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Senior center headed for 'fiscal crisis'

Audit says the Costa Mesa facility will have depleted its general fund by June.

January 07, 2014|By Bradley Zint

It was a lavish evening at the posh Center Club, a Gatsby-themed affair 10 months in the making.

The private, South Coast Metro venue was replete with flappers, generous silent-auction gift baskets, live music, a faux casino and hors d'oeuvres. Nearly 200 people attended the party last October, hoping it would be a much-needed fundraising boost for the Costa Mesa Senior Center.

It wasn't.

The party, the center's first fundraiser in eight years, cost nearly $45,000 and raised some $43,000 — a net loss of about $2,000.

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The festivities occurred five months after the Costa Mesa City Council approved a $26,500 audit that, as it would turn out, didn't paint a rosy picture of the senior center's operational structure and financial stability.

The document, prepared by Costa Mesa-based Management Partners and obtained by the Daily Pilot before its posting Tuesday on the city's website, predicts a "fiscal crisis" for the West 19th Street facility.

By June, the end of its 2013-14 fiscal year, the center will have depleted its general fund, according to the report.

"A serious fiscal issue exists with [the senior center's] operating budget and the ability to provide services after this fiscal year, which needs to be addressed by the [center's] board immediately," the report states.

The board has indicated a desire to use funds from a separate memorial foundation toward the deficit, according the audit, which questioned the legality of such a proposal.

Since 1987, the center has operated as an independent nonprofit with a board of directors, according to the report, though it still receives considerable aid from the city, including about $535,570 worth of in-kind services for the current fiscal year, in addition to $240,000 in annual funding. The facility serves 300 to 400 seniors daily.

The November report issued 15 recommendations, among them that the city amend its agreement with the senior center. The audit describes the agreement, which expires in June 2015, as "primarily a lease/tenant agreement" that provides little oversight.

According to the report, "The structure of the current agreement does not give the city the ability to hold [the senior center] accountable to any standards, nor does it have the authority to regulate their senior services and program operations."

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Declining numbers

The audit highlights declining figures between fiscal 2008-09 and 2011-12, namely a 20% drop in program participants and 35% drop in volunteer hours.

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