With revenues expected to fall in the coming year, Mercer County Housing Authority has trimmed employee salary hikes and won't fill vacant positions.

The major culprit is a reduction in the federal subsidy.

In a perfect budget year, the authority would receive $2,135,225 from the federal government, which is all that it is eligible for, said Executive Director L. DeWitt Boosel.

But this isn't a perfect budget year. The U.S. Department of Housing and Urban Development is $250 million short of what it had expected to provide to housing authorities.

HUD blames the shortfall on a new operating formula, faulty information systems and its practice of borrowing from future-year allocations, according to the Public Housing Authorities Directors Association.

HUD is spreading the shortfall over all housing authorities. While some authorities are being docked up to 30 percent of what they were told they would be getting, Boosel said he expects Mercer County to lose 10 percent to 13 percent of the eligible amount.

The authority prepared its budget based on 90 percent of its eligibility, $1,931,703, which is down from this year's allocation of $2,167,521.

The federal government will provide 70 percent of the authority's $2,753,113 budget, down from 75 percent in this year's $2,993,141.

Boosel said the authority will not be informed of how much it will receive from the federal government for some time.

The authority's budget year runs July 1 to June 30.

Boosel said employees will receive 2 percent raises -- down from about 3 percent in recent years -- and he cut 2è positions, one in accounting, a relocation clerk and a half-time post in administration.

The authority also will not be able to augment modernization projects with general funds, which it did in the past. The authority receives about $1.5 million in federal funds for modernization work, which doesn't always cover all the work the authority would like to do.

While the emphasis in preparing the budget was cutting costs, the authority made a point of increasing its general fund expense for tenant services.

The federal government is ending its drug-elimination grant program from which the authority received funds for five years.

Housing authority budget at a glance

Here is a breakdown of Mercer County Housing Authority's proposed 2003-04 general fund budget of $2,753,118, with 2002-03 figures in parentheses:

SPENDING

   » Administration, $517,653 ($547,981)

   » Tenant services, $125,961 ($102,082)

   » Utilities, $450,400 ($406,106)

   » Ordinary maintenance, $894,262 ($963,384)

   » Protective services, $20,000 (same)

   » Insurance, benefits and other general, $504,842 ($445,590)

   » Capital expenses, $239,995 ($379,700)

FUNDING

   » Tenant rents, $722,336 ($632,030)

   » Federal subsidy, $1,921,703 ($2,167,521)

   » Other income, $75,000 ($65,292)

   » Budget reserve fund, $34,074.