Regional agency absorbs troubled North Las Vegas housing authority

The public housing agency, infamous in recent years for its poor management and misuse of federal funds meant to help the city’s neediest residents, is officially no more. In December it folded into the much larger Southern Nevada Regional Housing Authority, a year later than officials originally hoped.

The sticking point, the agency’s $3.2 million in debt, was resolved when federal housing officials agreed to forgive $1.9 million the agency lost in a bad investment and allow it to use funds meant for public housing to pay down the rest of the debt.

It wasn’t the ideal solution, officials agreed, but in the end seemed the only practical one.

"The chance of recovering the money was so slim, we thought this was the best alternative," said Ken LoBene, director of the U.S. Department of Housing and Urban Development’s Las Vegas field office. "We’re very happy this is coming to an end."

Clark County Commissioner Chris Giunchigliani was more blunt.

"It’s upsetting that money that should have gone to housing senior citizens, homeless and young families now isn’t," she said. "It’s a lesson that you have to have better oversight, accounting and transparency so you don’t get that far into debt and end up penalizing those you are meant to serve."

Giunchigliani, a champion of regionalization efforts, fought for the merger of the valley’s three public housing agencies and co-wrote legislation that allowed it. Las Vegas Valley officials had for years talked about consolidating the agencies to save money and more efficiently help people put roofs over their heads.

The Clark County and Las Vegas housing authorities merged in 2009. The regional entity is now among the country’s largest public housing agencies.

But nobody wanted to saddle the new "superagency" with the North Las Vegas Housing Authority debt. And nobody, including the cash-strapped city of North Las Vegas, wanted to chip in to pay the debt.

"We didn’t want anybody to be burdened with the agency’s funding problems because they didn’t manage it right," Giunchigliani said, adding that local municipalities, suffering from decreased revenue in a down economy, couldn’t afford to help anyway.

It was agreed that the smaller agency would not join the regional authority until that debt was resolved.

"We worked on this over a year," LoBene said. "It’s in the best interest to resolve this so the three housing authorities can be combined into one."

Giunchigliani called the merger "a huge win-win."

"I see in the long run a quicker process, less duplication of efforts, better staff training and a more global opportunity to allow people to move in and out," she said.

The regional agency has an annual budget of $131 million, manages 24 public housing developments and administers 10,000 housing vouchers that can be used to rent housing.

John Hill, the agency’s new executive director, was thrilled to have the North Las Vegas Housing Authority officially on board.

"I know there were challenges," said Hill, who took the helm in late September. "But we came to the table and moved very quickly from mid-October to now. This fulfills the vision for the regional housing authority."

The North Las Vegas Housing Authority will be remembered for its trouble-plagued final years which included:

■ The failed Desert Mesa project. Originally envisioned as a residential development for low-income families, the project on Carey Avenue near Commerce Street was stymied by construction delays, soil problems and lawsuits from contractors.

Construction was halted in 2004 and the property has been sold.

HUD officials recently forgave the $1.9 million in debt stemming from the project.

The North Las Vegas agency "acted in good faith in trying to develop those lots," said Michelle Bailey-Hedgepeth, assistant to the city manager. "It just failed."

■ A 2007 HUD audit. Auditors found the housing authority had failed to use $4.4 million in public money that was supposed to be spent to house needy people.

The money was earmarked for the agency’s housing voucher program, and not using it meant that many of those eligible for vouchers didn’t receive them as quickly as they should have.

■ Unsafe living conditions at Casa Rosa. A city building inspector’s 2008 report detailed long-standing substandard conditions at the public housing complex for poor families, including failing stairways, mold, sewage leaks, wiring problems and broken smoke detectors. The move led to the relocation of 76 families.

The housing authority’s longtime CEO resigned amid the controversy, and North Las Vegas’ city manager was named the authority’s agent in his stead.

The Las Vegas Housing Authority took over management of North Las Vegas’ public housing units after HUD said they were being incompetently managed.

■ A 2009 HUD audit. Auditors found the housing authority had misspent $937,691 from the agency’s housing voucher program on administrative costs and loans to other agency programs.

The audit also found the agency had used $400,372 meant for the development of affordable housing to cover expenses in other programs. That $1.3 million, together with the $1.9 million lost on Desert Mesa, comprised the agency’s $3.2 million in debt.

■ Criticism for the makeup of the board that oversaw the agency. The board long consisted of most of the members of the North Las Vegas City Council, which many said was a conflict of interest.

■ Landing on a list of the nation’s most troubled public housing agencies. The Associated Press, which reviewed inspection and audit records of 146 troubled housing agencies nationwide late last year, wrote that the documents showed a system in which agencies must become nearly insolvent before the federal government steps in.

When that does happen, the mis­management can continue for years while the government continues subsidizing the agency.

Critics say those problems are especially prevalent at smaller agencies, which is why HUD has been lobbying for the regionalization of such entities.

Federal and local officials long worked to ensure public housing residents would not be harmed by the North Las Vegas agency’s programs.

They shifted management of most of its programs to the Las Vegas Housing Authority, which later became part of the regional housing authority.

North Las Vegas City Councilman William Robinson, the last chairman of the smaller agency’s board, long characterized his housing authority experience as a "nightmare."

"It has been a long, arduous ordeal," Robinson, who served on the board since the mid-1980s, said.

Others hadn’t been willing to shoulder so challenging a burden with so little reward, he said.

"I was stuck with it."

Contact reporter Lynnette Curtis at lcurtis@reviewjournal.com or 702-383-0285.