Santa Ana’s Housing Aide Fired; Fund Misuse Cited

The board of directors of a nonprofit Santa Ana housing agency on Friday fired its administrative chief amid allegations of misuse of federal block grant funds and unauthorized investments made in a subsidiary construction firm.

Also among the allegations city officials made against Jose E. Rivera, executive director of the Santa Ana Neighborhood Housing Services Inc., was that he failed to take proper action following the theft of $800 from the agency’s safe last year, his attorney, Rudolfo Ginez Jr., said Friday.

Rivera, 40, is accused of borrowing $73,500 from a revolving loan fund specifically set up for housing rehabilitation and using the money to pay operational expenses accumulated by the agency.

Violated Contract

Although that action had originally been authorized by a city employee on the housing agency board, it violated the contract between agency and the city, Santa Ana City Manager Robert C. Bobb said.

The city makes federal funds available to the agency, which uses them for low-cost home improvement loans to residents.

Reached at his Northern California home Friday, Rivera said of his termination, “I guess the (directors) are really trying to paint me up as a real character, (but) I didn’t do anything wrong, and that will all come out.”

Rivera and his attorney both said Rivera will sue the agency directors for the harm they have done to his reputation.

“We’ve got to take some action against these people,” Rivera said. “I’ve never been fired before, and my family’s going through a real bad trip over it.”

In a memorandum to the mayor and City Council earlier this week, Bobb said that although the board voted in June, 1984, to curtail borrowing of revolving loan fund money for operations, Rivera continued to borrow from the revolving fund through December, 1984, on a “borrow and repay basis.” City and board officials said Rivera knew money from the fund was not supposed to be used for operational expenses.

To repay a portion of the borrowed funds, Rivera sold some outstanding loans to the National Neighborhood Reinvestment Corp. for $50,426.58, again without the board’s knowledge, according to Lawrence Shaffer, the city’s finance director.

Rivera deposited the money from the sale into the housing agency’s operating fund, Shaffer said. Two $15,000 payments were then made to the revolving loan fund in an attempt to repay part of the $73,511.70 that had been borrowed, the finance director added.

Internal Audit Conducted

An internal audit of the agency conducted by city employee Larry Schubert and dated Feb. 26 also noted two $5,000 investments in the Sandev Corp., a state-licensed construction company and subsidiary of the housing agency, were made without the board’s knowledge or approval.

The unauthorized investments were made on Aug. 31 and Dec. 5, 1984, according to the audit.

In a statement to reporters, board president Mary Silva said, “The board is gratified that the city audit of the (Santa Ana) NHS revolving loan fund use has confirmed that all (federal grant) funds are traceable to either the (Santa Ana) NHS operation account or to the revolving loan fund account, and that no (federal) funds are unaccounted for. The board also has received the promise of full cooperation and support with regard to restructuring (of the organization) from City Manager Robert Bobb.”

Refused Comment

Except for calling them “confidential personnel matters,” Silva refused to comment on any of the allegations against Rivera besides the transfer of the housing rehabilitation funds into the operations account.

In Friday’s telephone interview, Rivera said the issue of the missing $800 after a fund-raising event last year is “just a smoke screen,” but declined further comment on details of the allegations.

Ginez said Rivera had placed the money into the agency safe and instructed an employee to deposit it in the bank immediately.

“He told (the employee) several times to do that. She had the responsibility to make deposits, but, a week or two later, the safe was not locked and the money was gone. Mr. Rivera did not know who took it,” Ginez said.

Employee Reprimanded

Rivera then questioned several employees and ultimately “reprimanded” the employee, Ginez said. “He thought he handled the matter the way it should have been handled,” Ginez said. Lt. Greg Cooper of the Santa Ana Police Department said no theft report was filed by the agency regarding the missing money.

A Jan. 22, 1985, evaluation of Rivera’s performance as executive director, signed by then-board President Ruby Gonzales and Alice McCullough, personnel committee chairman, praised him for “doing a good job of managing the office and training staff.”

Although the evaluation also pointed to areas where improvement was warranted, each of the seven categories was positive. The report ends: “It is recommended that Jose be retained as the NHS Executive Director.”

Submitted Resignation

Ginez also said Rivera--who served as executive director for about 14 months at an annual salary of $26,400--was frustrated in his attempts to manage the financially strapped agency. He submitted a letter of resignation that would have been effective last month, Ginez said, but “the board would not accept his resignation and pleaded with him to stay.”

City Manager Bobb said he will be meeting with the agency board “in the very near future” to discuss restructuring the agency. “Obviously, the service provided to the community has been successful, and we want to reestablish it as an effective community-based service agency,” he said.

Because of its large low-income population, Santa Ana receives Orange County’s largest share of federal block grants, which are designed specifically to benefit low- and moderate-income residents.

March 18 Decision

For the coming budget year, the city will receive more than $4.5 million to reallocate to various agencies. Thus far, requests for almost $10 million have been received at City Hall.

The City Council is considering the allocations and is expected to make a final decision at its March 18 meeting.

Since its incorporation almost six years ago, the agency has received $557,000 in federal block grant funds from Santa Ana. The agency has requested another $264,000 for the coming fiscal year which begins July 1, but the city’s administrative staff recommended that nothing be given to the agency.

Faced with that recommendation, Silva has asked the California NHS Foundation, the agency’s agency’s second largest source of funding after federal block grants, for special consideration.

NHS Foundation president Warren Widener said he will meet Monday with other officials to discuss the request.

“We’re handling their 1985 grant outside of the normal program. We do this when a program runs into problems,” Widener said.