Niagara Falls Housing Authority deals with federal cuts

As seen in the Niagara Gazette…

By Mark Scheer, Niagara Gazette

NIAGARA FALLS — Belt tightening at the federal level will have a significant impact on the finances of the Niagara Falls Housing Authority in the coming fiscal year.

The authority’s board of commissioners on Tuesday authorized a $6,003,873 operating budget that calls for the use of more than $1.6 million in reserve funds to cover operations at Spallino and Wrobel towers, Packard Court and the Harry S. Jordan Gardens public housing sites.

The use of reserves is expected to help offset significant cuts in federal subsidies for various housing programs offered by the authority.

Those subsidy cuts were included in the U.S. Department of Housing and Urban Development’s proposed 2012 budget, which HUD Secretary Shaun Donovan has characterized as a “do more with less” spending plan.

“We’re going to try to do the best we can with the least amount of money we have this year,” said Patricia Barone, deputy executive director for the Falls housing authority.

In unveiling his budget proposal, Donovan called on housing authorities across the country to “deliver results” while making “hard choices.” He has proposed cutting off first-time home buyer grants, reducing programs for the elderly and disabled and – most significant to the Falls housing authority – reducing the amount of excess funding held by public housing agencies nationwide.

Donovan has suggested that public housing authorities like those in Niagara Falls need only four to six months of reserves to operate properly and has indicated that HUD plans to “recapture” any excess funds. While public housing agencies normally used by those dollars for “rainy day” events, Donovan has told them “that rainy day is here.”

Barone said the Falls housing authority had anticipated receiving about 94 percent in subsidies for various programs in the coming fiscal year, which ends March 31, 2013. Instead, she said, HUD reduced the subsidies to 54 percent and has since taken 95 percent of that amount. Authority officials are expecting the so-called “recapturing” plan to eliminate all but four-months worth of the authority’s operating reserves with all additional dollars being pulled back by the federal government.

NFHA Executive Director Stephanie Cowart said she has filed a formal request with HUD for an “exclusion” that would allow the authority to avoid having its excess revenues recaptured. She said HUD has yet to respond to the request which was filed Oct. 28. She told board members she’s not confident the request will be honored, noting that similar “exclusions” were requested by roughly 400 public housing agencies nationwide.

“Given the federal government’s situation, it’s highly unlikely,” Cowart said.