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San
Antonio Express-News
SAHA faces giving back fed funds
04/28/2004
Ron
Wilson
The
San Antonio Housing Authority must repay $1.86 million to the U.S.
government and could be charged an additional $2.02 million,
according to a federal audit of the Mirasol Homes public housing
project.
Details
in the report released Tuesday suggest there was a sweetheart deal
between SAHA and builder KB Home that went back to 1997, two years
before the Mirasol contract was signed.
SAHA
President Melvin Braziel denied that charge and said the
long-awaited audit report was the first to raise that allegation. KB
Home couldn't be reached for comment.
The
audit says $1.86 million must be returned because it was spent in
mismanaging the contaminated landfill at Mirasol. The report also
said SAHA violated state environmental laws.
The
$2.02 million was money spent on salaries the housing authority
hasn't documented.
Ed
Hinojosa, SAHA's chief financial officer, said he's confident that
paperwork will show the $2.02 million was spent appropriately.
U.S.
Rep. Charlie Gonzalez, D-San Antonio, requested the audit from the
Office of the Inspector General of the U.S. Department of Housing
and Urban Development last May in response to public complaints
about the homes' quality of design, workmanship and materials.
Late
Tuesday, Gonzalez said he hadn't had time to study the report but
that a cursory look revealed some "disturbing problems."
"For
SAHA to misappropriate, mismanage or otherwise not account for
nearly $4 million in federal funds is inexcusable and merits further
investigation," he said in a statement.
"The
report implies that a deal was in the works long before the bidding
process even began."
Gonzalez
also criticized the report's cursory treatment of questions about
materials and workmanship in the project's 247 homes.
The
inspector general's report mentioned in passing that it looked at a
report by Dan Medley of the Forensic Consulting Group that was
released in May. Medley's report, commissioned by SAHA in the wake
of complaints about quality, said the standards set forth in the
documents were below industry standards and didn't meet the
requirements of a federal HOPE VI grant.
Medley
found that "materials used were some of the least expensive,
and therefore most likely to fail"; some windows had been
installed out of square and could not be shut; and an air
conditioner was "poorly installed and was leaking condensate
onto the particle board platform below."
The
inspector general's new report did not go into specifics about
materials, other than to say they met city building codes.
The
report's most serious charge is that SAHA adopted procedures that
"limited competition" for the Mirasol contract.
In
1997, two years before the Mirasol contract was signed, "SAHA's
vice president of investment initiatives contacted KB Home and
initiated a standing commitment to construct homes" at the
Menchaca subdivision.
Though
SAHA did not get a separate grant to build those homes, "the
Menchaca homes were included in the Mirasol HOPE VI grant,"
according to the report.
Braziel
said he never heard anything about that "standing
commitment" until the inspector general's report came out.
The
report said that during the bidding process, in 1999, SAHA included
a stiff financing clause.
Braziel
said this was to ensure SAHA got a builder healthy enough to
complete the project.
But
other builders told investigators they would have bid on Mirasol had
the clause not been included.
"Therefore,
the financing clause contributed to the limited competition,"
the report stated.
Midway
through the project, the stiff financing rules were done away with
and regular payments were made.
The
report also said the developer, the Mirasol Joint Venture Team, was
allowed to draft its own contract.
Braziel
said contractors frequently bring in contracts but that all drafts
are reviewed by staff and by attorneys.
SAHA
paid an average of $69,226 for the homes, slightly less than the
contracted price.
He
said SAHA agreed to some of the report's findings, including the
need to return the $1.86 million spent because of the landfill.
The
housing authority asserts that the landfill problem was caused in
part when former President Apolonio Flores failed to follow up on a
1995 report saying an environmental study was needed.
"That's
news to me," Flores said Tuesday, saying he had no recollection
of any such report.
"Even
if it were true," he said, "I left in 1997, and they
continued doing what they were doing until 2000? Why did it take
them so long to catch a mistake they say they already (had)
caught?"
Braziel
said SAHA has learned and changed a lot since the Mirasol days. And
personnel responsible for Mirasol decisions no longer are at SAHA,
he said.
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