The City's long-troubled Housing Authority turned a fiscal corner this summer, yet it could slide back into familiar territory at the end of the month when another round of federal sequestration might hit.
And whether or not Washington replenishes the public housing provider with badly needed cash – in some areas, the agency receives less than half the money that it received in 1991 – the Housing Authority is on notice to improve or risk serious consequences, according to a 22-page long improvement agreement with federal authorities approved last week.
Bad finances, poor management and a low occupancy rate in crumbling housing units conspired to land the Housing Authority on the federal Department of Housing and Urban Development's list of the state's very-worst public housing providers.
That – along with lawsuits filed against then-Director Henry Alvarez – prompted Mayor Ed Lee to clean house. The mayor replaced the agency's Board of Commissioners with city employees and longtime agency employee Barbara Smith took over for Alvarez, a former director of housing in Houston.
Since then, the authority has trimmed staff and received some relief from its bills from other city departments to cut costs. And in a move to increase revenue, it has been imposing late fees and repair bills on the tenants in its 6,259 units, nearly half of whom were delinquent on rent earlier this year.
And along with already hiring basic maintenance workers, the agency is bringing on a chief financial officer and making regular updates on finances – including procurement – to the Board of Commissioners.
These were moves the agency had not made for years, and also were required under the recovery agreement signed with HUD.
This all helped reduce the authority's deficit to $1.1 million as of August. But it still owes The City's Public Utilities Commission $1.8 million for electricity and water services, a debt that the agency must pay back – with 5 percent interest – over the next fiscal year.
Ongoing problems with finances might remain. The agency has a low vacancy rate despite a years-long waiting list and 279 vacant units because the units aren't fit for habitation – and the money available to fix them up is being spent elsewhere.
About half the authority's $10 million capital budget is being spent on day-to-day costs, and that budget is expected to be slashed again Oct. 1 when the federal fiscal year begins, Smith said at a recent commission meeting.
Right now, the Housing Authority is planning to have a $206 million budget, down 2 percent from its current spending plan. It could be less, depending on what Congress does, but either way the authority must succeed or possibly be dissolved or put into federal receivership.
“We have to be successful,” spokeswoman Rose Dennis said. “That's the bottom line.”