HomeMy WebLinkAbout2018 - 67891 LHC Lansing Housing Commission - Financial Report with Supplemental Information June 3, 2018 Lansing Housing Commission
Financial Report
with Supplemental Information
June 30, 2018
Lansing Housing Commission
Contents
Independent Auditor's Report 1-2
Management's Discussion and Analysis 3-7
Basic Financial Statements
Fund Financial Statements:
Statement of Net Position 8-9
Statement of Activities 10
Statement of Cash Flows 11
Notes to Financial Statements 12-31
Required Supplemental Information 32
Schedule of Changes in the Commission's Net Pension Liability and Related Ratios 33
Schedule of Commission Contributions 34
Schedule of Changes in the Commission's OPEB Liability and Related Ratios 35
Schedule of OPEB Contributions 36
Note to Schedule of Commission Contributions 37
Other Supplemental Information 38
Financial Data Schedules 39-42
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 and the discretely
presented component unit of Lansing Housing Commission (the "Commission") as of and for the year ended June
30, 2018 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 an opinion 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
opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the business-type activities and the discretely presented component unit of Lansing Housing
Commission as of June 30, 2018 and the respective changes in its financial position and its cash flows for the
year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 2 to the basic financial statements, as of July 1, 2017, the Commission adopted the
provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions. The Commission's net position has been restated
as of July 1, 2017 as a result of this change in accounting principle. Our opinion is not modified with respect to
this matter.
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 an opinion 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 December 17, 2018 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.
At-I& �, P L L. C
December 17, 2018
2
Lansing Housing Commission
Lansing, Michigan
Management's Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
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, 2018. 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, a Section 8 New Construction 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, 2018. The audited financial statements of Oliver Gardens have been presented in the
financial statements of the Commission.
Financial Highlights
1. Total assets exceed total liabilities by $ 15,730,114
2. Unrestricted net position equals 3,078,228
3. Total net position decreased by 904,747
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
2017 2018 Change Change
Assets
Current and restricted assets $ 5,211,347 $ 5,259,522 $ 48,175 1%
Capital assets 15,562,494 14,492,096 (1,070,398) -7%
Noncurrent assets 1,048,761 1,092,791 44,030 4%
Total assets 21,822,602 20,844,409 (978,193) 4%
Deferred Outflows of Resources 1,017,239 100,343 (916,896) -90%
Total assets and deferred
outflows of resources 22,839,841 20,944,752 (1,895,089) -8%
Liabilities
Current liabilities 630,636 893,195 262,559 42%
Long-term liabilities 5,439,234 4,153,621 (1,285,613) -24%
Total liabilities 6,069,870 5,046,816 (1,023,054) -17%
Deferred Inflows of Resources 135,110 167,822 32,712 24%
Net Position
Net investment in capital assets 13,268,885 12,398,172 (870,713) -7%
Restricted 1,041,802 283,714 (758,088) -73%
Unrestricted 2,324,174 3,048,228 724,054 31%
Total net position $ 16,634,861 $ 15,730,114 $ (904,747) -5%
As required by Governmental Accountings Standards Board (GASB), the Commission adopted
GASB Statement No. 75. This standard required the inclusion of a liability for the Commission's
estimated unfunded other postemployment benefit (OPEB) costs. Some of the changes in this
net OPEB liability will be recognized immediately as part of the OPEB expense measurement,
and part will be deferred and recognized over future years. The financial statements for the
year ended June 30, 2017 have been restated in order to adopt GASB Statement No. 75. The
effect of this new standard was an increase in net position to record the net OPEB liability at
June 30, 2017.
As illustrated in the statement of net position, the overall net position of the Commission
decreased by $904,717, primarily as a result in a decrease in long-term liabilities net of
decreases in capital assets. There were no large new capital asset projects in the current year
and as a result net capital assets decreased by normal depreciation. The decrease in OPEB
liabilities and net pension liability led to an overall decrease in noncurrent liabilities.
4
Financial Analysis
(Continued)
Statement of Activities
Percent
2017 2018 Change Change
Revenue
Tenant rental revenue $ 1,655,669 $ 1,621,451 $ (34,218) -2%
Federal grants 15,562,618 14,666,576 (896,042) -6%
Other revenue 1,619,345 1,396,575 (222,770) -14%
Total revenue 18,837,632 17,684,602 (1,153,030) -6%
Expenses
Administrative expenses 3,064,073 2,600,196 (463,877) -15%
Tenant services 41,195 83,708 42,513 103%
Utilities 893,395 948,288 54,893 6%
Maintenance and operations 2,392,757 2,494,575 101,818 4%
Insurance and general expenses 450,813 388,174 (62,639) -14%
Housing assistance payments 10,404,199 10,785,430 381,231 4%
Depreciation and amortization 1,273,346 1,205,171 (68,175) -5%
Interest expense 88,882 83,017 (5,865) -7%
Loss on sale of assets 39,225 790 (38,435) -98%
Total expenses 18,647,885 18,589,349 (58,536) 0%
Change in Net Position $ 189,747 $ (904,747) $ (1,094,494) -577%
Revenue
In reviewing the statement of activities, you will find that 83 percent of the Commission's
revenue is derived from grants from the Department of Housing and Urban Development, 9
percent of the Commission's revenue is from dwelling rent, and 8 percent is from investment
income and other income.
Expenses
In reviewing the statement of activities, you will find that 58 percent of the Commission's
expenses are for housing assistance payments, 14 percent for administrative, 5 percent are for
utilities, 13 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 a significant decrease in overall revenue during fiscal year 2018. The Federal
Grants decrease was due to two factors. First, there was a decrease in the funding for the
Public Housing Capital Fund program as there were no major construction projects in progress
during fiscal year 2018. Second, Housing and Urban Development changed their process to
decrease the amount of cash reserves held by housing authorities. As part of this process,
despite having a significant increase in the amount of housing assistance expenses, there was
a decrease in the payments for these items since LHC has cash reserves which could be used
to cover these costs rather than receiving grant funds. The Other Revenue decrease was due
to a decrease in a state funded program. Finally, there was a significant decrease in
administrative expenses. This is primarily due to a new accounting treatment for Other
Postemployment Benefits which was implemented in 2017 which significantly increased
expenses in 2017. The expenses in 2018 then decreased back to the expected level.
5
Financial Analysis
(Continued)
Capital Assets
As of year end, the Commission had $14,492,096 invested in a variety of capital assets as
reflected in the following schedule, which represents a net decrease (additions, deductions, and
depreciation) of 7 percent from the end of last year.
Percent
2017 2018 Change Change
Land $ 1,554,771 $ 1,554,771 $ - 0%
Buildings 49,742,492 51,223,127 1,480,635 3%
Furniture and equipment 1,353,588 1,313,200 (40,388) -3%
Construction in progress 2,331,065 914,088 (1,416,977) -61%
Accumulated depreciation (39,419,422) (40,513,090) (1,093,668) 3%
Net capital assets $ 15,562,494 $ 14,492,096 $ (1,070,398) -7%
The following reconciliation summarizes the change in capital assets:
Beginning balance - July 1, 2017 $ 15,562,494
Additions:
Construction in progress 135,564
Disposals net of depreciation (791)
Depreciation expense (1,205,171)
Ending balance - June 30, 2018 $ 14,492,096
Debt Outstanding
As of the end of the fiscal year, the Commission had $2,123,924 in debt outstanding compared
to $2,293,609 in the previous year. The net change in debt for the year was a decrease of
$169,685 of principal payments.
Long-term Debt
2017 2018
Note payable - Davenport $ 474,903 $ 425,762
Note payable - PNC 1,818,706 1,698,162
Total long-term debt $ 2,293,609 $ 2,123,924
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
• 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
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 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. The Commission underwent an inspection during the fiscal year ended
June 30, 2018.
Conclusion
The Commission's management is committed to staying abreast of regulations and
appropriations as well as maintaining an ongoing analysis of all budgets and expenses to
ensure that the Commission continues to operate at the highest standards established by the
Real Estate Assessment Center and the Department of Housing and Urban Development.
Contact
This financial report is designed to provide a general overview of the Commission's finances for
all those with an interest. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed to Doug Fleming, Executive
Director, Lansing Housing Commission, 419 Cherry, Lansing, MI 48933, or call (517) 372-7996.
7
Lansing Housing Commission
Statement of Net Position
June 30, 2018
Discrete
Component
Unit- Oliver
Primary Gardens
Government December 31,
(LHC) 2017
Assets
Current assets:
Cash and cash equivalents (Note 3) $ 3,923,705 $ 36,295
Cash and cash equivalents - Restricted (Note 3) 337,401 331,094
Receivables:
Tenant receivables 31,002 -
Other receivables 275,922 4,154
Due from other governmental units- HUD 3,904 -
Allowance for doubtful accounts (3,100) -
Prepaid expenses and other assets 41,520 4,460
Tenant security deposits - Restricted (Note 3) 133,244 4,807
Investments (Note 3) 515,924 -
Total current assets 5,259,522 380,810
Noncurrent assets:
Investment in partnership 992,691 -
Capital assets:
Assets not subject to depreciation (Note 4) 2,468,859 685,162
Assets subject to depreciation - Net (Note 4) 12,023,237 1,793,707
Other receivables 100,000 -
Other assets 100 6,111
Total noncurrent assets 15,584,887 2,484,980
Total assets 20,844,409 2,865,790
Deferred Outflows of Resources - Pension (Note 6) 100,343 -
See notes to financial statements. 8
Lansing Housing Commission
Statement of Net Position (Continued)
June 30, 2018
Discrete
Component
Unit- Oliver
Primary Gardens
Government December 31,
(LHC) 2017
Liabilities
Current liabilities:
Accounts payable - Operating $ 173,098 $ 9,413
Security deposits liability 161,474 4,807
Accrued liabilities and other:
Accrued salaries and wages 51,966 -
Accrued interest payable - 152,380
Accrued PILOT 60,180 17,791
Compensated absences < one year 14,301 -
Other current liabilities - 428,019
Current portion of long-term debt(Note 5) 432,176 31,344
Total current liabilities 893,195 643,754
Noncurrent liabilities:
Compensated absences 81,030 -
Accrued partnership management fees - 100,000
Net pension liability(Note 6) 455,678 -
Net OPEB liability(Note 7) 1,871,478 -
Notes payable- Net of current portion (Note 5) 1,691,748 2,494,920
Other noncurrent liabilities 53,687 405,767
Total noncurrent liabilities 4,153,621 3,000,687
Deferred Inflows of Resources - Pension (Note 6) 167,822 -
Net Position
Net investment in capital assets 12,368,172 (47,395)
Restricted 283,714 -
Unrestricted 3,078,228 (731,256)
Total net position $ 15,730,114 $ (778,651)
See notes to financial statements. 9
Lansing Housing Commission
Statement of Activities
Year Ended June 30, 2018
Discrete
Component
Unit- Oliver
Gardens
Primary Year Ended
Government December 31,
(LHC) 2017
Operating Revenue
Tenant revenue - Net $ 1,621,451 $ 264,850
HUD operating revenue 14,545,696 -
Other grant revenue 1,070,450 -
Other operating revenue 318,065 -
Total operating revenue 17,555,662 264,850
Operating Expenses
Administrative 2,600,196 23,713
Tenant services 83,708 -
Utilities 948,001 73,673
Maintenance 2,494,862 25,855
Insurance 286,184 14,581
Other general expenses 101,990 43,712
Housing assistance payments 10,785,430 -
Depreciation and amortization 1,205,171 141,787
Total operating expenses 18,505,542 323,321
Operating Loss (949,880) (58,471)
Nonoperating Revenue (Expense)
Investment income 8,060 15,476
Interest expense (Note 5) (83,017) (91,793)
Loss on sale of assets (790) -
Total nonoperating expense (75,747) (76,317)
Loss - Before capital contributions (1,025,627) (134,788)
Capital Contributions - Capital grants - HUD 120,880 -
Change in Net Position (904,747) (134,788)
Net Position - Beginning of year, as adjusted (Note 2) 16,634,861 (643,863)
Net Position - End of year $ 15,730,114 $ (778,651)
See notes to financial statements. 10
Lansing Housing Commission
Statement of Cash Flows
Year Ended June 30, 2018
Primary
Government
Cash Flows from Operating Activities
Cash received from HUD operating subsidies and grants $ 14,546,084
Cash received from tenants 1,614,748
Other receipts 1,242,178
Cash payments for housing assistance (10,785,430)
Cash payments for administrative expenses (2,600,196)
Cash payments for other operating expenses (3,948,632)
Net cash and cash equivalents provided by operating activities 68,752
Cash Flows from Capital and Related Financing Activities
Receipt of capital grants 120,880
Proceeds from sale of capital assets 112,294
Purchase of capital assets (135,564)
Principal and interest paid on capital debt (252,702)
Net cash and cash equivalents used in capital and related financing activities (155,092)
Cash Flows from Investing Activities
Interest received on investments 8,060
Purchases of investment securities (3,780)
Net cash and cash equivalents provided by investing activities 4,280
Net Decrease in Cash and Cash Equivalents (82,060)
Cash and Cash Equivalents - Beginning of year 4,476,410
Cash and Cash Equivalents - End of year $ 4,394,350
Classification of Cash and Cash Equivalents
Cash and cash equivalents $ 3,923,705
Restricted cash and cash equivalents 337,401
Tenant security deposits 133,244
Total cash and cash equivalents $ 4,394,350
Reconciliation of Operating Loss to Net Cash from Operating Activities
Operating loss $ (949,880)
Adjustments to reconcile operating loss to net cash from operating activities:
Depreciation and amortization 1,205,171
Bad debts 46,702
Deferred outflows and inflows 949,608
Changes in assets and liabilities:
Receivables (63,017)
Prepaid and other assets (266,463)
Accounts payable 30,791
Accrued and other liabilities (885,583)
Security and other trust deposits 1,423
Net cash and cash equivalents provided by operating activities $ 68,752
See notes to financial statements. 11
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 1 - Nature of Business
Organization and Program Descriptions
Lansing Housing Commission (LHC or the "Commission") is a Michigan public body corporation operating
as a public housing authority under the Michigan Housing Facilities Act, MCL 125.65 to provide decent,
safe, and adequate housing for low-income program participants. The Commission owns and provides
subsidy and operation support for housing units located throughout the Lansing area. LHC's assets,
deferred outflows, liabilities, deferred inflows, net position, and changes in net position are included in its
primary government fund and include all AMPs, COCC, business activities, and programs of the
Commission. The Commission receives and administers funds from the U.S. Department of Housing and
Urban Development (HUD) and has signed an annual contributions contract (ACC) under the provisions
of the ACC and all applicable provisions of the United States Housing Act of 1937 (42 U.S.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 Housing
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 consists primarily 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 to either 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 1,673 tenant-based vouchers monthly for the year ended June 30, 2018.
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.
Recovery Agreement and Action Plan
On September 25, 2014, the Commission was designated as a troubled agency by HUD based on a
failing Public Housing Assessment System audited financial score. When a public housing agency is
determined to be substandard, it is asked to provide an assessment of its deficiencies from its own self-
diagnosis and identify solutions to recover its performance for long-term sustainability. The Commission
has completed its Public Housing Agency Recovery and Sustainability Assessment and, on January 6,
2016, entered into a recovery agreement and action plan with HUD. The Commission began submitting
monthly progress reports to the local HUD Field Office commencing on March 1, 2016 and every month
thereafter. The monthly reports will continue until the recovery agreement is terminated. These financial
statements have not been modified for this status.
12
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 1 - Nature of Business (Continued)
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.
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. The Commission has financial accountability for the nonprofit and controls its board
of directors and management. As of June 30, 2018, LHCNPDC had assets of $843,732, liabilities of
$879,491, and net deficit position of$(35,759). The total revenue and change in net position was $13,321
for the year ended June 30, 2018.
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 December 31, 2017. A complete financial report
can be obtained at its administrative offices at 419 Cherry St., Lansing, MI 48933.
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
does have 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.
13
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
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 consists primarily 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 assessed
primarily 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.
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 purchased with an
original maturity of three months or less.
Investments
Short-term investments consisted of certificates of deposit at June 30, 2018. 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$3,100 as potentially uncollectible as of June 30, 2018. Tenant bad debt for
the year ended June 30, 2018 was $46,702.
Prepaid Expenses
Prepaid items consist of certain payments to vendors that reflect costs applicable to future fiscal years.
14
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 2 - Significant Accounting Policies (Continued)
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. Additionally, $300,113 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,
2018 is $37,752. No principal or interest is due until the loan matures on January 1, 2048. The note is
secured by land and substantially all the real property owned by Oliver Gardens 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,
2018, 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 $2,500 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 is generally 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 written off entirely. During 2018, 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.
Other Noncurrent Assets
Other assets of the component unit include $22,917 of costs related to obtaining tax credits, net of
accumulated amortization of $16,806. 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, 2018 was
$1,527.
15
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 2 - Significant Accounting Policies (Continued)
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 $95,331 at June 30, 2018, of which
$14,301 is current and $81,030 is noncurrent.
Net Position
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. Net assets of the Commission are classified based on the presence or
absence of donor-imposed restrictions.
Earnings, gains, and losses on restricted net assets are classified as unrestricted unless specifically
restricted by the donor or by applicable state law. When a donor restriction expires, that is, when a
stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets
are released to unrestricted net assets.
Revenue Recognition
The Commission receives funds from certain federal and other agencies under various grant programs.
Receivables are recorded based upon amounts expended for the various programs for which funds have
not been received to the extent grant limits have not been exceeded.
The Commission leases properties to tenants under various rental arrangements. Payments from tenants
are recognized as revenue in the period during which the associated use of premises occurred.
Operating Revenue and Expenses
The Commission's operating revenue includes HUD and state/local in support of housing units and
programs, as well as other amounts received from tenants for rent and other charges for services
provided. Operating expenses are costs incurred during the operation of its primary housing activities.
Such revenue and expenses are reported when earned or incurred, respectively.
The Commission also received a ROSS (Resident Opportunities & Self Sufficiency) Grant from HUD in
fiscal year 2018 to cover the costs of the service coordinator.
16
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 2 - Significant Accounting Policies (Continued)
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 healthcare 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 Pronouncement
As of July 1, 2017, the Commission adopted GASB Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other than Pensions, which replaces GASB Statement No. 45.
As a result, the proprietary fund now includes a liability for the Commission's estimated unfunded other
postemployment benefit (OPEB) costs. Some of the changes in this net OPEB liability will be recognized
immediately as part of the OPEB expense measurement, and part will be deferred and recognized over
future years. Refer to the other postemployment benefit plan disclosure (see Note 7)for further details.
17
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 2 - Significant Accounting Policies (Continued)
The financial statements for the year ended June 30, 2017 have been restated in order to adopt GASB
Statement No. 75. The effect of this new standard was an increase in net position to record the net OPEB
liability at June 30, 2017. Additionally, the net OPEB obligation previously recorded in the proprietary fund
in accordance with GASB Statement No. 45 has been eliminated, and the overall result was an increase
in net position as of the beginning of the current fiscal year.
Primary
Government
(LHC)
Net position-Beginning of year, as previously reported $ 16,592,680
Adjustment for GASB Statement No. 75-To record the net OPEB liability 89,920
Adjustment for GASB Statement No. 75-To eliminate the net OPEB obligation (47,739)
Net position-Beginning of year, as restated $ 16,634,861
The impact on the prior year changes in net position could not be determined.
Upcoming Accounting Pronouncement
In June 2017, the Governmental Accounting Standards Board issued GASB 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, 2021.
Subsequent Events
The financial statements and related disclosures include evaluation of events up through and including
December 17, 2018, 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
(LHC) Component Unit
Cash and cash equivalents-Unrestricted $ 3,923,705 $ 36,295
Cash and cash equivalents-Restricted 337,401 331,094
Tenant security deposits-Restricted 133,244 4,807
Investments-certificates of deposit 515,924 -
Total deposits and investments $ 4,910,274 $ 372,196
18
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
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, which matures not more than 270 days after the date of purchase; obligations of
the State of Michigan or its political subdivisions, which 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 uncollateralized.
Custodial Credit Risk of Investments
Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Commission will not
be able to recover the value of its investments or collateral securities that are in the possession of an
outside party. The Commission does not have a policy for custodial credit risk. At year end, $265,924 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.
19
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 4 - Capital Assets
Capital asset activity of the Commission's governmental activities was as follows:
Primary Government
Balance Balance
July 1, 2017 Reclassifications Additions Reductions June 30, 2018
Capital assets not being
depreciated:
Land $ 1,554,771 $ - $ - $ - $ 1,554,771
Construction in progress 2,331,065 (1,552,541) 135,564 - 914,088
Total nondepreciable
assets 3,885,836 (1,552,541) 135,564 - 2,468,859
Capital assets being depreciated:
Buildings and improvements 49,742,492 1,514,238 - (33,603) 51,223,127
Machinery and equipment 1,353,588 38,303 - (78,691) 1,313,200
Total depreciable capital
assets 51,096,080 1,552,541 - (112,294) 52,536,327
Accumulated depreciation 39,419,422 - (111,503) 1,205,171 40,513,090
Net capital assets being
depreciated 11,676,658 1,552,541 111,503 (1,317,465) 12,023,237
Net capital assets $ 15,562,494 $ - $ 247,067 $ (1,317,465) $ 14,492,096
Component Unit
Balance Balance
July 1, 2017 Additions Disposals June 30, 2018
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 1,572,977 140,260 - 1,713,237
Net capital assets being
depreciated 1,933,967 (140,260) - 1,793,707
Net capital assets $ 2,619,129 $ (140,260) $ - $ 2,478,869
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 are 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, and at which time
construction in progress for that grant is placed in service and transferred to the buildings or
improvements categories.
20
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
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.
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.
Component Unit
Oliver Gardens has the following loans outstanding as of December 31, 2017 that are secured by land
and substantially all real property owned by Oliver Gardens:
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, 2017, total accumulated amortization related to these costs was$13,622.
Amortization expense was $1,527 for the year ended December 31, 2017 and has been
included as a component of interest expense on statement of activities $ 1,506,131
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 (LHC) note dated December 31, 2007 in the amount of
$300,133. The loan is held by LHC and bears an interest rate of 0.5 percent. Principal and
interest are due on the loan when it matures on January 1, 2048 300,133
Total 2,526,264
Less current portion 31,344
Long-term portion $ 2,494,920
21
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 5 - Long-term Debt (Continued)
Primary Government
Future minimum principal and interest payments on the LHC promissory note with Davenport University
to maturity for the years ending June 30 are as follows:
Years Ending Principal Interest Total
2019 $ 301,000 $ 4,000 $ 305,000
2020 58,000 2,000 60,000
2021 59,000 1,000 60,000
2022 7,762 585 8,347
Total $ 425,762 $ 7,585 $ 433,347
Future minimum principal and interest payments on LHC's lease with PNC to maturity for the years
ending June 30 are as follows:
Years Ending Amount Interest
2019 $ 131,176 $ 67,000
2020 138,000 62,000
2021 144,000 56,000
2022 150,000 50,000
2023 156,000 44,000
2024-2028 882,000 115,000
2029 96,986 1,000
Total $ 1,698,162 $ 395,000
Component Unit
Future minimum principal and interest payments on long-term debt to maturity for the years ending
December 31 for the discretely presented component unit are as follows:
Years Ending Amount Interest
2018 $ 31,344 $ 76,189
2019 32,953 74,579
2020 34,638 72,894
2021 36,411 71,121
2022 38,273 69,259
2023-2027 222,822 314,838
2028-2032 285,960 251,700
2033-2037 366,990 170,670
2038-2042 640,979 66,681
2043-2047 535,761 333,992
2048 300,133 -
Total payments $ 2,526,264 $ 1,501,923
22
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 5 - Long-term Debt (Continued)
Changes in long-term debt for the year ended June 30, 2018 (or December 31, 2017 for the discretely
presented component unit)are presented below:
Balance-
Beginning of Balance-End of
Year Additions Deletions Year Due in One Year
Primary government:
Davenport $ 474,903 $ - $ (49,141) $ 425,762 $ 300,777
PNC 1,818,706 - (120,544) 1,698,162 131,399
Total $ 2,293,609 $ - $ (169,685) $ 2,123,924 $ 432,176
Component unit:
MSHDA 1,567,741 - (29,817) 1,537,924 31,344
City of Lansing, Michigan 720,000 - - 720,000 -
LHC 300,133 - - 300,133 -
Total $ 2,587,874 $ - $ (29,817) $ 2,558,057 $ 31,344
Interest expense for the year ended June 30, 2018 was $83,017 for the primary government and interest
expense for the year ended December 31, 2017 was $90,495 for the discrete component unit, excluding
$1,298 of amortization expense of financing fees, which has been reported as a component of interest
expense on the statement of activities.
Note 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.mersofmichigan.com or in writing to MERS at 1134 Municipal Way, Lansing, MI 48917.
Benefits Provided
The Plan provides certain retirement, disability, and death benefits to plan members and beneficiaries.
PA 427 of 1984, as amended, established, and amends the benefit provisions of the participants in
MERS.
The MERS plan covers employees in the general open division; employees hired after May 1, 2012; and
exempt employees hired before May 1, 2012.
Retirement benefits for employees in the open general division are calculated as 2.25 percent of the
employee's final three-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 eight years. Employees are eligible for nonduty disability
benefits after eight 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 equal 80 times the employee's final full-year salary. An employee
who leaves service may withdraw his or her contributions plus any accumulated interest.
23
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 6 - Agent Defined Benefit Pension Plan Description (Continued)
Retirement benefits for employees hired after May 1, 2012 are calculated as 1.70 percent of the
employee's final three-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 eight years. Employees are eligible for nonduty disability benefits after eight
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 80 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 three-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 eight years. Employees are eligible for nonduty disability
benefits after eight 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 equal 80 times the employee's final full-year salary. 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, are generally established and amended by
authority of the board of commissioners, generally after negotiations of these terms with the affected
unions. Benefit terms may be subject to binding arbitration in certain circumstances.
Employees Covered by Benefit Terms
At the December 31, 2017 measurement date, the following employees were covered by the benefit
terms:
Inactive plan members or beneficiaries currently receiving benefits 38
Inactive plan members entitled to but not yet receiving benefits 13
Active plan members 27
Total employees covered by MERS 78
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, 2018, the average employee contribution rate was 5.0 percent of annual pay
for all divisions, and the Commission's average contribution rate was 23.54 percent in the open general
division and 1.30 percent under the new hires division of annual payroll.
24
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 6 - Agent Defined Benefit Pension Plan Description (Continued)
Net Pension Liability
The Commission has chosen to use the December 31 measurement date as its measurement date for
the net pension liability. The June 30, 2018 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, 2017
measurement date. The December 31, 2017 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, 2016 $ 8,886,861 $ 7,523,808 $ 1,363,053
Service cost 91,117 - 91,117
Interest 687,782 - 687,782
Differences between expected and actual experience 88,563 - 88,563
Contributions- Employer - 685,378 (685,378)
Contributions- Employee - 70,951 (70,951)
Net investment income - 1,035,066 (1,035,066)
Benefit payments, including refunds (661,395) (661,395) -
Administrative expenses - (16,381) 16,381
Miscellaneous other charges (4,268) (4,445) 177
Net changes 201,799 1,109,174 (907,375)
Balance at December 31,2017 $ 9,088,660 $ 8,632,982 $ 455,678
The plan's fiduciary net position represents 95.0 percent of the total pension liability.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the year ended June 30, 2018, the Commission recognized pension expense of $204,916. At June
30, 2018, the Commission reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred
Outflows of Deferred Inflows
Resources of Resources
Difference between expected and actual experience $ 12,060 $ -
Net difference between projected and actual earnings on pension plan
investments - 167,822
Employer contributions to the plan subsequent to the measurement date 88,283 -
Total $ 100,343 $ 167,822
25
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 6 - Agent Defined Benefit Pension Plan Description (Continued)
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows. These amounts are exclusive of the employer
contributions to the plan made subsequent to the measurement date $(88,283), which will impact the net
pension liability in fiscal year 2019, rather than pension expense.
Years Ending
June 30 Amount
2019 $ 17,991
2020 39,134
2021 (126,908)
2022 (85,979)
Actuarial Assumptions
The total pension liability in the December 31, 2017 actuarial valuation was determined using an inflation
assumption of 2.5 percent; assumed salary increases of 3.75 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 7.75 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, 2017 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 8.0 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.
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.
26
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 6 - Agent Defined Benefit Pension Plan Description (Continued)
The long-term expected rate of return on pension plan investments 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, 2017, 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 55.50 % 6.86 %
Global fixed income 18.50 1.76
Real estate 13.50 7.72
Diversifying strategies 12.50 5.50
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
8.00 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 (7.00 percent) or 1 percentage point higher (9.00 percent)
than the current rate:
1 Percent Current Discount 1 Percent
Decrease Rate Increase
(7.00%) (8.00%) (9.00%)
Net pension liability of the Commission $ 1,388,896 $ 455,678 $ (335,941)
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.
Note 7 - Other Postemployment Benefit Plan
Plan Description
The Commission provides retiree healthcare 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.
27
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 7 - Other Postemployment Benefit Plan (Continued)
Benefits Provided
The plan provides comprehensive medical and life insurance for retirees. For those retirees hired prior to
May 1, 2012, a spouse may be covered in retirement. Benefits are provided through a third-party insurer.
For retiree medical insurance benefits, the Commission pays 90.0 percent of the silver plan offered by the
third-party insurer of nonunion employees hired January 1, 2012 or later and 92.5 percent of this same
plan for union employees or employees hired December 31, 2011 or earlier. The Commission pays for all
medical insurance benefits provided to employees who retired prior to June 30, 1998. Retirees pay 100
percent of premiums for the life insurance program.
Employees Covered by Benefit Terms
The following members were covered by the benefit terms:
Date of member count July 1, 2017
Inactive plan members or beneficiaries currently receiving benefits 15
Active plan members 26
Total employees covered by the plan 41
Contributions
The contribution requirements of plan members and the Commission are established and may be
amended through commission ordinances. For the period ended on July 1, 2017 (measurement date),
total commission premiums plus implicit costs for the retiree medical program were $64,552.
Net OPEB Liability
The Commission reports OPEB expense based on funding requirements, as directed by GASB
Statement No. 45. Beginning this year, the Commission has adopted GASB Statement No. 75, which
requires the measurement of OPEB expense as it is earned, rather than as it is funded.
Changes in the net OPEB liability during the measurement year were as follows:
Increase(Decrease)
Total OPEB Plan Net Net OPEB
Liability Position Liability
Balance at July 1, 2017 $ 1,823,739 $ - $ 1,823,739
Service cost 53,470 - 53,470
Interest 59,951 - 59,951
Contributions - 65,682 (65,682)
Benefit payments (65,682) (65,682) -
Balance at June 30, 2018 $ 1,871,478 $ - $ 1,871,478
The plan's fiduciary net position represents 0.00 percent of the total OPEB liability.
28
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 7 - Other Postemployment Benefit Plan (Continued)
Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of July 1, 2017. The valuation used
the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Inflation 2.75% as of July 1, 2017 and for future periods
Healthcare cost trend rate 5.00 % annually as of July 1, 2017 and for future periods
Salary increases 3.00 % annually as of July 1, 2017 and for future periods
Investment rate of return 6.50 % net of OPEB plan investment expense, including inflation
Mortality represented by the RP-2000 employee mortality table
projected generationally with scale BB and a base year
2009 for males and females
The actuarial assumptions in the July 1, 2017 valuation were based on the results of an actuarial
experience study for the period from July 1, 2015 through July 1, 2017.
Discount Rate
The discount rate used to measure the total OPEB liability was 3.25 percent, depending on the plan
option. 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 statutorily required rates.
Based on those assumptions, the OPEB plan's fiduciary net position was not projected to be available to
make all projected future benefit payments of current active and inactive employees. Therefore, the
discount rate incorporates a municipal bond rate, which was 3.13 percent. The source of that bond rate
was S&P Municipal Bond 20-year high grade index- SAPIHG.
Investment Rate of Return
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
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 for each major asset class are summarized in the
following table:
Long-term
Expected Real
Asset Class Target Allocation Rate of Return
Domestic equity pools 30.00 % 10.00 %
International equity pools 25.00 11.50
Fixed-income pools 40.00 5.00
Alternatives 5.00 6.50
Real estate - 6.25
Total 100.00 %
29
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 7 - Other Postemployment Benefit Plan (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the Commission, calculated using the discount rate of
3.25 percent, depending on the plan option. The following also reflects what the Commission's net OPEB
liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.25 percent)
or 1 percentage point higher(4.25 percent)than the current rate:
1 Percent Current Discount 1 Percent
Decrease Rate Increase
(2.25%) (3.25%) (4.25%)
Net OPEB liability of the Commission $ 2,217,390 $ 1,871,478 $ 1,600,331
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend
The following presents the net OPEB liability of the Commission, calculated using the healthcare cost
trend rate of 5.00 percent, as well as what the net OPEB liability would be if it were calculated using a
healthcare cost trend rate that is 1 percentage point lower (4.00 percent) or 1 percentage point higher
(6.00 percent)than the current rate:
1 Percent Current Discount 1 Percent
Decrease Rate Increase
(4.00%) (5.00%) (6.00%)
Net OPEB liability of the Commission $ 1,543,833 $ 1,871,478 $ 2,301,370
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, 2018.
The collective bargaining five-year agreement between the Housing Commission Employees' and
Chapter of Local 1390.11 and Michigan Council #25, AFSCME, AFL-CIO covering approximately 60
percent of the Commission's labor force will be in place from July 1, 2014 through December 31, 2018.
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, included workers' compensation,
employee health, and accident insurance. Settled claims relating to the commercial insurance have not
exceeded the amount of insurance coverage in any of the past three fiscal years.
Note 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.
30
Lansing Housing Commission
Notes to Financial Statements
June 30, 2018
Note 10 - Concentrations (Continued)
For the year ended June 30, 2018, approximately 83 percent of the operating revenue reflected in the
primary government basic financial statements is from HUD.
31
Required Supplemental Information
32
Lansing Housing Commission
Required Supplemental Information
Schedule of Changes in the Commission's Net Pension Liability and Related
Ratios
Last Four Fiscal Years
2018 2017 2016 2015
Total Pension Liability
Service cost $ 91,117 $ 126,678 $ 114,272 $ 114,461
Interest 687,782 714,076 698,614 684,653
Changes in assumptions - (349,397) 405,966 -
Differences between expected and actual
experience 88,563 (140,946) (123,435) -
Benefit payments, including refunds (661,395) (651,805) (635,102) (624,495)
Other (4,268) (521) - -
Net Change in Total Pension Liability 201,799 (301,915) 460,315 174,619
Total Pension Liability- Beginning of year 8,886,861 9,188,776 8,728,461 8,553,842
Total Pension Liability- End of year $ 9,088,660 $ 8,886,861 $ 9,188,776 $ 8,728,461
Plan Fiduciary Net Position
Contributions- Employer $ 685,378 $ 693,689 $ 158,735 $ 215,191
Contributions- Member 70,951 67,424 55,586 37,167
Net investment income (loss) 1,035,066 743,039 (104,348) 446,261
Administrative expenses (16,381) (14,686) (15,480) (16,314)
Benefit payments, including refunds (661,395) (651,805) (635,102) (624,495)
Other (4,445) (521) - -
Net Change in Plan Fiduciary Net Position 1,109,174 837,140 (540,609) 57,810
Plan Fiduciary Net Position - Beginning of
year 7,523,808 6,686,668 7,227,277 7,169,467
Plan Fiduciary Net Position - End of year $ 8,632,982 $ 7,523,808 $ 6,686,668 $ 7,227,277
Commission's Net Pension Liability- Ending $ 455,678 $ 1,363,053 $ 2,502,108 $ 1,501,184
Plan Fiduciary Net Position as a Percentage
of Total Pension Liability 94.99 % 84.66 % 72.77 % 82.80 %
Covered Employee Payroll $ 1,304,971 $ 1,333,333 $ 1,235,367 $ 1,164,556
Commission's Net Pension Liability as a
Percentage of Covered Employee Payroll 34.92 % 102.23 % 202.54 % 128.91 %
See note to schedule of commission contributions. 33
Lansing Housing Commission
Required Supplemental Information
Schedule of Commission Contributions
Last Four Plan Years
Year Ended December 31
2017 2016 2015 2014
Actuarially determined contribution $ 133,299 $ 122,057 $ 103,079 $ 213,163
Contributions in relation to the actuarially determined contribution 685,378 693,689 158,735 215,191
Contribution excess $ (552,079) $ (571,632) $ (55,656) $ (2,028)
Covered employee payroll $ 1,304,971 $ 1,333,333 $ 1,235,367 $ 1,164,556
Contributions as a percentage of covered employee payroll 52.52 % 52.03 % 12.85 % 18.48 %
See note to schedule of commission contributions. 34
Lansing Housing Commission
Required Supplemental Information
Schedule of Changes in the Commission's OPEB Liability and Related Ratios
Last Two Fiscal Years
2018 2017
Total OPEB Liability
Service cost $ 53,470 $ 50,924
Interest 59,951 58,429
Benefit payments, including refunds (65,682) (64,552)
Net Change in Total OPEB Liability 47,739 44,801
Total OPEB Liability- Beginning of year 1,823,739 1,778,938
Total OPEB Liability- End of year $ 1,871,478 $ 1,823,739
Covered Payroll $ 2,381,121 $ 2,311,768
Total OPEB Liability as a Percentage of Covered Payroll 78.60 % 78.89 %
See note to schedule of commission contributions. 35
Lansing Housing Commission
Required Supplemental Information
Schedule of OPEB Contributions
Last Two Plan Years
Years Ended June 30
2017 2016
Actuarially determined contribution $ 148,959 $ 143,977
Contributions in relation to the actuarially determined contribution 65,682 64,552
Contribution Deficiency $ 83,277 $ 79,425
Covered Employee Payroll $ 2,381,121 $ 2,311,768
Contributions as a Percentage of Covered Employee Payroll 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
Inflation 2.75 percent per annum
Healthcare cost trend rates 6.00 percent for medical and 5.50 percent for dental for fiscal year 2013 and 5.00 percent for medical
and dental beginning in fiscal year 2014 and onward
Salary increase 3.00 percent per annum
Investment rate of return 6.50 percent, net of OPEB plan investment expense, including inflation
Retirement age 60
Mortality RP-2000 Employee Mortality Table projected generationally with scale BB and a base year 2009 for
males and females
Other information None
See note to schedule of commission contributions. 36
Lansing Housing Commission
Note to Schedule of Commission Contributions
June 30, 2018
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 23 years
Asset valuation method 10-year smoothed
Inflation 3.0 to 4.0 percent
Salary increase 4.5 percent, with merit and longevity increases ranging from 0 to 13 percent
Investment rate of return 8.0 percent
Retirement age 60
Mortality 50 percent male to 50 percent female blend of the 1994 Group Annuity
Mortality Table
Other information None
Benefit Changes
There were no changes of benefit terms in 2017.
Changes in Assumptions
There were no changes of benefit assumptions in 2017.
Changes in Size or Composition of the Covered Population
There were no significant changes in size or composition of the covered population in 2017.
37
Other Supplemental Information
38
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2018
14,871 Housing 14.896 6.1 Component
Public Housing 14.CFP Capital Supportive Business Central Office UnHs-
Project Total Fund Choice Housing State/LocalActivities Cost Center Subtotal Eliminations Total Discretely
Vouchers Program Presented
Balance Sheet
Assets
111.00 Cash-Unrestricted $ 2,084,960 $ - $ 517,083 $ - $ 116,320 $ - $ 1,073,944 $ 3,792,307 $ - $ 3,792,307 $ 36,295
113.00 Cash-Other restricted - - 337,401 - - - - 337,401 - 337,401 331,094
114.00 Cash-Tenant security deposits 133,244 - - - - - - 133,244 - 133,244 4,807
115.00 Cash-Restricted for payment of current liabilities 131,399 131,399 131,399
100.00 Total Cash 2,349,603 - 854,484 - 116,320 - 1,073,944 4,394,351 - 4,394,351 372,196
122.00 Total accounts receivable-HUD other projects 3,904 - - - - - - 3,904 - 3,904 -
124.00 Accounts receivable-Other government 3,139 - - - - - - 3,139 - 3,139 -
125.00 Total accounts receivable-Miscellaneous - - 10,643 - 214,979 - 46,172 271,794 - 271,794 1,799
126.00 Accounts receivable-Tenants-Dwelling rents 31,002 - - - - - - 31,002 - 31,002 2,354
126.10 Alowance for boub0ul accounts-Dwelling rents (3,100) - - - - - - (3,100) - (3,100) -
128.00 Accounts and notes receivable fraud recovery 809 - - - - - - 809 - 809 -
129.00 Accrued interest receivable 180 180 180
120.00 Total Receivables-Net Of Allowances For Doubtful Accounts 35,934 - 10,643 - 214,979 - 46,172 307,728 - 307,728 4,153
131.00 Investments-Unrestricted 515,924 - - - - - - 515,924 - 515,924 -
142.00 Prepaid expenses and other assets 36,071 - 3,134 - - - 2,315 41,520 - 41,520 4,460
144.00 Interprogram-Due from 879,491 879,491 (879,491)
150.00 Total Current Assets 2,937,532 - 868,261 - 331,299 - 2,001:922 6,139,014 (879,491; 5,259,523 380,809
161.00 Land 1,364,771 - - - - - 190,000 1,554,771 - 1,554,771 685,162
162.00 Buildings 50,485,156 - - - - - 737,971 51,223,127 - 51,223,127 3,318,485
163.00 Furniture-Equipment and machinery-Dwellings 904,741 - - - - - - 904,741 - 904,741 -
164.00 Furniture-Equipment and machinery-Administration 16,576 - 27,596 - - - 364,287 408,459 - 408,459 175,949
166.00 Accumulated depreciation (39,508,547) - (27,596) - - - (976,948) (40,513,091) - (40,513,091) (1,713,237)
167.00 Construction in progress 914,087 914,087 914,087 12,510
160.00 Total Fixed Assets-Net Of Accumulated Depreciation 14,176,784 - - - - - 315,310 14,492,094 - 14,492,094 2,478,869
171.00 Total notes-Loans-And mortgages receivable-Noncurrent - - - - - 743,632 249,059 992,691 - 992,691 -
174.00 Total other assets 100,100 100,100 100,100 6,111
180.00 Total Noncurrent Assets 14,176,784 - - - - 843,732 564,369 15,584,885 - 15,584,885 2,484,980
190.00 Total Assets 17,114,316 - 868261 - 331,299 843,732 2,566,291 21,723,899 (879,491) 20,844,408 2,865,789
200.00 Deferred outflow of resources 69,596 18,311 12,436 100,343 100,343
290.00 Total Assets and Deferred Outflow of Resources 17,183,912 886,572 331,299 843,732 2,578,727 21,824,242 879,491 20,944,751 2,865,789
39
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2018
14,871 Housing 14.896 6.1 Component
Public Housing 14.CFu Capitalnd Choice Supportive State/Local Subtotal Eliminations Total Business Central Office Units
-
Project Total Fu Housing Activities Cost Center Discretely
Vouchers program Presented
Liabilities
312.00 Accounts payable-90 Days $ 8,953 $ - $ 56 $ - $ - $ - S 87 $ 9,096 $ - $ 9,096 $ 5,288
321.00 Accrued wage/payroll taxes payable 26,919 - 13,549 - - - 11,498 51,966 - 51,966 69,648
322.00 Accrued compensated absences-Current portion 7,803 - 3,469 - - - 3,029 14,301 - 14,301 -
325.00 Accrued interest payable - - - - - - - - - - 152,380
333.00 Accounts payable-Other government 60,180 - - - - - - 60,180 - 60,180 17,791
341.00 Tenant security deposits 133,244 - - - - - - 133,244 - 133,244 4,807
342.00 Total deferred revenue 27,120 - - - - - 1,110 28,230 - 28,230 157
343.00 Total current portion of LTD-capital projects/mortgage revenue bonds 131,399 - - - - - 300,777 432,176 - 432,176 31,344
345.00 Other Current Liabilities - - - - - - - - - - 119,057
346.00 Accrued liabilities-Other 139,898 - 6,887 - - - 17,216 164,001 - 164,001 65,520
347.00 Interprogram-Due to - - - - - 879,491 - 879,491 (879,491) - -
348.00 Loan liability-Current 177,762
310.00 Total Current Liabilities 535,516 - 23,961 - - 879,491 333,717 1,772,685 (879,491) 893,194 643,754
351.00 Total LTD-Net of current-Capital projects/mortgage revenue bonds 1,566,763 - - - - - 124,985 1,691,748 - 1,691,748 2,494,920
353.00 Noncurrent liabilities-Other - - 53,687 - - - - 53,687 - 53,687 505,767
354.00 Accrued compensated absences-Noncurrent 44,210 - 19,658 - - - 17,162 81,030 - 81,030 -
357.00 Accrued pension and OPEB liabilities 1,439,069 639,677 248,410 2,327,156 2,327,156
350.00 Total Noncurrent Liabilities 3,050,042 713,022 390557 4,153,621 4,153,621 3,000,687
300.00 Total Liabilities 3,585,558 - 736,983 - - 879,491 724,274 5,926,306 (879,491) 5,046,815 3,644,441
400.00 Deferred inflow of resources 116,398 30,625 20,799 167,822 167,822
Equity
508.40 Invested in capital assets-Net of related debt 12,478,622 - - - - (110,452) 12,368,170 - 12,368,170 (47,395)
511.40 Restricted net assets - - 283,714 - - - - 283,714 - 283,714 -
512.40 Unrestricted net assets 1,003,334 (164,750) 331,299 (35,759) 1,944,106 3,078,230 3,078,230 (731,257)
513.00 Total Equity/Net Assets 13,481,9% - 118,964 - 331,299 (35,759) 1,833,654 15,730,114 - 15,730,114 1 (778,652)
600.00 1 Total Liabilities and EquityfNet Assets 17,183,912 886,572 331,299 843,732 2,578,727 21,824,242 879,491 20,944,751 12,865,789
40
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2018
14.8CI Housing 14.896 6.1 Component
Public Housing 14.CFP CapitalSupportive Business Central Office Unhs-
ProJectTotal Fund Choice Housing State/Local Activities Cost Center Subtotal Eliminations Total Discretely
Vouchers Program Presented
Income Statement
Revenue
70300 Net tenant rental revenue $ 1,499,488 $ - $ - $ - $ - $ - $ - $ 1,499488 $ - $ 1,499,488 $ 86,355
70400 Tenant revenue-Other 121,962 - - 121:962 121,962 25
70500 Total Tenant Revenue 1,621,450 - - - - - - 1,621,450 - 1,621,450 86,380
70600 Total HUD PHA operating grants 3,725,837 622,395 10,162,964 34,500 - - - 14,545,696 - 14,545,696 178,470
70610 Capital grants - 120,880 - - - - - 120,880 - 120,880 -
70710 Management fee - - - - - - 807,316 807,316 (807,316) -
70720 Asset management fee - - - - - - 99,960 99,960 (99,960) -
70730 Bookkeeping fee - - - - - - 72,240 72,240 (72,240) -
70750 Otherfees
70700 Total Fee Revenue - - - - - - 979,516 979,516 (979,516) - -
70800 Other government grants - - - - 1,070,450 - - 1,070,450 - 1,070,450 -
71100 Total investment income-Unrestricted 4,560 - 183 - - 3,321 - 8,064 - 8,064 15,476
71400 Total revenue fraud recovery - - 20,986 - - - - 20,986 - 20,986 -
71500 Other revenue 217,501 - 282 - - 10,000 69,296 297,079 - 297,079 -
71 600 Gain or loss on sale of fixed assets (790) (790) (790)
70000 Total Revenue 5,568,558 743,275 10,184,415 34,500 1,070,450 13,321 1,048,812 18,663,331 (979,516) 17,683,815 280,326
Expenses
91100 Administrative salaries 281,990 - 234,729 25,188 57,595 - 293,887 893,389 - 893,389 6,632
91200 Auditing fees 20,000 - 25,000 - - - 5,000 50,000 - 50,000 9,200
91300 Management fee 482,506 140,837 183,973 - - - - 807,316 (807,316) - 30,850
91310 Bookkeeping fee 72,240 - - - - - - 72,240 (72,240) - -
91400 Advertisting and marketing - - - - - - 1,272 1,272 - 1,272 -
91500 Employee benefit contributions-Administrative 283,713 - 104,977 9,312 34,972 - 159,259 592,233 - 592,233 -
91600 Office expenses 182,010 - 160,623 - 119,294 - 103:712 565,639 - 565,639 3,271
91700 Legal expense 95,310 - - - - - 1,793 97,103 - 97,103 -
91 800 Travel 1,457 - - - - - 9,485 10,942 - 10,942 -
91900 Other
91000 Total Administrative 1,419,226 140,837 709,302 34,500 211,861 - 574,408 3,090,134 (879,556) 2,210,578 49,953
92000 Asset management fee 99,960 - - - - - - 99,960 (99,960) - -
92400 Tenant services-Other 83,708 83,708 83,708
92500 Total Tenant Services 183,668 - - - - - - 83,708 - 83,708 -
93100 Water 180,816 - - - - - 788 181,604 - 181,604 12,233
93200 Electricity 220,694 - - - - - 9,750 230,444 - 230,444 37,129
93300 Gas 224,865 - 90 - - - 2,200 227,155 - 227,155 11,816
93600 Sewer 281,633 - - - - - 1,128 282,761 - 282,761 121495
93800 Other utilities expense -
93000 Total UtIIItles 908,0081 1 901 1 13,866 921,9641 921,964 1 73.673
41
Lansing Housing Commission
Financial Data Schedules
Year Ended June 30, 2018
14.871 Housing 14'896 6.1 Component
Public Housing 14.CFP CapitalSupportive Business Central Office Unhs-
Project Total Fund Choice Housing Statell-ocal Activities Cost Center Subtotal Eliminations Total Discretely
Vouchers Program Presented
94100 Ordinary maintenance and operations-Labor $ 370,120 $ - $ - $ - $ - $ - $ - $ 370,120 $ - $ 370,120 $ 2,007
94200 Ordinary maintenance and operations-Materials and other 241,962 - - - - - 115 242,077 - 242,077 301
94300 Total ordinary maintenance and operations-Contract costs 1,895,113 - 31,363 - - - 57,812 1,984288 - 1,984288 23,228
94500 Employee benefit contributions-Ordinary maintenance 236,608 236:608 236:608
94000 Total Maintenance 2,743,803 - 31,363 - - - 57,927 2,833,093 - 2,833,093 25,536
95200 Protective services-Other contract costs 11,734 - 209 - - - 617 12,560 - 12,560 -
96110 Property insurance 147,456 - - - - - 1,930 149,386 - 149,386 12,452
96120 Liability insurance 58,510 - 13,110 - - - - 71,620 - 71,620 1,425
96130 Workmens compensation 9,532 - 15,174 - - - 1,295 26,001 - 26,001 -
96140 Al other insurance 14,895 24,282 39,177 39,177 704
96100 Total Insurance Premiums 230,393 28,284 27,507 286,184 286,184 14,581
96210 Compensated absences 32,662 - 20,715 - - - 11,489 64,866 - 64,866 -
96300 Payments in lieu of taxes 55,288 - - - - - - 55,288 - 55,288 17,792
96400 Bad debt-Tenant rents 46,702 46,702 46,702
96000 Total Other General Expenses 134,652 - 20,715 - - - 11,489 166,856 - 166,856 17,792
96710 Interest of mortgage(or bonds)payable - - - - - - - - - - 91,793
96720 Interest on notes payable(short and long term) 72,158 - - - - - 10,859 83,017 - 83,017 -
96730 Amortization of bond issue costs - 1,527
96700 Total Interest Expense And Amortization Cost 72,158 - - - - - 10,859 83,017 - 83,017 93,320
96900 Total Operating Expenses 5,703,642 140,837 789,963 34,500 211,861 - 696,673 7,577,476 (979,516) 6,597,960 274,855
97000 Excess revenue over operating expenses (135,084) 602,438 9,394,452 - 858,589 13,321 352,139 11,085,855 - 11,085,855 5,471
97100 Extraordinary Maintenance - - - - - - - - - - -
97300 Total housing assistance payments - - 10,011,955 - 773,475 - - 10,785,430 - 10,785,430 -
97350 HAP Portability-In - - - - - - - - - - -
97400 Depreciation expense 1,093,645 - - - - - 111,527 1,205,172 - 1,205,172 140,260
97500 Fraud Losses - - - - - - - - - - -
97800 Dwelling units rent expense -
98000 Total Other Nonoperating Expenses 1,093,645 10,011,955 773,475 - 111,527 1119901602 11,990,602 140,260
90000 Total Expenses 6,797,287 140,837 10,801,918 34,500 985,336 - 808,200 19,568,078 (979,516) 18,588,562 415,115
10010 Operating transfers in 481,558 - - - - - - 481,558 - 481,558 -
10020 Operating transfers out (481,558) - (481,558) (481,558)
10100 Total Other Financing Sources(Uses) 481,558 (481,558) - - - - - - - - -
10000 Excess(Deficiency)Of Total Revenue Over(Under)Total
Expenses (747,171) 120,880 (617,503) 85,114 13,321 240,612 (904,747) (904,747) (134,789)
11020 Required annual debt principal payments 131,399 - - - - - 47,976 179,375 - 179,375 28,367
11030 Beginning equity 14,082,936 - 723,923 - 246,185 (49,080) 1,588,716 16,592,680 - 16,592,680 (643,863)
11040 Prior period adjustments-Equity transfers-And correction of errors 25,311 - 12,544 - - - 4,326 42,181 - 42,181 -
11170 Administrative fee equity - - - - - - - - - - -
11180 Housing assistance payments equity - - - - - - - - - - -
11 190 Unit months available 9,996 - 21,936 - - - 31,932 - 31,932 360
11210 Number of unit months leased 9,632 - 20,075 - - - 29,707 - 29,707 360
11270 Excess Cash - - - - - - - - - - -
11610 Land Purchases - - - - - - - - - - -
11 620 Building purchases - 120,880 - - - - - 120,880 - 120,880 -
11630 Furniture and Equipment-Administrative Purchases - - - - - - - - - - -
11640 Furniture and Equipment-Dwelling Purchases - - - - - - - - - - -
11650 Leashold Improvements Purchases - - - - - - - - - - -
13901 Replacement housing factor funds
42