East Bluff Neighborhood Housing Services, Inc. - A Not For Profit Agency?

About ten years ago, my wife looked into a low-interest loan from the EBNHS, Inc. We applied and received a loan for $20,000.00 at 2% in order to do upgrades to our home, a new roof, new siding, replacement windows, and the rebuilding of the garage.
At the February meeting of the EBNHS, Inc. I asked the board members how many loans they had made in the last two years. Their answer? None.

So I started to dig around a bit. Seems the EBNHS, Inc. has changed their focus from their original intent. In the Articles of Incorporation dated March 5, 1986, the purpose of the EBNHS, Inc. was "To combat community deterioration and to secure decent, safe, and sanitary housing, community facilities and other related facilities, services, and conditions economic, social or otherwise, conducive to the progress and general welfare of the community by facilitating the rehabilitation of and the improvement to the East Bluff Areas of the City of Peoria:

(1) By the dissemination of information to the neighborhood concerning housing and community projects;

(2) By encouraging the participation of residents and businesses of the neighborhood in the formulation and implementation of improvement plans;

(3) By promoting the cooperation and coordination of such residents and businesses with public agencies, private agencies, private industries and such other entities as are available to aid in the purposes of the organization; and

(4) By assisting in the implementation of the improvement plans."

According to the By Laws of the Current EBNHS, Inc. approved on September 24, 2009, the purpose of the organization is now:

"to renew pride, restore confidence, promote reinvestment, and revitalize the EBNHS neighborhoods through the efforts of local residents acting in concert with financial institutions, corporate enterprise and the business community, foundations, and local government. These services may be extended to areas beyond the EBNHS' service area at the Board's discretion."

Now wait a minute! The funds that the EBNHS receives from the City of Peoria are collected from the East Bluff through a special services tax. So who are they to decide to send the money out of the area? After all, then intent of that money is, according to the original purposes, to serve the East Bluff. In fact, in the city ordinance that created the Special Service Area (Ordinance No. 11,939 dated April 18th, 1989 and signed by then Mayor James Maloof), the clear intention of these funds is to continue the work of the EBNHS, as follows:

I) providing low interest loans (1/2% to 9%) through the administration of a $300,000 dollar revolving loan fund

II) neighborhood paint-up program which provided paint for 215 homes in the East Bluff

III) neighborhood landscaping efforts

IV) encouragement of home ownership through one half million dollars in low interest mortgages secured through IHDA

V) extended code enforcement efforts through an advocacy role with the existing city code enforcement efforts

VI) neighborhood planning, through liaison with city departments and committees.

Seems the EBNHS has gone far afield of the concept held by the original framers. According to their 2011 Budget proposal, they will spend a total of $88,195.00, of which $43,191.00 will be spent on salaries and a 12% fringe benefits package. This means that 48% of their budget will be spent on salaries.

Is this upsetting? The original Articles of Incorporation show how far afield this organization has gone. They state:

"The Corporation [EBNHS] is irrevocably dedicated to and operated exclusively for non-profit purposes; and no part of the income or assets of the Corporation shall be distributed to nor inure to the benefit of its Members, Directors, Officers, or any other individual, except that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered to make payments and distributions in furtherance of the purposes set forth in this article; such purposes shall include the making of distributions to organizations that qualify as exempt organizations under Section 501 (c) (3) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law).

Now I understand that by laws can be changed due to circumstance, like having 13 directors and only half of them required to be residents of the East Bluff. I can even understand having a part time director and secretary, and a loan officer, and paying them some reasonable compensation for their time, as long as they are not in the categories listed above. But what I fail to understand is how this board has decided that becoming landlords for rental properties or paying out 48% of their annual budget falls within the realm of their powers or the intentions of the original framers of this organization.

Since this Special Service Area tax is for the purposes already contained in the EVGC TIF proposal, why should we continue to fund an organization with taxpayer money when additional funds will be collected by the TIF to do the exact same work? Especially an organization that for the last two years, and possibly more, has not accomplished its stated goals.