Improvements Mandated at Mt. Kisco Building Cited in Comptroller’s Audit

A Mount Kisco building that is part of the state’s Mitchell-Lama middle-income housing program was one of five developments cited in a state comptroller’s audit that charged the oversight agency failed in its responsibilities.

The 32-page report released last month found that the Division of Housing and Community Renewal (DHCR) lacked proper monitoring of the financial and physical condition of Barker Terrace, a 92-unit co-op. DHCR was also criticized for its poor oversight of four other developments throughout the state, including Sunnyside Manor in Yonkers.

Comptroller Thomas DiNapoli’s auditors documented an April 2022 site visit from DHCR architects recounting hazardous physical conditions found at Barker Terrace where “many apartments are subject to flooding due to structural deficiencies and occupied apartments have gaping holes in ceilings and walls and signs of water damage.”

Management plans at Barker and one of the other developments were outdated or incomplete with missing information.

“DHCR does not adequately oversee the financial and physical conditions at the sampled developments,” the comptroller’s report stated. “Management at all five sampled developments misspent funds, and management at two of the sampled developments failed to provide a safe and clean living environment for their residents.”

The audit, which was conducted from January 2019 until November 2022, recommended that prompt action be taken when physical conditions deteriorate and to improve monitoring of finances.

Robert Ferrara, owner of Ferrara Management Group, which manages Barker Terrace for its Board of Directors, said the audit was of DHCR and its lack of follow-up to address these deficiencies.

“The board has made it abundantly clear to DHCR of certain concerns that they have with being able to take corrective actions,” Ferrara said.

Among the work that was needed to be done, were capital improvements to the heating plant and plumbing systems, Ferrara said. The heating plant has been stabilized and it is anticipated that the Board of Directors will be able to pursue the other capital improvements, he said.

A request to speak to a representative from the Board of Directors by The Examiner last week was unable to be fulfilled by deadline.

In its responses to the audit, Jason Pearson, senior vice president, statewide asset management for DHCR, wrote that the agency agrees that up-to-date management plans and corrective actions must be done as soon as possible, but also mentioned that the audit “does not sufficiently recognize the limited regulatory role DHCR has in overseeing day-to-day management of Mitchell-Lama housing.”

Pearson also stated that the report understates the investment of time and resources to maintain the housing; does not appreciate the “extraordinary impact” that the pandemic had on DHCR’s role; and does not adequately acknowledge the challenges posed to the agency considering the financial and ownership conditions under which Mitchell-Lama operates.

Along with the unflattering audit, Mount Kisco officials were angered that the Barker Terrace Board of Directors imposed a recent 54 percent increase in maintenance fees for residents. Mayor Michael Cindrich and Village Trustee Karen Schleimer said many of the residents are having difficulty making their monthly payments.

“I just don’t want to see people that are on fixed incomes be displaced because the oversight failed, and I’m not pointing blame at anybody,” Cindrich said. “I’m just saying we need to find a solution and we’re dependent on these bureaucrats that are supposed to be overseeing how money is spent and making sure the building is safe and secure, and I always envisioned that building being safe and secure.”

Schleimer said that because it’s a state agency that failed in its oversight responsibilities, the village’s state lawmakers must get involved.

“I think the only thing that we can do is we need to demand that our state representatives declare some sort of moratorium, so that these people can reside in their homes while we figure out whether the building is safe, whether it can be made safe and who’s going to pay for it and how that can be done,” Schleimer said.

Assemblyman Chris Burdick (D-Bedford) said his office was involved in a conference call with key parties and that more financial help is needed from the state.

“We are going to be advocating for more funding to assist in addressing these capital needs,” Burdick said.

Ferrara said the majority of the maintenance fee increase stemmed from utilities and insurance costs. Another factor was the rise in annual operating expenses for the property, but that previous requests to DHCR for increases had been limited previously because of the agency’s overall review of the operating budget.

A spokesman for the comptroller’s office said that within six months of the Dec. 8 release of the audit, DHCR is required to respond formally on the steps it has taken to implement the recommendations from the comptroller. If they haven’t been done, the agency needs to provide reasons why it was not completed.

The comptroller’s office will conduct a follow-up assessment one year after the report’s release.

The state’s Mitchell-Lama housing program was created in 1955 to provide affordable rental and co-op housing units to middle-income families. Income thresholds apply for each tenant or co-op shareholder. All Mitchell-Lama housing statewide is at least 45 years old, the report stated.

There are 269 state-supervised developments outside of New York City accounting for more than 105,000 apartments that were built under the program.