The Department of Housing and Urban Development (HUD) requires a Commission approved budget to be in place prior to the beginning of each Yolo County Housing (YCH) fiscal year (July 1). In addition to adoption of the budget, HUD requires submission of HUD form HUD-52574. HUD funding is appropriated on a calendar year while YCH adopts a fiscal year budget. As a result, budgets require adjusting for the second half of the YCH fiscal year and the adopted budget is subject to modification at the mid-year point.
This year’s budget includes several one-time challenges, shown in detail in the following pages. More than usual, we expect this budget will be adjusted by mid-year. The primary issues affecting this budget cycle include the following:
- Transition to the new Executive Director and several reorganizational projects, including the significant software upgrade, are being completed prior the end of the fiscal year so expenditures on additional staffing and consultants are anticipated to be coming to an end during the 2023 calendar year.
- Staffing patterns are expected to stabilize in the next fiscal year as many of the vacated senior level positions are filled. As a result, the need to utilize temporary help to backfill positions should be minimized throughout the year.
The following pages include brief program descriptions for each budget unit, budget detail, and an explanation of the significant changes. This detail is provided for information only, the Commission will adopt the attached summary budget.
Fiscal Information – Summary Budget Updates by Program
Voucher Program:
The purpose of the voucher program is to administer federally funded rental payments to private landlords, covering the difference between what a household can contribute based on their adjusted gross income and the local fair market rent.
Various voucher types target specific needs in the population including Tenant Based, Project Based, Tenant Protection, VASH (veterans), Family Reunification, Home Ownership, Mainstream (non-elderly disabled) and Emergency Housing.
A significant focus for voucher program staff over the next few years will be to increase utilization of available voucher funding by finding additional landlords to work with on the voucher program and ultimately use the voucher funding awarded to house as many families as possible in this extremely tight market where the inventory of available units remains extremely low. To accomplish this staff will work with other community partners on additional landlord outreach and tenant advocacy efforts.
Noteworthy operating budget items include:
- Staff have used conservative estimates of funding based the current voucher levels knowing that successful outreach and housing additional families comes with additional funding from HUD. These numbers will be updated with the mid-year budget if staff are successful in increasing the number of families actually housed.
- Salaries and benefits cost increases of $15,389 are being driven by the unfunded pension liability.
- The expected $96,849 decrease in operating costs is related a declining need for consulting help as the computer system conversion that began in early 2022 should be wrapping up during the first half of the fiscal year and few temporary workers as in-house staff is stabilized.
- To support landlord engagement efforts during this fiscal year, staff have allocated $25,000 in the professional services category for landlord incentives. Staff will be holding landlord sessions to determine the most appropriate incentive structure to maximize this opportunity. This figure may grow to as much as $40,000 throughout the year depending on other professional service needs and costs. Voucher payment costs per voucher continue to climb due to limited availability of housing units in the market.
Public Housing Program:
The Public Housing Program provides decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. YCH maintains 431 rental units at six locations in 12 discrete developments that are grouped into 3 Asset Management Properties or “AMP’s”.
Operating revenue includes tenant rents (based on 30% of household income), plus operating and capital fund subsidies from HUD. Capital funds are awarded annually but spent over the following four years, so the actual amount spent (and recognized as revenue) each year will vary.
.JPG)
The priorities of the public housing program over the next couple of years will be to focus on post-pandemic rent collection, capital improvement work, and preparing for redevelopment activities at a few sites.
Noteworthy budget items include:
- As highlighted in the Public Housing Rent Collection presentation, the anticipated Unencumbered Fund needed to fill the deficit created by previous rent collection challenges is much lower than anticipated at midyear 22/23 budget.
- Increased revenue of $495,233 is expected as collection amounts return to normal.
- The lack of household inspections during the pandemic had created a backlog of maintenance items that were primarily addressed during FY 2022-23. This combined with a more regionalized approach to maintenance staffing, there is an expected reduction in FY 2023-24 personnel costs by $84,081 and other maintenance costs by $39,893 as these expenditures return to normal levels.
- As the computer system conversion and large procurement projects are completed and new staff are settled into supervisory positions the use of consultants and temporary staff will be reduced by about $92,000.
- An 11% increase to insurance premiums is anticipated to cost about $30,000 in the new fiscal year.
- A renewed focus on monitoring water leaks and excessive usage by residents in Woodland is expected to bring the cost of water back to normal levels and save approximately $40,000.
- Note that principal payments had not been included in the FY 2022-23 mid-year budget update so the debt service numbers in this analysis have been adjusted to reflect this additional information.
Migrant Housing Program:
The Migrant Housing Program provides safe, decent, and affordable rental housing to seasonal farm working families. YCH manages 232 seasonal rental units at three locations in Davis (62 units) and Madison (88 units) in Yolo County, plus the Rehrman Migrant Center in Dixon (82 units) in Solano County for the Housing Authority of the City of Dixon (DHA). The Dixon Center is included in this budget for information only; it is managed by YCH staff for DHA.
Significant changes:
- The numbers shown reflect the submission for the new two-year budget (FY2023-24 & FY2024-25) which was submitted to the California Department of Housing and Community Development (HCD) Office of Migrant Services (OMS) for the 3 migrant centers managed by YCH. The contracts for the final operations budget numbers will be brought back to the respective boards for approval in the near future.
- Subsequent to the submission of the FY23/24 & 24/25 submission to HCD, YCH applied for additional grant funding for high-speed internet service to these sites through OMS which have not been incorporated into this budget as the funding will be coming as a separate grant. The contracts for these additional funds will also be brought back to the respective boards for approval.
- The reduction in budgeted personnel costs reflects the removal of the duplicate funding for a second property manager which had been provided previously allocated to the property and a reduction in the maintenance staff time based on the scope of capital improvement work being done at the sites.
Other Residential Housing Program:
Through “other residential housing programs”, YCH provides asset management at various locations, in partnership with City and County government-funded supportive service programs. YCH maintains three types of properties, funded by the source as noted in parentheses.
Owned by YCH:
Two “Helen M. Thomson Homes” for individuals receiving mental health services (cost reimbursement)
One home for individuals on probation (cost reimbursement)
Three duplexes and a single-family home for low-income agricultural families (tenant rent)
Significant budget changes:
- Planned improvements of $220,000 (funded with YCH Development fund moneys given to YCH to assist with affordable housing in Davis) with contractors plus potential additional improvements done by YCH staff of $49,000 (funded with replacement reserve monies) to the duplexes and single-family home for agricultural families have been deferred to late FY2023. This was one-time money received as Grant Income in FY 2022-23 and the reason for the $207,879 difference (71% reduction) to FY 2023-24 projections.
- Other properties are not expected to be materially different from prior years’ budgets.
Owned by others:
Apartment complex owned by the City of Davis (cost reimbursement)
Apartment complexes and other units owned by private parties (monthly fee for expected costs with any remaining funding to be held in a reserve fund for the CalWORKs program)
Significant budget changes:
- The increases are related to adding another 26 units to 12 existing units under the CalWORKs program.
Client Services Program:
Client Services Programs serve tenants living in YCH properties or utilizing voucher programs.
Services can include brief case management, links to other available services, development of economic self-sufficiency or stabilization, and training related to landlord and neighbor relationships. This program is renewed annually on a calendar year basis.
Significant changes:
- The program was recently changed so that only specific self-sufficiency staffing costs are allowed.
Grants Management Program:
The Grants Management Program supports partner jurisdictions with grant writing to secure Federal, State and Local housing-related funding, and assists as project consultants with implementation and ongoing monitoring of programs, including Home Investment Partnerships Program (HOME), Community Development Block Grant (CDBG), Permanent Local Housing Allocation (PLHA), and CARES Act grant funds.
This is a cost reimbursement program.
Significant budget changes include:
- In collaboration with each jurisdiction, this program is being discontinued at the end of the FY 2022-23 fiscal year.
Administration:
The Central Office Cost Center (COCC) provides all administrative support functions including finance, facilities management, human resources, risk management, operations management, and IT services, in addition to the agency’s main administration building.
Nearly all revenue for administration services comes from the following sources:
- Rents and tenant charges for use of administration building, owned by YCH, are charged to the programs and an unrelated commercial tenant. Reimbursement of costs for facilitating rent payments to third party landlords foster youth (THP) is also included here.
- Fees for services are charged to programs for management, finance, maintenance staff and copier usage.
- Interest and other income include interest income and grants received for the administration building, including the generator project.
- Solar income from the Public Housing properties pays for the solar power produced by the arrays owned by COCC.
Significant budget changes include:
- Anticipated reduction in management fees related to migrant center rehabilitation work (which is currently shown in FY 2022-23 but may actually be paid in FY 2023-24) coupled with the elimination of the grants management program create a net reduction of $122,321 other income.
- Reduction in staffing costs is primarily related to onboarding of the new executive director to replace temporary executive staff that had been filling this role for the past 2 years and included some overlap transition time in FY 2022-23.
- The reduction in professional services is related to the completion of several transition projects which were completed and the computer system migration that should be wrapping up by the end of the 2023 calendar year.
- Debt service is related to the loan on the solar arrays.
Summary
This year’s budget reflects decreased costs for staffing as many of the transition projects are coming to a close. Staff expects the budgets to stabilize next year with consistent staffing patterns, increased rent collection focus, and the completion of the Yardi conversion. This budget also reflects projects that not only will provide additional housing opportunities countywide like the increase in the CalWORKs master lease program and landlord incentive program, but also reflects opportunities that will improve the living conditions for tenants in many of our programs through the significant rehabilitation/capital improvement projects anticipated to be completed this fiscal year.
|
