Grant Revives Housing Agency in Santa Ana
A nonprofit housing agency, whose director was fired and its assets frozen in March when an audit disclosed misuse of federal funds, was back in business Tuesday after Santa Ana officials approved a $100,000 grant for housing rehabilitation in a central-city neighborhood.
Acting on the recommendation of City Manager Robert C. Bobb, the City Council also agreed not to require repayment of nearly $180,000 allegedly used for salaries and other administrative costs by the Santa Ana Neighborhood Housing Services Inc.
Bobb told the council Monday that the agency has been restructured and an aggressive, private fund-raising effort is under way.
The agency’s troubles began when it was discovered that $73,500 was borrowed to pay salaries and other administrative costs from a revolving fund that was supposed to have been used for low-interest loans to low-income residents. Former director Jose Rivera, who made the withdrawals, was fired by the program’s board of directors shortly after the discovery, all but one employee was laid off and several board members resigned.
Part-Time Director
Since then, new board members have joined the agency, and Glenn Hayes, who heads the other Neighborhood Housing Services program in Orange County, headquartered in La Habra, has taken over as part-time, interim director in Santa Ana. He said the fund-raising efforts, along with monthly financial reviews by the board, would ensure that the program will have sufficient funds to operate. The addition of two city staff members and several representatives of local banks and insurance companies to the board will also help ensure accountability, Hayes said.
“I think everybody is a little bit more cautious,” Hayes said.
Under the agreement approved Monday, the city will turn the $73,500 borrowed by Rivera into a grant, meaning the city will not require the agency to repay it. In addition, since the program cannot repay a $106,000 loan used to rehabilitate the program’s building at 1617 West 17th St., that will also be turned into a grant.
Bobb noted that the $106,000 could not be recouped by selling the facility. The building has become a gathering place for residents of the Artesia-Pilar neighborhood, which is bound by Washington Avenue, 1st, Townsend and Bristol streets. If it is sold, he said, “the city would take a monetary loss and at the same time lose the use of an active neighborhood facility.”
The alternative, said Bobb, would have been to shut down the program. That would be a mistake, he said, because “they’ve done a lot of good work in the past.”
One-Time Action
The bail-outs are a one-time action, Bobb said, and are designed to get the program back on its feet. In a report to the City Council, he stated the action would allow the agency to “begin again with a stable and, therefore, effective program for change within the neighborhood that would require little city involvement or support thereafter.”
Hayes said about $45,000 has already been raised--most of it from the California Neighborhood Housing Services Foundation and contributions from area insurance companies. He said Santa Ana’s actions are justified because city officials have “never really supported the program administratively although they have done so with other, similar programs.”
The city distributes federal funds to various social agencies, and the $100,000 for Santa Ana Neighborhood Housing Services Inc. will be deposited at Mercury Savings, where withdrawals will only be permitted with a board-approved loan document.
