No Return

Motel owners are withholding security deposits meant to benefit homeless tenants

BY CHELSEA EDGAR • chelsea@sevendaysvt.com

When Brenda Ouellette moved into Room 107 at the Brattleboro Quality Inn last fall, the paint was peeling, the bathroom was rife with black mold, and the sink was separating from the wall. These weren’t the worst conditions Ouellette had seen at the Quality Inn, where she’d been living since January 2022 through a state program that assists Vermonters experiencing homelessness by placing them temporarily in motels. Her fellow guests, all of whom were in the program, regularly went without heat or a working microwave, the only cooking appliance allowed in their rooms, Ouellette said. Ouellette, who also worked at the hotel during her stay, said management often took weeks to respond to maintenance requests — if it responded at all.

On at least one occasion, Ouellette said, management told her to hide live wires above ceiling tiles in anticipation of a visit from the fire marshal. Toilets frequently backed up and overflowed; a Vermont

Department of Health complaint filed by a social service worker in November 2021 alleged that many of the mattresses were stained with blood. Ouellette briefly lived in a room with such a bad bedbug infestation that she had to see a doctor for the bites. For these accommodations, the hotel was billing the state roughly $3,880 a month per room, almost triple the median rent for a one-bedroom apartment in Brattleboro.

In October, Ouellette was approved for a subsidized apartment in West Brattleboro. After two years of homelessness, she was relieved to finally have a place to call her own. “I thought, I don’t have to worry about all the bullshit,” Ouellette said.

For Ouellette and the roughly 1,730 other households enrolled in the program between July and October 2022, the state paid motels a $3,300 security deposit. Because of an agreement she’d signed with the Quality Inn, Ouellette knew she should be eligible to collect the deposit when she moved out in early November. Ouellette su ers from chronic health problems, and that money could have allowed her to buy a winter coat without skimping on other necessities, or get ahead on her rent in case she ended up in the hospital.

Ouellette said she took care to leave her room cleaner than she found it. She scrubbed the furniture with Simple Green, stripped her bed, vacuumed the carpet, scoured the mini fridge and microwave inside and out, wiped the grime and dust from the heater vents, and disinfected the bathroom. A hotel employee inspected her room, Ouellette said, and didn’t note any problems.

When Ouellette called the front desk the day after she moved out to see whether she’d forgotten anything, she said, she was told that someone else had already moved in.

But nearly five months later, Ouellette still hasn’t gotten her security deposit,

Vermont Lawmakers Are Preparing to Double eir Salaries

BY KEVIN MCCALLUM k evin@sevendaysvt.com

Following a historic level of turnover in the Vermont legislature last year, lawmakers are considering giving themselves a big raise next biennium. Under a bill advancing in the Senate, Vermont’s 180 lawmakers, who currently make $14,610 per year, would earn just under $30,000. ey’d also become eligible for medical benefits.

Several lawmakers testified in favor, arguing that the changes are overdue and crucial to ensuring that the legislature isn’t made up only of people who can afford to serve.

Rep. Ashley Bartley (R-Fairfax) testified that she lost her job as a human resources manager at a South Burlington property management company due to the challenges of juggling work and her service in Montpelier. “We couldn’t and can’t survive on one income. It’s not possible,” she testified of her young family.

“Vermont working families deserve a voice here in these walls,” she added.

“We are truly resetting the compensation package,” Sen. Ruth Hardy (D-Addison) told Seven Days. She noted that the last time lawmakers revised their own pay was 20 years ago. e bill, S.39, won unanimous approval last week in the Senate Government Operations Committee, which Hardy chairs, and this week heads to the pivotal Appropriations Committee.

It would boost lawmakers’ weekly pay during the typical 18-week session from $811 to $1,210 beginning in 2025. Post-session, lawmakers would earn a day’s pay each week for meetings, calls, emails and contacts with constituents.

In addition, the bill would enable lawmakers to access the medical benefits that state workers enjoy.

Finally, the bill calls for reimbursement of up to $1,600 per year for childcare for households making $75,000 or less.

e total cost of the bill is still being calculated by the Joint Fiscal Office, but the salary component alone would exceed $2.7 million. ➆

A center for people facing mental health crises is proposed for the NEK

BY COLIN FLANDERS • colin@sevendaysvt.com

Urgent care for the mind — that’s the idea behind a new proposal to improve mental health care in the Northeast Kingdom.

A nonprofit mental health agency in the region wants to launch a treatment center for people suffering from panic attacks, suicidal thoughts and other psychiatric crises. They would be able to walk in off the street without an appointment, see a trained clinician and even stay a few days for observation, if necessary.

As Vermont grapples with a mental health crisis that has strained local resources, the proposal is envisioned as a way to serve people before they land in a hospital emergency room to languish for days, or even weeks, awaiting treatment — tying up precious beds in the process.

The problem is especially pronounced in rural areas, where hospitals typically have small emergency rooms and no psychiatrists on staff. At North Country Hospital in Newport, mental health “boarders” — those who are awaiting treatment — sometimes fill nearly half of the 11-bed emergency room. “The only thing we’re really doing is keeping them safe,” said Megan Sargent, the hospital’s vice president of patient care services.

Sargent said the logjam forces people with medical emergencies to wait longer for care. Some end up leaving without being seen.

The proposed center, which would be named the Front Porch, is based on a model from the National Alliance on Mental Illness that’s proven successful elsewhere.

Walk-ins would be assessed by mental health professionals, who could determine how to stabilize them. That might mean talking to a therapist and returning for follow-up sessions. Those feeling suicidal who do not want to be alone could also choose to stay overnight. The center would eventually have up to six beds that it could use to observe people for as many as 10 days.

The administration of Gov. Phil Scott supports the idea and has proposed spending $1.6 million in Medicaid dollars to cover costs, a request that lawmakers would need to approve.

“If this goes well, we’d like to spread it elsewhere,” said Alison Krompf, deputy commissioner of the Vermont Department of Mental Health.

That might include Chittenden County, where the Howard Center and the University of Vermont Medical Center say they are collaborating on a program. “We anticipate support from the state and look forward to bringing a program on-line in the near term,” said Bob Bick, the Howard Center’s CEO, in a statement.

The concept for the NEK proposal came from Chris and Betty Barrett, a Newport Center couple who have spent years calling for better mental health services in their rural slice of Vermont. Theirs is an advocacy born of grief: In 2004, the couple’s son, Michael, killed himself while living out of state. That led Betty to join a local suicide prevention group.

Years later, a brief stint at North Country Hospital inspired Betty to adjust her efforts. She was moved out of a room in the ER to an overflow space because staff members needed the bed for an incoming mental health patient — their fourth that day. She later learned that people were routinely housed in the ER because there were no dedicated psychiatric beds available anywhere in the state.

Betty, who had long struggled with depression and spent time in psychiatric units during her forties, was incensed: Chaotic emergency rooms were the last place psychiatric patients should be. She arranged a meeting with the hospital’s CEO and later testified before the legislature to call for a new mental health facility in the NEK. But nothing came of it.

Frustrated by the state’s inaction, the Barretts eventually went straight to the top. Betty wrote to Scott last year asking

Lawmakers Won’t Overhaul State Job Program, Order Study Instead

BY KEVIN MCCALLUM kevin@sevendaysvt.com

nor has the Quality Inn’s owner, Anil Sachdev, returned her calls and texts.

In December, Ouellette contacted Legal Services Vermont, a nonprofit that helps low-income Vermonters with civil issues; two months later, a Legal Services attorney, Mark Hengstler, sent Sachdev a letter ordering him to release Ouellette’s security deposit or explain his reasons for withholding it within 10 days. Sachdev has not replied, and Ouellette is now preparing to sue him in civil court, because the state won’t intervene. “I did everything right,” Ouellette said. “The state knows this guy is robbing them of their money, and I don’t understand why they’re not jumping in to hold him accountable.”

Lawmakers have backed away from a major revamp to Vermont’s main job creation initiative, settling instead for making the program more transparent and creating a task force to figure out what kind of economic incentives really work.

A bill in the House would have halted the Vermont Employment Growth Incentive program whenever the state unemployment rate fell below 5 percent. (The state’s unemployment rate was 2.9 percent last week.) Backers of the bill questioned whether Vermont should be paying companies to expand when many can’t fill the job openings they already have.

But it soon became apparent to lawmakers that reforming the program was neither as necessary nor as easy as some had assumed, according to Austin Davis, a lobbyist for the Lake Champlain Chamber.

Since it began in 2007, VEGI has spurred $1.1 billion in capital investments and created 8,812 new jobs that have generated $515 million in payroll, according to the program’s annual report.

But the program has been criticized for not providing detailed information about the individual grants. State Auditor Doug Hoffer said the lack of transparency makes it impossible to be sure that the state isn’t giving away tax dollars for jobs that were going to be created here anyway.

The new version of H.10 would increase the reporting requirements. Companies that receive the grants would need to provide more public detail about the number of jobs and salary ranges created. The measure also includes more robust conflict of interest protections and clarifies when the council overseeing the program can go into executive session.

The bill would create a five-member Task Force on Economic Development Incentives to explore the “purpose and performance of current State-funded economic development incentive programs,” with a report on alternatives due by January 15, 2024. ➆

Sachdev did not respond to multiple attempts to arrange an interview. In reply to a text message last week, Sachdev wrote that he was in India, “with limited phone coverage.” He didn’t return a follow-up message, nor did he reply to a list of emailed questions. Seven Days attempted to reach him again on Monday, after one of his associates indicated he had returned, and got no response.

He told VTDigger.org that his staff members work to fix problems promptly, but he blamed residents for delaying repairs by insisting that motel staff give them notice before going into their rooms. He added that he’ll have to invest heavily to make his properties suitable for tourists again when funding for the motel housing program runs out at the end of May.

Since March 2020, Vermont has spent upwards of $180 million to shelter more than 6,000 households in hotels. An infusion of federal aid during the pandemic allowed the state to transform a decades-old program that paid for motel rooms for unhoused Vermonters on the coldest winter nights into a provisional solution to twin crises: the state’s dire housing shortage and its rising rate of homelessness, now the secondhighest per capita in the country.

The security deposits represent a small fraction of Vermont’s spending on the motel program, amounting to just under $6 million. But the state did little to prevent motel owners from exploiting its largesse, nor did it create any mechanisms to ensure that former residents would receive the funds that were meant to help them get on their feet.

Most of that cash, along with the rest of the money the state has poured into the motel program, has wound up in the hands of private business owners such as Sachdev, a principal in seven Vermont hotels whose chief source of revenue is unhoused, low-income guests. Since July, his properties have collectively brought in close to $20 million in monthly payments from the state, according to data from the Department for Children and Families, which administers the motel program. That equals roughly one-third of the department’s total spending since April on the program, which encompasses more than 70 lodging establishments.

As affordable housing remains in critically short supply, the state has become increasingly dependent on motels to provide shelter for its growing unhoused population. In summer 2022, DCF revised the motel program to more closely resemble a rental arrangement, with a contract between owners and occupants that guaranteed three months of housing at a time, for up to 18 months. To encourage motels to participate, the state threw in an extra enticement: the $3,300 security deposits.

If residents leave the motel after less than four months, according to the contract, hotels are supposed to return the deposits to DCF, minus any damages. Residents who stay four months or longer are eligible to collect the deposits when they move out, as long as their rooms are in good condition.

These rules were intended to offer greater stability for long-term occupants, with a crucial caveat: Motel tenants would be exempt from renter protections under state law, a condition that was spelled out in the Budget Adjustment Act that year. The program guidelines explicitly state that DCF will not get involved in a security deposit dispute between a motel and a resident, nor does the department require motel owners to document their damage claims. DCF confirmed that it only tracks the $1.4 million in security deposits due back to the state. The remaining $4.3 million, ostensibly for people who leave the program, is being held entirely at the discretion of motel owners.

Hengstler, Ouellette’s attorney, said DCF officials have been referring people with security deposit complaints to Legal Services. Taking a motel owner to court can present an enormous hurdle for a person who used the program, Hengstler said: “If I’ve been homeless and I’m exiting a motel, the moment I most need that $3,300 is the minute I step out the door.”

Ouellette’s Quality Inn room inspection form, which Hengstler shared with Seven Days, noted that “the cost of repairs can be adjusted towards [the] security deposit,” without making a distinction between existing damages and damages caused by the occupant. That form, which came from the management of the Quality Inn, doesn’t align with the program’s stipulation that damage must have been caused by the tenant in order for a motel to withhold the deposit.

Since November, Hengstler has fielded two or three calls a week from former motel residents who say their security deposits have been wrongfully withheld; a substantial number of those calls, Hengstler said, have come from past occupants of Sachdev’s properties, which include the Hilltop Inn in Berlin; the Cortina Inn, Quality Inn, Pine Tree Lodge and Econo Lodge in Rutland; and the Econo Lodge in Montpelier. The state hasn’t had much luck getting its money back, either. As of mid-March, Sachdev’s hotels still owed almost $310,000 of roughly $380,000 they received in deposits for guests who left after less than four months, according to data provided by DCF.

“Somebody like Anil is the product of the state’s creation,” Hengstler said. DCF, he contends, could have required motels to submit detailed damage claims, mandated that deposits be held in escrow and imposed sanctions on hotels for improperly withholding deposits. “It was a mistake to not create safeguards to get this money to people,” he said. “And now that we all see that it’s a mistake, I think that we should expect our government to acknowledge it and work to correct it. And that’s not what’s happening.”

According to Hengstler, Mark Eley, who until recently served as director of the general assistance program at DCF, has acknowledged privately that Sachdev “doesn’t follow the rules.” “But his position appears to be, ‘There’s not much we can do about it. He’s got rooms, and we need rooms.’” (Eley did not respond to questions about these remarks.)

In an interview in February, thenacting DCF commissioner Harry Chen said he was “concerned” about the motels’ failure to return security deposits to former residents. In January, DCF sent letters to motel owners encouraging them to document damages, but beyond that, Chen maintained that the department had limited leverage. “The obvious challenge is that these motels don’t have agreements with us,” said Chen, who stepped down at the end of last month. “I don’t know that we have another legal framework on which to do anything other than to put the landlords on notice.”

To pay for the program, he explained, the state used funds from the federal Emergency Rental Assistance Program, which required a contract between a building owner and an occupant. The department saw no need to add guardrails to prevent motel owners from abusing the system, because “we weren’t exactly sure that would necessarily be a challenge,” said Katarina Lisaius, a senior adviser to the DCF commissioner. “So we’re mitigating as best we can in real time.”

On the whole, Chen said, the motel program has been an imperfect solution to a pressing problem; in deciding how to deal with owners who don’t follow the rules, he suggested that the state has to carefully weigh the consequences. “We have people who are not being housed every day, because there aren’t enough hotel rooms,” he said. “So, you have to balance the need with the supply.”

Some motel owners have taken full advantage of DCF’s willingness to do business at practically any cost. Before the state imposed a monthly rate cap of $5,250 per room in September, the Bradford Motel was charging $8,000 a month for its rooms while occupants went without air conditioning, an amenity the owner offered only to “regular” paying guests, VTDigger recently reported. The owner told VTDigger that DCF officials encouraged her to name a price that would offset the risk she felt she was assuming by taking in statefunded guests, whom she largely blamed for the problems at the motel.

Between July and September 2022, the Vermont Department of Health received 20 complaints about unsafe and unsanitary conditions at motels in the program, ranging from bedbug-riddled sheets to a lack of heat and hot water for residents. In October, after months of warnings, the health department sanctioned the Colchester Quality Inn for failing to contain a raging bedbug infestation and capped the number of rooms it could rent through the state. During a February visit to Sachdev’s Cortina Inn in Rutland, which has raked in more than $5.6 million in state money over the past eight months, inspectors found pools of raw sewage in two rooms. The inn has been such a frequent destination for the town’s first responders that, in fall 2022, Sachdev agreed to pay the municipality $22,500 a month, plus a one-time sum of $75,000, to defray the cost of emergency services.

In Berlin, town officials struggled for years to get Sachdev to address their concerns about persistent crime and drug use at the Hilltop Inn, one of Sachdev’s highest-grossing properties. After Berlin Police Chief James Pontbriand successfully petitioned DCF late last year to limit the number of rooms the motel could rent to people in the state housing program, Sachdev and his associate, Uday Dholakia, agreed to regular meetings with Pontbriand and Berlin officials, with the goal of reaching an accord that would allow the Hilltop to operate at full capacity.

Earlier this month, after a dramatic decline in 911 calls involving guests at the hotel, the Berlin Selectboard agreed to let Sachdev fill all 80 rooms, up from around 60. During a recent meeting of town officials, Hilltop management, DCF and social service workers, Dholakia attributed this sudden turnaround, in part, to “a beautiful camera right in the front parking lot.”

“Once people are here, we want them to stay here for as long as they’re able to,”

Dholakia said at the meeting. “We provide so many things that other hotels don’t. You are very fortunate to come here.” In exchange for lifting the room cap, Sachdev will pay the town $400 a month, plus $70.75 an hour for every police officer and ambulance worker who responds to the motel.

Pontbriand said he takes no pleasure in accepting money from a private business owner, though he thinks there has been some improvement in Sachdev’s willingness to cooperate with the town.

At the end of last month, the Hilltop took in several guests who “no sooner hit the ground here and started stealing cars and stealing stu from Walmart,” according to Pontbriand. “We had a conversation with them, like, ‘Hopefully, these people aren’t going to stick around long,’ and they removed them from the hotel within 24 hours. And that’s not been my experience dealing with them in the past.” But in Pontbriand’s view, Sachdev’s sudden responsiveness is the result of wanting to increase his monthly billings.

“There’s a real financial incentive for them,” Pontbriand said. “And there’s very little money being put back into that hotel. No one would pay to stay there.” The Hilltop’s overall condition, in his estimation, is “deplorable.”

Just last month, Pontbriand had to confront Sachdev about another issue: The Hilltop management was evicting

“They would just tell us to clean it up and get them in there, because they need that money! They need those vouchers! They need those vouchers! Gotta keep those vouchers up!” When someone left the hotel before the end of the month, Trujillo said, Sachdev simply wouldn’t report it to DCF so he could continue to collect money for the room; at the same time, he’d rent it out to someone else.

Both Trujillo and Ouellette acknowledged that some guests do trash their rooms. But Trujillo feels that the owners use that as an excuse not to put money back into the property, and then they blame tenants for problems caused by their lack of maintenance. When she lived there, Trujillo said, the top floor flooded every time it rained because of a leak in the roof. “There are so many rooms in there that have mold that’s just not gonna go away, no matter how many times you spray it with bleach,” she said.