Reston Association Issues Statement on Return of $1.3 Million PPP Loan

Reston Association’s Board of Directors is improving gaps around financial decision-making due to its acceptance of a $1.3 million Paycheck Protection Program loan that it did not qualify for several months ago.

Some RA members criticized CEO Hank Lynch for pursuing the PPP loan in late March without consulting the Board of Directors in a formal meeting. RA President Julie Bitzer, board members, general counsel, and RA’s Principal Financial Officer were consulted prior to making the decision. The funds were returned on May 14 with no legal penalties or financial costs.

In a July 23 statement, Bitzer said the process indicated there is a “substantial gap in our governing instruments.”

“Specifically, formal controls on the manner in which RA may obtain unsecured loans do not exist,” she wrote in the board-authorized statement.

She also noted that staff and board officers made “assumptions and errors” in the rush to protect RA’s financial stability in response to COVID-19, adding that the majority of the board does not believe Lynch acted with ill intent or exceeded his authority.

In May, Reston Association declined to release information about the amount of the loan to Reston Now. The issue was first publicly raised during a May board meeting when Lynch briefed the board on why the loan was returned.

Nonetheless, RA passed several motions to close gaps in decision-making and improve overall coordination this month:

Move to direct the CEO to present to the FiscalCommittee all current unsecured loans previously entered into for their review and to direct the FiscalCommitteeto provide its review and recommendations on those loans to the Board at the September 2020 regular full Board meeting.

Move to direct that the BOD and CEO establish a periodic review of our business processes and controls to continue to refine our operations.

Move to instruct the Fiscal Committee and Board Governance Committee toreview and provide draft amendments to Staff’s draft revisions of Assessmentand Finance Resolution 10:Budget Amendments to clarify what constitutes amaterial change to the biennial budget that will require action by the Board ofDirectors. The BOD asks that it be presented Resolution 10 draft amendments on or before its November2020full BOD meeting for their consideration and action

In late June, the board also directed the CEO and staff to take no action on obtaining more loans — whether secured or unsecured — without board approval.

Bitzer also noted that Lynch’s decision to cancel summer programs qualified as a public health decision, not a budgetary decision. The decision was critiqued by some members who asserted that the change was a budget amendment, which only the board is authorized to complete.

Few, if any, organizations were fully prepared for the COVID-19 pandemic, and RestonAssociation was no exception. Organizations had to respond to the crisis, initially at least, with the resources they had on hand and then quickly assemble additional resources to deal with both obvious and also not-so-obvious potential challenges to the organization’s functioning and, for some, their very existence,” Bitzer wrote. 

Photo via YouTube

Recent Stories

A home-based golf instruction facility is planned in Great Falls (image via Google Maps). A home-based golf instruction facility is coming soon to a half-acre of land on 1051 Kelso…

Live Fairfax is a bi-weekly column exploring Fairfax County. This recurring column is sponsored and written by Sharmane Medaris of McEnearney Associates. Questions? Reach Sharmane at 813-504-4479. Spring is a magical time in…

Reston Association (staff photo by Jay Westcott) New members of Reston Association’s Board of Directors officially took over following the first board meeting after the election. The new board formally…

Morning Notes

Morning at The Boro in Tysons (staff photo by Angela Woolsey) County Sues Owners of Burned Annandale Buildings — “Fairfax County has filed suit against the owners of the buildings…


Subscribe to our mailing list