The DACHA Debacle

As I slowly relaunch the coopgeek blog, I find that I have  a rather large backlog of items to cover. But one item really needs some attention.So before I turn my blog into a serial for release of sections of my paper, I want to take care of some seriously overdue business. Something stinks in Davis, Calif. and it has taken me entirely too long to weigh in.

David Thompson, a Cooperative Hall of Fame inductee, writer and president of the Twin Pines Cooperative Foundation, has long been calling the cooperative movement’s attention to the alleged misdeeds of the Davis Area Cooperative Housing Association (DACHA). It’s a horribly complicated mess, but the short version is that this co-op’s board allegedly voted to liquidate the co-op in a way that violates the co-op’s bylaws (and the law), and just happens to dramatically line the pockets of said board members. Not only that, but the TCPF was apparently cut out from board meetings despite DACHA’s bylaws calling for it to have a seat on the board. Furthermore, the City of Davis appears to be in cahoots with this improper governance. It’s a real mess and to David’s credit he has been a voice crying in the wilderness.

His work seems to be bearing fruit. I am especially impressed by the list of co-op leaders who have weighed in on this matter, as listed in a recent email David sent:

Paul Hazen, President, National Cooperative Business Association, Washington DC; Rebecca Dunn, Executive Director (ED), Cooperative Fund of New England; Christina Jennings, ED, NorthCountry Cooperative Development Fund; Gerardo Espinoza, ED, Industrial Cooperative Association, LEAF Fund; Jerry Rioux, ED, San Luis Obispo Housing Trust Fund; Tracy Parent, Director, San Francisco Community Land Trust; Newell Lessell, ED, Cooperative Group, Brookline, MA; Stephanie Mandel, Education Director, Briarpatch Co-op, Nevada City, CA;

Paul Cultrera, General Manager, Sacramento Natural Foods Cooperative; Dan Firestone, Financial Manager, Equal Exchange, Bridgewater, MA; Steven Parliament, Instructor, Indianhead Technical College, Wisconsin; Frances Moore Lappe, President, Small Planet Institute, Cambridge, MA; Margaret Lund, Principle, Co-opera, former ED, NCDF, Minneapolis, MN; Paul Harton, former General Manager, Briarpatch Co-op, Nevada City, CA; Walden Swanson, Principle, CoopMetrics, Andover, MA; Paul Bradley, CEO, Resident Owned Communities USA, Concord, NH; Bill McIntyre, ED, Ohio Employee Ownership Center; Christopher Mackin, Principal, Ownership Associates, Cambridge, MA; John Restakis, ED, BC Co-operative Association, Vancouver, Canada;

Stephen L. Dawson, President, Cooperative Home Care Associates, Bronx, NYC; Ken Galdson, Director, InterValley Project, Newton, MA; David Kirkpatrick, Former Director, National Economic and Development Law Center, Berkeley, CA; Martin Barnes, Co-Founder Davis Farmers’ Market; Herbert Fisher, Former Board member, National Association of Housing Cooperatives; Ginny Vanderslice, President, Praxis Group, Philadelphia, PA; Steve Alves, Director, Food for Change, Greenfield, MA; Myrna Britton, Atty and City of Santa Cruz Planning Commissioner; Roger Anderson, Former Chair, State LAFCO Commission. (Organizations for identification only)

David has been absolutely tireless in his efforts to achieve justice here. In addition to rounding up supporters he’s also assembled a formidable page of further information including much evidence.

And just today, he sends word that this mess just got darker and seems to be moving into cover-up mode:

63% of the testimony provided to the City of Davis by Twin Pines Cooperative Foundation (TPCF), Neighborhood Partners (NP) and other parties for the DACHA Dissolution Hearing were omitted by the City Attorney from submission to the California Attorney General. The 57 documents containing 420 pages of testimony contain some of the most critical testimony relating to the DACHA board and Membership and the role of City staff. Among the 400 missing pages are all the rent rolls, all the minutes of board and membership meetings and most of the evidences of wrongdoing and alleged illegal actions by DACHA and City staff.

Now I’m not in Davis so I can’t inspect these documents myself. But this doesn’t sound like a bluff to me (he goes on to invite any takers to inspect the files) and it really doesn’t sound like a case of misinterpretation or focusing on the negative in a situation that is shades of grey.

Sure, David has a dog in the fight here and he’s not an unbiased observer. But he raises valid issues about how an organization he heads was a legit stakeholder and should have been included in the actions taken by DACHA.

I don’t know for sure what happened in Davis, and I’m not in a position to pass judgement on the city’s actions or motives. But it’s pretty clear that there’s a serious breakdown in transparency that threatens the democracy on which both the City of Davis and DACHA are based. That has to stop.

UPDATE: It has been called to my attention that the City of Davis actually does have its side of the story online, including quite a few links. The focus is primarily financial and legal, but most germane to my comments on the board is this:

Neighborhood Partners [was] appointed the initial DACHA Board because there were no DACHA co-op members to serve on the Board until prospective occupants purchased co-op shares. This original non-member DACHA Board contracted with Neighborhood Partners to provide consultant and developer services to the co-op.

This suggests that Neighborhood Partners’ seat on the board was originally intended to be temporary, as part of a solution to the chicken/egg problem of how to form an elected board to create an organization to create a co-op to attract members to elect the board.

I’m not privy to the the original bylaws or plans, but hope that someone with inside knowledge might offer their comments below.

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6 Responses to The DACHA Debacle

  1. Your update to include the city’s response seems problematic, as does the loaded language used in the original piece.

    The city’s response was not “primarily financial and legal” in the sense that it’s dry and not relevant to this topic… the city spent the majority of the page explaining in detail how the actions of David Thompson, Neighborhood Partners, and the Twin Pines foundation could be legitimately considered “self-dealing”. The city’s page also attempted to give an idea of how the actions taken by Davis Thompson and his various organizations harmed the cooperatives involved and the availability of affordable housing in Davis.

    You’ve also provided a broken link to the city’s explanation. It can be found at:

    http://cityofdavis.org/cmo/dacha/

  2. coopgeek says:

    Thanks for pointing out the bad link (fixed!) and for offering your critique of the original post as well as the update. I definitely appreciate the dialogue as well as your characterization of the city’s response. I would have written a different post if I’d known of it and your point about the legal and financial implications being important is well-taken.

  3. Fair enough – the situation seems to be very charged in Davis right now, but it’s important to keep in mind that the members of the DACHA coop, as well as the members of many other cooperatives in Davis, certainly don’t see the city’s actions as being corrupt or inappropriate.

    There also seems to be an important point that isn’t coming out in either this post or in most communications made by David and his organizations – the root of David’s complaints against DACHA are not that they took money from him or illegally enriched themselves, but rather that they declined to take on an expansion of the coop that he was recommending.

    He’s not making a case about actual losses, but rather about the loss of potential income. Given what happened to the housing market in Davis a year or so after this decision, it seems that DACHA’s board made the right decision for the health of their cooperative, which is what any board of reasonable and prudent coop directors would do.

  4. Dear Blog readers; In response to Daniel Miiler’s comments I intend to share documetns that Twin Pines Cooperativ e Foundation has shared with the Davis City council and the Attorney General and the public. No one either at the City or DACHA or any other organization has yet refuted these allegations.
    David Thompson, President, Twin Pines Cooperative Foundation

    October 29, 2011

    To: Davis City Council
    Fr: David Thompson, President of Twin Pines Cooperative Foundation (TPCF)
    Evidence #2 Improper City Staff Role (Foster, Cochran, Garcia) DACHA
    cc: Steve Pinkerton, City Manager; Danielle Foster, City staff and interested parties

    I bring to your attention a sample of incidents that relate to the allegations of the collusion of City staff with DACHA relating to the breaking of nonprofit law, corporations law, AB 1246 and other California laws by a public benefit corporation.

    • Presence of City staff at 16 DACHA meetings (2005-07) with no legal quorum and where various allegations of illegal/improper actions took place.
    • October 12, 2005 DACHA Membership Meeting. Minute’s breakdown of the legality of the meeting. After verification by City staff (Garcia/Foster) a quorum was declared. A review of the minutes, the bylaws and the rent rolls show no legal quorum for the membership meeting. No legal quorum to remove Dallas Kassing as TPCF representative. Only five eligible members at a membership meeting requiring a quorum of ten eligible members. Yet Foster and Garcia as City representatives improperly and incorrectly affirm there is a legal quorum.
    • August 24, 2006. Minute’s breakdown of the legality of the board meeting. There was no legal quorum. The entire meeting was held in Executive session, with a City representative on the board and Foster attending the meeting (but excused parts of meeting). Three apparent instances of self-dealing transactions took place without DACHA following the requirements of the Attorney General for a public benefit corporation. Foster appears to be present when the board discussed a change in the bylaws (affecting Twin Pines Cooperative Foundation). Neither City staff nor the City rep on the board protested the use of executive session and that self dealing transactions should be conducted in open session.
    • November 14, 2007. Minute’s breakdown of the legality of the meeting show there was no legal quorum. Foster/Cochran in attendance when board discusses moving of illegal suspension of bylaws (members behind in carrying charges to be allowed to illegally vote on loan of $4 million from City) to December meeting.

    In the DACHA minutes (over a six year period) there is no reprimand by City staff for there being: ineligible board members, ineligible quorums, massive and continuous delinquencies by board members, self-dealing transactions, discussion of loans to board members, improper meeting notice, breaking of the bylaws, articles of incorporation, not following Davis Stirling Act or loan documents, etc. There will be further submissions on the role of City staff in DACHA. TPCF requests again that due to the participation of City staff in many of the alleged incidents that the City turn over the Dissolution Hearing to either County staff or outside staff managed by the County. There is clearly a conflict of interest present in Davis City staff handling the Dissolution Hearing.

    Attachments Minutes of specified meetings of DACHA.

  5. It appears to be that the following comment came from the City of Davis.

    “UPDATE: It has been called to my attention that the City of Davis actually does have its side of the story online, including quite a few links. The focus is primarily financial and legal, but most germane to my comments on the board is this:

    Neighborhood Partners [was] appointed the initial DACHA Board because there were no DACHA co-op members to serve on the Board until prospective occupants purchased co-op shares. This original non-member DACHA Board contracted with Neighborhood Partners to provide consultant and developer services to the co-op.
    This suggests that Neighborhood Partners’ seat on the board was originally intended to be temporary, as part of a solution to the chicken/egg problem of how to form an elected board to create an organization to create a co-op to attract members to elect the board.
    I’m not privy to the the original bylaws or plans, but hope that someone with inside knowledge might offer their comments below.”

    Would be good to identify when the CIty made this statement?

    Neighbourhood Partners was never appointed to the DACHA board nor ever sat on the board. SO that part is not true at all.

    The initial board in the bylaws was composed of a representative of the Davis School District, UC Davis, Davis Chamber of Commerce, City of Davis and Twin Pines Cooperative Foundation. The resident members of the board would grow as the number of units grew until they were a majority of the board. As the five organizations represented the major employer groups in town the intent was that those five groups would permanently sit on the board and have a voice.

    However, the TPCF rep (Dallas Kassing) a former President of the Davis Food Co-op was removed by a vote of the membership which did not achieve a legal quorum although the City staff improperly affiirmed there was a quorum. A review of the rent rolls show a majority of the members were delinquent and all four resident board members were delinquent and were required to be removed from the board but were not.

    http://www.community.coop/davis click on DACHA

    The DACHA debacle is one long inglorious story of demcracy run amuck and no condemnation from people who know what went on.

    David Thomposn, Twin Pines Cooperative Foundation

  6. coopgeek says:

    David, the update you quoted was from me, not from the city. They are not capable of updating the posts themselves; any words above the “responses” section are from the author of the original post.

    But thanks for correcting that the board seat was actually held by the Twin Pines Foundation and not Neighborhood Partners, and for the additional information about Kassing’s departure from the board.

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