The La Grande City Council voted Wednesday night to discuss all options for terminating its contract with the Union County Economic Development Corporation.

UCEDC President Mark Davidson made a presentation to the council at Wednesday’s meeting outlining the agency’s actions since it discovered the organization’s administrative assistant, Amanda Case, had embezzled more than $20,000 over a two-year period.

“I’m here because of the concerns regarding the corporation and recent media coverage on personnel-related financial matters,” Davidson said, in a prepared statement.

Davidson told the city council that when the embezzlement was discovered in November 2016, the corporation’s board members were notified within 48 hours. The UCEDC board includes representatives from both the city council and the county commission. Sitting on the board at that time were Davidson, who was a county commissoner, and John Lackey, a city councilor. Several new members joined the board in February, including County Commissioner Donna Beverage and City Councilor Mary Ann Miesner.

As a result of the case, Davidson said, the agency canceled its credit cards and the board members no longer use credit through the agency.

In reference to the agency’s request for additional funding during the city’s 2017-2018 budget meetings, Davidson said UCEDC did not make the request in order to offset the finances lost from the embezzlement.

“The restitution was already being negotiated prior to the request (to the city council) being submitted. The request from UCEDC has not increased from prior years,” Davidson said.

He added the agency’s insurance also would’ve supplemented the loss to the agency.

“As you can imagine, whenever you have an issue regarding an employee in violation of the law, it is a difficult situation,” Davidson said. “On the advice of our counsel, and in accordance with our policies, the board members cannot discuss the issue.”

He said if any of the board members had discussed the investigation, it would have exposed the agency to liabilities.

“We appreciate your interest, your partnership, and I thank you for your understanding,” he finished.

Several council members responded that nonetheless they should have been made aware of the
embezzlement.

Davidson said he appreciated the council’s concern.

“All board members were informed, including the elected officials on the board. How the internal communications of the two public agencies operate is up to each of those public agencies to define,” he pointed out. “The conversation never came up on the board level about having that conversation at the time of the funding request. As you recall, we didn’t appear in front of the budget committee, so there wasn’t that opportunity (to inform the city council).”

Councilor Nicole Howard said having a city councilor sign a nondisclosure agreement puts the city in a “perilous position.”

“I understand the sensitivity that incident (required), but to have a nondisclosure agreement seems really problematic to me when one or two councilors know (something), but no one else can,” she said.

Howard suggested that being told about the embezzlement during an executive session meeting, which is not open to the public, would have been a better solution.

City Manager Robert Strope said there is no legal way to conduct an executive session meeting to talk about a private, nonprofit organization’s personnel matters.

“At the heart of this is the protection of public funds,” Strope said.

He said the council should consider how it handles its agreements with outside organizations that receive public funds. The agreements should contain language that addresses what happens when public money is improperly handled, Strope said.

During council comments toward the end of the meeting after UCEDC representatives left the meeting, Councilor Corrine Dutto again expressed disappointment that the agency did not report the embezzlement to the city. She said she feels UCEDC hasn’t adequately shown how it is making sure this doesn’t happen again.

“I am not satisfied,” Dutto said.

Dutto’s motion to add an action item to October’s agenda — to discuss the termination of UCEDC’s contract — was seconded by Councilor Gary Lillard.

“This is a conversation we probably should’ve had before (the budget meetings),” Mayor Steve Clements said. “We obviously didn’t know (the embezzlement) was happening.”

He pointed out that there have been questions about how the City of La Grande is benefitting from its partnership with the agency for a while.

Strope mentioned the Joint Review Team, a group of six members, three from the city council and three from UCEDC, who meet to talk about the goals for the agency.

Strope suggested this team should have a work session before the October meeting.

The council decided to have the Joint Review Team meet and discuss what UCEDC is planning and what changes the agency wants to make. The action item to discuss terminating the agreement with UCEDC will remain on the agenda for the October city council meeting, and the Joint Review Team can bring its information to the conversation.

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