MERCED -- As top officials with the Housing Authority of Merced County continue to pursue cost-saving measures, union leaders allege coercion and unfair labor practices.
After recently announcing five layoffs, the housing authority continues to seek a roughly 10 percent pay cut in the form of 26 furlough days from about 15 union employees.
"If they don't agree to the furlough days, there is no way for us to continue operating. We will have to do continued layoffs," said Rennise Ferrario, housing authority executive director.
At the same time, the union said Ferrario violated state labor protections during a staff meeting Tuesday, alleging the housing authority leader inappropriately spoke to employees about the proposed pay cuts.
"She told them that if they didn't take furloughs that people would be laid off and lose their jobs and possibly the entire department would close," said Nancy Vinson, business agent with the American Federation of State, County and Municipal Employees.
The union said it plans to file an unfair practice claim with the California Public Employees Relations Board.
"We are in active negotiations over furloughs, and she went directly to the employees and tried to coerce them into agreeing with the furloughs," she said.
Ferrario disputed the claim.
"I never coerced them in anyway shape or form," she said. "But as the director of this agency, I do believe I had a responsibility to respond to the newspaper article that said we were acting prematurely."
The dispute has been brewing for months after the housing authority ended its fiscal year this fall with a $398,979 overrun in administrative costs, according to the accounting staff.
Housing authority officials said federal Section 8 administration funding dipped dramatically last year as costs continued to increase for the third year in a row.
Without significant cost-saving measures, authority officials said by next fall the agency would drain its Section 8 reserve funds, which stands at about $250,000.
That administrative funding pays for a significant portion of the staffing at the housing authority, said John Dougherty, finance officer for the agency. If the Section 8 program were to go bankrupt, the entire agency could be dissolved.
"If we run the funding down to zero, (the Department of Housing and Urban Development) would probably come put the program in receivership and take it," he said
HUD spokeswoman Gene Gibson, agreed.
"The main philosophy is the local people know how to run their operation better than the federal government," Gibson said. "But in some cases, if the federal government does step in, the operation can cease to exist because of disorganization."
After the recent layoffs, accounting official projected this year's Section 8 administrative budget shortfall could between about $130,179 and $238,579 depending on federal funding levels. The layoffs will save about $266,201.
If the union accepts the furloughs it will save another $36,000. Management has said it will also take pay cuts but did not say exactly how much that would save.
However, that still leaves a sizable administrative cost overrun still to deal with for the housing authority.
"We don't agree that it could not be resolved by better management or other means," Vinson said. "They're considering the employees low-hanging fruit."
Ferrario said the housing authority can get there, but it might take even more painful cuts.
"You can't continue to deplete your reserves and keep the doors open," she said. "You have to try to remain fiscally sound. When you know you're depleting your reserves, you have to put the brakes on."
Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.
BY THE NUMBERS
Federal funding for Section 8 administration fees for the Housing Authority of Merced County pays for a significant portion of the agency's staff, according to housing authority officials. That funding dropped dramatically last year and is likely to continue at reduced levels putting the entire agency in jeopardy.
Housing authority Section 8 administrative funding and costs, according to agency officials:
• Funding for fiscal year 2009-10 was $1,874,852 with costs at $1,840,113.
• Funding for fiscal year 2010-11 was $1,874.852 with costs at $1,907,061.
• Funding for fiscal year 2011-12 was 1,696,590 with costs at 2,095,569.
At present spending levels, the projected cost over run for fiscal year 2012-13 is between about $130,000 and $238,000, depending on federal funding levels.
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