Housing authority dips into reserves

MISSING SUBSIDIES

Think of it this way, HUDs gonna offer subsidies for the tenants that could be in these vacant units right? But HUD’s not going to give us subsidies for vacant buildings so there's twenty some grand that we should have if we were at capacity.”

Mike Dear, FMHA Director

FORT MADISON – The Fort Madison Housing Authority is dipping into some reserve funds to help offset lease losses and finish modernization of four units.
The FMHA board of directors met Thursday at the Hillview Village to discuss the move and how it will be replaced.
According to Director Mike Dear, the authority will transfer $50,000 from investment funds in the form of CDs to operating funds. Dear said he didn’t know if there would be a penalty for cashing out some of the CD funds.
The move will still leave the authority with about $110,000 in investment revenue.
The authority has 10 units vacant right now and has lost about $70,000 in revenue this budget year due to the lack of occupancy.
However, four of those units are offline due to the remodeling that was taking place, so they technically don’t apply to the authority's occupancy percentage, which has some Dept. of Housing and Urban Development requirements.
Dear said the lack of subsidies from HUD, combined with the loss of lease revenue, amounts to the $70,000 that the authority has lost out on over the budget year which began Oct. 1, 2024.
 “Think of it this way, HUDs gonna offer subsidies for the tenants that could be in these vacant units, right? But HUD’s not going to give us subsidies for vacant buildings, so there's twenty some grand that we should have if we were at capacity. But they're not going to throw it this way because your vacancy says otherwise.
“Then there's the other side to that. You don't have the tenant and, if you don't have a tenant, then you don't have the rent. So your rent, combined with lack of subsidies and lack of tenants, gives you your total of $70,000.”
Offline units are not counted in the vacancies because they have been authorized by HUD to go through a modernization.
“Modernization means we're not putting the proverbial paint and and just your basic just quick turn. We're saying we're going to tear out cabinets, take out toilets, all of these other things, so that's what that means.”
The Housing authority currently has 134 units. With the four units being authorized by HUD to be offline, that creates an actual vacancy of six units which gives them an occupancy percentage of 95.4%.
But Dear said there is a waiting list for public housing in Fort Madison and those vacancies haven’t been filled. He said there have been some hiccups in getting the vacancies filled, both on the authority’s side, and with those on the lists.
“What I can tell you is as we unpack this a little bit more, there has to be the follow-up that's necessary to get people in units,” he said.
“The demographic that we serve doesn’t always have phones so  you have to have multiple ways to communicate with these folks and, if that isn't in place, well, then you're chasing ghosts.
“It’s not as easy as we want it to be. There is that reality to it, too, and I get that. But I also know, as someone who's done business development, that the follow through is everything. The odds increase the more you follow up.”
FMHA board chairman Chris Greenwald said some on the list had not been followed up on.
“They were not being followed up on and we’ve identified that,” Greenwald said.
The authority has undergone some heavy turnover during Dear’s tenure, including two full-time staffers that resigned last month without notice. Those two followed two others that left in Dear’s first year with the authority.
However, Dear told the board that he has hired one person with specialties in filling vacancies and another person is in the hiring process.