Business as Usual?

This article is part of a Special
Section on “AFTER THE RECOVERY ACT: TRANSFORMATION OR BUSINESS AS USUAL?” that ran
in the November/December 2010 print issue of PA TIMES. Contact Editor
Christine Jewett McCrehin ([email protected]) for more information on
the print issue. See the Related Articles box for links to read more from the Special Section.

Josephine Gatti

Business hasn’t been “as usual” in Las Vegas, NV, for quite a while. Metropolitan Las Vegas has the highest foreclosure rate in the nation and Nevada recently surpassed Michigan in number of unemployed persons. But, economic turmoil is not the only thing not as usual in the City of Las Vegas. New collaborations, led by motivated and innovative public employees, have been created to manage the crisis and the unique demands placed on city government by receiving stimulus funds. This article draws on the experiences of the City of Las Vegas’ Neighborhood Services Department as the administrators of stimulus funds to explore issues of capacity in crisis.

Capacity is the ability of an organization to be effective. Capacity usually develops over time as individuals’ skills are absorbed by the organization, institutionalized, and then leveraged towards meeting goals. Resources, such as stimulus funding received from the federal government, are also a component of capacity. However, resources don’t insure capacity, even in crisis. Crisis situations create new challenges and demands. Capacities used in daily operations are often altogether different than those needed in a crisis. Such was the case in the Neighborhood Services Department of the City of Las Vegas. Resources, in this case, served to siphon existing capacity from the organization because they came with new demands in the form of operational stipulations.

During 2009 Las Vegas neighborhoods were in a state of immeasurable flux and deterioration. Threat or imminent foreclosure and/or job loss had caused many to abandon neighborhoods completely–an unparalleled crisis in a city that has been keen to growth not demise. In response to such crises The Housing and Economic Recovery Act (HERA) provided $3.9 Billion nationwide for the Neighborhood Stabilization Plan (NSP). The Department of Housing and Urban Development (HUD) oversaw development of NSP guidelines and allocation of funds. The City of Las Vegas received $20.6 million ($14.7 million direct allocation and $5.9 million through the State Housing Division) based on entitlement. The provisions of receiving allocations were contained in a 1,000 plus page document given to the City of Las Vegas’ Neighborhood Services Department in September of 2009.

In 2009, the Department dedicated five full-time equivalent staff to focus on this initiative. In less than a month, staff had created a plan aligned with HUD policy stipulations and operations guidelines, presented the plan to the Las Vegas City Council, made the plan available for public comment and approved the plan for submission to HUD. The plan was approved by HUD in January and funds were dispersed to the city in March.

The city’s plan reflected the HUD focus on the problem of foreclosed homes but the city itself was experiencing a problem with foreclosures. Let me explain, stipulations of the NSP required the city to either: purchase foreclosed homes at a reduced rate and sell them to qualified buyers, rent purchased properties as low-income housing, or assist qualified buyers in the purchase of foreclosed homes. A portion of the funds were also earmarked for non-profits to do similar work.

To date, the city had not administered such a program. Instead, the city’s efforts were focused on reducing foreclosures; working with current residents and community partners to identify means to avoid foreclosure. The skills and relationships developed in the goal of reducing foreclosures were not consistent with the demands of HUD’s model for neighborhood stabilization. The disconnect between federal policy and local need disabled local employees from taking full advantage of existing capacities to aide neighborhood stabilization efforts.

While learning new skills and searching for new partners, the City of Las Vegas, in the implementation of NSP, encountered many obstacles. For instance, it did not take long for private investors to enter the competitive bidding process for foreclosed homes. Meeting operational guidelines that required the city to buy homes at a 15% discount became difficult as investors hastily bought homes at close out rates. In turn, the stipulation to obligate all funds in 18 months became more difficult to achieve. Administration of the program, not to exceed 10% of the total allocation, was further mired by relationships with area residents. Residents with limited awareness of the program came to the office hoping to find aide. The city created a “helpline” to answer residents’ questions but soon found that the demand for help was so significant that a great deal of their time had to be spent meeting with residents to explain the unfortunate limitations of their services.

Staff was soon stretched between continuing current services, extending new services and communicating with area residents. Then the option to submit a competitive grant (NSP2) became available. The city had little option but to submit another detailed and time-consuming plan in the wake of such obvious need and disparity.

In contrast to other cities, Las Vegas crisis was dismal. However, they lacked capacity, in terms of community partners, to set forth a competitive plan of action for NSP2. The network of community partners available to the city is relatively small, a function of historic pattern. Las Vegas’ public service organizations’ have been industry driven – led by local industries giving back through foundations. However, as the major industries of tourism and gaming suffered, so did Las Vegas’ community service infrastructure. With few partners, the department turned to other area jurisdiction’s to bolster application efforts. Rather than compete for grant funds nearby jurisdictions pooled their capacity.

A recent conversation with Stephen Harsin, director and Lisa Morris Hibbler, deputy director of the Neighborhood Development Service’s department for the City of Las Vegas elucidates how their limited capacity was stretched to achieve immense goals.

The City of Las Vegas worked collaboratively with other area jurisdictions, (Clark County and the Cities of North Las Vegas and Henderson) to complete the NSP2 application timely. The inter-jurisdictional collaboration reflected the interconnectedness of the communities’ problems as well as the unique conditions of the Las Vegas housing market that frustrated the Department in their ability to effectively implement the NSP. The collaborative emerged to offer the much needed resources to complete the task of applying for grant funds but also of pooling data and knowledge of the crisis in Las Vegas to improve policy alternatives. Individuals that initiated the collaboration were seminal in their efforts and demonstrated forethought and innovation in working towards community goals.

Regrettably, the city lost in their bid to garner the competitively allocated NSP2 grant funds, a function of both capacity and politics. However, despite losing the grant, time spent working through NSP and the application for NSP2 had not been wasted.

Stimulus funds have changed the Neighborhood Services Department in Las Vegas. While funds regrettably have done little to halt the crisis, they have served as the impetus for capacity building efforts. Collaboration has identified critical partners for crisis situations as well as created an in-road for future shared management of daily operations. Moreover, the case demonstrates the importance of highly motivated individuals. The lament of the grant application process could have crippled the Department. Instead, highly motivated employees pursued the grant and sought new ways to be competitive. While the federal government may have placed a premium on resources and partnerships they overlooked the real capacity of the city of Las Vegas, their motivated public employees.

Josephine Gatti is a PhD candidate in public affairs at the School of Environmental and Public Affairs at the University of Nevada, Las Vegas, part of the Greenspun School of Urban Affairs. Email: [email protected]

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