Tag Archives: cover-up

IT IS TIME FOR THE JCA BOARD TO ASK FOR STUART WACHS’ RESIGNATION. IN THE ALTERNATIVE, FIRE HIM.

15 Thursday May 2014

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I do not know Stuart Wachs.  I have criticized Stuart Wachs’ stewardship of the JCA based upon empirical analysis of the JCA’s IRS 990s and the IRS 990’s from the previous JCC he ran. I have criticized him for a lack of disclosure and truthfulness about the Solar panel scandal that has rendered the project both costly and useless, for not donating to the JTO, while urging the rest of the community to do so, and for having Joel Kramer, the Chairman of the JCA, call me up to see if I had a hidden agenda in writing about their malfeasance and ineptitude with the JCA’s assets.  Most notable in Joel’s call to me was his assertion that “the masses” could not know about the engineering report I published and that the “masses should not know” because the report was marked confidential. Evidence of managerial ineptitude is not a trade secret, as I pointed out to Joel and Stuart.  I found it notable that Joel, who is a CPA and was the Treasurer before he became the Chairman of the JCA, told me that my numbers are wrong and that the Solar panels would not cost nearly what the report indicated.  However, Stuart wrote to me in a letter (that I published in this blog) that the solar panels will actually cost the community nothing because he re-negotiated the deal, and that there is an “opportunity for savings”.  Joel Kramer has a pretty good reputation in his field, so I am guessing that he is telling me something closer to the truth.  Stuart, who has lied to me in what he has written to me, has exhausted my ability to find him credible. I am aware that giving the benefit of the doubt to Joel Kramer on this subject is akin to trying to decide who was the better sailor: the Captain of the Titanic or his First Mate?

A quick summary for the uninitiated.  In 2010, the Jewish Federation of Greater Phoenix and the VOSJCC were finally run into a ditch by an inept board of directors who had overseen the building of our own golden calf, which is what I euphemistically call the Ina Levine Jewish Community Campus.  The Campus is routinely utilized by approximately 4% of the Jewish population of the Greater Phoenix area (this year the VOSJCC consumed 30% of the JCA’s funding allocations) and is comprised of a financially unsustainable collection of buildings that house the detritus of a failed Jewish high school, a poorly designed health club, a huge collection of costly and economically inefficient solar panels, the offices of the JCA, and several other Jewish agencies.  The JFED spent millions of dollars propping up the Campus that they built, and the propping up of the Campus contributed very heavily to the destruction of millions of dollars of donations to the JFED.  The inept leaders of the JFED who oversaw the creation of our golden calf got it into their heads that this was the apex of Jewish achievement for the Jewish Community, completely ignoring the fact that two previous JCC’s went out of business here.  They were somehow oblivious to this and undertook this new adventure with other people’s money which ended up in the same position.  So, after 6 years on the board, Bob Silver (who was the board Chair of the JFED in 2010) finally figured out the the Federation had a “structural deficit” as he called it, and decided that the only solution was to shut down both institutions, lay off half of the staff, merge them together under a new name (the Jewish Community Association), and start again.

Unfortunately, the board that oversaw this entire fiasco actually thought they were qualified, apparently based upon their previous lack of stewardship, to go out and hire a new leader for the Jewish Community.  This is how Stuart Wachs ended up darkening the Community’s door.  At this point in the story, it would be an excellent time to review an article that appeared today in ejewishphilanthropy.com entitled I Thought You Said You Wanted To Run Things Like A Business. The article is on point, and will take us to the next fiasco.

Stuart Wachs’s entire executive management team that he hired, since he arrived here, has been fired or has resigned, except for Alison Johnston.

1) Anthony Slayen – Vice President of Operations and Innovations – hired by Stu Wachs in August, 2012, fired or resigned in February 2013: 7 months

2) Kimberly Kur – Chief Development Officer – hired by Stuart Wachs in April 2013, fired or resigned in February 2014: 11 months

3) Jennifer Grossman – Vice President of Marketing – hired by Stuart Wachs in August 2012, fired or resigned  in April 2014: 21 months

Not Hired By Stuart:

4) Debbie Siebels – CFO – Seven years at JCC and JCA, abrupt resignation this week.

Executives hired by Stuart Wachs who are still in place as of the date of this article.

5) Alison Johnston – Chief Operating Officer of the Jewish Community Center, hired June of 2013.  This is a curious hire by Stuart because Ms. Johnston was previously at Ballet Arizona, and during her year there as executive director, their revenue decreased from 5.5 million dollars to 3.4 million dollars, a decrease of 38%, and their operating surplus decreased from 2.8 million dollars to $856,000, a decrease of 69%.  Another curiosity is that Ms. Johnston has listed on her CV on LinkedIn that she was the COO of Petsmart Charities Inc. for years spanning 2010 – 2012.  However, there is no mention of her in their IRS 990’s, which by law must list their officers and board directors, and Chief Operating Officer is an important position.  I just don’t think it was her position.  In fact, she was a Senior Director of Operations, which is a different position than the Chief Operations Officer of a $40,000,000 charity.  But she is not the only person to pad their resume, so in the interest of full disclosure, I admit I lied on my LinkedIn CV too and have claimed that I was a tofurkey fabricator at Akbar and Jeff’s Tofu Hut from 1981 – 1985.  I actually was employed as a marketing representative at IBM selling copiers, and I just thought it was less embarrassing to say I was fabricating tofurkey.  I am sorry.  But I do wonder what qualifies Ms. Johnston to run the VOSJCC.

6) Ofer Alphabet – Chief Information & Campus Operations Officer at Jewish Community Association – I have no idea what a Chief Campus Operations Officer does, but he has been there for a month and Stuart knew him from Minneapolis.

If Stuart is such is an accomplished manager and our great hope for the Jewish Community of Phoenix, how is it that every senior officer of the JCC that he hired has quit or been forced to resign? Turnover of that magnitude from his hand picked subordinates is a widely acknowledged sign of terrible management.  I suppose that we will soon learn why Ms. Siebels resigned, and we may have to look no further than the 2013 IRS 990, which is for some reason, not yet available.

I have excerpted the following information from an article by Ralph Heibutzki from a company called Demand Media.

Company Lacks Good Management

An employee’s relationship with his supervisor is often the most decisive factor in assuring his loyalty, according to “Forbes” magazine’s January 2012 article, “Why Your Employees Are Leaving.” Good managers who connect with employees are more likely to retain them, even if they’re making top money. Bad managers don’t communicate regularly with their team members, or express appreciation for their work, which makes them more likely to quit.

Employee Workloads Are Too High

Turnover can serve as a wake-up call to revisit workloads that trigger significant burnout and stress, according to a 2006 survey by the National Council of Crime and Delinquency. The council interviewed 297 former child welfare and juvenile justice workers, to determine why they quit their jobs. Sixty-five percent of the participants identified large caseloads as a factor in their resignation, while an additional 35 percent would have stayed on the job if their workloads had been more manageable.

Jobs Don’t Match Expectations

Thirty-five percent of 19,700 U.S. employees surveyed by the Saratoga Institute quit during the first six months because they don’t like something about the job, management consultant Leigh Branham states in his February 2005 article, “The Seven Hidden Reasons Employees Leave.” This situation results when managers soft sell a job’s less appealing aspects, asserts Branham, writing for the Center for Association Leadership. Once workers discover the truth, however, they’re out the door, which further aggravates a company’s turnover issues.

Opportunities Are Nonexistent

Opportunities for career advancement and growth play a key part in determining how long employees stay with a company. Eighty-five percent of the employees in the Saratoga Institute survey identified career growth as a key reward, but only 49 percent saw companies taking measures to promote it. Managers compound the problems by failing to praise employees who exceed expectations, Branham says. Staff members who feel devalued or unrecognized, in turn, are more likely to find an employer who acknowledges them.

Work Environment Is Stressful

A continual exodus of talent can indicate a stressful, unstable work environment of ever-changing job titles, workloads and supervisors. One reality of this situation is that some people lose their jobs, which doesn’t inspire the survivors to put down roots, according to “Forbes” magazine. This situation also makes itself felt through departmental turf wars that pit employees against each other. Faced with these situations, employees will opt to go elsewhere than stay in an unhealthy atmosphere.

If we want the best results from the JCA, then we must have the best people running that organization.  Unfortunately, Stuart is unable to create a culture of excellence and exceptional performance, and his hand picked executives have either left of their own volition or been terminated.  Stuart either has an inability to hire the right people, an inability to get along with people he hires, or he hires people who are incompetent and he has to fire them.  Stuart wrote to me and told me that it will take 3 – 5 years to turn around the organization he inherited, which might mean another 20 executives rotated through the management suite of the JCA.  In the meantime, the losses will pile up, the Campus will be propped up at the expense of the elderly and infirm, Jewish day school education, and helping kids get to Israel to spend quality time there.  Stuart will continue to collect his enormous salary, and we will be much further on along the road of destruction.  Keep that in mind when you are asked to donate to the JCA.

JCA LEADERSHIP DOESN’T GIVE TO JTO – THEIR REPLY TO SOLAR FIASCO: THE MASSES MUST NOT BE TOLD

02 Friday May 2014

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UPDATE – STUART WACHS HAS REPLIED TO THIS ARTICLE.  PLEASE SEE STUART’S 2 EMAIL REPLIES TO ME AT THE BOTTOM OF THIS ARTICLE. – MY REPLY TO STUART’S EMAIL WILL BE IN GREEN INK – INLINE WITH HIS EMAIL REPLIES.

Although I am not 100% certain of this, it seems to me that if the Jewish Community wants better results from the JCA, then maybe the community should be focused on a quantitative analysis of the performance of our leaders.  I would think that this is a reasonable and necessary yardstick by which we can measure performance. There is too much at stake for the community to resort to ad hominem attacks that, in the words of Stuart Wachs, the President of the JCA, “do nothing to help.”

Mr. Wachs recently wrote to me, voicing an opinion about my article about the solar panel disaster that the leadership of the JCA did not disclose to the community, which will result in $2,000,000 in excess cost to the JCA (directly contradicting Bob Silver, the Chairman of the JCA at the time, in the two interviews that he gave to the Jewish News. In each interview, Mr. Silver indicated that the solar panel project would cost the community nothing). The blog post can be accessed by clicking here.  Mr. Wachs’ well-reasoned reply to my post is below:

From: Stuart Wachs <swachs@jewishphoenix.org>
Subject: Re: Greetings
Date: April 27, 2014 at 2:30:03 PM MST
To: Mark Greenburg <mark.greenburg@me.com>

Clearly you are not the honest person you portray yourself to be. Even knowing your history of blogs against the organization I took over I responded including a willingness to meet and answer your questions / concerns. Then I see the blog you put out with you doing exactly what you are accusing the JCA of doing. Giving out miss or partial information.

I have dedicated my career to Jewish community and have always been honest, ethical and focused on impact of the community I was serving. Your damaging words do nothing to help and you could not even give me the benefit of the doubt as the new leader of the organization to address your questions as I said I would do.

As Mr. Wachs pointed out in his reply, my article is incorrect because: a) he believes I am dishonest, b) he offered to answer my questions, and c) he is a dedicated servant of the Jewish Community (now with a current salary of more than $240,000 per annum), therefore, there is no solar panel power disaster at the JCA.

In fact, I received a phone call from the JCA’s Board Chairman Joel Kramer today (05/02/14) and he informed me that I was wrong to publish the article about the solar panel problem because the report that was prepared for the board was meant to be confidential.  Mr. Kramer said to me:

Just to let you know, you are a very bright guy, and I’m sure you can think of a number of reasons why things might be confidential and they’re confidential for a reason, and that reason isn’t not to be transparent. That reason isn’t not to be transparent. That reason has to do with other things related to the issues.  And again, I am sure you are a very bright person, but just because things are issued as confidential isn’t intended because it is not intended for the masses because of other reasons, not because the masses can’t, it is because the masses shouldn’t or can’t know now, because what other things are going on, and…..    There is a reason for it, and it does not help publicizing that reason and it does us no good.  There is no benefit to the parties to publicize that…

I was, and still am confused by just about everything that Mr. Kramer told me, and it was very nice for him to compliment my intelligence, and everyone certainly appreciates a compliment. But the one thing I took away from our conversation was his insistence that the reason for the confidentiality of the solar fiasco report was that, as he put it, the masses should not know about this or can’t know now.  When I asked him why, I was just told that there are reasons.  The only possible reason to sit on this information would be if there are pre-litigation settlement discussions (with the parties that induced the JCA leadership to enter into this solar fiasco) and the solar company is afraid of publicizing any settlement paid to the JCA. Nevertheless, the JCA would have to disclose the inbound money from such a settlement on their Form 990, and Mr. Kramer assured me that there was no litigation over this solar panel fiasco, just as he so eloquently put it, the masses must not know.

In analyzing Mr. Wachs’ performance as a dedicated leader, one must start at the health club organization where he worked before arriving at the newly formed JCA. Mr. Wachs previously served as the Executive Director of the Jewish Community Center of Greater Minneapolis.  Although I have not asked anyone who was a member of the search committee which selected the JCA’s new President, I must give the committee the benefit of the doubt, err on the side of caution, and assume that no one on that committee had access to the internet and therefore was unable to access the IRS 990’s of the organization that Mr. Wachs was leading.   Their IRS 990’s are available and online, going back as far as Mr. Wachs’ 7 year tenure in this position.  The data for this chart is available on line and located by clicking here.

SABES

So, for the seven years that Mr. Wachs was at the helm of the Jewish Community Center for Greater Minneapolis, the organization had cumulated deficits of more than $2,000,000.  I did subtract from these figures, a onetime gift of property and equipment from the Jewish Federation of Minneapolis in an amount equal to 2.8 million dollars, in 2007.  For whatever reason, a gift of property and equipment to a non-profit was taken as income, instead of as paid in capital as it would be to a for-profit enterprise, and I suppose that this is correct because since they are not paying taxes and since they have no equity holders, it is immaterial from a tax liability standpoint.  It is not immaterial when masking the performance of a non-profit’s operations.

So, it looks like that after serving as the executive director of the JCC of Greater Minneapolis and presiding over more than $2,000,000 in operating deficits that this qualified Mr. Wachs to become the new president of the JCA of Greater Phoenix.

I am not sure that it is completely true that the best indicator of anyone’s future performance can best be indicated by their past performance, so I think that we should take a look at our JCA today.

I retrieved the 2012 IRS 990 yesterday by visiting the JCA.  They were very courteous and gave me a copy within ten minutes,  It is the first time I visited their offices and their staff was very polite and professional. If my recent memory serves me correctly, the purpose for uniting the JCC and the Federation was to improve the financial performance of both institutions.  Unfortunately, the numbers indicate that this has not yet happened. The chart below shows that the loss, once the JCC and JFED were combined, increased 67% in the first year to more than $967,000 dollars, increasing from a combined loss the year before for the two institutions of $577,480.  I find the chart below to be completely revealing.

JFED LOSS JCA

While the most recent deficit in 2012 of $967,436.00 cannot fairly be attributed to any one person, I do think that the definition of insanity is doing the same thing over and over again and expecting a different result.  I am wondering where are the benefits we are supposed to see from the consolidation of these two organizations.  I have no quantitatively analytic reason to believe Mr. Wachs will be effective in running the JCA. I do know that he just added another $967,000 to his aggregate losses as the President or Executive Director of the non-profit organizations that he has run over the last eight years, losses that aggregate at over $3,000,000 dollars.

One of the most interesting aspects of the phone call I had with Mr. Kramer was when I asked him what the purpose of his call to me was.   Mr. Kramer indicated that Mr. Wachs had showed him a response that he was prepared to send to me, and that after speaking with Stuart Wachs, Mr. Kramer said to Stuart that he wanted to know,

What is Mark’s purpose in all of this?  Because I am not sure an exchange is worthwhile for any party until we understand the purpose of his blogs and his writings.  Is there an end game, is there an intention, is there a purpose, or just a desire to write.

When I told Mr. Kramer I did not understand his question, specifically what he meant by what was the purpose of my blog, he said,

You are posting blogs, and the purpose of the blog is to what?

I am still at a loss about this question because I think that their question is irrelevant.  However, I do not think the reason that they asked the question is irrelevant because it demonstrates a paranoia in their thinking as if I must have a hidden agenda in writing the blog.  Rather than dealing with the issues I have raised regarding transparency, accountability and sound financial management or addressing the fact that I am asserting that their stewardship of these sacred Jewish assets can be quantified as abysmal, they seem to focus on me, thinking that if they just uncover my secret SMERSH membership card, that all of this mess will blow away.

My last questions to Mr. Kramer – Stuart and the JTO

It is reasonable that people have differences of opinion about whether the JTO is good or bad.  Years ago I supported the JTO, took advantage of the 1 for 1 tax credit, and took the deduction.  After discovering an issue with the governance of the JTO, I stopped giving, voiced my concerns publicly, and the JTO changed their governance policies.  I still believe that they have a short distance to travel before they are 100% Simon Pure and Lily White, and the fact that there are board members of the JTO whose children are benefitting from JTO scholarships raises a few eyebrows, but they are a paragon of virtue and financial disclosure compared to the JCA.  Also, and by law, they must pay out in scholarships 90% of the money they raise.  So if one supports the JTO, it is clear that by and large they are doing the job they are supposed to be doing and Linda Zell should be commended on that point.

I have been given a brief tour of the JTO’s donor list, and from what I have seen, Stuart Wachs did not give to the JTO in 2012 or 2013, and I have asked him why, and I know he has seen my email (because Mr. Kramer told me that he saw Stuart’s reply and that is why he was calling me, to find my “purpose”).  I still do not have his answer, and we as a community are entitled to know why.   This is especially relevant because Mr. Wachs just published a Commentary in the Jewish News, (in response to criticism about the fact that 46 cents of every allocable dollar that is donated to the JCA is wasted by expenses, expenses that will most likely be hidden from “the masses” that Mr. Kramer spoke to me about), and Wachs implored “the masses” to support the JTO.  Because it is clear from Mr. Kramer that he and Stuart are not members of “the masses”, the JTO deduction would obviously not apply to Stuart Wachs and his $240,000 salary.

Do you remember that great scene in A Few Good Men when Jack Nicholson explodes at Tom Cruise?  If you don’t remember the scene, it is worth watching and you can see it by clicking here.  This is your JCA.

My final comment is this.  Mr. Kramer explained to me that Stuart is a very busy executive and in a dismissive way indicated that it takes too much time to write a response to what I have written.  I explained that I had no desire to pull Mr. Wachs away from his obligations in training for this weekend’s marathon, and Mr. Kramer scolded me for being sarcastic.  I am sorry if I offended Mr. Kramer, but as a member of “the masses”, my etiquette, education and the manner in which I conduct myself obviously needs improvement.  I promise to get to work on that.

THE FIRST EMAIL REPLY TO THIS ARTICLE FROM STUART WACHS

From: Stuart Wachs
Sent: Saturday, May 3, 2014 5:38 AM
To: ‘Mark Greenburg’
Cc: Joel Kramer
Subject: RE: Good evening

Mark

There is in fact a number of things that are inaccurate in your blogs and in your email. That is the problem when you take partial pieces of information and make the assertions which you made.

– I do contribute to the JTO to the highest tax credit level. I do not believe that this is accurate and I will not be able to retract this until I see cancelled checks or credit card receipts for the two years in question.
– The Solar project will not cost the Association or community anything. When I arrived here I discovered a problem with the current structure and we worked closely with the Solar company for many months to restructure the arrangement so that it will not have any negative impact on the organization or community Why would Mr. Kramer call me yesterday and wax on eloquently about the fact that the masses are not to be told about this problem because it does the parties no good, if there is no problem?  I do not believe this assertion, but I am more than willing to sit down with you and have you explain this to me, and if I am wrong, I will also print that I am wrong.
– In your most recent blog you attacked my record at the Minneapolis JCC. If you called any of their board leadership or the Minneapolis Federation leadership they will tell you I was applauded for turning around the organization from a mission, engagement and financial perspectives. If you go directly to guidestar and look at the financial performance my last three years the 990’s show a net operating results 2009 – ($114,000), 2010 – $119,000, 2011 – $263,000. The search committee did do extensive checking and referencing on me.
– As for operating results of the VOS JCC, Federation and now Association. Both of these organizations have had a number of years of poor financial performance. I agree, the operations of the JFED and the JCC were disgraceful and I applaud your candor in this admission.  Why are the board members who oversaw this disgraceful performance still on the board?  Is it that they do not understand what you have written here about the past performance?  What can they possibly add that will be helpful to you in your attempt at turning this devastated agency around?  How does their expertise in wasting the community’s assets help you do your job?  I was brought in to help turn them around as I have been successful at doing at previous agencies. A turn around does not happen in one or two years, can take significant initial investment and we are making some positive progress. Or measurement will be over the next 3 to 5 years in net operating results, campaign achievements, engagement and impacts on our community.
– I would be happy to walk through our financials and our financial modeling. While your comment about charity review and others looking for a 10% “overhead” is not at all accurate, as a matter of fact they (who is “they”) came out a few years ago in a public statement that overhead is not an accurate way to measure a not-for-profit. Our operating budget includes much more then overhead however as we add resources to grow campaign and impact the community, our campaign growth will greatly outpace any expense growth and the percentage of our operating budget to campaign will decrease. It is important to also understand that the Association raises other dollars and has other earned income outside of the campaign so simply taking the operating expenses as a percentage of the campaign total is not an accurate measure.

Your latest blog was again done in an inaccurate and attacking way now directed at Joel Kramer and myself. This is not correct and I have very accurate notes of my conversation with Joel Kramer from the call he placed to me.  I completed classes in court stenography when I was 16 at the Ohio Valley Business College as a way to cope with my very slow and illegible hand writing and I take very accurate notes.  If Mr. Kramer was not forthcoming to you about what he said to me on the phone, I will be happy to print out a complete transcript of the conversation.We are both very dedicated to making the Association have a growing impact on our community. My reputation and commitment over my career and since I have arrived here stands its own. Given the fact that we have never met and you have never engaged in a conversation with me or asked me any questions you seem to have a lot of opinions about who I am and how I and the Association operate.

You also mentioned you have a number of documents form a “leak”. First of all we want to let you know that if those are not pubic documents and are clearly marked confidential that unless you officially received them from us, which you have not, they cannot be read and distributed. Your focus on this issue of confidentiality and  Joel’s focus on the same issue during our phone call of yesterday and your instruction to me is absurd.  Your concern about keeping secrets, rather than being open and transparent to the community in your actions and deeds, is the entire focus of the blog. Your assertion that because a document is marked confidential means that it is a trade secret, or proprietary, would be laughed out of court. Documents that demonstrate ineptitude of management are not protected by any laws I am aware of, and if you are claiming some type of privilege, there is none.  In fact, the better argument would be: The non-disclosure of the problem highlighted in the report is a type of fraud that was perpetrated on community members who willingly donated to the JCA without knowing the true extent of the financial situation that has engulfed the JCA.  If you are claiming that documentation of  JCA and prior JFED financial ineptitude are somehow protected or proprietary, you should first sue the IRS for forcing you to make your Form 990s public.  We are however willing when we meet to address your questions and also request the return of any confidential and proprietary.  I am happy to meet with you.  I will not keep any details of the meeting confidential, so you must know that in advance.  I asked Joel Kramer yesterday in our phone call how the bad debt of the JCA increased in 2012 to $674,000 from about $110,000 the prior year.  Joel informed me he is a CPA.  He is listed as the Treasurer of the JCA on your tax return.  He informed me that he did not know the answer to my question. So, if this is an example of  what disclosure will look like and what information will be revealed to me in the meeting you are proposing, you should be prepared to be reading about it here.

Please let us know if you are willing to sit down with us so that we can make sure you have a complete picture and we can answer your questions and address your concerns.

Stuart Wachs, President & CEO
Jewish Community Association

THE SECOND REPLY TO THIS ARTICLE FROM STUART WACHS – More comments below.

From: Stuart Wachs <swachs@jewishphoenix.org>
Subject: RE: Good evening
Date: May 3, 2014 at 6:28:21 AM MST
To: Mark Greenburg <mark.greenburg@me.com
Cc: “Joel Kramer”

Mark

I also just took a little time to look at the figures you are using to paint the financial picture of my time in Minneapolis. First off the years you would need to use are 2005 – 2001. I was not running the JCC in 2004. If I used your numbers for those years and added in the 990 numbers for 2011 it would be (884,000) not (2,000,000). (this was with your own selection to adjust the one ear and remove the one time gift of equipment and property from the federation. It is impossible to try understand real operating gains/losses from a 990 in non-profits for a number of reasons including how GAP requires certain expenses and revenues to be recorded this does not always reflect operations. If I accepted this statement as accurate, which I don’t, then this is even more of a reason for you to be more open and transparent, not less.  Why not make your books and records, after provisions for donor privacy are made, open to the public?  Why not make your audited financial statements open for review, as many responsible 501c3’s do?  Why not answer some of the following questions that everyone should know?

1) Exactly how much does it cost to run the JCC?  The community needs to know that because our assets are going into supporting the JCC, and now that the two entities are combined, how does one know what is a JCC expense and what is a JCA expense?  

2) Is part of the bad debt expense a write-off of JCC rent?  

3) Has a study ever been done about the long term viability of the campus?  Do you know whether or not you are just beating your head against a wall and trying to salvage a JCC operation and a campus that might not ever be able to be operated without a deficit being created?   As the leader of the JCA, now responsible for this sacred trust, do you ask these questions?  I would suggest that the JCC will never be able to be operated efficiently because it is not important to the Jewish Community of Greater Phoenix.  It should not be about applauding you for narrowing a loss, (as you have said was something you accomplished in your previous job), but whether we should continue supporting money-draining and possibly anachronistic institutions that might never be able to operate without a deficit?  

4) Would it not be more intelligent to spend the precious assets of the Jewish Community by supporting Jewish Education and reducing private school tuition for the community’s children, or an increase in aid to help get more kids to spend time in Israel, or more support for the aged and elderly?

You were hired by a board that destroyed the JFED and built an unsustainable campus and JCC that I am guessing can not be operated profitably.  Instead of being tasked with doing what is correct for the Community, you have been tasked with doing something arbitrary, which is to try and make the people responsible for this mess look presentable by saving their campus. Just as you chose to remove the one time transfer of property there are a number of expenses in some years that do not reflect operations for example how depreciation is reflected, some expense related to the property transfer your removed and others in other years. Even a well informed and knowledgeable board needs the auditors to walk through a 990 and explain the variances to operations and why numbers are reported that way.

On the surface from the way you presented numbers look at the miraculous improvement from 2004 to 2005. While I would like to say I improved operations by over one million dollars in my first year, which is what your numbers show, that is not accurate. What I can tell you is that I led a very successful financial turnaround for an agency with a 15 plus year history of major operating deficits to during my 7 years here we had all but one year at break even or better based on true operating results.

Stuart Wachs, President & CEO
Jewish Community Association

8 Million Dollar Solar Scandal and Cover-up by JCA

26 Saturday Apr 2014

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In 2012, the Levine Campus embarked on a great solar power project that was created under the leadership of Bob Silver, the President of the Federation, during a tumultuous period when our leaders finally succeeded in running the Jewish Federation into the ditch. This was certainly not Mr. Silver’s fault alone, but according to the explanation given at the time, the leadership of the Federation just figured out, after many years on the Board, that the Federation had a “structural deficit”. There is a very detailed analysis on this blog in an earlier post entitled: Smarter Jews Needed, Or Maybe We Just Need A Few Decent Ones. A Salute to the Federation’s New Donors.

I questioned the qualifications of the leadership of the Jewish Federation and the ineptitude of their Board of Directors.  I singled out Bob Silver at the time and wrote:

Bob Silver should also step down at once. He has served on the Board since 2002, and if he is just now, in January of 2011, discovering that the Federation has a structural deficit, then I question what he has been doing as a member of the Board for the last 9 years. See article from Jewish News. Additionally, Mr. Silver was quoted as saying that they have done a very poor job in engaging the community. So, the next question that begs to be asked is why is Mr. Silver, a Board member for the last nine years during which this disaster was unfolding, now tasked with solving the problem? What specific skill does he now possess that has been dormant for the last decade? For that matter, the following board members, who have also served for the last nine years, should also step down:

Ann Zinman, Lanny Lahr, Joel Bernick, David Weiner, Sandra Scheinbein, and Barry Zemel (Zemel served since 2005)

In the January 13, 2012 issue of the Jewish News, we were treated to a story entitled Going green, which highlighted a a new solar panel project for the Levine Campus.  Mr. Silver was quoted in the article:

“This no-cost approach to ‘go green’ was perfect,” said Silver in the release. “We knew this would make a huge impact economically for the campus. It demonstrates to the 25,000 people that walk through our doors each month that it is the right thing to do financially and environmentally.”

First, there are not 25,000 unique visitors to the Levine Campus each month. That would equal 1/3rd of the Jewish population of the greater Phoenix metropolitan area.  It is closer to 3,000 unique visitors, but that is for another day.  Second, we were treated to another article when this no-cost solar project was completed, entitled Campus completes greening.  The article highlights include:

The green initiative kicked off about 18 months ago with a campus recycling program. In January, a solar panel thermal system was installed by Arizona Solar Concepts. The panels, located on the campus roof, are expected to provide energy to more than 70 percent of the facility’s thermal hot-water heaters, according to a VOSJCC press release. The system is scheduled to turn on at the end of the month, said Dae Williams, campus facilities director.

The next phase of the project, through Green Choice Solar, involved installing about 400 solar canopy parking spaces in the campus parking lot. In addition to providing covered parking for campus visitors and employees, the panels are expected to meet 90 percent of the campus’ energy needs and are anticipated to save 11 percent in APS costs, according to the release.

The renovations were done at no cost to the community, Bob Silver, association board chair, told Jewish News at the start of the project (“Going green,” Jewish News, Jan. 13, 2012). The vendors took advantage of tax credits, government programs and rebates run through the utility companies.

Here is what we were not told.  Instead of saving the JCA more than $6.6 million dollars in energy costs over a 25 year period, it will now actually cost the JCA more than $2,000,000 in higher energy costs.  In the first year alone, this so called “no cost” solution of solar panels that the leadership of the JCA was happy to publicize actually cost the JCA more than $120,000 in higher energy costs.  I have a copy of the report that was commissioned by the board of directors of the JCA and prepared by Energy Management Advisors, LLC.  Download the report by clicking  ILJCC Solar Installation Situation.

This is everything that is wrong with the JCA.  Instead of being truthful and informing the Jewish Community that they made a serious mistake by investing in the solar project and that there will be an 8 million dollar swing in the benefit projection, which will ultimately cost the JCA more than $2,000,000 over 25 years and has already contributed to a cost increase in their energy bills of $125,000 in the first year, they have told the community nothing.  I would say that higher energy bills of $125,000 per year contradicts the “no cost to the community” statements made by Mr. Silver.

I think it could be argued that the Jewish News has not done the job they are capable of doing and has done a disservice to the community by sitting on this story.  As a community newspaper, they must walk a fine line between appealing to advertisers and informing us all what is going on.  If the story was important enough for the Jewish News to run two stories on the wonderful greening of the Levine Campus, it was important enough to tell us that the whole project has been a financial disaster, not the “zero cost to the community” wonder that they have written about. The very community the Jewish News is supposed to serve is being trampled under foot by JCA management and the Jewish News appears complicit through the sin of omission.  The Jewish News of Phoenix sat on relevant news of this disaster that would clearly make people question or change their giving strategy after being pressured by the JCA.  They must decide whether or not they will a be a newspaper that informs the community of the issues facing the Jewish Community or a newspaper that focuses on appeasing advertisers. It stands to reason that people have given to the JCA not knowing what the Jewish News knew about this fiasco and more money will most likely be unnecessarily squandered.  This is unfortunate.

Circling back to the subject matter of my last post, this is one reason that 46% of every dollar you give to the JCA goes up in the smoke required to run the JCA.  Gross financial mismanagement, a lack of transparency and accountability, and the sins of commissions and omissions. If the JCA was a public company, these omissions would spark lawsuits and most likely an SEC investigation.  To ask the Jewish community to donate to the JCA, when their leadership is not truthful about their managerial errors and the true state of their projects to protect our future, is an outrage and a moral failing from people we are supposed to be able to trust.  The JCA is nothing more than a financial organization that can not tell the truth to people from whom they want to raise money.

PS – At the rate I am being sent information, I might have to quit my day job.