MANCHESTER, NH – The city on Monday officially severed ties with Intown Manchester, despite the organization submitting a plan for corrective action and business plan going forward, as requested back in November.
On Nov. 18 city solicitor Emily Rice sent notice to the Intown Board saying that they needed to provide those items if they were to continue working with the city, under contract until June of 2022. Deb Day, who has been Board Chair since August, said those documents were submitted to the city in mid-December.
However, a notice sent on Feb. 4 informed the Intown Board that their contract with the city was terminated, effective immediately.
Day said the financial situation at Intown was “no secret” over the summer, and the board has done everything it has been asked to do since then – except provide a complete audit of five years’ worth of records.
“We were not able to provide what they wanted. They wanted audits. We hired a company not qualified to do the audits, so we didn’t meet their deadline and when then they started holding money back, that’s when we laid off [Executive Director] Sara [Beaudry] and the maintenance team,” said Deb Day, representing Intown.
“We responded saying we were unable to provide audits as requested. They wanted five years of audits. I don’t know why nobody asked for audits sooner but all of a sudden they wanted five years, and a true audit costs thousands and thousands of dollars – if you can even find a company to take on the job. That’s where things seemed to go south,” Day said.
Day acknowledges that the organization’s books were out of order, largely the result of a changeover from one accounting firm to another over the years, and inconsistency in bookkeeping practices. Former Executive Director Sara Beaudry in December told the board that she took full responsibility for the accounting issues, but said the organization was unable to find an affordable accountant to perform the audit under the city’s imposed deadline.
In the meantime, the city had directed Melanson CPA to do a control report, and Melanson concluded that Intown was in about $90,000 of debt.
Intown Manchester maintains that the accounting information used by the city to direct Melanson CPA to do the control report was unaudited and incorrect, and they dispute information the city has disseminated regarding the state of their finances. They also claim they have not received a copy of that report.
When in November the city requested a business plan and corrective action plan, Day said the remaining seven-member volunteer board rolled up their sleeves.
“Our little board with no Executive Director or employees, we got together and did a business plan, and we included the five items they wanted us to include. We submitted that on Dec. 21. We’ve have had absolutely no input on the plan we submitted. We did have a meeting set up for Jan. 3, and there were a few adjustments they asked us to make, but all of a sudden I hear through Pat Long that Leon Lafrenniere was presenting it to the Board of Aldermen last week, and that’s where we’re at,” Day said.
“I have a checkbook and keys – to what, I don’t know. We have assets although I don’t know what they all are. There’s a little red barn at the Victory parking garage with some equipment. Oh, and we’ve been contacted by the Department of Justice to find out what’s going on,” Day said.
For the past 25 years, Intown Manchester has operated on a fixed budget of $258,000 generated by a special tax assessed on businesses operating in the downtown Central Business Service District. That amount pays for salaries for staff and maintenance workers, office rent. They receive no taxpayer or city funding. All other expenses are covered through Beaudry’s fundraising efforts through special events throughout the year and the sale of decorative promotional banners. Over the years Beaudry exceeded fundraising goals, at times nearly doubling her budget through sponsorships.
The city releases tax money gathered from downtown businesses in quarterly installments. After the July meeting the city began parsing out money in monthly payments of $21,500. Those payments stopped after the October installment. A $17,000 payment was made in November. The monthly $21,500 installment for December has not been paid out.
A copy of an email sent to the city from board member Jeff Eisenberg on Jan. 30, addressing the city’s questions about Intown’s corrective plan, submitted in December, is below.
Day said the plan was rejected, and the letter from Rice followed. Attempts by Manchester Ink Link on Monday to reach LaFreniere by phone and email were unsuccessful.
“In good faith we spent a lot of time and put those plans together, and they rejected it. No feedback to us that says hey, the BMA doesn’t like this and that; could you do this? When we said we can’t operate with no paid employees and could we hire an interim executive director, Leon said sure. But I said that if we did that I would need to know that I could pay them in a timely manner; I didn’t want to have to beg the city for the money –the assessment that has already been collected. Money that we should be able to use to pay the debts we have,” Day said.
She noted that there are vendors waiting for payment.
“We feel the city gave us nothing. It was not a give and take. They didn’t negotiate or say we don’t like your plan. There was no negotiation,” Day said.
Day says she knows the city has a different point of view about how things unfolded.
“As a property manager, I’ve learned when tenants are fighting, there’s a side A, side B and, in the middle, what really happened,” Day said. “And I really believe that we did some things wrong, but the city is not free of blame here. No one believes there was any misappropriation of funds on Intown’s behalf.”
She said given the small annual operational budget, which comes directly from a tax assessed on downtown businesses, Intown Manchester often had to beg from Peter to pay Paul to make ends meet, especially after 2019, when a major sponsor pulled out, and then COVID happened.
Day says she doesn’t know why the city rejected their reorganization plan (see documents below).
On Feb. 7 Beaudry sent out an email to businesses who contribute to the downtown assessment fund, which is what powers Intown Manchester.
Beaudry said Intown’s goal was to continue working, “including our fundraising” and complete our contract with the city which expires on June 30, 2022. “Our debt would be paid in full and we would then pass the baton to the next leadership team. Our attempts to help with a smooth transition and planning with the incoming team have not been valued,” Beaudry wrote. “I strongly believe that Intown and the city of Manchester would have been well served by meeting and discussing any questions, comments and concerns. It is impossible to resolve the situation without open and honest communication and planning.”
Day said it feels to her that the city never really wanted to mend the relationship with Intown.
“I’m tired of fighting with the city. I have a pile of bills on my desk that stress me out every day. I owe the guy who designed the taco tour logo $60, but I can’t pay him because the city is holding back the money. A cleaning company that cleaned the offices are owed $200 for six months work. He wants his money, but I can’t tell him when he will get paid,” Day said. “I’ve been on other boards that aren’t like this. I know this isn’t how it has to be.”
Below: Documents Intown prepared at the city’s request, which were submitted in December.