Bali Vacations and $3.5 Million of Taxpayers' Money
By Steve Magdziak
By Steve Magdziak
How many of us wake up in the morning and think to ourselves, "gee I can't wait to go to work this morning and pay for a someone else’s mortgage while they go on an all-expenses paid vacation to Bali."
That’s basically what happened when Council members Dave Leckness (up for re-election) and Frank Ury voted to grant a waiver to a “low-income” applicant for a taxpayer-subsidized unit.
|The Ridge development includes|
taxpayer-subsidized "low income" units
The unit in question is part of a development subsidized by the taxpayers of Mission Viejo (“MV”), called “The Ridge”. This development is comprised of 144 units with 17 Very Low-Income and 5 Low-Income, costing MV taxpayers over $3.5 million dollars.
So how does a vacation to Bali figure in to this? The applicant in question applied for a low-income unit within The Ridge. Lennar, the developer, told the applicant to pay off her car loan which she did with "gift money" from her Dad. This pushed her over the Annual Gross Income limit and the applicant was declined. But three MV City Council members; Dave Leckness, Frank Ury and Rhonda Reardon, passed three actions to change the Mission Viejo Housing Authority (“MVHA”) policy which enabled the applicant to qualify (Cathy Schlicht voted no and Trish Kelly was absent). The policy changes were to:
1. Increase Gift Limit to $14,000
2. Lower the affordable housing price at the discretion of the Executive Director of MVHA (in my opinion, this may lead to staff changing the cost of the house without public comment)
3. Let the seller pay some of the closing cost outside the new $14,000 gift limit.
This translated to the following benefits to the applicant:
1. Gift limit increased to $14,000
2. Fair market value for this one bedroom is $260,000 however, her housing unit was decreased in price from $149,200 to $144,000.
3. Lennar will pay $2,155 in closing costs - not to be included as "gift money".
But that’s not all.
Before she could get approved under this new policy, the applicant had to pay back her Dad some "gift money" to bring her under the new increased limit of $14,000. The applicant was approved with the new policy change bringing her income close to $53,950, with roughly $14,000 in "gift money" included. By coincidence, MVHA learned she was “out of the country on vacation for two weeks." After query, we learned that her boyfriend gifted her a trip to Bali valued at $2,500. This new "gift money" put her over the new limit and ONCE AGAIN she was declined.
Knowing all this, Councilman Dave Leckness (up for re-election) pushed a vote to move forward anyway, apparently seeing nothing wrong with this. Councilman Frank Ury (who may run for County Board of Supervisors, which would put him in charge of even more taxpayer-subsidized low-income housing) agreed with Leckness, stating "...she told the truth...[about her income]", implying she should be approved with a waiver.
And there’s more.
Mayor Rhonda Reardon learned that this applicant’s brother also lives in The Ridge, in a very low-income unit. This was interesting, since if you’re "poor" wouldn’t it make sense to live together as a family and share expenses? We then learned from developer Lennar that the brother was also approved under similar circumstances, with excessive "gift money".
Leckness admonished the City representative for questioning the odor surrounding the deal, implying that she was trying not to get this applicant approved (sounds right to me). Why he keeps pushing for taxpayers subsidies for this apparently well-heeled individual is unknown, but in my opinion it seemed as though he didn't like the taxpayers knowing that the family appears to have means to pay for their own housing. And come to find out, the City representative has been asking for developer Lennar’s file on the brother, since that was never sent to MVHA. The City representative states if Lennar gave them this information during the review, her brother would not have been approved.
Does this look fishy to you? Apparently, it doesn’t to Leckness or Ury. Leckness seemed to want to stop the discussion and said "...the ball is in Trish [Kelly]'s court..." , knowing that he had Ury's vote and only needed one more to get this approved.
We know that Leckness and Ury voted to waive the policy for this applicant, while Cathy Schlicht, Rhonda Reardon, and Trish Kelly voted no. The question is, why are Leckness and Ury voting to benefit this applicant? I intend to look into this further and will report what I find.
In the meantime, I highly recommend watching the clip of this meeting by copying the following into your web browser: http://tinyurl.com/mjgx5z8 . I also encourage you to write a letter to City Hall thanking them for this common sense vote. While you’re at it, please ask that Lennar turn over the information on the brother as requested by the City representative, and request that this be put back on the agenda to allow for public comment. Email your council members c/o: email@example.com (ask that your email be forwarded to them) or by calling City Hall at: (949) 470-3000.
Contributing Editor Steve Magdziak is a small business owner and resident of Mission Viejo.