McKamey Animal Center goes into red

photo McKamey Animal Center is located on Access Road in Hixson.

MCKAMEY BUDGET• IncomeActual-Budget$2,129,434.53-$1,966,822• ExpenseActual-Budget$2,158,223.36-$1,969,981Source: McKamey

The McKamey Animal Care and Adoption Center's bottom line turned red in 2011, driven by legal costs over its raid of the Pet Company store and a 30 percent increase in the number of animals it accepted.

Though the center's revenue was above budgeted levels, there were unexpected expenses as well, McKamey Executive Director Karen Walsh told members of the Chattanooga City Council's Safety Committee this week in her annual report. The city has a contract with McKamey for animal control services.

The center outspent its almost $2.13 million budget by $28,788, according to its records. Legal fees were almost $62,000, more than three times what was budgeted. Supplies, repairs and a variety of expenses went over budget as well during the fiscal year that ended June 30.

In an explanation attached to the financial statement, McKamey officials said the legal fees were spent on the Pet Company case.

In June 2010, McKamey and state and local officials removed 82 animals from the Pet Company at Hamilton Place, alleging poor treatment and living conditions. McKamey lost its animal cruelty case against the Pet Company when a judge threw it out. Pet Company has filed a federal lawsuit against McKamey.

In an interview Thursday, Walsh said she could not talk about the Pet Company expenses because the case is still in litigation.

photo While testifying in a Chattanooga City Court trial, Karen Walsh, executive director of McKamey Animal Care and Adoption Center, shows photos that she took inside of The Pet Company at Hamilton Place. File photo.

She said the 30 percent increase in the number of animals brought to the center is something its workers can't predict or control. The center based its budget on the 6,009 animals brought in during 2009-10, she said, but 8,565 animals were brought in.

"When you increase your animal numbers by that much, it's going to increase your supplies and such as well. You need to offset that by creating other revenue streams," she said, such as fundraisers and donations.

She blamed the slumping economy for forcing people to give up their pets.

"People are losing their homes, people are losing their jobs, not so much in Chattanooga as in other parts of the country, but it has an impact," Walsh said.

McKamey's overall revenues were up 8.3 percent, mostly from contributions and license fees, though adoption fees, at $74,000, were nearly 58 percent below budget.

In the explanation to the committee, McKamey officials said the center decided to cut adoption fees in hopes of finding homes for more animals.

"We actually save money by [adopting] out the animals as quickly as possible even though we lose money on every adoption. It is not our mission to utilize the animals as a revenue source," the statement said.

City Councilman Peter Murphy, the chairman of the Safety Committee, said Thursday he didn't see the almost $29,000 loss as worrisome.

"I think in the scheme of their budget, that loss isn't anything to be too distressed about," Murphy said. "That's the nature of the beast - it's going to be variable in terms of their service and revenues."

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