Money that was transferred to the Gateway Community Development Corporation will be returned to the Yazoo City Housing Authority after some housing commissioners said they were “misled” about the funds.
The transfer has made headlines within the local housing program because two commissioners said the board minutes were altered to reflect the transfer, which they both said they did not approve. Also, it was advised that there was a “conflict of interest” since two former commissioners served on both the Housing Authority and Gateway boards.
The Yazoo City Housing Authority was awarded $551,125 in damages, following a lawsuit. It was recommended that the funds not be mixed with federal funds and should be deposited in a separate bank account. The funds were also to be spent on creating and providing affordable housing.
The funds were transferred to the Gateway Community Development Corporation, a not-for-profit affiliate of the Housing Authority, following the Dec. 19, 2017 board meeting.
At the time of the transfer, former housing commissioners John Meeks and Dawn Gainwell-Dodd served on both the Housing Authority and Gateway boards.
“When the board meeting was conducted in December, two of your board members were also on Gateway,” said Barry Bridgforth, board attorney for the Housing Authority. “You contract with Gateway, and it is not the mirror image of the Housing Board as it once was. That is a perceived conflict of interest. “
According to state law, it was a conflict of interest for both Meeks and Gainwell-Dodd to vote on the $500,000 transfer to Gateway.
“Had they recused themselves from the meeting, you wouldn’t have this problem,” Bridgforth said. “It hapens frequently. In small towns people are on multiple boards so you have to pay attention. You just have to walk out of the room so you don’t have a conflict of interest.”
Bridgforth added that there is no agreement between the Housing Authority and Gateway in a contract form. He said the money was simply put into Gateway, where it remains to this day.
“This is a voidable transaction under this statue,” Bridgforth said. “You can void the transaction in your motion, terminate that.”
Bridgforth also said transferring the money back into the Housing Authority will not impact the multi-million-dollar Rental Assistance Demonstration program.
During the Housing Authority Board meeting Tuesday evening, the board approved to void the transaction between the Housing Authority and Gateway. The board will also be requesting the money back into the Housing Authority.
“The money was put in Gateway because we were led to believe we were going to lose that money,” said Danny Neely, chairman of the Housing Authority board. “We would like to have that money back.”