DEVELOPER RECORD ROCKY, THEY SAY
By LIBBY CUDMORE • Special to www.AllOTSEGO.com
ONEONTA – The Sixth Ward Neighbors United is hoping to enlist the assistance of state Sen. Jim Seward, R-Milford, in the fight against Riverside Apartments, a 64-unit low-income housing project proposed by Rehabilitation Support Services.
We “are seeking a full investigation of the financial dealings of (RSS), who have submitted funding applications to several state agencies,” the letter read. “We feel that because of the super-inflated costs of this project, historical evidence points to a project filled with potential kickbacks, self-dealing, improper loans between nonprofits, some exorbitant expenses and a potentially improper relationship with a for-profit entity.”
Seward forwarded the letter to state Attorney General Letitia James for her review. “Whenever there are public funds, there has to be accountability,” he said this week. “I’m open to making sure there is a full accounting of funds, from RSS or any agency.”
These concerns arose during a meeting of the Neighbors on Thursday, April 25 when organizer Bill Shue, the former alderman, brought up the Comptroller’s fiscal oversight audit of the company’s 2014 finances. Among them, the Comptroller’s office found:
- $16,872 for a half-day RSS Board retreat at Lake Placid, which included hotel nights for two days even though there was no meeting scheduled for the second day; and a cocktail hour, even though the Office of Mental Health specifically prohibits alcohol at events or events that are largely entertainment in nature.
- $1,129 for flowers and plaques for individuals who spoke at RSS events or visited residences.
- $319,777 for contracts not competitively bid. OMH requires that all contracts over $5,000 be competitively bid.
- $35,477 for food for clients and staff. While purchasing food for clients is acceptable under the guidelines, purchasing food for staff is not. The report also said RSS should be assisting clients with locating support services, such as food pantries and emergency SNAP benefits.
- $7,642 in gift cards listed as “holiday gifts” rather than for client assistance. The report recommended future gift cards to clients, which are susceptible to fraud, be better documented, including receipts showing that the card was used for its intended purpose.
RSS responded to the allegations as “flawed” and “strongly disagreed” with several, but did agree to make some changes, including better documentation of gift cards.
“We’re a multi-million agency,” RSS Managing Director Ed Botz said in an interview. “We’re audited on a regular basis. They find things and we make adjustments.”
But Shue is concerned the $23 million RSS hopes to receive for the Sixth Ward project will not all be used for housing. “It’s 64 units, and if you divide $23 million by 64, that’s $359,375 per unit. I understand there are soft costs involved with building, but this is way above the national average for low-income housing. It needs an investigation.”
Botz said the cost is in line with other projects in Upstate. “It would be three times that in Manhattan,” he said.
But Shue believes it adds to the continuing mistrust of RSS’ plans to build an apartment complex in the Sixth Ward. RSS does have a presence in Oneonta already, overseeing Elmwood, The Oneonta Bagel Company and the Mountain View Wellness Center. Seward said he hasn’t heard of any issues with those projects.
“My opposition is based on the fact that RSS hasn’t done the community outreach necessary of involving citizens,” the senator said. “A project this size needs community buy-in.”
Botz said that community outreach, including a website, had been done. “We’ve had a lot of favorable support,” he said. “And we will continue to do outreach, but there are some people you can’t change their mind.”