Hornell Partners for Growth turns the page after NYS Comptroller's critical audit

Hornell Partners for Growth, the Maple City's Business Improvement District with nearly 300 members, has rebounded from a critical state audit that led to a felony conviction of its former executive director, according to a top city official and the chairperson of its board of directors.

Those leaders said the HPG of 2022 is run with greater professionalism and transparency after many of the practices that led state auditors to ding the city for inadequate oversight and lax monitoring of HPG’s funds have been changed.

The New York State Comptroller's Office examined HPG's books for the time period of April 1, 2015 to Oct. 2, 2017.

State audit leads to felony charges, conviction

While the comptroller's completed report was not published until last month, many of its findings and recommendations were communicated to HPG much sooner, BID officials said.

Based on audit findings and a subsequent investigation, Michelle “Shelly” Stevens, HPG's former executive director, was charged in 2020 with fourth-degree grand larceny and first-degree falsifying business records for allegedly stealing $1,711 in cash from the group's Fourth of July Festival.

The case was settled earlier this year with Stevens, who led HPG from 2014 to 2018, pleading guilty to fourth-degree grand larceny. She was ordered to pay $1,711 in restitution.

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The audit predates HPG's current leadership

Michelle R. Pogue, who assumed the chairmanship of HPG's Board of directors on April 1, 2018, said the BID began implementing the state's recommendations almost immediately and "went above and beyond what the recommendations were."

"I think when you hear 'Comptroller’s Office' you should get a little nervous but everyone worked with us," Pogue added. "They were very supportive. Trying to help us work through it.

“We went as extreme as we could to tighten everything up. They saw our effort and were very helpful.”

Hornell Mayor John Buckley took office in January 2018. Buckley said it was a lot to take in and mentally process.

"Obviously, when someone takes advantage or breaks the public trust there is going to be a lot of negativity cast on HPG because of that," he said. “You not only have to absorb that, but you have to pivot and say, ‘What are we going to do about it?’”

HPG changed policies based on audit findings

Both Buckley and Pogue said all of the corrections stemming from the state audit were adopted in 2018.

One major reform was eliminating all cash transactions.

“Obviously, that was a big part of the auditor’s findings,” Buckley said. “We put an end to that practice altogether."

Auditors also cited HPG's longstanding policy — one that pre-dated Stevens — of allowing businesses outside the legal boundaries of the district to take part in BID activities for a $175 fee.

Buckley said the fees were not applied evenly or fairly. The state auditors noted the average assessment for businesses located within the geographical area of the BID was $634 in 2017 — 3.5 times more than the membership fees charged to businesses outside the BID.

Pogue said the policy was ended prior to 2018. Under current policy, only businesses within the geographic boundaries of the district are allowed membership.

The BID did away with the position of executive director, opting instead for a BID manager who focuses on promotions, event planning, communications and carrying out the board's vision and goals. Valorie Whitehill was hired as the district manager in January 2019 and she remains in that positio

According to HPG, several other reforms were put in place in 2018, including:

• The process of opening mail was added to have two initials on all mail as it comes in.

• The BID manager does not have her name on the bank account. She can’t write checks or do bank transactions of any kind.

• The BID manager is not a part of finances and requests in writing all items that need to be purchased.

• Two signatures are required on all checks and all checks are reviewed by HPG board chairperson or treasurer.

• The chair, treasurer and bookkeeper are the only individuals with signature authority.

• HPG does not collect fees for activities such as bounce houses or similar items.

• Reviewed the boundaries of the district.

• All-new executive officers on the 15-member board.

“We take to heart (the Comptroller's Office) recommendations and we agree with many of their key findings and recommendations," Buckley said. "And I think our response reflects that."

Jeremy Bittel, co-owner of Maple City Physical Therapy, agreed.

“I definitely think they have made some very positive changes," Bittel said.

HPG created to promote economic development

The Hornell Common Council created HPG in 1997 to spur economic development. HPG sponsors festivals, promotes Hornell and provides support, guidance, training and marketing for its member businesses.

Members include retail, banking, insurance, medical offices, printing, utilities, beauticians, attorneys, restaurants and bars, delis, coffee shops and computer repair businesses.

Buckley said the audit shouldn't overshadow HPG's accomplishments.

“One thing I do not want to get lost in all of this is all the good HPG does," he said.

HPG's primary goal has not changed. It remains dedicated to "helping its members be successful and grow,” Pogue said.

That help includes marketing, promotions, social media coverage, software trainings and sponsorship of annual community events such as the July 4 celebration, fall festival and Hornell Home for the Holidays activities.

Pogue said events that draw visitors to Hornell are important because "once they are here, they see things they like, they are more apt to come back.”

'Gigantic leaps forward'

In 2019, HPG introduced a new logo featuring a segment of Hornell’s past — a railroad train — top centered on an illustration of an orangish-yellow maple leaf. Railroad tracks circle the outside of the logo and the slogan "BUILDING A STRONG BUSINESS COMMUNITY" is incorporated into the top and bottom sections of the tracks.

Pogue is also excited about an initiative launched last year — the HPG "Discover Hornell" app that includes news and information about every member business, a calendar of events, a link to the group's web page and job openings.

Pogue said one of the goals for the app is to draw more area college students to Hornell. She said the results have been promising.

"It has been an effective tool to promote member businesses and events,” she said.

Pogue said she expected audit clouds to linger for a couple of years. However, she conceded, "I never expected it to take five years."

"I think we have taken gigantic leaps forward,” Buckley said. "Since 2018, we have really pivoted and changed. Not just the way we do things from a structural standpoint, but we have changed the culture of HPG. It is more open, it is more transparent. Things are just run in a more professional way.”

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This article originally appeared on The Evening Tribune: Hornell business association emerges from state audit cloud