The recent resignation of three members of the Niles Housing Commission board has shed light on a growing tension between those who run the housing complex and those who fund it.

Marie Weimer, who resigned as chairman of the board Jan. 22, said the low-rent, public housing structure on Cass Street is operating as efficiently as it ever has.

Weimer said she doesn’t think the housing commission needs to hire a management firm to oversee the complex, even though they are required to have one by the U.S. Dept. of Housing and Urban Development (HUD) — the agency that provides the entity most of its funding.

In 2012, HUD designated the Niles Housing Commission as a troubled agency for several reasons, including that the housing complex had a high vacancy rate and the organization running it was deemed not financially secure.

To address these issues, HUD drew up a recovery agreement listing things the commission needed to do in order to remove its troubled status.

The recovery agreement — which the board agreed to — required, among other things, that the housing commission hire a private firm to handle all of its management responsibilities.

The board complied with this requirement by hiring Premier Housing in January 2014 and the housing commission later had its troubled status designation removed.

However, that changed when the board fired the company about six months later in June 2014.

Weimer said the board made the decision to let Premier go after determining the company was not doing enough to warrant its cost. The commission had increased the facility’s occupancy to 100 percent, she said, but Premier had little to do with it.

“They were milking us. They were costing too much money,” Weimer said.

Shortly thereafter, HUD declared the Niles Housing Commission was in default of its recovery agreement because it had terminated the contract with Premiere. HUD then placed the Housing Commission back in troubled status.

City Administrator Ric Huff said, even though the city does not have direct control over the Niles Housing Commission, it is ultimately responsible for what goes on there because the city owns the property.

Huff said the city could be punished if the Niles Housing Commission remains in troubled status.

“When you are in troubled status they can do a myriad of bad things to you (the city), including blocking your ability — called disbarment — of any other federal funds for your community, including grants to the police department or CDBG money we use to fix sidewalks,” he said. “They can stop all of it.”

Huff said HUD representatives told city leaders they had what amounts to one last chance to clean up the housing commission.

HUD drew up a new recovery agreement and the Niles City Council adopted it on Jan. 12. All that remained was for the Housing Commission board to approve the new recovery agreement, which again stipulated that a property management company had to be hired.

The board did not approve the agreement at its Jan. 22 meeting and three of the board’s four members — Weimer, Jane Lano and Donna Palmer — resigned.

Lano explained her decision to resign at Monday’s council meeting.

“I think that it is just absurd that the Niles Housing Commission is being placed in a position to hire back a property management company,” she said. “You will never get a better staff than what is there right now.”

Lano asked the city council to do everything it can to keep the current staff in place.

Mayor Mike McCauslin sympathized with Lano, but said the city has no choice but to comply with HUD’s orders.

“We are not in a position to, nor are we willing to jeopardize the city for that,” he said at Monday’s meeting. “We are going to follow their directive and move forward to the best of our abilities.”

Lano said she has filed a complaint with the office of the attorney general to investigate the matter.

Shelly Casey, executive director of the Niles Housing Commission, said the housing commission continues to maintain 100-percent occupancy and is sound financially.

She said she is not certain hiring a management firm would be good for the future of the housing commission’s 179 units and its residents.

“I am there to protect my residents and what is best for them. If this is the best for them, someone needs to explain it to me in detail,” Casey said. “My team, I can’t say enough about them.”

Huff said he has appointed four new members to the five-member Niles Housing Commission board: Sanya Phillips, Marshall Downs, Pamela Hunziker and Rick Racht. They replace the three members who resigned and one seat that was vacant.

The remaining board member, Luanne Collins, is a resident member.

The board will hold a special meeting today to address the recovery agreement.