Mobile Housing Board (MHB) Executive Director Michael Pierce wants to increase the agency’s occupancy rate, while cutting down on the amount of rent it’s owed in the coming year.
The agency has until June 30 to take full advantage of the occupancy-related subsidy offered by the U.S. Department of Housing and Urban Development (HUD), he said during a work session on the organization’s 2020 budget on Thursday, Nov. 21.
“We’re going to focus on an occupancy rate at or above 90 percent in 2020,” Pierce told board members. “We have to get as many occupants as we can by June 30 to prevent HUD from taking away revenue.”
The HUD mandate to move residents out of R.V. Taylor, Thomas James and Boykin Tower would result in about a 10 percent bump in the overall agency-wide occupancy rate, but staff would have to work hard to make more available apartments ready for families to move into within the next six months in order to meet Pierce’s goal.
“We’re budgeted for an 86 percent to 88 percent occupancy rate, but anything we can do to bump that up is good,” Pierce said.
Revenue will be important as the board is looking at significant loss in its projected budget, Deputy Comptroller Theresa Ray told commissioners. The 2020 proposed agency-wide budget is proposed to suffer a loss of nearly $600,000. This is despite taking in an estimated $45.4 million in revenue, which is $2 million less than the 2019 budget projection. In 2019, the board budgeted a $493,000 loss, but Ray said as of October, the budget is $2.6 million “to the good.”
Ray also told commissioners the agency has $4.3 million in reserves as of the end of last year and HUD requires the equivalent of three to four months of operating expenses set aside as reserve funds.
One of the issues with the budget is the possible revenue left on the table due to poor management within the housing choice voucher (HCV) program. In all, Pierce said the board was unable to fill 500 vouchers due to the department’s issues.
“We’re projected to lose $600,000 over the next 13 months because of underutilization of vouchers,” he told commissioners. “We have 500 vouchers in a vault collecting dust.”
Earlier this year, Pierce announced the employees in that department would be replaced through privatization.
The move will initially cause a dip in the administration fees MHB collects through each voucher it gives out, but that would change once the problems in the department are fixed and becomes a “high-performing” department. If the department is not corrected, Pierce said the board could get into regulatory trouble with HUD.
Included in the budget is a 2.5 percent cost-of-living adjustment for all employees, Pierce said. Even with the raise, salary expenses are expected to drop by 38 percent. This is due, in large part, to the changes within the HCV department, but is also an after effect of a slight trimming down of executive staff.
Pierce told commissioners he has yet to hire a chief financial officer to replace Lori Shackelford, who retired last year. The agency has had issues filling that position, he said, and would look to fill it on an interim basis. Pierce also said the agency will not hire a capital fund development director because of the HUD directive to tear down some of the board’s existing properties. The agency’s new deputy director, Verona Campbell, would start Monday, Pierce announced.
He told commissioners it had been more than a decade since employees had received a raise. However, when MHB Chairman Norman Hill asked about a more substantial pay boost, Pierce said that would depend on whether staff can help achieve some of the agency’s goals in 2020.
“We’ll consider coming back to that if we’re getting close to our goals,” Pierce said. “If we’re getting close … then I would feel comfortable going there. Right now, there hasn’t been enough done to get there.”
Another issue facing the board’s budget comes from properties it owns and maintains but doesn’t see any revenue from. For example, MHB pays expenses at Roger Williams Homes and Josephine Allen Homes, but both are vacant, Taylor said.
There is also a lot of lost revenue due to evictions and unpaid rent, Pierce said. The board is projecting $181,000 in “bad debt,” Schinterria Taylor, an MHB accountant, told commissioners. The bad debt mainly comes in the form of rent that is never collected. Pierce made a comment that rent collection would become more of a priority for housing managers, as it will be tied to performance reviews and possible raises.
Following the meeting, Pierce said the managers and MHB staff needed to work better with residents struggling to make rent payments in order to help them come up with a payment plan. For those where a payment plan won’t work, the board must be more proactive with evictions in order to cut down on the amount of rent owed and never paid.
As for R.V. Taylor, Thomas James and Boykin Tower, Pierce said there are no plans for the property right now.
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