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July 13--NIAGARA FALLS -- Community Missions of Niagara Frontier, Inc. is faced with a taxing problem.
Representatives from the city's largest provider of services to the poor and homeless say it started a few years ago when they were forced to make a difficult decision: Use funds on hand to meet the organization's tax obligations or continue to provide meals, shelter and counseling to needy individuals in Niagara Falls.
Officials from Community Missions say they chose the latter, eventually leading to the organization falling behind on taxes owed to the Internal Revenue Service. The decision has had lasting consequences for the organization, which now has liens against its property and has entered into a repayment agreement aimed at making good on hundreds of thousands of dollars in outstanding tax debt.
"We felt we were forced into a choice," said the organization's longtime Executive Director Robyn Krueger. "Neither choice was reasonable."
The IRS levied two tax liens against Community Missions in 2012 totaling more than $516,000, according to records on file with the Niagara County Clerk. The agency entered into an agreement with the federal agency immediately after liens were filed and has since been working to pay the back taxes that will see the debt paid in full by the end of 2018, according to a 2012 audit of the organization from the accounting firm Swiantek & Kling LLP.
The tax situation also has had a direct impact on Krueger herself.
Documents on file with Niagara County show she had tax liens totaling nearly $200,000 applied to her own personal property in Lockport as a result of the failure to pay taxes in full at the Mission. Under state law, executive directors can be held personally liable for taxes owed by the organizations they serve.
Krueger said she was well aware of the possible outcome of choosing to continue providing services instead of paying the Missions' taxes, but pressed on anyhow.
"Every CEO knows that's the risk," she said.
Krueger and members of her board admit Community Missions is still at risk of having to reduce services. Agency officials also contend that they have a plan in place to regain financial stability. The organization has already cut staff, sold off property and pursued additional grants to keep itself afloat. Missions' officials hope an infusion of $150,000 in casino money, authorized by city lawmakers earlier this week, will help them avoid service cuts moving forward.
Krueger said Community Missions' officials chose not to go public with their struggles earlier because they thought they could make it through without asking for assistance.
"You try to do the best you can," Krueger said. "Everybody's struggling."
Representatives said there were several major changes that resulted in the organization's financial dilemma.
First was a change in funding policy from the New York State Office of Mental Health. The state agency set in motion in 2004 plans to switch some of its services from contractual payments funneled through the county. Organizations receiving money were to switch to a reimbursement plan for some services within the state's Personalized Recovery Oriented Services program, or PROS. Those changes took effect in the beginning of 2011, according to the agency website.
Krueger said that the changes, which require the organization to bill Medicare or Medicaid for each time a client receives services, drove away consumers and created confusion for staff members who had not previously been required to file paperwork every time they were visited by people seeking services.
"There was a huge learning curve for our staff and consumers," she said.
And during the adjustment period, which lasted the better part of a year, the organization was losing upward of $60,000 a month in funding, all the while receiving little by the way of guidance or funding from the state, Krueger said.
"Unfortunately, there was very little funding to help you transition," she said.
The organization appealed to the state for additional funding to help with the transition as the problems mounted, but was rebuffed each time with agency officials saying there was no money available and that the changes being implemented were meant as cost-cutting measures, Krueger said.
Ben Rosen, a state Office of Mental Health spokesman, said the state agency did everything it could to help organizations across New York deal with the transition in an email response to a Gazette inquiry earlier this week.
"OMH provided start-up funding to all new PROS programs and offers continued technical assistance to all PROS program providers," Rosen said. "OMH will continue to provide technical assistance to Community Missions of Niagara Frontier to help them ensure that their PROS program remains a viable resource for the residents of Western New York."
Rosen said the purpose of the changes was to help providers offer better services in a more cost-efficient manor.
"The Office of Mental Health (OMH) created the Personalized Recovery Oriented Services (PROS) program to offer comprehensive recovery services to New York residents with severe and persistent mental illness," Rosen said. "The goal of the program is to integrate treatment, support, and rehabilitation in a manner that facilitates the individual's recovery."
While that transition period pushed the agency into the financial situation in which it now finds itself the program has come through the the required changes and is now self-sufficient again, Krueger said.
"That program is capable of supporting itself now," she said.
Also in 2011, the trust that managed the organization's worker's compensation insurance -- CRISP -- was dissolved after being deemed insolvent by the state.
As a result Community Missions was required to begin paying into the state's insurance system, Krueger said.
The state's Worker's Compensation Board took over all of the trusts accounts and held those employers liable for underpayment made to the board on their behalf. Community Missions owed $430,611 by the end of 2012 and had entered into a five-year repayment plan, according to the audit.
Krueger said that number has grown since as the state's forensic auditors have continued to examine the trust's numbers.
"Each year, they rethought and reassessed what we owed," Krueger said.
Big red number 2018 Year by which Community Missions is scheduled to have $516,000 in tax liens paid in full.
Contact reporter Justin Sondel at 282-2311, ext. 2257
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