FY2021 Proposed Budget in Brief

FY 2021 PROPOSED BUDGET

WE’RE IN THIS TOGETHER #ONENRHA WWW.NRHA.US

FY2021 BUDGET IN BRIEF

TABLE OF CONTENTS •

PURPOSE OF BUDGET IN BRIEF

2

•

GOALS AND VALUES

3

•

MESSAGE FROM THE EXECUTIVE DIRECTOR

4

•

VISION, MISSION AND INTRODUCTION

7

•

BOARD OF COMMISSIONERS

8

•

OPERATING BUDGET HIGHLIGHTS

9

•

RESOURCES AND EXPENDITURES

10

•

HOUSING PROGRAMS

•

DEVELOPMENT PROGRAMS

13

•

OTHER PROGRAMS

15

•

CENTRAL OFFICE COST CENTER (COCC)

17

1 | www.nrha.us

11

The intent of this document is to provide information about Norfolk Redevelopment and Housing Authority’s (NRHA) spending intentions, and the wider fiscal and economic picture.

PURPOSE OF BUDGET IN BRIEF Each year Norfolk Redevelopment and Housing Authority must submit a proposed budget to its Board of Commissioners (BOC). The Budget In Brief is a tool which provides the reader a synopsis of the detailed spending plan of the Authority.

Proposed Fiscal Year (FY2021) Consolidated Annual Operating and Capital Budget reaffirms NRHA’s: • Fiscal responsibility with limited resources while providing quality housing services, and • Commitment to ensuring affordable housing and the promotion of housing A fiscal year differs from calendar year by encompassing the 12-month period during which the annual operating budget applies (in this case beginning July 1, 2020 and ending June 30, 2021).

ONLINE The proposed budget is available on NRHA’s website at the following URL: http://www.nrha.us/nrha/aboutnrha/budget

AUTHORITY GOALS Quality Housing Opportunities for All

NRHA is committed to providing a continuum of housing options for households of all incomes seeking housing.

Sustainable Mixed-Income Communities

There is a need for a new housing model to create a healthy physical and social environment that would appeal to a wider range of incomes.

Strategic Business Approach

To meet changing requirements and to make the best use of our resources, we are developing a new approach for the delivery of products and services.

Community Support

Recognizing the interrelated nature of our mission, NRHA resolves to work to become a trusted partner that works collaboratively with key stakeholders and partners.

Budget in Brief | 2

MESSAGE FROM THE

EXECUTIVE DIRECTOR "In the midst of the turmoil (coronavirus), we created an initiative called #OneNRHA to serve as a reminder that by working together not only will we get through the frustration and adversity of this challenging time but we will come out the other side as stronger people and a stronger organization."

When former NRHA Executive Director John Kownack retired earlier this year, he left big shoes to fill, and it was truly an honor to have been selected to take over the reins of an organization of this caliber.

I come to NRHA from across the water at Hampton Redevelopment and Housing Authority, where I was Executive Director for nine years. I have nearly 20 years of experience that touches almost all aspects of the housing industry. I am thankful for this experience as it has helped prepare me to navigate the organization when the COVID-19 crisis hit just weeks after my arrival at NRHA. As have most companies and organizations in our nation, NRHA has taken financial hits from the unprecedented impact of the COVID-19 crisis. In response, NRHA is implementing strong financial and budgetary measures to maintain the Authority’s fiscal integrity.

To this end, I present a proposed consolidated capital and operating spending plan of $121 million for fiscal year 2021, reflecting a minimal increase of less than 1 percent when compared to the FY2020 Approved Budget. While the proposed budget provides continued funding of all services and programs, the Authority has taken the following budgetary actions in FY2020 that will continue into FY2021: ▶ ▶ A halt to all discretionary spending. ▶ ▶ A reduction of 40 full-time positions. This reduction to budgeted positions has been accomplished through attrition, a hiring freeze and the defunding of all vacant positions. If there is a demonstrated need to add positions back during FY2021, a budget amendment will be drafted and presented to the Board of Commissioners for their approval. ▶ ▶ Utilization of earnings from the operation of non-public housing apartments in the amount of $2 million. ▶ ▶ Utilization of $1.3 million from NRHA discretionary reserves to support Housing Choice Voucher administration, stop-gap funding for transportation services, construction services at Diggs Town and Grandy Phase VI and Specialized Maintenance services for federally-aided units.

3 | www.nrha.us

▶ ▶ Utilization of $3 million in reserves from discretionary and nondiscretionary funds to support the implementation of programs and services to our residents and clients.

Given the pandemic’s fluid nature and the speed with which it occurred, the FY2021 budget cannot capture all the COVID-19 effects.

Therefore, a budget amendment will be presented in the fall to address currently unknown impacts.

CONTINUING SUPPORT FOR NRHA RESIDENTS As we all know, the COVID crisis had everyone scrambling. One of my first concerns was for our residents, who might be among the hardest hit by this pandemic. While it was critical to cut expenses to maintain a balanced budget, we made sure that our residents’ needs came first.

While there have been operational changes, we’ve made every effort to continue to provide the programs, services and support that are so important for our residents.

To help soften the financial impact of the COVID crisis on our residents, NRHA has ceased evictions until further notice. In addition, fees are not being charged for late rent payments and transaction fees have been discounted for online rent payments.

Rental offices, tenant management council offices, family investment centers and common areas in our family units and midrises are closed to the public. However, residents are able to continue working with their Property Managers, Case Managers and other management representatives by phone and email. NRHA also opened a COVID hotline to answer questions and help residents navigate through these perilous times.

To support resident health and safety during the COVID crisis, the Agency has posted signage throughout all communities reminding residents to wear masks, wash hands and engage in social distancing.

In addition to NRHA offices, community basketball courts and playgrounds are closed. Senior and disabled residents are contacted for wellness checks. And for the safety of all concerned, NRHA transportation services and extracurricular activities are suspended until further notice.

NRHA continues its partnership with community agencies and nonprofits to help residents get access to food, health, emotional and educational support, housing, economic and other much-needed resources.

On a personal note, while safety measures are indeed paramount, they require a degree of self-sacrifice. Our employees will especially miss joining with our residents in celebrating NRHA’s graduating high 4 | www.nrha.us

school seniors, the Golden Years Prom, Cops and Curls, National Night Out and all the other special events that are so close to our hearts.

REDEVELOPMENT PROJECTS Over the past two years NRHA has been working toward development of a sustainable budget by documenting the long-term impacts of asset repositioning. In FY2021, an operational and organizational assessment will be performed. The assessment will provide a roadmap toward a stronger operational stance as assets are repositioned.

NRHA will continue acquisition and demolition efforts in Norfolk’s Wards Corner/Denby Park area. New for-sale home development will continue at The Homes at Bay Oaks in East Ocean View. In addition, infrastructure construction supporting new single-family homes at the former Moton Circle site in Broad Creek is expected to begin in FY2021.

The St. Paul’s area project has not been immune to COVID-19 impacts.

NRHA has suspended all 120-day relocation notices to residents until mid-October. Residents are still able to move out of the community, but on a voluntary basis only. Since the People First program remains operational, success coaching and supportive services continue to be available for Tidewater Garden residents. We are also working to identify creative tax credit strategies to assist in the development of off-site housing development.

MISSION CRITICAL OPERATIONS COVID-19 requires NRHA to be agile and flexible as we navigate a drastically changed and ever-evolving business landscape within the framework of state and city health and safety directives. Adopting a mission critical status allows NRHA to quickly identify essential tasks and develop new procedures to guarantee operational continuity. Yet, while the ways in which we conduct business are changing, there remain two constants: ▶ ▶ NRHA is open and continues to deliver essential services to our clients and the 13,000 residents in Norfolk who rely on us every day to provide safe, affordable and accountable housing. ▶ ▶ The health and safety of our employees, clients and residents remain the foundation of all business decisions.

Mission critical operations have given NRHA the opportunity to embrace the use of technology not only to support teleworking but also streamline internal processes. Remote desktop access, teleconferencing tools and training guides have been deployed to staff. An emergency texting service has been rolled out to guarantee all employees receive critical information in real time. Board of Commissioners meetings and public hearings are now live-streamed, increasing access to our residents and members of the community.

5 | www.nrha.us

The agency will continue to recognize these efficiencies beyond the COVID-19 crisis.

When and how NRHA will reopen to the public has not yet been determined and is dependent on the continued monitoring of conditions as well as state and city guidance. #ONENRHA While continuing to provide stellar service to clients and residents, NRHA transitioned from normal operations to mission critical in the space of one week. This could not have happened without our employees’ willingness and commitment to always do what needs to be done to serve NRHA’s residents. It takes remarkable people working together as a powerful team to accomplish the impossible. I am proud and humbled to be leading this amazing group.

In the midst of the turmoil, we created an initiative called #OneNRHA to serve as a reminder that by working together not only will we get through the frustration and adversity of this challenging time but we will come out the other side as stronger people and a stronger organization.

The cover of this FY2021 Budget Book perfectly captures the spirit of #OneNRHA.

RON JACKSON EXECUTIVE DIRECTOR

Budget in Brief | 6

VISION STATEMENT QUALITY HOUSING CHOICES IN NEIGHBORHOODS WHERE YOU WANT TO LIVE

MISSION STATEMENT TO PROVIDE QUALITY HOUSING OPPORTUNITIES THAT FOSTER SUSTAINABLE, MIXED-INCOME COMMUNITIES

INTRODUCTION Norfolk Redevelopment and Housing Authority (the Authority), was created by the City of Norfolk (the City) on July 30, 1940 under the provisions of the United States Housing Act of 1937. As a chartered political subdivision of the Commonwealth of Virginia, the Authority provides subsidized public housing, rental assistance and administers redevelopment and conservation projects within the City in accordance with state and federal legislation.

7 | www.nrha.us

BOARD OF COMMISSIONERS

Don Musacchio Chairman

Alphonso Albert Vice Chairman

Joe Dillard, Jr.

Rose Arrington

Richard Gresham

Ken Benassi

Suzanne Puryear

NRHA is headed by a board of seven commissioners appointed by Norfolk City Council who are responsible for determining policy and direction. NRHA Commissioners are residents of Norfolk and serve staggered four-year terms.

The board elects a Chairman and Vice Chairman as well as selects an Executive Director who is responsible for NRHA’s activities and operations.

To contact a Commissioner call 757.314.1679

Budget in Brief | 8

FY2021 OPERATING BUDGET HIGHLIGHTS THE CONSOLIDATED ANNUAL OPERATING AND CAPITAL BUDGET SET FORTH REVENUE AND EXPENDITURES

TOTAL FY2021 BUDGET - $121,394,621 Other Programs $6,196,503 | 5%

Housing $70,685,403 | 58%

Development $44,512,716 | 37%

THE DEVELOPMENT of the FY2021 Budget was an agency-wide effort and included input from the executive team, directors, managers and program staff. During the process, historical funding and expenditure patterns were analyzed along with seasonality and grant awards. The FY2021 Budget includes FY2019 actuals, as displayed on audited Financial Statements ending June 30, 2019, FY2020 Projected Actuals based on February Financial Statements and input from program staff.

9 | www.nrha.us

FY2021 TOTAL BUDGET WHERE DOES THE MONEY COME FROM?

City Grants $13,313,043 | 11%

Other Income $2,806,781 | 2%

Tenant Revenues $26,645,435 22% HUD Grants $74,305,670 | 61%

Program Reserves $4,323,692 | 4%

WHERE DOES THE MONEY GO?

Distribution of Admin Costs $4,727,031 | 4%

Capital and Multi Year $33,263,502 27%

Program Costs $36,507,316 30%

Other Admin $5,995,909 | 5%

Employee Benefits $3,374,420 | 3% General Expense $2,859,599 | 2%

Operation Cost $27,315,914 23%

*Distribution of Administrative Costs- Departmental share of agencywide costs that are allocated to the programs and projects which benefit from the services.

Approximately 82% of Distributed Administrative Costs are Labor and Fringe Benefits.

Labor (Authority Direct) $7,350,930 | 6%

Budget in Brief | 10

SUMMARY— Housing Division revenue and expenditures total $70,685,403 and are derived from HUD operating subsidies, grants, tenant income and other income. The operational shortfall of $1.58 million projected in FY2021 for the Federally Aided Program is recommended to be funded from Federally Aided program reserve. The Housing Choice Voucher Administration shortfall of $328,391 is recommended to be funded from privately managed reserves.

In FY2021, NRHA’s expenditure projections will fluctuate as NRHA continues to convert properties to the Rental Assistance Demonstration (RAD) program, as additional grant funding is awarded and as funding changes are considered in federally aided programs.

At the same time, NRHA’s focus will be on efforts to manage and maintain 3,277 assisted rental units as well as an average of 3,766 Housing Choice Vouchers for participants in multiple programs.

Capital Funds, under the umbrella of the Design and Construction Management Department, continues to provide funding for necessary capital improvements to the aging stock and infrastructure of public housing properties. NRHA must constantly replace roofing, heating systems, windows, doors, flooring, and other items in the federally assisted public housing communities..

11 | www.nrha.us

HOUSING PROGRAMS GOALS • Increase the availability of decent, safe and affordable housing.

• Improve the overall quality of the Housing Choice Voucher Program.

• Improve the quality of public housing programs using various strategies for renovation.

• Improve the quality of life and economic vitality.

• Engage more youth residents in organized programs and activities in an effort to provide an alternative to truancy and undesirable behavior.

HOUSING PROGRAMS PROPOSED REVENUE AND EXPENDITURES

Budget in Brief | 12

SUMMARY— Revenue for the Development

Division totals $44,512,716 which is derived from a blend of various funding sources. Shortfalls within the Development Division will covered from the following reserves: Privately Managed, Housing Opportunity, and Rehabilitation Reserve.

Expenditures for the division will focus on completing the 40 new single-family Homes at Bay Oaks Park located at 5th7th Bay Streets in Ocean View as well as completing infrastructure development plans for 74 new single-family homes at the former Moton Circle public housing community.

NRHA will continue managing the redevelopment component of assistedrental properties selected for the HUD Rental Assistance Demonstration program. The Development Division will continue programs that move first-time homebuyers to closing as wells as those that target acquisition of blighted properties based on negotiations with willing sellers. During FY2020, NRHA was awarded an Acquire, Renovate, and Sell rehabilitation (ARS) grant through the Virginia Department of Housing and Community Development (VHDA).

This grant will allow NRHA to acquire, renovate and resell undervalued homes throughout the City of Norfolk to first-time low-to-moderate income homebuyers.

The Capital Fund, which is a tool to improve aging public housing stock and infrastructure, has a budget of $20,126,610 to continue dwelling and community upgrades including lighting, porches, windows, site upgrades and appliance replacement.

NRHA provides oversight of communities managed by third party entities. Property management fees and operating expenses are covered through tenant rents. These properties produce net annual operating revenue that can be used for other NRHA programs. We anticipate using $2,019,568 in earnings to fund shortfalls in other Authority programs.

13 | www.nrha.us

DEVELOPMENT PROGRAMS GOALS • Continue renovation efforts in the Diggs Town and Grandy Village communities.

• Continue new infill single-family home construction throughout NRHA’s redevelopment and conservation areas and designated City of Norfolk neighborhood plan areas.

• Continue working with the City of Norfolk on development of the GEM Lot Disposition Pilot Program.

• Continue providing homeownership assistance through first-time homebuyer subsidies as well as homebuyer credit repair, education and counseling.

• Implement the ARS rehabilitation grant awarded through the Virginia Housing Development Authority.

• Provide a broader range of quality housing choices via the revitalization of Norfolk’s public housing communities through the HUD Rental Assistance Demonstration program.

• Complete development plans for 74 new single-family homes at the former Moton Circle public housing community. If approved and funded, infrastructure construction could begin during FY2021.

• In conjunction with the City of Norfolk, undertake a “refresh” of the Broad Creek Master Plan. Public meetings are scheduled to begin during spring 2020 that will help determine future target areas for development.

• Examine repositioning options for Oakmont North and Park Terrace.

• Continue rehabilitation work planned for 555 East Main Street as we continue to lease available office space.

DEVELOPMENT PROGRAMS PROPOSED REVENUES AND EXPENDITURES

Budget in Brief | 14

OTHER PROGRAMS SUMMARY - FY2021 expenditure needs for “Other Programs” total $6,196,502 and are comprised of ten unique programs which are not contained in either of the Authority’s two programmatic divisions. The revenue sources supporting these activities are derived from program revenue, a program’s own reserves, earnings from privately managed properties or fee for service agreements. Expenditures and funding gaps included in “Other Programs” are displayed below:

15 | www.nrha.us

PROGRAM DESCRIPTION - OTHER PROGRAMS NRHA Rent Project — Receives and disburses office rent payments from NRHA projects for space leased at 555 E. Main Street. Supports NRHA specific maintenance and janitorial services.

555 E Main Street Operations — Funds the operating costs and debt service of 555 E. Main Street.

Broad Creek Village — Includes the former sites of the Moton and Roberts Village public housing communities that have been cleared and are awaiting development.

COCC Administration — Reserves from the Central Office account are used to offset shortfalls from charging management fees as a target reduction measure in select programs.

COCC Specialized Maintenance — A collective group of specialized trades that perform maintenance services primarily to the public housing communities.

Core Business Service — A project to expense certain services that are determined to be an administrative burden to be equitably distributed to the programs including information technology, parking, the employee assistance program and telephone lines.

Communications and Government Relations — The department oversees development, planning, implementation and integration of all communications and marketing strategies in support of NRHA’s initiatives and coordinates liaison activities for legislative matters.

Disposition Support — NRHA provides maintenance of cleared land and temporary operations support to properties purchased and owned by NRHA. Executive Director Contingency Fund — Funds activities that support internal and external initiatives that are otherwise ineligible under federal programs.

Hampton Roads Ventures — NRHA provides management and services to Hampton Roads Ventures, LLC, including oversight management for loan servicing, asset management, compliance and reporting.

Project Development Financing — Dedicated to developing financial strategies and coordinating efforts to provide mixed-financing initiatives in the renovation, redevelopment or construction of housing.

Budget in Brief | 16

SUMMARY— Funding of the Central Office Cost Center (COCC) is derived from NRHA programs’ management fees, bookkeeping fees, asset management fees, and any program reserves and appropriations. FY2021 funding totals $14 million. The chart on the next page depicts the four classifications.

CENTRAL OFFICE GOALS • Common to all COCC functions this year will be the task of reassessing selected functions to improve efficiency and effectiveness.

EXECUTIVE & ADMINISTRATIVE OFFICE FUNCTIONAL AREA: • Administrative Services • Budget and Compliance • Communications and Government Relations • Executive Office • Finance • Human Resources • Information Technology

OTHER FUNCTIONAL AREAS: • 555 E. Main Street • Housing Division Oversight • Specialized Maintenance

17 | www.nrha.us

Budget in Brief | 18

PRODUCED BY THE BUDGE T AND COMPLIANCE DEPARTMENT

AND THE COMMUNICATIONS AND GOVERNMENT REL ATIONS DEPARTMENT