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2012 PHADA Commissioners Conference January 8-11, 2012. Michael LaRiccia, Program Advisor, U.S. Dept. HUD [email protected] Coping with HCV Budget Cuts. Revenue Reduction & Liquidity Squeeze. The Pie is getting smaller and HUD is handing out the slices on an as needed basis.

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2012 phada commissioners conference january 8 11 2012 l.jpg

2012 PHADA Commissioners Conference January 8-11, 2012

Michael LaRiccia, Program Advisor, U.S. Dept. HUD [email protected]

Coping with HCV Budget Cuts


Revenue reduction liquidity squeeze l.jpg
Revenue Reduction & Liquidity Squeeze

  • The Pie is getting smaller and HUD is handing out the slices on an as needed basis.

    • Reduced Administrative Fees again in 2012

    • HUD Cash Disbursement Changes

      • Will pay PHAs the amount needed to pay landlords vs. 100% payout of funding as in the past 6 years.

      • HUD will recover and hold, for PHA use, the HAP Reserve (NRA)


Liquidity impact l.jpg

This 1700 unit PHA received $7.9 million in 2011, and is on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

In 2011, HUD will disburse all $7.9 million, and MMHA will retain a reserve of $655,000. They will also earn about $866,517 in admin fees. All tolled, $8.8 million will be disbursed. Had the 2012 admin fee levels and disbursement changes been applied to 2011, MMHA would have received $8.062 million, and would have no NRA funds in the bank at year end. Admin fees would have dropped from $866,517 to $782,997.

Liquidity Impact


Reduced admin fee l.jpg
Reduced Admin Fee on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

  • 2010: 90% Proration of earned fees

  • 2011: 83% Proration

  • 2012 : 75% estimated proration

300 unit sample PHA at median fee rate of $61.54 pum. Leasing at 98.5%.


Admin fee calculation l.jpg
Admin Fee Calculation on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

Estimated Fee Rate for 2012


Admin fee variation l.jpg
Admin Fee Variation on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

Median: $61.01 Little Rock, Ar.

$143, 127

$179,306

$316,932

A 300 unit fully leased program would have earned the above amounts in the three locations in 2011.


Number phas by rate level 2011 l.jpg
Number PHAs by Rate Level: 2011 on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

528 HAs


Revenue vs exp breakeven levels l.jpg
Revenue vs. Exp: Breakeven Levels on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)


Admin reserve per unit median by size l.jpg
Admin Reserve per Unit: Median by Size on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)


Options to address lowered admin prorations l.jpg
Options to Address Lowered Admin Prorations on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

In our 300 unit PHA Example: An underleasing PHA can add $1,600 in revenue in 2012 with each additional UML Percentage Point .

  • Increase/Maintain Revenue

    • Maximize UMLs

      • 2 Yr Projection Tool

      • Scrutinize HAP Per Unit Cost HAP

    • Fraud Recovery Performance

  • Reduce Expenses

    • Cost Analysis – Peer Norms

    • Streamline functions/ Best Practices

    • Policy Choices

    • Alternative Management Approaches

  • Spend out of Admin Reserves –short term strategy

  • Subsidize from other Sources


  • Revenue maximize unit months leased l.jpg
    Revenue: Maximize Unit Months Leased on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Manage Issuance process to tap into Unrealized Leasing Potential. Use Two Year Projection tool to model key variables and Year 2 Funding:

      • Per Unit Cost, Success rate, Turnover rate, length of time to lease.

  • Manage HAP Per Unit Cost.

    • Deconstruct costs by location, bedroom size. Analyze rent burdens.

    • Ensure Rent Reasonableness is vigorous

    • Maximize tenant income contribution


  • Revenue fraud recovery revenue to admin l.jpg
    Revenue: Fraud Recovery Revenue to Admin on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    Median is $.31 per UML, but over one third of PHAs recover zero fraud, while one-fifth recover over $1 per UML.

    A $1.00 Fraud Recovery rate earns a 300 unit HA about $3,500


    Reduce expenses cost analysis l.jpg
    Reduce Expenses: Cost Analysis on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    Financial Statement compilation – All PHAs.


    High level national information l.jpg
    High Level National Information on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Some Nationwide Median Measures


    Comparing admin salaries by fee rates l.jpg
    Comparing Admin Salaries by Fee rates on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)


    Comparing benefits costs per uml by fee rate l.jpg
    Comparing Benefits costs per UML by Fee Rate on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)


    Organization and staffing l.jpg
    Organization and Staffing on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • See Chapter 21 of HUD’s HCV Guidebook


    Reducing expenses streamlining and reducing workload l.jpg
    Reducing Expenses: Streamlining and Reducing Workload on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Stabilize Leasing – Even pattern of issuance vs. boom and bust leasing effort. Use of Projection tool.

    • Minimize “bad turnover”: Better briefings, more forgiving policies will reduce need to issue vouchers

    • Increase Success Rate of leasing – fewer will have to be issued, inspected, etc. Better briefings, landlord outreach etc.


    Reducing expenses streamlining and reducing workload19 l.jpg
    Reducing Expenses: Streamlining and Reducing Workload on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Reduce Inspections by:

      • Prevent HQS fails by preparing landlords and participants: Publicize “top 10 HQS Violations”.

      • Remote validation of fail corrections

    2003 Ohio PHA Survey


    Reducing expenses streamlining and reducing workload20 l.jpg
    Reducing Expenses: Streamlining and Reducing Workload on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Reduce third Party verification by using UIV and or accepting tenant originals

    • Better workload and inspection location scheduling by de-linking HQS Inspections and Reexaminations

    • Removing self-imposed requirements, e.g. yearly verification of birth certificates, and citizenship

    • Lessons from VASH Boot camps (process mapping): “Why are we still doing this…..?”


    Reducing expenses policy choices l.jpg
    Reducing Expenses: Policy Choices on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Limit Interim Reexams: balancing HAP PUC and Admin burden

    Finding the judicious trade-off between cost to administer and PUC cost savings.

    What are thresholds for triggering an Interim?


    Reducing expenses policy choices22 l.jpg
    Reducing Expenses: Policy Choices on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Limiting the number of moves to once per year

    • Closing the waiting list

    • Absorb Port families rather than billing other PHAs

    Board Responsibility: Assessing and Managing Trade-Offs .


    Alternative management approaches l.jpg
    Alternative Management Approaches on track to spend about $7.5 million. It began the year with a NRA $217,097 – about 2.7% of BA, and will end the year with about $655,000, an 8.6% NRA. (It will lease 98.6% of its units.)

    • Shared Executive Director, Finance Dept.

    • Contracting out functions

    • Consolidating with another HA

    • Transfer of Program

    • Consortium

    Board Responsibility: Strategic Assessment of viability of program in current environment.


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