CHCA BOARD OF DIRECTORS MEETING
Chestnut Hill Library
Thursday, November 20, 2008

MINUTES

Board Members Present: Louis Aiello, Anne Anderson, AnnMarie Arment, Robert Bacino, Margaret
Brunton, Miguel Castaneda, Carol Cope, Tony Crist, Brian DeCesare, Joanne Dhody, Marianne Dwyer, Thomas Hemphill, Michael Hickey, Dina Hitchcock (VP Operations), Eileen Jacobs, Kathleen Jones, Mark Keintz (Treasurer), Marie Lachat, Pamela Learned, Virginia Mallery, Anne McNally, Margaret McNally, Ned Mitinger (VP Physical Division), Patrick Moran, Christopher Padova, Marilyn Paucker, Cathy Pimpinella, Jane Piotrowski (VP Social Division), Joseph Pizzano, Ron Recko (Immediate Past President), Rob Remus, Robert Rossman, Meredith Sonderskov, George Spaeth, Kristina Sullivan (Secretary), Pam Thistle, Brien Tilley, and Tolis Vardakis (President)

Board Members Excused: Jane Becker, Stewart Graham, Janice Manzi, Susan Pizzano, Brian Rudnick,
and Jonathan Sternberg

Board Member Absent: Fran O’Donnell

Others Present: CHCA staff members Philip LeCalsey (Community Manager) and Noreen Spota
(Administrative Coordinator); Chestnut Hill Local staff members Scott Alloway (Production Designer), Joel Hoffmann (Staff Reporter), Robyn John (Production Manager), Sonia Leounes (Advertising Sales Manager), Michael Lunemann (Advertising Sales Representative), Jo-Ann Mangano (Classified Assistant), Cheryl Massaro (Circulation Manager), Pete Mazzaccaro (Editor), Jimmy Pack (Assistant Production Manager), and Erin Vertreace (Photographer); Chestnut Hill Community Fund Trustees Jean Hemphill (President), William McGuckin (Treasurer), and Stan Moat (Secretary); Accountants Alan Gubernick and Joseph LePera; and Jim Foster, David Skolnick, Ann Spaeth, Eric Spaeth, and Greg Welsh

Tolis Vardakis called the meeting to order at 7:35 PM and asked for a moment of silence dedicated to Tom Fleming. Noreen Spota conducted the roll call.

Approval of Agenda. Ron Recko asked that the report from the ad hoc committee addressing cash flow issues at the Local be considered immediately following the Fund audit report. After some discussion, there was a motion to approve the agenda as amended; this motion was seconded but did not pass, with 10 votes in favor, 21 votes against, and 3 abstentions.

Approval of Minutes. There was a motion to approve the Board meeting minutes from October 23, 2008 as submitted; this motion was seconded and passed unanimously.

Authorization to Update the “Green Book.” Pamela Learned offered the following motion:

“The CHCA Board requests that the Development Review Committee work with the Delaware Valley Regional Planning Commission consultants of the Chestnut Hill Regional Study between now and August 2009 with the purpose of updating the 1982 Green Book [Chestnut Hill Land Use Guidelines].

This work will include delegating work to the Land Use Planning and Zoning, Historical [Society], Traffic, Transportation, and Parking, and Aesthetics Committees, with the goal of combining the talents of these dedicated volunteers to provide the CHCA Board with a superior update.

The Board requests that the DRC members report to the CHCA Board with any questions and to request direction on the work in December 2008, February 2009, and June 2009, with the goal of presenting a draft report in August 2009.”

This motion was seconded and passed with one abstention.

Fund Audit Report (Draft) for Fiscal Year Ending 3/31/08. Jean Hemphill distributed numbered copies of the draft audit report to the Board members. The final audit report, an “unqualified opinion,” will be available on the CHCA website in December. The Fund’s net assets were $971,826 as of 3/31/08, compared to net assets of $1,050,345 as of 3/31/07. It was noted that the Chestnut Hill Senior Center and Meals on Wheels, although considered part of the Fund, were not audited by these accountants; they are applying for their own 501(c)(3) status. Concerns expressed by the accountants include 1) a decrease in the endowment’s investment income, 2) management expenses, and 3) ensuring that investments are being made properly.

Report from Treasurer. Mark Keintz distributed copies of “balance sheet notes” (not a final balance sheet) for the Local as of 11/20/08 compared to 8/31/08. While reviewing the balance sheet notes, he mentioned the inability of the Local to pay down liabilities, such as the $36,000 line of credit. Mark then stated that financial reports for the Local and Fund will be entirely up-to-date (through 11/30/08) in time for the December Board meeting.

Report from Vice President, Physical Division. Ned Mitinger stated that the DRC has recommended that the Board approve a variance for the garage project at 424 West Springfield Avenue. However, it was too late to add this item to tonight’s agenda, and therefore this issue will be considered by the Board next month. Tom Hemphill, chair of the Traffic, Transportation, and Parking Committee, reported that the planned “bump out” at Germantown Avenue and Bethlehem Pike was discussed at the recent meeting of his committee, and he passed around “before” and “after” photos of the project for Board members to review.

(At this point in the meeting, Tolis Vardakis asked for the missing audit report from Jim Foster, who had given it to members of the Local staff. Pete Mazzaccaro and other staff members of the Local denied having the report. A 5-minute recess was called so that the missing report could be returned.)

Report from Vice President, Social Division. Jane Piotrowski reported on plans for the “Circle of Trees” event on Saturday, December 6 at 6 PM and asked for volunteers. There will also be a membership campaign with ads in the Local to promote the 10% discount at businesses along the Avenue. Jane also stated that the first health forum, held on November 12, was attended by 17 people and was a success; the next health forum will be held on Wednesday, December 10 and will feature George Spaeth’s presentation about glaucoma and “what it means to be sick.”

Report from Vice President of Operations. Dina Hitchcock reported on the settlement that was reached between the Fair Housing Council and the Local. (The complaint was lodged in 2007 against the Local for classified ads that were deemed discriminatory against families.) Damages are $3,350 (negotiated down from $32,000) and must be paid in three installments over the next 12 months. Additional stipulations of the settlement include: 1) the Fair Housing Council will be permitted to publish a commentary in the Local regarding fair housing issues; 2) they will provide free training to the Local’s classified ad staff members; and 3) they will place free ¼-page ads in every issue of the Local for the next 10 years.

Report from Community Manager. Philip LeCalsey reported on the following topics: 1) plans for the Holiday House Tour; 2) renewal of the employee health insurance plan, with an analysis of various proposed premiums; 3) renewal of the office telephone maintenance agreement; 4) quotations for a new fire and smoke alarm system for the office; and 5) staff time for the recent audits. 

Old Business.

Report from Ad Hoc Committee Addressing Cash Flow Issues at the Local. Rob Remus, the committee chair, stated that the committee's recommendations were endorsed unanimously by the Budget and Finance Committee and the Executive Committee. Other committee members are Dina Hitchcock (ex-officio), Mark Keintz, Patrick Moran, and Jane Piotrowski. Rob stated that the committee met four times. Their "drivers" were:

• investigate cash flow shortcomings at the Local and examine debt, both long-term and short-term
• propose new ad revenue streams
• present the committee's research findings
• analyze expected future advertising trends
• ensure the survivability of the Local

Concerns about the Local: debt (e.g. loan from Fund, line of credit), inability to provide adequate reporting, lack of cash reserves, and difficulty with consistently meeting payroll. Challenges that lie ahead
in 2009 include an increase in health insurance premiums, the need for Baseview upgrades, and possible reduction in ad revenues with the possibility of layoffs. We need to take all steps necessary to ensure
survival of the Local given the current era of failing businesses and newspapers, foreclosures, etc. Pete should not be expected to solve all of these problems since he's an editor, not a business manager.

Rob then listed the 10 "corrections" and policy changes. (These were sent to the Board prior to the meeting.)

1. Adjust display advertising commissions (60-day phase-out), placing more emphasis on new business. Current: 17.5% for both old and new accounts. Proposed: 13% for new and 8% for recurring accounts.
2. Mandatory credit application for all new and current customers who wish to run recurring display ads; for classified ads, payment at the time of ad placement.
3. Mandatory bi-monthly collection reporting to the Executive Committee, using our current Baseview application.
4. Equip all reporters with digital cameras in order to ensure that all photos in the Local (online and print) remain the intellectual property of the Local.
5. The Executive Committee will consider instituting a one-time bonus incentive for new display ad sales.
6. The Budget and Finance Committee will set realistic display ad sales goals and targets on a quarterly basis.
7. Have new advertising stream initiatives approved by the Executive Committee, including online initiatives.
8. Obtain a professional evaluation (Rochester Institute of Technology, PA Newspaper Association) of the Local's advertising mix.
9. Obtain additional "outside" advertising sources.
10. With the goal of hiring a Business Manager for the Local, prepare a 6-month plan to augment ad revenue, productivity, and collections, and eradicate debt.

In the ensuing discussion, Ron Recko stated that this is an excellent report, but it is the full Board, not the Executive Committee, that makes policy decisions. George Spaeth added that no CHCA committee can implement policy; only the Board can do so.

At this point Mark Keintz offered a "motion to endorse recent Chestnut Hill Local operational changes: I move that the board endorse the recent actions regarding Chestnut Hill Local business operations authorized by the Executive Committee in its meeting of November 13, 2008, and endorsed by the Budget and Finance Committee in its meeting of November 11, 2008." This motion was seconded. In the ensuing discussion, the following points were raised:

• The full Board should have a chance to review the ad hoc committee report prior to approval.
• The recommendations were presented to the Local staff as a "fait accompli", but we need to review the staff's statement (distributed to the Board at this meeting) too.
• The proposed decrease in commission rates will be offset by bonuses and incentives.
• Many "house accounts" pay low (2-4%) or no commission at other newspapers; 13% was the average commission rate for new business.
• We need to hear from the Local staff on how they would address these issues.
• The Local's income is not keeping up with its increased costs; therefore how do we maintain our staff?
• Importance of incentives to increase revenues.
  

This was followed by a statement from Pete Mazzaccaro, who mentioned the following concerns:

• The staff of the Local appreciates the efforts of the ad hoc committee and understands the financial problems we face.
• His understanding was that he and Advertising Sales Manager Sonia Leounes would be invited to the committee meetings.
• The lack of inclusion of the Local staff sends a message that employees are the problem.
• Certain questions remain unanswered, such as who will review the accounts?
• Compensation for the sales reps will be cut in half, and the proposed time frame (next 60 days) is bad.
• Planning was not done well because the staff was not included even though they were promised the opportunity to provide input.

George Spaeth expressed concern that the committee meetings addressing these issues were not open to the public; we did not follow our process; we need to allow others to provide input; and it is premature
for the Board to approve the proposed changes at this time. George then offered a motion to table Mark's original motion; this failed, with 11 voting in favor and 21 voting against.

Brien Tilley acknowledged the problems with mis-communication but stated that he felt the ad hoc committee report was excellent as a "first step." He cited the need for additional dialogue with the Local
staff before the Board makes a decision. Rob Rossman questioned whether any of the recommendations could be implemented immediately, for example #2? Mark Keintz pointed out that actual employee compensation was discussed, and such discussions should not be open to the public. Kathy Jones then offered a motion to postpone discussion of these issues until the December 18th Board meeting in order to provide the staff with "the opportunity to develop solutions and present our ideas to the Board in December" as stated in the staff memorandum. This motion was seconded. Carol Cope offered the following amendment: that ideas from the Local staff must come to the Executive Committee by the
December 11th EC meeting. This was seconded. At this point there was a motion to "call the question" (stop discussion); there was no objection. Carol Cope's amendment passed unanimously and Kathy Jones's motion passed unanimously. Mark Keintz was asked how much money the compensation-based recommendations would save the Local during the first year after implementation; his response was $50,000 assuming no new business. Mark then offered a motion to extend the appointment of the ad hoc committee for one more month; this motion was seconded and passed unanimously.

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

Minutes prepared by Noreen Spota, CHCA Administrative Coordinator, on 12/15/08.

Respectfully submitted on 12/18/08 by:

Kristina Sullivan
CHCA Secretary

Approved by the Board of Directors without amendment on 12/18/08.