All five members of the Vermilion County Housing Authority Board of Commissioners have resigned out of frustration with federal officials’ handling of an unpaid loan that’s resulted in Longview Bank and Trust filing suit against the housing authority. This is the Housing Authority that deals from housing outside of Danville. It is separate from the Danville Housing Authority.
The trouble began when former Executive Director Tony Hasbargen arranged a $1.6 million loan that has resulted in a lawsuit against the housing authority and four commissioners who served during Hasbargen’s tenure. The commissioners feel that federal officials and Hasbargen were the negligent ones but local citizens serving voluntarily were also named in the lawsuit, filed in Vermilion County Circuit Court. In 2005, Hasbargen arranged the $1.6 million loan for renovations to housing authority properties through a local bank. Hasbargen used federal funds to make some payments on the loan, and in 2012, he had it refinanced by Longview Bank and Trust. In 2013, Hasbargen was fired following allegations of improper spending. HUD determined the loan was not valid because federal property cannot be mortgaged. Payments to the bank ceased at that time and have not been made since. Local commissioners have tried various ways of resolving the situation, including appealing to HUD officials for a waiver of regulations to allow the housing authority to use its federal funds to repay the loan, but they have refused. Bank officials say that the bank was out of options and a lawsuit was its only course of action to recoup its investment.
Housing authority commissioners are appointed by the Vermilion County Board. County board Chairman Mike Marron says he wants to meet with HUD Chicago officials to work on resolving the issue.