MINUTES OF A REGULAR MEETING
OF THE
LAWRENCE-DOUGLAS COUNTY HOUSING AUTHORITY
BOARD OF COMMISSIONERS
September 25, 2006 Edgewood Homes
5:30 p.m. Conference Room
1. Call of Roll.
The meeting was called to order at 5:30 p.m. by Chair, Wes Smith. The following Commissioners answered present:
Brenda O’Keefe
Mark Gonzales
Wes Smith
Willie Amison
Also present were Hubbard Collinsworth, LDCHA resident; Dennis Garrison, Brookcreek Learning Center Board President; Paula Phillips, Brookcreek Board member; Esther Kottwitz, Director of Brookcreek Learning Center; Erica Ritter, Brookcreek Program Coordinator; Kris Hermanson, Charlotte Knoche, Suzanne Kerich, Milton Scott, Vickie Butler and Barbara Huppee, LDCHA staff members.
Commissioner Johnson was absent with prior approval.
2. Approve Minutes of June 26, 2006 Conference Call Board of Commissioners Meeting.
Commissioner Gonzales moved to approve the June Board meeting minutes. Commissioner Amison seconded the motion. The motion carried.
3. Receive Comments from Tenants and Public.
Mr. Collinsworth commented that the Board Agenda items were not accessible on the website until Monday morning, the day of the meeting. There are some reports on the website that he could not get into, he could not open the documents. Ms. Huppee thanked him for his comment and assured him that would not be the case in the future. In regard to the matter of not being able to open the documents he would have to get with us so we could find out what the problem was.
4. A. Receive August 2006 Financial Reports.
August financials bring the agency 67% through the budget year. Rental income was 3% over at 70%, interest income was over at 174% and other income was 5% over budget projections at 72%. As of the August report the operating subsidy was running over at 74%. The final 2006 subsidy proration of 86.02% was received this week in the amount of $537,303. What we have in the budget that was predicated on the 2005 amount was $469, 560. The difference is $67,743 more than originally projected. Ms. Huppee reminded the board that, at the time of the board approval of the 2006 budget, it was not known what the final subsidy calculation was therefore the Board deferred the merit pay raises or step increases until this information was known. On the expense side total administrative expense was running under budget projections at 59%. Tenant Services continued to run over at 73%. A total of $2,332.78 in reimbursements to the tenant services line has been completed and will be credited in the September financial reports. There was an increase in the tenant services transportation line as transportation costs to run the Babcock Place bus through August was $6,046. The total annual budget under this line is $5,500. These costs were mostly gasoline and repairs. Ms. Huppee reminded the Board that the operating budget is fully funding the senior program at Babcock Place. There is not a separate grant for this. Water and electricity continued to run under budget projections and gas continues to run over at 74%. Total utilities were 2% over budget at 69%. As of August the agency showed $190,215 in income over expenses. This does not include the $15,689 paid to date under contract work in progress for the Edgewood Homes Maintenance Shop expansion project but it does include hail and windstorm damage proceeds from the insurance company in the amount of $11,529.32. The insurance proceeds will be credited to the Capital Fund grant where the repair work was charged. When deducting that amount, the agency has $178,686 in income over expenses as of the August reporting period.
Commissioner O’Keefe moved to approve the August financial report as presented. Commissioner Gonzales seconded the motion. The motion carried.
5. CONSENT AGENDA
A. Receive Executive Director’s Report.
B. Resolution 931: Approve 2007 Fair Market Rents and Adjust Payment Standards for Tenant Based Rental Assistance Program.
C. Resolution 932: Amend Section 15: Records and Reports, of the LDCHA Personnel Policy.
Commissioner Amison moved to approve the Consent Agenda as presented. Commissioner O’Keefe seconded the motion. The motion carried.
6. SPECIAL AGENDA ITEM
A. Receive Report Analysis of Proposed MTW Rent Increase on Residents.
Ms. Huppee stated that the MTW rent structure is the core element of the agency’s MTW program. The 2007 Annual Plan proposes to increase the minimum and maximum MTW rents.
The minimum rent would increase $30 a month and the maximum rents $50 per month. The minimum rent is designed to be a disincentive not to work. The maximum rents are set to reward work by capping rent increases regardless of how many jobs a person may get. A review of the MTW yearly outcomes has included an annual analysis of the impact of the MTW rent structure on participants. For the last several years this report has shown that most households are paying less than 30% of their adjusted gross income for rent and in some cases households are paying significantly less that the income-based standard. The Board was presented with an analysis of the impact the proposed MTW rent changes would have on participating public housing households and how these households would be affected. This would only affect households that are at the minimum rent and those that are at the ceiling rent. It would not affect people that are going to fall between the minimum and maximum rent. What this analysis showed in all cases was the income was 30% less than the adjusted gross income. That is noted because 30% would be the amount that a tenant would be paying if they were under the income-based rent formula in the absence of MTW. After looking at all of the households that would be affected and the rent comparisons, staff’s recommendation is that the Board approve the increases to the MTW rent as proposed in the Annual Plan.
Commission O’Keefe’s concern was that any increase would be difficult and pose a hardship for tenants. Commissioner Amison stated that he realized raising the rents was to maintain the intent of the MTW program and a reflection of the program, but there is also the human side. He asked when the MTW rents would be raised again. Ms. Huppee stated that MTW annual reports are required and based on those annual reports recommendations were made. Ms. Huppee pointed out that MTW rents have not been increased since 1999. If the rent changes were made this year, there certainly would not be any change next year. Ms. Huppee stated that the Board did not have to go to the $50 maximum but could do something else. Commissioner Smith’s observation was it was dramatically different depending on their rent now; $425 versus $375 is 13% whereas $625 versus $575 is 8%, and it seems disproportionate, the idea being $50 a month is a much bigger number. It is profound when it is all taken at once. Ms. Huppee stated that the commissioners may want to consider a straight across-the-board percentage increase instead. Commissioner Gonzales stated that the Board was responsible from a budgetary standpoint to step up and make sure the agency is operating effectively too and certainly the MTW program has brought us to where we are today. He thought the $50 would make a difference to some residents. Commissioner Gonzales stated that if there was an increase now there wouldn’t be another in the next year, but would recommend that if the Board decided to lower it to an amount that it feels comfortable with he suggested doing it now as it would take the shock out of it rather than increase it to $50 today. Ms. Huppee stated that the agency does have to look at it annually and the reason it was not done at an earlier time was that the future of the MTW program was so uncertain and the agency didn’t want to impose increases on residents knowing that the program may end. On the other hand it may have been a disservice not raising the rents because if residents would have to revert back to adjusted gross income, their rent would bounce way up because all of the MTW deductions would go away. Commissioner Amison stated that the Board’s intent is not to make a hardship on residents, but if the Board didn’t do it now, next time may be even worse. In fairness to our constituency the Board is not doing any service to the residents in preparation for income-based rent by keeping MTW rent artificially low stated Commissioner Gonzales. Chairman Smith pointed out for, illustration purposes, that on the one-bedroom, the 5% increase takes the max to $393; a 7.5% increase takes the max to $403, a 10% to $412. On a two-bedroom, 5% would be $451, $462 at 7.5% and $473 at 10%. During discussions of averaging out the percentages, the Board requested a year-to-year comparison of increases in income. Ms. Huppee stated the MTW exclusions from income are extraordinary but the agency does have gross income information and can look at how gross income has changed. Chairman Smith stated he was interested in the trend of the population that is served and how that income has either gone up or down while these rents have stayed the same. Commissioner Gonzales moved to leave the minimum rents as proposed but to increase the maximum 5% across-the-board and authorize the Executive Director to round up the figure to a five or zero. Commissioner Amison seconded the motion. The motion was approved unanimously, Resolution 933. Commissioner Gonzales also stated that it is important to remind the board next year of this conversation because there is a fiscal responsibility as well.
7. PUBLIC HEARING
A. Conduct Public Hearing on the Lawrence-Douglas County Housing Authority 2007 Annual Plan, 2006 and 2005 Capital Fund Performance and Evaluation Progress Reports and 2004 Capital Fund Closeout Report.
Chairman Smith opened the public hearing at 6:15 p.m. There being no comment Commissioner Amison moved to close the Public Hearing. Commissioner O’Keefe seconded the motion. The motion carried and the regular meeting was reconvened at 6:17 p.m.
8. REGULAR AGENDA
A. Resolution 934: Approve HUD Submission of the LDCHA 2007 Annual Plan, 2006 and 2005 Capital Fund Performance and Evaluation Progress Reports and 2004 Capital Fund Closeout Report.
Commissioner Gonzales moved to approve the submission of the 2007 Annual Plan as amended by Resolution 933. Commissioner Amison seconded the motion. The motion passed unanimously.
B. Receive Report from Brookcreek Learning Center on its Compliance in Meeting the Lease Requirement of enrolling 22 Public Housing Children Across its Sites. Resolution 935: Take Final Board Action on the Continuation of the Center’s Occupancy of Units 159 and 160.
This issue first came to the Board’s attention in October 2005. At that time Brookcreek had 6 public housing children enrolled across its three sites. Their lease requires them to have 22 public housing children continuously enrolled in their program. The enrollment capacity across their three sites is 91. This began an analysis process of the requirements of the lease and the obligations of the housing authority to ensure that public housing property is only being used for public housing purposes. Since March Brookcreek has been engaging in recruitment activities in an effort to bring their enrollment up. In March the Board decided, with the concurrence of the Brookcreek Board President, that it would set September as the deadline for Brookcreek to come into compliance with the lease requirement of 22 number and that it would take up discussions this month reach a decision about continuing the lease. At the time, the Board’s decision was that if they did not have their numbers by September it would discuss ending their lease in December. Last month the Board asked for enrollment figures from March to September and the recruiting activities and the marketing activities that Brookcreek has been engaged in. That information was provided to the Commissioners in their Board packet.
As of last week, there were 17 public housing children enrolled. Also to recap, the Board talked about the aspect of applying market rent for use of that property if Brookcreek was not able to meet their enrollment requirements of the lease. Brookcreek currently gets that property free of charge and the housing authority pays the gas and the water on that building. The market rate for the two bedroom is $517 a month and the four bedroom it is $776 a month.
Commissioner Amison mentioned that the Board also talked about the possibility of a proration. Commissioner Gonzales asked if there was only a certain percent of public housing children utilizing that facility and if we are charging market rent on a proration that would be OK with HUD? Ms. Huppee responded that the agency needs a rational outcome that could be justified if this were to come before HUD. HUD’s assumption is that all of the children in this daycare center are public housing children. Chairman Smith suggested combining the rents of the two places. Add those together it is $1293 a month, if there are 22 kids that could be there that is 100% compliance, that is $58.77 a child that is not a public housing resident. This month if they have 17 they would pay for five which would be $293.85. Even in a tight budget that seems fairly nominal under the circumstances. Commissioner O’Keefe stated that a certain time each month has to be set for the compliance report to come in and based on that time, regardless of the next day after it is submitted, the amount is set in that time frame for the following month’s rent to be determined. Chairman Smith informed Brookcreek since they were not at the last meeting that the consensus was that Brookcreek serves a need here and the agency wants it here but by the same token the housing authority’s position cannot be jeopardized by allowing Brookcreek to be here free of charge if it is not doing what it agreed to do. Commissioner Gonzales stated that it appeared the number 22 was obtainable and asked Brookcreek if they thought it was or if not the reason why. Esther Kottwitz stated they will continue their efforts but it is something that they have little control over, and being a non-profit agency, the amount of $293 a month is a lot for Brookcreek. Ms. Kottwitz also stated that part of the argument that she would make to HUD is that public housing children need the diversity provided by a mixed environment versus a one environment. Commissioner Gonzales inquired if Brookcreek was at full capacity. Ms. Kottwitz said they had openings, presently 6 pre-school openings. Chairman Smith inquired as to total census, or occupancy numbers, how do those run over the last few years, have you been full and do you attribute anything to not being full now. Ms. Kottwitz responded that Brookcreek just had a mass exodus to kindergarten of about 13 children, and during the summer six children from Edgewood left to attend East Heights. Also there is the naturally occurring change of children graduating from infant to toddler to pre-school. Chairman Smith in discussing the variable cost per child, at $400 or $500 per child, stated that if it really doesn’t cost any more to get 2 or 3 more children enrolled, it seems like Brookcreek could afford to pay $293 a month. Chairman Smith stated that the Board had no choice but to go with the approximate charge of $59 a child and if Brookcreek’s Board comes back and says they cannot do that, then we would have to make a decision of whether or not to close. Following discussion Chairman Smith moved to charge Brookcreek a prorated rent of the $58.77 per public housing slot unfilled not to exceed $1,293 a month which is the cost of the combined market rate rents for units 159, 160. The amount will be due and payable the first of the month following the date in the prior month that Brookcreek used for its reporting period. This assessment will begin January 1, 2007. Commissioner Gonzales seconded the motion. The motion carried.
C. Resolution 936: Review Bids and Approve Low Bidder for the Peterson Acres Expansion Project if Appropriate.
The bid opening for the Peterson Acres expansion was Thursday, September 21st. First Management was the lowest bidder at $729,700 followed by BA Green at $832,000 and GSR Construction at $1,090,000. The fees included in the bid were the building permit, water meter/development fees and inspection fees. The three alternates that were also bid were epoxy coating in lieu of ceramic; seal, coat and re-stripe existing parking and a 6 foot high cedar fence.
Commissioner Gonzales moved to accept First Management’s bid and alternate one, two and three. Commissioner Amison seconded the motion. The motion carried.
D. Receive Report on the Agency Wage Comparability Study.
Ms. Huppee explained the board last undertook major revisions to the agency’s salary and classification plan in 1997. Wage comparability studies should be undertaken periodically to determine if the salaries are competitive with community so that the agency can attract and retain qualified individuals The Board annually grants a 3% COLA each year when preparing the Operating Budget The second increase that the Board has been giving, except it was not given this year, is the step increase of the 2.5%. There is no provision for longevity pay. Ms. Huppee also pointed out that there are some assumptions about salaries of position; each position should be salaried at a level that reflects its comparability to other positions in the community, each position should be salaried as it reflects its value to the organization, there is a maximum salary that each position is worth. A salary plan needs to keep pace with inflation in order to maintain comparability and meritorious performance of staff should be rewarded.
This spring staff carried out a wage comparability study using six primary market agencies, Topeka Housing Authority, Kansas City Housing Authority, Wichita Housing Authority, The City of Lawrence, Douglas County and the State of Kansas. The results of this study were distributed to the Commissioners. The analysis shows where starting and ending salaries for the LDCHA fall in relation to the midpoint range for the comparable positions studied. The analysis also draws conclusion about the current salary and classification plan. However no recommendations are made at this time. Instead the Board is asked to study the report and discuss it in depth before proceeding with any decisions. Ms. Huppee also stated that the Board needs to make a decision before the 2007 budget is approved. When the Board made the decision not to grant the 2.5% merit pay raises in 2006 contingent upon finding out what the final subsidy was going to be, it is now known that the Board can afford to pay those 2.5% merit increases and the Board had said it would go back and award those. The Board’s consensus was to set a meeting or a study session to meet on this issue. The Board requested the Executive Director to get the PHAS scores for the agencies surveyed and the size of the agencies before its study session. The Executive Director will email commissioners to set up a study session date.
Following discussion Commissioner Gonzales moved to approve the 2.5% retroactive merit increases. Chairman Smith seconded the motion. The motion passed unanimously.
9. Calendar and Announcements.
The annual landlord/property managers’ appreciation luncheon will be held on October 26 from 12:00 -1:30 pm. The annual staff appreciation luncheon will be held November 2 from 11:45a.m. – 2:15 p.m. at Marcelis. The Commissioners will receive invitations to both events.
10. EXECUTIVE SESSION
A. Conduct Executive Director’s Annual Performance Review.
Chairman Smith recessed the Regular meeting at 7:45 p.m. for 30 minutes to conduct the Executive Director’s annual performance evaluation in Executive Session. The Board reconvened into Regular Session at 8:15 p.m. The Board gave the Executive Director an outstanding rating and awarded a 2.5% merit pay raise.
11. Adjournment.
There being no further items of business, Commissioner Amison moved to adjourn. Commissioner O’Keefe seconded the motion. The meeting was adjourned at 8:45 p.m.
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Chair Secretary Attest