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Home My WebLink AboutMINUTES - 06052012 - SD.3RECOMMENDATIONS CONSIDER accepting the 4th Quarter (Unaudited) Budget Report for the period ending 3/31/12. BACKGROUND This report is intended to provide the Board of Commissioners with an overview of the financial position of the Housing Authority of Contra Costa County (HACCC) through the 4th quarter of the fiscal year ending 3/31/12. The report begins with a summary of HACCC’s overall financial position. After that, the overall numbers are broken down by individual funds. Each fund overview includes a brief program summary, a short explanation of significant differences between the budget and HACCC’s year-end annual estimate, and a breakdown of program reserves. AGENCY OVERVIEW: Budget Report Action of Board On: 06/05/2012 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF COMMISSIONERS AYE:John Gioia, District I Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Geneva Green, Tenant Seat Contact: 925-957-8028 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: June 5, 2012 Joseph Villarreal, Executive Director By: June McHuen, Deputy cc: SD. 3 To:Contra Costa County Housing Authority Board of Commissioners From:Joseph Villarreal, Executive Director Date:June 5, 2012 Contra Costa County Subject:4th Quarter Budge Report for FY 2011-2012 BACKGROUND (CONT'D) HACCC Agency Summary Annual Budget 4th Quarter Actuals 3/31/12 (unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 103,500,975 $ 102,616,514 $ - $ 102,616,514 $ (884,461) Expenditures $ 103,253,853 $ 100,862,030 $ - $ 100,862,030 $ 2,391,823 To Reserves $ 247,122 $ 1,754,484 $ - $ 1,754,484 HACCC had a decrease of less than 1% in projected overall revenues on the year. The agency’s four primary program areas were affected as follows: 1) The Housing Choice Voucher Program (HCV) had a reduction of $2,442,430 in revenues; 2) Public Housing and Capital Funds increased by $1,001,697over projected; 3) The Housing Certificate Program saw a $69,500 increase; and 4) The State & Local fund increased by $96,772. Expenditures improved by 2.3% against the budget. HACCC’s four primary program areas were affected as follows: 1) Costs in the HCV program were reduced by $3,154,442; 2) The Public Housing and Capital Fund saw a increase in expenditures of $115,611; 3) Costs increased over budget by $219,578 in the Housing Certificate Program; and 4) the State & Local Programs saw costs rise by $36,854 over budget. Further explanations for the variances are provided below for each program area. Analysis of Agency Reserves Program Beginning Balance 4/1/11 Audited 4th Quarter 3/31/12 (unaudited) Reserves Balance 3/31/12 (unaudited) Total Reserves $ 8,852,104 $ 1,755,059 $ 10,607,163 Restricted Reserves Housing Choice Vouchers $ 4,107,305 $ (232,755)$ 3,874,550 Public Housing & Capital Fund $ - $ - $ - State & Local Programs $ 1,626,986 $ - $ 1,626,986 Housing Certficates Programs $ - $ - $ - Total Restricted Reserves $ 5,734,291 $ (232,755)$ 5,501,536 Unrestricted Reserves Housing Choice Vouchers $ 1,727,624 $ 946,866 $ 2,674,490 Public Housing & Capital Fund $ 219,964 $ 955,222 $ 1,175,186 State & Local Programs $ 937,543 $ 230,903 $ 1,168,446 Housing Cerficates Programs $ 232,682 $ (145,177)$ 87,505 Total Unrestricted Reserves $ 3,117,813 $ 1,987,814 $ 5,105,627 As a reminder, almost all reserves are restricted for use within each program. The designation of restricted or unrestricted reserves merely indicates that the funds are obligated for special use within the program (restricted) or that they can be used for any purpose tied to the program (unrestricted). The only exception to this rule is unrestricted funds within the State and Local Fund. These can be used in any of HACCC’s programs. FUNDS OVERVIEW: Housing Choice Vouchers Program Summary - The HCV program provides assistance to families in the private rental market. HACCC qualifies families for the program based on income. These families find a home in the private rental market and HACCC provides them with a subsidy via a Housing Assistance Payments (HAP) contract with the property owner. HAP is paid by HACCC directly to the owner. Through its HCV program, HACCC is authorized to provide affordable housing assistance to a maximum of 6,781 families. However, due to funding constraints, the program is only able to support approximately 6,300 families currently. Summary of Difference Between Budgeted and Year-End Annual Estimate: Housing Choice Vouchers Annual Budget 4th Quarter Actuals 3/31/12 (unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 84,768,516 $ 82,326,086 $ - $ 82,326,086 $ (2,442,430) Expenditures $ 84,766,417 $ 81,611,975 $ - $ 81,611,975 $ 3,154,442 $ 2,099 $ 714,111 $ - $ 714,111 Revenue – The reduction in revenue of $2,442,430 is due primarily to reduced HAP funding received from HUD in response to a decrease in units under contract during the quarter as families moved. Expenditures – Projected costs decreased by $3,154,442. Three factors drove this reduction: 1) reduced HAP costs of $2,442,430 in response to the decreased number of units under contract; 2) a drop in costs charged to the voucher program of $439,516 due to conversion to asset management; and 3) reduced labor & benefit costs of $272,546. Analysis of Program Reserves: Housing Choice Vouchers Beginning Balance 4/1/11 Audited 4th Quarter 3/31/12 (unaudited) Reserves Balance 3/31/12 (unaudited) Restricted Reserves $ 4,107,305 $ (232,755)$ 3,874,550 Unrestricted Reserves $ 1,727,624 $ 946,866 $ 2,674,490 Total Reserves $ 5,834,929 $ 714,111 $ 6,549,040 Public Housing Operating and Capital Funds Program Summary - HACCC owns and manages 1,179 public housing units at 16 different sites throughout the County. Operating funds for these properties come from tenant rents as well as an operating subsidy received from HUD that is designed to cover the gap between rents collected from the low-income tenants and annual operating expenses. HUD allocates the Capital Fund annually via formula to approximately 3,200 housing authorities. Capital Fund grants may be used for development, financing, modernization, and management improvements within public housing. Summary of Difference Between Budgeted and Year-End Annual Estimate: Public Housing & Capital Fund Annual Budget 4th Quarter Actuals 3/31/12 (unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 10,345,531 $ 11,347,228 $ - $ 1,347,228 $ 1,001,697 Expenditures $ 10,276,395 $ 10,392,006 $ - $ 10,392,006 $ (115,611) To reserves $ 69,136 $ 955,222 $ - $ 955,222 Revenue – Revenue increased by $1,001,697 over the amount budgeted. This was the result of an: 1) Increase in capital fund revenue from HUD of $760,697 as rehabilitation projects came on line; and 2) Increase in operating subsidy of $241,000 as funding levels rose slightly and more units were placed under contract. Expenditures - The increased costs versus budget of $115,611 was a result of a combined increase in costs of $593,069 of capital fund expenses, but a reduction of operating costs of $477,458. Analysis of Program Reserves: Public Housing & Capital Fund Beginning Balance 4/1/11 Audited 4th Quarter 3/31/12 (unaudited) Reserve Balance 3/31/12 (unaudited) Restricted Reserves $ - $ - $ - Unrestricted Reserves $ 219,964 $ 955,222 $ 1,175,186 Total Reserves $ 219,964 $ 955,222 $ 1,175,186 Housing Certificate Programs Program Summary - HACCC administers three separate Housing Certificate Programs; Shelter Plus Care, Moderate Rehabilitation (Mod Rehab) and Project-based Contract Administration. The Shelter-Plus Care Program provides rental assistance for hard-to-serve homeless persons with disabilities in connection with supportive services funded from sources outside the program. HACCC assists approximately 285 clients under this program. The Mod Rehab program was designed in 1978 as an expansion of the rental certificate program. Mod Rehab was designed to provide low-cost loans for the rehabilitation of rental units in an effort to upgrade and preserve the nation's housing stock. In return, the owner agreed to provide long-term affordable housing for low income families. The program was repealed in 1991 and no new projects are authorized for development. HACCC administers 28 Mod Rehab units. Under the Project-based Contract Administration program, HACCC contracts with the federal government to perform HUD’s oversight duties. There are approximately 50,000 to 60,000 units of privately owned Project-based Section 8 throughout Northern California that were directly awarded by HUD and are not part of the local housing authority’s program. HUD used to provide oversight of these properties as it provides oversight of housing authorities. A number of years ago, HUD contracted these duties out to local housing authorities, paying them a fee to perform some of HUD’s oversight duties. HACCC contracts with HUD to administer 5 Project-based Contract Administration units. Summary of Difference Between Budgeted and Year-End Annual Estimate: Housing Certificate Programs Annual Budget 4th Quarter Actuals 3/31/12 Remaining FY Estimate Annual Total Variance Revenue $ 3,496,732 $ 3,566,232 $ - $ 3,566,232 $ 69,500 Expenditures $ 3,491,831 $ 3,711,409 $ - $ 3,711,409 $ (219,578) To reserves $ 4,901 $ (145,177)$ - $ (145,177) Revenue - The increase of $69,500 in revenues is a result of increased administrative funding in the Shelter-Plus Care Program as more families were placed under contract. Expenditures - The increase in costs versus budget of $219,578 is due to shifting labor costs from the voucher program to the Mod Rehab program. Analysis of Reserves: Housing Certificate Programs Beginning Balance 4/1/11 Audited 4th Quarter 3/31/12 (unaudited) Reserves Balance 3/31/12 (unaudited) Restricted Reserves $ - $ - $ - Unrestricted Reserves $ 232,682 $ (145,177)$ 87,505 Total Reserves $ 232,682 $ (145,177)$ 87,505 State and Local Programs Program Summary - HACCC administers a variety of programs and activities that are either not funded by HUD or that involve non-restricted HUD funds. Currently, HACCC is the managing general partner for two tax credit projects (DeAnza Gardens & Casa Del Rio) and also has contracts with the County and the City of Antioch to run their rental rehabilitation programs. HACCC receives management fees for administering the Public Housing HCV programs under HUD’s asset-management model. Summary of Difference between Budgeted and Year-End Annual Estimate: Revenue $ 5,280,196 $ 5,376,968 $ - $ 5,376,968 $ 96,772 Expenditures $ 5,109,211 $ 5,146,065 $ - $ 5,146,065 $ (36,854) To reserves $ 170,985 $ 230,903 $ - $ 230,903 Revenue – Funding improved over the amount budgeted by $96,772. The DeAnza Tax credit property account for this increase in reduced vacancy losses. Expenditures - The increase in costs of $36,854 was a result of higher operating expenses in most programs. Analysis of Reserves: State & Local Programs Beginning Balance 4/1/11 Audited 4th Quarter 3/31/12 (unaudited) Reserves Balance 3/31/12 (unaudited) Restircted Reserves $ 1,626,986 $ - $ 1,626,986 Unrestricted Reserves $ 937,543 $ 230,903 $ 1,168,446 Total Reserves $ 2,564,529 FISCAL IMPACT None. Information item only.