1. Budgets: Annual, Acquisition, and Capital Reserve May 2, 2012

2. How Webinar Technology Works Only Cathy and the presenters can be heard; all others are in listen-only mode. Cathy will send each participant a two-digit code to enter into your conference call. This will give us a chance to activate your audio for questions. The control panel on your screen gives you a place to click to “raise your hand.” That will signal Cathy that you have a question. If we don’t get to you during the session, we will follow up with you afterward.

3. Goals for Today Discuss the importance of budgeting to the health and sustainability of a nonprofit corporation. Review the difference between budgeting for operations and budgeting for acquisition or capital replacement. Learn from examples of two counties with excellent budgeting processes.

4. Today’s Presenters Janice Novotni, Executive Director, Fairfield Affordable Housing, Inc. Marti Goetz, General Manager, Miami Valley In-Ovations, Inc. Cathy Allen, Technical Assistance Consultant, Disability Housing Network

5. DHN Recommendations for Budgeting Housing Corporation Self-Assessment Tool: Cathy Allen

6. Self-Assessment Tool: Budgeting 4. The board determines the direction of the organization and takes primary responsibility for … c) funding strategy. 5. The Board creates, revises, and insures compliance with policies in the areas of planning, finance, community relations, and organizational operations. 6. The Board reviews the resource needs of the organization and approves a comprehensive funding strategy. 10. The Board reviews, approves and monitors the operating budget and financial plans for development activities.

7. Self-Assessment Tool: Budgeting 46. Goals for the current fiscal year and beyond are developed and approved by the Board with input of staff. 49. There is a realistic plan/strategy for matching human and financial resources with objectives.

8. Self-Assessment Tool: Budgeting 60. Housing Corporation has an operational budget covering at least the following categories: – Debt Service – Utilities – Reserve – Maintenance – Lawn Care – Management Overhead – Insurance – Property Taxes (If exemption not granted)

9. Self-Assessment Tool: Budgeting 61. Housing Corporation has an acquisition budget (Showing Revenue Sources) and tracking system; – Appraisals – Inspections – Earnest Money – Title Insurance – Closing Fees

10. Self-Assessment Tool: Budgeting 62. Housing Corporation has a capital replacement budget and reserve. 63. Housing Corporation has a renovation budget based on property inspection and special tenant accommodations. 64. Housing Corporation has a monthly report showing Budget/Expenses/Supporting Revenue

11. Duties of Nonprofit Board Members in Ohio Duty of Care – Requires “prudent” action Duty of Loyalty – Conflict of interest provisions Duty of Compliance – Requirement to follow laws, as well as policy Duty to Manage Accounts – Requirement to develop budget

12. Annual/Operating Budgets Janice Novotni, Fairfield Affordable Housing, Inc.

13. Snapshot of Fairfield Affordable Housing, Inc. 10 houses/operated on contract with Fairfield County Board of DD 5-unit house/operated on contract with Fairfield JFS for youth aging out of foster care. Low-Income, senior apartment building with 42 units that we own and manage. 2 staff: Full time executive director and Full time maintenance technician Fiscal year is calendar year.

14. Budget Process Overview Process begins in July of each year when director begins gathering information. Based on available estimates, director completes blank home budget form (house by house). Director then completes additional cost estimate forms. (Administration and maintenance.) Organizational budget is sent to FCBDD by October 15 for review and approval. FAH Board approves budget at November Board meeting

15. Revenue FAH’s only source of income is rent. Rent amount for each house is based on actual operating costs (house budget) Three sources of rent: – Tenants (amount set by county board) – Metropolitan Housing Authority subsidy – County Board subsidy Amounts change annually as part of budgeting process.

16. Costs – House by House Data gathering begins by requesting estimates from contractors and others… Can be difficult to project a year in advance. Home budget worksheet sent to CBDD. Many of the amenities we provide tenants are required by the county board per our contract – mowing, security systems, etc. 2 of the 10 houses are past their 15 year commitment

17. Costs – House by House, cont. We build mortgage costs into the rent amount for all homes, even those that are paid off. – Helps keep rent amounts even for tenants Cost of homeowners insurance also evenly divided among homes

18. Costs - Administration We make estimates for all of the various costs (see handout) – Salary and payroll taxes – Insurance – Office space and utilities – Office supplies – Accounting (monthly and annual reports/990/audits) – Postage and shipping 75% of the total administrative costs are apportioned to the 10 houses. 25% to the senior apartment building and JFS house.

19. Costs - Maintenance Maintenance includes: – In-house staff – Equipment – Supplies – Contractor fees for projects we cannot do internally. Home inspections conducted by Metro (@ $75 per home for homes that currently do not have a voucher)

20. Acceptance/Approval Process County board has opportunity to review and accept budget (October). FAH Board Approval (November). – Budget sent out in board packet before November meeting – Board members with questions generally call prior to the meeting – After approval, board reviews financial statements at quarterly board meetings

21. Capital Reserve, Acquisition and Renovation Budgeting Marti Goetz, Miami Valley In-Ovations

22. Snapshot of Miami Valley In-Ovations 77 properties, including: – 61 in Montgomery County – 11 in Miami County – 6 in Darke County Housing Manager is CB employee, on loan 100% to nonprofit – Fees paid by Miami and Darke CB’s to Montgomery County for salary reimbursement Repairs & ongoing maintenance done by CB Staff – Painting, carpentry, driveways etc are contracted out

23. Capital Reserve Budgeting Inspections are conducted on each property. Property Maintenance Spreadsheet is filled out for 1-3, 4-6 & 7-10 year schedule. (includes equipment & improvements – see next slide). Based on our estimated needs for the following years, the county board sets aside an amount for capital replacement. A separate contract is drawn between the nonprofit and the county board delineating responsibilities and shares of expenses.

24. Property Maintenance Schedule

25. Residential Development Residential Planning Committee, includes county board staff and nonprofit housing corporation staff. Meets twice per month. Discusses need for new development, vacancies, individual moves between properties, and provider agency and quality assurance concerns.

26. Community Capital Assistance Beginning with the 2013-2014 allocations, housing corporations will have to prepare a 4-year plan and submit specific requests for new purchases or for renovation/ rehabilitation. Housing corporation and county board plans together (Residential Planning Committee). Availability of residential support dollars is an important consideration.

27. Acquisition (County Board Funds) The nonprofit acquires homes for cash with reserves from a fund to purchase new homes. The amount available changes from year to year. The county board found that fronting funds to the nonprofit allows for flexibility in closing. The nonprofit then invoices the county board to replenish funds.

28. Renovation For accessibility, explore using Medicaid waiver environmental modification. Include grants from DODD (RRP and RHAP) in planning. HOME, CDBG, CHIP, etc. as applicable. Manpower is a consideration in such projects.

29. DHN Technical Assistance Funded by Ohio Developmental Disabilities Council. Provides DHN consultant who can: – Assist with self-assessment – Attend/facilitate board meetings – Attend/facilitate stakeholder meetings – Facilitate strategic planning retreats – Provide consultation on board development, policy development and housing operations

30. Upcoming Events Spring Regional Meetings: – East: May 8 – South: May 9 – West: May 15 – Northwest: May 16

31. Jacalyn Slemmer, Executive Director 614-595-4110 jacalynslemmer@disabilityhousingnetwork.org * Cathy Allen, Technical Assistance Consultant 419-732-1770 cathyallen@disabilityhousingnetwork.org www.disabilityhousingnetwork.org Staff Contacts

32. Questions and Answers