Local nonprofits that missed an Iowa City funding deadline by minutes may have a second chance to be reconsidered.

After a request from the Iowa City City Council, the Housing and Community Development Commission will reconsider the Center for Worker Justice of Eastern Iowa (CWJ) and the Community and Family Resources’ Aid to Agencies applications after originally disqualifying them for being late.

While the current allocations of the $751,000 Aid to Agencies 2024 budget are only recommendations now, the council will approve the funding amounts following the approval of the fiscal 2024 budget in April or May.

Each year, the commission reviews and makes Aid to Agencies funding recommendations for Iowa City City Council authorization. Legacy agencies are awarded 95 percent of the available funds, and the rest is set aside for “emerging agencies.”

Legacy agencies, such as the CWJ and Community and Family Resources, received Aid to Agencies funding within the past five years. While funding is not guaranteed, the minimum amount of funding for a legacy agency is $15,000 each year for two consecutive years.

For fiscal 2024, the commission added three new emerging agencies to its list of eligible legacy agencies, including the CWJ. Community and Family Resources, formerly known as Prelude, was among the 18 pre-existing legacy agencies, which received $42,734 in Aid to Agencies funds in fiscal 2023.

Despite its first year being considered a legacy agency, the commission recommended the CWJ receive nothing because the organization’s application was timestamped at 5:17 p.m. — 17 minutes after the 5 p.m. deadline on Sept. 15, 2022.

Community and Family Resources, formerly known as Prelude, submitted its application shortly after the CWJ at 5:32 p.m.

According to a memorandum written by Iowa City City Manager Geoff Fruin and Neighborhood Services Coordinator Erika Kubly, staff did not originally exclude the late submissions out of recognition that both agencies experienced technical difficulties.

Commission board member Kaleb Beining said the commission decided to reject the two late applications due to concerns about fairness.

“We had concerns as a group at that immediate time, that it would not be fair to accept that late application with the others being forced to follow that rule that was stated on the application,” Beining said.

According to the commission’s minutes from its Jan. 19 meeting, Beining favored taking away the CWJ’s allocation to disperse to other agencies. All other commission members “were in favor of replenishing the Emerging Agency budget with the money remaining from the Center for Worker Justice.”

However, during their Feb. 21 work session, Iowa City City Council staff expressed their discomfort with the commission’s ruling.

“It seems to me to deny potential funding based on a technicality …  just doesn’t seem to be in the spirit of how these funds are supposed to be allocated and who they’re serving,” Mayor Pro Tem Megan Alter said.

Alter, who previously served on the commission from 2018 to 2021, expressed her appreciation for the commission but explained she did not think the disqualification was fair.

“I know this is a commission that takes its charge very seriously, and there’s a lot that goes into it,” Alter said. “But I do think that, in this case, this is an instance where I think looking at the criteria and what the legacy agencies are doing is something that is warranted here rather than technicalities.”

RELATED: Center for Worker Justice pays $20,000 in penalties, experiences issues with IRS

The Iowa City City Council agreed to advise the commission to dismiss the late technicality and to adjust its final recommendations. Mayor Bruce Teague was not present at the meeting.

Councilor Andrew Dunn stepped out of the discussion due to his affiliation with the CWJ as an employee.

Beining told the DI that he hadn’t heard of the council questioning the commissions decisions in the two years he’s served on the board.

“I can’t speak on an elongated historical basis,” Beining said. “It’s a very unusual thing that I’ve seen, but I do believe that it was done in good faith.”

City of Iowa City staff concerns

All staff determine funding amounts based on a scoring rubric, which ranks applications based on their need and priority, the impact and delivery of the proposed usage of funds, and evidence of financial and administrative capacities. The commission awarded the CWJ and Community and Family Resources received the lowest average scores of 52 on a scale of 100.

Although the timing of the applications ultimately disqualified the agencies, Kubly said staff had other concerns with the two applications.

Kubly said one of the reasons staff did not recommend funding for Community and Family Resources was because the proposed use of funds included facility repairs.

“We have other funds available for that,” Kubly said. “Knowing that there are more requests for funding than there is available in the budget, that’s one of our considerations, and also the full scoring of their project.”

For the CWJ city staff had concerns regarding the agency’s financial capacity and oversight, qualified, and did not feel additional need was demonstrated because the center has been receiving other funds through the American Rescue Plan Act.

In October 2022, the DI reported that the CWJ missed the tax filing deadline in both 2018 and 2019, which led to the nonprofit paying $20,000 in penalties. Further issues ensued because of miscommunication from the IRS that the organization’s 501(c)(3) nonprofit status was revoked.

The CWJ is under nonprofit status and filed its taxes on time in 2020, and Kubly said the news factored a role into the staff’s recommendations.

“As we were receiving these applications, there was a media that they had not filed their taxes,” Kubly explained. “I can’t remember the exact details, but they had not filed their taxes on time, and so that was one of the questions that came up as we were going through the application process.”

The commissions sudden consideration for the timeliness of applications frustrated acting CWJ Executive Director Mazahir Salih.

“I don’t think it’s fair because our application went through the process,” Salih said.

During the commission’s discussion of the funding in January, Salih said she was told the CWJ would receive $15,000 but was later informed that the organization would ultimately receive no funding.

Salih said she submitted the application minutes before the deadline, but the application would not upload. She described calling United Way Community Impact Funding Process, which receives the Aid to Agencies applications, and hearing that another organization was also experiencing difficulties at the same time she was.

Salih said she was grateful to have the CWJ’s application reconsidered without the late penalty.

“I think the CWJ is a safe hub for many, many Iowa City residents,” Salih said. “I think this will help them.”

The commission has yet to revisit the funding allocations but plans to do so at its next meeting on March 30.