To deal with large outstanding debts and budget shortfalls, the Silverdale-based Kitsap County Consolidated Housing Authority (KCCHA) is cutting staff and discontinuing community resources used by families facing foreclosures.

According to interim Executive Director Debbie Broughton, the measures will result in the layoffs of 15 personnel from the executive and community service departments — a large reduction to an organization of roughly 65. KCCHA Executive Director Norm McLoughlin resigned last week when the reality of the housing authority’s financial situation came to light.

The layoffs are part of a six-month corrective plan to put KCCHA back on solid financial ground. Other measures include selling property and cutting services.

“There isn’t any way to run a program if there is no money to fund it,” Broughton said. “This is one of those sad situations where we don’t have the money to help the people that are depending on us.”

Community service programs at KCCHA include credit counseling for families who have defaulted on their mortgage payments. The counseling positions are being cut because they were heavily subsidized by the housing authority and garnered minimal funding from the government. KCCHA, headquartered on Bayshore Drive in Silverdale, relies on private financing for 84 percent of its operating revenue.

“We don’t have enough money to help all these people, we can’t raise our rents, our insurance and utility costs have gone through the roof, we can’t finance anything,” said Sara Lee, the deputy executive director and spokeswoman at KCCHA. Lee worked on the budget reduction package and included her position as part of the cuts. She officially steps down next week.

“It is very frustrating, because we are getting 50 phone calls a day from people who need help with their mortgages and we only get $350 from the government to help someone through 10 to 12 months of foreclosure counseling,” she said. “That is not sustainable”

Marvelle Lahmeyer, the head of counseling services at KCCHA, estimated there are 30 to 40 active foreclosure files the housing authority is working on. Hundreds have been resolved this year alone, she said. According to Lahmeyer, families using the housing authority to help resolve mortgage problems and skyrocketing interest rates have a 95 percent success rate.

Lahmeyer was given her layoff notice Wednesday. She understands why she is being laid off, but is disappointed for Kitsap residents who will no longer have the resources they need to keep their homes.

“I’ve created and worked this program for six years,” she said. “I’m not devastated about the job or the housing authority itself. I’m devastated for the families, the kids and the seniors we helped. That is a lot of sad people.”

Carl Florea, executive director of Bainbridge Island’s Housing Resources Board, was surprised to hear about the layoffs at the housing authority. His group, which works for low-income housing solutions on Bainbridge, had referred islanders with mortgage troubles to the KCCHA for counseling.

“I hope someone picks (financial counseling) up...its a crucial service,” he said. “We would but we just don’t have the manpower or funding to take on another program.”

According to Broughton, KCCHA is still deciding what will happen to the backlog of people seeking financial counseling.

Lehmeyer said that although the housing authority could no longer help with new cases for the time being, they would most likely be forwarded to federal Housing and Urban Development (HUD) groups in King County.

Other cost-cutting measures include selling KCCHA property and consolidating staff into one location. Staff have already been consolidated into the current Bay Shore Drive building in Silverdale — that facility is being put on the market by the housing authority to help pay off debts. If that property is sold, KCCHA will move to its space at the six-story Norm Dicks Government Center. That space also is for sale, according to Broughton. Where the housing authority will be relocated if both facilities sell in the near future is unknown.

The housing authority is responsible for almost 30 properties in Kitsap County that house low-income residents, families, seniors and individuals with special needs.

The massive cost-cutting measures are meant to preserve those properties and residents from being impacted by KCCHA’s and the nation’s financial troubles.

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