CHCA BOARD OF DIRECTORS MEETING
Chestnut Hill Library
Thursday, November 29, 2007

MINUTES

Board Members Present:

Robert Bacino, Jane Becker, Richard Becker, Edward Berg, Margaret Brunton, Joanne Dhody, Janine Dwyer, Marianne Dwyer, Thomas Fleming, James Foster, Thomas Hemphill, Dina Hitchcock (VP Operations), Kathleen Jones, Mark Keintz, Marie Lachat, John Levitties, Virginia Mallery, Janice Manzi, Anne McNally, Ned Mitinger, Patrick Moran, Fran O’Donnell, Christopher Padova, Jane Piotrowski (VP Social Division), Joseph Pizzano, Susan Pizzano, Ron Recko (Immediate Past President), Meredith Sonderskov, Ann Spaeth, Kristina Sullivan (Secretary), Walter Sullivan, Pam Rosser Thistle, and Tolis Vardakis (President)

Board Members Excused: Elaine Aiello, Louis Aiello, Karen Ampomah, Tia Burke, Carol Cope,
Mary Anna Ross Cowper, Stewart Graham, Jeremy Heep, Robert Rossman, George Spaeth,
and Jonathan Sternberg

Board Members Absent: Sarah Maneely and Robert Previdi

Others Present: Morris Disston (Treasurer), Ed Feldman, Martha Haley, Nancy Hutter, Harry Johnston,
Pete Mazzaccaro (Editor, CH Local), Martha Sharkey (Community Manager), and Noreen Spota (Administrative Coordinator)

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

Approval of Agenda. There was a motion to move Action Item #1 (review of Local subscriptions and CHCA memberships) to Old Business. The revised agenda was approved unanimously.

Approval of Minutes. There was a motion to approve the Board meeting minutes from October 25, 2007 as submitted. This motion was seconded and passed unanimously.

Welcome to New Board Member. Tolis welcomed Fran O’Donnell as the new Interlocking Director from the Chestnut Hill Parking Foundation.

Approval of New Vice President, Physical Division. Tolis proposed that Ned Mitinger be appointed as the new Vice President, Physical Division, following Jeremy Heep’s resignation from the position. There was a motion to approve this appointment and the motion was seconded. Ron Recko opened the ensuing discussion, stating that 1) when Ned was Treasurer during the previous year, the situation with the 401(k) for the CHCA/Local employees was not addressed; 2) Ned presented the motion to disband the Oversight Committee; 3) Ned was instrumental in the previous Board decision to audit the CHCA every other year; and 4) if Ned still serves on the Budget and Finance Committee, there may be a conflict with the Development Review Committee meetings. Walter Sullivan stated that this type of comment is inappropriate and that any member of the Board may nominate someone else to fill the position. Virginia Mallery and Mark Keintz both stated that the Board should have been given the opportunity to think about proposing other candidates. Tolis stated that the Board was notified on 11/12/07 by e-mail of Jeremy’s resignation. Ed Berg urged the Board to stay on the subject and asked whether anyone else is interested in the position. Marie Lachat added that Ned has served as the Physical Division Vice President in the past, has served on several of the division’s committees, and understands this area. The motion to approve Ned’s appointment passed with 5 votes opposed and 5 abstentions. Ned then gave a brief statement about his experience with Physical Division issues and said that he will work to promote “the greening of Chestnut Hill” via an active Tree Committee.

Report from Treasurer. Financial statements as of 10/31/07 for the CHCA, Local, and Fund were distributed. Moss Disston read his report summarizing various trends in the finances of the CHCA and Local. (This report is an addendum to the minutes.) As corrections, Moss noted that the amount required to meet the bi-weekly payroll is over $28,000, not $23,000 as stated in the report, and Jane Piotrowski noted that the expenses for the Holiday House Tour are budgeted to be $6,000, not $3,000 as stated in the report. In the ensuing discussion, Jim Foster stated that prior to 2003, the Local’s funds were often used to subsidize the CHCA and the finances of the CHCA and Local were not clearly separated. Jim stated his opinion that the $31,000 loan made a year ago to the Local from the Fund, which was used to pay the printer and employee health insurance, should not be charged only to the Local since some of the printer invoices were not posted and less important expenses were paid first. Jim also inquired about what Line L2 on the Local’s balance sheet represents ($24,372 as of 10/31/07 compared to $11,370 a year ago). Moss explained that this money was advanced (pre-paid) to the Local from the Fund for shared expenses. Moss also stated that if the printer invoices were “lost” or “hidden” this did not negate the need to pay them once they were discovered. This loan cannot be forgiven since it was properly documented by the Fund Trustees, whereas earlier transfers/loans to the CHCA from the Fund were not and therefore they cannot be quantified. At this point Joe Pizzano asked for clarification of Line E15 on the Local’s income statement, which indicates that $22,282 has been spent on “newspaper postage” as compared to $5,815 a year ago. Joanne Dhody noted her concern about display advertising income being $14,400 less than budgeted so far this year. Pete Mazzaccaro responded that the advertising income budget is inaccurate due to previous bookkeeping errors.

A spirited discussion about the CHCA/Local employee’s 401(k) plan ensued. The Employee Handbook dated 1/1/04 provides that the employer contributes an amount equal to 5 percent of the employee’s salary. Although the employee may invest up to 15 percent of his pay per month, it appears extraordinarily that the employer’s contribution is made whether or not the employee matches it or exceeds it. In recent times, the employer, faced with the primary need to meet payroll and with insufficient income, has failed to make monthly, and perhaps sometimes timely, payment of its contribution. During the 2006-07 term there was an arrearage of many months. As of now, after substantial payment, there remains an arrearage from July 2006 through April 2007. It appears that the employee’s pay stubs show with an asterisk these 5 percent employer contributions as compensation. Ron Recko disclaimed responsibility or essential knowledge of this circumstance, affirming that his primary responsibility as President had been to prepare and conduct Board meetings. Ron then proceeded to read a memo from Judy Morgan to Ned Mitinger about the non-payments to the 401(k). Tolis then read a statement in response to Ron about how Ed Budnick, Interim Community Manager, instructed the bookkeeper to not pay the 401(k) employer contributions because of the tight cash situation.  

Walt Sullivan stated that the immediate issue was not the Local or any critique of its financial management, but rather what to do about the pressing immediate problem of the 401(k) contributions. All must understand that these are employments at will and that the 401(k) employer contributions are discretionary and may be suspended or modified prospectively. He submitted, however, that they comprised a part of the terms and conditions of employment and as such should not be modified retroactively. Ron Recko and some others agreed. Walt expressed the view that the employer is obligated to raise or borrow the arrearage after October 2006, and that if it cannot do that at this time that remains a debt to the employees to be paid as soon as possible. Ron suggested that the Board ask the Fund Trustees for the money, stating that the Fund can afford to pay for the 401(k) due to the sale of 8431 Germantown Avenue. Dina stated that meeting payroll is always the #1 priority and she urged Board members to stop pointing fingers and figure out how to address the problem. Ed Berg stated that the Board must decide: 1) if the Local makes a profit, where should the money go; and 2) if the Local loses money, what should be done about it. He feels that something must be done about the Local being unsustainable and noted the dual purpose of the Local as being the voice of the community and a business that should be able to help the CHCA. Tom Fleming noted that the Fund is currently being managed very carefully and that the Fund Trustees will not want to bail out the Local and/or CHCA again. He commented that it is absurd to expect the CHCA to support the Local financially; as a business, it must at least break even. Anne McNally noted that today, businesses are not buying as many ads in newspapers, opting instead to advertise online.

Tolis stated that $28,500 to $30,000 is owed for the 401(k) from November 2006 through December 2007 and asked where this money should come from. Walt added that it must be made very clear to the employees about exactly when the employer contribution ends. Meredith Sonderskov offered a motion to end the employer contribution as of today, going forward. This motion was seconded. Meredith then offered an amendment stating that payment of the employer contribution owed from November 2006 to November 2007 will be authorized. This amendment was seconded. After some additional discussion about the obligation to honor previous commitments, Richard Becker offered a motion to call the question (stopping discussion). This motion passed, with 21 votes in favor. Meredith’s amendment then passed, with 21 votes in favor.

A discussion ensued about where the money would come from. Kathy Jones then offered a motion to table Meredith’s motion, as amended, until next month’s meeting. This motion was seconded and passed.

Anne McNally then offered a motion to notify the employees of the CHCA/Local that the employer contribution to the 401(k) will cease as of today, until further notice. This motion was seconded and passed with 21 votes in favor, 5 votes opposed, and 3 abstentions. Dina Hitchcock mentioned the value of time off for the employees; the day after Thanksgiving was made into a paid holiday, and unused vacation time may now be carried over into the next year. Chris Padova then recommended that an ad hoc committee be established to come up with options for the 401(k). Tolis assigned the following five people to this task: Moss Disston (chair), Jim Foster, Mark Keintz, Pat Moran, and Susan Pizzano. This group will report back to the Board at next month’s meeting. 

Tolis then advised the Board that a letter was received from the law firm Montgomery McCracken representing several CHCA Board members and others in the community. This firm, hired by Lloyd Wells, is seeking access to the financial records of the CHCA/Local and Fund for fiscal years 2005 and 2006. According to law, directors are entitled to have access to the financial records of the CHCA. Legal issues are being discussed by Jean Hemphill, President of the Fund, and Montgomery McCracken. Once these issues are settled, the requested financial records will be released. Dina Hitchcock asked that besides Jim Foster and Joe Pizzano, the Board members represented by the law firm identify themselves for the sake of transparency. Ron Recko, Meredith Sonderskov, Virginia Mallery, Ann Spaeth, and Susan Pizzano raised their hands. Ed Feldman from the audience raised his hand.

Report from Vice President of Social Division. Jane Piotrowski urged all Board members to attend the upcoming Holiday House Tour on December 8, as it is an important fundraiser for the CHCA. There will also be a tree-lighting event at the Christ Ascension Lutheran Church after the Holiday House Tour; all are welcome. Pam Thistle mentioned that volunteers are still needed for the House Tour, in order that we can provide transportation with PhillyCarShare. She added that gift certificates are available and groups of 10 or more will receive a 10% discount off the ticket price. Jane then reminded the Board that an organizer is still needed for next year’s Pastorius Park concert series, and people will be needed to co-chair next year’s Black and White Gala.

Report from Vice President of Physical Division. Ned Mitinger reported that the Land Use Planning and Zoning Committee has approved the variance for 8623 Germantown Avenue (rear). He stated that the property has been sold by Dr. Stephen Unger, and there is no intention to change the attached parking lot area.

Report from Vice President of Operations. Dina Hitchcock briefly summarized her report, copies of which were distributed to the Board. She urged Board members to contribute to the Fund Drive and added that the mailing that is going to all CHCA members and non-member subscribers to the Local will be sent out next week. The next Bylaws Committee meeting will be held on Monday, December 10; proposed changes should be e-mailed to Dina, who will share them with the rest of the committee.

Report from Community Manager. Martha Sharkey distributed and reviewed her report, which covered the following topics: 1) Holiday House Tour; 2) Fund Drive; 3) Blood Drive; 4) membership; 5) CHCA Block in the Local; 6) new office telephone system; 7) community relations; and 8) various office issues including renewal of the employee health benefits plan. Martha added that on Thursday, December 6 the Melting Pot will host a dinner benefiting the Chestnut Hill Community Fund.

Old Business.

Review of Local Subscriptions and CHCA Memberships. Due to the late hour, Tolis stated his preference to defer discussion of this topic until the next Board meeting.

New Business.

CHCA Committee Meeting Minutes. Jim Foster stated that according to the Bylaws, all standing committees must keep minutes of their meetings and make these minutes available to all.

There being no further business, the meeting was adjourned at 9:52 PM.

Respectfully submitted,

Kristina Sullivan
CHCA Secretary

Minutes prepared by Noreen Spota, CHCA Administrative Coordinator, and approved by the Board of Directors on 12/27/07.