Redevelopment, Housing Agency Subject of Probe

Orange County’s housing and redevelopment agency is under investigation for alleged bidding irregularities, permitting problems and possible overpayments to contractors, officials confirmed Tuesday.

Sheriff’s Department fraud investigators last week launched the probe, which centers on the agency’s housing rehabilitation program, according to an internal county memo.

The investigation was prompted by an Anaheim woman who complained about the refurbishing work being done on her house, according to John Sibley, deputy director of the county’s Environmental Management Agency. Sibley’s department oversees the housing and redevelopment agency.

Sibley said a preliminary review of the woman’s claims revealed possible improprieties in the way the housing agency awards contracts, handles building permits and pays contractors. He declined to elaborate.

Investigators are not focusing on a particular contractor, he said, but rather on rehabilitation work performed on a number of projects. Authorities last week seized more than 100 project files from the housing and redevelopment agency, he said.

“If we have a problem, we want to know about it,” Sibley added. “At a minimum, it appears we need to look at some of our procedures.”

Orange County Sheriff’s Lt. Ron Wilkerson said that the probe is ongoing but that investigators have not yet found anything criminal. He said the investigation is expected to “be a lengthy one.” He declined to discuss any details.

As a result of the probe, two citizen oversight committees that monitor various functions of the housing and redevelopment agency have called special meetings to discuss the matter.

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The housing and redevelopment agency lends money at favorable terms to low-income property owners who are refurbishing single-family homes or apartments and community projects seeking to upgrade blighted areas. Funding comes from the U.S. Department of Housing and Urban Development and federal Community Development Block Grant programs.

Four years ago, a county audit found “significant weaknesses” in the management of a number of the agency’s housing programs. The audit cited several cases in which rehabilitation grants, housing loans and other assistance were apparently given to people whose assets or incomes exceeded the $75,000 cap for such benefits.

The report also raised questions about the qualifications of some contractors for low-income projects and possible conflicts of interest involving housing division personnel and relatives.

The current investigation also is turning up administrative and management problems, Sibley said.

Rick Efker, the county’s manager for housing and community development, said he doesn’t think that any changes are needed.

“If they order some changes, we will do it, but we have approved procedures that we follow,” Efker said. “I’m not so sure that there are things that need to be changed.”

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Efker said the woman who prompted the investigation was given a $25,000 loan to remodel her kitchen, paint the interior of her house and replace windows.

Work was halted when she had disputes with two separate contractors, one of whom she contends stole property from her residence and abused her dog, Efker said. Both contractors were selected from competitive bids, he said.

After the woman complained about the second contractor, officials from the housing agency recommended that she take her complaint to a private arbitrator to settle the matter, Efker said. She did not like the suggestion and continued to complain about her situation to other county officials and agencies, including the Sheriff’s Department. Ultimately, a third contractor was hired to finish the work on her home, Efker said.

He said that if there were problems with the building permits, it was the contractors’ fault.

“We require every contractor to get appropriate permits as part of their contract,” he said. “To the best of our ability, we enforce that.”

He said he was not aware of any alleged overpayment to contractors.