Arizona Department of Housing

FY 2020 FY 2021 FY 2022 ACTUAL ESTIMATE BASELINE

OPERATING BUDGET Full Time Equivalent Positions 3.0 3.0 3.0 Personal Services 201,600 185,600 185,600 Employee Related Expenditures 74,700 72,500 72,500 Professional and Outside Services 0 3,400 3,400 Travel - In State 6,100 8,100 8,100 Other Operating Expenditures 36,700 61,400 61,400 Equipment 3,100 1,500 1,500

OPERATING SUBTOTAL 322,200 332,500 332,500

SPECIAL LINE ITEMS Housing Trust Fund Deposit 15,000,000 0 0

AGENCY TOTAL 15,322,200 332,500 332,500 1/

FUND SOURCES General Fund 15,000,000 0 0 Other Appropriated Funds Housing Trust Fund 322,200 332,500 332,500 SUBTOTAL - Other Appropriated Funds 322,200 332,500 332,500 SUBTOTAL - Appropriated Funds 15,322,200 332,500 332,500

Other Non-Appropriated Funds 19,748,900 19,033,500 19,033,500 Federal Funds 96,437,500 75,806,300 75,806,300 TOTAL - ALL SOURCES 131,508,600 95,172,300 95,172,300

AGENCY DESCRIPTION — The department annually administers approximately $131,500,000 in federal and non- appropriated state housing and community development funds. The appropriated budget reflects a portion of the agency’s administration expenses. The department provides affordable housing opportunities in conjunction with the Arizona Industrial Development Authority. The department's responsibilities include the Office of Manufactured Housing.

FOOTNOTES 1/ General Appropriation Act funds are appropriated as a Lump Sum by Agency. ______

Operating Budget behavioral health facilities. Details on the specific projects funded from the Housing Trust Fund Deposit are provided The Baseline includes $332,500 and 3 FTE Positions from below: the Housing Trust Fund in FY 2022 for the operating budget. These amounts are unchanged from FY 2021. Behavioral Health Projects  $3,500,000 to develop a Secure Behavioral Health Residential Facility pursuant to the FY 2020 General Housing Trust Fund Deposit Appropriation Act footnote. The funding will be used

to develop a facility which provides residential The Baseline includes no funding in FY 2022 for the treatment to SMI individuals who have been Housing Trust Fund Deposit line item. This amount is resistant to treatment and ordered to the facility by a unchanged from FY 2021. court order. This funding has been transferred to the

Arizona Health Care Cost Containment System The FY 2020 budget included $15,000,000 from the (AHCCCS) to manage. AHCCCS will oversee facility General Fund. Of the $15,000,000 amount, the construction and operational funding, and the Department of Housing (DOH) plans to award $6,500,000 Department of Health Services (DHS) will be for SMI facilities and the remaining $8,500,000 for non- responsible for the licensing. The grant for this

FY 2022 Baseline 265 Arizona Department of Housing project was awarded to Recovery Health Partners in  $5,000,000 for the Foreclosure Prevention Program, September. which was created to assist landlords whose tenants  $3,000,000 for Transitional Housing for Homeless have been unable to pay rent due to the COVID-19 with a behavioral health emphasis. Funding will be pandemic. used by DOH and DHS on the renovation of an  $650,000 for Temporary Rental Assistance Program existing building on the State Hospital grounds in staffing. Central Phoenix. The facility will provide single rooms  $250,000 for Chicanos Por La Causa for their as transitional housing for homeless individuals statewide housing program that helps find housing diagnosed with a serious mental illness. DHS will for homeless individuals. select a licensed mental health services provider to  $2,000,000 for the Rental Eviction Assistance operate the facility. There was one respondent to Program, which provided rent assistance to renters this request for proposal. This proposal is under that had been negatively financially impacted by review. Covid-19.  $7,000,000 for the rental property owner Non-Behavioral Health Projects preservation fund to assist rental property owners  $3,000,000 for the development of Supportive during the Covid-19 pandemic. Housing Units for formerly homeless individuals. These monies will be combined with $7,000,000 in In addition to the monies allocated to the department by federal funding for a total of $10,000,000 for the the Executive, DOH received additional federal grants project, which will be built in multiple sites yet to be totaling $185,600,000. The uses are as follows: determined. Construction is expected to begin by winter 2021.  $32,000,000 to the state and $74,000,000 to local  $2,500,000 to fund Center for Hope Apartments as governments for community development block part of the Center for Opportunity project to combat grants. homelessness in the Tucson area. Funding will be  $22,000,000 to the state and $50,000,000 to local used to convert an existing hotel tower into 100 one- governments for homeless assistance/emergency bedroom affordable rental units for seniors and single solutions grants. residents. This project is expected to be completed by  $3,000,000 to local governments for public housing mid-calendar year 2021. operating funds.  $3,000,000 for Fort Whipple Homeless Veterans  $3,000,000 to local governments for tenant-based housing. DOH will select a developer to partner with rental assistance. the U.S. Department of Veterans Affairs to redevelop  $700,000 to local governments for supportive 6 former officers' quarters on the Fort Whipple housing for persons with disabilities. Veterans' Affairs campus in Prescott and build  $100,000 to the state and $800,000 to local housing units on adjacent vacant land. The governments for housing opportunities for persons redeveloped facilities will provide housing for with AIDS. homeless veterans. Construction is expected to begin

by winter 2021. The federal Consolidated Appropriations Act of 2021

authorized $25,000,000,000 in COVID-related rental Other Issues assistance nationwide. These monies will be disbursed to states and large local governments using the same

methodology as the Coronavirus Relief Fund (CRF). Each COVID-Related Spending state is guaranteed a minimum funding amount of $200,000,000 combined between all jurisdictions. If As part of the state response to COVID-19, the Executive Arizona's allocation is in the same proportion as its CRF has allocated monies for state agency-related programs. allocation from the CARES Act, Arizona and its local As of October 2020, the Executive's spending plan jurisdictions would receive about $470,000,000 in rental included a total of $20,150,000 for Department of assistance under the Consolidated Appropriations Act of Housing related programs. This entire amount is from the 2021. Crisis Contingency Safety Net Fund. The uses are as follows:

 $5,000,000 for assistance to homeless shelters.  $250,000 for the St. Vincent de Paul Rental Assistance Program.

FY 2022 Baseline 266 Arizona Department of Housing FY 2020 FY 2021 SUMMARY OF FUNDS Actual Estimate

Consumer Recovery Fund (HDA3090/A.R.S. § 41-4041) Non-Appropriated

Source of Revenue: Fees charged to dealers and brokers of manufactured homes, mobile homes, or factory-built buildings designed for residential use. Purpose of Fund: To provide consumer and license education in connection with the manufactured housing and factory-built building industry and to make payments on damage claims filed by consumers of these types of residential buildings. Funds Expended 273,300 8,600 Year-End Fund Balance 596,200 690,800

Crisis Contingency and Safety Net Fund (HDA3240/A.R.S. § 41-110) Non-Appropriated

Source of Revenue: Legislative appropriations, public or private gifts, grants and donations. Expenditures are not displayed to avoid double counting the General Fund. Purpose of Fund: Monies in the fund may only be distributed by the Governor for the following forms of economic assistance during a state of emergency: 1) housing assistance; 2) services for homeless persons; 3) economic assistance to small businesses with less than 50 employees, non-profit organizations, and health care providers; and 4) monies for food bank operations. Funds Expended 0 0 Year-End Fund Balance 2,594,700 2,594,700

DPS-FBI Fingerprint Fund (HDA2159/A.R.S. § 41-1750) Non-Appropriated

Source of Revenue: Revenues include fees collected from fingerprint clearance cards. Purpose of Fund: Revenues are transferred to the Department of Public Safety (DPS) to process fingerprint clearance cards. Funds Expended 6,200 5,400 Year-End Fund Balance 1,500 2,000

Federal Funds (HDA2000/A.R.S. § 35-142) Non-Appropriated

Source of Revenue: Federal Funds for affordable housing programs. Purpose of Fund: To be expended as stipulated by federal statutes authorizing the federal grants. Funds Expended 96,437,500 75,806,300 Year-End Fund Balance 7,851,500 18,095,200

Federal Grants - American Recovery and Reinvestment Act (ARRA) (HDA2999/A.R.S. § Non-Appropriated 35-142) Source of Revenue: One-time Federal Funds allocated by the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). Purpose of Fund: One-time Federal Funds to be used by the department for the weatherization of homes, energy efficiency and usage reduction, and appliance rebates. Funds Expended 0 0 Year-End Fund Balance 978,800 1,078,800

Housing Program Fund (HDA2200/A.R.S. § 41-3957) Non-Appropriated

Source of Revenue: Fees received from the following programs: private activity bond (underwriting and hearings), low-income tax credit (application, monitoring and reservation fees), fees charged from conferences and workshops, fees from the Section 8 project-based contract administration program, administrative reimbursements from Federal Hardest Hit Funds, utility grants from Southwest Gas for the state's Weatherization Program, and services fees related to the Office of Manufactured Housing. Purpose of Fund: To pay the costs of administering the programs from which the deposits are received and for other department programs. Funds Expended 8,042,500 7,572,400 Year-End Fund Balance 21,005,800 26,388,800

FY 2022 Baseline 267 Arizona Department of Housing FY 2020 FY 2021 SUMMARY OF FUNDS Actual Estimate

Housing Trust Fund (HDA2235/A.R.S. § 41-3955) Appropriated

Source of Revenue: The Housing Trust Fund receives its $2,500,000 annual unclaimed property deposit after the first $2,000,000 in unclaimed property revenues are distributed to the Department of Health Services Seriously Mentally Ill Housing Trust Fund. The fund also receives monies from loan repayments and interest from the State Treasurer. A.R.S. § 33-751 redirects fees from the Arizona Industrial Development Authority's single-family mortgage program from the department's ISA and IGA Fund to the Housing Trust Fund. Purpose of Fund: The appropriated portion pays for administration expenses and may not exceed 10% of the Housing Trust monies. Please see the Non-Appropriated portion of the fund for additional information. Funds Expended 322,200 332,500 Year-End Fund Balance 51,132,000 58,182,400

Housing Trust Fund (HDA2235/A.R.S. § 41-3955) Non-Appropriated

Source of Revenue: The Housing Trust Fund receives its $2,500,000 annual unclaimed property deposit after the first $2,000,000 in unclaimed property revenues are distributed to the Department of Health Services Seriously Mentally Ill Housing Trust Fund. The fund also receives monies from loan repayments and interest from the State Treasurer. A.R.S. § 33-751 redirects fees from the Arizona Industrial Development Authority's single-family mortgage program from the department's ISA and IGA Fund to the Housing Trust Fund. Purpose of Fund: The non-appropriated portion of the fund is used for the operation, construction, or renovation of housing facilities for low-income households. The Legislature may transfer monies from the fund to the Housing Development Fund for use on housing projects around state prisons. Please see the Appropriated portion of the fund for additional information. Funds Expended 7,228,800 5,192,100 Year-End Fund Balance 0 0

IGA and ISA Fund (HDA2500/A.R.S. § 35-142) Non-Appropriated

Source of Revenue: Reimbursements to the department from the Arizona Department of Economic Security for the administration of the Federal Low-Income Housing Energy Assistance Program (LIHEAP). Purpose of Fund: To enable the department to administer a portion of the LIHEAP which provides direct weatherization and energy improvements to homes owned by low-income homeowners. Funds Expended 3,983,500 5,872,400 Year-End Fund Balance 6,100 325,900

Manufactured Housing Cash Bond Fund (HDA3722/A.R.S. § 41-4029) Non-Appropriated

Source of Revenue: Cash deposits made by housing manufacturers and installers prior to the granting of an original license. Applicants must make a cash deposit for each branch location of their operation. Purpose of Fund: To compensate consumers in cases where a licensee fails to perform sales or installation agreements or repairs under warranty; and to make payment to the department if the licensee fails to pay any fees or costs owed. Funds Expended 0 0 Year-End Fund Balance 559,700 582,900

Mobile Home Relocation Fund (HDA2237/A.R.S. § 33-1476.02) Non-Appropriated

Source of Revenue: Assessments collected from mobile home owners who do not own the land upon which the mobile home is located and interest earnings. Once the fund balance reaches $8,000,000, assessments will no longer be collected and the only revenue will be from interest. Assessment would resume when the fund balance at the end of a fiscal year is less than $6,000,000. Purpose of Fund: To pay for relocations due to rental increases and to pay premiums and other costs of purchasing insurance coverage for tenant relocation costs due to a change in property use pursuant to A.R.S. § 33-1476.01. If such insurance is not available, or if the insurance costs exceed the amount available from the fund, the fund is used to make direct payments for tenant relocation costs. Funds Expended 214,600 382,600 Year-End Fund Balance 7,700,400 7,477,800

FY 2022 Baseline 268 Arizona Department of Housing