Health Services Center, a Hobson City-based nonprofit that provides a variety of services to a 14-county area, including HIV testing, substance abuse, medical care and housing, filed the lawsuit Tuesday in Calhoun County Circuit Court. The lawsuit alleges the city breached its agreement to provide a $12,000 grant in support to Health Services. However, the Alabama Department of Economic and Community Affairs, the agency that allocated the grant money, alleges Health Services did not receive the money because it failed to meet all the grant requirements.
Attempts to reach representatives of Health Services were unsuccessful Wednesday.
The lawsuit states that Anniston executed the funding agreement on Sept. 26, 2012, obligating the city to pay Health Services $12,000 from the Emergency Solutions Grant program through April 18, 2014. The U.S. Department of Housing and Urban Development offers the grant to fund low-income housing services.
Anniston received the grant from ADECA, which in turn received the money for it from HUD.
The lawsuit states, however, that the grant was suspended on July 16.
Health Services had started allocating money and began other initiatives in anticipation of receiving the grant. Failure to receive the money has caused the nonprofit continued harm, the lawsuit states.
Jim Plott, spokesman for ADECA, said the grant was revoked because Health Services did not meet HUD's definition of an emergency services center, one of the requirements for the money.
"Health Services was requiring people to sign an occupancy agreement in its housing," Plott said. "Under HUD's definition of emergency services center, you can't do that."
Donald Stewart, attorney for Health Services, denied the allegation that the nonprofit didn't meet the necessary grant requirements.
"They made the applications for the grant as I understand it," Stewart said. "If they didn't qualify, you'd think they'd be told that at the beginning."
Danny McCullars, Anniston’s finance director, who was the city's interim city manager at the time the grant was suspended, said he could not reveal many details about the situation since the lawsuit is pending litigation. However, the grant was all federally funded and the city acted appropriately under the circumstances, McCullars said.
"We were simply the administrators of the grant, it was not city money," McCullars said. "We think we acted within federal regulations."
The lawsuit requests the court require Anniston to honor its agreement, pay for attorney's fees and provide any other relief to which Health Services might be entitled.
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.