PAL board spends endowment fund

Decision leaves no reserve cash to keep open youth center

The Greater Portland Police Activities League, which last week narrowly avoided closing the doors to its Gresham youth center thanks to community and corporate donations, used its endowment fund as a reserve fund last year to operate at less of a deficit.

Mark McGinnis, the newly appointed chairman of the league’s board of directors, said board members authorized using the endowment as a reserve fund, allowing $136,000 for use as part of the agency’s total revenue.

Even with the transfer, PAL operated in a $200,000 deficit last year, according to financial statements filed with the city of Gresham. Without the endowment funds, that deficit would have totaled $336,000 — or the equivalent of nearly half the program’s yearly total revenue.

Late Tuesday, Feb. 12, PAL announced that without additional funding, it would be forced to close the Bud Monnes Youth Center in Gresham, as well as its administrative office in North Portland on Friday, Feb. 15. The Beaverton PAL center was to remain open, however, media reports indicate that officials with the city of Beaverton approved emergency funding to keep its center open for three more months.

The news came as a huge shock to local parents, teens and children who use the Gresham center, located at 424 N.E. 172nd Ave., after school to study, socialize, recreate and stay off the streets.

By Thursday, Feb. 14, residents and corporate representatives raised $16,000, enough to keep the center open through the end of the month.

McGinnis cited reductions in government funding and securing fewer grants than it had budgeted as contributing factors to the sizable deficit.

“That is not inconsistent with other providers of similar services,” he said in an emailed response to questions about the budget. “For example, Boys and Girls Club reported a 16 percent decline in grants from 2010 to 2011. Our decline in grants was slightly greater. The reduced income and maintenance of a high level of services contributed to our higher deficit.”

PAL went from receiving $620,715 in government grants in 2010 to $475,143 in 2011, or a 23 percent drop. Meanwhile the number of children and teens served increased. PAL had 700 youth members, more than 130 daily participants in its youth centers during the school year and 210 participants during the summer in the 2007/2008 fiscal year.

It now boasts 1,000 youth members, and an average of 175 youths ages 8 to 18 a day at its centers. Of those children and teens, 80 percent of them attend schools in the Gresham-Barlow, Centennial or Reynolds school district. The other 20 percent come from Portland, David Douglas and Parkrose school districts.

In recent years, PAL introduced Friday night basketball for teens until 10:30 p.m., including a meal. On average, it drew 50 teens between ages 14 and 19, but some nights, as many as 80 teens attend.

But using its endowment fund as a reserve is a significant indicator of the tremendous financial woes PAL faced. Endowment funds are designed to provide investment principal that is to remain intact and invested to create an ongoing source of income for an organization. Typically, it can only be spent by an overseeing board in cases of exceptional financial hardship.

PAL’s Executive Director Patricia Day TenEyck has been unavailable for comment. McGinnis said she’s been too busy trying to find donors and form community partnerships to comment on the center.

But last week, she told The Oregonian that she “walked into a mess” in late 2010 when she took over as PAL’s executive director, replacing Maura White, who after 18 years with the organization, left for a job with the city of Portland.

“Not true,” White said. “I may have a messy office, but not messy books.”

Both executive directors saw deficits during their tenures, according financial statements filed with the city of Gresham,

White overcame a $102,000 deficit in 2007-08 by boosting enough revenue to end the next fiscal year ahead more than $39,000. The next fiscal year of 2009-10, her last with the organization, netted $1.02 million in revenue, but also ended with a nearly $75,000 deficit.

The next year — TenEyck’s first with the agency — it lost $179,402 in revenue, an 18 percent decline, to $822,691.

Last year, it dropped another 16 percent, or $132,135, to $690,556.

However, due to the infusion of endowment funds as a reserve, the agency’s total revenue came in at $826,556 — in keeping with the prior year’s total.

Meanwhile, the deficit TenEyck inherited snowballed. It doubled during her first year, growing from just under $75,000 to $151,691. And then it doubled again, reaching almost $336,000 in fiscal year 2011-12.

Fundraising also fell flat.

During TenEyck’s first year, the agency raised $12,206, about half of what was raised the year before. A golf tournament netted just $217 in profit. Last year, none was held, and the agency’s special events raised $22,000 less than PAL had budgeted.