VECTORS nearly loses house in accounting failure

In a modest home off Rio Lindo Avenue in Chico, 10 veterans make their beds each day, eat their meals amongst friends and try to get their lives on track—finding jobs, staying sober or working the system to get their benefits from the U.S. Department of Veterans Affairs. For these vets, and the hundreds that came before them, VECTORS has been a lifesaver.

This community asset—VECTORS, which stands for Veterans Executive Committee to Organize Rehabilitative Services, offers transitional housing and resources to homeless veterans—almost shut its doors this summer. Unpaid property taxes and failure to submit adequate records to the city of Chico, which granted the house to VECTORS six years ago, had put the organization in a financial hole.

“We have a big task of righting the ship,” said Larry Langwell, new president of the VECTORS board of directors. “To get back in the good graces of the city, we worked really hard with the city to stay in compliance [with our agreement]. They rescued the house from the tax man to give us time to get back on track.”

VECTORS was able to stay afloat despite its near demise just three months ago thanks to the devotion of a few key players. Langwell quickly shifted from his role as secretary of the board into the president’s seat, and the city of Chico’s Redevelopment Agency paid the $80,000 in back taxes to keep the house open, adding that cost to the nonprofit’s existing loan.

“The Chico Redevelopment Agency originally arranged a loan to purchase the property, so we’re sort of like the mortgage company,” explained Sherry Morgado, Chico’s Housing and Neighborhood Services director. “We could have foreclosed and taken the property back, but we thought it was more important to make sure the veterans who needed the services VECTORS offers continued to get those services.”

The city has been working closely with the VECTORS board of directors to ensure the nonprofit’s long-term solvency—the redevelopment loan agreement is good for 55 years. VECTORS is currently operating without an executive director, but things seem to be headed in the right direction, Langwell and Morgado agreed.

So what happened to put VECTORS in such a spot that it could have lost its house? The new board is looking into the details, but it appears to be attributable to just plain lack of business knowledge.

“I’ve seen things like this happen to nonprofits,” Morgado said by phone recently. “It’s like running a business. If you don’t have that background for bookkeeping and financial record keeping, you can get into trouble. [With VECTORS], the board of directors and the person who was acting as their executive director had very good intentions—and they’re veterans themselves—but they didn’t have that background of knowing how you run a nonprofit and keep it afloat and keep up with your legal requirements if you’ve gotten grants or loans.”

VECTORS, which started out in 1988 as a resource center before expanding in 1994 to include housing, had been run for the past six years by Steve Longoria, who served as both president of the board and executive director.

During Longoria’s time there, the organization gained a reputation for bad record keeping, Langwell said during an interview in his office at Chico State, where he serves as Veterans Affairs coordinator. It failed to submit adequate reports to the city for the past two years, and a reporting snafu with a state agency that had given VECTORS a grant in 2008 led the group to be told it would not be eligible for similar grants in the future.

Longoria, who could not be reached for comment, resigned in June.

Beyond financial concerns, Langwell worries that relationships with other veterans organizations were strained because of poor business practices.

“Veterans are a very close-knit community,” he said. “Once you break your record of integrity in that group, it’s not going to be easy to be welcomed back.”

So Langwell, with the help of the board of directors, which includes both old and new members, is working to repair relationships while also improving VECTORS’ financial standing and setting up record-keeping practices that will ensure its long-term viability. In addition, the group is on track to qualify for a property-tax exemption as well as being eligible for future grants from state and national organizations.

“We’re working really closely with their board right now,” Morgado said. “We’re keeping in close contact with Larry and attending meetings so the new board members can get up to speed. … Right now they seem fairly stable.”