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San Antonio Housing Authority September 5, 2013
MEMORANDUM
TO:
FROM:
Board of Commissioners
Karina Cantu, Chair, Finance Committee
SUBJECT: Update regarding the Finance Committee meeting held on August 26, 2013
A Finance Committee meeting was held on August 26, 2013. Attendees included Chair Karina Cantu,
Commissioner Morris Stribling, Commissioner Stella Molina, Commissioner Yolanda Hotman,
Commissioner Richard Gambitta, Board Counsel Doug Poneck, SAHA President and CEO Lourdes
Castro Ramirez, and various SAHA staff.
The Finance Committee focuses on matters relating to the fiscal year goals and budgets, insurance
policies, and internal audits affecting the San Antonio Housing Authority. The following topics were
discussed at the committee meeting:
Update of the Governance Letter and 2012/2013 audit report
Ed Hinojosa and Diana Fieldler provided an update on the items pending from the audit for the fiscal year
ending June 30, 2012. They reported that each of the items had been addressed by management and a
response was sent, as required, to the U.S. Department of Housing and Urban Development (HUD),
detailing the agency’s related plan. The single outstanding issue is the working capital deficit at the
Springhill and Sendero I PFCs. The Sendero I deficit has been partially addressed by drawing available
reserves to reduce debt, and staff is actively working to refinance the property. The plan for the
Springhill PFC is to refinance or restructure the existing debt on the properties, which should provide a
reduction in the deficit.
SAHA’s independent audit firm of Padgett, Stratemann & Co. LLP also presented the Governance Letter
to the Board of Commissioner, and provided an update on the plans for the current audit.
Financial report for the San Antonio Housing Authority
Mr. Hinojosa and Ms. Fiedler provided the quarterly financial reports for the San Antonio Housing
Authority for the fiscal year ended June 30, 2013.
Operating revenues are trending below budget primarily as a result of unfavorable variances in Grant
revenues, more specifically Capital Grants, which ended the period $4 million under budget. The
unfavorable variance in this category can be largely attributed to timing differences between the
budgeting and actual occurrence of expenditures for approved Replacement Housing Fund (RHF) grant
projects, including new construction developments for San Juan Square III and Sutton II. In addition,
lower than expected revenues for Public Housing Operating Subsidy grants and Project Based Housing
Assistance Payment (HAP) rents also contributed to the unfavorable outcome. Tenant revenues in both
the Public Housing and Non-Profit sectors were also below budget, due primarily to: higher than
expected vacancies, increasing number of bad debt write-offs, and lower than expected tenant revenues
at several properties
Operating Expenses ended the period $4.7 million below budget, due to lower than expected
expenditures for salaries and benefits, consulting, technology and licensing fees, utilities, and protective
services. The favorable variance for salaries and benefits can be attributed to vacant positions in all
sectors. The agency also posted favorable variances for Non-Operating Income of $2.7 million. Loan
forgiveness for Park Place Mortgage debt is the primary contributor to the favorable outcome. Overall
change in net assets ended the year with a $917,000 favorable variance
The Comparative Balance Sheet reflects an overall decrease in total assets and total liabilities from June
30, 2012 to June 30, 2013. The reduction in total assets was primarily the result of the routine recording