Legislature(2015 - 2016)SENATE FINANCE 532
02/13/2015 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Housing Finance Corporation Fy 16 Budget Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
February 13, 2015
9:03 a.m.
9:03:35 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:03 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Donny Olson
MEMBERS ABSENT
Senator Lyman Hoffman
ALSO PRESENT
Bryan Butcher, Chief Executive Officer and Executive
Director, Alaska Housing Finance Corporation, Department Of
Revenue; Les Campbell, Budget Director, Alaska Housing
Finance Corporation.
PRESENT VIA TELECONFERENCE
Mark Romick, Planning Director, Alaska Housing Finance
Corporation.
SUMMARY
PRESENTATION: ALASKA HOUSING FINANCE CORPORATION FY 16
BUDGET OVERVIEW
9:04:25 AM
Co-Chair MacKinnon reminded those in attendance to silence
all electronic devices.
^PRESENTATION: ALASKA HOUSING FINANCE CORPORATION FY 16
BUDGET OVERVIEW
9:04:39 AM
BRYAN BUTCHER, CHIEF EXECUTIVE OFFICER AND EXECUTIVE
DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, DEPARTMENT OF
REVENUE, introduced himself.
Co-Chair MacKinnon felt the presentation should be limited
to 30 minutes.
Mr. Butcher discussed the PowerPoint, "Alaska Housing
Finance Corporation; Budget Presentation to Senate Finance
February 13, 2015" (copy on file).
Mr. Butcher looked at slide 1, "Mission":
To provide Alaskans access to safe, quality,
affordable housing.
Mr. Butcher displayed slide 2, "2014 Highlights":
-AHFC's dividend increased from $7.5 million to $19
million
-Well positioned to meet future challenges
-Federal sequestration, business improvement
plan, home loan activity
-Affordable housing
-AHFC rating maintained AA+ since Jan. 2011
Co-Chair MacKinnon queried the reason behind the dividend
increase. Mr. Butcher replied that the reduction of Fanny
Mae and Freddie Mac interest rate had reduced the amount of
AHFC loan activity. He stated that AHFC could not receive
cheap tax exempt financing. The corporation had been
proactive to make connections with the banks and mortgage
companies to provide information about available loans.
There was over $500 million of mortgage activity over the
previous year, which was combined with prepayments of
refinancing.
Senator Bishop wondered if the Dodd-Frank rule affected the
reduction of loans. Mr. Butcher replied that the Dodd-Frank
rule had affected the AHFC, but did not know if it had
affected the bottom line. He shared that there was some
confusion about how housing finance agencies across the
country were applied against Dodd-Frank. There was some
examination of the exact applications of Dodd-Frank.
Senator Bishop stated that some builders were not able to
receive loans, because the Dodd-Frank rule required too
much up-front equity.
9:09:57 AM
Mr. Butcher discussed slide 3, "Performance Measure:
Increase number of loans." He noted that the years before
2008 were very robust, and dropped after 2008. He remarked
that 2014 saw the only substantial increase in recent
years.
Mr. Butcher highlighted slide 4, "Performance Measure:
Maintain high performer percentages in AHFC owned and
managed Housing." He stated that the Public Housing
Assessment System (PHAS) measured the level of vouchers,
responding to complaints, and maintaining performance
standards. He stressed that AHFC was awarded the status of
"high performer." He remarked that 2013 and 2014 were
recognized as having greater performance than years prior.
Mr. Butcher displayed slide 5, "Operations Component." He
stressed that the AHFC operating budget was a "status quo
budget." He noted that the cost of living increase was
integrated into the budget. He remarked that most of the
AHFC funds were federal funds; approximately two-thirds of
its employees were working in the Public Housing Division
funded by HUD funds. The remaining funds were corporate
funds, and he stressed that AHFC was self-supporting by
using revenue to pay for the corporation operations.
Mr. Butcher addressed slide 6, "AHFC Full Time Position
Count." He remarked that there had been a small full-time
position reduction over ten years, with the same count
maintained for approximately five years. He remarked that
after the merger in 1993, AHFC had a position count reduced
by approximately 70 positions. He remarked that the merger
was successful, because the financial and social aspects
had worked well together.
9:12:42 AM
Mr. Butcher discussed slide 7, "2014 Alaska Housing
Assessment":
Report Reveals Housing Stock Shortcomings:
FY 14 saw the release of AHFC's 2014 Alaska
Housing Assessment, a 1,400 page report authored
by Cold Climate Housing Research Center in
Fairbanks.
The report is a statewide, regional and community
look at major factors affecting Alaska's housing
stock. It includes data from professional energy
audits conducted on approximately 30 percent of
occupied housing in Alaska. A recent abundance of
energy data compile on AHFC's Home Energy Rating
Software combined with identification of Alaska's
unique energy challenges, led to an increased
focus on those issues.
Some of the Highlights in the Report:
-More than 15,000 homes in Alaska are overcrowded
or severely overcrowded (more than one person per
room), twice as high as the national average.
-More than 75,000 households in Alaska (31
percent), are cost-burdened, (meaning households
are spending more than 30 percent of total income
on housing costs).
-Nearly 20,000 homes have the lowest possible
energy rating, a 1 Star.
-On average, Alaska residents use twice as much
energy as do households in other cold climates of
the U.S.
-36 percent of Alaskans rent, 64 percent are
homeowners.
-There are 252,920 occupied housing units in
Alaska.
More than 15,000 homes are overcrowded
Mr. Butcher looked at slide 8, "Energy Programs":
Over 40,000 homes more energy efficient since 2008.
Nearly 1 in 3 Alaskan homes have had an energy rating.
Home Energy Rebates:
22,678 home rebates averaging $6,389.
38,211 as-is ratings paid.
New Home Energy Rebates:
2,633 Five Star Plus Homes
69 Six Star Homes
Education:
Energy education classes reached 1,900 Alaskans in
FY2014.
AKEnergySmart energy efficiency curriculum developed
for Alaska's K-12 students
Weatherization Program:
15,603 homes completed in
185 communities.
9:15:01 AM
Co-Chair Kelly queried the quantifiable results of
education on energy use reduction. Mr. Butcher replied that
the education had engaged Alaskans in making good decisions
with the available programs. He remarked that the education
process revealed more energy reduction methods than merely
triple-pane windows and better doors. He remarked that
Mr. Butcher discussed slide 9, "Energy Programs":
WEATHERIZATION PROGRAM
Income-based, home energy efficiency improvements
provided for homeowners and renters.
Legislative appropriations:
-FY2008 $200 million
-FY2012 $62.5 million
-FY2013 $30 million
-FY2014 $30 million
-FY2015 $27.5 million
Total $350 million
HOME ENERGY REBATE PROGRAM
Rebates offered up to $10,000 for existing homes;
$10,000 for 6 Star and $7,000 for 5 Star Plus for new
homes.
Legislative appropriation:
-FY2008 $100 million
-FY2009 $60 million
-FY2012 $37.5 million
-FY2013 $20 million
-FY2014 $20 million
-FY2015 $15 million
Total $252.5 million
Co-Chair MacKinnon queried the remaining unallocated funds
for the program. Mr. Butcher replied that of the $350
million in the Weatherization Program, approximately $319
million was currently obligated to projects. He explained
that contracts were generally awarded to the weatherization
providers in March and April, which was right before the
construction season. He explained that the unobligated,
remaining funds were from the FY 15 budget, which was
expected to be paid in the fourth quarter of the fiscal
year. He explained that at the time of the initiation of
the Home Energy Rebate Program, the governor and
legislature were told that AHFC would manage the program.
He explained that 18 months were given to make changes to a
home, after an initial energy rating was conducted. At the
end of the 18 months, AHFC would no longer manage the
program. He stated that an average rebate was approximately
$6300 for a homeowner. The management over 18 months was a
challenge, because it carried over numerous fiscal years.
He shared that there was about $29 million in remaining
unallocated funds. He remarked that there was a reduction
in the current year's request, because there were a number
of individuals who had not returned their paperwork.
Co-Chair MacKinnon stressed that Alaska was facing a $3.5
billion revenue shortfall, and remarked that FY 16 may face
a similar budget issue, if oil prices remained the same.
She queried the number of AHFC employees that were involved
in implementing the two programs, and what would occur if
there was program suspension. Mr. Butcher replied that
contractors were informed that the programs were not
indefinite. He stated that there were two further positions
and a number of temporary employees that may be reduced.
9:20:35 AM
Co-Chair MacKinnon wondered if it was possible for the
programs to be quickly reinitiated. Mr. Butcher replied in
the affirmative. He furthered that the greatest issue would
be with the weatherization contractors. He stressed that
all of the weatherization was done externally. He remarked
that the Weatherization Program was traditionally $2
million to $8 million of state funds and $1.5 million of
federal funds.
Co-Chair MacKinnon wondered if there had been an increase
or decrease in the number of Alaskans applying for the
programs. Mr. Butcher replied that the weatherization need
was continually imperative, because of the high number of
low quality, low income housing in the state. He felt that
the program could continue for ten more years with many
homes in the program. There was a decrease in the number of
applicants for the rebate program from 2008 through 2010,
but maintained the same level for the prior three years. He
felt that a possible increase in the cost of oil may
motivate some individuals to apply for the rebate program.
Mr. Butcher highlighted slide 10, "Loan Programs":
Single family
Multi-family
Other
Mr. Butcher explained that most of the loans were single
family category. He stated that most of the loans were
first-time home buyers, veteran's loans, and rural loans.
He stressed that AHFC also provided a significant number of
multi-family loans across the state.
Mr. Butcher addressed slide 11, "Loan Purchase Activity."
He remarked that there was a recent increase in loan
purchase activity. He noted that there was a slight
reduction in the multi-family loans, because of the
difficulty in building affordable multi-family housing in
Alaska. The cost of building multi-family housing far
exceeded the return. He remarked that AHFC was working with
many communities to find a solution to that issue.
Senator Bishop appreciated the efforts of AHFC to examine
alternate approaches to serve the housing needs in rural
Alaska.
Mr. Butcher discussed slide 12, "Public Housing":
Mainly funded by U.S. Housing & Urban Development
(HUD)
AHFC owns 1,612 public housing units; and distributes
more than 4,300 vouchers in 13 locations that provide
rental assistance - $2.5 million/month.
AHFC is a Moving to Work agency
9:25:50 AM
Mr. Butcher highlighted slide 13, "Public Housing Stats."
Demand for Affordable Housing Continues to Grow
The pressure on public housing continued with
Anchorage, Fairbanks, and Juneau showing the
longest waiting lists for affordable housing.
AHFC closed a number of waiting lists during the
year in an effort to more efficiently work
through the lists, re-opening when the situation
became more manageable and predictable for those
in need of assistance. The measure proved
successful bringing the total number of
households on the waiting lists down from 6,304
in FY 13 to 5,584 in FY 14.
Mr. Butcher discussed slide 14, "Voucher Stats."
Voucher Program Demand Remained Strong in FY 14
The Housing Choice Voucher Program assists over
6,000 people each year in securing safe and
affordable housing, and contributes about $30
million per year to private sector landlords. In
FY 13 AHFC lost $1.8 million (222 Housing Choice
Vouchers) in federal funding due to
sequestration. Funding was partially restored in
March 2014 enabling AHFC to resume issuing
vouchers that had been on hold since March 2013.
The need for assistance is especially severe in
Anchorage, Fairbanks, and Mat-Su.
Mr. Butcher looked at slide 15, "AHFC's FY2016 Capital
Budget Request." He stated that the slide displayed the
first new affordable housing that AHFC had worked with as a
participant. Ridgeline Terrace and Susitna Square were 88
new units currently in construction. He stated that there
was previous legislation that allowed AHFC to develop a
subsidiary: The Alaska Corporation on Affordable Housing.
The subsidiary provided AHFC the statutory flexibility to
work with non-profits and for-profit entities to collect
the layer of financing that were necessary to building
affordable housing. He stressed that there were
approximately ten separate layers of financing. The project
should be complete by the end of 2015. He hoped that
similar projects would occur in other communities in the
state.
LES CAMPBELL, BUDGET DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION, highlighted slide 16, "FY2016 Capital Budget
Program." He stated that he would provide further detail to
some of AHFC's budget requests.
9:30:25 AM
Mr. Campbell addressed slide 17, "Rental Assistance to
Victims -- Empowering Choice Housing Program (Department of
Public Safety)":
Reference Number: 54796
FY2016 Request: $2,000,000 AK Permanent Fund Dividend
Purpose: Provide a referral-based transitional housing
assistance program, the Empowering Choice Housing
Program (ECHP), designed to meet the housing needs of
victims of domestic violence and sexual assault.
Projected outcome:
-Rental assistance for up to 254 households
statewide;
-Provides voucher assistance in the twelve
communities.
Co-Chair MacKinnon remarked that the program may have some
statutory issues regarding the felon funds. She shared that
there was once an issue of victims of domestic violence and
sexual assault with others that were trying to receive
services. She remarked that AHFC had once approached the
legislature to allow for all Alaskans to receive access to
housing. Mr. Butcher replied that he did not have any
details on the decision. He explained that the shelters
worked with AHFC to identify those with the greatest need.
Co-Chair MacKinnon encouraged a conversation with OMB to
identify a different funding source. Mr. Butcher agreed.
Mr. Campbell continued to discuss slide 17. He stated that
the program was a referral-based program.
Mr. Campbell highlighted slide 18, "Housing Loan Program:
Teacher / Health / Public Safety."
Reference Number: 49395 (Allocation)
FY2016 Request: $3,691,400 Corporate Dividends
Purpose: Provide gap funding to increase homeownership
and/or rental units.
Projected outcome:
-Increase Teachers, Health Professionals, or
Public Safety housing in rural Alaska
Mr. Campbell discussed slide 19, "Housing Loan Program:
VPSO":
Reference Number: 49369 (Allocation)
FY2016 Request: $1,000,000 Corporate Dividends
Purpose: Provide gap funding to increase homeownership
and/or rental units.
Projected outcome:
-Adding units for Village Public Safety Officers
(VPSO); and
-Increasing VPSO retention through housing
development.
9:35:09 AM
Senator Bishop wondered if the recent reductions in the DPS
budget for VPSOs would affect this request. Mr. Campbell
replied that AHFC worked with DPS, and remarked that DPS
could apply for the funding. He remarked that DPS would not
apply for the funds, if there was no use for the funds.
Mr. Butcher furthered that AHFC worked with the communities
to ensure that various public workers like VPSOs and school
teachers may be able to be housing in the same unit.
Co-Chair MacKinnon wondered if the dividend would increase
to the state, if the legislature denied the requests for
VPSO and teacher housing. Mr. Butcher responded that there
would be no effect on the dividend. He furthered that the
program was currently paid through the dividend that was
already allocated.
Co-Chair MacKinnon surmised that AHFC provided a dividend,
and then recommended a way to spend the dividend. Mr.
Butcher agreed.
Mr. Campbell displayed slide 20, "Cold Climate Housing
Research Center":
Reference Number: 6351
FY2016 Request: $1,000,000 Corporate Dividends
Purpose: Conduct research, analysis, information
dissemination, and interchange among members of the
industry, as well as between the industry and the
public.
Projected outcome:
-Conduct research, analysis, information
dissemination and interchange among members of
the industry, and between industry and the
public;
-Gather data and perform analysis of
geographically diverse area energy-efficient
designs for homes; and
-Monitor homes for energy usage, comfort levels,
durability, occupant health and economic benefits
of efficiency features.
Mr. Campbell discussed slide 21, "HUD Federal HOME Grant
Program":
Reference Number: 6347
FY2016 Request: $750,000 State General Funds
$3,750,000 Federal Receipts
Purpose: Expand supply of affordable, low- and
moderate- income housing and strengthen ability of
State to design and implement strategies to achieve
adequate supply of safe, energy-efficient and
affordable housing.
Projected outcome:
-Develop affordable rental housing by funding
development gap for three rental projects or
about 30 units;
-Assist 35 homebuyers to achieve homeownership
for lower-income families by providing down
payment and closing cost assistance; and
-Preserve low-income homes through a moderate
rehabilitation.
Mr. Campbell addressed slide 22, "Hooper Bay Family
Housing":
Low Income Housing tax Credits (LIHTC) / HOME /
Supplemental Housing Grant AVCP Sponsor 2009
Mr. Campbell discussed slide 25, "HUD Capital Fund Program
(CFP)":
Reference Number: 6342
FY2016 Request: $2,500,000 Federal Receipts
Purpose: Renovate and modernize public housing rental
units statewide.
Projected outcome:
-Modernize public housing rental units;
-Affordable Housing Development
-Code compliance; and/or
-Conduct energy audits.
9:40:11 AM
Mr. Campbell discussed slide 23, "Federal and Other
Competitive Grants":
Reference Number: 6348
FY2016 Request: $3,000,000 Federal Receipts
$1,500,000 State General Funds
Purpose: Allow AHFC to apply for HUD, other federal
agency, and private foundation grants that target
housing needs and supportive services of low-income
and groups with needs such as senior citizens, those
with mental, physical, or developmental disabilities,
or homeless Alaskans.
Projected outcome:
-HUD Supportive Housing;
-Housing Opportunities for Persons With AIDS
(HOPWA);
-Grant Match Program; and
-OneCPD HUD Technical Assistance Program
(Community Planning Development); and
-Section 811 Housing Program for Persons with
Disabilities.
Mr. Campbell highlighted slide 24, "Competitive Grants for
Public Housing":
Reference Number: 6350
FY2016 Request: $750,000 Federal Receipts
$350,000 State General Funds
Purpose: Allow AHFC to apply for HUD, other federal
agency, and private foundation grants that target
housing needs of low-income and groups with special
needs who live in public and/or assisted housing.
Projected outcome:
-Match requirements for federal grants such as:
-Family Self-Sufficiency (FSS) Coordinator and
case workers;
-Senior Services Coordinator; or
-Resident Opportunities and Supportive Services
(ROSS) grant.
-Match for operations of services, such as after-
school programs, public housing developments and
resident computer training labs.
9:40:58 AM
Mr. Campbell looked at slide 26, "AHFC Energy Programs -
Weatherization":
Reference Number: 50683 (Allocation)
FY2016 Request: $6,600,000 State General Funds
$1,500,000 Federal Receipts
Purpose: Provide cost-effective energy improvements to
homes occupied by low-income families throughout the
state.
Projected outcome:
-Reduce household operating costs of the
resident;
-Improve resident health and safety;
-Improve durability and longevity of housing
stock;
-Replace unsafe heating systems;
-Install smoke detectors and/or carbon monoxide
detectors;
-Create and sustain local jobs
9:41:23 AM
Mr. Campbell highlighted slide 28, "AHFC Energy Programs -
Home Energy Rebate":
Reference Number: 51947 (Allocation)
FY2016 Request: $3,000,000 Corporate Dividend
Purpose: Assist homeowners to decrease fuel
consumption by providing rebates for making
recommended, cost-effective energy improvements to
their homes throughout the state.
Projected outcome:
-Reduce household operating costs of the
resident;
-Improve resident health and safety;
-Improve durability and longevity of housing
stock;
-Replace unsafe heating systems; and
-Gather statistical intelligence about home
energy consumption.
Senator Olson wondered how the current and previous year
compare for the VPSO housing. Mr. Butcher replied that each
year had a request for VPSO funding. He stated that a
community was always ultimately successful in receiving
VPSO housing. He agreed to provide further information.
Senator Olson queried the location of new VPSO housing in
the prior year. Mr. Butcher deferred to Mr. Romick.
MARK ROMICK, PLANNING DIRECTOR, ALASKA HOUSING FINANCE
CORPORATION (via teleconference), stated that there were
new VPSO units in Tanana, Hooper Bay, Northwest Arctic
Borough, and Ambler.
Co-Chair MacKinnon queried the location of the most recent
VPSO housing units. Mr. Romick replied that most recent
completed VPSO unit was in Iliamna.
Co-Chair MacKinnon requested a list of the locations of
investments to house teachers and VPSOs. She was eager to
determine the level of need in those communities. She
stressed the importance of understanding how the housing
would otherwise be occupied. Mr. Butcher agreed to provide
that information.
Co-Chair MacKinnon discussed the following week's agenda
ADJOURNMENT
9:46:02 AM
The meeting was adjourned at 9:45 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 021315 AHFC Budget Overview.pdf |
SFIN 2/13/2015 9:00:00 AM |
SB 27 |