In 1999, Kathy Hewitt, the executive director of the Valley Community Health Center (now Axis Community Health) was found to have misappropriated funds and overspent the agency's budget by hundreds of thousands of dollars, nearly bankrupting the agency that she founded in 1972. Again, it was all a surprise to the board of directors. Faced with its dire financial situation, a group arranged for a bridge loan through Valley Community Bank to meet payroll and other short-term commitments. Then it hired turn-around specialist Ronald Greenspane to take the reins and save the valued nonprofit health center. Greenspane made a number of difficult and unpopular decisions, cutting payroll and services to the bone, and spinning off the center's money-losing homeless shelter in Livermore and its community food bank, both compassionate commitments by Hewitt and the board but without revenue to support them.
Last week, an in depth investigation by our reporter Glenn Wohltmann showed the Tri-Valley Community Foundation facing similar financial troubles. Ongoing overspending has left the agency nearly $175,000 in debt with a pattern of overspending that began in fiscal 2006-07, when the charity brought in nearly $1.36 million but spent more than $1.6 million. That's been a consistent pattern since then. In 2009-10, "other expenses" had climbed to just over $1 million and salaries had grown to nearly $418,000. The tax return for the year also claimed 108 employees and 50 volunteers. One of those was the affable Dave Rice, the TVCF's long-time director who was promoted to president of the organization and paid $98,571 with the approval of its board of directors.
Dave Rice is now gone and board chairman Ron Hyde, a former Alameda County Superior Court judge, has stepped in to take the reins, as Ronald Greenspane did when he saved Valley Community Health Center from bankruptcy. Only this time, the board that should have spotted the financial crisis several years ago remains the same; even Hyde stays on as chairman. Whether a turn-around specialist is needed, we can't say. So far, Hyde and his board seem to be taking the right steps in using an outside firm to undertake "deep audits" to see if there are greater losses or unfulfilled financial commitments. We know from experience that record-keeping was sloppy at the TVCF, if records were kept at all. Contributors to the recent Pleasanton Weekly Holiday Fund had their checks deposited with the TVCF to take advantage of its 501(c)3 charitable contribution status. Fortunately, all the checks came to the Weekly first, were recorded and the names of the donors published. The $150,000 collected from donors, including a $50,000 match from the TVCF, was paid out to nine beneficiaries last month. The deep audit now under way will determine if there were other promises that weren't kept and, because of the organization's weak financial state, may never be paid.
Should the Tri-Valley Community Foundation go forward, as the CVB and Axis Community Health have? The results of the audit and expectations for future funding will have to decide that. But most local donors would like to have a local organization to help them identify the needy and make their contributions. United Way offers that service. We'd prefer the TVCF if it can regain public confidence and prove that it's well managed and its financial dealings are fully transparent.