City Council approves budget without funding Tennessee Multicultural Chamber of Commerce

In a 7-2 vote, Chattanooga Council Council members passed a 2012 budget Tuesday that cut funding for the Tennessee Multicultural Chamber of Commerce.

Councilmen Andrae McGary and Russell Gilbert were the two no votes against a budget ordinance that allocated $19 million among more than 40 quasi-governmental and nonprofit service agencies. That allocation did not include an earlier proposed $75,000 expenditure for the multicultural chamber.

Former City Council members Yusuf Hakeem and John Taylor, and businessmen Gerald Mason and Jerry Hanner, implored the council to fund the agency, saying it is still needed to help promote existing minority-owned businesses and provide training for people wanting to become their own boss.

"It's sad that this chamber is more recognized outside of Chattanooga than it is here," Mason, retired owner of Kandy Kastle day care centers, said. "This chamber has given life to many people. I was once on the board, I'm not saying it doesn't have problems. I don't know, I've not had that close communication ... but this organization needs to be continued to be funded."

Council members said they support the concept of the chamber but a report by the city's internal auditor, completed Tuesday, raised questions. According to a review of the chamber's audited financial statements and public IRS reports, the chamber had a deficit of $48,418 and it owned properties listed as a debt of $579,169, that were valued at $211,800.

The report states that a review of a five-year period shows the organization running losses each year, with a long-term debt load that exceeds the book value of all assets. Other discrepancies include the requests to the city for funding in 2010 and 2011 claiming only two employees while the tax forms show four employees.

The report also noted that the chamber received a grant in 2007 from the federal housing agency of $545,000 to help build a $4.4 million business solutions center. The chamber's proposal said it would provide $3.5 million and $300,000 in-kind contributions for the grant. As of June 30, 2009, no funds had been expended on the project, other than HUD money, the report stated.

The properties purchased by the chamber reportedly were for the site of the center. A physical inspection of the sites was made for the report, showing no signs work. The rest of the grant was spent on "planning, administration and project management," the report stated.

City Council members said the findings of the auditor's report must be addressed.

"Until these questions are answered, we cannot fund this," Councilman Jack Benson said. "Bring back a resolution of what you intend to do."

Taylor said he is sure the questions can be answered and he took issue with the report because it did not include input from the chamber's Executive Director Sherrie Gilchrist or other staff members. Gilchrist did not attend Tuesday's meeting.

Councilwoman Deborah Scott said she had asked Gilchrist for financial information months ago and was told the information was pending. She said she received the same answer when she asked for the information a second time. 

Hamilton County has also cut funding for the multicultural chamber.

Commissioner Tim Boyd, a local contractor, said he tried to get the kind of information from the chamber, but no one returned his calls. He said he lost a federal job because it required minority participation and he called Gilchrist for a list of local minority contractors. She never responded, he said.

Commissioners also criticized Gilchrist for submitting a budget request that did not list her salary on it and had pound signs in other areas.

Gilchrist blamed it on the software she was using to create her report.

According to the city report, the chamber tax forms claimed that Gilchrist oversaw four employees with a budget of nearly $350,000. Her pay was listed as $139,670 in 2008, $146,484 in 2009, and $134,490 in 2010.

The council voted down a motion by Councilman Peter Murphy to include an amount of $75,000 in the budget, pending answers to questions from the report. The council approved a motion by McGary that outlines the information the council wants answered and sets a deadline for receiving the information.