okay. housing authority. sorry barbara. >> it's okay. well, i do wish to thank all of you on behalf of the housing authority and express our appreciation to the board of supervisors and the budget audit. it begins with the hud assessment last year and designating the housing authority as troubled for failing the financial and management indicator scores. ? january hud sent a public housing recovery sustainability team to the housing authority for public assessment and identified many of the problems that the analyst has confirmed. if july of this year hud will begin to provide several months of staffing [inaudible] address

these problems and assist the housing authority in preparation of a comprehensive recovery agreement and action plan that will be executed between the housing authority and hud. the establishment of complete new leadership in february with the appointment of a highly qualified new commissioners by the mayor, the you shall gent need for making critical fundmental changes to achieve better delivery of its affordable housing services was confirmed by the new leadership immediately. the commissioners amended the housing authority's bylaws in february to that meet monthly to increase oversight of operations and improve program delivery and begin to address the housing authority's financial and operational problems. housing authority in february faced an unprecedented

6.9 million dollar operating deficit and 11 million dollars of immediate urgent capital needs for its properties. that's within the 270 million dollars of the overall needs, but these 11 million dollars are the most urgent needs. the housing authority's severe financial difficulties have been improves. as a result of these efforts, the housing authority's deficit has de/skraoesed to a little less than one million dollars at this time, which means the housing authority can operate into the beginning of august of this year. we've accomplished this through elimination of some positions, mostly management. reduction of overtime for non emergency

work, increased recycling composting and modification of trash collection moat odds, realignment of service hours, labor concessions and relief payments for the police department, dpw and puc. a critical remaining come /poe innocent of these labor negotiations that were part of the reduction in cost are the requirement for over a million dollars that hud is holding back from the housing authority is the maintenance mechanic position that the budget analyst mentioned. this will enable the housing authority to provide much better services to its residents by having individuals at the properties that can provide repairs for routine plumbing, electrical,

carpentry, painting, flooring and other repairs, improvements that are really important to the residents. we're aware there is an enormous amount of work to be done to right this ship. and as we work toward better serving our residents and the city, we welcome continued collaboration and assistance we've been receiving from the mayor, the board of supervisors, community organizations and the residents. the commission and i are committed to reforming the housing authority for the city. it is a strong operationally sound agency that improves the quality of life and safety for our residents. i'd like to briefly summarize where we are with the recommendations. i'll try to be brief because i want to let the residents have an opportunity to talk also. of the 43 recommendations, we'

actually either completed or have underway 23 of those actions. for oversight, we created the personnel and finance committees and diversity committees and has been holding monthly meetings, improve program delivery by requiring presentation of detailed reports by sfha's staff on the /tpoeu than /-rbl condition, operations and compliance with hud performance measures. we are preparing to relocate meetings to city hall for public participation as soon as sfgovtv videotaping is available at hours that are con convenient to our residents.

the times available now are 8:00 am and 6:00 pm which are not the most convenient times for our residentses. and also some funds, this will be additional cost to the housing authority but it's very important for us to provide that to everyone to view our meetings. in may, our finance committee instructed the director to arrange for staff training and employee appraisal process that will be monitored monthly. this training will begin /torpbl. it's much needed so all of our staff become high performers. on the public houseing financial commission we are preparing a disposition application to sell

the 44 turk commercial property. we're looking to market this. the commission intends to use these funds for primarily one time uses and to address our capital needs. asset management -- the commission and personnel and finance committee receive monthly budget variance reports that include material negative variances and corrective actions to correct those. asset management fees are no longer charged to properties. tenant rent collection has increased and this has been confirmed by hud. the remaining item for asset management compliance is establishment of a maintenance mechanic position. the housing

authority has contracts for preventive maintenance for alarm system equipment. we're also developing a preventive maintenance plan for pest control and mold and mildew abatement. we're developing a comprehensive maintenance plan that will include main /tphapbs that maintenance that the the staff at the housing authority can perform. that should reduce maintenance costs. a description has been drafted, training for existing staff has been developed and implementation will begin as soon as we have reached agreement with the unions. under the direction of the commission, the executive director is developing a

preliminary training plan that identifies the appropriate number and type of these maintenance positions at each property, again, to provide quick response to residents for repairs. this will incorporate the costs into the budget. in april if commission lowered the threshold from 100 thousand dollars to 30 thousand dollars. the approval threshold is already part of the procurement policy that may only be amended by commission resolutions. it was amended immediately after the commission action. the commission has directed the director to report on the amoresco contract, which was completed in february of this year. the first reports will

be available on a quarterly basis, following this february completion of implementation. at that time, if any adjustments need to be made to that contract through baseline because we do have increased occupancy at the housing authority that affect that contract -- of more favable and city and or lifeline rates in /aeu addition to [inaudible] by 30 percent from 233 thousand dollars a month down to 165 thousand dollars a month. the housing authority has reinstated centralized procurement and annual planning and documentation of contract

administration is underway. guidelines for their use and training for procurement use and training is also underway. we engaged the housing authority's former director of procurement who retired five years ago to assist with this transition while we're waiting for hud assistance. this began in may with an updated policy and procedures manual, accountable and responsibility to staff administering contracts. of in consultation with hud [inaudible] requirements all procurement monitoring of contract administration is being recentralized. property management and maintenance -- in this area the acting director is ensuring that the director of may not takes immediate steps to improve

maintenance operations to address the work order backlog and meet maintenance timeliness. hoe's working with the it department for implementation of a new work order system. work is dispatched through i pads to foremen throughout the day. the foreman knows where the craft workers are and is able to most efficiently dispatch them. the workers are also able to close out work on their i pads and trigger and automatic email to the property manager so they're aware of the status of work orders at their sites. work order come /phroegs times are being accelerated, but there's a ways to go. we still have a lot of outstanding work orders. since january we've completed about 15 thousand work orders, but

almost 3000 work orders are still outstanding. maintenance mechanic work /-rs will greatly improve or ability to address work orders since they'll be able to perform a broad range of repairs right at the properties. there is a resolution pending before the commission today to reinstate maintenance chargers. we expect that will be approved today. rent payments are due on the 1st of the month and are late after the 5th. the housing authority has not been diligent in communicating with residents about their late rent payments and also providing them with information on resources that are available to them that might help with financial management and any particular problems they're

having in getting their rent obligations. a 14 day notice are being now automatically generated from the housing authority's computer system on the sixth of the month. we're working out some bugs with that, but generally that's true. and the property managers distribute those notices directly to the tenants. the housing authority is reinstituting a late fee if rent payments are not paid by the 15th of the month. this action is also pending before the commission today. since april the acting ed have been meeting monthly with the property managers to discuss property management responsibilities, including challenges and practices for lease enforcement and rent

collection. in addition, in february, all property managers were required to attend three day property management certification training that was hosted at the housing authority. and it was a certification training and included all aspects of property management, including rent collection. the commission requires monthly reports on rent collections. there has been some recent progress in rent collections, but there's still ways to go. the maintenance on occupancy in vacant units -- we will continue to seek ways to [inaudible] have been reduced from an average of 19 thousand to 14 thousand per family unit, a 22 percent reduction. and to 7 thousand for senior apartments. for the past year, schedules for completion of vacant units have been

prepared, updated and sent weekly to the property managers and to the eligibility department for referral. the standard for turning over routine units is 30 days as mentioned in the budget analyst report, however many of our units require substantial rehabilitation. they're older units. if they've been occupied for a long time, many of the elements needs to be replaced or if they've had heavy use and wear and tear they require rehab. hud allows 18 months for completion of those units and a lot of the units that we currently have vacant are in that category and they require additional funding. for about six months the housing authority did not have funding to address the rehab of the larger vacant units. we were able to convince hud to let us have 1.5 million dollars to rehab vacant

units and get them back on line and the mayor contributed 600 thousand dollars through the mayor's office. those units are about one-third complete now. discussions are underway with the police department, not to terminate the mou with the police department, but to continue a relationship and an agreement so that services under the agreement for safety of our residents and surrounding communities can continue, but we ask the city to provide the funding for those services. nine of the actions, in addition to those that are completed or underway, must be coordinated with hud's technical assistance that's going to begin in july and the hud required recovery agreement and action plan due to its troubled /tkez /tphaegs. /hudz is providing technical assistance in finance to reorganize the staffing

department, train on the budget process, operating audit and reconciliation of financial records. this will begin in july. hud is also providing technical assistance in procurement, wait list and admissions management, housing choice voucher operations, administrative plan, the public housing admissions and continuing occupancy /prapb and the annual phap planning process. on government oversight, the comprehensive [inaudible] technical assistance taking into consideration the board of -- budget analysts recommendations along with ongoing hud assessment and the recovery agreement and action plan and the mayor's july 2013 reenvisioning plan. key vacant

positions will be filled shortly after then to ensure all senior staff are in permanent positions. the finance functions will be reorganized. chief financial officer will be hired with the same coordination of the major oversight agencies. a budget manager will be hired and the commission, in -- will direct the executive director to develop a five year financial plan subject to commission approval. this /pwhrapb will be updated annually to address the housing authority's pension

and retiree health liabilities. as part of reorganizing the finance department in con /skwr*ubgs with designation of a budget manager position, they will be assigned the responsibility for training and working with the property managers so they are able to manage their budgets, stay within their budget, plan for their budgets and maintain cost controls. the section eight housing choice voucher operations, again, will be provided with technical assistance from hud and all of the budget analysts recommendations will be impolicemened implemented at that time. there are actions that require [inaudible]

maintenance mechanic position that will be able to perform broad range of repairs at each property. as soon as the specialized craft workers have been amended to allow work to be performed by the maintenance mechanic position will be implemented and hud will provide an estimated 1.5 million dollars annually. this is expected to reduce property manage cost, and provide much more responsive services to the residents. repair of vacant units will also be greatly accelerated, particularly in the senior developments where a maintenance mechanic can perform almost all of the work required. i'd like to now let our commission president, mr. torres, say a few words about our actions. thank you supervisors.

>> good morning supervisors. thank you so much for calling this hearing and for allowing all of us to have an opportunity to comment on the serious issues we're facing. i want to thank all of your personally for your support, your concern and the level of engagement your office and staff have been providing around the issues we're facing. we're very appreciative of your efforts and for all the residents we serve. i've been happy to meet with many of them across the city. i hear from them directly about their concerns and needs and the hopes that we can best meet them now and in the future. i wan to thank mr. rose and his team for working so openly with us to get us to this place and thank barbara for her review

and plans and the need and belief that we all share that true reform is needed at the authority. i want to thank a few moments briefly to highlight, again, the very pressing financial matter raised earlier by miss smith that we are pursuing to ensure we enter into a corrective action plan by july 1. it will ensure that we are complying with federal guidelines to meet criteria and increase vital funding to meet our serious financial needs now and in the future. you'll hear shortly from mr. arnold, a /kphaeur of the commission's finance and personnel committee that we recently established as one of the first actions. he can describe in a bit more detail the severity of the financial crisis we find ourselves in.

our need to establish this maintenance mechanic will provide project based rather than centralized maintenance services. this will provide better mechanicment and service delivery to address maintenance need. they have determined that significant progress has been made towards compliance with stop loss criteria with except of this position, which provides site based maintenance and repairs in the best interest of the residents who call them home. i'm proud to say that as of today we have ratified agreements with three labor union. that represents 90 percent of the labor force that serves the san francisco housing authority. and we want

to recognize and thank the cities and the laborers negotiating teams for finding ways to meet or financial needs. these are concessions that both or labor participant /tphers, teams and our residents can be proud of. that leaves ten percent. ten percent of our labor force remains to allow the housing authority to be fully asset management compliant as defined by hud and trigger the release of funding by hud, 1.5 million dollars. as you hear from phil he'll talk about those dollars needed by the end of this year. we look forward to working towards our goals, to establish this maintenance mechanic at each of our housing authority properties to get us there. it will be a larger step for a better managed and efficiently

run housing authority. again, thank you very much for your partnership, support, as we move forward with a very difficult situation. to follow up on the financial details, phil arnold will come up. thank you. >> good morning. i'm phil arnold, one of the new commissioners of the housing authority and chair of the financing personnel committee. when we were appointed if february we knew that the housing authority was a troubled /aeu yen /seu, but we didn't know how troubled. we found very shortly that there was a 7 million dollar current year deficit we were facing. we also found that if nothing was done we'd be out of cash in may, being we couldn't pay our bills, we couldn't pay our employees, we could not pay or

debts, as we have debt service for outstanding bonds as well. so we've taken action since that time. immediately barbara smith, our acting director laid off 12 administrative staff. that was done in march. that will safe save about one million dollars. we stopped paying the police department for extra police services, even though the police department is continuing to provide those services. this is one of mr. rose's recommendations and we endorse it. we have stopped paying dpw for extra maintenance services, even though they are continuing to provide them, another rose recommendation which we endorse. we reevaluated our [inaudible] pick ups and are saving 65 thousand dollars a month on our scavenger bill.

this is just a push into the future so it's still a liable on our books but helps our cash /tpwhroe. we've been negotiating with our unions concession agreements because we need assistance from our work force. to date, the unions have given back [inaudible]. those items together total 6 million dollars. we have a 7 million dollar problem. what's the last piece? the last piece is the hud money outstanding premised on us established a maintenance mechanic position. it's that vital that we do this and it's being held up because we don't have agreement from our craft ewe you knows to be

able to establish this position. if we do this, we can build a budget that's balanced, we can start rehabbing our units. if we don't call out of this serious deficit this year, we'll be broke. >> thank you for that sobering reality check. supervisor campos is going to take over the rest of the hearing. he's going to be managing the public comment so sir, i assume you're... >> yes. >> public comment is now open. >> thank you. so i have a number of speaker cards that i'm going to read and i will ask folks if you can /haoeupb up by the aisle on your left, our right. and you each have two minutes to speak. again,

we want to thank all of you forcoming out. bob, phillip, antonio, dell, richard may, joe, jessica, victoria, daniel, ace on the case, gail hampton, joyce armstrong and we'll call a few more names. if you can start lining up. i want to thank hillary from my office who's worked very hard to put this hearing together and i want to acknowledge /tkaoe from the housing authority partnership of the mayor. >> i'm bob. i came to talk about problems with staff responsiveness on section eight because this goes to the credibility of the agency and especially because it involves