Advertisement

Housing Panel Overpaid Clients on Utility Bills

Share
TIMES STAFF WRITER

The San Diego Housing Commission spent $1.2 million more for utility allowances than it should have over two years, money that, according to a federal official, could have been spent on other programs for the poor.

Only within the past few months has the commission reduced its payments to its clients for utilities, almost two years after an elderly man, who requested anonymity, began warning the agency about this and other questionable features in the federal housing program administered by the local commission. Overall, the commission paid out twice as much in utility allowances as it should have.

“If they’re having a problem with a simple matter such as that, that could indicate something about their performance and ability to administer,” said Scott Reed, a spokesman for the U. S. Department of Housing and Urban Development.

Advertisement

He added that, if the overestimates are a symptom of management problems in the commission’s Section 8 program, it could affect the number of housing vouchers the agency receives from HUD.

Under the Section 8 program, tenants pay 30% of their income for rent and the rest is subsidized with federal funds. In figuring out the tenant’s portion of the rent, a monthly “standard utility allowance” is used to estimate the monthly utility bills and to calculate how much of a tenant’s income can be used for rent.

Commission officials said their change in the monthly payments was prompted by the receipt in 1988 of a 1987 SDG&E; study of energy use in the county. Before receiving the SDG&E; report, commission official Fran McHugh said, the agency lacked accurate data and was forced to make its calculations based on 1975 numbers.

However, Les Owashi, an SDG&E; marketing information supervisor, said the utility company has done the studies every two years since 1973, as required by state law, and added that his office is now working on the 1989 report. McHugh said he was not aware of the previous studies.

In 1987, HUD authorized substantial increases in tenants’ subsidies, McHugh said. The commission in turn used these increases “to adjust the utility allowances” upward, he added. But McHugh acknowledged that the adjustments were made without regard to HUD regulations, which require the agency to work closely with SDG&E; in setting utility allowances.

Reed called the inflated utility allowances “a gross error.” His Los Angeles office, which oversees Section 8 programs run by 66 Southern California housing agencies, has never seen utility allowances overestimated by 100%, he said.

Advertisement

HUD officials said a two-month comprehensive review of the commission’s Section 8 program scheduled for early next year will determine whether even greater amounts of money are involved over a longer period.

In July, tenants in studio units were notified that that their monthly allowance was being cut from $32 monthly to $15. Tenants in one-bedroom units had their allowances cut from $41 to $21, while tenants in two-bedroom units suffered a smaller cut, from $49 to $44. According to commission figures, 104 studio units, 1,778 one-bedroom units and 2,959 two-bedroom units are affected by the cuts.

“They (tenants) got something they were not entitled to, but it’s not something they did wrong,” McHugh said. “We used the data available at the time, and it looks pretty bad. But it’s the only data we had to work with.”

Although some tenants had their allowances reduced, 1,500 others who live in units with more bedrooms received increased utilities allowances.

But it was the overestimates for the smaller units that troubled HUD officials.

“If you’re going 100% over the average figure, that’s definitely a gross error,” Reed said. “A 100% error should not have developed. I don’t understand how a housing authority could have such a gross error in calculating something very simple.”

Reed said that, if the higher estimates were in effect for only two years, the damage done is relatively minor. McHugh argued that the overestimates did not hurt the commission because they did not cause the agency to misspend any allocated Section 8 funds.

Advertisement

“The practical effect was that the tenant paid a smaller portion of his income for rent. It doesn’t affect the Section 8 program at all,” McHugh said.

Whether the allowance was higher or lower than it should have been, the commission would have received the same amount of federal funds, he added. Besides, HUD reviewed the allowances and said they were “reasonable,” McHugh said.

However, Reed said that HUD officials never reviewed the allowances. Instead, they accepted the commission’s written assurance that local officials were using the HUD-mandated formula in setting the allowances.

Reed also said the $1.2 million could have been used for other Housing Commission expenses. Those might include administration costs or social services and training offered by the agency to its tenants.

Advertisement