2012 PHADA COMMISSIONERS
CONFERENCE
JANUARY 8-11, 2012
Coping with HCV Budget Cuts
Michael LaRiccia, Program Advisor, U.S. Dept. HUD
Mike.LaRiccia@HUD.Gov
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
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.
Reduced Admin Fee



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
Estimated
Fee Rate
for 2012
Admin Fee Variation
$47.91: Peru,
Indiana
$143, 127
Median:
$61.01
Little Rock,
Ar.
$179,306
$106.07:
Santa Monica,
Ca
$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
528 HAs
Revenue vs. Exp: Breakeven Levels
Admin Reserve per Unit: Median by Size
Options to Address Lowered Admin Prorations

Increase/Maintain Revenue
 Maximize


2 Yr Projection Tool
Scrutinize HAP Per Unit Cost HAP
 Fraud

UMLs
In our 300 unit PHA Example: An
underleasing PHA can add $1,600
in revenue in 2012 with each
additional UML Percentage Point .
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

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
Median is $.31 per
UML, but over one
third of PHAs
recover zero
fraud, while onefifth recover over
$1 per UML.
A $1.00 Fraud
Recovery rate
earns a 300
unit HA about
$3,500
Reduce Expenses: Cost Analysis
Financial Statement
compilation – All
PHAs.
High Level National Information

Some Nationwide Median Measures
256 Program Unit Size
$60 Admin fee rate
$27 Admin salaries per UML
$9 Employee Benefits per Uml
$53 total admin per UML
$58 total operating per UML
$26 Admin Equity per UML
$0.31 Fraud Recovery to Admin per UML
35.8% benefits as % of admin salaries
$28.8 UNA per UML
Comparing Admin Salaries by Fee rates
Comparing Benefits costs per UML by Fee Rate
Organization and Staffing

See Chapter 21 of HUD’s HCV Guidebook
Reducing Expenses: Streamlining and
Reducing Workload



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 Workload

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 Workload




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

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 Choices



Limiting the number of moves to once per year
Closing the waiting list
Absorb Port families rather than billing other PHAs
Alternative Management Approaches





Shared Executive Director, Finance Dept.
Contracting out functions
Consolidating with another HA
Transfer of Program
Consortium