[Federal Register Volume 78, Number 81 (Friday, April 26, 2013)]
[Notices]
[Pages 24765-24766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09799]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5698-N-01]


Notice of Intent To Close 16 Field Offices

AGENCY: Office of Field Policy and Management, HUD.

ACTION: Notice.

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SUMMARY: This notice advises the public that HUD intends to close the 
following 16 field offices: Camden, NJ; Syracuse, NY; Orlando, FL; 
Tampa, FL; Springfield, IL; Cincinnati, OH; Flint, MI; Grand Rapids, 
MI; Shreveport, LA; Dallas, TX; Lubbock, TX; Tucson, AZ; Fresno, CA; 
Sacramento, CA; San Diego, CA; and Spokane, WA. HUD is providing this 
notice in accordance with the 42 U.S.C. 3535.

FOR FURTHER INFORMATION CONTACT: Honor Garcia-Tomchick, Department of 
Housing and Urban Development, 451 Seventh Street SW., Room 7108, 
Washington, DC 20410; [email protected], telephone number, 
202-708-2426; TTY number for the hearing- and speech-impaired 202-708-
2565 (these telephone numbers are not toll-free).

SUPPLEMENTARY INFORMATION: In accordance with the Presidential 
Memorandum 2010-07--Disposing of Unneeded Federal Real Estate (75 FR 
33987, June 16, 2010), HUD is publishing this notice to provide notice 
of its intent to close 16 small field offices. The memorandum directs 
executive departments and agencies to accelerate efforts in identifying 
and eliminating excess properties. Agency actions are to include making 
better use of real property assets as measured by utilization and 
occupancy rates; eliminating lease arrangements that are not cost 
effective; pursuing consolidation opportunities within and across 
agencies; and increasing occupancy rates in current facilities through 
innovative approaches to space management and alternative workplace 
arrangements. Agencies are also directed to accelerate efforts to 
identify cost cutting measures to reduce operating costs.
    Based upon Section 7(p) of the Housing and Urban Development Act 
(42 U.S.C. 3535p), a plan for the reorganization of any regional, area, 
insuring, or other field office of the Department of Housing and Urban 
Development may take effect only upon the expiration of 90 days after 
publication in the Federal Register with a cost-benefit analysis of the 
plan for each affected office. Such cost-benefit analysis shall 
include, but not be limited to--(1) An estimate of cost savings 
supported by 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, where any of the 
above factors cannot be quantified, the Secretary shall provide a 
statement on the nature and extent of those factors in the cost-benefit 
analysis.

Cost Benefit Analysis

A. Background

    HUD's current field structure, consisting of 80 regional and field 
offices covering 50 states, the District of Columbia, Guam, and Puerto 
Rico, is built on the structure of the former Federal Housing 
Administration (FHA), which had insuring offices throughout the 
country. As the agency evolved into a cabinet department (1968) its 
program portfolio grew and staffing levels rose to more than 18,000 in 
1973. As a result of legislative action HUD's program portfolio has 
continued to increase in size, complexity and scope, while its staffing 
has gradually been reduced to approximately 9,300.
    HUD's existing field office structure is decades old. Advances in 
technology have made it possible and more cost effective to manage our 
workload in a more centralized fashion. Additionally, the 
standardization of processes in some of our largest programs 
(Multifamily Housing, along with troubled Public and Indian Housing 
workload, enforcement activity, and centralized administrative work) 
has also led to a diminished need for staffing in each current 
location. Closing these small field offices will allow HUD to realign 
staff resources to

[[Page 24766]]

best support program delivery, and will achieve operational savings.
    The reduction in the number of field offices helps will save money 
while still ensuring that HUD can effectively respond rapidly to the 
ever evolving mission and the budget challenges of today and tomorrow. 
Leveraging technology has allowed HUD to substantially reduce its 
footprint and costs while not significantly affecting the delivery of 
its services.

B. Description of Proposed Changes

    Sixteen (16) small field offices will be closed, affecting 
approximately 120 of HUD's 9,300 employees. This action will allow the 
Department to align staff resources to more effectively support program 
operations and reduce operational cost, while maintaining effective 
program delivery to the affected jurisdictions. The offices to be 
closed are: Camden, NJ; Syracuse, NY; Orlando, FL; Tampa, FL; 
Springfield, IL; Cincinnati, OH; Flint, MI; Grand Rapids, MI; 
Shreveport, LA; Dallas, TX; Lubbock, TX; Tucson, AZ; Fresno, CA; 
Sacramento, CA; San Diego, CA; and Spokane, WA. Employees who work in 
the aforementioned 16 field offices will have the option to either take 
a buyout or continue their HUD careers in other locations through 
directed reassignments with relocation entitlements.
    The proposed changes are expected to produce significant 
administrative savings and will result in increased occupancy rates in 
other existing facilities, thus making more efficient use of real 
property assets as measured by utilization and occupancy rates.
(1) Estimate of Cost Savings
    The closure of the 16 field offices will eliminate the cost office 
space leases and administrative costs, including transit, mail, 
copiers, telephones, security, all support services, including IT 
maintenance, totaling $3.5 million annually. The $2.7 million lease 
cost for all 16 offices is based upon HUD's occupancy agreement with 
General Services Administration (GSA). The $800,000 administrative cost 
for all 16 offices is based upon the Fiscal Year 2012 expenses.
    It is difficult to project the number of employees who will take 
advantage of the buyout, choose to relocate, or resign because these 
are individual decisions. However, it is estimated that 50-75 percent 
of the affected employees will take the buyout while 25-50 percent may 
opt to relocate. The total savings will range from $11 million to $14.9 
million annually, beginning 2014. The savings will include lease and 
administrative costs as well as salary and benefit costs from the 50-75 
percent of affected employees who may take advantage of the buyout.
(2) Estimate of the Additional Cost
    Implementation costs are expected in closing the offices, thus the 
projected total annual savings, which ranges from $11 million to $14.9 
million, will be gained beginning in 2014 and every year thereafter.
a. One Time Costs
    i. Early lease termination cost ($108,000-$211,000). The early 
lease termination cost range is based on GSA's ability to find a 
replacement lessee for the office space.
    ii. Buyout cost (approximately $2.3 million-$3.4 million). It is 
estimated that 50-75 percent of the employees in the 16 field offices 
will take the buyout. The anticipated total cost includes the buyout 
and estimated terminal leave costs.
    iii. Personnel relocation cost (approximately $2.2 million-$4.3 
million). It is estimated between 25-50 percent in the 16 field offices 
will opt to continue their HUD careers in other locations via directed 
reassignments, with relocation entitlements.
    iv. Severance or unemployment compensation costs ($0). No severance 
costs are associated with this initiative since no termination of staff 
is expected.
    v. Office closure costs ($1.3 million). The estimated office 
closure costs include tenant improvement costs, project cancellation 
costs, physical property removal and restoration costs, shipment of 
files, disconnecting telecom, uninstalling security systems, and rent 
due at closure.
    vi. Space alteration costs ($61,000-$122,000). Space alteration 
cost is estimated at $2,000 per employee. Cost range is based upon 
estimated number of employees who will relocate.
b. Reoccurring Costs
    Program delivery to the affected jurisdiction is already managed by 
program staff in other HUD field offices. Minimal additional travel 
costs will be incurred by limited staff travel to the affected 
jurisdictions to ensure ongoing coordination of program delivery and 
customer service.
(3) Study of the Impact on the Local Economy
    Any impact on the local economies in terms of housing, schools, 
public services, taxes, employment and traffic congestion will be 
minimal. HUD staff within each state, and Puerto Rico and Washington, 
DC, will work with clients in the affected office closure areas to 
ensure uninterrupted, quality service is provided going forward. The 
realignment of personnel and office closures should not disrupt the 
service delivery currently provided to the communities.
(4) Estimate of the Effect of the Reorganization
    HUD products and services provided to the communities in the 
affected jurisdictions are currently managed remotely from larger HUD 
offices, and this will continue to be the case.
    Following the closure of these small offices, HUD will retain one 
or more field offices in each state:
    a. Camden, NJ field office--HUD will retain the field office in 
Newark, NJ.
    b. Syracuse, NY field office--HUD will retain the Buffalo and 
Albany field offices, as well as the regional office in New York City.
    c. Orlando, FL and Tampa, FL field offices--HUD will retain the 
field offices in Jacksonville and Miami, FL.
    d. Springfield, IL field office--HUD will retain the regional 
office in Chicago, IL.
    e. Cincinnati, OH field office--HUD will retain the field offices 
in Cleveland and Columbus, OH.
    f. Flint, MI and Grand Rapids, MI field offices--HUD will retain 
the field office in Detroit, MI.
    g. Shreveport, LA field office--HUD will retain the field office in 
New Orleans, LA.
    h. Dallas, TX and Lubbock, TX field offices--HUD will retain the 
field offices in Houston and San Antonio, as well as the regional 
office in Fort Worth, TX.
    i. Tucson, AZ field office--HUD will retain the field office in 
Phoenix, AZ.
    j. Sacramento, San Diego, and Fresno field offices--HUD will retain 
the field offices in Los Angeles and Santa Ana, as well as the regional 
office in San Francisco, CA.
    k. Spokane, WA field office--HUD will retain the regional office in 
Seattle, WA.

    Dated: April 17, 2013.
Patricia A. Hoban-Moore,
Assistant Deputy Secretary,
[FR Doc. 2013-09799 Filed 4-25-13; 8:45 am]
BILLING CODE 4210-67-P