Faced with a projected operating deficit of more than $500,000 for fiscal 2012, the Vicksburg Housing Authority Board of Commissioners voted Tuesday to end its law enforcement contract with the Vicksburg Police Department.

“This takes up half of our maintenance and operating budget,” commissioner Jay Kilroy said. “We can’t afford the service at this time.”

The board’s action came after discussing finances with housing authority executive director Ben Washington, who was hired in December to succeed Dannie Walker, who left in September to take a similar position with the Ozark, Ala., Housing Authority.

Washington said he would meet with city authorities to determine a termination date. The city and the VHA first signed a contract for extra police security in May 2010, and renewed it during the summer. Washington said VHA pays the city for the extra patrols on a monthly basis, adding that the city received $145,000 for extra patrol service in fiscal 2011.

Vicksburg Mayor Paul Winfield said the renewed contract was for about $160,000. He said no one from VHA had talked to him about the contract.

“I know it was a tough decision for them to make,” Winfield said. “Everyone is trying to cut costs. The program was successful. It cut the number of (police) calls from those areas and the incidents of violence, and helped reduce the amount of drug activity. I hope they can find an alternate source of security.”

Police Chief Walter Armstrong said the police department will continue patrols in the housing authority’s areas, “But we won’t have the presence we had under the contract,” adding that the VHA’s areas will be patrolled as is any other neighborhood in the city.

He said VHA had already asked the department to reduce the number of police patrols.

Under the contract, he said, police officers patrolled the areas of Elizabeth Circle, Waltersville, Urban Court and Hayes Street, working in eight- or 12-hour shifts. He said patrols were increased at times when school was in session and during weekends and holidays.

“The program worked, and we have the statistics to prove it, but I can understand their situation,” he said, “when money gets tight, you’ve got to make changes.”

Washington said a review of the VHA’s finances over the past three years showed a drop in the housing authority’s operating fund from a $112,000 net operating profit in 2009 to a $305,000 net loss for fiscal 2011. The projected loss for 2012, he said, is $513,000.

Washington said there were several reasons for the deficit, citing increased costs in utilities, maintenance, and supplies and equipment. He said two other factors played a bigger role in the deficit.

One is a U.S. Housing and Urban Development regulation requiring the housing authority to reimburse utility costs to tenants who qualify because of income. The other is the delay in HUD’s 2012 subsidy to the housing authority.

The HUD subsidy, which is projected at about $681,000 for fiscal 2012, and rent collections form the bulk of the housing authority’s revenue. HUD has yet to approve the authority’s subsidy and is providing a small operating subsidy each month. VHA received $56,000 in December, Washington said.

He said the housing authority began reimbursing utilities in 2010, adding that about 20 percent to 25 percent of VHA’s tenants qualify for the program.

“The money comes out of the rent revenue,” he said. “We’re collecting an average of $45 to $50 a month for rent from tenants, but we’re paying some of our tenants from $80 to $100 a month for utilities.”

The projected rental income for fiscal 2012, he said, is $580,000, or just more than about $48 per tenant per month.

“We are going to have to take steps to tighten up and get this (projected) loss under control,” he said.

In other action, the board:

• Approved the minutes for the Dec. 7 special meeting.

• Approved paying December bills.

• Approved the financial and housing reports.

• Approved resolutions giving Washington signature authority for the VHA accounts at Trustmark Bank and BancorpSouth, authority to use a BancorpSouth credit card and authority to act as the housing authority’s system administrator to access HUD’s online secure systems.

• Approved the disposal of five refrigerators and four ranges.

• Adopted revised maintenance charges for repairing property damaged by tenants.

• Extended the housing authority’s contract with William Daniel McCaskill for auditing services.