La Joya Housing Authority board reluctantly approves budget with nearly $22,000 deficit

This article appeared in the Jan. 7 issue of the Progress Times.

The La Joya Housing Authority board reluctantly approved a budget with a nearly $22,000 deficit last week.

Executive Director Ruben Villarreal assured the board the deficit wasn’t actually a problem.

“Having a deficit, as minor as it is, is absolutely normal,” Villarreal said. “We’re not supposed to be creating revenue, we’re supposed to be using revenue.”

The board wasn’t convinced, but members reluctantly approved the budget anyway to meet a Dec. 31 deadline.

“Can we get an extension on approving the budget?” said board Chairman Jaime Gaitan. “What would happen if we don’t approve it?”

The housing authority would be “cited” by the U.S. Department of Housing and Urban Development, Villarreal said, if they failed to meet the Dec. 31 deadline.

Villarreal said the housing authority provided financial information to Urlaub & Co., an accounting firm based in Ada, Oklahoma, on Dec. 2.

The housing authority hired Urlaub & Co. because the firm specializes in governmental and nonprofit accounting. It handles audits, budgets and other tasks for “150 housing agencies in 22 states,” according to the firm’s website.

The proposed budget included a 5% raise for Villarreal, which is part of his employment contract, and a $1 per hour raise for three hourly employees. Villarreal said the budget also included the purchase of a new truck and the elimination of one position, which had been vacant for months.

An accountant with Urlaub & Co. provided the housing authority with the proposed budget on Dec. 28 — the day before the meeting.

The proposed budget showed about $426,000 in income and nearly $448,000 in expenses, which resulted in a nearly $22,000 deficit. Villarreal said he asked Urlaub & Co. about the deficit.

“A net loss is not necessarily a bad thing,” an accountant from Urlaub & Co. responded. “If you want to show a profit you will need to look at reducing some of the budgeted administrative or maintenance costs.”

The board also had other questions about the budget.

Commissioner Guadalupe A. Cantu asked Villarreal what the $15,500 for “Other Admin. Sundry” covered.

“I would have to ask our accountant,” Villarreal said.

Cantu said she wasn’t comfortable with the budget.

“There’s things that, to me, are red flags,” Cantu said.

Villarreal said he would follow up with Urlaub & Co. to answer questions from the board and offered to provide the board with all checks written by the housing authority.

Commissioner Filomena Leo, the former superintendent of the La Joya Independent School District, urged the board to approve the budget.

“I take assurance from the fact that the auditors that put together this budget are individuals who know the federal government system. They know it inside and out. They know it better than we do,” Leo said. “And so I’m confident that they put money where it’s allowed and they put amounts that they know will not raise any more red flags.”

Leo made a motion to approve the budget. An awkward pause followed.

Commissioner Maria Peralez seconded the motion after Leo assured her the budget could be amended later.

It passed 3-1.

Cantu voted against the budget. Commissioner Hilary Garcia didn’t attend the meeting.