Stabilizing Rural PortfoliosAHMA 2015 Conference

April 29, 2015

•What we learned from MacArthur/State-funded small CCHS portfolio analysis in 2010-12.

•Describe implementation of new expectations, systems and changes portfolio-wide in 2012-14.

•What were challenges & lessons learned?

•Substantial Q&A planned for discussion of issues raised.

Our Key Points/Goals Today

Who is CCHS?

MacArthur/State Grant 2010-2012

Buena Nueva La Amistad San Isidoro New Life Villa

Villa Santa Maria

0

5

10

15

20

25

30

35

40

45

50

17

32

44

40

22

Average Turnaround Time Last 12 Months

Properties

Ave

rage

# D

ays

Good

Needs Improvement

Excellent

ANALYSIS•Unit Turnaround Times need improvement at La Amistad, San Isidoro and New Life Villa. •Unit Make Ready Times need improvement at La Amistad and San Isidoro. •Lost annual income at San Isidoro $5,600

RECOMMENDATIONS•Perform cost benefit analysis of property management staff efficiencies compared to turn-around and make-ready times.

• For CCHS, the lost income equals approximately 6 additional hours of on-site management weekly

•Determine your benchmarks and monitor these indicators closely. Reevaluate staffing as necessary.

Developed portfolio-wide benchmarks.Streamlined expectations and communication with Coast.Created Asset Management Dashboard for efficient property analysis.Conducted Capital Needs Assessments (CNAs), green analysis and utility data analysis on 5 properties in the CCHS PortfolioPerformed detailed rent analysis of 5 properties in the CCHS portfolio . Created final Portfolio Preservation Plan.

MacArthur/State Grant 2010-2012

Since 2012Expanded Dashboard to entire portfolio.

Reports executed quarterly and used for trending and forecasting.Systemized asset management processes within CCHS.Developed and implemented system of accountability for property benchmarks.Increased communication with Coast and property management at all levels.

Everyone (at all levels) knows clear and transparent expectations. Utilization of benchmark achievement in compensation analysis for site staff.

•Identified three (3) properties in need of utility allowance adjustment (PHA allowances do not accurately reflect usage for our younger, more energy efficient portfolio) therefore significant rent loss occurring.•Worked with Beacon to identify WSHFC policy options for changing allowances.•Worked with PP&L and WSHFC to gather data, analyze actual electricity usage, and adjust allowances.•End result: $4,000-$7,000 additional revenue per year at each property once fully implemented. This has a huge impact in a small property where 1.15 DSCR = $2,500 annual cash flow. This revenue is keeping developments afloat due to stagnant AMI in rural Washington (.05% increase in past 10 years)

2014 Rent Analysis Project

•Funded water audits at two properties from operating reserves.•Installed faucet/shower aerators portfolio-wide.•Conducted Landscape CNAs for entire portfolio, funded by operating reserves.

•Created landscape maintenance guide in English & Spanish.•Labeled irrigation systems in English/Spanish.

•Reduced irrigation consumption by 1,438,600 gallons - a 26% decrease from 2013 to 2014

•Re-commissioned irrigation systems•Could save 250,000 gallons of water or $2k in first year alone.

•Replace or add shade trees.•Examine use of more basalt mulch•Created an educational water conservation DVD in Spanish/English for residents

2013-2014 Water Conservation Work

Information above from Villa Santa Maria, in Mattawa, WA.

Common Area ElectricWater & Sewer

$2,0894%

$56,62496%

Common Area Electric

Water & Sewer

2014 Owner-Paid Utilities

Asset Management Informs New DevelopmentOn Water Conservation

•Xeriscaping embraced – significant reduction of turf areas that require lots of water to maintain.•No washers/dryers in units.•Water conserving/energy

efficient central laundry rooms.

•Low-flow fixtures throughout.•Equals HUGE cost savings over older properties:18k at SJIC13k at CK

Utility allowance adjustments are beneficial to the fiscal health of our sustainable communities but are time sensitive. “No Margin No Mission!”

Difficult to quantify most impactful recommendations from the Landscape CNAs – time intensive and technical in nature.

Resources must be identified to create appropriate tools for mono-lingual site staff in Central WA (i.e. translation of all instructions, manuals, etc. at properties).

Never enough asset management staff for tasks on hand in growing portfolio. Must choose projects carefully so as not to get overwhelmed. The more resources created, the more your department can grow.

Challenges

Changing utility allowances are easier than you think! (Just ask WSHFC!) – insert comment from Beacon here.

Choose a water/energy auditor carefully. Highly technical in nature, so you need a good partner!

Operational decision making must consider and involve the end-user (community manager, residents, site staff). If this community is non-English speaking this must be embraced and inform all communication.

Modest up-front costs can yield lasting operational changes and savings at projects.

Site staff are your key to success – insert comment from Coast here.

Feedback loop between Asset Management and Development ensures we don’t make same mistakes over and over again.

Lessons Learned