CAIRO — The city of Cairo and four city council members are named as defendants in a lawsuit related to the city’s disbursement of a US Department of Housing and Urban Development grant.
At a March 7 meeting, the city council voted 4-0 to distribute $50,000 in HUD grants to the Cairo Development Foundation, with $5,930 each going to Mountainview Enterprises and Emmy Cross for separate projects.
The lawsuit filed by Cross and Mountainview Enterprises July 18 in Greene County State Supreme Court seeks to restore HUD funding recommendations provided by the city’s residential specialist, Delaware Engineering.
According to the company’s recommendations to the board, the foundation would have received $22,680 in HUD funding, Emmy Cross would have received $18,576, and $17,118 would have gone to Mountainview Enterprises.
The board then decided to award $50,000 to the Cairo Development Foundation and an equal share of the remainder to the other two applicants.
The HUD funding has yet to be disbursed, and the lawsuit seeks an injunction from the state Supreme Court that would restrain the release of the funding pending a further court order.
The lawsuit seeks to provide $18,576 in HUD funding for Cross, $17,118 for Mountainview Enterprises and $22,680 for Cairo Development Foundation to align with Delaware Engineering’s recommendations.
The city, foundation and four city council members — Supervisor Jason Watts and council members MaryJo Cords, Michael Flaherty and Debra Bogins — who voted in favor of the March 7 resolution granting $50,000 to the foundation are named defendants in the lawsuit.
The plaintiffs are represented by attorney Monica Kenny-Keff, whose husband, Christopher Keff, owns Mountainview Enterprises.
Watts said the city would fight the lawsuit.
“I think we’re right, but right now it’s in the hands of the city attorney, so we can’t really talk about it,” Watts said Thursday.
In August 2019, the city council approved $50,000 in funding for the Cairo Development Foundation to fund the renovation of two residential apartments at 467 Main Street. The resolution was later withdrawn and the funds were not granted again until March. The original HUD grant was awarded to the city in 1998, with the city subsequently collecting $11,860 in interest on the initial $50,000 grant over the next two decades.
Watts said the board used its discretion to award HUD funding after receiving recommendations from Delaware Engineering earlier this year.
“They told us how things might go, but if you go back to the documents from years ago, the CDF had tried to get it and had already received $50,000,” Watts said. “So there wasn’t a lot of money there when there are already two supervisors, they had been given $50,000.”
Watts said he still hopes the foundation will receive the full $50,000 HUD grant it was awarded by the board in March.
Councilman Tim Powers was absent from the March 7 board meeting when the HUD grants were awarded and is not listed as a defendant in the lawsuit.
At a May 2 city council meeting, Powers submitted a resolution stating that the council had disregarded Delaware Engineering’s recommendations when awarding HUD grants. This resolution did not pass after Powers voted yes and the rest of the board abstained.
Powers said Thursday he agrees with the arguments made by Cross and Mountainview Enterprises in the plaintiffs’ lawsuit.
“The parties involved, the plaintiffs aren’t out for blood or anything, they just want the numbers set as they should have been,” Powers said.
Powers said the rest of the board never told him why the board didn’t follow Delaware Engineering’s recommendations for HUD funding.
The city’s former residential specialist, Kaaterskill Associates, had recommended in 2019 that the foundation receive the $50,000 funding for the renovation of two Main Street apartments. In August 2019, the Cairo City Council approved $50,000 in funding from HUD for the foundation to undertake the repair work, but the resolution was later withdrawn in 2021.
Foundation President Diana Benoit said Thursday the group disputes the lawsuit’s assertion that the city should have followed Delaware Engineering’s recommendations.
“Absolutely, we are against it,” she said. “We received this money in 2019. This was before Mountainview Enterprises even owned its property. In 2021, (then City Supervisor) John Coyne passed a resolution that canceled funding based on a lie. He said he did not receive the request and we can prove that the request was received by the city.
The foundation would remain eligible to receive HUD funding even though some of the work has already been completed, Benoit said.
“We still have a lot of work to do on our buildings,” she said. “We got the money in 2019 and then the new board came in 2021 and kept the money for us. We had to make updates. We had a leaky roof and we just couldn’t wait for that. The $50,000 is available to us no matter how you cut it.
Bogins is a former member of the foundation, according to the lawsuit. Bogins resigned from the organization in February when she was named to the board of directors to replace former councilman Stephen Kralovich, who had resigned earlier in the month.