Documents have been scanned and converted to text.... ERRORS WILL OCCUR.... DOCUMENT SETS ADAMS #1 - #6 Summary list Questions and answers about Dave Adams and his 2010 USDA Grant Normally, a city's executive officer (mayor) would approve and sign for all grant applications on behalf of the city. How do we know Adams acted alone in applying for the grant or that he didn't get the support of the mayor or city council? If the mayor or city council didn't know, who did? See Exhibit A Grant application - review section F to verify Adams role Exhibit A-l Murphy letter A-2 City attorney was required to submit documents as part of grant process (Jason Pattison is city attorney) A-3 Chamber letter Exhibit A-4 Although an elected official, Adams is not the city's executive officer. Normally only a mayor would be authorized to sign legal documents on behalf of the city. A-4 is a letter from USDA telling Adams to have the Mayor or whomever is authorized to sign on behalf of city. Exhibit A-5 Letter from USDA saying send a press release to notify public and also USDA would come down for presentation. Adams did not notify the press, invite the USDA or include the mayor or any city council person in any grant announcement. Although this letter supports the claim that Adams intentionally kept the grant and loan procedure "secret" it also could possibly indicate that he "selected" grant applicants rather than make the loans available to all citizens as intended by USDA. Many persons have asked why everyone didn't get a chance at applying for a loan, and why only some businesses were asked to apply and others not. Exhibit A-6 Adams requests information from USDA about grant If the goal of the micro loan program is to get projects completed that support businesses and jobs then obviously it's not a good idea to loan less money than needed to finish a project. And everyone knows the Ohio Theater was in foreclosure and had back taxes. What's the problem with the loan if it helped save jobs or supported a business? See Exhibit B- FinHA - USDA grant guidelines and instructions Number Ill-funds will not be used to fund "part" of a project Section C- Other lending criteria Number VI- funds may not be used to pay off past debt, (taxes and mortgages) rf (sae antes bsiow) Exhibit B-l Ohio Theaters "Loan Request" as submitted by the owners Note the "micro loan" will be used to aid in paying off past debt in order for the owners to "refinance" Exhibit B 2 Grant Guidelines - Review "matching funds" near top of Page. This section clearly states that all matching funds (SO thousand in Adams situation) must be deposited prior to any grant funds. Also note section 3 which says that once the city requests for the USDA to "hold" or obligate the grant funds on behalf of the "grantee" (city) then that requests means the city has accepted the provisions of the grant agreement. This rule also applied to Fudge Factory loans from the 1st USDA grant. Jim Grant, Fudge Factory owner offered his support of Adams and the him program at this past June city council meeting. Grant detailed how he got a loan to help him pay off past credit card debt. Grant was also A dams business partner in the trolley at the time the loans were given. Documents have been provided that had both Grant and Adams declaring there was no conflict of interest arising from the loan. There is no record of the loan committee meeting or reviewing Grants credit card debt pay-off" loan. Its easy to see why people think Adams secretly gave his business partner 2 loans. To read more about Adams and Grants business partnership see: * The rule also applies to Digital Dreams use of loan funds to pay off past debt. Stephan DeLorenzo, the owner of Digital Dreams, also spoke at this past June city council meeting. DeLorenzo offered his- support of the program and of Adams assistance. DeLorenzo and Jim Grant each had multiple past due loan payments. A few days prior to the city council meeting all past due payments had been made current for both persons as well as at least one other business. Since the Ohio Theater request to "consolidate and refinance" past due debt doesn't appear to be eligible under the USDA guidelines then how did Adams get them to approve the loan in the first place and what does 50 thousand in matching grant funds have to do with the Ohio Theater loan? See Exhibit C-Revolving loan fund guidelines: Introduction Says Adams has to follow the plan guidelines that he, himself submitted to the USDA . It also says he can not change the plan without PRIOR written concurrence with the USDA. Section 1 Says once again the money can only be used for what and how it is stated within the guidelines that are part of the grant documents you are reviewing. Obviously this point is important to the USDA as it is repeated many times throughout all grant documents. Section 2 References matching funds again and says in order to get the grant that the city must give proof or verification they provided the matching funds before the USDA will give any money. Obviously, this too is an important point as it continues to be restated many times. Exhibit C-l>/strong> Once again....USDA letter detailing how 50 thousand must be deposited in city's micro loan account before money is given. Exhibit C-2 Handwritten note to the USDA from Adams saying city intends to give 50 k- (Adams may request funds from the city but he can take them without approval. There is no record of Adams requesting funds- however Adam's note appears to inform the USDA that the city will be depositing the funds in the micro loan account) Exhibit C-3 SF424 Application for Federal Assistance. Review Adams declaration that his assurances, certifications and statements are true and that he must comply with everything he has stated in applications, grant plans and guidelines. He further attests that he understands that providing false, fictitious or fraudulent statements may result in criminal, civil or administrative penalties. Exhibit C-4 Records which show Adams contacted City Council, the mayor or Board of Public works to discuss or request matching funds Exhibit C-5 City 2010 annual fund report. Microloan is at the top and circled in green. It DOES NOT SHOW a 50 thousand transfer into micro loan account. Unfortunately, the loan to the Ohio Theater was paid out in August of 2010-which means the city violated a major term of its grant contract with the USDA to provide dollars for a revolving loan program. Exhibit C-6 City 2011 annual fund report through June 2011. The micro loan program is again circled in green. Obviously, Adams has still not asked for, gotten approval for or deposited the required 50 thousand into the micro-loan account. What does it all mean? Adams knew he had to commit matching funds in order to get the grant. In the grant application he says, "the city will provide 50 thousand dollars in matching funds." Adams had grant instructions which stipulate numerous times that the city must provide matching funds, hi the instructions it says that a minimum of 20% match must be made. When Adams applied for the grant he applied for 300 thousand- instead of stating the city would match at 20%, he stated the city would match 50 thousand. But the USDA approved the grant for only 110 thousand- not 300 thousand. However since Adams had not written the application as 20%- he had committed the city to 50 thousand. It appears the USDA held the city to that figure in all its subsequent documents, contracts and letters. There are no records which indicate that Adams attempted to restate the city's intent was to match 20. There are also no records that Adams even requested the matching funds from the city. Records indicate there were no funds transferred. Records also indicate that Adams knew the city had to transfer the hinds before the ffirstloan was ever made. The grant was dependant upon the city investing 50 thousand without it there would be no grant. The Ohio Theater loan was made without the matching funds in place. It appears as if Adams may have provided false information to both federal and city governments. The city was not eligible for the grant money- obviously: the Ohio Theater loan should not have been made. So the USDA didn't know Adams hadn't got approval for the 50 thousand and that the money hadn't been deposited. They just believed Adams. That makes some sense because they shouldn't have to investigate every single elected official to see if s/he is telling the truth. But that doesn't explain why the USDA approved a loan for past debt... how did the Ohio Theater get a loan for back taxes? Did Dave and his committee decide to give the loan without following rules? What did Adams say or do to get the USDA to approve the loan? Exhibit D* *- section 7- Other Information Says there is supposed to be a 5 member loan committee plus the Clerk Treasurer. Also EDP executive director (Corey Murphy) wwouldact as an advisor but will not have a vote. **AAt thebottom of Exhibit D there is another statement saying the guidelines can 'the changed without prior approval of USDA Exhibit D-l Letter from city attorney Jason Pattison verifying there are no loan committee records. No loan committee member was able to verify s/he had met with Adams in regards to the Ohio Theater (Adams apparently failed to adhere to his own grant guidelines once again). Exhibit D-2 Scope of Work section 3- lists Adams 2010 USDA grant loan committee. These were the persons Adams was supposed to include in the Ohio Theater loan review. Exhibit D-3 Adams loan request for the Ohio Theater (Emerald Theater). It is not for back taxes. His request does not match what the owners of the Ohio Theater had submitted. * * A caccordingto Jefferson County A rea USDA grant officer reviewing this request, "D ave ddidn't't give a purpose for the loan, so she (I) had to call and write it for him," Exhibit D-4 Copy of web document showing Main Street Design Committee nominates the Ohio Theater for the National Trusts for Historic Preservation's 2nd Annual Community Challenge. The date is August 27th 2010. There are documents which show Adams had hlready given the Ohio Theater a loan check for 25 thousand dollars on or about August 16,2010. If the loan was for facade improvement as Adams had submitted in the loan request then why did Main Street nominate the Ohio Theater for funding for "facade improvements."? Adams had just a few days early provided USDA loan funds supposedly for the same thing. Remember the Ohio Theater's written request was for a loan to pay hack taxes in order to assist with refinancing. Adams had submitted something entirety different. ***On the same page please note the Ohio Theater was also nominated in the 1st challenge in 2009. So was it Adams that provided false information to the USDA in order to get the grant funds for the Ohio Theater loan? Obviously the USDA believed the "modified" request since they got the loan. In section 4- it says the Ohio Theater got the loan sometime around August 16h- how do we know that? And what difference does it make? Exhibit E Copy of check to the Ohio Theater for 25 thousands dollars The date is August 16th Exhibit E-l Adams signature on the bottom of the "Letter of Intent to Meet Conditions." Its important because it shows that Adams knew he had to have the 50 thousand in the account before he made ANY loans from the USDA microloan program. In this letter Adams says the money will be in place no later than 12-14-2010. Not only did the 50 thousand not go in before the loan check, it didn't go in before 12-14. It had not been deposited in 2011 up to the June fund report. Exhibit E-2 Adam's Accounts Payable Voucher report to the Board of Public Works. He tells the Board of Public Works the check was written on August 25th instead of the real date August 16th Exhibit E-3 Adams certification that the report which contains the false dates on the Ohio Theater loan is "accurate and true." Adams Provided the information on the Ohio Theater loan to BOPW Members (Mayor, Schoenstein, Greeves) on September 7th - Exhibit E-4 Page One of Adams Ohio Theater loan request. This is the official USDA form that the "loan administrator" must submit. It is not the application that was submitted by Ohio Theater to the "loan committee" for review. Please note the closing date of 10-15-2010. Also note the collateral listed is real estate. Exhibit E-5 A copy of exhibit A-5 look at the date on Adams email requesting funds for the Ohio Theater loan on October 14th 2010. Exhibhit F 1C 36-5^1-2 money can only be dispersed only after an appropriations...appropriation must be made from the fund from which the expense arose. 1C 36-5-4-3 town my order the issuance of warrants for payment of money by the town only at a meeting of legislative body or board. Be sure to read (b) where it says a town officer who violates this section forfeits his office 1C 36-5^1-4 legislative body or board of the town may allow a claim only at a meeting...but only if claim is filed in manner prescribed...at least five days ahead of time... if violates forfeits his office Exhibit F-l Mayor Armstrong intervened and required the Ohio Theater to provide a mortgage as well as sign loan documents. The mortgage is dated October 2010 but the loan had been given on August 16th. Without the Mayor there would not have been loan documents or a mortgage. Armstrong also suspended both revolving loan programs - (USDA and EDP) . Whats next ? Theres lots more to know...it will inform, it will inspire and it has the potiental to ignite change