SWAMPSCOTT – The Swampscott Housing Authority approved financial reports and next year’s budget on Tuesday. With an increase in spending with intense maintenance in 2022, the authority seeks to balance the budget in 2023.
Jenna Milne, Certified Public Accountant for the authority, explained the financial report. The state prefers that housing authorities maintain a reserve fund at 35 percent of their budget. Swampscott maintained a 33.55 percent reserve in 2022.
According to Milne, the reason why Swampscott was under 35 percent came down to a net operating income deficit. The authority budgeted a $20,000 profit, but the actual result was a loss of $4,930.
“This seems to be pretty common in the industry right now. I think the biggest issue has been, in 2021 and 2020, we weren’t really able to go into our units due to covid. So, in 2022, we went in, and we did inspections. We found a lot of things that needed to be updated that weren’t updated over two years,” said Milne.
Fiscal year 2022 was a tough year for the authority, according to Milne, as far as maintenance costs went, along with a few vacancies and turnover costs.
The other problem cited by Milne is that handicapped housing rental revenue is not enough to cover the expenses. It is common for housing authorities according to Milne to have deficit reserves in handicapped-housing programs. Milne asked if the state could lend a hand in solving this problem to replenish reserves.
The last factor contributing to the deficit was the fire alarm inspection, which was costly. This might be the biggest contribution to the income deficit according to Milne.
Coming into the fiscal 2023 budget (from October 2022 to September 2023), the authority’s purpose is to meet the goal of a 35 percent reserve fund. Milne said the state promises to provide a subsidy for a nine percent non-utility increase, which is unusual and appreciated according to Milne. Usually, the state supports a three to four percent increase in budget.
Besides the subsidies, the authority gets a $6,000 reimbursement in legal fees and $6,600 to help with heat pumps payment.
Milne estimated there would be 37 percent in the reserve by the end of 2023.
