Elected officials from the city and county agreed to significant changes to the APCHA board’s governance process, but disagreements remain on who should have authority over the organization’s executive director.

Aspen City Council and Pitkin County commissioners reached agreement on significant governance changes for the Aspen Pitkin County Housing Authority at a joint meeting between the boards last week, but a sticking point remains on who has the ultimate authority over APCHA’s executive director.

Under the agreement hammered out between city and county elected officials on Feb. 5, the APCHA board would be recast with three appointed citizens and two elected officials — one a council member and the other a county commissioner. Two more elected officials, one from each board, would act as alternates to ensure five voting members on any issue. Currently, the APCHA board is made up of seven citizens appointed by city and county elected officials.

The other major change would give the newly reconstituted APCHA board final say over changes to workforce housing guidelines. Proposals to change the guidelines, which establish income limits, maximum pricing and qualification requirements related to work and residency, would be vetted in at least two hearings before the APCHA board with public comment, with enough time in between for elected officials to go back to their colleagues for input.

Currently, guideline changes are vetted first by the appointed APCHA board and if they are approved, both the city council and county commission must also sign off. That gives both boards veto power and has made any changes to APCHA guidelines slow going at best. These changes are an attempt to streamline the process and move policy changes forward more quickly.

City, county and APCHA staff are still working on the final details of the changes related to board structure and process and will bring both back in the coming months for formal approval, which must go through both the city council and the county commission.

Still outstanding in the discussion over APCHA governance is whether oversight of the organization’s executive director should be changed. Currently, the director reports to the Aspen city manager’s office but is advised by the APCHA board, as well as the city council and county commission.

In comments delivered at a Jan. 29 work session in front of city council, APCHA director Mike Kosdrosky, who has held the post for four years, said that he sees that arrangement as “untenable.” It forces him to serve two masters that may have conflicting interests, he said, pointing to a December blowup between the board and the city manager’s office that played a role in the resignation of both Assistant City Manager Barry Crook and City Manager Steve Barwick.

The APCHA head is given direction and recommendations by the APCHA board, but that can be overturned or directly contradicted by the city manager’s office under the current framework, Kosdrosky said in the meeting.

“It is very difficult for me and it has been over the last four years to get very clear direction,” he said.

Kosdrosky added later in that evening’s meeting that, “If anyone thinks this is a viable way of doing business I would say it absolutely is not. I would not encourage anyone to take this position [of APCHA executive director] and go through what I have had to go through.”

The current system is “untenable” and “broken,” Kosdrosky said, adding that he doesn’t “want any part of continuing down this road of having more than one master.”

He pointed to the events of December, where the city manager’s office requested that APCHA sign on as a minority partner in a city-sponsored development of 45 new rental units. When the APCHA board requested that the developer pay a fee to the organization to cover its long-term costs related to qualifying residents and enforcing guidelines, Crook made his displeasure known in an expletive-laden tirade directed at Kosdrosky and the APCHA board. The comments came as a Dec. 11 joint city-county meeting was adjourning and were witnessed by numerous public officials.

The city and its private sector development partner on the project eventually agreed to pay APCHA roughly half of what the board had initially requested but Crook resigned following blowback from the public blowup. Aspen City Council asked Barwick to resign a few weeks later, though factors involved in that decision run deeper than the issue with APCHA.

Kosdrosky argued that an APCHA board empowered to be the final authority on policy should also have final authority over the executive director, as well as APCHA’s work program.

Taking oversight of APCHA out of the city manager’s office would seem to contravene one of Aspen City Councilman Adam Frisch’s objectives in the APCHA governance discussion, which he helped launch following the difficulty encountered in an attempt to pass a new policy to do something about deferred capital maintenance seen in some affordable housing complexes.

Frisch has argued for streamlining the guidelines process and said the changes agreed to at the joint city-county meeting last week will make for a “much better structure.” But he has also framed his efforts around the perceived injustice that the vast majority of the affordable housing that is now produced is a product of city of Aspen tax dollars or mitigation requirements, yet the city council, via a joint operating agreement with Pitkin County, shares APCHA oversight and operational funding 50-50 with the county commissioners.

“We have this model where one entity has 90 percent of the money but no more than 50 percent of the say,” Frisch said in the Feb. 5 meeting, referencing the city’s real estate transfer tax and sales tax that fund affordable housing, as well as housing mitigation required from private developers. The county, in contrast, does not have a dedicated tax for affordable housing and, while it requires affordable housing compensation from private development, that activity generates far less revenue or housing units than what comes out of city of Aspen development.

The city has become the largest developer of affordable housing in the valley, but the finished product is subject to APCHA rules and regulations, which under the current system can be difficult at best to change and are subject to a Pitkin County commissioners’ veto.

According to Frisch, “building the stuff is fairly easy,” but the more difficult task is managing the units for their long-term upkeep and making sure the affordable housing program is serving the intended populations.

“The city is being pretty generous in putting a tremendous amount of money up for the construction and letting others in the valley have a fair amount of say in what’s happening with the city-built units,” Frisch said.

He noted that he is skeptical of any APCHA oversight structure that further erodes the city’s say over its housing investment.

Kosdrosky, on Jan. 29, pointed out that Pitkin County is responsible for 49 percent of the 3,000-plus units in APCHA’s inventory, with most of that county-originated stock coming online in the early decades of the 40-year-old program. That means that if APCHA were to be split up, the county would get half.

“Like any divorce it would not be pretty,” Kosdrosky said.

There is currently no political will on either the city or the county side to split up APCHA, with elected officials instead looking to rework the intergovernmental agreement.

County Manager Jon Peacock, at the Feb. 5 meeting, outlined a proposal that would convert APCHA management from its current structure, where it exists essentially as a department of the city, to one where the city acts merely as a “fiscal agent,” giving the organization more autonomy and the APCHA board more oversight authority, including hiring, firing and managing the executive director. Under the fiscal agent model, the city would still handle payroll, human resources processes and other administrative functions. While many elected officials, save Frisch, sounded favorable to such a structure, Peacock and interim city manager Sara Ott said they both have to do much more research into how a fiscal agent structure would function before any more decisions could be made.

For now, elected officials appear willing to let the new board composition and process framework play out before making more changes to APCHA oversight.

“My preference is let’s see how the board works for a while and what percentage of the problems recede,” Frisch said.

Curtis Wackerle is the editor of Aspen Daily News. He can be reached at curtis@aspendailynews.com or on Twitter @CurtisWackerle.