Preliminary Report to Ann Arbor City Council January 11, 2010

1. Preliminary Report to Ann Arbor City CouncilJanuary 11, 2010 Strategy, Structure, and Staffing Recommendations

2. Project Objectives (Partial List) • Evaluate the future viability and sustainability of the AAHC. • Conduct a comprehensive evaluation of the AAHC operations, including: • Current organizational structure • Operational practices • Customer service practices • Assess the employee staffing model and compensation. • Assess the AAHC operations as compared to HUD regulations and current public housing best practices. • Evaluate the relationship between the City of Ann Arbor and the AAHC to assess the most beneficial relationship for the Commission, including assessing total separation from the City, continuation of the existing City/AAHC relationship, or development of a closer City/AAHC relationship.

3. Assessment Tasks Completed • Staff interviews • Community/stakeholder interviews • Resident focus groups • Financial analyses • Staffing and compensation analyses • Benchmarking • HUD review of preliminary recommendations

4. Mission Ann Arbor Housing Commission (AAHC) seeks to provide desirable housing and related supportive services for low-income individuals and families on a transitional and/or permanent basis. AAHC will partner with housing and service providers to build healthy residential communities and promote an atmosphere of pride and  responsibility.

5. Mission Performance • Desirable housing: Outdated, poorly maintained public housing • Supportive services: Limited and not meeting the current needs of residents • Partnering: Isolated agency with limited involvement in community initiatives

6. Key Findings • The AAHC operates in a state of constant instability • HUD consistently under-funds its programs (~82%) • HUD funding decisions are made late in the operational year leaving little time to adjust spending • Under-funding has led to continual AAHC sub-optimization of operations

7. Key Findings • The AAHC has failed to secure other funding sources (non-HUD) • Unable to provide badly-needed support services to meet growing resident needs • Cannot make up for HUD shortfall • Has deferred important maintenance and modernization of housing stock

8. Key Findings • The AAHC has been organized to address problems and resulting chaos, not to prepare for the future • The AAHC does not have a planning process • The AAHC Board has been focused on operational challenges not future planning and strategy • The AAHC is 10 to 20 years behind benchmark housing commissions in terms of redevelopment and modernization of the public housing stock

9. Key Findings • Public housing lacks facilities management capabilities and the resources to properly maintain its aging housing stock • The current public housing stock can be better maintained but is outdated and inherently sub-standard

10. Key Findings • Section 8 and public housing are independent programs that require dedicated management and focus • The Section 8 program has insufficient oversight (with no direct manager and staff lacking a clear direction)

11. Future Viability and Sustainability of the AAHC • Viability is dependent on modernization of housing stock and strengthening of supportive services • Sustainability is dependent on securing new sources of funding and developing partnerships with developers, service providers, and allied non-profits

12. Relationship to the City • No benefit to separation from City • Complexity of the process makes it highly undesirable • AAHC may not be sustainable as an independent entity • AAHC requires a closer relationship with the City

13. Recommended Strategic Objectives • Rehabilitate and redevelop AAHC properties • Expand funding beyond HUD • Strengthen resident support services • Strengthen management oversight • Improve internal efficiencies and process performance

14. Key Strategies and Actions • Focus the AAHC on rehabilitation and redevelopment of its properties • Hire an Executive Director with development and financing experience • Partner with other affordable housing service providers • Develop alternative funding sources and expand supportive services • Strengthen accounting/financial management

15. Key Strategies and Actions • Strengthen Section 8 • Hire a Section 8 Program Manager • Strengthen management and financial oversight • Improve internal processes • Fully utilize available technology

16. Key Strategies and Actions • Outsource maintenance • Achieve economies of scale • Improve maintenance planning and management • Link to job training and supportive employment programs

17. Outsourcing Maintenance • Build a partnership with an organization with a complimentary mission • Substantially improve facilities management capabilities, improve maintenance services, and reduce unit turn-around time at the same or reduced cost • Establish stringent requirements for responding to RFP • Establish service-level requirements in maintenance contract • Gradual transition • Job training program – if sustainable

18. Maintenance Staffing Recommendations • Temporary positions (2) eliminated upon execution of initial contact with maintenance provider • AFSCME employees absorbed elsewhere in the City as positions become available

19. Compensation Recommendations • Formally adopt 90 percent of market mid-point pay policy • Maintain current AFSCME wage rates

20. Staffing Recommendations • Make Executive Director and Deputy Director positions regular full-time • Executive Director focused on strategic planning, major rehabilitation projects, and redevelopment • Deputy Director focused on operations and grant writing

21. Staffing Recommendations • Elevate Accounting Clerk position to Financial Analyst (Accountant 1) and add second position (one for public housing - one for Section 8) • Existing Finance Manager better able to support Executive Director, Commission, and strategic planning and development

22. Staffing Recommendations • Create Section 8 Program Manager position • Responsible for improving program standardization, compliance, and efficiency • Strengthen financial management of program • Reclassify Section 8 Waitlist Clerk to Program Assistant

23. Staffing Recommendations • Make interim Site Manager positions (2) regular full-time Residency Managers • No longer responsible for direct supervision of maintenance employees • Greater emphasis on resident engagement and the provision of supportive services

24. Staffing Change Timetable • Personnel actions must begin immediately to meet AFSCME and Teamster MOU requirements to eliminate temporary and interim positions by March 31, 2010 • Current interim positions require posting and selection process • Housing Commission to begin Executive Director selection process immediately • Represented positions subject to Union contract posting and selection rules

25. Financial Implications of Staffing Recommendations • Incremental cost of changes: $228,163 • City supplemental funding commitment: $90,000 (FY10 and FY 11) • Unfunded amount: $138,163 (FY10 and FY11)

26. Funding Strategies • Prioritizing new positions and implementing as funds become available • AAHC reserves • Funds held by affiliated non-profits • City in-kind services, such as vehicle maintenance, grounds maintenance, etc. • Maintenance vehicle sale or lease • City of Ann Arbor general fund or reserves

27. Major Issues To Be Resolved • Securing transitional funding for key positions during the implementation period • Maintenance outsourcing transition • Integrating maintenance management technology with outsourced provider • Management and funding cycles for job training and supported employment programs • Securing financing for major rehabilitation and redevelopment in the current economic conditions

28. Needed Support from Council • Clearly define qualifications for future AAHC Commissioners and strengthen selection process • Support AAHC as a City agency and an integral component of broader efforts to assure affordable housing • Provide resources for transition to sustainable operations and strategic redevelopment