Round two of the Ulster County Cares Small Business Assistance Program (Cares II) could be thought of as a million-dollar hot-air balloon, the belly of which was filled with hydrogen. That balloon apparently caught fire and exploded. The former president of the Ulster County Economic Development Alliance (Uceda), Tim Weidemann, has been accused of negligent piloting.
“In our review of Cares II, we have concluded that the former president/CEO, who also served as the director of economic development, was responsible for incongruities between the contract and its execution,” said Amanda LaValle, a deputy county executive for Ulster County and Weidemann’s interim replacement at Uceda. She was responding to a critical audit of the alliance released by county comptroller March Gallagher on Friday, August 6.
Weidemann left the position in April to join U.S. congressman Pat Ryan’s staff as his director of economic development and special projects.
The monetary awards program was halted on June 16, two months after the awards were announced. Roughly half the 42 Cares II award winners were discovered to be ineligible under the rules of the grant program.
A press release from the county executive’s office at that time explained that the program was halted because the possibility of errors in the scoring and selection process dating back to last fall may have caused some applicants to be incorrectly awarded grants.
“Unfortunately, “ explained legislature chair Tracey Bartels, “when the awardees of the program were made public, it became clear that recommendations we had made previously with regard to Cares II were not adopted.”
The winners were chosen from over 270 applications which had been scored by a six-person review committee, three of whom, John Gavaris, Kevin Roberts and Chris Hewitt, were county legislators. The remaining three members, Lisa Berger, Sharon Williams and Barbara Loughran were appointed by the county executive. Berger previously served as a board member and president/CEO of Uceda. Loughran was a longtime Uceda staff member.
Comptroller Gallagher’s audit of the small-business awards charged failures in governance, inadequate internal controls, and poor oversight within Uceda.
The funds were intended to be distributed to low-to-moderate-income small businesses in Ulster County,
Gallagher did not blame the scoring committee. “The committee’s scoring was fine,” said Gallagher. “But unfortunately they weren’t reviewing tax materials. They weren’t reviewing income materials, so that was not their determination.”
Nor were the businesses which came calling for a piece of the action to be blamed. The comptroller said business owners were not informed that they would not be eligible for a grant if their incomes were higher than the program allowed. These thresholds were not included on the face of the grant application or in the application instructions.
Financial awards ranging between $5000 up to a maximum of $35,000 were meant to be utilized for working capital, permanent machinery and equipment, interior renovations, rent subsidies and soft costs. The awards were to be paid out with federal funds made available through the American Rescue Plan Act (ARPA).
The legislature understood that the same wealth limitations would apply as had existed in the first iteration of the awards program in 2021.
Gallagher noted that Cares I, the inaugural federal small-business aid program, had even stricter eligibility requirements than Cares II. Its awards were paid out of Community Development Block Grant (CDBG) funds.
To qualify for funding during the first round, businesses had to have 25 or fewer employees and either had to be owned by a person of limited income or employ a majority of individuals who meet limited-income thresholds. When the Cares I program concluded in early 2023, $930,000 had been paid to 34 small businesses and organizations. Over half those grants went to women and minority-owned businesses.
Uceda had been responsible for conducting the competitive application process on behalf of Ulster County.
Weidemann was head of Uceda during the first awards program. It’s alleged that he and his development staff neglected to abide by the same process for Cares II that they had followed for Cares I. It was they who included the ineligible businesses among the applications forwarded to the scoring committee.
After the applicants were scored, the Uceda board was then presented with the list of awardees for their approval, 24 hours before the April 11 board meeting.
Seventeen business owners who reported a gross income above the allowable thresholds received awards. One company owner was even found to have an average gross income in excess of a million dollars.
Two awards were announced for non-profit entities, though non-profits were ineligible.
While Uceda is a local development corporation, its employees are county employees who operate under that same chain of command.
“I think you can pin a lot of it on Tim,” said Gallagher, “but also there should be procedures and policies in place to make sure that employees are performing appropriately. It’s not just him. There should have been oversight over his work.”
Weidemann was asked for comment but has not yet responded.
The comptroller does not support sending additional money to Uceda until its governance and financial issues are worked out. “I think the structure is a useful structure to carry out the purposes of economic development,” said Gallagher. “And I do not think it should be disbanded. But I think it needs more oversight and better engagement.”
LaValle said that a new director of economic development joining the county staff in the coming weeks pending legislative confirmation will take over as president/CEO of Uceda.
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