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Mayor called out over HUD home proceeds |

Mayor called out over HUD home proceeds

Michael Cope
| Thursday, October 13, 2005 12:00 a.m

Along with the city’s solicitor, several Connellsville council members accused Mayor Judy Reed of lying Wednesday to stall an earmarked expenditure.

The money in question is part of $50,000 in proceeds from a low-income housing deal Reed brokered on behalf of the city.

The city bought the house at 203 W. Washington Ave. for $1 from the federal department of Housing and Urban Development through the agency’s Dollar Home Sales program. The home was then sold for profit to a family that met HUD regulations.

An addendum attached to the bill of sale, which Reed signed, stipulates that proceeds must be used for property development in the city, including the removal of blighted property.

Councilman Charles Matthews, head of health and public safety, proposed that $30,000 of the $50,000 total, designated as the “Good Neighbor Program Revitalization Account,” be spent to demolish a condemned building at 140 S. Pittsburgh St., which was destroyed by fire.

The money was allocated last month, and $8,000 more from the city’s Parking Lot Account was approved yesterday to meet a bid of $38,000 from Ritenour and Sons Construction.

However, Reed presented Solicitor Joseph Ferens and council with a letter from HUD about 10 minutes before the meeting that reinforces her assertion that the project is not an approved use of the money.

“Please advise city council that using the funds for demolition of a property that is not owned by the city/HUD doesn’t qualify as proper use for proceeds under HUD’s Dollar Home Sales program,” the letter states.

Reed’s attempts to reach Ferens and council earlier in the day about the letter were suspiciously unsuccessful, Ferens and several council members asserted.

During a telephone conversation at 4 p.m. yesterday, Ferens said he asked Reed the name of the HUD representative who sent her the letter, and she said she couldn’t recall the name. However, Ferens said, Reed had read him the letter during the same conversation, and the representative’s name appears at the bottom.

“I’m not going to sit here and listen to you twist words,” Ferens said to Reed. “I asked you who wrote the letter, and you wouldn’t tell me.”

Then, Ferens said, he asked Reed to fax the letter to his Uniontown office, and at 4:53 p.m. he received a blank page.

“I know you’re not for this (project),” Councilman Bruce Jaynes said, “and that right there speaks volumes.”

Reed said she was busy and may have inadvertently put the letter into the fax machine backwards, and that she just wants the money to benefit the entire city — her original vision.

“How can you explain that away?” Jaynes said. “If people want to know the truth — this is the truth right here.”

The letter from HUD, which is signed by Walter Hawthorne, of the Real Estate Owned Division, is stamped with a 3:26 p.m. time marker. That is when Reed received the message, she said.

But Matthews accused Reed of lying to council. He said she must have known the letter was coming earlier in the day because City Clerk David Pinkosky told him the news at about 2 p.m. at the mayor’s request.

“I’m sure it (came) after you called them a half dozen times so you’d have something here tonight,” Matthews said.

Reed said spending the money improperly could result in the city being forced to pay it back in the future or could make Connellsville ineligible for future HUD programs. She also said council members could face felony charges.

Both Jaynes and Matthews said the statement was meant as a threat.

“It’s ridiculous,” Matthews said. “Just so we can get through this council meeting smoothly, I’ll remove the last line (of the resolution).”

The last line is where Matthews stated that the money for the demolition project would come from the HUD house proceeds. He could remove that portion, Jaynes said, because the money already was allocated by council last month.

After reading the resolution four times, and with Reed pressing him to state where the money is coming from, Matthews went back to the original version, adding the words “contingent upon the solicitor’s approval.”

The last sentence of the resolution will give Ferens a chance to find the discrepancy between the original sales addendum that allows the money to be spent on demolishing blighted properties and the contradicting advice in the HUD letter.

The resolution passed 4-1, with Reed casting the only dissenting vote.

“It is not the responsibility of taxpayers to assume the responsibility of a property owner,” Reed said. “There is a legal procedure for code enforcement.”

Reed said the proper protocol is to cite the owner of the property in order to force them to incur the cost of demolition. To that point, Matthews said the property is a safety hazard and is now the responsibility of the city.

“We cannot use this money to tear down private property,” Reed countered.

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