A proposed revised management agreement between the Town of Johnstown and the YMCA of Northern Colorado failed Monday night after the Town Council split 3-3, with two members who opposed the agreement saying unresolved or unclear provisions should be addressed before a final vote.
Mayor Michael Duncan and council members Dee Anne Menzies and Nick Bashford voted against approving the agreement. Mayor Pro Tem Chad Young and council members Jesse Molinar Jr. and Dianne Morris voted in favor, while Councilmember Damien Berg was absent.
Menzies said she did not believe the agreement was ready for a vote and suggested it should be tabled until outstanding items could be resolved. Bashford similarly said some provisions were too vague and needed additional clarification before Council acted. The tie caused the motion to approve the amended agreement to fail.
Agreement grew out of forensic audit
Town staff said the proposed agreement was the result of the forensic audit initiated by the Town and subsequent negotiations with the YMCA over additional controls and oversight of the Johnstown facility. The proposal would have replaced the facility management agreement approved by Council on April 1, 2019.
According to the staff report, the proposed agreement included several changes to the existing arrangement, including shortening future renewal periods from 10 years to five years and placing additional restrictions on the use, disposal, leasing or loaning of Town-owned furniture, computers and equipment. It also added or clarified requirements for routine and non-routine maintenance, regular meetings between Town and YMCA staff at least every two months, an annual facility walk-through and an Oct. 15 deadline for submission of the YMCA’s annual audit.
Monthly reports would also be required covering programming, maintenance, financial activity, membership and changes to the facility’s equipment inventory. The proposed agreement additionally called for clearer procedures involving capital-improvement requests, facility budgeting and operating-subsidy payments.
Financial obligations would remain largely unchanged
Town staff said the financial obligations under the proposed agreement would not change compared with the 2019 agreement. The Town would continue to budget an operating subsidy of up to $500,000 annually for the Johnstown Community YMCA.
The proposed agreement states that the operating subsidy could not exceed $500,000 in a given year or $41,666 in a given month unless additional funding was later approved. The agreement would also continue through Dec. 31, 2031, while future renewal periods would be shortened from 10 years under the existing agreement to five years under the proposed version.
Audit settlement tied to approval
The proposal was also tied to resolution of the Town’s previous forensic audit. Town staff recommended approval only on the condition that the parties also enter into a Settlement & Release Agreement requiring the YMCA to reimburse the Town $56,000 for the forensic audit, with the YMCA characterizing the payment as a compromise rather than an acknowledgment of liability.
During Monday’s discussion, officials said the YMCA had already paid half of what it owed toward the audit-related amount. Because the management agreement was not approved, the proposed settlement language tied to its approval was not adopted as part of Monday’s motion.
Termination payment remained a point of negotiation
Town staff also identified the agreement’s termination provision as an issue that continued to be discussed between the parties. Both the existing and proposed agreements provide for a $150,000 payment to the YMCA if the Town terminates the agreement without the required notice or fails to appropriate the operating subsidy.
The YMCA had sought an increase that could have raised the amount as high as 15.3% of the most recent facility budget — approximately $432,179 based on fiscal year 2025 — to account for what it described as actual termination costs. Town staff recommended retaining the $150,000 amount, saying it more fairly protected the Town and residents while still providing compensation to the YMCA if the agreement were terminated.
Staff also noted that the Town spent approximately $30 million to construct the facility. The proposed agreement presented to Council retained the $150,000 termination provision.
Additional oversight of equipment and finances
The revised agreement would have prohibited the YMCA from moving, disposing of, leasing or loaning Town-owned furniture, computers or wellness equipment to another YMCA facility without prior written authorization from the Town Manager. It also required the YMCA to establish a baseline inventory of wellness equipment within 30 days and report major changes through its monthly reports.
Financial records would have to be maintained for seven years and made available to authorized Town officials. The Town would also retain the ability to conduct its own audit, including a forensic audit, within three years after the end of a fiscal year.
2019 agreement remains in effect
Monday’s vote did not terminate the YMCA’s operation of the Johnstown Community YMCA. The Council rejected the proposed replacement agreement, not the existing relationship between the Town and YMCA.
Because the amended and restated agreement was not approved, the 2019 Facility Management Agreement remains in effect. The proposed 2026 agreement expressly stated that it would supersede and replace the original agreement only upon adoption.
Council could consider another revised agreement at a future meeting, but no replacement was approved Monday. For now, the YMCA continues operating the Town-owned recreation facility under the existing agreement.
