Economía PIB

Using its MTW flexibility, AHA will continue to make business enhancements that improve the ongoing operation and economic viability of the agency and the ongoing operation of AHA-owned communities. These activities include but are not limited to enhancements to policies, business systems, and enhancements in the areas of technology and financial reporting and analysis.

Supporting Activities

A1. Asset Management Under The New Operating Subsidy Rule

For over ten years, AHA has been transforming the agency from a public sector/government public housing model to a private sector real estate business model. As a result, AHA has become a diversified real estate company, with a public mission and purpose. The Moving to Work designation and regulatory relief has allowed AHA to be more nimble in the Atlanta real estate market to leverage real estate opportunities and private sector investment opportunities. Moreover, the MTW relief has allowed AHA to become a more effective and efficient business enterprise. Since 2001, all of AHA-owned public housing properties are managed by professional private management companies, including their day to day management, maintenance and capital improvement. AHA commenced decentralizing its operations in FY1996 and as of FY2002 began preparing property-based financial statements.

Since the fall of 1994, AHA has begun the process of transforming and revitalizing all of its distressed public housing properties to healthy mixed-income communities. All of the revitalization has been implemented through public/private partnerships, resulting in the creation of market competitive communities, with a seamless affordable component. These new mixed-income communities are owned by public/private partnerships, with the private partner, as the managing general partner.

To date, 12 of the family communities have undergone transformation and one family community has been sold, leaving 12 family communities and 17 elderly/disabled communities to be transformed. Such additional revitalizations are the cornerstones of AHA’s MTW Business Plan.

Under the New Operating Subsidy Rule, HUD is establishing a new regulatory structure related to project-based accounting, project-based management and asset management, including changes that will limit the property management and asset management fees that can be charged to the properties by the PHA’s Central Office. HUD’s approach to the New Operating Subsidy Rule methodology focuses strictly on property operations without regard to the agency’s overall strategy and

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without considering the full life cycle of the property. The New Operating Subsidy Rule states that the funding methodology reflects “the costs of services and materials needed by a well-run PHA to sustain the project.” Given AHA’s heavy focus on repositioning and revitalizing its properties, AHA will continue to incur expenditures associated with comprehensive revitalization, including relocation of families, demolition of properties, development related activities and human services support for affected families. None of these expenditures was contemplated by the Harvard Study, the New Rule, or HUD’s implementing regulations and notices. The Harvard Study assumes that the properties are in market competitive conditions and that an agency is asset managing such properties. It is essential that AHA continues to maintain the full flexibility (financial and other) provided under its MTW Agreement with HUD.

Throughout its MTW Agreement period, AHA will continue to exercise its regulatory flexibility as to how it has implemented project-based accounting, project-based management and asset management systems as contemplated under HUD’s recently adopted Asset Management/Project Based Accounting Rule.

A2. Project-based Accounting and Financial Systems/Quarterly Financial Statements by Business Line. During FY 2007, AHA continued to refine its project-based accounting and management system. With this system, property level budgets and financial statements are available for each AHA-owned property. In FY 2008, further improvements will be made to AHA’s information technology/financial reporting environment to expand beyond the property level. These and other enhancements to AHA’s ORACLE automated system will also allow AHA to produce quarterly financial statements across the entire organization for all program operations.

A3. Fee-for-Service Methodology. During FY 2006, HUD approved AHA’s request to use its new “fee-for-service” methodology for allocating costs to HUD grants and programs for administration and overhead. This new methodology uses a fee-for-service approach to replace the cumbersome salary allocation systems traditionally found in public housing agencies. The fee-for-service approach aligns with the purposes of HUD’s MTW program which include “the flexibility to design and test various approaches for providing and administering housing assistance that reduce cost and achieve greater effectiveness in Federal expenditures.” AHA’s fee-for-service system charges and recovers AHA’s corporate costs associated with administering HUD programs and grants. Under this system, AHA charges each property, program, or grant a fixed rate for administration and will continue the implementation of this methodology throughout the life of its MTW Agreement. AHA will continue to implement and refine the methodology in FY 2008.

A4. Utility Allowance Waiver. Based on the existing condition of the AHA real estate portfolio including aging building infrastructures, minimum insulation and poor air circulation, AHA will consider adjusting the tenant utility allowances to account for the utility usage required to maintain quality of life. The physical condition and obsolescence of the distressed public housing developments are key factors supporting the Quality of Life Initiative and the decision to demolish the majority of the family properties. AHA is also dedicated to improving quality of life for residents in its longer-term hold properties. During FY 2008, AHA will develop and pilot alternative methods for encouraging energy efficient living while

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reducing the burden of utility expenses on residents living at properties with obsolete systems and infrastructure. The changes to the utility allowances will include an examination of the materiality of excess utility revenue, the associated administrative costs for maintaining a system for charging excess utilities, and the impact of excess utility charges on the total tenant payment given the increase to the average rent.

A5. Energy Performance Contracting. In light of the dynamic impact of AHA’s revitalization program and Quality of Life Initiative on the ongoing operations of AHA-owned public housing assisted properties, AHA will consider establishing and managing its own energy performance program. This program may include, but will not be limited to, self-financing and implementing additional improvements at properties that AHA will continue to own and operate on a long-term basis.

A6. Procurement Enhancements. AHA will continue to comply with procurement regulations at 24 C.F.R. 85.36 as modified by other applicable regulations and by AHA’s MTW Agreement and related agreements, implementation protocols, and applicable waivers. However, AHA will continue to make enhancements to its procurement policies and procedures to improve efficiency and effectiveness. AHA set its micro-purchasing level at $5,000 and will utilize contracts with terms in excess of five years for certain strategic services.

A7. Financial Operations. During FY 2008, AHA will continue to combine the income from three programs into a Single Fund in carrying out the activities of its MTW Agreement and related Plans and implementation protocols. Low income Operating Subsidy and related income from property operations, Housing Choice Voucher Income, and Capital Fund Program Income will be used interchangeably for eligible MTW purposes. AHA will also use other program funds such as HOPE VI, and Development Grants, to carry out activities related to those grants which are aligned with AHA’s Business Plan. Sources and amounts of funding for AHA’s FY 2008 consolidated budget statement are included in Appendix O, and are further explained below.

Low income Operating Subsidy and Related Income. In 2006 HUD changed the manner in which it funds Public Housing Agencies (PHAs) and converted to a calendar year. Since AHA operates on a fiscal year from July 1 through June 30, AHA’s Fiscal Year crosses two federal funding years.

HUD implemented a new Low income Operating Subsidy funding methodology beginning in 2007. This new funding methodology introduced project (property) based calculations for determining HUD subsidy. AHA submitted the calculation of its Low income Operating Subsidy for Calendar Year 2007 in September 2006. HUD is using this calculation as the basis for funding January through December 2007, which includes the first six months of AHA’s Fiscal Year 2008. Based on this calculation and after adjusting for a HUD-imposed $2.9 million transitional funding reduction, AHA estimates that it will be eligible for $37.8 million in 2007 operating and utility subsidy before proration.

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receive approximately $32 million in low income operating subsidy for 2007, of which $16 million will be available for AHA’s FY 2008.

The second half of AHA’s FY2008 runs from January 1, 2008 through June 30, 2008. Calculation of this subsidy will not be submitted to HUD until September 2007 and will be based on property occupancy for AHA’s FY2007, adjusted for properties coming off line. At this time, HUD has published neither the monthly Property Allowance Levels (PEL) nor the proration factors for 2008. AHA does know, however, that HUD will not impose a transitional funding reduction in 2008. A rough estimate of total FY 2008 Operating subsidy is $28.6 million, with $14.3 million available in AHA’s FY 2008. Combined with the funds for the last six months of 2007, this should provide AHA with $30 million in Operating Funding for FY 2008.

Housing Choice Voucher Related MTW Income. AHA estimates that it will receive $119.7 million in Housing Choice Voucher Related income in the MTW Block Grant in FY2008. This funding was calculated using the methodology outlined in Appendix A of AHA’s MTW Agreement. Because HUD now funds on a calendar year basis, a separate calculation was used for the first and the last six months of AHA’s Fiscal Year. The first six months (July – December 2007) reflect MTW Voucher funding rates identified by HUD for 2007 including a 94.6% proration and with no inflation adjustment. The last six months were estimated using the 2007 MTWPUC (MTW Per Unit Count) and assumes a no inflation adjustment and the same level of proration.

Capital Funding Program Related MTW Income. Based on current funding methodology, AHA estimates that it will receive a $12.3 million grant award from the Capital Funding Program (CFP) in the HUD’s Federal Fiscal Year 2007 MTW Block Grant. This is a reduction of $0.8 million resulting primarily from taking Grady Homes offline and removing those units from the calculation of this year’s CFP grant award. The Consolidated Budget is included in Appendix L and the Capital Planning Budget is included in Appendix M.

Replacement Housing Factor Funds. AHA will use Replacement Housing Factor (RHF) grants for Fiscal Years 2003- 2007 as part of the HOPE VI revitalizations of McDaniel Glenn and Grady Homes. The RHF Plan that identifies the proposed use of these funds has been provided to HUD under separate cover.

Housing Choice Budget Utilization Benchmark. AHA’s MTW Housing Choice Budget Utilization benchmark requires that the expenditure of fiscal year Housing Choice Annual Budget allocation for MTW vouchers utilized for MTW eligible activities be greater than or equal to the target benchmark of 98%. In its FY 2007 Implementation Plan, AHA added clarifying language for this benchmark. As part of the FY 2008 Implementation Plan, AHA has included further clarifying language that the 98% expenditure rate only applies to vouchers that are fully funded during AHA’s entire fiscal year, and that any new vouchers received intermittently during the fiscal year are excluded from the 98% requirement until the following fiscal year until such time that a 12-month period has elapsed (see Appendix Q). AHA is making this clarification in light of changes that HUD has made in funding vouchers based on a calendar year versus a fiscal year.

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A8. Enhanced Accessibility Initiative. AHA is committed to making its facilities and programs accessible to persons with disabilities. AHA's commitment is reflected in its Accessibility Policies included in its Statement of Corporate Policies Governing the Leasing and Residency of Assisted Apartments (Statement of Corporate Policies) – (Appendix N). AHA will continue to enhance its accessibility efforts in FY 2008, including continuation of the following strategies: 1) continued implementation of AHA’s transition plan for ongoing physical accessibility improvements; 2) continued oversight of the reasonable accommodations process and related activities to optimize positive outcomes of disabled applicants and residents; 3) developing and implementing new procedures that will improve AHA’s ability to effectively address the needs of applicants and residents with disabilities; 4) developing and implementing a proactive strategy to enhance the effective communication with the families we serve; 5) implementation of additional strategies for enhanced resident/participant awareness of their disability-related rights; 6) expanded training program for employees of AHA and its private management partners regarding disability-related concerns; 7) exploring and implementing methods by which persons with mobility impairments may learn of opportunities for apartment units that are more accessible to them and 8) assessment of the needs of mobility-impaired applicants and residents and developing plans to address identified needs. As part of AHA's strategy for accomplishing these efforts, AHA will implement activities pursuant to a voluntary compliance agreement with HUD, a four-year agreement which became effective on March 15, 2007.

AHA identifies and prioritizes the needs of eligible residents and applicants who require the accessibility features of a UFAS- Accessible Unit in a centralized database according to the date and time of a resident’s transfer request, or the date and time or ranking by lottery, as applicable, of an applicant’s application. This database (“UFAS-Accessible Unit Database”) maintains data on such residents and applicants for both AHA-Owned Affordable Communities and privately owned, market rate Mixed-Income Communities (Signature Communities). The UFAS-Accessible Unit Database was established to provide 1) direct assistance to residents and applicants with disabilities, upon request, in the application for an available UFAS-Accessible Unit in any Affordable Community or Signature Community; 2) a process for notifying and referring residents from the database to the Affordable Communities and Signature Communities with openings on each community’s respective site-based UFAS Waiting Lists; 3) a process for notifying and referring applicants from the database to the Affordable Communities and Signature Communities with openings on each community’s respective site-based UFAS Waiting Lists; and 4) a method for monitoring the maximization of occupancy of AHA-assisted units that are UFAS- Accessible Units, in Affordable Communities and Signature Communities, by residents who require the accessibility features of those units. Complementing the UFAS-Accessible Unit Database, each Affordable Community and each Signature Community will maintain a separate, site-based UFAS-Accessible Unit Waiting List for eligible applicants and residents with disabilities who require UFAS-Accessible Units. At least five percent (5%) of all AHA-assisted units in Signature Communities will be available to eligible and qualified applicants and residents with disabilities who require UFAS- Accessible Units, provided the AHA-assisted unit count remains within the limits established by the governing legal and financial agreements for each property should the percentage exceed five (5%). The implementation protocols as they apply specifically to the Affordable Communities and the Signature Communities are outlined in Part II, Article Five of the Statement of Corporate Policies.

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A9. Corporate Policies Governing Eligibility, Occupancy, and Program Administration

Statement of Corporate Policies Governing the Leasing and Residency of Assisted Apartments (Statement of Corporate Policies). The Board of Commissioners adopted the Statement of Corporate Policies on June 16, 2004, and approved three subsequent revisions of this policy document; the first on April 25, 2005, the second on December 12, 2005, and the third on April 25, 2007.

Substantive provisions proposed for approval in April 2007 will include amendments clarifying AHA’s policies that demonstrate its ongoing commitment to federal requirements administered by HUD’s Office of Fair Housing and Equal Opportunity. Such amendments will incorporate changes in the admissions, occupancy and transfer policy; reasonable accommodation policy; effective communication policy; pet policy; dwelling lease addendum requirements; and grievance procedures. Other key provisions of the Statement of Corporate Policies will include Federal Limited English Proficiency requirements, as applicable to AHA’s jurisdiction; clarifications of existing policies related to self-employment income, the treatment of income from assets, and the general definition of Family; a policy that will permit the establishment of standard deductions for determining adjusted annual income; and the elimination of interim re-certifications under certain circumstances; expanded timeframes for re-certifications. (A copy of the Statement of Corporate Policies is included in Appendix N.)

Administrative Plan Governing the Housing Choice Voucher Program (Administrative Plan). The Board of Commissioners adopted the Administrative Plan on August 25, 2004, and approved five subsequent amendments of this policy document; the first on April 25, 2005, the second on September 9, 2005, the third on December 12, 2005, the fourth on March 28, 2006, and the fifth on April 25, 2007.

Key provisions of the Administrative Plan will include Federal Limited English Proficiency requirements, as applicable to AHA’s jurisdiction; clarifications of existing policies related to self-employment income, the treatment of income from assets, and the general definition of Family; a policy that will permit the establishment of standard deductions for determining adjusted annual income; and the elimination of interim re-certifications under certain circumstances; expanded timeframes for re-certifications.

In addition, certain revisions of the Administrative Plan will address policies that are unique to the Housing Choice Program. These program-related revisions will include language that clarifies that separate payment standards can be implemented within submarket areas within AHA’s jurisdiction; sets forth the date when changes in payment standards will go into effect