County will consider an EOB bailout

By Timothy Pratt

Friday, March 3, 2006 | 7:45 a.m.

Buckling under spiraling debt and facing a future in doubt, the Economic Opportunity Board is looking for $250,000 from Clark County to help pay bills.

The County Commission is expected to vote at its Tuesday meeting on an "emergency grant," money that would then be used to write checks to Nevada Power, Sprint, Xerox and dozens of other local and national companies the EOB owes money.

Federal, state and county funds were supposed to pay those bills in the first place, but allegedly illegal misuse of funds as well as mismanagement has landed the organization in a financial hole that grows deeper each day.

Commissioner Yvonne Atkinson Gates, whose district covers the area where EOB has some programs for the poor, called for the grant.

"There are a number of citizens, some of whom are the most vulnerable, who rely on EOB for a number of services to meet the most basic human needs," she said. "If EOB were to shut down, there would be a huge impact."

Once the Las Vegas Valley's largest nonprofit organization, the EOB has faced at least four years of negative reviews from federal and state funding sources, resulting, most recently, in the loss of its largest remaining program - the $12.6 million Head Start - as well as several eviction notices, a breach of contract letter from the state, mounting unpaid bills and other crippling problems.

EOB officials didn't return calls for comments.

But Assistant County Manager Darryl Martin, who also fills the county's seat on the EOB's board, wrote the recommendation to the commission that the emergency funds be granted.

He said the organization will have to "back up every single penny" for which it is asking, and that the county is "not just going to write a blank check."

The resolution and attached exhibits that would authorize the expenditure of the funds, if approved, lay out a series of conditions tied to those funds, Martin noted.

Those conditions include obligating the EOB to sell its remaining asset - KCEP, a public radio station - within a year from the date of the agreement, a deal that the anti-poverty organization is touting as a way out of its financial worries.

The county also would submit the organization to a top-to-bottom administrative and financial review, as well as recommend remaking its board.

When it was noted that the state made the same recommendations and put them in action two years ago after the organization could not account for $2.1 million in child care funds, Martin said those steps did not produce satisfactory results.

That review and the hiring of an outside group to set the organization straight cost taxpayers at least $600,000. The federal government also reviewed the organization at least four times in the last two years, citing mismanagement and shoddy treatment of the poor.

And though the board was changed, six of the 12 current members were on the board before the state moved in.

Atkinson Gates said the difference in any reviews done this time would be that county personnel would be doing them. She also said she would like to see an entirely new board overseeing the organization.

But Martin said it may be necessary to hire an outside auditor to look at the EOB - and if that process turns up questionable expenses, the county could amend the agreement and take back some of the $250,000.

Mike Willden, director of the state Health and Human Services Department - overseer of the EOB's $5.5 million child-care grant - said questionable uses of funds continue at the organization.

"We believe they've used child-care advances to pay nonchild-care-related expenses," he said.

That led the state to issue a breach of contract letter to the EOB last week, advising the organization that it had to pay past due bills or lose the contract.

But the county's money could bail the EOB out of that problem, Willden said.

"That would cure our breach of contract," he said.

As for whether the whole series of events was a case of robbing Peter to pay Paul - the repeated reviews, the shifts in the board, the county tossing a taxpayer-funded lifeline - he said that putting the 42-year-old organization's programs in other hands would not be impossible, but difficult.

"Somebody else could do all that, but there would be a tremendous amount of work and pain," he said.

Timothy Pratt can be reached at 259-8828 or at [email protected].