Story updated, One week after this story ran, the city cut the vendor a check.
By Ariella Cohen, The Lens staff writer |
With her worn straw hat and tiny home office, 33-year-old landscape architect Abby Feldman is an unlikely benefactor for the city of New Orleans. Yet she has become essentially that over the past six months, running a program for the New Orleans Redevelopment Authority without getting paid.
Feldman and her staff of two run NORA’s Growing Home program, a $250,000-a-year initiative that helps New Orleans homeowners buy vacant lots from the agency and transform them into gardens. Since moving to New Orleans two years ago to launch Growing Home, Feldman has enrolled more than 600 people in the program.
But while the initiative has attracted both local and national attention with its green, forward-looking approach to fighting blight, its director is paying a steep price for its success. Feldman, a graduate of Harvard Graduate School of Design, said she is verging on bankruptcy as she waits to be paid for work going back six months.
After floating program costs including salaries,for six months, she estimates the agency owes her $70,000. The program has three staffers, including Feldman.
“I am the target of exactly what you want to attract to New Orleans. It’s been six months, and I really won’t last much longer,” she told a boardroom of city officials gathered last week at Mayor Mitch Landrieu’s biweekly BlightStat meeting. “I love the program and I think it’s successful, but I can’t fund it myself.”
Twelve days after appearing at BlightStat and a week after this article first appeared, Feldman received the long-overdue payment. She was paid the entire $70,000 owed.
Feldman said that she enrolled 98 new participants in the NORA program in the past six months, driving between far-flung neighborhoods in eastern New Orleans, Lakeview and Gentilly to advise homeowners with no salary to even cover the cost of gas.
The unpaid contractor’s plight illustrates the structural challenge facing government agencies that run recovery programs without any up-front money. Though it’s charged with redeveloping blighted properties in the city, NORA does not get money from the city budget. Instead, it feeds primarily on federal grant money that comes in only after work has been done – and after myriad approvals are granted at the federal, state and local levels sometimes.
This means that before a check can be cut for Feldman, her invoice must be rubber stamped in Washington, Baton Rouge and at City Hall.
“It’s a huge problem,” NORA Executive Director Joyce Wilkerson said. “The invoices go back and forth, to us, to the city, to the state, to the state program people, back to the city.”
Wilkerson acknowledged that Feldman was not the only NORA contractor waiting on long-overdue payment, and in fact, there could be hundreds. As of Wednesday, the city owed NORA a total of $1.2 million for work invoiced by the agency or contractors like the landscape architect, Landrieu spokesman Ryan Berni wrote in an email.
“Both the City and NORA are working to address processing issues, including NORA’s invoice submissions,” Berni added.
The tortuous trip taken by each invoice means that projects often stop and start several times, costing NORA in wasted work hours and delays that can drive up construction costs. Wilkerson said her agency’s board is trying to establish a line of credit at a bank that would let the agency pay contracts without waiting for reimbursements.
“We need to have direct funds available if we are to work efficiently,” Wilkerson said.
One of the factors in the payment delay is the fact that the city and NORA have not signed off on Cooperative Endeavor Agreements for millions of dollars in program costs. The agreements must be signed before the city can release funds to NORA to pay for work. The Landrieu administration and the city are now in the “final process” of executing the agreements, city spokesman Berni wrote in an email.
Without the agreements, the Landrieu administration has been able to pay NORA only $713, 848 since coming to office in May, Berni said. Prior to Landrieu’s entry into City Hall, NORA received another $15.9 million in reimbursements for post-Katrina blight clearance work done under Cooperative Endeavor Agreements with then-mayor Ray Nagin.
Budget documents show that for 2011, the city set aside a total of $4.5 million to NORA for housing programs. That money comes on top of $1.5 million in administrative fees paid out to the agency since 2008 to appraise and sell Road Home Properties that owners sold back to the state.
NORA has relied on lines of credit in the past, but without more secure funding to use as a guarantee, banks have been reluctant to provide the kind of cash reserve the agency truly needs to operate smoothly, former NORA Chairman Herschel Abbott said in an interview Tuesday.
Abbott resigned from the board in 2009 after presiding over the agency in its critical growth period after Katrina. When he stepped down, the city owed NORA $4 million and in order to keep projects moving, NORA used $500,000 it had on hand to secure a $2 million line of credit.
The money was gone in a month as the agency paid bills going back six or nine months, Abbott recalled. The board briefly thought the agency would have to close because the city was taking so long to process its invoices and no bank would extend a line of credit because the agency had nothing to guarantee the loan.
“Getting a line of credit depends on what you have to pledge or mortgage against,” he said. “Since NORA has no guaranteed source of funds, it is extraordinarily difficult to get credit.”.
The State Legislature established NORA in 1968 to eliminate blight and help with slum clearance. But while the agency was given the legal power to acquire and dispose of properties, borrow money and issue bonds, NORA did not receive funding to use these powers until 1994. Even then, the city granted the agency a relatively small sum of $250,000 in U.S. Department of Housing and Urban Development Community Block Development Grants to assist with expropriating blighted properties. Until Hurricane Katrina forced the city to rethink its approach to redevelopment, NORA’s annual budget never exceeded $5 million, a fraction of the agency’s 2010 budget of $70 million, much of which comes from federal neighborhood stabilization grants.
Along with the increased budget and responsibilities, comes more red tape. An August audit of NORA done by the HUD inspector general found spotty state oversight, “a lack of controls” over the authority and a “strained” relationship between the city and NORA. The agency satisfied the deadline by signing a new agreement with the city and committing to follow new state monitoring procedures for all disaster grants passed through Baton Rouge.
The monitoring is partially to blame for Feldman’s overdue pay, New Orleans Chief Administrative Officer Andy Kopplin said at Thursday’s BlightStat meeting.
“We’ve attempted to bring some integrity and transparency to the process, so we are not spending money the wrong way,” he said. “Several hundred contracts piled up and now we are trying to catch up.”
Kopplin said that the administration would “try to prioritize” Feldman’s problem, as well as work on “a system that will make sure no one has gone through what you have gone through.”
Feldman is betting Kopplin will succeed in improving the system.
“I’m rebidding on the project,” she said. “I want to keep Growing Home alive, but I can’t do it alone.”