TCDLA Executive Committee Meeting
AGENDA TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION Executive Committee Meeting The Whitehall, Houston, TX Updated (2/28/2022)
Friday, March 11, 2022
5:00 pm – 6:00 pm
Call to Order, Michael C. Gross, President Roll Call Welcome and Introductions Minutes, Michael C. Gross Review and approve minutes from December 3, 2021, TCDLA Executive Committee Meeting held in Round Rock* President’s Comments & Report, Michael C. Gross NACDL NFSC Fundraiser, February 2022 DUIDLA DWI, Austin, February 2022 Grievance Young Update NACDL Waco Expunction and Class C Ticket Clinic Listserve and special prosecutors RQ-0439_KP(Hemp) Disciplinary Rules Update Chief Executive Officer’s Report, Melissa Schank FY21 Audit Report* App Update Staff Update Land Appraisal Update SBOT Foundation – Judge Gonzalez – Police Accountability Database SBOT June and July event exhibits Statewide Indigent Defense Old and New Business Quarterly TCDLA Award, Sarah Roland Facebook/Trademark, David Guinn Recommendation on Investing Reserve Funds, David Guinn Next Meeting: Friday, June 17, 2022 @ 3:15pm Hyatt Regency (Chula Vista), San Antonio, TX Hotel Reservation Deadline: May 24, 2022 President’s Dinner: Wednesday, June 15, 2021, Casa Rio Adjourn*
TCDLA :: 6808 Hill Meadow Drive :: Austin, TX 78736 :: 512.478.2514 p :: 512.469.9107 f :: www.tcdla.com
TCDLA Executive Meeting Minutes Friday, December 3, 2021 Kalahari Conventions & Resort Round Rock, TX
Introduction Michael C. Gross, President, called the meeting to order at 5:00 pm. A quorum was present. Roll Call: P Michael Gross, President P Heather Barbieri, President-Elect P John Hunter Smith P David Guinn, Jr. P Nicole DeBorde Hochglaube P Clay Steadman P Jeep Darnell
A Grant M. Scheiner P Monique Sparks P Paul Tu P Betty Blackwell P David Botsford P David Moore
Key: P = Present; E = Excused Absence; A = Unexcused Absence Staff: Melissa Schank, Rick Wardroup MOTION: Minutes – September 11, 2021 Motion to approve the minutes on September 11, 2021, from the Executive Committee Meeting held in Arlington, TX, made by David Guinn, seconded by David Botsford motion carries. President’s Report, Michael C. Gross • NACDL Voir Dire, February 2022 – we let NACDL know we would not cosponsor due to TCDLA having a Voir Dire, March 2022, they did not respond • DUIDLA DWI, Austin, February 2022 – we have not been approached to cosponsor, discussed upcoming DWI seminars • Adam Kobs will look at By Laws, Melissa will send out current Conflict of Interest Policy to be signed by Board members • TCDLA Support for Pardon/Clemency update was given which had David O’Neil and Bill Habern’s opinion not to join at this time Chief Executive Officer’s Report, Melissa Schank • Mileage Reimbursement - CCA approved for the grant to reimburse $.50 mileage, TCDLA board voted in 2011 to increase to the current mileage rate. MOTION: Mileage Rate increase to $.50 for TCDLA Motion to approve mileage rate increase to $.50 for TCDLA, made by Jeep Darnell, seconded by Heather Barbieri - motion carries. •
Legislative Lobbyists – Legislative Counsel Titles – Shea Place has asked for their titles to be consistent with other associations in Austin and include “Counsel” so that they are recognized as attorneys.
Executive Committee Draft 12.03.21
MOTION: Title change for Legislative Lobbyists to Counsel Motion to approve title change for Legislative Lobbyists to Counsel, made by John Hunter Smith, seconded by Jeep Darnell - motion carries. • Staff Update – We are still pending position request from the court • Building Maintenance Update, someone broke into shed will put bars on it • Search Engine Optimization on Website – it is up and running • TCDLA FY21 End of Year, Grant UB/UPI carryovers & Legislative Budget Update was given • SBOT Update was given • CCA Update was given – new staff • Personnel Manual (Abbot EO GA-40) - Present request to combine sick and vacation time to PTO. A succession plan is created and will be shared at the next meeting. We have staff in place for all positions. MOTION: Convert Sick and Vacation time to PTO and other changes per HR attorney Motion to approve the conversion of Sick and Vacation time to PTO (grandfather those over caps), remove FMLA, funeral leave, remove COVID Mandatory to Vaccine Policy, update definitions for exempt and non-exempt, simplify whistle blower policy made by David Guinn, seconded by Clay Steadman - motion carries. Old Business/New Business • DWI Scholarly Logo, Michael Gross - DWI Committee approved new logo. MOTION: DWI Scholarly Logo Motion to approve the DWI Scholarly Logo, made by XX, seconded by XX - motion carries. • Quarterly TCDLA Award, Sarah Roland • Facebook/Trademark, David Guinn • Recommendation on Investing Reserve Funds, David Guinn •
Next Meeting: Saturday, March 12, 2022, Whitehall, Houston, TX Board Dinner: Friday, March 11, 2021, Guard & Grace
Meeting adjourned at 6:05 pm made by Michael Gross, seconded by Jeep Darnell.
Respectfully submitted, Clay Steadman TCDLA Secretary
Executive Committee Draft 12.03.21
Officers President Michael Gross, San Antonio President-Elect Heather Barbieri, Plano 1st Vice President John Hunter Smith, Sherman 2nd Vice President David Guinn, Lubbock Treasurer Nicole DeBorde Hochglaube, Houston Secretary Clay Steadman, Kerrville Editor, Voice for the Defense Jeep Darnell, El Paso Editor, Significant Decisions Report Kyle Therrian, McKinney Immediate Past President Grant M. Scheiner, Houston Chief Executive Officer Melissa J. Schank, Austin Directors David Adler, Bellaire Matthew Allen, San Antonio Stephanie Alvarado, Dallas Gene Anthes, Austin Phil Baker, La Grange Clint Broden, Dallas Kristin Brown, Dallas Anne Burnham, San Antonio Jessica Canter, Seguin Omar Carmona, El Paso Allison Clayton, Lubbock Angelica Cogliano, Austin Elizabeth Cortright, Haltom City Clifford Duke, Dallas Danny Easterling, Houston Amber Farrelly, Austin Tyler Flood, Houston Rick Flores, Austin Robert Gill, Fort Worth Lisa Greenberg, Corpus Christi Mark Griffith, Waxahachie Rusty Gunter, Lubbock Paul Harrell, Gatesville Amanda Hernandez, San Antonio Joseph Hoelscher, San Antonio John T. Hunter, San Antonio Jonathan Hyatt, Longview Jolissa Jones, Houston Thuy Le, Houston Sean David Levinson, Austin Allison Mathis, Houston Dwight McDonald, Lubbock Nathan Miller, Denton Dustin Nimz, Wichita Falls Patrick O’Fiel, Kerrville Michelle Ochoa, Beeville Damon Parrish, Houston Scott Pawgan, San Antonio Shane Phelps, Bryan Brian Raymond, San Angelo Carmen Roe, Houston Sarah Roland, Denton Rick Russwurm, Dumas Suzanne Spencer, Austin Joe Stephens, Boerne Stephanie Stevens, San Antonio Patty Tress, Denton Paul Tu, Sugar Land Chad Van Brunt, San Antonio Amber Vazquez, Austin Gregory Waldron, Longview Judson Woodley, Comanche Thomas Wynne, Dallas Jennifer Zarka, San Antonio
TCDLA founded in 1971
February 25, 2022 Via email to: dalcdcresponses@texasbar.com Elena Wolfe, Investigator Office of the Chief Disciplinary Counsel State Bar of Texas The Princeton Building 14651 Dallas Parkway, Suite 925 Dallas, Texas 75254 Re:
202200643 (Heather Jean Barbieri—Gary D. Young)
Dear Ms. Wolfe: This reply provides further explanation and information as to why this grievance is not barred by limitations. The Grievance is not Barred by Limitations As will be shown, the intent of Rule 3.09(d) is clear and obvious – a defendant is accorded procedural justice and a fair trial only when the prosecutor provides all favorable and/or material evidence relevant to the case. Because Mr. Young did not do that in this case, Texas Rule of Disciplinary Procedure 17.06(A) applies. Rule 3.09(d) of the Texas Disciplinary Rules of Professional Conduct has the same force and effect as any statute enacted by the legislature; meaning they must be interpreted in accordance with the rules of statutory construction. Comm'n for Lawyer Discipline v. Hanna, 513 S.W.3d 175, 178 (Tex. App.—Houston [14th Dist.] 2016, no pet.). To interpret Rule 3.09(d), “the primary goal is to determine and give effect to the drafters’ intent; when possible … discern[ing] that intent from the plain meaning of the words used.” Id. That intent is determined by understanding the codification of Rule 3.09, examining the entirety of Rule 3.09, including the comments, and examining the preamble to the Disciplinary Rules. Id. at 178-180. First, Rule 3.09(d) is a codification of the holding in Brady. Morales v. State, 2020 WL 6882730, at *6 (Tex. App.—El Paso Nov. 13, 2020, pet. ref’d). In Brady, the Court held, “the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecutor.” 373 U.S. at 87. The Texas Court
6808 Hill Meadow Drive | Austin, TX 78736 | (512) 478-2514 p | (512) 469-9107 f | www.tcdla.com
of Criminal Appeals has defined favorable evidence as “any evidence that, if disclosed and used effectively, may make a difference between conviction and acquittal and includes both exculpatory and impeachment evidence. Harm v. State, 183 S.W.3d 403, 408 (Tex. Crim. App. 2006). Exculpatory evidence is that which justifies, excuses, or clears the defendant, whereas impeachment evidence disputes or contradicts other evidence. Id. Second, the holding in Brady provides further understanding to the comments in Rule 3.09(d) regarding the source and scope of a prosecutor’s obligations. The first comment begins by proclaiming that a prosecutor’s responsibility is to ensure that justice is done, and to not merely be an advocate. Tex. Disciplinary Rules of Prof’l Conduct R. 3.09 cmt. 1. This responsibility requires a prosecutor to adhere to several specific obligations, including “to see that the defendant is accorded procedural justice, that the defendant’s guilt is decided upon the basis of sufficient evidence, and that any sentence imposed is based on all unprivileged information known to the prosecutor.” Id. Finally, the intent of Rule 3.09(d) is further informed by “laws defining specific obligations of lawyers and substantive and procedural law in general.” Hanna, 513 S.W.3d at 184 quoting Tex. Disciplinary Rules of Prof’l Conduct preamble ¶ 11. One such law that defines the specific obligations of prosecutors is the Michael Morton Act as codified in Article 39.14 of the Texas Code of Criminal Procedure, which requires prosecutors to provide the defendant with all material evidence in the possession of the state. The Texas Court of Criminal Appeals has explained that to determine whether evidence is material, it “need only have a persuasive effect on any subsidiary issue for which it is being considered” and should not “be judged solely in relation to its consequential effect on the ultimate issues of guilt or punishment.” Watkins v. State, 619 S.W.3d 265, 280 (Tex. Crim. App. 2021), reh'g denied (Apr. 14, 2021). As such, evidence is material if it has a “logical connection to a fact of consequence to any number of subsidiary issues rather than to the outcome itself.” Argument The defense billing records in this case are favorable and/or material evidence that should have been provided to the defense. The surreptitious way that Mr. Young gained possession of the records is not the only misconduct he committed in this case. After gaining possession of the records, Mr. Young then failed to provide copies to defense counsel as required by law. It appears he did so for the strategic purpose of using them in a manner that would have the most damaging result. Mr. Young used the records during his direct examination of Ashley Morrison’s mother to create a false impression with the jury that Ashley wrote a letter admitting her involvement, defense counsel retrieved the letter, and then hid or destroyed it. And while his 6808 Hill Meadow Drive | Austin, TX 78736 | (512) 478-2514 p | (512) 469-9107 f | www.tcdla.com
response to the grievance tries to frame his misconduct as making a reasonable inference from the evidence, Mr. Young’s own statements and questions during trial prove that was not the case. See Trial Transcript pg. 99/4-13; 103/25 – 104/2. But the fact remains, had Mr. Young disclosed the records as required, defense counsel would have been able to file a motion to prevent their use, provide Ashley’s letters as proof, or simply explain the entries. Defense counsel could have also prepared for their use if they were to be used during trial. But that would have negated the impact Mr. Young wanted. As such, it is undeniable that the records constitute favorable and/or material evidence that undeniably had a “persuasive effect” on issues at trial and could have made the “difference between conviction and acquittal.” Closing Mr. Young’s failure to provide copies of the records demonstrates the intent behind Rule 3.09(d), Brady, and Article 39.14 – to prevent this type of misconduct. And Texas Rule of Disciplinary Procedure 17.06(A) was enacted to ensure such misconduct does not go unpunished. Consequently, this grievance is not barred by limitations and the facts and circumstances of this matter must be investigated, considered, and punished. Respectfully,
Lance Evans, Prosecutorial Conduct Committee Co-Chair Texas Criminal Defense Lawyer’s Association 6808 Hill Meadow Drive Austin, TX 78736
6808 Hill Meadow Drive | Austin, TX 78736 | (512) 478-2514 p | (512) 469-9107 f | www.tcdla.com
November 9, 2021 The Honorable Brett W. Ligon Montgomery County District Attorney 207 West Phillips, 2nd Floor Conroe, Texas 77301-2824 Re:
Via E-Mail
Authority to prosecute individuals for the possession and sale of delta-8 tetrahydrocannabinol products derived from hemp (RQ-0439-KP)
Dear Mr. Ligon: We received your request for an attorney general opinion and have designated it as Request No. 0439-KP. Section 402.042 of the Government Code provides that the Attorney General shall issue an opinion not later than the 180th day after the date that an opinion request is received, unless before that deadline the Attorney General notifies the requesting person in writing that the opinion will be delayed. TEX. GOV’T CODE § 402.042(c)(2). We received your request on November 5, 2021, setting a due date for your opinion of May 4, 2022. By copy of this letter we are notifying those listed below of your request and inviting them to submit briefing on your questions if they have a special interest or expertise in the subject matter. The Office of the Attorney General accepts briefing from any interested party. If you are aware of other individuals or entities with an interest in this issue, please forward this invitation for briefing to them or let us know, so that we may notify them as soon as possible. We ask that the briefs be submitted by December 9, 2021, to ensure that this office will have adequate time to review and consider arguments relevant to the request from all interested parties. Briefs may be submitted by e-mail to opinion.committee@oag.texas.gov. Please note that briefs and other correspondence are subject to the Public Information Act. If you have any questions, please do not hesitate to contact me. Sincerely, Virginia K. Hoelscher Chair, Opinion Committee VKH/som
P os t Of fic e Box 12548 , Aust in, Texa s 7 8 7 1 1 - 2 5 4 8 • ( 5 1 2 ) 4 6 3 - 2 1 0 0 • www. texa satto r neyg eneral .gov
The Honorable Brett W. Ligon – Page 2
Attachment: cc:
Request No. 0439-KP
The Honorable Greg Abbott, Governor of Texas Mr. Luis Saenz, Chief of Staff, Office of the Governor Mr. James Sullivan, General Counsel, Office of the Governor John Hellerstedt, M.D., Commissioner, Texas Department of State Health Services Ms. Barbara Klein, General Counsel, Texas Department of State Health Services Mr. Charley Wilkison, Executive Director, Combined Law Enforcement Associations of Texas, Inc. Mr. Robert Leonard, General Counsel, Combined Law Enforcement Associations of Texas, Inc. Ms. Elizabeth Nichols, Chairman of the Board, Texas Cannabis Industry Association Mr. Robert Kepple, Executive Director, Texas District & County Attorneys Association Ms. Diane Burch Beckham, Staff Senior Counsel, Texas District & County Attorneys Association Ms. Melissa J. Schank, CEO, Texas Criminal Defense Lawyers Association Ms. Susan Hays, Counsel, Texas Hemp Growers Association
By Opinion Committee at 4:24 pm, Nov 05, 2021
RQ-0439-KP
FILE# ML-49051-21 I.D.# 49051
Montemayor Britton Bender PC CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Management Texas Criminal Defense Lawyers Association COMMUNICATIONS WITH THOSE CHARGED WITH GOVERNANCE We have audited the financial statements of the Texas Criminal Defense Lawyers Association (the Association) for the year ended 31 August 2021, and have issued our report thereon dated 10 February 2022. Professional standards require that we provide you with information about our responsibilities under generally accepting auditing standards, as well as certain information related to the planned scope and timing of our audit in our engagement letter to you dated 24 August 2021. Professional standards also require that we communicate to you the following information related to our audit. Our Responsibility under U.S. Generally Accepted Auditing Standards As stated in our engagement letter, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. Because an audit is designed to provide reasonable, but not absolute, assurance and because we did not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. Additionally, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. Accounting Policies Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Association are described in Note 2 to the financial statements. As described in Note 9, the Association changed accounting policies related to its financial statement presentation by adopting Accounting Standards Update (ASU) 2014-09, Revenue From Contracts with Customers (Topic 606), in the year ended 31 August 2021. Accordingly, the accounting change has been applied using the modified prospective basis for current and future periods. We noted no transactions entered into by the Association during the period for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. 2110 BOCA RATON DRIVE BUILDING B, SUITE 102 AUSTIN, TEXAS 78747 PHONE: 512.442.0380 FAX: 512.442.0817
www.montemayor.team
Board of Directors and Management Texas Criminal Defense Lawyers Association Communications with Those Charged with Governance Page 2 Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: 1.
Management’s estimate of the useful lived of fixed assets is based on general knowledge of the assets involved and customary lives used by other organizations with similar assets. We evaluated the key factors and assumptions used to develop the estimated useful lives of fixed assets (and related accumulated depreciation) in determining that they are reasonable in relation to the financial statements taken as a whole.
2.
Management’s estimate of the functional allocation of expenses is based on estimates of time spent by staff on various functional activities. We evaluated the key factors and assumptions used to develop the allocation of functional expenses in determining that they are reasonable in relation to the financial statements taken as a whole.
Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Uncorrected Misstatements Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements take as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Board of Directors and Management Texas Criminal Defense Lawyers Association Communications with Those Charged with Governance Page 3 Management Representations We have requested certain representations from management that are included in the management representation letter dated 10 February 2022. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Association’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Association’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the Board of Directors and management of the Association and is not intended to be, and should not be, used by anyone other than these specified parties.
10 February 2022 Austin, Texas
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION UNCORRECTED MISSTATEMENTS 31 AUGUST 2021 ACCOUNT Payroll
DEBIT $2,724
Accrued liabilities
Cash Due to state (unclaimed checks)
CREDIT
$2,724
$3,489 $3,489
Montemayor Britton Bender PC CERTIFIED PUBLIC ACCOUNTANTS
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION INDEPENDENT AUDITOR’S REPORT AND FINANCIAL STATEMENTS 31 AUGUST 2021
Montemayor Britton Bender PC CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR’S REPORT Board of Directors and Management Texas Criminal Defense Lawyers Association We have audited the accompanying financial statements of Texas Criminal Defense Lawyers Association (Association), which comprise the statement of financial position as of 31 August 2021, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Association’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Association as of 31 August 2021, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. 2110 BOCA RATON DRIVE BUILDING B, SUITE 102 AUSTIN, TEXAS 78747 PHONE: 512.442.0380 FAX: 512.442.0817
www.montemayor.team
Correction of Error As discussed in Note 11 to the financial statements, certain errors resulted in the understatement of amounts previously reported for deferred membership revenue as of and for the year ended 31 August 2020. Accordingly, amounts recorded for deferred membership revenue have been restated in the 2020 financial statements, and an adjustment has been made to net assets as of 31 August 2020. Our opinion is not modified with respect to this matter.
10 February 2022 Austin, Texas
2
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION STATEMENT OF FINANCIAL POSITION 31 AUGUST 2021 ASSETS Current Cash
$1,519,406
Prepaid expenses and other
49,728
Inventory
12,738 1,581,872
Restricted cash
1,360,615
Property and equipment
744,926 $3,687,413 LIABILITIES AND NET ASSETS
Current liabilities Accounts payable
$382,210
Payroll liabilities
84,882
Deferred revenue
318,017
Grant advance Current portion of note payable
1,098,867 90,871 1,974,847
Note payable, net of current portion
78,287 2,053,134
Net assets without donor restrictions
1,634,279 $3,687,413
The accompanying notes are an integral part of this financial statement presentation. 3
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION STATEMENT OF ACTIVITIES YEAR ENDED 31 AUGUST 2021 REVENUE Texas Court of Criminal Appeals grants
$1,443,128
Seminar registration fees
722,867
Membership dues
484,922
Proceeds from eminent domain land transfer
77,127
Publication sales, net of cost of goods sold of $12,424
66,376
Other
141,592 2,936,012
EXPENSES Program services Administrative
1,973,154 484,610 2,457,764
CHANGE IN NET ASSETS WITHOUT DONOR RESTRICTIONS BEGINNING NET ASSETS WITHOUT DONOR RESTRICTIONS, RESTATED ENDING NET ASSETS WITHOUT DONOR RESTRICTIONS
The accompanying notes are an integral part of this financial statement presentation. 4
478,248 1,156,031 $1,634,279
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION STATEMENT OF CASH FLOWS YEAR ENDED 31 AUGUST 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets
$478,248
Depreciation expense
39,081
Change in inventory
9,794
Change in grant advance
295,993
Change in prepaid expenses and other
(20,822)
Change in accounts payable
239,094
Change in payroll liabilities
7,752
Change in deferred revenue
47,658 1,096,798
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment
(21,451)
CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on note payable NET CHANGE IN CASH AND RESTRICTED CASH BEGINNING CASH AND RESTRICTED CASH ENDING CASH AND RESTRICTED CASH
Cash paid for interest
The accompanying notes are an integral part of this financial statement presentation. 5
(88,285) 987,062 1,892,959 $2,880,021
$6,261
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 1:
ORGANIZATION Texas Criminal Defense Lawyers Association (the Association), a non-profit corporation, was established under the laws of the state of Texas on 12 August 1971. The Association’s membership consists of attorneys whose practice includes criminal defense law. Their mission is to protect and insure by rule of law those individual rights guaranteed by the Texas and Federal Constitutions in criminal cases, to resist the constant efforts which are now being made to curtail such rights, to encourage cooperation among lawyers through educational programs and other assistance, and through such cooperation, education and assistance to promote justice and the common good. The corporate headquarters is located in Austin, Texas. The Association is supported primarily through membership dues, seminar registration fees, and grants from the Texas Court of Criminal Appeals (CCA).
NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Association are prepared on the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when incurred. FINANCIAL STATEMENT PRESENTATION Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of the Association and changes therein are classified and reported as follows: Net Assets Without Donor Restrictions: Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions. Net Assets With Donor Restrictions: Net assets subject to donor (or certain grantor) imposed restrictions. Some donor imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor imposed restrictions are released when a restriction expires, that is when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. INVENTORY Inventory consists of books and general merchandise held for resale. Inventory is stated at cost using the first-in, first-out method.
6
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY AND EQUIPMENT Property and equipment are recorded at cost. All donated assets are recorded at fair market value at the date of donation. Depreciation is based on the estimated useful life of the assets using the straight-line method of depreciation. Property and equipment costing more than $1,000 and having a useful life of one year or more are capitalized. CONTRIBUTIONS Contributions received are recorded as with or without donor restriction depending on the existence and/or nature of any donor restrictions. When a restriction is satisfied, with donor restricted net assets are reclassified to net assets without donor restrictions. FEDERAL INCOME TAXES The Association has obtained exempt status for Federal income tax purposes under Internal Revenue Code Section 501(c)(6). Contributions to the Association qualify for deduction under IRC Section 170(b)(1)(A)(vi). The Association is required to pay Federal income tax on its unrelated business taxable income. Unrelated business taxable income consists primarily of advertising income from the Association’s newsletter. For the period ended 31 August 2021, the Association did not incur a tax liability for unrelated business income tax. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. FUNCTIONAL EXPENSES The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, some expenses require allocation on a reasonable basis that is consistently applied. The expenses that are allocated include payroll and taxes, insurance, governance, retirement, other expenses, professional fees, postage and shipping, office supplies, property tax, rent, utilities, and depreciation which are allocated based on estimates of time and effort by personnel.
7
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 2:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUPPORT AND REVENUE The Association receives grant funds from CCA. A grant is considered to be an exchange transaction. Accordingly, grant revenue is recognized when earned, and grant expenses are recognized when incurred. Grant advances are recorded as deferred revenue. Program revenue is generated from membership dues and seminar registration fees. Dues and registration fees are recorded by the Association as income when earned. SUBSEQUENT EVENTS The Association has evaluated subsequent events as of the date of the Independent Auditor’s Report, the date the financial statements were available to be issued.
NOTE 3:
PROPERTY AND EQUIPMENT Land
$146,616
Building
721,532
Machinery and equipment
228,098
Software
60,187
Office furniture and fixtures
16,389
Accumulated depreciation
(427,896) $744,926
NOTE 4:
CONCENTRATIONS During the year ended 31 August 2021, 49% of total revenue was received from one funding source, CCA, and 25% was received from seminar registration fees. Cash at year end was in excess of the FDIC coverage by $2,709,652.
NOTE 5:
COMMITMENTS AND CONTINGENCIES As of 31 August 2021, the Association has entered into agreements for seminars and events through 2025. The minimum amount due if the events were cancelled would be $509,744 at 31 August 2021. CCA has not audited 2021 grant expenses. CCA could potentially request reimbursement for disallowed expenses. Each year CCA audits grant expenses. Any disallowed expenses are required to be paid back to CCA.
8
TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 6:
EMPLOYEE BENEFIT PLAN As of 1 September 1991, the Association adopted a profit sharing plan in accordance with the Internal Revenue Code Section 401(k). Effective 1 January 2009 the plan is referred to as a "safe harbor 401(k) plan." In order to maintain "safe harbor" status, the Association may make a contribution equal to 3% of employee’s compensation. Additionally, the Association can make additional contributions equal to 6.5% of employee’s compensation for all employees meeting age and length of service requirements. Plan contributions incurred by the Association during the year ended 31 August 2021 were $72,618.
NOTE 7:
NOTE PAYABLE At 31 August 2021, the Association had a note payable with an outstanding balance of $169,158 due to the Texas Criminal Defense Lawyers Educational Institute, a related party, with a fixed interest rate of 2.89%. Payments of $7,879 are due monthly until 2023, when the principal will be repaid in full. The loan is collateralized by the building and land. Maturities of long-term debt are as follows for years ended 31 August: 2022
$90,871
2023
78,287 $169,158
NOTE 8:
RESTRICTED CASH Cash is required to be held in separate accounts for each grant. This cash is restricted for grant purposes only. The total amount of restricted cash as of 31 August 2021 is $1,360,615.
NOTE 9:
CHANGE IN ACCOUNTING PRINCIPLE In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)". The ASU and all subsequently issued clarifying ASUs replaced most existing revenue recognition guidance in U.S. GAAP. The ASU also required expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Association adopted the new standard effective 1 September 2020. The Association has implemented ASU 2014-09 and has adjusted the presentation in these financial statements accordingly. ASU 2014-09 was applied using the modified prospective basis starting 1 September 2020.
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TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 10: LIQUIDITY AND AVAILABILITY Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year from the statement of financial position date, comprise the following: Cash
$2,880,021
Less: cash restricted for grant purposes
(1,360,615) $1,519,406
As a part of the Association’s liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. The policy is that monthly revenues are to cover monthly expenses. Monthly revenues and expenditures are deposited in and deducted from the Association’s operating accounts. Several of the Association’s cash accounts are restricted for grant purposes. Restricted cash is not available for general expenditures. NOTE 11: PRIOR PERIOD ADJUSTMENT 31 August 2020, membership revenue was overstated by $226,103 and net assets was overstated by the same amount due to improper recognition of membership revenue, which was recorded at the time the membership was paid and not over the life of the membership, as it is earned. A prior period adjustment was recorded to correct beginning net assets. NOTE 12: REVENUE FROM CONTRACTS WITH CUSTOMERS The following table disaggregates the Association’s revenue based on the timing of satisfaction of performance obligations for the year ended 31 August 2021: Performance obligations satisfied at a point in time
$856,270
Performance obligations satisfied over time
$484,922
Revenue recognized at a point of time include publication sales, seminar registration fees, sponsorships, and exhibit fees for events, which are recognized when control of the product or services transfers to the customer in an amount that reflects the consideration the Association expects to be entitled to in exchange for the service. Typically, control is deemed to transfer at the date at which the customer received the benefit from the event. Revenue recognized over time consists of membership dues, which are recognized over the membership period as services are provided.
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TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 12: REVENUE FROM CONTRACTS WITH CUSTOMERS CONTRACT BALANCES Contract liabilities consist of the Association’s obligation to hold events for customers for which consideration is received in advance of the event, and provide membership services. These amounts are included in deferred revenue in the statement of financial position. Balances of contract liabilities at 31 August were as follows: 2020
2021
Deferred event revenue
$41,777
$73,221
Deferred membership revenue
$226,103
$244,796
PERFORMANCE OBLIGATIONS Revenue related to membership dues is recognized as services are provided to members over the membership period. With respect to seminars and events and publication sales, revenue is recognized when the event, expenses incurred, or sale has occurred or the service has been performed, in an amount that reflects the consideration the Association expects to be entitled to for the exchange. Payment is typically due upon completion of the services. Transaction prices vary depending the nature of the event, expense, or sale provided. In general, revenue does not have a significant financing component because payment terms are relatively short. NOTE 13: FUNCTIONAL EXPENSES See next page.
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TEXAS CRIMINAL DEFENSE LAWYERS ASSOCIATION NOTES TO FINANCIAL STATEMENTS NOTE 13: FUNCTIONAL EXPENSES Program services Payroll and taxes
Administrative
Total
$677,527
$225,842
$903,369
Seminar
511,712
0
511,712
Membership
224,793
0
224,793
Insurance
154,210
51,404
205,614
Professional fees
80,270
26,757
107,027
Retirement
54,815
18,272
73,087
Office supplies
50,747
16,916
67,663
Bank service charges
0
66,133
66,133
Postage and shipping
34,122
11,374
45,496
Property tax
30,414
10,138
40,552
Depreciation
29,311
9,770
39,081
Governance
18,548
6,183
24,731
Rent
12,004
4,002
16,006
Utilities
10,017
3,339
13,356
Interest
0
6,261
6,261
84,664
28,219
112,883
$1,973,154
$484,610
$2,457,764
Other
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From: To: Cc: Subject: Date:
Kent Sick mschank@tcdla.com Melissa Puntenney RE: State v. TCDLA condemnation litigation; new report from State Wednesday, February 23, 2022 9:48:53 AM
Good morning, Melissa. I enjoyed speaking with you this morning, and am following up with this email. In short, no TCDLA does not have to accept the State’s opinion of value, which is the $192,000. That number is now TCDLA’s downside if we go to trial. Before the State updated their appraiser’s report, TCDLA’s downside was $152,000, so it has improved by $40,000. Our number still is Mr. Bolton’s opinion of $500,000, and that is our upside; the current goal is to get the State to agree to settle at a mediation for something more than the $275,000 TCDLA was awarded at the Special Commissioners Hearing without TCDLA having to expend any additional resources on doing a trial. Please give me a ring if you want to discuss it further. I will be in touch after I visit with the State’s lawyer concerning a potential mediation. Sincerely,
Kent A. Sick Law Offices of Kent Alan Sick 1114 Lost Creek Blvd, Suite 310 Austin, Texas 78746 512-970-0485 mobile 512-472-8022 office 888-774-1322 fax kent@kentsick.com CONFIDENTIALITY NOTICE: The information contained in this transmission may be (1) subject to the Attorney-Client Privilege, (2) attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you are notified that you may not disclose, print, copy or disseminate this information. If you have received this transmission in error, please reply and notify the sender (only) and delete the message. Unauthorized interception of this e-mail may be a violation of criminal law.
From: mschank@tcdla.com <mschank@tcdla.com> Sent: Tuesday, February 22, 2022 6:50 PM To: Kent Sick <Kent@kentsick.com> Cc: Melissa Puntenney <melissap@kentsick.com>
Subject: RE: State v. TCDLA condemnation litigation; new report from State Just so I am clear since we declined the $275 we have to take what they offer which was originally $152 and now $192. Just want to make sure I am clear. Hope yall have a great week.
Melissa J. Schank, CAE TCDLA, Chief Executive Officer
From: Kent Sick <Kent@kentsick.com> Sent: Monday, February 21, 2022 9:52 AM To: Melissa Schank <mschank@tcdla.com> Cc: Melissa Puntenney <melissap@kentsick.com> Subject: State v. TCDLA condemnation litigation; new report from State Melissa – Last week, the State’s new attorney and I exchanged expert witness reports as per our agreement. In review, the State’s original appraisal position was $152,317. TCDLA’s appraiser David Bolton’s opinion of recommended compensation is $500,000, and the Special Commissioners awarded $275,000. You may recall the State fired its original appraiser and retained a new expert to perform an appraisal as of the date of valuation (June 2020). I was apprehensive this new appraiser might not opine that TCDLA’s property was damaged as a result of the taking, since the State’s original appraiser had found damages and she and Bolton disagreed only largely as to the extent of those damages. This would have had the effect of increasing TCDLA’s risk considerably since if we go to trial we would then have to first prove that the property was damaged at all, and then argue about the amount of the damages. However, the State’s new appraisal actually recommends more compensation than the State originally offered: $192,012. While it is not as much as the Commissioners Award or as much as I believe TCDLA can ultimately obtain through mediation or a trial, it is definitely a step in the right direction and improves the case from TCDLA’s standpoint. Essentially, the State’s new appraiser Brad Bujan concedes the property is not as desirable after the taking as it was before, and opines the building improvements are damaged about 10%. His overall estimate of “damages” (the reduction in value of TCDLA’s remaining property caused by the taking) is $101,054. I have attached the State’s new appraisal, if you want to circulate it to the Board. I will be in touch soon about next steps; I am going to request a mediation setting with our opponent. Sincerely, Kent A. Sick
Law Offices of Kent Alan Sick 1114 Lost Creek Blvd, Suite 310 Austin, Texas 78746 512-970-0485 mobile 512-472-8022 office 888-774-1322 fax kent@kentsick.com CONFIDENTIALITY NOTICE: The information contained in this transmission may be (1) subject to the Attorney-Client Privilege, (2) attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you are notified that you may not disclose, print, copy or disseminate this information. If you have received this transmission in error, please reply and notify the sender (only) and delete the message. Unauthorized interception of this e-mail may be a violation of criminal law.