Public H c Hou ousi sing Repos osition oning S g Strategi gies Session 4: Public Housing Program Closeout and Case Studies 1
Why a are we h e her ere? The goal of this training is to help inform PHAs of their repositioning options. The training will start with the basics of repositioning, then describe the various policy tools involved in repositioning. We will discuss the decision-making process in choosing a repositioning strategy, and how the Project-Based Voucher program intersects with repositioning. 2
Ground R Rules ◦ Participate in each session of the webinar series ◦ Avoid distractions (close email and web-browser) ◦ Silence your phone ◦ Ask plenty of questions. It is the best way to learn! 3
If you don’t recall the earlier sessions, don’t worry. They were YOU recorded and will be posted on HUD Exchange. ARE HERE Webcas ast T Trai aining A Agenda Session 1 Session 2 Session 3 Session 4 Nov 12 Nov 14 Nov 19 Nov 21 Introduction Public Intersection to Section 18 Housing with PBV Repositioning Close-out Repositioning Streamlined Decision RAD Voluntary Case Studies Conversion Matrix 4
Knowledge Check What are some reasons why PHAs may choose to reposition? 5
Knowledge Check What are some reasons why PHAs may choose to reposition? Stabilize Revenue Provides Access to Debt/Equity Reduce Administrative Burden 6
Knowledge Check To whom may a PHA dispose public housing property? 7
Knowledge Check To whom may a PHA dispose public housing property? Separate legal entity under law: o PHA may retain ownership or control o May be a non-profit of PHA 8
Knowledge Check True or False? RAD is the only repositioning tool that allows a PHA to carryover existing public housing funds/reserves and use them toward a Replacement Reserve to support the future Section 8 units (PBV or PBRA) following conversion. 9
Knowledge Check True or False? RAD is the only repositioning tool that allows a PHA to carryover existing public housing funds/reserves and use them toward a Replacement Reserve to support the future Section 8 units (PBV or PBRA) following conversion. True 10
Her ere a are som ome q questions we w e will c ll cover t tod oday 1. What does it mean to closeout a public housing program? 2. What can a PHA do with any leftover public housing funds after all the units have repositioned to Section 8? 3. What are a PHAs closeout options? 11
What does closeout mean? 12
What d t does oes c close-out ut me mean? n? o No more public housing program (end of Section 9 ACC); NOT the end of the PHA o PHAs are locally established government entities; They should continue to focus on providing housing o HUD accepts ACC Transfers and Consolidations in lieu of an ACC Closeout 13
When i is cl clos ose-out r required? ◦ Section 18 disposition (50 units and under justification) ◦ Section 22 Streamlined Voluntary Conversion (250 units and under) ◦ RAD (streamlined processing for 50 units and under) ◦ RAD (where all public housing units are converted and the PHA has no authority to develop new units under Faircloth) Close-out is OPTIONAL when a PHA removes all of its current public housing under other repositioning tools and has Faircloth Authority to develop new public housing units. 14
How ea early ly shou ould ld PHAs th thin ink a about cl clos osin ing ou out? o NOW…with the first repositioning o Things to consider: • Where will the assets go? (land, buildings, desks, lawn mowers, etc) • What will you need? • What about pensions? • What about future staffing? 15
Wha hat a about a assets? ? o Public Housing Operating Reserves o Any remaining proceeds o Remaining Public Housing land o Future Public Housing Funding PHAs that removed units via Section 18 may be eligible to receive additional public housing subsidy in the form Demolition Disposition Transition Fees (DDTF) and Asset Repositioning Fees (ARF). o Faircloth Authority 16
Wha hat a about l liabilities? o Remaining public housing obligations (i.e., repayment agreements, CFFP, EPC) o Staffing o Pensions Note: Liabilities should not prevent a PHA from considering repositioning. HUD can help figure out options! 17
What a are el elig igib ible le e expendit itures of of S Sec ectio ion 9 ACC funds after p r public h housing c close se-out? o Administrative costs associated with closeout (i.e., staff, operations, legal reviews, program audits, board costs, liquidation of equipment/supplies) o Outstanding public housing program litigation, claims, or liabilities (e.g., pensions) o Staff transitions (e.g., severance packages) required by pre-existing employment contract, or PHA personnel and employment policies consistent with state/local law o Record keeping for five years following the date the PHA removed its last public housing unit o Maintenance of any remaining public housing property, including building removal or site remediation prior to DOT/DORC removal o Items in an approved MTW Plan Note: PHAs can always develop new public housing units, subject to HUD approval. 18
How d do P o PHAs n not otif ify H HUD of i intent to o cl clos ose-ou out? o HUD-5837 required when PHA submits an application in PIC (i.e. RAD, S18, S22) o PHA must indicate: • If it plans to close-out (sometimes required) or develop new public housing units (if allowed by repositioning tool and Faircloth authority) • How it plans to close-out (i.e. consolidation, transfer, or ACC termination) • If it has any non-dwelling real property • Any major issues/red-flags that Field Office should be aware of regarding the close-out or future development plan 19
Clos ose-ou out Op Option ons ACC Closeout – PIH Notice 2019-13 PHA Transfer – PIH Notice 2014-24 PHA Consolidation – PIH Notice 2014-24 20
Public Housing ACC Closeout (PIH Notice 2019-13) Key Requirements: -- Complete final program audit and reconciliation of PH Funds. -- Inventory remaining PH program assets, possibly reimbursing HUD for items over $5,000 Benefits of this option: - Requires no collaboration with other PHAs Costs of this option: - Remaining non-dwelling property must be removed from DOT/ACC through either Section 18 or Part 200 application - Equipment sold/accounted under Part 200, with possible return of sale proceeds to US Treasury - Use of PH program funds restricted to closeout or other eligible activities (i.e. MTW) or returned to US Treasury 21
Public Housing Program Transfer (PIH Notice 2014-24) Key Requirements: - Involves complete transfer of Public Housing assets/liabilities to receiving PHA - Both PHAs must have an existing Public Housing program Benefits of this option: - Preserves PH resources (equipment, non-dwelling property, PH funds) and Faircloth units; Nothing returned to HUD - Preserves potential future funding for Demo/Dispo removals (DDTF and ARF) - Transfer can occur after all PH units are removed Costs of this option: - Prior PHA governance has no control over PH resources once transfer is complete - Requires collaboration with transferring PHA - May require transfer of liabilities such as pensions and use agreements to new PHAnew PHA. 22
Public Housing Program Consolidation (PIH Notice 2014-24) Key Requirements: - Complete transfer of all existing PH program assets and liabilities to newly-created PHA Benefits of this option: - Same preservations as transfers, with same future funding and low burden - Creates a new PHA that did not formerly operate PH (i.e., State Housing Finance Agencies) Costs of this option: - Prior PHA governance has no control over PH resources once consolidation is complete - Requires collaboration with consolidating PHA - May require transfer of liabilities such as pensions and use agreements to new PHA 23
Knowledge Check True or False? A PHA that wants to close their public housing program must return any unused program funds to HUD? 24
Knowledge Check True or False? A PHA that wants to close their public housing program must return any unused program funds to HUD? False. A PHA may choose to transfer/consolidate their public housing program. Any remaining program resources and liabilities would transfer to the new PHA. 25
Public Ho Housing C Close seout – Key t takeawa ways o This isn’t the end of your PHA - PHAs are locally-established government entities. “Public Housing Closeout” just means the PHA will no longer participate in the public housing program. o Plan for your remaining public housing funds - Public housing funds may only be used to support public housing program related costs. Once a unit converts to Section 8 subsidy, the PHA must not spend public housing funds (including any remaining public housing reserves) to support the Section 8 unit. o Consider transferring assets/liabilities during repositioning - PHAs may be able transfer their public housing program assets and liabilities as part of the public housing conversion actions. For instance, if a PHA has Public Housing maintenance equipment at a building they may want to convert those assets as part of the public housing conversion. 26
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