Isle agency’s woes State lawmakers warn that Hawaii could lose $25 million in annual federal housing money because of management problems at the state Housing and Community Development Corp. of Hawaii.
threaten funds
The state may lose $25 million
in federal housing fundingBy Pat Omandam
pomandam@starbulletin.com"I'm really concerned that because of the mismanagement that's occurred at HCDCH, that the state will lose a substantial amount of federal funds, which we need in the future for affordable-housing projects," Sen. Ron Menor (D, Mililani) said yesterday.
Menor, chairman of the Senate Commerce, Consumer Protection and Housing Committee, said recent allegations by the U.S. Department of Housing and Urban Development against the state housing agency appear to have merit, and how the state corrects them will likely determine the type of sanction, if any, it receives. A worst-case scenario would be the loss of all federal grants for public housing in Hawaii, state housing officials told Menor.
"Another concern is to forestall any takeover by HUD of our state's housing program, which could occur if the existing management problems are not resolved," he said following a two-hour committee briefing from state officials.
Gov. Linda Lingle is monitoring the situation, said spokesman Lenny Klompus.
On Nov. 1, HUD Assistant Secretary Michael Liu, a former Republican state representative and Republican candidate for lieutenant governor, said the federal agency identified "serious management problems" within HCDCH and demanded the nine-member board resign.
Liu also demanded that $771,000 spent on a nonbid contract awarded in 2000 be reimbursed to the federal government by Nov. 15.
HUD had questioned the procurement of the contract, which was to repair extensive termite damage at the Kauiokalani housing project in Waianae, after it learned former HCDCH head Sharon Miyashiro had awarded it to Punaluu Builders, a company headed by her ex-husband Dennis Mitsunaga, whom she divorced more than 20 years ago.
The current HCDCH board will hold its last meetings this week before their appointments expire. On the agenda is whether it should refund the $771,000 to HUD.
Last month, Democratic former Gov. Ben Cayetano called Liu's demands politically motivated and praised HCDCH's work in providing public-housing units.
Miyashiro retired from the agency Nov. 30. In one of her last acts, she responded to Liu in a 10-page letter dated Nov. 29 and made available yesterday. She said HUD's findings were based on conclusions from an hasty investigation that contained numerous inaccuracies on basic information and lacked specifics.
Miyashiro disagreed that the contract was improperly awarded and said the agency followed all state procurement policies. She noted Punaluu Builders originally bid $1.45 million for the work, and the final cost was fair and reasonable.
But Menor agreed with HUD that questions remain about the contract, including who initiated contact with Punaluu Builders, how the final contract price was reached and why no one checked if it violated the federal procurement process.
Robert Hall, HCDCH acting executive director, told Menor not all of the documentation on that contract is accounted for, and agreed it should be.
"Whether it exists or why it's not there, I cannot answer that question," he told Menor.
Hall said the department will work to correct the situation and wants to work closely with the Legislature.
State of Hawaii
