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HomeMy WebLinkAboutMINUTES - 12092008 - SD.3 (2) HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS FROM: Joseph Villarreal, Executive Director DATE: December 9, 2008 SUBJECT: FY 2008-2009 2nd Quarter Budget Report SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION I. RECOMMENDED ACTION: ACCEPT the FY 2008-2009 2nd Quarter (Unaudited) Budget Report for the period ending 9/30/08. II. FINANCIAL IMPACT: None. Information item only. III. REASONS FOR RECOMMENDATION/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 2nd quarter of the fiscal year ending 3/31/09. The report begins with a summary of the Authority's overall financial position. Following 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 the Authority's quarterly financial positions, and a breakdown of program reserves. AGENCY OVERVIEW: Budget Report 2nd Quarter Actuals 9/30/08 Estimate to Annual HACCC Agency Summary Annual Budget (unaudited) Complete FY Estimate Variance Revenue $ 89,619,425 $ 48,368,712 $ 48,368,712 $ 96,737,424 $ 7,117,999 Expenditures 1 $ 95,071,657 $ 47,466,345 $ 47,466,345 1 $ 94,932,690 1 $ 138,967 To Reserves I $, 5,452,232 $ 902,367 $ 902,367 1 $ 1,804,734 $ 7,256,966 HACCC's actual revenue compared to the budgeted amount increased by $7,117,999. This is primarily due to the fact that restricted Housing Assistance Payments (HAP) reserves increased by $8,008,000. This money can only be used to assist residents in the Housing Choice Voucher Program, Additionally, HACCC received an increase of$671,552 in administrative fees for the Housing Choice Voucher Program. However, some of this was increase was due to delayed payments by HUD. The Authority's major concern is a severe reduction in the amount received from CONTINUED ON ATTACHMENT: YES SIGNATURE G%( �-- Joseph Villarreal,Executive Director RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON Qd APPRO ED AS RECOMMENDED X OAR VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT 16r-t t_ ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTE OF THE BOARD OF COM S ONERS ON THE DQATE SHOWN. ATTESTED / d JOSEPH VILLARREAL,CLERK OF THE BOARD OF COMMISSIONERS ND EXECUTIVE DIRECTOR BY PUTY H:\JudyHayes\MSOFFICE\WINWORD\BOARD\BO-2nd Qtr FY 09 Financial Report.doc HUD for public housing operating subsidy versus the amount budgeted. HACCC received approximately $1,395,944 less than expected. Staff is currently discussing this shortfall with HUD and will provide a report to the Board at January's meeting specifically on this matter. Actual expenditures compared to the budgeted amount decreased by $138,967. The primary factor was related to Capital Fund Improvements that have not yet been completed or expensed. Analysis of Agency Reserves Beginning Balance 4/1/08 2nd Quarter 9/30/08 Reserves Balance Program unaudited unaudited 9/30/08 unaudited Total Reserves $ 14,886,310 $ 902,367 $ 15,788,677 Restricted Reserves Housing Choice Vouchers $ 12,113,940 $ 1,300,217 $ 13,414,157 Public Housing&Capital Fund $ 151,961 $ 85,039 $ 237,000 State&Local Programs $ 1,285,019 $ (118,128) $ 1,166,891 Housing Certficates Programs $ 26,559 $ 2,623 $ 29,182 Total Restricted Reserves $ 13,577,479 $ 1,269,751 $ 14,847,230 Unrestricted Reserves Housing Choice Vouchers $ (486) $ 212,823 $ 212,337 Public Housing&Capital Fund $ 35,880 $ (526,316) $ (490,436) State&Local Programs $ 1,245,797 $ (71,296) $ 1,174,501 Housing Certficates Programs $ 27,640 $ 17,405 $ 45,045 Total Unrestricted Reservesl $ 11308,831 1 $ 367,384 $ 941,447 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 (Section 8) provides rental 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. The HAP is paid by the Authority directly to the owner. Through its HCV program, HACCC is able to provide affordable housing assistance to 6,781 families. Summary of Difference Between Budgeted and 2nd Quarter Actual: 2nd Quarter Actuals 9/30/08 Estimate to Annual Housing Choice Vouchers Annual Budget (unaudited) Complete FY Estimate Variance Revenue $ 71,447,690 $ 40,063,621 $ 40,063,621 $ 80,127,242 $ 8,679,552 Expenditures $ 77,054,029 $ 38,550,581 1 $ 38,550,581 $ 77,101,162 $ 47,133 To Reserves $ 5,606,339 $ 11513,040 $ 1,513,040 1 $ 3,026,080 $ 8,632,419 Revenue - The positive variance of $8,679,552 is related to excess HAP funding in the amount of roughly $8,008,000 that HUD'has not recaptured or redirected at this time, and a $671,552 increase in administrative fees earned. Expenditures - The negative variance of$47,133 is primarily related to increased legal fees in the program area. Analysis of Program Reserves: Reserves Balance Beginning Balance 2nd Quarter 9/30/08 9/30/08 Housing Cho ice Vouchers 4/1/08 (unaudited) (unaudited) (unaudited) Restricted Reserves $ 12,113,940 $ 1,300,217 $ 13,414,157 Unrestricted Reserves 1 $ 486 $ 212,823 1 $ 212,337 Total Reserves $ 12,113,454 $ 1,513,040 $ 13,626,494 Public Housing Operating and Capital Funds Program Summary - HACCC owns and manages 1,168 public housing units at 16 different sites throughout the County. Operating funds for these properties come from rents collected from tenants 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 a 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 2nd Quarter Actual: Public Housing & 2nd Quarter Estimate to Capital Fund Annual Budget Actuals 9/30/08 Complete FY Annual Estimate Variance Revenue $ 11,110,570 $ 41915,918 $ 4,915,918 $ 9,831,836 $ (1,278,734) Expenditures $ 11,076,911 $ 5,357,195 $ 5,357,195 $ 10,714,390 $ 362,521 $ 33,659 $ (441,277) $ (441,277) $ (882,554) $ (916,213) Revenue- The negative variance of$1,278,704 is a direct result of reduced operating subsidy. The Authority has submitted an appeal to HUD to address this issue. Expenditures- The positive variance of$362,521 was related to two primary issues. Capital fund improvements that have not been incurred accounted for $230,000 and the remaining $132,521 is management fees not incurred from asset management. Analysis of Program Reserves: Reserves Balance Beginning Balance 2nd Quarter 9/30/08 9/30/08 Public Housing &Capital Fund 4/1/08(unaudited) (unaudited) (unaudited) Restricted Reserves $ 151,961 $ 85,039 $ 237,000 Unrestricted Reserves $ 35,879 $ 526,316 $ 490,437 Total Reserves I $ 187,840 $ 441,27 $ 253,437 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, the Authority 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. 1 Summary of Difference Between Budgeted and 2nd Quarter Actual: 2nd Quarter Housing Certificate Actuals 9/30/08 Estimate to Annual Programs Annual Budget (unaudited) Complete FY Estimate Variance Revenue $ 3,188,816 $ 1,584,423 $ 1,584,423 $ 3,168,846 $ (19,970) Expenditures $ 3,194,087 $ 1,564,395 $ 1,564,395 $ 3,128,790 $ 65,297 To Reserves $ (5,271)1 $ 20,028 1 $ 20,028 $ 40,056 1 $ 45,327 Revenue - The negative variance in the amount of $19,970 was primarily a result of reduced HAP funding provided by HUD. Expenditures - The positive variance in the amount of$65,297 was a combination of an increase in Shelter Plus Care administrative expenses estimated to be $140,338 and a reduction in HAP estimated at $205,635. Analysis of Reserves: Housing Certificate Beginning Balance 2nd Quarter 9/30/08 Reserve Balance 9/30/08 Programs 4/1/08 (unaudited) (unaudited) (unaudited) Restricted Reserves $ 26,559 $ 2,623 $ 29,182 Unrestricted Reserves $ 27,640 $ 17,405 $ 45,045 Total Reserves $ 54,199 $ 20,028 $ 74,227 State and Local Programs Program Summary- HACCC administers a variety of programs and activities that are either not HUD funded 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 contracts with the County and the City of Antioch to run their rental rehabilitation programs. The Authority has now begun to realize revenue and expenditures related to asset-based management pertaining to the oversight of public housing. Summary of Difference Between Budgeted and 2nd Quarter Actual: Revenue $ 3,872,349 $ 1,804,750 $ 1,804,750 $ 3,609,500 $ (262,849) Expenditures $ 3,746,631 $ 1,994,174 $ 1,994,174 $ 3,988,348 $ 241,717 To Reserves $ 125,718 $ (189,424) $ (189,424) $ (378,848) $ (504,566) Revenue - The negative variance in revenue was primarily related to three different items. First, is due to a $130,000 shortfall in the fees for service the Authority budgeted under HUD's new project- based management system. This shortage is because this is the first year of budgeting under project-based management and staff had no historical basis upon which to develop this projection. The other two items affecting revenues were a higher than normal vacancy loss at the DeAnza tax credit project that accounted for$108,200 of the total variance and a reduction in investment and management fee income that accounted for the remaining $24,649. Expenditures —The negative variance in expenditures occurred because of utility costs in the Authority's two tax credit properties that were $194,000 more than budgeted and $47,717 more than budgeted in repair and grounds costs at the tax credit properties. Analysis of Reserves: Reserves Balance Beginning Balance 2nd Quarter 9/30/08 9/30/08 State& Local Programs 4/1/08 (unaudited) (unaudited) (unaudited) Restricted Reserves $ 1,285,019 $ (118,128) $ 1,166,891 Unrestricted Reserves $ 1,245,797 $ 71,296 $ 1,174,501 Total Reservesi $ 2,530,816 $ 189,424 $ 2,341,392 IV. CONSEQUENCES OF NEGATIVE ACTION: None. Information item only.