Over the past year, and particularly the last election season, the issue that provoked the single most comment, from candidates, from citizens and in letters to the editor, was the Caroline Family YMCA. While any major public initiative provokes a range of opinions, the YMCA has been notable in the range of facts and figures that have been quoted in defense of one position or another. In light of that, the Progress here presents a brief account of the path to the creation of this Ladysmith institution and an overview of its current financial position, the latter based on conversation with county administrator Charles Culley.
History
Interest in building a Caroline YMCA goes back to the early 2000s, with the first decisive action taken in June 2005, when the Board of Supervisors at a work session approved a memo of understanding with the Rappahannock Area YMCA to build a 50,000-square-foot facility in Ladysmith at a cost of $4–$4.5 million, with proffers from developers funding the cost.
That MOU also included a clause that if the building was not completed by Dec. 31, 2010, the county could reclaim its title to the property.
However, in the intervening years, twin housing and banking crises shattered the bubble of optimism that characterized the early years of the new millennium. The U.S. economy tanked, and a formal agreement was never signed. Still, even in February 2008, the Fredericksburg Free Lance-Star was reporting that the Rappahannock Area YMCA hoped to break ground on the Caroline facility by the end of the year.
By August 2010, with the economy weak but stabilizing, the project resurfaced as a candidate for potential borrowing by the county at a work session held by the Board of Supervisors.
Four months later, on Dec. 7, the supervisors approved a non-legally binding memorandum of understanding with the Rappahannock Area YMCA similar to the 2005 MOU to support the creation of a “community-based, multi-purpose, health, educational support and recreational facility and programs.”
Toward that end, the county stated its intention to “provid[e] material support for the construction and operation” of such a facility.
In June 2011, the Board of Supervisors approved a budget with a capital projects plan that listed the construction of the YMCA. Simultaneously, they approved $5 million in interim financing for not only the YMCA, but also the renovation of Bowling Green Primary School (now Bowling Green Elementary School) and the purchase of a replacement ambulance.
All three of the latter initiatives were financed that August using an $8.4 million public facility lease revenue bond issued through the Caroline Economic (then Industrial) Development Authority. The term of the note was set at five years, maturing Aug. 1, 2016, and BGES served as collateral.
Over the next two months, the county signed two agreements with the Rappahannock Area YMCA.
Under the first, a 20-year grant agreement signed Aug. 11, the county agreed to “donate … sufficient funds for the design and construction of the Facility in an amount not to exceed five million dollars … less any amounts received by the YMCA from other sources as a result of any capital campaign conducted to raise funds for the Project.”
The county retained the title to the land on which the facility would sit, and the YMCA was made responsible for equipment, overall operation, routine maintenance and insurance costs.
Responsibility for structural repairs to the completed building was hazy: although the agreement notes that the YMCA may request funds from the county for such repairs, the county “may, but shall have no obligation to, provide to the YMCA all or a portion of the funds necessary.”
Finally, a clause that Culley characterized to the Progress as “the ultimate protection” specifies that if the Caroline Family YMCA ceases to exist as a nonprofit, the title to the facility will revert to the county.
Even further, three years after the date the certificate of occupancy was issued, the county has the right to purchase the facility from the YMCA at any time, with the purchase price being “the depreciated value of the Facility less the aggregate amount of funds … donated by grant to the YMCA by the County and/or resulting from any capital campaign … and any surplus funds from the operation of the Facility used to construct improvements to the Facility.” In effect, then, the county has the right to assume ownership of the building for free.
The second agreement, signed Sept. 27, leased the ground on which the YMCA sits to the Rappahannock Area YMCA for 20 years.
On Dec. 11, a ceremonial groundbreaking on the Ladysmith site in Ladysmith Village was held, although excavation did not begin until late spring 2012. In the meantime, NNP-IV Ladysmith, LLC, the owners of Ladysmith Village, conveyed the 10 acres of the YMCA site to the Board of Supervisors for the facility, and Thurston Companies was chosen as general contractor.
Despite early hopes that the YMCA—which by then was envisioned as a 41,000-square-foot building with a gym and fitness and aquatics centers—would be completed by the end of 2013, it did not open its doors until March 14, 2014, when a ceremonial grand opening was held, with U.S. Sen. Mark Warner, D-Va., in attendance. It has been in operation ever since.
Financials
When the YMCA was first proposed, it was expected that it would be paid for through proffers from the building of houses in Ladysmith Village ($250 per house) and the proceeds of a capital campaign, although this contention caused controversy from the start.
The county’s total investment in the project has been $5 million, which was a grant, or a gift, to the Rappahannock Area YMCA.
“They didn’t ask us for any more,” Culley said. “That’s all that’s been given to them.”
Under the 2011 bond for $8.4 million issued through the EDA, with the remaining $3.4 million funding the BGES renovations and a replacement ambulance, the county had five years after issuance during which only payments on the interest of the loan were due. Paid twice a year, at six-month intervals in February and August, each payment except the first (for $70,451, paid Feb. 1, 2012) has been for $103,100.
Until August 2013, all of the payments came from proffers, proffer interest earnings, bond interest earnings or the capital campaign. The Aug. 1, 2012, payment was drawn entirely from proffers, while the Feb. 1, 2013, payment was split more evenly between proffer funds and monies raised by the campaign, with smaller contributions from interest earnings.
The Aug. 1, 2013, payment marked the first time that the county chipped in to finance the YMCA. Faced with only some $37,000 in funds from the campaign and just shy of $6,000 in proffers, $60,000 had to be drawn from the general fund to make up the difference.
Since then, the bulk of each six-month payment has come from county funds. Proffer payments have ranged between a low of $1,750 this past August and a high of $3,250 in August 2014, while the capital campaign has only put an additional $25,000 toward the facility, in one lump sum used for the August 2014 payment.
All told, county monies pulled from the general fund to pay for the YMCA have totaled $436,962.29. Proffers have paid for $230,000 and the capital campaign for $109,000. The remainder has been made up of interest earnings.
The county will have one more interest payment to make—its upcoming Feb. 1 obligation—before the $8.4 million bond matures Aug. 1 of next year, forcing the county to refinance and begin paying off the principal.
Although no specific figure will be available until the supervisors decide on a course for refinancing, and numbers are dependent on the broader economic picture at any given moment, Culley said that the county’s monthly payment is likely to go up “significantly.”
“There’s no way around it,” he said.
Still, he said, increased payments have been factored into longer-term budget projections that hopefully will not require any tax increases (a measure that would require approval by the Board of Supervisors).
“If you just look at our existing debt and you roll in the Y and you roll in Bowling Green Elementary School, we should still be able to handle that, because of other debt rolling off, being paid off,” said Culley.
With a $103,100 payment due at the beginning of February, and the question of longer-term financing on the horizon, the YMCA is likely to again be a prominent item on county officials’ agenda in the months to come.
-CP Reporter Sarah Vogelsong
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