[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Proposed Rules]
[Pages 20358-20383]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10956]
[[Page 20357]]
_______________________________________________________________________
Part III
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 901
Office of the Assistant Secretary for Public and Indian Housing: Public
Housing Management Assessment Program; Proposed Rule
Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Proposed
Rules
[[Page 20358]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR PART 901
[Docket No. FR-3447-P-01]
RIN 2577-AB30
Office of the Assistant Secretary for Public and Indian Housing;
Public Housing Management Assessment Program
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule proposes changes to the Public Housing Management
Assessment Program (PHMAP). PHMAP provides policies and procedures to
identify PHA management capabilities and deficiencies, and assists HUD
State/Area Offices in accountability monitoring and risk management.
PHMAP also establishes procedures for developing, negotiating and
executing memoranda of agreement between HUD and troubled agencies and
agencies troubled with respect to the program under section 14 that set
forth targets, strategies, incentives and sanctions for improving
performance. Procedures to follow with respect to housing administered
by PHAs that substantially default on their management responsibilities
are included in PHMAP. PHMAP applies to public housing agencies (PHAs)
and resident management corporations (RMCs), and any other entities
under contract to manage public housing, but does not apply to Indian
housing authorities, nor to the Family Self-Sufficiency Program
authorized under section 23.
DATES: Comment due date: July 5, 1996.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Rules Docket Clerk, Office of General
Counsel, Room 10278, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410. Communications should refer
to the above docket number and title. A copy of each communication
submitted will be available for public inspection and copying between
7:30 a.m. and 5:30 p.m. weekdays at the above address. FAXED comments
will not be accepted.
FOR FURTHER INFORMATION CONTACT: MaryAnn Russ, Deputy Assistant
Secretary for Public and Assisted Housing Operations, Office of Public
and Indian Housing, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410, telephone (202) 708-1380. A
telecommunications device for hearing or speech impaired persons (TTY)
is available at (202) 708-0850. (These are not toll-free telephone
numbers.)
SUPPLEMENTARY INFORMATION:
I. Paperwork Reduction Act Statement
The proposed information collection requirements contained at
Sec. 901.100 of this rule have been submitted to the Office of
Management and Budget (OMB) for review, under section 3507(d) of the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
(a) In accordance with 5 CFR 1320.5(a)(1)(iv), the Department is
setting forth the following concerning the proposed collection of
information:
(1) Title of the information collection proposal:
Public Housing Management Assessment Program (PHMAP)
(2) Summary of the collection of information:
PHAs shall be required to certify to seven indicators and one
component because information regarding these indicators/ component is
not presently reported to HUD by PHAs on any form. The use of Form HUD-
50072, rather than the preparation and submission of a full data
report, was judged to be the least intrusive method of gathering the
information.
(3) Description of the need for the information and its proposed
use:
Section 502 of the National Affordable Housing Act of 1990 (NAHA)
establishes seven specific indicators and directs the Secretary to
develop no more than five other factors (indicators) deemed appropriate
to assess the management performance of public housing agencies (PHAs)
in all major areas of management operations. The designation of PHAs as
troubled or as troubled with respect to the program under Section 14
(mod-troubled) is based upon PHA performance under the indicators. The
proposed information collection will be used by HUD to assess annually
all PHAs at the beginning of the PHA fiscal year to allow the
Department to fulfill this mandate of NAHA.
(4) Description of the likely respondents, including the estimated
number of likely respondents, and proposed frequency of response to the
collection of information:
Respondents will be PHAs. The estimated number of respondents is
included in paragraph (5), immediately below. The proposed frequency of
responses is once annually.
(5) Estimate of the total reporting and recordkeeping burden that
will result from the collection of information:
Reporting Burden
----------------------------------------------------------------------------------------------------------------
Est. annual
Number of Freq. of Est. avg. burden
Reference respondents response time response
(hours) (hrs.)
----------------------------------------------------------------------------------------------------------------
1-99 Unit PHAs.............................................. 1,608 1 2.25 3,618.0
100-499 Unit PHAs........................................... 1,274 1 2.45 3,121.3
500-1249 Unit PHAs.......................................... 244 1 3.45 841.8
1250-3999 Unit PHAs......................................... 102 1 4.05 413.1
4000+ Unit PHAs............................................. 40 1 4.85 194.0
---------------------------------------------------
Total reporting burden.................................. ........... ........... ........... 8,188.2
----------------------------------------------------------------------------------------------------------------
Recordkeeping Burden
Recordkeepers................................................ 3,268.0
Hours per recordkeeper....................................... 1.0
Total annual responses....................................... 327.0
----------
Total burden............................................. 8,515.2
(b) In accordance with 5 CFR 1320.8(d)(1), the Department is
soliciting comments from members of the public and affected agencies
concerning the proposed collection of information to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
[[Page 20359]]
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond; including through the use of appropriate automated
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
Interested persons are invited to submit comments regarding the
information collection requirements in this proposal. Comments must be
received within sixty (60) days from the date of this proposal.
Comments must refer to the proposal by name and docket number (FR-3447)
and must be sent to:
Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and
Budget, New Executive Office Building, Washington, DC 20503
and
Reports Liaison Officer, Office of the Assistant Secretary for Public
and Indian Housing, Department of Housing and Urban Development, 451--
7th Street, SW., Room 4244, Washington, DC 20410
II. Background
The Public Housing Management Assessment Program (PHMAP) at 24 CFR
part 901 has been established in accordance with section 502 of the
National Affordable Housing Act (NAHA) (approved November 28, 1990,
Pub. L. 101-625), as amended by the Departments of Veterans Affairs and
Housing and Urban Development (HUD), and Independent Agencies
Appropriations Act, 1992 (92 App. Act) (approved October 28, 1991, Pub.
L. 102-139) and the Housing and Community Development Act of 1992 (HCDA
1992) (Pub. L. 102-550, approved October 28, 1992). The need to
identify and assist troubled PHAs and PHAs troubled with respect to
section 14 (mod-troubled), and to provide for consistently high quality
management of PHAs was statutorily recognized in section 502 of NAHA,
which amended section 6(j) of the 1937 Act (42 U.S.C. 1437d(j)).
Section 502 requires the Department to develop indicators to assess the
management performance of PHAs. A PHA assessed as troubled or mod-
troubled must enter into a memorandum of agreement (MOA) with HUD that
sets forth targets, strategies and incentives for improving its
management performance, and provides for sanctions if improved
performance does not result. Section 502 also provides that if a PHA
substantially defaults upon its agreement or with respect to other
covenants or conditions to which it is subject, the Department may
solicit proposals from other public housing agencies and private
housing management agents for the management of the housing
administered by the defaulted PHA. Alternatively, following a default,
the Department may petition the appropriate State or Federal court to
appoint a receiver to manage the defaulted PHA. The Department may also
require a defaulting PHA to make other acceptable arrangements for
managing all or part of its operation in the best interests of the
residents.
A proposed rule to implement section 502 as the Public Housing
Management Assessment Program (PHMAP) at 24 CFR part 901 was published
in the Federal Register on April 17, 1991 (56 FR 15712), with a 60-day
comment period. The Department received 114 comments on the PHMAP
proposed rule.
The 92 App. Act, passed after the publication of the pro-posed
rule, amended NAHA section 502 in four ways: The number of factors that
may be used to assess the management performance of PHAs is limited
(seven indicators that must be used for assessment purposes were listed
in section 502 of NAHA, and the Department was authorized by the 92
App. Act amendments to develop five additional indicators as it deemed
appropriate); the evaluation of PHAs must be administered flexibly to
ensure that they are not penalized for circumstances beyond their
control; the weights assigned to indicators must reflect the
differences in management difficulty that result from physical
condition and neighborhood environment; and the determination of a
PHA's status as ``troubled with respect to the program under section
14'' is to be based upon factors solely related to its ability to carry
out that program. In a related 92 App. Act amendment to section 14 of
the 1937 Act, the determination of whether a PHA is ``troubled with
respect to the modernization program'' (the equivalent of mod-troubled)
is to consider only the PHA's ability to carry out the modernization
program effectively based upon the PHA's capacity to accomplish the
physical work with decent quality; in a timely manner; under competent
contract administration; and with adequate budget controls.
An interim rule was published on January 17, 1992, (57 FR 2160)
with a comment period of 120 days. After the publication of the PHMAP
interim rule, a number of statutory changes to PHMAP were made by
section 113 of HCDA 1992. Section 113(a) requires an on-site,
independent assessment of a PHA that is designated as mod-troubled and/
or troubled. Paragraph (b) of this section provides for additional
remedies upon the occurrence of a substantial default. The Department
may, under section 113(c), make available, to housing managers
appointed after a substantial default, the assistance necessary to
remedy the substantial deterioration of living conditions in individual
public housing developments or to remedy other related emergencies that
endanger the health, safety and welfare of the residents. Annual
reporting requirements to Congress that only affect the Department are
the subject of section 113(d). Section 113(e) makes the management
assessment provisions of PHMAP applicable to RMCs. The implementation
of these sections is discussed below in this preamble under the
heading, Summary Of Changes To The PHMAP Interim Rule.
Subsequent to the statutory changes to PHMAP made by section 113 of
HCDA 1992, the Department established a consultation group and held a
series of meetings to review existing PHMAP procedures and the
individual indicators. The group consisted of representatives of PHAs
of all sizes from across the country with a wide range of PHMAP scores,
public housing industry groups, private management firms, and HUD field
staff. Resident groups were solicited for their recommendations as
well. Revised indicators were field tested during the summer of 1994 at
45 PHAs of all sizes throughout the country. The results of the field
test were summarized and analyzed, which resulted in recommendations
for changes to the indicators.
The Department has determined that the revised PHMAP should be
issued as a proposed rule due to the degree of changes to the
individual indicators and the program itself. For example, three
indicators have been eliminated, four indicators have been combined
into two indicators, and other indicators have been completely
rewritten. The proposed changes are the result of a number of
considerations, including comments received on the interim rule,
inquiries and additional comments received from the field and the
regulated community, the field test conducted during the summer of
1994, and the Department's experience in administering the program. By
issuing a proposed rule, the Department is providing the public an
additional opportunity to comment.
[[Page 20360]]
III. Regulatory Reinvention
On March 4, 1995, President Clinton issued a memorandum to all
Federal departments and agencies regarding regulatory reinvention. In
response to this memorandum, the Department of Housing and Urban
Development conducted a page-by-page review of its regulations to
determine which can be eliminated, consolidated, or otherwise improved.
HUD has determined that the regulations for PHMAP can be improved and
streamlined by eliminating unnecessary provisions.
Several provisions in the regulations repeat statutory language
from the 1937 Act. It is unnecessary to maintain statutory requirements
in the Code of Federal Regulations (CFR), since those requirements are
otherwise fully accessible and binding. Furthermore, if regulations
contain statutory language, HUD must amend the regulations whenever
Congress amends the statute. Therefore, the new part 901 proposed here
does not repeat any statutory language, but only implements
requirements that are necessary to augment and implement fully section
6(j) of the 1937 Act, which provides the statutory authority for PHMAP.
This proposed rule further reinvents PHMAP by reducing the number of
indicators from twelve to eight; eliminating the designation of
subparts, which are unnecessary; and rewriting the entire remaining
rule text to promote clarity.
IV. Summary of Changes to the PHMAP Interim Rule
Only those portions of the current PHMAP regulation proposed for
revisions are addressed below.
HCDA 1992 Section 113 Amendments
The Department determined, in accordance with 24 CFR 10.1, that
prior public notice and comment were unnecessary to implement
paragraphs (a) and (c) of section 113, because these paragraphs involve
the exercise of little or no discretion on the part of the Department.
Section 113(d) applies only to the Department and does not require a
rule. Sections 113 (b)(1) and (e) of HCDA 1992 do require elaboration
of the statutory language, and are included in this proposed rule.
HCDA 1992 section 113(e) requires the assessment of RMCs, and makes
the provisions under paragraph (j)(2) of section 6 of the 1937 Act
apply to RMCs as well as to PHAs. Paragraph (j)(2) contains provisions
relating to: (1) Establishment of procedures for designating troubled
PHAs; (2) commendation of exemplary PHAs; (3) PHA appeal of designation
as a troubled agency; (4) agreements between HUD and troubled and/or
mod-troubled PHAs; and (5) new provisions added by HCDA 1992 section
113(a) that require independent assessments of PHAs that are designated
troubled and/or mod-troubled.
The Department proposes to implement section 113(e) by adding a
definition of RMC to Sec. 901.5 that would refer to 24 CFR part 964,
the regulation that provides for resident participation and management
in public housing in accordance with section 20 of the 1937 Act. This
proposed rule would provide for the management assessment of RMCs in a
manner consistent with the regulatory framework established under
section 20 and 24 CFR part 964 for RMC management of a development.
The management assessment of an RMC will necessarily differ from
that of a PHA. Because an RMC enters into a contract with a PHA to
perform specific management functions on a development-by-development
basis, and because the scope of the management that is undertaken
varies, not every indicator that applies to a PHA would be applicable
to each RMC. An additional significant feature of RMC management is
that 24 CFR 964.225(d), entitled, Management contract, and 24 CFR
964.225(h), entitled, Prohibited activities, provide that a PHA may
enter into a management contract with a resident management
corporation, but a PHA may not contract for assumption by the resident
management corporation of the PHA's underlying responsibilities to the
Department under the ACC.
For this reason, the limited management responsibility of RMCs in
terms of both: (1) The areas in which they perform management
functions, and (2) the fact that the PHA remains ultimately responsible
to HUD under the ACC, this proposed rule would implement the management
assessment of RMCs as follows: Sec. 901.100, entitled, ``Data
collection,'' would be amended to provide that when a PHA submits its
PHMAP certification, it must identify developments managed by an RMC
and the management functions undertaken by the RMC at those
developments. The PHA would be responsible for obtaining from the RMC
and submitting to HUD, along with its own certification, the PHMAP
certification for the management functions undertaken by the RMC. For
example, if an RMC were responsible for rent collection in a particular
development, the PHA would be required to identify in its certification
the development and management function performed by the RMC, and
obtain from the RMC a certification of the percent of rents
uncollected, which would be submitted to HUD along with the PHA's
certification. Similarly, for those management functions undertaken by
an RMC for which no certification is necessary (i.e., the data is
already available to HUD, such as the indicator for modernization), the
PHA would still be required to identify in its certification form this
RMC-managed function and the development involved. The applicable
indicators for the RMC would be scored by the Department, and the
resulting grades would be transmitted to the PHA as a part of the
State/Area Office notification. The PHA would be required to forward
promptly the RMC's score.
Section 901.105 of the rule, entitled ``Computing assessment
score,'' requires no amendment to provide for the assessment of an
RMC's management. Those indicators that would apply to an RMC, based on
the management functions assumed by the RMC, would be graded just as
they would for a PHA. However, because of the limited scope of
management involved, an RMC would not receive an overall designation of
high performer, standard, or troubled, but only a grade on each
applicable indicator. In addition, because the PHA and not the RMC is
ultimately responsible to the Department under the ACC, the PHA's score
will be based on all of the developments covered by the ACC, including
those with management functions assumed by an RMC. RMC-managed
developments would, thus, be assessed to measure the RMC's performance
on an indicator-by-indicator basis, and as a part of the PHA's overall
performance. As discussed above, this result is necessary because of
the limited nature of an RMC's management functions and the regulatory
and contractual relationships among HUD, PHAs and RMCs. A new paragraph
(c) is added to Sec. 901.100, Data collection, to provide for the
assessment of RMCs.
To apprise an RMC of its indicator grades, Sec. 901.120 would be
amended to provide that the State/Area Office notification to the PHA
would include the grades of the RMC, if any, and that the PHA must
immediately notify the RMC, in writing, of its grades.
Because an RMC would be assessed on an indicator-by-indicator
basis, and would not receive an overall designation such as troubled,
most of the provisions of section 6(j)(2) of the 1937 Act could not
apply to RMCs, since most of those provisions (the establishment of
procedures for designating troubled PHAs; appeals of designation as a
troubled agency;
[[Page 20361]]
agreements between HUD and troubled PHAs; and, new provisions added by
HCDA 1992 section 113(a) that require independent assessments of PHAs
that are designated troubled) are triggered by a designation of
troubled.
One provision of section 6(j)(2) that is not dependent upon a
designation of troubled and that may appropriately be applied to RMCs
pertains to the commendation of exemplary PHAs. Even though RMCs would
not receive an overall designation of high-performer, standard, or
troubled, Sec. 901.130, Incentives, would be amended to permit an RMC
that scored a grade of A on each of its indicators to receive a
Certificate of Commendation from the Department as well as special
public recognition.
With respect to making the section 6(j)(2) provision for agreements
between HUD and troubled PHAs applicable to RMCs, since an RMC would
not be designated troubled, a memorandum of agreement under
Sec. 901.140 would not be applicable. HUD has determined, however, that
it would be appropriate to provide guidance for the improvement of an
RMC's management functions, and that the proper tool under PHMAP for
this purpose would be an improvement plan under Sec. 901.145. An
improvement plan is negotiated to improve performance under those
individual indicators that are the relevant measures of management
performance for an RMC. Section 901.145 would be amended to permit the
negotiation of an improvement plan that would include the RMC, the PHA,
and the Department.
Application of PHMAP to Alternative Management Entities
In addition to extending coverage to RMCs, this proposed rule would
also extend PHMAP to apply to any other alternative management/PHA
relationship, whether the alternative management entity (AME) is a
receiver, private contractor, private manager, or any other entity that
is under contract with a PHA, or that is otherwise duly appointed or
contracted (for example, by court order or agency action), to manage
all or part of a PHA's operations. It is just as necessary to assess
the management performance of AMEs as it is to assess PHAs or RMCs, to
follow the expressed policy of the 1937 Act, ``to remedy the unsafe and
unsanitary housing conditions and the acute shortage of decent, safe,
and sanitary dwellings for families of lower income''.
AMEs would be assessed following the procedures used for PHAs or
RMCs, depending upon the extent of the management responsibilities
assumed. An AME that assumes all, or substantially all, of a PHA's
management responsibilities (for example, under court order, or
following a substantial default and pursuant to an award under a
competitive proposal) would also assume the PHA's PHMAP
responsibilities and would be assessed accordingly. An AME that was
contracted to perform a limited number of management functions would be
assessed following the procedure used for RMCs.
Although the contractual relationship under the ACC is between the
PHA and the Department, there may also be a contractual relationship
between the AME and the PHA, or HUD and the AME. To ensure quality
management in such contractual relationships, minimum performance
criteria that relate to the PHMAP indicators, as applicable, should be
included in the contract. Failure to meet the performance criteria
would be a basis for termination of the contract. The provisions that
explicitly address AMEs and establish their treatment under PHMAP as
following the procedures for either PHAs or RMCs are found at
Secs. 901.1 and 901.5.
Definitions--Sec. 901.5
This portion of the regulation is revised to include new
definitions and revised definitions as a result of the proposed
revisions to the indicators. Definitions that no longer apply have been
eliminated. Some definitions have been expanded to include instructions
for calculation.
Indicators--Secs. 901.10-901.40
As indicated in section III, ``Regulatory Reinvention,'' above,
this rule would reduce the number of PHMAP indicators from twelve to
eight. A proposed sample certification for these revised indicators is
included as Appendix 3 of this preamble.
Indicator #1, Vacancy Percentage and Unit Turnaround
The vacancy indicator and the unit turnaround indicator of the
current part 901 have been combined in proposed indicator #1. The
proposed indicator has two components. The first component (with a
weight of x 2) measures the vacancy rate and, if applicable, the
progress a PHA has made in reducing the vacancy rate. The second
component (with a weight of x 1), to be used only when a PHA scores
below a C on the first component, measures turnaround time. The
assumption is that if vacancies are at a C level or above, the PHA does
not have a problem with turning around vacant units.
Because the vacancy rate is a clear manifestation of management
effort and embodies the essence of a PHA's mission, it is weighted more
heavily than the process-oriented unit turnaround component.
The Department is proposing to use a single method to calculate the
actual and adjusted vacancy rate. Instead of taking a ``snapshot''
picture of the vacancy rate at a certain date, or calculating an
average over a thirty day period, the vacancy rate will be calculated
by computing the ratio of vacancy days to unit days available over the
fiscal year. The adjusted vacancy rate is computed the same way, but
with eligible exemptions, such as vacancy days attributable to
modernization. The Department believes this method to be the most
accurate depiction of performance.
If a PHA elects to certify to the reduction of the vacancy rate
over the previous three years, the PHA shall retain justifying
documentation to support its certification for HUD post review.
For the calculation of the adjusted vacancy rate and turn-around
time, the vacancy days for units in the following categories (fully
defined in the rule at Sec. 901.10) shall be exempted:
1. Vacant unit undergoing modernization.
2. Vacant units in an approved demolition or disposition program.
3. Vacant units that are documented to be uninhabitable for reasons
beyond the PHA's control.
4. Vacant units in which resident property has been abandoned, but
only if State law requires the property to be left in the unit for some
period of time, and only for the period stated in the law.
5. Vacant units that have sustained casualty damage, but only until
the insurance claim is adjusted, i.e., funds to repair the unit are
received.
6. Units that are used for non-dwelling purposes, dwelling units
that are occupied by employees of the PHA, and units that are used for
resident services.
7. Vacant units required to remain vacant because of fire/ police
investigations, coroner's seal, or court order.
8. Units kept vacant because of code violations caused for reasons
beyond the control of the PHA, rather than as a result of management
and/or maintenance failures by the PHA.
9. Units vacant for circumstances and actions beyond the PHA's
control.
[[Page 20362]]
Definitions for indicator #1 are as follows:
1. Actual vacancy rate: This is the vacancy rate calculated without
any adjustments. This is calculated by dividing the total number of
vacancy days by the total number of unit days available for occupancy.
The maximum number of vacancy days for any unit is the number of days
in the year, regardless of the total amount of time the unit has been
vacant. An example of this calculation for a hypothetical PHA with 100
units available for occupancy follows. Unit days are calculated by
taking the total number of units available for occupancy and
multiplying by the number of days in the year.
Unit days available: 100 units x 365 days per year = 36,500 actual days
available for occupancy
Vacancy days are calculated by adding the total number of days
vacant from all units that were vacant for any reason during the PHA's
fiscal year. For example:
------------------------------------------------------------------------
Days
vacant
Unit and reason for vacancy during
FY
------------------------------------------------------------------------
6 Move-out................................................... 21
10* Down for modernization................................... 120
12* Down for modernization................................... 140
15* Down for modernization................................... 194
10 Lease up after modernization............................. 10
12 Lease up after modernization............................. 10
15 Lease up after modernization............................. 21
32 Transfer................................................. 15
81* Fire..................................................... 35
81 Lease after insurance adjustment......................... 23
96 Move-out................................................. 15
41 Move-out................................................. 28
39 Move-out................................................. 40
57 Move-out................................................. 18
61* Down for modernization................................... 230
22* Down for modernization................................... 90
61 Lease up after modernization............................. 10
22 Lease up after modernization............................. 3
---------
Total Actual Vacancy Days................................. 1,023
------------------------------------------------------------------------
The actual vacancy rate for the year is:
[GRAPHIC] [TIFF OMITTED] TP06MY96.000
The asterisks following the unit numbers denote vacancy days that
can be exempted in computing the adjusted vacancy rate.
2. Adjusted vacancy rate: This is the vacancy rate calculated after
excluding the vacancy days that are exempted for any of the eligible
reasons included here. The adjusted vacancy rate for the hypothetical
100 unit PHA would be calculated as follows:
------------------------------------------------------------------------
Adjusted
days
Unit and reason for vacancy vacant
during
FY
------------------------------------------------------------------------
6 Move-out.................................................. 21
10 Lease up after modernization.............................. 10
12 Lease up after modernization.............................. 10
15 Lease up after modernization.............................. 21
32 Transfer.................................................. 15
81 Lease after insurance adjustment.......................... 23
96 Move-out.................................................. 15
41 Move-out.................................................. 28
39 Move-out.................................................. 40
57 Move-out.................................................. 18
61 Lease up after modernization.............................. 10
22 Lease up after modernization.............................. 3
---------
Total Vacancy Days, as Adjusted........................... 214
------------------------------------------------------------------------
The PHA was permitted to exempt 809 of the vacancy days for
eligible reasons. To calculate the adjusted rate, the 809 days are
removed from the days vacant (numerator). The adjusted vacancy rate for
the year is:
[GRAPHIC] [TIFF OMITTED] TP06MY96.001
3. Reduced actual vacancy rate in the previous three years: this is
a comparison of the vacancy rate in the PHMAP assessment year
(immediate past fiscal year) to the vacancy rate during the first year
of the previous three year period. In the case of the hypothetical PHA
discussed earlier, the assumption is made that the actual vacancy rate
during the first year of the three year period was 40 percentage
points, compared to the assessment year with a 22 percentage point
vacancy rate. This is a vacancy rate reduction of 18 percentage points,
calculated as follows:
Percentage points vacancy rate in the earlier year, minus.......... 40
Percentage points vacancy rate in the assessment year, equals...... 22
----
Percentage points reduction in the vacancy rate.................... 18
4. Average unit turnaround time: the annual average of the total
number of turnaround days between the move-out date and the date a new
lease takes effect. Each time an individual unit is re-occupied (turned
around) during the fiscal year, the turnaround days for that unit shall
be counted in the turnaround time. Unlike vacancy days, which cannot
exceed the number of days in the fiscal year, turnaround days include
all the days between the last move-out and the date a new lease takes
effect, including any turnaround days in prior fiscal years. Only units
that are re-occupied during the fiscal year are included in the
turnaround time calculation. An example of this calculation is as
follows for a hypothetical PHA that had 15 units turned over in the
assessment year:
------------------------------------------------------------------------
Turnaround
Unit days Days exempted Net days
------------------------------------------------------------------------
12 100 80 (modernization 20
days).
14 10 ......do.............. 10
31 12 ......do.............. 12
36 96 86 (modernization 10
days).
18 413 ......do.............. 413
6 4 ......do.............. 4
41 13 ......do.............. 13
59 74 60 (modernization 14
days).
[[Page 20363]]
32 2 ......do.............. 2
96 14 ......do.............. 14
2 60 40 (fire damaged unit) 20
4 21 ......do.............. 21
6 8 ......do.............. 8
13 29 ......do.............. 29
22 19 ......do.............. 19
----------------------
Total Turnaround Days During the Fiscal Year 590
(FY)
------------------------------------------------------------------------
Annual average vacant unit turnaround time for the FY:
[GRAPHIC] [TIFF OMITTED] TP06MY96.002
5. Approved, funded, on-schedule annual modernization program:
Includes any modernization program, funded under the Comprehensive
Grant Program (CGP), the Comprehensive Improvement Assistance Program
(CIAP), Vacancy Reduction Program (VRP), or any other source, if a PHA
is in conformance with its current implementation schedule as approved
by the PHA Board of Commissioners and/or HUD.
6. Turnaround days: The days between the last move-out and the date
a new lease takes effect, including any turnaround days in prior fiscal
years.
7. Vacancy day: A day when a unit is not under lease by an eligible
low-income resident, unless the vacancy day is exempted for an eligible
reason.
8. Vacant unit: Is a dwelling unit that is not under lease to an
eligible family. Units under lease for non-dwelling uses should not be
included in the calculation of this indicator.
9. Available unit: A dwelling unit (occupied or vacant) under the
PHA's ACC.
This proposed combined indicator has a weight of #2.
Indicator #2, Modernization
(This indicator is automatically excluded if a PHA has no
modernization program.)
This proposed indicator was changed very little with the original
five components remaining virtually the same. However, the weight
values for component #1, expenditure of funds, and component #2,
obligation of funds, have been changed so that greater emphasis is
given to obligation of funds in relation to expenditure of funds. This
is exactly the opposite of the current interim rule, where the emphasis
is placed on expenditure of funds. This change recognizes the
importance of getting projects under contract, while at the same time
acknowledging that often it is necessary to hold back payments to
contractors due to disputes over the quality of the work or materials.
A new feature in component #1, expenditure of funds, and component
#2, fund obligation, would require, for grade A, PHAs that are not on
schedule to have self-executed a time extension within 30 calendar days
after the expenditure or obligation deadline with the extension to be
based on reasons outside of their control.
For component #3, contract administration, and component #4,
quality of the physical work, the number of possible grades has been
reduced from six to three, the three being A, C and F. ``Significant
findings'' for these two components will be redefined prior to the
effective date of any changes to the PHMAP. Component #5, budget
controls, has been changed to reflect the final CGP rule which permits
agencies to move work items between approved CGP annual statements and
the latest approved five-year action plan.
This proposed indicator has a weight of x1.
Indicator #3, Rents Uncollected
The method for calculating the amount of rents uncollected for this
proposed indicator has been simplified to a basic ratio comparing the
total amount of rents billed during the assessment year, to the amount
of rent collected during the assessment year. In the current interim
PHMAP rule, PHAs are instructed to include the accounts receivable owed
at the beginning of the assessment year and to deduct the total amount
of accounts receivable that have been written off during the year for
residents no longer in possession. Both of these adjustments have been
eliminated in the proposed indicator as not being directly relevant to
rent billed and collected in the current assessment period.
The percentage of rents uncollected refers to the proportion of
current dwelling rent that was billed during the assessment year, but
not collected during the assessment year. The calculation is made as of
the close of business on the last business day of the fiscal year.
``Current dwelling rent'' excludes retroactive rent charges (including
those identified through the Tenant Integrity Program), maintenance
charges, excess utility charges, late charges, and any other charges
not specifically identified as dwelling rent.
This proposed indicator has a weight of x1.5.
Indicator #4, Work Orders
The current indicator #4, energy consumption, has been combined
with the overall measurement of financial performance, which is now
indicator #6.
The new proposed indicator #4, work orders, continues to measure
PHA performance in the handling of both emergency and non-emergency
work orders, but under this proposed rule, the measurement will be in
two components instead of one. The proposed indicator grade will be
based on the average number of days it takes for a work order to be
completed rather than the percentage of work orders outstanding at the
end of a PHA's fiscal year.
The Department believes that assessing the average amount of time
it takes to complete work orders is more equitable. Consider the
following scenario:
Two PHAs have a fiscal year-end date of June 30, 1995. The first
PHA has five work orders received on June 29, 1995, and did not
complete them until July 2, 1995. The second PHA has five work orders
received on January 1, 1995, and completed them on June 29, 1995. If
both PHAs received the same amount of work orders, the second PHA would
receive a higher grade under the current method of grading this
indicator, even though it took the second PHA much longer to complete
the work orders.
The first component measures emergency work order performance; the
second component measures the average amount of time it takes to
complete non-emergency work orders.
The proposed indicator includes more definitions and makes clear
the Department's intention that all work orders should be tracked,
except those exempted for modernization, issued to prepare a vacant
unit for re-rental, and issued for the performance of cyclical
maintenance. Implicit in this indicator is the adequacy of the PHA's
work order system in terms of how a PHA accounts for and controls its
work orders, and its timeliness in preparing/issuing work orders. As
such, the adequacy of a PHA's work order system will be part of the
confirmatory review of this indicator.
If a PHA elects to certify to the reduction in time it takes to
complete work orders, the PHA shall retain justifying documentation to
support its certification for HUD post review.
This proposed indicator has a weight of x1.5.
Indicator #5, Inspection of Units and Systems
This proposed indicator has undergone significant changes. Instead
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of having four components, it now has only two, each with a weight of
x1. Component #1 examines the percentage of occupied units, out of all
of a PHA's units (except those permitted to be exempted), that the PHA
inspects on an annual basis in order to determine short-term
maintenance needs (for which work orders are issued) and long-term
modernization needs (which are referred to and included in the PHA's
comprehensive plan for modernization).
Component #2 examines the effectiveness of a PHA's annual
inspection of its major systems, as systems are defined herein, and the
maintenance of those systems either as part of the inspection process,
or through the issuance of a work order; or, if a work order is not
issued, by inclusion in the PHA's comprehensive plan for modernization.
While the current indicator assesses the repairs to units and systems,
the new proposed indicator makes it clear that work orders that are
generated as of result of components #1 and #2 are measured primarily
under indicator #4, outstanding work orders, unless the repair is
completed during the inspection or deferred to the modernization
program.
This proposed indicator also makes it clear that PHAs are expected
to inspect to the standard specified in the local housing/occupancy
code, as long as that code is at least equivalent to or exceeds Section
8 Housing Quality Standards (HQS). Implicit in this indicator is the
adequacy of the PHA's inspection program in terms of the quality of a
PHA's inspections, and how a PHA tracks both inspections and needed
repairs. As such, the adequacy of a PHA's inspection program will be
part of the confirmatory review of this indicator.
The Department has more clearly defined the units, both vacant and
occupied, which may be exempted from an annual inspection.
Units in the following categories (fully defined in the rule at
Sec. 901.30) are exempted and not included in the calculation of the
total number of units, and the number and percentage of units
inspected. Systems that are a part of individual dwelling units that
are exempted, or in part of buildings where all of the dwelling units
in the building are exempted, are also exempted from the calculation of
proposed indicator #5.
1. Occupied units where the PHA has made two documented attempts to
inspect.
2. Vacant units undergoing modernization.
3. Vacant units in an approved demolition or disposition program.
4. Vacant units that are documented to be uninhabitable.
5. Vacant units vacant for the full immediate past fiscal year that
have been exempted under indicator #1 for any of the reasons for which
exemptions are permitted under that indicator (except those units that
are used for non-dwelling purposes or that are occupied by employees of
the PHA and units that are used for resident services).
This proposed indicator has a weight of x1.
Indicator #6, Financial Management
This proposed indicator combines, in two components, indicator #4,
energy consumption; and indicator #9, operating reserves. The first
component assesses the amount of cash reserves in relation to total
actual routine expenses. The second component is required only if a PHA
scores below a grade C on component #1. The Department is offering two
options for component #2. Option A compares energy and utility expenses
to the average of those expenses computed on a three year rolling base;
and option B measures whether or not a PHA has conducted an energy
audit and implemented the improvements recommended as a result of the
energy audit. PHAs with tenant-paid utilities in all their units will
not be assessed on energy/utility consumption even if they score below
a grade C in cash reserves. The rationale for measuring energy
consumption only if a PHA scores below a grade C in the first component
is that if a PHA is in good financial health, the Department can
reasonably conclude that energy/utility usage is being well-managed.
A PHA that has cash reserves equal to or greater than 10% of total
actual routine expenses will be assessed only on the cash reserves
component. This proposed component has a weight of x2.
The proposed energy/utility component, option A, is substantially
different from the current energy indicator in that it includes water
and sewage usage, and the adjustment for the heating degree day (HDD)
factor has been eliminated. The elimination of the HDD factor from the
calculation of this component is in accordance with Notice PIH 94-81,
dated November 18, 1994. On October 13, 1994, a final rule was
published in the Federal Register that eliminated the application of
the HDD factor for utility consumption. This rule will first affect
PHAs with fiscal year ending December 31, 1995.
As stated previously, option B for the energy/utility component
assesses the conduct of an energy audit and the implementation of
recommendations that resulted from the energy audit. The Department is
particularly interested in receiving comments regarding the energy/
utility component to determine what the national preference is for this
component. PHAs are asked to indicate whether they prefer option A;
option B; or the choice of being able to use either option for their
PHMAP certification and assessment.
This proposed component has a weight of x1.
A sample worksheet for computing component #1 is included as
Appendix 1 of this preamble; and two sample worksheets for computing
component #2 are included as Appendix 2 of this preamble.
This proposed indicator has a weight of x1.
Indicator #7, Resident Involvement
PHAs with 100 units or less shall not be assessed under this
indicator. This indicator reflects the Department's new emphasis on
Section 3 programs to encourage resident employment. As in the current
resident initiatives indicator, this indicator assesses a PHA's efforts
to involve residents to improve the community in which they live. If
the PHA is participating in any HUD grants, such as the Tenant
Opportunity Program, Youth Apprenticeship Program, etc., this component
assesses a PHA's success in implementing these programs. This proposed
indicator has a weight of x1.
The Department believes that consumer satisfaction is critical in
public housing, and is in the process of conducting a national study on
the issue. The Department is also seriously considering including a
component under this indicator that assesses consumer satisfaction.
Therefore, HUD is especially interested in receiving comments regarding
whether or not PHAs should be required to conduct resident surveys on a
periodic basis, and whether such a survey should be standardized.
Indicator #8, Security
It was HUD's intention that PHAs with 100 units or less not be
assessed under this indicator, and this is stated in the text of the
proposed rule, but HUD is specifically soliciting comments on whether
this indicator should apply to such PHAs. Recognizing that many public
housing communities are under siege by gangs, violent criminals and
drug dealers who threaten the safety and welfare of decent, responsible
residents, President Clinton has announced a ``One Strike'' policy in
which people in public housing who engage in drug and other criminal
activity will be barred from admittance to public housing or
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evicted, as applicable. This policy is supported by a law recently
passed by Congress entitled the Housing Opportunity Program Extension
Act of 1996 (the Extension Act) (Pub. L. 104-120, approved March 28,
1996). The Extension Act expands the statutory authority of PHAs to
keep persons engaged in illegal activities out of public housing. In
furtherance of President Clinton's policy and the Extension Act, the
Department is adding a new indicator that assesses security. The
security indicator will consider a PHA's ability to perform such
activities as: Track crime-related problems in their developments; take
action with local police authorities to improve law enforcement, lease
enforcement and crime prevention; adopt and implement tough applicant
screening and resident eviction policies and procedures; and meet goals
under any HUD-funded drug prevention or crime reduction program.
Although applicant screening and resident eviction policies and
procedures must be tough, the proposed rule would require such actions
to be appropriately taken. By using the term ``appropriately'' in the
text of the rule, HUD intends to preserve PHAs' ability to act
consistently with the provisions of 24 CFR 966.4(5)(i), Eviction for
criminal activity--(i) PHA discretion to consider circumstances. This
proposed indicator has a weight of x1.
With respect to this proposed security indicator, HUD is
particularly interested in comments regarding the desirability of
holding PHAs responsible for demonstrating systems to take action with
local police authorities to improve law enforcement, lease enforcement
and crime prevention. HUD believes that such cooperative action is
critical to residents' well-being, but some have expressed concern
whether PHAs should be held accountable for obtaining cooperation from
another party (the police). In addition, HUD specifically invites
comments regarding the reasonability of the proposed component which
rates PHAs based on the percentage of goals they have met in crime
reduction-related programs.
Data Collection--Sec. 901.100
The length of time a PHA has to submit its form HUD-50072, PHMAP
Certification, to the State/Area Office has been reduced from 90 days
to 45 days after the end of a PHA's fiscal year. This change has been
made because many comments have stated that the overall PHMAP process
takes too long. Under the current program, it could be a minimum of
nine months before a PHA knows its final PHMAP score after going
through the appeal process. The 45 day period is consistent with other
reporting due date requirements, such as the submission of year-end
financial statements and the submission of the CGP annual report. A PHA
that does not submit its year-end reports in a timely manner may
receive a grade of F for the applicable indicators. PHAs will no longer
be allowed to submit past due reports in support of an appeal and
expect the appeal to be granted. State/Area Offices will be required by
the Department to complete the PHMAP assessments within an additional
45 days, thereby reducing the overall time for the completion of a
PHMAP assessment to 90 days after the end of a PHA's fiscal year.
The reporting requirements for PHAs where management functions have
been assumed by an RMC or other alternative management entity have been
included in the regulation. A PHA's certification will be required to
identify the development and management functions assumed by the RMC or
AME, and the PHA will be required to obtain a certified questionnaire
from the RMC or AME as to the management functions undertaken by the
RMC or AME. The RMC's or AME's certification will be required to be
approved by its executive director or chief executive officer of
whatever title, and the PHA will be required to submit the RMC's or
AME's certified questionnaire along with its own certification.
Any alternative management/PHA relationship is assessed under the
PHMAP, as discussed above in this preamble, whether the alternative
management is an RMC, a receiver, private contractor, private manager,
or any other entity that is under contract with a PHA to manage all or
part of its operations.
Guidance to PHAs regarding how to calculate each applicable
indicator and component will be issued in a handbook and/or guidebook.
Such issuances will coincide with the effective date of any changes to
the PHMAP.
Computing Assessment Score--Sec. 901.105
Indicator and Component Weights
The weights of some of the indicators have been reduced to simplify
the computation of a PHA's assessment score. The total weights for each
indicator are based on a ten-point scale, and the highest score a PHA
can receive is 100. Indicators receive a higher weight primarily if
they reflect a management aspect closely related to the key areas of
the condition of PHA stock and delivery of services to PHA residents.
On this basis, two indicators are given a weight of two: Vacancies and
rents uncollected. Two indicators are given a weight of one and a half:
Work orders and resident initiatives. The remaining indicators are
given a weight of one: Modernization, inspection of units and systems,
and financial management.
The weight of each indicator and component (shown in brackets []
for components only) is as follows:
Indicator #1, vacancy percentage and unit turnaround.................x2
Component #1, vacancy percentage and progress in reducing
vacancies..........................................................[x2]
Component #2, unit turnaround time...............................[x1]
Indicator #2, modernization..........................................x1
Component #1, unexpended funds over three Federal fiscal years
(FFYs) old.........................................................[x1]
Component #2, timeliness of fund obligation......................[x2]
Component #3, adequacy of contract administration................[x2]
Component #4, quality of the physical work.......................[x3]
Component #5, adequacy of budget controls........................[x1]
Indicator #3, rents uncollected....................................x1.5
Indicator #4, work orders..........................................x1.5
Component #1, emergency work orders completed in 24 hours or
less...............................................................[x1]
Component #2, average number of days for non-emergency work
orders to be completed.............................................[x2]
Indicator #5, annual inspection of units and systems.................x1
Component #1, annual inspection of units.........................[x1]
Component #2, annual inspection of systems.......................[x1]
Indicator #6, financial management...................................x1
Component #1, cash reserves......................................[x2]
Component #2, annual energy/utility consumption..................[x1]
Indicator #7, resident involvement...................................x1
Component #1, resident involvement...............................[x1]
Indicator #8, security...............................................x1
Physical Condition and Neighborhood Environment
The overall PHMAP score of a PHA will be adjusted by adding
weighted points that reflect the differences in the difficulty of
managing developments that result from the physical condition and/or
the neighborhood environment of a PHA's developments.
Section 502.(j)(1)(I) requires that (i) the Secretary shall
administer the system of evaluating public housing agencies flexibly to
ensure that such agencies are not penalized as a result of
circumstances beyond their control; and (ii) reflect in the weights
assigned to the various indicators the differences in the difficulty of
managing individual projects that result from their physical
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condition and neighborhood environment.
The Department believes that the current PHMAP regulation contains
substantial provisions to ensure that PHAs are not penalized for
conditions beyond their control:
1. A PHA may request a modification of any indicator and/or
component to compensate for conditions beyond its control.
2. A PHA may request the exclusion of an indicator and/or component
for the same reason.
3. Without requesting a modification, the current and proposed
PHMAP regulation allows PHAs to modify the scoring calculations for
certain indicators by exempting certain units.
4. There is a two-stage appeal process available if the PHA fails
to find relief under paragraphs one, two, and three, above.
In view of these already substantial considerations which protect
PHAs from being penalized for circumstances beyond their control, the
Department is proposing to respond to item (ii), above (requiring the
Department to reflect in the weights assigned to the various indicators
the differences in the difficulty of managing individual developments
that result from their physical condition and/or their neighborhood
environment), in a way that will fully comply with the statutory
language, but will not make PHMAP substantially more complicated, nor
place inordinate administrative burdens on PHAs and HUD staff.
The Department is proposing that the legislative provision
(requiring the Department to reflect in the weights assigned to the
various indicators the differences in the difficulty of managing
individual developments that result from their physical condition and/
or their neighborhood environment) apply to the following three
indicators only.
1. Indicator #1, vacancy percentage and unit turnaround;
2. Indicator #4, work orders; and
3. Indicator #5, annual inspection and condition of units and
systems.
The definitions of physical condition and neighborhood environment
are kept as simple as possible and meant to make it relatively easy for
PHAs to document.
1. Physical condition: Refers to units located in developments over
ten years old that require major capital investment in order to meet
minimum HQS standards or local codes, whichever is applicable.
2. Neighborhood environment: Refers to units located within
developments where the immediate surrounding neighborhood (that is a
majority of the census tracts on all sides of the development) has at
least 51% of families with incomes below the poverty rate as documented
by the latest census data.
Any PHA with 5% or more of its units subject to either or both of
the above conditions shall, if they so choose, be issued a weighted
PHMAP score, based solely upon the certification of the PHA, in
addition to the regular PHMAP score. The additional weight shall be
calculated as follows:
Percent of Units Subject to Physical Condition and/or
Neighborhood Environment: Extra
points
At least 5% but less than 10%............................. 0.5
At least 10% but less than 20%............................ .6
At least 20% but less than 30%............................ .7
At least 30% but less than 40%............................ .8
At least 40% but less than 50%............................ .9
At least 50%.............................................. 1.0
These extra points will be added to the score (grade) of the
indicator(s) to which these conditions may apply. A PHA is required to
certify on form HUD-50072, PHMAP Certification, the extent to which the
conditions apply, and to which of the indicators the extra scoring
points should be added. For example, a PHA certifying that (after
removing from consideration all units previously exempted) 15% of its
units are subject to the physical conditions and/or neighborhood
environment as defined above, would receive an additional .6 of a point
for the score for indicator #1. If a PHA receives an unweighted score
of D (5 points) for this indicator, the weighted score would be 5.6
points. Indicator #1 has an overall weight of x2, therefore, the
weighted score for the indicator would be 11.2, as opposed to the
unweighted score of 10.
Developments that have received comprehensive modernization within
the past ten years are not eligible to receive additional weight for
the physical condition factor. A PHA that receives a grade of A under
indicators #4 and #5 (without additional points) may not claim the
additional weight for indicator #1 since the physical condition of its
developments is not applicable. None of the weighted indicators may
have a score that is more than its total weighted points, including the
additional point, or fraction thereof, awarded for weighting.
PHAs would be expected to maintain supporting documentation to show
how they arrived at the number and percentage of units out of their
total inventory that are subject to additional weighting. If the basis
were neighborhood environment, the PHA would have on file the
appropriate maps showing the census tracts surrounding the
development(s) in question with supporting census data showing the
level of poverty. Units that fall into this category but which have
already been removed from consideration for other reasons (permitted
exemptions and modifications and/or exclusions) shall not be counted in
this calculation. For example, a unit that has been removed from the
adjusted vacancy calculation because it is undergoing modernization
shall not also be counted as a unit subject to this provision. For the
physical condition factor, a PHA would have to maintain documentation
showing the age and condition of the units and the record of capital
improvements, indicating that these particular units have not received
comprehensive modernization. They would also have to document that in
all cases, units that had been exempted for other reasons were not
included in the calculation.
PHA Score and Status--Sec. 901.115
This section has been revised to state that a PHA shall not be
designated as a high performer if it scores below a grade of C for any
indicator.
A new provision, recommended by the Office of Management and Budget
in the course of the review of this proposed rule in accordance with
Executive Order 12866, would require each PHA to post a notice of its
PHMAP score and status in appropriate conspicuous and accessible
locations in its offices and in each of its developments within two
weeks of receipt of the score and status. In addition, HUD would
publish every PHA's score and status in the Federal Register.
State/Area Office Functions--Sec. 901.120
Section 901.125, Regional Administrator functions, has been
eliminated from this proposed rule as a result of the reorganization of
the Department and the redelegation of authority to State/Area Offices.
Applicable functions have been included in this portion of the
regulation.
This section will require a State/Area Office to notify a PHA of
its PHMAP score and the grade of the RMC or AME (if any) assuming
management functions at any of the PHA's developments, and will require
a PHA to notify in writing, immediately upon receipt of the State/Area
Office notification, the RMC or AME (if any) of the RMC/AME's grades.
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PHA Right of Appeal--Sec. 901.125
Former Regional Administrator functions that are applicable have
been included in this portion of the regulation.
Incentives--Sec. 901.130
All high- and standard-performing PHAs have been afforded
substantial relief by the Department and this section of the regulation
has been revised to reflect the available relief. This section also
includes recognition of RMCs that receive a grade of A on each of the
indicators for which they are assessed.
Memorandum of Agreement--Sec. 901.140
The scope of the Memorandum of Agreement (MOA) may vary depending
upon the extent of the problems present in the PHA, and now provides
for the inclusion of other relevant areas identified as problematic,
i.e., areas other than deficient PHMAP indicators. The Department
believes that the use of one document to track troubled and mod-
troubled PHA progress is in the best interest of PHAs and the
Department.
Upon designation of a large PHA (1250 or more units under
management) as troubled, the State/Area Office shall make a referral to
HUD Headquarters for appropriate recovery intervention and the
execution of an MOA by the Assistant Secretary for Public and Indian
Housing.
Improvement Plan--Sec. 901.145
The option of requiring RMCs or AMEs to develop an improvement plan
is included in the regulation. As with a PHA, if an RMC or AME receives
a D or E in any indicator, the State/Area Office may require an RMC or
AME to develop an improvement plan. If an RMC or AME receives an F in
any indicator, the State/Area Office shall require an RMC or AME to
develop an improvement plan.
Resident Participation in Competitive Proposals and Resident Petitions,
Secs. 901.220 and 901.225
The statutory authority for the PHMAP is section 6(j) of the 1937
Act. Section 113 of HCDA 1992 amends section 6(j)(3)(A) of the 1937 Act
(42 U.S.C. 1437d(j)(3)(A)), which deals with the actions that may be
taken upon the occurrence of a substantial default by a PHA.
Section 113(b)(1) amends 1937 Act section 6(j)(3)(A)(i), which
permits the Department to solicit competitive proposals from other PHAs
and private housing management agents (which may be selected by
existing residents) to manage the housing administered by a PHA in
substantial default, by allowing residents the opportunity to
participate in the selection process through administrative procedures
established by the Department. These administrative procedures are
being proposed in this rule.
This proposed rule would provide in Sec. 901.220 that when a
competitive proposal to manage the housing of a PHA in substantial
default is solicited in a Request for Proposals (RFP), the PHA would be
required to post a notice and a copy of the RFP on the premises of each
housing development subject to new management under the RFP for the
purposes of notifying affected residents. Residents would be required
to notify HUD by the RFP's application due date of their interest in
participating in the selection process. In order to participate, the
total number of residents that notify HUD must equal at least five
percent of the PHA's residents, or the notification of interest must be
from an organization or organizations of residents whose membership
must equal at least five percent of the PHA's residents. Because of the
urgency that is appropriately present when the extraordinary measure of
selecting new management for a PHA in substantial default must be
taken, the Department has determined that this minimal five percent
showing of resident concern is necessary to justify the additional
selection procedures required by resident participation.
If the required number of interested residents notify HUD, a
minimum of one resident may be invited to serve as an advisory member
on the evaluation panel that will review the applications in accordance
with applicable procurement procedures. Resident advisory member(s) are
subject to all applicable confidentiality and disclosure restrictions.
Section 113(b)(5) allows the residents of a PHA designated as
troubled to petition the Department to take any of the remedial actions
listed under subparagraph 6(j)(3)(A) of the 1937 Act. The Department is
required to respond to such petitions in a timely manner with a written
description of the actions, if any, the Department plans to take, and,
where applicable, explain why such actions differ from the course
proposed by the residents. As with the procedure for permitting
residents to participate in the selection of management agents, the
proposed rule would require, at Sec. 901.225, that the petition has the
support of at least five percent of the troubled PHA's residents.
Substantial Default and Intervention Procedures, Secs. 901.200--901.215
This proposed rule adds language that would require the Department
to take action regarding troubled PHAs or AMEs that have not improved
their management performance over a specified period of time. The
current PHMAP regulation has a wide variety of options for dealing with
troubled PHAs subsequent to a finding of substantial default. What the
current regulation does not have is a built-in time frame that would
require the Department to make a finding of substantial breach or
default, or request a court-ordered receivership. Therefore, under
Sec. 901.200(c), the Department will be required to declare a troubled
PHA or AME in substantial breach or default if a PHA does not show
significant improvement (10 point increase) in its PHMAP score within
one year. A PHA or AME will be notified of such action in accordance
with Sec. 901.205(c).
A PHA or AME may waive, in writing, receipt of explicit notice from
HUD as to a finding of substantial default, and voluntarily consent to
a determination of substantial default. The PHA or AME would concur on
the existence of substantial default conditions which can be remedied
by technical assistance. At that time, the Department would immediately
proceed with interventions as provided in Sec. 901.210, including the
provision of technical assistance necessary to address identified
deficiencies. In such a case, the PHA or AME shall provide the
Department with written assurances that all deficiencies will be
addressed by the PHA or AME.
The affect of this proposal would be that chronically troubled PHAs
or AMEs would be subject to immediate intervention by the Department.
Section 901.210(a) of the current PHMAP regulation gives a PHA an
opportunity to initiate corrective action to resolve identified
deficiencies. Section 901.210(c) of the current PHMAP rule requires a
PHA to demonstrate (in no more than 30 days) that the Department's
finding of substantial breach or default is incorrect. The burden of
proof is placed upon the PHA. The rationale is that troubled PHAs have
already had more than adequate time to implement corrective action, or
will have at least one year from the time of initial troubled
designation.
This approach essentially uses the regulation that has been in
place for years. The only difference is that the Department would be
required to impose the existing standard. The only new performance
standard rests upon the Department, not the PHA or AME.
[[Page 20368]]
A new Sec. 901.235, Technical assistance, has been added to address
situations where a substantial default is likely to occur if
deficiencies are not addressed, and to ensure that a PHA or AME that
has just been removed from troubled status will not become troubled
again within a two year period.
Request for Comments
The Department recognizes that PHMAP scores should not be
interpreted as the sole determinant of housing agency performance.
While PHMAP is an important yardstick to measure PHA performance, it
should not be the sole driving force behind PHA actions. Sometimes a
PHA should do the ``right'' thing and receive a lower PHMAP score. For
example, a PHA decides to demolish nonviable units rather than to
program these nonviable units for modernization in quest of a better
PHMAP score. When a PHA makes the ``right'' decision, it should be
commended, not punished. Therefore, the Department is particularly
interested in receiving comments concerning ways in which PHAs can
receive positive recognition within the context of this regulation for
making the right decision.
Appendix 1.--Sample Worksheet--Indicator #6, Cash And Operating Expenses
[Analysis of available cash, examination of operating expenses/available
cash]
------------------------------------------------------------------------
------------------------------------------------------------------------
PHA Name: FYE
To estimate cash available at fiscal year end for routine
operating expenditures.
Current Assets
1. Balance of Cash and Investment Accounts at fiscal
year end. Do not include the balance of cash accounts
that are restricted to a specific purpose and are,
therefore, not available for routine operating
expenditure purposes (e.g., modernization accounts,
security deposit accounts, escrow accounts, homebuyer
reserves, replacement reserves, etc.).
(a) General Fund Account 1111.1....................
(b) Petty Cash, Account 1117.......................
(c) Investments, Account 1162......................
(d) Other (describe)...............................
2. Add Accounts Receivable and Advances that are due
for the period covered and can be collected within the
next 30 days.
(a) Tenants/homebuyers.............................
(b) HUD Contributions receivable for Operating
Subsidy...........................................
(c) Interfund accounts receivable due from other
ACCs..............................................
(d) Other Receivables (describe)...................
3. Total Current Assets (add items 1 and 2)............
Current Liabilities
4. Liabilities payable within 30 days after fiscal
period ends.
(a) Vendors/contractors, Account 2111..............
(b) Payroll deductions and contributions, Account
2117..............................................
(c) Amounts due to HUD for subsidy adjustment,
residual receipts, Account 2118...................
(d) Accrued Expenses (e.g., utilities, payroll,
PILOT)............................................
(c) Interfund accounts payable due to other ACCs...
(d) Other current obligations (describe)...........
5. Total Current Liabilities (Add items 4(a) through
4(d)).................................................
6. Available Cash (Deficiency) (Line 3 Minus Line 5)...
7. Total Routine Expenses (Line 520, form HUD-52599)...
8. Cash Reserves divided by Total Actual Routine
Expenses (Line 6 divided by Line 7)...................
------------------------------------------------------------------------
Appendix 2.--Sample Worksheet--Indicator #6, Energy/Utility Consumption
Option A
[Annual energy/utility consumption, as compared to the average of the
three years' rolling base consumption]
------------------------------------------------------------------------
------------------------------------------------------------------------
PHA: FYE
1. Total energy/utility cost in fiscal year for which
adjustment is requested (form HUD-52722B, line 13,
column 3):............................................ $
2. Costs of estimated energy/utility consumption at
average rate for appropriate PHA fiscal year (form HUD-
52722B, line 17, column 3):........................... $
3. Costs of actual energy/utility consumption divided
by costs of estimated energy/utility consumption (line
1 divided by line 2):................................. $
4. Subtract 1.00 from line 3 and multiply the remainder
by 100 to calculate the percentage of increase or
decrease. For example:................................ %
If line 3 equals .95, then .95 minus 1.00 equals -
.05 x 100 = a 5% decrease; or...................
If line 3 equals 1.15, then 1.15 minus 1.00 equals
.15 x 100 = a 15% increase .....................
------------------------------------------------------------------------
Source: Most recent form HUD-52722B, Adjustment for Utility Consumption
and Rates.
Sample Worksheet--Indicator #6, Energy Consumption Option B
[Energy audit and implementation of recommendations]
------------------------------------------------------------------------
------------------------------------------------------------------------
PHA: FYE
Grade Response
Grade A: The PHA has completed its energy audit and has
implemented all of the recommendations determined to be
cost effective.
Grade C: The PHA has completed its energy audit and is in
the process of implementing all of the recommendations.
Grade F: The PHA has not completed its energy audit, or has
not implemented all of the recommendations.
------------------------------------------------------------------------
Source: PHA's energy audit and/or maintenance plan.
[[Page 20369]]
Appendix 3.--Public Housing Management Assessment Program (PHMAP) Certification
[Instructions: A PHA/RMC/AME's responses to this certification form must be the PHA/RMC/AME's actual data; e.g.,
prior to any adjustments for modifications and/or exclusion requests to the indicators. Round percentages to the
nearest two decimal points.]
PHA/RMC/AME Name:
For FY Ending:
Submission Date:
Indicator 1: Vacancy rate and unit turnaround
Units
Days
Rate
Actual vacancy total.................................................... / / / %
Vacancy exemptions...................................................... / / /
Adjusted vacancy total.................................................. / / / %
Percent reduction of actual vacancies over prior three
years (enter percent or N/A).......................... %
PHA/RMC/AME shall respond to the question, below, if it
scored below a grade of C on the vacancy component
Average number of calendar days for vacant unit to be
prepared for re-rental and for a new lease to take
effect (unit turnaround)..............................
Additional percentage points for the percent of units
subject to physical condition and/or neighborhood
environment (enter .5; .6; .7; .8; .9; or 1 or N/A)....... %
Indicator 3: Rents uncollected
Rents billed........................................... $
Rents collected........................................ $
Rents uncollected...................................... $
Balance of rents uncollected as a percentage of total
rents to be collected................................. %
Indicator 4: Work orders
Percent of emergency items corrected/abated within 24
hours................................................. %
Average number of calendar days for non-emergency work
orders to be completed................................
Average number of days PHA/RMC/AME has reduced the time
it takes to complete non-emergency work orders over
the past three years (enter average number of days or
N/A)..................................................
Additional percentage points for the percent of units
subject to physical condition and/or neighborhood
environment (enter .5; .6; .7; .8; .9; or 1 or N/A)....... %
Indicator 5: Annual inspection of units and systems
Percent of units inspected annually using standards
that were at least equivalent to HQS.................. %
Percent of units meeting HQS........................... %
PHA/RMC/AME completed all repairs where necessary for
code compliance either during the inspection, issued
work orders for the repairs, or referred the
deficiency to the current year's or next year's
modernization program (enter Yes or No)...............
Percent of buildings and sites, according to the
maintenance plan, where major systems were inspected.. %
Additional percentage points for the percent of units
subject to physical condition and/or neighborhood
environment (enter .5; .6; .7; .8; .9; or 1 or N/A)....... %
Indicator 6: Financial management
PHA/RMC/AME has cash reserves of $3 million or more
(enter Yes or No)..................................... $
If the answer is Yes, proceed to indicator #7; if the
answer is No, continue with the next question
Percent of cash reserves to total actual routine
expenditures.......................................... %
PHA/RMC/AME shall respond to the questions, below, if it
scored below a grade of C on the cash reserves component;
however, PHA/RMC/AME with tenant-paid utilities in all
their units will not be assessed on energy/utility
consumption even if they score below a grade of C on the
cash reserve component
PHA/RMC/AME has completed its energy audit and has
implemented all of the recommendations that were cost
effective (enter Yes or No)...........................
If the answer is Yes, proceed to indicator #7; if the
answer is No, continue with the next question
PHA/RMC/AME has completed its energy audit and is in
the process of implementing all of the recommendations
that were cost effective (enter Yes or No)............
If the answer is Yes, proceed to indicator #7; if the
answer is No, continue with the next question
PHA/RMC/AME has completed its energy audit (enter Yes
or No)................................................
If the answer is No, proceed to indicator #7
PHA/RMC/AME has completed its energy audit, but has not
implemented all of the recommendations that were cost
effective (enter Yes).................................
Indicator 7: Resident involvement (applies only to PHAs
with 100 units or less)
PHA Board, by resolution, has adopted a Section 3
program (enter Yes or No).............................
PHA/RMC/AME staff monitors progress and issues reports
concerning progress under the program (enter Yes or
No)...................................................
At each family development site where a resident
council exists, there has been a development-wide
election of resident council board members/officers
(enter Yes or No).....................................
At each family development site where a resident
council does not exist, the PHA/AME during the past
year has encouraged development-wide elections of
resident board members/officers (enter Yes or No or N/
A)....................................................
PHA Board, by resolution, has adopted mechanisms to
ensure that residents have ample opportunity for input
into planning and goal setting for ongoing management
issues, including capital improvement programs (enter
Yes or No)............................................
PHA Board has invited residents to participate in
planning for capital improvement programs (enter Yes
or No or N/A).........................................
If the PHA/RMC/AME has any special resident initiative
program(s), the percent of goals being met under the
implementation plan for any and all programs (enter
percent).............................................. %
Indicator 8: Security
PHA/RMC/AME has a mechanism for tracking crime related
problems (enter Yes or No)............................
PHA/RMC/AME can demonstrate a system for taking action
with local police authorities to improve law
enforcement, lease enforcement and crime prevention
(enter Yes or No).....................................
PHA Board, by resolution, has adopted policies that
screen out public housing applicants with a history of
criminal activity involving crimes to persons or
property and/or other criminal acts that would
adversely affect the health, safety or welfare of
other residents (enter Yes or No).....................
[[Page 20370]]
PHA/RMC/AME has implemented procedures and can document
that it appropriately screens out and denies admission
to public housing applicants with a history of
criminal activity involving crimes to persons or
property and/or other criminal acts that would
adversely affect the health, safety or welfare of
other residents (enter Yes or No).....................
PHA Board, by resolution, has adopted policies that
appropriately evict a public housing resident who
engages in any criminal activity that threatens the
health, safety, or right to peaceful enjoyment of the
premises by other residents; engages in any drug-
related criminal activity (as defined at section 6(l)
of the 1937 Act [42 U.S.C. 1437d(l)]) on or off the
PHA's property; or who the PHA has reasonable cause to
believe abuses alcohol in such a way that may
interfere with the health, safety, or right to
peaceful enjoyment of the premises by other residents
(enter Yes or No).....................................
PHA/RMC/AME has implemented procedures and can document
that it appropriately evicts a public housing resident
who engages in any criminal activity that threatens
the health, safety, or right to peaceful enjoyment of
the premises by other residents; engages in any drug-
related criminal activity (as defined at section 6(l)
of the 1937 Act [42 U.S.C. 1437d(l)]) on or off the
PHA's property; or who the PHA has reasonable cause to
believe abuses alcohol in such a way that may
interfere with the health, safety, or right to
peaceful enjoyment of the premises by other residents
(enter Yes or No).....................................
If the PHA/RMC/AME has any special drug prevention
program or crime reduction program funded by any HUD
funds, the percent of goals being met under the
implementation plan for any and all programs (enter
percent).............................................. %
V. Other Matters
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969. The Finding of No Significant Impact is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk at the above address.
Regulatory Planning and Review
This proposed rule has been reviewed in accordance with Executive
Order 12866, issued by the President on September 30, 1993 (58 FR
51735, October 4, 1993). Any changes to the proposed rule resulting
from this review are available for public inspection between 7:30 a.m.
and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk.
Regulatory Flexibility Act
The Secretary in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and approved this proposed rule, and in so
doing certifies that this proposed rule would not have a significant
economic impact on a substantial number of small entities. The rule
establishes management assessment criteria for PHAs. HUD does not
anticipate a significant economic impact on a substantial number of
small entities, since the proposed rule establishes management
assessment criteria which will be utilized by State/Area Offices for
monitoring purposes and the provision of technical assistance to PHAs.
Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this proposed rule will not have substantial direct
effects on States or their political subdivisions, or the relationship
between the Federal government and the States, or on the distribution
of power and responsibilities among the various levels of government.
The proposed rule is intended to promote good management practices by
including, in HUD's relationship with PHAs, continuing review of PHAs'
compliance with already existing requirements. In addition, the
proposed rule carries out, as unobtrusively as possible, a Federal
statutory mandate. The proposed rule does not create any new
significant requirements of its own. As a result, the proposed rule is
not subject to review under the Order.
Family Impact
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this proposed rule does
not have potential for significant impact on family formation,
maintenance, and general well-being, and, thus, is not subject to
review under the Order. The proposed rule involves requirements for
management assessment of PHAs. Any effect on the family would be
indirect. To the extent families in public housing will be affected,
the impact of the proposed rule's requirements is expected to be a
positive one.
List of Subjects in 24 CFR Part 901
Administrative practice and procedures, Public housing, Reporting
and recordkeeping requirements.
Accordingly, part 901 of title 24 of the Code of Federal
Regulations is proposed to be revised as follows:
PART 901--PUBLIC HOUSING MANAGEMENT ASSESSMENT PROGRAM
Sec.
901.1 Purpose and applicability.
901.5 Definitions.
901.10 Indicator #1, vacancy rate and unit turnaround time.
901.15 Indicator #2, modernization.
901.20 Indicator #3, rents uncollected.
901.25 Indicator #4, work orders.
901.30 Indicator #5, annual inspection of units and systems.
901.35 Indicator #6, financial management.
901.40 Indicator #7, resident involvement.
901.45 Indicator #8, security.
901.100 Data collection.
901.105 Computing assessment score.
901.110 PHA request for exclusion or modification of an indicator
or component.
901.115 PHA score and status.
901.120 State/Area Office functions.
901.125 PHA right of appeal.
901.130 Incentives.
901.135 Memorandum of Agreement.
901.140 Removal from troubled status and mod-troubled status.
901.145 Improvement Plan.
901.150 PHAs troubled with respect to the program under section 14
(mod-troubled PHAs).
901.155 PHMAP public record.
901.200 Events or conditions that constitute substantial default.
901.205 Notice and response.
901.210 Interventions.
901.215 Contracting and funding.
901.220 Resident participation in competitive proposals to manage
the housing of a PHA.
901.225 Resident petitions for remedial action.
901.230 Receivership.
901.235 Technical assistance.
Authority: 42 U.S.C. 1437d(j) and 3535(d).
Sec. 901.1 Purpose and applicability.
(a) Purpose. This part establishes the Public Housing Management
Assessment Program (PHMAP) to implement and augment section 6(j) of the
1937 Act (42 U.S.C. 1437d). PHMAP provides policies and procedures to
identify public housing agency (PHA), resident management corporation
(RMC), and alternative management entity (AME) management capabilities
and deficiencies, recognize high-performing PHAs, designate criteria
for defining troubled PHAs and PHAs that are troubled with respect to
the program under section 14 (Public Housing Modernization Program),
and improve
[[Page 20371]]
the management practices of troubled PHAs and mod-troubled PHAs.
(b) Applicability.
(1) The provisions of this part apply to PHAs and RMCs as noted in
the sections of this part.
(2) When a PHA's management functions have been assumed by an AME:
(i) If the AME assumes only a portion of the PHA's management
functions, the provisions of this part that apply to RMCs apply to the
AME; or
(ii) If the AME assumes all, or substantially all, of the PHA's
management functions, the provisions of this part that apply to PHAs
apply to the AME.
(3) To ensure quality management results from a contract between an
AME and a PHA, or between an AME and HUD, minimum performance criteria
that relate to the PHMAP indicators, as applicable, should be included
in such contract. Failure to meet the performance criteria would be a
basis for termination of the contract. However, even in the absence of
explicit contractual provisions, this part applies to AMEs in
accordance with paragraph (b)(2) of this section.
Sec. 901.5 Definitions.
Actual vacancy rate is the vacancy rate calculated without any
adjustments. It is calculated by dividing the total number of vacancy
days in the fiscal year by the total number of unit days available in
the fiscal year.
Adjusted vacancy rate is the vacancy rate calculated after
excluding the vacancy days that are exempted for any of the eligible
reasons. It is calculated by dividing the total number of adjusted
vacancy days in the fiscal year by the total number of unit days
available in the fiscal year.
Alternative management entity (AME) is a receiver, private
contractor, private manager, or any other entity that is under contract
with a PHA, or that is otherwise duly appointed or contracted (for
example, by court order or agency action), to manage all or part of a
PHA's operations. Depending upon the scope of PHA management functions
assumed by the AME, in accordance with Sec. 901.1(b)(2), the AME is
treated as a PHA or an RMC for purposes of this part and, as
appropriate, the terms PHA and RMC include AME.
Annual average is an average computed from data from a PHA's
immediate past fiscal year for applicable indicators.
Approved demolition and/or disposition program exists when a PHA's
application for demolition and/or disposition of low-rent public
housing units has received written approval from HUD.
Approved funded, on-schedule annual modernization program includes
any modernization program, funded out of the Comprehensive Grant
Program (CGP), the Comprehensive Improvement Assistance Program (CIAP),
the Vacancy Reduction Program (VRP), the Hope VI Program, or any other
source, if a PHA is in conformance with its current implementation
schedule as approved by the PHA Board of Commissioners and/or HUD.
Assistant Secretary means the Assistant Secretary for Public and
Indian Housing of the Department.
Available unit is a dwelling unit (occupied or vacant) under a
PHA's Annual Contributions Contract.
Average turnaround time is the annual average of the total number
of turnaround days between the move-out date (whenever that occurred,
including in some previous fiscal year) and the date a new lease takes
effect. Each time an individual unit is re-occupied (turned around)
during the fiscal year, the turnaround days for that unit shall be
counted in the turnaround time. Average turnaround time is calculated
by dividing the total turnaround days for all units re-occupied during
the fiscal year by the total number of units re-occupied during the
immediate past fiscal year.
Cash reserves is cash available at the end of an annual reporting
period after all necessary expenses of a PHA/development have been paid
or funds have been set-aside for such payment. The cash reserve
computation takes into consideration both short-term accounts
receivable and accounts payable.
Confirmatory review is an on-site review for the purposes of State/
Area Office verification of the performance level of a PHA, the
accuracy of the data certified to by a PHA, and the accuracy of the
data derived from State/Area Office files.
Correct means to improve performance in an indicator to a level of
grade ``C'' or better.
Current dwelling rent charged refers to the resident dwelling rent
charges reflected in the monthly rent roll(s), and excludes retroactive
rent charges, maintenance charges, excess utility charges, late
charges, and any other charges not specifically identified as dwelling
rent.
Cyclical work orders are work orders issued for the performance of
routine maintenance work that is done in the same way at regular
intervals. Examples of cyclical work include, but are not limited to,
mopping hallways; picking up litter; cleaning a trash compactor;
changing light bulbs in an entryway; etc. (Cyclical work orders should
not be confused with preventive maintenance work orders.)
Deficiency means any grade below ``C'' in an indicator or
component.
Emergency means physical work items that pose an immediate threat
to life, health, safety, or property, or that are related to fire
safety.
Emergency status abated means that an emergency work order is
either fully completed, or the emergency condition is temporarily
eliminated and no longer poses an immediate threat. If the work cannot
be completed, emergency status can be abated by transferring the
resident away from the emergency situation.
Emergency work order is a work order, from any source, that
involves a circumstance that poses an immediate threat to life, health,
safety or property, or that is related to fire safety.
HQS means Housing Quality Standards as set forth at 24 CFR 882.109
and amended by the Lead-Based Paint regulation at 24 CFR part 35.
Indicators means the major categories of PHA management functions
that are examined under this program for assessment purposes. The list
of individual indicators and the way they are graded is provided in
Secs. 901.10 through 901.45.
Local occupancy/housing codes are the minimum standards for human
occupancy, if any, as defined by the local ordinance(s) of the
jurisdiction in which the housing is located.
Major systems include, but are not limited to, structural/building
envelopes which include roofing, walls, windows, hardware, flashings
and caulking; mechanical systems which include heating, ventilation,
air conditioning, plumbing, drainage, underground utilities (gas,
electrical and water), and fuel storage tanks; electrical systems which
include underground systems, above ground systems, elevators, emergency
generators, door bells, electronic security devices, fire alarms, smoke
alarms, outdoor lighting, and indoor lighting (halls, stairwells,
public areas and exit signs); and transformers.
Memorandum of Agreement (MOA) is a binding contractual agreement
between a PHA and HUD, required for each PHA designated as troubled
and/or mod-troubled. The MOA sets forth target dates, strategies and
incentives for improving management performance; and provides sanctions
if performance does not result.
Non-emergency work order is any work order that covers a situation
that is not an immediate threat to life,
[[Page 20372]]
health, safety, or property, or that is unrelated to fire safety.
Percentage of emergency work orders completed within 24 hours is
the ratio of emergency work orders completed in 24 hours to the total
number of emergency work orders. The formula for calculating this ratio
is: total emergency work orders completed (or emergency status abated)
in 24 hours or less, divided by the total number of emergency work
orders.
Percentage of rents uncollected is the proportion of current
dwelling rent that was billed during the assessment year, but not
collected during the assessment year. The calculation is made as of the
close of business on the last business day of the fiscal year. It is
calculated by subtracting the total dwelling rent collected in the
immediate past fiscal year from the total dwelling rent billed in the
immediate past fiscal year to determine the amount of rents
uncollected; and dividing the amount of rents uncollected by the total
dwelling rent billed.
PHA means a public housing agency. As appropriate in accordance
with Sec. 901.1(b)(2), PHA also includes AME.
PHA-generated work order is any work order that is issued in
response to a request from within the PHA administration.
Preventive maintenance program is a program under which certain
maintenance procedures are systematically performed at regular
intervals to prevent premature deterioration of buildings and systems.
The program is developed and regularly updated by the PHA, and fully
documents what work is to be performed and at what intervals. The
program includes a system for tracking the performance of preventive
maintenance work.
Preventive maintenance work order is any work done on a regularly
scheduled basis in order to prevent deterioration or breakdowns in
individual units or major systems.
Reduced actual vacancy rate in the previous three years is a
comparison of the vacancy rate in the PHMAP assessment year (the
immediate past fiscal year) to the vacancy rate in the first year of
the previous three year period. It is calculated by subtracting the
vacancy rate in the assessment year from the vacancy rate in the
earlier year.
Reduced the average time it took to complete work orders over the
previous three years is a comparison of the average time it took to
complete work orders in the PHMAP assessment year (the immediate past
fiscal year) to the average time it took to complete work orders in the
first year of the previous three year period. It is calculated by
subtracting the average time it took to complete work orders in the
PHMAP assessment year from the average time it took to complete work
orders in the earlier year.
Rents uncollected means unpaid resident dwelling rent for residents
in possession.
Resident-generated work order is a work order issued by a PHA in
response to a request from a lease holder or family member of a lease
holder.
Resident management corporation (RMC) means the entity that
proposes to enter into, or that enters into, a management contract with
a PHA in accordance with 24 CFR 964.120. As appropriate in accordance
with Sec. 901.1(b)(2), RMC also includes AME.
Routine operating expenses are all expenses which are normal,
recurring fiscal year expenditures. Routine expenses exclude those
expenditures that are not normal fiscal year expenditures and those
that clearly represent work of such a substantial nature that the
expense is clearly not a routine occurrence.
Standards equivalent to HQS are housing/occupancy inspection
standards that are equal to HUD's Section 8 HQS.
Substantial default means a PHA is determined by the Department to
be in violation of statutory, regulatory or contractual provisions or
requirements, whether or not these violations would constitute a
substantial default or a substantial breach under explicit provisions
of the relevant Annual Contributions Contract or a Memorandum of
Agreement.
Turnaround days are the days between the last move-out and the date
a new lease takes effect, including any turnaround days in prior fiscal
years.
Vacancy day is a day when a unit is not under lease by an eligible
low-income resident, unless the vacancy day is exempted for an eligible
reason.
Vacant unit is a dwelling unit that is not under lease to an
eligible family. Units under lease for police substations, social
service providers, etc., are treated the same as units under lease to
eligible families.
Vacant unit turnaround work order is a work order issued that
directs a vacant unit to be made ready to lease to a new resident and
reflects all work items to prepare the unit for occupancy.
Vacant unit undergoing modernization is a vacant unit in an
otherwise viable development, as defined in 24 CFR 970.6, when the
development is undergoing modernization that includes work that is
necessary to reoccupy the vacant unit, and in which either: The vacant
unit is under construction (i.e., the construction contract has been
awarded or force account work has started); or the treatment of the
vacant unit is included in a HUD-approved modernization budget (e.g.,
an approved Annual Statement for the Comprehensive Grant Program (CGP)
or Comprehensive Improvement Assistance Program (CIAP) budget), but the
time period for placing the vacant units under construction has not yet
expired. The PHA must place the vacant units under construction within
two Federal fiscal years (FFYs) after the FFY in which the
modernization funds are approved. In addition, the following apply when
computing time periods for a vacant unit undergoing modernization:
(1) If a unit is vacant prior to being included in the construction
budget of an approved funded on-schedule annual modernization plan,
those vacancy days that had accumulated prior to the unit being
included in the construction budget of an annual modernization plan
must be included as non-exempted vacancy days in the calculation.
(2) The calculation of turnaround time for newly modernized units
starts when the unit is turned over to the PHA from the contractor and
ends when the lease is effective for the new or returning resident.
Thus, the total turnaround time would be the sum of the pre-
modernization vacancy time, and the post-modernization vacancy time.
(3) Unit-by-unit documentation, showing when a vacant unit was
included in the construction budget of a modernization plan, when it
was released to the PHA by the contractor, and when a new lease is
effective for the new or returning resident, must be maintained by the
PHA.
(4) Units remaining vacant more than two FFYs after the FFY in
which the modernization funds are approved, may no longer be exempted
from the calculation of the adjusted vacancy rate if the construction
contract has not been let. These units may be exempted again, but only
after a contract is let.
Work order is a directive, containing one or more tasks issued to a
PHA employee or contractor to perform one or more tasks on PHA
property. This directive describes the location and the type of work to
be performed; the date and time of receipt; date and time issued to the
person or entity performing the work; the date and time the work is
satisfactorily completed; the parts used to complete the repairs and
the cost of the parts; whether the damage was caused by the resident;
and the charges to the resident for resident-
[[Page 20373]]
caused damage. The work order is entered into a log which indicates at
all times the status of all work orders as to type (emergency, routine,
etc.), when issued, and when completed.
Work order completed during the immediate past fiscal year is any
work order that is completed during the PHA's fiscal year regardless of
when it may have been received.
Work order deferred for modernization is any work order that is
combined with similar work orders and completed within the current
PHMAP assessment year, or will be completed in the following year,
under the PHA's modernization program or other PHA capital improvements
program.
Sec. 901.10 Indicator #1, vacancy rate and unit turnaround time.
This indicator examines the vacancy rate, a PHA's progress in
reducing vacancies, and unit turnaround time. This indicator has a
weight of x2.
(a) For the calculation of the adjusted vacancy rate and turnaround
time, the vacancy days for units in the following categories shall be
exempted:
(1) Vacant unit undergoing modernization.
(2) Vacant units in an approved demolition or disposition program
(not applicable to vacant unit turnaround).
(3) Vacant units that are documented to be uninhabitable for
reasons beyond the PHA's control:
(i) Due to high/unsafe levels of hazardous/toxic material (e.g.,
lead-based paint or asbestos);
(ii) By order of the local health department or directive of the
Environmental Protection Agency, where the conditions causing the order
are beyond the control of the PHA; and
(iii) That are structurally unsound (e.g., buildings damaged by
shrinking/swelling subsoil or similar situations, or as a result of
natural disasters).
(4) Vacant units in which resident property has been abandoned, but
only if State law requires the property to be left in the unit for some
period of time, and only for the period stated in the law.
(5) Vacant units that have sustained casualty damage, but only
until the insurance claim is adjusted, i.e., funds to repair the unit
are received.
(6) Units that are used for non-dwelling purposes and dwelling
units that are occupied by employees of the PHA and units that are used
for resident services.
(7) Vacant units required to remain vacant because of fire/police
investigations, coroner's seal, or court order.
(8) Units kept vacant because of code violations caused for reasons
beyond the control of the PHA, rather than as a result of management
and/or maintenance failures by the PHA.
(9) Units vacant for circumstances and actions beyond the PHA's
control that prevent the PHA from being able to occupy, sell, demolish,
rehabilitate, reconstruct, consolidate, or modernize vacant units. Such
circumstances and actions may include:
(i) Litigation, such as a court order or settlement agreement that
is legally enforceable. For example, units that are being held vacant
as part of a court-ordered or HUD-approved desegregation effort would
be exempted.
(ii) Federal or, when not preempted by Federal requirements, State
law of general applicability or their implementing regulations. This
category does not include units vacant only because they do not meet
minimum standards established, for example, in housing and building
codes.
(iii) Changing market conditions. For example, small PHAs that are
located in areas experiencing population loss or economic dislocations
may face a lack of demand in the foreseeable future, even after
aggressive marketing and outreach measures by the PHA have been
undertaken. Documentation of marketing efforts must be maintained by
the PHA.
(iv) Natural disasters.
(v) Insufficient funding for otherwise approvable applications made
for CIAP funds (only PHAs with less than 250 units are eligible to
apply and compete for CIAP funds). This definition will cease to be
used if CIAP is replaced by a formula grant.
(vi) Pending resolution of insurance claims or settlements. The
period between a casualty loss and the receipt of funds from an insurer
to cover the loss in whole or in part.
(b) Component #1, vacancy percentage and progress in reducing
vacancies. A PHA may choose whether to use actual or adjusted vacancy
rate. This component has a weight of x2.
(1) Grade A: The PHA is in one of the following categories:
(i) An actual vacancy rate of 3% or less; or
(ii) An adjusted vacancy rate of 2% or less.
(2) Grade B: The PHA is in one of the following categories:
(i) An actual vacancy rate of greater than 3% and less than or
equal to 5%; or
(ii) An adjusted vacancy rate of greater than 2%, but less than or
equal to 3%.
(3) Grade C: The PHA is in one of the following categories:
(i) An actual vacancy rate of greater than 5% and less than or
equal to 7%; or
(ii) An adjusted vacancy rate of greater than 3% and less than or
equal to 4%; or
(iii) The PHA has reduced its actual vacancy rate by at least 15
percentage points over the past three years and has an adjusted vacancy
rate of greater than 4% and less than or equal to 5%.
(4) Grade D: The PHA is in one of the following categories:
(i) An actual vacancy rate of greater than 7% and less than or
equal to 9%;
(ii) An adjusted vacancy rate of greater than 4% and less than or
equal to 5%; or
(iii) The PHA has reduced its actual vacancy rate by at least 10
percentage points over the past three years and has an adjusted vacancy
rate of greater than 5% and less than or equal to 6%.
(5) Grade E: The PHA is in one of the following categories:
(i) An actual vacancy rate of greater than 9% and less than or
equal to 10%; or
(ii) An adjusted annual vacancy rate of greater than 5% and less
than or equal to 6%; or
(iii) The PHA has reduced its actual vacancy rate by at least five
percentage points over the past three years and has an adjusted vacancy
rate of greater than 6% and less than or equal to 7%.
(6) Grade F: The PHA is in one of the following categories:
(i) An actual vacancy rate of greater than 10%; or
(ii) An adjusted annual vacancy rate of greater than 6%.
(c) Component #2, unit turnaround time. This component is to be
completed only by PHAs scoring below a grade C on component #1. This
component has a weight of x1.
(1) Grade A: The average number of calendar days between the time
when a unit is vacated and a new lease takes effect for units re-
occupied during the PHA's immediate past fiscal year, is less than or
equal to 20 calendar days.
(2) Grade B: The average number of calendar days between the time
when a unit is vacated and a new lease takes effect for units re-
occupied during the PHA's immediate past fiscal year, is greater than
20 calendar days and less than or equal to 25 calendar days.
(3) Grade C: The average number of calendar days between the time
when a unit is vacated and a new lease takes effect for units re-
occupied during the PHA's immediate past fiscal year, is greater than
25 calendar days and less than or equal to 30 calendar days.
(4) Grade D: The average number of calendar days between the time
when a
[[Page 20374]]
unit is vacated and a new lease takes effect for units re-occupied
during the PHA's immediate past fiscal year, is greater than 30
calendar days and less than or equal to 40 calendar days.
(5) Grade E: The average number of calendar days between the time
when a unit is vacated and a new lease takes effect for units re-
occupied during the PHA's immediate past fiscal year, is greater than
40 calendar days and less than or equal to 50 calendar days.
(6) Grade F: The average number of calendar days between the time
when a unit is vacated and a new lease takes effect for units re-
occupied during the PHA's immediate past fiscal year, is greater than
50 calendar days.
Sec. 901.15 Indicator #2, modernization.
This indicator is automatically excluded if a PHA does not have a
modernization program. This indicator examines the amount of unexpended
funds over three years old, the timeliness of fund obligation, the
adequacy of contract administration, the quality of the physical work,
and the adequacy of budget controls. It applies to both the
Comprehensive Grant Program (CGP) and the Comprehensive Improvement
Assistance Program (CIAP). This indicator has a weight of x1.
(a) Component #1, unexpended funds over three Federal Fiscal Years
(FFYs) Old. This component has a weight of x1.
(1) Grade A: The PHA has no unexpended funds over three FFYs old,
or is able to demonstrate one of the following:
(i) The unexpended funds are leftover funds and will be recaptured
after audit; or
(ii) The HUD-approved original implementation schedule allows
longer than three FFYs to expend all funds; or
(iii) The PHA has self-executed a time extension within 30 calendar
days after the expenditure deadline and the extension is based on valid
reasons outside of the PHA's control, such as litigation, material
shortages, or other institutional delay.
(2) Grade F: The PHA has unexpended funds over three FFYs old and
is unable to demonstrate any of the above three conditions; or the PHA
requests HUD approval of a time extension based on reasons within the
PHA's control.
(b) Component #2, timeliness of fund obligation. This component has
a weight of x2.
(1) Grade A: The PHA has no unobligated funds over two FFYs old or
is able to demonstrate one of the following:
(i) The HUD-approved original implementation schedule allows longer
than two FFYs to obligate all funds; or
(ii) The PHA has self-executed a time extension within 30 calendar
days after the obligation deadline and the extension is based on valid
reasons outside of the PHA's control, such as litigation, material
shortages, or other institutional delay.
(2) Grade F: The PHA has unobligated funds over two FFYs old and is
unable to demonstrate any of the above two conditions; or the PHA
requests HUD approval of a time extension based on reasons within the
PHA's control.
(c) Component #3, adequacy of contract administration. This
component has a weight of x1.5.
(1) Grade A: Based on HUD's latest on-site inspection and/or audit,
there were no significant findings related to contract administration
or the PHA has corrected all such findings.
(2) Grade C: Based on HUD's latest on-site inspection and/or audit,
there were significant findings related to contract administration and
the PHA is in the process of correcting all such findings.
(3) Grade F: Based on HUD's latest on-site inspection and/or audit,
there were significant findings related to contract administration and
the PHA has failed to initiate corrective actions for all such findings
or those actions which have been initiated have not resulted in
progress toward remedying all of the findings.
(d) Component #4, quality of the physical work. This component has
a weight of x3.
(1) Grade A: Based on HUD's latest on-site inspection, there were
no significant findings related to the quality of the physical work or
the PHA has corrected all such findings.
(2) Grade C: Based on HUD's latest on-site inspection, there were
significant monitoring findings related to the quality of the physical
work and the PHA is in the process of correcting all such findings.
(3) Grade F: Based on HUD's latest on-site inspection, there were
significant monitoring findings related to the quality of the physical
work and the PHA has failed to initiate corrective actions for all such
findings or those actions which have been initiated have not resulted
in progress toward remedying all of the findings.
(e) Component #5, adequacy of budget controls. This component has a
weight of x1.
(1) Grade A: The CGP PHA has expended modernization funds only on
work items in HUD-approved CGP Annual Statements/Five-Year Action Plan
or has obtained prior HUD approval for required budget revisions. The
CIAP PHA has expended modernization funds only on work items in HUD-
approved CIAP budgets, or within the HUD-established threshold for CIAP
budget revisions, or has obtained prior HUD approval for required
budget revisions.
(2) Grade F: The CGP PHA has expended modernization funds on work
items that were not in HUD-approved CGP Annual Statements/Five-Year
Action Plan and did not obtain prior HUD approval for required budget
revisions. The CIAP PHA has expended modernization funds on work items
that were not in HUD-approved CIAP budgets, or within the HUD-
established threshold for CIAP budget revisions, and did not obtain
prior HUD approval for required budget revisions.
Sec. 901.20 Indicator #3, rents uncollected.
This indicator examines the PHA's ability to collect rent by
measuring the percentage of dwelling rent it failed to collect during
its immediate past fiscal year. This indicator has a weight of x1.5.
(a) Grade A: Percent of rents uncollected in the immediate past
fiscal year is less than or equal to 2% of total rents billed.
(b) Grade B: The percent of rents uncollected in the immediate past
fiscal year is greater than 2% and less than or equal to 4% of total
rents billed.
(c) Grade C: The percent of rents uncollected in the immediate past
fiscal year is greater than 4% and less than or equal to 6% of total
rents billed.
(d) Grade D: The percent of rents uncollected in the immediate past
fiscal year is greater than 6% and less than or equal to 8% of total
rents billed.
(e) Grade E: The percent of rents uncollected in the immediate past
fiscal year is greater than 8% and less than or equal to 10% of total
rents billed.
(f) Grade F: The percent of rents uncollected in the immediate past
fiscal year is greater than 10% of total rents billed.
Sec. 901.25 Indicator #4, work orders.
This indicator examines the average number of days it takes for a
work order to be completed, and any progress a PHA has made during the
preceding three years to reduce the period of time required to complete
maintenance work orders. This indicator has a weight of x1.5.
(a) Component #1, emergency work orders completed within 24 hours
or less. This component has a weight of x1.
(1) Grade A: At least 99% of emergency work orders were completed
or the emergency was abated within 24
[[Page 20375]]
hours or less during the PHA's immediate past fiscal year.
(2) Grade B: At least 98% of emergency work orders were completed
or the emergency was abated within 24 hours or less during the PHA's
immediate past fiscal year.
(3) Grade C: At least 97% of emergency work orders were completed
or the emergency was abated within 24 hours or less during the PHA's
immediate past fiscal year.
(4) Grade D: At least 96% of emergency work orders were completed
or the emergency was abated within 24 hours or less during the PHA's
immediate past fiscal year.
(5) Grade E: At least 95% of emergency work orders were completed
or the emergency was abated within 24 hours or less during the PHA's
immediate past fiscal year.
(6) Grade F: Less than 95% of emergency work orders were completed
or the emergency was abated within 24 hours or less during the PHA's
immediate past fiscal year.
(b) Component #2, average number of days for non-emergency work
orders to be completed. All work orders should be tracked, except non-
emergency work orders exempted for modernization, issued to prepare a
vacant unit for re-rental, or issued for the performance of cyclical
maintenance. This component has a weight of x2.
(1) Grade A: All non-emergency work orders are completed within an
average of 25 calendar days.
(2) Grade B: All non-emergency work orders are completed within an
average of greater than 25 calendar days and less than or equal to 30
calendar days.
(3) Grade C: The PHA is in one of the following categories:
(i) All non-emergency work orders are completed within an average
of greater than 30 calendar days and less than or equal to 40 calendar
days; or
(ii) The PHA has reduced the average time it takes to complete non-
emergency work orders over the past three years by at least 30 days.
(4) Grade D: The PHA is in one of the following categories:
(i) All non-emergency work orders are completed within an average
of greater than 40 calendar days and less than or equal to 50 calendar
days; or
(ii) The PHA has reduced the average time it takes to complete non-
emergency work orders over the past three years by at least 20 days.
(5) Grade E: The PHA is in one of the following categories:
(i) All non-emergency work orders are completed within an average
of greater than 50 calendar days and less than or equal to 60 calendar
days; or
(ii) The PHA has reduced the average time it takes to complete non-
emergency work orders over the past three years by at least 10 days.
(6) Grade F: All non-emergency work orders are completed within an
average of greater than 60 calendar days.
Sec. 901.30 Indicator #5, annual inspection of units and systems.
This indicator examines the percentage of units that a PHA inspects
on an annual basis in order to determine short-term maintenance needs
and long-term modernization needs. This indicator has a weight of x1.
(a) Units in the following categories are exempted and not included
in the calculation of the total number of units, and the number and
percentage of units inspected. Systems that are a part of individual
dwelling units that are exempted, or a part of a building where all of
the dwelling units in the building are exempted, are also exempted from
the calculation of this indicator:
(1) Occupied units where the PHA has made two documented attempts
to inspect, but only if the PHA can document that appropriate legal
action (up to and including eviction of the legal or illegal
occupant(s)), has been taken under provisions of the lease to ensure
that the unit can be subsequently inspected.
(2) Vacant unit undergoing modernization.
(3) Vacant units in an approved demolition or disposition program.
(4) Vacant units that are documented to be uninhabitable:
(i) Due to high/unsafe levels of hazardous/toxic material (e.g.,
lead-based paint or asbestos);
(ii) By order of the local health department or directive of the
Environmental Protection Agency, where the conditions causing the order
are beyond the control of the PHA; and
(iii) That are structurally unsound (e.g., buildings damaged by
shrinking/swelling subsoil or similar situations).
(5) Units vacant for the full immediate past fiscal year that have
been exempted under indicator #1, at Sec. 901.10, for any of the
reasons for which exemptions are permitted under that indicator (except
those units that are used for non-dwelling purposes or that are
occupied by employees of the PHA and units that are used for resident
services).
(b) Component #1, annual inspection of units. This component refers
to an inspection using either the local housing/occupancy code, or HUD
HQS if there is no local code or the local code is less stringent that
HQS. This component has a weight of x1.
(1) Grade A: The PHA inspected 100% of its units and, if repairs
were necessary for code compliance, either completed the repairs during
the inspection; issued work orders for the repairs; or referred the
deficiency to the current year's or next year's modernization program.
(2) Grade B: The PHA inspected less than 100% but at least 97% of
its units and, if repairs were necessary for code compliance, either
completed the repairs during the inspection; issued work orders for the
repairs; or referred the deficiency to the current year's or next
year's modernization program.
(3) Grade C: The PHA inspected less than 97% but at least 95% of
its units and, if repairs were necessary for code compliance, either
completed the repairs during the inspection; issued work orders for the
repairs; or referred the deficiency to the current year's or next
year's modernization program.
(4) Grade D: The PHA inspected less than 95% but at least 93% of
its units and, if repairs were necessary for code compliance, either
completed the repairs during the inspection; issued work orders for the
repairs; or referred the deficiency to the current year's or next
year's modernization program.
(5) Grade E: The PHA inspected less than 93% but at least 90% of
its units and, if repairs were necessary for code compliance, either
completed the repairs during the inspection; issued work orders for the
repairs; or referred the deficiency to the current year's or next
year's modernization program.
(6) Grade F: The PHA has failed to inspect at least 90% of its
units; or failed to correct deficiencies during the inspection or issue
work orders for the repairs; or failed to refer deficiencies to the
current year's or next year's modernization plan.
(c) Component #2, annual inspection of systems. This component
examines the inspection of buildings and sites according to the PHA's
maintenance plan, including performing the required maintenance on
structures and systems in accordance with manufacturer's specifications
and established local/PHA standards, or issuing work orders for future
maintenance/repairs, or including identified deficiencies in the
Comprehensive Modernization Plan. This component has a weight of x1.
(1) Grade A: At 100% of its buildings and sites, according to its
maintenance plan, the PHA inspected all major systems.
(2) Grade B: At a minimum of 90% but less than 100% of its
buildings and sites, according to its maintenance plan, the PHA
inspected all major systems.
(3) Grade C: At a minimum of 80% but less than 90% of its buildings
and
[[Page 20376]]
sites, according to its maintenance plan, the PHA inspected all major
systems.
(4) Grade D: At a minimum of 70% but less than 80% of its buildings
and sites, according to its maintenance plan, the PHA inspected all
major systems.
(5) Grade E: At least 60% but less than 70% of its buildings and
sites, according to its maintenance plan, the PHA inspected all major
systems.
(6) Grade F: The PHA failed to inspect at lease 60% of its
buildings and sites, all major systems, as defined herein, and perform
the required maintenance on these systems in accordance with
manufacturers specifications and established local/PHA standards, or
issue work orders for future maintenance/repairs, or include identified
deficiencies in the Comprehensive Modernization Plan.
Sec. 901.35 Indicator #6, financial management.
This indicator examines the amount of cash reserves and, for PHAs
scoring below a grade C on cash reserves, energy/utility consumption.
This indicator has a weight of x1.
(a) Component #1, cash reserves. This component has a weight of x2.
(1) Grade A: Cash reserves are greater than or equal to 15% of
total actual routine expenditures, or the PHA has cash reserves of $3
million or more.
(2) Grade B: Cash reserves are greater than or equal to 12.5%, but
less than 15% of total actual routine expenditures.
(3) Grade C: Cash reserves are greater than or equal to 10%, but
less than 12.5% of total actual routine expenditures.
(4) Grade D: Cash reserves are greater than or equal to 7.5%, but
less than 10% of total actual routine expenditures.
(5) Grade E: Cash reserves are greater than or equal to 5%, but
less than 7.5% of total actual routine expenditures.
(6) Grade F: Cash reserves are less than 5% of total actual routine
expenditures.
(b) Component #2, energy/utility consumption. Either option A or
option B of this component is to be completed only by PHAs that score
below a grade C on component #1. Regardless of a PHA's score on
component #1, it will not be scored on component #2 if all its units
have tenant paid utilities. Annual energy/utility consumption includes
water and sewage usage. This component has a weight of x1.
(1) Option A, Annual Energy/Utility Consumption.--(i) Grade A:
Annual energy/utility consumption, as compared to the average of the
three years' rolling base consumption, has not increased.
(ii) Grade B: Annual energy/utility consumption, as compared to the
average of the three years' rolling base consumption, has not increased
by more than 3%.
(iii) Grade C: Annual energy/utility consumption, as compared to
the average of the three years' rolling base consumption, has increased
by more than 3% and less than or equal to 5%.
(iv) Grade D: Annual energy/utility consumption, as compared to the
average of the three years' rolling base consumption, has increased by
more than 5% and less than or equal to 7%.
(v) Grade E: Annual energy/utility consumption, as compared to the
average of the three years' rolling base consumption, has increased by
more than 7% and less than or equal to 9%.
(vi) Grade F: Annual energy/utility consumption, as compared to the
average of the three years' rolling base consumption, has increased by
more than 9%.
(2) Component #2, option B, energy consumption.--(i) Grade A: The
PHA has completed its energy audit and has implemented all of the
recommendations that were cost effective.
(ii) Grade C: The PHA has completed its energy audit and is in the
process of implementing all of the recommendations that were cost
effective.
(iii) Grade F: The PHA has not completed its energy audit, or has
not implemented all of the recommendations that were cost effective.
Sec. 901.40 Indicator #7, resident involvement.
This indicator examines the PHA's efforts to encourage partnerships
with residents and the local community that help improve management
operations at the PHA; to encourage programs that develop self-
sufficiency, individual responsibility and community involvement among
residents; and, if applicable, PHA performance under any special HUD
grant(s). PHAs with 100 units or less will not be assessed under this
indicator. This indicator has a weight of x1.
(a) Grade A: The PHA meets each of the following criteria:
(1) The PHA Board, by resolution, has adopted a Section 3 program
and the PHA staff monitors progress under the program and issues
reports concerning progress under the program.
(2) The PHA has documentation that at each PHA family development
site where a resident council exists, there has been a development-wide
election of resident council board members and/or officers, and where
no resident council exists, the PHA has encouraged the formation of
such a council.
(3) The PHA Board has, through resolution, adopted mechanisms to
ensure that residents have ample opportunity for input into planning
and goal setting for ongoing management issues, as well as for capital
improvements programs such as the Comprehensive Grant Program and the
Comprehensive Improvement Assistance Program.
(4) If the PHA has any special resident initiative program, such as
a Technical Assistance Grant (TAG), the Tenant Opportunity Program
(TOP), Family Investment Center (FIC), Youth Sports (YS), Youth
Apprenticeship Program (YAP), or Family Self-Sufficiency (FSS), the PHA
can document that it is meeting at least 90% of its goals under the
implementation plan for any and all of these programs.
(b) Grade C: The PHA meets each of the following criteria:
(1) The PHA Board, by resolution, has adopted a Section 3 program.
(2) At each PHA family development site where a resident council
does not exist, the PHA during the assessment year has encouraged
development-wide elections of resident council board members and/or
officers.
(3) The PHA Board has invited residents to participate in planning
for capital improvements.
(4) If the PHA has any special resident initiative program, such as
TAG, TOP, FIC, YS, YAP, or FSS, the PHA can document that it is meeting
at least 60% of its goals under the implementation plan for any and all
of these programs.
(c) Grade F: The PHA fails to meet any one of the following
criteria:
(1) The PHA Board, by resolution, has adopted a Section 3 program.
(2) At each PHA family development site where a resident council
does not exist, the PHA during the assessment year has encouraged
development-wide elections of resident council board members and/or
officers.
(3) The PHA Board has invited residents to participate in planning
for capital improvements.
(4) If the PHA has any special resident initiative program, such as
TAG, TOP, FIC, YS, YAP, or FSS, the PHA can document that it is meeting
at least 60% of its goals under the implementation plan for any and all
of these programs.
Sec. 901.45 Indicator #8, security.
This indicator evaluates the PHAs performance in tracking crime-
related problems in their developments, cooperating with local law
enforcement and local courts, the adoption and
[[Page 20377]]
implementation of tough applicant screening and resident eviction
policies and procedures, and, as applicable, PHA performance under any
special HUD grant(s). PHAs with 100 units or less will not be assessed
under this indicator. This indicator has a weight of x1.
(a) Grade A: The PHA meets the following criteria:
(1) The PHA has a mechanism (such as the logging of serious
incidents in its various developments) for tracking crime related
problems and can demonstrate a system for taking action with local
police authorities to improve law enforcement, lease enforcement and
crime prevention.
(2) The PHA Board, by resolution, has adopted policies and the PHA
has implemented procedures and can document that it appropriately
screens out and denies admission to a public housing applicant who:
(i) Has a recent history of criminal activity involving crimes to
persons or property and/or other criminal acts that would adversely
affect the health, safety or welfare of other residents;
(ii) Was evicted, because of drug-related criminal activity, from
housing assisted under the U.S. Housing Act of 1937 within three years
of the projected date of admission, unless the applicant has
successfully completed, since the eviction, a rehabilitation program
approved by the public housing agency;
(iii) The PHA determines is illegally using a controlled substance;
or
(iv) The PHA has reasonable cause to believe abuses alcohol in a
way that may interfere with the health, safety, or right to peaceful
enjoyment of the premises by other residents.
(3) The PHA Board, by resolution, has adopted policies and the PHA
has implemented procedures and can document that it appropriately
evicts a public housing resident who:
(i) Engages in any criminal activity that threatens the health,
safety, or right to peaceful enjoyment of the premises by other
residents;
(ii) Engages in any drug-related criminal activity (as defined at
section 6(l) of the 1937 Act (42 U.S.C. 1437d(l)) on or off the PHA's
property; or
(iii) The PHA has reasonable cause to believe abuses alcohol in
such a way that may interfere with the health, safety, or right to
peaceful enjoyment of the premises by other residents.
(4) If the PHA has any special drug prevention program or crime
reduction program funded by any HUD funds, the PHA can document that it
is meeting at least 90% of its goals under the implementation plan for
any and all of these programs.
(b) Grade C: The PHA meets the following criteria:
(1) The PHA can demonstrate a system for taking action with local
police authorities to improve law enforcement, lease enforcement and
crime prevention.
(2) The PHA Board, by resolution, has adopted policies but cannot
document results in appropriately screening out and denying admission
to a public housing applicant who:
(i) Has a recent history of criminal activity involving crimes to
persons or property and/or other criminal acts that would adversely
affect the health, safety or welfare of other residents;
(ii) Was evicted, because of drug-related criminal activity, from
housing assisted under the U.S. Housing Act of 1937 (42 U.S.C. 1437 et
seq.) within three years of the projected date of admission, unless the
applicant has successfully completed, since the eviction, a
rehabilitation program approved by the public housing agency;
(iii) The PHA determines is illegally using a controlled substance;
or
(iv) The PHA has reasonable cause to believe abuses alcohol in a
way that may interfere with the health, safety, or right to peaceful
enjoyment of the premises by other residents.
(3) The PHA Board, by resolution, has adopted policies but cannot
document results in appropriately evicting a public housing resident
who:
(i) Engages in any criminal activity that threatens the health,
safety, or right to peaceful enjoyment of the premises by other
residents;
(ii) Engages in any drug-related criminal activity (as defined at
section 6(l) of the 1937 Act (42 U.S.C. 1437d(l)) on or off the PHA's
property; or
(iii) The PHA has reasonable cause to believe abuses alcohol in a
way that may interfere with the health, safety, or right to peaceful
enjoyment of the premises by other residents.
(4) If the PHA has any special drug prevention program or crime
reduction program funded by any HUD funds, the PHA can document that it
is meeting at least 60% of its goals under the implementation plan for
any and all of these programs.
(c) Grade F: The PHA meets any one the following criteria:
(1) The PHA is not cooperating with local police authorities in an
effort to provide safe and secure environments in its public housing
developments.
(2) The PHA has not adopted policies or procedures that result in
screening out and denying admission to a public housing applicant who:
(i) Has a recent history of criminal activity involving crimes to
persons or property and/or other criminal acts that would adversely
affect the health, safety or welfare of other residents;
(ii) Was evicted, because of drug-related criminal activity, from
housing assisted under the U.S. Housing Act of 1937 within three years
of the projected date of admission, unless the applicant has
successfully completed, since the eviction, a rehabilitation program
approved by the public housing agency;
(iii) The PHA determines is illegally using a controlled substance;
or
(iv) The PHA has reasonable cause to believe abuses alcohol in a
way that may interfere with the health, safety, or right to peaceful
enjoyment of the premises by other residents.
(3) The PHA has not adopted policies or procedures that document
results in the eviction of a public housing resident who:
(i) Engages in any criminal activity that threatens the health,
safety, or right to peaceful enjoyment of the premises by other
residents;
(ii) Engages in any drug-related criminal activity (as defined in
section 6(l) of the 1937 Act (42 U.S.C. 1437d(l))) on or off the PHA's
property; or
(iii) The PHA has reasonable cause to believe abuses alcohol in a
way that may interfere with the health, safety, or right to peaceful
enjoyment of the premises by other residents.
(4) If the PHA has any special drug prevention program or crime
reduction program funded by any HUD funds, the PHA does not have a
system for documenting or cannot document that it is meeting 60% or
more of its goals under the implementation plan for any and all of
these programs.
Sec. 901.100 Data collection.
(a) Information on some of the indicators will be derived by the
State/Area Office from existing reporting and data forms.
(b) A PHA shall provide certification as to data on indicators not
collected according to paragraph (a) of this section, by submitting a
certified questionnaire within 45 calendar days after the end of the
fiscal year covered by the certification:
(1) The certification shall be approved by PHA Board resolution,
and signed and attested to by the Executive Director.
(2) PHAs shall maintain documentation for three years verifying all
certified indicators for HUD on-site review.
(3) A PHA may include in its certification, rather than through an
exclusion or modification request, any information bearing on the
accuracy or completeness of the data being used by
[[Page 20378]]
HUD in grading an indicator. HUD will consider this assertion in
grading the affected indicator.
(4) If a PHA does not submit its certification, or submits its
certification late, appropriate sanctions may be imposed, including a
presumptive rating of failure in all of the PHMAP indicators, which may
result in troubled or mod-troubled designations.
(5) A PHA's certification will be post-reviewed by HUD during the
next on-site review, but is subject to verification at any time.
Appropriate sanctions for intentional false certification will be
imposed, including suspension or debarment of the signatories, the loss
of high performer designation, a lower grade for individual indicators
and a lower PHMAP total weighted score.
(c) For those developments of a PHA where management functions have
been assumed by an RMC, the PHA's certification shall identify the
development and the management functions assumed by the RMC. The PHA
shall obtain a certified questionnaire from the RMC as to the
management functions undertaken by the RMC. The PHA shall submit the
RMC's certified questionnaire along with its own. The RMC's
certification shall be approved by its Executive Director or Chief
Executive Officer of whatever title.
Sec. 901.105 Computing assessment score.
(a) Grades within indicators and components have the following
point values:
(1) Grade A = 10.0 points;
(2) Grade B = 8.5 points;
(3) Grade C = 7.0 points;
(4) Grade D = 5.0 points;
(5) Grade E = 3.0 point; and
(6) Grade F = 0.0 points.
(b) If indicators or components are designated as having additional
weight (e.g., x1.5 or x2), the points in each grade will be multiplied
times the additional weight.
(c) Indicators will be graded individually. Components within an
indicator will be graded individually, and then will be used to
determine a single grade for the indicator, by dividing the total
number of component points by the total number of component weights and
rounding off to two decimal places. The total number of component
weights for this purpose includes a one for components that are
unweighted (i.e., they are weighted x1, rather than x1.5 or x2).
(d) Adjustment for physical condition and neighborhood environment.
The overall PHMAP score will be adjusted by adding weighted points that
reflect the weight to be given to the differences in the difficulty of
managing developments that result from physical condition and
neighborhood environment:
(1) Weighting shall apply to the following three indicators only:
(i) Indicator #1, vacancy rate and unit turnaround;
(ii) Indicator #4, work orders; and
(iii) Indicator #5, annual inspection and condition of units and
systems.
(2) Definitions of physical condition and neighborhood environment
are:
(i) Physical condition: refers to units located in developments
over ten years old that require major capital investment in order to
meet minimum HQS standards or local codes, whichever is applicable.
This excludes developments that have been comprehensively modernized.
(ii) Neighborhood environment: refers to units located within
developments where the immediate surrounding neighborhood (that is a
majority of the census tracts on all sides of the development) has at
least 51% of families with incomes below the poverty rate as documented
by the latest census data.
(3) Any PHA with 5% or more of its units subject to either or both
of the above conditions shall, if they so choose, be issued a weighted
PHMAP score in addition to the regular score based solely upon the
certification of the PHA. The weighted score shall be calculated as
follows:
Percent of units subject to physical condition and/or extra
neighborhood environment: Extra
points
At least 5% but less than 10%.................................. .5
At least 10% but less than 20%................................. .6
At least 20% but less than 30%................................. .7
At least 30% but less than 40%................................. .8
At least 40% but less than 50%................................. .9
At least 50%................................................... 1.0
(i) These extra points will be added to the score (grade) of the
indicator(s) to which these conditions may apply. A PHA is required to
certify on form HUD-50072, PHMAP Certification, the extent to which the
conditions apply, and to which of the indicators the extra scoring
points should be added.
(ii) Developments that have received comprehensive modernization
within the past ten years are not eligible for a weighted score for the
physical condition factor.
(iii) A PHA that receives a grade of A under indicators #4 and #5
may not claim the additional weight for indicator #1 since the physical
condition of its developments is not applicable.
(iv) None of the weighted indicators may have a score that is more
than its total weighted points, including the additional point, or
fraction thereof, awarded for weighting.
(4) PHAs shall maintain supporting documentation to show how they
arrived at the number and percentage of units out of their total
inventory that are subject to weighting.
(i) If the basis was neighborhood environment, the PHA shall have
on file the appropriate maps showing the census tracts surrounding the
development(s) in question with supporting census data showing the
level of poverty. Units that fall into this category but which have
already been removed from consideration for other reasons (permitted
exemptions and modifications and/or exclusions) shall not be counted in
this calculation.
(ii) For the physical condition factor, a PHA would have to
maintain documentation showing the age and condition of the units and
the record of capital improvements, indicating that these particular
units have not received modernization funds.
(iii) PHAs shall also document that in all cases, units that were
exempted for other reasons were not included in the calculation.
Sec. 901.110 PHA request for exclusion or modification of an indicator
or component.
(a) A PHA shall have the right to request the exclusion or
modification of any indicator or component in its management
assessment, thereby excluding or modifying the impact of those
indicator's or component's grades in its PHMAP total weighted score.
(b) Exclusion and modification requests shall be submitted by a PHA
at the time of its PHMAP certification submission to the State/Area
Office along with supporting documentary justification, rather than
during the appeal process.
(c) Requests for exclusions and modifications that do not include
supporting documentary justification will not be considered.
(d) Indicator #2, modernization, shall be automatically excluded by
the State/Area Office if a PHA does not have an open modernization
program.
(e) Indicator #7, resident involvement, shall be automatically
excluded by the State/Area Office for PHAs with 100 or fewer units.
Sec. 901.115 PHA score and status.
(a) PHAs that achieve a total weighted score of 90% or greater may
be designated high performers. A PHA shall not be designated as a high
performer if it scores below a grade of
[[Page 20379]]
C for any indicator. High performers will be afforded incentives that
include substantial relief from reporting and other requirements, as
described in Sec. 901.130.
(b) PHAs that achieve a total weighted score of 90% or greater on
indicator #2, modernization, may be designated mod-high performers.
(c) PHAs that achieve a total weighted score of less than 90% but
not less than 60% may be designated standard. Standard performers will
be afforded incentives that include substantial relief from reporting
and other requirements, as described in Sec. 901.130.
(d) PHAs that achieve a total weighted score of less than 60% may
be designated as troubled.
(e) PHAs with more than 100 units that achieve a total weighted
score of less than 60% on indicator (2), modernization, may be
designated as troubled with respect to the program under section 14.
(f) Each PHA must post a notice of its PHMAP score and status in
appropriate conspicuous and accessible locations in its offices and in
each of its developments within two weeks of receipt of the score and
status. In addition, HUD will publish every PHA's score and status in
the Federal Register.
(g) Even though a PHA has satisfied all of the indicators for high
or standard performer designation, the State/Area Office may reinstate
any review as necessary to address the particular deficiencies, deny or
rescind incentives or high performer status, as described in paragraphs
(a) and (b) of this section in the case of a PHA that:
(1) Is operating under a special agreement with HUD;
(2) Is involved in litigation that bears directly upon the
management of a PHA;
(3) Is operating under a court order;
(4) Demonstrates substantial evidence of fraud or misconduct,
including evidence that the PHA's certification of indicators is not
supported by the facts, resulting from such sources as routine reports
and reviews, an Office of Inspector General investigation/audit, or an
investigation by any appropriate legal authority; or
(5) Demonstrates substantial noncompliance in one or more areas
(including areas not assessed by the PHMAP). Areas of substantial
noncompliance include, but are not limited to, noncompliance with
statutes (e.g., Fair Housing and Equal Opportunity statutes);
regulations (e.g., 24 CFR part 85); or the Annual Contributions
Contract (ACC) (e.g., the ACC, form HUD-53012A, Section 4, Mission of
the PHA). Substantial noncompliance would cast doubt on the PHA's
capacity to preserve and protect its public housing developments and
operate them consistent with Federal law and regulations.
(h) When a State/Area Office Public Housing Director acts for any
of the reasons stated in paragraph (e) of this section, the State/Area
Office will send written notification to the PHA with a specific
explanation of the reasons. An information copy will be forwarded to
the Assistant Secretary for Public and Indian Housing.
(i) A PHA may appeal denial of high performer status in accordance
with Sec. 901.125.
Sec. 901.120 State/Area Office functions.
(a) The State/Area Office will assess each PHA within its
jurisdiction on an annual basis:
(1) The State/Area Office will make determinations for high-
performing, standard, troubled PHAs, and troubled PHAs with respect to
the program under section 14 (mod-troubled) in accordance with a PHA's
PHMAP weighted score.
(2) The State/Area Office will also make determinations for
exclusion and modification requests.
(b) Each State/Area Office will notify each PHA of the PHA's grade
and the grade of the RMC (if any) assuming management functions at any
of the PHA's developments, in each indicator, the PHA's management
assessment total weighted score and status, and if applicable, its
handicapped score; any determinations concerning exclusion and
modification requests; and any deadline date by which appeals must be
received. PHA notification may include offers of pertinent technical
assistance in problem areas, suggestions for means of improving problem
areas, and areas of relief and incentives as a result of high performer
status. The PHA must notify the RMC (if any) in writing, immediately
upon receipt of the State/Area Office notification, of the RMC's
grades.
(c) An on-site confirmatory review may be conducted of a PHA by the
State/Area Office. The purpose of the on-site confirmatory review is to
verify those indicators for which a PHA provides certification, as well
as the accuracy of the information received in the State/Area Office
pertaining to the remaining indicators.
(1) If, in an exceptional circumstance, a confirmatory review is
conducted after the State/Area Office issues the initial notification
letter, the State/Area Office should explain the results of the
confirmatory review in writing, correct the PHAs total weighted score,
if appropriate, and reissue the initial notification letter to the PHA.
(2) The State/Area Office shall conduct a confirmatory review of a
PHA prior to the removal of troubled or mod-troubled designation.
(d) Determinations on appeals and on petitions to remove troubled
or mod-troubled status will be made by the State/Area Office.
(e) Determinations of intentional false certifications will be made
by the State/Area Office.
(f) The State/Area Office may deny or rescind a PHA's status as a
standard or high performer, in accordance with Sec. 901.115(e), so that
it will not be entitled to any of the areas of relief and incentives.
(g) The State/Area Office will maintain PHMAP files for public
inspection in accordance with Sec. 901.155.
Sec. 901.125 PHA right of appeal.
(a) A PHA has the right to appeal its PHMAP score to the State/Area
Office, including a troubled designation or designation as troubled
with respect to the program under section 14. A PHA may appeal its
management assessment rating on the basis of data errors, the denial of
exclusion or modification requests when their denial affects a PHA's
total weighted score, or a determination of intentional false
certification:
(1) A PHA may appeal its management assessment rating to the State/
Area Office only for the reasons stated in paragraph (a) of this
section:
(i) A PHA may not appeal its PHMAP score to the State/Area Office
unless it has submitted its certification to the State/Area Office.
(ii) A PHA may not appeal its PHMAP score to the State/Area Office
if the reason the PHA received a deficient grade in any indicator or
component was due to the fact the PHA did not submit a required report
in a timely manner.
(2) The appeal shall be submitted to the State/Area Office and
shall include supporting documentary justification of the reasons for
the appeal.
(3) The State/Area Office will make determinations on initial
appeals and will transmit the determination of the appeal to the PHA in
a notification letter that will also include the date and place for
submitting any further appeal.
(4) Appeals submitted to the State/Area Office without appropriate
documentation will not be considered and will be returned to the PHA.
(5) A PHA may not appeal its PHMAP score if the reason the PHA
received a deficient grade in any indicator or
[[Page 20380]]
component was due to the fact that the PHA did not submit a required
report(s) in a timely manner.
(6) Appeals of rescission of high performer designation shall be
made directly to the Assistant Secretary for Public and Indian Housing.
(b) A PHA may appeal the denial of an initial appeal by the State/
Area Office to the Assistant Secretary for Public and Indian Housing,
including initial appeals denying high performer designation,
designation as troubled or designation as troubled with respect to the
program under section 14, the denial of an appeal of a determination of
intentional false certification, and the rescission of high performer
designation. A PHA may appeal its management assessment rating on the
basis of data errors, the denial of exclusion or modification requests
when their denial affects a PHA's total weighted score, or a
determination of intentional false certification.
(1) A PHA may appeal its management assessment rating to the
Assistant Secretary for Public and Indian Housing only for the reasons
stated in paragraph (b) of this section.
(2) A PHA may not appeal its PHMAP score to the Assistant Secretary
unless it has submitted its certification to the State/Area Office.
(3) Appeals submitted to the Assistant Secretary for Public and
Indian Housing without appropriate documentation will not be considered
and will be returned to the PHA.
(c) A PHA has the right to appeal any refusal of a petition in
accordance with Sec. 901.140 to remove designation of troubled or
troubled with respect to the program under section 14 to the Assistant
Secretary for Public and Indian Housing.
(d) The date and place by which any appeal must be submitted will
be specified in the letter from the State/Area Office notifying the PHA
of any determination or action. For example, the State/Area Office
initial notification letter or denial of initial appeal letter will
specify the date and place by which appeals must be received. The date
specified will be the 15th calendar day after the letter is mailed, not
counting the day the letter is mailed. If the 15th day falls on a
weekend or holiday, the date specified will be the next day that is not
on a weekend or a holiday. Any appeal not received by the specified
time and place will not be considered.
Sec. 901.130 Incentives.
(a) A PHA that is designated high performer or standard performer
will be relieved of specific HUD requirements, effective upon
notification of high or standard performer designation.
(b) A PHA shall not be designated a mod-high performer and be
entitled to the applicable incentives unless it has been designated an
overall high performer.
(c) High-performing PHAs and RMCs that receive a grade of ``A'' on
each of the indicators for which they are assessed will receive a
Certificate of Commendation from the Department as well as special
public recognition.
(d) Representatives of high-performing PHAs may be requested to
serve on Departmental working groups that will advise the Department in
such areas as troubled PHAs and performance standards for all PHAs.
(e) Relief from any standard procedural requirements does not mean
that a PHA is relieved from compliance with the provisions of Federal
law and regulations or other handbook requirements. For example,
although a high or standard performer may be relieved of requirements
for prior HUD approval for certain types of contracts for services, it
must still comply with all other Federal and State requirements that
remain in effect, such as those for competitive bidding or competitive
negotiation (see 24 CFR 85.36):
(1) PHAs will still be subject to regular Independent Auditor (IA)
audits.
(2) Office of Inspector General (OIG) audits or investigations will
continue to be conducted as circumstances may warrant.
(f) The State/Area Office will have discretion to subject a PHA to
any requirement that would otherwise be omitted under the specified
relief, in accordance with Sec. 901.115(e).
Sec. 901.135 Memorandum of agreement.
(a) After consulting the independent assessment team and reviewing
the report identified in section 6(j)2(b) of the 1937 Act, a Memorandum
of Agreement (MOA), a binding contractual agreement between HUD and a
PHA, shall be required for each PHA designated as troubled and mod-
troubled. The scope of the MOA may vary depending upon the extent of
the problems present in the PHA, but shall include:
(1) Baseline data, which should be raw data but may be the PHA's
score in each of the indicators identified as a problem, or other
relevant areas identified as problematic;
(2) Annual and quarterly performance targets, which may be the
attainment of a higher grade within an indicator that is a problem, or
the description of a goal to be achieved, for example, the reduction of
rents uncollected to 6% or less by the end of the MOA annual period;
(3) Strategies to be used by the PHA in achieving the performance
targets within the time period of the MOA;
(4) Technical assistance to the PHA provided or facilitated by the
Department, for example, the training of PHA employees in specific
management areas or assistance in the resolution of outstanding HUD
monitoring findings;
(5) The PHA's commitment to take all actions within its control to
achieve the targets;
(6) Incentives for meeting such targets, such as the removal of
troubled or mod-troubled designation, fewer conditions placed on
grants, and Departmental recognition for the most improved PHAs;
(7) The consequences of failing to meet the targets, including such
sanctions as the imposition of budgetary limitations, declaration of
substantial default and subsequent actions, limited denial of
participation, suspension, debarment, or the imposition of operating
funding and modernization thresholds; and
(8) A description of the involvement of local public and private
entities, including PHA resident leaders, in carrying out the agreement
and rectifying the PHA's problems. A PHA shall have primary
responsibility for obtaining active local public and private entity
participation, including the involvement of public housing resident
leaders, in assisting PHA improvement efforts. Local public and private
entity participation should be premised upon the participant's
knowledge of the PHA, ability to contribute technical expertise with
regard to the PHA's specific problem areas and authority to make
preliminary/tentative commitments of support, financial or otherwise.
(b) A MOA shall be executed by:
(1) The PHA Board Chairperson and accompanied by a Board
resolution, or a receiver or other AME acting in lieu of the PHA Board;
(2) The PHA Executive Director, or a receiver- or other AME-
designated Chief Executive Officer;
(3) The Director, State/Area Office of Public Housing; and
(4) The appointing authorities of the Board of Commissioners,
unless exempted by the State/Area Office.
(c) The Department encourages the inclusion of the resident
leadership in MOA negotiations and the execution of the MOA.
(d) Upon designation of a large PHA (1250 or more units under
management) as troubled, the State/Area Office shall make a referral to
HUD Headquarters for appropriate recovery intervention and
[[Page 20381]]
the execution of an MOA by the Assistant Secretary of Public and Indian
Housing.
(e) A PHA will monitor MOA implementation to ensure that
performance targets are met in terms of quantity, timeliness and
quality.
(f) A PHA will be removed from troubled status upon a determination
by the State/Area Office that the PHA's assessment reflects an
improvement to a level sufficient to remove the PHA from troubled
status, or mod-troubled, i.e., a total weighted management assessment
score of 60% or more.
Sec. 901.140 Removal from troubled status and mod-troubled status.
(a) A PHA has the right to petition the State/Area Office for the
removal of a designation as troubled or mod-troubled.
(b) A PHA may appeal any refusal to remove troubled and mod-
troubled designation to the Assistant Secretary for Public and Indian
Housing in accordance with Sec. 901.125.
(c) The State/Area Office shall conduct a confirmatory review of a
PHA prior to the removal of troubled or mod-troubled designation.
Sec. 901.145 Improvement Plan.
(a) After receipt of the State/Area Office notification letter in
accordance with Sec. 901.120(b) or receipt of a final resolution of an
appeal in accordance with Sec. 901.125 or, in the case of an RMC,
notification of its indicator grades from a PHA, a PHA or RMC shall
correct any deficiency indicated in its management assessment within 90
calendar days.
(b) A PHA shall notify the State/Area Office of its action to
correct a deficiency. A PHA shall also forward to the State/Area Office
an RMC's report of its action to correct a deficiency.
(c) If the State/Area Office determines that a PHA or RMC has not
corrected a deficiency as required within 90 calendar days after
receipt of its final notification letter, the State/Area Office may
require a PHA, or a RMC through the PHA, to prepare and submit to the
State/Area Office an Improvement Plan within an additional 30 calendar
days:
(1) The State/Area Office shall require a PHA or RMC to submit an
Improvement Plan, which includes the information stated in paragraph
(d) of this section, for each indicator that a PHA or RMC scored a
grade ``F''.
(2) The State/Area Office may require, on a risk management basis,
a PHA or RMC to submit an Improvement Plan, which includes the
information stated in paragraph (d) of this section, for each indicator
that a PHA scored a grade D or E, as well as other performance and/or
compliance deficiencies as may be identified as a result of an on-site
review of the PHA's operations.
(d) An Improvement Plan shall:
(1) Identify baseline data, which should be raw data but may be the
PHA's score in each of the indicators identified as a problem in a
PHA's or RMC's management assessment, or other relevant areas
identified as problematic;
(2) Describe the procedures that will be followed to correct each
deficiency; and
(3) Provide a timetable for the correction of each deficiency.
(e) The State/Area Office will approve or deny a PHA's or RMC's
Improvement Plan, and notify the PHA of its decision. A PHA must notify
the RMC in writing, immediately upon receipt of the State/Area Office
notification, of the State/Area Office approval or denial of the RMC's
Improvement Plan.
(f) An Improvement Plan that is not approved will be returned to
the PHA with recommendations from the State/Area Office for revising
the Improvement Plan to obtain approval. A revised Improvement Plan
shall be resubmitted by the PHA or RMC within 30 calendar days of its
receipt of the State/Area Office recommendations.
(g) If a PHA or RMC fails to submit an acceptable Improvement Plan,
or to correct deficiencies within the time specified in an Improvement
Plan or such extensions as may be granted by HUD, the State/Area Office
will notify the PHA of its or the RMC's noncompliance. The PHA, or the
RMC through the PHA, will provide HUD its reasons for lack of progress
in submitting or carrying out the Improvement Plan within 30 calendar
days of its receipt of the noncompliance notification. HUD will advise
the PHA as to the acceptability of its reasons for lack of progress
and, if unacceptable, will notify the PHA that it will be subject to
sanctions provided for in the Annual Contributions Contract and HUD
regulations.
Sec. 901.150 PHAs troubled with respect to the program under section
14 (mod-troubled PHAs).
(a) PHAs that achieve a total weighted score of less than 60% on
indicator (2), modernization, may be designated as mod-troubled.
(b) PHAs designated as mod-troubled may be subject, under the
Comprehensive Grant Program, to a reduction of formula allocation or
other sanctions (24 CFR part 968, subpart C) or under the Comprehensive
Improvement Assistance Program to disapproval of new funding or other
sanctions (24 CFR part 968, subpart B).
Sec. 901.155 PHMAP public record.
The State/Area Office will maintain PHMAP files, including
certifications, the records of exclusion and modification requests,
appeals, and designations of status based on physical condition and
neighborhood environment, as open records, available for public
inspection for three years in accordance with any procedures
established by the Field Office to minimize disruption of normal office
operations.
Sec. 901.200 Events or conditions that constitute substantial default.
(a) The Department may determine that events have occurred or that
conditions exist that constitute a substantial default if a PHA is
determined to be in violation of Federal statutes, including but not
limited to, the 1937 Act, or in violation of regulations implementing
such statutory requirements, whether or not such violations would
constitute a substantial breach or default under provisions of the
relevant Annual Contributions Contract (ACC).
(b) The Department may determine that a PHA's failure to satisfy
the terms of a Memorandum of Agreement entered into in accordance with
Sec. 901.135 of this part, or to make reasonable progress to meet time
frames included in a Memorandum of Agreement, are events or conditions
that constitute a substantial default.
(c) The Department shall determine that a PHA that has been
designated as troubled and does not show significant improvement (10
point increase) in its PHMAP score within one year are events or
conditions that constitute a substantial default:
(1) A PHA shall be notified of such a determination in accordance
with Sec. 901.205(c).
(2) A PHA may waive, in writing, receipt of explicit notice from
the Department as to a finding of substantial default, and voluntarily
consent to a determination of substantial default. The PHA must concur
on the existence of substantial default conditions which can be
remedied by technical assistance, and the PHA shall provide the
Department with written assurances that all deficiencies will be
addressed by the PHA. The Department will then immediately proceed with
interventions as provided in Sec. 901.210.
(d) The Department may declare a substantial breach or default
under the ACC, in accordance with its terms and conditions.
[[Page 20382]]
(e) The Department may determine that the events or conditions
constituting a substantial default are limited to a portion of a PHA's
public housing operations, designated either by program, by operational
area, or by development(s).
Sec. 901.205 Notice and response.
(a) If information from an annual assessment, as described in
Sec. 901.100, a management review or audit, or any other credible
source indicates that there may exist events or conditions constituting
a substantial breach or default, the Department shall advise a PHA of
such information. The Department is authorized to protect the
confidentiality of the source(s) of such information in appropriate
cases. Before taking further action, except in cases of apparent fraud
or criminality, and/or in cases where emergency conditions exist posing
an imminent threat to the life, health, or safety of residents, the
Department shall afford the PHA a timely opportunity to initiate
corrective action, including the remedies and procedures available to
PHAs designated as ``troubled PHAs,'' or to demonstrate that the
information is incorrect.
(b) In any situation determined to be an emergency, or in any case
where the events or conditions precipitating the intervention are
determined to be the result of criminal or fraudulent activity, the
Assistant Secretary is authorized to intercede to protect the
residents' and the Department's interests by causing the proposed
interventions to be implemented without further appeals or delays.
(c) Upon a determination or finding that events have occurred or
that conditions exist that constitute a substantial default, the
Assistant Secretary shall provide written notification of such
determination or finding to the affected PHA. Written notification
shall include, but need not necessarily be limited to:
(1) Identification of the specific covenants, conditions, and/or
agreements under which the PHA is determined to be in non-compliance;
(2) Identification of the specific events, occurrences, or
conditions that constitute the determined noncompliance;
(3) Citation of the communications and opportunities to effect
remedies afforded pursuant to paragraph (a) of this section;
(4) Notification to the PHA of a specific time period, to be not
less than 10 calendar days, except in cases of apparent fraud or other
criminal behavior, and/or under emergency conditions as described in
paragraph (a) of this section, nor more than 30 calendar days, during
which the PHA shall be required to demonstrate that the determination
or finding is not substantively accurate; and
(5) Notification to the PHA that, absent a satisfactory response in
accordance with paragraph (d) of this section, the Department will take
control of the PHA, using any or all of the interventions specified in
Sec. 901.210, and determined to be appropriate to remedy the
noncompliance, citing Sec. 901.210, and any additional authority for
such action.
(d) Upon receipt of the notification described in paragraph (c) of
this section, the PHA must demonstrate, within the time period
permitted in the notification, factual error in the Department's
description of events, occurrences, or conditions, or show that the
events, occurrences, or conditions do not constitute noncompliance with
the statute, regulation, or covenants or conditions to which the PHA is
cited in the notification.
Sec. 901.210 Interventions.
(a) Interventions under this part (including an assumption of
operating responsibilities) may be limited to one or more of a PHA's
specific operational areas (e.g., maintenance, modernization,
occupancy, or financial management or to a single development or a
group of developments). Under this limited intervention procedure, the
Department could select, or participate in the selection of, an AME to
assume management responsibility for a specific development, a group of
developments in a geographical area, or a specific operational area,
while permitting the PHA to retain responsibility for all programs,
operational areas, and developments not so designated.
(b) Upon determining that a substantial default exists under this
part, the Department may initiate any interventions deemed necessary to
maintain decent, safe, and sanitary dwellings for residents. Such
intervention may include:
(1) Providing technical assistance for existing PHA management
staff;
(2) Selecting or participating in the selection of an AME to
provide technical assistance or other services up to and including
contract management of all or any part of the public housing
developments administered by a PHA;
(3) Assuming possession and operational responsibility for all or
any part of the public housing administered by a PHA; and
(4) The provision of intervention and assistance necessary to
remedy emergency conditions.
(c) HUD may take the actions described in this part sequentially or
simultaneously in any combination.
Sec. 901.215 Contracting and funding.
(a) Upon a declaration of substantial default or breach, and
subsequent assumption of possession and operational responsibility, the
Department may enter into agreements, arrangements, and/or contracts
for or on behalf of a PHA, or to act as the PHA, and to expend or
authorize expenditure of PHA funds, irrespective of the source of such
funds, to remedy the events or conditions constituting the substantial
default.
(b) In entering into contracts or other agreements for or on behalf
of a PHA, the Department shall comply with requirements for competitive
procurement consistent with 24 CFR 85.36, except that, upon
determination of public exigency or emergency that will not permit a
delay, the Department can enter into contracts or agreements on a non-
competitive basis, consistent with the standards of 24 CFR 85.36(d)(4).
Sec. 901.220 Resident participation in competitive proposals to manage
the housing of a PHA.
(a) When a competitive proposal to manage the housing of a PHA in
substantial default is solicited in a Request for Proposals (RFP)
pursuant to section 6(j)(3)(A)(i) of the 37 Act, the RFP, in addition
to publishing the selection criteria, will:
(1) Include a requirement for residents to notify the Department if
they want to be involved in the selection process; and
(2) Include a requirement for the PHA that is the subject of the
RFP to post a notice and a copy of the RFP in a prominent location on
the premises of each housing development that would be subject to the
management chosen under the RFP, for the purposes of notifying affected
residents that
(i) Invites residents to participate in the selection process; and
(ii) Provides information, to be specified in the RFP, on how to
notify the Department of their interest.
(b) Residents must notify the Department by the RFP's application
due date of their interest in participating in the selection process.
In order to participate, the total number of residents that notify the
Department must equal at least five percent of the residents, or the
notification of interest must be from an organization or
[[Page 20383]]
organizations of residents whose membership must equal at least five
percent of the PHA's residents.
(c) If the required percentage of residents notify the Department,
a minimum of one resident may be invited to serve as an advisory member
on the evaluation panel that will review the applications in accordance
with applicable procurement procedures. Resident advisory members are
subject to all applicable confidentiality and disclosure restrictions.
Sec. 901.225 Resident petitions for remedial action.
The total number of residents that petition the Department to take
remedial action pursuant to sections 6(j)(3)(A)(i) through (iv) of the
1937 Act must equal at least five percent of the residents, or the
petition must be from an organization or organizations of residents
whose membership must equal at least five percent of the PHA's
residents.
Sec. 901.230 Receivership.
(a) Upon a determination that a substantial default has occurred
and without regard to the availability of alternate remedies, the
Department may petition the court for the appointment of a receiver to
conduct the affairs of the PHA in a manner consistent with statutory,
regulatory, and contractual obligations of the PHA and in accordance
with such additional terms and conditions that the court may provide.
The court shall have authority to grant appropriate temporary or
preliminary relief pending final disposition of any petition by HUD.
(b) The appointment of a receiver pursuant to this section may be
terminated upon the petition to the court by the PHA, the receiver, or
the Department, and upon a finding by the court that the circumstances
or conditions that constituted substantial default by the PHA no longer
exist and that the operations of the PHA will be conducted in
accordance with applicable statutes and regulations, and contractual
covenants and conditions to which the PHA and its public housing
programs are subject.
Sec. 901.235 Technical assistance.
(a) The Department may provide technical assistance to a PHA that
is in substantial default.
(b) The Department may provide technical assistance to a troubled
or non-troubled PHA if the assistance will enable the PHA to achieve
satisfactory performance on any PHMAP indicator. The Department may
provide such assistance if a PHA demonstrates a commitment to undertake
improvements appropriate with the given circumstances, and executes an
Improvement Plan in accordance with Sec. 901.145.
(c) The Department may provide technical assistance to a PHA if
without abatement of prevailing or chronic conditions, the PHA can be
projected to be designated as troubled by its next PHMAP assessment.
(d) The Department may provide technical assistance to a PHA that
is in substantial default of the Annual Contributions Contract.
(e) The Department may provide technical assistance to a PHA whose
troubled designation has been removed and where such assistance is
necessary to prevent the PHA from being designated as troubled within
the next two years.
Date: February 26, 1996.
Kevin E. Marchman,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 96-10956 Filed 5-3-96; 8:45 am]
BILLING CODE 4210-33-P
