[Federal Register Volume 62, Number 225 (Friday, November 21, 1997)]
[Notices]
[Pages 62478-62484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30763]



[[Page 62477]]

_______________________________________________________________________

Part VI





Department of Housing and Urban Development





_______________________________________________________________________



The HUD 2020 Management Reform Plan; Notice of New HUD Field Structure; 
Notice

  Federal Register / Vol. 62, No. 225 / Friday, November 21, 1997 / 
Notice  

[[Page 62478]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4266-N-02]


The HUD 2020 Management Reform Plan; Notice of New HUD Field 
Structure

AGENCY: Office of the Secretary, HUD.

ACTION: Notice of the New Field Structure under the HUD 2020 Management 
Reform Plan and Cost-Benefit Analysis.

-----------------------------------------------------------------------

SUMMARY: On August 12, 1997, HUD published in the Federal Register 
notice of the ``HUD 2020 Management Reform Plan.'' The HUD 2020 
Management Reform Plan is HUD's plan for significant management reforms 
at the Department. The reforms contained in the plan are directed 
toward (1) empowering people and communities to improve themselves and 
(2) restoring HUD's reputation and credibility by improving the 
efficiency and effectiveness of the Department's programs, operations 
and provision of services.
    This notice presents the new HUD Field structure under the HUD 2020 
Management Reform Plan, including an analysis of the costs and benefits 
of that plan. The new Field structure is designed to reallocate the 
Department's resources to strengthen service delivery from HUD's 
current 81 Field Offices. The HUD 2020 Management Reform Plan does not 
result in the closing of any HUD offices and calls for no reduction or 
transfer in the location or in the amount of services currently 
provided by the Department to its constituents.

FOR FURTHER INFORMATION CONTACT: For further information, contact the 
Office of Departmental Operations and Coordination, the Department of 
Housing and Urban Development, 451 Seventh Street, SW, Washington DC 
20410, (202) 708-0988. (This is not a toll free number.) Comments or 
questions can be submitted through the Internet to 
Candis__B.__H[email protected]. More information on HUD's Management 
Reform Plan can be found on HUD's Home Page on the World Wide Web at 
http://www.hud.gov, and the plan is available at http://www.hud.gov/
reform/mrindex.html.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

    On August 12, 1997 (62 FR 43204), HUD published in the Federal 
Register notice of the ``HUD 2020 Management Reform Plan.'' The HUD 
2020 Management Reform Plan is HUD's plan for significant management 
reforms at the Department. This plan is directed to restoring HUD's 
reputation and credibility by improving the efficiency and 
effectiveness of the Department's programs, operations and delivery of 
services. The restructuring of HUD's internal operations (as distinct 
from its services to its constituency) is needed to resolve a series of 
management deficiencies identified by the Secretary, the General 
Accounting Office, and the Office of the Inspector General. The 
restructuring of HUD's internal operations includes restructuring of 
the Department's Field Offices. Indeed, HUD's internal operations at 
its Field Offices will undergo significant change under the HUD 2020 
Management Reform Plan. The change is designed to strengthen HUD's 
field operations.
    For some time, the Department has needed to find new and more 
efficient ways to carry out its mission because of budget constraints 
and related downsizing pressures. One strategy that HUD will pursue in 
this connection is the consolidation of certain internal operations and 
moving the responsibility for these operations to field locations. 
Consolidation of operations in field locations does not constitute a 
novel way of doing business. Many private sector companies reorganized 
and restructured under this type of model over a decade ago. Models of 
this type in the financial services industry are particularly 
compelling and relevant to HUD. Over the past decades, many banks, such 
as Citibank and NationsBank, consolidated their routine functions into 
centralized ``back office'' processing centers and established ``store-
front'' customer offices closer to their markets. HUD's consolidated 
operation centers outlined in the HUD 2020 Management Reform Plan are 
based in part on these private sector models.
    Therefore, to address the Department's current outdated and 
outmoded top-down Headquarters/Field structure, the HUD 2020 Management 
Reform Plan reallocates the Department's resources in a way that is 
designed to strengthen HUD's current 81 Field Offices, and improve 
service delivery capacity. The plan does this by creating at every 
Field Office a Community Builder Staff with the ability to provide the 
full range of HUD programs, liaison, and customer services to 
individuals, community organizations, and governments. This makes the 
Field Offices more customer-friendly and community-oriented. In 
creating these offices, there is no reduction or transfer in the 
location or amount of services provided by the Department to the 
recipients of its services. Additionally, no offices are being closed 
as a result of this restructuring. The design of the plan is for HUD's 
81 Field Offices to remain and to be better focused in serving their 
constituents. Section III of this notice provides a cost-benefit 
analysis of the new field structure.

II. Description of Changes

    The HUD 2020 Management Reform Plan will fundamentally alter the 
structure of HUD and the way it serves America's communities. The 
current field structure has State offices with a staff of program-
specific employees. This structure will be replaced by Field Offices 
staffed with Community Builders and Public Trust Officers. While none 
of the Field Offices will close, their internal operations will change 
dramatically, becoming processing centers and new Service Centers. In 
this way, HUD will maintain an enhanced presence in the communities 
while improving the allocation of its resources.

Consolidated Operations Centers

    The HUD 2020 Management Reform Plan provides for the consolidation 
of several major functions of the Department. The most important 
consolidation efforts involve creating both department-wide and 
program-specific centers. Overall, the HUD 2020 Management Reform Plan 
calls for the establishment of 17 types of consolidated operation 
centers in the field. The location of these centers reflects a 
geographic balance throughout the United States. The major 
consolidations include an Enforcement Center, a Real Estate Assessment 
Center, Section 8 Financial Management Center, Single Family 
Homeownership Centers and the Chief Financial Officer's (CFO) 
Accounting Center. The specific operations of these centers were 
discussed in more detail in the August 12, 1997 Federal Register 
notice. (See 62 FR 43212-43213.)
    The consolidation of operations and functions in certain centers is 
exclusively a redesign of internal processing. While the consolidation 
may include the transfer of certain internal functions from 
Headquarters to the field or from one Field Office to another, there 
will be no impact on the level of government services to the local area 
since these functions by nature are not location specific. Since the 
consolidation of processing functions is designed to speed processing 
times and increase accuracy, the generalized impact is expected to be 
beneficial to

[[Page 62479]]

program customers, regardless of geographic location. The establishment 
of consolidated operations centers in the field will bring HUD services 
closer to the customers who need these services, and closer to the 
customers who can help ensure that HUD is making the best decisions 
that it can with respect to its services and operations. A complete 
list of HUD's Consolidated Operations follows:

                  HUD's Consolidated Operations Centers                 
------------------------------------------------------------------------
    Consolidated operation                      Function                
------------------------------------------------------------------------
Assessment Center............  Standardizes the financial and physical  
                                evaluations of housing and public       
                                housing portfolios.                     
Enforcement Center...........  Takes aggressive action against troubled 
                                housing and public housing portfolios   
                                that fail physical and financial        
                                inspections, along with enforcement     
                                actions for FHEO and CPD grantees.      
Section 8 Financial            Integrates and restructures the financial
 Management Center.             management systems and payment processes
                                for all Section 8 programs.             
Title I Asset Recovery Center  Manages the collection of deficiency     
                                balances owed to FHA as a result of     
                                buyer defaults.                         
FHA/Single Family              Manage insurance endorsements, technical 
 Homeownership Centers (4).     reviews, underwriting, loss mitigation, 
                                marketing and outreach, and lender      
                                monitoring.                             
Property Disposition Centers   Manage the foreclosure and disposition of
 (2).                           HUD-owned and HUD-assigned properties.  
FHA Multifamily Hubs (18)....  Supervise multifamily centers and        
                                administer all FHA multifamily mortgage 
                                insurance, direct loan, and capital     
                                grant programs with the exception of    
                                Multifamily Property Disposition,       
                                Processing of Rent Supplement and       
                                Section 8 Voucher/Monthly billings and  
                                coinsured loans.                        
FHA Multifamily Program        Administer all FHA multifamily mortgage  
 Operations Centers (33).       insurance, direct loan, and capital     
                                grant programs with the exception of    
                                Multifamily Property Disposition, the   
                                processing of Rent Supplement and       
                                Section 8 Voucher/Monthly Billings and  
                                coinsured loans.                        
Field Legal Centers (8)......  Provide full range of legal services.    
Field Legal Hubs (22)........  Provide program specific legal services  
                                to Housing and PIH.                     
PIH Troubled Agency Recovery   Develop and implement strategies to      
 Centers (2).                   improve the performance of troubled     
                                PHAs.                                   
PIH Special Applications       Administers the processing of PIH        
 Center.                        demolition/disposition, mixed-income    
                                allocation plans, and 5(h) Homeownership
                                applications.                           
PIH Grants Processing Center.  Manages all aspects of competitive       
                                grants, as well as the public housing   
                                operating and capital funds.            
PIH Hubs (27)................  Supervise and perform all PIH functions  
                                within a defined geographic area,       
                                including program performance,          
                                administration, technical assistance and
                                compliance functions.                   
PIH Program Centers (16).....  Perform all PIH program performance,     
                                administration, technical assistance and
                                compliance functions.                   
Fair Housing Hubs (10).......  Supervise all FHEO functions within a    
                                defined geographic area. Perform all    
                                FHEO compliance and enforcement or      
                                complaint intake functions for the      
                                defined area.                           
Fair Housing Program Centers   Perform all FHEO compliance and          
 (18).                          enforcement functions.                  
Fair Housing Local Sites (24)  Perform all FHEO compliance and          
                                enforcement functions for a local       
                                jurisdiction.                           
Economic Development and       Coordinates all HUD economic development 
 Empowerment Service.           and job skills programs to provide      
                                improved focus on community empowerment.
Administrative Service         Support Field Offices with such services 
 Centers (3).                   as information technology, human        
                                resources, procurement and space        
                                planning.                               
Employee Service Center......  Handles all payroll, benefits and        
                                counseling services.                    
CFO Accounting Center........  Manages all field program and            
                                administrative accounting operations.   
HUD Area Office..............  In addition to being the location of one 
                                or more consolidated program operations 
                                hubs and centers, Area Office operations
                                will consist of community resource and  
                                liaison services for public-private     
                                partnerships, marketing and outreach for
                                homeownership, community and economic   
                                development, technical assistance and   
                                general trouble-shooting. They will also
                                continue to perform the full range of   
                                field management functions.             
                               Area Offices will continue to perform    
                                major management responsibilities (e.g. 
                                funding, policy interpretation,         
                                monitoring and assistance) relating to  
                                FHEO, CPD, Housing, Public and Indian   
                                Housing Programs, as well as legal      
                                counsel and administrative support.     
Community Service Center.....  Coordinators and Community Builders, with
                                direct linkages to consolidated program 
                                operations, will provide the broad range
                                of HUD programs, liaison and customer   
                                services to state, local and community  
                                organizations, that is, for public and  
                                assisted housing, homeownership,        
                                community and economic development, fair
                                housing, technical assistance, public-  
                                private partnerships and complaints     
                                resolution.                             
------------------------------------------------------------------------

Field Office Operations by Location

    The restructuring of program operations in the Field Offices is 
designed substantially to increase the current level and quality of 
service to local communities. The HUD Management Reform Plan states 
that ``it is paramount that HUD retain its scope and presence in 
communities across the country; HUD's 81 Field Offices will remain and 
be better focused in serving their constituents.'' The plan calls for 
every HUD Field Office to have a Community Service Center and the 
establishment of community builders to augment the quality and quantity 
of service delivery to local communities. With respect to the location 
of the consolidated centers to be established throughout the U.S., the 
general criteria for determining the locations of these centers are as 
follows:
    Economy of Scale/Scope. Greater workload productivity and customer 
service by consolidating program operations at one or more sites as 
compared with current operations.
    Projected Population Bases. Anticipated location of future 
customers, based on projected metropolitan area growth.
    Workload and Portfolio. Current/anticipated concentration of 
program workload portfolio.

[[Page 62480]]

    Location of Industry Partners. Sites convenient to the Department's 
primary program users/facilities.
    Accessibility. Convenience of travel/transportation and other 
business requirements.
    Consolidation of functions is designed to achieve consistency and 
uniformity in the performance of these functions, and to avoid 
duplication of effort and streamline operations. Consistency and 
uniformity make these functions easier for HUD employees to perform, 
and make HUD programs simpler and more understandable for HUD's program 
participants. Under this restructuring of internal, back office 
operations, there is no reduction or transfer in the location or amount 
of services provided by the Department to the recipients of its 
services as a result of the HUD 2020 Management Reform Plan. A complete 
description of how HUD's internal operations will be structured at each 
field location follows:

        New HUD Field Structure Locations And Program Operations        
------------------------------------------------------------------------
           Location                     Proposed HUD operations         
------------------------------------------------------------------------
Albany.......................  Community Service Center, Local          
                                Administrative Support, Title I Asset   
                                Recovery Center.                        
Albuquerque..................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Anchorage....................  Community Service Center, CPD Field      
                                Office, FHA Multifamily Programs        
                                Operation Center, Local Administrative  
                                Support.                                
Atlanta......................  Administrative Service Center, Area      
                                Office, Community Service Center, CPD   
                                Field Office, Fair Housing Hub, Fair    
                                Housing Program Center, FHA/Single      
                                Family Homeownership Center, FHA        
                                Multifamily Hub, Field Legal Center, PIH
                                Hub, Property Disposition Center.       
Baltimore....................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Hub, Field Legal
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Bangor.......................  Community Service Center.                
Birmingham...................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Field Legal Hub, Local          
                                Administrative Support, PIH Hub.        
Boise........................  Community Service Center.                
Boston.......................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Hub, Fair
                                Housing Program Center, Federal Tort    
                                Claims Center, FHA Multifamily Hub,     
                                Field Legal Center, Local Administrative
                                Support, PIH Hub.                       
Buffalo......................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Hub, Field Legal  
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Burlington...................  Community Service Center.                
Camden.......................  Community Service Center.                
Caribbean....................  Area Office, Community Service Center,   
                                CPD Field Office, FHA Multifamily       
                                Programs Operation Center, Fair Housing 
                                Local Site, Field Legal Hub, Local      
                                Administrative Support, PIH Hub.        
Casper.......................  Community Service Center.                
Charleston...................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support.                 
Chicago......................  Area Office, Community Service Center,   
                                CPD Field Office, Employee Service      
                                Center, FHA Multifamily Hub, Field Legal
                                Center, Multifamily Quality Assurance   
                                Unit, PIH Special Applications Center,  
                                PIH Hub, Fair Housing Hub, Fair Housing 
                                Program Center.                         
Cincinnati...................  Community Service Center, Local          
                                Administrative Support.                 
Cleveland....................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Field Legal  
                                Hub, PIH Troubled Agency Recovery       
                                Center, Local Administrative Support,   
                                PIH Hub.                                
Columbia.....................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Columbus.....................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Hub, Field Legal
                                Hub, Local Administrative Support, PIH  
                                Program Center.                         
Coral Gables.................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Programs        
                                Operation Center, Field Legal Hub, Local
                                Administrative Support, PIH Hub.        
Dallas.......................  Community Service Center, Local          
                                Administrative Support.                 
Denver.......................  Administrative Service Center, Area      
                                Office, Community Service Center, CPD   
                                Field Office, Fair Housing Hub, Fair    
                                Housing Program Center, FHA/Single      
                                Family Homeownership Center, FHA        
                                Multifamily Hub, Field Legal Center,    
                                Local Administrative Support, PIH Hub.  
Des Moines...................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support.                 
Detroit......................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Hub, Field Legal
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Fargo........................  Community Service Center.                
Flint........................  Community Service Center.                
Fort Worth...................  Area Office, CFO Accounting Center,      
                                Community Service Center, CPD Field     
                                Office, Fair Housing Hub, Fair Housing  
                                Program Center, FHA Multifamily Hub,    
                                Field Legal Center, Local Administrative
                                Support, PIH HUB, Property Disposition  
                                Center.                                 
Fresno.......................  Community Service Center.                
Grand Rapids.................  Community Service Center, Local          
                                Administrative Support.                 
Greensboro...................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Hub, Field Legal  
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Hartford.....................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Headquarters.................  Assessment Center, Enforcement Center,   
                                PIH Grants Processing Center, Economic  
                                Development and Empowerment, Service.   

[[Page 62481]]

                                                                        
Helena.......................  Community Service Center.                
Honolulu.....................  Community Service Center, CPD Field      
                                Office, FHA Multifamily Programs        
                                Operation Center, Fair Housing Local    
                                Site, Local Administrative Support.     
Houston......................  Community Service Center, Fair Housing   
                                Local Site, FHA Multifamily Programs    
                                Operation Center, Local Administrative  
                                Support, PIH Program Center.            
Indianapolis.................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Jackson......................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Jacksonville.................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Hub, Field Legal  
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Kansas City, KS..............  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Hub, Fair
                                Housing Program Center, FHA Multifamily 
                                Hub, Field Legal Hub, Local             
                                Administrative Support, PIH Hub.        
Kansas City, MO..............  Section 8 Financial Management Center.   
Knoxville....................  Area Office, Community Service Center,   
                                Fair Housing Local Site, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support, PIH Program     
                                Center.                                 
Las Vegas....................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support.                 
Little Rock..................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Hub.                                
Los Angeles..................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Hub, Field Legal
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Louisville...................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Programs        
                                Operation Center, Local Administrative  
                                Support, PIH Hub.                       
Lubbock......................  Community Service Center, Local          
                                Administrative Support.                 
Manchester...................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support.                 
Memphis......................  Community Service Center, Field Legal    
                                Hub, Local Administrative Support, PIH  
                                Troubled Agency Recovery Center.        
Milwaukee....................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Minneapolis/St. Paul.........  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Hub, Field Legal  
                                Hub, Local Administrative Support, PIH  
                                Hub.                                    
Nashville....................  Community Service Center, CPD Field      
                                Office, FHA Multifamily Programs        
                                Operation Center, Local Administrative  
                                Support, PIH Program Center.            
New Orleans..................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Program  
                                Center, FHA Multifamily Programs        
                                Operation Center, Local Administrative  
                                Support, PIH Hub.                       
New York City................  Administrative Service Center, Area      
                                Office, Community Service Center, CPD   
                                Field Office, Fair Housing Hub, Fair    
                                Housing Program Center, FHA Multifamily 
                                Hub, Field Legal Center, PIH Hub.       
Newark.......................  Area Office, Community Service Center,   
                                CPD Field Office, FHA Multifamily       
                                Programs Operation Center, Local        
                                Administrative Support, PIH Hub.        
Oklahoma City................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Omaha........................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Field Legal Hub, Local          
                                Administrative Support, PIH Program     
                                Center.                                 
Orlando......................  Community Service Center.                
Philadelphia.................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Hub, Fair
                                Housing Program Center, FHA/Single      
                                Family Homeownership Center, FHA        
                                Multifamily Hub, Field Legal Center,    
                                Local Administrative Support, PIH Hub.  
Phoenix......................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support.                 
Pittsburgh...................  Community Service Center, CPD Field      
                                Office, Fair Housing Local Site, FHA    
                                Multifamily Programs Operation Center,  
                                Field Legal Hub, Local Administrative   
                                Support, PIH Hub.                       
Portland.....................  Community Service Center, CPD Field      
                                Office, Fair Housing Local Site, FHA    
                                Multifamily Programs Operation Center,  
                                Local Administrative Support, PIH       
                                Program Center.                         
Providence...................  Community Service Center, FHA Multifamily
                                Programs Operation Center, Local        
                                Administrative Support.                 
Reno.........................  Community Service Center.                
Richmond.....................  Community Service Center, CPD Field      
                                Office, Fair Housing Local Site, FHA    
                                Multifamily Programs Operation Center,  
                                Local Administrative Support, PIH       
                                Program Center.                         
Sacramento...................  Community Service Center, Local          
                                Administrative Support.                 
Salt Lake City...............  Community Service Center, Local          
                                Administrative Support.                 
San Antonio..................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Hub.                                
San Diego....................  Community Service Center, Local          
                                Administrative Support.                 
San Francisco................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Hub, Fair
                                Housing Program Center, FHA Multifamily 
                                Hub, Field Legal Center, Local          
                                Administrative Support, PIH Hub.        

[[Page 62482]]

                                                                        
Santa Ana....................  Community Service Center, FHA/Single     
                                Family Homeownership Center, Local      
                                Administrative Support.                 
Seattle......................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Hub, Fair
                                Housing Program Center, FHA Multifamily 
                                Hub, Field Legal Hub, Local             
                                Administrative Support, PIH Hub.        
Shreveport...................  Community Service Center, Local          
                                Administrative Support.                 
Sioux Falls..................  Community Service Center.                
Spokane......................  Community Service Center.                
Springfield..................  Community Service Center.                
St. Louis....................  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, FHA Multifamily Programs Operation
                                Center, Local Administrative Support,   
                                PIH Program Center.                     
Tampa........................  Community Service Center.                
Tucson.......................  Community Service Center.                
Tulsa........................  Community Service Center, Local          
                                Administrative Support.                 
Washington, DC...............  Area Office, Community Service Center,   
                                CPD Field Office, Fair Housing Local    
                                Site, Local Administrative Support, PIH 
                                Program Center.                         
Wilmington...................  Community Service Center.                
------------------------------------------------------------------------

III. Impact of Restructuring of Internal Operations

    HUD is publishing its cost-benefit analysis of the reorganization 
with this notice. (The reorganization of HUD proposed by the HUD 2020 
Management Reform Plan does not result in the closing of any HUD 
offices or in the reduction of services. Therefore, publication of this 
study is not required, but HUD is publishing it as a matter of policy 
to provide background for its organizational decisions.) HUD considered 
the costs and benefits that the reorganization would have particularly 
on HUD's field operations since the restructuring of internal 
operations in the field is more profound than in Headquarters. HUD's 
analysis of costs and benefits includes:
    (1) An estimate of cost savings supported by the background 
information detailing the source and substantiating the amount of the 
savings;
    (2) An estimate of the additional cost which will result from the 
reorganization;
    (3) A study of the impact on the local economy; and
    (4) An estimate of the effect of the reorganization on the 
availability, accessibility, and quality of services provided for 
recipients of those services.

A. Cost-Benefit Analysis

    Former Secretary Henry Cisneros committed to the Congress to reduce 
personnel by 3,000 employees by or near the year 2000. HUD intends to 
honor that commitment, and the HUD 2020 Management Reform Plan targets 
the year 2002 as the date by which the reduction will be achieved. By 
the year 2002, HUD staff will be reduced from its October 1, 1996 level 
of 10,500 employees to 7,500 employees. The HUD 2020 Management Reform 
Plan presents a new HUD that is staffed by this workforce of 7,500 
employees. This restructuring of internal operations presented in the 
HUD 2020 Management Reform Plan is based on the principle that HUD's 
workload can be handled by a reduced workforce. The consolidation of 
functions is designed to make it possible for a HUD workforce of 7,500 
employees to handle effectively and efficiently those functions that 
HUD must carry out to serve its constituents successfully.
    Costs associated with the HUD 2020 Management Reform Plan amount to 
$289 million. These costs are related to employee buyouts and 
relocations, facility modifications and information technology for the 
new centers, and contract support. Reform costs appear only in fiscal 
years 1998 and 1999 and would be entirely funded within budget requests 
for those years.
    Savings from the HUD 2020 Management Reform Plan begin to accrue in 
fiscal year 1999 and are primarily realized through reduced personnel 
costs and related reduced facilities needs. Figure 1 presents the 
analysis of projected savings from implementation of the Plan. The net 
present value of savings computed through fiscal year 2012 equates to 
$1.4 billion. Stated simply, the Department's planned spending for 
management is less under the Plan than it otherwise would have been. 
The value of those savings through 2012 is $1.4 billion, in today's 
dollars.
    Because the entire cost of reform will be accommodated within the 
resources already available or planned for the Department, there is no 
additional cost of the HUD 2020 Management Reform Plan. The investments 
necessary to achieve the reforms will be funded by reallocations within 
the Department's existing budget or by savings generated by the Plan. 
Hence, there is no recovery period (as that term is commonly used).

B. Impact on Local Economies

    The HUD 2020 Management Reform Plan calls for significant 
redeployment of HUD staff. Nonetheless, the proposed reorganization 
will have only a minimal economic impact on any single locality. 
Moreover, HUD expects that as the reforms contained in this Plan take 
effect, positive economic effects will accrue in all of the communities 
HUD serves, due to the Department's greater efficiency and 
responsiveness to addressing their needs.

C. Impact on the Quality of Services

    The Department's main goal in implementing the HUD 2020 Management 
Reform Plan is to improve the quality of services it provides and to do 
so in the most efficient, fiscally responsible manner possible. The 
overall effect of the proposed reforms is to change fundamentally the 
way HUD works. These reforms will make the agency more efficient, 
competent and capable of carrying out HUD's dual mission--empowering 
communities and restoring the public trust. HUD expects that its 
ability to provide services that facilitate community empowerment will 
be improved through:

--Proposed legislative reforms to create performance-based grants--many 
communities' planning processes are hampered by the uncertainty 
associated with the need to apply for competitive grants funds each 
year. The creation of performance-based formula grant programs for 
homeless assistance and Public and Indian Housing will enable 
communities to plan for their futures with an

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assurance of funding to make those plans a reality.
--The Community Builder position--in addition to other HUD staff, there 
will be in every Field Office a cadre of highly trained individuals who 
are specifically dedicated to working with HUD's partners and customers 
in helping them to access the full range of HUD services. Since HUD 
will have consolidated many program operations into ``back-office'' 
processing centers away from the Field Offices, these staff will be 
focused only on helping communities to address their housing and 
community development needs.

    Although there will be a reduction in Field Office staff levels, 
much of this reduction will be reflected in the segregation of 
processing functions to centers and hubs. Community Builders--linked by 
state-of-the-art technology to program centers, hubs, back office 
processing centers, and policy makers--will be responsible for meeting 
their communities' service needs. This specialization will thus enhance 
the public's access to high-quality services.
    Other reforms--from the consolidation of program operations to the 
creation of the Enforcement Center and legislative reforms to 
facilitate enforcement actions--will improve the quality of HUD 
services by strengthening the integrity of the underlying programs. 
Moreover, HUD's new Public Trust Officers will focus on oversight, 
leaving other staff available to provide customer service and 
processing as their primary functions. Thus, HUD expects to see 
improvements in all aspects of departmental operations and service 
delivery to the public.

IV. Conclusion

    The HUD 2020 Management Reform Plan states that ``it is paramount 
that HUD retain its scope and presence in communities across the 
country; HUD's 81 Field Offices will remain and be better focused in 
serving their constituents.'' HUD's plan calls for an increase in area 
community service centers and the establishment of community builders 
to augment the quality and quantity of service delivery to local 
communities. Through implementation of the HUD 2020 Management Reform 
Plan, HUD will maintain its presence in the communities while 
allocating resources the way a customer-friendly Department should.

    Dated: November 18, 1997.
Andrew Cuomo,
Secretary.

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[GRAPHIC] [TIFF OMITTED] TN21NO97.014


[FR Doc. 97-30763 Filed 11-19-97; 10:24 am]
BILLING CODE 4210-32-C