Business Development Board refuses audit of taxpayer $$, rejects Buy Local program

Our taxpayer dollars at work? (Source: driftglass)

Prominent local attorney and civic activist Virginia Sherlock, provides an informative (and alarming) update on the latest Business Development Board (BDB) meeting:

The Business Development Board voted overwhelmingly Thursday not to support a Buy Local program that Stuart City Commissioner Troy McDonald and Martin County Commissioner Ed Fielding have proposed.  The program is designed to boost sales for local business owners by encouraging residents to shop in local stores.

The BDB also refused to consider an independent audit of the organization’s books and financial policies, despite the fact that millions of taxpayer dollars have been funneled into the BDB by Martin County and the City of Stuart.

Financial reports approved by the BDB at the beginning of the  meeting show that the organization has more than $535,000.00 in the  bank with no plans for how the money will be used.

When Commissioner  McDonald asked the BDB to try to keep in mind that the money that’s  sitting in the BDB bank account is “taxpayers’ money”, another  Board member asked, “Is it taxpayers’ money or is it our money?” and BDB Attorney Ken Norman replied firmly: “It’s our money.”

Although there were quite a few questions about the financial statements — including why the January statement showed $3,334.76 was spent for rent while the February statement showed  $9,684.86 expended for rent (a question that was never clearly answered) — Commissioner McDonald was the only BDB member who was interested in an audit.

The staff appeared to be shocked by the suggestion that an audit might be in order, and the Treasurer and several other BDB Board members railed against  McDonald’s proposal to have an independent auditor go over the books and financial policies.

Jill Marasa, the BDB’s business development and finance manager, said the accounting firm of Proctor Crook audits  the BDB’s books every year when it prepares the organization’s 990 tax return, which she said was a very detailed examination of the accounts of the  organization.

Although he made repeated efforts to persuade his fellow BDB members that an independent audit should be conducted to assure taxpayers that the millions they turn over to the BDB are being properly handled, Board members and staff adamantly  refused to even consider such a proposal.

McDonald was later the only BDB member to vote in favor of authorizing an expenditure of $10,000 in “seed money” from the BDB to get an advertising campaign and other aspects of the proposed Buy Local program started.

BDB members were extremely critical and surprisingly harsh in discussing the proposed program, suggesting that it would “compete” with programs sponsored by the Chambers of Commerce.

McDonald pointed out that many small businesses do not belong to the Chambers and therefore receive no benefits from Chamber programs (which none of the Chamber representatives seemed to be able to describe).

The proposed Buy Local program is intended to help small businesses throughout the City and the County generate more local sales, regardless of whether they are Chamber members, McDonald said.

Carolyn Davi, executive director of the Palm City Chamber, said if local businesses don’t want to join the Chambers, “that’s their problem.”  She said her organization pays dues to the BDB and she doesn’t want the Chamber to pay the BDB to support something (like the Buy Local program) that competes with the Chamber.

Chamber representatives from Palm City and Hobe Sound and Economic Council Executive Director Tammy Simoneau said the Buy Local program proposed by McDonald and Fielding would “duplicate” Chamber efforts and argued that the BDB should not provide any funding for the Buy Local program.

Dan Carmody, a BDB Executive Committee member, said he wanted proof that the BDB would get a return on its investment if it provided funding for a Buy Local program, and the Hobe Sound Chamber representative said supporting a Buy Local program would be “outside the mission” of the BDB and should be operated through the Chambers instead.

The BDB’s executive director reminded the group that the BDB’s contract with Martin County limits its scope of services to “targeted businesses” rather than small businesses that would benefit from a Buy Local program.

Jeff Sabin, the Stuart/Martin Chamber of Commerce representative, said his company (Waste Management) supports local business programs in 49 states, but since the Chambers pay dues to the BDB, the BDB shouldn’t contribute to a program that might “conflict with our partners” and negatively impact the Chambers.

Jeff Bowers, Treasure Coast Builders Association representative, complained that the City of Stuart and Martin County don’t use local vendors for building projects and said his organization won’t support a Buy Local program for the City and the County because the City and the County don’t support local contractors.  (The City of Stuart does not have a local preference ordinance; Martin County does but Bowers says it is not working.)

Shortly before voting against providing any money for the Buy Local program from the $535,000.00 in “excess funds” the BDB has piled up in the bank, the Board voted to spend $35,000.00 for a consultant to help develop a Request for

Proposals to create a comprehensive strategic economic development plan for Martin County — with the understanding that the BDB would expect to have “a seat at the table” and would not participate if the plan ultimately approved by Martin County is not to the liking of BDB representatives. 

Board member George Fox questioned whether the BDB should use BDB funds to finance an RFP that might produce a plan that the BDB might not find acceptable. “I hope I’m wrong,” he said, “but I’m suspicious.”

BDB Chairman Ed Weinberg said the BDB’s contract with Martin County requires the BDB “to implement” an economic development plan.  For $643,000.00-a-year, taxpayers apparently should not expect the BDB to actually create an economic development plan. The BDB’s responsibility, apparently, is simply to “implement” a plan developed by the County. And if there’s no plan to be implemented . . . oh, well.

Finally, the executive director  reported that he met with Martin County  Administrator Taryn Kryzda to find out what the County Commission wants  from the BDB with respect to re-negotiation of the BDB’s  contract with Martin County, but the County Administrator said she didn’t know what the Commissioners want from the BDB and she was going to find out and get back to them but the BDB has not heard anything further.

BDB  members agreed there is nothing more they can do to move forward with  contract re-negotiation if the County does not respond to their efforts  to open up discussions.

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