‘For rent’ signs sit in front of an apartment building on Fifth Street. Daniel Archuleta daniela@www.smdp.com

CITY HALL — The Rent Control Agency ran a $275,000 deficit last fiscal year, $86,000 less than originally projected.

Rent Control Board administrator Tracy Condon said that the board’s reserves will cover the current deficit and that a recently imposed fee hike will even next year’s budget.

The agency now has about $1.2 million in reserves.

The Rent Control Board is charged with setting the annual rent increase, as well as settling disputes between landlords and tenants.

The board’s expenditures were less than projected primarily because legal expenses were less than anticipated, Condon said. The board allotted $50,000 in legal fees, but used only $624 during the fiscal year.

Revenues were down only slightly because interest earnings were less than expected.

“I have to say this is welcome news,” said board member Todd Flora. “It’s the start of the reductions but we all know we’ve got a ways to go. [Board member Christopher] Walton and I will continue to review our options and brainstorm ideas for both revenue enhancement and expenditure efficiency.”

Wes Wellman, past president of the Action Apartment Association, said that the board runs a deficit because the Rent Control Agency is overstaffed.

“The staff maintains that they can’t cut back staff levels without reducing services,” he said. “But that’s not supported by anything quantifiable. It’s not supported by any factual analysis, just opinion.”

Earlier this year, the Rent Control Board voted to raise fees for the first time since 2006. For the first time, landlords were not able to pass all of the expenses onto the tenants. Landlords are only allowed to pass $13 per month to residents. Resident fees will not increase this fiscal year.

In the coming fiscal year, landlords will pay about $19 per unit. With the fee increase, the Rent Control Board is projecting a slight surplus.

Wellman claimed that the large reserve, not increased fees, should be used to cover the deficit.

“I think it’s unfair to charge residents, and now to some degree landlords, based on fear rather than actual need,” he said.

Wellman claims that workload at the Rent Control Agency is down, but that expenditures remain too high.

“You’d rather the deficit be lower rather than higher,” he said. “But on a percentage basis the difference between the projected budget and the final budget was very small.”



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