Changes to the Public Housing Assessment System (PHAS): Capital Fund Scoring Notice

SUMMARY:

This notice provides additional information to public housing agencies (PHAs) and members of the public about HUD's process for issuing scores under the Capital Fund program indicator of the Public Housing Assessment System (PHAS).

DATES:

Effective Date: March 25, 2011.

Comment Due Date: April 25, 2011.

ADDRESSES:

Interested persons are invited to submit comments on this notice to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Communications must refer to the above docket number and title. There are two methods for submitting public comments. All submissions must refer to the above docket number and title.

1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW, Room 10276, Washington, DC 20410-0500.

2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

Note:

To receive consideration as public comments, comments must be submitted through one of the two methods specified above. Again, all submissions must refer to the docket number and title of the rule.

No Facsimile Comments. Facsimile (FAX) comments are not acceptable.

Public Inspection of Public Comments. All properly submitted comments and communications submitted to HUD will be available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the above address. Due to security measures at the HUD Headquarters building, an advance appointment to review the public comments must be scheduled by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Information Relay Service, toll-free, at 800-877-8339. Copies of all comments submitted are available for inspection and downloading at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Claudia Yarus, Department of Housing and Urban Development, Office of Public and Indian Housing, Real Estate Assessment Center (REAC), 550 12th Street, SW., Suite 100, Washington, DC 20410 at 202-475-8830 (this is not a toll-free number). Persons with hearing or speech impairments may access this number through TTY by calling the toll-free Federal Information Relay Service at 800-877-8339. Additional information is available from the REAC Internet site at http://www.hud.gov/offices/reac/.

SUPPLEMENTARY INFORMATION:

I. Purpose of This Notice

The purpose of this notice is to provide information about the scoring process for PHAS indicator #4, Capital Fund program. The purpose of the Capital Fund program assessment is to examine the period of time it takes a PHA to obligate the funds provided to a PHA from the Capital Fund program under section 9(j) of the 1937 Act (42 U.S.C. 1437g(9)(j)), and to occupy units. Funds from the Capital Fund program under section 9(d) of the 1937 Act (42 U.S.C. 1437g(d)(2)) do not include HOPE VI program funds.

This indicator is not applicable for PHAs that choose not to participate in the Capital Fund program under section 9(d) of the 1937 Act. This indicator is applicable on a PHA-wide basis, and not to individual projects. The Capital Fund program indicator is based on a maximum of 10 points.

The assessment required under the PHAS Capital Fund program indicator will be performed through analysis of: (1) Obligated amounts in HUD's electronic Line of Credit Control System (eLOCCS) (or its successor) for all Capital Fund program grants that were open during a PHA's assessed fiscal year; and (2) the PHA's occupancy rate as measured at the end of the PHA's fiscal year, which is calculated by dividing the total occupied assisted, special use, and non-assisted units by the total ACC units less the total uninhabitable units as reflected in the Inventory Management System/Public Housing Information Center (PIC) (or its successor). Of the total 100 points available for a PHAS score, a PHA may receive up to 10 points based on the Capital Fund program indicator. Scoring for this indicator will be dependent on the amount of time it takes a PHA to obligate its Capital Fund grant(s), as well as the PHA's occupancy rate. If a PHA has no obligation end dates in the assessed fiscal year, and does not have any § 9(j) of the 1937 Act sanctions against it, the points for that subindicator will be redistributed to the remaining subindicator.

II. Transition to Asset Management and Frequency of Capital Fund Program Assessments

The number of units in a PHA's Low-Rent program and the PHAS designation for small PHAs will determine the frequency of Capital Fund program assessments during and after the transition to asset management. PHAs with less than 250 public housing units will receive a PHAS assessment, based on its PHAS designation, as follows:

(1) A small PHA that is a high performer will receive a PHAS assessment every 3 years;

(2) A small PHA that is a standard or substandard performer will receive a PHAS assessment every other year; and

(3) All other small PHAs will receive a PHAS assessment every year, including a PHA that is designated as troubled or Capital Fund troubled in accordance with § 902.75.

In the baseline year, every PHA will receive an overall PHAS score and in all four of the PHAS indicators: physical condition; financial condition; management operations; and Capital Fund program. This will allow a baseline year for the small deregulated PHAs.

III. Subindicators

A. Subindicators of Capital Fund Program Indicator. The two subindicators of the Capital Fund program indicator are:

• Timeliness of fund obligation; and
• The PHA's occupancy rate.

B. Points for Capital Fund Program Indicator. This indicator measures the statutory requirements for the Capital Fund program.

Subindicator #1, Timeliness of Fund Obligation. This subindicator examines the period of time it takes for a PHA to obligate funds from the Capital Fund program under section 9(j)(1) of the 1937 Act (42 U.S.C. 1437g(9)(j)). HUD may extend the period of time for the obligation of funds in accordance with 24 CFR 905.120 and section 9(j)(2) of the 1937 Act. Points are awarded on the following bases:

The PHA will earn the full 5 points if it has obligated 90 percent or more of the grant amount for all of its grants on its obligation end date, or on the extended obligation end date, for all open Capital Fund program grants that have obligation end dates during the assessed fiscal year and does not have any grants that have been sanctioned pursuant to § 9(j) of the 1937 Act during the assessed fiscal year.

The PHA will earn 0 points if it has obligated less than 90 percent of the grant amount for any of its open grants on the obligation end date during the assessed fiscal year or is undergoing sanctions as per Section III of this notice.

If the PHA receives 0 points for this subindicator, it is not eligible for points for subindicator # 2.

Subindicator #2, Occupancy rate. This subindicator measures the PHA's occupancy rate as measured at the end of the PHA's fiscal year, which is calculated by dividing the total occupied assisted, HUD approved special use, and non-assisted units by the total ACC units less the total uninhabitable units as reflected in the Inventory Management System/PIC, or its successor. This information will be calculated as of the end of the PHA's fiscal year. A PHA will receive 2 points if it has an adjusted occupancy rate of at least 93 percent but not more than 96 percent. A PHA will receive 5 points if it has an adjusted occupancy rate of 96 percent or more.

IV. Sanctions

Sanctions for the obligation of funds are in accordance with 24 CFR 905.120. If a PHA has been sanctioned during the assessment period, the PHA will receive 0 points for the timeliness of fund obligation.

V. Elements of Scoring

A. Points and Threshold. The Capital Fund program indicator is based on a maximum of 10 points. In order to receive a passing score under this indicator, a PHA must achieve at least 5 points or 50 percent of the available points under this indicator.

B. Scoring Elements. The Capital Fund program indicator score provides an assessment of a PHA's ability to obligate Capital Fund program funds in a timely manner, as well as a PHA's occupancy rate. The computation of the score under this PHAS indicator utilizes data obtained through analysis of obligated amounts in HUD's eLOCCS (or its successor) for all Capital Fund program grants that were open during the assessed fiscal year and PIC (or its successor) data as of the PHA's assessed Fiscal Year End. Scores are first calculated for each subindicator. From the two subindicator scores, an indicator score is then calculated.

C. Example of Score Computations. The indicator score equals the sum of the subindicator scores, described in Section II, paragraph B.

D. PHA Responsibility. PHAs are responsible for ensuring that their Capital Fund program information is submitted to eLOCCS and occupancy information to PIC by the submission due date. A PHA may not appeal its PHAS and/or Capital Fund program score based on the fact that it did not submit its Capital Fund program information to eLOCCS and occupancy information to PIC by the submission due date. PHAs shall retain supporting documentation for the Capital Fund program for at least 3 years.