What we know (and don't know) about the YMCA closure

One week after the bombshell announcement, city residents are still looking for solid answers as to why the Sault Ste. Marie YMCA suddenly announced it is closing its doors for good — with the organization's leadership, board and YMCA Canada taking extraordinary steps to ensure the details are not disclosed to the public.

The news hit the Sault like a ton of bricks on April 16, when the building was listed for sale for almost $3 million. Later that same day, the organization's interim CEO John Haddock confirmed that all programs will cease to operate on May 15.

The announcement means the organization's 2,800 members will be locked out, almost 170 jobs will be lost and more than 500 daycare spots in town are at risk of disappearing.

The Sault Y is part of the YMCA Canada federation, but exists as a standalone organization with its own board and leadership. It is a charitable organization — not a government entity — that exists through a combination of membership fees and donations, as well as some federal and provincial funding.

The City of Sault Ste. Marie is not a significant source of ongoing direct funding to the organization, although the eight YMCA childcare centres in the Sault do receive more than $1 million every year from the District of Sault Ste. Marie Social Services Administration Board (DSSAB) to operate.

Understanding exactly how the closure came to be is challenging because the organization has not been forthcoming about the specific reasons behind it. Here is what we know — and don't know — at the moment.

The problem

The Sault Ste. Marie YMCA leadership says it has been dealing with financial troubles for years, but that a more recent event — not yet disclosed to the public — triggered the impending closure of the facility.

Though not obvious, there were signs of financial trouble in recent years.

In 2022, then-CEO Robert Burns told SooToday about the many infrastructure concerns in the building, which is now more than 60 years old.

“I know people love to give money to help a young teen go into a summer camp than to replace a boiler," he said at the time. "The problem is, without that boiler that youth and all of the other kids aren’t going to be in any summer camp program.” 

Burns said at the time that the organization will have to ramp up its fundraising efforts to meet those infrastructure challenges.

Now, years later, many are wondering why a capital campaign never materialized.

Last Wednesday, the day after the surprise announcement, a members meeting was held in the Y's gymnasium, allowing people to ask questions about the closure.

For about two hours, Haddock and board member Jack D'Agostini fielded questions from the 100 people in attendance, saying they could not reveal the specific cause of the closure due to "legal reasons." They told the crowd that the Sault YMCA needs a lot of money — about $3 million — in a very short time span to have any hope of keeping the doors open.

"We have tried to work though some major issues for the last five months and external forces are giving us a tighter timeline to resolve them," Haddock told the crowd.

The Sault Y is seeking an angel investor to put up the $3 million to purchase the building, which would only allow the organization to continue operating for about another two to three years, he told the gathering.

Members of the media were not permitted to ask questions during the meeting and Haddock and the board have not agreed to numerous interview requests from SooToday in the week since.

Not surprisingly, the lack of information has led to a number of rumours and theories. Organizers of the Save our YMCA Facebook group have been asking its 3,100 members to not point fingers, but to focus instead on solutions.

On Monday, that group organized a rally outside the YMCA building to raise awareness and support for the issues surrounding the closure.

The building and mortgage

The current YMCA building has been a focal point for its members for over 60 years. Land registry records show that the property at 235 McNabb Street was originally purchased for $35,500 in 1963.

Construction of the building was completed in 1965 and the facility was renovated a number of times over the years.

In 2010, the building was upgraded utilizing the Recreational Infrastructure Canada funding program, and in 2012 the organization took out two mortgages on the renovated property totalling $2 million. Both were from Community First Credit Union: one for $1.4 million, the other for $600,000.

The most recent mortgage on the building — a $2-million loan from CIBC, at an interest rate of prime plus 5 per cent — was co-signed in January 2017 by Robert Burns, then chair of the board, and Kim Caruso, the CEO at the time. That mortgage replaced the 2012 loans, which were discharged at the time.

"The initial purpose of that mortgage prior to 2017 stems from the costs of significant renovations that the Y undertook starting in 2010 that included work on the lobby, the creation of studio space, repurposing of the existing racquetball courts, among other things," said Don Ferguson, spokesperson for the Sault Y. 

The remaining balance on that $2-million mortgage, as reported in the organization's 2023 annual report, is $1.426 million. Haddock told the members meeting that the Sault Y pays about $17,000 a month in payments on that mortgage.

At last week's members meeting, Haddock said the Sault Y was "declared" to be in financial crisis in 2021 — which was news to most of the people in attendance.

Ferguson would not specify what date the declaration was made on, but said it occurred "approximately 3 years ago at the height of the challenges brought on by COVID, ongoing financial challenges, and at a time where our local YMCA was operating without a CEO."

"A declaration of crisis by a YMCA is an internal declaration made by a Y’s Board of Directors that triggers support options from YMCA Canada," said Ferguson. "These supports can include finding interim leadership, research and development, and other human resources support and assistance."

"The YMCA of Sault Ste. Marie’s Board of Directors self-declared that they were in crisis in 2021 and YMCA Canada supported their decision," said YMCA Canada manager of communications Denise Gho, in an email to SooToday.

At the same time the Sault Y leadership was dealing with a financial crisis, it created a strategic plan with the now ironic name "Here to Stay." The plan calls for sustainability and financial responsibility to help the organization evolve for the future.

The "Here to Stay" plan makes zero mention of the financial crisis declared behind closed doors.

The Board

The Sault Y board of directors can include up to 15 people, but currently only eight people are listed as volunteer board members:

Elise Schofield, Chair
Cindy Ougler, Vice Chair
Chris Graham, Secretary
Mitchell Currier, Director
Jake D’Agostini, Director
Maxine Lesage, Director
Christian Tenaglia, Director

D'Agostini told the members meeting that over the past few years, he has been advocating at the board level to share more information with the public about the organization's financial troubles — but was outvoted. Since the announcement of the closure, he is the only current board member to have spoken publicly.

"Jake has been designated as the spokesperson for the [board], tasked with representing [its] collective voice to maintain consistency and efficiency in communication," Ferguson said, when asked why others on the board have not commented publicly.

In an email response to SooToday, board chair Elise Schofield directed all questions to Ferguson. "Unfortunately I am not the Y spokesperson for this," she wrote.

SooToday has also attempted to interview multiple former board members but was told by one that they are bound by non-disclosure agreements and cannot speak.

Board members are volunteers, serve a three-year terms and are  required to attend meetings regularly. Among the roles and responsibilities of board members is a confidentiality clause on discussions at the board meetings.

Despite the many challenges the organization is facing, the recorded minutes of its latest annual general meeting, held Oct. 5, 2022, show that only half of the board's eight members at that time were in attendance — and the entire meeting lasted only 35 minutes.

Board members Joel Rowswell, Lori Bertrand, Cindy Ougler and Jake D'Agostini were there, but Maxine Lesage, Christian Tenaglia, Allison Notte and Bill Vanderleest did not attend.

To date, no meeting has been held or scheduled for 2024 to address the end of its current fiscal year, which ended March 31.

"It typically takes several months after fiscal year end before financial statements are available for an annual meeting, but the YMCA’s Board of Directors has indicated that they remain committed to carrying out their responsibilities as required by Ontario’s Not-for-Profit Corporations Act," said Ferguson.

Financial situation

The Sault Y was holding relatively steady in terms of the revenue coming in from membership fees between 2017 and 2021, with more than $1.3 million recorded in each of those years.

But the amount recorded for membership fees took a dramatic nosedive in 2022, totalling just $679,849, about half of what had been brought in during each of the previous five years. It appears that when the doors opened fully once again after the pandemic, many members did not return.

The provincial government offered a total of over $1.2 million in funding during 2021, much of it through various sources intended to help organizations weather the COVID-19 pandemic.

In its 2022 tax filing, the most recent that is publicly available, the Sault YMCA ended the year with almost $850,000 in cash, bank accounts, and short-term investments. In that same year, the Sault Y received $791,475 in funding from the federal government, the most it had received annually from the feds since 2012.

SooToday has asked if there have been any investigations, criminal or otherwise, into what has led to the financial crisis. Neither the Sault Y nor YMCA Canada would confirm or deny if there has been.

"The YMCA takes the confidentiality of internal matters seriously and cannot speak publicly about those at any time," said Ferguson.

Daycare

Licenced daycare operations in Sault Ste. Marie are funded through the DSSAB.

Reached by phone on Tuesday, DSSAB CEO Mike Nadeau said not much notice was given for the closure, compared to when the city and Sault College ceased their respective daycare programs.

"The city provided us with months of notice of when they were going to vacate child care so that we could do adequate planning," Nadeau of the 2016 decision by city council to exit the city-run daycare.

That notice period gave the DSSAB more time to create a transition plan to lessen the impact those closures would have on parents who relied on daycare.

"That's what we would prefer to happen now, a similar process where we have a runway and we find new providers and options for parents for their consideration," he said.

Most concerning, said Nadeau, is the daycare at the main YMCA because that building is about to close. Although no solution has been reached, he said the seven satellite daycare sites operated by the YMCA are in schools that have existing infrastructure and may be more attractive to an organization looking to take them over.

"As the funder, we will commit to making sure that we can continue to fund the YMCA for daycare operations for the duration that they are in the daycare operation," said Nadeau. "If they vacate that space we will seek an alternative solution or provider to ensure that those daycare spaces exist within the system."

Nadeau said any questions about employment of daycare workers is best answered by the YMCA leadership.

The Sault Y currently operates eight daycare centres in the city, including the one in its main McNabb Street building. The remaining school sites include Riverview, Boreal, Tarentorus, Isabel Fletcher, Our Lady of Lourdes, Holy Family and St. Mary’s.

They represent about 541 daycare spots in the city across the eight sites, although DSSAB chair Stephanie Hopkin notes they may not all be at capacity, despite there being a wait list for spaces.

"One daycare may have the capacity to hold 15 children from an infrastructure position, but if the centre is currently understaffed, the centre can only accept and provide services to as many children as they have staff to meet the legislative guidelines for children to [early childhood educator] ratios as set out by the province," she said, noting staffing shortages have been felt province wide.

There are currently 2,275 children in the city on the wait list for daycare.

Ferguson has said all daycare questions should be directed to the DSSAB, while Hopkin has told SooToday the spots in question and their administration are still being discussed at the Y leadership table.

"I strongly suggest reaching out to the Y leadership with hope they are able to provide you details," she said.

Current and previous leadership

In 2023, SooToday reported on the abrupt departures of Burns and chief financial officer Michael Goodship, with Mary Kloosterman taking on the role of interim CEO. At the time — and over the past few days — the Sault Y and YMCA Canada have declined to offer additional details on those departures.

"As the national office, YMCA Canada cannot comment on HR matters at individual YMCA Associations," said Gho.

Reached by SooToday, Burns declined an interview request.

On Nov. 23, 2023, the Sault Y announced it had hired Haddock as its interim CEO. He previously served as CEO from 1990 to 1997 before moving on to leadership roles at the YMCAs of Cambridge and Kitchener-Waterloo, retiring in 2016.

The municipal government's role in the Y's future

Mayor Matthew Shoemaker told SooToday on Tuesday that the city is working with the Y's leadership to ensure the continuation of all, or most, of its programming, either on-site at McNabb Street or off-site in a more distributed model.

"If the building sells to a buyer that is willing to keep the YMCA as a tenant, I think the job is much easier," Shoemaker said. "However, if it sells to a landlord that wants to use some or most of it for other purposes then I think we have a much larger task on our hands."

Shoemaker has previously told SooToday that it is unlikely the city will purchase the aging building but it will possibly take on some of the programming that will be lost if the doors close for good.

The mayor noted a working group comprised of the Sault YMCA, the municipality and community partners met earlier on Tuesday.

"The city is committed to acting as a facilitator to help determine a realistic and achievable path forward," Shoemaker said. "We will likely know more on that front in the next seven to 10 days, but we are actively working on alternative plans for different scenarios when it becomes clearer what will happen with the YMCA’s capital assets on May 15."