Housing authority agency rethinks layoffs; budget questions arise

jsmith@mercedsunstar.comJanuary 19, 2013 

Top housing authority officials in Merced County have backed off a demand that union employees take furlough days or face layoffs.

"We're glad that our members don't have to suffer," said Nancy Vinson, business agent with the American Federation of State, County and Municipal Employees. "They're fairly low-paid and could not weather a 10 percent salary reduction."

After Housing Authority of the County of Merced management staff laid off five union employees in December to help patch a projected budget deficit, workers were told that further cuts were necessary to save the agency.

Agency Executive Director Rennise Ferrario also said in December that if employees didn't agree to furlough days, there would be no way to continue operations. Ferrario declined to comment for this story.

While authority officials said the initial layoffs saved the agency about $266,000, they also said a further deficit of roughly $130,000 to $238,000 -- depending on federal funding levels -- needed to be fixed.

More recently, however, housing officials said the agency's immediate fiscal situation could be stabilized with about $50,000 in budget cuts.

To pay for that, the authority's nine nonunion managers agreed to take 10 percent pay reductions in the form of furloughs, according to top agency officials.

"For the next couple of months, until we find out what the final funding level is from (the Department of Housing and Urban Development) we're at a holding point," said John Dougherty, authority finance officer.

"We felt it was something that was needed," he said of the change in policy. "We felt it was the right thing to do."

Not transparent enough?

However, Vinson said she's concerned that the authority isn't being transparent with its accounting.

"The reason that all of this changed and all of the numbers changed so drastically is because we pushed them into a corner with their finances and made them accountable," she said.

Meanwhile, questions have arisen around the authority management's protocol concerning government procedure.

As a publicly funded agency, top authority officials report to a seven-member board of commissioners. Five members are from the community at large, and two are residents of the Housing Authority, according to the agency's website.

The authority's 2012-13 operating budget was approved by the board of commissioners during an October meeting. However, the item -- not published on the meeting's agenda -- was never made known to the public, according to documentation provided by the authority.

When asked if a budget approval item had been placed on the agenda, Dougherty said, "No, and probably because we didn't know if we were going to have it available to be able to take in.

"I know we were scrambling to put it together and get it into the board," he said. "Ideally, we would have had it in even a month before that."

Failing to include the budget proposal on a public agenda violates the state's Brown Act, said Terry Frank, general counsel with Californians Aware, a nonprofit specializing in open government law.

"This is an extraordinary lapse," he said. "I've never heard of this before in 30 years."

Too late to rescind

However, because the commissioners approved the budget more than 30 days ago, the public no longer can force the authority to rescind the document, he added.

Authority officials initially had signaled that the five layoffs in December were approved by the commissioners as part of the operating budget.

But recently, agency officials said the layoffs were not included in the budget and may never have been approved by the commissioners.

Top officials were unclear as to whether the commissioners were required to approve the layoffs.

In response to the question of whether laying off staff required the commissioners' approval, Robert Haden, legal counsel for the authority, said, "I don't believe there's any specific directive to that. I'm not going to make any comment. I'd rather have (Ferrario) explain it to you."

The housing authority board of commissioners holds public meetings on the third Tuesday of each month at 5:30 p.m. at 405 U St., Building B. Agendas and reports are posted at housing authority main entrance at the same location.

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or jsmith@mercedsunstar.com.

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