Portsmouth: Fiscal problems plague Quaker Manor/Estates

‘There isn’t enough money to pay for the operations,’ Housing Authority chair says

By Jim McGaw
Posted 2/24/22

PORTSMOUTH — “How did we get into this situation?”

That was the question posed by Vonnie Nordby to the Portsmouth Housing Authority’s (PHA) Board of Commissioners …

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Portsmouth: Fiscal problems plague Quaker Manor/Estates

‘There isn’t enough money to pay for the operations,’ Housing Authority chair says

Posted

PORTSMOUTH — “How did we get into this situation?”

That was the question posed by Vonnie Nordby to the Portsmouth Housing Authority’s (PHA) Board of Commissioners Friday regarding the ongoing situation facing residents — like herself — of Quaker Manor/Quaker Estates, the town’s public housing complex.

Since around 2017, many tenants say, their living conditions have deteriorated due to the on-site management, or lack thereof. They tell stories of apartments backed up with sewage, going without heat for weeks, issues with garbage disposal and broken-down appliances.

The issue, PHA Board Chairman Jim Seveney told Nordby and the other handful of residents who attended the meeting at Town Hall, comes down to dollars and cents due to past financial irregularities caused by the housing complex’s prior management company.

First, some background: Quaker Manor and Quaker Estates originally operated as federally subsidized affordable housing for the elderly and people with disabilities under overside and regulatory authority of the U.S. Department of Housing and Urban Development (HUD). HUD provided vouchers for a portion of the rent, with tenants paying the balance based on their income. The properties were operated as non-profit businesses by a management agent, Coastal Housing Corporation, and did not qualify for any HUD back loan programs, according to PHA.

By 2015, the original Quaker Manor housing units were more than 45 years old and in need of significant repairs and upgrade. Jim Dilley, running Coastal while also acting as executive director of PHA at that time, needed money to fix up the older buildings, according to Seveney.

Although no record of a vote or decision by PHA to seek a loan could be found by the current board members, an agreement was reached with HUD for the complex to switch from its Section 9 housing designation to Section 8, which allows for a public housing authority to leverage private financing — such as a bank loan — when taking on major capital projects. (Under Section 9, funding for capital projects comes directly from HUD, which has experienced decreased funding over the years.)

“When (Dilley) did that, that opened the door to apply for and receive commercial loans. He got a loan for $1.2 million. The money never went to Coastal Housing, it went to a bank,” said Seveney, adding that the bank paid the contractors for the work.

But that wasn’t the real problem, he said 

“Although the place needed more than $1.2 million, the issue arose with the debt service — the ability to pay your monthly mortgage. As it turned out, with the level of staff they had and the way they were operating, they couldn’t make their mortgage,” Seveney said.

By 2018, he said, “Coastal had missed several mortgage payments,” and HUD was inquiring about the mortgage reports. “That’s about the time Mr. Dilley left.”

At one point, HUD issued a notice of violation to Coastal for non-compliance with financial reporting requirements. Coastal was required to find a suitable replacement management agent, and Phoenix Property Management took over Quaker Manor/Estates on Jan. 1, 2021. 

By that time, the Town Council had revived the PHA, which had been essentially dormant since March 2018. Mr. Seveney, who is also a state senator, joined the board along with Terri Cortvriend, a state representative. The other board members are Gary Gump, Ronald Harnois and Sharlene Stoker Patton.

In the meantime, complaints from residents of the complex started piling up. “They have no cash flow, and that affects their ability to staff,” he said of the current management company, which is keeping things minimally staffed — “keeping the lights on,” as Seveney put it — while it pays back the old mortgage payments.

“To this day there isn’t enough money to pay for the operations,” Seveney said, while adding he believes that Phoenix has “done some pretty good things.” (Tenants have said they don’t have a problem with Phoenix Management itself, but rather the small staff that manages the office at the complex.)

When Nordby asked what happens if the numerous problems at the complex don’t get resolved, Seveney said he couldn’t answer that. “Probably nothing good,” he said.

However, Charles Levesque, the PHA board’s lawyer, assured tenants that the PHA and Phoenix Management are “totally committed” to finding a solution. He noted that his father, as well as Seveney’s, were both “intrinsically involved in” the original development of the housing complex, so they have a personal stake in its success.

Report to council

The town-wide chatter about the ongoing issues at Quaker Manor/Estates prompted the Town Council to put the matter on its Feb. 14 agenda for discussion.

“These are some of our most vulnerable citizens and we have to make sure they’re being taken care of,” said council member Keith Hamilton, noting he wanted assurances from PHA that things were “moving in the right direction.”

Seveney urged the council to read the annual reports for 2020 and 2021 for background, and noted the PHA was working hard to try to “clean up the issues” that began in 2017, when management changed. He did not sugarcoat things.

“The circumstance still is dire, but not for all of the housing there,” Seveney said, noting the most serious maintenance issues can be found at the older Quaker Manor portion of the complex. “There isn’t enough money; we’re working on that.”

Phoenix Management, however, is doing a good job in “trying to pull things together.”

Unfortunately, much of it comes down to money “and there isn’t much,” Seveney said, before hinting he may be coming back to the council at some point for some financial assistance from the town. 

“Just a preview of coming attractions,” he said.

Next meeting

The PHA Board of Commissioners will next meet on Wednesday, March 23, at 4 p.m.

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