Facing a financial shortfall made worse by an expensive multi-year lease agreement on its former offices on Tourney Road, the Santa Clarita Valley Chamber of Commerce is in the midst of a restructuring, though details have yet to be decided, according to the chamber’s board chairman.
In its most recent Form 990 annual financial filing with the Internal Revenue Service, for 2015, the chamber reported total revenues of $613,707 and total expenses of $633,129, a net loss of $19,422. That loss deepened the organization’s total year-end deficit to more than $36,000. The 94-year-old organization represents about 1,000 members.
“When I took over as chairman, I knew we were facing challenges, but the year has proved to be more challenging than anticipated,” John Musella said. “The good news is we’re up for the challenge and making progress as we work our way through this reorganization process.”
To cut expenses, the chamber last December moved out of its offices on Tourney Road, and reached agreement with the city for one year on rent-free space at City Hall. The chamber contributes to utility costs.
“Unfortunately, we have a financially unsustainable lease agreement for a huge office on Tourney Road,” Musella said Tuesday. “We turned that space back over to the landlord earlier this year, but are still working for a final settlement. How that plays out will be part of our financial plans moving forward.”
The chamber’s occupancy expenses, as reported in its IRS filings, rose from $61,533 in 2010, an average of $5,127 a month, to $126,722 in 2015, an average of $10,560 a month.
In March, the chamber eliminated the position of president and CEO, held since September 2016 by Lois Bauccio. She succeeded interim president Jim Bizzelle, who served for three months. Bizzelle took over from Terri Crain, who resigned in April 2016 after five years.
Musella declined to say if the reorganization might include a bankruptcy filing (technically, a dissolution under California nonprofit law). “The Chamber is working through the details of a reorganization plan and what that will look like,” he said. “We’re taking our time to do this right.”
Musella said the chamber will seek input from its members and the wider community “to ensure a reorganized chamber will best meet the needs of our diverse membership. This chamber belongs to the business community and they need to be part of our reorganization.”
Tuesday, the chamber issued a statement saying that an internal review found “no financial discrepancies” related to the February 2015 merger of the SCV Latino Chamber of Commerce into the SCV chamber.
“According to the Memorandum of Understanding between the two organizations, upon completion of the merger, it became the responsibility of the SCV Chamber to file the Latino Chamber’s final 2015 tax forms,” the statement said. “We have the records of the Latino Chamber financials being transmitted to the SCV Chamber staff, but no record of the 2015 Form 990.”
The SCV chamber is “in the process of making that filing,” the statement said.
Musella said the chamber is working to increase revenue and continue to streamline office procedures to cut expenses. “We are creating an environment for a properly sized staff,” he said, though there is no timetable yet for hiring a new CEO.
The chamber will move its annual golf tournament from spring to Oct. 23 to boost revenue and will revamp its member directory from a phonebook-style listing into an ad-supported business and community guide that will highlight business clusters.
Musella said he will not serve a second year as board chairman. “I’ve spoken to a couple people about taking over the reins in 2018, but no final decision has yet been made.”