SPECIAL MEETING HOUSING AUTHORITY

BACKGROUND The Housing Authority of the City of Pleasanton owns and operates a 50-unit senior HUD public housing development located at 240 Kottinger Drive. Attached is the proposed Operating Budget for fiscal year 2008/09 (July 1, 2008, to June 30, 2009) for Kottinger Place. The document has been prepared by staff in cooperation with Barcelon Associates which provides project management services for Kottinger Place. In accordance with previous actions, the proposed budget reflects a realistic assessment of revenues and expenses for Kottinger Place. Revenue targets are impacted potentially by tenant incomes which establish rents, unit vacancies, and changes in HUD subsidies. Project expense may be impacted by inflationary costs and unforeseen repairs. A summary of income and expenditures ("Budget Footnotes") is included as an attachment. The budget also includes "year-to-date actual" figures (as of March 2008) 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 Staff is projecting annual revenue at $340,000. However, the budget assumes that approximately $50,000 will be derived from HUD capital funding and this total amount has not yet been approved by HUD. Further, the budget assumes $108,000 for HUD for operating subsidies and this funding is subject to change based on HUD funding. A total of $150,000 in operating revenue is estimated to be derived from tenant rents which are projected to decrease slightly from last year. This decrease reflects changes in tenant household income which determines rents. In the events projected revenue does not materialize, staff will work with Barcelon to make the necessary budget adjustments. Staff is projecting that the annual operating expenses at Kottinger Place will be $289,707. This represents an increase of approximately 5% over estimated FY 2007/08 expenses of $280,769. This increase is due to general overall increases in utilities, maintenance, and administration costs. In addition, $43,500 is budgeted for Extraordinary Maintenance funded with a HUD capital grant for a total budget of $333,207 and the continued availability of this funding will help to offset continued inflationary costs for landscape maintenance and utilities. Overall the project projects $340,000 in revenue and $333,707 in expenses for a potential ending balance of $6,293. Page2of5