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| PRESS RELEASES |
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| OBSTACLES REMAIN FOR S.D. CHARITY
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| By Jeff McDonald, Staff Writer |
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July 16, 2007 In the months since the San Diego Food Bank announced it would separate from
Neighborhood House Association, food bank Chairman Eugene Mitchell has been
working to convince his professional contacts that he is serious about
rebuilding the region's largest hunger-relief organization.
More than a few declined to donate time or money to the food bank, which was
plagued by theft and mismanagement for years. This spring, it lost its
America's Second Harvest certification, which means it is no longer eligible
for millions of pounds of donations.
FOOD BANK BOARD OF DIRECTORS, 2007-09
Eugene "Mitch" Mitchell, San Diego Gas & Electric
Mitchell Berner, Public Solutions
Larry Clary, Qualcomm Inc.
Kathy Davis, San Diego County Office of Education
Marc Farrar, Time Warner Cable
Richard Friedlen, Sysco Food Services
Carl Rustin, Wells Fargo
John Vingas, Centerplate
Maira Arzate, Coca-Cola Bottling Co.
Nancy Chase, The Chase Group
Stephen Cushman, Cush Enterprises, San Diego Port Commission
Marlyn Denter, Vons
Hon. William C. Pate, Ret., JAMS
Jennifer Perkins, Eat Drink Sleep
Michele Predko, Westfield LLC
Randy Jones,* U.S. Department of Justice
*Chairman, Neighborhood House Association; nonvoting food bank board member
SOURCE: San Diego Food Bank
Mitchell finally managed to seat a new board of directors, a volunteer panel
full of prominent names and civic leaders. But the fledgling nonprofit group
still has some major hurdles to clear if it is to survive as an independent
charity.
Neighborhood House and Mitchell have yet to agree on terms for use of
warehouse space beyond the first five years. Neighborhood House Chairman
Randy Jones remains on the food bank board, in a nonvoting capacity, despite
the agency's pledge to vacate all its seats.
The biggest problem may be the contracts Neighborhood House still has with
the state, which had no idea Neighborhood House was planning to hand
responsibility for the agreements to another organization.
Neighborhood House is still collecting more than $2 million a year to
provide hunger-relief under two government contracts - The Emergency Food
Assistance Program and the Commodity Supplemental Food Program. Combined,
they account for two-thirds of the 8.5 million pounds of merchandise the
food bank gave away between July and April.
Both are U.S. Department of Agriculture programs, though in California they
are overseen by the state Social Services and Education departments.
Neighborhood House President Rudolph Johnson said the agency will administer
the contracts until the food bank is stable enough to formally assume them.
But state regulations do not permit contractors to farm out more than a
modest share of government work, usually defined as 30 percent. If they do,
they must alert the government.
"This raises some significant questions," said Phyllis Bramson-Paul,
director of nutrition services for the state Department of Education, which
runs the supplemental food program in California.
"Our obligation is to make sure the people in San Diego who are eligible for
this program continue to get served," she said. "If there's a gap in
administration, there is a very real concern about a gap in services."
Neighborhood House established the
food bank in 1977. The agency said in April that it would give up the
program and allow it to become an independent charity.
Under the draft agreement Mitchell and Johnson reached last month,
Neighborhood House will give its trucks, forklifts and other fixed assets to
the new organization. It will also provide computerized help and other
support services until the food bank can manage those functions.
Neighborhood House plans to lease 65,000 square feet of its Miramar
warehouse to the food bank for $1 a year for the first three years, then
charge $50,000 rent the fourth year and $100,000 the fifth year.
Neighborhood House is keeping about 15,000 square feet for leasing to
another company and for its own use.
After 2012, the food bank's rent climbs to fair market value for the
property - about $600,000 a year. Mitchell said the new charity will never
pay that much, however, because he has an agreement with Johnson that
Neighborhood House will not charge more than its monthly mortgage payment,
about $325,000.
Lease payments are a touchy subject because Neighborhood House accepted $7
million in donations from the community to find a permanent home for the
food bank but has refused to turn the property over to the new charity.
"A lot of people say they already wrote a check," Mitchell said.
The food bank has been the subject of intense scrutiny since early 2005,
when The San Diego Union-Tribune exposed a major theft ring that
Neighborhood House executives had tolerated for years.
Eight of nine food bank board members quit in October 2006 because they
could not raise donations while still part of Neighborhood House, which gets
most of its $95 million annual budget to run the federal Head Start
preschool programs.
The food bank was decertified as a Second Harvest affiliate this spring,
after mediation talks between the national food charity and Neighborhood
House failed. Second Harvest has said it will open another food bank in San
Diego County.
Mitchell said he is working to find new sources of food for his organization
and hopes to one day grow annual distributions past the 11 million pounds it
expects to give away this year.
Before 2005, the food bank handed out more than 12 million pounds of
donations each year. |
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