Fallout from a recent report issued by the federal department of Housing and Urban Development made it to the city council Monday night.
The council unanimously approved resolutions authorizing the mayor to sell and convey two properties associated with HUD’s June contention that the city’s Economic and Community Development Department “improperly spent” nearly $200,000 in HUD funds and failed to properly document more than $279,000 in additional expenditures for the 2012 program year.
HUD said the city must repay the initial amount or have the money cut from its 2013 funding. If documentation on the other findings is not provided, that amount will have to be repaid or forfeited from 2013 funds as well.
The council approved the sale of of a building at 1101 Main Street for $45,000 and a lot at 720 Cypress Street. The transaction amount for the Cypress Street lot was not immediately available.
ECD’s Larry Matthews told Mayor Debe Hollingsworth and the council that HUD had prescribed the sales as a means of remedying findings concerning the properties. Matthews had been ECD’s interim director since Hollingsworth negated his promotion to director by former mayor Carl A. Redus Jr. on the last business day of Redus’ administration in December. But at Monday’s meeting, the council gave full support to a resolution asking that Matthews be reinstated as director and compensated as such.
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Alderwoman Thelma Walker, who co-sponsored the resolution with Alderman George Stepps, also directed that Matthews’ salary increase was to be retroactive to the date he was “demoted.” Hollingsworth said little in response.
The previous director, Donald Sampson, retired in September 2012. Afterward, Ted Davis — Redus’ top aide — was said to be overseeing the department until Matthews’ appointment.
The Main Street location in question was acquired by the local department at a cost of $50,110 to serve as a headquarters for three HUD programs, but was never employed as such. Hollingsworth noted that ECD spent approximately $30,000 on re-roofing the building after purchasing it, so the city will wind up losing about $35,000 on the building’s sale.
However, the buyer — Liberty Corp. — is expected to bring in 15 jobs.
Two other council-endorsed resolutions involved ECD.
One amended a previously approved resolution in order to reduce from $100,000 to $65,976 an allocation to the Jefferson County Community Development Corp. from HUD funds for the 2011 contract year. The other awarded JCCDC $117,600 in project proceeds generated from the sale of one of three homes that JCCDC was contracted to build near the University of Arkansas at Pine Bluff.
Matthews said last week that responses to HUD’s findings were expected to be ready by the end of this week, but Hollingsworth said at the council meeting that the responses may not be prepared until around Aug. 15.