The city of Toledo's liability to the federal government for mistakes made in its neighborhoods department from 2009 to 2012 could have been as high $694,058, according to documents obtained by The Blade.
Toledo City Council is expected to vote Tuesday to pay back $218,573 of Community Development Block Grant "Recovery Federal Stimulus Operating Grant" money after a 2013 audit found sloppy record keeping and federal rules violations in a program that fixed or replaced 158 roofs during those three years.
The Hicks-Hudson administration negotiated down the initial amount owed, but unsuccessfully tried to pay the money in three annual installments, city officials said.
The inspector general of the U.S. Department of Housing and Urban Development selected the city's block grant program for an audit in 2013 after Blade articles in 2011 detailed allegations of bid rigging, favoritism, and poor oversight in the Department of Neighborhoods — which awards millions of dollars each year in federal housing and development funds.
U.S. Rep. Marcy Kaptur (D., Toledo) in 2011 asked the inspector general to assist the city in the probe of the department.
The audit, dated September, 2013, showed the city did not ensure federal regulations and its own policies were followed in the administration of its Recovery Act Block Grant Funds.
The city did not ensure people who got the federal money for roofs were income-eligible and did not get price quotes from at least three contractors to make sure the prices were reasonable, the audit revealed.
Veronica Burkhardt, the city's commissioner of housing, said a reasonable price would have been within 15 percent of what the city's in-house team says it will cost to repair or replace a roof.
“According to the city’s rehabilitation specialist and former housing manager, the department’s former director instructed the staff to get the projects completed quickly,” the audit said. “Therefore, nearly all of the Recovery Act Block Grant roof and exterior repair projects were completed from approximately the end of 2009 through the end of 2010. “
Kattie Bond, the Department of Neighborhoods director at the time, and Mike Badik, who was housing commissioner, were fired by then-Mayor Mike Bell in January, 2012 amid the ongoing city and federal investigations.
The program was a stimulus grant authorized under the American Recovery and Reinvestment Act of 2009. It appropriated $1 billion in Community Development Block Grant money to states and local governments to carry out eligible activities.
The city neighborhood's department got $2,141,045 from HUD as an "entitlement city" for the program.
Neighborhoods Director Bonita Bonds confirmed that the mistakes during the end of the Finkbeiner administration and into the Bell administration involved "income eligibility and procurement requirements" for the roofing program.
Contact Ignazio Messina at imessina@theblade.com, 419-724-6171, or on Twitter @IgnazioMessina.
First Published September 17, 2017, 6:14 p.m.
