Federal Register 1992-01-17: Vol 57 Iss 12

47 Pages·3.1 MB·English

Friday
January 17, 1992
Part III
Department of
Housing and Urban
Development
Office of the Assistant Secretary for
Public and Indian Housing; Office of
Administration
24 CFR Part 901
Public Housing Management Assessment
Program; interim Rule and Notice of
Submission of Proposed Information
Collection to 0MB
2160 Federal Register / Vol. 57. No. 12 / Friday, January 17, 1992 / Rules and Regulations
DEPARTMENT OF HOUSING AND accountability monitoring and risk SUPPLEMENTARY INFORMATION:
URBAN DEVELOPMENT management. PHMAP also establishes
Paperwork Reduction Act Statement
procedures for memoranda of agreement
Office of the Assistant Secretary for between HUD and troubled agencies The information collection
Public and Indian Housing and agencies troubled with respect to requirements contained in this rule have
the program under section 14 that set been submitted to the Office of
24 CFR Part 901
forth targets, strategies, incentives and Management and Budget (0MB) for
[Docket No. R-92-1520; FR-2897-1-02] sanctions for improving performance. review under the Paperwork Reduction
Procedures to follow with respect to Act of 1980. Expedited review has been
RIN 2577-AA89 housing administered by PHAs that requested with a seven day public
Public Housing Management substantially default on their comment period, so that the application
Assessment Program management responsibilities are process described in this notice may be
included in PHMAP. carried out after approval of the
agency: Office of the Assistant dates: Effective date: February 18,1992. described collections of information. A
Secretary for Public and Indian Housing, Comment due date: May 18,1992. separate notice of Submission of
HUD. FOR FURTHER INFORMATION CONTACT: Proposed Information Collection to
ACTION: Interim rule. Casimir R. Bonkowski, Director, Office OMB inviting comments on the
of Management and Policy, Office of information collection requirements of
summary: This rule establishes the Public and Indian Housing, Department this rule is published elsewhere in this
Public Housing Management
of Housing and Urban Development, 451 issue of the Federal Register.
Assessment Program (PHMAP) in
accordance with section 502 of the Seventh Street, SW„ Washington, DC Pending approval of these collections
National Affordable Housing Act 20410, telephone [phone]. A of information by OMB and the
(approved November 28,1990, Public telecommunications device for hearing assignment of an OMB control number,
Law 101-625, hereinafter, NAHA) as or speech impaired persons (TDD) is no person may be subjected to a penalty
amended by the Departments of available at [phone]. (These are for failure to comply with these
Veterans Affairs and Housing and not toll-free telephone numbers.) information collection requirements. The
Urban Development, and Independent ADDRESSES: Interested persons are OMB control number, when assigned,
Agencies Appropriations Act, 1992 invited to submit comments regarding will be announced by separate notice in
(approved October 28,1991, Public Law this rule to the Rules Docket Clerk, the Federal Register.
102-139, hereinafter, 92 App. Act). Office of General Counsel, room 10276, The public reporting burden for this
PHMAP does not apply to Indian Department of Housing and Urban collection of information is estimated to
Housing Authorities, nor to the Family Development, 451 Seventh Street, SW., include the time for reviewing
Self Sufficiency Program authorized Washington, DC 20410. Communications instructions, searching existing data
under section 23. PHMAP provides should refer to the above docket number sources, gathering and maintaining the
policies and procedures for the and title. A copy of each communication data needed, and completing and
Department's use in identifying public submitted will be available for public reviewing the documents making up the
housing agency (PHA) management inspection and copying between 7:30 collection of information. Information on
capabilities and deHciencies, and allows a.m. and 5:30 p.m. weekdays at the the estimated public reporting burden is
HUD Field Offices to practice above address. provided below:
Reference reNsupmonbedre nofts rFersepqo. nosfe resEp(sohton. usarevs g)t i.m e bEusrtd. eann n(hurasl. )
1-99 UnH PHAs. 1,608 1 1.9 3,055.2
100-499 Unit PHAs. 1,274 1 2.1 2,675.4
500-1,249 Unit PHAs. 244 1 3.1 756.4
1.250-3.999 Unit PHAs. 102 1 3.7 377.4
4.000+ Unit PHAs. 40 1 4.5 180.0
Total reporting burden. 7,044.4
Backgroimd The rule first sets out to describe Finally, when the management
public housing management performance of a PHA has been
This rule has developed out of the
comprehensively. The Department seeks accurately described and fairly
need to ensure that public housing
to accomplish this with a minimum of evaluated, the rule prescribes what
functions as a well-managed enterprise burden on PHAs by taking data from action will follow. High-performing
on a uniform, nationwide basis to the reports already being submitted and by PHAs will be rewarded for their
benefit of its residents and the public relying on certifications for 6 out of the excellence. In this way, all PHAs will be
that supports it. This is not the first encouraged to achieve this status.
12 indicators, rather than on additional
attempt to accomplish this goal, but it is Troubled PHAs and PHAs troubled with
reports.
the most comprehensive, having grown respect to the program under section 14
out of the experience of the Department Once the necessary management (mod-troubled PHAs) will be assisted in
and the public housing community with information is compiled, it will be improving their management
previous efforts, and having been given evaluated. This will be done by grading performance by focusing resources on
new impetus and authority by the or scoring the management performance the deficiencies identified by the
mandate of section 502 of NAHA. of each PHA in accordance with uniform management assessment. Under
and objective criteria. appropriate conditions, the rule would
Federal Register / Vol. 57, No. 12 / Friday, January 17, 1992 / Rules and Regulations 2161
permit HUD to make other arrangements modernization program” (the equivalent The Department agrees with these
in the best interests of residents for of “troubled with respect to the program comments, and the niunber of indicators
managing all or part of a poorly under section 14”) is to consider only and standards has been reduced from 39
managed PHA’s housing. the PHA’s ability to carry out the to 12 indicators. This change also
Congress recognized the need to modernization program efiectively corresponds to one of the requirements
identify and assist troubled and mod- based upon the PHA's capacity to of the 92 App. Act amendments. The
troubled PHAs and to provide for the accomplish the physical work: with indicators in the interim rule are: (1)
consistent good management of PHAs in decent quality; in a timely manner; Vacancies; (2) modernization; (3) rents
section 502 of NAHA. Section 502 under competent contract imcollected; (4) energy consumption; (5)
requires the Department to develop administration: and with adequate unit turnaround; (6) outstanding work
indicators to assess the management budget controls. Among the changes in orders; (7) annual inspection and
performance of PHAs. Seven indicators this interim rule from the proposed rule condition of units and systems; (8)
that must be used for assessment is the implementation of these 92 App. tenants accounts receivable; (9)
purposes are listed in the statute, and Act amendments. operating reserves; (10) routine
the Department is authorized by the 92 The Department is proceeding to operating expenses; (11) resident
App. Act amendments to develop five implement section 502 of NAHA, as initiatives; and (12) development.
additional indicators as it deems amended by the 92 App. Act, through The rest of the compliance-based
appropriate. A PHA assessed as this interim rule. This approach is taken
indicators/standards that were included
troubled or mod-troubled must enter in order for the Department and PHAs to
in the proposed rule have been removed
into a memorandum of agreement gain some experience in the actual
(sMtraOteAg)i ewsi, tihn HceUnDtiv tehsa ta nsedt ss afnocrtthio tnasr gfeotrs , eaxdedcituitoinoanl ocfo tmhem pernotgs rtaom b ea nrdec teoi vpeedrm anitd ffroollmow thsi: si nindtiecraitmo rr u(8le)(. a'T)-h(ee)s,e gwenereer aals
improving its management performance. considered by the Department. A final management; indicator (10)(a)-(b),
Section 502 also provides that if a PHA rule will be issued only after the procurement; indicator (11), utilities;
substantially defaults upon its Department has had the opportunity to indicator (12)(b), Comprehensive
agreement or with respect to other review comments submitted on this Occupancy Plan, and the reporting
interim rule and to assess its experience requirements in indicators (12)(a),
covenants or conditions to which it is
subject, the Department is permitted to in implementing the PHMAP program occupancy; (13)(e), financial
under this interim rule. management; (15)(el. modernization; and
solicit proposals from other public
(16)(d), development.
housing agencies and private housing Public Comments
Two performance standards have
management agents for the management
The Department received 114 been removed as a result of comments
of the housing administered by the
comments on the PHMAP proposed rule. received: standard (9)(b), work order
defaulted PHA. Alternatively, following
The great majority of these were response time: and standard (15)(e),
a default, the Department may petition
received fi’om PHAs, but comment from timeliness of management
the appropriate State or Federal court to
industry organizations, resident improvements. The comments indicated
appoint a receiver to meuiage the
organizations, cities, towns, individuals, that the concept of work order response
defaulted PHA. The Department may
also require a defaulting PHA to make and a congressional subcommittee were time was already addressed in indicator
omtahnear gaicncge apitla obrle p aarrrta onfg tehme ehnotuss finorg in als'Toh ree fcoelilvoewdi.n g is a discussion of (s6t)a,n oduatrsdta fnodri mnga nwaogrekm oerndte rims. pTrhoev ements
the best interests of the residents. PHMAP comments and the was eliminated because the major
Department’s responses to them. This aspects of management improvement
A proposed rule was published in the discussion is organized according to,
Federal Register on April 17,1991, with first, general comments that resulted in are adequately documented elsewhere
a 60 day comment period. The changes to the overall organization of in the modernization program.
Department received 114 comments on the rule; second, comments that At the urging of comments submitted
the PHMAP proposed rule. addressed specific sections in the by members of Congress, industry
The 92 App. Act, passed after the proposed rule; third, “other” comments; organizations (National Association of
publication of the proposed rrile, amends and finally, comments on specific Housing and Redevelopment Officials
NAHA Section 502 in four ways: the PHMAP indicators. [NAHRO], Coimcil of Large Public
number of factors that may be used to General Comments. ’The management Housing Authorities [CLPHA], and
assess the management performance of assessment of a PHA imder the Public Housing Authorities Directors
PHAs is limited: the evaluation of PHAs proposed rule was based upon the Association [PHADA]), and others, the
must be administered flexibly to ensure PHA’s grade or score on management Department has also consolidated the
that they are not penalized for indicators and standards of performance following indicators/standards fiY>m the
circumstances beyond their control; the within those indicators. While this basic proposed rule: indicator (2), unexpended
weights assigned to indicators must approach was generally accepted by modernization funds, has been
reflect the differences in management those submitting comments, specific consolidated with standards (a)-(d)
difficulty that results from physical aspects of it were called into question. A within indicator (15), modernization;
condition and neighborhood number of the comments stated that indicator (7), annual inspection and
environment; and the determination of a PHMAP had too many indicators/ condition of units, has been
PHA’s status as “troubled with respect standards; that some of the indicators/ consolidated with standard (9)(a),
to the program under section 14" is to be standards were duplicative and should annual inspection of systems: the four
based upon factors solely related to its be consolidated; and that the indicators/ standards within indicator (14),
ability to carry out that program. In a standards that seemed more concerned residents’ quality of life, have been
related 92 App. Act amendment to with measuring compliance with HUD consolidated into one indicator; and the
section 14 of the U.S. Housing Act of requirements than with measuring three remaining standards within
1937, the determination of whether a management performance should be indicator (16), development, have been
PHA is “troubled with respect to the eliminated fit)m PHMAP. consolidated into one indicator.
2162 Federal Register / VoL 57, No. 12 / Friday, January 17, 1992 / Rules and Regulations
Three of these four consolidated performance differences in PHAs, or assessment process, and will rely on
indicators have been divided into that other adjustments, for example, comments it will receive and its
components to focus on particular ones based on the type of population experience in administering the program
aspects of management assessment; served or the nature of the surrounding under the interim rule in doing so.
Indicator (2), modernization; indicator community, were more appropriate. The Two comments stated that no
(7), annual inspection and condition of size-based adjustment is eliminated in consideration was given to factors
units and systems; and indicator (12), the interim rule and the standards that beyond a PHA’s control, e.g., land
development. The application of applied to smaller PHAs are used in availability or lawsuits. The 92 App. Act
components will be discussed later in those indicators that remain from the amendments also require that PHAs not
this preamble in connection with the proposed rule. Rather than using scoring be penalized because of factors beyond
subject of computing the assessment adjustments, the interim rule provides their control. The proposed rule
score. for the adjustment of a PHA’s provided for modifcation and exclusion
A number of the comments suggested designation from troubled to standard requests that PHA could use to
additional indicators should be included status or from standard to high demonstrate the existence of factors
in PHMAP, as follows: (1) Lease performer status based upon the beyond its control to avoid penalization.
enforcement; (2) support by local emphasis to be given to physical The interim rule continues to provide
government (per cooperation agreement condition and neighborhood this option. In addition, several of the
or financial committment); (3) housing environment, as required by the 92 App. indicators now have exemptions based
type and age of units; (4) classifying die Act. The approach of not providing any on factors beyond a PHA’s control. The
type of neighborhood the housing is specific scoring or status adjustments score for an indicator to which an
located in; (5) PHA involvement in the other than those required by law is exemption applies is not included in the
community; (6) affirmative action/ being taken to permit the Department to calculation of the overall PHMAP score,
minority business compliance; (7) acquire experience with the program and a PHA is thereby not penalized for
Resident Management Corporation and make more valid determinations on those particular factors beyond its
performance; and, (8) an indicator to what additional adjustments, if any, control.
measure a PHA’s creativity, flexibility, would be appropriate. Comments are One comment stated that the current
and initiative. The Department has specifically invited on what scoring or system of checks and balances to
considered these suggestions but has status adjustments would be oversee PHA management is adequate
determined, in accordance with the appropriate in the final rule. and PHMAP is not necessary. This
majority of comments received and the Comments are also invited on the 92 comment overlooks the fact that there is
92 App. Act amendments to section 502 App. Act requirement to give weight to a statutory mandate to establish a
that place a limit on the number of the differences in the difficulty of management assessment program for
indicators that can be used, to reduce managing developments that result from PHAs using, at least, the seven
the number of indicators rather than to their physical condition and indicators listed in section 502 of NAHA
include additional indicators at this neighborhood environment. To put this and up to five others deemed necessary
time. However, the areas listed in items requirement into e^ect in the initial year by the Department. In addition, the
(3) and (4) of this paragraph will be of PHMAP implementation, the Regional Department believes that PHMAP
given active consideration in the interim Administrator shall consider whether or enhances the current system of checks
rule because of the 92 App. Act not to designate a PHA as troubled or and balances, by providing a means of
requirement that the differences in mod-troubled or as a high performer in assessing all PHAs with uniform
management difficulty that result from accordance with § 901.125. If a PHA's criteria.
physical condition and neighborhood score falls within ten points below the
Section 901.05 Definitions
environment be reflected in the point value established for troubled,
management assessment process. mod-troubled or high performer One comment stated that the rule
Several comments stated that the designation, the Regional Administrator should include a definition of
method of adding, amending or shall take into consideration the extent “deficiency". The Department agrees
removing indicators by publishing a to which a PHA’s performance and will include a definition in this rule.
notice of the change in the Federal difficulties are attributable to the
Section 901.100 Data Collection
Register, as planned in the proposed physical condition of its development(s)
rule, would violate the Administrative and/or the nature of neighborhood The certification requirement
Procedures Act. Because of these environment. If the Regional attracted a number of comments. Fifteen
concerns, the Department has decided to Administrator determines that a PHA’s comments objected to the requirement
include the indicators in full in the performance difficulties are attributable for the PHA attorney to attest to a
interim rule. Any amendments to the to physical condition and/or PHA’s certification, often citing the
indicators will follow after an neighborhood environment rather than sufficient assurances provided by the
opportunity for notice and comment, to poor management practices, the other required signatories and the
using the same procedure as any other Regional Administrator may withhold additional expense of an attorney
change to the rule would follow. troubled or mod-troubled designation or review that is especially significant to
The proposed rule provided a scoring award high performer designation. The smaller PHAs. The Department agrees
adjustment for indicators according to Department, in the interim rule, has with these observations and has
PHA size, with large PHAs (those chosen this method to implement the dropped this requirement.
having more than 1250 units) being clear, statutory intent to include Three comments stated that HUD has
required to meet less stringent standards considerations of physical condition and no authority to suspend or debar
than small PHAs. While a number of neighborhood environment in the signatories of the certifications. It may
comments approved of this approach, a management assessment process. be that what suspension or debarment
greater number argued that the size- However, the Department will seek to actions are available to the Department
based adjustment in the proposed rule develop a more exact method of were misunderstood in these comments.
was not sufficient to account for integrating these two factors into the The Department has authority to
I
Federal Register / Vol. 57, No. 12 / Friday, January 17, 1992 / Rules and Regulations 2163
suspend or debar signatories in rely on the representations made to year, except for the first year of Pi-IMAP
accordance with 24 CFR part 24. A them by the ^ecutive Director. The implementation, in which an accelerated
person debarred or suspended in this Department understands that board schedule will be followed as described
way is excluded from Federal financial members are more generally concerned fully in the discussion and charts below.
and nonHnancial assistance and with policy issues and often rely on their The purpose for using the beginning of a
benehts under Federal programs and staff to provide them with information PHA’s fiscal year is to enable the Field
activities. on day to day details. Where their Offices to distribute the workload for
One comment requested the reliance is reasonable under the 3,135 PHAs across the Federal Fiscal
Department to specify the sanctions for circumstances of the particular case, Year.
intentional false certification, and asks board members are not penalized. The interim rule also states that if a
how HUD will determine intentional However, the matters to be certified PHA does not submit its certification, or
false certification. The proposed rule under PHMAP are of a more general submits its certification late, this may be
lists a range of sanctions that may be nature and reflect management trends cause for the PHA to receive a
used, as would be deemed appropriate rather than day to day details. Because presumptive rating of failure in all of the
under the circumstances. The of this, and since the Board of PHMAP indicators, which may result in
Department will make a determination Commissioners is the governing body of, troubled or mod-troubled designations.
of intentional false certification on the sets policy for, and officially acts on
Six comments stated that the time
basis of any adequate evidence, that is, behalf of, the PHA, the Department has
table for data collection is too short. The
information sufficient to support the determined that the Board chairperson
Department agrees to change the time
reasonable belief that an intentional should be required to sign the
line for the submission of data to allow
false certification has occurred. This certification.
a PHA additional time to tabulate year
information may be obtained from a One comment stated that the
end data and submit its certification to
thorough review, investigation, audit, or certification is too costly because much
the Field Office. This interim rule
any other source that produces adequate of the information sought is not
establishes the general rule for
evidence of intentional false currently tracked by PHAs. Specifically
submitting data that requires a PHA to
certification. The interim rule makes cited were certifications related to work
submit its certification 90 calendar days
clear that the determination of orders, maintenance and inspections.
after the beginning of its fiscal year.
intentional false certification and the The Department has determined that
However, because of the needs of the
sanction imposed may be appealed. these certifications are necessary to
Comprehensive Grant Program (CGP) to
Three comments stated that 45 days implement the statutory indicators that
identify mod-troubled PHAs for Federal
after the publication of the rule is not require the assessment of PHA
Fiscal Year (FFY) 1993 and to develop a
sufficient time for certification to be performance with regard to work orders,
provided. The Department stated in the maintenance and inspections. The management needs assessment
proposed rule that only in the first year Department considers certification to be component, the submission and
assessment of PHMAP data in the initial
of PHMAP implementation, for the the least burdensome method of
year of implementation under this rule
purposes of the Comprehensive Grant gathering the information for these
Program, would PHAs with 500 or more required assessments. The Department will take place in three phases.
public housing units under their is aware that those PHAs that currently The following charts show the
management be required to submit have no system for tracking this certification submission schedules and
certification within 45 calendar days information will expend more effort in Field Office assessment schedules for
after the publication of the rule. This preparing certifications the first year of the three phases of PHMAP in the initial
interim rule also requires an accelerated PHMAP, but certification will be year of its implementation;
schedule for submission of certifications substantially less burdensome in all First Phase Submission
in the initial year of PHMAP subsequent years once a PHA
implementation, as described fully in the implements a tracking system. To 500-1- unit PHAs shall submit PHMAP
discussion and charts below. These time further facilitate ease of reporting, items certification based upon their 1991 fiscal
limits are necessary for the timely that are currently being certified to will year by March 2,1992, which is 45
implementation of the Comprehensive be incorporated into existing HUD calendar days after the publication of
Grant Program. forms, where possible. The Department the PHMAP interim rule in the Federal
Three comments stated that HUD believes that a well-managed PHA Register. These data submissions will be
lacks the resources to check should normally be tabulating and used for the management needs
certifications. The Department will submitting the information required on assessment for FFY 1992 CGP for all
attempt to maximize the effectiveness of the certification form on a regular basis 500-1- unit PHAs. In addition, these data
the resources available to it and perform to its Board of Commissioners. submissions will be used for those 500-1-
confirmatory reviews of PHAs on a risk One comment suggested that unit PHAs with their fiscal year
management basis. The procedure that certification and HUD review should not beginning (FYB) 01-01-92 for the
will be followed is described more fully take place during the budget review; management needs assessment and
below, in the preamble discussion of they should take place on the semi¬ mod-troubled determination for FFY
Field Office functions. The Department annual report date. The Department 1993 CGP. Field Offices will complete
is considering other methods to verify agrees that the certification should not this first phase assessment within 90
certifications. take place during the budget review calendar days after the publication of
One comment stated that the wording process, and the interim rule requires the interim rule in the Federal Register.
of the certification is too broad and PHA PHAs to submit certification 90 calendar The following chart presents the first
board members should be permitted to days after the beginning of their fiscal phase submission schedule:
2164 Federal Register / Vol. 57, No. 12 / Friday, January 17, 1992 / Rules and Regulations
PHA FYB Submission Data source FO assessment
01-01-09 12-31-91 90 calendar days after FR.
04-01-09 03-31-91 90 calendar days after FR
07-01-92..-... 06-30-91 90 calendar days after FR.
10-01-09 09-30-91 90 calendar days after FR.
Second Phase Submission determination; 1-249 and 500unit the mod-troubled determination. For the
PHAs with FYB 04-01-92. 07-01-92 and 250-499 unit PHAs, these submissions
1-499 unit PHAs with FYB 01-01-92
10-01-92, and 250-499 unit PHAs with will be used for the management needs
shall submit certifications for the
FYB 07-01-92 and 10-10-92, shall submit assessment and the mod-troubled
immediate past Hscal year 90 calendar
certifications for the immediate past determination for FFY 1994 CGP. Field
days after the beginning of their fiscal
fiscal year 90 calendar days after the Offices will complete the second phase
year. For the 250-499 unit PHAs, these
beginning of their fiscal year. For the assessments 90 calendar days after
submissions will be used for the 500-f unit PHAs, these submissions will PHAs submit certification. The following
management needs assessment for FFY
be used for the management needs chart presents the second phase
1993 CGP, including the mod-troubled assessment for FFY 1^3 CGP. including submission schedule:
PHA size PHA FYB Submission Data source FO assessment
01-01-02 04-01-92 12-31-91 07-01-92
04-01-92 07-01-92 03-31-92 10-01-92
1-249 units, 250-499 units, and 500+ units.-..... 07-01-02 10-01-92 06-30-92 01-01-93
1-249 units, 250-499 units, and 500+ units.-.-.-.. .. 10-01-92 12-31-92 09-30-92 04-01-93
Third Phase Submission submit certifications based upon their complete the third phase assessments 45
1991 fiscal year, by June 1,1992. These calendar days after PHAs submit their
250-499 unit PHAs with FYB 04-01-92
submissions will be used for the certifications. The following chart
shall submit certifications based upon
management needs assessment for FFY presents the third phase submission
their 1992 fiscal year, and 250-499 PHAs 1993 CGP, including mod-troubled schedule:
with FYB 07-01-92 and 10-01-92 shall determination. Field Offices will
PHA size 1 PHA FYB 1 Submission Data source | 1 _FO assessment
1
1
250-499 unita. 04-01-92 06-01-92 03-31-92 07-15-92
250-499 units. 07-01-92 06-01-92 06-30-91 07-15-92
10-01-92 06-01-92 09-30-92 07-15-93
Two comments inquired as to what where appropriate. The indicators in appropriate way, if any, to attain
period will be covered in the initial which PHAs may elect to be scored on equitable comparisons among PHAs
assessment. The Department will assess data as of a certain date or an average through the use of scoring adjustments,
a PHA on its immediate past fiscal year over a period of time are vacancy as discussed more fully below.
for the initial year and aU subsequent number and percentage, and TARs.
Section 901.105 Computing Assessment
years. Eight comments suggested variations
Score
Among the comments were of a phase-in or delay of PHMAP
suggestions that PHMAP not rely on the implementation for periods ranging over Thirty-nine comments addressed the
fiscal year as an event marker, or not six months, one year, or two years, or issue of appropriate scoring
use annual due dates, or measure running PHMAP as a trial or advisory adjustments, with many disagreeing
certain indicators as of the same day for program. The Department disagrees with the use of a large/small PHA
all PHAs. The Department disagrees because this program and its basic designation as in the proposed rule, or
with these comments and will use the parameters are required by statute. The suggesting other or additional
end of a PHA’s fiscal year as the time to Department will, however, first adjustments to be used. Suggestions
perform the PHA’s annual performance implement the program through this were received to make scoring
assessment, since PHAs compile and interim rule rather than a final rule. In adjustments on the basis of: (1) Age of
submit other annual reports at this time. this way, additional comments may be stock; (2) demographics; (3) more leeway
One comment suggested the use of submitted on changes fi'om the proposed for small PHAs; (4) more leeway for
annual averages, not status as of a rule, and the initial years of PHMAP will large PHAs; (5) more strict standards for
certain date, in measuring performance. be used to gain experience that will large PHAs; (6) State and local laws and
The Department agrees that PHAs enable the Department to assess and local conditions; (7) the number of
should be given the option of using refine the program in a final rule. The elderly units vs. the number of family
averages over a period of time. The Department is particularly interested in units; (8) a two tiered system with strict
interim rule has revised the indicators to receiving comments from PHAs, standards for newer or modernized
permit PHAs to use status as of certain residents, industry and resident groups, developments in good condition; (9)
date or averages over a period of time. and other interested parties, on the most urban vs. rural environments; (10)
Federal Register / Vol. 57, No. 12 / Friday, January 17, 1992 / Rules and Regulations 2165
densely populated developments vs. of the condition of PHA stock and competent contract administration; and
scattered site housing; and (11) thriving delivery of services to PHA residents. (d) with adequate budget controls. The
communities vs. depressed communities. On this basis, four indicators are given a unexpended funds and timeliness of
The Department acknowledges the high weight of three: vacancies; rents fund obligation components reflect the
differences that exist among PHAs and uncollected; annual inspection and - timeliness standard of the 92 App. Act,
believes that some uniform adjustments condition of units and systems; and and the other components of this
on the basis of signiHcant differences for resident initiatives. Two indicators are indicator match up one-for-one with the
management assessment may be given a medium weight of two: remaining statutory standards.
appropriate. However, the comments modernization; and imit turnaround. Six The five components, after being
received indicate the lack of consensus indicators are not weighted: energy weighted, have a potential maximum of
and difficulty in proceeding on this consumption; outstanding work orders; 80 points. In order to calibrate the
issue. The Department does not, tenants accounts receivable; operating overall modernization indicator to the
therefore, include any scoring reserve; routine operating expenses; and zero to ten point scale used for every
adjustments in this interim nUe, development. other indicator before weighting, the
although it will, in accordance with the Because each indicator is graded from total component score of the
92 App. Act requirement, either zero to ten points, indicators with a modernization indicator is divided by
withhold troubled or mod-troubled weight of three have a weighted value of eight, and the result is roimded to one
designation or proceed with high zero to 30 points and indicators with a decimal place. For example, if a PHA
performer designation based upon weight of two have a weighted value of scored 60 points as the weighted sum of
consideration of the differences in the zero to 20 points. A PHA being scored its components on modernization, then
difficulty of managing developments for ail 12 indicators could receive a its PHMAP indicator score for
that result from their physical condition maximum total of 220 points. PHAs with modernization would be 7.5 (the result
and/or the nature of their neighborhood indicators not examined because of of dividing 60 by eight and rounding to
environment. During the initial exclusion requests would have a smaller one decimal place). In computing the
implementation period of PHMAP under maximum total of points. The overall PHMAP score, the
the interim rule, the Department will percentage score of a PHA is the result modernization indicator score of 7.5 in
consider any additional comments of dividing its actual number of points this example would be multiplied by the
submitted on this issue, analyze the by its potential maximum (for the overall modernization indicator weight
operation of the program with particular indicators that are examined) and of two.
interest in the types of exclusion and multiplying by 100. For example, if a For determinations of mod-troubled
modiHcation requests received, and PHA were graded on all 12 indicators status for the purposes of the
consult with PHAs, residents and and received 176 points, its percentage Comprehensive Grant Program, any
industry groups to develop the most score would be 80 (176 divided by 220, score on the PHMAP modernization
appropriate way to attain equitable with the ratio multiplied by 100). On the indicator of less than 6.0 (or fewer than
comparisons and scoring adjustments other hand, if the PHA scored 176 points 48 points on the component-weighted
among PHAs. out of a potential maximum total of 200 preliminary score) will designate a PHA
Four comments addressed the process points, its percentage score would be 88 as mod-troubled. During the initial year
of computing the PHMAP score, stating (176 divided by 200, with the ratio of PHMAP implementation, the
that the calculation of total points is multiplied by 100). Department will give Field Offices
unclean that there is no discussion The 12 indicators in this interim rule sufficient time to assess PHA
provided of how the weighting system is provide the basis for overall scoring and modernization performance and compile
derived; and that there is no discussion assessment. Three of the indicators are accurate data so that designations of
of the statistical bases of standards and divided into subparts or components, to mod-troubled can be made for the
grades. The Department did discuss provide a fairer and more accurate second year of Comprehensive Grant
these topics at some length in the measure of different aspects of PHA Program funding. The Department will
preamble of the proposed rule, and will performance on those indicators. The not reduce any PHA's Comprehensive
not repeat that discussion here. The indicators with components are Grant Program FFY1992 formula
Department does believe that in order modernization; annual inspection and allocation due to a mod-troubled
for PHMAP to be a useful tool for PHAs condition of units and systems; and designation.
to perform their own assessments, the development. The PHMAP grade for the indicator of
program should be as uncomplicated as The modernization indicator consists development is computed by grading its
possible. One area in which the of Hve components, each initially graded four components fi'om zero to ten points,
Department is simplifying the process is from zero to ten points and then then weighting these four component
in the weighting or multiplication of the weighted as follows: unexpended funds scores as follows: quality of contract
points scored in an indicator to reflect over three years old, x2; timeliness of administration, xl; timeliness of
its importance or significance in relation fund obligation, xl; contract development, x2; quality of physical
to other indicators. The proposed rule administration, xl; quality of physical work, x3; and budget controls, xl. The
used weighting factors that ranged from work, x3; and budget controls, xl. These weighted component score is divided by
one to five. In the interim rule, Ae range factors correspond to a requirement of seven, with the result rounded to one
of weighting factors is more limited and the 92 App. Act that, in determining decimal place.
the points scored in an indicator will be whether a PHA is troubled with respect The PHMAP grade for the indicator of
weighted or multiplied, if at all, by two to the modernization program, the annual inspection and condition of units
or three only. Department consider only the PHA’s and systems is computed by grading its
The Department has determined, ability to carry out the modernization four components from zero to ten points,
based on its experience with PHAs, that program effectively based upon the and weighting these four components as
indicators receive a higher weight PHA’s capacity to accomplish the follows: systems to track inspection/
primarily if they reflect a management physical work: (a) With decent quality; repair of units, xl; annual inspection of
aspect closely related to the key areas (b) within a timely manner; (c) under units, xl; correction of unit deficiencies.
2168 Federal Register / Vol. 57. No. 12 / Friday. January 17. 1992 / Rules and Regulations
x3; inspection and repair of systems, x3. during the appeals process, unless The Department received comments
The weighted component score is highly unusual circumstances are that suggested the elimination of high
divided by eight, with the result rounded discovered after a PHA submits its performer status and the use of a simple
to one decimal place. certification request. Modification and pass/fail system; or the use of a pass/
Several comments suggested the exclusion requests submitted during the fail system with a continuum of levels
restructuring of grades for more appeals process that do not reflect within fail or troubled. The Department
flexibility. The Department has revised highly unusual circumstances disagrees with these suggestions and
the grading of the indicators remaining discovered after a PHA submitted its has determined that the present, three¬
in the interim rule to reflect the certification will not be considered. tiered system of high performer,
comments received and to provide more Another comment asked what standard, and troubled (including mod-
flexibility. The grades now reflect a standard HUD will use to evaluate these
troubled] will be used in the interim
range of zero to ten points, rather than requests. The Department requires a
rule. Absent any experience indicating
zero to five points as in the proposed PHA to submit supporting
the contrary, this system seems the most
rule. The rule will include the following documentation to justify its request for
chart that assigns the points attributed an exclusion or modification. This appropriate way of implementing the
to each grade: documentation should provide a PHA's authorizing statute, section 502 of
reasons and the supporting data for NAHA, which requires the designations
Grade and Points requesting the exclusion or modification. of troubled and mod-troubled, and
A 10.0 HUD will then make its determination specifically permits the designation of
B B.5 using the standard of whether the high performer. The Department will
C 7.0 exclusion or modification request is identify and commend PHAs that meet
D 5.0
reasonable under all of the the performance indicators established
E 3.0
circumstances considered. under PHMAP in an exemplary manner,
F 0.0
One comment stated that the rule in accordance with section 502 of
The point values of each grade were should provide examples of required NAHA.
revised to reflect a true percentage supporting documentation. The
Two comments stated that the
value for grade “C”. In the proposed Department will issue handbook
rule, grade “C” equalled a point value of guidance that will include examples of Department has too much discretion in
3.0, or 60%. In the revised grade points, required supporting documentation. assigning status. The proposed rule
grade “C” equals a point value of 7.0, or One comment stated that modification provides that HUD “may” designate a
70%, which is a true percentage for requests should be open for public PHA as a high-performer, standard or
grade “C”. inspection. The Department agrees. A troubled. The Department disagrees
One comment suggested that scores PHA that has an exclusion or with these statements, and believes the
should be computed on a project, not modification request granted is on a Regional Administrator should have the
PHA, basis. The Department disagrees different footing from other PHAs with discretion to deny, for example, a PHA
since the purpose of PHMAP is to assess respect to the area covered by the high performer status for substantial
the overall management performance of request. The decision to grant a request noncompliance by a PHA in one or more
PHAs, not PHA management of and the basis on which it was made areas. This subject will be discussed
individual projects. should, therefore, be an open record that further, later in this preamble under
Comments were received that gives the public confidence in the “Regional Administrator functions."
suggested additional categories for integrity of the process. Similarly, an A comment stated that PHMAP scores
designating the status of PHAs. The open record of requests that are denied should be open to public inspection. The
Department has determined not to use can dispel any suggestion of favoritism, Department agrees. The local
any designations in the first year of provide guidance for future actions, and
community, residents, local and State
PHMAP implementation other than high insure consistency in the program. For
officials, and the public should know
performer, standard and troubled. The these reasons, the records of exclusion
whether or not a PHA is performing in a
Department will use the first year of and modification requests will be open
PHMAP to continue to assess the for public inspection. capacity to preserve and protect its
instrument and determine the most The Department has further public housing developments and is
appropriate ways to designate PHAs. determined that a policy of openness in operating them in accordance with
all areas of PHMAP is in the public Federal law and regulations. To ensure
Section 901.110 PHA Request for
interest, for the reasons discussed that those elected to represent the public
Exclusion or Modification
immediately above, and particularly are informed of the performance of the
A number of comments stated that the because what is being assessed is the PHAs within their purview, the
most common or expected exclusions management of public housing. The Department will notify local and State
should be listed in the rule or handbook. interim rule provides in a new § 901.155 officials of a PHA’s score once it has
The Department will issue handbook for the Field Office to maintain PHMAP been finally determined.
guidance that will include examples of files, including certifications, the records This interim rule states that a PHA
the most common or expected exclusion of exclusion and modification requests, that achieves a total weighted score of
and modification requests. Handbook appeals, and designations of status 90% or above on all of the indicators
guidance will stress that extenuating based on physical condition and may be designated as a high performer.
circumstances should be addressed at neighborhood environment, as open
A PHA that achieves a total weighted
the time of PHA certification when a records, available for public inspection
score of less than 60% on all of the
PHA submits its requests for in accordance with any procedures
indicators may be designated as
modifications and exclusions. established by the Field Office to
Handbook guidance will also stress that minimize disruption of normal office troubled. A PHA that achieves a total
a PHA should submit requests for operations. weighted score of less than 60% on the
modifications and exclusions at the time Section 901.115 PHA Scores and modernization indicator may be
it submits its certification rather than Status designated as mod-troubled.
Federal Register / Vol. 57. No. 12 / Friday, January 17, 1992 / Rules and Regulations 2167
Section 901.120 Field Office Functions basis in the following order. (1) Size; (2) noncompliance with legal or contractual
Several comments stated that the borderline mod-troubled designation (5% requirements by the PHA. Areas of
proposed rule places too much of a below and above the percentage for substantial noncompliance include, but
burden on the Field Office. The mod-troubled designation); (3) are not limited to, noncompliance with
comments characterized the Field borderline troubled designation (5% statutes (for example. Fair Housing and
Offices as competent and hardworking, below and above the percentage for Equal Opporbmity statutes); regulations
but too overburdened, understaffed, and troubled designation); (4) those PHAs (for example, 24 CFR part 85); or the
poorly trained to implement the whose PHMAP scores or individual Annual Contributions Contract (ACC)
program. Concerns were expressed that indicator scores indicate a negative (for example, part II, section 307,
no time would be left for the Field trend over a period of three to five Personnel). Substantial noncompliance
Offices to provide technical assistance years; and (5) high performer with the legal and contractual
because of other duties imposed upon designation. requirements to which it is subject casts
The Field Office will transmit a letter
them by the rule. The Department doubt on the PHA’s capacity to preserve
informing a PHA of its PHMAP score
considers the Field Offices capable of and protect its public housing
and status (notification letter) within 180
carrying out their duties under the rule. developments and operate them in
calendar days after the beginning of the
Field Offices have been assessing PHA accordance with Federal law and
PHA’s fiscal year. If a PHA appeals, a
performance on an annual basis (annual regulations. Under these circumstances,
second notification letter will be sent to
performance review) for the past several a high performer designation would not
the appointing official(s), and to the
years, and the Department believes that be appropriate.
PHA after the appeals process has been
a change in the assessment criteria will concluded. If a PHA does not appeal, a If high performer designation is
not overburden Field Office personnel. notification letter will be sent to the rescinded, the Regional Administrator
Field personnel will be trained in the appointing official(s) 195 calendar days will send written notification to the
new PHMAP program. The provision of after the beginning of the PHA's fiscal PHA, within 15 days of the decision,
technical assistance to PHAs under year when ffie 15 day period for the with an explanation of the reasons. An
Memoranda of Agreement will be PHA to appeal has expired. (The information copy will be forwarded to
ensured under PHMAP. appeals process, as revised for this the Assistant ^cretary for Public and
Two comments stated that Field interim nile, is fully described later in Indian Housing.
Offices lack adequate travel funds for
this preamble). Each Field Office will In the initial year of PHMAP
on-site reviews. The Department agrees
transmit notification letters pertaining to implementation, the Regional
that adequate travel funds are not
all PHAs in its jurisdiction, to the Administrator shall consider whether or
available to review each PHA in every
Governor and members of Congress, not to designate a PHA as troubled or as
program area once a year. However,
once a year, at the beginning of the a high performer in accordance with
Field Offices will continue to practice
Federal Fiscal Year. § 901.125. ’This section implements the
accoimtability monitoring, and review of
One comment stated that CLAP 92 App. Act requirements that weight be
PHAs, including confirmatory reviews, incentives should not be automatically given to the differences in the
will be conducted on a risk management tied to CIAP performance, but should be management difficulty that result from
basis. within the discretion of the Field Office. physical condition and neighborhood
One comment stated that there is too
The Department disagrees and places environment, and that the evaluation
much variation in Field Offices for discretion with the Regional system be administered flexibly to
objective field judgments to be made Administrator. ensure that PHAs are not penalized for
under the program. The Department
agrees that it is impossible to take all Section 901.125 Regional circumstances beyond their control. If a
subjectivity out of this rule, but the A dministrator Functions PHA’s score falls within ten points
below the point value established for
subjective element is a given in any There were no comments received on
troubled, mod-troubled or high
judgmental process. The intent of Regional Administrator functions, but
performer designation, the Regional
PHMAP is to be as objective as possible. changes due to comments in other areas
Administrator shall take into
Indicators are based on numerical data have necessitated changes in Regional
consideration the differences in the
whenever appropriate. The Department Administrator functions. The interim
difficulty of managing developments
also recognizes that a cold, hard, rule states that the Regional
that result from their physical condition
objectivity based entirely on numerical Administrator may review a PHA's
and/or the nature of neighborhood
data may not always be appropriate. For score prior to the transmission of the
environment. If the Regional
this reason, the Regional Administrator notification letter to the PHA, within 180
Administrator determines that a PHA’s
has the discretion to review and verify a calendar days after the beginning of the
performance difficulties are attributable
PHA’s score prior to the transmission of PHA’s fiscal year. The Regional
the score to the PHA. To avoid the Administrator will have discretion to to physical condition and/or
neighborhood environment rather than
abuse, or even the appearance of abuse, determine the method for this review. In
to poor management practices, the
of this discretion, the PHMAP process is the initial year of PHMAP
an open record. implementation and for the purpose of Regional Administrator may withhold
The Department will issue handbook the public housing Comprehensive Grant troubled or mod-troubled designation or
guidance that will require the Field Program under section 14, the review award high performer designation.
Office to perform the PHMAP will be made in accordance with the The Regional Administrator, in
assessment within 180 calendar days schedule set out in the discussion of accordance with handbook guidance,
after the beginning of a PHA fiscal year § 901.100 (data collection), above. may take into consideration as
(or within 90 calendar days after a PHA The Regional Administrator has the appropriate, but not be limited to, the
submits its certification, which is 90 discretion to deny or rescind a PHA’s below listed guidelines in determining
calendar days after the beginning of a status as a high performer so that it will whether to refrain from designating a
PHA Hscal year). Confirmatory reviews not be entitled to any relief or PHA as troubled or mod-troubled or to
will be conducted on a risk management incentives, based on substantial designate a mA as high performer.
2168 Federal Register / Vol. 57. No. 12 / Friday, January 17. 1992 / Rules and Regulations
Management difficulties attributable State officials should know whether or made within 30 calendar days of receipt
to the physical condition for one or more not a PHA is performing in a capacity to of the appeal. The Field Office’s
of a PHA's developments may include: preserve and protect its public housing recommendation and the Regional
1. Age of the development(s): developments and operate them in Administrator’s decision are a part of
2. Size of the development(s); and accordance with Federal law and the record of the appeal.
3. Modernization needs, i.e., the regulations. Elected officials in A PHA must demonstrate that a
development has not undergone particular, as representatives of the successful appeal will have a significant
comprehensive modernization within public, should be aware of the status of impact on its score (e.g., at least 5
the past 20 years; or the development PHAs within their jurisdictions. percentage points increase) or its
has undergone comprehensive However, notification to these parties performance standing (e.g., it will
modernization within the past 20 years, will not occur until after any appeals remove a PHA from troubled
but neighborhood environment has have been heard. As with all other designation, or move a PHA into high
contributed to additional modernization aspects of PHMAP, the appeal shall be performer status). If a PHA appeals on
needs. an open record to provide future the basis of incorrect data, the PHA
Management difficulties attributable guidance and avoid any hint of must document the corrections,
to neighborhood environment for one or impropriety or favoritism. demonstrate the impact of these
more of a PHA’s developments may Eight comments stated that the corrections on its score and supply
include: appeals process is too complex, too reasons for the error. If a PHA appeals
1. Crime: burdensome, and too long. The on the basis of incorrect calculations,
2. Drug activity; Department agrees and the interim rule the PHA must clearly document the
3. Lack of commercial, employment has simplified the appeals process. The calculation errors, demonstrate the
and social services; interim rule, and handbook guidance, impact of these corrections on its score,
4. Age and/or poor condition of the will detail the appeals procedure and and provide corrected calculations. If a
infrastructure; provide time frames for processing PHA appeals on the basis of highly
5. Amount and type of financial appeals and HUD responses. unusual circumstances that were
resources and services provided by the A PHA may appeal its score on the discovered after a PHA submitted its
locality; basis of data errors (incorrect data or
certification and request for
6. Population density; and incorrect calculations], or highly unusual
modifications and exclusions, the PHA
7. Demographics. circumstances that were discovered
The Department believes that a 10 after a PHA submitted its certification must demonstrate the impact of these
point range, equal to ten percent of the dnd request for modifications and unusual circumstances on its score, and
total PHMAP score, in which the exclusions, or on the basis of the submit a request for modifications or
Regional Administrator may act to Regional Administrator’s failure to exclusions, with supporting justifying
withhold troubled or mod-troubled consider physical condition and documentation. An appeal on the basis
status or award high performer status, neighborhood environment in the of the Regional Administrator’s failure
appropriately reflects the weight to be designation of the PHA’s status. In to consider physical condition and
given to the impact of physical condition addition, a PHA has the statutory right neighborhood environment must
and neighborhood environment on to appeal its designation as a troubled demonstrate the presence of these
management capability. A broader and/or mod-troubled PHA, to petition factors and their direct and substantial
range of correction, equal to fifteen, for removal of either of these impact on the management of the
twenty, or more percent of the total designations after it has acted to affected PHA.
PHMAP score, would imfairly skew the improve sufficiently its management A PHA may also appeal the rescission
comparability of assessment scores and performance, and to appeal any refusal of high performer designation. If a PHA
management performance. However, to of a petition to remove these appeals the rescission of high performer
avoid any unjust result fi-om not giving designations. designation, the PHA must clearly
sufficient consideration where merited The deadline date by which the Field demonstrate that the Regional
in individual cases, appeals of PHMAP Office must receive a PHA’s appeal will Administrator’s decision to rescind high
designations of status are specifically be specified in the Field Office performer designation was not
permitted in the interim rule on the basis notification letter. The appeal deadline supported by the evidence.
of the Regional Administrator’s failure date will be the 15th calendar day after in cases where an appeal is denied by
to consider physical condition and the Field Office mails the notification the Regional Office, the PHA may
neighborhood environment, in cases letter, not counting the day the appeal to the Assistant Secretary for
where a PHA’s score falls more than ten notification letter is mailed. If the 15th Public and Indian Housing. The deadline
points below the point value established day falls on a weekend or holiday, the date by which the Assistant Secretary
for troubled, mod-troubled or high deadline date is the next day that is not must receive a PHA’s appeal will be
performer designation. on a weekend or a holiday. Any appeal specified in the denial of appeal letter.
not received by the Field Office by the The appeal deadline date will be the
Section 901.130 Right to Appeal
deadline date will not be considered. 15th calendar day after the Regional
Twelve comments stated that After the Field Office receives an Administrator mails the denial of appeal
notification of a PHA’s status after an appeal, it will review the issues letter, not counting the day the denial of
appeal should only be provided to a presented and forward its appeal letter is mailed. If the 15th day
PHA’s Executive Director, with no recommendation for their resolution to falls on a weekend or holiday, the
notification provided to Senators, or the Regional Administrator. The deadline date is the next day that is not
Governors, because the notification to Regional Administrator will review the on a weekend or a holiday. Any appeal
elected officials would only politicize Field Office recommendation, which will not received by the Assistant Secretary
the issue of a PHA’s status. The include a copy of the appeal, and will by the deadline date will not be
Department disagrees with these render a decision on the appeal. The considered. A PHA may appeal for only
comments and believes that the local Field Office’s recom.mendation and the the reasons discussed above, and only if
community, residents, and local and Regional Aministrator’s decision will be the PHA can produce new