Public Housing Authority Financial Management Training Module 13: Personnel Policies Module 13 Topics • Contracting Out Services • PHA Employee Compensation – Items to Consider – Maintenance Wage Determination – Executive Compensation Limits • Time and Attendance Policies – Fair Labor Standards Act (FLSA) – Exempt and Non-Exempt – Frequent Topics • Employee Evaluations – PHA Bonuses • PHA Hiring Policy and Practices Module 13 CONTRACTING OUT SERVICES Contracting Out: Factors to Consider - Activity • Is the activity temporary, recurs in cycles, or requires less than a full-time resource? – Plumbing, Electrical, Information Technology (IT) • Would it cost less for the PHA to outsource the activity? Would the quality of the work be better if outsourced? – Grass-cutting, snow removal, painting • While the activity can be performed in-house, is staff time better used elsewhere? – Payroll • Does the activity require specialized knowledge and is it impractical to have a PHA employee perform this function? – Legal, Human Resources • What can the PHA afford to pay? Contracting Out: Factors to Consider – PHA Staff Assessment • What are staff’s duties and workload? – Examine productivity metrics for staff • Maintenance – Number of work orders completed; work order completion time; average unit turnaround-time, etc. • Property Management – reexaminations, unit inspections, lease-up time, etc. • What are the skill set of staff? • What is the contract cost versus contract benefits? Contracting Out: Who to Contract To? • Who to Contract To? – Private companies – Other PHAs – City – Shared-service arrangements with other entities • When contracting, PHA should consider: – Oversight of Contract – Contract Cost – Compliance with HUD regulations and PHA’s policies PHA Services Typically Contracted Out Administrative Services Maintenance Services • Information Technology (IT) Services • Grass-cutting/Snow Removal Services • Legal Services • REAC Inspection • Accounting • Unit turns • Payroll/Human Resources • Painting • Cleaning services • Specialized (Plumbing, Electrical, Roofing, etc.) Property Management HQS Inspections (HCV Program) Note: PHAs with unionized workforce may be constrained when considering what services can be outsourced Module 13 PHA EMPLOYEE COMPENSATION PHA Employee Compensation Items to Consider • Why are salary reviews important: – Compliance with HUD requirements – Salary not competitive for market place; not able to attract and retain talent – Pay equity (Review to make sure that there is not a pattern of inequity between gender, race, or other State or Federal protected class) • Has the PHA established a minimum (entry level), midpoint, and maximum salary range for each position? – Entry level pay is typically 75-80% of the market rate – Market rate = what an experienced solid performing employee is paid – Highly experienced employee pay is typically 120% to 125% of market rate • How does the PHA determine pay increases and bonuses? • Who in the PHA is authorized to approve pay increase and bonuses? Salary Comparability Review • PHAs should periodically perform a salary comparability review for all PHA positions – Determine methodology and data source to be used – Review pay scales to make sure align with other staff positions (for example, a maintenance position generally should not be paid more than a property manager position • Surveys of comparable wage data can be gathered from the following sources: – Local area private entities that employ workers in similar positions (e.g., apartment complexes, private management companies, etc.) – City Human Resources – If the PHA is connected with the City and complies with the City’s personnel/human resource policy – Hire a firm to conduct salary survey HUD’s Requirements for PHA Compensation • Compensation for PHA staff is largely determined by a PHA’s Board of Commissioners and Executive Director • HUD’s requirements for PHA compensation only pertains to: – PHA Maintenance: PHAs are required to annually establish a prevailing wage (i.e., minimum hourly wage) for maintenance positions – PHA Executives: Congress caps the amount that the Board can pay PHA executive positions using certain HUD program funds Prevailing Wage Requirements: Maintenance • Maintenance work on properties under the Annual Contributions contract (ACC) are subject to prevailing wage requirements, that is the minimum hourly wage that can be paid for maintenance (Source: Section 12(a) of the US Housing Act of 1937) • Prevailing wage requirement is set by each PHA and applies to: – Routine Maintenance: Janitorial and maintenance staff – Non-Routine Maintenance: Includes electrical, roofing, or other classification that are performed annually by licensed contractors (HVAC, elevator, etc.) – Development (required under Davis-Bacon Act) • HUD’s Davis Bacon and Labor Standards Office is responsible for the administration and enforcement of labor standards within their jurisdiction – There are regional and local field offices that work with all PHAs PHA Maintenance Wage Determination • PHAs are required to submit a maintenance wage determination and fringe benefits (if applicable) to HUD annually – Applies whether work is performed in-house or maintenance is contracted • The maintenance wage determination should represent: – Minimum or lowest hourly wage that a PHA is permitted to pay a maintenance position – Entry-level position and not an experienced or long-time employee • Davis-Bacon wage can be used as a rough proxy for the prevailing maintenance wage determination PHA Maintenance Wage Determination Process • HUD sends the PHA a letter at least 180 days before the PHA’s fiscal year start date. The letter requests that the PHA submits the proposed prevailing maintenance wage rate, and fringe benefits (if applicable), using: – HUD Form 4750 (Maintenance Wage Rate Recommendation); – Collective Bargaining Agreement; or – Survey of wage rates using HUD Form 4751 (Maintenance Wage Rate Survey) and 4752 (Maintenance Wage Rate Survey – Summary Sheet) • Position descriptions must also be submitted, if HUD does not have this information or if changes have been made PHA Maintenance Wage Determination Process (continued) • The wage information and position descriptions for each maintenance classification is due to HUD at least 90 days before the PHA’s fiscal year start date • HUD approves maintenance wage determination 30 days before PHA’s fiscal year start date • HUD’s Davis Bacon and Labor Standards office will issue the PHA a HUD Form 52158 (Maintenance Wage Rate Decision). Form 52158 is the same as HUD Form 4750 submitted by PHA, with the approved wage rates for all maintenance work classification • If the PHA does not submit the wage information to HUD, HUD will calculate the prevailing maintenance wage rate for the PHA using last year’s submitted data x Consumer Price Index (CPI) inflation rate. For 2016, the CPI was 0.5% HUD 52158 Form - Example PHA Maintenance Wage Determination – Other HUD Requirements • Posting Requirements: HUD Form 52158 must be posted in employee common area (lunch room, office, etc.) and incorporated into routine maintenance contracts • Recordkeeping: PHAs must maintain records associated with determination of maintenance wage determination for 3 years • HUD Resources: HUD Handbook – Federal Labor Standards Requirements in Housing and Urban Development Programs (1344.1 REV 2 issued 2012) PHA Executive Compensation: HUD Requirements • Starting in FY 2012, Congress capped the salary, including bonuses, for the Executive Director or any other PHA employee paid using Section 8 and 9 funds to the annual rate of basic pay for Level IV of the federal Executive Schedule – Section 8 & 9 Funds include: 1) HCV; 2) Capital Fund; 3) Operating Fund; and 4) ROSS • Does not apply to Moderate Rehabilitation or Project Based Rental Assistance (PBRA) funds – Salary cap does not apply to overtime and benefits (such as retirement, life insurance, medical insurance, or the use of a PHA vehicle) – For 2018, the pay cap is $164,200 annually. Salary and bonus above this level, must be paid for with other funds • Salary cap applies to all PHAs, including Moving-to-Work (MTW) PHAs PHA Executive Compensation: HUD Requirements (continued) • PHAs with a COCC: COCC fees from Section 8 & 9 funds that are used to pay PHA employees’ salaries are also subject to the salary cap • If several PHAs hire the same person, the cap applies to that person’s total compensation from all sources • Covered Individuals: Includes all PHA employees and persons who are employed in a legally separate entity of the PHA but are reported in the PHA’s financial statement as a component unit – Not Covered: Independent contractors or hourly employees PHA Executive Compensation: HUD Requirements (continued) • PHAs are required to submit executive compensation information annually using HUD-52725 form (Excel-based) and submit online through HUD’s Secure Systems – Salary information provided for: 1) top management official; 2) top financial official; and 3) highest compensated employee, not top management or financial for full calendar year – Compensation is to be broken out by salary and bonus; and by funding source (Section 8 funds, Section 9 funds, and non-Section 8 or 9 funds) – Data Source: Compensation reported based on employee's W-2 form • Penalty: HUD may impose monetary sanctions as well as other remedies pursuant to HUD regulations for failure to comply with reporting requirements PHA Executive Compensation: HUD Requirements (continued)