Reginald Walker, MBA Tatum and Associates, LLC
<ul><li>Explain the concept and requirements of the Central Office Cost Center (COCC) under the Final Rule  </li></ul><ul>...
<ul><li>Owners of Multifamily properties employ property management companies for the day-to-day operation of properties <...
<ul><li>Business unit within the PHA that earns income from fees and/or by overseeing other business activity </li></ul><u...
<ul><li>Property Management Fee </li></ul><ul><li>Asset Management Fee  </li></ul><ul><li>Bookkeeping Fee </li></ul><ul><l...
<ul><li>Property management fee </li></ul><ul><li>Bookkeeping fee  </li></ul><ul><li>Asset management fee </li></ul><ul><l...
<ul><li>Fee charged to AMPs for oversight provided by COCC </li></ul><ul><li>Replaces traditional PHA overhead allocations...
<ul><li>80 th  percentile of fees paid by market </li></ul><ul><li>Local HUD multifamily fee schedules </li></ul><ul><li>O...
<ul><li>COCC is permitted to charge a bookkeeping fee for the project accounting function of $7.50 PUM </li></ul><ul><li>B...
<ul><li>Fees charged to AMPs for those tasks that would be residual if all property management functions were contracted t...
<ul><li>Fee charged to the Capital Fund Program for management related to capital activities </li></ul><ul><li>COCC may ch...
<ul><li>Fees charged for all administrative work performed by COCC staff related to the operation of HCV program </li></ul...
<ul><li>Public Housing Development </li></ul><ul><li>Other HUD Programs (ROSS, HOPE VI, etc.) </li></ul><ul><li>Other busi...
<ul><li>PHAs may choose to centralize various front-line expense activities and charge AMPs a fee for these services </li>...
<ul><li>PHAs must adhere to the following: </li></ul><ul><ul><li>Fees must be based on the market rate for the work receiv...
Fee  Fee Calculation  Amount  Management Fee  $40 x 1,000 units x 12 months x 97% occupancy  $465,600  Bookkeeping Fee  $7...
<ul><li>Unlike in the past, front-line expenses and administrative expenses, called fee expenses, will need to be separate...
<ul><li>Certain personnel costs, including: </li></ul><ul><ul><li>Executive Director </li></ul></ul><ul><ul><li>Regional M...
<ul><li>Onsite personnel </li></ul><ul><ul><li>Housing Manager </li></ul></ul><ul><ul><li>Maintenance Technician </li></ul...
 
<ul><li>Improved services provided to each AMP </li></ul><ul><li>Organizational structure allows for greater efficiency </...
<ul><li>Revisions to the Public Housing Operating Fund Program; Final Rule - 24 CFR Part 990 </li></ul><ul><li>Preparing f...
<ul><li>PIH Notice 2007-09, Changes in Financial Management and Reporting for Public Housing Agencies Under the New Operat...
 
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The Central Office Cost Center Training

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Overview of the allowable revenue streams for Public Housing Authorities required to adopt Asset Based Management Accounting

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  • Welcome to Section 3: The Central Office Cost Center.
  • The Central Office Cost Center Training

    1. 1. Reginald Walker, MBA Tatum and Associates, LLC
    2. 2. <ul><li>Explain the concept and requirements of the Central Office Cost Center (COCC) under the Final Rule </li></ul><ul><li>Describe the allowable fees charged by the COCC </li></ul><ul><li>Discuss how asset management might impact the organizational structure of the PHA </li></ul>
    3. 3. <ul><li>Owners of Multifamily properties employ property management companies for the day-to-day operation of properties </li></ul><ul><li>The Central Office Cost Center will operate like a property management company </li></ul><ul><li>Final Rule requires all large PHAs (250 or more units) to establish a COCC </li></ul>
    4. 4. <ul><li>Business unit within the PHA that earns income from fees and/or by overseeing other business activity </li></ul><ul><li>Simplifies administrative requirements </li></ul><ul><li>Provides greater flexibility to support mission of PHA </li></ul>
    5. 5. <ul><li>Property Management Fee </li></ul><ul><li>Asset Management Fee </li></ul><ul><li>Bookkeeping Fee </li></ul><ul><li>Program Management Fees </li></ul><ul><li>Fee-for-Service </li></ul>HUD PHA OLD $ HUD AMP NEW PHA/COCC $ Subsidy $ Fees
    6. 6. <ul><li>Property management fee </li></ul><ul><li>Bookkeeping fee </li></ul><ul><li>Asset management fee </li></ul><ul><li>Program management fees and other business activity </li></ul><ul><li>Fee-for-service (e.g., centralized painting or extermination) </li></ul>
    7. 7. <ul><li>Fee charged to AMPs for oversight provided by COCC </li></ul><ul><li>Replaces traditional PHA overhead allocations </li></ul><ul><li>Based on occupied units and HUD-approved vacancies (not including limited vacancies) </li></ul><ul><li>Average management fee in HUD’s multifamily housing programs was $35 PUM (2004) </li></ul>
    8. 8. <ul><li>80 th percentile of fees paid by market </li></ul><ul><li>Local HUD multifamily fee schedules </li></ul><ul><li>Other compelling local market data </li></ul>
    9. 9. <ul><li>COCC is permitted to charge a bookkeeping fee for the project accounting function of $7.50 PUM </li></ul><ul><li>Based on occupied units and HUD-approved vacancies (not including limited vacancies) </li></ul><ul><li>Average bookkeeping fee in HUD’s multifamily housing programs was approximately $3.50 PUM (2004) </li></ul>
    10. 10. <ul><li>Fees charged to AMPs for those tasks that would be residual if all property management functions were contracted to a third-party ($10 PUM) </li></ul><ul><li>Subject to the availability of excess cash </li></ul><ul><li>Based on total number of ACC units </li></ul>
    11. 11. <ul><li>Fee charged to the Capital Fund Program for management related to capital activities </li></ul><ul><li>COCC may charge up to 10% of total Capital Fund Program grant as management fee </li></ul>
    12. 12. <ul><li>Fees charged for all administrative work performed by COCC staff related to the operation of HCV program </li></ul><ul><li>Two different fees can be charged: </li></ul><ul><ul><li>HCV Management Fee – Higher of either 20% of annual administrative fee or $12 PUM based on number of vouchers leased </li></ul></ul><ul><ul><li>HCV Bookkeeping Fee – $7.50 PUM based on number of vouchers leased </li></ul></ul>
    13. 13. <ul><li>Public Housing Development </li></ul><ul><li>Other HUD Programs (ROSS, HOPE VI, etc.) </li></ul><ul><li>Other business activity </li></ul>
    14. 14. <ul><li>PHAs may choose to centralize various front-line expense activities and charge AMPs a fee for these services </li></ul><ul><li>Examples </li></ul><ul><ul><li>Maintenance </li></ul></ul><ul><ul><li>Legal Services </li></ul></ul>
    15. 15. <ul><li>PHAs must adhere to the following: </li></ul><ul><ul><li>Fees must be based on the market rate for the work received and not the actual cost </li></ul></ul><ul><ul><li>PHAs must use the fee for service approach for centrally provided maintenance </li></ul></ul><ul><ul><li>Centrally provided front-line services must be in the best interest of the AMPs and cannot cost more than if performed on-site </li></ul></ul><ul><ul><li>PHAs must maintain documentation for the fees charged to the AMPs </li></ul></ul>
    16. 16. Fee Fee Calculation Amount Management Fee $40 x 1,000 units x 12 months x 97% occupancy $465,600 Bookkeeping Fee $7.50 x 1,000 units x 12 months x 97% occupancy $87,300 Asset Management Fee $10 x 1,000 units x 12 months $120,000 Extermination Fee-for-Service $50 x 1000 treatments $50,000 Total $722,900
    17. 17. <ul><li>Unlike in the past, front-line expenses and administrative expenses, called fee expenses, will need to be separated </li></ul><ul><li>Fee Expenses: </li></ul><ul><li>An expense of the COCC </li></ul><ul><li>Paid for by fee income generated by COCC </li></ul><ul><li>Front-Line Expenses: </li></ul><ul><li>An expense of the AMP </li></ul><ul><li>Paid for by AMP income (e.g. subsidy and rent) </li></ul>
    18. 18. <ul><li>Certain personnel costs, including: </li></ul><ul><ul><li>Executive Director </li></ul></ul><ul><ul><li>Regional Managers </li></ul></ul><ul><ul><li>Human Resource </li></ul></ul><ul><ul><li>Finance and accounting </li></ul></ul><ul><li>Equipment, furniture, and services necessary to sustain COCC </li></ul><ul><li>Central servers and software supporting COCC </li></ul><ul><li>Refer to Table 7.2 of the Supplement to PIH Notice 2007-09 </li></ul>
    19. 19. <ul><li>Onsite personnel </li></ul><ul><ul><li>Housing Manager </li></ul></ul><ul><ul><li>Maintenance Technician </li></ul></ul><ul><ul><li>Resident Services </li></ul></ul><ul><li>Equipment, furniture, and services required to maintain site-based office </li></ul><ul><li>AMP utility costs </li></ul><ul><li>Refer to Table 7.2 of the Supplement to PIH Notice 2007-09 </li></ul>
    20. 21. <ul><li>Improved services provided to each AMP </li></ul><ul><li>Organizational structure allows for greater efficiency </li></ul><ul><li>Onsite staff provide greater service to tenants </li></ul><ul><li>System enhancements will allow PHAs to operate more efficiently </li></ul>
    21. 22. <ul><li>Revisions to the Public Housing Operating Fund Program; Final Rule - 24 CFR Part 990 </li></ul><ul><li>Preparing for Asset Management Under the New Public Housing Operating Fund Rule (24 CFR 990): A Planning Document </li></ul><ul><li>Demonstration of a Successful Conversion to Asset Management (Stop-Loss) Submission Kit Year 2 </li></ul><ul><li>Demonstrating Successful Conversion to Asset Management: A Site Visit to the Charlotte Housing Authority </li></ul>
    22. 23. <ul><li>PIH Notice 2007-09, Changes in Financial Management and Reporting for Public Housing Agencies Under the New Operating Fund Rule (24 CFR Part 990), issued April 10, 2007 </li></ul><ul><li>Asset Management Help Desk </li></ul><ul><ul><li>Email: [email_address] </li></ul></ul><ul><ul><li>Toll-Free Telephone: 1-800-511-8478 </li></ul></ul>

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