THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, October 28, 1996 TAG: 9610280043
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY BATTINTO BATTS JR., STAFF WRITER
DATELINE: PORTSMOUTH LENGTH: 108 lines
Andrew Brooks kept his thermostat at 90 degrees last winter, but his house was still so cold he warned guests not to remove their coats.
Brooks said the five-bedroom, refurbished house he purchased from the Portsmouth Community Development Group lacks adequate heating.
After paying an $800 gas bill one month, Brooks - like many other people who have bought homes from the development group - decided to complain to the city.
After years of listening to complaints from homeowners and two recent audits of the nonprofit group's financial records, the city delivered a message to PCDG: No more taxpayer dollars until you get your act together.
The organization refurbishes old homes and builds new ones in some of Portsmouth's blighted neighborhoods.
The decision has left the group strapped for money and could mean Brooks and other homeowners will have to wait even longer for their problems to be corrected.
``I'm working as hard as I can work and I want to get what I paid for,'' said Brooks, a father of six.
``This means I have to freeze another winter.''
City officials declined to go on the record about their contract dealings with PCDG, but those involved with the negotiations indicated that the audits did not reveal any wrongdoing. They did, however, raise some concerns about the organization's ability to manage its finances and contracts with builders, the officials said.
Among the red flags:
Required documents were missing from files.
Construction projects took too long to complete.
Procedures for selecting families for homes were not well-documented.
The Department of Housing and Urban Development allocated roughly $818,000 to Portsmouth for the 1996 fiscal year to help the city improve its housing.
At least 15 percent of that money must be allocated to organizations that are engaged in community housing development. It's unclear how much money the Portsmouth Community Development Group is eligible for this year, but city records show that the organization received $120,000 in federal funds in 1995.
The city wants explanations for the problems found in the audits and procedures to prevent reoccurrence before a new contract is signed.
``We are working to resolve some issues with them that were raised,'' Marilee Hawkins, director of environmental services for Portsmouth, said. ``In order for them to get funds through this program there has to be a contract. We may contract with them later.''
There are still concerns about the organization's compliance with federal regulations regarding the management of bid contracts, officials working on the contract said, declining to get into specifics.
Meanwhile, the development group is strapped for money without the federal funding and has resorted to payment plans with contractors to correct problems in homes - relying on cash obtained through loan closings to pay for the work.
And while PCDG officials struggle to regain the federal funds, dozens of homeowners, like Brooks, sit in limbo, wondering if their problems will be corrected.
Brooks and his family purchased the two-story home, in the Prentis Park neighborhood, from PCDG in January. He said the home's heating unit, in the attic, heats only the second floor. And although the contractor that built the home returned to install air ducts for the first floor, Brooks said the heating unit is not powerful enough to warm both floors.
Created five years ago by Maury Cooke, a prominent Portsmouth native and businessman, PCDG has built or refurbished about 30 homes in the city.
It has also sponsored events for underprivileged children such as biking trips along the East Coast.
But for all of PCDG's efforts to provide affordable housing, the organization has been beset by complaints of shoddy work nearly since its founding.
The organization has said the faulty work was the result of efforts to give business to fledgling minority contracting companies, many of which lacked expertise.
But Cooke said PCDG has become better-managed in the past year. He said that the organization no longer deals with inexperienced contractors and that recent homebuyers are satisfied.
City officials acknowledge that the number of PCDG's homes with unresolved problems has diminished in recent months.
The organization needs to regain its federal funding to fix the remaining problem houses and become a private organization that relies on money from banks to operate, Cooke said.
``It's an absolute strain trying to make ends meet,'' he said. ``The funds you were counting on to do things have been frozen. It is frustrating.''
Although the PCDG gets funds from the Department of Housing and Urban Development, Portsmouth must decide which organizations are eligible to receive them, said Leroy Brown, a rehabilitation specialist for HUD's regional office in Richmond.
The department monitors the cities that receive funds, and if they are improperly managed, the city may be required to return the funds to HUD, Brown said.
Brown said the freezing of PCDG's funds is unusual, but he described it as a protective measure for Portsmouth.
``The city is the grantee. If we get down to asking for repayment, we hold the city responsible. The city is protecting itself.'' ILLUSTRATION: THE PORTSMOUTH COMMUNITY DEVLOPMENT GROUP
THE GROUP REFURBISHES OLD HOMES AND BUILDS NEW ONES IN SOME OF
PORTSMOUTH'S BLIGHTED NEIGHBORHOODS.
ACTIONS THE CITY HAS TAKEN AGAINST THE GROUP
THE CITY IS WITHHOLDING TAX DOLLARS UNTIL THE GROUP ADDRESSES ISSUES
OF FINANCES AND BUILDING CONTRACTS.
SOME COMPLAINTS AGAINST THE GROUP
AUDITS REVEALED NO WRONGDOING, BUT DID RAISE CAONCERNS ABOUT SHODDY
WORK AND IMPROPER DOCUMENTATION. by CNB