Managers' salaries reduced 10 to 20 percent, others' checks by 5 percent
By Joe Beck -- firstname.lastname@example.org
FRONT ROYAL -- The Shenandoah Area Agency on Aging's struggle to survive deepened Tuesday with the disclosure of sharp pay cuts being taken by agency managers and rank and file staff.
Jonathan Price, director of operations, said at a board meeting that managers are taking a pay cut of between 10 percent and 20 percent, and office staff pay will be reduced by 5 percent. Part-time WellTran bus drivers also will take 5-percent cuts.
Price said all the cuts are mandatory. Board Chairman John Hudson said he hoped the cuts would prove temporary and pay levels would be restored after the agency has weathered its latest cash flow crisis.
Hudson and Cindy Palmer, the agency's interim president, also issued pleas for an outpouring of public contributions. Palmer announced the initiation of a fund drive that will try to obtain 40 contributions of $1,000 each over 40 days.
"We've got to figure out a way to get the public a little more behind us," Hudson said, adding that he had spoken with public officials in Winchester and the five counties served by the agency who worry about the effects of losing the services SAAA provides to thousands of seniors in the Northern Shenandoah Valley. The agency's service area covers Page, Warren, Shenandoah, Clarke and Frederick counties and Winchester.
"They do not want to see us go away," Hudson said. "They see horror stories if we do."
Palmer also announced that Tim Catherman, who manages finances for the Virginia Department for the Aging, and two agency colleagues are scheduled to meet with SAAA staff on Feb. 17 to give technical assistance on several financial issues, including how funding is requested and spent.
James Rothrock, the interim commissioner for the Department for the Aging, described the meeting as a routine intervention similar to those conducted with other local agencies around the state. Rothrock said the meeting did not signal a new investigation into SAAA's finances like one the Department for the Aging performed in late August.
"We're not asserting they're doing anything wrong," Rothrock said, "but just wondering if some technologies, or reporting or communications would assure they're getting the maximum impact out of the funds allotted to them."
Price said the pay cuts are a temporary response to a negative cash flow that threatens to leave the agency with an $80,000 deficit in March and months to come.
Price said the cuts, which will save an estimated $2,500 in payroll every two weeks, will close the cash flow gap but did not say by how much. He refused to rule out layoffs or program cuts in the future.
At a personnel committee meeting after the board meeting, committee Chairman Tony Roper also warned that other cost cutting measures remain an option if the agency's finances don't improve soon.
"We're exploring every possibility," Roper said. "We're making every effort to reduce the costs of running the agency to keep the doors open."
The agency's Web site also posted a message warning of dire consequences if the $80,000 deficit predicted for March is not reduced.
"If we do not close this funding gap, SAAA will be forced to make even deeper cuts that will eliminate programs and reduce services," the Web site message says.
The agency's current crisis stems from legal and accounting bills related to a lawsuit and an audit of several financial issues, including the possibility of crimes committed in the management of the agency's finances.
The agency remains mired in a lawsuit with Helen Cockrell, its former executive director, who was dismissed in early September. The agency has accused her of fraud and embezzlement during her tenure. Cockrell is suing the agency for $20,000 in accrued annual leave and sick leave she contends is still owed her.
The agency is suing her for $70,000 in compensatory and punitive damages, plus attorney's fees and costs. A trial is scheduled for May 22.
Lance Barron, an agency finance specialist, told the board at the meeting that the budget for attorney and accounting fees had been increased by 50 percent from $100,000 to $150,000 for the fiscal year.
"Is that enough?" Roper asked Barron.
"That's the hope at this point," Barron replied. "But I don't know for sure."