By Martin Ricard, STAFF WRITER
The Daily Review
October 8, 2007
HAYWARD — In 2002, the then-director of the Human Outreach Agency, the county’s only homeless shelter for men, quit his post and left behind a trail of financial trouble.
Soon after Israel Chideya left, the agency’s governing board discovered that he had not been paying payroll taxes to the Internal Revenue Service. The agency was left with more than $120,000 in debt owed to the IRS and about $20,000 owed to the California Employment Development Department, records show.
While the Human Outreach Agency has been able to chip away gradually at its debt, it has never quite been able to overcome its burden. Now, the future of the agency and its homeless shelter are in jeopardy because the IRS is looking to seize the agency’s building.
And that’s only the beginning of its problems.
Directors are now worried that the agency’s financial woes may also have permanently damaged relationships with two of its main funders: the city of Hayward and the Alameda County Social Services Agency. And while the directors are scrambling to come up with additional funding, they are well aware that help may not be on the way.
“It’s like negative, tainted blood flowing through our veins,” Cherise Abel, the agency’s current executive director, said of the agency’s financial trouble. “And we don’t know how to get rid of that.”
On Sept. 14, the IRS initiated the process to begin foreclosure on the agency’s building, which houses on average about 20 people in a 1-1/2-story bungalow on Flagg Street. The agency expects to be formally served with a notice this week, according to Attillio Giovanatto, who has been providing counsel pro bono to the agency since 2005.
Meanwhile, the agency has been running on empty for the past several months because the city of Hayward stopped funding it. And the county Social Services Agency, the Human Outreach Agency’s largest funder, recently informed the latter that it will cut off its funding on Nov. 30. Human Outreach also receives funding from several federal agencies and private foundations, and that funding may also be in jeopardy.
While directors admit fault in the mismanagement of the shelter’s operations, they said they have remained in compliance with the agency’s debtors and have been taking steps to reconcile the situation.
Giovanatto said the IRS agreed to allow the shelter to pay off its debt in installments. The agency has been able to pare the debt, but never to pay off the entire amount.
The agency has tried to raise money and asked for donations to help pay down the rest of the debt, but to no avail. Every time Human Outreach has approached a bank or another source for help, Giovanatto said, it has been quickly rejected because the agency’s past shames its reputation like a Scarlet Letter.
Apparently, former director Chideya had a relapse with alcohol before he was released from his post and was placed in a rehabilitation program, according to directors. But no one knows exactly what happened to the money that wasn’t paid to the IRS.
“The problem is a nonprofit can’t raise money for profit, and nobody wants to donate to pay off the IRS,” Giovanatto said.
The directors’ frustration has been compounded, Giovanatto said, by both the city’s and county officials’ about-face.
Giovannato said the agency has had numerous discussions with Hayward’s Community and Economic Development Department, mainly through Community Development Specialist Anne Culver. But those discussions have been fruitless, he said, because of miscommunication and what he thinks have been deliberate attempts to overlook the agency’s efforts to comply with its funders.
Earlier this year, the city also offered to bail out the agency if it disbanded and allowed the city to find another organization to take over the shelter, Giovanatto said. But that proposal never materialized.
That is when the relationship between the agency and the city began to turn sour, Giovanatto said.
“If HOA has clearly demonstrated a commitment to avoid the mistakes of the prior executive director and provide support and governance throughout this long-term rebuilding phase … and the city never pulled funding when he was negligently incurring tax debt,” Giovanatto wrote in a letter to the city in May, “why is the city refusing to fund a critical social service to homeless men?”
Abel said she thinks Hayward city officials have been manipulating the agency for the past several years and making it jump through unnecessary hoops for its funding, despite numerous attempts to follow city procedure.
County officials got word of the agency’s relationship with the city of Hayward and since then have been giving the agency the silent treatment — a result, Abel said, of the city’s dealings with the agency.
“I thought we were supposed to be working together for the sake of the homeless,” Abel said. “But to hold money month after month, that has now affected our relationship with the county.”
City and county officials say they sympathize with the Human Outreach Agency’s struggle to shed a burden it did not necessarily create, but deny claims that they have left the agency out in the cold.
City officials maintain that they have tried to help the Human Outreach Agency with its problems but argue that the city was not responsible for fracturing the agency’s relationship with the county, as the agency claims.
“There have been numerous occasions over the years when the city has tried to work with HOA and assist them, up until very recently,” said David Korth, manager of Hayward’s Neighborhood and Economic Development Department, an arm of the city’s Community and Economic Development Department, which works with community-based organizations. “But it just got to the point where their troubles got bigger than we were able to assist them with. We’ve done everything possible to assist the agency.”
County spokeswoman Sylvia Soublet concurred, but said that the county also decided to cut off the agency’s funding because the county Social Services Agency wasn’t satisfied with the service being provided to clients.
“We certainly can understand their issues, and it is frustrating that they are being fined as a result of this,” Soublet said. “But the county is not in the business of bailing out community-based organizations.”
Soublet added that the county has already identified four other agencies in the county that could provide similar shelter services and fill the void left by the Human Outreach Agency.
Whatever happens to the Human Outreach Agency in the next few months, everyone involved agrees that the people who will lose the most are the homeless men who call the shelter home.
Wilton Acey Jr. first found refuge at the Human Outreach Agency in 1989 when he needed a place to help get him back on his feet. The agency has been doing the same thing for scores of other homeless men since it was founded nearly 30 years ago, he said.
Acey is now a staff member at the shelter, and the thought of its closing breaks his heart.
“It’s a shame that an entity can bring down all that HOA has done in the community,” he said. “I hope that this (situation) becomes a rally call because, until the end, we’re going to be here.”
Abel, too, is keeping her fingers crossed. But she knows all too well that the end of the road for the Human Outreach Agency may already be near. Several staff members, including Abel, have now foregone their own paychecks just to keep the agency afloat, and many are growing weary.
“I don’t understand how government can get away with this,” she said with tears in her eyes while talking about the agency’s difficulties. “This has gone on month after month, but it just seems like nobody cares…. And I don’t know what else we can do.”