The separation of church and state has been put on hold in West Palm Beach, Fla., as the city has received a demand from the U.S. Department of Housing and Urban Development (HUD) to repay $654,000 by Jan. 4 for failure to administer federally funded low-income housing projects run by a local church. The city, in turn, is insisting that the church owes it as much as $1.1 million and is withholding information on how it used HUD's money.
The Palm Beach Post reports that between 2003 and 2009, the city government contracted Redemptive Life Urban Initiatives – a nonprofit associated with the Redemptive Life Fellowship Church operated by Bishop Harold Ray (pictured left) – to build at least 22 houses using $1.6 million in HUD funds. Although the homes were constructed and sold, the city says that it has never received documentation from the nonprofit to confirm that HUD's funds were not misused in board member payments or for hiring builders without going through a formal bidding process.
For his part, Ray accused the city of inadequate oversight for the projects and says that his nonprofit has provided the city with hundreds of pages of documents relating to the project. However, Valmarie Turner, the city's housing director, says that the documents do not answer a number of questions on how the HUD funds were allocated.
City officials told the Palm Beach Post that they may wind up paying HUD up to $4.1 million – a repayment of the original federal grant total plus $2.5 million that the city claims was generated by the home sales. Ray insists that the home sales were not in the $2.5 million range.