Ocean City Housing Authority commissioners voted 4-3 Tuesday to make good on a million-dollar IOU to the city, then the three who voted “no”quit the board.
Board of Commissioners Chairman Ed Price, Vice Chairman Steve Lalli and board member Marlene Sheppard resigned at the close of the meeting.
The departure of almost half the board is the most recent chapter in a story that began when Superstorm Sandy flooded a 60-unit federal Department of Housing and Urban Development (HUD) low-income housing project at Fourth Street and Haven Avenue in October 2012.
With Pecks Beach Village residents displaced from their homes and living in hotel rooms provided by the Federal Emergency Management Agency (FEMA), the city used an affordable housing fund and hired local contractors to expedite repairs and return residents to their homes. The city had no obligation to fund the repairs but spent $1.2 million on the work.
But when the Housing Authority received FEMA and flood insurance reimbursements, the board balked at repaying the city.
“The Authority puts itself in jeopardy if it pays the city without getting HUD involved,” Housing Authority Solicitor Charles Gabage said in March, before commissioners voted to seek guidance from HUD on potential repercussions from procedures that were not followed in the rebuilding effort.
HUD informed the Housing Authority last month that because HUD money was not spent, the issue was entirely Ocean City’s.
That paved the way for Tuesday’s 4-3 vote to reimburse the city $973,542. The original $1.2 million is offset by bills the Housing Authority already has paid and could be further offset by other credits approved in a new shared services agreement.
Price’s resignation letter includes the following:
“I feel that for the best of the Authority and due to the non-confidential nature of the Commissioners on the Authority, I must resign. The reimbursement of monies for the Pecks Beach Village construction and the non-existence of a Shared Services Agreement prior to the construction, which was under the previous chairperson and the nature of the construction performed by the city has caused me to be unable to continue to serve on this board.”
Price left the meeting immediately after submitting his resignation. But he said later by phone that it was wrong for the city to enter into such a major project without any sort of signed agreement.
“That’s not how government does business,” he said.
He said that a week after residents returned to their homes in the winter of 2013, a nor’easter forced another evacuation. The Authority is applying for federal grants to elevate Pecks Beach Village — a multimillion-dollar project that is “not a matter of if, but a matter of when.” Any such project would displace residents, and Price on Tuesday questioned whether that winter would have been the appropriate time to complete all the work — given that residents had voucher for more permanent Section 8 housing at the time.
“The only regret I have is that I was not chair a year earlier,” Price said. “Some red tape is there for a reason.”
Earlier in the meeting, Sheppard had expressed some of the same sentiments about having to potentially rebuild Pecks Beach Village twice — once after the storm and potentially again if the Housing Authority were to receive a $6 million Community Block Development Grant to elevate the property.
“The Ocean City Housing Authority has known for many, many years that Pecks Beach Village floods,” Sheppard said.
The board had agreed on the need to rebuild and modernize, she said.
But instead then Chairman Bill Woods “secretly” met with the city to reach an agreement on the emergency repairs without board approval, Sheppard said.
“We were never informed, nor were the residents,” she said.
During the meeting Sheppard successfully motioned to require prior finance board approval for travel requests for the Housing Authority executive director and to cap per-diem expenses during travel. Split votes on the seemingly routine requests reflected divisions on the board that contributed to the resignations.
Sheppard said she was tired of being “harassed and bullied” by members of the board, city officials and members of the community.
Price said that Residents Council President Charlene Porreca also resigned on Tuesday.
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