DETROIT HOUSING COMMISSION · The Detroit Housing Commission (DHC) has historically existed to provide affordable housing to ... (HUD) in 1992, is designed to ... The AHD staff looks

A N N U A L R E P O R T

2009

DETROIT

HOUSING

COMMISSION

A N E W B E G I N N I N G

DHCDETROIT HOUSING COMMISSION

D E T R O I T H O U S I N G C O M M I S S I O N 2 0 0 9 A N N U A L R E P O R T

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DHC Mission Statement

The Detroit Housing Commission will effectively and efficiently develop, manage and preserve quality affordable housing.

Our Vision

•Develop and Maintain Community Partnerships

•Promote High Quality Customer Service

•Sustain Sound Fiscal Management

•Ensure Operational Sustainability

Contents

A New Beginning..........1

Letters..........2

Chronicle of Change..........4

Opening Doors..........6

Reaching Potential..........8

Enhanced Lives..........9

Advanced and Relevant.......10

DHC Executive Staff.......11

Financial Statements.......12

Around DHC.......16

DHC Sites Locations.......18

The Detroit Housing Commission (DHC) has historically existed to provide affordable housing to low to moderate income Detroit residents. As we fulfill our statutory obligation of providing affordable housing, the DHC has recently demonstrated “A New Beginning” by providing a level of activity unprecedented in the DHC’s history. The DHC has begun to see progress where there has

been none for decades. The DHC has taken charge by changing the physical shape of public housing in Detroit.

Its new developments are enhancing their respective communities by providing renewed character, attractiveness and livelihood. With its new focus and determination, the DHC expects it will, in the near future, be showcased across the nation as a model for public housing.

The DHC is committed more than ever to providing opportunities to further the hopes and aspirations of its residents as evidenced by the recent creation of a Resident Services Department. The DHC has made exceptional strides to increase efficiency in the services provided to residents while working within tighter budget constraints as it transformed its public housing operations to a property-based model. This is essential to its continued progress in the 21st century. As a more efficient agency, the DHC has set the stage for the continued revitalization of every neighborhood it serves.

Journey with us through this Annual Report, review our accomplishments, discover the DHC team that’s making it happen, and join us in celebrating “A New Beginning” at the DHC.

A New Beginning


• Gardenview Estates


2 3

Congratulations to Eugene E. Jones, Jr. and the staff of the Detroit

Housing Commission (DHC) for continuing to fulfill the DHC’s mission

by effectively and efficiently developing, managing and preserving

affordable housing for the low-income citizens of the City of Detroit

while recovering from HUD’s designation as a troubled housing agency.

Since the United States Department of Housing and Urban Development (HUD) Recovery

process began at the DHC in July, 2005, the DHC has made remarkable strides in all

program areas especially in the Asset Management, the Housing Choice Voucher and

the Development Programs. As the DHC completes the final task of being removed from

“troubled status” by HUD by becoming a standard performer on both the Section Eight

Management Assessment Program (SEMAP) and the Public Housing Assessment System

(PHAS) used by HUD to gauge the health of public housing agencies, I challenge the DHC

to build upon its successes and learn from its mistakes to reach the next level of performance.

HUD stands ready to help the DHC in its continuing recovery efforts.

Sincerely,

Steven M. Meiss

HUD Recovery Administrator and Chair, Board of Commissioners

Detroit Housing Commission

In July of 2005, the Secretary of the United States Department of Housing and Urban Development (HUD) and the Mayor of the City of Detroit (City) entered into a Cooperative Endeavor Agreement (CEA) for HUD to assume oversight of the Detroit Housing Commission (DHC) Board and day to day operational management of the DHC. HUD and the City entered the CEA because of the DHC’s repeated failing scores on both the Public Housing Assessment System (PHAS) and the Section Eight Management Assessment Program (SEMAP). These failing scores resulted in the DHC being placed in “troubled status” by HUD. Once the CEA was signed, HUD immediately dispatched a recovery team to identify challenges and opportunities for “recovery of the troubled agency.” Four years later the DHC is in the final stages of “Recovery.” Several examples of how the DHC has progressed during the Recovery period involve the Public Housing Program, the Housing Choice Voucher Program (Section 8) and the HOPE VI Program. During the course of the Recovery, the DHC’s Property Management Department has transitioned to the Asset Management Department and has pushed down operational control of the public housing developments to the site level instead of using a highly centralized management approach. Also, to assist in its Recovery, the Housing Choice Voucher Program (Section 8) has recruited two highly seasoned managers to reorganize the Assisted Housing Department to make it more effective and efficient. Finally, the Development Department has caused the stalled Hope VI and other development projects to regain momentum resulting in new units being brought online. The Woodbridge Estates Development is a prime example of this newfound momentum as demonstrated by the completion of all of its onsite rental phases. Also, Phase I of Gardenview Estates has been completed and Phases IIA and IIB have closed and should be ready for occupancy in late 2010.

Many positive steps have occurred since the beginning of “Recovery” in July, 2005. I will continue to challenge the staff over the next year to complete the final steps to return the DHC to “standard performer” status with HUD with the ultimate goal to achieve “high performer” status with HUD. We have the talent to achieve this and it will happen.

Eugene E. Jones, Jr.

Executive Director


4 5

A Chronicle of Change

1977 Sheridan I & Sheridan II Apartments are built.

1991 HOPE VI was created to revitalize old neighborhoods.

1993 Detroit was chosen as a HOPE VI site. Herman Gardens site demolished to become the nation’s largest HOPE VI development.

2001 Four Jeffries buildings were demolished for a HOPE VI site.

2004 Move-in begins at Woodbridge Estates on old Jeffries site.

2005 Detroit and HUD enter a Cooperative Endeavor Agreement to assist in the DHC’s recovery efforts.

2009 Phase I of Gardenview Estates completed; residents move in.

1937 The Great Depression leads to the Housing Act calling for public housing to be built in major U.S. cities.

1941 Influx of factory workers head-ing to Detroit increases housing needs.

1942 Riots start due to fed-eral mandate to allow African Americans to move in public housing.

1943 With the influ-ence of Eleanor Roosevelt, Sojourner Truth housing project is integrated and Herman Gardens is under construction.

1950 The construc-tion of Jeffries Housing begins.

1964 Motown’s Supremes visit the Brewster/Douglass Hous-ing Projects, once home of Diana Ross, during one of their promo-tional tours.

1967 The Detroit Housing Com-mission utilizes Fort Wayne to house residents during the civil disturbances. Harriet Tubman and State Fair Senior Apart-ments are built.

1974 Conner Waveney is built on Detroit’s eastside.

196419422001

2004

2009

1941

1937

1950 1977


6 7

Opening Doors

In 2009, the DHC Development Department was responsible for administering two major sources of Public Housing development grants. The HOPE (Housing Opportunities for People Everywhere) VI Program, introduced by the U.S. Department of Housing and Urban Development (HUD) in 1992, is designed to provide resources to public housing agencies for the physical, managerial and social renewal of failed and

severely distressed public housing communities. To showcase the DHC’s “New Beginning,” residents began moving into the new Gardenview Estates (GVE), more than 12 years after the demolition of Herman Gardens on the 139-acre site located on Detroit’s west side.

In addition, the Replacement Housing Factor (RHF) Program, provides new housing for those developments that

have removed units from their inventory for the sole purpose of developing new rental units. Cornerstone Estates, 180 units to be located on Martin Luther King, Jr. Drive and the Lodge Freeway; and Emerald Springs, 208 units to be located on Mound and Charles Streets in Northeast Detroit, are examples of developments utilizing RHF funding. Hope VI and RHF funding

are leveraged with other public and private resources to build and acquire additional units of housing.

2009 major accomplishments include:

•Completed 1st Tax Credit Exchange Program closings of GVE Phases IIA & IIB

•Met the Obligation End Date for RHF Increment 1 grant years 1999, 2000, 2001, 2002, and 2003

•Awarded Low Income Housing Tax Credit for Emerald Springs Phases IA and IB

•Secured City of Detroit funding approvals for Cornerstone Estates and Emerald Springs totaling $5.5 million

•Successfully negotiated Development Agreement with Gardenview Estates Homeownership Developer to complete 337 for sale units over the next four years

•Major event - September 2009 ribbon-cutting for Gardenview Estates Phase I rental units

•Fully expended Demolition Grant funds for infrastructure and site remediation

•Gardenview Estates Storm Water Detention Pond construction completed realizing cost savings

•Generated $500,000 in program income from ground lease payments

After more than a decade, in 2009 Gardenview Estates, formerly Herman Gardens, finally became a reality with a ribbon-cutting and Open House. Detroit Mayor Dave Bing, Celebrity Judge Greg Mathis, who grew up in Herman Gardens; Ruth Williams, a former Herman Gardens resident; and a host of others attended the event.


8 9

Reaching Potential Enhancing Lives

In 1933, the City of Detroit established the Detroit Housing Commission (“DHC”) under the Michigan Housing Facilities Act. Throughout the DHC’s 77-year history, our mission has been to provide safe, decent, and affordable housing for the low and moderate-income people that we serve. While the DHC was established by the City of Detroit and all of its physical developments are located within the City of Detroit, the Assisted Housing Department (AHD) through the Housing Choice Voucher Program (HCVP), previously known as Section 8, reaches five counties: Wayne, Monroe, Lapeer, St Claire and Oakland.

In 2008, the DHC HCVP opened its wait list for new applicants. While more than 30,000 families applied to be placed on the waiting list, only 8,000 names were selected by random lottery. The AHD immediately began calling in families from the waiting list and by the end of our fiscal year, June 30, 2009, more than1,500 new families were added to our HCVP. This new influx of participants increased the number of HCVP participants to approximately 5,800 families from the 4,300 participant households being

served in 2008. In other words, DHC increased its HCVP service by 35% in 2008. We take great pride in this fact given the current state of Michigan’s economy and the tremendous need being faced by local families.

While the AHD worked diligently to assist new participants, the AHD itself faced a number of challenges during 2009, including budget constraints, management changes, and regulatory compliance findings leading to the HCVP being labeled as “troubled” by the Department of Housing and Urban Development. However, the DHC responded to these challenges in the true nature of a champion and viewed them as lessons to be learned, and took immediate action to resolve the issues, moving the AHD and the HCVP ahead. The DHC has hired new AHD management staff and put new policies and procedures in place to efficiently provide vouchers to those in need while monitoring budget and compliance matters.

As we move forward into a new decade, the AHD is excited to be expanding its client base and programmatic outreach. We have dedicated staff in place and anticipate a steady expansion of our Family Self-Sufficiency Program (FSS) participation and the use of Homeownership Vouchers in the year and for years to come. And, with approximately 4,000 applicants remaining on the HCVP waiting list, the AHD is determined to help the community meet its needs for affordable housing. We understand that as we continue to grow and strive to create an office of professionals that balance customer service and governmental policy for a more fiscally sound, regulatory compliant and human centered program, we are better able to fulfill the needs of those we serve. The AHD staff looks forward to new and exciting changes as DHC pushes forward as an agency of exceptional performance standards and a model for other public housing agencies across the nation.

A few years back, Congress directed all public housing authorities to begin transitioning from the traditional central management system to a more cost-efficient site-based management approach. The DHC’s site-based management system, run by the Asset Management Department, blends the styles and best practices of both the public and private sectors; and currently manages both DHC and site-based managed systems. With new management procedures in place, the DHC has shown significant improvements and efficiencies. This synopsis of collected data illustrates the Department’s achievements and benchmarks over the past year.

•The Adjusted Occupancy Rate is 97.945%, up 16%

•Current Emergency Work Orders completed within 24 hours is 100%, up from 94%

•Non-Emergency Work Orders have decreased significantly from more than 4,000 to less than 1,000.

The changes continue to showcase an end result that is more effective and responsive. This in turn has enhanced the livability of all of the DHC’s housing communities, as well as promotes the successful residency of the people it serves.

The development of Woodbridge Estates has transformed a whole neighborhood, bringing

quality living to all income levels.

• DHC Sons and Daughters Day


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Advanced and Relevant Executive Staff

The DHC Department of Administrative Services has accomplished many of its goals this year. Its two main divisions, Procurement and Management Information Systems (MIS), continue to stand ready to serve all of DHC’s departments.

Procurement:

DETROIT HOUSING COMMISSION-PROCUREMENT DIVISION MINORITY/DETROIT BASED CONTRACTING ACTIVITY OCTOBER 1, 2008 – SEPTEMBER 30, 2009

TOTAL: $26,915,348.89 CONTRACTING SUMMARY • Non-Minority $20,124,671.42 • Non- Detroit $17,585,109.87 • Minority $6,790,677.47 • Detroit Based $9,330,239.02 • Section 3 $2,000,080.53

• Minority Percentage 25.23% • Detroit Percentage 34.67% • Section 3 Percentage 7.43%

The Procurement Division continues to strive to increase Minority, Detroit-Based and Section 3 Contracts.

Management Information Systems:

• Implemented IT Helpdesk system to improve service response time and customer support

• Implemented Websense web content filtering platform to reduce Internet threats and improve productivity

• Implemented Websense Client Policy Manager to improve desktop systems security and protect against Spyware, trojan and Malware attacks

• Developed IT disaster recovery strategy

• Developed new IT training room at 1301 East Jefferson to facilitate IT training needs

• Developed new website to improve and enhance DHC’s online presence

• Negotiated contract for 2211/1301 LAN/WAN and agency-wide 10MB Internet fiber upgrade and started implementation phase; estimated date to establish new service is April 2010

• Completed new IP Phone system cost estimation and design work; the new system will provide advanced unified IP communication features, IP FAX and twenty seat contact center to improve productivity and customer support

• Migrated CCS Select system from UNIX to Windows 2008 environment and upgraded hardware to enhance system performance

• Upgraded Elite system hardware and migrated database to MS SQL 2005 platform to improve Elite system performance

Steven E. Meiss Eugene E. Jones, Jr.HUD Recovery Administrator Executive Director313-877-8608 [email protected] [email protected]

Tamela R. McClinton Willie C. H. GarrettExecutive Assistant Director of Asset Management313-877-8608 [email protected] [email protected]

Helen M. Kipplen Kelley LyonsChief Financial Officer Director of Administration313-877-8557 [email protected] [email protected]

Michael Ray Allen Robert K. HuntDirector – Assisted Housing Division Director of Development313-877-8730 [email protected] [email protected]

Hurticene Hardaway Steve MahlinGeneral Counsel Director of Human Resources313-877-8810 [email protected] [email protected]

Seana PageDirector of Resident [email protected]

• As of April 2010


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Financials • Balance Sheet – June 30, 2009

Detroit Housing Commission

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

Year ended June 30, 2009

OPERATING REVENUES Total Primary Government

Total Discrete Component Units

HUD operating revenues 55,725,848$ -$ Tenant revenue, net 3,936,561 3,092,973 Other operating revenue 1,292,053 108,992

Total operating revenues 60,954,462 3,201,965

OPERATING EXPENSESAdministrative 14,485,254 1,569,129 Tenant services 259,838 2,675 Utilities 4,189,497 541,404 Maintenance 7,021,429 656,050 Protective services 759,435 120,254 General 3,478,216 548,408 Depreciation 3,405,026 3,130,452 Housing assistance payments 39,481,932 -

Total operating expenses 73,080,627 6,568,372

OPERATING INCOME (LOSS) (12,126,165) (3,366,407)

NONOPERATING REVENUES (EXPENSES)Grant revenue 320,728 726,007 Loss on disposal of fixed assets (272,160) - Interest income - unrestricted 241,085 27,845 Interest income - restricted 891,288 - Interest expense - (1,621,225)

Total nonoperating revenues (expenses) 1,180,941 (867,373) Change in net assets before capital contributions (10,945,224) (4,233,780)

CAPITAL CONTRIBUTIONSCapital contributions - HUD 11,916,808 - Capital contributions - City of Detroit 2,918,050 - Partner contributions - 2,034,644 Partner distributions - (15,545)

Change in net assets 3,889,634 (2,214,681) Total net assets - beginning, as previously stated 202,114,314 7,349,929 Prior period adjustment - (142,357) Total net assets - beginning, restated 202,114,314 7,207,572

Total net assets - ending 206,003,948$ 4,992,891$

The accompanying notes are an integral part of this financial statement.

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• Statement of Revenues, Expenses and Changes in Net Assets Year Ended, June 30, 2009

Financials

ASSETS Total Primary Total Discrete CURRENT ASSETS Government Component Units Cash and cash equivalents – unrestricted $ 11,696,725 $ 564,557 Cash and cash equivalents – restricted 11,854,029 2,856,507 Receivables, net 5,005,038 467,548 Prepaid expenses 285,651 56,282 Due from other governments -- 840 Total current assets 28,841,443 3,945,734 NONCURRENT ASSETS Cash and cash equivalents – restricted 42,191 -- Capital assets, net 117,380,051 78,945,155 Accrued interest receivable – unrestricted 147,241 -- Accrued interest receivable – restricted 4,299,312 -- Other noncurrent assets -- 1,119,207 Notes, loans and mortgages receivables, net 61,983,144 -- Total assets $ 212,693,382 $ 84,010,096

LIABILITIES AND NET ASSETS CURRENT LIABILITIES Current portion of long-term debt $ -- $ 99,600 Bank overdraft -- 847 Accounts payable 3,496,852 409,452 Due to HUD 58,992 -- Accrued interest payable -- 54,238 Accrued salaries and benefits 642,212 -- Accrued contingency liabilities 360,902 -- Due to other governments 36,791 1,067,862 Tenant security deposits 290,079 238,534 Deferred revenue 788,660 33,339 Family self sufficiency escrow – short-term 29,863 -- Other current liabilities 751,868 553,433 Total current liabilities 6,456,219 2,457,305 NONCURRENT LIABILITIES Long-term debt -- 72,389,874 Accrued compensated absences 191,024 -- Family self sufficiency escrow – long-term 42,191 -- Other noncurrent liabilities -- 4,170,026 Total liabilities 6,689,434 79,017,205 NET ASSETS Invested in capital assets, net of related debt 117,380,051 6,455,681 Restricted net assets 75,323,516 2,563,735 Unrestricted net assets 13,300,381 (4,026,525) Total net assets 206,003,948 4,992,891 Total liabilities and net assets $212,693,382 $ 84,010,096


14 15

Financials Detroit Housing Commission

STATEMENT OF CASH FLOWS


CASH FLOWS FROM OPERATING ACTIVITIESHUD operating grants received 54,335,838$ Collections from tenants 5,490,877 Collections from other sources 1,360,320 Payments to employees (10,098,477) Payments to suppliers (20,276,314) Housing assistance payments (39,470,060)

Net cash used in operating activities (8,657,816)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

HUD capital grants received 11,916,808 Purchase of property and equipment (11,324,237)

Net cash provided by capital and related financing activities 592,571

CASH FLOWS FROM INVESTING ACTIVITIESNet cash provided by interest income 1,092,462 Investment in notes receivable (1,252,702)

Net cash used in investing activities (160,240)

CASH FLOWS FROM NONCAPITAL ACTIVITIESOther miscellaneous revenue 320,728

NET DECREASE IN CASH (7,904,757) Cash and cash equivalents at beginning of year 31,497,702

Cash and cash equivalents at end of year 23,592,945$

Cash and cash equivalents - unrestricted 11,696,725$ Cash and cash equivalents - restricted 11,854,029 Cash and cash equivalents - restricted noncurrent 42,191

23,592,945$

AS PRESENTED IN THE ACCOMPANYING BALANCE SHEET:


12

• Statement of Cash Flows – Year Ended, June 30, 2009 Detroit Housing Commission

STATEMENT OF CASH FLOWS (continued)


RECONCILIATION OF OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES

Operating loss (12,126,165)$ Adjustments to reconcile operating loss to net cash used in operating activities

Depreciation 3,405,026 Provision for bad debt, net of recoveries 760,224 (Increase) decrease in assets:

Receivables, net (1,209,718) Prepaid expenses 54,112 Inventory 98,847 Notes receivable 673,570

Increase (decrease) in liabilities:Accounts payable 1,291,604 Due to HUD (83,515) Due to other governments (380,020) Accrued salaries and benefits 31,694 Tenant security deposits 36,886 Deferred revenue 728,696 FSS escrow 11,872 Other liabilities (1,950,929)

Net cash used in operating activities (8,657,816)$


13

• Statement of Cash Flows (continued) – Year Ended, June 30, 2009 Financials


16 17

Around DHC

• Gardenview Ribbon Cutting Ceremony

• Gardenview Ribbon Cutting

• Gardenview Ribbon Cutting

• Warren West

• Villages at Parkside• Villages at Parkside

• Brewster Homes

• Brewster Homes

• Woodbridge Estates

• Resident Council Swearing in Ceremony


18 19

DHC Sites Locations

8 Mile Road

7 Mile Road

E. Jeffe

rson

Van Dyke

Belle Isle

I-75

I-75

Lodge Fwy.

Woodw

ard Ave.

Grand River

I-94

I-94

I-94

Michigan Avenue

Gra

tiot

I-96

I-96

Green

field R

oad

Sou

thfield

Fwy.

Evergreen

Ro

ad

M-10

DHC Sites1. Smith Homes

14313 Crescent Drive

2. Gardenview Estates16500 Tireman

3. Warren West4100 W. Warren

4. Harriet Tubman2450 W. Grand Blvd.

5. Woodbridge3511 John C. Lodge *CornerstoneMartin Luther King Drive and the Lodge Fwy.

6. State Fair1231 W. State Fair

7. Sojourner Truth Homes4801 E. Nevada

8. Charles Terrace5512 Buffalo Court

9. *Emerald SpringsMound Rd. and Charles St.

10. Diggs Homes/Forest Park1331E. Canfield

11. Brewster Homes527 West

12. Villages of Parkside, II & IV5000 Conner

13. Riverbend Towers4386 Conner

14. Sheridan I & II7501/7601 E. Jefferson

* Future development


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6DHCDETROIT HOUSING COMMISSION

7DHCDETROIT HOUSING COMMISSION

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D E T R O I T H O U S I N G C O M M I S S I O N

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2 0 0 9 A N N U A L R E P O R T

The Detroit Housing

Commission has the

ability to transform

the vision of our

community.

We can also make

a positive impact on

the lives of all of

our residents.

Together, we can

celebrate our New

Beginning; and by

joining hands, we

can continue our

successes for years

and years to come.

• Gardenview Estates

DETROIT HOUSING COMMISSION1301 E. JEFFERSON AVENUEDETROT, MICHIGAN 48207313.877.8000313.877.8500 FaxTYY/TDD: 800.222.3679

www.dhcmi.org


Documents

DETROIT HOUSING COMMISSION · The Detroit Housing Commission (DHC) has historically existed to provide affordable housing to ... (HUD) in 1992, is designed to ... The AHD staff looks