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Money problems force West Linn Chamber to shut down

Interim director has resigned as a host of unpaid bills led to empty coffers

The West Linn Chamber of Commerce has closed its doors, and its interim director has resigned due to a lack of funds stemming from almost $25,000 in unpaid bills stretching as far back as June 2007.

Interim director Patti Galle, who took over for Mary Closson who resigned to take a similar position at the Hood River Chamber of Commerce, said she inherited an organization that had been thrown into disarray thanks to shoddy bookkeeping practices and financial mismanagement. She decided to reconstruct the entire past fiscal year, which uncovered a host of unpaid bills, including water, phone, Internet, federal taxes and invoices from a host of vendors from various chamber events. Galle also said the chamber had incurred more than $1,600 in bank and late fees over the past year and its $10,000 line of credit had been maxed out.

Adding to the financial woes was an overstatement of the chamber's membership. Galle said, and Board of Directors President Mark Hanson confirmed, that the actual paid membership was 211 businesses, rather than the 338 members that Closson reported.

'The spending of the chamber was greater than the income of the chamber,' Galle said. 'It wasn't until someone took a close look at the books that it came to light that this was happening. The board was getting regular reports that everything was fine.'

But reality was far from the rosy picture painted by Closson and former board president Mark Buser, who both pointed to high membership totals as proof of the chamber's success.

Closson could not be reached for comment after calls to her office in Hood River were not returned. Buser, whose term expired at the beginning of the year and is now seeking election to the West Linn City Council, said in an e-mail sent to the Tidings that he was disappointed in the events surrounding the chamber's closure but could not place blame on one person.

'At a special board meeting, (Galle) laid out the true financial picture of the chamber, and it showed the organization with over 100 unpaid members, significant bills left unpaid, bank penalties, depleted accounts and a fully drawn line of credit,' Buser said. 'It is unfortunate that in this type of situation, people want to shoot the proverbial messenger. Although (Galle) was well liked and supported by many members of the board, she couldn't get the needed support of its leadership. It became obvious to her that once all the debt was cleared, the chamber was in serious needed of downsizing.'

The turmoil started when Closson resigned at the beginning of the year. That came on the heels of Buser announcing in the summer last year that he would not seek another term as board president. Bookkeeper Julie Stoltz was also let go.

Galle was hired on an interim basis in February. She brought on Tina Decker, a West Linn business consultant, to run the West Linn Farmers and Artists Market. But Decker resigned several weeks later when she realized there was no seed money to begin organizing the event that takes place during the summer months in the Willamette District. Management of the farmer's market has since been turned over to a group of Willamette merchants.

'The bookkeeping records were difficult to decipher based on the fact that reports that were prepared did not match the banking records,' Galle said. 'It took an inordinate amount of energy to re-create 2007 and match invoices to bank transactions. In doing so, it was discovered that there wasn't enough income to cover expenses. … It became my goal to see that every creditor was being paid.'

Some of the largest unpaid bills, according to records provided by Galle, included $3,099 to the Oregon Golf Club, where the chamber's monthly luncheons and the annual golf tournament are held; $666 to the IRS; $996 for advertising with Community Newspapers (which owns the Tidings); and $6,000 for farmers market costs.

'It didn't just happen. It wasn't an overnight failure,' Buser said. '... We took risks to grow it, like any business. The problem with the chamber of commerce is that we're like any non-profit. And the most difficult things in a non-profit is the development of funds.'

Buser points to a lot of successes with the chamber in the six years of his tenure. And said the current problems stem simply from not generating enough cash flow.

'I don't think there was any illegal activity,' Buser said. 'I don't want to comment on that. That's the board's decision about whether they think there needs to be some sort of inquiry.'

This alleged financial mismanagement throws into question the future of the chamber and its membership. Galle believes it is unlikely it will open in the same capacity.

'Save money for a year, regroup and become what the chamber should be, which is a small-town chamber serving small business,' Galle said. 'We're not Portland. We're West Linn. The chamber got ahead of itself. We need a more down-to-earth approach with our members.'

The West Linn Chamber of Commerce is a non-profit organization meant to promote local business. Its income comes from membership dues and events such as the annual banquet, farmers market, golf tournament and luncheons.

The chamber executive committee was scheduled to meet Wednesday (after the Tidings press time). And a board meeting is scheduled for next Tuesday to discuss the chamber's future.

'We just needed to restructure a little bit and figure out where we can go from here and what size of chamber we can have,' Hanson said. 'After Mary Closson left we needed to recreate our books. We were just trying to pay debts as they came up and take care of things from the past. … As money came in we were just paying things off. It puts you in a place where we run out of money until your next event.'

Hanson disagreed with the assessment that funds were mismanaged and said the chamber's current situation was created due to the fact that it was trying to grow too fast.

'The thing that we need to address is what's a good size and what is the purpose for the West Linn chamber,' he said. 'It's not to be 700 members. And I don't know that growing in numbers is feasible for West Linn, and I don't know that that is West Linn. Some people don't like the word smaller. We want what we were used to. What it was really, I think we were sort of acting like we could drive the Cadillac when we really only could afford the Ford Pinto.'

Hanson said there are volunteers answering chamber e-mails and opening the office on 6148 Elliot St. for limited hours.

Other chamber board members said their concern was a matter of being told everything was fine and then suddenly having that scenario reversed.

'We believe that this is the people's money and they have a right to know what's going on,' board member Candice Mangner said. 'We had an amazing interim director who came in and did everything she could. … Apparently things were a lot different than we thought. I'm a firm believer in you have to do what's right for other people in West Linn.'

Said Galle: 'This was not one person's blame,' Galle said. 'It was the responsibility of everyone involved with the chamber. … It would be a mistake to blame one person. But I don't know if the chamber can recover. They are faced with extremely serious problems. And they must address the problems with their members.'