While the redevelopment of Steel City is hurting the budget of Mercer County Housing Authority, the economy also seems to be cutting into revenues, said Executive Director L. DeWitt Boosel.

The authority is expecting to receive $642,030 in the coming year, $196,930 less than what was in this year's budget, Boosel said Wednesday.

With rents based on a tenant's income, the less a tenant makes, the less the authority can charge in rent. The average income of residents has steadily declined, Boosel said.

"It seems the economy is having an effect on our residents and the rents we receive," he told the authority board.

The authority, whose fiscal year runs July 1 to June 30, has tried to attract working families to public housing. The families who have moved in have not been able to maintain the wage level of when they moved in.

Steel City Terrace, Farrell, is slated for demolition and construction of new public housing units. The authority has not rented Steel City apartments for some time, and has begun moving residents out in preparation for demolition, which has reduced rental income.

The authority will continue to manage the existing Steel City buildings as long as they stand. Once the new buildings are occupied, an independent company will manage the buildings, including collecting rent, and the rents will not be part of the authority's budget.

The federal government, the chief source of funding, will be asked to subsidize the budget to the tune of $2,167,521, Boosel said, up from $1,935,768.

The Department of Housing and Urban Development won't announce how much money it will give the authority for a few months, Boosel said.

Authority staffers set about cutting expenses in response to a leaner budget, and were successful in five of eight expense categories.

The budget cutters were effective enough that the authority is not proposing dipping into its reserves to make up a revenue shortfall. The authority expects to put $13,708 into its reserves this year.

Salaries will be going up 3 percent for employees.

The total budget is $2,874,843, down $35,627 from this year.

Housing authority budget at a glance

Here is a breakdown of Mercer County Housing Authority's proposed 2002-03 budget of $2,874,843, with 2001-02 figures in parentheses:

SPENDING

• Administration, $547,981 ($522,000).

• Tenant services, $102,082 ($72,600).

• Utilities, $406,106 ($409,090).

• Ordinary maintenance, $963,384 ($978,900).

• Protective services, $20,000 ($30,000).

• Insurance, benefits and other general expenses, $455,590 ($486,690).

• Nonroutine maintenance, $0 ($50,000).

• Capital expenses, $379.700 ($361,190).

• Dwelling rents, $632,030 ($838,960).

• Federal subsidy, $2,167,521 ($1,935,768).

• Other income, $65,292 ($138,745).