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Oldsmar Civic Club's demise becomes a money grab

OLDSMAR — For more than 70 years, the Oldsmar Civic Club held bingo games to raise money for children and others in need.

When the nonprofit disbanded two weeks ago, the remaining 10 members had to decide what to do with the more than $225,000 left in its coffers.

So they gave it to themselves.

Each member received a $24,000 check. One couple received $48,000.

"I think that's horrible," said Mayor Jim Ronecker. "That, in essence, is stealing taxpayer's money."

It may also pique the interest of the Internal Revenue Service.

At least one tax expert says what members did was improper because it violates tax laws governing nonprofits. Another wouldn't go that far, but he says the members have a tax problem on their hands.

The money came from a settlement three years ago when the city took over its property to build a library at 400 St. Petersburg Drive E.

It's unclear when the club obtained the property or who paid for it. At least one existing member said the land was a gift.

Former Oldsmar Mayor Jerry Beverland, who has written a book about the city history, also said he thinks the land was donated to the club, which was founded in 1937 by city pioneers.

In the early 1990s, he said, the club started to experience financial problems and was having trouble maintaining its building.

"I got the Civic Club to agree to give the city its land except for the parking lot and the building," Beverland said.

In return for the 3 1/2 acres, the city would pay $75,000 to renovate the club's building.

As part of that 1994 agreement, the city agreed to maintain the site until it took ownership in 2019. It was stipulated that club members were permitted to meet in the building until that time.

But in 2003, the city decided the property would be an ideal place to build the library. It filed an eminent domain lawsuit in 2004 to force the club to hand over the clubhouse and parking lot. The mediation that followed resulted in the $225,000 settlement in 2005 and left the club homeless.

"We would meet at restaurants or the Woman's Club," said member Judy Kovalchick. "Members died off. It was dysfunctional."

She said most of the members were elderly.

So they decided to dissolve the club, which had about 30 members in its heyday.

Member Jim Campoli said the decision to pocket the money was not made lightly.

Over the course of two meetings, the club talked about keeping the money or giving it to charity. He said the club did not consult a lawyer.

Darryll Jones, a professor of tax law at Stetson University College of Law, called the club's action entirely improper.

"It's not necessarily illegal in a criminal sense," he said. "It's in violation of the requirements necessary for tax-exempt status."

He said the club will likely be subjected to a severe tax penalty.

William R. Lane Jr. of the law firm of Holland & Knight, said it seems pretty obvious the members have a tax issue.

"For tax purposes, they may have stepped out their door and stepped on a rake," said Lane, who practices in the areas of trusts and estates, tax exempt organizations and family business succession planning.

If they don't return the money, they could be subject to a 200 percent penalty, Jones and Lane said.

Campoli, whose wife also belongs to the club, said he put their $48,000 in a CD.

"Why wasn't it right?" he asked. "Civic Club members bought the land, put up a building, ran a bingo to raise money they dispensed to various charities."

One of the good deeds was a $4,000 college scholarship the club awarded last year, member Jean Jorgenson said. The Oldsmar Fire Department also received money from bingo proceeds.

To those who don't agree with the club's decision, Campoli said "I can understand their premise," but it's the club's money.

He said his mother, Ella Campoli, who died three years ago, helped build up the club.

Beverland said he doubts Ella Campoli would be proud of the club's recent action. She "would be dumbfounded," he said, and "come back and club them.

"With all the good they've done … and they take money and keep it for themselves. It's terrible. I'm astounded," he said.

Beverland said the club's bylaws state that if the organization dissolved, all proceeds must go to charity or a government entity.

Jorgenson, who received a check, disagreed with the decision but ultimately went along.

"I told them that the money should be donated to the people of Oldsmar," she said. "They didn't listen to me."

Jorgenson was issued her check Sept. 22 and still hasn't cashed it.

"It's beginning to bother me that I've got it," she said.

Times researchers Carolyn Edds and Mary Mellstrom contributed to this report. Eileen Schulte can be reached at schulte@sptimes.com or (727) 445-4153.

Oldsmar Civic Club's demise becomes a money grab 10/09/08 [Last modified: Monday, October 13, 2008 11:13am]
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