Development firm files claim against City of Lemoore for breach of contract

James Clark, president of KCDC, aided by Visalia-based attorney Michael Farley, submitted a claim last month alleging the City of Lemoore breached its contract with the KCDC to apply for and administer the block grant.

According to the claim, “the terms of the proposal were that KCDC would not bill for its services in preparing the CDBG grant application, and in exchange, the city would pay KCDC to administer the grant in the event that the grant was ultimately awarded to the city.”

Based on the successful KCDC application, the City of Lemoore was indeed awarded a grant of $1,419,391 on October 7, 2014. The grant funds would be used to make improvements to the Lemoore Senior Center, bringing the facility up to code, repair damage due to age, improve energy efficiency, and install solar energy and more.

In September, 2013, the Lemoore City Council, acting on advice from former City Manager Jeff Laws, and the city attorney, Laurie Anne Avedisian-Favini, suggested that the city enter into an agreement with KCDC’s Clark to prepare a CDBG application for the Lemoore Senior Center and that KCDC, in addition to preparing the application, be allowed to administer the CDBG funds.

In an August 30 memo to councilmembers, Laws asked them to award the application contract to KCDC. Clark said his firm proposed to do the application for no fee other than reimbursement for expenses. Laws also told councilmembers that “the city would agree that if awarded grant funds, it will enter into a sub recipient agreement with KCDC to administer the grant.” The fees will be specified in the sub recipient agreement.

At the council’s Sept. 3 meeting, former Councilmember John Gordon moved that the council accept the city manager’s recommendation and enter into a contract with the KCDC. Then Councilmember Lois Wynne seconded it and Eddie Neal, Willard Rodarmel and Billy Siegel voted for the motion.

The claim submitted last month suggested any award could exceed $10,000 and include up to $99,027 (value of the CDBG Grant Administration Award); up to $141,468, the value of actual delivery.

However in a memo to the Lemoore City Council dated July 29, 2015, Interim Planning Director Judy Holwell told councilmembers and city staff that despite its earlier agreement with KCDC, and after meeting with CDBG officials, the city determined that due to CDBG’s terms and conditions, the city could not allow KCDC to serve as the city’s sub-recipient and thus administer the loan, thereby cutting them out of the process.

In her memo, Holwell explained that the project can be managed by the City, with some outside assistance.

The city is currently working with Senior Center staff to get the project rolling and determine its priorities.