(Stanislaus Co) Grand jury advice taken on housing program, Modesto council says

By Ken Carlson, Modesto Bee -

City Council members unanimously approved a response to the grand jury's report on a $33 million housing program funded by the federal government.

The response says the city has implemented most of the grand jury's advice for improving oversight of the program and on how more than $10 million in remaining funds is spent.

"A lot of changes have occurred to tighten down the process," City Manager Greg Nyhoff said. Council members OK'd the six-page response without comment.

Modesto officials asked the civil grand jury to investigate the Neighborhood Stabilization Program last year, after Bee stories exposed numerous problems with the program, including how the nonprofit Stanislaus Community Assistance Project spent more than $8 million in funds.

In its report in June, the grand jury criticized the city's program oversight and said it should have kept closer tabs on the housing units developed by SCAP.

A foreclosed home remodeled with stylish improvements was occupied by the parents of SCAP's former executive director, and seven homes were rented to SCAP employees or family members, despite a contract with the city to provide housing for special-needs tenants.

The grand jury found that SCAP showed egregious favoritism in handling tenant eligibility, but the June report also criticized the councilman who blew the whistle about SCAP. It said Dave Lopez should have taken his concerns to Modesto's former mayor and council members before talking with The Bee.

The response to the grand jury says the city understands the jury's position. Lopez didn't take issue with that part of the response. "My job is to protect the interests of the citizens of Modesto and sometimes that means you take one on the chin," he said after Tuesday's meeting.

A few speakers hectored Councilman Joe Muratore about potential conflicts of interest. Last year, the city required Muratore and a business partner to return a $62,500 real estate commission on the sale of an apartment complex funded by an NSP loan.

Modesto resident Emerson Drake noted that Muratore voted with a council decision last month to have a consultant study the fiscal impact of Modesto possibly annexing Salida. A commercial real estate firm co-owned by Muratore is listing a property for sale near Salida.

City Attorney Susana Alcala Wood said she had advised the councilman he could vote because of the general scope of the study. Muratore, who attended Tuesday's meeting through a remote feed, disclosed that he is listing property near Hammett Road and Highway 99. "I am sensitive to that and I will continue to be," he said.

In another action, the council authorized Nyhoff to enter into negotiations on the potential sale of the water system in Waterford to the city in eastern Stanislaus County. The council placed a $10,000 limit on the cost of appraising the value of the water system. Modesto will pay half of the appraisal cost if the system is sold.

Waterford officials recently approached their Modesto counterparts about buying the six wells and water lines. Modesto has owned and operated most of the water system in Waterford since buying Del Este Water Co. in 1995.