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About The nugget. (Sisters, Or.) 1994-current | View Entire Issue (March 21, 2018)
Wednesday, March 21, 2018 The Nugget Newspaper, Sisters, Oregon DISPUTE: ODOT is now demanding return of $800,000 Continued from page 1 grant funds allocated for specific airport improve- ment projects. (See “ODOT demands repayment of grant funds,” The Nugget, March 29, 2017, page 1.) Since then, the airport and ODOT have been engaged in negotiations over the repay- ment demand. Now, the dis- pute is headed to court. “They’ve reached an impasse and they’re seeking outside guidance from the legal system to reach a fair and equitable resolution,” said Matthew Bowler, a partner in the Mandala Agency pub- lic relations and brand man- agement firm in Bend. “The negotiations don’t appear to have been fair in the eyes of the Sisters Airport… It’s dis- appointing, but it really is the next step that they feel they need to take.” On Thursday, March 15, Sisters Airport, LLC, (SAP) filed a complaint in Marion County Circuit Court seeking a jury trial to determine and adjudicate facts in the dispute. Bowler said that the complaint was filed in Marion County because that is where the orig- inal contract for the airport work was granted. Over the weekend, ODOT filed a coun- terclaim, demanding repay- ment of the entirety of the ConnectOregon V grant. (The complaint and counterclaim can be found with the online version of this story at www. nuggetnews.com.) In a statement, the agency said: “In March 2017, the Oregon Department of Transportation (ODOT) requested repayment of just over $390,000, based on compliance review find- ings and terms of the project agreement. After making this request, ODOT entered into a full year of good faith, com- plex and confidential nego- tiations with the owners of the Sisters Airport in order to reach a settlement regarding the grant. “Those negotiations failed to reach a settlement. As a result, ODOT has filed claims in Marion County Circuit Court for Sisters Airport to return the entire grant. Moving to court resets the claim to the full grant amount, as an issue to be decided in litigation.” Sisters Airport Property LLC and ODOT entered into a grant agreement in May 2015 in which the airport was to receive an amount not to exceed $733,259 to be used for construction of a taxiway, pavement of aircraft parking and ramp areas, installation of runway lighting, and improve- ments associated with those projects. An ODOT review con- cluded that, “ODOT paid invoices submitted by the grant recipient (the airport) that are ineligible project costs totaling $377,152.” The demand letter lists eight cat- egories of allegedly ineligible project expenses, including work on a hangar and $57,976 in construction associated with a drainage runout area that was constructed on property not belonging to the airport. (That construction has since been removed at the expense of Sisters Eagle Air Estates Homeowners Association; See “HOA removes airport runway runout, The Nugget, December 13, 2017, page 1.) The Bensons and ENERGYneering Solutions, Inc. (ESI) were project man- gers for the grant-funded work. The letter demands repay- ment of funds paid to them. The Sisters Airport, LLC complaint asserts that “all expenses for which SAP sought reimbursement were reasonable expense reimburs- able under the grant agree- ment and were adequately documented.” The complaint further asserts that “the grant agreement does not prohibit reimbursements of expenses associated with Benjamin Benson’s professional services to ESI.” The Bensons argue that ODOT is not entitled to repay- ment unless ODOT can show that it was injured by SAP’s acts, and that ODOT was not injured, since SAP performed its obligations in completing the project. The complaint seeks to stop ODOT from demand- ing repayment and also seeks attorney’s fees and other plaintiff’s costs. The ODOT counterclaim asserts that “plaintiff’s use of ConnectOregonV grant funds at issue in this case was fraught with self-dealing, prof- iting from public funds, unrea- sonable expenses, accounting problems and multiple viola- tions of the governing grant agreement.” 541-549-9388 SISTERS 29 PHOTO BY JIM CORNELIUS The owners of Sisters Eagle Airport are going to court to stop ODOT from demanding repayment of grant funds for airport improvements. ODOT spokesman David Thompson told The Nugget that ODOT will have no fur- ther comment until the issue is resolved. “We do not wish to negoti- ate this through the media,” he said. No court date has yet been set. 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