It’s still a mystery where local officials will find the money to cover a $1.4 million deficit now facing the Housing Authority of the City of Napa.

For the last two months city and county officials have been calling a flurry of meetings, in public and behind closed doors, trying to find the answer.

During 2005 and 2006 the city housing agency ran deep into the red as Peter Dreier, the former director of the city housing authority, transferred funds to the other housing agency he operated, the countywide Napa Valley Housing Authority. The money covered cost overruns on the upgrade of farmworker camps in Calistoga and Rutherford, projects that cost about $4.7 million despite being initially budgeted at about $2.5 million.

Now the potential funding sources officials are pinpointing to reimburse the city — the state, the county, the grapegrowing and winemaking industry — are the same pots of money Dreier tried to tap time and again before he resorted to transferring the funds without authorization — a move that spurred his resignation last month.

Napa County Supervisor Brad Wagenknecht, who chairs the county housing authority board of directors, said a committee with representatives from both housing agency boards met for the first time last week to start brainstorming how to round up the missing $1.4 million and how to improve the governance of both housing authorities.

As far as possible funding sources, Wagenknecht said, “There are no magic ones. If anybody has any other ideas we’d be willing to hear them.”

The Napa Valley Vintners, the organization representing nearly 300 local wineries, has expressed some reluctance about providing funds to cover a deficit the industry doesn’t feel it created, according to Rex Stults, the vinters’ industry relations director.

“We have certainly stepped up and contributed money over the years to take care of the farmworkers in Napa Valley. And if you look at the causes of this overrun I think there’s a few places you could look, but the industry did not create this overrun,” Stults said. “Since 1996 through the CSA 4 funds (a grower self-tax that goes toward farmworker housing) the industry has contributed $2.5 million to farmworker housing.”

Stults added there’s a sentiment among vintners and growers that they involuntarily contributed $220,000 toward covering the overrun when the county housing authority recently used leftover camp operation funds to pay off an outstanding contractor bill.

St. Helena City Councilmember Bonnie Schoch, who serves on both the county housing authority board and the farmworker housing oversight committee, agreed the vintners and growers shouldn’t be asked to bail out the city housing authority.

“To turn around and say to the vintners and the growers you pay for this mistake, that’s not their role,” Schoch said. “It’s not really fair to them to take on the responsibility of fixing something they didn’t create.”

Trust Fund baby?

Beyond the grape-growing and wine-making industry, housing authority officials may also be looking to the Napa County Affordable Housing Trust Fund to help replenish the city housing authority coffers, Wagenknecht said. The trust fund is a special pot of money set aside to pay for the construction and rehabilitation of low-income housing countywide. It currently contains between $4 million and $5 million, according to county authorities.

It’s a path that has been tested before, and already proved difficult.

In March of 2006 and thereafter, Dreier continually gave written and verbal assurances to housing officials that the county trust fund would help pay for the overruns. But housing trust fund manager Howard Siegel said that source of money was anything but a certainty.

Any expenditure of the housing trust fund requires permission not only from county supervisors but also from plaintiffs in a lawsuit against the county, represented by the nonprofit California Rural Legal Assistance.

The lawsuit charged the county does not meet state housing laws. Terms of a tentative settlement reached in 2004 require that the county build low-income housing, but also set a limit on how much money could be spent on upgrading the farmworker camps.

Siegel said throughout the spring and summer of 2006 he pressed county housing authority staff to estimate the total overrun, but never got a number.

“We never received anything resembling an estimate, let alone a formal request,” Siegel said. “We never got anything resembling even an impression the extent of those overruns would be as much as they turned out to be. We had no reason to know whether they were $200,000 or $2 million.”

Jenny Gomez, county housing authority housing programs coordinator, said her office couldn’t provide a firm number because construction was still under way.

“Howard did send e-mails back to me very specifically and pointedly asking ‘How much?’ and I couldn’t give him how much,” she said. “I didn’t want to say this much and four months later have to go back and say, ‘No, we meant this much.”

To this day it remains unclear whether the county’s housing trust fund legally can be used to cover some of the overages. Under the settlement, only $500,000 in trust fund money can be used for farmworker housing. Deputy County Counsel Silva Darbinian said the plaintiffs will soon be approached about possibly raising the $500,000 limit.

Meanwhile, the prospects of the county housing authority receiving a long-anticipated $775,000 state grant look promising now that the Rutherford property that the Mondavi farmworker facility sits on will be properly recorded.

After more than a year of negotiating with property owner Constellation Brands, Inc., the beverage corporation has decided to donate the land to the county housing authority, thus making it easier for the housing authority to accept a state grant, Gomez said.

The county housing authority will immediately turn over the $775,000 from the state’s Joe Serna Jr. Migrant Farmworker Fund to the city housing authority.

But that doesn’t begin to solve the problem.

“It’s not part of the $1.4 million (deficit). This is additional money the city cash flowed it, if you will. It’s outside the $1.4 million,” Gomez said.

Farmworker Camp renovation timeline

The final tally shows construction work at two farmworker camps came in more than $2 million over the original $2.5 million budget.

Calistoga Ranch

• May 2005 — Construction contract awarded for $1,317,000 to Napa’s Helmer and Sons.

• July 2005 — Construction begins.

• August 2005 — First change order approved for $147,000 to replace defunct septic system.

• October 2005 — Farmworker Housing Oversight Committee first notified that costs have exceeded the budget by $500,000. Committee told staff plans to open bid for Mondavi camp construction contract on Oct. 28.

• December 2005 — County housing authority board members first notified the project is $500,000 over budget. Board is asked to award Mondavi construction contract for $1.15 million.

• April 2006 — Board receives change order log tallying extra construction costs of $857,000. Oversight committee receives same information one month later.

• Aug. 24, 2006 — Celebration of Calistoga center re-opening. Project came in $1.27 million over budget.

Mondavi Camp

• February 2006 — Construction contract awarded to Bollo Construction, Inc. for $1.17 million.

• March 2006 — Construction begins.

• March 2006 First change order approved for about $12,000 to rewire buildings.

• March 2006 — Oversight committee and county housing board first notified that additional changes to the Mondavi plans will result in added construction costs.

• April 2006 — Oversight committee receives change order log tallying extra construction costs of $151,000. Housing authority board receives same notice two weeks later.

• Sept. 28, 2006 — Celebration of Mondavi facility re-opening. Project came in about $967,000 over budget.