Cleanup continues in wake of district collapse

More than a decade has passed since the last financial audit of the Central Sierra Economic Development District and the district’s new staff had to scramble to file years-old reports overdue to the U.S. Economic Development Administration, officials reported Thursday during a district board meeting.

“They probably should have done a fiscal audit in the last few years, but they have not,” said CSEDD and Tuolumne County Economic Development Authority Executive Director Larry Cope.

The TCEDA is in a one-year agreement, due to expire in June, to complete certain reports left unfinished when the four-person staff of the five-county economic partnership was laid off in June 2011 because the agency went broke.

The staff and board also jointly administered the Central Sierra Planning Council, which handled federally subsidized Section 8 housing for low-income area residents in Tuolumne, Calaveras, Alpine, Mariposa and Amador counties and incorporated cities within. The CSPC has gone defunct with an estimated $1.6 million in unfunded pension liabilities remaining to be addressed before it officially dissolves.

Board members contracted with TCEDA to keep the CSEDD alive in the hope of securing grants through the U.S. Economic Development Agency. Cope and his staff completed a required annual comprehensive economic development strategy report in November. They are working to compile a more detailed report that can be the basis for five years’ worth of desired projects for funding by the time the contract expires in June.

Board members seemed to be taken aback somewhat at the lapse in auditing. Cope said not to be surprised if the U.S. EDA calls for one in the next year or two.

“I’d rather that we did one just because it’s due diligence on our part and not wait,” Calaveras County Board of Supervisors member Merita Callaway suggested. “I think it’s important that we do it sooner than waiting a year or two.”

Cope said he recommends completing the comprehensive economic development strategy work first and awaiting detailed information from U.S. EDA on its requirements before launching an audit. He said the soonest an audit should begin is in the fall and that the administrative grant that is now funding the district cannot be used for an audit.

The best-case scenario would allow CSEDD and Tuolumne County Auditor Debi Russell to perform the audit, Cope said, adding that he and Russell have been in contact with the federal agency to determine if that is permissible.

Cope also informed the board that mid-year and end-of-year reports dating back to 2009 on how grants were spent were not submitted to the U.S. EDA.

CSEDD and TCEDA Assistant Director Beth Hartline said U.S. EDA officials have been understanding of the difficulties faced in playing catch-up.

“They realize we’re working without a (safety) rope,” Hartline said.

She said former Executive Director Larry Busby took his computer when he left, and no files were copied or left behind so the reports had to be compiled based on review of the minutes of board meetings.

“We’re working to put something in the file, button it up and move on,” Hartline said.
Mariposa County Supervisor Kevin Cann asked whether Busby’s computer can be recovered from him.

“I can send him a letter,” said CSEDD and Tuolumne County Counsel Carlyn Drivdahl. “I’ll see what I can do.”

Drivdahl hinted at the sensitivity of the matter, noting Busby has an outstanding claim for severance pay, previously estimated as $21,875, with the CSPC.

In other business, the board reached a consensus to direct Drivdahl to write up a call for bids on a new two-year contract for administering the CSEDD with an option to extend for three additional years. The TCEDA is expected to bid on the new contract.

The board will next meet on March 8 to select projects for inclusion in the next comprehensive economic development strategy report.