The city of Dayton forfeited nearly $477,000 in federal funds for housing development and assistance for failing to meet a key deadline.
The city failed to obtain signed and executed contracts within a federally mandated two-year time frame, according to records obtained by this newspaper.
As a result, the U.S. Department of Housing and Urban Development (HUD) reduced the amount of federal grant money the city has to help low-income residents buy and rehab homes.
“We took it out because we had to — by law,” said Brian Sullivan, a HUD spokesman. “It’s a two-year statutory deadline they missed.”
We have reached out to the city of Dayton for comment, but they have not responded.
On April 30, 2014, the city approved agreements with HomeStart Inc. and the HomeOwnership Center of Greater Dayton that would give each $250,000 in federal HOME funds.
HomeStart committed to acquiring and renovating or constructing at least three homes in the Wright Dunbar neighborhood that would be sold to eligible, low-income buyers. The HomeOwnership Center agreed to provide down payment assistance to about 35 low-income households. The work and services were completed and the city paid the two groups, according to the records.
But earlier this year, HUD notified the city of Dayton that it was “deobligating” $476,624 from its HOME account because the city did not have signed and executed agreements with HomeStart and the HomeOwnership Center by the April 30, 2014, deadline.
HOME funds by law must be committed within two years of their appropriation.
Funds are not considered committed until a legally binding agreement has been executed, which did not occur with HomeStart and the HomeOwnership Center until two to six weeks after the deadline, according to HUD.
The city received nearly $1.3 million in HOME funds in fiscal year 2012. Dayton was appropriated less than $1.1 million in the present fiscal year.
In April, Aaron Sorrell, Dayton’s former director of planning and community development, told HUD that he had been involved with the HOME program since 2000 and the city always used the date of commission approval as the date of commitment.
“Based on nearly a decade of past practices for which I’ve been involved, I feel we met the 2014 commitment obligation,” he wrote in an email to HUD.
Sorrell was placed on administrative leave on May 24 and resigned less than two weeks later for reasons not made public.
Sorrell did not immediately return a phone call on Monday seeking comment for this story.
Steve Naas, president of County Corp., told this newspaper the deobligation of federal funds had no negative impact on HomeStart or the HomeOwnership Center, which are under the organization.
“The funding in question was drawn down according to the terms of the agreements without issue,” he said.
HUD does not dispute that the activities that the city wanted to fund were eligible.
This newspaper learned about the HUD funding issue after obtaining emails to and from the federal agency through a records request.