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Washington Update

Tuesday, July 08, 2008

PHAs will have noticed a decrease in operating subsidy funding for the third quarter of CY 2008 relative to the first two quarters of the year. HUD attributes the decrease in funding to two factors:
• Lower estimated proration. For the first two quarters of the year, HUD says it based eligibility on CY 2007 eligibility adjusted for inflation and transition funding. Using that methodology, the proration was estimated to be 84 percent. For the third quarter of the year, HUD says it calculated eligibility using the most recent data submitted by PHAs into SAGIS. Based on the SAGIS data, eligibility is increased, so the proration level for the year is decreased to 82 percent.
• Retroactive nature of lower proration. To adjust for the "over" obligations during the first two quarters of the CY 2008 funding year, HUD says it adjusted the third quarter obligation downward. (There is reason to question whether this adjustment was actually made.)
Industry representatives have raised a number of questions about HUD's methodology. For example, in addition to the question raised above, it appears that third quarter subsidy has been distributed based on the eligibility levels estimated for the first two quarters and not based on actual eligibility as reported in SAGIS. HUD has promised a meeting within the coming weeks to clarify these issues.
In the mean time, the St. Paul Public Housing Agency (a gainer agency) has developed a spreadsheet (available at http://www.nahro.org/legislative/2008/cy07_sub_comp.xls) that PHAs can use to estimate their fourth quarter operating subsidy funding. NAHRO wishes to thank Ron Moen, Controller for the St. Paul PHA, and Jon Gutzmann, Executive Director of the agency, for developing this tool and agreeing to make it available to NAHRO's membership.

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