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HUD says Williamsport didn't misuse grant

June 04, 2007|By ANDREW SCHOTZ

WILLIAMSPORT

The U.S. Department of Housing and Urban Development has concluded that Williamsport did not mishandle a $425,000 federal grant.

In 2005, Councilman Jeff Cline asked a HUD fraud hot line to look into whether the town misappropriated a Community Development Block Grant it received in 1986.

The town couldn't document how much of the grant money that it loaned to residents for home-rehabilitation projects over the years was paid back.

HUD's inspector general's office has told Cline there was no evidence the town did anything wrong. HUD gave the town a one-time grant that didn't require further HUD oversight, according to a memo about Cline's complaint.

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Cline forwarded the response letter and memo to The Herald-Mail more than a week ago. "To me, it's a done issue," he said last week.

"It's just one of those puzzles that's missing too many pieces," Mayor James G. McCleaf II said.

He said an audit completed for the town last year said the accounting could have been better.

The Herald-Mail reported in August 2005 on HUD records showing that the department gave Williamsport a $425,000 grant in 1986.

In an interview for that story, Donna K. Spickler, Williamsport's town clerk when the grant was awarded, said most of the money was used to improve Vermont Street.

She said the rest - about $183,000 - was used as a low-interest revolving-loan fund for people fixing up properties in town. Once money was repaid, it could be used for other loans.

Town officials have said that repaid loan money might have been mixed into the general fund instead of a separate fund, so the town doesn't know how much is left or was repaid. "There's no way to tell," McCleaf said.

He said the town only knows of two outstanding debts from the loan fund.

Wayne Byers of Longstreet Road borrowed $30,000 at 3 percent interest in 1994, according to a letter McCleaf sent Byers last year. The loan must be repaid by Aug. 1, 2009, the letter says.

The other debtor is Ronnie Byers, McCleaf said, unsure of the amount.

Wayne Byers has worked out a repayment schedule and Ronnie Byers has been paying his loan back, McCleaf said.

A letter from HUD to Cline in December 2006 says the town apparently didn't violate HUD regulations. HUD spokesman James Kelly wouldn't provide a copy of the letter last week, but read a passage to a reporter over the phone.

"It would appear that the funds in question, if generated by repayment of single-family residential rehabilitation loans, would have no reuse restrictions and could be used by the town of Williamsport to pay a variety of costs," the letter says, according to Kelly. "Even if such repayment had been expended on a use not in the original grant application, there would be no misuse of funds."

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