By Shachi Kurl
Ottawa Neighborhood Services has been given a new lease on life, thanks to an infusion of cash from the region.
In a unanimous decision on Wednesday that took only seconds to make, the Region of Ottawa-Carleton approved a $75,000 loan to keep the non-profit organization alive.
Neighborhood Services’ general manager Peter Jones was there to hear the news.
“That’s fantastic, excellent news,” said Jones.
Immediately after the decision, Jones sought a pay phone to tell the charity employees their fate.
“There will be lots of cheering and clapping,” he predicted. “We’ve been living on the edge for the last few weeks. Everyone has worked very hard to make changes.”
The charity’s six thrift stores in the Ottawa region will remain open for business after a financial crisis threatened to close their doors permanently.
Regional Coun. Dan Beamish was not surprised at the Region’s decision.
“It’s the first time they (Neighborhood Services) have come looking for help,” Beamish said. “Sometimes, it’s just a little boost that will help.
“This should help get Ottawa Neighborhood Serivices’ act straightened out.”
Beamish said council didn’t have much trouble with the decision because it saw little risk in granting the loan because they hold the mortgage on one of the charity’s properties.
The charity is currently carrying a debt of $115,000, as well as an existing mortgage with the bank.
Jones and Neighborhood Services president Ian Fraser told the region’s community services committee in a meeting two weeks ago the 66-year-old charity service was in dire straits after government cuts to social assistance and the January ice storm drove its revenues into the ground.
Fraser explained that 60 per cent of the organization’s thrift store shoppers were on low or fixed incomes, and provincial government cuts in 1996 drove down the stores’ 1997 revenues.
“(The government) squeezed that last dollar out of them,” Fraser said of his customers. “Whatever money they had to spend on an extra item in the store was gone.”
Fraser also said ice storm blackouts forced stores to close for a week, causing another $40,000 in losses.
Originally, a decision was to be made on the charity’s fate in late March. But after the presentation committee members unanimously voted to recommend a $75,000 loan for the charity to regional council, and then voted to speed up the time frame in which decision will be made.
Community services committee chair Alex Munter emphasized the charity’s value to the community.
“They provide an essential community service,” he said. “The fact that there’s no risk to the community makes it all that much easier. Ottawa Neighborhood Services will repay their loan and a 66-year history is their bond.”
According to Fraser and Munter, the loan is risk free. If the charity can’t pay the $75,000 back, the city has a second mortgage on the charity’s 987 Wellington St. property, valued at $450,000. The building already has a first mortgage with the Royal Bank for $165,000. Either way, the taxpayers get their money back.
Fraser said the charity should be able to pay back the loan in two years as long as future revenues come to within five per cent of its 1997 figures, which totalled $1,330,000.
The news means the 50 people that Neighborhood Services employs still have their jobs.