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State won’t study loans

The state said it didn’t have enough resources to investigate a claim by an electrician that large cash reserves from building codes fees were improperly used as internal loans by the entity that manages building codes services.

The March 2 letter from the state’s building codes division to that managing entity, the Mid-Columbia Council of Governments, said, “The division does not have adequate staff resources to evaluate these loans or further this investigation.”

The letter goes on to say, “The division expects that MCCOG will follow state law and appropriate general accounting principles when repaying these loans” to its building codes fund.

MCCOG oversees building codes services in a five-county area.

Large windfarm projects in Sherman and Gilliam counties in past years generated several million dollars in permit fees, some of which was placed in a reserve.

The reserve reached a peak of $1.7 million in 2010-11.

From that reserve, MCCOG has twice loaned itself money.

In March 2011, it paid off a commercial mortgage on its main building in The Dalles, at 1113 Kelly Ave. That commercial loan, with a 5.15 percent interest rate, was paid off with a $492,715 interfund loan from the building codes cash reserve. The internal loan interest rate is just .5 percent, matching the interest rate for Oregon’s government investment pools.

A second loan of $100,000, in May 2013, was to the MCCOG transportation fund, to serve as a local match for funds to buy land for a transportation center.

Wayne Lease of White Salmon, a master electrician for 48 years who now does consultant work, has been critical of the loans for years now.

He first took his complaints to MCCOG – which says it fully refuted all his contentions — and then began taking them to Wasco County and the state.

Lease could not be reached for comment.

The state said it first received a complaint in March 2014. The two-pronged complaint first alleged that the building codes services did not update its operating plan after adopting a new fee schedule that took effect in January 2014.

The second part of the investigation concerned the loans.

The state said in its letter that it asked MCCOG for more information supporting whether the increased fees were reasonable and necessary according to state law.

“The division requested several financial documents at that time and [Mid-Columbia Building Codes Services] provided the division a large binder of documents” in June 2014.

The state letter also references another loan, which never was finalized, for a $550,000 transfer from building codes to the MCCOG general fund, also for purchase of land.

MCCOG Executive Director John Arens Arens said MCCOG did ultimately update its operating plan with the new fee information.

Arens will also send a response letter to the state including the 2013 and 2014 audits of MCCOG, which had no findings that there was anything wrong with the structure of the internal loans.

Arens said state law allows interfund loans from reserve accounts.

Lease has indicated in other public meetings that he’s spoken so often to other entities about the matter that he’s worn out his welcome.

Lease told the Wasco County Commission at its Jan. 21 meeting that he’d spoken to the Oregon secretary of state’s office “to the point — kind of how you feel — they don’t want to talk to me anymore.”

At one point, Lease asked the commission, “Why do you not care?”

But at the next commission meeting, Feb. 4, Wasco County Administrative Officer Tyler Stone said, “It seems like we need to really sit down and start to study the problem” about building codes “that Wayne has been complaining about for the last year.”

Stone suggested forming a committee to study the problem “to take this out of this commission room and really start to study and gather the data” and “make informed decisions.”

County Commissioner Rod Runyon said at the meeting, “we’re interested in looking at other options.”

Other commissioners have said they want to examine how building codes services are provided and if there are any efficiencies to be gained.

MCCOG officials were surprised the committee was formed and earlier this week objected to not being a part of it. (See related story)

Stone told the commissioners Feb. 4 he hoped to see preliminary recommendations from the task force in the next few months.


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