City's home-repair program in tatters

Authorities approved pay for work that never happened

An internal investigation has revealed the latest twist in the woes of the city's troubled home-repair program: The officials who oversaw the program authorized payments to contractors for work that was never performed on houses owned by disabled and elderly homeowners.

According to the investigation conducted by the city's legal department, officials who ran the home-rehabilitation program didn't follow the requirement of accepting the lowest bid from contractors. Some contractors were paid before they even received a building permit; others were paid in full even though the repairs were "often never completed."

Three city employees who oversaw the program have been placed on paid administrative leave and two others have retired.

Each year, the city receives approximately $1.5 million in federal funds to repair about 50 low-income elderly or disabled homeowners' houses that violate the housing code. According to federal guidelines, the city decides what repairs need to be made, accepts bids from contractors in a designated pool, then chooses the lowest bidder to perform the work. After the repairs are made, a city inspector approves the work and the contractor is paid.

But that's not how it's been done.

"The city selected specific contractors at an inflated cost," says Atlanta Legal Aid attorney Karen Miniex. "I think there's some kind of kickbacks. Why else would [contractors be paid] for work that doesn't get completed?"

Legal Aid filed a lawsuit against the city in April on behalf of six homeowners who alleged shoddy or incomplete work on their homes. As the internal investigation was wrapping up in July, the city reached a settlement with Legal Aid that paid the homeowners a total of $90,000.

According to the report, management problems stymied the program. Rehab officials routinely approved substandard work. In one case, a homeowner needed new tile in her bathroom because of a leak; the tile was replaced before the leak was repaired and had to be replaced a second time after a rain.

Similar mismanagement problems cropped up in the program in the late 1980s. It led to the dismissal of a city inspector after a contractor admitted to paying kickbacks to get away with performing shoddy work on the homes of the elderly.

In September 2005, the U.S. Department of Housing and Urban Development issued a scathing report to the city that found, among other things, "systemic deficiencies" with the rehab program that "did not conform to acceptable industry practices." The city responded two months later and promised to fix the program. But Linda Allen, a HUD spokeswoman, says that never happened. "Usually, we don't have a city like this," Allen says.

The city has forwarded its internal investigation to HUD, the agency that funds the rehab program. Allen says the agency hasn't decided what actions to pursue, which could include a criminal investigation. Allen would not comment when asked if the contractors will be required to pay back money they received for work that wasn't done.

The mayor's office has remained mum on the issue and deferred all questions to the Bureau of Housing. "Due to numerous concerns by both the city and HUD, the program is on hold to conduct internal reviews of the programmatic procedures and processes," says Keisha Davis, the department's public information manager.

The only substantial comment from the city came at an Aug. 17 press conference that announced the findings. "There is sufficient evidence to conclude that certain employees of the Bureau of Housing, both past and present, mismanaged the owner-occupied housing-rehabilitation program," said the city's chief operating officer Lynnette Young. "Either they knew the work had not been performed or they were grossly negligent." She also vowed that Atlanta would get the program back on track within the next 90 days. The program was halted in November because of the HUD findings.

City councilman C.T. Martin said he is still studying the city's report. "I'm very disturbed," Martin says. "So many seniors have roofing problems and gutter problems and want to stay in their homes."

Meanwhile, the real victims are the homeowners who qualify for the program and either have suffered from poor workmanship or need repairs and can't get them. "This is a valuable program that's helped a lot of people," says Legal Aid attorney Bill Brennan. "Shutting it down is not the answer."

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