After announcing a $4.5 million budget shortfall earlier this year, Chattanooga Housing Authority officials said today they expect to have a break-even cash flow by the end of the year.

“We’ve had two reductions in force this year that represents about $3.5 million in savings,” said Betsy McCright, CHA’s interim executive director. “We’ll start to realize those savings by September.”

CHA officials said they plan to start building financial reserves by 2009 and 2010.

HUD officials have been investigating the cause of CHA’s financial downfall for the past two weeks.

“We’ve had HUD REAC (Real Estate Assessment Center) auditors on board. We have just one left and he’s finishing up. We expect a full report from HUD’s REAC sometime in July,” said Ms. McCright, speaking at the housing authority’s monthly board meeting.

Chattanooga Housing Authority board members also approved a $395,856 contract with the Partnership for Families, Children and Adults to provide social services to elderly and disabled residents. The contract is for 19 months with the option for extension.

The Partnership has been providing similar services to the housing authority for more than a decade.