Housing 101 for New Managers and Directors Betty Turner Slide Number #1 Today’s Topics How a housing authority operates Role of Congress, HUD, and local government The role of the board and working well with the board Strategic management of housing authority programs - HCV and PH… Slide Number #2 Today’s Topics HCV – Lease-up and utilization PH – asset-based management and AMP performance Performance assessment - SEMAP and PHAS / Quality control Leadership and supervision The housing authority’s role in the community Slide Number #3 How a Housing Authority Operates Performance Service Accountability Integrity Slide Number #4 Responsibility Public Housing Authorities PHAs have a contractual relationship with HUD to deliver housing programs PHAs implement programs established by Congress and regulated by HUD Must operate in accordance with HUD regulations and funding Slide Number #5 Creation of a Housing Authority PHAs are created under state enabling legislation stipulating: Number of commissioners and procedures for appointment or election By-laws establish term of office, how PHA is set up (independent, branch of city govt, etc) Jurisdiction of PHA may be city, county, state Slide Number #6 Creation of a Housing Authority • A PHA is a public non-profit corporation Slide Number #7 ACC Annual Contributions Contract is the primary contract between the PHA and HUD HUD provides money if PHA complies with laws and regulations HUD can monitor PHA has fundamental obligations in the ACC Slide Number #8 History of Public Housing Housing Act of 1937 established the first permanent public housing program Original purpose of 1937 legislation was to stimulate the economy and create construction jobs Slide Number #9 Public Housing Public housing is project-based subsidy Families have to live in the unit which has subsidy attached to it Slide Number #10 Public Housing Public housing is owned and managed by the PHA PHA is both administrator and landlord Since PHA owns and manages rental real estate, there are many state and local building and safety codes, landlord/tenant laws, and liability issues Slide Number #11 When PH is Developed When a PHA develops public housing in a city, the PHA and city execute a Cooperation Agreement Under this agreement, the PHA pays the locality a Payment in Lieu of Taxes (PILOT) PHA is not subject to real or personal property taxes Slide Number #12 Congress & HUD Annual Contributions Contract PHA Lease Family Slide Number #13 History of HCV 1970’s All Section 8 programs were established except Vouchers 1980’s Housing Vouchers Slide Number #14 Section 8 Voucher program is tenant-based Families may seek suitable housing where they choose Slide Number #15 Congress & HUD Annual Contributions Contract PHA Family Owner Lease Slide Number #16 Historical Perspective of PHAs Brooke Amendment set rent as a percentage of income for both public housing and Section 8 Established need for subsidy for the public housing program Slide Number #17 Economic Changes in the 80’s Housing stock deteriorated Modernization funding needed for public housing Section 8 certificate program greatly expanded Slide Number #18 Nat’l Affordable Housing Act of 1990 Federal preferences One Strike Voucher expansion Portability Family Self-Sufficiency PHMAP Slide Number #19 QHWRA (The Reform Act) Intent was to restore trust in housing programs; innovations in PH; promote self-sufficiency Significantly amended the Housing Act of 1937 Slide Number #20 Reform Act Provisions Both programs New income limits for admission Mandated minimum rent and hardship exemptions Disallowance of earned income Slide Number #21 Reform Act Provisions Housing Choice Voucher Merged Section 8 certificate and Housing Choice Voucher programs Portability issues increased Slide Number #22 Reform Act Provisions Public housing Flat rent and family choice in rent Community service New criteria under PHAS Expanded screening and eviction for drug and other criminal activity Mandated operating subsidy formula be changed Slide Number #23 Overview of Key Relationships Slide Number #24 Congress Created and continues to shape subsidized housing through laws and statutes HUD implements legislation PHAs use these laws, statutes and regulations to define local policies Congress establishes HUD’s budget Slide Number #25 HUD Administration HUD is charged by Congress as the department to administer subsidized housing HUD contracts with PHAs who actually build, manage, and maintain public housing and administer rent subsidy programs Slide Number #26 HUD Headquarters HUD headquarters makes decisions and disseminates information Writes and publishes: Regulations to implement laws Proposed, interim or final rules Handbooks and guidebooks HUD notices and memos Slide Number #27 HUD State and Field Offices HUD state and field offices monitor PHAs for compliance and provide technical assistance Field offices will be monitoring project-based PHAS closely Slide Number #28 REAC (PIH-REAC) Assesses PHAs under PHAS and determines level of scrutiny PHA receives Troubled PHAs are referred for intensive technical assistance and monitoring Slide Number #29 References and Resources HUD regulations: 24 CFR Public housing: 960’s Certificates and vouchers: 982 Combined rules: Part 5 Nondiscrimination: Part 8 Slide Number #30 How HUD Communicates The internet HUD’s site home page: www.hud.gov HUD notices: www.hud.gov/pih/publications/notices Slide Number #31 Local Laws Public housing PHAs must also comply with all local codes which pertain to property owners Most states and localities have landlordtenant laws Should seek legal counsel where HUD requirements conflict with local or state law Slide Number #32 Court Decisions Court cases sometimes set legal precedent in housing issues PHA can minimize legal challenges by assuring PHA policies and practices are current and are applied uniformly, doing good business, and practicing nondiscrimination Slide Number #33 The Role of the Board Working Well with the Board Slide Number #34 General Structure of a PHA PHAs design their own organizational structure May change with management or political changes or to accomplish new objectives The PH asset management model is driving changes to the PHA’s organizational structure Every PHA must have an executive director Slide Number #35 General Structure of a PHA Board of Commissioners Policy Executive Director Administration Staff Slide Number #36 Board Board is at top of organization Operates on behalf of local government Board’s role is determined by: Legal jurisdiction of PHA Legal structure of PHA Political environment Slide Number #37 Board Local governing body may be City Council, County Commissioners, State legislature or combination Slide Number #38 Nature of the Board Oversees policy and hires the executive director Executive director implements policy and hires staff Establishes budgets Builds and maintains the PHA’s image Slide Number #39 Nature of the Board Board must: Provide direction in achieving common purpose Govern the PHA’s resources Maintain, preserve, develop and expand programs and services Ensure viability of agency Slide Number #40 Board Responsibilities Board sets policy Board policy is the direction or course of action the PHA will take with the mission Boards do not have time to manage – this is not their role Board should monitor bottom-line results Slide Number #41 Board Responsibilities Fiduciary responsibility to: Act in good faith and uphold integrity See that PHA is well managed Not to make decisions based on personal or special interests Committed to values of organization Make hard choices about which program or service to fund Slide Number #42 Board Hires ED Executive director manages the organization Board members should support the executive director Board must evaluate executive director each year Slide Number #43 Participant on Board Board must include one resident directly assisted by PHA Exceptions: Board members are full-time and salaried as required by state law; or PHA is not governed by a governing board Slide Number #44 Resident on Board Doesn’t apply to PHA that: Has less than 300 public housing units Has provided reasonable notice to RAB for residents to serve No resident is interested PHA outreaches to residents at least once a year Slide Number #45 ED and the Board ED is more than just an employee of the board Should sit at the board table at all meetings Should make well-supported recommendations 1-15 Slide Number #46 ED and the Board Board delegates to ED the day-to-day responsibility to: Implement board policies Represent PHA in negotiations, public relations, HUD business, public events Hire, direct, supervise, train, evaluate and discipline staff Slide Number #47 Board’s Relation to Staff Board’s only employee is the ED Employees need to understand that the ED gives orders and that they are accountable to the ED Board hires ED to be expert in managing personnel and the agency ED is accountable to the board for staff performance Slide Number #48 Board’s Relation to Staff Chain of command has rules… Board members have no authority to issue orders to staff except through ED Board has no directly responsibility for assessing staff performance Board doesn’t usually act on complaints from staff Board shouldn’t let staff “short circuit” chain of command Slide Number #49 Working Well with the Board The relationship between board members and the executive director define the organizational “culture” of the PHA and defines the relationship with the entire staff of the PHA and the organization as a whole Slide Number #50 Working Well with the Board The most important decision a board makes is the selection of the executive director The second is the selection of the board chair Boards and the executive director work together to accomplish the PHA’s mission 1-16 Slide Number #51 Working Well with the Board The board also needs to understand that the executive director must be free to manage the day-to-day activities of the PHA They must understand that their role is governance Simply stated, they set the direction of the agency Slide Number #52 Working Well with the Board Remember, you work for the board, they do not work for you The executive director has one boss, the full board The executive director is not responsible to each board member Slide Number #53 Working Well with the Board The board must speak with one voice when delegating, giving direction, or asking for accountability This can be a difficult balancing act for an executive director especially when you have strong-willed board members who think that their opinion is more important than their counterparts Slide Number #54 Working Well with the Board It is imperative that the executive director gives equal respect to all board members to avoid creating an environment that divides the board and results in the mission of the agency being undermined The board chair and the executive director should have a strong, ongoing, working relationship Slide Number #55 Working Well with the Board What must be communicated to the board in word and deed is your willingness to do the following: Perform your duties efficiently and at the highest degree of competence Take initiative and risks without being risky Adapt to a changing environment Make informed decisions Work as a team with staff and the board Slide Number #56 Working Well with the Board Be open with information about perceived or actual problems confronting the PHA Be trustworthy Have respect for the board, staff, internal and external customers Accept responsibility for your actions or inaction Be open to praise or criticism based on your performance Slide Number #57 Executive Director Necessary abilities of any ED are decision making, planning, and problem solving Degree of responsibility varies with the size of the PHA and programs covered Slide Number #58 Executive Director General areas of responsibility: Leader Visionary and information bearer Decision maker Manages day-to-day operations Board developer Slide Number #59 Strategic Management of HCV and PH Slide Number #60 Strategic Thinking Many PHAs spend most of their time “fighting fires” – realizing and reacting to problems Major differences between a “fighting fires” organization and a strategic organization is the skill to see the broad perspective and taking the long view Slide Number #61 Strategic Management A general rule: You need to know how your programs are doing! SEMAP, PHAS, QC – watch the trends If your programs need improving, if trends are headed in the wrong direction, the formula is leadership, a plan, and hard work Slide Number #62 Strategic Management Another general rule: Put ethics on the front burner Doing what’s right, fair and honest should be a corporate value, modeled at the top It can be a challenge to know what’s right Ignorance isn’t an excuse under the law Ask, consult, and discuss if you don’t know Slide Number #63 Strategic Management The Three R’s of Ethics Respect To people, resources, work Responsibility To clients, co-workers, your PHA and you Results That consider how as well as what Slide Number #64 Strategic Management Hire and promote quality directors and staff Conduct job analysis Develop job descriptions Develop performance standards – and ensure standards through quality control Hire the best employees… Slide Number #65 Strategic Management Hire and promote quality directors and staff Train staff Job tasks, nondiscrimination, new policies Ensure and insist on quality supervision Ensure performance evaluations are conducted Slide Number #66 Strategic Planning There are required policies that you must approve These are your PHA’s roadmaps! Your job is to ensure these policies are comprehensive, up-to-date, and comply with HUD regulations and federal, state and local law Slide Number #67 Strategic Planning Your job is to make sure that PHA practice matches policy! Who is responsible for policy implementation? When the Board approves new policies are staff informed and trained? Slide Number #68 Strategic Planning Here are the policies you need to know: PHA Five-Year Plan and Annual Plan Admissions and Continued Occupancy Policy (ACOP) The public housing lease Administrative Plan Slide Number #69 Strategic Planning PHA procurement policy PHA personnel policy Collective bargaining agreement for unionized agencies Slide Number #70 Other Policies and Records to Consider Disposition policy Resident management policy Automobile Travel Capitalization policy Public records policy Insurance records Slide Number #71 Performance Assessment - SEMAP Slide Number #72 Purpose of SEMAP SEMAP was created to: Objectively measure key areas Identify mgmt capabilities/deficiencies Improve HUD risk assessment for each problem identification Provide self-assessment tool for PHAs Use as a strategic management tool! Slide Number #73 Key Performance Indicators 1. Waiting list 15 2. Reasonable Rent 3. Adjusted Income 4. UA Schedule 20 20 5 5. HQS QC 6. HQS Enforcement 5 10 7. Expanding Housing Slide Number #74 5 Key Performance Indicators 8. Payment Standards 5 9. Annual Reexams 10. Correct Tenant Rent 11. Precontract HQS 10 5 5 12. Annual HQS 13. Leaseup 10 20 14. FSS 10 Slide Number #75 HCV Lease-Up and Utilization More than ever, the HCV manager must be a business manager Must monitor the lease-up for utilization Slide Number #76 HCV Lease-Up and Utilization Background The PHA enters into HAP contracts on behalf of eligible families for the number of units reserved under ACC for at least one year Slide Number #77 HCV Lease-Up and Utilization How HUD gets lease-up count: Number of authorized units is from HUDCAPS (HUD Central Accounting Processing System) Calculated by number of leased-up families in PIC, minus administered port-ins, plus portouts administered by other PHAs Slide Number #78 HCV Lease-Up and Utilization In the event a PHA has insufficient allocated budget authority to lease 98 or 95 percent of the units under ACC, HUD will consider whether the PHA has used at least 98 or 95 percent of its allocated budget authority In other words, whichever is higher without going over – units or money Page 2-118 Slide Number #79 Lease-Up Caution Meanwhile, federal law states that, in any calendar year, PHAs must not exceed their allocated unit lease up Example: A PHA allocated 1,000 units may not have more than 12,000 Unit Months Leased (UML) in a Jan – Dec calendar year 1,000 x 12 months = 12,000 UML Page 2-118 Slide Number #80 SEMAP Performance SEMAP certifications and ratings PIC integrates with form HUD-50058 Ratings are based on PHA certifications, PIC data, field office reviews, and audit reports Ratings for indicators 1-7 are initially based on PHA SEMAP certification Slide Number #81 SEMAP Certification Form HUD-5264B Signed by executive director and board chairperson SEMAP Performance HUD completes SEMAP profile and rating based on PHA’s certification Notification letter generated by PIC SEMAP rating report available over internet HUD field office monitors Slide Number #83 Supervisory QC Reviews Some indicators require supervisory audits Objective is to determine compliance with indicator Annual samples of files drawn in unbiased manner (leave clear audit trail) Supervisor or other qualified person other than the one who did the work Slide Number #84 Supervisory QC Needed Waiting list 15 Reasonable Rent 20 20 Adjusted Income UA Schedule HQS QC HQS Enforcement 5 5 10 Expanding Housing 5 Slide Number #85 Comes from PHA certification Subject to modification, based on audit Performance Assessment – PHAS Slide Number #86 Purpose of PHAS PHAS was designed by HUD to enhance public trust by creating a comprehensive oversight tool that effectively and fairly measures a PHA based on objective and uniform standards Slide Number #87 Four PHAS Indicators Physical Condition 30 points Financial Condition 30 points Management Operations 30 points Resident Service & Satisfaction 10 points Slide Number #88 The New PHAS PIH 2008-18(HA) published March 27, 2008 HUD is moving forward on project-based PHAS HUD will issue a proposed PHAS rule in Spring of 2008 – including four scoring notices Form 5834 will be used for onsite management reviews of projects Scoring will be in the proposed rule Slide Number #89 The New PHAS The last PHAs to get a score under the current PHAS will be those with FYE March 31, 2008 After that, only physical condition of each project will be scored in the PHAS transition year Slide Number #90 The New PHAS – PIH 2008-18 FAQs The COCC (central office) will not be scored under financial condition – only the financial condition of each project will be measured Slide Number #91 The New PHAS – PIH 2008-18 FAQs Management assessment HUD will use 5834 but will utilize a “greater delineation” between performance, compliance, and process As much as possible, performance will be what’s scored Slide Number #92 The New PHAS – PIH 2008-18 FAQs Capital Fund Program Obligation and expenditure will be assessed for each project Slide Number #93 Proposed PHAS Breakdown The proposed PHAS is anticipated to be comprised of four components PASS - 30 Points FASS - 20 Points MASS (onsite review) – 40 Points Capital Fund – 10 Points Slide Number #94 PHAS and Asset Management The new operating subsidy model is a fundamental change Historically, the central office decided how “ob sub” would be spent Now, all money goes to the projects, and projects have to pay for everything else Slide Number #95 Asset and Project-Based Management Two components of HUD’s new model: Project-based management is decentralized property services tailored to the needs of each property, given the resources available to each property. Asset management is centralized services tailored to the needs of the portfolio as a whole Slide Number #96 Basic Requirements of PBM The new formula: Requires PHAs with 250 or more (250-400 can opt out for this calendar year) PH units to transition to project-based accounting, budgeting, and management By 2011, PHAs must comply with full model Slide Number #97 The New Model for PH Any service to the project not at the project will come from a cost center Every PHA will have a central office cost center (COCC) Direct services will charge the project Some functions – waiting list, tenant services, protective services – can be allocated to AMPs Slide Number #98 HUD’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 Slide Number #99 Compliance with Asset Management Best definition of compliance so far is in Notice 2006-14(HA) Guidance on successful conversion for stoploss agencies Slide Number #100 Seven Criteria for Compliance with Asset Management 1. Project-based accounting Monthly operating statements for each project – revenues and expenses vs. budget levels, including all fees from the COCC and Capital Fund Must reasonably reflect the financial performance of each project Sum of operating statements = total PH Seven Criteria for Compliance with 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 Slide Number #102 Seven Criteria for Compliance with 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 Slide Number #103 Seven Criteria for Compliance with Asset Management 4. Centralized services Centralized services that directly support projects are funded using a fee-for-service approach or through other allowable chargebacks Each project charged for actual services received Must be reasonable compared to local market Seven Criteria for Compliance with 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 #105 Seven Criteria for Compliance with Asset Management 5. Review of project performance – a nonperforming property has: PHAS physical score below 70 Significant crime and drug problems Below 95% occupancy TARS that exceed 7% of monthly rent roll … Slide Number #106 Seven Criteria for Compliance with Asset Management 5. Review of project performance – a nonperforming 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 problems Slide Number #107 Turnaround = D more than 30 days WOs = D more than 40 days Seven Criteria for Compliance with Asset Management 5. Review of project performance Long-term prospects for each property: Maintain project as is Identify capital improvements needed Dispose of property (demo, sale, etc) Conversion Slide Number #108 Seven Criteria for Compliance with 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 Seven Criteria for Compliance with 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 #110 Seven Criteria for Compliance with 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 Bottom Line PH projects have to be viable Strategic portfolio decisions Highly skilled staff at site Good electronic reports Slide Number #112 The Importance of Quality Control Makes success measurable Shows you early rather than late where problems are Essential for strategic leadership and planning Slide Number #113 Quality Control Implementing an effective QC program: Enables you to know when to take action on performance issues Documents improvements in performance Enhances the quality of the services you provide Slide Number #114 What is Quality Control (QC)? Quality control is an important tool used by high performing organizations for: Error prevention Compliance documentation Performance documentation Slide Number #115 What is Quality Control (QC)? An effective quality control program: Facilitates conversation about expectations and performance for individuals and the organization as a whole Enables program managers to be proactive, rather than reactive Slide Number #116 Why Quality Control? Quality control can help to confirm what you already know. It can: Provide documentation that supports recommendations you want to make Generate statistics that document staff performance Provide valuable information on a systematic basis to share within and outside your organization Slide Number #117 Why Quality Control? QC can be even more helpful if the results are a surprise Then the results may highlight: Problems of which you were not aware Good news about improved performance or excess capacity Slide Number #118 Types of QC Preventive QC stops mistakes before they happen Periodic quality control is a basic checkup on a PHA’s performance, policies and procedures that is done annually or regularly Done by high-level policy makers Slide Number #119 Types of QC Continuous quality control is regularly checking and analyzing information about key transactions Happens from frontline supervisors up through the organization The challenge is in choosing key indicators of performance Slide Number #120 Designing a QC Program Slide Number #121 Designing a QC Program Where to start Before you begin it is very important to think through: What are the outcomes you want to achieve? What would success for each outcome look like? What are the possible ways to confirm (measure) performance in this area? Slide Number #122 Designing a QC Program Where to Start Then decide: Which measures are useful and feasible How you are going to record the information Who needs to know the results Slide Number #123 The Housing Authority’s Role in the Community Slide Number #124 Need for Organizational Change Includes a shift in the PHA’s mission of restructuring of operations, for example: Implementing asset management Instituting self-managed teams (at AMPs) Conducting systematic layoffs or rightsizing Developing new technologies Seeking major collaborations Slide Number #125 Managing Change As the organization changes: Successful change involves top management There must be a realistic plan, implemented as a team, with frequent communication to everyone Structures will be modified Including strategic plans, policies and procedures Slide Number #126 The PHA’s Role in the Community The PHA has many external relationships: Resident families Other government agencies (DHSS, Soc Sec) Community-based agencies Local city and county government Judicial system HUD Slide Number #127 The PHA’s Role in the Community A general rule: Work with the people doing the work! You’ll be stronger for your collaborations Be an active partner in the community Communicate and educate Do good business and do business well Slide Number #128 Summary Thank you for attending! Join us again Slide Number #129 Upcoming Lunch ‘n’ Learns May 2 – Verification Issues May 9 – Managing PHAS May 16 – Managing SEMAP June 12 – PH Rent Calculation June 13 – HCV Rent Calculation June 20 – Ethics in Your Housing Authority Slide Number #130