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Recall only recourse for Coburg officials' acts.

Byline: GUEST VIEWPOINT By Sharon Taylor

A Feb. 13 Register-Guard editorial asserted that the reason for the Feb. 25 Coburg recall election was the recall petitioners' displeasure with the city's wastewater project. However, other issues were listed in the petition - the most troubling being the misuse of public Urban Renewal Agency funds.

The Coburg Industrial Area Urban Renewal District is the strip of industrial properties along Interstate 5. The purpose of the district, created in 2001, is to pay for the district's "proportionate share of the new municipal sewer system." The "proportionate share" calculation is necessary, because urban renewal funds cannot be spent for any projects outside a district's boundaries.

To date, no proportionate share has been calculated or applied. Renewal area funds are regularly transferred to the city's sewer fund without regard to the plan's requirement to apportion the funds. The city has also borrowed urban renewal funds, which is also not an allowed use. For years, the city carried on its books a loan of $123,951 from the Urban Renewal Agency to its general fund. City and renewal agency funds were commingled in a single bank account until 2007, when the agency funds were moved to a separate account. The city's auditor determined that the split of the funds was incorrect, and the renewal agency "should have $123,951 more in its checking account than it does." It was clear from the auditor's statement that the city needed to transfer that amount to the agency to resolve the loan.

Members of the Coburg City Council are also directors of the urban renewal agency. In June 2011, the councilors took off their city hats, put on their urban renewal hats and magnanimously voted to "forgive" the city's debt to the agency. Among the councilors/directors who voted on that resolution were Jae Pudewell and Jerry Behney, now up for recall. The editorial's statement that the "disputed financial transactions" happened before the current Coburg administration took office simply isn't true.

The reason given for the debt forgiveness was that the city spent an equivalent amount on the wastewater system in previous years, and that was effectively the same as repaying the renewal agency. The city has always had a sewer fund on its books, separate from the renewal agency and the city's general fund. Coburg's general fund has been in the red as much as $800,000, so there is no reason to believe that the city would spend almost $124,000 out of its highly indebted general fund for the project when it had a sewer fund and the renewal agency for those expenditures.

To date, no documentation of any of these phantom expenses has been produced - no invoices, no time cards, nothing. If no evidence of these expenditures exists, then the reason given for the forgiveness of the debt was false and the vote was a misuse of public funds.

Why should anyone care what Coburg does with its urban renewal funds? Taxes collected for the urban renewal agency are pulled from other local jurisdictions: Lane County, the Eugene School District, the Coburg Fire District, and even the city of Coburg, thereby reducing the services they can provide. The forgiveness of the urban renewal loan redirected those jurisdictions' taxes right into Coburg's general fund, which doesn't pay for any portion of the wastewater project.

Lane County District Attorney Alex Gardner recently looked into these issues to see if there was any evidence of criminal wrongdoing. The

lack of records made it impossible for him to prove or disprove whether the funds were improperly spent. He did suggest that "an independent and unconstrained forensic review might be a good way to restore citizen trust." Over the past two years, several people have called on the council to do just that, and have been ignored.

The Lake Oswego law firm of Jordan Ramis, experts in urban renewal law, reviewed Coburg's practices with regard to urban renewal funds. The firm concluded that the renewal agency had, on several occasions, used urban renewal funds in ways not allowed by law, and that city councilors might be personally liable as a result.

A second point: "The agency has gone pretty far down the road of making expenditures that exceed its authority, because it has been acting based on legal advice and project information from a party that is not objective. The dual roles of the contract city attorney present a conflict of interest." The now-ex-city attorney, renewal agency attorney and wastewater project manager are one and the same: Milo Mecham, a Lane Council of Governments attorney and author of the debt forgiveness resolution.

The recall was specifically put in place to hold the councilors accountable for their misuse of urban renewal funds. Previous efforts to resolve this issue have been unsuccessful. Calls for a forensic audit have been rejected. Requests for documentation of the loan forgiveness have been ignored. The only recourse left is to recall them before further damage is done.

Sharon Taylor of Coburg is an audit manager with the Atomic Audit Group.
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Title Annotation:Guest Viewpoint
Publication:The Register-Guard (Eugene, OR)
Date:Feb 18, 2014
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