Community

San Marcos City Council pays off Together for a Cause Corporation’s private debt

source Sierra Martin

Together for a Cause, a local corporation, neglected to provide over $30,000 to three San Marcos hotels for a GAP Transitional Housing Program (GAP). The corporation claims it will pay the amount owed if they receive monetary support from the city. According to documents obtained through Open Records Request, the city council paid hotels $46,225 from general funds for Together for a Cause.

Chetna Patel and Aayush Nagar, owners of three hotels in San Marcos: The Classic Inn, the Budget Inn, and the Executive Inn, began working with nonprofits during COVID-19 to help provide shelter to individuals impacted by the pandemic or who have medical needs.

The hotels began working with Roland Saucedo, from Together for a Cause, in October 2020 to house homeless individuals who may have been displaced by the pandemic or contracted COVID-19.

Throughout the past year of working with Saucedo, the hotels have not received adequate payment for the hotel guests staying through the GAP program, have received misinformation, and expressed concern about the management of the program. 

Together for a Cause has applied to several grants through the city to receive funding but has not qualified due to their 501c3 status. 

Saucedo told hotel owners they would receive funding through the CDBG COVID-19 grant in September to pay the money owed to them, but Together for a Cause was denied the CDBG grant funding due to not having a current 501c3 status. According to the IRS, Together for a Cause has been approved as a nonprofit and tax-exempt 501c3 organization in the past but has not maintained its status.

According to the Texas Secretary of State Corporations Division, Albert Vargas, a board member for the organization, registered Together for a Cause as a corporation in August of 2012. Although the company has not maintained a 501c3 status, it is still operating as an active corporation.

On Sept. 7, 2021, the San Marcos City Council discussed providing funding to support Together for a Cause in an Executive Session. 

According to notes received through an open records request, the GAP program through hotels costs around $875 a day. The deal worked out with hotel owners costs about $45 a day for a single person and $60 for two people. Because Together for a Cause is a corporation, not a nonprofit, the organization is charged taxes on top of daily charges.

During the Executive Session, council members discussed how the cost of maintaining the program would be over $600,000 a year, and there are no other funding sources for the program.

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“This is taking a disappointing turn,” Councilmember Melissa Derrick said. “A program like this is vital until we get [the] needs assessment back and can begin to do some kind of transitional housing program that does not rely on motels because it’s way too expensive. Is there a way we can tell Roland this is only going to last 4.5 months by our estimations? So you need to keep that in mind as you’re taking in your clients, and it’s not sustainable for us to pay 700k a year for hotels?”

City Manager Bert Lumbreras doesn’t think that the program is sustainable and said that the city council has to decide whether to move forward with the Together for a Cause contract and handle the hotel costs.

Although city council members requested a completed contract of someone using the GAP services of Together for a Cause, council members were only given a blank contract to review during the executive session.

Carol Griffith, Housing and Community Development Manager, said the contract is behavioral and doesn’t fit the needs assessment of asking the homeless individuals how they ended up in the position and what they need to become self-sufficient.

According to Griffith, state law requires the city to fund no more than half of the organization’s funding, and the city’s legal team is looking into how it would apply in this case.

During the Executive Session, Mayor Jane Hughson also confirmed she had given donations to Together for a Cause for “at least $15,000.”

Lumbreras also admitted that Saucedo owes the hotel’s money and has collected income from various individuals and clients in the program. Council members can’t tell if the money collected has all been paid to the hotels.

Griffith said that the contract participants of the housing program require them to pay $1,000 a month, but there was no documentation as to where that money went.

The council members requested receipts from Together for a Cause but had not received them at the time of the executive session on Sept. 7.

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According to an open record request asking for any receipts or financial documentation provided by Together for a Cause to City Staff between Sept. 7 and Oct. 22, no documents fulfilled the request.

“The City has reviewed its files and has determined there are no responsive documents to your request during that time frame,” the open records request said.

Councilmember Alyssa Garza was not comfortable moving forward with the contract due to a lack of robust programming, financials, program framework, and a clear lack of foundation to manage funds. Garza was concerned about the city’s position if the hotels filed criminal charges against Roland Saucedo.

Garza also said she did not have enough information when she voted previously on giving funds to Together for a Cause.

“Seemed like we were just giving money to our buddies, we might have had rationale for the money we were suggesting, but I felt unprepared, and I let my personal bias and inexperience prevent me from making an objective decision,” Garza said in the notes.

Councilmember Shane Scott said he thought the idea of providing GAP housing was admirable, but Together for a Cause was not organized enough to support.

“But clearly it’s not working in a way like a business model I would look for,” Scott said. “The donations he has already accepted is indicative of what we could expect in the future, so I will have to be real cautious with this, or it will be a train wreck, so we need to watch it.”

Councilmember Maxfield Baker also seemed to be against supporting Saucedo, stating that the Mayor’s donations were well-intended but led to fraud perpetrated on the hoteliers.

“He is not organized enough to do that, and he has proven that already by being several months behind and frauding these people into thinking he had a nonprofit and he didn’t and that he would have the money in a specific time which he didn’t,” Maxfield said.

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Councilmember Derrick said she hopes the council would agree to fund 4.5 months so current homeless hotel guests can move into transitional housing and cut it off because it is “unsustainable.”

Council members voted on whether they should give Saucedo more time to develop documents and renew 501c3 status. Hughson and Councilmember Mark Gleason voted to give Together for a Cause more time, while all other council members voted against it.

According to the Executive Session notes, part of the CARES Act funding was put into the general funds for city council. Mayor Hughson said that City Manager Lumbreras is authorized to spend up to $50,000 without city council approval or being made an agenda item for a regular session meeting.

“I am saying we use [the] general fund to pay for the hotels, and it doesn’t have to come before us if it is less than [$50,000],” Hughson said.

City council members decided to pay the $50,000 directly to the hotels and give Saucedo two weeks to provide missing paperwork to council members.

According to Open Records Requests, the City of San Marcos paid a total of $46,225 to the three hotels to help cover the cost of the GAP program. The Best Budget Inn received $39,940, the Classic Inn received $2,355 and the Executive Inn received $3,930.

“We can still talk about Together for a Cause in 2 weeks to [figure] out what we will do going [forward], but we can certainly take care of the hotels that we had been housing our neighbors,” Hughson said. “And we can at least get that taken care of. It’s not like we are paying someone’s personal [bills]. We are paying the hotel.”

Mayor Hughson doesn’t see the city council’s contribution to Together for a Cause as bailing out a corporation but as supporting the hotels in their efforts to provide housing for homeless people with COVID-19.

Together for a Cause isn’t the only organization providing support to homeless individuals in San Marcos. The H.O.M.E. Center is also working with local hotels and providing temporary shelter while working on finding long-term solutions to improve their quality of life. 

Although city council members have created a temporary fix for the ongoing issue of providing housing to the homeless population in San Marcos, many questions remain unanswered. Will Together for a Cause be a sustainable solution? Will the city’s efforts to help the corporation end in a legal issue? And are there more reasonable, affordable, and reliable solutions to the city’s homeless problem?

Council members Baker, Garza, and Scott voted against providing more time and resources to Together for a Cause, while Mayor Hughson and councilmembers Derrick, Gleason, and  Saul Gonzales voted to approve.

Written by Sierra Martin

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