A meeting between LaGrange City Council and the LaGrange Housing Authority turned divisive between the two boards on Monday.

The housing authority, which is regulated by the federal Housing and Urban Development Agency, has lost at least $1.6 million in the last year when HUD began “recapturing” the funds. The authority must come up with a plan to use the reserve funds it has left or could face losing more of its money.

Although council doesn’t give any money to the housing authority, it had asked to meet about what the long-term plans were after hearing most of the funds are designated to refurbish current housing. Mayor Jeff Lukken asked the authority to consider a plan similar to one the Atlanta Housing Authority has adopted that mixes subsidized housing with regular market rate housing and helps move residents out of poverty.

“When you find a way to spend this money, it’s important to do it the right way,” Lukken said.

The mayor suggested the city get someone from the Atlanta housing authority or someone from HUD to help come up with a plan.

A number of residents who attended the meeting, along with a housing authority lawyer, however, appeared to want the status quo for the authority.

“Atlanta is a feather in HUD’s cap because of its ability to do a lot more,” said Stuart Dugan, attorney for the housing authority.

Dugan said a special grant, called the Hope Six program, allowed the Atlanta Housing Authority to adopt some of the the programs it did. The Rome housing authority, which Dugan also represents, has spent upwards of $500,000 applying for similar grants and hasn’t been awarded the funds.

“The funding mechanism isn’t there,” he said.

Dugan blamed HUD for changing the rules “midstream” and recapturing the housing authority’s savings. He said the housing authority was following the model prescribed by HUD by doing the renovations and not trying to move residents into other housing options.

Dugan’s defense of the HUD program led to a shouting match between he and the mayor.

“I think you may need a different attorney,” Lukken said in the midst of the debate.

Some residents at the meeting were under the mistaken impression that the city wants to tear down the housing authority properties, potentially leaving them homeless.

Lukken and authority board member Will Jones, who also argued with Dugan, said they’re not tearing anything down.

Jones, who himself grew up in a housing project in West Virginia, said the city and authority should look into some sort of public-private partnership with an organization like DASH for LaGrange Inc. – Dependable, Affordable, Sustainable Housing. Creating such a partnership could take several years.

It appears that the authority will continue with its initial renovation plan for now.

“At this point, this is what HUD says to do,” said authority chairman, the Rev. Michael Jackson. “It’s not our choice or the city’s choice.”

The council and the authority did agree to a second joint meeting, the date of which will be determined. The city would like to hear more from the authority on how much money it has lost, how much it has left, and the exact plans for the money. The city also would like to get ideas from HUD and the Atlanta Housing Authority on how it can expand its housing options for residents.

“We’re just trying to move people out of poverty,” Jones said.