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Monday, 14 March 2016 11:06

Farmers’ Market Process Could Put Council in a Pickle

Written by  Eric Escalante - eric@turlockcitynews.com
Farmers’ Market Process Could Put Council in a Pickle TurlockCityNews.com
Two organizations, Turlock Certified Farmers Market, Inc. and Golden State Farmers’ Market Association, have fine-tuned their arguments for Tuesday’s Special Turlock City Council Meeting, as both are in a contest to manage a farmers’ market in Downtown Turlock.

No matter which organization receives the approval of Turlock City Council, vendors from 2015 will be invited back at the same rates, and the community will have a Turlock farmers’ market.

GSFMA has pointed out that after 6 years of several changes to downtown farmers’ markets, the past organization listed only 9 certified growers, of the 40 plus vendors, proposed for 2016.
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Last year, Turlock City Council received a residential street closure permit request from GSFMA to hold a year-round farmers’ market in the exact place and time as the previous Turlock Certified Farmers Market. In the past, TCFM submitted the one page residential street closure permits.

The request to run a 2016 farmers’ market in Downtown Turlock was submitted by Peter Cipponeri, son of Sebastian Cipponeri who owns Cipponeri Family Farms. Despite the relation, Cipperoni Family Farms has no affiliation with GSFMA. Sebastian Cipponeri has remained neutral in the ongoing RFP process and just wants to continue being a vendor, as he has since the well-known, successful 1990s farmers’ market.

The question of who would run the farmers’ market was determined on a first come and first serve basis at the City of Turlock. With GSFMA submitting the application first under the current City government policy and procedure, there would normally be no contest and GFSMA would have received the residential street closure permit approval needed to run a farmers’ market on public space for the year. However, in response to concerns by TCFM, the organization claiming to have run the farmers’ market for the past 6 years, the City attempted to address what had suddenly become a contest for the market.

TCFM, some of their vendors, and supporters showed up in force for a Special Council Meeting to protest an action item that would approve the Request for Proposal process to resolve the contest between TCFM and GSFMA. The RFP process would result in proposals for market management from TCFM and GSFMA that would be evaluated by City Council.

After multiple speakers and 4 hours of content, Council approved the RFP process by way of a 3-2 vote, with Mayor Gary Soiseth and Councilmembers Amy Bublak and Matthew Jacob approving, and Councilmembers Steven Nascimento and Bill DeHart dissenting.
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A similar reoccurring management contract process was changed to an RFP open bid process shortly after Mayor Soiseth was elected while running on promises of transparency. That was the contract between the City of Turlock and Turlock Chamber of Commerce, who provided the tourism marketing for the City. Later, issues surrounding misuse of funds were brought forward by the City and further issues came from the questioning.

As the farmers’ market process stands now, two proposals are competing for the opportunity to manage the downtown farmers’ market. Arguments made by supporters of TCFM and by several news reports of Turlock Journal and The Modesto Bee state this to be a nonprofit versus for profit battle, despite the facts that both collect revenue and pay for labor. Also, the validity of TCFM’s bid has been marred by the lack of IRS tax documents they are legally required to file annually and the failure to produce a 501(c)(3) non-profit determination letter issued by the IRS.

Even though Turlock Certified Farmers’ Market Board Chair Elizabeth Claes has stated that they are a non-profit in good standing, this documentation has not been provided to support the statement.

In an effort to clarify ambiguities in the TCFM proposal, TurlockCityNews.com attempted to contact the TCFM Board members listed in the RFP bid. Board Members Junko Broadwater, Valeria Jimenez, and Anne Piccirillo declined to comment. Board members Ann Strahm, George Kapor, Jessica Irish, and Brandon Follet were left messages, but did not immediately return the call. Market Manager Derek Griffin stated that he would not comment and referred questions to Board Chair Elizabeth Claes.
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TCFM and GSFMA have submitted their proposals for the Turlock City Council’s consideration on Tuesday evening. Council will be weighing the merits of each proposal based on 7 different evaluation criteria such as the demonstration of services to be performed, experience, personnel experience, references, financial stability, information contained in “response requirements,” and best overall fit.

With Council weighing the criteria in this bid process, consideration must be given to the operator’s financial stability.
The RFP required both bidders to put forth supporting tax documents from at least the past 3 years.

GSFMA’s proposal did not include these documents. When contacted by City Staff, GSFMA noted that they do not have the documents due to the fact the organization was formed in January 2015 and that it hasn’t had to yet pay state or federal taxes. According to the Council agenda synopsis for Tuesday, GSFMA is willing to place $25,000 into an escrow account designated by the City as security for any market claims or debts.

TCFM also had an issue with not providing tax documentation. Although its organization has been said to have ran the farmers’ market for 6 years, they only provided 1 year of tax documentation with their 990-N e-postcard.

It was noted that, after City Staff followed up with the past farmers’ market operator, TCFM was advised by their certified public accountant that they are only required to file once every 3 years. According to the CPA, this requirement was attributed to their good standing. No letter confirming “good standing” from the CPA was provided in the proposal, nor was any other tax documentation.

According to IRS.gov, “Organizations are required to file an annual information return (Form 990, Form 990-EZ or Form 990-PF) or electronic notice (Form 990-N) while their application for exemption is pending. An organization’s exempt status can be automatically revoked while its application is pending if it has not filed a required return or notice for three consecutive tax periods after its formation date.”

In this regard, Claes stated that “…[TCFM] have done everything that we were required to do in regards to our taxes.”
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Upon review of the TCFM application/certificate for Certified Farmers’ Market included in its RFP, TCFM identified itself as a certified producer in 2015, despite representatives of the Turlock Certified Farmers Market identifying it in various media and their own proposal as a non-profit.

Only three different types of applicants are allowed to manage a farmers’ market. These types include certified producers, local government agencies, and nonprofit organizations.

Even though TCFM has identified itself as a 501(c)(3) non-profit, a determination letter from the IRS was not included in their RFP bid.

According to IRS.gov, “If all information received establishes that an organization meets the requirements for exemption, the IRS will issue a determination letter recognizing the organization’s exempt status and providing its public charity classification. This is an important document that should be kept in the organization’s permanent records.”

According to Claes, this document was issued by the IRS, but a physical copy for TCN’s review is currently unavailable. Addressing the matter, Claes noted that she would talk to her Board about making a determination letter available and return contact.
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She states, “In the farmers market industry, getting a 501(c)(3) is incredibly difficult” due to the nature of the farmers market. “You don’t start with the IRS status, that is something that comes later.”

Providing some insight into the process, she noted that the narrative written to the IRS had to address questions such as “What have you been doing, what are you doing now, what do you plan for the future.’” She continued by saying, “You have to have a ‘have you been doing’ to prove that you are a group that functions and operates as a non-profit.”

“When I became Chair of the Board, one of the things I did was all of the things that needed to be done to make us a legal entity even though they functioned as a non-profit. They were doing everything as non-profit. They had their own bank account. They had a treasurer and chair and all the things you would need to do.”

Even with the determination letter for their 501(c)(3) not yet made available, TCFM may lack the validity to be a K20 program in which it has claimed. A K20 agricultural program is an organization that focuses on the development and improvement of food resources or food procurement through information and technical assistance for agricultural establishments and individuals in rural or urban settings. A 501(c)(3) non-profit K20 generates a substantial portion of its income from a government agency or the general public. TCFM’s profit and loss for 2013-2015 saw only 1 direct public grant accounting for $3,000.

As part of their RFP bid credibility to manage the farmers’ market, TCFM has noted that they have “operated Turlock’s downtown market for six years (2010-2015) for the benefit of the community and local farmers.”

However, the statement flies in contrast to their 2016 vendor list. Out of 40 different vendors slated to participate in the farmers’ market, only 9 of those vendors are listed as certified growers. Even more so, only 2-3 certified growers are based in Turlock.
Cipponeri Family Farms, in particular, was not listed as a projected vendor in TCFM’s proposal despite being part of multiple iterations of the farmers’ market since the 1990s. Claes clarified this issue as an “oversight.”

“That is absolutely a working list. The City required that we give a list of vendors,” Claes said. “It is not reflective of who exactly will be at the market.”

In the TCFM proposal, it states that they “intentionally” limit growers so that “growers can get the profits they deserve.” With a portion of the growers being Board Members and the number of growers being limited for local grower profits, the organization might not appear to be serving the charitable purpose as outlined in their bid.
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The downtown farmers’ market generated $18,485 for 2013, $19,466 for 2014, and $24,439 in 2015, as a corporation. Amounts collected for sponsorships included $7,250 in 2013, $9,875 in 2014, and $8,900 in 2015 as a corporation. With a strong majority of its income being derived from private vendors and advertisement instead of a government agency or the general public, TCFM qualification as a K20 501(c)(3) nonprofit could be questioned.

Additionally, despite TCFM’s claim of managing the farmers’ market as nonprofit organization for 6 years, “Turlock Certified Farmers’ Market, Inc.” wasn’t officially formed as a legal organization until Aug. 14, 2014, when Claes filed the corporation.

As a legal organization, “Turlock Certified Farmers’ Market, Inc.” was established in 2014. Despite this, the RFP bid from TCFM actually utilizes a California State University, Stanislaus President’s Honor Roll Community Partner Award recognizing Jeani Ferrari as a founding member of “Turlock Farmers Market” two years before TCFM was incorporated.

In 2010, the street closure request to hold a farmers’ market was submitted by the Turlock Downtown Property Owners Association. "Turlock Farmers Market" was listed as a co-applicant, but this was before "Turlock Certified Farmers Market" was a legal organization.

Without being a legal organization with non-profit status, 2012 and 2013 saw "Turlock Certified Farmers Market" submit the street closure request.
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Since only certified producers, local government agencies, and non-profits are allowed to operate a farmers’ market and TCFM had not yet been established as legal organization, this entails that, if these individuals were operating without one of the listed statuses, they were operating unlawfully according to California state law.

City Staff was close to identifying key issues within TCFM’s proposal by asking questions about their tax documentation and discrepancies in what kind of organization were they been last year, however, TCFM has been allowed to continue its bid without City Staff requiring documentation and questioning its organizations legal history.

Cipponeri’s experience and capabilities have been called into question, as the certified producer started GSFMA over a year ago to begin running and improving farmers’ markets.

Cipponeri’s Turlock Farmers’ Market proposal, to revive a Downtown farmers’ market to a level of the successful 1990s farmers’ market, is not GSFMA’s first or only proposal.
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GSFMA has made proposals to manage the Copperopolis’ “Market at the Square” farmers’ market, Carmel-by-the-Sea Farmers’ Market, and Hughson Farmers’ Market. GSFMA’s proposals were accepted by a Copperopolis developer, and selected and approved to manage the Carmel and Hughson events by a government process, 5-0 vote and 4-0 vote, respectively.

The Turlock City Council will be determining validity of the bids for a Turlock farmers’ market at a Special City Council Meeting starting at 6 p.m. in the Yosemite Room of City Hall, located at 156 S. Broadway.

TurlockCityNews.com will continue to keep requesting annual tax documentation from TCFM, as exempt organizations must make certain returns and applications available for public inspection, and copies usually must be provided immediately in the case of in-person requests, according to the IRS.

Keep checking back for developing coverage involving City of Turlock staff procedures and Council policies.
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Related Articles:

Council Moves Forward With Proposal Process for Turlock Farmers’ Market at Special Saturday Meeting

Council Approves Proposal Process for Farmers’ Market in Downtown Turlock

Turlock Farmers' Market Moves to New Location on Main Street, After Changing Days to Saturday

Turlock Farmers Market Moving to Saturdays

Turlock Farmers Market Continues Through Heat, Family Fun this Friday Night

New Site, Manager, Programs for Turlock Farmers Market

Buy Local, Buy Fresh: Farmers Market Returns to Turlock This Friday

Turlock Certified Farmers' Market Returning to Downtown in May

Evening Farmers Market Celebrating Fall Harvest

Turlock Farmers Market Started by Community Group

Turlock Farmer's Market Committee Seeks Community Input by Friday

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  • Guest - thats it

    theres only 9 certified growers or is that all the farmers

  • Guest - Farmer Mark

    Good Lord, Eric, when did the City News start hiring functional illiterates? And get your hand out of the Boy King's pants; it's embarrassing.

  • Guest - @ Farmer Mark

    Whoa, watch where ya swing that thing, Internet Tough Guy!

  • Guest - Ron Hillberg

    You are repeating the claim that street closures are first come first served. The closure of the street is a discretionary decision of the City Council in commercial zones. Should the Council approve a change it would be sanctioning theft of the goodwill created by the current market.

  • Guest - Turlock politics

    Now that Turlock Farmers Market threw in the towel tonight we will have to boycott Peter's market

  • Guest - Guest Post

    This is an example of the kind of hostility shown by TCFM supporters at the meeting on 9-15-16: https://youtu.be/uTCVNgPsQgo. Throughout this kind of ongoing behavior, the City Council maintained a sterling composure and Peter Cipponeri remained polite, patient, kind and professional. Both parties were given a very gracious offer to work at mediation with an expert farmers market organizer who spoke to both sides last night which TCFM refused while GSFMA was willing to work together to create an even better farmers market. The media has already written a slanted article which does not accurately represent what truly happened last night; perhaps this video will portray the truth in a better light.

  • Guest - Personal Note to Guest- Peter How Dense Are You?

    Soiseth is going downhill fast & will be taking not only Peter Cipponeri, his family's fruit stand but all of Matt Swanson's businesses. It will be a quick ride to hell, where all of you belong. First Soiseth pretends to be in the military, a college professor & he's a Christian, right New Life Christian/Monte Vista Chapel. Now Peter Cipponeri is trying to bully his way into control for the Turlock Farmers Market which makes what 5-7K a year & it usually goes back into the next season's work. How dense are you Peter, you have alienated the majority of Turlock residents/voters, do you really think they will support you & your pretend vendors.

  • Guest - It's always about Soiseth

    After reading Saturday's Turlock Journal, & watching Tuesday's council meeting, I came away enlightened @ our young mayor: it is ALWAYS about him. I went to City Hall last week, where there used to be gorgeous ART, by local artists in our community, there were GIANT photos of "how great thou art" Gary Soiseth, now I understand why he voted against the Turlock Certified Farmers Market board, it's not about HIM. Please boycott Soiseth, Bublak, & Jacobs and the businesses they own/support. Send Soiseth a message! To David Fransen, too.

  • Guest - Guest of a guest named Bob

    So let me get this straight. Turlock city news hasn't published an article since November 2015 and now this one. Can someone say bought and paid for just like the mayor, to bad its not a real news source. Matt Swanson better be careful he's going to spend all of grandpas money! Not to mention the fact his grandfather would not like seeing his family name involved in these dirty politics....

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