Authority charged with encouragement of local enterprise
The inability to make a federal loan repayment last year has placed the Tri-Agency Economic Development Authority’s funding at risk and has its commissioners questioning whether the agency can continue in its current incarnation.
Board members held a special meeting Wednesday to discuss a notice of acceleration the U.S. Department of Agriculture sent the Tri-Agency in July. The notice was in response to a $17,000 USDA Rural Development Loan repayment the Tri-Agency failed to make in the fall of 2011, according to Executive Director Bill Renfroe, whose job status is now in question as well.
The board will hold another meeting Oct. 24 after commissioners report back to the city, county and Crescent City Harbor Commission, according to Tri-Agency Chairman Scott Feller.
“We are in a transition period and that’s part of what our meeting on the 24th will be all about,” Feller said. “We’ll try to decide what we’re going to do and when we’re going to do (it) and do we transition from being a loan-type organization to working on other focuses.”
Many years ago the Tri-Agency was funded through a $400,000 loan from the USDA’s Rural Development Loan Program, Renfroe said. This funding was used to pay for a number of projects, including revolving loans to small business developers. But after the last series of loans made by the Tri-Agency went into default, no more funds came into the agency and it was unable to make its annual payment to the USDA.
After it was clear the Tri-Agency wouldn’t be able to make its loan payment, Renfroe and the director of the Del Norte Economic Development Corporation tried to work with the USDA to come up with an alternate plan. But instead of agreeing, the USDA sent a notice of acceleration demanding the entire loan balance of $317,000, Renfroe said.
“If you go in default the entire loan is due in payment immediately not just back payments or missed payments,” he said. “The only thing we could appeal was whether or not the dollar amount was accurate.”
Meanwhile, in September, Tri-Agency officials expected to receive funding from a U.S. Forest Service Resource Advisory Committee grant to pay for biomass research. Then the U.S. Treasury Department notified the Tri-Agency that it had taken that funding to pay down on its defaulted loan with the USDA, Renfroe said.
When that happened, the Treasury Department referenced a letter the USDA sent to the Tri-Agency in June that stated it can garnish any state or federal payments made to the agency. Renfroe said the Tri-Agency never received that letter.
“The question is, now what does the Tri-Agency do?” Renfroe said. “We’re screwed in applying for any state or federal monies. Anything we apply for we would be disqualified for because we’re in default and if we were to get it, the Treasury (will) pick it up.”
This leaves the commission with a series of concerns and questions.
One of its concerns is what will happen to the city, county and harbor, which are member agencies of the Tri-Agency. Another is how can those entities continue to fund the Tri-Agency if there’s a chance that the federal government could snatch more money for the USDA loan.
Renfroe said the Tri-Agency’s legal counsel, County Counsel Gretchen Stuhr, investigated the issue and concluded that the debts of the Tri-Agency are not the debts of the member agencies. But the question of funding still remains.
There is currently $2,000 in the Tri-Agency’s bank account, Renfroe said. The agency’s monthly cash flow is $10,000, he said.
“Right now there is insufficient money in the bank to last through the end of the year,” Renfroe said. “My contract through Tri-Agency is through June 30, 2013. They don’t have enough money to pay me through 2013. They can put more money in the account, however it’s certainly at risk.”
Feller said although there have been no dissolution agreements brought up to the City Council, Board of Supervisors or Harbor Commission, dissolving the agency is a possibility. At its last meeting, commissioners agreed to take the issue back to their respective agencies, he said.
“It’s obvious the Tri-Agency will have to change its formation and the way we do business,” Feller said. “There’s been several different suggestions such as strengthening the tourism market.”