Illinois Valley News

An $85,000 economic development grant allocated last year by the Josephine County Board of Commissioners to spur the growth of biofuels continues to cause criticism and consternation.

The grant was disbursed to Josephine Soil & Water Conservation District (JSWCD), which distributed part of the funds to the Eugene-based firm, Northwest Seed Crushers. It since has filed for bankruptcy, and the possibility of litigation between it and JSWCD has been discussed.

As the issue has unfolded, the county commissioners are being pressured by some citizens to provide more documentation as to how the grant money was spent. Commissioner Dave Toler, an Illinois Valley resident seeking a second term in office, also has come under fire for the grant allocation.

But as the political rhetoric ratchets up before the November general election, Toler continues to defend the biofuels grant and the initial intentions behind it.

The county board responded to requests by citizens for action by writing a letter, dated Tuesday, July 27, to Randi Omiev-Tatum, JSWCD district manager. The letter was signed by Toler and fellow commissioners Dwight Ellis and Sandi Cassanelli.

It states that on Jan. 29, Rosemary DeLashmutt, county chief financial officer, received quarterly reports for 2009 relating to the economic development grant.

“Those reports showed that $40,360 of the $85,000 grant had not yet been expended,“ the letter states.

Additional information was requested by the county as to “specific expenditures of grant funds,“ the letter states. Compliance with that request apparently has been complicated by legal issues.

“In your letter of February 9, 2010, you advise that because of the risk of litigation more information would be unavailable at that time,“ the letter states. “Please provide an accounting of the specific expenditures of the grant funds. We request that you refund to Josephine County any remaining unexpended funds from the grant.“

The drafting of the letter came after a series of exchanges during the commission“s Wednesday, July 21 weekly business session at Anne G. Basker Auditorium in Grants Pass.

During part of the meeting set aside for comments from citizens, Southern Oregon Resource Alliance (SORA) Chairman Jim Frick announced his intention to file a public records request for information regarding the grant and all pertinent documents and correspondence.

Frick said that there has been a “lack of accountability“ as to how the grant money has been spent.

SORA Vice Chairman Jack Swift said that he had presented the commissioners a petition in July asking the board to order DeLashmutt to conduct an audit and accounting of the grant money.

Swift said that the document he received in response was the “same balance sheet we had back in December.“

JSWCD performed an audit and accounting in the third quarter of 2009, Swift said, which led to the termination of its contract with N.W. Seed Crushers.

“I don“t understand why we can“t get that,“ Swift said. “I think that the audit is important.“

Cassanelli, who voted against the grant allocation, agreed. “I feel we should get an itemization of that money,“ she said. “I want the money back.“

Swift said that unless there was criminal activity involved, JSWCD has “no excuse“ for withholding the documents.

Toler responded by inviting SORA members to visit Southern Oregon Seed Oil“s facility in Murphy. He said that firm has “very exciting potential,“ and that it utilizes many local growers and manufactures a variety of products.

Frick stated that he would like someone to prove the sustainability of economic development projects absent the use of grant money.

Cassanelli said that the grants should be limited to between $10,000 and $20,000. If firms need more money beyond that, she added, it might be provided in the form of a loan.

Ellis, who is board chairman, said that the county is working on changing its granting criteria, with the help of Southern Oregon Regional Economic Development Inc.

The new criteria will include job creation potential, sustainability and the business plan proposed by the firm requesting the grant, Ellis stated.

Besides Frick, the incumbent also was criticized for the grant debacle by Simon Hare, who is challenging Toler in the Nov. 2 election.

Hare, of Cave Junction, said that it is “irresponsible“ for the board to not approach agricultural producers in the area before honoring the grant request. For example, Hare said, viticulture and nurseries are “noncontroversial“ agricultural industries that are strong throughout the state.

He then accused Toler of “muddying the water“ and “misleading the public“ by mentioning Southern Oregon Seed Oil, as that firm received none of the grant money in question.

Toler countered that the company would not have started if not for the bio-fuels project and related grant.

“If it“s such a great program, let it stand on its own,“ Hare said. Risk is always a part of any business venture, Toler said, adding that there are no guarantees of success.

In a telephone interview in March, Oregon Dept. of Justice (DOJ) spokesman Tony Green had little to articulate about an investigation regarding N.W. Seed Crushers. DOJ is providing JSWCD legal advice in the matter, Green said, which limits what can be said.

“There are questions about whether the grantee met the terms of the grant,“ Green said. “In our role advising the soil and water district, we are looking into that.“

He continued, saying that he could not provide information covered by the attorney-client privilege between DOJ and JSWCD.

“There is a dispute over the performance of the grant,“ Green added. “Because of that, there is always the potential for litigation.

“Also because of that, it limits how much we can say at this point. Once it“s resolved, I think the soil and water conservation district will be willing to provide whatever information they can provide.

Illinois Valley News was able to verify that Frick has submitted his information request to the county.

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