Deciding in the Dark?

Written and posted by Jim Foster, a member and candidate for the Chestnut Hill Community Association Board of Directors, and publisher of the Mt. Airy and Germantown newspapers.

I sent this piece to the CHCA Board Discussion Group, because we need more accurate, current financial information before we talk about hiring a "publisher." It's an attempt to appeal to sanity, and give a larger picture of what the last few years' faulty administration have done to the CHCA and its Trust Fund:

My observations sent to the board follow:

My recent comments through the board discussion group brought the usual personal insults and unfounded accusations, so I decided to reply from an entirely different perspective that possibly might be meaningful to both long term and newer board members. As with most organizations gone awry, it is usually about the money, where it went, and who used it outside of the intended purposes. This situation is no different.

We are being asked to vote tonight on a new budget, but without any clear understanding of our financial condition from our own auditors. Even the 3/31/08 figures we won’t have are a year old. Internally generated statements have been flawed and do not properly present the separated costs of running the CHCA from the Local. We are being asked to approve the concept of hiring another executive to remedy problems that no one fully understands in the first place. Since a full year has past and our auditors told us that they had reservations about the CHCA as a “going concern” last year, I would want to know their position in detail going ahead, and I would want to see some accountant’s interim figures to back up where we have gone during this past year, or wait until a draft of the 3/31/09 figures are ready. We are told they will not be delayed, and should be ready before the 45 day required filing by the IRS. You must know where you are before determining where you are going.

The statement below I sent last night to a board member who accused me of not thinking ahead. Maybe all those who have been told to believe my motives are suspect would reserve judgment until they digest what I state here and ask their own questions:

To a board member businessman:

Let me take one step back and see if I can get through on another channel. Since you are a businessman, maybe you can understand the financial loss to Chestnut Hill this runaway reckless management has cost you.

From about 1998 to the present the reckless and illegal use of trust fund money has seen the loss of principal that now totals near a million dollars. When the IRS and the State allow an entity to get a tax exemption, that now becomes publicly regulated money. On top of that the trust itself requires the trustees to wisely invest the money for the purposes outlined in the trust. The betterment of Chestnut Hill is that purpose.

Now, if that money wasn’t squandered by turning it over to insider “investment counselors,” wasted on enterprises that neither the board or the trustees knew anything about running, friends of developers who used Fund and CHCA cash to enrich themselves, and brokers who helped hide illegal transfers, then that money would still be in the Fund earning interest.

You can do a lot of good for Chestnut Hill with just the interest on a safely invested million dollars. At one point this fund had a nearly two million dollar value. Today it would not likely reach a million with the current real estate market and the massive waste in speculative and unsupervised investments. The Fund was not supposed to be the financial sandbox for a few folks who ran the board. That is the part of the story that has not yet been fully told. If that much public money being mismanaged and covered up does not bother you, then I guess we have a different value structure. It’s a lot like those TV promotions for Las Vegas - - what happens in Chestnut Hill stays in Chestnut Hill. That might be OK for your money, but not the public money and the contributed money that members and contributors think is doing civic good.

Jim Foster