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Southwest Arkansas Development Council Ceases Operations

By Donna Potter, 07/25/17 5:37 PM

TEXARKANA – The Board of Directors of Southwest Arkansas Development Council, Inc., locally known as “SWADC” has announced that the non-profit Community Action Agency employing 166 individuals (across 12 counties – Miller, Hempstead, Nevada, Lafayette, Little River, Howard, Sevier, Dallas, Calhoun, Union, Ouachita and Columbia) will cease operations effective at the close of business Friday, July 21, 2017 after 48 years of continuous service to elderly and low income residents of Southwest Arkansas. “The emotional decision to close the Agency was reached with great difficulty, following years of declining revenues and steadily increasing operating costs,” stated Dick Tallman, Chairman of the Board of Directors. “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. The annually audited 501 (c) 3 non-profit organization has faced numerous challenges over the past 8-10 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,” stated 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.” Hired by the Board of Directors in August of 2015 following years of multiple setbacks, McPhaul confronted an Agency with no cash reserves, significant accounts payable, and a declining revenue stream. “A very difficult situation at best, and a herculean task at worst, we tried everything possible with very limited resources,” said McPhaul. “Unfunded, governmentally-mandated minimum wage increases also were a significant cost driver for us,” said McPhaul. “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 popular senior centers, the Board of Directors directed McPhaul to terminate the Agency’s contract with the Area Agency on Aging of Southwest Arkansas in October of 2016. Despite this cost saving initiative, “our revenues continued to decline to the point where continued operations were unsustainable,” said McPhaul. “The Agency will lay off all of its operations employees as of Friday,” said McPhaul. Those employees remaining will include “a few administrative employees” tasked with closing the widely spread 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,” said McPhaul. “However, this is a process that will take time to dispose of the Agency’s assets and collect all of its remaining accounts receivable.” He stated further that “all vendors will be contacted individually” to discuss account settlements. For additional information please contact: Dick Tallman, Chairman of the Board Southwest Arkansas Development Council, Inc. 3902 Sanderson Lane Texarkana, AR 71854 (870) 773-5504 James McPhaul, Executive Director Southwest Arkansas Development Council, Inc. 3902 Sanderson Lane Texarkana, AR 7185