Housing Authority expects 'troubled' status to improve

Housing Authority expects 'troubled' status to improve

May 29th, 2011 by Yolanda Putman in News

Chattanooga Housing Authority officials say they could be off HUD's list of troubled public housing agencies by the end of this year.

"We're on our way up," Executive Director Betsy McCright said.

The housing authority plans to submit its audited financial report to the U.S. Department of Housing and Urban Development in June. If HUD accepts it, CHA officials say they could be off the troubled list.

"We're hoping. We're hoping," board Chairman Eddie Holmes said.

Of the country's 3,300 housing agencies, CHA is among 149 listed as troubled. Getting off the list will mean the housing agency is better positioned to receive federal grant funding, Holmes said.

PAST MISSTEPS

CHA got on the troubled list in 2009 after a $4.5 million budget shortfall led to one-third of its staff being laid off. Part of the shortfall was due to CHA mismanaging funds for its Housing Choice Voucher and Low Income Public Housing programs.

The agency also mismanaged a $3.6 million Fannie Mae loan intended to help build affordable downtown condos. Former CHA administrators used the money to pay employee bonuses, salaries and daily operating expenses.

HUD uses what it calls its Public Housing Assessment System to determine which agencies are on the list and which aren't, McCright said.

Out of a total of 30 points, HUD requires agencies to score a minimum of 18, McCright said. CHA scored 10 in 2009, but that was an improvement from 2008 when it scored 7.

This year, the agency is expected to score 24 of 30. The scores are expected to be released in late June to mid-July, CHA officials said.

CHA officials anticipate the higher score after the agency paid back the $1.4 million taken from its Housing Choice Voucher and Low Income Public Housing programs and reached a settlement with Fannie Mae, McCright said.

And because CHA has submitted an application for the demolition or sale of its Harriet Tubman complex, the agency should also score better in the time it takes to get vacant units ready for occupancy.

The turnaround time affects the overall Public Housing Assessment System score, said Holmes.

Because some Tubman units remained vacant for more than a year, CHA has scored poorly in this area in the past. But if HUD approves the demolition or sale of the site, the long-standing vacant units will not be counted against the agency, Holmes said.

Because the agency has made progress toward recovery, HUD in February stopped requiring CHA to submit monthly reports of its financial activity. Now the agency submits reports quarterly.

However, the quarterly requirement is still a function of CHA being designated as a substandard financial performer. Reviews are usually once a year for standard- and high-performing agencies, said CHA spokeswoman Cheryl Marsh.