As the Richland Housing Authority continues to limp along on life support, Richland City Council members are wondering what happens if the authority's creditors come knocking at City Hall for payment.
Namely, council members expressed concern during a workshop Tuesday that the federal Department of Housing and Urban Development may look to the city -- which created the housing authority 30 years ago -- to repay $500,000 misappropriated from a housing voucher program.
The housing authority has been winding down business for nearly two years, and more than a year ago asked the city council for permission to dissolve, after years of financial troubles and bad audits.
Only one board member and no staff remain at the embattled agency, but it continues to retain an accountant and an attorney to help wrap up its business affairs.
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The housing authority's bookkeeping problems culminated in the federal Department of Housing and Urban Development yanking the authority's Section 8 housing voucher funding when a 2009 HUD report revealed the authority couldn't account for nearly $500,000 in Section 8 money.
The Section 8 program is a federally subsidized program that provided rental assistance through the Richland Housing Authority for more than 400 low-income families in Richland, West Richland and Benton City until HUD yanked the funding in November.
The housing authority then transferred management of its Section 8 clients, along with the HUD-funded Columbia Park Apartments, to the Kennewick Housing Authority, and board members started discussing whether the agency could stay afloat without the administration money it got from HUD.
The HUD report also found the authority had misused housing assistance payments and continued to allow a perceived conflict of interest it previously told state auditors was resolved.
The housing authority board has spent nearly two years selling off assets to pay debts, but still owns several properties in Benton City and two in Richland, said Joe Schiessl, the city's planning and redevelopment manager.
But the power to close the agency rests with the Richland City Council under state law, and the council has said it won't deactivate the housing authority as long as any liabilities remain.
The council spent about 20 minutes in a closed-door session Tuesday talking about the possible legal consequences the city could face because of the housing authority's demise, but took no actions.
Schiessl said as long as housing authority board member Britt Creer remains, he has the authority to conduct the agency's business and that should leave the city in the clear.