Story updated 11/18/21 10:33 a.m.
MANCHESTER, NH – The Executive Director of Intown Manchester has resigned effective Dec. 31, 2021, following several months of scrutiny from the Board of Mayor and Aldermen over the non-profit’s lax financial reporting, resulting in a tug-of-war over money due to the non-profit for services rendered to the city.
“I’m devastated,” said Intown’s Executive Director Sara Beaudry on Wednesday.
“I loved this job, but it’s become unbearable. I’ve been working with [City Planning Department Director] Leon Lafreniere and my board to try and get this straightened out. The city’s not going to honor our contract because we’re running at a deficit. We’ve had two years without any events to generate revenue because of COVID. With the upcoming parade and holiday market we were hoping to finally capture some revenue, but they are refusing to release payment for November, and I can’t pay my workers.”
Beaudry said she takes full responsibility for the lack of updated and available financial reports. She has been trying to catch up with the several years of financial records requested, which she admits were in need of careful auditing.
“We discovered there were quite a few issues with our bookkeeping from an outside contractor, like double entries and missing entries. We attempted to get an audit, but for the kind of audit we needed, we were told it would cost $17,000 – money we didn’t have,” Beaudry said.
Her board hired someone recommended for about $3,700 which, ultimately, did not help the matter and only delayed their ability to produce an accurate accounting of their finances. In the meantime, Beaudry sent quarterly reports as requested by LaFreniere on July 7. They were narrative reports of Intown’s activity that the organization had filed in that fashion for its entire history, and not the financial reports the LaFreniere was looking for.
“Frankly, the city dropped the ball here as well. If they were supposed to be making sure we were filing the proper reports, it has never happened. I just met Leon for the first time in July and I’ve been doing this job for 10 years,” Beaudry said.
As a result of the city’s decision not to release any more money, said Beaudry, three longtime maintenance workers – Florencio “Pepe” Jimenez, Nancy Costain, and Edwin Rivera – on Wednesday were notified by Intown Manchester Board Chair Debbie Day that they were being laid off.
Concern was raised over a $60,000 line of credit opened in fiscal year 2019 by Intown. Beaudry said that line of credit was to make sure salaries could be paid after Intown lost a regular sponsor that year.
“Things got dicey in 2019 after we lost a major sponsor. The line of credit was just to help with payroll as needed, and also we bought a new truck, because ours was dead. And then COVID happened,” she said.
Beaudry said she was attempting to pay down that loan quickly but had to switch to interest-only payments after her budget was cut in 2020.
No one has suggested there is any fraudulent behavior or wrongdoing – if anything, the issue appears to be a combination of insufficient bookkeeping compounded by two years of no events due to COVID, which means no revenue.
The city had directed Melanson CPA to do a control report, which was part of the information disseminated at Tuesday night’s closed-door meeting. Their assessment was that Intown was in about $90,000 of debt.
“If there’s a report I’d love to see it,” Beaudry said. “I met with Melanson one time, and we explained what our downfall was with our accounting and how we were trying to correct it. If we were operating in the red, none of us knew it. We’ve been trying our best to correct this, but honestly, I feel like I’ve been under fire even before this happened. I can’t do this any longer.”
Beaudry said she and her maintenance team on Wednesday filed complaints with the labor board citing a hostile work environment.
Alderman Pat Long said on Wednesday that after all these months he is still unsure as to why after two decades of partnership this is coming to a head. “Until we get audits we’re not going to know what the full picture is,” Long said. “Intown is, in my opinion, essential to downtown, I advocated for it for that reason. We need it to continue and COVID set them back – a lot of their funding is on sponsorships and there was none of that, so of course, they lost revenue.”
Long also pointed to a lack of oversight as prescribed in the longstanding contract from the Planning Department. Something that, for no reason anyone can explain, has never been done.
“The city has never had oversight, which they were supposed to. The mayor recognized that and started asking for that oversight in June or July, but it never happened before,” Long said.
According to the NH Charitable Trust guidebook for non-profits, there must be an internal review of year-end financial statements with an organization’s accountant. An audit is required only for organizations with annual revenues of more than $1 million; financial statements complying with generally accepted accounting principles are required for organizations with annual revenues of more than $500,000.
Based on the most recent 990 tax filing for Intown Manchester available on GuideStar, the organization ended 2018 with $78,522 in assets, $58,604 in liabilities and a fund balance of $19,918. Revenue for 2018 was listed at $478,902 from six sources: $258,000 tax assessment, $60,013 from special projects; $51,750 from summer concerts and events; $22,470 for banner sponsorships and $43,719 “other.”
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 serves as its fiscal agent and has always released the 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.
On Nov. 16 aldermen held a non-public meeting during which the matter was discussed. As a result, the city is requesting a plan of correction from Intown Manchester within 60 days and is withholding the remainder of the $258,000, which is normally distributed quarterly to the organization.
Where it began
The issue of Intown’s finances was first raised during the July regular meeting of the BMA by Ward 3 Alderman Pat Long, who sits on the Intown Board. In an exchange with City Director of Planning and Community Development
Long noted that the issue of non-payment to Intown started when on June 15 LaFreniere requested three years’ worth of financial documents for 2019-2021 by a June 30 deadline. Long noted that Beaudry had been running the organization solo after having to let her office staff go in 2020 due to COVID. Volunteer members of Intown’s board had been assisting with gathering the required documents and going through the books.
Since that meeting the city contends that Beaudry has been invited to attend meetings but has not. Beaudry says that’s not true.
“I’ve been told by a few people that the mayor will not meet with me,” Beaudry said.
Yesterday At-Large Alderman Joe Kelly Levasseur said there’s a lot of blame to go around, but ultimately believes the city has no purview over this matter because the $258,000 that goes annually to Intown Manchester is paid by downtown businesses through the tax assessment and only flows through the city.
“I begged the mayor to give them their money and to let them figure it out with their own board,” Levasseur said. “There have been allegations made and although the mayor keeps saying it’s not personal, it’s obvious to me that it is. I’ve asked a million times for them to bring Sara in for a meeting but they just brush me off.”
Christmas parade and the future of Intown
At the conclusion of the Nov. 16 executive session it was not clear if the planned Christmas parade would happen. However, on Wednesday Intown Board Chair Debbie Day confirmed that the city would be organizing the parade as planned.
A spokesman for the mayor’s office declined to comment on the matter except to say that the parade was going forward.
Day, who just started her term as Intown’s board chair and attended her first meeting in August, said that a meeting with LaFreniere that had been on the calendar for two weeks was abruptly canceled midday yesterday.
“We made an appointment with Leon to discuss the finances – myself, Leon, Sara and Mary (Dowes) Intown’s treasurer. When I emailed to confirm earlier today he said he can’t meet,” Day said.
She acknowledged that the organization has been dealing with bookkeeping issues that came to light last year but that they have tried to be responsive to the city’s requests with no office staff or budget. A person hired to conduct an audit over the summer was found not to be qualified for the job, Day said, leaving the organization scrambling to find someone who could properly go through the books, and the money to pay them.
She said the board had hoped Beaudry would stay on.
“As a board our goal was to get to the end of the year, sell banners, hold the parade and holiday market – all big money makers, which would have been a big help. But Sara’s not going to work for free so as of this minute, nobody’s working for Intown – no maintenance team and no money. I know the mayor’s not going to release any more money to us,” Day said.
She said the Christmas market has the potential to net $10,000 after expenses, and the parade could make $5,000 after an investment of $1,000. The banner sponsorships could bring in up to $50,000 after an investment of $15,000. The taco tour, which was canceled two years in a row brings in about $30,000.
“Is there some animosity or politics between people on both sides? I have to say so. I’ve only been doing this for a few months, and I didn’t believe it until I saw it myself. I don’t know how to fix it. I’m just too new to guess at how to do that, ” Day said.
Telling the maintenance team they were laid off a week before Thanksgiving was difficult but Day is hopeful that the city might absorb them into the public works staff so that they can continue to do the jobs they were doing for Intown.
Before they left yesterday, Pepe and Nancy wanted someone to let the city know the garbage can in Victory garage is overflowing and needs to be emptied.
“The thing is, nobody thinks there is funny business, we just can’t put our finger on where we are, or the way forward,” Day said.
