Grant Manager Tim O’Dell presents on business grant fund to the Jamestown Local Development Corporation board. (January 18, 2023)
The vast majority of board members who serve on the Jamestown Local Development Corporation (JLDC) have not received any training that’s required under state law.
That’s according to information provided by the State Authorities Budget Office, which is responsible for making public authorities more accountable to state law.
According to data from ABO, eight of the nine current JLDC board members – including mayor Eddie Sundquist – have yet to participate in the required state training that focuses on a board member’s legal, fiduciary, financial and ethical responsibilities. Under state law, all board members of local authorities like LDCs and IDAs must receive the training within a year of joining a board.
Sundquist said his office has been working with the State Compliance Office on the issue, “Where they’re well aware of the situation and they talked to us about what things need to happen. Number one, they gave us some additional dates for fiduciary training, which we found out is actually required for public authorities. And, unfortunately, with COVID, a lot of that went to the wayside for quite a period of time, but we want to make sure we’re compliant and doing the things that we need to do.”
JLDC serves as the lending arm of city government and, in 2022, the Jamestown City Council authorized it to oversee and appropriate neary $9 million in federal American Rescue Plan Act money aimed at economic development. As a result, the JLDC was given more appropriating power than at any other time in its 42-year history.
Besides Mayor Sundquist, other board members who reportedly have not completed training include the three board members who applied for federal grant money administered by JLDC.
As WRFA reported last week, JLDC board members Pete Scheira and Luke Fodor each applied for and received American Rescue Plan grant money for businesses or organizations they have a material interest in. Additionally, the wife of city councilman and JLDC board member Jeff Russell also applied for and received funding. In all three cases, the board members in question did not vote for their respective grant award, but both the JLDC bylaws and state laws have conflict of interest rules that appear to prohibit JLDC from awarding funding to entities that board members own a material interest in.
Only council president Tony Dolce is listed as recieving training, but that was in 2012 – over 10 years ago.
By comparison, five of the seven members of the Chautauqua County Industrial Development Agency have received state training, with two of those being in recent Pandemic years and two who have yet to receive training, having only joined the board within the past year.
In response to the likely violation of JLDC bylaws, Mayor Sundquist has said it was the city’s legal interpretation that the conflict of interest rules did not apply because JLDC was only acting as a pass-through agency for the federal money and did not receive it directly.
He said the U.S. Treasury Department is who oversees the ARP funds, “They’ve actually gotten rid of their staff that focuses on compliance in the Treasury Department, so it’s been a challenge for us to try to figure out what’s the proper way to do things when it comes to this federal funding. So, we’re working through that process, we’re going to be talking to the JLDC board about what we have found out through this process of working with the state and working with some of our federal partners because we really want to have that public discussion of what happened and where do we go from here.”
The mayor has also said the city is continuing to look into the conflict of interest situation and will work to rectify it should either state or federal officials verify it was not allowed.
Editors Note: A previous version of this article indicated Jeffrey Russell applied for a grant. That was incorrect and it was his spouse who filed the application for her business.
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