Switzer has until June 12 to submit financial reports
BLYTHEWOOD – Town Council’s second workshop for the 2018/19 budget, held Thursday, May 24, quickly jumped the rails from a budget discussion to an intense interrogation of the Greater Blythewood Chamber of Commerce Executive Director Mike Switzer about chamber and visitor center financial inconsistencies reported earlier that morning in The Voice.
The session culminated in Switzer taking cover behind a S.C. Supreme Court ruling issued the day before the meeting in a case brought against the Hilton Head Chamber of Commerce, that strips the media and citizens of their ability to use the S.C. Freedom of Information Act to find out how Chambers of Commerce in the state spend tax-payer money awarded them by governments. With the ruling, only the government who awards the money now has recourse to find out how a chamber spends that money.
Before Council could take its first swing, however, Switzer ducked, pointing out that Council, itself, has approved of how the chamber has conducted its business and spent its money.
“I just want to say thank you to the council for the vote of confidence with the increases that you’ve proposed for the upcoming budget. We appreciate your vote of confidence in the work that we’re doing and we’re looking forward to continuing to grow that work,” Switzer said.
“Despite the very misleading and sometimes often outright false statements that were put out there, we are completely of the upmost integrity at the Chamber, and I think a good testament to that is that the town has had a representative on our board for many years,” Switzer said. He made it clear that the mayor, himself, had served as that representative for a year before Ed Parler, the town’s economic development consultant, took the role.
“He (Parler) attended every single board meeting where our treasurer’s report is given out and all our financials are laid out,” Switzer said. “The $4,500 increase [$2,500 to the chamber and $2,000 to the visitor center] that you have in the budget for us will cover ¾ of our rent increase of $6,000,” Switzer said.
The chamber rents space in a building in McNulty Plaza that Mayor J. Michael Ross and a partner own. According to chamber documents acquired by The Voice, annual rent for the chamber/visitor center space was $600 in 2015/16, increased to $12,000 in 2016/17 and $18,000 in 2017/18. The increase of $6,000 will bring the annual rental fee to $24,000. Ross said that increase goes into effect July 1. While Ross recused himself from voting on $7,000 council awarded the Chamber to renovate the space last year, he has voted on all other allotments to the chamber and visitor center.
“There are some questions being raised…,” Ross said, “and I think that we need a little bit more [information] than what you gave us the last time – a one sheet page. We [the Town] just did our budget proposal and it’s 19 pages long. Whatever your financials are, I think it’s very important for this council to look at real numbers. And I mean salaries.”
Ross said the Town government’s books are open for viewing and that the chamber’s should be also.
“We know how much we’ve spent, how much we’ve got left, what we’re going to do. And I would think y’all are in the same boat. But this council needs to look at that to give you, truly, either a tremendous vote of confidence or have some pointed questions, as does this article, about how your allocations are being made and what salaries are being paid,” Ross said.
While Switzer said the chamber/visitor center has never denied or refused to answer questions, Councilman Eddie Baughman pointed out that the story in The Voice stated that the newspaper had submitted an FOIA request to the chamber on May 4 and had not yet received any of the requested documentation.
“I have 30 days to answer it,” Switzer said.
“If your books are up to date, it shouldn’t take 30 days to answer,” Baughman shot back.
Ross pointed out during Tuesday night’s council meeting that the same financial information had been requested of the chamber and to the Blythewood Historical Society and that the historical society provided their information the next business day.
Switzer blamed the delay on several reasons. He said the chamber’s treasurer had been out of town a lot due to his wife’s illness and was only in the office a limited amount of time. Switzer said for that reason the chamber’s financials will not be available until June 12, when the treasurer returns.
“He’s the one who does all of our billing, does all of our check writing, does everything [financially],” Switzer said. He also said the treasurer had never used a QuickBooks system prior to taking over the chamber’s books less than a year ago.
While documentation in council member’s packets in January showed that the chamber spends $3,650 for accounting services, there was no explanation as to who receives that money.
“Angie, who did the books the previous two years, worked with him [the chamber’s treasurer] from July to October, and then she kind of cut him loose. Almost every month, we find things that have to be fixed and corrected, so I’ve identified a couple more things that we need to be making sure they’re in the right category. So, yeah,” Switzer said, “I can promise you, we’ve been working many hours on this. We have always just lumped breakfast [meeting] expenses together, whether it was the rent for the Manor, the cost of a poster, or the cost for the food, we’ve just put it all under breakfast expenses,” he said. “We didn’t sub-categorize. We have since, between our last board meeting and the one upcoming, over the past couple of weeks, we’ve been working on building QuickBooks so that it itemizes everything out into sub-categories, so every event has rent, advertising, marketing, etc. So it’s not just all dumped into one category. You won’t believe the amount of detail,” Switzer said.
“Well, we look forward to seeing that detail,” Ross said.
But former Councilman Tom Utroska, who spoke during public comment time, pointed out that while council has been quick to appropriate increasing amounts of funds to the chamber, it has done little to hold the chamber accountable for those funds.
“Last year at budget time, a representative from the chamber asked for continuing financial support, plus, he offered to operate the Blythewood Visitor Center if town council would fund it,” Utroska said.
“Reluctantly, council agreed to fund the venture for one year, provided that the Chamber would provide verification [justification] that they were sufficiently increasing Town visitors/tourism,” Utroska said. “Based on council’s concerns at the time, the budget was passed with the oral stipulation that the Chamber would only receive partial funding in July 2017 and would be required to provide documentation of its success in order to receive the balance of the funds in December 2017.
“At the January 2018 council meeting, the chamber made that presentation, which I would describe as a dog and pony show,” Utroska said. “Chamber members stated that they were not able to present factual information to verify the visitor center’s operational success. Evidently, however, that presentation was sufficient to keep it funded [by council] through the end of the current fiscal year,” Utroska said.
“Here we are at the town’s budget process, again, planning to fund the visitor center when, in fact, we have no idea if it is successful or if it is just a financial instrument helping keep the chamber afloat.
“At the January 2018 meeting, I requested that council hold in abeyance future funding for operations of the visitor’s center until such time as the Town has received an audit that verifies that visitor center funds are providing the Town with the intended results and, that their use complies with state law concerning accommodation tax expenditures for tourism,” Utroska said.
“If you don’t question their performance and use of funding,” he said to council members, “you are shirking your fiduciary responsibility.”
The first reading of the 2018/19 budget, which was approved 5-0 Tuesday evening at the regular council meeting, proposes to increase the chamber’s economic development grant from the Town’s general fund from $15,000 to $17,500 and increase the accommodation tax award to the visitor center from $18,500 to $20,500. The mayor also suggested at the May 24 workshop that it might use approximately $10,500 in unspent state accommodations tax revenue to boost the chamber’s allotment to a total of about $48,000 annually.
Ross is giving Switzer an additional three weeks, until June 12, to get its books in order before presenting them for town hall’s inspection. It is not clear, however, whether council is seeking the chamber’s past years of financials or just the budget for 2018.
Council will have second reading of the budget June 25.
Michael Smith contributed to this story.
Related articles: News Analysis: Are chambers laundering government money?, Council considering $56K for Chamber, Visitor’s Center, Chamber financials reflect inconsistencies
