Will HRA lose county property tax support?

• Providing affordable housing opportunities

The Washington County Housing and Redevelopment Authority owns affordable housing developments -- including the Cobble Hill Apartments for seniors in Woodbury -- and runs homeownership assistance and foreclosure prevention programs. County commissioners this fall will decide whether to continue providing property tax dollars to the HRA. That revenue makes up 19 percent of the HRA’s annual budget. Staff photo by Scott Wente.

Talk about it

Commissioner Lisa Weik said the Washington County Housing and Redevelopment Authority does not provide an essential service, so maybe it should lose local tax funding.

As the Washington County Board tries to keep residents’ property taxes down during “extraordinary (economic) times,” Weik said, commissioners and staff ought to consider ending county support of the HRA.

“We don’t have to be in the affordable housing industry,” she said in an interview. “They’re not core and essential services.”

Weik, who represents Woodbury residents in the first district, and fellow commissioner Bill Pulkrabek of Oakdale raised the issue publicly at a Sept. 16 County Board meeting, when they voted against a preliminary 2010 levy for the HRA.

A planned 0.94-percent levy hike would bring county tax support of the HRA to about $3.32 million. The tentative budget plan passed 3-2; commissioners who supported the budget called Weik’s proposal “irresponsible” because it could actually cost the county money and create legal problems.

Treat it like 4-H?

The HRA’s 2009 budget is about $17 million. The $3.3 million it receives from county taxpayers is about 19 percent of that budget. Rent payments from tenants in the HRA’s affordable housing generate about $10 million; federal funding and other sources make up the remaining $4 million.

Even if county funding was stripped from the HRA, the agency would continue to operate, Weik predicted. She compared her proposal to how commissioners cut financial support to the Washington County 4-H program to help balance the county budget. (4-H supporters are raising money to keep the program intact at least through 2010.)

HRA Executive Director Barbara Dacy said she did not know in advance that her agency’s funding would be discussed in detail at the recent county board meeting. She said similar discussions have taken place in past years, but the HRA continued to receive county support.

That tax revenue is vital for the agency, she said.

“The short answer is no, we can’t operate without the levy money because the levy provides a good resource of funding that helps us keep our affordable housing properties affordable and enables us to deliver a wide variety of housing services,” Dacy said.

The HRA serves an average of between 4,500 and 6,200 residents each year, including through its income-based housing, homebuyer education program and foreclosure prevention counseling. Those are valuable services for the entire county, she said.

“I think everyone benefits when a foreclosure is prevented or a family or senior can find an affordable home to live in,” Dacy said.

Weik and Pulkrabek said they have no problem with how the HRA operates.

“I just fundamentally disagree with what they do,” Pulkrabek said of taxpayer-supported affordable housing.

Commissioners divided

The HRA is not a government mandated service of the county, Weik said, and the economic crisis facing taxpayers and governments requires a focus on essential programs.

But fellow commissioners said stripping the HRA of county tax dollars could cause a financial problem for the county.

With its own oversight board, the HRA operates independent of the Washington County Board. However, if the HRA could not pay its bills after losing property tax revenue, the county would be responsible for covering some of the HRA’s loan payments because the county backed some of those bonds, county officials said.

“That would be really fiscally irresponsible,” Commissioner Myra Peterson of Cottage Grove said of Weik’s proposal.

Commissioner Gary Kriesel, whose third district includes Afton, said a gradual phase-out of county tax aid to the HRA may be worth discussing in the coming months. But Kriesel, a veteran of the county board, criticized Weik’s approach. She is in her first year as a commissioner.

“You have got to articulate better than just a philosophical stand when you’re making these kind of important decisions,” Kriesel told Weik, adding that she was taking “an irresponsible position” by trying to vote down the preliminary HRA levy. If that position had prevailed, he said, the county board could not reverse its decision in December, when the final county budget is set.

Weik said her idea is “radical,” but the HRA can survive without county support. She said she did not expect a majority of commissioners to support it last week, but wants it to gain traction as budget discussions continue.

“My position,” she said, “is to make sure that this really does get some serious review over the next couple of months.”

Tags: local government, washington county, housing and redevelopment authority, news