An agency that helped the elderly and low-income residents for 48 years in 12 Southwest Arkansas counties was shuttered Friday.
The Board of Directors for Southwest Arkansas Development Council Inc. closed the nonprofit, community action agency effected at the close of business July 21 after 48 years of continuous service to Southwest Arkansas residents. It employed 166 people.
The council served 12 counties: Miller, Hempstead, Nevada, Lafayette, Little River, Howard, Sevier, Dallas, Calhoun, Union, Ouachita and Columbia.
"The emotional decision to close the agency was reached with great difficulty, following years of declining revenues and steadily increasing operating costs," said Dick Tallman, chairman of the board. "Despite tremendous effort and the dedication of its long-serving staff to save the agency-which included reductions in force, outsourcing of operations and multiple cost-saving initiatives-we simply did not have enough revenue to continue to operate.
"Multiple contacts to Arkansas legislators did not result in financial assistance. While each legislator contacted is aware of the circumstances affecting the agency, each indicated that no state funding is available within their respective budgets to alleviate the agency's financial crisis. Contacts to the governor's office similarly yielded no financial assistance for the agency."
Arkansas Sen. Jimmy Hickey Jr. of Texarkana, Ark., was contacted by the agency about a week before it closed.
The council asked for $150,000, he said.
"We've been in multiple conversations with the Department of Human Services to provide the services through other state government entities," Hickey said.
State Rep. Carol Dalby of District 1 serving Texarkana is also helping get the services covered.
"DHS will provide the medical transportation service. They got it up and running Monday," Dalby said. The medical transportation service transports elderly patients to physician appointments.
"We will work out solutions," Hickey said.
The annually audited 501(c)(3) nonprofit organization has faced challenges over the past 10 years, including the loss of several major programs.
"The loss of Southwest Arkansas' Head Start early education program, as well as the Department of Energy's Weatherization program several years ago, were primary among the causes of the agency's ultimate closure," said James McPhaul, executive director. "Coupled with changes to payment methods in its Medicaid-funded Non-Emergency Medical Transportation program, as well as increasing competition from for-profit entities in its Home Health Program, the agency could no longer afford to operate."
McPhaul, who was hired by the Board of Directors in August 2015, said he "confronted an agency with no cash reserves, significant accounts payable and declining revenue. A very difficult situation at best, and a herculean task at worst, we tried everything possible with very limited resources. Unfunded, governmentally-mandated minimum wage increases also were a significant cost for us. With no off-setting increases in our revenue stream, we found that we were unable to meet our ongoing responsibilities to our suppliers on a timely basis."
In an effort to curb losses associated with the operation of the agency's 17 senior centers, the board directed McPhaul to terminate the agency's contract with the Area Agency on Aging of Southwest Arkansas in October 2016.
"Despite this cost-saving initiative, our revenues continued to decline," making it impossible to stay open, McPhaul said.
On Friday, the agency laid off everyone except "a few administrative employees" tasked with closing the agency's facilities down and consolidating all of its remaining assets for eventual sale and disposition.
"It is important to note that SWADC will eventually meet all of its current financial obligations," McPhaul said. "However, this is a process that will take time to dispose of the agency's assets and collect all of its remaining accounts receivable."
Vendors will be contacted individually to discuss account settlements, he said.