State of Arizona Consolidated Annual Performance and Evaluation Report (CAPER) Federal FY 2012 July 1, 2012 – June 30, 2013 Prepared by the Arizona Department of Housing and the Arizona Department of Economic Security for the U.S. Department of Housing and Urban Development 2012 Consolidated Annual Performance and Evaluation Report (CAPER) The FY 2012 State of Arizona Consolidated Performance and Evaluation Report (CAPER) represents a collaborative effort between the Arizona Department of Housing and the Arizona Department of Economic Security. This document outlines the State’s affordable housing and community development resources, their methods of distribution, geographic funding objectives, and actions by the State to meet those objectives during the past fiscal year. Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act prohibit discrimination on the basis of disability in the programs of a public agency. Persons who need the information contained in this publication in an alternate format may call Joy Johnson at the Arizona Department of Housing, (602) 771‐1026, or TTY, (602) 771‐1001. Si necesita ayuda en español para entender este documento, puede solicitarla sin costo adicional, llamando al número (602) 771‐1010. ARIZONA DEPARTMENT OF HOUSING a 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Table of Contents I. EXECUTIVE SUMMARY ................................................................................. 1 INTRODUCTION .................................................................................................................................1 REPORTING AGENCY........................................................................................................................2 INITIATIVES .........................................................................................................................................2 SUMMARY OF RESOURCES AND DISTRIBUTION OF FUNDS ............................................6 II. ASSESSMENT OF THE FIVE YEAR GOALS AND OBJECTIVE ........ 11 III. ASSESSMENT OF ANNUAL PROGRESS .............................................. 14 AFFIRMATIVELY FURTHERING FAIR HOUSING (AFFH) ....................................................14 Actions Taken to Affirmatively Further Fair Housing .......................................................................14 AFFORDABLE HOUSING ................................................................................................................16 Performance Measurements ................................................................................................................16 HOMELESSNESS PREVENTION ...................................................................................................16 Continuum of Care: FY 2012 Activities ............................................................................................16 OTHER RESOURCES .........................................................................................................................20 Arizona Commission on Homelessness and Housing .........................................................................20 OTHER ACTIONS ..............................................................................................................................21 Address Obstacles to Meeting Underserved Needs ............................................................................21 Foster and Maintain Affordable Housing ...........................................................................................21 Eliminate Barriers to Affordable Housing ..........................................................................................22 Overcome Gaps in Institutional Structures........................................................................................22 Improve Public Housing and Resident Initiatives ..............................................................................23 Evaluate and Reduce Lead Based Paint Hazards ................................................................................23 Compliance and Monitoring ...............................................................................................................24 Reduce the Number of Persons Living Below the Poverty Level ........................................................25 LEVERAGING RESOURCES............................................................................................................26 CITIZEN COMMENT ........................................................................................................................27 SELF EVALUATION ..........................................................................................................................27 What Indicators Would Best Describe The Results? ..........................................................................28 What Barriers May Have a Negative Impact on Fulfilling the Strategies and the Overall Vision? ..28 What is the Status of Grant Programs? ..............................................................................................28 Are Any Activities or Types of Activities Falling Behind Schedule? .................................................29 Are Grant Disbursements Timely?.....................................................................................................29 What Adjustments or Improvements to Strategies and Activities Might Meet Your Needs More Effectively? ..........................................................................................................................................30 PROJECTS COMPLETED IN FY 2012 .............................................................................................30 IV. PROGRAM NARRATIVE ......................................................................... 31 COMMUNITY DEVELOPMENT BLOCK GRANT .....................................................................31 CDBG Eligible Applicants ..................................................................................................................32 ARIZONA DEPARTMENT OF HOUSING b 2012 Consolidated Annual Performance and Evaluation Report (CAPER) State Method of Distribution ..............................................................................................................32 CDBG‐Eligible Activities....................................................................................................................33 CDBG Regional Account ....................................................................................................................33 CDBG Recipient Community Responsibility .....................................................................................34 CDBG Redistribution of Funds ..........................................................................................................34 CDBG PROGRAM INCOME............................................................................................................35 HOME INVESTMENT PARTNERSHIPS PROGRAM ...............................................................35 HOME Method of Distribution ..........................................................................................................35 HOME Affirmative Marketing ...........................................................................................................36 HOME Match Report .........................................................................................................................37 HOME Program Income .....................................................................................................................37 HOME MBE and WBE Report ..........................................................................................................37 HOME Application Process ...............................................................................................................38 HOME Monitoring.............................................................................................................................38 HOME CHDO Distribution ..............................................................................................................39 HOME Forms of Investment ..............................................................................................................39 HOME Resale and Recapture Provisions ...........................................................................................39 HOME Security Instruments .............................................................................................................40 EMERGENCY SHELTER GRANT ...................................................................................................40 ESG Method of Distribution ...............................................................................................................40 ESG Match ..........................................................................................................................................42 FY 2012 Summary Data on DES‐funded Outreach, Shelter, Homeless Prevention and Rapid Re‐ Housing Programs ..............................................................................................................................42 HOUSING OPPORTUNITY FOR PEOPLE WITH AIDS ............................................................46 The HOPWA CAPER is provided in a separate document ................................................................46 Mohave County Community Services ................................................................................................46 Northland Cares ..................................................................................................................................46 HOPWA Monitoring ..........................................................................................................................47 CONTINUUM OF CARE METHOD OF DISTRIBUTION ........................................................47 Homeless Prevention and Rapid Re‐Housing .....................................................................................48 State Housing Trust Fund Method of Distribution ...........................................................................48 LOW INCOME HOUSING TAX CREDIT .....................................................................................48 ARIZONA PUBLIC HOUSING AUTHORITY..............................................................................49 OTHER SOURCES OF FUNDS ........................................................................................................49 Arizona Housing Finance Authority ..................................................................................................49 Arizona Department of Economic Security ........................................................................................50 Social Services Block Grant (SSBG) ...................................................................................................50 Temporary Assistance for Needy Families (TANF)............................................................................50 Arizona Department of Health Services .............................................................................................52 State General Funds ............................................................................................................................52 V. PERFORMANCE EVALUATION REVIEW .............................................. 54 VI. INVITATION FOR CITIZEN COMMENTS ........................................... 57 ARIZONA DEPARTMENT OF HOUSING c 2012 Consolidated Annual Performance and Evaluation Report (CAPER) VII. LIST OF EXHIBITS ..................................................................................... 58 ARIZONA DEPARTMENT OF HOUSING d 2012 Consolidated Annual Performance and Evaluation Report (CAPER) I. EXECUTIVE SUMMARY INTRODUCTION The Arizona Department of Housing (ADOH or the Department) utilizes a variety of resources in its mission of strengthening Arizona communities. A total of $149,095,304 was invested in Arizona in FY 2012/2013. Difficult economic conditions have created a unique set of opportunities and challenges for ADOH. Responding and attending to these shifts are essential in successfully achieving the overarching goals of creating a suitable living environment, expanding economic opportunity and providing decent housing. Economic conditions in Arizona have generally improved over the past 12 months led by improvements in the housing market. Maricopa County leads the state in improved home values. For the first time in six years, the Maricopa County Assessor’s Office is raising property values for single‐family parcels in 2014. Home prices in the Phoenix area have increased 35% in the past year alone and new construction of homes has increased 71%. The median sales price for homes in Flagstaff from December 2012 to February 2013 was $235,015. This represents an increase of 11.9% compared to the prior year. Tucson and Yuma have had slower gains. Unemployment remains high with a slight decrease from 9.0% to 7.9% from December of 2011 to December 2012. While Arizona is seeing income gains and the job market is gradually improving, federal sequestration budget cuts and payroll tax increases are holding back more robust gains in the state and nationwide. The tourism industry, call centers and health care companies have been hiring. The challenge for the state’s economy is securing more high‐wage job growth. Recent job growth in Arizona is more robust than in most places nationally. But the recovery here was slower to start and, until recently, it moved along at a glacial pace. Jobs are still hard to come by, and many of the new positions being created in the state require a high‐school education or less and offer low pay. Arizona’s construction industry was cut nearly in half during the downturn and easily accounted for the steepest losses in the state. Although that field has begun to grow again in the past year, it has replaced only 15 percent of its losses. The hospitality business and financial‐services sectors suffered far smaller job losses during the downturn and already replaced them. While foreclosure activity throughout Arizona has slowed down to some of the lowest rates in the nation, it still posted one of the highest foreclosure totals over the past year, according to CoreLogic’s July 2013 foreclosure report. Arizona had the seventh highest number of completed foreclosures over the past 12 months with 28,877, according to Core Logicʹs report. The Phoenix ARIZONA DEPARTMENT OF HOUSING 1 2012 Consolidated Annual Performance and Evaluation Report (CAPER) metro area posted the third‐largest number of completed foreclosures over the last 12 months (18,193). Metro Phoenix tied with the Denver area for second‐lowest foreclosure rate in July 2013 at 0.9 percent, according to the 15 largest metropolitan areas tracked by CoreLogic. Arizona’s figure — 0.95 percent — was 11th lowest in the nation, the report said. These also were far below the nation’s 2.4 percent foreclosure rate last month. REPORTING AGENCY The ADOH is the lead agency responsible for the development of the Consolidated Plan (the Con Plan) and Annual Action Plans. This Consolidated Annual Performance and Evaluation Report (CAPER) for the period of July 1, 2012 – June 30, 2012 summarizes progress made towards meeting goals and objectives as outlined in the first year Action Plan. The State of Arizona’s Con Plan is prepared every five years, and updated annually through the Action Plan. In 2009, the State submitted, and U.S. Department of Housing and Urban Development (HUD) approved, the Arizona Con Plan: 2010 – 2014. This Plan consolidates into a single document the planning and distribution of funds for: • Community Development Block Grant (CDBG) • Home Investment Partnerships Program (HOME) • Emergency Solutions Grant (ESG) • Housing Opportunities for Persons With Aids (HOPWA) ADOH has the responsibility for the administration of the HOME, CDBG and HOPWA programs to non‐entitlement communities (generally these are cities with populations of less than 50,000 and counties with populations of less than 200,000). The Department of Economic Security (DES) has the responsibility for the administration of the ESG program but all information is combined into the CAPER. Both Departments use these resources in combination with other programs; therefore this report includes a look at other resources used to provide a complete picture of the State of Arizona’s performance over the last fiscal year. INITIATIVES The Con Plan assesses the state’s affordable housing and community development needs and analyzes the state’s housing markets It articulates the State’s priorities and strategies to address identified needs along with describing the actions the State will take to implement strategies for affordable housing and community development. ADOH is committed to the continual assessment of needs and economic conditions in Arizona to ensure that housing and infrastructure needs of the lowest income groups are met. Equally ARIZONA DEPARTMENT OF HOUSING 2 2012 Consolidated Annual Performance and Evaluation Report (CAPER) important to the formulation of investment decisions is the capacity of grant recipients to successfully carry out and operate each funded project. Despite a sizeable decrease to the Department’s State resources over the past couple of years (the State Housing Trust Fund (HTF) went from an allocation of $30 million in 2008 to $2.5 million in FY2012) the Department continued to support a number of the state’s most significant housing needs in keeping with ADOH’s priorities of: • Investing in rural areas that have limited funding opportunities; • Investing in projects where the need for funds and the demand for the project is demonstrated; and • Investing in areas in decline and those with a disproportionate concentration of low‐income and minority populations. Preservation of and improvement to the long‐term life of existing affordable owner‐occupied housing stock continued to be a high priority for the Department. Approximately $6.7 million in federal HOME and CDBG funding was committed to preservation and improvement in the form of owner occupied housing rehabilitation. CD&R provided approximately $3.2 million in federal funding for public infrastructure projects as they are the primary focus of rural counties and communities participating in the State and small cities CDBG program thru ADOH. Infrastructure improvements including streets, sidewalks, water, wastewater, curbs, gutters and drainage improvements were funded addressing the Department’s priority to promote sustainable and accessible communities. Capacity deficiencies of local units of government along with the remoteness of the non entitlement rural communities in the State program remain a barrier for economic development projects. Current economic difficulties make it less desirable for location of new business in rural Arizona. Although ADOH was contacted to discuss possible economic development projects, no applications were received. ADOH did not invest funds into the construction of new single family homes as supply continued to exceed demand and home prices, while increasing slightly over the reporting period, remained relatively low. The National Foreclosure Mitigation Counseling (NFMC) program, which began in 2008, is still providing much needed services to struggling homeowners. This program assisted 2,790 households with one‐on‐one counseling in FY 2012. This assistance consisted of crisis budgeting counseling, loan modification request counseling and short sale process counseling. The primary objective of all counseling delivered through this program is to avoid foreclosure when possible and to assist the homeowners with the transition process. ARIZONA DEPARTMENT OF HOUSING 3 2012 Consolidated Annual Performance and Evaluation Report (CAPER) The Foreclosure Assistance Help Hotline which processes calls from distressed homeowners processed 10,539 phones call in FY 2012. These calls were triaged and distributed to our HUD approved housing counseling partners. These partners facilitate the calls delivering an array of services and assistance to families in need. ADOH’s Foreclosure Assistance Division was established in 2010 in direct response to the U.S. Treasury Department declaring Arizona one of the “Hardest Hit” states by the mortgage crisis. As a result of this classification we were awarded $267 million dollars to address the ongoing crisis in a market sensitive manner. Based on property depreciation in excess of 50 percent our first goal was to create a principal reduction program. However, due to the unforeseen reluctance of the GSEs to allow principal reduction, an expansion of the initial program was required. In 2011 we added an Unemployment/Underemployment Mortgage Assistance (UMA) component to the program. This has made a dramatic difference in the number of Arizonans we have been able to assist. We continue to monitor the progress of this program and make adjustments where possible to produce stabilization in our housing market as soon as possible. As of June 30, 2013, over $54.9 million in mortgage foreclosure assistance has been committed to 1,849 households. The Rental Division of ADOH led the efforts on the development of new rental units with a variety of resources. These include HOME, Low‐Income Housing Tax Credits, (LIHTC) NSP, and HTF. This will result in 400 multi‐family rental units. Of those, 365 units were preserved thru rehabilitation. A portion of the 2013 LIHTC allocations were forward allocated during FY 2012 and were included in the 2011‐2012 CAPER. Additional 2013 LIHTC commitments will be made in August 2013. These additional 2013 LIHTC commitments will be reported in ADOH’s 2013‐2014 CAPER. The Special Needs Division of ADOH worked to increase the agency capacity of homeless service providers that assist families and individuals in need, and worked to prevent homelessness. HOPWA monies provided $223,424 in funds for tenant‐based rental assistance, supportive services, and short‐term rent, mortgage and utilities. ADOH contracted with three organizations to administer the HOPWA programs which serve five of the thirteen non‐ entitlement counties. McKinney‐Vento monies provided $ 9,892,477 to 1,726 households through 34 contracts. Most of this money went for rental assistance while less than 5% was directed toward supportive services. ARIZONA DEPARTMENT OF HOUSING 4 2012 Consolidated Annual Performance and Evaluation Report (CAPER) HPRP assistance in the amount of $590,618 was expended on 170 households, 62% eviction prevention and 19% rapid re‐housing. Case management services were provided to all households. HTF monies provided $3,500 for homeless conferences and $640,000 for emergency operating dollars for shelters. ARIZONA DEPARTMENT OF HOUSING 5 2012 Consolidated Annual Performance and Evaluation Report (CAPER) SUMMARY OF RESOURCES AND DISTRIBUTION OF FUNDS ADOH obligated $149,095,304 million in FY 2012‐2013 to affordable housing and community development efforts through multiple resources. The following is a list of those resources. Community Development Block Grant (CDBG) $8,198,834 Neighborhood Stabilization Program (NSP)(HERA and ARRA funds) $2,369,269 HOME Investment Partnerships Program (HOME) $11,534,857 Housing Opportunities for Persons with Aids (HOPWA) $223,424 Shelter Plus Care (SPC) $7,374,086 Supportive Housing Program (SHP) $2,518,391 Homeless Prevention and Rapid Re‐Housing Program (HPRP)(ARRA Section 8 Housing Choice Voucher Program (HCVP) $590,618 $1,349,828 Project Based Section 8 $49,392,231 Low Income Housing Tax Credits‐9% $13,444,020 4% LIHTC Bond $2,115,750 State Housing Trust Fund (HTF) $6,145,034 Mortgage Revenue Bond (MRB) – Single Family $15,632,880 Downpayment Assistance (AzHFA) $704,149 National Mortgage Foreclosure Counseling Program (NFMC) $722,076 Save Our Home AZ Program (HHF) Total $25,463,631 $147,775,078 The Arizona Department of Economic Security (DES) obligated the following resources: Emergency Solutions Grant (ESG) GRAND TOTAL ARIZONA DEPARTMENT OF HOUSING $1,320,226 $149,095,304 6 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Chart 1 below represents the division of ADOH funding by Program. The actual geographic distribution of resources was based on the number and quality of applications received. ADOH did not hold funding available or make any concessions with regard to program thresholds or underwriting in order to guarantee the funding of activities within a specific geographic region. Geographic distribution of activities is widely varied, but program funds are targeted for low‐income persons and take place in or near a low‐income area. The location of an activity largely depends on the type of activity. As a function of its planning processes, the ADOH routinely considers economic and statistical data in its analysis. Arizona’s areas of highest minority household concentration lie along Arizona’s border with Mexico and on Arizona’s 22 Indian reservations. ADOH invests statewide, through its HTF, and its LIHTC allocations. ADOH, however, directs the investment of its formula programs, with the exception of HOME, in the non‐entitled areas of the state, those communities that do not receive a direct allocation from HUD. State priorities for formula program allocations are determined through analysis of census data, American Community Survey data, and from other state and national resources. Chart 2 shows the geographic distribution of funding and Chart 3 shows the geographic distribution of beneficiaries. ARIZONA DEPARTMENT OF HOUSING 7 2012 Consolidated Annual Performance and Evaluation Report (CAPER) ARIZONA DEPARTMENT OF HOUSING 8 2012 Consolidated Annual Performance and Evaluation Report (CAPER) ARIZONA DEPARTMENT OF HOUSING 9 2012 Consolidated Annual Performance and Evaluation Report (CAPER) ARIZONA DEPARTMENT OF HOUSING 10 2012 Consolidated Annual Performance and Evaluation Report (CAPER) II. ASSESSMENT OF THE FIVE YEAR GOALS AND OBJECTIVE ADOH provided services and funding to low to moderate income persons through the investment of CDBG, HOME, ESG, HTF, LIHTC program, Treasury’s Hardest Hit Fund (HHF) and American Recovery and Reinvestment Act (ARRA) funding ADOH is on track to fully expend ARRA funds by their respective deadlines. ADOH established 13 priorities in 4 categories in its 2010‐2014 Consolidated Plan Strategic Plan. Those priorities and the progress made in FY2012 are listed below: CATEGORY ONE: HOUSING PRIORITIES Priority 1: Expand the supply of affordable rental housing for very low‐income and extremely low‐income households. When possible emphasize projects that assist families, seniors and persons with disabilities.  Rental Development 400 units HOME, HTF, LIHTC, NSP Priority 2: Preserve and improve the long‐term life of existing affordable rental and owner occupied housing stock.     Owner‐Occupied Rehabilitation LI (51% to 80% AMI) Owner‐Occupied Rehabilitation for VLI (at or below 50%) Rental Rehabilitation 157 units CDBG, HOME 217 units CDBG, HOME 365 units HOME, HTF, LIHTC, NSP Priority 3: Expand homeownership opportunities for low‐income homebuyers in areas of the state where median home prices are beyond the reach of low‐income households.     Downpayment and Closing Cost 132 Households Asst. Foreclosure Mitigation Counseling 2,790 Households SaveMyHomeAZ Assistance 1,230 Households AzHFA NFMC HHF Priority 4: Ensure that all households in the state have adequate access to fair housing resources.   Fair Housing Events Fair Housing Training 2 166 HTF CDBG, HTF  Other Fair Housing Activities 114 CDBG, HTF ARIZONA DEPARTMENT OF HOUSING 11 2012 Consolidated Annual Performance and Evaluation Report (CAPER) CATEGORY TWO: PRIORITIES FOR PERSONS WHO ARE HOMELESS Priority 5: Encourage a range of services to help people move from homelessness to permanent housing and maintain independent living.    Housing Eviction Prevention Rapid Re‐housing 1,753 HH’s 160 HH’s 50 HH’s HPRP, BOS CoC, HOPWA HPRP, HOPWA HRPR Priority 6: Increase the number of transitional and supportive housing units for the homeless.   Development of Permanent Rental Shelter Operation 13 units 109,900 bed nights , BOS CoC HTF Priority 7: Offer Services and funding to help prevent people from becoming homeless.  Eviction Prevention 195 HH’s HOPWA, HPRP CATEGORY THREE: SPECIAL NEEDS PRIORITIES Priority 8: Increase and preserve the supply of affordable housing available to the elderly, disabled and large families.      Development of rental units for the elderly Development of rental units for the disabled Development of rental units for large families Preservation of owner occupied units, elderly Preservation of owner occupied units, disabled 41 units HOME 58 units BOS CoC, NSP, HOME 56 units LIHTC, HTF 215 units HOME, HTF, CDBG 114 units HOME, HTF, CDBG Priority 9: Improve housing accessibility and safety.  ADA improvements owner occupied units 53 units CDBG, HTF Priority 10: Improve the access special needs populations have to services.  ADA improvements to public buildings ARIZONA DEPARTMENT OF HOUSING 34,977 people CDBG 12 2012 Consolidated Annual Performance and Evaluation Report (CAPER) CATEGORY FOUR: COMMUNITY DEVELOPMENT PRIORITIES Priority 11: Improve infrastructure and physical environments to promote sustainable and accessible communities.     Streets, Sidewalks, Drainage Water/Sewer Improvements Fire Station/ Emergency Equipment Planning 18,619people 20,167 people 3,614 people 1,936 people CDBG CDBG CDBG CDBG Priority 12: Ensure a variety of public facilities are available to meet the recreational, human development and service needs of low income households and priority populations.     Senior Center Improvements Public/Neighborhood Facility Improvements Parks, Recreational Facilities Other Public Services 2,065 people 12,128 CDBG CDBG 5,978 people 3,097 people CDBG CDBG The state’s annual CAPER for FY2012 is organized to report accomplishments aligned with performance goals. Exhibit 1 specifically, is organized in compliance with HUD’s performance measurement system, to report proposed units and actual units by activity number, along with income targets met or target population served. A listing of CDBG, HOME and HTF Projects Completed during FY 2012 and their beneficiaries are provided as Exhibits 2A, 2B, 3A, 3B, 4A and 4B. This CAPER is the second report for the Con Plan for years 2010‐2014. The second year Action Plan reflects today’s economic reality and describes the changes ADOH is making as a result of our ARIZONA DEPARTMENT OF HOUSING experiences. 13 2012 Consolidated Annual Performance and Evaluation Report (CAPER) III. ASSESSMENT OF ANNUAL PROGRESS AFFIRMATIVELY FURTHERING FAIR HOUSING (AFFH) Actions Taken to Affirmatively Further Fair Housing The agency’s commitment to affirmatively furthering fair housing was demonstrated on many fronts. ADOH’s spring newsletter was dedicated to the 45th Anniversary of the signing of the Fair Housing Act. The newsletter feathered the Governor signing a proclamation declaring April as Fair Housing Month; it also gave a brief history leading up the signing of the Fair Housing Act and introduced the HUD Disparate Impact Rule. The Arizona Fair Housing Partnership, which ADOH sits on the steering committee, held its annual April event also dedicated to celebrating 45 years of fair housing. The event was held at the Disabilities Empowerment Center on April 19, 2013 and was entitled Back to the Future. The Fair Housing proclamation signed by the Governor was on display. Speakers included: Bill Gray, former President of the Arizona School of Real Estate and nationally recognized lecturer; Dr. Matthew C. Whitaker, ASU Foundation Professor of History and the Director of the Center for the Study of Race and Democracy; Reginald H. Givens, Foreclosure Assistance Administrator with ADOH; and Phoenix Councilman Tom Simplot. They each shared their knowledge of past, present, and future aspect of housing and housing discrimination. The agency renewed its contract with Southwest Fair Housing Council (SWFHC) to provide fair housing/fair lending training throughout the State of Arizona; providing at least two workshops per county for housing professionals, two workshops per county for consumers and a minimum of one fair housing training per State CDBG recipient. The contract also provides a fair housing training for ADOH staff, two presentations at other agency, city, county and continuum of care meetings. SWFHC also stocks and maintains at least fifteen sites per county for the distribution of fair housing literature, and they use the media (radio, television, print ads, and PSAs) to make consumers aware of fair housing laws and trainings throughout Arizona. In the last fiscal year, SWFHC has provided 166 trainings and workshops throughout the state of Arizona. ADOH partnered with the City of Yuma and SWFHC along with many other agencies, staffing a booth at a fair housing fair for consumers in Yuma. The Community Development and Revitalization division of ADOH required each recipient of CDBG funds to offer at least three opportunities per year to further fair housing. Those opportunities included an annual adoption of a fair housing resolution or proclamation and displaying fair housing posters in a public area of the community’s administration building or office. Other fair housing activities ARIZONA DEPARTMENT OF HOUSING 14 2012 Consolidated Annual Performance and Evaluation Report (CAPER) that communities participated in for fair housing compliance included the distribution of a fair housing brochure, the sponsoring of a fair housing poster, an essay, or poetry contest in the local schools; encouraging the media to promote fair housing awareness with public service announcements; hosting of an annual fair housing meeting or forum; conducting a community wide fair housing opinion survey; encouraging civic organizations to invite speakers to talk about fair housing; or other activities. ADOH monitors for fair housing compliance on all recipients and applicants of CDBG and HOME funding. Summary of impediment to fair housing choice The agency’s Analysis of Impediments to Fair Housing Choice was updated in the spring of 2009. There were a few impediments carried over from 2006. The impediments are: 1. There is a need to improve the process for fair housing complaint/referral in many non‐ metro communities. 2. Many housing consumers are unaware of their fair housing rights and available fair housing resources. Therefore, when housing discrimination is encountered, it often goes unreported and unresolved. 3. Many housing providers illegally discriminate because of inadequate knowledge and understanding of their responsibilities under the Fair Housing Act. 4. Many public and private agencies in non‐metro Arizona lack effective fair housing referral procedures. This impedes people’s access to agencies that provide fair housing information and assistance to victims of housing discrimination. 5. Disparities in lending and predatory lending practices are impediments to fair housing choice in Arizona. 6. “Not in my Backyard” (NIMBYism) can be an impediment to fair housing because it has obstructed plans and policies to provide affordable housing and special needs housing that serves protected classes. 7. The issue of affordable housing is a fair housing impediment in two ways: 8. The lack of affordable housing throughout the state has a disparate negative impact on Fair Housing Act protected classes. 9. Planning to affirmatively further fair housing will be included/expanded in affordable housing projects funded by ADOH. 10. Enforcement needs to be increased in rural areas. A greater focus needs to be on border areas, colonias, and communities surrounding reservations where discrimination has been shown to be particularly high. Additionally, the agency distributes an annual fair housing survey to its CDBG recipients electronically and makes the survey available on our website throughout the month of April, to help identify impediments to fair housing choice within the State of Arizona. The agency has also created and distributed a fair housing complaint referral form, a referral list, and ARIZONA DEPARTMENT OF HOUSING 15 2012 Consolidated Annual Performance and Evaluation Report (CAPER) procedures to each of its CDBG communities and has offered these forms and instruction to any agency interested in this procedure. This complaint referral process is monitored by ADOH annually and whenever CDBG‐contracts are closed out. AFFORDABLE HOUSING Performance Measurements A comparison of quantifiable goals of proposed actions to actual production/people served, including income targets during the reporting period is provided in Exhibit 1: FY 2012 Summary Objectives, in the HUD performance measures format. HOMELESSNESS PREVENTION Continuum of Care: FY 2012 Activities In order to prevent homelessness for Arizonan’s and increase capacity for supportive service providers, the ADOH coordinates its efforts with the three Arizona Continua of Care (CoC’s). It is the lead agency for the Balance of State Continuum of Care (BOS CoC) and internally this responsibility lies with the Special Needs Division. The BOS CoC covers thirteen of the fifteen counties in Arizona. The two other CoC’s are: Phoenix/Mesa/Maricopa County and Tucson/Pima County. The Continuum of Care process is required by the HUD to enable localities to apply to the federal government for McKinney‐Vento Homeless Assistance Act competitive grant programs. Ideally, this process brings together local governments, community businesses, faith‐based organizations, non‐profits, current and/or formerly homeless persons to develop local solutions to end homelessness. On an annual basis, the agency applies to HUD through the competitive process for funding for projects and programs that have been identified as priority needs through the Continuum process. ADOH then acts as the administering agency for the grants that are passed through to the participating subrecipients. For the last several years, all projects have been renewed on an annual basis and one or two new Supportive Permanent Housing projects a year have fortunately been funded. There was one reallocation project funded through the 2012 Continuum in the amount of $32,094. This is a Rapid Re‐housing Project in Coconino and Yavapai Counties. ADOH has been very successful in securing millions of dollars in funding for transitional and permanent housing programs using the Continuum of Care system. All 36 projects involving ADOH, through all three CoC’s in Arizona, totaled over $11 million. ARIZONA DEPARTMENT OF HOUSING 16 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Arizona has developed its Continuum of Care Application process over the years and in the spring of 2010 put into motion an organizational change. The 13 counties that make up the geographic area for the BOS CoC were divided into five regions. (See map below) Meetings are conducted quarterly, 3 of them in each region and the fourth meeting of the year to be a statewide meeting held in conjunction with the Arizona Coalition to End Homelessness Conference held every fall, usually in October. HMIS training was conducted simultaneously at all of the regional meetings. It provides data entry operators the opportunity to understand the overall picture of how HMIS fits into the CoC process and likewise for administrators to understand how HMIS is a two way street and examine what information can be gleaned for the improvement of BOS CoC programs. ARIZONA DEPARTMENT OF HOUSING 17 2012 Consolidated Annual Performance and Evaluation Report (CAPER) BALANCE OF STATE CONTINUUM OF CARE REGIONS 1 2 3 4 5 ARIZONA DEPARTMENT OF HOUSING 18 2012 Consolidated Annual Performance and Evaluation Report (CAPER) The BOS CoC consisted of the following components: 1. Identification of needs, existing resources and gaps addressed in the HUD application. This data was gathered through several sources, including: local network and continuum meetings held in each of the BOS counties; data collected by all agencies participating in the CoC process; consultation with municipal, county and service providers regarding needs in their respective geographic areas; and, use of various databases compiled on a regular basis by ADOH and other state agencies. 2. Submission of Letters of Intent by interested eligible project sponsors, including: description of project design; estimated budget; match requirements and local contribution available; needs and gaps data relating to the proposed population to be served; and evidence of local concurrence with the proposed project. 3. Technical Assistance to project sponsors was provided by state staff, including representatives of ADOH, DES, and other state agencies as needed. The technical assistance focused on assisting sponsors to refine preliminary proposals to conform to HUD requirements, to firm up budget estimates, to identify sufficient match funds and to prepare successful proposals for the HUD Application. 4. Final Proposals were submitted by five project sponsors in the format required for the HUD Continuum of Care Application. One project was being funded through reallocation of monies. 5. Ranking of Projects in Priority Order: All five projects met threshold criteria, but total funding requested exceeded the “bonus”. A statewide ranking committee which consisted of persons appointed by the BOS CoC chairperson from areas not competing for the bonus project reviewed and ranked all five projects. Meeting threshold included taking into consideration all the following factors: o proposing a permanent supportive housing project o housing experience o conformance with the needs and gaps identified in the Homeless CoC developed as part of the application o likelihood of the project having significant impact on the identified gap in the affected geographic target area o avoidance of duplication of effort o matching funds being made available by sponsoring agencies Four of the five projects were submitted and were funded under the 2012 Continuum of Care. Technical Submissions have been submitted but contracts have not been received. When in service, the four programs together will provide an additional 29 units of permanent supportive housing for northern Arizona. ARIZONA DEPARTMENT OF HOUSING 19 2012 Consolidated Annual Performance and Evaluation Report (CAPER)  Matching Fund Requirements ‐ All projects that had operating or support services funds were required to have the proper cash match. Project sponsors provided leverage, usually in support services or other qualifying in kind donations. Shelter Plus Care (SPC) providers were required to provide at a minimum an equal amount of service dollars as were received in leasing dollars. Project sponsors or their subcontractors perform program administration for all HUD‐ approved projects. ADOH acted as the HUD Grantee for the overall program and was responsible for project monitoring, drawing of HUD funds, submission of all HUD reports and overall program evaluation. State contracts were offered to all sponsors receiving HUD approval for their projects and were administered by ADOH. OTHER RESOURCES HOPWA, Veterans Affairs Supportive Housing (VASH), Section 8 Housing Choice Voucher Program (Section 8 or HCVP), and ESG are allocated to housing and services which prevent homelessness. Other activities regarding efforts to end homelessness for all Arizonans, ADOH financially supported the Valley of the Sun United Way (VSUW) efforts on their campaign in Ending Chronic Homelessness Through Permanent Supportive Housing. VSUW, working closely with the Corporation for Supportive Housing conducted “Opening New Doors Supportive Housing Institute.” They provided over 80 hours of training to four non‐profit agencies that are proposing development of supportive and affordable housing targeting homeless individuals and families. This is a continuation of a program started last year. Arizona Commission on Homelessness and Housing In January of 2010 Governor Janice K. Brewer created the Governor’s Arizona Commission on Homelessness and Housing (ACHH) through an Executive Order continuing the previous State Interagency and Community Council on Homelessness (ICCH). The ACHH is chaired by Governor Brewer. In her absence, the designated co‐chairs are Clarence Carter, Director of DES and Michael Trailor, Director of ADOH. The purpose of the ACHH is two‐fold. It serves as the statewide homelessness planning and policy development resource for the Governor and the State of Arizona and oversees the implementation and progress of the State Plan to Prevent and End Homelessness. A State Plan to End Homelessness was completed and adopted by the previous ICCH in 2005. The statewide plan was revised to align with the objectives of the United States Interagency Council on Homelessness (USICH) Plan that was introduced in 2010. Under the new and expanded ARIZONA DEPARTMENT OF HOUSING 20 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Commission on Homelessness and Housing, the focus has shifted to implementation of the plan. OTHER ACTIONS Address Obstacles to Meeting Underserved Needs ADOH is in contract with The Drachman Institute, the research and public service/community outreach unit of The College of Architecture and Landscape Architecture at The University of Arizona. They provide training, technical assistance, and design examples through utilization of staff and students. Projects and training include community planning, housing assessments, site planning and facility design for affordable housing, transit oriented design education and planning and colonia needs assessment. ADOH convened the Arizona Housing Forum in Tucson in September of 2012. The Department was pleased with the 300+ participants attending the forum in light of stressful economic times. It proves that the Housing Forum has become an annual priority for many stakeholders. The Housing Forum provides an opportunity to share in best practice development, community revitalization and neighborhood stability. ADOH offers rental housing compliance training twice annually for current and future property owners and managers. This training is offered in Phoenix in the spring and in Tucson in the fall. Each session was at maximum capacity for the facility. In conjunction with the ADOH Compliance Division, it is facilitated by well‐known national trainers who are experts in the subject of tax credits and can offer national designations in the field. Foster and Maintain Affordable Housing In FY2012 ADOH administered over $58.4 million in rental subsidy payments, assisting 3,467 households of low and extremely low‐income Arizonans with their monthly rent. The rent subsidy dollars administered consisted of 94 percent federal dollars and 82 percent of those funds were associated with federally financed rental properties holding long‐term housing assistance payment contract. Generally, when households are assisted with public monies, they are expected to contribute 30 percent of their income with the subsidy covering the difference between what the household can afford and a reasonable, modest rent payment. Over $3 million in state and federal funding was spent on housing rehabilitation programs in FY 2012. This helped extend the life of affordable properties as well as ensure safe, decent living environments for some of Arizona’s poorest homeowners. ARIZONA DEPARTMENT OF HOUSING 21 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Eliminate Barriers to Affordable Housing When formulating strategies to address the barriers to affordable housing, a range of interrelated issues must be considered including infrastructure, jobs, transportation, and quality of life. Capacity in rural communities to address affordable housing needs is limited by access to funding for planning and implementation, availability of qualified organizations and human resources, and lack of economies of scale for project development. ADOH provided professional education and technical assistance to local governments to address barriers to housing affordability. ADOH staff travel throughout the state to provide technical assistance and on‐site training upon request or as targeted according to need. Developing projects and obtaining grant funding is most successfully accomplished by partnerships between local governments and for‐profit or non‐profit service providers. Development activity has increased due to improvements in the economy but the extent of the economic recovery is disproportionately less in rural communities. Historically, poverty in sparsely populated areas is higher than elsewhere. ADOH has invested funds to increase capacity of housing providers in the distressed areas of the state and address the needs of Arizona’s low‐income population. Funding the rehabilitation of owner‐occupied housing units and rental subsidies for households provided decent and safe living environments for low‐income families. Although much progress has been made in the past five years, much remains to be done—both in the housing arena and in the array of other factors that affect a family’s housing decisions and abilities. Most of the barriers to affordable housing in rural Arizona are not imposed by public policies implemented by the local jurisdiction, although much of the work that must be done to provide more affordable housing must occur at the local level. The main barriers to affordable housing are the lack of decent housing stock, a preponderance of single‐family housing, often on large lots or acreage, lack of employment or lower‐wage employment, limited private land and high cost infrastructure. Another barrier to affordable housing is the manner in which HUD administers the Housing Choice Vouchers program, which does not pay Housing Authorities (especially smaller ones) the full cost of proving rental assistance. In some cases available Housing Choice Vouchers cannot be used because using them is cost prohibitive to the Housing Authority. Overcome Gaps in Institutional Structures • ADOH worked in conjunction with four COGs to develop a plan for the targeting and distribution of funds throughout the state. • ADOH staff worked collaboratively with local contracting organizations to remove gaps in the delivery system to bring to fruition the successful completion of projects. ARIZONA DEPARTMENT OF HOUSING 22 2012 Consolidated Annual Performance and Evaluation Report (CAPER) • ADOH provided additional direct technical assistance on the formation and establishment of non‐profit organizations to carry out housing development. • ADOH continued to make accommodations in its annual Qualified Allocation Plan (QAP) for the LIHTC Program) to better address and target priority populations. The QAP for the 2013 Round, for which applications were due May 2013 and will be announced in August 2013, established set‐aside categories for two Permanent Supportive Housing Projects: one project with a minimum of 30 units set aside for the chronically homeless individuals with a preference for veterans and one project with a minimum of 25% of the units set aside for chronically homeless individuals and/or chronically homeless families. In addition, the 2013 QAP included set‐asides for one Rural and one Tribal project. • The ADOH Director co‐chairs with the DES Director the ACHH. The Directors of 7 other state agencies also serve by Governor Appointment on this Commission allowing for continuous dialogue and work to carry out the State Plan to End Homelessness. Those 7 state agencies are: ADOH, DES, Department of Veterans’ Services, Department of Corrections, Department of Public Safety, Department of Health Services (ADHS)/Division of Behavioral Health Services (DBHS) and Governor’s Office of Children, Youth and Families. Improve Public Housing and Resident Initiatives The Arizona Public Housing Authority (PHA) neither owns nor manages public housing. The PHA administers 149 Section 8 vouchers for Yavapai County and is a Section 8 project based contractor for HUD on another 115 properties. In addition, at any one time, the PHA administers approximately 100 “portable” Housing Choice Vouchers in Yavapai County. The PHA once again achieved a “No Findings” audit, conducting Management and Occupancy Reviews (MORs) and other tasks on‐time. The PHA continued to work through HUD, to keep property owners from opting out by being responsive to questions and by assisting in the assessment of property eligibility for either an Operating Cost Adjustment Factor (OCAF), Budget Based rent increase or new 20‐year Housing Assistance Payment contract renewal. Evaluate and Reduce Lead Based Paint Hazards ADOH continues to play a leadership role in the evaluation and reduction of the number of lead‐based paint hazards in order to increase the inventory of lead‐safe housing available to low and moderate income families. Current regulations required subrecipients to ensure occupants; homeowners and homebuyers were notified of the hazards of lead‐based paint. Additionally, subrecipients must ARIZONA DEPARTMENT OF HOUSING 23 2012 Consolidated Annual Performance and Evaluation Report (CAPER) • conduct a visual assessment, paint testing, or risk assessment, depending on the activity, and • conduct lead hazard reduction activities, including paint stabilization, interim controls, standard treatments, or abatement depending on the requirements for the activity type as identified in 24 CFR Part 35. Projects funded with HTF are not required to comply with the Federal LBP regulation at 24 CFR Part 35. However, ADOH policy follows these regulations for projects funded with federal funds or HTF. Rental property owners are required to have a paint maintenance policy that ensures regular (at least once annually) visual assessment and repair/maintenance of painted surfaces using Safe Work Practices. In addition ADOH CD&R staff monitored all contracts to ensure they have a written plan that follows standard operating procedures for lead safe practices. Through their monitoring of assisted units and beneficiary file documentation, no issues of non‐compliance with Federal Lead based Paint regulations were found in FY2012. Compliance and Monitoring Procedures for CDBG monitoring are described in the State of Arizona Community Development Block Grant Program Grant Administration Handbook (Rev. 01/09) published by ADOH. The handbook is distributed on a compact disc to all CDBG eligible units of government and is updated as necessary. Chapter 6 of the handbook describes the monitoring process, which consists of both desk and on‐site monitoring; it also contains copies of all “desk” (in‐office) and onsite monitoring forms used by program staff. Thus, applicants and grantees know beforehand what they will be monitored on. In addition, ADOH has prepared and provided to all grantees handbooks covering crosscutting federal requirements such as environmental review, labor standards, procurement, contracting, and acquisition. These handbooks contain detailed information along with sample documents, file checklists, and forms that grantees may use to help ensure administration of a compliant program. Staff conducts desk monitoring during all phases of each project based on a combination of a risk analysis and random sample. Documented desk monitoring includes a detailed application review including national objectives, eligible activities, cost reasonableness, anti‐speculation, citizen and public participation and certifications; requests for payment; environmental review; procurement and contracting; acquisition; construction bids/contracts; labor standards including weekly payrolls and employee interviews; Section 3; housing rehabilitation guidelines; homeownership assistance guidelines; and, sub‐recipient agreements, closeout ARIZONA DEPARTMENT OF HOUSING 24 2012 Consolidated Annual Performance and Evaluation Report (CAPER) reports, and audits. The nature of the activities undertaken by grantees determines which documents must be submitted for desk monitoring. After desk monitoring has been completed, the grantee is notified, in writing, as to whether the items reviewed were compliant or what corrective actions are needed with a date for such to be completed. Staff also conducts on‐site monitoring visits. Each community is monitored at least once during the contract period but often due to project complexity they are monitored twice; once during construction and again at close‐out. During on‐site monitoring the project site(s) is/are visited to ensure consistency with the information in the application and contract. Additionally, a sample of files is reviewed. Checklists are provided to all grantees to ensure communities maintain all required documents and the on‐site monitoring proceeds efficiently. Grantees are always notified in writing in advance of a monitoring visit; it is scheduled at a mutually convenient time. All monitoring visits result in a report that identifies the items reviewed, any concerns and findings, and a response date if necessary. Response dates for both desk and on‐ site monitoring are tracked through Housing Development Software (HDS). Lack of timely, appropriate responses can result in a withholding of funds, an inability to apply for future funds or a grant termination following appropriate notification and due process procedures. Responses are reviewed for completeness and, if necessary, an additional correspondence is exchanged until all issues are resolved. Reduce the Number of Persons Living Below the Poverty Level There are a number of programs that help the working poor, unemployed persons, homeless persons and other at risk low income persons living in poverty. The approach of ADOH was to: • increase the supply and availability of decent, safe and affordable housing necessary for low‐income families to live healthy, productive lives; • increase the effectiveness of existing programs through better collaboration, reduced duplication of services and increased efficiency of implementation; and • utilize existing partnerships with the following state agencies to assist Arizonans: o DES o ADHS/DBHS o Department of Corrections o Governor’s Office on Youth, Children and Families o Department of Veterans Affairs. For the FY 2012 reporting year this was accomplished by: ARIZONA DEPARTMENT OF HOUSING 25 2012 Consolidated Annual Performance and Evaluation Report (CAPER) • Creating opportunities for low‐income families to stabilize their housing costs and build wealth through the down payment assistance for 184 households to purchase a home. • Funding LIHTC projects that will construct 162 units • Funding the rehabilitation of 370 owner‐occupied housing units • Provided decent and safe living environments for approximately 8,200 low income households through rental subsidies • Providing rental subsidies for 1,564 special need households • Assisting 170 households to avoid homelessness through its Homeless Prevention and Rapid Re‐housing (HPRP) program • Aiding 16,571 persons with ESG funding to be in a shelter or assist with rent to avoid becoming homeless • Worked with ADHS/DBHS to pilot a Bridge Rental Subsidy Program to increase housing stock by 200 permanent housing units which links individuals with serious mental illness eventually to housing choice vouchers administered by local Public Housing Authorities. Due to decreased rents this program has exceeded original expectations in the number of people it assisted with subsidies in FY2012. LEVERAGING RESOURCES Identify Progress in Obtaining Public and Private Resources That Address Needs Identified in the Plan Arizona continues to be successful leveraging its resources. HTF is a vital resource, which provides leverage to HUD CPD formula grant funding. HOME match, for example, has been met through HTF dollars directed toward the down payment and closing cost assistance program. HTF and HOME are used to provide gap financing for multifamily development, including the LIHTC and Bond financed programs. Moreover, the collaborative efforts of DES, ADHS, the Department of Corrections, and partners in the Balance of State CoC leveraged their finite resources with ADOH to provide quality housing and sustainable communities throughout Arizona. SPC requires a dollar for dollar match and this is always exceeded by providers as well as the match requirement for the Supportive Housing Programs. ARIZONA DEPARTMENT OF HOUSING 26 2012 Consolidated Annual Performance and Evaluation Report (CAPER) CITIZEN COMMENT ADOH invites public comments on all planning and reporting activities. ADOH kept the public informed via the Department’s website at www.azhousing.gov. ADOH also electronically distributed four newsletters last fiscal year. Finally, Information Bulletins were electronically sent our non‐profit, for‐profit, unit of local government, tribal and public partners to both inform and garner feedback from the public. The Solicitation for Comments for the 2012 CAPER which will be submitted to HUD in September of 2012 was publicized on August 19, 2013 in 5 newspapers, 4 of them in rural Arizona. These newspapers were the Arizona Republic; Arizona Daily Star in Tucson, Arizona; Kingman Daily Minor; Yuma Sun; and the Arizona Daily Sun in Flagstaff, Arizona. The draft CAPER was posted on the publications page of the ADOH website. No comments were received. SELF EVALUATION Are the activities and strategies making an impact on identified needs? The activities and strategies described in the Con Plan continued to make a positive impact on identified needs. Investment allocation decisions focused on activities that closed funding gaps and  Supported activities in rural areas that had limited funding opportunities;  Supported projects where the need for funds and the demand for the project design were demonstrated;  Supported projects identified as high priorities in the Consolidated Plan; and,  Invested in areas in decline and those with a disproportionate concentration of low‐income and minority populations. ADOH’s programs facilitated increased affordable housing opportunities and improved community services across the state. These accomplishments were made across all programs. More specifically: • LIHTC, HTF, NSP and HOME funds provided 394 additional housing units targeted at low‐income populations. • CDBG program assisted 67,768 Households and met community needs in rural areas. • The Arizona Housing Finance Authority (AzHFA) assisted 184 households in achieving home ownership and ADOH’s Your Way Home Program prevented 624 households from losing their homes. • HPRP prevented homelessness for 120 households. ARIZONA DEPARTMENT OF HOUSING 27 2012 Consolidated Annual Performance and Evaluation Report (CAPER) What Indicators Would Best Describe The Results? The indicators that best provided the results of what has been accomplished is the overall number of completed construction, rehabilitation, community development, down payment and closing cost assistance and loan activities. This information is described in Exhibit 1: FY 2012 Summary of Objectives. What Barriers May Have a Negative Impact on Fulfilling the Strategies and the Overall Vision? The economic recession has created a barrier to achieving strategies. Job losses have directly increased homelessness due to loss of income and have contributed to a decrease in wealth overall due to losses in home equity. Revenue losses have decreased involvement by local government in CDBG service delivery due to staff and program losses. Lack of capacity in rural areas of Arizona inhibits the implementation of projects and services. Capacity issues have been compounded by staff turnovers which are related to job losses by a spouse or other factors requiring relocation. Developing projects and obtaining grant funding is most successfully accomplished by partnerships between local governments, and for‐profit and non‐profit service providers. In economically distressed rural areas, local governments may not have sufficient staff to do the work necessary to develop projects and obtain grant funding. The problem is further compounded in these areas by the lack of non‐profit housing service providers, the lack of design professionals and the lack of contractors to implement projects. ADOH continues to provide technical assistance in response to these needs. Incentivizing participation in affordable housing programs continued to be a challenging goal for the Arizona Department of Housing. ADOH provided a longer time for applicants to prepare submittals and an increase in the ceiling for its 2012 HOME NOFA. These incentives, along with a new requirement to have a HUD issued Authority to Use Grant Funds, resulted in a higher quality of applications in the pool. What is the Status of Grant Programs? ADOH grant programs are resulting in the production of housing and related services in accordance with the Action Plan. Demand for CDBG, ESG, HOME, HOPWA continues to exceed availability. Reductions of the HTF to $2.5 million have caused the elimination of programs. ADOH, however, aggressively managed its portfolio to insure that funds were leveraged and that the state’s affordable housing needs were addressed; ensuring geographic distribution, and ensuring sustainability through underwriting criteria. ARIZONA DEPARTMENT OF HOUSING ADOH has 28 2012 Consolidated Annual Performance and Evaluation Report (CAPER) traditionally used the HTF to provide the match requirements for HOME. In addition, it is a source used for gap financing for rental projects, including the LIHTC program. The LIHTC program continues to be a very effective means to produce affordable rental housing units. The complexity of financing needs, combined with the Department’s commitment to ensure viable, long term affordability resulted in more thorough contract negotiations when investing HOME and HTF dollars. Emergency Solutions Grant (ESG) continued to play a vital role in providing prevention services and as a first line of defense in reducing the number of people who are living on the streets. The annual report on homelessness in Arizona, “Current Status of Homelessness in Arizona,” produced by the DES through its Homeless Coordination Office provides an in depth analysis of conditions and resources directed toward the prevention and alleviation of homelessness. The Homeless Prevention and Rapid Re‐Housing Program (HPRP) funded with ARRA monies ended September of 2012. This program was designed to prevent individuals and families at risk of homelessness from becoming homeless and to assist persons experiencing homelessness to be quickly re‐housed and stabilized. Clients assisted were all at or below 50 percent AMI. HPRP assistance was given to 170 households and a report run by the Homeless Management Information System in spring of 2013, shows that 98% of those assisted through HPRP have not received assistance through another homeless provider in the balance of state. This is an indication that the HPRP met the goals of preventing homelessness and re‐housing those in the throes of homelessness rapidly. , Are Any Activities or Types of Activities Falling Behind Schedule? ADOH implemented new policies to enhance project readiness. NOFA’s for HOME funds required environmental reviews to be completed at the time of application. CDBG contract awards are now contingent upon completion of an Environmental Review. ADOH provides technical assistance as necessary to prevent projects from falling behind schedule. ADOH continued to encourage better planning and strategic use of finite resources. ADOH’s community partners worked diligently to complete projects on time, and were for the most part successful. Are Grant Disbursements Timely? Contract obligations and disbursements were in alignment with HUD’s timeliness requirements for all programs covered under this CAPER including CDBG, HOME, ESG, HOPWA, NSP 1 and 3 and HPRP. ADOH has maintained a goal to approve and award contracts within 90 days of application and met all disbursement deadlines. ARIZONA DEPARTMENT OF HOUSING 29 2012 Consolidated Annual Performance and Evaluation Report (CAPER) What Adjustments or Improvements to Strategies and Activities Might Meet Your Needs More Effectively? Continuing to incorporate incentives for project readiness will help ADOH meet needs more effectively. In conjunction with the MRB, MCC and NSP 1 programs, AzHFA provided loans for homebuyer assistance to 184 Arizona families. In order to address the needs, and manage finite resources, the Department’s application, award and evaluation process for projects identified for the State Housing Fund (HOME and HTF), submitted through the State Housing Fund application, or submitted through the QAP Gap Financing application, was competitive. Applications for ESG continued to be let through a bid system, with an emphasis on criteria for capacity and outreach. Applications for CDBG funds continued to follow the regional account method of distribution detailed in the Con Plan FY 2010‐2014; competition for CDBG SSP funds became more stringent with regard to requirements in the application process. Incentives for meeting the priorities and objectives established in the State’s Con Plan were enhanced through the scoring systems outlined in each application guide or plan. CDBG Colonias Set Aside funds became competitively accessed for the first time beginning with FY2010 federal funds. The continuing efforts to create more partnerships at the local level should create opportunities to leverage finite resources. Extending planning beyond traditional community borders may be one way to promote innovation while encouraging smarter growth strategies. ADOH continued to provide incentives for regional planning, and planning for community revitalization in its application guidelines. PROJECTS COMPLETED IN FY 2012 As seen in the Section IV, ADOH invested in projects that reflect the state’s commitment to sustainability, affordability, and suitability. Please also refer to Exhibits 2A, 2B, 2C, 3A, 3B, 3C, 4A, 4B and 4C for complete lists of projects completed with CDBG, HOME and HTF funds. ARIZONA DEPARTMENT OF HOUSING 30 2012 Consolidated Annual Performance and Evaluation Report (CAPER) IV. PROGRAM NARRATIVE COMMUNITY DEVELOPMENT BLOCK GRANT CDBG activities in FY 2012 continued to address the needs and implement the objectives and priorities set forth in the State’s 2010‐2014 Con Plan for affordable housing and for non‐housing community development needs. To that end, ADOH provided grants, and technical assistance for developing projects which provided decent and hazard‐free affordable housing, increased access to safe drinking water, provided proper disposal of household wastewater and provided access to community‐needed services in local facilities. All of these activities were provided for low/mod income persons improving their quality of life in rural Arizona communities. The Department’s investment of funds into CDBG assisted activities did not trigger one for one replacement requirements and did not cause any relocation or displacement issues. Additionally, no publicly assisted housing units were demolished. In support of the state’s community development priorities, the CDBG Program: • Improved infrastructure and physical environments to promote sustainable and accessible communities. • o $2,206,418 obligated to Streets, Sidewalks, or Drainage Improvements (9 projects). o $321,851 obligated to Wastewater Treatment Improvements (2 projects). o $851,480 obligated to Potable Water Delivery Improvements (4 projects). Ensured a variety of public facilities were available to meet the recreation, human development and service needs of low income households and priority populations. • o $104,094 obligated to Senior Center Improvements (3 projects). o $821,245 obligated to Neighborhood Facility Improvements (4 projects). o $215,755 obligated to Emergency 911 Call Center Expansion (1 project). o $660,812obligated to ADA Improvements (4 projects). o $71,000 obligated to general planning (1 project). o 99,780 obligated to public services activities (2 projects) Continued to support a mix of rehabilitation, conversion and construction activities that preserved and increased affordable housing, both for renters and owners; o $2,716,399 obligated for owner‐occupied home rehabilitation (14 programs). o $130,000 obligated to Rental Housing Acquisition/Rehabilitation of a Sober Living Home (1 project). • Developed and implemented strategies which facilitated the coordination of CDBG funding with other federal/state/local community development resources. o $30,000 obligated to other Technical Assistance activities (3 projects). ARIZONA DEPARTMENT OF HOUSING 31 2012 Consolidated Annual Performance and Evaluation Report (CAPER) o ADOH is involved on a continual basis in numerous planning efforts with other state departments; local, regional, and county governments; housing and social service providers; businesses and citizens. CDBG Eligible Applicants The State CDBG program made funds available to eligible units of local government, including cities, towns, and counties in rural areas. For purposes of this program, rural areas are those located outside of entitlement jurisdictions (those that receive CDBG funds directly from HUD). Entitlement jurisdictions in Arizona include all tribal lands, Maricopa and Pima Counties, and the cities of Flagstaff, Prescott, and Yuma. State Method of Distribution The total amount of CDBG funds through the FY 2012 allocation was $8,908,063. Federal Law allows the State of Arizona to retain 2 percent ($178,161) plus $100,000 of its annual CDBG allocation for program administration. ADOH provided a non‐federal match for the 2 percent required. The match was documented at the same time that CDBG funds were drawn down for the administrative expenditures of the state above $100,000. In addition, Federal Law allows the State of Arizona to retain 1% ($89,081) for technical assistance funding. The $8,908,063 in federal CDBG project resources available to the state was distributed as follows: Grantee Funds – $8,540,821.  Regional Account (RA)  SSP Account (SSP) • Colonia Set‐Aside (10% of allocation) $6,502,513 $1147502 $890,806 (to be distributed with FY2013 colonias set aside funds) ADOH Administration ‐ $545,403. • Technical Assistance • State program administration • 2% administration match $89,081 $278,161 $178,161 (contributed by ADOH) ADOH provided the required non‐federal match funds from two sources. These included “hard” match funds, i.e. state funds used to pay salaries and other operating expenses of the CDBG program and “in‐kind” or “soft” match funds which represented staff time devoted to the CDBG program by individuals whose salaries are paid from non‐federal sources. These individuals, who included those located in the Information Technology Division, Personnel, Procurement, the front desk of the Department, and Assistant Deputy Directors all track their time on departmental time sheets. ARIZONA DEPARTMENT OF HOUSING 32 2012 Consolidated Annual Performance and Evaluation Report (CAPER) CDBG‐Eligible Activities Eligible activities are generally found in Section 105 of the HUD Act of 1974, as amended and 24 CFR Part 570.482, as amended. CDBG funds were used for a wide range of activities. Activities eligible for funding under this Action Plan fell under these main funding categories of: • Housing (both owner‐occupied and rental rehabilitation); • Public improvements (water, wastewater, streets); • Public facilities (community/senior/youth centers, removal of architectural barriers); • Public services (e.g. healthcare, and transportation); and • Planning. Funding allocations for the Regional Account (RA) and the State Special Project (SSP) competitive funding round distributed by the state CDBG program were: CDBG Regional Account The CDBG RA consists of 85 percent of the state allocation from HUD. The RA is distributed on a non‐competitive basis to the non‐entitlement non‐metropolitan cities, towns, and counties in Arizona. Distribution of State CDBG funds was accomplished through an allocation system. Each non‐metropolitan Council of Government (COG) region created a Regional Council approved Method of Distribution (MOD), which was submitted to ADOH for review. The MOD contained a multi‐year schedule indicating how CDBG allocations were to be distributed such that all eligible communities within each respective COG region received funding. ADOH has the final authority to determine the MOD for the state. The MOD approved by ADOH was included in the Annual update of the Consolidated Plan, which is subject to a citizen participation process. The RA was divided into four sub‐accounts, one for each of the non‐metropolitan COG areas. RA allocations were as follows: • Central Arizona Association of Government (CAAG): o • Apache, Coconino, Navajo, and Yavapai Counties. $1,499,164; South Eastern Arizona Government Organization (SEAGO): o • $1,772,685; Northern Arizona Council of Government (NACOG): o • Gila and Pinal Counties. Cochise, Graham, Greenlee, and Santa Cruz Counties. $1,278,945; Western Arizona Council of Government (WACOG): o La Paz, Mohave, and Yuma Counties. ARIZONA DEPARTMENT OF HOUSING $1,951,719. 33 2012 Consolidated Annual Performance and Evaluation Report (CAPER) ADOH announced FY 2012 CDBG funding levels for both the RA and the SSP round via its website and thru electronic bulletin 13‐11 sent to all of its state CDBG eligible partners on June 1, 2012. CDBG Recipient Community Responsibility While CDBG money is scheduled to be provided to all eligible recipient communities according to the Method of Distribution, an actual award of CDBG funds remained contingent upon meeting readiness criteria, threshold criteria and performance measurement criteria. Through its pre‐award assessment process, ADOH negotiated and resolved any outstanding issues that may have been material to an award decision. If issues material to the decision could not be resolved, the recipient community received a Notice of Appealable Agency Action. Notwithstanding the options available through the Notice of Appealable Agency Action, the recipient community was allowed to modify the application, substituting a feasible and viable activity within 30 calendar days of receipt of the Notice of Appealable Agency Action. CDBG Redistribution of Funds If a community that was scheduled to receive funding chose not to participate or does not submit a viable and compliant application to their COG to be forwarded to ADOH, the allocation for that community will be returned to the SSP. If the funding amounts scheduled for a community exceeds funding requests included in the application, the balance will be redistributed to the SSP fund. ADOH may from time to time recapture or de‐obligate funds. These actions are described in the Con Plan and annual action plan. The projects completed during FY2012 are found in Exhibit 1: FY 2012 Summary of Annual Objectives and Exhibit 2A: FY 2012 Summary of CDBG Accomplishments  Street Improvements 14 projects  Sidewalk Improvements 2 projects  Water/Sewer Improvement 10 projects  Flood and Drainage 1 project  Neighborhood Facilities 7 projects  Parks, Recreational Facilities 2 projects ARIZONA DEPARTMENT OF HOUSING benefitting 30,371low‐to‐ moderate income people; benefitting 2,446 low‐to‐ moderate income people; benefitting 21,159 low‐to‐ moderate income people; benefitting 1,402 low‐to‐ moderate income people; benefitting 9,007 low‐to‐ moderate income people; benefitting 22,336 low‐to‐ 34 2012 Consolidated Annual Performance and Evaluation Report (CAPER)    Senior Centers Housing Rehabilitation (Owner Occupied) Housing Rehabilitation (Multi‐ family Rental) Removal of Architectural Barriers  Planning 1 project  Public Services (General) 1 project  2 projects 14 programs 1 project 1 project moderate income people; benefitting 271 senior citizens; benefitting 272 low‐to‐moderate income households; benefitting 33 low‐to‐moderate income households; benefitting 888 low‐to‐moderate income handicapped persons; benefitting 2,071 low‐to‐ moderate income people; Benefitting 64,567 low‐to‐ moderate income people. ADOH also examines the CDBG investment impact on project beneficiaries. Exhibit 2B: FY 2012 Summary of CDBG Project Beneficiaries looks at how each activity ended in benefit, showing the data by race, ethnicity and income. CDBG PROGRAM INCOME ADOH received no CDBG Program Income. CDBG Percent Allocated to Low‐Mod ADOH allocated 87% to benefit Low‐Mod persons. HOME INVESTMENT PARTNERSHIPS PROGRAM ADOH ensures that all HOME investments benefit low‐to‐moderate income communities and persons. An analysis of that data is illustrated in Exhibit 3A: FY 2012 Summary of HOME Accomplishments which provides the information by project name, HUD Matrix Code, and geographic distribution. Additionally, Exhibit 3B: “FY 2012 Summary of HOME Project Beneficiaries” looks at how each activity ended in benefit, showing the data by race and/or ethnicity. Exhibit 8: Non‐CDBG Housing Units Assisted, provides data by activity and income target. HOME Method of Distribution Arizona received a total award of $4,695,013 in HOME resources which it used for owner‐ occupied housing rehabilitation and rental development through a competitive application process. Notification of funds availability for HOME funds were made available through a NOFA which included information regarding project eligibility, maximum funding amounts, ARIZONA DEPARTMENT OF HOUSING 35 2012 Consolidated Annual Performance and Evaluation Report (CAPER) application requirements, etc. HOME match liability was met through carryover state dollars invested in the previous Homes for Arizonans Program. The HOME program match liability is 25 percent (statutory requirement) of actual project expenditures during the program year or $1,173,753. HOME Affirmative Marketing Affirmative Marketing responsibilities are passed from the Department to its subrecipients as the Department does not directly market HOME assisted properties. Thru contractual obligation and recorded Covenants, Conditions and Restrictions, the Department requires that Owners of assisted rental or homebuyer developments containing 5 or more units take actions to provide information and otherwise attract eligible persons from all racial, ethnic, and gender groups in the housing market area to the available housing. Projects assisted with HOME funds must comply with the following procedures for the determined Affordability Period:  Owners advertising vacant units must include the Equal Housing Opportunity logo or statement. Advertising media must include general audience and minority‐owned newspapers, radio, television, brochures, leaflets, or may involve simply a sign in a window.  The Owner shall implement special outreach efforts to solicit applications for vacant units from protected persons in the housing market who are least likely to apply for the housing assisted with State Housing Funds. Special outreach efforts should be designed to notify potential applicants regardless of existing neighborhood racial or ethnic patterns, location of housing in the metropolitan area, price, or other factors, and welcome them to apply and have the opportunity to rent.  The Owner shall use community organizations, places of worship, employment centers, fair housing groups, housing counseling agencies, social service centers, or medical service centers as resources for this outreach.  The Owner must maintain a file containing all marketing efforts (i.e. copies of newspaper ads, memos of phone calls, copies of letters, etc.) and the records to assess the results of these actions, and make said documents available for inspection by the Department.  For assisted Rental properties, the Owner shall maintain a listing of all tenants residing in each unit at the time of application submittal through the end of the compliance period. The Department will assess the affirmative marketing efforts of the Owner by comparing predetermined occupancy goals (based upon the area from which potential tenants or owners will be drawn) to actual occupancy data that the Owner is required to maintain. Outreach efforts of the part of the Owner will be evaluated by reviewing marketing efforts. The Department will assess the efforts of the Owners receiving HOME funds for rental properties during the rent‐up period and marketing of the units by use of a compliance ARIZONA DEPARTMENT OF HOUSING 36 2012 Consolidated Annual Performance and Evaluation Report (CAPER) certification or personal monitoring visit to the project according to the Department’s monitoring schedule. Where the Owner fails to follow the affirmative marketing requirements, corrective actions shall include extensive outreach efforts to appropriate contacts to achieve occupancy goals, or other actions the Department may deem necessary. Each unit of general local government that sub‐grants the administration of this program must adopt affirmative marketing procedures that meet the requirement in paragraphs (a) and (b) of 24 C.F.R. Pt. 92.351. HOME Match Report The match requirement of $1,173,753 was met. Excess match from prior Federal fiscal year was $15,807,242 and $606,600 in new program income was accrued this year. The HOME Match Report, HUD‐40107‐A can be found in Exhibit 5: HUD 40107‐A HOME Match. Excess match carried forward into FY 2012 will be $ 14,198,674. HOME Program Income The HOME Program Income Report, HUD‐40107 can be found in Exhibit 6: HUD 40107‐APR HOME PI and MBE/WBE. Program Income available at the end of the reporting period was $68,760. HOME MBE and WBE Report The Home MBE and WBE Report materials are provided in Exhibit 7: MBE and WBE Report. The state has been informed that the MBE/WBE/DBE report (HUD‐2516) is not mandatory for states. However, the state captures this data and makes it available to HUD upon request during program review. In all cases, MBE and WBE responsibilities are passed down to the Department’s subrecipients as the Department does not directly enter into funding agreements with Contractors. Subrecipients are contractually obligated to maintain documentation and data on the steps taken to implement outreach programs to minority‐owned and women‐owned businesses including data indicating the racial, ethnic or gender character of each business entity receiving a contract or subcontract to be paid with HOME funds; the amount of the contract or subcontract, and documentation of the steps to assure that minority‐ and women‐owned business enterprises have an equal opportunity to obtain or compete for contracts and subcontracts as sources of supplies, equipment, construction, and services. ARIZONA DEPARTMENT OF HOUSING Lists must be 37 2012 Consolidated Annual Performance and Evaluation Report (CAPER) compiled of all minority‐ and women‐owned business enterprises within the Recipient’s political jurisdiction. HOME Application Process ADOH made HOME funds available through an application process. In FY 2012, a Notice of Funds Availability Process was issued on July 13, 2012 for Owner Occupied Housing Rehabilitation (OOHR) and for Rental project gap financing. The actual geographic distribution of resources was based on the number and quality of applications received. Exhibit 9: Geographic Distribution Map shows the geographic distribution by funding source, including HOME, CDBG, HTF, and CoC, (Supportive Housing (SHP) and SPC). ADOH does not use HOME resources for tenant‐based rental assistance or for homeownership assistance in the form of down payment/closing cost or equity contributions. Steps taken to minimize displacement resulting from HOME funded activities. Each applicant requesting HOME funds must adopt a plan to minimize displacement resulting from HOME funds. Typically rehabilitation projects require only temporary relocation until the rehabilitation is completed and tenants or owners can be returned to their unit. None of the HOME funds expended resulted in any permanent displacement. Additionally there were no Public Housing Units demolished thru the Departments HOME funded activity investments. HOME Monitoring Contract Specialist staff monitor HOME assisted units on site by conducting an UCPS physical inspection at the time of close out. Typically 100% of the assisted units are inspected however protocol requires only a 20% sampling. There were no instances of unresolved UCPS violations for any HOME assisted units. Compliance is the division responsible for monitoring the long‐term compliance of ADOH funded rental properties assisted with LIHTC and/or State Housing Funds (HOME program or HTFs). The compliance staff monitors compliance with these programs through a review of annual reports and periodic on‐site visits to assisted properties. These on‐site visits consist of a file review and physical inspection of a percentage of assisted units. ARIZONA DEPARTMENT OF HOUSING 38 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Annual Reports are required for all permanent or transitional rental properties assisted with HOME or HTF funds allocated by ADOH. These reports are due annually on May 15 for the preceding calendar year. Required documents for HOME and HTF annual reports include the HOME Annual Compliance Report, Rental Schedule for State‐Assisted Units, Affirmative Marketing Report and Project Contact Sheet. Multiple contracts require completion of separate reports for each property and unit address. Properties assisted with both LIHTC and HOME or HTF funds, need only submit the Tax Credit Annual Report. Currently, compliance monitoring fees are not required for HOME and HTF properties. HOME CHDO Distribution The state distributed HOME resources in the amount of $2,015,920 to Community Housing Development Organizations (CHDOs) through the application process outlined above. HOME Forms of Investment Investment was provided as grants and loans. HOME Resale and Recapture Provisions The Federal HOME Program required either a resale or recapture provision as outlined in 24 CFR 92.254 of the HOME rule. ADOH has chosen to use the recapture provision for HOME and/or matching funds used to assist eligible homebuyers. Assistance provided by ADOH is in the form of a non‐interest bearing, deferred payment loan secured by a deed of trust naming the State of Arizona or its designated representative(s) as beneficiary. The assistance is completely forgiven upon completion of the applicable affordability period. If the housing does not continue to be the principal residence of the homeowner for the duration of the affordability period, the assistance must be repaid in its entirety from the net sale proceeds. If the net sale proceeds are not sufficient to recapture the full amount of assistance plus enable the homeowner to recover the amount of their down payment, ADOH will share the net proceeds. The net proceeds are the sales price minus loan repayment (other than ADOH funds) and closing costs. ADOH will permit the homeowner to recover the homeowner’s initial down payment before recapturing ADOH assistance. The amount of ADOH assistance that is subject to recapture is ARIZONA DEPARTMENT OF HOUSING 39 2012 Consolidated Annual Performance and Evaluation Report (CAPER) based on the amount of assistance that enabled the homeowner to purchase the dwelling unit. This includes any assistance that reduced the purchase price from a fair market value to an affordable price, but excludes the amount between the cost of producing the unit and the market value of the property (i.e. the development subsidy). In the case of foreclosure or transfer in lieu of foreclosure, the primary lender is allowed to repay a recapture amount based on the process described above, as applied to the net proceeds after foreclosure, and take the property without the affordability restrictions. HOME Security Instruments Recapture restrictions were executed through one or more of the following instruments, depending on the type of first‐mortgage instrument:  Land Use Restriction Agreements and/or deed restrictions filed against the property acquired by the assisted homebuyer;  Deed of Trust and Promissory Notes consistent with the non‐interest HOME‐financed loan filed on the property acquired by the assisted homebuyer; and,  a due‐on‐sale Promissory Note and Deed of Trust consistent with the non‐interest bearing HTF. EMERGENCY SHELTER GRANT ESG Method of Distribution The ESG program is funded under the McKinney‐Vento Homeless Assistance Act. DES is the HUD grantee for ESG funds and is the responsible administrative agency. Emergency Shelter Grant (ESG) funds have traditionally supported basic shelter and supportive services for homeless persons in the form of outreach activities, operation costs for shelter facilities and short‐term homeless prevention to persons at risk of losing housing due to eviction, foreclosure or utility shut‐offs. The Emergency Solutions Grant (ESG) has replaced the previous Emergency Shelter Grant and provides additional funding for Administration, Homeless Prevention, Rapid Re‐housing and HMIS. During FFY2012 ESG funds supported Outreach services to homeless persons living on the streets, basic shelter and supportive services for homeless persons in the form of operation costs and direct services for homeless persons living in Emergency Shelters, funding for Homeless Prevention services to assist individuals and families at risk of losing housing and becoming homeless and Rapid Re‐housing support for individuals and families who are homeless and need assistance to return to housing and independent living as rapidly as possible. ESG funds also supported HMIS data collection, information management and reporting systems and Administrative services necessary to coordinate grant activities. ARIZONA DEPARTMENT OF HOUSING 40 2012 Consolidated Annual Performance and Evaluation Report (CAPER) The DES has utilized this funding to increase the availability/accessibility of suitable living environments and housing options by providing a wide range of supportive services to persons experiencing homelessness or at risk of homelessness. ESG funds in the amount of $ 1,615,732 were allocated to Arizona and funding was distributed based on the following priorities:  To encourage a range of services to help prevent people from entering the homeless system and rapidly move people from homelessness to permanent housing.  To target prevention services and funding to help prevent people most likely to become homeless from becoming homeless and to provide rapid re‐housing to those who are homeless in order to break the cycle of chronic homelessness. ESG funding was distributed in the following programmatic categories based on a prescribed formula that required funding of Outreach services and Emergency Shelters to be maintained at 2010 levels while focusing added funding on the newly allocated categories of Homeless Prevention, Rapid Re‐housing, HMIS and Administration. The resulting expenditures by category during FFY2012 were Outreach 5% ($60,569), Emergency Shelter 48% ($633,134), Rapid Re‐housing 18% ($242,584), Homeless Prevention 14% ($182,135), HMIS 6% ($75,762) and administration, which included increased admin allocation from FFY2011, 9% ($126,042) . Geographically, ESG funds were distributed as part of total DES contracts from all State Homeless funding sources; Maricopa County 47%, Pima County 7% and in the 13 counties that make up the Balance of State 36%. DES awards contracts every three to five years through a competitive RFP process. Proposals are reviewed by a panel comprised of internal staff and external community members. Proposals are assessed using a rating system. Evaluation criteria are published in each RFP, which may include service methodology, experience and expertise, cost/price and conformance to RFP requirements/instructions. Renewal contracts with governmental entities and non‐profit organizations began on July 1, 2012. ESG Monitoring Quarterly program reports attached to fiscal claims for reimbursement are designed to capture client data, activities and fiscal expenditures billed. A formal desk review will be completed annually and written report prepared with findings and recommendations identified for corrective actions, if necessary. Each ESG provider will receive a monitoring site visit every year for the first two years of their contract and at least every three years thereafter. A written report will be prepared with findings and recommendations for corrective actions, if ARIZONA DEPARTMENT OF HOUSING 41 2012 Consolidated Annual Performance and Evaluation Report (CAPER) appropriate. Completion of corrective actions with specific timelines for completion are reviewed and monitored by DES. Updated budgets, certifications if needed, and descriptions of activities to be funded by ESG will be submitted to the DES for each renewal period. The updated information submitted will be reviewed and approved, where necessary to assure compliance with ESG requirements. ESG Match ESG funds require a 100 percent match. Matching funds may be provided in a variety of ways including any Federal source other than ESG as well as state, local and private sources of funding as long as the source of those funds does not prohibit those funds from being used to match ESG and ESG funds are not being used to satisfy the matching requirements of those funds. Matching Funds may also include non‐cash contributions of items or services that would have been allowable costs under ESG, services provided by individuals up to the value that the recipient organization would have had to pay for those services and program income used to pay for costs otherwise eligible for ESG funding. Total Match requirements for FFY2012 were $1,515,732. Total Match reported for FFY2012 was $4,901,126 FY 2012 Summary Data on DES‐funded Outreach, Shelter, Homeless Prevention and Rapid Re‐Housing Programs This summary accounts for DES contracted ESG dollars, Additional funding for these programs was provided through Temporary Assistance for Needy Families, Social Services Block Grants, Arizona State Lottery Funds and State Homeless funding. All service providers also rely on a variety of public and private sources to meet operating costs. ESG Expenditures Rapid Re‐housing Homeless Prevention Emergency Shelter Outreach HMIS ADMIN Total BoS $242,584.00 Maricopa $182,135.00 $36,156.00 $19,235.00 $68,262.00 $527,565.00 $35,418.00 $7,500.00 $480,110.00 $562,983.00 ARIZONA DEPARTMENT OF HOUSING Pima Total $242,584.00 $182,135.00 $69,413.00 $633,134.00 $5,916.00 $60,569.00 $75,762.00 $126,042.00 $75,329.00 $1,320,226.00 42 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Number of Persons in Households Adults Children Don't Know/Refused Missing Information Total Street Outreach Number of Persons in Households Adults Children Don't Know/Refused Missing Information Total Shelter Number of Persons in Households Adults Children Don't Know/Refused Missing Information Total Rapid Re‐housing Number of Persons in Households Adults Children Don't Know/Refused Missing Information Total BoS Maricopa 618 164 2 1 785 BoS Pima 6125 1276 7401 Maricopa 158 5 0 1 164 BoS Pima 0 0 0 0 0 Maricopa 253 2 1 0 256 BoS 6125 1276 0 0 7401 Maricopa 141 104 1 0 246 ARIZONA DEPARTMENT OF HOUSING 1247 168 3 0 1418 Total 7990 1608 5 1 9604 Total 159 19 2 0 180 Pima 1121 151 1 0 1273 Pima 317 24 2 1 344 Total 7499 1429 2 0 8930 Total 141 104 1 0 246 43 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Homeless Prevention Number of Persons in Households BoS Maricopa Pima Total Adults 69 0 0 69 Adults 69 0 0 69 Children 55 0 0 55 Don't Know/Refused 0 0 0 0 Missing Information 0 0 0 0 Total 124 0 0 124 Above information is accumulated and reported by Continuum of Care Lead Agencies based on HMIS input by contracted service providers. ARIZONA DEPARTMENT OF HOUSING 44 2012 Consolidated Annual Performance and Evaluation Report (CAPER) ARIZONA DEPARTMENT OF HOUSING 45 2012 Consolidated Annual Performance and Evaluation Report (CAPER) HOUSING OPPORTUNITY FOR PEOPLE WITH AIDS The HOPWA CAPER is provided in a separate document The state allocation for HOPWA funds was $230,334. Three percent ($6,910) was allocated by ADOH and 7% ($15,640) was budgeted by project sponsors for administration of this funding. Any previously uncommitted funds were combined with this allocation. Results and Expenditures: $223,424 of HOPWA funds was expended last fiscal year, benefitting 67 households. ADOH contracts with three organizations to administer the HOPWA program within five of the thirteen non‐entitlement counties. Mohave County Community Services Mohave County Community Services, a local county government entity, directly administered HOPWA as a HUD project sponsor in Mohave County. Mohave County geographically is located in the top northwestern portion of Arizona with an approximate population of 200,186 as of 2010. Mohave County mainly provides Tenant Based Rental Assistance with Supportive Services for an average of 22 units, always exceeding their contracted number of 15. Northland Cares Northland Cares, a non‐profit organization, directly administers HOPWA in two counties within the BOS jurisdiction – Coconino and Yavapai Counties Northland Cares offers Short Term Rental, Utility and Mortgage, assistance with supportive services. A total of 39 households were assisted during the reporting year. Northern Arizona Regional Behavioral Health Authority (NARBHA) NARBHA is a private, non‐profit managed care corporation designated by ADHS as being responsible for the planning, implementation, funding, monitoring and administration of publicly funded comprehensive behavioral health services in Northern Arizona. NARBHA entered into contract with ADOH in November of 2011 to serve Apache and Navajo Counties with HOPWA funds through administering Tenant Based Rental Assistance with Supportive Services. They are leased up on their 5 contracted units. The following is a list of some of the barriers that exist for accessing HIV/AIDS services in rural Arizona: • Rural vastness • Stigma—Disclosure of disease and discrimination ARIZONA DEPARTMENT OF HOUSING 46 2012 Consolidated Annual Performance and Evaluation Report (CAPER) • Small town—everyone knows everyone • Transportation—fuel cost • Lack of knowledge of services available—consumer awareness • Increased prevalence primarily due to population increases, decrease dollars for regions’ ancillary services • Limitations on state programs‐Behavioral Health, no dental or vision care on AHCCCS • Don’t have HIV—specific Medicaid program • Number of HIV providers in rural areas is limited HOPWA funds continue to be expended at 97% of the annual allocation. HOPWA Monitoring Annually HOPWA provider grantees receive an on‐site monitoring visit and a written report with findings and corrective actions (if any) with specific timelines for improvement. Additionally, documentation is also desk monitored monthly with reimbursement requests from HOPWA providers. CONTINUUM OF CARE METHOD OF DISTRIBUTION The state coordinated and served as the applicant for the HUD CoC Homeless Assistance funds for all counties excluding Maricopa and Pima in Arizona and is Grantee for three SPC programs in Maricopa County and one in Pima County. The state distributed almost $10 million in SPC and Supportive Housing Program funding to qualified applicants through the CoC process. The FY2012 HUD NOFA was the first NOFA for the Continuum of Care Competition under the HEARTH Interim Rule that was issued July 31, 2012. The NOFA was published November 9, 2012 and the close date was January 18, 2013. The HEARTH Act amends and reauthorizes the McKinney‐Vento Homelessness Assistance Act with substantial changes, including:  A consolidation of HUD’s competitive grant programs  A change in HUD’s definition of homelessness and chronic homelessness  A simplified match requirement  An increase in prevention resources  An increase in emphasis on performance Proposals for the NOFA were submitted via a prioritization process with a 3.5% reduction in funds. There was a review tool developed based primarily on information from monitoring reviews and the Annual Performance Reports. All but one renewal was prioritized in Tier 1 ARIZONA DEPARTMENT OF HOUSING 47 2012 Consolidated Annual Performance and Evaluation Report (CAPER) with that one renewal being the first priority in Tier 2, along with a reallocation proposal, planning proposal and two new bonus proposals. HUD made three separate funding announcements with regard to the FY2012 Continuum of Care. In March all Tier 1 renewals were awarded, in May all Tier 2 renewals were awarded and on July 31 HUD announced new awards which for Balance of State only included the project that was reallocated from existing projects. It is a RRH project in Coconino County. Neither the Planning Proposal nor the bonus projects received funding. Homeless Prevention and Rapid Re‐Housing ADOH administered the final quarter of the HPRP which was funded with ARRA monies and ended September of 2012. This program was designed to prevent individuals and families at risk of homelessness from becoming homeless and to assist persons experiencing homelessness to be quickly re‐housed and stabilized. The focus was on housing stabilization (i.e. client can remain stably housed after the temporary assistance ends). Clients assisted were all at or below 50 percent AMI. A total of 170 households were assisted the last three months of the program. Case management services were given to all households which will strengthen the chances of remaining stably housed once the assistance ends. State Housing Trust Fund Method of Distribution The HTF is a resource funded through the Stateʹs Unclaimed Property Fund. $6,145,034 million in HTF was committed to assisting 13,196 households. ADOH analyzed the results of its investments through the HTF. Exhibit 4A: FY 2012 Summary of HTF Accomplishments shows this information by project name, HUD matrix code and geographic distribution. Exhibit 4B: FY 2012 Summary of HTF Project Beneficiaries shows the impact of the investment by activity and race and ethnicity. LOW INCOME HOUSING TAX CREDIT The LIHTC Program provided federal income tax credits to owners of qualifying residential rental projects. The state set the following specific goals for the LIHTC program: 1) an allocation of projects between the urban and rural areas of the state and among various geographic regions; 2) substantial involvement and input from the affected community; 3) projects serving very low‐income families; 4) projects to be built on tribal lands; 5) acquisition/rehabilitation and rehabilitation projects; 6) projects serving priority populations with special housing needs; 7) projects undertaken by non‐profit organizations; 8) projects ARIZONA DEPARTMENT OF HOUSING 48 2012 Consolidated Annual Performance and Evaluation Report (CAPER) located in each of the rural COGs jurisdictions. Over 20 million in tax credits were awarded to 18 projects on June 1, 2012. (Exhibit 10: LIHTC Program 2012 Reservation List) LIHTC projects Placed in Service FY2012 Project Name Placed in Service Date (PIS) Encanto Pointe – Housing First Grandfamilies Place of Phoenix Pineview Manor Apartments Sentinel Plaza Yavapai‐Apache Homes IV Pascua Yaqui Homes II Casa del Sol I Madison Pointe Aeroterra Senior Villages Lakeview Villas Trinity Place 12/12/12 7/12/12 8/10/12 7/30/12 7/1/12 10/29/12 12/20/12 2/11/13 12/13/12 8/1/12 7/31/12 ARIZONA PUBLIC HOUSING AUTHORITY ADOH operates the Arizona Public Housing Authority (PHA). Information derived from operating the State PHA provides an accurate and recent view of public housing needs and trends for which planning efforts can be designed to address. The responsibilities entail administering the Section 8 Housing Choice Voucher (HCV) Program in Yavapai County. The HCV Program provided rental subsidy payments for 149 very low‐income households including VASH vouchers for homeless veterans. Under contract with HUD, the Arizona PHA is a Project Based Contract Administrator (PBCA) which provided contract administrative services for 115 HUD‐subsidized rental properties accounting for approximately 8,083 rental units located throughout the state. Through this program participating properties are subsidized, allowing the very low‐income tenants to pay only 30 percent of their incomes on rent and utilities. OTHER SOURCES OF FUNDS Arizona Housing Finance Authority As part of the creation of the ADOH, the legislature also created the AzHFA. The Authority may issue bonds for multi‐family residential projects, bonds to finance single family mortgages establish Mortgage Credit Certificate (MCC) programs. These powers have been granted for the rural areas of Arizona. The seven members of the AzHFA are appointed by the Governor and ARIZONA DEPARTMENT OF HOUSING 49 2012 Consolidated Annual Performance and Evaluation Report (CAPER) represent geographical diversity. During the past year, the AzHFA issued bonds and provided down payment assistance to assist first time homebuyers. They also continued to fund mortgages from a previous year’s bond allocation. Arizona Department of Economic Security Social Services Block Grant (SSBG) SSBG, also known as Title XX, is not homeless specific. However, part of the available funds, some of which are planned at a local level and some at a DES level; have been allocated specifically for services to domestic violence victims in addition to general homelessness. Crisis intervention, which includes shelter and counseling, is provided for domestic violence victims. Services funded for homeless people in general include crisis intervention, case management, and transportation. The U.S. Department of Health and Human Services (DHHS) administers the SSBG funds. Temporary Assistance for Needy Families (TANF) TANF funds are available through the Title IV‐A of the Social Security Act, which are administered by the Department of Health and Human Services. Arizona has submitted amendments to the TANF State Plan in order to establish a TANF emergency services plan. Although the federal regulations do not specify that eligible clients be homeless, they do allow a State TANF Plan, or a portion of the Plan, to be limited to a targeted issue such as homelessness. Arizona has used a portion of the TANF funds for homeless services that include shelter (at a facility or by voucher), prevention, move‐in assistance, and case management services. Arizona Department of Education (ADE) Education for Homeless Children and Youth: Grants for State and Local Activities‐‐In January of 2002, the McKinney‐Vento Homeless Assistance Act was reauthorized as a part of “No Child Left Behind” legislation. This Act requires educational access and equity for children and youth experiencing homelessness, outlines responsibilities for local liaisons, and provides funding to support local grants and statewide initiatives. ADE utilizes a portion of this funding to maintain a State Coordinator of Homeless Education, a role clearly defined by McKinney‐ Vento. The Coordinator is responsible for developing Arizona’s state plan; facilitating coordination with other agencies; providing technical assistance to public school districts; and gathering comprehensive data for federal reporting purposes. The McKinney‐Vento Homeless Assistance Act also outlines specific responsibilities for the Local Education Agencies (LEAs). Each of the 600 public school districts and charter holders in ARIZONA DEPARTMENT OF HOUSING 50 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Arizona have designated a Local Educational Agency Liaison to ensure that students experiencing homelessness:  Are informed of their rights as homeless children and unaccompanied youth.  Are identified, immediately enrolled in, and have a full and equal opportunity to succeed in school.  Are provided transportation to remain in their “school of origin” if it is in their “best interest” and considered feasible.  Have records maintained and available in a timely fashion.  Receive all educational services for which they are eligible, including free breakfast and lunch, Title I, gifted, special education, migrant, and English acquisition services. While all public school districts are held accountable for these responsibilities, some receive financial assistance to do so. McKinney‐Vento sub grants help defray costs associated with educating homeless students, such as transportation services, facilitating initial enrollment services, social services, and delivering supplemental instructional services. Funding was allocated on a competitive basis to those with the highest program quality and greatest need for assistance. McKinney‐Vento funding for Homeless Education was $1,330,033 last fiscal year (FY13). Additionally, school districts must reserve a portion of their Title I funds to meet the unique needs of homeless students. Local Educational Agencies (LEA’s) use a more inclusive definition of homeless to identify and serve children and youth experiencing homelessness. Based on the McKinney‐Vento Homeless Education Assistance Improvements Act of 2001 (McKinney‐Vento), the term homeless children and youth is defined as “individuals who lack a fixed, regular, and adequate night‐time residence.” This definition allows the inclusion of children living in doubled‐up situations with friends and family to receive necessary services. The number of children and youth experiencing homelessness in Arizona continues to increase. Based on the above definition, preliminary data reported by the Arizona Department of Education (ADE), Homeless Education Office shows 31,097 children (pre‐kindergarten through 12th grade) were reported throughout the state as homeless during SFY 2013, which represents a 1.8 percent decrease over 2012. 18,970 of those were in Maricopa county; 5,647 in Pima county and 6,480 in the Balance of State. The minor 1.8 percent decrease is believed to be a result of a change in interpretation of “awaiting foster care placement” within McKinney‐Vento statute. ARIZONA DEPARTMENT OF HOUSING 51 2012 Consolidated Annual Performance and Evaluation Report (CAPER) Seventy‐three percent of the children were reported as doubled‐up, or living temporarily with another family; 22 percent were living in shelters; two percent were living in unsheltered situations, such as cars, parks, campgrounds and abandoned buildings; and three percent were temporarily residing in hotels or motels due to lack of alternative adequate accommodations. Arizona Department of Health Services Projects for Assistance in Transition from Homelessness (PATH) ADHS/DBHS provide outreach to homeless individuals and families under a federal SAMHSA Formula Grant, which provided over $1,179,000 in FY2012. This funding requires a cash match which was $394,167 allocated from State of Arizona’s General Fund through ADHS/DBHS. The ADHS/DBHS utilizes the PATH grant funds to provide an array of services to individuals and families who are homeless and have a serious mental illness, including those with co‐occurring substance use disorders, and to prevent homelessness. In Arizona, PATH funds Homeless outreach services designed to assist individuals who are homeless and potentially have a serious mental illness. The services were provided in locations where persons who are homeless gather, such as food banks, parks, vacant buildings and the streets. ADHS/DBHS utilized the PATH Formula Grant to provide an array of services to Special Populations persons who were homeless and were determined to have a serious mental illness, including those with co‐occurring substance abuse problems. Arizona local PATH contractors provide outreach services, screening and diagnostic services, staff training, emergency assistance, case management, referrals to job search and job education/training organizations, one‐time only rental payments to prevent evictions, security deposits, and referrals to community housing providers to connect individuals with affordable permanent housing. Persons who are identified as homeless and having a serious mental illness or co‐occurring substance use disorder are enrolled in the Arizona behavioral health system to be engaged in treatment and support services to place them on the road to recovery. State General Funds State general funds appropriated to ADHS are used to develop a number of “community housing” programs and level of care systems for persons with serious mental illnesses. These funds provide permanent housing for individuals discharged from the Arizona State Hospital, board and care facilities, supervisory care homes and/or residential treatment programs as described in the Arnold vs. Sarn lawsuit. These funds are used to purchase, lease, or rent properties in either the house model or small apartment complexes that offer consumers safe, decent, stable housing with the availability of in‐home supportive services. The ability to ARIZONA DEPARTMENT OF HOUSING 52 2012 Consolidated Annual Performance and Evaluation Report (CAPER) integrate and maintain clients in the community is a major goal and component of the mental health service delivery system. ADHS provides this supportive service to assist persons with serious mental illnesses in maintaining their independent housing in accordance with their Individual Service Plan. Arizona worked in conjunction with agencies and governments all over the state to ensure that the needs identified in the Con Plan were met, and that as many resources as possible are brought to bear in addressing those needs. In addition to non‐metropolitan areas ADOH worked with entitlement areas which received direct HUD funding, including the counties of Maricopa and Pima and the cities of Avondale, Chandler, Flagstaff, Gilbert, Glendale, Mesa, Peoria, Phoenix, Scottsdale, Tempe, Tucson and Yuma. Through its contract negotiations and funding parameters ADOH promoted the leveraging of additional resources. ARIZONA DEPARTMENT OF HOUSING 53 2012 Consolidated Annual Performance and Evaluation Report (CAPER) V. PERFORMANCE EVALUATION REVIEW The following section provided information about the entitlement programs administered by ADOH. This section will address program activities for the CDBG Program. Community Development Block Grant FY 2012 Assessment NOTE: The CDBG Performance Evaluation Report (PER) required to be submitted as part of the CAPER contains much of the information requested below. Therefore, in many instances the responses reference the PER. Form 4949.3 is not applicable to the state and therefore has not been attached.  Assess the relationship of the use of CDBG funds to the priorities, needs, goals, and objectives identified in the Consolidated Plan. As stated below and in the separate CDBG PER dated September, 2013 covering FY 2005‐2012, CDBG funds have been used to address the primary objective adopted by the CDBG Program, which is the primary goal of Title I. The PER contains detailed information about the specific activities undertaken with each year’s grant funds.  Describe the nature and reasons for any changes. Part II, Narrative Requirement 3 in the PER describes the nature of and reasons for changes in each year covered by the Report.  Assess grantee efforts in carrying out actions described in its Action Plan and certifications, etc. The PER describes in detail the actions taken with each year’s funds, and in narrative form addresses the State’s certifications in terms of civil rights compliance.  Compliance with national objectives. The CAPER identifies the national objective addressed by each CDBG funded activity at column 2 of Exhibit 2B and column 4 of Exhibit 2C. The PER Chart II contains a summary of the funds used from each fiscal year’s allocation to address each national objective. For every year, 80 percent or more of the funds are used for activities that meet the LM national objective.  Steps taken to minimize displacement resulting from CDBG funded activities. Each community requesting CDBG funds must adopt a resolution that incorporates a plan to minimize displacement resulting from CDBG funds. None of the CDBG funds expended resulted in any permanent displacement.  Availability of jobs to LMI persons under economic development projects. There were no economic development projects completed for this reporting period and therefore no availability of jobs to report.  Benefit to limited clientele. CDBG funds have been used for a variety of activities that benefit limited clientele. These include public facilities and public services for persons with ARIZONA DEPARTMENT OF HOUSING 54 2012 Consolidated Annual Performance and Evaluation Report (CAPER) disabilities, victims of domestic violence, seniors, non‐English speaking persons, and homeless persons. The CAPER Exhibit 2B and 2C provided detailed information about the nature of each such activity and the number of persons served.  Receipt and use of program income (PI). Arizona CDBG Program has two grantees that have an approved housing rehabilitation revolving loan fund. In each case the grantee used or will use the PI before requesting additional CDBG funds. Where it is anticipated that a grantee may receive PI in the future, a Special Condition is added to the contract that requires reporting of such to the state. All PI received and/or awarded is reflected in Chart 1 in each year’s PER.  Completed Rehabilitation that identifies type of program and number of projects/units completed, CDBG/private/other funds used. The CAPER Exhibits 1, 2B and 2C; and PER Charts 3, 4 and 5, indicates the number of housing rehab activities, the number of units/projects completed and the amount of CDBG and non‐CDBG funds used for each activity as well as a summary of such information. In all cases, rehab programs provide assistance thru 0% interest, no monthly payment DPL liens. Progress toward benchmarks in identified Revitalization Strategy Areas. The Department’s CDBG Program does not currently have any approved Revitalization Strategy Areas. Additionally, no requests for approval were submitted for FY2012. Affirmative Marketing Actions and Outreach to Minority‐ and Women‐Owned Businesses During this reporting period, the state continued to require that all recipients of State HOME dollars adopt an affirmative marketing plan as described in 24 CFR 92.351. Requirements were set forth in funding contracts and consist of actions required by recipients to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market. Recipients were required to report affirmative marketing efforts in their monthly reports, and to submit a final contract closeout report to the state that summarizes and assesses the results of their affirmative marketing practices. All recipients were required to show documentation regarding affirmative marketing efforts in their HOME files at the time of on‐site monitoring and any instances of non‐compliance were viewed as a ‘concern,’ requiring corrective measures to be taken by the recipient. To continue to assist subrecipients in identifying women‐ and minority‐owned businesses, the Arizona Commerce Authority provided, through its Minority/Women Services Offices, a number of services to identify, encourage and coordinate efforts of women‐ and minority‐ owned businesses. Efforts made by the state to this end included: ARIZONA DEPARTMENT OF HOUSING 55 2012 Consolidated Annual Performance and Evaluation Report (CAPER)  An Executive Order (2007‐21) issued by former Governor Janet Napolitano, affirming the state’s support of Minority‐ and Women‐Owned Businesses,  The publication of Arizona Directory of Minority/Women‐Owned Businesses, which offers a statewide listing of both certified and non‐certified small businesses, which is available both in hard‐copy form and directly on‐line;  The Small Business Assistance Center, which helps these businesses become registered to sell products and services to government entities;  The Governor’s Small Business Advocate, which provided assistance with appeals related to procurement issues;  There is an Annual State Procurement Conference, which minority‐ and women‐owned businesses are encouraged to attend;  The Minority/Women Services Offices, which conducts seminars and workshops to help state agencies and local companies, procure goods and services from qualified firms. ARIZONA DEPARTMENT OF HOUSING 56 2012 Consolidated Annual Performance and Evaluation Report (CAPER) VI. INVITATION FOR CITIZEN COMMENTS ADVERTISEMENT REQUESTING PUBLIC COMMENT Public Comments Solicited 2012‐2013 State of Arizona Consolidated Annual Performance Evaluation Report The Arizona Department of Housing (ADOH), on behalf of the State of Arizona, has prepared its Federal FY 2012 Consolidated Annual Performance Evaluation Report (CAPER), which covers the period of July 1, 2012 to June 30, 2013. The CAPER discusses the progress the State has made in meeting its goals for the following federal programs of the U.S. Department of Housing and Urban Development (HUD), which are administered by the State: Community Development Block Grant (CDBG); HOME Investment Partnership Program; Housing Opportunities for Persons With AIDS (HOPWA); and Emergency Shelter Grant (ESG), as well as other state and federal programs relating to housing development. The ESG funds are administered by the Arizona Department of Economic Security. ADOH is also making available for public review, the CDBG Performance Evaluation Report (PER) for Fiscal Year 2012. This report is part of the CAPER but contained in a separate document. A draft of the CAPER and PER reports will be available August 26, 2013 on ADOH’s website (www.azhousing.gov) or by contacting the person listed below. Andrew Rael, Assistant Deputy Director, Programs Arizona Department of Housing 1110 W. Washington Suite 310 Phoenix, AZ 85007 (602) 771‐1000 phone TTY (602) 771‐1001 caper@azhousing.gov The law authorizing the CAPER requires that, prior to submission to HUD; the public must be given an opportunity to comment on the Report. Public comments are encouraged; however, all comments must be made in writing to the address or email listed above and must be received by ADOH no later than 5:00 p.m., September 11, 2013. NOTE: It is the policy of ADOH to comply in all respects with the non‐discrimination requirements of Title II of the Americans with Disabilities Act and Section 504 of the Rehabilitation Act of 1973. Individuals who require the reports to be provided in an alternative format may contact Joy Johnson at joy.johnson@azhousing.gov to make their needs known. Requests should be made as soon as possible to allow sufficient time to arrange the accommodation. Si necesita ayuda en español para entender este documento, puede solicitarla sin costo adicional, llamando al número (602) 771‐1010. Publication Date: August 19, 2013 ARIZONA DEPARTMENT OF HOUSING 57 2012 Consolidated Annual Performance and Evaluation Report (CAPER) VII. LIST OF EXHIBITS EXHIBIT 1: EXHIBIT 2A: EXHIBIT 2B: EXHIBIT 2C: EXHIBIT 3A: EXHIBIT 3B: EXHIBIT 3C: EXHIBIT 4A: EXHIBIT 4B: EXHIBIT 4C: EXHIBIT 5: EXHIBIT 6: EXHIBIT 7: EXHIBIT 8: EXHIBIT 9: EXHIBIT 10: EXHIBIT 11: Fiscal Year 2012 Summary of Objectives:  Community Development Objectives  Owner‐Occupied Housing Objectives  HOPWA – information contained in the HOPWA CAPER  Homeless Objectives  Rental Housing Objectives  Special Needs Housing FY 2012 Summary of CDBG Accomplishments FY 2012 Summary of CDBG Project Beneficiaries FY 2012 CDBG Investment by Activity and Persons Served FY 2012 Summary of HOME Accomplishments FY 2012 Summary of HOME Project Beneficiaries FY 2012 HOME Investment by Activity and Persons Served FY 2012 Summary of HTF Accomplishments FY 2012 Summary of HTF Project Beneficiaries FY 2012 HTF Investment by Activity and Persons Served HUD 40107‐A HOME Match HUD 40107 APR HOME PI and MBE/WBE MBE and WBE Report Non‐CDBG Housing Units Assisted Geographic Distribution Map LIHTC Program 2013 Reservation List Housing Dollar Accomplishment by Funding Source/by Program Activity ARIZONA DEPARTMENT OF HOUSING 58 Arizona Department of Housing Consolidated Annual Performance Evaluation Report (CAPER) Review Checklist updated 11/15/2009 When reviewing the CAPER, please bear in mind:  Ascertain whether the activities undertaken during the year were in compliance with program requirements, (eligible, met national objectives, etc.).  Check if any Integrated Disbursement and Information System (IDIS) information needs to be updated and identify any technical assistance needs.  Refer to the 24 CFR Parts 91 and 570, “Consolidated Plan Revisions and Updates; Final Rule,” in the Federal Register, Volume 71, Number 27, published on February 9, 2006. NEW  Refer to the “Notice of Outcome Performance Measurement System for Community Planning and Development Formula Grant Programs, Federal Register, Volume 71, Number 44” published on March 7, 2006. NEW  Please add/attach to this checklist any comments, notes, relevant e-mails and correspondence, etc. Submission 1. Was the report received on time? YES NO importance of statutory deadline for submission. If not, grantee should be advised of 2. Is the report properly authorized by the chief executive or designee? If no, a signed cover letter should be obtained. YES 3. Does the report cover the appropriate program year? YES NO NO 4. The grantee is a recipient of the following program allocations that should be covered under this reporting period. Check as appropriate: CDBG HOME ADDI ESG HOPWA Citizen Participation 1. Is there evidence that the 15-day comment period for citizens was provided? YES NO Section VI, page 57 and attachments. If not, such information should be obtained. 2. Were there any citizen comments? YES NO page 27 3. If yes, did the grantee summarize the responses to the citizen comments? YES NO NA General Questions 1. Does the report include a self-evaluation? CAPER CHECKLIST YES 1 of 8 NO page 27 thru 30 10/16/2007 2. Geographic Distribution of Investments a. Does the report describe the geographic distribution and location of investments? (91.520(a)) YES NO pages 6-9,32,35,40, Exhibit 9 b. If yes, were investments made in areas of low-income and minority concentration? YES NO NA pages: 6-10,32,35,40; Exhibits: 2B, 3B, 4B, 9 If no and if there is a minority population not being served, then please discuss with FHEO. 3. Has the grantee provided a summary of any of the following actions?: a. b. c. d. e. f. g. h. i. obstacles to serving underserved needs? foster and maintain affordable housing? eliminate barriers to affordable housing? overcome gaps in institutional structures? public housing and resident initiatives? lead-based paint hazards? compliance and monitoring? reduce number of families in poverty? other (if a yes, identify in space below)? YES YES YES YES YES YES YES YES YES NO NO NO NO NO NO NO NO NO NA NA NA NA NA NA NA NA NA page 21 page 21 page 22 page 22 page 23 page 23 page 24 page 25 For performance measurement information, please refer to the Con Plan/Action Plan Tables (optional to use because the grantee may create their own format to provide the same information) NEW: o o o o o o o o o Table 1A Homeless and Special Needs Populations Table 1B Special Needs (Non-Homeless) Populations Table 1C* Summary of Specific Housing/Community Development Objectives Table 2A* Priority Housing Needs/Investment Plan Table/Goals/Activities Table 2B* Priority Community Development Needs Table 2C* Summary of Specific Housing/Community Development Objectives Table 3A* Summary of Specific Annual Objectives Table 3B* Annual Housing Completion Goals Table 3C Consolidated Plan Listing of Projects * These Tables may have the grantees’ CAPER accomplishments information. There is also a new Section 108 Loan Guarantee Accomplishments Report. Note: in the CPMP Tool, these tables are called “Priority Housing Needs Worksheet,” “Homeless Needs Worksheet,” “Community Development Worksheet,” “HOPWA Worksheet,” “Non-homeless Needs Worksheet,” “Specific Objectives Worksheet,” “Projects Workbook,” and “Section 108 Report Worksheet.” 4. Does the report include a summary of objectives and outcomes, including a comparison of proposed verses actual outcomes of each outcome measure? (91.520) NEW YES NO pages 11-12, Exhibit 1 a. Did the grantee explain why progress was not made towards goals and objectives? (91.520) NEW YES NO N//A – Progress made toward all goals and objectives CAPER CHECKLIST 2 of 8 10/16/2007 5. Does the summary of accomplishments identify the following categories of persons assisted with housing (refer to Section 215 definition of affordable housing for rental and homeownership in 92.252 and 92.254): a. number of extremely low-income (0-30% of MFI) renter households assisted? YES NO NA Exhibits: 1, 2B, 3B, 4B b. number of extremely low-income (0-30% of MFI) owner households assisted? YES NO NA Exhibits: 1, 2B, 3B, 4B c. number of low-income (31-50% of MFI) renter households assisted? YES NO NA Exhibits: 1, 2B, 3B, 4B d. number of low-income (31-50% of MFI) owner households assisted? YES NO NA Exhibits: 1, 2B, 3B, 4B e. number of moderate-income (51-80% of MFI) renter households assisted? YES NO NA Exhibits: 1, 2B, 3B, 4B f. number of moderate-income (51-80% of MFI) owner households assisted? YES NO NA Exhibits: 1, 2B, 3B, 4B g. number of homeless individuals/families assisted? YES NO NA Exhibit 1 h. number of non-homeless special needs persons? YES NO NA Exhibit 1 (special needs persons includes elderly, frail elderly, persons with mental, physical, and/or developmental disabilities, persons with alcohol or other drug addiction, persons with HIV/AIDS and their families and public housing residents (91.215) NEW). 6. Did the grantee include information on meeting the needs of homeless persons? (91.100, 91.205, and 91.210)? NEW YES NO NA pages: 12, 17-20 (includes homeless prevention and emergency, transitional, permanent supportive, and permanent housing for the homeless, chronically homeless, and different homeless subpopulations). Questions for all Programs: 1. Are the projects/activities eligible and categorized correctly? If not, identify the projects/activities that may be ineligible. CDBG YES NO NA Exhibits: 1, 2A, 2B, 2C, 11 (check matrix codes and national objectives, refer to PR03) HOME YES NO NA Exhibits: 1, 3A, 3B, 3C, 11 ESG YES NO NA Pages 40-42 HOPWA YES NO NA See HOPWA CAPER 2. During the past program year did the grantee meet timeliness of expenditures requirements? CDBG year) 0.82 HOME ESG HOPWA_ YES NO NA page 29 (1.5 standard 60 days prior to end of program YES YES YES NO NO NO NA page 29 (24 months commitment / 5 year disbursement) NA page 29 (180 days commitment / 24 month expenditure) NA page 29 (balance should not exceed 3 years of funds) CAPER CHECKLIST 3 of 8 10/16/2007 3. Are there any relocation or displacement issues (i.e. with acquisition, rehabilitation or demolition activities)? If yes, please notify the Relocation Specialist. CDBG HOME ESG HOPWA YES YES YES YES NO NO NO NO NA NA NA NA 4. Using both IDIS and any supplemental information, has the grantee identified: a. program income generated? (Refer to PR26 for CDBG or PR27 and Annual Performance Report HUD 40107 form for HOME). CDBG HOME ESG HOPWA YES YES YES YES NO NO NO NO NA Page 35; See also PER PR26’s for 2012 - 2005 NA Page 37, Exhibit 6 NA Page 40 NA Page 46 b. If yes, is the program income (general program income or revolving loan) reported in the CAPER the same amount reported in IDIS? (Refer to PR26 for CDBG or PR27 and Annual Performance Report HUD 40107 form for HOME) CDBG HOME ESG HOPWA YES YES YES YES NO NO NO NO NA Page 35; See also PER PR26’s for 2012 - 2005 NA Page 37, Exhibit 6 NA Page 40 NA Page 46 Please note: for the CDBG program, program income may be generated from revolving funds, float-funded activities, sale of real property, other loan repayments, prior period adjustments, loans outstanding or written off, parcels of CDBG-acquired property available for sale, or lump sum drawdowns. 5. Regarding data in IDIS, has the grantee: a. Entered performance measurement data (including objectives, outcomes, and outputs) NEW ? CDBG YES NO NA (PR83 and if applicable PR84) HOME YES NO NA (PR85) ESG YES NO NA (PR81) HOPWA YES NO NA (PR80 and PR82) b. According to IDIS, are there any slow-moving projects (i.e. more than 2 years)? If yes, please describe. Refer to PR02. CDBG HOME ESG HOPWA_ YES YES YES YES NO NO NO NO NA NA NA NA c. Are any activities reported as the Activity Status Code in IDIS, “Underway” or “Funds Budgeted”, but should be “Completed”? If yes, please explain. CDBG YES NO NA HOME YES NO NA Are HOME activities “Completed” within 120 days of final draw (see PR22 report CAPER CHECKLIST 4 of 8 10/16/2007 “Status of Activities”) ESG YES NO NA HOPWA YES NO NA Check if there are any unexpended funds for “Completed” activities and if any funds needs to be reprogrammed. d. Did the grantee complete beneficiaries’ data (i.e. race/ethnicity, income category, etc.)? NEW CDBG YES NO NA Exhibits: 1, 2B; PER Charts: 4, 5 (for CDBG is extremely low-income, low-income, moderate-income households beneficiaries data collected (91.215.(a))? HOME YES NO NA Exhibits: 1, 3B ESG YES NO NA See ESG Conplan Suite submission HOPWA YES NO NA Exhibit 1; See also HOPWA CAPER Community Development Block Grant (CDBG) 1. Identify the percent of CDBG funds the grantee determined was used for activities considered to benefit persons of low and moderate income: 87% (Please refer to the Financial Summary Report or PR26 for the information) a. Did the grantee expend at least 70% of its annual CDBG funding, excluding Planning/Administration expenses, to benefit low and moderate income persons over the period certified to in its Annual Action Plan (1, 2 or 3 years)? YES NO NA Exhibits: 1, 2A, 2B, 2C; PER PR26’s 2012-2005 b. If no, did the grantee provide a summary of why funded activities did not meet the national objective requirements and of the steps that grantee has taken to YES NO NA ensure that this will not happen again? c. If the grantee is using a multiyear certification, identify the years in the Specific CDBG Certification: Year(s) 2012, 2011, 2010, 2009, 2008, 2007, 2006, 2005. d. If multifamily unit housing structures are assisted with CDBG funds, did the grantee properly calculate the amount of CDBG funds counted toward the 70% certification to benefit low and moderate income persons? YES NO NA See PER PR26’s 2012 - 2005 2. Did program activities trigger one-for-one replacement requirements? YES NO NA Page 54 a. If so, has the jurisdiction replaced units on a one for one basis as required by Section 104(d)? YES NO NA b. Were publicly assisted housing units (Section 8 or public housing) demolished? YES NO NA 3. For economic development, did the grantee report the number of: a. businesses assisted during reporting period? YES NO NA No ED Activities b. jobs created/retained during reporting period? YES NO NA No ED Activities c. extremely low-, low-, and moderate-income persons assisted during reporting CAPER CHECKLIST 5 of 8 10/16/2007 period? YES NO NA No ED Activities d. activities for which the low/mod jobs national objectives have not been met, is the required narrative included? YES NO NA No ED Activities 4. For limited clientele activities not qualifying under the presumed benefit category, is the required narrative included? YES NO NA No LMC not presumed 5. Did the grantee describe and meet Neighborhood Revitalization Strategy Areas (NRSAs) outputs and outcomes/accomplishments? YES NO NA State has no NRSA’s at this time. 6. Is the total expenditure of funds consistent in the narrative with what is reported in IDIS NEW? YES NO NA Page 31; Exhibit 11 7. What is the percent of funds expended during the year for public service activities? 0.94 %. If more than 15%, then the grantee has exceeded the public service cap. (Please note, if the grantee has undertaken public service activities within an approved NRSA using a CBDO, then the disbursements for these activities should be excluded from the analysis. If an activity is re-categorized as public service, please recalculate the overall percentage of funds for public service. Please check that the public service funding amount in the narrative is consistent with what is reported in IDIS.) Please refer to PR03 and PR26. 8. What is the percent of funds obligated during the year for planning/admin activities? 2.58%. If more than 20%, then the grantee has exceeded the Planning/Administration cap. (Please check that the planning/admin funding amount in the narrative is consistent with what is reported in IDIS) Please refer to PR03 and PR26. 9. Was the amount of program income held by the grantees as of the last day of the program year more than 1/12th of the entitlement’s grant? YES NO NA Page 35; PER 2012 PR26 Please exclude Revolving Loan Funds and any interest earned from program income from this calculation. Please refer to PR01 and PR09. (570.504(b)(iii)). a. If yes, did the grantee return excess program income to HUD to be placed in the grantee’s line of credit? Please check with Program Support. YES NO NA b. Has any interest earned on revolving loan fund program income been returned to the U.S. Treasury? Please check with Program Support. YES NO NA (If the Financial Summary or PR26 reflects revolving loan fund program income and no interest has been returned check with grantee regarding status of returning grant funds). HOME 1. For the Participating Jurisdictions’ (PJs) match: a. What is the match requirement for the period covered by the CAPER: 25% 12.5% 0% NA b. If the match requirement is either 12.5% or 0%, was the grantee determined to be fiscally distressed, or due to the PJ receiving a Presidentially Declared Disaster designation? Fiscally Distressed Disaster Area NA c. If the match reduction is due to disaster area designation, what is the period CAPER CHECKLIST 6 of 8 10/16/2007 covered by the match reduction in Federal Fiscal Years? d. Has the HOME Match Report HUD-40107-A form been submitted with the CAPER? YES NO NA (If the report has not been submitted, the PJ should be requested to submit it). Exhibit 5 e. Based upon the amount of HOME funds expended during the PJ’s program year, did the PJ contribute the appropriate amount of match (25%,12.5%)? YES NO NA Exhibit 5 2. For HOME jurisdictions with completed rental housing projects, are the results of on-site property inspections noted in the narrative? YES NO NA pages 38-39 3. Does the CAPER contain an assessment of the PJ’s affirmative marketing actions? (91.520(d) and 92.351(a)) YES NO NA Page 36 If no, notify FHEO. 4. Does the CAPER contain an assessment of the PJ’s outreach efforts and a report of contracts and subcontracts with Minority Business Enterprises (MBEs) and Women’s Business Enterprises (WBEs)? (refer to the Annual Performance Report HOME Program Part III of the Annual Performance Report HUD-40107 form? (91.520(d) and 92.351(b)) YES NO NA Page 37; Exhibit 7. If no, notify FHEO. Emergency Shelter Grant (ESG) 1. Did the grantee provide a description of the sources of funds used to meet match requirements of the ESG program? YES NO NA Pages 40 - 45 2. Have the match requirements been met (42 USC 11375(a)(1))? Pages 40 - 45 3. Are the ESG caps met for NEW: a. ESG services (30% cap)? b. Homeless prevention (30% cap)? c. Operating staff costs (10% cap)? d. Administration (5% cap)? YES YES YES YES NO NO NO NO YES NO NA NA Pages 40 - 45 NA Pages 40 - 45 NA Pages 40 - 45 NA Pages 40 - 45 Housing Opportunities for Persons With AIDS (HOPWA) 1. Has the grantee summarized activities carried out to meet needs, evaluation of meeting objectives, leveraging public and private resources, how funds were distributed, barriers or trends, description of sponsor selection (including grassroots faith-based and other community organizations), and monitoring/oversight process? YES NO NA Pages 46 - 47 2. Has the grantee identified activities that provide short-term rent, mortgage, utility assistance payments to prevent homelessness; tenant-based rental assistance; and/or units provided in housing facilities that are being developed, leased, or operated with HOPWA funds (91.220 (l)(3))? NEW YES NO NA Pages 46 - 47 3. Have other resources used in conjunction with HOPWA funds been identified? YES NO NA Pages 46 - 47 4. Has the grantee completed the HOPWA accomplishment data Chart 1, 2 and 3 (see CAPER CHECKLIST 7 of 8 10/16/2007 HOPWA CAPER Measuring Performance Outcomes, HUD 40110-D, Rev 1/2006)? NEW YES NO NA Exhibit 1 Other Issues: 1. Are there any grantee staff or management capacity issues? please describe. 2. Is the grantee in need of technical assistance or training? please describe. 3. Are there any other comments? YES YES YES NO NO NA If yes, NA If yes, NO If yes, please describe. Signature Page _____________________________________________________ CPD Representative (Date) _____________________________________________________ Program Manager (Date) _____________________________________________________ Director (Date) CAPER CHECKLIST 8 of 8 10/16/2007