Housing group's woes may transfer to authority

February 10, 2006

PAT LITOWITZ
plitowitz@ncnewsonline.com

The Lawrence County Housing Authority's executive director insists the authority will not be responsible for a nonprofit agency's problems.

However, a former management agreement between the authority and Affordable Housing of Lawrence County may shift one group's headaches, loans and properties to the other.

The authority created Affordable Housing in August 2003. The authority's board provided the group with a $200,000 no-interest loan and turned its coin-laundry operations over to the new agency.

The nonprofit group, which seeks to provide housing to handicapped individuals and low-income senior citizens, kept a low profile until December. That's when it purchased seven properties for $327,500. Overall, the group owns eight properties in New Castle.

Affordable Housing's purchasing practices have since come under scrutiny and five of its board members resigned in December and January. Donald "Ducky" Conti was the last to leave.

Conti, who also serves on the housing authority board, said the management pact may pose problems for the authority.

"Apparently Bob (Evanick, the authority's executive director) never paid attention to it, or whoever made up the contract for it," Conti said. "Technically, we're liable for the properties that Affordable Housing bought.

"We could be liable for that according to our contract the way it's worded."

Last month, the authority board rescinded its management agreement with Affordable Housing and sent the group a 60-day notice that it was terminating the coin-laundry contract.

"We're examining the situation of the management agreement," authority solicitor Louis Perrotta said after Feb. 9's board meeting.

Perrotta said he has no indication Affordable Housing is going to fold or terminate its nonprofit status. He also said he could not comment on the authority's liability regarding Affordable Housing's debts.

"I do know that there was no authorization or resolution from the housing authority with regards to those loans," Perrotta said. "That's something we need to take a look at also."

In Affordable Housing's revised articles of incorporation, the group stated that if it dissolves, its assets will be distributed to another nonprofit group or groups.

Evanick, who served as Affordable Housing's first chairman, said he had no particular group in mind when that section was added.

"I didn't foresee it," Evanick said.

Conti said that last week, Bill Bonner, Affordable Housing chairman, sent a letter to Evanick.

"I guess they were looking at the contract," he said.

Affordable Housing wanted to know if the authority would take over the properties because it took over the laundry service, Conti explained.

The U.S. Department of Housing and Urban Development, which provides the authority with its funding, is investigating the business dealings between the housing authority and Affordable Housing.

HUD requested officials from both organizations not discuss the investigation.

"I don't know how long it's going to take," Bonner said. "We met with them this week."

Bonner said he could provide no other comment.

Bonner and Deno DeLorenzo, Affordable Housing's accountant, are its lone board members.

Copyright (c) 2006, New Castle News