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Home My WebLink About10/20/2022 - Housing Catalyst - Agenda - Regular MeetingHousing Catalyst Board of Commissioners - October 20 2022 Agenda DATE:Thu October 20th, 2022 TIME:7:30am - 9:30am MDT LOCATION:Virtual Meeting via Zoom: https://us06web.zoom.us/j/85316249012? pwd=OTZJeENONmE4WVpTVy81QmN1ZE93Zz09 GROUPS:Housing Catalyst Board of Commissioners Julie Francis is inviting you to a scheduled Zoom meeting. Topic: Housing Catalyst Board of Commissioners - October 20 2022 Time: Oct 20, 2022 07:30 AM Mountain Time (US and Canada) Join Zoom Meeting https://us06web.zoom.us/j/85316249012?pwd=OTZJeENONmE4WVpTVy81QmN1ZE93Zz09 Meeting ID: 853 1624 9012 Passcode: 366410 One tap mobile +17207072699,,85316249012# US (Denver) +12532158782,,85316249012# US (Tacoma) Dial by your location +1 720 707 2699 US (Denver) +1 253 215 8782 US (Tacoma) +1 346 248 7799 US (Houston) +1 312 626 6799 US (Chicago) +1 646 558 8656 US (New York) +1 301 715 8592 US (Washington DC) Meeting ID: 853 1624 9012 Find your local number: https://us06web.zoom.us/u/kfdObqGE6 I. Attendees II. Call to Order (7:30-7:35)5 mins III. Mindful Moment IV. Citizen Input Two minutes per speaker V. Approval of Minutes from September 15, 2022 Board Meeting (7:35-7:40) BOC Minutes 9.15.2022 .pdf 5 mins VI. Action Items (7:40-9:05) a. Approval of Amended Agency Plan with MTW Supplement Board Action Memo MTW Supplement October 2022.pdf Housing Catalyst MTW Supplement - Draft for Board of Commissioners.pdf HC RES 2022-10-01 MTW Supplement 2023.pdf 10 mins b. Approval of Resolution Assignment of Remington Row Contract Board Action Memo - 2022-10-20 - Assign Remington Row Contract Board Memo.pdf HC-RES-2022-10-02 Assignment of Remington Row Contract Resolution Consent Contract.pdf 15 mins c. Approval of Resolution Authorizing Transfer of 15 Public Housing Units Board Action Memo - 2022-10-20 - Plum Transfer to Villages Board Memo.pdf HC-RES-2022-10-03 Transfer of 15 Public Housing Units Resolution.pdf 15 mins d. Approval of 2023 Budget HC FY2023 Budget Report v2.0.pdf 45 mins e. Approval of 2021 Audit Housing Catalyst 2021 Final Financial Statements ACFR without FDS.pdf VII. Staff Updates (9:05-9:10)5 mins CATHY MATHIS CATHY MATHIS TRACI MCGRAW KRISTIN FRITZ KRISTIN FRITZ TONYA FRAMMOLINO JULIE BREWEN a. Development Committee Update 1. Development 5-Year Project Plans and Milestones (October) 2022) The monthly reports are included here for your reference, but will not be a presentation unless there are questions. Development 5-Year Project Plans (Oct 2022).pdf Development Milestones (Oct 2022).pdf b. Other Updates 1. Larimer County Voucher Program 2. NAHRO Conference Debrief VIII. Legal Issues IX. Upcoming Events a. Development Committee - November 7, 2022 b. Finance and Audit Committee - November 14, 2022 c. Housing Catalyst Board of Commissioners - November 17, 2022 d. Outgoing Board Member Appreciation Dinner - November 9, 2022 Wednesday, November 9, 2022 – 6:00-9:00 pm Ginger and Baker, 359 Linden Street, Fort Collins X. WORK SESSION: Strategic Plan Goal 2 - Increase supply of affordable housing (9:10-9:25) Follow up from last month's Strategic Plan Goal Discussion Introduction to Goal 2 Memo to BOC Goal 3 final.pdf Strategic Planning Process - Board Prep - Goal 2.pdf 2018 to 2022 Five Year Plan Final Approved 5.31.2018 (002).pdf 15 mins XI. Adjournment - Housing Catalyst Board of Commissioners XII. Call to Order - Villages Ltd. Board of Directors (9:25-9:30) JIM MARTELL XIII. Action Items 5 mins a. Approval of Resolution to Authorize Acquisition of Remington Row Board Action Memo - 2022-10-20 - Acquire Remington Row Villages Board Memo.pdf VIL-RES-2022-10-01 Acquire Remington Row Resolution.pdf b. Approval of Resolution to Sell 10 Units Board Action Memo - 2022-10-20 - Sell 10 Units Villages Board Memo.pdf VIL-RES-2022-10-02 Sell 10 Units Resolution.pdf c. Approval of Resolution to Authorize Acquisition of 15 Public Housing Units Board Action Memo - 2022-10-20 - Acquire Plum - Villages Board Memo.pdf VIL-RES-2022-10-03 Acquire 15 Units Plum Resolution.pdf d. Approval of 2023 Budget e. Approval of Resolution for a Grant to Fund the Mission of Housing Catalyst Resident Services VIL-RES-2022-10-04 Grant for resident services.docx XIV. Adjournment - Villages Ltd. Board of Directors KRISTIN FRITZ KRISTIN FRITZ KRISTIN FRITZ TONYA FRAMMOLINO Housing Catalyst Board of Commissioners Minutes – September 19, 2022 I. Attendees Commissioners: Cathy Mathis-Chair, David Bye, Emily Francis, Ann Green, Lizette Mill, Jennifer Wagner, Hep Wilkins Staff: Jessica Born, Julie Brewen, Michele Christensen, Justin Corey, Tonya Frammolino, Julie Francis, Kristin Fritz, Tara Gaffney, Rachel Gaisford, Angelika Lintner, Traci McGraw, Meg Stewart Guests: Attorney Jim Martell, Alexis Odden (Eide Baily), Mackinzie Wilson (Eide Baily), Meaghan Overton (City of Fort Collins), Joseph Penta (Development Committee Member), Anne Nelsen (Development Committee Member) II. Call to Order Chair Cathy Mathis called the meeting to order at 7:32 am. III. Mindful Moment Chief Executive Officer Julie Brewen led the group in a Mindful Moment. IV. Citizen Input There was no citizen input. V. Approval of Minutes from July 21, 2022 Board Meeting Commissioner Hep Wilkins moved to approve the minutes of the August 18, 2022 meeting. Commissioner David seconded, and the motion was passed unanimously. VI. Action Items a. Approval of Housing Catalyst and Larimer County Housing Annual Agency Plan Director of Housing Assistance Traci McGraw discussed the request for adoption of the annual Agency Plan for both Housing Catalyst and Larimer County Housing Authority. Public Housing Authorities must submit an Agency Plan to the U.S. Department of Housing and Urban Development (HUD) for their public housing and Housing Choice Voucher (Section 8) programs each year. The Board Action Memo, which includes detailed information, is included in this meeting packet in Boardable for reference. Ms. McGraw noted that an amended Agency Plan, with the addition of the Moving to Work (MTW) supplement, will be presented to this Board next month for adoption. Ms. McGraw reported on the development of a Resident Advisory Committee, noting that it has been difficult in the past to get participants for this Committee. However, the formation of a Committee is on this year's work plan; several people have expressed interest in participating, so the hope is that this Committee will be in place soon. Commissioner Wilkins moved to approve Resolution HC-RES-2022-09-01, and authorize the Board Chairperson to execute appropriate HUD submittal documents. Commissioner David Bye seconded, and the motion was passed unanimously. b. 2021 FYE Audit Presentation Chief Financial Officer Tonya Frammolino introduced Alexis Odden and Mackinzie Wilson from Eide Baily, Housing Catalyst's auditors, who joined this meeting to provide an update on the Audit of the 2021 financials. Ms. Odden introduced the engagement team from Eide Baily. She noted that the Audit ended with a clean, unmodified opinion. No deficiencies in internal controls were identified. The opinion is that the organization complied in all material aspects of the Single Audit reporting. Ms. Odden reviewed the Management Letter presented to the Board, noting this is required communication to identify and specify significant risks, accounting policies, accounting estimates, disclosures, and difficulties encountered during the audit. There were no findings in any of these areas. Ms. Frammolino expressed her appreciation of the hard work of Eide Baily and the Finance team. The Board tabled the approval of the Audit until the next meeting to give Commissioners more time to review it. VII. Committee and Staff Updates a. Development Committee Update 1. Development 5-Year Project Plans and Milestones (September) 2022) Chief Real Estate Officer Kristin Fritz provided an update on several projects. The 5-Year Project Plan and Milestones were attached to the meeting's packet in Boardable for reference. Ms. Fritz noted that information will be presented to this Board next month on potential funding sources for Remington Row. Housing Catalyst’s Montava project will be pushed out by approximately one year. The project plans will be updated to reflect this change. Work has begun on the property at Village on Bryan. Temporary relocations to a local hotel are occurring and will be ongoing during the construction. Lease-up at Oak 140 is expected to occur during the first half of 2023. Lease-up for Impala is expected in early 2024. Village on Elizabeth and Village on Stanford will be coming up on year 15, so planning has begun to look at any work that will need to be done on those properties. Ms. Fritz extended appreciation to those who attended the Urban Design Awards and the Oak 140 mural unveiling. The suggestion was made that assistance be provided to Commissioners on how to connect to Housing Catalyst's social media. Communications Manager Rachel Gaisford will present information at a future meeting of this Board. b. Audit & Finance Committee Update Ms. Frammolino provided an update from the Audit & Finance Committee, reviewing the current Board report, and noting that the full report, as well as Eide Baily's presentation and Audit Report, will be provided to the Board. c. Property Operations Report 1. RentTrack Update Chief Operating Officer Michele Christensen reported that in 2021 Governor Polis signed HB 1134 into law creating the first statewide rent-reporting pilot that aims to facilitate rent reporting in affordable and market housing. Housing Catalyst was selected to participate in the pilot (Village on Shields) to help residents build credit without increasing debt. RentTrack allows Housing Catalyst to report rent payments to all three credit reporting agencies. So far the pilot has shown positive results and Housing Catalyst is looking to expand the program to more properties. Assistant Director of Property Operations Jessica Born provided an update on the launch of RentTrack. The presentation is located in Boardable for reference. Ms. Born described the outreach done at Village on Shields. About 20% of residents at Village on Shields are currently enrolled; the average credit score has increased from 584 to 615. The Board requested an update on program metrics and results in six months. d. Agency Operations Updates 1. Behavioral Health Grant Ms. Christensen reported that Housing Catalyst received a renewal of the Larimer County Behavioral Health Services Impact Fund grant from Larimer County, in the amount of $102,449. This grant funds the clinical therapist at our Permanent Supportive Housing (PSH) properties. 2. Wellington Waitlist Ms. Christensen provided an update on the Wellington waitlist demographics and reported that at this time the profile of the wait list applicants is consistent with the community’s demographics. Ms. Christensen also reported that Housing Catalyst was awarded 12 new fair share vouchers; Larimer CO was awarded four. These vouchers are not targeted to any particular population. VIII. Legislative Issues/Updates (8:55-9:10) a. Colorado Legislative Update There were no updates. b. National Legislative Update There were no updates. c. Fort Collins City Council Legislative and Business Update Commissioner/Mayor Pro Tem Emily Francis gave an overview of current activities including the status of the Land Use Plan update. IX. Legal Issues Attorney Jim Martell provided a brief update on the case that was discussed at last month's Board meeting. X. Upcoming Events a. Development Committee - October 3, 2022 b. Finance and Audit Committee - September 26, 2022 c. Housing Catalyst Board of Commissioners - October 20, 2022 d. Outgoing Board Member Appreciation Dinner - November 9, 2022 XI. Adjournment Chair Mathis adjourned the meeting at 9:20 am. ACTION ITEM To: Housing Catalyst Board of Commissioners From: Traci McGraw, Director of Housing Assistance Programs Meeting Date: October 20, 2022 Action Item: Request for Board approval: 2023 Moving to Work Supplement and amended 2023 Annual Agency Plan for Housing Catalyst Alignment to Strategic Plan: Goal 2: Increase supply of Affordable Housing Strategy 2.6: Maximize Rental Assistance Background: Housing Catalyst submitted its 2023 Annual Agency Plan (approved at the September Board of Commissioners meeting) to the U.S. Department of Housing and Urban Development (HUD) by the October 18 deadline. The plan has since been approved by our HUD Field Office. Today, we bring the MTW Supplement to the Board for review and approval. In 2022, Housing Catalyst was among 29 agencies selected to join the Landlord Incentives Cohort of the Moving to Work (MTW) Demonstration Program. MTW encourages agencies to adopt an entrepreneurial spirit as they create and test solutions to common challenges. Agencies in the MTW demonstration have pioneered several innovative policy interventions that have been successful at the local level, and subsequently rolled out to the rest of the country’s public housing agencies. Housing Catalyst’s 2023 MTW Supplement outlines the activities and waivers the agency plans to implement in the coming year. Following Board approval, the supplement will be submitted online to HUD and added as an amendment to Housing Catalyst’s 2023 Annual Agency Plan. In future years, the MTW Supplement will be included in the Annual Agency Plan. Description: The MTW Supplement addresses Housing Catalyst’s plans to make several operational changes through MTW activities and waivers. As part of the Landlord Incentives Cohort, the agency plans to focus on two initiatives: 1) Leasing bonus: One-time payment to new property owners who have not received a Housing Assistance Payment in the prior three years. 2) Damage claims: Fund to reimburse property owners for the cost of tenant-caused damages (minus the security deposit). Damages must be documented and accepted by Housing Catalyst. To support Housing Catalyst’s larger goal of using MTW flexibility to streamline administrative processes and reduce agency costs, the agency has also applied for several waivers: • Re-examination - Self Certification of Assets • Rent Reasonable - Third Party Requirement removed • Housing Quality Standards - Third Party Requirement removed • Project Based Vouchers Increase in PBV Program Cap • Project Based Vouchers Increase in PBV Project Cap • Project Based Vouchers - Elimination of PBV Selection process for PHA Projects without improvement, development, or replacement These waivers help make MTW initiatives sustainable since no additional funding is provided through the MTW program. Recommendation: Staff recommends that the Board adopt Resolution 2022-10-01 for the approval of the 2023 MTW Supplement and amended 2023 Housing Catalyst Annual Agency Plan. MTW Supplement to the Annual PHA Plan U.S. Department of Housing and Urban Development Office of Public and Indian Housing OMB No. 2577-0226 Expires: 03/31/ Purpose. The Moving to Work (MTW) Supplement to the Annual PHA Plan informs HUD, families served by the PHA, and members of the public, about the MTW Waivers and associated activities that the MTW agency seeks to implement in the coming Fiscal Year and updates the status of MTW activities that have been previously approved. It also provides information about Safe Harbor Waivers, Agency-Specific Waivers, compliance with MTW statutory requirements, and evaluations. The MTW Supplement does not replace the PHA Plan. MTW agencies must continue to submit the applicable PHA Plan. MTW agencies that are not required to submit annual PHA Plans under the Housing and Economic Recovery Act of 2008 (HERA) must submit the MTW Supplement annually, in addition to holding public hearings, obtaining board approval, and consulting with Resident Advisory Boards (RABs) and tenant associations, as applicable, on planned MTW activities. Applicability. Form HUD-50075-MTW is to be completed annually by all MTW agencies brought onto the MTW Demonstration Program pursuant to Section 239 of the Fiscal Year 2016 Appropriations Act, P.L. 114-113 (2016 MTW Expansion Statute) or legacy MTW agencies2 that chose to follow the requirements of the MTW Operations Notice. Definitions. All terms used in this MTW Supplement are consistent with the definitions stated in the MTW Operations Notice, including: (1)Local, Non-Traditional Activities (LNT) – Those MTW activities that use MTW funding flexibility outside of the Housing Choice Voucher (HCV) and public housing programs established in Sections 8 and 9 of the U.S. Housing Act of 1937. (2)Safe Harbors – The additional parameters or requirements, beyond those specified in the MTW activity description itself found in the MTW Operations Notice, following each activity description, that the MTW agency must follow in implementing MTW activities. (3)Substantially the Same Requirement – A statutory MTW requirement that MTW agencies must continue to assist substantially the same total number of eligible low-income families as would have been served absent the MTW demonstration. A. PHA Information. A.1 PHA Name: Housing Catalyst PHA Code: CO041 MTW Supplement for PHA Fiscal Year Beginning: 01/01/2023 PHA Program Type: Housing Choice Voucher (HCV) only MTW Cohort Number: 4 MTW Supplement Submission Type: Annual Submission B. Narrative. B.1 MTW Supplement Narrative. The narrative provides the MTW agency with an opportunity to explain to the public, including the families that it serves, its MTW plans for the fiscal year and its short and long-term goals. The MTW agency should provide a description of how it seeks to further the three MTW statutory objectives during the coming Fiscal Year. Those three MTW statutory objectives are: (1) to reduce cost and achieve greater cost effectiveness in federal expenditures; (2) to give incentives to families with children whose heads of household are either working, seeking work, or are participating in job training, educational or other programs that assist in obtaining employment. B. Narrative Housing Catalyst is the Public Housing Authority for the City of Fort Collins, Colorado. We are a mission-driven real estate developer and the largest property management company in northern Colorado. Housing Catalyst provides sustainable, long-term housing solutions, serving more than 1,500 families per year. Employing innovative programs and resident support systems, Housing Catalyst offers critical tools and resources that families need while creating vibrant, sustainable communities throughout Fort Collins. Housing Catalyst’s vision for its participation in the MTW program integrates our mission and objectives with the federal statutory objectives of the MTW program to increase cost-effectiveness, self-sufficiency, and housing choice. Housing Catalyst is only applying MTW initiatives to its HCV program in this first supplemental. The Public Housing program is in process of disposition through the RAD and Section 18 tools. By focusing on the recruitment of new landlords who are currently not participating in the HCV program, Housing Catalyst will further its mission of increasing housing choices for families through policies which encourage landlord participation and increase units available to families in the local housing market. During its first year as an MTW agency, Housing Catalyst will focus on two initiatives: 1) Incentive payments, and 2) damage claims. These initiatives will address cost effectiveness by increasing utilization rates and decreasing the amount of time voucher holders are searching for housing; self-sufficiency by encouraging voucher holders to seek out neighborhoods with greater opportunity and providing incentives for new landlords in those areas who were not previously working with the voucher program; and housing choice by increasing the pool of landlords who welcome a housing choice voucher. C. MTW Waivers and Associated Activities. Activity: C.4 Landlord Leasing Incentives; 4.b. Damage Claims Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst will reimburse landlords for the cost of tenant caused damages (minus the security deposit). The amount of compensation will not exceed the lesser of the cost of damages or two months contract rent. Damages must be documented and accepted by Housing Catalyst. Housing Catalyst will require proof that damages are beyond ordinary wear and tear and documentation of the charges to the tenant’s security deposit as a part of the claim process. Documentation of actual damage costs are required; Housing Catalyst will not pay based on estimates. Housing Catalyst may charge these costs to the tenant as a condition for remaining in the program. Agency goals for MTW Activity: Increase the number of participating landlords and create increased housing options for HCV families. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Increased expenditure Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Custom Questions: Custom questions are tailored to each MTW activity. Does this policy apply to certain types of units or to all units all HCV units or only certain types of units (for example, accessible units, units in a low-poverty neighborhood, or units/landlords new to the HCV program? What types of units does this policy apply to? Other: Tenant based What is the maximum payment that can be made to a landlord under this policy? Up to two months contract rent under the HAP contract. How many payments were issued under this policy in the most recently completed PHA fiscal year? 0 What is the total dollar value of payments issued under this policy in the most recently completed PHA fiscal year? $0 Activity: C.4 Landlord Leasing Incentives; 4.c. Other Landlord Incentives (HCV) Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst will issue a one-time payment to new landlords who rent a unit to a family with a Housing Choice Voucher. This monetary incentive would be available to landlords who had not received a HAP payment in the prior three years. Offering a financial reward to landlords for joining the program would increase the number of participating landlords, expand housing options into new neighborhoods, and address specific landlord issues. Agency goals for MTW Activity: Increase participating landlords and create increased housing options for HCV families. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Increased expenditure Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all family types Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For PH activities: Does the MTW activity apply to all public housing developments? For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Custom Questions: Custom questions are tailored to each MTW activity. Does this policy apply to certain types of units or to all units all HCV units or only certain types of units (for example, accessible units, units in a low-poverty neighborhood, or units/landlords new to the HCV program? What types of units does this policy apply to? Units/landlords new to the HCV program What is the maximum payment that can be made to a landlord under this policy? $500 How many payments were issued under this policy in the most recently completed PHA fiscal year? 0 What is the total dollar value of payments issued under this policy in the most recently completed PHA fiscal year? $0 Activity: C.3 Reexaminations; 3.d. Self-Certification of Assets Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: At reexamination, Housing Catalyst may allow the self- certification of assets up to $50,000. This would lower barriers to participants in obtaining asset verification. Agency goals for MTW Activity: Decrease administrative time required to follow up and secure documents, allowing staff to focus on other priorities. This waiver supports Housing Catalyst’s larger goal of using MTW flexibility to streamline administrative processes and reduce agency costs. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Neutral (no cost implications) Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? Currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Custom Questions: Custom questions are tailored to each MTW activity. Please state the dollar threshold for the self-certification of assets. $50,000 Activity: C.2 Payment Standards and Rent Reasonableness; 2.d. Rent Reasonableness – Third-Party Requirement (HCV) Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst will use MTW flexibility to perform rent reasonable determinations on units that it owns, manages, and/or controls. Housing Catalyst will make reasonable rent determinations with the support of third-party software that taps into a national database. This process will ensure fair and valid determinations. Agency goals for MTW Activity: Increase rent reasonable turn window to support on-time reporting. This waiver supports Housing Catalyst’s larger goal of using MTW flexibility to streamline administrative processes and reduce agency costs. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Neutral (no cost implications) Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Custom Questions: Custom questions are tailored to each MTW activity. Please explain or upload a description of the quality assurance method. Reasonable rent determinations will be made with the support of a third-party database that is updated annually based on market conditions. Please explain or upload a description of the rent reasonableness determination method. The agency will determine rent reasonableness with the support of third-party software. Housing Catalyst will enter demographic information for each type of unit, including location, quality, size, type, age of unit, amenities, maintenance, and utilities to be provided by the owner. Activity: C.5 Housing Quality Standards; 5.c. Third-Party Requirement (HCV) Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst will perform HQS inspections on project- based units that it owns, manages, and/or controls. Agency goals for MTW Activity: Streamline the HQS inspection process to match non-PHA owned HQS inspections. This waiver supports Housing Catalyst’s larger goal of using MTW flexibility to streamline administrative processes and reduce agency costs. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Decreased expenditures Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Custom Questions: Custom questions are tailored to each MTW activity. Please explain or upload a description of the quality assurance method. Housing Catalyst supervisor will re-inspect a sample of units (10% quarterly) for quality control of HQS inspections in accordance with 24 CFR 982.405(b) and 24 CFR 985.2. Activity: C.9 Project Based Voucher Program Flexibilities (PBV); 9.a. Increase PBV Program Cap (HCV) Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst may increase the number of authorized units it project-bases. Agency goals for MTW Activity: Increase the number of participating landlords and create increased housing options; create family stability in an environment with support to encourage family self-sufficiency MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Neutral (no cost implications) Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Custom Questions: Custom questions are tailored to each MTW activity. What percentage of total authorized HCV units will be authorized for project-basing? Not more than 50% Activity: C.9 Project Based Voucher Program Flexibilities (PBV); 9.b. Increase PBV Project Cap (HCV) Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst may raise the Project Based Voucher cap within a project up to 100%. Agency goals for MTW Activity: Create family stability in an environment with support to encourage family self-sufficiency. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Neutral (no cost implications) Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No Activity: C.9 Project Based Voucher Program Flexibilities (PBV); 9.c. Elimination of PBV Selection Process for PHA-owned Projects without Improvement, Development, or Replacement (HCV) Narrative. Describe the MTW activity, the MTW agency’s goal(s) for the MTW activity, and, if applicable, how the MTW activity contributes to a larger initiative. Description: Housing Catalyst may eliminate the selection process in the award of PBV to properties owned by the agency that are not public housing without engaging in an initiative to improve, develop, or replace a public housing property or site. Agency goals for MTW Activity: Streamline the selection process for PBV. This waiver supports Housing Catalyst’s larger goal of using MTW flexibility to streamline administrative processes. MTW Statutory Objectives. Which of the MTW statutory objectives does this MTW activity serve? Housing choice Cost implications. What are the cost implications of this MTW activity? Pick the best description of the cost implications based on what you know today. Neutral (no cost implications) Different policy by household status/family types/sites? Does the MTW activity under this waiver apply to all assisted households or only to a subset or subsets of assisted households? The MTW activity applies to all assisted households Household Status. Does the MTW activity apply only to new admissions, only to currently assisted households, or to both new admissions and currently assisted households? New admissions and currently assisted households Family Types. Does the MTW activity apply to all family types or only to selected family types? The MTW activity applies to all family types Location. Depending on if responses are being provided for a public housing (PH) or HCV activity, the agency will either see questions applicable to PH or HCV. For HCV activities: Does the MTW activity apply to all HCV tenant-based units and properties with project-based vouchers? For HCV activities: The MTW activity applies to all tenant-based units* Does the MTW agency need a Safe Harbor Waiver to implement this MTW activity as described? No Does this MTW activity require a hardship policy? No Does the MTW activity require an impact analysis? No *Housing Catalyst intends to seek HUD approval to extend these waivers to Veterans Affairs Supportive Housing (VASH) and Emergency Housing Vouchers (EHV). D. Safe Harbor Waivers D. 1 Safe Harbor Waivers seeking HUD Approval: Will the MTW agency submit request for approval of a Safe Harbor Waiver this year? No E. Agency-Specific Waivers. E. 1 Agency-Specific Waivers for HUD Approval: Will the MTW agency submit a request for approval of an Agency-Specific Waiver this year? No F. Public Housing Operating Subsidy Grant Reporting. F. 1 Please provide the public housing Operating Subsidy grant information in the table below for Operating Subsidy grants appropriated in each Federal Fiscal Year the PHA is designated an MTW PHA. N/A G. MTW Statutory Requirements. 75% Very Low Income – Local, Non-Traditional. HUD will verify compliance with the statutory requirement that at least 75% of the households assisted by the MTW agency are very low-income for MTW public housing units and MTW HCVs through HUD systems. The MTW PHA must provide data for the actual families housed upon admission during the PHA’s most recently completed Fiscal Year for its Local, Non-Traditional program households. N/A H. Public Comments. Please provide copy of all comments received by the public, Resident Advisory Board, and tenant associations. The agency did not receive any comments during the public comment period or public hearing. Please attach a narrative describing the MTW agency’s analysis of the comments and any decisions made based on these comments. The agency did not receive any comments during the public comment period or public hearing. If applicable, was an additional public hearing held for an Agency-Specific Waiver and/or Safe Harbor waiver? N/A I. Evaluations. Please list any ongoing and completed evaluations of the MTW agency’s MTW policies, that the PHA is aware of, including the information requested in the table below. In the box “title and short description,” please write the title of the evaluation and a brief description of the focus of the evaluation. N/A J. MTW Certifications of Compliance. The MTW agency must execute the MTW Certifications of Compliance form and submit as part of the MTW Supplement submission to HUD. To be completed following Board approval RESOLUTION 2022-10-01 OF THE HOUSING CATALYST BOARD OF COMMISSIONERS 2023 Moving to Work (MTW) Supplement approval and addition to 2023 Agency Annual Plan WHEREAS The U.S. Department of Housing and Urban Development (HUD) has selected Housing Catalyst to participate int the Move to Work (MTW) Demonstration expansion, to design and test new ways of providing housing assistance and services to low-income households and WHEREAS Housing Catalyst must submit annually a Moving to Work Supplement Plan for the upcoming year, and WHEREAS The draft of the Moving to Work Supplement was made available and shared with the Board of commissioners on October 20, 2022, and the Board of Commissioners has examined and approved the same as to form and content. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF HOUSING CATALYST that the Board of Commissioners approved the 2023 Moving to Work Supplement and amendment of this addition to the 2023 Agency Annual plan. The board authorizes Housing Catalyst’s Chief Operating Officer to submit the MTW supplement to HUD. Passed and adopted this 20th day of October 2022 at a regular meeting of the Board of Commissioners of Housing Catalyst. BY: Cathy Mathis, Chairperson ATTEST: Julie J. Brewen, Secretary ACTION ITEM To: Housing Catalyst Board of Commissioners From: Kristin Fritz, Chief Real Estate Officer Meeting Date: October 20, 2022 Action Item: Approval of HC-RES-2022-10-02 - Resolution Authorizing Housing Catalyst, LLC to Assign Remington Row Purchase Contract to Villages, Ltd. Alignment to Strategic Plan: This resolution supports Goal 2: Increase the Supply of Affordable Housing and the Dispose of Obsolete/Unsustainable Models and Restructure Portfolio strategy by acquiring properties that can be purchased and operated sustainably and strategically. Background: Housing Catalyst, LLC entered into a Contract to Buy and Sell Real Estate dated May 5, 2022 to purchase Remington Row at 705, 711, and 715 Remington. The three buildings include 11 units consisting of 28 bedrooms and 28 bathrooms that are designed as pods and are leased by bedroom. Description: While Housing Catalyst, LLC entered into the initial purchase contract, Housing Catalyst intends for Villages Ltd. to own and manage the property. It is therefore recommended to transfer the contract to Villages Ltd. to complete the purchase. Fiscal Impact: There is no fiscal impact of reassigning the Remington Row Purchase Contract to Villages, Ltd. Approval of the resolution is required to complete the purchase and have Villages, Ltd. own the property at closing. Recommendation: Staff recommends approval of HC-RES-2022-10-02 - Resolution Authorizing Housing Catalyst, LLC to Assign Remington Row Purchase Contract to Villages, Ltd. RESOLUTION NO. HC-RES-2022-10-02 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF HOUSING CATALYST, A BODY CORPORATE AND POLITIC, AUTHORIZING HOUSING CATALYST LLC TO ASSIGN ITS CONTRACT TO PURCHASE REMINGTON ROW TO VILLAGES, LTD. WHEREAS Housing Catalyst, is a body corporate and politic under the laws of the state of Colorado (“Housing Catalyst”); WHEREAS the mission of Housing Catalyst is to create vibrant, sustainable communities throughout Fort Collins by acquiring, constructing, rehabilitating, owning, and operating residential units for low and moderate income households; WHEREAS the Villages, Ltd. is a nonprofit corporation organized and existing under the laws of the State of Colorado (“the Villages”); WHEREAS Housing Catalyst, LLC, is a limited liability company organized and existing under the laws of the state of Colorado (the “LLC”) and is a wholly owned subsidiary of Housing Catalyst; WHEREAS the Villages is an affiliate of and managed by Housing Catalyst; WHEREAS the purpose of the Villages is to facilitate the mission of Housing Catalyst; WHEREAS the LLC has entered into a Contract to Buy and Sell Real Estate dated May 5, 2022 (the “Contract”) pursuant to which the LLC has agreed to purchase and Remington Annex, LLC, a Colorado limited liability company, has agreed to sell the real property commonly known as 705 - 715 Remington Street, Fort Collins, CO 80524 and legally described as Lot 1, Remington Row (the “Property”), which includes 11 rental units consisting of 28 bedrooms and 28 bathrooms; WHEREAS the LLC desires to assign the Contract to Villages; WHEREAS the Board of Commissioners of Housing Catalyst has determined that it would be in the best interest of the LLC to assign the Contract to Villages. NOW THEREFORE, BE IT RESOLVED that the Assignment of Contract by the LLC to the Villages is hereby approved and adopted. PASSED, ADOPTED, AND APPROVED this 20th day of October 2022. ________________________________________ Chair __________________________________________ Secretary ACTION BY CONSENT OF THE MEMBER OF HOUSING CATALYST, LLC The undersigned, being the sole member of HOUSING CATALYST, LLC, a Colorado limited liability company (the “LLC”) hereby adopt the following Resolution: WHEREAS the LLC has entered into a Contract to Buy and Sell Real Estate dated May 5, 2022 (the “Contract”) pursuant to which the LLC has agreed to purchase and Remington Annex, LLC, a Colorado limited liability company has agreed to sell the real property commonly known as 705 - 715 Remington Street, Fort Collins, CO 80524 and legally described as Lot 1, Remington Row (the “Property”), which includes 11 rental units consisting of 28 bedrooms and 28 bathrooms for the purchase price of $3,550,000.00; NOW THEREFORE BE IT RESOLVED that the Contract has been reviewed and considered by the Member and Manager of the LLC and is approved. The execution of the Contract by Julie J. Brewen as Manager of the LLC is hereby ratified, confirmed, and approved. BE IT FURTHER RESOLVED that the Contract shall be assigned to Villages, LTD., a Colorado nonprofit corporation. Julie J. Brewen as Manager of the LLC is authorized and directed to execute an Assignment of the Contract in the form attached hereto as Exhibit A. DATED this 20th day of October 2022. HOUSING CATALYST, a body corporate and politic By: Julie J. Brewen, Chief Executive Officer ASSIGNMENT OF CONTRACT THIS ASSIGNMENT OF CONTRACT is made and entered into this 20th day of October 2022, by and between HOUSING CATALYST, LLC, a Colorado limited liability company (“the LLC”) and VILLAGES, LTD., a Colorado nonprofit corporation (“the Villages”). RECITALS WHEREAS the LLC has entered into a Contract to Buy and Sell Real Estate dated May 5, 2022 (the “Contract”) pursuant to which the LLC has agreed to purchase and Remington Annex, LLC, a Colorado limited liability company has agreed to sell the real property commonly known as 705 - 715 Remington Street, Fort Collins, CO 80524 and legally described as Lot 1, Remington Row (the “Property”), which includes 11 rental units consisting of 28 bedrooms and 28 bathrooms for the purchase price of $3,550,000.00; NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby confessed and acknowledged, the LLC has sold, transferred, conveyed and assigned and by these presents does hereby sell, transfer, convey and assign the Contract to the Villages. The Villages hereby assumes all obligations of the LLC under the Contract and expressly agrees to and shall indemnify and hold harmless the LLC from and against any and all loss, cost, and expense, including reasonable attorneys’ fees arising out of or as a result of the failure of the Villages to perform the obligations of the LLC under the Contract. This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the day and year first above written. HOUSING CATALYST LLC, a Colorado limited liability company By: Julie J. Brewen, Manager VILLAGES LTD., a Colorado nonprofit corporation By: ___________________________________ President ACTION ITEM To: Housing Catalyst Board of Commissioners From: Kristin Fritz, Chief Real Estate Officer Meeting Date: October 20, 2022 Action Item: Approval of HC-RES-2022-10-03 Resolution Authorizing Transfer of 15 Public Housing Units to Villages, Ltd. Alignment to Strategic Plan: This resolution supports Goal 2: Increase the Supply of Affordable Housing and the Dispose of Obsolete/Unsustainable Models and Restructure Portfolio strategy by completing the disposition of all public housing through the Section 18 program. Background: Housing Catalyst received approval from HUD in July 2022 to dispose of its 48 remaining public housing units, including the 15 units in one building at 2155 W. Plum. Description: Housing Catalyst’s Section 18 Disposition plan for 2155 W. Plum, which has been approved by the Board of Commissioners, includes transitioning residents to voucher-based assistance, and using proceeds from the sale of other public housing units to Elevation Community Land Trust and other funding sources to renovate the property in 2023-2024. Implementation of the plan also requires transferring the units at 2155 W. Plum to Villages, Ltd. as the entity that will own and operate the property when it is no longer public housing. Fiscal Impact: Villages Ltd. will acquire this property from Housing Catalyst for $1. Not only has 2155 W. Plum suffered from decades of Congressional underfunding for the public housing program, but Housing Catalyst has also been constrained by HUD’s restrictions on using the financing methods a private owner would use to perform repairs and modernization. Transferring this property to the Villages Ltd. portfolio following its removal from the public housing program will allow Villages Ltd. to own and operate the property in a fiscally sustainably manner. Recommendation: The Development Committee and Housing Catalyst staff recommend approval of HC- RES-2022-10-03 Resolution Authorizing Transfer of 15 Public Housing Units to Villages, Ltd. RESOLUTION NO. HC-RES-2022-10-03 A RESOLUTION OF THE BOARD OF COMMISSIONERS OF HOUSING CATALYST, A BODY CORPORATE AND POLITIC AUTHORIZING TRANSFER OF PUBLIC HOUSING UNITS TO THE VILLAGES, LTD., A COLORADO NONPROFIT CORPORATION WHEREAS Housing Catalyst, is a body corporate and politic under the laws of the state of Colorado (“Housing Catalyst”); WHEREAS the mission of Housing Catalyst is to create vibrant, sustainable communities throughout Fort Collins by acquiring, constructing, rehabilitating, owning, and operating residential units for low and moderate income households; WHEREAS the Villages, Ltd. is a nonprofit corporation organized and existing under the laws of the State of Colorado (“the Villages”); WHEREAS the Villages is an affiliate of and managed by Housing Catalyst, a body corporate and politic organized and existing under the laws of the State of Colorado (“Housing Catalyst”); WHEREAS the purpose of the Villages is to facilitate the mission of Housing Catalyst; WHEREAS Housing Catalyst is the owner of 15 residential rental units located at 2155 West Plum Street, Fort Collins, Colorado (the “Public Housing Units”); WHEREAS the Public Housing Units were acquired using funds provided by the United States Department of Housing and Urban Development (“HUD”); WHEREAS Housing Catalyst is disposing of the Public Housing Units under the U.S. Department of Housing and Urban Development Section 18 program; WHEREAS Housing Catalyst will transfer and convey the Public Housing Units to the Villages for one dollar ($1.00); WHEREAS upon the sale of the Public Housing Units by Housing Catalyst to the Villages, HUD will release the Public Housing Units from the Declarations of Trust made by Housing Catalyst for the benefit of HUD; WHEREAS HUD has authorized the transfer of the Public Housing Units to the Villages for one dollar ($1.00). WHEREAS the Board of Commissioners of Housing Catalyst has determined that it would be in the best interests of Housing Catalyst to transfer the Public Housing Units to the Villages. NOW THEREFORE BE IT RESOLVED that Housing Catalyst is hereby authorized to transfer the Public Housing Units to the Villages for one dollar ($1.00). BE IT FURTHER RESOLVED that Julie J. Brewen as Chief Executive Officer of Housing Catalyst is hereby authorized to execute a deed and such other documents and instruments as may be necessary to transfer the Public Housing Units to the Villages. PASSED, ADOPTED, AND APPROVED this 20th day of October 2022. ________________________________________ Chair __________________________________________ Secretary 2023 Budget Report | 0 Within this report we present an overview of structure, parameters, and key points of interest. The commentary, supplemental data, and exhibits are provided for your reference. It is our intent to provide sufficient information to communicate the efforts planned to further our strategic goals and ultimately our mission. Budget Report FY | 2023 2023 Budget Report | 1 Contents Overview................................................................................................................................................ 3 Economic Conditions and Outlook ......................................................................................................... 4 Long-Term Planning | Major Commitments | Initiatives .......................................................................... 4 Organizational Structure ........................................................................................................................ 5 Blended Component Units .................................................................................................................. 5 Discretely Presented Component Units .............................................................................................. 5 Organizational Entity Chart ................................................................................................................. 5 Central Office Cost Centers ................................................................................................................ 7 Departments ....................................................................................................................................... 7 Agency Parent Budget Assumptions ...................................................................................................... 8 Overhead ........................................................................................................................................... 8 Employee Staffing .............................................................................................................................. 9 Maintenance Department ................................................................................................................. 10 Development department ................................................................................................................. 11 Resident Services Department ......................................................................................................... 11 Larimer County Behavioral Health Grant ....................................................................................... 12 Family Self-Sufficiency Grant ........................................................................................................ 12 Continuum of Care Grant .............................................................................................................. 12 Property Management Department................................................................................................... 12 Housing Assistance Department ...................................................................................................... 12 Housing Assistance Payments ...................................................................................................... 13 Housing Choice Vouchers ............................................................................................................. 13 Mainstream Vouchers1 .................................................................................................................. 13 Emergency Housing Vouchers ...................................................................................................... 13 Catalyst Fund ................................................................................................................................... 13 Agency Parent Budget ......................................................................................................................... 14 Operating Income ............................................................................................................................. 14 Operating Expenses ......................................................................................................................... 15 Net Operating Income ...................................................................................................................... 16 Other Non-Operating Income (Expenses) ......................................................................................... 16 Net Income ....................................................................................................................................... 16 2023 Budget Report | 2 Key Definitions ..................................................................................................................................... 17 Blended Component Units – Consolidated ........................................................................................... 18 Housing Catalyst, LLC ...................................................................................................................... 18 Blended Component Units – Separately Stated ................................................................................... 19 Public Housing ................................................................................................................................. 19 Villages, Ltd. ..................................................................................................................................... 19 Discretely Presented Component Units ............................................................................................... 21 Tax Credit Properties........................................................................................................................ 21 Village On Elizabeth, LLLP ............................................................................................................ 21 Village on Plum, LLLP ................................................................................................................... 21 Village on Redwood, LLLP ............................................................................................................ 22 Village on Stanford, LLLP ............................................................................................................. 22 Village on Shields, LLLP ............................................................................................................... 22 Redtail Pond Permanent Supportive Housing, LLLP ..................................................................... 22 Village on Horsetooth, LLLP .......................................................................................................... 22 Mason Place, LLP ......................................................................................................................... 22 Oak 140, LLP ................................................................................................................................ 23 Managed Entities ................................................................................................................................. 23 Wellington Community Housing and Housing Authority .................................................................... 23 Capital Budgets ................................................................................................................................... 23 Conclusion ........................................................................................................................................... 24 Exhibits ................................................................................................................................................ 25 Exhibit 1 – Agency Partner Budget Reports ......................................................................................... 26 Exhibit 2 – LIHTC Portfolio Budget Report ........................................................................................... 29 Exhibit 3 – Public Housing Budget Report............................................................................................ 31 Exhibit 4 – Villages, Ltd. Budget Reports ............................................................................................. 32 Exhibit 5 – Wellington Budget Report ................................................................................................... 35 Exhibit 6 – Capital Summary Budgets .................................................................................................. 36 2023 Budget Report | 3 Overview For more than 50 years, Housing Catalyst has been building community in Northern Colorado. The quasi- governmental agency (formerly the Fort Collins Housing Authority) addresses the growing need for affordable homes through innovative, sustainable, community-focused solutions – developing and managing residential properties, distributing federal housing assistance, coordinating community programs and services, and leading policy discussions and community dialog around affordable housing. Housing Catalyst approaches the budget development process with one overarching goal in mind – to satisfy our mission. We honor our mission through a focus on a triple bottom line. As Housing Catalyst has worked to accomplish its goals, the organization has taken on the oversight of various entities and created entity structures to expand opportunities for residents earning below the area median income. This oversight includes: • Administering housing assistance programs for Larimer County, • Managing Wellington Community Housing through a contractual agreement, • Managing a 501(c)(3) entity that owns and operates affordable rental homes, and • Developing multiple affordable housing projects utilizing tax credit financing through partnership agreements with various external investors. This year’s fiscal budget data includes all agency-wide programs and departments. Additionally, data presented includes reports and information related to blended units and discretely presented units made up of managed entities and affiliates. This budget report is the result of tireless hours by dedicated Housing Catalyst staff. Through their adherence to the agency’s core values, they ensure the data presented is of the highest quality. The executive team extends their sincere appreciation to all staff for their commitment to this process and to the mission of the organization. 2023 Budget Report | 4 Economic Conditions and Outlook Congressional housing legislation and the federal budget affect Housing Catalyst more than local economic factors. Housing Catalyst's primary sources of funding are the U.S. Department of Housing and Urban Development (HUD), administrative management fees, and other grants. As with most housing authorities, much of Housing Catalyst's operating and capital funding comes from federal dollars in the form of public housing operating subsidies, capital fund grants, Housing Choice Voucher administrative fees and Housing Assistance Payments. For the Public Housing program, housing authorities receive operating subsidies in accordance with an operating subsidy funding formula. In general, the calculated subsidy amount is the difference between an estimate of operating costs minus an estimate of income from rents. Operating subsidies are subject to annual appropriation by Congress. Fort Collins has an estimated population of 172,321 (2021) and a median household income of $70,528. The median family income for Larimer County is $76,366. The rental market in Fort Collins remains tight with rents continuing to increase and vacancy rates at around 5-6%. Demand for affordable housing remains strong in the Fort Collins market. The rental market has tightened considerably in recent years and rents continue to increase. According to rentcafe.com, apartment rents increased by an average of 11% in Fort Collins during 2021. Additionally, effects of the COVID-19 pandemic increased the demand for affordable rental housing at a time when expansion of affordable units has been challenging. This is expected to keep upward pressure on rental rates overall. Additional funding through federal, state, and other emergency programs may keep rental collection rates at near normal levels in the near term. The longer-term outlook for rent collection and demand for rental housing will be driven by the length and depth of the economic recovery. Housing Catalyst remains focused on development of new affordable homes through both acquisition and new build strategies. In early 2022, Housing Catalyst was selected to join HUD's Moving to Work (MTW) program under the Landlord Incentive cohort. The transition to MTW will allow flexibility in the utilization of funding received from HUD and the ability to initiate new programs and strategies within the community. The transition will not directly impact overall HUD funding received by Housing Catalyst. Long-Term Planning | Major Commitments | Initiatives Housing Catalyst supports the development and preservation of affordable housing throughout Fort Collins, with funding from the City, Colorado Division of Housing, Colorado Housing and Finance Authority, equity investors, and lenders. Along with its partners, Housing Catalyst combines intentional design with sustainable development principles and sound planning to develop and maintain a vibrant, diverse affordable housing portfolio. Housing Catalyst employs many strategies to create and preserve 2023 Budget Report | 5 its stock of affordable housing. These strategies include new construction, acquisition, rehabilitation, and preservation of existing housing to create and maintain high-quality, sustainable homes. In 2019, after the disposition of 84 public housing units under the RAD program, the decision was made to pursue a Section 18 disposition for the remaining 70 public housing units. The first three projects resulted in the construction or preservation of 453 affordable housing units. The repositioning of the remaining 70 public housing units is now expected to be completed over the next year. Housing Catalyst plans to utilize proceeds from the Section 18 disposition for the Impala redevelopment project, a combination of new construction and renovation which will net 49 new affordable rental homes and preserve 12 duplexes. A separate renovation will preserve 15 existing units located at 2155 W Plum. Organizational Structure BLENDED COMPONENT UNITS Several controlled entities are included within the financial reporting entity of Housing Catalyst as blended component units. These include the Larimer County Housing Authority (LCHA), all of the general partnership entities controlled by Housing Catalyst, various special purpose entities, development entities, and Villages, Ltd. According to the Governmental Accounting Standards Board (GASB), the balances and transactions of the component units are to be consolidated and reported within the proprietary funds of Housing Catalyst. However, for purposes of clarity in presentation of the agency’s budget, the Villages, Ltd. entity and all of its real estate holdings are presented separately within this report. Additionally, the public housing portfolio is separated for presentation purposes. DISCRETELY PRESENTED COMPONENT UNITS Housing Catalyst manages nine discretely presented component units. These units are not consolidated with the agency under GASB rules. Since these are legally separate from Housing Catalyst, they are reported separately for budget presentation within this report. ORGANIZATIONAL ENTITY CHART The figure below depicts the overall organizational entity structure and includes a list of affiliates and managed entities. This illustration is intended to facilitate understanding of overall structure and the major segments of business operations. Figure 1 - Organizational Entity Structure 2023 Budget Report | 6 Housing Catalyst The Housing Authority for the City of Fort Collins Managed Entities Intergovernmental Agreements Wellington Housing Authority No R/E Holdings Wellington Community Housing 42 Units Blended Component Units Fully Consolidated Villages, Ltd. 501(c)(3) First Street SRO Myrtle Street SRO Village on Bryan Village on Castlerock Village on Cherry Village on Cowan Village on Impala Village on Leisure Village on Maple Village on Matuka Village on Mountain Village on Stanford 6 2155 W. Plum SFH & Duplexes 198 Units Housing Catalyst, LLC 501(c)(3) Mason Parking Lot Special Limited Partnership Holdings (SLP's) Multiple Housing Catalyst Swallow Road, LLC SLP -Care Housing Housing Catalyst Deveopment Services, LLC Development Entity Larimer County Housing Authority 100 Vouchers Discretely Presented Component Units LIHTC Deals -LLLP Village On Plum, LLLP 95 Units Village on Stanford, LLLP 82 Units Village on Redwood, LLLP 72 Units Village on Horsetooth, LLLP 96 Units Village on Shields, LLLP 285 Units Mason Place, LLLP 60 Units Village on Elizabeth, LLLP 48 Units Redtail Ponds, LLLP 60 Units Oak 140, LLLP (IN CONSTRUCTION) 96 Units 2023 Budget Report | 7 CENTRAL OFFICE COST CENTERS Housing Catalyst utilizes a Central Office Cost Center (COCC) model to allocate overhead to departments. A total of five COCCs are part of the budget and accounting structure utilized by the agency. Costs accumulated in each of the cost centers are then allocated to the individual departments of the agency. This methodology facilitates a more appropriate match of costs with related departments while also being easier to administer. The figure below outlines the structure and relationship of the COCCs to the individual departments, and then the departments with their associated customers. Figure 2 – Cost Center and Department Relationship Chart DEPARTMENTS Housing Catalyst is made up of five distinct departments–housing assistance, property management, resident services, maintenance, and development. The costs associated with these departments are paid for by various billing arrangements between Housing Catalyst and its managed programs, real estate portfolios, and affiliates. Each department is evaluated separately to determine if it is financially viable and performing to the expectations set by leadership. As such, each department maintains its own separate budget. Programs | Real Estate Departments Cost Centers ORGANIZATIONAL OVERHEAD (ADMIN, FINANCE, TECH, SGA & HR) Housing Assistance Voucher Programs Property Management Real Estate Portfolio Resident Services Residents and Voucher Holders Maintenance Real Estate Portfolio Development Development, Rehabs, and Acquisitions 2023 Budget Report | 8 Agency Parent Budget Assumptions The following sections include some key assumptions related to the agency’s budget preparations. These represent concepts that are helpful to the reader and relevant to the understanding of the agency’s operations. This is not an exhaustive list of all assumptions utilized. OVERHEAD Each of the overhead cost centers are fully allocated to the departments of the agency. For FY 2023, the total overhead as a percentage of revenue has increased by 2.5% to 13.9%. Additionally, the overall increase in overhead has remained relatively stable with the growth of revenues over the past 5 years. The trailing 5-year trend is depicted in Figure 3 and shows an average overhead rate of 12.1% over the timeframe depicted. Figure 3 - T5Y Overhead Ratio A large component of the increase in overhead projected for the 2023 budget is increases in labor costs due to significant inflationary pressure in the market. To remain competitive, pools were increased to keep pace with inflation. Additionally, the economic impact of inflation and supply chain disturbances has increased many other expense classes. For reference, the inflation rate at the end of 2021 was 7.04% with a current rate at the end of August 2022 of 8.26% according to the U.S. Consumer Price Index. The makeup of the overhead expenses amongst the five cost centers is illustrated in Figure 4. The allocation of the cost centers to the departments is dependent upon the nature of the cost. The human resource and technology cost centers are allocated based upon head count, while the remaining cost centers are allocated based on each department’s respective share in compensation, a common methodology used for allocating overhead. Once this percentage is determined, a weighted factor is assigned to both the development and property management departments due to their determined 11.60%12.90%10.50%11.40%13.90% 2019 Actual 2020 Actual 2021 Actual 2022 Proforma 2023 Budget OVERHEAD RATIO 0% 20% 40% 60% 80% 100% 2023 BUDGET 35% 11% 19% 27% 7% SGA FIN TECH HR ADMIN Figure 4 - Overhead by Type 2023 Budget Report | 9 complexity and use of resources by the executive team. The weighted rate for development and property management is 25% and 10% respectively. Looking at the allocation rates for HR and technology, the per person rate is $5,598 and $9,499 respectively per annum. The allocation of the remaining overhead cost pools to the departments, adjusted for the surcharge rate, are located in figure 5. EMPLOYEE STAFFING The agency has assessed its staffing needs and determined that additional positions are required in order to adequately perform duties, be resourced enough to nimbly take advantage of opportunities and succeed in attaining the organization’s mission. Thus, there is a budgeted increase in full-time equivalent employees of 3.3. The positions to be added are an HR generalist, a part-time accounts payable clerk, a part-time IT tech support position, and an additional maintenance technician. The goal is to continue to support the advancement and growth of the organization through appropriate staffing levels. The basis for seeking additional support in accounts payable is the volume of invoices being processed, as well as enhancements in the full payables cycle to increase internal controls. The basis for adding an HR generalist is the increase in recruiting and administration of employee benefits as the agency has grown. Additional support is needed in technology to coordinate efforts with our enhanced ERP system and increase collaboration with City IT. Lastly, the additional maintenance tech will support newly acquired or developed properties including Oak 140 which is expected to open in January 2023. The increase of 3.3 FTE represents a 2.7% increase in compensation costs over current levels. In addition to added FTE, there is an allotment for market and performance increases included in the budget. The pool rate is directly influenced by market pressure and conditions, and as such the blended pool rate has been set at 6.3% to accommodate higher than normal pressures in the labor market. 2022 FTE COUNT 2023 FTE COUNT YOY INCREASE 93.7 97.0 3.3 "Great things in business are never done by one person; they're done by a team of people." – Steve Jobs PORTFOLIO MANAGEMENT HOUSING ASSISTANCE RESIDENT SERVICES MAINTENANCE DEVELOPMENT 41%7%9%8%35% Figure 5 - Overhead Allocation Rates 2023 Budget Report | 10 A thorough evaluation of benefit offerings is conducted annually. During this year’s evaluation the average increase in health, dental, and vision insurance was 5%. The combined cost of benefits, referred to as the burden rate, is 37.26% with paid time off (“PTO”) factored in. This places our burden rate below the mid-point for comparable industries according to the BLS benchmark data for 2021, provided in Figure 6. MAINTENANCE DEPARTMENT Housing Catalyst operates an in-house maintenance department. The costs associated with labor in this department are charged directly to properties based on three billing methods. The first billing method is an hourly bill rate of $69 for on-call routine work orders. The bill rate was kept at the same rate as 2021 due to careful analysis and management of department resources. Additionally, the agency has benchmarked work order bill rates with other housing authorities in Colorado and found that the range (adjusting for outliers) is $65-$85 per hour. Therefore, our rate of $69 is at the low end of the range and we expect holding the bill rate in future years will not be possible. The second billing method is a graduated per-unit flat rate contract for preventative maintenance services. The scale is provided for reference in Figure 7. Preventative maintenance contracts will be issued to all properties managed by the agency and cover recurring maintenance such as site inspections, cleanup of sites, and many other routine recurring services. Preventative maintenance typically is performed by entry-level staff with a much lower bill cost. The third billing method is a percentage markup applied to all managed capital projects that the maintenance department is hired to perform. In order to provide skilled project management and oversight to capital improvement projects, the maintenance team retains qualified managers with prior expertise in scheduling, coordinating, and managing capital projects. This is a valuable resource especially in the current market where both maintenance technicians and skilled labor is difficult to find. In addition to any labor costs, work orders include direct supply costs with a purchasing markup rate of 20%. The markup supports the cost of the staff necessary to handle and coordinate purchasing on behalf of all properties served. The maintenance department is projected to generate a net profit of $57,024 for the 2023 budget year. BLS Benchmark Data - (Includes PTO)Low MID High Private Industry 26.6%29.6%32.6% Local Government 35.1%38.1%41.1% Civilian Workers 28.2%31.2%34.2% Figure 6 - BLS Benchmark Data UNIT COUNT LOW UNIT COUNT HIGH PRICE PER UNIT 1 10 240$ 11 40 350$ 41 50 375$ 51 75 425$ 76 100 475$ 101 999 525$ PREVENTATIVE MAINTENANCE Figure 7 - Preventative Maintenance Graduated Scale 2023 Budget Report | 11 DEVELOPMENT DEPARTMENT The agency’s development department is staffed by a skilled team with high technical ability in the field of affordable real estate development. The funding for the department comes primarily from fees earned when projects are acquired, constructed, or rehabilitated. The development department is projecting to generate a total of $2,883,352 in new development fees in 2023. The sources of the fees are depicted in Figure 8. The department is also projecting to generate grants totaling $61,000 from the close out of retention on the Oak 140 project. Lastly, the department continues to accrue interest income on pass-through mortgages to past developments that is payable whenever the waterfall is triggered. For the 2023 budget year the accrued income is $668,668. The development department is projected to generate a combined $1.32 million in net income. RESIDENT SERVICES DEPARTMENT The resident services department includes the HUD-funded Family Self-Sufficiency (FSS) program for voucher holders called JumpStart, supportive services for residents living in Housing Catalyst’s affordable properties, and Permanent Supportive Housing (PSH). The department’s continued focus for 2023 is housing stability, education, health, and resident engagement. In 2021, there was a 41% increase in referrals from property managers for residents needing supportive services or community referrals from Resident Service Coordinators (RSCs) who support our affordable housing properties. This trend continued into 2022 and influenced the number of resident services coordinators required to successfully support the entire census of residents in the current and growing real estate portfolio. Beginning in 2023, properties and programs will be invoiced directly for the resident services support they receive instead of allocating costs through the COCC platform. The department is partially funded by grants from community and government partners. In 2023 the agency is including an internally-issued grant from Villages, Ltd. in the amount of $120,000 to support this vital department and its efforts. These monies will assist properties that may not have sufficient resources to secure services for residents. CARE | SWALLOW, $946,522 OAK 140, $765,330 BRYAN REHAB, $326,000 IMPALA, $845,500 DEVELOPER FEES Figure 8 - Developer Fees by Source 2023 Budget Report | 12 The needs of the resident population served is greater than the monies available via grants and property service contracts. Thus, for 2023 the resident services department has a projected shortfall of ($146,314) that will be funded by the agency’s other operational income sources. Larimer County Behavioral Health Grant The Larimer County Behavioral Health Grant was renewed for 2023 and supports a behavioral health clinician at our PSH communities, Redtail Ponds and Mason Place. Family Self-Sufficiency Grant The agency’s JumpStart program is funded by a HUD-issued FSS grant. The grant funds three full time staff to provide services and administer the program for participants in the Housing Choice Voucher program and public housing residents. Continuum of Care Grant The Continuum of Care grant awarded by HUD specifically covers the costs of Permanent Supportive Housing services at our managed Redtail Ponds property. Permanent Supportive Housing requires skilled social workers and more touch points than other affordable housing products. The grant award for the fiscal year ending October 31, 2023, is $384,433 which represents a 6% increase over the prior fiscal year end. A modest 3% increase is assumed for the following fiscal period. P ROPERTY MANAGEMENT DEPARTMENT The property management department is comprised of property managers of varying expertise levels, compliance specialists, and business support staff that directly support and oversee operations on each of the real estate properties managed by the agency. Additionally, this department is responsible for asset management services such as capital improvement, investor relations, and exit plan evaluations, amongst others. The department earns various fees based upon agreed terms and/or recaptures costs as outlined in management agreements. The departments income will fluctuate based upon the rental revenues of the real estate portfolio upon which a substantial portion of its fee income is dependent. Each real estate property has its own agreed upon fee structure; however, the average fee earned is between 7-9% of net rental revenues. In 2023 the department will manage in excess of $14.76 million in total real estate portfolio operating revenues. This will generate over $2 million in fee income payable to the agency and result in the department generating $33,500 in net income during the 2023 budget period. HOUSING ASSISTANCE DEPARTMENT The housing assistance department administers the Housing Choice Voucher programs for the U.S. Department of Housing and Urban Development. Voucher programs assist low-income families, the elderly, and people with disabilities. 2023 Budget Report | 13 Housing specialists in the department handle waitlist management, income verification, recertifications, inspections, and determination of rental subsidies. The skilled specialists are required to keep abreast of federal rules and regulations and manage caseloads of 200-250 households. The department is funded through income earned in the form of an administrative fee calculated on the total vouchers leased each month. The department is expected to generate a net loss of ($180,229) which will be subsidized by other agency income sources. This is typical for agencies since the administration is underfunded by HUD as will be discussed in the next section on housing assistance payments. Housing Assistance Payments Housing Assistance Payments (HAP) is the term used to identify the monies that pass-through Housing Catalyst for subsequent payment to landlords on behalf of qualifying residents participating in a qualifying program. The agency earns an administrative fee for administering HAP payments and managing various voucher programs. However, the fee has not been fully funded by HUD. The anticipated prorated funding rate for administrative fees in 2023 is 92%. Housing Catalyst is only paid for units that are leased on the first of the month. The combined Housing Assistance Payments of $17.9M generate a total $1.5M in administrative fees for the housing assistance department. The department is budgeting a net loss of $180,339. Housing Choice Vouchers0F 1 It is assumed that this voucher program will continue to reach 97%-dollar utilization during the 2023 budget period. The agency administers 1,215 vouchers under this program with an estimated $15.11 million in HAP payments resulting in projected administrative fees of $1,216,569. There is an additional $37,827 in administrative fee income expected to be earned on new voucher issuances. Mainstream Vouchers1 The mainstream voucher program estimates an average increase of 2% for 2023 and an average 148 vouchers per month. The estimated HAP funding within this program is $2.38 million which should result in administrative fee income of $223,471 at the 92% proration rate. Emergency Housing Vouchers The Emergency Housing Vouchers administered by Housing Catalyst consist of 24 vouchers with HAP funding in excess of $408,000 resulting in $25,539 in administrative fees. CATALYST FUND Housing Catalyst generates various other revenues that the agency has decided to earmark as Catalyst Funds. The sources of these revenue streams are mostly related to bond issuance and special limited partner fees. 1 This includes both Housing Catalyst and Larimer County vouchers. 2023 Budget Report | 14 Catalyst funds are special earmarked funds that can be utilized by department heads to fund “catalyst events” that support the mission and strategic goals of the agency. Department heads can make formal proposals to the executive team for one-time monies funded for process improvements, short term staffing, or other expenses that are deemed critical to the success of the agency. The agency is projecting to generate $134,451 in available Catalyst funds for 2023. Agency Parent Budget The full budget is located in Exhibit 1. Highlights for the parent budget are provided here. For presentation purposes there are blended component units that are omitted from the agency parent budget and reported separately. The separately stated blended component units are the public housing portfolio and Villages, Ltd. OPERATING INCOME The 2023 operating income budget for the agency parent is projected to be a total of $30,166,588. Of this amount $17,945,172 represents voucher revenue that passes through to recipients in the form of Housing Assistance Payments. An additional $549,809 is sourced from grant monies, with the balance of $11,671,607 representing agency revenues. Those agency revenues are broken out by type in Figure 9. The largest source of agency revenue is developer fee income at 25%. Figure 9 - Agency Parent Revenue by Type Management Fee Income 9% Accounting Fee Income 7% Site Labor Cost Recapture 14% Technology Management Cost Recapture 1% Voucher Administration Fees 12% Larimer County Housing Authority FeesResident Services Fee Income 11% Compliance Fees Income 2% Developer Fee Income 25% Work Order Income 8% Preventative Maint Income 5% Maint Project Mgmt Income 4% Maintenance Purchasing MUp Bond Issuance Fees 1% 2023 Budget Report | 15 The 2023 total projected operating income is expected to increase over 2022 proforma figures by 8.8% when adjusted for billed site labor.2 A key factor causing this increase is an increase in developer fees projected for 2023. For illustrative purposes, the year-over-year (YOY) Operating Income is presented in Figure 10 with 2023 adjusted for site labor recapture. OPERATING EXPENSES Combined operating expenses are budgeted to be $29,475,306 in 2023. This includes pass-through housing assistance payments totaling $17,945,713. The balance of operating expenses represents agency operating expenses in the amount of $11,530,134. The agency operating expenses include $1,638,879 in site staff labor that were included in the past.1F 2 Adjusting for the inclusion of the site labor there is no increase YOY in agency operating expenses; they have remained flat. Labor is a significant 2 Historically, site labor was recorded directly on the books of discretely presented component units. In 2023 these amounts have been included in both the revenue and expenses of the agency. Figure 10 - YOY Operating Income Figure 11 - Agency Parent Operating Expenses by Type (Omits Labor & HAP) $26,133,537 $26,222,403 $27,413,785 $28,527,709 2021 ACTUAL 2022 PROFORMA 2022 BUDGET 2023 BUDGET OPERATING INCOME OPERATING INCOME Linear (OPERATING INCOME) Legal 2% Training & Conferences 15% Tax & Audit 1% Consultants 8% Memberships & Fees 2% Facilities 7% Vehicle Fleet 2% Insurance 6% Technology 31% Office Equipment & Supplies 6% Other Adminsitrative Expenses 20% 2023 Budget Report | 16 expenditure for service-oriented companies such as Housing Catalyst. Thus, total labor expense represents 80% of all agency operating expenses budgeted for 2023 (removing HAP). The remaining 20% of agency operating expenses is made up of training, conferences, consulting services, facilities expenses, business insurance, technology, and other administrative expenses. NET OPERATING INCOME The 2023 net operating income (NOI) for Housing Catalyst is projected to be $691,280. This represents an $865,124 decrease from the prior year budget. The primary reason for the decrease is a reduction in budgeted government grants totaling $2,449,898 which is offset by favorable increases in agency income2F 3 . Specifically, developer fee income is budgeted to increase in 2023 over the 2022 budget year. The NOI for 2023 as a percentage of revenues is 2.29%. OTHER NON-OPERATING INCOME (EXPENSES) The 2023 non-operating income and expenses are made up of income and expense streams that are deemed not to be directly related to operating and are ancillary to operations. By separating out items that are not directly attributed to operations, it allows management to more closely monitor the operations of the agency. Interest income on soft debt is presented in this section of the income statement and represents earned interest on past real estate transactions where bond proceeds have been received and subsequently loaned to recipient project entity. These amounts are payable when each deal’s waterfall is triggered. There is $1,671,816 of soft debt interest income expected, which is $474,983 over what was budgeted in 2022. Non-operating expenses that are reflected in this section are depreciation, amortization, and interest expense. The 2023 budgeted amounts for these expenses are $164,635; $25,065; and $331,986 respectively. Housing Catalyst also shares in income for each real estate transaction where it retains minority ownership interest in the form of general partnerships. There is $33,000 budgeted for 2023 representing the agency’s estimated share of those partnership earnings. NET INCOME The 2023 net income is budgeted to be $1,881,694 which is a $179,342 decrease over the 2022 budget. The primary factor impacting net income is the reduction in governmental grants, as outlined in the net operating income section, which is offset by favorable increases in developer fees budgeted in 2023. Net income as a percentage of revenue for 2023 is 6.24%. 3 Taking into consideration adjustment for site staff billing since 2023 is first budget year being recorded both as income and expense for tracking purposes. 2023 Budget Report | 17 Key Definitions Net Income: Net income (“NI”), also called net earnings, is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes, and other expenses. It is a useful number for investors to assess how much revenue exceeds the expenses of an organization. This number appears on a company's income statement and is also an indicator of a company's profitability. (Investopedia, 2021) Net Operating Income: Net operating income (NOI) is a calculation used to analyze the profitability of real estate investments and organizations. NOI equals all revenue from the property, minus all reasonably necessary operating expenses. NOI is a before-tax figure, appearing on a property’s income and cash flow statement, that excludes principal and interest payments on loans, capital expenditures, depreciation, and amortization. When this metric is used in other industries, it is referred to as “earnings before interest, taxes, depreciation and amortization” (EBITDA). In our presentations we utilize the NOI term exclusively. Net Cash Flow: The net cash flow of an organization represents the sum over a period of time of the total cash received (inflow) from sales and loans less the total amount of money spent (outflow) by the company over the same period. It is an important measure of a company’s ability to survive and grow (Bankrate, 2021). 2023 Budget Report | 18 Blended Component Units – Consolidated HOUSING CATALYST, LLC Housing Catalyst, LLC was setup as a disregarded Limited Liability Corporation owned entirely by Housing Catalyst. The entity currently owns the Mason Parking Lot as well as ownership interest in various general partnership entities and special purpose entities. The combined activities from this blended component unit are projected to generate $249,590 in net income during the 2023 budget period. 2023 Budget Report | 19 Blended Component Units – Separately Stated PUBLIC HOUSING The 2023 public housing budget assumes the sale of the remaining public housing units. The sale is projected to result in a gain of $3.7M and cash proceeds of $4.4M. These funds will be utilized in future developments including the Impala project currently in progress. This closes out the last of the public housing owned and operated by the agency. VILLAGES, LTD. Housing Catalyst manages Villages. Ltd., a 501(c) (3) corporation, and all of its real estate holdings. This entity owns and manages 183 affordable housing units. During 2021, Villages, Ltd. appointed the Housing Catalyst Board of Commissioners as its Board of Directors. As a result, Villages Ltd. is reported as a blended component unit of Housing Catalyst under GASB pronouncements. The operating budget for this entity consists of one general operating fund, the Taft office, and sixteen separate property budgets. The consolidated 2023 budget is presented in detail along with a summary of the individual budgets in Exhibit 4. Villages, Ltd. is generating $1.266M in net income during the 2023 budget period that includes $1.178M in grant monies for the renovation of Village on Bryan. The properties owned by Villages, Ltd. do not require management of specific debt service coverage ratios or investor tax-loss requirements. Instead, the properties are managed against traditional real estate principles which include monitoring performance to ensure overall positive net operating income and surplus operational cash flow. The 2023 Villages, Ltd. budget contains the following significant assumptions. • The rehabilitation of the Bryan Avenue property with total project costs of $3,075,196 which is funded by $1,178,197 from a City of Fort Collins grant and $1,897,000 from unrestricted cash held by Villages, Ltd. and committed by the Board of Directors in 2022. • The 2022 budget assumes 50% completion of the Bryan property rehabilitation in 2022 and the remainder is expected to be completed in 2023. • A grant to Housing Catalyst in the amount of $120,000 to fund the mission of resident services and ensure that smaller or underserved properties have ability to utilize the resources. Description Total Total/Unit TOTAL OPERATING INCOME 17,202 307 TOTAL OPERATING EXPENSES 106,653 1,905 NET OPERATING INCOME -89,451 -1,597 NET NON-OPERATING INCOME (EXPENSE)500 9 NET INCOME -88,951 -1,588 PUBLIC HOUSING PORTFOLIO Period = 01/2023 - 12/2023 2023 Budget Report | 20 2023 Budget Report | 21 Discretely Presented Component Units Information in this section is presented to give additional insight into the factors and assumptions that have been used to develop the proposed 2023 budget for each of the discretely presented component units managed by Housing Catalyst. TAX CREDIT PROPERTIES The tax credit properties are budgeted to meet specific performance requirements outlined in the respective limited partnership agreements. The budgets ensure performance required to meet the Debt Service Coverage Ratio, which measures the project’s ability to pay debt obligations from operational cash flow. Exhibit 2 contains the 2023 budgets for each of the LIHTC properties as well as the calculated debt service coverage ratio. In each of the projects we anticipate meeting our obligations. Additionally, the limited partnership agreements project estimated tax-losses for the investors. Although the budgets ensure that the required minimum debt service coverage ratios are met, managing performance to narrowly meet the required debt service coverage ratio provides the ability to meet the expected tax-loss for the investors. Housing Catalyst targets reviewing tax losses annually after completion of the partnership tax returns to evaluate project tax-losses for the investors. Village On Elizabeth, LLLP Village on Elizabeth is a 48-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Elizabeth property is budgeted to generate $83,024 in net operating income sufficient to cover its required debt service ratio leaving $2,116 of excess over debt service. Village on Plum, LLLP Village on Plum is a 95-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Plum property is budgeted to generate $444,438 in net operating income sufficient to cover its required debt service ratio leaving $156,513 of excess over debt service. 2023 Budget Report | 22 Village on Redwood, LLLP Village on Redwood is a 72-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Redwood property is budgeted to generate $203,108 in net operating income sufficient to cover its required debt service ratio leaving $73,568 of excess over debt service. Village on Stanford, LLLP Village on Stanford is an 82-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Stanford property is budgeted to generate $189,776 in net operating income sufficient to cover its required debt service ratio leaving $55,286 of excess over debt service. Village on Shields, LLLP Village on Shields is a 285-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Shields properties are budgeted to generate $1.27M in net operating income sufficient to cover its required debt service ratio leaving $192,043 of excess over debt service. Redtail Pond Permanent Supportive Housing, LLLP Redtail Ponds Permanent Supportive Housing is a 60-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Redtail Pond property is budgeted to generate $226,158 in net operating income sufficient to cover its required debt service ratio leaving $120,568 of excess over debt service. Village on Horsetooth, LLLP Village on Horsetooth is a 96-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Village on Horsetooth property is budgeted to generate $465,463 in net operating income sufficient to cover its required debt service ratio leaving $131,967 of excess over debt service. Mason Place, LLP Mason Place is a 60-apartment project that was developed and is managed by Housing Catalyst. Financing for the project came through multiple sources including federal tax credits. The Mason Place property is budgeted to generate $225,976 in net operating income sufficient to cover its required debt service ratio leaving $3,285 of excess over debt service. 2023 Budget Report | 23 Oak 140, LLP A new community, Oak 140, broke ground in September 2021. The project was devised in partnership with the Downtown Development Authority and will feature commercial and office space, parking, and 79 apartments, including studio, one-bedroom, and two-bedroom options. Construction is set to be completed in January of 2023. The 2023 operating budget has been developed using similar properties as a basis for estimating revenues and expenses. Oak 140 is showing a net loss equal to $285,222. The project will have access to both a debt service and operating reserve to cover losses during its initial stabilization period. The reserves are $147,736 and $271,413 respectively. Managed Entities WELLINGTON COMMUNITY HOUSING AND HOUSING AUTHORITY Wellington Housing Authority went through a Section 18 disposition and converted 42 units of public housing to tenant-based voucher rental assistance in 2021. All 42 units transitioned to Wellington Community Housing (“WCH”), a non-profit corporation. All vouchers are Project Based Vouchers and attached to the apartments. The 42 homes now owned by WCH are now managed by Housing Catalyst and Housing Catalyst administers the vouchers. The Wellington Housing Authority entity remains active if WCH ever dissolves; however, it no longer holds any property. The budgets for these two entities are presented in Exhibit V in a consolidated view for presentation purposes only. The properties owned by Wellington Community Housing do not require management of specific debt service coverage ratios or investor tax-loss requirements. Instead, the properties are managed to perform within the confines of the HUD-administered Project Based Voucher subsidy amounts and budgeted operating expenses. The Wellington portfolio is budgeted to generate $44,135 in net operating income. Capital Budgets The property portfolio capital budgets are evaluated for all properties each year. Furthermore, five-year capital plans have been developed and evaluated for major modifications. The capital budget process includes a comprehensive evaluation of property needs and evaluation of available reserves to pay for needed improvements. When reserves are not maintained or sufficient then there is an evaluation of operating funds to ensure sufficient cash to pay for planned improvements. A summary of the proposed capital projects is presented along with projected reserve balances in EXHIBIT 6. 2023 Budget Report | 24 Conclusion While this report is intended to provide a thorough overview of 2023 budget projections, it does not contain all the data prepared and available. Detailed line-item budgets for each entity and underlying departments have been prepared and are available for review upon request. Housing Catalyst has undergone significant changes in its leadership structure in recent years. With these changes has come a shift in the utilization of resources and a continued focus on improved property management, administrative oversight, and development activities. Each year brings with it opportunities to improve and refine techniques and methods. 2023 is no different. In 2023 we have identified that the technology services segment was more aptly segregated into its own cost center and allocated to the agency’s departments. Additionally, we have made improvements to the reporting abilities of certain billing models, allocation, and aggregation techniques to enhance our leadership’s ability to monitor and make business decisions. The executive team is pleased to present this budget report which is a culmination of the efforts provided by directors, managers, and staff members. Without the contributions of these team members, we could not have provided such a detailed and thorough budget report. 2023 Budget Report | 25 Exhibits EXHIBIT 1: AGENCY PARENT BUDGET REPORTS EXHIBIT 2: LIHTC PORTFOLIO BUDGET REPORT EXHIBIT 3: PUBLIC HOUSING BUDGET REPORT EXHIBIT 4: VILLAGES, LTD. BUDGET REPORTS EXHIBIT 5: WELLINGTON BUDGET REPORT EXHIBIT 6: CAPITAL SUMMARY BUDGET REPORT 2023 Budget Report | 26 Exhibit 1 – Agency Partner Budget Reports 2023 Budget Report | 27 2023 Budget Report | 28 2023 Budget Report | 29 Exhibit 2 – LIHTC Portfolio Budget Report 2023 Budget Report | 30 EXHIBIT 2 – LIHTC PORTFOLIO BUDGET REPORT 2023 Budget Report | 31 Exhibit 3 – Public Housing Budget Report 2023 Budget Report | 32 Exhibit 4 – Villages, Ltd. Budget Reports 2023 Budget Report | 33 2023 Budget Report | 34 2023 Budget Report | 35 Exhibit 5 – Wellington Budget Report 2023 Budget Report | 36 Exhibit 6 – Capital Summary Budgets 2023 Budget Report | 37 2023 Budget Report | 38 2023 Budget Report | 39 Housing Catalyst Fort Collins, Colorado Annual Comprehensive Financial Report and Single Audit Report Year ended December 31, 2021 With Comparative Totals for the Year Ended December 31, 2020 Housing Catalyst Fort Collins, Colorado Annual Comprehensive Financial Report and Single Audit Report Year ended December 31, 2021 With Comparative Totals for the Year Ended December 31, 2020 Issued by: Finance and Accounting Department of Housing Catalyst Tonya Frammolino, Chief Financial Officer Housing Catalyst Table of Contents December 31, 2021 Introductory Section Letter of Transmittal i Government Finance Officers Association of the United States and Canada (GFOA) December 31, 2020 Certificate vii Organizational Chart viii List of Principal Officials ix Financial Section Report of Independent Auditors 1 Management's Discussion and Analysis 5 Basic Financial Statements: Statements of Net Position 16 Statements of Revenues, Expenses and Changes in Net Position 20 Statements of Cash Flows 22 Combining Statement of Net Position - Discretely Presented Component Units 26 Combining Statement of Revenues, Expenses and Changes in Net Position - Discretely Presented Component Units 27 Notes to Financial Statements 28 Combining Schedule of Net Position 59 Combining Schedule of Revenues, Expenses and Changes in Net Position 61 Combining Schedule of Net Position - Blended Component Units 63 Combining Schedule of Revenues, Expenses and Changes in Net Position - Blended Component Units 64 Statistical Section (Unaudited) Statistical Section Table of Contents 65 Net Position (Table 1) 66 Changes in Net Position (Table 2) 67 Operating Revenues by Source (Table 3) 69 Non-Operating Revenues by Source (Table 4) 70 Debt Service Coverage (Table 5) 71 Ratio of Debt to Capital Assets (Table 6) 73 Service Area Demographics / Statistics (Table 7) 74 Principal Employers for the City of Fort Collins (Table 8) 75 Resident Demographics / Population Statistics (Table 9) 76 Resident Demographics / Ethnicity Statistics (Table 10) 77 Number of Housing Catalyst Dwelling Units (Table 11) 78 Property Characteristics and Unit Composition (Table 12) 79 Number of Housing Catalyst Staff (Table 13) 80 Single Audit Section 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 81 Independent Auditors' Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 83 Schedule of Findings and Questioned Costs 86 Schedule of Expenditures of Federal Awards 88 Housing Catalyst Fort Collins, Colorado Introductory Section: Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organizational Chart List of Principal Officials July 26, 2022 Cathy Mathis, Chairperson of the Board of Commissioners Members of the Board of Commissioners of Housing Catalyst We are pleased to present the Annual Comprehensive Financial Report (ACFR)for Housing Catalyst for the year ended December 31,2021.This report is prepared in conformance with standards of financial reporting as established by the Governmental Accounting Standards Board and the Government Finance Officers Association.The United States Department of Housing and Urban Development (HUD)requires that all public housing authorities publish within nine months after the fiscal year-end,financial statements presented in conformity with United States Generally Accepted Accounting Principles (GAAP),Housing Catalyst's financial statements presented here have been audited by Eide Bailly,LLP.The auditors issued an unmodified opinion on Housing Catalyst's financial statements for the years ended December 31,2021 and 2020.The data presented in this report is the responsibility of the management of Housing Catalyst.To the best of our knowledge and belief,the data as presented is accurate in all material aspects;is presented in a manner designed to fairly state the financial position and results of operations of Housing Catalyst; and all disclosures necessary have been included to enable the reader to gain an understanding of Housing Catalyst's financial affairs.GAAP requires that management provide a narrative introduction,overview and analysis to complement the basic financial statements in the form of Management's Discussion and Analysis (MD&A).Housing Catalyst's MD&A can be found immediately following the report of the independent auditors.This transmittal letter is designed to complement the MD&A and should be read in conjunction with it. Housing Catalyst is required to undergo an annual single audit in conformity with the provisions of Title 2 U.S.Code of Federal Regulations (CFR)Part 200,Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance).Information related to this single audit,including the 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;the independent auditors'report on compliance with requirements applicable to each major program and on internal control over compliance in accordance with the Uniform Guidance;the Schedule of Federal Awards;Schedule of Findings and Questioned Costs;and the schedule of prior year audit findings are included in the Single Audit Section of this report. Letter of Transmittal 2021 Annual Comprehensive Financial Report Organizational Overview Maintaining the fiscal viability of the organization. Achieving a social goal through the provision of affordable housing and supportive services. Achieving environmental sustainability. Housing Catalyst was created in 1971 by a petition of twenty-five citizens who were concerned about the community's lack of adequate,safe housing for all of its inhabitants.This report includes all programs of Housing Catalyst as well as all of its component units.Component units are legally separate entities for which a government is financially accountable.Housing Catalyst is not a component unit of the City of Fort Collins (the City)as defined by the pronouncements of the Governmental Accounting Standards Board.The governing body for Housing Catalyst is its Board of Commissioners (Board)comprised of seven members appointed by the City Council.The Board appoints a Chief Executive Officer (CEO)to administer the affairs of Housing Catalyst.Sources of funding include resident rents,administration of HUD programs,HUD subsidies passed through to program participants and development related fee income.The City is not financially accountable for the operations of Housing Catalyst,has no responsibility to fund deficits or receive surpluses and has not guaranteed Housing Catalyst's debt. Housing Catalyst's goals are accomplished through a variety of housing programs and activities. These activities include several programs developed by HUD such as the Low Rent Housing Program (Public Housing)and the Housing Choice Voucher Program.In addition to these federal programs,Housing Catalyst has established various instrumentalities to explore and develop innovative techniques for providing a variety of housing possibilities for the low to moderate-income residents of Fort Collins.These programs have allowed Housing Catalyst the flexibility to develop several private/public partnerships providing a variety of housing opportunities for Fort Collins residents. Housing Catalyst is our community’s leader in sustainable,long-term affordable housing solutions. Each year,the agency helps over 5,000 lower income individuals through innovative,award-winning affordable housing and programs that also benefit the city’s economy and revitalize neighborhoods. Housing Catalyst is a progressive housing provider and developer,offering permanent solutions that move people out of homelessness, stabilize families, and improve lives. To achieve our mission,all Housing Catalyst functions are operated with attention paid to a triple bottom line: Housing Catalyst currently owns and operates 70 Public Housing units in addition to administering over 1,200 Housing Choice Vouchers for Fort Collins and Larimer County.The Larimer County allocation of 100 of these vouchers,65 of which are targeted specifically to people with disabilities,is administered through an intergovernmental agreement.Housing Catalyst administered over $14 million in Housing Assistance Payments (HAP)to local landlords on behalf of participating families in 2021. This amount includes funding for 152 Veterans Affairs Supportive Housing program vouchers. ii Letter of Transmittal 2021 Annual Comprehensive Financial Report Economic Condition and Outlook Long-Term Planning and Major Commitments and Initiatives Congressional housing legislation and the federal budget affect Housing Catalyst more than local economic factors.Housing Catalyst's primary sources of funding are HUD,administrative management fees and other grants.As with most housing authorities,much of Housing Catalyst's operating and capital funding comes from federal dollars in the form of public housing operating subsidies and capital fund grants and Housing Choice Voucher administrative fees and Housing Assistance Payments.During the year ended December 31,2021,HUD and other federal agencies provided over 57%of Housing Catalyst's operating revenue and approximately 48%of Housing Catalyst's total revenues (including $112,334 in pass-through grant funding). For the Housing Choice Voucher program,HUD provides housing authorities with a fixed annual budget for Housing Assistance Payments (HAP)and for administration fees.Funding for the Housing Choice Voucher program was prorated at 100%and 86%of eligibility for HAP and administration fees,respectively.During the year ended December 31,2021,HUD also disbursed CARES Act funding to housing authorities nationwide to assist with additional administrative costs related to the preparation and response to the COVID-19 pandemic.During the year ended December 31,2021,Housing Catalyst spent the remaining balance of CARES Act administrative funding of $303,515 received during 2020. For the Public Housing program,housing authorities receive operating subsidies in accordance with an operating subsidy funding formula.In general,the calculated subsidy amount is the difference between an estimate of operating costs minus an estimate of income from rents.Operating subsidies are subject to annual appropriation by Congress.In 2021,Housing Catalyst,like all housing authorities nationwide,was funded at approximately 97%of eligibility.During the year ended December 31,2021,Housing Catalyst also spent the remaining balance of CARES Act funding from 2020 of $42,362. Housing Catalyst supports the development and preservation of affordable housing throughout Fort Collins,with funding from the City,State Division of Housing,Colorado Housing and Finance Authority,equity investors,and lenders.Along with its partners,Housing Catalyst combines high quality design with sustainable development principles and sound planning to develop and maintain a vibrant and diverse affordable housing portfolio.Housing Catalyst employs many strategies to create and preserve its stock of affordable housing.These strategies include new construction, acquisition,rehabilitation and preservation of existing housing to create and maintain high-quality sustainable units. Fort Collins has an estimated population of 172,321 (2021)and a median household income of $65,866.The median family income for Larimer County is $107,300.The rental market in Fort Collins remains tight with rents continuing to increase and vacancy rates around 5-6%. iii Letter of Transmittal 2021 Annual Comprehensive Financial Report PAB Authority City of Fort Collins 57,658,159$ Larimer County 24,499,712 Weld County 16,165,035 State of Colorado 55,641,372 Other Counties 15,419,346 Total 169,383,624$ Projects have utilized or will utilize PAB authority as follows: Bonds PAB Authority Issued Village on Plum 8,750,000$ 2014 Village on Redwood 12,000,000 2016 Village on Horsetooth 19,190,000 2017 Village on Shields 35,000,000 2017 Lakeview on the Rise 30,950,600 2018 Meadows Townhomes 6,500,000 2020 Swallow Road Apartments 13,200,000 2021 Oak 140 14,272,787 2021 Future Projects 29,520,237 - Total 169,383,624$ Between 2011 and 2013,Housing Catalyst analyzed options to dispose of or reposition the 154 units of public housing operated by the organization.This analysis included both a disposition strategy under Section 18 of the Housing Act of 1937 (Section 18)and the use of the opportunities available under the HUD Rental Assistance Demonstration (RAD)Program.In late 2013 it was determined that the best approach would be to reposition the entire portfolio of 154 public housing units using a combination of disposition and conversion utilizing the HUD RAD program.In mid-2014,Housing Catalyst submitted an application for a multi-phase development under the RAD program which proposed to use proceeds from the disposition of the public housing portfolio in seven separate projects.The seven projects were projected to result in the development,or renovation,of 665 units of affordable housing within Fort Collins. In 2019,after completing three projects under the RAD program,which resulted in the disposition of 84 of the 154 public housing units,a decision was made to pursue a disposition strategy once again for the remaining 70 public housing units using the Section 18 criteria.The first three projects resulted in the construction or preservation of 453 affordable housing units.The repositioning of the remaining 70 public housing units is now expected to be completed over the next 2-3 years.Housing Catalyst plans to utilize proceeds from the Section 18 disposition to renovate and preserve 26 existing units,known as Impala,which will also result in the construction of an additional 40 new units. A separate renovation will preserve another 15 existing units located at 2155 Plum. iv Housing Catalyst began to accumulate the assignment of significant Private Activity Bond (PAB) authority in 2013 for the purpose of rehabilitating,developing and refinancing affordable housing units located in Fort Collins,Colorado.Through 2020,Housing Catalyst had secured the following assignments: Letter of Transmittal 2021 Annual Comprehensive Financial Report Financial Information In addition to other funding sources,projects that have used portions of the PAB authority include: Village on Plum,a 95 unit rehabilitation project;Village on Redwood,a new-build project that consists of 72 units of affordable housing;Village on Horsetooth,a new-build project of 96 affordable units;Village on Shields,a 285 unit rehabilitation project;Lakeview on the Rise,a 180 affordable unit new-build project with a private developer for which Housing Catalyst was the conduit issuer and Meadows Townhomes,a 51 affordable unit new-build project with a private developer for which Housing Catalyst was also the conduit issuer. In early 2021,Housing Catalyst utilized $13.2 million of PAB authority as a conduit issuer for an 84- unit rehabilitation project in partnership with CARE Housing,Inc.Housing Catalyst is the developer on this project.Housing Catalyst also utilized additional PAB authority later in 2021 as a conduit issuer for an 84-unit new-build project with developer, Mercy Housing, Inc. In 2022,Housing Catalyst will continue the development of Oak 140,a 79-unit new-build project located in downtown Fort Collins that includes commercial space on the ground floor.This mixed- use project is in partnership with the Fort Collins Downtown Development Authority.Housing Catalyst is the developer for the project and will operate the 79 affordable units while the Downtown Development Authority will own and operate the commercial space with Housing Catalyst retaining a 99-year lease on one of the commercial units for expansion of facilities for staff.The project is being financed using 4%LIHTC’s,City of Fort Collins grant funds,loan from Housing Catalyst and use of PAB authority accumulated by Housing Catalyst.Housing Catalyst utilized a general revenue pledge enhanced by its Standard & Poor's credit rating for the public bond offering. Management of Housing Catalyst is responsible for establishing and maintaining an internal control structure designed to ensure that Housing Catalyst's assets are protected from loss,theft or misuse and that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with GAAP.Housing Catalyst has designed its internal control structure to provide reasonable,but not absolute,assurances that those objectives are met.The concept of reasonable assurance recognizes that:(1)the costs of a control should not exceed the benefits likely to be derived and (2)the valuation of costs and benefits requires estimates and judgment by management. As a recipient of federal awards,Housing Catalyst is responsible for ensuring that adequate internal controls are in place to provide compliance with applicable laws,regulations,contracts and grants related to those programs.Those internal controls are subject to periodic evaluation by management, and their independent auditors. v As part of Housing Catalyst's single audit,tests are made to determine the adequacy of the internal controls,including that portion related to federal award programs,as well as to learn whether Housing Catalyst has complied with applicable laws,regulations,contracts and grants.Housing Catalyst's single audit for the year ended December 31,2021 found no instances of material weakness in internal control.Audit reports regarding this are included in this Annual Report in the Single Audit Section. Letter of Transmittal 2021 Annual Comprehensive Financial Report Other Information - Awards Acknowledgments Respectfully submitted, Michele Christensen Chief Operating Officer and Acting Chief Executive Officer Tonya Frammolino Chief Financial Officer Preparation of the Annual Comprehensive Financial Report on a timely basis was accomplished through the dedicated service of the entire staff of the Finance and Accounting department.Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. Our sincere appreciation is also extended to the management and staff of Eide Bailly, LLP who provided necessary expertise and technical assistance. In closing,without the leadership and support of the members of the Board of Commissioners, preparation of this report would not have been possible. The Government Finance Officers Association of the United States and Canada (GFOA)awarded a Certificate of Achievement for Excellence in Financial Reporting to Housing Catalyst for its annual comprehensive financial report for the year ended December 31, 2020.This was the eighth consecutive year that Housing Catalyst has achieved this prestigious award.In order to be awarded a Certificate of Achievement,a government must publish an easily readable and efficiently organized annual comprehensive financial report.This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only.We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. vi vii Housing Catalyst Organizational Chart December 31, 2021 viii Housing Catalyst List of Principal Officials December 31, 2021 Board of Commissioners: Management: Cathy Mathis Julie Brewen Chairperson Chief Executive Director Jennifer Wagner Michele Christensen Vice-Chairperson Chief Operating Officer David Bye Tonya Frammolino Commissioner Chief Financial Officer Emily Francis Kristin Fritz Commissioner Chief Real Estate Officer Ann Green Resident Commissioner Hep Wilkins Commissioner Lizette Mill Commissioner ix Housing Catalyst Fort Collins, Colorado Financial Section: Report of Independent Auditors Management's Discussion and Analysis Basic Financial Statements Notes to Basic Financial Statements Combining Financial Schedules What inspires you, inspires us. | eidebailly.com 4310 17th Ave. S. | P.O. Box 2545 | Fargo, ND 58108-2545 | T 701.239.8500 | F 701.239.8600 | EOE 1 Independent Auditor’s Report To the Board of Commissioners Housing Catalyst Fort Collins, Colorado Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the business-type activities and the aggregate discretely presented component units of the Fort Collins Housing Authority (the Authority) as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the aggregate discretely presented component units of the Authority, as of December 31, 2021, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards (Government Auditing Standards), issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. The financial statements of the discretely presented component units, except for Oak 140, LLLP, were not audited in accordance with Government Auditing Standards. Emphasis of Matter As discussed in Note 1 to the financial statements, the Authority has reported a change in its reporting entity, which has resulted in a restatement of the net position as of January 1, 2021. Our opinions are not modified with respect to these matters. 2 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority‘s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 Authority‘s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. 3 Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required 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 basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The accompanying combining statements as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and is also not a required part of the financial statements. 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 basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying combining statements and Schedule of Expenditures of Federal Awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory section and statistical section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. 4 In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 26, 2022 on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s 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 Authority’s internal control over financial reporting and compliance. Fargo, North Dakota July 26, 2022 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Financial Highlights Housing Catalyst offers readers of the financial statements this narrative overview and analysis of the financial activities of Housing Catalyst for the fiscal year ended December 31,2021.We encourage readers to consider the information presented here in conjunction with Housing Catalyst’s financial statements, which begin on page 16. •The assets and deferred outflows of Housing Catalyst exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $87,782,116 (net position),an increase of $10,181,769 from the prior year balance.The most significant contributing factors to the current year increase was other grant revenue of $5,153,257 which increased by $3,342,921 as compared to the prior year and gain on sale of capital assets for the year of $3,900,231 as compared to the prior year balance of $0.Of the other grant income received,a total of $200,000 was loaned to Mason Place, LLLP,a tax credit partnership,and $4,294,545 was loaned to Oak 140,LLLP,a tax credit partnership, to assist in financing the construction of low income housing. •As of the close of the current fiscal year,Housing Catalyst’s programs had an unrestricted net position of $80,392,605 and $139,150 in restricted net position,which represents unspent HUD voucher funding. •Housing Catalyst’s unrestricted cash balance at December 31,2021 was $17,525,157, representing an increase of $4,328,219 (33%)from December 31,2020.The increase was mainly due to the collection of developer fees during the year of $1,472,444 and the net proceeds from the sale of capital assets of $4,712,135, net of the purchase of capital assets of $2,092,590. •Gain on sale of capital assets of $3,900,231 is due to the sale of the Village on Swallow property to the new tax credit partnership,Swallow Roads Apartments,LLLP.The development of the property will be managed by Housing Catalyst. •Developer fee income remained consistent with the prior year balance,increasing by $21,442 (1%)as compared to the prior year.The prior year balance of $1,514,318 represents the final balance of developer fee income related to the development of Mason Place and fees related to the rehabilitation of the Villages on Myrtle,a property owned by Villages and managed by Housing Catalyst.The balance of current year developer fee income of $754,081 represents the initial developer fees for the development of Oak 140 and Swallow Road Apartments and also the remaining fees related to the rehabilitation of the Village on Myrtle. •Housing Catalyst received HUD operating funding of $15,532,035,internal service fees (management fees and overhead cost allocations)of $2,759,078 and rental income of $2,497,418 for the year.Housing Catalyst paid out $14,024,566 in housing assistance payments and incurred $8,761,472 in other operating expenses (excluding depreciation and amortization of $576,324). 5 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Overview of the Basic Financial Statements • Reports on Compliance • Schedule of Expenditures of Federal Awards • Schedule of Findings and Questioned Costs This discussion and analysis is intended to serve as an introduction to Housing Catalyst’s basic financial statements.Housing Catalyst’s basic financial statements are comprised of:1)fund financial statements and 2)notes to the financial statements.As required by HUD,this report also includes supplemental information such as: The Statement of Net Position presents information on all of Housing Catalyst's assets and liabilities, with the difference between the two reported as net position.Over time,increases or decreases in net position may serve as a useful indicator of whether the financial position of Housing Catalyst is improving or deteriorating. The Statement of Revenues,Expenses and Changes in Net Position presents information showing how Housing Catalyst's net position changed during the most recent fiscal year.All changes in net position are reported as soon as the underlying event giving rise to the change occurs,regardless of the timing of related cash flows.Thus,revenues and expenses are reported in this statement for some items that will only result in cash flows in past or future periods. The Statement of Cash Flows presents information showing Housing Catalyst's inflows and outflows of cash and cash equivalents during the most recent fiscal year.All changes in cash and cash equivalents are reported as soon as the underlying event giving rise to the change occurs,regardless of the timing of related changes in net position.Thus,cash flows are reported in this statement for some items that will only result in revenue or expenses in past or future periods.This statement provides answers to such questions as where did the cash come from,how was cash used and what was the change in the cash balance during the year. The Combining Statements of Net Position and of Revenues,Expenses and Changes in Net Position for Discretely Presented Component Units presents the financial information for Housing Catalyst's discretely presented component units.The discretely presented component units are described in Note 1 of the financial statements. Notes to the Basic Financial Statements provide financial statement disclosures that are an integral part of the basic financial statements.Such disclosures are essential to a comprehensive understanding of the information provided in the basic financial statements. 6 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Financial Analysis Statements of Net Position: 2021 2020 2019 Current assets, unrestricted 20,365$ 15,221$ 15,917$ Other current assets, restricted 463 1,630 362 Capital assets, net 8,224 9,167 9,178 Non-current assets 80,928 55,272 52,042 Total Assets 109,980$ 81,290$ 77,499$ Current liabilities 1,143$ 1,522$ 808$ Current liabilities payable from restricted assets 523 864 334 Long-term liabilities 20,479 985 2,373 Total Liabilities 22,145 3,371 3,515 Deferred Inflows 53 318 379 Net Investment in Capital Assets 7,250 8,044 6,695 Restricted Net Position 139 824 286 Unrestricted Net Position 80,393 68,733 66,624 Total Net Position 87,782 77,601 73,605 Total Liabilities, Deferred Inflows & Net Position 109,980$ 81,290$ 77,499$ The following table reflects the condensed Statements of Net Position for the organization (balances in thousands of dollars). $- $20 $40 $60 $80 $100 $120 2021 2020 2019MillionsAssets, Liabilities, Deferred Inflows and Net Position Total Assets Total Liabilities Deferred Inflows Total Net Position 7 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Non-current assets consists of long-term developer fees receivable,lease receivable,notes receivable, long-term prepaid lease,investments in tax credit partnerships and investments in future developments.Non-current assets increased by nearly $25.7 million (46%)due to increases in notes receivable of approximately $25.4 million and long-term prepaid lease of approximately $1.3 million, along with a decrease to long-term developer fees receivable of approximately $770 thousand. Capital assets include land,buildings,building improvements,furniture and equipment and are shown net of accumulated depreciation.Capital assets decreased by approximately $943 thousand (10%), primarily due to current year depreciation and amortization expense and the sale of the Village on Swallow property, which was nearly fully depreciated. Current liabilities consist of accounts payable,accrued liabilities,accrued wages and payroll tax, accrued interest,unearned revenue,balances due to other agencies and current portion of leases and notes payable.Current liabilities decreased by over $379 thousand (25%),primarily due to decreases in the balances of accounts payable and accrued liabilities due to regular operations. Current liabilities payable from restricted assets consists of tenant security deposits payable,family self sufficiency escrow balances payable,flex fund escrow balances and unspent grant funds.These liabilities decreased by approximately $341 thousand (39%)as compared to the prior year.The decrease was primarily due to the current year spending of the remaining CARES Act grant funds which were received during 2020. Long-term liabilities consist of leases and notes payable.Long-term liabilities increased by approximately $19.5 million (1,979%)as compared to the prior year.The increase is primarily due to the issuance of $19.28 million in revenue bonds which were loaned to Oak 140,LLLP to fund the construction of a 79-unit building in Fort Collins and an additional $535 thousand loan received from FirstBank and loaned to FC DDA,LLC to aid in funding the construction of the commercial portion of the building at Oak 140. Unrestricted current assets are comprised of cash,receivables,prepaid items and inventories.The balance of unrestricted current assets increased by over $5.14 million (34%)as compared to December 31,2020.The increase is primarily due to an increase in unrestricted cash with an increase of approximately $4.33 million during the year. Restricted current assets are comprised of cash that is restricted for payment of tenant security deposits,family self sufficiency program escrow balances,flex fund escrow balances and other unspent grant funding.The balance of restricted current assets decreased by approximately $1.17 million (72%)as compared to the prior year,primarily due to the spending of HUD CARES Act funding in the Housing Choice Voucher program during the current year of $335 thousand and the transition of HUD housing assistance payment funds to HUD-Held reserves of $777 thousand.The funds held in HUD-Held reserves are available for future housing assistance payments, as needed by the program. 8 Housing Catalyst Management's Discussion and Analysis December 31, 2021 The first category,net investment in capital assets represents Housing Catalyst's equity in land, buildings,building improvements,furniture and equipment,net of related outstanding debt.The second category,restricted net position,has external limitations on the way in which these assets can be used. The last category,unrestricted net position,represents amounts that are available to Housing Catalyst to be used for any lawful and prudent purpose.Total net position of Housing Catalyst increased by approximately $10.1 million (13%) from December 31, 2020 to December 31, 2021. Deferred inflows consist of the balance of lease income expected to be received over the life of the lease of the Mason street parking lot.The decrease in deferred inflows of approximately $265 thousand (83%)as compared to the prior year is mainly due to the revision of the lease during the year and the recognition of current year lease income. Housing Catalyst's current ratio reflects the relationship between current assets and current liabilities and is a measure of Housing Catalyst's ability to pay short-term obligations.At December 31,2021 and 2020, Housing Catalyst's current ratios were 12:5 and 7:1, respectively. Net position represents the equity of Housing Catalyst after liabilities are subtracted from assets.Net position is divided into three major categories. 9 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Revenues, Expenses and Changes in Net Position: 2021 2020 2019 Revenues: Grant income 20,685$ 16,505$ 14,547$ Administrative fees 2,759 2,719 2,502 Tenant income 2,498 2,776 2,796 Interest income 1,579 1,457 1,466 Developer fees 1,536 1,514 249 Gain on sale of capital assets 3,900 - 3,054 Capital grants and contributions 178 169 158 Other 614 315 1,824 Total Revenue 33,749 25,455 26,596 Expenses Housing assistance payments 14,025 12,279 11,223 Administrative 6,204 5,862 4,874 Maintenance 1,684 1,659 1,723 Depreciation 576 660 717 Utilities 264 282 275 Insurance 191 186 190 Interest expense and financing costs 205 101 191 Other 419 430 377 Total Expenses 23,568 21,459 19,570 Change in Net Position 10,181 3,996 7,026 Net Position - Beginning of Year 77,601 73,605 66,579 Net Position - End of Year 87,782$ 77,601$ 73,605$ The following table compares the revenue and expenses for the current and previous periods (balance in thousands of dollars): Revenues increased by approximately $8.3 million (33%)from the year ended December 31,2020 to the year ended December 31,2021.The increase is primarily due to the increases in grant income ($4.1 million) and gain of sale of capital assets ($3.9 million). 10 Housing Catalyst Management's Discussion and Analysis December 31, 2021 The following graph compares the revenues for the current and previous years: The following graph compares the expenses for the current and previous years: Departmental Financial Analysis Housing Catalyst uses departmental accounting to ensure and demonstrate compliance with finance- related legal requirements.Each of the departments has a specific objective and purpose to accomplish.The focus of Housing Catalyst’s programs is to provide information on near-term inflows, outflows,and balances of spendable resources.During 2020,Housing Catalyst maintained seven departmental programs as described below: Expenses increased by approximately $2.1 million (10%)from the year ended December 31,2020 to the year ended December 31,2021.During the year,housing assistance payments increased by over $1.7 million (14%)as compared to the prior year due to increased costs and additional leasing of 5- Year Mainstream vouchers.Administrative expenses also increased by over $342 thousand (6%)due to increased staffing, particularly in property management, and annual compensation increases. $- $5 $10 $15 $20 $25 $30 $35 $40 2021 2020 2019MillionsRevenue Developer Fees Nonoperating Income Tenant Income Administrative and Other Fees Grant Income - 5 10 15 20 25 2021 2020 2019MillionsExpenses Insurance and Other Interest Utilities Depreciation Maintenance Administrative Housing Assistance Payments 11 Housing Catalyst Management's Discussion and Analysis December 31, 2021 1. 2. 3. 4. 5. 6. Vouchers:Housing Catalyst managed 1,047 Housing Choice Vouchers (HCV),174 Veterans Affairs Supportive Housing (VASH)vouchers,50 Family Unification Program (FUP)vouchers,6 Foster Youth to Independence (FYI)vouchers,25 Emergency Housing Vouchers (EHV)and 178 Five Year Mainstream vouchers at year-end 2021. Public Housing:Owns and operates 70 units of housing for rent to low-income families.The program ended 2021 with a net position of $3,659,002 of which $2,734,599 (75%)is invested in capital assets;and $924,403 is available as operating reserves.The main sources of revenue are rents charged to tenants, HUD annual operating subsidy, and capital grants. Management:Provides administrative support for all departments and has outside management contracts with Mason Place (60 units),Villages,Ltd.(227 units),Wellington Community Housing (42 units),Village on Elizabeth (48 units),Village on Stanford (82 units),Redtail Ponds PSH (60 units),Village on Plum (95 units),Village on Redwood (72 units),Village on Shields (285 units) and Village on Horsetooth (96 units).The net position is $1,305,284,of which ($8,918)(>1%)is invested in capital assets.The sources of revenues are cost allocations,administrative fees charged and maintenance fees charged. Housing Development:Provides for the development of rental housing and homeownership opportunities.This department presently has a net position in the amount of $59,610,799, including $114,894 invested in capital assets.Revenues for 2021 included rental income from the Mason street parking lot lease,CDBG,HOME and AHF grant income used for Mason Place, Fort Collins DDA grant income used for Oak 140,accrued interest income on loans to tax credit funded properties and developer fees. The revenue source for the Larimer County Housing Authority vouchers is HUD in the amount of $1,021,276,which is an increase of $43,325 (4%)as compared to the prior year total of $977,951.The current year housing assistance payment (HAP)expenses of $896,005 decreased by $20,60 (>1%)as compared to the prior year expenses of $898,065.The current year administrative expenses for the voucher program of $108,874 increased by $24,645 (29%) as compared to the prior year expenses of $84,229. The revenue source for the HCV,VASH,FUP and Mainstream vouchers is HUD in the amount of $13,678,328,which is an increase of $777,304 (6%)as compared to the prior year total of $12,901,024.The current year housing assistance payment (HAP)expenses of $13,128,561 increased by $1,747,410 (15%)as compared to the prior year expenses of $11,381,151.The current year administrative expenses for the voucher program of $1,210,412 increased by $252,852 (26%) as compared to the prior year expenses of $957,560. HUD Grant (FSS):Provides funding for the salary and benefit expenses of family self sufficiency staff. This is a cost reimbursement grant with a current year funding of $223,260. Larimer County Housing Authority (Blended Component Unit):Provides 100 rental vouchers for low-income clients.The revenue source is HUD cost reimbursement for the vouchers.The Larimer County Housing Authority is reported as a blended component unit of Housing Catalyst. 12 Housing Catalyst Management's Discussion and Analysis December 31, 2021 7. Capital Assets and Debt Administration Capital Assets Capital asset activity during the current fiscal year is as follows: Long-Term Debt •Village on Myrtle renovation project completed which included interior renovations in the amount of $693,644,improvements to the exterior and site of $93,491 and new furnishings and fixtures in the amount of $92,298,of which $640,920 was included in construction in progress at December 31, 2020 with $372,385 accrued as payable as of that date and paid during 2021. •Sale of the Village on Swallow property to Swallow Road Apartments,LLLP,a tax credit partnership with net proceeds of $4,712,135 and a gain on sale of $3,900,231. •Purchase of land located at 143 Remington Street in Fort Collins,Colorado for $1,325,724,of which a deposit of $51,000 was paid at the end of 2020.The land was subsequently transferred to DDA FC,LLC in exchange for a long-term lease at the commercial property to be constructed on the land. Additional information on the Authority's capital assets can be found in Note 1 on pages 31 through 32 and Note 6 on pages 39 through 40 of this report. As of December 31,2021,Housing Catalyst had four long-term loans totaling $20,614,923.The long- term loans are to fund the remodeling costs for the Authority's main offices on Mountain Avenue,to purchase the parking lot on Mason Street,to assist in funding the cost of the construction of the commercial portion of the building at Oak 140 and revenue bonds used to assist in funding the construction of the residential portion of the building at Oak 140. • Water heater replacements in Public Housing homes in the amount of $13,096. As of December 31,2021,Housing Catalyst's net investment in capital assets was $7,250,361 (net of accumulated depreciation and capital loans).This investment in capital assets includes land,buildings, improvements, equipment, and computer software, but does not included leased assets. • Roof replacement of various Public Housing homes in the amount of $168,853. Villages (Blended Component Unit):Owns and operates 185 units of housing for rent to low- income families and a leasing office.Villages ended 2021 with a net position of $22,675,622 of which $4,409,786 (19%)is invested in capital assets;and $18,265,836 is available as operating reserves. The main sources of revenue are rents charged to tenants and grants. 13 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Loan activity during the current fiscal year is as follows: Economic Outlook •Loan from FirstBank in the amount of $535,000 with funding loaned to DDA,LLC to assist in funding the construction of the commercial portion of the building at Oak 140. •Revenue bonds issues in the amount of $19,280,000 with funds loaned to Oak 140,LLLP,a tax credit partnership,to assist in funding the construction of the residential portion of the building at Oak 140. •Regular principal payments for the Village on Cowen property made to the Heatherington Trust in the amount of $28,035. The loan was paid off in full in April 2021. Housing Catalyst remains focused on development of new affordable housing units through both acquisition and new build strategies. Housing Choice Voucher ("HCV")program funding utilization is expected to remain close to 100% going forward based on current leasing levels and the large number of individuals on the waiting list. The level of HUD funding available for the HCV program,combined with rising rental rates,resulted in 97%utilization of housing assistance payment (HAP)funding and a nearly 90%HCV leased utilization in 2021.Despite the increase of total reserves,the level of funding received by HUD is expected to continue to negatively affect the total number of families served through the HCV programs due to rising rent prices and increased housing demand. Additional information on the Authority's debt can be found in Note 7 on pages 40 through 52 of this report. •Principal payments made to FirstBank on the Mountain Office remodel note in the amount of $54,715. •Regular principal payments for the Mason Street parking lot loan made to ANB in the amount of $31,202. Demand for affordable housing remains strong in the Fort Collins market.The rental market has tightened considerably in recent years and rents continue to increase.According to rentcafe.com apartment rents increased by an average of 11%in Fort Collins during 2021.Additionally,effects of the COVID-19 pandemic increased the demand for affordable rental housing at a time when expansion of affordable units has been challenging.This is expected to keep upward pressure on rental rates overall.Additional funding through federal,state and other emergency programs may keep rental collection rates at near normal levels in the near term.The longer-term outlook for rent collection and demand for rental housing will be driven by the length and depth of the economic recovery. 14 Housing Catalyst Management's Discussion and Analysis December 31, 2021 Contact Information Tonya Frammolino, Chief Financial Officer 1715 West Mountain Avenue Fort Collins, Colorado 80521 Housing Catalyst website - www.housingcatalyst.com This financial report is designed to provide the reader with a general overview of Housing Catalyst's finances and to demonstrate Housing Catalyst's financial accountability over its resources.Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Additionally,in early 2022,Housing Catalyst was approved to join HUD's Moving to Work (MTW) program under the Landlord Incentive cohort.The transition to MTW will allow the flexibility of funding received from HUD to be applied to areas most needed and the ability to initiate new programs and strategies within the community.The transition will not directly impact the overall HUD funding received by Housing Catalyst. 15 Housing Catalyst Statement of Net Position December 31, 2021 Discretely Primary Presented Government Component Units Assets and Deferred Outflows of Resources Current Assets Cash and cash equivalents 17,525,157$ 2,190,046$ Restricted cash and cash equivalents 463,195 22,359,917 Accounts receivable Grants 100,637 - Tenants 26,403 120,890 Developer fees, current 1,801,735 - Other 366,342 51,298 Accrued interest 296,320 - Lease receivable - current portion 15,661 - Notes receivable - current portion 127,736 - Prepaid expenses and other current assets 34,240 45,644 Inventory 70,413 - Total Current Assets 20,827,839 24,767,795 Noncurrent Assets Capital Assets Non-depreciable 4,460,964 18,656,353 Depreciable, net 3,689,070 125,226,118 Leased capital assets, net 74,091 - Total Capital Assets, Net 8,224,125 143,882,471 Other Assets Developer fees receivable, long-term 5,637,751 - Lease receivable - net of current portion 38,230 - Notes receivable - net of current portion 73,778,672 - Prepaid long-term lease 1,325,724 - Other assets, net - 632,981 Investment in tax credit partnerships 147,735 - Total Other Assets 80,928,112 632,981 Total Noncurrent Assets 89,152,237 144,515,452 Total Assets 109,980,076 169,283,247 Deferred Outflows of Resources - - Total Assets and Deferred Outflows of Resources 109,980,076$ 169,283,247$ See Notes to Financial Statements 16 Housing Catalyst Statement of Net Position December 31, 2021 Discretely Primary Presented Government Component Units Liabilities, Deferred Inflows of Resources and Net Position Current Liabilities Accounts payable 78,873$ 1,706,216$ Accrued liabilities 216,542 - Accrued compensation 614,216 - Accrued interest payable 12,798 269,715 Unearned revenues 212,909 - Tenant security deposits payable 97,896 363,194 Due to related party - 6,638 Money held in escrow 211,811 - Developer fees payable - current portion - 1,020,056 Leases payable - current portion 34,564 - Notes and mortgages payable - current portion 186,577 6,836,326 Total Current Liabilities 1,666,186 10,202,145 Long-Term Liabilities Leases payable - net of current portion 50,586 - Notes and mortgages payable - net of current portion 20,428,346 117,121,277 Developer fees payable - net of current portion - 5,637,751 Total Long-Term Liabilities 20,478,932 122,759,028 Total Liabilities 22,145,118 132,961,173 Deferred Inflows of Resources 52,842 - Net Position Net investment in capital assets 7,250,361 19,924,868 Restricted - housing assistance payments 139,150 - Unrestricted 80,392,605 16,397,206 Total Net Position 87,782,116 36,322,074 Total Liabilities, Deferred Inflows of Resources and Net Position 109,980,076$ 169,283,247$ See Notes to Financial Statements 17 Housing Catalyst Statement of Net Position December 31, 2020 (Comparative Totals Only) Discretely Primary Presented Government Component Units Assets and Deferred Outflows of Resources Current Assets Cash and cash equivalents 13,196,938$ 2,974,010$ Restricted cash and cash equivalents 1,629,716 4,637,596 Accounts receivable Grants 60,837 - Tenants 54,787 185,870 Developer fees, current 967,959 - Other 332,310 64,391 Accrued interest 341,546 - Lease receivable - current portion 56,607 - Notes receivable - current portion 94,549 - Prepaid expenses and other current assets 63,897 49,801 Inventory 52,228 - Total Current Assets 16,851,374 7,911,668 Noncurrent Assets Capital Assets Non-depreciable 5,294,762 25,757,139 Depreciable, net 3,762,765 117,295,424 Leased capital assets, net 109,345 - Total Capital Assets, Net 9,166,872 143,052,563 Developer fees receivable, long-term 6,408,210 - Lease receivable - net of current portion 301,867 - Notes receivable - net of current portion 48,413,332 - Other assets, net - 528,916 Investment in tax credit partnerships 148,278 - Total Other Assets 55,271,687 528,916 Total Noncurrent Assets 64,438,559 143,581,479 Total Assets 81,289,933 151,493,147 Deferred Outflows of Resources - - Total Assets and Deferred Outflows of Resources 81,289,933$ 151,493,147$ See Notes to Financial Statements 18 Housing Catalyst Statement of Net Position December 31, 2020 (Comparative Totals Only) Discretely Primary Presented Government Component Units Liabilities, Deferred Inflows of Resources and Net Position Current Liabilities Accounts payable 266,179$ 979,030$ Accrued liabilities 574,877 - Accrued compensation 522,686 - Accrued interest payable 7,051 490,214 Unearned revenues 513,274 - Tenant security deposits payable 119,943 350,223 Due to related party - 7,387 Money held in escrow 235,280 - Developer fees payable - current portion - 929,045 Leases payable - current portion 33,375 - Notes and mortgages payable - current portion 113,951 717,829 Total Current Liabilities 2,386,616 3,473,728 Long-Term Liabilities Leases payable - net of current portion 85,150 - Notes and mortgages payable - net of current portion 899,674 98,491,062 Developer fees payable - 6,408,210 Other long-term liabilities - 929,198 Total Long-Term Liabilities 984,824 105,828,470 Total Liabilities 3,371,440 109,302,198 Deferred Inflows of Resources 318,146 - Net Position Net investment in capital assets 8,043,902 43,843,672 Restricted 823,844 - Unrestricted 68,732,601 (1,652,723) Total Net Position 77,600,347 42,190,949 Total Liabilities, Deferred Inflows of Resources and Net Position 81,289,933$ 151,493,147$ See Notes to Financial Statements 19 Housing Catalyst Statement of Revenues, Expenses and Changes in Net Position Year Ended December 31, 2021 Discretely Primary Presented Government Component Units Operating Revenues HUD PHA grants 15,532,035$ -$ Other grants 5,153,257 - Rental income 2,497,418 9,186,223 Administration fees 2,759,078 - Developer fees 1,535,760 - Other 614,023 538,501 Total Operating Revenues 28,091,571 9,724,724 Operating Expenses Housing assistance payments 14,024,566 - Administrative salaries and benefits 4,991,283 1,943,134 Maintenance salaries and benefits 961,249 - Other administrative 1,212,307 1,857,031 Ordinary maintenance 723,190 1,902,394 Depreciation and amortization 576,324 6,609,164 Utilities 263,560 548,406 Insurance 191,306 428,068 Payments in lieu of taxes 15,543 - Other 403,034 - Total Operating Expenses 23,362,362 13,288,197 Operating Income (Loss)4,729,209 (3,563,473) Non-Operating Revenues (Expenses) Interest income 1,579,465 1,226 Interest expense (204,172) (3,434,644) Other financing costs (851) - Gain (loss) on disposal of capital assets 3,900,231 (12,237) Total Non-Operating Revenues (Expenses), net 5,274,673 (3,445,655) Income (Loss) Before Contributions and Distributions 10,003,882 (7,009,128) HUD Capital Contributions 177,887 - Capital Contributions - 1,143,596 Priority Distributions - (3,343) Change in Net Position 10,181,769 (5,868,875) Net Position, Beginning of the Year, as Restated 77,600,347 42,190,949 Net Position, End of the Year 87,782,116$ 36,322,074$ See Notes to Financial Statements 20 Housing Catalyst Statement of Revenues, Expenses and Changes in Net Position Year Ended December 31, 2020 (Comparative Totals Only) Discretely Primary Presented Government Component Units Operating Revenues HUD PHA grants 14,694,471$ -$ Other grants 1,810,336 - Rental income 2,775,494 8,219,059 Administration fees 2,719,002 - Developer fees 1,514,318 - Other 314,820 603,556 Total Operating Revenues 23,828,441 8,822,615 Operating Expenses Housing assistance payments 12,279,216 - Administrative salaries and benefits 4,000,951 1,458,247 Maintenance salaries and benefits 825,383 - Other administrative 1,860,637 1,528,080 Ordinary maintenance 833,876 1,423,985 Depreciation and amortization 660,489 6,072,041 Utilities 281,787 497,902 Insurance 186,306 372,642 Payments in lieu of taxes 14,524 - Other 415,165 - Total Operating Expenses 21,358,334 11,352,897 Operating Income (Loss)2,470,107 (2,530,282) Non-Operating Revenues (Expenses) Interest income 1,457,131 4,597 Interest expense (100,103) (3,112,025) Other financing costs (1,000) - Total Non-Operating Revenues (Expenses), net 1,356,028 (3,107,428) Income (Loss) Before Contributions and Distributions 3,826,135 (5,637,710) HUD Capital Contributions 169,425 - Capital Contributions - 1,907,935 Priority Distributions - (3,123) Change in Net Position 3,995,560 (3,732,898) Net Position, Beginning of the Year 73,604,787 45,923,847 Net Position, End of the Year 77,600,347$ 42,190,949$ See Notes to Financial Statements 21 Housing Catalyst Statement of Cash Flows Year Ended December 31, 2021 Primary Government Operating Activities HUD PHA grants 15,788,282$ Other grants 5,306,079 Receipts from tenants 1,754,521 Administration fees 2,759,078 Other income 619,813 Developer fee income 1,472,443 Housing assistance payments (14,048,035) Payments to employees (5,861,002) Payments to suppliers (3,022,575) Net Cash from Operating Activities 4,768,604 Capital and Related Financing Activities Proceeds from issuance of revenue bonds 19,280,000 Proceeds from long-term debt 535,000 Principal payments on long-term debt (113,952) Principal payments on leases payable (33,375) HUD capital contributions 177,887 Proceeds from sale of capital assets 4,712,135 Interest paid on leases payable and long-term debt (198,425) Acquisition of capital assets (2,092,590) Net Cash from Capital and Related Financing Activities 22,266,680 Investing Activities Receipts on notes receivable 89,577 Note receivable advance to related party (24,319,073) Interest income 355,910 Net Cash used for Investing Activities (23,873,586) Net Change in Cash and Cash Equivalents and Restricted Cash 3,161,698 Transfer of Cash and Cash Equivalents - Cash and Cash Equivalents and Restricted Cash, Beginning of Year 14,826,654 Cash and Cash Equivalents and Restricted Cash, End of Year 17,988,352$ See Notes to Financial Statements 22 Housing Catalyst Statement of Cash Flows Year Ended December 31, 2021 Primary Government Reconciliation of Cash and Cash Equivalents and Restricted Cash Cash 17,525,157$ Restricted Cash 463,195 Total Cash and Cash Equivalents and Restricted Cash 17,988,352$ Reconciliation of Change in Net Position to Net Cash From Operating Activities Operating Income 4,729,209$ Adjustments to reconcile operating income to net cash from operating activities Depreciation and amortization 576,324 Other financing costs paid (851) Decrease in investment in tax credit partnerships 543 Decrease in deferred inflows of resources (265,304) Changes in assets and liabilities (Increase) decrease in assets: Receivables 195,818 Inventory (18,185) Prepaid expenses (21,343) Increase (decrease) in liabilities: Accounts payable 146,165 Tenant security deposits payable (22,047) Money held in escrow (23,469) Accrued compensation 91,530 Accrued liabilities (319,421) Unearned revenue (300,365) Net Cash from Operating Activities 4,768,604$ Schedule of Noncash Investing Activities: Increase in notes receivable from accrued interest 1,268,781$ Increase in capital assets from prepaid expenses and other current assets 51,000$ Increase in capital assets from accounts payable 333,471$ Increase in capital assets from accrued liabilities 38,914$ Increase in prepaid long-term lease from capital assets 1,325,724$ See Notes to Financial Statements 23 Housing Catalyst Statement of Cash Flows Year Ended December 31, 2020 (Comparative Totals Only) Primary Government Operating Activities HUD PHA grants 14,972,347$ Other grants 1,963,158 Receipts from tenants 2,808,123 Administration fees 2,719,002 Other income 122,484 Developer fee income 1,787,562 Housing assistance payments (12,251,458) Payments to employees (4,673,954) Payments to suppliers (3,376,307) Net Cash from Operating Activities 4,070,957 Capital and Related Financing Activities Principal payments on long-term debt (1,341,370) Principal payments on leases payable (30,030) HUD capital contributions 169,425 Interest paid on leases payable and long-term debt (81,448) Acquisition of capital assets (277,620) Net Cash used for Capital and Related Financing Activities (1,561,043) Investing Activities Receipts on notes receivable 250,485 Note receivable advance to related party (1,800,000) Interest income 254,648 Net Cash used for Investing Activities (1,294,867) Net Change in Cash and Cash Equivalents and Restricted Cash 1,215,047 Cash and Cash Equivalents and Restricted Cash, Beginning of Year 13,611,607 Cash and Cash Equivalents and Restricted Cash, End of Year 14,826,654$ See Notes to Financial Statements 24 Housing Catalyst Statement of Cash Flows Year Ended December 31, 2020 (Comparative Totals Only) Primary Government Reconciliation of Cash and Cash Equivalents and Restricted Cash Cash 13,196,938$ Restricted Cash 1,629,716 Total Cash and Cash Equivalents and Restricted Cash 14,826,654$ Reconciliation of Change in Net Position to Net Cash From Operating Activities Operating Income 2,470,107$ Adjustments to reconcile operating income to net cash from operating activities Depreciation and amortization 660,489 Other financing costs paid (1,000) Decrease in investment in tax credit partnerships 523 Decrease in deferred inflows of resources (60,599) Changes in assets and liabilities (Increase) decrease in assets: Receivables 197,900 Inventory 4,609 Prepaid expenses (50,937) Increase (decrease) in liabilities: Accounts payable 182,952 Tenant security deposits payable (6,394) Money held in escrow 27,758 Accrued compensation 152,380 Accrued liabilities 40,793 Unearned revenue 452,376 Net Cash from Operating Activities 4,070,957$ Schedule of Noncash Investing Activities: Increase in notes receivable from accrued interest 1,122,464$ See Notes to Financial Statements 25 Housing Catalyst Combining Statement of Net Position - Discretely Presented Component Units December 31, 2021 Mason Redtail Village on Village on Village on Village on Village on Village on Place Oak 140 Ponds PSH Elizabeth Horsetooth Plum Redwood Shields Stanford Total Assets Current Assets Cash 223,699$ 1,100$ 15,936$ 42,206$ 328,979$ 521,877$ 263,758$ 511,032$ 281,459$ 2,190,046$ Restricted cash 78,802 17,364,535 753,929 233,751 427,587 688,834 461,571 1,857,155 493,753 22,359,917 Accounts receivable Tenants 24,700 - 13,132 8,296 19,059 17,469 10,454 23,065 4,715 120,890 Other - - 48,028 - - 3,115 - - 155 51,298 Prepaid expenses 1,825 - 255 - - 39,637 - 155 3,772 45,644 Total Current Assets 329,026 17,365,635 831,280 284,253 775,625 1,270,932 735,783 2,391,407 783,854 24,767,795 Capital Assets Non-depreciable 3,013,850 7,396,217 862,000 640,000 1,113,963 543,454 230,000 3,858,432 998,437 18,656,353 Depreciable, net 13,869,153 - 7,848,791 2,327,971 21,306,625 10,411,765 15,061,260 49,607,237 4,793,316 125,226,118 Total Capital Assets, Net 16,883,003 7,396,217 8,710,791 2,967,971 22,420,588 10,955,219 15,291,260 53,465,669 5,791,753 143,882,471 Other Assets 153,276 - 33,223 1,765 89,074 34,178 51,784 263,077 6,604 632,981 Total Noncurrent Assets 17,036,279 7,396,217 8,744,014 2,969,736 22,509,662 10,989,397 15,343,044 53,728,746 5,798,357 144,515,452 Total Assets 17,365,305$ 24,761,852$ 9,575,294$ 3,253,989$ 23,285,287$ 12,260,329$ 16,078,827$ 56,120,153$ 6,582,211$ 169,283,247$ Liabilities and Net Position Current Liabilities Accounts payable 193,251$ 1,170,456$ 50,857$ 6,519$ 21,365$ 31,902$ 102,272$ 99,765$ 29,829$ 1,706,216$ Accrued interest payable 14,021 - 6,313 5,032 39,275 38,370 14,722 70,852 81,130 269,715 Tenant security deposits payable 11,800 - 12,000 21,150 50,201 49,837 42,186 136,221 39,799 363,194 Due to related party - - - 6,638 - - - - - 6,638 Developer fee payable - current portion 499,193 - - - 34,235 13,588 14,028 459,012 - 1,020,056 Notes and mortgages mortgages payable - current portion 6,147,416 - 51,833 21,106 158,207 136,897 47,564 228,441 44,862 6,836,326 Total Current Liabilities 6,865,681 1,170,456 121,003 60,445 303,283 270,594 220,772 994,291 195,620 10,202,145 Long-Term Liabilities Notes and mortgages payable - net of current portion 6,670,939 23,584,073 4,614,950 4,275,526 13,532,461 10,211,522 9,836,533 39,334,454 5,060,819 117,121,277 Developer fee payable - net of current portion 726,615 - - - 466,810 284,643 260,053 3,899,630 - 5,637,751 Total Long-Term Liabilities 7,397,554 23,584,073 4,614,950 4,275,526 13,999,271 10,496,165 10,096,586 43,234,084 5,060,819 122,759,028 Total Liabilities 14,263,235 24,754,529 4,735,953 4,335,971 14,302,554 10,766,759 10,317,358 44,228,375 5,256,439 132,961,173 Net Position Net investment in capital assets 4,064,648 (16,187,856) 4,044,008 (1,328,661) 8,729,920 606,800 5,407,163 13,902,774 686,072 19,924,868 Unrestricted (962,578) 16,195,179 795,333 246,679 252,813 886,770 354,306 (2,010,996) 639,700 16,397,206 Total Net Position 3,102,070 7,323 4,839,341 (1,081,982) 8,982,733 1,493,570 5,761,469 11,891,778 1,325,772 36,322,074 Total Liabilities and Net Position 17,365,305$ 24,761,852$ 9,575,294$ 3,253,989$ 23,285,287$ 12,260,329$ 16,078,827$ 56,120,153$ 6,582,211$ 169,283,247$ See Notes to Financial Statements 26 Housing Catalyst Combining Statement of Revenues, Expenses and Changes in Net Position - Discretely Presented Component Units Year Ended December 31, 2021 Mason Redtail Village on Village on Village on Village on Village on Village on Place Oak 140 Ponds PSH Elizabeth Horsetooth Plum Redwood Shields Stanford Total Operating Revenues Rental income 669,966$ -$ 828,534$ 496,049$ 1,186,280$ 1,137,523$ 763,172$ 3,353,669$ 751,030$ 9,186,223$ Other 11,282 - 312,792 29,244 16,904 55,369 24,504 70,393 18,013 538,501 Total Operating Revenues 681,248 - 1,141,326 525,293 1,203,184 1,192,892 787,676 3,424,062 769,043 9,724,724 Operating Expenses Administrative salaries and benefits 151,801 - 439,770 130,213 180,660 179,673 104,393 578,350 178,274 1,943,134 Other administrative 278,961 - 206,815 117,863 249,206 217,244 207,220 483,011 96,711 1,857,031 Regular and extraordinary maintenance 193,086 - 247,753 154,072 184,435 261,045 191,641 511,303 159,059 1,902,394 Depreciation and amortization 587,275 - 494,139 196,313 1,026,380 580,194 780,169 2,613,573 331,121 6,609,164 Utilities 52,731 - 73,493 34,918 67,695 76,649 58,208 144,880 39,832 548,406 Insurance 37,775 - 39,321 22,038 56,504 49,179 43,410 154,317 25,524 428,068 Total Operating Expenses 1,301,629 - 1,501,291 655,417 1,764,880 1,363,984 1,385,041 4,485,434 830,521 13,288,197 Operating Income (Loss)(620,381) - (359,965) (130,124) (561,696) (171,092) (597,365) (1,061,372) (61,478) (3,563,473) Non-Operating Revenues (Expenses) Interest income 15 - 161 208 268 66 152 271 85 1,226 Interest expense (363,606) - (155,794) (191,395) (384,713) (399,257) (350,346) (1,377,220) (212,313) (3,434,644) Loss on disposal of capital assets - - (4,352) - - - (7,885) - - (12,237) Total Non-Operating Revenues (Expenses)(363,591) - (159,985) (191,187) (384,445) (399,191) (358,079) (1,376,949) (212,228) (3,445,655) Loss Before Contributions and Distributions (983,972) - (519,950) (321,311) (946,141) (570,283) (955,444) (2,438,321) (273,706) (7,009,128) Capital Contributions 1,136,273 7,323 - - - - - - - 1,143,596 Priority Distributions - - - (3,343) - - - - - (3,343) Change in Net Position 152,301 7,323 (519,950) (324,654) (946,141) (570,283) (955,444) (2,438,321) (273,706) (5,868,875) Net Position, Beginning of the Year 2,949,769 - 5,359,291 (757,328) 9,928,874 2,063,853 6,716,913 14,330,099 1,599,478 42,190,949 Net Position, End of the Year 3,102,070$ 7,323$ 4,839,341$ (1,081,982)$ 8,982,733$ 1,493,570$ 5,761,469$ 11,891,778$ 1,325,772$ 36,322,074$ See Notes to Financial Statements 27 Housing Catalyst Notes to Financial Statements December 31, 2021 Note 1 - Nature of Operations and Significant Accounting Policies General Housing Catalyst is governed by a seven-member Board of Commissioners. Reporting Entity • The organization is legally separated (can sue and be sued in their own name) • Housing Catalyst holds the corporate powers of the organization • Housing Catalyst appoints a voting majority of the organization’s board • Housing Catalyst is able to impose its will on the organization • The organization has the potential to impose a financial benefit/burden on Housing Catalyst • There is fiscal dependency by the organization on Housing Catalyst Blended Component Units Housing Catalyst,formally known as Fort Collins Housing Authority (Housing Catalyst)is a corporate body created in May 1971 and uses available federal,state,and local resources to serve the residents of Fort Collins,Colorado by upgrading and maintaining the existing housing stock,encouraging the construction of new housing affordable to low and moderate income households,and providing low and moderate income families and senior households with decent,safe,and affordable rental housing opportunities.Housing Catalyst owns and operates 70 units of family housing and administers 1,082 Housing Choice Vouchers (HCV),174 Veterans Affairs Supportive Housing (VASH)vouchers,50 Family Unification Program (FUP) vouchers,6 Foster Youth to Independence (FYI)vouchers,25 Emergency Housing (EHV)vouchers and 243 Five Year Mainstream vouchers. Housing Catalyst’s financial statements include the accounts of all Housing Catalyst operations.The criteria for including organizations as component units within the reporting entity,as set forth in Section 2100 of the Governmental Accounting Standards Board’s (GASB)Codification of Government Accounting and Financial Reporting Standards, include whether: Included within the financial reporting entity of Housing Catalyst as a blended component unit is the Larimer County Housing Authority (LCHA).The purpose of LCHA is to provide safe and sanitary accommodations to the low and moderate-income residents of the County of Larimer.Over the past several years,Housing Catalyst has maintained a contractual relationship with LCHA for the administration of its housing activities. However,in January 1997,the Larimer County Board of Supervisors assigned all interests in LCHA to Housing Catalyst,as LCHA was deemed immaterial with respect to the overall functions of the County.Thus,despite being a legally separate entity and receiving funds directly from the Department of Housing and Urban Development,LCHA has been accounted for as a blended component unit of Housing Catalyst as the members of Housing Catalyst's Board also acts as the governing body of LCHA and LCHA's operations are fully the responsibility of the management of Housing Catalyst.Accordingly,the balances and transactions of this component unit are reported within the proprietary funds of Housing Catalyst. 28 Housing Catalyst Notes to Financial Statements December 31, 2021 Discretely Presented Component Units Also included within the financial reporting entity of Housing Catalyst as blended component units are Village on Elizabeth,LLC,Village on Stanford,LLC,Redtail Ponds Permanent Supportive Housing,LLC,Redtail Ponds Permanent Supportive Housing Development,LLC,Village on Plum,LLC,Village on Plum Development,LLC,Village on Redwood,LLC,Village on Redwood Development,LLC,Village on Horsetooth, LLC,Village on Horsetooth Development,LLC,Village on Shields,LLC,Village on Shields Development,LLC, Mason Place,LLC,Mason Place Development,LLC,Oak 140,LLC,Housing Catalyst Swallow Road,LLC, Housing Catalyst Development Services,LLC and Housing Catalyst,LLC,which are single-member LLC’s. Separate financial statements for the component units are not issued. Village on Elizabeth,LLC is the general partner in Village on Elizabeth,LLLP,Village on Stanford,LLC is the general partner in Village on Stanford,LLLP,Redtail Ponds Permanent Supportive Housing,LLC is the general partner in Redtail Ponds Permanent Supportive Housing,LLLP,Village on Plum,LLC is the general partner in Village on Plum,LLLP,Village on Redwood,LLC is the general partner in Village on Redwood, LLLP,Village on Horsetooth,LLC is the general partner of Village on Horsetooth,LLLP,Village on Shields, LLC is the general partner of Village on Shields,LLLP,Mason Place,LLC is the general partner of Mason Place,LLLP and Oak 140,LLC is the general partner of Oak 140,LLLP which are discretely presented component units and are described below. The component unit columns in the combining financial statements include the financial data of Housing Catalyst’s nine discretely presented component units.These units are reported in separate columns to emphasize that they are legally separate from Housing Catalyst. Redtail Ponds Permanent Supportive Housing Development,LLC was formed to be the developer in Permanent Supportive Housing,LLC,Village on Plum Development,LLC was formed to be the developer in Village on Plum,LLLP,Village on Redwood Development,LLC was formed to be the developer in Village on Redwood,LLLP,Village on Horsetooth Development,LLC was formed to be the developer in Village on Horsetooth,LLLP,Village on Shields Development,LLC was formed to be the developer in Village on Shields, LLLP and Mason Place Development,LLC was formed to be the developer for Mason Place,LLLP.Housing Catalyst Swallow Road,LLC was formed to be the special limited partner for Swallow Road Apartments,LLLP, an 84 unit low income housing tax credit project.Housing Catalyst Development Services,LLC was formed to provide development services to various housing projects.Housing Catalyst,LLC was formed to be an entity that will be used,as needed,to participate as the partner in future development projects for Housing Catalyst when desired to facilitate project financing.Housing Catalyst,LLC is the administrative general partner in Provincetowne Green LLLP, an 85 unit low income housing tax credit project. During the year ended December 31,2021,the members of the board of commissioners of Housing Catalyst were also appointed to the board of directors of Villages,Ltd (Villages).The change in board structure resulted in Villages being subject to oversight and control by Housing Catalyst.Villages,formerly known as Fort Collins Housing Corporation,is a not-for-profit organization organized in 1980 to provide housing for the elderly and low-income families of Fort Collins,Colorado.Substantially all of Villages revenue is currently derived from rental operations and grants.In total,Villages owns and manages 185 residential units and a leasing and management office.As a legally separate entity,Villages,Ltd.has been reported as a blended component unit starting with the year ended December 31, 2021. 29 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Plum,LLLP (VOP)–the general partner of this partnership,Village on Plum,LLC,is wholly owned by Housing Catalyst.Village on Plum,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Redtail Ponds Permanent Supportive Housing,LLLP (Redtail Ponds PSH)–the general partner of this partnership,Redtail Ponds Permanent Supportive Housing,LLC,is wholly owned by Housing Catalyst.Redtail Ponds Permanent Supportive Housing,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Village on Redwood,LLLP (VOR)–the general partner of this partnership,Village on Redwood,LLC,is wholly owned by Housing Catalyst.Village on Redwood,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Village on Horsetooth,LLLP (VOH)–the general partner of this partnership,Village on Horsetooth,LLC,is wholly owned by Housing Catalyst.Village on Horsetooth,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Village on Shields,LLLP (VOSH)–the general partner of this partnership,Village on Shields,LLC,is wholly owned by Housing Catalyst.Village on Shields,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Mason Place,LLLP (Mason Place)–the general partner of this partnership,Mason Place,LLC,is wholly owned by Housing Catalyst.Mason Place,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Oak 140,LLLP (Oak 140)–the general partner of this partnership,Oak 140,LLC,is wholly owned by Housing Catalyst.Oak 140,LLC has an ownership percentage of 0.009%.As the general partner,Housing Catalyst has the day to day management responsibilities of the partnership. Village on Elizabeth,LLLP (VOE)–the general partner of this partnership,Village on Elizabeth,LLC,is wholly owned by Housing Catalyst.Village on Elizabeth,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. Village on Stanford,LLLP (VOS)–the general partner of this partnership,Village on Stanford,LLC,is wholly owned by Housing Catalyst.Village on Stanford,LLC has an ownership percentage of 0.01%.As the general partner, Housing Catalyst has the day to day management responsibilities of the partnership. The financial statements of the discretely presented component units are presented in Housing Catalyst’s basic financial statements.Complete financial statements of the individual component units can be obtained from the Chief Financial Officer, Housing Catalyst, 1715 W. Mountain Ave., Fort Collins, CO 80521. 30 Housing Catalyst Notes to Financial Statements December 31, 2021 Basis of Accounting Cash and Cash Equivalents Accounts and Notes Receivable Inventory Inventories are valued at cost using the first-in/first-out method. Capital Assets Management considers receivables to be fully collectible.If amounts become uncollectible,they are charged to operations in the period in which that determination is made.Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts;however,the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. Housing Catalyst accounts for its operations in one fund type,the enterprise fund.Enterprise funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Revenue is recognized when earned and expenses are recorded at the time liabilities are incurred.All assets, deferred outflows,liabilities and deferred inflows associated with the operations of Housing Catalyst are included on the statement of net position. All significant interfund transactions have been eliminated. Housing Catalyst's cash deposits can only be invested in HUD approved investments:direct obligations of the Federal Government backed by the full faith and credit of the United States,obligations of government agencies,securities of government sponsored agencies,demand and savings deposits,time deposits, repurchase agreements, and other securities approved by HUD. For the purpose of the statement of cash flows,Housing Catalyst considers cash deposits and highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.Certificates of deposit are also considered to be cash equivalents due to their highly liquid nature and insignificant risk of change in value due to changes in interest rates.Housing Catalyst uses certificates of deposit as part of the entities cash management. Land,buildings and improvements,and equipment are recorded at cost,including indirect development costs. Housing Catalyst uses a capitalization threshold of $5,000.Donated capital assets are valued at their acquisition value on the date donated.The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend lives are not capitalized. The accounts of Housing Catalyst are organized on the basis of programs,each of which is considered a separate accounting entity.The operations of each program are accounted for with a separate set of self- balancing accounts that comprise its assets and deferred outflows,liabilities and deferred inflows,net position, revenues, and expenses. Housing Catalyst classifies its programs as proprietary. 31 Housing Catalyst Notes to Financial Statements December 31, 2021 Buildings and Improvements 15 - 30 Years Furniture and Equipment 3 - 15 Years Investment in Tax Credit Partnerships and Future Developments Operating Revenues and Expenses Fraud Recovery Developer Fee Revenue Recognition Investments in future developments represents costs incurred by Housing Catalyst for future developments and are recorded at cost until a project is established. Housing Catalyst reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.Recoverability is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flow expected to be generated and any estimated proceeds from the eventual disposition.If the long-lived assets are considered to be impaired,the impairment to be recognized is measured at the amount by which the carrying amount of the asset exceeds the fair value as determined from an appraisal,discounted cash flows analysis,or other valuation technique. There were no impairment losses recognized during 2021. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Investments in tax credit partnerships are accounted for under the equity method.Investments are stated at cost,plus (minus)Housing Catalyst’s equity in net earnings (losses)since acquisition,less any distributions received. HUD requires Housing Catalyst to account for monies recovered from tenants who committed fraud or misrepresentation in the application process for rent calculations and now owe additional rent for prior periods or retroactive rent as fraud recovery. The monies recovered are shared by HUD and the local authority. Housing Catalyst earns development fees based on agreements with certain partnerships for the development of affordable housing.Developer fees are generally recognized under the percentage-of-completion method and in accordance with the corresponding development agreement. Housing Catalyst considers all revenues and expenses (including HUD intergovernmental revenues and expenses)as operating items with the exception of interest expense,interest revenue,and gain/loss on disposal of capital assets which are considered non-operating for financial reporting purposes. 32 Housing Catalyst Notes to Financial Statements December 31, 2021 Restricted and Unrestricted Resources Accumulated Unpaid Vacation Leave Unearned Revenues Components of Net Position Components of net position include the following: Budgetary Accounting Estimates Accumulated unpaid vacation leave is accrued in the period incurred.Employees are permitted to accumulate a limited amount of vacation benefits.Upon separation or termination from the Housing Catalyst,an employee will not be paid time in excess of 240 hours. •Net Investment in Capital Assets –Consists of capital assets,net of accumulated depreciation and reduced by outstanding balances of debt issued to finance the acquisition,improvement,or construction of those assets. Housing Catalyst’s annual budgets are the annual contracts,which are with,and approved by,HUD.No budget to actual statements are presented in this report,as housing authorities are not legally required to adopt a budget under the Local Government Budget Law of Colorado. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. As of December 31,2021,unearned revenue consisted of $15,186 of prepaid rent from tenants,$38,977 of unspent EHV service fee grant funds,$109,109 of unspent Larimer County Behavioral Services grant funds, $10,000 of unspent Kaiser Foundation financial health initiative grant funds and $39,637 of prepaid land lease funds.The Larimer County Behavior Services grant must be spent by September 30,2022 on specific costs related to Mason Place Permanent Supportive Housing. All unspent funds must be returned to the grantors. •Restricted Net Position –Consists of assets and deferred outflows less related liabilities and deferred inflows reported in the basic statement of net position that are subject to restraints on their use by HUD. •Unrestricted Net Position –Consists of assets and deferred outflows less related liabilities and deferred inflows reported in the basic statement of net position that are not subject to restraints on their use. Housing Catalyst applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position are available. 33 Housing Catalyst Notes to Financial Statements December 31, 2021 Comparative Totals Change in Reporting Entity Current Assets $ 5,014,907 Capital Assets 5,382,676 Other Assets 7,997,066 Total Assets $ 18,394,649 Current Liabilities $ 599,691 Long-Term Liabilities - Total Liabilities 599,691 Net Position 17,794,958 Total Liabilities and Net Position $ 18,394,649 The adjustment to beginning net position due to the change in reporting entity is as follows: Primary Government at 01/01/2021 Net Position, Beginning of Year, as Previously Reported 59,805,389$ Adjustment for change in reporting entity 17,794,958 Net Position, Beginning of Year, as Restated 77,600,347$ As stated above,during the year ended December 31,2021,the members of the board of commissioners of Housing Catalyst were also appointed to the board of directors of Villages,Ltd (Villages).The change in board structure resulted in Villages being subject to oversight and control by Housing Catalyst.As a legally separate entity,Villages,Ltd.has been reported as a blended component unit starting with the year ended December 31,2021,and all prior periods presented have been adjusted to include Villages as a blended component unit. Initial balances from Villages that were transferred as of December 31, 2020 are as follows: The financial statements and related footnotes include certain prior year summarized comparative information in total.Such information does not include sufficient detail to constitute a presentation in conformity with generally accepted accounting principles.Accordingly,such information should be read in conjunction with the Authority's financial statements for the year ended December 31,2020,from which the summarized information was derived. 34 Housing Catalyst Notes to Financial Statements December 31, 2021 Note 2 - Deposits and Investments Primary Government Deposits Custodial Credit Risk For the primary government, cash and cash equivalents consist of the following at December 31, 2021: Cash and cash equivalents - unrestricted 17,525,157$ Cash and cash equivalents - restricted 463,195 Total cash and cash equivalents 17,988,352 Less: cash on hand (950) Total deposits 17,987,402$ Investments • Obligations of the United States and certain U.S. government agency securities • Insured Money Market Deposit Accounts • Municipal Depository Fund • Super NOW Accounts Housing Catalyst’s investment policy allows for investments to be solely in securities approved by HUD. Authorized investment instruments are as follows: At December 31,2021,Housing Catalyst’s carrying amount of deposits was $17,987,402 and the bank balance was $18,209,249.Of the bank balances,$369,305 was covered by Federal Depository Insurance.Of the remaining balances for 2021,$17,839,944 was collateralized with securities held by a pledging financial institution’s agent in the government’s name. Custodial credit risk is the risk that,in the event of a bank failure,Housing Catalyst’s deposits may not be returned to it.As of December 31,2021,Housing Catalyst's deposits were not exposed to custodial credit risk, as all deposits were insured by the Federal Deposit Insurance Corporation (FDIC)and collateralized in accordance with PDPA. The Colorado Public Deposit Protection Act (PDPA)requires that all units of local government deposit cash in eligible public depositories.Eligibility is determined by state regulations.Amounts on deposit in excess of federal insurance levels must be collateralized by eligible collateral as determined by the PDPA.The institution is allowed to create a single collateral pool for all public funds held.The pool is to be maintained by another institution or held in trust for all the uninsured public deposits as a group.The market value of the collateral must be at or equal to 102%of the uninsured deposits.The general depository agreement required by annual contract with HUD has additional collateral requirements, which Housing Catalyst met in 2021. 35 Housing Catalyst Notes to Financial Statements December 31, 2021 • Certificates of Deposit • Repurchase Agreements • Sweep Accounts • Separate Trading of Registered Interest and Principal of Securities (STRIPS) • Mutual Funds that meet HUD criteria Discretely Presented Component Units Cash and cash equivalents - unrestricted 2,190,046$ Cash and cash equivalents - restricted 22,359,917 Total cash and cash equivalents 24,549,963 Less: cash on hand (386) Total deposits 24,549,577$ Note 3 - Restricted Cash Primary Government Discretely Presented Component Units Housing Catalyst’s deposit and investment policy specifies that all investments are to be adequately collateralized if deposits and investments exceed federal insurance limits.The policy does not formally address credit risk, interest rate risk, or foreign currency risk associated with investments. For the discretely presented component units,cash and cash equivalents consist of the following at December 31, 2021: At December 31,2021,the carrying amount of the discretely presented component units deposited with financial institutions was $24,549,577 and the bank balance was $24,544,814. The bank deposits are held with financial institutions and are entirely insured or collateralized. Restricted cash consists of cash and cash equivalents balances restricted for tenant security deposits,funding of operating deficits,repairs or improvements to the buildings which extend their useful lives,annual insurance payments, supportive services payments and bond proceeds available for construction expenditures. Restricted cash consists of cash and cash equivalents balances restricted for use in the Housing Choice Voucher program,held in escrow in order to comply with HUD requirements for the family self-sufficiency program, held for tenant security deposits and other restricted grants. 36 Housing Catalyst Notes to Financial Statements December 31, 2021 Note 4 - Lease Receivable (Primary Government) Note 5 - Notes Receivable (Primary Government) Notes receivable as of December 31, 2021 consist of the following: 3,367,702$ 1,941,549 2,734,149 5,077,001 5,827,446 4,868,776 21,742,413 Village on Shields,LLLP -Notes receivable with stated interest rates ranging from 2.00%to 2.60%per annum,yearly payments to the extent of available cash flow with the entire balance due April 2059 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Village on Plum,LLLP -Notes receivable with stated interest rates of 3.50%per annum, yearly payments to the extent of available cash flow with the entire balance due October 2044 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Village on Elizabeth,LLLP -Note receivables with stated interest rates of 3.50%- 5.31%per annum,yearly payments to the extent of available cash flow with the entire balance due December 2037 and collateralized by real property located at 2209 -2217 West Elizabeth, Fort Collins, Colorado. Village on Stanford,LLLP -Note receivable with a stated interest rate of 3.57%per annum,yearly payments to the extent of available cash flow with the entire balance due December 2038 and collateralized by a deed of trust,security agreement,financing statement and assignment of rents and revenues. Redtail Ponds Permanent Supportive Housing,LLLP -Notes receivable with stated interest rates ranging from 2.50%to 4.00%per annum,yearly payments to the extent of available cash flow with the entire balance due January 2045 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Village on Redwood,LLLP -Notes receivable with a stated interest rate of 4.00%per annum,yearly payments to the extent of available cash flow with the entire balance due April 2056 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Village on Horsetooth,LLLP -Note receivable with a stated interest rate of 2.68%per annum,yearly payments to the extent of available cash flow with the entire balance due August 2057 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Housing Catalyst is leasing a parking lot with monthly payments of $1,500 with a maturity date of March 2025. During the year ended December 31,2021,Housing Catalyst recognized revenue of $30,563 which includes income from deferred inflows of $27,344 and interest income of $3,219.Income over the next four years is expected to be $18,598 in 2022, $17,797 in 2023, $16,954 in 2024 and $4,102 in 2024. 37 Housing Catalyst Notes to Financial Statements December 31, 2021 3,490,425 23,584,073 717,164 535,000 Other notes receivable 20,710 Total notes receivable 73,906,408 Less current portion (127,736) Notes receivable - net of current portion 73,778,672$ Legacy-Fort Collins Partners,LP -Note receivable with a stated interest rate of 2.50% per annum,yearly payments to the extent of available cash flow,a maturity date of December 2032 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Oak 140 -Notes receivable with stated interest rates ranging from 0.875%to 2.25%per annum,yearly payments to be made in accordance with the loan agreements and to the extent of available cash flow with maturity dates ranging from July 2039 to January 2054 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Fort Collins DDA -Notes receivable with a stated interest rate of 4.50%per annum, yearly principal and interest payments of $121,869,with a maturity dates of July 2026 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Mason Place,LLLP -Notes receivable with stated interest rates ranging from 1.00%to 5.60%per annum,yearly payments to the extent of available cash flow with maturity dates ranging from December 2050 to December 2060 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. 38 Housing Catalyst Notes to Financial Statements December 31, 2021 Note 6 - Capital Assets Balance 01/01/21 Balance (as restated)Additions Deletions 12/31/21 Non-Depreciable Land 4,643,560$ 1,325,724$ (1,543,621)$ 4,425,663$ Construction in progress 651,202 263,531 (879,432) 35,301 5,294,762 1,589,255 (2,423,053) 4,460,964 Depreciable/Amortizable Buildings and improvements 17,337,461 969,084 (2,871,318) 15,435,227 Furniture and equipment 1,044,907 92,298 - 1,137,205 Leased equipment 174,647 - - 174,647 Total depreciable capital assets 18,557,015 1,061,382 (2,871,318) 16,747,079 Less: Accumulated Depreciation Buildings and improvements (13,583,753) (519,979) 2,277,311 (11,826,421) Furniture and equipment (1,035,850) (21,091) - (1,056,941) Less: Accumulated Amortization Leased equipment (65,302) (35,254) - (100,556) Total accumulated depreciation and amortization (14,684,905) (576,324) 2,277,311 (12,983,918) Net Depreciable Capital Assets 3,872,110 485,058 (594,007) 3,763,161 Total 9,166,872$ 2,074,313$ (3,017,060)$ 8,224,125$ Changes in capital assets for the primary government during the year ended December 31,2021 were as follows: 39 Housing Catalyst Notes to Financial Statements December 31, 2021 Balance Balance 01/01/21 Additions Deletions 12/31/21 Non-Depreciable Land 11,114,286$ 145,850$ -$ 11,260,136$ Construction in progress 14,642,853 7,396,217 (14,642,853) 7,396,217 25,757,139 7,542,067 (14,642,853) 18,656,353 Depreciable/Amortizable Buildings and improvements 129,639,673 13,059,029 (15,070) 142,683,632 Land improvements 8,555,586 667,193 - 9,222,779 Furniture and equipment 4,534,631 765,714 - 5,300,345 Total depreciable capital assets 142,729,890 14,491,936 (15,070) 157,206,756 Total accumulated depreciation (25,434,466) (6,549,005) 2,833 (31,980,638) Net Depreciable Capital Assets 117,295,424 7,942,931 (12,237) 125,226,118 Total 143,052,563$ 15,484,998$ (14,655,090)$ 143,882,471$ Note 7 - Long-Term Debt During the year ended December 31, 2021, the following changes occurred in long-term debt: Primary Government Balance January 1 Balance Due Within (as restated)Increases Decreases December 31 One Year Notes Payable 913,875$ 19,815,000$ (113,952)$ 20,614,923$ 186,577$ Discretely Presented Component Units Mason Place Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 12,206,181$ 1,878,048$ (1,265,874)$ 12,818,355$ 6,147,416$ Changes in capital assets for the discretely presented component units during the year ended December 31, 2021 were as follows: 40 Housing Catalyst Notes to Financial Statements December 31, 2021 Oak 140 Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable -$ 23,584,073$ -$ 23,584,073$ -$ Redtail Ponds PSH Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 4,637,541$ 79,169$ (49,927)$ 4,666,783$ 51,833$ Village on Elizabeth Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 4,186,044$ 130,451$ (19,863)$ 4,296,632$ 21,106$ Village on Horsetooth Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 13,702,156$ 138,753$ (150,241)$ 13,690,668$ 158,207$ Village on Plum Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 10,320,476$ 157,349$ (129,406)$ 10,348,419$ 136,897$ Village on Redwood Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 9,691,173$ 238,756$ (45,832)$ 9,884,097$ 47,564$ Village on Shields Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 39,332,031$ 522,174$ (291,310)$ 39,562,895$ 228,441$ 41 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Stanford Balance Balance Due Within January 1 Increases Decreases December 31 One Year Notes Payable 5,133,289$ 3,318$ (30,926)$ 5,105,681$ 44,862$ Notes payable as of December 31, 2021, consisted of the following: Primary Government 354,567$ 535,000 445,356 19,280,000 Total notes payable - Primary Government 20,614,923$ Revenue Bonds: Mason Place -Notes payable due to ANB Bank with a stated interest rate of 3.95%per annum,due in monthly principal and interest installments of $16,092 with a maturity date of January 2023 and secured by a deed of trust and all deposit accounts held by ANB Bank. Oak 140 -Revenue bonds payable due to UMB with stated interest rates ranging from 0.875%to 2.25%per annum,yearly payments to be made in accordance with the loan agreements and to the extent of available cash flow with maturity dates ranging from July 2039 to January 2054 and collateralized by a deed of trust and an agreement of restrictive covenants on the property (see additional disclosures below). Oak 140 Commercial -DDA -Notes payable due to First Bank with a stated interest rate of 4.00%per annum,due in annual principal and interest installments of $120,679 with a maturity date of August 2026 and secured by a deed of trust. During the year ended December 31,2021,Housing Catalyst issued $14,270,000 in Series 2021A tax- exempt revenue bonds and $5,010,000 in Series 2021B federally taxable revenue bonds.The bonds are secured by deeds of trust on the Oak 140,LLLP property,a discretely presented component unit.The bonds were issued to finance the construction of a 79-unit affordable housing project.Revenues from the property are intended to be the primary source of repayment.Revenues of Housing Catalyst would be used only if those revenues are not sufficient to cover the required payments.No Housing Catalyst revenues have been used for any required payments to date. Mountain Office Remodel -Note payable due to First Bank with a stated interest rate of 3.00%per annum,due in monthly principal and interest installments of $5,534 with a maturity date of October 2027 and secured by a deed of trust and all deposit accounts held by First Bank Holding Company. 42 Housing Catalyst Notes to Financial Statements December 31, 2021 Future debt service requirements are as follows for the Oak 140 revenue bonds: Principal Interest Total 2022 -$ 299,069$ 299,069$ 2023 - 299,069 299,069 2024 11,175,000 235,841 11,410,841 2025 165,000 171,188 336,188 2026 165,000 169,642 334,642 2027-2031 850,000 815,086 1,665,086 2032-2036 935,000 727,652 1,662,652 2037-2041 5,990,000 323,699 6,313,699 Total 19,280,000$ 3,041,246$ 22,321,246$ Principal Interest Total 2022 186,577$ 50,326$ 236,903$ 2023 573,761 27,409 601,170 2024 166,994 20,093 187,087 2025 173,240 13,846 187,086 2026 179,667 7,419 187,086 2027-2031 54,684 465 55,149 2032-2036 - - - 2037-2041 - - - Total 1,334,923$ 119,558$ 1,454,481$ The estimated debt requirements to maturity for the remaining notes payable for the year ending December 31, 2021 are as follows: The tax-exempt term bonds mature on July 1,2024 ($6,165,000),July 1,2025 ($165,000),July 1,2026 ($165,000),July 1,2027 ($165,000),July 1,2028 ($170,000),July 1,2029 ($170,000),July 1,2030 ($170,000),July 1,2031 ($175,000)and July 1,2039 ($6,925,000)and carry interest rates of 1.25%, 0.875%,1.00%,1.125%,1.375%,1.50%,1.75%,1.875%and 2.25%,respectively.The taxable term bonds matures on July 1, 2024 and carries an interest rate of 1.00%. 43 Housing Catalyst Notes to Financial Statements December 31, 2021 Discretely Presented Component Units Mason Place 8,318,127$ Unamortized debt issuance costs, based on an effective interest rate of 4.89%(190,197) 8,127,930 3,490,425 1,200,000 Total notes payable - Mason Place 12,818,355$ Redtail Ponds PSH 2,020,270$ (87,636) 1,932,634 1,703,792 1,030,357 Total notes payable - Redtail Ponds PSH 4,666,783$ Unamortized debt issuance costs,based on an effective interest rate of approximately 3.92% Mortgage note payable to US Bank with a stated interest rate of 3.75%per annum and an effective interest rate of 3.92%,due in monthly principal and interest installments of $10,559 with a maturity date of April 2046 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage note payable with a stated and effective interest rate of 0.00%per annum, due in annual with the principal balance due on the maturity date of September 2059 and secured by real property. Mortgage note payable due to Villages,LTD with a stated and effective interest rate of 4.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of January 2045 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage notes payable due to Housing Catalyst with stated and effective interest rates ranging from 1.00%to 5.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with maturity dates ranging from December 2050 to December 2060 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage notes payable due to Housing Catalyst with stated and effective interest rates ranging from 2.50%to 4.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of January 2045 and secured by a deed of trust and an Agreement of Restrictive Covenants Affecting Real Property. Mortgage note payable to ANB with a stated interest rate of 4.35%per annum and an effective interest rate of 4.89%per annum secured by real property with a maturity date of September 2037.The note converted to permanent financing in January 2022 with a principal balance of $2,200,000 and due in monthly principal and interest installments of $10,315. 44 Housing Catalyst Notes to Financial Statements December 31, 2021 Oak 140 19,280,000$ 4,304,073 23,584,073$ Village on Elizabeth 770,139$ 164,495 (5,704) 928,930 3,367,702 Total notes payable - Village on Elizabeth 4,296,632$ Unamortized debt issuance costs,based on an effective interest rate of approximately 6.6% Mortgage note payable to Housing Catalyst with stated interest rates ranging from 0.875%to 2.25%per annum,yearly payments to be made in accordance with the loan agreements and to the extent of available cash flow with maturity dates ranging from July 2039 to January 2054 and collateralized by a deed of trust and an agreement of restrictive covenants on the property. Mortgage note payable due to Housing Catalyst with a stated and effective interest rate of 1.50%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of January 2054 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage note payable with a stated interest rate of 7.20%per annum and an effective interest rate of 7.33%,due in monthly principal and interest installments of $5,876 with a maturity date of June 2026 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage note payable with a stated interest rate of 3.00%per annum and an effective interest rate of 3.13%,due in monthly principal and interest installments of $866 with a maturity date of June 2026 and secured by a mortgage on all property and equipment and an assignment of rent. Mortgage notes payable due to Housing Catalyst with stated and effective interest rates ranging from 3.50%to 5.31%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of December 2037 and secured by a mortgage on substantially all assets and an assignment of rent. 45 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Horsetooth 7,007,875$ (185,983) 6,821,892 2,000,000 4,868,776 Total notes payable - Village on Horsetooth 13,690,668$ Village on Plum 5,465,362$ (193,944) 5,271,418 5,077,001 Total notes payable - Village on Plum 10,348,419$ Mortgage note payable due to the State of Colorado with a stated and effective interest rate of 0.00%per annum,due in annual installments of principal and interest from available cash flows of $52,632 beginning in June 2020 with a maturity date of August 2057 and secured by real property. Mortgage note payable due to Housing Catalyst with a stated and effective interest rate of 2.68%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of August 2057 and secured by a mortgage on substantially all assets and an assignment of rent. Unamortized debt issuance costs,based on an effective interest rate of approximately 4.17% Unamortized debt issuance costs,based on an effective interest rate of approximately 3.45% Mortgage note payable with a stated and effective interest rate of 3.24%per annum, due in monthly installments of principal and interest of $31,933 starting January 2020 with a maturity date of December 2037 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage note payable with a stated interest rate of 3.85%per annum and an effective interest rate of 4.17%,due in monthly principal and interest installments of $28,792 with a maturity date of August 2034 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage notes payable due to Villages,LTD with stated and effective interest rates of 3.50%per annum,due in annual installments from cash flow or proceeds of capital transactions with maturity dates of October 2044 and secured by a mortgage on substantially all assets and an assignment of rent. 46 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Redwood 2,368,459$ (197,569) 2,170,890 1,906,269 4,077,159 5,827,446 (20,508) 5,806,938 Total notes payable - Village on Redwood 9,884,097$ Village on Shields 17,749,964$ (508,616) 17,241,348 Mortgage note payable due to the US Bank National Association with a stated interest rate of 4.79%per annum and an effective interest rate of 3.19%,due in monthly installments of principal and interest of $89,474 with a maturity date of October 2036 and secured by real property,operating reserve account and assignment of rents of the Partnership. Mortgage note payable due to the Bank of Colorado with a stated interest rate of 4.25% per annum and an effective interest rate of 4.9%,due in monthly installments of principal and interest of $12,414 with a maturity date of February 2036 and secured by real property, operating reserve account and assignment of rents of the Partnership. Mortgage note payable due to the State of Colorado with a stated and effective interest rate of 0.00%per annum,due in annual installments of principal and interest from available cash flows of $48,879 beginning in June 2018 with a maturity date of March 2056 and secured by real property. Mortgage notes payable due to Housing Catalyst with stated and effective interest rates of 4.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of April 2056 and secured by a mortgage on substantially all assets and an assignment of rent. Unamortized debt issuance costs,based on an effective interest rate of approximately 4.97% Unamortized debt issuance costs,based on an effective interest rate of approximately 4.87% Unamortized debt issuance costs,based on an effective interest rate of approximately 4.00% 47 Housing Catalyst Notes to Financial Statements December 31, 2021 579,134 21,198,322 544,091 Total notes payable - Village on Shields 39,562,895$ Village on Stanford 1,748,017$ (22,950) 1,725,067 1,223,167 718,382 219,534 230,466 Mortgage note payable due to Villages,LTD with a stated and effective interest rate of 3.57%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of December 2038 and secured by a mortgage on substantially all assets and an assignment of rent. CDBG mortgage note payable with a stated and effective interest rate of 0.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of December 2038 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage notes payable due to Housing Catalyst with stated and effective interest rates of 3.57%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of December 2038 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage note payable with a stated interest rate of 7.85%per annum and an effective interest rate of 8.14%,due in monthly principal and interest installments of $12,889 with a maturity date of December 2028 and secured by a mortgage on substantially all assets and an assignment of rent. Mortgage notes payable due to Housing Catalyst with stated and effective interest rates ranging from 2.00%of 2.60%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of April 2059 and secured by a mortgage on substantially all assets and an assignment of rent. Unamortized debt issuance costs,based on an effective interest rate of approximately 8.14% Mortgage note payable due to the State of Colorado with a stated and effective interest rate of 1.00%per annum,due in annual installments of principal and interest from available cash flows of $16,701 beginning in May 2019 with a maturity date of May 2059 and secured by real property. Mortgage notes payable due to Villages,Ltd with a stated and effective interest rate of 2.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with maturity dates of April 2059 and secured by a mortgage on substantially all assets and an assignment of rent. CDBG mortgage note payable with a stated and effective interest rate of 0.00%per annum,due in annual installments from cash flow or proceeds of capital transactions with a maturity date of December 2038 and secured by a mortgage on substantially all assets and an assignment of rent. 48 Housing Catalyst Notes to Financial Statements December 31, 2021 989,065 Total notes payable - Village on Stanford 5,105,681$ Mason Place Principal Interest Total 2022 6,147,416$ 178,691$ 6,326,107$ 2023 28,631 189,664 218,295 2024 29,653 188,642 218,295 2025 31,254 187,041 218,295 2026 32,661 185,634 218,295 2027-2031 186,437 905,039 1,091,476 2032-2036 232,143 859,333 1,091,476 2037-2041 1,629,932 525,902 2,155,834 2042-2046 - 472,520 472,520 2047-2051 2,032,165 452,198 2,484,363 2052-2056 - 370,910 370,910 2057-2061 2,658,260 296,728 2,954,988 Unamortized Debt Issuance Costs (190,197) - (190,197) Total 12,818,355$ 4,812,302$ 17,630,657$ Redtail Ponds PSH Principal Interest Total 2022 51,833$ 150,443$ 202,276$ 2023 53,811 148,466 202,277 2024 55,864 146,413 202,277 2025 57,995 144,282 202,277 2026 60,208 142,069 202,277 2027-2031 337,296 674,086 1,011,382 2032-2036 406,738 604,644 1,011,382 2037-2041 490,476 520,906 1,011,382 2042-2046 3,240,198 276,022 3,516,220 Unamortized Debt Issuance Costs (87,636) - (87,636) Total 4,666,783$ 2,807,331$ 7,474,114$ Tax Credit Assistance Program (TCAP)loan payable from the Colorado Housing and Finance Authority with a stated and effective interest rate of 0.00%per annum,with the principal balance due on the maturity date of February 2029 and secured by a second mortgage on substantially all assets and an assignment of rent. The estimated debt requirements to maturity for the year ending December 31, 2021 are as follows: 49 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Elizabeth Principal Interest Total 2022 21,106$ 194,322$ 215,428$ 2023 22,433 192,995 215,428 2024 23,851 191,577 215,428 2025 25,368 190,060 215,428 2026 841,876 161,689 1,003,565 2027-2031 - 672,600 672,600 2032-2036 - 672,600 672,600 2037-2041 3,367,702 123,310 3,491,012 Unamortized Debt Issuance Costs (5,704) - (5,704) Total 4,296,632$ 2,399,153$ 6,695,785$ Village on Horsetooth Principal Interest Total 2022 158,207$ 355,445$ 513,652$ 2023 216,320 349,964 566,284 2024 221,097 345,187 566,284 2025 227,243 339,041 566,284 2026 232,985 333,299 566,284 2027-2031 1,257,292 1,574,129 2,831,421 2032-2036 1,426,570 1,404,851 2,831,421 2037-2041 4,268,170 780,029 5,048,199 2042-2046 263,160 652,295 915,455 2047-2051 263,160 652,295 915,455 2052-2056 263,160 652,295 915,455 2057-2061 5,079,287 86,973 5,166,260 Unamortized Debt Issuance Costs (185,983) - (185,983) Total 13,690,668$ 7,525,803$ 21,216,471$ 50 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Plum Principal Interest Total 2022 136,897$ 350,651$ 487,548$ 2023 142,867 344,681 487,548 2024 148,466 339,082 487,548 2025 154,284 333,264 487,548 2026 160,330 327,218 487,548 2027-2031 900,960 1,536,778 2,437,738 2032-2036 3,821,558 1,075,365 4,896,923 2037-2041 - 710,190 710,190 2042-2046 5,077,001 402,441 5,479,442 Unamortized Debt Issuance Costs (193,944) - (193,944) Total 10,348,419$ 5,419,670$ 15,768,089$ Village on Redwood Principal Interest Total 2022 47,564$ 334,505$ 382,069$ 2023 98,824 332,124 430,948 2024 100,743 330,205 430,948 2025 103,299 327,649 430,948 2026 105,691 325,257 430,948 2027-2031 567,893 1,586,845 2,154,738 2032-2036 2,028,751 1,458,285 3,487,036 2037-2041 244,395 1,165,490 1,409,885 2042-2046 244,395 1,165,490 1,409,885 2047-2051 244,395 1,165,490 1,409,885 2052-2056 6,295,716 1,010,091 7,305,807 Unamortized Debt Issuance Costs (197,569) - (197,569) Total 9,884,097$ 9,201,431$ 19,085,528$ 51 Housing Catalyst Notes to Financial Statements December 31, 2021 Village on Shields Principal Interest Total 2022 228,441$ 1,344,515$ 1,572,956$ 2023 250,478 1,333,388 1,583,866 2024 262,320 1,321,546 1,583,866 2025 274,738 1,309,128 1,583,866 2026 287,759 1,296,107 1,583,866 2027-2031 1,657,398 6,261,932 7,919,330 2032-2036 14,951,031 5,723,924 20,674,955 2037-2041 63,627 2,487,241 2,550,868 2042-2046 66,873 2,483,995 2,550,868 2047-2051 70,284 2,480,584 2,550,868 2052-2056 73,869 2,476,999 2,550,868 2057-2061 21,884,693 1,155,421 23,040,114 Unamortized Debt Issuance Costs (508,616) - (508,616) Total 39,562,895$ 29,674,780$ 69,237,675$ Village on Stanford Principal Interest Total 2022 44,862$ 207,543$ 252,405$ 2023 17,479 205,446 222,925 2024 18,526 204,399 222,925 2025 20,451 202,474 222,925 2026 22,140 200,785 222,925 2027-2031 1,654,040 601,095 2,255,135 2032-2036 - 341,305 341,305 2037-2041 3,351,133 136,522 3,487,655 Unamortized Debt Issuance Costs (22,950) - (22,950) Total 5,105,681$ 2,099,569$ 7,205,250$ Note 8 - Leases Payable Balance Balance Due Within January 1 Increases Decreases December 31 One Year Leases 118,525$ -$ (33,375)$ 85,150$ 34,564$ Housing Catalyst is leasing seven vehicles for the maintenance departments and six copiers for various locations.The lease terms are between four and five years and have total monthly payments of $3,835.During the year ended December 31, 2021, the following changes occurred in leases payable: 52 Housing Catalyst Notes to Financial Statements December 31, 2021 The lease payment requirements to maturity as of December 31, 2021 are as follows: Principal Interest Total 2022 34,564$ 8,882$ 43,446$ 2023 29,516 5,011 34,527 2024 21,070 1,038 22,108 Total 85,150$ 14,931$ 100,081$ Note 9 - Restricted Net Position Note 10 - Annual Contributions Contract Note 11 - Related Party Transactions Management Fees and Reimbursement of Expenses Housing Catalyst is a general partner in Oak 140,LLLP,a 79 unit low income housing tax credit project,and provides management services to the project.After the completion of construction,under the management agreement,Housing Catalyst is to be paid management fees totaling 7%of gross rental income and accounting fees totaling 6%of net rental income on the project.During the year ended December 31,2021, Housing Catalyst did not receive compensation for management services. Housing Catalyst is a general partner in Mason Place,LLLP,a 60 unit low income housing tax credit project, and provides management services to the project.After the completion of construction,under the management agreement,Housing Catalyst is to be paid management fees totaling 6%of net rental income and accounting fees totaling 4%of net rental income on the project.During the year ended December 31, 2021,Housing Catalyst earned $66,997 for these fees.As of December 31,2021,Housing Catalyst was owed $597 for these fees and that balance is included in accounts receivable.Additionally,under the partnership agreement,Housing Catalyst is to be paid an annual Partnership Management Fee of $15,000.The fee increases by 3%on an annual basis,is payable from available cash and accrues to the extent that the fee was not paid during the year.During the year ended December 31,2021,Housing Catalyst earned $15,000 for this fee and that balance is included in accounts receivable. During the year ended December 31,2021,Housing Catalyst purchased land in Fort Collins,Colorado,for $1,325,724 and subsequently exchanged the land for a long-term prepaid lease in a commercial office building. The office building is anticipated to be completed in 2023 and the lease term is for 99 years. As of December 31,2021,restricted net position consisted of $139,150 in Section 8 HAP received but not yet paid to eligible individuals. Housing Catalyst has an annual contributions contract for Section 8 HAP and adjustments vary based on requirements. The maximum contract was $15,348,416 for the year ended December 31, 2021. 53 Housing Catalyst Notes to Financial Statements December 31, 2021 Housing Catalyst is also a general partner in Village on Shields,LLLP,a 285 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 8%of rental income and accounting fees totaling 3%of rental income on the project.During the year ended December 31,2021,Housing Catalyst earned $368,904 for these fees.As of December 31,2021,Housing Catalyst was owed $3,461 for these fees and that balance is included in accounts receivable. Housing Catalyst is also a general partner in Redtail Ponds PSH,LLLP,a 60 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 8%of net rental income and accounting fees totaling 3%of net rental income on the project.During the year ended December 31,2021,Housing Catalyst earned $91,139 for these fees.As of December 31,2021,Housing Catalyst was owed $1,160 for these fees and that balance is included in accounts receivable. Housing Catalyst is also a general partner in Village on Redwood,LLLP,a 72 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 8%of net rental income and accounting fees totaling 9%of net rental income on the project.During the year ended December 31,2021,Housing Catalyst earned $134,988 for these fees.As of December 31,2021,Housing Catalyst was owed $790 for these fees and that balance is included in accounts receivable.Additionally,under the partnership agreement,Housing Catalyst is to be paid an annual Partnership Management Fee of $15,000.The fee increases by 3%on an annual basis, is payable from available cash and accrues to the extent that the fee was not paid during the year.During the year ended December 31,2021,Housing Catalyst earned $16,883 for this fee.As of December 31,2021,the total accrued balance for this fee is $73,388 and it is included in accounts receivable. Housing Catalyst is also a general partner in Village on Horsetooth,LLLP,a 92 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 8%of net rental income and accounting fees totaling 9%of net rental income on the project.During the year ended December 31,2021,Housing Catalyst earned $201,667 for these fees.As of December 31,2021,Housing Catalyst was owed $1,259 for these fees and that balance is included in accounts receivable. Housing Catalyst is also a general partner in Village on Plum,LLLP,a 95 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 8%of net rental income and accounting fees totaling 3%of net rental income on the project.During the year ended December 31,2021,Housing Catalyst earned $125,128 for these fees.As of December 31,2021,Housing Catalyst was owed $1,206 for these fees and that balance is included in accounts receivable. Housing Catalyst is also a general partner in Village on Elizabeth,LLLP,a 48 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 7.5%of gross collections on the project.During the year ended December 31,2021,Housing Catalyst earned $40,016 in property management fees.As of December 31, 2021, Housing Catalyst was owed $512 for that fee and that balance is included in accounts receivable. 54 Housing Catalyst Notes to Financial Statements December 31, 2021 Developer Fees Notes Receivable As of December 31,2021,Housing Catalyst was owed $23,584,073 on two notes receivable from Oak 140 with a stated interest rates ranging from 0.875%per annum to 2.25%per annum (see Note 5).Interest income from Oak 140 for the year ended December 31, 2021, was $153,247. As of December 31,2021,Housing Catalyst was owed $3,490,425 on four notes receivable from Mason Place with a stated interest rates ranging from 1.00%per annum to 5.00%per annum (see Note 5).Interest income from Mason Place for the year ended December 31, 2021, was $88,010. As of December 31,2021,Housing Catalyst was owed $1,225,808,$501,045,$298,231,$274,081, $4,358,642 and $781,679 in developer fees from Mason Place,LLLP,Village on Horsetooth,LLLP,Village on Plum,LLLP,Village on Redwood,LLLP,Village on Shields,LLLP and Swallow Road Apartments,LLLP (Swallow Road),respectively,related to the construction and development of the projects.Of these amounts, the Authority expects to receive $499,193 from Mason Place,$34,235 from VOH,$13,588 from VOP,$14,028 from VOR,$459,012 from VOSH and $781,679 from Swallow Road during 2022.The remaining balances of $726,615,$466,810,$284,643,$260,053 and $3,899,630,respectively,will be paid to Housing Catalyst from future available cash flows of the projects.In addition,Housing Catalyst was owed accrued interest of $19,721, $25,511 and $8,291 from VOH, VOP and VOR, respectively, as of December 31, 2021. Housing Catalyst is also a general partner in Village on Stanford,LLLP,an 82 unit low income housing tax credit project,and provides management services to the project.Under the management agreement,Housing Catalyst is to be paid management fees totaling 8%of gross rents of the project.During the year ended December 31,2021,Housing Catalyst received $62,000 in property management fees.As of December 31, 2021, Housing Catalyst was owed $796 for these fees and that balance is included in accounts receivable. Housing Catalyst is reimbursed for various office expenses,caretaker payroll and benefits,and other maintenance costs incidental to the operations of Mason Place.Redtail Ponds,VOE,VOH,VOP,VOR VOSH and VOS. During the year ended December 31, 2021, Housing Catalyst received approximately $215,715 from Mason Place,$498,300 from Redtail,$172,300 from VOE,$210,700 from VOH,$287,500 from VOP, $176,500 from VOR,$761,500 from VOSH and $236,300 from VOS for these expenses.As of December 31, 2021,Housing Catalyst was owed $4,006 from Mason Place,$7,307 from Redtail,$2,783 from VOE,$4,112 from VOH,$3,799 from VOP,$4,674 from VOR,$17,357 from VOSH and $6,983 from VOS for these fees and expenses and those balances are included in accounts receivable. As of December 31,2021,Housing Catalyst and Villages were owed $2,734,149 on three notes receivable from Redtail Ponds PSH with stated interest rates ranging from 2.50%per annum to 4.00%per annum (see Note 5). Interest income from Redtail Ponds for the year ended December 31, 2021, was $75,568. As of December 31,2021,Housing Catalyst was owed $3,367,702 on various notes receivable from VOE with interest rates ranging from 3.50%per annum to 5.31%per annum (see Note 5).Interest income from VOE for the year ended December 31, 2021, was $129,160. 55 Housing Catalyst Notes to Financial Statements December 31, 2021 Investment in Tax Credit Partnerships Note 12 - Management Services As of December 31,2021,Villages was owed $5,077,001 on two notes receivable from VOP with stated interest rates of 3.50%per annum (see Note 5).Interest income from VOP for the year ended December 31, 2021, was $142,038. As mentioned in Note 10,Housing Catalyst provides management services for Mason Place,LLLP,Redtail Ponds PSH,LLLP,Village on Elizabeth,LLLP,Village on Horsetooth,LLLP,Village on Plum,LLLP,Village on Redwood,LLLP,Village on Shields,LLLP and Village on Stanford,LLLP.In addition,Housing Catalyst provides management services for The Villages,Ltd.(Villages),the Wellington Housing Authority (WHA)and Wellington Community Housing (SCH).The Villages,WHA and WCH pay for all direct charges and then reimburse Housing Catalyst through a management fee agreement for the salaries,employee benefits,and other overhead items.Housing Catalyst will also provide management services for Oak 140,LLLP once construction is complete and the property begins operations. As of December 31,2021,Housing Catalyst was owed $5,827,446 on three notes receivable from VOR with stated interest rates of 4.00%per annum (see Note 5).Interest income from VOR for the year ended December 31, 2021, was $224,133. As of December 31,2021,Housing Catalyst was owed $4,868,776 on three notes receivable from VOH with stated interest rates of 2.68%per annum (see Note 5).Interest income from VOH for the year ended December 31, 2021, was $127,077. As of December 31,2021,Housing Catalyst and Villages was owed $21,742,413 on six notes receivable from VOSH with stated interest rates ranging from 2.00%to 2.60%per annum (see Note 5).Interest income from VOSH for the year ended December 31, 2021, was $482,794. As of December 31,2021,Housing Catalyst and Villages were owed $1,941,549 on three notes receivable from VOS with stated interest rates of 3.57%per annum (see Note 5).In addition,Housing Catalyst was owed accrued interest of $69,313 from VOS.Interest income from VOS for the year ended December 31,2021,was $69,313. Housing Catalyst is the managing general partner in Mason Place,Oak 140,Redtail Ponds,VOE,VOH,VOP, VOR,VOSH and VOS with ownership interests generally 0.01%or less.As the general partner,Housing Catalyst has the day to day management responsibilities of each partnership.Housing Catalyst's equity interest in the partnerships above was $147,735 as of December 31, 2021. 56 Housing Catalyst Notes to Financial Statements December 31, 2021 Note 13 - Risk Management Note 14 - Pension Plan Note 15 - Line of Credit Note 16 - Conduit Debt Housing Catalyst and Villages have unsecured lines of credit with a total available balance of $2,000,000 and $1,000,000,respectively,with FirstBank of Northern Colorado.The lines expire on September 23,2022 and July 19,2022,respectively,and interest on the line of credit is variable based on the Wall Street Journal Prime Rate plus 0.75%with a minimum rate of 4.00%per annum for both lines.The funds from the lines are designated for the temporary financing of Housing Development projects.As of December 31,2021,there was no outstanding balance due on the lines of credit. In September of 2011,Housing Catalyst arranged for tax exempt financing in the amount of $2,737,000 for Neighbor to Neighbor,a local housing provider.The debt has a final maturity date of September 9,2026 and is secured by real estate.Housing Catalyst in no way guarantees the loan or has any liability for the loan. Accordingly,the loan is not reported as liabilities in Housing Catalyst's financial statements.Neighbor to Neighbor pays the principal and interest directly to Home State Bank,paid a fee for the refinancing of the loan, and pays Housing Catalyst a yearly fee for arranging the loan.During the year ended December 31,2021, Neighbor to Neighbor paid the debt in full. Housing Catalyst is exposed to various risks of loss related to torts;theft of,damage to and destruction of assets;errors and omissions;injuries to employees and natural disasters.Housing Catalyst carries commercial insurance for the risks of loss,including worker's compensation and employee accident insurance. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. Limits of insurance coverage have been adjusted annually. Beginning on January 1,2019,Housing Catalyst provides eligible employees with a 401a deferred compensation retirement plan,a type of defined contribution plan.The plan and the contributions rate are authorized by Housing Catalyst's Board of Commissioners.In a defined contribution plan,benefits depend solely on amounts contributed to the plan plus investment earnings.Under the plan,eligible employees are required to contribute 4.5%of earnings for 2019 and of 6.2%for 2020 and beyond and the employer contributes 10%of each employee's earnings,including overtime and bonuses.Contributions are made to and maintained by the plan administrator,ICMA-RC,which maintains an individual account for each participant. Employees are vested in their account by years of service,33%(year 1),66%(year 2),99%(year 3)and 100%(year 4)and are eligible for plan benefits at retirement,which is defined as reaching age 62 and no longer being employed with Housing Catalyst.For the years ended December 31,2021 and 2020,the total employer cost of the plan totaled $549,551 and $464,529,respectively.Prior to 2019,Housing Catalyst provided eligible employees with a 457 deferred compensation retirement plan.For the year ended December 31, 2019, the employer cost of the plan totaled $334,085. 57 Housing Catalyst Notes to Financial Statements December 31, 2021 Note 17 - CDBG and HOME Grants Note 18 - Commitments and Contingencies Note 19 - Subsequent Events * * * * * * * * * * Housing Catalyst received CDBG and HOME grant funds from the City of Fort Collins (City)for the payment of development costs for the Mason Place construction and Village on Myrtle (Myrtle)rehabilitation projects.The Mason Place grant funds were loaned to the partnership with a maturity date of 2050 and the Myrtle grant was funded directly to Villages.The grants are restricted for a period of time.Housing Catalyst is to repay the City upon the sale of property that was acquired,constructed or improved with the grant funds through the restricted period.During the year ended December 31,2021,Housing Catalyst had total CDBG grant income of $58,107 and HOME grant income of $54,227. In November of 2020,Housing Catalyst issued private activity bonds in the amount of $6,500,000 to Meadows Townhomes LIHTC,LLLP,for the rehabilitation of Meadows Townhomes.The debt has a final maturity date of October 1,2022 and is secured by real estate.Housing Catalyst in no way guarantees the debt or has any liability for the debt.Accordingly,the debt is not reported as liabilities in Housing Catalyst's financial statements.Meadows Townhomes paid Housing Catalyst an issuance fee for issuing the bonds.As of December 31, 2021, the outstanding balance of the debt was $6,500,000. In April of 2022,Housing Catalyst issued private activity bonds in the amount of $12,000,000 to MHMP 16 Northfield,LLLP,for the construction of Northfield Commons in Fort Collins,Colorado.The debt has a final maturity date of April 23,2039 and is secured by real estate.Housing Catalyst will not guarantee the debt or have any liability for the debt.Accordingly,the debt will not be reported as a liability in Housing Catalyst's financial statements. MHMP 16 Northfield paid Housing Catalyst an issuance fee for issuing the bonds. In March of 2022,Housing Catalyst was approved to transition to HUD's Moving to Work (MTW)program under the Landlord Incentive cohort.The transition to MTW will allow Housing Catalyst flexibility with HUD funding and the ability to explore new programs to assist the community.The transition will not directly impact the overall HUD funding received by Housing Catalyst. Housing Catalyst receives significant financial assistance from the United States Government in the form of contracts and grants.Entitlement to these resources is generally contingent upon compliance with the terms and conditions of the contract or grant agreements and applicable federal regulations,including the expenditure of the resources for eligible purposes.Substantially all federal grants and contracts are subject to a financial and compliance audit under federal regulations.Disallowed costs as a result of compliance audits become a liability of Housing Catalyst.Management believes that the potential for a material liability due to future audit disallowance is remote. 58 Housing Catalyst Combining Schedule of Net Position December 31, 2021 Housing Emergency Blended Public Choice Mainstream Housing Component State and Housing Vouchers Vouchers Vouchers Units Local Assets and Deferred Outflows Cash and cash equivalents 969,907$ 440,195$ -$ 91,511$ 10,156,237$ 2,930$ Restricted cash and cash equivalents 16,723 199,702 - 38,977 93,605 - Accounts receivable Grants - 6,102 46,220 - 287 - Tenants 6,307 - - - 20,096 - Developer fees, current - - - - - - Other - 2,729 - - 1,426 - Accrued interest - - - - 43,575 - Lease receivable - current - - - - - - Notes receivable - current - - - - 10,908 - Prepaid expenses - - - - 66 - Inventory - - - - - - Due from other funds 7,237 2,553 - - - - Total current assets 1,000,174 651,281 46,220 130,488 10,326,200 2,930 Non-depreciable capital assets 2,199,946 - - - 1,561,518 - Depreciable capital assets, net 534,653 - - - 2,848,268 - Leased capital assets, net - - - - - - Developer fees receivable, long-term - - - - - - Lease receivable, net - - - - - - Notes receivable, net - - - - 8,175,836 - Prepaid long-term lease - - - - - - Investment in tax credit partnerships - - - - - - Investment in future developments - - - - - - Total Assets 3,734,773 651,281 46,220 130,488 22,911,822 2,930 Deferred Outflows of Resources - - - - - - Total Assets and Deferred Outflows 3,734,773$ 651,281$ 46,220$ 130,488$ 22,911,822$ 2,930$ Liabilities, Deferred Inflows and Net Position Liabilities Accounts payable 31,586$ 1,664$ -$ -$ 20,532$ -$ Accrued liabilities 15,543 21,606 6,347 1,974 47,079 - Accrued compensation 8,803 82,543 3,653 291 - - Accrued interest payable - - - - - - Unearned revenues 3,116 - - 38,977 51,707 - Due to other funds - - 13,005 - 2,268 - Due to other agencies - - - - - - Tenant security deposits 14,021 - - - 83,875 - Money held in escrow 2,702 199,702 - - 5,554 - Leases payable - current - - - - - - Notes and mortgages payable - current - - - - - - Total current liabilities 75,771 305,515 23,005 41,242 211,015 - Leases payable, net - - - - - - Notes and mortgages payable, net - - - - - - Total Liabilities 75,771 305,515 23,005 41,242 211,015 - Deferred Inflows of Resources - - - - - - Net Position Net investment in capital assets 2,734,599 - - - 4,409,786 - Restricted - housing assistance payments - - - 69,028 25,055 - Unrestricted 924,403 345,766 23,215 20,218 18,265,966 2,930 Total Net Position, as Restated 3,659,002 345,766 23,215 89,246 22,700,807 2,930 Total Liabilities, Deferred Inflows and Net Position 3,734,773$ 651,281$ 46,220$ 130,488$ 22,911,822$ 2,930$ See accompanying Report of Independent Auditors 59 Housing Catalyst Combining Schedule of Net Position December 31, 2021 Elimination of Housing Section 8 Intercompany Development Management HUD Grant SRO COCC Subtotal Activity Total 4,434,538$ 1,384,772$ -$ 45,067$ -$ 17,525,157$ -$ 17,525,157$ - 114,188 - - - 463,195 - 463,195 - 48,028 - - - 100,637 - 100,637 - - - - - 26,403 - 26,403 1,801,735 - - - - 1,801,735 - 1,801,735 124,778 237,409 - - - 366,342 - 366,342 97,189 155,556 - - - 296,320 - 296,320 15,661 - - - - 15,661 - 15,661 18,573 98,255 - - - 127,736 - 127,736 - 34,174 - - - 34,240 - 34,240 - 70,413 - - - 70,413 - 70,413 - 11,685 - - - 21,475 (21,475) - 6,492,474 2,154,480 - 45,067 - 20,849,314 (21,475) 20,827,839 660,000 39,500 - - - 4,460,964 - 4,460,964 - 306,149 - - - 3,689,070 - 3,689,070 - 74,091 - - - 74,091 - 74,091 5,637,751 - - - - 5,637,751 - 5,637,751 38,230 - - - - 38,230 - 38,230 45,985,841 19,716,745 - - - 73,878,422 (99,750) 73,778,672 1,325,724 - - - - 1,325,724 - 1,325,724 147,735 - - - - 147,735 - 147,735 - - - - - - - - 60,287,755 22,290,965 - 45,067 - 110,101,301 (121,225) 109,980,076 - - - - - - - - 60,287,755$ 22,290,965$ -$ 45,067$ -$ 110,101,301$ (121,225)$ 109,980,076$ 3,353$ 21,738$ -$ -$ -$ 78,873$ -$ 78,873$ 4,500 119,493 - - - 216,542 - 216,542 63,593 455,333 - - - 614,216 - 614,216 1,360 11,438 - - - 12,798 - 12,798 - 119,109 - - - 212,909 - 212,909 6,202 - - - - 21,475 (21,475) - - - - - - - - - - - - - - 97,896 - 97,896 - 3,853 - - - 211,811 - 211,811 - 34,564 - - - 34,564 - 34,564 32,677 153,900 - - - 186,577 - 186,577 111,685 919,428 - - - 1,687,661 (21,475) 1,666,186 - 50,586 - - - 50,586 - 50,586 512,429 20,015,667 - - - 20,528,096 (99,750) 20,428,346 624,114 20,985,681 - - - 22,266,343 (121,225) 22,145,118 52,842 - - - - 52,842 - 52,842 114,894 (8,918) - - - 7,250,361 - 7,250,361 - - - 45,067 - 139,150 - 139,150 59,495,905 1,314,202 - - - 80,392,605 - 80,392,605 59,610,799 1,305,284 - 45,067 - 87,782,116 - 87,782,116 60,287,755$ 22,290,965$ -$ 45,067$ -$ 110,101,301$ (121,225)$ 109,980,076$ See accompanying Report of Independent Auditors 60 Housing Catalyst Combining Schedule of Revenues, Expenses and Changes in Net Position Year Ended December 31, 2021 Housing Emergency Blended Public Choice Mainstream Housing Component State and Housing Vouchers Vouchers Vouchers Units Local Operating Revenues HUD PHA grants 326,267$ 12,266,603$ 1,266,013$ 145,712$ 1,021,276$ -$ Other grants - - - - 500,000 - Rental income 232,457 - - - 2,264,961 - Administration fees - - - - - - Developer fees - - - - - - Other 49,201 21,368 - - 81,585 - Total Operating Revenues 607,925 12,287,971 1,266,013 145,712 3,867,822 - Operating Expenses Housing assistance payments - 11,909,365 1,171,481 47,715 896,005 - Administrative salaries and benefits 88,091 575,330 59,314 2,659 239,343 - Maintenance salaries and benefits 1,599 - - - 20,147 - Other administrative 222,557 518,161 48,851 6,097 611,185 - Regular and extraordinary maintenance 247,066 - - - 592,199 - Depreciation and amortization 50,420 - - - 424,518 - Utilities 72,081 - - - 179,278 - Insurance 39,415 - - - 86,558 - Payments in lieu of taxes 15,543 - - - - - Other 8,608 - - - 55,680 - Total Operating Expenses 745,380 13,002,856 1,279,646 56,471 3,104,913 - Operating Income (Loss)(137,455) (714,885) (13,633) 89,241 762,909 - Non-Operating Revenues (Expenses) Interest income 245 291 28 5 234,530 1 Interest expense - - - - (60) - Other financing costs - - - - - - Gain on sale of capital assets - - - - 3,900,231 - Total Non-Operating Revenues (Expenses)245 291 28 5 4,134,701 1 Income (Loss) Before Contributions (137,210) (714,594) (13,605) 89,246 4,897,610 1 HUD Capital Contributions 177,887 - - - - - Change in Net Position 40,677 (714,594) (13,605) 89,246 4,897,610 1 Net Position-Beginning of Year, as Restated 3,618,325 1,060,360 36,820 - 17,803,197 2,929 Net Position-End of Year 3,659,002$ 345,766$ 23,215$ 89,246$ 22,700,807$ 2,930$ See accompanying Report of Independent Auditors 61 Housing Catalyst Combining Schedule of Revenues, Expenses and Changes in Net Position Year Ended December 31, 2021 Elimination of Housing Section 8 Intercompany Development Management HUD Grant SRO COCC Subtotal Activity Total -$ 282,904$ 223,260$ -$ -$ 15,532,035$ -$ 15,532,035$ 4,524,545 128,712 - - - 5,153,257 - 5,153,257 - - - - - 2,497,418 - 2,497,418 - 885,281 - - 3,966,955 4,852,236 (2,093,158) 2,759,078 1,535,760 - - - - 1,535,760 - 1,535,760 195,367 259,414 - - 7,088 614,023 - 614,023 6,255,672 1,556,311 223,260 - 3,974,043 30,184,729 (2,093,158) 28,091,571 - - - - - 14,024,566 - 14,024,566 765,109 343,910 223,260 - 2,694,267 4,991,283 - 4,991,283 18,476 595,331 - - 325,696 961,249 - 961,249 565,768 253,268 - - 856,550 3,082,437 (1,870,130) 1,212,307 6,482 63,076 - - 37,395 946,218 (223,028) 723,190 - 92,692 - - 8,694 576,324 - 576,324 1,985 - - - 10,216 263,560 - 263,560 4,853 19,880 - - 40,600 191,306 - 191,306 - - - - - 15,543 - 15,543 55,842 282,904 - - - 403,034 - 403,034 1,418,515 1,651,061 223,260 - 3,973,418 25,455,520 (2,093,158) 23,362,362 4,837,157 (94,750) - - 625 4,729,209 - 4,729,209 1,188,301 156,058 - 6 - 1,579,465 - 1,579,465 (23,000) (180,487) - - (625) (204,172) - (204,172) (851) - - - - (851) - (851) - - - - - 3,900,231 - 3,900,231 1,164,450 (24,429) - 6 (625) 5,274,673 - 5,274,673 6,001,607 (119,179) - 6 - 10,003,882 - 10,003,882 - - - - - 177,887 - 177,887 6,001,607 (119,179) - 6 - 10,181,769 - 10,181,769 53,609,192 1,424,463 - 45,061 - 77,600,347 - 77,600,347 59,610,799$ 1,305,284$ -$ 45,067$ -$ 87,782,116$ -$ 87,782,116$ See accompanying Report of Independent Auditors 62 Housing Catalyst Combining Schedule of Net Position - Blended Component Units December 31, 2021 Larimer County Housing Authority Villages, Ltd Total Assets Current Assets Cash and cash equivalents 26,733$ 10,129,504$ 10,156,237$ Restricted cash and cash equivalents 9,730 83,875 93,605 Accounts receivable Grants 287 - 287 Tenants - 20,096 20,096 Other 1,104 322 1,426 Accrued interest - 43,575 43,575 Notes receivable - current - 10,908 10,908 Prepaid expenses - 66 66 Total Current Assets 37,854 10,288,346 10,326,200 Capital Assets Non-depreciable - 1,561,518 1,561,518 Depreciable, net - 2,848,268 2,848,268 Total Capital Assets, Net - 4,409,786 4,409,786 Notes receivable, net - 8,175,836 8,175,836 Total Noncurrent Assets - 12,585,622 12,585,622 Total Assets 37,854$ 22,873,968$ 22,911,822$ Liabilities and Net Position Current Liabilities Accounts payable -$ 20,532$ 20,532$ Accrued liabilities 7,115 39,964 47,079 Unearned revenues - 51,707 51,707 Due to other funds - 2,268 2,268 Tenant security deposits payable - 83,875 83,875 Money held in escrow 5,554 - 5,554 Total Current Liabilities 12,669 198,346 211,015 Total Liabilities 12,669 198,346 211,015 Net Position Net investment in capital assets - 4,409,786 4,409,786 Restricted - housing assistance payments 25,055 - 25,055 Unrestricted 130 18,265,836 18,265,966 Total Net Position 25,185 22,675,622 22,700,807 Total Liabilities and Net Position 37,854$ 22,873,968$ 22,911,822$ See accompanying Report of Independent Auditors 63 Housing Catalyst Combining Schedule of Revenues, Expenses and Changes in Net Position - Blended Component Units Year Ended December 31, 2021 Larimer County Housing Authority Villages, Ltd Total Operating Revenues HUD PHA grants 1,021,276$ -$ 1,021,276$ Other grants - 500,000 500,000 Rental income - 2,264,961 2,264,961 Other 549 81,036 81,585 Total Operating Revenues 1,021,825 2,845,997 3,867,822 Operating Expenses Housing assistance payments 896,005 - 896,005 Administrative salaries and benefits 54,311 185,032 239,343 Maintenance salaries and benefits - 20,147 20,147 Other administrative 54,563 556,622 611,185 Regular and extraordinary maintenance - 592,199 592,199 Depreciation and amortization - 424,518 424,518 Utilities - 179,278 179,278 Insurance - 86,558 86,558 Other - 55,680 55,680 Total Operating Expenses 1,004,879 2,100,034 3,104,913 Operating Income (Loss)16,946 745,963 762,909 Non-Operating Revenues (Expenses) Interest income - 234,530 234,530 Interest expense - (60) (60) Gain of sale of capital assets - 3,900,231 3,900,231 Total Non-Operating Revenues (Expenses)- 4,134,701 4,134,701 Change in Net Position 16,946 4,880,664 4,897,610 Net Position, Beginning of the Year, as Restated 8,239 17,794,958 17,803,197 Net Position, End of the Year 25,185$ 22,675,622$ 22,700,807$ See accompanying Report of Independent Auditors 64 Housing Catalyst Fort Collins, Colorado Statistical Section: Financial Trends Revenue Capacity Debt Capacity Demographic and Economic Information Operation Information Housing Catalyst Statistical Section Year Ended December 31, 2020 Contents Tables Financial Trends 1 - 2 Revenue Capacity 3 - 4 Debt Capacity 5 - 6 Demographic and Economic Information 7 - 10 Operating Information 11 - 13 These schedules contain data to help the reader understand how the information in Housing Catalyst's financial report relates to the services Housing Catalyst provides and the activities it performs. This part of Housing Catalyst's CAFR presents detailed information as a context for understanding what the information in the financial statements,note disclosures and required supplementary information says about Housing Catalyst's overall financial health. These schedules contain trend information to help the reader understand how Housing Catalyst's financial performance and well-being have changed over the past 10 years. These schedules contain trend information to help the reader assess Housing Catalyst's most significant revenue sources. These schedules contain trend information to help the reader assess the affordability of Housing Catalyst's current levels of outstanding debt and ability to issue additional debt in the future. These schedules contain trend information of the demographic and economic indicators to help the reader understand the environment within which Housing Catalyst's financial activities take place. 65 Housing Catalyst Table 1 - Net Position - Last Ten Fiscal Years (Unaudited) Net investment Restricted Unrestricted Fiscal Year in capital assets Net Position Net Position Total 2012 11,135,254$ 830,743$ 10,598,006$ 22,564,003$ 2013 10,911,282 124,601 11,049,361 22,085,244 2014 7,271,939 165,676 19,127,842 26,565,457 2015 7,618,140 166,313 21,747,242 29,531,695 2016 7,173,493 153,278 24,265,680 31,592,451 2017 9,271,815 94,058 41,339,629 50,705,502 2018 7,404,055 114,697 60,132,359 67,651,111 2019 6,695,367 285,791 66,623,629 73,604,787 2020 8,043,902 823,844 68,732,601 77,600,347 2021 7,250,361 139,150 80,392,605 87,782,116 Source: Previous years' audits and current year financial statements Note: Villages (Blended Component Unit) added to add years for comparability See accompanying Report of Independent Auditors 66 Housing Catalyst Table 2 - Changes in Net Position - Last Ten Fiscal Years (Unaudited) 2012 2013 2014 2015 Operating Revenue: Intergovernmental revenues 10,264,791$ 10,089,671$ 10,684,674$ 11,595,136$ Net tenant revenue 2,887,517 6,257,062 6,589,029 5,483,156 Other revenues 1,639,780 1,556,377 1,870,414 4,010,501 14,792,088 17,903,110 19,144,117 21,088,793 Operating Expenses: Administrative 3,560,096 3,941,071 4,140,172 4,446,537 Utilities 443,905 669,370 608,836 486,827 Ordinary maintenance and operating 1,699,357 2,486,579 2,386,274 2,129,092 General expenses 129,538 306,730 354,697 601,520 Depreciation and amortization 911,776 1,791,880 1,765,212 1,451,766 Housing assistance payments 7,911,438 8,335,325 8,319,806 8,722,655 14,656,110 17,530,955 17,574,997 17,838,397 Operating Income (Loss)135,978 372,155 1,569,120 3,250,396 Nonoperating Revenue (Expenses): Investment revenue 194,684 225,143 280,773 434,087 Interest expense (389,687) (1,251,724) (1,051,184) (832,614) Other revenue - - 3,423,994 (4,582) Other financing costs (238,995) (19,832) (541) - (433,998) (1,046,413) 2,653,042 (403,109) Income (Loss) before Capital Contribution (298,020) (674,258) 4,222,162 2,847,287 Capital grants 321,524 195,499 258,051 118,951 Change in net position 23,504 (478,759) 4,480,213 2,966,238 Net Position, Beginning of the Year 22,540,499 22,564,003 22,085,244 26,565,457 Net Position, End of the Year 22,564,003$ 22,085,244$ 26,565,457$ 29,531,695$ Source: Previous years' audits and current year financial statements Note: Villages (Blended Component Unit) added to add years for comparability See accompanying Report of Independent Auditors 67 Housing Catalyst Table 2 - Changes in Net Position - Last Ten Fiscal Years (Unaudited) 2016 2017 2018 2019 2020 2021 13,165,946$ 14,490,955$ 12,611,505$ 14,546,760$ 16,504,807$ 20,685,292$ 5,491,850 4,643,450 3,070,311 2,795,340 2,775,494 2,497,418 2,037,185 4,065,170 12,328,561 4,575,558 4,548,140 4,908,861 20,694,981 23,199,575 28,010,377 21,917,658 23,828,441 28,091,571 4,642,560 4,564,853 4,576,933 4,874,101 5,861,588 6,203,590 500,311 491,164 325,374 275,003 281,787 263,560 2,385,322 2,144,447 1,718,640 1,722,432 1,659,259 1,684,439 636,297 667,666 534,757 566,657 615,995 609,883 1,533,348 1,305,347 768,308 716,839 660,489 576,324 9,175,020 9,337,277 10,367,104 11,223,214 12,279,216 14,024,566 18,872,858 18,510,754 18,291,116 19,378,246 21,358,334 23,362,362 1,822,123 4,688,821 9,719,261 2,539,412 2,470,107 4,729,209 638,318 725,724 1,225,758 1,465,607 1,457,131 1,579,465 (832,056) (630,935) (226,555) (182,980) (100,103) (204,172) 476,252 13,720,482 6,096,457 1,981,406 - 3,900,231 (52,771) (48,771) (19,032) (7,500) (1,000) (851) 229,743 13,766,500 7,076,628 3,256,533 1,356,028 5,274,673 2,051,866 18,455,321 16,795,889 5,795,945 3,826,135 10,003,882 8,890 657,730 149,720 157,731 169,425 177,887 2,060,756 19,113,051 16,945,609 5,953,676 3,995,560 10,181,769 29,531,695 31,592,451 50,705,502 67,651,111 73,604,787 77,600,347 31,592,451$ 50,705,502$ 67,651,111$ 73,604,787$ 77,600,347$ 87,782,116$ See accompanying Report of Independent Auditors 68 Housing Catalyst Table 3 - Operating Revenues by Source - Last Ten Fiscal Years (Unaudited) Fiscal Year Amount % of Total Amount % of Total Amount % of Total Total 2012 2,887,517$ 19.52%10,264,791$ 69.39%1,639,780$ 11.09%14,792,088$ 2013 6,257,062 34.95%10,089,671 56.36%1,556,377 8.69%17,903,110 2014 6,589,029 34.42%10,684,674 55.81%1,870,414 9.77%19,144,117 2015 5,483,156 26.00%11,595,136 54.99%4,010,501 19.02%21,088,793 2016 5,491,850 26.54%13,165,946 63.62%2,037,185 9.84%20,694,981 2017 4,643,450 20.02%14,490,955 62.47%4,065,170 17.52%23,199,575 2018 3,070,311 10.96%12,611,505 45.02%12,328,561 44.02%28,010,377 2019 2,795,340 12.75%14,546,760 66.37%4,575,558 20.88%21,917,658 2020 2,775,494 11.65%16,504,807 69.27%4,548,140 19.09%23,828,441 2021 2,497,418 8.89%20,685,292 73.64%4,908,861 17.47%28,091,571 Source: Previous years' audits and current year financial statements Note: Villages (Blended Component Unit) added to add years for comparability Net Tenant Rental Intergovernmental Other See accompanying Report of Independent Auditors 69 Housing Catalyst Table 4 - Non-Operating Revenues by Source - Last Ten Fiscal Years (Unaudited) Fiscal Year Amount % of Total Amount % of Total Amount % of Total Total 2012 -$ 0.00%194,684$ 100.00%-$ 0.00%194,684$ 2013 - 0.00%225,143 100.00%- 0.00%225,143 2014 - 0.00%280,773 7.58%3,423,994 92.42%3,704,767 2015 - 0.00%434,087 101.07%(4,582) -1.07%429,505 2016 - 0.00%638,318 57.27%476,252 42.73%1,114,570 2017 - 0.00%725,724 5.02%13,720,482 94.98%14,446,206 2018 - 0.00%1,225,758 16.74%6,096,457 83.26%7,322,215 2019 - 0.00%1,465,607 42.52%1,981,406 57.48%3,447,013 2020 - 0.00%1,457,131 100.00%- 0.00%1,457,131 2021 - 0.00%1,579,465 28.82%3,900,231 71.18%5,479,696 Source: Previous years' audits and current year financial statements Note: Villages (Blended Component Unit) added to add years for comparability Intergovernmental Investment Other Income See accompanying Report of Independent Auditors 70 Housing Catalyst Table 5 - Debt Service Coverage - Last Ten Fiscal Years (Unaudited) 2012 2013 2014 2015 Revenue 15,308,296$ 18,323,752$ 19,682,941$ 21,641,831$ Expenses (excluding depreciation)(14,373,016) (17,010,631) (16,861,510) (17,219,245) Revenue Available for debt service 935,280$ 1,313,121$ 2,821,431$ 4,422,586$ Debt Service Requirements: Principal 380,458$ 477,046$ 533,205$ 461,236$ Interest 379,625 1,226,232 1,038,968 821,249 Total 760,083$ 1,703,278$ 1,572,173$ 1,282,485$ Debt Service Coverage Ratio 1.23 0.77 1.79 3.45 Source: Previous years' audits and current year financial statements Note: Villages (Blended Component Unit) added to add years for comparability See accompanying Report of Independent Auditors 71 Housing Catalyst Table 5 - Debt Service Coverage - Last Ten Fiscal Years (Unaudited) 2016 2017 2018 2019 2020 2021 21,342,189$ 24,583,029$ 29,385,855$ 23,540,996$ 25,454,997$ 29,848,923$ (18,224,337) (17,885,113) (17,768,395) (18,851,887) (20,798,948) (22,991,061) 3,117,852$ 6,697,916$ 11,617,460$ 4,689,109$ 4,656,049$ 6,857,862$ 966,599$ 2,225,331$ 412,919$ 476,292$ 418,462$ 113,951$ 799,139 759,760 75,507 205,340 66,721 34,857 1,765,738$ 2,985,091$ 488,426$ 681,632$ 485,183$ 148,808$ 1.77 2.24 23.79 6.88 9.60 46.09 See accompanying Report of Independent Auditors 72 Housing Catalyst Table 6 -Ratio of Debt to Capital Assets - Last Ten Fiscal Years (Unaudited) Ratio of Fiscal Total Debt to Year Short-Term Debt Long-Term Debt Total Debt Capital Assets Capital Assets 2012 477,047$ 32,390,850$ 32,867,897$ 43,607,248$ 75.37% 2013 533,205 31,885,418 32,418,623 42,965,290 75.45% 2014 461,236 25,738,657 26,199,893 33,371,171 78.51% 2015 2,792,187 23,458,254 26,250,441 33,268,074 78.91% 2016 2,225,331 22,251,836 24,477,167 31,592,013 77.48% 2017 412,918 2,124,459 2,537,377 11,773,139 21.55% 2018 476,292 5,199,178 5,675,470 13,067,186 43.43% 2019 448,492 2,037,452 2,485,944 9,177,356 27.09% 2020 147,326 984,824 1,132,150 9,166,872 12.35% 2021 221,141 20,478,932 20,700,073 8,224,125 251.70% Source: Previous years' audits and current year financial statements Note: Total debt amount includes short-term portion of debt and leases due within one year Note: Villages (Blended Component Unit) added to add years for comparability See accompanying Report of Independent Auditors 73 Housing Catalyst Table 7 - Service Area Demographics / Statistics - Last Ten Fiscal Years (Unaudited) City of Fort Collins Residents Fort Collins & Larimer County Fiscal Year Population of Housing Catalyst Unemployment Rate 2012 148,700 2,430 6.4% 2013 151,330 2,446 5.4% 2014 155,400 3,433 4.3% 2015 160,935 3,286 3.3% 2016 161,000 3,164 2.8% 2017 167,500 2,717 2.2% 2018 171,100 2,847 2.8% 2019 172,653 2,828 2.0% 2020 174,871 2,755 6.4% 2021 172,321 3,188 3.0% Source: City of Fort Collins, Bureau of Labor Statistics and Housing Catalyst tenant records. Note: Resident data does not include Villages due to insufficient demographic records. Note:2021 unemployment rate is based on the Fort Collins /Loveland regional area.This table includes all Housing Catalyst housing programs. See accompanying Report of Independent Auditors 74 Housing Catalyst Table 8 - Principal Employers for the City of Fort Collins (Unaudited) Percentage of Total Employees Rank City Employment Colorado State University 7,800 1 7.9% UC Health: Poudre Valley Hospital 5,600 2 5.6% Poudre R-1 School District 4,000 3 4.0% Larimer County 2,040 4 2.1% City of Fort Collins 2,030 5 2.0% Woodward 1,300 6 1.3% Broadcom (Avago) 1,260 7 1.3% Department of Agriculture 1,120 8 1.1% Dillon Companies Inc (King Soopers) 870 9 0.9% Otter Products, LLC 820 10 0.8% Total 26,840 27.1% Percentage of Total Employees Rank City Employment Colorado State University 6,755 1 7.8% Poudre R-1 School District 3,929 2 4.5% UC Health: Poudre Valley Hospital 2,832 3 3.3% Larimer County 1,975 4 2.3% City of Fort Collins 1,795 5 2.1% Hewlett Packard 1,524 6 1.8% Center Partners 1,081 7 1.2% Woodward 994 8 1.1% Broadcom (Avago) 656 9 0.8% Anheuser-Busch 609 10 0.7% Total 22,150 25.4% Source: City of Fort Collins Annual Comprehensive Financial Report, FY 12/31/2020 (1) Current year data is unavailable at the time of the preparation of the Annual Comprehensive Financial Report. * 2010 data not available 2020 (1) 2009 (1) * See accompanying Report of Independent Auditors 75 Housing Catalyst Table 9 - Resident Demographics / Population Statistics - Last Ten Fiscal Years (Unaudited) Number of Number of Number of Total minors adults elderly number of Fiscal Year (ages 0-18)(ages 19-61)(ages 62+)residents 2012 153 202 19 374 2013 160 197 23 380 2014 337 626 63 1,026 2015 265 543 68 876 2016 261 449 64 774 2017 81 89 17 187 2018 80 87 20 187 2019 73 89 20 182 2020 66 92 17 175 2021 56 84 19 159 Number of Number of Number of Total minors adults elderly number of Fiscal Year (ages 0-18)(ages 19-61)(ages 62+)residents 2012 884 1,008 164 2,056 2013 888 992 186 2,066 2014 995 1,137 275 2,407 2015 975 1,145 290 2,410 2016 917 1,154 319 2,390 2017 987 1,222 321 2,530 2018 996 1,251 413 2,660 2019 951 1,255 440 2,646 2020 859 1,244 477 2,580 2021 1,033 1,488 508 3,029 Source: Housing Catalyst tenant records. Note: Does not include Villages due to insufficient demographic records. Public Housing and Non-HUD Housing Programs Housing Choice Voucher Program See accompanying Report of Independent Auditors 76 Housing Catalyst Table 10 - Resident Demographics / Ethnicity Statistics - Last Ten Fiscal Years (Unaudited) African Native Fiscal Year Caucasian Latino American American Other Total 2012 218 131 11 7 7 374 2013 220 133 8 11 8 380 2014 650 330 16 18 12 1,026 2015 565 232 43 20 16 876 2016 511 217 25 13 8 774 2017 96 75 6 6 4 187 2018 90 81 8 8 - 187 2019 85 81 9 7 - 182 2020 79 81 8 7 - 175 2021 68 78 7 6 - 159 African Native Fiscal Year Caucasian Latino American American Other Total 2012 1,398 493 82 62 21 2,056 2013 1,404 496 83 62 21 2,066 2014 1,724 515 96 48 24 2,407 2015 1,712 530 96 48 24 2,410 2016 1,720 502 96 48 24 2,390 2017 1,770 557 101 51 51 2,530 2018 1,534 856 186 75 9 2,660 2019 1,556 819 155 58 58 2,646 2020 1,453 834 160 74 59 2,580 2021 1,594 1,003 242 104 86 3,029 Source: Housing Catalyst tenant records. Note: Does not include Villages due to insufficient demographic records. Public Housing and Non-HUD Housing Programs Housing Choice Voucher Program See accompanying Report of Independent Auditors 77 Housing Catalyst Table 11 - Number of Housing Catalyst Dwelling Units - Last Ten Fiscal Years (Unaudited) Housing Emergency Five Year Public Choice VASH Housing Mainstream Fiscal Year Housing Vouchers Vouchers Vouchers Vouchers RAD SRO TBRA VOCC Villages Total 2012 154 836 64 64 64 - 27 6 - 325 1,540 2013 154 810 79 79 65 - 27 9 344 325 1,892 2014 154 853 89 89 63 - 27 6 285 325 1,891 2015 154 901 112 112 63 - 27 10 285 230 1,894 2016 154 916 121 121 64 - - 5 285 230 1,896 2017 70 870 115 115 60 69 - - - 230 1,529 2018 70 983 122 122 63 19 - - - 230 1,609 2019 70 969 119 119 99 - - - - 230 1,606 2020 70 956 133 133 141 - - - - 229 1,662 2021 70 1,108 143 13 196 - - - - 185 1,715 Source: Housing Catalyst tenant records. See accompanying Report of Independent Auditors 78 Housing Catalyst Table 12 - Property Characteristics and Unit Composition - Last Ten Fiscal Years (Unaudited) Number Address of Units Year Built Public Housing: Gallup 804 - 824 Gallup Road 8 1976 Grant - 307-317 307 - 317 N. Grant Avenue 6 1976 Impala 300 - 330 Impala Circle 11 1976 Jamith 112 - 125 Jamith Place 14 1980 Loomis 331 S Loomis Avenue 2 1890 Morgan 1016 - 1018 Morgan Street 3 1965 Plum - 2155 2155 W. Plum Street 15 1980 Rams 2912 - 2926 Rams Lane 2 1976 Rocky 800 - 813 Rocky Road 3 1976 Sycamore 905 Sycamore Street 1 1940 West - 512-514 512 - 514 West Street 2 1976 Whedbee - 228 228 Whedbee Street 1 1890 Whitcomb 311 N. Whitcomb Street 1 1930 Wood 500 Wood Street 1 1940 Total Public Housing Units 70 Villages: Village on Bryan 100 S Bryan Avenue 27 1988 Village on Castlerock 1204 Castlerock Drive 4 1961 Village on Cherry 1321 Cherry Street 4 1980 Village on Cowen 615 Cowan Street 19 1971 First - SRO 300 1st Street 13 1981 Village on Impala 400 Impala Circle 24 1998 Village on Leisure 2700 Leisure Drive 26 1971 Village on Maple 1216 Maple Street 4 1994 Village on Matuka 1200 Matuka Court 20 1991 Village on Mountain 366 E Mountain Avenue 5 1905 Myrtle - SRO 811 E Myrtle Street 16 1950 Village on Stanford 2831 Stanford Road 6 1969 Duplexes 813 Cherry Street 10 1960 Single Family Home - Cherry 817 Cherry Street 1 1905 Single Family Home - 327 Howes 327 N Howes Street 1 1934 Single Family Home - 331 Howes 331 N Howes Street 1 1900 Single Family Home - Maple 1218 Maple Street 1 1993 Single Family Home - 1711 Remington 1711 Remington Street 1 1957 Single Family Home - 1713 Remington 1713 Remington Street 1 1957 Single Family Home - Stuart 124 E Stuart Street 1 1939 185 Total Units 255 Source: Housing Catalyst Property Records Name of Development See accompanying Report of Independent Auditors 79 Housing Catalyst Table 13 - Number of Housing Catalyst Staff - Last Ten Fiscal Years (Unaudited) Fiscal Year Administration Development Finance Housing Maintenance Total 2012 6 4 6 25 10 51 2013 6 5 6 29 11 57 2014 7 6 6 23 15 57 2015 8 6 7 24 16 61 2016 8 6 7 27 15 63 2017 8 6 6 27 16 63 2018 8 4 6 28 14 60 2019 9 4 7 36 16 72 2020 6 7 10 45 17 85 2021 10 8 8 48 16 90 Source: Housing Catalyst employment records. See accompanying Report of Independent Auditors 80 Housing Catalyst Fort Collins, Colorado Single Audit Section: Independent Auditors' Reports Schedule of Findings and Questioned Costs Schedule of Prior Year Audit Findings Schedule of Expenditures of Federal Awards What inspires you, inspires us. | eidebailly.com 4310 17th Ave. S. | P.O. Box 2545 | Fargo, ND 58108-2545 | T 701.239.8500 | F 701.239.8600 | EOE 81 Independent Auditor’s 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 Housing Catalyst Fort Collins, Colorado We have audited, 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 the business‐type activities and the aggregate discretely presented component units of the Housing Catalyst as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise Housing Catalyst’s basic financial statements, and have issued our report thereon dated July 26, 2022. The financial statements of the discretely presented component units, except for Oak 140, LLLP, were not audited in accordance with Government Auditing Standards and, accordingly, this report does not include reporting on internal control over financial reporting or instances of reportable noncompliance associated with the discretely presented component units, except for Oak 140, LLLP. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered Housing Catalyst's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Housing Catalyst’s internal control. Accordingly, we do not express an opinion on the effectiveness of Housing Catalyst’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 entity’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. 82 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 or significant deficiencies may exist that have not been identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether Housing Catalyst'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 financial statements. 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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Fargo, North Dakota July 26, 2022 What inspires you, inspires us. | eidebailly.com 4310 17th Ave. S. | P.O. Box 2545 | Fargo, ND 58108-2545 | T 701.239.8500 | F 701.239.8600 | EOE 83 Independent Auditor’s Report on Compliance for The Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance To the Board of Commissioners Housing Catalyst Fort Collins, Colorado Report on Compliance for the Major Federal Program Opinion on The Major Federal Program We have audited Housing Catalyst’s (the Authority) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the major federal program of the Authority for the year ended December 31, 2021. The Authority’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the Authority complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal program for the year ended December 31, 2021. Basis for Opinion on the Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the Authority’s compliance with the compliance requirements referred to above. 84 Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the Authority ‘s federal programs. Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Authority’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Authority’s compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the Authority’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of the Authority’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. 85 Report on 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 Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The 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. Fargo, North Dakota July 26, 2022 86 Housing Catalyst Schedule of Findings and Questioned Costs Year Ended December 31, 2021 Section I – Summary of Auditor’s Results FINANCIAL STATEMENTS Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weaknesses identified No Significant deficiencies identified not considered to be material weaknesses None Reported Noncompliance material to financial statements noted? No FEDERAL AWARDS Internal control over major programs: Material weaknesses identified No Significant deficiencies identified not considered to be material weaknesses None Reported Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516: No Identification of major programs: Name of Federal Program CFDA Number Housing Voucher Cluster: Section 8 Housing Choice Vouchers 14.871 Mainstream Vouchers 14.879 Dollar threshold used to distinguish between Type A and Type B programs:$750,000 Auditee qualified as low‐risk auditee? Yes 87 Housing Catalyst Schedule of Findings and Questioned Costs Year Ended December 31, 2021 Section II – Financial Statement Findings None Section III – Federal Award Findings and Questioned Costs None Housing Catalyst Schedule of Expenditures of Federal Awards Year Ended December 31, 2021 Federal Financial Pass-Through Assistance Entity Federal Agency / Pass-Through Listing / Federal Identifying Federal Grantor Program Title CFDA Number Number Expenditures United States Department of Housing and Urban Development: Housing Choice Voucher Cluster Section 8 Housing Choice Vouchers **14.871 -12,699,570$ COVID-19 Assistance - Housing Choice Vouchers CARES Act **14.871 -271,429 Mainstream Vouchers **14.879 -1,272,178 COVID-19 Assistance - Mainstream Vouchers CARES Act **14.879 -7,468 Emergency Housing Vouchers **14.871 -56,471 Total Housing Choice Voucher Cluster 14,307,116 Public and Indian Housing 14.850 -283,905 Public and Indian Housing - CARES Act 14.850 -42,362 Family Self-Sufficiency Program 14.896 -223,260 Public Housing Capital Fund 14.872 -177,887 Continuum of Care Program 14.267 -282,904 Total Direct Awards 15,317,434 Passed through the City of Fort Collins: HOME Investment Partnership Program - Development Funds 14.239 54,227 Community Development Block Grants / Entitlement Grants 14.218 58,107 Total Pass-Through Awards 112,334 Blended Component Unit (Larimer County Housing Authority) United States Department of Housing and Urban Development: Housing Choice Voucher Cluster *** Section 8 Housing Choice Vouchers 14.871 -380,110 COVID-19 Assistance - Housing Choice Vouchers CARES Act 14.871 -8,666 Mainstream Vouchers 14.879 -600,151 COVID-19 Assistance - Mainstream Vouchers CARES Act 14.879 -15,952 Total Housing Choice Voucher Cluster 1,004,879 Total Federal Expenditures 16,434,647$ ** - Denotes a Major Program *** - Denotes operations tested as part of the Larimer County Housing Authority Single Audit and was not included in the Major Program determination of Housing Catalyst 3750 S Mason 3750 S Mason 88 Housing Catalyst Notes to Schedule of Expenditures of Federal Awards Year Ended December 31, 2021 Note 1 - Basis of Presentation Note 2 - Significant Accounting Policies Note 3 - Indirect Cost Rate Housing Catalyst has not elected to use the 10-percent de minimis indirect cost rate. Note 4 - Identification of COVID-19 Related Awards The accompanying schedule of expenditures of federal awards (the "Schedule")includes the federal grant activity of Housing Catalyst under programs of the federal government for the year ended December 31,2021.The information in the Schedule is presented in accordance with the requirements of Title 2 U.S.Code of Federal Regulations (CFR)Part 200,Uniform Administrative Requirements,Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Housing Catalyst,it is not intended to and does not present the financial position,changes in net position or cash flows of Housing Catalyst. Expenditures reported on the Schedule are reported on the accrual basis of accounting.Such expenditures are recognized following the cost principles contained in the Uniform Guidance,wherein certain types of expenditures are not allowable or are limited as to reimbursement. To maximize the transparency of COVID-19 related award expenditures,Housing Catalyst has separately identified COVID-19 expenditures in the Schedule with the prefix "COVID-19"in the program name when a new grant award was received for a COVID-19 related grant or program. 89 Development 5-Year Project Plans Development MilestonesUpcoming Project Milestones To: Housing Catalyst Board of Commissioners From: Rachel Gaisford, Communications Manager Meeting Date: October 20, 2022 Action Item: Goal 3: Enhance social and economic wellbeing for residents Based on discussions and strong support from Board members at the August 18 Board meeting, no revisions are being made to Goal 3: Enhance social and economic wellbeing for residents. Therefore, the current draft version will be included in the full Strategic Plan for approval in November. Please see below for the full goal language. GOAL 3 Enhance social and economic wellbeing for residents Recognizing that people often need more than a stable home to build a stable life, services are designed to increase resident stability through advocacy, modeling, education, relationships, and opportunities. Strategy 1: Build resiliency Assist residents in developing a variety of skills to proactively overcome hardships. Support residents in identifying and utilizing their support systems. Strategy 2: Promote and guide self-direction, responsibility, and agency Refer residents to community resources that will maximize independent living skills and inclusion in the community. Provide education and resources around financial literacy and basic needs. Connect residents with opportunities to strengthen their voice in the community. Strategy 3: Promote health and wellness Encourage self-care through planned events with partner agencies and resources in the community. Connect residents with organizations that can have a direct impact on their physical, social, and mental well-being. Strategy 4: Provide pathways to enrich education Support all residents—from birth through adulthood—in achieving educational goals related to school, career development, and community engagement. Create place-based partnerships with local schools and service providers to provide direct support and innovative educational programs for families. CURRENT GOAL 2 Increase supply of affordable housing Strategically expand the supply of affordable housing, supporting the City of Fort Collins net goal of 228 new affordable units per year. Strategy 2.1: Build New Housing and Secure/Preserve Existing At-Risk Properties • Strategically time the implementation of a 5-yearschedule of acquisition/rehab and new construction projects. Strategy 2.2: Build New Resources • Identify and collaborate with partners who can bring resources (capital, connections, subsidies) that are otherwise unavailable to Housing Catalyst. Strategy 2.3: Value Great Design, the Environment, and Sense of Community • Approach new construction and substantial renovation with a focus on good design, environmental stewardship and the importance of a creating sense of place that supports vibrant engaged communities. Strategy 2.4: Dispose of Obsolete/Unsustainable Models and Restructure Portfolio • Complete RAD Public Housing restructuring/replacement of all units. Strategy 2.5: Maximize Housing Catalyst and Community Resources • Determine projectsize/scale/scope/density needed to maximize Housing Catalyst capital/equity input, in order to decrease reliance on local and federal gap funding (CDBG/HOME/Division of Housing, City general fund subsidies.) Strategy2.6: Maximize Rental Assistance • Effectively manage and maximize utilization of all housing assistance program funds. • Expand opportunities for voucher assistance participants to obtain quality housing in neighborhoods that meet their needs. • Pursue all opportunities to increase the supply of housing assistance vouchers, including those designated for special populations. • Improve outreach and communication with property owners throughout Larimer County to encourage participation in rent assistance programs and to increase quality rental options for voucher assistance participants. Strategic Planning Process BOARD DISCUSSION | GOAL 2 Revised Goal Please review the materials provided in preparation for the discussion of Goal 2 at the October 20 meeting of the Housing Catalyst Board of Commissioners. LINKS TO REVIEW • Development Résumé • Partnership Criteria • City of Fort Collins Housing Strategic Plan GUIDING QUESTIONS • How does this goal fit with Housing Catalyst’s mission, business objectives, and core values? • How does this goal fit with the triple bottom line? • What (if anything) needs to be added? • What (if anything) needs to be clarified? PROPOSED GOAL 2 Increase supply of affordable housing Strategically increase the supply of affordable housing, through new development, preservation, acquisitions, and partnerships. Strategy 1: Build new homes and preserve existing homes that are affordable • Build on Housing Catalyst’s strength, history, and reputation as a skilled developer to critically analyze and strategically pursue opportunities to increase affordable housing. • Effectively manage a development pipeline to a detailed 5-year schedule. • Maintain operational agility needed to shift strategies, adapt to changing political and economic climates, and assess each opportunity for overall community benefit. Strategy 2: Develop and maintain strong strategic partnerships • Identify and collaborate with partners who offer resources (e.g. capital, connections, subsidies) and leverage opportunities to increase our community’s supply of affordable housing. • Evaluate partnership requests using Housing Catalyst’s Partnership Criteria and refine criteria to meet changing landscape, if necessary. Strategy 3: Create formal processes to influence policy and maximize resources for affordable housing • Lead local policy discussions and community dialogue around affordable housing development. • Influence and educate elected officials, funders, and other decision makers in the components of development that drive affordability. • Coordinate with partners to build support for initiatives that further affordable housing development. Strategy 4: Value design, the environment, and sense of community • Approach new construction and substantial renovation with a focus on intentional design, environmental stewardship, and with inclusive processes that build a sense of place and result in vibrant, engaged communities. Strategy 5: Restructure portfolio by disposition of functionally obsolete properties or financially unsustainable models • Complete Section 18 disposition of public housing. • Pursue portfolio sale and restructuring opportunities that yield greater efficiency, affordability, and housing types to best meet community needs. Housing Catalyst Five-Year Agency Plan 2018-2022 Page 1 2018-2022 Housing Catalyst is a Fort Collins, mission-driven real estate developer and the largest property management company in northern Colorado. Housing Catalyst provides sustainable, long-term housing solutions, and now serves more than 2,200 families per year. Employing innovative programs and resident support systems, Housing Catalyst offers critical tools and resources that families need while creating vibrant, sustainable communities throughout Fort Collins. Founded in 1971 with just one employee, Housing Catalyst now has more than 70 employees, an annual operating budget of over $27 million, and assets owned and managed totaling over $166 million. The organization’s primary sources of operating funding are the U.S. Department of Housing and Urban Development (Housing Choice Voucher pass-through funding), property rental income, real estate developer fees, and project -specific competitive public and private grants. Housing Catalyst does not directly receive any City of Fort Collins general funds. Situational Summary: Fort Collins has a population estimated to be 171,100. The city proper has a population density of 2,653 people per square mile (984/square kilometer). The Fort Collins-Loveland Metropolitan Statistical Area (MSA) has a population estimated to be 339,993. The rental market has tightened considerably, and rents continue to increase. The market currently has a vacancy rate of approximately 3%. The national economic condition continues to create challenges for both renters and rental property owners. It will continue to be important for Housing Catalyst to respond to the market conditions whenever possible. According to the 2015-2019 City of Fort Collins Affordable Housing Strategic Plan, “Over the course of the next 25 years, the long-term goal identified in this plan is to increase the amount of affordable housing units to 10% of the overall housing stock. That means that the amount of affordable housing units as a percentage of the overall housing stock must increase one percentage point every five years. By using the same assumptions as the short-term goal, this means that Fort Collins will have approximately 87,807 housing units by 2040. To reach the 10% goal, 8,781 of the overall housing units in Fort Collins must be affordable by 2040. This requires 5,706 affordable housing units to come online by 2040, which translates to an average of 228 units per year. What this means is that for every 5 -year plan between now and 2040, the City will have to increase the amount of affordable housing by one percentage point as a ratio to the overall housing stock. This would represent a historically high rate of affordable housing production.” Housing Catalyst Five-Year Agency Plan 2018-2022 Page 2 Housing Catalyst Entities: Housing Catalyst carries out its mission by managing eleven separate entities, including: 1. The City of Fort Collins Housing Authority doing business as Housing Catalyst 2. Larimer County Housing Authority (Intergovernmental Agreement) 3. Villages, Ltd. 501c3 (Management Agreement) 4. Housing Catalyst, LLC (Wholly owned LLC) 5. Wellington Housing Authority (Management Agreement) 6. Village on Elizabeth (Housing Tax Credit Partnership) 7. Village on Stanford (Housing Tax Credit Partnership) 8. Redtail Ponds Permanent Supportive Housing (Housing Tax Credit Partnership) 9. Village on Redwood (Housing Tax Credit Partnership 10. Village on Horsetooth (Housing Tax Credit Partnership) 11. Village on Shields (Housing Tax Credit Partnership) In addition, Housing Catalyst or its affiliated entity is a formal partner in the following housing developments: 1. Provincetowne, CARE Housing 2. Springfield Court, Mercy Housing 3. Legacy Senior Apartments, Cornerstone 4. Lakeview on the Rise, Pedcor (2019) Housing Catalyst also administers the Veterans Administration Supportive Housing (VASH) voucher program on behalf of HUD and the Veterans Administration in Weld County. Future Forecast: The instability of funding continually presents challenges for staff managing Housing Catalyst goals and budgets. The national economic conditions will continue to contribute to local housing challenges. Congressional appropriations are often uncertain when Housing Catalyst annual budgets are created and staff must rely on estimates based on Congressional actions and historic data to estimate annual subsidies. Continuing resolutions and sequestration have significantly impacted operations. Congress has been unwilling to pass meaningful reform legislation. Continuing to increase sources of revenue other than those dependent upon congressional appropriations will be crucial to the sustainability of Housing Catalyst’s current programs and future growth. To maintain an investment grade credit rating, Housing Catalyst must balance having a certain level of financial stability against its overall public purpose goals. Housing authorities with large portions of their income derived from federal subsidies are exposed to weak margins and a negative change in net assets to equity in any given year. In fiscal 2016, 61.45% of Housing Catalyst's revenues came from government sources, including HUD, grants, Housing Assistance Payments (HAP) and other federal agencies. Therefore, its revenue and Expenses Before Inter- est, Taxes, Depreciation and Amortization (EBITDA) are subject to changes in congressional appropriations. Housing Catalyst Five-Year Agency Plan 2018-2022 Page 3 HOUSING IS THE CATALYST for building strong communities Housing Catalyst Mission: Just as a house is built upon a solid foundation, Housing Catalyst is built upon its mission: To create vibrant, sustainable communities throughout Northern Colorado. Housing Catalyst Vision: Housing Catalyst is a Fort Collins, mission-driven real estate developer that designs, builds and serves communities with homes that are affordable in Northern Colorado. Holding ourselves to a higher standard, we’re reinventing how people access, experience and perceive affordable housing. Housing Catalyst Business Objective: To achieve this mission, all Housing Catalyst functions are operated with attention paid to a triple bottom line: • Maintaining the fiscal viability of the organization. • Achieving a social goal through the provision of affordable housing and supportive services. • Embracing environmental sustainability. Housing Catalyst Core Values: Throughout day-to-day operations, Housing Catalyst’s core values are prevalent: • Accountability • Compassion • Honesty • Teamwork • Fun Housing Catalyst Five-Year Agency Plan 2018-2022 Page 4 Housing Catalyst Guiding Principles for Asset Development and Asset Management: Quality Design We create places that: • Fit well within their neighborhood • Are attractive for our residents, our neighbors, and our community Resident Health & Resiliency We support residents’ health and resiliency by: • Choosing sites that are close to basic services and amenities, • Creating safe living environments • Reducing the cost of living • Providing opportunities for active living • Incorporating healthy building practices • Providing resident support services Positive Community Relationships We build trust and goodwill with our community partners, governmental agencies and official, neighborhoods, residents, and our funders. Further, we value peer to peer learning and build positive relationships with others in the affordable housing industry at large. Asset Life Cycle We focus on asset life cycle: • Including a sustainable income target mix • Lowering overall operating costs through utility savings • Selecting durable materials • Incorporating effective maintenance practices Environmental Stewardship We are responsible environmental stewards by: • Selecting properties that have good community connectivity • Reducing the demands on energy, water, waste, and the climate • Choosing environmentally responsible materials and services Housing Catalyst Five-Year Agency Plan 2018-2022 Page 5 STRATEGIC GOALS To achieve its vision and fulfill its mission, Housing Catalyst will focus its financial and human resources to accomplish the following five strategic goals: Goal 1: Preserve existing affordable housing Goal 2: Increase supply of affordable housing Goal 3: Empower and equip residents for stability and success Goal 4: Achieve business/organizational excellence Goal 5: Build community support for affordable housing Housing Catalyst Five-Year Agency Plan 2018-2022 Page 6 Preserve and enhance the existing property portfolio of Housing Catalyst and its affiliated and managed entities through excellence in property and asset management so that these proper ties are vibrant healthy communities for the residents and the neighborhoods in which they are located for many years to come. • Strategy 1: Operational Efficiency o Develop and implement operational efficiency goals with benchmark data in all areas of effective property management, including; net operating income, occupancy/vacancy, vacancy turn-times, gross potential rent, tenant accounts receivable, resident eligibility compliance, physical inspections, utility consumption, lease compliance legal actions and program integrity. • Strategy 2: High Standards for Physical Property Conditions o Develop and implement consistent, integrated, and enhanced efficiency and quality property standards/benchmarks to ensure that for all Housing Catalyst properties exceed basic livability, safety and sustainability goals. • Strategy 3: Sound Long-term Asset Plans o Develop comprehensive asset management plans for maintenance, rehab and redevelopment of Housing Catalyst’s properties. • Strategy 4: Resident Housing Stability and Resiliency o Support residents with the goal of housing stability and resiliency through a multitude of methods. o Minimize negative resident move-outs • Strategy 5: Strong Neighborhood Relationships o Support property and resident integration into existing neighborhoods. o Maintain and enhance strong relationships between Housing Catalyst, residents, and neighborhoods. Preserve and improve existing affordable housing portfolio through excellence in property management and asset management Housing Catalyst Five-Year Agency Plan 2018-2022 Page 7 Strategically expand the supply of affordable housing, supporting the City of Fort Collins net goal of 228 new affordable units per year. • Strategy 1: Build New Housing and Secure/Preserve Existing At Risk Properties o Strategically time the implementation of a 5-year schedule of acquisition/rehab and new construction projects. • Strategy 2: Build New Resources o Identify and collaborate with partners who can bring resources (capital, connections, subsidies) that are otherwise unavailable to Housing Catalyst. • Strategy 3: Value Great Design, the Environment, and Sense of Community o Approach new construction and substantial renovation with a focus on good design, environmental stewardship and the importance of a creating sense of place that supports vibrant engaged communities. • Strategy 4: Dispose of Obsolete/Unsustainable Models and Restructure Portfolio o Complete RAD Public Housing restructuring/replacement of all units. • Strategy 5: Maximize Housing Catalyst and Community Resources o Determine project size/scale/scope/density needed to maximize Housing Catalyst capital/equity input, in order to decrease reliance on local and federal gap funding (CDBG/HOME/Division of Housing, City general fund subsidies.) • Strategy 6: Maximize Rental Assistance o Effectively manage and maximize utilization of all housing assistance program funds. o Expand opportunities for voucher assistance participants to obtain quality housing in neighborhoods that meet their needs. o Pursue all opportunities to increase the supply of housing assistance vouchers, including those designated for special populations. o Improve outreach and communication with property owners throughout Larimer County to encourage participation in rent assistance programs and to increase quality rental options for voucher assistance participants. Increase supply of affordable housing Housing Catalyst Five-Year Agency Plan 2018-2022 Page 8 Recognizing that people often need more than a stable home to build a stable life, resident services are designed and provided to help people live to their full potential. • Strategy 1: Provide Support Services o Provide supportive services for vulnerable families and special populations focusing on trauma informed care and utilizing progressive engagement. • Strategy 2: Engage in Housing Access and Retention Strategies o Remove Housing Catalyst unintentional barriers to housing access. o Provide eviction prevention services which focus on harm reduction strategies and assisting families in complying with their lease. • Strategy 3: Promote and Guide Economic Self Sufficiency o Provide on-going support towards economic self-sufficiency through the JumpStart program focusing on education, training and employment. • Strategy 4: Create Vibrant Communities Through Engaged Residents o Provide opportunities that create a sense of resident pride and involvement through diverse community activities designed to bring people together. Empower and equip residents for stability and success Housing Catalyst Five-Year Agency Plan 2018-2022 Page 9 Achieve excellence in business operations, organizational financial health and overall viability through data-driven business operations in the areas of property management, accounting, finance, procurement, risk management, human resource management, infor mation technology, and strategic communications. • Strategy 1: Provide strong reporting and guidance tools o Provide strong financial reporting processes including standardized easily readable metrics which provide guidance to the organization’s leaders and support informed organizational financial decision making at all levels. • Strategy 2: Pursue national and international recognition of Housing Catalyst’s financial and operational excellence. o Annual recognition by Government Financial Officers Association (GFOA) Certificate of Excellence in Financial Reporting and GFOA Certificate of Excellence in Financial Budgeting. o Investment grade credit rating from Standard and Poors or other rating entity. • Strategy 3: Ensure strong systems with proper controls o Improve procurement systems including use of technology, processes and reporting of general purchasing, vendor management and contract administration, and internal control systems. • Strategy 4: Manage Risk o Coordinate and maintain comprehensive Insurance and Risk Management services. • Strategy 5: Maintain Strong Underlying Tech Tools o Utilize best practices in Information Technology including fully utilizing the robust data management systems currently in place. • Strategy 6: Attract and Retain Top Human Talent o Continue to support a market data-driven, best practice approach to employee recruitment, development and retention for an organizational structure and human capital that supports Housing Catalyst’s mission and goals (including pay/benefits/professional development and wellness.) Achieve excellence in business operations Housing Catalyst Five-Year Agency Plan 2018-2022 Page 10 Build support for housing as a key component of vibrant, sustainable communities through public information, engagement, and advocacy that promotes high quality affordable housing and supports the advancement of the people served by Housing Catalyst. • Strategy 1: Engage the Community o Engage the community in discussions on housing issues and solutions . Increase community interest, participation, and education by expanding the visibility of affordable housing and evidence around housing as a key component of a strong, sustainable region. • Strategy 2: Become the “Go To” o Become the ‘go to’ resource for information and advocacy efforts, and the leader of a broad coalition of partners. • Strategy 3: Lead the Community o Articulate and illustrate the agency’s role in local and national housing policy and development. • Strategy 4: Tell the Story o Strategic outreach, building on Housing Catalyst and Villages brands through communication, image, visibility, public affairs, and policy. • Strategy 5: Advocate o Advocate on behalf of the community for quality, affordable housing to meet the needs of its diverse population. • Strategy 6: Empower o Teach Housing Catalyst residents and program participants to advocate for their needs as lower income members of our community. Build Community Support for Affordable Housing ACTION ITEM To: Villages Ltd. Board of Commissioners From: Kristin Fritz, Chief Real Estate Officer Meeting Date: October 20, 2022 Action Item: Approval of VIL-RES-2022-10-01 Resolution to Authorize Acquisition of Remington Row Alignment to Strategic Plan: This resolution supports Goal 2: Increase the Supply of Affordable Housing and the Dispose of Obsolete/Unsustainable Models and Restructure Portfolio strategy by acquiring properties that can be purchased and operated sustainably and strategically. Background: Housing Catalyst, LLC entered into a Contract to Buy and Sell Real Estate dated May 5, 2022 to purchase Remington Row at 705, 711, and 715 Remington. The three buildings include 11 units consisting of 28 bedrooms and 28 bathrooms that are designed as pods and are leased by bedroom. The purchase contract will be assigned to Villages Ltd. upon Board approval of HC-RES-2022-10-02 and the property will be owned and operated by Villages, Ltd. Description: The opportunity to acquire a property like Remington Row is unique for Villages Ltd. Its location on Remington Street between Laurel Street and Plum Street is desirable for residents and efficient to operate as it is close to other Housing Catalyst properties, including Oak 140. The design of the property is distinctive, offering pod living where residents lease individual, private bedrooms and bathrooms and share kitchens and common area spaces. Two of the three buildings were built in 2014 and the other was renovated in 2015. Comprehensive due diligence has been conducted and no concerns have been found. The property is unrestricted and will operate as is while collecting information to determine its best future use. Investing in property acquisitions that can be operated more cost effectively moves Housing Catalyst directly toward restructuring its portfolio to reach its goal of increasing the supply of affordable housing. Fiscal Impact: The costs associated with the purchase of Remington Row total $3,920,000, and include the purchase price, Housing Catalyst overhead, due diligence costs, consultants, and funding a capital reserve and an operating reserve. The acquisition will be funded from Villages Ltd. unrestricted cash. Proceeds from the sale of 10 units in the Villages Ltd. portfolio, estimated at $2,500,000, will be used toward the acquisition of the 28 units at Remington Row. Recommendation: The Development Committee and Housing Catalyst staff recommend approval of VIL- RES-2022-10-01 Resolution to Authorize Acquisition of Remington Row. RESOLUTION NO. VIL-RES-2022-10-01 OF THE BOARD OF DIRECTORS OF THE VILLAGES, LTD. AUTHORIZING THE ACQUISITION OF REMINGTON ROW WHEREAS the Villages, Ltd. is a nonprofit corporation organized and existing under the laws of the State of Colorado (“the Villages”); WHEREAS the Villages is an affiliate of and managed by Housing Catalyst, a body corporate and politic organized and existing under the laws of the State of Colorado (“Housing Catalyst”); WHEREAS the mission of Housing Catalyst is to create vibrant, sustainable communities throughout Fort Collins by acquiring, constructing, rehabilitating, owning, and operating residential units for low and moderate income households; WHEREAS Housing Catalyst, LLC, is a limited liability company organized and existing under the laws of the State of Colorado (the “LLC”) and is a wholly owned subsidiary of Housing Catalyst; WHEREAS the purpose of both the Villages and the LLC is to facilitate the mission of Housing Catalyst; WHEREAS the LLC has entered into a Contract to Buy and Sell Real Estate dated May 5, 2022 (the “Contract”) pursuant to which the LLC has agreed to purchase and Remington Annex, LLC, a Colorado limited liability company has agreed to sell the real property commonly known as 705 - 715 Remington Street, Fort Collins, CO 80524 and legally described as Lot 1, Remington Row (the “Property”), which includes 11 rental units consisting of 28 bedrooms and 28 bathrooms for the purchase price of $3,550,000.00; WHEREAS the LLC desires to assign the Contract to the Villages; WHEREAS the Villages will own and operate the Property as affordable housing for low and moderate income households which furthers the mission of Housing Catalyst; and WHEREAS, the Board of Directors of the Villages has determined that it would be in the best interest of the Villages to purchase the Property pursuant to the terms of the Contract. NOW THEREFORE BE IT RESOLVED that the Villages shall be and is hereby authorized, empowered, and directed to purchase the Property for $3,550,000.00 pursuant to the terms of the Contract. AND BE IT FURTHER RESOLVED that the President, the Vice President, and the Secretary, or any one of them acting alone, be and are hereby authorized and directed, on behalf of the Villages to execute and deliver all agreements, instruments, certificates, and documents required to consummate the transaction. AND BE IT RESOLVED FURTHER that the foregoing resolutions shall continue in full force and effect until express written notice of their prospective rescission or modification. AND BE IT RESOLVED FURTHER that any and all transactions by or on behalf of the Villages in connection with the acquisition of the Property prior to the adoption of these Resolutions shall be and are hereby ratified, approved, and confirmed in all respects. RESOLVED AND PASSED at a regular meeting of the Board of Directors of the Villages, Ltd., held this 20th day of October, 2022. BY: _______________________________ Board President ATTEST: _________________________ Julie J. Brewen, Secretary ACTION ITEM To: Villages Ltd. Board of Commissioners From: Kristin Fritz, Chief Real Estate Officer Meeting Date: October 20, 2022 Action Item: Approval of VIL-RES-2022-10-02 Resolution to Sell 10 Units Alignment to Strategic Plan: This resolution supports Goal 2: Increase the Supply of Affordable Housing and the Dispose of Obsolete/Unsustainable Models and Restructure Portfolio strategy by selling small, scattered site properties and properties with intensive capital needs, and acquiring properties that can be purchased and operated sustainably and strategically. Background: Housing Catalyst has, over time, been pursuing several methods to reduce its scattered site portfolio that is expensive to operate and maintain and reduce its properties with extensive capital needs and leverage those resources into properties that can be operated more efficiently and sustainably. Description: Housing Catalyst owns single family homes at 327 N. Howes, 331 N. Howes, and 817 Cherry; a duplex at 813 Cherry; and a 5-unit building at 366 E. Mountain. These 10 units have extensive capital needs. In fact, a recent Capital needs Assessment conducted on 366 E. Mountain estimated a renovation cost of $41,223 per unit. Additionally, operating and managing small numbers of units in scattered sites is an inefficient and obsolete operational model. Selling these units and investing the proceeds in acquiring properties that can be operated more cost effectively moves Housing Catalyst directly toward restructuring its portfolio to reach its goal of increasing the supply of affordable housing. Fiscal Impact: The estimated proceeds from the sale of these 10 units is $2,500,000, which will be used toward the acquisition of the 28 units at Remington Row for $3,920,000 that will occur in late 2022. Selling scattered site properties and properties with intensive capital needs and using proceeds to purchase properties that Villages Ltd. can own and operate sustainably and strategically will have a positive long-term fiscal impact. Recommendation: The Development Committee and Housing Catalyst staff recommend approval of VIL- RES-2022-10-02 Resolution to Sell 10 Units. RESOLUTION NO. VIL-RES-2022-10-02 OF THE BOARD OF DIRECTORS OF THE VILLAGES, LTD. AUTHORIZING THE SALE OF 10 UNITS WHEREAS the Villages, Ltd. is a nonprofit corporation organized and existing under the laws of the State of Colorado (“the Villages”); WHEREAS the Villages is an affiliate of and managed by Housing Catalyst, a body corporate and politic organized and existing under the laws of the State of Colorado (“Housing Catalyst”); WHEREAS the mission of Housing Catalyst is to create vibrant, sustainable communities throughout Fort Collins by acquiring, constructing, rehabilitating, owning, and operating residential units for low and moderate income households; WHEREAS the purpose of the Villages is to facilitate the mission of Housing Catalyst; WHEREAS the Villages is the owner of the following described real properties (the “Properties”): a. 327 North Howes Street, Fort Collins, Colorado (single family residence with 2 bedrooms and 1 bath); b. 331 North Howes Street, Fort Collins, Colorado (single family residence with 1 bedroom and 1 bathroom); c. 813 Cherry Street, Fort Collins, Colorado (Duplex with 2 bedrooms and 1 bath in one unit and 3 bedrooms and 1 bath in the other unit); d. 817 Cherry Street, Fort Collins, Colorado (single family residence with 3 bedrooms and 1 bath); e. 366 East Mountain Avenue, Fort Collins, Colorado (5 Units with 1 bedroom and 1 bathroom in each unit). WHEREAS the Properties are dated and require significant rehabilitation and improvement; WHEREAS the total proceeds from the sale of the Properties are estimated to be $2,500,000.00 which would be used toward the acquisition of the real property commonly known as 705 - 715 Remington Street, Fort Collins, CO 80524 and legally described as Lot 1, Remington Row (the “Property”), which includes 11 rental units consisting of 28 bedrooms and 28 bathrooms for the purchase price of $3,550,000.00; WHEREAS selling the Properties would further the mission of Housing Catalyst and the Villages; WHEREAS, the Board of Directors of the Villages has determined that it would be in the best interest of the Villages to sell the Properties. NOW, THEREFORE, BE IT RESOLVED that the Villages shall be and is hereby authorized, empowered, and directed to sell the Properties at such price and on such terms as the Board of Directors may approve by subsequent resolution. AND BE IT FURTHER RESOLVED that the President, the Vice President, and the Secretary, or any one of them acting alone, be and are hereby authorized and directed, on behalf of the Villages to execute and deliver all agreements, instruments, certificates, and documents required to consummate the sale of the Properties. AND BE IT RESOLVED FURTHER that the foregoing resolutions shall continue in full force and effect until express written notice of their prospective rescission or modification. AND BE IT RESOLVED FURTHER that any and all transactions by or on behalf of the Villages in connection with the sale of the Properties prior to the adoption of these Resolutions shall be and are hereby ratified, approved, and confirmed in all respects. RESOLVED AND PASSED at a regular meeting of the Board of Directors of the Villages, Ltd., held this 20th day of October, 2022. BY: ______________________________ Board President ATTEST: _________________________ Julie J. Brewen, Secretary ACTION ITEM To: Villages Ltd. Board of Commissioners From: Kristin Fritz, Chief Real Estate Officer Meeting Date: October 20, 2022 Action Item: Approval of VIL-RES-2022-10-03 Resolution Authorizing Acquisition of 15 Public Housing Units Alignment to Strategic Plan: This resolution supports Goal 2: Increase the Supply of Affordable Housing and the Dispose of Obsolete/Unsustainable Models and Restructure Portfolio strategy by completing the disposition of all public housing through the Section 18 program and acquiring properties that can be purchased and operated sustainably and strategically. Background: Housing Catalyst received approval from HUD in July 2022 to dispose of its 48 remaining public housing units including the 15 units in one building at 2155 W. Plum. Not only has 2155 W. Plum suffered from decades of Congressional underfunding for the public housing program, but Housing Catalyst has also been constrained by HUD’s restrictions on using the financing methods a private owner would use to perform repairs and modernization. Description: Housing Catalyst’s Section 18 Disposition plan for 2155 W. Plum, which has been approved by the Board of Commissioners, includes transferring the units to Villages, Ltd., transitioning residents to voucher-based assistance, and using proceeds from the sale of other public housing units to Elevation Community Land Trust and other funding sources to renovate the property in 2023-2024. Implementation of the plan also requires transferring the units Villages, Ltd. as the entity that will own and operate the property when it is no longer public housing. Fiscal Impact: The cost of this acquisition of 15 units is $1. The acquisition by Villages Ltd. will have a positive long-term fiscal impact as it adds units to the portfolio for a nominal cost and allows the units to be operated in a more efficient and sustainable manner than was possible under the public housing program. Recommendation: The Development Committee and Housing Catalyst staff recommend approval of VIL- RES-2022-10-03 Resolution Authorizing Acquisition of 15 Public Housing Units. RESOLUTION NO. VIL-RES-2022-10-03 OF THE BOARD OF DIRECTORS OF THE VILLAGES, LTD. AUTHORIZING THE ACQUISITION OF 15 PUBLIC HOUSING UNITS WHEREAS the Villages, Ltd. is a nonprofit corporation organized and existing under the laws of the State of Colorado (“the Villages”); WHEREAS the Villages is an affiliate of and managed by Housing Catalyst, a body corporate and politic organized and existing under the laws of the State of Colorado (“Housing Catalyst”); WHEREAS the mission of Housing Catalyst is to create vibrant, sustainable communities throughout Fort Collins by acquiring, constructing, rehabilitating, owning, and operating residential units for low and moderate income households; WHEREAS the purpose of the Villages is to facilitate the mission of Housing Catalyst; WHEREAS Housing Catalyst is the owner of 15 public housing units located at 2155 West Plum Street, Fort Collins, Colorado (the “Public Housing Units”); WHEREAS the Public Housing Units were acquired using funds provided by the United States Department of Housing and Urban Development (“HUD”); WHEREAS Housing Catalyst is disposing of the Public Housing Units under the U.S. Department of Housing and Urban Development Section 18 program; WHEREAS the Villages is willing to acquire the Public Housing Units; WHEREAS upon sale of the Public Housing Units by Housing Catalyst to the Villages, HUD will release the Public Housing Units from the Declarations of Trust made by Housing Catalyst for the benefit of HUD. WHEREAS, the Board of Directors of the Villages has determined that it would be in the best interest of the Villages to acquire the Public Housing Units. NOW THEREFORE, BE IT RESOLVED that the Villages is hereby authorized to acquire the Public Housing Units for a purchase price of one dollar ($1.00). BE IT FURTHER RESOLVED that the President of the Villages is hereby authorized to execute such documents and instruments as may be necessary to acquire the Public Housing Units from Housing Catalyst. RESOLVED AND PASSED at a regular meeting of the Board of Directors of the Villages, Ltd., held this 20th day of October, 2022. BY:_______________________________ Board President ATTEST: _________________________ Julie J. Brewen, Secretary RESOLUTION VIL-RES-2022-10-04 OF THE VILLAGES LTD. GRANT TO FUND THE MISSION OF RESIDENT SERVICES Adoption of a resolution of Villages, Ltd. Board of Directors authorizing the issuance of a grant to Housing Catalyst for the purpose of funding the resident services mission; authorizing and directing the staff to execute any documents which are deemed necessary to carry out this grant. WHEREAS, Housing Catalyst has displayed need for funding to support the resident services activities and is requesting a $120,000 grant from Villages, Ltd. WHEREAS, the 2023 Villages, Ltd. budget contains significant assumptions, including a grant to Housing Catalyst in the amount of $120,000 to fund the mission of resident services and ensure that smaller or underserved properties have the ability to utilize these resources when needed. WHEREAS, the Board of Directors has reviewed and adopted the 2023 budget including the above-mentioned assumption. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF VILLAGES, LTD. that a grant is approved and authorized to be provided to Housing Catalyst in the amount of $120,000 to be paid in 12 equal installments during the 2023 calendar year. Passed and adopted this 20th day of October 2022 at a regular meeting of the Board of Directors of Villages, Ltd. BY: Cathy Mathis, Chairperson ATTEST: Julie J. Brewen, Secretary