The New York City Housing Authority went on a buying spree as conditions in its apartments deteriorated, purchasing boxes and boxes of supplies that were never used as its repair backlog skyrocketed, the Daily News has learned.
For the first time, officials have admitted that for years the authority’s system for purchasing supplies was out of control and wasteful. Until last year there were 14 separate procurement offices, and the purchases were not tracked by headquarters.
“Back then it was sort of the Wild West,” Victor Martinez, who has worked at NYCHA since 2011 but was put in charge of procurement in May, told The News.
Martinez said he has merged all 14 offices and is monitoring spending.
“It was very difficult to have a coherent sense of what was going on. Imagine having 14 separate departments going out and asking for the same items at the same time,” he said.
As a result, NYCHA — which is always complaining about a lack of funds — wasn’t paying close attention to what it had in stock from year to year.
“NYCHA was basing it on historical purchases,” Martinez said. “One year you would buy 100 rakes. The next year you would only need 25 but they just went and bought the same amount, no one knowing that they still had 75 from the previous year.”
Martinez labeled the old system of buying supplies “wasteful” and emphasized, “That’s not something this administration would stand for.”
The News last week revealed that NYCHA was quietly selling off hundreds of thousands of dollars of unused supplies for pennies on the dollar out of a Long Island city warehouse.
After that report, Controller Scott Stringer hit NYCHA with subpoenas about the sales and Ritchie Torres, chairman of the council’s public housing committee, announced he’d hold hearings on it.
Late last week, a former NYCHA insider told The News each year supervisors would pressure him to order unnecessary supplies to impress federal housing officials who weren’t happy about NYCHA’s habit of sitting on federal funds.
“As the budget year was nearing to a close, and we were preparing to apply for annual federal funding from HUD, we were directed to order, order, order supplies and equipment quickly just to joust up the level of spending,” said Carl Hafner, who left in late 2011 after 32 years at NYCHA.
“We ordered reams and reams of paper, office supplies, computers, laptops, office furniture — anything and everything there was no immediate need for,” he said.
Hafner said this would inflate the three-year average of expenses so the U.S. Department of Housing and Urban Development (HUD) would think NYCHA was spending correctly.
They just wanted to keep the funding up,” he told the News. “I remember hearing this, that there was stuff stocked up in the warehouses. Stuff would just gather dust in the developments, particularly in the borough management departments.”
As the stockpile grew, NYCHA’s backlog of repair requests expanded, peaking at 420,000 in December 2012. Since then NYCHA has attacked the problem and it’s now down to about 80,000.
In 2012 NYCHA decided to tally what it owned, trucking supplies from 5,000 basement storerooms to eight warehouses.
In the end NYCHA determined it had $27.7 million worth of stuff, of which they targeted $18.1 million to sell off. Of that, NYCHA couldn’t say precisely how much was unused.
“We already went through the heartache of housekeeping,” Martinez said. “We’re cleaning from the basement up.”
Because much of this stuff has been there so long, however, it’s now selling for pennies on the dollar. Officials said much of what they’re selling is obsolete and outdated.
Take the 110 black Bond Street attaché cases NYCHA found in a storeroom, still encased in plastic. Purchased in 2003, they’re worth $79.99 a piece but NYCHA sold them for $6.45 each.
“They were popular years ago,” said NYCHA spokeswoman Jean Weinberg. “These days, very few people are walking around with these. They use backpacks or laptop bags. It would be difficult to sell these individually the way an office supply store does because they are outdated and they have been in basements for one or two decades.”
In 2009, NYCHA ordered hundreds of black acrylic “suggestion boxes” with brass locks. It appears some were distributed to developments through 2010, but a box of 338 was never opened.
Last year NYCHA got one bid and sold the whole lot for $500 — that’s $1.47 per box.
As far back as 2003 NYCHA ordered a large supply of office furniture. Twelve years later, they still had a lot of 75 pieces that had never been opened, including a big walnut bookcase, some time card boxes and 19 big conference tables made of oak or walnut.
The whole lot went for $1,661 — or $22.14 per item.
