[Federal Register Volume 60, Number 15 (Tuesday, January 24, 1995)]
[Notices]
[Pages 4764-4821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1718]
[[Page 4763]]
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Part VII
Department of Housing and Urban Development
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Office of the Assistant Secretary for Public and Indian Housing
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Annual Factors for Determining Public Housing Agency Administrative
Fees for the Section 8 Rental Voucher and Rental Certificate Programs;
Notice
Federal Register / Vol. 60, No. 15 / Tuesday, January 24, 1995 /
Notices
[[Page 4764]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Public and Indian Housing
[Docket No. N-95-3859; FR-3830-N-01]
Annual Factors for Determining Public Housing Agency
Administrative Fees for the Section 8 Rental Voucher and Rental
Certificate Programs
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Notice of factors for determining public housing agency and
Indian housing authority administrative fees for the Section 8 rental
certificate and rental voucher programs.
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SUMMARY: This Notice announces the annual factors for use in
determining the on-going administrative fee for housing agencies (HA)
administering the rental voucher and rental certificate programs during
Federal Fiscal Year 1995.
EFFECTIVE DATE: HUD will use the procedures in this Notice to approve
year-end financial statements for housing agency fiscal years ending on
December 31, 1994; March 31, 1995; June 30, 1995; and September 30,
1995. Housing agencies also may use these procedures to project earned
administrative fees in the annual housing agency budget. Housing
agencies with a fiscal year starting October 1, 1994, and January 1,
1995, must submit a revised budget to the field office for approval.
The procedures in this Notice only apply to that portion of the housing
agency fiscal year that coincides with the Federal FY 1995.
FOR FURTHER INFORMATION CONTACT: Gerald J. Benoit, Director, Operations
Branch, Rental Assistance Division, Office of Public and Indian
Housing, Department of Housing and Urban Development, Room 4220, 451
Seventh Street, SW, Washington, DC 20410-8000, telephone number (202)
708-0477. Hearing or speech impaired individuals may call HUD's TDD
number (202) 708-4594. (These numbers are not toll-free.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
The information collection requirements contained in this notice
have been approved by the Office of Management and Budget (OMB), under
section 3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-
3520), and have been assigned OMB control number 2577-0149.
I. Purpose and Substantive Description
(a) The system that HUD used to determine administrative fees
before FY 1995 had three different rates that were applied to the
Section 8 existing housing fair market rents. The rate used for rental
vouchers funded before FY 1989 was 6.5 percent and for rental
certificates funded before FY 1989 was 7.65 percent. These rates were
also used for non-incremental rental vouchers and certificates funded
after FY 1988. The rate used for incremental rental vouchers and
certificates funded after FY 1988 was 8.2 percent. The rate for renewal
funding increments was the same as the rate initially used for the
expired funding increment.
Housing agencies believe that the HUD method of tying fees to fair
market rents does not reflect the actual costs of administering these
programs. The problems associated with tying fees to fair market rents
were most evident in FY 1994 when the fair market rents for most of the
country were decreased based on the decennial census. As a result, HUD
sought and Congress approved, for FY 1994 only, a ``hold-harmless''
provision so that housing agencies would not suffer a reduction in
income and thereby jeopardize their ability to properly administer
these programs.
(b) Section 8(q) of the U.S. Housing Act of 1937 (42 U.S.C.
1437f(q)) requires the Secretary to establish a fee for the housing
agency costs incurred in administering housing assistance under Section
8(b) (rental certificate program) and Section 8(o) (rental voucher
program) to the extent provided in appropriations. Section 8(q) is only
applicable when so provided in appropriations, and applies only to
incremental units funded in FY 1989 and subsequent years. For rental
vouchers and certificates subject to Section 8(q), Section 8(q)
provides that the on-going fee for each month a dwelling unit is
covered by a housing assistance contract is 8.2 percent of the current
fair market rent for a two-bedroom dwelling unit subject to
appropriations.
(c) All Appropriations Acts, beginning with FY 1989, required that
HUD reimburse housing agencies using the formula in Section 8(q) for
incremental rental vouchers and certificates provided from those
appropriations. The law does not specify the amount of fees for units
made available through Appropriations Acts for FY 1988 and earlier or
for non-incremental rental vouchers or certificates provided in FY 1989
and subsequent appropriations.
HUD has determined that it is in the best interest of the rental
voucher and certificate programs to continue to reimburse housing
agencies at a level sufficient to maintain the integrity of these
programs. In FY 1995, HUD will reimburse housing agencies for
administrative expenses attributable to all incremental and non-
incremental rental vouchers and certificates made available from FY
1989 and subsequent appropriations using the formula in Section 8(q).
HUD will reimburse housing agencies for pre-FY 1989 units using a new
method described below using a fee base developed by HUD, and the
resulting per unit fee amounts subsequently will be updated annually
using wage and salary data.
II. Supersedure
On September 26, 1994, HUD issued an administrative Notice (PIH-94-
68) establishing the procedures for calculating fees under the rental
voucher and certificate programs. On September 28, 1994, the VA-HUD and
Independent Agencies Appropriations Act (Pub.L. 103-327) was signed; as
enacted, the Appropriations Act required HUD to pay administrative fees
for FY 1995 incremental rental vouchers and certificates using the 8.2
percent specified in Section 8(q) of the U.S. Housing Act of 1937. The
provisions of the HUD Notice PIH-94-68 are superseded for unit months
commencing October 1, 1994. Instead, the provisions of this Notice
apply.
III. Method to Determine Per Unit On-Going Administrative Fee
(a) Method for Pre-FY 1989 Fees
A housing agency is paid an on-going administrative fee for each
month for which a dwelling unit is covered by a housing assistance
contract. Under the revised system, the on-going administrative fee for
pre-FY 1989 units is calculated using 8.2 percent of a ``base amount''
for the first 600 rental vouchers and certificates in the housing
agency's program and 7.79 percent of the base amount for each
additional rental voucher and certificate above 600. The base amount is
subject to a floor and ceiling. The 600 units are the combined total of
the housing agency's rental voucher and certificate programs and not
600 for each program.
The ``base amount'' used by HUD is the higher of (a) the FY 1993
fair market rent for a two-bedroom unit in the housing agency's market
area, or (b) the FY 1994 fair market rent for a two-bedroom unit, but
not more than 103.5 percent of the FY 1993 fair market rent. HUD
established a maximum of $811 [[Page 4765]] and a minimum of $428 for
the base amount used to calculate housing agency administrative fees.
To determine these maximum and minimum base amounts, HUD examined
available information on administrative expenses and reimbursements for
a nationally representative sample of all housing agencies, and
established a level of reimbursement to assure that all housing
agencies could cover reasonable expenses and generate a modest surplus.
In a recent report to Congress on housing agency administrative fees,
HUD indicated that data collected by HUD and others over the last
decade show distinct differences among various types of housing
agencies in their ability to cover administrative costs. The use of a
minimum and a maximum base amount, in combination with the other
features of the FY 1995 method of reimbursement, are designed to
address this inequity.
This ``base amount'' concept builds on the practices used in FY
1994 based on Section 11 of the HUD Demonstration Act of 1993 (Pub.L.
103-120, approved October 27, 1993). The base amount is used only to
determine the monthly per unit fee amount for Federal FY 1995. The
monthly per unit fee base amounts for pre-FY 1989 rental vouchers and
certificates will be updated annually using wage and salary data.
(b) Published Fee Amounts
HUD has attached a schedule of monthly per unit fee amounts for use
by HUD and housing agencies when preparing and approving housing
agencies' budgets and fiscal year-end financial statements. The tables
are organized by the HUD established fair market rent areas and show
the monthly fee amounts a housing agency will earn for each unit under
a housing assistance contract on the first day of the applicable month.
In determining unit months, the same lease-up rate will be applied to
pre-FY 1989 rental vouchers and certificates and FY 1989 and subsequent
rental vouchers and certificates.
(1) Column A
The amount in this column is the monthly per unit fee amount for up
to 7,200 unit months in Federal FY 1995 for rental vouchers and
certificates in the housing agency's program from FY 1988 and prior
year appropriations. (This amount was developed by multiplying the fee
base established by .082.) The monthly per unit fee amount shown on the
schedule will be used to reimburse a housing agency for up to 7,200
unit months in Federal FY 1995 for rental vouchers and certificates in
its combined program. The reimbursement is computed by multiplying the
number of unit months the rental vouchers or certificates in the
housing agency programs were under a housing assistance contract during
Federal FY 1995 by the per unit amount in column A. The maximum number
of unit months in Federal FY 1995 for the housing agency's fiscal year
that this revised procedure is implemented depends on the housing
agency fiscal year end:
Dec. 31 HA................... 1,800 unit months................ (7,200 x .25 [3 mos.] of FFY 1995).
Mar. 31 HA................... 3,600 unit months................ ..............................................
June 30 HA................... 5,400 unit months................ ..............................................
Sept. 30 HA.................. 7,200 unit months................ ..............................................
(2) Column B
The amount in this column is the monthly per unit fee for any unit
months in Federal FY 1995 in excess of the amount used in (b)(1) for
rental vouchers and certificates made available from FY 1988 and prior
year appropriations. This amount was developed by multiplying a fee
base established by HUD by .0779 (95 percent of .082). The monthly per
unit fee amount shown on the schedule will be used to reimburse housing
agencies for any pre-FY 1989 rental vouchers and certificates under
housing assistance contract in Federal FY 1995 in excess of the number
of unit months for which the fee is calculated from column A. The
monthly per unit fee in column B will be multiplied by the number of
unit months that rental vouchers and certificates under housing
assistance contract exceeds unit months for which a fee is calculated
from column A.
(3) Column C
The amount in this column is the monthly per unit fee for rental
vouchers and certificates made available from FY 1989 and subsequent
appropriations. This amount was developed by multiplying the most
recent two-bedroom fair market rent by .082 (8.2 percent) as required
by law. The amount shown on the schedule will be used to reimburse
housing agencies for all unit months for which FY 1989 and subsequent
incremental and non-incremental rental vouchers and certificates were
under housing assistance contract by multiplying the number of unit
months under housing assistance contract by the per unit amount shown
in column C.
(c) Future Year Publication Date
HUD intends to publish an annual Notice in the Federal Register
establishing the monthly per unit fee amounts for use in determining
the on-going administrative fees for housing agencies operating the
rental voucher and certificate programs in each metropolitan and each
non-metropolitan fair market rent area for that Federal fiscal year.
The annual change in the per-unit-month fee amounts for the pre-FY 1989
rental vouchers and certificates will be based on changes in wage data
or other objectively measurable data, as determined by HUD, that
reflect the costs of administering the program. As long as Section 8(q)
is in effect, the annual change in the monthly per unit fee amounts for
the FY 1989 and subsequent incremental and non-incremental rental
vouchers and certificates will be calculated by multiplying the two-
bedroom fair market rent by 8.2 percent (.082).
The amounts shown on the attached schedule do not reflect the
authority given to HUD to increase the fee if necessary to reflect the
higher costs of administering small programs and programs operating
over large geographic areas and for extraordinary expenses because of
difficulties some categories of families are having in finding
appropriate housing. Furthermore, the amounts shown do not include
preliminary fees. HUD may also approve higher fees if necessary to
reflect the higher costs of administering the family self-sufficiency
program under section 23 of the U.S. Housing Act of 1937. Housing
agency requests for administrative fees and special fees as well as
higher on-going administrative fees will continue to be considered by
HUD using the procedures currently in place for providing increased
fees.
Accordingly, the Department publishes these annual factors for
determining housing agency administrative fees under the rental voucher
and rental certificate programs as set forth on the following schedule:
[[Page 4766]] Dated: January 13, 1995.
Joseph Shuldiner,
Assistant Secretary for Public and Indian Housing.
BILLING CODE 4210-33-P
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[FR Doc. 95-1718 Filed 1-23-95; 8:45 am]
BILLING CODE 4210-33-C
