Oversight may cost thousands

Published 5:25 am Sunday, November 14, 2010

Contributing Editor

Washington faces returning a little more than $114,000 to the N.C. Division of Community Assistance because of an “oversight” involving the Keys Landing subdivision project.
In an Oct. 19 letter from Gloria Nance-Sims, DCA director, to Mayor Archie Jennings, Nance-Sims wrote that the city’s failure to conduct a new environmental review of the Keys Landing project resulted in a violation of state regulations.
“Because this oversight has resulted in a violation of 24 CFR 58.22, DCA is required to disqualify the entire project. The $135,542.92 in remaining funds will be deobligated and the City is required to return the $114,457.08 already expended in the project. Funds should be returned to DCA no later than December 31, 2010, with the check payable to the Department of Commerce Division of Community Assistance,” the letter reads.
“Our review of the history of the grant showed that on May 23, 2007, the City asked for permission to change the proposed land parcel to a different one on the same road. In its proposal, the City stated that upon DCA’s initial approval, an amendment public hearing would be held and a revised Environmental Review and subdivision documents would be submitted for final approval. Based on this letter, DCA approved the change to the land parcel. However, the City never followed through with the new environmental review,” the letter reads.
During its history, the Keys Landing project has seen several revisions and delays.
The city was awarded a grant in 2005 to help develop the project. The original grant application proposed situating 15 lots on a piece of land on Keysville Road. The lots would be sold for construction of affordable housing.
“Due to difficulties in securing title from multiple heirs to the property the application was subsequently changed to include a different parcel of property in close proximity to the original location and the number of lots was reduced to 12,” wrote John Rodman, the city’s planning and development director, in a memorandum to the mayor and City Council.
Delays such as right-of-way acquisition, re-engineering the project and bid documentation caused DCA to review the grant, Rodman wrote.
“DCA’s chief concern is the project’s lack of a new Environmental Review. DCA feels this oversight is serious enough to impact the future of the project,” the memorandum reads. “The City is working in conjunction with Holland Consulting Planners and Metropolitan Housing to take the necessary steps to satisfy DCA’s concerns and bring the project into compliance.”
The city contends DCA did not raise the issue of environmental compliance until May 24 of this year. On June 2 of this year, grant funds were frozen by DCA, according to the city.
“DCA has provided no formal monitoring letter despite repeated effort by (Holland Consulting Planners) to obtain one since June 2010,” reads a city document.
The city contends DCA shares some of the burden for any lack of compliance oversight that may have occurred.
“The city is concerned about the manner in which this has been handled internally by the agency, particularly with reference to the tone and timing of the most recent correspondence received by the city,” reads the document.
Mayor Pro Tempore Bobby Roberson, a former planning and development director for the city, believes a change in project monitors is at the root of the problem.
“I think it goes back to the change in program monitors,” Roberson said Saturday. “We had a seasoned individual … who said don’t worry about the assessment after we changed the sites. Then, we had a new one come in … and say we hadn’t met the assessment requirement that was on a checklist.”
Roberson said DCA would not have funded the project unless it was certain all requirements had been satisfied. He believes the city and DCA can come to terms regarding the project, with the city providing the environmental review and DCA withdrawing its demand for payment.
“I would certainly hope not,” Roberson replied when asked if he believes DCA will force the city to repay the funds.