36 - CAPE GAZETTE, Friday, January 10 - January 16, 1997
BusiNEss & REAL ESTATE
Milton Chamber, Main Street woes could lead to merger
Same day meetings result in groups
airing problems, seeking solutions
By Rosanne Pack
Citing most of the ills that plague non-profit agencies trying to sur-
vive in small towns, the Milton Chamber of Commerce and the Milton
Main Street each face decisions regarding their future existence or lack
there-of
At meetings that coincidentally took place within hours of each other
on Jan. 7, board members of the two organizations heard of and dis-
cussed a litany of problems and potential solutions that must be exam-
ined, whether or not they continue to operate. And, dissolution of both
organizations is a possibility.
The Milton Chamber owes $5,000, and the group has no ready means
of paying those bills. The Main Street organization has approximately
half a dozen people who come out for meetings and projects; that board
will meet next month to determine if they will continue as an organiza-
tion. Members of each organization are dealing with burn-out of enthu-
siasm, poor participation on the part of volunteers and fund raising and
bill paying issues. However, there are members of the Chamber and
Main Street who definitely want their organizations to continue. And,
one solution could be to unite.
Although many Milton residents and business people are active in
both organizations, the two groups have not always acted in extreme
cooperation. There have been some conflicts and dissatisfaction with
the lack of support of one group for the other. But, as they face the pos-
sibility of the town losing two organizations that should be committed to
promoting and revitalizing the town, some individuals are willing to
look at combining efforts, office space and staff
Chamber of Commerce President Frank Gordy said that he would be
contacting representatives of the Main Street group within the week to
discuss a merger. Some members of Main Street said that they are also
willing to consider joining forces. However, each group has serious
decisions to face with their individual boards before an official step can
be made to combine the two.
After more than a year of fre-
quent changes in staff and board
officers, the Chamber finds itself
heavily in debt and short of ideas
of how to raise the necessary mon-
ey.
Newly
hired Cham-
ber staff,
Cheryl
Bossert said
she spent the
first weeks of
her new job
wading
through
records left BOYD-HERON
by the previ-
ous two staff members. She said
that things are falling into place
and becoming easier; however,
what she has learned is that there
are $5,000 in outstanding debts
and approximately the same
amount in uncollected money
owed to the Chamber.
"This is the amount of unpaid
annual dues and money owed on
Milton Clipper ads; and some of
these go back to 1994," Bossert
said. "I plan to start sending out a
new round of bills this week."
One instant money saving move
on the part of the Chamber was the
decision to not publish the Milton
Clipper in January and February,
saving more than $1,000 a month.
Members agreed that the monthly
publication is an excellent promo-
tional and informational tool,
however, it would have to be put
on hold until the financial situa-
tion is cleared up.
The confusion of unpaid bills
and records not kept up to date
began to surface in December
when an accountant's report on
the Chamber's books showed poor
record keeping.
As recorded in minutes of a
Dec. 12 meeting, Tom Sombar
said that there was no improper
conduct, however, the organiza-
tion should insist on a monthly
financial report.
At the December meeting, the
Chamber decided to have out-
standing bills read at each month-
ly meeting and to pay bills once a
month.
Included in the accountant's
findings was the fact that a previ-
ous employee, Carol Virnelli, had
written payroll checks to herself
for the amount of her gross pay,
without keeping out the appropri-
ate amount of tax. The employee
expressed the intent to reimburse
the Chamber for the withholding,
but, the Chamber could be respon-
sible for penalties for late pay-
ment.
By the Jan. 7 meeting, Bossert
had deciphered enough of the
I I
back records to know the extent of
debts owed by and to the organi-
zation.
In looking at what the Chamber
faces in reorganizing and getting
out of debt,
Gordy rec-
ommended
considering a
merger with
Milton Main
Street. He
said the two
groups could
both benefit
from sharing GORDY
office space
and staff as
well as combining efforts for pro-
jects.
He said, "We have been strug-
gling this year. We are trying to
find events to raise money. We
have all the tools; but we have to
grow together."
Bossert agreed, and said, "A
small town can only support so
many non-profit groups raising
funds and needing volunteer help.
We are all going to the same
places asking for money."
To encourage attendance and
participation, the chamber board
decided to alternate between after-
noon and evening meetings each
month. The next scheduled meet-
ing is set for Tuesday, Feb. 18, 7
Continued on page 38
Consider new law in year-end tax planning
Recently, Congress passed a
package of tax measures in the
Small Business Job Protection Act
as part of its legislation increasing
the national minimum wage. The
bill included a number of small-
business tax cuts that could help
you cut your tax liability begin-
ning in 1997. Major provisions of
the bill included:
• Increases in how much can be
contributed to some employee
benefit plans.
• Creation of a new kind of
retirement plan.
• An increase in tax deductions
for the purchase of business
equipment.
• Tax credits for hiring welfare
recipients and youth from low-
income families.
• Renewal of some expiring tax
credits.
As we review these new provi-
sions, you may want to jot down
those you think might be appropri-
ate for your business and make it a
point to discuss them with your
financial consultant and tax advis-
er as part of your year-end tax
p/anning.
Employee Benefit Plan Con-
tributions. Several changes under
the law increase how much can be
contributed to employee benefit
plans. Three major provisions are:
• Elective deferrals: Starting in
plan years after Dec. 31, 1997,
elective pretax employee contri-
butions to 401(k) plans and flexi-
ble spending (cafeteria) plans will
count as eligible pay when figur-
ing the "25 percent of pay" limit
on total(k) and other defined com-
tribution plan contributioras.
Under existing law, these conmi-
butions could not counted as eligi-
ble compensation.
• Family aggregations rules:
Currently, the compensation of a
spouse or "family member" of a
company owner and certain highly
compensated employees is consid-
ered part of the owner's or
employee's compensation. This
FINANCIAL FOCUS
rule limits the amount that can be
set aside in retirement plans, since
the amount of compensation that
can be taken into account in deter-
mining contributions of benefits
under qualified retirement plans is
capped at $160,000. Repeal of this
rule at the start of 1997 could
allow family members to con-
tribute more.
• Defined benefit and defined
contribution plan limits: If an indi-
vidual participates in, or has ever
participated in, both a defined
benefit plan and a defined contri-
bution plan offered by a n employ-
er, an overall limit on benefits and
contributions applies. Effective
for limitation years starting after
Dec. 31, 1999, this law is
repealed, allowing the potential
for some participants to increase
their contributions and their even-
tual benefits.
SIMPLE Plans. One provision
of the bill that will interest small
businesses will permit a new type
of retirement plan, one having less
extensive requirements than cur-
rent Salary Reduction Simplified
Empf0yee Pension (SARSEP)
plans and 401(k) savings plans.
Under the new law, which takes
effect Jan. 1, 1997, many employ-
ers with 100 or fewer employees
may find it easier to offer their
employees a retirement savings
plan.
SIMPLE plans are free of cer-
tain complex compliance rules
now required for a plan to qualify
for tax advantages. Small busi-
nesses that meet the new require-
ments will be able to fund a SIM-
PLE plan through IRAs for each
eligible employee of as part of a
401(k) plan.
The law permits SIMPLE plan
participants to contribute up to
$6,000 of their compensation
annually, which can be combined
with a matching employer contri-
bution of up to $6,000, for a maxi-
mum annual contribution of
$12,000. Employers must con-
tribute to employee accounts
under one of two required formu-
las:
• Matching contribution formu-
la: The employer matches
employee elective contributions
dollar-for-dollar up to three per-
cent of the employee's compensa-
tion. A lower percentage of no less
than one percent of each employ-
ee's compensation in up to two of
five years is allowed under a SIM-
PLE plan funded through IRAs,
provided employees are notified.
• Non-elective formula: Alter-
natively, an employer must make
contributions of two percent of
each employee's compensation,
up to $160,000.
SIMPLE contributions general-
ly are tax deductible by the
employer for the year in which
they are made. Regardless of
employee participation and saving
levels, a business owner can con-
tribute up to $12,000 a year to his
or her own account.
SARSEP Plans. Until Dec. 31,
1996, you could have set up a
SARSEP retirement plan gov-
erned by law in effect before the
new tax bill. The bill grandfathers
SARSEPs in existence before the
end of 1996. SEP plans without a
salary deferral feature will contin-
ue to be available. If you already
have a SEP plan without a deferral
feature, you may want to consider
adding the SARSEP feature.
Equipment Purchases. Until
now, businesses could expense, or
deduct, up to $17,500 of the cost
of new equipment in the year it is
purchased. The new limit will
gradually rise, starting in the 1997
tax year, to $25,000 in the year
2003 - an increase of $7,500.
Whether it's best to buy or lease
new equipment still depends on a
number of factors, including the
expected life of the equipment.
You should consider the factors
Continued on page 40
Daniel D. Tidwell
