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HFC business plan broadsided by COVID-19

Yesterday, I wrote about the HFC. The building, which opened in 2006, is among the hundreds of gyms and health clubs closed by Executive Order in March. COVID-19 has raised major questions about the viability of the fitness industry as we know it. Consumers are signaling that they don’t intend to return to facilities-based fitness.

The HFC has always been a misguided operation. WCC built the building, but never intended to allow students to use it. That alone should have raised serious questions among the Trustees. (It did not.)

The building was designed to serve 6,000 subscribers. As of last September, it had more than 7,000 and was happy to take on more. The oversubscription is deliberate. WCC needs more revenue from the building to stay ahead of the bond payments and the maintenance.

According to the CFO, the HFC’s construction is “less than stellar.” As a result, systems in the building are failing much earlier than expected. (Seems at least plausible that the severe oversubscription also contributes to the facility’s rapid-aging problem.)

WCC still owes $7.5M on the bonds over the next seven years. If history is a guide, WCC can also expect to spend at least that amount – if not more – on building maintenance over the same period.

The Trustees authorized the HFC as an investment. Their intention was that it was going to pay for itself. And make money for WCC. Unfortunately, the HFC’s business plan appears to have just taken a .950 JDJ center mass.

HFC: From overseeing to overlooking

Without doubt, the Board will hold itself harmless here, even though two of the seven members were on the Board that voted to authorize HFC. After all, no one could have predicted COVID-19, right?

Which is why we need Trustees who fully understand and focus on their mission as Trustees. Instead, we have a group of individuals – elected to represent the taxpayers – who would rather act as advisors to the College president.

That’s nice, but the reason the Board exists is to represent the interests of the T-A-X-P-A-Y-E-R-S. Exclusively. The Trustees’ actual, statutory function is to provide oversight of the College president. If the President wants an Advisory Board, the President is certainly welcome to create one, entirely independent of the Trustees. And if the current Trustees would prefer to “advise” the President, they should resign their seats on the Board of Trustees and join the President’s Advisory Board instead.

Washtenaw County residents are entitled to Trustees who can attend to the best interests of the community and the taxpayers. We do not need Trustees who gamble the College’s tax appropriations on side businesses that drain resources away from education.

Photo Credit: Roozbeh Rokni , via Flickr