Earlier this month, the city received a letter from the U.S. Department of Housing and Urban Development outlining their findings regarding conflicts of interests in the city’s Community Development Block Grant process.

More CDBG funding suspended as HUD continues review of city’s process

During Tuesday’s City Commission meeting, the new director of NeighborWorks Great Falls came to speak about the importance of their work.

The $82,903 in CDBG funding NWGF was slated to received has been suspended. Those funds were for the construction of high school homes with Great Falls High and C.M. Russell High School.

Sherrie Arey said NWGF was created to address blight and improve neighborhoods.

She said she first became aware of the CDBG issues in October when she was applying for the director position.

On Tuesday, she said she was speaking as an outsider who now had an insider’s perspective.

“I think that HUD’s decision is correct from an outsider’s perspective,”  Arey said, but added that outsiders don’t have a detailed understanding of what NWGF, and the other affected organizations, do for the community and often stretch a dollar further with the help of CDBG funds.

City staff proposing major changes to CDBG process; HUD looking at additional potential conflicts

She said NWGF will struggle to offer the same level of service without the CDBG funds.

Arey said she hopes those community members watching the process will complete the survey that is available now in the community to offer their thoughts on how to improve the grant process.

Survey is first step in city’s revamped CDBG process

Once the new process is in place, Arey said “we will be first in line to apply and be good stewards of that money going forward as we have in the past.”

City Manager Greg Doyon said the city is already working on the new CDBG process and staff will again present their proposal for the changes to the commissioners in March.

While the city disagrees with some of HUD’s findings about the process, Doyon said, “we need to move on in order to put a new process in place.”

In total, $199,153 in grants to NWGF, Rural Dynamics Inc., Habitat for Humanity and Great Falls Development Authority were suspended.

Those funds will go back into the city’s CDBG pot to be allocated under the new grant process.

The city is not fighting the HUD findings related to the CDBG process, but is following up in regards to HUD’s interpretation of City Attorney Sara Sexe’s comments during a June meeting.

In their letter, HUD officials wrote that the minutes for the commission’s June 20, 2017 meeting include a statement from Sexe that “a representative from the Department of Housing and Urban Development had reported that there was not a conflict of interest.” In their letter, HUD officials say that statement is false.

HUD declines funding for Paris Gibson Square in controversial CDBG process

Sexe addressed the issue during Tuesday’s meeting. She said that commission minutes are summaries of statements and to get a full representation of what happened in a meeting, the video/audio of the meeting should be referenced.

The audio indicated that her comments were in reference to Commissioner Bill Bronson’s son’s employment at Paris Gibson Square and that letters from Bronson and Sexe had been provided to HUD explaining why they didn’t believe their was a conflict on that matter. The issue came up and was publicly discussed when the commission was voting on CDBG funding for the public facilities portion of the grants, which included Paris Gibson Square.

During that June 20 meeting, Sexe said that in a phone conversation between city staff and HUD officials, HUD agreed there wasn’t a conflict. Sexe said she checked with other city staffers to confirm that the conversation did in fact take place and that those were the comments made.

“Your letter and mine indicating agreement to there being no conflict under their regulations that we evaluated as to your son were provided to the representative of Housing and Urban Development who spoke with our CDBG administrator and verbally indicated agreement that there was no conflict,” Sexe said in the June 20, 2017 meeting according to the audio from the meeting.

Mayor Bob Kelly said during Tuesday’s meeting that the best thing to do is take full responsibility for the confusion and appearance of conflicts.

“My heart goes out to the organizations,” Kelly said of those who lost funding in the HUD review. “This has been a process that has penalized those folks.”

[WATCH: Video from the Feb. 20 Commission meeting]

Kelly issued an apology to the community for the issues in last year’s CDBG process.

“I think we all feel that we did our best…it wasn’t deemed appropriate,” Kelly said, and that commissioners were looking forward to a cleaner, more transparent process.

No other members of the public attended the meeting to make any comments regarding the CDBG process.