Wednesday, July 01, 2009

No "Smoking Gun" on Alleged Discrepancy Regarding CU's Application Deadline for Stimulus Funds

I think it unfair to keep City Utilities in suspense any longer. I know they are wondering what I will write about the information it took two Sunshine Law requests and some wrangling to receive from them.

Perhaps this information no longer even matters to the majority of the public, since City Utilities (CU) dropped their plans to possibly use eminent domain to condemn and take Becky Spence's property at 505 E. St. Louis, for the time being. But, I believe there is a single distinction that needs to be made regarding what I had previously characterized as a discrepancy regarding the deadline for CU to apply for American Recovery and Reinvestment Act (ARRA) funds, in order to partially finance the new bus tranfer facility they would like to construct.

There is something I need to clarify for my own (somewhat personal) benefit, and because Mr. Twitty, when speaking to Councilman Ibarra at the City Council luncheon on June 9 said, "You (Ibarra) may not have been here. I think, maybe, the information that you had was on Department of Labor (DOL) funds...."

Twitty might not have known about the mention I made in this entry on June 8, to information I linked from the FTA Web site which stated July 1, 2009 is the "Deadline for submitting first round grants to the DOL for review," however, that was simply mentioned as a secondary source in that previous blog entry, and I would also note, the information fell under a category headed "American Recovery & Reinvestment Act."

That FTA page has since been updated.

The primary source of the July 1 deadline I wrote about was a May 15, 2009, letter. The letter was written by U.S. Department of Transportation Federal Transit Administration Regional Administrator Mokhtee Ahmad, and sent to CU Transit Director Carol Cruise. The letter, according to Becky Spence, was sent to her as an attachment to a letter she received from CU via fax. CU had been reporting the deadline as June 15. I questioned the discrepancy between the July 1, deadline noted in the letter I held from the Federal Transit Administration (FTA) and the June 15, ARRA application deadline CU was reporting.

The May 15 letter from the FTA that Spence provided me, was specifically dealing with ARRA funding. It stated: "We remain very interested in ensuring all ARRA funds apportioned to CU are obligated in grants for CU. July 1, 2009 is the date identified in the March 5, 2009 Federal Register notice as FTA's final date to accept grant applications in order to ensure projects are awarded by September 1, 2009. This date assumes that projects are "ready to go" and be implemented. As of today, this project is not ready for ARRA funding."

It took two Sunshine Law requests to receive the email, dated June 8, which Mr. Twitty read from at a City Council luncheon June 9, as noted in this entry. I'm not sure why CU only provided a portion of the email the first time they answered my request but, a line written by FTA Regional Counsel Paula L. Schwach made it clear there was more to the email than what was first provided. That line read, "I have reviewed the e-mails included below and discussed this response with the Springfield FTA team members."

City Utilities did not provide me with the emails Ms. Schwach included when they first answered my Sunshine Law request so, being the stubborn blogger I am, I sent them another Sunshine Law request, specifically asking that all attachments and inclusions to the original email be included.

After finding out the email Twitty read from at the luncheon was sent the day before the Council lunch, and some time after CU began reporting the deadline as June 15, I inquired as to when CU was first informed of a change in the deadline, knowing that the letter Becky Spence had provided to me was dated May 15. Ms. Hamlin responded, "Information from the FTA regarding the June 15 deadline was mentioned in phone conversations prior to June 8, 2009. However, the information from June 8, which was previously provided by Joel Alexander, was the first written documentation the City Utilities Transfer Station Ad Hoc Committee received from the FTA regarding the June 15 deadline." Hamlin had been out of the office when I filed my first request so, Joel Alexander had responded to it.

Later, when I received the email, in its entirety, Cheri Hamlin prefaced it by writing that in a conference call between the FTA and "our ad hoc committee" held on May 15, the June 15 deadline was discussed. That was the very date of the FTA letter Spence provided.

"On May 15, 2009, a conference call was held between our ad hoc committee and FTA," Hamlin wrote. "The revised deadline was discussed at that time. In addition, another member of our staff, through her work with FTA grants, learned of the revised deadline shortly before this conference call."

Now, before I received the email, in its entirety, I couldn't help but wonder if CU was trying to hide something from the public because, it seemed to be a very difficult and time consuming process to get my hands on a document Mr. Twitty had held in his hands only two days before I filed my first informal and, then, formal Sunshine Law requests.

I wondered why Mr. Alexander requested, at first, and then, later insisted, I fill out a formal Sunshine Law request in order to receive the June 8 document. I was asking for it on June 11. Remember, Mr. Twitty had just read from it on June 9, when Councilman Ibarra asked for a copy of the "something written" Twitty had referred to earlier in the meeting. Twitty's response to Ibarra's second request for a copy had been "Sure," as though it wasn't a problem but, maybe it is for eyes other than my own but, I saw no "smoking gun" when I was finally able to read the entire email exchange between City Utilities and Ms. Schwach.

I will note, I had thought I would contact the Regional Counsel myself, and ask about it because, in my view, it is still a bit confusing and unclear when the actual deadline is, considering CU's Chris Haller wrote, "Most notably, CU is currently expected to meet a June 15, 2009 timeline for inserting all the necessary detail into the on-line grant application document!" But later added, "The actual deadline for having all the information in the electronic file in preparation for official submittal is July 1, 2009," However, that noted, it does not change the fact that in Ms. Schwach's response to CU General Counsel John Black, on June 8, she noted, "With regard to ARRA funding... Grant applications must be submitted to the regional office by June 15, 2009 to assure timely completion of processing."

At any rate, the email exchange between CU officials and the regional counsel was interesting, in my opinion so, since I have it, and since someone, even if it isn't many, might be interested in reading it for themselves, I am providing the email exchange, in it's entirety. I do think the exchange provides valuable insight into the process CU was going through, and that can't be a bad thing.

All phone numbers and email addresses have been removed and the emails have been put in the order in which they occurred. Unless noted otherwise, the people who sent and received emails were City Utilities employees with City Utilities email addresses.

In an email dated June 3, 2009, Chris Haller wrote to CU General Counsel John Black and carbon copied to John Twitty, Wade Stinson, Carol Cruise, Robin House, and Mark Viguet:

John B.,

Below is a summary of what we discussed in yesterday afternoons conference call with Paula Schwach, Counsel for FTA Region 7. Our understanding upon presenting the explanation contained herein, was that she would confer with Mokhtee Ahmad and other staff as necessary, and provide us with an appropriate acknowledgement/reply.

As explained, City Council has engaged in public discussions (at the June 1, 2009 City Council meeting) questioning the appropriateness of using eminent domain to acquire the property at 505 St. Louis (Becky Spence property). While the Board of Public Utilities (City Utilities) has charter/statutory authority to proceed with eminent domain without action by City Council, it appears that the political climate may be shaping up to making such action an impracticality.

That said, here is a brief summary of our phone conversation of June 2, 2009 and/or the answers to the questions posed to Ms. Schwach. These are presented with the general assumption that CU is likely faced with seeking -- and subsequently securing -- yet another site for the facility, perhaps one that is already owned by the City.

Grant Funding Status (5309): Grant funds are presently secure. The grant could again be amended to accomodate a change in preferred site as long as it's within the scope of the original grant language, namely for a downtown transfer station meeting the needs of the ridership. However, FTA will halt our ability to draw on any more grant funds until such time as we can demonstrate that we are prepared to move forward with another site. This would require certain assurances from CU. The burden of all expense (including cost for any additional study) incurred up to the point of demonstrating that we are again prepared to acquire (or have acquired) a site and are ready to proceed with design and construction would be borne locally. The following are the two possible scenarios whereby CU might secure another site.

> Scenario 1: CU starts from square-one with another study to identify a new site, bearing all associated costs for re-doing the study. Based on the cost to perform the original study when we were considering a joint development project with the City(parking garage), that added cost would be expected to be at least $50,000.

> Scenario 2: CU resumes consideration of one (or two) of the top, city-owned sights that were subject to the purview of the most recent study. In this case, CU might be able to provide a summary to FTA of the previous study work, update the NEPA documentation for the re-visited site and obtain an environmental determination with limited expenditure of additional local funds. See background explanation below.

Stimulus (ARRA) Funds: Any stimulus funds CU hoped to associate with this project would NOT BE SECURE. They are subject to a different set of more stringent criteria. Most notably, CU is currently expected to meet a June 15, 2009 timeline for inserting all the necessary detail into the on-line grant application document! CU was planning to use half of the $2.87M of available stimulus funds to supplement this project. The actual deadline for having all the information in the electronic file in preparation for official submittal is July 1, 2009. Using stimulus funds on this project is in jeopardy unless we can resolve the location issue in a matter of days!!!

In the event that we do find it politically impossible to move forward at the St. Louis Street site given the most recent position taken by City Council, we understand that FTA will put our Grant Funding (5309) in a "hold" status until such time as we can provide assurances as outlined above. In the interest of protecting the investment of the Federal Government, we understand that FTA cannot continue to authorize expenditures for activities that have already been completed (i.e. -- feasibility study, NEPA process, etc.)

Brief Background: When CU was pursuing a joint project with the City to build a parking garage along with a bus transfer facility, a site at Boonville and Olive was identified as the best location. This site was -- and still is -- primarily controlled by the City. In fact, when the City abandoned the parking garage idea and CU was faced with proceeding to identify an appropriate site for ONLY a bus transfer facility, this site WAS AGAIN identified as the best, even though a number of additional sites were found to be available and entered into the study process.

Scenario 2 above is presented because there are/were viable, city-owned properties considered as part of the previous study. Some of these properties may still be available and the information contained in the report still current, having been completed and submitted as recently as August of 2008. Our Environmental Finding (DCE) was issued by FTA on August 28, 2008. We at CU are in hopes that we can limit additional expenditure of resources, meet all the necessary requirements and still realize the intent of the original grant -- providing the public transit patrons of the Springfield region with the bus transfer station that is needed. A need that has been demonstrated and proven by the $3.1M grant successfully obtained for this region by Senator Bond and his staff.

Please forward this to Ms. Schwach at your earliest convenience, so that FTA might provide us with the necessary feedback to this summary and any additional guidance as they deem appropriate. City Council has proposed the public forum to discuss the use of eminent domain on Monday June 8, 2009 at 7:00 p.m. It may prove beneficial that we have a discussion with the City Manager, the Mayor, the Chairman of the Board of Public Utilities and perhaps others prior to that public meeting.

To my knowledge, we have not yet approached the City staff with a suggestion to meet prior to the public meeting on June 8, 2009, but feedback from FTA would certainly be pertinant to any and all of these discussions.



In an email dated June 4, 2009, CU General Counsel John Black forwarded Haller's email and wrote to FTA Regional Counsel Paula Schwach. The email was carbon copied to John Twitty, Wade Stinson, Carol Cruise, Chris Haller and Cynthia Moses (FTA):

Paula, please find forwarded Chris Haller's documentation of our phone conversation of 6-2-09, [above] whereby we indicated Springfield City Council has announced it is concerned with the use of eminent domain. A corollary is that city property, or city controlled property, appears to be now back in consideration. Previously identified sites 2A and 3, which the City had removed from consideration, are being discussed. As you are aware, we are set for hearings on June 11 to proceed with eminent domain for the St Louis street site. We are working toward being able to have an
agreement to be able to avoid those hearings. We would very much appreciate FTA guidance/suggestion on agreements or arrangements we should have in place, or matters we should bear in mind, before we cancel those June 11 proceedings.
One issue is match for land. As you know, City Utilities is part of the City of Springfield, CU governed by its own Board of Public Utilities. The "City" tracts 2A or 3 are owned either by the city or a city created public building corporation. If owned by the City, my understanding is the land could qualify for local match based on approved appraisal, and if CU transferred funds to a City budget, that would be our internal issue. However, if part of all of 2A or 3 is technically owned by a public building corporation, would the federal funds be available directly for acquisition? Or alternatively local match?
Also, please take a look at Chris' memo to check our understandings as stated there.

Thanks for all your help. We consider all this progress, which may be able to move up the time when a new transfer station will be operating in Springfield. Thanks again.

John Black, General Counsel
City Utilities of Springfield, MO
301 E. CentralSpringfield, MO 65802

The information contained in this email message is privileged and confidential attorney/client communication. It is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this email in error, please notify us immediately at (417) 831-8607, or by replying to the message and deleting it from your computer. Thank you.

In an email dated June 8, 2009, FTA Regional Counsel Paula Schwach wrote to CU General Counsel John Black and carbon copied to John Twitty, Wade Stinson, Carol Cruise, Chris Haller, Cynthia Moses (FTA), Sharon Graves (FTA), William Kalt (FTA), Joan Roeseler (FTA), Cindy Terwilliger (FTA), and Mokhtee Ahmad(FTA):

I have reviewed the e-mails included below and discussed this response with the Springfield FTA team members.

You have asked for FTA guidance on agreements or arrangements which City Utilities as part of the City of Springfield, Missouri (“CU”) should have in place prior to proceeding with eminent domain of a site on St. Louis Street which would be used for a bus, downtown transfer center. What follows are some comments in response to the e-mails and the request for guidance.

1. FTA’s goal is the successful implementation of the bus, downtown transfer center and fulfillment of the purpose for which Congress earmarked funds, now represented by grant MO-04-0120. It is FTA’s intent to delay the amendment of this grant and to hold draw-down of funds under this grant until FTA can be assured that City Utilities has control of an acceptable site pursuant to an FTA NEPA finding related to the specific site. Additionally, for FTA to be certain that CU has the legal, technical and financial capability to implement this project going forward (and given the delays associated with selecting and then rejecting now multiple sites), FTA requests that once CU has again selected or confirmed a site that it provide to FTA: a letter from the Mayor representing that the City supports the specific site selection, confirmation of the scope, new schedule and revised budget for the downtown transfer facility. And we remind CU that while funds are generally available in an obligated grant until spent, this presumes: (a) reasonable progress in meeting the grant purpose, including the schedule; and (b), that Congress does not rescind funding which is either not obligated in a grant (like any pending amendment amounts) or does not rescind funds obligated in FTA grants where certain identified progress goals are not being met. It appears that because of the budget deficit, Congress is now considering rescissions.

2. With regard to NEPA, we advise as follows: The environmental finding issued by FTA on August 28, 2008 was specifically for a transfer center located on St.Louis Street. FTA has not made an environmental finding for a transit center located on Boonville and Olive. Before FTA funding can be used for a transit center at Boonville and Olive (or any other location besides St. Louis Street) NEPA requirements would need to be met. Please provide feasibility and NEPA documentation to support any new location. CU can either update the existing study to address the changes that have occurred since the August, 2008 study was completed or begin a new study process. Note that if CU decides to update the existing documents it is important to be very thorough in addressing all the issues associated with the site selection and each potential environmental consequence area. With regard to site selection it is important that the site selection analysis is updated to reflect the current facts. For example, the August 2008 study indicated that the Boonville and Olive site had fatal flaws. Do those fatal flaws still exist or have the facts changed? We would need also a site plan that shows how any new location will meet public transit needs. NEPA documentation, generally is “site specific”, therefore the environmental analysis to support a documented categorical exclusion would need to be developed for the new site. Please contact Joni Roeseler at 816-XXX-XXX with any questions regarding the feasibility study or NEPA requirements.

3. With regard to site control, we advise as follows: (a) City-owned land would qualify as local match subject to FTA’s acceptance of an appraisal and review appraisal and the value indicated by the appraisal being adequate to provide the necessary 20% minimum share for a Section 5309 grant. (b) CU may transfer any utility tax revenues to the City Budget; it may not transfer either fare box revenue or grant funds to the City Budget in exchange for land which is used for local share in an FTA grant. (c) if land is not used as local share, then the Section 5309 grant can pay for up to 80% of the land so long as there is not an identity of interest between the owner of the land and CU. Since CU is part of the City, there is an identity of interest between CU and the City. With regard to a public building corporation, the question of whether there is an identity of interests is one of state law and FTA would likely request a legal memorandum for its benefit from CU and you as its counsel. FTA would not allow for the City to transfer now to a public building corporation and then back to CU to make some costs otherwise eligible only as donated local share eligible as a direct grant reimbursement.

4. With regard to ARRA funding: while CU has discussed the possibility of funding some costs related to a downtown transfer center with ARRA formula funds, FTA questions whether there is sufficient time to do so. Grant applications must be submitted to the regional office by June 15, 2009 to assure timely completion of processing.

Paula L. Schwach
Regional Counsel

In the end, I do not regret raising the issue and questioning City Utilities about what clearly appeared to be a discrepancy between the ARRA funding application deadline the document from the FTA which Becky Spence provided me specified, and the application deadline which CU was reporting.

The moral of the story, in this case: Communication and transparency can be the government's friend but, they must embrace it.


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