The Atlantic City Housing Authority’s Board of Commissioners could lay off four employees to offset $1.2 million in federal operating cuts due to the sequestration.

But a representative of one of the employees’ unions said Thursday that the layoffs are because of poor spending choices by the agency — a charge its director of finance labeled as a “smear campaign.”

The board approved a resolution at Thursday’s meeting that would allow the authority to lay off employees. Executive Director Pamela James said the board may cut four workers but that no final decisions have been made regarding the 100-person staff.

The authority, which is funded through the U.S. Department of Housing and Urban Development, passed its roughly $23 million budget at Thursday’s meeting but Director of Finance Robert Fitzgerald said their operations budget was cut $1.2 million in February and the layoffs are one way to save some money.

Commissioner Michael Harvey said the board did not want layoffs but with the sequestration it’s “unavoidable.”

A half dozen authority employees held a rally outside the meeting claiming the layoffs would not be necessary if the authority did not make wasteful spending decisions.

Carly Almodovar, representative of CWA Local 1038, which represents 43 authority employees, questioned more than $700,000 spent on items such as legal costs, travel, consultant fees and locations for meetings.

“These are places cuts could have and should have been made instead of on the backs of the workers who keep the Housing Authority running,” she said.

Almodovar said the union members would be willing to discuss taking furloughs if the authority promised it would mean no layoffs.

Fitzgerald called those accusations “ a smear campaign” during the meeting.

“You can take any budget and pick out some lines and say you overspent here and there,” he said.

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