The new head of Hoboken’s federally subsidized low income housing projects said two weeks ago that the federal government recently sent representatives to help investigate the agency’s past spending practices.
Hoboken Housing Authority Interim Executive Director Robert DiVincent confirmed that the HUD Office of the Inspector General was conducting an investigation of the HHA’s procurement practices and had sent representatives to collect data from the agency’s offices.
DiVincent said the investigation was related to a review of the HHA’s procurement practices conducted by HUD’s Newark office on the week of July 28. The review, which was released to the public by HHA oversight board chair Dana Wefer in August, strongly criticized the housing agency for engaging in over $3 million of “unjustified non-competitive procurement.”
In particular, the review highlighted emergency contracts awarded after Superstorm Sandy. “Even after 18 months later,” it stated, “HHA have been using these same contractors on an as needed bases [sic] by way of purchase orders. It appears that by issuing these purchase orders, HHA has circumvented the bidding process.”
“Last year’s budget…wasn’t a pretty picture.”—Robert DiVincent
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After taking over as HHA board chair in May, Wefer heavily scrutinized the financial practices of former Executive Director Carmelo Garcia. She alleged that Garcia had granted $3.5 million in no-bid contracts since 2010, some of which went to companies that later made contributions to Garcia’s state Assembly campaign fund.
Garcia has defended himself in the past against the allegations of Wefer and HUD, stating that emergency situations continued to arise long after Sandy flooding had subsided, as saltwater-corroded wires and electrical equipment gradually broke down. He argued that purchase orders were a legitimate contractual way to address these issues. Garcia also claimed that the HHA board had gone out to bid for electrical contractors and received no offers besides the company it was already using.
Garcia had been at odds for some time with allies of Mayor Dawn Zimmer on the HHA Board, including Wefer.
An OIG representative stated in November that her office “does not confirm nor deny the existence of, or comment on, investigative issues.”
In light of HUD’s “complete procurement review,” DiVincent presented a resolution at the HHA meeting on Nov. 13 to cancel the HHA’s own search for a special counsel to conduct an internal investigation of its procurement practices. Especially in light of the HHA’s current budget struggles, DiVincent said the investigation felt “a little bit redundant.” The resolution was approved unanimously with Commissioner David Mello (who is also a city councilman) absent.
The investigative special counsel contract was another fertile facet of the quarrel between Wefer and Garcia this past summer. The HHA Board selected Joseph Manfredi as the special counsel in May over the strong objections of Garcia, who insisted that he was the housing agency’s sole appointing authority. After a separate HUD procurement review criticized the board’s action as “not justified” because it had not sought competitive bids, Wefer rescinded the contract but reopened the search for a new attorney.
Back in the saddle
Interestingly, at the same November meeting, the HHA Board awarded Manfredi a new contract as the special counsel for the Authority’s ongoing negotiations with its employee union. The board had to rescind its prior rejection of all bids for the contract in order to do so.
DiVincent said the board’s previous contract with Manfredi for investigation of procurements was a “totally different situation.” He added that he had worked with Manfredi before in Jersey City and had no objection to his appointment.
Commissioners Jean Rodriguez and Rob Davis voted against Manfredi’s contract in November, just as they had voted against his contract in May.
Manfredi is no stranger to Hudson County housing board controversies. He was hired as a second lawyer by the Guttenberg Housing Authority following allegations that the GHA’s Executive Director had purchased a Jersey Shore home with two employees who may have been living illegally in public housing. According to a November 2010 story in The North Bergen Reporter, HUD looked into Manfredi’s contract.
Budget cuts
Under DiVincent, the Hoboken Housing Authority has made an emphasis on tackling its budget deficit, one of its most serious and persistent issues. At its regular meeting in October, the board passed a balanced budget for the 2014-2015 fiscal year.
At the Nov. 13 meeting, HHA Chief Financial Officer Emil Kotherithara said that the Authority had spent roughly $2.25 million more than it had been accounted for in last year’s budget.
The 2013-14 budget “wasn’t a pretty picture,” said DiVincent. “There were many expenses that needed to be looked at.”
At the October HHA Board meeting, DiVincent said he achieved the balanced budget by taking in as much slack as possible, including trimming hours for part-time workers, cutting $40,000 from the special counsel budget, and laying off the maintenance manager and a secretary. Even with all of these cuts, DiVincent said the Authority had limited capital funds and no room for unforeseen expenses, which are unfortunately common in Hoboken’s run down, ‘60s-era public housing projects.
“We’re in survival mode,” said DiVincent.
The HHA is not alone among public housing agencies in its budgetary woes. The New York Times reported in August that the New York City Housing Authority, the largest housing agency in the country, is facing a $77 million budget deficit and $18 million in unfunded capital.
Carlo Davis may be reached at cdavis@hudsonreporter.com.