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Burden is on Hilltop nonprofit to refute report

Post by Kim Bradford on Dec. 22, 2009 at 6:43 pm |
December 22, 2009 8:44 pm

This editorial will appear in Wednesday’s print edition.

Twice now, an accountant has found serious problems at the Martin Luther King Housing Development Association. Twice, the association’s board has objected to some of the findings.

The latest review comes as the state Department of Commerce is trying to sort out what happened to millions of state dollars intended to help boost the struggling Hilltop business district.

Commerce hired the same accountant, Mary Jane Dubbs, who completed a similar review for the City of Tacoma earlier this year at the MLK association’s request. She is becoming quite familiar with the agency, and what she’s finding isn’t flattering.

After her latest look at the association’s finances, Dubbs advised the Commerce Department that nearly $1.8 million in state money was spent inappropriately.

Some of the money that should have gone to the Hilltop project – which would provide housing, office and retail space at MLK Way and South 11th Street – allegedly ended up instead in association coffers.

MLK association officials deny that any money was misspent, saying that the state and Dubbs have made several faulty assumptions and accounting errors. Jack Connelly, a member of the association’s board of directors, said Tuesday that the amount in dispute is now below $600,000.

The MLK association is due its defense. But given the mounting cause for concern about how the association operated under former executive director Felix Flannigan, the onus is on the agency to reassure taxpayers that none of their money has been squandered.

The picture that has emerged from the agency’s downfall is of a board that was caught unaware when the bill for risky financial gambles started coming due. It is ironic that the board is now finding fault with the state’s oversight, alleging that state officials should have kept a closer eye on the agency’s dealings. Rebuilding a successful agency will depend in part on the board accepting responsibility for the agency’s past problems.

The association could well redeem itself if it is successful in rescuing the MLK Way project in a way that approaches the original vision. The project, if done right, could prove a pivotal break for the Hilltop.

But it won’t be easy to pull off, given tough financial realities and an unforgiving lending market. Association officials are being appropriately cautious. “Our current goal, given everything that has occurred to date, is to make sure that anything we are involved in is financially sound,” Connelly said Tuesday.

Prudent planning is one step toward restoring confidence in the association. The other is providing a full accounting for the past. The state’s review – and the association’s forthcoming response to it – will be crucial to clearing the air.

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