Agenda

Return

C.3

To:	Contra Costa County Housing Authority Board of Commissioners
From:	Joseph Villarreal, Housing Authority
Date:	March 8, 2016

Contra

Costa

County

Subject:

2015-2016 3rd Quarter Budget Report

Action of Board On: 03/08/2016

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

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 8, 2016
,

BY:	, Deputy

RECOMMENDATIONS

ACCEPT the 3rd Quarter (Unaudited) Budget Report for the period ending 12/31/2015.

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 12/31/2015. 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

BACKGROUND (CONT'D)

Changes in HACCC's overall budget position for the third quarter are shown in the chart below. Activity in the housing choice voucher program (HCV) had the most significant impact on HACCC's budget.

Projected revenue increased by $3,761,739 primarily as a result of continued HCV utilization growth. The growth is a result of new project-based units being brought online and new clients being called from the wait list to fill these units. The increased revenues will be funded through the HUD-held restricted reserves with a current balance of $5,772,593. Expenditures increased overall by $1,253,668 as a result of increased growth in HCV program, which overshadowed a savings in operating expenditure of $592,517.

HACC Agency Summary	Annual Budget	3rd Quarter Actual 12/31/15	Remaining FY Estimate	Annual Total	Variance
Revenue	$ 104,372,487	$ 82,041,104	$ 26,093,122	$ 108,134,226	$ 3,761,739
Expenditures	$ 105,721,640	$ 80,544,898	$ 26,430,410	$ 106,975,308	$(1,253,668)
	$ (1,349,153)	$ 1,496,206	$ (337,288)	$ 1,158,918

The net change to reserve totals for the end of the third quarter was a gain of $1,496,207 (the $1,496,206 shown in the spreadsheet above is due to rounding). The net gain was a result of an increase to unrestricted reserves in the amount of $1,312,913 and in restricted reserves of $183,294 as shown in the summary below.

Analysis of Agency Reserves	Beginning Balance 4/1/15 (Unaudited)	3rd Quarter ending 12/31/15 (Unaudited)	Reserve Balance period ending 12/31/15 (Unaudited)
Total Reserves	$ 13,913,342	$ 1,496,207	$ 15,409,549

Restricted Reserves
Housing Choice Vouchers	$ 5,524,220	$ 248,373	$ 5,772,593
Public Housing & Cap. Funds	$ -0-	$ -0-	$ -0-
State & Local Programs	$ 1,933,719	$ ( 78,294)	$ 1,855,425
Housing Certificates Programs	$ -0-	$ 13,215	$ 13,215
Total Restricted Reserves	$ 7,457,939	$ 183,294	$ 7,641,233

Unrestricted Reserves
Housing Choice Vouchers	$ 3,058,940	$ 949,308	$ 4,008,248
Public Housing & Cap. Funds	$ 803,588	$ 341,492	$ 1,145,080
State & Local Programs	$ 2,592,875	$ 22,113	$ 2,614,988
Housing Certificates Programs	$ -0- .	$ -0- .	$ -0- .
Total Unrestricted Reserves	$ 6,455,403	$ 1,312,913	$ 7,768,316

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 to an average leasing level of 6,371. The net variance of $3,486,064 was a result of an increase in HAP funding in the amount of $3,093,187 and increased administrative fees in the amount of $392,877. Both of these increases are due to a greater number of families receiving assistance than were budgeted.

Expenditures – As stated above, expenditures are on pace with the increase in revenue. However, due to savings in operating expenditures the variance is down to $1,794,797.

Housing Choice Vouchers	Annual Budget	3rd Quarter Actual 12/31/15 (Unaudited)	Remaining FY Estimate	Annual Total	Variance
Revenue	$ 84,931,760	$ 67,184,884	$ 21,232,940	$ 88,417,824	$ 3,486,064
Expenditures	$ 85,589,875	$ 65,987,203	$ 21,397,469	$ 87,384,672	$ (1,794,797)
	$ (658,115)	$ 1,197,681	$ (164,529)	$ 1,033,152

Analysis of Program Reserves:

Housing Choice Vouchers	Beginning Balance 4/1/15 (Unaudited)	3rd Quarter 12/31/15 (Unaudited)	Reserve Balance period ending 12/31/15 (Unaudited)

Restricted Reserves	$ 5,524,220	$ 248,373	$ 5,772,593
Unrestricted Reserves	$ 3,058,940	$ 949,308	$ 4,008,248
Total Reserves	$ 8,583,160	$ 1,197,681	$ 9,780,841

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. To help address long-term needs, 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 – The variance of $166,020 was primarily related to increases in tenant rent levels.

Expenditures - The variance of $368,833 is a result of unexpended capital fund improvements to date.

Public Housing Operating and Capital Fund	Annual Budget	3rd Quarter Actual 12/31/15 (Unaudited)	Remaining FY Estimate	Annual Total	Variance
Revenue	$ 10,324,043	$ 7,909,052	$ 2,581,011	$ 10,490,063	$ 166,020
Expenditures	$ 10,581,858	$ 7,567,561	$ 2,645,465	$ 10,213,025	$ 368,833
	$ (257,815)	$ 341,491	$ (64,454)	$ 277,037

Analysis of Program Reserves:

Public Housing & Capital Fund	Beginning Balance 4/1/15 (Unaudited)	3rd Quarter 12/31/15 (Unaudited)	Reserve Balance period ending 12/31/15 (Unaudited)

Restricted Reserves	$ -0-	$ -0-	$ -0-
Unrestricted Reserves	$ 803,588	$ 341,492	$ 1,145,080
Total Reserves	$ 803,588	$ 341,492	$ 1,145,080

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 of $194,479 was primarily a result of an increase in management fees earned due to increased utilization in the voucher and shelter plus care programs, increased rents in the tax credit properties.

Expenditures - The $45,434 variance is a result of staff turnover.

State & Local Programs	Annual Budget	3rd Quarter Actual 12/31/15 (Unaudited)	Remaining FY Estimate	Annual Total	Variance
Revenue	$ 5,272,282	$ 4,148,690	$ 1,318,071	$ 5,466,761	$ 194,479
Expenditures	$ 5,667,073	$ 4,204,871	$ 1,416,768	$ 5,621,639	$ 45,434
	$ (394,791)	$ ( 56,181)	$ (98,698)	$ (154,879)

Analysis of Reserves:

State & Local Programs	Beginning Balance 4/1/15 (Unaudited)	3rd Quarter 12/31/15 (Unaudited)	Reserve Balance Period ending 12/31/15 (Unaudited)

Restricted Reserves	$ 1,933,719	$ (78,294)	$ 1,854,885
Unrestricted Reserves	$ 2,592,875	$ 22,113	$ 2,614,985
Total Reserves	$ 4,526,594	$ (56,181)	$ 4,469,870

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 $84,824 variance in revenue is a result of decreased Federal funding for rent payments (HAP) and is also the primary cause of the $126,862 reduction in expenditures.

Expenditure- The $126,862 variance in expenditure is primarily the reduction of HAP as outlined above, the remaining $42,038 savings is tied to labor costs due to staff turnover.

Housing Certificate Programs	Annual Budget	3rd Quarter Actual 12/31/15 (Unaudited)	Remaining FY Estimate	Annual Total	Variance
Revenue	$ 3,844,402	$ 2,798,478	$ 961,101	$ 3,759,579	$ (84,824)
Expenditures	$ 3,882,833	$ 2,785,263	$ 970,708	$ 3,755,971	$ 126,862
	$ (38,431)	$ 13,215	$ (9,608)	$ 3,607

Analysis of Reserves:

Housing Certificate Programs	Beginning Balance 4/1/15 (Unaudited)	3rd Quarter 12/31/15 (Unaudited)	Reserve Balance period ending 12/31/15 (Unaudited)

Restricted Reserves	$ -0-	$ 13,215	$ 13,215
Unrestricted Reserves	$ -0-	$ -0- .	$ -0- .
Total Reserves	$ -0-	$ 13,215	$ 13,215

FISCAL IMPACT

None. Information item only.