City April 1, 2009 10:37 AM

Mayor Brown Responds to HUD Audit

Mayor Brown Responds to HUD Audit

The City of Buffalo took some heat in an unfavorable Housing and Urban Development (HUD) report filed last March.  Geoff Kelly of ArtVoice spoke to HUD Regional Director Stephen Banko, who had some unfavorable things to say about the city's management of the Community Development Block Grant Program (CDBG).  The HUD report cited 19 counts of fault, an unprecedented number in New York State in a CDBG program.


In a subsequent story in The Buffalo News, Banko only commented in order to counter a comment by Peter Cutler, spokesman for Mayor Brown, who said that the HUD report was "only a draft".  Banko denies this, but is making no further comment at this time.  By way of background, Banko was mayoral spokesman in the early years of the Masiello administration.


The HUD audit took place over 4 months, ending in October of 2008.  The mayor's public statement in answer to the report is as follows:


I am deeply concerned with the HUD Monitoring Report for Buffalo's Community Development Block Grant Program (CDBG), which was received by my office on March 13, 2009.

Over the past 30 years, lack of uniform reporting and confusion over eligible usages have been cited repeatedly in Buffalo's administering of the Community Development Block Grant Program. 

These historical issues aside, the city's Office of Strategic Planning is in the process of preparing its response to the findings cited in the Monitoring Report, which are due back to HUD 45 days from the receipt of the report. As always, the city, or any other municipality, is accorded the opportunity to disagree with and respond to the findings of such a report. 

Two weeks ago, I met in Washington, D.C. with Nelson R. Bregon, HUD General Deputy Assistant Secretary and Stanley Gimont, Acting Director, Office of Block Grant Assistance to discuss the CDBG program in Buffalo and other related issues. And this past Friday, I corresponded directly with HUD Secretary Shaun Donovan, with whom I will have further discussions.

These are issues I take very seriously and in addition to the city's Office of Strategic Planning's formal response to HUD, I am demanding a full and immediate accounting for the city personnel responsible for the oversight of this federally funded program. If it is confirmed that any of these findings in the HUD report are the direct result of staff mismanagement, I will take appropriate disciplinary action, including the possibility of termination of employment.

With poverty-related challenges still faced by the City of Buffalo, despite continuing progress in stabilizing the city's finances and the high level of investment and development, critically important programs like the CDBG must be managed with the highest level of accountability, professionalism, efficiency and effectiveness. Anything less is intolerable.

The HUD audit is a valuable tool in judging where we are and what still needs to be done.  I welcome it and I am committed to working with HUD and other entities on reversing poverty in Buffalo. My administration is serious about making government more transparent and accountable; we will take all of the necessary corrective action on this important issue.  

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Cue to Nate and Chris to remind us how great a mayor we have...

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Wouldn't we be better off if people like Brown or Masiello were paid to cut ribbons and give speeches, while a competent professional was actually in charge of handling the city's business?

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Both Geoff Kellly & Jim Heaney have once again exposed longstanding abuses of block grant funding by City Hall "shadow governments".

Incredibly, HUD had assigned 9 staff in City Hall for five months, ending in October, to audit BERC, BURA & BNRC. Then HUD issued no report until AFTER Common Council demanded, and failed to obtain, basic funding data while debating the new block grant plan.

Now there is finally another damning report, of many, from HUD, but little indication HUD will finally make real reform this time.

A dramatic example of "poverty funding" excesses can be found at the highly controversial "Sycamore Village" (SV) project. Last September the city held a press conference boasting that heavily subsidized new houses built on former toxic industrial land were "selling fast". Allegedly 11 houses were sold, albeit merely two were to non-Bflo buyers.

Six months later merely six deeds have been filed, and new reports indicate that just TWELVE houses have actually been sold so far. And just ONE has been purchased by an out-of-town buyer.

That means that the longstanding pattern of 'musical housing' continues in Bflo with the massively subsidized newbuilds at Sycamore Village. It has been repeatedly documented that too often those moving into costly politically glitzy heavily-subsidized newbuilds are simply vacating a house elsewhere in Bflo . . eventually adding another taxpayer-funded demolition in a shrinking city suffering massive vacancies.

The newest SV deed filed last week for 385 Sycamore focuses the serious cost-benefit problems there. It was filed 3/24/09 by BURA to Natalie White for $201,765. She has two RBS Citizens NA mortgages ($161.4K & $7535), & a $26765 BURA subsidy-mortgage. That means she is paying about $175,000 for the house, while having no property taxes for a decade.

There is a Natalie White on the city web site property information link at 22-24 Dupont near Jefferson, a one family house with an assessed value of $8.5K, adjacent to her recently purchased vacant lot (for $1) with an AV of $1.8K. Is she indeed the buyer?

Is the buyer of a massively subsidized SV house indeed moving from a struggling street in a house worth about $10K to a fancy new house likely having a real total cost of several hundred thousand dollars, heavily funded by taxpayers?

Cost over-runs at SV have been massive, but quietly covered-up. For example, the demolition of three SV newbuilds built by Dennis Penman / MJ Peterson on contaminated land without authorization has been quietly forgotten.

It is far past time to have an "official" cost-benefit-analysis at Sycamore Village.

**** Kern

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175k for a cookie cutter new build on a toxic building site? That kind of money will get you a pretty nice house in other parts of town.
How does someone owning a 8k home qualify for a 175k mortgage?

replied to Dick Kern
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I love when Mr. Kern tries to sign his name at the end of his posts, and it gets auto-censored. Kind of makes my day.

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Geoff Kelly just posted invaluable "shadow Govt" documents. Hopefully concerned citizens will strudy them & discuss the ongoing diversion of $10's of millions of poverty funds in the 2nd or 3rd poorest city, as a long promised "povery plan" is yet to appear.

SEE: http://blogs.artvoice.com/avdaily/

April 2, 2009
The Library: BERC, BURA, BNRC Documents

— Geoff Kelly @ 10:33 am


This morning I was sifting through the BERC, BURA, and BNRC financial documents released by the Brown administration to the Common Council last week under threat of Council subpoena, as I expect to be doing for several days, when it occurred to me: I ought to post them online, so that anyone else who wants to pore over hundreds of pages of loan information and salaries and audits can do so at their leisure. Maybe offer me some pointers.

All of these documents were requested at the beginning of February by Council as part of a review of the Brown administration’s community development block grant plan for 2009. The Council was stonewalled by the Brown administration, until two weeks ago, when the Council voted 8-1 to threaten to subpoena the requested documents if the administration would not fork them over. (That resoultion brought ecumenism to a contentious Council. Only Ellicott District Councilmember Brian Davis voted against it.) The Brown administration relented, and the Council received the documents last Wednesday.

Artvoice got them on Monday. Here they are:

Who at BERC and BURA gets cell phones.

BERC loans that have been written off since 2000.

Property BERC owns.

BERC salaries, 2006-2009.

A 2007 audit of BERC.

BNRC financial statements for 2006 and 2007.

Some info on BNRC loans.

Land owned by BURA.

BURA loan information.

More BURA loan information.

BURA salaries.

I hope to have made something of these reports in a few days. If anyone out there wants to help, I’m all ears.

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Terrific public service on the part of Geoff Kelly and Artvoice. This is what genuine journalism looks like, folks, and you don't get it from unpaid BRO bloggers, no matter how well-meaning they are. If newspapers die, you can kiss in-depth investigative journalism goodbye.


But we BRO readers are partly to blame. We get way more exercised over the seizure of chickens than the abuse of federal funds.

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good post, but to set the record straight, the chickens have not been seized, they are actually being held at an undisclosed location, a secret underground chicken railroad.

replied to Lorem Ipsum
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