New York City Comptroller John Liu called on the New York City Housing Authority to reject a plan to raise $750 million in a new bond issue, amid a crisis that threatens the authority's finances and operations.
Liu, citing "grave concerns over a deepening crisis that threatens the Authority's finances and operations," said the authority is sitting on $700 million in funds that it could use for building upgrades.
"NYCHA should postpone any new bonds until the new board has an opportunity to assess [the authority's] financial condition,"
His comments came days after most of the city's Democratic mayoral candidates, Liu included, stayed overnight at a public housing building, the Lincoln Houses complex in Harlem.
Gov. Andrew Cuomo in late June signed a state law that eliminated two full-time paid board members, each of whom earned $187,000 per year, and replaced them with volunteers.
Under the new setup, the new chairman will make $220,000 and will have six volunteers under his or her watch.
Mayor Michael Bloomberg has yet to appoint new board members.
The authority on May 10 submitted to the U.S. Department of Housing and Urban Development a request for approval to complete a $500 million capital fund financing program bond issue this calendar year.
Under that program, the authority can borrow private capital for improvements, backed by a pledge to earmark a portion of future year capital funds for debt service. The authority must spend bond proceeds over a four-year period.
"To insure that bond proceeds are expended in the most efficient and effective manner, NYCHA postponed a CFFP bond issue during 2011 while enhancements to capital projects planning, processes and delivery methods were undertaken," the authority said
The authority said in its plan that priorities for the upcoming fiscal year include coping with reduced federal funding.
It plans to lease 14 parcels within eight developments to private developers who would finance, construct and operate new residential buildings.
Liu, meanwhile, also called on the authority to develop and implement a disaster preparedness and recovery plan in the aftermath of Hurricane Sandy, and end its payments to the city for police and sanitation services and payments in lieu of taxes.
"Why should [the authority] pay for NYPD and sanitation services that are given to private landlords for free?" he said.
