Grand Island City Council Votes Against Written Plan Over State Grant

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GRAND ISLAND, Neb. -- The Grand Island City Council voted unanimously, 10-0, Thursday night to deny a resolution creating a project implementation agreement with the Grand Island Area Economic Development Corporation.

In 2008 Grand Island submitted a grant application on behalf of the GIAEDC for Phase 1 of the Community Development Block Grant (CDBG) from the Nebraska Department of Economic Development (NEDED).

That phase was for $75,000 to hold a study of Cornhusker Industrial Park for economic development.

However, that study showed the land was not good for development, but another study found Platte Valley Industrial Park East did qualify for Phase 2 of the CDBG.

In 2010 the state approved the Phase 2 $925,000 grant, however it required dollar for dollar matching.

So the GIAEDC approved and submitted an application to themselves under the city's LB-840 economic development plan seeking $575,000 to be used as a portion of the matching. The city would pay the remaining $350,000 to match.

An implementation plan agreement between the city and the GIAEDC was planned to happen at a later date on the July 27, 2010 city council meeting, but it never did.

Grand Island Treasurer and Finance Director Jay Monter played a video of that discussion from 2010 Thursday night.

Monter said in June 2014 city administration and the legal department told the city council they tried to seek cooperation with the GIAEDC to define the responsibilities in an implementation plan, but those efforts were rejected by the GIAEDC.

Monter said before the Council meeting, "We're hoping that the plan will say that the city will be the administrators of the grant and the EDC, if they are unable to put those jobs into place which was what the plan was from the beginning, they will be responsible for reimbursing the city should the city have to pay the $925,000 back to the state."

During Thursday's discussion, GIAEDC President Randy Gard said, "There is no urgency for such an agreement. We have until April of 2016 to bring in 37 jobs, and in order to do that we need a confidential and strong private, public partnership."

Once a motion was made to deny the resolution, Monter warned it may be an issue the administration will see in the future.

She said, "It does not have a bearing on the budget but when we present and talk about the future financial forecast we will be needing to add another possible $925,000 pertaining to that year."

But Gard assured the council, that won't happen.

"The EDC will continue to fulfill our goal of bringing in the 37 jobs to the very best of our ability. And I personally pledge to keep the council abreast of all of our activities between now and that time."

Council Member Peg Gilbert made the motion to deny the resolution. She said, "I don't think in any way passing this resolution tonight would give any sort of closure to this issue. Until it gets closer to the time that we find out that those jobs have happened or not this is going to keep coming back and coming back. A piece of paper signed isn't going to be the end of this."

She continued on to say, "If anything it brings one more thing forward to the city and to the community and people that look at Grand Island and shake their heads. That is what bothers me the most. Again our city image is damaged by these things.

Council President Chuck Haase seconded Gilbert's motion to deny. He said, "This is the wrong time to be reviewing this. All these documents needs to be to the council at the beginning so that everybody knows the consequences of every possible action and every possible scenario."

In response to the part of the agreement on the GIAEDC paying the city back if the jobs are not made, Haase said, "I would rather focus our energy and efforts on how do we make it happen. Not how do we handle failure."

Council member Mitchell Nickerson echoed Haase's concerns. He also added he doesn't like the idea of the council acting as judge and jury over this.

"We can ask and demand an agreement be made but you can't force somebody to do something. I think if it comes to pass, and I surely hope that's not going to happen, this would become more of a legal matter than what we're going to be able to deal with here," he said.

Grand Island Mayor Jay Vavricek who was in favor of the agreement said, "We're trying to work together and we have to go ahead and seek direction by council because it was a council condition on the LB-840 agreement."

However each of the council members differed from the Mayor's opinion.

Mark Stelk said, "You got the horse that's already out of the barn and you're trying to correct it. And you can sue the EDC, but what good are you going to do? All you're going to do is fight among family and you're going to create more bad blood than we already have. I don't see where we're going to get ahead by doing that, I don't see where we're going to get ahead by forcing them to sign an agreement, that water's already under the bridge. That agreement should have been done 4-5 years ago and it wasn't.

"Unfortunately it wasn't, but in banking and you have a mistake, you deal with it and you let the chips fall where they may. I don't think we can correct a screw up right now. I think we just have to work and hope that things fall into place and that the city doesn't have to pay any more money."

In order to prevent the city from paying more money, Randy Gard must keep his pledge to get 37 people employed on the land at the Platte Valley Industrial Park East by March 25, 2016.