A merger between CTE, a private nonprofit that aids low-income families in lower Fairfield County, and its troubled counterpart in Norwalk has been delayed but is still in the works, according to the leaders of both agencies.
Since last year, CTE, which is based in the South End but also provides services to families and individuals in Greenwich and Darien, has been looking to become part of Norwalk Economic Opportunity Now.
The move to join with NEON, a larger organization with more resources, was seen as enabling CTE to maintain its current level of programs amid cuts to the Stamford agency's funding and decreased donations.
"We felt that in this economic environment, it was for the benefit of our customers to continue providing the quality of services they are used to," said E. Phillip McKain, CTE's president and CEO. "It made sense for the two of us to start talking."
McKain said he believed the creation of one large agency in the area would better meet both agencies' aim of assisting poor families in lower Fairfield County.
CTE's board of directors voted in favor of the merger last November, and a transition period was expected to take place between January and March.
But in recent months, NEON has been enveloped in a spiraling controversy that has upended its leadership.
In late January, federal regulators released the results of an audit that found NEON had mismanaged $406,434 in funding designated for its Head Start program.
Mann issued a news release suggesting the findings were due to problems with the agency's accounting practices rather than fraud. He said the audit did not indicate NEON used the funds for any purpose other than for its childcare operations.
Last Tuesday, her second day on the job, Wilson Pheanious confirmed NEON's commitment to joining with CTE.
"There's a great deal of work to be done, but we are absolutely looking forward to the merger," she said.
She said she is planning to make appointments with Mayor Michael Pavia and the members of Stamford's state legislative delegation to reassure them NEON is working to resolve its issues.
The merger would happen, she said, "as soon as reasonably possible."
McKain said the shake-up at NEON has not changed the minds of CTE's board members.
The name of the final entity, including its leadership, has not been determined. But McKain said he has assured the community and city officials that CTE will retain its identity. CTE's building on Woodland Avenue would remain known as the Lathon Wilder Community Center, he said.
One of several community action agencies in the state, CTE receives most of its funding from federal, state and local grants. According to McKain, the agency's budget is around $3.5 million. In addition to an after-school program that serves more than 70 children, the agency also assists adults in areas such as financial literacy, drug rehab and workforce development. CTE's building also houses Ferguson Library's South End branch.
McKain estimated the number of full-time and part-time employees at CTE is between 45 and 50. A merger, he said, would bring that total to around 43.
Established in 1964, the organization has served a blighted neighborhood that has undergone sweeping changes in recent years with the $3.5 million redevelopment of the South End.
In 2010, CTE partnered with Fairway to help the supermarket chain fill hundreds of openings at its new South End location. Companies such as Fairway, the South End developer Building and Land Technology, and longtime corporate neighbor Pitney Bowes have all been contributors to CTE, McKain said.
But in May 2011, a federal audit of CTE painted a bleak picture of its financial status. The report described the agency's financial viability as "uncertain" and cited "significant operating deficiencies." It also stated CTE had inappropriately spent $41,414 on fundraising activities, which is not permitted under the Community Services Block Grant program. CTE, however, has contested that finding.
Although it has no official say in the decision, the state Department of Social Services has supported the merger between CTE and NEON and committed up to $300,000 to help facilitate the process, according to DSS spokesman David Dearborn.
McKain acknowledged the waiting period might be longer than CTE expected. But he said he was still hopeful that there would be a positive outcome.
"I think there is an opportunity, if we can get both communities to come together, to create a model entity to meet the needs of the residents of lower Fairfield County," he said.
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