Business Section

Thursday - September 23rd, 1999

Editorial - Reject Sole Source YDI Housing Deal

Youth Development Inc. and its subsidiaries do good work, but that doesn't qualify the nonprofit conglomerate for a shortcut into the city treasury.
YDI's reason for existence is steering youth away from gang's toward activities in which they can pick up marketable skills and into jobs-often in the YDI family of enterprises.
One such nonprofit enterprise is YES Housing, which owns and manages eight low income apartment properties around New Mexico. City Councilor Alan Armijo advocates helping further YES's laudable enterprise by cutting it for 50 percent of the city's Affordable Housing Trust Fund.
Under changes to the agreement with the bank administering the trust fund, Trust could get as

much as 400,000 next year to build or buy and renovate housing . Depending on how the deal was structured, title to the properties might go to the city or could be retained by the nonprofit.
One of the more basic tenets of good government is the thwarting of favoritism through competitive bidding. Alan Armijo-or for that matter, Armijo and whatever four council votes can swing-should not be able to cut an exclusive deal for YDI's subsidiary. It should be open to all comers and awarded on a competitive basis.
A sole-source deal with YDI that enable it to buy property with city money and retain title would not only go against standard procurement practices but run counter to the state constitution's anti-donation clause. Governments in

New Mexico have to get fair value back for every dollar they pay out.
Besides procurement code and constitutional problems, such deal would represent bad fiscal policy. The trust fund that's financing expansion ofn the affordable housing base receives rental income from the city housing program. Instead of siphoning money off into privately owned property that would not feed income back into the trust fund, the city should invest the money where it will generate a return for the fund.

YDI's good work shouldn't obscure the issues raised by the proposed agreement. Nor should Armijo's good intentions-the sort with which the most hellacious shortcuts are generally paved-sway the council.