Fixing The Deficit

Posted on July 9, 2014, 10:07 PM . Filed in featured. Tagged , . Comments are closed.

001RDB

JCC losses
“Worse than projected,”
Says oversight committee.

After months of due diligence, the Jewish Community Center’s Financial Oversight Committee (FOC), tasked with taking an extensive look into the JCC’s financial challenges, presented its analysis to the Jewish Federation of Metropolitan Detroit and United Jewish Foundation boards of directors at a combined meeting on June 26.

The FOC has been meeting weekly since January, working closely with interim JCC CEO Jim Issner, according to Dorothy Benyas, Federation CFO. The FOC’s analysis shows that the “operating loss was worse than we originally projected,” Benyas said.

According to the committee’s analysis, the projected operating deficit for the JCC from May 31, 2014, to May 31, 2015, is expected to be about $1.3 million. That higher-than-expected loss cannot be attributed to any one thing, cautions the committee.

“It came from across the 40 different units that make up the JCC,” said Matt Lester, chair of the FOC. “There is no one thing to point to, nothing glaring or obvious that needs to be fixed. We are going line by line, program by program, expense item by expense item to find efficiencies $1 at a time.”

Under Issner’s leadership, efforts are under way to chip away at that deficit. During the past two months, about $400,000 in operational savings have been identified and fundamental best business practices, including more rigorous accounting standards previously lacking, are now being overlaid on the Center.

According to Lester, this fiscal year, projected losses from operations have virtually been cut in half and now stand at $700,000. Most of that, he says, is attributable to expense reductions, including a freeze on pension benefits for non-union employees that netted $90,000 in savings, salary reductions through attrition and other reductions.
Matt-LesterMatt Lester

“There was no magic bullet,” said Federation CEO Scott Kaufman, “just lots of little things. But we know we can’t cut our way to financial stability.”

JCC’s New Culture

After Issner, widely known as a turnaround specialist, came on board four months ago, each of the 40 different business units within the JCC were required to more intensely analyze their budgets and put forth specific projections, Lester said.

Financial Oversight
Committee

Matt Lester (Chair)
Michael Berger
Alan Kaufman
Brian Kepes
Beverly Liss
Larry Nemer
Ben Rosenthal
Brian Siegel
Steven Weisberg
Larry Wolfe

Issner said the Center is working in tandem with Plymouth-based Financial One, which is acting as the Center’s emergency financial adviser, as well as the Financial Oversight and Futures committees on internal financial controls and getting the center’s balance sheet in order. He has been concentrating on adding rigor to the financial management of the Center.

“We’re running everything as a business,” Issner said. “This is a complex organization. I’m trying to bring everyone together to understand how the Center operates as a whole. We need to understand where our money is coming from. We’re looking closely at financials to ensure every dollar is properly spent and accounted for.”

Issner has found several ways to improve efficiencies, in marketing and advertising, for example. Prior to his taking the helm, each of the Center’s many businesses was creating its own marketing materials, doing its own printing and advertising. Issner has now consolidated that function. “We’re getting the biggest bang for our advertising dollar now,” he said.

Issner and the Futures Committee are also looking for revenue enhancements and are considering changes to membership dues and other pricing. “The ultimate goal is to break even,” Lester said. “We’ve got more work to do. There isn’t a day goes by that some form of opportunity doesn’t present itself. This puts us in a position where we’re hopeful the deficit can be eliminated.”

After months of due diligence, the Jewish Community Center’s Financial Oversight Committee (FOC), tasked with taking an extensive look into the JCC’s financial challenges, presented its analysis to the Jewish Federation of Metropolitan Detroit and United Jewish Foundation boards of directors at a combined meeting on June 26.

Photo1_JCCThe JCC building in West Bloomfield

The FOC has been meeting weekly since January, working closely with interim JCC CEO Jim Issner, according to Dorothy Benyas, Federation CFO. The FOC’s analysis shows that the “operating loss was worse than we originally projected,” Benyas said.

According to the committee’s analysis, the projected operating deficit for the JCC from May 31, 2014, to May 31, 2015, is expected to be about $1.3 million. That higher-than-expected loss cannot be attributed to any one thing, cautions the committee.

“It came from across the 40 different units that make up the JCC,” said Matt Lester, chair of the FOC. “There is no one thing to point to, nothing glaring or obvious that needs to be fixed. We are going line by line, program by program, expense item by expense item to find efficiencies $1 at a time.”

Under Issner’s leadership, efforts are under way to chip away at that deficit. During the past two months, about $400,000 in operational savings have been identified and fundamental best business practices, including more rigorous accounting standards previously lacking, are now being overlaid on the Center.

According to Lester, this fiscal year, projected losses from operations have virtually been cut in half and now stand at $700,000. Most of that, he says, is attributable to expense reductions, including a freeze on pension benefits for non-union employees that netted $90,000 in savings, salary reductions through attrition and other reductions.

“There was no magic bullet,” said Federation CEO Scott Kaufman, “just lots of little things. But we know we can’t cut our way to financial stability.”

JCC’s New Culture

After Issner, widely known as a turnaround specialist, came on board four months ago, each of the 40 different business units within the JCC were required to more intensely analyze their budgets and put forth specific projections, Lester said.
Issner said the Center is working in tandem with Plymouth-based Financial One, which is acting as the Center’s emergency financial adviser, as well as the Financial Oversight and Futures committees on internal financial controls and getting the center’s balance sheet in order. He has been concentrating on adding rigor to the financial management of the Center.
“We’re running everything as a business,” Issner said. “This is a complex organization. I’m trying to bring everyone together to understand how the Center operates as a whole. We need to understand where our money is coming from. We’re looking closely at financials to ensure every dollar is properly spent and accounted for.”
Issner has found several ways to improve efficiencies, in marketing and advertising, for example. Prior to his taking the helm, each of the Center’s many businesses was creating its own marketing materials, doing its own printing and advertising. Issner has now consolidated that function. “We’re getting the biggest bang for our advertising dollar now,” he said.
Issner and the Futures Committee are also looking for revenue enhancements and are considering changes to membership dues and other pricing. “The ultimate goal is to break even,” Lester said. “We’ve got more work to do. There isn’t a day goes by that some form of opportunity doesn’t present itself. This puts us in a position where we’re hopeful the deficit can be eliminated.”

Jackie Headapohl | Managing Editor

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