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HomeMy WebLinkAboutItem 10 - AA for Housing Choice Voucher Program and Mainstream Voucher ProgramCommunity Development Agency www.santa-ana.org/community-development Item # 10 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report June 4, 2024 TOPIC: Appropriation Adjustments for Housing Choice Voucher Program and Mainstream Voucher Program AGENDA TITLE Appropriation Adjustments to Recognize $4,495,000 in Housing Assistance Payment Funds for the Housing Choice Voucher Program and $325,000 in Housing Assistance Payment Funds for the Mainstream Voucher Program (Non -General Fund) RECOMMENDED ACTION 1. Approve an appropriation adjustment recognizing housing assistance payment funds in the amount of $4,495,000 in revenue account (no.13618002-52000) for the Housing Choice Voucher Program and appropriating the same amount to expenditure account (no.13618760-various). (Requires five affirmative votes) 2. Approve an appropriation adjustment recognizing housing assistance payments funds in the amount of $325,000 in revenue account (no.13818002-52000) for the Mainstream Voucher Program and appropriating the same amount to expenditure account (no.13818760-69158). (Requires five affirmative votes) GOVERNMENT CODE §84308 APPLIES: No DISCUSSION On March 30, 2023, the Santa Ana Housing Authority (SAHA) received an allocation of $45,630,128 in Housing Choice Voucher (HCV) Program Housing Assistance Payments (HAP) funds from the U.S. Department of Housing and Urban Development (HUD) for Calendar Year (CY) 2023 (Exhibit 1). The HCV program provides housing assistance to extremely low-income individuals and families including homeless veterans, persons with a disability, and young adults exiting the foster care system. With HCV HAP funding provided by HUD, SAHA provides housing assistance to over 2,800 households. On March 30, 2023, SAHA also received an allocation of $2,446,934 in Mainstream (MS5) Voucher Program HAP funds from HUD for CY 2023 (Exhibit 2). The MS5 program is a special purpose voucher program similar to the HCV program, but with a separate funding source that must be administered separately. The MS5 program provides housing assistance to non -elderly, low-income families and individuals Appropriation Adjustments for Housing Choice and Mainstream Voucher Programs June 4, 2024 Page 2 experiencing homelessness with a disabled household member. With funding provided by HUD for the MS5 programs, SAHA provides housing assistance to over 150 households. Due to the rising costs of rent and housing assistance payments per family, the budgeted amount for FY 2023-24 was insufficient to cover payments through the end of the fiscal year. To ensure continued support for these families, staff is requesting approval of an appropriation adjustment of $4,495,000 in HAP funds for the HCV Program and $325,000 in HAP funds for the MS5 Program to pay for housing assistance through the end of FY 2023-24. This appropriation adjustment is not new or additional funding for the HCV or MS5 Programs, but rather a recognition of funds that HUD holds in a reserve account until SAHA is ready to draw down these funds for these vouchers. FISCAL IMPACT Approval of these two appropriation adjustments will recognize $4,495,000 in Housing Assistance Payment HCV revenue account (no. 13618002-52000 Federal Grant -Direct) and $325,000 in Housing Assistance Payment MS5 revenue account (no. 13818002- 52000 Federal Grant -Direct) and appropriate to the expenditure accounts below. Fiscal Year Accounting Fund Description Accounting Unit, Amount Unit -Account Account Description FY 2023-24 13618760-various Housing Authority- Housing Authority $4,495,000 Voucher HAP Voucher HAP, various FY 2023-24 13818760-69158 Housing Authority- Housing Authority -MS $325,000 MS 5 5, Housing Assist Pmt. Total Expenditures $4,820,000 Any remaining balances not expended at the end of the fiscal year will be presented to the City Council for approval of carryover to FY 2024-25. EXHIBIT(S) 1. Housing Choice Voucher Program Calendar Year 2023 Renewal Funding Allocation 2. Mainstream Vouchers Calendar Year 2023 Renewal Funding Allocation Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Alvaro Nunez, Acting City Manager EXHIBIT 1 U.S. DEPARTMENT OF HOtiSING AND URBAN DEVELOPMENT WASHNGTON. DC 20410-5000 �FI,I JI YF. �C OFFICE OF PUBLIC k\D I\'DLa\ HOUSING March 30, 2023 Dear Executive Director: Subject: Housing Choice Voucher Program Calendar Year (CY) 2023 Renewal Funding_ Allocation The purpose of this letter is to advise public housing agencies (PHAs) of the CY 2023 Housing Assistance Payments (HAP) renewal funding allocations for the Housing Choice Voucher Program (HCVP). The funding allocations described herein are based on the requirements of the Consolidated Appropriations Act, 2023, (P.L. 117-328) referred to hereafter as "the 2023 Act," enacted on December 29, 2022. HUD is in the process of publishing the 2023 HCV Funding Implementation Notice and will notify PHAs by email when that occurs. The Notice will be posted at the following link: littp://poilal.hud.90V/hudpoilal/HUD?src=/program offices/administration/hudclips/notices/hih Your agency's CY 2023 HAP renewal funding is identified at the top of the Enclosure A provided with this letter. Enclosure A sets forth the funding calculations for your PHA and provides estimated RAD 1 funding for the first full year of conversion and CY budget authority associated with tenant protection actions; the calculations are fully explained in the descriptions provided for this enclosure, and you are encouraged to review them thoroughly. Also included are Appendix I and II. Appendix I provides calculations related to the CY 2023 offset for reallocation. Appendix II provides a list of funding increments for which the PHA is receiving an additional inflation factor in CY 2023 to support increased costs since the increments were initially funded. If your agency is administering HUD Veterans Affairs Supported Housing (VASH) vouchers, the renewal of these vouchers is included in the overall renewal calculations. These vouchers are not renewed separately, other than for Moving to Work (MTW) agencies. PHAs must comply, however, with the statutory requirement that VASH vouchers may only be used to assist VASH-eligible participants, both initially and upon turnover. The 2023 Act requires the Department to establish a new baseline for HAP funding eligibility, based on Voucher Management System (VMS) data for CY 2022 (January 1, 2022, through December 31, 2022). This practice is commonly referred to as re-benchmarking. Consistent with prior years, the Department provided PHAs with the opportunity to review and update all VMS data related to the funding calculations as detailed in this letter and the enclosure. The VMS data used is the data reported by each PHA and accepted in VMS as of the end of the data review period on January 27, 2023, the same date as the December 2022 data submission deadline. There will be no further appeals or adjustments to these data items, except at the direction of the Department. The 2023 Act provides that HUD may offset PHAs' CY 2023 allocations based on the excess amounts of PHAs' Restricted Net Position (RNP), including HUD -held program reserves (in accordance with VMS data in CY 2023 that is verifiable and complete), as determined by the Secretary. The Department has decided to exercise the offset for reallocation authority in CY 2023 (impacting a limited number of PHAs) but only to increase the national HAP proration to 100%. A www.hud.gov espanol.hud.gov EXHIBIT 1 portion of the offset will be for Shortfall Prevention, which will supplement the HAP Set -Aside funding. For the months of January through May of 2023, your agency received HAP obligations based on an estimated CY 2023 renewal level. If your PHA has been under -obligated renewal funds through May 2023, based on the prorated funding eligibility indicated on Enclosure A (applicable only to non-MTW PHAs, MTW PHAs will receive a different eligibility enclosure), the additional amount due will be obligated in the immediate future. If your PHA has been over -obligated funds through May 2023, the June obligation will be reduced accordingly, so that your PHA is obligated the accurate amount f6r the year. HAP disbursements for January through May of 2023, and for the rest of the CY 2023, have and will be based on cash management procedures established in PIH Notice 2017-06. Except f'or MTW PHAs, no HAP funds provided for a PHA under the 2023 Act may be used to incur in over leasing, to support prior year deficits or provide for administrative expenses, nor may they be loaned or transferred to cover other program obligations, such as Low -Rent and/or Capital Fund programs. Therefore, it is each PHA's responsibility to retain the appropriate records to support VMS submissions for the collected periods, as they are subject to on -site review by the Quality Assurance Division (QAD). Subsequent recalculation of CY 2023 funding eligibility will occur if a QAD or other HUD review demonstrates that costs were incorrectly reported, resulting in excess funding. Finally, it is strongly recommended that PHAs utilize the Two -Year Forecasting tool on the HUD web site, in consultation with their local HUD field office, to ensure that correct variables for the PHA are entered into the tool to arrive at the most accurate forecast to enable the PHA to maximize leasing while avoiding the need to terminate assistance to any households. The tool and instructions can be found by clicking on the following link: Two -Year Tool and Instructions. Additionally, HAP Set -Aside funds are available in CY 2023 to address shortfalls, but in order to qualify, a PHA must have the shortfall confirmed by the Shortfall Prevention Team (SPT) and must initiate cost reduction steps. This process is detailed in the implementation notice referenced at the start of this letter. If you have any questions concerning your CY 2023 HAP renewal funding, please contact your Financial Analyst (FA) at the Financial Management Center (FMC). Sincerely, Digitally signed by MIGUEL MIGUEL FONTANEZ FONTANEZSANCHEZ SANCHEZ Date: 2023.03.3011:41:38 -04'00' Miguel A. Fontanez Director Housing Voucher Financial Management Division Attachment EXHIBIT 1 Enclosure A Calculation of Calendar Year 2023 Renewal Funding Housing Choice Voucher Program 1 HA Number: 2 HA Name: CY 2023 Renewal Funding 3 CY 2023 HCV Renewal Funding after Offset and Amounts Owed HUD CY 2023 Non -Renewal Funding 4 CY 2023 Non -Renewal Funding (TPVs, VASH, etc.) to Date 5 CY 2023 Estimated RAD 1 Funding For First Full Year After Conversion 6 CY 2022 Proration Increase 7 Total CY 2023 HCV Renewal and Non -Renewal Funding ELIGIBILITY 8 Total Unit Months Leased per VMS - CY 2022 9 Total Unit Months Available - CY 2022 10 Capping Percentage 11 Total CY 2022 HAP Expenses per VMS 12 Total CY 2022 Capped HAP Expenses (Line 11 x Line 10) 13 Renewal Funding Inflation Factor 14 Inflated Eligibility Sub -Total (Line 12 x Line 13) 15 First Time Renewals - Appendix II 16 Transfers In or Out 17 Total DHAP Eligibility 18 Total Renewal Eligibility (Line 14+ Line 15 + Line 16 + Line 17) 19 Proration Factor 20 Prorated Eligibility (Line 18 x Line 19) CA093 CITY OF SANTA ANA HSG AUTH $45,630,128 $767,778 $0 $189,021 32,972 36,489 100 $42,392,321 $42,392,321 1.07505 $45, 573, 865 $56,263 $0 $0 $45,630,128 FUNDING 21 Total CY 2023 Renewal Funding after Offset 22 Renewal Funding Obligations, January through May 2023 23 Remaining to Obligate for CY 2023 prior to reduction for funds due HUD (Line 21 - Line 22) 24 Reduction for Funds due HUD 25 Remaining to Obligate for CY 2023 after reduction for funds due HUD (Line 23 - Line 24) 26 Total Eligibility Through May 2023 27 Additional Obligations Due Through May, 2023 (Line 26 - Line 22, if Line 26 is higher; else 0) 28 Excess Obligations Through May, 2023 (Line 22 - Line 26, if Line 22 is higher; else 0) 29 CY 2023 Inflated Per Unit Cost This value is calculated as total inflated VMS Expenses, minus HAP Costs After the First of the Month, divided by total Unit Months Leased. 30 Comments $46,586,927 100 $45,630,128 $45,630,128 $20,158,105 $25,472,023 $0 $25,472,023 $19,012,553 $0 $1,145,552 $1,368.15 EXHIBIT 2 q�Q�TMEurp�yOc U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT IIWAKIINGTON, DC 20410-5000 �BqN DEYF�D�� OFFICF OF PUBLIC AND INDIAN HOUSING March 30, 2023 Dear Executive Director: Subject: Mainstream Vouchers- Calendar Year (CY) 2023 Renewal Funding Allocation The purpose of this letter is to advise your agency of the CY 2023 renewal funding allocation for the Mainstream Vouchers, The 2023 Act's appropriated amount for the Mainstream Vouchers should fully support the HAP renewal eligibility at 100%. The 2023 Mainstream Vouchers renewal eligibility calculation for your agency is provided in Enclosure A to this letter. To calculate your agency's Mainstream Vouchers renewal funding eligibility for CY 2023, the Department established a new baseline based on the costs and leasing reported in the Voucher Management System (VMS) for the Mainstream Vouchers for CY 2022 (January 1, 2022, through December 31, 2022), adjusted for first-time renewal funding for new 2022 Mainstream Vouchers increments, and the 2023 renewal funding inflation factor. This practice is commonly referred to as re-benchmarking. The VMS data used is the data reported by each PHA for the Mainstream Vouchers and accepted in VMS by January 27, 2023. Further, PHAs must retain the appropriate records to support VMS submissions for the collected periods, as they are subject to on -site and remote reviews by HUD and auditors. VMS cost and leasing data is subject to review by our Quality Assurance Division (QAD), and subsequent recalculation of CY 2023 Mainstream Vouchers renewal funding eligibility will occur if a QAD review demonstrates that costs were incorrectly reported, resulting in excess funding. Additionally, HUD continues to disburse HAP based on current cash management procedures. The Department is required to control disbursement of fiends to PHAs in such a way as to ensure that PHAs do not receive federal funds before they are needed, as described in PIH Notice 2017-06 - Cash Management Requirements for the Housing Choice Voucher Program. To ensure compliance with cash management requirements, PIH continues to determine HAP disbursements based on the PHA's latest validated HAP expenses for Mainstream Vouchers as reported in VMS and will reconcile based on actual CY 2023 validated HAP expenses, in accordance with PIH Notice 2017-06 (or successor). In the event that the PHA's calculated monthly disbursement(s) is short to meet the monthly HAP need, the PHA should contact their Financial Analyst at the Financial Management Center for a funding adjustment. Note that PHAs administering Mainstream Vouchers cannot engage in over -leasing (leasing above the total authorized units), consistent with the Housing Choice Voucher Program. Calculations are not included herein for CY 2023 administrative fees (admin fees). Admin fees will continue to be paid for the Mainstream Vouchers solely based on leasing as of www.hud.gov espanol.hud.gov EXHIBIT 2 the first of each month and reported in VMS. Monthly fee advances are provided, based on estimated earnings, and are reconciled once actual leasing is reported. National eligibility for the quarter is compared to one -quarter of the appropriations available for Mainstream Vouchers administrative fees, and all PHAs' fee earnings are prorated at the same percentage of eligibility as in the HCV program. This proration is required by the Consolidated Appropriations Act, 2023 (the 2023 Act). Admin Fee rates for CY 2023 will be posted on the Department's web site to enable PHAs to estimate eligibility. An announcement will be made when they become available on HUD's website: https://www.hud.gov/program_offices/public_indian housing/programs/hcv. If you have any questions concerning your CY 2023 Mainstream Vouchers renewal funding, please contact your Financial Analyst at the Financial Management Center. Sincerely, MIGU EL Digitally signed by MIGUEL FONiANEZ FONTANEZSANCHEZ Date: 2023.04.0614:27:21 SANCHEZ 04'00' Miguel A. Fontanez Director, Housing Voucher Financial Management Division Enclosure EXHIBIT 2 SUMMARY - CY 2023 MAINSTREAM VOUCHERS RENEWAL FUNDING 1 HA Number CA093 2 HA Name CITY OF SANTA ANA HSG AUTH 3 Summary of Funding Eligibility 4 Total Mainstream Program HAP Expenses Reported in VMS for CY 2022 $ 2,276,112 5 Total UMLS Reported in VMS for CY 2022 1,491 6 Total UMAS 2,772 A. If Overleased, Number Of Umis Deducted From Eligiblity $ B. Uninflated PUC $1,526.57 C. Cost Of Overleased Units (PUC X Overleased Units) $ 7 Mainstream Program Renewal Eligibility After Reduction For Cost Of Overleased Units $ 2,276,112 8 Inflation Factor 1.07505 9 CY 2022 Renewal Funding At 100% $ 2,446,934 CY Renewal Funding difference is due to rounding 10 Renewal Funding Inflator Adjustment For New Increments 11 Total Mainstream Program Renewal Funding For CY 2023 $ 2,446,934 12 CY 2023 Inflated PUC $1,641.14 FUNDING SUMMARY 13 CY 2023 Renewal Funding Prior to Amounts Due to HUD 14 Reduction for Amounts due to HUD 15 Total CY 2023 Renewals 16 Obligated Funds through April 17 To be obligated May through December $ 2,446,934 $ - $ 2,446,934 $ 818,044 $ 1,628,890