FY2018 BUDGET IN BRIEF
TABLE OF CONTENTS •
PURPOSE OF BUDGET IN BRIEF
1
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GOAL AND VALUES
2
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MESSAGE FROM CHIEF EXECUTIVE DIRECTOR
3
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INTRODUCTION 5
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BOARD OF COMMISSIONERS
6
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OPERATING BUDGET HIGHLIGHTS
7
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RESOURCES AND EXPENDITURES
8
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HOUSING PROGRAMS
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DEVELOPMENT PROGRAMS 11
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OTHER PROGRAMS 13
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CENTRAL OFFICE COST CENTER (COCC)
9
15
The intent of this document is to provide information about Norfolk Redevelopment and Housing Authority’s (NRHA’s) spending intentions, and the wider fiscal and economic picture.
PURPOSE OF BUDGET IN BRIEF The Authority must submit a proposed budget to the Board of Commissioners for their approval. The Budget In Brief is a tool which provides the reader a synopsis of the detailed spending plan of the Authority. Proposed Fiscal Year (FY2018) Consolidated Annual Operating and Capital Budget reaffirms NRHA’s: • •
Fiscal responsibility with limited resources while providing quality housing services, and Ensuring affordable housing and the promotion of housing choice opportunities for the citizens of Norfolk.
A fiscal year differs from calendar year by encompassing the 12-month period during which the annual operating budget applies (in this case, beginning July 1, 2017, and ending June 30, 2018).
Online The proposed budget is available on NRHA’s website at the following URL: http://www.nrha.us/nrha/aboutnrha/budget
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Budget in Brief | 2
Message from the
EXECUTIVE DIRECTOR
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in the City of Norfolk and at NRHA. From our move to new offices to newly-elected leadership at the Mayor’s office and City Council, we are embracing these changes with a renewed sense of enthusiasm and energy. his has been a year of change
Through efforts to improve our existing housing communities and to transform obsolete housing in Norfolk to sustainable communities where families can grow and thrive, NRHA is rededicating its focus to providing quality housing choices to all Norfolk households and Families. We have dubbed this Families First emphasis as “Home Forward,” based on the premise that all successful achievements in life, whether they come in the areas of education, employment, recreation or personal fulfillment, stem from the enjoyment of a stable and safe housing environment. NRHA is embarking on this new Home Forward initiative at a time when one can easily grow disheartened by the polarization of political discourse at the national level. We count ourselves fortunate in the City of Norfolk to enjoy a collaborative and tolerant leadership environment that celebrates diversity and community engagement. Rather than shunning groups with differing beliefs or demonizing people in need, Norfolk recognizes the strength of community based policy discussions and the benefits that accrue to all by building capacity among our most disadvantaged citizens. It is this nurturing civic environment that allows us to tackle the significant financial and social challenges that we face in the effort to provide quality housing choices for all Norfolk families. 3 | www.nrha.us
The provision of quality housing choices requires the utilization of all of NRHA’s community revitalization tools ranging from new single and multi-family home development to renovations and improvements to existing housing units and open space amenities. The Authority’s single family residential development efforts are taking advantage of a healthy buyer market with new construction planned or underway in Ocean View, Central Brambleton, Berkley, Broad Creek and Huntersville. Of special note is that the construction of over thirty new homes is expected to begin next spring on 5th to 7th Bay Streets. •
Our multi-family properties will receive millions of dollars in new construction and renovation over the next few years. This includes 70 new apartments at Grandy Village, major renovations at Diggs Town and the completion of comprehensive improvements at Merrimack Landing.
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The FY2018 budget includes funding to begin the redevelopment of the Newton’s Creek/St. Paul’s area, which includes three public housing communities built in the 1950’s. The goal of the family-focused initiative is to transform this area with highly concentrated poverty into a mixed income, mixed use community of opportunity.
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In addition to new capital investment, the FY2018 budget includes continued community engagement and supportive services activities, supported by funding by the multi-year HUD Jobs Plus grant and a distribution of earnings from Hampton Roads Ventures LLC, a community development entity established under the authority of NRHA.
Once again NRHA has been designated a “high performer” for management and maintenance of Norfolk’s public housing neighborhoods. This distinction places NRHA in the top echelon of housing authorities nationwide and reflects the dedication, skills and experience of its employees. NRHA employees have continued to achieve service goals and objectives while facing the challenges of uncertain Federal funding and changing program requirements. For the third consecutive year, the budget plan provides for performance-based wage increases that are considered essential to retaining NRHA’s outstanding employee capacity. The proposed FY2018 budget includes a total capital and operating spending plan of $116.5 million, a 6.8 percent increase over FY2017. It is emphasized that this proposed increase reflects additional capital and program activities rather than any significant change in operations or administration. With our FY2018 budget, we look forward to enhancing collaboration with our community partners and furthering the implementation of “Home Forward,” providing quality, sustainable housing choices for Norfolk families.
John Kownack
Executive Director, NRHA Budget in Brief | 4
Vision Statement QUALITY HOUSING CHOICES IN NEIGHBORHOODS WHERE YOU WANT TO LIVE
Mission Statement TO PROVIDE QUALITY HOUSING OPPORTUNITIES THAT FOSTER SUSTAINABLE, MIXED-INCOME COMMUNITIES
Introduction Norfolk Redevelopment and Housing Authority (The Authority), was created by the City of Norfolk (The City) on July 30, 1940 under the provisions of the United States Housing Act of 1937. As a chartered political subdivision of the Commonwealth of Virginia, The Authority provides subsidized public housing, rental assistance, and administers redevelopment and conservation projects within the City in accordance with state and federal legislation.
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From left to right: Rose M. Arrington, Richard Wells Gresham, Donald J. Musacchio, Barbara Hamm Lee, Suzanne Puryear, Michael Burnette, and Alphonso Albert.
NRHA is headed by a board of seven commissioners, appointed by Norfolk City Council, who are responsible for determining policy and direction. NRHA Commissioners are residents of Norfolk and serve staggered four-year terms. The board elects a Chairman and Vice Chairman, as well as selects an Executive Director who is responsible for NRHA’s activities and operations.
To contact a Commissioner, call 757.314.1679
Budget in Brief | 6
FY2018 OPERATING BUDGET HIGHLIGHTS THE CONSOLIDATED ANNUAL OPERATING AND CAPITAL BUDGET SET FORTH REVENUE AND EXPENDITURES:
TOTAL FY2018 BUDGET - $116,498,745 Other Programs $5,053,024 | 4%
Development $50,213,750 | 43%
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Housing $61,231,971 | 53%
Authority delineates operating and program budgets for specific initiatives within conservation neighborhoods, public housing communities and the Housing Choice Voucher program. he
This budget is designed to afford an easy, readable and understandable document with a detailed breakdown of expenditures by divisions. The budget reaffirms NRHA’s commitment to: • Fiscal responsibility with limited resources while providing quality housing services, and • Ensuring affordable housing and the promotion of housing choice opportunities for the citizens of Norfolk.
53% HOUSING
Provides an ongoing stream of funding that makes up the gap between what low income tenants can afford to pay in rent and the cost of operating housing and resident services programs.
43% DEVELOPMENT
Partners with communities to pursue new housing development; develop the existing land inventory; and continue to create a homeowner assistance capacity to include rehabilitation products, homebuyer subsidy, credit repair and counseling. Partners with structured finance programs to redevelop or build new housing properties.
4% OTHER
Includes cost to support internal and external initiatives that are otherwise underfunded or ineligible under federal programs and/or projects that do not exclusively benefit a specific division. 7 | www.nrha.us
TOTAL FY2018 BUDGET WHERE DOES THE MONEY COME FROM? Program Reserves $6,385,783 | 6%
Other Income $18,989,109 | 16%
Tenant Revenues $20,251,115 | 17%
HUD Grant $58,832,118 | 51%
City Grants $12,040,620 | 10%
WHERE DOES THE MONEY GO?
Capital $189,052 | .16% Operation Costs $19,211,056 | 17%
General Expense $1,609,214 | 1%
Program Costs $28,955,790 | 25% Capital & Multiyear Programs $40,015,222 | 34%
Other Administration $4,701,298 | 4%
Labor $15,915,640 | 14%
Employee Benefits $5,901,473 | 5%
Budget in Brief | 8
SUMMARY— Housing Division revenues and expenditures total $60,014,668 and are derived from HUD operating subsidies, grants, tenant income, and other income The operational shortfall projected in FY2018 for the Federally Aided Program ($2.1M) is recommended to be funded from other program reserves. Housing Choice Voucher Administration shortfall ($782K) is recommended to be funded from earnings and privately managed reserves. Housing Choice Voucher Program shortfall ($473K) is recommended to be funded from their own program reserves. In FY2018 our expenditure projections will fluctuate as we continue to convert properties to RAD. At the same time our focus will be on efforts to manage and maintain 3,237 assisted rental units as well as 2,990 Housing Choice Vouchers for participants in two major programs. Capital Funds, under the umbrella of the Design and Construction Management Department is still providing funding for necessary capital improvements to maintain aging stock and infrastructure of the public housing properties. NRHA must constantly replace roofing, heating systems, windows, doors, flooring and other items in the federally assisted public housing communities. Tidewater Gardens and Calvert Square will receive new lighting.
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HOUSING OPERATIONS Goals: •
Increase assisted housing choices by providing project based vouchers for developers.
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Improve the quality of low income public housing program using various strategies for renovation.
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Improve the quality of the HCV program by broadening landlord participation.
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Improve community quality of life and economic vitality.
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Promote self-sufficiency and asset development of families and individuals.
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Develop community engagement initiatives for public housing communities to promote safety, prevention, intervention, and enforcement.
HOUSING PROGRAMS PROJECTED REVENUE AND EXPENDITURES
Budget in Brief | 10
SUMMARY— Revenue for the
Development Division totals $50,213,750 and is derived from ablend of various funding sources. There is a $148,148 operational shortfall projected in FY2018. Operational shortfalls are projected in Capital Fund Administration. This shortfall is recommended to be covered from earnings ($29,125) and Capital Fund Admin Reserves ($119,023). Expenditures for the Division will focus on 5th-7th Bay Development in Ocean View (32 single family homes), completing the renovation of Merrimack Landing apartments and constructing storage units, and managing the redevelopment component of assisted-rental properties selected for HUD Rental Assistance Demonstration (RAD) program. Development will continue programs that move first-time homebuyers to closing and acquisition of blighted properties based on negotiations with willing sellers. Capital Fund, which is a tool to improve aging housing stock and infrastructure of the public housing properties, has a budget of $13.1M to continue dwelling and community upgrades including lighting, porches, windows, site upgrades, and appliance replacement. The privately-managed communities are managed by third party entities with NRHA oversight. Property management fees and operating expenses are covered through tenant rents. These properties produce net operating revenue annually that can be used for other NRHA programs. We anticipate using $1.7M in earnings to fund shortfalls of other Authority programs. 11 | www.nrha.us
COMMUNITY DEVELOPMENT Goals: •
Prepare and submit financing plans to support improvements for the Diggs Town and Young Terrace communities.
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Various redevelopment initiatives including new infill single family homes throughout NRHA’s redevelopment and conservation areas; as well as City of Norfolk neighborhood plan areas.
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Implement infrastructure improvements and enter into disposition agreements to build 32 new homes on 5th to 7th Bay Streets in Ocean View.
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Homeownership assistance through firsttime homebuyer subsidy and homebuyer credit repair, education and counseling.
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Providing a broader range of quality housing choices via the revitalization of Norfolk’s public housing communities through the HUD Rental Assistance Demonstration (RAD) program. This will involve collaboration with new and existing partners.
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Complete new assisted apartments in Broad Creek, new apartment development and master planning in Grandy Village, as well as repositioning of Merrimack Landing and Park Terrace apartments.
DEVELOPMENT PROGRAMS PROPOSED REVENUES AND EXPENDITURES
Budget in Brief | 12
OTHER PROGRAMS SUMMARY - FY2018 expenditure needs for “Other Programs” total $5,053,024
and is comprised of eleven unique programs which are not contained in either of the Authority’s two programmatic divisions. The revenue sources supporting these activities are derived from a program’s own reserves, earnings from privately managed properties or fee for service agreements. Expenditures and funding gaps included in “Other Programs” are displayed below:
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PROGRAM DESCRIPTION - OTHER PROGRAMS Project Development Financing — Dedicated to
Executive Director Contingency Fund —
developing financial strategies and coordinating efforts to provide mixed financing initiatives in the renovation, redevelopment or construction of housing.
Funds activities that support internal and external initiatives that are otherwise ineligible under federal programs.
COCC Specialized Maintenance — A collective
the Moton and Roberts Village public housing communities that have been cleared and are awaiting development Specialized Maintenance
group of specialized trades that perform maintenance services primarily to the public housing communities.
Core Business Service — A project to expense
certain services (IT, Parking, Employee Assistance Program and Telephone Lines) determined to be an administrative burden to equitably distribute to the programs.
COCC Administration — Reserves from Central Office account used to offset shortfalls from charging management fees as a target reduction measure in select programs.
Communications and Government Relations —
The department oversees development, planning, implementation and integration of all communications and marketing strategies in support of NRHA’s initiatives and coordinates liaison activities for legislative matters.
Broad Creek Village — Includes the former sites of
201 Granby Building Reserves — Accumulated funds
from operating the 201 Granby building and proceeds from the sale of the building. Funds can be appropriated with Board approval to fund program gaps and new initiatives.
Hampton Roads Ventures — NRHA provides
management and services to Hampton Roads Ventures, LLC (HRV), including oversight management for loan servicing, asset management, compliance and reporting.
Disposition Support — NRHA provides
maintenance of cleared land and temporary operations support to properties purchased and own by NRHA.
Executive Transformation — Funds activities that support agency goals including project and program implementation, best practices, and business change.
Budget in Brief | 14
CENTRAL OFFICE COST CENTER SUMMARY- Virtually all funding of the Central Office Cost Center (COCC) is derived
from NRHA programs tendered for services rendered. FY2018 funding totals $15.4 million. (This amount is gross of $ 2.0 million of inter-project activity between COCC units). Budgeted resources for the COCC can be grouped in four categories below.
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GOALS: Common to all COCC functions this year will be the task of reassessing selected functions to improve efficiency and effectiveness.
EXECUTIVE & ADMINISTRATIVE OFFICE FUNCTIONAL AREA: ADMINISTRATIVE SERVICES BUDGET AND COMPLIANCE COMMUNICATIONS AND GOVERNMENT RELATIONS EXECUTIVE OFFICE FINANCE HUMAN RESOURCES INFORMATION TECHNOLOGY
OTHER FUNCTIONAL AREAS: Capital Fund an Energy Management 555 E. Main Street Housing Division Oversight Specialized Maintenance
5 FUNCTIONAL AREAS OF COCC: EXECUTIVE AND ADMINISTRATIVE OFFICES $5,126,004 | 33%
555 E. MAIN STREET $882,843 | 6%
CAPITAL FUND AND ENERGY MANAGEMENT $748,148 | 4%
HOUSING DIVISION OVERSIGHT $1,651,761 | 11%
SPECIALIZED MAINTENANCE $7,077,686 | 46%
Budget in Brief | 16
PRODUCED BY THE BUDGET AND COMPLIANCE D E PA R T M E N T
AND THE C O M M U N I C AT I O N S A N D G O V E R N M E N T R E L AT I O N S D E PA R T M E N T