CLEVELAND, Ohio – Cleveland City Council could pass bill Monday to allocate $ 2 million from the city’s pandemic funds to a nonprofit agency that is providing its CEO with more than $ 500,000 despite pre-pandemic financial difficulties pays.
Northeast Ohio Neighborhood Health Services (NEON) are seeking funding from the American Rescue Plan to strengthen their health services in some of Cleveland’s poorest minority neighborhoods.
Proponents argue that the money could go far in supporting major health programs. but Tax returns from NEON reveal a precarious financial situation – and a CEO who received a $ 100,000 raise in a year the agency was caring for fewer patients and was in the red.
NEON’s plan to spend the $ 2 million American Rescue Plan Act will use the lion’s share – $ 1.4 million – on several new and existing programs, including mental health services, lead prevention and intervention, food distribution, Education about healthy eating, chronic disease control and health literacy. However, this funding pool also includes items such as “NEON Administration” and “NEON Direct Costs – Transportation”, with no US dollar amounts specified for any program.
Another $ 360,000 would work with LegalWorks, Inc. to fund a detox clinic, and $ 200,000 would be used to repair damage to the NEON Hough Health Center, which caught fire in May.
The Hough Center is temporarily closed, and NEON’s other centers are bringing health services to other areas where Clevelander suffer disproportionately from negative health outcomes, including Miles-Broadway, Norwood, St. Clair-Superior, and the Southeast Side.
NEON is a state-qualified health center and, according to IRS filings, brings in primarily cash from contributions – about $ 13 million in 2019 – and program services like Medicaid reimbursements totaling about $ 11 million in 2019. Funding is received through the administration for health resources and services. This agency said cleveland.com that NEON receives funding until the end of the year and has been approved for a 3-year funding from 01/01/2022 to 12/31/2024. The agency spokesman was not yet able to announce the total amount of the funding at the time of going to press.
According to the Health Resources and Services Administration, NEON Caring for fewer patients each year, down about a third over the past five years – from 31,804 in 2016 to 21,605 in 2020. From 2017 to 2018 – the year that board member granted CEO Willie Austin a $ 100,000 raise – NEON served 2,740 fewer employees.
Although NEON serves fewer Clevelanders, NEON’s tax returns are in deficit in 2014, 2016, 2017, 2018 and 2019 – the last available year when net income was nearly $ 1 million in the red.
In 2020, NEON received more than $ 5 million in pandemic-related funding – a $ 3.6 million forgivable loan from the CARES Paycheck Protection Program and $ 1.6 million in additional Health Center Grants and $ 216,000 in Relief Funds.
Cleveland.com contacted NEON and Austin for this story.
Some of NEON’s financial difficulties are related to a payout of more than $ 1.3 million due to a Unlawful termination lawsuit. In this case, employee James O’Donnell was fired after raising concerns about a financial audit involving the questionable activities of Arthur Fayne, a NEON board member and head of the consulting firm hired to lead the New Eastside Market project, showed that the developer was responsible for the NEON.
In December 2020, Fayne has been charged with embezzling $ 855,000 from the Eastside Market project. The case is pending.
NEON was selected to develop the New Eastside Market in 2015 and rented the property on St. Clair Avenue from the city for $ 1 a year. The city has also deposited over $ 350,000 as well a 75 percent tax reduction for 15 years on improvements to the property, including new plumbing, electrical and roofing. When the project went over budget in 2018, the city approved an additional $ 500,000 grant. Cuyahoga County and the State of Ohio also awarded grants of $ 750,000 each.
New Eastside Market opened in 2019 with a vision to operate a full-service grocery store in what is otherwise considered a “food wasteland,” as well as providing health and wellness services. But NEON has yet to deliver on some of his promises for the location, like opening a health clinic or a demonstration kitchen for nutritious cooking classes.
Alderman Basheer Jones, whose ward includes NEON’s Hough Clinic, was the council’s strongest supporter of raising $ 2 million in stimulus funds to NEON. Jones, who has given up his council seat because of an unsuccessful mayoral candidacy, has made the NEON proposal his final legislative proposal.
Speaking at a committee meeting on November 16, Jones said he saw NEON’s latest funding proposal as a step toward holistic health. Jones said when NEON was founded in 1967 it was one of the few health care providers that the city’s black community felt welcome.
“Well, I’m sure there have been a lot of mistakes along the way,” Jones continued. “Unfortunately we live in a country where some make mistakes and others can’t make mistakes… Why can some organizations as a city make mistakes and then get the resources and still be able to make mistakes? Do business and there are some who are excluded? “
The city council is expected to deliberate on the law at its final session of the year on Monday before a new council and mayor take office in January.
Stimulus Watch is a public service journalism project run by cleveland.com and The Plain Dealer to track federal funding reaching Northeast Ohio through the US rescue plan. Read more undercleveland.com/stimulus-watch.