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Health and Human Services Agency (HHSA) recommending the Board, acting as the governing body of the El Dorado County Public Housing Authority (PHA):
1) Approve and ratify the HHSA Director’s signature on Agreement to Enter into a Housing Assistance Payment (AHAP) Contract 9193 with Mercy Housing California (Mercy), for the provision of rental subsidies to Mercy for five new construction housing units awarded through the US Department of Housing and Urban Development (HUD) Project Based Veterans Affairs Supportive Housing (VASH) Voucher Program, for the term of November 11, 2024, through May, 30 2027;
2) Authorize the HHSA Director, or Chief Assistant Director, to execute amendments, programmatic, administrative, and fiscal documents relating to AHAP Contract 9193, contingent upon approval by County Counsel and Risk Management, as applicable, which do not increase Net County Cost;
3) Authorize the HHSA Director, or Chief Assistant Director, to execute a Housing Assistance Payment (HAP) Contract with Mercy for the five new construction units subsidized by VASH, contingent upon PHA approval of the units, indicating the units have been completed in accordance with the terms and conditions outlined in the AHAP Contract; and
4) Authorize the HHSA Director, or Chief Assistant Director, to execute amendments, programmatic, administrative, and fiscal documents relating to the HAP Contract, contingent upon approval by County Counsel and Risk Management, as applicable, which do not increase Net County Cost.
FUNDING: 100% Federal funding provided through HUD for housing vouchers through the Project Based Voucher Program; the VASH vouchers act as subsidies for rent costs, supplementing the difference between a qualifying individual’s income and established fair market rents for the housing units.
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DISCUSSION / BACKGROUND:
The El Dorado County PHA operates under federal guidelines from HUD to provide a rental subsidy assistance program called the Housing Choice Voucher (HCV) Program (formerly known as Section 8 housing) that is tenant-based with a housing subsidy that is paid to the landlord directly by the PHA on behalf of the participating family. HUD allows PHAs to attach up to 20% of HCV funding toward Project Based Vouchers (PBVs) that are place-based rental subsidies attached to specific housing units whose landlord contracts with the PHA to rent those PBV assisted units to low-income families.
On April 29, 2021, the County Procurement and Contract’s Division released Request for Proposals (RFP) 21-918-009 on behalf of the PHA, consistent with HUD requirements for a competitive selection of qualifying projects to receive Project Based Veterans Affairs Supportive Housing (VASH) Vouchers awarded by HUD. The RFP contained sample agreements of both the HAP and AHAP contracts that were previously approved by County Counsel, prior to the release of the RFP. As a result of the RFP, the County received a single proposal from Mercy Housing of California (Mercy), proposing five VASH housing units that were determined to qualify for the project.
As outlined in the RFP, following the competitive solicitation award process, HUD requires the PHA and awarded Proposer(s) of new housing units to execute an AHAP contract prior to construction of the housing units. Upon completion of construction of the housing units and following PHA approval that the units meet HUD requirements, HUD requires the PHA and awarded Proposer execute a HAP contract.
On September 21, 2021, the Board awarded the RFP to Mercy and authorized HHSA to negotiate the AHAP and HAP contracts with Mercy for five VASH Vouchers (Legistar file 21-1407). These units will exist as part of new construction of affordable housing units in El Dorado County, which is still in the planning phase of Mercy’s El Dorado Haven housing development.
On October 31, 2024, Mercy sent an urgent request to HHSA to execute its pending AHAP contract that same week as the VASH rental subsidy contract was required by their lender to help Mercy secure financing for their El Dorado Haven development project. Mercy explained that should the AHAP contract not be executed in this timeline, Mercy may have to forfeit the project as their loan for the project would not close in time. Consequently, HHSA rushed the AHAP to County Counsel and Risk Management for approval and AHAP Contract 9193 was fully executed by Mercy and the HHSA Director on November 6, 2024. Following execution of the rushed AHAP contract, it was realized that the Board’s prior action awarded the RFP and authorized HHSA to negotiate the AHAP Contract with Mercy however did not provide signature authorization to the HHSA Director to execute the finalized AHAP contract.
HHSA quickly prepared this agenda item for presentation to the Board at the next available date to request that the Board approve and ratify the HHSA Director’s signature on AHAP Contract 9193, with a term effective November 11, 2024, through May 30, 2027, to allow Mercy’s affordable housing development project and PHA assigned VASH Voucher awards to move forward. Upon completion of Mercy’s El Dorado Haven housing development project, these five units will exist as part of affordable housing units for veterans experiencing homelessness or at risk of homelessness in the County.
ALTERNATIVES:
Should the Board decline to approve this recommendation, HHSA would need to nullify the fully executed AHAP Contract 9193, which would result in Mercy being in default of their loan agreement, jeopardizing the completion of their housing project. In turn, the PHA would lose five VASH Project Based rental units that are planned as affordable housing units for eligible veterans under the Mercy development project.
PRIOR BOARD ACTION:
09/21/21, 21-1407, HHSA VASH Voucher RFP 21-918-009 Award
OTHER DEPARTMENT / AGENCY INVOLVEMENT:
County Counsel, Risk Management, and Chief Administrative Office Procurement and Contract Division.
CAO RECOMMENDATION:
Approve as recommended.
FINANCIAL IMPACT:
There is no Net County Cost associated with this agenda item. Federal funding for VASH PBVs is provided by HUD for payments to landlords on behalf of program participants and is included in the annual HHSA budget for the Housing Choice Voucher Program. The administrative funding HHSA receives from HUD is based in part on the utilization rate of housing vouchers. Should the County not use the housing vouchers available, the lack of utilization could adversely impact the administrative funding for this program.
CLERK OF THE BOARD FOLLOW UP ACTIONS
Clerk of the Board to return one (1) Certified Minute Order to HHSA-grants@edcgov.us.
STRATEGIC PLAN COMPONENT:
Area of Focus: Safe and Healthy Communities
Priority: Develop a continuum of support and housing opportunities for unhoused individuals
Action Item: Continue Engagement with County departments, the homeless community, and countywide partners to develop effective strategies including for example, transitional housing.
CONTACT
Olivia Byron-Cooper, MPH, Director, Health and Human Services Agency