State Investigates Pasadena YMCA

The Pasadena Family YMCA has shut its doors amid mounting debts and a state attorney general’s investigation into its finances, leaving the city without a Y for the first time in 113 years.

Dozens of employees lost their jobs as a new management team changed the locks Friday on the main facility, located on Pasadena’s eastside, and began exploring ways to pay off more than $1 million in debts.

The closure comes just three months after the departure of the Pasadena Y’s chief executive officer, James B. Black--the former chief financial officer of the Los Angeles Music Center who was terminated in the early 1990s for his part in overstating fund-raising for the downtown complex.

Black was named acting director in January 1996 and retired in June. Reached at his home Monday, Black said he’s not to blame for the shuttering of the venerable YMCA branch. And he said he left it “a viable organization.”

But a month ago, the attorney general’s charities division seized its computer records, and 25 of the 26 local YMCA board members resigned. It is unclear who alerted the state to the financial problems of the nonprofit.

YMCA officials who remained behind blamed the financial woes on excessive spending under Black’s three-year regime, including money spent on an inoperative $400,000 computer system, an 18-person corporate office in downtown Pasadena, executive retreats and a leased Ford Crown Victoria that Black still drives.

Meanwhile, half of the organization’s 150 employees have been laid off without severance pay or warning.

“I went home for lunch Friday and when I came back they were changing all the locks,” said Joan Hulett, a fitness instructor.

The YMCA will continue its local sports programs for about 800 youngsters, however, said Jacques Bolton, a club official.

On Monday, members came to the Pasadena facility--where hundreds of low-income children come to swim each summer--and were greeted by a notice stuck to the door advising them to travel eight miles east to the facility’s Santa Anita Family YMCA branch in Monrovia. The Pasadena organization also has an outreach office in Altadena.

“We don’t know why it closed,” said Nina Siedman, a parent and neighbor of the facility, situated in the Eaton Canyon wildlife area. “It brought together many ethnic and age groups. It was packed over the summer for swimming.”

YMCA officials said that, given the severe financial crunch, they had no choice but to lock up the Pasadena branch.

“We barely had the money to lay off people,” said Bill Lofthouse, the lone surviving board member who was appointed chairman last month. “Four years ago we had pretty close to $4 million, and today we’re a million dollars in debt.

“For every dollar we received, we spent a $1.67.”

At present, he said, officials are scrambling to pay off the debts so they can continue to operate the Monrovia branch.

The current predicament is a stark contrast to 10 years ago, when the YMCA sold its headquarters opposite Pasadena City Hall for $3.25 million and consolidated its operations on New York Drive in a two-story structure with workout room, indoor and outdoor basketball courts, a heated pool and a day-care facility.

In retrospect, Lofthouse said, the move was a mistake because it relocated the Y away from most of the people the club wanted to serve. Meanwhile, he added, there was excessive spending in recent years.

The YMCA ran up deficits of $1.3 million in 1997 and $1.7 million in 1998, eating up much of the proceeds from the sale of the old downtown building, he said.

The organization spent heavily on a computer system that “isn’t worth a damn,” Lofthouse said. Staff cost soared, he added, in part because the club employed 18 people at office space leased on East Union Street. In all, the Pasadena YMCA was spending 90% of its budget on payroll, compared to the 50% to 60% spent on employees by other YMCA clubs in the region, he said.

The nonprofit group leased a car for Black and paid as much as $800 a month for him to entertain potential club supporters, officials said.

In addition to closing the corporate offices last week, the club transferred its operation of a summer camp near Big Bear to the YMCA of Metropolitan Los Angeles Camp Services.

The Pasadena YMCA is bringing in Bill Starmer, a former head of the Las Vegas YMCA, to serve as interim CEO. He has a reputation among national YMCA officials as a trouble-shooter, Lofthouse said.

Brian Flynn, the Pasadena YMCA’s vice president of development, said the group invited Starmer and an audit team to review its records after Black left June 3. The team’s dire findings were announced at an Aug. 19 meeting, at which 25 Pasadena board members promptly resigned, he added.

Subsequently, the attorney general’s office began looking into the Pasadena YMCA in its capacity as an overseer of nonprofit organizations, spokeswoman Sandra Michioka said.

She declined to provide any further details, but local YMCA officials maintain the state has yet to find any illegalities.

Black, who said he has not been contacted by state investigators, said Monday he didn’t know what happened after his departure to run up such a debt.

“That is strange to me,” he said. “It is very sad when a branch closes.”

He confirmed the YMCA is still leasing a car for him until November, but said it was part of the retirement package he negotiated.

Black was let go by the Music Center in 1992 after it was found to be $1 million over budget and $1.3 million under its fund-raising goal from the previous year.

The revelations led to Black’s ouster and the resignation of Music Center’s president, whom Black said had ordered him to change the Music Center’s accounting system to make it appear as if it had raised more money than it had. The president denied that accusation.

Whether the same problems afflicted the Pasadena YMCA has been a matter of speculation among its onetime employees, said Stephanie Walper, a former fitness and aquatic director.

“We were always asking where the money went and we were told it’s none of [our] business,” she said.

She said grants intended for children and facilities were run through the corporate office first.

“My husband participated in a basketball tournament for new backboards, where everyone paid to play and we never saw the backboards or a cent,” Walper said.