9OYS Investigation: Bleak financials surround Woodmen Community Center

KINSTON, N.C. (WNCT) — Following the announcement that the Woodmen Foundation had asked the city of Kinston to take over the Woodmen Community Center, WNCT launched an investigation into why.

Declining membership and increased cost of operations were just two of the reasons given.

WNCT requested, and obtained, hundreds of pages of public records during the investigation. In them, it shows just how bleak the projected finances are at the Woodmen Center.

During their first five fiscal years (2013-2017) the Woodmen Center finished with a net positive income three times, with the best year coming in 2013 with a net income of $235,110, and the worst year coming in 2015 with a net loss of $319,306.

The projected numbers for future years are where things go down hill quickly. By 2022, it’s estimated the Woodmen will lose $319,400 before shared services and transfers, and $585,100 after.

Financial documents also obtained by WNCT show membership revenue is projected to decrease from $873,135 in 2018 to $624,083 in 2022. Likewise, the Lions Water Park revenue is expected to drop from $683,049 in 2018 to $436,237 in 2022.

“It’s hard for me to see that this is something that either the city or the city and county are financially capable of taking on,” said Lenoir County Commissioner J Mac Daughety.

Under the original agreement in 2009, Kinston and Lenoir County both agreed to pay the Woodmen Foundation $500,000 of taxpayer money and in return, the Woodmen agreed to operate the community center for 30 years.

However, in late 2017, the Woodmen approached the city asking them to take it over.

Many county and city leaders said they weren’t aware the Woodmen wanted out of the agreement until an early January joint-meeting between the Kinston City Council and Lenoir County commissioners.

“Why are we now just finding this out?” asked Daughety.

Daughety is particularly concerned with lack of transparency and closed-door meetings. He said much of the discussion involving the Woodmen group on the issue has taken place with only attorneys and the county and city managers present.

Kinston Mayor Don Hardy said the public’s input will weigh in heavily when determining how the city will move forward.

“I wouldn’t call it a situation,” Hardy said. “I would say it’s an opportunity.”

Hardy said the current offer on the table is the Woodmen Foundation handing the center over to the city, with the city agreeing to operate and finance it moving forward. Hardy said he doesn’t put too much weight behind projected losses.

“Projections change,” he said. “Numbers change, and numbers can go up or down.”

If Kinston were to agree to take the Woodmen Center, Hardy said they would operate it differently, including new marketing strategies and taking a close look at operation expenses that could be cut.

Hardy said if the center continued to lose money, Kinston then could shut down the center themselves and have the ability to sell the land and building to make a profit.

City Manager Tony Sears asked the city council to have a decision by the end of February. If the city declines, the Woodmen group could give notice of their intent to shut down the Woodmen Community Center.

LIABILITY CONCERNS

A big concern about taking over the center is who is liable for any accidents that may occur. Under the current agreement, any lawsuit settled above liability insurance caps would be covered by the Woodmen Group.

Under the initial agreement, the city of Kinston was required to carry a $10 million liability insurance plan, which costs the city around $18,000 each year.

Currently, there is a $30 million lawsuit pending against the Woodmen Center for a near-drowning that occurred at the water park in August of 2014.

If the city took the center over and ran it as a for-profit, they would then become liable for any lawsuit over $10 million. If that were to happen, the taxpayers of the city and county could be on the line to cover the difference.

Commissioner Daughety is already concerned about the finances in the city and county.

Kinston leaders had to take $1.2 million from their savings account to cover this year’s budget. City manager Tony Sears said that was in large part due to doubling the budget for road repairs and a $750,000 repair at one of the community pools.

OUTSPOKEN COMMUNITY MEMBERS

The idea of the Woodmen Center was not looked at favorably from the beginning by some in the community.

During a September 2009 City Council meeting, several community members spoke out against the meeting. Some of them were gym owners in the area who didn’t agree with the city and county giving taxpayer dollars to a center that could hurt their business.

One of the major arguments made from the beginning was the population of Kinston and Lenoir County couldn’t support a center and water park of that size.

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