Voluntary Action Center drops ask for federal funding for homeless center over conflict-of-interest concerns

COLUMBIA, Mo. (KMIZ)

Questions over federal conflict-of-interest rules caused a Columbia nonprofit to pull its funding requests for a homelessness resource center.

The Voluntary Action Center withdrew its requests for money through the federal Community Development Block Grant program to help build its Opportunity Campus on Bowling Street and Business Loop 70 East. VAC's withdrawal includes $100,000 awarded to it in the city's 2023 budget and a proposed $50,000 award in the fiscal year 2024 budget.

The City of Columbia doles out money from the Department of Housing and Urban Development's CDBG program every year. City staff have spent months working with HUD officials to see if awarding money to the Opportunity Campus project would run afoul of HUD rules regarding conflicts of interest.

VAC received the land for the project from Ward 6 Councilwoman Betsy Peters, who planned to sell it to the group and donate the proceeds back to VAC over six years. Peters disclosed her role in the land sale in August 2022 and recused herself from several votes dealing with the project and CDBG funding.

City Attorney Nancy Thompson said she began working with HUD staff in October 2022 on securing an exception to department rules prohibiting those in decision-making positions from gaining any financial benefit from "CDBG-assisted activities."

Thompson said she began considering other options due to the length of time it was taking HUD to give them an answer on the exception. One of those included VAC withdrawing its request for funding.

That withdrawal happened Wednesday, Thompson wrote in an email.

"Any future requests for CDBG funding by VAC will need to be evaluated for conflicts of interest on a case by case basis," she said in the email.

VAC Executive Director Ed Stansberry did not respond to a request for comment.

Peters said she was pleased to hear the issue had finally been resolved.

"I am planning to sell VAC the property for the same price I bought it for and hope that we can close this sale in the next month or two, thereby allowing them to start construction of the Opportunity Campus," Peters said. "I appreciate all to work that was done by the city attorney and VAC to make sure that this transaction was above board and transparent."

Emails obtained by ABC 17 News show Thompson and others had sought specific answers on the potential conflict for months.

HUD staff had asked the city for details on the project in March. Thompson and others provided information shortly after, with Thompson asking for clarification on a variety of issues.

Thompson asked if the City would still need an exception from HUD if Peters simply donated the land rather than selling it. The email thread shows no response from HUD until June, despite several emails from Thompson asking for an update.

On June 21, HUD's Dominique Waters wrote the city would still need the exception even if Peters donated the land. Waters also said there would be no need for an exception if VAC withdrew its CDBG funding requests.

"If there is no CDBG funding in the project, then there would be no need for a conflict of interest exception request because as you stated it would no longer be a CDBG assisted activity," Waters wrote.

Thompson advised Peters in a June 29 email to continue to recuse herself from such votes and disclose any updates with regard to the project "until all issues regarding the real estate transaction and construction of the facility are finalized."

VAC's plan for a no-barrier shelter and resource center for people experiencing homelessness has been debated for months at City Council meetings. The council approved rezoning and a conditional use permit for the shelter despite concerns from neighbors. Several other housing groups have supported VAC's plan, citing the need for such resources for people struggling.

VAC has asked Boone County for $3.8 million in its American Rescue Plan Act funding. Boone County Commissioner Janet Thompson said she hopes to have the first round of awards from the county by the end of the summer.