CHCA BOARD OF DIRECTORS MEETING
Chestnut Hill Library
Thursday, December 18, 2008

MINUTES

Board Members Present: Louis Aiello, Anne Anderson, Robert Bacino, Margaret Brunton, Miguel
Castaneda, Carol Cope, Tony Crist, Brian DeCesare, Joanne Dhody, Stewart Graham, Thomas Hemphill, Michael Hickey, Dina Hitchcock (VP Operations), Kathleen Jones, Mark Keintz (Treasurer), Marie Lachat, Pamela Learned, Virginia Mallery, Janice Manzi, Anne McNally, Ned Mitinger (VP Physical Division), Fran O’Donnell, Christopher Padova, Marilyn Paucker, Cathy Pimpinella, Jane Piotrowski (VP Social Division), Joseph Pizzano, Rob Remus, Robert Rossman, Meredith Sonderskov, George Spaeth, Jonathan Sternberg, Kristina Sullivan (Secretary), Brien Tilley, and Tolis Vardakis (President)

Board Members Excused: AnnMarie Arment, Marianne Dwyer, Eileen Jacobs, Margaret McNally,
Patrick Moran, Brian Rudnick, and Pam Thistle

Board Members Absent: Jane Becker, Susan Pizzano, and Ron Recko (Immediate Past President)

Others Present: Chestnut Hill Local staff members Joel Hoffmann (Staff Reporter), Jo-Ann Mangano
(Classified Assistant), Cheryl Massaro (Circulation Manager), and Pete Mazzaccaro (Editor); CHCA staff member Noreen Spota (Administrative Coordinator); Chestnut Hill Community Fund Trustees Jean Hemphill (President) and William McGuckin (Treasurer); Steve Fillebrown (Budget and Finance Committee Member); Accountant Joseph LePera; Jean McCoubrey (Land Use Planning and Zoning Committee Co-Chair); Lawrence McEwen (Development Review Committee Co-Chair); Mr. and Mrs. Henry O’Reilly (owners of 424 West Springfield Avenue); Mr. and Mrs. Gary Crooks and Tom Halloran (neighbors of 424 West Springfield Avenue); and Jim Foster, Eric Spaeth, Ann Spaeth, and Greg Welsh

Tolis Vardakis called the meeting to order at 7:35 PM and wished those present happy holidays. Noreen Spota conducted the roll call.

Approval of Agenda. There was a motion to approve the agenda; this motion was seconded and passed.

Approval of Minutes. There was a motion to approve the Board meeting minutes from November 20, 2008 as submitted; this motion was seconded and passed with two abstentions.

Approval of Variances for 424 West Springfield Avenue. Ned Mitinger read the following motion into the record: “Approve the requested variances for a garage with second floor which exceeds the height limitation and the second floor usage. The permissible height is 15 feet. The proposed height is 21 feet and 7 inches. In addition to the first floor garage, the second floor is intended for a physical fitness workout room. Plumbing will be installed. Note: the immediately adjacent garages are a comparable height of 24 feet 6 inches, 18 feet, and 21 feet 10 inches. The request is recommended for approval by the Land Use Planning and Zoning Committee and the Development Review Committee.” This motion was seconded. Ned introduced Jean McCoubrey, LUPZ Co-Chair, who spoke briefly about the project.
Near neighbors Mr. and Mrs. Gary Crooks and Tom Halloran stated that they attended the committee meetings and spoke against this project, feeling that it would restrict their view and negatively affect their respective property values. They felt that their specific objections were not adequately addressed. In the ensuing discussion, points that were raised included:

• The architect for the project, Larry McEwen, made major changes to the original plan, such as reducing the size of the garage and adding trees.
• Board members should have pictures of the site and the proposed garage in order to make a more informed decision.
• Board members were notified about the LUPZ and DRC meetings but few attended.
• Larry McEwen described the project review process and the changes that were made after meeting with the near neighbors. The nearby garages are 2,300 square feet and 2,900 square feet; the proposed garage at 424 West Springfield will measure 825 square feet.

After further discussion, Mark Keintz offered a motion to call the question (ending discussion); this motion passed with 24 votes in favor and 6 votes against. The original motion to approve the variances passed with 20 votes in favor, 6 votes opposed, and 5 abstentions.

Audit Report for the CHCA/Local for FY 2008. Mark Keintz distributed the following documents, prepared by the St. Clair accounting firm, to Board members for review:

• Draft of balance sheets for the CHCA and Local for fiscal years ending 3/31/08 and 3/31/07.
• Draft of statements of operations and retained earnings/deficit for fiscal years ending 3/31/08 and 3/31/07.
• Draft of statements of cash flows for fiscal years ending 3/31/08 and 3/31/07.
• Draft of notes to the combined financial statements.

Mark reviewed the documents and addressed some of the important findings of the audit. For example:

• Accounts receivable for the Local decreased from $123,419 as of 3/31/07 to $100,935 as of 3/31/08.
• The Local has not paid down its $36,000 line of credit for Baseview software, and as of 3/31/08 owed the Fund $24,310 from a 2006 loan for printing and health insurance and also owed the Fund $24,372 for unpaid rent from several years ago.
• Advertising revenues decreased from $1,016,22 in FY 2007 to $967,264 in FY 2008.
• Net losses for the Local were $15,513 in FY 2007 and $27,945 in FY 2008.
• Total assets for the Local dropped from $212,069 as of 3/31/07 to $161,804 as of 3/31/08.
• The audit report showed $75,333 in revenue from the Fund to the Association for the Administrative Coordinator’s salary and other shared operating expenses including a portion of the Community Manager’s and Bookkeeper’s salaries.
• The Association had a net loss of $16,231 in FY 2007 and net income of $23,935 in FY 2008.
• The Association made employer contributions of $23,552 to the 401(k) in FY 2007, but decided not to make employer contributions in FY 2008 due to budget constraints.

Mark stated that the auditors may ask him to demonstrate in writing that the CHCA/Local is “a going concern.” In other words, is the CHCA/Local financially viable? Can the CHCA/Local meet its liabilities? Has action been taken to address the financial problems being faced by the Local? In the ensuing discussion, points that were raised included:

• When the economy was good, the Local still lost money.
• Advertising revenue is expected to decrease for the foreseeable future.
• The Local cannot borrow more money currently.
• In the past, the profits of the Local offset the losses of the Association.
• The only transfers occurring now from the Local to the Association are a portion of the Community Manager’s salary and the provision of advertising space at no cost.
• The Local needs to be self-sustaining.
• The donation to the Association for the Administrative Coordinator’s salary may not continue indefinitely (3 years out of the 5-year commitment have already passed).

Jean Hemphill spoke about the purpose of the Fund as “a permanent endowment.” It can contribute to the Association’s programs but cannot subsidize the losses of the Association and Local since the CHCA is not a 501(c)(3) entity.

Report from Treasurer. Financial statements as of 11/30/08 for the Local were distributed and reviewed. Mark Keintz stated that the Bookkeeper is presently caught up with preparing the Local’s financial reports.

Approval of Recommendations Addressing the Local’s Finances. Rob Remus, Ad Hoc Committee Chair (along with committee members Dina Hitchcock, Mark Keintz, Pat Moran, and Jane Piotrowski) gave a Power Point presentation summarizing the committee’s research and recommendations. Copies of this were distributed to Board members along with a “Preface to the Recommendations” addressing the Local’s cash flow, collections, sales volume, cost of sales, commissions, policies, and the hiring of a business manager. Support was also expressed for many of the recommendations made by the staff of the Local. In the ensuing discussion, points that were raised included:

• Older readers of the Local will remain with print, as opposed to electronic, media.
• The “cost of sales” at the Local is 21 percent as compared to an industry average of 13 percent.
• Over 20 different newspapers were contacted by the ad hoc committee in the course of its research, including larger and smaller publications in circulation and geographic coverage.
• The commission rate at the Local is 17.5 percent on all ads, as compared to a range of 2 percent to 12 percent at other papers depending on the type of ad (new business vs. old business).
• Many papers use independent contractors (who receive no benefits) to sell advertising.
• Salaries at the Local are in line with industry standards in all departments except for display advertising.

A motion to go into executive session passed, with 3 votes opposed and 1 abstention. At 9:30 PM all of those present who are not members of the Board were asked to leave the room. The executive session ended at 9:40 PM, and non-Board members were invited back to the meeting. Carol Cope offered a motion to approve the recommendations of the Ad Hoc Committee; this motion was seconded. George Spaeth asked Pete Mazzaccaro what he thought of this proposal. Pete responded that the proposal was good assuming the research is accurate, but that he had concerns about its implementation in that he did not want to subject the advertising sales staff to a drastic and sudden pay cut. Pete also emphasized that a publisher/business manager needs to be hired to drive all of these changes, and that staff members should participate in developing this person’s job description. Rob Remus stated that there would be a 60-day implementation period for commissions, and other policy changes could be put into effect immediately. It was also recommended that there would be a monthly report on each action item. A vote was then taken on the motion to approve and implement the recommendations of the Ad Hoc Committee; this motion passed with no votes opposed and 4 abstentions.

A motion was then offered to form a task force to implement the recommendations, chaired by Pat Moran with members Mike Hickey, Dina Hitchcock, and Jane Piotrowski. Kathy Jones added that Local staff members should have a voice and a vote on the task force, but would not decide on salaries. This motion was seconded and passed unanimously, and Pete was added to the Task Force.

Report from Vice President, Physical Division. Ned Mitinger stated that he would provide an update on this division’s committees in January.

Report from Vice President, Social Division. Copies of Jane Piotrowski’s report were distributed to Board members, covering plans for the CHCA health lecture series, blood drive, and membership. Christopher Padova mentioned that there will be a training session for Town Watch groups on Wednesday, January 21 at 7:00 PM at the Chestnut Hill Library conducted by the Philadelphia Police Department.

Report from Vice President of Operations. Dina Hitchcock provided updates on the Holiday House Tour, employee health insurance, and Fund Drive. About 575 people attended the Holiday House Tour, and net income will be approximately $19,000. Health insurance premiums will increase by 10 percent as of January 1 along with higher co-pays and deductibles. Over $16,000 from 124 donors has been raised in the Fund Drive during the past two weeks. Tolis Vardakis encouraged Board members to contribute to the Fund.

Report from Community Manager. Due to the absence of Philip LeCalsey, there was no report.

At 10:00 PM a motion was offered by Dina Hitchcock to go into executive session to discuss a personnel matter. This motion was seconded and passed. All of those present who are not members of the Board were asked to leave the meeting.

Old Business and New Business: None.

Announcement. Kathy Jones mentioned that the Parkway Northwest High School for Peace and Social Justice, located in Mt. Airy, is seeking mentors.

Minutes prepared by Noreen Spota, CHCA Administrative Coordinator, on 1/19/08.

Respectfully submitted on 1/22/09 by:

Kristina Sullivan
CHCA Secretary

Approved by the Board of Directors without amendment on 1/22/09.