Title
Resolution to Approve the 2017 Utility Allowance and Operating Cost Adjustment Factor (OCAF) for RAD PBV properties
Memorandum
HUD requires the Ann Arbor Housing Commission (AAHC) to conduct an annual review of utility costs (electric and natural gas rates) to ensure that the utility allowances calculated for RAD PBV program participants are reasonable and within regulatory compliance.
The AAHC hired a contractor, Nelrod, to complete this year's review. Attached are the results of the utility study and the recommended utility allowances for the AAHC RAD PBV properties: Colonial Oaks, River Run and Maple Tower. Miller Manor and West Arbor's rent includes all utilities, and therefore a utility allowance is not needed for residents.
The attached Nelrod report includes the recommended RAD PBV housing utility allowance based on actual utility usage for these properties.
In addition, under the RAD program, HUD allows the Housing Commission to increase the rents bases on an annually published cost of living adjustment, known as the Operating Cost Adjustment Factor (OCAF). HUD's published OCAF for Michigan is 1.7% for CY17. The rent increase based on the OCAF should take place at the annual anniversary of the RAD conversion. The annual conversion anniversary date for Colonial Oaks is July 1st, West Arbor is September 1st, and Maple Tower and River Run are October 1st. The AAHC is recommending that the Board adopt the OCAF and Utility Allowance adjustments at the same time to ease the regulatory burden on AAHC staff and tenants.
The utility allowance and OCAF changes will take effect on October 1, 2017 for River Run properties: Baker, Green-Baxter, and Hikone. The utility allowance and OCAF changes will take effect on October 1, 2017 for the Maple Tower property South Maple (Miller Manor does not have a utility allowance because rent includes all utilities). The OCAF changes will take effect on September 1, 2017 for West Arbor.The utility allowance and OCA...
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