in Alameda County, who according the Joint Powers Authority agreement are liable for an equal share of ACAP’s finances amounting to a one-thirteenth share. The ACAP governing board is made up of 12 county cities not including Oakland and Berkeley, in addition to a representative from the Alameda County Board of Supervisors.
Stephen Hollister, San Leandro’s city manager, will ask the city council Monday to approve an additional $121,539 for the city share of ACAP’s costs. The management company hired by the ACAP governing board in late March estimates the cost of winding down the program’s debt, liabilities, insurance and outstanding wages will run as high as $1.28 million. It also communicated to a group of city managers from member cities an additional $600,000 may be needed to close out ACAP’s outstanding debts, some of which the firm says will not be known until close out of its books are complete. Each city previously contributed $25,000 to ACAP earlier this month, much of which went to pay back wages to its roughly 30 employees.
According to Hollister the additional outlay will come from the city’s General Fund’s undesignated fund balance. Time is also of the essence. The plan laid out by the ACAP governing board, which is comprised of council members from each city calls from the organization to cease existence on June 23 (San Leandro is represented by Councilwoman Diana Souza; Hayward Councilman Francisco Zermeno; Fremont Councilwoman Suzanne Chan).
Any possible resistance from the San Leandro city council or any other county body will likely be muted by an established belief the equal share clause in the JPA is solid. Other cities like Albany and Emeryville which initially balked at the paying its full share, eventually backed down when it was revealed it risked losing more in legal costs by going it alone rather than participating with the entire group.
The stunning and quick demise of ACAP in February caught many in the county flat-footed when employees and vendors who sub-contracted services from the organization began complaining of non-payment. A $75,000 loan was quickly procured from the Board of Supervisors to cover one month in wages, but allegations of graft and mismanagement by ACAP’s executive director Nanette Dillard soon followed. Dillard was let go in March and a possible criminal investigation into her actions is still pending. Last Tuesday, Dillard also resigned her seat on the county Workforce Investment Board, which oversees welfare-to-work and youth programs.
For years, ACAP’s role in the county procuring and distributing state and federal grants to help combat poverty ran relatively smoothly as its funding slowly rose to nearly $3.5 million. Among other programs, it successfully helped county residents establish themselves through programs designed to encourage savings hopefully leading to home ownership or creating small businesses. The program also helped residents whose background made some employers pause because of past substance abuse or incarceration.
Many of the reasons for ACAP’s dissolution are still unknown. Along with a possible criminal investigation into Dillard’s actions at ACAP, a long-awaited audit of its books is still pending.