PORTLAND, Ore. (KOIN) — Portland City Council has approved Commissioner Jo Ann Hardesty’s proposal to have the Office of Community and Civic Life take over support duties for Southwest Portland neighborhood associations.

The move comes after Hardesty cut funding to Southwest Neighborhoods Inc. (SWNI), the coalition that had previously been in charge of supporting Southwest neighborhood associations, after an independent forensic audit found the group had mismanaged taxpayer funds over several years.

The ordinance will authorize the office of civic life to create two new coordinator positions. It also authorizes the city to offer a grant to a nonprofit organization that can provide liability insurance coverage and fiscal sponsorships to Southwest neighborhood associations, a duty SWNI previously also held.

Commissioner Mingus Mapps, a former employee of the civic life bureau, was the lone “no” vote among City Council. He said he did not want to vote in favor of the ordinance until an independent audit of the civic life bureau was completed.

While the audit of SWNI found financial mismanagement as well as a workplace culture of bullying, the bureau of civic life has also faced accusations of a retaliatory work culture, too.

Portland City Council candidate Mingus from his campaign website, May 13, 2020

Mapps pointed to a recent example of those accusations, reported by Oregon Public Broadcasting, in which the bureau is described as having problems such as harassment of employees from management being reported by many current and former staff.

Mapps said an audit of civic life, conducted by ASCETA, is expected to reach City Council’s desk in a matter of a few days. He proposed tabling the decision before Council until after the audit comes out.

“I am concerned about the results of the upcoming ASCETA audit of Civic Life that is due to come out within a week or so. Allegations of staff abuse make voting for an ordinance to authorize additional staffing logically and ethically challenging for me,” Mapps said in an emailed statement to KOIN 6 News.

“I also believe that the residents of Southwest Portland need to have a voice in how their neighborhood associations are served. I am happy that we are going to have a work session on the future of the coalition system and hope we can incorporate the voices of the neighborhoods into the decision-making process,” he said.

Hardesty, who was assigned by Mayor Ted Wheeler oversight of civic life in January, said she plans to hold a work session with the entire City Council looking at ways to address problems with the office of civic life, neighborhood associations and coalitions.

However Hardesty said it is important to continue the support services to Southwest Portland neighborhood associations in the interim.

“I am closing a loop on a community that has been left out there wondering: Does the city hear us? Are they actually going to make sure that we’re getting basic level of services?” Hardesty said during the City Council meeting Wednesday, before casting her vote in favor of the ordinance. “Once I made the decision to pull the grant from SWNI, I went directly to their board to let their board know the decision I made and the reasons why it was the appropriate decision to make,” she said.

Hardesty said she met with over 450 neighborhood association members over Zoom Tuesday evening to hear them out after funding from SWNI was pulled.

“I think we would do the Southwest community a disservice by continuing to pike this issue down the road. I have reviewed it, I have made what I think is a sound decision and I will respect my colleagues to decide to either vote for or against it. But I want to be clear, there can be no more delay,” she said.

The votes were cast and all but Mapps voted in favor of the ordinance, though many of the commissioners commended the cordial and professional tone of the session — from both Hardesty and Mapps — despite disagreements.

A 2016 audit of the civic life office — then called the Office of Neighborhood Involvement — was also critical of the bureau for lack of accountability for how community engagement funds were spent. The audit found a lack of oversight by the then-Office of Neighborhood Involvement over district coalition grants.

Since then, Civic Life Director Suk Rhee said the bureau has implemented additional oversight measures, such as requiring annual work plans, updating contracts and conducting more rigorous reviews of budgets and invoices submitted.

“It was this improved oversight that led us to ask additional questions about the SWNI budget and practices directly impacting financial decisions, and led us to recommend conducting an independent forensic audit to Council,” Rhee said in a written statement.

Portland Commissioner Jo Ann Hardesty speaks to protestors during a candlelight vigil to support Portlanders’ rights to free speech and assembly at the Multnomah County Justice Center on July 17, 2020 in Portland, Oregon. (Photo by Mason Trinca/Getty Images)

Shannon Hiller-Webb, president of the Burlingame Neighborhood Association in Southwest, told KOIN 6 News she believes it was the right decision to pass the ordinance. A SWNI Board representative herself, Hiller-Webb was one of the people within the coalition to raise concerns with the city about the group’s mismanagement.

“Obviously, as a president of a neighborhood association, I am thankful that we have a continuation of services provided by City Council today. We’ve had an absence of that,” Hiller-Webb said. “But I think in truth, we’ve had an absence of that at SWNI, as a representative for our neighborhood association, for a long time.”

HIller-Webb went on to describe a first-hand account of managerial dysfunction that she had experienced and had been trying to alarm city leaders about for about two years. Such alleged behaviors included neighborhood associations not receiving the financial support they should from SWNI as well as alleged retaliatory behavior — everything from physical threats to threats of lawsuits — from SWNI leaders for people on the SWNNI board who expressed dissenting opinions on certain issues.

Hiller-Webb said she isn’t alone in her criticisms of SWNI either, she said dozens of others also supported the ordinance passed Wednesday, but chose to submit their comments via written testimony during a public hearing for the proposal last week.

Hiller-Webb is also one of two plaintiffs in a current lawsuit against SWNI over public records she requested last year.

The fate of Southwest Neighborhoods Inc.’s funding was previously thrown into question last summer when leaders of the group wouldn’t turn over boxes of financial documents that some members of the group believed could reveal financial mismanagement, according to the Associated Press.

Funding for the group was then withheld, following an unanimous City Council vote in July 2020, until the documents were handed over and an outside audit was conducted.

The audit was critical of SWNI and found it to be a poor steward of taxpayer money. The audit, performed by independent third party auditor Marsh Minick P.C., found financial mismanagement, including conflicts of interest and misrepresentation. The audit found that, on average, roughly 7% of the $3.17 million in taxpayer funds the coalition has received since 2010 have been mismanaged or misspent. Hardesty made the decision on Feb. 24 to not renew the city’s contract with the group.

The audit also found SWNI made misrepresentations about their Paycheck Protection Program loan, that community members noted a pattern of potential financial misconduct and lack of transparency and that a former staff member was convicted of embezzling at least $130,000 in 2011.

Civic Life Director Suk Rhee said she recognizes the importance the city employees and community partners have when it comes to fiduciary responsibility to stewarding taxpayer dollars.

Shannon HIller-Webb, President of the Burlingame Neighborhood Association in Southwest Portland. Wednesday March 10, 2021 (KOIN).

“The passing of today’s ordinance was a testament to the important role community leaders brought to our attention 18 months ago. Because they brought this to our attention, we worked judiciously to ensure due process. This meant working collaboratively with the commissioner-in-charge and other bureaus to ensure a fair, independent and transparent process was taken to ensure fiscal responsibility and accountability,” Rhee said in a written statement to KOIN 6 News.

“While the outcome of the audit results are unfortunate, what is important to highlight is that due process was provided. The results show that Civic Life, both commissioner offices (Eudaly and Hardesty) and multiple bureaus collectively took the necessary [steps] to uphold our role as fiduciary stewards for the community, neighborhood associations, and the coalition offices. Moving forward, Civic Life will begin implementing even more best practices to ensure that district coalition offices and grant recipients are successful.”

SWNI will be the third independently operated district coalition organization of seven to end its relationship with the City due to complications at the community level, officials said.

SWNI leaders and their supporters were critical of the ordinance to have the city take over support duties of Southwest neighborhoods as well as the city grant being cut to their group, which represented more than 85% of their funding.

SWNI President Leslie Hammond said she thinks the audit findings are flawed and that the group should’ve been able to publicly give their side of the story before the decision to cut the funds were made.

“You need to give SWNI a right to publicly explain its financial records and to debunk the 2020 forensic audit, which was biased, flawed, and not based, in large cases, on facts,” Hammond said at a City Council meeting last week.

The Office of Community and Civic Life announced Wednesday that they would begin a 100-day plan to provide a smooth transition for Southwest neighborhood associations, including connecting with Southwest neighborhoods, establishing an insurance coverage provider, hiring two full-time coordinator positions and conducting a needs assessment and updating contact information.

Next week, civic life will host two open house events to provide community members to meet the bureau’s staff, hear more about the transition and ask questions.

The open houses will be conducted virtually on Wednesday, March 17 from noon to 1 p.m. and then from 6 p.m. to 7 p.m. the same day.

Interested parties are directed to this Zoom link. You can also call toll free at 888 475 4499. The open house’s meeting ID is 956 7529 2861.