Article published August 09, 2009
Review raises questions on YMCA finances
Officials withhold credit card, travel details
Robert Alexander, the highest-paid president/CEO of all YMCA systems in Ohio, received a $5,000 raise last year, bringing his pay to its current $270,357.
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THE BLADE/ANDY MORRISON
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By JC REINDL
BLADE STAFF WRITER
Officials at the YMCA & JCC of Greater Toledo say they are closing the South Toledo Y branch because of financial problems, yet a Blade investigation raises new questions about the severity of money troubles at the agency.
A financial review of YMCA records that are public, and information gained through interviews, show the more than 100-year-old nonprofit Christian organization is paying Robert E. Alexander, its president and chief executive officer, and several members of his immediate family more than $630,000 a year.
Top YMCA officials, including Mr. Alexander, have refused to make public the agency's records documenting executives' credit-card use, travel expenses, and more than $180,000 the agency spent on "conferences, conventions, and meetings" according to the nonprofit's 2007 federal tax filings, the most recent available.
The salary of the 63-year-old Mr. Alexander, already the highest-paid executive of any social-service organization in Toledo and the highest-paid president/CEO of all YMCA systems in Ohio, rose $5,000 last year to its current $270,357.
He also has an annual auto allowance of $5,342, which provides the Buick Enclave the YMCA leases for him. Before the Buick, the Y paid for Mr. Alexander's Hummer H3.
"I believe that transmission was made at Powertrain, so that was one of the reasons I was attracted to it," Mr. Alexander said of his Hummer. "The lease was up and it was time to move to another vehicle, so I went to something more fuel efficient."Changing numbers
The Blade review also shows how the purportedly dire and long-standing budget deficit at the South Toledo Y averaged about $100,000 a year since 1990, significantly lower than the $300,000 deficit reported by Y officials when they announced the branch closing late last month.
Last week, YMCA officials said in a sit-down interview that the deficit is more like $200,000 a year when spending on branch maintenance is included. But the numbers apparently changed again Friday, when the Y sent a letter to members stating "The YMCA spends $30,000 a month to maintain the building."
Put into perspective, the $100,000 yearly deficit at the South Toledo branch amounts to a mere 0.3 percent of the organization's $33.3 million budget last year, not including its $2 million investment portfolio at the end of December, 2008.
The branch's deficit is slightly less than the $125,000 that the YMCA/JCC won in March for a collaboration prize from the Phoenix-based Lodestar Foundation. All the prize money is slated for use on the JCC campus in Sylvania Township - one of three suburban facilities opened in recent years.Dollars and cents
Even so, Mr. Alexander said his decision to shutter the South Y - which serves a predominantly city population - was entirely about dollars and cents.
"Is it feasible to raise $2 million to upgrade the building knowing that that building will lose operationally?" Mr. Alexander asked.
YMCA Board Chairman Paul Schlatter said he supported the decision to close the South Y building, which opened in 1954 and has undergone two major additions.
"It would be rehabbing a building that would probably not make sense, common sense, to rehab," said Mr. Schlatter, an executive with Dowling Steel in Perrysburg. "That would be a bad business decision."
They both said the organization decided to forgo a fund-raising campaign to upgrade or replace the South Y to save it from closing - now slated for Aug. 29.
Yet in West Toledo that is what the YMCA is doing.The west-side Y
The West Toledo YMCA on Tremainsville Road opened the same year as the South branch but will move into a new $8.3 million building next month after a YMCA fund-raising campaign. The new West Toledo facility, attached by a walkway to the new Start High School, was in large part made possible through a partnership with Toledo Public Schools.
Y officials did not attempt a fund-raising campaign for the South Toledo branch, they say, because staff and board members doubted that the neighborhood could raise the money. There was also no ready partner for the project, as there was in West Toledo.
"The thinking was it's not feasible to raise the kind of money it would take out of the south branch area," said Justice "Judd" Johnson, Jr., a past chairman of the YMCA board and a "trustee for life" who is a partner in the Marshall & Melhorn law firm.
Mr. Alexander maintains it was last month's sudden cut of $1.5 million in state funding for a low-income preschool program the Y runs at the south branch and four other locations, on top of the branch's ongoing deficit, that ultimately forced the decision to close the South Toledo YMCA.
About $400,000 of the $1.5 million cut in Early Learning Initiative funds helped the overall YMCA cover overhead expenses. The organization made $800,000 in budget cuts earlier in the year, reducing some positions and employees' hours and reorganizing its Camp Storer in Jackson, Mich.
"We have to keep the YMCA financially stable, or every Y will suffer," Mr. Alexander said.A family affair
Mr. Alexander, who with other Y employees saw his salary frozen this year, defended his $5,000 salary increase in 2008. The Y's revenue grew by more than 10 percent in 2007, he said.
"We had more than 10 percent of association financial growth that year. I'd put that up against most non-for-profits and even many businesses," he said.
Mr. Alexander also receives a $27,600-a-year pension contribution from the YMCA.
Working at the Y has become a family affair for the Alexander clan, which pulls down nearly $560,000 a year in salary from the organization. Family members' total compensation, including benefits, tops $630,000 a year.
The organization also employs:
•Mr. Alexander's wife, Stephanie Dames, 60, senior vice president of development, with a salary of $139,357 a year, a $16,723 retirement contribution, and a $4,800 auto allowance. She is the organization's second-highest-paid employee.
•His daughter, Jennifer Ruple, senior director of marketing and communication, who is paid $52,522 a year and a $6,303 pension contribution.
•His daughter-in-law, Jody Alexander, executive director of the Fort Meigs branch, who makes $97,355 a year, plus a $11,683 pension payment. Her $11,669 raise last year was a 14 percent pay hike.
•His stepson, Christopher Dames, 29, who works part-time for $10 an hour for the Y's Chance for Change youth program, while he is a senior at the University of Toledo.
Another husband-wife duo is Todd and Denise Tibbits. Mr. Tibbits, vice president of operations, received a $105,054 salary in 2007 and drives a Y-leased Mercury Mariner sport utility vehicle. Mrs. Tibbits is the Y's director of member services.
Mr. Schlatter, board president, said he's not concerned about perceptions of nepotism.
Mr. Alexander and Ms. Dames met at the YMCA. She was hired for her current position in 1992 - six years before his 1998 divorce and their subsequent marriage. Under Ms. Dames, the Y's annual scholarship campaign, which allows thousands of poor Toledo children to become Y members, grew from $240,000 to $2.1 million last year.
"These people are very competent, and we would not allow it as a board if they weren't competent," Mr. Schlatter said.
Even so, Mr. Schlatter initially was unaware of the size of Mr. Alexander's current salary or that the Y provides cars or car allowances to Mr. Alexander; his wife; Mr. Tibbits; Brian Keel, the Y's chief financial officer; Michael Ashford, the Y's vice president of urban affairs, who also is a Toledo councilman, and three other YMCA managers.The south branch
For years, Y officials have quietly but unsuccessfully shopped the South Toledo branch property to the nearby Toledo Zoo and more recently to Toledo Christian Schools. The Y did not advertise that the property was available or notify members that it sought to jettison the branch location.
The Y approached the zoo about the property five years ago and again as recently as two months ago, Mr. Schlatter said. He said the Y learned this year that the fast-growing CedarCreek Church sought a South Toledo location for a new ministry.
Because the YMCA has long been the beneficiary of goodwill from various community groups and wanted to leave a stable presence in the neighborhood, board members agreed to give the South Toledo branch building free of charge to CedarCreek, even though the most recent appraisal listed its value at $445,400.
"We didn't want a car dealership or an abandoned building" there, Mr. Schlatter said.
Mr. Alexander said the Y tried hard through the years to maintain the South Toledo branch. It moved its corporate offices to the building during the 1990s so the rent payments could help balance the branch's budget.
It also bolstered the swimming program there and made the branch its marquee gymnastics site, filling in and covering over a swimming pool with tumble mats and balance beams.
When the Y in the early 2000s moved its corporate offices to their current location on Summit Street in the former Riverside Hospital, it filled the space at the south branch caused by the headquarters' move with a child-care program.Membership issues
YMCA officials also claim that declining membership was a factor in their decision to close the branch. Even though the building often appears bustling, many of its users come from outside South Toledo and their membership dues are not reflected in the South Toledo branch's budget.
The branch has 957 paying members, of whom 175 receive scholarship assistance. Mr. Schlatter said it generally requires 1,600 members for a branch to financially break even.
Even so, branch records show that its front desk registered more than 49,000 "card swipes" during the first six months of the year. Membership figures or card-swipe data for other Toledo branches were not available last week.
The Y has moved the branch's swim team to the East Toledo YMCA and the gymnastics team to its Fort Meigs Center for Health Promotion in Perrysburg, and suggested that members exercise at the Morse Center YMCA on the Health Science Campus of the University of Toledo, the former Medical College of Ohio.Neighbors upset
Despite the YMCA's claims of financial necessity, many neighbors and members of the South Toledo branch remain upset over the closing and are not pleased with the Morse Center option.
Area resident Patti Irons said she is irritated that Y leaders never came forward about the building's money troubles until after they had struck a deal to close and hand over the property to a church.
"I certainly understand the economics of it, but I don't understand why that was never discussed openly," said Ms. Irons, a Y member and elementary school principal. "It was a done deed before we ever heard about it."
Although Y trustees were quick to dismiss the fund-raising potential of Toledo's south end, resident Glen Boatman of Beechway Boulevard said he would make a "substantial" contribution to a South Branch fund drive if the YMCA committed to at least 10 more years at the location.
"Why didn't they reach out to the community … and go on a major fund-raising campaign to save the South Y?" asked Mr. Boatman, whose now-grown children enjoyed swimming at the branch's pool.Transparency?
YMCA officials last week told The Blade numerous times that they would be "transparent" about the organization's finances and how they came to the decision to close the South Toledo Y.
However, they refused to make available records of credit card spending by top YMCA managers. Y officials also refused to provide records detailing $180,173 in spending on "conferences, conventions, and meetings" in 2007.
And despite repeated assurances, they also refused to provide records documenting $437,215 in "travel" expenses.
In a general rundown of the numbers, Mr. Keel, the Y's chief financial officer, said in a phone interview on Friday that the majority of the travel funds went to operating numerous YMCA vans and buses that transport children between programs. And, he said, a large part of the conference spending was used to train employees, including lifeguards and professional staff.Leader defended
Mr. Schlatter, the board chairman, said the board remains confident in Mr. Alexander's leadership at the greater Toledo Y. He said YMCA directors across the state regularly seek out Mr. Alexander for his well-respected advice.
"I saw his salary as being the highest in the state - there's a reason for that," Mr. Schlatter said. "He's one of the top [Y] executives in all of the country."
Mr. Johnson, the trustee, said he believes that Mr. Alexander has been one of the most effective leaders in the Toledo YMCA's history. Despite the vocal sentiments of a few malcontents, the Y has received a mostly positive response to its decision regarding the South Toledo branch, he claimed.
"There have been a large number of e-mails and such that are supportive; very few on the negative side," Mr. Johnson said.
Mr. Alexander asked that his critics who are upset about the closing of the South Toledo branch consider his full 20-year tenure at the Toledo YMCA. Much growth and many improvements have occurred, including the early introduction of standardized membership fees at each branch.
"When I came here the association had a $4.8 million budget, the association had lost money 25 years in a row - 25 years of deficits before I got here. We're now a $33 million budget. We were serving about 60,000 people a year; now we're serving 307,000 people. We've had 19 straight years without a deficit here under my leadership," he said.
The Y recently was honored by the Ohio Association of Nonprofit Organizations for its "Summer Bus Fun" program serving disadvantaged youth. Two years ago, it received a Better Business Bureau "Torch Award." Last year, it brought home an "Eagle Award" for fund-raising from the North American YMCA Development Organization.
"I would hope that these things are in your story," Mr. Alexander said. "You've got a YMCA here that this community should be absolutely proud of."
Contact JC Reindl at:
jreindl@theblade.com
or 419-724-6065.
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