Calling the National Housing Development Trust a “catastrophic failure,” the Public Accounts Committee heard testimony last week about poorly built homes, decaying after only seven years, and a board voting itself 100 percent salary increases.
NHDT General Manager Julio Ramos described for the five-member committee a situation in which families had to be evacuated from poorly built homes, described as “unfit for habitation,” while trustees voted themselves significant salary increases to attend meetings.
He described failed efforts by the agency to reclaim overpayments from members, many of whom sat on multiple committees, collecting multiple stipends several days per week.
Reviewing the June 2011 report on the housing trust by Auditor General Alastair Swarbrick, the panel heard an opening statement on Sept. 19 by Mr. Ramos – alongside Alan Jones, chief officer in the Ministry of Planning – prior to questioning by George Town representative Winston Connolly, and committee chairman and George Town legislator Roy McTaggart.
“All of the houses constructed in 2004 have been fully written off,” Mr. Ramos said. “They should have lasted longer than seven years; they were being depreciated over 10 years. I don’t know why, but it was a legal opinion, and those houses were not registered anyway.”
Mr. Swarbrick reported that the trust had acquired a series of homes that did not comply with land registration legislation, meaning the body “had sold and rented unregistered properties which were deemed unfit for habitation.”
“This necessitated the evacuation and demolition of the housing units, costing the trust $5.8 million,” the report said.
While the “impairment” had been written off, Mr. Ramos said, “we have 100 homes from 2004 that are still occupied.
What are we going to do with those individuals? With those families? What can we do to take them out and correct [the problems]?”
Describing the older housing as “very high risk,” he said only that he hoped a new board that “we are currently appointing” would “step up to the plate” to decide.
The 100 remaining homes also needed demolition, he said, while only 41 new homes had been built – in East End and West Bay – during 2010 and 2011 at a cost of $4.2 million.
Some of NHDT’s longer-standing clients, “those in good standing,” with current payments, he said, had moved to the newer homes. While the trust demolished the newly vacant structures, the problem of those in the older houses persisted.
“So they remain under threat?” Mr. Connolly asked.
“Yes,” Mr. Ramos admitted, conceding the injustice of the situation, “but it’s not their fault. When the houses were constructed, it was Hurricane Ivan and the trust never had a chance to assess them. There was a rush to house these people.”
The 41 newer homes had been built by 25 small contractors from each particular district in an effort to stimulate employment.
The work was divided into contracts worth less than $250,000 in order to avoid legal requirements to bid through government’s Central Tenders Committee.
Cabinet, said Mr. Ramos, had approved the move, mandating construction from now through 2015.
Mr. Connolly asked about directors’ fees and what the board did to earn the sums they allocated to themselves.
“They have that power,” Mr. Ramos answered. “We talked about the increases. They did it in 2011. No minutes [of meetings] describe the rationale, only the resolution. This needs to be addressed by the incoming board.”
Despite a decrease in the number of trustees – from eight to seven, to six and, finally, in 2012 and 2013, only four – “cost-wise, there was a significant increase.”
From a $49,000 total in 2009/2010, directors raised their annual fees to $110,000 the following year. Many directors attended several meetings each week, collecting stipends for each session.
“A few sat on two or three committees,” Mr. Ramos said, “and with the increases [in stipends], you could double that. The chairman could get up to $2,000 per month.”
Mr. Connolly asked, “What do they do all week? What is their function?”
“They are putting in a lot of time, a lot of oversight and development expertise,” Mr. Ramos answered.
“They plan in a room for houses that last seven years and are then demolished?” Mr. Connolly replied, followed by Mr. McTaggart, wondering if the National Housing Development Trust had claimed back, largely from the chairman and deputy chairman, $18,700 identified by Mr. Swarbrick as overpayments.
“We tried,” Mr. Ramos said, “but it’s been put on hold. We have collected nothing back.”
Calling the situation “a catastrophic failure,” Mr. Connolly said.
“This can’t continue. What will you recommend to the new board?”
“It’s very discouraging,” Mr. Ramos said. “How do I tell the directors they are not getting their increased fees? Thank God for the auditor. We need to address this in the 2012/’13 audit. I have made my recommendations. Cabinet appointed the board, and they need to be on the hook for the people’s money.”
Mr. Swarbrick said his office had “made a number of recommendations over time, but they have not been ‘actioned.’ There has been frustration in my office. We are hopeful we’ll address these issues as we take it forward.”