Affordable Housing loses funding source

The housing authority is giving notice to the group that a management agreement was violated.
By LAURE CIOFFI
VINDICATOR PENNSYLVANIA BUREAU
NEW CASTLE, Pa. -- Affordable Housing of Lawrence County is losing one of its two primary funding sources.
The embattled private nonprofit has been collecting money from the washers and dryers at the four high-rise apartments operated by the Lawrence County Housing Authority since it entered into an agreement with the authority Nov. 13, 2003.
Ducky Conti, a member of both Affordable's and the housing authority's board of directors, appeared shocked when the motion was made at Thursday's meeting by authority board chairman Robert Heath.
"You're taking money away from Affordable Housing," Conti said.
Heath, after the meeting, said he had proposed rescinding the contract more than a year ago, but could not get anyone to second the motion.
Heath said that at that time Conti told him Affordable needed to show an income stream to a bank where the group was seeking a loan. Last December Affordable took out a $250,000 loan from First Commonwealth Bank to buy seven homes in New Castle.
Under scrutiny
The group came under scrutiny when the deal was made public and county real estate records revealed that some of the homes were bought far above their county-assessed valuations and the majority were owned by Nick and Harry DeRosa, who are cousins. Shortly after the homes were bought, four Affordable board members resigned.
The board was left with Conti and Bill Bonner, a First Commonwealth Bank official. Another seat was vacant with the death of a board member.
Bonner and Conti say their accountant, Deno DeLorenzo, has agreed to join the board. They are considering other members. The group was formed in 2003 after the housing authority made a $200,000 loan to the private nonprofit. The group initially intended to build housing in Union Township for the disabled. That project never came to fruition and the board changed its direction last December.
Loan terms
In a meeting with Lawrence County commissioners Wednesday, Conti and Bonner said they had about $13,000 of the $200,000 left. Under the terms of repayment, Affordable is not required to start payment on the loan's interest until all of its current housing units are occupied. There are no terms for repayment of the principle.
Ten of the group's 18 apartments in the seven homes bought last year are rented. The group intends to remodel the first floors of the duplexes, triplexes and fourplexes to make them accessible to the handicapped.
Heath's motion Thursday called for the authority to take back ownership of the laundry machines and the collection of the money within 60 days.
Funding cut
Authority board member Ernestine Wise pointed out that the authority's federal funding has been cut by 10 percent.
"Don't you think we need that money?" Wise asked Conti when he questioned the move.
Conti voted against the move as well as a second motion by Heath to send a default notice to Affordable on the management agreement it has with the authority.
Heath, Wise and new board member Bill Betz, Ellwood City police chief, voted for both motions.
Board member Gary Felasco has been suspended by the U.S. Department of Housing and Urban Development until the conclusion of criminal charges against him. Felasco, Lawrence County's treasurer, is accused of taking more than $40,000 from his office for personal use.
cioffi@vindy.com