MONTROSE — Weeks before Glendale police launched an investigation into allegations that former City Councilman John Drayman had embezzled money from a local organization, the Montrose Shopping Park Assn. began to ratchet up financial oversight of its Sunday farmers market, records and interviews show.
The board of directors on April 7 created a “Harvest Market Oversight Committee,” according to minutes of the meeting. In recent weeks, market vendors say they were briefed on a new procedure for the collection and recording of their weekly cash payments.
And on Tuesday, the board voted to hold a special closed session meeting next week to review the Harvest Market budget and operating procedures.
Board members for the association either could not be reached or declined requests for interviews. And Glendale police, who served a search warrant on Drayman’s condominium on May 17, have declined to divulge the organization involved in the investigation.
The weekly market, which was organized and championed by a small group of Montrose tenants, including Drayman, who say it attracts new business to the area, has become a financial black hole for the shopping park association.
For years it has operated in the red, costing thousands more to produce than it brought in. Organizers have defended it as generating additional foot traffic. But many tenants along Honolulu Avenue say it competes with their own businesses or at best doesn’t help, since many of the shops there aren’t open on Sundays.
Until recently, the association’s financial woes were deepening. As of March 3, the market had brought in an average of roughly $600 per week and was forecast to have an annual loss of $52,000, according to a treasurer’s report. In 2007, the market was bringing in more than $1,500 on average each week.
But that all changed shortly after the new oversight committee was created. Suddenly, reported revenues spiked. While a treasurer’s report was not available for April or May, market manager Mark Sheridan said April 10 and 17 were the best revenue generators of the year.
Even Drayman, in an April 17 email to a News-Press reporter, referred to the rise in reported revenues as a “strange, but really terrific” event.
He did not return phone calls seeking comment.
In a later email, Drayman attributed the revenue spike to high gas prices keeping people close to home, and Sheridan said winter months are generally the slowest of the year because of bad weather and the types of produce available.
In the years since he helped create the Harvest Market in 2002, Drayman has maintained an active role in the Montrose Shopping Park Assn. and the market, even after winning a City Council seat in 2007.
A 2008 board roster listed him as “Harvest Market/events coordinator,” and board meeting minutes show he was on the finance committee that prepared the 2009 budget and that he continued to work with Executive Director Dale Dawson on a variety of tasks.
Some vendors said they gave Drayman their cash payments — 10% of their revenues for that day — when other organizers weren’t around to collect the money.
“A couple of times, when Mark [Sheridan] was busy, we would give it to him,” said Charlotte Youngblood, of Youngblood Farms.
Jeff Decker, a Drayman acquaintance, served as manager of the “Thieves Market” section, where clothing, jewelry and other items are sold. A contact number for Decker listed on the association’s website leads to a voicemail recording in which Drayman thanks callers for contacting the Harvest Market.
While Drayman does not currently have a formal position with the association, in his April 17 email he spoke of his active role with the farmers market.
“We have been working extra hard to bring in some great vendors and growers in the past month,” he said.
Weeks later, vendors at the market were introduced to a woman who would be in charge of a more formal method for collecting money.
“That’s all I was told. This is going to be the person collecting the money,” said new vendor Jay Jubal, of Tutti Frutti Farms. “[Sheridan] said, ‘They’re just changing things.’”
Previously, vendors say, the cash collection had been more haphazard.
Beyond a haphazard cash collection system that appeared to rest on whichever organizer happened to be around prior to the change, budget records for the shopping park show that recording the cash was also casual.
Monthly treasurer’s reports from 2008 — the year that market revenues dropped by nearly 60% — show that money went undeposited for months at a time.
Roughly a third of the association’s annual $300,000-budget comes from tax assessments paid by tenants within the associated business improvement district, which the association operates through a contract with the city.
Operating the market cost the association tens of thousands of dollars each year — money some merchants say could be better spent on other promotions.
“For several years now, while I write out a check for the MSP assessment, I feel that the money is not serving the majority of the shopping park,” Ken Grayson, owner of Grayson’s Tune Town and former board treasurer, said in a letter he sent to the city along with his latest assessment check.
Despite the money-losing venture and growing dissatisfaction among Montrose business owners, the association continued to tout its effectiveness and shut out anyone who made critical inquiries about revenues and costs associated with the Sunday event, said several merchants, who declined to speak on the record for fear of retribution.
While the city receives annual budgets from the association board as part of its management contract, the budgets are opaque with minimal break-down of line-item expenses or revenues.
And with few merchants attending the board’s monthly meetings, some local merchants say the closely-knit group goes largely unchecked.
Bylaws were approved in 2008 that reduced the size of the board from nine to six seats, with just four members needed for a quorum. Mary Dawson, wife of Executive Director Dale Dawson, is a member of the board, which approved paying him $12,000 a year for his new position, starting in 2010.
“I have no clue as to who approved that,” said Village Travel Service owner Charles Beatty, who is a member of the shopping park association.
—Bill Kisliuk contributed to this report.