Asset Management Update

1
Asset Management Update

• Julie Miles, Financial Analyst
• HUD-Kansas City, KS
• 913-551-5529

2
Agenda

• New FDS
• New Proposed PHAS
• Asset Management Delay PHAs With 250-400 Units

3
New FDS Format

• AMP Level Financial Reporting
• Operating Fund and Capital Fund Reporting at AMP
  Level vs. PHA Level
• 1 Balance Sheet per AMP Operating Fund
  Capital Fund Combined
• 2 Income Statements per AMP Operating Fund
  Capital Fund Separate
• New Columns
• AMP COCC Columns Replace Low-Rent and CFP
  Columns
• Elimination Column Subtracts Internal COCC/AMP
  Transactions from Entity-Wide Totals
• New 5-Digit Line Number Format for Revenues
  Expenses

4
New FDS Line Items Detail Links

• FDS Line Definition Guide October 2008
• http//www.hud.gov/offices/reac/products/fass/fass
  _pdf/fds_ln_def_gd_2008.pdf
• Fee Revenues Fee Expenses Line Items
• Expense Line Items Other Operating-Administrative
  , Sewer, Insurance Premiums
• Memo Accounts Excess Cash CFP Expenditure Data
• Ordinary Maintenance Operations-Contract Costs
  Garbage Trash Removal, Heating Cooling, Snow
  Removal, Elevator Maintenance, Landscape
  Grounds, Unit Turnaround, Electrical, Plumbing,
  Extermination, Janitorial, Routine Maintenance,
  Miscellaneous

5
Transition Year Due Dates

• Unaudited Normally Due 2 Months After FYE
• 6/30/08 , 9/30/08 12/31/08 Due 4/13/09
• 3/31/09 Due 6/30/09
• Federal Register Vol. 73, No. 163, 8/21/08 Docket
  FR-5227-N-01
• Audited
• Expect System to Be Open in April
• Due Dates Will Be Announced Once System Open
• Electronically to REAC
• Paper Copy to Field Office Financial Analyst

6
New Proposed PHAS

• Starting FYE 6/30/08
• First Year Transitional Scores
• Proposed Rule http//www.hud.gov/offices/reac/prod
  ucts/phas/phasprule.pdf
• First Year CFP Bonus Based on Previous PHAS Score
• Scoring
• 30 Physical Condition
• 20 Financial Condition
• 40 Management Operations
• 10 CFP Management
• No Resident Survey

7
Proposed Physical Condition

• Still 30 points
• Scored at AMP Level Instead of Development
• Same UPCS Inspection Criteria
• Frequency Depends on AMP ScoreNot PHA Score

8
Proposed Financial Condition

• 20 points
• Scored at AMP Level
• Most Indicators Moved to Management Operations
• Based on Unaudited Financial Submission
  Adjusted for Audited Financial Submission
• Penalties
• Significant Change Between Unaudited Audited
  Financial Statements
• Qualified, Adverse of Disclaimer of Audit Opinion
• Audit Findings

9
Proposed Financial Condition (continued)

• 3 Sub-Indicators
• (1) Quick Ratio (QR)
• Formerly Current Ratio
• Current Assets Current Liabilities
• 9 points
• (2) Months Expendable Net Assets Ratio (MENAR)
• Formerly Months Expendable Fund Balance (MEFB)
• (Current Assets - Current Liabilities) Average
  Monthly Operating Expenses
• 9 points
• (3) Debt Service Coverage Ratio (DSCR)
• Adjusted Operating Income Annual Debt Service
• If No Long-Term Debt, PHA Gets All Points
• 2 points

10
Proposed Management Operations

• 40 points
• Scored at AMP Level
• Scoring Adjustments 1 Point Each
• Physical Condition Projects 28 Years Older
• Neighborhood Environment 40 or More Families
  Income Below Poverty Rate on Latest Census

11
Proposed Management Operations (continued)

• HUD On-site Review Instead of PHA
  Self-Certification
• Includes Items Previously Scored Under Financial
• 7 Sub-Indicators
• (1) General Appearance Security
• 1.1 Appearance Market Appeal (5 points)
• 1.2 Security (1 point)
• (2) Follow-Up Monitoring of Project Inspections
• 2.1 Exigent Health Safety Deficiencies (not
  scored)
• 2.2 Lead-Based Paint Inspection Deficiencies (not
  scored)

12
Proposed Management Operations (continued)

• 7 Sub-Indicators (continued)
• (3) Maintenance Modernization
• 3.1 Unit Inspections (1 point)
• 3.2 Work Orders (3 points)
• 3.3 Preventive Maintenance (1 point)
• 3.4 Energy Conservation/Utility Consumption (1
  point)
• 3.5 Modernization (not scored)
• (4) Financial Management
• 4.1 Percentage of Accounts Payable (4 points)
• 4.2 Rent Collection (4 points)
• 4.3 Budget Management (not scored)
• 4.4 Procurement (not scored)

13
Proposed Management Operations (continued)

• 7 Sub-Indicators (continued)
• (5) Leasing Occupancy
• 5.1 Vacancy Rate (16 points)
• 5.2 Turnaround Time (2 points)
• 5.3 Occupancy Review (not scored)
• (6) Tenant/Management Relations
• 6.1 Economic Self-Sufficiency (1 point)
• 6.2 Resident Involvement in Project
  Administration (1 point)
• (7) General Management Practices
• 7.1 Management Review Findings (not scored)
• 7.2 Other Prior Review Findings (not scored)
• 7.3 Insurance (not scored)

14
Proposed CFP Management

• 10 points
• Scored at PHA-level, not AMP
• Time to Obligate Expend CFP for Grants with
  Fund Balances During Assessed Period

15
Asset Management Delay

• PIH Notice 2008-16
• 2008 Appropriations Act
• Section 225
• PHAs 250-400 PH Units
• Elect to Delay AM Implementation 1 Year
• Report FDS at PHA-Level, not AMP-Level
• Submit OpSub at AMP-Level, not PHA-Level
• Excludes Stop-Loss
• Assume Provision Will Continue in 2009
• If Not Continued, Guidance Will Be Provided