From
Jana Mims
Title
Ordinance amending the 2012 Calendar Year Section 8 budget
Presenter
William A. Hills, Director, Housing and Neighborhood Services
Recommended Action
Approve
Analysis
A recommendation of the 2011 Weaver And Tidwell, LLP audit was the need to have the Section 8 budget amended to reflect changes in revenues/expenditures from that of the original Section 8 budget submission.
Staff presented the Final Calendar Year 2011 Budget Amendment to both F&G and Council in August 2012. The proposed amendment included in this communication is a Section 8 Preliminary Budget Amendment for Calendar Year 2012; a final Calendar Year 2012 Budget Amendment will be forth coming once the calendar year is closed. This preliminary amendment will allow for an accurate Budget To Actual presentation in the city’s CAFR issued on a fiscal year basis for 2012.
Recall that policy decisions at the federal level, changes in rental subsidies, and/or changes in the number of clients served due to unforeseen circumstances may require a HUD directed change in the voucher subsidy which in turn will affect the financial component of each voucher.
Accordingly, expenditures may exceed/fall short the budget during the proposed budget year, but only to the extent that this change will be offset by a like change in revenues and/or HUD directed use of designated fund balance for the management and administration of the Section 8 voucher program. HUD monitors the financial activity and unit activity of the Section 8 program each month through required submissions via the Voucher Management System (VMS).
Financial Consideration
On September 4, 2012 an amendment was presented to the F & G, and recommended for approval by City Council for the prorated Calendar Year 2012. (January - September 2012) Section 8 expenditures are projected to exceed the allocated budget authority and as such are now recommended to be presented and approved by the City Council for the projected increase. Total Section 8 expenditures are projected to exceed budget by $1,309,291 and revenues are projected to fall short the prorated budget authority by $254,920 resulting in a net decrease to the Section 8 fund balance of $1,564,211.
The principal reason behind the reduction in fund balance is related to the 2012 HUD Appropriations Act (HUD Notice PIH2011-67) mandated by Congress. Included in the notice were directives that required:
a.) Excess reserves, going forward, will be held by HUD rather than the PHA.
b.) In Calendar Year 2012, PHA’s were required to reduce excess reserves held at the local level; this amount was estimated, nationally, to be approximately $650M.
For Calendar Year 2012, HUD determined that Grand Prairie Housing (TX434) was to reduce excess reserves by $1,391,654. Accordingly, HUD funding for 2012 was reduced to recapture excess reserves. For the nine months (January - September 2012) voucher expenditures exceeded HUD funding to comply with HUD Notice PIH 2011-67. And even with the HUD mandated reduction in fund balance, Grand Prairie Housing fund balance for Calendar Year 2012 is projected to be at $4,087,633 as of September 30, 2012.
Body
AN ORDINANCE OF THE CITY OF GRAND PRAIRIE, TEXAS, AMENDING THE 2012 CALENDAR YEAR SECTION 8 BUDGET
WHEREAS, the 2011 Weaver And Tidwell, LLP audit recommended amending the Section 8 budget to reflect changes in revenues/expenditures from that of the original Section 8 budget submission;
WHEREAS, this preliminary amendment will allow for an accurate Budget To Actual presentation in the city’s CAFR issued on a fiscal year basis for 2012; and
WHEREAS, HUD required Grand Prairie Housing (TX434) to reduce excess reserves by $1,391,654
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS:
SECTION 1. Approves the attached amended 2012 Calendar Year Section 8 budget for the nine months (January to September) voucher expenditures which exceeded HUD funding to comply with HUD Notice PIH2011-67.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON this THE 18th day of september, 2012.