The Stevens Square Community Organization (SSCO) hit a budget crisis in May, when -- already struggling with looming money shortfalls and staff cuts -- it was reminded of a $30,000 debt it forgot it had, leaders said.
With only $28,000 in the bank, SSCO faced a serious cash crunch -- only to be bailed out temporarily by the developer it owes money to, among others.
"Something needs to change in the accounting system," SSCO's new director, Julie Filapek, told the board at its May 8 meeting.
SSCO is the official neighborhood group for the Stevens Square, Loring Heights neighborhood, bounded by Hennepin Avenue and I-35W and by I-94 and Franklin Avenue. Filapek said the organization received a $30,000 grant from the Minneapolis Foundation in 1999 to support a lofts housing project on the 1800 block of 3rd Avenue, cosponsored by Brighton Development and the Plymouth Church Neighborhood Foundation.
SSCO put the grant into its general fund. The project hit delays, the $30,000 sat in the bank, and SSCO did not track the ongoing obligation.
The reminder came when the project's other backers called SSCO to say they were closing on the project May 13 and they needed the money. SSCO did not have enough money in the bank to cover it.
SSCO Chair Gene Blackledge said when he learned of the $30,000 obligation, "it became apparent we have been in denial about our financial situation."
"This fell through the cracks," he said. "It should have been set aside and not touched. We failed to realize we had this obligation out there. This is a serious thing. This should not have happened."
The organization is on financial hard times. It was one of the first neighborhoods to receive Neighborhood Revitalization Program (NRP) money, and with NRP's future uncertain, its money is running out.
Giving the $28,000 SSCO has in the bank to the housing project would have meant shutting the office doors and dismissing staff. Brighton and Plymouth Church Neighborhood Foundation covered the $30,000, with a promise from SSCO to repay it in August, Filapek said.
SSCO has called for a neighborhood vote June 19 to shift $301,000 remaining in various NRP programs to pay for staff and operating expenses for the next two years.
SSCO has also cut one three-quarters-time arts and greening staff position. It has a full-time executive director and safety coordinator and a part-time outreach staff.
"Those of us who have been around for a while need to take responsibility for this," Blackledge said. "Had this [$30,000] been factored in, we would have done something sooner."