Loading...
HomeMy WebLinkAbout2020 - 67891 LHC Lansing Housing Commission - Financial Report with supplemental Information June 30, 2020 Lansing Housing Commission Financial Report with Supplemental Information June 30, 2020 Lansing Housing Commission Contents Independent Auditor's Report 1-2 Management's Discussion and Analysis 3-8 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position 9-10 Statement of Activities 11 Statement of Cash Flows 12 Fiduciary Funds: Statement of Fiduciary Net Position - Other Postemployment Benefits Trust 13 Statement of Changes in Fiduciary Net Position -Other Postemployment Benefits Trust 14 Notes to Financial Statements 15-36 Required Supplemental Information 37 Schedule of Changes in the Commission's Net Pension Liability and Related Ratios 38 Schedule of Commission Contributions 39 Schedule of Changes in the Commission's Net OPEB Liability and Related Ratios 40 Schedule of OPEB Contributions 41 Schedule of OPEB Investment Returns 42 Notes to Schedule of Commission Contributions 43 Other Supplemental Information 44 Financial Data Schedules 45-49 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 unit, and the aggregate remaining fund information of Lansing Housing Commission (the "Commission") as of and for the year ended June 30, 2020 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 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 unit, and the aggregate remaining fund information of Lansing Housing Commission as of June 30, 2020 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 November 18, 2020 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. Avct 121�4t xi, P L L C November 18, 2020 2 Lansing Housing Commission Lansing, Michigan Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2020 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, 2020. The operations of the Lansing Housing 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 do not analyze the financial position or current year activity of the discretely presented component unit - Oliver Gardens Limited Dividend Housing Association Limited Partnership (Oliver Gardens). Please read this summary along with the accompanying audited financial statements of the Commission for the fiscal year ended June 30, 2020. The audited financial statements of Oliver Gardens have been presented in the financial statements of the Commission. Financial Highlights 1. Total assets and deferred outflows of resources exceed total liabilities and deferred inflows of resources by $ 17,999,997 2. Unrestricted net position equals 5,370,902 3. Total net position increased by 1,957,603 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 2019 2020 Change Change Assets Current and restricted assets $ 5,222,385 $ 6,272,329 $ 1,049,944 20% Capital assets 13,546,781 13,778,940 232,159 2% Noncurrent assets 1,127,886 1,756,969 629,083 56% Total assets 19,897,052 21,808,238 1,911,186 10% Deferred Outflows of Resources 809,448 407,663 (401,785) -50% Total assets and deferred outflows of resources 20,706,500 22,215,901 1,509,401 7% Liabilities Current liabilities 742,502 970,472 227,970 31% Long-term liabilities 3,921,604 2,904,506 (1,017,098) -26% Total liabilities 4,664,106 3,874,978 (789,128) -17% Deferred Inflows of Resources - 340,926 340,926 n/a Net Position Net investment in capital assets 11,855,031 12,282,689 427,658 4% Restricted 47,564 346,406 298,842 628% Unrestricted 4,139,799 5,370,902 1,231,103 30% Total net position $ 16,042,394 $ 17,999,997 $ 1,957,603 12% As illustrated in the statement of net position, the overall net position of the Commission increased by $1,957,603. There were capital asset projects ongoing during the current year related to the normal maintenance and repairs which led to an overall increase in net capital assets. Noncurrent assets increased primarily due to an increase in other assets relating to Rental Assistance Development (RAD) program costs incurred which will be reimbursed upon final closing of the RAD deals. The decrease in net pension and net OPEB liabilities of approximately $844,000 led to an overall decrease in liabilities. 4 Financial Analysis (Continued) Statement of Activities Percent 2019 2020 Change Change Revenue Tenant rental revenue $ 1,714,401 $ 1,486,057 $ (228,344) -13% Federal grants 16,462,935 18,973,768 2,510,833 15% Other revenue 1,408,403 1,419,023 10,620 1% Total revenue 19,585,739 21,878,848 2,293,109 12% Expenses Administratiie expenses 1,553,050 2,818,997 1,265,947 82% Tenant services 83,838 29,645 (54,193) -65% Utilities 964,198 967,501 3,303 0% Maintenance and operations 3,213,723 2,382,592 (831,131) -26% Insurance and general expenses 458,011 425,542 (32,469) -7% Housing assistance payments 11,695,726 12,130,939 435,213 4% Depreciation and amortization 1,232,698 1,102,145 (130,553) -11% Interest expense 71,249 63,884 (7,365) -10% Loss on sale of assets 966 - (966) -100% Total expenses 19,273,459 19,921,245 647,786 3% Change in Net Position $ 312,280 $ 1,957,603 $ 1,645,323 527% Revenue In reviewing the statement of activities, you will find that 87 percent of the Commission's revenue is derived from grants from the Department of Housing and Urban Development, 7 percent of the Commission's revenue is from dwelling rent, and 6 percent is from investment income and other income. Expenses In reviewing the statement of activities, you will find that 61 percent of the Commission's expenses are for housing assistance payments, 14 percent for administrative, 5 percent are for utilities, 12 percent are for maintenance, 6 percent are for depreciation and amortization, and 2 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 2020 driven primarily by an increase in federal grants revenue. The Federal Grants increase was due to an increase in the funding for the Public Housing Capital Fund program of approximately $910,000, the Housing Choice Voucher program of approximately $1,000,000, and Low Income Public Housing program of approximately $450,000. 5 Financial Analysis (Continued) Capital Assets As of year end, the Commission had $13,778,940 invested in a variety of capital assets as reflected in the following schedule, which represents a net increase (additions, deductions, and depreciation) of 2 percent from the end of last year. Percent 2019 2020 Change Change Land $ 1,554,771 $ 1,554,771 $ - 0% Buildings 51,933,079 52,626,312 693,233 1% Furniture and equipment 1,304,132 1,323,281 19,149 1% Construction in progress 397,756 957,455 559,699 141% Accumulated depreciation (41,642,957) (42,682,879) (1,039,922) 2% Net capital assets $ 13,546,781 $ 13,778,940 $ 232,159 2% The following reconciliation summarizes the change in capital assets: Beginning balance- July 1, 2019 $ 13,546,781 Additions: Construction in progress 1,334,304 Disposals net of depreciation - Depreciation expense (1,102,145) Ending balance-June 30, 2020 $ 13,778,940 Debt Outstanding As of the end of the fiscal year, the Commission had $1,496,251 in debt outstanding compared to $1,691,750 in the previous year. The net change in debt for the year was a decrease of $195,499 of principal payments. Long-term Debt 2019 2020 Note payable - Davenport $ 124,986 $ 67,354 Note payable - PNC 1,566,764 1,428,897 Total long-term debt $ 1,691,750 $ 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 • On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. Changes to the operating environment may increase operating costs. HUD was allocated additional funding through the CARES Act to help combat the anticipated impact to public housing. Additional impacts may include the ability of tenants to continue making rental payments as a result of job loss or other pandemic related issues. The future effects of these issues are unknown. In the current year and for future years, the financial position of the Commission is also impacted by the Commission's adoption of Governmental Accounting Standards Board (GASB) Statement No. 68 as of July 1, 2014, the objective of which is to improve accounting and financial reporting by state and local employers about financial support for pensions that is provided by other entities. The Commission participates in an agent multiple-employer defined benefit pension plan administered by the Municipal Employees' Retirement System of Michigan (MERS) that covers substantially all employees of the Commission. The Commission's net pension liability for this plan is determined annually using a measure of the total pension liability and the pension net position at the end of each calendar year. 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. 7 Financial Analysis (Continued) 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. 8 Lansing Housing Commission Statement of Net Position June 30, 2020 Discrete Component Unit Primary - Oliver Gardens Government December 31, (LHC) 2019 Assets Current assets: Cash and cash equivalents (Note 3) $ 4,495,504 $ 27,933 Cash and cash equivalents- Restricted (Note 3) 415,225 365,792 Receivables: Tenant receivables 102,452 - Other receivables 126,634 4,141 Due from other governmental units- HUD 86,444 - Allowance for doubtful accounts (10,245) - Due from other governmental units- State and local 315,664 - Prepaid expenses and other assets 71,469 3,431 Tenant security deposits- Restricted (Note 3) 134,910 5,071 Investments (Note 3) 534,272 - Total current assets 6,272,329 406,368 Noncurrent assets: Investment in partnership 1,162,061 - Capital assets: Assets not subject to depreciation (Note 4) 2,512,226 685,162 Assets subject to depreciation - Net (Note 4) 11,266,714 1,513,115 Other receivables 120,000 - Other assets 474,908 3,055 Total noncurrent assets 15,535,909 2,201,332 Total assets 21,808,238 2,607,700 Deferred Outflows of Resources Pension (Note 6) 315,503 - OPEB (Note 7) 92,160 - Total deferred outflows of resources 407,663 - See notes to financial statements. 9 Lansing Housing Commission Statement of Net Position (Continued) June 30, 2020 Discrete Component Unit Primary - Oliver Gardens Government December 31, (LHC) 2019 Liabilities Current liabilities: Accounts payable - Operating $ 325,973 $ 11,624 Security deposits liability 173,811 5,100 Accrued liabilities and other: Accrued salaries and wages 60,311 - Accrued interest payable - 177,611 Accrued PILOT 43,059 18,450 Compensated absences < one year 13,361 - Unearned revenue 151,314 - Other current liabilities - 485,130 Current portion of long-term debt(Note 5) 202,643 34,633 Total current liabilities 970,472 732,548 Noncurrent liabilities: Compensated absences 75,711 - Accrued partnership management fees - 120,000 Net pension liability (Note 6) 1,315,734 - Net OPEB liability(Note 7) 150,634 - Notes payable- Net of current portion (Note 5) 1,293,608 2,429,935 Other noncurrent liabilities 68,819 405,767 Total noncurrent liabilities 2,904,506 2,955,702 Deferred Inflows of Resources Pension (Note 6) 45,073 - OPEB (Note 7) 295,853 - Total deferred inflows of resources 340,926 Net Position (Deficit) Net investment in capital assets 12,282,689 (266,291) Restricted 346,406 - Unrestricted 5,370,902 (814,259) Total net position (deficit) $ 17,999,997 $ (1,080,550) See notes to financial statements. 10 Lansing Housing Commission Statement of Activities Year Ended June 30, 2020 Discrete Component Unit - Oliver Gardens Primary Year Ended Government December 31, (LHC) 2019 Operating Revenue Tenant revenue - Net $ 1,486,057 $ 285,383 HUD operating revenue 17,799,193 - Other grant revenue 983,888 - Other operating revenue 422,952 - Total operating revenue 20,692,090 285,383 Operating Expenses Administrative 2,818,997 24,371 Tenant services 29,645 - Utilities 967,501 86,615 Maintenance 2,382,592 45,996 Insurance 319,308 12,929 Other general expenses 106,234 45,695 Housing assistance payments 12,130,939 - Depreciation and amortization 1,102,145 141,788 Total operating expenses 19,857,361 357,394 Operating Income (Loss) 834,729 (72,011) Nonoperating Revenue (Expense) Investment income 12,183 10,668 Interest expense (Note 5) (63,884) (88,434) Total nonoperating expense (51,701) (77,766) Income (Loss) - Before capital contributions 783,028 (149,777) Capital Contributions - Capital grants - HUD 1,174,575 - Change in Net Position 1,957,603 (149,777) Net Position (Deficit) - Beginning of year 16,042,394 (930,773) $ Net Position (Deficit) - End of year 17,999,997 $ (1,080,550) See notes to financial statements. 11 Lansing Housing Commission Statement of Cash Flows Year Ended June 30, 2020 Primary Government (LHC) Cash Flows from Operating Activities Cash received from HUD operating subsidies and grants $ 17,743,674 Cash received from tenants 1,436,383 Other receipts 1,313,964 Cash payments for housing assistance (12,130,939) Cash payments for administrative expenses (2,818,997) Cash payments for other operating expenses (4,357,648) Net cash and cash equivalents provided by operating activities 1,186,437 Cash Flows from Capital and Related Financing Activities Receipt of capital grants 1,174,575 Purchase of capital assets (1,334,303) Principal and interest paid on capital debt (259,383) Net cash and cash equivalents used in capital and related financing activities (419,111) Cash Flows from Investing Activities Interest received on investments 12,183 Purchases of investment securities (11,268) Net cash and cash equivalents provided by investing activities 915 Net Increase in Cash and Cash Equivalents 768,241 Cash and Cash Equivalents - Beginning of year 4,277,398 Cash and Cash Equivalents - End of year $ 5,045,639 Classification of Cash and Cash Equivalents Cash and cash equivalents $ 4,495,504 Restricted cash and cash equivalents 415,225 Tenant security deposits 134,910 Total cash and cash equivalents $ 5,045,639 Reconciliation of Operating Income to Net Cash from Operating Activities Operating income $ 834,729 Adjustments to reconcile operating income to net cash from operating activities: Depreciation and amortization 1,102,145 Bad debts 70,764 Deferred outflows and inflows 742,711 Changes in assets and liabilities: Receivables (185,957) Prepaid and other assets (784,324) Accounts payable 50,476 Accrued and other liabilities (813,323) Security and other trust deposits 17,902 Deferred revenue 151,314 Net cash and cash equivalents provided by operating activities $ 1,186,437 See notes to financial statements. 12 Lansing Housing Commission Statement of Fiduciary Net Position Other Postemployment Benefits Trust June 30, 2020 Assets - Interest in pooled investments (Note 3) $ 391,580 Liabilities - Net Position - Restricted for other postemployment benefits $ 391,580 See notes to financial statements. 13 Lansing Housing Commission Statement of Changes in Fiduciary Net Position Other Postemployment Benefits Trust Year Ended June 30, 2020 Additions Investment income $ 1,238 Employer contributions 470,742 Total additions 471,980 Deductions - Benefit payments 80,400 Net Increase in Net Position Restricted for Other Postemployment Benefits 391,580 Net Position Restricted for Other Postemployment Benefits - Beginning of year - Net Position Restricted for Other Postemployment Benefits - End of year $ 391,580 See notes to financial statements. 14 Lansing Housing Commission Notes to Financial Statements June 30, 2020 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 (the "ACC") under the provisions of the ACC and all applicable provisions of the United States Housing Act of 1937 (42 U.S.0 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 Housin_p The Commission owns, operates, and maintains 833 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 1,648 tenant-based vouchers monthly for the year ended June 30, 2020. 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. 15 Lansing Housing Commission Notes to Financial Statements June 30, 2020 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 Nos. 14, 39, 61, and 80 define 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. LHCNPDC has a 99 percent ownership interest in Oliver Gardens, LLC, and the Commission has a 1 percent ownership interest in Oliver Gardens, LLC. The Commission has financial accountability for the nonprofit and controls its board of directors and management. As of June 30, 2020, LHCNPDC had assets of $870,443, liabilities of $879,491, and net position (deficit) of $(9,048). The total revenue and change in net position were $13,333 for the year ended June 30, 2020. Discretely Presented Component Unit The component unit column in the financial statements includes the financial data of the Commission's legally separate component unit, Oliver Gardens Limited Dividend Housing Association Limited Partnership (Oliver Gardens), which meets the criteria for discrete component presentation. The separate column presentation clearly distinguishes the component unit balances and transactions from that of the primary government. The balances are presented as of and for the year ended December 31, 2019. A complete financial report can be obtained at its administrative offices at 419 Cherry St., Lansing, MI 48933. As described above, the Commission has a 1 percent managing member ownership interest in Oliver Gardens, LLC, which has a 0.01 percent general partner ownership interest in Oliver Gardens. Oliver Gardens is a residential apartment complex in Lansing, Michigan consisting of 30 low-income housing units. The Commission has financial accountability for Oliver Gardens, but it does not have majority ownership of the entity. Oliver Gardens follows all applicable Financial Accounting Standards Board (FASB) standards. Since it does 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. 16 Lansing Housing Commission Notes to Financial Statements June 30, 2020 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 (GASB). 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 administrative, 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 as 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. 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. Investments Short-term investments consisted of certificates of deposit at June 30, 2020. 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$10,245 as potentially uncollectible as of June 30, 2020. Tenant bad debt for the year ended June 30, 2020 was$70,764. 17 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 2 - Significant Accounting Policies (Continued) Prepaid Expenses Prepaid items consist of certain payments to vendors that reflect costs applicable to future fiscal years. Investment in Partnership The amount of this investment includes amounts invested in and due from the Commission's discretely presented component unit, Oliver Gardens. Of the amount due, $405,767 is for developer fees earned that are payable from limited partner contributions or upon the availability of cash flow generated at the operating partnership level. Also included in this amount is $411,618 due from Oliver Gardens resulting from the Commission providing accounting, management, oversight, and maintenance services. Additionally, $300,133 is a note receivable dated December 31, 2007. The loan bears interest at 1 percent, compounded annually. The total amount of accrued interest at June 30, 2020 is $44,543. No principal or interest are 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 LDHA LP. The note receivable is reported at its 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, 2020, no amounts have been deemed to be uncollectible. 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 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, and machinery 3-10 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 2020, no impairments were recorded. 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, and replacement reserves. Restrictions for use in operations and approval are governed by HUD, lender requirements, or other outside parties. 18 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 2 - Significant Accounting Policies (Continued) Other Noncurrent Assets According to the partnership agreement of Oliver Gardens, the general partner of Oliver Gardens, Oliver Gardens, LLC, is entitled to a cumulative annual partnership management fee of$10,000 per annum. As described above, Oliver Gardens, LLC is 99 percent owned by LHCNPDC and 1 percent owned by the Commission. As such, the total accrued partnership management fee of $120,000 at June 30, 2020 is reported in other receivables on the statement of net position. Other assets of the Commission include development costs totaling $474,908 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 unit include $22,917 of costs related to obtaining tax credits, net of accumulated amortization of $19,862. These costs have been capitalized and are being amortized over 15 years using the straight-line method. Amortization expense for the year ended June 30, 2020 was $1,528. 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 $89,072 at June 30, 2020, of which $13,361 is current and $75,711 is noncurrent. 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. 19 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 2 - Significant Accounting Policies (Continued) 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 2020 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. 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. Adoption of New Accounting Pronouncements During the current year, the Commission adopted GASB Statement No. 84, Fiduciary Activities, which establishes criteria for identifying and reporting fiduciary activities. As a result of implementing this standard, the Postemployment Health Benefits Trust Fund not previously reported in the financial statements now meets the definition of a fiduciary activity and is reported as such. 20 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 2 - Significant Accounting Policies (Continued) This was also the first year GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, was applicable to the Commission's financial statements. This was a result of the Postemployment Health Benefits Trust Fund now being reported as a fiduciary fund under GASB Statement 84. As a result, some of the disclosures within the OPEB plan footnote have changed, along with the related schedules in the required supplemental information. 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. Subsequent Events The financial statements and related disclosures include evaluation of events up through and including November 18, 2020, which is the date the financial statements were available to be issued. Note 3 - Deposits and Investments Deposits and investments are reported in the financial statements as follows: Primary Government Component Unit (LHC) (Oliver Gardens) Cash and cash equivalents-Unrestricted $ 4,495,504 $ 27,933 Cash and cash equivalents-Restricted 415,225 365,792 Tenant security deposits- Restricted 134,910 5,071 Investments-Certificates of deposit 534,272 - Total deposits and investments $ 5,579,911 $ 398,796 21 Lansing Housing Commission Notes to Financial Statements June 30, 2020 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 $0 of bank deposits (certificates of deposit and checking and savings accounts) that were uninsured and uncol lateral ized. 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, $284,272 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 $391,580. The underlying asset allocation of this fund consists of 60 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. 22 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 3 - Deposits and Investments (Continued) 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. 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 the year ended June 30, 2020, 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 Balanced Income Fund $ 391,580 $ - N/A N/A The MERS Balanced Income Fund seeks to provide growth of capital and provide downside protection through a diversified mix of stocks and bonds. The objective is to outperform a traditional 40/60 mix of stocks and bonds. MERS manages the asset allocation and monitors the underlying investment managers of the MERS Balanced Income Fund. Note 4 - Capital Assets Capital asset activity of the Commission's governmental activities was as follows: Primary Government Balance Balance July 1, 2019 Reclassifications Additions Reductions June 30, 2020 Capital assets not being depreciated: Land $ 1,554,771 $ - $ - $ - $ 1,554,771 Construction in progress 397,756 (774,605) 1,334,304 - 957,455 Total nondepreciable assets 1,952,527 (774,605) 1,334,304 - 2,512,226 Capital assets being depreciated: Buildings and improvements 51,933,079 693,233 - - 52,626,312 Machinery and equipment 1,304,132 81,372 - (62,223) 1,323,281 Total depreciable capital assets 53,237,211 774,605 - (62,223) 53,949,593 Accumulated depreciation 41,642,957 - 1,102,145 (62,223) 42,682,879 Net capital assets being depreciated 11,594,254 774,605 (1,102,145) - 11,266,714 Net capital assets $ 13,546,781 $ - $ 232,159 $ - $ 13,778,940 23 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 4 - Capital Assets (Continued) Component Unit Balance Balance December 31, January 1, 2019 Additions Disposals 2019 Capital assets not being depreciated-Land $ 685,162 $ - $ - $ 685,162 Capital assets being depreciated: Buildings and improvements 3,318,485 - - 3,318,485 Furniture and equipment 188,459 - - 188,459 Subtotal 3,506,944 - - 3,506,944 Accumulated depreciation 1,853,569 140,260 - 1,993,829 Net capital assets being depreciated 1,653,375 (140,260) - 1,513,115 Net capital assets $ 2,338,537 $ (140,260) $ - $ 2,198,277 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 5 - 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. Equal monthly payments of$5,000 are due beginning on July 28, 2012. The outstanding principal and interest balance will be due when the note matures on June 28, 2022. 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. 24 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 5 - Long-term Debt (Continued) Component Unit Oliver Gardens has the following loans outstanding as of December 31, 2019 that are secured by land and substantially all real property owned by Oliver Gardens. These are all considered direct borrowings: Mortgage dated October 17, 2006 held by Michigan State Housing Development Authority (MSHDA) 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. Financing fees of$45,415 were incurred in connection with obtaining loans to rehabilitate the property. 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, 2019,total accumulated amortization related to these costs was$16,217. Amortization expense was $1,528 for the year ended December 31, 2019 and has been included as a component of interest expense on the statement of activities $ 1,444,435 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 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 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 1.0 percent. Principal and interest are due on the loan when it matures on January 1, 2048 300,133 Total 2,464,568 Less current portion 34,633 Long-term portion $ 2,429,935 Primary Government Future minimum principal and interest payments on the LHC promissory note (direct borrowing) with Davenport University to maturity for the years ending June 30 are as follows: Years Ending Principal Interest Total 2021 $ 59,030 $ 970 $ 60,000 2022 8,324 23 8,347 Total $ 67,354 $ 993 $ 68,347 Future minimum principal and interest payments on LHC's lease (direct borrowing) with PNC to maturity for the years ending June 30 are as follows: Years Ending Amount Interest 2021 $ 143,613 $ 56,000 2022 150,000 50,000 2023 156,000 44,000 2024 162,000 37,000 2025 169,000 30,000 2026-2029 648,284 49,000 Total $ 1,428,897 $ 266,000 25 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 5 - Long-term Debt (Continued) Component Unit Future minimum principal and interest payments on direct borrowings to maturity for the years ending December 31 are as follows: Years Ending Amount Interest 2020 $ 34,634 $ 72,894 2021 36,404 71,121 2022 38,267 69,259 2023 40,224 67,300 2024 42,283 65,242 2025-2029 246,205 291,455 2030-2034 315,969 221,691 2035-2039 405,502 132,158 2040-2044 454,914 357,436 2045-2048 850,166 - Total $ 2,464,568 $ 1,348,556 Changes in long-term debt for the year ended June 30, 2020 (or December 31, 2019 for the discretely presented component unit) are presented below: Balance- Beginning of Balance- Year Additions Deletions End of Year Due in One Year Primary government-Direct borrowings: Davenport $ 124,986 $ - $ (57,632) $ 67,354 $ 59,030 PNC 1,566,764 - (137,867) 1,428,897 143,613 Total $ 1,691,750 $ - $ (195,499) $ 1,496,251 $ 202,643 Direct borrowings: MSHDA $ 1,506,580 $ - $ (32,947) $ 1,473,633 $ 34,633 City of Lansing, Michigan 720,000 - - 720,000 - LHC 300,133 - - 300,133 - Total $ 2,526,713 $ - $ (32,947) $ 2,493,766 $ 34,633 Interest expense for the year ended June 30, 2020 was $63,884 for the primary government, and interest expense for the year ended December 31, 2019 was $87,137 for the discrete component unit, excluding $1,297 of amortization expense of financing fees, which has been reported as a component of interest expense on the statement of activities. Note 6 - 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. 26 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 6 - Agent Defined Benefit Pension Plan Description (Continued) 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. 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. 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. 27 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 6 - Agent Defined Benefit Pension Plan Description (Continued) Employees Covered by Benefit Terms At the December 31, 2019 measurement date, the following employees were covered by the benefit terms: Inactive plan members or beneficiaries currently receiving benefits 43 Inactive plan members entitled to but not yet receiving benefits 12 Active plan members 24 Total employees covered by MERS 79 Contributions State law requires public employers to make pension contributions in accordance with an actuarial valuation. The Commission hires an independent actuary for this purpose and annually contributes the amount determined to finance the costs of benefits earned by employees 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 year ended June 30, 2020, the average employee contribution rate was 5.0 percent of annual pay for all divisions, and the Commission's average contribution rate was 22.42 percent in the open general division and 0.11 percent under the new hires division of annual payroll. 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, 2020 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, 2019 measurement date. The December 31, 2019 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 31,2018 $ 9,216,023 $ 7,777,344 $ 1,438,679 Service cost 74,380 - 74,380 Interest 708,880 - 708,880 Differences between expected and actual experience (67,609) - (67,609) Changes in assumptions 315,446 - 315,446 Contributions- Employer - 87,890 (87,890) Contributions- Employee - 58,282 (58,282) Net investment income - 1,025,515 (1,025,515) Benefit payments, including refunds (784,425) (784,425) - Administrative expenses - (17,645) 17,645 Net changes 246,672 369,617 (122,945) Balance at December 31,2019 $ 9,462,695 $ 8,146,961 $ 1,315,734 The plan's fiduciary net position represents 86.1 percent of the total pension liability. 28 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 6 - Agent Defined Benefit Pension Plan Description (Continued) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2020, the Commission recognized pension expense of $407,013. At June 30, 2020, 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 $ 25,985 $ (45,073) Changes in assumptions 210,297 Net difference between projected and actual earnings on pension plan investments 38,973 - Employer contributions to the plan subsequent to the measurement date 40,248 - Total $ 315,503 $ (45,073) 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$40,248, which will impact the net pension liability in fiscal year 2020, rather than pension expense. Years Ending June 30 Amount 2021 $ 94,300 2022 109,184 2023 112,611 2024 (85,913) Actuarial Assumptions The total pension liability in the December 31, 2019 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 11 percent), and an investment rate of return (net of pension plan investment expenses) of 7.6 percent. Mortality rates were a blend of the RP-2014 Healthy Annuitant Mortality Tables, with rates multiplied by 105 percent; RP-2014 Employee Mortality Tables; and RP-2014 Juvenile Mortality Tables, all with a 50 percent male and 50 percent female blend. For disabled retirees, the RP-2014 Disabled Retiree Mortality Table with a 50 percent male and 50 percent female blend is used to reflect the higher expected mortality rates of disabled members. The actuarial assumptions used in the December 31, 2019 valuation were based on the results of an actuarial experience study for the period from January 1, 2009 through December 31, 2013. 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. 29 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 6 - 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 8.0 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, 2019, 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 % 6.15 % Global fixed income 20.00 1.26 Private investment 20.00 6.56 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 $ 2,265,539 $ 1,315,734 $ 508,278 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 The assumptions and methods used in the December 31, 2019 actuarial valuation are those adopted by the MERS retirement board. Effective this valuation, the MERS retirement board has 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. This valuation reflects the first year of phase-in. 30 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 7 - 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. Management of the plan is vested in the Municipal Employees' Retirement System retirement board, which consists of nine members. Six members are nominated and voted upon by MERS members, and three are appointed by the retirement board. 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, 2019 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, 2020 was $19,251. Retiree health care costs are paid by the Commission on a pay-as-you-go basis. For the fiscal year ended June 30, 2020, the Commission made payments for postemployment health benefit premiums of $80,400. The Commission also contributed $390,342 to an OPEB trust for a total contribution during the period of$470,742. 31 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 7 - Other Postemployment Benefit Plan (Continued) 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, 2020 fiscal year end reported net OPEB liability was determined using an actuarial valuation performed as of June 30, 2019, which used update procedures to roll forward the estimated liability to the June 30, 2020 measurement date. 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 1,2019 $ 871,259 $ - $ 871,259 Changes for the year: Service cost 9,427 - 9,427 Interest 23,121 - 23,121 Differences between expected and actual experience (157,076) - (157,076) Changes in assumptions (124,117) - (124,117) Contributions- Employer - 470,742 (470,742) Net investment income - 1,238 (1,238) Benefit payments, including refunds (80,400) (80,400) - Net changes (329,045) 391,580 (720,625) Balance at June 30,2020 $ 542,214 $ 391,580 $ 150,634 The plan's fiduciary net position represents 72.2 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, 2020, the Commission recognized OPEB expense of$148,969. At June 30, 2020, 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 Total Difference between expected and actual experience $ 84,754 $ (125,661) $ (40,907) Changes in assumptions - (170,192) (170,192) Net difference between projected and earnings on OPEB plan investments 7,406 - 7,406 Total $ 92,160 $ (295,853) $ (203,693) 32 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 7 - Other Postemployment Benefit Plan (Continued) 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 2021 $ (49,767) 2022 (49,767) 2023 (49,768) 2024 (54,391) 2025 - Thereafter - Total $ (203,693) Actuarial Assumptions The total OPEB liability was determined by an actuarial valuation as of June 30, 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, 2020 and for future periods Cost of living 3.50 percent per year Salary increases 3.00 percent annually as of June 30, 2020 and for future periods Mortality RP 2014 Mortality Table for Blue Collar Healthy Annuitants projected generationally with scale MP 2016 for males and females, set forward 1 year for females Teachers: RP 2014 Mortality Table for White Collar Healthy Annuitants projected generationally with scale MP 2016 for males and females 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 5.50 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 5.45 percent, net of OPEB plan investment expense, including inflation. 33 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 7 - Other Postemployment Benefit Plan (Continued) 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, 2020 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 Domestic equity-Large cap 4.80 % Domestic equity-Small/Mid cap 5.29 Domestic fixed income 2.05 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 5.50 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 (4.50 percent) or 1 percentage point higher(6.50 percent)than the current rate: 1 Percentage Current Discount 1 Percentage Point Decrease Rate Point Increase (4.50%) (5.50%) (6.50%) Net OPEB liability of the plan $ 191,992 $ 150,634 $ 115,664 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 3.50 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 $ 114,697 $ 150,634 $ 192,464 Assumption Changes The changes in assumptions from June 30, 2019 to June 30, 2020 included a change in the discount rate from 2.75 percent to 5.50, the inflation adjustment was updated to 2.5 percent, and the mortality tables used have been 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. 34 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 7 - Other Postemployment Benefit Plan (Continued) 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, 2020: Plan Asset Class Target Allocation U.S. stocks 31.60 % International stocks 2.40 Emerging market stocks 6.00 U.S. bonds 51.00 Global bonds 9.00 Total 100.00 % Rate of Return For the year ended June 30, 2020, the annual money-weighted rate of return on OPEB plan investments, net of OPEB plan investment expense, was 3.40 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Note 8 - 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, 2020. The collective bargaining three-year agreement between the Housing Commission 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 9 - 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. 35 Lansing Housing Commission Notes to Financial Statements June 30, 2020 Note 10 - 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, 2020, approximately 86 percent of the operating revenue reflected in the primary government basic financial statements is from HUD. 36 Required Supplemental Information 37 Lansing Housing Commission Required Supplemental Information Schedule of Changes in the Commission's Net Pension Liability and Related Ratios Last Six Plan Years Years Ended December 31 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 74,380 $ 72,132 $ 91,117 $ 126,678 $ 114,272 $ 114,461 Interest 708,880 700,146 687,782 714,076 698,614 684,653 Differences between expected and actual experience (67,609) 77,954 88,563 (140,946) (123,435) - Changes in assumptions 315,446 - - (349,397) 405,966 - Benefit payments, including refunds (784,425) (701,709) (661,395) (651,805) (635,102) (624,495) Other - (21,160) (4,268) (521) - - Net Change in Total Pension Liability 246,672 127,363 201,799 (301,915) 460,315 174,619 Total Pension Liability-Beginning of year 9,216,023 9,088,660 8,886,861 9,188,776 8,728,461 8,553,842 Total Pension Liability-End of year $ 9,462,695 $ 9,216,023 $ 9,088,660 $ 8,886,861 $ 9,188,776 $ 8,728,461 Plan Fiduciary Net Position Contributions- Employer $ 87,890 $ 145,613 $ 685,378 $ 693,689 $ 158,735 $ 215,191 Contributions-Member 58,282 62,196 70,951 67,424 55,586 37,167 Net investment income(loss) 1,025,515 (323,275) 1,035,066 743,039 (104,348) 446,261 Administrative expenses (17,645) (16,423) (16,381) (14,686) (15,480) (16,314) Benefit payments, including refunds (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 369,617 (855,638) 1,109,174 837,140 (540,609) 57,810 Plan Fiduciary Net Position-Beginning of year 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 $ 8,146,961 $ 7,777,344 $ 8,632,982 $ 7,523,808 $ 6,686,668 $ 7,227,277 Commission's Net Pension Liability- Ending $ 1,315,734 $ 1,438,679 $ 455,678 $ 1,363,053 $ 2,502,108 $ 1,501,184 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 86.10 % 84.39 % 94.99 % 84.66 % 72.77 % 82.80 % Covered Payroll $ 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 119.15 % 134.20 % 34.92 % 102.23 % 202.54 % 128.91 % See notes to schedule of commission contributions. 38 Lansing Housing Commission Required Supplemental Information Schedule of Commission Contributions Last Five Fiscal Years Years Ended June 30 2020 2019 2018 2017 2016 Actuarially determined contribution $ 80,707 $ 97,665 $ 133,299 $ 122,057 $ 103,079 Contributions in relation to the actuarially determined contribution 80,707 145,613 685,378 693,689 158,735 Contribution Excess $ . $ 47,948 $ 552,079 $ 571,632 $ 55,656 Covered Payroll $ 1,104,246 $ 1,072,020 $ 1,304,971 $ 1,333,333 $ 1,235,367 Contributions as a Percentage of Covered Employee Payroll 7.31 % 13.58 % 52.52 % 52.03 % 12.85 % See notes to schedule of commission contributions. 39 Lansing Housing Commission Required Supplemental Information Schedule of Changes in the Commission's Net OPEB Liability and Related Ratios Last Four Fiscal Years 2020 2019 2018 2017 Total OPEB Liability Service cost $ 9,427 $ 11,298 $ 53,470 $ 50,924 Interest 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 (124,117) (118,162) - - Benefit payments, including refunds (80,400) (201,577) (65,682) (64,552) Net Change in Total OPEB Liability (329,045) (1,000,219) 47,739 44,801 Total OPEB Liability- Beginning of year 871,259 1,871,478 1,823,739 1,778,938 Total OPEB Liability- End of year $ 542,214 $ 871,259 $ 1,871,478 $ 1,823,739 Plan Fiduciary Net Position Contributions- Employer $ 470,742 $ - $ - $ - Net investment income 1,238 - - - Benefit payments, including refunds (80,400) - - - Net Change in Plan Fiduciary Net Position 391,580 - - - Plan Fiduciary Net Position - Beginning of year - - - - Plan Fiduciary Net Position - End of year $ 391,580 $ - $ - $ - Net OPEB Liability- Ending $ 150,634 $ 871,259 $ 1,871,478 $ 1,823,739 Plan Fiduciary Net Position as a Percentage of Total OPEB Liability 72.22 oho - oho - oho - oho Covered Payroll $ 891,464 $ 2,452,554 $ 2,381,121 $ 2,311,768 Net OPEB Liability as a Percentage of Covered Payroll 16.90 % 35.52 % 78.60 % 78.89 % See notes to schedule of commission contributions. 40 Lansing Housing Commission Required Supplemental Information Schedule of OPEB Contributions Last Four Fiscal Years Years Ended June 30 2020 2019 2018 2017 Actuarially determined contribution $ 19,251 $ 53,173 $ 148,959 $ 143,977 Contributions in relation to the actuarially determined contribution 470,742 201,577 65,682 64,552 Contribution (Excess) Deficiency $ (4519491) $ (1489404) $ 839277 $ 799425 Covered Payroll $ 891,464 $ 2,452,554 $ 2,381,121 $ 2,311,768 Contributions as a Percentage of Covered Payroll 52.81 % 8.22 % 2.76 % 2.79 % Notes to Schedule of Contributions 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 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 5.45 percent, net of OPEB plan investment expense, including inflation Retirement age 60 Mortality 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 Teachers: RP-2014 Mortality Table for White Collar Healthy Annuitants projected generationally with scale MP-2016 for males and females Other information None See notes to schedule of commission contributions. 41 Lansing Housing Commission Required Supplemental Information Schedule of OPEB Investment Returns Last One Fiscal Year Year Ended June 30 Annual money-weighted rate of return, net of investment expense 3.40 % The annual money-weighted rate of return, net of investment expense is not applicable to years prior to 2020. See notes to schedule of commission contributions. 42 Lansing Housing Commission Notes to Schedule of Commission Contributions June 30, 2020 Pension Information Actuarial valuation information relative to the determination of contributions: Valuation date Actuarially determined contribution rates are calculated as of December 31, 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 10-year smoothed Inflation 2.50 to 3.75 percent Salary increase 3.75 percent average, including inflation Investment rate of return 8.0 percent Retirement age 60 Mortality 50 percent male to 50 percent female blend of the 2004 Group Annuity Mortality Table Other information None Benefit Changes There were no changes of benefit terms in 2019. Changes in Assumptions Effective this valuation, the MERS retirement board has 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. This valuation reflects the first year of phase-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 2019. Changes in Assumptions The changes in assumptions from June 30, 2019 to June 30, 2020 included a change in the discount rate from 2.75 percent to 5.50, the inflation adjustment was updated to 2.5 percent, and the mortality tables used have been 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. 43 Other Supplemental Information 44 Lansing Housing Commission Financial Data Schedules Year Ended June 30, 2020 14.PHC Public 14.896 PIH 14.CCC Central 6.1 Component 14.HCC HCV 14.871 Housing Housing 1 Business Family Self- Office Cost Project Total CARES Act Actitities 2 State/Local Sufficiency Center CARES Unit-Discretely CARES Act Choice COCC 5 Fiduciary Subtotal ELIM Total Funding Program Act Funding Presented Funding Vouchers 111 Cash-Unrestricted 2,163,479 81,103 272904 668,813 1,287,183 41228,482 4,228,482 112 Cash-Restricted-Modernization and Development _ _ _ _ _ _ _ _ 113 Cash-Other Restricted 365,792 151,314 415,225 932,331 932,331 114 Cash-Tenant Security Deposits 134,910 5,100 140,010 140,010 115 Cash-Restricted for Payment of Current Liabilities 143,613 143,6131 143,613 100 Total Cash 2,442,002 81,103 398,796 151,314 1,084,038 1,287,183 5p444,4361 5,444,436 121 Accounts Recei�ble-PHA Projects 122 Accounts Recevable-HUD Other Projects 3,500 83,206 !87 86.706 124 Accounts Receivable-Other Government 7,589 7,589 125 Accounts Recei�ble-Miscellaneous 315,664 5892827 905,491 126 Accounts Receivable-Tenants 102,453 42141 106,594 126.1 Allowance for Doubtful Accounts-Tenants 10,245 10,245126.2 Allowance for Doubtful Accounts-Other 127 Notes,Loans,8,Mortgages Receivable-Current 31614 3,614 3,614 128 Fraud Recovery 128.1 Allowance for Doubtful Accounts-Freud 129 Accrued Interest Receivable 512 512 512 120 Total Receivables,Net of Allowances for Doubtful Accounts 107,423 83,206 315,664 4,141 589,827 1,100,261 1,100,261 131 Investments-Unrestricted 534,272 534,272 534,272 132 Investments-Restricted 391,580 391,580 391,580 135 Investments-Restricted for Payment of Current Liability _ _ _ _ _ _ _ _ _ _ _ _ 142 Prepaid Expenses and Other Assets 56,765 3,431 3,313 11,391 74,900 74,900 143 Inventories _ _ _ _ _ _ _ _ _ _ _ _ _ _ 143.1 Allowance for Obsolete Inventories _ _ _ _ _ _ _ _ _ _ _ _ 144 Inter Program Due From 83,206 879,491 962,697 (962,697) 145 Assets Held for Sale _ _ _ _ _ _ _ _ _ _ _ _ _ _ 150 Total Current Assets 3,223,668 83,206 396,767 4061368 1511314 110871351 21767,892 3911580 815081146 (962,697) 7,545,449 161 Land 1,364,771 685,162 190,000 2,239,933 2,239,933 162 Buildings 51,888p341 313185485 737,971 55,944,797 555944,797 163 Furniture,Equipment&Machinery-Dwellings 907,277 907,277 9075277 164 Furniture,Equipment B Machinery-Administration 585981 1755949 27,596 329,427 5915953 591,953 165 Leasehold Improvements _ _ _ _ _ _ _ _ _ _ _ _ _ _ 166 Accumulated Depreciation (41,605,160 1,993,829 27,596 1,050,122 44,676,707 44,676,707 167 Construction in Progress 957,455 12,510 969,965 969,965 168 Infrastructure _ _ _ _ _ _ _ _ _ _ _ _ 160 Total Capital Assets,Net of Accumulated Depreciation 13,571,665 2,198,277 207,276 15,977,218 15,977,218 171 Notes,Loans and Mortgages Receivable-Non-Current 750,443 4111618 1,162,061 1,162,061 172 Notes,Loans,8 Mortgages Receivable-Non Current-Past Due 173 Grants Receivable-Non Current 174 Other Assets 120,000 3,055 1235055 123,055 176 Investments in Joint Ventures - - - - - - - - - - - - - - 180 Total Nan-Current Assets 13,571,665 870,443 2,201,332 618,894 175262,334 17,262,334 200 Deferred Outflow of Resources 274,131 84,979 48,553 407,663 407,663 290 Total Assets and Defened Outflow of Resources 17,069,464 1 83,206 870,443 396,767 2,607,7001 151,314 1,1721330 3,4351339 391,580 26,178,143 (962,697)1 25,215,446 45 Lansing Housing Commission Financial Data Schedules Year Ended June 30, 2020 14.PHC Public 14.896 PIH 14.CCC Central 6.1 Component 14.HCC HCV 14.871 Housing Housing 1 Business Family Self- Office Cost Project Total CARES Act Activities 2 State/Local Sufficiency Center CARES Unit-Discretely CARES Act Choice COCC 5 Fiduciary Subtotal ELIM Total Funding Program Act Funding Presented Funding Vouchers 311 Bank Overdraft _ _ _ _ _ _ _ _ _ _ _ _ _ _ 312 Accounts Payable-90 Days 7,527 4,703 416 7,714 20,360 20,360 313 Accounts Payable>90 Days Past Due _ _ _ _ _ _ _ _ _ _ _ _ _ _ 321 Accrued Wage/Payroll Taxes Payable 36,684 84,184 16,924 6,703 144,495 144,495 322 Accrued Compensated Absences-Current Portion 8,109 3,728 1,524 13,361 13,361 324 Accrued Contingency Liability _ _ _ _ _ _ _ _ _ _ 325 Accrued Interest Payable 177,610 177,610 177,610 331 Accounts Payable-HUD PHA Programs _ _ _ _ _ _ _ _ _ _ _ _ 332 Account Payable-PHA Projects _ _ _ _ _ _ _ _ _ _ _ _ _ _ 333 Accounts Payable-Other Government 43,059 18,450 61,509 61,509 341 Tenant Security Deposits 134,910 5,100 1407010 140,010 342 Unearned Revenue 32,991 422 151,314 5,910 190,637 190,637 343 Current Portion of Long-tens Debt-Capital Projects/Mortgage Revenue 143,613 34,633 59,030 237,276 237,276 344 Current Portion of Long-ten Debt-OperatingBorrowings _ _ _ _ _ _ _ _ _ _ _ _ _ _ 345 Other Current Liabilities 115,395 1152395 115,399 346 Accrued Liabilities-Other 1592393 821366 8,521 142,402 392,682 392,682 347 Inter Program-Due To 83,206 879,491 962,697 (962,697) 348 Loan Liability-Current 209,694 209,684 209,684 310 Total Current Liabilities 5662286 83,206 879,491 732,547 151,314 29,589 223,283 2,665,716 (962,697) 1,703,019 351 Long-tern Debt,Net of Current-Capital Projects/Mortgage Revenue 1,285,284 2,429,936 8,324 3,723,544 3,723,544 352 Long-tern Debt,Net of Current-Operating BormWngs _ _ _ _ _ _ _ _ _ _ _ _ _ _ 353 Non-current Liabilities-Other 525,768 68,819 594,587 594,587 354 Accrued Compensated Absences-Non Current 45,947 21,127 8,637 75,711 75,711 355 Loan Liability-Non Current _ _ _ _ _ _ _ _ _ _ 356 FASB 5 Liabilities _ _ _ _ _ _ _ _ _ _ _ _ _ _ 357 Accrued Pension and OPEB Liabilities 1,002,963 2842890 178,516 1,466,369 1,466,369 350 Total Non-Current Liabilities 2,334,194 2,955,704 3741836 195,477 5,860,211 5,860,211 300 Total Liabilities 2,900,480 83,206 879,491 316881251 1511314 404,425 4181760 8,525,927 (962,697) 7,563,230 400 Deferred Inflow of Resources 208,795 96,203 35,928 340,926 340,926 508.4 Net Investment in Capital Assets 12,142,768 (266,292) 139,922 12,016,398 12,016,398 511.4 Restricted Net Position 346,406 391,580 737,986 737,986 512.4 Unrestricted Net Position 1,817,421 (9,048) 396,767 814,259 325,296 2,840,729 4,556,906 4,556,906 513 Total Equity-Net Assets/Position 13,960,189 (9,048) 396,767 1,080,551 671,702 22980,651 391,580 17,311,290 17,311,290 600 Total Liabilities,Deferred Inflows of Resources and Equity-Net 17,069,464 83,206 870,443 396,767 2pI507,7001 151,314 1,172,330 3,435,339 391,580 26,178,143 962,697 25,215,446 46 Lansing Housing Commission Financial Data Schedules Year Ended June 30, 2020 14.896 PIH 14.000 Central 14.871 14.PHC Public 1 Business Family Self- Office Cost Center 6.1 Component 14.HCC HCV Housing Project Total Housing CARES 2 State/Local Unit-Discretely CARES Act COCC 5 Fiduciary Subtotal ELIM Total Act Funding Activities Sufficiency CARES Act Presented Funding Choice Program Funding Vouchers 70300 Net Tenant Rental Revenue 1,348,205 - 88,338 - - 1,436,543 1,436,543 70400 Tenant Revenue-Other 137,851 - - - 137,851 137,851 70500 Total Tenant Revenue 1,486,056 - - - - - 88,338 - - - - 1,574,394 - 1,574,394 70600 HUD PHA Operating Grants 4,765,711 336,937 - 44,255 197,045 52,236 12,600,316 - 17,996,500 17,996,500 70610 Capital Grants 1,174,575 - - - - 1,174,575 1,174,575 70710 Management Fee - - - - - - - - - 919.945 - ffl7911 (919,945) - 70720 Asset Management Fee - - - - - - - - - 99,960 - (99,960) - 70730 Book Keeping Fee - - - - - 71,944 - 771,944)70740 Front Line SeMce Fee - - - -70750 Other Fees -70700 Total Fee Revenue - - - - - - - - - 1,091,849 - (1,091,849) - 70800 Other Government Grants 983,888 - - 983,888 983,888 71100 Imeslment Income-Unrestricted 11,782 - - - - - 10,668 - 401 - 1,238 24,089 1.8769) 24,089 71200 Mortgage Interest Income - - - - - 71300 Proceeds from Disposition of Assets Held for Sale71310 Cost of Sale of Assets - - - - - - - - - - - - - 71400 Fraud Recovery - - - - - - - - 21,666 - - 21,666 21,666 71500 Other Revenue 109,809 - 13,333 108,769 - - 2,580 270,717 470,742 975,950 867,181 71600 Gain or Loss on Sale of Capital Assets - - - - - 72000 Investment Income-Restricted - - - - - - - - - - - - - - 70000 Total Revenue 7,547,933 336,937 13,333 983,888 44,255 108,769 296,051 52,236 12,624,963 1,362,566 471,980 23,842,911 (1,200,618) 22,642,293 91100 Administrative Salaries 264,145 84,105 - 38,452 25,992 6,722 - 284,319 139,042 842,777 842,777 91200 Auditing Fees 20,600 - - - - - 9,950 - 25,750 5,150 - 61,450 - 61,450 91300 Management Fee 731,427 50,045 - - - - 31,259 25,825 200,004 - 1,038,560 (1,007,301) 31,259 91310 Book-keeping Fee 71,945 8,917 - - - 80,862 (80,862) 91400 Advertising and Marketing - - 2,066 - 2,066 2,066 91500 Employee Benefit contributions-Administrative 290,934 35,514 - 14,308 18,263 - - - 107,861 85,744 - 552,624 - 552,624 91600 Office Expenses 205,264 263 - 105,639 - 108,769 6,817 3,727 202,355 327,878 - 960,712 - 960,712 91700 Legal Expense 67,517 - - 17,374 - 84,891 84,891 91800 Travel 1,453 - - 6,706 - 8,159 8,159 91810 Allocated Overhead - - - - - - - - - - - - - 91900 Other - - - - - - - - - - - - - - 91000 Total Operating-Administrative 1,653,285 178,844 158,399 44,255 108,769 54,748 29,552 820,289 583,960 - 3,632,101 (1,088,163) 2,543,938 92000 Asset Management Fee 88,474 23,981 - - - - - - - - - 112,455 (112,455) - 92100 Tenant Services-Salaries - - - - - - 92200 Relocation Costs - - - - - - 92300 Employee Benefit Contributions-Tenant Services - - - - - - - - - - - - - - 92400 Tenant Services-Other 25,639 - - - - - - - -1 4,00611 29,6451 29,645 92500 Total Tenant Ser ices 25,639 47 Lansing Housing Commission Financial Data Schedules Year Ended June 30, 2020 14.896 PIH 14.000 Central 14.871 14.PHC Public 1 Business Family Self- Office Cost Center 6.1 Component 14.HCC HCV Housing Project Total Housing CARES 2 State/Local Unit-Discretely CARES Act COCC 5 Fiduciary Subtotal ELIM Total Act Funding Activities Sufficiency CARES Act presented Funding Choice Program Funding Vouchers 93100 Water 196,927 - 17,855 - 958 - 215,740 215,740 93200 Electricity 232,878 - 37,560 - 12,116 - 282,554 282,554 93300 Gas 215,657 - - - - - 11,246 - - 3,079 - 229,982 - 229,982 93400 Fuel - - - - - - - - - - - - - - 93500 Labor - - - - - 93600 Sewer 274,332 - 19,954 - 1,219 - 295,505 295,505 93700 Employee Benefit Contributions-Utilities - - - - - - - - - - - - - - 93800 Other Utilities Expense - - - - - - - - - - - - - - 93000 Total Utilities 919,794 - 86,615 - 17,372 - 1,023,781 1,023,781 94100 Ordinary Maintenance and Operations-Labor 265,178 76,741 - - - - 1,087 - - - - 343,006 - 343,006 94200 Ordinary Maintenance and Operations-Materials and Other 345,671 - - - - - 1,482 - - 254 - 347,407 - 347,407 94300 Ordinary Maintenance and Operations Contracts 1,664,680 9,750 - 40,130 22,684 38,612 35,493 - 1,811,349 1,811,349 94500 Employee Benefit Contributions-Ordinary Maintenance 165,787 47,621 - 213,408 213,408 94000 Total Maintenance 2,441,316 134,112 - - 42,699 22,684 38,612 35,747 - 2,715,170 - 2,715,170 95100 Protective Services-Labor - - 95200 Protective Services-Other Contract Costs 12,174 - 209 585 - 12,968 12,968 95300 Protective Services-Other - - - - - - - - - - - 95500 Employee Benefit Contributions-Protective Sendces - - - - - - - - - - - - - - 95000 Total Protective Services 12,174 - 209 585 - 12.968 12,968 96110 Property Insurance 197,226 - - - - - 12,176 - 1,657 2,228 - 213,287 - 213,287 96120 Liability Insurance 80,092 450 17,455 1,242 - 99,239 99,239 96130 Workmen's Compensation 3,395 6,532 528 - 10,455 10,455 96140 All Other Insurance 3,512 - - - - 303 - 8 5,433 - 9,256 - 9,256 96100 Total insurance Premiums 284,225 - - - - - 12,929 - 25,652 9,431 - 332,237 - 332,237 96200 Other General Expenses - - - - 80,400 80,400 80,400 96210 Compensated Absences 29,292 - - - - - - 23,799 4,206 - 57,297 57,297 96300 Payments in Lieu of Taxes 35,470 - - - - - 18,450 - - - - 53,920 - 53,920 96400 Bad debt-Tenant Rents 70,764 - - - 166 - - 70,930 70,930 96500 Bad debt-Mortgages - 96600 Bad debt-Other - - - - 96800 Severance Expense - - - - - - - - - - - - - - 96000 Total Other General Expenses 061,516 - - - 18,616 - 23,799 4,206 80,400 262,547 262,547 96710 Interest of Mortgage(or Bonds)Payable - 88,434 - 88,434 88,434 96720 Interest on Notes Payable(Short and Long Term) - - - - - - - - 2,368 - 63,884 - 63,884 96730 Amortization of Bond Issue Costs - - 1,528 - 1,528 1,528 96700 Total Interest Expense and Amortization Cost 89,962 2,368 153,846 153,846 96900 Total Operating Expenses 5,621,949 336,937 - 158,399 44,255 108,769 305,569 52,236 908,561 657,675 80,400 8,274,750 (1,200,618) 7,074,132 97000 Excess of Operating Revenue over Operating Expenses 1,925,984 13,333 825,489 (9,518) - 11,716,402 704,891 391,580 15,568,161 15,568,161 97100 Extraordinary Maintenance - - - - - - - - - - - - - - 97200 Casualty Losses-Non-capitalized - - - - 97300 Housing Assistance Payments - 813,756 - 11,312,336 12,126,092 12,126,092 97350 HAP Portability-In - - - - - - - - - - - - - - 97400 Depreciation Expense 1,100,742 - - 140,260 1,403 - 1,242,405 1,242,405 97500 Fraud Losses - - - - 97600 Capital Outlays-Governmental Funds 97700 Debt Principal Payment-Governmental Funds 97800 Dwelling Units Rent Expense - 90000 Total Expenses 6,722,691 1 336,9371 972,155 1 44,255 1 108,7691 445,8291 52,2361 12,220,897 1 659,078 1 80,4001 21,643,247 1 (1,200,618) 20,442,629 48 Lansing Housing Commission Financial Data Schedules Year Ended June 30, 2020 14.896 PIH 14.CCC Central 14.871 14.PHC Public 1 Business Family Self- Office Cost Center 6.1 Component 14.HCC HCV Housing Project Total Housing CARES 2 State/Local Unit-Discretely CARES Act COCC 5 Fiduciary Subtotal ELIM Total Act Funding Activities Sufficiency CARES Act Presented Funding Choice Program Funding Vouchers 10010 Operating Transfer In 689,820 689,820 (689,820) 10020 Operating transfer Out (689,820) - - - - - - - - (689,820) 689,820 - 10030 Operating Transfers from/to Primary Government - - - - - - - - - - - - - - 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 825,242 - 13,333 11,733 - - (149,778) - 404,066 703,488 391,580 2,199,664 - 2,199,664 11020 Required Annual Debt Principal Payments 137,867 - 28,367 - 47,976 214,210 214,210 11030 Beginning Equity 13,134,947 (22,381) 385,034 - (930,773) - 267,636 2,277,163 15,111,626 15,111,626 11040 Prior Period Adjustments,Equity Transfers and Correction of Errors - - - - - - - - - - - - - - 11050 Changes in Compensated Absence Balance 11060 Changes in Contingent Liability Balance 11070 Changes in Unrecognized Pension Transition Liability 11080 Changes in Special Term/Severance Benefits Liability 11090 Changes in Allowance for Doubtful Accounts-Dwelling Rents 11100 Changes in Allowance for Doubtful Accounts-Other 11170 Administrative Fee Equity 325,296 325,296 325,296 11180 Housing Assistance Payments Equity 346,406 346,406 346,406 11190 Unit Months Available 9,996 - - - 360 21,936 32,292 31,932 11210 Numberof Unit Months Leased 9,593 - - - - 360 19,770 29,7231 29,363 11270 Excess Cash 2,151,679 2,151,679 2,151,679 11610 Land Purchases 11620 Building Purchases 1,174,575 1,174,575 1,174,575 11630 Furniture&Equipment-Dwelling Purchases - - - - 11640 Furniture&Equipment-Administrative Purchases - - - 11650 Leasehold Improvements Purchases 11660 Infrastructure Purchases - 13510 CFFP Debt Service Payments - - - - 13901 Replacement Housing Factor Funds - - - - 49