HUD: Paterson Owes $2.2 Million From 2009 Audit
Monday, December 19, 2011 • 7:19am
PATERSON, NJ – The federal housing agency has determined that Paterson must repay $2.2 million as the result of a 2009 audit of the city’s community development department.
The United States Department of Housing and Urban Development says Paterson used federal money for “ineligible costs” and improperly used income generate by the investment of housing program funds.
HUD says it will allow Paterson to pay the $2.2 million in five annual installments of about $439,400, starting on July 1, 2012. That will create one more financial burden for a city already struggling with an ongoing fiscal crisis.
“This all happened under the previous administration,’’ said Mayor Jeffrey Jones. “Since 2003, the CD (Community Development) department has been fraught with challenges. As soon as we clean up one mess they left us, we find another one.’’
Jose “Joey” Torres, who was mayor during 2009, said he has not seen the HUD audit but generally recalled the projects he thinks were involved – the redevelopment of old mills on Straight Street and Belmont Avenue.
“I had abandoned, dilapidated buildings I inherited,’’ said Torres. “We cleaned them up and sold them to the housing authority. It was definitely in the best interests of Paterson. They were all legitimate expenses.’’
Community development director Lanisha Makle did not return a phone message seeking details on the HUD audit.
In general, federal officials said Paterson used money generated by its housing program for other municipal purposes that should have been reinvested into the Community Development Block Grant program. For example, the city underestimated the amount of money it would collect from a demolition lien on a HUD project and then kept the extra funds for other municipal programs, an official said.
Jones praised Makle, whose job performance often has come under fire from the City Council, for resolving problems the mayor said were left over from the past administration. “If it wasn’t for the work she’s done, that $2 million might be $7 million,’’ Jones said.
The mayor said part of the problem at the community development department has been poor communication from city council members on that committee. “Nobody should find out after the fact when these things happen,’’ said Jones.
Councilman Kenneth Morris, who has been chairman of the community development for many years, said 2009 – the year covered by the HUD audit – featured a change in committee leadership. That year, Morris said, Jones as the council president removed Morris from the chairmanship and took the post himself.