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Council likely to pass ARPA allocation for storied non-profit despite lingering questions about its finances

Cleveland City Hall
Posted at 6:35 PM, Dec 06, 2021
and last updated 2021-12-06 18:35:55-05

CLEVELAND — At its final meeting of the 2021 legislative session, the Cleveland City Council’s Committee of the Whole appeared likely to sign off on legislation that would provide $2 million to Northeast Ohio Neighborhood Health Services (NEON), a non-profit with a long history of working in and providing for the city’s most challenging neighborhoods. However, the allocation of American Rescue Plan Act dollars did not come without pointed questions about the non-profit’s financial health and its management of other endeavors.

According to the legislation, which was supported by Mayor Frank Jackson’s administration, NEON’s plan for utilizing the $2 million in funding included some of the non-profit’s existing programs, including lead testing and prevention, food distribution, and other health and wellness initiatives. Additionally, $360,000 would be spent on a clinic to help residents have their criminal records expunged as well as an additional $200,000 to cover expenses related to the damage caused by a fire at NEON’s primary facility, the Hough Healthcare Center, earlier this year. The fire caused an estimated $5 million in damage, NEON officials said, and it remains unclear how much of the damage will be covered by insurance.

Several council members were critical of NEON’s financial health as well as the salary of the non-profit’s CEO, Willie Austin. According to tax filings, Austin’s salary was in excess of $500,000 per year as of its 2019 fiscal year tax filing. Additionally, NEON’s net income in the 2019 fiscal year was in the red by more than $915,000, according to tax filings.

“It is concerning to see the CEO is making $500,000 a year and he’s not here (at the meeting),” said Councilman Brian Mooney. “I think that’s purposeful. That’s a lot of money for a non-profit to pay someone…. That’s more than hospitals CEOs make.”

Councilman Basheer Jones passionately defended NEON and the work the organization has done over its 54 years of operation.

“They have had some issues within the past couple of years. But they have been servicing the community for 54 years. We shouldn’t throw away the first 50 years,” Jones said. “We want to be able to get out into the community. We want to help expunge people’s records now with the help of [the expungement clinic]. We want to be able to feed people now. What these programs are, [NEON is] going to be paying for services.”

Councilwoman Delores Gray also joined in Jones’ defense of NEON, telling her colleagues that she can personally attest to the importance of the non-profit’s work, particularly on the east side.

“I was 12 years old when I first went to NEON,” Gray said. “Believe this: that clinic is well needed in this community as well as the other nonprofit (work). Without it, we would not be where we are health-wise.”

Councilman Mike Polensek was also critical of NEON’s management of the East Side Market, which opened in 2019 at the corner of East 105th and St. Clair. Heralded as the answer to the food desert in the heart of the Glenville neighborhood, the market was to also provide a neighborhood kitchen and health clinic, neither of which have materialized. Although owned by the city, the East Side Market is operated by NEON.

“There were promises that were made to us that have not been fulfilled. I have major concerns about that. I have major concerns about the administration [of the market],” Polensek said. “I have major concerns about what I believe to be some questionable activity that took place at the East Side Market.”

According to property records, the East Side Market owes more than $100,000 in delinquent property taxes. City officials have appealed the tax levy because the market is owned by the city. Councilman Kevin Conwell argued that the issues related to the market should be separated from the legislation, which would provide funding for NEON’s other programs and initiatives.

City officials also defended NEON and told council members that the administration would not be permitted to provide the non-profit with ARPA funding if the non-profit did not have clean financial audits.

The council eventually approved the $2 million funding allocation with the caveat that any additional funding would require separate council approval.