Published: April 19, 2006 02:24 pm         

Letters to the Editor - April 20, 2006

Cherryl Ferguson and Elmer Johnson

To the Editor:

This letter is written by the former Trustees of the Grady County Home Finance Authority (“the Authority”) to inform each of you as to the reasons we are no longer Trustees of the Grady County Home Finance Authority and to advise you as to what is occurring with the Authority’s money. The Grady County Commissioners replaced Mr. Don Mileur, a long-time Trustee of the Trust with Mr. Elmer Klippel approximately ten (10) days ago.

The other two of us resigned our positions as long-time Trustees of the Trust late last week. The facts contained in this letter were documented by Tom Frailey, who has been the Authority’s legal counsel from its inception. Mr. Frailey also resigned his position as legal coun-sel late last week. The reasons given by the County Commissioners for our replacement and resignations has been sketchy at best. Before getting into the details of the recent events, we believe a little history will be helpful. The Authority was formed in 1979 for the purpose of providing decent, safe and sanitary residential housing facilities for families of low to moderate income within the territorial limits of Grady County.

The original Trustees of this Trust were J.O. Wood, Lon Wampler and Joseph E. Mileur, Jr. prominent citizens of Grady County. As these gentlemen retired from the Authority, we the undersigned former Trustees were appointed to take their place and we have served in that capacity for several years. We believe the operation of the Trust has been and continues to be very successful in providing funds to assist in the housing needs of low to moderate income families in Grady County. In the past twenty-seven (27) years the Authority has issued bonds which have provided funds well in excess of $40,000,000 all of which have been used to provide funding for housing used and occupied by families of low to moderate in-come in Grady County.

During the course of the Trust administering these housing programs, the Trustees have been fortunate enough through their actions and with the advice and help of highly skilled and qualified consultants to accumulate for the Authority’s use the sum of approxi-mately $2,300,000.

Those funds have been invested over the years and the income and part of the principal of those investments has been used to fund other projects which accommodate the residential needs of low to moderate income families in Grady County. Nearly $500,000 has been expended from these funds for senior citizen multi-family residential housing in Rush Springs, for assistance in providing residential housing for the homeless through the Resurrection House in Chickasha, which benefits all of Grady County, and for finan-cial assistance to Grady County Youth Services in the construction of their housing dormitory, which is utilized in their efforts to assist youth throughout Grady County. Since December of 2000, another $400,000, which was generated from the income from these invested funds, has been used to provide funds for low to moderate income families in such programs as Home-Buyers Assistance and Rehabilitation Loans.

These funds have been used to assist low to moderate income families in down payment assistance so that families who could not otherwise afford to buy a home can do so. The Rehabilitation Program allowed low to moderate income families to renovate their homes to be in compliance with health and safety codes. At no time has the Authority ever received any money from Grady County or from the State of Oklahoma or from any other private or public source of funds. The Authority’s funds have come from the hard work and achievement of our predecessors as Trustees and we hope, through our stewardship of those funds. The low to moderate income families of Grady County have received nearly 100% of all funds that have come into the Authority’s possession over the years.

Over the last few years while we were Trustees, the only administrative expenses of the Trust were payments to the certified public accountant for the annual audit that is required by state law. All of the rest of the Authority’s funds and the income from those funds have been available to low to moderate income families in Grady County for their housing needs. Recently things have changed. As a result of those changes each of us reached a decision that we no longer wish to be associated with the future activities of the Authority.

Approximately one (1) year ago, Mr. Jack Porter, as a representative of the Grady County Commissioners, along with representatives of the Grady County Industrial Authority attended a meeting of our Authority. At that meeting, we were informed that it was necessary to complete an addition to the jail and that the Authority should use its funds to loan to the Grady County Industrial Authority to make those additions. We were told at that meeting that the jail expansion could be completely constructed for 1.5 million dollars.

As prudent Trustees and stewards of the County’s public funds we asked for certain information from the Grady County Industrial Authority and the County as to whether or not any loan to them for such a purpose would be a wise use of your public funds which we are charged with the duty of protecting. Several months later in September 2005 the Authority was presented with a cost estimate for the jail expansion which the Authority requested and which was done by a reputable architectural and construction firm. The cost of the expansion was not $1.5 million which we were originally told, but in fact exceeded $2,500,000. The Authority was never contacted again concerning this initial proposal.

In late October and early November, 2005 we were again approached by Commissioner Jack Porter, representatives of the Grady County Indus-trial Authority, representatives of the Grady County Criminal Justice Authority and the Sheriff and members of his department. At a meeting of our Authority we were informed by these groups that $3,000,000 was necessary to address the expansion of the fourth floor of the jail and address the indebtedness of the Grady County Industrial Authority’s $17,000,000 debt on the jail. We were told that $2.5 million was neces-sary to expand the fourth floor of the jail and $500,000 would be necessary for the May 2006 bond payment on the Grady County Industrial Authority’s $17,000,000 debt on the jail. We were told to give, not loan, $1,750,000 of the Authority’s funds to the County, and the other $1,250,000 would be raised by a bank consortium loan from local bankers. There was no plan by the County to repay the $1,750,000 to the Authority.

At that meeting, we again expressed our concerns about using the Authority’s funds in such a manner. We informed those groups that this was not within the stated public purpose of the Authority and that retaining the Authority’s funds was necessary so the funds could be invested in order to produce income to continue the projects of the Authority that we have enumerated above. After the meeting, although there was some informal contact by some of these groups, this proposal was never mentioned to us again. Finally, a little more than a month ago, Commissioner Jack Porter, as a representative of the County Commissioners, contacted us and advised us that the debt payment on the $17,000,000 loan on the jail was due on May 1, 2006.

We were further advised that this payment was in excess of $800,000 and that the County did not have any money to make the payment. Also at that time, a demand was made upon us to furnish the $800,000 from our Authority funds to make that debt payment. Again, we expressed our position that these funds should be used in promoting housing for low to moderate income families in Grady County. We were told at that time that if we did not give them the funds that the County Commissioners would either dissolve the Trust and take the money or replace us at Trustees of the Trust. At that point, Trustee Don Mileur was replaced as a trustee of the Trust and Mr. Elmer Klippel was appointed in his place.

This replacement occurred within the last ten (10) days. Next, Commissioner Porter and Commissioner Testerman contacted the remaining two (2) of us and we were instructed to call a meeting of the Authority and place on the Authority’s agenda an item which would transfer the $800,000 to the County. Upon receiving this demand both Elmer Johnson and Cherryl Fergason as the remaining Trustees each decided that they would not comply with the Commissioners demands and that our only alternative was to resign. We each submitted our resignations to the County Commissioners on Thursday of last week. We are proud to have served as Trustees of the Grady County Home Finance Authority.

The County Commissioners have made a determination that is more important to make a debt payment on the jail that it is to provide funding for the housing needs of low to moderate income families in Grady County thought the Grady County Home Finance Authority. With this decision, we disagree and cannot abide. However, what is more important is how each of you as residents and taxpayers of Grady County feel about the decision the County Commissioners have reached. Wednesday, April 19, 2006.

Cherryl Ferguson and Elmer Johnson