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A Resolution of the City Council of the City of Saratoga Springs, NY WHEREAS, the Saratoga Springs Housing Authority (SSHA)

was created in 1951 when the NY State legislature enacted Chapter 331 of the" Laws of 1951 (the enactment is preserved in section 450 of the Public Housing Law) and chartered under State Law in 1953; and WHEREAS, pursuant to New York State (NYS) Public Housing Law, Article 3, Section 30, the SSHA is governed by a seven member Board, of which five members are appointed by the Citys Mayor and two are elected by SSHA tenants; and WHEREAS, in its Mission Statement, SSHA states The Saratoga Springs Housing Authority (SSHA), under the auspices of the Mayor of the City of Saratoga Springs, is a federally subsidized government agency founded in the early 1950s for the purpose of providing housing to persons of low and moderate income. . . . The mission of the SSHA is to assist low and modest income individuals and families by providing opportunities for safe, decent, and affordable housing. The SSHA is committed to operating in an efficient, economical and ethical manner as it provides resources for its residents and as they strive to achieve social and economic opportunities in order to improve their quality of life. (Personnel Policies & Procedures Handbook for the Saratoga Springs Housing Authority, Revision 3 Dated 12/06; see also Saratoga Springs Housing Authority Board of Commissioners Bylaws, Revision 4 Dated 7/10); and WHEREAS, the City of Saratoga Springs (City) and SSHA share the ideals of bringing safe, affordable housing options to citizens; and WHEREAS, on or about September 2011 it was brought to the SSHAs attention that the Stonequist apartments (managed by SSHA and located at 1 S Federal St Saratoga Springs, NY) had a bed bug infestation. The SSHA response to this infestation brought tenant and public outcry, media attention, and concerns were ultimately brought to the City Council (Council) on numerous occasions from 2011 through 2012; and WHEREAS, throughout this time period, numerous other SSHA issues were brought to the Council, including but not limited to excessive amounts spent on travel, training, and conferences, personal use of SSHA vehicles, the formal and financial inter-relationship between SSHA and the Affordable Housing Group; and the failure per NYS Public Housing Law Article 3, Section 32 to obtain Council approval of compensation since the year 2000; and WHEREAS, throughout this time period, it was also brought to the Citys attention that the executive director of the SSHA received annual compensation in an amount exceeding $150,000 under rolling multi-year contract that was improved from $78,874 in 2006 to $151,956 by 2012. These amounts are greater than other Capital Region public housing authority directors responsible for considerably more units, including both Schenectady and Albany; and WHEREAS, the Council made numerous requests for information, updates, reports, and action regarding these matters. SSHA was a subject of discussion at no fewer than sixteen 2012 Council meetings, including an SSHA workshop hosted by the Commissioner of Accounts on January 31, 2012. SSHA board members were invited to speak with the Council on that date. Three attended in person, and one attended by way of video conference. The current SSHA Chair, Eric Weller, was unable to be at the workshop, but attended the subsequent February 7, 2012 Council meeting by way of video conference; and

WHEREAS, the Council received inadequate, incomplete, or inappropriate responses to its requests for information, updates, reports, and action regarding the aforementioned matters; and WHEREAS, on or about early February 2012, the Mayor requested that the NYS Office of the State Comptroller conduct an audit of the SSHA. This request was granted; and WHEREAS, on or about May 17, 2012 the Commissioner of Finance delivered to the SSHA Board a Memorandum (Memo), approved unanimously by Council on May 15, 2012, regarding Compliance and Communication: Article 3, Section 32, Saratoga Springs Housing Authority, therein requesting that SSHA bring forth to the City for approval information regarding all employee compensation from May 2000 through June 2012 and recommending regular communication between the Council and the SSHA; and WHEREAS, in a letter dated June 21, 2012 signed by Eric Weller, SSHA Board Chair, the SSHA defended its actions on all counts, addressing 1) SSHAs response to the discovery of bed bugs at Stonequist Apartments; 2) The contract, salary and compensation for the Executive Director; 3) SSHAs Performance Rating by the Federal Department of Housing and Urban Development; 4) Tenant Leases; 5) The relationship between SSHA and the Affordable Housing group-both formal and financial; and 6) What may be fairly concluded at this point regarding the responsibility of due diligence that the Board of Directors bears for the conduct of the operations of the SSHA. SSHA further stated that until the state audit of the SSHA is completed and made public, we respectfully decline to comment further or address any other issues the Council raised in its communication from Commissioner Madigan. WHEREAS, on September 18, 2012, the SSHA Board Chair Eric Weller, presented an SSHA annual report to the Council regarding its activities for fiscal year 2012 and including the FY 2013 detailed salary budget. Approval was neither requested nor received. No further substantive response to the Memo has been made; and WHEREAS, in November 2012 the Office of the NYS Comptroller (Division of Local Government & School Accountability) released its audit, entitled Saratoga Springs Housing Authority, Board oversight and Internal Controls over Payroll and Employee Benefits (Audit), Period covered July 1, 2010 February 21, 2012; and WHEREAS, the Audit addressed the following questions: Does the Board adequately monitor financial activities, including disbursements, to ensure that Authority assets are safeguarded? Are internal controls over payroll and employee benefits appropriately designed and operating effectively to adequately safeguard Authority assets?

WHEREAS, the Audit results are summarized as follows:

.While the Board was involved in overseeing Authority operations, we found areas for
improvement. The Board did not institute the appropriate internal controls in regards to the approval of travel to conferences and the process of approving claims prior to payment. This resulted in the payment of nearly $12,000 in questionable travel costs.

We tested 75 vendor payments totaling $449,333 and found that claims were nearly always paid without any review by Board members. We also determined that the Authority violated its ethics policy when using a business owned by the Directors brother to service its vehicles. The Board did not compensate the Director whose 2011-12 salary was $144,921 in accordance with the Authoritys personnel policy or at an amount similar to other Directors of neighboring housing authorities. Board members indicated that they paid him a higher salary amount because they did not back-fill his prior position as project manager, effectively combining the two positions. The Directors Board-approved five year rolling contract potentially exposes the Authority to pay four years salary if it decides not to continue his employment. We found that the Directors use of an Authority vehicle was authorized and in compliance with contractual provisions, and this benefit was not unusual by industry standards. We also determined that the Accountants salary compares favorably with the Citys Finance Director and with the chief financial officers in other housing authorities. Although the Accountant controls the entire payroll process with little or no oversight, our review of her payroll records disclosed no deficiencies.

The results of our audit and recommendations have been discussed with Authority officials and their comments, which appear in Appendix C, have been considered in preparing this report. Except as specified in Appendix C, Authority officials generally agreed with our recommendations and indicated they planned to take corrective action. Appendix D includes our comments on issues raised in the Authoritys response letter. Good management practices dictate that the Board has the responsibility to initiate corrective action. As such, the Board should prepare a plan of action that addresses the recommendations in this report and forward the plan to our office within 90 days. (Pages 36) WHEREAS, the SSHA Board has not submitted a plan of action within the 90 day period. WHEREAS, the SSHA Board met in executive session on February 21, 2013 to discuss its response to the Audit, but took no action on a draft response written by the SSHA Chair, Eric Weller. Weller is quoted in the February 21, 2013 edition of Citys newspaper of record, The Saratogian: I dont feel any compelling reason to rush to responding, adding that the comptrollers office sat on it for ages. WHEREAS, the Assistant City Attorney has determined that there are at least three specific provisions in New York law that allow a city to exercise some control over authority operations: 1. Public Housing Law Section 30 gives the mayor of a city the power to appoint authority members; 2. Public Housing Law section 32 gives a local legislative body approval authority over certain salaries paid by the housing authority; and 3. Public Housing Law section 34 authorizes the mayor of a city or village, or the town board of a town, to remove a member of a housing authority for "inefficiency, neglect of duty, or misconduct in office"; and

WHEREAS, the Council finds that the Board of SSHA has neglected its duties, has failed to exercise property oversight and accountability for SSHA operations and facilities, and has mismanaged public moneys that should be devoted to the housing needs of its tenants, but instead have been spent on exorbitant executive compensation and expenses, all in possible violation of the Public Housing laws; NOW, THEREFORE, BE IT RESOLVED, pursuant to Public Housing Law, Article 3, Section 34 the Council calls for the immediate removal of appointed SSHA board members for "inefficiency, neglect of duty, or misconduct in office"; and BE IT FURTHER RESOLVED, pursuant to Public Housing Law, Article 3, Section 34 the Council urges and supports the Mayor to commence removal proceedings against appointed SSHA board members; and BE IT FURTHER RESOLVED, pursuant to Public Housing Law, Article 3, Section 34, pending the determination of charges against said board members, the Council urges and supports the Mayor to suspend appointed SSHA board members from office; BE IT FURTHER RESOLVED, the Council urges and supports the Mayor to reconstitute the SSHA Board by appointing new board members, as authorized under the Public Housing Law, Section 30 as well as the Saratoga Springs City Charter, Title 3, J.