First, it was a $66,000 Paycheck Protection Program loan during the COVID-19 pandemic that raised eyebrows. Then, an audit concluded a city-funded district coalition had misspent close to $354,000 over the course of a decade. That chain of events led the Portland City Council to cut off Southwest Neighborhoods, Inc. from city funds in 2021.
Now, Southwest Neighborhoods, Inc. (SWNI), a nonprofit representing neighborhood associations in South and Southwest Portland, is coming back before city leaders, asking to be reconsidered for annual funding. Neighborhood leaders in South and Southwest Portland say the funding would be a welcome relief. Others are worried about accountability.
SWNI is one of seven district coalitions established by the city to represent and provide services to neighborhood associations in its geographic boundaries. Neighborhood associations are intended to improve livability in the city, via increased civic engagement and communication with elected city leaders. District coalitions provide support and technical assistance to those neighborhood associations, in the form of administrative services, board training, and community outreach efforts. The city of Portland typically provides funding to coalitions that gets passed on to associations.
In recent years, the Office of Community & Civic Life has reexamined the roles and functions of neighborhood associations and coalitions, which tend to consist of only homeowners and often lack racial and economic diversity—a criticism leveled at SWNI before it was cut off from funding.
After concerns about suspicious financial activity within SWNI back in 2020, the city commissioned a financial audit of the coalition. The audit found roughly $174,000 was lost to employee embezzlement at SWNI from 2003 to 2010. Auditors cited a lack of internal financial controls and lack of board oversight, but also noted lax city oversight contributed to an additional $179,000 being mishandled.
The fallout of the financial audit led to three neighborhood groups leaving the SWNI coalition. Facing financial uncertainty, SWNI is now seeking approval for city funding from Civic Life—but critics argue the organization has made no meaningful changes since being cut off in 2021.
While no decisions have been made on whether the embattled nonprofit will receive city funding again, SWNI’s board seems to have the ear of Commissioner Dan Ryan, who oversees Civic Life. SWNI’s board voted Wednesday, March 15, to send a proposal to Ryan and the Civic Life bureau, outlining how funds would be used to serve neighborhoods, nonprofits, and community groups, while making a bigger push for equity and inclusion. The proposal does not include a specific funding amount, just a plan for how future money would be used.
“This is a unique opportunity,” SWNI Board Chair Steve Mullinax said during the meeting. “It comes as there is new leadership on council. The commissioner (Ryan) is more interested in what we can do moving forward, than what has transpired in the past.”
Prior to Ryan being assigned to oversee Civic Life at the beginning of this year, former Commissioner Jo Ann Hardesty was in charge of the bureau. Following the audit, Hardesty recommended cutting SWNI’s funding. The City Council later approved a plan to have Civic Life take over to serve neighborhood associations in SWNI's boundaries.
Mullinax said without a new infusion of stable funding, SWNI may be forced to shutter, leaving neighborhood associations with fewer resources and less cohesion.
T.J. McHugh, acting director of Civic Life who serves on Ryan’s team, said “no decision has been made” to change SWNI’s current operating model.
“Any change to the current structure of how Southwest Neighborhoods are organized or funded will involve neighborhood associations, community organizations, and the people who live in the area,” McHugh said.
Still, McHugh’s request for a funding proposal from SWNI signals a willingness to re-consider partnering with the organization. Swaying Ryan might be SWNI’s last chance at success.
After losing city funding, SWNI scaled back its services in 2021 and laid off all staff except a part-time bookkeeper, relying on private donations each month. Southwest and South Portland neighborhood associations within the district coalition were directed to work with Civic Life for administrative services and insurance coverage, instead of SWNI. Many neighborhood leaders say that hasn’t been working out.
Shortly into the administrative transition, neighborhood associations were informed that a different district coalition had failed to acquire proper insurance coverage on their behalf. Associations also reported little to no communication or access to Civic Life.
“Our neighborhood’s experience with the city of Portland has been a lot of red tape, a lot of small individual grants, and just seems to be dividing us into small little groups,” Marianne Fitzgerald, a Crestwood neighborhood resident, told the SWNI board. “The city really hasn’t done much to unify people in Southwest Portland, so we want to leverage our resources.”
City leaders warned of “toxic” behavior
Even before a formal funding proposal reached Ryan’s team, the city was met with opposition. In a series of letters and emails to Civic Life, some former SWNI members urged the bureau not to restore funding, citing a pattern of “bullying and intimidation” from SWNI leadership. That behavior in past years led neighborhood association leaders, and, in one case, the coalition’s own equity leader, to step down.
Carol Porto, a former SWNI board secretary, wrote to Civic Life staff and city commissioners March 13, claiming a toxic culture within the organization.
“Taxpayer dollars are not to be squandered on a handful of citizens for whom bullying is a standard practice, who say one thing but do another where equity is concerned, routinely make false representation claims, and deploy tactics to suppress, oppress, exclude and disregard community members,” Porto wrote.
Porto said she was once asked to change meeting minutes to include “inaccurate information,” and said two other committee leaders—including the former equity and inclusion chair—both cited threats, bullying, and “demeaning behavior” from SWNI’s former president in their resignation letters. Porto also reminded council that South Burlingame Neighborhood Association’s president has been “threatened with lawsuits, grievances, cease and desist orders and forced board removal.”
Critics say SWNI leadership is quick to censor dissenting opinions and doesn’t allow meaningful discourse on topics like exclusionary policies, or the group’s own historic missteps.
During Wednesday’s meeting, SWNI equity and inclusion chair Laura Campos was interrupted by Mullinax for voicing concern over how a recent neighborhood summit was facilitated. Campos ultimately voted against SWNI’s move to ask the city for funding, calling the group “out of line” with equity practices and state housing goals. Another meeting attendee was kicked out of the virtual meeting after posing questions in the chat about how SWNI would rectify its financial oversight, if given city funds.
“Literally nothing has changed at SWNI since they were defunded in March 2021, except that several neighborhood associations have since left SWNI,” said Marie Tyvoll, former chair of the Hillsdale Neighborhood Association in Southwest Portland.
Tyvoll was ousted from her neighborhood association position by its board of directors after a series of clashes, including her suing SWNI for failing to provide public records.
SWNI leadership did not respond to the Mercury’s request for comment, but current board leaders appear eager to move past prior conflicts and focus on a path forward.
“This plan is presented in the hope that it will be the foundation for moving forward in a positive way to restore – and enhance – the full range of Coalition services for all of our residents, including renters and previously underrepresented members of the community,” a draft version of SWNI’s proposal for city funding states.
SWNI’s request for funding comes as larger questions loom about the viability and purpose of district coalitions, especially as Portland gears up to change its form of government that includes geographic representation in 2025. Many district coalitions have proven dysfunctional and been stymied by a lack of community participation and volunteer leadership. Three of the seven neighborhood coalitions are now run by the city, instead of a contracted coalition like SWNI.
It’s not just the coalitions that have become difficult to operate. The Office of Community & Civic Life was deemed by the city in 2017 as “suffering from limited accountability and outdated funding and program models.” Four years later, a damning report revealed widespread dysfunction and plummeting employee morale within the bureau. At least two former Civic Life directors were forced to resign with payouts from the city in the wake of the report. The bureau has continued to experience a high level of leadership turnover. Michael Montoya, who was appointed as interim bureau director in 2021, left on a temporary leave of absence in early March, citing “personal matters.” McHugh, a special projects and policy advisor in Ryan’s office, was appointed to run the bureau in Montoya’s absence.
Tyvoll and others say Portland’s district coalition and neighborhood association system is outdated and archaic, and should be replaced.
“The way Neighborhood Associations are organized reinforces a racist power structure that led to our system, which continues to prop up a core group of white people,” Tyvoll said. “Six people, all white identifying, made most of the [land use] motions that went to SWNI, and thereby, City Council. If you don’t have folks who use the lenses of equity and inclusion and the basic best practices, that organization is going nowhere.”