PORT ANGELES — Clallam County has hit the reset button on a pair of stalled grants to the city and Port of Port Angeles.
Commissioners Tuesday voted 3-0 to “take a step back” and send the grant applications back to the Opportunity Fund Advisory Board for a second look.
Commissioner Mike Chapman’s motion to rescind the grants included the withdrawal of two disputed warrants — or checks — for the $1 million grant to the Port of Port Angeles and a $285,952 grant to the city of Port Angeles.
County Treasurer Selinda Barkhuis had rejected the warrants on the grounds that the board did not hold a public hearing or secure written contracts with the port or the city prior to approval.
Commissioners Monday discussed the prospect of waiting until next year to provide the infrastructure funds in the 2016 budget.
That discussion continued in a closed-door executive session prior to Tuesday’s business meeting that was closed because of potential litigation.
“It seems like we could probably get this done this summer and still get the funds into the community,” Chapman said at the open business meeting after the executive session.
“And who knows? Maybe the Opportunity Fund Board will have a different recommendation.
“But I just think we should just start over, clear the air, take a deep breath, pull the warrants back that were issued and rejected and just start over. Maybe we’ll have a process that the entire public can accept.”
Barkhuis could not be reached for comment Tuesday.
If approved, the port intends to use its grant on the $4.3 million build-out of a building at 2220 W. 18th St. in west Port Angeles that will eventually house a Composite Recycling Technology Center.
The city plans to use its Opportunity Fund grant on the second phase of its waterfront face-lift between Oak Street and the Valley Creek Estuary.
County commissioners approved the grants in a May 19 meeting.
Prosecuting Attorney Mark Nichols opined in a June 17 memorandum that the board acted legally and that Barkhuis had a mandatory duty to release the funds.
“Everything was done according to the book,” board Chairman Jim McEntire said in Tuesday’s meeting.
“It was an open process and discussion from beginning to end. As I said yesterday, my main interest today is to see if we can find a mechanism where we stop the interest clock.”
State statute requires that interest be paid on all unpaid warrants, McEntire said.
Officials on Monday said the county is likely accruing $433 per day in interest owed.
“This is an unnecessary and useless expenditure of county monies for a properly drawn set of warrants as a result of a proper and complete and thorough public process,” McEntire said.
“There’s nothing that compels us to go back and push the reset button or restart button, but I am interested in making sure that we get this done in a way that doesn’t require any more spinning of wheels and spending of money.”
Commissioners said they wanted to avoid a court showdown because of expense and potential for further controversy.
“There’s potentially some legal recourse that the board has available to it, but that is the public equivalent of a thermonuclear weapon,” McEntire said.
Commissioner Bill Peach expressed his support for the port and city projects.
“The last thing I want to support, until it’s absolutely necessary, is the expenditure of any county funds for any kind of legal controversy between elected officials,” Peach said.
“I just think that’s a poor use of funds, time and everything else.”
By going back to square one, the county will remove the “process question” and get back to the “merits of what’s actually going to happen with these projects,” Chapman said.
“I think that’s probably the right thing to do,” he said.
After the meeting, Chapman said it was his intention that the board hold a public hearing on the expenditures and secure contracts should the Opportunity Fund board recommend the projects this go-around.
“I would ask the auditor and the treasurer to proceed with us with all possible dispatch,” McEntire said, “because the objective for these two Opportunity Fund grants is to provide additional support and impetus for economic activity that benefits the entire county through these two other fellow governments, the city and the port.
“So let’s not take our eye off the ball here with what’s trying to be accomplished.”
Nathan West, city community and economic development director, said a six-week delay in the transfer of the grant funds would enable the city to complete the current phase of the waterfront improvement project with a change order under the current contract.
The current contract is up at the end of the summer.
“The key is that we do it before the contract is complete,” West said.
“Timing-wise, our intent is to have the project completed near the end of the summer.”
Ken O’Hollaren, port executive director, said he didn’t expect that the delay would imperil the preliminary approval of either a $1 million grant for the proposed Composite Recycling Technology Center from the U.S. Department of Commerce Economic Development Administration or the $712,000 promised by the Washington Department of Commerce.
Both require proof of local matching money.
“I don’t see that [the delay] as having any impact on our project whatsoever,” O’Hollaren said.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.
Reporter James Casey contributed to this report.