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Before the economic meltdown, Port St. Lucie, Fla., was a mecca for real estate investors. A torrent of affordable housing growth spread throughout the city, not far from Orlando and West Palm Beach, and investors often bought up properties and resold them quickly for profit. Property values rose in double digits until — suddenly and abruptly — there was no money to lend.

Since the meltdown, property values in Port St. Lucie have plummeted (more than 40 percent in three years), foreclosures have skyrocketed and some neighborhoods have been decimated. Out of a neighborhood of 60 or 70 homes, only one or two houses might be occupied. The community's service-based economy, much of it centered on the construction industry, also tanked. The city faced a new set of grim realities — blight, fire and safety issues related to abandoned houses and a need for security for people left in the neighborhoods.

Help came in 2009 in the form of a $13.5 million U.S. Housing and Economic Recovery Act Neighborhood Stabilization Program (NSP) grant, a nice chunk of change for a city of 160,000 or so. The funds were to be used to acquire, rehabilitate when feasible or demolish blighted, foreclosed and abandoned residential properties in order to stabilize neighborhoods. The goal was to resell the homes to qualified low- and middle-income families.

But with the grant came new questions: How can the city use the money to the best advantage? With suffering local vendors clamoring for a piece of the business, how can the city be fair to everyone? Most urgently, how can the city allocate the money in the grant's compressed time frame?

Providing the answers in Port St. Lucie included a level of innovation worthy of the NIGP 2010 Innovation Award, which is presented to governmental agencies that have a great vision for public service and drive that vision through innovation. "We got together and didn't do business the way we have always done business," says Cheryl Shanaberger, MPA, CPPO, deputy director, Office of Management and Budget (OMB), Port St. Lucie. "We collaborated with all the stakeholders, the city council, local vendors and other city departments. We listened to what they needed." The money had to be allocated in September 2009, and the easiest route would have been to hire general contractors for the homes, but the City Council wanted to spread the work around as much as possible.

Departments working together

Allocating the grant money quickly and effectively involved a high level of cooperation among city departments, including Community Services, Risk Management, the Building Department, and OMB. "We had a lot of meetings at the beginning," recalls Shanaberger. "The community services department came to us and said this is what we want to do: Buy 250 homes, get them repaired and get them sold. When and what can we do to get this accomplished? "

To achieve the mission, the city OMB set out to reduce vendor participation costs, to increase local vendor opportunity and to encourage and educate local vendors on the city bidding process. OMB established a plan to streamline the bidding process while using current technology and managing the expected increased number of resulting bids and e-quotes.

Meanwhile, the community service department coordinated with realtors to buy the homes, Risk Management oversaw the insurance requirements, and the building department inspected the homes to make sure they could be repaired and were worth repairing. The city paid no more than 15 percent below the fair market value of the foreclosed homes. Beyond that requirement, homes were selected strategically to have the biggest impact on a neighborhood, for example, by buying up three or four homes in a row to stabilize an area. The city also concentrated on homes that were in areas designated on a map as in trouble. As soon as a home was purchased, it became a city property, not generating taxes and needing somebody to mow the lawn, thus representing both an expense and a reduction in city revenue. It needed to be fixed up fast to sell.

To increase local vendor participation for the NSP homes, OMB issued bids for various types of individual trades that would be needed (instead of using current city contracts or general contractors). Local vendors were provided an opportunity to submit using a Request for Qualifications process. Qualified vendors were then listed as a vendor of one or more trade groups that would be utilized to submit a quote for the individual home when it became available.

OMB issued 30 Requests for Qualifications, covering everything from HVAC to plumbing, garage doors to asbestos and mold inspections, debris removal to flooring and carpeting. The city prequalified a list of vendors for each trade, selecting businesses that had longevity, were insured and had no lawsuits against them. The vendors had to have a good record, but they did not have to be local. Qualified vendors could compete for each house individually by submitting bids on the Onvia DemandStar (e-bidding) system.