In a time when many Oregonians are experiencing financial precarity and can barely afford to pay rent, a Portland-based tenant aid organization is on the brink of financial collapse. 

The Community Alliance of Tenants (CAT) has served as a tenant advocacy group for people across Oregon since its formation in 1996, offering resources like a renters rights hotline and tenant organizing support. The organization has helped renters deal with unexpected rent hikes and landlord disputes that might cause them to lose their housing. 

The nonprofit’s 501(c)4 lobbying arm, the CAT Action Fund, has also been able to advocate for renter protection measures in the state and local legislatures and endorse candidates they felt would promote tenant rights. 

But behind the scenes, CAT has been struggling with a revenue crisis that is set to put that work on hold, impacting dozens of unionized staff members, and Oregonians who rely on the nonprofit's services. 

CAT plans to lay off nearly all of its employees except for a skeleton crew of five to six managers, effective July 1. CAT Executive Director Kim McCarty plans to bring employees back in September, though she says there's also a chance the nonprofit may have to permanently shut down if management can't find resources to maintain it.

In an interview with the Mercury, McCarty said the situation isn’t unusual for nonprofits.  

“It's just like any nonprofit. There are changes in funding from year to year. And some of the grants we thought we’d have, we don’t,” she said. McCarty also said CAT has run into timing issues with grant contract cycles. 

But staff say even if that’s true, they don't think behavior from CAT leadership during the period of financial hardship has been up to snuff. Many employees have already felt mistreated by management for years, and they think communication from nonprofit managers about the layoffs has been opaque and confusing. 

Members of the CAT Labor Union (CLU), which is part of Communications Workers of America (CWA) Local 7901, want to know the specific nature of their employer's financial problems, which they say McCarty has been hesitant to share with them. Some also think recent managerial conduct has been emblematic of a history of anti-union behavior from CAT. And then there's the community impact: how will vulnerable Oregonians be affected by the loss of the resources CAT provides? 

The CLU has filed several complaints with the National Labor Relations Board (NLRB) against CAT for allegedly violating labor practices, including repudiation/modification of contract, refusal to recognize, and refusal to bargain/bad faith bargaining. The latest complaints were filed earlier this month.

According to NLRB filings, CAT hired a lawyer with Ogletree Deakins Nash Smoak & Stewart to represent the organization during the bargaining process. Ogletree Deakins is well-known for representing right-wing organizations and notorious union-busters, like Amazon and Lyft. CLU members have also criticized CAT for working with employer-side law firm Barran Liebman. 

"CAT had always focused our resources to support the organizing of the most impacted. We are heartbroken now to see the present waste of resources on union-busters and its impact on our mission to work with our base of renters, houseless and formerly homeless neighbors, and community advocates," a CLU Facebook post from November 2020 reads. 

CAT management has denied allegations of union-busting.  

Terms of the layoffs

Though it appears CAT's financial crisis has been in the making for some time, things have taken a quick turn for the worse in recent months. As recently as February, board documents described CAT’s cash flow as “steady.” That message quickly changed, and by the end of May, board documents said financial operations were at a “crisis point” with scarcely enough in the bank to cover May payroll. 

But unionized employees say they didn't know how dire the situation was until the middle of June, and the abrupt shift was alarming. 

“We were suddenly being told there's no funds, that there's been problems for years in financial management, and now we’re looking at everyone in the bargaining unit being laid off,” Jensi Albright, CAT membership manager, told the Mercury. “That was pretty much the last time I had a good night’s sleep.”

In a June 16 letter to CLU, CAT Executive Director Kim McCarty and Board Chair Claire Rudy Foster mapped out a “reduction in force” plan to take effect July 1. The plan, which would implement temporary layoffs for "all non-management staff and some managers" through September 1, sought to “continue offering [their] services to tenants in the state of Oregon,” “preserve CAT for the future,” and “create the least impact on staff and members.” 

CAT currently lists 23 staff members on its website. According to the letter from McCarty and Foster, only a handful of managerial staff would remain on board through July and August as a skeleton crew, meaning at least 17 employees would be laid off. In a June 29 bargaining meeting between CLU and CAT, McCarty said more managerial positions—including her own—would be impacted by layoffs or furloughs later, in August and September, but didn't offer more specification.

More recently, McCarty told union members about the possibility they could work part-time through at least July, and have Oregon’s Work Share program cover partial unemployment benefits for the rest of their wages. McCarty said CAT has been accepted into the Work Share program, but it's unclear whether CAT would be able to pay employee wages for 60% of their regular work hours—the amount necessary to qualify for Work Share.

“We don't know the answer to that,” McCarty said. “Are we betting that we will be able to? Yes.” 

The following day, however, McCarty seemed to rescind the Work Share offer, instead presenting a Memorandum of Agreement (MOA) that sets terms for all represented employees to be laid off as of the beginning of July.

"[It's] a typical strategy for any business when it knows it will not have any incoming cash to do some kind of layoff to give some relief until those funds are available," McCarty told CLU members during the June 29 bargaining meeting. 

CAT employees want better answers about the organization’s budget crisis and its plan for a path out of it. 

"This is my first time trying to bargain severances without having any clue at all about what money actually exists in the bank accounts and what doesn't," A.J. Mendoza, president of CWA Local 7901, told the Mercury. "I've never, ever been in a similar situation." 

Financial turmoil 

McCarty said the financial crisis was fueled largely by a lack of grant funds. 

“Shifting focus in the political or funding landscape can have a dramatic impact on the amount of funding any organization is given, regardless of their proven track record and vital service to the community,” she wrote in a June 22 letter to CAT members and partners. 

CAT is mainly funded through government contracts with Multnomah County, Washington County, Oregon Housing and Community Services (OHCS), Portland Water Bureau, and Portland Housing Bureau (PHB). Its most recent funding allocation from PHB for the current year was $447,000, according to the city.

The nonprofit also receives private funds from organizations like the Oregon Community Foundation and Meyer Memorial Trust.

CAT board documents depict the extent of the nonprofit’s financial crisis. A May board meeting packet showed the organization “does not have any new revenue confirmed for July 2023” with a budget outlook projecting CAT would be almost $300,000 in the red by the end of 2023. 

Board documents show CAT has been repeatedly denied anticipated funding from various sources, including a $340,000 grant from OHCS. It’s not clear exactly why the grants were denied, but employees say McCarty has attributed it in-part to insufficient documentation during the application process. 

The nonprofit has hired at least two financial consultants since the previous finance director retired at the beginning of the year, one of whom was let go after three weeks because he “wasn’t the best fit.” The organization has had a listing for the position up on its website since February. Board documents indicate the turnover has been a stressor for the organization and appears to have resulted in the dissolution of CAT’s lobbying arm. 

CAT Action lost its tax-exempt status and ceased operations earlier this year, blaming the finance director transition for a failure to file tax paperwork on time. 

Some CAT staffers feel like management hasn't taken accountability for the organization's financial issues.

“All we’ve heard from management is that the finances are screwed up. They weren’t taking any responsibility, it was like a natural disaster, like ‘these things happen'," one CAT staffer and CLU member who asked to stay anonymous told the Mercury. "No matter what the truth of the situation is, there is mismanagement and extreme incompetence. I just want to do this work, you know? This is a 27-year-old organization, and the community has come to expect certain things from us. Management doesn't seem too worried about throwing that all away."

Union disputes have lingered for three years

CAT employees began organizing a union in 2020, during a transition period after former executive director Katrina Holland left CAT to direct JOIN PDX. Holland was replaced by nonprofit consultant Danny Mankin, who served as interim executive director until Kim McCarty took over the role in October 2020. McCarty came to the position with over a decade of experience in the Portland Housing Bureau. 

“We felt the workers had less say in what was going on [during the transition period],” Albright, the membership manager who’s worked at CAT for over 10 years, told the Mercury. “After having been there for a while and being part of the organization in different roles, it had always been close knit…there was a culture shift and there was concern that it would continue and get worse if we didn’t do something in that transition to protect the workers’ rights going forward.” 

In May 2021, members of CLU went on strike due to “unfair labor practices” at CAT. Ahead of the strike, CLU members alleged CAT management was disciplining union supporters and people who criticized working conditions at the organization, which they said followed a pattern of anti-union behavior from leadership. 

“I was one of the people who was getting disciplinary actions…we felt what was going on was retaliation for organizing and bringing in the union,” Albright said. She called the ordeal “distressing,” adding that she and her colleagues were written up by management on accusations of harassment and bullying, though those allegations were later removed. 

While initial contract agreements for newly recognized unions typically take a year, the bargaining process between CAT and CLU has been going on for nearly three years now, which Mendoza said is “unheard of.” Mendoza bargains with other nonprofits through the CWA union, and he said CAT has demonstrated the most hostility toward a union he’s ever seen—which has been especially striking considering one of the nonprofit’s main purposes is to help tenants organize unions.

“I've never been in a similar circumstance,” Mendoza told the Mercury. “It kind of takes your breath away.” 

Community Impact

With CAT’s future uncertain, CLU members plan to continue bargaining down to the wire. But even if some employees are able to work reduced hours during July, an option CLU wants to keep on the table, the scope of the work CAT can do in the community will be limited. 

During a typical month, CAT takes several hundred calls on its tenant hotline and staffers participate in various community events to educate people about tenant organizing. Staff members are located throughout the state, with designated employees in Deschutes County and Southern Oregon, as well as the Portland Metro area. But the details of just how pared down CAT's work will be this summer are vague.

"We will be reducing some of our hotline hours and and we hope it'll be a nominal impact until we can start expanding back our programming," McCarty told the Mercury. 

Albright said she started working at CAT after she reached out to them for help when she had an infestation of rats in a house she was renting, and she is "heartbroken" to think that people won't be able to access the valuable resources the nonprofit provides. 

"I've seen how vital organizing is and how much of a difference it can make in people's ability to stay in housing," Albright said. 

But, whether or not they're employed at CAT, staffers say the work will continue. 

“I have forward facing relationships with folks and I am boots on the ground. It feels like an eviction, because they think I'm going to just put my head down and walk away from this situation,” Coya Crespin, CAT Portland Metro regional organizer, told the Mercury. “This work galvanizes me, and I will continue to do it. I'm still going to be here whether I get paid or not. I'm in the streets doing the work.”