News: CJ Exclusives

Housing Nonprofit Cited for Misspending

Also: Wal-Mart Regulations, Cumberland TB, and Charlotte Trains

Project Homestead, a Greensboro nonprofit that has received millions of dollars in government grants to help low- and middle-income families buy homes, is being investigated by a variety of law enforcement agencies after allocations of financial improprieties were reported by the News & Record of Greensboro.

From 1997 to 2002, Greensboro awarded Project Homestead $5.78 million in grants, about 40 percent of the organizations total revenue for the period. A recent city audit classified as excessive or questionable about $5.5 million in Project Homestead expenses over that time period. Among the items charged to agency accounts were cruises and other travel, jewelry, liquor, and firearms. The audit also found that employees took cash advances against the agency’s credit cards.

It may be impossible to determine whether any of the questionable expenditures were made with city funds. The nonprofit commingled funds from different sources in a single bank account, in violation of its agreement with city and federal housing regulations.

Project Homestead was founded in 1991. It has received a total of $17.6 million in government grants to build or refurbish 700 houses in Greensboro for sale to low- or middle-income buyers. The agency has built or rehabilitated an additional 300 homes outside Greensboro.
It appears unlikely that Greensboro will be able to recover any misspent funds. Project Homestead filed for bankruptcy liquidation on Jan. 29. Any claims by the city would likely be categorized as unsecured debt. In its bankruptcy filing, Project Homestead noted that it would not have enough assets to repay its unsecured creditors.

Wal-Mart, Union agree (sort of)

Wal-Mart and Union County officials have resolved a dispute about what sort of permit the company needs to build a story in the western part of the county. Under the agreement, the company will apply for both the permit it says it needs and the type the county contends is necessary.

In November 2001, Wal-Mart announced its intention to build a 206,000- square-foot store at the intersection of Rea and Tom Short roads. The company applied for a major development permit, which it argues is appropriate for the site under Union County’s existing zoning ordinances. The county, however, refused to act on the retailer’s application, contending that a more restrictive special use permit was required for the site. Wal-Mart sued the county.

Under the agreement, Wal-Mart will first apply for a special-use permit and drop its lawsuit for now. The county agreed, however, to hear the company’s application for a major development permit regardless of whether it decides to issue a special-use permit. It’s unclear what would happen if Wal-Mart qualifies for one but not the other.

Wal-Mart opponents were not pleased by the agreement. “I’m extremely disappointed in the county’s decision to basically side with Wal-Mart instead of residents,” said Lisa Murphy, a local resident fighting against the store, said to The Charlotte Observer. County officials denied they had changed their position as Wal-Mart would still be required to apply for a special-use permit under the agreement.

“To me, the county’s greatest advantage was keeping Wal-Mart tied up in court until they lost interest in the site,” Union County Commissioner Clayton Loflin, another Wal-Mart critic, told the paper. “We don’t have a lot of tools or weapons to use, but time is one of them.”

Cumberland TB program questioned

The Cumberland County Board of Health is re-examining its tuberculosis screening program for restaurant workers after learning that it is essentially worthless. The county’s budget situation may make ending the program difficult.

Restaurant workers in Cumberland County are required to possess a valid health card. To obtain a card, which is good for one year, workers must go to the county health department for a TB skin test. The test costs $20 and the subject must return two days later to have it read. The health department also gives out literature on hygiene during the visits.

Over the past seven to 10 years, the tests have detected only one case of tuberculosis. Cumber-land is the only county in the state that requires a tuberculosis test for food service workers.

“It mostly gives you a false sense of security,” county Health Director Wayne Raynor told The Fayetteville Observer.

While the tests might not do a lot to protect food service workers or the general public, they do bring in $275,000 to $300,000 a year for the county. With the county facing a $3.1 million budget deficit, Cumberland County Commissioner and health board member John Henley suggested it might be difficult for the county to give up the revenue source.

Less money available for light rail

The release of President Bush’s fiscal 2005 budget Feb. 2 contained an unpleasant surprise for Charlotte and Triangle transit officials. The budget provides far less federal money than the two transit systems had hoped to receive to build expensive light-rail transit lines.

Both communities do not envision using only local money for construction. Having the Federal Transit Administration pick up half the cost is a necessity if either the uptown-Charlotte-to-Pineville or Durham- to-Raleigh lines are ever to be built.

Traditionally, the FTA picked up half the cost of construction or it did not fund a project. The new budget creates a intermediate category: partially funded “promising projects.” Charlotte and the Triangle were the only projects placed in this category. Charlotte received only $30 million of the $185 million it had hoped for. The Triangle Transit Administration got $20 million of the $61 million it requested
Transit officials in both communities remain hopeful that the FTA will commit to its traditional 50 percent share at some point in the future.

Lowrey is an associate editor at Carolina Journal.