Let’s Say You Owe Me $6.5 Million

Seriously – don’t panic.  We can work this out.

You owe me $6.5 million.  I’ve got all the proof I need – the auditors came in and caught you red-handed.

You’re in all sorts of trouble – mismanagement, misuse of public funds, conflicts of interest and potential fraud.

You’ve systematically misspent my money, and overbilled the me for years.

So here’s what we’re going to do.

First, I’m going to reduce that $6.5 million to $3.9 million.

Don’t ask me why – just say “Thank you!”

Now, for the balance – instead of giving me the $3.9 million, you’re going to transfer ownership of two buildings you own to me.

The assessed value of those two buildings is $4.1 million, which is more than the $3.9 million you owe me.

So now – I owe YOU money!

What’s that?  Yes, I know – those two buildings are going to need a lot of repairs and upgrades.

About $10 million in repairs and upgrades.

But that money I’m paying you?  And that money for repairs and upgrades?  Hell, it’s not coming out of my pocket.

It’s taxpayers’…

*****

Welcome to San Diego County.

Where our County Board of Supervisors…

Took in our county tax dollars, and did this:

And before you snicker and think, “Those supervisors really stick it to San Diego County taxpayers!”

Think again.

The County of San Diego gets state and federal tax dollars, as well.

Here’s a handy graphic that shows the county’s sources of revenue.  It’s a few years old, but I think it’s safe to assume that the sources are still the same:

So it appears that every taxpayer has the pleasure of being part of the financial FUBAR I’m about to share.

It started with this story in May 2021:

It involves this nonprofit organization:

Volunteers of America Southwest (VOASW). 

They’re a chapter of Volunteers of America (VOA) and, according to the VOA website…

…VOA is an accredited Better Business Bureau charity and a “Great Place to Work” certified organization.

I did some checking and it appears that Volunteers of America Southwest is neither an accredited Better Business Bureau charity or a “Great Place to Work” certified organization, and the reasons soon became clear.

Here’s a more recent Voice of San Diego story by the same reporter, May 2022:

According to the article,

“In 2018, two employees within Volunteers of America Southwest’s San Diego office noticed suspicious payments from the nonprofit to three different companies.  They discovered the companies were owned by two women who worked for Volunteers of America Southwest, and were also the sisters-in-law of the charity’s chief financial officer.

“The companies billed for a wide array of goods and services from skin cleanser to sofas and gym weights.  It’s unclear any of those goods or services were ever provided – and some products sold for more than their market rate.

“The two whistleblowers raised their concerns to the nonprofit’s Chief Executive Officer Gerald McFadden repeatedly, they said.  But no one stopped the alleged double-dealing – and ultimately both whistleblowers lost their jobs.”

Uh-oh. 

I reckon that means no “Great Place to Work” certification VOASW, at least from the two whistleblowers.

The article goes on to say that Volunteers of America Southwest had been one of San Diego’s largest charities serving marginalized populations.  VOASW ran several treatment centers for those struggling with mental illness and addiction, as well veterans and those experiencing homelessness.

San Diego County officials audited Volunteers of America Southwest, and there were allegations that the charity’s managers engaged in mismanagement, misuse of public funds, conflicts of interest and potential fraud:

“Officials demanded Volunteers of America Southwest refund the county $6.5 million in payments made to the nonprofit between 2018 and 2020.”

That where that $6.5 million figure in this post’s headline came from.

I reckon that means no Better Business Bureau accreditation for VOASW, either.

And since then?

In addition:

  • The Volunteers of America Southwest chapter was subsumed by Volunteers of America’s national office.
  • The charity’s president/CEO was forced to resign and its volunteer board of directors was disbanded. 
  • VOASW is under criminal investigation by the Office of the Inspector General (OIG).
  • The county no longer provides any funding to Volunteers of America Southwest.

I beg to differ with that last bullet.

Remember that $6.5 million that San Diego County officials were demanding be refunded by VOASW?

On September 10 came this story:

“…the county Board of Supervisors is scheduled to approve a settlement that calls for Volunteers of America Southwest to transfer ownership of two National City properties to the county portfolio.”

“After months of negotiations, the county agreed to reduce the debt owed by Volunteers of America to $3.9 million.

“The county will pay just over $227,000 for the two properties – the difference between their $4.1 million assessed value and the amount owed by the charity.

“But the buildings need up to $10 million in repairs and upgrades before they can reopen for public services.”

The two buildings were constructed in the 1960s (asbestos, anyone?) and were most recently used as a 120-bed alcohol- and drug-treatment center operated by Volunteers of America Southwest.  It closed in March.  The facility will be used to accommodate a new behavioral health facility.

And I have no argument with that – we need the services this facility will provide.

My argument is with the County of San Diego supervisors who – for reasons unstated – lopped off $2.6 million of that $6.5 million they were demanding be refunded.

Why did the supervisors just blow off $2.6 million – a good chunk of it our tax dollars – instead of holding Voice of America Southwest accountable?

So, the $6.5 million was whittled down to $3.9 million, but instead of demanding the cash, the county supervisors are instead taking two very old, crappy buildings that need an estimated $10 million in repairs and upgrades – and come on!  We know these government-managed projects NEVER stay on budget.

Taking the buildings PLUS giving Volunteers of America “just over $227,000” more?

Apparently.

And apparently the county supervisors are unanimously happy about all this.

The September 10 Union-Tribune article says:

“The settlement received unanimous preliminary approval at a Board of Supervisors meeting last month, so it is likely to pass at its second hearing.”

So this bunch:

Is high-fiving each other over this brilliant deal they made.

And speaking of our county supervisors, isn’t this interesting?

Back in May 2021, Nathan Fletcher, the chairman of the county Board of Supervisors, was quoted in a Union-Tribune article as saying this about Volunteers of America Southwest:

“There is a special place in hell for those who betray the public trust of the public by committing fraud with funds designated to help our veterans and the least among us.  We will continue our work to recover all misused funds and hope those responsible face the full weight of the law for their actions.”

But, in this August 2022 article:

Nathan Fletcher – the same guy who in 2021 was yammering about recovering “all misused funds,” now in May 2022 – said:

“I wish we could get every dollar they defrauded from taxpayers at a one-to-one rate, but the reality is you can’t get blood from a turnip.  The value is not just dollars and cents…When we get this [facility] running, it will help the entire region.”

The “turnip” Fletcher is referring to is Volunteers of America, the organization that “subsumed” its Volunteers of America Southwest chapter.

According to Volunteers of America 2020 Annual Report “Statement of Financial Position”:

Page 30:  Total assets:  $2,963,972,255

Page 31:  Total net assets:  $1,309,991,606

This is the “turnip” that Nathan Fletcher, the chairman of the County Board of Supervisors, declared you “can’t get blood from.”

But Fletcher obviously has no qualms about getting blood from us turnip taxpayers.

So, My Fellow Turnips, remember this graphic?

With this FUBAR, I’m on the hook for San Diego County property taxes and state taxes and federal taxes.

How about you?

I think it’s clear this is officially FUBAR…

Update:  As anticipated, the San Diego Board of Supervisors approved this financial FUBAR:

One of the county supervisors said,

“It’s not ideal.  It would have been better to recover the money, but this is a good deal given the options available.”

“A good deal…” for whom?

Not us taxpayers.

As for that nagging question – Why did the supervisors go from demanding that $6.5 million repayment in May 2021…

…to reducing that amount to $3.9 million?

The September 13 Union-Tribune article said:

“The initial $6.5 million identified by auditors was pared to $3.9 million under a recalculation of the debt reached during the settlement negotiations.”

“A recalculation.”

My response:

To:  San Diego County Tax Assessor

Re:  2022-2023 County Taxes

Dear Sir:

I am in receipt of your tax bill for fiscal year 2022-2023 in the amount of $2,452.58:

Emulating the policies and procedures recently involved in the San Diego County Board of Supervisors’ settlement with Volunteers of America Southwest, I have done a recalculation of the amount billed to me.

According to my recalculation, the County of San Diego owes me $4,183.22.

This amount is due and payable in full to me within 30 days of today’s date.

Thank you.

P.S.:  To quote a county supervisor, this is a…

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