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Source of Funding Can Set Course of Chambers

September 07, 1986|JULIO MORAN | Times Staff Writer

Are chambers of commerce business organizations, civic groups or extensions of City Hall?

That depends, chamber officials in the South Bay say, on the chamber's major source of income.

If a chamber can operate with little or no city subsidy, it can focus its activities on business-related events such as seminars and legislative lobbying, chamber officials say. If a chamber gets a quarter to a half of its budget from city government, it may be required to spread itself among business activities, such as seminars, and promotional events, such as parades and beauty contests.

And if a chamber receives more than half of its income from the city, as do most chambers in small towns without a major company, there is a danger of becoming an extension of City Hall and being at the mercy of the City Council.

The Lawndale Chamber of Commerce, which receives $58,600 of its total $88,600 budget from the city, is clearly at the mercy of its City Council.

The council voted 3 to 2 on Aug. 18 to cut off its subsidy for the Lawndale chamber. Since then, chamber members have implored the council to reconsider its vote, saying that without the city funds, the chamber will be forced to close.

A Cruel Cut

"If you cut off the funds, you cut off the legs of commerce for this city," Lawndale resident Mark Sinaguglia told the council last week.

The City Council and officers of the chamber will meet on Sept. 15 before the council meeting to discuss restoring the funding. The council, meanwhile, agreed to provide the chamber with $15,000 for the annual Miss Lawndale Pageant, scheduled for late October.

The Lawndale chamber's problems began in April when it held an election for three vacancies on its board of directors. Chamber members said the organization's leadership is changing from older, longtime business people to younger members. A member of the old guard, Peter Paley, owner of an auto repair shop who served as president of the chamber for 1982-83, was a candidate but did not place among the top three.

Those election results, however, were invalidated after the chamber's nomination committee discovered that it should have elected four new members because another director's term was ending, chamber director Gary Bosley said.

Discovered Bylaw

Before the second election, members of the nominating committee also discovered that a chamber bylaw requires board members to sit out a year before running for a new three-year term. A board majority said Paley, who had been on the board since 1982, should not have been allowed to run in the first election. He was not allowed to run in the second, which was held in July.

Paley complained that the provision did not apply to him because he originally had been appointed to fill a vacancy, and thus was not running for "reelection."

When the chamber's board refused to allow Paley to be a candidate in the second election, Paley threatened legal action.

He argued that the chamber's new leadership is not concerned with the best interests of Lawndale, and that he is fighting to retain the integrity of the chamber.

"Me being on the board is not that important," he said. "But (what is important) is that they should follow the rules, not just for myself, but for all business people in the community."

Paley said he has not decided whether to pursue legal action.

The strain between the old guard and the new leadership grew even more pronounced when the newly elected board decided not to allow Roy Allan, a longtime member who had been president-elect, to become president. Board members instead elected Frank Anderson president of the chamber. Board member Mike Lowry told the council that Allan was not chosen because he had sided with Paley and the board majority felt he would disrupt the organization.

Named Treasurer

Allan, who was instead named treasurer, was on vacation last week and could not be reached for comment. However, at last week's council meeting, Councilman Harold Hofmann, a friend of Allan, said he had received a call from Allan complaining that he had been denied the presidency as he was preparing for his installation.

"He was voted out of office before he was even allowed to serve," Hofmann said.

Councilmen Hofmann, Dan McKenzie and Larry Rudolph voted to cut off the chamber's funding when the chamber's annual contract came up for renewal. The council had originally held up approval of the contract for 30 days to allow the chamber to resolve its problems. But when the contract came back for what had been expected to be routine approval, the funds were cut off.

The three councilmen deny that their vote was to protect friends, as some chamber members have charged. The reasoning behind their vote, the councilmen said, was that the city should provide its own publicity and organize its own activities rather than pay the chamber to do so.

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