Saturday, July 7, 2018
[Tuolumne County] Calls mount for Economic Development Authority to change its ways
There are growing calls for elected officials to rein in the Tuolumne County Economic Development Authority following the release of a grand jury report on Friday that was critical of the organization’s policies and practices.
Some people spoke at public meetings on Monday and Tuesday to express their dissatisfaction with the past oversight of TCEDA based on information presented in the report, while officials who agreed to speak on record defended its performance over the years.
“I’m recommending the TCEDA’s work is suspended until there’s an audit of expenditures, until there’s an investigation of the use of funds that could be called misappropriation, and that actual operating procedures are confirmed and an audit is done regularly,” said Sonora resident Barbara Dresslar to the Sonora City Council at a meeting on Monday.
Dresslar said she was concerned about findings in the report that indicated Larry Cope, executive director of the TCEDA, wasn’t required to provide documentation of his work, was allowed to approve his own travel and expenses, and accrued 720 hours of vacation time for which he received a lump-sum payment.
She also expressed concerns about the report’s suggestion that the authority could be violating the Brown Act, a California law guaranteeing access to public meetings, by having interactions with and providing assistance to private companies behind closed doors without discussing them publicly.
“I feel that (Councilwoman) Connie Williams and (former Councilman) George Segarini, because they were on the TCEDA board, should have had some understanding how things were being managed,” Dresslar said.
Williams has served on the TCEDA’s board since the summer of 2016, while Segarini started serving on it the year before that.
The development authority was established as a joint-powers authority in 2009 between the county and City of Sonora. The board is comprised of two sitting members of the council, two sitting county supervisors, and three at-large members.
The authority’s board consists of Williams, District 4 Supervisor John Gray, who has served as chairman since 2015, District 1 Supervisor Sherri Brennan, Dave Thoeny, executive director of Mother Lode Job Training, Barry Hillman, executive director of HealthLitNow, and Sonora attorney Jim Gianelli.
Previous board members have included former mayors Hank Russell and Bill Canning, District 3 Supervisor Evan Royce, and former at-large member Patricia Jones.
Segarini retired from the council on Monday, so it will be up to newly appointed Mayor Jim Garaventa to appoint his replacement.
Williams was reluctant to discuss the jury’s report in much detail on Tuesday because TCEDA will be required to develop responses to its recommendations within 90 days, though she defended herself by saying that she asked many questions about the organization over the past two years.
Minutes from a TCEDA board meeting held on Feb. 2 listed Williams as the only board member who asked for a clarification about expenses the organization’s since-approved $460,000 budget for the fiscal year that began on July 1.
Almost all of the authority’s annual budget is funded 77 percent by the county and 23 percent by the city.
The minutes from the February meeting stated that Williams asked for Cope to clarify the difference between $1,434 set aside in the budget under “expendable equipment” and an additional $2,400 for his monthly technology allowance.
Cope responded that expendable equipment includes things such as “network maintenance, hard drives, Wi-Fi systems, modems, small office equipment, and etc…” while his technology allowance goes into his salary and reimburses for his cell phone usage for business purposes.
Minutes from a TCEDA board meeting on May 11 stated Williams suggested that the board should talk about cutting the authority’s budget in light of cuts made by both the city and county due to financial constraints.
The minutes stated the board unanimously decided to “move forward with approving the presented budget with a request for the CEO (to) bring back budget cutting ideas, if any are possible, to the next regular board meeting.”
“There are seven people on the EDA board, and you need at least four votes to do anything,” Williams said in response to critics of her oversight of the organization.
Garaventa and newly seated Councilwoman Colette Such have said that further examining the issues surrounding the TCEDA was among the things at the top of their priority list.
Sonora resident Ken Perkins has filed a lawsuit in Tuolumne County Superior Court against TCEDA for withholding information that he believes should be a matter of public record.
TCEDA, through the County Counsel’s Office, has declined to release data he requested that would corroborate Cope’s claims of being involved with more than $393 million in investment projects that have created more than 2,000 at an average wage above $20 an hour.
At a special meeting on June 21, the TCEDA board authorized the County Counsel’s Office to represent the organization and retain the services of the Sacramento-based law firm Best, Best and Krieger to help fight the lawsuit.
Best, Best and Krieger’s hourly rates range from $165 an hour for paralegals to $365 an hour for some of the firm’s top attorneys, according to the County Counsel’s Office.
Laurie Sylwester, who’s running for District 3 supervisor in the Nov. 6 general election, spoke about the issue at Tuesday’s meeting and urged the board to drop the expense of paying for outside legal help.
“Instead of hiring outside counsel, exert the time and effort into making the needed policy repairs … these issues undermine the confidence in governing bodies,” she said.
Sylwester said money allegedly misspent by TCEDA could have been used to help fund arts programs that she believes would also aid in the goal of economic development.
Some of the spending concerns stem from the jury’s findings that Cope spent nearly a month in England, of which he took four days of vacation and was paid for mostly in comp time and remote working, as well as a monthly allowance for meals and alcohol to entertain business clients that the jury determined was spent mostly on TCEDA board members, county supervisors and officials.
The jury’s report specifically stated that Williams didn’t receive any free meals from the allowance.
Anaiah Kirk, who’s running against Sylwester for the District 3 seat, said the biggest surprise in the jury’s report was the finding that Cope was allowed to authorize his own travel and expenses.
“To me, that raises red flags,” he said. “Even if you’re being honest, it leaves the door wide open and doesn’t put you beyond reproach.”
Kirk said he believed there should be further investigation to ensure there’s some oversight in how taxpayer money is being spent on travel and expenses, as well as some kinds of mechanism to keep better track of results.
Ryan Campbell, the challenger of two-term incumbent District 2 Supervisor Randy Hanvelt in the Nov. 6 election, said he was concerned about the jury’s findings because he believes it’s important to have an organization that seeks out new businesses and helps entrepreneurs cut through red tape.
Campbell said he believes any sitting board members who received free meals out of the allowance for entertaining clients should be required to reimburse taxpayers.
“It should not be a private, members-only club for the powerful and well connected to eat lunch on the taxpayers’ dime,” Campbell said. “We need to take a hard look at what we expect out of the TCEDA, we need to be transparent, and we need a full accounting of how the CEO of TCEDA spends his time.”
However, sitting county supervisors who don’t serve on the TCEDA board came to organization’s defense and downplayed the report’s findings.
Hanvelt said all of the complaints he saw in the report were “largely procedural things in how they do business” that could be fixed by the authority’s board.
“There always needs to be checks and balances in the system, but the TCEDA board can deal with that,” he said. “They’ve been put on notice, and I’m sure they’ll do something about it because they’re great people.”
Hanvelt said he’s an ardent defender of Cope despite having never served on the TCEDA board because he credits Cope with playing a major role in helping timber-industry giant Sierra Pacific Industries upgrade its Standard Mill that employs more than 100 people, as well as attracted major chains like Kohl’s, PetSmart, JoAnn Fabrics, Big Lots, and Panda Express to fill empty buildings.
District 5 Supervisor Karl Rodefer, who has also never served on the TCEDA board, said he was “OK with the report” and the organization’s performance over the years.
“I’m happy with the results that come out of TCEDA,” Rodefer said. “I have full faith and confidence in the people on the board. That’s their situation to figure out.”
Rodefer added that he believes TCEDA is important because the county is in dire need of additional revenue and economic development would be a better way to achieve that than raising taxes.
District 3 Supervisor Evan Royce, who served on the TCEDA board until 2017, said he believed those criticizing the authority are against growth and development and don’t understand the value of the services that Cope provides in the same way businesspeople do.
“There needs to be accountability anytime the county is spending money, I understand that, but I think people use those things to discredit, undermine and attack things they don’t like,” he said. “I think the the grand jury is always impartial, but the way they get their information could skew their perspective.”
Cope declined to comment and referred all questions about the report to the TCEDA board, who will ultimately be responsible for crafting the required responses to the findings and recommendations.
The board must submit the responses within 90 days.
Brennan and Gray, who both serve on the TCEDA board, said they were reviewing the report and didn’t have any comment until they submit the formal responses.
July 4, 2018
The Union Democrat
By Alex MacLean