Department of Housing Preservation and Development

1 THE COUNCIL OF THE CITY OF NEW YORK Hon. Melissa Mark-Viverito Speaker of the Council Hon. Julissa Ferreras-Copeland Chair, Finance Committee Council Member Jumaane D. Williams Chair, Committee on Housing and Buildings Report to the Committee on Finance and the Committee on Housing and Buildings on the Fiscal 2018 Executive Budget for Department of Housing Preservation and Development May 11, 2017 Finance Division Latonia McKinney, Director Paul Scimone, Deputy Director Regina Poreda Ryan, Deputy Director Sarah Gastelum, Senior Financial Analyst Nathan Toth, Deputy Director Chima Obichere.

2 Unit Head Finance Division Briefing Paper Department of Housing Preservation and Development -2- Executive Budget Summary Expense Budget Overview. The Department of Housing Preservation and Development s (HPD or the Department ) Executive Budget for Fiscal 2018 provides for operating expenses of $ billion. The Department s Executive Budget reflects a decrease of $140 million compared to the Fiscal 2017 Adopted Budget of $ billion. Funding Sources. At about $ million, or 14 percent, only a small portion of HPD s Fiscal 2018 budget is comprised of City tax-levy funds. About $ billion, or 86 percent of the Department s expense budget, is supported by federal and state assistance programs.

3 Headcount. The budgeted headcount of 2,452 positions is funded at $169 million. The Executive Budget provides $ million in funding for 25 additional positions over the Fiscal 2018 Preliminary Budget for HPD. Some notable increases in staffing include: o The addition of 15 positions to support technology functions within the Office of Technology and Strategic Development (TSD), including four product managers, four project managers, three quality assurance specialists, two solutions architects, and two information modelers. The annualized cost of these 15 positions is $ million, which is baselined beginning in Fiscal 2018. o The addition of six positions to support the NYC15 Rental Assistance Initiative in connection with the Mayor s Supportive Housing Plan, which will create 15,000 units of supportive Housing over the next 15 years.

4 This funding enables the creation of a unit within the Division of Tenant Resources to support application processing and program participation. The Executive Budget includes $247,457 in Fiscal 2018 to support these positions. This funding grows to $454,074 by Fiscal 2021 as the program scales up. Executive Budget Changes. The Fiscal 2018 Executive Budget includes $ million for new needs in Fiscal 2018 and a net increase of $ million in other adjustments. These changes include: o $ million in new needs in Fiscal 2018 for costs related to shelter, maintenance, and repair costs for temporary Housing sites under the Three-Quarter House Taskforce; o $ million in new staffing needs for 25 positions; o $ million in other adjustments; and o $540,000 in savings in Fiscal 2018 and in the outyears by swapping seven City tax-levy funded positions with federal Community Development Block Grant (CDBG) funding.

5 Capital Budget. The Fiscal 2018 Executive Capital Commitment Plan includes $ billion in Fiscal 2017-2021 for HPD (including $ billion in City funds and $ million in Non-City funds). The Department s Executive Commitment Plan for Fiscal 2017-2021 is $ billion greater than the $ billion scheduled in the Preliminary Capital Commitment Plan to provide deeper affordability within the Housing New York plan. These additional funds will support the Development of 10,000 additional Housing units affordable to households with annual incomes of less than $40,000 of which, 5,000 will be dedicated to seniors and 500 to veterans. Finance Division Briefing Paper Department of Housing Preservation and Development -3- HPD Overview This report provides a review of HPD s Fiscal 2018 Executive Budget.

6 In the first section, the highlights of the $ billion Fiscal 2018 Expense Budget are presented, followed by a financial summary of HPD s budget. Major issues related to the Department s budget and relevant changes introduced in the Fiscal 2018 Executive Budget are discussed. The report then provides analysis and highlights of the Ten-Year Capital Strategy and the Fiscal 2017-2021 Executive Capital Budget. Appendix 1 reports the changes made to the Fiscal 2017 and Fiscal 2018 Budgets since Adoption of the Fiscal 2017 Budget. For additional information on the Department s budget and its various programs, please refer to the Fiscal 2018 Preliminary Budget Report for HPD at: HPD Financial Summary 2015 2016 2017 Executive Plan *Difference Dollars in Thousands Actual Actual Adopted 2017 2018 2017 - 2018 Spending Personal Services $141,640 $149,373 $168,689 $171,659 $177,963 $9,274 Other Than Personal Services 576,764 700,659 1,103,259 1,167,945 954,002 (149,257) TOTAL $718,403 $850,032 $1,271,948 $1,339,604 $1,131,965 ($139,983) Budget by Program Area Administration $33,592 $40,023 $45,351 $53,610 $47,751 $2,401 Administration Program 22,791 19,542 116,858 124,003 125,989 9,131 Development 53,624 159,534 445,469 469,640 283,049 (162,420)

7 Housing Operations - Section 8 Programs 460,243 474,494 479,177 491,446 494,057 14,880 Housing Operations- Emergency Housing 20,241 29,771 34,203 37,549 37,939 3,736 Housing Operations- Mgmt & Disposition 27,473 23,657 25,904 32,595 30,443 4,539 Preservation - Anti-Abandonment 6,970 7,935 9,573 8,547 4,589 (4,984) Preservation - Code Enforcement 32,240 31,807 39,183 40,214 36,986 (2,197) Preservation - Emergency Repair 21,681 21,634 29,325 32,547 30,591 1,266 Preservation - Lead Paint 14,460 13,100 14,131 16,629 14,363 232 Preservation - Other Agency Services 25,090 28,534 32,775 32,824 26,209 (6,566) TOTAL $718,403 $850,032 $1,271,948 $1,339,604 $1,131,965 ($139,983) Funding City Funds $70,622 $83,502 $186,655 $183,728 $130,760 ($55,895)

8 Other Categorical 8,522 6,144 1,711 21,704 1,932 221 Capital- IFA 15,756 17,550 23,356 20,156 23,448 92 State 699 15,164 2,416 21,922 1,075 (1,341) Federal - Community Development 149,661 232,272 563,857 578,859 469,127 (94,730) Federal - Other 470,752 491,615 491,887 509,194 503,619 11,732 Intra City 2,391 3,783 2,067 4,040 2,004 (63) TOTAL $718,403 $850,032 $1,271,948 $1,339,604 $1,131,965 ($139,983) Budgeted Headcount Full-Time Positions - Civilian 2,100 2,218 2,452 2,498 2,515 63 TOTAL 2,100 2,218 2,452 2,498 2,515 63 *The difference of Fiscal 2017 Adopted Budget compared to Fiscal 2018 Executive Budget.

9 The City s Fiscal 2018 Executive Budget totals $ billion, $ billion more than the Fiscal 2017 Adopted Budget of $ billion. City funds (City tax-levy and non-tax revenues) total $ billion when compared to the Fiscal 2017 Adopted Budget amount of $ billion. In comparison, HPD s Fiscal 2018 Executive Budget of $ billion represents a 12 percent decrease over its Fiscal 2017 Adopted Budget of $ billion and approximately one percent of the City s total budget. This decrease is primarily due to the budget realignment of Other Than Personal Services (OTPS) expenses that are not yet baselined. The vast majority (about $976 million or 86 percent) of the Department s expense budget is supported by federal and state assistance programs; HPD receives only about 14 percent of its total funding from City dollars, Finance Division Briefing Paper Department of Housing Preservation and Development -4- including tax-levy and inter-fund agreement.

10 Because the City s fiscal year and the state and federal fiscal years do not coincide, HPD reports only baseline funding and grants that it anticipates from federal and state assistance programs at the beginning of each year and makes adjustments as additional funds are received. Therefore, program areas that are primarily funded through non-City sources might align with the Fiscal 2017 Adopted Budget once the agency can confirm these allocations. The proposed budget is about $229 million more than HPD s Fiscal 2018 Preliminary Budget. Since the Fiscal 2017 Adopted Budget, several initiatives have impacted the Department s budget and headcount for Fiscal 2017 and Fiscal 2018.