Greeneville Housing Authority Bracing For Funding Cuts

Greeneville Housing Authority officials say it isn’t clear how President Donald Trump’s budget proposal will impact public housing, but the agency is expecting significant cuts to federal dollars it receives each month.

It isn’t clear yet how President Donald Trump’s budget proposal will impact public housing nationwide, but the Greeneville Housing Authority is bracing for significant reductions in the federal dollars it receives each month.

GHA administrators say the agency’s monthly operating subsidies from the U.S. Department of Housing and Urban Development seem to have dropped in the months since Trump was elected last November.

While fluctuations in the HUD subsidy have ranged from less than $2,000 to just over $6,000 in the months between October 2016 and February, GHA Executive Director Rebecca Moyer said last week that March’s subsidy is nearly $20,000 less than the prior month.

That change is expected to appear on financial statements that will be reviewed by the GHA Board of Commissioners next month.

If the trend continues, the agency could end up using savings to cover ongoing expenses or putting off projects like roofing, kitchen and bathroom renovations in its housing units.

REDUCTIONS EXPECTED

So far, GHA has not received any communication from HUD about what the future — and budget — will have in store under the new presidential administration.

Trump’s pick for HUD Secretary, Dr. Ben Carson, was confirmed earlier this month. Two weeks later, national media outlets reported that a funding “blueprint” at the federal Office of Management and Budget slashes HUD funding from roughly $46.9 billion this year to $40.7 billion for 2018.

“His budget has not been proposed to Congress, but we are probably looking at a $6 billion reduction,” Moyer said. “The two departments of HUD that are going to be hit the worst are public housing and community development block grants.”

According to Moyer, the new administration will look to local governments to support public housing.

“President Trump and the Republicans propose that municipalities take over the slack. Greeneville and Greene County can’t do it. I think we are looking at a major cut,” she said. “Since the election, our subsidy has been reduced every month.”

According to financial statements presented to the GHA Board of Commissioners during their regular monthly meetings, GHA received $54,190 in HUD operating subsidies in both October and November 2016.

Statements show the subsidy increased to $58,858 in December 2016, but dropped to $52,621 in both January and February this year.

Moyer said this week that this month’s subsidy, which will be reflected on statements prepared for the agency’s governing board next month, is significantly lower at just over $32,000.

Several years ago, GHA’s monthly operating subsidies could reach as much as $65,000, she added.

“The monthly subsidy mainly goes to utilities — paying the utilities for our residents,” Moyer said. “Fortunately, we’ve had a mild winter, but March’s subsidy probably will not entirely cover that.”

USING RESERVES,

CAPITAL NEEDS

If the March subsidy is not sufficient to cover utility costs for the agency’s 324 units and roughly 1,000 residents, the housing authority could end up dipping into its savings to make up the difference.

“We will be able to weather it for a while, because we do have a little under $1.8 million in net assets, and right under $1 million of that is investments,” Moyer said. “But we couldn’t weather it very long.”

GHA, which has reported clean audits of its financial statements each year since at least 2003, typically maintains a reserve capable of covering one year’s worth of expenses.

“My rule of thumb has always been a year of operations in reserve,” even though HUD recommends reserves to cover just eight months for an agency GHA’s size, Moyer said. “We have been a little bit ahead of what they say.”

In previous years, when GHA has realized an overall operating profit after taking in dwelling rent, fees and federal subsidies, the overages go into a fund later used for capital expenses, like repairs and upgrades, or “modernization” of housing units, as the agency is a non-profit entity.

“I think our modernization program will be impacted, too. I just don’t know how much yet,” Moyer said. “We, fortunately, have maintained our units fairly well.”

The agency had planned to use 2016 and 2017 capital fund dollars on roofing in the development that includes units on Simpson Street, Arnold Road, West Church Street and Riles Circle. Some foundation stabilization work is also needed in the same area, as are updates to kitchens and bathrooms in the units.

But, with future federal funding levels unclear, it’s uncertain how the agency will proceed with such projects.

“Used to, we would propose what we felt we needed. Now, HUD tells us what we’re going to get,” Moyer said. “Normally by now we have heard what they’re going to give us, but we haven’t yet. The agency plan is up in the air.”

GHA is required to prepare and submit an agency plan, which includes details about planned capital projects, in April.

Even though funding levels haven’t been determined, that process will continue, Moyer said. The GHA Board of Commissioners is expected to review the next year’s plan at a meeting in early April.

“We will propose an agency plan for the board. It will be interesting to see what we receive there for modernization of our units,” Moyer said. “We may not get hit hard this year, but we may.”

Moyer expressed confidence that, even with the potential for significant reductions, the agency would remain fiscally sound.

“We don’t have any choice but to weather the storm,” she said. “I think everybody’s just being wary of what’s to come. Of course, Dr. Carson is a Republican and he did grow up in the ‘projects’ — and I don’t like to use that term. I am sure he’ll be in support of whatever (funds) we receive.”