[Federal Register Volume 78, Number 83 (Tuesday, April 30, 2013)]
[Notices]
[Pages 25293-25295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10057]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5714-N-01]
Notice of Intent To Change HUD-Wide the Operating Model of the
Office of Multifamily Housing
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice.
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SUMMARY: This notice advises the public that HUD's Office of
Multifamily Housing intends to make changes to its field and
Headquarters operating model. Specifically, the Office of Multifamily
Housing will streamline its organizational structure by consolidating 6
Headquarters business offices into 4 offices and consolidating its
field structure of 17 Hubs to 5 Hub offices and 5 satellite offices
reporting to the Hubs. The other 7 Hubs and 34 program centers will be
consolidated into the remaining 10 offices (5 Hubs and 5 satellite
offices). The 2 existing property disposition centers will be
consolidated into one. Affected offices that will be consolidated
include: Hartford CT, Manchester NH, Providence RI, Newark NJ, Buffalo
NY, Philadelphia PA, Washington DC (field office only), Baltimore MD,
Pittsburgh PA, Richmond VA, Charleston WV, Birmingham AL, Miami FL,
Louisville KY, Jackson MS, Greensboro NC, San Juan PR, Columbia SC,
Knoxville TN, Nashville TN, Indianapolis IN, Minneapolis MN, Cleveland
OH, Milwaukee WI, Little Rock AK, New Orleans LA, Albuquerque NM,
Oklahoma City OK, Houston TX, San Antonio TX, Des Moines IA, St. Louis
MO, Omaha NE, Phoenix AZ, Los Angeles CA, Honolulu HI, Las Vegas NV,
Anchorage AK, and Portland OR. The Seattle WA office will remain open
however; Office of Multifamily Housing employees will be transferred
into like positions and provide support to the Office of Healthcare
Programs. HUD provides this notice in accordance with section 7(p) of
the Department of Housing and Urban Development Act.
FOR FURTHER INFORMATION CONTACT: Joseph Dubose, Office of Housing,
Department of Housing and Urban Development, 451 7th Street SW., Room
6138, Washington, DC 20410; [email protected], telephone (202) 402-
6886; TTY number for the hearing- and speech-impaired (202) 708-2565
(these telephone numbers are not toll-free).
SUPPLEMENTARY INFORMATION: In accordance section 7(p) of the Department
of Housing and Urban Development Act (42 U.S.C. 3535(p)), a plan for
the reorganization of any HUD regional, area, insuring, or other field
office may take effect only upon the expiration of 90 days after
publication in the Federal Register of a cost-benefit analysis of the
effects of the plan on each HUD office involved. Such cost-benefit
analysis shall include, but not be limited to (1) an estimate of cost
savings supported by background information detailing the source and
substantiating the amount of the savings; (2) an estimate of the
additional cost which will result from the reorganization; (3) a study
of the impact on the local economy; and (4) an estimate of the effect
of the reorganization on the availability, accessibility, and quality
of services provided for recipients of those services. Where any of the
factors cannot be quantified, the HUD shall provide a statement on the
nature and extent of those factors in the cost-benefit analysis.
Cost Benefit Analysis
A. Background
In order to most effectively use its human capital and other
resources, the Office of Multifamily Housing (MFH) has been actively
working to make fundamental changes to its operating model to improve
effectiveness and efficiency and to maximize opportunities to reshape
and realign its workforce. Important progress has been made to date,
including improving productivity, reducing loan cycle times, increasing
employee engagement, and introducing a more risk-based approach to
asset management activities. However, several fundamental challenges
remain, including a fragmented and unwieldy organizational structure
antiquated systems and processes, and role specification which allows
for little flexibility in allowing employees to perform various roles
while responding to spikes and ebbs in workload.
MFH proposes implementation of 3 categories of changes that will
significantly improve the delivery model, help better manage risk and
lead to an annual cost savings of an estimated $47M upon complete
implementation. These changes include the following:
(1) Streamline the organizational structure;
(2) Introduce risk-based processing across MFH and launch greater
workload sharing and balancing;
(3) Create new roles and abolish outdated or under-utilized
positions.
The goal is to fully implement these changes by the end of fiscal
year (FY) 2016. The reorganization is expected to enhance operational
efficiency, as well as improve the service provided to HUD's customers.
B. Description of Proposed Changes
Under the proposed structure, Headquarters' business units will be
consolidated and reduced from 6 separate offices to 4. In the field,
MFH will consolidate 17 Hubs to 5 Hub offices and 5 satellite offices
reporting to the Hubs. The other 7 Hubs and 34 program centers will be
consolidated into the remaining 10 offices (5 Hub offices and 5
satellite offices). The 2 existing property disposition centers
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will be consolidated into one. Affected offices that will be
consolidated include: Hartford CT, Manchester NH, Providence RI, Newark
NJ, Buffalo NY, Philadelphia PA, Washington DC (field office only),
Baltimore MD, Pittsburgh PA, Richmond VA, Charleston WV, Birmingham AL,
Miami FL, Louisville KY, Jackson MS, Greensboro NC, San Juan PR,
Columbia SC, Knoxville TN, Nashville TN, Indianapolis IN, Minneapolis
MN, Cleveland OH, Milwaukee WI, Little Rock AK, New Orleans LA,
Albuquerque NM, Oklahoma City OK, Houston TX, San Antonio TX, Des
Moines IA, St. Louis MO, Omaha NE, Phoenix AZ, Los Angeles CA, Honolulu
HI, Las Vegas NV, Anchorage AK, and Portland OR. The Seattle WA office
will remain open however; MFH employees will be transferred into like
positions in that office to support the Office of Healthcare Programs.
The 5 remaining Hubs will be in Atlanta GA, New York NY, Chicago IL,
Fort Worth TX, and San Francisco CA. The satellite offices will be in
Denver CO, Kansas City MO, Jacksonville FL, Detroit MI and Boston MA.
This new model will help establish better spans of control and
establish clear reporting lines in the field. The new structure will
allow for more active workload balancing which will enable MFH to
provide more consistent servicing to its customers which will
ultimately enhance the level of customer service received. Employees in
affected offices will have the option to either take a buyout or
continue their HUD careers in one of the 10 remaining locations via
directed reassignments with relocation entitlements.
To ensure that effective program delivery is maintained for all
customers, MFH will introduce risk-based processing and workload
sharing and will create new roles and abolish outdated or under-
utilized positions. To increase processing consistency and enhance
efficiency, workload will be spread virtually across the remaining Hubs
based on utilization. This will result in increased efficiency gains in
both Asset Management and Asset Development, and help to maintain level
work across the remaining hubs. More importantly, reducing the field
footprint will increase the consistency of MFH processing across the
country and provide a standard platform to introduce ongoing
enhancements and efficiencies.
MFH will segment its lenders and loans by key risk factors,
spending less time on low-risk applications to ensure sufficient focus
can be placed on the more high-risk ones. This will improve processing
time and allow MFH to better manage risk within the organization.
Additionally, MFH assets will be segmented by troubled and non-
troubled, which will provide the ability to designate specific staff to
focus on more complex-time-consuming work.
Additionally, MFH currently has defined roles and positions that
are outdated and poorly designed in relationship to specification.
Roles are overspecialized in the Asset Development arena while they are
under specialized in Asset Management. This creates bottlenecks in
processing (not enough of a particular role to meet workload demands or
processing breakdowns when key players are absent). Overspecialization
reduces the ability of employees to perform various functions as
workload demand ebbs and peaks. Under specialization oftentimes reduces
the ability to effectively manage risk.
Under the new operating model, MFH will create two new models, an
Underwriter position to support Asset Development and an Account
Executive model for Asset Management. The creation of these models will
improve efficiency and help to better manage risk. Review of
underwriting applications will shift from a team approach with
specialists each having their own defined role, to a single reviewer
(underwriter) who will pull in technical expertise only as needed. This
will improve efficiency and productivity by reducing processing time as
review of applications is passed through several reviewers, and
eliminating duplication and re-work. The Account Executive (AE) model
will define two levels of AEs. There will be a general AE that will
focus on non-troubled applications and a troubled asset specialist who
will be assigned more complex, time-consuming applications.
Additionally, AEs will be assigned portfolios segmented by region/
lender to enhance the level of customer service provided to MFH
clients. These changes are not only expected to bring significant
benefits to MFH, but will pave the way to HUD's overall vision for
transforming rental assistance.
(1) Estimate of Cost Savings
Approximately 90 days following the date of publication of this
notice, MFH will begin consolidating offices and reducing its operating
footprint, anticipating full implementation of the proposed changes by
the end of FY 2016. It is anticipated that overall staffing in MFH will
be reduced from 1,547 employees in FY 2012 to 1,173 by the end of FY
2016.
It is difficult to project the number of employees who will take
advantage of the buyout, choose to relocate, or resign because these
are individual decisions. However, it is estimated that 50-75 percent
of the affected employees will take the buyout while 25-50 percent may
opt to relocate. MFH is anticipating that limited recruiting will be
needed in the remaining 10 offices to supplement the existing workforce
and skills needed if staffing is below required levels. The total
savings will be about $47M annually once implementation is complete.
The savings is directly related to a reduction in salary and benefit
costs due to reducing overall MFH staffing from 1,547 in FY 2012 to
1,173 by the end of FY 2016.
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Staffing Total salaries
levels and expenses
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FY 2012.................................... 1547 $184,161,792
FY 2016.................................... 1173 146,666,808
Estimated (S&E) Savings.................... (374) * (46,748,504)
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* Savings calculated on FY16 average cost per FTE.
(2) Estimate of the Additional Cost
a. One Time Costs:
i. Buyout cost (approximately $13.9M-$20.8M). It is estimated that
50-75 percent of employees in the affected offices will take the
buyout. The anticipated total cost includes the buyout ($25,000) and
estimated terminal leave costs ($10,000).
ii. Personnel relocation cost (approximately $16.8M-$33.6.1M). It
is estimated that 25-50 percent of employees in the affected offices
will opt to continue their HUD careers in other locations via directed
reassignments, and certain relocation costs will be paid.
iii. Severance or unemployment compensation costs ($0). No
severance costs are associated with this initiative since termination
of any staff is not expected.
iv. Net Office closure costs ($6.1M). No offices will be closed as
part of the MFH realignment, only MFH personnel will be removed from
certain offices; however this may require reconfiguration of existing
space or lease modifications to accommodate the smaller footprint. One
time cost estimates for this reconfiguration in the 40 offices that
will no longer have a MFH presence are estimated at $14.1M. Factoring
in an estimated savings of $8M as leases begin to expire, this equates
to a one-time cost of approximately $6.1M. Note: These costs
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will be incurred as offices are realigned, not all at once.
v. Space alteration costs in the ten remaining offices ($20M).
There will be a one-time cost to reconfigure the space in the remaining
MFH offices, or locate alternate facilities if space alterations are
not feasible, to accommodate the increase in staff. These costs are
estimated at $20M and will incur throughout the various phases of the
realignment.
vi. Training costs ($500,000). Employees will be provided with
training on performing the new roles under the enhanced operating
model.
b. Reoccurring Costs:
Operating Costs ($0). It is anticipated that the MFH reorganization
impact on travel funding will be minimal.
(3) Study of the Impact on the Local Economy
It is anticipated that 25-50 percent of impacted employees (197-
395) will be reassigned to an alternate location. Any impact on the
local economies in terms of housing, schools, public services, taxes,
employment and traffic congestion will be minimal.
(4) Estimate of the Effect of the Reorganization
As mentioned above, workload will be spread virtually across the
remaining Hubs and satellite offices based on utilization. This will
result in increased efficiency gains in both Asset Management and Asset
Development and help to balance workload across the remaining Hubs and
satellite offices. Additionally, developing new, more generalized roles
that can perform multiple functions, will allow employees to more
effectively support processing and perform multiple functions as
workload ebbs and peaks. Program delivery will not be impacted as
workload will be shared across remaining locations and employees will
become more flexible in performing multiple tasks.
Dated: April 24, 2013
Carol J. Galante
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2013-10057 Filed 4-29-13; 8:45 am]
BILLING CODE 4210-67-P