Attorney Elliot Raimondo (center) talks with members of the Jamestown Local Development Corporation during its March 15, 2023 meeting
UPDATE: The Jamestown Local Development Corporation will not be discussing the ARPA grants awarded to Jamestown Skate Products and It’s Your Day at its monthly meeting following an update sent this morning that removed that item for tonight’s agenda.
City officials are expected to offer an update Wednesday afternoon on the question of whether or not the Jamestown Local Development Corporation (JLDC) violated federal guidelines by approving economic development funds for projects tied to sitting board members.
Among the items on the JLDC meeting agenda for this month is a “discussion and decision regarding the ARPA grants awarded to Jamestown Skate Products and It’s Your Day.”
Jamestown Skate Products is owned by JLDC Board Member Pete Schiera and was approved for a $15,000 grant in October through the JLDC Downtown Small Business Evolution program. It’s Your Day wedding planning service was approved for a $64,000 grant in February from the JLDC’s Building Acquisition & Business Expansion program. The owner of that business is the spouse of JLDC Board Member Jeffrey Russell, who also serves on the Jamestown City Council.
A third grant was also approved by the JLDC board in February for St. Luke’s Episcopal Church, after the church applied for funding from JLDC Downtown Programming & Events program. That grant application was submitted on behalf of St. Luke’s by employee Rev. Luke Fodor, who also sits on the JLDC board. In all three cases, the board members in question did not vote when it came time to award the funding.
In February, WRFA reported that the JLDC board likely violated its own bylaws and possible even state law by awarding funding to businesses connected to sitting board members, recusals notwithstanding. JLDC bylaws – which govern how the corporation must function – prohibit the awarding of loans or grants for any business in which a sitting board member (or immediate family member) owns a material interest. The JLDC board may have also violated Article 18 of the State General Municipal Law, which prohibits municipal officers from receiving public money they oversee and that “there are no exceptions for when an individual discloses his or her interest, recuses him or herself or abstains from the discussion or vote on a matter.”
In response, JLDC attorney Elliot Raimondo said during the March board meeting that it was his opinion that the St. Luke’s grant should be allowed to stand because Fodor doesn’t own any material interest in the church. As a result, the conflict of interest provisions in the JLDC bylaws and State Law didn’t apply to him.
However, Raimondo and Mayor Eddie Sundquist said the JLDC would hold off on awarding the funding to Jamestown Skate Products and It’s Your Day until they looked into the matter further with the US Treasury Department, to determine if the awards violated any federal provisions tied to how ARPA funds are to be appropriated.
They said that if it was okay with federal officials, then the awards would be allowed to stand, despite any stipulations found in the local bylaws or in state law.
“We are waiting for that guidance before I make a final opinion on the federal aspect of it. And as much as the prior votes were concerned, we did follow general municipal law, which is what city council uses, whereby recusals happen and votes were then taken place, so I don’t find that we did anything not above board in that respect,” Raimondo explained in March.
WRFA has reviewed the Treasury Department’s guidelines for the $28 million in State and Local Fiscal Recovery Funds (SLFRF) the city received in 2021 through ARPA and did identify a provision that states:
“…recipients may not use SLFRF funds in violation of the conflict-of-interest requirements contained in the Award Terms and Conditions, including any self-dealing or violation of ethics rules. Lastly, recipients should be aware that federal, state, and local laws and regulations, outside of SLFRF program requirements, also apply…”
– Federal Register / Vol. 87, No. 18 / Thursday, January 27, 2022 / Rules and Regulations – Page 4340
We reached out to the Treasury Department office for clarification to see if any of the three grants in question violated the “self-dealing” provision found in those guidelines, but have yet to receive a response.
Meanwhile, the JLDC’s April meeting will take place at 5:30 p.m. Wednesday, April 19, in the mayor’s conference room – fourth floor of city hall. It is open to the public and will also be video-streamed online at the city website.
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