EXCERPT FROM: Foster's Daily Democrat
By Leslie Modica
DOVER — A nonprofit that provides child care primarily for low-income families is struggling to pay its rent in the McConnell Center and now the City Council must decide if it will increase its planned subsidy while the McConnell Center continues to operate in the red.
The Dover Children's Center has asked the city to continue funding its full rent subsidy for the remainder of the fiscal year as the nonprofit continues to grapple with the effects of a poor economy and unexpected expenses and loss of revenue.
If approved by the City Council, that request would come at a cost of nearly $27,000 more than is planned in the fiscal year 2010 budget, which was already amended earlier this year to accommodate a loss in state revenue.
And it also comes at a time when the McConnell Center is operating a more than $600,000 loss as of Aug. 31, which has drawn ire from critics but has been defended by city officials as expected in the first years of the McConnell Center's operation. It has also been noted by city officials that because the McConnell Center was built in part to cater to nonprofit organizations, turning a profit quickly on the building would be difficult.
The city subsidized the Dover Children's Center's rent by $35,193 in fiscal year 2009, however that subsidy had been planned to decrease to $8,248 for fiscal year 2010.
But in a letter to City Manager Mike Joyal, Dover Children's Center President Christine Rockefeller said the organization suffered a significant loss in revenue when the Dover School District changed its school bus contractor, which opted out of busing students from schools to the center.
That change, Rockefeller said, has "made it impossible for us to provide after-school care for school-aged children, despite a very substantial need for such care within the City of Dover."
Rockefeller said revenue for the Dover Children's Center was further cut over the past three years of its lease as the United Way cut its grants by more than half — from the $32,000 it has received annually for "many, many years" to the $13,520 it is receiving in fiscal year 2010.
"While we strive to make up the losses from other sources of revenue, the downturn in the market has all but dried up private grants and foundations and many of those prior sources of revenue have evaporated as well," Rockefeller said.
She added the center has increased tuition rates for private pay clients, but the increase has not been enough to make up the difference and the predominately low and very low income families cannot afford to absorb the necessary increase in revenue.
In addition to the loss in revenues, Rockefeller said the center has suffered from a drastic difference between the projected utility rates and the actual rates for its second year at the McConnell Center, which saw rates that were 50 percent greater since the inception of the lease.
Joyal said the utilities at the McConnell Center are paid by all of its tenants based on a system of pooling the entire cost of utilities and then using a formula based on square footage to determine how much each tenant should pay.
The first year of utilities were paid based on estimates made by the original McConnell Center task force, and subsequent years were based on the prior year's actual cost. Because the original projections were significantly less than the actual cost, tenants received a large increase in utility bills during the second year, Joyal said.
The Dover Children's Center is one of four organizations that currently have their rent subsidized by the city, and at more than $30,000, the Dover Children's Center subsidy would be the largest if it is approved by the City Council.
The School District, Dover Adult Learning Center and HUB Family Resources also receive city subsidies for rent in the McConnell Center at a rate of $23,806, $22,467 and $7,564, respectively.
Joyal said no other organization has requested a change to its subsidy.