Fort Pierce - Community Services Report

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Phone: (212) 286-9100 | Fax: (212) 730-2433 | www.investigation.com

City of Fort Pierce
Audit of the Community
Services Division
Prepared For
Mr. David Recor ICMA-CM
City of Fort Pierce
Ofce of the City Manager
City Hall, 100 North US 1
P.O. Box 1480
Fort Pierce, FL 34954-1480
January 14, 2010
TABLE OF CONTENTS
LIST OF EXHIBITS .............................................................................. 2
INTRODUCTION .................................. ................................... ............. 3
BACKGROUND ... . .............................. .. . ............................................... 6
AUDIT SCOPE, OBJECTIVES AND AUDIT METHODOLOGy ................ 7
DOCUMENTS RECEIVED ..................................................................... 9
PROGRAMS AUDITED ......................................................................... 11
INTERVIEWS ............................................................ . ...... . ................... 18
FINDINGS ............. ............................................................................... 26
REVIEW / ANALYSIS OF CASES .............................................. . .......... .40
CONCLUSION ................................................................... ................... 130
INDEX .............. . .................................. ................................................. 131

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LIST OF EXHIBITS
State Housing Initiatives Partnership's Local Housing Assistance Plan .......... Exhibit 1
Community Development Block Grant Housing Rehabilitation ...................... Exhibit 2
Hurricane Housing Recovery Program ............................................................. Exhibit 3
St. Lucie County Lending Consortium ............................................................. Exhibit 4
Schedule ofMt. Olive Disbursements .............................................................. Exhibit 5
Florida Community Development Association, Inc. Brochure ........................ Exhibit 6
fIiIi'l
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INTRODUCTION
Kessler's limited forensic audit of the City of Fort Pierce Community Services Division
("CSD") has exposed a systemic failure throughout every aspect of the CSD' s oversight
responsibility of the taxpayer funds it has been entrusted to administer. This failure and a
certain arrogance to the programs rules and regulations prevented assistance reaching
those in real need. This audit found that there was a complete abdication of the oversight
role of the CSD staff to protect and properly distribute taxpayer funds. Taxpayers should
never have to worry that their money is treated like candy.
The Kessler audit disclosed favortism to other City workers and other individuals
including relatives of City staff, which in some cases the actions, appear to indicate theft.
The entire process of awarding funds to the needy should have been administered by the
CSD in a straightforward, level handed and transparent process but the Kessler audit
revealed it was not. In fact this audit only touches on certain aspects of the awarding of
taxpayer funds and it is strongly suggested that all areas in which funding to the public by
the City was involved be audited. Additionally, the audit disclosed major concerns about
the selection of contractors, awarding of bids and ultimate dealing with contractors.
Based upon Kessler's findings we recommend that the entire purchasing process be
thoroughly investigated.
Kessler found that CSD failed to have adequate controls in place to guard against fraud,
abuse and conflicts of interest by the contractors and the programs it was administering,
appears to have been beset by fraud, conflicts of interest and willful mismanagement.
Processes that were established to prevent fraud were abdicated.
Having examined files many of which were in the state of disarray and mIssmg
documents and reviewing documents riddled with redactions and inaccuracies it is
questionable whether these perceived errors on the part of CSD employees were the
result of complete incompetence or actually by design.
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Corruption is a broad term encompassing many types of behavior. The discrepancies
Kessler uncovered during its review equates the manner CSD was operated with the
actions of individuals running a corrupt organization. While the most blatant form of
corruption are obvious, there are certain acts which while not as clear cut are nonetheless
corrupt including an employee's abuse of office to benefit friends and relatives, fraud,
misappropriation of public funds, paying for goods / services not delivered, bribery and
bid rigging.
Based upon the audit results in the Kessler Report additional audits must be conducted
concerning other areas linked to the CSD operation including employee's affiliations
with corporations and relationships between bidders for contracts, a review of the CSD
expense and travel accounts, a review of the repayment of mortgage payments and
settlements by applicants, the return of rental deposits from the landlord and a
investigation to see if applicants still resides in the property taxpayers funded for
rehabilitation and down payment assistance. Additionally, a complete review of every
mortgage issued by the City must be conducted by a legal team to determine if they were
prepared correctly. It is also suggested that an Anti-Fraud and Code of Ethics Policy be
established and that an ethics training program be provided to all City workers. Finally a
reporting system should be established similar to Kessler's Fraudbusters Tip reporting
service so that employees can anonymously report instances of fraud and
mismanagement.
Additionally, Kessler recommends that this report be referred to United States Attorney
so that a Grand Jury can be convened as it has broad powers to make inquiries and
compel record production and testimony into criminal matters as well as civil matters,
regardless of whether criminal or irregular conduct is ultimately charged. It also has the
power to investigate the conduct of public employees including to inquire whether those
employees were lax in the performance of their duties.
The illustrations disclosed in The Kessler Report have highlighted the actions of a select
few City employees both inside and outside the CSD. These employee's actions have
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brought into question the creditability and integrity of other City staff, many of which are
dedicated hard working employees. These few have served to undermine the public' s
confidence and trust in the entire City.
The statements made in The Kessler Report that managerial practices need improvement,
as well as other conclusions and recommendations represent the opinions of Kessler
International. Determinations of corrective action to be taken must be made by
appropriate City Officials.
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BACKGROUND
The City of Fort Pierce through the CSD administers various grants from the state and
federal government whose primary objective according to the department's website is to,
"develop a viable urban community, including decent housing, a suitable living
environment, and vastly expanded economic opportunities, principally for persons of low
and moderate income. All activities must be eligible under 24 CFR 570.201-206, and
address national and local community development objectives."
In early 2009, a City finance employee began questioning the irregularities in the
processing of grant applications and the preferential treatment to two city employees who
were granted loans over other applicants.
Kessler International ("Kessler") was retained by the City of Fort Pierce ("City") to
conduct a forensic audit of CSD. Kessler has had to limit the scope of this engagement
based upon the magnitude of findings that have been uncovered so far. It should be noted
that the examples Kessler cites in this report represent a miniscule portion of the
problems, discrepancies and inconsistencies encountered during the audit.
Application Process
The application process first begins with an individual obtaining an application from the
CSD office. The individual is told to fill out the application completely, and is provided
a list of documents that must be provided before the application is accepted. The
applicant is told to call the CSD to schedule a meeting to review the application and
discuss what type of assistance is being provided. Kessler have been advised that only
applicants who are illiterate or can't write legible have the applications filled out by CSD
employees. Kessler learned the CSD was reprimanded by a governmental agency in a
previous oversight audit because the applications contained correctional fluid corrections
and because of this issue CSD utilized it as an excuse to rewrite the applicant's forms and
discard the originals.
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AUDIT SCOPE, OBJECTIVES AND AUDIT METHODOLOGY
Kessler's forensic audit included a review of the State and Federal guidelines applicable
to the distribution of grant and mortgage funds as well as the guidelines issued by the
CSD. The review concentrated on areas of concern in which Kessler was informed
instances of negligence, fraud, public corruption, nonfeasance, malfeasance and
misfeasance might have occurred over the past five years.
Kessler conducted interview with current and former employees of the CSD, the Finance
Department, the Purchasing Department, Management Information System, contractors
to the City and recipients of funds.
In order to accomplish the goals of the City, Kessler reviewed and analyzed an extensive
number of files, documents and examined City e-mails. Kessler also conducted an in-
depth review and analysis of a sampling of applicant's case files and conducted research
on employees of the City to determine their affiliation with various corporations and to
document whether these corporations received funding through the CSD
The cases files reviewed include the following programs:
Hurricane Housing Recovery ("HHR") Programs
Community Block Development Grant ("CBDG") Programs
State Housing Initiatives Partnership ("SHIP") Programs
Home Again Program
REACH Program
Weatherization Program
Insomuch as this audit has been limited by budget, Kessler has expended in excess of 300
hours over the budget at no charge to the City in conducting this audit and preparing the
report, due to the contradiction of various documents and the discrepancies uncovered in
the operations of the CSD.
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During the course of the audit documents were not readily available thus, it should be
noted that Kessler utilized the accounts payable date shown on the general ledger when
actual cancelled checks were not available for our examination and analysis.
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DOCUMENTS RECEIVED
During the course of the audit Kessler was supplied and utilized various documents and
digital files provided by the City, which includes the following:
Previous Audits and Investigations:
Florida Housing Coalition Report (October 21,2009)
Housing and Urban Development Audit Report (September 27, 2002)
Housing and Urban Development Audit Report (January 31, 2003)
Documents received from the City:
Anonymous Complaints
Approved Contractors Application
Approved Contractors List
Case Overviews
CDBG Awards
Code of Ethics for Public Officers and Employees
Community Development Block Grant (CDBG) 2005 Disaster Recovery
Community Development Block Grant (CDBG) Housing Rehabilitation
Assistance Programs (Revised July 12,2006)
Community Service Organizational Chart
Community Services Housing Assistance Programs Repayment Guidelines
Communitywide Council Organizational Chart
Communitywide Council
Credit Card Statement 2008
Financial Operating Plan - City of Fort Pierce - FY 2009-2010
Funding Newspaper Advertisements (2005-2009)
General Ledgers 2005 - 2009 (Funds 103 - 106)
HHR Grants / Awards
HHR / SHIP Applicants/Recipients (2007-2009)
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Hurricane Housing Recovery Program (HHRP) guidelines
HOME Again Disaster Assistance Program (HOME) guidelines
HOME Again Grants
HOME Again Program Report (2005-2007)
HUD Consolidated and Action Plan 2005-2010
List of City Employees who Received Grants
New Hire/Termination Report (2005-2009)
Organizational Chart for Fort Pierce
Previous Audit Reports (2002-2003)
Rehab Specialist Job Description
State Housing Initiatives Partnership Program (SHIP)- Local Housing Assistance
Plan (2003-2006)
SHIP Housing Rehab Waiting List
Supporting Documentation of Purchase of Land from Jazco Development, Inc.
Statements of Financial Interests
Temporary Employee Outline
Trial Balance (2005-2009)
Various Cases from the Hurricane Housing Recovery ("HHR"), Community
Block Development Grant ("CBDG"), State Housing Initiatives Partnership
("SHIP"), Home Again Program and REACH Programs.
Weatherization Chart
Work Write-up Sample
Items that were requested by Kessler but were not produced by the City:
Complete List of All Approved Contractors since 2005
Selection Committee Minutes and Notes for Reach Program
Aged Accounts Receivables applicable to CSD Transactions
Guidelines for Acceptance of Programs by the State
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PROGRAMS AUDITED
Kessler's audit encompassed a comprehensive review of the programs administered by
the CSD including:
State Housing Initiatives Partnership's ("SHIP") Local Housing Assisting Plan
(Exhibit 1)
The Local Housing Assistance Plan (LHAP)'s purpose is to "Provide guidelines,
operating procedures, and strategies to be utilized in delivery of affordable housing
efforts for very low, low, and moderate income households within the city limits of Fort
Pierce."
Kessler compared the requirements of the SHIP Program as stated by the City with the
requirements of the State for the SHIP Program and have found many discrepancies in
our cursory review of these documents. The City does not provide in the application,
"A statement that it is a first degree misdemeanor to falsify information for the purpose
of obtaining assistance." Additionally the SHIP Program states that an applicant must
bring a Federal Income Tax Return to verify the number of legal dependants, income
from interest, dividends and partnerships. Kessler has found no copies of or reference to
Federal Income Tax Returns on file with any of the applicants. This is a serious
weakness of the program and allows the applicant to easily modify their application to
receive assistance.
Kessler have also determined that the SHIP Program guidelines as per the State of Florida
Statutes indicate that if an individual has equity in a property that a calculation must be
done to determine the total value of the equity. This calculation must be included as an
asset of the applicant, yet Kessler has not observed any calculation of equity for the any
of the applicants.
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The program strategies as provided by the City are as follows:
Housing Rehabilitation, "The City's Rehab Specialist will inspect homes of
eligible applicants to identify work activities, through a work write up, for
improvements that are needed for safe and sanitary habitation, correction of
substantial code violations, or the creation of additional living space;"
o Maximum award: $15,000
Emergency Repairs, "Repairs considered an "emergency" will be available to
owner/occupied households. The qualifications for an emergency situation may
very from a leaking roof, plumbing, to faulty wiring. In general, any situation that
endangers the health or safety of the family will be considered an emergency
repair;" "Eligible applicants must contribute a minimum of $500."
Down Payment Assistance, "Assist(s) eligible first time homebuyers with down
payment and closing costs to purchase a newly constructed home, not to exceed
$259,440 or an existing home, which need repairs, not to exceed $280,658 for use
as their principal residence;"
o Maximum award: $15,000 for very low and low income families, and
$10,000 for moderate income families
New construction of multi-family rental units, "SHIP funds may be used as
part of the local contribution when participating in such programs as, but not
limited to, the Florida State Apartment Incentive Loan (SAIL) and Housing Tax
Credit programs when they are used to perform construction of multi-family
rental housing development occupied by income eligible families;"
o Maximum award: $75,000 per unit
Foreclosure Prevention Program, "Funds will assist homeowners with bringing
their mortgage payments current prior to the start of the foreclosure process.
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Eligible expenses include delinquent mortgage payments (principal, interest, taxes
and insurance), attorney fees, late fees, and other customary fees;"
DisasterlPost Disaster/Mitigation/Recovery, "In the event of a state, federal, or
locally declared natural disaster by Executive Order as required in Section
420.9078(1), F.S., funds will be used to leverage with available federal and state
resources to assist income eligible households with disaster related repairs."
Community Development Block Grant ("CDBG") Housing Rehabilitation
Assistance Programs (Exhibit 2)
The Housing Rehabilitation Programs have provided financial and technical assistance to
low and moderate-income persons that own and occupy single-family residential
structures in the city limits. Housing assistance to homeowners has been available
through emergency grants, deferred payment loans (forgiveness grants), and low interest
revolving loans."
Programs/strategies therein include:
Rehabilitation Revolving/Deferred Loan Housing Programs, "Substantial
rehabilitation assistance is available through a revolving and/or deferred mortgage
loan. Funds will be used for improvements that are needed for safe and sanitary
habitation, correction of substantial code violations, or the creation of additional
living space;"
o Maximum award: $35,000 per household, leverage oflocal and state funds
when repair cost exceeds the maximum award
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Emergency Repair Assistance Program, "Funds will assist eligible
homeowners whose health and/or safety is threatened by a hazardous condition,
varying from a leaking roof, and plumbing to expose or faulty electrical writing;"
o Maximum award: $15,000 per household, leverage oflocal and state funds
when repair costs exceeds the maximum award
Senior Citizen and Housing Security Program, "The City of Fort Pierce, in its
efforts to provide a safe and suitable living environment, to evaluate and provide
security measure in the homes of senior citizens and handicapped persons, agree
to install security measures that do not require intensive or extensive upkeep, no
monthly monitoring charges, and are easy to operate;"
o Maximum award: To be determined on a case-by-case basis. Leverage of
local and state funds will be applied when necessary
U-Paint-It Program, "The paint program is a "Clean-Up/Fix-Up" program
intended to serve as an incentive for citizens to beautify the exterior appearance of
their homes."
o Maximum award: One hundred, ninety dollars for paint and paint supplies
Hurricane Housing Recovery ("HHR") Program (Exhibit 3)
The Hurricane Housing Recovery Program "Sets forth the plans for the City of Fort
Pierce to provide guidelines, operating procedures, and strategies to be utilized in
delivery of housing recovery efforts for extremely low, very low, low, and moderate-
income households within the city limits of Fort Pierce."
Programs/strategies therein include:
Housing RepairlRehabilitation, "The City's Rehab Specialist will inspect
homes of eligible applicants to identify work activities, through a work write up,
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for improvements that are needed for safe and sanitary habitation, correction of
substantial code violations, or the creation of additional living space;"
o Maximum award: $50,000 for extremely low, very low, and low income
families; $40,000 for moderate income families
Land Acquisition, "Funds will be utilized to purchase individual scattered
building lots for homes to be built by Habitat for Humanity or an approved private
contractor". The REACH Program is also part of the HHR Land Acquisition
program, where over 2.0 million was provided to finance the construction of
twelve homes in the Oak's at Moore Creek.
Construction and Develop Financing, "Single-family bond issuance subsidies
or set asides for down payment/closing cost assistance and single-family
collaboration ownership strategy with the County and City of Port St. Lucie on
property in the County and/or City of Port St. Lucie;"
o Maximum award: $50,000 per unit
Housing Re-entry Assistance, "Provide eligible applicants with funds to assist
with temporary storage of household furnishing, security and utility deposits that
are required to secure needed housing within the city limits of Fort Pierce;"
o Maximum award: $2,000 for extremely low, very low, low, and moderate
income families
Replacement of Site Built Housing, "Reconstruct severely substandard homes of
eligible owner occupied single family homes that are not feasible for
rehabilitation based upon structural conditions or rehabilitation costs. Homes will
be demolished and rebuilt to current code;"
o Maximum award: $100,000 for extremely low, very low, and low income
families; $90,000 for moderate income families
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Foreclosure Eviction Prevention, "Limited amount of funding will be provided
to assist with mortgage or rental payments up to three months, to eligible
applicants residing within the city limits of Fort Pierce;"
o Maximum award: $2,500 for extremely low, very low, low, and moderate
income families
Down Payment Assistance for New and Existing Purchases, "Assist eligible
applicants with purchase of new construction or existing homes, which need
repairs, for use as their principal residence. Monies committed, but not utilized
by an applicant, will be returned to the down payment strategy for reallocation;"
o Maximum award: $40,000 for very low, and low income families, $30,000
for moderate income families
Acquisition of Building Materials, "Homeowners will be assisted with the
purchase of building materials for minor repairs to their homes;" and
o Maximum award: $ 1 ,000 for extremely low, very low, low or moderate
income families
Hazard Mitigation, "Assistance will be provided to eligible homeowners to
reduce or eliminate exposure of their lives and property from disasters harm."
HOME Again Disaster Assistance Program
The HOME Again Disaster Assistance Program is "A disaster relief program that will
provide up to $21 million statewide for the repair, reconstruction or replacement of
homes damaged during the storms. The allocation is primarily focused on the most
intensively storm-impacted areas of the state, but units of local government, public
housing authorities, and nonprofits in every county are eligible for funding"
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(www.floridahousing.org). Fort Pierce was provided with $500,000 in funding through
this program.
Weatherization Assistance Program
The Weatherization Assistance Program states, "The mission of the program is to reduce
the monthly energy burden on low-income households by improving the energy
efficiency of the home." The guidelines allow for replacement of windows and doors,
install insulation in the floor and attic, install solar screens, repair or replace heating and
cooling units and repair or replace and water heaters.
A review was conducted of the procedures and guidelines from the Florida Department of
Community Affairs Housing and Community Development applicable to the
Weatherization Assistance Program. Kessler was not provided with any guidelines
prepared by the City.
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INTERVIEWS
Kessler conducted numerous interviews with current and former employees of the City of
Fort Pierce, various contractors and grant & mortgage applicants in order to obtain a
better understanding of the policies, procedures and circumstances involved in the
issuance of funds and the methods of awarding grants and contracts.
During the interviews Kessler was repeatedly informed by individuals within the CSD
that if the funding from the State and Federal Government wasn't utilized then the grants
would have to be returned. Therefore, this could be a reason Kessler heard from
contractors that the City was "throwing money around like crazy" and that some of the
contractors "would do anything" to get the business. There was a pervasive attitude
conveyed throughout the interview process that contractors had to provide kickbacks to
CSD employees m order to do business with the CSD and City.
Another troubling attitude was that employees of the CSD repeatedly stated as
justification for certain actions that if the money was not spent it would be lost, and that
there was a sense of urgency regarding dispensation of the funds because they were
limited by imposed time constraints.
Throughout the interview process some CSD employees pointed out the lack of
organization and compliance within the department. One employee explained there is a
lack organization and oversight by supervisors within the department, and indicated that
while working in the department they were subjected to a hostile work environment.
Applications
Kessler interviewed two employees, whose job title was Community Service Specialists.
Both individuals stated that there were problems with the intake of applications. In fact
Kessler was informed that during a previous audit CSD was cited for changing
applications by using correctional fluid, and warned CSD that funding would be lost if
this continued. Both employees claimed that the applicants had incorrectly completed the
application and that the corrections were done by CSD employees. Kessler was informed
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that it was then decided by the CSD that the applicant would prepare a draft application,
and submit it to the CSD, at which point the Community Service Specialists would
transcribe the information to a new form. Kessler noted that on forms completed by
CSD employees egregious errors were noted including incorrect social security number
and names of applicants. Kessler finds this practice to be dubious at the least, as the
originals forms completed by the applicants were either discarded or given back to the
applicants.
Kessler was also informed that in cases where completed forms had to be notarized, these
forms would be placed in an inbox along with a copy of the driver's license of the
applicant and would be notarized at a later date. This is in violation of the Florida
Statutes Title X, 117.107 (9); which states:
A notary public may not notarize a signature on a document if the person whose
signature is being notarized is not in the presence of the notary public at the time
the signature is notarized. Any notary public who violates this subsection is
guilty of a civil infraction, punishable by penalty not exceeding $5,000, and such
violation constitutes malfeasance and misfeasance in the conduct of official
duties. It is no defense to the civil infraction specified in this subsection that the
notary public acted without intent to defraud. A notary public who violates this
subsection with the intent to defraud is guilty of violating S .117.105.
Kessler was also advised that during the period covered by the audit, that CSD employees
were responsible for drafting mortgages. Based upon the review conducted by Kessler,
many of the mortgages contained significant errors including conflicting repayment
periods indicated on the same mortgage note, misspelling of individuals names on
mortgages and mortgages indicating that it was deferred as well as indicating a
repayment period on the same mortgage. It is unclear why CSD employees were drafting
mortgage documents and how, unless by design, almost every mortgage reviewed
contained errors. Since the City has access to the City's legal team, it is unclear why this
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resource was not utilized. Kessler has been advised that currently the mortgages are
drafted by the legal department, instead of the CSD.
Bids
According to CSD employees interviewed the bidding process is performed by the
Purchasing Department of the City in conjunction with CSD staff. A CSD employee
stated that prior to his employment at the CSD bids were routinely awarded even through
they were not the lowest bid. Another employee who confirmed this practice justified the
reason why this had occurred was that the lowest bid was below the cost of what CSD
expected it should cost, the contractor was unfit to conduct the work, or the contractors
had other jobs in which case the bid was provided to the next highest bidder. No
documentation regarding how these decisions were reached was contained in the case
files and furthermore, insomuch as many of these bids were publicly advertised and had
to follow guidelines, this practice is questionable. In fact one employee stated that his
sole basis to price out a bid to refer to the Home Depot catalog. This did not explain how
this CSD employee estimated the costs for labor.
Contractors and Change Orders
Kessler heard from many City employees that the work performed by the contractors was
sub par. In fact Kessler has been advised by a Rehab Specialist that recipients of funding
would complain to management within the City regarding the quality of work that was
conducted on their home, whether it was rehabilitation or a complete home construction.
The Rehab Specialist continued to state that if an individual complained, additional work
was conducted on the premise, and that in some cases the work performed would go
above and beyond the need to bring the dwelling up to code. The Rehab Specialist
justified these large projects by stating that, "People complain and get what they want."
Kessler has also been informed that rehabilitation projects would include more than just
items to bring the dwelling up to code. During Kessler's review of the case files
including such items as marble sinks, granite counter tops, air purifiers and custom
homes. Kessler was informed that an air purifier would not be considered an essential
repair to bring a dwelling up to code, but a Rehab Specialist stated the applicant would
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provide a "doctors note" which indicated that because of respiratory problems this item
was necessary. Kessler was unable to find any of documentation located within the case
files it reviewed proving this claim.
Kessler was also told there are too many people handling paperwork, causing documents
to go missing and to be misplaced. An employee stated that it is especially difficult to
locate change orders in the case files from contractors and approval of change orders by
the CSD. The employee also informed Kessler that it was common for CSD employees
to type the change order document submitted by the contractor and discard the original.
When asked why this practice occurred the employee could not elaborate. This practice
was confirmed by Kessler during their review of the case files as many files do not
contain original documents from the contractor including change orders. This modus
operandi clearly presents a situation that requires additional investigation.
Demolition
During an interview with one of the Rehab Specialist, Kessler was advised that there was
a general rule followed regarding the issuance of funds for rehabilitation projects.
Kessler was told that the cost of the rehabilitation project must be less than 50% of the
assessed value of the property. If the cost of rehabilitation is more than 50% of the
assessed value of the property a determination is made as to whether to proceed with the
rehabilitation or to conduct a complete demolition and rebuilding of the house.
According to the individuals interviewed the estimate is based on the discretion of the
Rehab Specialist and Kessler did not find any written guidelines for this practice.
Multiple Contracts
Kessler was informed that a general practice within the CSD is that contractors were not
permitted to receive more than two rehabilitation or reconstruction projects at one time.
Kessler has found no written rules or regulations to document this practice; however
Kessler was told it was used as the basis for eliminating low bids.
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It is also interesting to note that during the construction of the REACH Program houses,
three contractors were utilized to construct twelve homes.
PNC Bank flk/a National City Bank ftk/a Harbor Federal Savings Bank
Kessler conducted an interview with an individual representing PNC Bank f/kla National
City Bank f/kla Harbor Federal Savings Bank (a member of the St. Lucie County
Lending Consortium). Kessler was informed that in many cases, different deferment
periods of City mortgages were utilized as strategies to allow an individual to become
qualified for a first mortgage through a financial institution. Kessler was also advised
that if a mortgage was deferred beyond a period of three years, this debt would not be
used in the calculation for prequalification of a first mortgage. Additionally, Kessler was
informed that many of the applicants receiving funding from the City were in debt, and in
some cases collection, less consideration would be placed on the collection accounts if it
were a student loans or a medical bill when the first mortgage was calculated for pre-
qualification.
Program Specific Notes
During interviews it was related to Kessler that the maximum amount of an award to an
applicant was mandated by law. During the audit Kessler identified many projects in
which the allocations exceed the maximum.
REACH Program
Kessler spoke with one City employee whom received assistance from one of the CSD
programs. This employee informed Kessler that the entire process, and particularly the
closing process of the mortgage, was not thoroughly explained by staff at the CSD. The
City employee stated that her closing date changed multiple times, and had no idea why
she was given preferential treatment. This employee further expressed that she felt that
her questions regarding the mortgage payments were disregarded, that she was not
"respected" throughout the process and that her concerns were not properly addressed.
The employee relayed that she was not even told how much money to bring to the closing
until the day of the closing. She cited the process leading up to the closing as a
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"horrible" experience and indicated that because of delays by CSD staff that she was
close to living in the street because she had given notice of her leave to her landlord and
the closing was continually postponed.
During an interview with another CSD employee, Kessler learned that over $2 million
dollars had been allocated to the REACH Program, part of the HHR Program. Kessler
was also told that there were two Phases to the project. Kessler has identified that Phase
1 was for a selected target area which was bordered by North 13
th
Street on the West,
North 12th Street to the East, Canal Terrace on the North and Avenue B on the South.
Phase 2 of the project was to provide funding for purchasing a home outside of the
designated target area, if funds were available after Phase 1. No paper work was
provided to Kessler to describe the nature of Phase 2.
Additionally, two City employees both of whom had worked in the CSD were the only
individuals to receive funding from this so called Phase 2 of the REACH Program. It has
come to Kessler's attention that a CSD supervisor and a former CSD employee who
received funding from Phase 2 were friends, and have known each other since high
school. Kessler has also been advised by numerous employees that the original
amortization schedules prepared by the City for these mortgages allegedly contained
errors. No amortization schedules were able to be produced showing these errors. The
original interest rate for the one employee was listed as 4% and for the other employee
was listed as 3%. These were both allegedly reduced to 1 %, so that these employees
could afford the mortgage. The change in interest rate has not been recorded with the
Clerk of the Circuit Court.
One employee that received funding from this so called Phase 2 also stated that she had
received funding from the City on two other separate occasions. The first occasion
occurred in January 2007 ($1,988), when Rental Assistance was provided for her first
month rent, last month rent and security deposit. Applicable to a rental agreement, she
stated that the money for the security deposit was never returned to the City, and that the
23

KESSLER

landlord had kept it. Additional assistance was provided to the employee in June 2007
for eviction assistance, the amount paid was $2,485.
Rehab Specialist
Based upon the interviews conducted the job specifications of a Rehab Specialists include
a review of the work plan which outlines work to be conducted on a residence to bring
the dwelling up to code, and includes an estimated dollar amount for the cost of the
project. Based upon the work plan a mandatory onsite walk through of the residence is
done with the proposed contractors. The Rehab Specialist is also supposed to conduct a
periodic review of the work in progress and approve any change orders.
During interviews, Kessler discerned significant differences in the qualifications, skills
and experience of Rehab Specialists. For example, in one instance, a Rehab Specialist
had over fifteen years experience as an engineer and was licensed as a building inspector.
Another employee who holds the position of a Rehab Specialist appears to have little or
no qualifications other than having attended some industry related seminars.
Kessler has also learned during the audit that the Rehab Specialists were routinely
approached by contractors, offering kickbacks. One Rehab Specialist related that he
never took a kickback and states ethical and moral standards as the reason for him
dismissing the offers he receives. The same individual also related to Kessler rumors that
other Rehab Specialists had been approached by contractors offering kickbacks, but
stated he could not verify if the other Rehab Specialist accepted the offers. Another
Rehab Specialist claimed that one of his former co-workers routinely bragged about an
income of over $100,000 per year. A Rehab Specialists income is limited to $55,972.80.
Waiting List
During the interview process Kessler was also informed that the decision to award funds
was made on a first come first serve basis, based upon submittal of an application.
Kessler was also informed that those individuals not receiving awards would be placed
on a wait list once the prospective recipients were identified. The wait list was allegedly
24
maintained by the front desk receptionist. During the audit Kessler has determined that
there are instances of cronyism where the 'first come first serve' mantra was not
followed.
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KESSLER

FINDINGS
2002 Avenue 0, Fort Pierce, FL
On 111011990 J.P. Morgan and Ola Mae Morgan received funding from the City in the
amount of $11,700, for housing rehabilitation work to be conducted on the property
located at 2002 Avenue 0 in accordance with a Housing Rehabilitation Agreement dated
111 0/1990. The Housing Rehabilitation Agreement states the individuals of the
household include J.P. Morgan, Ola Mae Morgan and Idella Morgan. The City
Promissory Note that accompanied the Mortgage Deed specifies a repayment term of
$11,700 over a period of ten years at 5% interest. Payments in the amount of $123.10
were to begin on 6/111990 and the last payment was due on 511/2000 in the amount of
$123.64.
On 412611994 a Warranty Deed shows the property having transferred ownership from
J. P. Morgan, Sr. to Mary Patricia Matthews. The Warranty Deed is witnessed and
signed by Betty J. Barnes and Evelyn Home. This document states that it should be
returned to B & B Bookkeeping & Financial Services, 1711 North 25
th
Street, Suite D, Ft
Pierce, FL 34947. The Florida Department of State does not have any listing for B & B
Bookkeeping & Financial Services as either a corporation or fictitious business. Kessler
did however locate at the same address, a for profit corporation named B & B
Bookkeeping & Income Tax Service, Inc. which lists Betty 1. Barnes as the Registered
Agent and President and Clifford Barnes as Vice President.
A Satisfaction of Mortgage dated on 4/2011998 and filed 4124/1998 for the Mortgage
filed in 1990 is dated four years after the property is sold.
On 3/1512005 a Mortgage Deed was issued and filed with the Clerk of the Circuit Court
on 312512005 in the amount of $10,000 to be satisfied over a period of one year between
the City, 1. P. Morgan and Betty J. Barnes although the deed was still recorded in the
name of Mary Patricia Matthews. These applicants should have never been approved for
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INTERNATIONAL-
funding from the City, since the property was not in their names. These documents are
signed and notarized by CSD employees.
On 3118/2005 A Notice of Commencement is issued for J. P. Morgan and Betty Barnes
and is notarized by a CSD employee. This document was filed on 3/25/2005 with the
Clerk of the Circuit Court and names the contractor as Artenal Construction
Company/Sunrise City CHDO.
On 4/13/2006 a Quitclaim Deed was issued and filed with the Clerk of the Circuit Court
on 4/14/2006, transferring ownership of 2002 Avenue 0 from Mary Patricia Matthews
4211 W Grace Street Tampa, FL to Mary Patricia Matthews, Betty J. Barnes and Idella
Siplin. The Florida Department of State indicates that Idella Siplin, 1441 Pineburke Lane,
Fort Pierce was the Registered Agent and President of Morgan Siplin, Inc. a for profit
corporation formed on 9/24/2007 and dissolved on 9/26/2008.
Kessler requested a copy of the case file for J. P. Morgan and Betty Barnes. The City
was unable to produce any documentation concerning the original application and
qualification of the applicants. The only documentation the City was able to produce was
a Contractors Final Invoice Release of Liens and Warranty from Artenal Construction
Company / Sunrise City CHDO dated 3/18/2005 and signed 4118/2004 by a Rehab
Specialist, Betty J. Barnes and a contractor's rep, whose name is indistinguishable. The
City was also able to produce a Certificate of Final Inspection indicating that the final
inspection was completed on 4/18/2005 and is signed by the Rehab Specialist and Betty
J. Barnes on that day and Dorina L. Jenkins on the following day. An unknown
Contractor's rep signature also appears on the document. Finally, the City produced poor
reproductions of eight photographs of items such as a light bulb, fan, cabinets, and
unknown items. The City also provided Kessler with a Department of Development
Memorandum requesting disbursements of $10,000 to Artenal Construction
Company/J.P. Morgan & Betty Barnes.
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INTERNATIONAL"
Kessler also uncovered that this same Betty Barnes is linked to a number of corporations
including as a Director of New Mount Zion Missionary Baptist Church of Ft Pierce, Inc.
the institution which is noted above as collecting bids for the City. Toby Philpart is
listed as the Registered Agent and a Director of the New Mount Zion Missionary Baptist
Church of Ft Pierce, Inc. as well as the Registered Agent and President of Sunrise City
Community Housing Development Organization, Inc.
Anonymous Complaints
Kessler has received a tip on our website, an anonymous method
individuals can use to report allegations of fraud, waste, and mismanagement. The
details of the anonymous tip states,
I am letting you know for you to look into the Home Again Program. I believe
the city built 12 homes during this time and there was one certain contractor that I
believe he received probably 95% of the bids. This was a contractor that during
this time was very close to the Assistance Director of the department, went and
got his contractors license. This contractor was the one that got all the bids at
Oaks Creek too. Which was very fishy. You also need to look into the
Weatherization Program. The funding was for Weatherization and they used the
money for other purposes, rehabs etc.
Based upon accusations made in this tip, Kessler conducted limited review outside the
scope of the audit.
Kessler found that three contractors were chosen to construct the twelve homes as part of
the REACH Program, and that a contractor did not receive "95% of the bids".
Superficially, Kessler did not note any legal connection between the Assistant Director of
the CSD and any construction company who has conducted work at the Oaks.
Kessler did however document that the Weatherization Program was used to provide
questionable expenditures.
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INTERNATIONAL
Applications
During Kessler's review and analysis of the case files for the CSD, Kessler found many
irregularities with the applications filed with the CSD. Kessler had been advised that
applicants must fill out the application completely and provide all requested
documentation before an application is accepted. This rule is clearly not being followed
by the CSD, as Kessler saw that many of the applications are incomplete and 1 or are
missing supporting documents. Kessler was also informed during interviews that many
applicants who are considered illiterate or can't write clearly have the application
completed or rewritten by employees of the CSD. Many of the REACH Programs
applicants (including the three family members who each received a residence in the
Oak's at Moore Creek) all had their application filled out by the same staff member at the
CSD and the original applications are not maintained in the file.
Additionally, Kessler has discovered that many of the program guidelines indicate that
Income Tax Returns be provided to document the income as reported by the applicants.
During the review of the case files Kessler noted that none of the case files included
Income Tax Returns for the applicants.
Coastal Group Investments, Inc. - CSD Employee Corporation
This for profit corporation was formed on 2/19/2004 and was dissolved on 9/1612005 for
failure to file an administrative report with the Florida Department of State. The
corporation's Registered Agent and President is listed as Sheppard Sylvester. The
company filing also lists two Vice Presidents. One is a former CSD employee who
received funding for a mortgage from the City and the other islwas her husband who was
paid as a handyman listed on one of the examples listed below.
This corporation purchased property for cash located at 108 N 38
th
Street Fort Pierce, FL
on 212712004 for $54,000 and sold the same property approximately six months later on
8/17/2004 for $ 73,000 (a profit of$19,000).
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KESSLER
INTANATIONAt-
It should be noted that there are two Warranty Deeds on file with the Clerk of the Circuit
Court for the property sold by Coastal Group Investments, Inc. with different addresses
but both have the same Parcel ID Number and the legal description indicates them to be
the same property.
The first sale that occurred on 2/27/2004 was recorded with the Clerk of the Circuit Court
on the same date. The sale was from Vernon M. Dixon and Gertrude B. Dixon to Coastal
Group Investments, Inc.
The property was subsequently transferred via a Warranty Deed from Coastal Group
Investments, Inc. on 8/17/2004, transferring ownership to Lawrence Sparkman and
Cherry Osbourne Sparkman and lists the property address as 1705 North 43
rd
Street, Fort
Pierce, FL. This Deed was recorded with the Clerk of the Circuit Court on August 20,
2004.
A second Warranty Deed was filed, executed and notarized on the same date (811712004)
but was only recorded with the Clerk of the Circuit Court on 9/23/2004. It is unclear how
two Warranty Deeds both executed on the same date could contain different property
addresses.
Additionally, Kessler has learned that in 1999 Vernon Dixon Sr. of Fort Pierce, the owner
of Dixon Harvesting, pleaded guilty to one count of scheming to defraud in Palm Beach
County Circuit Court. Dixon was sentenced by Judge Barry M. Cohen to one year of
house arrest followed by 10 years probation. His bookkeeper Barbara Hall, 29, of Port St.
Lucie, also entered a plea to scheming to defraud and was sentenced to five years
probation and 250 hours of community service.
Coastal Home Inspection
This fictitious business name was formed on 317/2001 and expired on 12/31/2006
according to the Florida Department of State database. The owner of the business is/was
the husband of the former CSD employee noted in Costal Group Investments, Inc.
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Code of Ethics
Kessler reviewed the Code of Ethics for Public Officers and Employees document that
was produced by the City. Within the document it states,
If any public officer or employee, of the City is an officer, director, partner,
proprietor, associate, or agent of, or owns a material interest in any business entity
which is granted a privilege to operate in this state, he shall file a sworn statement
disclosing such facts no later than 45 days after becoming an officer or employee
or after the acquisition of such position or material interest. He shall file a sworn
statement with the employee Personnel Director and Clerk of the Circuit Court of
the county in which he is principally employed.
During the course of Kessler's audit it was noted that many employees of the City are
affiliated with outside corporations, apparently unbeknownst to the City. Kessler has also
documented that in some instances corporations have received grants, and City
employees were affiliated with these corporations.
Disbursements from other Funds
During the review of the General Ledger Kessler noted many disbursements, some of
which exceed $100,000 over a four year period were paid to entities that were listed as
inactive with the Florida Department of State for over 20 years and have connections to
individuals associated with the City. A complete investigation of these disbursements
should be conducted.
E-Mails
Kessler conducted a limited review of the e-mails provided by the City for the period of
late November 2008 through December 4,2009.
One e-mail indicated that contractors for the REACH Program are still unpaid, almost
three months after the closings on the twelve properties. The reason why these
contractors were unpaid is indicated as a "retainage fee" which would be released if the
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KESSLER
INTERNATfONAt:
correct procedures had been followed. The e-mail continues to state that, "We did not
issue the title insurance policies for those 8 properties since the policy would except to
the contractor's filing a Claim of Lien within one year of the Notice of Commencement.
Since the Notice of Commencement was recorded on 12/23/09, I believe that the most
prudent course of action at this point would be to wait until the 23
rd
of this month to issue
those polices as the contractor's right to file a claim would be extinguished." Additional
correspondence indicated that, "they (two contractors) were not aware of the procedures
they need to follow to have the retainage fee released."
Another e-mail states that a contractor for the REACH Program failed to pay two
subcontractors in the amount of $1 0,000.
Kessler observed an e-mail from an individual in a management position within the City.
The e-mail reprimands the Finance Department and CSD, stating, "We have a department
that apparently lacks oversight, has had demonstrated poor judgment on a wide variety of
issues involving the use of taxpayer dollars in the recent past." The e-mail continues to
state that, "the football team that our (City Employee) oversees in his private life was the
recipient of the largest share" referencing disbursements of funds. Additionally the e-
mail states, "All in all, this is a horrible example of transparence in the spending of public
funds. Too many City employees were at the public trough well before the public even
knew there was a public trough."
An e-mail from a CSD employee responding to a HUD official states that she is shocked
by a letter criticizing the discrepancies a HUD official found with CDBG funding, which
the HUD official indicates were never addressed.
Kessler observed another e-mail which requests the resume for an individual on a Friday,
and states that a City position was going to be advertised on Tuesday through Friday of
the next week. This individual who provided the resume is now a temporary employee of
the City. This individual also received funding which is outlined in one of the examples
listed in this report.
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Florida Housing Finance Corporation- Inspector General
Kessler inquired with the Florida Housing Finance Corporation on certain questions
regarding the issuance of funds from the CSD. A question that was posed to the
Inspector General of the Florida Housing Finance Corporation was, "If a deposit is
provided to the landlord and returned at the end of the lease does it go back to the
program?" The Inspector General stated that the funds should be provided back to the
program. Kessler has found that in many instances there is no documentation located
within the file that tracks these funds after they are issued, and as a result these funds are
unaccounted for.
Letters to Contractors
On 12/15/2009, Kessler issued letters via FedEx to eleven contractors requesting copies
of all bids, change orders and invoices submitted to the City for various years be supplied
as third party verifications during the audit. As of the date of this report, only one
contractor, S & V American Contractors, Inc. has complied. This contractor was
awarded a bid to construct four homes for the REACH Program. Based upon the
submission of documents Kessler has determined that $588,000 was the total cost of the
contract to construct four homes, and the amount disbursed to this contractor for the work
conducted was $601,665.06. Kessler has documentation stating that a change order was
submitted on 8/12/2009 by S & V American Contractors, Inc. in the amount of $7,115, it
has been determined that $6,550.06 had been disbursed to the contractor and has been
determined to be an irreconcilable difference. The requests have simply been ignored by
the other contractors.
PNC Bank flk/a National City Bank flk/a Harbor Federal Savings Bank
During Kessler's review of over fifty case files, it was noted that in many instances a
single lending institution appears to be the primary mortgage holder on many of the
properties. National City Bank f/k/a Harbor Federal Savings Bank appears as the lender
on a high number of mortgages. It should be noted that the former Assistant Manager of
the Bank is the daughter of the Director of Finance for the City. This individual was also
33

KESSLER

awarded funds from the Down Payment Assistance Program as seen below in Case #46.
A copy of the lending institutions included in the St. Lucie County Lending Consortium
is attached as Exhibit 4. It should be noted that during Kessler's review only a select
number of cases contained other lending institutions as the primary mortgage holder.
Rehabilitation and Reconstruction Projects
Based upon Kessler's review of the work performed relative to the rehabilitation projects,
it has been determined that the work conducted appears to be more of a remodeling
program instead of a rehabilitation projects. Such expenses that were incurred include
granite kitchen countertops, a screened in porch, a patio where no patio existed
previously, cast aluminum customized address plaque, a new lawn lamp, a vanity with a
cultured marble top basin and a new concrete driveway.
Additionally, many of the Rehabilitation Projects that were reviewed by Kessler have
exceeded the amount of maximum award set forth the by the CSD. Kessler has also
reviewed cases that have exceeded the threshold that the amount expended on a project
cannot exceed 50% of the assessed value ofthe project.
The Ship Foundation, Inc.
During the course of the audit Kessler noted in the General Ledger sizable disbursements
amounting to $28,765 during the years 2004 through 2006 to the organization named
above. In so much as this foundation carries the same name (SHIP) as the awards being
made by CSD, it was further investigated.
A search was done of the Florida Secretary of State and it was determined that a City
Purchasing Department employee was the Registered Agent and Treasurer of the entity
using an address of 1306 Avenue E, Fort Pierce. The corporation was formed on
1012212002 and is currently inactive as it was administratively dissolved for failure to file
an annual report. The Secretary of State also lists that the entity was previously dissolved
on two separate occasions for failure to file the 2004 and 2006 returns.
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INTERNATIONAl..
A search was conducted of GuideStar which is a service that lists all not for profit
corporations, infonnation about the entity and their Federal Tax Returns (990's). It was
disclosed that The Ship Foundation, Inc. never filed a Federal Tax Return delineating
how it received and spent its funds for the life of the corporation.
A telephone call was placed to the City Employee who was listed as the Registered Agent
and Treasurer and the status of the corporation was discussed. The employee infonned
Kessler that the corporation was a not for profit corporation, and she was listed as the
Registered Agent and Treasurer since she was the person who secured the monies from
the City. She stated "the money was there." She further stated that the organization was
run by the Friendship Missionary Baptist Church for an after school day care and summer
day camp. She related that she used to be a member of the Church and that it is her
understanding the financial records of the entity were discarded. She suggested in a
progressively agitated tone that Kessler contact the Church for further infonnation.
Kessler was then transferred to her supervisor, the Purchasing Director who wanted to
know how he could help. He confinned the entity was run by the Friendship Missionary
Baptist Church, that it was inactive entity and that the City employee was the Registered
Agent. He stated that his knowledge came with his affiliation of another Baptist Church.
He also infonned Kessler that the City employee was upset with the questions being
asked of her as she had no idea why this entity should be looked at during the audit.
A chart of the total disbursements to The SHIP Foundation, Inc. and the account the
disbursement was drawn from are provided below.
Check
Date Account # Account Description Payable To Amount #
12{15/2004 1'Q3 9004 554 83 66 The Sh, Feundatfon
' I"'
The Shl F0undatfon .,.. $1 OSO 00 195306 .
12/2112004 103-9004-554.83-66 The Ship Foundation The Ship Foundation $76:u4 195367
1/13/2005 1 Mt Olive Program The ShiP Foundati0n $6Z6.64
195824
1
,
35
KESSLER

Eclucation
1J2}f2OD5 103-9004-554.8,3-66 The Ship:foWl,dation The Ship'"Foundation 196092
2116/20-05 103-90040-554.83-66 The Ship Foundation The Ship Foundation $456.06 196'527
3/10/2005 The 'Ship ,foundation The Ship Foundation $3194.50 196933
3/281,2006. 103-9004-554.83..s6 The Ship Foundation The Ship Foundation
I
$145.54 197202
5f9/20f)S 1 The The Shic F.ouQdation 1789.24 197989
'8/11/2005 104-9400-554.83-40 Other Grants & Aids The Srnp Foundation $10,Ooo.0@ 199814
8125/2005 The Sl'dc foundation The 'Shic . EoundatiOO $1 ,100.00 198723
10112/2009 103-9004-554.83-66 The Ship Foundation The Ship Foundation
I
$135.32 200871
5/18/2006 1 'The SJJiD Foundation The ,Sbip.FOundation $4.178.72 2OS226
7/13/2006 103-9004-554.83..s6 The Ship Foundation The Ship Foundation $1,703.84 206'821
9/22/2006 103-9004-5M::S3-:66 The ,'Shic Foundation The SoiD Foundation $.4.'832.44 207636
10113/2006 103-9004-554.83-66 The Ship Foundation The Ship Foundation -$450.00
TotaJ 528765.00
Kessler subsequently determined that the City's Purchasing Director is a Director of the
Mount Olive Missionary Baptist Church of Fort Pierce, Inc. along with an applicant of
the REACH Program whose family each purchased a house at The Oaks. Attached as
Exhibit 5 is a table indicating disbursements to Mount Olive Program Education.
Recipients of Funding with Connections to City Employees
During Kessler's audit of the case files and supporting documentation, it has been
determined that of the 52 cases audited, 17% of the cases involved either City employees
or relatives of City employees that Kessler could readily identify.
Rehab Specialists
The job requirements for a Rehab Specialist were provided to Kessler. The review of
these requirements detailed that an in-depth knowledge of the construction industry was
required to be eligible for the position including: three years experience in the
construction industry, Lead Abatement and Risk Assessors training to obtain EPA
certifications and must be able to achieve a building, plumbing and mechanical
certification within a twenty-four month period. Kessler found that the current Rehab
Specialist could not produce documentation indicating that he meets these guidelines.
Furthermore, he informed Kessler that he uses the Home Depot catalog as the basis for
formulating estimates. Kessler recommends that additional requirements be added to this
job position including becoming a licensed building inspector, as much of the work
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KESSLER
INTERNATIONAL
conducted by the Rehab Specialist includes rehabilitation projects that need the dwelling
brought up to code.
Temporary Employees
During our interview process Kessler was advised that a questionable practice occurs in
the selection of temporary employees Citywide. The process was described as,
prospective employees would provide a resume to a City employee, and if this
prospective employee was deemed qualified for the position then the prospective
employee would be told to contact a temporary service agency. The City would then
request a position be filled from that agency and the prospective employee would be
awarded the position. Kessler has also verified that temporary employees were hired
during the summer of 2005 using a FEMA grant. One of these temporary employees was
a daughter of a City Purchasing Department employee. Kessler was further informed that
these summer temporary employees did little or no work but got paid.
Wife of CSD Employee
According to the General Ledger the wife of a CSD employee was awarded $4,800.00 on
7128/2006 payable to Johnny Thomas Tree Service for disaster recovery. It is unclear
which disaster the grant applies to.
Women with Words, Inc.
During the course of the audit it has come to Kessler's attention that funds from the City
were awarded to the above name corporation. This not for profit corporation was formed
on 1/09/2004 and is currently active. The registered agent and vice president listed with
Florida Dept of State is the Assistant Director of the CSD and the President is listed as a
former CSD employee. Additionally the treasurer is listed as Nerssia Martin.
A search was conducted of GuideStar which is a service that lists all not for profit
corporations, information about the entity and their Federal Tax Returns (990's). It was
disclosed that Women with Words, Inc. never filed a Federal Tax Return delineating how
it received and spent its funds for the life of the corporation.
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INTeRNATIONAL-
It should also be noted that the Assistant Director of the CSD is also the President of
another corporation, the Florida Community Development Association, Inc. an active not
for profit corporation formed on 7/26/1979. According to the website of the Florida
Community Development Association, Inc., the objectives of this association are listed
below:
1. To hold training workshops on regulatory and programmatic issues at locations
around the state for all community development and economic development
practitioners;
2. To help identify common problems, seek solutions, and plan for an Annual
Meeting where members can share, discuss and benefit from their experiences;
3. To act as a clearinghouse for the many questions posed by HUD and the CDBG
program officials at the local level throughout the years;
4. To alert community development and economic development professionals to
important program changes, funding deadlines and emerging resources;
5. To develop professionalism among individuals responsible for implementing
programs by providing a forum for the exchange of ideas, facilitating cooperation
on common issues, offering guidance and assistance to members, and acting as a
liaison with other agencies and groups.
Attached as Exhibit 6 is a copy of the Florida Community Development Association, Inc.
brochure, which was available from the website.
Yearly Audits
Kessler has been provided with a previous audit report relative to the CSD, conducted by
the Florida Housing Coalition. The Florida Housing Coalition audit report mainly
indicates specific areas of the policy and procedures that need to be corrected or
amended. While Kessler agrees with the findings of the Florida Housing Coalition, it
does not appear that a review of specific case files was conducted. With all of the
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KESSLER
INTERNATIONAL
discrepancies that have been found during Kessler's review of these cases, it is unclear
why this previous audit report did not outline any discrepancies as noted in this report.
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REVIEW / ANALYSIS OF CASES
Case #1 - Down Payment Assistance Program - HHR / SHIP
Income Bracket I Very Low I
This individual received a first mortgage from Harbor Federal Savings Bank for $86,800
with repayment over a period of thirty years. The individual also received a Florida
Housing Finance Corporation mortgage for $14,999, satisfied over a period of fifty years,
if the applicant remains a resident of the property.
Various Mortgages and Notes all applicable to the HHR Program dated 3/16/2007 were
contained in the file but signed by the borrower on different dates. One Down Payment
Assistance Note which is signed indicates a thirty year mortgage and a principal amount
of $40,000 with 0% interest commencing 3/15/2008. A second Down Payment
Assistance Note which is signed maintains the same terms with conflicting information.
On one section of the Note, the Mortgage is to commence on 3/1612007, and in another
section it is to commence 3/15/2009. A third Down Payment Assistance Note indicates
the borrower promises to repay $40,000 in principal but in the payment terms the
principal amount is listed as $9,000 at 0% interest commencing 6/15/2007. A Mortgage
which is signed and notarized on 3/17/2007 also indicates a $40,000 loan at 0% interest
for a thirty year term. The Mortgage which was filed with the County containing
signatures which were notarized on 3/16/2007 indicates a $40,000 note with requirement
to repay $9,000 over a period of thirty years at 0% interest. The remaining $31,000 shall
be exonerated with the repayment of the principal and interest in the amount of $9,000.
What is even more suspicious is that the notarized Mortgage dated 3/17/2007 is drafted
I The Mortgage Note filed with the Clerk of the Circuit Court stated that the individual was to pay monthly
payments of $25 (repayment of $9k) deferred for 3 months until 6115/2007.
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on a form dated 1124/2008. There is no explanation in the file to identify why such
drastic discrepancies exist in the various documents.
On 5/23/2006 an award letter was sent by CSD which stated that the individual could
only receive a maximum down payment assistance of $10,000 from the SHIP Program.
A second letter was written on 3/2/2007 stating the individual had qualified to receive up
to $15,000 through the SHIP Program and the individual received $15,000 on 3/16/2007.
Maintained in the case file were two Down Payment Assistance Mortgages and one
Down Payment Assistance note relative to this applicant's award from the SHIP
Program, all dated 3/16/2007. One Mortgage document notarized on 3/16/2007 by Elaine
Redden and filed with the Clerk of the Circuit Court indicates the borrower received
$15,000 and must reside on the property for fifteen years. A second Mortgage document
is notarized and stamped on 3/16/2007, "This is a true and certified copy of the original
instrument which has been executed as indicated. St. Lucie Title Service, Inc. by Elaine
Redden" indicates a mortgage of $40,000 for a period of fifteen years.
The application for funding filed with the City clearly states that the individual was
required to provide $500 at closing. The HUD Settlement Statement indicates that he
only provided $100. Again no explanation is provided in the file for the discrepancy.
On 1126/2009 a notice was filed stating the lender is seeking action of foreclosure on the
borrower. There is no documentation contained within the case file that relays the
conclusion, but it does not appear that the City has contacted the applicant regarding the
default.
41

KESSLER
INTfRNATlONAe
Case #2 - Down Payment Assistance - HHR / SHIP
I Income Bracket I Moderate I
On 11/9/2006 a first mortgage was secured for $182,000 from Harbor Federal Savings
Bank to purchase a home valued at $209,990. Another mortgage issued from the City
from the HHR Program provided an additional $30,000 at 0% interest over a period of
thirty years. The loan was deferred eleven months until the first payment was due on
10/15/2007. Additionally, a deferred mortgage and note from the SHIP Program
provided $6,000, which stipulated the mortgage be satisfied after a period of six years
and would be forgiven if the residents did not rent or sell the property before that time.
These individuals were classified as having a "moderate" income level (the highest
income level that is provided assistance), and received a 0% interest loan. The CSD has
the power to mandate an interest level up to 5%. There is no documentation in the file
indicating how the determination was made to provide these individuals with a 0%
interest loan.
Contained in the file is a document labeled Exhibit A, "Investor Addendum" signed by
the borrowers on 10/2/2006 indicating that Lot A136 of Ben & Creek Estates would not
be used as a primary residence. Also contained in the file is a ''Non-Investor Addendum"
also signed by the borrowers, one signature of which is undated, and the other dated
10/2/2006.
Additionally, the HUD Settlement Statement indicates that the individuals received $669
back after closing on a home that was 100% financed.
42

KESSLER
INTERNATIONAl-
Case #3 - Rehabilitation Program - SHIP
I Income Bracket I Very Low I
This individual obtained a deferred mortgage in the amount of $19,000 from the SHIP
Program on 5/19/2006 for rehabilitation of their residence. The terms of the mortgage
state it shall depreciate over a period of six years, and would be forgiven if the resident
did not rent or sell the property before that time. The individual also obtained an
additional mortgage from the SHIP Program on 11/20/2006 in the amount of $6,194
depreciating over five years, for what appears to be financing of a change order. This
mortgage would be forgiven if the resident did not rent or sell the property before that
time.
The total charges incurred as a result of the rehabilitation were $38,609. The original bid
from Innovative Construction was $19,000. At the end of the job, a change order was
submitted on 10/2/2006 and approved for an additional $11,000. Inexplicably, on
11/20/2006 the second mortgage was obtained for $6,194. What is even more
questionable is that the original bid varied so dramatically from the rest of the bids, and
Kessler found much of the change order pricing of the winning bid had been redacted
with correctional fluid and altered. Additionally the bid from the City's Purchasing
Department website states a $400 difference between the mortgage amount and the bid.
43

KESSLER
INTEANATKlNAl
Vendor Total
Inne;vative @onstrl!lction $19,400
M. R Browh Constrllctic:m $19900
JaQPSOIil G0f1S_tliu.Gti0n
Terrc;lrnar Canstruetion, Inc. (Alternative) $37, 100
Bueno CDnstrouctien $'5I4,6S0
Tetrarnar ons!ruclion. Inc. $85,800
On the applicant's request for funding, it lists accumulated assets are less than $5,000,
but the amount shown on his savings account and certificates of deposit statements are
$21,308.56.
Additionally, an individual who is closely linked to the subject received $3,400 for rental
assistance between 7/6/2006 and 9129/2006. This individual was also named on the
subject's power of attorney form submitted to the City. This was a questionable practice
and there is no indication in the file that the individual stayed at the linked individual's
residence.
Kessler noted in the General Ledger of the City that on 3/912007 a check was issued to A.
Thomas Construction in the amount of $3,850 on behalf of this individual. The funds
were disbursed from the account labeled Disaster Charges, but no documentation is
contained in the file concerning this disbursement.
44

KESSLER

Case #4 - Rehabilitation Program - HHR
Income Bracket I Moderate I
This applicant is a City employee. In this case, the original 0% interest mortgage for
rehabilitation was filed on 3/17/2006 in the amount of $13,480 which had to be paid in
full over a period of thirty years, but was reported as satisfied as of 1125/2007. The first
payment was due on 8/17/2006. An amended deferred mortgage dated 3/1712006 was
filed on 1124/2007, notarized by Tysha Williams which conveniently left the date off the
notarization language. Attached to this document is a Housing Rehabilitation Agreement
which is signed and dated 12120/2006. This mortgage, in the amount of $16,380 states
the terms as a deferred mortgage, depreciated over a ten year period, if the individual
remains a resident of the property. It has come to Kessler's attention that beginning on
3/13/2009 through payroll deductions, this applicant began making payments.
Additionally, $8,956.35 in expenditures were not included in the mortgages which
accounts for the cost of the title search, moving, storage and rental assistance paid to the
Days Inn Midtown and Denise Mills.
During Kessler's review of the case file Kessler noted that the bid submitted by "M.B.
Brown Construction Co., Inc." was dated 212312006 and a change order for $2,900 from
"Brown Construction" was dated 7124/2006 and signed by Mason B. Brown, Jr. on
8/912006. Based upon discussions with employees of the CSD, Kessler was informed that
protocol for change orders is that they are reviewed and approved by employees within
the CSD. There is no documentation in the file indicating that the change order was ever
approved by CSD. A schedule of disbursements relative to this project is presented
below.
45

KESSLER

Another discrepancy noted during Kessler's review related to work included in the
change order, which calls for knockdown texturing to be applied throughout the house
ceilings and walls ($1,000) and to remove tile from bathroom wall, repair structure
behind tile ($1,900). This work to be completed appears to be double billing of items on
the bid (which includes painting of the walls and ceilings and replacement of the tiles in
the bathroom).
Additionally on 7127/2006 Arnoff Moving submitted an invoice for the unloading and
placement of furniture in the residence ($540). It is unclear why a change order would be
submitted to conduct work (knockdown texturing) after the furniture has been moved
back into the residence.
46

KESSLER
IN1"RNATJONAl
Case #5 - Re-Entry Program - HHR
Income Bracket I Moderate I
On the application for this individual $10,000 is listed as yearly gross income for this
household which had been changed from $16,000. On the Verification of Employment
form for two household members income is reported by the employer to total $36,400.
Additionally, a third household member listed on the original application was redacted
from the Florida Housing Finance Agency's Income Certification-Homeowner form, and
none of the member's income or assets was included when calculating income.
On many of the documents the individual's name has been spelled incorrectly and the
first and surnames are juxtaposed by employees of the CSD. The applicant received
$2,000 payable to the landlord on 712812006 (check #206497).
47

KESSLER
INTERNATIONAL-
Case #6 - Re-Entry Assistance Program - HHR
Income Bracket Low
On two occasions within six months the applicant received funds from the Re-Entry
Assistance Program. The initial assistance occurred on 111312006 in the amount of $850
(check #202537), made payable to the borrower and a different individual (to be called
Individual X). The borrower had to endorse the check before it could be given to the
"landlord" for first month rent and security deposit. The individual who was named on
the lease agreement as the landlord was "Brother Murphy", no address was provided for
this individual and it does not coincide with the individual who is named on the general
ledger (Individual X). It should be noted that the file did include a statement citing that
the property contained lead based paint, prior to the issuance of the housing assistance
check, and subsequently the apartments were demolished by the City.
The second Re-Entry Assistance Program payment occurred on 61112006 in the amount
of $1,500 (check #205447) made payable to a landlord. The assistance was to provide a
security deposit and also first and last month's rent. We have been advised that for an
individual to receive assistance from the same program within a period of three years, is a
violation of the rules and regulations.
Nowhere in any documents contained in the file does it show that the security deposit or
the last payment was remitted back to the city. Additionally, Kessler's review of the
documents indicate that many of the signatures of the applicant, notarized by CSD
employee, do not even appear to match the signature contained on the Department of
Motor Vehicle's Identification Card contained in the file.
48

KESSLER
IN'TB\NATIONAr
Foreclosure Prevention - HHR
Hazard Prevention - HHR
Income Bracket I Very Low I
During Kessler's review of the applicant's file who is a relative of a CSD employee, it
was noted that a mortgage dated 12/20/2005 which was filed on 3/21/2006 was issued for
work performed with the hazard mitigation program in the amount of $3,175.62. The
note states that the mortgage shall be satisfied after a period one year and one day. A
Satisfaction of Mortgage document was filed on 6/27/2008. Kessler cannot comment on
this transaction in any further detail since the file was not made available.
Then on 3/31/2006 another mortgage was filed for an applicant who had received SHIP
Rehabilitation Program funds in the amount of $42,800. The mortgage lists
contradictorily that it would be forgiven in two separate fashions. The worded section of
the mortgage is listed as being forgiven after one year and the numerical section states
that the debt will be satisfied after thirty years and one day. This mortgage was reported
satisfied with the county on 6/27/2008. An amended mortgage was filed on 1/24/2007
with the Clerk of the Circuit Court, for $42,800. The terms of the note stated that the
mortgage shall depreciate over a period fifteen years and one day if the resident did not
rent or sell the property before that time. No explanation is provided in the files for these
unusual occurrences.
Kessler's review of the documents indicates the total amount spent on the rehabilitation
of this individual's home is $51,196. The mortgage amount of $42,800 only includes the
disbursements to the contractor M.B. Brown Construction Co, Inc. Additional costs of
$8,396 were incurred include moving, storage and rental assistance during construction.
During the construction, the individual was relocated to the Sandhurst Hotel at a cost of
$5,577. The work to be performed includes a cast aluminum customized address plaque,
a new lawn lamp and pole and a vanity with a cultured marble top basin.
49

KESSLER
INTFANATIONAl
On 8/6/2008 a check was made payable by the City to National City Bank for $5,000 to
aid in foreclosure prevention of this property. Kessler was informed that as of 8/15/2008
a letter from a bank stated that $2,260.14 needed to be paid by July 1, 2008. On the
8/6/2008 check a notation was noted as past due as $2,974.81. It is unclear why the city
would pay $2,025.19 above what is needed to bring the mortgage current, and is not
explained in the file.
50

KESSLER
INTERNATIONAL"
Income Bracket Low
The mortgage dated 3/2112008 and filed on 3/28/2008 with the Clerk of the Circuit Court
does not document an amount, while a draft mortgage in the case file shows the amount
of $48,611.38 (depreciating over fifteen years) which is the exact amount that of the J.B.
Florida Contractors bid.
The total expenditures for this project were $65,162.26 during the rehabilitation of this
home. While reviewing the file Kessler noted a red flag in that the final inspection was
completed on 7/28/2008, and on the same date a request for the final payment in the
amount of $8,517.76 (check #220667) was submitted by J.B. Florida Contractors. On
9/4/2008 an invoice was submitted for items not detailed in the original bid for an
additional $2,475 for "remove 3 existing windows and install e-gress windows".
Account Check
Date Account # Description Payable To Amount #
Miscellalilelus
711112007 1 Universal Land $7'5.<:1'0 21i3326
Associated Consulting
10127/2007 1 0 ,Rehab Gra_llls Professionals Inc. $275.00 214978
4l6t:.l/2008 . 105-9507-554.83-10 Rehab Gfants J.Q, FIef-iDa Contractors $21874.95 21it43a
411712008 1 0&.-9507 10 . Rehab Grants Florida 'Contractors $19444.55 218157
973/2-')08 103--9002-554.83-10 Rehab Grants J.B. Florida Contractors $8517.76" 2:-20667
10J1/20-08 1 10 Rehab Grants J.B. Florida contractors $2.475.00 221231
5/1'37200& 105-9507-554.83-10 Rehab Grants J.B. Flerida; Contractors $12,500.00 2.18681
Total SI5.162.26
A letter signed by the borrower's spouse states that the borrower and herself are married,
but do not reside at the same address. Yet on the mortgage and deed, it includes the name
of both individuals. Additionally, it is suspicious that no moving or storage charges were
incurred when a complete reconstruction of the roofwas conducted.

51
KESSLER
INTERNATIONAe
Case #9 - Eviction Program - HHR
In a 10/5/2005 letter from the landlord it states that this individual is past due on her
rental payment in the amount of $509.18. A check was issued to the landlord in the
amount of$1,509 (check #201726) on 12/9/2005 by the CSD.
This grant should have never been awarded since the file was incomplete because a copy
of the social security card is required according the CSD guidelines. Kessler found that
on 12/9/2005 a letter in the file from the Social Security Administration states that a
roommate of the borrower had requested a copy of his social security card and would
take two to four weeks to receive a new copy of the social security card.
52

KESSLER
INTERNAnONAl-
On 511312008 the borrowers received two mortgages one from the SHIP Program and the
other from the HHR Program. The HHR Program mortgage was recorded for $40,000
with interest at 0% and repayment over a period of thirty years. The terms of the HHR
mortgage state that the first payment is to commence on 5/1512011 in the amount of
$123.35. The SHIP Program mortgage was for $15,000 and depreciates over a period of
fifteen years.
The purchase price of the home was $156,700. A first mortgage in the amount of
$101,700 was secured from National City Bank f/k/a Harbor Federal Savings Bank, in
spite of the fact that a Prequalification document in the file indicates that the applicant's
mortgage borrowing potential was only $82,000.
Two of the three applicants live in the residence. The third individual who does not live
in the residence, is handwritten into the two City Mortgage filings and does not have any
income listed on the grant calculation sheets. The other two applicants do not show any
employment income and the only income shown is from SSI. The alleged combined
income for all three individuals is $20,004. There is nothing in the file indicating that in
order for the applicant to qualify for the first mortgage the City mortgage had to be
deferred for three years, it is unclear why this deferment occurred.
2 The tenns of the HHR mortgage state that the first payment is to commence on 5115/2011 in the amount
of$123.35.
53

KESSLER
INTERNATIONAL-
Case #11 - Down Payment Assistance - SHIP 1 HHR
I Income Bracket Low
The individual purchased a home for $199,559 on 1112712006. A first mortgage was
secured for $119,400 from Harbor Federal Savings Bank, which was sold to US Bank
NA on 1117/2007. This mortgage had the borrowers named as husband and wife. An
additional subordinate 50 year deferred mortgage was also secured on 11127/2006 from
Florida Housing Finance Corporation for $24,659 in both names.
Also on 11/2712006 two additional City mortgages, one in the amount of $40,000 was
obtained only under the husband's name from the HHR Program. The note states that
only $9,000 of the $40,000 is to be repaid at 0% interest over thirty years. The remaining
$31,000 shall be exonerated upon repayment of the principal and interest of the $9,000.
The note also states that the first payment will commence on 5/15/2009 at $25 per month.
A second City mortgage from the SHIP Program also provided $15,000 for down
payment assistance only under the husband's name. The terms state that this deferred
mortgage will be satisfied after a period of fifteen years, if the resident does not sell or
rent the property.
Almost a year after the husband received down payment assistance from the City he
received foreclosure assistance from the HHR Program in the amount of $5,500, since on
12/4/2007 a notice was filed stating that US Bank NA was seeking to foreclose the
3 The note states that only $9,000 of the $40,000 is to be repaid at 0% interest over thirty years. The note
also states that the first payment will commence on 511 5/2009 at $25 per month.
54

KESSLfR
INl'ERNAnONAL
4
property. On 1115/2008 that notice was dismissed as a result of the assistance from the
City.
The wife of the borrower appears to work for the City, but her income is not on the
application for down payment assistance. Kessler's review has determined that her name
is on the deed, mortgage and notes filed with the Clerk of the Circuit Court. This calls
into question whether the applicant would have qualified for down payment assistance if
the spouse's income was included in the calculation oftotal household income.
55

KESSlfR

I Income Bracket I Verx Low I
This couple purchased property on 3/31/2006. Their annual gross income is listed as
$17,345.76. The sale price of the property was $86,500. A first mortgage was secured
from Harbor Federal Savings Bank in the amount of $39,500. The SHIP Program
provided $10,000 and the HHR Program provided $40,000 in additional funding. An
additional mortgage in the amount of $1,500 was provided from Federal Home Loan
Bank of Atlanta ("FHLB ").
The SHIP mortgage of$10,000 depreciates over a period often years if the owners reside
full time on the property. Assistance provided by the HHR Program ($40,000) follows
the same guidelines as the SHIP Program, but the property owners must reside on the
property for forty years. The FHLB loan for $1,500 was to be satisfied by the continuous
residency and ownership of the property for five years.
The City of Fort Pierce Hurricane Housing Recovery Program Down Payment Assistance
Note contains conflicting information in regards to repayment and satisfaction terms. On
the note it is typewritten that the mortgage shall be satisfied over a period of thirty years.
In the deferral and/or forgiveness section, hand written notes indicate that the mortgage
cannot he sold or transferred within a forty year period. A clause in the note states, "In
determining the amount due to the Note Holder, the amount of the original loan shall be
reduced $1,000.00 for each anniversary of this agreement." Based upon the clause the
terms of the note should be forty years.
56

KESSLER
fNTEANATJONAt..
4
The borrower and her spouse purchased a home on 11110/2005 in the amount of
$160,000. A first mortgage was secured from Harbor Federal Savings Bank in the
amount of $110,000. SHIP provided down payment assistance of $10,000 and the HHR
Program provided $40,000. No application for the HHR or SHIP Program is maintained
in the file.
The terms of the SHIP Program mortgage indicate that the property owners must reside
on the property for a time period of ten years. The mortgage note from the HHR Program
is unlike any other case Kessler reviewed. The $40,000 provided is broken down into
three separate amortization schedules as follows: $5,000 shall be forgiven when principal
and interest payments have been made in full. $30,500 is amortized at 1 % interest over a
period of twenty - five years, first payment shall commence on 1115/2011 (five years
deferred) at a monthly payment of $114.95. The remaining $4,500, shall be paid in
monthly payments of $75 commencing on 1/15/2006 for a period of five years.
It is unclear why these applicants would receive a 1 % interest loan when so many others
in the same "Low" income category received a 0% interest loan. Additionally, many
people have had a portion of the HHR Programs funding be a deferred loan, satisfied by
the continuous occupancy of the residence.
57

KESSlfR
rN'TEANATIONAlO
Case #14 - Down Payment Assistance - HHR
I Income Bracket I Moderate I
This couple purchased a home for $180,000 on 3/2/2007. The couple had an annual
gross income of $50,084. The first mortgage on the home was provided by Harbor
Federal Savings Bank in the amount of $148,300. Down payment assistance was
provided by the HHR Program, in the amount of $30,000. The terms of the note state
that the loan is to be repaid over thirty years at 1 % interest. The first payment of the
mortgage was to occur on 8/15/2007 with a monthly payment of $96.49.
At the closing the couple received $1,629 cash back as a result of Harbor Federal Savings
Bank providing assistance with the closing costs. It is questionable why this was not
returned to the City.
58
Case #15 - Down Payment Assistance - SHIP
On 7/6/2007 a mortgage was secured from National City Bank f/kla Harbor Federal
Savings Bank in the amount of $65,300. The applicants list yearly income from wages
and public assistance of only $20,909.04. A second mortgage was secured from the
SHIP Down Payment Assistance program, which provided $14,690.61. The terms of the
note indicate that $1,000 would be forgiven every year if the property owners reside at
the property for a period of fifteen years. It should also be noted that the individual
received $750 cash back at the closing.
59

KESSLER

Case #16 - Replacement Assistance Program - HHR
I Income Bracket Extremely Low
This individual applied for the Replacement Assistance Program, and on 112912007 a
mortgage was issued in the amount of $104,527.63. The terms of the note indicate that
mortgage would be due in full after thirty years, if the property owner resides in the
property for a period of thirty years. The book and the page reference the property but
the legal description used on the satisfaction of mortgage is wrong. It is for a property
never owned by the applicant. On 11812008 this mortgage was satisfied by the City. The
reason for the satisfaction of the mortgage was due to the homeowner being placed in a
nursing home during the demolition. During her stay it was determined that she was unfit
to take care of herself, and would be best to remain in the nursing home. To our
knowledge, no construction has taken place on the property and it is currently an empty
lot.
To recuperate the cost of the demolition, an amended mortgage was placed on the
property on 118/2008 in the amount of $6,326.75. The terms of the note indicate,
"Borrower must reside full time on the property for a period of 5 years from the date of
Mortgage. Failure to comply with the requirements specified herein constitutes a default
by which the recapture provision requires that the City collect the remaining balance of
the loan at 0% interest". There is no home on the property in which one could reside,
accordingly this individual would be considered in defaulted of the mortgage, and the
amount of$6,326.75 should have been recovered by the City.
60

KESSLER
INTERNATIONAL-
Case #17 - Disaster Relief Home Assistance Program - Home Again
Replacement Assistance Program - HHR
This individual was approved for a mortgage from the Home Again Program and HHR
Programs on 4/4/2006. The HHR Program provided a mortgage through the City for
$75,000 and repayment over a period of thirty years. The mortgage was deferred five
months until 9/1/2006. The mortgage was calculated at 5% interest with a monthly
payment of $402.62. An additional mortgage was filed with the Florida Housing Finance
Corporation in the amount of $50,000. The terms of the note indicate that if the property
owner is a resident of the property for more than five years that the mortgage is forgiven.
This case file contains very little documentation reflecting the bid or the contract price of
the construction nor are there any copies of checks cut to the contractor. It appears that
three checks issued within a day of each other were payments for "2
nd
draw". It should
be noted that the City is the first mortgage holder on this property, however nothing in
the file indicates any actions by CSD to ensure that insurance and tax payments were
being made. Kessler has been informed by the City that taxes have not been paid on this
property since 2006.
61

KESSLfR

The total amount spent by the city is $131,862.67, including demolition costs, deposit for
utilities and rental assistance for the Savannah Palms apartments.
62

KESSlfR

Lending
Date Institution Type Amount Terms Interest
'$123/2007 Bank Uhitec;j Con.ventional $61 ,0<:10 4.0 yrs Unknown
3123/2007 HHR Conventional $40,000 30 yrs o ~
3/23/20(j7 SHIP Deferred $15,000 15:yrs N/A
This individual purchased a home for the price of $140,000 on 1/18/2008. A first
mortgage was secured in the amount of $90,600 from National City Bank. An additional
mortgage was secured from the HHR Program for $40,000. It is unclear what the actual
mortgage repayment terms are supposed to be based upon the file. An undated note
indicated repayment terms of $111.11 per month, to commence on 1/15/2008. This has
been crossed out and written as 1115/2010 with the initials SBK next to it. Included in
the package in the case file are also two unsigned notes, one with repayment terms
beginning on 1115/2008 and the other beginning on 4/15/2009. Additionally, there is an
instruction to the borrowers for payment indicating $111.11 is to be repaid monthly
beginning on 1115/2010. This is also unsigned. Kessler has been informed by the City
that this mortgage was not booked in the Finance Department.
A third mortgage was secured on the home from the SHIP Program for $15,000. The
terms indicate that the mortgage shall be forgiven if the property owners reside in the
property for a period of fifteen years. During the closing only $8,266.52 was provided
from the SHIP Program. No amended mortgage was ever filed with the Clerk of the
Circuit Court to reflect this difference. Further investigation is necessary concerning this
transaction. It is unclear why this family of five, classified as 'very low' income who has
also received $3,624, "4% Grant Assistance" during the closing, as per the HUD
Settlement Statement. It is unclear why the household would not have been provided
$15,000 in SHIP, with a reduction in the amount owed under the HHR Program as well
as a totally deferred mortgage.
63
~
KESSLER
INTERNATIONAL"
\ Income Bracket Low
On 12/29/2006 a check (#209582) was cut from the City for $2,000. This check was
issued to the seller from the housing re-entry account. No supporting documentation
could be produced by the CSD to support this issuance of funds.
The individual then purchased a home on 3/23/2007, for a purchase price of $113,000.
Two mortgages were secured from the City from the HHR and SHIP Programs. The
SHIP Program provided $15,000 towards the down payment of the property and
stipulates depreciation over a period of fifteen years if the property owner resides in the
dwelling. The HHR Program provided $40,000 to the individual and stated that only
$18,000 of the $40,000 must be repaid. The remaining $22,000 shall be forgiven when
principal and interest payments have been made in full. The terms of the mortgage state
that the first payment was to be received on 7/15/2007 in the amount of$50. Based upon
Kessler's review this appears to another example of a lack of any guidelines of making
awards.
On 8/26/2009 a notice was filed indicating that the first mortgage holder was seeking
foreclosure on the applicant. Additionally, on 11111/2009 the individual died. No
documentation is provided in the file indicating a resolution to the notice of foreclosure.
64

KESSLER
INl"ERNATlOfiAI:
On 10126/2007 this individual, a City employee, purchased a home for $110,000. A first
mortgage was secured by Washington Mutual for $80,000. The City provided funding
for an additional $30,000 from the HHR Program. The terms of the mortgage provided
by the City indicate that the applicant must repay $25,000 over a period of twenty-five
years. The first payment of$83.33 was deferred until 9/15/2012. The remaining $5,000
will be exonerated when repayment of the principal and interest is made in full. No
explanation was contained in the file as to how 2012 was selected to commence payment
of the loan.
Kessler's review of the case file disclosed that the HUD Settlement Statement filed on
10126/2007 shows the individual only received $28,858.75 from the SHIP Program for
closing, not the $30,000 denoted in the mortgage documents. The applicant paid
$7,661.38 from their own funds at closing.
On 10/312008 a letter was sent by a CSD employee erroneously indicating that $40,000
had been provided by the City from the HHR Program, when in fact only $28,858.75 had
been provided. The letter continues to state, "Please contact this office by October 10,
2009 at (772) 460-2200 ext.253 or 224 to make an appointment to complete your revised
plan or to verify that your payment is current. If no arrangements are made, the loan will
be considered in default." On 10/812008 an amended letter was sent to the individual
stating that only $30,000 had been provided by the City and that if not contacted by
10/10/2008 the loan would be considered in default. The loan was deferred for payment
until 9115/2012. It is unclear why a delinquency letter would be sent to the individual
when no payments were required for another four years. No information regarding a
resolution was maintained in the case file. Additionally, Kessler has been informed that
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the note was never delivered to the Finance Department and Kessler found no measures
in place to ensure that payment would be properly recaptured commencing 2012.
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Case #21 - Down Payment Assistance - SHIP / HHR
This applicant who is a City employee in the MIS department purchased property in Fort
Pierce in the amount of $200,000 on 11129/2006. The first mortgage taken by this
borrower and his wife was for $152,000, taken from Harbor Federal Savings Bank.
On the second and third mortgages from the City, only the husband's name is indicated as
the borrower, in spite of the fact that the wife was named as the co-applicant on the
original application on file with the City. They received a total of $55,000 in Down
Payment Assistance through the SHIP and HHR Programs. The terms of the $40,000
HHR loan indicated that the first payment was to begin on 1115/2008 for a period of
thirty years. The SHIP Program loan of $15,000 indicated that the loan would be
satisfied after fifteen years of continuous residence in the property. Kessler has been
informed that none of the City mortgages were ever reported to the Finance Department
and only came to light in the fall of 2008 when a Finance Department employee
commenced an inquiry of irregularities into mortgages generated by the City. At that
time a revised note was issued indicating that payment was to commence on 6/15/2009.
Additionally, the CSD employees spelled the husbands name wrong on the mortgages
and many other documents provided in the file. These mortgages were not filed with the
Clerk of the Circuit Court until 4/24/2009. It is unclear why the mortgages weren't
originally filed in a timely manner and were then delayed more than two and a half years
until being filed with the Clerk of the Circuit Court.
There also appears to be a discrepancy with the monthly income indicated on two
separate forms. A form from the bank states that gross monthly income is $4,570 while a
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form on file with the City states that the monthly gross income is $3,603. The monthly
gross income used for the Down Payment Assistance application was $3,603.
On the Down Payment Assistance application five individuals are mentioned as members
of the household, yet one of the individuals is a resident of a different property as
delineated on the Verification of Public Assistance form.
Kessler has been informed by the Finance Department that as of 1114/2009 only two
payments were made to the City on the HHR mortgage.
As of 7/25/2007 $8,345 was past due on the mortgage payments to First National Savings
Bank, which would indicate that the applicants (husband and wife) were five months
behind ($1,669 per month payment). The applicants then received Foreclosure
Assistance for the same property on 9/14/2007 in the amount of $2,500 during which
period of time the applicant reported joint household income of $58,136. This occurred
only eight months after the City provided $55,000 in Down Payment Assistance. On the
Verification of Employment form dated 8/3/2007 for the Foreclosure Assistance
Program, it states that the wife is employed from 3/15/2006 and has received income of
$8,167.70. Conversely, in a sworn Unemployment Affidavit dated 10/20/2006 indicates
no income applicable to the wife. Kessler's investigation also disclosed that the place of
employment relative to the wife, Baby Eagles Childcare Center, is owned by World
Harvest Eagle Ministry, Inc. which in tum lists one of their officers on corporate records
as a CSD employee. What is even more spectacular is that an employee of the City who
works for the Director of Finance as well as the MIS Director signed the Verification of
Employment document for the applicant's wife as an administrator of the Baby Eagles
Childcare Center.
Based upon the information developed and the fact that the mortgage was never recorded
nor did the City employee ever make an effort to make payments it can be construed that
this individual in concert with CSD employees attempted to commit a theft of program
funds.
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Case #22 - HOME Again Program
Amoff nnrlll.nn
Arnoff MovT

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This applicant, who is deceased, (DOD 3/3/2008) had a home rebuilt beginning on
11127/2006. A Quit Claim Deed dated 212/2006 and signed by the applicant transfers this
property to Betty Hunt and the applicant. This document was filed with the Clerk of the
Circuit Court on 11/212009, years after the construction was completed, and after the
applicant's death. This document was witnessed by John Rogers, the contractor who
conducted the renovation on the property. According to Finance Department records, on
11/15/2006 a disbursement in the amount of $927.78 was made payable to Abbiejean
Russel Care Center. According to an invoice from Abbiejean Russel Care Center the
applicant was living at the center since 2005. An Unemployment Affidavit was also
maintained in the case file which appears to contain a forged signature of the applicant.
This signature was notarized by Aziza Boyd. Kessler also noted that a Title Affidavit
applicable to the property indicates that the applicant personally appeared before the
notary, a CSD employee, this document is also contained in the case file. This document
is not filed but is notarized.
Also in this case file was a memorandum from a Rehab Specialist indicating that on
1112/2005 the Specialist allegedly went to the property and did a walk through to
determine what was needed to bring the house up to handicap standards. The
memorandum indicates that during the process of working on the write-up the applicant's
niece Betty Hunt submitted an application for HHR funding and replacement of site built
housing to replace the structure. The Rehab Specialist concurred with Hunt.
On 7/26/2006 a letter was sent by CSD to the applicant at the property address, despite
the fact that the applicant resided in the nursing home. The letter indicated that the
household was selected to receive assistance through the City of Fort Pierce's HHR
Program. It further indicated that she was eligible for up to $100,000 at 0% interest for
the costs applied to demolition, surveys and other soft costs.
Upon review of the case file Kessler found numerous Power of Attorney documents
relative to the applicant. In a Durable Power of Attorney dated 11/1/2005 it is indicated
that the assigned attorney Betty 1. Hunt, among other things, will be responsible for
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property disposition including the "sale of or acquiring of the property for personal use."
A more comprehensive revised Durable Power of Attorney prepared by Biran C.
Herndon, PA dated 12/14/2006 also appointing Betty J. Hunt as agent is witnessed by
John Rogers and Ledaris Van. This Power of Attorney was filed with the Clerk of the
Circuit Court on 6112/2007. A Power of Attorney Mfidavit maintained in the file was
dated 6/8/2007 which was also recorded on 6/12/2007 indicates that Moniker Hunt was
appointed attorney in fact on 113012007. This Power of Attorney Affidavit allowed
Innovative Construction Company of the Treasure Coast, Inc. to begin improvements on
the property.
Originally a mortgage was filed with the Clerk of the Circuit Court in the amount of
$99,500. This mortgage was signed by Betty J. Hunt for Emma Carpenter and witnessed
by a CSD employee. The terms of the mortgage indicate that it depreciates over a period
of thirty years and one day. Due to an error on the part of the CSD, this mortgage had to
be voided and was subsequently recorded as satisfied on 5/2112007.
On 6/8/2007 a mortgage was filed from the Florida Housing Finance Corporation in the
amount of $50,000. The terms of this mortgage provide numerous requirements for
forgiveness or repayment of the loan. This mortgage was signed by "Emma Carpenter by
Moniker Hunt her attorney in fact". An additional mortgage was filed by the City for
$49,500 on 6/8/2007 and was also signed by "Emma Carpenter by Moniker Hunt her
attorney in fact". The mortgage will be satisfaction after a period of thirty years and one
day, requiring the applicant to reside in the property and the loan is indicated as satisfied.
An individual who appears to be the wife of a contractor frequently awarded bids by the
City, Innovative Construction of Treasure Coast, Inc. signed this mortgage as the attorney
in fact of the applicant. This same individual is a signatory on a 9/19/2006 letter from
Innovative Solutions, which occupies the same address as Innovative Construction of
Treasure Coast, Inc. indicating that Innovative Construction is requesting a three day
extension to get the required plans.
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Innovative Construction of Treasure Coast, Inc. who was the contractor awarded the bid
for $99,500 based upon a proposal submitted on plain paper on 8/23/2006 and stamped as
received on 9/5/2006. On 11/15/2006 Innovative Construction of Treasure Coast, Inc.
was given a down payment of $9,950 to begin construction, although construction did not
begin until June of 2007.
Andrew Thomas Const. Inc. placed a bid of $100,000 dated 8/17/2006 and it is stamped
as received on 9/5/2006. There is no documentation in the case file regarding due dates
of bid submittals nor is information available on the City website. An additional bid
submitted via fax from the New Mt. Zion Miss. Baptist Church dated 9/1/2006 from
Sunrise City Community Housing Development Organization for $125,000 was also seen
in the case file. No date received stamp was seen on this bid. It should be noted that
Innovative Construction of Treasure Coast, Inc. was the only bidder who did not clearly
indicate in their bid that they would be constructing the house. All other bidders
indicated that they would be constructing the house.
Numerous expenses relative to this project were found to have been paid by the City,
including demolition and moving costs which were over and above the HHR funding and
Florida Housing Finance Corporation funding allotted to this applicant.
A change order was submitted and approved on 12/5/2007 for the amount of $3,600. The
scope of the work includes installing sod around perimeter of property and pour concrete
driveway 20+ yards. No mortgage corresponding to this change order was ever filed with
the Clerk of the Circuit Court.
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Case #23 - Weatherization Assistance
I Income Bracket Above Moderate
It was determined that this household had a gross yearly income of $49,998. The
individual had a mortgage secured from the city on 8/1812005 in the amount of $8,436.
The terms indicated the mortgage was to be satisfied after one year and one day if the
individual remained a resident of the property.
In a letter from the Fort Pierce Community Redevelopment Agency on 101712005 to
FPRA Board, it states that the applicant should have never have received funding from
the Weatherization program, because the household exceeded the income limits of the
program. The letter states, "The CDBG chart shows the income limits for this program
range from $15,700 for extremely low income families to $41,900 for low income.
'Subject's household income exceeds the allowable limits by almost 20%."
Regardless, the work was performed and a final inspection was conducted on 2/13/2006.
A short time later on 212112006 a change order was submitted and approved by the CSD.
The change order cited work to be done including removal/replace one additional
window, install shutters on all windows, remove old door and installed new louver door.
It appears that the ineligibility of the applicant was ignored, and construction was allowed
to continue regardless of the fact that the income limits were clearly exceeded. What's
even more remarkable is that a change order was also submitted and approved for $2,325
that was typed up by and signed by CSD staff and the contractor, all dated 2/2112006.
Kessler has been informed that it is common practice for CSD to type change orders for
contractors and in many of the cases such as this one Kessler could not find any
documentation directly from the contractor.
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Case #24 - Weatherization - FPHA
On 2/15/2005 this individual applied for the Weatherization program that is funded
through the Fort Pierce Housing Authority ("FPHA").
The request for assistance includes windows, doors, AlC unit needs replacement, solar
screens, attic ventilation and weather stripping. A mortgage of $1,750 was granted for
this purpose on 5/8/2006. The satisfaction period for the mortgage states one year and
one day after continuous residence in the property. An additional request dated
7/12/2006 states that the individual would like to request an additional $5,310.1 0 to
remodel the house, converting the car port to an extra bedroom. It was determined after
an inspection conducted by a CSD Rehab Specialist that another $27,000 would be
needed to bring the dwelling up to code. It does not appear that any disbursements
relative to the $27,000 were ever made.
The original contract between contractor Joe Difrancesco and the City indicated that
work was to be conducted in the amount of $1,750, but a change order was issued and
approved for $350 (re-screening 14 screens). The $1750 mortgage was not amended to
include the change order, a discrepancy Kessler noted in other case files. On 7/24/2006
the mortgage was noted to have been satisfied in the amount of $2,100 in spite of the fact
that the original mortgage was only written for $1750 and no amendment to that amount
was delineated in the case file or filed with the Clerk ofthe Circuit Court.
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There are three individuals in this household, with a reported gross yearly income of
$11,736.00, which is comprised of Social Security benefits of the property owner. A
memorandum in the file dated 7/7/2006 from CSD to the Finance Department requests
that a check made payable to M. B Brown Construction and the applicant in the amount
of $7,000 be voided since the applicant passed away and indicates that the check should
be reissued to the contractor only. No income or data is collected relative to the daughter
of the applicant who is 43 years old. On the payment request dated 2/5/2007 to release
SHIP funds the property owner's signature is the daughter. The daughter also signs the
change order as the authorized signature and owner. A Durable Power of Attorney and
designation of a pre-need guardian including healthcare surrogate was completed by the
applicant, assigning her daughter as her agent. This document was signed on 812812003.
Their income bracket was determined to be "very low".
A mortgage was filed with the Clerk of the Circuit Court in the amount of $18,925 on
2/9/2006, with a satisfaction period of one year and one day. In the file Kessler found an
amended, deferred payment Mortgage Note dated 6/8/2006 indicating that the principal
of$18,925 would be deferred for six years and one day and would be forgiven at 116 each
year. Any transfer or ownership during the six year term is stated to constitute a default
of the original balance, causing the note to become due and payable in full. This
Mortgage Note was not filed with the Clerk of the Circuit Court. Additionally, Kessler
has determined that this property was transferred to the daughter on 5/20/2006 during the
period of construction, violating the terms of the mortgage.
Kessler also found the original contract amount was for $18,925 and a change order,
again typed by CSD staff for the contractor, was approved in the amount of $7,750 on
2/5/2007 after the applicant died, for a total cost of $26,675. The final inspection was
completed on 2/512007, the same date as the approval of the change order. Contained in
the file is a two page list of problems with the construction dated 113112007. A rubber
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stamp with the words Changes Required with the handwritten word ''No'' above it is
stamped on the document and initialed. Throughout this audit, Kessler was told that
many of the contractors retained by CSD provided inferior quality and non-existent or
unfinished work for which the City was charged. The chart below shows the amount
issued to the contractor and the account from which each amount was drawn:
Account
Date Account # Description Payable To Amount Check #
..
- - -
j - .
5/18(2006 104 9400 OtM.er Grants & Aids M B Censtruc::tlon $10 000 OD 205168
6/16f2{)06 105-9502-5$4.83-10 R-ehabilitatron M.B. Construction $7,000. 00 205707
11!'1/2b(!)6 1,05-9502--554.,8,3-2.0 RE:hab M.B. $'1
1
0,000.00 208381
217fZ007 105-9502-554.83-10 Rehabilitation M.B. Construction $2,650.00 2103'34
Total $29,650.00
The total amount disbursed for the project was $29,650; 11% more than the amount
approved by the CSD of $26,675. It appears that once the Rehab Specialist conducted his
review of the home he claimed that additional work needed to be conducted to bring the
home up to code. It is unexplainable why this was not determined at the onset of the
project or why this large sum of money would be expended for weatherization since
Kessler learned from employees of CSD that only $10,000 is to be supplied per applicant
from the Weatherization program, which Kessler noted in the case file as being check
number 205158. There is no other documentation that states funds were drawn from
other programs.
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On 3/7/2005 an application for Weatherization was completed by two applicants. The
section of the form requesting gross annual income is written in different handwriting and
contains crossed out information, information written over, and is initialed by neither of
the applicants. The applicants listed a household income of $36,669 and list their three
grandchildren as occupants of the household. Their income puts them in the "low"
income bracket. The bank statements used a basis to verify income is only in the name of
the wife and is missing many pages. The statement dated February of 2005 provided
indicates a balance in a checking account of $2,855.88 at the Harbor Federal Savings
Bank. A Verification of Assets on Deposits slip returned by Harbor Federal Savings
Bank dated March of 2005 did not disclose this account, and only shows $10.67 on
deposit.
Three companies submitted bids on this project ranging from $10,375 to $15,273.33.
The lowest bidder was not chosen for this project. Monarch Properties submitted a bid in
the amount of $10,375, submitted on 8/412005. Yet Ross Construction who submitted a
bid of $11,495 was chosen according to the bid summary sheet after, "See Comment
Sheet. Met wi Ross Construction on 8/30/2005 and re-negotiated new contract price for
$10,752.50." A review of the comment sheet indicated that the Rehab Specialist met
with Lamont Ross of Ross Construction on 8/30/2005 and re-negotiated a new contract
claiming, "The original cost of estimate was readjusted due to an increase in materials.
Also, at the time of this bid open Monarch Properties was awarded two jobs so we
decided to split the jobs up with the contractors so they would all be treated equal."
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INTEANATIONAC'
A City funded mortgage was recorded on 9/1/2005 in the amount of $10,752.50. The
terms of the agreement state that the mortgage will be satisfied in one year and one day if
the applicant is a full time resident of the property. The work performed on the residence
exceeds the amount that was recorded in the mortgage by $5,250. The chart below shows
the amount issued to the contractor and the account from which each amount was drawn.
Account Check
5/18/2006 104-94be-554.83-4D >ther Grants & Aicls Ross Construction 2ds213
3/912006 104-94@O-54.B3:4.0 ottler Grants & Aids Ress Censtructiol"l 203138
Total $16.002.50
On 5/15/2006 a final inspection was approved and signed off on by all parties involved,
indicating that a final payment of $10,250 shall be made, which when paid will represent
full satisfaction of the monies due and owed under the contract. On that same day, a
change order typed by CSD employees for $5,250 signed by the contractor, the Rehab
Specialist, and the Assistant Director of Community Services is approved.
A letter in the case file dated 2/1312006 from the homeowner states, "The contractor that
suppose to put new windows & doors never show up. 1 called him several times. He said
he will be out end of Oct. 1 call again he said he will be out middle of Nov. Never show-
up. We're very disappointed with the contractor." A post script states, "I do not wish for
Mr. Ross to do any repair to my house."
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I Income Bracket Very Low
Date Account # Account Description Payable To Amount Check #
Terramar
.43-90, MisCi:ella_neous C0nstrw::tien $6S}(iJe.O(ij 2@:4643
l'erramar
1 039P02-55:4. 83-4.0 Other Gr-ants & Aids ConstrUction $7.900.00 203770
Total $14,800.00
A mortgage dated 9/14/2005 was recorded on 9/21/2005 in the amount of $12,900. The
terms of the agreement state that the mortgage will be satisfied after a period of one year
and one day. The Application for Weatherization Assistance Program in the file indicates
that the house is paid for and that the applicant, who is 46 years old receives only Social
Security income in the amount of $559 per month. The household's yearly gross income
is listed at $6,708 and the income bracket assigned is "very low".
The bid information sheet contained in the file indicates bid estimates were $13,200,
$12,000, and $11,900. No names are associated with these numbers and the supporting
documentation in the file indicates an estimate of $12,500 to upgrade the electrical panel,
remove and replace windows remove door in laundry room, replace damaged fascia and
soffit, and install a new 2 Y2 ton AlC unit and air handler. The lowest bidder is shown as
Terramar Construction.
An invoice found in the file from Three G's Inc. d/b/a Grimes Heating & AlC billable to
the CSD Rehab Specialist indicates the unit was installed by them at a cost of $5,572. An
official bank check dated a considerable time after the completion of the job indicates a
payment of $5,578.66 with the notation, "For Job Complete." There is no way to match
the check with the invoice and it is unclear why an alleged subcontractor to Terramar
Construction would be billing the Rehab Specialist directly.
Furthermore, total expenditures on the project are $14,800 as noted above, yet the
mortgage was only recorded at $12,900. A change order typed by CSD employees was
approved on 4/13/2006 for $1,900 to conduct work including reverse front entrance door,
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install one new security door, remove & extend opening for new windows & replace tile
around window in kitchen. The final inspection was conducted on 4/13/2006, the same
date as the approval of the change order. The change order was not recorded in the
original mortgage amount.
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Check
Date Account # Account Description Payable To Amount #
2{92006 f04-!940(;)-554.49-90 MiseeUaneous Expense 1erraniar C6nstruetion $"4))00.00 203170
3/9/2006 104 .. 9400-554.83-40 Other Grants & Aids 1:erramar Construction $2180.00 203771
4/21/2006 1 Miseellaneous Expense Terramar Construction $.4,$00_00 204645
Total $10,980.00
On 1/1512005 an applicant submitted an application for the Weatherization program
hoping to receive new windows, ceiling, insulation and solar screens. Their annual
income is stated as $10,666 and was classified as belonging in the "very low" income
bracket. It should be noted that the employment, unemployment, support and asset
verification forms are not complete and have a handwritten "X" across the forms.
The original bid to remove and replace a utility door, install a 9000 BTU AlC unit in
bedrooms 1 and 2, replace all windows, insulate exposed lines on water heater, and
replace gas water heater in the hallway was submitted by Terramar Construction, Inc.
dated 8/9/2005 to conduct this work for $9,120. This appears to have been the only bid
submitted in this case. The bid amount was revised on 8/25/2005 and written as $8,320.
The mortgage however was filed on 9/14/2005 for $8,180 indicating a satisfaction period
of one year and one day, if the applicant remained a resident of the property.
Ultimately, Terramar was paid a total of $10,980 relative to the project because of a
change order approved on 4/13/2006 and 4/14/2006 in the amount of $2,800 called for
work including cutting openings for two AlC units in walls, cutting openings and
installing three egress windows, install two electrical outlets in the bedroom, install new
soffits, and upgrade all electrical outlets. It is unclear how the original bid could not have
taken into consideration that there were no holes in the wall or electrical service to install
the air conditioners that were bid upon. No amended mortgage was ever filed to reflect
the additional cost of the project. A final inspection was not conducted until 4/1112006.
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On 112112005 an individual completed an application for funding from the
Weatherization program. It is stamped as having been received on 2/1/2005. Their
yearly gross income was recorded as $22,040. Three occupants are listed in the
household. The income bracket is "very low". The applicant has a first mortgage on the
house with a monthly payment of $408.92. A City mortgage executed on 8/25/2005 and
recorded on 8/31/2005 is in the amount of $9,850 which is forgiven after one year and
one day, if the applicant remains a resident of the property.
There were three bidders on this job with varymg bids ranging from $9,850 to
$14,571.30. Monarch Properties was awarded the bid at $9,850. The job consisted of
installing security doors, replacing vinyl around the entire house and installing new
kitchen cabinets, hot water heater, sinks with faucet and sprayer and replacing the
bathroom vanity, sink and faucet. It is unclear how new cabinets and bathroom vanities
correspond to Weatherization.
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On 111212005 an application for Weatherization was submitted by a City employee to the
City listing the applicant and two additional occupants of the household disclosing
income of $34,258. The income bracket for the household was reported as "low".
Remarkably, the Verification of Employment fonn sent to the Board of County
Commissioners is dated 1111/2005, a day before the application was filed. Also
contained in the file is a bank statement from St. Lucie Community Credit Union dated
December of 2004 listing the applicant and another person with the same last name at the
same residential address which is the subject of the application as account holders. This
person is not listed on the application. Most of the required fonns for the application
have a handwritten NI A across them.
A mortgage was executed on 8/3112005 in the amount of $9,750. The tenns of the
agreement state that the mortgage will be satisfied after a period of one year and one day,
if the applicant remains a resident of the property.
Two bids were submitted in this project, one by Monarch Properties and one by
Villanova Construction. The work to be perfonned included installing new security
doors, replacing windows and insulation. The bid was awarded to Monarch Properties on
8/29/2005 in the amount of $9,750. A change order was approved by the CSD for
additional work to be conducted including remove and replace screen door, replace
screen on porch for $700. The total amount remitted to the contractor was $10,450. The
certificate of final inspection is dated 9/20/2005, and a change order prepared by CSD
employees is dated the same day. The change order prepared by the contractor is dated
after the final inspection on 10/3/2005.
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Case #31- Rehabilitation Assistance - HHR
Foreclosure Prevention - HHR / SHIP
This individual lists a gross yearly income of $15,808 and four grandchildren are also
listed as occupants of the household. The household is considered to be at the "extremely
low" income level. It also appears that the $15,808 income for a member of the
household had been redacted using correctional fluid. Additionally, the original amount
of benefits/pensions/social security and the amount for public assistance which was
previously written into the application were also redacted. The monthly assistance for
two members of the household totaling $596 per month in public assistance was not
included in the income calculation. The credit application of the individual indicates that
the applicant is past due on the first mortgage, and has many accounts in collection.
In October 2004 this individual purchased a home from Sunrise City CHDO in the
amount of$82,500. Additionally, $10,000 was also provided to this applicant at that time
for Down Payment Assistance from the SHIP Program. The terms of that mortgage state
a depreciation period often years, if the applicant remains a resident of the property.
On 1/4/2007 this applicant applied for a Rehabilitation Assistance grant from the City. A
third mortgage in the amount of $37,995 was executed on 912712007 and recorded on
10112/2007. The associated Mortgage Note has conflicting information indicating in one
sentence that the principal balance will be forgiven in nine years and in another sentence
that it will be forgiven in fifteen years and one day. This Mortgage Note was never filed
with the Clerk of the Circuit Court.
During the rehabilitation $9,600 was paid to Cathstan Holdings, Inc. d/b/a Sunset Inn for
relocation assistance. The individual requested that two rooms be provided. The
invoices contained in the file allegedly submitted by Sunset Inn are handwritten on blank
paper with either a rubber stamp or the name handwritten at the top of the page. The
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signature of Stanley Walker, the manager, is completely different on each page. One
invoice indicates the applicant checked in on 1116/2008, another invoice indicates the
applicant checked in on 1011612007. Also expended relative to this project were moving
charges paid to Arnoff Moving of $3,290.50, and $50.50 to Edwin M. Fry for title
searching.
The following bids were submitted relative to this case:
One Professional Services
Jacobson Const. LLC
B & E Builders & Design
Terramar Const. Inc.
Precision Custom Concrete and Const.
Saturno Construction AB Inc.
M. B. Brown Construction Inc.
Atlantic Coast Builders LLC
High Tower Construction Inc.
$ 40,770.00
$ 0.00
$ 37,995.00
$ 44,300.00
$ 44,350.00
$ 53,312.00
$ 56,065.00
$107,980.00
$ 74,544.00
B & E Builders was awarded the bid. A change order dated 2/1512008 prepared by CSD
employees in the amount of $28,200 brought the total cost up to $66,195. A change
order found in the file on B & E Builders & Design Inc. stationary dated 1112612007
indicates that the exact same work listed on the change order prepared by CSD would
cost $30,615 and was "discounted" to $28,200. In this case, each room is broken out on
the change order and many of the rooms have estimates of the exact same amount for
labor being charged at $68.50 per hour. On the same day the final inspection was
conducted and signed by a Rehab Specialist, a Building Inspector and the homeowner.
An additional mortgage dated 12/26/2007 for $28,200 states the mortgage to depreciation
over a period of ten years. This mortgage was never recorded with the Clerk of the
Circuit Court.
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INTERNATIOHAL"
On a Housing Assistance Application dated 6/4/2008 completed as a result of foreclosure
action taken by Chase Home Finance, the applicant indicates three grandchildren are
occupants of the household. Previously, four grandchildren were listed on the Housing
Rehabilitation Assistance Application. The total income for the applicant is indicated as
$19,020. The applicant also includes $3,576 in public assistance, which Kessler noted
was not included in the Housing Rehabilitation Assistance Application.
On 8/2112008 two checks were written for the benefit of this individual from the
foreclosure assistance program. The checks were drawn from the HHR Program for
$5,000 and the SHIP Program for $2,905.12. The amount that this individual was in
default of the loan was $7,905.12 as of 8/28/2008.
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Case #32 - Rental Assistance - HHR
Eviction Assistance - HHR
I Income Bracket Moderate
This individual is a CSD employee whose household income for her and three children is
listed as $44,614 who received rental assistance in the amount of $1,988 on 2/2/2007.
The assistance was provided for first months rent, last months rent and a security deposit.
Conversations with this employee indicated that the security deposit was never returned
to the City by the landlord or the employee and no attempt was ever made by CSD to
collect it.
Additionally on 6/2912007 the employee was provided eviction assistance in the amount
of $2,485. This assistance was provided to the employee in order to make their payments
current through August 2007. In 2008 the same employee received considerable
assistance for the purchase of a house referenced below as Case #51.
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KESSLER
INTERNATIONAl:
This applicant has a reported annual income of $22,131 as per the application of
10110/2005. A City mortgage executed on 2/29/2008 for $40,000 with a $9,000 payback
was recorded with the Clerk of the Circuit Court on 3/5/2008. There is no Mortgage
Note attached to this mortgage. An amended mortgage was filed on 4/24/2009 after
questions were being raised by an employee of the Finance Department. The amended
mortgage states repayment of $9,000 over a period of thirty years at 0% interest with
monthly payments beginning on 5/15/2009 in the amount of$25. The remaining $31,000
shall be forgiven thirty years and one day from the date of the mortgage. No records
were supplied to Kessler to indicate if payments were ever made on this mortgage.
The SHIP Program provided an additional $15,000 towards down payment assistance on
the purchase of this house. The mortgage was dated 3/3/2008 and recorded on 3/5/2008.
The terms indicate that it was to be satisfied after fifteen years of being a resident of the
house. Additionally a deferred mortgage was secured from Florida Housing Finance
Corporation in the amount of$10,000. The individual also secured a first mortgage from
National City Bank f/k/a Harbor Federal Savings Bank in the amount of $82,000.
The seller was to pay the buyers closing costs. The closing costs are detailed on the HUD
Settlement Statement as $2,420.75, yet the seller provided $4,434 towards the closing
costs of the buyer. The buyer only provided $1.89 towards closing despite the fact that
regulations stipulate that buyers provide at least $500 at closing.
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INTERNATIONAL"
Case #34 - Replacement Program - HHR
211460
These individuals applied for HHR Replacement Housing funds on a form signed on
1120/2006 by the applicant which is crossed out and signed 7/2012006 by the co-
applicant. The household income is reported as $34,216.00 in wages and salaries for one
person and benefits/pension of $6,638.48 and there are three occupants. The document is
dated 7120/2006 as having been received by the City. The co-applicant's signature
appears to be forged on this document by the CSD employee who accepted the
application.
On a comment sheet contained within the file an entry is made dated 9/1212005 that,
"Client applied for rehab w/SHIP-code enforcement came to us + said the client needed a
lot of rehab & code had given them a violation. Sent Rehab Specialist out to the house.
They agreed the house was in bad shape." The next entry is dated 10/17/2005 indicating,
"Applied for re-entry-however due to the high amount of rent $ + low undamaged stock-
client had a hard time finding an apartment-check given to LlL 3.20.06." It is unclear
why an entry dated 2005 would have information pertaining to 3120/2006. The next entry
dated in May of 2006 reads, "Client applied for replacement on 1111/06 our Rehab
Specialist found the house to be beyond rehab." The next entry dated 9/28/06 indicates,
"Spoke with Stephanie at Harbor Federal and Ms. (Applicant) is requesting $90,000
financing. Will see what she qualifies for." The final entry dated 1111/06 reads, "Cust
will pay 300.00 per month repayment. Lien 30 years."
89

KESSLER
INTERNATIONAl!
On an Income Certification Fonn signed by the applicant on 1120/2006 and by the co-
applicant on 3/13/2006 and by the CSD representative in January of 2006 it is indicated
that three people were occupants of the property. The photo identification for the co-
applicant uses a Post Office Box rather than a physical address as seen on the
identification of the applicant.
A Rehab Specialist was sent out to the home to conduct an inspection on 1110/2006, and
detennined that the home was in such a state of disrepair that a complete demolition and
rebuilding would be required. No documentation was provided to detennine that the
estimated cost of rehabilitating the home would exceed 50% of the cost of the home as is
required by program regulations. No bid documentation is maintained in the case file,
however Kessler did locate a construction contract from Satumo Construction in the
amount of$124.997.00 only signed by one ofthe applicants.
Kessler also noted that in the file was a document indicating that the application was
approved for a loan of $100,000. A HUD Settlement Statement indicates that a closing
took place on 1/19/2007. Also contained within the file is a Promissory Note dated
11/612006 in the amount of $100,000 at 0% interest indicating that it is payable over 360
months at $277.78 with the first payment due 4/15/2007.
Implausibly, the original mortgage dated 11/6/2006 was recorded without a mortgage
amount; as a result that $0 mortgage was satisfied on 11110/2008. An amended mortgage
was recorded on 1124/2007 in the amount of $100,000. The amended mortgage stated
that the mortgage was to be repaid over a period of thirty years at an interest rate of 0%.
The mortgage on file with the Clerk of the Circuit Court does not provide a monthly
payment amount nor does it provide the date of the first payment. A copy in the file is
unsigned by a representative of the CSD, but states that the repayment tenns are thirty
years at 0% interest, the first payment to commence at 5/15/2007 at $277.78 per month.
A first mortgage was taken by the borrowers in the amount of $44,000 from Harbor
Federal Savings Bank on 1/24/2007. It is unclear why the City was subordinated to
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If\O''ERNATIONAL
Harbor Federal Savings Bank insomuch as the City should be the first mortgage holder.
Based on the scope and limited budget of Kessler's forensic audit, no verifications were
completed to determine if in fact any repayments were made on this or any of the other
mortgages from the City. Kessler has been advised however by City employees that in
this instance at least no payments have ever been made.
The total amount spent by the City on this project was $110,405.60, which includes the
demolition costs conducted by L.E.B. Demolition & Consulting Contractors, Inc. It is
unclear why the demolition cost of $10,405.60 was not recorded to the mortgage.
Additionally in a 3/1512006 award letter it states the couple is only eligible for up to
$100,000, and the rest would be paid for by the applicants.
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INTERNATIONAl
Case #35 - Down Payment Assistance - HHR 1 SHIP
On 10119/2006 a typed application which appears to have been completed by CSD
employees indicates that the applicant is unmarried male residing with his son, his
girlfriend, and his step-son. The applicant claims to be currently employed as a sales
manager at Men's Rags with an income of $3,480 per month. No income is listed for the
girlfriend who claims to be unemployed. On another document, the applicant has listed
income of $41,916, with four family members, their income level was rated "low" by
CSD.
The individual purchased a home for $219,990. A first mortgage was secured in the
amount of $148,900 from Harbor Federal Savings Bank; an additional mortgage was
secured in the amount of $25,000 from Florida Housing Finance Corporation. As per the
HUD Settlement Statement only $24,659 was provided during the closing from the
Florida Housing Finance Corporation.
The SHIP Program provided a mortgage dated 1112/2006 in the amount of $15,000; the
mortgage will be satisfied after fifteen years, providing that the applicant is a resident
until that time. A fourth mortgage dated 111212006 and filed 11129/2006 was secured
from the HHR Program in the amount of $40,000. No terms were contained on this
mortgage and on 5129/2009, after the Finance Department employee started questioning
practices, another mortgage is filed wherein only $9,000 had to be repaid from the
$40,000. The repayment terms of the mortgage are for thirty years at 0% interest, the
first payment was to commence on 5/15/2009 in the amount of $25 per month. The
remaining $31,000 shall be forgiven when the principal and interest payments were made
in full.
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On 7/17/2009 the individual was notified of the action of Harbor Federal Savings Bank
seeking to foreclose on the property. No resolution information is contained in the file.
93

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INTERNATIONAl!'
This applicant's annual income is $32,320 with a household size of four individuals; the
income category for this individual is "low". The purchase price of the home was
$176,786. A first mortgage was secured from Resmae Mortgage Corporation in the
amount of $126,786.
The SHIP Program provided $10,000 for Down Payment Assistance on 4/7/2006. The
terms of the mortgage state that it will depreciate over ten years of living in the residence.
The HHR Program provided $40,000 for Down Payment Assistance. The terms of this
mortgage state that the applicant was to commence payment on 6115/2006 in monthly
payments of $128.66. The mortgage is to be repaid over a period of thirty years at 1 %
interest. Additionally, $1,800 was provided by the seller to conduct repairs on the
property.
On 12/612006 the applicant was notified that the Resmae Mortgage Corporation was
seeking to foreclose on the property. Kessler was told that the applicant never made any
payments on the City mortgages either.
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Case #37 - Replacement Housing - HHR
This individual submitted an application for Replacement Housing on 10118/2005. The
individual's gross yearly income is $6,060. The individual had stated that their assets
were less than $5,000 but the total amount held in their bank account at "Riverside" totals
$15,146.60. On 8/28/2006 a handwritten Power of Attorney was drafted assigning
Rachel Kelly as the applicant's agent over all assets. This document was notarized on
9/1/2006 when the applicant signed the document a 2
nd
time. The application was signed
by a CSD employee on 8/15/2006. Despite the fact that the application was signed in
2006, many of the inquiries are dated at the end of 2005 and in fact, there is a clear
indication that CSD processed this application in 2005.
A review of the case file disclosed that various bids were submitted relative to this
project, none of which are listed on the City's Purchasing Department website. A two
page bid from Innovative Construction of Treasure Coast, Inc. dated 9/27/2006 which
was included in a 6 page fax dated 9/28/2006 from the Mt. Zion Miss. Baptist Church is
for $101,000. The bid only lists the amount and no specific information about the size,
type or anything else about the house to be built. A second undated bid was in the case
file from Artenal Construction Company to build a 3/2 house on the customer's lot for
$110,000. The amount included permits, building material and architectural costs, to be
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INll::RNATIONAC
built in concrete block. This bid was faxed from the New Mt. Zion Miss. Baptist Church
on 10/3/2006. A third bid dated 9/28/2006 from Sumise City Community Housing
Development Organization indicates that they as a contractor propose to construct a 3/2
concrete block 1200 square foot house with all kitchen appliances, flooring, central air
and heat for $100,000. This bid was also faxed from the New Mt. Zion Miss. Baptist
Church on 9/28/2006 as page 3 of6. Pages 4, 5, and 6 of this fax were not maintained in
the case file. There are no bid award evaluation documents or any other documentation
regarding this bidding process and it is unclear why the New Mt. Zion Miss. Baptist
Church would be collecting the bids on this project and forwarding them to the CSD.
There is an undated letter from Sumise City Community Housing Development
Organization which was faxed from the New Mt. Zion Miss. Baptist Church on
1111/2006. The letter indicates that Sumise accepted the contract to complete the
construction within 120 days of acquiring permits and that their "subcontractors are
prepared and ready to go." Contained within the file dated 11/6/2006 but signed
9/1/2007 is a contractor's final invoice and release of all liens and warranties. A
Certificate of Final Inspection dated 10/1/2007 signed by Rachel Kelly for the applicant
and CSD employees is contained in the file. The building inspector does not sign off on
this document until 9/2712009. It is unclear how a release of all liens and warranties can
be granted prior to a final inspection of the work being completed.
According to a Comment Sheet in the file, an approval letter was mailed on 9/12/2006
and on 11/1/2006 a notation is made that conversations were held with Sumise and
Rachel Kelly to have a pre-con on 11/6/2006. An entry dated 1111312006 has been
redacted with correctional fluid.
Within the case file are two Housing Replacement Construction Agreements signed by
Rachel Kelly as the owner. One was signed on 11/6/2006 and the other on 111012007.
The original award allocated for the construction of the new home was $100,000 payable
to the contractor Sumise City CHDO. A mortgage dated 1116/2006 and signed by Rachel
Kelly as the owner was filed with the Clerk of the Circuit Court on 11/812006, for
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$100,000. The mortgage states that the amount is $100,000 depreciating 1/30 per year
shall be satisfied after thirty years, if the individual remains a resident of the property.
A Rehabilitation Contract indicating the applicant as the owner but signed by Rachel
Kelly as the owner indicates an agreement to commence work within five months of
1116/2006. Also contained within the file dated 1116/2006 is a financial affidavit signed
by Rachel Kelly on behalf of the applicant.
Three change orders are maintained in the case file. A change order dated 8/6/2007 and
signed by Rachel Kelly and Toby T. Philpart in the amount of $10,675 for various
upgrades and tree removal. A second unsigned change order for $8,425 encompassing
many of the same items at different amounts is also in the file. A third change order
dated 8/20/2007 typed and prepared by a CSD employee is for tree removal, land fill and
lawn maintenance in the amount of $3,325. The final inspection was conducted on
101112007, but the building inspector signed off on the final inspection before it was
actually completed on 9/27/2007. All payments are also submitted to the contractor prior
to the final inspection, with the last recorded payment having been made on 8/24/2007.
In a letter from November 2006 the City states that it will incur the costs of demolition,
and that it was not the responsibility of Sunrise City CHDO. It is unclear why the
demolition costs were not included in the mortgage amount. The total demolition costs
incurred are $6,456 payable to L.E.B. Demolition & Consulting. It is unclear why the
change order of $3,325 and the demolition costs were incurred by the City when in fact
the award letter of September of 2006 states that the total amount of the award was only
to $100,000 which was inclusive of demolition, surveys and soft costs. The letter also
indicates that anything over $100,000 would be the responsibility of the applicant.
Incidentally, the property tax on this residence is $54.00 per year. Typical similar
properties are known to be in the area of $700.00 per year. There is no apparent
explanation for this discrepancy.
97

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INTERNATIONAL
On 2125/2007 the applicant completes an application for Down Payment Assistance. The
individual has a yearly gross income of $34,062.84 and the household size is two which
would place the household in the "low" income bracket.
A letter from the City dated 312212007 indicates that the applicant is eligible for up to
$15,000 toward down payment for a home with a maximum purchase price of $259,440.
The applicant purchased a home for $120,000 and incurred $7,269.35 in settlement
charges. The applicant obtained a first mortgage in the amount of $111,000 from
National City Bank and $14,823.11 from the SHIP Program. The SHIP mortgage was to
depreciate over a period of fifteen years, if the applicant remains a resident of the
property. The applicant only contributed $405 of her own money toward the purchase
price, although $500 was required by the program.
The SHIP mortgage filed in the Clerk of the Circuit Court misspelled this individual's
name.
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INTFRNAnoNAL"
Contained within this file is a letter from Clyde G. Killer, Esq., Chairman of the
Communitywide Council to Dorina Jenkins dated 9/29/2008. The letter states that an
anonymous letter was received by Mr. Killer indicating that this applicant had falsified an
application for the $15,000 loan received from the SHIP Program. Subsequently, a letter
was sent to the homeowner on 10/612008. The letter states that the borrower is not in
compliance with the mortgage agreement and should refund the money including interest
calculated at 5% from the issuance of the loan. It appears that no follow up whatsoever
has been conducted on this matter, and that the funds were never recouped by the City.
It was also noted that the first mortgage and the City mortgage contained different
spellings of the applicant's last name. Kessler called the telephone number listed for the
applicant in the case file, and the call was taken by a representative of an aviation
company called Treasure Coast who was not at all familiar with the applicant. Other
numbers are disconnected. Ultimately, Kessler was able to reach the applicant on a
cellular phone number provided in the file. The applicant indicated that she uses two
variations of her name because her name is incorrectly spelled on her driver's license.
She continued by informing us that she spoke with a CSD employee and told them that
she lives at the subject property. A review of Kessler's databases disclosed a number of
individuals currently using the subject address who are not listed on any ofthe documents
in the case file.
The SHIP Program assistance mortgage is dated 5/25/2007 in the amount of $15,000.
The terms of the agreement state that the mortgage would depreciate over fifteen years.
The individual provided $1,536.71 at closing for deposit and the balance of funds due.
According to the case file a first mortgage was taken in the amount of $157,500 and
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secured by National City Bank. Additionally, funds were allocated on the HUD
Settlement Statement to this individual from the "gift fund" in the amount of $1 ,500.
The individual has a reported gross yearly income of $37,443.72 and a household size of
three individuals. This would put the individual in the "low" income bracket. Only one
Employment Verification Form was located in the file for $11,337. Kessler spoke with
the employer listed who indicated that the applicant was only a per diem employee
receiving only overflow work as a nurse's aide.
Additionally, the individual wasn't employed by the same employer for more than two
years and a notarized letter from the landlord was never received by the City as required
by protocol. The application should have been determined to be incomplete and / or
ineligible and should never have been approved.
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INTERNATIONAl!
An application was filed on 4/2012007 for housing assistance indicating that the applicant
had wages and salaries in the amount of $17,992 and that her son was receiving Social
Security benefits in the amount of $5,720 per year. This individual has a household
income of $23,712 and a household size of four individuals. This would put the
individual in an income bracket of "very low". The individual purchased a home valued
at $115,000 on 9114/2007. The HUD Settlement Statement maintained in the file was not
signed.
A first mortgage in the amount of $55,750 from National City Bank dated 911412007 was
secured. A SHIP mortgage dated 9/1412007 was filed on 9/17/2007 in the amount of
$15,000 indicating the mortgage is to be satisfied over a contradictory period of "thirty
12 years" depreciating at $1,000 per year. A bond was also issued from the Florida
Housing Finance Corporation in the amount of $10,000 which was dated 9114/2007 and
filed on 911712007 is notated as being deferred.
An HHR mortgage dated 9/14/2007 and filed on 911712007 indicates that $36,200 was
borrowed and that the payments were to begin on 9/15/2008 in the amount of $100.55.
An amended mortgage was filed again on 4/24/2009. The mortgage indicates that the
individual was to repay $36,200 at 0% interest over a period ofthirty years.
Sometime prior to 4120/2009, CSD received information that this property was not a
primary residence and was being used as rental property. On April 20, 2009 a certified
4 This mortgage indicated a conventional repayment at 0% interest over 30 years. The note attached to the
mortgage indicated that the mortgage was a deferred mortgage over a period of30 years.
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ltn'ERNATIONAe
letter was sent to the applicant at the property from CSD indicating that the property had
been determined to be currently a rental property. The letter continues to state that if the
individual does not contact the CSD within seven business days the mortgage will be
considered to be in default. The very next day, a letter from the borrower containing a
questionable signature was notarized by a City employee and stamped as having been
received on April 21, 2009. The letter indicates that the individual had to temporarily
vacate her home to assist in meeting the medical needs of her grandmother. The
individual continues by indicating that the person residing in the residence is a family
member to prevent theft from occurring. The letter provides a telephone contact number
which Kessler called and spoke with a female representative who identified herself as the
applicant. She stated that she has never lived in the house, never signed the above-
referenced letter, and added that the home is currently occupied by a cousin whose name
she could not initially recall whom she said pays no rent, only the light bill. No
resolution information is maintained in the case file, nor does it appear that any further
investigation has been conducted.
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Case #41- Down Payment Assistance - HUR/SHIP
On 5/1412007 the applicant filed an application for housing assistance. The application is
typed and information was inserted on the application by CSD employees including
salary information and the liability questions. The person is reported as having an
income of $23,478 and being in the "low" income bracket. The applicant purchased a
home for $113,000; a first mortgage was secured in the amount of $63,600 from Bank
United, FSB. The borrower also provided $500 as a deposit on the purchase of the
property.
Another mortgage was secured from the HHR Program in the amount of $40,000 dated
9/28/2007 and was recorded with the Clerk of the Circuit Court on 10/2/2007. The terms
of the agreement state that only $9,000 of the $40,000 shall be repaid by the borrower.
The repayment terms indicate that the borrower has to pay $25 as a monthly payment
over a period of thirty years at 0% interest and first payment was to begin on 10/15/2008.
It appears that there are no consistent guidelines as to repayment requirements on these
mortgages and in some cases, the awards favor certain applicants. Additionally SHIP
Program assistance was provided in the amount of $15,000. This assistance is to be
satisfied over a period of fifteen years. According to the Finance Department, no
payments were ever made on these mortgages.
On 7/2212009 a notice of foreclosure was filed against the individual by the primary
mortgage holder, Bank United, FSB. No documentation in the file indicates any
resolution to the foreclosure.
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INTERNATIONAL-
Emergency Hazard Grant - HHR
Account
Date Account # Description Payable To

12/1912005 103-9002-554.83-10 Rehab Grants Construc::tion
Martel
1213012005 .Rehab Grants Construction
Martel
1130120.06 103-9002-554.83-10 Rehab Grants ConstruGtion
Martel
1/30/2006 . 1 10 Rehab Grants Construction
31912006 103-9002-554.83-10 Rehab Grants Dean Screen iOg
Martel
31912006 .Rehab .Grants . Construction
Martel
51912006 103-9002-554. 83 .. 10 Rehab Grants Construction
5l9i2006, 1 05:-9507 , Contractual F.ees Omega Architect
61161200.6 10.3-9002-554.83-10 Rehab Grants Amoff Moving.
Other Grants &
9/29/2006 to:4-9400;5.54.83-40 Grimes Heatinil
Other Graf)ts &
10/4/2006 104-9400-554. 83;.40 Aids Grimes Heating
319i2oo7 Rehab Grants Joe Difrancesco
Total
Amount Check #
202007
$12,712.00 202264
'1.0QO.OQ 202671
$34,,0.00.00 202672
203599
.515000.0.0 . 203685,
$695.00 2.04858
$250.00. 204880
$1,475.00 20.5584
S3.350.oo 207661
$75.00 207810
5800.00 210870
. $t8,$6t.69
On 10/1412003 the applicant, an 85 year old woman, submitted an application for
Rehabilitation Assistance citing her gross yearly income as $7,236 and a household size
of one. The income bracket for this individual is "extremely low". The application was
completed on 1 0/1412003, two years before the award.
Contained in the file is a copy of Invitation to Bid and Bidders Acknowledgment
prepared by the City Purchasing Department indicating a bidder name of Martell
Construction and Development Inc. and that a bid due date and time was 7/1412005. No
other bids are contained in the file and the City website indicates Martell as the only
bidder at a Grand Total of $36,715.00. There are two bids in the file from this vendor,
one typed and one handwritten, both dated the same day. The handwritten bid provides a
Lump Sum amount of $36,715.00. The typed bid, which is entered on an identical form
with the same work description, provides a lump sum amount of $26,290. In an
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Interoffice Memorandum from the Purchasing Department to CSD dated 7114/2005 it
indicates that the bid was sent to 456 vendors, of which only 29 requested specifications
and 1 responded. A document in the file dated 8/19/2004 appears to be an estimate
prepared by the Housing Rehab Specialist in connection with this project. Noted on the
form is the name "Martell Const".
There is a change order in the file submitted 12/9/2005 in the amount of $41,300.00 with
numerous alterations and handwritten cross outs. A handwritten total is on the first page
in the amount of $35,519 which is crossed out and another handwritten total is noted of
$31,635. Some of the descriptions on the change order mimic work listed and charged
for in the original specifications. On 12/29/2005 another letter from Martell specifies an
additional $12,295 of work including replacing all doors, removing and replacing the
kitchen floor, removing wall window air conditioners, install new air conditioners,
installing heating and electrical services. On 112112006 another change order of
installing interior colonial doors (which appears to have been included in the previous
change order), installing special order windows, installing wrought iron doors for the
previously installed security doors, framing and sheet rocking new air conditioning unit,
hooking up washers, and additional electric work to bring home up to code in the amount
of $12,115. Yet another change order dated 2/25/2006 submitted by Martell totals
$13,175 which is crossed out and handwritten as $4,300. The two items that were
crossed out were the stucco of the exterior for $5,950 and a complete screen enclosure in
the amount of $2,925. On 3/6/2006 a revised "change order #1" was submitted in the
amount of $32,935. This is unsigned. On 3/9/2006 a fax is sent from Martell to CSD
indicating, "Please find revised letters in reference to Change Orders numbers 1 and 4 for
extra work ... I corrected your total on Change Order 1 amount to $32,935 (from $32,925).
The revised contract plus change orders 1 to 4 is $88,020 Grand Total."
Also contained in the file is a proposal from Dean Screening and Rescreening in the
amount of $5,500 to replace the screening on the screened patio. This was paid by CSD
on 3/9/2006.
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On 8/20/2003 the applicant and another party transferred the property solely to the
applicant. This transfer was recorded on 8/21/2003. On 10/21/2005 a mortgage was
recorded in the amount of $27,425, the terms of the agreement state that the mortgage
will be satisfied after one year and one day. The terms of the agreement should have
stated that the mortgage was to be satisfied over a period of six years as per the City's
guidelines.
On 6/28/2006 a mortgage was recorded with the Clerk of the Circuit Court erroneously in
the amount of $937,400. The actual amount should be $93,700. The repayment period
of the mortgage is stated to be over a period of six years and one day. The guidelines for
the repayment period for rehabilitation assistance provided through the HHR Program in
excess of $90,000 state that it shall be forgiven after thirty years. The annual
depreciation on the mortgage would be 1/30 per year. The repayment terms of the
mortgage violated the rules and regulations.
A letter dated 8/4/2006 from Brian D. O'Connor to Dennis Beach and David Recor stated
that both mortgages had erroneously been filed with incorrect satisfaction periods, and
that work had been done to extend beyond basic code violations and included general
conditions, including air conditioning and a screen porch. The letter also states that the
work done on the dwelling ($93,270) exceeded the 2005 assessed value of the home at
$32,976. This applicant refused to sign the mortgage notes and consequently the
satisfaction period was reduced from thirty years to six years. This coincides with many
statements Kessler heard during the interviewing process that if you complained enough,
you would get what you wanted.
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Date Account # Account Description Payable To
1211/2006 Grants Innovative Construction
12/15/2006 105-9507-554.83"10 Rehab Grants Innovative Construction
21t2)2f:J@7 1 0-}507 -554.83,. 1 0 \Rehab Grants
2/2212007 105-9507-554.83-10 Rehab.(3'rants Innovative Construction
2/2212007 105-9507-554.83- 0 Rehab Grants Kalina Walker
4/18/2007 105-9507-554.83-13 Housing.Replacement
6/2612007 105-9507-554. &3'-10 Rehab Grants [Arnoff Moving
6/26/2007 105'-9507-554.83-1,0 Rehab Grants ' Innovative Construction
6/26/'2SJ07 105-9507 -5M.831. 1 Q Rehab Grants ThreeG's, Illc.
11/1512007 105-9502-554.83-12 Disaster Recover Edwin Fry
11/15/200? 10Q-9507-554.83r15 Hazard Mitigation lJoe Difrancesco
irotal
Amount Check #
$10,200.00 208893
.$15000.00 209162
$5,928.00 2104'86
210575
$2,250.QO 210588
$500.QO 211599
$1,000.00 212864
$'10 '525.00 212970
$2675.00 21308.2
S4tSO 215296
$5950.00 21533.5
. $64.075.50
On 11/1/2005 the applicant completed a Housing Rehabilitation Assistance Application.
This applicant has an alleged household income of $9,152 and a household size of two.
The income on both the application and the FHF A Income Certification form has been
removed with correctional fluid and re-written by a CSD employee. The income bracket
for this household is "extremely low". It was also noted that the Verification of Public
Assistance form lists the number in the family as 1. The City of Fort Pierce Housing
Rehabilitation Program Income Eligibility form dated 3/9/2006 lists the applicant's
annual income at $14,300 and on an unemployment affidavit dated 1/6/2006 the applicant
states that they are not presently employed but anticipate becoming employed within the
next twelve months, and that based upon experience and skills and income history as
reflected in her income tax return for the most current year she expects to earn $20,000.
The form calls for a copy of the tax return to be attached. In none of the files Kessler
reviewed were tax returns encountered.
A mortgage dated 10127/2006 was filed with the Clerk of the Circuit Court on 11/1/2006;
this mortgage does not provide a mortgage amount but does provide a repayment period
of twenty years. An additional mortgage dated 111112007 was filed on 11/8/2007 in the
amount of $5,950; the satisfaction period of the mortgage is indicated to be five years and
one day, forgiven at 1/5 per year. This additional mortgage was recorded for services
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paid to Joe Difrancesco. The total expenses that should have been recorded to the
mortgage filed on 11/112006 were $64,028.
The spec sheets for this job were prepared in 412006 by CSD employees. There are no
copies of the bids in the file. On 6/1312006 a memorandum from CSD to the Purchasing
Department indicates the desire to have the subject property work rebid. A Purchasing
Department Memorandum dated 8/24/2006 has a notation applicable to the subject
property indicating that, "The invitation was sent to 549 vendors. 25 vendors requested
specifics with 8 responding plus 1 no bid." Next to the address of the subject property
the word Rebid is handwritten. A 9/1112006 memorandum from CSD to the Purchasing
Department indicates that, "Due to submission of incomplete bid documentation and bids
submitted by the contractors exceeding the maximum allocation please re-bid ... " On
1 0/1812006 a memorandum from CSD to the Purchasing Department indicates the
following bids applicable to this property:
B & E Builders & Designs $43,100.00
M. B. Brown Construction $47,660.00
Innovative Construction $41,200.00
Jacobsen Construction $51,500.00
MW Patrick No Bid
Saturno Construction $56,791.00
Terramar Construction $50,200.00
It appears that the bid was for four projects and although the tabulation of bids lists a
grand total for all four projects individual contractors were selected for each project. In
this particular case Innovative Construction was awarded the bid for $41,200. Contained
within the file was a change order typed by CSD employees and signed by the contractor
indicating $7,000 worth of additional work including the installation of hurricane
shutters, the removal and repair of corroded pipes, rewiring faulty wires, digging
underground lines, remove and replace drywell and remove and replace three windows
(glass only).
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Kessler did locate two Certificates of Final Inspection. One was dated 6/2212007 and the
other dated 11/8/2007 and signed by a building inspector on 11/712007 and also signed as
a final payment request by Joe Difrancesco. Two Contractors Final Invoice Release of
Liens and Warranty were also found in the file. One was dated 10/2712007 in the amount
of $41,200 for Innovative Construction of Treasure Coast Inc. and the other for $5,950
relative to Joe Difrancesco dated 111112007. The sum of the checks provided in this
project to Innovative Construction of Treasure Coast Inc. exceeds the $41,200 they claim
to have received in the release by $4525.
This applicant also received assistance for moving and storage and funds were paid to
Three G's Inc. to install a three ton air conditioner. There is no documentation in the file
to describe what work was done by Joe Difrancesco.
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On 10/1/20005 the applicant submitted an Application for Down Payment Assistance.
The applicant listed a household income at $43,198.56, with a household size of three
individuals. The applicant is in the "moderate" income bracket.
This individual purchased a home on 12/2212005. There are two HUD Settlement
Statements contained in the file both unsigned and undated. One has a fax transmission
header of 12/9/2005 and the other has a fax transmission header of 12/19/2005.
According to both statements, the house was purchased for $185,000, however all of the
other information on the form is different, including loan information regarding loans
from the City.
A first mortgage dated 12/22/2005 and filed 12/3012005 was secured from Harbor
Federal Savings Bank in the amount of $156,200. Another mortgage was secured from
the SHIP Program in the amount of $6,000; the mortgage was dated 12/22/2005 and filed
on 12/3012005. The repayment terms of this mortgage state that it will be satisfied after a
period of six years depreciating at $1,000 per year. A third mortgage was secured dated
12122/2005 and filed on 12/3012005 which is handwritten from the HHR Program in the
amount of $30,000. This mortgage contains a note indicating that payments are to
commence on 3/1512006 at a monthly rate of $96.49. The individual is to repay the loan
over thirty years at an interest rate of 1 %.
As a result of an inspection by the City, repair work (repair screen, install two GFIC,
install weather seal, install Greenfield in kitchen, repair bottom of cabinet) in the amount
of $1,500 had to be completed prior to the issuance of a mortgage. It is unclear how this
type of repair and electrical work would hold up a mortgage. According to the invoice in
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the file this work was ordered on 12/27/2005 and completed on 12/30/2005, signed off by
the Rehab Specialist. The work was conducted by the husband of a former CSD
employee. No licenses were found in the name of the husband with the Florida licensing
board. On a Comment Sheet contained in the file the Rehab Specialist notated that the
applicant selected a handyman of her choice to do some work for her. He claims he was,
"not aware of the choice until after the work had been done, but we have a handyman
rotation list we must follow and for future reference we will follow these rules." An
additional note dated 1/3012008 is cryptic in the respect that it states, "Applicant is unable
to be home during monitoring. She works in Vero Beach."
On 1111512007 a notice was filed by National City Bank f/k/a Harbor Federal Savings
Bank stating that they were seeking foreclosure on the individual. On 41212009 the
property was sold to another individual in the amount of $74,000, less than half the
original purchase price at a complete loss to the City.
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On 10111/2005 the applicants completed a Down Payment Pre-Qualifcation Sheet listing
the household income of $37,440 and a family size of three. They are in the "low"
income bracket. A notation in the file indicates that this applicant had been approved for
Pioneer Park. This property was purchased from Sunrise City CHDO (a contractor of the
CSD known for doing rehab work) for $150,000. A first mortgage dated 7/18/2008 filed
on 7/22/2008 was secured from National City Bank in the amount of $95,000.
The HHR mortgage dated 7118/2008 filed on 7/2212008 was for $40,000 at 0% interest
and was to be repaid over a period of thirty years. The terms of the agreement state that
monthly payments in the amount of $111 are to be made beginning on 811/2013. It is
unclear why such a lengthy deferment period was granted to this applicant and no
explanation is provided in the case file. An additional mortgage was provided to the
applicant from the SHIP Program on 7118/2008 in the amount of $15,000. The terms of
the SHIP agreement state that the mortgage is to be satisfied over a period of fifteen
years. No repayment is required on this mortgage which depreciates at the rate of$l,OOO
per year.
A sheet of paper in the file labeled ADDENDUM indicates that the contract dated
12129/2005 between the applicant and Sunrise City CHDO is amended to read $150,000
and the seller hereby agrees to pay for water and sewer hookups of $6,700 plus buyers
closing costs up to $3,300. This document is dated 412112008. Neither the closing costs
nor the water and sewer hookup appear on the HUD Settlement Statement. A check was
written to Fort Pierce Utility for $6,973.13 on 5/13/2008 for utilities hookup and deposit.
No mortgage was ever filed for this additional cost incurred by the City.
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This file contains two applications, one dated 9/1512005 for Down Payment Assistance
and another dated 10120/2005 for Down Payment Assistance. It is not clear why two
applications are in the file, except that the later application is missing a considerable
amount of information. The application dated 9/15/2005 shows income of $38,007.24 for
this applicant, the daughter of a City employee who lists her position from December of
2003 to February of 2005 as an assistant manager of Harbor Federal Savings Bank and
from February of 2005 to the date of the first application filed with the City as a staff
auditor for Harbor Federal Savings Bank. The applicant is indicated as belonging to the
"moderate" income bracket with a single occupant in the household. This individual
purchased a home in the amount of $175,000 on 4/2812006. Two HUD Settlement
Statements are contained in the file both dated 412812006. The first indicates a SHIP /
HHR mortgage in the amount of $26,543.62 and a SHIP mortgage in the amount of
$6,000, where the borrower was required to pay $425. The signed HUD Settlement
Statement indicates that a SHIP / HHR mortgage of $27,970 and a SHIP mortgage of
$6,000 were received from the City and the applicant received cash back at the closing of
$1,084.52.
A first mortgage dated 4128/2006 and filed on 512/2006 was secured in the amount of
$147,500 from Harbor Federal Savings Bank. The individual received funding from the
HHR Program in the amount of $27,970 on 4128/2006 and filed 5/9/2006. The terms of
the mortgage state that the individual is to repay it over a period of thirty years at 0%
interest. The monthly payments are indicated as $77.69 and the first payment date is
7/15/2006. Additional funding was provided on 4128/2006 from the SHIP Program for
$6,000. This mortgage, like many others Kessler reviewed, is self-depreciating with no
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payments required over a period of six years contingent upon the applicant remaining a
resident during that period.
On 3/6/2006 the original contract for purchase of a custom home was signed by the
applicant to have R & A Builders perform the construction. On 5/16/2007 a change order
between the applicant and R & A Builders for $18,152.19. On 6/20/2007 two checks
were issued from the Down Payment Assistance program for the benefit of the applicant
in the amount of $14,695.61 (check #212756) to R & A Builders, Inc. and $3,456.58
(check #213036) to R & A Builders, Inc. for work such as a blue pearl kitchen granite
countertop, a screen patio enclosure, gutters around house, and Fort Pierce utilities for
electrical hookup.
Account Check
6/20/20P7 105-9507-554.83-11 Down Payment R & A 13uilders $14,695.61 212756
6120/2007 Down Paj'ment R & A. Builders $3456.58 213036
Total $18,152.19
No addendums were made to the mortgage and it is unclear why this person received
these additional benefits from the City without having to repay them. There is no
additional documentation to support these checks and the person initially qualified for
only $30,000 in assistance. It should be noted that one of the individuals that approved
these questionable transactions was the mother of the applicant, who is also a City
employee.
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Case #47 - Eviction Prevention - HHR
An application was filed in July of 2007 for Housing Assistance. The household lists a
yearly gross income of $22,360 with two individuals. The income put the household in
the "low" income bracket as per the application. This individual is requesting total
assistance of $2,31 O.
A letter from the landlord dated 7118/2007 states that the individual is past due on $770
for the rent payment for May. On 8/8/2007 a check was written in the amount of $2,310
payable to the landlord.
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Case #48 - Housing Re-Entry Assistance - SHIP
Eviction Assistance - SHIP
An application was filed on 12/19/2007. This applicant lists a household income of
$29,140 and a household size offoUT individuals. The income bracket for this household
is "low".
On 8/8/2007 two checks were issued for the benefit of this applicant. One check was
payable to Grieco Management ($1,600) and the other was payable to Fort Pierce
Utilities ($400). This assistance was provided by the Housing Re-Entry Assistance
program of SHIP.
On 12/17/2007 a three day notice was sent from Grieco Management, Inc. stating that the
tenant was behind on rent for December 2007 ($750 plus $50 late charge). A handwritten
notation on the letter by a CSD employee lists payments for rent ($750) and late charges
($50) for December of 2007 and January and February of 2008. On 211112008 a check
request and authorization for a check in the amount of $2,400 and a check dated
2/29/2008 was issued. On 2/14/2008 a three day notice was issued stating the individual
was behind on rent in the amount of $2,250.
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Case #49 - Rehabilitation Program - HHR / SHIP
Account Check
Unillersal
5/13/2008 1 Rehab Grants Land $75.01:) 218'801
Miseellaneous
10/1/2008 105-9507 -554.49 .. 90 . ExPen$e . EdwinM. Ery $51.50 . . 221208
12/2912.008 103-901>2 -554.8.3-1 b Rehab Grants Arnoff Moving $2.249.50 222505
1U29/2008 105-9507 -554.83-10 . Rehab..Grants B & EBuilders '$.15' 222511
12129/2QQ8 105-.95.0:7 -554.8_3-10 Rehab Grants HertoGamez $800.00 222605
117/2'Q09 106-9509-554.83-10 _Rehab. Grants Herta .. Gamez $800.00 .222834
1/26/2009, .106-9509'-554. 83-10 Reha.b Grants Arnott Moving $300.00 222972 .
12J1312009 10&.9509-554.83-10 Rehab .Grants S& E Builders $8,000.00 223504
211312009 106-9509-554.83-10 Rehab Grants HertoGamez $800.00 223509 '
l21l9t2009 106-9509-554.83-10 Rehab Grants Amoff MOYina S3OQ"OO 223536
4/2/2009 106-9509-554.83-10 Rehat:> Grants Arneff Moving $300.00 .224330
Heriverto
4121.2.009 106 .. 9509-554,83-10 Rehab Grants Gamez $800.00 224428
41201200,9 1 01-95.09r554.83-1 0 ReMal:! Grants Amoff Moving $300.00
,,4I2.Ql2P09 106-9509-554.83-10 ,Rehab Grants : B.& E BuilderS $4,460.00, 224601
4129/20:09
;>
1 0 Grants Amoff Moving $812.50 224883 .
Heriverto
1512812P09 106-9509-554.83-1 0 Rehab Grants . Gamez $667.50. 225477
611 712009 1 Rehab B & E Builders $18,040.00 225627
Total . $53.isi.GO
On 11/112007 these applicants completed an application for Housing Assistance. Despite
the request this application appears to be regarding rehabilitation. The applicants list a
household income of $66,508. There are five individuals in the household and they are in
the "low" income bracket.
A bid tabulation sheet dated 7/31/2008 indicates that 35 bids were solicited with only 9
responding. The bid responses are as follows :
Redmarq Homes
Jacobsen Construction
B & E Builders & Design
M WPatrick
$18,750.00
$21,540.00
$23,200.00
$25,040.00
Miranda Construction & Development Inc. $29,018.00
Tri-R Construction Company, Inc. $31,408.00
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EMT General Contractor, Inc.
Florida Contracting Group, Inc.
Innovative Construction
Incomplete
Incomplete
Incomplete
B & E Builders & Design, Redmarq Homes, and Jacobson Construction all submitted the
lowest bids which were due on 7/31/2008 for the project. On 8/6/2008 Redmarq
withdrew their bid citing the inability to understand the specifications in the work order.
The bid was then awarded to Jacobson Construction on 8/11/2008, who then withdrew
their bid citing the inability to obtain proper insurance within the deadline. The bid was
then awarded to B & E Builders & Design on 9/2/2008. It is unusual that these issues
were not addressed during the pre-bid process. A review of the Florida Department of
State Division of Corporations records indicates that the bidder, Robert Abcug, operated
BAE Building & Design Inc. and that the corporation is inactive as of 3/3/2004. Proof of
Insurance documents submitted by the bidder indicates B & E Builders & Design LLC as
the certificate holder. This is a completely different corporation than the one that was
awarded the bid. It is unclear why CSD did not note these discrepancies before awarding
the bid. Over the period 11/15/2006 through 6/17/2009, B & E Builders & Design, a
non-existent entity, was awarded $264,689.50 for work under CSD programs. On
9/19/2008 a contract between B & E Builders & Design and the City was entered into for
the amount of $23,200 to conduct work on the applicant's property.
On 1/6/2009 a fax cover sheet incorrectly dated as 1/6/2008 was sent by B & E Builders
& Design LLC. The fax header indicates a phone number of (954) 984-4680
lEA_Engineers. lEA Engineers Inc. is also owned by Irving E. Abcug, the officer of B &
E Builders & Design LLC. The four page document accompanying the cover sheet is
written on B & E Builders & Design Inc. stationary but within the context of the letter
they reference B & E Builders & Design LLC. It should be noted that B & E Builders &
Design Inc. is not referenced in the Florida Department of State records as ever having
existed. This document outlines $13,500 in changes including the cryptically stated,
"additional required and homeowners requested work."
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A change order was also located in the file dated 51712009 identical in scope and
appearance to the change order submitted 11612009 in the amount of $22,500. The only
difference between the two documents is the price. On 6/4/2009 an additional work
authorization in the amount of $22,500 is prepared by CSD employees with no scope of
work listed and this document is attached to it. Four change order approvals totaling the
amount of $34,960 are contained in the file signed by the Rehab Specialist and the
Community Development Assistant Director dated 4113/2009. It is unclear how a change
order can be approved before it was submitted and payments were made on it before it
was approved on 411312009.
Also contained in the file was a Payment Request that was signed by the contractor and
the property owners that was otherwise left blank. This blank document was duplicated
and the blank information was completed in five separate versions, one dated 21212009
for $8,000, another dated 4113/2009 for $4,460 and a third dated 5/6/2009 for $4,460 and
a fourth dated 6/312009 for $18,040 and a fifth dated 6/4/2009 for $18,040.
On 911912008 a mortgage is signed by all parties and notarized indicating an amount of
$23,200 which depreciated 1110 per year and would be satisfied over ten years. This
mortgage is not filed. Instead, another mortgage dated 911912008 was executed with the
applicants despite the fact that the mortgage is in one person's name and filed on
9/24/2008 with the Clerk of the Circuit Court. No dollar amount is affiliated with this
mortgage. The satisfaction period for the mortgage is defined as ten years, to be satisfied
by continuous residency at the property. It should be noted that the homeowners' first
name is incorrectly spelled and filed with the Clerk of the Circuit Court.
Additional funds were withdrawn from the SHIP Program in the amount of $18,040, yet
Kessler's review uncovered no additional mortgage or amended mortgage.
A Payment Request form was submitted on 4/13/2009 approving the partial payment of
$4,460 of a change order for $22,500, and the check was issued on 4/20/2009. Kessler
noted three different Payment Request forms were completed by CSD employees
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regarding the remaining sum of the change order for $18,040. The three Payment
Request forms were submitted and approved on 5/612009, 6/3/2009 and 6/412009; these
forms are identical and appear to be written on a copy of the signed but otherwise blank
Payment Request form found in the file. The remaining sum of the change order was
paid on 611712009 in the amount of $18,040. The final inspection on this construction
was conducted on 5/6/2009.
Additionally an individual received $3,867.50 in rental assistance for the housing of the
homeowners while the dwelling was under construction. This individual is a possibly
related to the applicant's wife, again demonstrating the probability that relatives are
receiving rental assistance from the City to house displaced applicants during
rehabilitation.
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Case #50 - Disaster Recovery - SHIP
Account Check
All Shu-tters &
8/812006 104-9400-554.83-40 Other Grants & Aid Sere,ens $4,045,50 20SJ>62
All Shutters &
11/1/ZQQ6 1 ,_Other Grants .& Aid Screens. $3,163.00 208228
All Shutters &
12/1512006 104--9400554.83-40 Other Grants & Aid Screens $882.00 209035
Total $8,090.50
On 6/29/2006 this applicant submitted an application for Disaster Recovery Assistance
from the SHIP Program. This applicant reported a gross yearly income of $52,194.64
and the household income bracket is "moderate". The household reports one occupant.
On 6/28/2006 a proposal was provided by All Shutters & Screens, Inc. detailing the
installation of seventeen accordion style shutters for $8,091, as well as a proposal from
Jacobson Construction for $7,400. All Shutters & Screens, Inc. was awarded the job, and
three payments were remitted to All Shutters & Screens, Inc. between August 2006 and
December 2006 totaling $8,090.50. It is unclear why the low bidder was not awarded
this project.
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REACH Program - HHR Land Acquisition
Funds for the REACH (Reforming Employees with Assisted Collaboration for
Homeownership) Program - HHR Land Acquisition were available to individuals to
purchase lots within the City limits of Fort Pierce for newly constructed or existing
homes for, "essential services personnel for use as their principal residence."
Construction was required in a designated target area for Phase 1.
According to the City "essential services personnel":
Is defined as persons in need of affordable housing who are employed in occupations or
professions that include, but not limited to local or state law enforcement, fire, rescue,
emergency services and management, public safety, educators, school district personnel
in the public, private, college and university systems; health care professionals and
support personnel, tourism industry professionals and employees, judicial/court system
management and support personnel, service industry personnel (including child car,
hospitality and food service) and other job categories as required by Section
420.9075(3)(a), F.S.
The definition of "essential servIces personnel" was altered by the City from the
definition set forth on the Florida Statutes for the State of Florida. The state statute
420.9075(3) (a) defines "essential services personnel" as follows:
Each local housing assistance plan shall include a definition of essential service
personnel for the county or eligible municipality, including, but not limited to,
teachers and educators, other school district, community college, and university
employees, police and fire personnel, health care personnel, skilled building
trades personnel, and other job categories.
Qualified applicants also had to meet income eligibility categories considered "very low",
"low" or "moderate", or below 120% of the median income. Kessler was advised by
CSD employees that a special program had to be developed on an expedited basis in
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order for the City not to lose the funding previously given for distribution from the State
and Federal government. Kessler was also told that, "We had to spend it, or lose it."
Kessler was then informed of the process required in order to qualify for REACH
funding.
Kessler was advised that a Pre-Determination Form had to be completed by the applicant
as the first of two steps in the application process. The Forms were said to be available to
the public between 4/14/2008 and 5/14/2008 at the Community Services Office and had
to be submitted to the CSD office before 5:00PM on 5/1412008 in order to be considered.
The ad placed in the Scripps Treasure Coast Newspapers relative to the program
specified that there would be NO EXCEPTIONS to this statement. This correlates
directly with section 4(b) of the Florida Statute 420.9075 as seen here:
(b) The county or eligible municipality or its administrative representative shall
advertise the notice of funding availability in a newspaper of general
circulation and periodicals serving ethnic and diverse neighborhoods, at least
30 days before the beginning of the application period. If no funding IS
available due to a waiting list, no notice of funding availability is required.
A review of the Pre-Determination documents provided to Kessler indicated that a
sizeable number of documents were contained in the file dated prior to 4/1412008, the
date specified to be the first date in the ad that the Pre-Determination form completed by
applicants would be available to the public, as well as numerous documents dated after
the 5/1412008 cutoff date. This practice of accepting applications prior to the date the
form was eligible to the public and after the cutoff date is a complete disregard for
guidelines set forth in the public advertisement.
Kessler also reviewed the dates listed on the Pre-Determination forms of those applicants
whose requests were approved. Kessler found many Pre-Determination forms completed
by applicants who did not receive funding submitted prior to the forms submitted by the
applications that were approved. Not only were they submitted prior to the applications
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that were approved but their occupations were clearly in conformance with the "essential
services" requirements outlined in the Statute, (ie; probation officer, animal control
officer, City of Fort Pierce Public Works, St. Lucie school teacher). The individuals who
were approved included several whose occupations were on the outskirts of what would
be considered acceptable including daycare teachers, cosmetology instructor, Publix clerk
and Patient Account Specialist. One individual, a daycare teacher, had a letter in the file
indicating that she was employed when she submitted the application in 5/512008 and
was subsequently laid off the month after the application. The applicant states that
another job was taken in September of 2008, but there is no documentation in the file
indicating that CSD staff verified the new employment.
Kessler also noted that the two individuals who were City employees placed outside of
the target area submitted their applications prior to the allowable date and the notation is
made by a CSD employee that they were re-submitted all on the first day applications
were acceptable. It should be noted that a new application is not contained in the file. It
is unclear why these two City employees were awarded funds to go outside the target
area and in fact on a correspondence dated 4117/2008 one of the applicants indicated that
she was not interested in the target area for Phase 1 and requested her name be placed on
a waiting list outside the designated area if funds become available. Additionally, on a
letter dated 4/4/2008 from CSD to the other City applicant placed outside the target area
indicates that all applications received prior to 3/28/2008 were cancelled and individuals
would need to reapply. The letter goes on to state an apology for the inconvenience
caused by the premature intake of applications, "however, this division is governed by
Federal and State rules and regulations." On the letter stamped received 4/412008 City of
Fort Pierce Community Development and above it in handwriting is the words ''NOT
INTERESTED IN TARGET AREA."
Although not advertised in any public record nor could Kessler find any documents
pertaining to Phase 2, Kessler was informed that two individuals qualified after Phase 1
was completed. Kessler was told that if an individual was not interested in the target area
for Phase 1, that they could be placed on a waiting list to be notified if funds became
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available for purchasing a home outside this designated neighborhood. Kessler have
found that of the twelve individuals selected for the REACH Program housing in Phase 1,
three were related individuals, and for Phase 2 the individuals selected were the two
previously referenced City employees.
Kessler has also found that the mortgages for Phase 2 were executed on 8129/2008 and
filed with the Clerk of the Circuit Court on 9/3/2008 and the mortgages for Phase 1 were
all filed on 6/3/2009. During an interview with CSD employees it was determined that
the Phase 1 bids were to be completed before the issuance of funds for Phase 2, but this
was not the case. According to the bid tabulation sheet the opening of the bids for Phase
1 construction was on 9123/2008 at 3 :OOPM. It is unclear how a determination was made
that monies were available for Phase 2 before receiving the bids for Phase 1.
As per Kessler's review of the Hurricane Housing Recovery Program (Land Acquisition)
(Exhibit 3) provided by the City, it outlines that the maximum award was $100,000, yet
all the recipients exceeded this amount. The guidelines set by the City also state:
A mortgage in the amount of the appraised value at the time of construction will
be recorded against the property. A deferred payment loan @ 0% interest due and
payable upon sale, transfer or rental of residence for very low income families.
Low and moderate income households will receive a zero (0%) to five (5%) low
interest, direct loan with up to the maximum of a 30 year repayment period, or a
combination for low and moderate income families. Interest rate will be
determined on a case-by-case basis. Loans will be due and payable upon sale,
transfer or rental of residence.
The CSD violated the City's rules and regulations regarding the HHR Land Acquisition
program, all individuals of the Phase 1 REACH Program received a loan of greater than
$100,000 at 2% interest. No deferred loans were given to individuals with low income as
per the guidelines set by the City.
125

KESSLER
INTERNATIONAl
It has also been determined that the contracts awarded to the three contractors for the
REACH Program went over budget in the amount of $36,252.68 as noted below.
Amount Contract Change Irreconcilable
Contractor Disbursed Amount Difference Orders Difference
Hartnett BuTldin!iJ GrolJ.lJ), LLC $527.893.54 $516,.800.00 $11 ,096.54 $11 ,09-3.5'4
S & V American Contractors $6;01,665.06 $588,000.00 $13,665.06 $7,115.00 $6,550.06
RP Witt Canstruetion, Inc. $611;494.08 $600000.00 $11A94.@8 $11,494.08
Total $1,741,052.68 $1,704,800.00 $36,252.68 $7,115,00 $29137.68
Kessler also conducted an analysis of the cost of construction, loan amount provided and
the mortgage that the individual applicant received. This analysis is broken down by
contractor and included below.
126

KESSLER
lNT'ERNAnoNAL"
5 Salary Understated
6 Changed
7 Date Changed
127

KESSLER

A review was conducted of the two City employees who received REACH funds for
dwellings outside of the target area.
City Employee 1 - Case #51
The borrower received a thirty year mortgage in the amount of $250,000. The original
interest rate for the borrower was 3% and now has been reduced to 1 %, due to an alleged
miscalculation of the CSD in calculating mortgage payments. The change in interest rate
was never reflected with the Clerk of the Circuit Court. It should be noted that Kessler
does not have any documentation contained in the file pertaining to a 3% amortization
schedule.
Kessler spoke with this borrower, who stated that she received $3,823.37 cash back at the
closing. Records contained in the file indicate that she provided only $1,000 as a deposit.
This is despite the fact that she claims to have contributed more and that the HUD
Settlement Statement is wrong. The individual stated that payments were made to the
seller as a deposit in the amounts of $1,400; $1,400; $1,000 and $800 (totaling $4,600),
but these amounts are not reflected in the HUD Settlement Statement. When Kessler
requested copies of the cancelled checks, the individual stated that she does not have the
account anymore and would not be able to provide copies of the cancelled checks.
Kessler has determined that these excess funds should have been provided back to the
City and put into escrow for future payments of insurance and taxes.
8 The interest rate as per the mortgage filed with the Clerk of the Circuit Court is 3%, the rate at which the
applicant is allegedly paying is 1%
128

KESSLER
INTERNATIONAr'
City Employee #2 - Case #52
This individual received a thirty year mortgage from the REACH Program Phase 2 in the
amount of $133,000. The mortgage was filed on 9/3/2008 at an interest rate of 4%, but
the amortization schedule and monthly payments reflect a 1 % interest. No amended
mortgage was filed to correct this issue. It should be noted that Kessler doesn't have any
documentation contained in the file that has a 4% amortization schedule nor is it clear
why the other City employee was given a lower interest rate although her mortgage was
higher.
The original interest rate for the borrower was 4% and now has been reduced to 1 %, due
to another alleged miscalculation of the City. The change in interest rate has not been
reflected with the Clerk of the Circuit Court.
The borrower also covered the closing costs of the home of $1,782.07, unlike the
previously referenced Phase 2 recipient, whose closing costs were paid by the seller.
9 The interest rate as per the mortgage filed with the Clerk ofthe Circuit Court is 4%, the rate at which the
applicant is allegedly paying is 1%
129

KESSLER
INTERNATIONAL-
CONCLUSION
The illustrations disclosed in The Kessler Report have highlighted the actions of a few
City employees both inside and outside CSD. These employee's actions have brought
into question the creditability and integrity of other City staff, many of which are
dedicated hard working employees. The few have served to undermine the public's
confidence and trust in the entire City.
Based upon the findings in the report Kessler suggests that a complete audit be conducted
on the CSD and other areas of possible weakness as identified within this report to
determine the true loss to the City. A complete review and revision of the policies and
procedures must be performed.
Kessler also recommends that specific areas of concern should be investigated including
a review of CSD expenses and travel accounts, mortgage payments and settlements by
applicants, the return of rental deposits from the landlords and investigations be
conducted to determine if applicants still reside in the properties taxpayers fund for
rehabilitation and down payment assistance as is required. Additionally, a complete
review of all disbursements made by the CSD through these programs should be
conducted to determine any other instances of possible fraud.
130

KESSLER
INTERNATIONAL-
INDEX
A
Abbiejean Russel Care Center 70
Account Description Payable 35, 79, 81, 107, 115
actions, employee's 4, 130
agencies 37-8
Agent, applicant's 95
agreement 48, 56, 78-9, 83,97, 99, 103, 106, 112
Aids Grimes Heating 104
air purifiers 20
American Contractors 33, 126
amortization schedules 23, 57, 128-9
Amount Check 43, 46, 76, 79, 83, 89, 104, 107, 115
Amount Interest Income Level 126
applicant 6, 11, 18-20, 29,47-9, 53, 67-8, 70-3, 75-9, 81-6, 88-92, 94-104, 106-7, 109-14,
123-4, 126-30
applicant claims 92
applicant lists 116
applicant transfers 70
applicant's death 70
applicant's forms 6
applicants list 59, 117
applicant's niece Betty Hunt 70
Application 6, 11, 18, 24, 27, 29, 47, 67-8, 81-4, 88-90, 95, 98-101, 103-4, 113, 115-17,
123-4
changing 18
credit 84
draft 19
typed 92
Application Completed 127
Application for Down Payment Assistance 110
Application for Weatherization Assistance Program 79
application period 123
Application Process 6, 123
Artenal Construction Company 27, 95
assets 11,44,47, 77, 95
Assistant Director 28, 37-8
Attorney 71, 95
Attorney Affidavit 71
AUDIT 3-4,6-7, 19, 24, 28, 33, 35, 37, 76
Avenue 23, 26-7, 34
award letter 41, 91, 97
Awards 9, 22, 24, 64, 96-7, 104
applicant's 41
B
Baby Eagles Childcare Center 68
Balance 60, 75, 77, 84, 99
Bank 33, 40, 50, 54, 67
Bank United 63-4, 103
Baptist Church 35, 72, 95-6
Barnes
Betty 27-8
Betty J. 26-7
131

KESSLER
INTERNATIONAl:
bathroom vanities 82
bedrooms 81
bid documentation, incomplete 108
bidders 4, 72, 82, 104, 118
bids 3,20,28,33,43,45-6, 51, 72, 77,81-3,85,95-6, 104-5, 108, 117-18, 125
awarded 71
handwritten 104
low 21
lowest 20, 118
page 95
submitted 77
third 96
typed 104
undated 95
winning 43
bids lists 108
bids ranging 82
block, concrete 96
Bookkeeping & Financial Services 26
borrower 40-2,48, 51-5, 57, 60, 63, 67, 90, 99, 102-3, 113, 128-9
Brown Construction 44-6, 50, 75, 108
Brown Construction Co 45, 49
budget 7, 126
Builders 85-6, 114, 117
Builders & Design 85, 108, 117-18
Builders & Design Inc 85, 118
building inspector 24, 85, 96-7, 109
Building Materials 16, 95
business 18, 30
buyers 88, 112
c
calculation 11, 22, 55
Carpenter, Emma 71
case files 38, 61
applicant's 7
fifty 33
case Kessler 57
cash 29, 58-9, 113, 128
CBDG 7,10
CDBG (Community Development Block Grant) 9, 13
change 23, 126, 128-9
change order 20-1, 24, 33, 43, 45-6, 72-5, 78-81,83,85,97, 105, 108, 114, 119-20
change order mimic work 105
Chart 35, 76, 78
Chase Home Finance 86
Church 35
Circuit Court 23, 26-7, 30-1, 40-1, 49, 51, 55, 63, 67, 70-2, 74-5,84-5,88, 106-7, 119,
128-9
City 3-7,9-12, 17-20, 22-3, 26-9, 31-3, 35-7,41-4, 54-5, 60-5, 67-8, 71-4, 89-91, 97-100,
110-14, 128-30
City applicant 124
city employees 4,6, 10, 20, 22-3, 31-2, 35-7, 45, 65, 67-8, 83, 91, 102, 113-14, 124-5,
128-30
City finance employee 6
city limits 13
City listing 83
City mortgages 22, 53-4, 67, 82, 88, 94, 99
132

KESSLER
INTEftNATKlNAC
City of Fort Pierce 6,9, 14, 18, 56, 70, 107
City of Fort Pierce Community Development 124
City of Fort Pierce Community Services Division 3
City of Fort Pierce Conventional 128-9
City of Fort Pierce Public Works 124
City of Port 15
City Officials 5
City position 32
City Promissory Note 26
City Purchasing Department 34, 37, 104
City staff 3, 5, 130
City to National City Bank 50
City website 72, 104
City workers 3-4
City's guidelines 106
City's Rehab Specialist 12, 14
City's rules 125
civil infraction 19
clause 56
Clerk 23, 26-7, 30-1,40-1,49, 51, 55, 63, 67, 70-2, 74-5, 84-5, 88, 106-7, 119, 128-9
Client 89
co-applicant 67, 89-90
Coastal Group Investments 29-30
Coastal Home Inspection 30
Code 4, 15, 20, 24, 37, 74, 76, 89, 105
code violations, correction of substantial 12-13, 15
Commencement 27, 32
Community Block Development Grant 7, 10
Community Development Block Grant, see CDBG
Community Service Specialists 18-19
Community Services Housing Assistance Programs Repayment 9
complain 20
conduct 4, 6, 19-21, 24, 81, 90
Connections to City Employees 36
construction 12, 15-16, 22,49-50, 60-1, 70, 72-3, 75-6, 79, 96, 104, 114, 120, 122, 125
complete home 20
cost of 126-7
Construction, Ross 77
construction company 28, 117
construction industry 36
contract 4, 18, 33, 74, 78, 96, 112, 114, 118, 126
contractor Joe Difrancesco 74
contractor Sunrise City CHDO 96
contractors 3, 7, 10, 18, 20-2, 24, 27-8, 31-3, 49, 70- 3, 75-8, 83, 96-7, 108, 118-19, 126
Contractors and Change Orders 20
Contractors Application 9
Contractors Final Invoice Release of Liens 27
Contractors Final Invoice Release of Liens and Warranty 109
contractors license 28
Contractors List 9
contractor's rep 27
Contractual Fees Sunrise City 61
copy 19, 27, 34, 38, 52, 90, 104, 107, 120
corporations 4, 7, 26, 28-9, 31, 34-5, 37-8, 118
corruption 4
cost 20-1, 24, 45, 49, 60, 70, 77, 79, 85, 90
closing 12, 58, 88, 112, 129
county 15-16, 31, 40, 49, 122-3
County and City of Port 15
133

KESSLER

couple 56, 58, 91
CSD 3-4, 6-7, 18-23, 28-9, 33-4, 37-8,41-2,45, 70-1, 73, 75-6, 90, 95-6, 101-2, 108, 130
CSD bids 20
CSD Employee Corporation 29
CSD employee lists payments 116
CSD employees 3, 6, 18-21, 23, 27, 29-30, 32, 37,48-9, 67-8, 70-1, 78-9, 95-7, 107-8,
119, 124-5
CSD employees egregious errors 19
CSD Rehab Specialist 74, 79
CSD staff 3, 20, 23, 73, 75, 124
cutoff date 123
D
Date Account 35,43,46,50-1,61,69,73,76,78-9,81-3,86-7,89,95, 104, 107, 114-17
Date Lending Institution Type Amount Terms 40,42, 53-4, 56-9, 64-5, 67, 88, 92, 94, 98-9,
101, 103, 110, 112-13
Date of Application 127
daughter 33, 37, 75, 113
day applications 124
debt 22,49
Deed 26, 30, 51, 55, 126-7
Deferred Loan Housing Programs 13
deferred mortgage 42-3, 45, 54, 63, 88, 101
amended 45
deferred mortgage loan 13
deferred payment loans 13, 125
defraud 19, 30
Demolition 21, 60, 70, 72, 97
Demolition & Consulting Contractors 91
demolition costs 62, 91, 97
department 18, 28, 32, 48
deposit 33,62, 77, 99, 103, 112, 128
security 23, 48, 87
depreciates 43, 49, 53, 56, 71, 94, 98-9, 112
Difrancesco, Joe 108-9
Director 28, 31, 35-6
Disaster 13, 37
Disaster Assistance Program 10, 16
Disaster Relief Home Assistance Program 61
Disbursements 27, 31, 34-6, 44-5, 49, 70, 74, 130
discrepancies 6-7, 11, 32, 39, 41, 46, 67, 97, 118
displaced applicants 120
DOCUMENTS 1, 3, 6-7, 9, 11, 19, 21, 26-9, 41-2, 47-9, 70, 75-6, 89-90, 95-6, 119, 123-4
documents Kessler 33
down payment 12, 15, 41, 64, 68, 72, 98, 114
down payment assistance 4, 12, 16, 41-2, 53-9, 63-5, 67-8, 84, 88, 92, 94, 98-9, 101, 103,
110, 112-13
Down Payment Assistance Note 40, 56
Down Payment Assistance Program 34, 40, 114
During Kessler's review 45
dwelling 20, 24, 37, 64, 74, 106, 120, 128
E
e-mail 31-2
examined City 7
educators 122
electrical outlets 81
134

KESSLER
INTERNATIONAl-
eligible applicants 12, 15-16
homes of 12, 14
Emergency Repairs 12
employees 4-5, 7, 9, 18, 20-4, 29, 31, 35,45,47,68, 87-8, 122, 130
prospective 37
employer 47, 100
entity 31, 34-5, 37
entry 89,96
equity 11
errors 19, 23, 71
experience 23-4, 36, 38, 107
F
failure 3, 29, 34, 60
faucet 82
fax transmission header 110
Federal Home Loan Bank of Atlanta 56
Federal Home Loan Bank of Atlanta Deferred 56
file 20-1, 29-34, 40-2, 44-5, 48-53, 63-5, 67-8, 70-2, 74-6, 78-9, 89-90, 95-7, 99-105,
108-13, 119-20, 123-4
applicant's 49
cases 7
digital 9
examined 3
file Kessler 45, 51, 70, 75
Final Inspection 27, 51, 73, 75, 78, 80-1, 83, 85, 96-7, 109, 120
Finance Department 7,63, 67-8, 70, 75,88,92, 103
Finance Department and Kessler 66
first mortgage holder 61, 64, 91
FL 26-7, 29-30
Florida Community Development Association 2, 38
Florida Contractors 51
Florida Department of State 26-7, 29-31, 118
Florida Housing Coalition 38
Florida Housing Finance 40, 88, 92, 101
Florida Housing Finance Corporation 33,40, 54, 61, 71, 88, 92, 101
Florida Statutes 11, 122-3
Foreclosure 41,64, 103, 111
Foreclosure Assistance Program 68, 86
Foreclosure Prevention 49-50, 67, 84
Fort Pierce 17, 26-7, 30, 34, 36, 67, 114
city limits of 11, 14-16, 122
Fort Pierce Housing Rehabilitation Program Income 107
Fort Pierce Hurricane Housing Recovery Program 56
FPHA 74-5, 77, 79, 81-3
fraud 3-4, 7, 28, 130
Friendship Missionary Baptist Church 35
FSB 103
furniture 46
G
Gamez 117
General Ledger Kessler 31
girlfriend 92
Grand Total 104-5
grandchildren 77, 84, 86
grant applications 6
135

KESSLER
INT'ERNA.TK>NAL
grants 6, 10, 18, 31, 104
Grants & Aids 36, 76, 79, 82-3, 121
Grants & Aids Ross Construction 73, 78
Grieco Management 116
gross income
annual 56, 58
yearly 47, 79, 82, 98, 115
guidelines 7,9-11, 14, 17, 20-1, 36, 56,64, 106
guidelines set 123, 125
guilty 19
H
handwritten 53,81, 83-4, 104-5, 108, 110
Harbor Federal Savings Bank 22, 33, 40, 42, 53-4, 56-9, 67, 77, 88, 90-3, 110-11, 113
Harbor Federal Savings Bank Conventional 42, 54, 56-8, 67, 92, 110
Hartnett Building Group 126
health 12, 14, 122
Heriverto 117
HHR 7, 9-10,42,47-9, 52-4, 56-61, 63-5, 67, 84, 87-9, 92, 94-5, 101, 103-4, 110, 112-13
HHR and SHIP Programs 64
HHR Land Acquisition 122
HHR Land Acquisition program 15, 125
HHR mortgage 53, 68, 101, 112-13
HHR Program 23, 40, 42, 53-4, 56-8, 61, 63-5, 86, 92, 94, 103, 106, 110, 113
HHR Program mortgage 53
HHR Programs funding 57
HHRP (Hurricane Housing Recovery Program) 2, 10, 14, 125
holder, primary mortgage 33-4, 103
Home 10,14-17,22-3,28,33,42,53-4,57-8,60-1,63-5, 76, 90, 98, 101-3, 105-6, 110-
11
constructed 12
custom 20, 114
individual's 49
nursing 60, 70
substandard 15
Home Depot 20, 36
homeowner states 78
homeowners 12-13, 16, 85, 99, 118-20
eligible 14, 16
Homeownership 122
house 21, 36, 70, 72, 74, 78-9, 82, 87-9, 95, 102, 110, 114, 120
household 13-15, 26, 47, 63, 68, 70, 73, 75, 77, 79, 82-4, 86, 98, 107, 113, 115-17
household income 77,87,89, 101, 110, 112, 116-17
household size 94, 98, 100-1, 104, 107, 110, 116
Housing 15, 61, 69-70, 89, 95, 120, 122
Housing and Urban Development Audit Report 9
Housing assistance 13, 48, 101, 103, 115, 117
Housing Assistance Application 86
Housing Re-entry Assistance 15, 116
Housing Re-Entry Assistance program of SHIP 116
Housing Re-Entry Shameka Moss 43
Housing Rehab Specialist 105
Housing Rehabilitation Agreement 26, 45
Housing Rehabilitation Assistance Application 86, 107
Housing Rehabilitation Assistance Programs 9, 13
Housing Rehabilitation Programs 13
housing rehabilitation work 26
Housing Replacement Construction Agreements 96
136

KESSLER
INTERNA.1KriA1:
Housing Security Program 14
HUD 32, 38, 110
HUD Settlement Statement 41-2, 63, 65, 88, 90, 92, 100-1, 112-13, 128
Hurricane Housing Recovery 7, 10, 14
Hurricane Housing Recovery Program (HHRP) 2, 10, 14, 125
husband 29-30, 54, 68, 111
husband's name 54, 67
I
Idella Siplin 27
inability 118
income 11-13, 24, 29, 53, 55, 68, 75, 77, 83-4, 92, 103, 107, 113, 115
Income Bracket 60, 69, 75, 77, 79, 82-4, 95, 98, 100-1, 103-4, 107, 112, 115-17
moderate 110, 113
Income Bracket Low 48, 51, 54, 57, 64, 67, 74, 77, 83, 88, 92, 94, 98-9, 103, 112, 116-17
Income Bracket Moderate 42, 45, 47, 58, 87, 89, 110, 113
Income Bracket Very Low 40, 43, 49, 52-3, 56, 59, 61, 63, 65, 75, 79, 81-2, 101
income limits 73
Income Tax 29
individuals 3-4, 18,21,23-4,26,31,38,42,48,51,53,68,75,99-101, 114-17, 124-5
individual's name 47, 98
individuals names 19
Innovative Construction 43-4, 71, 108
Innovative Construction of Treasure Coast 71-2,95
Innovative Construction of Treasure Coast Inc 109
Inspector General 33
install 79-81, lOS, 109-10
Institution Type Amount Terms Interest 63, 128-9
interest 11, 13, 40, 42, 53-4, 56-61, 64-5,88, 90, 92, 94, 98-9, 101, 103, 112-13, 125
conflicts of 3
low 13, 125
material 31
interest loan 42, 57
interest mortgage 45
interest payments 57,64,92
interest rate 23, 90, 110, 125, 128-9
interview process 18
INTERVIEWS 1, 18, 21-4, 29, 125
interviews Kessler 18
Invoice 33, 46, 51, 70, 79, 84-5, 110
J
Jacobsen Construction 108, 117
Jacobson Construction 44, 118, 121
job categories 122
jobs 20,43, 77, 79, 82, 108, 121, 124
K
Kelly, Rachel 96-7
Kessler 3-4,6-8, 10-11, 17-24,26-38,43-5,49-50,52,61,67-8,73,75-6, 90-1, 99-100,
122-6, 128-30
audit 9, 22, 25, 34
discrepancies 4
discrepancy 74
examples 6
files 29, 107
137

KESSLER

informed 21-2, 35-6
interview process 24, 37
reason 18
Kessler audit 3
Kessler contact 35
Kessler International 5
Kessler Report 4-5, 130
Kessler rumors 24
Kessler's attention 23, 37, 45
Kessler's audit 11, 31, 36
Kessler's databases 99
Kessler's forensic audit 7, 91
Kessler's Fraudbusters 4
Kessler's investigation 68
Kessler's review 20, 29, 33-4, 39, 46, 48-9, 55, 64-5, 119, 125
kickbacks 18, 24
knockdown texturing 46
L
landlord 4, 23-4, 33,47-8, 52,87, 100, 115, 130
Lending 63, 128-9
lending institutions 34
letter 32-3,41, 50-2,65, 70-1, 73, 78, 96-9, 102, 105-6, 115-16, 118, 124
leverage 13-14
LHAP (Local Housing Assistance Plan) 2, 10-11, 122
Liens 32, 89, 96, 109
List of City Employees 10
living space, creation of additional 12-13, 15
LLC 85, 126
Loan 13,40,42, 56, 58, 60, 65, 67, 71, 86, 90, 99, 110, 125-6
Loan Amount Interest Income Level 127
Local Housing Assistance Plan (LHAP) 2, 10-11, 122
low income families 12, 15-16, 73
Lump Sum amount 104
M
Martel 104
Martell 104-5
Mary Patricia Matthews 26-7
Maximum award 12-16, 125
members 22, 35, 38, 68, 84
Memorandum 70, 75, 108
miscalculation, alleged 128-9
Miscellaneous Expense Terramar Construction 81
mismanagement 3-4, 28
moderate 73, 121-2
moderate income families 12, 15-16, 125
moderate income households 11, 125
Monarch 82-3
Monarch Properties 77,82-3
open 77
money 3, 18, 22-3, 28, 76, 98-9
Moniker Hunt 71
month rent 23, 48
Morgan 26-7
mortgage 19-20, 22-3, 40-3, 49-51, 53-61,63-5, 67-8, 71-5, 78-9,90-2, 101-3, 106-8,
110, 112-14, 119, 128-9
138
~
KESSLER
I ~ N ~
additional 43, 56, 61, 63, 71, 85, 92, 107, 112, 119
amended 49, 60, 63, 81, 88, 90, 101, 119, 129
applicant's 53
draft 51
first 22, 40, 42, 53-4, 56-8, 63, 65, 67, 82, 84, 88, 90, 92, 94, 98-9, 112-13
funded 78
notarized 40
third 63, 67, 84, 110
mortgage agreement 99
mortgage amount 43,49,80, 90, 97, 107
mortgage applicants 18
Mortgage Deed 26
mortgage documents 19,41, 49, 65
mortgage funds 7
mortgage lists 49
Mortgage Note 40, 75, 84, 88
associated 84
deferred payment 75
mortgage payments 4, 12, 22, 68, 130
calculating 128
delinquent 13
mortgage repayment terms 63
mortgage states 43, 74, 84
Mount Zion Missionary Baptist Church 28
municipality, eligible 122-3
N
names 19, 26-7, 34, 51, 54-5, 77, 79, 83, 99, 102, 105, 111, 119, 124
National City 50
National City Bank 22, 33, 53, 59, 63, 88, 98, 100-1, 111-12
National City Bank Conventional 53, 59, 88, 101, 112
National City Mortgage Conventional 98-9, 113
New Mt 72,96
north 23, 26, 30
notary 19, 70
o
Oaks 15, 28-9, 36
occasions 23, 34, 48
occupants 77, 82-4, 86, 89-90, 121
occupations 122, 124
occupied single family homes 15
officer 31,68, 118
ala Mae Morgan 26
Olive Program The Ship Foundation 35
order 7, 18, 53, 87, 123, 126
organization 18, 34-5
owner 12, 30, 56, 75, 96-7
ownership 56, 75
p
Part 3, 12, 15, 23, 28, 71
patio 34
Payment Request forms 119-20
payments 26, 45, 48, 61, 63, 65-8, 79, 87-8, 91, 94, 97, 101, 103, 110, 114, 128
first 42,45, 53-4, 57-8, 64-5, 67, 90, 92, 103, 113
139

KESSlfR
INTt:RNATtoNAl
monthly 40, 57-8, 61, 82, 94, 103, 112-13, 129
person 6, 19, 35, 83, 89, 102-3, 114, 122
Personnel 122
essential services 122
Phase 23, 122, 124-5, 129
Pierce 26, 28
PNC Bank 22, 33
Port St. Lucie 15, 30
position 24, 31, 36-7, 113
power 4,42
Power of Attorney Affidavit 71
Pre-Determination forms 123
prequalification 22
President 37-8
Previous Audit Reports 10, 38-9
private contractor 15
probation 30
process 3, 22, 37, 70, 123
profit corporation 26-7, 29, 35, 37-8
Program and HHR Programs 61
Program houses 22
Program housing in Phase 125
Program Phase 129
PROGRAMS 3, 7, 10-15, 17, 22-3, 28, 31-3, 36,42,48, 59, 69-70, 73, 76, 122-3, 125-6
Programs applicants 29
PROGRAMS AUDITED 1, 11
project 22-4, 34,45, 51, 72, 76-7, 79, 81, 83, 85, 91, 95-6, 105, 108-9, 118, 121
properties taxpayers fund 130
property 15-16, 21, 26-7, 29-33, 40-3, 48-50, 54-7, 59-61, 63-4, 67-8, 70-5,81-4,93-4,
97-8, 101-3, 111-12
applicant's 118
purchased 29, 56, 67
rental 101-2
subject 99, 108
property disposition 71
property owners 56-7, 59-61, 63-4, 75, 119
property tax 97
property taxpayers 4
proposal 72, lOS, 121
public assistance 59, 84, 86
Public Officers and Employees document 31
public trough 32
Purchasing Department 7, 20, 43, 95, 108
Q
qualifications 12, 24, 27
Qualified applicants 122
R
Re-Entry Assistance Program 48
reCipients 7,9, 20, 32, 125, 129
reconstruction projects 21, 34
Redden, Elaine 41
Redmarq Homes 117-18
Registered Agent 28, 35, 37
Registered Agent and President 26-7, 29
Registered Agent and President of Sunrise City 28
140

KESSLER
INTERNATiONAl
Registered Agent and Treasurer 34-5
Rehab 28,89
Rehab Grant Arnoff Moving 50
Rehab Grant Brown Construction 50
Rehab Grant M.B 50
Rehab Grants 46,51,69,86, 104, 107, 117
Rehab Grants Arnoff Moving 43,46,69,86, 104, 107, 117
Rehab Grants Herto Gamez 117
Rehab Grants Innovative Construction 43, 107
Rehab Grants Sunrise City 61
Rehab Grants Sunset Inn 86
Rehab Specialist 20-1, 24, 27, 36-7, 70, 76-9, 85, 89-90, 111, 119
Rehab Specialist and Kessler 21
Rehabilitation 4, 14-15, 20-1,43,45,49, 51, 76, 84, 117, 120, 130
Rehabilitation and Reconstruction Projects 34
Rehabilitation Assistance 13, 84, 104, 106
Rehabilitation Program 43,45,49,51, 104, 107, 117
rehabilitation projects 20-1, 34, 37
relatives 3-4, 36, 120
rent 42-3, 49, 54, 87, 89, 102, 116
Rental Assistance 23, 44-5, 49, 62, 87, 120
repaid 54, 58, 63-4, 90, 92, 94, 103, 112
repair costs 13-14
Repairs 12-13, 16-17,20,78, 108, 110
repay 40, 65, 101, 110, 113-14
repayment 4, 40, 53-4, 56, 61, 65, 71, 91, 101, 112
amended mortgage states 88
repayment period 19, 106-7, 125
repayment terms 26, 90, 92, 103, 106, 110
Replacement 16-17,46, 70, 74, 89
Replacement Arnoff Moving 69
Replacement Assistance Program 60-1
Replacement Housing 69, 95
Replacement Innovative Construction 69
Replacement Sunrise City 61, 95
report 4,6-7, 32-3, 38-9, 130
report Kessler 130
request 37,51, 74,116-17
applicant's 44
residence 12, 16, 24, 29, 43, 46, 53, 57, 78, 94, 97, 102, 122
rental of 125
resident 40,42-3, 45, 49, 54, 61, 68, 73, 81-4, 88, 92, 97-8, 114
Resmae Mortgage Corporation 94
resolution 64-5, 103
responsibility 3, 97
resume 32, 37
retainage fee 31-2
Rogers, John 70-1
roof, leaking 12, 14
rooms 84-5
RP Witt Construction 126-7
s
safety 12, 14
SAIL (State Apartment Incentive Loan) 12
sale 30, 71, 125
sanitary habitation 12-13, 15
Satisfaction of Mortgage 26
141
Satisfaction of Mortgage document 49
Saturno Construction 85, 90
scheming 30
SCOPE 6,28, 72, 91, 119
screens 74, 83
seller 64, 88, 94, 112, 128-9
Senior Citizen and Housing Security Program 14
sentence 84
Services 4, 35, 37, 107
sewer hookups 112
sheet 77,89,96, 111-12, 118
SHIP 10-11,40,42-3, 53-4, 56-7, 63-5, 67, 88, 92, 94, 98-9, 101, 103, 110, 112-13, 116-
17
SHIP and HHR Programs 67
SHIP Applicants 9
SHIP Down Payment 59
Ship Foundation 34-6
SHIP Housing Rehab Waiting List 10
SHIP Income Bracket Moderate 121
SHIP mortgage 56, 98, 101, 113
SHIP Program 11,41, 43, 53-4, 56-7, 63-5, 84, 86, 88, 92, 94, 98-9, 110, 112-13, 119, 121
SHIP Program assistance 103
SHIP Program assistance mortgage 99
SHIP Program guidelines 11
SHIP Program loan 67
SHIP Program mortgage 53, 57
SHIP Rehabilitation Program funds 49
Shutters & Screens 121
signature 19,40, 42, 48, 70, 85, 102
co-applicant's 89
property owner's 75
unknown Contractor's rep 27
Signed Applicant Date 127
sinks 82
social security card 52
soffits 79, 81
State Apartment Incentive Loan (SAIL) 12
State Housing Initiatives Partnership 2, 7, 10-11
State Housing Initiatives Partnership Program 10
Statement, sworn 31
strategies 11, 13-14, 22
street 23, 26, 30
subcontractor, alleged 79
subcontractors 32, 96
subject property work rebid 108
subsection 19
summer 37
Sunrise 96
Sunrise City 27, 84, 97, 112
Sunrise City Community Housing Development Organization 28, 72, 96
Sunset Inn 84
support personnel 122
T
target area 124, 128
taxpayer funds 3
teachers 122, 124
daycare 124
142

KESSLER
\NTa\NA"JlONAL.-
Temporary Employees 32, 37
temporary employees Citywide 37
Terramar 79, 81
Terramar Construction 44, 79, 81, 108
tile 46, 80
time homebuyers 12
Tip 4,28
transfer 75, 106, 125
tree removal 97
u
unit 12, 15-16, 74, 79, 81
unpaid 31
upgrades 79,81,97
v
vendors 44, 104-5, 108
very low 75, 79, 82, 101, 122
w
walls 46,81
warranties 27, 96, 109
Warranty Deeds 26, 30
water 112
Weatherization 28, 74-7, 79, 81-3
Weatherization Assistance Program 17
Weatherization Program 7, 28, 73-4, 76, 82
website 28, 38
wife 37, 54-5, 67-8, 71, 77
applicant's 68, 120
Wife of CSD Employee 37
windows 17, 51, 73-4, 78-81, 108
Women 37
work 12, 14, 20, 23-4, 33-4, 36-7,46,49, 55, 72-4, 81, 83, 105-6, 108-9, 111, 118-19
work activities 12, 14
y
yrs 40,42, 53-4, 56-9, 63-5, 67, 88, 92, 94, 98-9, 101, 103, 110, 112-13, 128-9
z
Zion Miss 72, 95-6
143

KESSlfR

EXHIBIT 1
City of Fort Pierce
Amended
State Housing Initiatives Partnership (SHIP)
Local Housing Assistance Plan (LHAP)
Fiscal Years 2006-07, 2007-08 and 2008-09
I. PROGRAM DESCRIPTION
A. Name of local government: City of Fort Pierce
The City does not have an Interlocal agreement
B. Program's Purpose
This Local Housing Assistance Plan (LHAP) sets forth the City of Fort Pierce plans to
provide guidelines, operating procedures, and strategies to be utilized in delivery of
affordable housing efforts for very low, low, and moderate income households within the
city limits of Fort Pierce.
C. Fiscal Years Covered: 2006/07,2007/08, and 2008/09
D. Governance: Program is established pursuant to Section 420.907-9079, Florida Statutes,
and Rule Chapter 67-37, Florida Administrative Code.
E. Local Housing Partnership: The creation of a working synergistic partnership
involving affordable homebuilders, social service providers, local government, local
lenders, local realtors, contractors and residents is an ongoing process. All assistance
involving homeownership for both new and existing properties will be provided in
partnership with the local financial institutions and in consultation with other members of
the community. The S1. Lucie County Lending Consortium brings together lenders, title
companies, mortgage brokers, Realtors, homebuilders, and local government, through
public meetings held every other month.
In all of the strategies involving repair/rehabilitation assistance for existing homeowners,
the city will work with local non profits, social services providers, and contractors to help
identify, contact, and assist these households.
F. Leveraging: The City will leverage local and federal funds to increase the delivery and
availability of affordable housing. Public and private funds will be combined to reduce
the cost of housing. SHIP funds may be used as a match to obtain federal housing grants
or to supplement other Florida Housing Corporation programs.
G. Public Input: Public input was solicited in developing this plan through the
dissemination of information and a public meeting. Invitations were sent to affordable
homebuilders, contractors, interested community members, continuum of care
management service providers, realtors, Habitat for Humanity, S1. Lucie County Lending
Consortium, local housing task force and city officials. Public input was solicited
through the local newspaper of general circulation, advertising review of the Local
Housing Assistance Plan and Notice of Funding Availability.
H. Advertising and Outreach: The notice of funding availability will be published in a
newspaper of general circulation serving a diverse population, at least thilty (30) days in
advance of each funding cycle. If no funding is available due to a waiting list, no notice
of funding availability will be advertised.
I. Discrimination: Discrimination is strictly forbidden on the basis of race, creed, color,
age, sex, familial status, handicap, religion, martial status, or national origin in the award
application process for eligible housing.
J. Support Services and Counseling: The city meets monthly with various social service
providers in an effort to coordinate support services. The St. Lucie County Lending
Consortium works with the city to provide credit counseling, homeownership counseling
(pre and post), and debt management assistance. Special attention is given to those
groups serving the special needs and elderly populations.
K. Purchase Price Limits: The purchase price of all new and existing homes may not
exceed the 90% area median purchase price as established by the Department of Treasury
and adjusted periodically. The most current Treasury Area Median Purchase Prices will
be in effect. All units must also be new, rehabilitated within the past year or require
rehabilitation at the time of purchase to be eligible. The purchase price limit for new and
existing homes is shown on the Housing Delivery Goals Charts.
L. Income Limits, Rent Limits and Affordability: The income and rent limits used in the
SHIP Program are updated annually from the Department of Housing and Urban
Development and distributed by the Florida Housing Finance Corporation. Affordability
means that monthly rents or mortgage payments including taxes and insurance do not
exceed 30 percent of that amount which represents the percentage of the median adjusted
gross annual income for the households as indicated in Sections 420.907) (19), (20), and
(28). However, it is not the intent to limit an individual's ability to devote more than 30
percent of his income for housing and housing for which a household devotes more than
30 percent of its income shall be deemed affordable if the first mortgage lender and the
applicant are satisfied that the household can afford mortgage payments in excess of the
30 percent benchmark and in the case of rental housing does not exceed those rental
limits adjusted for bedroom size.
M. Wages to Work: A selection criteria and qualification system have been developed for
eligible sponsors. In the selection process, preference will be given to eligible sponsors
that employ personnel from the WAGES and Workforce Development Initiatives
programs.
N. Monitoring and First Right of Refusal: Eligible sponsors that offer rental housing for
sale before 15 years or that have remaining mortgages funded under this program must
give a first right of refusal to eligible nonprofit organizations for purchase at the current
market value for continued occupancy by eligible persons.
In the case of rental housing, the city or staff with administrative authority shall monitor
and determine tenant eligibility or, to the extent another governmental entity provides the
same monitoring and determination, a municipality, county or local housing financing
Local Housing Assistance Plan 2006-09
April 3,2006 (Amended August 20, 2007)
Page 2
authority may rely on such monitoring and determination of tenant eligibility. However,
any loan or grant in the original amount of $3,000 or less shall not be subject to these
annual monitoring and determination of tenant eligibility requirements. Tenant eligibility
will be monitored annually for at least 15 years or the term of assistance whichever is
longer unless specified above.
O. Administrative Budget: A detailed line item budget of proposed Administrative
Expenditures is attached as Exhibit A. The Community Services Assistant Director is
responsible for administration of the SHIP program for fiscal years 2006/07, 2007/08,
and 2008/09. Ten percent (10%) of the total SHIP allocation will be authorized for
administrative expenses each year, as approved by City Commission' s attached
resolution (Exhibit E). Should the amount of funding increase or decrease,
administration will remain at 10% of the total funds allocated.
P. Essential Services Personnel: Is defined as persons in need of affordable
homing who are employed in occupations or professions that include,
but not limited to local or state law enforcement, fire, rescue, emergency services and
management, public safety, educators, school district personnel in the public, private,
college and uni versity systems; health care professionals and support personnel, tourism
industry professional s and employees, judicial/court system management and support
personnel, service industry personnel (including child care, hospitality and food service)
and other job categories as required by Section 420.9075(3)(a), F.S.
II. HOUSING STRATEGIES
The plan for the 2006-07, 2007-08 and 2008-09 fiscal years are designed to increase the
availability of affordable housing by providing rehabilitation and emergency repairs for existing
homeowners. Down payment and closing cost assistance for new and existing homes requiring
rehabilitation will be made available for first time homebuyers. Foreclosure prevention assistance
and counseling will be provided to homeowners previously assisted with SHIP funds . The
DisasterlPost DisasterlMitigation Recovery program will assist with repairs and retrofitting
households. Assistance in the form of a local commitment or local match will be provided for
selected multi-family housing developments.
A. STRATEGY 1: HOUSING REHABILITATION
a. Summary of the Strategy: Rehabilitation assistance will be available to existing
owner occupied units. The City's Rehabilitation Specialist will inspect homes of
eligible applicants to identify work activities, through a work write up, for
improvements that are needed for safe and sanitary habitation, correction of
substantial code violations, or the creation of additional living space.
b. Fiscal Years Covered: 2006-07,2007-08, and 2008-09
c. Income Categories to be served: Very low, low, and moderate income families
d. Maximum award: $15,000
April 3,2006 (Amended AUl! ust 20, 2007)
Page 3
B.
e. Term, Recapture and Default: Defen'ed mortgage loan @ 0% interest due and
payable upon sale, transfer or rental of residence for very lolV income families .
The defened loan will depreciate annually (see chart below) if the owner
continues to occupy the unit as their principal residence. On each anniversary
date of the execution of the deferred mortgage, the value of one year's payment
will be deducted from the balance owed. Loans will be secured by a deferred
mortgage and note. Should the property be sold or the household fails to maintain
it as their principal residence during the term of the deferred mortgage loan, the
remaining amount becomes due and payable with interest to the SHIP Housing
Trust Fund.
Low and moderate-income households will receive a zero (0%) to five percent
(5%) interest rate, direct loan or a loan/grant combination. Direct or combination
loans will require an amortization schedule to be prepared for payment on a
monthly basis not to exceed ten (10) years. The deferred portion of combination
loans will depreciate annually (see chart below). Interest rate will be determined
on a case-by-case basis after an affordability test (analysis of income to debt
ratio) has been performed to determine the applicant's ability to repay the loan.
Loans will be secured by a mortgage and note, due and payable upon sale,
transfer, or rental of residence. Full recapture of funds invested will be required
upon default, unless a forgiveness provision is incorporated into the mortgage
and note in which case the non-depreciated portion shall be due and payable
upon default.
Assistance Amount Lien Period Annual Depreciation
$0 - $5,000 I year
-
$5,001 - $10,000 5 years 1/5 of loan amount
$10,001 - $15,000 10 y e r ~ 1110 of loan amount
f. Recipient Selection Criteria: Assistance will be provided on a first come/first
serve basis following advertisement of the availability of SHIP funds . When an
extensive waiting list exists, applicants will be added to the list in first come/first
served order. Applications will be received until funds are expended. Priority
shall be given to households that have been cited by code enforcement.
g. Sponsor Selection Criteria: Not applicable
h. Additional Information: The City will leverage local and federal funds when
cost of the project exceeds the maximum award allocation.
STRATEGY 2: EMERGENCY REPAIRS
a. Summary of the Strategy: Repairs considered an "emergency" will be available to
owner/occupied households. The qualifications for an emergency situation may vary
from a leaking roof, plumbing, to faulty wiring. In general, any situation that
endangers the health or safety of the family will be considered an emergency repair.
Local Housing Assistance Plan 200609
April 3, 2006 (Amended August 20. 2007)
Page 4
c.
d. Maximum Award: $5,000
e. Terms, Recapture and Default: Households assisted will be secured with a deferred
mortgage loan @ 0% interest for one year. Should the property he sold or the
household fails to maintain it as their principal residence during the term of the
deferred loan, the remaining amount becomes due and payable to the SHIP Housing
Trust Fund.
f. Recipient Selection Criteria: Assistance will be provided on a first come/first serve
basis following advertisement of the availability of SHIP funds. When an extensive
waiting list exists, applicants will be added to the list in first come/first served order.
Applications will be received until funds are expended. Priority shall be given to
households that have been cited by code enforcement.
h. Additional Information: The City will leverage local and federal funds when cost of
the project exceeds the maximum award allocation.
STRATEGY 3: DOWNPA YMENT ASSISTANCE
a. Summary of the Strategy: Assist eligible first time homebuyers with dowpayment
and closing costs to purchase a newly constructed home, not to exceed $259,440 or
an existing home, which need repairs, not to exceed $280,658, for use as their
principal residence. Purchasers of both new and existing homes will be assisted with
only the amount required to reduce the purchase price (principal reduction) in order
to make the unit affordable, pay for repairs required by the program, pay closing
costs, or any combination of these needed, up to the maximum allocation. A first
time home buyer is defined as a person that has not owned a home in the previous
three (3) years [exceptions will be made for individuals who are displaced
homemakers]. A displaced homemaker is defined as an adult who has lost the
primary source of financial support of the main family wage earner as a result of
divorce, death, abandonment or disability. Eligible applicants must contribute a
minimum of $500.
b. Fiscal Years Covered: 2006/07,2007/08, and 2008/09
d. Maximum award: $15,000 for Very low and Low income families, and $10,000 for
Moderate income families
Terms, Recapture and Default: The assistance provided to households in the form
of down payment assistance will be in the form of a deferred payment loan (DPL)
which carries 0% interest and has a term of one (1) year per $1,000, forgiven at the
end of loan. The amount of the loan shall be reduced by $1,000 for each anniversary
of this agreement that has passed since its execution. Should the property be sold or
the household fails to maintain it as their principal residence during the term of the
loan the remaining amount becomes due and payable to the SHIP Housing Trust
April 3, 2006 (Amended August 20, 2007)
Page 5
D.
Fund for use in assisting another eligible household. Assistance will be secured by a
note and mortgage on the property.
e. Recipient Selection Criteria: The city will work with financial institutions in the St.
Lucie County Lending Consortium to qualify persons on a case-by-case basis.
Assistance will be provided on a first comelfirst served basis following advertisement
of the availability of SHIP funds. When an extensive waiting list exists, applicants
will be added to the li st in first comelfirst served order.
f. Sponsor Selection Criteria: Not applicable.
g. Additional information: None
STRATEGY 4: New Construction of Multi-family Rental Units
a. Summary of Strategy: SHIP funds may be used as part of the local contribution
when participating in such programs as, but not limited to, the Florida State
Apartment Incentive Loan (SAIL) and Housing Tax Credit programs when they
are used to perform construction of multi-family rental housing development
occupied by income eligible families. Eligible activities include state and
Federal leveraging. Assistance shall be awarded in the form of a letter of
commitment for local government contribution, contingent upon the Florida
Housing Finance Corporation executing a loan agreement andlor awarding tax
credits.
c. Income Categories to be served: Assistance will be provided to organizations
serving income eligible households
d. Maximum Award: $75,000 per unit
e. Terms, Recapture and Default: Assistance will be through a IS-year, no
interest, and deferred payment loan, forgiven at the end of fifteen years provided
the units remain affordable during the period of the loan.
f. Recipient Selection Criteria: Only developments that are approved for funding
through the Florida Housing Finance Corporation (FHFC) shall be eligible to
receive SHIP funding through this strategy. Proposals will be reviewed by the
Department of Community Services on a first come, first serve basis, and then
scheduled for City Commission's approval.
g. Sponsor Selection Criteria: Organizations receiving funds through this strategy
will be required to occupy units with income eligible applicants. Preference will
be given to eligible sponsors that employ personnel from the WAGES and
Workforce Development Initiatives programs. Sponsors offering rental housing
for sale before IS years or that have remaining mortgages funded, must give a
first right of refusal to eligible nonprofit organizations for purchase at the current
market value for continued occupancy by eligible persons. Rental housing will
be subject to monitoring and determination of tenant eligibility requirements .
April 3, 2006 (Amended AUQust 20. 2007)
Page 6
h. Additional Information: None
E. STRATEGY 5. FORECLOSURE PREVENTION PROGRAM
a. Summary of Strategy: Funds will assist homeowners with bringing their
mortgage payments current prior to the staIt of the foreclosure process. Eligibl e
expenses include delinquent mortgage payments (principal , interest, taxes and
insurance) , attorney fees, late fess , and other customary fees.
c. Income Categories to be served: Very low, low and moderate-income persons
d. Maximum Award: $3,000 $5,000
e. Terms, Recapture and Default: Assistance will be through a three (3) year
non-interest loan, fteHe exceed $3,000 up to $5.000 to be repaid monthly; and or
deferred loan not to exceed five (5) years.
f. Recipient Selection Criteria: Persons previously assisted with SHIP funds will
be eligible for assistance through this strategy. Applicants will be selected on a
first come first serve basis.
h. Additional Information: None
F. STRA TEGY 6: DISASTERIPOST DISASTERlMITlGA T10NIRECOVERY
a. Summary of Strategy: In the event of a state, federal, or locally declared
natural disaster by Executive Order as required in Section 420.9078(1), F.S.,
funds will be used to leverage with available federal and state resources to
assist income eligible households with disaster related repairs. Funds will be
utilized for subsequent upgrading and interim repairs to include the purchase
of emergency supplies to weatherproof damaged homes, repairs to avoid
further damage, tree and debris removal, payment of insurance deductibles,
and additional post disaster assistance with non insured repairs. Security
deposit and rental assistance for displaced disaster related recipients (not to
exceed two months), will be provided only during the term of the Executive
Order. Alternatively, funds may also be used to retrofit residences with
mitigation features (installation of roofing straps, shutters, storm doors, and
garage doors) that helps prevent future storm damage.
c. Income Categories to be served: Very low, low and moderate income families
d. Maximum Award: $10,000
Local Housing Assistance Pl an 2006-09
Page 7
i. Terms, Recapture, and Default: Assistance will be provided in a deferred
payment loan @ 0% interest due and payable upon sale, transfer or rental of
residence for very low income families. The deferred loan will depreciate
annually (see chart below) if the owner continues to occupy the unit as their
principal residence. On each anniversary date of the execution of the deferred
mortgage, the value of one year's payment will be deducted from the balance
owed. Loans will be secured by a deferred mortgage and note. Should the
property be sold or the household fails to maintain it as their principal residence
during the term of the deferred mortgage loan, the remaining amount becomes
due and payable to the SHIP Housing Trust Fund.
Low and moderate-income households will receive a zero (0%) to five percent
(5%) interest rate, direct loan or a loan/grant combination. Direct or combination
monthly basis not to exceed five (5) years. The deferred portion of combination
loans will depreciate annually (see chart below). Interest rate will be determined
on a case-by-case basis after an affordability test (analysis of income to debt
ratio) has been performed to determine the applicant's ability to repay the loan.
Loans will be secured by a mortgage and note, due and payable upon sale,
transfer, or rental of residence. Full recapture of funds invested will be required
upon default, unless a forgiveness provision is incorporated into the mortgage
and note in which case the non-depreciated portion shal1 be due and payable
upon default. In the event that the City receives reimbursement from federal and
state sources, such reimbursed funds will be utilized in accordance with the
approved Housing Assistance Plan in effect at the time the funds are disbursed.
Assistance Amount Lien Period Annual Depreciation
$0 - $5,000 1 vear -
$5,001 - $10,000 5 years 1/5 of loan amount
e. Recipient Selection Criteria: Assistance will be provided on a first come/first
serve basis fol1owing advertisement of the availability of funds . When an
served order. Applications will be received until funds are expended. Priority
shall be given to individuals and households that have been cited by code
enforcement.
f. Sponsor Selection Criteria: Not applicable
g. Additional Information: The City wil1 leverage local and federal funds when
cost of the project exceeds the maximum award allocation.
III. LHAP INCENTIVE STRATEGIES
A. EXPERDITED PERMITTING
The City of Fort Pierce Housing lncenti ve Plan was adopted August 1, J 994. The
Affordable Housing Advisory Committee reviewed the incentives; expedited permitting
Local Housing Assi stance Plan 2006-09
April 3, 2006 (Amended August 20.2007)
Page 8
process for affordable housing projects and the establishment of a process to consider
actions that has a significant impact on the cost of housing.
The Planning and Building Departments implemented the provisions of the expedited
permit processing for affordable housing projects. The Community Services Department
has worked with both departments to make sure that new staff is aware of the process.
To date, no problems have been reported by contractors, applicants, or city personnel.
a. Established policy and procedures: The Planning and Building Depaltments in
the City of Fort Pierce already have streamlined, expedited permit processing in
place, for all projects. The City encourages pre-construction meetings with the
builder and staff representing the Planning Department, to save the builder the
expense of having plans redrawn to meet City requirements and cause possible
delays in the permitting process.
B. ON-GOING REVIEW PROCESS
The Housing Incentive Plan recommends that the City maintain processing times on all
residential and multi-family Building Permit applications. If Building permit applications
processing times reach an average of 21 calendar days, expedited permit processing
would go into effect. Affordable housing permits would be hand-carried through the
permitting process with the objective of each department performing their review that
same day received.
a. Established policy and procedures: A committee is in place that reviews the
city's current building codes and land development regulations. The objective of
the committee is to recommend the elimination of excessive requirements that
add to the cost of housing, that are not essential. The committee may make non-
binding recommendations to the Director of Community Services, City Manager,
and/or City Commission.
IV. EXHffiITS:
A. Administrative Budget for Fiscal Years 2006/07, 2007/08, and 2008/09.
B. Timeline for Encumbrance and Expenditure
C. Housing Delivery Goals Chart for Fiscal Years 2006/07, 2007/08, and 2008/09
D. Certification Page
E. Adopting Resolution #06-26
F. Program Information Sheet
April 3, 2006 (Amended AuguSl20. 2007)
Page 9
Exhibit D
CERTIFICATION TO
FLORIDA HOUSING FINANCE CORPORATION
Name of Local Government: City ofForl Pierce
(1) The local government will advertise the availability of SHIP funds pursuant to Florida
Statutes.
(2) All SHIP funds will be expended in a manner which will insure that there will be no
discrimination on the basis of race, creed, religion, color, age, sex, familial or marital
status, handicap, or national origin.
(3) A process for selection of recipients for funds has been developed.
(4) The eligible municipality or county has developed a qualification system for applications for
awards.
(5) Recipients of funds will be required to contractually commit to progranl guidelines.
(6) The Florida Housing Finance Corporation will be notified promptly if the local
government (or interlocal entity) will be unable to comply with the provisions the plan.
(7) The Local Housing Assistance Plan shall provide for the expenditure of SHIP funds within
24 months following the end of the State fiscal year in which they are received.
(8) The plan confornls to the Local Government Comprehensive Plan, or that an amendment to
the Local Government Comprehensive Plan will be initiated at the next available opportunity
to insure conformance with the Local Housing Assistance Plan.
(9) Amendments to the approved Local Housing Assistance Plan shall be provided to the
Corporation with in 21 days after adoption.
(10) The trust fund shall be established with a qualified depository for all SHIP funds as well
as moneys generated from activities such as interest earned on loans.
(11) Amounts on deposit in the local housing assistance trust fund shall be invested as permitted
by law.
(] 2) The local housing assistance trust fund shall be separately stated as a special revenue fund in
the local governments audited financial statements, copies of the audits will be forwarded to
the Corporation as soon as available.
13) An interlocal entity shall have its local housing assistance trust fund separately audited
for each state fiscal year, and the audit forwarded to the Corporation as soon as possible.
1
Page 10
October 200)
Exhibit D
Page 2
Certi fication
( 14) SHIP funds will not be pledged for debt service on bonds or as rent subsidies.
( 15) Developers receiving assistance from both SHIP and the Low Income Housing Tax
Credit (LIHTC) Program shall comply with the income, affordability and other LIHTC
requirements, similarly, any units receiving assistance from other federal programs shall
comply with all Federal and SHIP program requirements.
( 16) Loans shall be provided for periods not exceeding 30 years, except for deferred payment
loans or loans that extend beyond 30 years which continue to service eligible persons.
(17) Rental Units constructed or rehabilitated with SHIP funds shall be monitored at least
annually for 15 years for compliance with tenant income requirements and affordability
requirements or as required in Section 420.9075 (3)(e)
(18) The Plan meets the requirements of Section 420-907-9079 FS, and Rule Chapter 67-37 FAe.
and how each of those requirements shall be met.
(19) The provisions of Chapter 83-220, Laws of Florida _X_'Ias or ___ has not
been implementfj

(
Wi ess
- /
/
OR
.-:;
)
(.,
Attest:
(Seal)
Robert J. Benton III, Mayor
Type Name and Title
2
, )clobcr 200J
Exhibit "E"
Resolution No. 06-26
April 3,2006 (Amended Au!!ust 20,2007)
Page 12
Exhibit E
RESOLUTION NO. 06-26
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF FORT PIERCE,
FLORIDA, APPROVING THE LOCAL HOlfSING ASSISTANCE PLAN AS
REQUIRED BY THE STATE HOUSING INITIATIVES PARTNERSHIP (SHIP)
PROGRAM ACT, SUBSECTIONS 420.907 - 420.9079, FLORIDA STATUTES; AND
RULE CHAPTER 67-37, FLORIDA ADMINISTRATIVE CODE, AUTHORIZING AND
DIRECTLNG THE MAYOR TO EXECUTE ANY NECESSARY DOCUMENTS AND
CERTIFICATIONS NEEDED BY THE STATE; AUTHORIZING THE SllBMISSION
OF THE LOCAL HOIJSING ASSISTANCE PLAN FOR REVIEW AND APPROVAL BY
THE FLORIDA HOUSING FINANCE CORPORATION; AND PROVIDING AN
EFFECTIVE DATE
WHEREAS, the State of Florida enacted the William E. Sadowski Affordable Housing Act on
July 7, 1992, that allocated a portion of new and existing documentary stamp taxes on deeds to local
governments for the development and maintenance of affordable housing; and
WHEREAS, the State Housing Initiatives Partnership (SHIP) Act, ss 420.907 _. 420.9079,
Florida Statutes (1992), and Rule Chapter 67-37, Florida Administrative Code, requires local
governments to develop a one to three year Local Housing Assistance Plan outlining how funds will be
used; and
WHEREAS, the SIDP Act requires local governments to establish the maximum SHIP funds
allowable for each strategy; and
WHEREAS, the SHIP Act further requires local governments to establish an average area
purchase price for new and existing housing benefitting from awards made pursuant to the Act; The
methodology and purchase prices used are defined in the attached Local Housing Assistance Plan; and
WHEREAS, as required by Chapter 67-37.005(6)(f)3, F.A.e, it is found that 5 percent of the
local housing distribution plus 5 percent of program income is insufficient to adequately pay the
necessa,y costs of administering the local housing assistance plan. The cost of administering the
program may not exceed 10 percent of the local housing distribution plus 5% of program income
deposited into the trust fund, except that small counties, as defined in s. 120. 52( 17), and eligible
April 3, 2006 (Amended AUl!ust 20, 2007)
Page 13
E;:i'.j b:' t E
municipalities receiving a local housing distribution of up to $350,000 may use up to 10 percent of
program income for administrative costs.
WHEREAS, the Department of Community Services has prepared a three-year Local Housing
Assistance Plan for submission to the Florida Housing Finance Corporation; and
\VHEREAS, the City Commission finds that it is in the best interest of the public for the City
of Fort Pierce to submit the Local Housing Assistance Plan for review and approval so as to qualify for
said documentary stamp tax funds; and
NO\\', THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF
FORT PIERCE, FLORIDA, THAT:
Section I - The City Commission of the City of Fort Pierce hereby approves the Local Housing
Assistance Plan, as attached and incorporated hereto for submission to the Florida Housing Finance
Corporation as required by ss. 420.907-420-9079, Florida Statutes, for fiscal years 2006/07, 2007/08,
and 2008/09.
Section II - The Mayor or his designee is hereby designated and authorized to execute any
documents and certifications required by the Florida Housing Finance Corporation as related to the
Local Housing Assistance Plan, and to do all things necessary and proper to carry out the term and
conditions of said program
Section III - This resolution shall take effect immediately upon its adoption.
IN WITNESS WHEREOF, this resolution has been duly adopted on this 3rd day of April,
2006.
ATTEST.
Cassandra Steele, City Clerk
C i t ~ Seal)
Page 14
Exhibit F
STATE HOUSING INITIATIVES PARTNERSHIP (SHIP) PROGRAM
INFORMATION SHEET
LOCAL GOVERNMENT: CITY OF FORT PIERCE
CHIEF ELECTED OFFICIAL (Mayor, Chainnan, etc.): Robert J. Benton. III, Mayor
ADDRESS: 100 N. U.S. Highway #1, Fort Pierce, FL 34950 (or)
P.O. Box 1480, Fort Pierce, FL 34954
SHIP ADMINISTRATOR: Dorina L. Jenkins, Community Services Asst. Director
TELEPHONE: (772) 460-2200, Ext. 230 FAX: (772) 461-2954
EMAIL ADDRESS:djenkins@city-ftpierce.com
ADDITIONAL SHIP CONTACTS: Sadie Coopcr, Program Specialist
Brian D. O'Connor, Community Services Director
ADDRESS: 100 N. U.S. Highway #1, Fort Pierce, PL 34950 (or)
EMAIL ADDRESS:shenton@city-fipierce.com
boconnor@city-ftpierce.com
INTERLOCAL AGREEMENT: YES/NO (IF yes, list other participants in the inter-local
agreement): No
The following information must be furnished to the Corporation before any funds can be disbursed.
LOCAL GOVERNMENT EMPLOYER FEDERAL ID NUMBER: 59-6000322
MAlL DISBURSEMENT TO: City of Fort Pierce Finance Department
P.O. Box 1480. Fort Pierce, FL 34954
OR:IF YOUR FUNDS ARE ELECTRONICALLY TRANSFERRED PLEASE COMPLETE THE
ATTACHED FORM:
rJ NO CHANGE FROM PREVIOUS ELECTRONIC FORM SUBMITTED.
Provide any additional updates the Corporation should be aware of in the space below: Please return this
fom1 to: SHIP PROGRAM MANAGER, FI-IFC 227 N. BRONOUGH ST, STE 5000 TALLAHASSEE,
FL 32301 Fax: (850) 922-7253
Page 15
April 3,2006 (Amended August 20, 2007)
Page 16
EXHIBIT 2
City of Fort Pierce
Community Development Block Grant (CDBG)
HOUSING REHABILITATION
ASSISTANCB PROGRAMS
FORT PIERCE
DEPARTMENT OF COMMUNITT SERVICES
Equal Housing Opportunity
October 2003
Revised July 12, 2006
Programs Administered by the Department of Community Services
Table of Contents
Page #
I. Overview of Housing Assistance Programs 3
A. Program Description 3
B. General Eligibility Requirements 3
C. Definitions 4
D. Financial Aspects of the Loan Program 5
E. Equal Opportunity 5
F. Disposition of Program Income 5
G. Appeals and/or Conflicts 5
H. Changes and/or Waivers 5
II. Program Administration 6
A. Policies and Procedures 6
B. The Loan Portfolio Management System 8
C. Default 8
III. Housing Assistance Programs & Requirements 9
A. Rehabilitation RevolvinglDeferred Loan Housing Programs 9
B. Emergency Repair Assistance Program 10
C. Senior Citizen SecuritylHandicap Program 11
D. U-Paint-It Program 11
IV. Public Service Agencies 12
2
I. OVERVIEW OF HOUSING ASSISTANCE PROGRAMS
A. Program Description
The City of Fort Pierce, Florida, acting by and through the Department of
Community Services shall provide housing rehabilitation/repair assistance through the
Community Development Block Grant (CDBG) program, as approved by the Department of
Housing and Urban Development (HUD), to eligible applicants residing within the City limits.
Since 1975, the City's Housing Rehabilitation Programs have provided financial and teclmical
assistance to low and moderate-income persons that own and occupy single-family residential
structures in the city limits. Housing assistance to homeowners has been available through
emergency grants, deferred payment loans (forgiveness grants), and low interest revolving loans.
In 1986, the City added the "U-Paint-It Program", and in 1988, the Senior CitizeniHandicapped
Security Program was implemented.
These programs are designed to preserve existing housing and enhance the quality of the
neighborhood by providing decent, safe and sanitary housing for low and moderate income
homeowners, and by creating incentives for more affluent neighbors to undertake property
improvements.
The programs included herein are conducted in accordance with all applicable rules and
regulations of the City of Fort Pierce, the State of Florida, and the United States Department of
Housing and Urban Development.
B. General Eligibility Requirements
1. Financial assistancejs available to properties as indicated in the City's Housing Action
Plan as approved by HUD.
2. Eligible properties must meet one or more of the following conditions:
(a). The property must be in need of rehabilitation in order to correct code
violation and eliminate incipient violations that may result in code violation
in 2 to 3 years
(b). Prevention or elimination of conditions which are detrimental to family
safety and welfare.
( c). Prevent or eliminate blighting influences which cause the deterioration of
property and neighborhood environment.
3. The applicant applying for rehabilitation assistance must be an owner/occupant ofhislher
home having clear title or conventional mortgage.
3
4. A promissory note and mOltgage to the City of FOlt Pierce will be required on every
CDBG revolving loan and/or defened payment loan. The said note and mortgage will be
properly filed and at the conclusion of the contract, the Community Services Director or
Assistant Director, as agent for the City of Fort Pierce, will file a satisfaction of
mortgage.
5. The owner shall maintain and keep cunent satisfactory property insurance for the term of
the loan and shall provide the City with yearly verification of same.
C. Definitions
CDBG Program: The Community Development Block Grant program.
Decent, Safe and Sanitary Housing: Dwelling units that meet the City of Fort Pierce
Standard Building Code, the 1988 Standard Housing Code and HUD Section 8 Minimum
Housing Standards.
Dwelling Unit: An independent living unit containing a minimum, bedroom, kitchen or
kitchenette, and a living area/bedroom.
Family All persons living in the same household who is related by birth, maniage, or
adoption. When such persons occupy the same housing unit they are considered members
of the fanlily and their incomes are too aggregated for calculating family income.
Hazardous Conditions: A code violation that is an immediate, serious threat to the health
and/or safety ofthe occupant of a dwelling unit.
Household: All persons who occupy a housing unit. The occupants may be single family,
one person living alone, two or more families living together, or any other group of
related or umelated persons who share living anangements. In calculating annual
household income, income from each member of the household is to be considered. The
City will require a nomesident owner, such as a spouse or ex-spouse to sign a notarized
statement certifying that they will not reside at the property. The participant is to notify
the City of any changes in the household size as a result of persons permanently moving
in or out of the property within sixty (60) days of the change
HUD: The United States Department of Housing and Urban Development.
Income: The gross amount received from all sources by every person residing in the
dwelling including wages, pensions, social security, interest, rent dividends, etc. The
income of children over 18 years if age living in the household, whether contribution to
the household expenses or not is to be included in the calculation of annual income for
determining household income. The definition of household does not provide for any
exceptions.
Income Limits: The maximum amount that can be earned to qualify for a specific
assistance category, based on household size and the median income for the City of Fort
Pierce as determined by FIUD.
Investor-Owner: The Title Holder to a residential structure who does not live in the
structure.
Occupancy Limits and Civil Rights: In accordance with HTJD Regulations, the City may
not deny assistance to or excluded household living in overcrowded conditions from
4
receiving assistance. CDBG regulations pemlit renovations through alterations, additions
to or enhancements of existing structures to address overcrowded conditions providing
that such alteration do not exceed twenty percent (20%) of the total rehab cost.
Owner - Occupant: The Title Holder to a residential structure whose primary living unit
is located in the structure.
Residential: A property used only for dwelling purposes. No commercial or office
activities are allowed on the property.
Single Family Dwelling: A property of the one to four dwelling units.
D. Financial Aspects of the Loan Program
The City of Fort Pierce will thaw from its general hind for the up-front cash needs or
the payoff to licensed contractors for rehabilitation work completed. The City will
draw down CDBG monies from the U.S. Department of Treasury to refund its
general fund. All transactions will be recorded electronically
E. Equal Opportunity
The City of Fort Pierce's Housing Rehabilitation program does business in
accordance with the Federal Fair Housing Law and Federal Equal Credit Opportunity
Act. These laws state that it is illegal to discriminate against any person because of
race, color, age, religion, sex, martial status, or national origin.
Any individual who believes that he or she may have been discriminated against may
discuss the matter with the Community Services Director or Assistant Director, the
City Manager, or HUD's Assistant Secretary for Equal Opportunity.
F. Disposition of Program Income
All income generated from the use of CDBG hinds through a revolving loan or the
repayment of a deferred payment loan, will be retained by the City's CDBG program
and utilized to continue and expand housing rehabilitation activities.
G. Appeals and/or Conflicts
Owners may appeal an inspectors' fmding that a dwelling is not rehabitable to
Community Services Assistant Director and subsequently to the Director of
Community Services. Issues regarding owner eligibility or priority may be appealed
to the City Manager
H. Changes and/or Waivers
The City Commission shall have the right to change, modify all or any part of this
plan by a majority ifthe Commission provided an acceptable alternative rehabilitation
program be approved.
5
The City Commission shall authorize the Community Services Director or Assistant
Director as agent for the City to sign all necessary documents and to waive any
program requirement to further the purposes and objectives of the City of Fort Pierce
Community Services Housing Program.
Income eligibility limits will be adjusted as often as necessary to reflect updated
housing and Urban Development Section 8 Income limits for the Fort Pierce MSA.
II. PROGRAM ADMINISTRATION
A. Policies and Procedures
1. The following criteria must be met in order to be considered for
assistance:
Owner-occupied
Have at least one violation of the Standard Building Code of the
City of Fort Pierce
Program limits for income based of family size.
2. The infomlation given on the application verified. This includes verifying
all income, credit, assets, liabilities, and residence
3. Notice of eligibility will be sent to the homeowners, a case number will be
assigned and files set up.
4. After ithas been determined that the applicant is eligible for assistance,
the City staff may order a title search, as needed, determining the
applicants ownership. A survey of the property and simultaneously request
verification that insurance for the property is adequate. This includes flood
insurance as required under the National Flood Insurance Program.
5. The application with documentation and the set standard specifications
will be reviewed by the Community Services Assistant Director for
compliance with the rehabilitation policy. The evaluation of eligibility for
assistance will be referred to and shall be approved by the Community
Services Director or Assistant Director.
6. Where questions of eligibly arise based on extenuating circumstances, the
case will be referred to the Community Services Director and City
Manager who will advise Community Services staff on the direction of
assistance in accordance with applicable rules and regulations.
7. If the property owner desires to participate in the program, the Housing
Rehabilitation Specialist will prepare a preliminary work write-up and
complete a detailed cost estimate for rehabilitation to the unit according to
City Code. Other general property improvements may be determined and
included in the work write-up with the owners' concurrence. In emergency
and senior citizen/handicapped repairs, staff will negotiate with the
contractor according to rotating the list until the job is accepted for an
amount within 10% of Rehabilitation Specification Estimate.
6
8. The Rehabilitation Specialist will prepare a final work write-up cost
estimated and construction documents, then advise for bids from
contractors.
9. The contractor will be awarded the lowest and most responsible bid
(within 10% of the City's written estimate). The Rehabilitation Specialist
will schedule a preconstruction conference. The Rehabilitation Specialist,
Program Specialist, the Property Owner, and Contractor will attend this
meeting. Extensive explanation of the work write-up will be made. All
questions will be answered at that time.
10. Loan Closing - The loan closing will take place at the preconstruction
conference. The property owner will sign all applicable documents at this
time.
11. Right of Rescission. All documents for recordation will be signed at the
preconstruction conference. The potential applicant for loan assistance
will be informed of the three (3) day recession in effect. On the fourth day,
if the applicant has not rescinded, all pertinent documents will be
recorded.
12. When the order to proceed with work is executed, the contractor is then
required to begin work within ten (10) days of its issuance. If the
contractor does not commence work within ten (10) days, the contract will
be awarded to the next lowest bidder or will go under the rebidding
process. Variations from the specification must be documented by change
orders which require the approval of the owner, the contractor, and the
rehabilitation specialist provided that the cumulative amount of change
does not increase the contract amount by more that 10 percent. Changes
over 10 percent or that which result in cumulative changes exceeding the
10 percent must be approved by the Community Services Director or
Assistant Director and made payable to the contractor.
13. When construction to the dwelling is completed, the final inspection is
made; the contractor is required to sign a Release of Liens. This insures
that the contractor has paid all subcontractors and that there is no
possibility that the liens can be placed to a property on which the City
holds a mortgage. The homeowner is also required to sign a Release
acknowledging acceptance of the contractor's work and noting any
problems or concerns. The Rehabilitation Specialist and the City Inspector
must certify that completion of the work is according to code and
specifications. A check is then requested by the Rehabilitation Specialist
and authorized by the Community Services Assistant Director and made
payable to the contractor and homeowner.
14. Loan payments are due to the City thirty (30) to forty-five (45) days after
final inspection (the date of the final inspection will be the determining
factor). Information regarding the borrower and the loan is stored in the
City's Loan Services File.
15. All follow-up inspection of rehabilitation work will be at the end of one
(1) year.
7
B. The Loan Portfolio Management System
The City will implement a loan Portfolio Management System as an integral
part of its housing programs to:
1. Improve access to information
2. Realize deadlines for collecting date critical to proper
3. Legally and properly document the loan to protect the City's
collateral in the event of default.
Attention shall be given to legally securing assets that were financed by
the loan. This includes locating all documentation.
Authorized personal shall keep loan documentation in a locked fireproof
safe in the Department of Finance with limited access only.
Steps shall be taken to collect loan payments on time. A letter shall be sent
to all accounts monthly. If payments are not received within seven (7)
working days, they will be followed with a telephone call. All written and
phone contacts will be noted in the file.
A five dollar ($5.00) late fee shall be applied to all late payments. Every
effort shall be made to enforce and collect the late fee with exceptions.
After all reasonable attempts have been made to bring delinquent accounts
current, delinquent accounts shall be tumed over to the City Attomey for
legal action.
Some insurance policies on collateral may have lapsed for nonpayment.
Insurance is required on a mortgage loan; enforcement shall be a priority.
Updated certificates of insurance naming the City as "loss payee" shall be
required on a1110ans.
The Community Services Assistant Director will be responsible for
delinquency and loan workouts, review of loan covenant violations, and
implementing the loan portfolio management system.
The housing Rehabilitation Specialist or Program Specialist will handle
general ongoing portfolio administration including:
1. Legal file maintenance
2. Borrow relations
3. On-site inspections
4. Tickler file maintenance
A Tickle File System will be set up on each loan annually to:
1. Review loan performance
2. Update hazard insurance premium information
3 . Ensure that property taxes are current
4. Note completion of one year on-site housing inspection.
C. Default
If default is made for thirty (30) days in the payment of any installment of
principal or interest or any part thereof, the installment then remaining unpaid
with interest at the highest rate allowable under the Laws of Florida becomes due
and payable without notice, failure to exercise the same in the event of subsequent
default.
8
The maker and endorsers of the mortgage note further waive demand notice of
nonpayment and protest of dishonor and agree to pay all costs, including a
reasonable attomey's fee, whether suit be brought or not, if after maturity of the
note or security of said mortgage.
If the note remains in default status for a period in excess of ninety (90) days, the
City Attomey's Office may be instructed to initiate foreclosure proceedings
III. HOUSING ASSISTANCE PROGRAMS & REQUIREMENTS
A. Rehabilitation RevolvinglDeferred Loan Housing Programs
Substantial rehabilitation assistance is available to eligible, existing owner-
occupied residents, through a revolving and/or deferred mortgage loan. Funds
will be used for improvements that are needed for safe and sanitary habitation,
correction of substantial code violations, or the creation of additional living space.
Homeowners are eligible to apply for assistance through this program once every
ten (l0) years. Taxes and mortgage payments must be current. Priority shall be
given to households that have been cited by code enforcement
Fiscal years covered: October 1,2005 - September 30,2010
Income Limits: Low to moderate households (not to exceed 80% of Section 8
gross income limits for Fort Pierce MSA)
Maximum award: $35,000 per household, leverage of local and state funds
when repair cost exceeds the maximum award
Terms, Recapture and Default: Deferred mortgage loan @ 0% interest due and
payable upon sale, transfer or rental of residence. The deferred loan will
depreciate annually (see chart below) if the owners continues to occupy the unit
as their principal residence. On each anniversary date of the execution of the
deferred mortgage, the value of one year?s payment will be deducted from the
balance owed. Loans will be secured by a deferred mortgage and note. Should
the property be sold or the household fails to maintain it as their principal
residence during the term of the deferred mortgage loan, the remaining amount
becomes due and payable. Ifborrower deceases, a file will be processed
(verifications) on new owners, if residence is not sold, to determine eligibility.
Income eligible applicants will receive a zero (0%) to five (5%) interest rate,
direct loan or a loan/grant combination. Direct or combination loans will require
an amortization schedule to be prepared for payment on a monthly basis not to
exceed fifteen (15) years. The deferred portion of combination loan will
depreciate annually (see chart below). Interest rate will be determined on a case-
by-case basis after an affordability test (analysis of income to debt ratio) has been
performed to determine the applicant's ability to repay the loan. Loans will be
9
secured by a mortgage and note, due and payable upon sale, transfer, or rental of
residence. Full recapture of funds invested will be required upon default, unless a
forgiveness provision is incorporated into the mortgage and note in which case the
non-depreciated portion shall be due and payable upon default.
Lien Period I Assistance Amount Annual Depreciation
5 years
I
$500 - $10,000 1/5 of loan amount
10 years
I
$10,001 - $30,000
111 of loan amount
15 years
I
$30,001 - $35,000 1115 ofloan amount
Additional Information: If an applicant has more than $2,500 in collections,
their file will receive special review to determine eligibility.
B. Emergency Repair Assistance Program
Funds will assist eligible homeowners whose health and/or safety is threatened by a
hazardous condition, varying from a leaking roof, and plumbing, to expose or faulty
electrical wiring. In general, any situation that endangers the health or safety of the
family will be considered an emergency repair. Homeowners are eligible to apply for
assistance through this program once every five (5) years. Taxes and mortgage
payments must be current. Priority shall be given to households that have been cited
by code enforcement
Fiscal years covered: October 1, 2005 - September 30, 2010
Income Limits: Low to moderate households (not to exceed 80% of Section 8 gross
income limits for Fort Pierce MSA)
Maximum award: $15,000 per household, leverage of local and state funds when
repair cost exceeds the maximum award
Terms, Recapture and Default: Deferred mortgage loan @ 0% interest due and
payable upon sale, transfer or rental of residence. The deferred loan will depreciate
annually (see chart below) if the owners continues to occupy the unit as their
principal residence. On each anniversary date of the execution of the deferred
mortgage, the value of one year's payment will be deducted from the balance owed.
Loans will be secured by a deferred mortgage and note. Should the property be sold
or the household fails to maintain it as their principal residence during the term of the
deferred mortgage loan, the remaining amount becomes due and payable. If borrower
deceases, a file will be processed (verifications) on new owners, if residence is not
sold, to determine eligibility.
Lien Period Assistance Amount Annual Depreciation
1 years $500 - $5,000 -
3 years $5,001 - $10,000 1/3 of loan amount
5 years $10,001 - $15,000 1/5 ofloan amount
10
Additional Information: If an applicant has more than $2,500 in collections, their file
will receive special review to detemline eligibility.
C. Senior Citizen and Housing Security Program
The City of Fort Pierce, in its efforts to provide a safe and suitable living environment, to
evaluate and provide security measure in the homes of senior citizens and handicapped
persons, agree to install security measures that do not require intensive or extensive
upkeep, no monthly monitoring charges, and are easy to operate. Funds may be used to
pay the contractor the actual cost of the necessary purchase and installation ofthe
following items:
./ Perimeter lights;
./ Solid core doors with peep-hole viewers and deadbolt locks;
./ Handicap accessible bathrooms;
./ Exterior handicap ramp; and/or
./ Other related items
Fiscal years covered: October 1, 2005 - September 30,2010
Income Limits: Low to moderate households (not to exceed 80% of Section 8 gross
income limits for Fort Pierce MSA).
Maximum award: To be determined on a case-by-case basis. Leverage oflocal and
state funds will be applied when necessary.
Terms, Recapture and Default: No liens will be placed on residences receiving
assistance. Property must be owner-occupied, at least one owner 62 years of age, and/or
must be handicapped. (Handicapped shall mean that a person (owner) has qualified for
Supplemental Security Income (SSI) under the Social Security Act.)
D. U-Paint-It Program
The paint program is a "Clean-Up/Fix-Up" program intended to serve as an incentive for
citizens to beautify the exterior appearance of their homes. Upon completion of
application, homeowner will be required to clean up their yard and property, and then
applicant will receive a paint voucher that must be submitted to the approved paint
supplier to purchase paint and paint supplies.
Fiscal years covered: October 1,2005 - September 30, 2010
Income Limits: Low to moderate households (not to exceed 80% of section 8 gross
income limits for Fort Pierce MSA).
Maximum award: One hundred, ninety dollars ($190.00) for paint and paint supplies.
11
Terms, Recapture and Default: Vouchers must be redeemed within thirty (30) days
after issuance. Painting of the dwelling must begin within ten (10) days and must be
completed within thirty (30) days after receipt of vouchers. Recipients are eligible to
receive a paint voucher once every three (3) years. Homeowner must reside in the
residence for one year after receipt of paint voucher.
Additional Information: Residences built prior to 1978, will be considered for
eligibility on a case by case basis, due lead base requirements.
IV. PUBLIC SERVICE AGENCIES
Activities which are directed toward improving the community's public services and
facilities, including but not limited to those concerned with employment, crime
prevention, child care, health, drug abuse, education, fair housing counseling, energy
conservation, welfare, or recreational needs. Fifteen percent (15%) of the City's CDBG
annual allocation can be utilized to fund such agencies.
12
EXHlBIT 3
City of Fort Pierce
HURRICANE HOUSING RECOVERY PLAN (HHRP)
Fiscal Years Covered
2005-06, 2006-07, and 2007 -08
Submitted July 19, 2005
Amended July 12, 2006
Second Amendment March 27, 2008
S:\Community Services\Hurncane Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008(03-27-08).doc
TABLE OF CONTENTS
I. Program Description
II. Housing Hurricane Recovery Strategies
A. Housing Repair/Rehabilitation
B. Replacement of site built housing
C. Downpayment Assistance for new and existing purchases
D. Acquisition of building material s for home repair and construction
E. Hazard Mitigation
F. Housing Re-entry Assistance
G. Foreclosure Eviction Prevention
H. Land Acquisition
1. Construction and development financing
J . Capital to leverage other pri vate and public resources
III. Extremely Low Income Strategy
IV. Community Planning Strategy
V. Administrative budget
VI. Compliance Issues
VII. Exhibits
A. Timeline for Encumbrance and Expenditure
B. Hurricane Housing Goals Chart (HHGC) for each Fiscal Year Covered
C. Certification Page
D. Program Information Sheet
E. Community Planning Documentation (Collaboration Letter)
F. Adopting Resolution
Page
1
2
3
4
5
5
6
7
7
8
9
11
12
13
13
S:\Community Services\Hurricanc Relllted\Hurricane Housing Work Group\Revised HHR Plan 2005200SC03-27-08l.doc
I. Program Description
A. Name of County: City of Fort Pierce
Base Allocation Request: $5,472,493
Extremely Low Income Request: $1,094,498
Community Collaboration Request: $729,665
Name of participating local government(s) or other agencies in the Community
Planning Strategy:
St. Lucie County Community Services
Port St. Lucie Community Services
INT ACT Long Term Recovery Community Partnership
B. Program's Purpose
This Hurricane Housing Recovery Program (HHRP) sets forth the plans for the
City of Fort Pierce to provide guidelines, operating procedures, and strategies to
be utilized in delivery of housing recovery efforts for extremely low, very Jow,
low, and moderate-income households within the city limits of Fort Pierce,
pursuant to Section 420.9072, F.S. and Chapter 67-37.005(3), F.A.C.
II. HURRICANE HOUSING RECOVERY PROGRAM HOUSING STRATEGIES
A. STRATEGY 1: HOUSING REPAIRIREHABILIT ATION
a. Summary of the Strategy: Repairs and rehabilitation assistance will be
available to existing owner occupied units. The City's Rehabilitation
Specialist will inspect homes of eligible applicants to identify work activities,
through a work write up, for improvements that are needed for safe and
sanitary habitation, correction of substantial code violations, or the creation of
additional living space.
Funding may be provided on a case-by-case basis to the INTACT long term
recovery organization to assist eligible homeowners with minor repairs that
may be performed by volunteers.
c. Income Categories to be served: Very low, low, or moderate income
families (ie, with incomes below 120% of the median income).
d. Maximum award as noted on the Hurricane Housing Goals Chart:
$50,000 for Very low and Low income families
$40,000 for Moderate income families
S:\Community Services\Hunicanc Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008(03-2708J.doc
c. Terms, Recapture and Default: Deferred payment loan @ 0% interest due
and payable upon sale, transfer or rental of residence for very low income
familics. The deferred loan will depreciate annually (see chart below) if the
owners continues to occupy the unit as their principal residence. On each
anniversary date of the execution of the deferred mortgage, the value of one
year's payment will be deducted from the balance owed. Should the property
be sold or the household fails to maintain it as their principal residence during
the term of the deferred mortgage loan, the remaining amount becomes due
and payable to the SHIP Housing Trust Fund.
Low and moderate income households will receive a zero (0%) to five (5%)
interest rate, direct loan or a loan/grant combination. Direct or combination
monthly basis not to exceed fifteen (15) years. The deferred portion of
combination loans will depreciate annually (see chart below). Interest rate will
be determined on a case-by-case basis. Loans will be secured by a mortgage
and note, due and payable upon sale, transfer, or rental of residence. Full
recapture of funds invested will be required upon default, unless a forgiveness
provision is incorporated into the mortgage and note in which case the non-
depreciated portion shall be due and payable upon default.
1 year $0 - $5,000 -
5 years $5,001 - $15,000 115 of loan amount
10 years $15,001 - $30,000 1110 of loan amount
15 years $30,001 - $50,000+ 1115 loan amount
f. Recipient Selection Criteria: Assistance will be provided on a first
come/first served basis following advertisement of the availability of HHRP
funds. When an extensive waiting list exists, applicants will be added to the
list in first come/first served order. Priority shall be given to households that
have been cited by code enforcement.
g. Sponsor Selection Criteria: Funds may be made available to eligible
households for minor repairs on a case-by-case basis through the 1NT ACT
long-term recovery organization.
h. Additional information: None
S;\Community Services\Hunicane Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008(03-27-08).doc
B. STRATEGY 2: REPLACEMENT OF SITE BUILT HOUSING
a. Summary ofthe Strategy: Reconstruct severely substandard homes of
eligible owner occupied single family homes in the city limits of Fort Pierce.
Assistance will be provided to homes that are not feasible for rehabilitation
based upon structural conditions or rehabilitation costs. Homes will be
demolished and rebuilt to current code.
c. Income Categories to be served: Eligible applicants must be very low, low,
or moderate income families (ie, with incomes below 120% of the median
income).
$100,000 for very low and low income families
$ 90,000 for moderate income families
J. Terms, Recapture and Default: Deferred payment loan @ 0% interest due
families . The deferred loan will depreciate annually (see chart below) if the
owners continues to occupy the unit as their principal residence. On each
anniversary date of the execution of the deferred mortgage, the value of one
year's payment will be deducted from the balance owed. Should the property
be sold or the household fails to maintain it as their principal residence during
the term of the deferred mortgage loan, the remaining amount becomes due
and payable to the SHIP Housing Trust Fund.
Low and moderate income households will receive a zero (0%) to five (5%)
interest rate, direct loan or a loan/grant combination. Direct or combination
monthly basis not to exceed thirty (30) years. The deferred portion of
combination loans will depreciate annually (see chart below). Interest rate will
be determined on a case-by-case basis. Loans will be secured by a mortgage
and note, due and payable upon sale, transfer, or rental of residence. Full
recapture of funds invested will be required upon default, unless a forgiveness
provision is incorporated into the mortgage and note in which case the non-
depreciated portion shall be due and payable upon default.
10 years $10,000-$30,000 1/10 of loan amount
15 years $30,001-$50,000 1115 of loan amount
20 years $50,001-$70,000 1120 loan amount
25 years $70,001 - $90,000 1/25 loan amount
30 years $90,001 - $100,00+ 1/30 loan amount
S:\Community Services\Hun'icane Relaled\Hurricane Housing Work HHR Plan 20052008103-27-081.doc
C.
e. Recipient Selection Criteria: Assistance will be provided on a first
funds . When an extensive waiting list exists, applicants will be added to the
f. Sponsor Selection Criteria: Not applicable.
STRATEGY 3: DOWNPAYMENT ASSISTANCE FOR NEW AND
EXISTING PURCHASES
a. Summary of the Strategy: Assist eligible applicants with purchase of new
construction or existing homes, which need repairs, for use as their principal
residence. Purchasers of both new and existing homes will be assisted with
only the amount required to reduce the purchase price (principal reduction) in
order to make the unit affordable, pay for repairs required by the program, pay
closing costs, or any combination of these needed, up to the maximum
allocation. Monies committed, but not utilized by an applicant, will be
returned to the down payment strategy for reallocation. Eligible applicants
must contribute a minimum of $500.
income) .
e. Terms, Recapture and Default: Deferred payment loan @ 0% interest
and/or combination 0% low interest loan for very low income families.
Deferred loans have a term of one (1) year per $1 ,000, depreciating annually
on each anniversary date. Low and moderate income households will receive
a zero (0%) to five (5%) low interest, direct loan up to the maximum of a 30
year repayment period, or a combination. Interest rate will be determined on a
case-by-case basis. Loans will be due and payable upon sale, transfer or
rental of residence.
Loans secured by mortgage and note. The maximum mortgage term is 30
years. As defined in the applicable mortgage and note, full recapture of
HHRP funds invested is required upon default, unless a forgiveness provision
S:\Comrnunity Services\Hurricane Related\Hurricane Housing Work Group\Revi,ed HHR Plan 20052008(Q32708).doc
D.
is incorporated into the mortgage and note in which case the un-depreciated
portion shall be due and payable upon default.
f. Recipient Selection Criteria: The city will work with financial institutions
in the St. Lucie County Lending Consortium to qualify persons on a case-by-
case basis. Assistance will be provided on a first come/first served basis
following advertisement of the availability of HHRP funds. When an
extensive waiting list exists, applicants will be added to the list in first
come/first served order.
g. Sponsor Selection Criteria: Not applicable.
STRATEGY 4: ACQUISITION OF BUILDING MATERIALS
a. Summary of the Strategy: Homeowners will be assisted with the purchase
of building materials for minor repairs to their homes. Funds must be used on
materials that will assist with bringing homes up to current code and/or for
eligible homeowners to purchase materials to receive assistance from a
community service group. Receipts will be required by homeowners, listing
materials purchased.
income).
d. Maximum award as noted on the Hurricane Housing Goals Chart: $1,000
e. Terms, Recapture and Default: Direct grant to eligible applicants. No
payment will be required, but should funds be returned after the deposit
period, they will be re-deposited into the HHRP fund for reuse in funding
other HHRP eligible strategies.
S:\Community Services\Hurricane Related\Hurricane Housing Work Group\Revised HHR Plan 20052008(m27-08).doc
E.
F.
STRATEGY 5: HAZARD MITIGATION
a. Summary of the Strategy: Assistance will be provided to eligible
homeowners to reduce or eliminate exposure of their lives and property from
disasters harm. Funds will be Llsed to assist eligible homeowners with
insurance deductible, insurance premiums, and to retrofit residences through
installation of roofing straps, shutters, storm doors, and/or garage doors.
e. Terms, Recapture and Default: Deferred payment loan @ 0% interest due
families . Deferred loans have a term of one (1) year per $1,000, depreciating
annually on each anniversary date. Low and moderate income households
will receive a zero (0%) to five (5%) low interest, direct loan up to the
maximum of a 5 year repayment period, or a combination for low and
moderate income families. Interest rate will be determined on a case-by-case
basis. Loans will be due and payable upon sale, transfer or rental of
residence.
STRATEGY 6: HOUSING RE-ENTRY ASSISTANCE
a. Summary of the Strategy: Provide eligible applicants with funds to assist
with temporary storage of household furnishing, security and utility deposits
that are required to secure needed housing within the city limits of Fort Pierce.
income).
S:\Communily Services\Hurricane Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008C03-27-08l.doc
G.
other HHRP eligible strategies. If applicant relocates, funds used for security
deposits are to be returned to the City for reuse in funding other eligible
activities.
funds . When an extensive waiting list exists for the strategy, applicants will
be added to the list in first come/first serve order. Priority shall be given to
individuals and households that have been cited by code enforcement.
g. Sponsor Selection Criteria: Not applicable. This strategy is implemented
directly by Community Services staff.
STRATEGY 7: FORECLOSURE EVICTION PREVENTION
a. Summary of the Strategy: Limited amount of funding will be provided to
assist with mortgage or rental payments up to (3) three months, to eligible
applicants residing within the city limits of Fort Pierce.
income).
$2,500 for eviction prevention (rental) 5,000.00 for foreclosure prevention
(mortgage)
other HHRP eligible strategies.
list in first come/first served order.
S:\Community Services\Hurricane Related\Hurricane Housing Work Group\Reviscd HHR Plan 2005-2008(03-27-08J.doc
H.
STRATEGY 8: LAND ACQUISITION
a. Summary of the Strategy: Funds for the REACH (Reforming Employees
with Assisted Collaboration for Homeownership) Program will be utilized to
purchase individual scattered lots within the city limits, newly constructed, or
existing homes for essential services personnel for use as their principle
residence. Financing will be provided by the City of Fort Pierce and/or a
member of the St. Lucie County Lending Consortium. The City will
collaborate with approved contractors to develop pre-approved plans for
homes that may be constructed on scattered lots.
b. Fiscal Years Covered: 2005 - 2008
$250,000
e. Terms, Recapture and Default: Loans will be secured by mortgage and note
due and payable upon sale, transfer or rental of residence. A zero (0%) to five
(5%) low interest loan with a repayment period of 15-30 years or the term of
the first mortgage whichever is less. Interest rate will be determined on a
case-by-case basis. A 5% default penalty fee will apply if the home is sold or
rented prior to the end of the loan term. If the home is sold prior to the fifth
(5
th
) year, 50% of the equity will be returned to the City of Fort Pierce.
Mortgage loans will be automatically deducted from employees' paycheck on
a bi-weekly, semi-monthly or monthly basis which would include taxes and
homeowners insurance.
f. Recipient Selection Criteria: Households must meet income and other
qualifying guidelines set forth in the REACH Program, to include attendance
at the homebuyers' workshop. The City will collaborate with a review
committee to qualify applicants on a first come, first qualified, first ready
basis.
g. Sponsor Selection Criteria: Developers and! or Contractors wishing to work
with the REACH program must either respond to a Request for Qualification
(RFQ), or the City may piggyback on existing contracts that follow under
state purchasing guidelines for similar projects. Preference will be given to
S:\Community Services\Hurricane Relatcd\Hun'icane Housing Work Group\Revlsed HHR Plan 200:;-2008(O,,-27-08J,doc
contractors who provide energy saving features in their construction plans,
with five year maximum cost effectiveness.
h. Additional Information:
1. Essential Services personnel is defined as persons in need of
affordable housing who are employed in occupations or
professions that include, but not limited to local or state law
enforcement, fire, rescue, emergency services and management,
public safety, educators, school district personnel in the public,
private, college and university system: Local state and county
government; health care professionals and support personnel,
tourism industry professionals and employees, judicial/court
system management and support personnel, service industry
personnel (including child care, hospitality and food service) and
other job categories as required by Section 420907S(3)(a),F.S.
2. Employed permanently by current employer for approximately
two years.
3. Applicant must provide a denial letter or good faith estimate
from a financial institution on the St. Lucie County Lending
Consortium.
4. A minimum beacon score of 400 - 670 to be fully or partially
financed through the City of Fort Pierce. Non-traditional credit
will be utilized for those without beacon scores. Current
payment history will be considered for approval.
5. Debt to income ratio and proposed monthly housing expenses
will be considered to determine award amount.
6. Approved applicants will be required to have mortgage
insurance.
7. Applicant may be required to purchase home in target area
8. Applicants will be required to work with certified staff to prepare
a budgeting plan/goal to repair past and current debts. Annual
follow-ups will be required for three years.
9. Review committee will recommend loan approvals and title
companies will conduct closings.
10. Essential Services Personnel will have first right refusal in case
of foreclosure on mortgage loan.
I. STRATEGY 9: CONSTRUCTION AND DEVELOPMENT FINANCING
a. Summary of the Strategy: Proposals envisioned for this strategy is as
follows:
Single family bond issuance subsidies or set asides for down
payment/closing cost assistance
Single-family collaboration ownership strategy with the County and
City of Port St. Lucie on property in the County and/or City of Port
St. Lucie
S:\Community Related\HulTicane Housing Work Group\Revised HHR Plan 20052008(03270S).doc
J.
c. Income Categories to be served: Assistance will be provided to
organizations serving households with incomes not to exceed 120% of the
Area Median Income.
$50,000 per unit
families . Low and moderate income households will receive a zero (0%) to
five (5%) low interest, direct loan up to the maximum of a 30 year repayment
period, or a combination. Interest rate will be determined on a case-by-case
residence.
f. Recipient Selection Criteria: Units must be purchased and occupied by
income eligible applicants.
g. Sponsor Selection Criteria: Applications from organizations will be
accepted while funding is available. Documentation regarding purpose and
scope of project and sponsor's organizational and housing-related experience
will be required to qualify for HHR funds. Successful candidates will be
selected according to the following criteria:
Proposed development's consistency with City of Fort Pierce' s
Comprehensive Plan
Amount or percentage of private funds leveraged per unit in relation to unit
value
Organization's past experience with affordable housing developments
Priority will be given to eligible sponsors who employ personnel from the
WAGES and Workforce Initiatives program
Ability to complete project before allocated funds must be expended.
STRA TEGY 10: CAPITAL TO LEVERAGE PRIVATE AND PUBLIC
RESOURCES
a. Summary of the Strategy: Proposals envisioned for this strategy include the
following:
Single family bond issuance subsidies or set asides for
downpayment/closing cost assistance
S:\Community Services\Hurricane Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008(03-27-08) .doc
c. Income Categories to be served: Assistance will be provided to
organizations serving households with incomes not to exceed 120% of the
Area Median Income.
$50,000 per unit
families. Low and moderate income households will receive a zero (0%) to
five (5%) low interest, direct loan up to the maximum of a 30 year repayment
period, or a combination. Interest rate will be determined on a case-by-case
residence.
f. Recipient Selection Criteria: Units must be purchased and occupied by
income eligible applicants.
g. Sponsor Selection Criteria: Applications from organizations will be
accepted while funding is available. Documentation regarding purpose and
scope of project and sponsor's organizational and housing-related experience
will be required to qualify for HHR funds. Successful candidates will be
selected according to the following criteria:
Proposed development's consistency with City of Fort Pierce' s
Comprehensive Plan
value
W AGES and Workforce Initiatives program
III. EXTREMELY LOW INCOME STRATEGY
a. Summary of the Strategies:
Strategy #1 - Repairs and Rehabilitation: Repairs and rehabilitation assistance
will be available to existing owner occupied units. The City's Rehabilitation
Specialist will inspect homes of eligible applicants to identify work activities,
through a work write up, for improvements that are needed for safe and
S:\Community Services\Hun'icane Related\Hurricane Housi ng Work Group\Revised HHR Plan 2005-2008103-27-08\.doc
sanitary habitation, correction of suhstantial code violations, or the creation of
additional living space.
Strategy #2 - Replacement of Site Build Housing: Reconstruct severely
substandard homes of eJigible owner occupied single family homes in the city
limits of Fort Pierce. Assistance will be provided to homes that are not
feasible for rehabilitation based upon structural conditions or rehabilitation
costs. Homes will be demolished and rebuilt to current code.
Strategy #4 - Acquisition of Building Materials: Homeowners will be
assisted with the purchase of building materials for minor repairs to their
homes. Funds must be used on materials that will assist with bringing homes
up to current code and/or for eligible homeowner to purchase materials to
receive assistance from a community service group. Receipts will be required
by homeowners, listing materials purchased.
Strategy #5: Hazard Mitigation: Assistance will be provided to eligible
homeowners to reduce or eliminate exposure of their lives and property from
disasters harm. Funds will be used to retrofit owner occupied homes through
installation of roofing straps, shutters, storm doors, and/or garage doors.
Strategy #6: Housing Re-entry Assistance: Provide eligible applicants with
funds to assist with temporary storage of household furnishing, security and
utility deposits that are required to secure needed housing within the city
limits of Fort Pierce.
Strategy #7: Foreclosure Eviction Prevention: Limited amount of funding
will be provided to assist with mortgage or rental payments up to (3) three
months, to eligible applicants residing within the city limits of Fort Pierce.
Strategy #9: Construction and Development Financing: Funds from S1. Lucie
County and Port St. Lucie may be pooled together if a project is found to be
beneficial for all parties . .
Strategy #10: Capital to Leverage Private and Public Resources: Funds from
St. Lucie County and Port St. Lucie may be pooled together if a project is
found to be beneficial for all parties.
c. Maximum award as noted on the Hurricane Housing Goals Chart:
Strategy #1- Repairs and Rehabilitation: $ 50,000
Strategy #2- Replacement of Site Build Housing: $100,000
Strategy #4- Acquisition of Building Materials: $1,000
Strategy #5- Hazard Mitigation: $ 5,000
Strategy #6- Housing Re-entry Assistance: $ 2,000
Strategy #7- Foreclosure Eviction Prevention: $ 2,500
Strategy #9- Construction and Development Financing: N/ A
Strategy #10- Capital to Leverage Private and Public Resources: N/A
d. Terms, Recapture and Default: Direct grant to eligible applicants for strategies #4,
#6, and #7. If applicant relocates, funds used for security deposits are to be returned
S:\Community Services\Hurricane Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008<03-270SLdoc
to the City for reuse in funding other eligible activities. Deferred payment loan @O%
interest rate for strategies # 1, #2, and #5. No payment will be required unless sale,
transfer, or rental of residence. The deferred loan will depreciate annually (see chart
below) if the owners continues to occupy the unit as their principal residence. On
each anniversary date of the execution of the deferred mortgage, the value of one
year's payment will be deducted from the balance owed. Should the property be sold
or the household fails to maintain it as their principal residence during the term of the
defer'red mortgage loan, the remaining amount becomes due and payable to the
HHRP Fund for reuse in funding other eligible activities.
5 years $5,000-$10,000 1/5 of loan amount
10 years $10,001-$15,000 111 0 of loan amount
15 years $15,001-$30,000 1115 loan amount
20 years $30,001 - $50,000 1/20 loan amount
25 years $50,001 - $75,000 1125 loan amount
30 years $75,001 - $100,00+ 1130 loan amount
e. Recipient Selection Criteria: Assistance will be provided on a first come/first
served basis following advertisement of the availability of HHRP funds . When an
served order. Priority shall be given to individuals and households cited by code
enforcement.
f. Sponsor Selection Criteria, if applicable: Not applicable
IV. COMMUNITY PLANNING STRATEGY
a. Summary of the Strategy: This strategy may be coordinated with St. Lucie County
and City of Port St. Lucie and funding may be pooled if a project is found to be
beneficial for the entire St. Lucie County. Proposals envisioned for this strategy
include one or more of the following:
Funding for subsidies or predevelopment costs required to leverage state or
federal funding for multifamily ownership or rental unit to be built in St. Lucie
County. These projects may be funded under Construction and Development
Financing or Capital to Leverage Private and Public Resources strategies.
Multi-family/single family bond issuance subsidies or set asides for down
payment/closing cost assistance for home ownership or rental projects that assist
clients under 120% of median. These projects may be funded under Construction
and Development Financing or Capital to Leverage Private and Public Resources
strategies
Coordination with the County and City of Port St. Lucie on providing building
materials to INTACT long term recovery organization under the Acquisition of
S:\Community Services\llurricane Related\Hurricane Housing Work Group\Revised HHR Plan 2005-2008(03-27-08),doc
Building Materials Strategy.
Coordination with INTACT on Minor Home Repairs for eligible homeowners
under the Housing RepairfRehabilitation strategy.
b. Fiscal Years Covered: 2005-06, 2006-07, and 2007-08
c. Maximum award as noted on the Hurricane Housing Goals Chart:
Strategy #1 - Housing Repair/Rehabilitation:
Strategy #4 - Acquisition of Building Materials:
$ 1,000 per unit
d. Terms, Recapture and Default:
Strategy #1 - Housing Repair/Rehabilitation: Deferred payment loan @ 0%
interest due and payable upon sale, transfer or rental of residence for very low
income families; Zero (0%) to five (5%) low interest loan with a maximum of
30 year repayment period, or a combination for low and moderate income
families. Interest rate will be determined on a case-by-case basis. Loans will
be due and payable upon sale, transfer or rental of residence.
Strategy #4 - Acquisition of Building Materials: Direct grant to eligible
applicants. No payment will be required, but should funds be returned after
the deposit period, they will be re-deposited into the HHRP fund for reuse in
funding other HHRP eligible strategies
e. Recipient Selection Criteria: Not applicable
f. Sponsor Selection Criteria: Applications from private or public organizations or
Housing Finance Authorities will be accepted while funding is available.
Documentation regarding purpose and scope of project and sponsor's organizational
and housing-related experience will be required to qualify for HHR funds. On all
collaborative projects, selection of successful candidate will be coordinated with the
County and City of Port St. Lucie and may include the following criteria:
Proposed development's consistency with Comprehensi ve Plans
value
WAGES and Workforce Initiative Program
g. Additional Information: None
S:\Community Services\Hurricanc Related\Hurricane HOllsing Work Group\Revised HHR Plan 20052008(m2708).doc
V. ADMINISTRATIVE BUDGET
VI.
a. Provide a brief administrative summary of expenses: The highest
administrative expenses are expected to be in the "salaries and benefits" and
"contractual services" line items. The City proposes to hire two or three staff
members to administer new strategies.
b. Up to 15 % of the allocation may be used for administrative expenses relating
to direct program administration. Provide information below:
Fiscal Year Fiscal Year Fiscal Year
2005-06 2006-07 2007-08
Salaries and Benefits $50,000 $50,000 $50,000
Office Supplies and Equipment $5,000 $5,000 $5,000
Travel Workshops, etc ... $2,500 $2,500 $2,000
Advertising $2,000 $2,000 $2,000
Contractual Services $40,000 $40,000 $40,000
Equ ipment/software Maintenance $2,000 $2,000 $2,000
Accounting and Auditing $2,000 $2,000 $2,000
Printing/Reproduction $1,000 $1,000 $] ,000
Furniture/Furnishings $2,000 $1,000 $1,000
BookslPublicationslMemberships $2,000 $2,000 $2,000
Communicati ons/Frei ghtiPostage $1,000 $1,000 $1 ,000
TOTAL $109,000 $109,000 $107,000
Homeownership Education & Counseling $13,7]6 $13,716 $]4,874
Explain any outstanding compliance issues with the State Housing Initiatives
Partnership (SHIP) Program and how those issues are currently being
addressed: None
VII. EXHIBITS:
A.
B.
C.
D.
E.
F.
Timeline for Encumbrance and Expenditure Attachment A
Hurricane Housing Goals Chart (HHGC) for each fiscal year covered
Attachment B
Certification Page Attachment C
Program Information Sheet Attachment D
Community Planning Documentation: Letters, resolutions detailing the
community planning agreement, or interlocal agreement Attachment E
Adopting Resolution - original signed, dated, witnessed or attested adopting
resolution Attachment F
S:\Community St:rvices\Hurricane Related\Hurricane Housing Work Group\Revised HHR Plan 20052008(032708).doc
EXHIBIT 4
St Lucie County Florida Online II Community Services Page 1 of 1
Community Services
St. Lucie County Lending Consortium
Community Services - Home
Social Services Division
St. Lucie County Lending Consortium
Housing Division
Transportation Division
Grants I Contracts Division
T.C. Community Action Agency
I.N.TAC.T. Program
Emergency Support Function 15
NACo Prescription Discount Card
Program
Bank Institution
Bank of
America
City National
PNC
Riverside
National
Seacoast
National
Colonial
Bankl BB&T
Wells Fargo
Contact
Melanie
Robles-Ruef
Alvaro Orozco
Gene
Simmons
Arlene Newson
Tammy Ross
Maria Reyes
Melanie Verna
Vanessa
Farnes
Grace
Monforte
Marilyn Lopez
Sonya
Straubinger
Jorge Santana
http://www.co.st-lucie.fl.us/community/comm_serv_lending.htrn
Telephone Email
melanie.robles-
(772) 807-7204
ruef@bankofamerica.com
(305) 577-7441 alvaro.orozco@citynational.com
(305) 761-7001 eugene.simmons@citynational.cor
(772) 467-3244 arlene.newson@pncmortgage.com
(772) 240-7111 tammy. ross@pncmortgage.com
(772) 370-4720 marie.reyes@riversidenb.com
(772) 462-4121 melanie.verna@riversidenb.com
(772) 871-6603 vanessa.farnes@seacoastnational.
(772) 340-0773 grace.monforte@seacoastnational.
(954) 839-1078
marilyn_lopez@colonialbank.com
(772) 331-3767
ext.1006 sonya.straubinger@wellsfargo.con
(772) 231-3767 jorge.l.santana@wellsfargo.com
ext. 1008
12/3112009
EXHIBIT 5
City of Fort Pierce
Community SeNices Division
Schedule of Mt. Olive Disbursements
1 of 1
Source:
General Ledger 2005 - 2009
EXHIBIT 6
Board of Directors
2007-2008
Dorina Jenkins, President
Assistant Director
City of Fort Pierce
Kenneth Pinnix
I st Vice President
Chief CD Division & Brownfields Program
Manager Jacksonville, FL
Elizabeth Eginton
2nd Vice President
Housing & Community Development Director
Lake County, FL
Emory M. Counts
Executive Director
Community Development Director
City of Daytona Beach
Barbara Bell-Spence
Immediate Past President
Community Development Manager
Belle Glade, FL
Cheryl Arney
Terry Beaudry
Barbara Denlinger
Carl Freeman
Anthony Grisby
Janet Hamer
Magarette Hayes
Robert Heenan
Michael Holmes
Frederick Marinelli
Phyllis Moore
Glenn Morris
Aileen Pruitt
Carlos Serrano
Jeannette Smith
Michael Smith
Shirley Taylor Prakelt
Denise Thomas
Florida Community
Development Association
3 13 S. Palmetto Ave,
Daytona Beach, FL 321 14
Mailing Address:
I SIS Herbert Street, Ste. 213,
Port Orange, FL 32129
Phone: (386) 322-3787
Fax: (386) 322-3767
Email: admin@fcdaonline.com
Website: fcdaonline.com
Florida
Community
Development
Association
Professionals Working
Together as Advocates for
Community Development
Programs.
The Florida Community
Development Association's
membership represents thousands of
constituents made up of clients, local
governments, and partners
throughout the state involved in
achieving economic, community
development and housing program
objectives.
The FCDA strives to provide
practical and technical assistance to
its members, in order to better plan,
prioritize, and carry out local
improvements and services to assist
low and moderate-income residents.
FCDA is striving to be the state's
leading training and advocacy
organization for community
development practitionersl
professionals. We earnestly want to
hear more from our members about
the trainings they want presented in
order to better respond to identified
needs. In those instances where it
may not be practical for FCDA to
present the training, we partner with
others, including the U.S.
Department of Housing and Urban
Development, to make the training
available. One of the guiding
principles of this Association is to
promote excellence in the
administration and implementation
of community development
programs and requirements change
and we work diligently to make sure
our members are fully prepared to
react to those nuances.
We maintain a close alignment with
the National Community
Association (NCDA), their data
network and advocacy efforts. In
past years, our FCDA comments and
information have been used to shape
the NCDA national position, provide
meaningful insight on the
effectiveness of policies and the way
policies were written. Our combined
voice representing so many CD
practitioners and clients across the
State is a very powerful tool, and the
more members we have the
stronger we are, and the better we
are equipped to respond to
challenges calling for reduced or
elimination of funding so critical to
the interests of communities.
FCDA is a haven for CD
Practitioners to effectively facilitate
training, gather information to
respond to questions, provide
meaningful insight and opportunities
for networking, counseling, and
promote excellence in the field of
community development.
Membership in the Association
provides a wealth of advantages
including free advertising in the
monthly newsletter, discounted
rates on any of the Florida
Community Development (FCDA)
training meetings and conferences,
the opportunity to get help from
Association members, compete for
"Excellence Awards" and
recognitions, and to pose questions.
Additionally, FCDA prides itself on
taking the concerns expressed by its
members to other state and national
organizations including the National
Community Development
Association, U.S. Conference of
Mayors, The League of Cities, and
U.S. Department of Housing and
Urban Development (HUD) officials
to advocate for the best solutions to
those concerns.
FCDA was in the forefront of
information passed on to Congress
that helped preserve community
development funding in the past and
avert HUD's elimination as a cabinet
position in the early 1990's, and we
continue to make our case and
advocate for community
development programs.
We welcome you to join us in our
efforts. Please log on to our website
at www.fcdaonline.com where you
will find a membership application.
If you have any other questions
regarding our organization, please
contact us.
Phone: (386) 322-3787
Fax: (386) 322-3767
Email: admin@fcdaonline.com
www.fcdaonline.com

Fort Pierce - Community Services Report

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