Los Angeles Office of Public Housing
June 2009 Newsletter
Serving Southern California

Thoughts from KJ:

Please welcome our new Assistant Secretary Sandra Henriquez, who was confirmed on May 21, 2009. Ms. Henriquez was previously employed as the Administrator/Chief Executive Officer of the Boston (MA) Housing Authority.

We bid a warm farewell to Deputy Assistant Secretary Paula Blunt, upon her retirement effective July 2, 2009. Her due diligence in servicing the Department for many years is noted.

I want to encourage all our Public Housing Authorities (PHAs) to attend the quarterly Proactive Exchange. My staff and I have noticed that our low performing or troubled PHAs seem to be the PHAs that do not attend. This type of event is where you will receive an active interchange between PHA and HUD staff as well as a great time to find out how other successful PHAs conduct their business. So, plan to attend the next one on September 8, 2009. We will also be hosting a round table that afternoon at the HUD, Santa Ana Office.

Please provide me with any constructive feedback that you may have with our Proactive Exchange, Round Tables, Newsletter, and daily customer service that you receive from my staff. Please know that I am always open to streamlining and improving in areas that I have control of changing.

As always, I appreciate each of you in your daily achievement to provide housing to the less fortunate. As we all know, sometimes our clients are not on their best behavior, which is when we learn so much about being kind and improving our patience. But we will keep trying and keep persevering to touch as many lives as possible in a positive way.

Long Beach Public and Indian housing Information Center (PIC) Workshop

By Martha E Murillo

The Los Angeles Office of Public Housing conducted its first in Fiscal Year 2009 series of two PIC Workshops for the Southern California Housing Authorities' staff. The first workshop was held in the City of Long Beach on Wednesday, May 20, 2009 from 9:30 a.m. to 4:00 p.m., with 56 registrants in attendance. The second workshop will be hosted by the San Diego Housing Commission on Thursday, September 3, 2009 from 9:00 a.m. to 3:30 p.m. If you were unable to attend the first workshop you can still make plans to attend the second one in San Diego. Registration details will be issued in July 2009.

Martha Murillo, the PIC Coach for the Los Angeles Office of Public Housing, presented topics of interest and concern that consist of the day to day activities in dealing with PIC. The topics were as follows:

Web Access Secure System (WASS) duties
Reset vs. Locked out in WASS

PIC (Public and Indian Housing Information Center)
Reactivation and Deactivation
HA Contacts (Housing Authority Contracts)
Expiration of PIC access
Special Privileges
Understanding PIC Reports
Delinquency Summarization Reports
SEMAP (Section Eight Management Assessment) Indicators Reports
Summarization Schedule
Changes from April 2009 PIC Release

50058s
Portability
Homeownership
FSS (Family Self Sufficiency)
Special Action Codes
EOPs (End of Participation)
Errors Fatal and Warnings
Coming attractions with September 2009 PIC release
Questions and answers

Other
VMS (Voucher Management System)
EIV (Enterprise Income Verification)

Also, Marilyn Patterson had a segment on Building and Units Demo/Dispo and Inventory removals in regards to PIC for those in attendance that have public housing.

The Los Angeles Field Office would like to thank Alison King and the Long Beach Housing Authority staff for hosting the workshop and taking care of the logistics.

PIC Moments with Martha

• HA Contact email information in PIC needs to be correct and current.

• Monthly summarization schedule of when the 50058s are processed will remain the same. 50058s will continue to be processed the first Friday of the month unless notified otherwise.

• Another summarization change that took place is that the required 50058s will come from the VMS number, it will be the number of units under lease at the end of the month and not the sum of the other voucher categories that appear in VMS and that the PHA submits. Therefore, the 50058s will need to equal the number reported in VMS for the Housing Choice Voucher Program to the number of 50058s submitted... It will be the responsibility of the PHA to ensure that the correct information is in the PIC and VMS systems and that the information coincides.

• The PIC users that are designated as submitting a SEMAP Certification must ensure that they are active in PIC. Executive Directors: Missing the SEMAP Certification due date because you PIC account is INACTIVE will cause your HA to be determined "Troubled". Logon to PIC now to make sure your PIC account is active. If you cannot access PIC contact Martha E Murillo at (213) 534-2611, and I will activate your access to PIC.FYE 3/31/09 PHAs your SEMAP is due May 30, 2009.

• September 2009 PIC Release 6.5:
  • 50058 data will be archived. Current and historical data is what is currently in PIC.
  • Current database will be archived to a database warehouse that is offline; this will be information earlier than 1/1/2004. All EOPs will be archived.
  • Historical database will be archived (earlier than 1/1/2005). No new admissions, port move-ins will be archived.
  • PIC to be Section 508 compliance this will make it easier for the visually impaired to read the PIC information.
  • Log in page will be saying "welcome back...your last login was on (date) at (time). Your user certification is due to expire on (date).

Be aware that any data entered prior to the 4th of the month may be flagged with a hard edit error. To avoid any unnecessary delays from having to review those hard edits, we ask that you submit your data only during the new reporting period.)

Also, effective June 15, 2009, Mr. Thomas M. Vitek will be assigned as the new Financial Analyst to process any necessary financial documents from FMC.

Thomas M. Vitek, 9APCF
US Dept of HUD
Telephone: (415)489-6497 or Fax (415) 489-6754
Email: Thomas.M.Vitek@hud.gov

Stimulus Act Capital Fund Session

Johnson Badalpour, from the Los Angeles HUD Field Office on April 28, 2009 at the Annual Spring Conference of National Association of Housing and Redevelopment Officials (NAHRO) held in Santa Barbara, CA was the main speaker for a session titled Stimulus Act Capital Fund. During the session Johnson reviewed the requirements and provided valuable updated information regarding the $1 billion competitive grant. Also, an overview of PIH Notice 2009-12 issued March 18, 2009, was conducted regarding important information on processing the formula fund grant as well as requirements for obligating, expending and reporting on the use of the grant amount.

K.J. Brockington, PIH Hub Director for the Los Angeles HUD Field Office was the co-moderator for this session.

Most Common Findings

During our office's reviews of various Public Housing Authorities (PHAs), we find a pattern in the errors made. We thought it would be helpful to highlight some errors in order to help PHAs rectify these deficiencies.

As a general note, when we visit PHAs, it hampers our ability to conduct a review when the materials we have requested in written correspondence are not available for our review. This lack of preparedness also raises a red flag to HUD staff and gives the appearance that problems exist and that the PHA is attempting to slow down HUD staff in hopes that findings will not be found.

If you are unclear on what HUD auditors need to review, please contact your HUD representative ahead of time. This will ensure an easier and faster review for all parties.

The most common findings are as follows:

• General Depository Agreement

Section 13 of the Consolidated Annual Contributions Contract for the Section 8 Housing Choice Voucher Program and Section 13 of the Annual Contributions Contract for the low-rent public housing program stipulate that the PHA and its bank enter into a depository agreement in the form specified by HUD (form HUD-51999). Many PHAs have such an agreement with their financial institutions, but not on the required form HUD-51999, General Depository Agreement.

Also, many PHAs have the required form HUD-51999 on file, but with paragraphs 11 and 12 crossed. Per the guidance we have received from HUD's General Counsel, paragraphs 11 and 12 cannot be crossed out.

If you have not already done so, please send the fully executed form HUD-51999 to the local HUD Office.

• Inadequate Fidelity Bond Coverage

Many of HUD's on-site reviews revealed that some PHAs do not have adequate fidelity bond coverage against theft of program funds.

• Noncompliance with the Uniform Financial Reporting Standards

The Uniform Financial Reporting Standards (UFRS) at 24 CFR 5.901 stipulate that un-audited financial data schedules be transmitted to the HUD Real Estate Assessment Center (REAC) 60 days after the end of the PHA fiscal year-end. The UFRS also stipulates the audited financial data schedules be transmitted to the REAC no later than nine months after the PHA fiscal year-end. Noncompliance with the UFRS can lead to a troubled designation and administrative fee sanctions.

• Inadequate segregation of duties in disbursement processing

Segregation of duties is one of the most essential internal controls over disbursement processing. The lack of segregation of duties places program funds at risk of theft or misappropriation.

• Housing Quality Standards (HQS) turnaround time

Please review your protocol for tracking and documenting HQS inspections in relation to Section Eight Management Assessment Program (SEMAP) Indicators 5 and 6. When HUD reviewers look at PHAs' documentation, they are checking for a log indicating that HQS violations were corrected within 30 days or 24 hours, whichever the case may be.

Thank you to Housing Authorities that attended May 2009 Proactive Exchange

Left to right: Maria Granata, Anthony Sprowl, Theodore Skonos, Sara Kurzenhauser, Marilyn Patterson, Linda Chu and May Miso

On May 12, 2009, the Los Angeles HUD Office hosted our quarterly Proactive Exchange meeting. Topics discussed included Housing Choice Voucher Utilization rates and Section 32 Homeownership. Following the event was a roundtable where HUD staff provided guidance on new PHA Plan template guidelines as well as SEMAP Confirmatory reviews. We encourage PHAs to submit topic suggestions for our next meeting.

City of Santa Barbara Houses the Homeless through a Tax Credit Project

The Housing Authority of the City of Santa Barbara won the National NAHRO Award of Excellence in 2007 for their work on El Carillo, a development that houses formerly homeless people.

Acting as land owner, developer, and now operator of this project, the Housing Authority recognized a critical need and responded. However, to accomplish this project the PHA created strong partnerships with the City of Santa Barbara along with its Redevelopment Agency and Planning Commission. The Redevelopment Agency and City provided needed subsidy financing for the land acquisition and subsequent funds to cover a portion of the construction costs in the form of a residual receipts loan.

El Carrillo provides high quality permanent housing for the homeless. Its location near the heart of downtown Santa Barbara enables residents to easily walk, bike or bus to work, shopping and entertainment destinations.

The Housing Authority of the City of Santa Barbara acquired the property in 2002. The site was previously underutilized with a parking lot, taxi dispatcher and an older vacant building that was previously used as an architect's office. The completed El Carrillo development is a Low-Income Housing Tax Credit project comprised of 61 studio units, a 2 bedroom manager's apartment, a community room and a program room for service delivery. The project also uses Section 8 funding. The studios are small at 254 square feet. For a city of Santa Barbara's overall scale and old age, the project is considered large, relatively dense (122 units to the acre), and demonstrates how to best capitalize on in-fill housing opportunities, taking full advantage of a rare and precious downtown resource – developable land. El Carrillo is a beautiful project comprising several building connected by pleasant courtyards and walkways (or paseos). The buildings' various shapes, sizes and orientation on the site, and decorative details help conceal the project's high density. The open layout of the units, their ample light and air circulation and their direct placement along open courtyards and paseos make the small units extremely livable. All of the units are affordable to very low income households with maximum incomes and rents as follows:

El Carrillo is a Low-Income Housing Tax Credit (LIHTC) Development. Created as part of the Tax Reform Act of 1986, and made permanent in 1993, the Low Income Housing Tax Credit (LIHTC) under Section 42 of the Internal Revenue Code is designed to help meet a growing need for affordable housing in the United States. Nearly one million affordable housing units have been created through the use of the credit since it was enacted, but unmet demand for such housing continues to far exceed the supply.

Under the LIHTC program, each state receives a specific tax credit per person residing in the state. Individual states determine how the credits are allocated, based on a plan adopted by a state's housing agency. Qualified new construction and substantial rehabilitation projects are eligible for either a 9 percent or 4 percent tax credit; based upon eligible project costs each year for 10 years. El Carrillo is a 9% tax credit project.

The LIHTC program is attractive because it can be leveraged with private capital to finance new construction, or for the acquisition and rehabilitation of existing affordable housing. Furthermore, the tax credit enables properties to be operated at below market rents and still produce competitive returns that attract investment.

Next month, the success of El Carillo development will be featured on Huell Howser's California's Communities show. It will air on two Thursday nights in July - the 9th & 30th. The shows will air at 7:30 pm on KCET.

The show is devoted to the El Carrillo residents. The thoughts and experiences of these formerly homeless folks who now live at El Carrillo is focus of the program. The show will help demonstrate how developments like El Carrillo can end homelessness.

Congratulations to Robert G. Pearson, Executive Director/CEO, Housing Authority of the City of Santa Barbara and his staff for this successful project.

Protecting Section 8 Tenants at Foreclosure

On May 20, 2009, President Obama signed the "Helping Families Save their Homes Act of 2009," P.L. 111-22 (the Act). The Act includes protections for tenants, including Section 8 tenants, who are living in homes subject to foreclosure. These protections were effective immediately as of May 20, 2009.

The Act specifically amended Section 8(o) (7) of the United States Housing Act of 1937 (42 U.S.C. Section 1437f (o)(7)). Pursuant to the changes, the "immediate successor in interest" (generally the bank or other lending institution) shall assume both the existing Section 8 lease and the existing Housing Assistance Payment Contract. Foreclosure does not constitute "other good cause" for termination of an existing Section 8 lease with one exception; if the unit will be owner-occupied as a primary residence, the owner must provide the tenant with a minimum 90 day notice to vacate.

The Act provides that these protections are the minimum to which Section 8 tenants are entitled. The Act specifically does not affect any state or local laws that provide additional protections for tenants, including longer time limits.

These changes are effective for all Section 8 tenants, even those living in units that have already been foreclosed. Under the law, the immediate successor in interest to a foreclosed property must assume responsibility for a current Section 8 tenancy even if the foreclosure occurred prior to May 20th. As such, if your PHA administers Section 8 assistance on behalf of a tenant residing in a foreclosed property or a property in the process of foreclosure, you must identify and work with the successor of interest to ensure that the rights and obligations under the Housing Assistance Payments Contract are understood and complied with by the successor of interest.

We recognize that these changes do not resolve all the problems faced by PHAs administering Section 8 tenancies caught in foreclosure. HUD is working to make programmatic revisions where necessary to fully implement the law, but no HUD action is necessary to make these changes effective immediately so you should not wait for HUD's further guidance. If you have questions or concerns about the implementation of this statutory change, please call your assigned HUD representative at the Los Angeles Field Office of Public Housing.