New Lake Travis Youth Association board president Chad Wilbanks didn’t expect to spend the first three weeks in his volunteer role re-living the past, but that didn’t stop him from doing just that.

Two years ago, LTYA filed suit against its former online registration company, Washington-based Count Me In, Inc., in an attempt to recover nearly $200,000 in registration fees that the firm failed to pay to the youth association. Earlier this year, LTYA discovered that it might be facing an eerily similar situation with its current online registration firm, Zortal Enterprises.
As of late May, Zortal owed LTYA more than $150,000 in registration fees from the association’s spring sports season. As of May 14, LTYA parents had spent $210,000 to register children for the spring seasons, but LTYA had only received $55,000.
“The money we’re requesting is in a processing merchant’s account,” Wilbanks explained last week. “Once that money is released into Zortal’s account, then it is available to us.”
While that sounds very much like how problems with CMI came to be in 2008, Wilbanks points out one very significant difference between the two situations, and one that will in all likelihood mean that LTYA will receive all of its registration fees in due time: Zortal is not in bankruptcy. CMI filed for bankruptcy and became the target of a number of lawsuits from other organizations looking to recoup their registration fees along with LTYA.
Wilbanks said the most recent LTYA board became aware that the LTYA hadn’t received all of its money from the fall registration in January. Several board members — including Wilbanks — began researching the situation and believe they have figured out the hold-up.
“We are now double-checking to make sure we have received all of our registration fees from last fall,” he said.
Many companies use a third-party vendor, such as Zortal, to process online payments. The third-party vendors create merchant accounts, where the payments are collected before being turned over to the actual registration company — Zortal in this instance. Once it receives the money from the merchant account, Zortal will pay LTYA its registration fees.
“In researching this, I’ve found that merchant accounts can hold funds for a maximum of 180 days,” Wilbanks said. “On the 181st day, they are required by law to release the money.”
The 180-day window would be from the closing date of LTYA’s spring registration season. Several sports had different closing dates. Soccer’s registration closed on Jan. 31. Basketball, baseball and softball didn’t close registration until the end of March.
“On the 182nd day from the closing date of the spring registration, I expect to have all of the money in our account,” Wilbanks said.
Wilbanks said that he has been in near-constant communication with Zortal officials, and that the company is committed to working with LTYA on making sure its registration fees are repaid.
Knowing how his membership must feel after word got out that the LTYA might be facing the same predicament it did two years ago, Wilbanks said one of the top priorities in the short time he’s been president has been to rectify the situation and insure that LTYA receives its registration fees in a timely manner from now on.
“We’ve created our own merchant account [created on May 10 and already active], with Zortal’s approval, so beginning with registration for our upcoming football season, all fees go into our own account, not into Zortal’s merchant account,” he said. “There will be no more waiting to receive our own registration fees.”
Registration for the 2010 football season is already underway.
Wilbanks said discussions amongst board members included proposing a payment schedule by which Zortal would repay LTYA its money, but that may not be necessary.
“The rules concerning merchant accounts should cover us there,” Wilbanks said.
LTYA was still in the process of recovering from the CMI bankruptcy and had made up huge ground thanks to community support, none larger than Zbranek Custom Homes’ decision to donate $150,000 from the sale of a custom home to LTYA to help it recoup most of the $190,000 that CMI couldn’t pay.
Wilbanks said he was very aware of the how the entire community rallied around the organization in the wake of CMI and is doing everything he can to make sure the current delay in receiving money from Zortal is indeed only a delay.