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Multnomah County is withholding reimbursement to the shelter contractor Sunstone Way for the months of April, May and June while it completes a fiscal compliance review of the nonprofit’s spending.
Sunstone Way, formerly known as All Good Northwest, is in the final stages of an abrupt collapse, which first received public attention in March when WW reported that its former finance manager had sued the nonprofit for retaliation after she questioned spending decisions. Later that month, Sunstone Way announced it would cease operations, laying off all 175 staffers who worked at three pod villages and two homeless shelters it oversaw.
County officials say they had already scheduled a review of whether Sunstone Way complied with spending rules—but they tell WW pausing payment for three months of expenses is the only way the county can ensure it will recoup any misspent dollars, given that Sunstone is shutting down June 30.
“Pausing reimbursements is not typical, but it is necessary in this circumstance as this provider is closing down at the end of the current fiscal year,“ county spokesperson Julia Comnes tells WW. Under typical circumstances, she says, “the county has the ability to negotiate and recoup any funding identified as part of the financial compliance review. That’s not the case here, as Sunstone is shutting down at the end of the contract term, which is the primary reason for the pause as the county finalizes its review.”
Comnes says the county notified Sunstone Way on May 30 of the funds being withheld.
Oregon AFSCME, which represents the laid-off workers, sent a May 29 email to members warning that without county funds, Sunstone would not be able to pay severance and paid time off. Misha Litvak, president of AFSCME Local 1790, tells WW the union was close to signing a severance deal before learning it hinged on the county funds now in limbo. “It’s not entirely unexpected,” Litvak says, “but it is disappointing.”
Representatives of Sunstone Way did not respond to a request for comment.
