Although federal officials rated the San Francisco Housing Authority as “troubled” when former Executive Director Henry Alvarez exited his post, the agency actually improved during his last year on the job and might have received a passing grade if not for steep federal budget cuts.
In late 2012, the Housing Authority was one of two California public housing agencies to get a flunking grade from the federal Department of Housing and Urban Development. HUD officials declared the quasi-federal Housing Authority — which is under local control but relies on the federal government for all its funding — troubled thanks to a score of 54 out of 100 based on the state of its finances, management and housing stock in the prior fiscal year.
But the authority’s physical, financial and management scores improved to 59 the following year, one point shy of getting off of the troubled list, according to an April 15 letter from HUD. The agency’s low 94.5 percent occupancy rate kept its score below 60, the threshold for the failing grade.
“It is a slight improvement,” said Gene Gibson, a regional spokeswoman for HUD, who said a final 2012 score will be posted by December. “But it’s going to be some time before we see major improvement because they have so far to go.”
Yet federal budget cuts clearly contributed to the authority’s latest failing grade. In 1991, the agency needed $143 million to make necessary capital improvements, but received only $23 million from the federal government. In 2012, needs ballooned to $270 million while federal funding shrunk to $10 million, authority spokeswoman Rose
“Jesus, Peter, Paul, Buddha or Confucius would not have been able to do anything with the agency with those kind of roadblocks,” said the Rev. Amos Brown, who served as the president of the Housing Authority commission until February.
In February, Mayor Ed Lee secured the resignation of Brown and all but one of the citizen commissioners and replaced them with city employees. This city employee commission voted to remove Alvarez — who is being sued by current and former employees alleging a bullying management style, and is under investigation for allegedly steering contracts to politically connected vendors — on April 9.
Lee has made improving the Housing Authority a priority. The mayor — who in 2007 was part of the team that hired Alvarez, who earned $210,500 annually — is working with HUD to revamp or perhaps entirely replace the agency, which has long suffered for lack of federal funding.
A March 20 letter from HUD identified a do-nothing commission and a “lack of leadership” at the agency as key flaws.
“Seeing scores move in the right direction is an important first step,” said mayoral spokeswoman Christine Falvey, who noted that the agency’s new leadership still needs to make serious changes before the authority can “permanently get off the treadmill of troubled lists.”
In the long term, the aged former military housing structures in Potrero Hill and Visitacion Valley that serve as The City’s public housing — and have been deemed “severely distressed” by the federal government — need to be replaced. But there are more immediate needs, like the 15 elevators in senior and disabled housing across The City that need replacing, Dennis said.
Interim Director Barbara Smith is “doing everything she can to continue the ascent,” Dennis said.
The Housing Authority may seek relief from its electric bills and the cost of extra police patrols and cleanup crews — or it may be forced to do without those city services for the next six months.
The agency — which received $45 million in funding this year for $48.9 million in needs — is on track to run out of cash next month. This is in large part due to sequestration, the automatic federal budget cuts that went into effect March 1, cutting another $3.1 million away, according to agency spokeswoman Rose Dennis.
In order to stave off bankruptcy, the authority is examining ways to cut costs. The agency may ask the Police Department, Department of Public Works and San Francisco Public Utilities Commission to forgive or absorb some of the $5.936 million that those three agencies recover from the agency annually, according to documents presented to the Housing Authority Commission last week.
The Police Department is paid $1.225 million to post extra patrols to certain problem sites, and Public Works is paid $184,000 quarterly to do weekend maintenance work. The authority also pays $335,000 a month for electricity produced by the city-operated O’Shaughnessy Dam at Hetch Hetchy Reservoir.
Talks about forgiving or delaying the collection of those bills are ongoing, officials said, but no agreement is yet in place.
“To the extent we can be helpful to a sister city agency and The City’s neediest populations, we want to continue these conversations as they work through their financial issues,” said Tyrone Jue, a spokesman for the SFPUC.
A spokeswoman for Public Works said that department had no budget to provide services free of charge.