In March, interim Executive Director Robert DiVincent issued a dour report to the Newark Branch of the U.S. Department of Housing and Urban Development (HUD) that alleges the Hoboken Housing Authority (HHA) is currently operating with a $3.6 million deficit and overspent its budget by millions of dollars.
Since taking helm only a few months ago, DiVincent, his staff, and the seven-member Board of Commissioners have been busy developing a corrective action plan to get the authority back on its feet.
"Right now we are looking towards the future and are taking the steps necessary to ensure that this housing authority will be on solid financial ground," said DiVincent Tuesday. The HHA oversees the city's approximately 1,383 federally subsidized units of low-income housing, primarily in the southwest part of the city. The HHA answers to HUD and is not city-run, but the City Council, mayor and state appoint the seven unpaid commissioners to the housing board. The board hires a paid executive director, who oversees the day-to-day operations of the HHA.
The executive director who recently left the authority, E. Troy Washington, was hired and subsequently fired by the Jersey City Housing Authority. Washington has retained legal counsel to be reinstated there. He is also in law school, and the JCHA had been paying his tuition as per their contract with him.
According to DiVincent, the first step toward getting the corrective action plan approved was to develop a preliminary conceptual plan, which was recently taken to HUD. The federal agency has given its initial thumbs-up to fully develop that recovery plan.
Even though it's still in development, part the recovery plan is to apply to take part in a bond leveraging program. In that program, a number of authorities from around the state go out to bond and then split the cost of the loan. Hoboken is expected to receive $8.5 million, if approved by HUD, said DiVincent. The majority of the $8.5 million would go toward capital improvements and needed maintenance. He added that the HHA's administration is currently undertaking a physical needs assessment to rank and prioritize what work needs to be done to the buildings and grounds of the housing authority.
The bond can be secured by using 30 percent of its 2004 capital improvement funds, which is around $2 million annually.
One benefit of participating in the bond leveraging program would be that the HHA could use a significant portion of the remaining capital funds for management and administrative expenses. HUD policy currently only allows housing authorities to use 30 percent of their capital funds for administrative and management costs. But because the HHA hopes to secure $8.5 million in bonds for improvements, the authority will request to use a greater percentage of their capital fund to offset its large deficit.
One cost saving measure that has already been undertaken is layoffs. According to DiVincent, 47 employees have left the authority or have been laid off since January. Of those employees, there are 14 former employees that followed Troy Washington to Jersey City. The employees who followed him there were suspended from that authority. The balance is made up of retirements and laundry room attendants and maintenance workers that have been let go, said DiVincent.
He added that last year alone, the HHA overspent it salary line by between $600,000 and $800,000. "These layoffs bring us closer to being on budget and put us on the road to recovery," said DiVincent. He added that he does not anticipate anymore layoffs in the immediate future. But he said that until the final recovery plan is approved and the HHA receives its final 2003 financial audit, it is impossible to predict if additional lay-offs will be necessary at some point.
Normally, the local housing authority is in charge of producing and approving its own budget, but a recent assessment report from the Public Housing Assessment System of HUD has designated the HHA a substandard financial authority. Out of 100 points, Hoboken scored a 62, with 60 being the cut-off for a troubled agency.
While 62 is passing, the less-than-stellar score means the HHA is subject to additional HUD oversight and has to complete a corrective action plan.
HDP takes over security
In other housing authority matters, the new the board has terminated its contract with Internal Security, a Newark firm. According to DiVincent's report to HUD, the firm exceeded its $1.2 million contract without requesting any change orders to the board, and had been paid 60 percent more than that, which totals around $900,000 in over-expenditures.
The board has retained Internal Security in a reduced capacity to place three guards at each of the senior buildings during the evening, for approximately $2,000 per week until a new bid document for security at the senior buildings can be written.
The bulk of security, said DiVincent, will be provided by the Hoboken Police Department, which was awarded a new contract at an annual cost to the Housing Authority of $540,000.The contract will pay for the officers to operate out of the satellite precinct, which is located inside the projects.
Commissioners up In other news, two commissioners' seats are up for renewal, one now and one within the next month: Those of Perry Belfiore and Arlette Braxton. Belfiore said he does not think he will be renewed as the governor's designee. However, rumors suggested that he might be placed back in later.