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Sparta city leaders under fire for allegedly misusing federal grant funds

The Georgia Department of Community Affairs alleges that the city of Sparta misused money that was meant to be used to renovate and beautify the downtown area / Eric Mock (WGXA)

SPARTA, Ga. -- After allegedly misusing a grant intended to be used to renovate the downtown area, the city of Sparta now owes the Georgia Department of Community Affairs $179,000.

The Georgia Department of Community Affairs gives federal money to cities and counties across the state through the Community Block Development Grant program. That purpose of that grant money is to help those areas improve their downtown area and to fight blight.

The grant money in Sparta is a revolving loan that is given to local developers who, after investing in a renovation project, pay back the money to their local governments in periodic $7,500 payments. Sparta City government is then supposed to give that money tho other local developers, and the cycle continues.

The Community Block Development Grant program gave the city of Sparta a $375,000 loan intended for developers who wanted to renovate and beautify the downtown area. However, the Georgia Department of Community Affairs alleges that the city has been pocketing the loan payments and using it for their general expenses.

The department asserts that the city used $108,000 in ineligible expenses, which included transfers to the city's general fund, city automobile expenses, air conditioning services, potholes repairs and other road services. They also maintain that the city used an additional $71,000 in ineligible expenses by approving and distributing loans to citizens of Sparta.

On September 22nd, the department sent a letter to the mayor and city council demanding that the city pay back the whole sum--$179,000--by October 21st. They also ask that the city repay the rest of the $375,000 loan--$190,000--by giving the $7,500 payments from the developers directly to the department.

Griffith Polatty, a preservation consultant in Sparta, said he found out about the alleged wrongful use of the revolving loan about a year and a half ago when he wanted to buy some properties in downtown in order to renovate them. He said he went to the city to ask if he could get some of those funds to use for his development and that the city told him that the funds weren't there because they had used it for their general expenses.

Pollaty said he thought that was strange because he was under the impression that the city couldn't use the grant money in that manner, so he started doing some digging through open records requests to find out for himself if the city was guilty of impropriety. He then turned the results of his research over to the Georgia Department of Community Affairs, leading to their request that the city pay back the loan.

Sparta Mayor William Evans said in an email to WGXA that the city is disputing the allegations that they misused the $79,000 because they say that that money was used to lend money to small business owners in downtown in order to help revitalize the area. The city is not, however, disputing the misuse of $103,000 that allegedly was used to pay for general expenses.

A letter from city to the department alleges that many of those small business owners who were given money through the revolving loan could not repay the money they were lent.


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