Update: Hoiseth tells Times it's "unfortunate" that Stassen would have to make these claims and won't meet with him privately.
In a multi-page email obtained by the Crookston Times that was sent to the Crookston City Council by City Administrator Shannon Stassen shortly before 4:30 p.m. on Friday, Nov. 1, Stassen concludes with the following:
"A change must be made at CHEDA. Crookston deserves better. If the City Council is not willing to act to remove the CHEDA Executive Director and reform CHEDA, then I am asking for a Separation Agreement from the City of Crookston. My attorney will consult with the City Attorney and Assistant Mayor to craft the terms.
"Leaving public service is not my wish, and I have done my best to overcome the challenges," Stassen continues in the email, "but this has risen to a level that is beyond my toleration point."
Reached by the Times Saturday, Nov. 9, CHEDA Executive Director Craig Hoiseth said it's his understanding that he can be terminated by his board of directors, but not by the city council. There are council members who serve on the CHEDA Board, and Vice Mayor Dale Stainbrook, currently serving as mayor since Guy Martin's resignation, is the liaison between the council and CHEDA Board.
Asked for his reactions to various accusations made by Stassen in his email, Hoiseth indicated that he will continue to serve "at the will" of his board of directors and continue to work on initiatives that "make the Crookston community better."
"It's unfortunate that Shannon would have to make these claims," Hoiseth told the Times later Saturday. "I wish over the past several weeks and months that if he had concerns we would have met privately to work things out for the best of Crookston."
"Instead of working with me correcting things he felt were wrong, he was harboring it and coming out against me," Hoiseth added.
The Times reached out to Stassen on Saturday as well, and he said he had no further comment at this point. "The email says most of it, especially the attachments verifying my conclusions," Stassen said.
In another twist to this ongoing saga involving friction between Stassen and Hoiseth, when the Crookston City Council Ways & Means Committee meets on Tuesday, Nov. 12, at Stassen's request they are scheduled to go into a session closed to the public and media in accordance with statute in order to conduct a performance evaluation of the city administrator.
The timing of changes and the public dissemination by Hoiseth regarding the local match required by the Minnesota Department of Agriculture for $1 million it has committed to help cover permitting costs with the proposed Epitome Energy soybean crush and biodiesel facility in Crookston appears to be the last straw for Stassen, according to the Nov. 1 email. At one point, the match was reportedly dollar for dollar, but MDA eventually changed the ratio, requiring four local dollars be invested for every $1 MDA will kick in. With the City and CHEDA joining forces to provide a $250,000 forgivable loan to Epitome and its founder and CEO Dennis Egan to go toward permitting costs, Stassen and others are concerned that the $250,000 will be exhausted, MDA will at that point have kicked in only $62,500 of its $1 million, and Egan will lack the funds, from the Epitome equity drive currently underway, to keep paying the permitting bills as they come due. Faced with these concerns in recent Epitome Energy-related discussions, Egan said he would not come back to the City or CHEDA to seek more money for the permitting process. The advisory committee subsequently discussed the matter and unanimously agreed to pay the first two permitting-relating bills totaling approximately $48,500, to which MDA will contribute funds in accordance with its match ratio. The CHEDA Board followed up with its own unanimous approval of a motion to pay the two bills.
In his email, Stassen indicates that Hoiseth's lack of transparency regarding the change in MDA's match ratio is the "most egregious."
Note: When the CHEDA Board met Oct. 22, CHEDA Executive Director Craig Hoiseth alerted the board to the MDA match ratio changing. Stassen said there was a signed agreement on Sept. 13 that included the four-to-one match from the MDA, but Hoiseth said even after Sept. 13 Dennis Egan and his team were seeking a dollar-for-dollar match from MDA. But in an Oct. 10 letter Egan indicated that the MDA match ratio was officially four-to-one, and Hoiseth said he notified his board Oct. 22.
Regarding the Epitome Energy project in general, Stassen in the "summary" portion of his email states that the entire project "has been mishandled and the public, elected officials, appointed officials and City Staff have been lied to in order to move it forward."
Stassen continues: "I simply cannot continue in this environment, professionally I will be held accountable for the ineptness and unethical nature of CHEDA. I cannot be associated with this any longer and the City should not be exposed to this risk either."
Earlier in the email, Stassen indicates that for 5 1/2 of the six years he has been city administrator, he and his staff have been "under constant attacks, both subtle and overt in nature." He says the source of the attacks, "insinuations and misinformation" has always led back to CHEDA and Hoiseth.
Stassen states in the email that he has "observed and been informed of continuous issues that arise from the general practices of CHEDA. Lack of accountability, lack of transparency, lack of ability to follow procedures, statutes and City policies is the hallmark of CHEDA operations."
Stassen indicates that the many examples he details in his email "reveal concrete evidence" of issues that negatively impact the Crookston community and its residents, due to Hoiseth's "actions." But, Stassen continues, the list of issues detailed in his email is "not at all comprehensive. There are many other examples that could be brought forward if an extensive investigation were to take place." "The City of Crookston, City Council, CHEDA Board Members, CHEDA Advisory Committee Members and City Staff are all at risk because of the behavior of the CHEDA Director," Stassen continues. He underlines "are all at risk" in the email.
Stassen goes on to state that the "City of Crookston will rise above all this in time." He states: "When integrity is restored, the public will eventually regain trust. If everyone continues to pretend this issue does not exist, the public will continue to distrust the City and City Council. It is incumbent upon all of us to work to restore that trust."
Note: Stassen became the Crookston City Administrator in 2013. In early 2017, the relationship with CHEDA and Hoiseth was a focus of Stassen's third-year evaluation. Then Mayor, Wayne Melbye, said it came down to a "territorial thing" as there was some overlap in duties regarding things like City/CHEDA loan programs. After meeting with Stassen and Hoiseth together, the result was an updated “flow chart of City operations when dealing with crossover projects involving CHEDA” agreed upon by all parties. In December 2017, council members asked for another evaluation of Stassen later citing the March 2017 evaluation did not rise to the level of an annual review with laid out goals and objectives. Later in January 2018, Stassen was put on a 90-day improvement plan and it was asked that he delegate work on various key projects to agencies like CHEDA. Then, 52 days later, Stassen's evaluation was on a special meeting agenda but immediately adjourned after then Mayor Melbye took blame for Stassen "not being properly made aware of what he needs to improve on" between the January closed session and that night's brief special council meeting. In April 2018, a detailed plan was laid out for Stassen and he was directed to improve communications with the council and meet with Hoiseth on a weekly basis.