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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