The Mobile Housing Board (MHB) will lay off its entire Housing Choice Voucher (HCV) staff and replace them with a private firm, Executive Director Michael Pierce confirmed Wednesday evening.
The privatization effort comes after “mountainous challenges” were discovered within the department, which has caused the agency to fail in fulfilling as many as 500 vouchers for local families, Pierce said.
Given MHB’s average resident, a female head of household with two or more children, Pierce said the failure means more than 1,000 Mobilians are unable to obtain vouchers that they otherwise should have. The failure also means the agency is leaving funds from the U.S. Department of Housing and Urban Development (HUD) on the table in the form of administrative fees that paid out with every voucher given.
“We can also be penalized for not fulfilling the vouchers we’re given,” Pierce said. “HUD will redistribute the ones we can’t use. They could reduce it for performing so poorly, which is a problem.”
The issues inside the HCV department, formerly known as Section 8, along with other agency-wide issues, had leadership concerned about its future if a change wasn’t made, Pierce said. More specifically, Pierce said the embattled agency was already facing two regulatory mandates from HUD, including recovery and voluntary compliance related to other issues inside the agency. With the problems from the HCV program on top of that, Pierce said there was a real concern HUD would take over the board.
“We can’t afford sanctions of HCV,” Pierce said. “It would be the death knell for us.”
If HUD put MHB in receivership, Mayor Sandy Stimpson would be required to appoint an entirely new board, Pierce said.
“If that happens every employee is gone and the board is dissolved,” he said. “The mayor would select a new board and HUD would run the day-to-day operations until a new director and staff is hired.”
The problems inside the department follow myriad issues that have plagued MHB before Pierce and many of the current board members took over. Pierce was offered the job after the previous board fired former Director Akinola Popoola for a number of reasons, including his overseeing of a mistake by the former chief financial officer that allowed email scammers to take more than $400,000 in funds from MHB.
The 15 employees impacted by the move can compete for their jobs back with the private firm, Pierce said, once a request for proposals has been completed.
Currently, the board is awaiting responses from private firms to a request for proposal, but the process could take about a month, Pierce said. The change could occur around the first of the year, he said.
“We don’t have a choice,” he said. “We’ve been put into a situation where we don’t have a choice.”
Before Pierce was hired as director, MHB was moving toward a system that would inject more private money into its public housing stock, but the Rental Assistance Demonstration (RAD) process has been put on hold. The RAD process would convert the city’s public housing stock to the HCV program. Obviously, with the issues in HCV, RAD had to be delayed.
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