Fair Share, New Jersey's most prominent affordable-housing advocacy group, had asked the court to appoint a forensic accountant to review Cherry Hill's books. The township informed Fair Share last week that it had not put the money into an independent interest-bearing account, as required.
"They got into this [situation] intentionally, or at a minimum through gross neglect," Fair Share attorney Kevin Walsh argued in court. "When a trustee has failed in so many ways, it's appropriate to take a close look at the accounting."
The legal row is the latest in a long stretch of litigation stemming from two state Supreme Court decisions in the 1970s and '80s that mandated New Jersey towns to provide a minimum level of low-income housing.
The future of the state's affordable-housing rules are set to be decided by the state Supreme Court.
Cherry Hill improperly spent more than $500,000 in development fees intended for affordable housing, according to Fair Share's attorneys.
The township conceded in court that approximately $200,000 went toward other expenses, but its attorneys argued that the remaining funds were not off limits due to a 2003 legal settlement between the two parties. Millenky said he would address that issue later.
In a brief filed last week, attorneys for Fair Share accused the township of intentionally misleading the group as it investigated how the money had been spent.
Fair Share's "scheme has been to create as much confusion as possible," said Jeffrey R. Surenian, an attorney representing Cherry Hill. "Amid all of these allegations they've made, we didn't contest the $200,000."
Surenian said Cherry Hill would repay the misallocated funds.
Millenky declined to order an independent accountant. He asked Fair Share to review the township's own audits to try to determine how the money was spent.
"There was never a formal demand [by Fair Share] for all the accounting information," Millenky said.
Sitting in the courtroom on Monday was Ronald B. Evans, 80, president of Fair Share Housing Center and a plaintiff in one of the famed Mount Laurel cases that led to creation of New Jersey's affordable housing rules.
Asked if housing opportunities for low-income families had improved since then, Evans replied, "It's a little better now, but there's still a long way to go."
Contact staff writer James Osborne at 856-779-3876 or jaosborne@phillynews.com.
