Hood River (again) wins USDA appeal

The city of Hood River can again claim victory of the US Department of Agriculture in an attempt to get back funds to complete a waterline project.

However, just as it did after winning a previous appeal against the USDA to get the funds restored, the city is waiting to get excited until it actually sees the money.

“It’s a necessary but a not sufficient step to make sure we get the money,” said Hood River mayor Arthur Babitz.

James Murphy, the Deputy Directory of the USDA appeals division, found the USDA's decision to withhold the funds to be “inconsistent with applicable laws and regulations.”

Following the USDA's revocation of the funds in 2011, the city appealed to the USDA regional office. A hearings officer on the case determined that the USDA had errored in revoking the funds. The USDA followed that appeal by appealing for a director's level, national office review of the hearing officers decision.

In 2009, Hood River applied for approximately $23 million in federal funding through the USDA to help improve a watermine, refurbish a resevoir and conduct bridge repairs.

After the funds were authorized, the city informed the USDA that the actual costs on the projects would be significantly lower than the $23 million granted to the city and requested to use $9 million in remaining funds to replace five miles of pipeline between two resevoirs.

The USDA initially approved the request in June 2011, but then revoked the funds the following September and declared them excess.

The USDA claimed that it was obligated to revoke all excess funds from projects.

“I am not persuaded by the Agency's argument,” Murray writes in his decision. He later states that the agency failed to apply its regulations correctly, and should not have revoked the funds from the project after construction had already commenced.

“While the Agency in its request for Director review may disagree with the Hearing Officer's determination, mere disagreement does not form a basis for reversal,” Murray wrote.

While Murray upheld the hearing officer's decision to restore the funds to the city, the USDA still has discretion on how and when to distribute the money to the city.

“We want them to exercise that discretion appropriately,” Babitz said. “It’s just one more step in a long-long process.”

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