The city of Lakewood says it has no plans to re-examine the finances of the Tillicum community center after learning Monday that Karen Priest, the center’s executive director, had been charged with crimes related to her personal finances.
The City Council voted last week not to give federal Community Development Block Grant money to the center for the first time in the organization’s 14 years of operations. Council members have expressed concerns about the center’s finances dating back three years, including inadequate financial management systems and improper reimbursement requests.
Then Monday, the city learned Priest had been charged in Pierce County Superior Court with first-degree theft, second-degree theft and two counts of false swearing related to her personal finances.
Lakewood City Manager John Caulfield said the city wasn’t aware Tacoma police were investigating Priest until a News Tribune reporter told him about the charges Monday.
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City officials said they have no reason to believe Priest’s personal situation and the nonprofit center’s finances are related.
“Unless we receive some information from a police department or something of that nature, we’ve gone through and done a very full accounting of (the community center’s) books,” said David Bugher, Lakewood’s assistant city manager and community development director. “As far as the city is concerned, we were made whole.”
Bugher has said the center, while not acting criminally, runs “tight to its margins.”
Priest and the center’s board of directors addressed the city’s concerns from 2010-11, but other issues remain.
The biggest is the revocation of the center’s nonprofit status by the IRS.
The IRS pulled the status in May 2012 after the center failed to file 990 tax forms for three consecutive years. Priest said she learned of the revocation for the first time May 5 when Lakewood Mayor Don Anderson announced it at a council meeting.
The center didn’t file 990 forms because it was told it didn’t need to after a change in the process, Priest said Monday. It is in the process of getting the status reinstated, she said.
Priest and board President Bill Hubbard also said they didn’t know the center was delinquent in its property taxes until The News Tribune told them at the end of April the center owed $37,578 after failing to apply for a nonprofit tax exemption from 2012 to 2014. The center needs its nonprofit status reinstated to receive the exemption and have the unpaid taxes forgiven.
Janet Harper, secretary of the community center board, said Monday afternoon that the board continues to stand by Priest, who left work early Monday.
“The board of directors is taking charge of everything in our control until we determine if Karen will be returning,” Harper said. “The staff that is there are capable of running the place on a daily basis.”
Harper, who worked in the banking industry for 35 years, said she regularly reviews the center’s books and believes they are secure.
The community center, at 14916 Washington Ave. SW, contains a food bank, meal site, clothing donation center, after-school programs, a branch of the Pierce County Library, community garden and a nutrition program for women and children.
Brynn Grimley: 253-597-8467 firstname.lastname@example.org