HUD Awards $500 Million in Disaster Recovery Funds; Pledges Expedited Assistance for Southern States

Last week, HUD Secretary Julian Castro awarded $500 million in Community Development Block Grant Disaster Recovery (CDBG-DR) funds to Louisiana, Texas and West Virginia to help recover from severe flooding earlier this year. These recovery funds will help the most impacted counties that experienced the greatest level of damage to their housing stock. CDBG-DR grants can provide support for housing redevelopment, business assistance, and infrastructure repair.

According to HUD’s press release, “[i]n the hardest-hit counties of Louisiana (6 counties), Texas (3 counties), and West Virginia (2 counties), more than 102,000 households experienced some level of damage to their homes including more than 41,000 families who saw the most serious level of damage or destruction and unmet needs.” The following allocations of funds are based on each state’s proportional share of serious unmet housing needs:

Grantee
Amount
State of Louisiana
$437,800,000
State of Texas
$45,200,000
State of West Virginia
$17,000,000
TOTAL
$500,000,000

Also last week, Secretary Castro announced that HUD will expedite assistance to the States of North Carolina, Florida, and Georgia to address the impacts of Hurricane Matthew. The Department will help by: assisting the affected states and local governments in re-allocating existing federal resources toward disaster relief; granting immediate foreclosure relief; making mortgage insurance available; making insurance available for both mortgages and home rehabilitation; offering Section 108 loan guarantee assistance; and providing information to FEMA and the State on housing providers that may have available units in the impacted counties.

HUD Unveils Utility Benchmarking Proposal

On October 4, HUD announced its proposed Utility Benchmarking Initiative. The initiative would require PHAs to benchmark water and energy in their portfolios of public and assisted, as well as newly-insured, multifamily housing. Benchmarking allows property owners to compare a building’s utility consumption pattern against similar buildings and helps owners measure and manage energy and water consumption across building portfolios. The proposal was first announced in the President’s Climate Action Plan. Under the initiative, certain providers of HUD-assisted or public housing will be required to collect and report on their water and energy use. This will allow PHAs to make informed decisions, reduce operating costs and improve building performance over time. The proposal will establish procedures for PHAs to input utility and energy data into the U.S. Environmental Protection Agency’s free, web-based ENERGY STAR Portfolio Manager®. HUD also posted a 60-Day Notice of Proposed Information Collection: Energy Benchmarking of Public Housing in the Federal RegisterPHAs would benchmark their utilities every three-years.

 

HUD Releases Guidance on PHA Salary Restrictions

On October 3, HUD PIH Issued Notice PIH-2016-14 (HA) titled, “Guidance on the Public Housing Agency (PHA) salary restriction in HUD’s annual appropriations.” Congress prohibits PHAs from using any Tenant-Based Voucher, Operating Fund, or Capital Fund dollars to pay any amount of salary above the base rate of pay for level IV of the Executive Schedule. To fulfill its obligations under HUD’s annual appropriations, each PHA must compute the amount of impacted salary and bonus for each covered individual during the PHA’s fiscal year. If any covered individual has a salary and bonus that exceeds the annual rate of basic pay for a position at level IV of the Executive Schedule, the PHA must ensure that the amount in excess is not paid from Section 8 or Section 9 funds. Covered individuals include the “chief executive officer” as well as “any other official or employee” of the PHA with an annual salary (including any bonus) greater than the then prevailing salary for level IV of the Executive Schedule.

PHAs should calculate excess salary and bonuses reasonably and should document the calculation so that, if audited, the PHA can explain how each covered individual’s salary and bonus exceeding level IV of the Executive Schedule for that fiscal year were funded and prove to the auditor that there was no improper use of the applicable Section 8 or Section 9 monies to fund excess PHA salary and bonus payments.

For more information on this requirement, see NAHRO’s coverage of the FY16 Omnibus (members only).

HUD OIG Releases Report on Oversight of MTW Legal Costs

On September 29, HUD’s Office of Inspector General issued a report titled “HUD’s Oversight of Legal Costs at Moving to Work Housing Agencies.” The report found that HUD’s oversight was not adequate to ensure that legal costs spent by MTW agencies were reasonable and necessary.  OIG audited HUD on this topic due to congressional concerns, concerns from a previous external audit, and OIG’s initiative to focus HUD management’s attention on problem areas on which we and others have reported over the years.

According to the report, which audited 3 MTW agencies, payments for outside legal services paid for by the MTW agencies were not always in compliance with applicable requirements. The report claims that $9.2 million of the $16.5 million that the three agencies paid for outside legal services during the period October 2007 to September 2012 could be unsupported. The report notes that MTW agencies typically incur relatively higher costs for legal services than non MTW agencies.

OIG recommends HUD require MTW agencies to include a breakdown of their anticipated and actual costs for legal services in their annual plans and report.