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A man walks a dog at the Hacienda public housing apartment complex in Richmond, Calif. on Wednesday, Feb. 19, 2014. (Kristopher Skinner/Bay Area News Group)

RICHMOND -- The City Council moved forward with a plan to relocate 130 tenants from the dilapidated Hacienda housing project -- an operation that could cost nearly $700,000 but one city leaders hope will be paid for with federal money.

"One option (for relocation) is HUD-supported, and one is paid for by the (city's) General Fund," City Manager Bill Lindsay said. "Those are the only sources we have."

The council vote Tuesday directs staff to prepare a plan to relocate residents within 30 days while putting in an application with the U.S. Department of Housing and Urban Development to be reimbursed for that relocation, including the issuance of new vouchers to provide the residents housing alternatives. A 30-day public review process would follow. If the plan is approved, Hacienda residents could get 90-day move-out notices soon after, along with help from staff in finding new places to live.

"We hope to have people relocating during the period between 61 and 150 days from today," Lindsay said in a phone interview Wednesday.

The city's 550 public housing units are more than 90 percent occupied, Housing Director Tim Jones said, meaning the system can't absorb Hacienda tenants into other housing projects.

Troubles at the Hacienda and other structures managed by the Richmond Housing Authority came to light in February, when news reports characterized the housing authority as among the most troubled in the nation, beset by mounting debt, sloppy procurement practices, misuse of public funds and poor staff performance. The agency has been on HUD's list of the most "troubled" housing agencies in the country since 2009.


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Jones was described by HUD as "ineffective."

On Tuesday, Jones said restoration of the building and relocation of the tenants may be the option more likely to draw new funds from HUD, including money for relocation of current residents.

The roof of the six-floor building leaks so badly -- despite several contracts being awarded in recent years to fix it -- that the top floor is vacant, costing the authority tens of thousands of dollars in lost rent in recent years and leaving needy residents without housing. An independent contractor told the council Tuesday that recent inspections revealed that five of 28 inspected units needed significant mold remediation, including replacing moldy walls.

Jones said interviews with tenants would begin this month to better assess where they want to go.

Jones added that if HUD doesn't pick up the tab, the cash-strapped city may have to reduce its allotment of Section 8 housing vouchers. The city's General Fund reserves are at $7 million and dwindling because tax receipts were lower than expected in the past year, and relocation from Hacienda could burn 10 percent of those reserves.

Councilman Tom Butt, who has questioned the validity of reports claiming that the Hacienda is unliveable, said the blame lies with HUD for insufficient funding.

"(HUD) wants us to run a Champagne project on a light beer budget," Butt said.

Butt added a friendly amendment, accepted by Mayor Gayle McLaughlin, to direct staff to prepare a report on the consequences of ceding control of public housing systems in the city to HUD. Officials from HUD have said they want the city to administer the program and do a better job.

"Make it their problem and not ours," Butt said.

Lindsay said local control is desirable, but his staff would prepare a report.

"HUD has confirmed we can basically walk away from the building -- it's still owned by HUD," Lindsay said. "But while our performance needs to be better, I think local control is important for better services."

Reports of problems at the Hacienda and in housing authority management have continued to trickle in over recent weeks. Last week, a member of the advisory commission that oversees the system released documents showing that he reported issues. City Council members, who serve as the governing commission for the housing authority, said those reports never got past Jones and Councilman Corky Boozé, who was the liaison between the housing authority and his council colleagues. Boozé blamed Jones for not adequately addressing the complaints and said he did not know the advisory commission reports were supposed to go to the council per local law.

Councilman Jim Rogers said he is "skeptical that having HUD take over would be a good idea," but he supports the relocation and is hopeful that HUD will pick up the tab.

"We dropped the ball," Rogers said. "The buck stops with us."

Contact Robert Rogers at 510-262-2726. Follow him at Twitter.com/SFBaynewsrogers.