NELLY BLY INVESTIGATIONS

The Boys and Girls Club of Burbank was founded in 1994 and let’s go to their website to hear the story:

“So in 1995, an old firehouse on Buena Vista Street was converted into a Boys & Girls Club. Members of the community donated their time and talent, walls got painted, shelves got mounted, staff was hired and the Main Club site was born and became home to about 75 kids.”

The story goes on and we hear about the success and tremendous growth of their programs. Thousands of children have participated in these programs not just in Burbank but all over the east Valley. There is no doubt they are a valued asset in our community as they receive significant financial support from our City, the Federal government and community business leaders such as Disney and Warner Brothers.

For example, here is an earmark (before earmarks were banned) given to B&G C via Adam Schiff back in 2009: (source: opensecrets.com)
This is why your intrepid reporter did a spit take when it was reported during the 4/5/22 City Council meeting that B&G C had left the City of Burbank, and us taxpayers, with a bill of $1.75 million dollars.
That old firehouse that they moved into back in 1995? Turns out the City gave them a lease that was $1 a year for rent and NO contractual obligation to maintain the building to current standards. When the B&G C moved out of the old firehouse to a brand new building in 2021 (we will get to that in a moment), the City inspected the old building, which the City still owns, to ascertain its condition.
As reported in the 4/9/22 Burbank Leader, “… the building needs about $1.75 million in improvements before a tenant can occupy it. The bulk of the improvement costs are bringing the building up to code and fixing safety issues.”
It would be natural to expect that majority of money raised by B&G C would be spent on their programs. But when it was revealed that when they moved out they left that City building in decrepit condition, one’s thoughts race to issues of safety. Was the building safe for all those children?
Here is the staff report document outlining what that $1.75 million needs to be spent on.
https://burbank.granicus.com/MetaViewer.php?view_id=42&clip_id=9749&meta_id=394399
Some quick takes:
* Asbestos, lead and other typical hazardous material were found on the property
* The building was not ADA compliant, and the last ADA improvement occurred over 20 years ago
* Interior and exterior walls currently have lead based paint
*There is no Fire Sprinkler System
* Temporary trailers need to be removed from the premises as they are not up the code
          Well, I guess we should all be thankful that the children are now in a new, presumably safe, building.
But shouldn’t we be asking, why are we stuck with this bill? Did the B&G C not have the money to keep this building up to code and maintain the safety standards (like no lead paint) that we all would have expected?

Time for a Nelly Bly Deep Dive

My investigations are based only on publicly available documents. B&G C prides itself on transparency so their tax returns (Form 990 for nonprofits) are on their website. They provide the 990’s back to 2010, so we will start there. (Note: the B&G C fiscal year is like many nonprofits and runs July 1 – June 30)
Here is the Big Picture.
At the end of fiscal year 2009:
assets 206,721
liabilities 203,921
net income 2,800
At the end of fiscal year 2020:
assets 2,163,057
liabilities 288,461
net income 1,874,596
Quite the success story!
Let’s take a look at that net income number:
Should any of that income, what they had after they paid for the salaries, programs, and expenses, have been used to, let’s say, remove the lead paint or install fire sprinklers?
In fiscal year 2010-11, B&G C started an endowment.

Courtesy of Investopedia.com

The 990’s don’t state what programs the endowment was meant to fund. But one would hope that maintaining the building standards and safety of the children would be a priority purpose for these funds.
At the end of 2010-11, the endowment balance was $91,887. There were no expenditures of endowment funds through the years up to 2017-18, and the balance at the end of that fiscal year was $224,032
Endowment funds of $17,000 were withdrawn during the 2018-19 fiscal year leaving a balance of $216,424. Then the majority of the funds, $160,000, was withdrawn with the use noted as for “facilities”. That left $39,748 in the endowment fund.
We can assume that $160,000 was used to remodel a new facility, not to make the old facility safe and up to code. That’s because by then B&G C had launched a major capital campaign to fund the new facility.
You can view the details of the capital campaign here: https://e.givesmart.com/events/k9J/
The goal was to raise $6 million and this shows they made it to about $5 million.
And who were the major donors to the capital campaign?
.
Yup, more of your tax dollars at work here.
Who else?
Ah yes, we have gotten to know the Cusumanos.
And, of course, Disney stepped in to help. You can read about the $1 million Disney donation here : https://thewaltdisneycompany.com/the-walt-disney-company-announces-1-million-donation-to-boys-girls-club-of-burbank-and-greater-east-valley/
Even this past month it was announced by Schiff that B&G C is getting another $250,000 in Federal money to “renovate their new clubhouse”: https://schiff.house.gov/news/press-releases/schiff-secures-more-than-7-million-for-critical-community-projects_in-upcoming-government-funding-legislation
The next question is … Who was running the Board of Directors at B&G C during this time? Who was, shall we say, minding the store?
Fun Fact – 990’s show who is on the Board of the nonprofit for each year.
Most nonprofit boards have term limits so that directors will rotate on and off, as this will keep the organization and the board fresh with new perspectives. Yet at B&G C, there is clearly no set Board term limits. There is a group of seven people who have been on the Board since at least 2010 if not longer. They rotate in and out of the leadership positions such as President and Vice President. If new Board members join, they leave after 2-3 years and don’t become officers, but not this group, they stay firmly in charge.
But there is one person who is the exception to this pattern, who was immediately accepted into the “cabal”, who became Vice President after only one year on the Board (which was unprecedented) and who was President of B&G C during the capital campaign years.
Paul Herman.
Yes, the Republican who despite a six figure infusion of campaign funds from the California Apartment Association, Burbank Police Officers Association and other sources came in fourth in the 2020 City Council election.
The same guy who was the only Board and Commissions member who refused to follow the City vaccine policy and spouted MAGA-ganda to City Council to avoid getting kicked off the BWP Board. (Spoiler – it didn’t work, he was kicked off.)
The same guy who is the 2022 Board Chair Elect of the Burbank Chamber of Commerce. (ICYMI – https://burbankvoice.com/2022/03/09/the-burbank-chamber-of-commerce-part-one-their-finances/ )
The same guy who is clearly going to run again this year for City Council.
As he campaigns this year, it would be great if voters asked him why he, as B&G C President, and the Board never addressed the lead paint, asbestos, lack of a fire safety system, and other deficiencies in the B&G C old building. Ask him why, as a “fiscally responsible” Republican, he left the citizens of Burbank with a $1.75 million bill.
Posted April 13, 2022