April 03, 2006
By Pat Litowitz
New Castle News
(First in a series)
Within a short time of its inception, Affordable Housing of Lawrence County faced a credibility issue.
Attorney Joseph Kearney raised the first red flag almost three years ago. It was one of several that members of the Lawrence County Housing Authority board ignored as the nonprofit housing agency began operation under questionable circumstances and ended mired in debt and controversy.
At the authority’s July 10, 2003, meeting, executive director Robert Evanick asked the board to approve a management agreement between the authority and Affordable Housing. Without discussion, Gary F. Felasco, Jeffrey Scrim, James Graves and Robert Heath OK’d the measure.
A few minutes passed. Another motion was voted on. Kearney, then authority solicitor, addressed the board.
“I would like to make it clear for the record that I had nothing to do with the preparation of this agreement or am I passing on its legality.”
No response from the board.
Evanick then presented a resolution requesting that the authority lend the fledgling group $200,000. The terms were favorable. When the agency’s units had full occupancy, payments would start after six months. Again, a 4-0 vote in favor.
No paperwork. No credit check. No waiting.
Getting $200,000 had never been easier. Only an ATM dispenses cash faster.
The nonprofit housing agency had funding in place before it was even formed.
“The entity does not exist to my knowledge,” Kearney told a reporter after the meeting.
A month later, attorney Ed Leymarie filed paperwork that gave life to Affordable Housing of Lawrence County. Evanick would serve as president. Authority employees Gene DiGennaro and Dennis Vincent were named secretary and treasurer, respectively.
Use it or lose it — that was the $200,000 incentive behind Affordable Housing.
The money provided to Affordable Housing was generated from the authority’s Section 8 administrative fees, which are paid by the U.S. Department of Housing and Urban Development.
The fees compensate the authority for management of authority properties receiving HUD funding.
“The incentive is, obviously, to manage your program effectively and efficiently,” said Perry O’Malley, executive director of Butler’s housing authority. “Any funds left over belong to the housing authority and not HUD.”
However, in May 2003, HUD clarified its policy regarding funds in excess of administrative fees needed to run the authority. The federal agency announced it would re-evaluate funding based on a formula comparing 2003 fees to 2002.
Authorities with reserves in excess of HUD guidelines would be penalized.
Evanick said he worried that if the excess money went unused, HUD would reclaim it.
“What should we do with this money?” Evanick asked. “There were ideas kicked around.
“Other housing authorities form nonprofits and do other things with the money. That’s what started it.”
It was that argument Evanick provided to the authority board in pushing for Affordable Housing.
“I thought we were going to lose (the money),” Heath said in voting for the measure. “Affordable Housing would have been a good idea if it would have been done right.”
Graves said he would not discuss the issue.
Attempts to reach Felasco and Scrim for comment were unsuccessful.
Affordable Housing’s shaky beginning signaled future problems: questionable purchases, missing funds, poor record-keeping, nonexistent oversight and abandoned responsibilities.
“This is not what I envisioned at all,” Evanick said.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment