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

City Commissioners are holding a public hearing Tuesday evening on the city’s Community Development Block Grant allocation after delays related to several conflict of interest allegations. Commissioners won’t take final action until their June 6 meeting.

The Community Development Council, which annually reviews applications for the funding and makes recommendations to the commission, made recommendations in March but City commissioner Tracy Houck sent a letter to the city alleging a conflict of interest issue against the CDC chairwoman, who had previously been an employee of Houck at Paris Gibson Square.

Houck is the executive director of PGS and after her organization was denied CDBG funding, she lodged complaints with city staff about the conflict of interest, creating a conflict of interest issue for herself.

Houck sent a letter dated March 14 to Craig Raymond, city planning director, asking that the CDC chair recuse herself and PGS’ application be reconsidered.

She opens her letter by acknowledging the conflict of interest: “I have stayed away from the application and application process due to any perceived perception of conflict of interest of being both the executive director of PGS and a City Commissioner. However; I have an issue that PGS needs to have addressed.”

Since Houck’s allegations represented a legitimate issue for the funding process and there was an additional procedural issue, city staff reconvened the CDC to essentially start fresh on the public facility portion of funding recommendations.

Sara Sexe, city attorney, told the CDC members that there had been a procedural issue causing the redo and to consider the funding requests with fresh eyes. The procedural issue was that the CDC had allowed a nonmember to speak during board discussion instead of the appropriate time during public comment.

Sexe penned a letter to Houck reminding her of the city code and state law regarding conflicts of interest and wrote, “in light of these provisions and your employment with PGS, it is my legal opinion that on the CDBG funding item which will be heard by the City Commission, or any other issues whenever your employer is an applicant or stands to benefit from commission action, you must not vote or participate in any commission action or discussion. If you do so, it would constitute an impermissible conflict of interest.”

Sexe and City Manager Greg Doyon told The Electric that they feel satisfied the city corrected the issue as best they could. City staff also made the U.S. Department of Housing and Urban Development aware of the issue and HUD officials were also satisfied with staff’s steps to rectify the problem. HUD oversees the CDBG funding program.

“I believe we did the cleanest process that we could,” Doyon said, adding that he, Sexe and Mayor Bob Kelly had a discussion with Houck about the situation.

Houck has not yet returned a request for comment.

So far, no ethics complaints have been filed against Houck with the Commissioner of Political Practices office but Jeff Mangan, new Commissioner of Political Practices, said his office wouldn’t have purview over an ethics violation allegation against a local elected official.

Originally, the CDC did not fund the proposed project at PGS, but after the chair recused herself and the matter was reconsidered, PGS was recommended to receive $27,927.

That was problematic to City Commissioner Fred Burow who indicated he was uncomfortable with Houck’s involvement and the end result. He had not raised his concerns to city staff before brining them up publicly at the April 18 commission meeting. He also attended several of the CDC meetings where the funding recommendations were made.

But in reconsidering the public facility applications, several other organizations were also recommended for funding that had previously been denied. Quality of Life Concepts was initially denied but in the new recommendations was slated for $20,877. The YWCA’s recommended allocation went up slightly. But that also meant funding for other applications went down. The Center for Mental Health was reduced from $20,000 to $10,000 and funding for the city Public Works department for a grant program providing assistance to low income homeowners to remove and replace hazardous sidewalks within the city limits and replacement of existing intersections with ADA accessible ramps was reduced from $65,297 to $29,177.

Raymond, city planning director, said the city won’t know their final CDBG allocation from HUD until July, but are estimating it will be similar to last year’s allocation. Raymond acknowledged there’s been a downward trend in the funding allocations annually and there has been discussion at the federal level to cut the program entirely.

Sexe said she is developing recommendations to strengthen the city’s process for disclosing potential conflicts of interest. She said she hopes to have those recommendations before the commission within the next few months and also develop additional training to avoid future conflicts.

Sexe said the city has offered training for all members of city boards and commissions, who are generally volunteers who apply for positions and are appointed by the City Commission. The training wasn’t mandatory, but all members were invited, she said, and the last one was in January 2016.