City wants housing scandal report

SANDUSKY Two years. Still no answers. The Office of the Inspector General began its i
May 24, 2010



Two years. Still no answers.

The Office of the Inspector General began its investigation into the city's housing scandal in 2008, and city commissioner Dave Waddington's frustration boiled over this week about the lack of progress.

He begged somebody at city hall to give the commission a more regular update.

"It's been two years now, and it seems like nothing's happening," Waddington said. "This seems like it's taking longer than the Warren Report for Kennedy's assassination. It's just dragging on and on."

The scandal centered around the city's Community Housing Improvement Program, or CHIP. The program gives loans to low-income families to help repair their houses.

Between 2004 and 2006, mismanagement in CHIP led to at least 47 homeowners receiving shoddy repairs or no repairs at all to their homes. Some also received work they didn't need.

Last year, the city began repairing those homes, spending more than $1.19 million in state and federal grant money. State auditors approved of the city temporarily using the money for that purpose, city finance director Ed Widman said.

The city hopes its insurance company will pay for the losses, and officials plan to repay the grant programs with insurance money.

But Waddington wondered what will happen if the insurance company rejects the city's claim.

"I'm worried about having to pay back the money, possibly from the general fund," Waddington said. "We could end up on a bad street here."

Widman said the insurance company won't make a decision on the city's claim until the federal investigation concludes.

The Inspector General's office is a division of the United States Department of Housing and Urban Development, which administers the CHIP program.

Interim city manager Don Icsman contacted the Inspector General's office this week and confirmed the investigation is still ongoing.

He said he shares Waddington's frustration, but the city wouldn't have the time or money to conduct such a large-scale investigation.

Though he'd like the investigation to go faster, he said the city welcomes the free help, which could aid their insurance claim.

Widman said if the insurance company rejects the city's claim, the city wouldn't necessarily have to take $1.19 million immediately from its general fund, which equates to about half of the city's cash reserves.

He said Sandusky could borrow the money and pay it back over a long period of time. It did that following a lawsuit in the 1990s that involved the Milan Road overpass, in which the city was found liable, he said.

Icsman said the city may not have to repay the money at all.

He said the city commission chose to do the "right thing" and repair most of the damaged homes. Because of that, and regardless of what the insurance company decides, Icsman said he hopes the federal and state government will recognize the city's commitment to fixing the situation. He said he hopes the government won't force the city to repay the grant programs.



How many jobs will this cost? This is what happens when unquilified people are given jobs. And will the people involved ever have to fork over the money they stold?