By Jon Cassidy | Watchdog.org
The Ohio Environmental Protection Agency is paying $4.7 million so that the city of Aurora can buy a high-end golf course . . . and close it down.
In doing so, the agency is skirting federal and state law, maybe even breaking it.
What’s in it for the dealmakers? The course owner is making a bundle on a property he bought out of receivership four years ago. Aurora gets title to 196 acres of open space for free. And the Ohio EPA gets a rare chance to do something about fertilizer runoff, an issue it’s legally required to ignore across the state’s expanses of farmland.
The only losers are the taxpayers – in particular, taxpayers who play golf and appreciate the rare beauty of the Aurora Golf Club, which was a private country club for almost 90 years before falling on hard times in 2008 and reopening as a public course.
Allen Freeman of Northeast Ohio Golf is furious about losing a gem of a course where the scoring record is still held by Arnold Palmer.
“It’s the Ohio EPA telling tall tales about improving water quality downstream by restoring the land – utter nonsense – and the Aurora City Council in bed with them claiming they are stopping over-development,” Freeman said.
Most of the taxpayer money – $3.9 million – will go to pay the owner double the $1,915,700 assessed by the county, but there will be around $800,000 left over to plant some trees and move rocks around and such.
The ostensible purpose of the project is to improve water quality in the Chagrin River, but the water there is fine. Lynn McGill, the recently retired mayor of Aurora, is one of the project’s biggest supporters, but even he has said the Chagrin’s water is “pristine.”
If that’s not exactly the most scientific method of gauging water quality, neither is the EPA’s method, which is to not gauge water quality. They’ve got a 10-year-old report on the region’s water that included samples near the course.
One in every eight of those samples detected a slight elevation in nitrate levels. So there’s your science: 10 years ago, somebody could just barely detect fertilizer near a golf course.
The agency did get around to taking a water sample last summer, according to neighbor and observer George Heisler. But those findings haven’t been made public, much less cited as justification.
Heisler, who lives off the 10th hole, draws his own conclusions about what that non-disclosure means, but says one of the problems is that the members of the Aurora City Council have some pretty exaggerated ideas about the environmental downsides of golf courses.
“One of them wanted to know if the city would have to detox the fairways,” he said.
The EPA doesn’t expect major improvements from the project. The agency wrote that “significant environmental impacts will not result from the action” in a legal finding that exempted itself from doing so much as a standard environmental impact report.
Surely, there must be some benefit to the project, the observer might insist.
Well, those trace amounts of fertilizer will be gone, getting the water closer to perfect, but just for a few seconds: because immediately downriver from the golf course sits the Aurora Central Wastewater Treatment Plant. And yes, it dumps right into the river.
The EPA paperwork mentions removing a dam, and everybody knows the damage dams do to waterways. But it leaves out one tiny detail, Heisler explains. The dam isn’t on the river. It’s part of a 3-acre man-made lake the course used for its water supply.
“We’re paying $237,000 to restore a gully,” Heisler said.
Although the purchase won’t do much for water quality, it will assure the city of open space, which has been a priority of recent City Councils.
In the last three years, the city has bought three large properties near the golf course to conserve as open space, all of them near a 165-acre sanctuary owned by the Audubon Society of Greater Cleveland.
In that, the council reflects the community, Heisler said.
“This is one of those towns where a fair amount of people think development should be shut down, that we should shut the door and not let anyone else in,” he said.
However, Aurora isn’t facing imminent urbanization: 77 percent of its territory remains undeveloped.
The owner of the Aurora Golf Club is a local developer named Hunter Banbury, who bought the property in 2009 for something in the neighborhood of $2.5 million to $3.1 million (reports vary). Banbury has threatened to turn the golf course into a residential development since the beginning, although zoning would restrict him to 66 units on the 196 acres, making it difficult to turn profit on his investment
In 2010, the City Council refused his request for denser zoning. In 2011, the community voted to allow him commercial zoning on six acres of the site, which Banbury said was necessary to keep the course operating.
But in applying for EPA money, the city cited that rezoning as evidence of Banbury’s “full intention to shut it down for a large scale redevelopment.” The city didn’t mention it only applied to six acres.
“The City Council is fighting straw men, as there is no developer interested in building at Aurora Golf Club,” says Freeman. “The property is too hilly to develop cost effectively.”
More important, Banbury hasn’t shown that anybody else even wants to buy the property. But the city knew about an EPA program called the Water Resource Restoration Sponsor Program from another deal two years ago, and went back to try for more funding.
The Cleveland Plain Dealer wrote up the program this week, praising it as “innovative,” but failed to notice that the innovation is in skirting, and possibly violating, state and federal law.
There’s nothing in state or federal law allowing the Ohio EPA to just give money to Aurora, or any other city, from its Water Pollution Control Loan Fund, of which the WRRSP is a part. So the Ohio EPA has come up with an elaborate three-party arrangement that’s the governmental equivalent of money laundering.
It takes money that, by law, must be repaid, and purports to turn it into money that doesn’t.
The EPA is the one writing the $4.7 million check to Aurora, but it bundles that deal with a separate loan to a “sponsor,” in this case, a $42 million loan to the Northeast Ohio Regional Sewer District. The EPA then treats the money it gives Aurora as though it were coming from the eventual interest payments that the sewer district will make.
That way, the agency can take the position that it’s not actually granting money to Aurora, because that would quite possibly be illegal. (No judge has ruled on the issue, as far as I know.)
You see, the idea behind these revolving loans funds is that Congress and the state put together a pool of money to use as a bank for water treatment projects. The loan fund exists to issue low-interest loans for water projects, and gradually grow as the loans are repaid with interest.
But the administering agencies are not supposed to issue grants, which would deplete the capital the agencies were entrusted with.
Under the federal law that created and paid for state water pollution control revolving funds, such revolving funds “may be used only… to make loans,” to finance or guarantee bonds and other debt, to cover administration costs, or to earn interest in an account. The relevant paragraph – 33 U.S.C. 1383 (d) – does not allow for grants or other giveaways of the federal money that funded the program.
The relevant state law says that “All moneys credited to the water pollution control loan fund, all interest earned on moneys in the fund, and all payments of principal and interest for loans made from the fund shall be dedicated in perpetuity,” so that they can be “used and reused” exclusively for the fund’s purpose.
Grant money that isn’t repaid, of course, can’t be used and reused.
Mike Settles, a spokesman for the state EPA, conceded that the federal statutes don’t allow for grant funding. His explanation:
“No special statutory authority is needed to create these different funding mechanisms, but they are presented for public review and comment as part of the required annual Program Management Plan before they are initially implemented. For the WRRSP, this was done in 1999, before it was formally initiated in 2000.
“Ohio’s water quality scientists have long recognized the need to protect and restore the state’s high quality stream and wetland resources, especially their physical habitat, in order to meet state and federal water quality goals. However, since the federal statutes creating the (state revolving funds) do not allow for grant funding, and since – unlike traditional sewer and wastewater treatment plant projects that have an existing customer base that can repay project loans – most stream and wetland projects do not have a ready-made loan repayment stream, a special mechanism had to be created to provide the necessary funding through the loan program for these critically important projects. The WRRSP is that mechanism.”
Here’s why this matters, aside from the narrow question of whether or not it breaks the law.
The Plain Dealer asked Alan Shorr, Aurora’s law director, whether the city could have funded the project itself.
“Could this have come out of our general fund?” Shorr responded. “Well, I guess anything’s possible, but to do that you would have to reallocate funds for roads, water lines and all the standard stuff that municipalities have to provide. And I don’t see that happening.”
What Shorr didn’t say was that Aurora had already considered buying the golf course. It even made an offer of $3.1 million before backing out.
But when the city doesn’t have to spend its own money, then $4.7 million isn’t too high a price to pay.
If a local community wants to spend its scarce public funds buying up a tax-paying, job-creating business just to shut down, that’s its prerogative. But when state and federal laws are ignored (or danced around, in the most generous interpretation), and the money isn’t yours, and the purpose is so completely mush-headed, it’s a different story.
There are tens of thousands of golf courses in this country, all using fertilizer, most crossing streams, and government wasn’t instituted to shut them all down.