FORT LAUDERDALE – Prosecutors are seeking to determine whether the city of Fort Lauderdale illegally used funds set aside for hurricane recovery to repair or replace properties that were not, in fact, damaged by a hurricane.
The preliminary inquiry will allow prosecutors an opportunity to determine if a formal, possibly criminal investigation is warranted, the South Florida Times has learned.
“No one has asked for an investigation,” Ron Ishoy, a spokesman for the Broward State Attorney’s Office, said in an email this week. “Tim [Donnelly, head of the agency’s Special Investigations Unit] says we’ll touch base with the state and the city, and see if they can provide us with their audits and findings to see if we should open up a formal investigation.’’
City Manager George Gretsas did not respond to phone calls or emails seeking comment.
Mayor Jim Naugle, however, did weigh in on the issue.
“I welcome the review, but I’m not in a position to comment,” Naugle said. “Previously I had raised the idea of why, in these tight budget times, should the city have two housing agencies. I think it could be another indication that consolidating them and contracting with the city’s Housing Authority to administer one program should be explored.’’
The prosecutors’ inquiry comes several weeks after a March 14 South Florida Times report revealed that $11,777.60 in state disaster recovery funds were improperly used to offset home replacement costs associated with the family of Henry and Andrea Bonner.
The Bonners are participants in the city’s Substantial Rehabilitation/Replacement Housing Program, which tore down the family’s dilapidated home with the intention of replacing it with a new house.
The city and the Bonners are working to hash out details of the house replacement after city commissioners last week approved the new home construction.
Ryan Orlando, a spokes-man for the Florida Housing Finance Corporation – a state agency that helps Floridians obtain safe, decent housing that might otherwise be unavailable to them – said the city improperly used hurricane funding by claiming the money was being used for hurricane damage. In fact, Orlando said, the city used the money to pay rent on the Bonners’ temporary home, as the family awaited the new home construction.
The state agency ordered the city to repay the fund, but the matter was not referred for any criminal review. The program now will also have to undergo further scrutiny, which may have an impact on other participants in the program.
The Bonners say – and city documents confirm – that the damage to their old house did not come from a hurricane.
“We did not, and still do not, know anything about any hurricane damage to our home,” Henry Bonner said. “The house was empty when the hurricane hit, and I know we never asked or applied for it and whoever did, just lied, because our home was not damaged by any storm.’’
At least some of the state funds that the city used in its improvement program for the Bonners were supposed to be used to repair and replace properties damaged by hurricanes Wilma and Katrina, which made landfall in Broward in 2005.
In its official invoices, requisitions and e-mails about the state disaster funding, the city stated that it obtained the funding by claiming it would be used to fix properties damaged by a hurricane.
Other internal city documents show the damage to the house was not created by any hurricanes at all, and that the money was actually being used to pay rent and storage fees for the family, unrelated to any natural disaster.
The money was used to pay the $1,400 a month rent to temporarily house the Bonner family elsewhere, and $333.90 each month to a warehouse facility that stores the family’s belongings, according to city records.
Still other documents show that the old home was declared unsafe and that the family had already relocated out of the home prior to the storms’ landfall.
The Bonners were accepted into the program in June 2005, after the program’s inspectors determined their home was structurally unsafe.
The family was relocated out of the house a short time later, several months before hurricanes Katrina and Wilma made landfall in the area, on Aug. 25 and Oct. 24, 2005, respectively.
In September 2005, the program completed approval for the family to receive relocation and storage assistance payments until their new home construction was completed. Initial payments came from the budget the city allocated to the program.
Some time later, records show, the city began drafting invoices for the program from disaster recovery funds provided by the state.
The funds in question were part of the monies made available by the state Legislature in July 2005 to help local governments and families subsidize recovery costs in the aftermath of hurricanes.
Former Gov. Jeb Bush issued an executive order for disaster relief assistance following the hurricanes. The order expired in February 2006.
The Florida Housing Finance Corporation (FHFC) administers the Housing Recovery Program through the State Housing Initiative Program.
There are guidelines on how the money can be obtained, and restrictions governing how it can be used.
The city’s housing rehabilitation and replacement program is intended to bring rundown properties up to current living standards. Zero-interest loans and mortgages are available for eligible families, with the money slated for repairs and demolition of homes that are beyond repair.
The demolition portion of the program is supposed to replace the dilapidated properties with new homes at the same locations.
City attorneys in August 2007, however, determined that the family – some 19 months after the city tore down the old, dilapidated two-bedroom, one-bath home, and after the city had paid nearly two years’ worth of rent and storage fees – did not meet the program’s eligibility requirements. The city then refused to build the new house for the couple and their four children.
Chris Smith, the Bonners’ attorney, said of the city’s alleged misuse of the hurricane funds, “I’ve never dealt with any aspects of that, and we have no knowledge of it.”
The inquiry regarding the hurricane funds may cause another delay in the new home construction for the Bonners, the latest in a string of setbacks the family has endured over the past three years since applying for the program.
“At best, it’s a side issue, that has nothing to do with my clients, who are simply trying to get their house rebuilt,” said Smith, who is also a former state representative. “As far as I’m concerned, we’ve complied with everything they’ve asked for, and we’re waiting on a date for the groundbreaking.”