The Mobile Housing Board (MHB) lost nearly $88,000 in the first three months of its fiscal year, according to financial information provided during a regular meeting May 13.
The board failed to meet its projected revenues in the first quarter and although expenses remained below the budgeted amount for the same January through March time period, it wasn’t enough to avoid a losing quarter, MHB Senior Vice President and Chief Financial Officer Lori Shackleford said during a presentation to the board.
Revenues were off projections by nearly $500,000, while expenditures were about $415,550 under budget. Shackleford said the staff has done a good job spending less than what was budgeted.
She told board members the housing board administration would present a revised budget, which would include three mandatory furlough days for employees to try to close the gap.
“We budgeted furlough days, but haven’t taken any,” Shackleford said. “Scheduling those days may be something we need to do as part of the budget revision.”
Board member Norman Hill calculated that if the budget is not revised, the board could lose about $800,000 by year’s end.
Part of the loss can be attributed to $107,000 the board didn’t receive in dwelling rent, Executive Director Dwayne Vaughn said, attributing the shortcoming to both a lower level of occupancy than was budgeted and residents who were unable to pay rent.
One remedy, Vaughn suggested, would be to get more aggressive with residents who can’t or won’t pay rent. For instance, he said, the board will begin reporting delinquencies to credit bureaus, something it hasn’t done before.
“If we’d collect the $107,000, we’d be in the positive right now,” Vaughn told the board.
The board also felt a $200,000 drop in the housing assistance program from what was previously budgeted.
As for occupancy levels, Vaughn told board members that most of the public housing complexes were at 90 percent occupancy, with a few exceptions. For example, he said, two complexes are in the 80 percent range, and one, Thomas James Place, is in the 60 percent range for occupancy. The numbers do not count Roger Williams Homes, which has a demolition/dispossession order pending, and Josephine Allen Homes, which is completely vacant but has had a demolition/dispossession order granted by the U.S. Department of Housing and Urban Development (HUD).
Another issue hurting the MHB, Vaughn said, is proration on the federal level, where HUD is only funding MHB at about 84 percent of costs per unit.
With new development on the horizon on both the southside corridor at Birdville and the northside at Roger Williams, Vaughn hopes the MHB can be accepted into the Rental Assistance Demonstration (RAD) program.
The RAD program would help MHB act more like a private developer by allowing it to borrow money from private sources, like banks, in order to inject new capital into projects. Currently, MHB cannot borrow from banks, Vaughn said.
He said with the RAD program, MHB would get its HUD funding through a 15-year contract and therefore wouldn’t be as vulnerable to cuts as it is now. The board currently has about $80 million in capital needs and is only receiving about $4 million to $5 million a year, roughly $2 million of which goes toward debt service, Vaughn said.
If MHB is accepted into the RAD program for its current Housing Choice revitalization efforts, it will be able to replace all of the on-site public housing — roughly 1,400 units along the southside corridor — that currently exists within the new mixed-income facilities it’s planning to build, Vaughn said. If not, the number of public units could be cut by a third to half because the mixed-income developments would require more market-rate units.
To apply for the program, however, requires the HUD regional office in Birmingham to sign off and Vaughn reported to the board that staff members from the regional office would be in town for three days, starting June 15, to look over the MHB’s books. He said field office staff would’ve been in town sooner, but they ran out of travel money.
Vaughn told board members the field office has told Washington it’s “concerned” about MHB’s finances and whether it can get into the RAD program.
In other business, the board also approved: a two-year, $240,000 contract with Cspire for voice-over-internet-protocol phone service; a three-year, $52,087.34 contract with Taylor Power Systems for generator maintenance, repair and rental services; and two, two-year contracts worth as much as $160,000 with Thomas Electric Company and Biddle’s Electric for electrical trade services.
The board was also recognized at the Mobile Area Boy Scouts Council award banquet last week for helping to bring scouting opportunities to boys in five of its housing complexes.