Most of the nearly $300,000 in reductions he is proposing to settle with the U.S. Department of Housing and Urban Development was already built into his 2010 and 2011 budgets, Director Chester Wheeler said, and that's because the city doesn't always give nonprofits all the money they ask for and the nonprofits don't always spend all the money budgeted for them.
The only new cut will come in 2012, and it will be just $26,057, according to figures Wheeler provided to The Augusta Chronicle last week.
"I don't foresee it having a negative effect on them," he said of groups receiving "public services" allocations from the city's Community Development Block Grant funds.
Managers at one nonprofit, however, say that doesn't make sense, considering that the housing department's 2011 budget shows them receiving nothing. Members of a board that once provided advice to the department say they might have prevented the infraction if Wheeler and City Administrator Fred Russell hadn't marginalized them in 2007.
Benefiting from the public service grants in recent years have been groups that work with the elderly, the homeless, the working poor and abused children -- including Kids Restart, Salvation Army, Golden Harvest Food Bank and the Senior Citizens Council.
The department budgeted $297,545 in public services spending in 2010 and is proposing $220,000 in awards next year -- the lowest the total has been during the past five years.
A spreadsheet showing agency-by-agency allocations that was provided by the housing department shows some will get more in 2011 than they have in past years, and some will get less.
In the latter category, Hope House, a treatment and housing center for addicted and homeless women and their children, received the maximum $25,000 in 2009, zero in 2010 and is budgeted for zero again in 2011, the chart shows.
Executive Director Karen Saltzman said she has difficulty seeing how Wheeler's plan won't affect service groups, considering that there will be less money available to feed, clothe and assist the needy.
"He can make that statement," Director of Development Stephanie Suarez said, "but in the context of Hope House, we didn't get any this year and we won't get any next year. So, no, it doesn't make sense."
After a monitoring review in May, HUD slapped the city for overspending its block grant public services cap by using nearly $300,000 to pay CSRA Economic Opportunity Authority, which is working under a home-ownership counseling contract considered part of the Laney-Walker and Bethlehem neighborhood revitalization project.
The city was on the hook to return $286,151 -- which isn't the figure it paid to EOA, but the amount it overshot the cap.
Wheeler's department believed that because EOA and its subcontractor, Macon, Ga.-based HomeFirst Inc., were working within a "Neighborhood Revitalization Strategic Area," they could be classified as "Special Activities by Community-Based Development Organizations," and payments to EOA wouldn't count toward the cap.
HUD disagreed. In correspondence with the agency, Wheeler said the problem boiled down to EOA counseling too many clients from outside Laney-Walker and Bethlehem. Of 742 people EOA/HomeFirst saw in 2009, only 81 were from those neighborhoods.
Wheeler declined an interview request from The Augusta Chronicle for a story published Oct. 3, but two days later he accepted, explaining not only that charity groups won't be affected but also that what occurred wasn't so much a violation as an unavoidable clash of regulations.
AS A HUD-APPROVED counseling agency, EOA couldn't turn anyone away, and it was inundated with foreclosure clients from across the city looking for help, Wheeler said. At the same time, the agency was supposed to stay within the inner city to be exempt from the spending cap.
"It's unfortunate, again, that this housing crisis hit us all at the same time, when we were trying to jump-start something to address getting people into homes," Wheeler said.
HUD is expected to decide whether it will accept Wheeler's settlement proposal within the next week. Several Augusta Commission members questioned about the matter last week seemed perplexed by it, saying they had been blind-sided and needed more time to study the issue.
Augusta Urban Ministries Executive Director Rick Herring said he was just glad to hear that his agency's furniture bank allotment, used to provide household items for struggling families, won't be lost. The spreadsheet shows the Hale Street nonprofit received $10,900 this year -- with $5,862 spent -- and is budgeted for $10,000 in 2011.
"As you might imagine, this is somewhat of a relief, considering what's happened," he said.
Not so happy are members of the Housing and Community Development Citizens Advisory Board, whose mission included trying to prevent the city from having to repay the federal government over improper expenditures, said former Chairwoman Irma Lorie Williams, who was appointed to the panel by former Commissioner Ulmer Bridges.
"They would have definitely voiced their opinions," Williams said of the EOA/HomeFirst problem. "They would have definitely informed their commissioners of it."
THE ADVISORY BOARD was formed at the start of the 2000s during the tenure of fired housing department Director Keven Mack, and the Augusta Commission reaffirmed its role in a retooling of the department in 2006, after the resignation of Executive Director Warren Smith.
Wheeler, however, didn't like being questioned and refused to meet with the board or provide it documents, said Williams and advisory board member Barbara Gordon. The new department director stopped calling meetings, rendering the board inert, Williams said.
Gordon, the owner/publisher of the weekly Metro Courier newspaper and a Willie Mays appointee to the board, said certainly she would have questioned why money for the housing counseling contract was being funneled through EOA to an out-of-town company, HomeFirst, which Wheeler had worked with in the early 2000s as director of Macon's Economic and Community Development Department.
Public Service Editor Mike Wynn and Staff Writer Sylvia Cooper contributed to this article.