Housing authority facing cutbacks

September 13, 2006

By Pat Litowitz
New Castle News

The Lawrence County Housing Authority board is bracing for cutbacks next year.

If no action is taken, the deficit could reach $400,000.

During a work session yesterday, controller Holly Girdwood discussed preliminary federal funding with authority board members.

“This is a worst-case scenario,” Girdwood said. “We need to have a plan to address this.”

The U.S. Department of Housing and Urban Development is the authority’s primary funding source. The federal agency wants the authority’s fiscal projections, including a preliminary budget, by Friday.

Usually, Girdwood said, the information is turned in by October.

“Now we have a warning, so we can work on it,” board chairman Robert Heath said.

Girdwood estimated HUD will furnish the authority with 78 percent of its 2007 funding. If that number remains unchanged, the authority will experience a $268,000 deficit. An increase in electricity prices is expected to add $132,000 to authority expenditures.

If HUD increases its contribution to 86 percent, Girdwood said the authority will have a balanced budget.

“This is in Congress’ hands,” she said.

Michael Mancuso, the board’s newest member, questioned the wisdom of quickly piecing together a budget.

“HUD will accept an out-of-balance budget?” he asked.

Girdwood said yes, because the authority has a reserve fund from which to withdraw funds if it faces a deficit scenario. Currently, authority reserves total $169,000. That number will grow to $300,000 to $400,000 next year.

“We really don’t want to tap into our reserves unless we have to,” Mancuso said.

While there is an urgency to give HUD its information, executive director Robert Evanick said the board has until December to address any issues with the 2007 budget.