$246K Loss From Huntsville Housing Authority Slashes Budgets for Local Nonprofits

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HUNTSVILLE, Ala. (WHNT) – The Huntsville Housing Authority is cutting four social service agencies out of its budget because of a recent change in HUD rules.

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Our news partners with Huntsville Times/al.com report at its meeting Monday, the housing authority's volunteer Board of Commissioners voted to eliminate a total of $246,000 in funding for the Boys & Girls Clubs of North Alabama, Boy Scouts, Girl Scouts and LIFE Inc., as well as Calhoun Community College.

Boys & Girls Clubs was scheduled to get $150,000 this year to help operate its popular after-school and summer programs at the Butler Terrace and Sparkman Homes public housing developments.

Housing authority board member Dick Fountain, who also serves on the Boys & Girls Clubs board, estimates the nonprofit agency provides daily structured activities, healthy snacks and a positive environment for about 700 children living in public housing.

"This is a real blow," said Fountain. "But we're committed to keeping these clubs open. The board is just going to have to overcome it through private fundraising.

"We're the only safe haven and the only option that a lot of these kids have in the afternoon."

Housing authority board member Delvin Sullivan used to be one of those kids. Sullivan said he "grew up" in the Sparkman Homes Boys & Girls Club and was inspired to join the Army by his former Boy Scouts Scoutmaster, Albert Farrar Sr.

"If I didn't have the Boys & Girls Clubs, I wouldn't be here today," said an emotional Sullivan. "We have to find a way to fund these organizations."

HUD has expenditures in two primary areas; fixtures - housing and fixed assets - and social services, programs like the Boys & Girls Clubs.

"HUD has issued a directive for housing authorities to suspend payments for social services," explains Gary Saliba.

Saliba serves as the Board Chairman for the Boys & Girls Clubs of North Alabama.  He is the President/CEO of Saliba Asset Management and Pretium Valuation Group.

Saliba says Club officials have no intention of allowing these cuts to negatively impact services. He says the alternatives rest primarily in two areas:

"To extend and further requests from the community to privatize those expenditures and to support the programs and to elicit from foundations - not only locally - but throughout the state and other parts of the country," says Saliba.

Saliba says while the cuts will certainly pose a challenge, they are something the Boys & Girls Clubs are not all too surprised by.

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"We kind of have anticipated some of this from the standpoint of the pressures that federal, state and local budgets have been feeling for years and we have consciously made a move to privatize our budget."

Despite cuts, Saliba points out in-kind assistance from the Housing Authority will continue; that includes the use of the public housing facilities used to host club members.

"That aspect will continue which is absolutely critical," Saliba says. "If we had to leave the neighborhoods that would border on something beyond just social services - now we're talking maybe civil unrest type issues."

Luckily though, Saliba says the Housing Authority has given every indication that facilities used for social service programs will not be compromised. Saliba says the path the Boys & Girls Clubs of North Alabama have taken and are taking will mirror that their counterpart nonprofits - getting creative and continue to serve more with less.

"A difficult as it is this is simply something that has to be dealt with," Saliba said matter-of-factly. "It's not a complete shock - certainly it's a surprise that it happened now, but it's not unanticipated."

Executive Director Michael Lundy said the U.S. Department of Housing and Urban Development notified the housing authority on October 24 that capital dollars can now be used only on "bricks and mortar," not direct social services or security.

The housing authority had planned to phase out funding for social programs over a five-year period, said Lundy. In light of the new HUD rules, those contracts will all now be canceled December 31.

"This is a terrific negative impact to this housing authority," said Lundy. "Obviously, everyone is disappointed as we were."

While Boys & Girls Clubs has the largest contract, the housing authority was also providing $30,000 a year to Boy Scouts, $15,000 to Girls Scouts, $33,000 to LIFE Inc. and $18,000 to Calhoun Community College. LIFE Inc. and Calhoun operate GED programs at the Northwoods and Butler Terrace public housing sites, respectively.

Lundy said Boys & Girls Clubs and the scouting groups can continue to use housing authority-owned facilities at nominal cost. And he said the housing authority's grant writer will begin hunting right away for replacement dollars through the U.S. Department of Labor and other federal agencies.

"I just feel like we're going to be able to work through this," said Lundy.

Housing authority board Chairman Dr. Phil Redrick - like Fountain a member of the Boys & Girls Clubs board - said he plans to write to President Obama and HUD Secretary Shaun Donovan about the negative "human impact" the new rule will have on public housing residents.

Redrick asked Lundy to make it his "highest priority" to identify other funding sources for the affected nonprofits.

The money won't come from the housing authority's operating budget, which is already expected to be $1.5 million in the red for 2014.

Steve Doyle with al.com contributed to this report.

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