Title
Loan between City and Housing Authority to address funding issues.
Discussion
The Housing Authority (HA) utilizes funding from the U.S. Department of Housing and Urban Development (HUD) to provide housing assistance payments to 6,172 lowincome families in Long Beach. At this time, the HA is facing significant financial issues primarily caused by rising housing costs and recent program changes proposed by HUD. To ensure there is sufficient revenue to cover costs by the end of the fiscal year, staff is proposing a number of actions to address this problem. These actions are summarized as follows:
. Currently there is a gap between the actual monthly housing assistance payments (HAP) in Long Beach and the amount HUD is providing to cover these costs. A number of discussions have occurred between City staff and HUD to address this issue, but it is still unknown how HUD will ultimately fund these costs. Preliminary information projected a shortfall of $700,000 between HUD revenue and actual HAP costs this fiscal year. Staff is proposing to utilize administrative reserve monies (currently about $1.5 million) to cover the gap if necessary.
. HUD is also proposing a revision to the Administrative Fee allocation. These are funds provided by HUD to support all costs (staff, rent, overhead, etc.) necessary to administer the program. In April 2004, HUD stated administrative fees were going to be reduced by approximately 13 percent or $525,000, for Long Beach this fiscal year. Since then, HUD has revised its position indicating the administrative income will only be reduced by 7 percent, but the actual reduction is not yet known. Understanding there will be some reduction to administrative income, staff is moving forward with eliminating nine positions from the Fiscal Year 2005 (FY 05) budget (this action will not result in lay-offs, staff will be reassigned and vacant positions will be eliminated) to reduce costs. Staff is proposing to utilize administrat...
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