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SFHA finance update: admin-fee changes, IT upgrade and pension exposures detailed
Summary
SFHA staff reported a $150,000 near-term HCV admin subsidy shortfall, a planned network/IT infrastructure upgrade now estimated closer to $2.0 million, and pension-related exposures of roughly $14 million (pension withdrawal liability) and about $234 million (current employees) as of Sept. 30; staff also said $5.6 million of capital reserves were invested in U.S. Treasuries.
SAN FRANCISCO — At its July 31 meeting, the Housing Authority’s finance team reviewed nine-months fiscal forecasts and an investment strategy intended to shore up pension liabilities and program operations.
Senior budget analyst Roy Lobel told commissioners that Housing Choice Voucher (HCV) admin subsidy revenue was generally in line with the approved budget but showed a current shortfall of about $150,000; Lobel said HUD admin rates recently rose 3% and proration assumptions were increased to 91 percent, improving the year-end outlook.
Lobel also said SFHA has budgeted a network and IT infrastructure upgrade initially estimated at about $1.5 million; current planning shows that cost moving toward $2.0 million, with a roughly $300,000 allocation shifting to the HCV program. CEO Tanya Lettishu said funds have been set aside and staff are collecting quotes to proceed.
On liabilities, Lobel reported two principal pension exposures: a pension withdrawal liability for craft workers estimated at about $14,000,000 (as of Sept. 30) and a larger liability for current employees and the management team estimated at about $234,000,000 (as of Sept. 30). Lobel said SFHA would discuss these further in the investment program portion of the agenda.
In the investment update, finance staff said SFHA placed approximately $5.6 million of excess capital-reserve funds into U.S. Treasury securities, earning about 5.075% to preserve capital while improving liquidity available for near-term liabilities.
Commissioners asked whether admin-fee increases would be used to restore staffing and reporting capacity. Lobel and CEO Lettishu said allocation depends on contractual arrangements — some admin fee increases flow to contractors — and that First Pick is advising SFHA on where to add staff to strengthen contract monitoring.
The commission did not take separate formal finance actions at the July 31 meeting; staff said quarterly reports on investments and a deeper briefing on wait-list consolidation and Faircloth-to-RAD budgeting would return to the board.
