A local non-profit created to provide social services continues to receive city contracts despite a 2009 city review that calls the group unfit for funding and former board member testimony that paints the agency as politically motivated. The group, which received over $500,000 in city and property tax funding in 2011, is largely directed by operatives of 47th Ward Democratic Committeeman Eugene Schulter and recently hired a politically-connected staffer with alleged connections to organized crime.
In 2009, during a Department of Community Development delegate agency application evaluation procedure, the committee charged with assessing the Ravenswood Community Council (RCC) unanimously voted to discontinue city funding to the organization. The committee concluded that RCC used the majority of city contract funding for administrative expenses, did not provide sufficient evidence demonstrating the need for the proposed programs in the Ravenswood area, and provided services determined to be redundant to both other local chambers of commerce and even the community council’s own Special Service Area #31 contract.
|Ravenswood Council: $500k for Little WorkFrm. Ald. Schulter’s Response|
“Schulter was involved, because he didn’t want an independent community organization,” Benjamin said. “It was a way to have a community group that wasn’t independent. And he could stuff it with his people…It was a main reason they were getting [funding], I believe…My impression was that a lot of that was because we were able to get them politically.”
“We really lost our community constituency,” she continued. “The folks on the board were all Schulter people.”The RCC is a north side nonprofit founded in 1957, according to its website, “to fight problems of crime and blight.” It serves an area from Addison Street to Bryn Mawr Avenue and from Clark Street to the Chicago River, comprising the Lincoln Square, North Center and Ravenswood neighborhoods.”
Former 47th Ward Ald. Eugene Schulter did not return phone calls for comment by publication.
Since Benjamin left the board, little has changed in RCC’s makeup.Four of the seven Schulter-tied board members there during her stay are still in place, the organization’s executive director remains the same and board president Tom O’Donnell, now entering his tenth year in the position, was endorsed last winter by Schulter during a losing bid to succeed him as the ward’s alderman.
O’Donnell, board 1st Vice President Helm and the organization executive director, Chris Shickles, all denied any knowledge of the disparaging 2009 evaluation, although each independently admitted that RCC went through difficult financial straits around 2007, they blamed organizational problems on a past bad executive director who had mishandled finances.
“This community council has taken a lot of hard work,” Helm said, “because it was basically in ruins back by around 2007. The former director ran it into the ground, and we had to actually pick it up from its bootstraps and do fundraising and hold the line on spending. We’ve actually made it into what it is today, and it is a viable group now.”Susan Massel, spokesperson for the Chicago Department of Housing and Economic Development, the office which initiated the 2009 review, said that it is “not completely unusual” for funding to continue to a delegate agency after a negative assessment, and that the city might attempt to work with the organization rather than simply sever ties. All conclusions from department evaluations of delegate agencies act as recommendations to the Chicago City Council, which makes the final decision on funding.
Massell also refused to answer questions about how the city attempts to control delegate agency contract performance measurements or administrative costs, saying she would only speak “holistically” on the subject of RCC, delegate agency contracts and the 2009 evaluation.
Since the review occurred in 2009, the committee analyzed contract fulfillment for 2008 and before. However, Ravenswood Community Council’s 2009 and 2010 monthly invoices and reports for city delegate contracts, obtained by Center Square Journal through a Freedom of Information Act (FOIA) request, reveal that many of the traits which the city disapproved of in the unfavorable assessments have continued since then.
In the 2009 evaluation, the Ravenswood Community Council received the lowest possible “less qualified” mark in the assessment of whether there was an “absence of other organizations providing similar services within the outlined retail district, service area, or citywide services.”
This rating was given, in part, because the evaluation committee deemed that at that time the community council was replicating many of the services provided by the nearby Ravenswood Chamber of Commerce.
Since then, the Ravenswood Chamber of Commerce has closed and the community council has assumed some of its business-geared contracts, including a Supportive Services for Commercial Area Development contract which seeks to improve the local retail business environment. Hence, its services have become somewhat less redundant.
However, the 2009 review also listed the Northcenter, Lincoln Bend and Lincoln Square chambers of commerce as local organizations to which the community council provided repetitive services.
Additionally, the evaluation found that the community council’s “summary of staff job responsibilities” were in large part a duplication of the services required in executing the organization’s Special Service Area #31 contract.Again, Ravenswood Community Council’s 2009 and 2010 monthly invoices and reports showed that this has not changed.
In the 2010 Local Industrial Retention Initiative (LIRI) constituent relationship log, one of the main progress reports for a contract aimed at bringing small businesses to the Ravenswood industrial corridor, 50 of the 65 contact summaries listed services which could be seen as redundant to Special Service Area #31 responsibilities, including façade improvement, glass etching removal, business advertising and sidewalk repairs.
The monthly reports also reveal that the community council has recorded a single act of assistance as work for multiple contracts.
In an October 2010 LIRI monthly report, the community council wrote that it had it had spoken with Paul Link of LaSalle Street Development Company, Inc. about “site clean-up/parking issues during winter months” and then “assisted in executing snowplowing contract with local vendor”. Earlier that same year, the organization also reported a discussion over “site clean-up/parking issues during winter months” with Paul Link as its sole January and February constituent contact toward executing its CSS contract.
The work may also have fallen under the community council’s responsibilities as part of administering its Special Service Area #31 contract, as snow removal duties fall under both public way maintenance and parking accessibility.
High Administrative Costs
High administrative costs persisted in both the community council’s 2009 and 2010 Small Accessible Repairs for Seniors (SARFS) contracts–aimed to help neighborhood senior citizens remain living independently through limited home improvements–where more than half of city funding went toward administration instead of construction costs.
And while it is not uncommon to spend nearly half of SARFS funding on administrative costs–several other city delegate agencies were found to set aside a similar portion for the administration of other SARFS contracts during the same time period–other organizations have executed the contract with more efficiency.
In 2011, the Voice of the People in Uptown, Inc. received a SARFS contract for $57,000 for work on 20 homes, 36.5 percent of which was budgeted for administrative costs. The agency also provided an “other share” portion–supplemental funding provided by the contract administrator–of $38,805 total, $13,100 of which has been budgeted to go toward paying for construction services or buying project materials.
Conversely, when the Ravenswood Community Council executed the 2009 SARFS exact same amount of money and work, 50.4 percent was budgeted for administrative costs, and of the $20,500 “other share”, only $2,500 was budgeted to go toward construction costs.
Additionally, through two separate FOIA requests for 2009 SARFS monthly invoices, Center Square Journal found documentation for work on only 13 homes, though payment details on the City of Chicago website revealed that over $16,000 in spending was unaccounted for in those statements. However, in the agency’s 2010 SARFS monthly invoices, all of the contract spending is accounted for, but documentation was found detailing work on only 18 homes.What’s more, according to RCC Executive Director Chris Shickles, it seems that the amount of work necessary to administer the SARFS contract was minimal.
Shickles told Center Square Journal that to administer the contract he would contact the nearby Chicago Department of Aging senior space, the Levy Regional Center, ask them to gather 200 or so senior citizens for a meeting, give an hour-long presentation, contact names off a signup sheet, check to ensure that the seniors met program requirements, pass the work off to a local contractor whom the community council hired for all SARFS contracts and then reimburse the contractor when the city made payment. In 2009, for that work, Shickles requested $18,400 toward his salary, $2,308 toward his fringe benefits and $8,000 toward office expenses.
Ravenswood Community Council received a new SARFS contract in 2011, this time for $62,000 with 48 percent budgeted toward administration.Nancy Benjamin, a former Ravenswood Community Council board member, said it was common for RCC to spend the majority of their funding on administrative costs while doing minimal work.
“I believe they spent everything on administration,” Benjamin said. “I’m not sure what else they do. They run an SSA [Special Service Area #31] but I’m not sure they do much more than call a contractor to power wash a sidewalk.”
Vague Contract Measurements
The city can’t manage what it can’t measure.Outside of the community council’s SARFS contract, where progress can be assessed by the number of homes the agency has retrofitted or repaired, most of the group’s other contracts lack clear measurement standards, often making it difficult to determine the quality and amount of the work the organization has done.
For instance, an April 17 report for RCC’s 2009 Technical Assistance to Business Groups contract, a program designed to “improve the Ravenswood retail business environment”, measured the success of a small business development and training session by the “[number] of jobs impacted.” Assistance with “parking issues” is listed as impacting four jobs, help with “signage issues” as impacting two jobs and “site selection” as impacting 64 jobs.
A workshop report from the same document measured a March 26 Small Business Improvement Fund workshop sponsored by the Ravenswood Community Council with 52 attendees as having 20 “projected number of jobs created/retained” due to the event.
“For a lot of these issues,” Shickles said, “we’re assuming you’re assisting almost all [of the employees] unless it’s assistance to a specific department…You take a company and ask how many people work there.”
Shickles said something like a new parking lot or a new website would affect all employees.
The community council’s LIRI contract reports are even harder to judge, as almost all reports are simply spreadsheet entries reporting conversations and meetings with no other proof offered.
Additionally, though some LIRI report entries describe RCC helping local businesses with the permit process for signage or trying to gain information about the availability of broadband internet access in the area, many of the constituent logs’ 65 entries describe simpler tasks, such as introducing the community council to local business, adding businesses to the community council’s database and attempting to convince local businesses to join the agency’s Business League, a proposition that would cost the business $150.
Shickles said that it was important to get businesses to join RCC’s Business League because the agency was picking up Ravenswood Chamber of Commerce business-oriented contracts, but still had fewer business members than a typical chamber of commerce.
But Schickels also said that part of the blame for poor reporting fell on the City of Chicago, as it approved program measurement criteria.“That’s a city issue,” Shickles said. “I know in the past year or two the city has tightened up their reporting methods. It increases administrative costs because I’m doing more reporting… I feel like we’ve done well as far as reporting and showing the city we’re doing a good job and that we’re remaining relevant in the area.”
He said that if increased reporting were required, administrative costs might increase due to the extra time that would be needed to fill out additional paperwork.The city currently audits delegate agencies’ financial records but has little or no systems in place to assess the quantity or quality of work executed toward contract fulfillment.
Reliant on City Funding
A nonprofit heavily reliant on city funding brings almost no other money into the neighborhood other than that which the city is willing to provide and would be unable to support itself otherwise.
When judging the Ravenswood Community Council’s past fiscal performance, the 2009 evaluation committee wrote that the organization had a “heavy reliance on city funding” and the agency continues to rely almost solely on city dollars.
According to the organization’s 2009 tax returns, the most recent year for which the community council’s tax records were publicly available, the council brought in $123,706 from “program service revenue including government fees and contracts” but only $8,566 from “contributions, gifts, grants and similar amounts received”.
In comparison, the nearby Northcenter Chamber of Commerce lists $45,143 in “contributions and grants” and $47,406 “program service revenue” on its 2009 return.Shickles said that the group currently plans one or two fundraisers a year that bring in $5,000 to $10,000 each. If so, there is no financial evidence of such fundraisers in recent years.
On the other hand, in 2011, the community council will receive over $178,000 in city delegate agency funding and an additional $368,000 toward administering the Special Service Area #31 contract.“
That’s our life source,” Helm said, “dealing with the City of Chicago on different contracts.”RCC also receives minimal funding from membership fees. In 2009, the agency claimed only $875 in “membership dues and assessments”, though according to a membership list submitted October 1, 2009 to the Department of Housing and Economic Development tallied 144 members. At the current membership dues, RCC should have brought in at least $2,880 from membership dues that year. This leaves the unanswered question of what happened to those dues, or if the membership list is actually real.
Former executive board members Nancy Benjamin and Martha Cameron both accused the Ravenswood Community Council of being a politically-motivated organization with ties to former 47th Ward Alderman and current 47th Ward Democratic Committeeman Eugene Schulter.“
It used to be full of business people,” said Cameron, who quit in 2006 after serving three years. “It slowly turned over into a political organization… It was Tom O’Donnell, Bill Helm and [recently resigned Treasurer] Tom Fencl. The three of them were like drinking buddies. They’d always arrive and leave together. ”
Current board members with political ties to Schulter include O’Donnell, the former president of the 47th Ward Democratic Party, Helm, the current president of the 47th Ward Democratic Party and Marty Casey, who was 47th Ward Streets and Sanitation Superintendent under Schulter. Casey is now the 43rd Ward Superintendent.
The organization currently employs politically connected individuals, as well.
Sheila Pacione, current commercial support services program manager at RCC, was a former staffer in Schulter’s ward office.
Daniel E. Stefanski, the current program manager for the community council’s LIRI contract, was a childhood friend of convicted former Illinois Gov. Rod Blagojevich.
Stefanski also has a checkered past. In 2006, he was fired from a top position in the Illinois Department of Transportation when it was discovered that he had been arrested for drunk driving.
In addition, a 2005 Chicago Sun-Times article reported that informants told Teamster Union anti-corruption investigators that Stefanski once worked as a bookie, had ties to reputed organized crime figures and maintained close ties to a controversial political fundraising group called the Coalition for Better Government. In the same article, Stefanski denied these accusations.
Cameron said that she never quite knew the motivation behind the board’s political nature, but called the organization “possibly crooked” and implied that she suspected the organization’s money might have been going someplace other than where it should have gone.
“We had one board meeting where a bunch of business people quit,” Cameron said. “One of them turned to me and said you realize a board member will have some culpability if there’s an investigation of this.”
Regardless of what is really happening, neither one places the blame on current executive director Chris Shickles.“He’s a competent guy,” Benjamin said. “The problem is RCC hasn’t done anything for so long, there’s no incentive to do anything. And there’s no constituency.”
Cameron likened Shickles to a figurehead.“I didn’t think that he was any kind of savvy operator,” Cameron said. “He was just a guy to put out an email newsletter.”
It will not be known whether the Ravenswood Community Council will continue to receive funding as a city delegate agency in 2012 until the Chicago City Council passes an official FY2012 budget, scheduled to be voted on during the November 16 session.
O’Donnell, Helm and Shickles all insist that RCC has turned a corner from a few years back.“This was a situation that was very bleak until people stepped up and took on a lot of responsibility,” Helm said.O’Donnell said that his number one goal was helping the neighborhood.
“I think we serve the community well,” O’Donnell said. “I think we’ve done a lot of good over the years. I wouldn’t be involved if we didn’t. I’m committed to the community and I’m committed to this organization, so that’s why I’m there.”
And Shickles said that he is excited to see the organization bringing in new employees, seeking out more contracts and attracting new business members.
Current 47th Ward Ald. Ameya Pawar refused to comment for this article.
Mike Fourcher contributed to this report. This article was edited for typos and grammatical errors on November 12, 2011.