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Projected Budget Shortfall <br /> As indicated in more detail in the attached May 17, 2012 Housing Commission agenda <br /> report, notwithstanding efforts to limit expenditures, the proposed budget includes a <br /> projected annual operating deficit of $24,258. This deficit results primarily from HUD <br /> reduced operating grant. To address this matter, staff presented the Housing <br /> Commission with the following two alternatives: <br /> 1. Reduce Service Coordinator expenses (Acct. 4210) by $7,259, thereby eliminating <br /> regular services but retaining $1,800 for a minimal level of service, and utilize <br /> $16,999 from existing project reserves. <br /> 2. Retain the Service Coordinator expenses at the anticipated amount of $9,058 and <br /> draw down on the existing reserves to meet the total anticipated deficit. <br /> In reviewing the two alternatives, the Housing Commission recommended Alternative 1 <br /> (4 Ayes/ 1 Noe (Casey)). While both Housing Commission and staff recognize the <br /> importance of the Social Services Coordinator services, both support this alternative as <br /> a way of making every effort to keep Kottinger Place as financially self-sufficient as <br /> possible. Further, while staff does not agree with HUD's position that Kottinger should <br /> draw down on its reserves to meet the reduced grant amount, it is compelled to <br /> consider HUD's recommendation as this may result in a grant increase next year. In the <br /> event grant dollars remain at this level in the future, staff will need to consider longer <br /> term measures, including requests to utilize City Lower Income Housing Fee revenue to <br /> cover future deficits. The attached budget has been amended to reflect Alternative 1. If <br /> the City Council prefers Alternative 2, staff will amend the budget and approving <br /> resolution accordingly. <br /> Submitted by: Fiscal Review: Approve y: <br /> 2 riN /, <br /> --�1�a S(Y <br /> Steven Bocian Emily Wagner U � <br /> Nelson Fialho <br /> Assistant City Manager Finance Director City Manager <br /> Attachments: <br /> 1. Draft Resolution <br /> 2. Annual Operating Budget for Kottinger Place for FY 2012/13 <br /> 3. Housing Commission Agenda Report, May 17, 2012 <br /> 4. Housing Commission Meeting Draft Minutes, May 17, 2012 <br /> 5. Kottinger Place Reserves <br /> Page 3 of 4 <br />