Housing Authority to Work Out Repayment Schedule With Town

Town officials are questioning how the Fairfield Housing Authority came to owe the town $165,000.

"It seems to be a fairly high balance," Selectman James Walsh said at Wednesday's Board of Selectmen's meeting. "I've got questions on how we got to this point. At some point, we've got to have a dialogue about this."

First Selectman Michael Tetreau, who brought the subject of the Housing Authority's debt to the selectmen's attention, said he became involved with the situation in January when he was a member of the town's Board of Finance. "Somebody had pointed out to me that minutes of the Housing Authority on the Town of Fairfield website said they owed the town money. It wasn't clear how that happened," he said.

Tetreau said he since learned that the town had been processing payroll for the Housing Authority, something he termed a "legacy" practice, and that the town stopped doing it in late 2010.

Former First Selectman Ken Flatto said in a phone interview that the town processed the Housing Authority's payroll so the Authority wouldn't have to hire a payroll service. He said the town had processed the Authority's payroll for about 20 years and that the Authority was supposed to reimburse the town.

"The town was simply performing a payroll service," Flatto said. "I heard last year the town was not reimbursed for months and the [town's] finance office started billing the Housing Authority."

Flatto said the Housing Authority was chartered by the state, similar to the Parking Authority, and had its own budget. He said he believed revenue to the Authority, which would cover salaries of its staff, came from rent that the Authority received from residents in low- to moderate-income housing managed by the Authority.

"My understanding is rents pay for salaries and maintenance," Flatto said.

The Housing Authority doesn't deny it owes the town money.

Carol Landsman, chairman of the Housing Authority's Board of Commissioners, said the Authority wants to go on a payment plan and that she thought the first payment would arrive before the end of the month.

Michael L. Gurge, the Authoritys deputy director, said in a written statement issued to the selectmen that the Authority acknowledges the debt it owes to the town. Plans to determine "a reasonable initial payment followed by a monthly payment schedule" were thrown off track when the Authority's CPA withdrew his services for personal reasons in May. The Authority is in the middle of a two-year audit and also is being restructured, according to Gurge's statement.

Gurge's statement says the Authority only recently retained a new CPA. "In relation, our first order of business with the new CPA is to review the debt owed to the Town and to initiate a payment schedule, which is already in process. An initial payment to the Town is expected to be made this month," the statement says.

Board of Finance Chairman Tom Flynn said in a phone interview that his board learned of the Housing Authority's debt to the town when Tetreau brought it up at a Board of Finance meeting and that finance board members asked for follow-up information and were waiting for a report.

Tetreau said he was assured when he was a finance board member that the town had stopped processing the Housing Authority's payroll and that "it wouldn't be happening again; we wouldn't be having any more exposure."

Town Fiscal Officer Paul Hiller said Wednesday that the town had processed the Authority's payroll through Dec. 31 of last year and that the balance owed was $165,000. "They are processing their own payroll. We are no longer doing that," Hiller said. "The last payment on the outstanding balance on the payroll was received last August."

Tetreau had put the Housing Authority's debt on the agenda of Wednesday's Board of Selectmen's meeting after Hiller reported that he had difficulty contacting the Authority's executive director, Elizabeth Gutierrez, and her staff. "I was surprised to hear from Paul Hiller this was an issue and he had trouble connecting with the director and her staff," Tetreau said. "I thought because of the dollars involved it was important we discuss it at the Board of Selectmen."

Tetreau said his first order of business was to clarify the financial relationship between the Housing Authority and the town and his second order of business was to make sure the town was reimbursed.

Teterau said the Housing Authority provided a valuable and much-needed service to the town and he wanted senior citizens who live in housing managed by the Authority to know that they wouldn't be impacted by the situation between the town and Authority.

Members of the Housing Authority were only briefly at Wednesday's Board of Selectmen's meeting. Tetreau said he looked forward to seeing them at the selectmen's Aug. 3 meeting.

"I think we can work through this and come up with a proposal," Tetreau said, referring to a repayment plan to the town. He said he was "very impressed" with the services that the Housing Authority provides to the town. "We just need to get through this speedbump," he said.