10-03-88 agendaHOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 35
October 3, 1988
Issue Statement:
Authorization to enter into an agreement with the Metropolitan
Council HRA (Metro HRA) to coadminister the Section 8 Existing
Rent Assistance Program.
Back sound:
The September 27, 1988 action by the HRA authorized the
initiation of an independent Housing Voucher Program directly
with HUD through an Annual Contribution Contract (ACC). However,
the working relationship with Metro HRA remained to be resolved.
State statute allows the Metropolitan Council to operate housing
programs within Richfield if authorized by the City Council. The
Council took this action in 1975 and rescinded it in 1988 at the
request of the Richfield HRA. The agreements which allow the
Richfield HRA and Metro HRA to coadminister the program expire on
October 7, 1988.
The basis for the HRA request to Council was:
-The Richfield HRA subsidized the cost of local administration
by $22,000 during 1987 because it was not being reimbursed by
Metro HRA for all expenses incurred.
-Program size and continued growth demand more resources
such as office space, staff time, local subsidies.
-More local program control is desired, to permit better
management of existing rental housing resources.
-The Richfield program size and HRD staff expertise have
reduced the need to rely on the Metro HRA relationship as
originally conceived.
There are currently 379 Section 8 program participants in our
community. The program is distributed in the following
elements - 316 certificates, 63 vouchers. The certificate and
voucher programs are distinctly different. They do, however,
provide the same basic housing assistance.
The Metro Council HRA administered the Section 8 program for
Richfield; both certificates and vouchers were held in their
name. Once the City of Richfield indicated their intent to
conduct this program independently, Metro HRA retained the title
to the certificate and vouchers. The clients served were within
our community. Legally, the Metro HRA certificates cannot be
used within Richfield without .our permission. Part of our
negotiation with HUD and Metro HRA was so that these clients
could continue to be served.
On September 27, 1988 Richfield HRA authorized execution of the
Annual Contribution Contract which effectively transferred title
of 63 vouchers from Metro HRA to Richfield HRA. This leaves 316
certificates still held in title by Metro HRA. The City of
Richfield has received assurances that HUD will replace these
certificates with additional vouchers as they become available.
This replacement of Metro owned Section 8 certificates with new
HUD vouchers to be titled to Richfield will take approximately
two to six years. In the meantime, it is necessary for the City
to enter into an agreement with Metro HRA in a modified form to
continue servicing clients with Metro Section 8 certificates.
The agreement with Metro HRA includes:
-a scope of services;
-methods for compensation, payment, record keeping;
-prohibitions on discrimination in the delivery of services;
-data privacy requirements concerning clients;
-reimbursement for Richfield's administrative expenses at
the rate of $13.50 per unit per month (approximately
$50,000 a year). This is an increase from the $12.00
previously received. (The independent voucher program
will provide an additional $25,000 annually for
administration).
-the one for one voucher exchange based on the recently
received HUD allocation.
-the one for one certificate for voucher exchange as
additional allocations are secured by Richfield directly from
HUD (or as Metro HRA receives additional allocations from
HUD) .
-continued cooperation with HUD and the Metro HRA
provided that support for an independent Richfield
program and an allocation of additional resources
occurs.
Recommended Motion:
Adopt the resolution which:
1) authorizes an agreement between the Richfield HRA and
Metro HRA to coadminister a Certificate Section 8 Existing
Rent Assistance Program.
2) allows the phasing in of a Richfield HRA Voucher Section 8
Program in cooperation with Metro HRA and HUD.
3) requests the City Council to consider a resolution which
would permit Metro HRA to operate a housing program in
Richfield in cooperation with the Richfield HRA as herein
described.
The resolution will be provided at the HRA meeting.
Basis of Recommendation:
-Approximately 379 Richfield residents would be without
housing assistance starting October 7, 1988.
-An allocation to directly assist a portion (approximately
63 clients) of those in need has been secured.
-The Richfield HRA has the administrative capability to
administer more than 63 units of assistance.
-HUD is cooperating in providing Richfield an independent
program given funds that are available.
-Additional voucher allocation to assist the remaining
clients is not likely from HUD prior to mid 1989.
-Future allocations will have a size approximating the recent
allocation. Thus, it will take a few years for Richfield to
have a totally independent program.
-Metro HRA is cooperating in assisting in implementing an
independent program in Richfield.
-The City Council authorization to support Metro HRA, if
it occurs October 3, 1988, is contingent on continued
cooperation by HUD and Metro HRA.
-Partial independence sets a precedence for future allocation
and supports permitting the Richfield program to grow into
full independence.
-HUD has indicated that the Certificate and Voucher Programs
are distinct enough to allow a Richfield HRA Voucher and
Richfield HRA/Metro HRA Certificate program to co-exist.
-The HRA has authorized the ACC to initiate a Voucher Program
and needs the City Council to authorize a continuing
relationship with Metro HRA to serve all clients.
-The ACC and Metro HRA agreements will reduce the need for the
Richfield HRA to subsidize the program and, with future
allocations, totally eliminate the subsidies.
-The size of the Certificate Program (Metro HRA/Richfield HRA
component) is unlikely to grow.
Wlternative Recommendation:
Choose not to renew a cooperative relationship with Metro HRA.
However, if that course was selected, approximately 316 residents
would have to relocate from Richfield to continue to receive
assistance. An additional 63 residents may be without rental
assistance for a few months while an interim exchange period of
Metro HRA Voucher for Richfield HRA Voucher occurred.
Decision Mode•
The City Council is prepared to consider the HRA action at a
special meeting on October 3, 1988. Pending Council action,
staff would notify Metro HRA immediately to ensure that service
to residents would not be interrupted.
Respectfully submitted,
Jame Prosser
Exec ive Director