Despite having no signed contract with the Columbia Economic Development Council (CEDC) for the past 18 months, Columbia County has until very recently been sending CEDC some $115,000 every quarter.
Board of Supervisors chair Patrick Grattan
The news raises doubts about whether County officials neglected to exercise due diligence, basic oversight, and fiscal responsibility for funding totaling $437,000-$460,000 per year.
Funding allocations were approved each year by the Supervisors, but apparently contracts dictating the terms of their largesse stopped being signed. The County last had a contract with CEDC in 2013, according to documents obtained by this site, which can be downloaded [ HERE ] and [ HERE ].
In an email to colleagues this week, Ancram Supervisor Art Bassin characterized the situation as “sloppy management,” and that “common sense says you don't pay without a contract.” While waiting to find out whether the County “broke any rules, regs or laws by paying them without a valid contract in place,” Bassin questioned the potential legality of the (non-) arrangement:
“Arguably the payments we made in 2014 and 1Q 2015 are unauthorized and maybe even illegal...so it would be inappropriate to pay them for the 2Q until we resolve the contract matter... [W]hat are the legal implications of having paid CEDC for 5 quarters without having BOS approval via a valid contract?”
Bassin also noted that “As of last month's [Economic Development] Committee meeting, Ken Flood did not know whether or not Pat & CEDC had executed a contract covering the $500,000 of County support.” Flood is currently the County’s Planning and Development Commissioner, but has been let go from his Executive Director position at CEDC, without consultation with the County.
Hillsdale Supervisor Art Baer confirmed via email that “we do not have a contract [with] CEDC.” At the most recent Board of Supervisors meeting, County attorney Rob Fitzsimmons, who said at the last full BOS meeting that there is “no written contract” with CEDC, has also written that the 2014 contract was never signed. A marked-up, revised 2015 contract, stipulating a slightly lower payment of $109,250 quarterly, remains in limbo, per Fitzsimmons:
“I know Pat was going to review / discuss at a special County CEDC committee meeting, but don't think that occurred. I checked with Ken on the 2014, and that was not executed. ”
At least the County’s 2nd Quarter 2015 payment has apparently been held—not at the County’s initiative, it would seem, but due to a request by CEDC President David Crawford to hold back while the troubled development agency attempts to steady its listing ship.
Curiously, though, minutes of the recent CEDC board retreat held at Columbia-Greene Community College appear to refer to an ongoing arrangement. In a discussion about proposed changes to how the agency is funded, a footnote on p. 8 of those minutes states that
“the actual wording of the Contract between CEDC and Columbia County is very similar to this wording.”
Some limited debate occurred at a recent County economic development committee meeting to find out about the status of the contracts, with Bassin being charged with looking into it. Since that meeting, Committee chair John Reilly has suggested in email that the County may still have an “oral” or “implied” contract with CEDC.
Reilly and Baer have been charged by the County with conducting an investigation into CEDC’s loans over the past five years. Allegations have arisen that while Baer remains keen to start digging, Reilly is dragging his heels—a charge he denies.
Baer had proposed instead that an independent investigator be appointed, and $10,000 allocated, so that any findings were not perceived to be political. That proposal was shot down by the full Board of Supervisors, with many recusing themselves, largely due to claimed budget concerns. (Though $10,000 to get to the bottom of a brewing scandal was deemed too much, apparently sending CEDC $115,000 quarterly without a written contract was fine.)
Hudson 3rd Ward Supervisor Ellen Thurston surprisingly has argued for paying CEDC its 2nd quarter monies anyway, and not “necessarily interfer[ing] in the internal management decisions of this nonprofit organization”—despite the County being essentially CEDC’s only means of making payroll. Moreover, the 2013 contract was for CEDC to provide "support services” to the County, and “administrative support” to the County’s Planning/Development Commissioner, tying the two even closer together. CEDC was acting as an “independent contractor” to the County, according to the contract’s language.
The status of any contract could have both an investigatory and a financial impact. In a blustering and typo-ridden letter to the Supervisors, CEDC attorney Andrew Howard questioned the County’s legal right to seek information on how it has spent these monies. Several Supervisors have pointed out what citizens have also said: As the principle funder of CEDC, the County certainly has the right to deny funding if its contractor refuses to provide important information. (Many attendees of recent meetings have noted the unusual degree to which CEDC board members seem to view it as a private business, rather than a public authority, for example by never acknowledging the audience and denying citizens the opportunity to ask questions.)
And interestingly, the 2013 document contained provisions for either party to recover costs for actions taken to enforce its rights under the contract. So possibly that $10,000 independent investigation proposed by Baer but voted down by the BOS could’ve been done for free, with CEDC footing the bill.
The County EDC generally agreed to a draft resolution to be proposed to the Finance Committee and full board, which reads:
“That the Board of Supervisors suspend quarterly CEDC funding (including the outstanding payment of the second quarter of 2015) pending a newly executed Columbia County-CEDC contract for 2015-2016 acceptable to the BOS and negotiated through the EDC committee and county legal department and conditioned upon fulfillment (before renewed payments) of the approved BOS loan file review (a BOS document request will be attached to the Contract). Further, any proposed CEDC Restructuring Plan will also be approved by the BOS prior to the BOS-CEDC 2015-2016 Contract execution.”
However, Reilly did not bring the resolution forward as a motion, and there was no roll-call vote, so the Committee will have to have a special meeting in advance of the other two bodies to finalize language and take a formal vote.
