HomeMy WebLinkAbout2021 - 67891 LHC Lansing Housing Commission - Financial Report with supplemental Information June 30, 2021 Lansing Housing Commission
Financial Report
with Supplemental Information
June 30, 2021
Lansing Housing Commission
Contents
Independent Auditor's Report 1-2
Management's Discussion and Analysis 3-7
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 8-9
Statement of Activities 10
Statement of Cash Flows 11-12
Fund Financial Statements:
Fiduciary Fund:
Statement of Fiduciary Net Position - Other Postemployment Benefits Trust 13
Statement of Changes in Fiduciary Net Position - Other Postemployment Benefits Trust 14
Discretely Presented Component Units:
Statement of Net Position 15
Statement of Activities 16
Notes to Financial Statements 17-40
Required Supplemental Information 41
Schedule of Changes in the Commission's Net Pension Liability and Related Ratios 42
Schedule of Pension Contributions 43
Schedule of Changes in the Commission's Net OPEB Liability and Related Ratios 44
Schedule of OPEB Contributions 45
Schedule of OPEB Investment Returns 46
Notes to Required Supplemental Information 47
Other Supplemental Information 48
Financial Data Schedules 49-53
Independent Auditor's Report
To the Board of Commissioners
Lansing Housing Commission
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities, the discretely presented
component units, and the aggregate remaining fund information of Lansing Housing Commission (the
"Commission") as of and for the year ended June 30, 2021 and the related notes to the financial statements, which
collectively comprise Lansing Housing Commission's basic financial statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the
financial statements of Oliver Gardens Limited Dividend Housing Association LP, which represents 17 percent and
97 percent, respectively, of the assets and revenue of the aggregate discretely presented component units. Those
financial statements were audited by other auditors, whose report has been furnished to us and, our opinion,
insofar as it relates to the amounts included for Oliver Gardens Limited Dividend Housing Association LP, is based
solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the business-type activities, the discretely presented component units, and the aggregate
remaining fund information of Lansing Housing Commission as of June 30, 2021 and the respective changes in its
financial position and, where applicable, its cash flows for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
1
To the Board of Commissioners
Lansing Housing Commission
Required Supplemental Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and other required supplemental information, as identified on the table of contents, be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required supplemental
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
Lansing Housing Commission's basic financial statements. The financial data schedules are presented for the
purpose of additional analysis and are not a required part of the basic financial statements.
The financial data schedules are the responsibility of management and were derived from and relate directly to the
underlying accounting and other records used to prepare the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the financial data schedules are fairly stated in all material respects in relation to the basic
financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 14, 2022 on
our consideration of Lansing Housing Commission's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The
purpose of that report is to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Lansing Housing Commission's internal control over financial reporting and
compliance.
44t4& �, P L L C
January 14, 2022
2
Lansing Housing Commission
Lansing, Michigan
Management's Discussion and Analysis
For the Fiscal Year Ended June 30, 2021
This management's discussion and analysis (MD&A) of Lansing Housing Commission (the
"Commission") provides an overview of the Commission's financial performance during the
fiscal year ended June 30, 2021. The operations of the Commission are comprised of a Low-
Income Public Housing Program, a Housing Choice Voucher program, a Capital Fund Program,
and a Resident Opportunity and Supportive Services Program. The Low-Income Public Housing
Program is funded with tenant rental revenue, miscellaneous tenant charges, and Department
of Housing and Urban Development (HUD) grants and subsidies. The remaining programs are
funded entirely by federal grants. The Commission also maintains a central office cost center,
various business activities, and component units. This MD&A covers only the Commission's
primary government activities, including its blended component unit and the Lansing Housing
Commission Non-Profit Development Corporation (LHCNPDC), and does not analyze the
financial position or current year activity of the discretely presented component units, as
disclosed in Note 1 to the financial statements. Please read this summary along with the
accompanying audited financial statements of the Commission for the fiscal year ended June
30, 2021.
Financial Highlights
1. Total assets and deferred outflows of resources
exceed total liabilities and deferred inflows of resources by $ 30,199,618
2. Unrestricted net position equals 19,272,545
3. Total net position increased by 12,199,621
Required Financial Statements
The financial statements of the Commission have been prepared on the accrual basis of
accounting following the business-type activities reporting requirements of the Governmental
Accounting Standards Board (GASB) as a single enterprise fund. These statements are as
follows:
• Statement of net position - Includes all of the Commission's assets and liabilities and
provides information about the amounts and investments in assets and the obligations to
commission creditors. It also provides a basis of assessing the liquidity and financial
flexibility of the Commission. Over time, increases or decreases in net position may serve as
a useful indicator of whether the financial health of the Commission is improving or
deteriorating.
• Statement of activities - Provides information as to the increase or decrease of current year
revenue over expenses.
• Statement of cash flows - Provides information about the Commission's cash receipts and
disbursements during the reporting period. The statement discloses net cash provided by or
used in operating activities and noncapital financing activities from capital and related
financing activities and from investing activities.
3
Financial Analysis
Statement of Net Position
Percent
2020 2021 Change Change
Assets
Current assets $ 6,272,329 $ 6,954,603 $ 682,274 11%
Capital assets 13,778,940 8,295,702 (5,483,238) -40%
Noncurrent assets 1,756,969 16,182,674 14,425,705 821%
Total assets 21,808,238 31,432,979 9,624,741 44%
Deferred Outflows of Resources 407,663 1,660,807 1,253,144 307%
Total assets and deferred
outflows of resources 22,215,901 33,093,786 10,877,885 49%
Liabilities
Current liabilities 970,472 510,819 (459,653) -47%
Long-term liabilities 2,904,506 1,786,515 (1,117,991) -38%
Total liabilities 3,874,978 2,297,334 (1,577,644) -41%
Deferred Inflows of Resources 340,926 596,834 255,908 75%
Net Position
Net investment in capital assets 12,282,689 8,295,702 (3,986,987) -32%
Restricted 346,406 2,631,371 2,284,965 660%
Unrestricted 5,370,902 19,272,545 13,901,643 259%
Total net position $ 17,999,997 $ 30,199,618 $ 12,199,621 68%
As illustrated in the statement of net position, the overall net position of the Commission
increased by $12,199,621. During the year ended June 30, 2021, the Commission sold
substantially all of the units comprising two of its Low-Income Public Housing Asset
Management Projects (AMPs) in connection with the conversion of these AMPs to new limited
partnerships under HUD's Rental Assistance Demonstration (RAD) program. This led to an
overall decrease in net capital assets. The sales were financed in part by seller notes receivable
issued by the Commission totaling $12,245,775 and noncurrent restricted cash proceeds
totaling $2,304,225. These attributed to the increase in noncurrent assets during the year ended
June 30, 2021. The overall decrease in liabilities is primarily attributable to the pay-off of the
Commissions outstanding debt totaling $1,496,251.
4
Financial Analysis
(Continued)
Statement of Activities
Percent
2020 2021 Change Change
Revenue
Tenant rental revenue $ 1,486,057 $ 1,007,171 $ (478,886) -32%
Federal grants 18,973,768 20,967,349 1,993,581 11%
Other revenue 1,419,023 9,613,845 8,194,822 577%
Total revenue 21,878,848 31,588,365 9,709,517 44%
Expenses
Administrative expenses 2,818,997 1,841,361 (977,636) -35%
Tenant services 29,645 22,568 (7,077) -24%
Utilities 967,501 776,096 (191,405) -20%
Maintenance and operations 2,382,592 2,511,711 129,119 5%
Insurance and general expenses 425,542 768,313 342,771 81%
Housing assistance payments 12,130,939 12,533,402 402,463 3%
Depreciation and amortization 1,102,145 869,391 (232,754) -21%
Interest expense 63,884 65,902 2,018 3%
Total expenses 19,921,245 19,388,744 (532,501) -3%
Change in Net Position $ 1,957,603 $ 12,199,621 $ 10,242,018 523%
Revenue
In reviewing the statement of activities, you will find that 67 percent of the Commission's
revenue is derived from grants from the Department of Housing and Urban Development, 3
percent of the Commission's revenue is from dwelling rent, and 30 percent is from other income.
Other revenue is primarily attributable to a $7,605,477 gain on the sale of capital assets in
connection with RAD conversions.
Expenses
In reviewing the statement of activities, you will find that 65 percent of the Commission's
expenses are for housing assistance payments, 9.5 percent for administrative, 4 percent are for
utilities, 13 percent are for maintenance, 4.5 percent are for depreciation and amortization, and
4 percent are for tenant services, protective services, general expenses, and interest expense.
Change in Net Position
There was an increase in overall revenue during fiscal year 2021 driven primarily by an increase
in other revenue, as described above.
5
Financial Analysis
(Continued)
Capital Assets
As of year-end, the Commission had $8,295,702 invested in a variety of capital assets as
reflected in the following schedule, which represents a net decrease (additions, deductions, and
depreciation) of 40 percent from the end of 2020. The decrease is primarily attributable to the
capital assets sold in connection with the RAID conversions as previously described.
Percent
2020 2021 Change Change
Land $ 1,554,771 $ 1,279,900 $ (274,871) -18%
Buildings 52,626,312 32,414,114 (20,212,198) -38%
Furniture and equipment 1,323,281 768,671 (554,610) -42%
Construction in progress 957,455 819,780 (137,675) -14%
Accumulated depreciation (42,682,879) (26,986,763) 15,696,116 -37%
Net capital assets $ 13,778,940 $ 8,295,702 $ (5,483,238) -40%
The following reconciliation summarizes the change in capital assets:
Beginning balance -July 1, 2020 $ 13,778,940
Additions:
Construction in progress 2,262,853
Building and improvements 37,650
Furniture and equipment 31,555
Disposals net of depreciation (6,945,905)
Depreciation expense (869,391)
Ending balance -June 30, 2021 $ 8,295,702
Debt Outstanding
As of the end of the fiscal year, the Commission had $0 in debt outstanding compared to
$1,496,251 in the previous year. During the year ended June 30, 2021 the Commission paid off
all outstanding debt. See Note 6 to the financial statements for further information.
Long-term Debt
2020 2021
Note payable - Davenport $ 67,354 $ -
Note payable - PNC 1,428,897 -
Total long-term debt $ 1,496,251 $ -
6
Financial Analysis
(Continued)
Economic Factors and Events Affecting Operations
Factors that may affect the financial position of the Commission in the subsequent fiscal year
are as follows:
• Federal funding appropriations as budgeted by Congress for funding to the Department of
Housing and Urban Development (HUD)
• Local labor supply and demand, which can affect salary and wage rates and the need to
contract more work because of employee hiring challenges
• Union contract negotiations
• Local inflationary, recessionary, and employment trends, which can affect resident incomes
and, therefore, the amount of rental income
• Inflationary pressure on utility rates, supplies, and other costs
• Pay down of underfunded pension and other postemployment benefit liabilities
• The conversion of Low-Income Public Housing projects under HUD's Rental Assistance
Demonstration program
REAC
The Real Estate Assessment Center's (REAC) mission is to provide and promote accurate
information in assessing the condition of HUD's housing portfolio. The Commission receives
periodic physical inspections and an annual financial evaluation provided by REAC. This
performance data provides an annual assessment of how each Public Housing Commission
compares to its peers.
Conclusion
The Commission's management is committed to staying abreast of regulations and
appropriations as well as maintaining an ongoing analysis of all budgets and expenses to
ensure that the Commission continues to operate at the highest standards established by the
Real Estate Assessment Center and the Department of Housing and Urban Development.
Contact
This financial report is designed to provide a general overview of the Commission's finances for
all those with an interest. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to Doug Fleming, Executive
Director, Lansing Housing Commission, 419 Cherry, Lansing, MI 48933, or call (517) 372-7996.
7
Lansing Housing Commission
Statement of Net Position
June 30, 2021
Discretely
Presented
Component
Primary Units-
Government December 31,
(LHC) 2020
Assets
Current assets:
Cash and cash equivalents (Note 3) $ 5,192,376 $ 126,350
Cash and cash equivalents- Restricted (Note 3) 684,839 1,869,772
Receivables:
Tenant receivables 87,550 7,008
Other receivables 20,731 6,906
Allowance for doubtful accounts (5,445) -
Due from other governmental units- HUD 3,500 -
Due from other governmental units- State and local 295,738 -
Prepaid expenses and other assets 44,937 3,626
Investments (Note 3) 541,604 -
Tenant security deposits - Restricted (Note 3) 88,773 5,348
Total current assets 6,954,603 2,019,010
Noncurrent assets:
Cash and cash equivalents- Restricted (Note 3) 2,304,225 -
Due from component units 950,472 -
Capital assets:
Assets not subject to depreciation (Note 5) 2,099,680 2,954,539
Assets subject to depreciation - Net (Note 5) 6,196,022 9,428,185
Notes receivable (Note 4) 12,545,908 -
Other assets 382,069 32,291
Total noncurrent assets 24,478,376 12,415,015
Total assets 31,432,979 14,434,025
Deferred Outflows of Resources
Pension (Note 7) 1,597,374 -
OPEB (Note 8) 63,433 -
Total deferred outflows of resources 1,660,807 -
See notes to financial statements. 8
Lansing Housing Commission
Statement of Net Position (Continued)
June 30, 2021
Discretely
Presented
Component
Primary Units-
Government December 31,
(LHC) 2020
Liabilities
Current liabilities:
Accounts payable - Operating $ 184,387 $ 10,408
Security deposit liability 124,904 5,148
Accrued liabilities and other:
Accrued salaries and wages 62,624 7,820
Accrued interest payable - 196,036
Accrued PILOT 66,444 19,389
Compensated absences 16,460 -
Unearned revenue 56,000 388
Current portion of long-term debt(Note 6) - 36,404
Total current liabilities 510,819 275,593
Noncurrent liabilities:
Due to primary government - 546,872
Compensated absences 93,268 -
Net pension liability(Note 7) 1,285,458 Net OPEB liability(Note 8) 50,096 -
Notes payable- Net of current portion (Note 6) - 13,504,343
Other noncurrent liabilities 357,693 82,788
Total noncurrent liabilities 1,786,515 14,134,003
Total liabilities 2,297,334 14,409,596
Deferred Inflows of Resources
Pension (Note 7) 351,664 -
OPEB (Note 8) 245,170 -
Total deferred inflows of resources 596,834 Net Position
Net investment in capital assets 8,295,702 (1,158,023)
Restricted 2,631,371 -
Unrestricted 19,272,545 1,182,452
Total net position $ 30,199,618 $ 24,429
See notes to financial statements. 9
Lansing Housing Commission
Statement of Activities
Year Ended June 30, 2021
Discretely
Presented
Component
Primary Units-
Government December 31,
(LHC) 2020
Operating Revenue
Tenant revenue- Net $ 1,007,171 $ 283,739
HUD operating revenue 18,771,084 -
Other grant revenue 961,648 -
Other operating revenue 720,600 16,831
Total operating revenue 21,460,503 300,570
Operating Expenses
Administrative 1,841,361 26,078
Tenant services 22,568 -
Utilities 776,096 94,397
Maintenance 2,511,711 34,871
Insurance 322,503 14,001
Other general expenses 445,810 65,053
Housing assistance payments 12,533,402 -
Depreciation and amortization 869,391 104,121
Total operating expenses 19,322,842 338,521
Operating Income (Loss) 2,137,661 (37,951)
Nonoperating Revenue (Expense)
Investment income 326,120 8,901
Gain on sale of fixed assets 7,605,477 -
Interest expense (Note 6) (65,902) (92,618)
Total nonoperating revenue (expense) 7,865,695 (83,717)
Income (Loss) - Before capital contributions 10,003,356 (121,668)
Capital Contributions
Capital grants- HUD 2,196,265 -
Partner contributions - 1,226,647
Total capital contributions 2,196,265 1,226,647
Change in Net Position 12,199,621 1,104,979
Net Position (Deficit) - Beginning of year 17,999,997 (1,080,550)
Net Position - End of year $ 30,199,618 $ 24,429
See notes to financial statements. 10
Lansing Housing Commission
Statement of Cash Flows
Year Ended June 30, 2021
Primary
Government
(LHC)
Cash Flows from Operating Activities
Cash received from HUD operating subsidies and grants $ 18,949,342
Cash received from tenants 1,066,180
Other receipts 1,758,840
Cash payments for housing assistance (12,533,402)
Cash payments for administrative expenses (1,841,361)
Cash payments for other operating expenses (4,786,400)
Net cash and cash equivalents provided by operating activities 2,613,199
Cash Flows from Capital and Related Financing Activities
Receipt of capital grants 2,196,265
Proceeds from sale of capital assets 2,304,225
Purchase of capital assets (2,330,676)
Principal and interest paid on capital debt (1,562,153)
Net cash and cash equivalents used in capital and related financing activities 607,661
Cash Flows from Investing Activities
Interest received on investments 11,046
Purchases of investment securities (7,332)
Net cash and cash equivalents provided by investing activities 3,714
Net Increase in Cash and Cash Equivalents 3,224,574
Cash and Cash Equivalents- Beginning of year 5,045,639
Cash and Cash Equivalents- End of year $ 8,270,213
Classification of Cash and Cash Equivalents
Cash and cash equivalents $ 5,192,376
Restricted cash and cash equivalents (current) 684,839
Restricted cash and cash equivalents (noncurrent) 2,304,225
Tenant security deposits 88,773
Total cash and cash equivalents $ 8,270,213
See notes to financial statements. 11
Lansing Housing Commission
Statement of Cash Flows (Continued)
Year Ended June 30, 2021
Primary
Government
(LHC)
Reconciliation of Operating Income to Net Cash from Operating Activities
Operating income $ 2,137,661
Adjustments to reconcile operating income to net cash from operating activities:
Depreciation and amortization 869,391
Bad debts 29,082
Deferred outflows and inflows (997,236)
Changes in assets and liabilities:
Receivables 536,323
Prepaid and other assets 119,371
Accounts payable 170,673
Accrued and other liabilities (107,845)
Security and other trust deposits (48,907)
Unearned revenue (95,314)
Net cash and cash equivalents provided by operating activities $ 2,613,199
Significant Noncash Transactions- Issuance of seller notes receivable in exchange for capital
assets sold $ 12,245,775
See notes to financial statements. 12
Lansing Housing Commission
Statement of Fiduciary Net Position
Other Postemployment Benefits Trust
June 30, 2021
Assets - Interest in pooled investments (Note 3) $ 455,332
Liabilities -
Net Position - Restricted for other postemployment benefits $ 455,332
See notes to financial statements. 13
Lansing Housing Commission
Statement of Changes in Fiduciary Net Position
Other Postemployment Benefits Trust
Year Ended June 30, 2021
Additions
Investment income $ 63,752
Employer contributions 82,435
Total additions 146,187
Deductions - Benefit payments 82,435
Net Increase in Net Position Restricted for Other Postemployment Benefits 63,752
Net Position Restricted for Other Postemployment Benefits - Beginning of year 391,580
Net Position Restricted for Other Postemployment Benefits- End of year $ 455,332
See notes to financial statements. 14
Lansing Housing Commission
Discretely Presented Component Units Statement of Net Position
December 31, 2020
Mount Vernon
Oliver Gardens Park Limited
Limited Dividend Dividend
Housing Housing
Association LP Association LP Total
Assets
Cash and cash equivalents (Note 3) $ - $ 126,350 $ 126,350
Cash and cash equivalents- Restricted (Note 3) 384,537 1,485,235 1,869,772
Receivables:
Tenant receivables 7,008 - 7,008
Other receivables - 6,906 6,906
Prepaid expenses and other assets 3,626 - 3,626
Tenant security deposits - Restricted (Note 3) 5,248 100 5,348
Capital assets:
Assets not subject to depreciation (Note 5) 697,672 2,256,867 2,954,539
Assets subject to depreciation - Net (Note 5) 1,398,185 8,030,000 9,428,185
Other assets 1,526 30,765 32,291
Total assets 2,497,802 11,936,223 14,434,025
Liabilities
Accounts payable - Operating 9,499 909 10,408
Due to primary government 546,872 - 546,872
Security deposit liability 5,148 - 5,148
Accrued liabilities and other 223,245 - 223,245
Unearned revenue 388 - 388
Noncurrent liabilities:
Due within one year(Note 6) 36,404 - 36,404
Due in more than one year(Note 6) 2,477,617 11,109,514 13,587,131
Total liabilities 3,299,173 11,110,423 14,409,596
Net Position (Deficit)
Net investment in capital assets (335,376) (822,647) (1,158,023)
Restricted - - -
Unrestricted (465,995) 1,648,447 1,182,452
Total net position (deficit) $ (801,371) $ 825,800 $ 24,429
See notes to financial statements. 15
Lansing Housing Commission
Discretely Presented Component Units Statement of Activities
Year Ended December 31, 2020
Mount Vernon
Oliver Gardens Park Limited
Limited Dividend Dividend
Housing Housing
Association LP Association LP Total
Operating Revenue
Tenant revenue- Net $ 267,265 $ 16,474 $ 283,739
Other operating revenue 10,158 6,673 16,831
Total operating revenue 277,423 23,147 300,570
Operating Expenses
Administrative 22,418 3,660 26,078
Utilities 83,076 11,321 94,397
Maintenance 31,797 3,074 34,871
Insurance 14,001 - 14,001
Other general expenses 65,053 - 65,053
Depreciation and amortization 103,949 172 104,121
Total operating expenses 320,294 18,227 338,521
Operating (Loss) Income (42,871) 4,920 (37,951)
Nonoperating Revenue (Expense)
Investment income 8,901 - 8,901
Interest expense (Note 6) (92,618) - (92,618)
Total nonoperating expense (83,717) - (83,717)
(Loss) Income- Before capital contributions (126,588) 4,920 (121,668)
Capital Contributions- Partner contributions 405,767 820,880 1,226,647
Change in Net Position 279,179 825,800 1,104,979
Net Position (Deficit) - Beginning of year (1,080,550) - (1,080,550)
Net Position (Deficit) - End of year $ (801,371) $ 825,800 $ 24,429
See notes to financial statements. 16
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 1 - Nature of Business
Organization and Program Descriptions
Lansing Housing Commission (LHC or the "Commission") is a Michigan public body corporation operating
as a public housing authority under the Michigan Housing Facilities Act, MCL 125.65, to provide decent,
safe, and adequate housing for low-income program participants. The Commission owns and provides
subsidy and operation support for housing units located throughout the Lansing area. LHC's assets,
deferred outflows, liabilities, deferred inflows, net position, and changes in net position are included in its
primary government fund and include all AMPs, COCC, business activities, and programs of the
Commission. The Commission receives and administers funds from the U.S. Department of Housing and
Urban Development (HUD) and has signed an annual contributions contract(ACC) under the provisions of
the ACC and all applicable provisions of the United States Housing Act of 1937 (42 U.S.C. 1437 Section
1.1). The ACC allows the Commission to obtain financial support from HUD and provide low-income
housing throughout Lansing. The Commission administers the following significant programs:
Low-rent Public Housing
The Commission owns, operates, and maintains 506 units of public housing in four properties throughout
the city of Lansing. The Low Rent Housing Assistance Program is designed to provide subsidized housing
to low-income individuals who pay monthly rent in accordance with prescribed rent formulas based on
family income limits. Revenue primarily consists of this rental income, other tenant fees collected, and an
operating subsidy from HUD.
Housing Choice Voucher Program (HCVP)
Section 8 of the Housing and Community Development Act of 1974 provides Housing Assistance
Payments on behalf of lower-income families to participating housing owners. Under the program, the
landlord-tenant relationship is between a housing owner and a family, rather than the Commission and a
family, as in the Public Housing Program. HUD contracts with the Commission to enter into contracts with
owners either to make assistance payments or to pay the difference between the approved contract rent
and the actual rent paid by the lower-income families. Housing assistance payments made to landlords
and some participants are funded through annual contributions contracts, as well as the administrative
cost of managing the program up to a per unit limit established in the contracts. The Commission
administered an average of 1,622 tenant-based vouchers monthly for the year ended June 30, 2021.
Capital Fund Program (CFP)
Funds from the Capital Fund Program provided by HUD are used to maintain and improve the public
housing portfolio. Substantially all additions to land, structures, and equipment for these properties are
accomplished by using capital grant funds.
Continuum of Care Program (Shelter Plus Care and Permanent Supportive Housing)
This program provides rental assistance to homeless individuals and families with disabilities. The
Commission is a subrecipient of the funding from the City of Lansing, Michigan.
Reporting Entity
The nucleus of the financial reporting entity, as defined by Governmental Accounting Standards Board
(GASB) Statement No. 14, as amended, is the primary government. A fundamental characteristic of a
primary government is that it is a fiscally independent entity. In evaluation of how to define the financial
reporting entity, management has considered all potential component units. A component unit is a legally
separate entity for which the primary government is financially accountable. The criteria of financial
accountability is the appointment of a voting majority plus the ability of the primary government to impose
its will upon the potential component unit. These criteria were considered in determining the reporting
entity.
17
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 1 - Nature of Business (Continued)
The five-member board of commissioners of LHC is appointed to five-year terms by the mayor of the City
of Lansing, Michigan, but the Commission's board independently oversees the Commission's operation
and designates its management. The City of Lansing, Michigan is not financially accountable for the
Commission, as it cannot impose its will on the Commission, and there is no potential for the Commission
to provide financial benefits to, or impose financial burdens on, the City of Lansing, Michigan. Accordingly,
the Commission is not a component unit of the financial reporting entity of the City of Lansing, Michigan.
GASB Statement No. 14, as amended, defines a primary government and those organizations that should
be reported as component units. The following organizations have been determined under this guidance
to be component units of the Commission.
Blended Component Units
One component unit, despite being legally separate, is so integrated with the primary government that it is,
in substance, part of the primary government. The Commission has included as a blended component unit
in business activities the operations of Lansing Housing Commission Non Profit Development Corporation
(LHCNPDC), a nonprofit organization. The Commission has financial accountability for the nonprofit and
controls its board of directors and management. As of June 30, 2021, LHCNPDC had assets of$535,767,
liabilities of $0, and net position of $535,767. The total revenue and expenses were $10,000 and $0,
respectively, for the year ended June 30, 2021.
Discretely Presented Component Unit
The following component units meet the criteria for discrete component unit presentation and are
presented separately from the primary government in the basic financial statements to clearly distinguish
the component unit balances and transactions from the primary government. These entities follow all
applicable Financial Accounting Standards Board (FASB) standards, and financial statements are
prepared on the accrual basis of accounting in accordance with GAAP. Since they do not follow
governmental accounting for presentation purposes, certain transactions may be reflected differently in
these financial statements than in the separately issued discrete component unit financial statements in
order for them to conform to the presentation of the primary government.
All of the discrete component units have a calendar year end of December 31, which differs from the
Commission's year end of June 30, 2021. For reporting purposes, the information reported in the basic
financial statements is presented as of and for the 12-month period ended December 31, 2020 for these
discrete component units.
Due to fiscal year-end differences between the Commission and the discrete component units, certain
related receivables of the Commission do not have offsetting equal liabilities reflected in the discrete
component units. Each of the discrete component units is legally separate from the Commission and
meets the fiscal dependency and financial burden criteria but do not meet any of the blending criteria. The
Commission has a 0.01 percent general partner ownership interest in each of the respective discrete
component units and, thus, does not have a majority ownership interest.
• Oliver Gardens Limited Dividend Housing Association Limited Partnership (Oliver Gardens) was
organized in 2006 as a limited partnership exclusively to acquire, rehabilitate, maintain, and operate a
30-unit rental housing project for persons of low income. Occupancy of the units began in 2007. The
project is located in Lansing, Michigan. The major activities of Oliver Gardens, including rental rates,
are governed by the partnership agreement and Michigan State Housing Development Authority
(MSHDA). The property is developed and operated under the low-income housing tax credit program,
as provided for in Section 42 of the Internal Revenue Code. A complete financial report for Oliver
Gardens can be obtained at its administrative offices at 419 Cherry St., Lansing, MI 48933.
18
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 1 - Nature of Business (Continued)
• Mount Vernon Park Limited Dividend Housing Association Limited Partnership (Mount Vernon Park)
was formed under the laws of the State of Michigan to acquire, rehabilitate, own, and operate Mount
Vernon Park Apartments under the U.S. Department of Housing and Urban Development's rental
assistance demonstration (RAD) program and consists of 140 rental units rented to low-income
individuals in Lansing, Michigan. The major activities of Mount Vernon Park, including rental rates, are
governed by the partnership agreement and Michigan State Housing Development Authority. The
property is developed and operated under the low-income housing tax credit program, as provided for
in Section 42 of the Internal Revenue Code.
• South Washington Park Limited Dividend Housing Association Limited Partnership (South Washington
Park) was formed under the laws of the State of Michigan to acquire, rehabilitate, own, and operate
South Washington Park Apartments under the U.S. Department of Housing and Urban Development's
rental assistance demonstration program and consists of 187 rental units rented to low-income
individuals in Lansing, Michigan. The major activities of South Washington Park, including rental rates,
are governed by the partnership agreement and Michigan State Housing Development Authority. The
property is developed and operated under the low-income housing tax credit program, as provided for
in Section 42 of the Internal Revenue Code.
On March 19, 2021, South Washington Park purchased South Washington Park Apartments from the
Commission in exchange for a seller note with the Commission in the amount of $5,100,000 and
$900,000 in cash. Operations of South Washington Park began on March 20, 2021. The reporting
period of South Washington Park is December 31. Given the timing of the reporting period, financial
results for South Washington Park are not included in the accompanying combining statements as of
June 30, 2021; however, the closing activity affecting the Commission that has taken place as of June
30, 2021 has been reflected in the financial statements of the Commission.
Note 2 - Significant Accounting Policies
Basis of Accounting
The basic financial statements of the Commission have been prepared on the accrual basis of accounting
in conformity with accounting principles generally accepted in the United States of America (GAAP), as
prescribed by the Governmental Accounting Standards Board. The Commission follows the business-type
activities reporting requirements of GASB Statement No. 34, which provides a comprehensive one-line
look at the Commission's financial activities. The Commission reports all of its operations as a single
business activity in a single enterprise fund. The enterprise fund is a proprietary fund, which distinguishes
operating revenue and expenses from nonoperating items. The operating revenue of the Commission
primarily consists of rental charges to tenants, operating grants from HUD, and other operating revenue
that offsets operating expenses. Operating expenses include the cost of administration, tenant services,
utilities, maintenance, protective services, general operations, depreciation, and housing assistance
payments.
As a proprietary fund, revenue is recorded when earned, and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. The Commission's financial activities operate in a
manner similar to private business enterprises and are financed through fees and charges primarily
assessed to the users of the services. For financial reporting purposes, the Commission considers its
grants associated with operations to be operating revenue because these funds more closely represent
revenue generated from operating activities rather than nonoperating activities. Grants associated with
capital acquisition and improvements are considered capital contributions and are presented after
nonoperating activity as capital contributions on the accompanying statement of activities.
19
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 2 - Significant Accounting Policies (Continued)
Fiduciary funds of the Commission include amounts held in a fiduciary capacity for others. These amounts
are not used to operate the Commission's programs. Activities that are reported as fiduciary consist of the
Other Post Employment Benefit Trust Fund, which accounts for the activities and accumulates resources
for health care insurance benefits provided to retirees.
Budgets
The Commission is required by its HUD annual contributions contracts to adopt annual budgets for the
Low Rent Public Housing Program and the Housing Choice Vouchers Program. Annual budgets are not
required for the Capital Fund Program, as those budgets are approved for the length of any given project.
Annual, project, and grant-length budgets require grantor approval.
Appropriations are authorized at the function level. Management may transfer budget authorization
between functions. All appropriations that are not used lapse at year end. Budgeted amounts are as
originally adopted or as amended by the board.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and all highly liquid investments with an original
maturity of three months or less when purchased.
Restricted Cash
Restricted cash represents amounts held in escrow accounts in the name of the entity for insurance and
PILOT expenses, FSS escrows, Section 8 funds, tenant deposits, replacement reserves, and RAD sale
proceeds. Restrictions for use in operations and approval are governed by HUD, lender requirements, or
other outside parties. In accordance with GASB Statement No. 62, cash that is restricted as to withdrawal
or use in the acquisition or construction of noncurrent assets or that is segregated for the liquidation of
long-term debts has been presented as noncurrent.
Investments
Short-term investments consisted of certificates of deposit at June 30, 2021. Investments are reported at
fair value or estimated value.
Current Receivables and Recognition of Bad Debts
Current receivables consist of revenue that is earned at year end but not yet received. Tenant accounts
generally are collectible as long as the tenant is occupying the unit; however, the Commission has
established an allowance of $5,445 as potentially uncollectible as of June 30, 2021. Tenant bad debt for
the year ended June 30, 2021 was $29,082.
Prepaid Expenses
Prepaid items consist of certain payments to vendors that reflect costs applicable to future fiscal years.
Due from Component Units
The amounts due from component units includes amounts due from the Commission's discretely
presented component units. Of the amount due, $359,837 is for accrued interest receivable on notes
receivable that are payable from the availability of cash flow generated at the operating partnership level.
Also included in this amount is $541,618 due from Oliver Gardens resulting from the Commission
providing accounting, management, oversight, and maintenance services.
20
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 2 - Significant Accounting Policies (Continued)
Capital Assets
Purchased assets and self-constructed assets and certain improvements are recorded as assets at cost
in accordance with the Commission's capitalization policy. Costs equal to or above the capitalization
threshold of $5,000 that materially add to the productive capacity and extend the life of an asset longer
than one year are capitalized, while maintenance and repair costs are expensed as incurred. Property and
equipment are depreciated using the straight-line method over the following useful lives:
Years
Buildings 40
Building improvements 7-40
Furniture and fixtures, equipment, 3-10
and machinery
GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for
Insurance Recoveries, establishes accounting and financial reporting standards for the impairment of
capital assets. If an indicator of impairment is identified and the decline in service utility was unexpected
and significant, an impairment loss is calculated in consideration of whether the capital asset will continue
to be used by the Commission. An impairment loss generally is measured by identifying the historical cost
of the service utility of the capital asset that cannot be used due to the impairment event of circumstance.
Impaired capital assets that will no longer be used by the Commission are reported at the lower of carrying
value or fair value or are written off entirely. During 2021, no impairments were recorded.
Notes Receivable
The notes receivable are reported at their original issue amount less principal repaid. Interest is
recognized according to the terms of the specific note. An allowance for loan loss is determined based on
a specific assessment of the note that is delinquent or determined to be doubtful to be collected. A note is
considered delinquent if the repayment terms are not met. All amounts deemed to be uncollectible are
charged against the allowance for loan losses in the period that determination is made. As of June 30,
2021, no amounts have been deemed to be uncollectible.
Other Noncurrent Assets
Other assets of the Commission include development costs totaling $382,069 associated with conversion
of the Commission's low-rent public housing projects under HUD's Rental Assistance Demonstration
program. The costs will be reimbursed by the newly formed companies upon final closing of the
conversions.
Other assets of the component units include $53,854 of costs related to obtaining tax credits, net of
accumulated amortization of$21,563. These costs have been capitalized and are being amortized over 15
years using the straight-line method. Amortization expense for the discrete component units' year ended
December 31, 2020 was $1,701.
Compensated Absences
The Commission allows employees to accumulate earned but unused sick and vacation pay benefits. The
Commission accrues a liability for benefits attributable to services already rendered by the Commission's
employees. Employees are entitled to a specific amount of leave per month capped at 480 hours total.
Upon separation from employment, employees with 20 years of service hired before December 31, 2009
are entitled to receive pay for 50 percent of their accrued unused sick time, and employees with 25 years
of service hired on or after January 1, 2010 are entitled to receive pay for 25 percent of their accrued
unused sick time. The liability for accrued and unused leave was $109,728 at June 30, 2021, of which
$16,460 is current and $93,268 is noncurrent.
21
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 2 - Significant Accounting Policies (Continued)
Classification of Net Assets
Net position is composed of three categories: (1) net investment in capital assets, (2) restricted, and (3)
unrestricted. The Commission's positive value of unrestricted net position in the primary government may
be used to meet ongoing obligations. When an expense is incurred for a purpose for which both restricted
and unrestricted net assets are available, the Commission's policy is to first apply restricted resources.
Each component of net assets is reported separately on the statement of net position.
i. Net investment in capital assets - This category consists of capital assets (including restricted capital
assets), net of accumulated depreciation and reduced by any outstanding balances of mortgages, notes,
or other borrowings that are attributable to the acquisition, construction, and improvements of those
assets.
ii. Restricted - This category equals the restricted cash of the Commission and consists of net position
restricted in its use by (1) external groups, such as grantors, creditors, or laws and regulations of other
governments or(2) law through constitutional provisions or enabling legislation.
iii. Unrestricted - This category includes all of the remaining net position that does not meet the definition
of the other two categories.
Revenue Recognition
The Commission receives funds from certain federal and other agencies under various grant programs.
Receivables are recorded based upon amounts expended for the various programs for which funds have
not been received to the extent grant limits have not been exceeded.
The Commission leases properties to tenants under various rental arrangements. Payments from tenants
are recognized as revenue in the period during which the associated use of premises occurred.
Operating Revenue and Expenses
The Commission's operating revenue includes HUD and state/local in support of housing units and
programs, as well as other amounts received from tenants for rent and other charges for services
provided. Operating expenses are costs incurred during the operation of its primary housing activities.
Such revenue and expenses are reported when earned or incurred, respectively.
The Commission also received a ROSS (Resident Opportunities and Self-Sufficiency) Grant from HUD in
fiscal year 2021 to cover the costs of the service coordinator.
Capital Grants
The Commission records grants received for capital outlay as contributions of capital gains.
Nonoperating Revenue and Expenses
Nonoperating revenue and expenses are derived from transactions other than those associated with the
Commission's primary housing operations and are reported as incurred, including investment activity.
Pension
The Commission offers a defined benefit pension plan to its employees. The Commission records a net
pension asset or liability for the difference between the total pension liability calculated by the actuary and
the pension plan's fiduciary net position. For the purpose of measuring the net pension liability, deferred
outflows of resources and deferred inflows of resources related to pensions, and pension expense,
information about the fiduciary net position of the pension plan and additions to/deductions from the
pension plan's fiduciary net position have been determined on the same basis as they are reported by the
pension plan. For this purpose, benefit payments (including refunds of employee contributions) are
recognized when due and payable in accordance with the benefit terms. Investments are reported at fair
value.
22
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 2 - Significant Accounting Policies (Continued)
Other Postemployment Benefit Costs
The Commission provides retiree health care benefits to eligible employees and their spouses. The
Commission records a net other postemployment benefit cost (OPEB) asset or liability for the difference
between the total OPEB liability calculated by the actuary and the OPEB plan's fiduciary net position. For
the purpose of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of
resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB
plan and additions to/deductions from the OPEB plan's fiduciary net position have been determined on the
same basis as they are reported by the OPEB plan. For this purpose, benefit payments (including refunds
of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual results could differ from
those estimates.
Upcoming Accounting Pronouncements
In June 2017, the GASB issued Statement No. 87, Leases, which improves accounting and financial
reporting for leases by governments. This statement requires recognition of certain lease assets and
liabilities for leases that were previously classified as operating leases and recognized as inflows of
resources or outflows of resources based on the payment provisions of the contract. It establishes a single
model for lease accounting based on the foundational principle that leases are financings of the right to
use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an
intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred
inflow of resources. The Commission is currently evaluating the impact this standard will have on the
financial statements when adopted. The provisions of this statement are effective for the Commission's
financial statements for the year ending June 30, 2022.
In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of
a Construction Period, which simplifies accounting for interest cost incurred before the end of construction
and requires those costs to be expensed in the period incurred. As a result, interest cost incurred before
the end of a construction period will not be capitalized and included in the historical cost of a capital asset
reported in a business-type activity or enterprise fund. This statement also reiterates that, in financial
statements prepared using the current financial resources measurement focus, interest cost incurred
before the end of a construction period should be recognized as an expenditure on a basis consistent with
governmental fund accounting principles. The requirements of the standard will be applied prospectively
and result in increased interest expense during periods of construction. The provisions of this statement
are effective for the Commission's financial statements for the June 30, 2022 fiscal year.
23
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 2 - Significant Accounting Policies (Continued)
Subsequent Events
Events that occur after the date of the statement of net position but before the financial statements were
available to be issued must be evaluated for recognition or disclosure. The effects of the subsequent
events that provide evidence about conditions that existed at the date of the statement of net position are
recognized in the accompanying financial statements. Subsequent events, which provide evidence about
conditions that existed after the date of the statement of net position, require disclosure in the
accompanying notes. Management evaluated the activity of the Commission through January 14, 2022,
which is the date the financial statements were available to be issued, and concluded that the following
subsequent event has occurred that would require disclosure in the notes to the financial statements:
• On November 18, 2021, the Commission sold real property associated with its public housing program
to convert 100 public housing units to project-based voucher units under HUD's rental assistance
demonstration program. The purchase price was $5,500,00, and the purchase was financed in part
with a seller note due back to the Commission in the amount of$5,037,425. Hildebrandt Park GP LLC,
an affiliate of the Commission, will be the managing member of the new entity, Hildebrandt Park
Limited Dividend Housing Association Limited Partnership (Hildebrandt Park). As part of this
conversion, Hildebrandt Park has committed to entering into debt agreements in the amount of
$7,724,813. These proceeds will be utilized to complete the rehabilitation of the facility. Full
rehabilitation is estimated to be completed during 2023.
Note 3 - Deposits and Investments
Deposits and investments are reported in the financial statements for the primary government as follows:
Primary
Government
(LHC)
Cash and cash equivalents-Unrestricted $ 5,192,376
Cash and cash equivalents-Restricted 684,839
Tenant security deposits- Restricted 88,773
Investments-Certificates of deposit 541,604
Cash and cash equivalents-Restricted (noncurrent) 2,304,225
Total deposits and investments $ 8,811,817
Deposits and investments are reported in the financial statements for the discrete component units as
follows:
Oliver Gardens Waverly Place Total
Cash and cash equivalents-Unrestricted $ - $ 126,350 $ 126,350
Cash and cash equivalents-Restricted 384,537 1,485,235 1,869,772
Tenant security deposits- Restricted 5,248 100 5,348
Total $ 389,785 $ 1,611,685 $ 2,001,470
24
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 3 - Deposits and Investments (Continued)
Michigan Compiled Laws Section 129.91 (Public Act 20 of 1943, as amended) authorizes local
governmental units to make deposits and invest in the accounts of federally insured banks, credit unions,
and savings and loan associations that have offices in Michigan. The law also allows investments outside
the state of Michigan when fully insured. The local unit is allowed to invest in bonds, securities, and other
direct obligations of the United States or any agency or instrumentality of the United States, repurchase
agreements, bankers' acceptances of United States banks, commercial paper rated within the two highest
classifications that matures no more than 270 days after the date of purchase, obligations of the State of
Michigan or its political subdivisions that are rated as investment grade, and mutual funds composed of
investment vehicles that are legal for direct investment by local units of government in Michigan.
The Commission has designated two banks for the deposit of its funds. The investment policy adopted by
the board in accordance with Public Act 196 of 1997 has authorized investment in bonds and securities of
the United States government and bank accounts and CDs but not the remainder of state statutory
authority, as listed above. The Commission's deposits and investments are in accordance with statutory
authority.
The Commission's cash and investments are subject to several types of risk, which are examined in more
detail below:
Custodial Credit Risk of Bank Deposits
Custodial credit risk is the risk that, in the event of a bank failure, the Commission's deposits may not be
returned to it. The Commission does not have a deposit policy for custodial credit risk. At year end, the
Commission had bank deposits of $0 (certificates of deposit and checking and savings accounts) that
were uninsured and uncollateralized.
Custodial Credit Risk of Investments
Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Commission will not
be able to recover the value of its investments or collateral securities that are in the possession of an
outside party. The Commission does not have a policy for custodial credit risk. At year end, $291,604 of
investment securities was uninsured and unregistered, with securities held by the counterparty or by its
trust department or agent but not in the Commission's name.
Interest Rate Risk
Interest rate risk is the risk that the value of investments will decrease as a result of a rise in interest rates.
The Commission's investment policy does not restrict investment maturities other than commercial paper,
which can only be purchased with a 270-day maturity.
The investments included in the other postemployment benefits trust within the fiduciary fund consist of
common collective trust funds of $455,332. The underlying asset allocation of this fund consists of 24.7
percent fixed-income bonds, which are subject to interest rate risk.
Fair Value Measurements
The Commission categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure
the fair value of the asset. Level 1 inputs are quoted market prices in active markets for identical assets,
Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable
inputs. Investments that are measured at fair value using net asset value per share (or its equivalent) as a
practical expedient are not classified in the fair value hierarchy.
In instances where inputs used to measure fair value fall into different levels in the above fair value
hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is
significant to the valuation. The Commission's assessment of the significance of particular inputs to these
fair value measurements requires judgement and considers factors specific to each asset or liability.
25
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 3 - Deposits and Investments (Continued)
Investments in Entities that Calculate Net Asset Value per Share
The Commission holds shares or interests in investment companies where the fair value of the
investments is measured on a recurring basis using net asset value per share (or its equivalent) of the
investment companies as a practical expedient.
At June 30, 2021, the fair value, unfunded commitments, and redemption rules of those investments are
as follows:
Redemption
Unfunded Frequency, if Redemption
Carrying Value Commitments Eligible Notice Period
MERS Total Market Fund $ 455,332 $ - N/A N/A
The MERS Total Market Fund seeks to provide current income and capital appreciation while minimizing
the volatility of the capital markets. MERS manages the asset allocation and monitors the underlying
investment managers of the MERS Total Market Fund.
Note 4 - Notes Receivable
At June 30, 2021, the Commission's notes receivable consisted of the following:
Balance Balance
July 1, 2020 Additions Reductions June 30, 2021
Oliver Gardens-
Note receivable $ 300,133 $ - $ - $ 300,133
Mount Vernon Park-
Seller Note Receivable - 7,145,775 - 7,145,775
South Washington Park-
Seller Note Receivable - 5,100,000 - 5,100,000
Total $ 300,133 $ 12,245,775 $ - $ 12,545,908
Oliver Gardens
The loan bears interest at 1 percent, compounded annually. The total amount of accrued interest at June
30, 2021 is $47,990. No principal or interest is due until the loan matures on January 1, 2048. The note is
secured by land and substantially all the real property owned by Oliver Gardens.
Mount Vernon Park
The loan bears interest at 4.5 percent, compounded annually. The total amount of accrued interest at
June 30, 2021 is $168,268. No principal or interest is due until the loan matures on January 1, 2070. The
note is secured by land and substantially all the real property owned by Mount Vernon Park.
South Washington Park
The loan bears interest at 9.5 percent, compounded annually. The total amount of accrued interest at
June 30, 2021 is $143,359. No principal or interest is due until the loan matures on March 31, 2061. The
note is secured by land and substantially all the real property owned by South Washington Park.
26
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 5 - Capital Assets
Capital asset activity of the Commission's governmental activities was as follows:
Primary Government
Balance Balance
July 1, 2020 Additions Reductions June 30, 2021
Capital assets not being
depreciated:
Land $ 1,554,771 $ - $ (274,871) $ 1,279,900
Construction in progress 957,455 2,262,853 (2,400,528) 819,780
Total nondepreciable assets 2,512,226 2,262,853 (2,675,399) 2,099,680
Capital assets being depreciated:
Buildings and improvements 52,626,312 37,650 (20,249,848) 32,414,114
Furniture and equipment 1,323,281 31,555 (586,165) 768,671
Total depreciable capital
assets 53,949,593 69,205 (20,836,013) 33,182,785
Accumulated depreciation 42,682,879 869,391 (16,565,507) 26,986,763
Net capital assets being
depreciated 11,266,714 (800,186) (4,270,506) 6,196,022
Net capital assets $ 13,778,940 $ 1,462,667 $ (6,945,905) $ 8,295,702
Depreciation expense for the year ended June 30, 2021 was $869,391 and is included in depreciation and
amortization on the statement of activities. During the year ended June 30, 2021, the Commission
disposed of the capital assets associated with Mount Vernon Park and South Washington Park in
connection with their RAD conversions (as discussed in Note 1), resulting in a net gain on disposals of
$7,605,477.
Component Units
Balance
Balance December 31,
January 1, 2020 Additions Reductions 2020
Capital assets not being
depreciated -Land:
Land $ 685,162 $ 520,000 $ - $ 1,205,162
Construction in progress 12,510 1,736,867 - 1,749,377
Total nondepreciable assets 697,672 2,256,867 - 2,954,539
Capital assets being depreciated:
Buildings and improvements 3,318,485 8,030,000 - 11,348,485
Furniture and equipment 175,949 - - 175,949
Subtotal 3,494,434 8,030,000 - 11,524,434
Accumulated depreciation 1,993,829 102,420 - 2,096,249
Net capital assets being
depreciated 1,500,605 7,927,580 - 9,428,185
Net capital assets $ 2,198,277 $ 10,184,447 $ - $ 12,382,724
27
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 5 - Capital Assets (Continued)
Construction in Progress
Capital improvements made for LHC's low-rent housing units are financed by grant funds provided by
HUD under capital grants. Capital grants are awarded annually based on a five-year comprehensive
modernization plan submitted by the Commission. Related construction in progress is costs incurred for
the modernization of low-rent units. When modernization projects are completed, HUD issues a
modernization cost certificate for each grant, closing out the grant for that year, at which time construction
in progress for that grant is placed in service and transferred to the buildings or improvements categories.
Note 6 - Long-term Debt
Primary Government
Lansing Housing Commission's debt is composed of a promissory note payable to Davenport University
and a lease with PNC for the energy performance contract. These are both considered direct borrowings.
Davenport University
The Commission purchased an office building and land from Davenport University (the "Lender") in 2012
for $950,000, with a $700,000 promissory note payable to the Lender. The note bears an annual interest
rate of 2.4 percent, which is subject to adjustment concurrently with changes in the Lender's cost of funds.
The note was paid in full during the fiscal year ended June 30, 2021.
PNC
Energy conservation measures (ECMs), as defined in the Commission's energy performance contract
(EPC) dated December 11, 2013, are financed by PNC, as stipulated in the master equipment lease-
purchase agreement in the principal amount of $2,051,375. This obligation was issued pursuant to the
provisions of Act 18, Public Acts of Michigan 1933 (ex. Sess), as amended, and Chapter 260 of the Code
of Ordinances of the City of Lansing. HUD's Public Housing EPC program is an innovative financing
technique that uses cost savings from reduced energy consumption to repay the cost of installing ECMs.
The project is financed with a tax-exempt lease for a term of 15 years at a fixed interest rate of 3.91
percent. PNC as the lender has a security interest in the ECMs. All leases held with PNC were paid in full
during the fiscal year ended June 30, 2021.
28
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 6 - Long-term Debt (Continued)
Component Units
The discrete component units have the following loans outstanding as of December 31, 2020 that are
secured by land and substantially all real property owned by the component units. These are all
considered direct borrowings:
Oliver Gardens - Mortgage dated October 17, 2006 held by Michigan State Housing
Development Authority in the amount of $1,775,482. The mortgage bears interest at a
rate of 5.5 percent. However, an amount equal to 0.5 percent of interest is deferred until
the mortgage principal balance is paid in full. Monthly payments of principal and interest
are required in the amount of $8,961 through maturity on February 1, 2043. Financing
fees of $45,415 were incurred in connection with obtaining the loan. These costs are
being amortized over the term of the related debt and are reported net of debt on the
statement of net position. As of December 31, 2020, total accumulated amortization
related to these costs was $17,515.Amortization expense was $1,298 for the year ended
December 31, 2020 and has been included as a component of interest expense on the
statement of activities $ 1,411,100
Oliver Gardens- HOME loan dated June 1, 2006 in the amount of$170,000. The loan is
held by the City of Lansing, Michigan under the HOME Investments Partnership Program
and bears interest at a rate of 0.5 percent, compounded annually. Principal and interest
are due on the loan when it matures on December 31, 2041 170,000
Oliver Gardens - Community Development Block Grant (CDBG) loan dated May 31,
2006 in the amount of$550,000. The loan is held by the City of Lansing, Michigan under
the CDBG Program and bears interest at a rate of 0.5 percent, compounded annually, on
$150,000 of the loan. Principal and interest are due on the loan when it matures on May
31, 2046 550,000
Oliver Gardens - Lansing Housing Commission note dated December 31, 2007 in the
amount of$300,133. The loan is held by LHC and bears an interest rate of 4.5 percent.
Principal and interest are due on the loan when it matures on January 1, 2048 300,133
Mount Vernon Park - Lansing Housing Commission note dated December 22, 2020 in
the amount of $7,145,775. The loan is held by LHC and bears an interest rate of 4.5
percent. Principal and interest are due on the loan when it matures 50 years after the
date of completion of the project, which is anticipated to occur during the Mount Vernon
Park's year ending December 31, 2022. As the maturity date is contingent upon
construction completion, future minimal payments have not been reflected in the maturity
schedule below 7,145,775
Mount Vernon Park - Construction loan dated December 22, 2020 held by Michigan
State Housing Development Authority in the amount of$15,098,727. Due to the nature of
loan being related to the construction and development of Mount Vernon Park, the full
amount of the loan has not been drawn upon as of Mount Vernon Park's year ended
December 31, 2020. Total funds drawn as of December 31, 2020 totaled$4,238,113. The
mortgage bears interest at a rate of 4.25 percent and is payable monthly beginning on
February 1, 2021. The construction loan has a maturity of 18 months after initial closing,
at which point it may be converted to permanent financing at reduced principal balance of
$10,345,643. The permanent financing would require monthly principal and interest
payments and would mature 40 years after the conversion date. Financing fees of
$324,374 were incurred in connection with obtaining the loan. These costs will be
amortized over the term of the related debt and are reported net of debt on the statement
of net position. As the maturity date is contingent upon the conversion to permanent
financing, future minimal payments have not been reflected in the maturity schedule
below 3,913,739
29
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 6 - Long-term Debt (Continued)
Mount Vernon Park - HOME loan dated December 22, 2020 in the amount of
$1,119,976. The loan is held by the City of Lansing, Michigan under the HOME
Investments Partnership Program and bears interest at a rate of 1.0 percent,
compounded annually. Due to the nature of loan being related to the construction and
development of Mount Vernon Park, the full amount of the loan has not been drawn upon
as of Mount Vernon Park's year ended December 31, 2020. Total funds drawn as of
December 31, 2020 totaled $50,000. Principal and interest are payable from available
cash flow and are to be paid in full no later than the earliest to occur of(i)the sale of the
development, (ii)the refinancing of the MSHDA loan, or(iii) 50 years from the date of the
note, December 22, 2070. As the maturity date is contingent upon the conditions
described above, future minimal payments have not been reflected in the maturity
schedule below $ 50,000
Total 13,540,747
Less current portion 36,404
Long-term portion $ 13,504,343
Component Units
Future minimum principal and interest payments on direct borrowings to maturity for the years ending
December 31 are as follows:
Years Ending Amount Interest
2021 $ 36,404 $ 71,121
2022 38,267 69,259
2023 40,225 67,300
2024 42,283 65,242
2025 44,446 63,086
2026-2030 258,801 278,859
2031-2035 332,135 205,525
2036-2040 426,248 111,412
2041-2045 362,291 342,527
2046-2050 850,133 -
Total $ 2,431,233 $ 1,274,331
Changes in long-term debt for the year ended June 30, 2021 (or December 31, 2020 for the discretely
presented component units) are presented below:
Primary Government
Balance- Unamortized
Beginning of Financing Balance- Due in One
Year Additions Reductions Costs End of Year Year
Davenport $ 67,354 $ - $ (67,354) $ - $ - $ -
PNC 1,428,897 - (1,428,897) - - -
Total $ 1,496,251 $ - $ (1,496,251) $ - $ - $ -
30
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 6 - Long-term Debt (Continued)
Component Units
Balance- Unamortized
Beginning of Financing Balance- End Due in One
Year Additions Reductions Costs of Year Year
Oliver Gardens:
MSHDA $ 1,473,633 $ - $ (34,633) $ (27,900) $ 1,411,100 $ 36,404
City of Lansing, Michigan 720,000 - - - 720,000 -
LHC 300,133 - - - 300,133 -
Mount Vernon Park:
MSHDA - 4,238,113 - (324,374) 3,913,739 -
City of Lansing, Michigan - 50,000 - - 50,000 -
LHC - 7,145,775 - - 7,145,775 -
Total $ 2,493,766 $ 11,433,888 $ (34,633) $ (352,274) $ 13,540,747 $ 36,404
Interest expense for the year ended June 30, 2021 was $65,902 for the primary government, and interest
expense for the year ended December 31, 2020 was $91,320 for the discrete component units, excluding
$1,298 of amortization expense of financing fees, which has been reported as a component of interest
expense on the statement of activities.
Note 7 - Agent Defined Benefit Pension Plan Description
Plan Description
Lansing Housing Commission participates in an agent multiple-employer defined benefit pension plan
administered by the Municipal Employees' Retirement System of Michigan (MERS) that covers all
employees of the Commission. MERS was established as a statewide public employee pension plan by
the Michigan Legislature under PA 135 of 1945 and is administered by a nine-member retirement board.
MERS issues a publicly available financial report, which includes the financial statements and required
supplemental information of this defined benefit plan. This report can be obtained at www.mersofmich
igan.com or in writing to MERS at 1134 Municipal Way, Lansing, MI 48917.
Benefits Provided
The plan provides certain retirement, disability, and death benefits to plan members and beneficiaries. PA
427 of 1984, as amended, established and amends the benefit provisions of the participants in MERS.
The MERS plan covers employees in the general open division; employees hired after May 1, 2012; and
exempt employees hired before May 1, 2012. Effective May 1, 2021, the plan was closed to all new hires.
Retirement benefits for employees in the open general division are calculated as 2.25 percent of the
employee's final 3-year average salary times the employee's years of service. Normal retirement age is
60, with early retirement at 55 with 15 years of service. Early retirement age with reduced benefits is 50
with 25 years of service. The vesting period is 8 years. Employees are eligible for nonduty disability
benefits after 8 years of service and for duty-related disability benefits upon hire. Disability retirement
benefits are determined in the same manner as retirement benefits but are payable immediately without
an actuarial reduction. Death benefits for a surviving spouse equal 85 percent of the deceased member's
accrued retirement allowance, computed in the same manner as a service retirement allowance, based on
service and final average compensation at the time of death. An employee who leaves service may
withdraw his or her contributions plus any accumulated interest.
31
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 7 - Agent Defined Benefit Pension Plan Description (Continued)
Retirement benefits for employees hired after May 1, 2012 are calculated as 1.70 percent of the
employee's final 3-year average salary times the employee's years of service. Normal retirement age is
60. Early retirement age with reduced benefits is at 50 with 25 years of service or 55 with 15 years of
service. The vesting period is 8 years. Employees are eligible for nonduty disability benefits after 8 years
of service and for duty-related disability benefits upon hire. Disability retirement benefits are determined in
the same manner as retirement benefits but are payable immediately without an actuarial reduction. Death
benefits for a surviving spouse equal 85 percent of the deceased member's accrued retirement allowance,
computed in the same manner as a service retirement allowance, based on service and final average
compensation at the time of death. An employee who leaves service may withdraw his or her contributions
plus any accumulated interest.
Retirement benefits for exempt employees hired before May 1, 2012 are calculated as 2.25 percent of the
employee's final 3-year average salary times the employee's years of service. Normal retirement age is
60, with early retirement at 55 with 15 years of service. Early retirement age with reduced benefits is 50
with 25 years of service. The vesting period is 8 years. Employees are eligible for nonduty disability
benefits after 8 years of service and for duty-related disability benefits upon hire. Disability retirement
benefits are determined in the same manner as retirement benefits but are payable immediately without
an actuarial reduction. Death benefits for a surviving spouse equal 85 percent of the deceased member's
accrued retirement allowance, computed in the same manner as a service retirement allowance, based on
service and final average compensation at the time of death. An employee who leaves service may
withdraw his or her contributions plus any accumulated interest.
Benefit terms provide for annual cost of living adjustments to each employee's retirement allowance
subsequent to the employee's retirement date. The annual adjustments are 3 percent, noncompounding.
Benefit terms, within the parameters established by MERS, generally are established and amended by
authority of the board of commissioners, generally after negotiations of these terms with the affected
unions. Benefit terms may be subject to binding arbitration in certain circumstances.
Employees Covered by Benefit Terms
At the December 31, 2020 measurement date, the following employees were covered by the benefit
terms:
Inactive plan members or beneficiaries currently receiving benefits 44
Inactive plan members entitled to but not yet receiving benefits 12
Active plan members 23
Total employees covered by MERS 79
Contributions
Article 9, Section 24 of the State of Michigan constitution requires that financial benefits arising on account
of employee service rendered in each year be funded during that year. Accordingly, MERS retains an
independent actuary to determine the annual contribution. The employer is required to contribute amounts
at least equal to the actuarially determined rate, as established by the MERS retirement board. The
actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by
plan members during the year, with an additional amount to finance any unfunded accrued liability. The
employer may establish contribution rates to be paid by its covered employees.
For the plan year ended December 31, 2020, the average employee contribution rate was 5.0 percent of
annual pay for all divisions, and the Commission's average contribution rate was 6.13 percent under the
new hires division of annual payroll.
32
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 7 - Agent Defined Benefit Pension Plan Description (Continued)
Net Pension Liability
The Commission has chosen to use the December 31 measurement date as its measurement date for the
net pension liability. The June 30, 2021 fiscal year end reported net pension liability was determined using
a measure of the total pension liability and the pension net position as of the December 31, 2020
measurement date. The December 31, 2020 measurement date total pension liability was determined by
an actuarial valuation performed as of that date.
Changes in the net pension liability during the measurement year were as follows:
Increase (Decrease)
Total Pension Plan Net Net Pension
Changes in Net Pension Liability Liability Position Liability
Balance at December 31,2019 $ 9,462,695 $ 8,146,961 $ 1,315,734
Service cost 88,143 - 88,143
Changes in benefits 692,942 - 692,942
Differences between expected and actual experience 143,224 - 143,224
Changes in assumptions 291,056 - 291,056
Contributions-Employer - 122,635 (122,635)
Contributions-Employee - 64,814 (64,814)
Net investment income - 1,074,111 (1,074,111)
Benefit payments, including refunds (778,229) (778,229) -
Administrative expenses - (15,919) 15,919
Net changes 437,136 467,412 (30,276)
Balance at December 31,2020 $ 9,899,831 $ 8,614,373 $ 1,285,458
The plan's fiduciary net position represents 87.0 percent of the total pension liability.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended June 30, 2021, the Commission recognized pension expense of$351,917. At June 30,
2021, the Commission reported deferred outflows of resources and deferred inflows of resources related
to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Difference between expected and actual experience $ 71,612 $ (22,536)
Changes in assumptions 250,677 Net difference between projected and actual earnings on pension plan
investments - (329,128)
Employer contributions to the plan subsequent to the measurement
date 1,275,085 -
Total $ 1,597,374 $ (351,664)
33
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 7 - Agent Defined Benefit Pension Plan Description (Continued)
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions
will be recognized in pension expense as follows. These amounts are exclusive of the employer
contributions to the plan made subsequent to the measurement date of$1,275,085, which will impact the
net pension liability in fiscal year 2022, rather than pension expense.
Years Ending
June 30 Amount
2022 $ 230,725
2023 17,012
2024 (181,512)
2025 (95,600)
Actuarial Assumptions
The total pension liability in the December 31, 2020 actuarial valuation was determined using an inflation
assumption of 2.5 percent, assumed salary increases of 3 percent (in the long term, plus a merit and
longevity increase ranging from 0 to 6.7 percent), and an investment rate of return (net of pension plan
investment expenses)of 7.6 percent.
The valuation incorporates fully generational mortality. The base mortality tables used are constructed as
described below and are weighted based on sex-distinct rates:
Preretirement mortality:
• 100 percent of Pub-2010 Juvenile Mortality Tables for Ages 0-17
• 100 percent of PubG-2010 Employee Mortality Tables for Ages 18-80
• 100 percent of PubG-2010 Healthy Retiree Tables for Ages 81-120
Nondisabled retired plan members and beneficiaries:
• 106 percent of Pub-2010 Juvenile Mortality Tables for Ages 0-17
• 106 percent of PubG-2010 Employee Mortality Tables for Ages 18-49
• 106 percent of PubG-2010 Healthy Retiree Tables for Ages 50-120
Disabled retired plan members:
• 100 percent of Pub-2010 Juvenile Mortality Tables for Ages 0-17
• 100 percent of PubNS-2010 Disabled Retiree Tables for Ages 18-120
Future mortality improvements are assumed each year using scale MP-2019 applied fully generationally
from the Pub-2010 base year of 2010.
The actuarial assumptions used in the December 31, 2020 valuation were based on the results of an
actuarial experience study for the period from January 1, 2013 through December 31, 2018.
Discount Rate
The discount rate used to measure the total pension liability was 7.6 percent. The projection of cash flows
used to determine the discount rate assumed that employee contributions will be made at the current
contribution rate and that employer contributions will be made at rates equal to the difference between
actuarially determined contribution rates and the employee rate.
34
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 7 - Agent Defined Benefit Pension Plan Description (Continued)
Investment Rate of Return
Based on those assumptions, the pension plan's fiduciary net position was projected to be available to
make all projected future benefit payments of current active and inactive employees. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
The long-term expected rate of return on pension plan investments of 7.6 percent was determined using a
model in which best-estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real rates
of return by the target asset allocation percentage and by adding expected inflation. The target allocation
and best estimates of arithmetic real rates of return as of December 31, 2020, the measurement date, for
each major asset class, are summarized in the following tables:
Long-term
Target Allocation Expected Real
Asset Class (%) Rate of Return
Global equity 60.00 % 5.25 %
Global fixed income 20.00 1.25
Private investment 20.00 7.25
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Commission, calculated using the discount rate of
7.6 percent, as well as what the Commission's net pension liability would be if it were calculated using a
discount rate that is 1 percentage point lower(6.6 percent)or 1 percentage point higher(8.6 percent)than
the current rate:
1 Percentage Current Discount 1 Percentage
Point Decrease Rate Point Increase
(6.60%) (7.60%) (8.60%)
Net pension liability of the Commission $ 2,352,358 $ 1,285,458 $ 439,695
Pension Plan Fiduciary Net Position
Detailed information about the plan's fiduciary net position is available in the separately issued financial
report. For the purpose of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the plan's fiduciary net
position and additions to/deductions from fiduciary net position have been determined on the same basis
as they are reported by the plan. The plan uses the economic resources measurement focus and the full
accrual basis of accounting. Investments are stated at fair value. Contribution revenue is recorded as
contributions are due, pursuant to legal requirements. Benefit payments and refunds of employee
contributions are recognized as expense when due and payable in accordance with the benefit terms.
Assumption Changes
A 5-year experience study analyzing historical experience from 2013 through 2018 was completed in
February 2020. The experience study resulted in updated demographic assumptions, including
adjustments to the following actuarial assumptions: mortality, retirement, disability, and termination rates
that were first used in the December 31, 2020 actuarial valuation.
35
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 8 - Other Postemployment Benefit Plan
Plan Description
The Commission provides retiree health care benefits to eligible employees and their spouses. This is a
single-employer defined benefit plan administered by the Commission and is provided under a separate
collective bargaining agreement on health care. The plan does not issue a publicly available financial
report.
The financial statements of the OPEB plan are included in these financial statements as an other
employee benefit trust fund (a fiduciary fund).
Benefits Provided
The plan provides comprehensive medical and life insurance for retirees. For those retirees over the age
of 65 as of January 1, 2019, both the retiree and spouse may be covered in retirement. Health, dental, and
vision benefits will be administered through a third-party insurer, with each retiree given $100 per month
($200 per month if the spouse is eligible for coverage) to purchase an individual Medicare Supplement,
Medicare Part D Prescription Drug, and Medicare Advantage plan, along with dental and vision plans. For
those retirees under the age of 65 as of January 1, 2019, each retiree will be given $750 per month
($1,200 per month if the spouse is eligible for coverage) to purchase a plan of their choosing along with
dental and vision. For active employees hired prior to January 1, 2019, the Commission will contribute $50
per month per employee, while a payroll deduction will be required of each employee of $10 per month.
Both amounts will be deposited into the MERS Health Care Savings Program. Employees will be vested
into the heath retirement account after eight years of service. Prior to vesting, employees leaving
employment will immediately be allowed to keep and use their personal contributions plus investment
gains on their health account. The commission portion will be returned for use in satisfying other OPEB
liabilities. After vesting, the entire health account is available for the employee's use for medical expenses
upon retirement or termination of employment. Employees hired after January 1, 2019 will not be provided
OPEB benefits.
Employees Covered by Benefit Terms
The following members were covered by the benefit terms:
Date of member count July 1, 2020
Inactive plan members or beneficiaries currently receiving benefits 15
Active plan members 18
Total plan members 33
Contributions
The authority to establish and amend the contribution requirements of the Commission and plan members
is held by the board of commissioners. The board of commissioners establishes contribution rates based
on an actuarially determined rate per a funding valuation. The actuarially determined contribution for the
year ended June 30, 2021 was $11,151. Retiree health care costs are paid by the Commission on a pay-
as-you-go basis. For the fiscal year ended June 30, 2021, the Commission made payments for
postemployment health benefit premiums of$82,435.
Net OPEB Liability
The Commission has chosen to use the June 30 measurement date as its measurement date for the net
OPEB liability. The June 30, 2021 fiscal year end reported net OPEB liability was determined using an
actuarial valuation performed as of July 1, 2019, which used update procedures to roll forward the
estimated liability to the June 30, 2021 measurement date.
36
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 8 - Other Postemployment Benefit Plan (Continued)
Changes in the net OPEB liability during the measurement year were as follows:
Increase (Decrease)
Total OPEB Plan Net Net OPEB
Changes in Net OPEB Liability Liability Position Liability
Balance at July 1, 2020 $ 542,214 $ 391,580 $ 150,634
Changes for the year:
Service cost 8,907 - 8,907
Interest 28,075 - 28,075
Changes in assumptions 8,667 - 8,667
Contributions-Employer - 82,435 (82,435)
Net investment income - 63,752 (63,752)
Benefit payments, including refunds (82,435) (82,435) -
Net changes (36,786) 63,752 (100,538)
Balance at June 30,2021 $ 505,428 $ 455,332 $ 50,096
The plan's fiduciary net position represents 90.1 percent of the total OPEB liability.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
OPEB
For the year ended June 30, 2021, the Commission recognized OPEB expense of$(41,276).
At June 30, 2021, the Commission reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Difference between expected and actual experience $ 56,502 $ (94,247)
Changes in assumptions 6,931 (121,735)
Net difference between projected and earnings on OPEB plan
investments - (29,188)
Total $ 63,433 $ (245,170)
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB
will be recognized in OPEB expense as follows:
Years Ending
June 30 Amount
2022 $ (56,721)
2023 (56,721)
2024 (61,339)
2025 (6,956)
Total $ (181,737)
37
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 8 - Other Postemployment Benefit Plan (Continued)
Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of July 1, 2019. The valuation used
the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Inflation 2.5 percent as of June 30, 2021 and for future periods
Cost of living 3.50 percent per year
Salary increases 3.00 percent annually as of June 30, 2021 and for future periods
Mortality General: RP-2014 Mortality Table for Blue Collar Healthy Annuitants projected
generationally with scale MP-2016 for males and females, set forward one year for
females(postretirement mortality)/set forward one year for both males and females
(disabled mortality)
The actuarial assumptions used to calculate the actuarial accrued liability and the service cost primarily
reflect the latest experience studies of a large State Municipal Retirement System issued in 2014 and their
most recent analysis of retiree mortality during 2015 and 2016.
Discount Rate
The discount rate used to measure the total OPEB liability was 5.25 percent. The projection of cash flows
used to determine the discount rate assumed that employee contributions will be made at the current
contribution rate and that commission contributions will be made at rates equal to the difference between
actuarially determined contribution rates and the employee rate.
Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to
make all projected future benefit payments of current active and inactive employees. Therefore, the long-
term expected rate of return on OPEB plan investments was applied to all periods of projected benefit
payments to determine the total OPEB liability.
Investment Rate of Return
The investment rate of return was assumed to be 5.44 percent, net of OPEB plan investment expense,
including inflation.
The long-term expected rate of return on OPEB plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
OPEB plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future real rates
of return by the target asset allocation percentage and adding expected inflation. Best estimates of
arithmetic real rates of return as of the June 30, 2021 measurement date for each major asset class
included in the OPEB plan's target asset allocation are summarized in the following table:
Long-term
Expected Real
Asset Class Rate of Return
Global equity 5.25 %
Global fixed income 1.25
Private investment 7.25
38
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 8 - Other Postemployment Benefit Plan (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the Commission, calculated using the discount rate of 5.25
percent, depending on the plan option. The following also reflects what the Commission's net OPEB
liability would be if it were calculated using a discount rate that is 1 percentage point lower (4.25 percent)
or 1 percentage point higher(6.25 percent)than the current rate:
1 Percentage Current Discount 1 Percentage
Point Decrease Rate Point Increase
(4.25%) (5.25%) (6.25%)
Net OPEB liability of the plan $ 89,621 $ 50,096 $ 16,763
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rate
The following presents the net OPEB liability of the Commission, calculated using the health care cost
trend rate of 3.5 percent, as well as what the Commission's net OPEB liability would be if it were
calculated using a health care cost trend rate that is 1 percentage point lower or 1 percentage point higher
than the current rate:
Current Health
1 Percentage Care Cost Trend 1 Percentage
Point Decrease Rate Point Increase
(2.50%) (3.50%) (4.50%)
Net OPEB liability of the plan $ 50,096 $ 50,096 $ 50,096
Assumption Changes
The sole change in assumptions from June 30, 2020 to June 30, 2021 was the change in the discount rate
from 5.50 percent to 5.25 percent.
Investment Policy
The OPEB plan's policy in regard to the allocation of invested assets is established and may be amended
by the board of commissioners. It is the policy of the board of commissioners to pursue an investment
strategy that manages risk through the prudent diversification of the portfolio across a broad selection of
distinct asset classes. The OPEB plan's investment policy discourages the use of cash equivalents,
except for liquidity purposes, and aims to refrain from dramatically shifting asset class allocations over
short time spans. The following was the board of commissioners' adopted asset allocation policy as of
June 30, 2021:
Plan
Asset Class Target Allocation
Global equity 60.00 %
Global fixed income 20.00
Private investment 20.00
Total 100.00 %
Rate of Return
For the year ended June 30, 2021, the annual money-weighted rate of return on OPEB plan investments,
net of OPEB plan investment expense, was 5.44 percent. The money-weighted rate of return expresses
investment performance, net of investment expense, adjusted for the changing amounts actually invested.
39
Lansing Housing Commission
Notes to Financial Statements
June 30, 2021
Note 9 - Commitments and Contingencies
The Commission receives financial assistance from federal and state agencies in the form of grants. The
disbursement of funds received under these programs generally requires compliance with the terms and
conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any
disallowed claims resulting from such audits could become a liability of the Commission. However, in the
opinion of management, any such disallowed claims will not have a material adverse effect on the overall
financial position of the Commission at June 30, 2021.
The collective bargaining three-year agreement between the Commission's employees and Chapter of
Local 1390.11 and Michigan Council #25, AFSCME, AFL-CIO, covering approximately 31 percent of the
Commission's labor force, will be in place from January 1, 2019 through December 31, 2021.
Note 10 - Risk Management
The Commission is exposed to various risks of loss related to property loss, torts, errors and omissions,
and employee injuries (workers' compensation), as well as medical benefits provided to employees. The
Commission has purchased commercial insurance for all risk of loss, including workers' compensation,
employee health, and accident insurance. Settled claims relating to the commercial insurance have not
exceeded the amount of insurance coverage in any of the past three fiscal years.
Note 11 - Concentrations
The Commission operates in a heavily regulated environment. The operations of the Commission are
subject to the administrative directives, rules, and regulations of federal, state, and local regulatory
agencies, including, but not limited to, HUD. Such administrative directives, rules, and regulations are
subject to change by an Act of Congress or an administrative change mandated by HUD. Such changes
may occur with little notice or inadequate funding to pay for the related costs and the additional
administrative burden to comply with the changes.
For the year ended June 30, 2021, approximately 93 percent of the operating revenue reflected in the
primary government basic financial statements is from HUD.
40
Required Supplemental Information
41
Lansing Housing Commission
Required Supplemental Information
Schedule of Changes in the Commission's Net Pension Liability and Related Ratios
Last Seven Plan Years
Years Ended December 31
2020 2019 2018 2017 2016 2015 2014
Total Pension Liability
Service cost $ 88,143 $ 74,380 $ 72,132 $ 91,117 $ 126,678 $ 114,272 $ 114,461
Interest 692,942 708,880 700,146 687,782 714,076 698,614 684,653
Differences between expected and actual
experience 143,224 (67,609) 77,954 88,563 (140,946) (123,435) -
Changes in assumptions 291,056 315,446 - - (349,397) 405,966
Benefit payments,including refunds (778,229) (784,425) (701,709) (661,395) (651,805) (635,102) (624,495)
Other - - (21,160) (4,268) (521) - -
Net Change in Total Pension Liability 437,136 246,672 127,363 201,799 (301,915) 460,315 174,619
Total Pension Liability-Beginning of year 9,462,695 9,216,023 9,088,660 8,886,861 9,188,776 8,728,461 8,553,842
Total Pension Liability-End of year $ 9,899,831 $ 9,462,695 $ 9,216,023 $ 9,088,660 $ 8,886,861 $ 9,188,776 $ 8,728,461
Plan Fiduciary Net Position
Contributions-Employer $ 122,635 $ 87,890 $ 145,613 $ 685,378 $ 693,689 $ 158,735 $ 215,191
Contributions-Member 64,814 58,282 62,196 70,951 67,424 55,586 37,167
Net investment income(loss) 1,074,111 1,025,515 (323,275) 1,035,066 743,039 (104,348) 446,261
Administrative expenses (15,919) (17,645) (16,423) (16,381) (14,686) (15,480) (16,314)
Benefit payments,including refunds (778,229) (755,797) (701,709) (661,395) (651,805) (635,102) (624,495)
Other - (28,628) (22,040) (4,445) (521) -
Net Change in Plan Fiduciary Net Position 467,412 369,617 (855,638) 1,109,174 837,140 (540,609) 57,810
Plan Fiduciary Net Position-Beginning of year 8,146,961 7,777,344 8,632,982 7,523,808 6,686,668 7,227,277 7,169,467
Plan Fiduciary Net Position-End of year $ 8,614,373 $ 8,146,961 $ 7,777,344 $ 8,632,982 $ 7,523,808 $ 6,686,668 $ 7,227,277
Commission's Net Pension Liability-Ending $ 1,2859458 $ 1,3159734 $ 194389679 $ 4559678 $ 1,3639053 $ 295029108 $ 195019184
Plan Fiduciary Net Position as a Percentage
of Total Pension Liability 87.02 % 86.10 % 84.39 % 94.99 % 84.66 % 72.77 % 82.80 %
Covered Payroll $ 1,280,845 $ 1,104,246 $ 1,072,020 $ 1,304,971 $ 1,333,333 $ 1,235,367 $ 1,164,556
Commission's Net Pension Liability as a
Percentage of Covered Payroll 100.36 % 119.15 % 134.20 % 34.92 % 102.23 % 202.54 % 128.91 %
See notes to required supplemental information. 42
Lansing Housing Commission
Required Supplemental Information
Schedule of Pension Contributions
Last Six Fiscal Years
Years Ended June 30
2021 2020 2019 2018 2017 2016
Actuarially determined contribution $ 222,240 $ 80,707 $ 97,665 $ 133,299 $ 122,057 $ 103,079
Contributions in relation to the actuarially
determined contribution 1,357,471 80,707 145,613 685,378 693,689 158,735
Contribution Excess $ 1,135,231 $ - $ 47,948 $ 552,079 $ 571,632 $ 55,656
Covered Payroll $ 1,280,845 $ 1,104,246 $ 1,072,020 $ 1,304,971 $ 1,333,333 $ 1,235,367
Contributions as a Percentage of Covered
Employee Payroll 105.98 % 7.31 % 13.58 % 52.52 % 52.03 % 12.85 %
See notes to required supplemental information. 43
Lansing Housing Commission
Required Supplemental Information
Schedule of Changes in the Commission's Net OPEB Liability and Related Ratios
Last Five Fiscal Years
2020 2019 2018 2017 2016
Total OPEB Liability
Service cost $ 8,907 $ 9,427 $ 11,298 $ 53,470 $ 50,924
Interest 28,075 23,121 49,023 59,951 58,429
Changes in benefit terms - - (882,057) - -
Differences between expected and actual experience - (157,076) 141,256 - -
Changes in assumptions 8,667 (124,117) (118,162) - -
Benefit payments, including refunds (82,435) (80,400) (201,577) (65,682) (64,552)
Net Change in Total OPEB Liability (36,786) (329,045) (1,000,219) 47,739 44,801
Total OPEB Liability-Beginning of year 542,214 871,259 1,871,478 1,823,739 1,778,938
Total OPEB Liability- End of year $ 505,428 $ 542,214 $ 871,259 $ 1,871,478 $ 1,823,739
Plan Fiduciary Net Position
Contributions-Employer $ 82,435 $ 470,742 $ - $ - $ -
Net investment income 63,752 1,238 - - -
Benefit payments, including refunds (82,435) (80,400) - - -
Net Change in Plan Fiduciary Net Position 63,752 391,580 - - -
Plan Fiduciary Net Position -Beginning of year 391,580 - - - -
Plan Fiduciary Net Position - End of year $ 455,332 $ 391,580 $ - $ - $ -
Net OPEB Liability- Ending $ 50,096 $ 150,634 $ 871,259 $ 1,871,478 $ 1,823,739
Plan Fiduciary Net Position as a Percentage of Total OPEB
Liability 90.09 % 72.22 % - % - % - %
Covered Payroll $ 918,208 $ 891,464 $ 2,452,554 $ 2,381,121 $ 2,311,768
Net OPEB Liability as a Percentage of Covered Payroll 5.46 % 16.90 % 35.52 % 78.60 % 78.89 %
See notes to required supplemental information. 44
Lansing Housing Commission
Required Supplemental Information
Schedule of OPEB Contributions
Last Five Fiscal Years
Years Ended June 30
2020 2019 2018 2017 2016
Actuarially determined contribution $ 11,151 $ 19,251 $ 53,173 $ 148,959 $ 143,977
Contributions in relation to the actuarially determined
contribution 82,435 470,742 201,577 65,682 64,552
Contribution (Excess) Deficiency $ (71,284) $ (451,491) $ (148,404) $ 83,277 $ (79,425)
Covered Payroll $ 918,208 $ 891,464 $ 2,452,554 $ 2,381,121 $ 2,311,768
Contributions as a Percentage of Covered Payroll 8.98 % 52.81 % 8.22 % 2.76 % 2.79 %
Notes to Schedule of Contributions
Actuarial valuation information relative to the determination of contributions:
Valuation date July 1, 2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method Individual entry age normal cost method
Asset valuation method Market value of assets as of the measurement date
Inflation 2.50 percent per annum
Cost of living adjustment 3.50 percent per annum
Salary increase 3.00 percent per annum
Investment rate of return 5.19 percent- Net of OPEB plan investment expense, including inflation
Retirement age 60
Mortality General: RP-2014 Mortality Table for Blue Collar Healthy Annuitants projected generationally with scale
MP-2016 for males and females, set forward one year for females (post-retirement mortality)/set
forward one year for both males and females (disabled mortality)
Other information None
See notes to required supplemental information. 45
Lansing Housing Commission
Required Supplemental Information
Schedule of OPEB Investment Returns
Last Two Fiscal Year
Years Ended June 30
2021 2020
Annual money-weighted rate of return - Net of investment expense 5.19 % 3.40 %
The annual money-weighted rate of return, net of investment expense is not applicable to years prior to 2020.
See notes to required supplemental information. 46
Lansing Housing Commission
Notes to Required Supplemental Information
June 30, 2021
Pension Information
Actuarial valuation information relative to the determination of contributions:
Valuation date Actuarially determined contribution rates are calculated as of June 30, two
years prior to the end of the fiscal year in which the contributions are
reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal cost method
Amortization method Level percentage of payroll, open
Remaining amortization period 20 years
Asset valuation method 5-year smoothed
Inflation 2.5 percent
Salary increase 3.75 percent plus merit and longevity
Investment rate of return 7.75 percent- Net of pension plan investment expenses, including inflation
Retirement age 60
Mortality 50 percent male to 50 percent female blend of the RP-2014 mortality tables
Other information None
Benefit Changes
There were no changes of benefit terms in 2020.
Changes in Assumptions
A 5-year experience study analyzing historical experience from 2013 through 2018 was completed in February
2020. The experience study resulted in updated demographic assumptions, including adjustments to the actuarial
assumptions of mortality, retirement, disability, and termination rates that were first used in the December 31,
2020 actuarial valuation.
Effective in the 2019 valuation, the MERS retirement board adopted a reduction in the investment rate of return
assumption from 7.75 percent to 7.35 percent and a reduction in the rate of wage inflation from 3.75 percent to
3.00 percent. Changes to these assumptions are effective for contributions beginning in 2021 and may be phased
in.
Changes in Size or Composition of the Covered Population
There were no significant changes in size or composition of the covered population.
OPEB Information
Benefit Changes
There were no changes of benefit terms in 2021.
Changes in Assumptions
The single change in assumptions from June 30, 2020 to June 30, 2021 was a change in the discount rate from
5.50 percent to 5.25 percent.
The changes in assumptions from June 30, 2019 to June 30, 2020 include a change in the discount rate from 2.75
percent to 5.50 percent, the inflation adjustment being updated to 2.5 percent, and the mortality tables used being
updated from the RP-2000 Employees Mortality Table projected generationally with scale BB and base year 2009
to the RP-2014 Mortality Table projected generationally with scale MP-2016 for males and females.
47
Other Supplemental Information
48
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2021
14.PHC Public 14.896 PIH 14.CCC 6.1 Component 14.871 14.EHV
Central Office 14.HCC HCV
Housing 1 Business Family Self- Unit- Housing Emergency
Project Total CARES Act Activities 2 State/Local Sufficiency Cost Center Discretely CARES Act Choice Housing 5 Fiduciary COCC Subtotal ELIM Total
Funding Program CARES Act presented Funding Vouchers Voucher
Funding
111 Cash-Unrestricted 1,738,662 666,787 164,556 126,450 1,126,824 68,800 1,699,926 5,592,005 5,592.005
112 Cash-Restricted-Modemization and Development
113 Cash-Other Restricted 2,304,225 1,869,873 411,661 4,5859759 4,585.759
114 Cash-Tenant Securit Deposits 88,773 5,14E 93,921 93,921
115 Cash-Restricted for Pa ment of Current Liabilities
100 Total Cash 1,827,435 2,971,012 164,556 2,001,471 1,538,485 68,800 1,699,926 10,271,685 10,271,685
121 Accounts Receivable-PHA Projects
122 Accounts Receivable-HUD Other Projects 3,500 3,500 39500
124 Accounts Receivable-Other Government 12,252 12,252 12,252
125 Accounts Receivable-Miscellaneous 295,738 61906 389,542 692,186 692,186
126 Accounts Receivable-Tenants 87,551 7,008 94,559 94,559
126A Allowance for Doubtful Accounts-Tenants (5,445) 5,445 5,445
126.2 Allowance for Doubtful Accounts-Other
127 Notes,Loans,&Mortgages Receivable-Current 786 786 786
128 Freud Recove
128.1 Allowance for Doubtful Accounts-Freud
129 Accrued Interest Receivable 220 359,617 359,837 359,837
120 Total Receivables,Net of Allowances for Doubtful Accounts 98,864 359,617 295,738 13,914 389,542 1,157,675 1,157,675
131 Investments-Unrestricted 541,604 541,604 541,604
132 Investments-Restricted 455,332 455,332 455,332
135 Investments-Restricted for Payment of Current Liability
142 Prepaid Expenses and Other Assets 38,016 3,626 2,964 3,957 48,563 48,563
143 Inventories
143.1 Allowance for Obsolete Inventories
144 Inter Program Due From 879,695 879,699 (879,695)
145 Assets Held for Sale
150 Total Current Assets 2.505,919 3,330,629 460,294 2,019,011 1,541,449 68,800 455,332 2,973,120 13,354,554 (879,695) 12,474,859
161 Land 1,089,900 1,205,162 190,000 214857062 2,485,062
162 Buildings 31,618,638 11,348,485 775,621 43,742,744 43,7427744
163 Furniture,Equipment&Machinery-Dwellings 405,068 4057068 405,068
164 Furniture,Equipment&Machinery-Administration 1757949 48,177 335,281 5597407 559,407
165 Leasehold Improvements
166 Accumulated Depreciation (25,902,843) (2,0967249) (28,063) (1,055,857) (29,083,012) (29,0837012)
167 Construction in Progress 778,041 17749,377 41,739 2,5697157 2,569,157
168 Infmstmcture
160 Total Capital Assets,Net of Accumulated Depreciation 7,988,804 12,382,724 207114 286,784 20,678,42E 20,6787426
171 Notes,Loans and Mortgages Receivable-Non-Current 12,545,908 460,855 13,006,763 13,0067763
172 Notes,Loans,&Mortgages Receivable-Non Current-Past Due
173 Grants Receivable-Non Current
174 Other Assets 130,000 32,291 162,291 162,291
176 Investments in Joint Ventures
180 Total Non-Current Assets 7,988,804 12,675,908 12,415,015 20,114 747,639 33,847,480 33,847,480
200 Deferred Outflow of Resources 1,454,099 126,859 79,851 100,809 1,660,809
290 Total Assets and Deferred Outflow of Resources 11,948,822 16,006,537 .0,2. 14,434,026 1,688,422 68,800 455,332 3,800,610 48,862,843 (879,695) 47,983,148
49
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2021
14.PHC Public 14.896 PH 14.CCC Central Office 14.HCC HCV 6.1 Component 14.871 14.EHV
Housing 1Business Family Self- Unit- Housing Emergency
Project Total CARES Act AcliNlies 2 State/Local Sufficiency Cost Center Discretely CARES Acl
Funding Program CARES Choice Housing
Funding 5 Fiduciary COCC Subtotal ELIM Total
Act pre Funding sented Vouchers Voucher
311 Bank Overdraft
312 Accounts Payable<=90 Das 8,135 2 8,137 8,137
313 Accounts Pa able>90 Days Past Due
321 Accrued Wa a/Pa roll Taxes Payable 33,440 21,078 8,104 62,622 62,622
322 Accrued Compensated Absences-Current Portion 7,756 6,904 19800 16,460 16,460
324 Accrued Contin enc Liability
325 Accrued Interest Pa able 196,036 196,036 196,036
331 Accounts Pa able-HUD PHA Programs
332 Account Payable-PHA Pro'ecls
333 Accounts Payable-Other Govemmenl 66,444 19,389 85,833 85,833
341 Tenant Security De osits 881773 5,148 93,921 93,921
342 Uneamed Revenue 33,476 388 56,000 2,655 92,519 92,519
343 Current Portion of Lon-tens Debt-Ca ilal Pro'"b"Mort a Revenue
344 Current Portion of Long-term Debt-O eratin Bonowin s
345 Other Current Liabilities 273,178 273,178 273,178
346 Accrued Liabilities-Other 133,310 215,884 8,678 42,400 400,272 400,272
347 Inter P rem-Due To 879,695 879,695 879,695)
.8 Loan Liabilit -Cunenl 7,145,775 7,145,775 7,1451775
310 Total Current Liabilities 363,199 1,152,873 7,590,755 36,660 56,000 54,961 9,254,448 879,695) 8,374.753
351 Long-tenn Debt,Net of Current-Capital Projects/Mortgage Revenue 6,394,973 6,394,973 6,394,973
352 Long-tenn Debt,Net of Current-Operating Borrowings
353 Noncurrent Liabilities-Other 423,869 84,515 508,384 508,384
354 Accrued Compensated Absences-Non Current 43,947 39p1201 10,201 93,268 1 93,268
355 Loan Liability-Non Current
356 FASB 5 Liabilities
357 Accrued Pension and OPEB Liabilities 921,633 249,468 164,453 1,335,554 1,335,554
350 Total Non-Current Liabilities 965,580 6,818,842 373,103 174,654 8,332,179 8,332,179
300 Total Liabilities 1,328,779 1,152,873 14,409,597 409,763 56,000 229,615 17,586,627 (879,695) 16,706,932
400 Deferred Inflow of Resources 365,027 163,078 68,729 596,834 596,834
508.4 Net Investment in Capital Assets 7,988,804 (1,158,023) 20,114 286,784 7,137,679 7,137,679
511.4 Restricted Net Position 2,304,225 327,146 455,332 3,086,703 3,086,703
512.4 Unrestricted Net Position 2,266,212 12,549,439 460,294 1,182,452 768,321 12,800 3,215,482 20,455,000 20,455,000
513 Total Equity-Net Assets/Position 10,2557016 14,853,664 460,294 24,429 1,115,581 12,800 4 55,332 3,502,266 30,679,382 30,679,382
600 Total Liabilities,Deferred Inflows of Resources and Equity-Net 11,948,822 16,006,537 460,294 14,434,026 1,688,422 68,800 455,332 3,800,610 48,862,843 (879,695) 47,983,148
50
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2021
14.PHC Public 14.896 PH 14.CCC 6.1 Component 14.671 14.EHV
Central Office 14.HCC HCV
Housing 1 Business Family Self- Unit- Housing Emergency
Project Total CARES Act Activities Sufficiency State/Local Sufficiency Cost Center Discretely CARES Act Choice Housing 5 Fiduciary COCC Subtotal ELIM Total
Funding Program CARES Act Presented Funding
Funding Vouchers Voucher
70300 Net Tenant Rental Revenue 945,732 - - - - - 110,543 - - - 1,056,275 1,056,275
70400 Tenant Revenue-Other 61,439 6,673 68,112 68,112
70500 Total Tenant Revenue 1,007,171 117,216 - 1,124,387 1,124,387
70600 HUD PHA Operating Grants 5,697,940 308,152 7 45,435 7 183,303 391,337 12,315,422 12,800 18,954,389 18,954,389
70610 Capital Grants 2,196,265 2,196,265 2,196,265
70710 Management Fee 1,078,666 1,078.666 (1,078,666) -
70720 Asset Management Fee 85,950 85,950 (85,950) -
70730 Book Keeping Fee 72,335 72,335 (72,335)
70740 Front Line Service Fee - - -
70750 Other Fees 423,873 - 423,873 423,873
70700 Total Fee Revenue 1,236.951 1,236,951 (1,236,951)
70800 Other Government Grants - - - 961,648 - - - - - - 961,648 961,648
71100 Investment Income-Unrestricted 9,493 315,074 - 8,901 - 1,553 - 335,021 335,021
71200 Mortgage Interest Income - - - - -
71300 Proceeds from Disposition of Assets Held for Sale - - - - - - - - - - - -
71310 Cost of Sale of Assets - - -
71400 Fraud Recovery - - - - 32,068 - 32,068 32,068
71500 Other Revenue 63,314 - 10,000 - - - - - 5,288 82,435 186,057 347,094 347,094
71600 Gain or Loss on Sale of Capital Assets 7,605,477 - - - - - - -I I - 7,605,477 7,605,477
72000 Investment Income-Restricted - - - - - - - - - 63,752 - 63,752 63,752
70000 Total Revenue 16,579,660 308,152 748,947 961,648 45,435 - 309,420 391,337 12,354,331 12,800 146,187 1,423,008 33,280,925 (1,236,951) 32,043,974
91100 Administrative Salaries 228,894 94,158 - 37,558 33,849 - 8,638 284,257 61,695 208,940 957,989 957,989
91200 Auditing Fees 21,000 - - - - - 10,025 - 26,250 5,250 62,525 62,525
91300 Management Fee 790,268 80,361 - - - 31,473 - 208,037 1,110,139 (1,078,666) 31,473
91310 Book-keeping Fee 60,957 11,378 - - - 72,335 (72,335)
91400 Advertising and Marketing - - - - - - - - - - - -
91500 Employee Benefit contributions-Administrative 232,123 19,515 - 16,096 11,586 - 3,1451 70,571 16,1671 1 50,990 420,193 420,193
91600 Office Expenses 356,264 5,954 30,468 113,629 - 16,2041 23,595 207,6161 159,864 913,594 913,594
91700 Legal Expense 45,628 - - - - - - - - 5,689 51,317 51,317
91800 Travel - - - - - - - - - 99 99 99
91810 Allocated Overhead - - - - -
91900 Other - - - - - - - - - - - -
91000 Total Operating-Administrative 1,735,134 211,366 30,468 167,283 45,435 - 69,485 378,423 519,765 - - 430,832 3,588,191 (1,151,001) 2,437,190
92000 Asset Management Fee 85,950 - - - - 85,950 (85,950)
92100 Tenant Services-Salaries - - - - - - - - - - - -
92200 Relocation Costs - - - - - - - -
92300 Employee Benefit Contributions-Tenant SeMces - - - - - - - - -
92400 Tenant Services-Other 22,568 - - - - - - - - - 22,568 22,568
92500 Total Tenant Services 22,568 - - - - - - - - - - - 22,568 - 22,568
51
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2021
14.PHC Public 14.896 PIH 14.CCC 6.1 Comp
onent 14.871 14.EHV
Central Office 14.HCC HCV
Housing 1 Business Family Self- Unit- Housing Emergency
Project Total CARES Act Activities 2 State/Local Sufficiency Coat Center Discretely CARES Act Choice Housing 5 Fiduciary COCC Subtotal ELIM Total
Funding Program CARES Act Funding Presented Funding Vouchers Voucher
93100 Water 167,166 - - - 32,229 - 836 200,231 200,231
93200 Electricity 178,245 - - - - - 39,056 - - 14,016 231,317 231,317
93300 Gas 149,130 - - - - - 20,374 - - 2,649 172,153 172,153
93400 Fuel - - - - - - -
93500 Labor - - - - - - - - - - - -
93600 Sewer 227,611 - - - - - - - 658 228,269 228,269
93700 Employee Benefit Contributions-Utilities - -
93800 Other Utilities Expense - - -
93000 Total Utilities 722,152 - - - - 91,659 - - - - 18,159 831,970 - 831,970
94100 Ordinary Maintenance and Operations-Labor 225,943 63,221 - - 7,156 26,233 322,553 322,553
94200 Ordinary Maintenance and Operations-Materials and Other 162,586 - - - - - 6,829 - - 111 169,526 169,526
94300 Ordinary Maintenance and Operations Contracts 756,207 - - - -94 21,003 16,668 31,582 395,974 1,221,434 1,221,434
500 Employee Benefit Contributions-Ordinary Maintenance 221,203 33,565 - - - 10,358 265,126 265,126
94000 Total Maintenance 1,365,939 96,786 - - - - 34,988 16,668 31,582 - - 432,676 1,978,639 - 1,978,639
95100 Protective SeMces-Labor - - - - 662 - - 662 662
95200 Protective Services-Other Contract Costs 11,180 - - - - - - - 269 878 12,327 12,327
95300 Protective SerNces-Other - - - - - - - - - - -
95500 Employee Benefit Contributions-Protective Services - - - -
95000 Total Protective Sarmces 11,180 - - 6621 26911 878 12,9891 12,989
96110 Property Insurance 189,966 - 13,287 1,480 2,947 207,680 207,680
96120 Liability Insurance 78,591 - - - - - - - 16,653 113 95,357 95,357
96130 Workmen's Compensation - - - - - - 62 - - - 62 62
96140 All Other Insurance 28,353 - - - - 652 - - 4,400 33,405 33,405
96100 Total insurance Premiums 296,910 - - - - - 14,001 - 18,133 - - 7,460 336,504 - 336,504
96200 Other General Expenses - 405,767 - - - - - - 82,435 - 488,202 488,202
96210 Compensated Absences 26,933 - - - 25,951 4,793 57,677 57,677
96300 Payments in Lieu of Taxes 18,722 - - - -1 20,8161 - - 39,538 39,538
96400 Bad debt-Tenant Rents 29,082 - 2,739 31,821 31,821
96500 Bad debt-Mortgages - - -
96600 Bad debt-Other - - - - - - - - - - - -
96800 Severance Expense
96000 Total Other General Expenses 74,737 405,767 - 23,555 25,951 - 82,435 4,793 617,238 - 617,238
96710 Interest of Mortgage(or Bonds)Payable - - - - - - 91,319 - - - 91,319 91,319
96720 Interest on Notes Payable(Short and Long Tenn) 65,042 - - - 860 65,9021 65,902
96730 Amortization of Bond Issue Costs - - - - -1 2,9991 1 - 2,999 2,999
96700 Total Interest Expense and Amortization Cost 65,042 - - - - 94,318 - - - - 860 160,220 - 160,220
96900 Total Operating Expenses 4,379,612 308,152 436,235 167,283 45,435 328,668 395,091 595,700 - 82,435 895,658 7,634,269 (1,236,951) 6,397,318
97000 Excess of Operating Revenue over Operating Expenses 12,200,048 - 312,712 794,365 - (19,248) (3,754) 11,758,631 12,800 63,752 527,350 25,646,656 - 25,646,656
97100 Extraordinary Maintenance - - -I - - - - - - - - -
97200 Casualty Losses-Non-capitalized - - - - - - - - -
97300 Housing Assistance Payments 492,033 - - 730,838 - 11,310,531 - 12,533,402 12,533,402
97350 HAP Portability-In - - - - - - - - - - - -
97400 Depreciation Expense 863,188 - - - - - 102,420 - 467 5,735 971,810 971,810
97500 Freud Losses - - - - - - - - -
97600 Capital Outlays-Governmental Funds
97700 Debt Principal Payment-Governmental Funds
97800 Dwelling Units Rent Expense - - - - - - - - -
.000 Total Expenses 5,734,8331 308,1521 436,2391 898,121 45,4351 1 431,0881 395,091 11,906,698 - 82,435 901,393 21,139,481 (1,236,951)1 19,902,530
52
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2021
14.PHC Public 14,896 PIH 14.CCC 6A Component 14.871 14.EHV
Central Office 14.HCC HCV
Housing 1 Business Family Sell- Unit- Housing Emergency
Project Total CARES Acl Activities 2 State/Local Sufficiency Cost Center Discretely CARES Act Choice Housing 5 Fiduciary COCC Subtotal ELIM Total
Funding Progmm CARES Act presented Funding Vouchers Voucher
Funding
10010 Operating Transfer In 607,238 - - - 607,238 (607,238) -
10020 Operating transfer Out (607,238) - - - - (607,238) 607,238 -
10030 Operating Transfers from/to Primary Govemment - - - - - - - - - - - -
10040 Operating Transfers from/to Component Unit - - - - - - - - - - -
10050 Proceeds from Notes,Loans and Bonds
10060 Proceeds from Property Sales
10070 Extraordinary Items,Net Gain/Loss - - - - - - - - - - - -
10080 Special Items(Net Gain/Loss) - - - - - - - - - -
10091 Inter Project Excess Cash Transfer In - - -
10092 Inter Project Excess Cash Transfer Out - - -
10093 Transfers between Program and Project-In - - - - -
10094 Transfers between Project and Program-Out - - - - - -
10100 Total Other financing Sources(Uses) - - - - - - - - - - - - -
10000 Excess(Deficiency)of Total Revenue Over(Under)Total Expenses 10,844,827 312,712 63,527 (121,668) (3,754) 447,633 12,800 63,752 521,615 12,141,444 12,141,444
11020 Required Annual Debt Principal Payments 1,409,195 - - - - - 28,367 - - - - 47,976 1,485,538 1,485,538
11030 Beginning Equity 13,960,189 - (9,048) 396,767 - (1,080,551) - 671,702 - 391,580 2,980,651 17,311,290 17,311,290
040 Prior Period Adjustments,Equity Transfers and Correction of Errors (14,550,000) 14,550,000 1,226,648 3,754 (3,754) - 1,226,648 1,226,648
11050 Changes in Compensated Absence Balance
11060 Changes in Contingent Liability Balance
11070 Changes in Unrecognized Pension Transition Liability
11080 Changes in Special Tenn/Severance Benefits Liability
11090 Changes in Allowance for Doubtful Accounts-Dwelling Rents
11100 Changes in Allowance for Doubtful Accounts-Other
170 Administrative Fee Equity 788,435 788,435 788,435
11180 Housing Assistance Payments Equity 327,146 327,146 327,146
11190 Unit Months Available 8,595 - - - - - 360 - 21,936 - - 30,891 30,891
11210 Number of Unit Months Leased 8,128 - - - - 360 - 19,594 - - 28,082 28,082
11270 Excess Cash 1,717,591 1,717,591 1,717,591
11610 Land Purchases -
11620 Building Purchases 2,196,265 - 2,196,265 2,196,265
11630 Furniture&Equipment-Dwelling Purchases - - -
11640 Furniture&Equipment-Administrative Purchases -
11650 Leasehold Improvements Purchases - - -
11660 Infrastructure Purchases - - - -
13510 CFFP Debt S-1ce Payments -
13901 Replacement Housing Factor Funds - - -
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