Testimony of Saul Ramirez, Deputy Secretary
February 24, 2000
U.S. Department of Housing and Urban Development
Senate Subcommittee on Housing and Transportation
Hearing on Oversight of HUD's Community Builders Program
Good morning Mr. Chairman and
members of the Committee. I am Saul Ramirez, Deputy Secretary
of the Department of Housing and Urban Development. I appreciate
the opportunity to discuss with you HUD's innovative and successful
Community Builders program.
I request that my oral and written testimony be included in their
entirety in the record.
Mr. Chairman, I have three basic points to emphasize today.
First, the Community Builders program is absolutely necessary
to carrying out HUD's mission and has been a remarkable success.
Objective results from the field demonstrate the value that the
Community Builders have added to our ability to carry out HUD's
mission. Our customers, moreover, have expressed overwhelming
support for the program, and it has helped to build HUD into
a model for federal customer relations. And the program has been
deemed a success by every independent group to review it, including
the Public Strategies Group, Booz-Allen, Andersen Consulting,
and, most recently, the respected independent accounting firm,
Ernst and Young, LLP.
Second, the criticisms leveled by the Inspector General against
the program particularly with respect to the hiring process for
the Community Builder Fellows in 1998 and 1999 are baseless and
fundamentally unfair. As I have done before, I look forward
now to setting the record straight.
Finally, HUD's current hiring practices are entirely
proper. Past hiring practices are no longer an issue, as
Congress in the FY2000 VA/HUD/ Independent Agencies Appropriations
Act directed us exactly how to proceed in hiring permanent Community
Builders, and we are acting just as directed. Moreover, the process
by which we are currently hiring is entirely appropriate.
Before I elaborate, I would like to tell you why my personal
experience makes me convinced that Community Builders are absolutely
necessary to HUD's work. I served as Mayor of Laredo, Texas from
May 1990 to June 1997, and during that time I had extensive dealings
with the Department. It never ceased to amaze me how many people
I had to make contact with in order to access HUD's programs
to address the needs of Laredo's citizens. I found little coordination
between individuals who handled the different programs that address
the continuum of housing and community needs, such as poverty,
homelessness, affordable housing, neighborhood revitalization,
economic development and job creation.
In my time at the Department, I have been very involved in HUD's
bold, sweeping, and innovative 2020 Management Reform Plan, a
plan designed and developed to address the Department's long-standing
material weaknesses identified by many in Congress as well as
the GAO and OIG. These improvements cover financial management
and program operations, as well as program delivery and customer
service. The Community Builder program is but one part of the
comprehensive plan that is making HUD more responsive to community
needs and more protective of the public trust. Mr. Chairman,
I would like to take a moment to go over each of the four points
I mentioned in greater detail.
The first and most important point I would like to emphasize
today is that the Community Builders program is a clear success.
In 1994, the National Academy of Public Administration (NAPA)
reviewed HUD's performance at the direction of Congress. In a
report entitled Reviewing HUD: A Long-Term Agenda for Effective
Performance, NAPA recommended that HUD's revitalization efforts
incorporate a holistic approach to serving communities rather
than a program-focused approach. Another independent group of
management experts, the Public Strategies Group, likewise examined
HUD's reform efforts and warned against the "dysfunction"
that can stem from "the commingling of both service and
compliance functions within programmatic cylinders, requiring
agency employees to assume dual roles at times seeking to offer
assistance, facilitate and problem solve, and at other times
to perform oversight and enforce compliance."
HUD took these recommendations and other past criticisms seriously
when creating the Community Builder program as part of our overall
Management Reform strategy. The program was designed around the
six strategic objectives of HUD. These objectives are (1) fighting
for fair housing; (2) increasing affordable housing and home
ownership; (3) reducing homelessness; (4) empowering people and
communities; (5) restoring the public trust; and (6) promoting
jobs and economic opportunity.
In furtherance of HUD's strategic objectives, Community Builders
are responsible for providing information to communities about
HUD programs and community resources, promoting communication
by and between community organizations, reaching out to community
organizations and creating alliances between them, supporting
HUD's various programs, determining and assessing community conditions
and needs, providing community service planning, and coordinating
between governmental units.
The Community Builders we have in place have been tremendously
successful in achieving concrete results. They play an integral
role in HUD's progress on all six departmental objectives and
have filled a void in outreach services to the communities and
customers that HUD serves. As Ernst & Young notes, Community
Builders have made notable improvement in HUD's outreach capabilities
and technical assistance.
On a structural level, the Community Builders program allows
the entire agency to function better. We now have Community Builders
(making up about 9% of the agency) who function as our community-resource
representatives, and Public Trust Officers (about 91% of the
agency) who ensure that HUD meets its obligations and responsibilities
to the American people. These clearly defined roles and responsibilities
mean we are better meeting our program goals and commitments
for furthering the Department's strategic objectives. For the
first time, HUD has freed up some 90% of the agency's staff to
concentrate entirely on monitoring and running its programs.
How can we measure the success of the Community Builders program?
In three ways: positive results from the field, the backing of
independent analysis, and rave reviews from our customers.
Results from the Field: Program offices attribute their success
to the Community Builders and depend on the Community Builders
for the continued success of their individual program areas.
The effect of the Community Builder's program is best measured
through the accomplishment of our strategic goals in various
program areas. Last year, we exceeded our goals in fair housing
enforcement, increasing home-ownership among under-served populations,
and providing comprehensive solutions to fighting homelessness,
all with the help of the Community Builders.
For example, the Office of Single Family Housing had a record-breaking
year, increasing insurance endorsements for under-served populations
to 424,658 a 16% increase over the Business and Operating Plan
(BOP) goal of 367,011. That office also had a record breaking
year for endorsements of first-time home-buyers, reaching 745,671
an 18% increase over the BOP goal of 629,341. In plain terms,
this means that more people in need are getting homes and both
cases, the Office of Single Family Housing attributes much of
its success to the outreach efforts of the Community Builders
The Office of Multifamily Housing also made a significant contribution
to communities throughout the country by officially opening 204
new Neighborhood Network Centers, exceeding the FY99 BOP goal
by 82%. The Office of Multifamily Housing attributes much of
the success of its effort to the work of the Community Builders.
We have also seen results in terms of the ability of our Public
Trust Officers to perform monitoring and compliance reviews.
In FY99, HUD reached 104% of the BOP goal for performing mortgagee
monitoring reviews and servicing/loss mitigation reviews of Title
I, Title II, and 203 (k) lenders. In FY2000 we fully expect to
exceed last year's goals and provide even stronger enforcement
numbers. The separation of functions between the Community Builders
and the Public Trust Officers can be credited for this accomplishment.
FY 2001 will be an even stronger year for accomplishing HUD's
strategic Goals. This year we continue to establish a variety
of goals designed to further our departmental mission and augment
the benefits of the Community Builder program, but we cannot
rest on our accomplishments. Through the use of our Community
Builder program HUD has been able to exceed BOP goals in key
program areas and set the bar higher as we look forward. These
results could not be accomplished under the old system which
vested compliance, outreach and marketing responsibilities in
one person. They can only be accomplished through the freedom
that agency staff now have to concentrate on their defined responsibilities.
Independent Analysis: If these concrete results are not enough
to demonstrate the success of the program, we can also look to
independent analysis. Ernst and Young has concluded that "the
Community Builder program may serve as an innovative government
model of improved customer service for government institutions
at all levels."
Ernst and Young found specifically that:
- Community Builders are providing
increased customer service and responsiveness to community needs
- Community Builders are expanding
outreach to new and in some cases previously under-served partners;
- Community Builders are facilitating
working partnerships, furthering the Department's mission;
- Community Builders are utilizing
valuable private sector experience and skills to benefit the
public sector; and
- Community Builders are furthering
the Department's strategic objectives.
HUD's Satisfied Customers: Finally,
it is clear that HUD's customers are extremely pleased with the
increased customer service in their communities. When interviewed
by Ernst & Young, an overwhelming majority (88%) stated that
they were impressed with the Community Builders and would call
upon them again. They cited the proactive effort of Community
Builders in identifying opportunities and areas of need in the
community. And our customers note that the Community Builders
provide greater access to HUD by providing a single point of
contact on HUD's multiple program areas.
Through the Community Builders HUD has successfully reached out
to new community partners and has built relationships with organizations
and communities that were previously under-served. A full 59%
of customers interviewed by Ernst & Young were new partners
of HUD. The Community Builders have gained the reputation of
effective community outreach by bringing organizations and people
together to form new partnerships and acting as liaisons between
In 1999, Andersen Consulting surveyed our customers and found
that "[i]n striking contrast to the image of a federal bureaucracy,
HUD's staff is perceived by its customers as providing exemplary
service and accurate information, and HUD staff also received
high marks for timeliness of the information provided. The fact
that HUD customers indicated high positive levels of customer
service is even more impressive because of the high disposition
of government customers to negative bias (since, unlike private
companies, HUD must regulate its customers)."
Members of Congress and Mayors from across the country have applauded
the work of our Community Builders. Let me highlight a few samples:
Here's what Mayor Dominic Pileggi
of the City of Chester, Pennsylvania writes:
"I am a believer in a limited
federal government. Nevertheless, the Community Builder program
has been the single most effective innovation in a federal government
program in my 6 years in City Government."
And Mayor John Norquist of Milwaukee
"HUD had been virtually
invisible in the community. However, that has changed since the
appointment of the four fellows in the local HUD office. They
have worked hard to create a HUD presence in the community and
have been wildly successful. Their efforts to `go where no HUD
has gone before' have resulted in HUD representation at venues
specifically targeted toward under-served areas . . . . The Community
Builder program is the model for empowering communities to achieve
And, in my home State of Texas,
Mayor Bo Quiroga of Galveston said this about Community Builders
in his area
"They have helped guide
me and the committee I have formed to begin to transform a neighborhood
that has been neglected for many, many years the Old Central/Central
Park Neighborhood. We are about to launch a neighborhood effort
that we hope will transform the neighborhood aesthetics, encourage
self esteem, provide home ownership and encourage entrepreneurship
opportunities . . . . I hope other cities are the recipients
of the same personal attention we are receiving from the HUD
Community Builder Program, and I encourage you to consider expansion
of this program in the future because it works."
I can assure the committee and
Mayor Quiroga that many cities across the nation are enjoying
similar assistance from our Community Builders.
And the testimonials continue to pour in:
"The Community Builders
initiative is exactly the kind of innovative thinking we need
at HUD and exactly the way the federal government should be working
as we move into the next Century." Mayor William Johnson,
"By developing the Community
Builder and Public Trust Officer positions, which focus on community
outreach and on compliance monitoring respectively, HUD has created
a more efficient organizational structure. With staff collaborating
in a more focused and defined manner, it makes for a more effective
and responsive HUD. We have used this model in Austin to reorganize
our own housing office." Mayor Kirk Watson, Austin, TX
"The Community Builders
program is a new concept to those of us at the local government
level. We have found the program and servicing community builders'
staff to be a superb clearinghouse for a multitude of issues
and information." Mayor Tommy Swaim, Jacksonville, AR
"Anyone working at the local
level knows the value of having a friend at HUD who is watchful
and knowledgeable of the big picture. Cities exist in a complex
system and these people have been helpful at keeping us prepared
and ready for the challenges we face." Mayor Roy Bernardi,
"Literally every dealing
we've had with HUD since the inception of the Community Builder
program has improved because of the `one-stop shopping' we can
now use in seeking information and assistance." Mayor Anthony
Masiello, Buffalo, NY
"Whether it be providing
technical assistance with RFPs, connecting people and organizations
to community resources, providing training and education on HUD
programs to owners and managers, supporting preservation efforts,
developing partnering relationships, supporting preservation
efforts, developing partnering relationships, supporting industry
projects such as Fair Housing Best Practices or Neighborhood
Networks the Community Builders have proven themselves as both
highly capable and committed individuals." Joseph Diehl,
Executive Director, Affordable Housing Management Association.
Clearly, the people we work with
on a daily basis in reaching America's communities are pleased
with the work of our Community Builders, just as we are.
What does this mean for the American
people? It means that HUD's reform has resulted in a better product
for communities and greater monitoring mechanism for HUD's programmatic
investments. The clearly defined roles and responsibilities translate
to an improved, more efficient HUD, capable of meeting its program
goals and commitments and furthering its strategic objectives.
To consider reducing or eliminating this program, particularly
as the effects of its success are just now being concretely felt
would be deleterious to HUD's reform progress.
The second point I would like to make is that the IG's criticisms
particularly about the hiring process for the Community Builder
Fellows in 1998 and 1999 are baseless and fundamentally unfair.
As I have testified previously, the Inspector General's audit
of the Community Builders program is rife with inaccuracies.
- The IG's report mistakenly claims
that Community Builders do not fit the criteria for hiring under
We believe that Schedule A hiring
authority is designed, in part, for Fellowship programs like
the Community Builder fellowship. I would like to emphasize that
HUD's Office of General Counsel fully analyzed the applicability
of Schedule A hiring authority to the Community Builders and
concluded that "the Department may hire individuals from
outside the Department to fill positions in the Community Builders
program under the Schedule A authority of 5 CFR 213.3102 (r)."
I would like to submit a copy of that memo for inclusion in the
record. Oddly enough, one of the HUD attorneys who drafted the
memorandum currently serves as the IG's associate counsel. I
cannot understand why the OIG would contradict the legal opinion
of its own lawyer.
- The IG report stated that there
were irregularities in the hiring process for Community Builders
and that the process was not well planned or implemented.
We believe that this claim
is absolutely false. We
believe that the hiring process complied with all relevant rules,
laws, and regulations provided by the Office of Personnel Management
(OPM). Our response to the IG report addresses this issue in
detail. I am also providing you with memoranda from our General
Counsel and from our DAS for Administration demonstrating that
HUD acted appropriately in hiring Community Builder Fellows.
- The IG claimed that the pay
grades for the Community Builders were unusually high. The
facts show otherwise.
HUD career human resources officials
followed OPM guidelines in assigning salary levels the same process
used to assign salary levels for all government employees. Moreover,
the Community Builder Fellows are of the highest caliber. Nearly
all Community Builder Fellows are mid-career professionals with
10 or more years of experience in their chosen profession and
their average age is 45. Many also have advanced degrees in fields
such as law, public administration, and public policy. The implication
that Community Builders are paid too much is false. Salaries
for Community Builder range from GS 7 through GS 15, approximately
$27,000 to $105,000, including locality pay.
I am submitting our response to the OIG report, which addresses
the issue of hiring in detail. I am also submitting a memorandum
from our General Counsel and DAS for Administration demonstrating
that HUD acted appropriately in hiring Community Builder Fellows.
- The OIG report alleged that
Community Builders merely do - and I quote - "public relations"
and that their work is of "minimal value."
Again, the OIG is wrong and
plainly distorts the record.
As confirmed by Ernst and Young, Community Builders are helping
the Department meet each of its strategic objectives, and the
results I discussed above plainly show the difference the program
Some of the clear examples of
valuable work performed by Community Builders that E & Y
- helping local communities in
Nevada assess their economic development needs;
- forming a partnership between
a Community Development Corporation, HUD and a local high school
to assist with a crime mapping initiative;
- providing information so that
a local government entity could access a new source of HUD funding
for the first time;
- facilitating the participation
of a local chapter of the United Way in the Department of Justice's
weed and seed program;
- bringing together a group of
tenants and their landlord to help resolve maintenance and safety
- identifying alternative financing
options for the Cherokee Nation Housing Authority;
- leading a collaborative effort
that included the Federal Emergency Management Agency to respond
to freezing weather that destroyed crops that were an important
part of the local economy;
- helping a non-profit organization
in Galveston, TX find funding for a training program for young
inner city entrepreneurs;
- locating a disabled-accessible
apartment for a woman with multiple sclerosis and providing her
information regarding fair housing complaint procedures;
- providing technical assistance
to a local non-profit housing development organization to help
it become a designated Community Housing Development Organization;
- providing information and technical
assistance to help preserve Washington State's Section 8 contracts;
- organizing first-time home buyer
training for local lenders who were interested in targeting the
community's under served minority first-time home buyer population;
- presenting information on HUD's
housing programs, including eligibility requirements and rent
calculations to an AIDS Task Force to help them educate their
- working with the Philadelphia
Housing Authority to inform public and assisted housing residents
about new "welfare-to-work" reform rules and regulations.
Now, if you believe that's public
relations, that's fine. I think it's the relations the public
expects us to have to be responsive and reliable. This work is
exactly what the public should expect from HUD comprehensive
services that are responsive to local needs.
- The OIG report alleges that
Community Builders disseminate primarily political information.
Once again, the OIG is wrong. Community Builders provide
information to customers on HUD and its programs. The OIG report
provides absolutely no valid, reliable evidence for this unfounded
This is but a sampling of the
errors and inaccuracies contained in the audit. That is why I
urge this Committee to examine the facts carefully and draw your
own conclusions. I know that if you look at the facts objectively,
you will conclude that the program has been unfairly attacked
and that the basis for these attacks is unsubstantiated, anecdotal
stories that clearly demonstrate a misunderstanding of this program.
The last point to emphasize today is that the level of our
current hiring and the process by which we are hiring permanent
Community Builders is legal and appropriate. First, let me
be absolutely clear: as we complete the hiring of our internal
Community Builders, we are fully complying with the Fiscal Year
2000 Appropriations Act for the Department of Veterans Affairs
and Housing and Urban Development, and Independent Agencies (Public
Law 106-74). The Act resolves once and for all any issues concerning
past hiring, and HUD is following its roadmap for all current
and future hiring.
The language of the Act is perfectly clear: HUD was instructed
not "to convert any external community builders to career
employees" and was prohibited from employing "any external
community builders" after September 1, 2000. We have in
no way done the former and we have absolutely no intention of
doing the latter.
HUD is hiring for current Community Builder positions through
an openly competitive process. The applications are being processed
using the Office of Personnel Management's Delegated Examining
Unit (DEU) Operations Handbook as well as the merit staffing
procedures outlined in HUD's Merit Staffing Policy. These positions
are not being converted, they are being competitively filled.
Further, HUD has already acted to eliminate the external Community
Builder program. All individuals hired as Community Builder Fellows
were advised immediately after the Act passed that their positions
would terminate on or before September 1, 2000.
Indeed, during negotiations about the Community Builders program
last fall, the Conferees and the Administration, represented
by the Office of Management and Budget, reached an agreement
to preserve the overall Community Builders program. It was agreed
that the Fellows aspect of the program would be eliminated, that
the FTE slots freed up by that elimination would be filled with
career civil servants, and that HUD would be prohibited from
making any CB Fellow into a permanent civil servant without that
person having to compete on an equal basis with all other applicants.
We frankly cannot see how the plain language would support an
alternative interpretation. The suggestion that the law prohibits
HUD from hiring any Community Builders is particularly incomprehensible,
as the statute clearly singles out one category the Fellows leaving
the other classes of Community Builders untouched.
Indeed, in terminating the Community Builders Fellows program,
the Conference Report accompanying the Act clearly states that
"functions now being performed by external Community Builders
will be carried out by career civil servants, and that FTEs now
occupied by external Community Builders will be filled instead
by regular civil service employees." In other words, positions
held by Community Builder Fellows would be competed for and filled
by career civil servants, just as HUD is doing, not eliminated
in their totality.
Indeed, the fact that the external Community Builder program
was terminated while the total number of HUD employees remained
at 9,300 suggests that no change as radical as cutting the number
of Community Builders in half was contemplated by the Conference.
Thus, we are entirely within the plain language of the law in
competitively hiring the permanent Community Builders.
Our current hiring process for Community Builders, moreover,
follows all applicable requirements. We have sought and received
extensive advice from the Office of Personnel Management (OPM)
on a variety of issues. OPM advised that our plan met all
relevant legal requirements and was both a proper and appropriate
approach to hiring Community Builders.
Prior to implementing my Staffing Plan, the Human Resource Department
sought and received guidance in the DEU Examining Operations.
OPM referred HUD to their web site where instructive materials
were both found and utilized. On December 10, 1999, OPM was provided
with a copy of the FY2000 Staffing Plan which included the Community
In order to ensure that there are no questions concerning the
development of grade determinations, our Human Resource Department
referred the Community Builder's position descriptions to OPM
for review. The position description delineates duties of the
positions and the criteria for determining pay grade determinations.
OPM advised that they were satisfied with HUD's explanations
as to how the grades were set.
Lastly, HUD sought OPM's advice prior to writing a vacancy announcement
and revised position description for the Community Builder program.
OPM in return provided HUD with sample vacancy announcements,
made suggestions for clarifying duties, and recommended that
HUD develop supplemental evaluation statements. These samples
were used to develop the Community Builder announcements, and
evaluation statements were prepared for each position description.
We have taken all necessary steps to ensure that every aspect
of our current hiring is perfectly appropriate.
Let me close by saying that we will not let positive reviews
lull us into complacency nor negative attacks weaken our resolve
to continue to improve this program. We are continually working
to make the Community Builders program as successful as possible
with one goal in mind to better serve American communities by
working with them and responding to their needs.
We are proud of the work that our Community Builders have done
and we have seen how absolutely vital they are to all of the
work we do. I thank you for the opportunity you have given me
to share these successes, and I look forward to answering any
questions you may have.
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