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| New Hope Chamber of Commerce office (Photo: Charlie Sahner) |
By Charlie Sahner
It was a relatively warm, dry evening during an otherwise cold and
stormy winter as Roger Green, then vice president of the New Hope
Chamber of Commerce, sat at an event registration table in the Raven,
greeting arriving guests at the business group’s annual holiday party.
“It’s 6:15 p.m., and name tags are being given out, and friends are
coming up me to say ‘hi,’” recalls Green, now chamber president. “Drinks
and hors d’oeuvres are being served, a singer is warming up, and the
party is scheduled to start at 6:30.
“I am given this stack of checks to review,” continued Green. “I look
at the first couple of checks, I know what they are, I know why they’re
there, and I assume we are operating in an honorable system where
people wouldn’t do anything like cut themselves checks without approval.
“The first check is to the restaurant for the party, and the second
one was a check for the awards, by which it is meant the plaques and
statues that were given out at the party,” Green continued.
“And then there were a couple of other checks, then the four checks
to some individuals on the bottom. So I just sign them, because I know
what the first two are, and we’re committed and the party’s going on.”
What Green didn’t know at the time was that “the co-chairs of Arts
and Crafts authorized disbursements of $3,600 of cash awards. The two
co-chairs (Connie Gering and Linda Rowe) and Sharon Flanagan each
received a $1,000 award, and Linda Rowe was authorized to convert $600
into ‘crisp bills’ to be given to key Committee members,” according to a
document Green later prepared in December, 2013 entitled “Financial
Problems.”
That document was purportedly shown to then-president Connie
Gering, board member Brandon Wind, long-time chamber member and official
Sharon Flanagan, and the chamber office manager, among others, in
various forms in the weeks following the Holiday Party.
Confirmed Rowe in a statement, “The $600 was given to the six
committee members at $100 each. The awards were given at the annual
holiday party to the entire committee.”
Green says he found out that something was wrong with chamber
finances some ten days following the Holiday Party on Dec. 14, when he
received a call from Gering saying there was an immediate monetary
shortfall that needed to be addressed.
Soon thereafter, Green and then-secretary Flanagan began
“investigating all charges to determine what had gone wrong,” documents
show.
Says Green, “Connie claimed that the chamber was out of money because
Nick [Gialias] had been an inept treasurer, and therefore he should
immediately be fired and taken off the board, and she should be able to
fix it. Nick said ‘Connie has been in the books, she’s been using the
debit card despite my repeated request not to, and for all these
reasons, we can’t get a handle on this thing.’”
As Green continued probing, evidence quickly revealed that one of the award checks in question had been given to Flanagan.
Says Green, “I think most intense moment for me was when I found out
they had cut themselves these checks. To me that was unimaginable
behavior.”
“The other amazing moment was going through the budget and finding
that the holiday party was never in the budget, and having Sharon
Flanagan tell me ‘no, it was included in with the holiday event.’ And
then going through the line item on the holiday event and noticing that
there was nothing on the line item that looked like it could have been
for the holiday party,” he continued.
Gering disagrees: “Included in the Arts and Crafts event budget was a
projected $5,000 for “coordinating fees” to cover management expenses. A
precedent was that the coordinator of Restaurant Week had always been
paid, as had some of the people working on Friday Night Fireworks.
“As mentioned above, the event budget including these fees was
approved by the Executive Board and was included in the Budget that was
approved by the Board,” added Gering. “Because of the hard work done by
committee members thereby bringing in the event under budget, checks
totaling $3,600 were awarded to committee members, myself included. If
there was a mistake, it was that these were noted as “Awards” and
presented at the Holiday Party. “
Gering also disputes the assertion that the holiday party was not
properly accounted for in the chamber budget, saying, “Each event
committee of the Chamber develops a budget for that event. These budgets
break down projected revenue and expense categories. So, for example,
the Arts and Crafts budget breaks down anticipated expenses for things
like advertising, supplies, rentals, etc.
“These budgets are then reviewed and approved by the Executive Board.
The projected totals for revenue and expenses are then included as
event line items in the Chamber’s annual budget, which is then reviewed
and approved by the entire Board. All event budgets are sent to the
Treasurer and are available for review by any Board member or Chamber
member.”
In terms of approvals needed for actually spending budgeted funds,
Gering states, “Once the event budget has been reviewed and approved per
the above process, the event committee has the responsibility and
authority to make purchases and commit funds within the total budget for
that event; it does not have to take each expenditure back to the Board
or Treasurer for approval since this would be onerous and inefficient;
again, with the provision that the event committee is not going over
budget. Chamber bylaws state ‘If a Committee budget has been approved,
the committee Chair shall sign invoices to authorize actual
disbursements.’”
Gering also said that then-treasurer Nick Gialias indicated the
chamber’s budget was “on track” at both the October and November board
meetings of 2013, right before the Holiday Party at the center of the
controversy. Gering argues that this shows Gialias knew about the
expenditure for the holiday party and that money spent on the event was
not the direct cause of the chamber’s financial mess.
Responded Gialias, “That refers to the annual budget, and the items
that were budgeted; this doesn’t include items that were not budgeted,
nor approved, and just spent without any approval.”
Rowe said, “The awards are budgeted by the committee and approved by
the board of directors at the May board of directors meeting and the
2013 A&C budget did allow for this.”
Rowe currently holds the position of secretary on the chamber’s board
of directors. “The top three people were to be awarded $1000 each,
which I did question,” she added.
“According to Sharon Flanagan, the co-chairs considered these
expenses within their purview to authorize without further Board
discussion,” reads a section of “Financial Problems.” Flanagan was a
member of the 2013 Arts and Crafts committee of the chamber, and has
held a variety of positions on the chamber board over the years, in
addition to her role helping manage the annual festival.
The document goes on to say, “Chamber By-Laws permit expenditure up
to the approved budget limit without line item approval from the Board
or any Executive Officer. Sharon and Connie Gering both noted that there
was a $3,500 line item for “Awards” in the approved Arts & Crafts
Fair budget. Sharon asserted that the Chamber Board permitted these
payments during discussions about Restaurant Week, when the Board
“agreed to continue the discussion” about the appropriateness of paying
volunteers at a later date. She further asserted that paying other
groups for parties or dinners constituted an appropriate precedent for
paying cash in this case,” continues the document.
“An alternate interpretation might consider that self-dealing
disbursements are a different ethical class of spending than any other,”
asserts another passage from “Financial Problems.”
“The Arts & Crafts Chairs never alerted the Board that the
“Awards” line item referred to payments to themselves,” the document
continues. “Connie took a strong stand against paying volunteers when
asking the Board to reabsorb Restaurant Week at our July [2013] meeting.
The Board supported Connie’s stand by voting to reabsorb Restaurant
Week, expressly because “it was wrong” to pay volunteers. Finally, the
co-chairs never asked the Board or Executive Committee to confirm their
interpretation of their right to make these disbursements.”
Said Gialias, “Just because you put a vague budget item in your
budget, it still needs to be expensed, and that was never done here.”
“All event budgets are supposed to be submitted to the treasurer for
review. In this case, no event budget to my knowledge was sent for the
holiday party.”
Further, says Gialias of the budgeting process, “These are estimates
going in and they’re not very detailed. The purpose of having the
treasurer approve them at the time they’re wanted is because you need a
more detailed explanation of what those expenditures actually are when
you fully realize them, and they need to be accompanied by invoices and
receipts.”
In terms of the belief that a committee chair can sign invoices,
Gialias says, “No, that’s wrong. The committee chair doesn’t do that,
the treasurer does that.
“You have the ability to authorize, but you can’t cut the check for it, that has to be done by the treasurer.”
Gialias further contends, “The thing I take issue with is that
committees can disburse their own funds by signing checks. That’s not
true. The treasurer must sign the check, unless there’s a situation
where the treasurer can’t sign the check, in which case he’ll appoint
someone like the vice president and a co-signer on the account.” In
fact, Gialias’ trip abroad in December, 2013 caused him to appoint
then-vice president Green as signer of the fateful Holiday Party checks.
Commenting on the state of chamber finances immediately after the
Holiday Party, Gialias said, “We had gone from around $8,800 to $300
without me as a treasurer approving any expenses. I was shocked to see
that, and that it all happened within a week.”
“Later, we discovered the cost of the holiday party, which I recall
being $3,500, and I had a major problem with that because it’s way too
much to spend for this kind of event at this kind of organization, where
we really don’t have that kind of money,” he continued.
Gering sees different reasons for the chamber’s budgetary shortfall:
“In January, Sharon [Flanagan] reported to the Board that what she found
there was approximately a $10,000 deficit in our last fiscal year that
was carried forward but wasn’t noticed because the revenue generated by
the Arts and Craft Show provided the necessary operating cash. (Note
last year, the A&C show netted the Chamber approx. $58,000; we were
able to come in under budget on the expense side by approximately $4,794
due to the hard work of the committee members.”
Flanagan bolsters the view that debt from previous chamber
administrations weighed heavily on chamber finances and contributed to
the group’s near-insolvency in December in a memo to fellow board
members obtained by the
Free Press. “We weren’t doing well.
Because of treasurers long past, we are playing catch up. But that
doesn’t mean that there is a problem.”
“We have an accountant as treasurer who will make sure that we are
compliant and back on track again, explained Flanagan. “Past chamber
boards have taken on more expenses than we could sustain, given our
income, and it finally caught up with us with the last chamber board.
“The money maker that drives the Chamber is the New Hope Arts &
Crafts Festival, which is a healthy ongoing event, unless something is
done that undercuts that,” continued Flanagan. “If someone else takes
over, it will likely take 8 years to rebuild it, because that is what it
has taken to build it from a $6000 profit to a $58,000 profit, and the
quality will likely degrade, as it has for so many art festivals that
are run by impersonal entities. And the chamber will get a small amount
of the profits.”
In her memo to the board, Flanagan sees other reasons for the
chamber’s precarious December financial situation: “Fireworks was in the
black, the [holiday] tree was not. We have not received grants that we
expected to receive, so that has hurt. Especially for the holidays.
“Having been included in this, as I should be, I just want to know what the problem is?” she asks.
Rowe said she believes that chamber treasurers for the past four
years have been “well-intentioned” but “in over their heads,” saying she
also “over the past two years, asked for an audit of the books to be
done at the change of office.”
Said Gialias, “In a non-profit organization, I think it’s especially
important that we’re transparent and everything sees the light of day.
We have a very clear policy that all expenses run through the treasurer.
This is important not only to make sure things are honest, but also
helps to manage the cash flow of the organization that particular
committees may or may not be aware of, and in this case, this was not
done.
“I think we’ve had a very clear policy of that dating back to
[chamber treasurers] Bill Scandone and Ryan Fuller, where all expenses
have to be approved by the treasurer, whether it’s debit card, which we
regulated very highly, or whether it’s a written check,” added Gialias.
In his opinion, the “$10,000 carryover debt” described by some others
was not the main issue contributing to the chamber’s cash crunch in
December of 2013. “Issues like that can be fixed and addressed,” he
said.
“I’ve really worked very hard on making the chamber an organization
that is solely focused on doing things to help the business community
here, and I would like to see us continue on that path,” continued
Gialias. “We have to make sure things like this don’t occur in the
future.”
According to the “Financial Problems” document, “Linda and Connie
deposited their checks shortly after the Holiday Party. They
subsequently made full restitution of their $1,000 awards when notified
by Roger (and, in Connie’s case, Brandon Wind) that the Board intended
to pursue disciplinary action unless the money was returned. Upon
learning that the Chamber was essentially out of funds, Sharon chose not
to deposit her check, and it was subsequently destroyed.”
The notification by Green to Gering took place at a meeting attended
by board member Brandon Wind, according to Green and two additional
sources who requested anonymity due to the sensitivity of the situation.
Wind would not comment.
Said Green of the meeting, “We told Connie that if she didn’t give
the money back, we were going to take the case to the general
membership.”
Gering did not address the alleged meeting in her statement, but in
the past has said she stepped down from the chamber presidency last
winter to more fully be able to attend to her duties as newly-elected
New Hope Borough Council member.
Green, slated to take over as president of the chamber in April,
assumed the position some three months early. “By February we were on
our way to a better place financially,” he said.
Grover E. Stults took over as treasurer of the New Hope Chamber of
Commerce on April 1, 2014. A Certified Public Accountant by trade, with a
reputation for candor, he recalled his first remarks to the chamber
leadership: “I’m the new sheriff around here.”
“I want documentation of expenses; I want to see an invoice; and I
want to see an invoice from the chairman saying we received the items
that we were billed for,” he recalls saying.
“I have full access to everything, and I’m here to say I want to make
sure it goes to the betterment of the business community of New Hope,”
he continued.
“We’re not handing out debit cards like tissue paper. We have them,
and we’re not handing them out,” Stults remembers saying, along with a
phone call to the chamber’s bank: “I don’t care where they are, Mr.
Banker, cancel them right now. This is a non-profit organization that
needs to have controls, and until I figure out what’s going on, cancel
the cards.”
In terms of the current state of chamber finances, Stults said,
“We’re solvent, we’re back on our feet, and Roger and the board are
cooperating with my suggestions.”
“We’re making changes,” he added.
One change that would be welcomed by many chamber members interviewed
for this article would be smaller allotments for meetings, member
events and parties involving expenditures for food and other
refreshments. One chamber official estimated that expense as
representing nearly 40% of membership dues collected.
Said prior treasurer Gialias, “It’s way too much. I could see 4%.”
Said Green of the controversy, “The chamber serves at the will of,
and in support of, the businesses in New Hope. That requires a standard
of us, it requires that we operate in sunlight at all times, it requires
that we have a stable financial footing, it requires that we have
dialogue with our members, and it requires that we act with a vision of
what we can do to support our members.
“The view used to be that the chamber runs events that bring people
to town. In pursuit of that, they would buy products and services online
to get them cheaper than through businesses in town that sell the same
thing — we don’t do that anymore,” said Green.
“They figured that once they created events, that was the end of the
story, so we would have food trucks at the Arts and Crafts Festival that
competed with people who sold the same thing in town, and who were not
allowed to put food trucks there. That won’t happen anymore.
“The view of the chamber that I inherited was that it was basically
an events company centered around the Arts and Crafts Festival and
Fireworks, which bring people to town, but that’s the end of our
responsibility,” he added.
“So we’re overhauling the events so that they not only strengthen the
image of the town, but also bring and keep people here to enjoy
everything that the town has to offer.
“Secondly, the chamber is not a club, it’s a service organization,
and it needs to reach out to other organizations that are important to
the businesses of New Hope,” Green said. “We started working jointly
with the Lambertville Chamber of Commerce and more closely with the
borough manager here in New Hope. We have an expanded view of who we are
and what we’re doing, and we’re putting in place the financial controls
necessary to do that and to be able to provide a transparent look at
the financials of the chamber, because if we’re going to ask for
people’s trust and money, we need to do that,” he added.
“This Chamber has done many good things for New Hope,” said Green.
“New Hope Celebrates was spawned in the Chamber. The Arts & Crafts
Show has become a tremendous success, abetted by the efforts of a
dedicated group of volunteers seeking nothing for themselves but to help
our community. The Chamber-sponsored Fireworks have improved the
regional reputation of New Hope, and, I expect, will return next year
with a program designed to support our merchants better,” continued
Green.
“Nonetheless, the business community of New Hope has operated with
varying degrees of distrust and skepticism toward the chamber for years,
and unfortunately I think that these episodes show that was not
inappropriate.
“And while I was not a direct participant, I am the president of the
organization, and I want to apologize to the members because I feel they
were not treated appropriately, and they were not given the
transparency they deserve nor, frankly, the focus on what makes their
businesses do best,” he said.
“Accountability and transparency are the only ways to run a
business,” added Green. “We will make sure that every single penny is
accounted for, and we’ll make sure every voice is heard. I believe we’re
doing the things necessary to earn your trust and rebuild the chamber.”
