Berkeley-Albany YMCA Teen Center Inc

What it reported doing in 2016

TO HOLD TITLE TO, REMODEL AND IMPROVE, AND TO LEASE TO THE BERKELEY YOUNG MEN'S CHRISTIAN ASSOCIATION, A CALIFORNIA NONPROFIT CORPORATION ("YMCA"), A BUILDING TO BE USED BY THE YMCA AND BY THE ORGANIZATION AS A TEEN CENTER, PROVIDING EDUCATIONAL, EMPLOYMENT AND LEADERSHIP PROGRAMS PRIMARILY FOR TEENS (AGES 12-19) AND OTHER YOUTH, AND ADMINISTRATIVE OFFICES FOR THE YMCA AND THE ORGANIZATION. In December 2009, the Association arranged New Market Tax Credit ("NMTC") financing as partial funding to renovate the property ("Teen Center" building) gifted to the Association by PG&E. Under the NMTC program, banks and other qualifying institutions make "qualified equity investments" ("QEI") in Community Development Entities ("CDEs") that have been certified and granted allocations by the CDFI of federal income tax credits. In connection with the Teen Center Inc. project located at 2111 Martin Luther King Jr. Way ("Teen Center Property"), Wachovia Community Development Enterprise XIX ("Wachovia CDE"), a single purpose CDE certified by the CDFI made a senior loan in the amount of $6,825,000 (Loan A) and a subordinate loan in the amount of $2,675,000 (Loan B) to the YMCA of the Central Bay Area Teen Center, Inc., a single member limited liability company formed by the Association for this purpose. Funding for the Teen Center loans was provided by a $6,825,000 QEI made by Investment Fund LLC ("Investment Fund") to Wachovia CDE. Investment Fund LLC obtained the funds to make the QEI via a $6,825,000 secured loan by YMCA of the Central Bay Area and funding provided via a net equity investment in the amount of $2,675,000 by a tax credit investor. A portion of the proceeds of both Loan A and Loan B were used to acquire the Teen Center Property from the Association. The balance of the funds was used to renovate and improve the Teen Center Property. At the end of the seven-year Compliance Period, the tax credit investor may put its interest in the Investment Fund to the Association, at which time the Association will have the right (call option) to liquidate the Investment Fund's equity interest in the CDE and thereby acquire Loan A and Loan B from the CDE. YMCA of the Central Bay Area, serving as the Leverage Lender, loaned $6,825,000 to Investment Fund. The loan proceeds were combined with $2,675,000 contributed to the Investment Fund by an equity investor and permitted Investment Fund to make an aggregate QEI in Wachovia CDE of $9,500,000. The seven-year Compliance Period ended in December 2016 and the Organization exercised its call option, thereby liquidating the Investment Fund's equity interest in the CDE and acquiring loan A and loan B from the CDE. These loans were subsequently forgiven and net revenue in the amount of $2,674,000 was recognized from this transaction. THE ORGANIZATION TRANSFERRED ALL ITS ASSETS TO YMCA OF THE CENTRAL BAY AREA AND CEASED CONDUCTING BUSINESS BY END OF THE YEAR.

Financial Efficiency

• Mission deployment rate: 2.9%; rating input score 3
• Program expense ratio: 100%; rating input score 100
• Fundraising efficiency: Limited

Transparency & Controls

• Consistency checks: 100%; rating input score 100; 62nd percentile among comparable filings
• Pay-setting controls: 0 of 6 controls in place; rating input score 0
  • Compensation committee: Missing
  • Independent consultant: Missing
  • Other Form 990s reviewed: Missing
  • Written employment contract: Missing
  • Compensation survey or study: Missing
  • Board or committee approval: Missing
• Foreign activity oversight: Limited
• Grant itemization coverage: Limited
• Major donor itemization: Limited
• Related-party transparency: Limited

Accountability

• Independent voting board: 60%; rating input score 60; 9th percentile among comparable filings
• Governance controls: 7 of 9 controls in place; rating input score 78
  • Conflict-of-interest policy: Pass
  • Whistleblower policy: Pass
  • Document-retention policy: Pass
  • CEO compensation review process: Fail
  • Other executive compensation review process: Fail
  • Form 990 shared with the board: Pass
  • Board meeting minutes documented: Pass
  • Audit committee oversight: Pass
  • Independent financial-statement audit: Pass

Sustainability

• Operating margin: 97.1%; rating input score 100; 100th percentile among comparable filings
• Total-asset coverage ratio: 0; rating input score 0; 0th percentile among comparable filings
• Liabilities to assets ratio: Limited
• Officer compensation ratio: 31.4%; rating input score 3; 3rd percentile among comparable filings

Growth

• Program expense growth: -5.2% per year; rating input score 0; 12th percentile among comparable filings
• Revenue growth: 69.8% per year; rating input score 100; 99th percentile among comparable filings
• Asset growth: -14.3% per year; rating input score 0; 3rd percentile among comparable filings