ANNUAL REPORT

Spokane Housing Authority dba 2007-2008 ANNUAL REPORT ACCOMPLISHING MORE THROUGH INNOVATION AND COLLABORATION.

Message from the Board of Commissioners Leading the way, our Executive Director, Steve Cervantes, along with the Executive Team Members, focused on strengthening community partnerships and improving organizational communication, procedures and operations during fiscal years 2007 and 2008. Our mission to create livable neighborhoods was the primary focus while creating or renewing partnerships with community non-profit, private and government agencies. This outreach included social and human service agencies, funding resources and developers. While there were several changes in staffing, many organizational procedures were revised in efforts to streamline processes for staff and better serve clients. This included revision of policies, forms and new processes within the organization to review and continually improve current operations. Due to foreclosures, condo conversions and substandard conditions, downtown Spokane experienced a loss of 200 affordable housing units during the summer of 2007. One of the buildings affected by foreclosure, the Commercial Building, provided housing for 45 very low income residents. We worked closely with the new building owners, HUD, SNAP, Spokane Mental Health and the Homeless Outreach Team to relocate all the tenants within two months. It was an unfortunate obstacle; however it demonstrated that our community partnerships are growing stronger. We also remained focused on the redevelopment of three historic properties in Spokane. In March 2008 we celebrated the grand opening of Cornerstone Courtyard, which provides 50 units of affordable workforce housing in downtown Spokane. The Pearl on Adams and the Martindale Apartments are in the beginning phases of redevelopment. We congratulate the staff for their efforts and success these past two years, as it provides a solid foundation allowing our services and partnerships to better serve the housing needs of our community. Bill Zeck, Chair - 2007 Commissioner - 2008 Judy Butler, Commissioner - 2007 Vice Chair - 2008 Mark Dresback, Commissioner - 2008 Terri Symbol, Vice-Chair - 2007 Chair - 2008 Julia Rahmaan, Commissioner 2007-2008 Janet Bastine, Commissioner - 2007

Redeveloping the Borning Building: Cornerstone Courtyard In 2004, NEWHS had a vision for the building s reemergence as workforce housing in the downtown area and purchased the Borning Building. This was a bold action for the NEWHS Board of Commissioners. Normally financing is in place for its redevelopment before a building is purchased by NEWHS. However, it was a unique opportunity as buildings downtown were increasing in price and quickly being purchased for conversion to high end housing. Interim purchase financing was provided by Bank of America. The 45,000-square-foot building at 151 S. Adams in downtown Spokane was built early in the 20th century as a commercial warehouse with limited office space. Over its lifetime it housed several businesses including Bekins Moving & Storage and a medical technology company which created the first birthing bed. Northwest Museum of Arts & Culture/Eastern Washington State Historical Society, Spokane, Washington / L87-1.14074-38 The Cornerstone Courtyard Building is quite unique. One half is constructed of wood, the other concrete. This presented architectural and construction challenges to meld these two halves smoothly. There are large cylindrical columns throughout the concrete side of the building and twelve inch beams on the wood side. These elements were incorporated into the apartments finished designs, giving the units a city loft feel incorporated with an industrial theme. The design allowed for the development of 50 apartments by cutting a 1,253 square foot slice out of the middle of the building. In addition to creating an interior courtyard, this allows for apartments to have a generous amount of natural light. The apartments include ten 3-bedroom, 2-bath, 1,131-square-foot apartments; sixteen 2-bedroom, 833-square-foot apartments; and twenty-four 1-bedroom, 571-square-foot apartments. The affordable financing allows rents to range from $398 to $697 in two affordability ranges. The funding sources enabling the successful development included: Low Income Housing and Historic Tax Credits from the Washington State Housing Finance Commission Equity Investment from US Bancorp Community Development Corporation Trust funds from the Washington State Community, Trade and Economics Department HUD HOME funds from the City of Spokane; and Community Development Block Grant (CDBG) funds for off-site improvements. The City s Lead Safe abatement program also provided funding. Federal Home Loan Bank True to its history, this building is contributing to the thriving downtown Spokane economy.

Who we are, what we do Spokane Housing Authority dba Northeast Washington Housing Solutions (NEWHS), is the third largest Housing Authority in the State of Washington, serving the five counties of Spokane, Lincoln, Whitman, Stevens and Pend Oreille. We serve approximately 5,300 households or approximately 10,000 individuals. We are a public body corporate and politic of the State of Washington. A six member Board of Commissioners (whose representatives are appointed by the Mayor of Spokane, Mayor of Spokane Valley and the Spokane County Board of Commissioners) oversees NEWHS. Our staff of 67 employees serves the Assisted Housing Department, Development Department, Finance and Administration Department and the Property Management Department. NEWHS administers an annual budget of approximately $33 million, not including additional monies obtained for new developments. Each month NEWHS makes payments to local landlords in excess of $2 million. Assisted Housing Department This department operates a $26 million annual budget, which includes a variety of assistance subsidy programs. Programs strictly run by NEWHS are the Housing Choice Voucher Program (Section 8) with 4,620 vouchers and the City HOME Tenant Based Rental Assistance Program. There is also a Section 8 Homeownership program which requires the participant to be on Section 8 HCV for at least one year. Several programs run by Assisted Housing rely on referrals from many partnering agencies. These programs are County HOME, Shelter Plus Care Tenant Based Rental Assistance (TBRA), Shelter Plus Care Sponsor Based Rental Assistance (County And City), Washington Families Fund (WFF), Housing Opportunities For People With Aids (HOPWA CTED) (HOPWA REACH- County), Drug And Family Court, Family Unification Program, Homeless Preference Vouchers, Single Room Occupancy (SRO) and CTED HOME for Stevens and Pend Oreille County. Development Department The NEWHS Development Department is responsible for increasing the affordable housing capacity of the Agency -- working with our community partners to improve the overall quantity and quality of affordable housing in our service area. The Agency uses a variety of financing methods to perform development activities which include all aspects of traditional housing development. Since 1982, NEWHS has developed or acquired over 730 units of housing with an aggregate development cost of $44.8 million dollars. The Pearl on Adams (formerly the Helena Apartments) is under construction and will be completed in late 2009. Our newest acquisition is the Martindale Apartments in Hillyard, which will serve homeless persons, including veterans with needed services. Finance and Administration Department The Finance and Administration Department has an annual budget of approximately $1.5 million, and oversees all financial reporting, risk management and human resource services responsibilities. It also plays an integral role in the development activities of NEWHS.

Who we are, what we do Property Management Department The Property Management Department administers an annual budget of $5.5 million and owns and/or manages 820 units in the following properties: In Spokane, Washington: Cedar West, 4018 W Rowan Ave. (74 units) Cornerstone Courtyard, 151 S Adams (50 Units) Court View, 1217 N Madison (14 units) Heritage Heights, 3818 N Cook St. (62 units, elderly & disabled) Hifumi En, 926 E 8th (41 units, elderly & disabled) Newark, 1108 E Newark (6 units, permanent supportive housing for special needs) Parsons, 108 S Jefferson (50 units, elderly or disabled) Phoenix, 703 E Hartson (39 units transitional housing) Sharon Lord, 1207 N Madison (4 units permanent supportive housing) Westfall Village, 3724 N Cook St. (110 units) In Spokane Valley, Washington: McDonald Manor, 4224 N McDonald (16 units) Valley 206, 2400 N Wilbur Rd. (207 units) In Mead, Washington: Woodhaven, 12424 N Fairwood Dr. (72 units) Throughout Spokane County: Scattered single family homes and duplexes (75 Public Housing units) Nearly three quarters of these properties receive no government subsidy and operate as fully self-supporting entities. Those receiving subsidy do so primarily in the form of rental assistance to tenants. Also, within these properties, NEWHS provides a set aside of supportive housing for formerly homeless households, as well as service coordination, after school and summer activities. These various services are provided in partnership with 13 area service providers.

SPOKANE HOUSING AUTHORITY as of June 30, 2007 COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS REVENUE Government Grants Tenant Revenue Administrative Fees & Other Interest Income TOTAL REVENUE EXPENSES Administrative Expenses Housing Assistance Payments Program Costs Interest Expense Miscellaneous Expense Depreciation TOTAL EXPENSES INCOME(LOSS) BEFORE CONTRIBUTIONS Capital contributions & other adjustments to equity Change in net assets Net assets beginning of year Net assets end of year Public Housing & Capital Funds Section 8 Grants Tax Credit, Bond & Other Properties Unrestricted Fund $ 470,406 $ 23,613,671 $ 849,002 $ 139,121 $ 2,814 $ 25,075,014 303,259 3,461,390 3,764,649 12,984 56,718 1,537,666 1,607,368 10,454 29,080 252 95,207 49,008 184,001 797,103 23,699,469 849,254 3,695,718 1,589,488 30,631,032 32,267 61,019 18,990 840,127 1,167,241 2,119,644 21,011,655 736,210 21,747,865 550,141 2,432,530 83,314 1,083,402 4,149,387 1,143,309 26,045 1,169,354 8,784 36,941 3,931 13,324 62,980 375,339 17,895 1,054,265 68,761 1,516,260 966,531 23,560,040 838,514 4,125,034 1,275,371 30,765,490 (169,428) 139,429 10,740 (429,316) 314,117 (134,458) (26,630) 26,630 (169,428) 139,429 (15,890) (429,316) 340,747 (134,458) 4,363,893 1,626,581 15,441 1,654,026 1,573,897 9,233,838 $ 4,194,465 $ 1,766,010 $ (499) $ 1,224,710 $ 1,914,644 $ 9,099,380 Total Revenue by category Government Grants Tenant Revenue Administrative Fees & Other Interest Income Expenses by category Administrative Expenses Housing Assistance Payments Program Costs Interest Expense Miscellaneous Expense Depreciation Statement of Net Assets & Liabilities ASSETS LIABILITIES Cash & cash equivalents $ 486,112 Accounts payable $ 444,124 Investments 4,973,993 Interprogram payable 316,335 Tenant security deposits 232,184 Payable to HUD 6,725 Receivables, tenant and governmental 1,335,435 Accrued expenses 389,988 Interprogram receivable 281,889 Deferred revenue & other liabilities 341,734 Inventories 3,555 Bonds & notes payable, current 393,310 Other assets 515,358 Bonds & notes payable, noncurrent 21,974,937 Real estate held for sale - Other noncurrent liabilities 1,002,073 Land, buildings & equipment, net of depreciation 26,140,080 Total liabilities 24,869,226 Net fund equity 9,099,380 Total assets $ 33,968,606 Total liabilities & fund equity $ 33,968,606

SPOKANE HOUSING AUTHORITY as of June 30, 2008 COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS REVENUE Government Grants Tenant Revenue Administrative Fees & Other Interest Income TOTAL REVENUE EXPENSES Administrative Expenses Housing Assistance Payments Program Costs Interest Expense Miscellaneous Expense Depreciation TOTAL EXPENSES INCOME(LOSS) BEFORE CONTRIBUTIONS Capital contributions & other adjustments to equity Change in net assets Net assets beginning of year Net assets end of year Public Housing & Capital Funds Section 8 Grants Tax Credit, Bond & Other Properties Unrestricted Fund $ 495,264 $ 24,095,079 $ 797,513 $ 131,121 $ $ 25,518,977 295,758 2,528,929 2,824,687 27,974 37,980 145,031 1,799,786 2,010,771 10,206 41,418 550 82,561 42,953 177,688 829,202 24,174,477 798,063 2,887,642 1,842,739 30,532,123 31,100 25,761 17,427 439,470 1,616,464 2,130,222 21,125,276 625,800 21,751,076 593,616 2,609,609 144,819 1,208,697 4,556,741 799,002 20,725 819,727 15,298 15,639 4,945 13,468 49,350 372,278 12,805 687,902 62,282 1,135,267 1,012,292 23,789,090 788,046 3,140,016 1,712,939 30,442,383 (183,090) 385,387 10,017 (252,374) 129,800 89,740 44,539 44,539 (183,090) 385,387 10,017 (252,374) 174,339 134,279 4,194,465 1,766,010 (449) (992,816) 1,914,644 6,881,854 $ 4,011,375 $ 2,151,397 $ 9,568 $ (1,245,190) $ 2,088,983 $ 7,016,133 Total Revenue by category Government Grants Tenant Revenue Administrative Fees & Other Interest Income Expenses by category Administrative Expenses Housing Assistance Payments Program Costs Interest Expense Miscellaneous Expense Depreciation Statement of Net Assets & Liabilities ASSETS Cash & cash equivalents Investments Receivables, tenant and governmental Interprogram receivable Inventories Other assets Real estate held for sale Land, buildings & equipment, net of depreciation $ 4,260,386 3,065,089 441,501 439,755 3,247 529,136-33,412,109 LIABILITIES Accounts payable Interprogram payable Tenant security deposits Accrued expenses Deferred revenue & other liabilities Bonds & notes payable, current Bonds & notes payable, noncurrent Other noncurrent liabilities Total liabilities $ 1,035,989 312,933 234,505 364,277 440,028 678,739 22,746,229 926,465 26,739,165 Net fund equity 15,412,058 Total assets $ 42,151,223 Total liabilities & fund equity $ 42,151,223

SPOKANE COUNTY LINCOLN COUNTY 55 W. Mission Ave. Spokane, WA 99201 509.328.2953 STEVENS COUNTY PEND OREILLE COUNTY Stevens County Rural Resources 956 S. Main, Suite A Colville, WA 99114 509.684.3932 WHITMAN COUNTY Community Action Center 350 Fairmont Ave., S.E. Pullman, WA 99163 509.334.9147 Spokane Housing Authority dba 55 W. Mission Ave. Spokane, WA 99201 T 509.328.2953 F 509.327.5246 TDD 711 Northeast Washington Housing Solutions EQUAL HOUSING OPPORTUNITY