The Little Rock Public Housing Authority expects to turn a profit in 2022 after its board of directors approved the cut of several jobs as part of next year’s budget.
The restructuring of the staff of the Metropolitan Housing Alliance “aspires to meet the fiscal, regulatory, personnel and operational needs necessary to advance the agency’s mission,” according to a resolution the Board of Commissioners approved at a special meeting Wednesday, authorizing Acting Executive Director Ericka Benedicto to oversee and implement staff changes.
The agency began looking for ways to restructure its staff in 2020 but did not follow through, Commissioner Leta Anthony said at a board meeting in October. He has finally reached “the point where doing nothing is not an option” to save money and find new income, Anthony said.
“[We should] Take a serious look at how the agency is run, “she said.” I’m really worried that we don’t have any vision for new revenue streams. “
The October meeting was not the first time that board members or agency staff have said the housing authority needs new income to remain financially stable. However, the agency’s 2022 budget does not foresee any new income.
Chairman of the Board, Kenyon Lowe, said in an interview on Tuesday that new sources of income must come from the development of vacant properties and that “that requires some innovation”.
The agency restructuring also includes the addition of compliance officers, two individuals appointed by the board of directors to oversee Housing Authority staff members and properties “on our behalf and on behalf of the Rules. and regulations we demand, ”Anthony told the Dec. 16 meeting.
The positions cut in Budget 2022 are the Assistant Director, Sunset Terrace Property Manager, and approximately seven positions in the Section 8 Housing Choice Vouchers department.
Several jobs in the Section 8 department have been cut through attrition instead of laying off employees, Lowe said.
The Metropolitan Housing Alliance oversees approximately 900 traditional public housing, 200 affordable housing, and 160 market-priced housing. It also administers over 2,000 Section 8 vouchers. It is Arkansas’ largest public housing authority and provides housing assistance to approximately 8,000 low-income people.
Andy Delaney, the former chief financial officer of the housing authority, told the council of commissioners at a special meeting on June 3 that the agency would need to make significant budget changes to maintain financial solvency.
Delaney’s suggestions included limiting spending to “absolutely necessary” purchases, training property managers on the budgeting process, and reallocating some executive salaries and benefits to “various program budgets”. He also suggested asking the Deputy Director to approve all purchases beforehand.
The new structure of the agency does not include the post of Deputy Director. Lowe said in an interview that the position is no longer needed based on the housing authority’s needs assessments. The agency had not done a thorough assessment since 2012, he said.
“Organizational assessments are done to see where your strengths, weaknesses, opportunities and threats lie, inside and outside the organization,” he said.
The assessment found there were more employees than there were jobs, Lowe said.
The most significant budget cuts in 2022 concern the administrative costs of the central office of the housing authority and the service of housing choice vouchers in section 8.
The central office operated with a loss of nearly $ 73,000 in 2021, according to budget documents, but is expected to make a profit of more than $ 26,000 in 2022 despite an expected drop in revenue of $ 314,700.
With fewer positions, the agency will spend nearly $ 34,000 less on central office salaries, according to budget documents. Benefits costs for central office employees will drop by nearly $ 2,800, and staff training and travel will be cut in half from $ 20,000 to $ 10,000.
The Section 8 department generates the majority of the housing authority’s revenue, with $ 437,751 in net revenue this year and a projection of $ 413,607 in 2022. Most of the nearly $ 160,000 decrease in Administrative costs will come from the decrease of $ 111,781 in employee salaries due to the positions being cut. .
There were 21 positions in the Section 8 department, in addition to the director and deputy director, in 2019, but there will only be six or seven in 2022, Lowe said.
Meanwhile, the operating budgets of Sunset Terrace, Stephens Apartments and Central High Apartments have not been changed for 2022. Sunset Terrace will continue to operate with a loss of over $ 85,000, and Stephens and Central will continue to operate with a loss of just under $ 93,000. .
Lowe said the Housing Authority is not taking advantage of these properties while they complete the Rental Assistance Demonstration, a federally run program that converts public housing units into voucher units of choice from housing so that housing authorities can obtain private capital for maintenance and renovations. He and other state housing officials have previously told the Arkansas Democrat-Gazette that the housing assistance demonstration can create financial shortfalls for housing agencies.
The Sunset Terrace property manager position is not included in the 2022 budget as Gorman and Co. Inc., a Wisconsin-based development and investment company, will assume full management control of the property in 2022, has Lowe said. The housing authority retains ownership of the land after a rental assistance demonstration conversion while a private company owns and manages the buildings.
“IT SEEMS ONLY NATURAL”
The agency has not had compliance officers since 2013, when those positions were no longer funded to balance the budget, Lowe said.
The current board has revived the position “to make sure that the developers as well as us at MHA follow the same rules and guidelines,” he said.
Lowe said compliance officials will oversee the Section 8 housing choice voucher service and rental assistance demonstration efforts at several properties managed by the agency.
The Metropolitan Housing Alliance converted five properties under the Rental Assistance Demonstration Program and hired a Texas-based development company, ITEX, to convert three more. The agency dropped ITEX and sued for breach of contract earlier this year. Anthony said in October that the dispute put the rental aid demonstration agreements on hold at a standstill.
At a special board meeting on Tuesday, Gorman became the new rental assistance demonstration partner at properties managed by ITEX. Gorman already owns and operates the Fred W. Parris, Cumberland and Jesse Powell towers, three successful rental aid demonstration conversions in Little Rock.
Lowe said the fallout with ITEX was a major reason to relaunch the Compliance Officer position.
Compliance officers will not be responsible for overseeing the executive director, Lowe said, and the reinstatement of the post “had nothing to do with” the turnover of executive directors that the housing authority has experienced over the past three years. last years. The agency has six official directors, interim or interim since November 2018.
Anthony first mentioned the upcoming addition of a compliance officer at the November 18 board meeting. She said commissioners have a fiduciary responsibility to keep the agency afloat and approve a balanced budget.
The executive director of the Metropolitan Housing Alliance has hired compliance officers in recent years, but the board will be responsible for hiring them in the future, Lowe said, as shown in the org chart outlining the new. agency structure, provided to the Arkansas Democrat-Gazette with the 2022 budget.
“In our assessment and review, we found some things that need to be reinforced,” Lowe said. “Since the board is responsible for policy and compliance, it seems natural that [compliance managers] be under the direction of the board.
According to documents from the US Department of Housing and Urban Development, the “primary relationship” of a local housing board is with the executive director. The board hires and fires the director, while the director hires and fires all other agency employees.
“The board charges the executive director with managing the day-to-day operations of the agency and the executive director is the only employee the board is authorized to lead,” according to a financial management training module drafted by the federal housing ministry.
When asked if the board of directors of the Metropolitan Housing Alliance defies federal rules, Lowe said he believes the board’s “roles and responsibilities” include hiring “positions that best match agency “and that he did not believe that the rules of the Federal Ministry of Housing indicated otherwise.
He gave the example of the board of directors hiring a construction manager to report on the progress of the rental assistance demo conversions that have since been completed.
“The board is responsible for oversight, and we are not going to let that responsibility go unnoticed,” he said.
A spokesperson for the United States housing and urban development said Friday that the department “does not provide specific instructions” on the extent and limits of the governance capacity of a board of directors of the housing, adding that national and local laws are the applicable regulations in this case.
Arkansas law permits housing authorities “to enter into and perform contracts and other instruments necessary or convenient in the exercise of the powers of authority.”
The Metropolitan Housing Alliance will post advertisements for compliance officer positions for about two weeks, starting this week in December, Lowe said.