LBHA is facing budget shortfall HUD freezes spending at current level while revising funding formula

Staff Writer

By Carolyn O

LBHA is facing budget shortfall
HUD freezes spending at current level while revising funding formula

A drop in the level of support from the federal Department of Housing and Urban Development for Long Branch’s Housing Authority may not be felt right away, but officials say there could be problems down the road.

According to Michael Winnick, president of the Long Branch Housing Authority, HUD recently began revamping its financing rules. While it does that, the funding it provides will be frozen at this year’s level.

Because of rising costs, particularly for utility services and health-care costs for employees, HUD will provide a significantly smaller portion of the LBHA budget for the upcoming year.

According to Cindy Toy, who works in the LBHA finance department, HUD provided approximately 92 percent of the authority’s budget this year. With funding frozen at current levels that will drop to about 83 percent for the next fiscal year.

The budget shortfall created by the change will be about $130,000, Toy said.

Winnick said the housing authority also is subject to additional requirements by HUD, but there will be no additional money to support the mandated changes.

"This will have no immediate effect on the standard of living but within two to three years infrastructure and some of our programs will be affected," Winnick said.

The LBHA, currently operating with a $6 million budget (with an additional $2 million for programs), supports roughly 1,400 housing units, of which 300 are designated for senior citizens.

Because it is facing an operating shortfall, the LBHA has received approval to use 10 percent of its 2003 Comprehensive Grant, a grant funding capital improvements, as part of its operating budget.

However, that move only shifts where the LBHA will have a budget problem, according to Winnick. "If we’re not re-funded for the utilities expenses, we’ll be short on our capital program," he said. "These things aren’t a wish list; we’re not talking about putting in valet parking. These things are realistic concerns and needs. The increase of utilities and reduction in funding puts us in a difficult position."

Winnick noted that the LBHA is operating some of the oldest public housing buildings in the state, some dating back to the 1930s.

Grant Court, the first public housing in the city, was the eighth housing development in the state to receive funding from the federal government, and the building is still in use.

"What we really need is to replace them, but one of our big problems is that we’ve been maintaining the buildings too well," Winnick said.

He explained that the money available to replace public housing comes from HUD’s Hope Six program which is a competitive grant process.

"We’re competing against places like Newark, Camden and Trenton," Winnick said. "Our buildings are in good shape comparatively. If we had ignored the buildings, we would be eligible for money to replace them."

This latest revamping of the HUD formula may be part of a trend Winnick said he has seen in the last few years where the federal government is attempting to shift responsibility to local governments.

Any such move could significantly increase the burden already being carried by local taxpayers, according to the authority’s president.

Winnick pointed out that because the LBHA is tax exempt, other property owners in the city bear a significant burden because they fund much of the cost of educating the children who live in the public housing as well as all borough services, such as the police department and the department of public works that serve the facilities.

The LBHA does pay the city for additional policing at its buildings. "But that too," said Winnick, "is paid through a drug-elimination grant which will see a reduction."

The neighborhood has visible signs of drug activity, according to Winnick, and that creates a great concern he shares with other commissioners since the drug program funding has been reduced from $250,000 to $140,000. In addition said Winnick residents are looking to see if recommendations of a five-year community plan devised from residents and resident councils will be implemented. He said that may be difficult while trying to reduce the cost of housing.