Presentation on theme: "Physical Needs Assessment and Energy Audits for Public Housing"— Presentation transcript:
1 Physical Needs Assessment and Energy Audits for Public Housing U.S. Department of Housing and Urban DevelopmentOffice of Public and Indian HousingOffice of Public Housing InvestmentsPhysical Needs Assessment and Energy Audits for Public HousingHUD Office of Public Housing InvestmentsBruce RiederMay, 2014Thank you for joining us to review HUD’s PNA and energy audit. Many of you may have already viewed some of our online training on this so today I want to focus more on status of the final rules, decisions you need to make in advance of a final rule, and some of the practicalities of proceeding with a PNA including the benefits to you. SHARE EXPERIENCE-property management background and beginning with HUD. For those that are interested, I will continue after this session with a demonstration of the tool itself.11
2 FACTS The status quo in public housing is not sustainable Public housing inventory is decliningMaintaining the physical plant is becoming more challengingPolitical environment is not conducive to a return to an earlier model of public housingRisk Management-alternate structures and fundingRecognize reality of the circumstances to manage risk-to torture a metaphor- is it wise to put all of your eggs into the public housing basket in reliance upon it in the future? No one has perfect knowledge or a crystal ball; the only constant is change.
3 WHY A PNA?Public Housing stands virtually alone in real estate as PNA not being routineThere is no strategy that can be pursued without a PNARAD, LIHTC, Demo, CFFP…Waiting to start reduces ability to respond and creates lost opportunityAll of real estate uses PNA principles-sf home purchase inspection; purchase sell or finance real estate; replacement reserves, preventative maintenance; budget prioritization-myth that private sector housing is different and has all the money it needs every year.
4 HUD’S NEED Accountability to the taxpayer Macro level risk management Capacity building for the PHAsTools not reportsTechnical assistance21st Century information expectations
5 The TrendApr 10 2014Senate Unanimously Passes Warner-Portman Transparency Legislation~ Bipartisan DATA Act allows taxpayers to track every dollar spent by federal agencies ~ ~ ‘Most significant transparency legislation since Freedom of Information Act' ~APRIL 28, 2014-UNANIMOUSLY PASSES IN HOUSEA recent stark example of data and accountability expectations. In a political environment as sharply divided as we currently have there is agreement on the high priority of accountability to taxpayers and transparency of federal expenditures
6 What is a PNA?A Physical Needs Assessment (PNA) is systematic review all of the major physical components of property to result in a projection of future needs and costs to meet those needs.PNA as proposed is a strategic planning tool. It is not a budget but is a budget tool.A PNA can serve as documentation for a long term grant or loan with more proscriptive protocols.It’s the beginning point for a number of other toolsNothing magic about it. Visualize a spreadsheet; simple definition for what can be a very different activity depending upon the use of the PNA; PNA in support of a financial transaction will necessarily have more stringent protocols; HUDs proposed requirement is on the simplest end of the spectrum-truly a baseline.
7 WHAT INFO GOES IN? Inventory data (HUD uses PIC data) Quantity of each physical componentCost to replace each componentEstimated useful life-how long does it last from the time it is “new”?Remaining useful life-how much longer before the component I have in place will not longer be useful and will need to be replaced?This is the same minimum data that goes into any PNA for any process.
8 PNA INSPECTIONAn inspection is only a part of the ASSESSMENT process-the assessment is based on the inspectionNot the same as the UPCSThe PNA inspection is a sample but is more representative of the inventory characteristics than a UPCS samplePhysical Needs ASSESSMENT=data gathering; an inspection; entering the inspection result to a tool; analyzing and adjusting the data
9 What is an Energy Audit?An Energy Audit (EA) is a systematic review of the energy use and requirements for real estate that seeks to identify opportunities for energy savings.While Energy Audits (EAs) and Physical Needs Assessment (PNAs) often involve a review of the same building systems, EAs have historically been completed independently of PNAs.The broader real estate industry is moving aggressively to integrate EAs and PNAs as has HUD’s Mark to Market program.It’s a report card and a note on what you need to consider to do better; just as with the PNA, an EA with more stringent protocols would be used to support a transaction such as an Energy Performance Contract (EPC).
10 BackgroundThe current EA rule at 965 (302) requires only that an EA be performed to state standards but provides no standards of expectation for the result.PHAs are exposed to energy audits of poor value and little usefulness particularly in states that lack standards.The 2005 Energy Policy Act encouraged the integration of utility management and capital planning to maximize energy conservation in Public Housing.The energy audit rule will require a more comprehensive review than currently required-approximately a Level 2 ASHRAE which is the standard for an audit that results in quantifiable improvement that will result from an action
11 Energy Audit Integration Data points from an energy audit will be inserted into the PNA formIdentify ECMs, specify equipment and its cost and estimated useful lifeProvide annual utility usage for the standard component and for the ECM so that a usage savings can be calculatedProvide the current utility cost rateCan use EAs up to 3 years old
12 PROPOSED RULESThe Proposed PNA rule was published in the Federal Register On July 20, The rule itself is 5 pages. The rule and comments received can be reviewed at www. Regulations.govThe Proposed EA rule was published in the Federal Register On November 17, The rule itself is 9 pages. The rule and comments received can be reviewed at www. Regulations.govThese two proposed rules are planned to be consolidated in final form into a single rule that amends the Capital Fund rule.
13 PNA Rule The PNA Rule will require: All PHAs regardless of size to perform a PNA once every 5 years, to update annually, and to submit to HUD in a format determined by HUD-THE GPNA TOOL currently availableThe PNA will have a planning horizon of 20 yearsThe PNA will be coordinated with and integrate data from the required energy auditMinimum qualifications for a PNA provider, can be performed by qualified PHA staffWhy extend the requirement to small PHAs. Why every 5 years; why 20 years; what is the annual update; use current dollars; move toward concurrent performance of PNA and EA
14 PNA Provider Qualifications Experience (5 years) performing physical property inspections and cost estimatingDemonstrated knowledge of applicable building standards and codesDemonstrated knowledge of energy efficiency practicesWorking knowledge of commonly used computer technology (MS Excel, Office etc)OFO is offering energy efficiency/green training program; knowledge of energy efficiency practices can be demonstrated by implementation of an EPC for example; emphasis on experience rather than credentials
15 Energy Audit Rule The EA Rule requires: Continuation of EA performance every 5 yearsSpecific categories of “Core” ECMs to be evaluated including water conservationAn assessment of existing property conditions, maintenance, and resident educationAnalysis of utility bills with comparison to a benchmark if available (Portfolio Manager is an example)BUILDING ENVELOPE; HEATING, COOLING AND SYSTEMS; WATER; POWER/LIGHTING; APPLIANCES. What are a PHAs minimum expectations of what they should get from an energy audit; why every 5 years; subsequent Energy Audits should be less burdensome than the first. Portfolio Manager
16 Energy Audit Rule The EA rule requires (cont’d): Identification and recommendations on ECMs that should be considered by the PHACategorization of ECMs by payback period based upon a simple payback calculationCost of the recommended ECM’s in current $ and expected useful lifeAnnual consumption savings projection for each ECMIdentification of exposures and other opportunityIntroduce consistency into what is reviewed by PHAs; common sense expectations for the result of an energy audit
17 Energy Auditor Qualifications The EA does not require a specific form or formatThe EA rule will establish minimum qualifications for an energy auditor:Experienced in the performance of residential energy auditsShall hold a valid certification from a recognized state or national energy auditor certifying agencyThe energy auditor can be qualified PHA staff or utility company providersCan also achieve qualifications with multiple providers; Association of Energy Engineers, (certified energy auditor, certified energy manager), BPI (Building Performance Institute), and RESNET (Residential Energy Services Network).
18 Energy Audit RuleDoes not require an investment grade energy audit but encourages Life Cycle Cost Analysis (LCCA) for ECMs that may warrant further investigationDoes not require that ECMs recommended by the EA be implemented by the PHA-remains the PHAs business judgmentDifferentiates between “Core” ECMs and “Advanced” ECMsGreen assessment can be included but not requiredWhat is an investment grade energy audit? What are core vs advanced ecms? What is a green assessment?
20 Status and RolloutA working copy of the PNA tool is posted on the HUD website.A contract for training and providing technical assistance to PHAs and field offices is in place.Web based trainings have been prepared and are available to access at HUD.govHUD is accepting voluntary submissionsFINAL DRAFT; HUD WILL NOT BE TRAINING ON HOW TO DO A PNA-WILL TRAIN ON THE TOOL. THERE ARE MORE THAN SUFFICIENT INDUSTRY RESOURCES AND CAPACITY; RECORDED TRAINING SESSIONS AVAILABLE ON OUR WEBPAGE;
21 Implementation DelayHUD has delayed the commencement of implementation.Capital Fund final rule published 10/24/2013.First due date will not be earlier than early 2015.Due dates will be established in an Implementation Notice published concurrently with or shortly after publication of the final rule-6 months minimum advance noticeAlthough contracting all the necessary work is not required, it is recognized that many PHAs will need the resources of a more normalized Capital and Operating fund to proceed with this work. It’s not a question of if but when.
22 Status and RolloutGPNA submission due dates are planned to be 120 days prior to the end of the PHA’s fiscal year. The initial submittal schedule may change depending upon when the final rule is published.June 2 for fye 9/30September 1 for fye 12/31December 1 for fye 3/31March 2 for fye 6/30
23 CURRENT DECISIONS Regardless of when a final PNA rule is effective: PHAs with a current requirement need to decide if they are going to proceed based upon the proposed rules. This is entirely voluntary.Small PHAs are exempted in the CF rule until a notice is issued
24 Proceeding EarlyPHAs may now proceed on a voluntary basis prior to final implementation of the rules.PIC data available by ing request to function migrating to EPICA blank tool, prototype tool, and other resources are available at the HUD websiteSupport available through field officesTo date we have issued more than 500 individually requested PIC data sets to individual PHAs to begin work in the tool on some level. Submissions have already been completed by a number of PHAs
25 Proceeding Early Should a PHA proceed in advance of rule? Risk of final rule changeAssess the PHA’s capacity and resources to proceedNeed to proceed (CFFP, EPC etc)Advantage of better availability of contractorsEarly submittals are being accepted by HUD and are not intended to change future due datesThis is an individual PHA decision based on its particular circumstances. PHAs are now in the best position to control their own scheduling of this activity. HUD intends that early submissions will be accepted as in compliance with a final rule and that the “aging” of data can be up to 3 years. Proceeding with some of the preparation steps prior to a commitment to proceed may suggest a course of action.
26 How to PrepareThe tool will pre-populate with PIC data and will be validated at receipt against PIC data so it is critical that PIC data be current.The tool will rely upon the creation of sample sets of like kind buildings and units at each site. The PHA has the best knowledge to create these sets in advance-what are you going to inspect?
27 How to Prepare Sampling Size Protocol substantially the same as the existing protocol.For dwelling spaces, survey a minimum of 10% of the number of units per project of similar condition;not just a straight 10% sampling if more are required to obtain a diversity of unit characteristics.For non-dwelling spaces, survey up to 100% but at least 50% if conditions are known to vary; or if all spaces are known to be in the same condition, survey at least 20% of the total.
28 How to Prepare Acquaint yourself with the GPNA tool Begin preparing RFP documentsConsider what new improvements you may want to include in projectionsAny PNA relies upon a review of existing documentation as a starting point. Collating the likely documentation that will be needed for a PNA in advance will save time, and can save money if you are using a contractor.Consider if your agency has the capacity to perform in house in whole or in part and if you will want to contract some services; Regardless of the contracting decision; a PNA and energy audit do require involvement and engagement by the PHA to provide information, logistical support, and to review the final product and learn how to work with it
29 Documentation for PNA/EA At least one year of energy bills for all PHA held accounts (tenant held accounts if available); 3 years is recommended.Copies of any previous energy audits, PNAs, EPC documentation, 504 assessments, and other similar property assessmentsMaintenance log or summary, preventative maintenance plan
30 Documentation for PNA/EA Building drawings if availableCurrent bids for major work if available and local cost records and database if developed-determine if a standard or customized cost index will be usedCapital Fund P&E reports for up to 5 yearsUPCS Annual inspection reportsDOING A PNA ON A NEW BUILDING
32 PNA ToolThe primary purpose in creating a tool rather than another report was to provide a project based strategic planning tool.By creating a tool HUD hopes to make more sophisticated and effective planning techniques available to smaller PHAs.The tool makes use of current accessible technology in order to organize large amounts of data and automate as many of the routine calculations as possibleThe tool will be pre-populated with the PHA’s data from PIC and adjusts calculations for non-ACC unitsPerforming a PNA is always a time consuming and tedious process; use current technology to streamline
33 PNA ToolThe PNA Tool is a standalone Microsoft Access based application installed on PHAs desktop, notebook, or network computers. Not necessary for the user to have Access softwareInternet based distribution of the PNA toolThe inspection based tool leads the user through a series of inputs and automatically calculates and produces the 20 year projection as well as a number of useful printable reports.
34 PNA ToolPHA InputsCost, Estimated useful life, quantity, and remaining useful life are the minimum entries required for each applicable component.The PHA divides its sites, buildings, and units into representative sets from which a 10% inspection sample is performed.The PHA enters costs from an index or supportable local data set for replacement or refurbishment of each applicable building component and enters this information in the cost library page.Why a 10% sample; cost index is determined by the PHA from a nationally recognized index or a supportable local cost data set
35 PNA Tool PHA Inputs (cont’d): -The PHA enters an estimated useful life in the cost library for each of the items from a national index or its local supportable data set.-The PHA enters quantity and remaining useful life for each component item on tool created inspection sheets for a sample set of each class of components-site, building exterior, building systems, units, and common areas if applicable. (same classifications as PASS)-The tool (cost library and inspection sheet)is pre-populated with most commonly applicable components but is fully editable by the PHA to reflect their actual componentsEstimated useful lives are taken from national indexes or a supportable local data set. PHAs won’t typically use all of the 289 components listed. Always keep in mind the 4 minimum required entries; the PNA tracks components that are replaced with capital funds, not used to track operating funds
36 PNA ToolFrom the minimum inputs above the tool can calculate the 20 year projection for all applicable property components and create the reports.Once this 20 year projection is created, it is fully editable by the PHA so that various scenarios of timing, cost, and quantity adjustments can be modeled.Can override the inspections but can always return to them.
37 PNA ToolOnce the basic 20 year projection of replacement needs is in place the PHA can consider the addition of components that do not currently exist:Sustainability Needs-this is where the energy audit information is used to add energy conservation measures to the projection-the tool automatically calculates simple payback based upon the entriesMarketability Needs-comp0nents that the PHA would like to have to improve livability, security etcAccessibility Needs-components that the PHA needs to put in place to achieve accessibility
38 PNA Tool Additional Features Allows a need to be reflected as “immediate” or “critical” and can create separate reporting for those categories.Allows for markup to be added as well as a local multiplier adjustmentCost libraries and inspection forms are exportable to excel spread sheet format so they can be worked with outside of the toolDocuments and Photos can be stored within the tool to provide documentary backup
39 PNA Tool Additional Features (cont’d): Allows refurbishment to be shown instead of replacement reflecting actual experience of PHAs“New PNA” creates a new form which can be blank so that the user can create a PNA for other property types it may have, such as section 8 property-user would manually input inventory dataThe tool has functionality to use the above feature to create a PNA for an individual development within a Development/AMPPre-existing PNAs can be directly entered into the 20 year spreadsheet
40 PNA Tool Reporting to HUD Once the PNA is completed to the PHAs satisfaction, the reporting function is found on the bottom of the Reports Page. With one selection the tool creates an XML file for each AMP which is ed as an attachment to HUD by the user. THUD does not retrieve the entire tool, only an extract of data so it is important that the PHA maintain the integrity of their reporting version for future reporting.Submittals can be updated at any time by resubmitting, the latest received is entered.Annually, PHAs will “update” the PNA which simply involves recording in the form on the Annual Update report which items where completed during the year and submitting to HUD –the tool will automatically move incomplete items to the next year.HUD does not use all of the data the PHA collects in order to create its PNA. The information is used for national aggregation.
41 PNA Tool HUD will collect summary level data from the PHAs: Replacement Needs for Site, Building Exterior, Building Systems, Common Areas, and Unit gross numbers plus major historical component cost items such as roofs, windows, HVAC, plumbing, and electrical.Sustainability Needs within 23 designated measures and “other ”Marketability Needs Capital ImprovementsAccessibility Needs Capital Improvements
42 PNA Tool How Will HUD Use the Submitted Data? Each submittal will be reviewed for anomalies that may result in inquiry from HUD and possible need for correction. The review is intended to identify information that looks erroneous or falls so far outside the norm as to raise a question. The review is intended to correct error.The PHA data will be aggregated nationally for analysis by HUD to inform policy and, if determined practical to provide some extracts that PHAs can use to assess their operations within their peer group of PHAs.HUD does not use all of the data the PHA collects in order to create its PNA. The information is used for national aggregation.
43 Thank You QUESTIONS? Contact your HUD field office PIC data files available byrequest to:
44 LINKSPNA :The GPNA Tool and prototype is located on HUD’s GPNA Resource webpage at:Rules:search on HUD proposed rules published in federal register on July 20, 2011 and November 17, 2011PIH Energy Conservation Resources: