Audit to guide city in reforming anti-blight program

The Nutter administration yesterday promised to reform the Neighborhood Transformation Initiative, former mayor John Street's anti-blight program, which came under attack in an audit by the city controller for poor accounting.

Terry Gillen, executive director of the Redevelopment Authority, which oversees much of NTI, said that the administration would follow the recommendations in the audit. They include setting up a new tracking system, improving record-keeping and making the mayor's chief of staff the city's point person for NTI.

Done by the controller's office with the help of accounting firm WithumSmith+Brown, the audit details accounting and management problems within the $300 million program that led to the overspending of $13 million in bond money that the city doesn't have.

It took 15 months to complete the review, largely due to the limited records available, according to the report.

NTI was Street's grand plan to revitalize city neighborhoods by knocking down blighted buildings, cleaning blocks and packaging property for development. Street borrowed $296 million in bond money for the project, which he unveiled in 2001.

Gillen said that the city would begin studying the $13 million shortfall - the result of NTI not checking which funding streams were available before they bought the properties. A total of 1,500 properties were bought with the nonexistent funds.

"We'll review them and then decide whether there's another source of funding for them, so we can find a way to pay for them," Gillen said.

Gillen didn't put a timeline on the process, saying that it might take months. And until that issue is resolved, none of the remaining NTI dollars will be spent.

According to the controller's office, about $58 million remains of the original $296 million in bond money borrowed for NTI. That money has been sitting since Mayor Nutter froze NTI in mid-2008 after an internal review revealed serious accounting problems.

Councilman Darrell Clarke said that he has been frustrated by the pace of the process. He stressed that the administration may miss out on development funding through the federal stimulus act because NTI dollars to acquire land remain frozen.

"As a result of the American Recovery Act, there is arguably more money being made available for housing activities and commercial activities than I remember," Clarke said. "And I don't think we're maximizing our opportunities."

Clarke expressed concern that he still did not know when the remaining money would be made available to Council members.

"I've continued to ask the administration about the end game once the audit is completed and I haven't gotten an answer," Clarke said.

The mayor's chief of staff, Clay Armbrister, said that he was sympathetic to the concerns but that the administration first had to clean up the mess.

"We'd like to see these monies getting put to good use, but they have to be put to a use consistent with what the controller put out," Armbrister said.