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Office of the Press Secretary

For Immediate Release March 18, 1994
                         PERFORMANCE AGREEMENT
                       WILLIAM JEFFERSON CLINTON
                           HENRY G. CISNEROS

I. Introduction

The American people deserve a government that works better and costs less. The departments and agencies of the federal government hold vital keys to improving performance and to restoring the faith of the American people in their government. Many changes will need to take place for this broad goal to be realized. The purpose of performance agreements with senior officials is to establish clarity and consensus about the priorities for departmental management. They are intended to improve the management of the Executive Branch and are not intended to and do not create any legally enforceable rights. From these agreements should flow the program and management priorities of the departments. These agreements represent a beginning, a basis for continuous improvement as we reinvent our government to meet the needs and expectations of the American people.

II. The Department of Housing and Urban Development

Section One: Purpose

This agreement reflects the major objectives developed by Secretary Henry G. Cisneros for the Department of Housing and Urban Development (HUD) to achieve over the next three fiscal years as well as specific performance measures to be accomplished in Fiscal Year 1994. It also describes areas of specific support the Administration intends to provide to support the accomplishment of these objectives.

Section Two: Relationship Between Community Empowerment

Principles and Departmental Mission

For several months, a sub-cabinet community empowerment working group has been refining the core principles through which the community work of key domestic Cabinet departments might be unified and coordinated. This effort, chaired by the Vice President, articulated the following Community Empowerment Principles:

--A Commitment to Community.

--A Commitment to Support Families.

--A Commitment to Economic Lift.

--A Commitment to Reciprocity and to Balancing Individual Rights with Responsibilities.

--A Commitment to Reduce Separations by Race and Income in American Life.

To implement these Principles, employees of HUD have adopted the following statement as their Mission:

"To help people create communities of opportunity"

Section Three: Declaration of Objectives by the Secretary

To accomplish this Mission as guided by these Principles, the Secretary undertakes to accomplish the following at the Department of Housing and Urban Development:

Assist Homeless Persons and Families

Prevent homelessness, reduce the length of stay in emergency shelters and help more homeless persons and families progress to permanent housing through local HUD-assisted comprehensive homeless systems.

Reduce the Number of Distressed Public Housing Units

Reduce the number of severely distressed public housing units through project management reforms, combined with redevelopment and/or replacement of units with low-density, small-scale, carefully designed developments and housing choices throughout communities. The above will be complemented by an effort to increase the availability of housing vouchers and certificates, thereby broadening the replacement housing and locational choices of resident families.

Develop Affordable Housing and Make Homeownership A Reality for More Americans

Reform the Federal Housing Administration so that it once again becomes a positive force for developing affordable housing; reestablish Federal Housing Administration's role as a principal means by which HUD significantly increases homeownership opportunities for families; and expand state/local and public/private partnerships to further homeownership and affordable housing opportunities.

Reduce Racial Barriers

Substantially reduce racial barriers to residential mobility and enhance the ability of minorities to choose where they live, through a combination of vigorous enforcement of federal fair housing laws and creative metropolitan-wide housing and community development strategies. The goal is to reduce the spatial separation by race and income that characterizes American urban areas.

Empower Communities

Empower communities and promote community economic development by implementing the Administration's Empowerment Zones program, and work in partnership with state and local governments, community-based organizations, and the private sector to further the goals of economic development, create jobs, stimulate the economy, and appreciably improve the quality of urban life.

Create An Environment That Supports Teamwork And Organizational Excellence

Eliminate management deficiencies by developing a performance oriented planning process that anchors resources management and a systems integration strategy. The goal is to eradicate significant numbers of duplicative, inefficient and wasteful management practices, and to increase the satisfaction of HUD's customers, as measured by customer surveys.

Section Four: Subsequent Agreements by the Secretary and Assistant


To ensure the comprehensive implementation of the above objectives throughout the Department, the Secretary will enter into intradepartmental agreements with each Assistant Secretary or the equivalent in the Department. These agreements will reflect the detailed Program and Management Priorities which the Secretary has formulated with the Assistant Secretaries. These priorities will be updated at least annually. The Assistant Secretaries will, in turn, complete agreements with their key staff members to assure broad understanding of this performance agreement and commitment to its objectives.

III. Measurement and Monitoring of Performance

To measure progress against the above objectives, the Secretary is committed to accomplishing specific measurable results. Specific measures for Fiscal Year 1994 are described in Annex A.

To maintain focus and a sense of urgency and to have a real impact on performance, there will be periodic reviews of progress, discussion of difficulties encountered and agreement on appropriate actions. These will be between the President and/or his designees and Departmental officials and, with greater frequency, within the Department. Any specific reporting requirements will be developed jointly with the Department.

IV. Administration Support

In order to accomplish the above described objectives and measures during Fiscal Year 1994, the Administration's objective is to provide the Department of Housing and Urban Development with the specific support described below.

--On January 17, 1994, the President signed Executive Order Number 12892 establishing the President's Fair Housing Council and directing that all departments and agencies work together to reinvent the manner in which their housing and community development programs affirmatively further fair housing.

--Expedited review by the Office of Management and Budget of all actions pertaining to the accomplishment of the objectives contained in this performance agreement.

--Flexibility in regard to position classification and pay from the Office of Personnel Management.

V. Miscellaneous

This Agreement is intended only to improve the internal management of the Executive Branch and is not intended to and does not create any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies, its officers, or any person.

VI. Revisions

It is expected that this agreement will be revised at least annually to reflect significant changes in budget, policy, personnel, customer needs or other factors that may affect the accomplishment of objectives.

This agreement represents our joint commitment to a Department of Housing and Urban Development that works better and costs less and fulfills our sacred trust to the American people.

 Henry G. Cisneros                  William J. Clinton 
 Secretary of Housing and           President of the United States

Urban Development

Annex: Performance Measures, Fiscal Year 1994

During Fiscal Year (FY) 1994, performance will be measured by the successful accomplishment of the following specific measures:

  1. Assist Homeless Persons and Families

Output Measures:

--For the first time, 100 percent of all FY 1994 Supportive Housing projects will incorporate a comprehensive approach to homelessness providing all necessary services through a single program and service delivery mechanism.

--The Department will develop partnerships with innovative cities that significantly increase the number of persons served within each city by a continuum-of-care approach. Intended to foster independent living, the continuum-of-care approach will include

  1. outreach and assessment, 2) transitional housing combined with permanent housing, and 3) supportive services to individuals and families who may require them. The first continuum-of-care partnership will be implemented in the District of Columbia through the D.C./HUD Homeless Initiative by June 1, 1994, and pledges to increase by 2,050 persons the number receiving comprehensive transitional or permanent housing. By September 30, 1994, at least three other demonstration sites incorporating the continuum-of-care approach will have been selected and have become operational.

--HUD will initiate the plan and development for use of a military base to provide a comprehensive housing and community development program including transitional and permanent housing for homeless individuals.

--HUD will increase the number of projects awarded annually that do not separate families at entry but, instead, provide family support and counselling as needed.

Outcome Measures:

--In FY 1994, HUD will increase by 20 percent the number of projects awarded that link to permanent housing homeless persons living on the streets and being served in shelters and transitional housing.

--In FY 1994, HUD homeless programs will serve 30 percent more individuals through the continuum of care approach.

2. Reduce the Number of Distressed Public Housing Units

Output Measures:

--By the end of FY 1994, HUD will fund 35 projects (8 planning and 27 implementation) as part of the Urban Revitalization Demonstration to redevelop and replace severely distressed public housing projects.

--HUD will complete site visits and execute grant agreements with these 35 developments and the public housing authority or nonprofit lead agencies during FY 1994. These grants will involve 16,102 units of housing; 12,538 for implementation.

--During FY 1994, HUD will begin to measure the performance of implementation grantees that have executed contracts for specific tasks, (i.e. the number that have begun design work, commenced relocation, or finalized demolition decisions. By the end of FY 1994, $100 million of funds appropriated for the Urban Revitalization Demonstration will be under contract. For two-thirds of the implementation grantees HUD funded in FY 1993, support services and management improvement activities integral to the revitalization process will be under development; demolition permits from HUD will have been received and the temporary relocation of residents begun; and, rehabilitation activities will be underway. HUD will also establish performance goals for the remaining 14 implementation grantees.

--By the end of FY 1994, HUD will provide baseline data and indicators for each severely distressed housing development selected for an implementation grant. These indicators will include: income measures; crime rates; data on management (including vacancies and rent collections); and measures of physical deterioration. Other indicators may include measures of community/neighborhood satisfaction.

--To accelerate the public housing modernization pipeline by the end of FY 1994, HUD will implement a new system to distribute modernization funds within 60 days of appropriations to replace the current system which takes as long as 18 months; and implement a new data reporting system enabling the timely tracking of pipeline obligations among public housing authorities with the greatest backlogs.

Outcome Measures:

--By June 30, 1996, HUD will achieve measurable improvements in distressed public housing developments from the baseline indicators in the following areas: vacancy rates and rent collections; and physical and structural conditions.

--By September 30, 1994, HUD will develop and publish explicit outcome measures of the improved quality of life of those individuals and families that have come from distressed public housing and have been dispersed to lower-density developments or who have used voucher or certificate assistance to move from public housing.

--By June 30, 1996, HUD will achieve measurable improvements in the safety of families living in distressed properties in the following areas: crime rates, reduced vandalism costs, and increased resident satisfaction.

--By the end of FY 1994, HUD will reduce the unobligated and unexpended balances of FY 1992 modernization funds to 30 percent and 55 percent, respectively, of all FY 1992 funds reserved.

3. Develop Affordable Housing and Make Homeownership A Reality for More Americans

Output Measures:

--Through enhanced program efficiencies and without relaxing underwriting standards, HUD will respond to existing market demands for its single family products by insuring 10 percent more single family loans in FY 1994 than in the previous year (from a total of 936,897 to 1,030,400 loans.) This assumes no drastic increase in interest rates or unexpected changes in economic conditions.

--HUD will carry out all of its designated regulatory actions with respect to Fannie Mae and Freddie Mac, including issuing regulations by the end of FY 1994 that contain aggressive lowincome homeownership and central-city/underserved-borrower targets.

--HUD will develop workout strategies for 1200 financially troubled and potentially troubled multi-family projects.

--Contingent upon passage of HUD's proposed legislation and approval of the President's FY 1995 budget request, HUD will dispose of 90 multifamily properties in its inventory by the end of FY 1994.

--Through enhanced program efficiencies, HUD will respond to existing market demand for multifamily insurance across product lines by completing initial endorsements for 678 insured projects by the end of FY 1994.

Outcome Measures:

--In partnership with Fannie Mae, Freddie Mac and other private financial institutions, HUD will test new forms of risk sharing by entering into reinsurance agreements that cover the financing of 15,000 units of affordable multifamily housing by the end of FY 1994.

--HUD will enter into risk-sharing partnerships with state and local housing finance agencies for the financing of 30,000 units of affordable multifamily housing by the end of FY 1995.

--HUD will expand its single-family disposition sales incentive program from 2 to 21 field offices by March 1994 resulting in sales of 2500 properties to local governments and nonprofits by the end of FY 1995, thus increasing opportunities for affordable homeownership.

--Through the creation of seven technical and outreach working groups that include representatives of developers, lenders, advocates and local government, HUD will reduce regulations, streamline programs, and create a customer-driven environment.

--Assuming the enactment of the President's FY 1995 budget, HUD will greatly increase its existing housing counseling program resources devoted to the provision of pre-purchase counseling to low- and moderate-income first-time homebuyers.

--By the end of FY 1994, HUD will process and reach decision on 90 percent of all requests for assistance from homeowners delinquent on their mortgage within 90 days of receipt of the request.

--Contingent on acquisitions, interest rates and the economy, HUD will sell from its inventory over 68,000 single-family properties resulting in a substantial increase in the availability of decent safe housing for homeownership and improved quality of life in communities.

4. Reduce Racial Barriers

Output Measures:

--By the end of FY 1994, HUD will define lending discrimination prohibited by the Fair Housing Act, by promulgating regulations following public hearings. By the end of FY 1994, take the steps necessary to establish by the end of FY 1995 a definition of property insurance discrimination prohibited by the FHA, which will be promulgated by regulations following public hearings.

--HUD will streamline Fair Housing complaint processing to increase timeliness and improve outcomes.

--HUD will increase outreach and education about Fair Housing rights and opportunities to redress grievances, which will result in a 5 percent increase in case volume processed by HUD and its substantially equivalent State and local agencies by the end of FY 1994, and an additional 10 percent increase by the end of FY 1995.

--HUD will develop and implement a joint mortgage lending investigation strategy jointly with the Department of Justice, and hold quarterly meetings with the Department of Justice, the Office of the Comptroller of the Currency and other federal financial regulatory agencies to develop uniform policies for enforcement which prohibit mortgage lending discrimination.

--By the end of FY 1994, through the Fair Housing Initiatives Program, HUD will design and select a contractor for a national mortgage lending testing project in areas of the country with high mortgage rejection rates for Blacks and Latinos.

--Utilizing the Fair Housing Initiatives Program, HUD will fund the creation of new full-service fair housing enforcement organizations in those areas of the country which are currently unserved or underserved and/or where no state or local substantially equivalent law is in effect and no HUD office is present.

Outcome Measures:

--By the end of FY 1995, contingent upon enactment of the President's budget for HUD's enhanced mobility programs, there will be an increase of no fewer than 50,000 in the number of portable rental subsidies which minority families can use in low poverty or non-racially impacted areas.

--By the end of FY 1994, no fewer than 75 banks and mortgage companies in at least 5 metropolitan areas will sign agreements with HUD to serve as industry leaders in their communities by adopting "best practices" that will be jointly developed by HUD and the lending community. By the end of FY 1995, these institutions will have increased by 5 percent over FY 1993 the number of loans they make to minority borrowers and the number of loans they make to persons below 80 percent of median income.

--By the end of FY 1994, HUD will initiate a partnership with the Department of Justice to investigate mortgage companies supervised exclusively by HUD, which are selected for investigation based on analysis of Home Mortgage Disclosure Act data, complaints and other information .

--By the end of FY 1994, HUD will create no fewer than 12 fullservice fair housing enforcement organizations in currently unserved and underserved areas of the country. These fullservice fair housing enforcement organizations will augment the Department's fair housing enforcement efforts and will have the capability to perform a broad range of investigative activities including complaint intake counselling and testing; conduct complaint resolution; make complaint referrals to appropriate federal, state or local fair housing enforcement agencies, or to private attorneys; and perform fair housing education and outreach to the communities they serve.

5. Empower Communities

Output Measures:

--Beginning in FY 1994, HUD will implement an intensive Section 3 technical assistance effort to expand economic opportunities for low-income residents in 30 communities receiving housing and community development assistance. Section 3 of the Housing and Urban Development Act of 1968 requires that training, jobs and contract opportunities generated by HUD assistance for housing and community development be directed to the greatest possible extent to project area residents. This technical assistance effort will be provided to state and local governments, public and Indian housing agencies, private developers and their contractors, and will be taken in partnership with the Department of Labor and other federal departments.

--Beginning in FY 1994, HUD will have set in place regulations and guidelines for creating 65 urban enterprise communities and six urban empowerment zones. It will also designate these zones when communities have completed their strategic plans. In the plans, communities will set forth concrete and actionable objectives with regard to human, economic and physical development. HUD will work with the communities to ensure that they reach the goals set forth in their strategic plans.

--HUD will continue to work with communities throughout the United States to put in place a new planning, application and reporting system for four Community Planning and Development (CPD) formula grant programs. This process will contain a strong community involvement provision, with the goal of empowering residents and community organizations to play a decision-making role in formulating plans and priorities to improve their communities using CPD formula programs.

Outcome Measures:

--The commitment rate of the FY 1992 Home Investment Partnership Program (HOME) will increase from seven percent to 50 percent by June 1994, providing 10,000 new housing units.

--HUD will leverage $80 million for community development corporations that carry out the following activities: enhance the ability of community-based organizations to undertake housing and community development activities and promote employment of low-income individuals.

--Through streamlining current regulations that impede the use of Community Development Block Grant (CDBG) monies for economic development, HUD is working to increase the facility with which cities can generate new jobs in urban centers and to help cities to retain the existing employment base. By the end of FY 1995, contingent on the enactment of the President's FY 1995 budget, the use of CDBG and other community development programs for job creation and job retention will increase by 50 percent from FY 1993 levels.

6. Create an Environment That Supports Teamwork and Organizational


Output Measures:

--A work plan for implementing a new organizational structure that will eliminate one layer of review and approval and put decision making closer to the customers has been developed and met its target deadline of October 31,1993.

--Consultations have taken place with HUD employees, constituent groups, customers and partners in order to identify statutory and regulatory impediments to the efficient and effective implementation of HUD's programs and these consultations occurred by their target deadline of October 31,1993.

--The improvements to HUD's regulatory process announced by the Deputy Secretary on October 7, 1993 -- most notably the use of a "Top 25" list of priority rules and program office assumption of drafting responsibility of lower priority rules -- will increase the number of regulations and Notices of Funds Availability (NOFAs) published by about ten percent, from approximately 200 to approximately 220, with about 30 of the rule publications being top priority rules.

--The reforms of the rule clearance process announced by the Deputy Secretary on October 7, 1993 -- including limiting nonconcurrences to substantive policy and legal objections, enforcing clearance comment deadlines, using "Drop-Dead" clearance meetings, and swift resolution of disagreements by the Deputy Secretary -- will reduce the post-clearance period for priority rules by up to 50 percent, from four-six weeks to two-three weeks.

--Develop a field structure that makes the local office the focal point for community outreach and program delivery. This will be done by eliminating unnecessary layers of regional review and by direct delegation of program and administrative authority to the local field office. The plan for implementing this new field structure was announced December 1, 1993.

--By January 31, 1994, HUD will establish a HUD Training Academy to improve the delivery of training to HUD employees and to provide training to HUD intermediaries as an important investment in human capital.

--By January 31, 1994, HUD will execute a Debt Collection Performance Agreement with the Office of Management and Budget that commits the Department to a specific level of performance regarding collections.

--By February 1, 1994, the Inspector General will prepare a plan recommending a Departmental strategy to prevent and detect fraud and abuse in high-risk programs and operations, thus assuring that HUD beneficiaries are being provided safe housing, laws are enforced, and violators of HUD programs dealt with quickly through available criminal, civil and administrative processes. This plan will be coordinated with the Department of Justice (DEA and FBI) and communicated to U.S. Attorneys.

--By March 31, 1994, HUD will complete a preliminary redesign for a coherent, results-oriented resource management process anchored in HUD priorities and annual plans.

--By March 31, 1994, HUD will improve its internal control process and integrate that process into an overall management plan for the Department.

Outcome Measures:

--By October 1, 1993, HUD implemented a new administrative accounting system throughout the Department that met the target deadline.

--By March 31, 1994, HUD will implement or have in process the majority of the recommendations from the Workplace Conditions Report issued in August 1993.

--By June 30, 1994, HUD will incorporate the redesigned process of resource management into FY 1995 planning and FY 1996 budget formulation activities.

--By September 30, 1994, there will be a 50 percent increase in the number of hours devoted to the training of HUD employees and intermediaries.

--By September 30, 1994, the first phase of Departmental streamlining under the Presidential Memorandum of September 11, 1993, will be complete including reducing staff levels and increasing the span of control.

--HUD will make significant one-year improvements in the conduct of internal control activity that will be documented in the Secretary's December 1994 Report on Management Controls.

--By December 1994, HUD will take significant steps to ameliorate a majority of the legitimate impediments identified by HUD customers and referenced in A Compendium of Customer-Perceived Statutory and Regulatory Impediments to HUD's Programs.

--By December 1994, there will be an increase in customer satisfaction with the Department and its programs, as measured by customer surveys.

--By December 31, 1994, HUD will have commenced a dozen joint initiatives underway focusing on such activities as violent crime in public and assisted housing, public housing administration (procurement, bribery, embezzlement, etc.) and equity skimming by owners of insured multifamily projects.

--By December 31, 1994, the Department will have met the targets specified in the Debt Collection Performance Agreement that will result in a significantly higher level of debt collection.

7. Miscellaneous

The Performance measures set forth herein are intended only to improve the internal management of the Executive Branch and are not intended to and do not create any right, benefit, trust or responsibility, substantive or procedural, enforceable at law or equity by a party against the United States, its agencies, its officers, or any person.