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After Hillsborough nonprofit loses millions in state funding, former executive keeps getting paid

TAMPA — After nine foster children died between 2009 and 2011 under the watch of Hillsborough Kids Inc., the embattled nonprofit was stripped of a $65 million state contract to protect the county’s most vulnerable children. On June 30, 2012, it closed its doors.

But the checks kept rolling in for its top executive.

In the three years after Hillsborough Kids shut down, the nonprofit paid out nearly a half-million dollars in salaries and other compensation. Most of it went to one employee, chief executive officer Karen Maziarz, even though she had already received a severance package and vacation payout of more than $110,000.

The organization, which eventually renamed itself NextGen Alliance, brought in very little revenue. Instead, Maziarz was largely paid out of Hillsborough Kids’ leftover reserves.

Her compensation totaled $184,938 in 2014 and $168,149 in 2015 — the vast majority of the organization’s expenses those years. NextGen Alliance finished in the red both years.

Maziarz said she “fully intended to move on” after Hillsborough Kids lost the foster care contract with the Florida Department of Children and Families. She said she remained on staff from June to October 2012 to help transition case files to the new provider, Eckerd Youth Alternative.

“I didn’t think it would have been as smooth for the children and the families if I hadn’t stayed on,” she said.

But when new board leadership took over last year and reviewed the organization’s financial documents, it found Maziarz’s salary out of line with nonprofits of similar size, said board president Monica Rosenthal-Sams. The board voted in January to cut her salary to $85,000 and eliminated a $5,000 annual bonus.

Now Rosenthal-Sams says it may be time for a fresh start. The organization wants to focus on preventing teen pregnancy and improving sexual health. The board will soon explore moving out from under the cloud of Hillsborough Kids and start a new nonprofit.

Without Maziarz as CEO?

“Without Karen as CEO,” Rosenthal-Sams said. “We are looking to move in a different direction.”

•••

Hillsborough Kids was formed in 1999. Three years later, it became the community’s homegrown provider of foster care after DCF moved to outsource those services.

But DCF pulled its contract with Hillsborough Kids in 2012 after at least nine children died over two years while under the supervision of subcontractors hired by the nonprofit. At the time, no other agency in Florida tasked with protecting at-risk youths reported as many deaths.

Victims included a 4-month-old boy who was beaten and thrown from a car on Interstate 275, a 5-month-old girl who was choked to death and an 18-month-old that walked into the path of a car and died.

In many of the cases, the victim was under state supervision because of reports of abuse, neglect or abandonment; the 18-month-old was previously found sleeping next to a loaded gun during a drug bust.

A local advisory board unanimously recommended changing providers, and Eckerd Youth Alternatives, which was already serving Pinellas and Pasco counties, eventually won the $65 million state contract.

Maziarz was promoted from chief financial officer to acting CEO of Hillsborough Kids after the previous leader, Jeff Rainey, resigned amid the turmoil. When it shuttered its building, she received an $85,931 severance and $28,000 for unused vacation and sick days in addition to her $170,000 base salary, according to federal tax returns.

Though Hillsborough Kids was closed and Maziarz had already received her severance, she continued to be paid a six-figure salary for the next three years.

Former board chairwoman Mary Ellen Gillette defended Maziarz’s salary. She said it was critical to keep her around during the turnover. Until recently, Hillsborough Kids still faced several lawsuits and Gillette said Maziarz helped oversee those settlements.

“Karen has worked her tail off,” Gillette said.

After Hillsborough Kids finalized the transfer of its cases to Eckerd, the nonprofit still had about $1.6 million in reserves -- a mix of donations, revenue from other contracts and seed money that stakeholders contributed to start the nonprofit. DCF confirmed that Hillsborough Kids properly returned all state funds.

The board asked Maziarz to stay on again to determine how it could use its remaining dollars to address poverty.

Maziarz said she was looking for work at that point but after she started surveying the community and looking for needs, “I got hooked. I became pretty passionate.” If that work had been outsourced, she said, it would have cost the organization more.

During that time, Hillsborough Kids changed it’s name. It became “NextGen Alliance” in 2013 and soon adopted a mission of preventing teen pregnancies. Maziarz, who started at Hillsborough Kids in 2005, remained CEO and some board members initially stayed on.

The organization conducted a county survey and focus groups on teen pregnancy issues that will help shape its direction and the services they provide. More recently, it launched Facebook and Twitter accounts with a combined 34 followers. Its website is largely blank save for a logo, its address and a phone number.

Under its new name the nonprofit started to receive taxpayer money again.

In March 2014, the Hillsborough County Children’s Board gave NextGen Alliance $5,000 to develop a strategic plan and later $16,825 to “engage the public on teen pregnancy and sexual health of teens.”

But the new income was a fraction of what the organization was spending. Across three years, the organization brought in $39,000 and spent $599,000. The top expense was always Maziarz’s salary.

“At the time, I don’t think we were thinking how her salary might look to an objective eye at the end of June 2016,” said Steve Freedman, a local doctor who until recently served on NextGen’s board. “It was all about having somebody to lead that transition and make the remaining resources valuable to the community.”

•••

A pediatrician by trade, Rosenthal-Sams said she didn’t have a background in board management when she took over as president in 2015. But she quickly dove into NextGen’s materials and day-to-day operations.

She discovered a host of issues that needed to be addressed.

There was no board manual. She had to rewrite the CEO evaluation. Several board members left during the transition and she had to find new recruits whose expertise matched the new mission.

Any policies in place were a holdover from Hillsborough Kids, a massive organization that had a $7.8 million payroll and didn’t fit NextGen Alliance, which she said was basically a startup.

It was during this review that Rosenthal-Sams determined that Maziarz’s salary needed adjusting.

“I’m not blaming anybody, but I didn’t have anything to go off other than what was given from Hillsborough Kids,” she said. “And I now have an amazing board that... walked in and helped me see a clearer picture. And that’s when the transition happened.”

Maziarz accepted the lower salary — “It was a business decision that had to be done,” she said — but Rosenthal-Sams said the board will explore searching for a new CEO that has an “expertise in the epidemiology of teen pregnancy, the passion and drive to attack it and also has experience in grant writing.”

With its legal disputes and other residual issues resolved and a new mission, it may be time to dissolve the nonprofit formally known as Hillsborough Kids, Inc., she said.

“The old board and the new board, we have tried our very best to move in the direction of providing services for the community,” Rosenthal-Sams said. “We’ve exhausted what we can do with this current organization.”

Contact Steve Contorno at scontorno@tampabay.com. Follow @scontorno on Twitter.

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