Pasco charity ran up $1.2 million deficit. Now it cuts aid to seniors.

For 50 years, the Community Aging and Retirement Services in Pasco County has provided in-home care, health services, meals, adult day care and other essential resources to low-income senior citizens. Supporters laud it as a savior for the county’s most vulnerable.

But now it’s being called something else: Financially troubled.

In recent weeks, the agency, known by the acronym CARES, has come under fire over financial decisions that threaten its bid to renew a six-year $4.3 million contract for an elder care program it has administered in Pasco for decades.

The nonprofit also started cutting services to clients to offset months of funding shortfalls.

“The situation is grave because we want to make sure that seniors get the services they need,” said Ann Marie Winter, CEO of the Area Agency on Aging of Pasco & Pinellas Inc., which funnels state and federal dollars to organizations providing services to needy seniors.

Among the concerns:

• CARES overspent by $1.2 million on its elder care contract. The regional agency dealt with that, but CARES is still behind by more than $200,000. Winter told CARES it needed to trim services to seniors until the new state fiscal year begins July 1.
• In February, CARES sold its Dade City senior center building to the chairperson of its board of directors. The transaction raised conflict of interest questions.
• Last month, CARES board members and the director’s husband wrote personal checks to cover payroll because they worried the nonprofit would run out of money to pay employees.
• Two CARES board members worried about the nonprofit’s financial decisions before leaving their positions, including one who resigned last month, saying he was “concerned with the agency’s lack of discipline in its budgeting and expenditures.”

CARES executive director Jemith Rosa said the organization is trying to strike a balance between the many needs of seniors who have no other support system and the agency’s limited funds. Not-for-profits often live paycheck to paycheck, she said.

“We have been providing services to those less fortunate and frail seniors and their caregivers for 50 years. We have been doing so with lots of funding and in multiple occasions without funding and CARES has taken the losses,” Rosa said in an email to the Tampa Bay Times.

What is CARES?

The name CARES is highly regarded in Pasco County, and its benefactors have included Agriculture Commissioner Wilton Simpson and heart surgeon and philanthropist Rao Musunuru. Over the past 49 years, the nonprofit has served 125,000 people — 5,000 last year alone. Its programs include housekeeping, meal delivery, adult day care and health and education services.

Its largest program helps seniors live independently. The agency spent more than $2 million on the program and received $426,000 in fees in 2021, records show.

This month, CARES will be considered for a six-year renewal to help assess needs for seniors and to set up housekeeping and meal delivery services for its senior clients. The agency has held the contract since 1974.

On Monday, a committee of the Area Agency on Aging recommended putting CARES on a 60-day probation after the new six-year contract begins July 1. CARES will be required to meet a series of management and financial safeguards, including doing two-week follow-up assessments on clients and having at least 30 days’ cash reserves. Failure to do so could trigger the Area Agency on Aging to revoke the contract. The regional agency board will decide later this month whether to follow the committee’s recommendations.

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New senior center

With great fanfare, CARES broke ground in January on a senior center project in Dade City. The land was donated by Simpson, a Pasco resident and longtime supporter of the organization. The project is intended to replace the Crescent Center across the street, which opened in the early 2000s.

Rosa said the hope is to move in by this time next year.

With no need for the Crescent Center property, CARES put it up for sale.

There were four bidders, including Zoroot Properties LLC. The company’s only officer listed in state public records is Ricardo “Rick” Soriano — the chairperson of the CARES board of directors. Soriano told the Times that he bid on the property but had no involvement in the vote on the February purchase. His just happened to be the best offer, he said.

Rosa acknowledged that retired Pasco Clerk of the Court and Comptroller Paula O’Neil, a former board member, raised concerns about the sale before leaving her position when her term expired. The sale closed after she departed.

The transaction caught the attention of Winter, executive director of the Area Agency on Aging. She learned of the sale when she read the minutes of a CARES board meeting. The agency has several contracts administered by Winter’s group, which requires any potential conflict of interest to be disclosed in advance. That didn’t happen in this case, Winter told the Times.

“This is clearly a conflict since the board president is benefiting personally while in his position as a board member,” Winter said in a Feb. 7 email to Rosa.

Winter said she offered Rosa several remedies, including removing Soriano from the board or requiring him to waive the monthly rent he planned to charge CARES for as long as it remained a tenant.

Rosa, who has led CARES for more than seven years, and the board chose a different option: Rent the building back from Zoroot at a cost of $1,000 a month. To do so meant CARES could not use state or federal dollars — intended for client services — to pay the rent to their board chairperson.

The CARES board agreed but considered just shutting down the senior center in Dade City.

When the $500,000 purchase closed, CARES netted $36,000 after paying off the mortgage and a line of credit. An outside appraiser valued the building and land at $490,000. The other offers ranged from $330,000 to $499,000, but bidders wanted substantially more in monthly rent payments, including one that asked for $6,000 a month. The bidders were asked to submit their best offers by Jan. 30. Days before that, Soriano told his title company to increase his offer, records show.

A $1.2 million deficit

Winter said CARES had exceeded its budget on various programs to care for seniors by $1.2 million. While she was able to find $995,000 through other aging-service providers in the state, CARES still has a shortfall. Winter said she is also concerned that CARES has not acted on repeated requests to control its spending.

“We’re bailing you out … but you have to start looking at where you’re spending money and where to start cutting costs,” Winter said she told Rosa.

In an April 21 email to CARES, Paula Moore, the Area Agency on Aging’s chief financial officer, wrote, “Please confirm that you understand the severity of this situation. (The area agency) is doing everything we can to help you provide services appropriately but dollars are not infinite and your budget’s management essential. I can’t emphasize this enough.”

Winter’s agency recommended cutting services by at least 25% and said those cuts could go deeper and possibly mean CARES would not be able to provide services by June.

Rosa said the Area Agency sends her the clients and she must provide them services. She also said that Winter’s agency has ample funds in investments to pay the difference for CARES. Rosa said CARES began cutting services by 50% in April for such things as home care aides and incontinence products. She said seven people already filed grievances over the cuts.

Questions have also been raised about whether CARES has been at risk of not being able to pay other bills, including payroll.

Rosa said CARES experiences periodic cash flow issues. When the issue was discussed by the charity’s finance committee on April 17, three members of the board and Rosa’s husband wrote checks to help cover about $50,000 needed to make payroll in case an expected payment check didn’t arrive by April 20. The checks turned out not to be needed and were returned, Rosa said.

Winter said she was unaware of the board’s payroll dilemma but that such cash shortages should not happen. Charities signing up for contracts through her agency must certify having 60 days of cash on hand at all times.

The tax forms for CARES show its revenue dropped from $3.7 million in 2020 to less than $3.3 million the following year. The 2020 budget was buffered by nearly $500,000 in federal payroll protection aid available during the pandemic to help pay its 110 employees.

But a $526,000 surplus for 2020 turned into a $242,000 deficit the following year. Around that time, top officials at CARES were awarded sizable pay bumps. Rosa’s salary increased 19.8%, from $96,426 in 2020 to $115,565 in 2021. The agency’s chief financial officer, meanwhile, received a 26.5% raise to $87,568.

“An almost dismissive attitude”

CARES board member James Mallo resigned April 20, citing concerns about how the organization functioned. In an email to the Times, he said that several months into his board service he thought that the CARES operation had lost its focus.

“Some of the financial/fiscal decisions made with/without the involvement of the board were absolutely incongruent with my experiences” serving on other nonprofit boards, said Mallo, a major in the Pasco County Sheriff’s Office and chairperson of the Pasco Republican Executive Committee.

“I also felt that the board was not being given all of the information about important things that we were asked to make decisions on,” Mallo said. “I felt that many of the board members were not being heard and were treated with an almost dismissive attitude.”

Pasco County Commissioner Ron Oakley was asked Jan. 30 to join the CARES board.

“I’ve got a lot of questions that need to be answered. And they’re not good questions, but somebody needs to answer,” said Oakley. “I just have a strange feeling about that organization, the way they have been operating.”