June 18, 2024
Richmond Housing Authority (RHA)
& City of Richmond
Economic Development
DATE: June 18, 2024
TO: Housing Authority Board of Commissioners and
Members of the City Council
FROM: Shasa Curl, City Manager
Nickie Mastay, Deputy City Manager
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Nannette Beacham, Economic Development Director
Gabino Arredondo, RHA Interim Executive Director
Rita Martinez, Senior Accountant
Subject:
Proposed Richmond Housing Authority Budget for Fiscal
Year (FY) 2024-2025
FINANCIAL IMPACT: This action approves the Richmond Housing Authority (RHA) proposed FY 2024-2025 operating budget, with
estimated revenues of $4,319,879, and total proposed
expenditures of $4,671,805.57. If the proposed General
Fund subsidy of $351,926.57 is approved by the City of
Richmond, it will balance the RHA FY 2024-2025 budget
to $4,671,805.57 in estimated revenues and
$4,671,805.57 in expenditures.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
Staff is requesting that the RHA Board of Commissioners and members of the City Council review and approve the
RHA FY 2024-2025 proposed operating budget.
JOINT MEETING
AGENDA REPORT
June 18, 2024
RECOMMENDED ACTION:
ADOPT a joint resolution approving the proposed Fiscal
Year (FY) 2024-2025 Richmond Housing Authority (RHA)
budget, with total estimated revenues of $4,319,879 and total estimated expenditures of $4,671,805.57; and
APPROVE an RHA subsidy from the City of Richmond
General Fund in the amount of $351,926.57, which will
provide sufficient revenue to match anticipated
expenditures and balance the RHA budget to
$4,671,805.57 in estimated revenues and $4,671,805.57
in expenditures - Richmond Housing Authority/Finance
Department (Gabino Arredondo/Rita Martinez 510-621-
1300).
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 recently rehabilitated and occupied at Hacienda Heights, and 142 units currently being renovated by EAH Housing (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.
RHA is proposing $4,671,805.57 in expenditures during FY 2024-2025 to manage the public housing program. These expenditures include personnel costs (currently at 5.0 Full Time Equivalents (FTE)), funds to cover utilities, contracts for property maintenance and unit turn-over activities at Nystrom Village, professional services for asset repositioning, and addressing outstanding financial liabilities such as completing financial audits, and an operating subsidy pass through for Richmond Village. Estimated revenue of $4,319,879 is comprised of operating subsidies from HUD, capital funds, and tenant rents. FY 2024-2025 Budget Staff recommends that the RHA Board of Commissioners and City Council adopt a resolution approving RHA's FY 2024-2025 operating budget in the amount of $4,319,879 in revenues and $4,671,805.57 in expenditures, with a proposed City of Richmond subsidy amount of $351,926.57. The most significant revenue and expenditure changes are listed below:
June 18, 2024
Revenue - $4,319,879
HUD Operating Subsidy - $1,473,586: The HUD operating subsidy includes $1,083,925 for Nevin and Nystrom, and $389,661 for the Richmond Village I, II, III pass through.
Capital Fund Subsidy - $1,463,024: The Capital Fund provided by HUD funds, annually, Public Housing Agencies (PHAs) for the development, financing, and improvements of public housing developments and for management improvements.
Tenant Rental Income - $277,868: Tenant rent compliance has increased from the previous years. There are units at Nystrom Village that have been repaired and units that are currently being rehabilitated with the goal of increasing tenancy and improving conditions. RHA will continue to focus on evaluating the units that can be brought back online and implementing improvements.
Operating Transfer In - $1,005,547: A percentage from the Capital Fund is allowed to be transferred for operations (25 percent) to the Asset Management Projects (AMPs) Nystrom and Central Office Cost Center (COCC) $512,058. Operating Subsidy for Nevin Plaza will continue to be available and will reduce over the years due to the repositioning of the Nevin Plaza AMP $493,489. Any remaining funds from the Nevin operating subsidy may be transferred to other RHA AMPs in need.
Hacienda Asset Repositioning - $83,804: RHA is now responsible for the maintenance of the split parcel at the Hacienda site. Funds for maintenance and upkeep are available from Hacienda asset repositioning funds.
Repayment Agreements and Other Revenue - $16,050: Repayment agreements are between residents and RHA to pay owed rent.
Expenditures: $4,671,805.57
Personnel - $911,514.57 (Salaries & Wages - $557,028.40 and Fringe Benefits $354,486.17): The current budget includes 5.0 FTEs (Attachment 3).
Operating Expenses - $416,550: Capital Fund - $30,000 Tenant Relocation, $150,000 Building Supplies; Hacienda - $5,000 Fencing; Nevin Plaza - $1,500 Mailing, Copying, Housing Commission; Nystrom Village - $2,000 Postage, $1,000 Printing and Copying, $10,800 Rent Program Fees, $23,000 Truck Rental, Copy Machine Rental, $3,500 Miscellaneous, $3,500 Housing Commission, $20,000 Tenant Relocation, $2,000 Tenant Recreation, $8,000 Office Supplies, $1,250 Cloths, $85,000 Small Tools, $70,000 Building Maintenance Supplies.
June 18, 2024
Professional & Administrative Services - $697,076: Capital Fund - $155,216 Unit Turnover, $10,000 Appraisals $69,750 Building Needs Assessment $54,000 Asset Repositioning Financial Consulting; Nevin - $35,000 Legal Services Lease Enforcement, $12,000 Financial Audits; $50 Bank Fees; Nystrom - $45,000 Mold Testing and Remediation, Credit Reporting, Document Services, $100,000 Legal Services Lease Enforcement, $16,000 Computer Hardware and Software, $160,000 Temporary Staffing Unit Turn-over and Work Orders, $12,000 Financial Audits, $10,000 Training, $1,800 Memberships, $60 Bank Fees, $15,000 Storage, $1,200 Fees and Permits.
Equipment & Contractual Services - $712,600: Capital Fund - $345,000 Unit Turn- over Supplies, Appliances, Equipment, Temporary Staffing; Nystrom - $1,500 Equipment Services, $1,000 Vehicle Maintenance, $9,600 HVAC, $134,000 Grounds, $112,500 Vacant Property Solutions, $4,000 Electrical, $10,000 Pet Control, $50,000 Plumbing; Hacienda Lot –$45,000 Landscaping, Tree Maintenace, Lighting Repair.
Grant Expenditures - $436,661: Expenditures for Administrative and Auditing Services from the Capital Fund $47,000 and the Richmond Village Passthrough Payments for $389,661.
Property Insurance - $52,160.
Utilities - $226,500: Utilities costs include expenditures for telephone, electricity, water, sewer, gas, and refuse services.
Cost Pool - $123,197: Per the HUD approved Title 2 Code of Federal Regulations 200 (2 CFR Part 200) compliant Cost Allocation Plan (CAP).
Capital Outlay - $90,000: The main expenditure proposed includes unit turn-over and rehabilitation activities.
Operating Transfer Out - $1,005,547: A percentage from the Capital Fund is allowed to be transferred for operations (up to 25 percent) to AMP Nystrom and for administrative services (up to 10%) to the COCC $512,058. The Operating Subsidy for Nevin Plaza will continue to be available and will be reduced over the years due to the repositioning of the Nevin Plaza AMP $493,489. Any remaining funds from the Nevin operating subsidy may be transferred to other RHA AMPs in need.
FY 2023-2024 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)
June 18, 2024
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 was released on May 16, 2024. RHA staff continues to inform the local neighborhood council and Nystrom United Revitalization Effort (NURVE) initiative regarding redevelopment updates. In addition, RHA has begun the historical and environmental review for the redevelopment project.
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 clean-up 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. Two community meetings were held with residents to explain the change in subsidy for tenants (April 26, 2024, and May 8, 2024). Once the application is approved, there will be a conversion of public housing units to the Section 8 platform which will make the project more financially stable.
The Richmond Finance Department has made progress regarding RHA financial matters. RHA and City Finance staff continue to work with the auditors, Maze & Associates, to complete audits. Staff has begun to work with the City’s current auditors, Badawi & Associates, to carry on completing audits. In addition, the staff is 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
June 18, 2024
Allocation Plan for FY 2024-2025 is currently in progress with NBS reviewing the data requested to provide a draft report.
Financial Updates:
2017 Audit - Financial Reports are completed and issued. 2018 Audit - Financial Reports are completed and issued. 2019 Audit - Final drafts of the Financial Reports have been provided and are being reviewed by RHA and City staff.
o 2019 Basic Financial Statements – Completed and issued. Audited data has been entered into HUD system awaiting auditor’s review. o 2019 Memorandum on Internal Control (MOIC) Report and Required Communications Report – Draft has been reviewed and staff will respond with Management responses.
o 2019 Richmond Housing Corporation – Final Draft approved by City staff. o 2019 RHA RAD LLC – Final Draft approved by City staff. 2020 Audit - Data has been requested by Badawi & Associates. City staff is working on providing all data requests.
2022 Capital Fund Grant - Award has been approved and authorized by HUD, RHA has obligated 92% of grant.
2023 Capital Fund Grant – 5-Year Activity Plan (YAP) for 2023 – 2027 needs to be updated and submitted for HUD review and is in progress. RHA and City Staff began initial procurement training with HUD-provided technical assistance.
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 2024-2025 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 - FY 2024-2025 Budget
Attachment 3 - Staffing