Nearly 18 Kettering projects a year had received help through HOME before problems surfaced.
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Kettering officials said they partnered with Dayton because Kettering’s project amounts fall below the required threshold to apply for HOME funds. Kettering historically received about $150,000 in HOME funds annually.
The Dayton Daily News reported in May of 2019 that federal prosecutors requested Kettering turn over records pertaining to the city’s use of some HOME funds. The records were part of an Oct. 26, 2018, subpoena obtained by the Daily News.
Another subpoena was sent to the city of Dayton seeking similar records, as well as the personnel file of former Dayton planning director Aaron Sorrell.
Both the Dayton and Kettering subpoenas were seeking “copies of documents pertaining to activities of the Dayton Kettering Consortium use of (U.S. Housing and Urban Development) funds.”
Kettering was not the focus of the investigation, according to city officials, who complied with the request. But the investigation was launched after a federal corruption probe was underway against several city of Dayton officials.
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In 2018, HUD rejected the consortium’s request for funding after finding the city of Dayton spent more than $166,000 on “unallowable” costs and questioning how another $502,000 was spent, which resulted in no HOME funds being available through the consortium.
Kettering Assistant City Manager Steve Bergstresser said the city plans to terminate the consortium agreement, which goes through end of this year, due to accounting issues involving the city of Dayton.
Kettering plans to apply to join the State of Ohio consortium to receive HOME funding.
“In order to collect HOME Funds, Kettering needs to leave the City of Dayton consortium,” Bergstresser said. “In 2021, the city will join the State of Ohio Consortium and begin receiving funds through them. Originally, the state had a rule that cities with a population of 50,000 to 60,000 were ineligible to receive funds from the state, therefore, this was not an option for us until now.”
Kettering city officials are confident that the funding will eventually be restored in order to help those in need.
“The deadline to notify the state is March 1, 2020. We anticipate that HOME Funds will return to Kettering in 2021,” Bergstresser said. “Dayton advised they would cover funding rehab loans if their frozen HOME funds are released by HUD.”
Not having the HOME funds has curtailed some of the help that had been made available to Kettering residents.
“Unfortunately, there has been no funding for new projects for over two years. Funding has been on hold since mid-year 2017,” Bergstresser said. “We had been assisting an average of 10 first-time home buyers, 5 home repair projects and between one and two affordable new construction projects per year.”
A spokeswoman for the city of Dayton declined comment for this story and noted that city officials were not available to address questions.
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