HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENT ARY INFORMATION For the year ended June 30, 2016 with

Transcription

1 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENT ARY INFORMATION For the year ended June 3, 216 with Report of Independent Auditors and Management's Discussion and Analysis

2 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY June 3, 216 Report of Independent Auditors Management's Discussion and Analysis Consolidated Financial Statements: Table of Contents PAGE Consolidated Statement of Net Position Consolidated Statement of Revenues, Expenses, and Changes in Net Position Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Reports Required by Government Auditing Standards - Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards Reports Required by Uniform Guidance: Independent Auditors' Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by Uniform Guidance Schedule of Findings and Questioned Costs Supplementary Information - Financial Data Schedule - Consolidating Schedule of Net Asset Accounts and Consolidating Schedule of Revenues, Expenses, And Changes in Net Asset Accounts Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards Statement and certification of actual capital fund grant costs

3 Report of Independent Auditors To the Board of Commissioners of Housing Authority of the County of Monterey Salinas, California: Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of the enterprise fund and the aggregate discretely presented component units of the Housing Authority of the County of Monterey, which collectively comprise the consolidated statement of net position as of June 3, 216 and the related consolidated statements of revenues, expenses and changes in net position and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 the consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated 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. The financial statements of Monterey County Housing Inc. and Affiliate, Fanoe, Monterey, Rippling River, Haciendas, Haciendas 2, Oak Park 2, and Haciendas Senior were not audited in accordance with Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the consolidated 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 consolidated financial statements. NOVOGRADAC & COMPANY LLP P F W OFFICE 233 North Main Street, Suite 4 Walnut Creek, Calif

4 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of the enterprise fund activities and the aggregate discretely presented component units of the Housing Authority of the County of Monterey as of June 3, 216, and the changes in its net position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Report on Required Supplemental Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 5 through 2 be presented to supplement the consolidated financial statements. Such information, although not a part of the consolidated financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the consolidated financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary 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 consolidated financial statements, and other knowledge we obtained during our audit of the consolidated 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. Report on Supplemental Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements that collectively comprise the Housing Authority of the County of Monterey's financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Title 2 U.S. Code of Federal Regulations (CFR) Part 2, Uniform Administrative Requirements, Cost Principles, and Audit requirements for Federal Awards, and is not a required part of the consolidated financial statements. Further, the financial data schedules shown on pages 58 through 85 are presented for purposes of additional analysis as required by Uniform Financial Reporting Standards issued by the U.S. Department of Housing and Urban Development, and are not a required part of the consolidated financial statements.

5 Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the above described supplemental information is fairly stated in all material respects in relation to the consolidated 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 March 31, 217, on our consideration of the Housing Authority of the County of Monterey'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 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 the Housing Authority of the County of Monterey's internal control over financial reporting and compliance. w~.1~.:-c_~ March 31, 217

6 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY MANAGEMENT'S DISCUSSION AND ANALYSIS June 3, 216 This section of Housing Authority of the County of Monterey's annual financial report presents management's discussion and analysis of the Authority's financial performance during the year ended June 3, 216. The focus of Management's Discussion and Analysis ("MD&A") is on the primary government and the discretely presented component units information is only discussed when necessary to present a financial analysis of the primary government after giving consideration to the component unit's significance to the total of all discretely presented component units and that component unit's relationship with the primary government. Since the MD&A is designed to focus on the current year activities, resulting changes and currently known facts, please read it in conjunction with the Authority's consolidated financial statements, which begin on page 21. Comparisons to and analysis of the prior year are incorporated where appropriate. FINANCIAL HIGHLIGHTS The Authority's net position increased by 36,452,381 (or 39.46%) during 216. The increase is due primarily to the transfer of Low-Rent Public Housing units to discretely presented component units and increase in notes receivables from the discretely presented component units. Net Position was 128,841,454 and 92,389,73 as of June 3, 216 and 215, respectively. The Authority's profit on total ending net position was 39.46%. Total cost of all of the Authority's programs was 41,222,35 in 216 and 41,894,368 in 215. OVERVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS The Authority has chosen to present its consolidated financial statements using the reporting model for special- purpose governments engaged in only business-type activities for the primary government. This model allows all financial information for the organization to be reported in a single column in each of the financial statements of the primary government. The Authority also presents the aggregate discretely presented component units in a separate column. The consolidated financial statements include a Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net Position, Statement of Cash Flows, Combining Statement of Net Position, Notes to Consolidated Financial Statements, an Independent Auditors' Report thereon and this Management's Discussion and Analysis. Readers of these consolidated financial statements are encouraged to consider the report as a whole to obtain a complete understanding of the Authority's financial condition. Statement of Net Position - The Statement of Net Position is a report of the Authority's assets, liabilities and net position. Assets and liabilities are reported at book value, on an accrual basis as of the statement date. Assets and liabilities have been segregated between Current (expected to be liquidated or paid within one year) and Noncurrent. Net Position is reported in major categories reflecting any restriction thereon. 5

7 OVERVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Statement of Revenues, Expenses, and Changes in Net Position - The Statement of Revenues, Expenses, and Changes in Net Position presents the Authority's revenue earned and expense incurred during the period on an accrual basis. The Statement has been segregated into operating and nonoperating sections. Statement of Cash Flows - The Statement of Cash Flows presents the source and uses of cash and is segregated into operating, capital and related financing, noncapital financing and investing activities. The direct method of cash flows reporting has been used and an indirect method of calculating cash provided (used) by operations is also presented. Accounting Changes - In determining the financial reporting entity, the Authority complies with the provisions of Governmental Accounting Standards Board ("GASB") Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASE Statements No. 14 and No. 34, and includes all component units of which the Authority appointed a voting majority of the component units' board; the Authority is either able to impose its will on the component units or a financial benefit or burden relationship exists. The Authority's financial reporting entity is comprised of the following: Primary Government Discretely Presented Component Units Housing Authority of the County of Monterey Monterey County Housing, Inc. and Affiliate Benito FLC, L.P. Benito Street Affordable Housing, L.P. Fanoe Vista, L.P. Monterey Affordable Housing, L.P. Haciendas, L.P. Haciendas 2, L.P. Oak Park 1, L.P. Rippling River Affordable Housing, L.P. Tynan Affordable Housing, L.P. Haciendas Senior, L.P. Oak Park 2, L.P. South County RAD, L.P. Salinas Family RAD, L.P. East Salinas Family RAD, L.P. Gonzales Family RAD, L.P. 6

8 OVERVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Blended Component Units Tynan Village, Inc. Monterey County Housing Authority Development Corporation Housing Authority Limited Liability Company Housing Authority Limited Liability Company 2 Housing Authority Limited Liability Company 4 Rippling River Affordable Housing, LLC Soledad Affordable Housing, LLC Salinas New Markets Development Company, LLC Monterey County Affordable Housing, LLC HA RAD LLCl HARADLLC2 HARADLLC3 HARADLLC4 In determining the financial reporting entity, the Authority complies with the provisions of Governmental Accounting Standards Board (GASB) Statement No. 14, "The Financial Reporting Entity" and GASB Statement No. 39, "Determining Whether Certain Organizations are Component Units." The Authority manages all the component units, including maintaining their financial records. THE AUTHORITY'S FUNDS Business Type Funds Operating Fund - This is the Authority's main operating fund and it is always classified as major in accordance with GASB Statement No. 34. Conventional Public Housing - Under the Conventional Public Housing Program, the Authority rents units that it owns to low-income households. The Conventional Public Housing Program is operated under an Annual Contribution Contract (ACC) with HUD, and HUD provides Operating Subsidy and Capital Grant funding to enable the PHA to provide the housing at a rent that is based upon 3% of household income. The Conventional Housing program also includes the Capital Fund Program, which is the primary funding source for physical and management improvements to the Authority's properties. Housing Choice Voucher Program - Under the Housing Choice Voucher Program, the Authority administers contracts with independent landlords that own the property. The Authority subsidizes the family's rent through a Housing Assistance Payment made to the landlord. The Program is administered under an Annual Contributions Contract (ACC) with HUD. HUD provides Annual Contributions Funding to enable the Authority to structure a lease that sets the participant's rent at 3% of household income. 7

9 Non-Major Funds - In addition to the major funds above, the Authority also maintains the following non-major funds: Farm Labor Housing Fund Supportive Housing Fund Section 8 Modernization and Rehabilitation Program Fund Resident Opportunity and Self Sufficiency Program HUD Multi-Family State Funded Program Funds and Other Business Type Activity Funds 8

10 COMPARATIVE ANALYSIS Statement Qf Net Position - A comparative summary of the Authority's Statements of Net Position as of June 3, which generally reflects its financial condition, is as follows: PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Current and non-current assets 124,779,261 59,181,69 43,825,351 16,54,97 Capital assets 15,23,211 44,82, ,598, ,886,793 Total assets 139,982,472 13,263, ,423, ,427,763 Current and non-current liabilities 5,89,692 4,564,138 52,737,919 36,537,347 Long-term debt 6,51,326 6,31,68 198,877,54 117,163,862 Total liabilities 11,141,18 1,874, ,615, ,71,29 Net Position: Invested in capital assets, net of related debt 8,939,15 37,546,895 5,56,332 65,446,371 Restricted 12,93,686 3,496,741 33,872,181 5,28,734 Unrestricted 17,88,753 51,345,437 (2,12,184) (13,,551) Total net position 128,841,454 92,389,73 63,88,329 57,726,554 Major Factors Affecting the Statements of Net Position - Current year net position increased by 36,452,381 from the prior year's net position of92,389,73. Current year capital assets decreased by 28,879,611 due primarily to the net effect of depreciation expense, additions to construction in progress and sale of Low-Rent Public Housing projects to discretely presented component units. Restrictions on Net Position - The following are restrictions put on the Authority's net position as of June 3, 216: Required reserves Farm Labor Montecito Watson Portola Vista Subtotal FSS escrow account Security deposits Others Total restrictions 1,684,14 321, ,875 2,299, ,98 165,969 9,781,588 12,872,239 9

11 COMPARATIVE ANALYSIS (Continued) Statements Qf Revenues, Expenses, and Changes i!! Net ~ - A comparative summary of the Authority's Statements of Revenues, Expenses, and Changes in Net Position for the years ended June 3, which generally reflects its results of operations, is as follows: PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Revenues: Tenant rents 3,955,133 4,65,271 11,46,761 1,174, IOI HUD PHA grants 31,863,18 33,921,42 Capital grants 2,36,159 1,112,757 Investment income 883,36 793,838 55,669 47,652 Sale of low-rent public housing properties 31,88,82 Other 7,56,25 5,581,756 1,62, ,738 Total revenues 77,674,731 45,474,664 12,164,819 11,216,491 Expenses: Administrative 6,349,719 6,284,121 2,534,96 2,172,415 Tenant services 337,38 336,16 176,34 133,73 Utilities 824, ,311 92,545 83,865 Maintenance 2,15,951 2,251,85 2,17,858 1,9,952 Protective services 16,851 14,419 76,861 49,779 General 714, ,317 1,262, ,435 Insurance 49,834 4, , ,281 Housing assistance payments 28,728,26 29,342,298 Depreciation and amortization 1,466,655 1,582,251 6,69,655 6,47,81 Other 268, ,1 5,25,237 4,952,46 Total expenses 41,222,35 41,894,368 19,172,88 17,261,286 Changes in net position 36,452,381 3,58,296 (7,7,269) (6,44,795) Net position, beginning of year 92,389,73 118,147,39 57,726,554 2,812,364 Prior period adjustment (29,338,613) 47,91,74 Syndication costs (6,) Capital contributions by Limited Partners 13,89,44 13,117,911 Net position, end of year 128,841,454 92,389,73 63,88,329 57,726,554 Major Factors Affecting the Statements of Revenues, Expenses, and Changes in Net Position - Revenues increased approximately 7.81 % primarily due to the gain on sale of the Low-Rent Public Housing projects. Expenses decreased approximately 1.6% overall over the prior year primarily due to the sale of Low-Rent Public Housing projects to discretely presented component units during the year ended June 3,

12 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration Capital Assets - As of June 3, 216 the Authority had 15,23,211 invested in a variety of capital assets as reflected in the following schedule, which represents a net decrease, including additions, deletions, depreciation and transfer of Low-Rent Public Housing to discretely presented component units of 27,485,378 from prior year. The following schedule summarizes Capital Assets as of June 3: PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Housing Authority of the County of Monterey: Capital assets not being depreciated: Land 4,54,57 9,33,94 Construction in progress 82,412 1,387,157 Total capital assets not being depreciated 4,586,919 1,42,251 Capital assets being depreciated: Buildings 22,219,493 64,128,69 Equipment 1,586,232 2,661,65 Total capital assets being depreciated 23,85,725 66,79,259 Accumulated depreciation: Buildings 11,933,589 31,333,815 Equipment 1,255,844 1,793,873 Total accumulated depreciation 13,189,433 33,127,688 Total capital assets being depreciated, net - Housing Authority of the County of Monterey 1,616,292 33,662,571 Capital assets, net - Housing Authority of the County of Monterey 15,23,211 44,82,822 Monterey County Housing, Inc. and Affiliate: Land 2,464,5 2,464,5 Construction in progress Total capital assets not being depreciated 2,464,5 2,464,5 Capital assets being depreciated: Buildings 11,79,15 11,79,15 Equipment 152, ,676 Total capital assets being depreciated 11,861,781 11,861,781 Accumulated depreciation: Buildings 5,44,313 4,693,561 Equipment 131, ,135 Total accumulated depreciation 5,175,899 4,824,696 Total capital assets being depreciated, net - Monterey County Housing, Inc. and Affiliate: 6,685,882 7,37,85 Capital assets, net - Monterey County Housing, Inc. and Affiliate 9,149,932 9,51,135 11

13 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Benito FLC, LP: Capital assets being depreciated: Buildings 18,362,37 18,362,37 Equipment 167, ,755 Total capital assets being depreciated 18,529,792 18,529,792 Accumulated depreciation: Buildings 5,715,18 5,57,741 Equipment 157, ,312 Total accumulated depreciation 5,872,615 5,222,53 Total capital assets being depreciated, net - Benito FLC, LP 12,657,177 13,37,739 Capital assets, net - Benito FLC, LP 12,657,177 13,37,739 Benito Street Affordable Housing, LP: Capital assets not being depreciated: Land 1, 1, Total capital assets not being depreciated 1, 1, Capital assets being depreciated: Buildings 21,276,35 21,276,35 Equipment 38,25 38,25 Total capital assets being depreciated 21,314,6 21,314,6 Accumulated depreciation: Buildings 6,174,129 5,44,562 Equipment 48,172 38,25 Total accumulated depreciation 6,222,31 5,478,812 Total capital assets being depreciated, net - Benito Street Affordable Housing, LP 15,92,299 15,835,788 Capital assets, net - Benito Street Affordable Housing, LP 15,12,299 15,845,788 12

14 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Fanoe Vista, LP: Capital assets not being depreciated: Land 1,683,565 1,683,565 Total capital assets not being depreciated 1,683,565 1,683,565 Capital assets being depreciated: Buildings 11,353,774 11,353,774 Equipment 733, ,473 Total capital assets being depreciated 12,87,247 12,87,247 Accumulated depreciation: Buildings 2,425,124 2,15,224 Equipment 44, ,55 Total accumulated depreciation 2,865,31 2,484,279 Total capital assets being depreciated, net - Fanoe Vista, LP 9,221,946 9,62,968 Capital assets, net - Fanoe Vista, LP 1,95,511 11,286,533 Monterey Affordable Housing, LP: Capital assets not being depreciated: Land 3,895,41 3,895,41 Total capital assets not being depreciated 3,895,41 3,895,41 Capital assets being depreciated: Buildings 13,91,338 13,91,338 Equipment 1,32,739 1,32,739 Total capital assets being depreciated 14,943,77 14,943,77 Accumulated depreciation: Buildings 3,196,363 2,779,44 Equipment 645, ,456 Total accumulated depreciation 3,841,881 3,338,86 Total capital assets being depreciated, net - Monterey Affordable Housing, LP 11,11,196 11,64,217 Capital assets, net - Monterey Affordable Housing, LP 14,996,66 15,499,627 13

15 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Rippling River Affordable Housing, LP: Capital assets not being depreciated: Land 5,138,174 5,138,174 Total capital assets not being depreciated 5,138,174 5,138,174 Capital assets being depreciated: Buildings 14,954,25 14,98,62 Equipment 58,694 27,896 Total capital assets being depreciated 15,12,944 14,936,516 Accumulated depreciation: Buildings 3,632,243 3,255,74 Equipment 23,45 19,652 Total accumulated depreciation 3,655,288 3,275,392 Total capital assets being depreciated, net - Rippling River Affordable Housing, LP 11,357,656 11,661,124 Capital assets, net - Rippling River Affordable Housing, LP 16,495,83 16,799,298 Tynan Affordable Housing, LP: Capital assets not being depreciated: Land 6,7 6,7 Total capital assets not being depreciated 6,7 6,7 Capital assets being depreciated: Buildings 47,976,252 47,93,157 Equipment 496,17 496,17 Total capital assets being depreciated 48,472,359 48,426,264 Accumulated depreciation: Buildings 9,826,77 8,53,55 Equipment 313, ,278 Total accumulated depreciation 1,139,741 8,82,333 Total capital assets being depreciated, net - Tynan Affordable Housing, LP 38,332,618 39,623,931 Capital assets, net - Tynan Affordable Housing, LP 38,339,318 39,63,631 14

16 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Haciendas, LP: Capital assets not being depreciated: Land 4,8,789 4,8,789 Total capital assets not being depreciated 4,8,789 4,8,789 Capital assets being depreciated: Buildings 11,649,332 11,649,332 Equipment 697,27 697,27 Total capital assets being depreciated 12,346,539 12,346,539 Accumulated depreciation: Buildings 1,99,347 84,11 Equipment 257, ,218 Total accumulated depreciation 1,357, ,229 Total capital assets being depreciated, net - Haciendas, LP 1,989,373 11,384,31 Capital assets, net - Haciendas, LP 15,7,162 15,465,99 Oak Park 1, LP: Capital assets not being depreciated: Land 3,52,931 3,466,311 Total capital assets not being depreciated 3,52,931 3,466,311 Capital assets being depreciated: Buildings 18,965,761 18,671,841 Equipment 2,291,922 2,622,422 Total capital assets being depreciated 21,257,683 21,294,263 Accumulated depreciation: Buildings 1,266, ,948 Equipment Total accumulated depreciation 1,266, ,948 Total capital assets being depreciated, net - Oak Park I, LP 19,991,125 2,711,315 Capital assets, net - Oak Park I, LP 23,494,56 24,177,626 15

17 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS Haciendas 2, LP: Capital assets not being depreciated: Land 3,513,497 3,513,497 Total capital assets not being depreciated 3,513,497 3,513,497 Capital assets being depreciated: Buildings 13,34,584 13,34,584 Equipment 75,27 75,27 Total capital assets being depreciated 14,54,791 14,54,791 Accumulated depreciation: Buildings 998,8 54,54 Equipment Total accumulated depreciation 998,8 54,54 Total capital assets being depreciated, net - Haciendas 2, LP 13,56,711 13,514,251 Capital assets, net - Haciendas 2, LP 16,57,28 17,27,748 Oak Park 2, LP: Capital assets not being depreciated: Land 4,279,428 Construction in progress 13,27,987 Total capital assets not being depreciated 4,279,428 13,27,987 Capital assets being depreciated: Buildings 2,671,14 Equipment 345,271 Total capital assets being depreciated 21,16,285 Accumulated depreciation: Buildings 236,817 Equipment Total accumulated depreciation 236,817 Total capital assets being depreciated, net - Oak Park 2, LP 2,779,468 Capital assets, net - Oak Park 2, LP 25,58,896 13,27,987 Haciendas Seniors, LP: Capital assets not being depreciated: Construction in progress 7,988,746 3,317,582 Total capital assets not being depreciated 7,988,746 3,317,582 Capital assets, net - Haciendas Senior, LP 7,988,746 3,317,582 16

18 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS South County RAD, LP: Capital assets not being depreciated: Land 1,455, Construction in progress 1,81,68 Total capital assets not being depreciated 2,536,68 Capital assets being depreciated: Buildings 5,9, Total capital assets being depreciated 5,9, Accumulated depreciation: Buildings 1,64 Total accumulated depreciation 1,64 Total capital assets being depreciated, net - South County RAD, LP 5,79,396 Capital assets, net - South County RAD, LP 7,615,464 Salinas Family RAD, LP: Capital assets not being depreciated: Land 3,84, Construction in progress 2,125,452 Total capital assets not being depreciated 5,965,452 Capital assets being depreciated: Buildings 18,59, Total capital assets being depreciated 18,59, Accumulated depreciation: Buildings 38,729 Total accumulated depreciation 38,729 Total capital assets being depreciated, net - Salinas Family RAD, LP 18,551,271 Capital assets, net - Salinas Family RAD, LP 24,516,723 17

19 COMPARATIVE ANALYSIS (Continued) Capital Assets and Debt Administration (Continued) - PRIMARY GOVERNMENT- ENTERPRISE FUND COMPONENT UNITS East Salinas Family RAD, LP: Capital assets not being depreciated: Land 4,87, Construction in progress 2,443,656 Total capital assets not being depreciated 7,313,656 Capital assets being depreciated: Buildings 2,985, Total capital assets being depreciated 2,985, Accumulated depreciation: Buildings 43,719 Total accumulated depreciation 43,719 Total capital assets being depreciated, net - East Salinas Family RAD, LP 2,941,281 Capital assets, net - East Salinas Family RAD, LP 28,254,937 Gonzales Family RAD, LP: Capital assets not being depreciated: Land 1,44, Construction in progress 819,92 Total capital assets not being depreciated 2,259,92 Capital assets being depreciated: Buildings 3,13, Total capital assets being depreciated 3,13, Accumulated depreciation: Buildings 6,52 Total accumulated depreciation 6,52 Total capital assets being depreciated, net - Gonzales Family RAD, LP 3,123,48 Capital assets, net - Gonzales Family RAD, LP 5,382,572 Capital assets, net 15,23,211 44,82, ,598, ,886,793 This year's change in capital assets is due to: Change in accumulated depreciation 19,938,255 Transfer of Low-Rent Public Housing to discretely presented component units (48,817,866) 18

20 COMPARATIVE ANALYSIS (Continued) Debt Outstanding for Primary Government, Including Blended Component Units: Long-term debt obligations at June 3, 216 consist of the following: Notes payable to U.S. Department of Agriculture Rural Development, secured by Farm Labor Center Properties located in Salinas, Castroville, and Chualar, California. Note payable to Rockhall Funding Corporation, secured by Portola Vista Apartments property in Monterey, California. Notes payable to Department of Housing and Community Development, secured by Pueblo Del Mar property in Marina, California. Note payable to the County of Monterey, secured by the Castroville Farm Labor Center property. Note payable to California Housing Finance Agency (CHF A). The note is unsecured. Note payable to California Housing Finance Agency (CHFA). The note is unsecured. Note payable to the Housing Authority County of Monterey. The note is unsecured. This note has been eliminated in the preparation of the consolidated financial statements. Note payable to the Housing Authority County of Monterey. The note is unsecured. This note has been eliminated in the preparation of the consolidated financial statements. Note payable to the Housing Authority County of Monterey. The note is unsecured. This note has been eliminated in the preparation of the consolidated financial statements. Less notes eliminated Less current portion Total long-term debt 621,462 3,69, , ,53 15,391 7, 23,348 7, 15,391 1,8, ,87 6,51,326 19

21 FACTORS AFFECTING FUTURE PERIODS Significant factors affecting the Authority are as follows: The Authority submitted an application to HUD for conversion of all Conventional Low Rent housing units under the Rental Assistance Demonstration (RAD) program in November 213. In October 214, the Authority received conditional approval of its application. The Authority refinanced or otherwise converted all of the Conventional Low Rent Properties to either Project Based Rental Assistance or Project Based Vouchers combined with Tax Credits as of June 216. Project Based Rental Assistance subsidies will begin in January 217 in accordance with the RAD conversion. Ongoing funding reductions and program changes continue for the Housing Choice Voucher program due to the federal budget deficit. The Housing Choice Voucher program is the Authority's single largest program, and changes to the program or its funding significantly impact program participants and the Housing Authority. The potential effects of Sequestration have been temporarily put on hold due to the Federal two year budget agreement. However, Sequestration could return and further impact the program due to mandated funding reductions for future years. HUD previously transitioned Housing Assistance Payment reserves from PHA accounts to HUD held accounts. While the funds currently remain available to the Authority to fund eligible Housing Assistance Payments, HUD has indicated these funds are not to be reflected on PHA financial statements. It is unknown if the HUD held funds could be recaptured in the future or perhaps used by HUD to offset annual funding required for future Housing Assistance Payments. The Housing Authority operates properties constructed through the use of large funding instruments such as bond issues and tax credits. These properties rely on rents to meet debt service. The viability of some of these projects could be negatively impacted by reductions in the Housing Choice Voucher program. The Housing Choice Voucher program administrative fees are currently funded at 75-8% of eligibility and future on-going reductions appear likely. Without regulatory relief, this could severely impact the ability of the Housing Authority to continue to operate the program. Current restrictions on the use of Section 8 administrative fee reserves to fund operating deficits of other housing programs, such as Supportive Housing, limits the ability of the Housing Authority to compensate for the underfunding of subsidy for the programs resulting from funding proration and stagnant funding levels. The costs related to the development of new projects and the predevelopment process for potential new projects could result in significant use of funds until the projects are operational. 2

22 CONSOLIDATED FINANCIAL STATEMENTS

23 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CONSOLIDATED ST A TEMENT OF NET POSITION June 3, 216 Primary Discretely Government- Presented Enterprise Component ASSETS Fund Units CURRENT ASSETS: Cash and cash equivalents 9,738,298 6,292,238 Accounts receivable: Tenants - net 38,833 59,571 Government agencies 76,894 Related parties 9,465,374 Other - net 5,434,24 1,65,473 Interest receivable 4,216,98 16 Inventories - net 126,223 1,39 Total current assets 29,96,77 7,418,778 CAP IT AL ASSETS, net of depreciation 15,23, ,598,437 NONCURRENT ASSETS Cash and cash equivalents 12,872,239 34,721,777 Notes receivable 78,99,63 1, Other assets, net of amortization 4,363,988 1,23,27 Total noncurrent assets 95,335,29 35,925,984 TOT AL ASSETS 139,635, ,943,199 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources 347,21 427,441 Accumulated decrease in fair value of derivatives 53,148 TOT AL DEFERRED OUTFLOWS OF RESOURCES 347,21 48,589 LIABILITIES CURRENT LIABILITIES: Accounts payable: Trade 1,622,74 1,618,86 Government agencies 4,428 Accrued liabilities: Salaries 25,112 24,71 Compensated absences 363,962 42,362 Related parties 15,16,297 Other 1,265,543 1,29,654 Interest payable 63,785 11,231,568 Current portion of long-term debt 212,87 22,664,565 Total current liabilities 4,133,774 51,888,323 NONCURRENT LIABILITIES: Tenant security deposits 154,85 849,596 Long-term debt 6,51,326 I 98,877,54 Total noncurrent liabilities 6,25,41 I 199,727,136 TOT AL LIABILITIES 1,339, ,6 I 5,459 DEFERRED INFLOWS OF RESOURCES Advance receipt of income revenue 81,833 TOT AL DEFERRED INFLOWS OF RESOURCES 81,833 NET POSITION: Invested in capital assets, net of related debt 8,939,15 5,56,332 Restricted 12,93,686 33,872,181 Unrestricted I 7,88, 753 (2,12,184) TOTAL NET POSITION 128,841,454 63,88,329 see accompanying notes 21

24 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CONSOLIDATED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the year ended June 3, 216 REVENUES: HUD PHA grants Rent Other government grants Management fees Other Primary Government- Enterprise Fund 31,863,18 3,955, ,25 311,273 5,927,97 Discretely Presented Component Units 11,46,761 58, ,273 Total revenues 42,874,446 12,19,15 EXPENSES: Administration Tenant services Utilities Maintenance Protective services General Insurance 6,349, ,38 824,741 2,15,951 16, ,539 49,834 2,534,96 176,34 92,545 2,17,858 76,861 1,262, ,817 Total operating expenses before housing assistance payments 1,759,15 7,357,196 Housing assistance payments 28,728,26 Total operating expenses 39,487,41 7,357,196 OPERATING INCOME BEFORE DEPREClA TION 3,387,45 4,751,954 DEPRECIATION EXPENSE 1,424,956 6,219,84 OPERATING INCOME (LOSS) 1,962,449 (1,467,13) NONOPERATING INCOME (EXPENSE): Interest income Interest expense Amortization expense Extraordinary maintenance Casualty loss Unrealized loss on SWAP Gain on sale 883,36 (22,57) (41,699) (65,72) (1,12) 31,88,82 55,669 (5,83,652) (39,571) (69,686) 1,249 (53,148) Net nonoperating income (expense) 32,453,773 (5,54,139) ( continued) see accompanying notes 22

25 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CONSOLIDATED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION (CONTINUED) For the year ended June 3, 216 Primary Government Enterprise Fund Discretely Presented Component Units INCOME (LOSS) BEFORE CAPITAL GRANTS 34,416,222 (7,7,269) CA PIT AL GRANTS 2,36,159 CHANGES IN NET POSITION 36,452,381 (7,7,269) NET POSITION, BEGINNING OF YEAR 92,389,73 57,726,554 CAPITAL CONTRIBUTIONS DISCRETE COMPONENT UNITS 13,89,44 NET POSITION, END OF YEAR 128,841,454 63,88,329 ( concluded) see accompanying notes 23

26 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended June 3, 216 CASH FLOWS FROM OPERA TING ACTIVITIES: Cash received from (paid to): Tenants HUD Other agencies Other operating receipts Cash paid to suppliers and employees Capital grants Interest paid on debt Interest income received Cash paid for extraordinary maintenance Casualty loss Cash payments for housing assistance NET CASH PROVIDED BY OPERA TING ACTIVITIES Primary Government- Enterprise Fund 3,985,87 32,35, ,25 38,12, (11,42,64) 2,36,159 (22,57) 42,669 (65,72) (1,12) (28,728,26) 37,311,916 CASH FLOWS FROM CAP IT AL AND RELATED FINANCING ACTIVITIES: Payment of long-term debt Transfer of other assets Disposal of fixed assets NET CASH PROVIDED BY CAP IT AL AND RELATED FINANCING ACTIVITIES (271,731) (298,484) 27,454,655 26,884,44 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in note receivables Increase in related party receivables NET CASH USED IN INVESTING ACTIVITIES (55,441,75) (3,92,188) (58,533,263) NET INCREASE IN CASH AND CASH EQUIVALENTS 5,663,93 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 16,947,444 CASH AND CASH EQUIVALENTS, END OF YEAR 22,61,537 CASH AND CASH EQUIVALENTS, Unrestricted Restricted 9,738,298 12,872,239 Total 22,61,537 ( continued) see accompanying notes 24

27 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY CON SO LIDA TED STATEMENT OF CASH FLOWS For the year ended June 3, 216 RECONCILIATION OF NET POSITION TO NET CASH PROVIDED BY OPERA TING ACTIVITIES Change in net position Adjustments to reconcile change in net position to net cash provided by operating activities: Depreciation and amortization (Increase) decrease in: Accounts receivable: Tenants Government agencies Other Interest receivable Prepaid expenses and other assets Inventories Increase (decrease) in: Accounts payable: Trade Government agencies Accrued liabilities: Salaries Compensated absences Other Interest payable Advance receipt of income revenue Tenant security deposits Total adjustments NET CASH PROVIDED BY OPERA TING ACTIVITIES Primary Government- Enterprise Fund 36,452,381 1,466,655 35,23 487,188 (1,26,486) (48,434) (19,947) (5,575) 677,66 (19,89) (8,279) (98,971) 313,818 (23) (5,249) (231,162) 859,535 37,311,916 ( concluded) see accompanying notes 25

28 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CON SO LIDA TED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies Reporting Entity The Housing Authority of the County of Monterey (the "Authority") was established on March 17, 1941, by a resolution of the Monterey County Board of Supervisors. The Authority is governed by a seven member Board of Commissioners. Commissioners are appointed for terms of four years by the Monterey County Board of Supervisors, except for Tenant Commissioners which are appointed for terms of two years by the Board of Commissioners. The Authority provides housing to low income tenants in Monterey County and is subject to regulation by the United States Department of Housing and Urban Development ("HUD"), the U.S. Department of Agriculture, the California Housing Finance Agency, the California Department of Economic Opportunity, and the California Department of Housing and Community Development as to rental charges and operating methods. Substantially all of the Authority's revenues are received directly from HUD and passed through various state agencies. The Authority is not subject to Federal or State income taxes and is not required to file Federal or State income tax returns. The Authority maintains its accounting records by program. A summary of the significant programs operated by the Authority is as follows: Public and Indian Housing Program The Public and Indian Housing Program is designed to provide low-cost housing. Under this program, HUD provides funding via an annual contributions contract. These funds, combined with the rental income received from tenants, are available solely to meet the operating expenses of the program. Section 8 Housing Choice Vouchers Program The Authority administers a program of rental assistance payments to private owners on behalf of eligible low-income families under Section 8 of the Housing and Urban Development Act of The program provides payments covering the difference between the maximum rent on a dwelling unit, as approved by HUD, and the amount of rent contribution by a participating family. Public Housing Capital Fund Program The purpose of the Public Housing Capital Fund Program is to provide another source of funding to cover the cost of physical and management improvements and rehabilitation on existing low-income housing and improving the central office facilities. Funding for this program is provided by grants from HUD. Business Activities The Authority owns non-federal housing units and various interests in low income housing tax credit partnerships. Revenues earned from these activities are recorded in the Business Activities fund. 26

29 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Reporting Entity (continued) Farm Labor Housing Loans and Grants The Authority administers a Farm Labor Housing Loan program whereby such financed housing is occupied by domestic farm laborers or individuals who derive a substantial portion of their income from farm labor and their families. The loans and grants may be used for construction, repair, or purchase of year-round or seasonal housing; acquiring the necessary land and making improvements on land for housing; and developing related support facilities, small infirmaries, laundry facilities, day care centers, other essential equipment or recreation areas. State and Local Programs Periodically, the Authority administers various grants from the State of California. These activities as well as the Authority's internal service funds are reported in this fund. Resident Opportunity and Supportive Services - Service Coordinators Program The purpose of the Resident Opportunities and Self Sufficiency (ROSS) grant program is to provide funds for job training and supportive services to help participants in the Housing Choice Voucher program transition from welfare to work. ROSS also provides funding to link elderly/disabled residents to critical services which can help them continue to live independently. Supportive Housing Program The purpose of the Supportive Housing Program is to assist homeless individuals and families in the transition from homelessness and to enable them to live independently. Shelter Plus Care Program Shelter Plus Care is a program designed to provide housing and supportive services on a long-term basis for homeless persons with disabilities, (primarily those with serious mental illness, chronic problems with alcohol and/or drugs, and acquired immunodeficiency syndrome (AIDS) or related diseases) and their families who are living in places not intended for human habitation (e.g., streets) or in emergency shelters. Central Office Cost Center The Central Office Cost Center (COCC) is mandated by HUD to account for "centralized" services and functions necessary to the Authority's operations. Funding for the COCC is in the form of fees charged to other Authority programs and activities as well as to affiliate entities. The fees charged include those specified by HUD as management fees, bookkeeping fees, asset management fees and other fees for service. HUD regulates which and how fees may be charged to HUD programs. Rental Assistance Demonstration Program The Rental Assistance Demonstration Program ("RAD") was created in order to give public housing authorities ("PHA's") a powerful tool to preserve and improve public housing properties. RAD allows PHA's to leverage public and private debt and equity in order to reinvest in public housing stock. Public housing units move to a Section 8 platform with a long-term contract under which residents continued to pay 3% of their income towards rent. 27

30 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CON SO LIDA TED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Reporting Entity (continued) Consolidated Financial Statements In determining the financial reporting entity, the Authority complies with the provisions of Governmental Accounting Standards Board ("GASB") Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASE Statements No. 14 and No. 34, and includes all component units of which the Authority appointed a voting majority of the component units' board; the Authority is either able to impose its will on the component units or a financial benefit or burden relationship exists. The Authority's financial reporting entity is comprised of the following: Primary Government Housing Authority of the County of Monterey Discretely Presented Component Units The entities listed below are legally separate organizations that the nature and significance of their relationship with the Authority met the criteria for inclusion in the Authority's financial statements: Monterey County Housing Inc. and Affiliate Consists of two entities, Monterey County Housing Inc., and MCHI Affordable Acquisitions, Inc. Two of the seven members of the Board of Directors of Monterey County Housing, Inc. and Affiliate are appointed by the Authority's Board of Commissioners. The Authority also provides accounting and management services to both entities. Benito FLC, L.P. ("Benito'') Benito was formed as a limited partnership under the laws of the State of California on February 14, 26 to construct, develop, and operate an affordable housing project. Benito consists of a 73-unit, multi-family apartment complex for rental to low-income farm-worker families in Soledad, California. Benito receives management and accounting services from the Authority. Benito is eligible for low-income housing tax credits established under the program described in Section 42 of the Internal Revenue Code. Benito Street Affordable Housing, L.P. ("Benito Street'') Benito Street was formed as a limited partnership under the laws of the State of California on February 14, 26, to construct, develop, and operate a 7-unit affordable housing project, known as Benito Street Affordable Apartments. Benito Street Affordable Apartments is rented to low-income tenants and receives management and accounting services from the Authority. The Project is eligible for low-income housing tax credits established under the program described in Section 42 of the Internal Revenue Code. 28

31 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Consolidated Financial Statements (continued) Discretely Presented Component Units (continued) Fanoe Vista, L.P. ("Fanoe'J Fanoe was formed as a limited partnership under the laws of the State of California on July 1, 27 to construct, develop, and operate a 44-unit affordable housing project, known as Fanoe Road Apartments in Gonzales, California. Fanoe Road Apartments is rented to low-income tenants and is operated in a manner necessary to qualify for federal low-income housing tax credits and energy investment tax credits as required by Section 42 and Section 48, respectively, of the Internal Revenue Code. Monterey Affordable Housing, L.P. ("Monterey'J Monterey was formed as a limited partnership under the laws of the State of California on February 14, 26 to construct, develop, and operate a 52-unit affordable housing project, known as Monterey Street Apartments in Soledad, California. Monterey Street Apartments is rented to low-income tenants and is operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Rippling River Affordable Housing, L.P. ("Rippling River'J Rippling River was formed as a limited partnership under the laws of the State of California on February 3, 26 to rehabilitate, own, maintain, and operate a 79-unit affordable housing project, known as Rippling River Apartments in Carmel Valley, California. Rippling River Apartments is rented to low-income tenants and is operated in a manner necessary to qualify for federal lowincome housing tax credits as required by Section 42 of the Internal Revenue Code. Haciendas, L.P. ("Haciendas'J Haciendas was formed as a limited partnership under the laws of the State of California on June 29, 21 to construct, develop, and operate a 53-unit affordable housing project, known as Haciendas Apartments in Salinas, California. Haciendas Apartments is rented to low-income tenants and is operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Oak Park 1, L.P. ("Oak Park'J Oak Park was formed as a limited partnership under the laws of the State of California on July 1, 21 to construct, develop, and operate a 8-unit affordable housing project, known as Oak Park Apartments in Paso Robles, California. Oak Park Apartments is rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. 29

32 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, Summary of Significant Accounting Policies (continued) Consolidated Financial Statements (continued) Discretely Presented Component Units (continued) Haciendas 2, L.P. ("Haciendas 2'') Haciendas 2 was formed as a limited partnership under the laws of the State of California on June 29, 21 to construct, develop, and operate a 46-unit affordable housing project, known as Haciendas 2 Apartments in Salinas, California. Haciendas 2 Apartments is rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Oak Park 2, L.P. ("Oak Park 2 '') Oak Park 2 was formed as a limited partnership under the laws of the State of California on June 28, 212 to construct, develop, and operate a 7-unit affordable housing project, known as Oak Park Apartments II in Paso Robles, California. Oak Park Apartments II is rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Haciendas Senior, L.P. ("Haciendas Senior'') Haciendas Senior was formed as a limited partnership under the laws of the State of California on October 29, 214 to construct, develop, and operate a 41-unit affordable housing project, known as Haciendas Senior Development in Salinas, California. Haciendas Senior Development will be rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Tynan Affordable Housing, L.P. ("Tynan'') Tynan was formed as a limited partnership under the laws of the State of California on December 12, 25 to construct, develop, and operate a 171-unit, mixed use, commercial and residential project, known as Tynan Village Apartments in Salinas, California. Tynan Village Apartments is rented to low-income tenants and is operated in a manner necessary to qualify for federal lowincome housing tax credits, energy investment tax credits, and tax-exempt bonds as provided under Section 42, Section 48, and Section 142, respectively, of the Internal Revenue Code. South County RAD, L.P. ("South County RAD'') South County RAD was formed as a limited partnership under the laws of the State of California on August 1, 215 to construct, develop, and operate a 7-unit affordable housing project, known as Casa de Oro and Los Ositos in Gonzales, California. Casa de Oro and Los Ositos will be rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. 3

33 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Consolidated Financial Statements (continued) Discretely Presented Component Units (continued) Salinas Family RAD, L.P. ("Salinas Family RAD'') Salinas Family RAD was formed as a limited partnership under the laws of the State of California on August 1, 215 to construct, develop, and operate a 17-unit affordable housing project, known as Natividad Apartments, El Gin, and Northridge Plaza in Salinas, California. Natividad Apartments, El Gin, and Northridge Plaza will be rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. East Salinas Family RAD, L.P. ("East Salinas Family RAD'') East Salinas Family RAD was formed as a limited partnership under the laws of the State of California on August 1, 215 to construct, develop, and operate a 22-unit affordable housing project, known as East Salinas Family RAD in Salinas, California. The project will be rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Gonzales Family RAD, L.P. ("Gonzales Family RAD'') Gonzales Family RAD was formed as a limited partnership under the laws of the State of California on August 1, 215 to construct, develop, and operate a 3-unit affordable housing project known as Gonzales Family RAD in Gonzales, California. The project will be rented to low-income tenants and will be operated in a manner necessary to qualify for federal low-income housing tax credits as required by Section 42 of the Internal Revenue Code. Complete financial statements for each of the individual discretely presented component units may be obtained at the Authority's administrative office. Blended Component Units The entities listed below, even though legally separate, are so interrelated with the Authority that they are in substance part of the Authority, and are reported as such by "blending" the component unit's balances and transactions with those of the Authority itself. Component units that are blended into the reporting activities of the Authority are as follows: Tynan Village, Inc. Created February 11, 25, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The Corporation is general partner of Tynan Affordable Housing, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the Corporation and provides accounting and property management services to the Corporation and the Limited Partnership. 31

34 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, Summary of Significant Accounting Policies (continued) Consolidated Financial Statements (continued) Monterey County Housing Authority Development Corporation Created February 24, 25, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The Monterey County Housing Authority Development Corporation (the "Corporation") is the general partner of Benito FLC, LP, Benito Street Affordable Housing, LP and Fanoe Vista, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the Corporation and provides accounting and property management services to the Corporation and the Limited Partnerships. Housing Authority Limited Liability Company Created July 26, 27, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of Monterey Affordable Housing, L.P., Haciendas L.P., Haciendas 2, L.P. and Oak Park 1, L.P. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the Corporation and provides accounting and property management services to the Corporation and the Limited Partnerships. Rippling River Affordable Housing, LLC Created January 11, 26, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of Rippling River Affordable Housing, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the LLC and provides accounting and property management services to the Corporation and the Limited Partnership. Soledad Affordable Housing, LLC Created February 15, 26, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority will hold Resources of the Corporation and will provide accounting services to the LLC. Salinas New Markets Development Company, LLC Created April 2, 25, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority will hold Resources of the Corporation and will provide accounting services to the LLC. 32

35 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Consolidated Financial Statements (continued) Blended Component Units (Continued) Monterey County Affordable Housing, LLC Created December 12, 25, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority will hold Resources of the Corporation and will provide accounting services to the LLC. Housing Authority Limited Liability Company 2 Created September 22, 214, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of Oak Park 2, L.P. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the Corporation and provides accounting and property management services to the Corporation and the Limited Partnerships. Housing Authority Limited Liability Company 4 Created January 29, 215, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of Haciendas Seniors, L.P. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the Corporation and provides accounting and property management services to the Corporation and the Limited Partnerships. HA RADLLCJ Created July 28, 215, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of South County RAD, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the LLC and provides accounting and property management services to the Corporation and the Limited Partnership. HARADLLC2 Created July 28, 215, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of Salinas Family RAD, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the LLC and provides accounting and property management services to the Corporation and the Limited Partnership. 33

36 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, Summary of Significant Accounting Policies (continued) Consolidated Financial Statements (continued) Blended Component Units (Continued) HARADLLC3 Created July 28, 215, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of East Salinas Family RAD, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the LLC and provides accounting and property management services to the Corporation and the Limited Partnership. HARADLLC4 Created July 28, 215, to acquire, rehabilitate, develop, own and operate affordable housing and to provide related services to low, very-low and moderate-income households. The LLC is the general partner of Gonzales County RAD, LP. The Board of Directors of the Corporation also serves as the Board of Commissioners of the Authority. The Authority holds resources of the LLC and provides accounting and property management services to the Corporation and the Limited Partnership. Basis of Accounting and Financial Statement Presentation In accordance with generally accepted accounting principles ("GAAP") applicable to governmental units, the accounts of the Authority are organized into one proprietary type fund, the Enterprise Fund. Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs ( expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Net position represents the difference between assets and liabilities and is classified into the following net position categories: Invested in Capital Assets, Net of Related Debt - Invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position invested in capital assets, net of related debt excludes unspent debt proceeds. Restricted - Restricted net position are reported as restricted when there are limitations imposed on their use either through external restrictions imposed by creditors, granters or laws or regulations of other governments. Restricted resources are used first when an expense is incurred for purposes for which both restricted and unrestricted net position is available. Unrestricted - Unrestricted net position consists of net position that do not meet the definition of "invested in capital assets, net of related debt" or "restricted." 34

37 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Basis of Accounting and Financial Statement Presentation (continued) Enterprise funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an enterprise fund's principal ongoing operations. The principal operating revenues of the Authority's enterprise funds are rent charges to tenants and the rental subsidy from HUD. Operating expenses for enterprise funds include the cost of operating the Project buildings, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The Authority has adopted GASB Statement No. 2, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that Use Proprietary Fund Accounting. Accordingly, the Authority has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board ("F ASB") pronouncements and Accounting Principles Board ("APB") opinions issued on or after November 3, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. The Authority has adopted GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. GASB Statement No. 63 improves financial reporting by standardizing the presentation of deferred outflows of resources and their effect on a government's net position. The financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. New Accounting Standards Adopted The Authority adopted Statement No. 68 of the Governmental Accounting Standards Board "Accounting and Financial Reporting for Pensions. " The Statement established standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expense/ expenditures associates with pension plans of State and Local Governments. For defined benefit pensions, this Statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actual present value, and attribute that present value to periods of employee of service. In addition, this Statement details the recognition and disclosure requirements for employers with liabilities to a defined benefit pension plan and for employers whose employees are provided with defined contribution pensions. Since the Authority operates a defined contribution pension plan, the adoption of this standard did not have a material impact on its financial statements. 35

38 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, Summary of Significant Accounting Policies (continued) Basis of Accounting and Financial Statement Presentation (continued) Cash, Cash Equivalents and Investments The Authority follows the practice of pooling cash and investments. Investments are accounted for at fair market value. Interest earned as a result of pooling is distributed to the appropriate entities utilizing a formula based on the average daily balance of cash of each entity. The Authority considers highly liquid investments with an original maturity of three months or less and investments held in the Local Agency Investment Fund to be cash equivalents. Noncurrent cash and cash equivalents consist of funds that are reserved for specific projects or purposes. Receivables Receivables are accounted for using the allowance method and are presented net of allowance of 5,454. The receivables net of allowance were 38,833 at June 3, 216. Prepaid Items Payments made to vendors for goods or services that will benefit periods beyond June 3, 216, are recorded as prepaid items. Inventories Inventories are valued on an average cost basis. Inventories consist of expendable maintenance supplies held for consumption. The consumption method is used to account for inventories. Under the consumption method, inventories are recorded as assets when purchased and expensed when used. Capital Assets Fixed assets are carried at cost, except for donated items, which are carried at the fair market value at the date of donation. Some of the land values were determined using ratios of land to structure obtained from tax assessor information for the values of the parcels prior to the purchase or donation. Capital assets are defined by the Authority as assets with an initial, individual cost of more than 5, and an estimated useful life in excess of one year. Major improvements and rehabilitation are capitalized while maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Depreciation expense is computed on the straight-line basis over the estimated useful lives of the assets as follows: Land Buildings (including Site-Improvements) Equipment NIA 15-4 Years 5-7 Years Compensated Absences The Authority has accrued a liability for vacation and sick pay which has been earned, but not taken by Authority employees. 36

39 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Summary of Significant Accounting Policies (continued) Interfund Activity During the course of operations, transactions occur between individual programs that result in amounts owed between funds, which are classified as due to/from other programs. These amounts have been eliminated in the preparation of the consolidated financial statements. Restricted Net Position Certain assets may be classified as restricted net position on the statement of net position, because their use is restricted by contracts or agreements with outside third parties and lending institutions. Net position is reported as restricted when constraints placed on net position use are either: externally imposed by creditors (such as debt covenants), grantors, and contributors, or law or regulations of other governments, imposed by law through constitutional provisions or enabling legislation. Use of Restricted Resources When both restricted and unrestricted resources are available for use, it is the Authority's policy to use restricted resources first, then unrestricted resources, as they are needed. Use of Estimates The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates. Annual Contribution Contracts Annual Contribution Contracts provide that HUD shall have the authority to audit and examine the records of public housing authorities. Accordingly, final determination of the Authority's financing and contribution status for the Annual Contribution Contracts is the responsibility of HUD based upon financial reports submitted by the Authority. Economic Concentrations The Authority operates affordable housing properties in Monterey County, California. Future operations could be affected by changes in the economic or other conditions in that geographical area or by changes in Federal affordable housing subsidies or the demand of such housing. Amortization Deferred charges are recorded at cost and amortized on a straight-line basis. Permanent loan fees and capitalized leases are amortized over the life of the loan and lease term. The net amount of deferred charges is included in other assets in the Consolidated Statement of Net Position. Fair Value The carrying amount of the Authority's financial instruments including cash deposits, accounts receivable, notes receivable and certain investments closely approximates fair value. 37

40 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, 216 I. Summary of Significant Accounting Policies (continued) Investment in Limited Partnerships The Authority holds minority ownership interests in various limited partnerships whereby its maximum exposure to loss is its current investment. The Authority does not consolidate the limited partnerships since it does not have the power to direct their activities that most significantly impact their economic performance and does not have an obligation to absorb losses or the right to receive benefits that could potentially be significant to the limited partnerships. The Authority accounts for its investments in the various limited partnerships under the equity method, which requires that the investments are recorded at cost and adjusted for the Partnership's share of income or loss. Since the Authority has no obligation to fund liabilities of the limited partnerships beyond its investment, the investment may not be reduced below zero. The Authority regularly assesses its investment in limited partnerships for the existence of impairment. Impairment typically occurs when the carrying value of the Authority's investment in a limited partnership exceeds the estimated value of the investment as determined by management. The estimated value generally consists of remaining future housing tax credits and other tax benefits allocable to, and the estimated residual value if any, of the investment available to the Partnership. The residual value is estimated by management based on current economic and capital market conditions, operational results and the terms of the limited partnership's agreements which provide for distributions to the Authority upon the liquidation of the limited partnership or sale or disposition of its assets. An impairment loss has no effect on the actual fair value of the underlying property or performance of the overall investment, nor does it have any effect on the remaining low-income housing tax credits to be generated. If an investment in a limited partnership is considered to be impaired, the Authority reduces its investment in such limited partnership on the statement of revenues, expenses, and changes in net position. The Authority did not recognize an impairment loss on its investments in limited partnerships for the year ended June 3, 216. Subsequent Events Subsequent events have been evaluated through March 31, 217, which is the date the financial statements were available to be issued, and there are no events requiring disclosure. 2. Deposits and Investments Local Agencies Investment Fund (LAIF) The investment of state pooled funds is governed by state law, by policies of the Pooled Money Investment Board (PMIB) and by accepted norms for prudent fiduciary management of investments. PMIB funds may be invested in a wide range of interest bearing securities, such as Treasury notes, prime commercial paper, certain California municipal and agency obligations, highly rated corporate bonds, obligations of such agencies as Fannie Mae, and negotiable certificates of deposit. Also allowed are time deposits in California banks, savings and loans, and credit unions that have not less than a "satisfactory" CRA rating. The value of each participating dollar equals the fair value divided by the amortized cost. 38

41 2. Deposits and Investments (continued) HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, 216 Local Agencies Investment Fund (LAIF) (continued) The Authority's fair value of the position in the pool is the same as the value of the pool shares. The balance held with LAIF at June 3, 216 was 888,314, which is included in cash and cash equivalents in the accompanying Consolidated Statement of Net Position. Custodial Credit Risk - Deposits Custodial credit risk is the risk that in the event of a bank failure, the Authority's deposits may not be returned to it. The Authority has a deposit policy that complies with California Government Code Section (Public Deposit Act). As of June 3, 216, 19,11,537 of the Authority's deposits of 22,61,537 was exposed to custodial credit risk as uninsured and collateralized by the pledging bank's trust department not in the Authority's name. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents consists of funds that are reserved for specific projects or purposes. At June 3, 216, restricted cash and cash equivalents consist of the following: Housing Authority of the County of Monterey: Reserves for Portola Vista Monterey Reserves for Montecito Watson Replacement reserve funded for the USDA Rural Development Projects Security deposits FSS escrow account Others Primary Government Enterprise Fund 293, ,759 1,684,14 165, ,98 9,781,588 Total 3. Deferred Inflows of Resources Deferred inflows of resources at June 3, 216 consist of the following: Other deferred resources MCHA Development Corp. Excess payments over expenses for Migrant Farm Housing Program Total 12,872,239 76,583 4, ,833 39

42 4. Intercompany Receivables HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, 216 Intercompany receivables at June 3, 216 consist of the following: Developer fee receivable - Tynan Developer fee receivable - Benito Street Developer fee receivable - Haciendas 2 Developer fee receivable - Oak Park 1 Developer fee receivable - Oak Park 2 Developer fee receivable - South County RAD Developer fee receivable - Salinas Family RAD Developer fee receivable - East Salinas Family RAD Developer fee receivable - Gonzales Family RAD Due from South County RAD Due from Salinas Family RAD Due from East Salinas Family RAD Due from Gonzales Family RAD Due from MCHI Due from Rippling River Due from Tynan Due from Benito Due from Monterey Due from Fanoe Due to Haciendas Due to Haciendas 2 Due to Haciendas Senior Due to Oak Park Due from Oak Park 2 Due from Community Center Total intercompany receivables Accounts receivable - miscellaneous 1,871,753 1,52,11 795,675 1,4, 1,285, 282, , 625, 199,459 23,76 2,54 279,739 32,24 218,585 1,965 28,855 3,863 2, (21,19) (31,724) (63,34) (82,97) 33, , Accounts receivable - miscellaneous consist of amounts owed from managed properties and other miscellaneous sources from normal ongoing operations. Total accounts receivable - miscellaneous was 5,434,24 as of June 3, 216. The Authority believes these funds to be fully collectible and as such does not have an allowance on these funds. 4

43 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, Notes Receivable Notes receivable at June 3, 216 consists of the following: Note receivable from Rippling River. The loan is due in annual installments of principal and interest at 5% and is due May 261. The note is secured by a deed of trust. Note receivable from Monterey County Housing Authority Development Corporation. The loan is unsecured and non interest-bearing. This note has been eliminated in the preparation of the consolidated financial statements. Notes receivable from MCHI Affordable Acquisitions, Inc. for two notes it assumed when it purchased Casanova Plaza and Parkside Manor from the Authority. The notes are due in year 24 plus interest accrued at 5% per annum. Note receivable from Monterey County Housing, Inc. due in full plus accrued interest at 3% per annum on January 19, 237. Note receivable from Monterey County Housing Authority Development Corporation. The note bears interest at 3% per annum, and is due on demand. This note has been eliminated in the preparation of the consolidated financial statements. Note receivable from the Authority. The note bears interest at 3% per annum, and is due on demand. The note has been eliminated in the preparation of the consolidated financial statements. Note receivable from Haciendas. The loan is paid out of cash flow as defined in the limited partnership agreement of Haciendas and bears interest at 2.8% and is due December 268. The note is secured by a deed of trust. Note receivable from Haciendas 2. The loan is paid out of cash flow as defined in the limited partnership agreement of Haciendas and bears interest at 3% and is due March 27. The note is secured by a de,ed of trust. Note receivable from Haciendas 2. The loan is paid out of cash flow as defined in the limited partnership agreement of Haciendas and bears interest at 3% and is due March 27. The note is secured by a deed of trust. Total forward 8,7, 23,348 1,565,62 6, 7, 15,391 3,51, 3,165, ,427,645 41

44 5. Notes Receivable (continued) HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, 216 Total forward Note receivable from Haciendas Senior. The loan is paid out of cash flow as defined in the limited partnership agreement of Haciendas Senior and bears interest at applicable federal rate and is due December 271. The note is secured by a deed of trust. Note receivable from Tynan. The loan is paid out of cash flow as defined in the limited partnership agreement of Tynan and bears no interest and is due October 271. The note is secured by a deed of trust. Note receivable from Oak Park 1. The loan is paid out of cash flow as defined in the limited partnership agreement of Oak Park 1 and bears no interest. Note receivable from South County RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of South County RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. Note receivable from South County RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of South County RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. Note receivable from South County RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of South County RAD and bears interest at 1 % and is due May 271. The note is secured by a deed of trust. Note receivable from Salinas Family RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of Salinas Family RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. Note receivable from Salinas Family RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of Salinas Family RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. Total forward 18,427,645 1,5, 3,932,832 26,53 3,575,556 2,969,444 1,947,895 12,358, ,842,216 42

45 5. Notes Receivable (continued) HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, 216 Total forward 51,842,216 Note receivable from Salinas Family RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of Salinas Family RAD and bears interest at 1 % and is due May 271.The note is secured by a deed of trust. 75, Note receivable from East Salinas Family RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of East Salinas Family RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. 13,62,87 Note receivable from East Salinas Family RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of East Salinas Family RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. 7,353,826 Note receivable from East Salinas Family RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of East Salinas Family RAD and bears interest at 1 % and is due May 271.The note is secured by a deed of trust. 875, Note receivable from Gonzales County RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of Gonzales County RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. 1,215,127 Note receivable from Gonzales County RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of Gonzales County RAD and bears interest at 2.58% and is due May 271.The note is secured by a deed of trust. 3,352,58 Note receivable from Gonzales County RAD. The loan is paid out of cash flow as defined in the limited partnership agreement of Gonzales County RAD and bears interest at 1 % and is due May 271. The note is secured by a deed of trust Total 79,17,82 Less notes eliminated 1,8,739 78,99.63 Notes Receivable From Discretely Presented Component Units - The above amount includes notes receivable from the Discretely Presented Component Units of 78,99,63. 43

46 6. Defined Contribution Pension Plan HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, 216 The Authority contributes to a defined contribution plan administered by Massachusetts Mutual. A defined contribution pension plan provides benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual's account are to be determined instead of specifying the amount of benefits the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant's account, the return earned on investments of those contributions, and forfeitures of other participants' benefits that may be allocated to such participant's account. All regular, full-time, eligible employees of the Authority may participate in the pension plan from the date they are eligible. Contributions made by an employee vest immediately and contributions made by the Authority vest after 5 years of full-time employment. An employee who leaves the employment of the Authority is entitled to his or her contributions and the Authority's contributions if vesting requirements are satisfied. On August 31, 212, the original agreement between the Authority and the Service Employees International Union Local 521 (the "Union") expired. Pursuant to Resolution 2772, dated November 19, 213, the Union and the Authority came to an agreement and signed a memorandum of understanding (the "New Agreement"). Pursuant to the New Agreement, each covered employee may contribute from I. I% up to 13% of his or her gross earnings to the pension plan. Pursuant to the New Agreement, beginning one pay period after ratification by the Board of Commissioners of the Authority, as defined in the agreement, the Authority will be required to contribute an amount equal to 1.65% of the employee's gross earnings. Effective September 1, 214, the Authority's required contribution amount was reduced to 9.4% of the employee's gross earnings. Effective September 1, 215, the Authority's required contribution amount was reduced to 7.9% of the employee's gross earnings. During the year, the Authority's required and actual contributions amounted to 336,964, which was net of the premium for supplemental life insurance. Employees' required contributions amounted to 73,353, which was 1.71 % of the Authority's current year covered payroll. Employees' voluntary contributions amounted to 143,946, which was 3.35% of the Authority's current year covered payroll. 44

47 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS JUNE 3, Capital Assets The following is a summary of the changes in capital assets for the year ended June 3, 216: BALANCE ASOF ADDITIONS DELETIONS JUNE 3, 215 TRANSFERS TRANSFERS BALANCE ASOF JUNE 3, 216 Housing Authority of the County of Monterey: Capital assets not being depreciated: Land 9,33,94 Construction in progress 1,387,157 Total capital assets not being depreciated 1,42,251 Capital assets being depreciated: Buildings 64,128,69 Equipment 2,661,65 Total capital assets being depreciated 66,79,259 Accumulated depreciation: Buildings 31,333,815 Equipment 1,793,873 Total accumulated depreciation 33,127,688 Total capital assets being depreciated, net - Housing Authority of the County of Monterey 33,662,571 Capital assets, net - Housing Authority of the County of Monterey 44,82,822 (4,528,587) (1,34,745) (5,833,332) (41,99,116) (1,75,418) (42,984,534) (19,4,226) (538,29) (19,938,255) (23,46,279) (28,879,611) 4,54,57 82,412 4,586,919 22,219,493 1,586,232 23,85,725 11,933,589 1,255,844 13,189,433 1,616,292 15,23,211 During 216, Low-Rent Public Housing projects were transferred to discrete component units. As a result of the transfer, 28,879,611 of capital assets were transferred out of capital assets, net. 8. Other Assets Other assets as of June 3, 216 include: Investment in discretely presented component units Tynan commercial lease, net of amortization Loan fees, net of amortization Other development costs Total 1,2 2,921, ,824 1,256,441 4,363,988 45

48 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CON SO LIDA TED FINANCIAL ST A TEMENTS June 3, Long-Term Debt Long-term debt consists of the following at June 3, 216: Primary Government: Notes payable to U.S. Department of Agriculture Rural Development, due in combined monthly payments of 13,748 including principal and interest at 1 % per annum at various maturing dates from January 1, 27 to January 5, 237. These notes are secured by Farm Labor Center Properties located in Salinas, Castroville, and Chualar, California. Note payable to Rockhall Funding Corporation, due in monthly payments of 16,77 including interest at 3.75% per annum until August 1, 247. The note is secured by Portola Vista Housing Project property in Monterey, California. Notes payable to Department of Housing and Community Development, interest only payments at 3% per annum to the extent of residual receipts available from the operation of HOME program. These notes are secured by Pueblo Del Mar property in Marina, California. Note payable to the County of Monterey due in principal only annual payments of11,391 until July 1, 232. The note bears no interest and is secured by the Castroville Farm Labor Center property. Note payable to California Housing Finance Agency (CHF A), interest only payment at 3% per annum to the extent of residual receipts available from the operation of HELP project. The note is unsecured. Note payable to CHFA, interest only payment at 3% per annum to the extent of residual receipts available from the operation of HELP project. The note is unsecured. Notes payable to the Authority for a principal amount of 7, and 33,348. The 33,348 note is unsecured. The 7, note is secured by a deed of trust. The notes have been eliminated in the preparation of the consolidated financial statements. Total long-term debt of the Housing Authority of the County of Monterey 621,462 3,69, , ,53 15,391 7,

49 9. Long-Term Debt (Continued) HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 3, 216 Long-Term Debt of Projects of Blended Component Units: Tynan Village, Inc.: Note payable to the Housing Authority of the County of Monterey in the amount of 5,. The note bears interest at 3% per annum and is due on the maturity date, as further defined in the loan agreement. The note is secured by a deed of trust. This note has been eliminated in the preparation of the consolidated financial statements. Total Less notes eliminated Less current portion Total long-term debt ,272,935 1,8, ,87 6,51,326 Long-term debt balances and transactions for the fiscal year ended June 3, 216 are as follows: Balance Payments/ Balance Due Within June 3, 215 Additions Retirements June 3, 216 One Year Housing Authority of the County of Monterey: U.S. Dept. of Agricultural Rural Development 758, , , ,789 California Housing Finance Agency (CHFA) 865,41 59,65 85,391 Dept. of Housing & Community Development 952, ,429 County of Monterey 27,644 13, ,53 13,141 Rockhall Funding Corporation ,69, Total 6, ,131 6, ,87 47

50 9. Long-Term Debt (Continued) HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CON SO LIDA TED FINANCIAL ST A TEMENTS June 3, 216 Future payments for each of the next five years, and thereafter, consist of: Year ending June 3, Princi12al Interest ,87 145, , , , , ,44 134, , , Thereafter 5,281,327 1,926,289 Total 6,264,196 2,619,45 1. Risk Financing Total 358, , , , ,357 7,27,636 8, The Authority is exposed to various risks of loss related to torts, thefts of, damage to, and destruction of assets; errors and omissions; injuries to workers; and natural disasters. These risks are covered by the Housing Authorities Risk Retention Pool and the California Housing Workers' Compensation Authority ("CHWCA"). There have not been any significant reductions in insurance coverage compared to the previous year. Settled claims from these risks have not exceeded commercial coverage for the past three fiscal years. The Housing Authorities Risk Retention Pool ("HARRP") provides a full range of risk management services and coverages for its members. Housing Authorities from the states of California, Nevada, Oregon, and Washington are eligible to apply. As a housing authority owned "insurance entity", housing authorities can take advantage of HUD's bid waiver for becoming a HARRP covered entity. HARRP provides self-insured coverage for property, general liability, automobile liability, errors and omissions (including employment practices liability) and fidelity. The CHWCA was formed to provide workers' compensation insurance coverage for member housing authorities. At June 3, 216, there were 33 members. 11. Contingencies and Commitments The Authority receives significant financial assistance from the U.S. Government in the form of contracts and grants. Entitlement to these resources is generally contingent upon compliance with the terms and conditions of the contract or grant agreements and applicable federal regulations, including the expenditure of the resources for eligible purposes. Substantially all federal grants and contracts are subject to a financial and compliance audit under federal regulations. Disallowed costs as a result of compliance audits become a liability of the Authority. Management believes that the potential for a material liability due to future audit disallowance is remote. 48

51 12. Economic Dependency HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, 216 Both the Public Housing Authority Owned Housing Program and the Section 8 Program are economically dependent on annual contributions and grants from HUD. Both programs operate at a loss prior to receiving the contributions and grants. The Authority receives approximately 8% of its revenues from HUD. If the amount of revenues received from HUD falls below critical levels, the Authority's operating reserves could be adversely affected. 13. Leasing Activities (as Lessor) The Authority is the lessor of dwelling units mainly to low-income residents. The rents under the leases are determined generally by the resident's income as adjusted for eligible deductions regulated by HUD, although the resident may opt for a flat rent. Leases may be cancelled by the lessee at any time. The Authority may cancel the lease only for cause. Revenues associated with these leases are recorded in the consolidated financial statements and schedules as "Rent." Rent per dwelling unit generally remains consistent from year to year, but is affected by general economic conditions which impact personal income and local availability. 14. Risk Management The Authority is exposed to all common perils associated with the ownership and rental of real estate properties. A risk management program has been established to minimize loss occurrence and to transfer risk through various levels of insurance. Property, casualty, employee dishonesty and public official's liability forms are used to cover the respective perils. The Authority is exposed to various risks of loss related to torts; thefts of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Authority carries commercial insurance, including workers' compensation and employee health and accident insurance, general liability, fire and extended coverage, fidelity bond, automobile, and Director and Officers liability. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. Additionally, there have been no significant reductions in insurance coverage from the prior year. 15. Gain on Sale During May 216, the properties owned and operated in accordance with the Public and Indian Housing Program were sold to limited partnerships which are discretely presented component units in order to be rehabilitated and operated in accordance with the Rental Assistance Demonstration Program. The Authority recorded a gain in the amount of 31,88,82 as a result of the sale. 49

52 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS June 3, Litigation Las Palmas Ranch Partnership v. Housing Authority of the County of Monterey, et al. On June 9, 215, Las Palmas Ranch Partnership ("Claimant") filed a claim against the Authority for an alleged breach of contract regarding a written lease agreement (the "Lease"), dated August 14, 1982, between the Authority, the Claimant and California Department of Housing and Community Development ("HCD"). Pursuant to the Lease, the Authority leased a 5-unit residential rental housing project (the "Property") from the Claimant for an original term of 3 years which was operated pursuant to a regulatory agreement between the Authority and HCD (the "Regulatory Agreement"). Upon expiration of the Lease, the Property was to be returned to the Claimant in as good condition as the Property was upon commencement of the Lease. Claimant has filed a case with the Monterey County Superior Court for failure to return the Property in as good a condition as it was at lease commencement. Due to budget restrictions of the Regulatory Agreement, the Authority was unable to perform all of the required repairs and maintenance to restore the Property to the original condition and therefore, the Authority believes HCD is ultimately liable. The Authority has filed a cross-complaint against HCD for equitable indemnity, contribution and declaratory relief. At the time of the issuance of the Authority's financial statements for the year ended June 3, 216, the case was in the discovery phase. The financial statements do not include any adjustments that might result from the outcome of this uncertainty as it cannot be reasonably estimated what the potential risk of loss is to the Authority. 17. Supplemental Information The supplemental information has been included in order to show the consolidated financial statements of the Authority on the GAAP basis of accounting but in the format of the HUD Handbook ,Audit Guide. This is due to the fact that some supplemental information is reviewed by the field office and provides greater detail concerning the operations of the Authority. 5

53 SUPPLEMENT AL INFORMATION

54 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners of Housing Authority of the County of Monterey Salinas, California We have audited, in accordance with the 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, the consolidated financial statements of the enterprise fund and the aggregate discretely presented component units of the Housing Authority of the County of Monterey, which comprise the consolidated statement of net position as of June 3, 216, and the related consolidated statements of revenues, expenses, and changes in net position and cash flows for the year then ended, and the related notes to the consolidated financial statements, and have issued our report thereon dated March 31, 217. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Housing Authority of the County of Monterey's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Housing Authority of the County of Monterey's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Authority's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. NOVOGRADAC & COMPANY LLP P F W OFFICE 233 North Main Street, Suite 4 Walnut Creek, Calif

55 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Housing Authority of the County of Monterey's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. /l)~;~llr> Walnut Creek, California March 31, 217

56 FEDERAL A WARDS PROGRAM

57 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Commissioners of Housing Authority of the County of Monterey Salinas, California Report on Compliance for Each Major Program We have audited the Housing Authority of the County of Monterey's compliance with the types of compliance requirements described in the MB Compliance Supplement that could have a direct and material effect on each of the Authority's major federal programs for the year ended June 3, 216. The Authority's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the Housing Authority of the County of Monterey's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 2, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Housing Authority of the County of Monterey's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Housing Authority of the County of Monterey's compliance. NOVOGRADAC & COMPANY LLP P F W OFFICE 233 North Main Street, Suite 4 Walnut Creek, Calif

58 Opinion on Each Major Federal Program In our opinion, the Housing Authority of the County of Monterey complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 3, 216. Other Matters The results of our auditing procedures disclosed no instances of noncompliance, which are required to be reported in accordance with Uniform Guidance. Report on Internal Control Over Compliance Management of the Housing Authority of the County of Monterey is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Housing Authority of the County of Monterey's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Housing Authority of the County of Monterey's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this report This purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. A)~i~t-lt Walnut Creek, California March 31, 217

59 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended June 3, 216 I. Findings relating to the Financial Statement Audit as required to be reported in accordance with Generally Accepted Government Auditing Standards. A. Significant Deficiencies in Internal Control None B. Compliance Findings None C. Responses from Management None II. Findings and Questioned Costs for Federal Awards None 55

60 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended June 3, 215 I. Findings relating to the Financial Statement Audit as required to be reported in accordance with Generally Accepted Government Auditing Standards. A. Significant Deficiencies in Internal Control None B. Compliance Findings None C. Responses from Management None II. Findings and Questioned Costs for Federal Awards None 56

61 HOUSING AUTHORITY OF THE COUNTY OF MONTEREY SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended June 3, 216 I. Summary of Independent Auditor's Results Financial Statements Type of auditors' report issued: Unmodified Internal control over financial reporting: Material weakness( es) identified? Significant deficiencies identified that are not considered material weakness(es)? Noncompliance material to financial statements noted? Yes X No Yes ~ None Reported Yes X No Federal A wards Internal control over major programs: Material weakness(es) identified? Significant deficiencies identified that are not considered material weakness(es)? Yes X No Yes ~ None Reported Type of auditors' report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR section 2.516( a)? Yes X No Identification of Major Programs CFDA Number(s) Name of Federal Program or Cluster Section 8 Housing Choice Voucher Program Public Housing Capital Fund Dollar threshold used to distinguish between type A and type B programs: Auditee qualified as low-risk auditee? X Yes No 1,55,192 57

62 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Section 8 Housing Choice Vouchers Program FSS Coordinator N/CS/R Section 8 Programs Shelter Plus Care Supportive Housing Program Farm Labor Housing Loans and Grants 1.45 Ill ;ASSETS:' CURRENT ASSETS: Cash: Cash - unrestricted Cash - restricted - modernization and development Cash - other restricted Cash - tenant security deposits Cash - restricted for payment of current liability Total cash 4,212, ,98 4,837,699, o. 6,31 6,31 64,75 26, ,719., i,684,14 74,563 1,758, , :3:, ' '12'2 124' J,125-1 "125-2 \i25-3., 125-4:; 'ii( 126.J; 126.2: 127 'izg, 128.1; 129". 126: Accounts and notes receivables: Accounts receivable - PHA projects NR - HUD other projects Oper Subsidy AIR - HUD other projects Cap Fund AIR - HUo oiher projects Other Acc;c;unts recei~able - HUD other p(ojects, ACOOuilts receivable - other gove~menl. AIR - miscellaneous~ Not For PrOfii AIR _ Tni.SCfi'iaJleous - Partnership AIR- ~iscefraneous -Joint Venture AIR~ ~i ~eu~e~ ~s ~-T~ credit A1R ~ mi5eefi3neous - Other ACcoUritS f"eceivabte - miscellaneous Accounts receivable- tenants Allowance for doubtful accounts - tenants Allowance for doubtful accouo.ts ~ Other. Notes and mortgag~s ~eceivable- ctlrrent Fraud recovery ', Allowance for doubtful accounts - fraud Accrued interest receivable.toial receivables. net Ofallo~a,nces rot d~ubtful accounts O 83,27 : 83,27 '. 416,539 (416,539) 83,27 : : o. o: 8,688 8,688 8,688 o. o, ' :... 6,419', 131,,,; 132! L.. :!~:., 143.L t y;,~; Ii 145, r 15; Current investments io~cstmeots ~ u nrestricted Investments - restricted I~~est~~~t~ - Resticted for payment of Curr~~t liability i~~eri1ries Allowance for obsolete inventories Inter prog~m - due. from, Assets held for Sa'Je ci :., o I :, TOTAL CURRENT ASSETS o. NONCURRENT ASSETS: Capit8i assets: crererence detailed schedules prepafed separately) 161 t:iind : ~~1)~i~8s Fumilure~ eq~ipment & machinery - dw~ili~gs F~ITlit~re; equipment & machinef)' - adffifoistf3iion 165 ' \~~C~?~cl irllprovement~ --,.}.~.~S'w, ACCU~ui~ted depreciation 167J 16 s r Construction in Progress Infrast~Ciure i f?j~fc;pital assets. net ~fa1?cu~~1ate,~,d.eprccii:tiion 116,672...,. (i 16,672}' o', o o o: : 16,48. o i (1,783,51) o: 2,7,948 I 1,65,879 i;oi&,46 46,656 17,72.. ; cs)ii(o34)'..,.... o: 4,88,681 {171:lOf 171-2) 171-3: Other non-current assets: NOtes and mortgages receivable - non-current - Not for Profit Notes and ~ortgi:tges rece\"va~ie - non-current - P~n.efship..., Notes. ~n~.~o.~ga.&.~.~ -.~.~CeFabie - ~On-curren! - ~.oi~t Ve~t.~~i-" o',

63 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Section 8 Housing Choice Vouchers Program 14,871 FSS Coordinator 14,896 N/CS/R Section 8 Programs 14,182 Shelter Plus Care 14,238 Supportive Housing Program 14_235 Farm Labor Housing Loans and Grants 1-45,, '' 17Ii 172-! : ,, 174-2'. Notes and mortgages receivable - non-current - Tax Credit Notes and mortgages receivable - non-current - Other j,fotes and mongaies receivable - non-~urrent Notes and mortgages receivable - non-current - past due - Not for Profit Note and mortgages receivable - non-current - past due - Partnership ~oif!s arid mortg~ges r~ivable - non-curre~t - past due - Joint Venture Notes and mortgages receivable - non-current - Past due - Tax Credit Notes and mortgages receivab.le - non-current - past due - Other Notes and ffiqrtgages receivable-non-current - past due Grants ReceiV3ble ~ non current Othe~ assets - Noi for PrOfit Other assets - P~rtnership 174-iO(" 174-4,, Other assets :Tax Credit 'other assets~ other'' 174' i76-! , >, Other ass~t~ -"ioioi" venture OihCf assets Investment in Joint venture - Not For Profit ln~estment.in Joint ;erjillre - Partnership " }Jl'vestment in Joini '~e~ture - Joi~t Venture"'..... Investment in Joint venture - Tax Credit illvestment in ioilll ;enture - Other J~~i,~t'!'ent in joint ~~~iure O o-, Qi O' o-, ; ' ;, ' o" ; ' -o, or i o o-' 6 Q, ' 18 TOT AL NONCURRENT ASSETS Q, 2,7,948 4,88,681 2 DEFFERED OUTFLOW OF RESOURCES 4, TOTAL AsS.ETS and Deferred Outflow of R~sources 4,925,76 ' 6,77, , ! '331-3 ' s 34Y 347, ; fil3'.18:ci:fo ]348-3 ))348-4( z348:jii~ LIABILITIES,AND EQUITY: Liabilities: C~rrent Liabilities: sank Overdraft ACCOut1ts payable ~ 9o days Accou~ts payabl~ >, 9:o d~ys pas_t due Acc~ed wage/payr~il taxes payable ACC~ed compe~sated absences A~~rued colltingellc}' liability "icc~eci interest p.iyitbte NP: HUD PHA Programs - Operating Subsidy NP : HUD PHA Programs - Capital F~nd NP : HUD PHA Programs - Other..... ACCOU~'is payable ~ Huri iha Pro8rams A~O~nts Payabie - PHA.projeCtS..... Accounts payable - other government T ~riant sec~rity aer~siis.. CFFP -,,,,, c'apit-~i P~OJe~.isiMortgage Revenue Cu~reO"i.pO.riiot.1..?f ~~!.. debt - cap it~ pr?j~cis/~ortg.a~ r~ye~ue bo~~s ~1:1~ent porti.on.~fl~1 debt -?perating borrowings, Oth-e~ ~urrent 1i3.biihies. Accrued liabilities - other Interprogram - due to Loan Liability - current - Not for Profit Loan Liability - current - Partnership Loan Liability - current - Joint Venture Loan Liability - current - Tax Credit Loan Liability - current - Other Loan Liability - current 37,929 ci, 72)65 :, '' (i: 1,56 : '625,348 7,222 O' o, ~.t 6) ; Oi O, o - o, Q, O ci ' o, O; i, Q; 12,247 i 12,247 i ci oi Q, ss: ,955 '. 26,2 ; : '7:g44.,,o 2, , ,93 148,93 -.' o:, Q, -o

64 .. Section 8 Housing Farm Labor Housing Housmg Authority of the County of Monterey Choice Vouchers FSS Coordinator N/CS/R Section 8 Shelter Plus Care Supportive Housing Loans and Grants CA 33 JUNE 3, 216 Program Programs Program TOTALCURRENl.-LIABILITIES 1.437,324 12,594 1,467, ,62 NONCURRENT LIABILITIES: js J- IO Long-term debt : CFFP O O O O O 351-2" Long-term debt -Capital Projects/Mortgage Revenue O O O 952, , Long-Term Debt, Net of Current - Capital Projects/Mortgage Revenue O O ; 952, , Long-term debt, net of current - Oper~ting b~rrowings O O O O O 353 Non-current liabilities- other O O O O O 354, Accrued Compensated Absebces - non current O O O O O i , Loan Liability- non current - Not For Profit O O O O O ': Loan Liability - non current,_ Partnership O O O O O, i Loan ii8bi!ity - non current - Joint Venture O O o : LOiin Liabi.lity - non current - Tax Credft O O O O ; Loan Liability - non current - Other -- -\ f'" 35'5 Loan Liability - 'non?1:l'rrent O O O O O O 356 FASB 5 Liabilities O O O O 357_ Acrued Pension and OPEB Liability O O O O 35 TOTAL NONCl.JRRENT LIABILITIES O O O O 952, ,35 3 TOTAL LIABILITIES 1,437,324 O 12,594 2,419, ,97 Deferred Revenues Oper Subsidy o i O O O Deferred Revenues Capita] Fund '6 Defe;ed Revenues Other 93 : 417, 4 DEFERRED INFLOW OF RESOURCES 93 O O O. EQUITY: 58.3 NOrispf!~dable Fund Balance 58.4 Netinvested in Capital Assets O. O O : 1,748,519 3,272,716 : 59.3 Restricied Fund Balance O O O ; -. 5 I.3 Comit"i ed fund Balance O O O ' Assigned Fund Balance O O O : _ o R~strict;d,Net Position 441 : ; 64,699 (685, , Unassigned fund Balance O '. ' Unrestricted Net Position 3,487,218 (1,434,817) -844,89 m;' TTAL EQUIT\'.MET ASSETS 3,487,659 o o 954,41 5,83,6 i;oot' TOTAL LIABILITIES; DEFERRED INFLOWS AiiDEQUITY 4,925,76. 14,732 3,374,696, 6,77,379, ,,, Proofof concept O O O O O C REVENUE: L 73 Net tenant rental revenue O O 13 l;o58 83,87 * 74 Tenant revenue - other O O i 13,665 3,17 f _75: Total tenant reve;~e" : I44,723, 833, IOr HUD PHAgrants--Ho~sing Asst Payments 27,736,279 77,481 i 76-2! - HUD PHA gra~ts~ Administrative fees earned 3,46,135 6, ,C HUD PHA grants: FSS Coordinator - - _ ,425 - O O O. 76:4'."' HUD PHA granis ~Aciu;;, independe~i i,ublic'iicct audit ccsts O ( - HUD PHA gra~ts - Total preliminary fees earned O O ' '. 76-C)6ot HUD PHA granis - interest earned. on "advances O O O O O ; 166qo-6' HUD PHA g~an.~s - Adffi_i~_"fee.. calculation _d~~cripti_on O O O ;.. ~. ~ HUD PHA operating grants.. '' "o',' 31,653! _, 76 HUD PHA operating grants 3,782,414 31, IOi CapitaiGrants O ioiio' Management Fee - HACM O O O O :. ;i1io Asset Ma~ag~m~.!1.!.. ~-~~---, "', 'o ''.' '.

65 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Section 8 Housing Choice Vouchers Program 14,871 FSS Coordinator 14,896 Farm Labor Housing N/CS/R Section 8 Shelter Plus Care Supportive Housing Loans and Grants Programs 14,182 14,238 Program DA IO 71 fo JOO IO 714-IO 7i4-2' 714 Bookkeeping Fee Front Line Service Fee Other Fees Total Fee Revenue Other government grants (must be anajyzed individually) Investment income - unrestricted - HAP ln~estment iilcoltle - unrestricteci - Admin fee Investment iocome - unrestricied Investment income - unrestricted Mortgage interest income Proceeds from dispostion of a~set~ ~eld for sale Cost of sale assets F;aud ~e~ovef)''"~" HAP F;a~d recovery~- Admin Fee. Fraud recovery i.. 71?~O(. '..<?t.~~-~ r~ve~!-1~ V 716, Gain or Joss on sale of fixed assets 72-IO Investment income - restricted - HAP 126-2~ "investment income - restricted - Admin Fee r-,, 72of" "1~~e.St~ent income - restricted 'in~estment incoffie - restricted 7,168 7,168 53,789 53,789 17,578, 33,87, ', 88,68, Q, 53,534 o o'' 3,184 O' 3,184 7 TOTAL REVENUE v v, m,,,,~,. 3,93,967 i 137,425 83, ,659 ' 978,2 ;EXPENSES: Administrative 9i 1 912, ~2 91}, <jjjji( / 916' 917} iiisoo' 918IO;;, ]9'. 91'!'' '92 F ) ;. 92IOO it;;~~ Administrative salaries Auciiti~g fces Managemeflt fee - Pl-IA Ma~agement fee - Third Party Managemelli"Fee Bookkeeping Fee Ad~e rt'isitlg and Marketing E;PfoY~' bellefit contributions- administrative oftfce ExPenSes Legal Expense Travel Allocated Overhead Other Total Op_~.r.~_;i~&.. :... ~A~illiStrative Asset M3ag_e~~~1Jee Tenant services Tenant' se~tces : sa1~'ri~s Relocation costs EmplOyee 1:,enefit coniri.buiions- tenant services. Tenant ~IViCeS ~ other Tot3i Teflant servi~es l,i5f382, 53, ,i56..,.,.. ~ 477,156 ' 298,219 : 1,794 41{428, 3ii,5i6 18,56 13,6 2,849,823 3o}no... ioo,,ii6 1,63 47,166 61, ,8 ' 8,3 1,452 33,6 92,94, 1,452 33,6 92,94 o, ,1 2( ,3 7,343 : 2,453 ' ' fo4 l,644, : ii 18 ' 4,37, 6 fi:is 1,548 4,673 utilities 931 <>[ 932' 933, 934' water'', ~-1~-~~ity Gas F'uer "i.~bo~ Q, 3.6., ,254 I 4,213 12,sl<:i'., 1,263,.. 8,533; o '1 O' o ii''',

66 Section 8 Housing Farm Labor Housing Housing Authority of the County of Monterey Choice Vouchers FSS Coordinator NICSIR Section 8 Shelter Plus Care Supportive Housing Loans and Grants CA33 JUNE 3, 216 Program Programs Program Sewer 3,884 26, Employee benefit contributions- utilities : 938 Other utilities expense o: <moo" Total Utilities. 73,329 89,69 Ordinary rnainte!)ance &_ operation 941 Ordinary mai~t~~ance ~nd ~p-~rations - labor 13,37 13, Ordinary maintenance and operations - materials & other o_' 31,56 45, Ordinary maintenance and operations contracts - Garbage and trash ' , :2 Ordinary m~i,~tena~ce an~?~~~~tions ~ont~fl,c!~. - J:!.eati,ng ~~~,-~~~in~,, Ordinary maintenanc~ ~nd_ operations contracts - Snow Removal Ordinary main_te.~.a~ce a~~ operations contracts - Elevator Maintenance o Ordinary maintenance and operations contracts - Landscape & Grounds 11,685 23,66, Or~inary maintenance and operations contracts - Unit Turnaround Ordinary maintenance and operations contracts - Electrical : o: Ordinary maintenance and operations contracts - Plumbing t,65 2, Ofdinary maintenance and operations contracts - Extermination ' 1,69 2,93 ; 943-toO ordinary maint~~.'~!1c~ ~,i:id.?p,eea~i ~~~ ~'?,~~.ici.s - 1an!!ci~~h.,., ci' 21,982 1, Ordinary mai.i:it~.~ance.~~~ ~p~r~tio_i:i~.. ~.?.~tt~~t.~ -. ~ou~i~.7.. ~~i~t.ena~ce ci 6,977 3, qrd_\~ary maintenance ~~d ~P~.~~!.!~~.s.. ~.nt~~c.ts. -. Mi~~... 1,732 9, Ordinary maintenance ~~~ operati?n_s ~?~~~acts 79, , ' -~mployee benefit.coi:i.~ri~~~\1?.ns- -~~~.i~~-ry maintenance O 4i , Total Maintenance o, o. 255, ,125 Protective services 951 Protective services - labor o: 952- Protective services- Oth"er contract costs 1, Protective services - Other i '955 Employee ~ene~t ~-~-i~}~~.~ons- prot~ctive services o'l 95 Total Protective Services 1,235 : 318 G_en_e~~I, expenses 9611:- Property Insurance o1 6,19-9, Liability Insurance 17,213 : s 3 3,462 8, Wo.rkmen's Compe.~,~~!ion 2, ,88 18, :,.. AH other Insurance 19,114. it 4 2,14 3);34 ', 961: T otaj Insurance Premiums 56,814 o ,591 39, : 9t~er general expen~s, 12,683 ; 2,49 7, '" Compensated absences o 962 PaytTI~~ts in lieu of taxes sad debt - tenant rents 5,918 (24) 962 Bad debt- i-riorlgages 962 Bad debt - other o, 962 S~v~~~~~ expe~se, : 962 TQ! ai qiher General Expense 12,683 ' 394! 9671 interest o~.~o~&.isi.(o~ ~~~~'.~) P~y ~ble Interest on Notes Payable (Short and Long Term) O: 28,651 6,985 i... ~ 9673 AmortiZ8tion Or sood 1Ssu e Costs. '. 967: 'fotai Ill!l:~l:~!~~~pei:i~ ari(f~o-rtiza~i~~.~~s,!. : ' 28,651 6, oor - TOTAL OPERATING EXPENSES 2,961, ,425 ; t 1,51 671,13 757, EXCESS OPERA TING REVENUE OVER OPERA TING EXPENSES 27,969,452 ' 72,178 i (211,471) 22,69

67 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Section 8 Housing Choice Vouchers FSS Coordinator Program 14, Farm Labor Housing NICSIR Section 8 Shelter Plus Care Supportive Housing Loans and Grants Programs Program 14, ' 972' 973-], 973-2, i :: Extraordinary maintenance c as~alty losses - non capitalized Mllifi.Siream l &5 Year HOOleow~e~ship Litigation Hope VI - Section 8 Ten ant Protection..., Prt3bility Out FS~f"E.Scrow Deposits All Other "Special" - FUP, NED Etc All Other Tot~) ~~using Assitance Payments, ' 39,62 97: , ,41 1,59,29, '25,667,29 28,629,413 ' O 'o 72,87 72,87 o: 9735; HAP l'<>rtability-ln o, 974 ' 975' 976: 977:: 978: Dei,~'eciaiion expense, Fraud losses ca"f)iiat o utlays - Govemmnental Funds b~bi}rinciple Pay~.e~\: ~.Governmental Funds... P.iemng units rent e~pen_se loi( ,58. o"' - o : iioofo TOTAL EXPENsEs OTHER FINANCING SOURCES (USES) 11, Op~rating lraosfers in.. i 2 6i,er3ling transfers O~t 13-~ Operating t_ransfe_r~ fyo~to - Not for Profit to(ff-2 Operating transfers'iro~to - Partnership 13-3 Operating transfers from/to - Joint Venture 13-4 OJ)eratini tf3flsfers from/to - Tax Creci"it 13-5 Operating transfers fromito - Other I oo3o.9p~~~t1.ng ~ransfer~)fo~t.t.o prim~ry ~~vernment I 4... operating. transfers fro~to component unit 15 proceeds from Notes: Loans, and Bonds I 6. ~r~ceed.~/forri Property. Sal~S " ' J~t~~O~d\~~I)' ltem~.(~'et g~in/los~), 18 Speciafltems (net gain/loss) Inter AMP. Excess Cash Transfer In 192, 193 ]94 Inter AMP Excess Cash.Transfer Out Transfers fro~ Program io AMP '1\~_ns_r~:r rrom AMP to.p~ogram,.lojoo TOT AL 'j'hell FINANCING SOURCES (l)_~es). I EXCESS (DEFICIENCY) OF TOT AL REVENUE OVER (UNDER) TOT AL EXPENSES MEMO ACCOUNT INFORMATION 112, I 14-2 I i4:o:io' I i4-4j ] ]4~5ii' I 14-6' I j4i): : Require<f ~~~al Debt Priflcipal Payments Begiflning equity..... Prior period. ~~justments ~ describe Prior period adjust~ents - describe ~~?.r reri_o{a~j ~stnients -. ~escri.be capital COnlribl.ltions - LPs Prior p~riod.idj~stments - de.~crib~ Prior perioct ac11~st'inents - describe Equity tra:~sfe~ EQ~itY transrers EQlliiY transfers.. ~quity.. lransfer~ 31,59, ,425 O' ' ' o. : 6 : (659,961) 4,147,62 O' o o' o : o' 84,38 78,79 i 94,37 ', ci o: O' O 37,632 - (57,713) 2,767 1,274,821 fjt\{1iii i ' o,... ~...! 'o O, ' i>''''' 6 57,713 o, or ' : -- ~.. ' ; --..

68 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Section 8 Housing Choice Vouchers Program 14,871 FSS Coordinator 14,896 N/CS/R Section 8 Programs 14,182 Shelter Plus Care Supportive Housing Program Farm Labor Housing Loans and Grants 1A5 114-l loc : ' Equity transf~rs Prior period adjustments, equity transfers and correctio1:1, ~~ errors Change~ in. ~?.rnpensat~ A~s.~nce ~alance Changes in Co~tinieni Liability Balance ChangeS in. Ullrec8iiized Pension "i f3nsition Liab c~~~~es in ~pedai Term/s~\;~r~nc~ Bene.fi!S Liab -ch~~ses in All~~ ~"~ for D~u~i~l A.~t, - Dwelling Ch~nges in ~l~~~~~e ror D~~~tful Acct - Other 57,713. o, IOC I I 17-3 I 117-4' I 1 I 7-45 I II I II 7-6 I I 17-8 I I 17-9 I I )?o'.95 I I 17-1 I I 17-11', I I 17-1 JO, I I 17-2\ I I 17:oo:iJ 1117:oost II HOUSING CHOICE VOUCHER PROGRAM ONLY Administrative Fee Equity - Beginning BaJance Ad~iJliStrati~e pee R.e~enue Hard to House Fee R~venue FSS Coordinator Ch-ant, Audit Costs Investment Income Fraud Recovery Income Other Revenue Comment for Other Revenue Total Admin Fee Revenues Total Operating Expenses Depreciation Housing Assistance Payment Portability in Other Expenses ColTirriefld Oi-. Othef'"EXpense TOtarE;penses, ',-, M, Net Ad;:;;iOisira"tive Fee AciminiStf.iifVe Fee Equity - Ending Balance Pre-24 Administrative Fee Resetves Post:23 Administrative Fee ReSeives 3,514,959 3,46,135. o,.. 7,168 53,789,.. o' 3, 1~7,92 2,961,515 c, ' iii 2,961,515 i. 145,577 3,66,536 3,66,536. ii O ii 'o. ii Cl o: o o., Q. o' ci o. 'o o. ) ci: o. o O, o; : o' O' o, 1118:1! JJiso: , I iis-2 I Jiiio~frii( Ii 18:cmF ttousirlg As s1s.ta"oce Payments Eqtii~y ~ ~~gi~tliflg s aiance "~?~~T11.''.~~s.\~an'ce Payment ~ev~n.u.e.t' h.,., ' FraUcf"Recovery Revenue... Other Revenue COmments For Other Revenue,,......,.,,, Investment Income I 1 1ifo~jQ:.. Total HoLISi~g AssiS~nta~e Payments.Revenues 1 i""f8~8,, Hollsing AS"Sistan ce payments.... I iis~9oi Other Expenses 1118o-9'i,", Comm~fltS fof Other Expenses 1 iiso~ i oc? Total Ho~Sfng AsSiS3~iace p~~~~t Expenses 1 i"i&-2} Nei ttou Sing-.(sSistance P.iYments... 1 i\8~o3, ",= ~h~~~i,~g }.ssist~nce Pa~e~t~--~9~I~Y.,-, ~nding Balance 1118 Ho~Sin8 Assistance Payments 119ot. changes ill AJlow.inc~ foi- DUbifu1i ).. ccounts - DweliiOg ReTliS. i 1 "i OO:. canges in allowance rof DOubfuiL,\ccollnts - Other io,"'administrative Fee Equity 1118 ' HOusing Assitance Payments Equity i" 1 19: Unit months available i"i":219 :,... Numbe/of Ullit months leased 632,661 27,736,279 53,789 33,87 I) 2i,82:i,8'i5. 28:629:413. i(629,413 (85,538) (172,876) 54,48 : 39)64; 6 O; 'o ;,.~:r i cit ' ; ii' 6 "''' o.,, o. ' O' 168 i61 o Q, O' 528 o o Q, o.. J o,

69 Housing Authority of the County of Monterey PIH Drug Elimination State/Local (HELP & Comp Grant Program Low Rent Public CA33 JUNE 3, 216 Program Migrant) Business Activities Blended Components Housing 14.85a ASSETS: CURRENT ASSETS: Cash: Ill Cash - unrestricted 66,419 3,51, , Cash - restricted - modernization and development, 13 Cash - other restricted 422,71 8,719, Cash - tenant security deposits 9,59 9,13 16, ~a.sh - restricted for payment of current liability 1 Total cash 497,999 12,23, ,311 Accounts and notes receivables: 121.~.ccounts receivabie ~ P'i-IA projects.' AIR - HUD other projects Oper Subsidy AIR - HUD other projects Cap Fund NR - HUD other proje~t_s Other o. 122 ~~COl:}t:its receivable - Hljp o.~~-~~- P~'?.J~ts o; 124 ~~c~unis receiv3ble -?th~r ~v~rn~-~~t 68,26 j.' AIR - miscellaneous - Not For Profit ci :125-2 AIR - '!liscellane~:1s.. -. ~~~~e:s~ip AIR - miscellaneous - Joint Venture ci AIR - miscella~e~u~ ~- TID<: Credit AIR - ffii5cell3neo.us - Other : 5,672,71 9,196, AccouritS receivable - miscellaneous 5,672,71 9,196, Accounts rec.ei.vable- te~ants ' ', ,894 3, Allow~ce for doubtfui a~unts - tenants (1,962) (87) AlloWance for d~btfuf accounts - other I) (177,399) Ii 127 Notes and moftgages receivable- current Fraud reoo,;ery ' -, NM, 1281; AllowaJl~e for doubtful accounts - frauci" 129 Accrued interest receivable 152,23 3,537, ,251 izo Total ~~Cei.va~Jes, net?f ~l!?~~c,e~ fo,~.doubtful accounts 221,113 9,53,95 9,875,85 Current investments 131 In;eSi.ffients - unrestri~ied ; 888,314 13:2" InvestmeiitS - restricted j35 Investffie_~ts. - Res_t_i_cted for p~}'.~~~f "(~Urrent liability o. ci 143: Inventories 38,515 A11o~allce for obsolete inventories. (31,477) Ii 144 Inter J>r~&~am - due fro~ 1,941, Assets held for sale o, 15 o 24,12,558 1,627,396 NONCURRENT ASSETSi capital as_s~ts: (referen_c~:~-~-~~1.'~- ~chedules prep~~.:~epa~~~eiy) 161 Land 41)27 1,43,817 99, B~ildi_~_Ss ,396 '1,385:85 ci 163 Furniture, equipment&. machinery - dwellings 21, Fumitt:ife;_ eqtiipment_~.:~~~~inery - admi~ist~atio~. 692,497 19, Leasehold imp~.o~ements 166 Accumulated depreciation (1,129,932) (16\634) 167. Construction in.. PrOgress. 29,288 o' 168,. InfrastfU.Cti.ii-e.. o 16 Total ~ap\~~lll~~~.~!s, ~et or"acc~mulat~ d_~pi~,c,iation 41,227 1,633,3_96 2,182,185 Other non-current assets: Notes and mortgage receiv8h1e - non-current - Not for Profit Notes ~d lllongages rec~\~atjle - llon~c~;ent - Partners.hip 171:3 ~?.t.~~~and mortgage~ ~ecei~abl_~..;:~?~-cu~ent -. 1?.i~t V ~~tl:';~-, ci

70 Housing Authority of the County of Monterey PIH Drug Elimination State/Local (HELP & Comp Grant Program Low Rent Public CA33 JUNE 3, 216 Program Migrant) Business Activities Blended Components Housing 14.85a Notes and mortgages receivable - non-current - Tax Credit Notes and inongages receivable - nofl-c~rrent -Other 85,391 65,929,232 12,373, NoteS ajld ffiortgages recei':'~b}e - non~c.:.~_rrent. 85,391 65,929,232, 12,373, IO Notes and mortgages receivable - non-current - past due - Not for Profit Notes.ifld gages receivable - non-current - past due - Partnership \ 172-3" Notes a_nd mo.rtgages receiv3ble - non-curr_ent - past due - Jo_int Vt:nt':lre,; Notes and morlgages receivable - non-current - past due - Tax credit 172-5:_ Notes and mortg.iges recei~able - non-current - past due - Other 11i Notes an d mortgages ~eceivabte"~noll-current - pclst due 173 Gr3nts ReceiVHble - non current o IO Other assets - NOi for Profit 174-2'" Other assets - Partnership Other assets - Joint Venture Other assets - Tax Credit Other assets - Other 2,921,523-1,256, ) Other ass.cts 2,921,523 1,256, IO;, 1flVeStmerit.iri ioint venture - Not For Profit 176-2'." Investment in Joini.~irlture.- Part~ership f i1i;:3' Investment in Joint venture - Joint Venture '"'i) rl76-4 lnvestm~nt in ]~int venture - Tax Credit i 176:5 lnvestrn"ent.hi jqint venture - Other 657,562 1,2.,,.,_.,?. 176' Investmelli in"}oint yenture 657,562 1,2 18 TOT AL NONCURRENT ASSETS 846,618 71,141,713 15,813,5 2 DEFFERED OUTFLOW OF RESOURCES /94. 34,847 ' i9o\fotal ASSETS and Deferr~d Outflow of Resources l,566,29t _ o_ 95,497,65 26,475,248 LIABILITIES AND EQUITY: '. Liabitiiies: ",. ' C~rrent Liabilities:.;,, 31 lc Bank overdraft 3 I 2; Accounts payabie :S 9 days 34,921 o: 1,49,311 46, }.,.. 'A.~c~unts pa)'.~.~.!~~ ;_'9_ d_ays past due o: ~~ Accrued wage/payroll taxes payable 24, ~ 322 Accn'ied CQffiI)eflsated absences 6,832 69,114 22,42 Accn.ied OOrli}rigency liability Accruecff~tere'St p~yable r:!;: 1331-IO A/P -HUD PHA Programs - Operating Subsidy A/P - HUD PHA Programs _ Capital Fund ;;J,?1-3 Afl'-:J:tj.Jri th~"i>rogra~~ ~. qther 331 Accounts payable - HUD PHA Programs 332' Accounts Pay~bie---PHA projecis, ;; Accounts payabie ~ other government, 3 41} "fci:_ant securijy dep?siis. 8,844 15,95 " 343-ow, 'cff'r -., ; Capital Projects/Mortgage Revenue o- 343 Current portion Or"L-T"debt - capiiaj projecisiinortg age revenue bond o- o- 344 C~:r.e"~t.. p~rti_o~, ofl-t de~f~_ Op~!<:ting.b.o'rrowings...,...., Other current liabilities 53, Accrued liabilities - other 642,767 f'-' Interprogram - due to 28, ,94 " f348-i Loan Liability - current - Not for Profit 348~~J Loan Liability - current - Partnership 6' ; 348:3'.. Loan Liability - current - Joint Venture {3~i"8~4' Loan Liability - current - Tax Credit oa '348:5 Loan Liability - current - Other 348 Loan Liability - current

71 Housing Authority of the County of Monterey PIH Drug Elimination State/Local (HELP & Comp Grant Program Low Rent Public CA33 JUNE 3, 216 Program Migrant) Business Activities Blended Components Housing 14.85a 3IO TOT AL CURRENT LIABILITIES 233,13 2,417,66 877,33 I NONCURRENT LIABILITIES: 351-IO Long-term debt - CFFP Long-term debt - Capital Projects/Mortgage Revenue 85,391 15,391 93, , Long-Tenn Debt, Net o.fc,:~~ent ~.Capital Projects/Mortgage Revenue 85,391 15,391 93, Long-term debt, net (!f cu.rr~'.1~ - operating borrowings 353'. Non-current liabilities- other 354 Accrued Compensated Absebces - non current 355-IO Loan Liiibiiit}' - non current - Not For Profit <i,, 355-2,. Loan LiabWily"'~ ~on current - Partnership Loan Liability - non current - Joint Venture LoaJl Li"ability - non current - Tax Credit Loan Liability -1.1 ~tj~~n~ : 9.t~~r m: Loan Liability - non current 356: F ASB 5 Liabilities :.Acrued Pensio:~ 8~ 6~~-~:b\:~bi_~ity o: o' 35 TOTAL NONCURRENT LIABILITIES 85,391 o I5,391 93,348,.., " 3 TOTAL LIABILITIES I,38,44 o 1,78,679 Deferred ~evenues (?pe~ Subsidy.. Deferred Revenues Capital Fund Deferred Revenues Other 91,22 {286 4 DEfE.RRED INFLOW F RESOURCES 91,22 676,494 5,286 EQUITY: 58./ Non,~p,~nda~le Fund Balance 58.4 Net Invested in Capital Assets ci (764,164) 1,528,5... 1,278, Restri~teci Fund Balance I) 5I.3 c111iited fund Balance.. I) f\s,~i~~,~- Fun.d ~alance w,v"'"'- 8,7i9, Restricted Net Position 422,33 1, U~asSi~ed fund Balance UnreStricted Net Position 778,51 82,49,894 23,49, TOT Af: EQUITY /NET ASSET_S 436,667 92,297,574 24,689,283,,,,,., - 6 TOTAi:."LIABIUTiES, DEFERRED INFLOWS AND EQUITY. 1,566,291 95,497,65 26,475,248 Proof of concept REVENUE: 73; Nei ien"arit rental revenue o, 266,972 2,,377,913 14, Tenant.revenue- other <i 2,IO 36, Tot3I tenant reven~e 268,982 2,414, I \ HUD PHA grants - Housi~i' Asst Payments o "' HUD "Pi-IA &ra~ts ~ AdniiriIStfatiVe fees ea~ed I) ' 76-3!. HUD PHA grants - FSSC:oordinator : 7~~~-~-4~ ; y HUD PH~ _gr~nts ::-::~~t~;{ ji{~ep~~~eni pu~ii.~ a~i ;~dit cos~s... o: 76-5 HUD PHA grants - Total preliminary fees earned 76-6: Huri.. PHA grants - lnteresi ea~ed on advances ! HUD ~~t\j~e~!lts, - Admin. fe~.~!~~la!\?.~ <liscription O' '16 ~J?.PH~ operating want~ 76 HUD PHA operating grants 761' Capital Grants o: 77IO, ~~,~i~e-~~,~~ Fee - HA{~.,,,=,"wnw,. 11io, ~~-~~!.~anagemen! ~-~-- ' o:...

72 , 'i!' ' 714-2, 714' 'ii:foo: 7i6 12:oiO: Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Bookkeeping Fee Front Line Service Fee Other Fees Total Fee Revenue Other government grants (must be analyzed individually) Investment income - unrestricted - HAP Investment income - unrestricted - Admin fee Investment income - unrestricted Investment income - unrestricted Mortgage interest income PrOceedS rrom dispostion of assets held for sale Cost of sale assets Fraud recovery - HAP Fraud recovery - Admin Fee FfciUd ;ecovery Other revenue Gain or loss on sale of fi~ed assets ifl VeSiffient income - restricted - HAP 1n ~estment "iiicorne - restricted - Admin.Fee -y~;~st;ent inc~me - r~stricted -i~~estment income - restricted 7 TOTAL REVENUE. EXPENSES: PIH Drug Elimination State/Local (HELP & Comp Grant Program Program Migrant) Business Activities Blended Components o; ; 348, ,574 2zsJ99 o: 638, ,199 : o 634,297 4,934,796 ci 24, , , ,386,261 5,432,146. Low Rent Public Housing 14,85a ,987 Administrative 911 A.d;inistr~ti~e salaries 912 Auditing fees Management fee- PHA 913Q-2 -M,;;ageme~t fee - Third Party Management Fee! 9131 Bookkeeping Fee,. 9 {4~c:;'> A~".~rtising and Marketi_~g, ' 9i 56:: '_~-,~~p)~y~~?e1_1efit contri~1_.1ti_~~~.-. ad~inisi~ative Office Expenses Legal Expense 918.: Travel i 9'j 81' Allocated Overhead 1 919'.' Other *:::. 9iQ' T«?t~j 9P.et~~-i-~i:.~-~dffiillistfative ' 92 -~~-~v~.!.. ~a_nage~ent Fee 33,278 6,7 38,519 38,519 13:Siio 3,?82 58, ,8 4,8 2,74. (W,869): 8, ,133!16~ Of 358,339 6,416 3,J,9, ,565 37,61 '"i4i,9il 4,792 26,388 3,768 63,8 1,17,86. re nant services 921 \ 922 r 923 f 924!' 925 te nafll'se;;:;1ces - salaries Reioc8ii~~- COsts E mp1yee benefit contributions- tenant services Ten3nt Se~Ces - oilier Toiat"Tellant Services uihities ! oiF r935 Wate;, Electricity Gas Fue1 Labor o 26,459 31,281 1,921. o. 6,318 1,34 81 o: I) 25,664 j.. 9, O' 226, ,294 27,799...

73 Housing Authority of the County of Monterey CA 33 JUNE 3, Sewer 937 Employee benefit contributions- utilities 938 Other utilities expense 933 Total Utilities Ordinary maintenan~e & operation PIH Drug Elimination State/Local (HELP & Comp Grant Program Program Migrant) ,264 93,925 Low Rent Public Business Activities Blended Components Housing 14.85a 3,1 7, ,878 1,533 43, , ' ~ ' '. 943, Ordinary maiotenance and oj)erations - labor Ordinary maint~nance and op ~ rations - ~aterials & other Ordinary mai~te~~ce and Op.erations coriiricts - Garbage and trash Or~\,:iary ~.a~!1t~nance an~. operations contfacis - Heating and COoling Ordinary mii.ijlienance and Operations contracts - Snow Removal Ordinary maintenance and operations contracts - Elevator Maintenance Ofdiflary rriaintenance and operations contracts - La~dse3pe & Gro~nds Ordi!l-a~ ~~i.nten."ance and operat.i~.~~ contracts - Unit Turnaround Ordinary mai~te~a~~- ajld "Oper~ti~nS.c.~~t.r~~t~. ~ Electri~) Ordinary maintenance and operations co~tr~~ts - Plumbing "ordinary maintenance and operations contracts - Extermination Ordinclry maintenance and ope~aiions ~~lltrrc!s.- 1an\~orial Ordinary mainten~~c~ an~.~l?~rat~on_s_ c~~i~~cts - ROutine Maintenance Ordinary maintenanc~ and OperatiO~s contracts - Misc Ordinary m~i n!erianc~-~~~-?pei-ations contrllcts 36,274 8,649 2, ,311.,.,,-, o 1, ,479 2,487 3,11 ' 17,42 11, ,316 5,318 9,912 98,135 3,67 22,19 234, o 4,35 5,156 5,4 62, ,334 9, ,325 23, ,91 3,41 6, , ,172 37,519 16,61 48,49 415, , 94 Employee'beOefit co~irib~tions- o~dinary maintenance Total M~i~l~ll~ce 15,386 ir 9,41 6,1 6,312 14)33 45, , ,322 Protecti~e services " Protective services - labor Protective services- other contract costs Protecti~e services - other E~P1~yee benefit con.tribu~\.o.~.~~ J?i~{e~tive services Total Protective Services <>'' 318 1,593 ; o: 318 1,593 Gener~! exp:~s~s 9611' 9612, 9613 L 9614; <i6ioo' ~ 962<ii 962;, ' : 962{. 962{ 96'iio Property Insurance Liability IriS~ farice.. Workmen's oinpe~sation AH other Insurance Total insu~a~~'"ii"i-e~f~~s Other gene~a(~xpenses Compensated ab.~ences Payments in lieu of t~~s. Bad debt - tenaot reoi"s".. Bad debt- mortgages B~d debt - other ' ' Severance expense Total Other Ge_~~ra(~~:~~nse Interest ofl Mo rtgag; (Or Bonds) PayabtC Int~rest ~~ Notes Pa}'able (Sh11 ~Ocfi~ng Tenn) Amortization of BOnd issue costs 967. " "=fojaf1nter~st. ~~P!.~se and. ~J?OrtiZ8i"iOn co~(: i TOTALOPERATiNG EXPENSES EXCESS OPERA TING REVENUE OVER OPERA TING EXPENSES '<=>, """" 15,256 o 15,256 24,171 24,171 o: 337,527 o, 35, ,17 32, ,246 27,961 3,242 8,72}, 4{ ,824 : 12}153 4,655 67,81 : 119, , ,264 'o ,922 (675): 15,419 : O; 361,17 143,57 3,113 21,58. 3,113 21,58 541,737 1,676,362 2,595,11 844,524 3,755, ,352

74 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 PIH Drug Elimination State/Local (HELP & Comp Grant Program Program Migrant) Business Activities Blended Components Low Rent Public Housing 14,85a 971' : 973:4i; jfo'.. Extraordinary maintenance Casu.ilty losses - non capitalized Mainstream 1&5 Year Homeownership Litiiation Hope VI - Section 8 Tenant Protection Portability Out FSS ES~row Deposits All Other "Special" - FUP, NED Etc All Other Toi31 fiousing Assitance Paymeflts 7,14 o 44,16 1,12 25,86 25, :;1~~! <i16oof 977 irisoo' HAP Portability-In Depreciation expense Fraud losses Capital Outlays - Governmnental Funds Debt Principle Payment - Governmental Funds D~elling. unit.s rent. exp~n~.j, ,197 3,58 9jo,344 9 TOT AL EXPENSES 7, , ,934 1,76,942 3,576,288 OTHER. FINANCING SOURCES (USES) 11. ope~ating transfers in 12 operatin8 transfe1i"~ o Operati_ng t~n.s/e~s. ~Om/to_~. Not f~r Pr~fit 13-2 Operating transrers frmjt _, Partnership " 13-3 Operati~g transfers fr1~1/1 - Joi~t Venture 13-4, Operating transfers from/to - Tax Credit 13-5 Operating transfers from/to - Other 13'jj', Operating transfers from/to pri~af'y go~emment ~ 14 Op~r~ti~g t~~sre~s fro~to ~~POnent.~nii. r. i"ooso Pro ceeds "from Notes, "Lc)3riS,""and Bonds ;. 1 6 Pro~s.rrom Property Sales i,'[7 ""E~f~;'Q~di~ary'lt~ms (net gainnoss) ' 1ooso; special Items (net gainlloss) 191 ~ 1tlter AMP Excess Cash Transfer In If1ter AMP Excess Cash Transfer Out Tra.nsfers frm Program to AMP Tra"nSre r-froid AMP to Program o. 'il'"'. o" o, O o (444,926) 65, ii' ii... J<S5,) [9T AL OTf!ER. FINANCING SOURCES (USES) I l~oqo'excess (D1'FICIENCY) OF TOTAL REVENUE OVER (UNDER) TOT AL l,){penses (7,171) 28,599 3,938,762 31,732,89 j (65,) )MEMO ACCOUNT INFORMATION: f. ""i fr)2 l 1 io~o,\... segilliifii!i equity t 14-~1\.. Prior period adjus!~~n!s-describe 11 ~o-q2_q,,v., Prior period adj~st~~.11.t~.~- ~~~cri~~ l 14-3f" Prior period adjustments - describe Required Annual Debt Principal Pa~~-~ts ~ Capital COnirib~iiOJlS - i:ps 114-sci' Prior peri.~d a.djus_tments - describe I I_ 4~~6 P~<?r l'~~d ';dj~stment~.-.~'e;c~~~ I io4-7 Eq~iiytransfers I i 4o~Oso\, Equity transfers :, Equity transfers 114:'1 i>o' Equity transfers 148,31. o, o' (14,86) o a,, 48,68... o. ii' 2,225 (2,225) o" il 27,476,641 ii ii ii 21,29,79. 32,995,488..., (34,474,821)...

75 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 I Equity transfers 114 Prior period adjustments, equity transfers ~~d correction of errors 11 Oso,, changes in cortipen5ated AbSence Balance 116 Changes in Contingent Liabiiity Ba1~rice I 17 Changes in Unrecognized Pension Transition Liab 118 chariies in spedaftcrm/sev~rai:i.c~ Benefits Lia~ 119 Changes in Allowance for Doubtful Ac~t - D~elling 111. Changes in ~1~~8.~~e. f'?.~ Doubtful _Acct - Other PIH Drug Elimination State/Local (HELP & Comp Grant Program Low Rent Public Program Migrant) Business Activities Blended Components Housing 14.85a (14,86) (2,225) 33,88,844 (34,474,821) HOUSING CHOICE VOUCHER PROGRAM ONLY Administrative Fee _Equity - Beginning Balance Administrative Fee Revenue i?o~oio Hard to House Fee Revenue FSS-CoordinatoiGrani Audit Costs t l.fi~4 Investment Income 11 11:45 Fraud Recovery Income 1117:5 Othe; Revenue Comment for Other Revenue Ii 1 7~6. Ti'8i Admin Fee RevenuCs I ]rfo:8 Total Operating Expenses 1 t' i7~9 Depreciation, 1 i 1 7~95, Housing Assistance Payment POrtabiiity in Other Expenses co~nient for other Expense 1 mo:11; "fotal Expe~se,,,, oOi) Net Administrative Fee Ii "i 7-3'" A.dininistrative Fee EciuiiY- Ellding Balance 1 i"t"io-5 Pre-24 Adll1illistrativf: Fee Reserves l i "i i-66 Post-io3.. Adffiinistraii;eFee ~ReServes...,..,...._ :-.~~.1 ;c. HO.u.Sing AS.SiStilnce Paymerits Equi~y ~ a egi~ning Balance J, Ho~sing ASsiStii~ce Payment Reven~es' ll , F~3Ud R~cO~ery Revefl~e 1 I I so-2 Other Reven~e I i"is-21 ;, Comments.FOi- Other R"eveni.ie l i 18~25;, Investment Income !; Toi3:i""Housing Assisantace pay~e~i s Revenues 11}.~ ~~SOt... H~~~ ing ),.ssist.a~ce. p~y~e~~s..... I i i 8-9!, bthei- Expe~~e.s. I ff8 Q:o~fi/ Comments for dfhe~ E~J)enses Ii (8~ 16: Tot81 HO~~t~i~s~isant8.ce p~yment Exp~~ses 1 i.t 8-2. Net Housing Assistarice payments I i i"s-3 HouSi~g '\5S~jance ~ayijiin.ts Equity - r:~.~lflg ~,~1.~Cf:! 1 J 18 Housing ASSiStance Payments 119 ChallgeS IO Allowance for ooubtfull Accounts - Dwelling Rents 1111 C8rigfSin aiio~ance for Doubfuif ACCOunts - Other 1117', V ~v Administrative Fee Equity 1) ~ ~9.t... }lousing Assitance Payments Equity 1119:-; Unit months available.. i "j i" I, Number.Of Unii months 1eased o ' o: o. or 6 ii.,... o o, i) o' o o... o -o - o i) ' ci i) 6 o' o' ii I) il o ii o ci , i'iil

76 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Section 8 Mod Rehab Capital Fund Section 8 MulitFamily Program (MR3) Program (PVM & MW) cocc Eliminations TOTAL I II; ASSETS: CURRENT ASSETS; Cash: Ca.Sh -unrestricted C~sh - restricted - modernization and development Cash - other restricted Cash - tenant security deposits Cash -'restricted for payment of current liability Total ~~h o 327,757 6i5,633 29,183 '.,.~ 972,573 ij 8,849,985 12,76, ,969 21,722, t :; i :,;, 124 )125-1 '"125-2 i25-3;, 125-4(.125~osi/ i Accounts and notes receivables: Acco~~ts. recei~a~ie -)>HA"Pi-~Jet:~S AIR - HUD other projects OJ)er Subsidy NR - HUD other projects Cap Fund. NR - HUD other projects Other Acco~~tS ~~-~i;;ble - HUD oth~r projects AccO~niS re~i~~ble - other go~ernment AiR - misce113fleol1s- Not For Profit AIR _ ~isc~ua_neous ~ Partnership A/R-~'";iS~llaneous - Joint -Venture AIR - nliscenaneous - Tax C~edii AIR - miscellaneous - Other AccoulltS receiv3bie ~.. miscenaneous ACCounts,.receivabie ~. lena~i;' AJlo;~ce for doubtful accounts - tenants AnoWB.nce for doubtful accounts - other NOiCS and mortgages receivable- current Fraul ;eco~e'. - A11o~~flce for doubtful accounts - fraud Accrued fiiierest receivable Tot81 r~-~ii;~~!e~. net Of allc~~~~c,es for d ~~~tfu.1 ~c~~unts o 6" 813 I) O: o ii" 18,962 18,962 18,962 (55,696) (55,696) (149,82) (24,778): 8,688! 8,688 68,26 o 15,oii,Ol8 15,77,18 44,287 : (5,454) (177,399) Current investments 131 Investments - unrestricted 132 1nvestmCfliS- restricted 'nve~im~_~ts.- Resticte_d.fl?~. p~)'.ffi~~t '~)f c~;:e~t liability 143 InventorieS Alio'Wance for obsolete in~entories 144 Inter program - due fyom 145 Assets held for sale ,186 o.' (2,794,512) 157,71 (31,477). 15 TOT AL CURRENT ASSETS 973,386 3,148 (2,999,29) 41,969, i 164,c 165.' 166: NONCURRENT ASSETS: CapitaJ assets: (fcfe;.e 11 ce c1etailed sched~ies prepared separately) Land Buildings' Fu~itUre, eq"~ipment & machi~ery ~ d~eii"i.ngs Furnit~re: et]~ip ment & m achinery- admi"fl"isiration _Leasehold 11TIPrO~e~ ~ n~s..... Accumulated depreciation Construction in f~~gress Infrastructure _! ota1 caeit~. ~~~~!~~-!1.~t.?f.accutllUliii~ ~ep_r~i~1:i_of1: 573,91 2,222,447,. 35, 3,43 483,298 5:141,15,.. i 651,916 ; o: (4,113,17). o' 2,163,749 4,54,57 21,91{493 jj:i,no: 1,517,512 : o: <1J:1s9::ii5Y sz:412 :... ' 15,23,29! fi11:2 ;; 171-3; Other non-current assets:. NOieS arid mortgages feceiv.ibie - non-current - Not fo/.pfofit N?ieS_ an cfrriortgages re~i\'.~~i~ :- 11~-C~ITellt - PaTiiiersh!p.. Notes and ~O~g~.e~ r~i~~~ie ~-'non-~~'rr~~t :}<?~~~ '( ~nt~f~'' o :- - o,. o

77 Housing Authority of the County of Monterey CA33 JUNE 3, 216 Capital Fund Section 8 MulitFamily Program (PVM & MW) Section 8 Mod Rehab Program (MR3) cocc Eliminations TOTAL Notes and mortgages receivable - non-current - Tax Credit Notes and mortgages receivabie ~ flon-curreflt - Other,-, }"" 171 Notes afld mortgages T~~i_v~b!~. ~ non-current ;; Notes and mortgages r~iv;b1"e - non-current - past due - Not for Profit,;In:2 Notes and mortgages receiv.ibfe" - non-current - past due - Partnership : Notes and mortg~ge~ /~~iv8b1~ - no1.1-~urrent - past due - Joint Venture : Notes and mortgages recei;abie': Don:current - past due - Tax Credit : Notes and mortg~ges ~ecei v abie - non-current - past due - Other 172 Notes and ~OrtgageS receivabie-non-current - past due 173 Grants Receivable - non c~rrent.. "174-1 other assets - NOt'for PrOfit Other assets - Partnership 174-3, Other assets - Joint Venture Other assets - Tax Credit fj4:5 Other asscts - C>ther 1"74 Oiher assets iiwes.tment in Joi.rit venture - NO"i"i=-Or Pfofit !nvestment in Jo\~!.ve~i~,r.e ~.P~riflership :: Investment in Joint venture - Joint Venture f Investment itl.1itl1ive~i~re-tax Credit ti':76-5 InveStm ent in Joint venture - Other 176.Inv.e"Stmerit!n joint venture 18 TOTAL NONCURRENT ASSETS 184, ,824 2,577,847 o,,, o,.. : (1,8.739) (1,8,739) (657,562) (657,562), (1,666,31) 78,99,63 78,99,63 4,362,788 4,362,788 1,2 1,2 97,666,26 2; DEFFERED OUTFLOW OF RESOURCES ~ m v-,o,v 72 72,38 347,2_6:J :i9o'. 'TOTAL ASSETS and o~r~~red 'outflow of Resources 3,551,35 2,536,277 (4,665,591) 139,982,478, 1lJABILITIES AND_ E~~i'fv:, Liabilities: Current Liabilities: 311 Bank overdraft ; 322; 324' ;,,., 325 fl31:<ll,~ r 3_3_1 332 f 3_3_3 341' 343:oi'<i ' cj4s~oio ', LF8-5o,, 348 AccoiiritS payable ::;: 9 days VA~~?U.~ts payable > 9~ d.~x.s p~st dlle. AcC~ed wage/payroll taxes payable.. ACCi-ued co-~pensaicl3bseoces 'ACCi-ued coritingenc}'.. ti3biiity ~.~ru'.~~-\~ter~st PaYab1e A1P : HUD PHA Programs - Operaiing Subsidy A1P : HUD PHA Programs - Capital Fund AJP~HIID PI-J.APrograms-Oiher - --_ - AC~~~n~~ PaY.able.~.'J:!UD Pl{A'fr~8r~~s Accou~ts -P~yable - PHA projecis Accounts payable - other government Tenant seci.irity deposits. CFFP..,,.,. Capital Projects/Mortgage Revenue Curreni.pOrlion Of L-i dcbt - capital projccts/mortgage revenue bonds ~~rre.nt. PO~i.on OfL~ T d~bt...- oj)e~a.titlg bo.rrowings Other c~;:;e~t'jiabilities c,~-, ',, Accrued liabilities - other Interprogram - due to Loan Liability - current - Not for Profit Loan Liability - current - Partnership Loan Liability - current - Joint Venture Loan Liability - current - Tax Credit Loan Liability - current - Other Loan Liability - current 2,875 4,433 o 2,8i7.. 63,94. 63,94 : 326,176 : 7) o o: I) o ii O' ii''' o': (i49,82).... (55,696) (2,794,512).. '. 1,622,76.,.. 25, ,962 63,786; o: 4,428 : 4,428 is{oss ""''''" 212,87 212, , ,71 - o-:

78 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Capital Fund Section 8 MulitFamily Program (PVM & MW) Section 8 Mod Rehab Program (MR3) cocc Eliminations TOTAL :2 ;;355:3 hss-4. "355: (;\ 357! 35} 31 TOT AL CURRENT LIABILITIES NONCURRENT LIABILITIES, Long-term debt - CFFP Long-term debt - Capital Projects/Mortgage Revenue Long -Term Debt, Net o.f Cu!Tent - Capital Projects/Mo_rtg_a~e -~~venue Long-term debt, net of current - operating borrow'ings ' ' Non-current liabilities- other ACCfUed COmpensated.AbSebceS - non current Loafl)~i3bility - nori c~itent :: Not For Profit Loan Liability - non current - Partnership Loan Liability - non current - Joint Venture Loan Liability - non current - Tax Credit Loan Liability - non current - Other Loai-1 Li~biihy - non c'urrent F ASB 5 Li;biiities. Acrue"d PenSk) n ancf"bpeb Liability TT AL NONCURRENT LIABILITIES 418,241 3,626,471 3,626,471 O o 3,626, ,533 (2,999,29) 4,287,863 (1,8,739) 6,51,326 (1,8,739): 6,51,326 o o. o ci (1,8,739)' 6,51,326 3 TOTAL LIABILITIES 4,44, ,533 (4,8,29) 1,339,189 DefeT_Ted Reven.ues o.p~~.sllbsfci,y Deferred Revenues CaPi1aT F~-~d. Dere~~d R.ev~n ue ~. Oi"i-;e~ ,.37 ci 22,64 81,833. DEFERRED INFLOW OF RESOURCES ' = ',.,.,,,..,.. -= 1,37 22,64 j Nonspend3b"ie.. f\ifld Balance ~et i_~~e"si~(fln. Capital Assets Restricted Fund Balance Co.mined fund BalanCe 5 I 1.3 Assigned Fund Balance Restricted Net PosiiiO~.., Unassigned fund Balance u~resiricted Net Position m TOTALJgu1TYINET~ssETs 76:2; '.if:i"1 16:oso 76:6' TOTAL LIABILl'fIB.~;:}!~~~.RED INFLOWS AND EQUITY' Proof of concept 'REVENUE:. Net tenant rentai revenue renant reven'ue - other.v=to1-~i te~a~t,~evenue HUD PHA grants - Housing Asst P~~~~ts HUD PHA gra~ts - "A.d;iOisifative lees earned HUD PHA grants - FSS Coordinator.... ~-ujif P~Ag;a~1S - A~tual indepe~dent _pub!)c ace~ a~dit costs ttl.jij"iha grants - Total preliminary fees earned HUI> Pi-IA grants - I~terest earnect"o ;1 aavanc es HUii PHA gi-.ints - Adnlbl. fee calc~tation Ae:~cripti~n fo6oc ''HUD PHA op;r;tf~g grants V, v, 76' HUD PHA operating i~~ts 761 O Capital Gr~nts Management Fee - HAC!ltl 712 w, ~~~i!).f~ige~e!1t.'j:~e" (1,297,388) o o i) 623,999 I 78,945 (494,444) 3,551,35 o: Oj o o: o... 6 o o: 2,36,159 o 2,163)49 Y:8,739: s,939,o'ti.... o. 12,93, o.. i58,93i (1,666,31): iiii,iiciii)57 : 2,322,68 i (657,562Jj 128,841,456 i 2,536,277 : (4,665,591) 139,982,478 : 3,955,133 o: 56,684, 4,11,817 27,813,76. J:52, ,425 :.. : ' 855(59 O o 31,863,18 o 2,36,159 1,411,267 (1,111,992) 299, o

79 Section 8 Mod Rehab Housing Authority of the County of Monterey Capital Fund Section 8 MulitFamily Program (MR3) CA33 JUNE 3, 216 Program (PVM & MW) cocc Eliminations TOTAL 773 Bookkeeping Fee 356,24 (344,24). 12, 774 Front Line Service Fee 121,776 (84,82) 36, Other Fees 7,63 7,63 77 Total Fee Revenue o o 1,896,697 (1,54,818) 355, Other government grants (must be analyzed individually) 38,61 817, IO Investment income - unrestricted - HAP o Investment itlcome - unrestricted - Adniin fee 7, Investment income - unrestricted : 867, IOO Investment i~come - unrestricted o. 874, Mortgage interest income 713 Proceeds from dispostion of as~ets held for sale Cost of sale assets 714-IO F~~ud recovery~ HAP : o. 53, Fraud recovery - Admin Fee o' o: 53, Fra\ld. reoovery 17,578 moo' Other ~eve~ue, 4,22 241,396 (242,191) 5,719, Gain. Or IOsS o~ sale of fj"~eci assets... : ri 12- m. Investment. income _ restrictecf ~-HAP... 6 o 72-iii:' investment income - restricted ~-Admin Fee 72 I~~estment income - re~trict~ o (21,58) 8,92 72 Invest~e~ t income - restricted 672 O (21,58) 8,92 7 TOTAL REVENUE 2,36, ,895 ' 2,138,93 (1,84,67) 45,793,911 EXPENSES: AdminiSifiiti;e 91 IOO Administrative salaries 37,44 1,456, Auditing fees 9, 913-IO Management fee - PHA 39,936 (1,226,87)_ M ~ri.iiement f~.. <!.h.~~~.~~rty o Management Fee 39,936 (1,226,87) 9i3IO Bookkeeping Fee 7,296 (344,24) 914 Adve~~~i,~i:~~~,~affa:~ir~g, 25,87 4,231 9j5 Employee benefit contributions- administrative if 11, ,86 1:313,j1:i, 916 office E~ p~~ses o 8, ,15 (1,641) 51,888 : 917 Legal E;pense 4,832, 21,27 85,287 : 918 TfaVef" : 1,411 6,489 ii 15,973! o "iii'81 Allocated o~erhead' 919 Other o: 89,43 (113,755) 91! o~al. Operati.ng.. ~:.A4~!~\~!:~~"iiy~ o 2,236,982 (1,785,227) 92.. Ass~t Manag~m~.~~.. F~~~= "6'" Tenant services ("921 Tenant services - salaries I) o: 'i:34,365!. 922 ReiOcaii~ ~.. OOsts ii: r 923 EITIPJoYetd)eflefit coni:ributions- tenant services O 49,928 i. 924 Tenant services - other ,88 C 925 Total T;;a~t~Se~ces o t Uifrhies 931 wat~;~u O 21,456 o: ({36 39, Eiect ricity o '. 1,26 o: 5,78 iso: Gas 4,99 5, ,236 Fuel o. o.. o..: Labor. o" o.. : 1

80 Section 8 Mod Rehab Housing Authority of the County of Monterey Capital Fund Section 8 MulitFamily Program (MR3) CA33 JUNE 3, 216 Program (PVM & MW) cocc Eliminations TOTAL 936 Sewer , EITlployee benefit contributions- utilities 938 Other utilities expense 933 Total Utilities O, 39,931 62, Ordinal' maintenan~e" & operation ' ~- 94!. Ordinary mai~tenance a.~~,~p_er~~i~~s - labor 47, \ Ordinary maintenance and operations - materials & other 11, IO Ordinary maintenance and operations contracts~ Garbage and trash , ! Ordinary maintenance and c_,pe:a1i_1_1s.contra~t.s.~.j1-~ting and _C~?(~~!L Ordinary maintenance and operations contracts - Snow Removal Ordin3.ry ~"aintenance and operations contracts - Elevator Maintenance 5,87 I, Ofdil13ry "mainteriance and operations contracts - Landscape & Grounds 7,54 3.1is Ofdiflaf}' Tfl.ainte,nan~ecca~dc (?perations ~ontract~.-, Unit T~i:-naround ' Ordinary maintenance and operations contracts - Electrical 9,572 cl 9, , Ofcii~Sry maiotenance and operatio~s co~ir~~ts - Pl~mbing _ o" ""ofdinafy maintenance and operations contracts ~ Extermination IOO, b~~i~~ry maintenance and operations C?.~tfaC!~-~- J~nh.~~~) ~-,~.: , IO; Ordinary maintenance ~nd op~~atio.ns C?_~trac~~ - R:o~tine Maintenance , ( Ordinary maintenance and operations contracts - Misc 5,96 14,535, 92, Ordinal")'.. ~~n!~~ance and operations contracts 43,269 74,497 ' 867, Employ~ b~nefit contributions- ordinary maintenance ,282 i 1a1 MaintCnance ) : 2,!5,95 I Protective services 95! Protective services - labor 952 Protective services- other contract costs 1,698 I,951 16, ; Protective services - other 955 E~ploYee benefit contrib~tions- proteciive services 95 T Otal pfqtcctive Services ,851 Gene~~ -~~penses 961 IO' Property Insurance o. 6, ,56 8, , Liability Insurance o, ;21 16,621 j Workmen's Compensation ,82 j55j18 r -9614' All oiher' I~S~fruice 18,69 6,913 6'i: 443! 961 Total i~s~r~~~ Premiums ,242 I 49,836 r... Other ge~,eral _exp~~se~.," 962 I t Compensated absences o"'" o 962 Panf~i ~ in lieu of taxes 96, Bad dfbi - tei:iant rents 7, Bad debt~ mortgages 962 Bad" debt - othe; 962 s~~e~~~re expense 962 1~_ial.:9.~~e_r 9eneral Expe~s~.. 14,174 ' 39 2,218 i. 967io. i~terest, on Mortgage (or BOnd;> P~)'abie 9672 I~te~e~t ~ NotCs Pa)'able (Short anci"l~og Term) 139,649 (21,58). 22, AmOrti~ tion of sand Issue costs... o,~61': T(?tal.~ 1.~teres! ~Xpense and Am5>:~iza!i?n co_~t" 139,649 (21.58) TOTAL OPERATING EXPENSES o, 575,41 2,5.634 (1,84,67), 1, EXCESS OPERA TING REVENUE OVER OPERATING EXPENSES (362,541) 3_i,

81 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Capital Fund Section 8 MulitFamily Program (PVM & MW) Section 8 Mod Rehab Program (MR3) cocc Eliminations TOTAL 97) IO , 973 Extraordinary mai.ntenance Casualty losses - non capitalized Mainstream I &5 Year Homeownership Litigation Hope VI - Section 8 Tenant Protection Portability Out FSS Escrow Deposits All Other "Special" - FUP, NED Etc All Other Totai"HO~sing 'A.ssi'tance PaYments 9,587 o o 4,365 O' 65,72 1,12 39,62 97, , ,4IO 1,59,29 25,765,642 28,728, HAP Portability-In o, Depreciation expense Fraud losses c"a"p"ital outlay ~-Governmnental Funds o~bi" Pn"ndp1C'"Payment - Governmental Funds ''. '.lf.~~i1i~g u~~f~: r~nt exp en Se 48,55 o. 126,86 1,466,655 9 TOT AL EXPENSES 633,538 2,631,85, (1,84,67) OTHER'i'INANCING SOURCES (USES) 1 IO, Per3ii~g 1i-3nsfei-s in 12! opei-.iling transfers out 13: 'I.?;. 1~:2_;. 1~~-~j~r I 3-4; I 3-5 I 3 Qpe!.~!i~~ transfers from/to - Not for Profit 9P~.~~t~n._tra~s~e~~ ~omit<? - Partner~hip ~~~-~~-~_i!1g transfers from/to - Joint Venture Operating transfers from/to - Tax Credit Operating transfers from/to - Other Operating transfers rrom1to primary go~~;ment 14 Oi,e~ii~g i~~f~~s fro~to comi,one~t unit 15C pf'q.ceeds from r-.jotes; "i.oans. and Bonds L 1,.6_~'... l'roceeds froml'roperty Sales.. ~ 1.~.~7.~~.tr~ordinary Items (net gain!(o~s) r iooso... Special Items (net gain/loss) Inter AMP Excess Cash Transfer In 192 Inter AMP Excess Cash Transfer Out ) 193 Transfers fro~ Program to AMP r T'..~~f~.'...fyo~ ~ t? Program 11 TQ!Af.i5~R,.f.l!,ANCING SOURCES (ljses) ii o O' i) 444,926 o 6 O' 444,926 6 s}z:m ii 562, ,926 (444,926) s6fiii 3i,Jt8,6ll8 o, o 31,88,82 1 EXCESSjDEFICIENCY) OF TOTAL REVENUE OVER (ljnder)total EXPENSES (I,643) (48,786) 562,132 36,452,379 MEMO ACCO@T llsfcj.~atin 112''. R.~q~ire~i""~~ua1 Debt Principal Payments ]13,. Beginningequiiy 11 o~o-q 1 ol_ Prior perid. adjl.lstments - desc?ri~e 1146:21"" PriOr p~riod ~djustments - describe. 114~ 6:;"'. ~.~o.~.l?~ri.?.~.adjus~m~n~~ - describe 114-4: caj)ital Contributions ~ LPs 1!~9«:2~~"' ~~?.r.p~~od ~d~iistiticots - desc~~e 114-6:' I I 4-7J Pno_r. p~n.<?~.~.~ju~~.ments.::.~e.~~n~e Equityv transfers J io4-8o~ EquitY.ti-ansfers I 14:9 Equity transfers I fo4'.'l(fo. Equity transfers (2,4,35) o' 6 6 1,52,54 o. 49,155 2,371,466 o ' o a: (49,155) (l,21{694) o..., 92)89,77 : o ij o

82 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Capital Fund Section 8 MulitFamily Program 14_872 (PVM & MW) 14_856 Section 8 Mod Rehab Program (MR3) 14_856 cocc Eliminations TOTAL o, Equity transfers 114, Prior period adjustments, equity transfers and correction of errors 1,52,54 (49,155) 115 Chang~s in. co~pensated Absence Balance 116 Changes in ~on~ingei:i~ ~i~b\li~y Balance 117 Changes in Unfecognized Peflsion Transition Liab 118 Changes in special Te~S~Vefance ~enefits Li3b. 119 Changes in Allowance for Doubtful Acct - Dwelling ' 111 Changes in Allowance for Doubtful Acct - Other - o' O: o: Ii i?-1 Ii i'i ' Ii ' ,HOUSING CHOICE VOUCHER PROGRAM ONLY Ad~iflistrative Fee Equity - ~~ginning Balance Administrative Fee Revenue Hard to House Fee Revenue hfss COordinator Grant.. A~di"i.Co~ts. I~~eStmeni""income Fraud Recovery Income, Ot"h'er Re~e~~-e, Com~enl.fr Other Revenue Total Aciffiin Fee Revenues T 181 OPf!rating Expenses Depreci.ilio~ Housing A.Ssistance Payment Portability in.. Other EXi,enses Comment for Other Expense Total Expenses,.,.,.,'""' Net Administrative Fee Administrati~e Fee E{)~iiy ~- Ending Balance Pre~24 AdministfatiVe Fee ReseNes Post-23 A.d~i~isifclti~e Fee"ilese;;es. o-- o i) -oo o: : ii,s o o- o 3,514,959 -, 3,46,135 _.. o: o o 7,168 53)89. o 3,17,92 23>61,515 :... 1 O, : 2,961, ,577 3,66:S36... o 3,66,536 i: 1'i 18-1 HousiJ'!g Assistar:ice ~-~ymeflts Equity - Beginni!1g B~_lance I fr8-1 Housing '.A:SsfSta'"~Ce Pa~ent Revenues Fraud R~OO~;ry Reven-~e Other Re~en~e Comments iof.bthef ReVenue I i'i8-25 Investment iflcoole l Total HouSi~!i"-ASSiS<lntaCe,payments Revenues 11 1so-oso ' HOuSi~g ASsistance paymellts 1118:9> Other Expenses... I ] i so:q91 Comments for dthete;p~set' 1118-IOO: : : : 1118' _.,n=n w Total HouSini ASsiSllllta~e p~ymeni" Expenses Net Housing "ASSistance payments. HoUsill~ -~S!~~~~,~arrrients Equity - ~~-~(~,,*-~l~ricxj.. Housini.ASSfSiance Payments change tn A11waflcC fof.bo~bifufl ACcounts - Dweufng Rents canges in allowance ror boiibfuu Accounts - Other.... 'Administrative Fee Equity Housing Assitance Payments Equity Unit months available Number or u rtit. ITlOnths leased =,., '===,,, 6 o ii o. o: O 'ij'' " ii 632,661 27,736)79 53,789 3\87. - o: 28,629,413 ; (85,538j. (172,876)' 64,22-48,735

83 111i' , );!25-1,, r12s:3 ', 125-4, 125-5'. 125,', 126( 126,1, 126,2: 121' , I ASSETS: Housing Authority of the County of Monterey CA 33 JUNE 3, 216 CURRENT ASSETS: Cash: Cash - ~nresiricied Cash - restricted - modernization and development Cash - other restricted Cash - tenant security deposits Cash - restricted for payment of current liability Tol~I rash Accounts and notes receivables:, Accou n ts rec~i~3ble ~ PHA: projects NR: HUDother projectsoper Subsidy NR - 'HUD other projects Cap Fund ' ' AIR - HUD Other proj.~~ts q~~er Accounts.~~iy3~1~.-.. Hl!~ ~.the~ projects, Accounts recei~3ble - other go~emment AIR - miscellaneous - Not F or Profit AIR - rnis~ellaneous - Partn~rship.,.AIR - miscellaneous - Joint Venture AIR - ~iscetiin.eous - Ta~ 'Credit AIR - miscei1a;1e ous - Other AcCountS recei;3ble - miscellaneous A.ccountS ~~~~i~~ble- tenants Allowance for doubtful accounts - tenants A11owance for doubtful acco.unts - other.. Notes and ~~g.iges rf~i~abie- c~_rrent Fraud re'co~e' ', ~VM~" ' " Allo~~n~ for doubtful accounts - fraud 129 AccrueCi""interest receivable 12, NA! otal i-~~~i~~~les, i:i,et of allowances fo~ doubt~) ~~~9~~!s 1 current investments 131 f. investments - unrestricted 132 t. lnvesiments -~ restricted n~estme~tS": Restict~ for payment of current 1'iabi!TtY. 143 Inve nt Qrie; l '~ AJIOWan ce "ror obsjete inventories "Ifltef pr~~i-~m - due from i~4-: ~4-~f.h~-~s~i~,~~~e)d_ f~r sa~e i i soj TOTAL current AsstTs J f :m 167!" 168' 16 NNCURRENT ASSETS: capitai"assets: (ferei-ence detailed schedules prepared.separately) L.i~d B~itdingS FU~it~r~.--equipment & machi~ery ~-d~ei1ings "FUi-nft u re, ecillfp~fni & machineiy- adrrlfrlistration _Lease11_1d impro.v~m~~-js....,, AOCU'm~1aied depreciation CO~StfUCtiOn in ProireSS ifr3stnicillre "t?tat,.~l']!,~~-~~-t-~. net or accumulat~~ ~~p~~i-~~~1?" Discretely Presented Component Units {14i,'951 31,819,785 1,68,257 38,3,993, I) o:. i,6{473 1,65,473 84,579 (25,8) (o,oo 16 1,126,15 1,149)86, 1,833,735 I),., 4,179,544,. 251,948,887, '" 4,536,749 2,26,463 (41,731,221) 14,458,14 ' ,598,436 TOTAL 13,992,936 44,526,54 1,234,226 59,753,216 8,688 8,688 68,26 16,142,491 16,142, ,866 (3,462) (177,399) fooo 416:539 (416,539) 4,217,14 2,358,44 f37,6 : Ui:i:i.135 ci 159,91 (31,477 44,684,51 273,863,38 : 4,91,469 :... 3,723}75.. (5{92:656) 14,54: ,81, ,,, 171-2/ :n1i:oio' Othe r non-current assets: Notes an(i""ffiortgages re cei vab1e - non-current - NOt ror Profit N~tes a~ci""inortg~ge.~ tec_eivabie ~ nofl-c~~ent - Parti:iership NOt~;, and mo~.g~_.ies' receivablc -'";;On~current - Joint, Venture

84 ' ; i"12-4:: I 'i 173: ) ; i74-5; 174' \ 176:oro; ' 176'.ci,ici "i16:osci: 18 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Notes and mortgages receivable - non-current - Tax Credit Notes and mortgages receivable - non-current - Other NOtes a~~ fllongages ~~~~fr~ble - f:l~,n-current Notes and mortgages receivable - non-current - past due - Not for Profit Notes and mortgages receivable - non-current - past due - Partnership Notes a~-~ m~ng.ige~. f(!ceivable - non-current - past due - Joint Ven_ture Notes afld 'Jl1rtgag~s receivabl~ - non-current - past due - Tax Credit NOtes ruid ~ortgages receivable - non-current - past d~e -Other. N1eS 8.rid mortgages receivable-non-current - past due. Gi-.ints Re cejvab1e - non current Other assets ~ Not for Profit h 'N Other assets - Partnership Other assets - Joint Venture Other assets - Tax Credit Other 3Ssets"- o'ihe~ Othe; assets lnvest~e~t i~ ioi-~i" ~eot~ re ~ Not For Profit 1.nVeStrriCnt.in ~OIOj..;.eiitUre - Partnership investn";ent in JO~i~t'vent,ure - Joint Venture "i~~~stm e~t i'o "ioini venture -TIDC Credit I~e Stment in Joint venture - Other!~~Cstment in joint venture TOTAL NONCURRENT ASSETS Discretely Presented Component Units O: 1,23,28 1,23,28 272,81,644 TOTAL 78,99,63 78,99,63 5,565,996 5,565,996 1,2 1,2 37,467,94 2;; DEFFERED OUTFLOW OF RESOURCES,., ",,,, w-, 48, ,792 29'TOTAL ASSETS and Deferred outflow of Resources LIABILITIES AND EQUITY: Liabilities:., ' ' = Cul"Tent Liabilities: 3 t 1 [ ~ank?verdraft 312;; Accounts payable :', 9 days 31 if... Accoums payable > 9 days past due Accru~d.~ag~payroll taxe~ I?.ay~ble ACcnied compensated absences.... ACC~ed ~Ontingency liabili.t}'... ACCI"Ued i~terest p~yable ' A/P-~,HUJ.) PHA Progra~s - op~;~iing Subsidy j,,jp"~" HUD PHA Prog~a~s ~ capitaf Fund NP - HIJDPHA Progra~s - Other.. - ~-~}j,,. A~~,nts payable - ~ RH~ '.~.~?g~a~s.. -~-~.?.). ~-~counts Paya~le - ~~-~.P.'..~J~~~ ~ ::'348-1' i348-2i. f i348-3, ~34g;jj : Accounts payable - other government Ten3nt security dep~~i"i~ cffp... C8pital ProjectsfMOrtgage Revenue curren t Portion of L- fciebi -caj)iiat pro)ec1s1mortgage revenue bonds, _C~rrent portion o(~t_ :.~.~~i -?pe~~~_i.~g borrowings Other current liabilities Accrued liabilities - other Interprogram - due to Loan Liability - current - Not for Profit Loan Liability - current - Partnership Loan Liability - current - Joint Venture Loan Liability - current - Tax Credit Loan Liability - current - Other Loan Liability - current 315,423,787 1,618,86... o 24,71 42,362 ii 455,46,265 3,24, ,184 46,324. I 1,835,353 4,428 4,428 1,3,681 22,877,429 22,877, ,472 16,894,28 ; o ci

85 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Discretely Presented Component Units TOTAL 31, TOT AL CURRENT LIABILITIES NONCURRENT LIABILITIES,, 351- JO, Long-tenn debt - CFFP Long-term debt -Capital Projects/Mortgage Revenue 35 I Long -Term Debt, Net of~urrent - Capital Project~Ortage R~venue 352 Long-term d~bt, net l?f c1:1rrent - operating borrowings ' 353 Non-current liabilities- other 354 Accrued Compensated Absebces - non current =r3 s s-1 Loan Liability- non current - Not For Profit, Lo~n Uabmty' _ non current - i>artnership 'i Loan Liability - non current -Joint Venture ~.355-4, Loan Liability- non current -Tax Credit Lo ~n Liability - non 9urrent -. Other, , Loan Liability - non current F ASB 5 Liabilities Acrued PenSion anci OPEB Liability TOTAL NONCURRENT LIABILITIES 52,737,918 57,25, ,877,54 24,928, ,877,54 24,928,866 24,928,866 3'. TOTAL LIABILITIES Deferred ~evenues Oper Subsidy Deferr~ Revenues Capital Fund Deferred Revenues Othe~ DEFERRED INFLOW OF RESOURCES 251,615,458 26I,954,647 81,833 81, , 513/ EQUITY: Nonspendable Fund ~alance Net Invested in Capital ASSe'iS.,, Restricted f~na"balance Corniued fu!ld Balance Assign~ ~.Ulld Balance ReStricted 1\ie1 Positio~ u~~~signed fund Balance Uflrestricted Net Positio!l TT AL EQUITY/NET A,~~ETS 61 TOTAL LIABILITIEf~EFERREDINFLOWS AND EQUITY. Proof of concept }REVENUE: 73;:... i-.jet tenant rental revenue 74 Tenant revenue - other 75 Total te~ant revenue 76- JO HUD PliA grants - Housing Assi Payments 76-2 HUD. PHA. gfants - "Adininistrative "rees e3filed 76-3 HUD PHA grants~ FSS Coordinator,,, 16-4 ~ti" i>ha g_rants - Actual in~.~p.e~~en_<p~bj\~-~-cc~. ~~di~ OOsts 76-5 HUD PHA grants - Total prelimin~i)i'fees earned 76-6~... "iruri.. PHA grants - 1ritefes1 earried"o n advances 1666~69 HUD Pi-iA grants -~- A.d~in f<:e ca~cul.itiorl ~es<;:ription ~--.?.96 HUD 'PH.~_.o_peta.~ing gr~ts,, '"~=--=, 76' HUD PHA operating grants 161{ capiiai Grants, 771; Management Fee - HACM [, ll712(?, --Asset Management F;~ ~,, 5,56,337, 58,995,35, JjJn, ,9 5,867 (2,12,189) 87,688,568 63,88, ,649, ,423, ,46,265 11,46}6i 15,1, , ,176 11,219,253 15,231,7 27,813,76 3,52, ,425, ss(siio 31,863,18 2,36, ,275...

86 Housing Authority of the County of Monterey CA 33 JUNE 3, Bookkeeping Fee 774 Front Line Service Fee 775 Other Fees 77 Total Fee 'Revenue 78 ' Other g~~~~ment grants (must be analyzed individually) 711- I ~ in~estmen1 incoitle - unrestricted - HAP?i 1~2/, Investment income- unrestricted -Admin fee 7 I I oor.i_~yestrne~i i~coi:ne _ 1:1.~~estricted 711 oo: Investment income - unrestricted 112';.. Mortgage intere"si "income 113 ": Pi-O~eds from dispo.slio n Or assets held for sale. 7131,.. C:ost'or sale assei,' \ Fraud recovery - HAP 7 i"4-2~ Ff3ud recovery - Admin Fee 1 ~ ~ ~; : : "tf~~a reco'"'.ery Other revenue 116: Gai~ or 1Ss o~ s~ie or"fi~ed assets 12-1 o InveSlm~~t i~com e ~ rcstrictecf- HAP 72-2 Investrrient.inCOine _ resiricte"d ~ Adm~n Fee 12 1n\;eStmeii't inoo~ e': ~estricted 72 Investro"eni i~co~e - restricted :TOTAL REVENUE 911 ; , 91siii' EXPENSES: AdminiSifa"iiVe AdminiSt~ati~e salaries Auditi8 rees.. Manageriie~t. fee - _PHA Management fee' - Third Party Manageme~t Fee Bookkeeping Fee,:\~~e:~:J~lng and Markt::tin~,, ~~pioyee benefit_ con_tri~.~~i~ns2. ~~~inistrative Office Expenses, Legal ExpenSe 918. Travel Allocated o;;e,head 919 Other 91, jo~~. ~P.~f~ting - Administrative 92; A~set Ma~as~~ent'Fee i Tenant services "'921\' Tenant' sefvices - salaries ~>:22"' Relo~tiOO costs E~pfoyee benefit contriblltions- tenant 5eIVices 924 Tefl~rit sei-vices - other " 92soo',, Total Te'~"a~i' se~ces Discretely Presented Component Units o 58,17 43,182 43,182 o, Qi 13,398,835 12,487 12,487 25,253, , ,25 299, , ,43 12, 25,619 22,573. ii,215 92,78 12,319 o: TOTAL 12, 36,974 7,63 355,879 1,397,132 7,168 91, ,584 53,789 s:i:189 17,578 19,117,876 o "21,389 21,389 71,47,775 4,558, ,49 299, ) ,43 12, 65)5 1,575, ,13 177,995 28, ,753 '. 166,551' o 49) ,26 513,685 93foo 932) 9:iJoot Utilities :.. ~~te~:... Electricity Gas 934' Fuel 935; Labor..._.. o 717, , )55' o..

87 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Discretely Presented Component Units TOTAL ow ' ( : 943-6:: ' : /. 955i 95ff 961 IO '' , 962 t,wu.,,.,, ,.96iciO 9691)' 97' Sewer E.ITlpJoyee beflefit contributions- utilities other utilities expense Total Utilities Ordinary maintenance & operation _Ordinary m~intenan~ and ope:rations - labor Ordinary mainienance and operations - mate.rials & other Ordinary maintenance and operations contracts - Garbage and trash Ordinary inaint~nan~~ an~ operations ~ontracts - Heating and Coolirig Ordinary maintenance 3.nd operations contracts - Snow Removal. "Ordinary main tenance and operations co ntfacts - ElevatOf Maintenance.. o rdinary mai menance and operations contracts - Landscape & GrounCi'S Ordf~:a!Y.m3i~i"~rla~~.. ~nd operations con.~racts - (!nii.!~~aroun~.... OrdiOii:ry' ~ai~te~;n~ and operations contracts - Electrical, -~. Ordi~ary-~3i~ien~nce atld. operations contracts - Plumbing Orcii~aIY maintena n ce a nd operations contracts - 'ExtCfffiination 9~di~ary ma1n.tenance and operations contracts-janitorial. Or~i~~ry ~~intenance a.nd operations contracts - Routine Maintenance Ordi~~ry m~intenance and operations contracts - Misc o.~~-i_n~ry.:maintenance and operations contracts Emi,ioyee; benefit contributions- ordinary maintenance T ~t8i M~intenance PfOieciive services Protective services - labor Pf1ective services- other contract costs "Protective services - other. ~mp1y~ ben'efit contrib':jtions- protective services Ttal Protective Services General ~xp~f!~~~,..,. Property Insurance LiabititY ii1s~ra nce WOfk'infniS compensation AJI oiher Insurance TOt8f'i~~~fance Premiums Other gefl~f3f e_xpei:ises Compensat'ed iibse~ces Payments in 1ieU "Or"i~es Bad debt - tenant rents Bad debt- mortgages Bad debt - other se~era nce e~pense.. fqiai Other Gene~al Expense Interest on.. Mortgage (Or Bonds) Payable Intef~~t ~n NotCs Paycibie (Short and Long renn ) Amrii23!in Or Bond IsSue Costs ~~~~L(~!~!~e~f~pense and Amo~i~1i_o~~-~~1 TOT AL OPERA TING EXPENSES EXCESS OPERA TiNG REVENUE OVER OPERA TING EXPENSES 248, ,516 92,544 1,745,287 67,24 1,34, ,332 46,275 42, ,336 7,8 17,32 33,776 43,933 15,549 27,255 15,653 25,225 26,356 45,718 49,894 83,68 86, ,18 98,395 'i'93, ,91 22, ,33 1,866,697 J96,i'99 492,481 2,17,858 4,123,89 76,861 93,712 76,861 93,712 33, , ,987 73, ,651 1,666,856 o: 68, ,13 ' 7,822 99,277 1,262,724 1,977, , ,616 4,834,34, 5,36,63 o; 5,83,65 5,286,219 12,44,853 23,42,44 12,813,1 I

88 Housing Authority of the County of Monterey CA 33 JUNE 3, 216 Discretely Presented Component Units TOTAL IO 973-2' iiiioo Extraordinary maintenance Casualty losses - non capitalized Mainsti-e"am 1&5 Year HOmeo~nership ' Litigation Hope VI - Section 8 Tenant Protection Portability Out FSS Esc~O~ Deposits All Other "special"; FUP, NED Etc AilOther 1~~~) Ho1.:1~.i.'1:&.. A~.sitance Payments 69,686 (1,249) i34,758 (237). 39,62 97, , ,4 IO 1,59,29 25,765,642 28,728, HAP Portabfrity-In \ 978" Depreciation e~pense Fraud 1QSSes. Ca"Pit3i o~tlays - Governmnental Funds DebiPrin"dPie rayment - Governmental Funds.,.fii~li~g: ~-~}t.~~-~e.~~ ~xp~nse. ' "" 6,69,654 8,76,39 9 TOT AL EXPENSES OTHER FINANCING SOURCES (USES) I IO. op~~ati~!i"ii-~~sfe~~ in I 2 opera1irig"transrers.. Out o;. "6p era~1ng transfers fro_mfto. ~ N1" for Profit 163:2. oper~ting transfers from/to - P~rt~er~hip 13-3 Operati~g.trariSf~rs.frO~i~ ~ Joint Venture IOOJ-4 Operating iransfers from/to - Tax Credit I 3-5 Operating transfers from/to - Other '"9P'e~~J.~i}~~~;fers rr~m11.o. P~m~ry so~e~ment 14:" operating transfers rromlto CO~ponent unit I 5 t>ro ceeds frffi"notes).o.ins, ~~ci Bnds I 6 Pro~s from Property Sales. ioo 1,.E~t;a-Ordi~3;;/'uems (net gai;noss> i 8 Sp~i;I Item; (;;et gain/joss) 191 ~ I~ter AMP E~c ess Cash Transfer In 192 1~9I; I94' io1 Inter.AMP.. EX.C"ess Cash Transfer Out TranSrers,from=p;Qgram 1' AMP Transfe~}?~:.~ to PrOgram.,,TAL.OTHERf,tB~CING SOURCES (USES) IOOOOiEXCESS!.. (DEFICIENCY),.,,... OF... TOTAL REVENUE. OVER.. (UNDER) TOTAL EXPENSES MEMOACCOUNT INFORMATION,,...,.=.. van, = "' j 16:io Required Arnl~al Debt Principal Payments 113, Beginnirig equi.t)' , P1f period adj~~tm~_f!_ts ~ desc~?e 114.-~~T'"~ ~~?r P~rio~ adjust~~_n(~ '.~.. desc~~e 11.~~~::g~.~f :: '"PriOf peri_o~.~~ju~-~~ents - describe 114-4' Capital Contributions - LPs P/i?r peri~d'adjust~~ilts. - descrihe 114-6t ~rio;_ pe_~~.l adjust_m.e~ts.:: ~.~~~ri~~ I I4-7!' Eq~iiy transfers Equity transfers I i 4-9\ Equity transfers 11 '4'.1 oo:. Equitytra'i!'si'ers 19,118,944 (53,148) 6,81,772 57,726,557,. 6,341, ,926 (444,926) o 6 5os3is4 31,318, ""6'' ii o: 31,827,67~ 42,534, ,634.. ti o'