by Kevin Dicciani
To implement its approved nonprofit 501(c)(3) status, the Chestnut Hill Community Association is in the midst of finalizing bylaw changes that would legally separate it from the Chestnut Hill Local, which – for the Board of Directors – is both an opportunity and a challenge, as they would like to retain some degree of control over the newspaper and its future.
At the Jan. 22 CHCA meeting, Bob Rossman, board treasurer and head of the Bylaws Committee with Julie Byrne, presented a proposal that detailed the changes to be made to the bylaws. The process has been an effort to split the two organizations into two separate, distinct entities, Rossman said.
Currently, the CHCA is a part of a Delaware nonprofit corporation along with the Chestnut Hill Local. Because the Local is essentially a business enterprise and doesn’t qualify as a 501(c)(3), the CHCA is not exempt from some federal income taxes and is not able to receive tax-deductible donations from individuals and organizations.
Another corporation, a Pennsylvania corporation, was thus created by the CHCA to become a 501(c)(3). If its members vote for the change to a 501(c)(3) in April, the CHCA will move to the Pennsylvania corporation (CHCA-PA), which currently is just a shell, and the Local will continue under its usual operations in the nonprofit Delaware corporation (CHCA-DE).
John Falco, a Hill resident and attorney with the firm Pepper Hamilton, provided guidance for the CHCA as it worked towards 501(c)(3) status. One of the first changes that would have to be made, he said, would be to create a new board, since the CHCA and Local cannot share the same board or members, although there can be some overlap.
In the bylaw changes proposed by Rossman, the Local is to have between five and nine directors, and a maximum of a third may be CHCA-PA directors, who would serve without compensation. They would have a three year term with a term limit of three consecutive terms. Directors are added by a simple majority vote from the CHCA-PA, and a removal requires two-thirds a vote.
Rossman said the Local’s board of directors would be the “governing body of the corporation and determine all policy.” The board is entrusted to “manage and conduct the affairs of the corporation” and determines “the number, duties, powers, and compensation of the corporation’s employees.”
According to Rossman, the Local board’s officers – one president, vice president, treasurer and secretary –do not need to be Local directors, but they must be members, but not officers, of the CHCA-PA. They may serve three consecutive one-year terms, for which they will not be compensated, with a break of a year.
“We wanted to keep things as much the same as we could while at the same time having sufficient separation,” Rossman said.
Rossman said the CHCA wanted to have some level of oversight into the Local’s operations. To do this, the sole member and parent corporation of the CHCA-DE is the CHCA-PA. Although the Local would have to have its own board of directors and officers, Rossman said that with the CHCA-PA as the sole member, it still technically falls under their control.
Rossman said the CHCA wants the Local’s board to be able to “actually manage the Local” and not carry on as just a figurehead that reports back to the CHCA-PA.
“We want them to be an effective board,” Rossman said.
The biggest question at the meeting involved the financial governance of the Local. Rossman said the Local’s treasurer would be in charge of preparing a balanced budget that is to be reported annually to the CHCA-PA. As the sole member of the CHCA, the proposals being made give the CHCA-PA final approval over the budget. Rossman said the CHCA wouldn’t meddle in the Local’s daily, or even monthly, affairs, so as to not jeopardize the 501(c)(3) status.
But, without having the ability to oversee the Local’s finances on a regular basis, board member Larry McEwen asked how the CHCA-PA could responsibly and effectively oversee its livelihood.
“If we only see this budget once a year, how are we going to have the ability to really judge how it’s operating?” he said.
Board member Sam Earle expressed similar concern, saying that the CHCA must have “checks and balances” in regards to the Local’s budget so that it does not “go off the rails.”
“The Local is an asset we own,” Earle said. “Frankly, it’s our one and only asset. Finances are really the heart of the operation, and maintaining an even minimal annual approval of them helps us keep our asset in check.”
Board member George Coates said that the Local’s board will meet for two hours at a time, four times a year, and that “eight hours a year is not oversight of a million dollar revenue business.” He then said that “it would be wise, at this juncture, to keep that budgetary approval.”
Board president William Detweiler finished the discussion by saying that the entire process of changing over to a 501(c)(3) has been a “major undertaking” and that there is much to be done before the board votes in February to determine the finalized set of bylaws.
Elected to this years Nominating Committee are Elizabeth Bales, George Coates, Sam Earle and Jean Wegdwood.
The Nominating Committee is in charge of nominating candidates for: the officers of the board, institutional directors, and at-large members of the Executive Committee.
The committee consists of the immediate past president, Brien Tilley, and four other members of the board of directors, who may not be serving as an officer of the association. Their terms last for one year or until the board elects their successors.