Millions unspent in Norfolk's idle accounts

NORFOLK

As much as $4.4 million in federal funding meant to help revitalize the city's most troubled neighborhoods sits in Washington, D.C., unspent, because Norfolk for the past decade hasn't cleaned up its books.

That's money that could go toward tearing down decrepit buildings, providing services such as day care, and installing new sewers, roads and sidewalks.

On Monday, city officials said they would take steps to finally free up the money. It's a complex process that will require them to close out dozens of now-completed projects started in the mid-1990s and pool the leftover money for new work to be done.

Norfolk Redevelopment and Housing Authority leaders estimated the cash freed up may total as much as $4.4 million once city and federal tallies are done.

"It's really something we've been pushing them to do for a number of years," authority board chairman Sheppard Miller III said. "There's $4.4 million that should be helping the city, and right now it can't."

The money is part of two federal housing initiatives - the Community Development Block Grant program and the HOME program - that help pay for revitalization of low- to moderate-income neighborhoods. To receive the grants the city must specify exactly what it plans to do with the money, and the cash can be used only for the specified purpose.

For instance, the city might have received $200,000 to purchase blighted houses in the Central Brambleton neighborhood, an additional $50,000 to relocate residents from the purchased homes and $40,000 more to demolish the buildings and make way for redevelopment.

Over the years, money has been unspent when the authority has overestimated costs of purchase or demolition, when it's bought empty buildings or lots and when projects to be funded with federal dollars have been scrapped. Dozens of accounts linger with the city's name still on them. Some have only hundreds of dollars in them, others have much more. In some cases, projects in certain neighborhoods are long since done - and yet leftover funding remains.

"Many of these are projects that are finished or can't be started," said Jim Gehman, the housing authority's chief development officer. The last time projects were closed out and a reallocation was done was 1999, he said.

In contrast, Virginia Beach checks of all its Community Development Block Grant funding annually, making adjustments when needed, said Andrew Friedman, that city's director of housing and neighborhood preservation.

Because Norfolk receives and doles out the city's $8.2 million in block grants and HOME grant money, it has to undertake any reallocation work. Housing authority leaders have asked for that to be done several times, including in a 2007 letter to city management.

Ron Williams Jr., who was named the city's budget director earlier this year, said he began the process of cleaning the grant books about 18 months ago. It has taken since then, he said, to go back and document expenses and projects from the late 1990s and early 2000s.

He said he hoped to have an exact amount the city can reallocate - all of it from projects dating from 1998 to 2008 - by the time the city weighs its annual Community Development Block Grant funding this fall.

"That is the perfect time for us to align, as we see what new projects are requested," he said.

Williams said he plans to do an annual reallocation from now on, to avoid a backlog of unused cash in the future.

"It's just good budget practice," he said.

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com