HUD accuses Kyle Housing Authority of tenant deprivation, financial irresponsibility

In a letter made public during last night’s city council meeting, the regional office of the federal Department of Housing and Urban Development accused the quasi-governmental Kyle Housing Authority of depriving tenants of such items as a workable refrigerator, spending funds without required approvals and not keeping records of how those monies were spent.

HUD said the authority’s executive director basically tripled her own salary, without any outside approvals, while at the same time leaving housing units without operable refrigerators and stoves for years.

Although the letter did not blame anyone by name for these wrongdoings, HUD said the authority operated without a required governing board and that the only two persons HUD could find with any responsibility for actions within the authority were its executive director, Vickie Simpson, and an unnamed maintenance person.

David Pohler, the director of HUD’s regional office in San Antonio, signed the letter which was addressed to Simpson with copies to Kyle Mayor Todd Webster and the city’s chief of staff, Jerry Hendrix. It was Mayor Webster who revealed the contents of the letter during last night’s council meeting. The charges leveled were based on an personal inspections in 2013 and 2105 as well as local interviews conducted by HUD employee Dan Garcia in March.

After receiving his copy of the Pohler letter and making initial inquiries as to its contents, Mayor Webster also said he received a letter of resignation Friday from Simpson. Technically, an executive director’s letter of resignation should be submitted to the association’s board of directors, but in Kyle’s case, such a board doesn’t exist any longer. The mayor said last night he is in the process of trying to convince five individuals, whom he described as eminently capable, to serve on a newly reconstituted board of directors.

Although a local housing authority is its own governing body and has no direct relationship to municipal government, HUD has, in the past, levied huge fines against cities because of actions undertaken by local housing authorities, although most of those penalties appear to stem from policy actions undertaken by city councils and/or city administrators that HUD believes result in housing discrimination subsequently practiced by authorities.

According to this website, the Kyle Housing Authority owns and operates one project containing 21 affordable rental units and administers 10 Section 8 housing vouchers. However, during last night’s city council meeting references were made to a pair of KHA rental locations. I personally am aware of only the one located on Burleson near St. Anthony’s Catholic Church. City spokesperson Kim Hilsenbeck later informed me the other KHA housing project is located at 417 W. 2^nd Street, which is also the address for the authority itself.

In other news stemming from last night’s council meeting, city Finance Director Perwez Moheet told me residents should be prepared to see the new $5 stormwater fee included in their monthly utility bills beginning with the one that will be due for payment in January. The fee is one of the results, although not the most important one by any means, of the council’s approval by a 6-1 vote on second reading last night of the ordinance creating the utility needed to manage the city’s stormwater system. Council member Daphne Tenorio cast the lone vote against the proposal, arguing the city didn’t need a separate stormwater utility. "When we first started talking about it, it sounded like a good idea," she told me after the meeting. "But then I kept thinking about it. This is stuff we should already be having done for us anyway. The city should already be responsible for it, so why are you charging us for it.." When I reminded her that state law mandates a utility be funded with a separate fee, she said "We shouldn’t be charging people for this. It should be something that was already taken care of." When I argued that "taking care if it," no matter when its done or starts, still costs money, she replied "It should have been taken care of from the beginning. It’s something that should already have been taken care of." Although she wasn’t specific about "the beginning" of what, exactly, there is a grain of truth in her argument, but the other truth inherent in that argument is that "already taken care of" means the utility, and the fees to fund it, should have been established many years ago, which, arguably, could have prevented much of the flooding that struck the city twice last year.

Earlier in the meeting, Mayor Webster and Stomwater Director Kathy Roecker agreed a fee was required to be implemented "per state statute." "The statute instructs us in the way to establish the utility," the mayor said. ‘If we created instead a division within the Public Works Department and funded it with a property tax increase it would be subject to the prioritization of future councils and we wouldn’t have any consistency or permanency with it. Our goal is to establish something permanent and establish a utility that follows the state statute."

I also found it fascinating that while I have seen a lot of public criticism of the new fee on social media, only two individuals came to the council last night to speak on the subject and even they came only to seek answers to questions they had about the proposal. Both acknowledged that Roecker’s presentation to the council answered those questions to their satisfaction. So much for public outrage.

I found it even more fascinating, while also somewhat bewildering, that, possibly because of that aforementioned flooding, all the talk about the new utility’s operations has revolved around the amount of water flowing through the city’s stormwater drainage systems. Of equal importance, although it’s been a topic that has been largely ignored, is the quality of that stormwater. Unlike wastewater, stormwater is not sent to a treatment facility where all the contaminants are removed. Stormwater flows right into downstream creeks and rivers, whose pollution levels are precisely monitored. Kyle has not reached the population level, nor is it likely to do anytime in the foreseeable future, that would force the EPA to measure the city’s stormwater quality on a daily basis. If at some future time, however, a community downstream from Kyle notices increases in water pollution levels and can successfully trace the source of that pollution to Kyle stormwater, the EPA could intervene and take punitive action against the city. I do have two pieces of good news to impart on this subject, however. The first is, I have been informed by many individuals one of the main reasons Roecker was hired to manage the Kyle utility was her unquestioned knowledge in the area of stormwater quality. The second piece of good news is, that while many here in Kyle, including yours truly, lament about the lack of industry or similar business development in the city, that type of business activity brings with it reduced stormwater quality runoff.

But back to the housing authority fiasco. The HUD letter addressed the following "concerns" the department has about the Kyle Housing Authority:

• Unauthorized cost: Work is charged to the Public Housing program without personnel activity reports or equivalent documentation to identify time worked in each program. Specifically, the agency noted $65,660 in maintenance and operation costs the authority claimed to have spent during the last five years even though, according to the letter, Simpson "could not provide any justification or produce any supporting documentation or copies or board minutes discussing the authorizing of these expenses." In addition, Pohler wrote, Simpson contracted "a few years ago" with a private vendor to build storage sheds and to install cabinets inside each of the units, but "she was unable to produce any procurement documentation for these two projects."
• For the last five years the authority has had no existing board chairperson or board co-chairperson.
• An unsupported salary for the executive director with "incremental increases that have tripled in value."
• Unsupported pay increases for the authority’s unnamed maintenance worker.
• Unsupported travel expenses.
• Unsupported employee benefits contributions.
• Unsupported compensated absences during the last six years.
• No procurement policy that is reviewed and authorized by a board of commissioners.
• Unsupported contractual expenses that were not approved beforehand by a board of commissioners.
• Maintenance charges not pre-authorized by a board of commissioners.
• Inadequate unit maintenance through the year. Specifically, HUD reported that six of the apartment units contained refrigerators that were either damaged, completely inoperable or missing entirely. Not only that, these same findings were discovered during inspections held in 2013 and then again last year. Apparently nothing was done to correct many of the deficiencies HUD discovered from its 2013 inspection. It also reported among the deficiencies that three units had ranges/stoves that were missing, damaged or inoperable and that the same units also had leaking faucets and pipes. Other deficiencies noted included damaged hardware/locks, and deteriorated or missing seals.

"Something drastic needs to happen within this organization to get it functioning again and to get it functioning properly," Mayor Webster told the council last night. He added he wanted this subject to be a part of last night’s agenda because he found "this staggeringly weird lack of any public record of anything related to this organization." He added that the five persons he wants to name to the newly reconstituted board of directors "need some support so that they can get the organization up and running."

Webster said when he began looking into the authority, after receiver his copy of the letter from Pohler, he discovered the authority had taken out "a rather large" 50-year loan at 9 percent interest with a balloon payment at the end of its term. He said the support the board needs is because "There’s the potential opportunity for refinancing some of those things that I don’t believe anyone we would put in this position right off the bat would have the necessary expertise." To cite one example, because of the authority’s current financial malfunctions, as referenced in the Pohler letter, Webster hoped "the city could provide, at (City Manager Scott) Sellers’s discretion, some time for Mr. Moheet to examine some of these financial issues so that advice could be provided to this new board."

In other action last night, the council:

• Received another in its on-going series of progress reports on the five road bond projects. Although the city maintains you can learn the status of the various projects by looking in the city's web site, my journey to that page indicated the information on it had not been updated in the last three months, specifically since Aug. 5..
• Learned the Goodwill outlet under construction immediately east of Wal-Mart is scheduled to open Thursday, Dec. 1.
• Voted unanimously to reappoint Elizabeth Correy and appoint Daniel Owings to the Library Board.
• Except for one pulled item, unanimously approved a consent agenda that contained the public condemnation of property along Burleson and yield signs at the Cleveland and McGarity roundabout in Plum Creek, one of which would replace a stop sign currently located there. Tenorio pulled one item from the consent agenda so she could be the only council member to vote against a budget amendment necessary to provide a $480,000 interest free loan to defense contractor RSI, Inc., that, among other things, will help the company repay back property taxes. Tenorio earlier said the company should have been paying those taxes all along, even though evidence revealed RSI did, indeed, attempt on multiple occasions to pay the taxes, but was rebuked by Hays County which told the company the taxes were not the company’s responsibility.
• Postponed consideration of the Parks Master Plan.
• Unanimously approved on first readings ordinances to annex 5.5 acres between FM 2770 and FM 1626 just northeast of Mountain City and rezone the property so that both duplexes and single family residences can be constructed on it.
• Postponed until January, or until after the Planning and Zoning Commission acts on the item, an ordinance applying a different kind of residential zoning to 53 acres on the north side of Bebee Road, a quarter mile west of Dacy.
• With a complete change of heart and conviction from its last meeting, voted 6-1 to approve a $270,000 expenditure for preliminary engineering services needed to relocate the railroad siding that results in the train stoppages that block traffic on Center Street. Tenorio cast the lone no vote, arguing the money should not come from city funds but from the Hays County bond proceeds approved by voters last week even though the county has made no mention when it might attempt to sell those bonds or even if it would permit the city to use the bond proceeds for any other purpose other than what was specifically outlined in the ballot proposal.
• Decided it would not hold its regularly scheduled second meeting next month because the date of that meeting, Dec. 20, might interfere with holiday plans.
• Learned its retreat has been scheduled for 8 a.m. Saturday, Jan. 7, in the council chambers.
• Spent two and a half hours in closed executive session, finally adjourning at 11:43 p.m., four hours and 42 minutes after it was gaveled into session.