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HomeMy WebLinkAboutResponse Budget Review Follow-Up 04-07-2020 www.kauai.gov 4444 Rice Street Suite 330 • Līhu‘e, Hawai‘i 96766 • (808) 241-4444 (b) • (808) 241-5118 (f) An Equal Opportunity Employer KAUA‘I COUNTY HOUSING AGENCY THE COUNTY OF KAUA‘I DEREK S. K. KAWAKAMI, MAYOR MICHAEL A. DAHILIG, MANAGING DIRECTOR ADAM P. ROVERSI HOUSING DIRECTOR MEMORANDUM TO: Honorable Arryl Kaneshiro, Council Chair FROM: Adam P. Roversi, Housing Agency Director VIA: Michael A. Dahilig, Managing Director DATE: April 9, 2020 RE: Fiscal Year 2020-2021 Budget Follow-Up Questions for April 7, 2020 This is memorandum is in response to the follow-up questions directed to the Housing Agency from April 7, 2020. Item # 1 The Human Resource Vacancy Report will address all vacancy & recruitment questions. Item # 2 Anticipated revision in the May 8th Supplemental. 1. Please explain the benefits and what the County can expect with the $5,000,000 in the Housing Revolving Fund? The Housing Agency operated for some time post-Iniki by leveraging some $40 million dollars in federal funding to develop affordable housing projects. With this funding now exhausted, we receive approximately $3 million in federal HOME and HTF funds for housing development on a three-year funding cycle. This level of funding is insufficient to timely and adequately address our housing crisis. Moreover, these funds may only be used to develop housing for individuals and families at or below 80% of average median income (AMI), with the vast bulk of this funding only available to assist those at 60% and below. These income restriction leave the Housing Agency unable to address gap housing for those unable to qualify for federal assistance, but also still priced out of our housing market. Direct County funding through the Housing Development Fund provides much needed funds that may be administered with significantly more flexibility and creativity then existing federal programs. The administration and recent County Council have had the vision to provide significant direct County funding. In both FY19 and FY20, $2.7 million was appropriated to the Housing Development Fund. This was a new and welcome trend in the collective effort to address our housing crisis. A summary of major projects funded by the Devt. Fund and planned future projects can be found in response to Questions 16 and 18. 2 In addition to these major projects, the Housing Revolving Fund provides the necessary funds to conduct basic due diligence of potential projects, such as environmental reviews appraisals. 2. Please confirm that you have four (4) current vacancies (Position Numbers 9565, 9662, 9663, and 9664. Response: See item #1. a. Please describe (in more than a few words) the current recruitment effort, if any, for each. For example, please explain in further detail any Recruitment Status description already provided by HR in the Vacancy Report of March 15, 2020, such as “Recent Vacancy” or “Recruiting” or “Funding in 2021.” In your explanation, please include when recruitment started (or will start), the current stage of recruitment, and the earliest hire date and/or start date expected. Response: See item #1. b. Please also confirm that there are no other vacancies. If you have any other vacancies or anticipated vacancies, please describe (in more than a few words) the planned recruitment effort for each, including the date you intend to initiate recruitment, how long you anticipate recruitment taking, and the earliest hire date and/or start date expected. Response: See item #1. 3. Why is Position Number 9565, “SENIOR CLERK,” (page 245) funded by the General Fund? In the past it was fully funded by another source and the vacancy report says “Funding in 2021.” For the last several years this position in the Section 8 division has been $1 funded via GF. We need to fill this position to ensure that the Section 8 Division has the administrative capacity to take full advantage of approximately $1.5 million in additional Section 8 program funding that recently became available specifically for the County of Kaua‘i. Although there is not currently sufficient Section 8 Administrative funding available to fund this position, if we are able to successfully utilize the additional $1.5 million in available program funding, we expect the available administrative funds, which are allocated as a % of program funding, will increase in FY22 to fund this position. Accordingly we expect that this position would require GF contribution only in FY21. 3 4. Your budget proposes the creation of a new dollar ($1)-funded position, “HSG ASSISTANCE SPECIALIST III” (page 245). Please describe how you intend to use this position, when you intend to fill it, and where you will find the funding when that time comes. Response: See item #2. 5. Please confirm that the Section 8 Voucher program is the “Other Source” that partially funds Position Numbers 9547 (at 10%), 9548 (90%), and 9662 (50%); describe its reliability for FY 2021 and beyond; explain whether there could be a future need for additional General Fund moneys to cover any portion of these positions, and explain whether each of these three (3) positions that are partially funded by Section 8 Voucher could be fully funded instead. If not, why not? Yes, Section 8 Administrative Funds are the Other Source of funds for these positions. Section 8 administrative funds are projected to increase in the next few years because we have received an increase in available program funds, and administrative funds are provide as a % of total program funds. Accordingly there should not be additional need for GF in the foreseeable future Generally, Section 8 administrative funds may be allocated to employees based on the amount of work they do on the Section 8 program. HUD audits our use of these funds. • 9547 – Head Accountant – (10%). Although there may be an opportunity to increase this % slightly as section 8 administrative funding increases, this position cannot be fully funded by Section 8 because all of the work does not relate to Section 8. • 9548 – Section 8 Manager (90%) – This position could be fully funded by Section 8 funds. • 9662 – Homeless Coordinator (50%)– This position cannot be fully funded by Section 8 because all of the work does not relate to Section 8. 6. Please confirm that the Section 8 Voucher program is the “Other Source” that fully funds Position Numbers 9656, 9544, 9539, 9660, and 9657; describe its reliability for FY 2021 and beyond; and explain whether there could be a future need for General Fund moneys to cover any portion of these positions. Yes, Section 8 Administrative Funds are the Other Source of funds for these positions. Section 8 administrative funds are projected to increase in the next few years because we have received an increase in available program funds, and administrative funds are provide as a % of total program funds. Accordingly there should not be additional need for GF in the foreseeable future. 7. Please confirm that the Section 8 Voucher program and the HOME Investment Partnerships Program (HOME) is the “Other Source” that fully funds Position Numbers 9654, 9553, and 9545; 4 describe its reliability for FY 2021 and beyond; and explain whether there could be a future need for General Fund moneys to cover any portion of these positions. Yes, Section 8 Administrative Funds and HOME funds are the Other Source of funds for these positions. Section 8 administrative funds are projected to increase in the next few years because we have received an increase in available program funds, and administrative funds are provide as a % of total program funds. HOME funds are expected to remain flat. Accordingly there should not be additional need for GF in the foreseeable future. 8. Please confirm that the Community Development Block Grant (CDBG) is the “Other Source” that fully funds Position Number 9664; describe its reliability for FY 2021 and beyond; and explain whether there could be a future need for General Fund moneys to cover any portion of this position. Yes. CDBG grant funding appears to be relatively stable and we have no expectation that it will decline in the near term. We have no expectation that GF will be required to support this position. 9. Please confirm that the Community Development Block Grant – Disaster Recovery (CDBG-DR) is the “Other Source” that fully funds Position Number 9552; describe its reliability for FY 2021 and beyond; and explain whether there could be a future need for General Fund moneys to cover any portion of this position. Yes. CDBG-DR grant funding is defined over the 6-year life of the grant. We have no expectation that GF will be required to support this position. 10. Please provide any instances where Section 8 Voucher, HOME, CDBG, or CDBG-DR funds could be used to pay for any portion of positions currently paid with General Funds. For each fund, if not, why not? Federal program administrative funds may only be allocated to an employee based on the % of work an employee performs directly related to that specific program. HUD monitors these administrative expenses and requires Employees maintain separate time cards for program time and “other” time. Accordingly, we cannot shift salary burden to these programs without good cause and direct evidence of actual program work. We have already endeavored to maximize the use of federal grant funds for salaries and minimize the use of the GF. 11. Under “SPECIAL PROJECTS” ($12,000) (page 246), please provide a breakdown of the expenditures for “HALE KOKUA – ANNUAL DRUG SUMMIT” ($10,000) including a justification for what seems like a high cost. How many participants are expected? How much will be spent on out-of-town presenters or guests? How much will be spent on refreshments? Do you need to pay for space or are you utilizing County space for free? The County of Kaua‘i’s Drug Summit entitled “Ei Ho’o mau Ka ‘Ike”(continue the awareness, learning, vision) serves as a venue for two-way communication with multiple 5 sectors of the community. It provides information to participants on the plans and the activities undertaken by various committees and community organizations. There will also be guest speakers that present topics on latest drug trends, trauma informed care, and Adverse Childhood Experiences (ACEs). Continuing Educational Units (CEU’s) will be given to the prevention and treatment professionals. Attendance of 250 is expected based on past years. Annual Drug Summit (Breakdown) Morning Refreshments $300.00 Buffet Lunch $8,000.00 Equipment $350.00 Keynote Speaker $800.00 Lei (Dignitaries, Speakers, Volunteer Awardees, etc) $150.00 Volunteer Awards $300.00 Supplies (Name Tags, Programs, Easel Paper, Agenda, etc) $100.00 TOTAL $10,000.00 12. Under “GRANT IN AID” ($10,000) (page 246), please provide a breakdown of the expenditures for “HALE KOKUA – COMMUNITY GRANTS” ($10,000). How many different grants will be awarded and in what amounts? Please also provide a list of expenditures (different grants) for FY 2020 ($10,000). For “Grant in Aid” Hale Kokua-Community Grants ($10,000), we usually award $2500.00 or less to about five (5) agencies. This line item was already reduced by $30,000 a few years ago. Grant in Aid Reports are submitted to Council on an annual basis. FY2020 Grant Summary is below. Note, two grant awards are under review for the remaining funds: 1 Kauai Mental Health Advocates-Na Lei Wili AHEC A Healing Mental Health Art Show $2,500.00 2 Hale Kipa, Inc School Attendance Support Services $1,755.00 3 Hawaii Children's Theatre Pono Players-Message Theatre Program $1,500.00 4 Life's Bridges Hawaii KLAS Kauai Leaders Against Suicide $2,000.00 $7755.00 13. Under “R&M BUILDING” ($20,000) (page 246), thank you for the breakdown of expenditures for “WAIMEA THEATER” ($20,000). How long has the County been funding this? What is the justification for County funding, as this is not a County facility? Would not this expense be more appropriately placed in the Office of Economic Development? Why is it not placed there? 6 The Waimea Theater is owned by the County and leased to the West Kaua‘i Business and Professional Association (WKBPA) to operate as a theater and community resource center. Although the current lease contemplates that WKBPA shall maintain the building, theater operations have never generated enough income to properly maintain the facility. Accordingly, the County has regularly stepped in to fund maintenance and capital improvements. E.g. in FY19 the County spent $130,000 on a new AC system. In 2020 we expect to need to fund roof repairs. It is my understanding that the theater is booked as an asset under Housing because the initial funds to purchase and rehabilitate the theater came from post-Iniki monies that were being administered by the Housing Agency. In the future the Housing Agecny would support shifting th management of this asset to OED. 14. Under “OTHER SERVICES” ($69,000 to $68,500) (page 246), please explain what “DURF LOAN SERVICING FEE” ($65,000) is and what measurable benefit the County receives. This item relates to interest payments on the $18 million Dwelling Unit Revolving Fund loan from the Hawaii Housing Finance Development Corporation provided for Phase I infrastructure work at Lima Ola. This work is expected to commence in August/September of 2020. 15. Regarding Life’s Choices, please describe “Anticipated Admin-Annual Grant” ($110,000) (page 383). Is this new funding? Is it coming from a grant outside the County? Please provide more detailed information. Life’s Choices has received this annual Strategic Prevention Framework Partnerships for Success (SPF-PFS) grant from the State of Hawaii, Department of Health, Alcohol and Drug Division (ADAD) every year since 2016. The 2019-2020 Grant runs through September 30, 2020. There is an expectation that similar funding will be received again in 2020-2021. 16. Regarding “SPECIAL PROJECTS” ($485,000 to $645,000) (page 340), please describe and provide more detail on “KILAUEA: ALA MUKU PLACE FEASIBILITY STUDY” ($175,000) and “PUHI: KAHUA HO‘OULU FEASIBILITY & PRE-DEVELOPMENT” ($350,000). Please include the number of anticipated units with a breakdown by income ranges for each. ALA MUKU PL. is a cooperative project between the Housing Agency and the Hawaii Public Housing Authority on a 2-acre parcel in Kilauea. This relatively low density development is tentatively anticipated to contain between 20-30 workforce housing units built as duplexes. The exact target income group for these homes will ultimately be dependent on funding sources KAHUA HO‘OULU is a proposed project in Puhi on a 2+ acre parcel. It is similar in scale to the Pua Loke Street Affordable Housing project currently in development, which contains 53, 2 and 3 bedroom units. For the Puhi project, however, we intend to increase the total unit count closer to 70 by building smaller 1 and 2 bedroom units. The intention is to serve a range of income levels from 60-120% AMI. 7 17. Please describe and provide more detail on the Homebuyer Loan Program, including the number of people served in the past and the expected increase in numbers to be served in the future with the increased funding. Our Homebuyer Loan Program is a small part of a $9.8 million loan portfolio consisting of 72 separate outstanding loans. We currently have 5 outstanding Homebuyer loans totaling $530,906. Traditionally this program has been used to assist buyers who cannot otherwise qualify for private financing in acquiring County issued long-term leaseholds through our Home Buyer program. In 2019, we issued no loans because the program had insufficient funds ($100,000) to underwrite any home purchase. The increased request in FY21 would enable the County to issue one or two new loans, or a larger number of secondary loans to support our Homebuyer program. 18. Regarding “SPECIAL PROJECTS” ($4,200,000 to $5,000,000) (page 360), please provide a summary breakdown of anticipated expenditures for FY 2021 and past expenditures for FY 2020 ($4,200,000), FY 2019 ($2,616,491), and FY 2018 ($308,587). Past year expenditures are shown in the chart below. In FY21, the primary use of the funds is anticipated to be earmarked to the Ala Muku Place and/or Puhi projects discussed in Question #16.