WASHINGTON — A federal agency still has “serious concerns” about the city’s plans to bring a Wahiawa elderly care center into compliance with grant requirements, according to a letter obtained by Civil Beat.

Four months after raising questions about Honolulu’s compliance with federal grants requirements, the U.S. Department of Housing and Urban Development (HUD) said the city must continue to freeze funding for ORI Anuenue Hale.

High-level city officials are working quietly with HUD to prevent the city from having to return $7.9 million in federal grant money, while HUD continues to raise questions about whether the city can meet its requirements to prevent repayment. The federal agency’s latest concerns are outlined in a Sept. 9 letter.

HUD said it already has an email response from the city, but the federal agency would not provide a copy of the email. A spokeswoman for the city asked for more information about what Civil Beat was requesting.

The letter offers more insight into a meeting between the city and HUD officials last month.

The ongoing compliance talks began after HUD had found through routine investigation that ORI Anuenue Hale was not adhering to the terms of the Community Block Development Grants it received from the federal government by way of a city-run selection process.

While ORI rejected federal investigators’ findings about underutilization of its facilities, refusal to cooperate with federal investigators and other issues, the center agreed to take steps to meet federal standards.

HUD also faulted the city for failing to adequately monitor ORI, which HUD says received more CDBG money than any other program in the state. Honolulu Mayor Peter Carlisle told Civil Beat earlier this month that he will do whatever it takes to meet HUD’s standards.

But the letter sent this month from HUD to the city days after the mayor’s comments shows that the federal agency still has  concerns about the city’s plans for compliance. In the Sept. 9 letter to Carlisle, HUD listed more than a dozen concerns with the city’s plans.

Persistent Problems

Some of the key concerns HUD raised in its letter include:

• Ambiguity about the number of clients that ORI serves. HUD stipulated that ORI’s Wellness Center should be serving “at least 50” elderly and developmentally challenged adults during “all normal hours of operation.

• The need for a specific plan to increase utilization of the facility.

• Fees that ORI may be charging for use of rental cabins on its property known as Camp Pineapple 808. HUD writes that the city needs to clarify how much ORI charges people to use the cabins in order to ensure that low and moderate income persons aren’t being excluded since CDBG grants are meant to serve them.

• ORI’s proposal to change the status of Camp Pineapple 808 to “a use which does not qualify” under federal guidelines. HUD writes that because ORI relied mostly on CDBG funding to build the camp, it “needs to bring Camp Pineapple 808 into compliance with CDBG eligible use… requirements.”

• ORI’s definition of “severely disabled.” HUD says that ORI uses an overly broad definition, which differs in “several areas” from the HUD definition.

• Access to records. HUD continues to raise concerns about ORI’s and the city’s willingness to share health information about clients using the center. HUD says that it is allowed to access these records as a condition of funding the center, and that the city “needs to ensure that ORI understands access must be given.”

There was one area in which HUD said the city may have gone too far to comply with federal findings. HUD had raised questions about a city manager connected to the city’s handling of CDBG money who failed to disclose a possible conflict of interest.

HUD wrote that it “never intended” for Keith Ishida to resign from his role as a director of the board of the Hawaii Community Reinvestment Corporation, a nonprofit that lends money to developers for affordable housing and consults those applying for CDBG funds.

Instead, federal officials wrote that Ishida could have stayed in his role and applied for a waiver from HUD. Ishida told Civil Beat in June that he resigned from the board out of an abundance of caution, and to preserve the reputations of the city and the corporation.

Still, HUD said the city still needs to submit changes made to Honolulu’s conflict of interest policies by the end of the month. Those changes must include mandatory ethics training for those responsible for reviewing, awarding or administering CDBG funds.

HUD has given Honolulu officials until Halloween to resolve the issues outlined in the Sept. 9 letter. The federal agency is requiring progress reports from the city every 15 days “until the remaining findings and concerns are resolved.”

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