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Public Housing Operating Fund

Public Housing Operating Fund. Julie Miles, Financial Analyst HUD—Kansas City, KS 913-551-5529. Agenda. Formula Unit Months Utilities Add-ons Formula Income PUM Change in Utility Allowances Stop-Loss. Formula. PEL X EUM + UEL X EUM + Add-ons

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Public Housing Operating Fund

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  1. Public Housing Operating Fund Julie Miles, Financial Analyst HUD—Kansas City, KS 913-551-5529

  2. Agenda • Formula • Unit Months • Utilities • Add-ons • Formula Income • PUM Change in Utility Allowances • Stop-Loss

  3. Formula PEL X EUM + UEL X EUM + Add-ons – Formula Income X EUM = Operating Subsidy Eligibility

  4. Unit Months • Eligible Unit Months (EUM) • Occupied Units • Approved Vacancies • Limited Vacancies • ACC Units Ineligible for OpSub • Units Leased to Tenants Over-Income at Move-in • Units Offline for Non-Dwelling Use (ex. Storage, Office Space, Rental to Businesses, etc.)

  5. Unit Months • Reporting Period • Latest 12 months ended June 30 • CY 09: 7/1/07 – 6/30/08 • Reconciliation of ACC Units: • Units as of 7/1 • Plus Units Added • Less Units Deleted • Units as of 6/30 • Monthly Status • Based on Unit’s Status as of 1st or Last Day of Month • Chosen by PHA • Future Expectation: Pre-populated from PIC • HUD-50058 Reporting • Unit Status Selection (ex. Vacant, Mod, Exception)

  6. EUM • Occupied • Under ACC & Occupied by Public Housing Eligible Family Under Lease • Approved Vacancies • Modernization • Special Use: Resident Services, Resident Organizations, Self-Sufficiency and Anti-Crime Initiatives • Litigation • Casualty Loss Settlement Delays • Disasters • Changing Market Conditions • Limited Vacancies • More Than 100 Units = Up to 3% Total ACC Unit Months • 100 Units or Less = Up to 60 Unit Months

  7. Project Expense Level (PEL) PEL X EUM + UEL X EUM + Add-ons – Formula Income X EUM = Operating Subsidy Eligibility

  8. Project Expense Level (PEL) • Estimated Cost for PH Projects Compared to Actual Costs of Federal Housing Administration Projects • 10 Characteristics • Calculated CY07 • Inflated Each Year by HUD-Determined Weighted Average Percentage Increase In Local Government Wages and Salaries for the Area PHA Is Located and Non-Wage Expenses • 2009 Advisory Committee Will Review Methodology to Evaluate PEL Based on Actual Cost Data

  9. Utilities Expense Level (UEL) PEL X EUM + UEL X EUM + Add-ons – Formula Income X EUM = Operating Subsidy Eligibility

  10. Utilities Expense Level (UEL) Payable Consumption X Rate - Excess Utilities X Inflation or Deflation = UEL

  11. UEL Payable Consumption Current Consumption + 75% Decreased Consumption - 75% Increased Consumption = Payable Consumption

  12. UEL Payable Consumption • Current Consumption • Latest 12 Months Ended June 30 • CY 09: 7/1/07 – 6/30/08 • Compare Current Consumption to Rolling Base • Average Annual Consumption for 36 Month Period Ended June 30--18 Months Prior to Applicable Funding Period • CY 09 Year 1: 7/1/06 – 6/30/07 • CY 09 Year 2: 7/1/05 – 6/30/06 • CY 09 Year 3: 7/1/04 – 6/30/05 • Consumption Incentive or Penalty • PHA Retains 75% of Cost Savings Due to Decreased Consumption • PHA Absorbs 75% of Cost Increase Due to Increased Consumption

  13. UEL • Actual Average Utility Rate • Latest 12 Month Ended June 30 • CY 09: 7/1/07 - 6/30/08 • Actual Cost ÷ Actual Consumption = Actual Average Rate • Subtract Excess Utilities Consumption Surcharge • Latest 12 Months Ended June 30 • CY 09: 7/1/07 - 6/30/08 • Inflation/Deflation Factor • One Annual factor for All Utilities in Specific Geographic Areas • Fuels & Utilities Component of the US Dept of Labor BLS CPI-U

  14. Add-Ons PEL X EUM + UEL X EUM + Add-ons – Formula Income X EUM = Operating Subsidy Eligibility

  15. Add-Ons • Self-sufficiency • Only Elderly/Disabled Service Coordinator Renewals • Energy Loan Amortization • PILOT • Greater of Most Recent FDS or Cooperation Agreement • Audit • Most Recent FDS Cost is “Proxy” for Next Audit • No Adjustment of Proxy to Actual cost • Resident Participation: $25 Occupied Unit • Asset Management (Only if COCC & Multiple AMPs) • Information Technology Fee: $2 PUM under ACC • Asset Repositioning (Demo/Dispo)

  16. Formula Income PEL X EUM + UEL X EUM + Add-ons – Formula Income X EUM = Operating Subsidy Eligibility

  17. Formula Income • Tenant Rent / Unit Months Leased • Frozen at 2004 Level for CY07- CY09 OpSub • 2004 FDS • FYEs 3/31/04, 6/30/04, 9/30/04, or 12/31/04 • Adjusted Annually by PUM Change in Utility Allowances (UA) • Appeal for Adjustment of Baseline Income If Severe Local Economic Hardship • 2009 Reevaluate Frozen Concept

  18. PUM Change in UA • Required for PHAs with Any Tenant Paid Utilities, Regardless of Whether Utility Allowance Schedule Changed • Prorate UA if Rent Prorated for Mid-Month Move-in or Move-out • Exclude Off-line Units (ex. Tenants Over-Income at Move-in, Special Use, Storage, Office)

  19. PUM Change in UA • FYE 2004 • Utility Allowances Given ÷ Unit Months Leased = PUM UA • Reporting Period CY09 7/1/07-6/30/08 • Utility Allowances Given ÷ Unit Months Leased = PUM UA

  20. 2-Year Phase-In Gain Included in OpSub Calculation 50% Gain Subtracted in 1st Year (CY 07) No Gain Subtracted in 2nd Year (CY 08) Transition Calculation: Gainers

  21. Transition Calculation: Decliners • 5-Year Phase-In • Reduction Included in OpSub Calculation • Year 1 CY 07 5% Limit = 95% Add-on • Year 2 CY 08 24% Limit = 76% Add-on • Year 3 CY 09 43% Limit = 57% Add-on • Year 4 CY 10 62% Limit = 38% Add-on • Year 5 CY 11 81% Limit = 19% Add-on

  22. Cost-Benefit of Stop-Loss • Successfully Apply by: • 10/15/07 = Loss Frozen @ 5% CY07+ • 4/15/08 = Loss Frozen @ 24% CY08+ • 10/15/08 = Loss Frozen @ 43% CY 09+ • 10/15/09 = Loss Frozen @ 62% CY 10+ • 10/15/10 = Loss Frozen @ 81% CY 11+ • Alternate Asset Management for PHAs with Less Than 250 Units

  23. Stop-Loss • Traditional Asset Management • PHAs with 250+ Units • COCC & Multiple AMPs • Alternate Asset Management • PHAs with Less Than 250 Units • Limit Administrative Costs (Excluding Audit) • Project Performance • Risk Management

  24. Alternate AM • Admin Calculation • Administrative Salaries • + Administrative Benefits • + Outside Management Fees • + Administrative Operating Expenses • Divide by Occupied & Approved Vacant Unit Months • Admin Limits • Schedule of Management Fees, Table 2, 80th Percentile Administrative Costs • http://www.hud.gov/offices/pih/programs/ph/am/accounting.cfm

  25. Alternate AM • Review Project Performance & Address Areas of Non-Performance • REAC Physical Inspection score at least 70 • Crime & Drug Problems Not Exceeding 120% of Surrounding Community • At least 95% Occupied • Tenant Accounts Receivable 7% or Less of Monthly Rent • Unit Turnaround & Work Orders scores better than “D” • Utility Consumption Not Exceeding 120% of Agency Average

  26. Alternate AM • Risk Management • Not Troubled for PASS, FASS, MASS or Capital Fund • No Outstanding FHEO Compliance Findings or Voluntary Compliance Agreement Not Implemented • No Current Energy Audit • No Outstanding IG Audit Findings Greater Than 6 Months Old Without Progress • Compliance with ACOP & Other Related Occupancy Directives

  27. Alternate AM • Risk Management (continued) • Satisfactory Progress under RHIIPS/RIM Corrective Action Plan • 95% or Higher HUD-50058 Reporting • Meeting CFP Obligation & Expenditure Deadlines • No other Major Compliance Deficiencies • HUD May Consider PHA Progress in Addressing Compliance Issues and Other Extenuating Circumstances

  28. Guidance • PIH Notice 2008-33 CY09 OpSub http://www.hud.gov/offices/adm/ hudclips/notices/pih/files/08-33PIHN.doc • PIH Notice 2008-31 Stop Loss Year 3 http://www.hud.gov/offices/adm/ hudclips/notices/pih/files/08-31PIHN.doc

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