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Ferndale Affirmations LGBTQ Center 2020 Cash Update

By |2020-06-18T22:40:01-04:00February 5th, 2020|Michigan, News|

As Affirmations celebrated its 30th anniversary last year, the LGBTQ community center in Ferndale also went through a slew of leadership and financial changes. With the appointment of Dave Garcia as its returning executive director, a restructuring of the board of directors, new donor and financial goals, its current financial statements show the center having increased its revenue to its highest point in years.
“In 2019 we actually turned a profit at Affirmations, in the black, above and beyond depreciation for the first time since I was here the last time,” Garcia said. “The 2019 audit will show that.”
Set to be completed by the end of this month, BTL will follow up with a more comprehensive breakdown of the center’s financial records since the start of its drastic financial upswing. In the meantime, we chatted with Garcia to answer some basic questions about the center’s currently released financial documents for 2019 leading into the start of 2020.
To date, the center reported a checking bank balance of $199,868 at the end of December 2019, a significant increase from the $131,405 total at the start of November 2019. To put that progress in perspective, in November of 2018, the center was facing financial shutdown and an inability to meet costs.
As positive as those changes are, there has been a complete drain to the center’s Building for the Future Fund, or donor-designated funding designed to upkeep Affirmations’ large-scale building maintenance costs. At the end of 2018, the center had $136,344.67 within the BFF that now contains $0. When asked if there are plans to replenish these losses, Garcia said yes.
“Our 2020 budget is $750,000 in revenue. In expenses it’s $750,000, but remember it’s $93,000 in depreciation, so at the end of the year you’re at plus $93,000 if you raise $750,000. And those monies, that depreciation of variance is supposed to be used to replenish the BFF fund, because the building is depreciating,” he said. “So, the answer is yes. If we raise the $750,000 that we told the board we will by the end of the year, then there will be a positive variance of at least $93,000 on the books and we can put it into the BFF fund to continue to replenish for an emergency for the building. … So if we come within depreciation we still pay all of our bills.”
The final line item of concern was a long-term liability of $75,000 that remained unchanged for several years preceding Garcia’s tenure. When asked about it, Garcia said that this issue traced back to a pension plan that preceded several executive directors of the center.
“A long time ago before the crash in the market, a lot of nonprofits got together through the United Way and they payed, basically, a pension to their senior staff. It wasn’t just Affirmations, there were dozens. So, Affirmations had a pension for Leslie Thompson, the executive director, and a couple senior staff members,” Garcia said. “When 2008’s crash hit, basically the pension plan program folded, but they still owed those pensions. There’s an arm of the federal government called the PBGC — The Pension Benefit Guaranty Corporation. So, the PBGC steps in and basically, they’re almost like the FDIC, so they cover the pensions. But then these nonprofits all worked out a deal with the PGBC to pay these back, because they did owe them.”
At the time, Affirmations owed roughly $130,000. However, it was able to negotiate a price of $75,000 with the federal government that was due to be paid within 10 days. What Garcia said still confuses him today is that a check was cut to pay back this debt, but somewhere in the process it was voided. And since the federal government never followed up on their end to make sure the payment was completed, the $75,000 has remained on Affirmations’ books. Garcia said that immediately after he stepped into his returning role at the center he made plans with PBGC to pay this debt down — adding that the center is lucky that no penalties have been added on top of the owed monies.
“I think we’re going to get a payment plan probably over the next five years. But the fact of the matter is everyone was ignoring this until I got back here and now we’re actually dealing with it,” Garcia said. “Anyone sitting on the board of directors should have seen the audit from ’15 and ’16 and ’17 and seen that this pension obligation is still sitting there. And why?”
This is a developing story.

About the Author:

Eve Kucharski
As news and feature editor at Between The Lines, Eve Kucharski's work has spanned the realms of current events and entertainment. She's chatted with stars like Wanda Sykes, Margaret Cho and Tyler Oakley as well as political figures like Gloria Steinem, Gov. Gretchen Whitmer and Attorney General Dana Nessel. Her coverage of the November 2018 elections was also featured in a NowThis News report.