Housing agency spending under scrutiny

A statue of an angel holding a fallen soldier is the centerpiece of Purple Heart Plaza at the Sierra Meadows Apartments, an affordable residential complex built by the Harris County Housing Authority in Houston. less A statue of an angel holding a fallen soldier is the centerpiece of Purple Heart Plaza at the Sierra Meadows Apartments, an affordable residential complex built by the Harris County Housing Authority in ... more Photo: Brett Coomer Photo: Brett Coomer Image 1 of / 8 Caption Close Housing agency spending under scrutiny 1 / 8 Back to Gallery

A towering bronze statue of a chiseled, bare-chested angel holding a fallen soldier stands in a courtyard at Sierra Meadows, an affordable housing complex built by the Harris County Housing Authority.

The one-ton monument, custom designed from a sketch by authority CEO Guy Rankin IV, cost $92,000, plus shipping from New York. Intended as a centerpiece for the patriotic-themed development, the sculpture instead is becoming a symbol of what critics say is a pattern of imprudent spending by the authority.

A Houston Chronicle review of authority records identified hundreds of thousands of dollars in questionable spending in recent years, including $183,400 on statues and monuments, $208,000 on the grand openings of three housing developments, $109,000 in donations to nonprofits, $33,500 for a gym in the authority's Reliant Park-area offices and more than $14,500 for trophies.

County officials say Rankin and the authority's board of commissioners, already under fire for paying large salaries and bonuses and spending $8.4 million on a defunct waterfront development, have lost sight of their mission to house the poor.

"The purpose of this entity is to assist those who need it," Precinct 4 Commissioner Jack Cagle said. "If you're the 75-year-old woman who's needing assistance and you're told you don't get to move into housing because the money that would've gone to help you move into housing got spent on a statue, how does that impact her life? That's hard to justify."

County Judge Ed Emmett called the spending "appalling" and "one of the greater abuses of appointed office that I've seen."

Audited and reviewed

Rankin did not make himself available for an interview, but defended the spending in an email late Friday.

"Please note that our financial expenditures have been audited and reviewed by all supervising agencies more than 28 times without any complaints or exceptions being noted," Rankin wrote. "This means that we have never once been accused of using a single dime of public funds improperly or for improper purposes."

He added, "Finally, please note that all the expenses you are questioning constitute less than .02 of 1% of the funds the Housing Authority has spent or managed while I have served as the Authority's CEO."

Rankin's employment at the authority appears to be nearing an end. His lawyer and the authority's general counsel, Michael Fleming, are negotiating the terms of his departure.

Amounts 'reasonable'

Authority board chairman Casey Wallace echoed Rankin's defense of the agency's spending, noting that the authority has tripled the size of its rental voucher program and built eight affordable housing projects in recent years.

"These are just a few items," Wallace said. "I realize there are those who question what we do, who, perhaps, don't like some of our programs and don't like some of our ideas. We've done a lot of work in a short time frame and had a lot of accomplishments."

Minutes before Rankin emailed his response Friday afternoon, the authority emailed the Chronicle a 17-page response to questions about its spending, declaring the amounts "reasonable and in accordance with industry standards."

In response to each question by the Chronicle about specific expenditures, the authority wrote: "The specific dollar amount has not been verified by HCHA since no supporting documentation was accompanied with this request. HCHA does not confirm or deny any of these spending item dollar amounts."

Questionable expenditures identified by the Chronicle's review of payment records provided by the Housing Authority include:

1$114,100 planning and producing the Sierra Meadows celebration, which featured performances by a poet and a country music trio. Last fall's grand opening of Cypresswood Estates cost $65,900. The launch of Magnolia Estates, delayed by Hurricane Ike in the fall of 2008, cost about $28,000.

Board member Beto Cardenas said he attended the Sierra Meadows party and was surprised by the production. Such marketing efforts typically would aim to increase demand for an agency's services, he said, but many already are in need of affordable housing.

"The question then becomes, what are you trying to achieve?" Cardenas said. "Does spending $100,000 marketing a project that has been built increase the revenue of the organization?"

Despite its name, the authority, whose board is appointed by the Commissioners Court, receives federal funds, not local taxes, and is not a county department.

Wallace said the properties' more than 95 percent occupancy rate shows the marketing efforts were successful, adding strong lease rates have allowed the authority to collect $2.5 million in fees from the three projects.

1$109,350 in donations to local nonprofits, in apparent violation of the authority's own policies. The Texas Constitution generally prohibits the use of public money for private purposes. To be legal, Assistant County Attorney Doug Ray said, the donations would need to promote housing.

Helping a Hero, a charity that provides homes for wounded veterans, received $50,000, and a $25,000 gift to the Space Center Rotary Foundation went to help a Kemah family featured in a 2010 episode of Extreme Makeover: Home Edition. Ray said it is not clear whether $16,500 in donations to the National Japanese American Memorial Foundation and $16,000 to the local NAACP chapter meet the legal standard.

Wallace said he was told both gifts were housing-related. Invoices, however, describe the Japanese American foundation gifts as a $10,000 table sponsorship at a dinner and the purchase of a $6,500 commemorative book, and the NAACP payments as table sponsorships at four annual galas.

1The authority paid $312,000 for the 11 cars it owns, mostly Chevrolet Tahoes and Toyota Priuses, driven mainly by executives and inspectors.

"These eight developments cost us more than $140 million to build and without having employees in vehicles going out checking on them and seeing what's going on, they're going to fall apart, and we can't have that," Wallace said.

Last year, the authority bought a new $44,140 Chevrolet Avalanche, which Wallace said he drove several times a week while he was supervising construction of two projects, and which he sometimes took home. State law forbids compensation for housing commissioners, but allows them to be reimbursed for expenses. Ray and Fleming said Wallace's use of the vehicle was proper if he used it for authority business.

1The authority paid $240,500 to renovate its Reliant Park-area office when it moved there in 2009. That included $9,900 in televisions, including one with a 73-inch screen. Most of the screens, some of which Wallace said are computer monitors, are used for staff training and video conferences. The authority paid an additional $33,500 to install a small gym and locker room at the office.

1The authority, a 40-person agency, bought $14,556 worth of trophies, plaques and awards from mid-2008 to last fall. It also spent $64,290 on apparel, mainly shirts, for staff and subcontractors during that span.

"Our employees have worked extraordinarily hard, they put in an extraordinary amount of hours and they have extraordinary achievements," Wallace declared. "They have a lot to be proud of."

mike.morris@chron.com