The three counties that remain in the beleaguered South Jersey Economic Development District - Cape May, Salem and Cumberland - have all passed resolutions calling on the district to prove it is financially viable by the end of this month, or they will dissolve it.
Interim Executive Director Steve O'Connor, who is being paid $9,500 a month to sort out the SJEDD's tangled financial situation, has said he believes the agency's problems are correctable.
But the latest revelation - that $390,000 is missing from the SJEDD's revolving loan fund and was apparently used for operational expenses under ousted Executive Director Gordon Dahl - has convinced us:
It's time to pull the plug on this poorly structured, loosely monitored agency that is now nearly $1 million in debt.
Dahl is being blamed for most of the agency's troubles. His salary increased 40 percent between 2006 and 2011 while the SJEDD oversaw the construction of $7 million of infrastructure for the Next Generation Aviation Research and Technology Park in Egg Harbor Township - and accumulated hundreds of thousands of dollars in debt in the process.
Dahl's critics say neither he nor the SJEDD were up to a task of that magnitude. Contractors weren't paid, required audits weren't done, funds were unaccounted for.
Members of the SJEDD's revolving board, which includes freeholders from each county among others and meets only four times a year, said they had no idea about these problems. But there's more at work here than the failings of one person.
While there are hundreds of such economic development districts around the country, the SJEDD is the only one in New Jersey. That's a little odd by itself. If these districts are such a good idea, why aren't there more of them in the state?
The purpose of the economic development districts is to secure grants from the federal government and lend the money out at 5 percent interest for projects to boost a region's economy. As the loans are repaid, new loans can be made from the revolving fund. The interest is supposed to cover administrative costs - but somewhere, somehow, it all got away from the SJEDD.
Atlantic County pulled out of the partnership in January. Completely dissolving the agency will be complicated. O'Connor has said there will be costs associated with disbanding the agency. Remaining grant funds will have to be returned to the federal government. Debts will have to be paid. And Dahl has filed a $7.5 million tort claim over his firing.
It's a complicated mess. And, in our opinion, too much of a complicated mess for the SJEDD to be resurrected. The board has already sensibly suspended the revolving loan program. The goal now should be to figure out as quickly and efficiently as possible how to disband the agency at the lowest possible cost to the public.
There will be a cost. But at least then it will be over and done with. It's time for the counties to cut their losses.