Homer Senior Citizens Inc. board members at an April 16 meeting voted unanimously to pursue Chapter 11 bankruptcy, which would allow the nonprofit senior services organization to restructure its debt while continuing to operate. The move comes after the IRS last week levied funds from the senior center’s bank account to recoup unpaid payroll taxes. Both staff and board members said during the meeting that their goal is to protect the organization’s mission by reorganizing finances and creating a solid, workable operating budget, while still maintaining essential services for seniors.

The organization’s programs include assisted and independent living facilities, adult day services, meal deliveries and a community cafe.

In November, the Homer News reported the nonprofit was facing substantial debt from unpaid payroll taxes and invoices, following the exit of previous executive director, Keren Kelly. Kelly held the position for 13 years until she died in May 2024 after a cancer diagnosis.

Executive Director Sarah Weideman said in November that unpaid payroll taxes were estimated to be $643,000 and unpaid invoices were estimated at $350,000, with an additional $25,000 past due to the community of Homer.

Since November, the organization has been working with the IRS to find a solution that allows it to continue operating and serving residents and clients, Weideman told the board last week. On April 8, however, the IRS issued a $138,000 levy from the Homer Senior Citizens’ bank accounts to begin paying outstanding, unpaid employment taxes. The amount owed to the IRS is currently around $805,000, which could potentially rise to $1.2 million with penalties, Weideman said.

She said in an interview Monday that the financial troubles the organization is experiencing will force them to suspend its Adult Day Services program at the end of this month, due to high employee costs. For the nonprofit to meet biweekly payroll, they need to have at least $120,000 in the bank.

The levy, executed on April 13, wiped their accounts to a zero balance, although Weideman said on Monday that with the help of U.S. Sen. Dan Sullivan’s office they were able to connect with a manager at the IRS who helped release the monies, enabling them to make payroll. That money is now gone again, spent.

Weideman said that it was just a one-time levy, so they aren’t facing another unexpected transaction when they have to make payroll again. She said the organization has not yet received Medicaid waiver funding, creating an additional $60,000 deficit. Weideman said former ADS clients will be incorporated into the assisted living program.

Other financial issues

During the April board meeting, Weideman said large, monthly transfers were recently discovered, exceeding $13,000 a month and regularly made in 2023. Additionally, a credit card was found to be charged $30,000 monthly on a $19,000 credit limit. Both of the expenses were not put into the previous bookkeeping system, and not clearly documented, without specific details on what the funds were spent on or who they were sent to, according to Weideman.

She said they are working to investigate these transactions and determine where the money went, potentially seeking legal action if warranted.

In addition to the monthly transfers discovered, Weideman said they recently discovered an unknown, still active, credit card with at least 14 authorized users, some of which no longer work for the Homer senior center. The card is active and has a current balance of around $9,000.

The board passed a resolution to add Weideman and other board members as signers onto the credit card account, with the hope it will help them investigate potential fraud and gain access to the account details. The motion was unanimously approved by board members present.

Weideman said the board and staff are working with the bank to resolve the account’s status. On Monday, she said she has only received three months of statements for the card and is still trying to gain access to the full picture.

Moving forward

The April 16 meeting concluded with a motion to create and host a fundraising event at the Porcupine Theatre in coming months.

Weideman said Monday that the best way for community members to help the organization is through a financial donation. Donations to the 501(c)(3) nonprofit are tax deductible.

“Technically, the IRS can continue to take every single penny that we have until that debt is repaid,” she said. “If that’s the case, then we will have to shut down the entire facility. We can’t, we can’t do it. So, that’s the biggest thing right now, is we need donations so that we can pay the IRS and pay for food and keep the lights on.”

Weideman said volunteers could also help alleviate the workload of limited staff, either through helping support staff with maintenance tasks, hosting classes to engage residents, or volunteering in the kitchen and helping serve food. Prospective volunteers would need to be able and prepared to pass a standard background check. They can reach out by emailing info@homerseniors.com or by calling 235-7655.

A recording of the April 16 board meeting, previous meetings and supplemental documents including minutes and agendas are available on the organization’s website at homerseniors.org/board-meeting-documents. The next board meeting — their annual membership meeting — will be held May 15.

Reach reporter Chloe Pleznac at chloe.pleznac@homernews.com.