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Home My WebLink About2005-06-07; Housing & Redevelopment Commission; 373; Budget Amendment for Section 8 Rental Assistance1 HOUSING AND REDEVELOPMENT COMMISSION - AGENDA BILL - MTG. 6/7/05 BUDGET AMENDMENT FOR THE SECTION 8 RENTAL CITY ATTY. ASSISTANCE PROGRAM AND APPROPRIATION OF DEPT. HlRED FUNDS CITY MGR a RECOMMENDED ACTION: ADOPT Housing and Redevelopment Commission Resolution No. 395 APPROVING a budget amendment and additional budget appropriation of $435,000 for the Section 8 Rental Assistance Program for fiscal year 2004-05, and authorizing the Finance Director to expend said funds for related program costs. ITEM EXPLANATION: During preparation of the 2004-05 budget for the federal Section 8 Rental Assistance Program, there was uncertainty as to how future program year funding was going to be allocated to the program by the US Department of Housing and Urban Development (HUD). Therefore, staff experienced some difficulty in preparing a precise budget for the program. Prior to January 1, 2005, HUD based its rental assistance funding on the voucher lease up rate for the program. Therefore, in calculating the 2004-05 budget for the rental assistance program, staff anticipated a voucher lease up rate of approximately 90% because that was our ending average for fiscal year 2003-04. This resulted in an anticipated budget of $6,047,197 which was approved by the Housing and Redevelopment Commission. The approved budget represents a monthly cost of approximately $503,933 (including administrative costs). After the budget was approved, staff was told by HUD that future year funding would be based on each agency's lease up rate at a given point in time and become a fixed rate payment. As a result, staff made a very significant effort to increase its lease up rate to ensure maximum program funding. The program lease up rate is currently 95% but has been as high as 98% during the fiscal year. The effort to increase the rental assistance program's lease up rate and an increase in the housing assistance payment standards has resulted in a situation where the approved budget is now not adequate to cover the final budget year costs of the program. The Housing and Redevelopment Department requires an additional budget appropriation of $435,000 for the rental assistance program to cover all remaining costs through to June 30, 2005. This will result in a total budget appropriation of $6,482,197 ($540,183 per month) for the Section 8 Rental Assistance Program for fiscal year 2004-05. It is anticipated that the total 2004-05 costs for the rental assistance program will be recovered through payments from HUD and existing program cash reserves. There will be sufficient cash by the end of the fiscal year to cover the additional budget appropriation requested by staff at this time. It is expected that the program will ultimately have an approximately $75,700 ending cash balance. STAFF RECOMMENDATION Staff recommends that the Housing and Redevelopment Commission adopt the attached resolution to authorize the additional appropriation of $435,000 to the Section 8 Rental Assistance Program. J PAGE 2 OF AGENDA BILL NO. 373 FISCAL IMPACT: Adoption of the attached resolution will approriate an additional $435,000 to the Section 8 Rental Assistance Program, and authorize the Finance Director to expend said funds for related program costs. The program has sufficient funding authority from the US Department of HUD and cash reserves to recover all of said costs. There will be no financial impact to the General Fund. It is anticipated that the program will ultimately have an ending cash reserve balance of approximately $75,700 for fiscal year 2004-05. For information purposes, it is important to note that as of January 1, 2005, HUD revised their funding policies and established a fixed monthly payment program rather than adjusting payments according to lease up rates. While this makes it easier to prepare future budgets for the program, it will ultimately result in a loss in total program funding for 2005-06. Staff is implementing cost cutting measures to address this loss in funding. These cost cutting measures will be addressed in a separate report to the City Council. EXHIBITS: 1. Housing and Redevelopment Commission Resolution No. 395 DEPARTMENT CONTACT: Debbie Fountain (760) 434-281 5, dfoun@ci.carlsbad.ca.us 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HOUSING AND REDEVELOPMENT COMMISSION RESOLUTION NO. 395 THAT THE HOUSING AND REDEVELOPMENT COMMISSION APPROVE A BUDGET AMENDMENT AND AN ADDITIONAL BUDGET APPROPRIATION OF $435,000 FOR THE SECTION 8 AND AUTHORIZATION FOR THE FINANCE DIRECTOR EXPEND SAID FUNDS FOR RELATED PROGRAM COSTS RENTAL ASSISTANCE PROGRAM FOR FISCAL YEAR 2004-05, WHEREAS, the Housing and Redevelopment Department had an unanticipated increase in its voucher lease up rate for the Section 8 Rental Assistance Program in fiscal year 2004-05 which resulted in unanticipated increases in costs; and WHEREAS, in addition, there were increases in costs related to the payment standards for the participants on said Section 8 Rental Assistance Program; and WHEREAS, the Housing and Redevelopment Department requires additional budget appropriation for fiscal year 2004-05 to cover said unanticipated program cost increases for the Section 8 Rental Assistance Program; and WHEREAS, the City has adequate program cash reserves, and the U.S. Department of Housing and Urban Development will provide adequate federal funding, to cover said program costs for the Section 8 Rental Assistance Program. NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing and Redevelopment Commission of the City of Carlsbad, California, as follows: 1. The above recitations are true and correct. 2. That the Housing and Redevelopment Commission hereby approves an amendment to the 2004-05 budget for the Section 8 Rental Assistance Program. 3. That the Finance Director is hereby authorized to appropriate an additional $435,000 to the 2004-05 Section 8 Rental Assistance Program budget for the purpose of covering all related program costs through to June 30,2005. /!If ffff /Iff 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1 7- 18 19 20 21 22 23 24 25 26 27 28 Page 2 of HRC Resolution No. 395 3. That the Finance Director is hereby authorized to expend the additional budget appropriation for all appropriate program costs related to the Section 8 Rental Assistance Program, and to recover said costs through the use of cash program reserves and through receipt of additional program funds from the US Department of Housing and Urban Development. PASSED, APPROVED, AND ADOPTED at a special meeting of the Housing and Redevelopment Commission of the City of Carlsbad, California, held on the 7th day of June, 2005 by the following vote, to wit: AYES: Commissioners Hall, Kulchin, Packard, Sigafoose NOES: None ABSENT: Commissioner Lewis CLAUDE A. LEWIS, CHAIRMAN MATT HALL, Vice-Chair ATTEST: