WASHINGTON — On the day of a federal deadline, Honolulu city officials outlined their most detailed plan yet for bringing a Wahiawa elderly care center into compliance with federal grant requirements.

The U.S. Department of Housing and Urban Development had said that such a plan would have to be submitted by Oct. 31 or Honolulu would have to return $7.9 million in Community Development Block Grant money.

That’s the amount that HUD doled out to the city for ORI Anuenue Hale in less than a decade, and ORI used the funds to purchase land and build facilities. During routine federal monitoring last spring, investigators found a slew of compliance issues that prompted them to require “immediate corrective action” by the city.

A spokeswoman for HUD said that the agency will not have a formal response to the city’s plan for at least several weeks.

One major problem: Underutilization of the facility. An investigator reported seeing just five people using facilities on ORI’s 40-acre campus. While ORI disputed that observation, the level of utilization reported by HUD was corroborated by a Civil Beat site visit. In a later visit, Civil Beat saw about a dozen clients at the center.

In an Oct. 31 letter from the city to HUD, Honolulu Budget Director Michael Hansen wrote that ORI’s Wellness Center will serve at least 50 eligible elderly and disabled clients “during all normal hours of operation” by June 30, 2012. He also committed ORI to renting out Camp Pineapple 808 facilities — a group of cabins on the site — to at least 25 eligible users per month by that time.

The city reports that ORI is now serving about 20 individuals per day at its Wellness Center. Hansen outlined specific strategies — including partnerships with other care providers like Case Management Inc. — for ORI to increase utilization at its facilities.

The city’s plan includes monthly utilization targets in advance of the June 30, 2012 deadline.

Hansen confirmed a federal investigator’s finding that ORI had rented out Camp Pineapple inappropriately to outside groups, but said that nothing in ORI’s financial records suggests that ORI or the city owe the federal government any money. A brochure for the camp had advertised cabin rentals as open to wedding and graduation parties, as well as family reunions and corporate events.

“While (ORI) appears to have generated past income from rentals of Camp Pineapple to persons other than elderly persons and adults with severe disabilities, that practice has been corrected,” Hansen wrote. “In any event, income generated from these rentals was offset by operating costs for the Camp. In other words, (ORI) was still operating Camp Pineapple at a net loss.”

Overall, ORI absorbs about $16,000 in Camp Pineapple 808 losses per year, Hansen reported. He said that’s possible because ORI “generates sufficient income from its operating activities” to cover the camp’s losses.

But ORI still shows a net loss of $29,743 in the first six months of this fiscal year.

Hansen said that ORI’s overall payroll expenses are primarily for payment to custodians, totaling about $9,000 between the Wellness Center and Camp Pineapple 808 in that period. Other expenses listed in the city’s letter: Utilities, advertising, insurance, professional fees, supplies and taxes.

Advertising was ORI’s costliest expenditure so far this year. It reported spending $15,802 on advertising last fiscal year, the vast majority of it on Camp Pineapple 808. It also spent more than $13,000 on “equipment and supplies” for the camp.

In its letter to HUD, the city described specifics steps it has taken to make eligible low- and moderate-income residents aware of the camp’s cabins. It listed one dozen schools and centers serving low- to moderate-income residents that have already responded to city outreach efforts about the cabins. The city reports that it is waiting to hear back from 16 other groups.

As with increasing utilization at the Wellness Center, Hansen outlined specific month-by-month goals for increasing the number of eligible clients renting cabins at Camp Pineapple 808.

In having reviewed ORI’s financial records, the city reported that ORI charges fees for some of the services that take place at its facilities, like an elderly day-care program. Hansen said that this program represents a partnership between ORI and the Waianae Coast Comprehensive Health Center, and charges clients $60 per day — the majority of which goes to ORI.

He also reported that third parties who offer services at ORI facilities — like hair dressers and a doctor — charge fees, but that a slew of activities like mahjong and karaoke are free.

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