Federal nonprofit tax reports tell story of declining revenue
Citing continuing financial losses, the Sarasota Family YMCA announced this week that it will close two fitness centers permanently at 5 p.m. on Friday, Sept. 13.
The facilities are the Evalyn Sadlier Jones Branch at Potter Park Drive and the Frank G. Berlin Sr. Branch on South Euclid Avenue, both in Sarasota.
Interim President and CEO Steve Bourne sent out an email blast to members on July 23, writing, “It is with a heavy heart” that he was announcing the closures.
“Despite best efforts that were made to try to stabilize the operations of those fitness centers, they have operated at a financial loss for the past several years and the YMCA can no longer sustain them,” Bourne continued.
The Sarasota YMCA was one of the victims of the Ponzi scheme perpetrated by Arthur Nadel of Sarasota, who reportedly bilked investors out of $162 million. Nadel’s six hedge funds collapsed in January 2009, during the Great Recession, after some of his clients tried to retrieve their money, the Tampa Bay Times reported.
He ended up pleading guilty to 15 federal counts and was sentenced to a 14-year prison sentence. At the age of 79, he died in April 2012 at the Butner Federal Correctional Complex in North Carolina.
The Sarasota Herald-Tribune reported in February 2012 that representatives of the YMCA Foundation of Sarasota “believed that $1.1 million, or 13 percent of [the nonprofit’s] total assets [at the time], was generating returns of at least 10 percent per year” in one of Nadel’s hedge funds.
The most recent federal 990 form filed by the Sarasota YMCA as a nonprofit organization — for the period from July 1, 2017 through June 30, 2018 — shows total revenue of $46,399,019. The YMCA’s expenses, that form said, were $48,032,490, resulting in a loss of $1,633,471. The Y’s previous fiscal year loss was $967,865, the form said. Two years ago, the loss was reported as $555,371.
For the period of July 1, 2017 through June 30, 2018, President and CEO Laura Gilbert was paid $205,794, the form notes. Bourne, who was senior vice president and chief financial officer, received $120,365. They and three other staff members received a total of $706,437 that year, the report said.
Membership dues from July 1, 2017 through June 30, 2018 added up to $5,410,182, the form noted. For the fiscal year covering July 1, 2016 to June 30, 2017, the total was $5,799,409, according to that year’s 990 form.
In contrast, membership fees in 2006 added up to $8,863,110.
Bourne added in his July 23 email blast that “the YMCA Board will be turning 100% of its focus to operating the YMCA’s ongoing foster care and social services programs that have served vulnerable populations in this community for many decades, including abused, neglected and at-risk children. The YMCA’s mission has always been to meet community needs, and in continuing to operate these important foster care and social service programs this mission of the YMCA will continue to be fulfilled.”
Rumors among Y members have circulated intensively for months about whether the Sarasota facilities would be able to remain open, as more regulars left to join other fitness centers that have opened in the area. The departure rate increased after the YMCA announced in October 2018 that it no longer would participate in insurance coverage of memberships, including the popular Healthways-SilverSneakers program. The formal letter from the YMCA, dated Oct. 15, 2018, said, “The payment we receive from the insurance provider (we’ve negotiated with them several times) is close to 60% less than what a membership costs. As a nonprofit organization, we cannot sustain those losses with ever increasing operational costs.”
That letter also informed members of changes in rates. Although seniors visibly have made up a large percentage of the members at both Sarasota facilities, the YMCA offered its lowest rate — $19.99 a month — to individuals age 29 and younger. Those 30 and older were told they would pay $39.99, while the fee for a household with two people of any age would be $69.99, and the cost for a household with two adults plus dependents would be $89.99 a month.
The staff at the Berlin branch also informed members that complimentary towels no longer would be provided.
In his email blast this week, Bourne wrote, “YMCA leaders and board members considered closure of the fitness centers as the last possible alternative. This decision was finally made after substantial cost cutting, changes to pricing, modifications of program offerings, and other actions failed to make a measurable improvement.”
He added, “We reached out to the national YMCA organization and other Florida [YMCAs] in an effort to merge the Sarasota fitness centers into other [operations], without success.”
Further, he wrote, leaders of the Sarasota YMCA spoke with community philanthropists, “seeking financial support but those efforts were not fruitful.”
Bourne noted that the final membership payment draft would take place on Aug. 15.
“Members who have prepaid their annual or semi-annual membership fee will receive a pro-rated refund,” his email blast said.
“Programs and sports activities will not be continued past the closure date and refunds will be processed on a pro-rated basis,” he pointed out.
The before- and after-school program will continue at the Southside, Gocio and Fruitville elementary schools, he wrote.
“Please reach out to managers and administration with any questions you have,” Bourne added. “We will do all we can to provide answers and support during this process.”