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HomeMy WebLinkAboutMINUTES - 03102015 - HA C.01RECOMMENDATIONS ACCEPT the 3rd Quarter (Unaudited) Budget Report for the period ending 12/31/14. BACKGROUND This report is intended to provide the Board of Commissioners with an overview of the financial position of the Housing Authority of the County of Contra Costa (HACCC) for the 3rd quarter period ending 12/31/14. The report begins with a summary of HACCC’s overall fiscal standing at the end of the quarter. The overall numbers are then broken down by individual funds. Each fund overview includes a brief program summary and an explanation of the variance between budgeted and actual performance. AGENCY OVERVIEW: Budget Report Changes in HACCC's overall budget position for the third quarter are shown in the chart below. Major changes in Section 8 voucher program (HCV) funding had the most significant impact on HACCC's budget. Projected revenue increased by $2,426,731 as HCV utilization increased. This was as a result of new project-based units being brought online and new clients being called from the wait list for the first time in over 10 years. The increased revenues were largely funded through the use of HUD-held restricted reserves. Expenditures are on pace to end the year about $1.2 million less than budgeted. However, this would still be an increase of over $5 million from last fiscal year. As with revenues, this is mostly a result of increased leasing under the HCV program. Action of Board On: 03/10/2015 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF COMMISSIONERS AYE:John Gioia, Commissioner Candace Andersen, Commissioner Mary N. Piepho, Commissioner Karen Mitchoff, Commissioner ABSENT:Federal D. Glover, Commissioner Fay Nathaniel, Commissioner Aqueela Bowie, Commissioner 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: March 10, 2015 Joseph Villarreal, Executive Director By: June McHuen, Deputy cc: C.1 To:Contra Costa County Housing Authority Board of Commissioners From:Joseph Villarreal, Housing Authority Date:March 10, 2015 Contra Costa County Subject:FY 2014-2015 3rd Quarter Budget Report BACKGROUND (CONT'D) > The net change to reserve totals for the end of the third quarter was a loss of $2,585,628, almost exactly on pace to match HACCC's budgeted loss of $6,224,050. This decline is reflective of HUD's ongoing mandate to eliminate locally controlled reserve funds. HACC Agency Summary Annual Budget 3rd Quarter Actual 12/31/14 Remaining FY Estimate Annual Total Variance Revenue $ 96,541,964 $ 74,833,204 $ 24,135,491 $ 98,968,695 $2,426,731 Expenditures $104,840,697 $ 77,418,832 $ 26,210,174 $103,629,006 $1,211,691 $ (8,298,733)$ (2,585,628)$ (2,074,683)$ ( 4,660,311) Analysis of Agency Reserves Program Beginning Balance 4/1/14 (Unaudited) 3rd Quarter ending 12/31/14 (Unaudited) Reserve Balance period ending 12/31/14 (Unaudited) Restricted Reserves Housing Choice Vouchers $ 8,494,765 $ (2,787,341)$ 5,707,424 Public Housing & Cap. Funds $ -0-$ -0-$ -0- State & Local Programs $ 495,355 $ (102,966)$ 392,389 Housing Certificates Programs $ 6,493 $ 11,840 $ 18,333 Total Restricted Reserves $ 8,996,613 $ (2,878,467)$ 6,118,146 Unrestricted Reserves Housing Choice Vouchers $ 2,579,450 $ 334,311 $ 2,913,761 Public Housing & Cap. Funds $ 958,328 $ 135,410 $ 1,093,738 State & Local Programs $ 2,159,553 $ (133,427)$ 2,026,126 Housing Certificates Programs $ 50,738 $ (43,453)$ 7,285 Total Unrestricted Reserves $ 5,748,069 $ 292,841 $ 6,040,910 Total Reserves $ 14,744,682 $ (2,585,626)$ 12,159,056 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 reserves that can be used freely are unrestricted reserves within the State and Local Programs that are not tied to the tax credit properties. These reserves can be used to support 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 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 6,783 families. However, due to funding constraints, the program is only able to support approximately 6,300 families currently. Summary of Difference Between Budgeted and Quarterly-End Estimate: Revenue – While funding constraints do not currently allow HACCC to lease all 6,783 units it has been allocated, the number of HCV units under contract has increased. The net variance of $2,236,362 is a direct result of an increase in the number of units under contract. Expenditures – As stated above, expenditures are on pace to end the year about $1.2 million less than budgeted. However, this is an increase of over $5 million from last fiscal year due to increased leasing under the HCV program. The vast majority of expenditures under the HCV program are for rent payments to private landlords. Housing Choice Vouchers Annual Budget 3rd Quarter Actual 12/31/2014 (Unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 77,818,409 $ 60,600,169 $ 19,454,602 $ 80,054,771 $ 2,236,362 Expenditures $ 85,614,890 $ 63,053,200 $ 21,403,722 $ 84,456,922 $ 1,157,967 $ (7,796,481) $ (2,453,031)$ (1,949,120)$ (4,402,151) Analysis of Program Reserves: 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 Quarterly-End Estimate: Revenue – Annualized revenue is $133,721 less than projected. However, that would be an increase of over $265,000 from last fiscal year. Expenditures - The $462,493 variance is a savings of $311,000 related to Capital Fund expenditures that either have not yet been completed or that have not yet been billed. The remaining $156,493 in savings were realized from savings in general operations, labor, utilities and tenant services. Housing Choice Vouchers Beginning Balance 4/1/14 (Unaudited) 3rd Quarter 12/31/2014 (Unaudited) Reserve Balance period ending 12/31/14 (Unaudited) Restricted Reserves $ 8,494,765 $ (2,787,341)$ 5,707,424 Unrestricted Reserves $ 2,579,450 $ 334,311 $ 2,913,761 Total Reserves $11,074,215 $ (2,453,030)$ 8,621,185 Public Housing Operating and Capital Fund Annual Budget 3rd Quarter Actual 12/31/14 (Unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 10,324,043 $ 7,609,311 $ 2,581,011 $ 10,190,322 $ (133,721) Expenditures $ 10,581,858 $ 7,473,901 $ 2,645,465 $ 10,119,366 $ 462,493 $ (257,815)$ 135,410 $ (64,454)$ 70,956 Analysis of Program Reserves: Public Housing & Capital Fund Beginning Balance 4/1/14 (Unaudited) 3rd Quarter 12/31/14 (Unaudited) Reserve Balance period ending 12/31/14 (Unaudited) Restricted Reserves $ -0-$ -0-$ -0- Unrestricted Reserves $ 958,328 $ 135,410 $ 1,093,738 Total Reserves $ 958,328 $ 135,410 $ 1,093,738 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 a contract with the City of Antioch to run their rental rehabilitation program. HACCC receives management fees for administering the Public Housing and HCV programs under HUD’s asset-management model. Summary of Difference between Budgeted and Quarterly-End Estimate: Revenue –The variance is less than 1%. Expenditures - The $53,987 projected increase is related to temporary employment services for special projects and staff turnover. State & Local Programs Annual Budget 3rd Quarter Actual 12/31/14 (Unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 5,221,015 $ 3,915,532 $ 1,305,254 $ 5,220,786 $ (229) Expenditures $ 5,463,918 $ 4,151,925 $ 1,365,980 $ 5,517,905 $ (53,987) $ (242,903)$ (236,393) $ (60,726)$ (297,118) Analysis of Reserves: State & Local Programs Beginning Balance 4/1/14 (Unaudited) 3rd Quarter 12/31/14 (Unaudited) Reserve Balance Period ending 12/31/14 (Unaudited) Restricted Reserves $ 495,355 $ (102,966)$ 392,389 Unrestricted Reserves $ 2,159,553 $ (133,427)$ 2,026,126 Total Reserves $ 2,654,908 $ (236,393)$ 2,418,515 Housing Certificate Programs Program Summary - HACCC administers two separate Housing Certificate Programs; Shelter Plus Care and Moderate Rehabilitation (Mod Rehab). 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. Summary of Difference Between Budgeted and Quarter-End Estimate: Revenue-The $324,319 variance is primarily the result of an increase in Federal funding for rent payments (HAP) and administrative fees in the Shelter Plus Care program. HAP accounted for $287,441 of the increase. Expenditure-The $354,782 variance is an increase in HAP and other program costs. The other program costs were fees paid to the County's Behavior Health Department for client supportive services. Housing Certificate Programs Annual Budget 3rd Quarter Actual 12/31/14 (Unaudited) Remaining FY Estimate Annual Total Variance Revenue $ 3,178,497 $ 2,708,191 $ 794,624 $ 3,502,815 $ 324,319 Expenditures $ 3,180,031 $ 2,739,805 $ 795,008 $ 3,534,813 $ (354,782) $ (1,534)$ (31,614)$ (384)$ (31,998) Analysis of Reserves: Housing Certificate Programs Beginning Balance 4/1/14 (Unaudited) 3rd Quarter 12/31/14 (Unaudited) Reserve Balance period ending 12/31/14 (Unaudited) Restricted Reserves $ 6,493 $ 11,840 $ 18,333 Unrestricted Reserves $ 50,738 $ (43,453)$ 7,285 Total Reserves $ 57,231 $ (31,613)$ 25,618 FISCAL IMPACT None. Information item only. CLERK'S ADDENDUM ATTACHMENTS 3rd Quarter Budget Report 1 Overview of Articles March 10, 2015 Budget Cuts Put a Big Hole in Housing Authority Security - HACCC is currently struggling with how it can continue to pay for needed security as a result of HUD funding changes last year. This article talks a little bit about the history of HUD funding for security and struggle other housing authorities are facing in continuing to pay for security. Feinstein Renews Push to Redefine Homelessness Stretching the Homeless - These articles discuss proposed legislation in Washington that would expand the federal definition of homelessness and the availability of housing services. However, it appears these changes will come with no additional funding. What Happens to Families on Housing Assistance When the Assistance Goes Away? - This article discusses the results of a recent Urban Institute study of 5,000 families who left public housing for a variety of positive and negative reasons. The study looked at how their lives improved or not over the next 10-15 years. 2 BUDGET CUTS PUT A BIG HOLE IN HOUSING AUTHORITY SECURITY Pittsburgh Post-Gazette – 1/26/2015 -- by Rich Lord McKeesport resident William Doyle was fatally shot last week in the Crawford Village public housing complex that once benefited from a federally funded police presence but now relies largely on security cameras to deter crime. Doyle, 24, who faced drug charges, didn’t live in Crawford Village, said McKeesport Housing Authority executive director Stephen L. Bucklew. Nor did the men suspected of shooting him. So why were they all there? ―The criminals prey on the poor people,‖ Mr. Bucklew said. Housing authorities are charged with sheltering low-income families, disabled people and seniors. Since 2001, Congress and the federal Department of Housing and Urban Development, which funds the authorities, have nearly shut the spigot of funding for security in public housing communities. McKeesport’s authority, for instance, got as much as $600,000 in annual Public Housing Drug Elimination Program grants during the 1990s, and used them to pay that city’s police force for extra patrols. Now those grants are gone, and the authority struggles to come up with $10,000 every few years to pay for occasional impact patrols. ―There are reasons why public housing has more problems with crime than other places,‖ said Susan J. Popkin, director of The Urban Institute’s Program on Neighborhoods and Youth Development. The complexes are ―not very secure. They’re very public. Anyone can get in there. … They have all of the ills that come with concentrated poverty. They tend to have a lot of kids.‖ The Housing Authority of the City of Pittsburgh spends more than $2 million a year for private security guards. The Pittsburgh Post-Gazette on Sunday detailed problems with the deployment of those guards. As recently as 2001, the Allegheny County Housing Authority got $859,000 in federal grants to fight drug dealing. Those grants were eliminated by President George W. Bush’s administration. Now the county authority has to carve out $901,000 for its own 10-man police force from an operating subsidy of $10.8 million, which is meant to pay for management of 3,300 apartments. HUD’s only remaining contribution to public housing security comes in the form of Emergency Safety and Security Grants, which typically total around $3 million a year nationally, and never exceed $250,000 for a single authority. They can be spent primarily on equipment — usually surveillance cameras — and never on manpower. 3 The McKeesport authority recently got one of those grants, and a few months ago finished installing around 30 new cameras, plus expensive buried cables at Crawford Village. Doyle’s shooting, though, occurred in an area not covered by the new, high-resolution cameras. Complicating matters further, HUD in late 2013 barred authorities from spending capital dollars on security personnel. As a result, said Ms. Popkin, security costs come out of the operating subsidy, ―and Congress has been cutting that steadily.‖ The Minneapolis Public Housing Authority, which once had a 12-officer police force, cut it down and then in 2011 eliminated it completely, said Mary Boler, the authority’s managing director. The authority still spends around $1.5 million a year with security firm Securitas, which mans front desks, patrols communities and monitors the security camera system. Others have maintained large security budgets. The Chicago Housing Authority spends $20.7 million a year on private security, plus $2 million on its surveillance camera system, and pays $6 million annually to the city’s police department for guaranteed police patrols. Why spend anything on security, when it’s neither required nor federally funded? ―We’re in various municipalities that are distressed,‖ with limited police forces, said Frank Aggazio, executive director of the Allegheny County Housing Authority. The authority’s internal police force is part of ―a strategy of providing a safe, comfortable living environment.‖ If residents ―feel uncomfortable, they leave,‖ said Chief Mike Vogel of the county housing authority force. ―We’d probably have a 30 percent vacancy rate if we didn’t have police.‖ Housing authorities are paid by HUD according to the number of occupied units they manage, and that subsidy barely covers maintenance and administrative costs. If authorities lose residents due to a perceived safety problem, then even less money will flow from Washington. The county authority police work closely with municipal and county officers and the district attorney, concentrating on high-impact patrols and investigations, said Chief Vogel. ―We do a lot of drug roundups over the years where we put informants in, we’ll come in six months later and round up 30 drug dealers,‖ he said. Congressionally mandated HUD budget cuts threaten to make things worse, said county authority chief financial officer Rich Stephenson. ―They’re compounding the security problem,‖ he said. ―HUD needs to give us dedicated money for security.‖ FEINSTEIN RENEWS PUSH TO REDEFINE HOMELESSNESS The Examiner – 2/18/2015 – by Chris Roberts 4 Officially, there are an estimated 6,400 homeless people in San Francisco. But there are many more adults, children and families with no permanent housing in The City — and U.S. Sen. Dianne Feinstein wants them under the same classification. Thousands of people considered homeless by The City are not included in the official biannual homeless count tally because of differing definitions of homelessness. People doubled up with friends or family, couch-surfing, or living in single-room-occupancy hotels are not considered homeless by the federal Department of Housing and Urban Development. But that would change under legislation Feinstein, the San Francisco Democrat, introduced in Congress last month that would expand the federal definition of homelessness — and also expand the availability of housing services. The disparity between people defined as homeless by the federal government and the true number of homeless people in The City is stark. The 2013 San Francisco homeless count identified less than 900 homeless children. However, there were 2,352 homeless children in San Francisco public schools last year, according to school data. And that disparity is playing out around the country. Nationwide, homeless counts tallied 222,197 homeless households with at least one child, but the Department of Education says there are 1.2 million homeless children in America. Under Feinstein’s Homeless Children and Youth Act, the government would recognize children and families living in SRO hotels, motels and doubled-up with friends or family as homeless. This is Feinstein’s second try at expanding the homeless definition, after similar legislation last year died in committee. The law would not include single adults living in similar precarious situations as the homeless. Advocates note that having more people defined as homeless would mean more money for services. The City’s total budget for homeless services is about $163 million, with about $30 million coming from the federal government for homeless outreach and services. However, shelters meant for families are at capacity, with up to an eight-month wait for family shelter, according to Elizabeth Ancker, a program director with Compass Connecting Point, which manages emergency housing for families. ―That’s a very problematic length of time,‖ she said Wednesday. ―Families can destabilize quite a bit [in six months or longer].‖ 5 There are currently 140 families on The City’s wait list for emergency shelter. That’s lower than the recent average, but that’s after 100 chronically homeless families were moved into permanent supportive housing. And The City’s ―permanent supportive housing options are full now,‖ she added, with few new units in the pipeline. It’s not clear if Feinstein’s bill will have better luck getting approved this year. If successful, The City’s homeless problem would become statistically worse overnight. However, HUD’s ―false definition‖ of homelessness needs changing for statistics to reflect reality, said Jennifer Friedenbach, the director of the Coalition on Homelessness. ―With a narrow definition, we create barriers to housing for people who need it,‖ she said. ―We’re making the need appear smaller than it actually is.‖ STRETCHING THE HOMELESS Blade, The (Toledo, OH) – 2/16/2015 – EDITORIAL A bill sponsored by Republican U.S. Sen. Rob Portman of Ohio would expand the federal definition of homelessness, enabling nearly 1 million more homeless children and young people nationwide to gain access to federal housing aid. By including children who live doubled up or in motels, the measure provides a more relevant definition of homelessness, and would serve children who are disconnected from social-service providers and vulnerable to pimps and traffickers. However, the well-intended bill does not provide more money for the hundreds of thousands of people who would be newly eligible for homeless programs run by the U.S. Department of Housing and Urban Development. Without a funding increase, the benefits of expanding eligibility are minimal — and potentially even risky if assistance is diverted from the neediest cases. Even now, HUD-funded homeless programs — amounting to $2.4 billion in President Obama’s proposed 2016 budget — serve only a fraction of those who are eligible. By using the Department of Education’s definition of homelessness instead of HUD’s, Mr. Portman’s bill could more than triple the number of people who become eligible for already underfunded programs. In Ohio, 23,748 children were homeless at some time last year, but HUD counted only 4,714 households with children as homeless. Because of HUD’s narrow definition, only an estimated one in five homeless children in Ohio is eligible for federal housing programs. In Toledo, roughly 1,000 people are homeless at any time. But the number of people who are homeless in the city at some time during the year is probably three times higher. 6 Nationwide, an estimated 610,000 people — including more than 12,000 in Ohio — are homeless at any time. More than one-third of them are in families. Those families, under the current definition of homelessness, include people who live on the street, in shelters, in cars, and under bridges. Mr. Portman’s bill would offer HUD homeless aid to poorly housed families who live doubled up with other households or in motels. That’s appropriate: Children and families who live in such dangerous and deplorable conditions need help. They can be even more disconnected from service providers and vulnerable to pimps, human traffickers, and gangs than are children in shelters. With current funding, however, they would get little aid from HUD programs. Any help they receive would come at the expense of families who are literally homeless and on the street. The Portman bill has the right idea. Even without more money, Congress should pass it. Expanding eligibility would give local communities more choices in setting priorities, as well as open doors for especially at-risk families who cannot now get help. But Mr. Portman and other bill sponsors, including Democrat Dianne Feinstein of California, should not pat themselves on the back yet. Without a substantial increase in funding, the measure could be more of a false promise than a real help to some of the nation’s most vulnerable people. WHAT HAPPENS TO FAMILIES ON HOUSING ASSISTANCE WHEN THE ASSISTANCE GOES AWAY? Washington Post – 9/22/2014 -- by Emily Badger Housing constitutes the largest expense that most of us bear every month, as well as the most essential. And yet of all of the forms of aid we offer the poor — food stamps, income support, school lunch, health care — housing assistance can be the most precarious. Only about a quarter of all families who qualify for public housing or vouchers ever receive the help, creating long backlogs and year-long waits. And families who do receive it may lose the aid for several reasons, both seemingly good (a marriage or raise made them ineligible) or bad (a rules violation got them evicted). Here is one woman, from a new Urban Institute study of housing assistance recipients, describing her deep fear of losing housing assistance: You have to go through hell and high water to get housing. And I thought, what if I can’t afford full rent? Where will my kids be, in a shelter? So you get scared because it takes so long to get housing. You know what I mean? It’s like a trap. It’s hard to get in, and because of that, you’re scared to get out. Despite this shaky picture, we actually don't know a lot about what happens to families as they transition off (or get evicted from) housing assistance. But the answer is more important than ever as local housing agencies, facing shrinking budgets and rising demand, look for ways to stretch their resources further. If we were to set time limits on housing vouchers, what would happen to families when their time is up? Does housing aid offer a "springboard to better 7 outcomes" or a safety net without which families will fall into homelessness? In short, are people better off when they leave these programs? The new Urban study, from Robin Smith, Susan Popkin, Taz George and Jennifer Comey, suggests some discouraging answers. They examined data from HUD's Moving To Opportunity demonstration, which followed a sample of about 5,000 families who started in public housing in five cities in 1994 over the next 10-15 years. At the time, the project was trying to track what happens to low-income families who are given the chance to move to low-poverty neighborhoods (Thomas Edsall at the New York Times recently wrote an exhaustive piece about the conflicting and controversial answers to this question). The Urban researchers, though, have posed a different question about the data: Regardless of how families originally received the assistance, what happened to the households who were no longer getting any housing aid by the end of the survey? About 35 percent of all the MTO families met this description. And the below chart summarizes the mixed results in their lives: The households who were no longer receiving assistance by the end of the survey were making significantly more money than those who still were, and they reported being in better health. "But even among the households that left on a more positive trajectory, they're still struggling heavily with debt," says George. "They're still on other forms of public assistance. They’re severely burdened in terms of finding affordable housing." Many of these families earned too much that they no longer qualified for housing help, but that actually left them with higher housing cost burdens on the open market. And it left them more 8 prone to homelessness, even if they left assistance for positive reasons. Whatever additional money these families were seeing through better jobs or new marriages, the costs of finding housing on their own erased many of those benefits. "This really spoke to us that there needed to be a two-pronged set of solutions," Popkin says. "One is a much bigger focus on eviction prevention for people lucky enough to get in. The other is some kind of graduated way of getting people off so they aren’t just left hanging. Because it’s a big cliff when they go." The first solution could entail efforts to identify and work with tenants who might violate program rules. The second could involve slowly reducing the size of assistance until a family is on firmer ground. As with a lot of ideas about how to strengthen housing assistance, both would require more time from staff and more money for families. Which brings us back to the original problem that housing agencies are already tight on money. "I don’t see a free solution to the problem," George says. Emily Badger is a reporter for Wonkblog covering urban policy. She was previously a staff writer at The Atlantic Cities.