The county Housing Authority may have violated Maryland's Open Meetings Law when it submitted its new budget, which compensates for lost revenue from vacant apartments by further depleting the agency's reserve.
High vacancy rates in public housing forced the authority to dip into its reserve fund to avoid a $132,000 deficit, said Sandra Ervin, acting executive director.
The governing board is expected to approve the budget at its monthly meeting tonight, Ervin said. But federal housing officials in Baltimore said the authority already turned in its budget for fiscal 1992, which began July 1.
The board apparently discussed and approvedthe $2 million operating budget at a secret session, which may have violated Maryland's Open Meetings Law.
Board members and housing officials gave conflicting accounts about the sequence of events that led the U.S. Department of Housing and Urban Development to receive abudget package that includes the board's endorsement.
Ervin said the six-member board went over the budget at a "special session" closed to the public. But Chairman Charles St. Lawrence said he and his colleagues on the board discussed the budget over the phone and then gave their nod of approval at a public meeting last month. He contended the discussion took place following a closed executive session at the board's monthly meeting.
"I thought we had approved it," St. Lawrence said. "We had discussions, various phone calls and so on. After we went into the closed meeting, we opened up again and then had a final discussion on the budget."
By failing to announce and publicize the budget meeting, the authority disregarded the state's Sunshine Law, accord
ing to the state Attorney General's Office.
"Approval of budget items are subject to this law, unless you can find a valid exception," said Robert Zarnoch, assistant attorney general. "You have to give (public) notice, too."
The puzzling series of events contrasted sharply with the annual budget process at the Annapolis Housing Authority.
In May, the Annapolis authority published notices in local newspapers announcing a hearing on its $3.9 million operating budget. Tenants from the city's 10 low-income housing communities attended the meeting and made suggestions before the board approvedthe budget.
Unlike the county Housing Authority, the city agency ended up with a surplus. While the county has been struggling to renovate and lease empty units, 99 percent of Annapolis' 1,103 units wereoccupied last year, allowing the authority to boost its $800,000 reserve again.
The number of vacant apartments in the county's housing communities continued unchecked for much of last year, costing the authority rental income and matching HUD subsidies.
When 10 percent of the 1,026 units were empty, the agency lost about $180,000 in income, St. Lawrence said. Early this year, the vacancy rates in some of the seven housing projects reached 18 percent, far above HUD standards.
"We spent more money than we took in," St. Lawrence said. "Ifwe repeat that many times, then we will go bankrupt. Obviously, it is not our intention to go bankrupt."
Compensating for the lost rent continues the authority's trend of dipping into its reserves, whichhad dropped by 16 percent by the end of fiscal 1990, from $741,033 to an estimated $624,673. The fund now stands at about $600,000.
Tocompensate for lost rent, the authority continues to dip into its reserves, which had dropped by 16 percent by the end of fiscal 1990, from $741,033 to an estimated $624,673. The fund now stands at about $600,000.
St. Lawrence stressed that the agency has taken steps to avoid draining its reserve again this year. Maintenance workers have turned around many of the vacant units, and every staff member has been asked to reduce operating costs by $6 a month.
"The two things we can do is increase our (occupancy) to 100 percent and, second, reduce the cost of operations," St. Lawrence said.