HOUSING AUTHORITY SPECIAL AGENDA

BACKGROUND Attached is the proposed Operating Budget for fiscal year 2015/16 (July 1, 2015, to June 30, 2016) for Kottinger Place. The document has been prepared by Barcelon Associates. As per the Board's past direction, Barcelon has submitted a budget which it feels to be realistic. A summary of income and expenditures ("Budget Footnotes") is included as an attachment. The budget also includes columns for the original and projected/actual budget for the current year for each line item to provide a comparison with proposed budget line item amounts. An Operating Budget must be adopted each year and is used as the overall financial plan for the project during the coming fiscal year. The Operating Budget must receive final approval from the Housing Authority Board of Directors (the City Council) prior to submittal to HUD. DISCUSSION Budget details are outlined in the attached May 21, 2015, Housing Commission agenda report. Staff is projecting that the annual operating expenses at Kottinger Place will be $313,660. This represents a decrease of 0.5% over FY 2014/15 annualized expenses of $315,158. This minor change is a factor of projected increases in utility expenses offset by savings related to administration, taxes and insurance. The Operating Budget includes $154,512 in anticipated HUD grant revenue from OFND (Operating Subsidy) which has been a significant positive factor in supporting staffing and administration at desired levels deemed appropriate for a complex of this size and age. The Operating Budget does not reflect the additional availability of HUD Capital Fund Program (CFP) funding which has been approximately $50,000 per year over the past two years. The CFP funds further assist the project by funding necessary capital projects that help offset continued inflationary costs for landscape maintenance and utilities. As in the past, approximately 58% of the $313,660 in operating costs will be met through rents, which are forecast to decrease by 4.2% from $189,809 to $181,931 (as observed over the past several years, any increases in overall tenant rents are anticipated to be offset by new tenants with "zero-income"). On-site staff would receive a 2% salary increase (for cost of living and based on performance). A portion of the manager's salary will be covered by the CFP (Administration) as in prior years. The budget also reflects the addition of a small amount of funding to account for additional work performed for Kottinger throughout the year (as needed) by Barcelon support staff such as the Occupancy Specialist. The budget for tenant services (i.e., recreation supplies) was increased several years ago to promote a continued enhanced level of resident activities in conjunction with the new management. The service coordinator has been budgeted for 5 hours per week (approximately the same as the current year)with a 2% hourly rate increase. Page 2 of 4