By Pat Loeb

PHILADELPHIA (CBS) -Departed Philadelphia Housing Authority Director Michael Kelly has acknowledged having an affair with one of his employees, just days after abruptly leaving the public housing agency.

Kelly was brought to Philadelphia in 2010 to help the agency recover from a sexual harassment scandal surrounding the long-time previous director, Carl Greene, but was undone by his own sexual indiscretion.

Interim director Kelvin Jeremiah says Kelly, who is married, had a consensual relationship with a senior manager, who left in May. He says she received no special treatment but the affair itself was improper.

“It is of course a setback for us in terms of morale.”

Jeremiah says he doesn’t think the affair should affect the return of PHA to local control. But State Representative Mike McGeehan says a bill up for a vote in Harrisburg that would let the mayor appoint his own board, should be put on hold.

“I think we need to put the brakes on, step back and let the dust settle at PHA.”

PHA is in the U.S. Department of Housing and Urban Development receivership with official Estelle Richman acting as a one-member board.