CAPITAL FUND PROGRAM - PowerPoint Presentation

Slide1

CAPITAL FUND PROGRAM

From an Operational StandpointSlide2

Office of Capital ImprovementsThe PIH Office of Capital Improvements administers the Capital Fund. Created by the Quality Housing and Work Responsibility Act (QHWRA) in 1998, the Capital Fund provides funds, annually, to Public Housing Agencies (PHAs) for the development, financing, and modernization of public housing developments and for management improvements.Slide3

References

Capital Fund Final Rule (Combined the former legacy programs covering public housing modernization programs)

24 CFR 905 – The Public Housing Capital Fund Program

New:

The Capital Fund GuidebookSlide4

Types of Capital Funds

Formula

Replacement Housing Factor (RHF) pre July 1, 2013

Demolition and Disposition Transitional Funding (DDTF)

Emergency and Non-Presidentially Declared Natural Disaster

Emergency Safety and Security

Capital Fund Education and Training Community Facilities (CFCF)Slide5

Demolition and Disposition Transitional Funding (DDTF)

PHAs that remove ACC units on or after July 1, 2013 are eligible for 5 years of DDTF. (CFP Final Rule)

DDTF funds are added to the Capital Fund Program Formula grant and are considered one grant.

Any eligible formula grant activities. Slide6

PLANNING

Form HUD 50075-1 (Annual Statement / Performance and Evaluation Report)

Form HUD 50075-2 (Five Year Action Plan)Slide7

Tools

These tools are used to form the basis for the PHA Strategic Planning and the establishment of goals and objectives contained in the PHA Agency Plan.

Physical Needs Assessment

Energy Audit

GPNA (Proposed Rule, Pending Final 24 CFR 905.300) Slide8

Stakeholders

Residents, Associations and RAB

Local Officials – Mayor – Department of Building and Housing – Department of Economic Development – Planning and Zoning – Codes Administration

Neighborhood Groups and Associations

Community Action Commission

Key StaffSlide9

CharrettesSlide10

Charrette

char·rette

SHəˈret

/

noun

North

American

noun:

charrette

; plural noun:

charrettes

; noun:

charette

; plural noun:

charettes

a meeting in which all stakeholders in a project attempt to resolve conflicts and map solutions.Slide11

ConsiderationsEligible Activities 24 CFR 905.200

Ineligible Activities and Costs 24 CFR 905. 202Slide12

Eligible

General:

Activities

that are

eligible to

be funded with Capital

Funds include only

items

specified in an approved CFP

5-Year

Action Plan as identified

in 905.300 (3 pages of eligible activities).Slide13

Ineligible

Costs

not associated with a

public housing

project or development, as

defined in

§ 905.604(b)(1

) (mixed finance);

Activities

and costs not included

in

the PHA’s CFP 5-Year Action

Plan

Ineligible activities are listed at 905-202 (only a half page of items)Slide14

Exception

(There’s always one…)

Emergency activities. Capital Fund related activities identified as emergency work, as defined in Sec. 905.108 of this part, whether or not the need is indicated in the CFP 5-Year Action Plan. Slide15

905.108 Emergency Work

Capital Fund related physical work items that if not done pose an immediate threat to the health or safety of residents, and which must be completed within one year of funding. Management Improvements are not eligible as emergency work and therefore must be covered by the CFP 5-Year Action Plan before the PHA may carry them out. Slide16

Quiz (Eligible or Not?)

Swimming pool or hot tub

Operations expenses

Truck for the Director of Capital Improvements 

Improvements not modest in design

On-going security services

Audit

Building housing Public Housing staff and HCVP staff

Management improvements not identified in the five year action plan, done on an emergency basisSlide17

General Program Requirements

General

. Unless otherwise stated,

the

requirements in this section apply

to

both qualified

PHAs as

described in

§ 903.3(c)

and

nonqualified PHAs

.

Each

PHA must complete

a

comprehensive

physical needs

assessment

(PNA

).

Not enforceable in FY 2015 (see Section 233 of the FY 2015 HUD Appropriations Act) Currently voluntary. Slide18

General Program Requirements

Continued

A PHA must annually conduct a public hearing and consult with the Resident Advisory Board (RAB) of the PHA to discuss the Capital Fund submission. The PHA may elect to conduct a separate annual public hearing in order to solicit public comments or to hold the annual public hearing at the same time as the hearing for the Annual PHA Plan.Slide19

General Program Requirements

Continued

Public Hearing:

On display for at least 45 days.

Publish a notice informing the public that the information is available for review and inspection; that a public hearing will take place on the plan; and of the date, time, and location of the hearing.

Consistency with Consolidated Plan. The Capital Fund submission must be consistent with any applicable Consolidated Plan. Slide20

General Program Requirements

Continued

Board resolution of the five year action plan

PIC certification

DUNS registration and annual renewal

EPIC (Annual reporting)Slide21

General Program Requirements

Continued

Capital

Fund program submission

requirements. At the time that the PHA

submits the ACC Amendment(s) for its

Capital Fund Grants(s) to HUD, the

PHA

must

submit the following

items

:

Annual Statement (Estimate) 3 originals

5 Year Action Plan (Fixed or rolling)

Certificate of Compliance with Environmental Review Part 50 or 58Slide22

General Program Requirements

Continued

Criteria for Significant Amendment or Modification. The PHA must include in the basic criteria that the PHA will use for determining a significant amendment or modification to the CFP 5-Year Action Plan. In addition to the criteria established by the PHA, for the purpose of the CFP, a proposed demolition, disposition, homeownership, Capital Fund financing, development, or mixed finance proposal are considered significant amendments to the CFP 5-Year Action Plan.

Must be included in the PHA definition of Significant Amendment and Substantial Deviation in the Agency Plan. Slide23

ACC Amendment Submission

continued

The PHA is

also required

to submit various

certifications to

HUD, in a form prescribed

by HUD, including, but not limited

to:

Form SF-LLL: Disclosure of Lobbying Activities

Certification of PIC Data

Form HUD 50077-CR: Civil Rights Certification

Form HUD 50077: Certification of Compliance with Public Hearing (PHA Plans and Related Regulations)

Form HUD 50071: Certification of Payments to Influence Federal TransactionsSlide24

Environmental Review

Part 50

(Performed by the Field Office)

Part 58

(Performed by the Responsible Entity)

Recommend a five year review with annual updates.

Start early in the process. (Hiccups can take a while to resolve)

Send annual statements and five year plans to responsible entity.

Intent is to have this process complete in time for submission of ACC Amendment.

Executed Form HUD 7015.16 (Authority to Use Grant Funds)

Keep records on file for audit!Slide25

Timely Submission of the ACC Amendment

If HUD does not receive the signed and dated Amendment by the submission deadline, the PHA will receive the Capital Fund grant for that year; however, it will have less than 24 months to obligate 90 percent of the Capital Fund grant and less than 48 months to expend these funds because the PHA's obligation start date and disbursement end date for these grants will remain as previously established by HUD. Slide26

What’s Next?

Fully Executed ACC Amendment for the Capital Fund Program Funding.

Build you file.

Begin monthly reporting in LOCCs.

Begin Obligation and Expenditure Period.

Codified at 905.306Slide27

Obligations

Obligation. A binding agreement

for

work

or financing that will result

in outlays

, immediately or in the

future. All

obligations must be

incorporated within

the CFP 5-Year Action

Plan that

has been approved by the

PHA Board

of Commissioners and HUD.

This includes

funds obligated by the

PHA for

work to be performed by

contract labor

(

i.e., contract award), or by

force

account

labor (

i.e., work actually

started

by

PHA employees). Capital

Funds identified

in the PHA’s CFP 5-Year

Action Plan

to be transferred to

operations (BLI 1406) are

obligated by the PHA

once the

funds have been budgeted

and drawn

down by the PHA. Once

these funds

are drawn down they are

subject to

the requirements of 24 CFR part 990

. (Operating Fund)Slide28

Obligations

continued….

Obligation End Date (OED)

Formula Grants: 90% by 24 months

RHF: 90% by 24 months of accumulation date

ESSG: 90% by 12 months

Disaster Grants: 90% by 24 months

DDTF: Same as formula grant

RAD conversions: Can apply for extension up to 60 monthsSlide29

Obligations

continued….

Management Improvements 1408 meeting eligibility requirements in 905.200(b)(7) must have contract or other approved documents executed.

Administration 1410 is considered obligated when budgeted.

CFFP 1501or 9000 Debt Service: Obligation occurs when loan or bond documents are executed. Slide30

OBLIGATIONS

CONTINUED……

Contingency 1502: The PHA must revise the budget to move funds (8% max) to another line item prior to obligating.

Forced Account: Single task is obligated when it starts. Multiple related tasks are obligated when they start but must continue at a reasonable rate. Multiple unrelated tasks are obligated when each separate task is started. Slide31

Extensions

Formal request to the Assistant Secretary.

HQ reviews and recommends approval or rejection to Assistant Secretary.

Can’t exceed 12 months.

Based on the size of the PHA.

Complexity of capital program of PHA.

Limitations resulting from State or local law.

Other factors as the Secretary determines to be relevant. Slide32

Consequences of non-compliance with obligation end date (OED)

As of November 25, 2013 a PHA failing to obligate 90% by the OED of an RHF grant will have the funds recaptured.

Formula grants not obligating 90% by the OED will have the next Capital Fund grant penalized by 1/12

th

for each month they are out of compliance. Slide33

DEOBLIGATING FUNDS

A PHA is not penalized if the OED has passed and they de-obligate due to a voided contract or other legitimate reason.

PHA should contact FO to report.

If accepted FO will add a project note in LOCCS. Slide34

Expenditures

Expenditure. Capital Funds disbursed

by the PHA to pay for obligations incurred

in connection with work included

in a CFP 5-Year Action Plan

that has been approved by the PHA

Board of Commissioners and HUD.

Total funds expended means cash

actually

disbursed and does not include

retainage

.Slide35

Expenditures

continued…

Expenditure end dates (EED)

Formula Grants: 48 months

RHF: 48 Months from oldest of accumulated grants

Disaster Grant: 48 months

ESSG: 24 months

RAD: If HUD approves OED to 60 months, EED is extended the sameSlide36

Expenditures

continued…

Once funds are disbursed (transferred from LOCCS to the PHA), the PHA shall pay the applicable bill(s) within 3 business days.

PHAs can’t expend nonfederal funds first to pay bills then use Capital Funds to reimburse themselves.

HUD discourages FOs from executing disbursement adjustments in LOCCS.Slide37

Failure to Expend Penalty

Failure to expend all funds in a Capital Fund Grant by the EED will result in the un-expended funds being recaptured.

HQ will notify the PHA copying the FO of the noncompliance. HQ issues a unilaterally executed ACC Amendment recapturing the unexpended funds.

PHA proceeds to closeout the applicable grant.Slide38

Obligation / Expenditure Quiz

Can the Expenditure deadline be extended?

What is the OED for an accumulated RHF grant?

Failure to meet the OED penalizes the affected grant by 1/12

th

for each month (or portion of month) the PHA is out of compliance.Slide39

Fungibility

905 Definition

Fungibility

. As it relates to the Capital

Fund

Program,

fungibility

allows

the

PHA to substitute work items between

any

of the years within the latest

approved

CFP 5-Year Action Plan,

without

prior HUD approval

.

Wikipedia Definition

Fungibility

is the property of a good or a commodity whose individual units are capable of mutual substitution. That is, it is the property of essences or goods which are "capable of being substituted in place of one another."Slide40

Budget revisions

Significant amendments must go through the approval process.

If not the PHA may proceed to amend without HUD approval.

Give the revision a number and send to FO.

FO will adjust BLIs to agree in LOCCS.Slide41

Budget Line Items (CFP)

1406 Operations

1408 Management Improvements

1410 Administration

1411 Audit

1430 Fees and Costs

1450 Site Improvements

1460 Dwelling Improvements

1465 Dwelling Equipment

1470 Non-Dwelling Improvements

1475 Non-Dwelling Equipment

1485 Demolition Costs

1495 Relocation Costs

1499 Development

1501 or 9000 CFFP debt service

1502 Contingency

1503 or 1504 RADSlide42

Cost Limits

1406 Operations 20% (100% small PHAs)

1408 Management Improvements (14% 2016)

1410 Administration or Program Fee under asset management 10%; Development 3% or up to 6% with approval.Slide43

Management Improvements BLI 1408

Management improvements. Noncapital activities that are project- specific or PHA-wide improvements needed to upgrade or improve the operation or maintenance of the PHA's projects, to promote energy conservation, to sustain physical improvements at those projects, or correct management deficiencies. Slide44

1408

continued

Management improvement costs shall be fundable only for the implementation period of the physical improvements, unless a longer period, up to a maximum of 4 years, is clearly necessary to achieve performance targets.Slide45

1408

continued

Management improvement cost limits. In Fiscal Year (FY) 2014, a PHA shall not use more than18 percent.

In FY 2015, a PHA shall not use more than16 percent.

In FY 2016, a PHA shall not use more than14 percent.

In FY 2017, a PHA shall not use more than12 percent.

In FY 2018 and thereafter, a PHA shall not use more than

10 percent

of its annual Capital Fund grant for eligible management improvement costs identified in its CFP 5-Year Action Plan.

Management improvements are an eligible expense for PHAs participating in asset management. Slide46

A word on Administration Costs BLI 1410

Administrative costs. Any administrative costs, including salaries and employee benefit contributions, other than the Capital Fund Program Fee, must be related to a specific public housing development or modernization project and detailed in the CFP 5-Year Action Plan. (actual costs only)Slide47

Capital Fund Program Fee

Capital Fund Program Fee. This fee covers costs associated with oversight and management of the CFP attributable to the HUD-accepted COCC as described in 24 CFR part 990 subpart H. These costs include duties related to capital planning, preparing the CFP Annual Statement/ Performance and Evaluation Report, preparing the CFP 5-Year Action Plan, the monitoring of LOCCS, preparing reports, drawing funds, budgeting, accounting, and procuring construction and other miscellaneous contracts. This fee is not intended to cover costs associated with construction supervisory and inspection functions that are considered a front-line cost of the project. Slide48

Performance and Evaluation Reports

All PHAs must prepare a CFP Annual Statement/Performance and Evaluation Report at a time and in a format prescribed by HUD. These reports shall be retained on file for all grants for which a final Actual Modernization Cost Certificate (AMCC) or an Actual Development Cost Certificate (ADCC) has not been submitted. A final Performance and Evaluation Report must be submitted in accordance with 24 CFR 905.322, at the time the PHA submits its AMCC or ADCC. Slide49

P&Es for Troubled Agencies

PHAs that are designated as troubled performers under PHAS (24 CFR part 902) or as troubled under the Section 8 Management Assessment Program (SEMAP) (24 CFR part 985), and/or were identified as noncompliant with section 9(j) obligation and expenditure requirements during the fiscal year, shall submit their CFP Annual Statement/ Performance and Evaluation Reports to HUD for review and approval. Slide50

P&Es for the other Agencies

All other PHAs, that are not designated as troubled performers under PHAS and are not designated as troubled under SEMAP, and that were in compliance with section 9(j) obligation and expenditure requirements during the fiscal year, shall prepare a CFP Annual Statement/Performance and Evaluation report for all open grants and shall retain the report(s) on file at the PHA, to be available to HUD upon request. Slide51

P&Es for MTW Agencies

Moving to Work (MTW) PHAs. MTW PHAs are to submit the Capital Fund submissions as part of the MTW Plan annually, as required by the MTW Agreement. Slide52

Quiz (True or false)

Operations (1406) can be obligated and draw any time the PHA needs the funds.

Management Improvements are limited to 20% of the grant.

Non-asset management PHAs can draw up to 10 % of the grant for administration with no supporting documentation.

PHAs that are troubled under SEMAP must submit P&Es to HUD for approval.Slide53

CF ACC term and covenant to operate

The PHA shall operate all public housing projects in accordance with the CF ACC, as amended, and applicable HUD regulations, for the statutorily prescribed period. These periods shall be evidenced by a recorded DOT on all public housing property. If the PHA uses Capital Funds to develop public housing or to modernize existing public housing, the CF ACC term and the covenant to operate those projects are as follows: Slide54

CF ACC term and covenant to operate

Development activities. Each public housing project developed using Capital Funds shall establish a restricted use covenant, either in the DOT or as a Declaration of Restrictive Covenants, to operate under the terms and conditions applicable to public housing for a 40-year period that begins on the date on which the project becomes available for occupancy, as determined by HUD. Slide55

CF ACC term and covenant to operate

Modernization activities. For PHAs that receive Capital Fund assistance, the execution of each new CF ACC Amendment establishes an additional 20-year period that begins on the latest date on which modernization is completed, except that the additional 20-year period does not apply to a project that receives Capital Fund assistance only for management improvements. Slide56

term and covenant to operate

Operating Fund. Any public housing project developed that receives Operating Fund assistance shall have a covenant to operate under requirements applicable to public housing for a 10-year period beginning upon the conclusion of the fiscal year for which such amounts were provided, except for such shorter period as permitted by HUD by an exception. Slide57

Questions?