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Ford City councilman wants review of development program grant

| Saturday, Sept. 19, 2009

A Ford City councilman has asked the other members of council, the mayor and solicitor to review an independent auditor's report of the former Greater Ford City Development Corp.'s handling of an $805,000 Infrastructure Development Program grant, which he says shows improprieties.

"Were personal agendas and kickbacks part of the bidding process?" Councilman Tom Shaffer asked in a written statement to his colleagues.

The statement does not list any specific kickback allegations, nor does it detail any specific personal agendas on the part of CDC members or officials.

Shaffer wants council to consider if the CDC opened the borough and its citizens to liability if the work for which the state grant was used was not properly and legally bid, contracted and awarded.

"I hope that we will take the appropriate actions to remedy the failings found in this document, and hold those accountable for these failings," Shaffer said in a letter to town officials.

Shaffer wants council to pursue the matter with state and federal elected officials.

"Material deficiencies were detected in the internal controls governing the financial matters of the CDC." Shaffer said of the report.

But CDC officials say everything was done properly with the audit and dispute Shaffer's allegations.

The IDP grant was used for infrastructure in the borough's Heritage and Technology Park.

Councilmen Tim Malec, Ron Dillard and Terry Tokarek were reached and asked to comment. They all said they did not receive Shaffer's letter until Monday night's public meeting and had not received a copy of the auditor's report until later in the week. They had not read either and would be prepared to comment at the next public meeting, scheduled for Monday.

Malec, in addition to being on council, was a member of the now defunct CDC board.

Shaffer's complaints stem from a report issued by the certified public accountant firm Maher Duessel, which has offices in Butler, hired for the audit by the CDC.

The Maher Duessel report states the audit could not be completed because auditors were unable to obtain documentation or contact CDC representatives.

"I find it disheartening that the management of the CDC could not provide Maher Duessel with the documents required to complete the audit," Shaffer said. "Is the CDC trying to hide something from the government?"

The report criticized the handling of grant checks by CDC members.

One IDP grant check from Ford City was not deposited into the CDC's bank account and instead was given directly to the vendor, who was able to deposit the check, according to the report. Although the entire amount of the grant check was intended to pay the vendor, the handling of the check circumvented the CDC's internal control system, it said.

It also noted that one contract did not include the nondiscrimination clause, and that the CDC did not retain the performance bond, payment bond and certificate of insurance for one vendor.

"It appears that the requirements of the contract were satisfied, since all drawdowns were completed; however, we recommend that the CDC retain copies of all documents submitted to the grantor agency," auditors said in the report.

Maher Duessel was contacted for comment, but officials of the firm said Timothy Morgus, CPA, was the only person who could talk about the report and that he was not available.

In addition, the Maher Duessel report states that the grant was made on reliance that the CDC's tenant — advanced semiconductor materials manufacturer Caracal, according to Shaffer — would create 169 full-time jobs by April 1, 2007, and the job creation goals of the project were not met.

"The failure of the CDC to create economic prosperity in the borough is evident and now we as a borough are saddled with the repercussions of personal agenda and political revenge," Shaffer wrote. "The community group (CDC) has not looked out for what's best for our town's future. We have spent $11 million for the Heritage and Technology park; how many jobs do we have to show for it?"

"What are they hiding and covering up• Shaffer asked when interviewed about his statement to others on council. "Somebody needs to say what really happened. We may have to pay every penny back to the state. They (CDC) will be personally responsible."

"Furthermore, this group (CDC) tried to strong-arm trustworthy and accountable tenants out of the park who have actually created jobs in the borough," he said, citing window blind manufacturing company OEM Shades.

CDC board member Renee Zacour responded that it was Shaffer who was responsible for pewterware products maker, Carson Industries, deciding not to come to Ford City's industrial park from South Buffalo because of ongoing conflict between council and the CDC.

Zacour is a former borough council member who is running for council in the November election, as is Shaffer. Zacour previously lost her seat to Shaffer.

"This is all a smokescreen by Mr. Shaffer to cover up some of the things he's been doing since he came on council," Zacour said, emphatically denying each of Shaffer's accusations of the CDC. "Everything was fine in the bidding process. IDP officials communicated that to Maher Duessel, but apparently that wasn't sufficient for them."

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