terry provance

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Terry Provance

Managing PHAS

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Managing PHAS

As a result of attending this session, you will:• Understand the theory behind PHAS• Identify PHAS indicators and how they are

measured and scored• Understand the new PHAS as proposed• Begin to be able to use these assessments as a

management tool

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Introduction

PHAS was designed to be system of accountability to assist HUD in monitoring and evaluating public housing• Defines acceptable standards for key areas • PHAs should use PHAS as a management

toolDon’t wait for a score from HUD!

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Introduction

We’ll describe how PHAS should be applied to the asset management projects (AMPs)• AMPS will become the new PHAS

measurement focus• We’ll be discussing the new project-based

PHAS

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PHAS

Four indicators:• Physical condition• Financial condition• Management operations• Resident service and

satisfaction

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Four Indicators

Physical condition 30 points Financial condition 30 points Management operations 30 points Resident service & satisfaction 10 points

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PHAS Scoring

A PHA’s overall PHAS grade will place it in one of the following categories:• High performer 90% to 100%• Standard performer 60% to 89%• Troubled performer 0% to 59%

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Mandatory Requirements

Many of the current PHAS indicators are statutory• Vacancy rate• Capital fund obligation and expenditure• Rent collection• Utility consumption• Unit turnaround time…

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Mandatory Requirements PHAS indicators which are statutory:

• Work orders• Inspections of units and systems• Screening, eviction, and anti-crime strategies• Economic self-sufficiency• Acceptable basic housing conditions• Other factors as deemed by HUD

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PHAS Indicator #1: Physical Condition

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Description & Purpose

For HUD to ensure that all PHAs provide housing that is:• Decent• Safe• Sanitary• In good repair

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The Condition of Properties HUD’s intent is to determine condition of

PHA’s housing stock HUD assigns score

• UPCS software has all PHA addresses• Physical condition measured numerically• Objective and consistent• For all property types and configurations

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What is Inspected

Inspector inspects:• Site Always 100%• Building Exteriors Sampled• Building Systems Sampled• Common Areas Sampled• Units Sampled

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How Inspectors Inspect

HUD-contracted inspectors use hand-held computers with PASS software from HUD• Random sample generated• Software starts with a perfect score of 100

Deficiencies carry point deductionsHealth & safety deficiencies biggest deductions

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Indicator #2: Financial Condition

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Description & Purpose

Measures financial condition of PHA • Does the PHA have, and is it capable of

managing, financial resources to support a housing program

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Assessment Six financial condition components:

• Current ratio• Number of months expendable fund balance• Tenant receivable outstanding• Occupancy loss• Expense mgmt/utility consumption• Net income or loss

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Indicator #3:Management Operations

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Assessment

Vacant unit turnaround time Capital Fund Work orders Inspection of units and systems Security Economic self sufficiency

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Reporting Requirements

PHA must certify on HUD form-50072 on performance under each of the management indicators

This is the indicator which will change from self-certification to onsite management review• Form 5834 will be used

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PHAS Indicator #4Resident Service & Satisfaction

10 points maximum• 5 points implementation

and follow-up• 5 points for the survey

results

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Project-Based PHAS

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Project-Based PHAS

PHAS is being revised to be project-based• The AMPs will be the new measurement focus

Each AMP will receive its own PHAS scoreThe AMPs are the PHA’s groupings of

properties for project-based accounting, budgeting, and management

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The New PHAS

9/6/06 Fed Register Guidance Notice on Asset Mgt - HUD would revise PHAS to support the transition to asset mgt

• PHAs to be measured at AMP level March, 2007 Asset Management e-Newsletter

- HUD discussed conforming PHAS to multifamily housing standards

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HUD Proposed Changes

03/2007 Asset Mgt e-Newsletter - HUD to:• Conduct and track PIH-REAC physical

inspections by AMP• Modify electronic submission of the FDS to

support collection of AMP-level data• Replace PHA’s current MASS submission with

on-site reviews (similar to multifamily)

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03/2007 Asset Mgt e-Newsletter - HUD to:• Establish new “integrated” assessment based

on newly developed PHAS indicatorsSimplify current scoring methodologiesSignificantly reduce PHA submission

requirements

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On-site management reviews of AMPs (similar to multifamily)• Would replace the subject-specific reviews• Will eliminate need for PHAS confirmatory

reviews (no PHA certifications)

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Note that fee income (property management fees, bookkeeping fees, asset management fees, capital fund management fees, etc) is not considered “program income”• No review of the COCC• Not subject to federal review!• Will streamline PHA compliance reviews

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In Federal Register, February 8, 2008, HUD published for public comment it’s proposed “Management Review for Public Housing Projects” form HUD-5834• Form to be used by HUD (or contractor)

review team

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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 noticesScoring will be in the proposed rule

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Notice PIH 2008-18

The new PHAS indicators will assess, for each AMP:• Physical condition• Financial condition• Management assessment• Capital fund obligation/expenditure

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Notice PIH 2008-18

Notice 2008-18 is mostly FAQs• For first year, will PHA continue to be scored

under the old (current) PHAS?No – the last PHAs to get a score under the

current PHAS will be those with FYE March 31, 2008

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Notice PIH 2008-18

Physical condition• No significant changes are anticipated in the

protocol for REAC inspections If a PHA scored 80 or above in the year

immediately before the transition year, the PHA’s AMPs won’t get inspected in the transition year

• If projects were combined into different AMPs, HUD will use a unit-weighted score

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Notice PIH 2008-18

Financial condition• Although PHAs have to submit the project-

based FDS, financial condition will not be scored by project under the transitional PHAS

• Only physical condition of each project will be scored

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Notice PIH 2008-18

Financial condition• Financial condition of each AMP will be measured

HUD will issue a final version of the Financial Data Schedule (FDS)

Probably financial liquidity (current ratio) will be assessed

• COCC and non-public housing won’t be included in the financial assessment

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Notice PIH 2008-18

Management assessment• HUD will attempt to conduct at least one onsite

management review at all PHAs in the transition year, in order to expose PHAs to the new system

• Management reviews will not be scored in the transition year

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Notice PIH 2008-18

Management assessment• Onsite management review will utilize HUD-5834

Form based on HUD-9834 for multifamilyHUD says it will “delineate” between

performance, compliance and process• Performance will be what’s scored

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Goals of Review Form

To consolidate reviews of performance and compliance in a flexible manner

Allows reviewers to tailor on-site work to the needs of the project and HUD guidance

HUD-5834 contains information related to both performance and compliance

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Performance vs. Compliance

Performance items are those that most directly relate to how well the project is operated (e.g. rate of rent collection)

Compliance items are related to project observance of program regulations (e.g. did the staff calculate rent in accordance with HUD rules)

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On-Site Reviews

Management review form (5834) will provide the framework for the on-site reviews• Basic review will be high-level, looking at key

performance & compliance indicators• More detailed checklists can be incorporated

into the review as needed

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Notice PIH 2008-18

Management assessment• Performance will be scored

HUD is “examining” primary vs. secondary performance measures

• Primary = indicator of high level financial, physical, or management performance

• Secondary = diagnoses potential problems in these areas

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Notice PIH 2008-18

Management assessment• Performance will be scored

HUD states that a project’s vacancy rate is a primary performance indicator, while unit turnaround is a secondary measure

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Form HUD-5834

Let’s look at this form more closely, since it will be an important assessment tool for project-based management under PHAS• 7 sub-indicators

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Form HUD-5834Review for Projects

General appearance and security• Appearance and market appeal

Entrance, building exterior, paved surfaces, fencing, porches, trash, landscaping, graffiti, public spaces and amenities windows, debris, units…

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General appearance and security• Security

Crime statistics, law enforcement certification, discussions with law enforcement, observations, discussions with resident, policies for screening and evicting for history of drug-related criminal activity, alcohol abuse, and criminal

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Follow-up and monitoring of project inspections• Exigent H&S deficiencies• Lead-based paint inspection deficiencies…

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Maintenance• Unit inspections• Work orders

Average completion time• Progress in preceding three years

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Maintenance• Preventive maintenance

Systems applicable to property and in preventive maintenance plan:

• HVAC, security, fire safety, roof, gutters & downspouts, intercoms & doorbells, accessibility, elevators, mechanical, boilers, emergency generators, other

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Maintenance• Energy conservation/utility consumption

Energy audit within past 5 years?Energy audit less than 1 year old?Audit contains cost-effective

recommendations? Implemented? On schedule?

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Modernization• Physical needs assessment completed?

Updated in last 5 years?Estimating the useful life remaining and

modernization cost for all major building systems?

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Modernization• Is there a plan and budget for modernization

needs for major building systems projected to reach end of useful life in the coming FY?Consistent with PHA’s Annual Plan?

• Was a plan for mod work in previous FY?Work completed?

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Financial management• Accounts payable• Rent collection• Budget management• Procurement

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Leasing and occupancy• Vacancy rate• Turnaround time

You need to analyze make-ready time and lease-up time

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Leasing and occupancy• Occupancy review – forms 5834-A and 5834-B

Very detailed formsNumber of files reviewed Income correctly computed and verified?Rent correctly computed and verified?Applicants denied/admitted re: TSAP?

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Move-outs processed correctly?Lease contains required provisions?Grievances implemented appropriately?Met PIC reporting requirements?

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Complied with UIV procedures for safeguarding data, system security and resolution of income discrepancies?

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Tenant/management relations• Economic self-sufficiency

At least 85% of households have head, spouse or sole member who is elderly or disabled?

Current % of adults employed?Current % of adults participating in self-

sufficiency?

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Tenant/management relations• Economic self-sufficiency

Opportunities offered by project and/or coordinates with outside agency:

• Child care, financial counseling, homeownership counseling, substance abuse counseling, GED, vocational or job training, other activities

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Tenant/management relations• Resident involvement in project administration

Newsletter, Neighborhood Watch, regular tenant meetings, resident participation on committees, tenant management, contracts with resident-owned businesses, substance abuse counseling, service coordinator, Neighborhood Networks Center, other

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General management practices• Prior management review findings

Findings/corrective actions?Corrections initiated/progress being made?

• Other prior review findings

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General management practices• Insurance

Does the project have the coverage required by ACC?

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General management practices• Insurance policies held:

Commercial property, commercial general liability, worker’s comp, owned and non-owned auto, theft, disappearance & destruction, fidelity, boiler and machinery, directors & officers or public liability, law enforcement liability, flood, wind, other

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The New PHAS

Capital fund program• Obligation and

expenditure will be assessed for each AMP

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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

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A Systems Approach

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A Systems Approach

You have to know how the projects are performing• Continuous trend analysis

Leadership, a plan, and smart work

An efficient COCC More transparent data

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A Systems Approach

Key components:• Highly skilled staff at the projects• Accurate, on-time electronic reports from and

to the project• Properties performing well

Early intervention when needed

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A Systems Approach

Highly skilled staff at the projects:• Project managers are business managers

Managing to the budgetUnderstanding and managing to financial

reportsSkilled at marketing and tenant relations

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A Systems Approach

Highly skilled staff at the projects:• Up-to-date job descriptions• Analysis of knowledge, skills and abilities

needed and actual – and individual development plans

• Performance of property tied to performance evaluations

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A Systems Approach

Accurate, on-time financial reports• See stop-loss kit and forms HUD-5834

These are your templates• Quality control and file reviews• Define which reports the onsite staff will see

and manage to, reports to the asset manager, reports to the executive team, etc.

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A Systems Approach

Review of project performance• PHA systematically reviews financial, physical,

and management performance of each project, and identifies non-performing properties

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A Systems Approach

Review of project performance – a non-performing property has:

• PHAS physical score below 70• Significant crime and drug problems• Below 95% occupancy• TARS that exceed 7% of monthly rent roll

FAQ clarifies this means rent…

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A Systems Approach

Review of project performance – a non-performing 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 problemsTurnaround = D more than 30 daysWOs = D more than 40 days

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A Systems Approach

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 Political ramifications

Stop-Loss FAQs 9/1/06

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Summary

Start now• Train staff• Define performance

standards and manage to them

• Leadership, a plan, and hard work

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NMA Lunch ‘n’ Learn Seminar

NEXT TOPIC…

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NMA Lunch ‘n’ Learn Seminar

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Upcoming Lunch ‘n’ Learns

Managing SEMAP – May 16 Public Housing Rent Calculation – June 12 HCV Rent Calculation – June 13 Ethics in your Housing Authority – June 20

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