State responds to grant withdrawal
From our weekly issue dated January 23, 2008
Unless and until the city of Cave Junction can provide the documentation necessary, the Oregon Economic Community Development Dept. (OECDD) considers the matter of withdrawing a nearly half-million dollar grant closed, even though the city has expended the funds and was expecting repayment. Ann Hanus, a Community Development Division manager for the state who has been closely involved with the Community Development Block Grant (CDBG) situation facing the city, made that clear Thursday, Jan. 24 during a phone interview. "This is not something we wanted to do," said Hanus from her Salem office. She added that because the city was relying on a one-time disbursement of funds the depth of the problem was not made apparent to the state. In other situations she said that a request for funds is made periodically throughout the process and paperwork is checked each time. That way, problems are discovered early and usually can be remedied.
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In the city's situation, construction on the infrastructure for the Siskiyou Community Health Center (SCHC) went forward without the proper documentation to ensure reimbursement. Because some of the documentation must be completed prior to the start of construction, there is no remedy available.
Hanus said that she has been talking with state Rep. Ron Mauer (R-Grants Pass) and Josephine County Commission Chairman Dave Toler, but that at this point she doesn't see a positive outcome.
In the case of the SCHC infrastructure project, the city was attempting to oversee work being performed by a second entity, specifically Copeland Sand & Gravel, of Grants Pass, that involved a third entity, SCHC. The oversight and administration responsibilities taken on by the city appear to have been inadequate, she said.
Mayor Tony Paulson said that during the six months from July 2007 to Jan. 18, '08 -- during which the problems seemed to have developed -- he repeatedly asked City Recorder Jim Polk if the situation was under control. He said that Polk consistently assured him that there were no problems with the grant process. Indications are that these assurances were incorrect.
Polk has been unavailable for comment since Illinois Valley News received a copy of the letter from the state detailing the problems. However, Polk was asked Thursday, Jan. 17 if there were any problems with the grant. He characterized the situation as a simple "paperwork snafu."
He went on to say that a new person had taken over for the state, and that the person was making the situation more difficult than necessary.
Paulson, however, stated that he was informed by the state during a conference call, that included three separate representatives of the Oregon Economic Community Development Division, that the situation had been mismanaged.
Paulson also stated that as he remembers, the environmental assessment that is proving to be a major problem was to be the responsibility of SCHC itself. This assertion, as yet, cannot be confirmed.
Paulson also stated that he believes pressure was brought to bear by certain business interests involved in the project to push ahead with the grant proposal despite his stated concerns.
Information concerning job creation and wages paid by Copeland during the project, a second major issue for the state concerning the withdrawn reimbursement, have not been made available by Copeland, according to Paulson. Because the information about the situation in general was obtained by I.V. News on Saturday, no Copeland officials could be reached during the weekend for comment prior to press deadline.
Other irregularities in the grant process came as a complete surprise to Paulson, who was informed of the situation by state representatives Friday, Jan. 18. He said the state told him that the single-reimbursement upon completion of the project as set up by Polk was highly unusual.
The standard process is to set up a series of reimbursements as a project progresses. This process allows for problems to be addressed as they occur, something not possible in a single-reimbursement system. As a result, the concerns of the state cannot be addressed, as the opportunity for correcting problems is past.
Besides the fallout from the loss of reimbursement, Paulson said that because the city has been banned from applying for any CDBG for a two-year period, grant funds for projects such as the Women's Crisis Center may be in jeopardy as well.
He also said that because the city was expecting the reimbursement and budgeted for it, there may be legal problems facing the city concerning overspending the municipal budget.
For his part, Polk asserts that he's had to work with three different state project managers during the course of the project. He also said Tuesday morning, Jan. 22, that he did file the appropriate paperwork.
Both Paulsen and Polk stated it was too soon to tell what all the consequences might be.
According to all indicators, that liability rests solely with the contracting agency, in this case, the city of Cave Junction.
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