Sherwood's agreement with YMCA is 'poorly written' and should be renegotiated, report says [The Oregonian, Portland, Ore. :: ]
(Oregonian (Portland, OR) Via Acquire Media NewsEdge) March 19--Sherwood leaders will re-examine the city's relationship with the YMCA on Pacific Highway after receiving a report that criticizes the two organizations' agreement for being poorly written.
The review -- completed by auditor Rob Moody of the Talbot, Korvola and Warwick accounting firm -- recommends that the city re-negotiate its operating agreement with the YMCA.
"It would be like you being married to somebody, but the 'prenup' [prenuptial agreement] was drafted 15 years earlier by previous people, and now you and your partner have to figure out -- what was that? What did that mean?" said City Manager Joe Gall.
The 20-year agreement, which city and YMCA representatives said is unique compared to YMCAs across the country, expires in 2018. The city owns the YMCA building and used a construction bond to build it, and so the YMCA is expected to give the city money in return, according to various terms in the agreement.
But vague language in the agreement and subsequent verbal pacts that contradicted its terms have allowed both the city and YMCA the ability to interpret it as they each saw fit.
"The current Agreement is vague and poorly written in many aspects and specifically in regard to detailed financial terms," the review says. "The Agreement appears to reflect the thoughts and intentions of the City's leadership and the YMCA at the time it was written and has since been modified (formally and informally) multiple times.
"Specific terms have been interpreted differently by each party and actual implementation reflects those interpretations," the report went on. "Until recently, little attention has been paid to the financial terms of the Agreement."
One section of the report concerns the YMCA's obligation to pay the city a portion of its excess revenues. The report used a strict reading of the agreement and available data to estimate that the YMCA failed to pay the city over $437,000 from 1999 to 2012. But that doesn't mean the city missed out on that money, Gall said.
"This money that would have come, we would have given right back to them to reinvest in the facility," Gall said, referring to his understanding of a verbal agreement between previous city leadership and the YMCA.
The report also shows that $570,000 was reinvested in the facility -- a city building -- over that same time, according to a YMCA projection.
"We'll get to the bottom of this," Gall said. "But I think it's going to end up being close enough to be a wash."
Renee Brouse, the executive director of the Sherwood YMCA, said she agreed that there are parts of the agreement that could be made clearer. But she disputed the $437,000 figure, saying the YMCA's own auditor found the actual amount to be about $81,000 in 2011. She also indicated that the city might actually owe the YMCA money.
Sherwood Mayor Bill Middleton wasn't so sure -- he thinks the city has been losing out. But he was glad that the review was completed. He hopes the city can negotiate a new contract with the YMCA.
"It's just fantastic we're actually looking after the taxpayer's money for a change," Middleton said.
The Sherwood City Council will discuss the issue further at its April 1 meeting.
-- Luke Hammill
(c)2014 The Oregonian (Portland, Ore.)
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