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Watertown Trust OKs gap funding for Children’s Clinic

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To help get the nonprofit agency through its continuing financial crunch, the Watertown Local Development Corp. has approved a $125,000 emergency loan to the North Country Children’s Clinic until some federal funding arrives.

On Thursday morning, the WLDC, also known as the Watertown Trust, agreed to help the clinic get through the short term with the loan, but CEO Donald W. Rutherford and board member Donald C. Alexander needed some reassurance from clinic officials that it’s righting the financial ship.

On Wednesday, Mr. Rutherford and Mr. Alexander, who also is the Jefferson County Industrial Development Agency CEO, met with Daniel A. Wasneechak, the clinic’s new executive director, and Kelly Clark, interim finance director, to discuss why the loan was needed and what the agency intends to do about getting back on firmer financial footing.

The two clinic officials laid out their long-term business plan, which would include cost reductions and improvements in production and efficiency, Mr. Rutherford said.

“Without it, I don’t think I would have gone for it,” he said. “I had questions and they addressed all three points. I was impressed with them.”

After hearing the Trust agreed to give the loan, Mr. Wasneechak said he “was appreciative of all the support” he was receiving from local economic development officials, especially since he was so new to the community after starting his job in August.

He assured them that the gap loan will be paid in October, as soon as the Children’s Clinic receives $275,000 in federal funding from a series of grants.

The clinic — which soon will be known as the North Country Family Health Center — owes $187,000 to the JCIDA and $184,000 to the Trust on previous loans for a mortgage on its building, Mr. Alexander and Mr. Rutherford said.

With a concern about making payroll, Mr. Wasneechak approached the Trust about the loan that will be used as working capital after Community Bank said no. The clinic has a balloon payment of $474,000 on its mortgage that comes due to the bank Jan. 1, but Mr. Wasneechak said he intends to go to the bank to try to refinance the mortgage.

The two business leaders attributed the clinic’s financial problems to deficiencies with internal controls, adding that department heads approved their own hirings because of increased programming, but that practice will stop. Mr. Wasneechak said he will have the final say on when employees are hired, and only when money is in the budget to pay them.

He and his staff also have started looking at ways to fill up appointment slots and reduce the time patients have to wait before they see a physician, a long-standing complaint, Mr. Wasneechak said.

He acknowledged that he did not realize how bad the financial situation was until he began working there, but he said he believes it can be turned around.

“I came in with a new set of eyes,” he said.

Noting that the clinic is an important downtown business with political clout, Mayor Jeffrey E. Graham cautioned that the Trust should not get involved with future loans like this. It also did not go through the usual loan request process of first coming before the Trust’s finance committee, he said.

The mayor also expressed concerns that the financial situation “will not get any better,” he said.

The clinic employs 130 workers, provides health, dental, behavioral and school-based programs in Jefferson, Lewis, St. Lawrence and Franklin counties and served just under 30,000 people in 2012. Last October, the organization began seeing adult patients.

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