As Sac State digs into CapRadio finances, questions arise over business with board members

In April 2019, Capital Public Radio announced plans to move from its cramped building on the Sacramento State campus to downtown Sacramento, which before the pandemic was a bustling area of businesses, state offices and the newly opened Golden 1 Center.

Rick Eytcheson, then CapRadio’s general manager, declared the move would “add to the vitality and economic health of downtown Sacramento,” and allow CapRadio to double its staff to 140 employees.

The plan eventually morphed into CapRadio plans to occupy two buildings, one for a performance center at 1010 8th St., the other to house the headquarters at 730 I St., a former Bank of America building that once housed the Sacramento Police Department and is on the city’s register of Historic & Cultural Resources.

That building is owned by 730 I St. Investors LLC, which includes Sacramento developer Bay Miry.

Months after CapRadio announced its downtown expansion, Miry’s wife, Katherine Bardis-Miry, joined the CapRadio board of directors in July 2019.

She has remained on the board ever since, including during the period when CapRadio signed a lease on the building on March 1, 2021, university documents obtained by The Bee show.

The lease agreement was signed by Bay Miry and Jun Reina, who was then CapRadio’s general manager, and runs through 2037, with monthly rent payments beginning at $68,976 after the first year of occupancy, when no monthly payments were required, and increasing to $97,439 at the end of the contract.

Now, with CapRadio projected to be insolvent by January, university officials are poring over CapRadio’s expenses, as well as potential conflicts of interest among board members.

“I think any reasonable person would find concern with that,” Sac State President Luke Wood said Wednesday in an interview with The Sacramento Bee, his first comments to the media about the financial troubles engulfing CapRadio.

That lease and other CapRadio purchases are drawing scrutiny by the university as officials say they are trying to save CapRadio from a financial abyss.

Invoices obtained by The Bee show that a company run by a former board member and CapRadio treasurer sold thousands of dollars in office furniture to the broadcaster for one of the new buildings, then charged thousands more to store the items while move-in dates were delayed.

Board’s conflict-of-interest statements missed

Many of the financial problems facing CapRadio were revealed in an audit released by the California State University Chancellor’s Office last week.

“The audit pointed out some real serious concerns about what’s happening with Cap Public Radio,” Wood said. “And we need to understand at a deeper level what happened, how it happened, who knew, so that we can be responsible stewards of this entity.”

The audit did not focus on the ownership of the building but did criticize CapRadio for failing to retain conflict of interest statements.

“The (conflict of interest) policy states that members of the board should complete an annual COI statement,” the audit said. “However, CPR could not locate signed statements during the audit period because the staff member responsible for maintaining the statements was on sabbatical leave.”

Bardis-Miry and Etchyeson, who retired in 2020 and was president emeritus until 2023, both say Bardis-Miry had no say in the selection of her husband’s building for the new headquarters.

“The discussions to go into the building started well before my appointment to the board and I made sure to recuse myself from any votes or detailed discussions regarding the property,” Bardis-Miry wrote in an email in response to queries from The Bee. “My involvement with the board and organization had no bearing on the building lease and associated decisions.”

Etchyeson echoed that, saying CapRadio was in negotiations to land a lease on the building when she joined the board.

“She had absolutely no influence on the decision,” Etchyeson said in a phone interview. “I can assure you, Katherine Bardis had no input.”

He added that her appointment to the board while the deal was being negotiated had not caused any concern, saying, “She was not part of that decision in any way.”

Board Chairwoman Andrea Clark noted that board minutes show Bardis-Miry removing herself from a lease discussion at an October 2019 board meeting.

“Katherine Bardis-Miry joined our board on July 25, 2019, and is in her second term ending July 25, 2025,” she wrote in an email statement. “The October 4, 2019 board meeting minutes reflect that the general manager requested that Bardis-Miry ‘step out for the remainder of the meeting’ while the potential lease at 730 I Street was discussed by the board.

“Subsequent lease negotiations were led by the general manager and chief financial officer, and the lease was executed on March 1st, 2021.”

Clark and Bardis-Miry resigned from the board Wednesday night, along with 12 other members.

Board member was connected to furniture deal

Wood said he also has concerns about invoices from a company called Western Contract, whose president is former board member Bill Yee. That firm sold $22,197.41 in equipment and furniture to CapRadio in January and February 2023, according to invoices.

The company also billed CapRadio another $17,181.50 to store the equipment from September 2022 through last June, invoices say.

As in the Bardis-Miry case, documents show Yee left a board meeting while other directors discussed hiring his company, then approved it as the best deal available.

Board minutes from May 26, 2022, show Yee left the session as discussion began about using his company for purchases.

“Yee excused himself from the meeting and was absent for new business discussion,” the minutes say. “Western Contract was selected as the vendor for our downtown facility.

“The selection went through a bid process administered by LPAS. Compared to other bids, Western Contract was $193K less and offered better terms.

“The Finance Committee agreed that the bid process was fair, and the contract is favorable and reasonable. The Finance Committee requested full board approval since Yee is President/CEO of Western Contract and CapRadio’s board treasurer.”

Yee did not respond to a phone message left for him Wednesday morning at Western Contract, and a CapRadio spokeswoman did not provide answers to questions from The Bee about that contract.

Yee’s LinkedIn page shows he joined the board in January 2015, and board meeting minutes list him as a board member as recently as March 2023, when he was among three directors listed as absent for that session. The last meeting he was listed as attending was Nov. 17, 2022, when he presented a financial report.

Wood, in his interview with The Bee, gave essentially the same answer when asked about the Yee contract as he did when asked about a potential conflict with the building lease.

“I think any reasonable person would have concerns with that,” he said. “I’m a reasonable person.”

CapRadio could run out of money

Sacramento State holds the license for CapRadio, an NPR affiliate that operates KXJZ-FM (90.9) and KXPR-FM (88.9) and a network of repeater stations, including KUOP-FM (91.3). CapRadio also manages North State Public Radio, which has two FM stations owned by Chico State.

The expansion effort and financial management problems have left CapRadio in a deep hole, with Sac State officials projecting it will be insolvent by January and Wood appointing an administrator to take over management of its operations other than journalistic or programming decisions.

Sac State officials disclosed last week that CapRadio is projected to be financially insolvent by January, and the release of an audit last week that found severe financial mismanagement at the operation.

Following the release of the audit, the university said it was assuming control of CapRadio’s financial and accounting operations, but leaving journalistic and programming decisions to a chief content officer at CapRadio.

Wood also appointed Jonathan Bowman, who first discovered “inconsistencies” in CapRadio’s financial records, to be the administrator overseeing the broadcaster.

Bowman made that discovery in 2021, which prompted then-President Robert Nelsen to order the audit of the operation.

The audit from the Chancellor’s Office of the 23-campus Cal State system found widespread financial problems and lapses, including lax controls on employee credit card usage, a lack of documentation for some expenses and a failure to provide internships and training for university students.

The audit also found CapRadio had failed to tag all equipment valued at $500 or more, as required, with auditors discovering that five laptops or computers could not be found and that in one group that was supposed to include 20 laptops valued at $757 each only three could be found.

“We also found that a physical inventory had not been performed during our audit scope period, and CPR management could not recall the last time the inventory was performed,” auditors wrote. “CPR management stated that this was due to staff turnover and because much of the new equipment and furniture purchased for the downtown locations were not ready for use, as the locations were still being renovated.”

Auditors also found that outdated equipment was not removed from CapRadio ledgers and instead were being stored in the CapRadio building.

“During our walk-through performed onsite, we noted that disposals consisting of old studio equipment, wires, cables, printers, chairs, computers, telephones, and more were stored in two rooms at the CPR building,” the audit said. “Proper administration of property and equipment decreases the risk that assets may be lost, stolen, or misrepresented in financial statements.”

The audit also found that CapRadio, which announced in 2019 that it planned to leave its campus building for the two leased buildings in downtown Sacramento, was unable to pay its own rent to Sac State.

Weeks before the release of the audit, the operation laid off 12% of its staff and cut programming.