Controversy has swirled around Bayonne’s Department of Community Development and its handling of U.S. Department of Housing and Urban Development (HUD) funding for the last several years, culminating with three high-profile announcements within the last 15 months.
A former accountant admitted to taking $65,000 in bribes early last year, a couple was charged in January this year with allegedly obtaining a fraudulent loan, and a contractor admitted in March to colluding with other contractors to secure projects.
These cases were investigated between 2010 and 2013, and because of scandals surrounding Community Development, a new administrator was brought in late in 2012 to stem the tide and put new safeguards in place.
Entering an ailing department in November 2012, Samantha Howard took over the helm of Community Development and management of the federal Community Development Block Grant (CDBG) grant money earmarked for lower- and middle-income residents and nonprofit organizations.
Howard immediately devoted her energies to analyzing what was wrong with the department and how she could fix it. Stepping in just two weeks after Hurricane Sandy didn’t make her job any easier.
Many of the problems emanated from the department’s dispensation of the CDBG funding provided to the city by HUD.
Through CDBG, the city can provide a zero-interest loan to homeowners who have code and health-related repair needs. Homeowners can get up to $20,000 from the city through the federal program.
The only stipulations for the loan are that the homeowner have a low or moderate income and occupy a one- or two-family home eligible for repair.
HUD’s position on CDBG money is that it gives the city funding and does not tell it what to do with it. However, Community Development had to come up with guidelines and then stick to them. The department’s policy had be fair to all.
“When I first got there, the guidelines were lacking in the program,” Howard said. “There was really nothing written down. There were no real checks and balances in that process.”
One of the first things Howard did was work with HUD’s Newark office and the Bayonne City Council to fix the scope of the policies.
“Believe it or not, it was like building an airplane while in flight,” she said.
The program also offers money for nonprofit groups’ repairs, and it was that part of the program Howard attended to quickly.
“With that, immediately I began to demand that the nonprofits get three bids, and pick the lowest qualified bid,” she said. The lowest qualified bid means a contractor must meet all the criteria for the project, and then offer the lowest price for the work.
Howard also implemented a sealed-bid process for projects.
Now, with all the criteria in place, she had to make sure there was strict adherence to the guidelines by all parties involved.
Howard received a lot of help from subcode official Joe Benkert in determining the repairs necessary for each project and then making sure work proceeded accordingly.
“Joe would go and identify the scope of work,” Howard said. “If it was approved for reconstructive funding, then he would go out with a representative of the nonprofit to go through the building to identify code-related repairs to be made, from worst to least pressing.”
Bids would be calculated only on repairs needed to be made on things that had been observed, with no deviation. The same criteria apply to the residential, or homeowner, portion of the program as to the nonprofit.
“Believe it or not, it was like building an airplane while in flight.” – Samantha Howard
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“Previously, there didn’t appear to be any rules in place as to how a contractor would get this work. If homeowners or representatives of nonprofits didn’t know of any contractors to do the work, one would be appointed. There was no consistency,” Howard said. “It seemed like it might have been run in good faith, but that actually was not a good way of handling the program.”
Not only is there now a three-bid, sealed-bid system in place, the bids are opened all at once and in the presence of the code official, homeowner or nonprofit representative, and Howard.
Extra guidelines and other safeguards have also been added to the program. One of them is having parties sign an affidavit attesting that there has been no collusion between prospective contractors on a project.
Howard believes that her due diligence has greatly reduced the chances of fraud or other ethical violations.
“I think the percentage has gone down greatly from where it was,” she said. “The chances of something going awry or amiss with the program has decreased tremendously based on the checks and balances put into place.”
In the meantime, Howard continues to review all projects and figures involved. Training continues for her, those in her department, and others involved with the HUD money dispensation.
City attorneys work to assure that all work is ordinance- and code-compliant. And each non-profit has to go before the City Council to lay out the plans for its contract.
“Nothing is 100-percent foolproof, but checks and balances are going on during the process and sometimes even after the project,” Howard said.
Full confidence
“Mayor Davis has been very supportive,” Howard said. “He knew coming in the sensitive nature of the program. And he spent a lot of time talking to me and learning the guidelines put into place.”
“She came in and was instrumental in running a very difficult program under a microscope,” Davis said.
Davis should know. A former Bayonne Police captain, his special investigations unit worked with the FBI in looking into alleged improprieties at Community Development prior to Howard’s arrival, he said.
The mayor is 100 percent behind the work Howard has done – and is doing – in Community Development, pledging strong support for her.
“I have absolute confidence she’s well qualified to handle the program,” Davis said.
Howard was recently named Bayonne Economic Opportunity Foundation executive director; no replacement has been named for her in Community Development yet.
Happy ‘customer’
Though not everyone gets approved because of very specific guidelines, there are many success stories. One of them is Bob West, a retiree and homeowner on East 39th Street.
Unable to fund the restoration of a front porch falling apart due to years of heavy use, weather, and other factors, West considered whether the city program could benefit him.
He applied late last year and was eligible for the loan. A few months later, West is the proud owner of a new front porch, much safer and nicer looking than the previous one.
Top quality materials were used, including heavy-grade aluminum rails.
“The end result is so pleasing. I’m very satisfied,” he said. “It makes the whole house look beautiful. I sit here, even in the lousy weather, and enjoy it.”
Joseph Passantino may be reached at JoePass@hudsonreporter.com.To comment on this story online visit www.hudsonreporter.com.