Two months after the Tri-Agency Economic Development Authority closed its office and let its executive director go, the Del Norte County Board of Supervisors last week voted to change the way it allocates funds to the cash-strapped agency.

Supervisors voted unanimously to pay for any services the Tri-Agency has rendered and to direct staff to negotiate payments for future services. According to County Administrative Officer Jay Sarina, the staff will return to the board to get approval for any costs that are legitimate.

The county's portion of payment shall not exceed the $15,000 it allocates to the Tri-Agency quarterly, according to Sarina's staff report.

"If they take on a different form or different goals we will come back to the board and get approval to go forward," Sarina said, referring to the Tri-Agency. "Our anticipation is that the Tri-Agency will continue to meet to wrap up their business."

The county's decision comes after the Crescent City Harbor District board voted earlier this month to back out of its memorandum of understanding with the Tri-Agency, withholding its quarterly payment of roughly $1,400 as a result, according to Commissioner Scott Feller, who also acts as chairman of the Tri-Agency board.

Crescent City Manager Eugene Palazzo also terminated the city's memorandum of understanding with the Tri-Agency, sending Tri-Agency commissioners a letter dated Dec. 18, withholding the city's semiannual payment of nearly $12,771.

The Tri-Agency exists as a joint powers agreement between the city, county and Harbor District. Even though the harbor and city have withdrawn from the MOU with the Tri-Agency, they are still part of the joint powers agreement, Feller said.

Del Norte County currently contributes 66 percent toward funding the Tri-Agency, with the city providing 28 percent and the Harbor District 6 percent.

It got its start as a disaster-recovery agency in the 1970s and has gone through several incarnations before developing into a program that offers loans to start small businesses. But in October, due to a financial crisis brought on by an outstanding $400,000 federal loan, the Tri-Agency closed its office and terminated all of its existing contracts.

The Tri-Agency hasn't provided any services to the city since October, Palazzo said. He added that he doesn't know what the Tri-Agency's status is, except that it has outstanding debts.

"I just don't want to hand the Tri-Agency another $12,700 not knowing that we're going to get this service," Palazzo said, adding that he sent the letter under his purchasing authority as city manager. "It's a business decision. Why would we pay for a service that we're not going to get?"

The Tri-Agency's financial woes began when it received a notice of acceleration in September in response to a missed loan repayment to the U.S. Department of Agriculture. The USDA demanded repayment of the balance of a $400,000 loan.

Over its lifespan, the Tri-Agency has taken on several manifestations, Feller said. Commissioners may try again to refocus the Tri-Agency, he said, adding that with the recent elections there may be new members on the Tri-Agency board.

"We're going to try to pay all of our bills (and) try to refocus the Tri-Agency," Feller said. "Over the course of the last 20 years we've morphed two to three times into different types of agencies and it's time for that now."

According to Palazzo's letter, the city was informed in September that the Tri-Agency's remaining budget balance was roughly $400 and the agency had received a letter from the USDA stating its loan had been turned over to collections.

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