“This is a huge disappointment,” said Oakley Mayor Pat Anderson. “This community expected this to happen, and right up until the end they were telling us the bonds were nearly in place … it was false promises, false promises, false promises.”
YMCA officials announced last month that a continued downturn in the economy and a drying up of donations had caused the organization to close its Oakley and Clayton sites. Plans for an expansion at the San Ramon facility have also been shelved, but the Pleasant Hill location will remain open. The Delta Family YMCA closed its doors for good on March 31.
Repeated calls to YMCA officials for comment on these developments were not returned.
The Oakley expansion project, which included a joint venture with the Special Kids Foundation, was to feature aerobics, cardiovascular and strength-training facilities, plus a health and fitness center and all-abilities playground for children with physical disabilities.
But last month, YMCA officials including President and CEO Mike Erwin and Board of Director Chairman Rick Callaway told Anderson and other city leaders that there would be no deal.
“They told us at a luncheon in March that we would not be getting the facility, that they would not be able to do it,” said Oakley Vice Mayor Jim Frazier. “But as late as January, they were telling us that the bonds were going to be in place soon and that things were moving forward.”
“They (Erwin and Callaway) sat here in a meeting (in December) with us and told us to our faces that it was going to happen,” said Anderson. “I will say that Mike (Erwin) lied; he knew he was never going to build this out here … I could just never feel that he was being honest; call it intuition or whatever.”
News of the Oakley closure and termination of the expansion was a blow to local officials and the community that had labored to raise the required $400,000 in matching funds necessary to cement the Y’s commitment to the new building on the 6-acre lot. Support for the project was so profound that the Oakley Capital Campaign raised well beyond the $400,000 goal, coming in at more than $1.8 million in donations.
Now community donors such as Oakley School District Superintendent Rick Rogers, who also headed up the capital campaign, are feeling less than pleased with the Y. “Early on in the process I was starting to get some uneasy feelings because there was no communication whatsoever to the people donating,” said Rogers, who personally pledged $5,000 to the campaign. “Whenever I would ask for an update, it was always the same response: they were waiting for one big donor to come in and then they would send out some communication.”
Rogers said that while he requested his refund from the YMCA in early March, he has not yet received his money, but added that he is aware of other members in the community who have gotten a refund.
But the loss of the new facility and the return of the community’s donations are just pieces of an emerging puzzle that reveals an organization deeply in debt, yet with high executive salaries and years of back taxes not filed. The organization’s 2007 tax returns show their total expenses and losses at nearly $11 million. The same returns also show more than $5.5 million in compensation to former officers, directors and key employees.
“It’s bad, it’s deep, it’s long and I think we just got caught up in it,” said Anderson. “The audit papers show an amazing amount of debt. How could no one have known? There was $12 to $15 million in debt on just the one paper that I saw. How did that many board members not see that? These are good people. I know these people, but I just don’t get it.”
However, Frazier, who was also involved in the development of the special-needs playground – and insists the play area is still a priority – said he understands just fine. “He (Mike Erwin) was building up his bonding capacity, adding things like the Special Kids and the city, that had value. Do I feel burned? No, I feel scalded.”
“It’s disappointing,” agreed Oakley City Manager Bryan Montgomery, who donated $500 to the Oakley Capital Campaign. “I mean, if you can’t trust the Y, who can you trust?”
Where Oakley currently stands in regard to the O’Hara Avenue property remains an unknown at the moment.
Anderson said the city has repeatedly asked the YMCA Board of Directors for information on the status of the portables on the Oakley site that are owned by the Y, but so far, the questions have remained unanswered. Anderson said the YMCA originally told her it would most likely leave at least one of the modules on the site for the city’s use, but she has not been able to confirm the offer.
In frustration, Anderson sent a Notice of Default to YMCA Board President Rick Callaway dated March 24, asking for the YMCA to pay its debts to the city, which include nearly $2,500 in back and current property-tax assessments (the YMCA signed an agreement to pay for water and sewer on the Oakley-owned property). The city is also asking the YMCA to either remove the three portables on the property or formally convey the buildings to the city. In the language of the letter, “Failure to do so may result in the City taking legal action to recover its damages …”
“We’re in an odd position as a community because we can’t even use the facility right now,” said Anderson. “We need to be able to plan and move on.”
As for the community donations, Anderson said she was told that anyone who had donated to the YMCA project could ask for a full refund.
Frazier believes a formal letter explaining the situation to the community donors would have been appropriate, and the least the YMCA could do. “It would be a good business and ethical decision on their part – finally.”
But the damage, said Anderson, has already been done. “This casts a shadow on all nonprofits, especially in these hard times. It’s very sad.”
The City of Oakley has set up a fund for those who contributed to the YMCA expansion project and would like to roll their donation into a community fund for future local projects.
For additional information, call the City of Oakley at 925-625-7000.