BREWER, Maine — The U.S. Department of Housing and Urban Development’s review of Brewer Housing Authority revealed no federal conflict of interest violation in a recent land purchase, but it did find that the price paid was questionable and that state laws probably were violated.
The housing authority bought land on Oct. 7 from Calvin Bubar for more than three times the assessed value and $160,000 more than what the Bubars paid for the property in mid-September 2007. Bubar served as chairman of the housing authority board until he submitted his resignation on July 9, the day before the purchase and sale agreement on the property was signed. He technically was still on the board until the Brewer City Council accepted his resignation on July 14.
“The BHA … in purchasing the questionably priced parcel of land from the standing active Chairman of its Board of Commissioners, appears to have acted in violation of BHA policies as well as state law,” the Nov. 16 report from HUD states. “We expect the State of Maine will pursue this further.”
The HUD report lists two official findings — that the Brewer Housing Authority violated its own conflict of interest policy and that it didn’t comply with its procurement policy — and four concerns, as well as corrective actions required to be done within the next month.
Gordon Stitham, the housing authority’s executive director, said Monday that the agency’s Board of Commissioners took steps at its Nov. 24 meeting to address the concerns listed in HUD’s report.
Brewer city leaders became concerned there was a possible conflict of interest in early October after learning that the housing authority planned to pay Bubar $280,000 for a 4.16-acre parcel on Chamberlain Street that is valued by the city for property taxes at $88,000.
City councilors held an executive session Oct. 1 to discuss the matter and at their Oct. 13 meeting voted to ask the state Attorney General’s Office to review the case. HUD officials decided simultaneously to review the housing authority’s books to see if federal funds were used when the authority bought Bubar’s land.
No federal funds were used, so there is no federal conflict of interest violation, according to HUD, but there do appear to be conflicts with the authority’s policies and state regulations.
“We have noted the potential conflict of interest issue as a concern that should be addressed by the appropriate state and local entities that have either standing and-or authority over the BHA,” the HUD report states.
The Maine conflict of interest law states: “No employee or commissioner of any authority may, within two years of that service … voluntarily acquire any interest, direct or indirect, in any contract, project or property included or planned to be included in any project of that housing authority over which the employee or commissioner has exercised responsibility, control or decisions during tenure with the authority.”
The first of HUD’s two findings has nothing to do with the land purchase.
“A review of the financial records reveal that there were four invoices totaling $1,270 paid to an immediate family member of the executive director” for painting and patching walls and for construction of a conference table, which is a violation of the authority’s own conflict of interest rules and HUD’s, the report states.
The second HUD finding basically states that Brewer Housing Authority officials did not comply with their agency’s procurement policy, which requires an independent cost analysis, which “is a crucial tool in determining if contractor prices are fair and reasonable,” the report states.
The housing authority board voted on Nov. 24 to heed HUD’s corrective actions, agreeing to repay the federal government $1,200, to hold procurement policy training for two people, and to educate panel members about their roles and responsibilities and about conflict of interest laws and regulations.
“We have a commissioners training set up for Dec. 19 already, so that has been taken care of,” Stitham said.
The apparent conflict of interest violation concerning the Bubar land purchase is the first of four concerns listed in the HUD report. The second lists expense sheets that are submitted, signed and approved by the executive director without further review.
The third concern deals with the housing authority’s management of the Ellen M. Leach Memorial Home and a $23,000 decrease in management fees for those services.
“It was explained … that the decrease was due to the former [BHA] executive director taking over some of the management duties and being compensated from Leach Homes,” the report states. “The BHA should seek legal counsel and pursue adherence to the current signed management agreement.”
Stitham said the housing authority board hired Bangor attorney Edward Gould to review the Leach Home situation, which involves Dorothy “Betty” Igoe, who was the executive director of the housing authority until January 2008 and who now is the Leach Home executive director. Igoe, who also lives at the Leach Home, gets a reduced rent for her services.
“What [the resolution] is going to be I don’t know yet,” Stitham said. “That’s something in play right now.”
The fourth HUD concern basically states that the procurement policy fails to list any sanctions for violating the policy. HUD suggests such sanctions be added.
During its November meeting, the housing authority board also got a look at the concept plans for the $6 million, 32-unit elderly housing project, dubbed Chamberlain Place, under consideration for the Bubar parcel.
The housing authority is partnering with the social services agency Penquis of Bangor to construct and operate the project. The housing authority would own the land and operate the facility, which would be built by Penquis.
To go forward, Penquis needs to have the parcel’s residential zoning changed to high-residential, which requires approval from both the city planning board and City Council.
“They’re presenting it to the planning board on the 7th of December,” Stitham said. “It’s going to be nice.”