The U.S. Housing and Urban Development Department has declined to fund the Community Development Block Grant for Paris Gibson Square.

Earlier this year, in what became a controversial grant process, PGS was allocated $27,927 to make a restroom handicap accessible.

The city CDBG grant requests are reviewed by the Community Development Council, which then makes recommendations to the City Commission.

During this year’s process, a CDC member did not disclose or recuse herself due to a conflict of interest with PGS. When PGS was not recommended for funding, Heidi Gibson, from PGS, requested the scoring from the city.

“It is not uncommon to ask for a critique of a grant when it is not funded,” Gibson said in a release from PGS. “In fact, it is the best way to get good feedback so that the next proposal will be stronger.”

One CDC member scored PGS considerably lower than other organizations and it turned out she was a former artist in residence at PGS with a conflict of interest related to the organization.

Commission rescinds, votes again on CDBG funding

When PGS was not initially recommended for funding, Tracy Houck sent an email to city staff expressing her frustration with that decision.

Houck is the executive director and a City Commissioner.

Due to those conflict of interest concerns and another procedural error in a CDC meeting when Commissioner Fred Burow gave comments on the applications during the board discussion portion, the process concerning the public facilities portion of the allocations was redone on the advice of the city attorney.

Conflict of interest concerns plague this year’s CDBG allocation decisions

In the redo, PGS was recommended for funding, causing additional concerns regarding conflicts of interest.

Ultimately, the City Commission approved the entire slate of CDBG funding allocations earlier this year, including the $27,927 for PGS.

During the City Commission meeting on Tuesday, City Manager Greg Doyon said that when the conflict of interest concerns first came up in March, he and City Attorney Sara Sexe were brought into the conversation.

They, along with Mayor Bob Kelly, met with Houck to tell her that while the conflict of interest concern was valid, her actions in sending the email as both a commissioner and on behalf of PGS was inappropriate.

Public hearing set for animal ordinance, CDBG funds approved

At that time, the city alerted HUD to the issue and told the federal agency about their plan for reconvening the CDC without the member that had a conflict and redoing the presentations, scoring and funding recommendations for the public facilities portion of the process.

HUD gave the city no indications they had concerns with the city’s plan to address the issue, Doyon said.

Following additional citizen complaints regarding Commissioner Bill Bronson since his wife works at NeighborWorks Great Falls, Sexe requested that Bronson outline in writing why he believed he didn’t have a conflict of interest in the matter and that memo was provided to HUD.

At that point, HUD had still not given city staff any indication that they had concerns with the city’s approach in correcting the issue and staff hearing nothing from HUD until last Thursday.

During a call with the Denver office on Thursday, Doyon said HUD indicated they had continued to get complaints about this year’s process and determined that PGS was ineligible for CDBG funding.

That means the $27,927 allocated for PGS will now go back to the city for potential allocation to other CDBG applicants.

HUD has also advised city staff to review CDBG funding for NeighborWorks Great Falls the last three years to see if there was any conflict in those decisions.

Doyon said until that review is completed and HUD makes a determination, NWGF will not receive the funding that was allocated in the housing portion of CDBG funding.

Sheila Rice, NWGF director, said that the review applies only to CDBG funding and that since it’s in the construction side of NWGF and Bronson’s wife works in community engagement, they don’t see a conflict of interest.

Staff has been recommending for months that the city revamp it’s CDBG process and on Nov. 21, they’ll bring a proposal to the commission during a work session.

The updates to Title 2 of the city code concerning ethics policies and creating an ethics committee are also part of the city’s efforts to correct the problem.

Ethics provisions updates back on City Commission agenda

Mayor Bob Kelly said that the city learned lessons in this process and pointed out that Commissioner Fred Burow was not on board with the process this year. Kelly said it was important to acknowledge that Burow was right to raise concerns earlier this year about the conflicts of interest.

“I think we just missed a beat,” Kelly said. “I think we’ve learned something here.”