Housing Authority to lose insurance

Thursday, Dec. 1, 2005 | 7:05 a.m.

The organization that provides insurance to the North Las Vegas Housing Authority is terminating the agency's policy as of Dec. 14 because of ongoing "operational and financial problems," an official with the organization said.

The decision -- which could more than double the local housing agency's insurance costs -- is a severe one, reached only twice before in the past two years, said Julius Scoggins, executive director of the Housing Authorities Risk Retention Pool. Scoggins' organization groups 91 housing authorities from four Western states, each of which pays into a pool to provide coverage. The two previous cancellations dealt with housing authorities in that four-state region.

The pool's board decided in September that the North Las Vegas Housing Authority was not "the type of housing authority we wanted to have as members," Scoggins said.

"We have an obligation to determine whether one member is creating a magnitude of risk that others shouldn't be assuming," he added.

Don England, chief executive officer of the housing authority, said the decision meant the agency -- one of three housing authorities in the Las Vegas Valley that provides housing for the poor -- would have to find a new insurance company and pay substantially more for a new policy.

He said the pool's policy cost the taxpayer-funded agency about $50,000 a year, while the "lowest quote" he had found for a new policy to date was $125,000.

England said he "disagree(d) with most of the letter communicating the decision" to terminate the existing insurance policy, but did not provide a copy of the letter Wednesday. The agency can appeal the decision, but has not decided whether to do so, England said.

Scoggins said that the pool had put the housing authority on a probation of sorts in July, giving the agency three months to fix a series of problems. In September, it found that the problems still existed.

As an example, he cited the failed Desert Mesa project, an estimated $20 million project that was supposed to provide 123 homes, 30 to people earning 80 percent or less of the area's annual median income of about $47,000.

But the project never got finished amid lawsuits over an alleged lack of payments to contractors, and plans to sell the property on Carey Avenue and Commerce Street to a private company.

Desert Mesa currently lies abandoned, with shells of houses sitting empty, its windows broken, its wiring stolen.

Larry Bush, Housing and Urban Development Department spokesman, which is the source of much of the housing authority's funds, said his agency was not aware of the insurance pool's decision.

Bush said the North Las Vegas agency was considered a "troubled housing authority," meaning the federal government began closely monitoring its performance for a two-year period that started Sept. 1.

He said the agency's current status means it cannot compete for certain federal grants.

"HUD is concerned about the insurance issue," he said. "It means they're not operating as they should."

Timothy Pratt can be reached at 259-8828 or at timothy@lasvegassun.com.