Monday, March 12, 2012

Bennett flip-flops on YMCA recusal

Posted By on Mon, Mar 12, 2012 at 1:09 PM

Merv Bennett
  • Merv Bennett
After first telling the Indy that he would recuse himself from voting on a possible public-private partnership with the YMCA, City Councilor Merv Bennett sent an e-mail to City Councilors Saturday saying that he would vote after all.

The former YMCA of the Pikes Peak Region CEO, Bennett told the Indy recently that he wouldn't vote on a deal with the Y because "I can't be objective." But in an e-mail to Councilors, recently, Bennett said he would vote because City Attorney Chris Melcher said he did not have a legal conflict of interest.

Past City Attorney Pat Kelly often told Councilors that recusal was usually a personal choice, based on ethical considerations. If a Councilor believed he/she could be objective, recusal wasn't always required even if an apparent conflict of interest existed. However, Bennett's statement to this paper that he can't be objective would appear to nullify that line of reasoning.

Bennet included the information about his recusal — or lack thereof — in a long e-mail detailing the Southeast YMCA private-public partnership, which took place around the turn of the millenium. The city paid $4.6 million to see the center built.

Here is the e-mail:


Lisa, Bernie and all,

I am doing this from memory so I will do my best. Since I lived and breathed this every day for three years I am comfortable I am including all the data. Lisa and Bernie, the information related to the USO was a part of the Southeast project so the answer to that question will be included within.

Since the early 1970s the YMCA recognized that the Southeast part of Colorado Springs was a community with many service needs and very little access. This was primarily because the hard working folks in this part of our community could not afford to pay for the actual cost of providing the services. For this reason, the YMCA built the Garden Ranch and Briargate facilities first to generate income (along with income generated at the Downtown Y) that could subsidize a facility in the Southeast part of Colorado Springs. The folks in the Southeast did not want anything given to them, they just wanted it to be affordable according to their lower level of income. (At the time the Southeast Y was constructed the average household income in Briargate was around $72,000 but the average household income in the Southeast was $38,000) When cost studies were done prior to construction it indicated about $450,000 in subsidy would be required annually. This was based on a $3,000,000 annual budget. Also, at that time the City parks department was using a national formula that said that nationally city recreations centers only generated revenue to cover 55-60% of their expenses as a national average. (To my knowledge this is still the high end of the average subsidy) This was a time when the City of Denver Recreation Centers were only generating enough income to cover 18% of their expenses. This would mean that the City of Colorado would need to subsidize annually at a rate of 40-45% of expense. This translates to annual subsidy of $1.2 - $1.35 Million per year. The reason is due to operational styles and philosophies. The Y generates most of its income (about 85%) from program fees and membership income with the remaining 15% from donations, gifts and grants. The majority of the philanthropic support is provided in the Southeast, Fountain and YMCA Camp Shady Brook (children’s resident camp). However all YMCA branches utilize an income based rate scale and provide scholarships where needed for membership and programs. Their philosophy is that “no one is turned away due to inability to pay”. It has been for 134 years. The majority of this is provided to families, youth and seniors. The Y raises in excess of $1 Million for this purpose each year in its own fundraising activities here in Colorado Spring and El Paso County. The Y believes this is an indicator of a strong community and embraces social responsibility. Financial records are required to assure that subsidy is provided where it is most needed to be accountable and responsible to the donors. However, special circumstances are given careful consideration.

The Briargate YMCA was opened in December of 1998. (this also had a small but significant partnership with the City) We had just conducted the largest capital campaign in Colorado Springs raising $7.6 Million. The cost of construction was $7.8 million. Our plan was to start of a project southeast in about 5 years. ( I was eager for a rest, capital campaigns are exhausting) However, three months later the City, through Parks Director Paul Butcher, called and asked if we could work together on a project Southeast. The City was working on what became the Springs Community Improvement Program (SCIP). The City believed a recreational facility in the Southeast part of the City was critical but they knew they would not be able to financially operate it. The concept was that the City would capitalize the construction and the YMCA would assume operational responsibility. It was anticipate SCIP would provide $5.5 million which we calculated would construct a facility of approximately 35,000 — 40,000 sq. ft. Since the YMCA did not have land in the southeast part of Colorado Springs, the City offered the present 5 acre site that was a dedicated park site that they had decided to not develop. The YMCA agreed to do this since it would allow services to this area much quicker and meet a priority need of the City and the YMCA.

A couple of things occurred immediately after the YMCA agreed in principle to the partnership. The Briargate YMCA (with 50,000 people within a 3 mile radius of the building) filled to capacity and exceeded its 3 year projection within three months of opening. Second, when doing the demographic study of the 3 mile radius of the Southeast site, we found there were already over 90,000 people in this area with specific and dramatic recreational, social and family needs. i.e. 29% of that community were single parent households and 48% of the community were military family households who behave a single parent households during deployments. This totals over 75% of this community. This resulted in the YMCA recognizing that building a facility half the size of Briargate to serve twice the population would be inadequate. As a result another exhaustive capital campaign was approved and executed. To shorten this slightly, the final amount from SCIP was $4.6 million and the YMCA raised $7.2 million. The final cost was $11.8 million. Because of the operational support that would be needed, it was important that all the money be raised to eliminate or minimize any debt service.

During the capital campaign and while SCIP was going through an extensive community process, the USO Board of Directors (The US0 was a separate 501c3 corporation operating as a subsidiary of the YMCA) conducted an extensive strategic planning process. The result was that the local USO Board decided to amiably disaffiliate with the National USO organization and affiliate with the National Armed Services YMCA. This was done for one major reason and a minor issue. The minor issue related to confusion in fundraising, the National USO was conducting (and still does) extensive fundraising within our area. This made it more difficult for the local USO to be successful with the fundraising that would meet the specific needs of our local military community. However the more significant reason was a recognition of conflicting missions. (both missions are valid and important) The National USO had a primary focus on serving military personnel traveling or overseas while the local Board of Directors felt their mission should be focused on serving military families at home. This is the mission of the Armed Services YMCA. As a result, the National USO, the Armed Services YMCA, the local USO Board and the local YMCA Board all agreed to the new affiliation plan.

I tell you the above to answer the USO question but to also help explain that the new Armed Services YMCA Board agreed to become the advisory board for the Southeast Armed Services YMCA (Southeast Y) That structure continues very successfully to this day.

Now the agreement information between the YMCA and the City as it relates to the Southeast Y. The City has leased the land to the YMCA for $1 per year. Because it is a dedicated park site it could not be gifted or sold. The City could not gift bonded money, so the agreement is as follows:

· The aquatics portion of the building would be under the ownership of the City of Colorado Springs with the YMCA as the exclusive operator.

· The City would depreciate the aquatics portion of the building over their normal 25 year depreciation schedule.

· When the depreciation is completed and it is no longer on the City’s books as an asset, it would be given to the YMCA for $1.

· During this time the YMCA would be responsible for all staffing, operation, deferred maintenance and additional capital development that might be needed.

· The YMCA would provide daily usage at the same or comparable rate as provided by the City at the Memorial Park and Cottonwood Facilities.

· The City would not be responsible for any operating subsidy although the YMCA was not prohibited from asking. (to my knowledge, not operational funds from the City have be requested or provided)

· The City could have a program office in the building. (to my knowledge this has never been requested by the City)

· The Harrison School District was also our partner during the project and provided communication to the local community, the School District also requested the building be moved to the West end of the site to give a campus atmosphere to Sierra HS and to allow them to provide additional parking for the facility on the West side(after 3pm). This has proven to be a great aspects of this collaborative venture.

· The Southeast YMCA opened in April of 2002 and has required annual subsidy each year averaging between $250,000-$450,000.

· Each year YMCAs and City’s from around our country come and visit this model. In my last year as CEO the City of Syracuse NY and Ventura County California, along with their YMCA counterparts visited.

Believe it or not I could make this several pages longer but I think I have provided an overview of a change in operational philosophy where our City and YMCA recognized they could do much more together than they could ever do separately. It resulted in the City recognizing they could cause great services to be provided to the community without being responsible for delivering them.

One other thing, when we did the planning for the Southeast YMCA, I insisted on have the responsibility for the engineering, architect design and hiring of the contractor (GE Johnson). If we were going to take responsibility for the operation and maintenance of the City owned pools, I wanted to be assured that they were developed and constructed in a manner that could be successfully and sustainably operated. Also, all contractors were from Colorado Springs and 60% of the work force that built the building lived in the 80910 zip code. (but that is another story)J

Sorry for the epistle but inquiring minds ought to know!

Merv

PS Because our City legal department has indicated I do not have any conflict of interest, I will be participating in the discussion and vote.


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