Youth House Clears One Funding Hurdle : Finances: Trustees’ contributions, community donations get facility through the year. More-aggressive fund raising is planned.

After nearly four years of deficit spending, the 43-year-old La Canada Youth House came to the end of its reserves this fall, forcing its trustees to dig into their own pockets to provide some of the $25,000 needed to get the center through the year.

Since 1988, revenues from the Youth House programs--which include children’s classes in art, music and sports--have not been enough to cover the increasing operating costs, said the agency’s new executive director, Mike Nocita.

The Youth House has had to spend almost its entire $67,000 in the reserve account to pay basic expenses because of the shortfall in income, Nocita said.

Nocita was hired to manage the center in February, after City Councilman Chris Valente resigned from the post he had held for more than 20 years.

The reason for Valente’s departure has not been disclosed. He and the Youth House trustees signed a mutual legal agreement, promising not to discuss it.

“I am not able to discuss whether he was asked to resign, whether he resigned on his own, whether there was cause or whether there was not cause,” said trustee John Maddux.

Several months after he was hired, Nocita realized that the Youth House would be about $25,000 short of its operating expenses for the rest of the year.

At that time, he said, he asked each of the 15 members of the board of trustees to contribute at least $1,000 of their own money to keep the facility open. Although some board members contributed less than that goal, others gave more.

The trustees also sought donations from friends and sent out a letter to residents of La Canada Flintridge appealing for donations to help the Youth House through the “urgent financial crisis.”

Without community support, the letter stated, the center “will become extinct, and something wonderful in our community will be lost forever.”

The combined efforts have raised about $23,000, including nearly $2,500 that has been sent to the center in response to the mailing, and officials said there is no doubt that the center can remain open.

“I believe that we are in real good standing vis-a-vis the immediate crisis,” Nocita said.

Now, he said, the trustees are conducting long-range, strategic planning to prevent any similar crises in the future. Among other things, he said, the trustees are examining the possibility of expanding the Youth House programs to include activities for teen-agers and senior citizens.

He also said that the center plans to be more aggressive in its community fund raising.

“We want to make the place more hospitable, to come up with creative ways to increase the number of people that come here,” he said. “We need to promote programs that are going to be useful.”

The Youth House was founded in 1948 by several community organizations as a center for community activities, particularly for children.

The facility they developed is tucked away on a residential street near the intersection of Foothill Boulevard and Angeles Crest Highway in the heart of what is now the city of La Canada Flintridge. It includes a converted house used for the Youth House preschool and a main building with an auditorium, six classrooms, a ceramics studio and an office.

The center is currently offering 16 different classes and sports programs for children.

According to trustee Paul Smith, the Youth House deficits began during the fiscal year ending February, 1988, when the center lost $28,000.

Smith said that the deficit was caused by higher insurance costs and a cutback in United Way funding without a corresponding increase in program fees, the agency’s primary source of revenue.

The following year, the Youth House rejected $13,500 in city funding for its free drop-in after-school recreation program, which was offered at three elementary schools in the La Canada Unified School District. The Youth House had asked for $27,000 in city funds to support the $35,000 program, but the city offered only $13,500.

Rather than accept the partial funding, Valente recommended that the Youth House turn down all the city money and bear the entire cost of the program.

The financial problems were exacerbated in September, 1990, when the Youth House was forced to stop offering a successful day-care program that had generated about $160,000 a year, Smith said.

The day-care program had been offered at three elementary campuses in the La Canada Unified School District. Parents had paid based upon how often their children attended.

In response to parent queries, district officials investigated state child-care laws and discovered that any day-care programs offered on their campuses had to be licensed by the state, said Andrew Meyer, assistant superintendent.

Meyer said that Valente was notified about eight months in advance that the Youth House would need a license to run the day-care program on school campuses during the next academic year.

But when school began the following September, Meyer said, the Youth House had not obtained a license.

Maddux said that trustees were concerned about the loss of such an important revenue source, but that Valente reassured the board that the Youth House would soon receive the license it needed to restore the program and improve its financial outlook.

“We received assurances from Mr. Valente that things were going to change. With each meeting, we received assurances that we were only 30 days from turning the corner,” Maddux said.

Trustee Jim Campbell said most of the board members accepted Valente’s promises without asking many questions.

“We heard the ‘things are going to get better’ attitude and we said, ‘OK, we’ll buy that,’ ” Campbell said. “We were living on the thought that we would just go down there and get a license.”

In a recent interview, Valente said that he did not believe that the Youth House was required to have a license to run the day-care program, and he said he argued with the school district about the policy.

“I still say it was an outright lie,” he said. “You don’t need a license for the kind of program we were running.”

Eventually, though, Valente said he took steps to qualify for a license, but the application procedure took longer than he had expected.

Nocita said that when he arrived in February he found that preliminary work had been done to obtain a day-care license, but no formal application had been filed.

Nocita has since hired a new preschool director and is updating the paperwork in anticipation of filing a formal license application.