by Wesley Ratko

In a split vote at its March 28 meeting, the CHCA board of directors approved the transfer of $23,000 from the coffers of the Chestnut Hill Local to fill a deficit in the community association’s budget for fiscal year 2014. The current fiscal year ended March 31.

The transfer of funds from the Local, however, would only take place if proposed fundraising efforts fail.

CHCA treasurer Tony Reilly presented the Budget and Finance Committee report to the board, along with its recommendation to use money from the Local to close the budget gap.

The primary cause for the shortfall was the end of a six-year pledge from an anonymous donor. Reilly said other circumstances, primarily a decrease in membership, also accounted for the shortfall.

Reilly explained that the community association’s bylaws require that a balanced budget be passed every year. To achieve this, the committee investigated cutting CHCA expenses, finding new donors and stepping up fundraising efforts. But while helpful, those actions will not be sufficient to balance the budget, according to the committee

“We’re pretty much a membership organization,” Reilly said. “That’s our revenue.”

He added that the community association would need to bring in 767 new members this year to balance its budget.

Without enough additional revenue, the Budget and Finance committee considered how it defines the term “balanced budget” and whether that definition could be expanded to allow other monies to be considered revenue.

“Fundraising comes first,” Reilly said, but added that it was a mistake to see the Local as a separate entity. “We are the publisher, we are the same organization.”

Board member Richard Snowden warned that a single balanced budget wasn’t enough. He said that if the community association doesn’t establish its financial sustainability, other sources of revenue – like new members, new donors, and participants in fundraising activities – will dry up.

“We have an incentive to fund raise,” he said, “and there is not enough of a credibility trend line to foster new donors.”

Board member and former board president Walter Sullivan said there was no doubt the CHCA could take revenue from the Local, but asked whether “that was the prudent way to go.”

“We’re not taking the money,” said Nick Yzzi. “We’re only going to use it.”

He added that the CHCA is the parent organization, and the Local is the subsidiary, and that it was within the rights of the community association to do this.

Board member Miguel Casteñeda agreed, saying that the budget Reilly presented was responsible.

Board member Jean Wedgewood praised Reilly for his hard work and told the board that he and committee had “explored all possibilities.”

“This is a Band-Aid for one year,” she said. “We own the Local – we’re not talking about taking any money from the Local – and we hope to pay it back.”

A minority of board members had deeper reservations about using Local revenue to close the budget gap.

Board member Stephanie Chomentowski congratulated Reilly and the Budget and Finance Committee on its report, saying it complied with the requirement in the bylaws that the committee produce a balanced budget.

“You guys did exactly what you were supposed to do,” said Chomentowski, “but there is no requirement in the bylaws that the board pass a balanced budget.” Given that, she suggested using a portion of the $80,000 the CHCA has in its own savings to close the gap in lieu of using funds from the Local.

Many balked at that suggestion, including Casteñeda, who said raiding the savings would be irresponsible. Chomentowski’s plan to use the savings was voted down.

Board member Mike Chomentowski also disagreed, saying that taking funds from the Local was irresponsible and “ruthless mismanagement.”

“When the Local was on its knees, we gave them some tough love,” Chomentowski said. He reminded the board that the CHCA did not use any of its own money to help get the Local back on its feet.

Sullivan contested that, saying, “the Local would never have been allowed to fail.” He added that whether or not the gap is closed using Local funds makes no difference, as there are several options at the the committee’s disposal.

Reilly said repeatedly that using funds from the Local was a “one-time thing,” but it didn’t change the minds of those opposed who voted against the budget measure.

  • Tracy

    If the article says that the funds will be used “if” the fundraising efforts fail — why does the headline read: “CHCA to fix deficit by taking funds from the CH Local” and not “CHCA might (may) fix deficit by…” The headline is a fait accompli while the story is a scenario with two possible outcomes…