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New London - The City Council agreed to reduce the amount of money due to the city from the New London Housing Authority, the authority's executive director said Tuesday.
Under the new arrangement, the housing authority's annual payment in lieu of taxes (PILOT) for the 11-story high-rise building at 202 Colman St. will drop from 10 percent of the yearly rent for the occupied units to 5 percent of total rent collected beginning this year.
The reduction passed the council unanimously on the consent agenda, Council President Wade A. Hyslop said.
The housing authority requested the reduction in part because of a cutback in state funding for the Elderly Rental Assistance Payments program, according to housing authority Executive Director Sue Shontell.
"We are receiving less from the state because there are no more operating subsidies for state housing programs," she said. "The (state Department of Housing's) Rental Assistance Program helps people pay the base rent, but without state support, that is still not even close to helping the housing authority pay the bills to run a state property."
The average annual income for residents of the complex at 202 Colman St., which includes 130 apartments, is $11,182, she said.
Shontell said the reduced level of PILOT payments is justified by the fact that the city does not provide the 202 Colman St. high-rise with the same services it does for other tax-exempt properties.
The high-rise does not receive city services such trash and recycling pickup or snow plowing, Shontell said.
"PILOT payments are for services from the city, and because there are some city services we don't receive, it makes more sense for us to pay at the 5 percent level," she said.
When the matter was before the council's Finance Committee last week, the committee established a timeline for the housing authority to make its overdue PILOT payments for 2011, 2012 and 2013, which total $198,578.
The payment schedule, which was approved Monday by the full City Council, requires the housing authority to pay $150,000 to the city by Dec. 31, 2014, and then pay the outstanding balance and its payment for 2014 during the second quarter of 2015.
Shontell said the housing authority had considered raising revenue by leasing space at the top of the building for cellular antennae, but the city's emergency dispatch antennae are there and adding others could create interference.
"We don't get the opportunity to increase revenue by utilizing the roof for antenna," Shontell said. "But the reduced percentage will help the Housing Authority increase its ability to stay current with city with the PILOT payments."