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Wednesday, Aug. 31, 2016

Meeting yields no answers, only advice

Tuesday, June 24, 2003

SIKESTON - A meeting with local officials, U.S. Rep. Jo Ann Emerson and members of her staff and U.S. Department of Housing and Urban Development representatives Monday at the Sikeston Housing Authority offices yielded no answers, only advice on how better to resubmit requests and questions.

Emerson opened the meeting by listing topics to be addressed: the merger of the Scott County and Sikeston housing authorities and the related reduction in Section 8 vouchers; use of unrestricted surplus funds; the Sikeston Land Clearance Redevelopment Authority; and the federal "recapture" of excess administrative fee reserve funds provided for in the federal Fiscal Year 2003 Omnibus Bill.

Emerson said the intent of recapturing excess administrative funds was to penalize housing authorities like those in New York that have millions of dollars in surplus funds, but Sikeston and communities like it are "also bearing the brunt of this legislation."

"The Sikeston Housing Authority is one of the best in my district," Emerson continued. "I think they have managed their money exceptionally well over the years."

Addressing the merger of housing authorities, Bobby K. Henry, executive director of the Sikeston Housing Authority, said the Sikeston Housing Authority been doing all the administration anyway since 1976.

Henry said as two entities, they must keep two sets of books, have two audits and complete two financial reports and two tenant reports. Merging the two would make it more cost effective. "We would still operate countywide," he said. "Basically, nothing would change."

Henry then addressed the request to reduce the number of Section 8 vouchers for the Sikeston Housing Authority, noting the present allocation of 551 Section 8 vouchers has not changed since 1992.

The request to reduce the program by 25 percent would mean 138 fewer vouchers for a total of 413. HUD responded to the request by offering to reduce the program by 10 percent for a total of 496.

Henry said the number of applicants on the waiting list has dropped from 500 in 1990-1993 to only 39 in 2002. He added that based on occupancy requirements, "there are not enough applications to support an allocation of 551."

Bill Mitchell, a Housing Authority Board member and former mayor, said previous requests to reduce the number of Section 8 vouchers "fell on deaf ears" at HUD. The size of the reduction was "well thought out," Mitchell said. "This is the direction Sikeston wishes to go."

Roy Pierce, director of the St. Louis Area U.S. Department of Housing and Urban Development, stated he has been with HUD for 20 years. "I'm familiar with the area," Pierce said. "I'm understanding of your concerns."

Pierce said reducing to 413 when there are 481 presently in the program means leaving a number of families with no housing assistance. HUD's purpose is to "provide housing as needed in the community," Pierce said, and he can get in trouble with his superiors if he was to reduce a program while the community is showing a need. He may also face litigation like that filed in Charleston following the reduction by 56 units, he said. From a civil rights' point of view, he needs to be able to justify any reduction, Pierce said.

Regarding the large concentration of Section 8 in Sikeston, Pierce said that most eligible housing is within the city along with a hospital, good schools and jobs. "So people tend to gravitate to these locations," he said.

Noting the absence of quality, affordable housing outside of Sikeston, Pierce also agreed the merger "is the best way to go."

Steve Sikes, Sikeston Housing Authority Board member and former Sikeston mayor, said Sikeston has, historically, always addressed housing needs. He said between public housing, Section 8 vouchers and elderly housing, one in nine Sikeston homes are receiving subsidies or assistance. "We obviously are loaded up," Sikes said, adding the it has been a drain on Sikeston's infrastructure over the last 20 years.

Pierce then said he would address the "core issue" of permitted uses for unrestricted surplus funds, declaring uses must be "housing related."

Asked if setting up a rural water district would be considered "housing related," Pierce asked how it would be.

Scott County Economic Developer Jim Schwaninger answered if an area had the appropriate infrastructure, it would encourage development by contractors. He proposed the county use the money along with a Community Development Block Grant and private investors to do a one-time project, such as providing the feasibility study and start-up money for a water district.

Schwaninger also said if they knew what was permissible, they could analyze how best to meet HUD's parameters.

Pierce said as long as a proposal is not illegal or unethical, HUD is willing to work with them. He also noted HUD was now focusing on integrated public housing rather than project areas.

Emerson then opened the next topic of discussion: defining unrestricted surplus and what the funds can be used for.

HUD doesn't define exactly what kinds of projects are permissible, according to Patricia Straussner, HUD's program center coordinator. The funds may be used for low-income housing projects, which is the way the majority are using their surplus funds, she added.

Straussner advised the housing authority should put together a proposal and send it to HUD for review.

Mayor Mike Marshall said the LCRA could use the money to address dilapidated structures that need to be torn down. "We encourage home ownership and that's what we're trying to do in Sikeston," Marshall said. Once the blighted properties are torn down, developers will build, he said. "We have good ideas and good plans but we lack money."

Mike Bohannon, LCRA commissioner, said the LCRA has applied for a $125,000 Community Development Block Grant and has identified 321 dilapidated structures to tear down. If approved, the CDBG would only pay for 50-60 to be torn down at the most.

Emerson suggested putting together a public-private redevelopment partnership.

Bohannon said the LCRA Commission wants to be careful to not just move the problem to another area, adding that developers are not interested in "infilling" but are looking for a "buffer zone" of large blocks to develop.

"If not illegal or unethical we will try to work with you," Pierce repeated, but added, "We're not promising anything." He advised a comprehensive plan with lots of partners provides the best chance for approval.

The next topic was the recapture of excess administrative fee reserves by HUD.

"They took our funds," said Henry. The recapture, applicable to any entity with over $100,000, is achieved by HUD by withhold payments until reserves drops below the threshold, compelling the housing agencies affected to use operating funds while not receiving the administrative funds.

"We've been very frugal in our administration," said Henry, explaining how a surplus was achieved. Schwaninger agreed the county and city housing agencies are "now being punished for being good money managers."

Emerson said the recapture provision's sponsor, Jim Walsh, feels very strongly about the excess administrative reserves and is out to punish New York entities that managed to build up millions of dollars in surplus funds.

She advised the best they could hope to accomplish would be raising the amount so it doesn't punish smaller communities. Emerson said it also may be possible to differentiate between interest and excess administrative fees. "Most of the money is interest on interest," Schwaninger noted earlier in the meeting. "So it's our money, not HUD's."

Regarding the reduction of vouchers, Pierce advised re-evaluating the request and resubmitting it with a rationale for the reduction included.

Pierce finished by saying while he understands the frustrations, he is tied by responsibility.

"We will do anything within our latitude to work with you in any way," Pierce said, and again recommended "wider participation by the community" to enhance their proposal's chances for approval.