Good afternoon.

We're here for planning housing and parks committee work session on the budget.

We have a number of items on our agenda today.

The first one is the Housing Opportunities Commission.

I am going to invite the representatives from HOC up, and I'm going to turn it over to Council Staff to walk us through the packet.

Mr.

Ambiter.

Good afternoon.

The County Executive recommends an increase of $378,371 or 4.13% from the FY26 approved operating budget for HOC.

This increase is same services, no funding for programmatic or staffing enhancements, and thus does not need to be placed on the reconciliation list.

So we'll cover those on page three.

Again, the executive's recommended increase, $378,000 does not need to be placed on the reconciliation list.

HOC has requested additional funding in the amount of $2.72 million for support for the new HOC headquarters and $616,736 in replacement funding for the Fatherhood Initiative grant.

So any of these items that the committee wish to recommend would be placed on the reconciliation list.

That first request of $2.72 million is broken into items 2.1 through 2.3 in your packet.

At the bottom of page three, the first item is the resident services portion of the building costs for the new HOC headquarters at $772,000.

By personnel, resident services comprise roughly 13% of HOC's operations.

And so the HOC request for $772,000 for the building costs represent roughly 13% of the overall expenses associated with HOC's headquarters.

The residence services portion is identified in HOC's request because the current NDA from the county funds the resident services staff within HOC.

Of this $772,000 request, $612,000 are building payments for HOC.

That's a new expense that HOC did not incur at the prior headquarters where they had no building payments.

Then there is an additional $160,000 component for operating expenses for resident services staff, and that is a component that HOC previously covered out of their non-county funds in the previous building.

If the committee wishes to consider adding this item to the reconciliation list, council staff has identified a couple of ways that that could be broken up and happy to go into more detail about that.

At the top of page four, HOC has also requested $200,000 in uh headquarters support as a parking offset.

That would be reimbursement for HOC to pay the cost of their employees' parking at their new downtown Silver Spring headquarters.

And HOC has also requested another $1.3 million in temporary general cost assistance.

That would help offset HOC's losses at its scattered site properties as the agency recovers from the expiration of COVID era relief funds.

An increase in non-paying tenants and lengthy lease enforcement processes have adversely affected HOC's ability to recoup funding from this portfolio.

And that's something else that should the committee wish to add to the reconciliation list, they could consider breaking up into tranches.

The final operating budget item uh regarding funding for the committee's consideration is HOC's request of $616,736 of replacement funding for the Fatherhood Initiative grant.

This has been funded for the previous 10 years via two five-year grant awards from the Federal Office of Family Assistance.

And the Fatherhood Initiative Grant seeks to strengthen positive father-child engagement, improve social and economic outcomes for fathers and their families, improve healthy relationships, and support family formation and strengthening through healthy marriage education and activities.

Each cohort lasts for three weeks and includes group workshops and connections to other HOC programs, resources, and ongoing support.

The $616,000 request from HOC comprises $493,000 for personnel related costs and $123,000 for program costs, and the requested funding would serve up to $240 fathers annually.

So I'll pause there in terms of the funding request and happy to answer any questions.

Great.

Let's hear from HOC, and then we can turn it over to colleagues if they have questions, but you can explain these items two one through two four.

Sure.

Good afternoon, Mr.

Chairman and members of the committee.

For the record, I'm Karen Brown, Senior Executive Vice President with HSC.

And with me are uh Tim Getzinger, Chief Financial Officer.

Terra Fowler Budget Officer, Vice President of Legislative and Government Affairs.

Um Silverman.

Uh thank you for the opportunity to address you on behalf of President Andrews, who uh unfortunately is still away on the extended family emergency.

But we're thankful for the support you've uh provided to HOC over the years and also for the support you've given us in the in FY26 as well as thanks to the CAN executive for the recommendation for continued support for resident services for the increase in our in our mark funding for FI27 supporting our wage increase in health benefits.

The Housing Production Fund in particular, Councilmember Friedson and Juwando, you were at the forefront of creating that fund, which has been very successful in helping to create or produce, as the name suggests, affordable housing in the county.

We've been working through the ups and downs of the economy over the last uh several years, and um despite the turbulence, we've been successful in maintaining our housing and at the same time producing more.

Um at the same time, however, we are feeling similarly challenges that the loss of the COVID era funding have dealt us in that we have had to make tough choices within HOC as we work to serve the most vulnerable in our population.

We still do maintain a strong balance sheet, however, in the midst of making those tough choices, our requests before you are to prioritize funding for operating budget.

We want to ensure that we're able to provide our residents and our and our staff a place that they are comfortable coming in to for service as well as to show up for work so that we can meet the needs of our um of our customers.

So again, focusing on our operations, prioritizing those, and um hopefully meet our the goals that we set out in our strategic plan of expanding housing, ensuring that we're meeting the needs of our customers and um being the best place to work.

So um so uh the first the first item I'd like to address is support for our resident services.

Um the request before you for a 772,000 for our resident services, uh, as you know, um the county has always funded our resident services initiative, uh, our staffing, and we were asking for continued support there.

For the new headquarters, um we're requesting uh an equivalent support, a prorado support for resident services, which reflects about 13% of the cost to continue for the payment on our um a new cost to HOC for the um debt service payment on our on our new our new office space, which aligns with the support that you've always provided for resident services, and um as well as the pro radima for operating um expenses as well at this at the property for um a total of 612,000 for the um debt service portion and 160,000 for the actual operating expenses.

Um in terms of the parking, we're viewing that uh it is a new expense for us, and um we're viewing it since we're not able to negotiate uh a master lease with DOT, we're viewing it as perhaps a pass-through expense uh for HOC, whereby similar to the treatment of our similar to the treatment of our um rental license where we pay the rental license to the county and uh we're reimbursed for it, perhaps uh it could be treated that way.

And so we're requesting the 200,000, which would offset it is well worth noting that it is not the full cost of the parking.

We're only requesting support for a portion of it.

With regard to our headquarters support, um when President Andrews testified before you a few several weeks ago, she was very clear in pointing out that HOC has been faced with several million dollars of uh non-payment of rents, and it has impacted um the agency's bottom line quite significantly.

Um it's it's important to point out that again that we've we started our lease enforced for lease enforcement later than most landlords in the county.