The Tillicum community center kept its doors open last year despite events that left it without an executive director or steady funding.
“We have had a huge endeavor. We had to take care of restoring everything,” said Debbie Padden, president of the Tillicum American Lake Gardens Community Service Center board that runs the facility.
That includes working with the Internal Revenue Service to reinstate the center as a charitable nonprofit and discussing how to repay more than $60,000 in missed payroll taxes.
The center’s nonprofit status was restored at the end of 2014, an essential step to receive funding. In the past year, the center board also has “reconstructed” its financial records.
Still, Padden said, “there is no money that we could pay anything that is delinquent or otherwise.”
“We’re keeping the lights on and there’s toilet paper in the bathrooms,” she said. “It’s difficult to have a big projection at this point without any immediate and hard funding coming in.”
Nevertheless, board members are determined that the facility remain open to serve one of Lakewood’s poorest neighborhoods, and are working to make that happen.
The center at 14916 Washington Ave. SW houses a food bank, meal site, clothing donation center, after-school programs, a branch of the county library, a community health clinic and a nutrition program for women and children.
Now Pierce County, which owns the building, is getting involved.
In a March 4 letter to the board, Helen Howell, director of the county’s Department of Community Connections, alerted the board that the county will be doing its second audit in six months of the center.
She also asked for the center’s operating budget for 2015 and proposed budget for 2016.
It’s unusual for the county to do this, but recent events prompted the request, said Tess Colby, the county’s manager of housing, homelessness and community development programs.
Pierce County first audited the center in September 2014 after The News Tribune published an article about problems facing the facility and its former executive director.
The Department of Aging and Disability Resources reviewed a small contract it had with the board to run senior programs from the facility three days a week.
The audit showed a board that trusted its executive director to manage daily operations and center finances with little oversight.
Violations identified in the audit included the missed payroll taxes and a lack of background checks on volunteers and staff members. It also noted a lapse in multiple insurance policies, including for a center-owned vehicle sometimes used to take senior citizens to and from the center.
The report also cited more than $40,000 owed in delinquent property taxes. Those have since been waived because the center’s tax-exempt status was restored.
The center still owes $1,250 for surface storm water fees and penalties, according to the office of County Assessor-Treasurer Mike Lonergan.
These violations and others resulted in the termination of the contract.
The contract was only $9,000, but it signified yet another loss of outside funding to the center.
For 14 years, it relied on federal grant money from the city of Lakewood to pay its bills. It applied for money in 2014 and 2015, but the city denied the request last spring because of the center’s financial trouble and the loss of its nonprofit status.
In May 2014, United Way of Pierce County terminated a contract that would have allocated $24,300 over three years to the center. The center had received funding from the agency since 2000.
The loss of the major funding sources and the severity of noncompliance from the initial audit prompted Howell to request the second visit.
This time the county will review its long-term real estate contract with the board. The agreement stipulates how the center should be used and grants ownership of the building to the board in 2024.
The board didn’t learn the extent of mismanagement until it took over operations last spring after firing executive director Karen Priest.
Priest was fired in May because of personal theft charges filed against her in Superior Court after a Tacoma police investigation. The center’s finances came under scrutiny about the same time.
The personal theft charges against Priest were dismissed in August after she agreed to participate in a pretrial diversion program. If she follows its requirements, Priest will avoid conviction.
By summer, community center board members believed Priest’s financial troubles extended to her management of the center.
In June 2014, the board asked Lakewood police to investigate Priest, this time for allegations of theft and embezzlement during her eight years as executive director.
The board found $14,000 in reimbursements made to Priest without supporting receipts and discovered $6,000 in unpaid bills, according to police reports.
Police investigated whether Priest used the center’s credit cards for personal purchases and whether she overpaid her salary.
Payroll receipts show that one year Priest paid herself $83,000, despite the board approving her salary at $37,000. In some cases Priest forged board member signatures on checks, a practice some board members were aware of at the time, according to the investigation.
Poor record keeping, including missing credit card statements and a lack of receipts and reimbursement requests, made it hard for investigators to determine criminal activity.
County prosecutors declined to file charges against Priest in February.
“It was unclear what purchases were legitimate and what purchases weren’t legitimate,” deputy prosecutor Scott Peters said last week.
Priest’s employment contract authorized her to give herself a raise, making it hard to prove she illegally overpaid herself, Peters said.
Charges could still be filed if the board completes a professional forensic audit and it shows misappropriations, he said.
Board members know restoring the center will take more than fixing messy bookkeeping.
“This is not redoing things, it is actually doing things that were never done,” said Janet Harper, board secretary and treasurer.
Harper has given tens of thousands of dollars from her personal finances to keep the center open in recent years. It was her review of center finances that identified the potential mismanagement of funds.
“We know that there was a significant amount of money mishandled or taken,” said Padden, who declined to speculate how much money was missing or how it might have been misappropriated.
The center board has worked with community partners such as the Emergency Food Network in the last year to maintain services for the people who need them most.
EFN couldn’t supply goods to the food bank at the center when it wasn’t a registered nonprofit, so it deployed the food truck in the interim.
“We are still providing food for those less fortunate,” Padden said. “We’re providing clothing, we’re providing meals. We’re still doing it with no funding. A lot of that is because people are just rolling up their sleeves and joining in.”
The board is now focused on applying for outside funding to cover daily operations. Once it has steady funding, it will hire an executive director and try to expand its offerings.
In the meantime, Padden, Harper and other board members will work with the center’s three employees to run the facility.
“The drama of the past couple years is in the past,” Padden said. “We want people to know we haven’t gone away. We’re going to make it through this.”