JLDC Discusses Grant Funding Controversy For First Time
The JLDC is awaiting “full federal guidance” before making a final decision on grant funding for two local businesses that was called into question by the media and multiple community members in recent weeks.
During the most recent JLDC meeting, the board discussed the recent controversy regarding grant funding being approved for businesses owned by board members or close family members. Mayor Eddie Sundquist addressed the concerns raised by both the media and members of the community regarding how the JLDC has distributed American Rescue Plan Act funding.
“Those funds were federal funds that were given to the city and then were to be administered by the JLDC board, various funds for businesses,” Sundquist said. “Obviously, these funds were to help our businesses recover and move forward, but we also want to make sure that we take any concerns seriously and to make sure that we are being responsive and responding to the requirements of those federal funds and make sure they’re in line with our practices.”
Sundquist noted that the JLDC board has been tasked with the difficult task of carefully reviewing business applications and distributing large amounts of ARPA funding. Sundquist also thanked each of the board members for their work.
“Given the comments and concerns we received, we wanted to make sure that we had conversations with both the state and the federal government, who has oversight,” he said. “To be very clear the oversight of those funds is by the U.S. Treasury Department. These are not pass through funds by the state.”
Sundquist said the city has been in active conversations with both state and federal partners. While the JLDC board’s grant fund decisions have been discussed at length in public, Sundquist said the meeting was the first chance the board had been presented with an opportunity to receive a legal opinion from the city corporation counsel.
Elliot Raimondo, corporation counsel, told JLDC board members that the city is still waiting to receive additional guidance from the federal government regarding the JLDC’s previous decisions to award grant funding to It’s Your Day and Jamestown Skate Products. Nevertheless, he assured JLDC members that the board followed “general municipal law,” just like the City Council uses by recusing individuals with direct ties to local businesses prior to any grant funding award votes. According to Raimondo, the JLDC board did not do anything that was not “above board” with regard to municipal law.
While Raimondo expressed his legal opinion that the JLDC board followed municipal law, he recommended the board consider making changes to its bylaws to make them more consistent with the City Council bylaws. Additionally, he told JLDC members that the board will be required to complete state training, which the city is currently working to coordinate.
“As much as the awards to private businesses are concerned, I would still like to see what guidance we received from the federal government,” he said. “I know we’re working with specific representative and the federal government to get that information.”
Regarding the ARPA grant the JLDC approved for the Irish music concert at St. Luke’s Episcopal Church, Raimondo said that since the Rev. Luke Fodor does not own the church and is simply an employee of the church, his legal recommendation is that the JLDC board stick to its original decision to approve the funding. According to the JLDC board’s bylaws, Raimondo said grants and loans cannot be given to a director who owns a “material interest” in any company at issue; however, Fodor does not own a “material interest” in St. Luke’s Episcopal Church.
“I will leave that with the board to make your judgment on that but he’s not an owner,” Raimondo said.
Regarding the JLDC’s decision to approve ARPA grant funding for Jamestown Skate Products, which is owned by board member Pete Schiera and It’s Your Day, which is owned by board member Jeff Russell’s wife, Raimondo said his recommendation is to wait until the JLDC board has received “full federal guidance” from the city’s representative.
“It’s my legal opinion that this board has awarded those groups in the past, monies for various events,” he said. “We’ve awarded a lot of downtown businesses and businesses in general, monies out of the ARPA funds, and it’s almost a double standard to have some businesses get this money and other business not. I assume that this board has reviewed these applications and found that these applications for the funding were needed and just; therefore, we should proceed with that. Before I make a recommendation that we should hold off on something like that, I’d like to have all the information present.”
City Council President Anthony Dolce, R-Ward II, explained that despite the JLDC board being placed in a situation that it has never been placed in before with a large amount of ARPA funding, the board has been transparent, careful and open to the public regarding the policies, recommendations and procedures of various business grant applications.
“JLDC along with the Department of Development have reached out to the community, and anyone regardless of the situation with these specific ones, had to meet specific criteria,” he said. “There was never any intent by this board or any member of this board to do anything backhanded or illegal or undermine anybody else. Nobody was denied something because somebody got something.”