City Council to discuss Ypsilanti Housing Commission's Section 8 program shortfall in special Tuesday meeting

The housing commission received a notice July 23 from the U.S. Department of Housing and Urban Development that said its Section 8 Voucher program is facing a “significant and unrecoverable” $228,407 shortfall in funding.

Representatives from the housing commission are expected to be present at the 5:30 p.m. meeting at City Hall to discuss available options and to present a recovery plan to city council.

Director Walter Norris retired Aug. 4 amid the troubles and Eric Temple, the commission’s administrative specialist, was appointed interim director.

HUD said the YHC possibly could default on its obligations and the federal agency advised that it possibly would move the city’s subsidized housing vouchers to the oversight of a different agency.

The commission is responsible for administering the low-income public housing and Section 8 programs within Ypsilanti and operates as a separate legal entity from the city.

The YHC operates 218 public housing units and the commission has 271 Section 8 vouchers — not including the 68 that have yet to be made available for people seeking to live at Hamilton Crossing, the former Parkview Apartments at South Hamilton and Harrier.

In its financial management review and shortfall letter, HUD said the YHC is over-committed and there are no funds available to cover the additional expenses for the 68 project-based voucher units at Hamilton Crossing.

Director of the Office of Public Housing Willie Garret wrote to YHC Board Chair Ma’ Cheryl Jones that at current Housing Assistance Payments levels, the YHC will be able to pay approximately one-third of its current HAP obligations in November 2012 and none in December.

Housing Commissioner Deborah Strong told AnnArbor.com she was “blown away” by HUD’s findings and that the YHC is bringing in external auditors to assess the situation.

The financial management review uncovered “inappropriate use” of HAP funds and believes the YHC used the funds to cover access costs. The findings also say the YHC under-reported administrative expenses by $27,477.

Garret wrote that the YHC was considering two options to resolve the shortfall: drastically reducing HAP expenses by means of a Payment Standard Waiver and other cost saving measures or transferring the program to another housing authority with sufficient funds to properly administer the program.

In addition to that, Garret wrote that 18 families would effectively be terminated from the program because their HAP will be reduced to $0. Twenty-two families would have their share of rent increased to more than 100 percent of their monthly income.

The housing commission wasn't interested in either option and shortly after Norris retired, HUD put a third option on the table that would allow the YHC to give up the 68 vouchers for Hamilton Crossing and transfer them to another housing authority. This option would allow the YHC to avoid the more severe changes.

“They would interview and select the families,” Temple told AnnArbor.com. “The monies that we would normally get for those vouchers would go to the other agency.”

Moving forward, some city council members have expressed concern with transparency in regards to the housing commission.

Council member Pete Murdock said the report is "devastating and critical" and council is in the "dark" in terms of the next step to correct the issues.

"I think the total administration has not been doing a good job. It's clear they haven’t," he said. "We have limited options obviously and we’ve gone through this before. Just eight months ago, another report from HUD had all these criticisms and they were in the process of correcting it and in light of this new report, it obviously hasn’t happened."

City Council also will discuss amendments to the four party transportation agreement at the meeting.

Click here to see the financial management review and shortfall documents.