Fittest loser
Article updated: 8/31/2012 4:53 AM

Lake County housing agency joins suit against U.S. government

Lawsuit seeks to unlock $550,000 in subsidies

David Northern

David Northern

 
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Lake County Housing Authority officials have agreed to join similar agencies across the country in a lawsuit against the federal government over the loss of funding for operations.

David Northern, the authority's executive director, said the recent decision to participate in the legal fight stems from the U.S. Department of Housing and Urban Development withholding nearly $550,000 in operating subsidies from Lake County this year, citing excess money in reserve.

Northern said the federal government shouldn't penalize local housing agencies for not spending everything. He said the loss of the $550,000 means upgrades to make Lake County public housing units more energy efficient and other improvement won't proceed as planned.

"They told us to be good stewards of your program and your program funds and we did that," Northern said Thursday.

Fund reserves are at about $2.3 million in an overall budget of $30 million in Lake County, Northern said. Housing authority board members, at a meeting Aug. 16, voted in favor of paying a $4,000 fee to join the lawsuit against HUD.

HUD has been sued by the National Association of Housing and Redevelopment Officials and the Public Housing Authorities Directors Association. The suit contends HUD is in breach of an annual contributions contract by committing $3.9 billion for public housing operations nationwide -- $1 billion less than in 2011.

Moreover, HUD is accused in the suit of withholding subsidies from some public housing agencies that are considered to have excessive fund reserves. The suit was filed in June in the U.S. Court of Federal Claims in Washington, D.C.

Northern, who is a Public Housing Authority Directors Association board trustee, said the Lake County agency has identified at least $27 million in necessary building repairs. He said the capital fund program that covers building work has declined from $1.1 million in 2010 to $254,940 in 2012.

More than 165 agencies have become part of he lawsuit against HUD, with six from Illinois, Northern said. Only agencies that join the lawsuit and become plaintiffs would be entitled to financial damages if any result from the suit, according to the National Association of Housing and Redevelopment Officials.

Lake County Housing Authority is the fourth-largest such agency in Illinois. Public funding for the quasi-governmental agency primarily comes from the federal government.

Among the authority's properties are Gurnee's Warren Manor, Hawley Manor in Grayslake, Shiloh Tower in Zion, John Kuester Manor in Wauconda, Beach Haven Tower in Round Lake Beach and Antioch's Orchard Manor and Millview Manor.

Formed in 1945, the authority supports housing for more than 11,000 Lake County residents. It also offers rent opportunities and assistance for 3,500 individuals and families in the county.

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