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Deputy mayor missed 4 payments on loan

Summers says he didn't know

By Dan Klepal

Courier-Journal (Kentucky)

June 19, 2008

One of Louisville Metro Mayor Jerry Abramson's top administrators, Deputy Mayor William Summers IV, missed the initial four months of payments on a low-interest federal housing loan administered by metro government.

Summers said in an interview that he was unaware until last month that the payments had been missed.

And Chad Carlton, a spokesman for Abramson, said the late payment was the fault of the city's finance department, which was more than three months late in sending a payment coupon book to Summers and his two partners.

Summers, along with Allen Rosenstein and Ronald Tasman, purchased an apartment building at 901 Franklin St. in 2001 and assumed a $60,000 federal loan that is awarded and collected by city government. Summers did not work for the city at the time.

Repayment of the loan -- $579.36 a month for 10 years -- was to begin in February of this year.

But the city didn't receive a first payment on the loan until June 2, according to a receipt from the transaction.

Summers' check, for $2,896.80, was dated May 16, two days after The Courier-Journal filed an open-records request for documents showing the repayment history on the loan.

The amount that Summers paid brings the loan current through June -- with no late fees or penalties.

Summers, who was a vice president for Greater Louisville Inc. in 2001 when he and his partners purchased the property, said in an interview that he was unaware payments on the loan had been missed until "alerted" to it by the newspaper's public information request.

"I don't even deal with it," Summers said of the loan. "If (the newspaper) had not made an inquiry, I would never have known. I called Ronnie (Tasman) and said whatever it is we should be doing, we need to make sure we're doing it."

Kimberly Bunton, director of the city's Department of Housing and Family Services, which awards such loans, said part of the problem is the city's antiquated system of notifying the finance department when the loans come due.

The department came under heavy criticism Tuesday when the Metro Council budget committee was told that the agency has not spent more than $19 million in federal affordable housing grants, some of them dating to the 1990s.

City and federal officials are working together to reconcile those grants.

Loan made in 1998

The original loan for the Franklin Street property was made in 1998 with federal Investor Home funds through the U.S. Department of Housing and Urban Development. Repayment was to begin 10 years later, in 2008. Summers and his partners assumed the loan, and the 2008 repayment deadline, when they purchased the building. Their limited liability corporation, Summers, Rosenstein & Tasman, is a for-profit entity.

Bunton said the group did not have to reapply to assume the loan, but the apartment building still has to meet the affordable-housing requirements set out in the federal loan agreement.

The city does not charge late fees or penalties to those who get such loans, except in extreme circumstances when borrowers are obviously ignoring repayment, Bunton said.

"Are we proud something slipped through the cracks? Occasionally a loan is a couple of months behind before we send out notification," she said. "Quite honestly, we're just happy when people are repaying."

When asked if the borrower has a responsibility to know when loans are due, Bunton responded: "They have a responsibility. They have the loan documents just like we have the loan documents. (But) I can't say we're shifting the burden to them to tell us the loan is coming due."

Summers said his payments will remain current from now on.

Reporter Dan Klepal can be reached at (502) 582-4475.