Oversight Hearing on the Department of Housing & Urban Development's
Public Housing Assessment System (PHAS)

2:00 p.m., Tuesday, March 21, 2000 - Dirksen 628

Prepared Testimony of Mr. Charles Schloz
Assistant Chief Operating Officer of Housing Management
Denver Housing Authority

Good afternoon, my name is Charles Schloz, Assistant Chief Operating Officer of Housing Management -- and on behalf of the Housing Authority of the City and County of Denver, we would like to thank the esteemed U.S. Senator Wayne Allard for conducting this hearing on the Housing and Urban Development Public Housing Assessment System or also known as PHAS.

We have provided to your committee written testimony which expands on the Denver Housing Authority's oral testimony. For the record, the Denver Housing Authority is also represented at this hearing by Mr. Salvadore Carpio Jr., Executive Director and Ms. Stella Madrid, Intergovernmental Relations Officer.

The Denver Housing Authority is a large public housing authority which administers approximately 3,740 Section 8 vouchers and 3,849 public housing units, approximately one third of which are disbursed or scattered units throughout the city.

My testimony will focus on 2 key areas of the PHAS Physical Condition Assessment. First hand experience with the PHAS physical inspection process, and the Denver Housing Authority analysis of the PHAS physical inspection scoring process.

As a result of the recent completed physical inspections, the DHA staff was compelled to submit in writing and welcomed the opportunity to testify before this Committee. In our professional opinion, there remain serious inconsistencies with the Physical Condition Inspection process in PHAS. We found that the HUD contracted inspector(s) exercised grave discretion in the inspection process.

Physical Condition Inspection Process - Three different HUD Contracted Inspectors conducted over twelve hundred (1200) inspections of DHA's public housing stock during two sessions of inspections. On each and every inspection they were accompanied by DHA's Chief Operating Officer of Housing Management - 30 years experience, and myself. By observing each inspector at work, and through our interaction with each inspector, we were able to gain an understanding of how each of these individuals captured and rated observable deficiencies. Unfortunately, some of the deficiencies noted are not in accordance with the HUD issued PHAS Appendix 2 Dictionary of Deficiencies. Examples include, but are not limited to:

When An Inspector found discolored caulking around a bathtub, the inspector cited DHA for a discolored bathtub -- the item "bathtub" in the Dictionary of Deficiencies makes no provision for discolored caulking.

When an Inspector found a roof with three layers of shingles (allowable under Denver Building Code), DHA was cited for a deficiency because there "may" have been slight "waving" of the shingles because of the multiple layers.

These deficiencies cited are "not" in the dictionary of deficiencies and, this is "not" housing quality standards or HQS with points.

The Physical Inspection Scoring Process

After a thorough study of the PHAS advisory scoring for physical condition(s), DHA staff has taken a cumbersome and confusing scoring process and reduced it to a common sense level -- of understanding. There is one simple mathematical equation. At the beginning of the equation the left side has one hundred (100) points. The right side of the equation has over one thousand (1000) points. Each point on the right side of the equation has "equal" value to each point on the left side of the equation. Therefore, the equation looks like this:

100 points = 1000 points

This would appear to be a flawed formula, but for the sake of understanding the formula's flaws let's continue. If, for instance, a housing authority has one site, one building structure, one building system, one dwelling unit and one common area, then the site would claim fifteen (15 points) of the one hundred (100) points on the left side of the equation and sixty (60) points of the one thousand (1000) points on the right side of the equation.

Now, if the housing authority were cited for just four deficiencies at this site, let's say for damage or leaning fence, small erosion area on the grounds, small areas of driveway settlements and cracks on walkways (all with Level 2 deficiencies) the Equation would now look like this: HOUSING AUTHORITY OBSERVABLE ITEM SITE POINTS SITE DEFICIENCY POINTS (Total Possible Points) 15 points 60 points (Total Deductible Points) Deducted (Four Level 2 Deficiencies)-9.21 points -9.21 points (Four Level 2 Deficiency) Received (Actual Site Points) 5.79 points 50.79 points (Non-Deficiency Items=85%)

In other words, just four deficiencies reduced the housing authorities site score (that's the score on the left) by 61% (9.21 points) even though 9.21 points is only 15% of the total possible points for the entire site. Even if every other item for "Site" in the Dictionary of Deficiencies for this site, at this housing authority was perfect the housing authority's overall physical score for "Site" would still be 39%. This would be a failing score (anything under 60% is failing). The fact that 85% of the items to be observed passed the inspection would have no effect on the housing authority's score. Even worse, two of the four items observed as having deficiencies in this example (damage or leaning fence, small erosion areas on grounds) has no pro-ration allowance in the Dictionary of Deficiencies. This means that if the housing authority has a seven acre site with very small areas of erosion and damaged or leaning fence then the entire seven acre site is graded as having these deficiencies. The other two (2) deficiencies cited have proper pro-rations. This interpretation is difficult to comprehend and exemplifies again the inconsistency of the scoring system.

Additionally, the formula does not take into account multiple items in any area. Examples: some dwelling units have more than one bathroom. If just one toilet seat is damaged, the math formula cites the deficiency as if all toilet seats are damaged. It is the same for light fixtures in the dwelling unit bedrooms. If one is cited inoperable than "all" are inoperable. Same for bathroom doors, windows, walls, etc. As far as we can tell, from the information provided by the inspectors, there is no capability for the inspector to input the actual number of similar items inspected. This would certainly be the proper and fair starting point for multiple items that are to be inspected.

In closing and on behalf of the Housing Authority of the City and County of Denver we implore HUD and the Committee to accept this testimony as first hand experience and as a constructive critique of a system that simply is not fairly developed nor cost effective. DHA also asks that HUD extend the advisory scoring period to allow sufficient time to correct the physical condition scoring process and pilot test a revised, mathematically sound, accurate and balanced physical scoring system.

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