
Asset Management Orientation for PHA Boards . Overview of Asset Management Orientation for PHA Boards. Section 1: Overview of Asset Management. Section 2: Asset Management Building Blocks . Section 3: The Central Office Cost Center. Training Format. Designed for PHA Board members
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Section 1: Overview of Asset Management
Section 2: Asset Management Building Blocks
Section 3: The Central Office Cost Center
Data is based on the “Operating Fund Annual Report Calendar Year 2007,” October 31, 2007.
Data is based on the “Operating Fund Annual Report Calendar Year 2007,” October 31, 2007.
“PHAs shall manage their properties according to an asset management model, consistent with the management norms in the broader multi-family management industry. PHAs shall also implement project-based management, project-based budgeting, and project-based accounting, which are essential components of asset management.”
Revisions to the Public Housing Operating Fund Program; Final Rule
HUD, September 19, 2005
*Extension through 2011 on case-by-case basis
Asset management…is a process of making investment decisions for a collection (portfolio) of assets, based on the mission, goals, and objectives of the owner, lender, sponsor, or regulatory body.
Entity
Role
Function
Owner
Asset
Management
PHA Board
PHA Staff
or Mgmt
Company
Property
Management
Operator
Oversight
and
Monitoring
Regulator
PIH
Field Offices
The Consolidated Appropriations Act of 2008 contained two provisions which pertain directly to asset management. The two provisions are:
The first provision is only effective for CY 2008. The second is considered permanent legislation.
As a group, please discuss and provide an answer to the question above.
Project-based
performance assessment
Project-based management
Project-based accounting
Project-based budgeting
Project-based funding
OLD
HUD
PHA
NEW
HUD
PHA/COCC
$ Fees
$ Subsidy
AMP
The Flow of Funds- Operating Expenses
= Net Income
Determining Project FundingProject Expense Level (PEL)
+ Utilities Expense Level (UEL)
+ Add-ons
= Formula Expenses
- Formula Income
= Subsidy Eligibility
- Proration
= Actual Subsidy
+ Rental Income
+ Other Income
+ Transfers
= Effective Income
Project-based funding
Project-Based BudgetingWhat are project-based budgets?
Gross Potential Income (GPI)
- Vacancy and Collection Loss
+ Miscellaneous Income
= Effective Gross Income (EGI)
- Operating Expenses
= Net Operating Income (NOI)
- Reserves for Replacement
- Annual Debt Service (ADS)
= Cash Flow
Operating Expense
Ratio (%) =
Operating Expense
per Unit ($) =
Operating Expenses
Income
Operating Expenses
Number of Units
Hamilton Place:
Operating Expense Ratio:
$150,000 (Operating Expense)/$175,000 (Income) = 86%
Operating Expense per Unit:
$150,000 (Operating Expense)/20 (Number of Units) =
$ 7,500
Southside Apartments:
Operating Expense Ratio:
$145,000 (Operating Expense)/$160,000 (Income) = 91%
Operating Expense per Unit:
$145,000 (Operating Expense)/10 (Number of Units)=
$ 14,500
Project-based budgeting
Project-based funding
Project-Based AccountingAnnual year-end financial statements on each AMP will be required
management
Project-based accounting
Project-based budgeting
Project-based funding
Project-Based Management“The provision of property-management services that is tailored to the unique needs of each property, given the resources available to that property...Under PBM, these property management services are arranged, coordinated, or overseen by management personnel who have been assigned responsibility for the day-to-day operation of that property and who are charged with direct oversight of operations of that property.”
24 CFR 990
You own a group of restaurants.
performance assessment
Project-based management
Project-based accounting
Project-based budgeting
Project-based funding
Project-Based Performance AssessmentKey information needed:
Asset strategies:
Each strategy must be compared against the mission and goals of the agency
OLD
HUD
PHA
NEW
HUD
PHA/COCC
$ Fees
$ Subsidy
AMP
Review: The Flow of FundsPHAs must adhere to the following: