MINUTES

Board Members Present:

Robert Bacino, Jane Becker, Richard Becker, Edward Berg, Margaret Brunton, Tia Burke,
Carol Cope, Joanne Dhody, Marianne Dwyer, Thomas Fleming, James Foster, Stewart Graham, Jeremy Heep, Thomas Hemphill, Dina Hitchcock, Nancy Hutter, Kathleen Jones, Eden Kainer, Mark Keintz, Doug Knauer, Marie Lachat, Howard Lesnick, John Levitties, Janice Manzi,
Anne McNally, Ned Mitinger, Patrick Moran, Christopher Padova, Jane Piotrowski,
Susan Pizzano, Bob Previdi, Ron Recko, Meredith Sonderskov, Ann Spaeth, George Spaeth, Jonathan Sternberg, Kristina Sullivan, Walter Sullivan, Pam Rosser Thistle, and Tolis Vardakis

Board Members Excused: Elaine Aiello, Lou Aiello, Mary Anna Ross Cowper, and Janine Dwyer

Board Members Absent: Matthew Engebrethson, Virginia Mallery, Kip Powell, and George Roitzsch

Others Present: Moss Disston (Treasurer); Ed Feldman; Steve Fillebrown, Harry Johnston, and
Judy Morgan (Budget and Finance Committee Members); Linda Littlejohn; Pete Mazzaccaro
(CH Local Editor); Joseph Pizzano; Martha Sharkey (Community Manager); and Noreen Spota (Administrative Coordinator)

President Tolis Vardakis called the meeting to order at 7:30 PM. Tolis asked for a moment of silence to recognize the passing of Bayard Mallery and Lou Aiello, Jr. Stewart Graham then read from resolutions to be presented to Mary Flannery and Ellen Maher, expressing appreciation for their many years of service to the CHCA/Chestnut Hill Local. The motion to adopt both resolutions was seconded and passed unanimously. Noreen Spota conducted the roll call.

Approval of Agenda. Howard Lesnick offered a motion to move Action Item #6 (regarding the CHCA audits for 2006 and 2007) up to Action Item #2. This motion was seconded and passed; the agenda was approved as amended.

Approval of Minutes. The Board meeting minutes from May 24, 2007 were approved as submitted.

Approval of Professional Advisory Committee for the Local. Carol Cope offered a motion to approve creation of this committee, which would not fall under any of the CHCA Vice Presidents. Pete Mazzaccaro stated that this committee would provide “nuts and bolts” consultation and expertise in marketing, advertising, and production issues. He will select its members. Noting that the CHCA Board is the publisher of the Local, Tolis said that the Board reserves the right to meet with this committee if it feels that the paper is heading in the wrong direction. Bob Bacino suggested that Pete report back to the Board on the committee’s progress in three months. The sense of the Board was that due to the special nature of this committee, it is not necessary that the Board approve its creation.

CHCA Audits for 2006 and 2007. Treasurer Moss Disston summarized the audit situation for the CHCA/Local for the year ending 3/31/06, noting the concern about some of the figures in the “preliminary draft” prepared by CPA Charlie Jebran and submitted to Interim Community Manager Ed Budnick in early March 2007. At its meeting on 6/14/07, the Executive Committee, after recommendation by the Budget and Finance Committee, decided that Mr. Jebran needs to work further on the audit. Moss listed several specific concerns, e.g. the legal and accounting expenses appeared to be imbalanced between the CHCA and Local; “bank fees” appeared to include loan interest, perhaps inappropriately; and other issues. Moss reported that he received an e-mail from Mr. Jebran in response. With these revisions, Moss recommended that the full Board accept the Executive Committee’s recommendation that Mr. Jebran complete the audit for 2006 and that we proceed with the 2007 audit immediately after obtaining the necessary three bids.

Since the Treasurer is not a Board member, and therefore cannot make a motion, Carol Cope offered a motion to accept Mr. Jebran’s audit of the CHCA/Local for the year ending 3/31/06 and that we proceed with the 2007 audit immediately after obtaining the necessary three bids. This motion was seconded. Meredith Sonderskov then offered an amendment, stating that we should engage another CPA, Chuck Ward, to perform the 2006 audit. Meredith’s amendment was seconded. As a clarification, Ed Berg stated that the two choices appeared to be that 1) Mr. Jebran finishes his audit for 2006, and 2) that another CPA performs a new audit for 2006. According to Jim Foster, the Board voted in April to get an audit from another CPA and that significant errors in Mr. Jebran’s 2006 audit were discovered by CHCA bookkeeper Sue Kowert. An engagement letter for Chuck Ward to perform the 2006 audit was signed by Ron Recko on 5/15/07. (A third bid sought by Jean Hemphill, Chestnut Hill Community Fund President, never materialized.) Jeremy Heep stated that since we are seeking an unqualified audit performed by a certified, independent accountant, and since Mr. Jebran meets both of these criteria, the Executive Committee recommended that he complete his work preparing the audit. (An unqualified audit is one in which the accountant’s opinion letter has no qualifications.) Harry Johnston stated that Mr. Jebran’s revised audit is an unqualified audit, but Howard Lesnick countered that we need to do more than make “recommended modifications.” Ned Mitinger offered a motion to call the previous question (if approved by 2/3 of those voting, this stops debate on Meredith’s amendment). This motion was seconded and approved with 24 votes in favor, 8 votes opposed, and 1 abstention. An immediate vote was called on Meredith’s amendment to conduct a second audit for 2006; this was rejected with 9 votes in favor, 26 votes opposed, and 1 abstention.

Discussion ensued regarding Carol’s original motion that the Board accept Mr. Jebran’s audit for 2006. Howard asked whether the audit data was generated by CHCA management or rather from Mr. Jebran’s investigations (generated by him). Moss responded that he did not ask Mr. Jebran that question but promised to do so. Dina stated that she had asked Mr. Jebran whether he found any evidence of fraud, malfeasance, or embezzlement, and the answer was no. Ron Recko stated that Mr. Jebran had not performed an unqualified audit for the past three years and asked why can’t we hire someone else to do the job correctly. Ed Berg responded that after its discussion two weeks ago, the Executive Committee was confident that Mr. Jebran could do the audit properly. He then asked whether the Board is confident that Moss Disston is qualified and able to assess the situation properly. Walter Sullivan asked, what is the Board seeking to obtain from the second auditor in addition to that already obtained from Mr. Jebran other than the information already discovered by the Oversight Committee? Tom Fleming recommended that we accept the audit already performed and then another CPA can perform the 2007 audit and make the necessary adjustments. Marie Lachat noted that non-profits should change auditors every five years and that audits should be performed by CPAs specializing in non-profits. Nancy Hutter queried Moss as to whether the expanded Jebran audit was covered by the original cost of $6,300. Moss responded that the total cost would remain the same. Nancy then stated that the Board must be provided with, in writing, all of Moss’s justifications for accepting the 2006 audit performed by Mr. Jebran. She said that this would provide a level of comfort for the Board that due diligence had been done by Moss in accepting the audit, in case it was questioned in the future by governmental entities. Moss promised to provide his statements in writing [this document is an attachment to these minutes]. Howard Lesnick argued that the Board has an obligation to do due diligence and that he had no confidence that the Board understands its fiduciary duty or that due diligence had been done. A vote was then taken on the original motion to accept Mr. Jebran’s audit for 2006 and that the 2007 audit be performed immediately after obtaining three bids. This motion passed with 28 votes in favor, 6 votes opposed, and 4 abstentions.

Status and Membership of Ad Hoc Snowden Committee. Tolis stated that this committee’s “final report” was issued on January 25, 2007 and that various “memoranda of understanding” were prepared by three of the five original members of the committee. (One member resigned and another member was not aware of subsequent meetings.) After participating in numerous meetings with various individuals, including Richard Snowden, Tolis has written an apology on behalf of the CHCA Board and Chestnut Hill Local to be published in the paper. Tolis explained that his statement reflects the recommendations included in the committee’s report but that he did not want to circulate copies prior to publication. Pete Mazzaccaro was asked his opinion of the statement, and he stated that it is a very reasonable course of action. Ron Recko noted that Snowden’s demand for an apology appearing on Page 1 “above the fold” was non-negotiable and that the Board must approve any statement from the Board. Ron predicted that Tolis’s apology would “fall on deaf ears.” After some discussion, Kathy Jones offered a motion that the Board approve that this letter be published in the Local. This motion was seconded by several people. Further discussion addressed the idea that Tolis should simply submit his letter to the Local without Board approval. Howard Lesnick offered a motion to table Kathy’s motion; Kathy then withdrew her motion. Carol Cope offered a motion to go into executive session so that Tolis could read his letter to the Board and the Board could then decide whether to approve its publication. The Board voted to go into executive session with 24 votes in favor, 8 votes opposed, and 3 abstentions. During this session, the letter was not read, but the Board decided that Tolis would submit his letter for publication in the Local.

Appointment of New LUPZ Committee Co-Chair. Jeremy Heep, Vice President of Operations, reported that John Haak, co-chair of the LUPZ Committee, has resigned from that position but will remain on the committee. They have recommended that Joyce Lenhardt, who has served on the committee since 1992, be appointed as the next co-chair. Patrick McGranaghan will continue serving as the other co-chair. Jeremy’s motion to approve Joyce Lenhardt as LUPZ co-chair passed with 1 abstention (Bob Bacino). Jeremy then stated that he was removing from this meeting’s agenda the appointment of an additional LUPZ member to the Chestnut Hill Health System Master Plan Advisory Committee.

Approval of Oversight Committee Recommendations/Status of Oversight Committee. Jim Foster, Oversight Committee Chair, noted that there were three sets of recommendations; the first two sets were procedural and have been approved by the Board. The final set of recommendations was initially discussed and tabled at the January 2007 Board meeting, and circulated again at the May 2007 Board meeting but not discussed at that time. The remaining recommendations read as follows:

1)         For at least the past fiscal year (ending 3/31/06), we retain an outside auditor to provide fully
certified financial statements for all three entities. It is essential to establish a benchmark before moving forward.
2)         We separate the Local completely from the CHCA for financial reporting purposes and
recommend making application for non-profit status for the CHCA. In this regard we clearly define just what percentage of time CHCA employees spend on Fund activities of any type, and expense that time to the Fund proportionally.
3)         Accountant-prepared interim financial statements, preferably quarterly, should be prepared and
reviewed by the Treasurer in detail at Board meetings.
4)         Review all borrowing resolutions and deposit resolutions in all financial institutions with which
we do business, and make sure they conform to the By-Law/Trust Declaration requirements and Board authorizations.
5)         Recommend dividing or rotating the CHCF deposit funds among local banks with which the
CHCA has a standing relationship. Concentration may not best serve the purposes of our organizations.

Noting that Recommendation #1 regarding audits has already been addressed, discussion ensued about Recommendation #2, separating the Local from the CHCA. Tolis stated that it may be worthwhile to explore this issue. Stewart Graham noted that CHCA was originally a 501(c)(3) organization but is now a 501(c)(4). The Chestnut Hill Community Fund was created in 1972 as a separate 501(c)(3). Some Board members expressed the view that CHCA is a “political” organization because it lobbies on zoning issues and therefore cannot qualify as a 501(c)(3). Marie Lachat countered that the CHCA does not endorse candidates and that 501(c)(3) organizations may legally engage in a small amount of “lobbying.” The advantage of being a 501(c)(3) is that an organization may receive tax-deductible contributions to cover its operating expenses along with its program expenses. Tolis stated that according to Jean Hemphill, Recommendations #4 and #5 have already been accomplished. He added that the new Budget and Finance Committee will be addressing many of the Oversight Committee recommendations. Moss stated that he fully supports Recommendation #3, and Dina offered a motion that the Board approve this recommendation. This motion was seconded and passed unanimously. Susan Pizzano emphasized the importance of making the quarterly financial statements understandable to all.

Regarding the status of the Oversight Committee, Jim mentioned ongoing work on two issues: 1) in May 2006 fees were paid ($3,200 commission on the rental of an office at 8431 Germantown Avenue) on a contract that was not approved by the Board, and they are working to get the fees refunded; and 2) filing of a report required by the state of Pennsylvania from all organizations that collect more than $25,000 per year. It appears that this report has not been filed by the CHCA. Ned Mitinger stated his belief that the Oversight Committee has served its purpose, and should be disbanded especially considering the expanded focus of the Budget and Finance Committee. George Spaeth noted that the Budget and Finance Committee does not have independent oversight capability and felt that we need a standing “audit” committee. Ron Recko and Nancy Hutter both stated that the Oversight Committee has a 2-year “sunset provision”; Nancy added that Tolis can appoint additional members if he wishes. Ed Berg stated that the Board needs a written description of the responsibilities of the Oversight Committee as compared with those of the Budget and Finance Committee. Carol Cope offered a motion to table Ned’s motion until next month, after the respective committee responsibilities are delineated. This motion was seconded and approved.

Approval of New Bylaws Committee Members. Dina Hitchcock, Vice President of Operations, reported that Tolis Vardakis and Walter Sullivan have rotated off the Bylaws Committee, and two other members (Mark Nottingham and Tom Kessler) have resigned. She offered a motion that Richard Becker replace Mark Nottingham (term expiring 2008), that Mary Anna Ross Cowper replace Tom Kessler (term expiring 2010), and that Meredith Sonderskov and Walter Sullivan be approved for new 5-year terms (2007-2012). This motion was seconded and passed.

Philadelphia Orchestra Concert. Tia Burke reported on plans for the Philadelphia Orchestra concert to be held in Pastorius Park on Monday, July 2. She offered a motion that since there will be no concert on Wednesday, July 4, $2,500 from the concert series budget should be diverted to pay for various expenses (e.g., decorations, security, porta-potties) for the Orchestra concert. This motion was seconded and passed unanimously. CHCA will be recognized as a sponsor in the concert program and Tia urged that Board members volunteer on Saturday and Monday as needed.

Report from Treasurer. Financial statements as of 5/31/07 for the CHCA, Fund, and Local were distributed. Moss Disston noted that CHCA revenue is currently $3,000 over budget, and expenses are about $6,200 under budget, for a positive cash flow of $9,200 since 4/1/07. The Local has approximately met its budget projections thus far.

Report from Vice President of Operations. Given the late hour, Dina Hitchcock offered to e-mail her report to the Board.

Report from Vice President of Physical Division. Jeremy Heep reported that the DRC and LUPZ are currently reviewing plans for a new science building being constructed at Chestnut Hill Academy. This will be a “green” building. He also reported that both committees are working with Citibank on aesthetic issues for the new branch being constructed at the corner of Germantown and Highland Avenues. Lastly, Jeremy mentioned his plans to revitalize the Traffic, Transportation, and Parking Committee and address the maintenance of Chestnut Hill’s parks.

Report from Vice President of Social Division. Jane Piotrowski stated that last night’s concert in Pastorius Park (featuring Buckwheat Zydeco) was fabulous and extremely well-attended. She reported that Cherelle Parker’s $5,000 sponsorship for last summer’s concert series has now been received. Jane then reported on plans for 1) the Black and White Gala ($13,450 in sponsorships has been received so far, with two weeks to go); 2) a “welcome wagon” for new Chestnut Hill residents; 3) the CHCA Blood Drive to be held in November; 4) the Holiday House Tour; and 5) the Police, Firefighters, and Postal Workers Picnic to be held on July 25. A “save the date” notice for the Black and White Gala was distributed along with the CHCA Health Committee’s yoga class schedule.

Report from Community Manager. Martha Sharkey distributed copies of her report, which covered the following topics: 1) Community Events Page on the CHCA website; 2) collaborative efforts with the Chestnut Hill Business Association; 3) Pastorius Park concert series; 4) new Board member orientation which was held on June 21; 5) plans for the Black and White Gala, the Holiday House Tour, and the 2007-2008 Fund Drive; 6) membership/ “welcome wagon”; 7) staff meetings and office communications; and 8) items for the Local.

New Business. Tolis Vardakis circulated his agenda for 2007-2008, but this could not be discussed due to the late hour. He reported that a generous donor has agreed to renew their funding for the CHCA Administrative Coordinator position.

Having run out of time, the meeting was adjourned at 10:20 PM.

Respectfully submitted,

Nancy Hutter
CHCA Secretary

Minutes prepared by Noreen Spota, CHCA Administrative Coordinator, and approved by the Board of Directors on 7/26/07.