Open Letter: Why Are We Even Contemplating Giving $70 M+ To The YMCA?

Dear City Council, MLA de Jong, Mr. Butz and Abbotsford residents,

Abbotsford taxpayers have recently tried to engage in a decision making process that may eventually lead to the approval of a 70+- million dollar* tax gift to the YMCA for a subsidized recreational building that will compete with services already made available by local private and/or public service providers.

The City has been unhelpful in providing clarity and full disclosure.

The YMCA has been equally unhelpful. It prefers to talk only about it’s willingness to “invest in Abbotsford.” It claims to have based that decision on hard research but doggedly resists sharing the data it relied on to make its many controversial claims. That lack of transparency has led many to question the legitimacy of its research analysis.

The overall effect has left our community craning its neck to see what kind of toxic freight is being railed through the haze, into our midst.

Those critical shortcomings have caused many concerned folks to do their own research. The resultant discoveries are alarming:

1. Abbotsford has one of the highest property tax mill rates in the Lower Mainland. Those high rates are directly linked to Abbotsford’s previous City Council, which made capital expenditure decisions based on data analysis that proved to be grossly inaccurate. Abbotsford constituents now look to Council to distinguish themselves from the past bad decisions made under George Peary’s leadership.

2. YMCA’s narrative appears to suggest that we are imperiled and that it is the solution to our social well-being. Contrary to YMCA claims, our community has dedicated social services that are run by committed professionals who are highly trained and who have for decades actively met our community’s needs (even while they are purposely underfunded by our governments). It is an affront to the men and women who dedicated their lives to help the underprivileged to suggest that we are in peril in the absence of YMCA. That it will somehow make everything substantively better.

3. YMCA’s narrative appears to suggest that we are imperiled and that it is the solution to our physical well-being. Contrary to what we are being told by Council, Abbotsford currently has substantial capacity available at various diverse local fitness centers. Local fitness centers were surveyed and report the following membership availability in Abbotsford:

• Great West: has capacity for an additional 1500 members

• Apollo: has capacity for an additional 2500 members

• VRC: has capacity for an additional 1000-1500 members

• Good Life: has capacity for an additional 2000 members

• She’s Fit: has capacity for an additional 500 members

I believe that on average 12% of the population have gym memberships. If accurate, those percentages suggest Abbotsford’s population would equate to 16,000 memberships. Based on those numbers, with just 5 clubs, Abbotsford would have additional room for 50% of the overall usage required by the City. These calculations do not even consider ARC and MRC capacity.

A tax-subsidized YMCA will unfairly enable it to threaten the viability of those locally established fitness centers. Put differently, if all private fitness centers were equally subsidized by our tax dollars, they’d all be capable of providing finer, less expensive, memberships.

Many reasonable folks wonder why a 6 billion dollar charity is privileged to such grand taxpayer entitlements at the expense of existent services? What is going on?

4. Research has revealed that the value of the proposed tax giveaway is likely closer to 70 million dollars rather than the “official” 17.5 million value currently in the public domain. *70+- million dollar is the aggregate estimated value of the proposed taxpayer gift to the YMCA. The YMCA and Abbotsford City Council could have simply refuted those estimates but have instead refused to answer specific questions that would have either confirmed or denied those estimates. That lack of forthright transparency leads many reasonable constituents to conclude that that value is approximately accurate.

5. Research has discovered “YMCA Capital Development Planning Manual ©, KEY PLANNING STEPS FOR THE 21st CENTURY” (154 pages). This key capital-planning manual was prepared by NETZEL ASSOCIATES, INC. for YMCA of the USA. Communities targeted by YMCA could not be faulted for concluding that the document’s agenda is solely focused on a relatively singular strategy designed to discover and extract capital for its expansionist building goals. Their “Mission” appears to be only one of the subservient tools used to achieve that outcome:

CONDUCT A GOAL FEASIBILITY STUDY

…Simply said, a goal feasibility study is an objective means to help a YMCA secure a realistic answer to this question: “Does it have the potential and capability to raise X amount of dollars, for Y purpose, in Z amount of time, from its philanthropic constituencies?”

The YMCA may have legitimate and pressing financial needs which, in theory, could be met by a capital campaign. However, the fact that such needs exist is no assurance that the funds desired are available from its philanthropic market.

The feasibility study, essentially, tests that market to determine its degree of receptivity to provide the moneys needed. (p 8.1) (see web link: http://www.ymca.int/fileadmin/library/3_Resource%20Mobilization/2_Campaigns/Capital%20Campaign%20Manual%20(YUSA).pdf)

As noted above, the YMCA’s frequently referred to, but unavailable, “research” is based on a feasibility (development) study. That “study” has a multi-purpose agenda. Significantly, the “study” process doubles as a vehicle which YMCA uses to, a) presell the project’s benefits to the targeted community even before that community knows what it is being asked to buy; b) convert the targeted community’s key leadership in support; b) pre-fundraise the project’s costs:

Additional Benefits of a Feasibility Study

There are some “hidden” values in a goal feasibility study. The study should also:

• Helps pre-sell the campaign—i.e., it informs those being interviewed about the

YMCA’s plans.

• Helps strengthen relationships—especially in the event someone being interviewed

has not been a particularly strong booster of the YMCA.

• Makes new friends—if for no other reason than individuals being asked for their

opinions.

• Helps mend fences (in the event someone being interviewed might not have been

a particularly strong YMCA booster).

• Helps raise sights of everyone—underscores the fact that this will not be a “business

as usual” kind of campaign, particularly in terms of the size of gifts which

will be required.

• Helps focus attention on the YMCA’s needs—and to establish clearer priorities.

• Serves as a process for change—helps people adjust to new ideas and, at the very

least, feel that they had a chance to give meaningful input on key decisions.

• Identifies new prospects (and, sometimes, new ideas).

• Helps as a process for change (help people adjust to new ideas and plans regarding

the work of the YMCA). (P 8.2)

The outcome of that study becomes the YMCA’s “Case for Support” narrative. Unfortunately for Abbotsford taxpayers, that sales-narrative is at odds with this community’s realities on the ground and this community’s expressed concerns. Making matters worse, YMCA’s sales narrative appears studiously evasive. Taxpayers wonder why. What are the facts driving the actual narrative? Taxpayers have a growing list of legitimate reasons for mistrusting that “official” narrative. They are left with the impression that as-yet-unknown-agendas may be driving the real story.

And, so they wonder & worry about why no one appears willing to give honest, clear answers to the many legitimate concerns being expressed?

6. Abbotsford’s taxpayers’ requests for full disclosure have been met with equivocation and/or silence. This community expects answers to unanswered questions because it is liable for paying the bills at the end of the day. We seek assurances that Council will not repeat the past:

-The Plan “A” fiasco put taxpayers on notice that Council’s decision-making process was badly flawed

-Likewise, Abbotsford’s new P-3 Hospital cost taxpayers $449 million dollars rather than the $356 million dollars taxpayers were promised. Taxpayers noticed the misleading guidance and the $93+- million dollar overrun.

-Abbotsford’s proposed “Stave Lake Water Project” avoided repeating the same fiscal pratfalls simply by virtue of the fact that taxpayers were allowed a role in the decision making process: that referendum cost taxpayers $370,000.

-Abbotsford has yet to account for its unusual appropriation of taxpayers’ DCC funds (see web link: http://www.abbotsfordtoday.ca/wp-content/uploads/2012/10/Pipe-Interior-e1359518054486.jpg)

– The YMCA’s current request for tax entitlements for a questionable building project now challenges some of the same Councilors. Will they decline that imprudent request? Taxpayers have reason to worry that Council has not yet been wizened by the hard earned lessons listed above.

For these reasons, taxpayers continue to ask questions and worry that they have not received full disclosure

Research has shown that our community is one of many to experience YMCA’s underbelly. I’ve enclosed a series of six “Muncie Voice” articles written by reporter Todd Smekens from Muncie, Indiana. Those articles outline Muncie’s experience with YMCA. Muncie’s narrative serves as a cautionary tale for this community.

The City of Muncie, Delaware County in east central Indiana, has a population of 118,769 as of 2010.

The “Muncie Voice” publications expose much of what still remain hidden in Abbotsford. They are a must read.

Finally, I’ve enclosed the local community perspective as expressed by Freedom Foundation of Minnesota from White Bear City & Greater St. Paul, Minnesota (see copy of full text at the bottom of this page, ‘Y Expansion Has Some Taxpayers Asking “Why?”’

The latest multi-million dollar Y expansion project on the drawing board in White Bear Lake, however, has raised new concerns about whether cities already reeling from revenue shortfalls can afford to do business with the nonprofit. And it’s not only the city’s bottom line that has critics questioning another hefty taxpayer subsidy and calling for a voter referendum.

The YMCA of Greater St. Paul and YMCA of Metropolitan Minneapolis reported a combined $154 million in net assets and $9.5 million in revenue above operating expenses for 2008, according to audit statements filed at www.ymcatwincities.org. Individually, the YMCA of Greater St. Paul reported earning $1,044,322 above operating expenses and $52,360,576 in net assets, while the YMCA of Metropolitan Minneapolis reported earning $8,912,328 in revenue above operating expenses and $101,862,216 in net assets on the books. The two YMCAs listed a combined $16.3 million in revenue above operating expenses in 2007.

Financial disclosure 990 forms also posted on line reveal executive compensation packages in 2007 totaling more than $300,000 each for Greater St. Paul YMCA President and CEO Thomas Brinsko ($306,000) and YMCA Metropolitan Minneapolis President and CEO Harold Mezille ($333,000). In addition, sixteen staff members earned more than $100,000 in total compensation in 2007 at the Greater St. Paul and Metropolitan Minneapolis Ys.

Despite a relatively healthy bottom line, the YMCA of Greater St. Paul has proposed that taxpayers cover the lion’s share–$5 million of the $6 million construction costs for the expansion of its White Bear Lake facility, while offering to raise $1 million in contributions to make up the difference. (highlight mine)

If Council is unable to say “No” to YMCA’s request for entitlement, then I respectfully ask that it hold a referendum on the issue and let it’s constituents’ decide.

I look forward to your early response.

Sincerely,

Walter Neufeld

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YMCA – Profit or Non-Profit?

Published on January 16th, 2012 | by Todd Smekens

Web Page link: http://muncievoice.com/2429/ymca-profit-or-non-profit/

[This is Part I of a series of articles addressing the local Muncie Family YMCA – does it operate like a for-profit or charity non-profit]

As Muncie Voice has published in recent weeks, the health and wellness of Delaware County citizens ranks near the bottom of at least three well-known health indicators. Our rankings are some of the worst in the state, and Indiana falls in the bottom quartile across the nation.

With healthcare reform underway, and national obesity reaching all time highs, the coming decade will focus on personal and community health and wellness. Corporate relocation experts consider wellness indicators when determining locations for expansion and costs of health insurance, so expect this subject to be more newsworthy in 2012.

Corporations are also exploring wellness strategies and establishing work site fitness facilities making it more convenient for employees as they look to make our workforce healthier to offset rising healthcare costs and insurance premiums.

Our public sector is seeking ways to cut healthcare costs since they are also a large employer. Soon, our countries healthcare system will focus on prevention and personal wellness versus hospital visits and reimbursement rates.

For example, Delaware County employees will benefit from their own fitness facility in the location recently vacated by emergency management services. Muncie Voice will tour those facilities next week, and speak with their wellness coordinator.

One organization, which receives taxpayer subsidies in the form of its tax exempt status, is the Muncie Family YMCA headed by CEO Cathy Clark, and an executive board of directors. The YMCA is a non-profit 501c(3) charity organization with a mission of, “To put Christian principles into practice through programs that build healthy spirit, mind and body for all.”

As our local health has declined, you would expect this charity organization to become a leader of wellness campaigns and expand their programming into those areas which need it most – our southern and eastern portions of the city. Most philanthropists would expect that charitable organizations be located where they can make the most impact.

Instead, the Muncie Family YMCA, and it’s board of directors, has reduced its reach in south Muncie, and offers no programming assistance to Buley or Ross. However, they did open a second facility in Northwest Delaware County, one of our most affluent areas. The Northwest YMCA already serves this area, but a second YMCA opened in Yorktown during 2010.

Why would a charitable organization, whose mission is to improve the health and wellness of those who cannot afford services, be locating into our most influential neighborhoods? Why are county taxpayers subsidizing YMCA health club members in Yorktown, when the demographics of that area indicates they should be able to afford full priced memberships at a health club?

It might be good business practice to locate a fitness facility near more affluent populations, but the YMCA is a charitable organization, not a business. Correct?

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YMCA – Profit, or Non-Profit (Part 2)

Published on January 18th, 2012 | by Todd Smekens

Web Page link: http://muncievoice.com/2577/ymca-profit-or-non-profit-part-2/

[This is Part 2 of a series of articles questioning the tax exempt status of the YMCA.

As stated in the previous article, the Muncie Family YMCA closed its fitness center in the Southway Shopping Center at the end of 2010 while opening a new fitness center in Yorktown earlier that same year. According to newspaper accounts, and recent discussions with several executive board members, the primary reason for closing the south YMCA branch was due to the lack of members attending their facility.They analyzed their business decision for months.

However, one month after the closure, or in December of 2010, several community members were shown YMCA branch reports revealing the south YMCA had over 600 members. Most fitness centers would be happy to have that many members.

Local Gannett reporter Ivy Farguheson interviewed Cathy Clark for her November 10, 2010 article and wrote, “The attendance was declining at the center from 120 to 50 per day…closing the branch was a difficult decision for the board.”

Ms. Farguheson is adept at fitness, and I wonder why she didn’t ask about the age of equipment and the Y’s attempts at attracting more members to use the facility. While visiting the branch the day before the December closure, I asked a YMCA staff member, “Has the YMCA purchased any new equipment for this facility since you worked here?” She said, “No, and it’s pretty old.”

In fact, the equipment provided by the YMCA was the same leased equipment from 2003 when the YMCA took over Midwest Health Strategies physical rehabilitation space.

Who knows when it was purchased, but I would guess vintage 1999, or older. From personally being a YMCA member in 2006, it was exactly the same equipment. Not one new piece of equipment was purchased, or leased, by the YMCA in the seven years it operated the facility. Does this communicate a commitment to really help the south side of Muncie improve their health and wellness?

Most industry experts know that offering state of the art equipment is essential for retaining existing members and attracting new ones. How was the new YMCA equipped that opened in Yorktown earlier in 2010 – do you think the YMCA equipped it with old, worn out equipment?

Of course not.

The obvious question would be, “For the same membership dollar, why should members on the south side of Muncie have to exercise with decade old equipment, while members in more affluent areas like Northwest and Yorktown get newer, more expensive equipment?

Providing upgraded equipment, offering child watch services, and programming in the south location might have made a positive impact on the surrounding community and aligned better with the YMCA’s mission – “To put Christian principles into practice through programs that build healthy spirit, mind and body for all.”

To conclude Part 2 of the YMCA – Profit, or Non-Profit?, let’s share the Y’s core values as written on their website, and posted in their branches:

-Caring

-Respect

-Honesty

-Responsibility

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YMCA – Profit, or Non-Profit? (Part 3)

Published on January 22nd, 2012 | by Todd Smekens

Web Page link: http://muncievoice.com/2679/ymca-profit-non-profit-part-3/

(This is Part 3 of a series of articles questioning the tax exempt status of the YMCA.)

In Part 2, we discussed the closing of the YMCA’s Southway Shopping Center site in December, 2010. While the executive board pondered the business decision, nobody from YMCA leadership was seeking community advice from the shopping center owners, their real estate agents, or south side redevelopment members. In fact, the shopping center owners learned of the closing when they read about it in the November newspaper article.

Ingrid Mercado, a YMCA staff member at the Southway center told a Muncie StarPress reporter, “I’ve heard some people say that (they were unaware the South Y’s existence), but we’ve been here for a while and it’s still a social and physical outlet for many people,” Mercado said.

In recent discussions with executive board members of the YMCA, they indicated that they analyzed the declining attendance for months, and made a “business decision” to close the facility. When reaching the “business decision” to close the south side location, CEO Cathy Clark notified the newspaper, and gave members 30 days notice.

When the executive committee was asked why they didn’t tell the center’s owners, the board president said, “We didn’t have to, we sublet the property from the hospital and had no obligation to inform the shopping center owners.”

When a core part of your mission is building strong communities, why not contact the shopping center owners and tell them you are finding it difficult to make a profit? Why not ask them for assistance? Why not seek feedback from the surrounding neighbors? Were surveys taken of Y members asking them how the Y could better improve the south Muncie location?

We’re not advocating for financial irresponsibility, but when you’re receiving taxpayer subsidies to run your organization, and your mission is to build strong communities, a stronger effort would seem warranted before closing your branch. It would have proven beneficial for managing public perceptions.

Based on this lack of community involvement, the Muncie Family YMCA must have analyzed the branch operations as a pure business decision. Membership revenues versus center expenses. That sounds like a business decision, not the decision-making process of a charitable organization with a mission of building strong communities.

When the YMCA added its facility to the Yorktown community in 2010, the Town of Yorktown purchased equipment for the new facility. Did the CEO of the Muncie Family YMCA, Cathy Clark, make every attempt to improve the south side branch by exploring grants available to equip the center with newer equipment to help attract new members and make a positive impact on an area of town which needs the most help? Were proposals made to the City of Muncie, or Delaware County?

We verified with both City and County that no proposals were made by the YMCA.

While senior leadership of the YMCA chose to abandon the south side of Muncie, one of their executive board members and senior staff were exploring a new YMCA facility with a multimillion dollar water park project at Tuhey Park with a majority of the funding to be provided by the citizens of Muncie and Delaware County.

We will discuss the Tuhey project in part 4 of this series, and introduce existing Internal Revenue Service policies governing charitable organizations that derive income from unrelated business practices, or in the case of the YMCA, their fitness club memberships.

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YMCA, Profit or Non-Profit (Part 4)

Published on January 30th, 2012 | by Todd Smekens

Web Page link: http://muncievoice.com/2770/ymca-profit-or-non-profit-part-4/

(This is Part 4 of a series of articles questioning the tax exempt status of the YMCA.)

When you discuss the YMCA, you get plenty of feedback from community members. The talking points are the Y helps kids and poor people who cannot afford memberships. One of the Y’s members in Yorktown was quick to point out that the Y uses their profits to help the poor. When asked how many free memberships the Y has handed out to poor members in Yorktown, he referred us to the Downtown branch. It’s called “talking points” which refers to common parroted lines used over and over again lacking any real substance.

These talking points have been used for years to keep people from asking why the YMCA receives tax exemption from health club memberships. Another classic defense is their camp sends many disadvantaged kids from Delaware County to Camp Crosley to experience the great outdoors. However, the number of kids who can afford to go are minimal, and it barely makes an impact on Delaware County youth.

The facts are that the Muncie Family YMCA is a fitness facility like Anytime Fitness, Lifetime Fitness, and Cardinal Fitness. There is no difference. They are in the business to make money from buying equipment, setting it up in their facilities, and then selling memberships to people who want to use it. Not sure about Anytime Fitness, but the CEO of the Muncie Family YMCA makes $125,000 in annual salary plus benefits and a substantial benefit package, so it’s a lucrative business.

Even though they abandoned their affiliation with the Christian heritage last year to become more inclusive, when asked, their executive board members quickly brought up their Christian values.

However, a member of the YMCA saw the newly hired Cathy Clark, CEO from Ohio, remove the painting of Jesus Christ that stood over the entrance in the downtown foyer, and threw it into the dumpster behind the downtown branch. An employee had retrieved the painting and hid it behind his desk by the basketball court. He was ashamed for her action, and said he hid it, to keep from being fired for retrieving it.

Later in her tenure, the same CEO, was challenged for her child watch practices at the downtown YMCA branch, and pointed out that their policies were violating both corporate YMCA guidelines, and state recommendations. What was the response of Ms. Clark, and her board of directors? Ban the member and his entire family from using the Muncie Family YMCA. An entire board of community members supported that decision based on two peoples recommendation.

Did they modify their child watch practices? No. They banned the member’s family for causing problems. How does that support Christian values, or any kind of corporate ethics?

Even though they receive operating funds from a $5 million dollar endowment, the YMCA leadership made no effort to assist the community centers at Buley or Ross. As a community, we grant their tax exemption so they can pursue health and wellness and support our residents. Instead, they have located branches in affluent areas, avoid helping our depressed areas that need it most, and ban members for challenging unsafe and unprotected child watch areas.

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YMCA Should Fund Community Wellness Programs

Published on April 9th, 2012 | by Todd Smekens

Web Page link: http://muncievoice.com/3752/ymca-should-fund-community-wellness-programs/

After the previous articles written about the YMCA, we’ve received many positive responses within the community by citizens who also believe the Y no longer represents the best interests of our community.

However, as we’ve indicated, many will not go public with this opinion due to fear of retaliation by this local “Christian” organization which has already banned, or refused membership, to 4 adults, and two children under age 6 who have shared opposite views with the CEO, Cathy Clark.

Many people agree that the poor attempt to build its membership base in south Muncie while opening a facility in Yorktown, or their second facility in NW Muncie’s more affluent area, highlights the Y is catering to their affluent members.

Without having specific access to the Y’s demographics, historically, the YMCA is used by less than 10% of all county residents, and one can imagine with this economy, and high membership rates at the Y, that those numbers have declined.

There are many unhappy citizens in Yorktown who will be fighting the battle of the preferred leases the YMCA received when Steve Lowery negotiated them on behalf of residents, so all we can say is stay tuned as an election year will certainly create some discussion about the Yorktown YMCA.

What about the Muncie Family YMCA? What could they do to become a better community partner?

Especially in light of last weeks 2011 County Health Rankings which show that our overall wellness in Delaware County has gotten worse. We are now ranked 85th out of 92 counties in overall wellness. It’s obvious that the YMCA, in exchange for their tax exempt status, is failing the community in wellness leadership.

What’s the solution?

A rough idea would involve our public officials implementing new public health policies that cover all of Delaware County and make sure the right people are leading this endeavor from the ground up. The community centers (Ross, Buley, and Forest Park), and local parks could become the major activity centers for the City of Muncie. Let the people closest to those involved lead residents.

How to fund this program?

Yet another conversation for local officials.

To help as a starting point, we asked the County Assessor to estimate property taxes for the downtown and the Northwest facility of the YMCA based on current assessed valuations – their respective tax bills would be:

Downtown Muncie – $128,484.00 plus storm water and ditch fees

(Valued @ $4.3 MIL)

Northwest Muncie – $82,122.00 plus storm water and ditch fees

(Valued @ $2.7 MIL)

Therefore, if property taxes were assessed and paid by the YMCA, the City of Muncie would receive an extra $210,606 plus fees annually. That’s a fair starting point.

These funds could contribute toward youth and senior wellness programs at community centers, parks, fund summer lifeguards and programming at Prairie Creek and Tuhey, and help support the Friends of Conley who are providing Summer Youth programs within our city parks beginning this summer, etc.

Times have changed, and the YMCA leadership is not making an impact on helping improve community wellness. It appears to manage its operations through a large endowment bestowed upon it – in short, it acts like a trust fund baby.

The Board of Managers seem more diligent in managing the trust than advocating for health and wellness in our community. Their past decisions, current fitness center locations, and board makeup, support this assessment and reflect its true mission.

Our public officials need to investigate options such as property taxes, Payments in Lieu of Taxes (PILOT), or other fees against both the value of property and revenue (income) derived from membership fees to help support wellness programs for the entire community.

There is no reason 90% of our population should subsidize fitness club memberships for the other 10% of our neighbors.

It’s time to stop taxpayer subsidies for an organization that is not serving the community – the recent County Health Rankings reinforces that we need to try something new.

Let the Muncie Family YMCA fund community programs for those needing it the most which is their true charitable purpose of building strong communities.

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Time to Take Action Against the YMCA

Published on April 22nd, 2012 | by Todd Smekens

Web Page link: http://muncievoice.com/3907/time-to-take-action-against-the-ymca/

Millions of Americans exercise and relax at tax-exempt health and fitness clubs. Like taxpaying clubs, these facilities promote health and physical fitness, but they do not pay taxes. Furthermore, they can accept donations from individuals and corporations who receive tax deductions for their contributions.

In effect, all taxpayers subsidize a tax-exempt health club’s ability to enjoy this preferential treatment, and all taxpayers pay higher taxes because of the exemption exists.

According to the County Assessor, James Carmichael, if the YMCA paid its share of taxes on its two fitness centers in downtown and northwest, the City of Muncie would receive over $220,000 in annual property tax revenue. This additional monies could support community wide programs for all Muncie citizens to enjoy, and implement policies that could improve our overall wellness figures,

As mentioned in previous articles, when people give to the Muncie Family YMCA, they are taking money away from those charitable organizations who provide programming to our under-served markets like the Buley Center, Ross Center, Big Brothers Big Sisters, Boys and Girls Club, PAL Club, etc.

The YMCA abandoned the south side of Muncie in 2010 and ignores the entire northeast quadrant.

Our community is in dire need of money to support existing public services, and improve public health and wellness. We need to invest in new programs that will help make us more attractive to employers and small businesses.

If the YMCA’s were located within our under-served markets and were assisting those areas to improve their health and wellness, we would not bother writing articles. However, this is not the case in Delaware County. They have enjoyed tax exempt status and draw from a $5 million trust fund established by the founders. The CEO, Cathy Clark, draws an annual salary of $120,000 plus insurance, pension, and benefits.

The YMCA has made no impact on our health and wellness.

The recent release of the County Health Ranking reveals that our community health has declined to the bottom of the State. We’re now 85th out of 91 counties. The YMCA has failed its mission and is clearly focused on providing services to a small percentage of our community targeting the more affluent Northwest Delaware County – it’s clearly a fitness club, so let it be taxed accordingly.

As a result of their preferential treatment, the Muncie Family YMCA:

• Undermines its charitable purpose

• Creates inequity in the marketplace

• Hinders the growth of private sector jobs

• Fails to comply with IRS rules for Unrelated Business Income Tax (UBIT).

• Erodes our community’s tax base

Why is 95% of the community subsidizing fitness club memberships for the other 5%, and why are we allowing a business to avoid paying taxes when their programs are not effective and have proven to fail the community?

We urge you to write a letter or call your City Council Representative, and request that the Muncie Family YMCA, under the leadership of Cathy Clark, start paying its fair share of taxes so that our public officials can create programs that make a positive impact on our health and wellness.

To determine which City Council member represents you, please visit http://www.cityofmuncie.com/index/City-Muncie-Departments/City-Council.

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Freedom Foundation of Minnesota

Web Link: http://freedomfoundationofminnesota.com/y-expansion-has-some-taxpayers-asking-why

MISSION STATEMENT

The Freedom Foundation of Minnesota is an independent, non-profit educational and research organization that actively advocates the principles of individual freedom, personal responsibility, economic freedom, and limited government.

By focusing on some of the most difficult public policy issues facing Minnesota, we seek to foster greater understanding of the principles of a free society among leaders in government, the media, and the citizenry. Founded in 2006, we hope to create a better and more vibrant future for every Minnesotan by helping shape sound public policy. We will accomplish this important goal not by publishing lengthy, academic books and reports that no one reads. Instead, we tackle issues important to every Minnesotan and provide real-time, proven research and policy alternatives to help further the debate.

As an independent, non-profit 501(c)(3) organization, the Freedom Foundation of Minnesota does not accept any government grants or funding. Instead, we are proud to earn the trust and support of generous individuals, foundations, and corporations.

Y Expansion Has Some Taxpayers Asking “Why?”

It’s a model increasingly used to fund and build a network of YMCA facilities throughout the Twin Cities in partnership with local government. The venerable non-profit collaborates with a host city, whose taxpayers kick in a significant percentage of the cost of a new or expanded Y in their community. In return, residents receive increased access to recreational facilities and some schools districts contract for pool time for their swim teams and other activities.

Elk River residents paid two-thirds or $8 million of the new $12 million YMCA that opened in 2008, approved by voters in a referendum. Lino Lakes taxpayers reportedly contributed over $2.3 million and land valued at about $1 million for the new $10.2 million Chain of Lakes YMCA that opened in 2007.

“As a 501(c)(3) not-for-profit, the life-changing work the YMCA does with children, teens, adults and families would not be possible without your donations,” according to the websites for the YMCA of Greater Saint Paul and the YMCA of Metropolitan Minneapolis. Yet many taxpayers might not realize their tax dollars make up some of the biggest “donations” to the YMCA of Greater Saint Paul and the YMCA of Metropolitan Minneapolis.

The latest multi-million dollar Y expansion project on the drawing board in White Bear Lake, however, has raised new concerns about whether cities already reeling from revenue shortfalls can afford to do business with the nonprofit. And it’s not only the city’s bottom line that has critics questioning another hefty taxpayer subsidy and calling for a voter referendum.

The YMCA of Greater St. Paul and YMCA of Metropolitan Minneapolis reported a combined $154 million in net assets and $9.5 million in revenue above operating expenses for 2008, according to audit statements filed at www.ymcatwincities.org. Individually, the YMCA of Greater St. Paul reported earning $1,044,322 above operating expenses and $52,360,576 in net assets, while the YMCA of Metropolitan Minneapolis reported earning $8,912,328 in revenue above operating expenses and $101,862,216 in net assets on the books. The two YMCAs listed a combined $16.3 million in revenue above operating expenses in 2007.

Financial disclosure 990 forms also posted on line reveal executive compensation packages in 2007 totaling more than $300,000 each for Greater St. Paul YMCA President and CEO Thomas Brinsko ($306,000) and YMCA Metropolitan Minneapolis President and CEO Harold Mezille ($333,000). In addition, sixteen staff members earned more than $100,000 in total compensation in 2007 at the Greater St. Paul and Metropolitan Minneapolis Ys.

Despite a relatively healthy bottom line, the YMCA of Greater St. Paul has proposed that taxpayers cover the lion’s share–$5 million of the $6 million construction costs for the expansion of its White Bear Lake facility, while offering to raise $1 million in contributions to make up the difference. (highlight italics mine)

The White Bear Lake City Council has already voted to pay up to $3 million from White Bear Lake residents. Yet critics like former White Bear City Council member Tony Feffer believe the Y can afford to foot the bill far more than taxpayers. “I think it’s bad public policy for government to be providing financial assistance to a private organization that clearly doesn’t need it,” Feffer said. “We pay our taxes to plow our streets, redo our roads, sewer and water. I didn’t pay my taxes over the last number of years thinking that it was going to the YMCA.”

The Y has also asked other members of the Northeast Community Partners Project for significant sums: $412,000 from Mahtomedi, $225,000 from White Bear Lake Township, $56,000 from Hugo, while also banking on contracting with the White Bear Lake School District for about $1.4 million and the Mahtomedi school district for at least $220,000 in long term leases for using the facility.

On July 20th the Hugo city council tabled the issue of whether to participate in the expansion project until August 18th. Council member Becky Petryk has raised doubts to whether the city of Hugo can afford to kick in taxpayer dollars, particularly for a facility that’s a half hour drive away.

On July 21st, the City of Mahtomedi will hold a public hearing on the project at city hall to consider whether taxpayers should put down $412,000 for the project.

The next big splash on the Y’s pool and facilities proposal will come when the Mahtomedi School Board will vote on whether to sign a ten year lease for $220,000 on August 13th. Superintendent Mark Wolak says he’s still negotiating the terms for other potential uses of the pool, but says the Y’s initial proposal needed considerable revamping.

By September, it should be clear whether the White Bear Lake YMCA expansion project will sink or swim, along with a development model that relies heavily on taxpayer “donations” in spite of the non-profits’ healthy bottom line.

Sources:

Interviews with Tony Feffer and Dr. Mark Wolak

YMCA website: www.ymcatwincities.org

St. Paul Pioneer Press:

http://www.twincities.com/ci_12814381?IADID=Search-www.twincities.com-

www.twincities.com

White Bear Press:

www.presspubs.com/articles/2009/06/03/white_bear_press/news/doc4a26e1885cb3c1587984

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White Bear Lake Watchdog website: http://wblwatchdog.com

Star News 9-19-06 “YMCA Wins Elk River’s Approval”

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