At an Oct. 9 Durham City Council work session, the city’s Interim Financial Director Keith Hermann shed some light on Durham’s finances, and the numbers were not pretty.

The city was projected to have a $5.9 million surplus by the end of 2008. However, it took some massaging to arrive at that figure. Under the stewardship of former City Manager Patrick Baker, who left his post in June for a spot in the city attorney’s office, the city deferred $2.6 million that was to go toward capital projects and an ailing Durham Area Transit Authority, and $1.4 million in rainy day funds for various departments.

The halt in money transfers, according to Hermann, was a way to offset a $2.2 million revenue shortfall, due to a decline in tax dollars, and more than a million dollars in departmental overspending.

Parks and Recreation and Solid Waste Collection were the biggest culprits, with each over budget by more than a half million dollars, due to rising fuel costs and, in the parks department’s case, “too much lapsed salary.”

In his report, Hermann also cited an “unbudgeted increase in the number of events,” which upped expenses because Parks and Recreation must pay off-duty police officers at those events.

City Manager Tom Bonfield had called for the fourth quarter financial update, which, by Hermann’s count, had not happened since February 2008. The financial department publishes quarterly reports online, but had lagged in making public presentations.

In other business, Durham Performing Arts Center Oversight Committee President MaryAnn Black gave a presentation that seemed to indicate the committee had made few tangible gains since a committee meeting in June. Still undecided: whether to pay ushers the required minimum wage, or to solicit volunteer ushers.

DPAC is slated to open next month.

“I think we’re moving in the direction of paid staff,” Black said.

Black also revealed that the committee had not yet defined what constitutes a non-profit theater group. According to the latest operating agreement, DPAC will charge non-profit theater groups at least $5,850 per night to perform at the 2,800-seat theater.

General Manager Bob Klaus reported the theater has sold 5,000 season tickets, half the number needed to break even for Broadway shows, which Klaus said he hoped to do next season.

Also on the agenda was a grilling of the Durham Housing Authority, which recently had been designated “troubled” by the U.S. Department of Housing and Urban Development.

“The hole was much deeper than what we thought. We had to dig a little bit deeper, but we’re at the bottom nowat least we think,” said DHA CEO Harrison Shannon.

Mayor Bill Bell asked to hear from “the person who gave [DHA] that label,” James Whitcomb, Regional Director for HUD.

Whitcomb insisted that DHA’s handling of Section 8, not DHA itself, was troubled, and that the program was now “looking pretty good.”

Councilman Eugene Brown asked Whitcomb to respond to the charge that Section 8, overall, is a “bureaucratic nightmare.”

After wondering aloud whether he could speak off the recordwhile cameras rolledWhitcomb offered the explanation that “Congress doesn’t understand the Section 8 program.”

In a moment of candor, he said the country is “locked in” to the program, because it cannot shoulder the burden of tossing Section 8 recipients onto the street. In concept, he said, the program is “great” it just needs some “tweaking.”

After saying that HUD’s grading system appeared to be inflatedthe line between “troubled” and passing was thinBrown said that the DHA must shed its “troubled” label.

“We need this to work,” he told Whitcomb.