NORWALK, Conn. – The possibility of about $1.2 million in funding through the state of Connecticut is being cited by Norwalk Economic Opportunity Now (NEON) leaders as part of the path out of insolvency.
NEON Board Chairman Mike Berkoff and transitional NEON leader the Rev. Tommie Jackson answered questions Wednesday night about how the agency, described as being about $4.2 million in debt, would move forward. The Q&A session came after a frustrated Berkoff was forced to abort the planned Board of Directors meeting because of the lack of a quorum.
“We were ready to have a board meeting to inform everybody all the work we’ve been doing over the last 60 days with lawyers, with Hartford, different entities, of whether we’re going to do a Chapter 7, Chapter 11 reorganization, and you don’t have people,” said Berkoff, who waited 25 minutes before opening the meeting just to close it.
Five board members attended: Berkoff, Jack O’Dea, Nick Tarzia, Cynthia Bowser and Dale Ferguson. Another board member came along about 20 minutes after Berkoff gave up.
Asked if the lack of attendance meant a lack of interest in saving the struggling agency, Jackson said, “I prefer to think it’s because of the impending storm.”
NEON’s last board meeting was eight weeks ago. The organization’s bylaws call for five board meetings a year, spaced out no more than 10 weeks apart, Berkoff said. The executive committee will decide within the next couple of days whether to go into emergency status, which will allow NEON to conduct business without meeting those requirements, he said.
NEON has lost its Head Start program, Department of Corrections contract and other programs. The organization has dwindled from 227 employees to 62 employees over the course of a year, most notably after paychecks bounced in November. NEON board members said in December that they were considering bankruptcy, as “Nobody is going to fund back debt,” according to Berkoff, and NEON is about $4.2 million in the hole.
It’s been quiet since then.
“You have several things that could happen,” Jackson said Wednesday. “The board of directors could ask the state to voluntarily decertify NEON, which I don’t think is the right thing to do. The state could involuntarily decertify NEON as a CAP (Community Action Program) agency, which I don’t think is the right thing to do. I think the right thing to do is to engage the state and others who are concerned about people who need to be served to talk about how to go forward from here and get done what needs to be done. Whether that’s having an umbrella entity, another CAP entity come in and work with NEON in this troubled and crisis time, which is what the state Department of Social Services calls an agency in crisis, to work and resolve those concerns. I don’t know the answer to the question, but I do know that the answer to the question is not to get rid of the community action here. I know that’s not the thing to do.”
Jackson produced paperwork to show that NEON’s deficit has been reduced significantly since he was appointed to take over the agency from Chiquita Stephenson in the wake of about $200,000 in bounced employee paychecks. The agency’s deficit was $972,961.27 at the end of October and $201,092.39 at the end of January, according to the paperwork, attached below.
That deficit is separate from the $4.2 million in “back debt,” he said.
The employees are one pay period behind, he said. “When I came in they were three pay periods behind,” he said.
Berkoff said he has spent many hours meeting with officials to see what might happen to NEON.
“We have the ability now to get a program where they’re willing to give NEON $1.2 million to rebuild the organization,” he said.
As for the $4.2 million in back debt, “the representatives and poltical guys who are helping us believe they can remove” $1.2 million, he said. That would leave about $3 million in debt, which he described as lawyers fees and money owed to vendors.
“Of that $3 million, there’s two ways we can take the organization,” he said. “If you go Chapter 7, that means full liquidation. That’s it, it’s shut down. It goes away.”
But, “We’re working on Chapter 11, which means reorganization or a ‘cram down.’ So if there’s $3 million worth of debt, what we’re looking to do is see if we can buy it down for $600,000, which means 20 cents on the dollar. If we’re able to work that through the organization is rebuilt, the licenses are intact, everything is there,” he said.
This is spite of allegations from some board members that local organizations and elected officials have been interfering with and sabotaging NEON.
An incendiary Jan. 22 email to Gov. Dannel Malloy from a group of board membes requested a full investigation into Norwalk Housing Authority, Norwalk Community College, the Stepping Stones Museum for Children, state Rep. Bruce Morris, state Sen. Bob Duff, U.S. Rep Jim Himes and former Mayor Richard Moccia, as well as the Administration for Children and Familes (ACF) because it pulled the Head Start program away from NEON. It also asked Malloy to clear Stephenson.
Bowser’s name was one of five board members listed as signing the letter.
“I didn’t know the contents of the letter,” she said Wednesday. “I have no anger with the governor. The main concern is that the services are made available to the people of lower Fairfield County and that there is a community action agency in place to serve Stamford, which is my home base, as well as Norwalk. But I think that when you don’t have all the information there is confusion.”
Jackson used two adjectives to describe the state of the board: “fractious” and “splintered.”
“If it’s splintered, and I don’t think it’s splintered to the extent that it cannot function, I think that some people are louder than other people,” he said. “I think that everybody wants to do the right thing. It’s just how do you go about doing the right thing. I don’t have a issue with an individual. My issue is the institution. How do we salvage this institution called NEON, or CTE? I don’t care about individuals.”