April 16, 2024
Richmond Housing Authority
& City of Richmond
Finance Department
DATE: April 16, 2024
TO: Richmond Housing Authority Board of Commissioners and Members of the Richmond City Council
FROM:
Nannette Beacham, Director of Economic Development
Andrea Miller, Director of Finance
Gabino Arredondo, RHA, Interim Executive Director
Rita Martinez, Senior Accountant
Subject:
Fiscal Year (FY) 2023-2024 Amended Budget
Adjustments
FINANCIAL IMPACT: The FY 2023-2024 mid-year adjustments include an overall increase in revenue of $51,107 and an increase in expenditures of $51,107. The adjusted mid-year budget
consists of $5,614,495 in estimated revenues and
$5,614,495 in expenditures providing a balanced budget, with no increase to the general fund subsidy.
PREVIOUS COUNCIL
ACTION:
June 20, 2023
STATEMENT OF THE
ISSUE:
Staff is requesting that the Richmond Housing Authority (RHA) Board of Commissioners and members of the
Richmond City Council review and approve the RHA
Fiscal Year 2023-2024 amended operating budget and
approve the recommended budget adjustments.
RECOMMENDED ACTION:
ADOPT a joint resolution approving the proposed Fiscal
Year (FY) 2023-2024 Richmond Housing Authority (RHA)
amended budget adjustments with revised estimated
revenues of $5,614,495 and total expenditures of
$5,614,495, with no increases to the general fund
subsidy amount which will provide sufficient revenue to match anticipated expenditures – RHA/Finance (Gabino
Arredondo/Rita Martinez 510-621-1300).
JOINT MEETING
AGENDA REPORT
April 16, 2024
DISCUSSION:
Background
The Richmond Housing Authority (RHA) provides affordable housing for low and very low-income Richmond residents through the U.S. Department of Housing and Urban Development (HUD) federally funded housing programs. RHA owns multiple public housing properties and manages one property occupied by residents (Nystrom Village) with approximately 100 units. There are an additional 393 units associated with RHA entities (Richmond Village, Triangle Court, Friendship Manor), 148 units rehabilitated and occupied at Hacienda Heights, and 142 units currently being renovated by EAH Housing at Nevin Plaza for a total of 783 units. Funding for the RHA budget is largely dependent on funding from U.S. Department of Housing and Urban Development (HUD), and thus subject to congressional appropriations. HUD continues the trend of inadequate funding for public housing authorities nationwide, and therefore, it is increasingly difficult for RHA to operate without a General Fund subsidy.
Original Approved RHA Budget – June 20, 2023
On June 20, 2023, the RHA Board of Commissioners and Richmond City Council approved the FY 2023-2024 budget of $5,563,388 in expenditures to manage the public housing program which includes personnel costs (5 Full Time Equivalents (FTEs)), funds to cover utilities, contracts for property maintenance and unit turn over activities at Nystrom Village, unpaid utilities, and office transition costs from Nevin Plaza, and operating subsidy pass through for Richmond Village. Estimated revenue of $4,302,306 million is comprised of operating subsidies from HUD, capital funds and tenant rents. An RHA subsidy from the City of Richmond General Fund in the amount of $1,261,082 was approved to provide sufficient revenue to match anticipated expenditures and balance the RHA budget to $5,563,388 in estimated revenues and $5,563,388 in expenditures.
Approved RHA FY 23-24 Budget
Revenues $ 4,302,306
Expenditures $ 5,563,388
Subsidy $ 1,261,082
Surplus/(Deficit) ($ 0)
FY 2023-2024 Amended Budget
The FY 2023-2024 mid-year revenue adjustments include a decrease of $105,669 mainly attributed to decreases in HUD operating subsidy revenue for Richmond Village.
The operating subsidy amounts are updated on a calendar year basis. The adjustments also include an increase of $156,776 mainly attributed to increases in HUD Operating subsidy to Nystrom and Nevin and increases in rent collection and payment agreements. The net total revenue adjustment considering the revenue decreases and increases is $51,107.
April 16, 2024
There is a decrease in FY 2023-2024 mid-year expenditures of $251,494 mainly attributed to the decrease in HUD operating subsidy for Richmond Village pass through and a decrease of one staff position for three months. There is an increase of expenditures of $302,601 mainly attributed to increases in cost pool and operating expenses at Nystrom Village related to unit rehabs. The net total expenditure adjustment considering the expenditure decreases and increases is $51,107.
RHA FY 23-24
Budget with
GF Subsidy
Revenue and
Expenditure
Adjustments
RHA FY 22-23
Budget Mid-Year
Adjustments
Revenues $5,563,388 Increase $51,107 $5,614,495
Expenditures $5,563,388 Increase $51,107 $5,614,495
GF Subsidy Increase $ 0
Amended RHA
FY 23-24 Budget
without increase in GF
Subsidy
$5,614,495
$5,614,495
The revenue and expenditure changes are listed below (Attachment 2):
Revenue Changes: $51,107
$156,776 Increase in Revenue:
o Increase for Nevin Plaza in HUD Operating Subsidy ($20,797) o Increases in Nystrom Village HUD Operating Subsidy ($7,938) o Rental Income ($27,868)
o Other Income such as payment agreements ($30,600)
o Operating Transfer in from Nevin Subsidy ($24,517)
o Operating Transfer in from Capital Fund ($1,656)
o Increase in Central Office Cost Center (COCC) ($43,400)
$105,669 Decrease in Revenue:
o Reduction in HUD Operating Subsidy pass through for Richmond Village:
Richmond Village I ($45,744.50), Richmond Village II ($15,787), and Richmond Village III ($44,137.50)
Expenditure Changes: $51,107
$251,494 Decrease in Expenditures
o Decreases in Salaries and Wages ($74,527) and Benefits ($71,298) o Reduction of one FTE
o Decrease of Richmond Village (RV) I, II, III, Operating Subsidy: (RVI $45,744.50) (RVII $15,787) (RVIII $44,137.50).
April 16, 2024
$ 302,601 Increase in Expenditures
o Increase in Central Office Cost Center (COCC) Salaries and Wages ($1,843) and Cost Pool ($44,873)
o Increase in Transfer Out for Nevin Plaza ($24,517)
o Increase in Nystrom Village Professional and Admin ($110,000) o Increases in Other Operating ($66,000), Equipment and Contract Services ($23,800), and Cost Pool ($31,568)
FY 2023-2024 Mid-Year RHA and COR Accomplishments
RHA’s main goals and objectives for FY 2023-2024, in addition to the management of the public housing program, includes moving forward on asset repositioning activities outlined in the 2019 Public Housing Authority Recovery and Sustainability (PHARS) agreement between the HUD, City of Richmond, and RHA. RHA, in collaboration with City of Richmond staff, continues to make progress in improving its operations and addressing outstanding tasks outlined in the PHARS.
RHA’s accomplishments at Nevin Plaza include the start of the rehabilitation construction. Nevin Plaza rehabilitation kickoff celebration and construction commenced (138 affordable housing units for seniors). Construction of Phase 1 commenced March 2023 and was completed November 2023 (27 units). Construction of Phase 2 commenced November 2023 (54 units). The Nevin Plaza development team applied for additional Community Development Block Grant funds for Nevin Plaza and $700,000 was awarded. Community meetings and activities reconvened at the end of March 2024.
The Nystrom Village Exclusive Rights to Negotiate Agreement (ERNA) expired with the preferred developer at the end of November 2023. Additional discussions occurred with the preferred developer in December 2023; however, a mutually agreed upon development agreement was not agreed upon and negotiations ceased. A new Request for Proposals (RFP) for the Nystrom Village redevelopment is set to be released in late April 2024. There are still many challenges at Nystrom Village. There is still a high vacancy rate due to units being in disrepair. RHA and City staff have worked collaboratively to conduct multiple cleanup activities at the site. Fortunately, illegal dumping has decreased. RHA staff have entered occupied units which have generated work orders to make additional improvements.
The Hacienda Heights affordable housing site (150 units) that was renovated continues to be fully occupied. In January 2024, a financial accomplishment occurred when the permanent financing for the project closed. The construction loan was converted to a permanent financing loan at that time.
The Richmond Village affordable housing project commenced in March 2024 with community engagement activities to begin the process of submitting a Section 18 disposition application to HUD. Once the application is approved, there will be a
April 16, 2024
conversion of public housing units to the Section 8 platform which will make the project more financially stable.
The Finance Department has made progress regarding financial matters. RHA and City Finance staff continue to work with the auditors, Maze & Associates, to complete audits, in addition to working with NBS Consultants to complete a Cost Allocation plan in accordance with HUD requirements set forth in the Title 2 CFR, Part 200 Compliant Version. The Cost Allocation Plan for FY2024-2025 is currently in progress with data being requested from various departments for the consultants to analyze and provide a draft.
Financial Updates:
2018 Audit – Financial Reports are completed and issued. 2019 Audit – Final draft of the Financial Reports have been provided and are being reviewed by RHA and City staff.
2022 Capital Fund Grant is in progress along with updating the 5-Year Action Plan and required HUD forms. Upon submission and approval by HUD, funds can be obligated and drawn.
RHA Draft FY2024-25 Budget has been prepared and is pending review.
Next Steps
A considerable amount of City resources has been allocated to assist RHA in meeting obligations to program participants and HUD, impacting other City operations. RHA and City staff members have worked to significantly reduce the RHA budget deficit for FY 2023-2024 from previous fiscal years and will continue to oversee and monitor RHA’s budget to maintain financial integrity and the health and safety of RHA’s residents.
DOCUMENTS ATTACHED:
Attachment 1 - Resolution
Attachment 2 - Amended Budget
Attachment 3 - Position Control