Monday, December 01, 2008

CEO will take the reins in mid-December as agency copes with financial crisis

By GARTH STAPLEY
gstapley@modbee.com

last updated: November 09, 2007 04:04:54 AM

The YMCA of Stanislaus County has hired a new chief executive officer to help the organization escape a crushing financial crisis, board members announced Thursday.

In a letter to The Bee, the board did not identify the new chief executive, saying only that he was "a 15-year YMCA veteran" and would assume his duties by mid-December.

Among other developments Thursday in the YMCA's struggles:

The California attorney general's office confirmed receiving a complaint alleging that the YMCA of Stanislaus County misused endowment money meant to help poor children.

Leaders of one charity designated to serve those children are consulting an attorney to explore a potential response, its board president said.

Those actions came in the wake of a special report in Sunday's Bee outlining the YMCA's crisis, including nearly $2 million debt, declining membership, failure to complete two years of audits and difficulties with vendors and its bank. The YMCA may be forced to sell its building at McHenry and Floyd avenues, some board members acknowledged.

National YMCA consultants met this week in Modesto with some local board members, who refused Wednesday to discuss recovery strategy, saying they were preparing a response to Sunday's articles. Thursday, board president Steve Ward said the group decided not to answer questions or issue comments other than the one-page letter to The Bee.

Acknowledging "financial challenges," board members wrote in the letter, "We have learned from the mistakes our Y has made in the past, and we are committed to avoiding them in the future."

The letter says the new chief executive "will be instrumental in our YMCA's recovery."

"At the same time, we are grateful for the service of outgoing CEO Steve Smith and appreciate what he has contributed to our YMCA and community," the letter continues.

Smith became chief marketing officer of the United Way of Stanislaus in June, but continued running the YMCA as well until Nov. 1.

With YMCA board approval since his arrival in 2002, Smith paid some bills by using nearly 90 percent of three endowment funds that had grown to nearly $408,000. They were established by now-dead community leaders for poor and disabled children, said several people who helped create the funds, adding that endowment principal was not to be touched.

Tom Eakin, an emeritus YMCA board member not involved in operating decisions, issued a strongly worded statement Thursday demanding that leaders accept responsibility. He acknowledged for Sunday's articles that he had reluctantly allowed Smith to deplete an endowment established by Eakin's late father for construction of a summer camp cabin accessible by disabled children. The cabin at Camp Jack Hazard never was built.

"Public trust is not something that can be negotiated nor subject to interpretation," Eakin said in Thursday's statement. "We either have the trust of the community or we don't.

"The people who entrusted the Y with those funds and the ultimate beneficiaries need to know how those restricted funds were spent and who received them. Those of us who are involved with the YMCA must provide clear, concise answers. And if we handled the funds incor- rectly or if we have not followed the wishes of the creators of the funds, then we must make amends and restore those funds."

Complaint will be reviewed

Gareth Lacy, press secretary for California Attorney General Jerry Brown, said Thursday that his office had received an anonymous complaint about the YMCA of Stanislaus County.

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