Winchester commissioners disclose conflicts, recuse from Lincoln Street CDBG Phase 2; commission re-approves related resolutions

Two Winchester city commissioners disclosed potential conflicts of interest and recused themselves from decisions on the Lincoln Street redevelopment project phase 2, then the Winchester City Commission voted to approve a set of Community Development Block Grant (CDBG) resolutions to move the project forward.

The recusal notice centered on Commissioner Shannon Cox’s service on the board of Habitat for Humanity of Madison and Clark County and on Commissioner Joe Chenault’s family interest in a property on Lincoln Street. City Attorney William A. Dyckman and CDBG grant administrator Chris Lowry said the disclosures were required under federal CDBG conflict-of-interest rules (24 CFR 570.489(h)).

The disclosures matter because the Lincoln Street work is planned to be funded with HUD Community Development Block Grant funds administered through the Kentucky Department for Local Government. Ms. Lowry told commissioners the state had requested a detailed disclosure before finalizing the grant agreement and releasing funds.

Commissioner Shannon Cox said, "I will certainly recuse myself from any matter involving this project." Commissioner Joe Chenault stated he, too, would recuse himself, noting his wife is an heir to property on Lincoln Street and that he also serves on the Winchester Urban Renewal Board.

Dyckman told the commission that, in his opinion, "[Commissioner Cox] does not violate any state or local laws so long as he recuses himself from any city commission action regarding Habitat or the Lincoln Street redevelopment project." Lowry explained the city will obtain independent appraisals for the Chenault-family property at 44 Seaboard Street and will not pay more than fair market value as determined by appraisers.

After the disclosures and the commissioners’ departures from the room for those items, the commission took separate roll-call or voice votes to approve seven resolutions related to the Lincoln Street CDBG Phase 2 project. The commission approved: - Resolution accepting the Redevelopment Project Phase 2 (agenda item 6A); - Resolution adopting CDBG procurement standards (6B); - Resolution authorizing filing of a 2023 housing CDBG application (6C); - Resolution adopting the Lincoln Street redevelopment project phase 2 urban renewal plan (6D); - Resolution addressing elimination of poor housing conditions as part of the Lincoln Street project (6E); - Resolution concerning CDBG housing project conflict of interest procedures for Lincoln Street Phase 2 (6F); - Resolution adopting a guide-form residential anti-displacement and relocation assistance plan under Section 104(d) of the Housing and Community Development Act of 1974, as amended (6G).

On each of the seven items the commission recorded the motion and a majority vote. At least one commissioner was recorded as opposing on some votes (transcript: "Any opposed by Leitzman?") and at least one commissioner recused (recorded recusal for Commissioner Toole on a separate ordinance vote). The record transcribed the outcome for each motion as "motion carries." The minutes reflect the commission’s intent to re-vote on each required resolution so the Department for Local Government would have a clear record of the local approvals.

Lowry told the commission the city has submitted required materials to the state and was waiting for the formal grant agreement; once the state executes that agreement the city can access CDBG funds and begin project work. She advised that, because of the conflicts, the two recused commissioners should remain absent from future votes or take other measures consistent with the conflict-of-interest resolution.

The action clears administrative steps needed for state review of the CDBG application and positions the city to proceed once the Kentucky Department for Local Government completes its approvals.