Felechia Wise spent hundreds of dollars on architectural planning to secure a grant funded loan from the city to repair her Front Street home. She contacted the city inquiring about delays in the award of a $15,000 loan, but was told the city council was holding up the program.
Wise took the matter to the council. She shared her predicament in a January meeting which pushed the council to approve funding for the program on Tuesday night. Council members awarded a $439,413 contract to Sustainable Communities LLC to run the Paterson Homeowner Rehabilitation Program in its entirety.
Wise on Monday morning said she was happy to learn the council approved funding for the program. She is among two dozen homeowners whose applications have been approved. In all, the program has received 144 applications of which 18 have been approved, according to city records.
7 homes have been successfully repaired through the program which is funded through the United States Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) money.
“Why’s the number so low?” asked Alex Mendez, councilman at-large.
“Not to have too many applicants approved is concerning,” added Michael Jackson, 1st Ward councilman.
Community Development Department director Barbara McLennon said it takes two months to handle all the paperwork and inspection of a given home.
Mayor Jose “Joey” Torres told the council the contractor has reviewed the 144 applications. He said now that the program is up and running the numbers are likely to increase.
The low number of approved applicants resulted in council president William McKoy questioning the amount paid to the contractor in the previous year. The city paid the contractor $50,000 last year to manage the program.
McKoy asked whether the firm is paid per application. Al Estino, owner of Sustainable Communities LLC, said the firm is paid $50-$80 per hour depending on the title of the individual working on the program.
“There’s a natural incentive for me to rack up my hours,” said McKoy.
“There’s no racking up of hours,” replied Estino. He said his firm is a professional company. The contractor does not bill the city for travel, he noted.
This year the firm’s contract is being renewed for another $50,000. The contractor is paid from grant money.
Kenneth Morris, councilman at-large, pointed out there’s only a certain percentage the city can incur in administrative cost for the federal grant dollars. McLennon said for this program the administrative cost is 20-percent of the program.
The program had a similar budget last year. It did not spend the entire budget. $268,408 remained unexpended. This means the rehab program has $707,821 to spend. City officials noted that’s not enough money to provide loans to all the applicants.
The program offers $15,000 loan per unit (up to $45,000 for three-family homes). A home has to be owner-occupied and the owner must be income eligible to qualify for loan, said officials.
The loans are forgiven after a five-year period, said the director.
Some council members questioned why the city was not handling the program in-house. Jackson asked why the Community Development Department was not running the program.
“We don’t have the staff to do it in-house,” said McLennon. She noted the city was “ineffective” in running this program’s predecessor the Paterson Pride Program. The city was cited by the federal government for “mismanagement,” she said.
Torres said it’s cost effective to contract it out. He said hiring a single full-time employee could cost the city $60,000. He told Jackson the program is creating economic activity in the city; he said local home improvement contractors will benefit.