New London's housing agency says outside help won't be needed

New London - The New London Housing Authority decided Tuesday that things have improved so dramatically in the agency during the past year that it will not seek an outside management company to take over its day-to-day operations.

In a unanimous vote, the authority, which oversees 735 units of low- and moderate-income housing in the city, decided it would not need to hire a professional firm to oversee its properties.

Last year the U.S. Department of Housing and Urban Development told the agency it would have to seek outside oversight. HUD was concerned about a pending lawsuit alleging poor living conditions at the federally funded Thames River high-rise on Crystal Avenue.

HUD also cited accounting mismanagement that left the authority with about $2.8 million worth of unpaid water, sewer, utility and other bills. The housing authority has been on HUD's list of "troubled agencies" since 1998.

But in June, HUD officials reviewed the agency's efforts to correct its shortcomings and decided to leave the decision of its management to the discretion of the authority.

"... [W]e were encouraged by the progress being made to resolve outstanding NLHA issues and the level of interest by all concerned in restoring the NLHA to non-troubled status,'' wrote Karen Newton Cole, director of the Office of Receivership Oversight at HUD.

"What you have done is nothing short of remarkable,'' Chairman David Collins said Tuesday in praise of acting director Sue Shontell, who took over the agency's top spot last summer.

Since Shontell has been in charge, the authority has reduced its debt by more than $1 million, used federal stimulus money to make improvements at the two federal properties and closed a deal with a private developer to renovate and operate 160 units of moderate-income housing at Bates Woods. The authority also adopted a policy that spells out guidelines to safeguard assets and verify accounting data.

A federal inspection at Thames River also showed a dramatic improvement in living conditions there. HUD, which inspects such items as plumbing issues, damaged windows, missing screens, peeling paint and inoperable appliances, found 119 defects in 2009 compared with 566 in 2008.

"It's been a very long year to get to this point, and it was very hard work,'' said Shontell. She praised her staff for their work and dedication.

HUD also urged the authority to meet with attorneys representing the Thames River tenants, who five years ago filed a lawsuit and are now seeking a receiver to manage the complex.

"We urge NLHA to approach plaintiffs' counsel to explore a voluntary dismissal of the case,'' Cole from HUD wrote the authority. "NLHA agreed, but advised that it would be helpful if HUD made clear that it no longer was insisting that a private management be engaged to manage the project."

A hearing on the class-action lawsuit was scheduled for May but was postponed until Nov. 1, according to Shontell.

The authority has not heard back from the Reardon Law Firm of New London, which represents the tenants.

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