ALBANY, Ga. -- The U.S. Department of Housing and Urban Development said it will stick to its regulatory procedures and demand the city of Albany immediately pay back $374,000 that the federal agency said was spent on a local low-income housing development, despite a call from a local congressman requesting a 60-day deferment of payment.
In a letter dated April 14, HUD Regional Director Karen Jackson-Sims wrote U.S. Rep. Sanford Bishop, D-Albany, to say that while the agency appreciated the situation the city of Albany and Cutliff Grove Family Resource Center now find themselves in, they "must adhere to our regulatory requirements."
"It is our desire that the city understands our regulations to ensure that this does not happen in the future," Sims wrote.
The letter is in response to one written by Bishop on April 7, in which he asked HUD for a 60-day delay on repayment of more than $374,000 in funds that were spent on Cutliff Grove's Grovetown Project.
The Albany City Commission passed a resolution on April 6 asking Bishop to intervene and write HUD on the city's and the church's behalf, in hopes of delaying repayment until other options could be worked out.
According to the April 14 letter from HUD, the city essentially has two repayment options: either pay the money from its general fund or submit a voluntary grant reduction in lieu of repayment, which would keep tax dollars from being spent but would cut the city's ability to provide assistance to the poor.
HUD declared the Grovetown project ineligible and demanded repayment after the city decertified Cutliff Grove as a valid Community Housing Development Organization when Cutliff Grove failed to meet certain requirements, including financing obligations.
The letter from HUD paints a bleak picture of both the city's and the church's involvement in the project, starting from when the project was first set up in the HUD accounting system in 2006.
According to the letter, "HUD regulations state that construction should reasonably be expected to start within 12 months. To date, construction on this project never started."
It continues, "HUD performed the on-site review citing the city with non-compliance issues on Aug. 18-21, 2009. On Feb. 9, 2010, after reviewing additional documentation submitted by the city, HUD notified the city that the project was ineligible and funds would have to be repaid."
Using local taxpayers' money to repay the federal government hasn't set well with some residents of Albany and Dougherty County, prompting many to air their concerns about where the money was spent at albanyherald.com.
According to Latoya Cutts, the city's current Community Development Director who was not in charge of the department when the Cutliff Grove deal was brokered, city officials have gone through and accounted for most of the money that was spent on the project.
According to Cutts, most of the money went to buying the land for the site, pre-planning and engineering and architectural work. Some of the funds were also used to relocate current tenants on the property where builders would have to conduct demolition.
Regardless, the situation has prompted more than one city commissioner to consider asking District Attorney Greg Edwards to launch an investigation into the deal to find out what money was spent and how. But to date, no formal request has been made.