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Friday, July 10, 2009

State Auditor: Changes Needed With Healthy Home Repair Program, LRA

In April 2009, Missouri State Auditor Susan Montee completed an audit of the development agencies of the City of St. Louis. The full report is available online here. There are some routine discrepancies noted as well as some very serious ones.

The two that are most relevant to distressed neighborhoods in the city concern the Healthy Home Repair program's dependence on ward-based allocation rather than on actual need, and Land Reutilization Authority (LRA) sales policy.

According to the report, "[t]he city usually allocates the same amount of Healthy Home Repair Program monies to each aldermanic ward, and it appears the city does not allocate the monies based on the area of greatest need. As of August 28, 2008, there were 3,325 clients on waiting lists mainly in wards with little or no unspent monies, while there were 4 wards with unspent balances that exceeded $120,000 each with small or no waiting lists."

While all homeowners in the city have a right to access that money, the surplus situation essentially means that many people are not getting money or experiencing delays because some money cannot be spent. That's absurd. Why not restructure the program so that the pool of money is allocation through citywide open application? that way, every dollar of this precious and important fund would be spent. In many distressed neighborhoods, this money is crucial to stabilization.

The audit's statements on the LRA are not as specific, but do note the absence of good record-keeping ("LRA does not have contracts related to costs incurred for property maintenance and upkeep"), maintenance policy ("[e]xpenses incurred for maintenance and upkeep are not allocated to individual properties as required by state law") and sales ("policies for land sale pricing are outdated or not adequately documented").


Anonymous said...

Excellent post! This thread should get lots of comments and discussion.

The audit finding is a reflection of the role of aldermen in the City of St. Louis and the difficulty in getting anything approved city wide.

This situation is a good example of why a return to a bicameral city legislature would be worth considering.

Without having some aldermen serving at large, we can expect to see a continuation of the policy of city resources being divided up 28 ways.

Why are blogs important? Does anyone think this discussion would see the light of day in the mainstream media?

barbara_on_19th said...

I'm pretty happy with Ms. Montee right now!

samizdat said...

Thank you, Susan Montee, for shining a light into a dark corner of City governance. As anon said, the usual machine inefficiencies result in inequitable distribution of monies intended for City-wide services. I can't understand why these funds aren't dispersed centrally. I wonder how much money is wasted in redundant staffing.

Anonymous said...

Oh, great observation Samizdat. One of the good things about the Healthy Home Repair Program is that it is more efficiently run than the old style, ward-based, home repair programs.

Now some aldermen actually want to return things to the old, ward-based system. It turns into a patronage system where each ward involved gets a couple of jobs to run a program worth maybe $100,000 per ward.

Keep shining the light on this everyone.

samizdat said...

Ya' know, looking at your last paragraph, I'd be able to drive a truck loaded with corruption and malfeasance through all of that poorly documented record-keeping. Poor documentation is the corrupt public officials best friend. Well, that and silent accomplices.

barbara_on_19th said...

The money that comes into the city for these programs is based on the existence of the poorer areas that need the help. Then we turn around and spend the money on the areas that need it less. This is like taking funds needed to repair a leaky roof and instead spending it on carpet. Need-to-have comes first, then the nice-to-have stuff. Unless, of course, the folks making the spending decisions have made a decision that certain areas of the city don't deserve the same preservation, maintenance and developement as other areas.

barbara_on_19th said...

It is an error of federal-crime proportions to deliberately misspend Community Development Block Grant funds, one of the main sources of funding of these agencies. The CDBG money comes into the city on the basis of our demographics -- poverty, segregation, etc. The city has to post a consolidated plan showing how they are going to spend the money to provide fair housing, do lead abatement, reduce segregation, etc. This money stream is ultimately governed by the Fair Housing Act, Title VIII of the Civil Rights Act of 1968. HOWEVER, if the city is not showing why they are spending, or able track back funds to projects, that means there is no way to show that the city is actually fulfilling their action plan. If you look at the city's Annual Reports you can see a pattern of spending that seems to route itself around the poorest areas. But money doesn't just decide to spend itself... where is the money being spent, by whom and why? For instance, are we taxpayers paying for these agencies to do work at the behest of private developers who fund campaigns?

Anonymous said...

The audit finding shows once again that the northside continues to be shortchanged on redevelopment resources. Northside wards should receive most of the home repair funds because they have the most need. It didn't take an audit to show that. A good set of eyes is enough.

Anonymous said...

There are many problems in the home repair arena. Here are just a few.

Long waiting lists -

Some wards have hundreds of households on waiting lists that can last for years on end. There is simply not enough money to help every one in need. Not even close. Yet some aldermen keep referring people to the program.

Enabling the "free money mindset" -

When people think there is free money available, they will line up from 1200 Market to the Galleria to get in on the action. They think if they just keep asking for assistance, or ask the right person, then somehow, some way, they will eventually get the money. WRONG. Instead, they defer much needed maintenance with no light at the end of the tunnel. The situation feeds on itself, building frustration, and causing more property decay.

Too little too late -

Most city houses, even the well maintained ones, require continuous reinvestment. Repairs on an old house do not come cheap. $10,000 -$20,000 on a raggedy old house does practically nothing. Many houses on the home repair waiting list need more like $50,000 - $100,000 in rehab, not just a city grant. Which gets to the last and most significant issue...

Lack of leverage -

When the city makes available $10,000 - $20,000 in repair funds available, what does the homeowner put in the deal? What if those funds were used to pay interest on a bank loan rather than 100% of a project's cost? What about creating a guarantee fund to help low income borrowers get their own loans? All of these complications make the program harder to sell to the public, but stretch the money to more households.

Ideally, the city would get out of running the home repair business altogether and instead find ways to partner with other organizations, contractors and financial institutions to create a more leveraged, less bureaucratic delivery system.

The ironic thing about the situation is that CDA and the Mayor's office understand this. They have built partnerships over the years to do just that. The programs get bogged down at the ward level where people keep trying to reinvent the wheel.

Liquid EPDM said...

Very informative post, this is really a good thing about healthy home repairing program, the audit really shows that northside is going to development and this is really good, i am really thankful to Ms Susan Montee, keep it up.