JFMC elected to finance building renovations in 2000 through a bond issue rather than paying for therenovation directly with capital campaign gifts. Newberger Hillel is charged approximately $55,000 per year to pay off this bond. JFMC includes the interest payout on the capital gifts in its calculationof its support, despite the fact that this element of the JFMC contribution is offset almost dollar for dollar by the bond payback expense.3) Deficit Reductions. JFMC's calculation of its support in FY2011 included funds to cover that year’sdeficit, which we believe (and can document) includes substantial over-charges (see below).
A Note on the Building.
The Newberger Hillel Center building was assigned to JFMC in 2000 for $1.00.As consideration for this asset, JFMC agreed to raise $1.6 million for Hillel in a capital campaign. Theyraised only $869,000. Had JFMC met their commitment, Hillel would have had substantially greater cash flows from this endowment -- at JFMC's standard 7% draw, for example, Hillel would have had anadditional $50,000, an amount that would have covered the bond issued to finance the rehabilitation of the building. Instead, Hillel not only covers the bond out of other funds but also pays JFMC rent for the building.
2. FISCAL RESPONSIBILITY
“Annual budget deficits averaged $100,000 per year.”
JFMC’s calculation of the deficit is in error for two reasons. First, they charge Newberger Hillel above-market costs for facilities management, infrastructure services, and fringe benefits. Second, as noted above, they are charging Hillel for their failure to complete the capitalcampaign as agreed in consideration for obtaining the building.
Overcharges. JFMC charges Hillel for facilities and other infrastructure expenses and also managesHillel's payroll, charging Hillel for fringe benefits provided to staff. As part of our negotiations withJFMC, we obtained firm verifiable quotes from outside vendors for these services that were $100,000less per year than the comparable JFMC charges.
Capital campaign. As noted, JFMC did not complete its end of the bargain when it obtained the building for a dollar. Had it provided the agreed upon consideration, our endowment, and thus our cash flow from the endowment, would have increased.
“Your utter refusal to engage in any constructive discussion of fiscal responsibility.”
We offered to eliminate $120,000 in expenses, multiple times.
When we developed the FY2012 budget in March 2011, we were prepared to eliminate $120,000 inexpenses related to building maintenance, equipment, and personnel benefit charges (JFMC chargesHillel for benefits even for personnel that do not receive benefits), which would have achieved a balanced budget. All of these expenses were charged by JFMC, and we identified less expensivesources for these services and equipment. We found, for example, that we could purchase utilities
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