Authority revokes laundry operation

Date: January 13, 2006

PAT LITOWITZ
plitowitz@ncnewsonline.com

The financial health and future of Affordable Housing of Lawrence County appear to be in jeopardy.

The Lawrence County Housing Authority yesterday gave the nonprofit agency 60 days to return the coin-laundry operation to the authority's control.

Chairman Robert Heath led the move to return the funds to the housing authority. The vote was 3-1, with Heath, Ernestine Wise and new board member William Betz supporting the action. Donald "Ducky" Conti voted no.

This was Heath's second effort to cancel the laundry contract, which covers 20 washers and 19 dryers. His first was last May.

"You're taking money from Affordable Housing, which is part of their income to pay back their loan," said Conti, who also is Affordable Housing's secretary.

"The last time I made that motion you said that," Heath responded. "In the meantime, you bought houses. Now, you get an income. Am I correct?"

ASSISTANCE

On Nov. 13, 2003, the housing authority helped the fledgling group by turning over its laundry operations at Lawrence Manor, Skyview Towers and McGrath Manor in New Castle and Crescent Place in Ellwood City. Affordable Housing also received a $200,000 no-interest loan from the authority.

In December, Affordable Housing bought seven properties for $327,500. As part of the purchase, the agency secured a $250,000 mortgage through First Commonwealth Bank. On June 29, Affordable Housing used a property it owns on Cunningham Avenue to obtain a $40,000 loan at First Commonwealth Bank.

Bill Bonner, a bank official at First Commonwealth, is Affordable Housing's chairman. Bonner has said he excused himself from any business dealings involving Affordable Housing and the bank.

"The only income we had at the time was the laundry," Conti said in reference to the mortgage loan application.

"They factored that money in with what we're getting from our rent. That's the reason we got into that mortgage, because we had the money."

DIFFERENCES

Records obtained by the New Castle News show a discrepancy in the amount collected from the coin laundry operations by the housing authority and what Affordable Housing pulled in.

According to housing authority information, the authority collected $17,480 from January to December 2003. That averages about $1,457 per month.

From September 2004 to August 2005, Affordable Housing received $11,830 from the coin-operated machines. That averages about $986 a month.

The difference collected between the two agencies is an average of $471 monthly.

Figures from January 2004 to August 2004 were not made available to The News.

"I can't explain it," Evanick said of the drop. "Mr. Conti and Mr. Jon Librandi handled that."

Librandi, who had been Affordable Housing's treasurer, died in October 2005 of injuries suffered in a motorcycle accident.
Inconsistencies in the reporting of coin-laundry revenue also extend to Affordable Housing's reports to the Internal Revenue Service. Because Affordable Housing is recognized as a nonprofit entity, it must file a Form 990 annually. The annual "Report of Organization Exempt From Income Tax" must be made available for public inspection.

In its 2003 filing, Affordable Housing reported it made $8,000 from coin-laundry income.

However, Affordable Housing took over control of laundry operations on Nov. 14, 2003.

Based on housing authority numbers - an average of $1,456.6 collected monthly in 2003 - November and December 2003 should have generated $2,913. That figure is nearly $5,100 less than what Affordable Housing reported to the IRS.

NO MONEY?

In its 2004 IRS filing, Affordable Housing reported no income from its laundry operations.

Evanick was the nonprofit group's chairman in 2003 and 2004. He resigned in December.

"I don't know who did it," he said of the 2004 IRS filing. "I never saw it."

Evanick signed the form in 2003, while Conti's signature appears on the 2004 form.

Conti acknowledged the $985.83 monthly average Affordable Housing collects appears to be correct. He said he would need to check the agency records.

Conti, who joined the board in 2004, said he could not comment on the 2003 filing. As for 2004, he said, "I have no clue on this stuff."

Conti added that Librandi was responsible for collecting money from the washers and dryers. Upon his death, a county deputy sheriff handled the task.

A STRAIN

The housing authority's action will further strain Affordable Housing's resources, according to Conti.

He said the agency has $13,000 in operating revenue, in addition to rent payments and the final two months of laundry collections.

The planned purchase of six more properties in early March will be reviewed, he said.

"We're still going to look at doing that."

In the meantime, Evanick is showing little sympathy.

"What they do with it now, it's up to them," he said. "We're not liable for Affordable Housing."

As for Conti, he said, "These guys down here (at the housing authority) have no backbone. As soon as their names hit the paper, they want to fly. They're scared.

"There is nothing to hide."

Copyright (c) 2006, New Castle News