HUD reorganization will close dozens of field offices, affect 900 workers

Thursday - 4/25/2013, 7:58pm EDT

A major restructuring at the Department of Housing and Urban Development will close or consolidate dozens of the agency's field offices nationwide and affect 10 percent of its workforce.

The restructuring initiative was revealed to staff Wednesday. HUD officials said the current organizational model is not sustainable given the constrained budget the agency faces.

"The decision to transform and improve the agency is not easy and it was not a decision that any of us took lightly," said HUD Secretary Shaun Donovan, in a video message announcing the plan. "One thing we're not doing is looking to lay off employees."

The downsizing, which will impact the Offices of Multifamily Housing Programs and Field Policy and Management, will begin this fall and will take about 2 1/2 years to implement. All told, the initiative will save as much as $65 million annually and will affect 900 of HUD's 9,000 employees.

"Make no mistake — we will have to make tough choices. But while some of these changes will be painful, we will work to do everything we can to minimize that pain," Donovan said.

Employees affected by the restructuring will be offered relocation assistance if necessary. HUD will also offer buyouts and early retirements. Every affected employee will be offered a position with the agency, according to a HUD release.

Employees in the Multifamily Housing Programs office will see the biggest impact.

HUD plans to consolidate 50 field offices nationwide down to just 10 offices that, in turn, will report to five "hubs" located in New York, Atlanta, Chicago, Fort Worth and San Francisco.

The agency aims to save between $40 million and $50 million once the plan is fully implemented.

HUD officials also plan to close 16 of the Office of Field Policy and Management's 80 field offices in places such as Syracuse, N.Y.; Fresno, Calif.; Cincinnati, Ohio; and Shreveport, La. After the restructuring, each state will still retain at least one field office.

That will save between $11 million and $15 million, the agency estimated.

Plan went forward without union input

Maurice Jones, deputy HUD secretary, said the agency's business model is unsustainable in the current fiscal climate.

"We're in a different budget environment and we're at a point where we must make some extremely tough choices," he said in a statement.

The agency's decision, which has been in the works for about a year, was not affected by sequestration, said Jerry Brown, a HUD spokesman.

"Realistically, we don't anticipate HUD's budget significantly increasing in the coming years," he told Federal News Radio in an email. "We are taking this opportunity to reshape the organization's future before we're forced to do so by the budget."

The president of the American Federation of Government Employees Council 222, which represents 6,500 of the 9,000 employees that would be affected by the plan, said the union is still awaiting official notification from the agency.

"We can bargain and we will bargain over impact and implementation," Council President Eddie Eitches told Federal News Radio.

Eitches said the agency did not provide the union with many details before the announcement of the reorganization.

"There was no pre-decisional involvement," he said. "The plan was developed without union input."

Going forward, the union will work to reduce the number of employees forced to move by asking Congress to give the agency greater flexibility to shift funding around between offices, Eitches said.