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HomeMy WebLinkAboutAgenda 6-c - Funding Plan for Orange County Services Impacted by Federal Government Shutdown 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 5, 2019 Action Agenda Item No. 6-c SUBJECT: Funding Plan for Orange County Services Impacted by Federal Government Shutdown DEPARTMENT: County Manager's Office ATTACHMENT(S): INFORMATION CONTACT: Attachment 1 — NC Health & Human Bonnie Hammersley, 919-245-2306 Services Memorandum Nancy Coston, 919-245-2802 Attachment 2 — HUD Memorandum Sherrill Hampton, 919-245-2492 PURPOSE: To consider approving a funding plan not to exceed $1.5 million for Orange County departments impacted by the Federal Government Shutdown that provide direct services to Orange County residents, and appropriate $100,000 from the Social Justice Funds to be used for food if the demand is greater than the capacity of the existing food programs. BACKGROUND: The shutdown of the United States federal government began at midnight on Saturday, December 22, 2018. About 380,000 federal employees were furloughed, and an additional 420,000 employees for the affected agencies were expected to work with their pay delayed until the end of the shutdown, totaling 800,000 workers affected out of 2.1 million civilian non-postal federal employees. During the shutdown, 95% of federal staff for the USDA's Food and Nutrition Services were furloughed. The Supplemental Nutrition Assistance Program (SNAP), the food-stamp program, was funded through a $3 billion contingency fund appropriated by Congress in 2018; if the shutdown continued through March 2019, those funds will be exhausted, leaving some 38 million Americans without food stamps and endangering food security. The Department of Housing and Urban Development (HUD) was one of the federal agencies closed during the partial government shutdown that began on December 22, 2018. HUD indicated there were enough Section 8 Housing Choice Voucher (HCV) funds to keep the program running through the end of February. Although landlords may not get their payments from HUD in March, the Housing Authority (PHA) cannot terminate due to a government shutdown but landlords can terminate if they do not receive payment from either the PHA and/or tenant regardless of a shutdown. HUD requires these conditions in the leases used for both the Section 8 HCV program and properties receiving Section 8 Project-Based Rental Assistance (PBRA). 2 ORANGE COUNTY DEPARTMENT OF SOCIAL SERVICES As detailed in Attachment 1, there was an early issuance of Food and Nutrition (SNAP) benefits for February and those households will not receive additional funds until sometime in March, even though the shutdown ended. For some of these families, managing their funds so they do not run out of food before the March issuance will be problematic. Information about this situation has been sent to clients by the state, and the Orange County Department of Social Services (DSS) is answering phone calls from the public about their concerns. The guidance the County is receiving (see Attachment 1) is to encourage families to stretch these resources and that the funds will remain on their cards for the usual twelve months. Orange County Department of Social Services (DSS) continues to take and process new applications and these can be approved since the shutdown ended. If another shutdown occurs, USDA would again be in the position to run out of funds for new applicants. For these reasons, DSS anticipates additional requests for food, particularly after February 15th. Although food pantries appear to be stocked fairly well for now, it is unlikely that they would be able to support this higher demand. Although the shutdown ended for three weeks, a food shortage is still possible during the transition. It is difficult to estimate how many of the 5,000 local households would need assistance until the March distribution. If another shutdown occurs, all households would be impacted and there would be a monthly loss of $1.1 million until such time as USDA can release funds. It appears there may be some movement to adopt legislation to release Temporary Assistance to Needy Families (TANF) and child care (has passed House and Senate). That passage would assure continuance of Work First checks and staff costs paid by TANF. If not, another shutdown could have significant impacts starting in March. Another impact if this continues past February would be lost revenue to support staff working in Food and Nutrition services or in programs supported by TANF. Orange County could lose approximately $122,000 in administrative funds for Food and Nutrition and another $166,000 from TANF each month of the shutdown. In terms of the County's response, DSS suggests promoting food drives starting in mid-February and continuing until food benefits are issued again. DSS has convened the various organizations with food pantries or other food resources to coordinate efforts to meet this need. There may also be a need for emergency funds to assist families impacted by the early distribution or by another shutdown. Any funds provided by the County for food will not be reimbursed by federal or state agencies. ORANGE COUNTY DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT The government shutdown has negatively impacted the work being undertaken in the Housing and Community Development Department (H&CD) in two (2) ways, including the following: Funding for FY18-19 HOME projects will be delayed. Therefore, the four (4) entities awarded funding will not be able to start their projects as anticipated in January 2019. The entities and award amounts are as follows: Community Home Trust — $60,000 EmPOWERment, Inc. — $145,000 Habitat for Humanity— $60,000 3 Orange County — $139,613 (includes $25,000 for the Rapid Re-Housing Program and $114,613 for the new Local Rent Supplement Program). H&CD staff will conduct a conference call with the aforementioned entities in early February to ascertain the impact to the projects and what actions may need to be undertaken at that time. There are approximately 537 to 550 voucher holders in the County Housing Choice (HCV) Voucher Program. HUD allocated 623 general vouchers and 5 Veterans Affairs Supportive Housing (VASH) vouchers to the Orange County Housing Authority (OCHA). The County received payment from HUD for January and anticipates, per HUD, receipt of the February 2019 payment. HUD payments are made the first of each month. The County pays its landlords and applicable HCV participants on the first of each month. The total amount of HUD-Held Reserves is $235,736. The OCHA will seek HUD permission to utilize its HUD-Held Reserves, as needed. HUD has limited the use of outside sources of funding in the Housing Choice Voucher (HCV) Program. HUD provides guidance for this in a Public and Indian Housing (PIH) Notice 2013-28 (Attachment 2). FINANCIAL IMPACT: All federal funded assistance payments that the County makes will be reimbursed. The County Manager will ensure that the County can be reimbursed and will provide written confirmation that the Federal Government will allow the reimbursement. SOCIAL JUSTICE IMPACT: The following two Orange County Social Justice Goals are applicable to this item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends the Board approve additional spending authority not to exceed $1.5 million to cover federal funds for financial assistance that will be reimbursed by the Federal Government, and appropriate $100,000 from the Social Justice Funds to be used for food if the demand is greater than the capacity of the existing food programs. 4 NC DEPARTMENT OF HEALTH A N Q Division of Social Services ,2 HUMAN SERVICES Economic and Family Services t pu Food and Nutrition Services Early Issuance Messaging for Week January 21, 2019 • Active Food and Nutrition Services households received their February FNS benefits earlier than normal on January 20, 2019. Benefits received are not extra and no additional benefits will be loaded onto EBT cards until the federal shutdown is resolved. • Benefits received by the household do not have to be used by the end of January. Households have one year to use benefits loaded onto their EBT Cards. • Families should budget their benefits, so they will be able to purchase food until additional resources are made available by the federal government. • If individuals or families run out of food, they should contact their county department of social services to find out about other resources available within the community. • If an Authorized EBT retailer refuses to accept EBT cards, contact the NC EBT Call Center at 1-866- 719-0141 and provide the name and address of the store. DHHS will provide this information to the USDA for investigation. • DHHS is waiting for further guidance from the United States Department of Agriculture (USDA) regarding March 2019 benefits. 5 U.S. Department of Housing and Urban Development Public and Indian Housing Special Attention of: PIH Notice 2013-28 Office Directors of Public Housing; Regional Directors;Public Housing Issued: December 16, 2013 Agencies. Expires: Effective until amended, superseded, or rescinded Cross References: Notice PIH 2O13-12 SUBJECT: Guidance on the Use of Outside Sources of Funds in the Housing Choice Voucher(HCV)Program { { i. Purpose. This purpose of this Notice is to provide guidance to public housing agencies (PHAs)regarding the use of outside sources of funds for Housing Assistance Payments (HAP) expenses in the Housing Choice Voucher(HCV)Program. 2. Background. HUD has received numerous inquiries from PHAs requesting clarification regarding whether outside sources of funding may be used to make HAP payments. In some cases PHAs are seeking to maintain leasing or increase leasing up to baseline,which without outside sources of funding would not be possible for the PHA in light of the deep proration in renewal funding as a result of sequestration. Other PHAs have asked if outside sources may be used to prevent the termination of families as a result of insufficient funding. This notice clarifies the requirements regarding the use of outside funds for calendar year 2013 and subsequent years. I I 3. Acceptable Sources of Funds. PHAs administering the HCV program have several acceptable sources of funds available to cover eligible HAP expenses in the HCV program. These sources of funds include HCV budget authority,HUD-held HAP reserves (undisbursed budget authority),PHA-held Net Restricted Assets (NRA), funds from the HAP Set-aside (if available after PHA application and approval) and Unrestricted Net Assets (UNA— commonly referred to as administrative fee reserves). Use of these sources of funds (other than current year admin fees) are acceptable in order to maintain current leasing, increase leasing, and/or covering increased HAP costs under the HCV program. (The use of current administrative fees may only be used for administrative expenses and may not be used to cover HAP costs until the PHA fiscal year end,when unused administrative fees roll into the administrative fee reserve.)For PHAs participating in the Moving to Work initiative, fungible Public Housing Operating and Capital funds are also acceptable sources of funds to cover eligible HAP expenses in the HCV program. Note also that certain categories of Set- aside funding, such as funding to prevent terminations of families due to insufficient funding, may not be used to place new families under lease in the HCV program. PHAs with any questions regarding the eligible uses of Set-aside funding should contact their financial analyst at the Financial Management Center(FMC) for assistance. 6 4. Prohibited Augmentation of HCV Funds from Outside Sources of Funds to Expand the HCV Program. No other funds, other than the sources of funds identified in Paragraph 2 above,may be used to expand the HCV program through additional leasing of units, either to lease up to baseline,maintain current leasing levels, or to otherwise mitigate the loss of leased units through attrition necessitated by funding limitations. The following sources of funds are examples of prohibited sources of funds which cannot be used to admit new families under the HCV program: HOME funds, net proceeds from Public Housing demo/dispo, Central Office Cost Center(COCC) funds, State funds, donations from philanthropic parties, and Mod Rehab admin fee reserves emanating from the Housing Certificate Fund. The use of these outside sources of funds for additional leasing of vouchers is prohibited;therefore,PHAs may not report the leasing and costs covered by the prohibited sources in VMS since they cannot be included in the calculation of renewal funding in the subsequent calendar year(CY). PHAs which have funds from outside sources may use those funds to operate a separate and distinct local rental assistance program; however,units leased under that program are not part of the federally funded HCV program and are not eligible for HCV renewal funds or administrative fees. Should a PHA use these types funds to operate a separate and distinct rental assistance program,the leasing and costs associated with these funds may not be reported in the Voucher Management System(VMS). 5. Exception Regarding the Augmentation of HCV funds from Outside Sources of Funds to Prevent the Termination of Assistance of Current Participants. There is one exception for use of outside sources to augment the HCV program. The exception is for PHAs that, despite taking reasonable cost-saving measures, are in a HUD-confirmed shortfall position and need additional funds in order to prevent the termination of current participants. In this instance, PHAs may use outside sources of funds such as net proceeds from Public Housing demo/dispo, Central Office Cost Center(COCC)funds, State funds, donations from philanthropic parties, and Mod Rehab admin fee reserves emanating from the Housing Certificate Fund. Prior HUD approval is required before PHAs may supplement the HCV program with these,or any other,sources of funds. PHAs would then report the leasing and costs covered by these sources in VMS which would then be included in the calculation of renewal funds in the subsequent calendar year. HOME funds may not, in any instance,be used to augment funds for the HCV program. It is noted,however,that HCV participants whose voucher HAP contracts are being terminated due to insufficient funding could be assisted under the HOME TBRA program. These families could then be provided a local preference to return to the HCV program once funds are available under the HCV program to support the HAP payments of these participants. 6. Confirmation of a Shortfall by HUD: Before determining if a PHA may use an outside source of funds to cover a shortfall in the HCV program,HUD must confirm if a shortfall exists. In determining the shortfall,HUD will use the Two Year Forecasting Tool. PHAs should refer to Appendix B of Notice PIH 2O13-12 which provides the criteria HUD will use to determine if the PHA has a HUD-confirmed shortfall and the calculation of the shortfall amount. HUD's Two Year Forecasting Tool can be found at I' 7 http://portal.hud.gov/huddoc/FORECASTING_TOOL_v2.XLS and the instructions can be found at http•//portal hud.�ov/huddoc/forecast guidance.pdf. 7. HUD Approval Required Before Use of Outside Sources of Funds to Prevent the Termination of Current Participants. As indicated above,prior HUD approval is required before PHAs may supplement the HCV program with any outside sources of funds to avoid } the termination of current HCV participants. PHAs seeking approval for the use of such funds must submit a written request to the Office of Housing Voucher Program's Financial Management Division(FMD). Requests should be submitted to the following email address: PIH.Financial.Management.Division(a�hud. ov. The subject line in the email should be"PHA Request to Use Outside Sources of Funds to Prevent Termination of Current Participants". FMD will confirm with the Shortfall Prevention Team (SPT)that a shortfall j exists, and once confirmed will issue an approval. If the shortfall is not confirmed,the PHA will receive a notice of denial. It is important to emphasize that this outside funding may 1 only be used to protect current participants from termination of assistance due to insufficient funding during the calendar year. For example,the PHA may not use the outside sources to place additional families onto the program or enter into new project-based voucher contracts, or to free up HCV resources that would then be used to place additional families onto the program. PHAs approved for use of outside sources of funds will.enter the amount of these funds and the total units covered by the funds in the comments section in the Voucher Management System (VMS). Paperwork Reduction Act. The additional information collection requirements contained in this document are approved by the Office of Management and Budget(OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The OMB control number is 2577-0169. In accordance with the Paperwork Reduction Act,HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number. Further Information. Any questions concerning this Notice should be directed to the Housing Voucher Financial Management Division, Office of Public Housing and Voucher Programs, at(202)708-2934 (this is not a toll-free number). Persons with hearing or speech impairments may access these numbers via TTY by calling the toll-free Federal Information Relay Service at(800) 877-8339. /s/ Sandra B. Henriquez,Assistant Secretary for Public and Indian Housing i I