Katrina housing grants questioned

Published 12:00 am Wednesday, November 18, 2009

NEW ORLEANS (AP) — A federal review has found the city of New Orleans and its main redevelopment agency could not prove $11.6 million was properly spent on property and other work over the past five years, and it considers another $38 million for post-Hurricane Katrina work at risk.

The U.S. Department of Housing and Urban Development review raises questions about whether the New Orleans Redevelopment Authority, or NORA, can carry out its work in a city where cleaning up derelict properties is key to revitalizing neighborhoods, retaining and attracting residents and improving quality of life.

NORA officials disputed the findings on Tuesday, saying just $600,000 of the $11.6 million in question fell under NORA’s purview and that they believe the agency complied with HUD rules.

Email newsletter signup

Acting NORA director Richard Monteilh also dismissed what the HUD report called ‘‘serious concerns’’ about NORA’s capacity to properly administer $38 million in disaster-related spending, saying his agency ‘‘went out of its way’’ after Katrina to ensure it would satisfy federal regulations.

The report, based on an August review of certain traditional HUD dollars and dated last month, found poor record-keeping and non-compliance with HUD policies. It also indicated HUD would seek repayment of unauthorized spending, though spokeswoman Patricia Campbell said the goal is to work with the city to correct problems. While HUD money flowed through the city to NORA, the city is ultimately responsible for those funds being properly administered, she said.

‘‘We do want to give them every opportunity to provide the documentation to prove the expenses,’’ she said.

Montiehl said the agency provided all the information the city requested for HUD requirements, and it was unaware that HUD had problems getting information from the city.

Mayor Ray Nagin, in a letter to Montiehl dated Nov. 3 and released by Nagin’s office Tuesday, asked NORA to provide the city with proper documentation to address concerns raised by HUD. It also asks for NORA’s plans related to acquisition and valuation of property that it purchases.

Nagin also said the city would commission an audit of NORA’s work involving city-funded projects.

Before Katrina, NORA was a little-known agency, with limited staff and resources to make a dent in the blight that even then threatened some neighborhoods. Since the 2005 storm, its profile and significance have risen substantially, with the agency adding staff and taking on new responsibilites, for such things as moving thousands of hurricane-damaged properties back onto the market.

It’s had an at-times prickly relationship with the Nagin administration. The agency has relied heavily on the city for operating funds, and early in the recovery, board members complained about a lack of direction from City Hall on what NORA’s post-Katrina role should be. They also complained about having too little money to make meaningful progress.

The two sides seemed to make gradual headway, particularly over the last 1 1/2 years, with the signing of a major agreement for NORA to do recovery-related work and the agency adding staff, filing more lawsuits to expropriate, or seize, blighted properties and pushing its own efforts to revitalize neighhorhoods.