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Votes

ARHA’s Closed Doors Open Channels

ARHA’s past is now its prelude: a cycle or whirlpool?

Once again Monday night, the Alexandria Redevelopment and Housing Authority’s Board of Commissioners proved its aversion to conducting business in an open forum. Under the justification of discussing “Legal, Real Estate and Personnel Matters,” commissioners closed their meeting after only 15 minutes to go into a three-hour executive session. Thereby shielding discussion on the meeting’s two most sensitive issues from public scrutiny.

A week prior to the meeting, a four item agenda had been circulated which indicated an executive session at the conclusion of the other three agenda items — a standard arrangement for ARHA agendas.

However, late last week a new agenda was distributed which moved the executive session from fourth to second in the pecking order.

The two items now listed under the closed session were: Revised Operating Budget and Vote approval of Resolution 358 authorizing staff to implement financing alternatives for a Quaker Hill buyout.

When asked, prior to the meeting’s commencement, why the agenda had been altered to move up the executive session, ARHA Executive Director William Dearman gave a terse answer: “I was told to.”

OF THE TWO “sensitive” discussion items, the revised operating budget consumed the majority of the three-hour closed door session as it also was impacted by the tax credit buyout. The only vote — which in accordance with state law was made in open session — was on Resolution 358. This authorized consultants to seek tax credits to be applied to Quaker Hill investor buyout efforts. It was unanimous, according to Carlyle C. “Connie” Ring, Jr., ARHA Board vice chairman.

“We accepted a recommendation of initiating a new round of tax credits through the Virginia Housing Authority. It will require us to submit an application to the state by November. If we are successful, it will enable us to pay off the present obligation on Quaker Hill,” Ring said.

The cost will be approximately $2 million. The present investor is Clorox which bought the bonds when the Quaker Hill project was initiated 15 years ago.

By purchasing Clorox’s investor interest, Quaker Hill units would be affordable housing for another 15 years, according to Ring. However, at that time the cycle would begin again.

When it came to the budget, which is now in its eighth month, Ring said, “Staff will be presenting us with options at our September meeting. We have some hard decisions to make.”

MANY OF THOSE hard decisions are being triggered by a series of financial realities. Some are the end results of decisions made in recent years, others are ghosts of the past.

At the heart of the matter is one simple fact, “ARHA’s debt is vast,” as one insider described the situation. Between deteriorating assets, missteps in accounting, shifting financial burdens and revenue streams, and U.S. Department of Housing and Urban Development’s constantly changing regulations, ARHA has ended up in a financial Catch 22.

“They are balancing the budget on reserves,” as one member of the management team put it. That was brought home Monday night when an estimated $500,000 profit shown for Glebe Park development turned out to be a $515,000 draw from reserves.

DUE TO misinterpretation of HUD regulations or ARHA staff inattention, the federal government is now demanding a “recapture” of $325,000 on Jefferson Village in addition to the $500,000 already paid as a result of the HUD audit of Section 8 funds.

There is also another $1.5 to $1.9 million recapture attributed to a misuse of federal funds due to a changed HUD policy of which ARHA staff asserted, during the closed door session, they were not aware.

Add to this the following: $6.5 million in outstanding loans on Cameron Valley; $2.5 million needed to pay off the Cameron Valley partnership; $1.2 million in taxes and interest owed to the city.

Although the successful and nationally acclaimed Chatham Square project turned a profit of $3 million, that money can not be used to satisfy other debts because it is earmarked for “public housing,” according to the briefing presented during the executive session.

As Ring noted, “Staff will be presenting a totally revised budget with options at the September meeting. That’s when those hard decisions will be made.”

Tuesday afternoon there was a meeting between ARHA and city officials at City Hall.

The outcome of that gathering is also expected to impact the ultimate decisions of ARHA’s Board of Commissioners.