ENTERPRISE — Wallowa County may be getting up to $250,000 in federal CARES Act funds to help local businesses and recoup expenses.

But the road to those funds has an unexpected speed bump, and now county and state attorneys must resolve some significant legal issues before the money can flow.

“There’s the money we’d like to spend, if we can figure out a way to deal with the state” Wallowa County Commissioner Susan Roberts said. “The money we spent under the first iteration of reimbursements was $3,002 that we used to purchase all of our video stuff. But now this bigger funding package has been put on hold as of Friday, June 26.”

Roberts said the county was advised to not sign the document, something that was apparent when she read the document.

“Our county counsel, the attorney for the Association of Oregon Counties (AOC), didn’t want us to sign the agreement with the state for it,” Roberts said. “And then when I read it, it was obvious I couldn’t agree to what it said. It put all the responsibility on the counties, and none on the state.”

On June 22, a legislative workgroup comprised of two Oregon House and two Oregon Senate members, along with officials representing local governments, reached a preliminary agreement on how to distribute $200 million of Coronavirus Aid, Relief, and Economic Security Act funding to communities outside of Portland.

It seemed to be going well.

“This funding distribution will help these communities recover as we move forward following the impacts of COVID-19,” said Oregon Sen. Bill Hansell, R-Athena, who served on the four-member legislative group.

Rob Bovett, the lead attorney for the AOC, said the next step was for the AOC, the League of Oregon Cities and the Special Districts Association of Oregon to write out a document that would allow distribution of the fund.

“It took about a week for the three organizations to write it up. Everybody signed off on it. We sent it off to the state for their input. We got it back in a couple of days,” Bovett said

But when Bovett and other county attorneys read the revised document, they weren’t happy.

“There were some complications in wording that has put the larger grant disbursement on hold, while better and clearer terms are worked out for Oregon counties,” he said.

Bovett said that the state’s revision was “a very extensive 21-page intergovernmental agreement that any attorney would view as very one-sided in contract terms.” It imposed all the burdens on the receiving end. It was more like a grant agreement where you had to meet conditions.

“When our county lawyers from many counties, saw this, they said, ‘Why are we even being asked to sign this?’ “ Bovett said.

The document, Bovett added, included many problems. There were relatively minor minute things that included that if any lawsuit was filed it had to be filed in Salem’s Marion County Circuit Court. Larger issues included the requirement that boards and counties commit financial resources that might not yet be known or budgeted, which is unconstitutional in Oregon. There were problems with the conditions of immunity and liability that placed a heavy burden on counties, and seemed to absolve the state of any responsibility.

Other concerns listed in a letter from the Oregon County Counsel’s Association to Gerald Floyd, Oregon Department of Administrative Services, included that “the state reserves the right to withhold funds that, in in their sole determination are misallocated, without any dispute resolution process,” and “Counties are required to pass onto DAS any information DAS requests, without limitation.”

“Fundamentally, they took a grant agreement that was probably written for a state-private-party relationship, and they just flopped in the word ‘county,’ “ Bovett said. “But counties are the state’s partners in providing core public services for all Oregonians. Yet, we are the entities that deliver many core public services. … We’re not here to make money off the state.”

Consequently, the Oregon County Counsel’s Association sent a letter of concern to the state June 24, that in part expressed concern that the state was obstructing access to the allocated federal funds that counties desperately need.

Bovett said the governor’s office has offered to set up set up a small working group composed of county and state lawyers to try to work out a solution to the problem.

“I view this as positive,” he said. “If they are given authority, the state’s lawyers have been very reasonable and tried to work out something that works for everybody.”

He anticipates that the group may be able to resolve the problems during the week of June 29.

But $200 million is just a start on what Oregon counties should be getting, Bovett said. The new round of funding would provide $200 million statewide. Overall, counties are eligible for $624 million in CARES Act funds. Oregon seems to be withholding two-thirds of the federally appropriated funds for reasons that are unclear.

In a three page letter to Gov. Brown p June 26, AOC president Jim Doherty said “AOC asks that you ensure the remaining $424.8 million in allowable Coronavirus Relief Fund resources for local governments are made available through the existing reimbursement model to address the COVID-19 response and recovery. Please follow the distribution of CRF dollars in accordance with the U.S. Department of the Treasury guidance.”

Bovett wants to see the full allocation of $624 million made available soon, and sees new wording in the pending agreement as critical for funding to flow, especially to rural communities.

“It’s incumbent on us, on the counties, to keep businesses in small communities on life support while the economy’s in hibernation,” he said. “If there’s nothing alive as we start to come out of hibernation, that’s the way to convert a recession into a depression.”

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