Supporting Statement 2502-0352

Supporting Statement for Paperwork Reduction Act Submissions

Utility Allowance Adjustments

OMB Control Number 2502-0352

A. Justification

1. HUD requires an analysis of the project’s Utility Allowances to be included in the owner’s request for rent increase. Such data as changes in utility rates and other facts affecting utility consumption should be provided as part of this analysis to permit appropriate adjustments in the Utility Allowances. In addition, when approval of a utility rate change would result in a cumulative increase of 10 percent or more in the most recently approved Utility Allowances the owner must advise the Secretary and request approval of the new Utility Allowances. Utility Allowance applies only for projects receiving subsidy assistance where all or some utilities are paid directly by the tenant. Clarification: Section 221(d)(3) BMIR projects that were built with tenant paid utilities (separate meters) are not eligible for the utility allowances. If the project has Rent Supplement or Loan Management Set-Aside (LMSA) units, those units however, receive an allowance. The regulations governing Utility Allowance Adjustments are set forth at 24 CFR 886.126 and 24 CFR 886.326, and identified in HUD Handbook 4350.1 REV-1 Chapter 7.

2. HUD reviews the utility allowance adjustments to ensure that they comply with HUD policy and administrative procedures. When the cost of utilities (except telephone) and other essential housing services for an assisted unit are not included in the rent, the tenant is responsible for paying the utilities for the unit. The utility allowance is an amount equal to the estimate approved by HUD of the monthly cost of a reasonable consumption of such utilities and other services for the unit. This estimate is based on those costs for an energy conservative household of modest circumstances. If periodic adjustments to the utility allowance were not made, tenants would be required to pay a larger total tenant payment than is legally permissible.

Project owners must advise the Secretary of the need for a request for approval of a new utility allowance when the approval of a utility rate change results in a cumulative increase of 10 percent or more of the most recently approved utility allowance.

Chapter 7 of HUD Handbook 4350.1 provides the procedures for processing Budget Rent Increases and Fees for Commercial Space and Services in Insured, Direct Loan, and Non-regulated HUD projects. The chapter contains detailed information on when the owner should request an increase in the Utility Allowance for the project.

The number of respondents, responses, and burden hours has increased. HUD makes this estimate based on statistics gathered from annual financial statement responses from affected projects in the HUD portfolio.

3. Currently, there are no plans to automate this information collection because it is not feasible. This information collection requires a letter from the owner along with supporting documentation from utility companies to substantiate the utility allowance adjustment request, which cannot be submitted electronically. Pending the development of a Department-wide standard for electronic signatures receipt of the required letter is not automated. Additionally, the supporting documentation from utility companies is provided to owners in paper format, generated by proprietary software owned by each utility company. Electronic transmission of their documentation is not feasible.

4. The information is not collected through other information collections, and there is no duplication of information.

5. The collection of information does not involve any small businesses or other small entities.

6. In collecting this information, HUD determines that adjustments in utility allowances are adequate to meet reasonable costs. The information is only forwarded to HUD for approval when the increase is 10 percent or more. Less frequent collection would require tenants to pay a larger total tenant payment than is required by law.

7. There are no special circumstances associated with the collection of this information.

8. This information is collected in a manner consistent with guidelines of 5 CFR 12320.8(d). The Notice announcing the collection of information appeared in the Federal Register on November 6, 2009 (Vol. 74, No. 214/Page 57517).

The Department solicited comment from field offices who regularly review the information submissions of owners/agents who request adjustments of utility allowances. These respondents included staff from the Hub office in Jacksonville, Florida, Diane Toney; our Seattle Washington office, Becky Sands, and our Hub office in Columbus, OH, William Hughes. None offered new insights or suggestions of procedures to reduce the impact of current collection methods.

HUD has considered these comments and has made no changes to the information collection.

9. No payments or gifts of any kind are provided to respondents.

10. The information collected is not of a confidential nature; therefore, the Department does not assure confidentiality to respondents.

11. Respondents are not required to provide information of a sensitive nature.

12. Annual Burden Estimate:

*Number of Respondents	Frequency of Response	Total Annual Responses	Burden Hours per Response	Total Annual Burden Hours	Hourly Cost	Total Annual Cost
4,824	1	4824	.50	2,412	$22.00	$53,042

13. There are no additional capital or start-up costs.

14. Annual Cost to the Federal Government:

Total Annual Responses	Burden Hours per Response	Total Annual Burden Hours	Hourly Cost	Total Annual Cost
4,821	.50	2,412	$29.00	$69,919

15. This is a reinstatement of previously approved collection that expired. The number of respondents, responses, and burden hours has increased. HUD makes this estimate based on statistics gathered from annual financial statement responses from affected projects in the HUD portfolio.

16. The results of this information collection will not be published.

17. HUD is not seeking approval to avoid displaying the expiration date for this information collection.

18. There are no exceptions to the certification statement identified in item 19 of the OMB 83-I.

B. Collections of Information Employing Statistical Methods

There are no statistical methods used in this collection.

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