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Santa Maria Sun / News

The following article was posted on November 29th, 2012, in the Santa Maria Sun - Volume 13, Issue 38 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [santamariasun.com] - Volume 13, Issue 38

Lompoc City Council digs into LHCDC's finances

BY AMY ASMAN

Nearly one year after the request for a report was first made, the Lompoc City Council received an analysis of the defunct Lompoc Housing and Community Development Corporation’s (LHCDC) finances.

The draft report, which was compiled by Orange County-based Urban Futures Incorporated and presented on Nov. 20, included information on finances and low-income housing covenant compliance for 18 of the Lompoc-area properties formerly owned by the corporation.

Since LHCDC went bankrupt, some members of the public have called for the city to conduct a forensic audit of projects paid for with taxpayer money. However, during the Nov. 20 meeting, Urban Futures managing principal Steven Dukett said the report isn’t a forensic audit investigating criminal activity, but rather a compilation of data provided by the city.

“[At] Urban Futures, we are not detectives,” Dukett said. “That was not the scope of this report.”

The city contracted with Urban Futures for $15,000 in March to review 16 of LHCDC’s former properties. The firm later asked for an additional $5,150 to review two more properties and to cover travel costs for Dukett and housing compliance manager Raette Frazeur. The council authorized that payment on Nov. 20.

According to the report, LHCDC “financed the acquisition, rehabilitation, and/or development of the 18 sites” with approximately $29.4 million from a multitude of private and public sources. Some of the loans date from as far back as the mid 1990s.

The city of Lompoc footed about $4.86 million of the bill. Roughly two-thirds of that money has been repaid by LHCDC, converted to real estate owned through foreclosure, or “extinguished” because the city isn’t the primary lender.

Dukett told council members the city must repay $140,000 to the U.S. Treasury Department for a Community Development Block Grant loan for a development on North T Street. The lot is currently vacant. Dukett said the city could also be on the hook to repay $75,000 worth of Home Investment Partnerships program (HOME) funds for two properties on North E Street. There are some questions about whether the property was in compliance with the low-income covenant for a long enough period. According to city staff, Medio Investments LLC bought the property in May.

In the report, Urban Futures staffers said “consistent monitoring efforts were made by the LRDA [Lompoc Redevelopment Agency] to gather documentation” to confirm low-income housing compliance. However, the report said, “there was little to no documentation” of the Lompoc Community Development Division’s monitoring efforts of projects not included under the Santa Barbara County HOME Consortium.

“There appears to be many attempts throughout the years by both the LRDA and County to work with LHCDC through the monitoring process; however, their efforts were not always successful,” the report said. “Although there were periods where the properties were in compliance, the majority of the periods were non-compliant or there was no response from LHCDC … .”

Urban Futures recommended the city develop a “monitoring matrix” to identify the funding requirements for each property, as well as an electronic filing system. Staffers also recommended the city contract with an outside party to monitor low-income housing covenant compliance.

The council is still in the process of deciding what to do with the Lompoc Theatre. The oversight board for the former Lompoc Redevelopment Agency in August denied a proposal to foreclose on the property.

Mayor John Linn said the council will discuss the theater as soon as it receives information about property liquidation from the state.