In the past few weeks, the RRHA has been subject to a lot of criticism because of how many units are without any heat or have insufficient heat. In addition to the immediate harm caused to tenants by the RRHA not maintaining working heat throughout its buildings, let’s not forget the outstanding lawsuit against the RRHA for their improper handling of utility fees and how it fits into the context of the larger picture.
On December 1, 2017 the Richmond Free Press reported on a lawsuit alleging the RRHA overcharged public housing residents for excessive utility bills. The way the system is supposed to work is per the U.S. Housing Act, the housing authority must follow specific guidelines to set the monthly utility allowance to ensure that public housing tenants are not charged more than 30% of their monthly adjusted income for rent and utilities. The guidelines are intended for the housing authority to adjust the allowance based on local factors such as condition of units, energy efficiency of appliances, and local climate factors. In theory, this would give each tenant a fair allowance so they are not negatively impacted by decaying conditions, cinder block wall construction, and old appliances. Once the allowance is set, residents are only charged for their use in excess of their monthly allowance.
Looking at the lawsuit, it claims that the RRHA has been violating federal requirements regarding utility allowance setting since November 2012 and overcharging residents for utilities since May 2014. Allegedly, for ten months following the May 2014 implementation, at the six largest sites (Creighton, Fairfield, Gilpin, Hillside, Mosby, and Whitcomb) at least 92% of families were assessed charges for at least one month and on average, 86% of families received surcharges monthly. Then, after the allowances were set too low, the lawsuit alleges that since October 2014, the RRHA’s third party vendor (Yardy Energy Solutions aka YES) incorrectly calculated the surcharges resulting in overbillings. From October 2014 through November 2016, the overbilling was calculated at $229,946.87. The lawsuit contains information about specific individuals who experienced the low allowances resulting in overbilling so they were not able to pay their utilities which caused them to be charged a flat $15 late fee regardless of their initial rent amount which is based on their ability to pay. Which, by the way, the HUD Public Housing Occupancy Guidebook states that charging late fees is optional and if the housing authority chooses to charge late fees, the charges must be reasonable. That brings to question, is it really reasonable to charge everyone a $15 late fee regardless of if they are paying $50 or $800 for their rent?
As if charging people too much money was not enough, the real kicker is that the RRHA allegedly included the late payment fees and utility surcharges in the definition of rent. According to the HUD Public Housing Occupancy Guidebook, the RRHA may not consider utility surcharges as rent and cannot treat unpaid utility surcharges as unpaid rent. By illegally defining utilities and late payment fees as rent, tenants unable to pay would be subject to eviction. In addition, to be eligible to receive a voucher through the Housing Choice Voucher, applicants may not have outstanding rent owed; therefore, this illegal action by the RRHA would make people ineligible for vouchers.
To put this in context, just a few days ago housing advocates shined a massive spotlight on the substandard conditions of public housing units in Richmond. In a survey created by one housing advocate, Omari Kadaffi Guevara, residents indicated problems such as gaps in doors allowing cold air into the unit, no running hot water, heat that has been broken for years, residents using stoves to heat their unit, and more. In addition, photos were shared showing ice on walls and residents using blankets to try and block the cold air from coming into the apartment.
So, what does all of this mean? People have been living in units for years that do not have proper heat or weatherization; therefore, the RRHA’s neglect likely impacted the resident’s use of utilities. Then, if the RRHA failed to set an appropriate utility allowance while continuing to neglect maintenance, they would have perpetuated the circumstances that lead to residents incurring high utility surcharges. On top of the threshold being too low, tenants were allegedly overbilled and charged late fees when they couldn’t pay. And when they couldn’t pay, because the RRHA illegally considered utilities in the definition of rent, people would have been subject to eviction or made ineligible for vouchers. Meanwhile, in July 2017 the RRHA Board of Commissioners voted to begin exploring what steps need to be taken to get permission from HUD to move funding for Creighton, Fairfield, Gilpin, Hillside, Mosby, and Whitcomb from public housing.
THE TIME FOR ACTION WAS YESTERDAY
Richmond, we cannot relax just because this cold weather front is over. For now, people may be outside of the immediate life-threatening danger of not having heat but that doesn’t mean conditions have improved. Just because it is not on the news one day does not mean decisions are being made in the best interest of residents. The CEO, T.K. Somanath is employed at the will of the RRHA Board of Commissioners which is appointed by City Council. As elected officials, City Council Members hold their seat at the will of the people. They work for us. To begin fixing the problems in public housing, change starts with the people holding their elected officials accountable for their role in perpetuating the mismanagement of the RRHA and substandard living conditions that has created.
I have heard many people claim that T.K. Somanath is not the problem in RRHA. They say that he has devoted his life to housing and for that reason, he is good guy with a good heart and there is no way he is the problem. They say that these problems existed long before T.K. and will exist long after he is gone; therefore, he is not the problem. In my opinion, just because someone has the experience does not mean they are right for the job or are an effective leader. In fact, in a recent interview Somanath said that the recent heating crisis was a result of a communication breakdown and that ousting him would not solve the problems facing the RRHA residents while pointing the finger toward a lack of funding. While financial challenges are real, culture is intentionally created from the top down. At a press conference on September 12th, Somanath stated the RRHA was going to step up evictions to reduce crime rate and the foster care system would have to deal with the kids impacted by the displacement. To me, that is not a statement of someone who truly has a heart for the people he serves. So when there are reports of employees laughing at residents and communication breakdowns, this should be indicative of a failure of the people in leadership to effectively manage their employees. When the CEO himself points to communication breakdown as the problem when there is a long chain of evidence showing years of mismanagement, he needs to look at himself in the mirror and ask what his role is in fixing this situation. The lawsuit regarding utility charges states that by June 2015 it should have been clear that the May 2014 allowances were set too low. Somanath left retirement to accept his current role as CEO of RRHA in February 2015. While the allowances were set before Somanath arrived, how many times should this have been corrected since then? Somanath worked at RRHA previously from 1971-1990 as Director of Development. He knew the problems that he was walking into. With any leadership change most companies re-evaluate their processes and procedures; however, this is even more critical with a change in CEO. The CEO is the liaison between the board and management; therefore, they are responsible for ensuring strategy is implemented and management decisions align what that strategy. If you go back and look at the headlines about the RRHA in the past few years, the heat crisis and this lawsuit are not isolated incidents of mismanagement. At some point, we have to ask, who is responsible to make sure people are doing their job? Who is making sure the managers are doing their jobs? Where does the buck stop? Who is going to accept accountability and responsibility? Pointing fingers to communication issues with senior leadership is a scapegoat because these issues are not isolated.
In my opinion, if the allegations in the lawsuit are true, it would serve as definitive evidence of rumored mismanagement and T.K. Somanath and the RRHA Board of Commissioners need to step up or step down.
The next RRHA Board of Commissioners meeting will be held at the Calhoun Center located at 436 Calhoun Street on January 17, 2018 at 5:30PM.