Agency tries to avoid layoffs through buyout program
Faced with Congressional funding cuts, the Philadelphia Housing Authority has to cut 100 jobs under a new $386.3 million budget approved Friday.
PHA is faced with a $24.5 million cut from Congressional cuts to the Department of Housing and Urban Development’s budget. The federal government provides 93 percent of PHA’s funding. In addition to cuts to the agency’s capital and operating funds, the federal government has cut Housing Choice Voucher fees by 24 percent.
An agency official said he hoped layoffs could be avoided through a buyout program PHA will roll out over the next several months.
“We want to stay away from the issue of layoffs,” said Elias Rosario, deputy director of finance. “We hope [the buyout] would be a successful program. If it isn’t then … [we] would have to go back and revisit the budget to determine some of the other options we would have to undertake.”
Commissioner Karen Newton Cole, who recently replaced former commissioner Estelle Richman, approved the fiscal 2013 budget with the condition that if too few employees agreed to take part in the buyout, officials would be required to submit a new spending plan.
If not enough employees take early retirement through the buyout, layoffs seem likely.
Already, the agency has taken steps to deal with the $24.5 million cut in funding, reducing its deficit to $10.2 million by “strategically tightening operational spending,” Rosario said.
To close the remaining gap, it will do two things.
First, the PHA will restructure its bond debt, taking advantage of lower interest rates to save $5.77 million next year.
The remaining $4.51 million will come through cuts to the agency’s 1,400 member staff.
A snapshot of the agency’s finances showed that officials expect total revenue to be $376 million in fiscal 2013. That was down from $400.5 million in 2012.
Operating expenses for 2013 were listed at $338 million, up about $800,000 from 2012.
Rosario pointed out that administrative salaries dipped from a total of $38 million in last year’s budget to $34 million in the 2013 budget. Spending for utilities dipped too. According Rosario’s numbers, spending dropped from about $31 million to $28 million largely because the agency has been aggressively pursuing solar energy and other energy reduction strategies.
Looking ahead, Rosario said PHA hopes to further cut expenses by beefing up its legal staff. That will allow the agency to reduce its reliance on outside law firms, a practice that has drawn a great deal of scrutiny — including charges of unethical activity by former board president John F. Street after the law firm that employed his son, Sharif, contracted with the PHA.
Rosario also said the agency will add in internal audit and oversight department in an effort to save money with outside auditors.
Friday’s budget briefing was only second time the board held a public briefing of a PHA budget. The first occurred last year under Richman. Before the federal takeover last year the agency kept its finances veiled.
In other agency news, Administrative Receiver Michael Kelly said new rules governing public comment at PHA meetings would be released at the board’s Jan. 26 meeting.
Finally, Kelly also reported, that the agency exceeded its minority participation goals last year.
PHA has a goal of 20 percent minority participation and 10 women participation. Last year, according to Kelly, 30 percent of contracts went to minority owned businesses and 19 percent to women-owned businesses. He said he would release a more detailed report in the near future.