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April 29, 2007 | Takeover placed on fast track

Detroit's housing agency gave payments to unapproved contractors, left more than 40 percent of its jobs unfilled and lost track of $2 million at a single project, but the federal government waited years before taking control.

The Sarasota agency was listed among the nation's worst for years in the late 1990s and again in 2004, but the U.S. Department of Housing and Urban Development offered to help it fix itself before finally taking over.

In Newark, the housing authority used money meant for public housing to buy land for the New Jersey Devils hockey team's new arena, and its director had four family members on staff. It was ultimately found to have misused $20 million, but HUD allowed it to hold on to power, as long as it continues to follow a strict reform timeline.

"My experience in the past is that federal HUD likes to see the local authorities take things over themselves, " said Stephen Finn, who served as the executive director of the Newark Coalition for Low Incoming Housing in the mid 1990s.

That's not so in Miami-Dade County.

Here, where the first evidence of widespread financial and management problems came less than a year ago, HUD has been far more strict. If county leaders do not invite a federal takeover, HUD plans to seize control next month.

"Our decision has been made, " said HUD Deputy Secretary Roy Bernardi.

He said the problems at the Miami-Dade Housing Agency are so deep, so wide and so egregious that HUD cannot offer the intermediate measures that normally precede takeovers.

County leaders, who are fighting the takeover, said Miami-Dade is being treated unfairly. Mayor Carlos Alvarez and many county commissioners said HUD would disrupt their own ongoing reform efforts.

"If we're doing all the right things, why do they want to step in?" Alvarez said. "It doesn't make any sense."

LEGAL BATTLE AHEAD

The county's attorneys suggest HUD might be overstepping its legal bounds, saying the federal government has not taken all the steps required to justify a takeover.

"They still have to abide by federal law, " said County Attorney Murray Greenberg, who was directed by the commission Thursday to prepare for a court battle.

But the U.S. Housing Act, a federal law created in 1937, gives HUD the power to take over any agency found in default. Last week, HUD declared such default on both Miami-Dade's public housing and its Section 8 rental-assistance voucher program.

"We want to correct the situation and then give it back to Miami-Dade, " Bernardi said. "But right now people are not being served."

Federal housing takeovers are rare; only five of the country's 3,200 public-housing agencies are being run by HUD, and four other takeovers have ended since late 2004.

Most gain federal attention -- and public scrutiny -- when their scores on an annual HUD checkup fall to unacceptable levels. The most recent scores in Miami-Dade were good, an overall score of 85 out of 100, and the agency has been labeled a "standard performer" since at least 2003.

"Every year they would come down here and say everything's OK, " Alvarez said last week.

Much of the data used to generate those scores, however, comes from the local agency, not HUD. In Miami-Dade, Bernardi is skeptical -- he accused the agency of using "fuzzy math" in its financial reports and said he was being generous to describe its record-keeping as "suspect."

Moreover, poor scores are not necessary for a takeover, Bernardi said. The housing agency in Beaumont, Texas, had "standard performer" scores before it was taken over in 2000 due to violations of the Fair Housing Act.

In general, HUD administrators waved off comparisons to other cities.

"Every receivership is different, " said HUD Assistant Secretary Orlando Cabrera, the former Miamian who has loomed large in the takeover negotiations.

In Newark, for example, the mayor did not seek re-election, the independent housing authority board resigned and its director "retired, " Cabrera said, drawing attention to his hand-mimed quotes around the term.

In Miami-Dade, housing is overseen by county government -- the commission, which has had the same 13 members since 2005; County Manager George Burgess, appointed in 2002; and Alvarez, elected in 2004 but not given day-to-day control of the government until this year.

That has left Bernardi leery of allowing the agency to reform itself. "Just because you hang out a shingle and say you're under new management doesn't restore credibility, " he said.

Alvarez said his administration has done more than proclaim renewed effort, pointing to a table of specific reform plans with specific deadlines. "We have done a lot of things without HUD's help, " Alvarez said.

He has questioned whether HUD can even provide the quantity and quality of resources that Miami-Dade has assigned to the problems since last year. U.S. Rep. Kendrick Meek, who also opposes the takeover, said in a letter to Alvarez: "There is no reason to believe that HUD will repair the agency as well or any faster than Dade is already doing."

RESOURCES A QUESTION

Finn, the former activist from Newark, said HUD struggles to find strong leaders for takeovers.

"HUD's basic problem is finding an entity to take over local agencies that has a track record of delivering, " he said. "It becomes very hard for HUD to try to step in itself and manage because they usually don't have the needed staff levels."

Bernardi said HUD will use the Miami-Dade agency's existing leadership, plus pull resources from its offices in Miami, Washington and possibly elsewhere.

"You can talk about plans, but they've had plans over the years, and those plans have gone awry, " Bernardi said. "Our concern is with execution and delivery."

Miami Herald writer Logan Jaffe contributed to this report.

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