Ms. Deborah Vincent
Acting Assistant Secretary
Public and Indian Housing
Room 4100
451 7th Street SW
Washington, D.C. 20410

Dear Ms. Vincent:

PHADA appreciates the Department's efforts and intent regarding the recently issued SuperNOFAs. Issuing all of the NOFAs together in a short period of time is a step in the right direction in that agencies no longer have to guess when the next NOFA comes out and when it will be due. This concept, correctly implemented, will be of great use to housing authorities as they attempt to apply their limited resources in as efficient a manner as possible.

We have serious concerns, however, about this first effort. Our concerns are related both to the overall SuperNOFA process as it was implemented this year and specific aspects of some of the individual NOFAs, particularly PHDEP. In some cases we have recommendations for changes in next year's process; in others we have specific recommendations for immediate corrective action.

General Comments on the SuperNOFA process:

1. One of the primary goals of the SuperNOFA process was to increase the predictability of when NOFAs would be due. By publishing the three SuperNOFAs within a month, the Department has technically succeeded in reaching that goal. However, the goal of predictability is valuable only to the degree that it permits housing authorities to allocate their limited resources in the most efficient manner possible so that they could compete well for funding. We seriously question the value of predictability when all the NOFAs are due within a very short period of time.

   There are approximately ten NOFAs that most HAs would be interested in. The first, the PHDEP related NOFAs, are all due on June 15. The last, EDSS and TOP, are due on July 31. Small agencies are faced with a complicated PHDEP application followed within two weeks by the important CIAP application. Those small agencies with distressed properties are also faced with a HOPE VI deadline the same day as CIAP is due. Predictability here is useless. Ten NOFAs due within six weeks have the practical effect of forcing agencies, particularly small ones, to choose which few NOFAs they can apply their resources to. This effectively eliminates them from competing in all the NOFAs for which they are both eligible and interested.

   It is not clear what the reason is for HUD's close grouping of the deadlines. In fact, one would think that, with its shrinking resources, the Department, too, would be interested in spreading out the dates. HUD should revisit the deadline issue in this year's SuperNOFA and extend them over a broader period of time. In the future, the SuperNOFA process would be greatly aided by the Department's increased sensitivity to the limited resources of the agencies it serves.

2. An additional goal in publishing the SuperNOFAs was to eliminate redundancy and streamline the application process. These first SuperNOFAs take a modest step in that direction but do not go nearly far enough. In fact, the most obvious improvement is that HAs may now submit only one original signed CEO form; the rest may be photo copies.

   Another touted improvement is the concept of having one general section covering all NOFAs and specific sections for individual NOFAs. The specific sections of the NOFA cover requirements for the specific programs and provide for exemptions from the requirements in the general section. In effect, this complicates the process as applicants find themselves continually paging back and forth to assure that they are complying with the appropriate provisions.

   The Department is somewhat successful in standardizing the scoring criteria. However, one wonders why the "extent of the problem" and "quality of the plan" are more important in some programs than in others.

   With the exception of the EDSS and TOP programs where one sum is allocated for both and actual awards are dependent upon the application, it appears that the SuperNOFAs, for the most part, are simply grouped by general topic and layered upon each other with little significant change from past years.

   In large measure, the Department has not succeeded in its streamlining goal. We recommend that, in preparation for next year's SuperNOFA, HUD work more closely with the industry in devising workable methods for real streamlining that will assist both housing agencies and the Department.

3. We are concerned about the proliferation of minimum thresholds to various programs when they can be arbitrarily applied. Thresholds themselves can be helpful if they assist an agency in deciding whether or not to apply. By their nature they should define the bare minimum that is required and should be objective. The SuperNOFA is inconsistent in this standard. The thresholds in the PHDEP-Technical Assistance grant, for example, are done well. Those in the PHDEP grant application, however, are beyond the minimums and can be interpreted subjectively.

   We continue to be insistent that applications that reflect poor planning and that agencies that do not evidence sufficient capacity to do a good job do not get funded. However, we question the value of layering thresholds upon scoring criteria that should take care of this problem. Solid scoring criteria, applied fairly and without bias, should ensure that only worthwhile applications are funded. The use of additional thresholds has the unnecessary effect of applying redundant criteria to applications and increases the likelihood that some worthy applications will not even be considered because a rater incorrectly determines that a threshold has not been met.

   We recommend that HUD issue a notice removing threshold factors from this year's SuperNOFA, particularly in the PHDEP NOFA, and that the Department use them sparingly in the future. We are very willing to assist HUD in developing scoring criteria and methods that ensure that only the best applications are funded.

4. There is little to no accommodation for small agencies. It seems senseless that the smallest of agencies, eligible for a relatively small amount of funds, must follow the same onerous process as the largest housing authority in the country.

   We recommend that the Department apply a risk management philosophy to the NOFA process regarding small housing authorities. HAs with a small number of units requesting a relatively small amount of funding, and which have managed grants well in the past, should not be required to undergo the same process as large agencies.

5. No recognition of agencies that consistently perform well is present in any of the NOFAs. The Department has talked for years about providing regulatory relief for these agencies and has once again missed an opportunity to do it.

   We recommend that the Department also apply a risk management philosophy to the NOFA process regarding agencies that perform well. PHADA is willing to work with HUD to find concrete ways to provide relief without sacrificing accountability in future SuperNOFAs.

6. The SuperNOFA information center is a helpful concept. PHADA contacted the toll free number several times as the SuperNOFAs were published and got mixed results. While information center staff that answered the calls were always courteous, the degree and accuracy of the information they provided was quite mixed.

   The information center is listed under a section titled, "For Application Assistance, Further Information and Technical Assistance." However, one staff person told PHADA that the only thing the center was qualified in doing was mailing out application kits; they could not answer any specific questions or provide further information or technical assistance of any kind. Another call attempted to get more information regarding the pending telecasts of SuperNOFA information throughout the country. While the fax PHADA received from HUD on this referred us to the information center, no one at the center, including a supervisor, appeared to know anything about the telecasts. As a result, PHADA was unable to disseminate valuable information to its members.

   Additionally, while the information center alone is referenced in the NOFA, something called the "Public Housing Drug Elimination Support Center" and the "Drug Information Strategy and Clearinghouse" is referenced in the PHDEP application kit. Finally, the Department maintains an Internet Listserv where additional information is available. What group should a housing authority call about what matters?

   We recommend that HUD immediately provide additional training and support to the staff of the information center and that it consolidate its technical information within one entity. Absent such support, HAs will increasingly opt not to rely upon the information provided.

Specific Comments on the SuperNOFA I:

Our primary concern at this stage is with SuperNOFA I, "Housing and Community Development Programs," not because it is the only one with problems but because of the immediacy of the application deadlines and the amounts of funding involved.

1. This SuperNOFA allocates $44 million for agencies that were not funded in the1997 PHDEP competition. While we would have preferred a separate NOFA issued earlier to ensure a continuous stream of funding, we do not object in principle to including the funds in this SuperNOFA.

   However, we are extremely concerned with the allocations made for the remaining 1997 funds. Those agencies that were not funded in 1997, presumably because of deficient applications, are funded at a different rate from successful 1997 agencies in this round. For example, in 1997, agencies between one and 1250 units were funded at a minimum of $50,000 and a maximum of $300 per unit. For these same funds for agencies which were not successful in 1997, the rules have changed so that agencies between one and 499 units are eligible for either $60,000 or $500 per unit and those between 500 and 1249 may receive either $250,000 or $500 per unit. Similar discrepancies exist for agencies of other sizes. The allocation for the 1998 money reverts to the original allocation for 1997.

   On its face this appears to be blatantly unfair to those agencies that submitted timely 1997 applications of a quality nature. Why should the others be given both an additional chance AND the opportunity to be funded at a higher rate. This seems outrageous to us and reminds us of an often repeated anthem: "Stop Rewarding Failure." We strongly recommend that HUD immediately issue a corrective notice which permits eligible agencies to compete for 1997 money at the same rate as those funded through the 1997 NOFA.

2. There are a number of other specific problems with the PHDEP NOFA.

   a. PHADA is beginning to hear of agencies that have requested application kits, particularly regarding PHDEP, when the SuperNOFA was published and have as yet not received them. PHADA specifically requests that the Department extend the due date for PHDEP by one month to reflect this delay.

   b. In at least one instance, the hard copy PHDEP application kit differs from the downloadable version. In the hard copy version, block 15 of SF 424 is grayed out and/or says "not applicable." In the electronic version, block 15 refers the applicant to the "financial matrix form" on the following page. Even here, however, the instructions for block 15 say "not applicable." This has caused serious confusion among applicants who want to ensure that their applications are not rejected because of a technicality in interpreting the instructions. PHADA recommends that the Department expeditiously issue a notice to clear up its intent.

   c. The 1997 NOFA described the details associated with the "grant agreement" and financial reports. The specific section of the PHDEP NOFA eliminates this information. The general section of the SuperNOFA, however, states that grantees shall comply with the provisions of 24 CFR 85 and OMB Circular A-87 which govern the administration and reporting of grants.

   While this may be technically correct, it invites confusion as the 1997 instructions (and the process HAs are accustomed to) were more specific, e.g., that HAs shall submit semi-annual financial reports. The CFR simply indicates that HAs shall submit financial reports quarterly or at some other defined interval. Unless HUD clarifies its expectations, some HAs are likely to submit semi-annual reports and others, quarterly. In addition, there is a likelihood that the Department will be inconsistent in its application of the requirements.

   PHADA recommends that HUD expeditiously issue a notice more specifically detailing its expectations as to reporting requirements and the elements of a grant agreement.

   d. One of the scoring criteria requires that the applicant increase the level of cooperation with local law enforcement agencies and increase the use of its community space. What will those applicants which already have optimum relationships with their police departments and/or already maximize the use of their community facilities do to meet this criteria? While this is the exception rather than the rule, it is a real problem for those agencies which have succeeded in both areas. PHADA recommends that HUD revise this criteria so that such agencies are not penalized.

3. PHADA has two concerns regarding the CIAP/CGP and HOPE VI NOFAs.

   a. While mentioned above, it bears repeating. It makes little sense to us to require that modernization applications and HOPE VI applications be due on the same date. While the activities are clearly closely related, both modernization applications and the HOPE VI application are difficult and complicated. CIAP agencies particularly, which may have distressed properties, are hard-pressed to find either in-house staff resources or financial resources to hire consultants to meet this deadline.

   PHADA recommend that the HOPE VI deadline be extended by six weeks to give agencies adequate time.

   b. The formula for allocating funds between CIAP and CGP has been altered to more accurately reflect the unmet demand from CIAP agencies. PHADA is supportive of this change. For too long, CIAP agencies have, in effect, been funded primarily for emergency needs only.

   However, while this is good news for small agencies, it is bad news for CGP housing authorities. The underlying problem remains the same as it has for years: too little money is allocated for modernization. With ever growing backlogs it is imperative that the Department significantly increase it request for, and its determination to get, increased modernization funds.

PHADA sincerely appreciates the efforts of the Department to streamline and improve the NOFA process. Simply issuing the SuperNOFAs for the first time is an extremely important step. We trust that HUD will be ever more successful in reaching its goals in this area in the future. We hope that our recommendations may serve the Department well in this regard, and that, as importantly, they may improve the NOFA process this year. We may have additional comments to offer on the process and, especially, on other specific NOFAs.

PHADA remains eager to work with HUD on this important issue. Please do not hesitate to contact us with any questions, comments, or for additional information.

Very truly yours,

James J. Brigl
Director of Government Affairs

cc: Gloria Cousar, HUD, Deputy Assistant Secretary
Rod Solomon, HUD, Senior Director for Policy and Legislation
Sonya Burgos, HUD, Director, Office of Crime Prevention and Security
Rick Nelson, NAHRO
Sunia Zaterman, CLPHA

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