City OKs ‘Write-Off’

Boys & Girls Clubs’ $500K Debt Wiped From Books

Posted: January 16, 2014

Crystal Cruz (left), 8, and Katie Villatoro (right), 6, jump rope at the Boys & Girls Clubs of Harrisonburg and Rockingham County inside the Lucy F. Simms Continuing Education Center in Harrisonburg on Wednesday. City Council has removed $500,000 in debt off the books for the organization so the chapter has a better chance of receiving grants. (Photos by Jason Lenhart / DN-R)
Children in the Boys & Girls Clubs of Harrisonburg and Rockingham County program relax in the Lucy F. Simms Continuing Education Center’s gymnasium on Wednesday. The nonprofit offers after-school programs at seven sites for almost 500 city and county children in kindergarten through 12th grade.

HARRISONBURG — An almost $500,000 cloud hanging over the Boys & Girls Clubs of Harrisonburg and Rockingham County has been lifted ... at least on paper.

In 2008, when the club was unable to reimburse the city its $1.5 million share of the cost of improvements made to the Lucy F. Simms Continuing Education Center, City Council reduced the amount owed in half.

The remaining $750,000 was to be covered by the city withholding $50,000 of its annual contribution to the local chapter until the debt was paid off. The city had been giving the club $101,000 before the organization ran into financial trouble and was unable to pay its share of renovating the historic school building.

While annual $50,000 withholding has brought the balance owed to the city down to $450,000, problems have lingered. The club’s debt to the city was still on the books and has given foundations and other potential donors pause when considering contributing to the nonprofit.

“When we go out to look for grants, the big foundations, they look at our bottom line. It looks like we’re heavily in debt,” Executive Director Bill Carter said. “We don’t know what we’ve missed out on.”

City Council on Tuesday helped the chapter’s cause by unanimously granting the club’s request to wipe the debt off the chapter’s books. Harrisonburg will continue to withhold $50,000 of its annual allocation until the balance of $450,000 is paid off, city Finance Director Larry Propst said.

“The better off the local chapter is, I think the better it is for the city,” Councilman Charles Chenault said in an interview. “When they’re operating correctly, they’re performing an invaluable service to the community. ... No matter what has happened in the past, we want them to succeed.”

Chenault is an adviser to the club’s board of directors. He emphasizes that removing the debt from the club’s books is not deceptive.

“It’s not money that they owe us [anymore],” Chenault said.

The club offers after-school programs at seven sites for almost 500 city and county children in kindergarten through 12th grade. It charges a fee of $15 a week per child, but it is phasing that out by $5 per year with the goal of eventually charging a one-time annual fee of $50, Carter said.

“Our job is to serve the children that need us the most,” he said.

In addition the Boys & Girls Clubs, The Arc of Harrisonburg and Rockingham Inc. — formerly known as the Association for Retarded Citizens — also made a commitment to help pay for the renovated building, where the two nonprofits both have their local headquarters.

In 2007, council voted to limit the repayment of The Arc’s debt of $500,000 to the $262,850 that the organization had already repaid.

Contact Preston Knight at 574-6272 or pknight@dnronline.com



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