Wcr | june 25 | 2014

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W A S H B U R N   C O U N T Y

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INSIDE

June 25, 2014

Wednesday, June 25, 2014 Vol. 125, No. 45 • Shell Lake, Wis.

We e ke nd w atch

• “The Boogeyman’s Apprentice” youth production @ the Quam, Shell Lake • Cakes at the Lake @ Hunt Hill • Master jazz concert @ Shell Lake • See calendar on page 6

75¢

Quality time with Grandpa

McKayla Olson crowned Spooner Rodeo queen Page 11

Volunteers install playground equipment Page 12

Spooner youth softball under way Page 14

BREAKERS

Got an idea for a story? Email us @ wcregister@centurytel.net

SHELL LAKE — The Shell Lake Community Blood Drive is set for Thursday, June 26, noon to 6 p.m., and Friday, June 27, 9 a.m. to 2 p.m. The 100 Days of Summer, 100 Days of Hope drive is held at the Shell Lake United Methodist Church fellowship hall. Blood is especially needed this time of year, so please schedule your donation today by calling 800-733-2767 or online at redcrossblood.org. — from SLCBD

Early copy, please SHELL LAKE — With the Fourth of July holiday approaching there will be an early deadline for advertising and news articles for the Wednesday, July 2, edition of the Register. All copy is due no later than noon on Friday, June 27. The newspaper office will be closed on Friday, July 4. — WCR

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Adrianna Ness and her grandfather, Gary W. Scalzo, took the time to participate at the veterans appreciation BBQ and flag retirement ceremony at the American Legion Hall in Spooner on Saturday, June 21. Scalzo is a Vietnam veteran who was stationed in Cam Ranh Bay. More photos on page 2. – Photo by Larry Samson

State, regional agency at odds over $2 million loan Danielle H. Moe | Staff writer SPOONER — A $2 million loan for a local business start-up has started a dispute between the Northwest Regional Planning Commission and the Wisconsin Department of Administration. “The state, without including us, went ahead and made a repayment agreement with Flambeau River Biofuels and the loan is currently being repaid to the state,” said Myron Schuster, executive director of the Northwest Regional Planning Commission. This is the heart of the NWRPC story, but not the whole picture, says Stephanie Marquis, spokesperson of the Department of Administration. This confusing and unique situation began in 2010 when Flambeau River Biofuels was waiting for approval of loan guarantees from the U.S. Department of Energy to construct a $250 million biofuel refinery next to the Flambeau River Papers mill in Park Falls. At the same time the biofuels company applied for a Community Development Block Grant, a program of the U.S. Department of Housing and Urban Development, from the state through Price County, which is part of the Northwest Regional Economic Development Fund. The state then issued Price County a $2 million grant and Price County gave Flambeau River Biofuels the $2 million loan. “So when they (Price County) made the loan to Flambeau River Biofuels they then transferred the loan to us (the NWRPC) and so we hold the loan,” said Schuster. However the U.S. Department of Energy loan never came through and the biofuels plant never got started. This is where the DOA says their actions of reclaiming the loan were appropriate. “The Flambeau River Biofuels project was required to create and maintain 40 jobs to receive its federal funding, as well as provide documentation to show those jobs were indeed created. They did not create jobs as required by the federal guidelines, and now that money must be repaid to the state. The repaid funds will be added back into the pool of state grant money so that communities can help expand economic opportunities and affordable housing in Wisconsin,” explained Marquis.

According to Marquis, in September of 2013, the DOA requested copies of the loan reassignment documents between Price County and the NWRPC, but they never received any. The contract agreement between the Department of Commerce (now the DOA), Price County and Flambeau River Biofuels requested that NWRPC assign the loan back to the DOA so the state could collect on the loan. According to Schuster, Flambeau River Biofuels was making loan repayments to the NWRPC, until the DOA reassigned the loan. The NWRPC contends that those loan repayments should be made to them, not to the state. Schuster said they are in talks with the state Department of Administration to sort the issue out. “So we are having those ongoing discussions with the state trying to convince them that we should receive that $2 million repayment rather than the State of Wisconsin Department of Administration,” he said. At the time the $2 million loan was made the positive effects of the biofuel plant on the economy in Park Falls, a small Northern Wisconsin community, looked good. The plant was expected to create 160 construction jobs, with 40 permanent jobs created to operate the biofuel facility, making 125 jobs for loggers and truckers who would have supplied the mill with 1,000 tons of dry wood a day. The plan for the biorefinery was to burn a blend of sawdust, bark and wood that was not needed for the pulp and paper mill to make diesel and wax. “That is $2 million that, as it was repaid, we could have re-lent, loaned out to other businesses in the region to help them, and we won’t have that money to be able to do it, so it is basically going to hurt the businesses in our 10-county region,” explained Schuster. The loss of the loan has forced the agency to write off the loan as a bad debt, in turn reducing their loan fund from $9.5 million to $7.5 million. Marquis reports that HUD agrees that the actions taken by the state DOA were consistent with federal policy for remediating failed project activities. Butch Johnson is the majority owner of Flambeau River Biofuels and Flambeau River Papers.

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