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Nonprofit not sorry about bonuses, golden parachute

As Family Service Centers prepared to merge with another nonprofit agency last fall, its board made a severance payment of $154,592 to chief executive officer Mary Jo Monahan.

The payment came a month before the board awarded more than $200,000 in bonuses to 100 employees on the eve of the Dec. 1 merger with Suncoast Center.

Family Service Centers, which provides counseling and in-home support to families and individuals and rape crisis treatment, is supported primarily by taxpayers. But board members say the payments came out of investment funds.

The members are unapologetic about the surprise checks they distributed in person to employees at an emotional meeting just before the merger.

They said the bonuses to the 100 employees — based on performance and tenure and ranging from $200 to $18,384 — were in gratitude to staffers who had persevered through difficult merger talks and faced uncertainty as they prepared to be engulfed by the larger Suncoast Center.

Board members said Monahan, 59, deserved her compensation after a promised job with the new, merged organization was withdrawn.

"We're very proud of how we handled this transition. We wanted to make sure those people are taken care of,'' said Phillip Russell, chairman of the now-defunct Family Service Centers board.

No taxpayer money was used, he said. "It was money from investment accounts. It was a rainy-day fund.''

Monahan, whose salary was $97,573, declined to comment on her severance.

Records show that Family Service Centers has relied heavily on public funding. The Pinellas County Juvenile Welfare Board, which funds programs for families and children with property tax revenue, gave Family Service Centers $3.4 million last year, which is about 75 percent of its budget. The welfare board, which said it encouraged the Family Services-Suncoast Center merger as a cost-savings venture, laid out $49,000 to help it happen.

As part of its belt tightening, JWB has cut funding to 24 programs since 2005, including Operation PAR, YWCA of Tampa Bay, Directions for Mental Health, Lighthouse of Pinellas and 2-1-1 Tampa Bay Cares.

JWB officials disapproved of the six-figure Family Service payouts.

"It was concerning that they were removing such a large amount of cash during a merger, but that was their board's decision and they were entitled to make that. … Although we expressed concern about it, they felt it was their prerogative,'' said JWB executive director Gay Lancaster.

George Matz, chairman of the Suncoast Center board, said he was livid when he learned about the arrangement. He called it fiscal mismanagement.

But Janet Clark, a former Family Service Centers board member and chairwoman of the Pinellas School Board, sees things differently. "That money was Family Service's money. It was not JWB's money. It was not Suncoast Center's money,'' she said.

The bonuses became an issue in the contentious, on-again, off-again merger discussions, during which Family Service Centers officials complained that the process felt like an acquisition rather than a partnership. They also felt forced into the deal when the JWB moved Family Service Centers' funding to Suncoast Center before the merger was complete.

"They made it very clear: Merge or die,'' Russell said.

JWB officials disagree. They said the JWB proceeded with its 2009-2010 budget under the assumption that the merger would take place. They added that Family Service Centers waited until the budgeting process was complete before announcing it was no longer interested in merging with Suncoast Center.

Talks eventually resumed, but a disagreement erupted over the bonuses. Suncoast Center, which provides behavioral and mental health services, let the Family Service decision stand for fear of scuttling the merger, said Matz, the Suncoast Center board chairman.

"I'm not condoning what they did,'' he said. "We felt that this merger was the absolutely right thing to do for the community, for the clients we serve, for the employees.''

Monahan, a key part of the merger discussions, became a casualty of the effort. Under an initial agreement, she was to move over to Suncoast Center under a five-year contract as director of development and retain her CEO salary.

After merger talks fell apart, Suncoast Center officials announced that they would resume discussions, but without Monahan. They also said they were pulling her job offer.

As compensation, the Family Service Centers board offered Monahan a confidential agreement that called for her to receive $154,592, minus withholdings. The board also gave her the rights to Family Service Centers' ICON training program, along with its Web site and promotional materials.

Russell said the program had no intrinsic value. "The way our attorney looked at it was as an asset that had negative value,'' he said. "We didn't give her any materials. We didn't give her any programs. We just gave her the name.''

A 2008 audit shows that expenses for the program were $252,192 that fiscal year. The previous year, the program received $3,894 in technical assistance for its Web site from the Children's Board of Hillsborough County.

Clark, the former Family Service Centers board member, said Monahan deserved the deal.

"We wanted the severance package to represent our appreciation and also to give her a means to move on with the next step in her life.''

Nonprofit not sorry about bonuses, golden parachute 01/09/10 [Last modified: Friday, January 8, 2010 7:52pm]
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