WM Council holds work session to hash out club issues

WM Council holds work session to hash out club issues

City officials want to know where money is going

news@theeveningtimes.com

The West Memphis City Council held a called work session last week with the goal of hashing out ongoing issues with the city’s boys and girls clubs, particularly the L.R. Jackson Girls Club.

With an eye on improving oversight and accountability through a West Memphis city ordinance for groups receiving Southland Park “charity days” funds, the meeting was called in particular to check L.R.

Jackson Girls Club’s compliance to the existing standard.

Councilors asked for recent financial and attendance records along with plans for the future before it would consider releasing to the club nearly $18,000 in its next regular meeting.

The meeting started with a general overview of the ordinance governing the revenue, generated from a tax on pari-mutuel racing.

Those funds are mandated to benefit youth through organizations in the city, although the amount and proportion of those funds going to each organization is left to the council to decide.

City administrators made recommendations to city council to strengthen vague reporting requirements that led the board to question operations at the Jackson club. City Attorney David Peeples and treasurer Frank Martin dusted off their previous proposals ignored by city council and provided a fresh walk through.

Peeples’ proposal beefed up liability insurance requirements to $1 million, with the city named as a co-insured, along with stronger activity reporting.

City Treasurer Frank Martin proposed requiring audited IRS 990 forms each June.

“We’ve had a club submit copies of their check-book register for their financial report to the city,” said Peeples. “This hardly meets any standard.”

Examining the recommendation to base financial reporting on clubs’ non-profit tax return seemed fine to the group.

“Its fraud to misrepresent to the IRS. Income is there on the 990 form and should suffice for our report,” said Councilman Tracy Catt.

But City Council has not seen club tax returns to actually gauge whether the desired and accurate figures are forthcoming on club returns.

For 2014, the last year publicly available, the 990 EZ form filed by the beleaguered girls club, showed the club named itself as “Girls Club of America L.R. Jackson Branch.” No such national group or branch affiliation exists.

The five-year aggregate grant total from 2010-2014 tallied $438,754. 2014 program expenses were $15,534 on $44,489 in total contributions and grants.

Only Rainey was listed as director, with zero hours average work per week and zero compensation. No board of directors members were listed in the blanks provided for contact information on the short form paperwork, information city council believes it would capture with a 990 requirement. Club Director Chancey Rainey showed as the sole officer and signer on the return.

By comparison, 2014 990 forms showed the other three clubs deficit spent on youth service programs.

The L. R.. Jackson club was the only club with more income than program service expenses.

The J.W. Rich Girls club reported $143,350 income and $151,193 in expenses in the same year. The Wonder City club reported the biggest club budget with income of $633,679 but spent at $652,200. Finally, the fourth club in the city, Crittenden County Boys and Girls club took in $203,885 in grants and contributions the same year with $249,767 in program service expenses.

The robust figures for this single year at the Wonder City club fly in the face of the common claim that west side clubs are the fundraising and spending kings among city youth clubs.

No specific tax returns were examined by city council during the special session to see if the hoped for information would be gleaned under a stronger reporting ordinance.

City Council appeared to reach general consensus to have the city treasurer and city attorney recommendations blended and in place for the clubs in 2018.

Under new measures, the clubs would submit financial reports each June and activities reports every January. The plan would ease report burdens from four times a year to just the two reports.

City council may tweak some provisions that place expense burdens on clubs reporting. For instance discussion about audit fees 990 forms and liability insurance premiums. Cost estimates for the two items kicked around the room totaled $4,500 per year. The Crittenden County club already meets the proposed requirements.

Under state law, the proceeds are to go to services that benefit the youth of the city. Some in the meeting wondered about the necessity and expense of liability insurance. Councilman Marco McClendon lamented the expense burden on the east side clubs.

“That’s $4,500 dollars on two clubs that can’t afford it now,” said McClendon.

By John Rech