Sunday, Oct. 05, 2008

Rent to go up at Benton City senior residences

By Michelle Dupler, Herald staff writer

BENTON CITY -- When Douglas Vawter got a letter saying his rent was increasing from $450 to $700 a month, his first thought was, "I can't pay that."

Vawter, 74, and his wife, Jo Ann, 69, live in one of 26 apartments for seniors at the Desert Rose Terrace housing project in Benton City. Many tenants there recently received letters from the Richland Housing Authority, which manages the project, saying their rent is going up Nov. 1.

Housing authority officials say the increase is the result of discovering a previous manager was charging too little.

"They are misunderstandings, a couple of errors," said Executive Director Al Watson.

The housing authority owns 1 percent of Desert Rose Terrace and operates the project under a management contract with Homestead Capital, the major shareholder in the project.

Watson said Homestead Capital checked the books for the project to make sure everything was in shape for annual reporting to the Washington State Housing Finance Commission and found that many tenants were being undercharged on their rent.

Connie Taresh, Watson's executive assistant, said for rent-restricted projects like Desert Rose Terrace, the commission sets maximum rents based on income and bedroom size and IRS rules.

"If there is an error in calculating someone's income, we could charge the wrong rent," she explained.

She said the housing authority is trying to work with tenants to fix the problem and get some of them subsidized Section Eight housing assistance.

Desert Rose Terrace is not a Department of Housing and Urban Development project, meaning rents are supposed to be affordable, but are not federally subsidized, Taresh said.

The Vawters said they live on a fixed income of about $1,700 a month from Social Security, which has to cover rent, utilities, food, medical bills and other expenses.

They say there's no way they can pay $700 per month in rent.

"There are people here even worse off than we are," Jo Ann Vawter said.

She said the housing authority stuck a letter on her door Friday asking her to attend a meeting with officials Wednesday, but she's reluctant to go without some kind of legal representation.

"We're going to die with our boots on, so to speak," she said. "I don't like the way seniors get treated. It's not right. We're not second-class citizens."

The issue at Desert Rose Terrace isn't the first time the Richland Housing Authority has had problems with accounting mistakes. The agency has had findings in six of the last nine audits performed by the state Auditor's Office.

Audit reports indicated the housing authority in some cases had inadequate procedures in place to keep track of its finances, or in other cases had misclassified assets or other financial information.

The housing authority also missed financial reporting deadlines for the federal grants that pay for most of its programs for some years.

Problems were found in the audits for 1999, 2002 and 2004 through 2007.

In nearly every case that the auditors found a problem, the housing authority blamed a lack of knowledge or mistakes by staff.

Watson said the work done by housing authority employees is so specialized -- requiring knowledge of complex federal regulations and requirements -- that it's hard to find and keep qualified people.

He said that employee turnover leads to mistakes, but that the housing authority works to correct each mistake pointed out by the state auditors in the next year.

The most recent audit report released this week showed that in 2007, the housing authority underreported expenses by $216,396 and overstated spending of federal money by $183,363.

"Incorrect financial statement reporting prevented Housing Authority officials, the public and other interested parties from having a complete picture of the Housing Authority's financial status and making well-informed decisions regarding the Housing Authority's Finances," the report said.

Watson said a certified public accountant now prepares the housing authority's financial statements and the agency's board set up a finance committee to review monthly financial statements.

But the bottom line is that for an agency funded almost entirely through federal money, that money is harder and harder to come by since the federal government slashed funding for the Section Eight housing program in 2005, Watson said.

Add to that more people needing services in a tough economy, and the housing authority is facing a budget crunch for 2009, he said.

"We're struggling, guaranteed," Watson said.