INCOME: via 380 Grant and NELCDC Activities $450,104

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1 North & East Lubbock Community Development Corporation P.O. Box 3893 Lubbock, Texas Phone: (806) Fax: (806) Board of Directors Vacant Chairperson Vernita Holmes Vice Chairperson Sonny Garza Treasurer Mario Ybarra Asst. Treasurer Rosalind Alexander Secretary Monique Coleman Executive Director Nathan Cage Thomas Harris III David Haynes Henry Ray Lozada Cosby Morton Elena Quintanilla Quincy White Vacancy Vacancy Vacancy Vacancy Advisory Members David Langston Greg Jones February 12, 2015 Cheryl Brock Executive Director of Budget P.O. Box Lubbock, TX Ms. Brock: The North & East Lubbock CDC respectfully requests an allocation of $342,485 as a portion of oil and gas royalties in the form of a Section 380 Agreement as permitted by Local Government Code Please note I have modified or added a few line items to this budget request. Although the manner in which funding allocation has been modified, the requested amount of $342,485 has not changed. All budget modifications or additions will be identified by an asterisk (*) and each budget category contains an explanation of the change. Please find the NELCDC summary and proposed budget below. Thank you for your consideration. INCOME: via 380 Grant and NELCDC Activities $450,104 The revised budget provides a summary of the NELCDC s anticipated income. In addition to the requested $342,485 via a grant management agreement from the City of Lubbock, the NELCDC anticipates $33,000 in fundraising from its annual banquet; the NELCDC is working to promote advertising space in its newsletter with first year income estimated at $1,000; annual board donations up to $500 will be included as an annual illustration of support from a fully voluntary (non-compensated) Board; the NELCDC is working to identify home builders to build out King s Dominion Phase II and therefore we are projecting the potential sale of at least six (6) lots for a total income of $72,000; the NELCDC savings account yield will be shown in the interest income line; and there was training for which the NELCDC paid (for the Executive Director) but since a scholarship was received, the NELCDC was reimbursed a portion of the expenses at approximately $919 in October Upon the completion of the NELCDC s three-year audit, the NELCDC plans to seek out other funding sources to support general operating expenses. Rob Allison Carolyn Thompson Conwright Irasema Velaquez 1

2 OPERATING BUDGET: General Administration $203,267 The eight (8) budget categories within the operating budget are as follows: A. (*) Administration (Governance & Management) - $6,100 This budget category amount was modified but the request amount did not change. This category includes board meeting expenses, training and strategic planning for the NELCDC Board of Directors and staff, as well as director s and officer s liability insurance. General administrative services will cover the costs for requests such as a Certificate of Fact from the Secretary of State or the Charitable Permit fee as required by the City of Lubbock. These are minimal expenses but are critical for operational functions. B. (*) Personnel (Salaries, Payroll Taxes, and Car Allowance) - $98,824 This budget category includes payroll taxes and a portion of salaries for three (3) staff members: three-fourths (3/4) of the salary for the executive director, one-third (1/3) of the salary for the program manager, and three-fourths (3/4) of the salary for the administrative assistant. The NELCDC has 24 pay periods - the 15 th and end of each month. Staff time has been divided to show a representation of how each employee s time will be spent administering the various functions of the North and East Lubbock CDC. For example, one-third of the program manager s time allocated under line item B2 will include marketing, fundraising, general outreach, project oversight, and revamping the NELCDC s micro-lending program. *As a result of a new employee policy, car allowances for the Program Manager and Administrative Assistant were reduced from $2,365 to $1,500. Car allowance will be reimbursed at $0.575/mile per pay period or monthly. C. Health Benefits - $21,300 The NELCDC Board of Directors has approved a monthly allocation of $550 for the three (3) employees on staff. Two (2) staff members are enrolled in an employee group plan with Blue Cross Blue Shield. One staff member is seeking healthcare benefits outside of the benefits provided by the NELCDC; however, an allocation is still requested in the event of unanticipated health needs. The NELCDC three (3) member staff team is also enrolled in a group dental/vision plan with Ameritus. D. Professional Development & Training - $22,000 The NELCDC has budgeted for the training and development of its employees. The NELCDC currently has one (1) HUD-certified contract housing counselor and (1) one full-time staff member in the process of becoming a HUD-certified housing counselor. Certification is a federal requirement to administer housing counseling; therefore certification establishment and maintenance are mandatory. Additionally, the NELCDC has budgeted to send two (2) NELCDC staff (or board members) to the May 20-23, 2015 Neighborhoods, USA conference in Houston, Texas. Participation in Neighborhoods, USA will bolster the NELCDC s efforts to enhance community outreach and participation. Neighborhoods, USA participation will help the NELCDC staff ascertain methods and techniques for grassroots neighborhood organizing. Lastly, the NELCDC has planned for Texas Association of Community Development Corporations (TACDC) training for the Executive Director and has established a small allocation for unexpected but necessary training (for staff or board members) that may be offered during the FY budget cycle. E. Memberships - $1,450 The NELCDC has budgeted for memberships to the following organizations: TACDC; Lubbock Chamber of Commerce; Neighborhoods, USA; and Sam s Club as well as establishing a small allocation for miscellaneous or unexpected mid-year requests for organizational memberships that will help the staff or board further the mission of the NELCDC. *The Avalanche Journal subscription was added to this category for $230. F. Support (Professional) Services - $33,443 This budget category includes legal services, accounting services, and auditing services, which are all necessary to support and ensure the continued legitimacy and accountability of the NELCDC. The NELCDC has retained Garrett & Swann LLP, to audit financial statements for 2012, 2013, and

3 The NELCDC has also retained local accountant, Bill Morris, CPA (of Green & Morris) who will provide monthly book-keeping reconciliations for the NELCDC. *In December 2014, the NELCDC hired Mayfield Law Firm as its new legal counsel. As a result of the transition of old business between the prior and new legal teams, this line item was increased. A portion of the funds moved to this category are remaining funds due to the elimination of the contract housing counselor position. G. Contractual Services - $5,050 The NELCDC s Xerox machine is leased through Marlin Services. This category itemizes the expenses for this equipment as well as the budget for website maintenance and service fees. H. Office Operational Expenses - $6,600 This budget category includes office supplies, postage, large printing for brochures and other promotional materials, and the NELCDC phone service provider. *The phone budget was increased because the NELCDC switched its provided (from ATT to Suddenlink) and bundled its services; additional fees were incurred. Note line item 5075 is shown because it is an operating expense but the NELCDC is not requesting funding to establish its independent network. I. Loan Payments (Shown in Budget as Operating Expense but No Funds Requested) *Note, category I and specifically line 5141 will not be paid with funds being requested via the grant management agreement. Therefore, the shown budget is not included in the requested amount. J. Community Champion Awards (CCA) Banquet (FUNDRAISER) - $8,500 *The awards banquet fees were accidentally left out of the initial request. Although this $8,500 expense was added to the budget request, the overall request amount did not change. The $8,500 in this category was partially from the eliminated HUD contract counselor position eliminated. K. Donations (Shown in Budget as Operating Expense but No Funds Requested) *Note, category K line items will not be paid with funds being requested via the grant management agreement. Therefore, the shown budget is not included in the requested amount. L. Micro-Lending Program (Shown in Budget as Operating Expense but No Funds Requested) *Note, category L line items will not be paid with funds being requested via the grant management agreement. Therefore, the shown budget is not included in the requested amount. PROGRAM BUDGET 1: Housing/Credit Counseling $22,264 A. Housing/Credit Counseling $22,264 Housing/Credit Counseling is a critical function for the NELCDC. Housing counseling includes conducting general intake with clients interested in becoming first-time homebuyers. This process also includes financial literacy and homebuyer education workshops, review of credit reports, and action planning and budgeting in preparation of becoming a homeowner. Housing counselors help clients with the pre-qualification for a mortgage loan, and assist clients with finding the right home, closing the deal, as well as post-purchase follow-up 90-days following closing. The services under this budget category include one-third of the staff time for the NELCDC s program manager; supplies and postage needed to facilitate the program; Counselor Max, which is a web-based system that will be used for intake, client tracking, and tri-merge credit report requests; funds needed to facilitate classes on a monthly or quarterly basis in addition to in-person one-on-one consultations; and payroll taxes. *The NELCDC eliminated the HUD-certified contract housing counselor position budgeted at $21,008. These funds have been allocated for other abovementioned operating expenses and $8,500 was allocated to supply rehab materials for the Dunbar-Manhattan Heights adopt-a-spot effort. 3

4 PROGRAM BUDGET 2: Urban Homestead (Adopt-a-Spot) Program - $116,954 There are four (4) budget categories within the Program 2: Urban Homestead ( Adopt-a-Spot ) Program budget. The categories, which contain detailed line items are: A. Personnel (Salaries, Payroll Taxes) - $28,394 This budget category includes a portion of salaries for two (2) staff members: one-fourth (1/4) of the salary for the executive director and one-fourth (1/4) of the salary for the administrative assistant. The executive director and administrative assistant will spend time developing the various components of the program, including but not limited to materials, marketing, structure, and general function. This category also includes payroll taxes proportionate to the salary expenses for this new program. The remaining one-third (1/3) of the program manager s time is listed below under housing counseling, which is a critical function of this new program. B. Reserves (Down-Payment & Closing Cost Assistance & Materials) - $65,000 The new program is designed to help the NELCDC improve target neighborhood areas by cleaning up vacant or dilapidated properties, establish community gardens, and working to establish new homeowners upon the lots. The NELCDC is working to establish partnerships with Habitat-for- Humanity as well as other local entities, non-profits, and schools to begin building relationships and organizing neighborhoods. Once the program is implemented, which is anticipated for fall 2014, the NELCDC would like to use the requested reserve funding for down-payment and closing cost assistance for prospective new homebuyers as well as housing rehabilitation materials when applicable. If a home is in moderate condition and meets program criteria, rehabilitation will be pursued in lieu of new construction. In the stated scenario, funds from this budget category will enable the NELCDC to facilitate the needed rehabilitation. *An additional $8,500 is budgeted to complete repairs on homes in the Dunbar-Manhattan Heights Adopt-a-Spot program. C. Community Meeting Materials - $9,000 Community outreach is the most critical component of this new program. The NELCDC firmly believes a lack of participatory planning as a key element of this new program will result in the detriment of its success. This budget category is allocated to allow the NELCDC to obtain ideal meeting facilities for outreach efforts and in doing so being able to provide materials, signage, and food during program facilitation efforts. D. Housing/Credit Counseling - $14,560 As stated above, the remaining one-third (1/3) of the program manager s time is allocated for housing counseling. The program manager will work to get potential homebuyers ready for homeownership through the community outreach and education component of the program. Other City Funds The North & East Lubbock Community Development Corporation ( NELCDC ) is a certified CHDO (Community Housing Development Organization) by the City of Lubbock. The City of Lubbock Community Development Department provides 15% of its HOME (federal) funds to CHDOs in Lubbock. Since there are two CHDOs in Lubbock, if all qualifying criteria are met, the NELCDC is eligible to receive 7.5% of the funds required to be set-aside for CHDOs. CHDO funds are provided to the NELCDC in the form of new construction funds (to build new single-family housing) as well as down-payment and closing cost assistance. Currently, the NELCDC has $145,000 in new construction funds and approximately $42,000 in down-payment and closing cost funds. The proposed detailed budget follows this budgetary summary. Please do not hesitate to contact me if you have questions or concerns. Regards, Monique Coleman Executive Director North & East Lubbock CDC 4

5 FY Approved NELCDC Budget FY Requested Income (Sec. 380 Grant Management Agreement) $ 342, FY Operating Budget $ 203, FY Program 1 Budget $ 22, FY Program 2 Budget $ 116, This budget was approved by the Lubbock City Council on April 9, The full budget was approved for disbursements on a quarterly basis. First quarterly disbursement upon contact execution followed by conditional funding on July 1, Aug. 1, and Sept. 1. QuickBooks Accounting Codes 4000 Tax ID: OPERATING BUDGET: General Administration INCOME 4001 Sec. 380 Grant Management Agreement from City of Lubbock $ 342, Community Champion Awards Banquet $ 33, e-newsletter Advertisement (quarterly ads) $ 1, Board & Advisory Member Donations $ King's Dominion Lot Sales (6 lots x $12,000) $ 72, Interest Income $ Scholarships and Refunds $ TOTAL PROJECTED INCOME $ 450, BUDGET 5000 A. Administration (Governance & Management) $ 6, Board Meeting Expenses $ 2, Training and Strategic Planning Session(s) for Board Members 1, (D&O) Directors and Officers Liability Insurance 2, *4. Admin. Services (SOS Cert. of Fact, Charitable Permit fee, etc.) TOTAL $ 6, B. Personnel (Salaries, Payroll Taxes, Car Allowance) $ 98, Executive Director Salary ($78,400) - (3/4 of time) $ 58, Program Manager Salary ($43,680) -(1/3 of time) 14, Administrative Assistant Pay (10.58/hr.) ($22,006.40) - (3/4 of time) 16, Payroll Taxes (8.30% of salaries) 7, *5. Car allowance (for Program Mgr. and Admin $0.575/mile) 1, TOTAL $ 98, C. Health Benefits ($550/month/employee) $ 21, Executive Director (BCBS-PPO Platinum) - group plan member $ 6, Program Manager + Spouse (BCBS-PPO Silver) - individual plan 6, Administrative Assistant (BCBS-PPO Silver) - group plan member 6, Three (3) staff members-ameritus Dental/Vision-group plan 1, TOTAL $ 21, D. Professional Development & Training $ 22, Neighbor Works Training (HUD-certification for 2 employees) $ 12, Neighborhoods, USA National Conference (May 20-23) (2 employees) 3, TACDC Training (for Executive Director) 2, Other professional development/training (unplanned travel) 4, TOTAL $ 22, Operating Acct #: XXXX068 Payroll Acct #: XXXX351

6 5040 E. Memberships & Subscriptions $ 1, TA-CDC ($250 annual fee) $ Lubbock Chamber of Commerce (LCC) & Young Professionals Membership Neighborhoods, USA ($150 annual fee) Sam's Club membership ($45 annual fee) Miscellaneous (mid-budget year requests) *6. Avalanche Journal (AJ) Subscription-48 $ TOTAL $ 1, F. Support (Professional) Services $ 33, *1. Legal Services $ 12, Accounting 6, Auditing Services $7,500/year 15, Bank fees (check purchases & fees) TOTAL $ 33, G. Contractual Services $ 5, Marlin Services (Xerox machine leasing) $ 3, Benchmark Maintenance Agreement (for Xerox machine) 1, Website Developer Services ( TOTAL $ 5, H. Office Operational Expenses $ 6, Supplies $ 3, Postage (USPS bulk-stamp $49.99/100-stamp roll) Printing *4. Phone Service Provider 2, *5. Network Services (supplies and installation) 8, TOTAL $ 15, I. Loan Payments $ *1. Loan Payments (to Western Bank) $ 40, TOTAL $ 40, J. Community Champion Awards (CCA) Banquet (FUNDRAISER) $ 8, Banquet facility $ 1, Postage, Printing & Marketing $ Food $ 6, Tenant User Liability Insurance (typically required for civic center use) $ TOTAL $ 8, *K. Donations $ Star Care $ 1, Black Men of West Texas $ Women Protective Services (WPS) $ Faith First Church $ Mid-budget year (unanticipated request) $ 1, TOTAL $ 2, *L. Micro-Lending Program $ Micro-Loan Requests ($10,000 max) $ 60, TOTAL $ 60, NOTE: The following line items will not be funded with Section 380 funds: 5075, 5141, 5160, and 5170; these items are noted in blue. TOTAL REQUESTED BUDGET $ 203,267.00

7 QuickBooks Accounting Codes PROGRAM BUDGET 1: Housing/Credit Counseling Operating Acct #:XXXX068 Payroll Acct #: XXXX A. Housing/Credit Counseling $ 22, Program Manager administering Housing Counseling Services (1/3 of time) $ 14, Supplies & postage 2, Counselor Max (software) $595 annual fee +$17.50/credit report+admin fees 2, Community financial literacy training classes (space, food, supplies) 1, *5. Professional Contract Services (HUD-Certified Housing Counselor) Payroll Taxes (8.30% of salaries) 1, TOTAL $ 22, TOTAL REQUESTED BUDGET $ 22, QuickBooks Accounting Codes PROGRAM BUDGET 2: Urban Homestead ("Adopt-a-Spot") Program NEW in FY14-15 Operating Acct #: XXXX068 Payroll Acct #: XXXX A. Personnel (Salaries, Payroll Taxes) $ 28, Executive Director Salary - (1/4 of time) $ 19, Administrative Assistant Pay (10.58/hr.) -(1/4 of time) 5, Payroll Taxes (8.30% of salaries) 3, TOTAL $ 28, B. Reserves (Housing Development & Rehab) $ 65, Down-Payment & Closing Cost Assistance $ 30, Housing Rehabilitation Materials 26, *3. Rehab Materials for Dunbar-Manhattan Heights 8, TOTAL $ 65, C. Community Meeting Materials $ 9, Meeting facility $ 4, Food, supplies, marketing materials, press releases, signage, etc. 4, TOTAL $ 9, D. Housing/Credit Counseling $ 14, Program Manager administering Housing Counseling Services (1/3 of time) $ 14, TOTAL 14, TOTAL REQUESTED BUDGET $ 116,954.00

8 In an effort to measure the effectiveness of its programs, the NELCDC will utilize the following as performance measures in general administration functions, housing/credit counseling functions, and outreach and housing counseling functions pertinent to the new Adopt-a-Spot Urban Homestead program: 1. Number of Meetings Facilitated (community forums, monthly financial literacy workshops, etc.) 2. Number of Clients Impacted (via educational outreach meetings, one-on-one counseling, etc.) 3. Number of Homes Impacted (physical rehabilitation) 4. Number of Clients to Receive Down Payment & Closing Cost Assistance 5. Number of New Programs Developed (documents created as well as promotional materials, marketing, etc.) Specified target numbers will be reported on a quarterly basis and efforts to obtain yearly goals will be implemented. Operating (General Administration) Performance Measures 1. Outreach forums. In partnership with the East Lubbock Community Alliance the NELCDC will be participate in the facilitation of outreach meetings. 2. Number of Clients Impacted (outreach). The NELCDC cannot project a pre-determination of the number of clients who will be impacted by community outreach efforts. However, the NELCDC firmly asserts than an outreach and educational component is a critical component in a solution of method designed to alleviate apathy and neighborhood decline; simply stated residents have a tendency to modify their behavior in a positive manner if they are highly engaged and are well-informed. The NELCDC will provide sign-in sheets at each outreach meeting to track the number of clients impacted as well as establish a mechanism for follow-up and continued engagement. 3. Number of Clients Impacted (micro-lending). Since August 2014, the NELCDC has been working to develop a program called the Community Entrepreneurship Program. This program will essentially be used to bolster the existing micro lending program. In its current form, NELCDC staff meets with clients interested in starting a business in Lubbock; credit counseling is offered. Although the NELCDC is marketing economic development in its target area (north and east Lubbock) the NELCDC is proud to support start-up businesses all over Lubbock. The Executive Director and Administrative Assistant will develop the various components of this program and once developed the Program Manager will facilitate the program. Since an overhaul of this program is underway the NELCDC plans to measure this program in the following two ways: 1) Number of clients that are counseled and receive assistance with the development of a business plan. 2) Number of clients who make a formal request for funding presentation before the Board of Directors. 8

9 Program 1 (Housing/Credit Counseling) Performance Measures Financial Literacy Workshops (4-unit courses per cycle). The NELCDC has initiated the planning of monthly financial literacy workshops beginning in January These workshops will provide potential new homeowners with fundamental principles of financial literacy and education. Sign-in sheets are provide at each class. Many clients who need or want one-on-one counseling will continue individual counseling. These workshops will be key in identifying potential new homeowners as well as new community entrepreneurship program participants. Program Overview provided as supplemental documentation for performance measure. 2. Number of Clients Impacted (one-on-one) 46 clients. The NELCDC anticipates the Program Manager will spend one-third of his time engaging 46 clients from initial intake and orientation to time spent on budgeting, action planning, credit review, and if desired home selection/development and closing; engagement also includes phone calls and s. Since there is no existing benchmark, the NELCDC has established a new intake form, which will be used to track all new clients as of October 1, In the 2015, the NELCDC plans to purchase a service known as Counselor Max, which is a program provided through NeighborWorks for housing counselors. Once the client management system is in place, it will take the place of the paper intake form so clients can be tracked weekly, monthly, and of course reported on the quarterly reporting form submitted to the City of Lubbock from the NELCDC. The NELCDC has also created a new time sheet which will be used to track time spent on specific projects. After this initial benchmark year, a more accurate projection will be provided. Program 2 (Adopt-a-Spot) Performance Measures 1. Plans Developed. The Executive Director and Administrative Assistant will develop the structure and fundamentals of the outreach and planning process; this includes marketing materials, etc. 2. Outreach Meetings. The NELCDC plans to facilitate outreach meetings to launch this new program. 3. Number of Clients Impacted (one-on-one) 46 clients. This is the same function as stated in Program Budget 1. However, the NELCDC Program Manager will track clients counseled in a targeted Adopt-A- Spot project area separately from other clients. This will enable the City of Lubbock as well as the NELCDC to differentiate between general outreach efforts that general clients served vs. project specific clients that desire to receive housing counseling and credit rehabilitation services. As stated in the budget, one-third of the program manager s time will be spent counseling clients in targeted areas for this program. 4. Four (4) Clients Served with Down Payment & Closing Cost Assistance. $7,000 for 4 eligible clients. 5. Clients Served with Housing Rehab Materials. $3,000-$4,000 in rehab materials for 7-9 homeowners. 6. Clients Served with Rehab Materials. $8,500 for Dunbar-Manhattan Heights homeowners. 9

10 Performance Measure Summary Progress on each performance measure will be reported on each quarterly report. Budget Program Measure (FY 14-15) Operating General Outreach Forums 3-5 meetings expected Operating General Outreach Forums Number of clients engaged (first year measured; no previous benchmark). Operating Micro-Lending Number of clients engaged (first year measured; no previous benchmark) Operating Micro-Lending Number of requests presented before the Board of Directors (first year measured; no previous benchmark) Operating Micro-Lending/Community Entrepreneurship Program New plan and program created in FY Program 1: Housing and Credit Counseling Program 1: Housing and Credit Counseling Financial Literacy Workshops 13 cycle (4-unit classes) expected (Jan-Dec. 2015) Client Consultations (one-on-one) Number of clients engaged 46 projected. (First year measured; no previous benchmark) Program 2: Adopt-a-Spot Adopt-a-Spot Program New plan and program created in FY Program 2: Adopt-a-Spot Adopt-a-Spot Outreach Outreach meetings Program 2: Adopt-a-Spot Adopt-a-Spot Client Consultations (one-on-one) Number of clients engaged 46 projected. (First year measured; no previous benchmark) Program 2: Adopt-a-Spot Adopt-a-Spot DPCC Assistance 4 clients served Program 2: Adopt-a-Spot Adopt-a-Spot Rehab Materials 7-9 clients served Program 2: Adopt-a-Spot Dunbar-Manhattan Heights Rehab Materials Number to be served unknown 10