After months of strained negotiations with the Costa Mesa Senior Center board of directors, the city might take over the ailing 19th Street center sooner than anticipated.
City staff issued a recommendation Friday that the City Council terminate the existing contract with the nonprofit center set to expire in June 2015. The city would take control within three months.
"Upon invoking the 90-day clause, city staff intends to work alongside the existing senior center staff to assure the continuation of programs and services as well as a smooth transition," the staff report states.
The council will also consider several other staff recommendations regarding senior center operations during a special meeting Tuesday evening.
If approved, the city will absorb several functions, including staffing, distributing the center's newsletter, building maintenance, and activities and programs, said Assistant City CEO Tammy Letourneau.
Municipal officials and center board members have spent two months drafting and discussing the terms of a four-page proposed agreement in which City Hall would take over almost all of the center's finances and operations.
Though the center is not solvent, the board has refused to sign the document until the city agrees to amend the indemnity clause in the draft that holds the board accountable for any lawsuits that may arise from layoffs. One condition of the city's takeover is that the board lay off employees, who would be replaced by city-selected staffers.
Staff is pushing the council to not pursue the agreement in an attempt to move the takeover along at a faster pace, Letourneau said.
"Due to the grave financial circumstances facing the [center], and the progressive decline in services, immediate action is required to provide the city's seniors with the care, attention and benefits they deserve," the staff report states.
In past meetings, board members pushed for the city to amend the indemnity clause so that the board would be protected against personnel lawsuits, contending that the decision to terminate employees rests with the city.
However, city officials rejected the argument, pointing to their exclusion from, and lack of voting rights in, closed-session meetings where the layoffs are being discussed.
City staff is recommending that the council not approve the senior center board's request, effectively tossing out the draft agreement.
Financial and organizational problems come to light
An influx of complaints from the city's senior population last year prompted the council to hire Costa Mesa-based Management Partners to investigate the center's operations. It spent several months reviewing paperwork and conducting 26 interviews to gain insight into the culture of the center.
The audit confirmed that the senior center — since 1987 an independent nonprofit that now serves 300 to 400 seniors a day — will run out of money in its general fund by June.
The facility at 695 W. 19th St. operates somewhat autonomously, but relies on the city for a portion of its funding. The city annually grants the center $240,000. This fiscal year, the center also received an estimated $535,570 worth of in-kind services from the city, according to the audit.
For the last several months, city staff has become increasingly concerned about some of the issues taking place at the center, according to the staff report.
The city has received complaints about senior center staffers allegedly criticizing seniors and canceling popular classes, according to the report.
Many clients who approach the city to complain are afraid to identify themselves and believe senior center staff will retaliate and shame them in front of other seniors, Letourneau said.
The senior center's executive director could not be reached for comment early Friday evening.
Since the center's financial situation came to light, services have continued to decline, causing seniors to stop frequenting the spot, Letourneau said.
The senior center staff canceled the brown bag food service provided by Second Harvest, which the seniors depend on for groceries, the May issue of The Chronicle newsletter wasn't published and the application for a federal grant to assist the center was withdrawn after the city began negotiating the takeover, according to the staff report.
"The final straw was the Second Harvest situation," Letourneau said. "The center has continued to deteriorate. Now it's to the point that we need to help them."
Last year, participation in center programs decreased by 20%, and volunteer hours decreased by 35% when compared with 2008-09 and 2011-12.
In order to bring seniors back to the center, city staff is proposing that the council approve an incentive for more seniors to sign up in the next year.
"A free one-year membership will attract more seniors to the center and will provide them with the opportunity to enjoy and benefit from the array of programs and services offered," the staff report states.
Municipal officers have also vowed to improve the aesthetics and safety.
The city's preliminary 2014-15 budget includes $200,000 that has been set aside for costs related to the city taking over management of the senior center, including improvements to the aging building and new furniture.
The council will also decide whether a security officer is necessary to protect the seniors from the "recent influx of homeless and transients around the center," according to the staff report.
Senior center staff has observed the homeless sleeping, storing belongings, urinating and defecating near the building and in the parking lot.
Seniors have complained to the city about the issue, saying it has frightened and deterred some members from attending.
Staff is recommending that the council execute a three-year agreement with Allied Nationwide Security at a cost of $30,000 annually.
Albert Dixon funds create controversy
During the last senior center board's meeting in May, the majority of board members expressed a desire to take their time reviewing the agreement with the city before signing it.
The board recently voted to use funds from a memorial foundation set up by a former senior center member as a cushion to give them more time to negotiate the city's takeover.
In 2006, the Albert Dixon Memorial Foundation was created after Dixon's second wife died, leaving the senior center $650,000.
The board that oversees the foundation agreed to fund the senior center for the next two to three years, said board Treasurer Ron Frankiewicz.
The foundation has already agreed to give the center $50,000, President Mike Scheafer said in a previous interview.
Board members have debated the necessity of using the money, which many seniors believe should fund programming rather than day-to-day operations.
City to select staff
If the city takes over, the senior center board would have the option to stay on as an advisory body to the council. However, the board must lay off all of the center's staff.
To ensure that the senior center's doors remain open thorough the transition, the council will vote whether to approve Eloisa Espinoza as the interim senior center director.
Espinoza previously spent 13 years as the director of the Fullerton senior center. If approved by the council, Espinoza will act as the interim director while the city recruits for the position.
City staff is also requesting that the council approve an annual salary range of $66,432 and $89,016 for the next permanent senior center program administrator, according to the staff report.
The city's long-term staffing plan is to hire a full-time program administrator and nine part-time employees for the center. The center currently has six full-time staff members, according to the audit.
Senior center staff and board members could not be reached for comment by press time.
[For the record, 11:10 a.m. June 9: An earlier version of this story incorrectly said staff wanted the city to circumvent an agreement with the Costa Mesa Senior Center. In fact, that staff wants the city to not pursue the agreement it had drafted with the center. Also, the senior center staff canceled the brown bag service, not the city staff, and the city is not aquiring the center as it already owns it. Rather the money is for taking over management of the center.]