YMCA Un-Answered Questions

ymcaYMCA Questions    November 21, 2013 8:01 AM
From:  “Ted Noftall” <Ted@TedNoftall.com>
To:   “Greg Kisela” <gkisela@port-orange.org> “Robin Fenwick”
Greg,
In my capacity as a member of the A&B Advisory Board I have attempted to maintain an objective dialogue regarding the Volusia/Flagler YMCA’s  ( Parent Y )  proposal to invest upwards of $1.8 million of taxpayer funds in an expansion and refurbishment of the  Port Orange Branch Y
Questions posed by A&B members, while pointed,  ave provided the Parent Y the opportunity to refute a  strong sense of concern that their proposal is simply not financially viable.  Their responses to date for the most part  have been confusing, incomplete and frequently in contradiction with what they themselves have said previously.
Accordingly the questions below, and especially numbers 5 and 6 dealing with cash flow challenges and dwindling cash reserves,  deserve  written responses  along with the materials requested in that regard.  You may remember the Parent Y’s board Chairman  John  Meneough addressed these questions by supplying what I remember to be several of their Board meeting  agendas absent any minutes taken or lender correspondence exchanged.  Mr. Meneough disclosed little else of substance regarding any formal  arrangements  or actions taken to ensure sufficient cash flows  are received to sustain the Parent Y,  And He Needs To Do So, particular in light of news reports suggesting capital expansion plans in other municipalities and whether those expansions will  trigger increased debt obligations by the Parent Y.
Spending taxpayer monies, and advising those charged with spending taxpayer monies as is the mandate of the A&B advisory Board, is a serious matter deserving of both thoughtful analysis  and thoughtful answers to questions posed.  Pulpiteering  that   non-profits always find a way to survive is not only factually in-correct, it is in no way an acceptable alternative to considered analysis.
For the  Parent  Y’s CFO to acknowledge at our last meeting  that the 09-30-13  interim financial statements  were in error,  ( as was the case with the 07-31-13 interim financials supplied earlier )  and not  have supplied corrected financials some 10 days later  is not the  action I would expect from an entity presenting  a financial proposal to what in essence might be considered a loan review board.
Accordingly I would ask you to again address the information the Parent Y  has been supplying , AND obtain a written analysis to the following additional question.
7)   How much money ( and on what items )  has the Parent Y reinvested in the Port Orange Branch Y for the first 9 months of Fiscal 2013 and for each of the 3 previous Fiscal years.
 
Thanks for your assistance here Greg.
 
Ted Noftall


 
—–Original Message—–
From: Kisela, Greg [mailto:gkisela@port-orange.org]
Sent: Friday, November 08, 2013 3:39 PM
To: Ted Noftall
Cc: Fenwick, Robin; Teresa Rogers (trogers@vfymca.org); John Meneough (johnmeneough@aol.com) (johnmeneough@aol.com); Teresa Rogers (trogers@vfymca.org)
Subject: RE: YMCA Questions
 
Ted: By copy of this e-mail I am asking Teresa Rogers to provide the requested information.   Teresa and I spoke this morning and she is checking with John Meneough, Chair of the Family YMCA, on the availability and production of the minutes.  John is out of the area this weekend so it will be Monday before she can respond to the request for the minutes.
 
Greg Kisela
City Manager


From: Ted Noftall [mailto:Ted@TedNoftall.com]
Sent: Friday, November 08, 2013 10:28 AM
To: ‘Kisela, Greg’
Cc: ‘Fenwick, Robin’
Subject: YMCA Questions
 
@ Robin,
Would you please ensure  A&B members are updated on YMCA requests and production.
 
@ Greg,
Would you be able to provide answers to the following questions regarding  the financial information recently provided by the Volusia/Flagler Family YMCA Inc.[ parent Y ]       It is important A&B members receive these clarifications and others they may have in time to consider  same prior to  Monday evening’s A&B meeting.  It was for  exactly this reason I requested I know you tried to have the  parent  Y provide their revised  numbers  weeks ago.
1)     The  2013 Proforma    and the 2013  Budget   for the Port Orange branch Y differ widely.
Can you clarify why,  with  year to date net operating income  not meeting ytd Budget  with ¾ of the year over,   the  Proforma  noi   is still  being  presented as 75%  over the  Budgeted  noi.
2)  While the revenue projections in the 9 year Proforma’s  have been adjusted downward in the 10-16-2013 revision,  expenses have been adjusted downward even further,   such that  the 9 year projection has shifted from a cumulative loss of   $ (475,076)  to cumulative income of  $ 422,815
Can you provide the necessary explanations for the  assumptions being made here ?
3)  The Land Sale narrative and the  revised Proforma supplied for the Port Orange branch Y  are not in agreement regarding continuing debt service payments.     Which needs to be revised ?
4)   The 12/31/2012 Audited Financial statements indicate cash on hand at that date to be  $603,447
The 09/30/2013  interim financial statements  indicate that cash on hand beginning of year (01/01/2013) to be $297,681
Can you explain that difference and have  the 09/30/2013 Statement of Cash  Flows revised if required ?
5)  Has the  steep decline in cash position of the Volusia/ Flagler YMCA from over $5 million at the end of 2008 to just over $ 600,000 at the end of 2012 and just over $ 275,000  at the end of September 2013  been discussed by that entity’s Directors and Lenders.  Are minutes or correspondence available regarding these discussions ?.
6)  As all but $25,000 of the parent Y’s existing $250,000 line of credit has been drawn down,   Does this  entity have additional  borrowing capacity arranged  that will provide for its continued existence?
Thank you
 
Ted Noftall

2 thoughts on “YMCA Un-Answered Questions

  • November 22, 2013 at 8:44 am
    Permalink

    Ted:
    Can you clarify what you mean by “reinvested”?
    Greg Kisela
    City Manager

    Reply
  • November 22, 2013 at 8:47 am
    Permalink

    Ted
    Greg,
    By “reinvested” I mean how much has the Parent Y spent on those items for which they are responsible under their lease over the past 3 years and 9 months.
    Section 3.2 of the original 1989 lease states “….. YMCA shall be furnish the necessary office equipment, nautilus equipment, free weights and sporting equipment, etc. All such equipment or additional facilities and material will be new and of modern design and safety features, and of first class material. YMCA agrees to maintain said equipment in a safe, sanitary and neat condition, and in accordance with applicable standards at all times.”
    I am having great difficulty understanding why it is seemingly tolerable for pictures and stories of broken machines and inappropriately sized aquatic equipment, and explanations of newer machines with a smaller footprint equipment that if purchased would allow for a greater number of machines in a given space and thus cut down on waiting lines and times, to be freely making the rounds – WHEN SUCH EXPENDITURES ARE THE RESPONSIBILITY OF THE PARENT Y.
    Surely it cannot be for lack of funds because over the past 3 years and 9 months the Port Orange y has contributed $ 1,318,390 to the Parent Y’s administration in Deland, AND it is perfectly logical to assume a reasonable portion of that amount would be expected to be “reinvested” in new equipment, etc in the Port Orange Y.
    If you have not done the necessary research to advise Counsel regarding options to have a lower cost operator than the Volusia/Flagler YMCA run the Port Orange Y I would suggest you do so immediately. Paying anyone $1.3 million to operate the Port Orange Y for the past 3 years and 9 months is obscene considering the City paid Kemper Sports $ 325,000 over the same period to operate the Cypress Head Golf Club.
    We are talking about a low hanging $1 million dollars over 3 years that could be invested in Port Orange instead of subsidizing a bloated Deland bureaucracy, for no good reason!!
    Ted

    Reply

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