Record cuts in housing feared

By Timothy Pratt

Thursday, Jan. 16, 2003 | 11:09 a.m.

Las Vegas Valley housing authority officials are up in arms over what could be the biggest cuts in federal funds in more than two decades.

The proposed cuts, initially estimated at 30 percent of the Department of Housing and Urban Development's funds for public housing subsidies, could affect maintenance and upkeep of more than 3,200 apartments around the valley, as well as such services as tutoring for approximately 8,000 low-income residents.

"We've been hit at 5 percent, 10 percent, but never this much," said Betty Turner, executive director of the Clark County Housing Authority and a veteran in public housing. "This is sad, because of the impact it would have on people's lives."

HUD officials were re-evaluating the numbers this week and said Wednesday the proposed budget may only include a 10 percent cut. The proposals caught housing authorities by surprise and they are unsure how operations will be affected. Congress is expected to debate and approve the HUD budget in the next few weeks.

Housing authorities across the nation were told Jan. 6 of possible cuts of up to 30 percent this year.

The shortfalls were linked to $250 million in the agency's budget that was unaccounted for because of what Michael Liu, assistant secretary for HUD, called "inadvisable management practices" and an "inappropriate accounting practice."

He made those comments in a Wednesday letter to public housing authority directors nationwide.

The federal agency had failed to change its reporting and accounting systems to match its new funding formulas, Liu explained.

The Jan. 6 announcement caused an uproar among housing authorities, leading to a letter-writing campaign against the proposed cuts.

"(We're) going to try and convince the powers that be that the housing authorities are going to go bankrupt," said Ingrid Cabrera, deputy executive director for the North Las Vegas Housing Authority.

Since the federal government has not yet approved a 2003 budget for the agency, some housing authorities would suffer temporary cuts, depending on their fiscal year calendars, the notice said.

Meanwhile, the Las Vegas Housing Authority, which operates on a different fiscal year from the county and North Las Vegas agencies, found it was already affected by the cuts beginning this month, said Laura McGee, director of operations for the agency.

Las Vegas, with about 2,000 apartments subsidized by nearly $11 million in federal funds, has the most public housing in the area and would face the greatest cuts. Clark County has 961 such apartments, supported by about $2.5 million in federal funds, Turner said. And North Las Vegas has 221 public housing apartments subsidized by more than $500,000 in federal funds.

As of yet, none of the three have had to make changes in their services or programs because of the current situation. Turner said that maintenance and upkeep run up the highest bills for public housing and would be the first service reduced. But other services such as tutoring and security would follow, and there may even be layoffs, officials from the three local agencies said.

HUD apparently changed its tune Wednesday, with a notice saying the agency would be submitting a budget to Congress at approximately 90 percent of what housing authorities need for 2003. That was received as good news, but it confused local officials.

McGee, of the Las Vegas housing authority, said it "sounds like damage control by HUD ... and it's changing by the day. But if it's true, this is great news."

The official said that the changes in position were confusing. "Try and imagine what it would be like to run a business when you don't know what your funding source is," she said.

HUD had not sent the notice to the three local agencies, and they were informed by the Sun of the federal agency's apparent turnaround.

"We understand the delicate balancing act we are asking Public Housing Authorities to temporarily perform," Liu wrote in the latest notice.

Turner, the county official, said that such uncertainties had caused her agency to develop a new policy of depending less on the federal government and looking more for public-private partnerships.

Cabrera said that other housing authorities locally and across the nation are doing the same.

HUD has submitted budgets to Congress in years past that were 5 to 10 percent less than what was asked for, and local agencies cope with shortfalls of that size by seeking grants from other sources, officials said.

But if the cuts creep above 10 percent, such services as security guards or maintenance may suffer, Cabrera said.

Turner only hoped that Congress would see fit to pass the budget as described by HUD in its most recent notice, and soon.

She said that the current political situation adds even more uncertainty for public housing authorities when it comes to federal funding.

"We've been through this kind of stuff before," she said.

"But now it's a different world, post-9-11, and all the war on terror has to be paid for somehow."