Government agencies, nonprofit groups and a for-profit business that are borrowing property owned by the Tuolumne County Economic Development Authority could eventually have to pay if they want to keep using the equipment.
The TCEDA Governing Board voted unanimously on Thursday to approve a plan for dispersing the authority’s physical property, which ranges from high-end computer tablets to a decorative ficus tree, as part of the process to permanently shut down the agency.
Which agencies will keep the TCEDA’s various types of records was also agreed upon by the board.
On Feb. 19, the county Board of Supervisors and Sonora City Council voted to end a partnership between the two governments that created the TCEDA in late 2008. The authority’s $460,000 annual budget was funded almost entirely with taxpayer money provided jointly by the city and county.
The unanimous decision to end the TCEDA came after months of controversy over information that came to light about the authority’s operating standards and practices through an investigation by the Tuolumne County Civil Grand Jury, as well as a citizen’s lawsuit against the agency for access to public records.
It also happened one day after The Union Democrat published a report about the authority’s travel and businesses expenses for 2017 and 2018 that amounted to more than $100,000 for both years combined.
County officials who provide legal and auditing services for the TCEDA addressed some questions about the authority’s equipment that’s on loan to other entities, in addition to providing information that illustrates how the county’s process for handling property has more layers of oversight.
To sell any property to an outside government agency, such as the city or schools, the county must make a finding that the property is no longer needed. The outside agency also must send a letter to county Auditor-Controller Debi Bautista requesting to purchase the property.
The county’s elected Board of Supervisors must give permission to Bautista for her to sell any property valued at more than $5,000.
Bautista said she has not fielded any requests for surplus property from nonprofit groups or other non-governmental organizations in the past due to concerns over having to select one group over another, as well as what they would ultimately do with the property.
Unlike the TCEDA, the county also doesn’t loan out property to outside agencies or groups to Bautista’s knowledge.
“I can’t think of one occasion where we’ve loaned property,” she said.
An inventory of the TCEDA’s property compiled for Thursday’s meeting showed seven of its 11 computers and tablets are currently on loan to other government agencies or outside groups, including one that’s co-located with a for-profit business.
Other items that the TCEDA has loaned out are two large flat-screen TVs, two computer monitors, a printer, standing desk, projector and $10,000 programmable robot.
County Counsel Sarah Carrillo said only the robot, which was loaned to the Tuolumne County Superintendent of Schools Office for education purposes, has a formal agreement as far as she’s been able to determine.
Carrillo said the other property was loaned out by Larry Cope, the TCEDA’s outgoing chief executive officer, with the understanding that it would eventually be returned to the authority.
Most of the loaned equipment was used or no longer needed by the TCEDA, according to Carrillo, who also acknowledged that there were some instances where Cope specifically purchased items to loan to another agency.
“We understand that was to help foster some relationships,” Carrillo said.
Cope purchased a $460 4K Smart LED TV and wall mount from Amazon for the county Community Resources Agency’s conference room, which Carrillo said was for displaying maps and looking up information when meeting with developers who were also clients of the authority.
There were also two Microsoft Surface tablets on loan to the Community Resources Agency reportedly for the same purpose, but it’s unclear whether either of those were among the three Surface tablets that Cope purchased with taxpayer money between December 2016 and June 2018.
County departments loaning their equipment to each other is not unprecedented, according to Carrillo, who said she’s loaned her office’s projector to the County Administrator’s Office and Grand Jury in the past.
Carrillo also said a TCEDA-owned standing desk was borrowed by the Tuolumne County Visitors Bureau for a month to try out.
“There’s nothing that strictly prohibits that legally,” Carrillo said about the TCEDA’s practice of loaning out equipment to other entities.
It’s also not illegal for the TCEDA to loan equipment to a private entity with the expectation that it would be returned, Carrillo said in response to a follow-up email after the meeting.
WorkPlace Sonora is a limited liability company that operates a coworking center of the same name on Stockton Road, which charges membership fees for use of the facility and equipment that includes a 65-inch flat screen TV, ViewSonic projector, Canon multifunction printer, and 2010-era Dell desktop computer and monitor on loan from the TCEDA.
Most of the equipment came from the TCEDA’s now-defunct InnovationLab, and the authority’s board discussed loaning it to WorkPlace Sonora at a meeting in September 2017.
Carrillo said she believes the equipment was placed at WorkPlace Sonora because it could be used by TCEDA clients who needed access to such equipment. Cope told her that the company was viewed as an economic development partner, and clients often visited the space to use the equipment.
Greg Falken, co-founder and chief executive member of WorkPlace Sonora, also said the center serves as the satellite office for the Modesto-based nonprofit Valley Sierra Small Business Development Center.
Falken said there was not an application process to get the equipment, and he doesn’t remember if there was a signed agreement with the TCEDA, though Cope made it clear that the arrangement was a long-term loan.
The TCEDA voted unanimously on Thursday to give the city and county the first shot at requesting any equipment on the inventory list.
Entities currently in possession of TCEDA-owned property would next get an opportunity to purchase the equipment at fair market value if it doesn’t get claimed by the city or county. Other entities with borrowed computers are the Tuolumne County Chamber of Commerce and Sonora Chamber of Commerce.
Carrillo said the county could also sell any of the property to nonprofit groups if it would benefit the public.
County Supervisor Karl Rodefer suggested letting local schools get the next opportunity to purchase the equipment, followed by other government agencies and nonprofit groups. Anything left would be sold at a public auction.
Rodefer’s wife, Jo, serves as president of the Columbia Union School District Board of Trustees, which received the most equipment from the former InnovationLab after it shuttered last summer and recently accepted a $2,000 grant from the TCEDA.
The equipment and grant will be used to develop a lab focused on fostering education in the fields of science, technology, engineering, arts, and mathematics, which would be open to the public one or two nights a week.
Rodefer served as alternate on Thursday for County Supervisor John Gray, chairman of the TCEDA board, who wasn’t able to attend the meeting. Rodefer will replace County Supervisor Sherri Brennan at future meetings because she has received some additional committee assignments that have increased her workload.
After the meeting, Rodefer declined to comment when asked several questions related to the TCEDA. He’s also the only elected supervisor who hasn’t responded to requests for comment since the decision to shut down the agency.
Brennan said in an interview after the meeting she recently joined a number of committees related to natural resources and water policy, in addition to taking former County Supervisor Randy Hanvelt’s spot on the board for the Rural County Representatives of California.
Cope also didn’t attend the meeting on Thursday and hasn’t responded to requests for comment since the vote to dissolve the authority. His employment will officially end on Saturday, but he agreed to take Thursday and Friday off as vacation time.
In addition, Cope agreed to waive the 90-day notice period for terminating his contract and give back 80 hours unused vacation time to settle any questions over inconsistencies between his time cards and calendar for 2017.
One of the grand jury’s findings was that Cope went to England for about a month in 2017 and used only four days of vacation, with most of the trip labeled as “comp time” on his calendar.
Cope will receive six months of severance pay, a total of about $82,000, under the terms of his employment contract. He will also receive a certain amount of money for unused vacation time, which county officials said they still can’t disclose until his employment officially ends.
Financial statements for the TCEDA showed about $35,600 as of June 30 last year in compensated absences, which includes accrued leave, that the authority would have to pay if all employees left. Cope has been the only employee since his assistant quit last March and used a week’s worth of vacation time since July 1.
On Thursday, the TCEDA board also unanimously approved taking the remaining $148,155 in the agency’s reserves and putting it into the operating fund in part to pay the rest of what’s owed to Cope.
The board also approved a plan for dispersing the authority’s records that are categorized as legal, fiscal, personnel and miscellaneous.
Legal records are anything that’s considered attorney-client privilege and will remain with the County Counsel’s Office, which served as the legal advisor to the TCEDA. The authority’s fiscal and personnel matters were handled by the county Auditor-Controller’s Office and Human Resources Department, respectively, and will each keep the related records.
Copies will be provided to both the city and county of the authority’s miscellaneous records, which include brochures, contracts, form letter templates, InnovationLab membership applications, policies, invoices, meeting agendas and minutes.
The goal is to have the TCEDA completely dismantled by the end of the fiscal year on June 30, but county officials said there could be things that come up that need to be addressed after that. The agency’s website shut down on Friday, while its main office in downtown Sonora permanently closed on Wednesday.
Bautista said that independent audits of the TCEDA’s finances and management practices are being seen through to completion by the firm MGO and expected to be done by the end of the month.
At a meeting in September, the board approved spending more than $41,000 to conduct the audits in response to a recommendation from the grand jury.
The board went behind closed doors after the public meeting on Thursday to discuss one case of anticipated litigation against the TCEDA and its nonprofit arm, the Economic Prosperity Council of Tuolumne County, though no action was taken and no other information was made available.