State questions Warren’s use of CDBG funds
The question of whether the Town of Warren misused federal funds intended for an affordable/elderly housing development that was never built has thrown funding for several popular programs here into limbo.
At issue is the Community Development Block Grant (CDBG) program, a federal HUD program that distributes money to towns for community development projects. Those funds are administered by the Rhode Island Division of Planning’s Office of Housing and Community Development, and Warren regularly applies for receives thousands of dollars worth of grants every year.
But now, funding for programs that have already been approved, including Warren’s low interest home improvement program, are facing additional scrutiny amid questions by the state over whether Warren misused funds granted to it several years ago for the development of affordable and elderly housing in the Liberty Street School.
That project had been proposed by the East Bay Community Development Corporation (EBCDC) and approved by the Warren Town Council. Ultimately, though, the Bristol non-profit walked away after crucial funds fell through during the economic downturn five years ago. But the CDBG funds for which town officials had applied — some $75,000 — remained with the town.
Last year, state officials met with the town to talk about the fate of that $75,000, since the project was never completed.
“They (the town) had spent it on upfront costs,” said Mike Tondra, the chief at the division of planning's Office of Housing and Community Development.
“Ultimately, the town challenged the need to return the funds at all and disagreed with the state on the interpretation” of what those funds could be used for.
State officials contacted HUD and asked the town to provide justification for the spending; they received a response late last year and referred the matter to HUD. Currently, they are waiting for HUD to review the case, Mr. Tondra said.
“If it’s deemed an ineligible cost, the funds must be returned, “ he said. “Right now we are waiting for HUD. This could set a precedent so I’m sure they want to make sure their interpretation is correct.”
What does it mean?
While they wait for answers from HUD, Mr. Tondra said Rhode Island officials are being extra careful about how Warren intends to use grants already approved, requiring “compliance literature” in advance. In other words, he said, town officials are being asked to provide detailed information about their uses for money, and where funds are going, before the funds are released. This applies just to CDBG grants that have already been approved; town officials are welcome to apply for new grants during the next application cycle, Mr. Tondra said.
Warren Town Solicitor Anthony DeSisto did not return four telephone calls left on his cell phone and at his office, and also did not respond to a text message left last week. However, Warren Town Planner Caroline Wells told the Warren Town Council earlier this month that the extra layer of accountability is delaying the town’s reimbursement in several programs.
“They’ve stopped our spending,” she said. For example, when residents who want to take advantage of the town’s low interest home loan program come to her for answers, she said, “What do you say? My funds are frozen? People don’t understand that.”
Warren Town Manager Thomas Gordon said at the same meeting that it might not be in the town’s best interest to move forward with programs funded under previous CDBG rounds:
“I don’t know that it’s a good thing to move forward,” he said. “It’s not that they’ve completely frozen that finding, they’ve just requested more (paperwork) leading up to those approvals.
Referring to Mr. DeSisto, he said, “If they get the full attention of the town solicitor’s office, perhaps we can bring this to some resolution.”
Mr. Tondra said he does not know when HUD will respond with its interpretation of Warren’s actions.