The Ravenswood Chamber: Plagued By Financial Mismanagement

By Mike Fourcher | Wednesday, December 29, 2010

Editor’s Note: Center Square Journal continues its coverage of the dissolution of the Ravenswood Chamber of Commerce This article reviews the Chamber’s tangle of financial problems. Read our other article for a review of changes and confusion in the Chamber and its Board of Directors.

The Ravenswood Chamber of Commerce shares office space with the Ravenswood Community Council at 1756 W. Wilson Ave. Credit: Mike Fourcher

The Ravenswood Chamber of Commerce is likely to dissolve by February 2011, succumbing to the weight of sizeable debt likely caused by a history of poor record-keeping.

“We didn’t have a treasurer, there were no financial reports, no Quick Books,” said Seth Boustead, former president of the Ravenswood Chamber of Commerce Board of Directors.

“(Chamber Executive Director) Tom [Kamykowski] didn’t have a computer. As far as I know, there were no books.”

Tax Liens

According to the Illinois Secretary of State, the Ravenswood Chamber of Commerce has been slapped with three federal tax liens since 2007. The first lien, levied in December 2007, was released by March 2008.

But this year two more liens were filed, one in January and one in May. The Internal Revenue Service does not comment on the size of the liens or what they were for, but former Chamber board members say the two active liens are for non-payment of payroll taxes and are for about $30,000.

“The lien itself isn’t necessarily a huge legal problem,” said attorney Bill Broderick, who has extensive experience with business law, but is not involved in the situation.

“If they want to do any business with another company, it’s usually a hurdle, requiring cash, C.O.D. (Cash On Delivery) terms for the company,” he said. “That’s usually the most pragmatic problem.”

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For reasons that are still unclear, the Chamber’s board failed to address either federal lien until after Chamber Executive Director Kamykowski was removed by the Board of Directors in August 2010.

“Originally they [the IRS] weren’t even open to payment,” said Patricia Martinelli, the current executive director of the Chamber. But, as the board addressed the debts in August, things got better.

“We had worked out an agreement with the IRS, we started making payments in September for the back taxes,” said Martinelli.

The Chamber also failed to pay state payroll taxes, and in November the Chamber received notice of a third tax lien, this one from the Illinois Department of Revenue.

By the beginning of December 2010, the Chamber’s tax debt was almost $40,000, Martinelli said.

Delegate Agency Funding

The Ravenswood Chamber’s disarray jeopardizes its Delegate Agency contract with the city’s Department of Community Development, a contract that has been worth an average of $69,000 a year over the past four years. For the Ravenswood Chamber, as with most chambers of commerce in Chicago, a delegate agency contract is essential to survival.

In March 2010 the Ravenswood Chamber was awarded a one-year, $61,080 contract for “supportive services for commercial area development.” This contract is attached at the bottom of this article.

However, payments to the Chamber stopped in July. When asked about the status of the Chamber’s contract, Community Development spokesperson Susan Massel had little to say.

“At this point they are still a delegate agency,” says Massel. “The deadline [for application for 2011 funds] was in May, and they made that deadline.”

Delegate Agency funds come directly from the city’s General Fund, which means that if the Ravenswood Chamber loses funding, it is unlikely a new chamber organization will be able to get the theoretical $61,000.

In October it was announced that the city plans to cut delegate agency funding in 2011, so every program in the city will be competing for funds in the tight budget.

The Banner Program

When the new board members came in 2009, the first new idea they attempted was a street light banner program. Then-board member Patricia Martinelli was recruited to head up sales.

“I would give the banner receipts to Tom. In three months I raised $10,000,” said Martinelli.

Area businesses were excited about the banner program. Banners were $300 each. But months went by, and not all the banners went up.

“I gave them money, they haven’t put my banners up,” said City Provisions owner Cleetus Freidman. “I keep asking, and they keep saying it’s coming, so I’m not happy with them. $300 is a lot of money to a small business.”

Martinelli said when the time came to pay for the banners, Kamykowski told her there was not enough money for all the banners.

“All I know is that when I asked [Kamykowski] for the money to put up the banners it wasn’t there,” said Martinelli.

Kamykowski has not responded to requests for comment for this article.

Some of the signs did get put up. “South Water Signs put up the banners,” but not all of them, said Martinelli. “So where did the money go? It didn’t go to the banner people.”

A spokesperson from South Water Signs confirmed that some signs were put up for the Ravenswood Chamber, but not $10,000 worth.

Eviction Notices

In May, soon after the board learned about the year’s second tax lien, Kamykowski told the board that he had begun receiving eviction notices from the Chamber’s landlord and that the office’s gas service had been turned off. According to Martinelli, Kamykowski blamed the Chamber’s office-mate, the Ravenswood Community Council, for not paying their share of the rent and utilities.

“Tom was telling the board that the Ravenswood Community Council was short on their rent and not coming up with their share,” said Martinelli. “We went through meeting after meeting, ‘If they’re not paying it, we’ll have to buck up. We should move.’ Finally the director of the Ravenswood Community Council showed me documentation that they had been paying rent.”

Ravenswood Community Council Executive Director Chris Shickles confirmed the conversation with Martinelli.

“We had paid the Chamber. They were on the lease and they paid the landlord,” he said. “We’d moved in last year because we couldn’t afford the rent [on our own].”

Shickles is not planning to share office space again, and the organization is signing a lease with the landlord for the same space.

It is not clear if the Chamber is paid up on rent. It may not matter, though, since the building was acquired by a new landlord in the fall.

Parting Shots

On August 6, frustrated with the mounting and unexplained debts, the Chamber’s Board of Directors voted to remove Kamykowski as executive director. By this time many of the board members had resigned, including president David Ochab. Seth Boustead took over as board president, but then stepped down in December.

A few days after his dismissal, Kamykowski presented former board president Ochab with a letter of separation he authored. The letter claims that Kamykowski left his position because the Chamber was no longer able to pay his salary. Attached to the letter was an invoice for $11,000 in back pay.

Kamykowski has not responded to requests for comment for this article.

Soon after presenting his letter of seperation, Kamykowski filed for unemployment insurance. And, according to Martinelli, because she and the board were not regularly checking their mail, they missed the notices from the Illinois Department of Employment Security, as well as the opportunity to contest Kamykowski’s claim.

“We missed the 30-day window,” said Martinelli. The Chamber now has to pay Kamykowski’s unemployment insurance claim.

Finally, three weeks ago the Chamber received a notice from the Illinois Department of Labor that Kamykowski was filing a wage claim for that $11,000. The Chamber doesn’t have enough money to hire an attorney to fight the claim and at some point, the board’s liability insurance was allowed to lapse, possibly exposing individual board members to Kamykowski’s wage claim.

At this point, with the tax liens, the wage claim and Kamykowski’s unemployment insurance costs, Patricia Martinelli estimates the Chamber is in over $50,000 of debt.

Since the city stopped paying out on the Delegate Agency contract in July and the Chamber has no other revenue sources, there are no funds to hire an attorney to defend the Chamber.

Closing Down

Now, Martinelli and former board president Boustead are trying to figure out how to close down the organization.

“The decision was made to dissolve the organization, probably in February,” said Boustead. “There’s a couple vouchers out and then we’re going to close down.”

Boustead, who heads a non-profit of his own, is still stunned at what has become of the Ravenswood Chamber.

“I’ve never seen anything like it. Just really bad decision making,” he said. “After all my experiences I just want to crawl under a rock and get away from it.”

Despite everything she’s been through, Martinelli is still optimistic that something good can come out of the organization.

“We’d like to get together a new board and restart under a new name. The community has been very welcoming, I think, to when I started aggressively pursuing membership and the banner program. There is a real fire in the community.”

But perhaps optimism is a core component of Martinelli’s personality. She has been on a pancreas transplant list for nearly two years.

“There’s not a lot of pancreases out there. It’s a rare organ to match up to, the whole pancreas.”

She’s hopeful that she’ll get one soon. “Maybe the next time you call me I’ll be in surgery.”

Ravenswood Chamber 2010 Delegate Agency Contract

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