Grant rule waived for firehouse in Arbutus, Md.

Copyright 2006 The Baltimore Sun Company

By JENNIFER SKALKA
The Baltimore Sun 

The volunteer fire department that protects Gov. Robert L. Ehrlich Jr.'s boyhood home in Arbutus has received $250,000 in grant money since 2004 from a state program whose rules explicitly prohibit payments to fire stations.

The state money went toward a planned $3.5 million expansion of the Arbutus Volunteer Fire Department, the first phase of which was celebrated a few weeks ago at a ceremony attended by first lady Kendel Ehrlich and the governor's parents, who still live a few blocks away in a brick rowhouse.

The station received funding from the Neighborhood Business Development Program, a $6 million yearly program with a mission, according to its literature, of helping stimulate small business investment in Maryland's older communities. Because of that emphasis, state statutes forbid program money to be spent on community buildings that often receive public subsidies.

The law lists fire stations, nursing homes, hospitals, community halls, and colleges and universities as prohibited projects.

Victor L. Hoskins, secretary of the state Department of Housing and Community Development, which manages the program, said he determined that the project was worthy - even if it didn't meet funding requirements.

"We try to create a hierarchy of need, and fire life safety is way up the food chain," Hoskins said.

Hoskins said he did not discuss the funding with the governor. A spokesman for Ehrlich declined to answer questions, referring inquiries to Hoskins.

But critics say the grant money seems to have been given inappropriately — and the program warrants closer scrutiny.

"It appears some liberalities have been taken in applying the letter of the law," said Warren G. Deschenaux, director of the office of policy analysis for the nonpartisan state Department of Legislative Services.

"This is a matter legislators might want to refer to the legislative auditor to determine if this is a regular practice for this program," Descheneaux said. "It may also indicate a need for stricter scrutiny of grants made by state agencies generally and increased accountability for agency managers."

Meanwhile, business leaders expressed dismay that state money earmarked for their community would be used for other purposes.

Joan Hatfield, president and CEO of the Baltimore County Chamber of Commerce, said the state must invest in local businesses to keep communities vital.

"Small businesses are struggling every day to grow and be economically viable, and to start having an [other] entity compete for those funds might cause some trepidation in trying to evaluate where does business turn in trying to grow," she said.

Tony Mohan, principal counsel for the Department of Housing and Community Development, said the statute prohibiting fire station funding can be overruled at the secretary's discretion, by signing a waiver.

But Hoskins — frequently mentioned as a potential Ehrlich running mate — did not approve a waiver until last week, after a Sun reporter inquired about the grant. An assistant to the secretary signed the document for him May 22 because Hoskins was on vacation.

Mohan said Hoskins can decide to suspend the program's rules in an emergency or if "application of this regulation would be inequitable."

"What if the state agency did not have that kind of flexibility?" Mohan said. "We would all look very rigid indeed."

Mohan said it was "an oversight" that the waiver for the Arbutus station went unsigned until last week. He provided an e-mail chain from June 4, 2004, in which he explains to Hoskins and others why he believes a waiver is justified. Hoskins replies, "This is very good. Can we share this with DBM [Department of Management and Budget]?"

Arbutus fire station officials say they spent money, disbursed in two payments of $125,000 in 2004 and 2005, toward the first phase of a renovation project. Attached to the station is an aging community center with a hall that is used for neighborhood functions; the hall is scheduled to be renovated as part of another phase of the project.

Joe Antoszewski, finance committee chairman for the Arbutus company, said the station used a professional fundraising firm based in Ellicott City to help get the cash for the building, which sits on Southwestern Boulevard across the street from the Arbutus Town Hall.

Antoszewski said his organization applied for the Neighborhood Business Development grant at the suggestion of their fundraiser, Mark Trager. The program is now known as Neighborhood BusinessWorks. Trager said he had no knowledge of the program's prohibition against giving to fire stations or community halls and could not remember who directed him to the Housing and Community Development program.

"I know nothing about it," he said, adding that he did discuss the grant in person with Hoskins.

Antoszewski said the volunteer fire station in Arbutus has always been a central gathering point for the community. Even the governor, when he was growing up there, would swing by for dances and bull roasts, Antoszewski said.

Deschenaux, the policy analyst, said the Arbutus grant is symptomatic of a broader state government problem. Programs like the one in the housing department — created in 1995 under the administration of Gov. Parris N. Glendening, a Democrat — are tucked away in agency budgets, he said. Officials have wide latitude in determining which projects are most worthy.

"Curious grants are hardly without precedent in state government," Deschenaux said. "What is different in this instance is that the agency apparently waived an explicit prohibition on grants for that purpose. That this occurred points out the tremendous discretion that state agencies are allowed in making these decisions, and the need for oversight of the decision process."

The Arbutus station has collected additional state money since Ehrlich has taken office.

In May 2005, the station received a $99,335 grant for a new sprinkler system from the Volunteer Fire Company Emergency Assistance Fund, a program that provides grants and loans for equipment. The grant was approved by the Board of Public Works, composed of the governor, the state treasurer and the comptroller, on the same day that five other fire companies received money. But the other projects were approved as loans, not grants, so they will have to pay back some or all of the funds.

The Arbutus station is one of about 365 volunteer fire companies in Maryland, of which 35 are in Baltimore County. While some state programs provide loans — and on rarer occasions grants — to stations looking to make improvements or additions, most depend on bake sales, carnivals, bingo and the like to raise needed cash.

Bud Staigerwald, president of the Baltimore County Volunteer Firemen's Association, did not want to comment on the Arbutus grants, but he said many stations could have used the money.

"I don't think any company out there would not accept money from the state if they had money to spare," Staigerwald said.

House Speaker Michael E. Busch, a Democrat, said the Arbutus grants smack of "political patronage" and the governor could have put the money in his capital budget instead or signed off on a grant from a fund specifically established to provide aid to fire companies.

"There were a thousand legitimate ways to do this," Busch said.