By DONALD WITTKOWSKI
Ocean City’s public housing agency, just two years after reeling from shaky finances and an embezzlement scandal involving its former chief executive, completed a “remarkable turnaround” Tuesday that has left it debt free and looking ahead to a major expansion project.
In a series of moves during its board meeting that underscored its financial recovery, the Ocean City Housing Authority received a clean audit, paid off its remaining debt to the city and approved an agreement that is a key part of its plan to build a new senior citizens housing complex.
“This is really the end of a dark chapter in the housing authority. It’s a monumental day. It’s a monumental achievement,” said Bob Barr, a city councilman who serves as chairman of the agency’s board of commissioners.
The celebratory mood was in dramatic contrast to the authority’s plight in 2017, when its former executive director, Alesia Watson, pleaded guilty to federal embezzlement charges and financial pressures threatened the agency’s very existence.
Watson was removed as chief executive after she admitted she had embezzled federal housing funds to pay credit card bills for personal expenses. Federal prosecutors said between $6,500 and $15,000 was lost in the scheme. Watson was sentenced to three years of probation.
When Watson was fired on May 16, 2017, the board also approved a series of reforms to overhaul the authority’s management and financial structure.
Among the management changes, the board brought in Vineland Housing Authority Executive Director Jacqueline Jones to handle the same duties for Ocean City under a shared-services agreement between both towns.
Under Jones, the agency has clawed its way out of debt, cut expenses, increased its revenue and is now turning a profit.
“It’s a remarkable turnaround. It’s a credit to everyone sitting here and everyone on the city team,” Barr said, paying tribute to Jones and her staff as well as Ocean City Mayor Jay Gillian’s administration.
Barr was particularly effusive in his praise for Gillian during public remarks at the authority’s board meeting. He said the mayor stepped in to help the housing authority recover from the severe flooding of Hurricane Sandy in 2012.
“When there were tough times, he certainly didn’t turn his back,” Barr said, crediting Gillian for protecting the housing authority’s residents from the ravages of the hurricane.
At the end of 2016, the housing authority still owed the city about $330,000 in Hurricane Sandy recovery funding, Jones said. Settling the remainder of the debt, the authority’s board approved a final payment of about $152,000 to the city on Tuesday.
Barr said Gillian patiently waited for the authority to repay the city, even though he had the right to immediately demand the money.
“He would have been within his rights to collect his check and close his door,” Barr said.
The authority’s stronger finances allowed it to repay the city. The agency also paid back the state about $50,000 in Hurricane Sandy recovery funding, Jones said.
In another sign reflecting its financial turnaround, the housing authority has dramatically boosted its revenue and is now operating at a profit, according to its most recent audit.
“This is a clean audit, with no findings or recommendations,” Michael Garcia, a partner with the Ocean City accounting firm of Ford-Scott & Associates LLC, said during a presentation to the authority’s board members.
Garcia characterized the authority’s recovery as a “terrific turnaround” involving both its finances and operations.
“The turnaround in the finances has been just as strong as the procedures,” he said.
This was the second straight year that the authority was given a clean audit, another step in its financial turnabout following Watson’s removal.
A week after Watson’s guilty plea, the housing authority hired Ford-Scott & Associates to conduct an audit of the agency’s finances for 2016. The 2016 audit uncovered 15 “findings” needing corrective action.
The most recent audit, for the 2018 fiscal year, had no negative findings or recommendations, Garcia said.
“It’s really a pleasure to present an audit when it’s this clean,” he said.
Revenue for fiscal 2018 jumped to more than $982,000, compared to $731,000 the previous year. Garcia attributed the big increase in revenue to the authority making sure that it is now charging and collecting the proper rent from its residents.
For fiscal 2018, the authority’s operating expenses declined about $118,000 due to lower costs for salaries, benefits and pensions. Moreover, the agency turned a profit of $179,452, compared to a nearly $300,000 loss in the prior fiscal year, according to Garcia.
In another key piece of business at Tuesday’s meeting, the board approved a shared-services agreement with the city for the construction of a 32-unit senior citizens housing project that will replace the authority’s flood-plagued Pecks Beach Village complex on Fourth Street.
Jones said the authority will kick in $4.4 million and the city will contribute $3.8 million for the new project, known as Speitel Commons, named in honor of the late housing authority commissioner Edmond C. Speitel Sr.
Construction on Speitel Commons is expected to get underway in the second quarter of 2020 and be completed in 2021, Jones said.
Separately, the shared-services agreement with the city will also allow the authority to move forward with a $2.7 million rehabilitation of 61 units of affordable housing at its Bayview Manor complex at Sixth Street and West Avenue.
Senior citizens now living in the cottage-style Pecks Beach Village units will move into the new Speitel Commons housing complex. Afterward, the senior citizens portion of Pecks Beach Village on the north side of Fourth Street will be demolished.
Pecks Beach Village also includes a 40-unit complex for low-income families. That part of Pecks Beach will remain open after the Speitel Commons project is built.
Jones said the family section of Pecks Beach Village sits on slightly higher land than the senior citizens complex and does not flood as much. Eventually, the authority hopes to rebuild the family section as well with new housing.