PHA budget plan shifts money to rent subsidies

The Philadelphia Housing Authority plans to spend less on outside lawyers and professional consultants and more on rent subsidies for low-income families, Michael P. Kelly, the agency's federally appointed administrator, said Thursday.

At PHA's monthly board meeting, Kelly presented a detailed plan of the agency's $400 million budget for the fiscal year starting July 1.

Kelly said it was the first time in recent years that the authority had divulged such a detailed public accounting and explanation of its budget plan.

"The goal is to make very public [that] this is where we're at," Kelly said.

Most of PHA's funding - $375 million - comes from the federal government, with $24 million in rents and interest and miscellaneous sources accounting for the rest.

Many aspects of PHA's budget mark a departure from the spending priorities of Kelly's predecessor, Carl R. Greene, fired in September after the disclosure of multiple sexual-harassment complaints and settlements totaling $648,000 to three women.

Greene dismantled much of PHA's legal department and outsourced work to politically powerful law firms in the city. Kelly said that costly practice must be curtailed. "We can't continue to depend on outside legal counsel," he said.

In March, the Inspector General's Office of the U.S. Department of Housing and Urban Development criticized PHA for paying "outrageous fees" to outside lawyers. For the year ending June 30, PHA expects to spend $6.6 million on legal costs. In the year ahead, the agency will cut that by a third, with an estimated budget of $4 million, Kelly reported.

Among other highlights of the 2012 budget, PHA will:

Issue 500 vouchers - worth $9.5 million - for rent subsidies tied to specific affordable-housing projects.

Reduce professional contracts for such services as information technology by 29 percent, or $4.9 million.

Increase spending on maintenance by 29 percent, or $3.7 million, which includes hiring 40 building-services workers.

Overall, PHA expects to squeeze its administrative expenses by about 23 percent, or $7 million.

PHA receives three funding streams from HUD: one for operating expenses, one for capital projects, and one from the Moving to Work program, which covers all housing vouchers.

A total of 28,728 families are housed by PHA, with 13,249 living in conventional public housing and 15,479 receiving rent subsidies.

But the demand for affordable housing in Philadelphia is much stronger. More than 100,000 households are on the agency's waiting list for public housing or rent vouchers.

Kelly said he wanted to "dial up" the number of rent vouchers by 500 this year, adding that "this 500 could be 1,000 when it's revisited a year from now."