slide number #1 © 2007 nan mckay & associates cara gillette what’s new in public housing? ©...
TRANSCRIPT
Slide Number #1
© 2007 Nan McKay & Associates
Cara Gillette
What’s New What’s New
in Public Housing?in Public Housing?
© 2007 Nan McKay & Associates
Slide Number #2
© 2007 Nan McKay & Associates
Today’s Update TopicsToday’s Update Topics
Asset ManagementThe New PHAS – What We KnowNew HUD Procurement HandbookHUD’s Administrative Reform Initiative and Refinement of Income and RentCivil Rights Monitoring
Slide Number #4
© 2007 Nan McKay & Associates
How the New Model WorksHow the New Model Works
We’ll walk through the model to help you understand why this is a fundamental shift for public housing programs
Slide Number #5
© 2007 Nan McKay & Associates
OverviewOverview
The new formula:• Requires PHAs with 250 or more PH units to transition
to PBM• Is based on HUD’s multifamily industry• Will force the PH program to become more property-
based to ensure the viability of each property
Slide Number #6
© 2007 Nan McKay & Associates
HUD’s TimetableHUD’s Timetable
2007 All PHAs with 250 or more PH units must be using project-based accounting
2009 HUD will consider revising the system to use actual costs
2011 All PHAs with 250 or more units must be asset-management compliant
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© 2007 Nan McKay & Associates
How the New Model WorksHow the New Model Works
Historically, operating subsidy was calculated on an aggregate level• Op sub was allocated to the central
office, which decided where the subsidy went
Slide Number #8
© 2007 Nan McKay & Associates
The New ModelThe New Model
Subsidy now is calculated for and allocated to each project• All other activities are supported by fees paid by
the projects• In other words, all the money goes to the projects,
and projects pay for everything else
Slide Number #9
© 2007 Nan McKay & Associates
The New ModelThe New Model Any service to the project not at the project will come
from a cost center• A cost center is a cluster of activities that indirectly or
directly support a project but aren’t under the control of a property mgr
• Every PHA will have a central office cost center (COCC)• Direct services will charge the project
Slide Number #10
© 2007 Nan McKay & Associates
Compliance with Asset Compliance with Asset ManagementManagement
Best definition of compliance so far is in Notice 2006-14(HA)• Guidance on
successful conversion for stop-loss agencies
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© 2007 Nan McKay & Associates
The Deal with Stop-LossThe Deal with Stop-Loss
PHAs who are losing operating subsidy in the new formula can stop the loss by early conversion to asset management
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© 2007 Nan McKay & Associates
Stop-Loss ProvisionStop-Loss Provision
The deadline is October 15, 2007 If PHA demonstrates conversion by that date,
the reduction of subsidy will be stopped at 5% of the difference for CY 2007 That means that 95% of the PUM difference will
be added to the lower op sub level under the final rule
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© 2007 Nan McKay & Associates
Stop-Loss ProvisionStop-Loss Provision
The added subsidy will continue to be received by the PHA each calendar year that the PHA remains in compliance with the asset management requirements• This means that the PHA must be in
compliance each year or go back to the original loss
Slide Number #14
© 2007 Nan McKay & Associates
Attachment 1• Attachment B of this document adds some
requirements for year two deadline• We’ll weave these in when we discuss the
stop-loss kit
Stop-Loss Notice PIH 2007-16Stop-Loss Notice PIH 2007-16
Stop-Loss ProvisionStop-Loss Provision
The stop-loss kit is an important document because it’s a template for stop-loss agencies • And a roadmap for all
other agencies• HUD to issue 2nd year
stop-loss kit soon
Slide Number #16
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
1. Project-based accounting• Monthly operating statements for each project – revenues and
expenses vs. budget levels, including all fees from COCC and CFG
• Must reasonably reflect the financial performance of each project
Sum of operating statements = total PH
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© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
1. Project-based accounting second year: Project-specific balance sheets not required
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© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
2. Project-based management• Property management services are arranged
or provided in the best interest of the property considering needs, cost, and responsiveness, relative to local market standards
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© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
3. Central office cost center (COCC)• All central office fees must be reasonable• COCC must operate on the allowable fees and other
permitted reimbursements from its PH and S8 programs
• In other words, the COCC must support itself
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© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
3. Central office (COCC) second year:• PHA may not fund the COCC with:
Sale of assets acquired with PH funds Amounts from Capital Fund other than
permitted (e.g., can’t use “Management Improvement” funds to pay for general accounting staff)
Funds from state or local governments
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© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
4. Centralized services• Centralized services that directly support
projects are funded using a fee-for-service approach or through other allowable charge-backs
• Each project is charged for actual services received
• Must be reasonable compared to local market
Slide Number #22
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
5. Review of project performance• PHA systematically reviews financial,
physical, and management performance of each project, and identifies non-performing properties
Slide Number #23
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
5. Review of project performance – a non-performing property has:
• PHAS physical score below 70• Significant crime and drug problems• Below 95% occupancy• TARS that exceed 7% of monthly rent roll
FAQ clarifies this means rent…
Slide Number #24
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
5. Review of project performance – a non-performing property has:
• PHAS grade of “D” or below for vacant unit turnaround and work orders
• Utility consumption more than 120% of agency average
• Other major management problemsTurnaround = D more than 30 daysWOs = D more than 40 days
Slide Number #25
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
5. Non-performing property second year:• Significant drug and crime as defined by
Uniform Crime Reporting = exceeds the surrounding community by 120%
• For any projects identified as non-performing, PHA has management plan with set of recommendations and measurable goals
Slide Number #26
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
6. Capital planning• Physical needs assessment and a five-year
plan for each project Five-year plan needs to consider revenue
sources, market, tenancy, and project needs• PHA demonstrates commitment to long-range
energy consumption reduction
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© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
7. Risk management responsibilities related to regulatory compliance
• PHA not carrying out responsibilities if: Designated troubled under PHAS Any outstanding FHEO findings or voluntary
compliance agreement not implemented…
Slide Number #28
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
7. Regulatory noncompliance if:• No current energy audit…• Outstanding IG audit findings w/no progress• Not in compliance with ACOP• Unsatisfactory progress under RHIIP/RIM• PIC (50058) reporting rate under 95%• Any other major compliance deficiency
Slide Number #29
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
7. Regulatory noncompliance:• Stop-Loss FAQs, published 9/1/06 clarifies:
Regulatory compliance is agency-wide for now
• But at some point it will be analyzed by project
Slide Number #30
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
7. Regulatory noncompliance second year: Designated troubled under PHAS physical,
financial, management, or CFG Outstanding IG audit findings greater than 6
months old without progress Not in compliance with ACOP and other related
occupancy directives…
Slide Number #31
© 2007 Nan McKay & Associates
Seven Criteria for Compliance Seven Criteria for Compliance with Asset Managementwith Asset Management
7. Regulatory noncompliance second year: Not meeting statutory Capital Fund obligation
and expenditure deadlines
Slide Number #32
© 2007 Nan McKay & Associates
Follow the MoneyFollow the Money
How the op sub is calculated and allocated is driving these fundamental changes
Slide Number #33
© 2007 Nan McKay & Associates
How the Money WorksHow the Money Works
The old op sub was aggregate - AEL Under the new formula, subsidy is
calculated and allocated by project - PEL• The op sub will go directly to the projects,
and all other activities will be supported by fees paid by the projects
• We see these in PUM (per unit month) figures
Slide Number #34
© 2007 Nan McKay & Associates
The New Operating SubsidyThe New Operating Subsidy
Operating subsidy formula:Project expense level (PEL)
+ Utility expense level- Formula income frozen at 2004 level
+ Applicable add-ons
= Operating subsidy
Slide Number #35
© 2007 Nan McKay & Associates
Operating Fund FormulaOperating Fund Formula
PEL uses 10 cost drivers or variables:1. Geographic variable
2. Location variable
3. Clientele (occupancy) variable
4. Property size
5. Building type
Slide Number #36
© 2007 Nan McKay & Associates
Operating Fund FormulaOperating Fund Formula
PEL uses 10 cost drivers or variables:6. Bedroom mix (unit size)
7. Percent assisted
8. Property age
9. Neighborhood poverty
10. Ownership type
Slide Number #37
© 2007 Nan McKay & Associates
The New Operating SubsidyThe New Operating Subsidy
Add-ons – PHA determines as applicable:• Self-sufficiency• Energy loan amortization• PILOT• Audit cost – actual most recent• Resident participation - $25 per unit per yr
Slide Number #38
© 2007 Nan McKay & Associates
The New Operating SubsidyThe New Operating Subsidy
Add-ons – the PHA determines:• Asset management fee
$4 PUM for PHAs with 250 or more $2 PUM for smaller PHAS who transition to
PBM who have a COCC
• Information technology fee $2 PUM
Slide Number #39
© 2007 Nan McKay & Associates
The New Operating SubsidyThe New Operating Subsidy
Add-ons – the PHA determines:• Asset repositioning fee – demo and dispo• Costs attributable to changes in federal
law, regulation, or economy
Slide Number #40
© 2007 Nan McKay & Associates
The New Operating SubsidyThe New Operating Subsidy
Approved vacancies – still get op sub:• Units undergoing mod (if on schedule)• Units approved for resident services• Units in court litigation• Units undergoing casualty loss settlement• Units vacant due to disaster (federal or
state)…
Slide Number #41
© 2007 Nan McKay & Associates
The New Operating SubsidyThe New Operating Subsidy
Approved vacancies – still get op sub:• Units vacant due to changing market
conditions• Limited vacancies, up to 3%
The PHA will enter types of vacancies into PIC
Slide Number #43
© 2007 Nan McKay & Associates
CostsCosts
All budgeted costs and expenses will fall into one of three general categories: Direct or frontline cost (at the project) Central office cost center (COCC)
• Indirect services and allocated services Other cost centers (optional)
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© 2007 Nan McKay & Associates
AMPAMP Frontline, or direct, costs of the AMP:
• Personnel costs of staff assigned to project• Repair and maintenance costs including
supplies, contracted repairs, make-readies, preventive maintenance, etc.
• Utility costs• Costs related to the site office – phones, office
supplies, computers, postage, etc…
Slide Number #45
© 2007 Nan McKay & Associates
AMP Frontline (Direct) CostsAMP Frontline (Direct) Costs
These are expenses of the project:• Advertising including procurement and
employment notices• Costs of employee recruiting and screening• PILOT• Insurance (allocated)• Legal fees
Slide Number #46
© 2007 Nan McKay & Associates
AMP Frontline (Direct) CostsAMP Frontline (Direct) Costs
These are expenses of the project:• Fees paid to the central office• Audit costs (allocated)
PHA should allocate a reasonable share of the audit cost to each AMP, COCC, and program
• Vehicle expense for site-based vehicles
Slide Number #47
© 2007 Nan McKay & Associates
Cost CentersCost Centers
Any service provided to the project that doesn’t reside at the project will need to come from a cost center
• The projects will pay for the direct services that don’t reside at the project
Slide Number #48
© 2007 Nan McKay & Associates
Cost CentersCost Centers
A cost center is a cluster of activities that indirectly or directly support an AMP but aren’t under the direct control of a property manager• Every PHA will have at least one cost center,
the central office cost center (COCC)• Centralized maintenance may also probably be
a cost center
Slide Number #49
© 2007 Nan McKay & Associates
Central Office Cost Center Central Office Cost Center (COCC)(COCC)
The COCC is the PHA’s collection of indirect costs of operation - all programs
COCC will have its own column on FDS We’ll talk about the fees the COCC
charges to the projects a bit later
Slide Number #50
© 2007 Nan McKay & Associates
COCC ActivitiesCOCC Activities• Executive director• Human resources• Regional PH mgmt• Corporate legal• Finance • IT• Risk management
• Centralized (if not an optional service center) Procurement Maintenance Work orders Inspections
Slide Number #51
© 2007 Nan McKay & Associates
Other Cost (Service) CentersOther Cost (Service) Centers
Maintenance is an example of services that may need to be provided directly to projects that are centrally located and charged based on time spent or actual work performed
Slide Number #52
© 2007 Nan McKay & Associates
Other Cost (Service) CentersOther Cost (Service) Centers
How to organize maintenance is an important PBM decision• A PHA can decide to organize maintenance:
Decentralized – front line• Supervised by the property manager
CentrallyA mix
Slide Number #53
© 2007 Nan McKay & Associates
Other Cost (Service) CentersOther Cost (Service) Centers
If the PHA uses centralized maintenance, will be required to use fee-for-service method when charging the project• Project can only be charged for actual
services providedCould be a single blended hourly rate, separate
hourly rates for various activities, or flat fee – must be reasonable
Slide Number #54
© 2007 Nan McKay & Associates
Centralized Maintenance Centralized Maintenance
For all centralized maintenance staff providing direct services, the PHA can charge up to the market rate• Even if it’s above what the
technician is actually paid
May charge for actual materials used as well as labor
Slide Number #55
© 2007 Nan McKay & Associates
Centralized MaintenanceCentralized MaintenanceHow Much Can the PHA Charge?How Much Can the PHA Charge?
Sally is a maintenance worker $62.26 Wages
$17.50 Benefits (45%)
$79.76 Hourly rate
If the market rate is $100, the hourly charge could be $100, regardless of what Sally is paid
Slide Number #56
© 2007 Nan McKay & Associates
Other FunctionsOther Functions
Charging back to the project• Where it’s cost-effective,
PHA can prorate across projects the cost of centralized staff who perform frontline functions
Slide Number #57
© 2007 Nan McKay & Associates
Charging Back to the ProjectCharging Back to the Project
These are called front line allocated costs• For example, collecting rent centrally,
employee handing rent collection, as well as direct costs, could be charged back to applicable projects on any reasonable basis
Slide Number #58
© 2007 Nan McKay & Associates
Charging Back to the ProjectCharging Back to the Project
Two exceptions to charging projects for centralized staff performing frontline functions:• Can’t charge projects for cost of a centralized
supervisor• Can’t charge projects cost of centralized staff
handling procurement
Slide Number #59
© 2007 Nan McKay & Associates
Update – Centralized Update – Centralized WarehouseWarehouse
FAQ December 1, 2006 If a warehouse at the COCC is for
“storerooms” of scattered sites, with HUD approval, this can be an eligible frontline cost
Slide Number #60
© 2007 Nan McKay & Associates
Charging Back to the ProjectCharging Back to the Project
HUD will allow charging back to project:• Central waiting lists, screening, leasing and
occupancy – PHAs can prorate costs direct costs of these functions to the AMPs, including supervisory personnel The proration can be based on the number of units
leased at a project, average turnover at a project, or other reasonable allocation method
Slide Number #61
© 2007 Nan McKay & Associates
Charging Back to the ProjectCharging Back to the Project
HUD will allow charging back to project:• Resident programs – PHA can prorate
centralized resident programs across projects on a reasonable basis, including supervisory staff
Slide Number #62
© 2007 Nan McKay & Associates
Charging Back to the ProjectCharging Back to the Project
HUD will allow charging back to project:• Protective services – PHAs can charge
centralized protective services, either in-house or through local law enforcement, including supervisory staff
• HUD eventually wants these tracked by project
Slide Number #63
© 2007 Nan McKay & Associates
Charging Back to the ProjectCharging Back to the Project
HUD will allow charging back to project:• Work order processing
Although it is the norm in multifamily housing to handle work order processing on site, a PHA may charge the cost of centralized work order processing only if the PHA can document/justify that the cost pro rated is reasonable and necessary
Slide Number #64
© 2007 Nan McKay & Associates
Shared Resource CostsShared Resource Costs
- What if there is PHA personnel who provide services both to the projects and the central office cost center?
Slide Number #65
© 2007 Nan McKay & Associates
Shared Resource CostsShared Resource Costs
HUD recognizes it may not make economic sense to have full-time staff dedicated to a specific project• In this case the PHA may establish a
reasonable method to spread these personnel costs to the AMPS that receive the service
Slide Number #66
© 2007 Nan McKay & Associates
Shared Resource CostsShared Resource Costs Shared resource costs are distinguished
from front line prorated costs in that the services being shared are limited to a few projects as opposed to being pro rated across all projects• An example of a shared resource cost might
be a maintenance person assigned to and paid for by two projects
Slide Number #67
© 2007 Nan McKay & Associates
Shared Resource CostsShared Resource Costs
- For PHA staff who provide services both to the projects and the central office cost center, the PHA must separate the amount of time spent on providing services to the projects and the central office cost center, based on a reasonable methodology
Slide Number #68
© 2007 Nan McKay & Associates
Shared Resource CostsShared Resource Costs
- The time spent by the staff on projects must be at an hourly rate that does not exceed the reasonable hourly fee for the service
Slide Number #70
© 2007 Nan McKay & Associates
Fees Allowed under PBMFees Allowed under PBM
Fees the projects will pay to the COCC:• Property management fees• Bookkeeping fees• Asset management fees• Capital fund management fees
Slide Number #71
© 2007 Nan McKay & Associates
Fees Allowed under PBMFees Allowed under PBM
Property management fee• Is “reasonable fee” paid by project to COCC
for project oversight• HUD has established some “reasonability”
guidelines Notice: Guidance on Implementation of Asset
Management, issued Sept 6, 2006
Slide Number #72
© 2007 Nan McKay & Associates
Fees Allowed under PBMFees Allowed under PBM
Management fee – “reasonable”• Based on multifamily fee (annual letter from
field office); or • 80th percentile as established by HUD; or• Other compelling data of local market
Might include fees paid pay the PHA for private management of other properties
Slide Number #74
© 2007 Nan McKay & Associates
Fees Allowed under PBMFees Allowed under PBM
Management fee• Based on units leased (occupied units and
approved vacancies, but not the 3% limited vacancies) using average monthly lease-up rateStop-loss FAQs (question 12) says that the
PHA can use either the first day or last day of the month (but must be consistent)
Slide Number #75
© 2007 Nan McKay & Associates
Fees Allowed under PBMFees Allowed under PBM
Bookkeeping fee• An extension of the management fee• For accounting for project funds, charged to
the project from the COCC• Based on occupied units and allowable
vacancies• HUD will consider $7.50 PUM reasonable
Slide Number #76
© 2007 Nan McKay & Associates
Fees Allowed under PBMFees Allowed under PBM
Asset management fee• Fee paid by project to COCC for oversight of
portfolio • Based on total ACC• Must be reasonable, not to exceed $10 PUM• Only paid if the project has excess cash flow
(no limit first year)
Slide Number #77
© 2007 Nan McKay & Associates
Update – Asset Mgmt FeeUpdate – Asset Mgmt Fee
Per PIH Notice 2007-9(HA), issued 4/10/07• In the 1st year of PBM, there is no excess cash
requirement for the payment of the fee• In the 2nd year, each project must have excess
cash to pay the asset management fee• In the 3rd and subsequent years, excess cash
must equal one month of operating expenses to pay the asset management fee
Slide Number #78
© 2007 Nan McKay & Associates
Capital Fund Management Capital Fund Management FeeFee
Fee may be up to 10% of the CFG including replacement housing funds• The fee is paid by each AMP from CFG
proceeds
HUD is still defining the way the fee will be earned
Slide Number #79
© 2007 Nan McKay & Associates
The New PHAS – What We KnowThe New PHAS – What We Know
Per notice published Sept 6, 2006:• Under the first year of
project-based management, PHAs will receive a transitional score under the new PHAS
Slide Number #80
© 2007 Nan McKay & Associates
The New PHASThe New PHAS
Changes being considered:• Inspections under project-based PHAS may be
scheduled in the last three months of an agency’s fiscal year
• Projects that receive a score of 80 or higher will only be inspected every two years
Slide Number #81
© 2007 Nan McKay & Associates
The New PHASThe New PHAS
HUD is expected to issue a new physical inspection scoring notice specific to project-based PHAS
The central office or non-public housing projects will not be included in the financial assessment
Slide Number #82
© 2007 Nan McKay & Associates
The New PHASThe New PHAS
PHAs will be required to submit financial statements at the project level so that the financial condition of each AMP can be measured• Two of the indicators, Current Ratio and
Months Expendable Fund Balance, will be used to determine if a property/AMP is fiscally healthy
Slide Number #83
© 2007 Nan McKay & Associates
The New PHASThe New PHAS
The Management Operations Indicator is expected to be significantly changed under project based PHAS• Form HUD 9834, which is used by HUD for on
site multifamily management reviews, may be used a guide
Slide Number #84
© 2007 Nan McKay & Associates
The New PHASThe New PHAS
Management Operations Indicator• Will cover the area of tenant selection,
assignments, lease and grievance and tenant participation
Slide Number #85
© 2007 Nan McKay & Associates
The New PHAS ComponentsThe New PHAS Components
PH Asset Management: Key Components, issued April 10, 2007:• HUD “contemplates” four indicators:
Physical condition of each projectFinancial condition of each projectManagement operation of each projectCapital Fund obligation/expenditure rates
Slide Number #86
© 2007 Nan McKay & Associates
The New PHAS AssessmentThe New PHAS Assessment
• Physical condition – Independent inspector (current practice)
• Financial condition – Principally, the AMP’s financial liquidity
• Management operations – Onsite management reviews will eliminate self-certifications and submissions
• Capital Fund – obligation and expenditure rates
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© 2007 Nan McKay & Associates
Measuring PerformanceMeasuring Performance
Accountability and responsibility• Clear articulation of responsibilities is
needed• Performance of properties will need to be
more closely tied to performance evaluation of staff
• Effective supervision and quality control is a must in making this work
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© 2007 Nan McKay & Associates
HUD’s New Procurement HandbookHUD’s New Procurement Handbook
Transmittal is Attachment 2
Slide Number #89
© 2007 Nan McKay & Associates
HUD Handbook 7460.8 REV 2HUD Handbook 7460.8 REV 2
Applies specifically to public housing agencies for the operation of public housing
Is not applicable to Indian Housing Authorities or the operation of the Section 8 Housing Choice Voucher Program
Slide Number #90
© 2007 Nan McKay & Associates
HUD Handbook 7460.8 REV 2HUD Handbook 7460.8 REV 2
Also, does not apply to income generated by the Central Office Cost Center (COCC) – not considered Federal program income• Management fees• Bookkeeping fees• Asset management fees
Governed by local & State requirements, if applicable
Slide Number #91
© 2007 Nan McKay & Associates
Delegation of AuthorityDelegation of Authority
Under PBM, more decentralization of procurement function is expected
Policy required for delegation of procurement authority• Limits of authority in terms of dollar value each PHA
classification may make• Other limitations, e.g., types of contracts an individual may
award
Slide Number #92
© 2007 Nan McKay & Associates
Delegation of AuthorityDelegation of Authority
Delegation policy should also be clear if individual staff may further re-delegate any of his/her authority – and how much!
Training for site staff is important• Individual staff will be binding the PHA legally
Slide Number #93
© 2007 Nan McKay & Associates
What Has Been StreamlinedWhat Has Been Streamlined
Increase in the small purchase threshold from $25,000 to $100,000
The establishment of a micro-purchase threshold of $2,000, requiring only one reasonable quote
The use of “incorporation by reference” of mandatory contract clauses into bid specifications and contracts…
Slide Number #94
© 2007 Nan McKay & Associates
What Has Been StreamlinedWhat Has Been Streamlined
Elimination of any required forms for small purchases, with the exception of applicable maintenance and construction contracts exceeding $2,000
The use of a simplified contract for construction work that does not exceed $100,000…
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© 2007 Nan McKay & Associates
What Has Been StreamlinedWhat Has Been Streamlined
Elimination of requirement to conduct a separate cost/price analysis when obtaining products or services of a commercial nature
Ability of PHAs to “self-certify” that their procurement systems satisfy the requirements of 24 CFR 85.36, thereby eliminating the need for prior HUD approval for most change orders and non-competitive purchases
Slide Number #96
© 2007 Nan McKay & Associates
Developing a Procurement PolicyDeveloping a Procurement Policy
New handbook includes language PHA’s procurement policy should include
Slide Number #97
© 2007 Nan McKay & Associates
Procurement Policy Should Procurement Policy Should IncludeInclude
Statement on access by public to certain information
Clear wording on ethical behavior
Slide Number #98
© 2007 Nan McKay & Associates
Procurement Policy Should Procurement Policy Should IncludeInclude
Procurement methods used by PHA• Petty cash• Small purchase (include dollar level)• Sealed bids• Competitive proposals• Noncompetitive proposals• Cooperative purchasing agreements
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© 2007 Nan McKay & Associates
Procurement Policy Should Procurement Policy Should IncludeInclude
Conditions for cost & price analysis Methods of solicitation to be used for various levels of
procurement Bonding requirements for construction contracts over $100,000 Contractor qualifications & duties Different types of contracts the PHA will use
Slide Number #100
© 2007 Nan McKay & Associates
Procurement Policy Should Procurement Policy Should IncludeInclude
Identification of required contract clauses Types of specifications the PHA will use Process for filing an appeal Assistance available for small and other types of businesses Required Board approval of policy Delegation of contracting authority
Slide Number #101
© 2007 Nan McKay & Associates
Procurement Policy Should Procurement Policy Should IncludeInclude
Disposition policy (may also be a stand alone policy)
Self-certification (if applicable)
Slide Number #102
© 2007 Nan McKay & Associates
Ethics in Public ContractingEthics in Public Contracting
New handbook emphasizes ethics PHA must have a written code of standards
that governs performance of employees who engage in award & administration of contracts
Included in the PHA’s procurement policy
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© 2007 Nan McKay & Associates
Ethics in Public ProcurementEthics in Public Procurement
PHA’s procurement policy should prohibit any employee from participating in the selection of a vendor or award of a contract if a conflict – real or perceived – would be involved
Page 7-25
Slide Number #104
© 2007 Nan McKay & Associates
Ethics in Public ProcurementEthics in Public Procurement
Also recommended that policy prohibit employees who participate in the procurement process from accepting gifts, gratuities, favors or kickbacks from current or potential vendors or contracts
Page 7-25
Slide Number #105
© 2007 Nan McKay & Associates
Ethics in Public ProcurementEthics in Public Procurement
Penalties should be established & included in policy for those employees who breach ethical standards• Oral or written warnings/reprimands• Suspension with/without pay• Termination of employment• Dismissal from the office or agency position
Slide Number #106
© 2007 Nan McKay & Associates
HUD Administrative Reform HUD Administrative Reform InitiativeInitiative
Slide Number #107
© 2007 Nan McKay & Associates
HUD’s Administrative Reform HUD’s Administrative Reform InitiativeInitiative
On July 12, HUD will launch first meeting to focus on non-statutory administrative requirements that might be streamlined to• Better support transition to asset mgmt• Ensure consistency with norms in multifamily
Slide Number #108
© 2007 Nan McKay & Associates
Administrative Reform – 10 AreasAdministrative Reform – 10 Areas
Occupancy Capital Fund and
Agency Plans Resident involvement
and self-sufficiency General monitoring
Development and asset repositioning
Homeownership General management Financial management Systems Structure
Slide Number #109
© 2007 Nan McKay & Associates
Proposed Rule – Rent RefinementProposed Rule – Rent Refinement
Attachment 3 Issued June 19, 2007
• Applies to public housing and HCV
• Purpose is to make EIV mandatory and more functional
Slide Number #110
© 2007 Nan McKay & Associates
Proposed Rule Would:Proposed Rule Would:
Require all family members, regardless of age, to disclose and document SSNs
Require PHAs to get proof of citizenship or legal status
Change definition of annual income from anticipated future income to actual income received
Slide Number #112
© 2007 Nan McKay & Associates
Civil Rights-Related Reviews Civil Rights-Related Reviews
11/9/2006 & 3/1/2007 – Federal Register Notices 6/13/2007 – Final civil rights review documents
posted on www.hudclips.org• Joint effort by PIH and FHEO to increase oversight of
fair housing issuesTwo checklists – attachment A & B
Slide Number #113
© 2007 Nan McKay & Associates
Attachments A & BAttachments A & B
• PIH is planning to conduct civil rights monitoring reviews of 20 PHAs in fiscal year 2007 (i.e., before September 30, 2007)
• Focus is on reasonable accommodation and LEP issues
• Data collected helps HUD evaluate PHA compliance with civil rights and fair housing laws and regulations
Slide Number #114
© 2007 Nan McKay & Associates
Attachment AAttachment A
Attachment A – will be completed by a PIH reviewer• Will be completed as part of on-site
comprehensive/consolidated reviews• PIH reviewer completes form and sends it to FHEO
for review
Slide Number #115
© 2007 Nan McKay & Associates
Attachment AAttachment A
The PIH reviewer does not analyze the answers to the checklist• However, FHEO “will…take appropriate action, if
necessary” depending on the responses of the PIH reviewer• This form leaves some discretion to the reviewer and FHEO
as to what is reported
Slide Number #116
© 2007 Nan McKay & Associates
Attachment AAttachment A
Three main fair housing topics covered:• Notice of fair housing rights to participants• General fair housing and civil rights
violations and compliance issues• LEP
Slide Number #117
© 2007 Nan McKay & Associates
Attachment A - NoticeAttachment A - Notice
Questions 1-5:• FH poster must be displayed• PHA Agency Plans, policies, regulations and rules need to be
posted and available to the public as well as participants• Notice to participants regarding how to file a fair housing
complaint
Slide Number #118
© 2007 Nan McKay & Associates
Attachment A – General FHAttachment A – General FH
Very broad criteria that is being examine:• (Part II) “Is there anything else that is related to civil
rights or fair housing that should be noted…?”• Form suggests for PIH reviewers to gather
information from “media reports” and “racial/ethnic tensions” complaints at developments
Slide Number #119
© 2007 Nan McKay & Associates
Attachment A - LEPAttachment A - LEP
Asks about LEP four-factor test and asks PIH reviewer to send in a copy of the analysis• Requests copy of LAP• Inquires into bi-lingual staff• Inquires into contracts for language services
Slide Number #120
© 2007 Nan McKay & Associates
Attachment BAttachment B
Checklist purpose “serves as an alert to PIH and FHEO to certain PHA practices regarding Section 504”• Unlike A, this form is completed by the PHA and is
collected by PIH during its on-site review• Results are referred to FHEO for follow-up
Slide Number #121
© 2007 Nan McKay & Associates
Attachment BAttachment B
Specific questions regarding:• Section 504 coordinator• Units meeting UFAS-accessibility standards• Distribution of accessible units• Reasonable accommodation policy/process
Including how/when RA policy is given to applicants and residents
Slide Number #122
© 2007 Nan McKay & Associates
Attachment BAttachment B
Final question is very broad:• “What other rules or policies has the PHA
implemented that affect persons with disabilities?”• Be prepared to show affirmative steps the PHA has
taken to market to and support people with disabilities in the community
Slide Number #123
© 2007 Nan McKay & Associates
Attachments A & BAttachments A & B
These forms have expiration date of 2010 LEP and disability support are issues
HUD/FHEO is taking very seriously Show good faith efforts and take affirmative
action – make a plan to deal with these issues!
Slide Number #124
© 2007 Nan McKay & Associates
Attachment BAttachment B
Additional inquiry into:• Service animals• Deposits• TTY• Alternative forms of communication• Mobility support, voucher exts, FMR exceptions for HCV
applicants/participants