County Suspends Job Program

The Register Guard (Eugene, OR), July 4, 2011 | Go to article overview

County Suspends Job Program


Byline: Matt Cooper The Register-Guard

Corrections (published July 8, 2011): The Lane County Community and Ecomonic Development division said it is temporarily suspending a grant program intended to help growing businesses. A headline on Monday's front page incorrectly stated the division was temporarily closing.

The division of Lane County government charged with sowing the seeds of job growth has temporarily shuttered a key program amid an investigation into questionable activities.

Having overspent and sapped its reserve, the Lane County Community and Economic Development department said it will close for as long as a year a grant program that has awarded hundreds of thousands of dollars annually to growing businesses.

Meanwhile, a new department official said spending had gone unchecked in a division that saw the resignation of its manager in April and the possibility that two county commissioners will be implicated for improper actions.

Through sales of lottery tickets, video lottery games and more, the Oregon Lottery generates about $1 billion per biennium for public education, parks, natural resources and economic development. Money from video lottery games is distributed to counties for local job growth efforts. In Lane's case, that totals more than $2 million per biennium.

During rounds in November and March, the county economic development department has distributed as much as $700,000 annually to local businesses and other organizations to fund job retention and expansion, work force training, public works improvement projects and more.

This year alone, the department provided $535,000 in grants to six companies, helping to create 141 jobs and preserving 26 more for projects that included local food processing, electric car manufacturing and industrial parts manufacturing.

But the department is not currently accepting requests for video lottery grants and might not take them for a year, depending on how quickly state video lottery collections can replenish the account, interim Economic Development Coordinator Glenda Poling said.

Depleted reserve

The department's video lottery reserve has dropped below $200,000, well below the $750,000 that is preferable in case a major employer comes calling, Poling said.

The department has functions other than the video lottery grants - it administers federal community development block grants, for example. Poling said, too, that interruptions in the awarding of video lottery grants aren't unusual.

But Poling, who took over following the resignation of Mike McKenzie-Bahr on April 28, also identified 14 contracts awarded prior to her hire that she said had not been vetted by the department's advisory committee. Those contracts total more than $300,000 in video lottery dollars, or roughly 20 percent of the account.

Under county regulations, Poling said, all applications for funding from the video lottery account are supposed to be reviewed by the Economic Development Standing Committee for recommendation to the county board for a vote.

According to the Lane Manual, which sets forth policy procedures, up to half of the video lottery dollars can be used by the department for ongoing programs, services and staff involved in economic development.

A minimum of half of the rest of the money is to go to the Economic Development Strategic Investment Program. Allocations in that category, the manual reads, "shall be made by the board upon the advice of the Economic Development Standing Committee."

Committee recommendations

The committee reviews funding requests and makes recommendations based on the potential to create or retain family-wage jobs, generate revenue and recruit businesses. …

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