oversight

Staffing Levels and Salary Costs of the Philadelphia Housing Authority

Published by the Government Accountability Office on 1971-12-03.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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            B-118718
                          C0MPTR0LWR         GENERAL     OF    THE      UNITED      STATES
                                           WASHINGTON.    D.C.       205PB
                      v    ’
            +   *




     B-118718



 4   Dear       Mr.            Chairman:
?-
             This is our report         on staffing   levels    and salary costs
     of the Philadelphia        Housing    Authority.      Our examination     was
     made    in accordance       with your request        of May 27, 1971, and
     subsequent     discussions       with our representatives.

             We did not obtain      written      comments       from    the Depart-
     ment of Housing      and Urban        Development        or the Philadelphia
     Housing    Authority   on the matters          discussed      in this report.
     This fact should     be taken into consideration              in any use made
     of the information     presented.

              We plan to make no further          distribution       of this report
     unless    copies    are specifically    requested,         and then we shall
     make distribution        only after  your agreement           has been obtained
     or public     announcement       has been made          by you concerning      the
     contents    of the report.

             ‘We trust  that the                 information                 furnished        will     serve    the
     purpose    of your request.

                                                                 Sincerely           yours,




                                                                 Comptroller                 General
                                                                 of the United               States

     The Honorable        William    A. Barrett
       Chairman
     Subcommittee        on Housing
     Committee       on Banking     and Currency                                                       a :     ~1 I’   :
     House     of Representatives
I
I
        COMPTROLLER
                  GENERAL'S REPORT                                 STAFFING LEVELS AND SALARY COST OF
    I ' TO THECHAIRMAN,SUBCOMMITTEE                                THE PHILADELPHIA HOUSINGAUTHORITY
        ON HOUSING,GOkh'ITTEE
                            ON                                     Department of Housing and Urban
        BANKINGANDCURRENCY                                         Development B-118718
        HOUSEOF REPRESENTATIVES

      DIGEST
      ---a--

      WHYTHEREVIEWWASMADE

             At the request of the Chairman, Subcommittee on Housing, Committee on
             Banking and Currency, House of Representatives,           the General Accounting
             Office (GAO) reviewed     selected  aspects   of  the  sttaffing,levels    and,."sal-ary                 ,_.
             costs   of the
                         wasPhiladelphia
       I/                                   Housing Authority,     Philadelphia,     Pennsylvania.
             Attention       d'ire-~~~~-.~~~~~~~T~~,~~-"~'~~

                --increases      in the number of Authority               employees,

                --increases      in Authority      salary      costs,

                --analyses      of salaries      and qualifications            of selected   Authority     em-
                    ployees,    and

                --factors      which eventually      may increase          the Authority's     staff     and salary
                   costs.

             GAOdid not obtain written comments from the Department of Housing and
             Urban Development (HUD) or the Authority on the matters in this report.


      FINDINGSANDCONCLUSIONS

             Increase in overall Authotity             stbff
             The Authority's   budgeted staff--actual figures were unavailable--increased
             from 774 in fiscal year 1967 to 1,344 in fiscal year 1972, an increase
             of 570 employees, or about 74 percent; the number of dwelling units under
             its management increased for that period from 13,794 to 20,400, an in-
             crease of 6,606, or about 48 percent.    Most of the increase in staff was
             due to the hiring of more maintenance personnel and security guards. The
             employee growth rate would be slightly   less than the dwelling unit growth
             rate if the security guard increases were eliminated,

             Authority  officials    advised GAO that the increases in staff,  following
             a reorganization     of the Authority  in January 1970, were due to:

                --The need to provide           more social        services.

                --Increased      vandalism.

                --Increased      maintenance of the older               projects.


       Tear Sheet                                              1                       DEC. 3,1971
                                                       I
  --The types and number of units under management. There were a large
     number of units, such as individual  row houses, at scattered sites,          ’       I


     which required more maintenance personnel than the same number of
     units at large projects.   (See pp. 6 to 13.)
                                                                                           I
                                                                                           I

Increase in overall Authoritg salary costs

The Authority's  budgeted salary costs increased from about $4 million   in
fiscal year 1967 to about $10.4 million   in fiscal year 1972, an increase
of $6.4 million,  or 160 percent.

The increased salary costs were attributed        to increases in staff,  wage
increases for maintenance employees, cost-of-living         increases for admin-
istrative  and clerical    employees, reclassification     and new salary plan
for administrative    and clerical   employees, and annual salary step in-
creases for administrative      and clerical  employees.    (See pp. 13 to 16.)

The Authority's salary plan complies with HUD requirements which state
that salary and wage rates be consistent with the compensation practices
                                                                                       I
of other local public bodies.  (See p. 15.)                                            I
                                                                                       I       I


AnaZpis of salaries and qualifications                                                 I



of selected Authority employees                                                        I




As of July 1971 the Authority had 94 employees on its        payroll   who were
receiving $10,000 or more in annual salary.

GAO noted that 13 of these employees did not meet the Authority's    present
education or experience requirements.    They had been hired, however, prior
to the Authority's  adoption, in October 1970, of revised job experience
and education requirements.   After evaluating the employees, Authority
officials  concluded that, on the basis of successful job performances,
they had overcome their education or experience deficiencies.     (See
pp. 17 and 18.)

Of the 94 employees,   17 received starting   salaries from the Authority
which exceeded their   previous non-Authority   salaries by more than
$1,000.

Of the 17 employees, 11 received increases of        less than $2,000. The
Authority's     board chairman informed GAO that,    in his opinion, a raise
of less than $2,000 was a reasonable increase        in obtaining an executive-
type employee. GAOwas informed by Authority          officials   that the case
of each of the six employees who had received        starting   salary increases
of more than $2,000 had to be evaluated on its        own merits and that they
believed that the employees' starting     salaries     and subsequent increases
were justified.      (See pp. 17 to 24.)
I   I




    1          Factors which eventually may increase
    t ’
               Authority’s  staff and saZarg costs

    I          In addition to increasing staff and salary costs, the Authority     has in-
    I
               creased, or is planning to increase, its staff by about 380 employees.
    I
               The major portion of these employees will be Authority    tenants who will
               be trained to work under the Authority's   social services and moderniza-
    I
               tion programs. These programs currently    are funded from sources other
               than housing operations and therefore are not included as part of the
               salary expense in the Authority's  operating budget. Authority     officials
               stated, however, that, if such funding should be discontinued,     they
               planned to retain many of these employees on the Authority's     budgeted
               payroll.   (See pp. 24 and 25.)




          Tear Sheet                              3
                       Contents
                                                         Page
DIGEST                                                    1
CHAPTER
  1'     INTRODUCTION                                     4
             Philadelphia   Housing Authority             4

         INCREASEIN OVERALLPHA STAFF                      6
             Implementation of agreements with
               tenant representatives                    10
            Reorganization of housing management
               department                                10
             Increases in maintenance staff              11
         INCREASEIN OVERALLPHA SAZARYCOSTS               13
            Wage increases for maintenance em-
              ployees                                    13
            Cost-of-living    increases for adminis-
              trative and clerical employees             14
            Position reclassification    and new sal-
              ary plan for administrative    and cler-
              ical employees                             15
            Annual salary step increases for admin-
              istrative    and clerical employees        15
         ANALYSISOF SALARIESAND QUALIFICATIONSOF
         SELECTEDPHA EMPLOYEES                           17
         FACTORSWHICHEVENTUALLY  MAYINCREASEPHA's
         STAFFAND SALARYCOSTS                             24
            Expansion of social services program          24
            Modernization program                         24
APPENDIX
  I      Schedule of selected budgeted salaries   for
           fiscal years 1967 through 1972                 27
                       ABBREVIATIONS

GAO    General Accounting Office
HUD    Department of Housing and Urban Development

PHA    Philadelphia   Housing Authority
PHDC   Philadelphia    Housing Development Corporation
                      ,>
vCOMPTROLLERGENERAL'S
                    REPORT                             STAFFING LEVELS AND SALARY COST OF
 TO THE CHAIRMAN,
                SUBCOM74ITTEE                          THE PHILADELPHIA
                                                                      HOUSINGAUTHORITY
 ONHOUSING,COMMITTEEON                                 Department of Housing and Urban
 BANKINGANDCURRENCY                                    Development B-118718
 HOUSEOF REPRESENTATIVES

DIGEST
---_--

WHYTHEREVIEWWASMADE

    At the request of the Chairman, Subcommittee on Housing, Committee on
    Banking and Currency, House of Representatives,     the General Accounting
    Office (GAO) reviewed selected aspects of the staffing       levels and salary
    costs of the Philadelphia  Housing Authority,   Philadelphia,     Pennsylvania.
    Attention was directed especially  to

      --increases     in the number of Authority              employees,

      --increases     in Authority      salary      costs3

      --analyses     of salaries      and qualifications          of selected    Authority     em-
         ployees,    and
      --factors     which eventually      may increase         the Authority's     staff     and salary
         costs *

    GAOdid not obtain written comments from the Department of Housing and
    Urban Development (HUD) or the Authority on the matters in this report.


FINDINGSANDCONCLUSIONS
    Increase in overall Authority           staff
    The Authority's   budgeted staff--actual figures were unavailable--increased
    from 774 in fiscal year 1967 to 1,344 in fiscal year 1972, an increase
    of 570 employees, or about 74 percent; the number of dwelling units under
    its management increased for that period from 13,794 to 20,400, an in-
    crease of 6,606, or about 48 percent.    Most of the increase in staff was
    due to the hiring of more maintenance perso nel and security guards. The
    employee growth rate would be slightly   less than the dwelling unit growth
    rate if the security guard increases were eliminated.

    Authority   officials    advised GAO that the increases in staff,   following
    a reorganization      of the Authority  in January ‘8970, were due to:

      --The need to provide          more social      services.



              ased maintenance          f the older      pr
  --The types and number of units under management. There were a large
     number &of units, such as individual  row houses, at scattered sites,
     which required more maintenance personnel than the same number of
     units at large projects.    (See pp. 6 to 13.)

Increase   in overall   Authority   saihrg     costs

The Authority's  budgeted salary costs increased from about $4 million   in
fiscal year 1967 to about $10.4 million   in fiscal year 1972, an increase
of $6.4 million,  or 160 percent.

The increased salary costs were attributed        to increases in staff, wage
increases for maintenance employees, cost-of-living         increases for admin-
istrative  and clerical    employees, reclassification     and new salary plan
for administrative    and clerical   employees, and annual salary step in-
creases for administrative      and clerical  employees.    (See pp. 13 to 16.)

The Authority's salary plan complies with HUD requirements which state
that salary and wage rates be consistent with the compensation practices
of other local public bodies.  (See p. 15.)

Analysis of salaries     and quaZification.s
of seZected Authority     employees

As of July 1971 the Authority had 94 employees on its          payroll   who were
receiving $10,000 or more in annual salary.

GAO noted that 13 of these employees did not meet the Authority's    present
education or experience requirements.    They had been hired, however, prior
to the Authority's  adoption, in October 1970, of revised job experience
and education requirements.   After evaluating the employees, Authority
officials  concluded that,on  the basis of successful job performances,
they had overcome their education or experience deficiencies.     (See
pp. 17 and 18.)

Of the 94 employees, I7 received starting   salaries from the Authority
which exceeded their previous non-Authority   salaries by more than
$1,000.

Of the 17 employees, 11 received increases of          less than $2,000.     The
Authority's     board chairman informed GAO that,      in his opinion, a raise
of less than $2,000 was a reasonable increase          in obtaining an executive-
type employee. GAOwas informed by Authority            officials   that the case
of each of the six employees who had received          starting   salary increases
of more than $2,000 had to be evaluated on its          own merits and that they
believed that the employees' starting     salaries      and subsequent increases
were justified.      (See  pp. 17 to 24.)




                                         2
Factors which even-tuaZZy may &crease
Authority’s  stuff and salary costs

In addition to increasing staff and salary costs, the Authority       has in-
creased, or is planning to increase, its staff by about 380 employees.
The major portion of these employees will be Authority     tenants who will
be trained to work under the Authority's    social services and modernima-
tion programs. These programs,currently     are funded from sources other
than housing operations and therefore are not included as part of the
salary expense in the Authority's  operating budget.     Authority   officials
stated, however, that, if such funding should be discontinued,       they
planned to retain many of these employees on the Authority's       budgeted
payroll.   (See pp- 24 and 25.)
                                CHAPTER1

                              INTRODUCTION

       The Housing Act of 1937, as amended (42 U,S,C, 1401),
authorizes   the Department of Housing and Urban Development
to conduct a program of housing assistance       under which lo-
cal governments establish      independent legal entities--known
as local housing authorities--to       develop, own, and operate
low-rent   public housing projects,

     Our review was performed primarily         at the office    of
the Philadelphia    Housing Authority     (PHA), Philadelphia,
Pennsylvania,    We examined documents concerning staff,           sal-
ary costs, and number of dwelling units for fiscal           years
1967 through 1972. Discussions were held with officials              of
HUD's regional   office   in Philadelphia    and with officials      of
PM.

PHILADELPHIA HOUSING AUTHORITY

      PHA was organized in 1937 for the purpose of providing
decent, safe, and sanitary       housing for families     of low-
income in Philadelphia.       HUD provides financial      and techni-
cal assistance    to PHA for the development of low-rent         public
housing projects.     Financial    assistance   is furnished   by HUD
in the form of loans for development and in the form of
annual contributions     (subsidies)    made pursuant to contracts
with PHA.

        PHA is governed by a board of directors         which is com-
posed of five members. Two are appointed by the mayor of
Philadelphia,        two are appointed by the city controller,          and
a fifth    member is appointed by these four.          The members
elect one of the five as chairman of the board.              The term
of office       of each member is 5 years, and each is to hold
office    until    his successor is.appointed,       The management
operations       of PH.A are under the supervision     and direction
of a deputy executive        director   for operations    who reports
to the board chairman.          The position   of executive   director,
which is included in PIG's operating           budget, is vacant.

       PHA officials    advised us that,     as a result  of a grand
jury   investigation    of Philadelphia's     program for acquiring

                                     4
housing on scattered   sites for low-income families,      the for-
mer board chairman of PHA was dismissed and was replaced by
the current chairman,     The new chairman appointed in July
1969 was given a mandate by the mayor of Philadelphia         to
clean up the housing situation     in Philadelphia    and to re-
organize PHA into a more efficient     operating   unit.   During
November 1969 the new chairman appointed a new deputy exec-
utive director   for operations  and a committee to analyze
and reorganize   PHA.

       PHA started    its reorganization      during January 1970.
New executive     personnel were hired,        the management of the
housing units was reorganized           into regions,    and additional
personnel were hired to perform the maintenance and security
functions.      These changes in organization          were brought about
by a need to (1) develop a consistent             personnel policy
whereby jobs and salaries          could be more effectively       admin-
istered,     (2) implement agreements reached with tenant rep-
resentatives,      (3) restructure      its housing management to
gain more control       over its operations,       (4) keep abreast of
increased maintenance needs, and (5) provide more social
services    to its tenants.

       During August 1970 PHA's Development Division         was com-
bined with the Philadelphia          Housing Development Corporation
(PHDC) to coordinate       functions     of the two agencies that
related    to the acquisition,       rehabilitation,  and construc-
tion of low-rent    housing.

       PHDC is a quasi-public    nonprofit       agency, chartered         in
1965 for the acquisition,     rehabilitation,          and construction
of housing for sale to low-      and   moderate-income         families.
It is sponsored by the city of Philadelphia              and receives
its capital    funds for acquisition,      rehabilitation,         and con-
struction   from the city through a $2 million             revolving     fund,
Operating funds are provided by the Office of Economic Qp-
portunity.     The president  of PHDC is also the board chair-
man of PHA and the deputy managing director              for housing of
the city of Philadelphia.       The executive-vice          president      of
PHDC is also PHA's deputy executive           director     for develop-
ment, and 50 percent of his salary is paid by PHA.




                                      5
                                           CHAPTER
                                                 2

                        INCREASEIN OVERALLPHA STAFF
      As of April 1, 1971, PHAwas responsible for the man-
agement of 20,400 dwelling units which could accommodate
about 107,000 tenants.   PHAhad a total staff of 1,274 em-
ployees on July 23, 1971, to maintain and administer its
various programs.
      Wewere unable to determine PHA's actual prior staffing
levels because PJU staffing records were updated daily and
showed the actual numbers of employees that were currently
employed but did not show past staffing levels.   As a re-
sult, our analysis of staffing levels is based on the staff-
ing levels proposed by PHAin its operating budgets for fis-
cal years 1967 through 1972. PHA's fiscal year begins on
April 1, and its operating budget is submitted to HUDfor
approval during November of the year prior to the start of
the fiscal year. PHA officials   advised us that the informa-
tion shown in the budgets approximated actual staffing lev-
els.
      A comparison of the operating budget for fiscal year
1967 with the operating budget for fiscal year 1972 showed
a PHA staff increase of 570 employees, or about 74 percent.
Of the total increase of 570 employees, 520, or about 91.2
percent, were budgeted to carry out housing management,
maintenance, and security functions.   These increases, ac-
cording to functions, are shown below.
                                                                             Overall   increase
                                     Total employees                          of employees--
                                     in fiscal year                       fiscal   years 1967-72
     Function         1967
                      --I_--     1968 1969 1970      1971         -1972      Total       Percent
Central office          44          49     50      51      62       74        30           68.2
Housing management     156         163    185     193     232      244        88           56.4
Development             27          35     37      57      46       47        20           74.0
Maintenance            471        495     548     605     656      685       214           45,5
Security                68          79     88     113     139      286       218          320.6
Social services        m8         - 12     11
                                         --_I_-    11      I"2       8
    Total               774
                       -w-        833     919 1,030     1,147    1,344a      570            73.6
                                         ------_I-
aAs of August   20, 1971,      HUD had not approved     PHA's operating   budget   for   fiscal
 year 1972.




                                                  6
        A further         analysis         of staffing            levels      indicates       that
PHA supervisory-technical                    employees increased at about the
same overall        rate     as nonsupervisory                    personnel,        as shown be-
low.
                                                                                  Overall     increase
                               Total employees                                      of employees--
   Employee                    in fiscal    year                               fiscal     years 1967-72
   category       1967
                  ----___ 1968   1969    1970    1971                -1972        Total         Percent

Executive            16       16      15        17           23         20            4            25.0
Supervisory-
  technical           97      110     125      124         136         173           76            78.3
Nonsupervisory      v661     -707    ---
                                      779      889         988      1,151          490             74.2

     Total          774      833     Jag     1,030
                                             ~-___       1,147      1,344a         570             73.6

aAs of August 20, 1971,       HUD had not      approved          PHA's operating    budget   for      fis-
 cal year 1972.



     PM's        operating budgets showed the following                                   increases
in dwelling       units under management.

                                                   Annual                                 Percent of
                            Dwelling              increases                                increase
                           units under          in dwelling             Cumulative            from
  Fiscal year              management               units                increases        base year
1967 (base year)     13,794
1968                 14,017           223          223        1.6
1969                 15,578         1,561        1,784       12,9
1970                 16,611         1,033        2,817       20.4
1971                 20,469         3,858        6,675       4804
1972                 20,400a          -69        6,606       47.9
a
  During fiscal year 1972 the number of units under management de-
  creased because the number of units dropped from the leasing
  program exceeded the number of new units coming under management.


        PI&I's operating   budgets show an increase of 6,606
dwelling units under managaent        from fiscal    year 1967
through fiscal       year 1972 (about 48 percent)    and an increase
of 570 employees (about 74 percent).         It   should be noted
that 218 of the 570 employees were budgeted to perform se-
curity    services that previously    had been carried    out by a
private     security   company or by other PH.A employees.     If this
group is excluded, the net increase was about 46 percent

                                                     7
(increase of 352 employees) compared with the 48-percent
increase in dwelling units under management.
      The ratio of employees to dwelling units is not neces-
sarily a good indicator of how efficiently      PT3Ais operating,
because the number of employees should not necessarily in-
crease in direct proportion to the increase in the number
of dwelling units being managed, even though there may be a
strong relationship.      For example, about 4,900 of the 6,606
increase in dwelling units under managementwere at
scattered sites-- such as individual row houses--which, ac-
cording to PHA officials,     were much more difficult  to main-
tain and manage than the same number of units congregated in
a housing project and which therefore required a larger
maintenance and management staff,,
       We discussed the PHAoperation with HUDregional office
officials    and requested managementdata, such as ratios of
work load to number of employees, that HUDwould use in de-
termining a proper staffing level.    HUDofficials   stated
that the methods previously utilized to determine proper
staffing levels were obsolete because the criteria    on which
they were based no longer applied--particularly    in the case
of PHA because it was the only public housing authority
with a large scattered-sites   housing program. These offi-
cials also advised us that HUD's recently completed manage-
ment study of PHA did not mention staffing levels in the re-
port because no serious deficiencies had been noted. They
added, however, that this should not be interpreted to mean
that PHAwas operating efficiently.
      We were advised by PHA officials  that, prior to October
1970, there was no formal personnel system at PHA since
 (1) personnel were not competitively hired, (2) there were
no formal personnel processes9 and (3) there were no estab-
lished channels for recruiting   or promoting personnel.  In
January 1970 an additional personnel officer was hired to
develop a personnel system patterned after the city of
Philadelphials.   This revised personnel system was developed
and the PHA board of directors approved it in October 1970,
      As part of the revised system, PHAadopted a personnel
policy whereby, in filling  job vacancies, tenants and PIiA
employees were given preference.   PHAofficials   stated that

                               8
this policy            ted ts sonform with the requirements of
the Housing            968, as ame         ich stated that pub-
lis housin             ies were re                    p%oyment
opportunities   for tenets whenever fe


                                                intends to es-
                                                   emem3 sscial

                                                       s are es-

                 tion successfully   as
     We analyzed certain   factors whish contributed   to the
increase in PH,A~~staff,   as cited below,




                                9
                     .I




IMPLEMENTATION
             ,OFAGREEMENTS
WITH TENANTREPRESENTATIVES

      Tenant councils in two public housing projects in PhiL
adelphia, Richard Allen Homes and Tasker Homes, filed a pe-
tition on October 3, 1968, with the Secretary of HUD,which
requested that approval be withheld on PHA's proposed mod-
ernization program because public housing tenants had not
been accorded their rights under the Housing Act of 1968,
as amended. The act provides for participation    by public
housing tenants in the design and implementation of the mod-
ernization program and in the continued development of pub-
lic housing policies and practices.
      As a result of this petition,  HUDdirected PHA to ne-
gotiate with the tenant representatives to work out an op-
erating agreement acceptable to HUD, the tenants, and PHA,
A memorandumof understanding was approved by all parties
in March 1969, and a tenant services office was established
to act as an intermediary between PHA and the tenants.
      As part of the memorandumof understanding between PHA
and the tenants, PHA agreed to hire a sufficient      number of
security guards,    as soon as funds  permitted,  to provide
around-the-clock security forces.      In the fiscal year 1972
budget, PHAproposed to hire 144 additional security guards,
one director of security, and two supervisory guards at a
total cost of about $1 million.      Someof this cost, accord-
ing to PHA officials,    would be offset as a result of cancel-
ing private guard service contracts that were costing about
$23,000 a month during 1971, or about $276,000 a year.

       In addition to the proposed increase of 147 security
positions shown in the 1972 budget, PHA increased its secu-
rity forces by 71 employees during fiscal years 1967 through
1971. PHA officials    advised us that these increases were
made to meet security needs created by the growing crime
rate experienced in the projects,
REORGANIZATION
             OF HOUSINGMANAGEMENT
                               DEPARTMENT

      We were advised by officials of PHA that its housing
management department remained substantially  unchanged dur-
ing fiscal years 1967 through 1970. Each housing project

                              10
operated as an independent unit and reported directly to
PHA's central office for direction.   During calendar year
1970 t'he housing managementdepartment was reorganized into
four regions and three regional managers were appointed. A
fourth regional manager was appointed in July 1971.
      The deputy executive director for operations advised
us that, under the reorganization,     the regional housing
manager was given the authority to.make day-to-day decisions
within his region and that the housing management department
would be able to provide a more flexible response to emer-
gency situations.    (Prior to the reorganization all matters
had to be referred to the central office for decision.)
PHA officials   stated that, in addition to the staffing in-
creases made to implement the reorganization,      the housing
management staff had been increased gradually over the past
5 years to provide staff to operate the new units acquired
by PHA, Since 1967 PJU has increased its budget for hous-
ing managers by 19 positions and its budget for housing
managementclerical     staff by 63 positions.
INCREASESIN MAINTENANCE
                      STAFF
      Since 1967 PHA 'has increased its budget for supervisory
maintenance staff by 17 employees, administrative      mainte-
nance staff by nine employees, and labor force by 188 em-
ployees-- a total increase of 214 employees, PHA attributes
this increase primarily to the rising rate of vandalism,
especially at the scattered-sites   units.  PI-M officials    have
stated that the second factor which has increased the need
for maintenance employees is the increasing age of the
projects.   PHA engages in only limited preventative mainte-
nance because its employees are kept busy meeting emergency
maintenance situations.


      PHA officials told us that the increases in staffing
levels subsequent to January 1970 also were due to (1) the
need to provide more social services, (2) increased vandal-
ism, (3) increased maintenance for the older projects, and
(4) the type and number of scattered-site   units coming into
management,


                               311
12
                          CHAPTER3

           INCREASEIN OVERALLPHA SALARYCOSTS
     Cur review of PM's operating budgets for fiscal years
1967 through 1972 revealed the following increases in sal-
ary costs.
                                                       Percent
                                                          of
                                Annual                increase
                    Total      increases   Cumula-      from
                    salary     in salary   tive in-     base
  Fiscal year       costs         costs    creases      year
1967 (base year) $ 3,997,792 $         $
1968               4,785,003   7875211    787,211        19.7
1969               5,208,273   423,270 1,210,481         30.3
1970               6,425,773 1,217,500 2,427,981         60.7
1971               7,620,534 1,194,761 3,622,742         90.6
1972              10,416,983 2,796,449 6,419,191        160.6
       Cur analysis of the increased salary costs showed sev-
eral factors which had a direct effect on PHA's total salary
costs. A primary factor was the overall increase in staff-
ing levels; generally, the largest percentage increase in
staffing was related to maintenance, security, and housing
management positions as opposed to executive-type positions,
       Other factors resulting in increased PHA salary costs
include wage increases for maintenance employees, cost-of-
living increases for administrative    and clerical employees,
reclassification    and new salary plan for administrative and
clerical employees, and salary step increases for adminis-
trative and clerical employees, These matters are discussed
in the following sections.
WAGEINCREASESFORMAINTENANCE
                          EMPLOYEES
      During the period April 1, 1966, through April 1, 1971,
wages for PHA maintenance personnel were increased on five
occasions. The wage increases were based on wage rate de-
terminations made by BUDand accepted by PHA and the Build-
ing and Construction Trades Council of Philadelphia.

                              13
       We were advised by PHA officials that the wage in-
creases for maintenance employees during fiscal years 1968
through 1971 amounted to $1,542,613. We did not verify the
validity   of these increased costs. A test examination of
the yearly wage rates for positions included in the mainte-
nance sategory (maintenance mechanics, maintenance mechanic
aides, engineers, painters, firemen9 and laborer-janitors),
however, indicated that salaries for each employee in these
positions increased between $1,500 and $2,000 from April 1,
1968, through April 1, 1971.
COST-OF-LIVINGINCREASESFOR
ADMINISTRATIVEAND CLERICALEMPIDYEES

     Effective January 1, 1968, and April 1, 1969, the PHA
board of directors approved cost-of-living  salary increases
of 8 percent and 6 percent for PHA administrative  and cler-
ical employees, respectively.
      PHA officials estimated that the cost-of-living     salary
increases effective January 1, 1968, and April 1, 1969,
amounted to $134,500 and $99,500, respectively.       We did not
verify the validity  of these increased costs.




                                14
POSITION RECLASSIFICATION AND
NEW SALARY PLAN FOR
AlMINISTRATIVE AND CLERICAL EMPLOYEES
       An   initial  action of PHA's new administration     was a
position  reclassification       and salary study for the primary
purpose of restructuring        PHA's salary plan for administra-
tive and clerical       employees so that it would be more in line
with the city of Philadelphia's         salary plan for its own em-
ployees.   As a result      of this study, PHA adopted the city's
salary plan and the rates of pay in effect          as of January 1,
1970.

      The new salary plan became effective         on July 1, 1970,
and PHA officials     estimated  that the resulting       increases
in salary costs would amount to about $400,000 annually.
The new salary plan affected       all but 1'2 percent of PHA's
administrative    and clerical   employees.      The salaries      of the
employees not affected      were already comparable to, or more
than, salaries    paid to city employees.        PHA officials       stated
that the lower paid workers--such       as clerks,     clerk-typists,
and cashiers --received     the most significant     increases.

       The increases in annual salaries would have been much
greater if PHA had kept pace with the salary increases
granted to city employees.    After PHA adopted the city's
plan, city employees received two salary increases,     totaling
about $1,400 for each employee, which PHA did not grant to
its employees.

     We believe that the new salary plan approved by the
PHA board of directors  is in compliance with HUD's require-
ments which state that

       glsalary and wage rates shall be consistent      with
       the compensation practices     of other public bod-
       ies in the locality    for positions    similar in
       responsibility   and required    competence."

ANNUAL SAMRY STEP INCREASES FOR
AIMINISTRATIVE AND CLERICAL EMPLOYEES

       From year to year there is an increase           in total salaries
that   results  from in-grade step increases.           Under the salary


                                      15
plan approved by the PHA board of directors      in September
1970 and made retroactive     to July 1, 1970, PHA administra-
tive and clerical   positions   were classified    into 39 grades.
Within each grade there are five longevity      steps which al-
low employees to receive annual salary increments       ranging
from $145 to $1,258 (3.1 to 4.3 percent).       When an employee
reaches the fifth   salary step within his grade, he cannot
obtain a salary increase unless his job is reclassified,
he is promoted, or a general salary increase is given.

      Under the pay plan in effect    prior to July 1, 1970,
PWA administrative   and clerical   positions      were classified
into 24 grades having nine longevity        steps,    Employees in
the first  nine grades were eligible      for salary increases
every 12 months, whereas employees ingrades          10 through 24
had to be in grade 18 months,     The salary increases ranged
from $125 to $730 (2.5 to 3.1 percent).

      We were unable to determine the specific  total amount
of increased salary costs that resulted  from these salary
step increases because the records needed to make a reliable
estimate were not available.




                                 16
                          CHAPTER
                                4

          ANAI;YSISOF SALARIESANDQUALIFICATIONS
                  OF SETLECTED
                            PHA EMPLOYEES
      We reviewed the personnel records of the 94 PHA employ-
ees who, at the time of our review, were receiving $10,000
or more annually, to determine whether the employees met the
experience and education requirements of the positions to
which they had been assigned. Our review showed that 57 of
these employees began working for PHA prior to April 1,
1966; that 13 came to PHA between April 1966 and July 1969,
the date that the current PHA board chairman was appointed;
and that the remaining 24 began working between August 1969
and January 1971.
     We compared the education and experience data that the
employees gave on their PHA employment applications with
the experience and education requirements cited on the pres-
ent PHA job descriptions and found that 13 employees did
not meet PHA's education or experience requirements,   Six
of these employees started with PHA prior to April 1, 1966;
three of the employees came to PHAbetween April 1, 1966,
and July 1969; and the remaining four started after July
1969. In all instances the employees started their employ-
ment prior to the PHA board's approval, in October 1970, of
the revised PHA job experience and education requirements.
       PHA officials    informed us that they were aware that
some of the employees did not meet the requirements developed
under the revised personnel system, After evaluating the
performance of each employee, however, they concluded that,
by virtue of the employees' having performed their jobs suc-
cessfully,    they had overcome their education or experience
deficiencies.       They further stated that these employees were
not eligible for promotion or transfer to another position
unless they could meet the stated requirements of that posi-
tion.
     We compared the starting PHA salaries of the 94 employ-
ees whose fiscal year 1972 annual salaries were budgeted in
excess of $10,000 with the salaries that they had received


                              17
from their prior XILXI-PHA positions.   We found 17 instances
 in which PHAps starting salaries exceeded the salaries re-
ceived by these individuals from their previous non-PHA
jobs by more than $l,QOO--which we considered to be signifi-
cant increases.    Im these instances, 11 increases were be-
            00 and $1,999 and six were between $2,000 and
$3,800,    The PHA board chairman advised us that in his opin-
 *
eon,  a raise of less than $ 000 was a reasonable increase
in obtaining an execut.ive-t    e employee. With regard to
the six employees that received raises in excess of $2,000,
we noted that:
     Employee A
                                loyee was hired by PHA as a
                                nt at a starting salary of
                                ts PHA, this employee was a
                                rivate architectural  firm
     and received an a~~~~.a'll
                             salary of $7,800. Me therefore
     realized a salary increase sf $2,385.
     On April I, 1970, he received a longevity step increase
     of $6KL, whicth brought his annual salary to $10,796.
     On Ju'Hy IL, 1970, as ?, result gaf l?HA"s new personnel
     reclassification   system, he was reclassified    as an ar-
     chitect 1x1 and received an increase of $2,472 which
     brought his a al salary %s SL3,275,
         July 12, 1971, he was given another longevity step
     increase of $543$ which brought salary to $13,818, his
     present i+klary,
        en we reviewed his education and experience require-
     ments, we noted that, at the time he was reclassified
     under PHA!5 new erson&l reclassificati        Ian, he   '
     was about 1 year short of PH #s experience requirement.
     He nevertheless was given a raise ($2,479) and a higher
     classification.
                y executive director for operations told 'us
   ' that this employee had been hired at a salary level
     commensurate with the duties that he was expected to
     perform. He, further stated that, when this employee
was reclassified,  his duties were equivalent to the
duties performed by architects on the city of Philadel-
phia's payroll.   PHA believed that his starting salary
and all his increases were justified,   even though he
was 1 year short of the experience requirement, because
he had demonstrated by performance that he was able to
perform the duties expected of him,
Employee B
On January 5, 1970, this employee was hired at a start-
ing salary of $13,600 for the position of assistant
director of personnel,   Prior to becoming employed b>i
PHA, he was a personnel officer I with the city of
Philadelphia.  As a result of becoming employed by PHA,
he realized a salary increase of $2,600,
On July 1, 1970, he was reclassified as a personnel
officer III at an annual salary of $14,104. This in-
creased his salary by $504 a year. This employee met
PHA's experience and/or educational requirements,
On July 12, 1971, he received a longevity step increase
of $511, which brought his annual salary to $14,615.
The deputy executive director for operations told us
that, at the time this employee was hired by PHA, he
was in the process of being promoted by his former em-
ployer and would have received an annual increase of
about $1,000. In view of this anticipated promotion
and the fact that PHA needed an employee who had expe-
rience in reorganizing a personnel system to conform
with the city's,  PHA officials believed that a $2,600
raise was warranted, as were the additional increases
he received.
The deputy executive director for operations further
stated that, if this employee had stayed with the city,
his current annual salary would be $14,020.
OmAugust '$7, 1970, this employee was hired as an ad-
ministrative  intern at an annual salary of $9,205.
Prior %QCQ~~rn~to P      this employee was employed as
an instructor with the Philadelphia Board of Education
a% an annua'P rate of $5,980 a year. This increased
kds salary by $3,225 a year.
On Apri% 12, 197P, he was promoted to administrative
officer at an annuaYl salary of $10,883, This promo-
tion in?reased his salary by $1,678, At the time of
his proma%isn,                     nths of job-related
experience R P           escription required 2 years'
exgeriemce.
The de~~%y ecutive director for operations told us
that %hiS     loyee*s former job was a student-type job
which he held              ing graduate school and was,
%~~~e~~~e~not a valid Q0b for comparison purposes.
              further stated that, although this TV-
p%syee dfd me%have %he re ired 2 years' experience
                      ornotion, he believed that the em-
                      ree was an acceptable substitute
fsr his lack of experiemce.


         loyee was hired on J ary 5, 1970, as the
           remta% and occupancy, at an a       salary of
            Prior to becomi eqdoyed by        ) he was an
assiseant t %he director     f relocation services with
              Bhibadelphia at an annu
             y becoming employed with     ) he realized a
salary increase sf $3,320 a year.
         er 5, 1970, he was promoted to director of
         ered-sites hous      program at an     al salary
                 is imcrease his salary by $1,364.
                             erience and/or educatieanal
requirements.
PHA's deputy executive director for operations told us
that this employee was hired on the basis of the PHA
board chairman's opinion that he was very able to per-
form his job. He also stated that this employee was
hired at a salary lower than that of his predecessor,
We noted, however, that the highest salary ever paid
by PHA for the position of chief of rental and occu-
pancy was $13,496 in fiscal year 1971. This salary
was $104 less than this employee's starting salary.

Employee E
This employee was hired as deputy executive director
for operations on December 8, 1969, at an annual sal-
ary of $19,982. Prior to coming to PI-IA, he was hous-
ing operations coordinator for the city of Philadel-
phia at an annual salary of $16,374. As a result of
becoming employed by PHA, he realized a salary in-
crease of $3,608.
On July 1, 1970, as a result of PHA's new personnel
reclassification  plan, this employee received a salary
increase of $582.
On October 19, 1970, this employee received another
salary increase of $1,414 and on July 12, 1971, re-
ceived a fourth salary increase of $935 as a longevity
salary increase. His present salary is $22,913. This
employee met PHA's experience and/or educational re-
quirements.
The employee told us that, a few months after leaving
the city's employ, his former position was reclassi-
fied and that his salary was increased by about
$1,000. He further stated that the city's salary for
his former job was currently about $20,554.
The PHA board chairman advised us that, when he hired
the employee, he was very familiar with his abilities--
this employee previously had worked for the PHA board
chairman in an agency of the city--and that the salary
increase of $3,600 was warranted. He also said that,
as board chairman, he was instrumental in having this


                        21
employee!'s salary increased by $1,414 in October 1970
because he felt that this employee was underpaid.
Employee F
   is employee was hired on January 5, 1970, as the
tenant services officer at an annual salary of
Prior to becoming      Poyed by WA, this indivi
been employed by the city of Philadelphia as a commu-
nity worker at an annual salary of $9,815. As a result
of becoming employed by H-IA, this employee realized an
annual salary increase of $3,785,
 n Ju'hy 1, 1970, as a result of PHA's new personnel re-
classification  plan, this employee was given a $492 in-
crease which raised his salary to $14,092.
On July 12, 1971, this employee was given a longevity
step increase of $579, raising his salary to its pres-
ent level of $14,
               cutive director for operations and the
                advised us that, when this employee was
hired, he was in the process of being promoted to the
position of co~~~ty    services officer by his former
           If the employee had accepted the promotion,
           aecutive director for operations estimated
             1oyee"s current salary would be $14,531.
They advised us also that, through a long professional
association with this employee--this employee previ-
cmsly worked for the boar chairman--they were very
   iliar with the employee's abilities     to carry out
     duties of the position for which he was hired,
  erefore they believed that this employee's starting
               ay increases were justified  on the basis of
                current performance. This employee met
           erience and/or educational req-Wxments,


A comparison of the salaries shown in the fiscal year
1972 budget with the salaries budgeted in the preceding


                          22
5 years for selected positions,     ikluding   the deputy
executive  directors for operations     and development and
department heads, appears in the appendix.
                         CHAPTER
                               5

           FACTORS
                 WJXtCH
                      EVFXI'UALLYMAYINCREASE
               PHA's STAFFAND SALARYCOSTS
      In addition to noting the increased staff and salary
costs discussed in previous chapters, we noted that PHA had
increased, and was planning to further increase, its staff
by about 380 employees. PHA anticipates that most of these
employees will be PHA tenants who will be trained to work
under PHA's social services and modernization programs,
which are funded from sources other than housing operations.
     The salaries for these employees are being paid from
funds received from the HUDModernization Program, the
Model Cities Program, and the Pennsylvania Department of
Welfare.
EXPANSION
        OF SOCIAL SERVICESPROGRAM
       On July 1, 1971, PHA signed a l-year contract with the
Department of Welfare, Commonwealthof Pennsylvania, to
receive $2,298,556 in health, education, and welfare funds
to.expand the social services to its tenants. As a result
of this contract, PHAwill increase its social services
staff by about 262 employees, PHA anticipates that many of
its tenants can be hired and trained to fill    these new
positions.    Since the funds to pay these employees will not
come from operations, this increase will not be shown in
the operating budget. PHA officials     advised us that they
believed the State would renew this program each year.
Should funds not become available, however, PHAwould have
to reduce this program to a level which could be funded
from operating funds.
MODERNIZATION
            PROGRAM
     During October 1970 PHA launched a modernization pro-
gram to rehabilitate 2,934 units over an 18-month period in
the Richard Allen, the James Weldon Johnson, and Tasker
Homespublic housing projects.    This program is funded by
HUD.


                              24
     Under this program about 100 tenants are to be hired
to participate  in the rehabilitation  work. As of May 7,
1971, PHA informed us that it had about 115 trainees of
whomabout 110 were tenants participating    in the moderniza-
tion program,
      Cur review showed that, during the period October 9,
1970, through June 25, 1971, PHA had incurred salary costs
of about $356,000 for individuals working on the moderniza-
tion program. PHA officials   have advised us that the sala-
ries for the modernization trainees are being funded
through a &de1 Cities grant which was awarded to PHA
through the city of Philadelphia.   These officials also
stated that PHA intended to retain the modernization train-
ees as employees on their payroll at the completion of the
modernization program.




                             25