When Gerald Cichon became CEO of the Housing Authority of the City of El Paso, one of the nation’s largest authorities, he waded into a morass.
Now, nearly five years later, as the authority celebrates its 75th anniversary, it’s seen as an example of how an organization can be born again.
The story began here in the housing authority’s offices at 5300 E. Paisano, where Cichon (pronounced see-shawn) is sitting in front of a window.
Whoever designed the authority’s offices was apparently fearful. The building is built like a fortress and fitted with bulletproof windows.
“It’s absolutely ridiculous,” Cichon says.
But the threat to the housing authority came from inside the building. In 2008, a federal audit uncovered a quagmire of poor practices, including problems with the authority’s purchasing processes as well as conflicts of interest.
“There were a lot of problems, and when you see problems, you want to jump in and fix them,” Cichon says.
At the time, Cichon was chief counsel for the Combined Law Enforcement Association of Texas, or CLEAT, in the Western District of Texas, and was an unknown entity in the world of public housing.
But Cichon applied and was selected to fill the vacant CEO position and tasked with cleaning up the authority.
Cichon and the board quickly set about rooting out corruption, reigning in the sprawling bureaucracy and running the agency more like a business.
That was a tall order for an operation that houses 40,000 residents – about 6 percent of El Paso’s population – 450 employees and a $75-million budget.
“Government is probably one of the most inefficient entities on the planet,” says Cichon, who is enrolled in Northwestern University’s MBA program in Chicago.
Today the Housing Authority of the City of El Paso is known for its innovation, and by federal measures, it is a “high-performing agency,” consistently scoring in the 90s on a 100-point scale.
“My chief HR officer has a Ph.D. and has worked with three Fortune 100 corporations, my COO was the vice president of Ritz Carlton, and my director of finance was a vice president at Capital Bank,” Cichon says.
The authority also finds itself on better financial footing even as other housing authorities “start to wink out of existence,” Cichon says, because of government budget cuts.
El Paso’s housing authority cut its budget and started saving during the federal government’s stimulus-fueled spending boom a few years ago. Cichon says it was inevitable that there would be future spending cuts and he wanted to be ready for them.
Cichon grew up in the small steel mill town of Pueblo, Colo., where his father worked as an ear, nose and throat surgeon.
“Pretty much everybody in my family was in medicine,” he says. “Mom’s a nurse, sister’s a nurse, brother’s a doctor, another brother is in hearing aids, sister was a pharmaceutical rep; it just wasn’t for me.”
Before working as a lawyer for CLEAT, Cichon practiced as senior felony prosecutor for the El Paso District Attorney’s Office, where he prosecuted thousands of felony and misdemeanor criminal cases.
He earned his law degree from St. Mary’s University School of Law in San Antonio and his bachelor’s degree in business and marketing from the University of Colorado in Boulder. He is also a licensed Texas real estate agent.
Cichon sat down with El Paso Inc. and talked about saving the housing authority, keeping it clean and the impact of automatic budget cuts.
Q: How did the automatic budget cuts impact the City of El Paso Housing Authority’s budget?
When you total it up, we lost about $7 million of our annual budget. That reduction, it’s not coming back – not next year or the next. If things keep going the way they are with the federal government and housing authorities, they are going to start to wink out of existence.
When you are a monopoly, you don’t have any incentive to innovate. The waiting list for public housing is 10,000 to 14,000 families long, so even if I do a bad job, they’re still going to be there.
But it shouldn’t be looked at like that; that’s the reason I began to look at it from a business perspective. I’ve been looking nationally for people who are truly experts, not in public housing, but in business, to come in to make this efficient.
Q: The waiting list is more than 10,000 families long? That sounds like a very large number, but I have nothing to compare it to.
It is a large number. There’s just that much need in El Paso. The wait depends on what units you’re going for. The wait could be from five to seven years for a six-bedroom unit. For single bedrooms, especially those for elderly, the wait can be much shorter. You can get in within 12 to 14 months.
Q: As you said, there has really been little incentive for housing authorities to do better and many still look much like they did in the 1950s. What then motivated you to rock the boat?
I look at it this way. Staff is frustrated doing something that is nothing more than busywork that doesn’t need to be done. You’re working with a bureaucracy, and it is a drag sitting there having to write the same thing over and over again. When I started in 2008, the whole country was beginning to spin out of control with the budget deficits.
So on one hand you have employees who see their jobs as a morass created for them by the federal government and, on the other, you have these budget deficits. At the time, they were dumping money on us with the stimulus package, but we knew that wasn’t going to last and it was going to get much worse.
The reason we’ve been able to do what we have been able to do is because we have such a great board. They told me the most important thing was to maintain the number of families we have and build something that is sustainable no matter what the federal government does.
Q: How did you anticipate the cuts we’re seeing today?
There was no way the spending could be sustained. You had the Bush administration that had just dumped $900 billion into the economy and the Obama administration that dumped $1.3 trillion. Eventually, the boom cycle has to end.
I figured we had a period of time to take any extra funding we had and figure out ways to invest it so that those moneys could come back and support us in the lean times we knew were coming.
One of the problems El Paso has is the world never pays attention to us. Even though we are the 20th largest housing authority in the country and one of the highest rated, the same thing was happening to us. So when we had the chance to get some funding from the stimulus, I wanted to do something that brought the attention of the world to us.
Q: That was the Paisano Green Community.
That’s where the idea came from. We thought, “With so many unemployed because of this big financial debacle, what can we do that harnesses those great minds and brings them to El Paso to do something fantastic?” So we came up with the design competition, which had never been done before by a housing authority.
At the time, I had never heard of “net-zero.” That came out of the design competition. It’s a great concept; think of something that produces all the electricity that it needs. Very few net-zero multi-family communities had been built. Now people in other parts of the country are trying to replicate it.
Q: Has the community proven to be truly net-zero?
It’s costing about $8 a year per unit for electricity – that’s everything.
Q: What have you done so far as you’ve tried to apply business principles to the housing authority?
There are many, many different ways you can look at it from a business perspective – customer service, process management, efficiency. Take the lobby. Instead of just sitting there and assuming the residents are too unsophisticated to do simple data entry, we developed the new electronic system you see out front. It’s the first in the nation.
Q: It reminds me of the kiosks travelers use at airports to check in.
Exactly. What would happen before is a family would come in and my staff would just type everything they said. At the time, there were 157 forms just to get into public housing. Now residents can use the touch screens to provide some of that information directly.
Right now, to train somebody in the housing choice voucher program to be a tech it takes two years. Law school is only three years long. How hard can this be? Why should it be that difficult? The new system makes it easier, although we still have a long way to go.
Q: Did you say 157 forms?
Yes. The files for families filled boxes. I mean, files took up more of the offices than personnel who were relegated to little corners, and it was horrible.
Files were stored off-site. There was little security, and if a fire happened, you would lose 20 years worth of documents. That’s when we decided there had to be a better way.
Q: So employees are no longer relegated to little corners?
Now 100 percent of the files are stored in a computer system. It has done a lot to reduce costs, but it is just the beginning.
Q: You talk much more like a corporate CEO and much less like a government bureaucrat.
Government is probably one of the most inefficient entities on the planet. There is nothing worse than sitting here and knowing that there is all this red tape to jump through just to buy toilets, for example. I’m just trying to buy toilets. Why do I have to waste four months and all these dollars? It is extremely frustrating and wasteful.
Q: It sounds like you had a successful career as a lawyer. What convinced you to give that up to lead the housing authority? At the time, it was in bad shape.
That is exactly why I did it. There were a lot of problems, and when you see problems, you want to jump in and fix them. So I threw my hat in the ring. They were looking for somebody who was really going to clean things up.
I had real estate background and was in civil servant labor law. There were allegations of fraud and criminal activity, so having been a prosecutor was another plus.
Q: How did you and the board clean things up, and what has been done to prevent future corruption?
I know human nature can be such that corruption could seep back in, but what I’m seeing with the staff that we have, ethics is one of the most valued things we have.
I have worked with the FBI and the Office of the Inspector General and it has resulted in arrests. If you steal from us, do anything corrupt, you’re gone. We are a public entity. People should be able to look at everything we do.
When I came on board, there were a lot of people who were unqualified and should not have been in the place they were, so I removed them from the agency. Then I created a compliance team. I turned to one of the most ethical guys I know and I hired him as our in-house counsel. I told him to look at every single contract.
Then I reviewed the procurement process to make sure that procedures were in place to ensure the best bid wins. I brought in consultants to make sure we were following best practices and outside auditors. For the second year in a row, we have had a perfect financial audit.
Q: What about you? What guides your moral compass?
It comes from my family – my upbringing. My parents are Polish Catholics who raised six kids. It was always, “You do the right thing for the right reasons.” There was never a question about that. If you’re going to do it, do it right. Otherwise, why do it at all?
Q: You mentioned the housing authority here is the 20th largest in the nation. Why is there a need in El Paso for so much subsidized housing?
In part it has to do with immigration. It’s a population of hard, hard workers, but they sometimes aren’t as educated and don’t make very much. You have to look at what the median income is in El Paso and why it is so low. That is really where the need comes from.
Q: Is the poverty situation getting any better?
I haven’t seen it getting any better. In fact, for us it’s gotten worse as rents have gone up.
Q: Are residents moving up and out of subsidized housing?
That’s the social part of the job. We’re more than just bricks and mortar. We look at the generation of children as an opportunity to provide that cut with public housing.
We started the HOT Summer program two years ago. The kids are taken on a tour of campus on real UTEP buses. They are given student IDs with their pictures on them that, if they go to UTEP, become their real ID number.
These kids are like 13 years old. They’ve never been to UTEP. Going to UTEP is like going to the moon. At the end, they get to go swimming, and if they have perfect attendance, can go to a football game.
Some of the teachers at UTEP started asking why some of the kids in public housing were succeeding when others were not, and started a youth leadership academy.
Every weekend now, 8th graders come down here for four hours and work with UTEP professors. It gives the professors the opportunity to study them and the students get help getting into the Harvards, the Yales, the Stanfords.
Q: What else?
The biggest challenge is to create housing that is not generational. Right now, we are essentially clumping the poor together and asking them to go succeed.
We know that we have aging units with asbestos and are asking if we want to keep dumping money into units we know we are going to have to rebuild someday. It’s one of the big challenges we have, and we are looking to rebuild about 5,000 units.
Well, if we are going to build new housing, should we just tear down the old housing and build in the same place? Should we really continue to segregate that part of the society into one small section? This is an opportunity for us to change that.
So we’re looking at building communities on the Westside and Far East that mix public housing with market-rate housing. The whole idea is to set up public housing where you don’t have the stigma and you don’t put people where there aren’t any jobs or good schools.
Potentially, we’re talking about $1.3 billion in new investment in the city of El Paso and the repatriation of upwards of 40,000 people. This is a big deal.
Q: How do the crime rates in the public housing communities compare to the rest of the city?
It’s no worse than anything in the surrounding areas. We actually employ 40 off-duty officers that do nothing but patrol our units. I welcome people to come down and check out our communities.
Another misconception people have is our residents are lazy, and I don’t see that at all. They may not have jobs that make a lot of money, but they aren’t lazy. Don’t get me wrong, there is fraud and abuse anywhere. There are people that are going to take advantage of our system, and we do what we can to root them out.
Q: What does the housing authority do to ensure those taking advantage of the subsidies really qualify?
We’ve actually employed some retired police detectives to do nothing else but work on the fraud side. Our managers need to be keeping an eye out for it and sometimes we get tips from other residents.
Q: The Housing Authority of the City of El Paso is now proposing to merge with the much smaller county housing authority?
As I mentioned, there are a lot of housing authorities that are disappearing. It’s just too economically challenging to try to do it with the money the federal government is giving. So there are entire states that are consolidating all their units or regionalizing them.
So we put out the option and asked them, “Hey, this is happening is there anything we can do to help.” We believe there are some great benefits for the residents, the county and the city if we merge.
I’m not saying they are doing a bad job – that’s not what I’m saying – what I’m saying is there is an economy of scale we bring that is of great benefit to the residents.
Email El Paso Inc. reporter Robert Gray at email@example.com or call (915) 534-4422 ext. 105.