By Carol Benham/Contributing Writer, LompocRecord.com -
Lompoc staff members’ advice to reject recent Grand Jury recommendations regarding the collapse of the Lompoc Housing and Community Development Corporation was soundly rejected Tuesday night by the City Council.
Council members criticized the tone as well as the substance of staff’s rejection of the four recommendations by the Santa Barbara County Civil County Grand Jury to improve regulations for financial audits and oversight of compliance with city contracts.
“I’m a little disappointed. The responses are ‘The recommendations will not be implemented because,’” Councilman Bob Lingl said, announcing his opposition to the response. “I would have liked to have had this report say ‘This is what would be reasonable and this is what we can do.’ Maybe some people can deny there was a lack of oversight, but in my opinion, there was a lack of oversight. None of us want to see anything even close to LHCDC happen again.”
The Grand Jury’s report, “A Failure of Oversight,” documented years of notifications by the county and the city, primarily through its Redevelopment Agency, that LHCDC was not complying with financial audits or affordability standards for its many low-income housing properties.
Grand jurors recommended that the city conduct a financial audit of all organizations that receive more than $50,000 and that funding be withheld to agencies that fail to meet requirements of city contracts, including the submission of financial audits.
The council discussion, lasting almost two hours, displayed members’ frustration with the staff’s
failure to acknowledge that oversight needed to be improved. The prepared staff response did not report that a policy on contract compliance had been requested by the council several months ago and has yet to be developed by staff.
“We’re missing the boat here,” said Councilwoman Cecilia Martner, who requested the new contract compliance policy last October. “The grand jury did provide information that there was a lack of oversight. The city’s answer is ‘Well, not really.’
“I really don’t want to see us respond that way. I really want to see us say that we’re going to take the following steps to make sure that lack of oversight doesn’t repeat itself,” Martner said
Martner and Lingl, both elected in November 2008, served on the previous council that voted in 2010 to deny extensions to LHCDC on delinquent loans and to foreclose on a delinquent $375,000 loan for a vacant lot LHCDC had failed to develop for several years. At the time, LHCDC had failed to file financial audits for more than three years.
Martner also commented on the Grand Jury’s finding that the county, as the lead agency in a consortium to administer federal affordable-housing funds, failed to enforce compliance with LHCDC’s low-income properties, including property standards and maintenance.
“These properties are in Lompoc. They are blighted in our city. They are our residents,” Martner said. “I am done being nice with the county. … We don’t have ownership and we’re relying on the county to maintain and make sure that these properties are being maintained properly. But experience shows the county has not done their job, and our city has not been very forceful with the county asking them to do their job.”
Mayor John Linn attempted repeatedly to steer the discussion away from LHCDC’s noncompliance by questioning staff about differences in regulations established by state and federal funding sources, suggesting it wasn’t clear what requirements LHCDC needed to follow.
However, city attorney Joe Pannone corrected Linn’s interpretation, noting that differing regulations are “irrelevant to the fact that the person that gets the loan is obligated to meet all of the conditions. All of the conditions that are set up may be different, but the one that is the most restrictive is obviously going to meet the other ones, so the most restrictive one is the one that has to be met.”
Council members directed staff to return with a revised response Sept. 4, two days before the statutory deadline for responding to the Grand Jury’s report. The council recommended that the city report to the Grand Jury that it will institute a policy to require agencies that receive more than $50,000 in city funds, or have an annual budget of more than $100,000, to submit an independent financial audit at their own expense.
Lompoc resident Pam Wall reminded the council that some tenants of LHCDC’s properties are being ignored by both city and county officials responsible for oversight. She said she visited tenants at two former LHCDC properties and documented the substandard living conditions of the blighted properties. Some tenants are being forced to move by foreclosures, she said, and can’t get their security deposits returned.
Wall cited documentation in the Grand Jury’s report that LHCDC was told repeatedly over a four-year period that all tenant rents at one property, Casa Con Tres on North L Street, were too high.
“The answer was to raise their rents, not once, but twice. I have canceled copies of their checks,” she said. “They’re entitled to a refund and right now. They’re still paying that same rent. I think it’s criminal that these people are left in a void like this. Does anybody care about the people, the faces behind this problem?” she asked. “Because I do, I care.”
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