RESOLUTION 16-005 RE PHA PLAN WITH SIGNIFICANT AMENDMENT_.PDF
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Housing Authority of Maricopa County Fiscal Year 2015 ‐2020 Agency Plan, Version 2 Annual Period 2015-2016 March 2016 Table of Contents Fiscal Year 2015-2020 Annual Agency Plan PHA Annual Plan HUD 50075 ..................................................................... 3 APPENDIX A Board Resolution & Certifications ........................................................... 50 APPENDIX B Capital Fund 50075.1 ................................................................................ 50 Capital Fund 50075.2 ................................................................................ APPENDIX C What is the Resident Advisory Board and Public Comments ....................................... 90 PHA Annual APPENDIX D Plan? Financial Audit........................................................................................... 96 The PHA Annual Plan is a APPENDIX E comprehensive guide to Grievance Procedures .............................................................................. 162 the Housing Authority of Maricopa County’s public housing agency APPENDIX F (PHA) policies, programs, Rental Assistance Demonstration (RAD) ................................................. 179 operations, and strategies for meeting local housing needs and APPENDIX G goals in the upcoming Conversions Summary (Significant Amendment)................................... 183 fiscal year. U.S. Department of Housing and Urban OMB No. 2577-0226 PHA 5-Year and Development Expires 4/30/2011 Annual Plan Office of Public and Indian Housing 1.0 PHA Information PHA Name: Housing Authority of Maricopa County PHA Code: AZ009 PHA Type: Small High Performing Standard HCV (Section 8) PHA Fiscal Year Beginning: (MM/YYYY): 07/2015 2.0 Inventory (based on ACC units at time of FY beginning in 1.0 above) Number of PH units: 904 Number of HCV units: 1592 3.0 Submission Type 5-Year and Annual Plan Annual Plan Only 5-Year Plan Only 4.0 PHA Consortia PHA Consortia: (Check box if submitting a joint Plan and complete table below.) No. of Units in PHA Program(s) Included in Programs Not in the Each Program Participating PHAs the Consortia Consortia Code PH HCV PHA 1: PHA 2: PHA 3: 5.0 5-Year Plan. Complete items 5.1 and 5.2 only at 5-Year Plan update. 1 5.1 Mission. State the PHA’s Mission for serving the needs of low-income, very low-income, and extremely low income families in the PHA’s jurisdiction for the next five years. The mission of the Housing Authority of Maricopa County is to improve the quality of life of families and strengthen communities by developing and sustaining affordable housing programs; and to become a leading housing authority by exemplifying best practices, offering innovative affordable housing programs, and expanding accessibility throughout Maricopa County. 2 5.2 Goals and Objectives. Identify the PHA’s quantifiable goals and objectives that will enable the PHA to serve the needs of low-income and very low-income, and extremely low-income families for the next five years. Include a report on the progress the PHA has made in meeting the goals and objectives described in the previous 5-Year Plan. Goal: Increase opportunities for our residents to move beyond their housing needs towards self-sufficiency. Work with partners to increase services in support of customer personal development, education, and employability. Explore whether to apply for Move to Work. Focus on delivering self-sufficiency programming that enables HAMC to be an incubator of education and economic improvement for HAMC families. Goal: Increase housing options in underserved communities. Serve in the County’s efforts to end chronic homelessness (Bridge program, HCV attrition, PH point system). Explore options for mixed income communities throughout Maricopa County jurisdiction. Investigate the availability of VASH voucher funding or the viability of establishing a veterans housing program. Investigate repositioning and repurposing existing portfolio for supportive or affordable housing options to include the establishment of an affiliate nonprofit. Explore creating a home ownership program. Create and implement redevelopment strategies for HAMC portfolio to include divestiture. Apply for all opportunities to increase the overall size of the Housing Choice Voucher program. Diversify affordable housing options (deconcentration). Work with tax credit properties in Maricopa County to extend a marketing invitation to HAMC voucher holders. Explore smoke free options for HAMC properties. Goal: Promote employee growth and build organizational capacity in support of the agency becoming a High Performer. Create an “Idea Factory” system of employee feedback, place to get info, share info, innovation, and positive recognition. Cultivate partnerships with community agencies and other industry organizations as a resource for information and industry trends. Maintain the financial resources necessary to support and grow HAMC operations and programs. Prepare HAMC workforce to be competitive in the housing industry. Goal: Emphasize organizational performance and results by being responsive to our customers. Establish property maintenance standards for consistency throughout HAMC- owned and managed properties. Provide customers additional forums for allowing HAMC to respond to their concerns and needs. Improve customer access to HAMC programs and people. Develop a comprehensive customer orientation process to discern customer education, economic, employment, and family needs in order to match service response. 3 PHA Plan Update. (a) Identify all PHA Plan elements that have been revised by the PHA since its last Annual Plan submission: Elements of the Housing Choice Voucher Administrative Plan and the Admissions and Continued Occupancy Policy for Public 6.0 Housing have been amended and are included with this Annual Plan submission. 1. HAMC Goals and Objectives (refer to Section 5.2 of this document). 2. Public Housing Admissions and Continued Occupancy Policies related to eligibility, selection and admissions including deconcentration and waitlist procedures (see below section). 3. The HCV Program updated its Administrative Plan as it relates to VAWA, Project Based Vouchers and online applications (see below section). 4. The HCV Program updated its Payment Standards, specifically the 3 bedroom payment standard, as required under CFR24 982.503. The PHA must adopt a payment standard amount for each unit size, for each FMR area, in the PHA’s jurisdiction (see below section). 5. Received conditional approval from HUD to convert the remaining public housing units to RAD. Public Housing Admissions and Continued Occupancy Policy Summary of Changes: Chap Summary of Changes Current Effective date of change 5/1/2015 Sect 3-1 Applying for Assistance Applications will be accepted at The application process will involve two phases: B the following locations: The first is the “onlineapplication for admission.” Revised how applications will Main Office - 8910 N. 78th Ave. This first phase is to determine; which Public be accepted (online Peoria, AZ 85345 Housing Waitlist the family wishes to apply for, the applications). Coffelt Office - 1510 South19th family’s eligibility, and placement on the waitlist. Drive, Phoenix The application will be electronically dated, time- Restructured the properties Mesa Office - 710 West 8th stamped. covered in each waitlist. Avenue, Mesa, AZ Eliminated the Coffelt Public Avondale Office – 1103 N. 6th Housing wait list. Created site Street #106, Avondale, AZ based waitlists for Rose Surprise Office– 12976 Terrace and Maricopa Cottonwood, Surprise, AZ Revitalization. Peoria Office – 10950 N. 87th Ave, Peoria, AZ Hand or type written, or by internet when available. 3.1- Restructured the properties Coffelt Lamoreaux Homes-1510 Mesa Area- properties are located at the following B covered in each waitlist. S. 19th Drive, Phoenix locations Eliminated the Coffelt Public Coffelt consists of 1, 2, 3 and 4 Clare Feldstadt (Site 1) 710 W. 8th Ave, Mesa AZ Housing waitlist. Created site bedroom units consisting of all 2 bedroom units based waitlists for Rose Mesa Area- properties are Clare Feldstadt (Site 2) E. University consisting of 1 Terrace and Maricopa located at the following and 3 bedroom units Revitalization. locations Father Fidelis Kuban in Guadalupe consisting of 1, Clare Feldstadt (Site 1) 710 W. 2, 3, & 4 bedroom units 8th Ave, Mesa consisting of all 2 Avondale Area – Properties are located in the bedroom units Avondale and Buckeye Clare Feldstadt ( Site 2) E. Norton Circle in Avondale has 1, 2, 3 and 4 University consisting of 1 and 3 bedroom units bedroom units 4 Father Fidelis Kuban in Watson Homes, Buckeye has 1, 2, 3 & 4 bedroom Guadalupe consisting of 1, 2, 3, units and 4 bedroom units Surprise Area – consists of properties located in Maricopa Revitalization the Northwest Valley consisting of 13 Single Family Casa Bonita located at 12976 W. Cottonwood in Homes throughout Mesa Surprise consists of 2, 3, and 4 bedroom units Avondale Area – Properties are Paradise Homes in Surprise has 1 and 2 bedroom located in the Southwest Valley units Madison Heights in Avondale Flora Statler in El Mirage has 1, 2, 3, and 4 bedroom has 1, 2, 3, 4, and 5 bedroom units units Villa Monterosa in El Mirage has 1, 2, 3, and 4 Norton Circle in Avondale has 1, bedroom units 2, 3, and 4 bedroom units West Valley Single Family Homes located Rose Terrace Apartments, 525 throughout various localities in the west valley E. Harrison, 20 one bedroom Peoria - Tolleson Area – All units are located with units for the elderly, in Peoria and Tolleson handicapped or disabled and 2, Parkview Estates – 10950 N. 87th Ave, Peoria 3, 4, and 5 bedroom totaling 20 consists of 1 bedroom units for the elderly, family units handicapped or disabled. Watson Homes, Buckeye has 1, John Hammond Homes at 85th & Washington, 2, 3, and 4 bedroom units Peoria consists of 2, 3, and 4 bedroom units John Hollar and Baden Homes Varney Homes on 82nd Drive, Peoria, consist of 2 in Tolleson: 1, 2, 3, and 4 and 3 bedroom units bedroom units Peoria scattered site houses consist of 25 – 3 and 4 West Valley Single family bedroom single family homes homes – 2, 3, and 4 bedroom John Hollar and Baden Homes in Tolleson: 1, 2, 3, houses throughout the West and 4 bedroom units Valley Rose Terrace Apts. 525 E. Harrison Drive, Surprise Area – consists of Avondale, Arizona properties located in the 20 one bedroom Public Housing apartments are for Northwest Valley the elderly, handicapped or disabled. Eighty-eight Casa Bonita located at 12976 of the 2, 3, 4, and 5 bedroom apartments are W. Cottonwood in Surprise subsidized through the Public Housing or Project consists of 2, 3, and 4 bedroom Based Voucher programs units Maricopa Revitalization Partnership, Mesa, Paradise Homes in Surprise has Arizona 1 and 2 bedroom units Single family homes located throughout the City of Flora Statler in El Mirage has 1, Mesa. Thirty-five subsidized 2, 3 and 4 bedroom 2, 3, and 4 bedroom units homes available through Public Housing and Villa Monterosa in El Mirage has Project Based Voucher programs. 1, 2, 3, and 4 bedroom units Northwest Valley Single Family Homes located throughout the Northwest Area. Peoria Area – All units are located within the City of Peoria Parkview Estates – 10950 N. 87th Ave, Peoria consists of one bedroom units for the elderly, handicapped or disabled. John Hammond Homes at 85th & Washington consists of 2, 3, and 4 bedroom units 5 Varney Homes on 82nd Drive consist of 2 and 3 bedroom units Peoria scattered site houses consist of 25 – 3 and 4 bedroom single family homes 3- Changed to reference online The application is taken in Applications are accepted online only at 1.C. applications person or by mail and the data www.maricopahousing.org. is entered into the computer. Added references to email Respond to mailings …respond to mailings and/or emails Misdirected mail Misdirected mail and/or email 3- Changed reference to written If after a review of the Upon successful submission of the electronic 1.D notification of preliminary application the family is application, the applicant will receive a eligibility to electronic determined to be preliminarily confirmation email. confirmation eligible, they will be notified in writing (in an accessible format upon request, as a reasonable accommodation). This written notification of preliminary eligibility will be mailed to the applicant by first class mail or distributed to the applicant in the manner requested as a specific accommodation. 3- Removed reference to the The application-taking facility The application process must be fully accessible, or 1.G. application taking facility and The application process HAMC must provide an alternate approach that must be fully accessible, or provides equal access to the application process. HAMC must provide an alternate approach that provides equal access to the application process. 3- Removed reference to review HAMC must review each N/A 1.H. of each application completed application received and make a preliminary assessment of the family’s eligibility. 3- Changed reference to not If HAMC can determine from If HAMC can determine from the information 1.H. being placed on the waitlist the information provided that a provided that a family is ineligible, the family will to being removed from the family is ineligible, the family be removed from the waitlist. Where a family is waitlist and removed will not be placed on the determined to be ineligible, HAMC will send reference to 30 days from waiting list. Where a family is written notification of the ineligibility receipt of application determined to be ineligible, determination. HAMC will send written notification of the ineligibility determination within 30 calendar days of receiving a completed application. 4- Removed the reference to The dates, times, and the The dates, times, and how families may apply 1.B locations locations where families may apply 6 4- Removed reference to the Providing application forms to Providing application information to other public 1.D. application form other public and private and private agencies that serve the low income agencies that serve the low population income population 4-1.F Added reference to updates The waitlist will be updated The waitlist will be updated by mail and/or by by email. by mail as needed to ensure email as needed to ensure that all applicants and that all applicants and applicant applicant information is current and timely information is current and timely The mailing will be used… The mailing and/or email will be used… No response email will be maintained as record. 7 Housing Choice Voucher Program Administrative Plan Summary of Changes: Chap Summary of Changes Current Effective date of change Sect 1.14 Violence Against Women Act Section 1.14 of the HCV July 2014 Administrative Plan has been revised in a manner consistent with the provisions set forth in 24CFR 5.2005 and/or 24CFR 5.2009; subsequent guidance issued by the U. S. Department of Housing and Urban Development and HUD Field Office recommendations. 3.2 Opening and Closing the Section 3.2 of the HCV June 2014 Waitlist Administrative Plan has been Revised how applications will revised to state that all persons be accepted (online who wish to apply for any of the applications). HCV housing assistance programs must complete an online application as directed, within the time period specified in the public notice. HAMC will coordinate the online application process with community service agencies to assure access to computers for all individuals wishing to apply for housing assistance. Special assistance will be provided to assist persons with disabilities that request a reasonable accommodation to complete the online application. 21 Project Based Voucher Section 21 of the HCV January 2015 Program Administrative Plan has been revised in a manner consistent with the provisions set forth in the Final Rule of June 25, 2014, 24CFR Part 983; subsequent guidance notice issued by the U. S. Department of Housing and Urban Development such as PIH Notice 2011‐54; and HUD Field Office recommendations. Payment Standards The Public Housing Authority January 2015 (PHA) must adopt a payment standard schedule that establishes voucher payment standard amounts for each unit size, for each FMR area, in the PHA’s jurisdiction. 8 3.4 Local Preferences Section 3.4 of the HCV TBD and upon Board approval Administrative Plan will be revised to include a local preference for homeless which HAMC will utilize attrition to house homeless families in effort to aid in the County’s efforts to end chronic homelessness. 3.6 Reporting Changes and Section 3.6 of the HCV TBD and upon Board approval Updating the Waitlist Administrative Plan will be revised to state that the waitlist will be updated by mail and/or by email as needed to ensure that all applicants and applicant information is current and timely 4.8 Utility Allowance Section 4.8 of the HCV TBD and upon Board approval Administrative Plan will be revised to meet the new regulation which states the utility allowance used to calculate gross rent will be the voucher size not the unit size. 9 Housing Quality Standards Section 9 of the HCV TBD and upon Board approval and Inspections Administrative Plan will be revised to permit the option to inspect assisted dwelling units during the term of a housing assistance payment (HAP) biannually instead of annually. 16.2 Program Fraud Section 16.2 of the HCV TBD and upon Board approval Administrative Plan will be revised to that any repeat offense of unreported income or other lack of reporting which creates an overpayment of assistance will result in immediate termination of assistance. Delay in processing of timely reported information will result in a payback agreement which will be equal to the amount of time it took HAMC staff to process the change. Additional policies to be HAMC intends to research and TBD and upon Board approval visited revisit policies within its HCV Administrative Plan in regards to Portability Briefings, defining a separate family, occupancy as it relates to Live-In-Aide, adding members to a household, restricting moves and 9 portability with zero income. HAMC current policies are vague as they relate to these items. RAD Conversion of Remaining Public Housing Portfolio: There will be no change in the policies governing eligibility, admission, selection and occupancy of units after the project has been converted through RAD other than the following: 1) Tenants and applicant must be a very low-income family, which is defined as family whose annual income does not exceed 50% of the area median income; and 2) Under the RAD program, HUD has waived certain statutory and regulatory provisions of the Project-Based Rental Assistance Program (PBRA). The following changes are included with the Coffelt-Lamoreaux and Madison/Norton/Watson and portfolio conversion: No Re-screening of Tenants upon Conversion. Pursuant to the RAD statute, at conversion, current households are not subject to rescreening, income eligibility, or income targeting provisions. As a result, current households will be grandfathered for conditions that occurred prior to conversion but will be subject to any ongoing eligibility requirements for actions that occur after conversion. For example, a unit with a household that was over-income at time of conversion would continue to be treated as an assisted unit. Therefore, the first clause of section 8(c)(4) of the Act and 24 CFR 880.603(b), concerning eligibility and selection of tenants, will not apply for current households. Once that remaining household moves out, the unit must be leased to an eligible family. Right to Return. Any residents who may need to be temporarily relocated to facilitate rehabilitation or construction will have a right to return to the development once rehabilitation or construction is completed. Termination Notification. HUD is incorporating additional termination notification requirements to comply with Section 6 of the Act for public housing projects that are converting assistance under RAD, that supplement notification requirements in regulations at 24 CFR 880.607 and the Multifamily HUD Model Leases. Termination of Assistance. The termination procedure for RAD conversions to PBRA will additionally require that the HAMC (as owners) provide adequate written notice of termination of the lease which shall not be less than: o a reasonable period of time, but may not exceed 30 days: o If the health or safety of other tenants, owner employees, or people residing in the immediate vicinity of the premises that is threatened; or o In the event of any drug-related or violent criminal activity or any felony conviction; or o 14 days in the case of nonpayment of rent. Termination of Assistance. In all other cases, the requirements at 24 CFR 880.603, the Multifamily HUD Model Lease, and any other HUD multifamily administrative guidance shall apply. 10 Establishment of Waitlist. In establishing the waitlist for the converted project, the HAMC shall utilize the project-specific waitlist that existed at the time of conversion. If a project-specific waiting list for the project does not exist, the HAMC shall establish a waiting list in accordance 24 CFR 903.7(b)(2)(ii)-(iv) to ensure that applicants on the HAMC’s public housing community-wide waitlist have been offered placement on the converted project’s initial waitlist. For the purpose of establish the initial waitlist, the HAMC has the discretion to determine the most appropriate means of informing applicants on the public housing waitlist given the number of applicants, PHA resources, and community characteristics of the proposed conversion under RAD. Such activities should be pursuant to the HAMC’s policies for waitlist management, including the obligation to affirmatively further fair housing. The HAMC may consider contacting every applicant on the public housing waitlist via direct mailing; advertising the availability of housing to the population that is less likely to apply, both minority and non-minority groups, through various forms of media (e.g., radio stations, posters, newspapers) within the marketing area; informing local non-profit entities and advocacy groups (i.e., disability rights groups); and conducting other outreach as appropriate. Applicants on the agency’s centralized public housing waitlist who wish to be placed on the newly-established waitlist are done so in accordance with the date and time of their original application to the centralized public housing waitlist. Any activities to contact applicants on the public housing waitlist must be conducted accordance with the requirements for effective communications with persons with disabilities at 24 CFR 8.6 and the obligation to provide meaningful access for persons with limited English proficiency (LEP). To implement this provision, HUD will not apply 24 CFR 880.603, regarding selection and admission of assisted tenants. After the initial waitlist has been established, the HAMC shall administer its waitlist for the converted project in accordance with 24 CFR 880.603. The Coffelt-Lamoreaux conversion will have no transfer of assistance or assisted units to another site. The Madison/Norton/HM Watson units will be consolidated onto one site. The Norton and HM Watson units will be transferred to the Madison location. All households will be selected to transfer to the Madison site. All three properties are currently in one HAMC [Avondale] region based waitlist; therefore no changes will occur other than it will become a project-based waitlist only. 11 2. Financial Resources: Planned Sources and Uses. Sources Planned $ Planned Uses 1. Federal Grants a. Public Housing Operating Fund 4,000,000 Property operations (estimated based on submission of 52722/52753) b. Public Housing Capital Fund: Modernization of public housing units, operations and management. AZ20P009501-14 799,946 AZ20P009501-13 181,128 AZ20P009501-12 61,460 AZ20P009501-15 1,084,610 c. Annual Contributions for Housing 11,676,557 Housing and Utility Voucher payments for the HCV Choice Voucher Program – Based Assistance – Program, Subsidy Port-Outs and S8 Project based vouchers. d. Annual Contributions for Housing 755,328 Operating/Administrative Expenses Choice Voucher Program – Based Assistance - Administration e.. FSS Family Self Sufficiency 34,212 Grant award for combined Public Housing and Housing Choice Voucher FSS program. 6.0 f. (ROSS) Resident Opportunity & Self 246,000 Resident Self Sufficiency Sufficiency 2. Prior Year Federal Grants 3. Other Income Non Federal Sources a. Tenant Rents 1,318,553 Rental to fund operations and maintenance for Public Housing properties b. Arizona Community Foundation 150,000 $75,000 Renovation of Public Housing units at Coffelt- Lamoreaux Homes $75,000 Redevelopment of Madison Heights. c. Gila River Indian Community 342,252 Pending application for the redevelopment at Coffelt- Lamoreaux Homes d. Restricted Net Assets from Sales RAD conversions Proceeds 1,105,855 e. Public Housing Reserves 2,000,000 RAD conversions f. FHLB/AHP 1,500,000 Pending application for redevelopment of Coffelt- Lamoreaux Homes Total Resources 25,255,901 12 3. Rent Determination. The Housing Choice Voucher program analyzed its payment standards when HUD published the Fair Market Rents (FMR) effective October 1, 2014 and concluded that while HAMC was within the allowable parameters of 90% - 110% of the FMR, it needed to increase the standards for 3 bedroom homes. Effective January 1, 2015, the HAMC Board of Commissioners established the 2015 payment standards as follows: Bedroom Size 2015 Fair Market Rents 2015 Payment Standards 0 $582.00 $619.00 1 $735.00 $721.00 2 $908.00 $870.00 3 $1,338.00 $1,311.00 4 $1,563.00 $1,450.00 5 $1,797.00 $1,650.00 6 $2,032.00 $1,900.00 Waivers were granted to PHAs pursuant to Public Housing and Housing Choice Voucher Programs — Temporary Compliance Assistance (Notice PIH 2013–03 (as extended by Notice PIH 2013–26) that permitted adoption of alternative requirements pursuant to the Temporary Compliance Assistance Notice. HAMC has requested a waiver in order to continue to operate under such alternative requirements. HAMC will continue to allow 1) household self- certification of assets of less than $5000; 2) streamlined annual reexaminations for elderly families and disabled families on fixed incomes; and 3) establish a payment standard of not more than 120% of the FMR as a reasonable accommodation. 6.0 HAMC Public Housing had no change in rent determination. Public Housing uses an income-based rent calculation to determine each family’s total tenant payment (TTP). Then, if the family is occupying a unit that has tenant paid utilities, the utility allowance is subtracted from the TTP. The result of this calculation, if a positive number, is the tenant rent. If the TTP is less than the utility allowance, the result of this calculation is a negative number, and is called the utility reimbursement, is paid directly to the utility company on behalf of the household. HUD regulations specify the formula for calculating the total tenant payment (TTP) for a tenant family. TTP is the highest of the following amounts, rounded to the nearest dollar: -30% of the family’s monthly adjusted gross income; - 10 % of the family’s monthly gross income; -A minimum rent of $50.00. (HAMC has the authority to suspend and exempt families from the minimum rent when a financial hardship exists). In addition, HAMC offers each family a choice of paying a flat rent or the income based rent at move in and at each annual recertification. A household choosing a flat rent will complete a full re-certification once every three years. The flat rent structure was modified, approved and implemented during 2014 per PIH Notice 2014-12. All Public Housing residents are required to report changes in income (and family composition) at the time the change occurs and an interim certification will be conducted. Interim certifications will also be conducted upon request by the resident. Changes that will decrease the tenant rents will go into effect on the first of the month following the verification of the change and those changes creating an increase in the tenant’s rent will go into effect on the first of the month following a 30 day notice of increase. Phase-in of Tenant Rent Increases in the RAD Conversion. If a tenant’s monthly rent increases by more than the greater of 10 percent or $25 purely as a result of the conversion, the rent increase will be phased in over 3 years, which a PHA may extend to 5 years. To implement this provision, HUD is waiving Section 3(a) (1) of the Act, as well as 24 CFR 880.201 (definition “total tenant payment”) and 983.353(b) (1), to the limited extent necessary to allow for the phase-in of tenant rent increases. 13 Resident Participating and Funding under a RAD Conversion. Residents of covered projects converting assistance to PBRAs through RAD, will have the right to establish and operate a resident organization in accordance with 24 CFR Part 245 (Tenant Participation in Multifamily Housing Projects). Tenants of a multifamily housing project covered under 24 CFR 245.10 have the right to create and operate a tenant organization. Such organization addresses issues related to their living environment, which may include the terms and conditions of their tenancy, as well as activities related to housing and community development. In accordance with Attachment 1B, residents will be eligible for resident participation funding. 6.0 4. Operation & Management. The goal for each HAMC managed property is to: Maintain the property in excellent condition Keep expenses within the operating budget Explore opportunities for revenue growth or expense reduction Assess and address capital needs proactively Comply with all Federal, State, and local laws and regulations Provide excellent customer service to all residents Maintenance. HAMC emphasizes the importance of maintaining control of the maintenance work by performing scheduled routine and preventive work. By doing so, the Authority will decrease on-demand work and maintain the property in a manner that will keep and attract good tenants. In order to allow its staff members to perform to the best of their abilities, HAMC recognizes the importance of providing the staff with opportunities to refine technical skills, increase and expand craft skills, and learn new procedures. Maintenance personnel attended UPCS training, HVAC trouble-shooting and applicance repair training. The work order priority system ensures that the most important maintenance work is done at a time it can be preformed most cost-effectively. Minimizing vacancy loss is part of the cost-effectiveness caclulation. The maintenance priorities of HAMC are the following: Emergency Repairs, Resident Request, Unit Turnover and Inspections. Miscellaneous. Emergency repairs are repair needs which threaten the life, health, or safety of a resident and need to be responded to within 24 hours. Resident requests are very important to HAMC as residents can be the eyes and ears for the staff, informing them of smaller problems before they become larger problems. Providing excellent customer service will improve the living quality for residents. The maintenance procedure for reoccupying vacant units relies on the prompt notification by management of the vacancy, fast and accurate inspection of the unit, ready availability of workers and materials, and good communication 14 with those responsible for leasing the unit. The Housing Manager has the authority to create special teams for vacancy turnaround or to hire contractors when it is necessary to meet the Authority goals to increase occupancy. Inspections. HAMC conducts different types of inspections throughout the year. The purpose of inspections is to ensure housing is decent, safe, sanitary, and in good repair for residents by identifying necessary corrections before problems become severe, dangerous or costly. There are basically two types of inspections, annual and on-going. Annual inspections - are completed every year for all units. These inspections are often combined with housekeeping inspections and may be done by management, maintenance or both. Deficiencies are corrected either at the time of inspection or through the written work order system. On-going inspections- include preventative maintenance, vacancies, move in and move out inspections, property inspections and any other special inspection. Preventative maintenance inspections- The purpose of the scheduled maintenance program is to allow the Authority to anticipate maintenance requirements and make sure the Authority can address them in the most cost-effective manner. The preventative maintenance program focuses on the major systems that keep the properties operating. These systems include heating and cooling, electrical, life safety and plumbing. Routine inspections of grounds, common areas and other equipment are included. Vacancy inspections -Insures the unit repairs are in compliance to the Uniform Physical Condition Standards set by HUD. Move in inspections - Conducted by staff members and the new resident. The resident is required to sign the inspection form certifying the condition of the unit at move-in. Move out inspections - Conducted at the time the resident vacates the units. Residents are encouraged to attend this inspection. The move in inspection is compared to the move out inspection in order to assess any damages that can be charged to the vacating tenant. Miscellaneous inspections - Other inspections not categorized above. These can include quality control inspections, HUD inspections, lease enforcement and contract maintenance work completion. Pest Control - HAMC makes every effort to provide a healthy and pest-free environment for its residents and contracts with a licensed extermination companies to perform pest control services utilizing an integrated pest control system.. Special attention is paid to cockroaches as this is the most common infestation. Generally, HAMC provides for quarterly pest control. However, special circumstances may occur that may require more frequent treatments. These situations are handled on a case by case basis and may include resident housekeeping training in addition to additional pest control treatments. Bed bugs are treated with equal importance. Eradication entails specific treatments that must be followed closely and with the cooperation of the resident. Residents are also counseled on preventative measures. Resident cooperation with the extermination plan is essential. All apartments in a building must be treated for the plan to be effective. Residents are given information about the extermination program and housekeeping standards at the time of move-in. All residents are informed at least 48 hours in advance of the treatment. The notification is in writing and includes instructions that describe how to prepare the unit for treatment if necessary. Waitlists: HAMC maintains site based waitlists. The use of site-based waitlists was originally approved by HUD in 1992 due the size of HAMC’s jurisdiction (9,226 square miles) and distance between the public housing developments which can be from 2 miles to 65 miles. The various waitlists were reviewed and modified due to RAD conversions of the Public Housing inventory. The waitlist breakdowns are as follows: Mesa Area- properties are located at the following locations Clare Feldstadt (Site 1) 710 W. 8th Ave, Mesa consisting of all 2 bedrooms Clare Feldstadt ( Site 2) E. University consisting of 1 and 3 bedroom units Father Fidelis Kuban in Guadalupe consisting of 1, 2, 3, & 4 bedroom units Maricopa Revitalization: Thirty-five single family Low Income Housing Tax Credit homes located throughout Mesa with 13 units of Public Housing subsidy and 22 units of Project Based Vouchers. Avondale Area – Properties are located in the Southwest Valley and are currently under a RAD conversion 15 Madison Heights in Avondale has 1, 2, 3, 4 and 5 bedroom apartments Norton Circle in Avondale has 1, 2, 3 and 4 bedroom units Watson Homes, Buckeye has 1, 2, 3 & 4 bedroom units Rose Terrace I & II Apartments, Avondale. A 120 unit mixed finance property with 20 one bedroom units for the elderly, handicapped or disabled and 2, 3, 4 and 5 bedroom family units. The property has 40 units with Public Housing subsidy and 68 Project Based Vouchers. Surprise Area – Consists of properties located in the Northwest Valley. Casa Bonita in Surprise consists of 2, 3, and 4 bedroom apartments Paradise Homes in Surprise has 1 and 2 bedroom units Flora Statler in El Mirage has 1, 2, 3 and 4 bedroom apartments Villa Monterosa in El Mirage has 1, 2, 3 and 4 bedroom units West Valley Single Family Homes – 2, 3 & 4 bedroom homes located throughout the west valley. Peoria – Tolleson Area –Units are located within Peoria and Tolleson. Parkview Estates – 10950 N. 87th Ave, Peoria consists of one bedroom apartments for the elderly, handicapped or disabled John Hammond Homes at 85th & Washington consists of 2, 3 and four bedroom units Varney Homes on 82nd Drive consist of 2 and 3 bedroom units Peoria scattered site houses consist of 25 – 3 and 4 bedroom single family homes John Hollar and Baden Homes in Tolleson: 1, 2, 3 and 4 bedroom units Project Based Vouchers –HAP agreements are in place Rose Terrace I has 58 PBVs and Rose Terrace II has 10 PBVs. Maricopa Revitalization will be receiving 22 PBVs. All of these units are income and rent restricted under the low income housing tax credit program. HAMC will be administering a project based voucher program at Apache ASL Trails for low income residents who are deaf and hard of hearing and other persons with disabilities. The feasibility of establishing an online system for our residents to pay their monthly rent and/or other charges will be researched to create another avenue for residents to pay rent. HAMC will be considering the purchase of an additional lot adjacent to the main office in order to provide additional parking and potential storage facility. HAMC may participate in the State’s initiative called the Bridge Subsidy Program, a housing initiative to expand the supply of Permanent Supportive Housing (PSH) in Arizona for individuals with serious mental illness enrolled in the public behavioral health system. 16 5. Grievance Procedures. Grievance procedures for both the Public Housing and Housing Choice Voucher programs can be found in Appendix E. With respect to units converted under the RAD Program, the grievance procedures are expanded in accordance to the RAD Notice referenced and are further detailed in Appendix F. 6.0 17 6. Designated Housing for Elderly and Disabled Families. HAMC currently manages Parkview Estates. This is a 45 unit property is for the elderly, handicapped and disabled. HAMC will review other sites and/or locations for possible designation as we progress through the RAD conversions of the Public Housing inventory. 6.0 18 7. Community Service and Self-Sufficiency. HAMC supports an FSS program for both the Housing Choice Voucher program and Public Housing. Partnerships with local non-profit agencies and Maricopa County Human Services Department have increased the resources available to our residents. Goal setting is a part of the FSS program requirement. Residents and clients have been able to improve their credit scores, obtain GED certificates, attend college, earn workforce/technology certificates, increase wage based incomes and reduce reliance on welfare assistance. The HAMC continues to work with various social service agencies to provide self- sufficiency supportive services including job training and skills development. Specifically, HAMC’s ROSSSC Program service partnerships and other community partnership efforts include CPLC First Things First Parenting AZ, Money Management International, ASU College of Health and Innovation, Maricopa County SAIL Program, New Life Domestic Violence Prevention, Maricopa County Workforce Connection, U of A Cooperative Extension Nutrition and 4-H Youth services, Greater Phoenix Urban League and the Maricopa County Community College services system. Each HAMC office has informational handouts and referrals to help the residents find resources based on their needs. Each HAMC office has informational handouts and referrals to help the residents find resources based on their needs. With respect to units converted under the RAD Program, Public Housing Family Self-Sufficiency (PH FSS) Program in a RAD Conversion. Current PH FSS participants at the covered project will continue to be eligible under PH FSS guidelines until the PH FSS grant expires. 6.0 Once the property is converted, residents not then enrolled in FSS will not be eligible to participate in the program. The HAMC will be allowed to use any funds already granted for PH FSS coordination salaries until such funds are expended, at which point they are no longer required to include the families in the FSS Program. Participants in converted units will not be counted towards future PH FSS funding once converted. Current ROSS-SC grantees will be able to finish out their current ROSS-SC grants once their housing is converted under RAD. However, once the property is converted, it will no longer be eligible to count towards the unit count for future public housing ROSS-SC grants nor will its residents be eligible to be served by future public housing ROSS-SC grants. HAMC Public Housing has adopted the following Community Service Requirement and Policy: PART I: COMMUNITY SERVICE REQUIREMENT Each adult resident of HAMC, who is not exempt, must [24 CFR 960.603(a)]: Contribute 8 hours per month of community service; or Participate in an economic self-sufficiency program (as defined in the regulations) for 8 hours per month; or Perform 8 hours per month of combined activities (community service and economic self-sufficiency programs). An individual may not skip a month and then double up the following month, unless special circumstances warrant it. HAMC will make the determination of whether to permit a deviation from the schedule. Individuals who have special circumstances which they believe will prevent them from completing the required community service hours for a given month, must notify HAMC in writing immediately. HAMC will 19 review the request and notify the individual, in writing, of its determination within 10 calendar days. HAMC may require those individuals to provide documentation to support their claim. Definitions Exempt Individual [24 CFR 960.601(b)] An exempt individual is an adult who: Is age 62 years or older; Is blind or disabled (as defined under section 216[i][l] or 1614 of the Social Security Act), and who certifies that because of this disability they are unable to comply with the service provisions; Is a primary caretaker of such an individual; Is engaged in work activities; HAMC will consider 25 hours per week as the minimum number of hours needed to qualify for a work activity exemption. HAMC will consider the spouse of a working adult to be exempt if there are pre-school children in the household. Meets the requirements for being exempted from having to engage in a work activity under the State Program funded under part A of title IV of the Social Security Act, or under any other welfare program of the State in which the PHA is located, including a State-administered welfare-to-work program; or Is a member of a family receiving assistance, benefits or services under a State Program funded under part A of title IV of the Social Security Act, or under any other welfare program of the State in which the PHA is located, including a State-administered Welfare-To-Work Program, and has not been found by the State or other administering entity to be in noncompliance with such program. Community Service [PH Occ. GB, p. 174] Community service is volunteer work which includes, but is not limited to: Work at a local institution including but not limited to: school, child care center, hospital, hospice, recreation center, senior center, adult day care center, homeless shelter, indigent feeding program, cooperative food bank, etc. Work with a nonprofit organization that serves HAMC residents or their children such as: Boy Scouts, Girl Scouts, Boys or Girls Clubs, 4-H programs, PAL, Garden Center, community clean-up programs, beautification programs, other youth or senior organizations Work at HAMC to help improve physical conditions Work at HAMC to help with children’s programs Work at HAMC to help with senior programs Helping neighborhood groups with special projects Working through a resident organization to help other residents with problems, serving as an officer in a resident organization, serving on the resident advisory board NOTE: Political activity is excluded for purposes of eligible community service activities. Economic Self-Sufficiency Program [24 CFR 5.603(b)] 20 For purposes of satisfying the community service requirement, an economic self-sufficiency program is defined by HUD as: Any program designed to encourage, assist, train, or facilitate economic independence of assisted families or to provide work for such families. These economic self-sufficiency programs can include job training, employment counseling, work placement, basic skills training, education, English proficiency, workfare, financial or household management, apprenticeships (formal or informal), or any other program necessary to ready a participant to work (such as substance abuse or mental health treatment). Work Activities [42 U.S.C. 607(d)] As it relates to an exemption from the community service requirement, work activities means: Unsubsidized employment Subsidized private sector employment Subsidized public sector employment Work experience (including work associated with the refurbishing of publicly assisted housing) if sufficient private sector employment is not available On-the-job training Job search and job readiness assistance Community service programs Vocational educational training (not to exceed 12 months with respect to any individual) Job skills training directly related to employment Education directly related to employment, in the case of a recipient who has not received a high school diploma or a certificate of high school equivalency Satisfactory attendance at secondary school or in a course of study leading to a certificate of general equivalence, in the case of a recipient who has not completed secondary school or received such a certificate Notification Requirements [24 CFR 960.605(c)(2)] HAMC must give each family a written description of the community service requirement, the process for claiming status as an exempt person, and the process for HAMC verification of exempt status. HAMC must also notify the family of its determination identifying the family members who are subject to the service requirement, and the family members who are exempt. HAMC will provide the family with a copy of the Community Service Policy found in Exhibit 15 - 1 of this chapter, at lease-up, lease renewal, when a family member is determined to be subject to the community service requirement during the lease term, and at any time upon the family’s request. On an annual basis, approximately 60 days prior to the lease renewal, HAMC will notify the head of household in writing of the family members who have failed to meet their community service obligations. If the family is in the first year of the community service requirement HAMC will offer the family an opportunity to meet their obligation. If the family is in the second year of the community service requirement the notice will be a termination of the lease. DETERMINATION OF EXEMPTION STATUS AND COMPLIANCE [24 CFR 960.605(c)(3)] 21 HAMC must review and verify family compliance with service requirements at least before the end of each month. The policy for documentation and verification of compliance with community service requirements may be found at Section 15 - I.D., Documentation and Verification. Where the lease term does not coincide with the effective date of the annual re-certification, HAMC will change the effective date of the annual re-certification to coincide with the lease term. In making this change, HAMC will ensure that the annual re-certification is conducted within 12 months of the last annual re- certification. Annual Determination Determination of Exemption Status An exempt individual is excused from the community service requirement [24 CFR 960.603(a)]. At least ninety (90) days prior to lease renewal, HAMC will review and verify the exemption status of all adult family members. This verification will only be done on an annual basis unless the family reports a change or HAMC has reason to believe that an individual’s exemption status has changed. For individuals who are exempt because they are 62 years of age and older, verification of exemption status will be done only at the initial examination. Upon completion of the verification process, HAMC will notify the family of its determination in accordance with the policy in Section 15 - I.B., Notification Requirements. Determination of Compliance HAMC must review resident family compliance with service requirements at least ninety (90) days before the end of the twelve month lease term [24 CFR 960.605(c)(3)]. As part of this review, HAMC must verify that any family member that is not exempt from the community service requirement has met their service obligation. Approximately ninety (90) days prior to the end of the lease term, HAMC will provide written notice informing the head of any documentation needed to verify family members who have complied with the service requirement. The family will have ten (10) calendar days to submit HAMC required documentation form(s). If the family fails to submit the required documentation within the required timeframe, or HAMC approved extension, the subject family members will be considered noncompliant with community service requirements, and notices of noncompliance will be issued pursuant to the policies in Section 15 - I.E., Noncompliance. Change in Status Between Annual Determinations Exempt to Non-Exempt Status If an exempt individual becomes non-exempt during the twelve (12) month lease term, it is the family’s responsibility to report this change to HAMC immediately. 22 HAMC will provide written notice of the effective date of the requirement, a list of agencies in the community that provide volunteer and/or training opportunities, as well as a documentation form on which the family member may record the activities performed and number of hours contributed. The effective date of the community service requirement will be the first of the month following thirty (30) days’ notice. Non-Exempt to Exempt Status If a non-exempt person becomes exempt during the twelve (12) month lease term, it is the family’s responsibility to report this change to HAMC immediately. Any claim of exemption will be verified by HAMC in accordance with the policy at 15 - I.D., Documentation and Verification of Exemption Status. HAMC will provide the family written notice that the family member is no longer subject to the community service requirement, if HAMC is able to verify the exemption. The exemption will be effective immediately. DOCUMENTATION AND VERIFICATION [24 CFR 960.605(c)(4)] HAMC must retain reasonable documentation of service requirement performance or exemption in participant files. Documentation and Verification of Exemption Status All family members who claim they are exempt from the community service requirement will be required to sign the community service exemption certification form found in Exhibit 15 - 3. HAMC will provide a completed copy to the family and will keep a copy in the tenant file. HAMC will verify that an individual is exempt from the community service requirement by following the verification hierarchy and documentation requirements in Chapter 7. HAMC makes the final determination whether or not to grant an exemption from the community service requirement. If a resident does not agree with HAMC’s determination, they can dispute the decision through HAMC’s grievance procedures (see Chapter 12). Documentation and Verification of Compliance If qualifying community service activities are administered by an organization other than HAMC, a family member who is required to perform community service must provide HAMC with a (Exhibit 15 - 4) completed by the organization timesheet, that the family member has performed the qualifying activities [24 CFR 960.607]. If anyone in the family is subject to the community service requirement, HAMC will provide the family with a community service timesheet at admission or when a family member becomes subject to the community service requirement during the lease term, or upon request by the family. Each individual who is subject to the requirement will be required to return a completed timesheet for their community service or self-sufficiency activities and the number of hours contributed monthly. The timesheet 23 will also include places for signatures and phone numbers of supervisors, instructors, and counselors certifying to the number of hours contributed. If HAMC has reasonable cause to believe that the timesheet provided by the family is false or fraudulent, HAMC has the right to require third-party verification. HAMC will randomly verify family’s community service obligations. NONCOMPLIANCE Initial Noncompliance The lease specifies it is renewed automatically for all purposes, unless the family fails to comply with the community service requirement. Violation of the community service requirement is grounds for non-renewal of the lease at the end of the twelve (12) month lease term, but not for termination of tenancy during the course of the twelve (12) month lease term [24 CFR 960.603(b)]. If the tenant or another family member has violated the community service requirement, HAMC may not renew the lease upon expiration of the twelve (12) month term of the lease, unless the tenant and any other non-compliant family member enter into a written agreement with HAMC. Under this agreement the tenant or non-compliant family member must agree to cure the non-compliance by completing the additional hours of community service or economic self-sufficiency needed to make up the total number of hours required, over the twelve (12) month term of the new lease. In addition, all other members of the family who are subject to the community service requirement must be currently complying with the community service requirement or must no longer be residing in the unit [24 CFR 960.607(c)]. Notice of Initial Non-compliance [24 CFR 960.607(b)] If HAMC determines that there is a family member who is required to perform community service requirement, but who has failed to comply with this obligation (non-compliant resident), HAMC must notify the tenant of this determination. The notice to the tenant must briefly describe the non-compliance. The notice must state that HAMC will not renew the lease at the end of the twelve (12) month lease term unless the tenant, and any other non-compliant resident, enter into a written agreement with HAMC to cure the non-compliance, or the family provides written assurance satisfactory to HAMC that the tenant or other non-compliant resident no longer resides in the unit. The notice must also state that the tenant may request a grievance hearing on HAMC’s determination, in accordance with HAMC’s grievance procedures, and that the tenant may exercise any available judicial remedy to seek timely redress for HAMC’s non-renewal of the lease because of HAMC’s determination. The notice of initial non-compliance will be sent at least ninety (90) days prior to the end of the lease term. The family will have ten (10) calendar days from the date of the notice of non-compliance to enter into a written agreement to cure the non-compliance over the twelve (12) month term of the new lease, provide documentation that the non-compliant resident no longer resides in the unit, or to request a grievance hearing. 24 If the family reports that a non-compliant family member is no longer residing in the unit, the family must provide documentation that the family member has actually vacated the unit before HAMC will agree to continued occupancy of the family. Documentation must consist of a certification signed by the head of household as well as evidence of the current address of the family member that previously resided with them. If the family does not request a grievance hearing, or does not take either corrective action required by the notice of non-compliance within the required ten (10) calendar day timeframe, HAMC will terminate tenancy in accordance with the policies in Chapter 12. Continued Non-compliance [24 CFR 960.607(b)] If, after the twelve (12) month cure period, the family member is still not compliant, HAMC must terminate tenancy of the entire family, according to HAMC’s lease, unless the family provides documentation that the non-compliant resident no longer resides in the unit. Notices of continued non-compliance will be sent at least ninety (90) days prior to the end of the lease term and will also serve as the family’s termination notice. The notice will meet the requirements for termination notices described in Chapter 12. The family will have ten (10) calendar days from the date of the notice of non-compliance to provide documentation that the non-compliant resident no longer resides in the unit, or to request a grievance hearing. If the family reports that a non-compliant family member is no longer residing in the unit, the family must provide documentation that the family member has actually vacated the unit before HAMC will agree to continued occupancy of the family. Documentation must consist of a certification signed by the head of household as well as evidence of the current address of the non-compliant family member that previously resided with them. If the family does not request a grievance hearing, or provide such documentation within the required ten (10) calendar day timeframe, the family’s lease and tenancy will automatically terminate at the end of the current lease term without further notice. PART II: IMPLEMENTATION OF COMMUNITY SERVICE HAMC may not substitute any community service or self-sufficiency activities performed by residents for work ordinarily performed by HAMC employees, or replace a job at any location where residents perform activities to satisfy the service requirement [24 CFR 960.609]. HAMC will notify its insurance company if residents will be performing community service at HAMC. In addition, HAMC will ensure that the conditions under which the work is to be performed are not hazardous. If a disabled resident certifies that they are able to perform community service, HAMC will ensure that requests for reasonable accommodation are handled in accordance with the policies in Chapter 1 Section C. HAMC Program Design 25 HAMC may administer qualifying community service or economic self-sufficiency activities directly, or may make community service activities available through a contractor, or through partnerships with qualified organizations, including resident organizations, and community agencies or institutions [24 CFR 960.605(b)]. HAMC will attempt to provide the broadest choice possible to residents as they choose community service activities. HAMC’s goal is to design a service program that gives residents viable opportunities to become involved in the community and to gain competencies and skills. HAMC will work with resident organizations and community organizations to design, implement, assess and recalibrate its community service program. HAMC will make every effort to identify volunteer opportunities throughout the community, especially those in proximity to public housing developments. To the greatest extent possible, HAMC will provide names and contacts at agencies that can provide opportunities for residents, including persons with disabilities, to fulfill their community service obligations. Any written agreements or partnerships with contractors and/or qualified organizations, including resident organizations, are described in HAMC Plan. HAMC will provide in-house opportunities for volunteer work or self-sufficiency programs when possible. EXHIBIT 15 - 1: COMMUNITY SERVICE AND SELF-SUFFICIENCY POLICY & LEASE ADDENDUM A. Background The Quality Housing and Work Responsibility Act of 1998 requires that all non-exempt (see definitions) public housing adult residents (18 or older) contribute eight (8) hours per month of community service (volunteer work) or participate in eight (8) hours of training, counseling, classes or other activities that help an individual toward self- sufficiency and economic independence. This is a requirement of the public housing lease. B. Definitions Community Service – volunteer work that includes, but is not limited to: Work at a local institution, including but not limited to: school, child care center, hospital, hospice, recreation center, senior center, adult day care center, homeless shelter, indigent feeding program, cooperative food bank, etc. Work with a nonprofit organization such as: Parks and Recreation, United Way, Red Cross, Volunteers of America, Boy Scouts, Girl Scouts, Boys or Girls Clubs, 4-H Program, PAL, Garden Center, community clean-up programs, beautification programs, other counseling, aid, youth or senior organizations Work at the housing authority to help with litter control Work at the housing authority to help with children’s programs Work at the housing authority to help with senior programs Helping neighborhood groups with special projects Working through a resident organization to help other residents with problems Serving as an officer in a resident organization Serving on the Resident Advisory Board 26 NOTE: Political activity is excluded. Self-Sufficiency Activities – activities that include, but are not limited to: Job readiness programs Job training programs GED classes Substance abuse or mental health counseling English proficiency or literacy (reading) classes Apprenticeships Budgeting and credit counseling Any kind of class that helps a person toward economic independence Student status at any school, college or vocation school Exempt Adult – an adult member of the family who meets any of the following criteria: Is 62 years of age or older Is blind or a person with disabilities (as defined under section 216[i][l] or 1614 of the Social Security Act), and who certifies that because of this disability he or she is unable to comply with the service provisions, or is the primary caretaker of such an individuals Is working at least 25 hours per week Meets the requirements for being exempted from having to engage in a work activity under TANF or any other State welfare program including a State-administered welfare-to-work program Is a member of a family receiving assistance, benefits or services under TANF or any other State welfare program and has not been found to be in noncompliance with such program Raising young (pre-school) children at home where spouse is working at least 25 hours per week C. Requirements of the Program 1. The eight (8) hours per month may be either volunteer work or self-sufficiency program activity, or a combination of the two. 2. At least eight (8) hours of activity must be performed each month. An individual may not skip a month and then double up the following month, unless special circumstances warrant special consideration. The housing authority will make the determination of whether to allow or disallow a deviation from the schedule based on a family’s written request. 3. Family obligation: At lease execution, all adult members (18 or older) of a public housing resident family must: Sign a certification that they have received and read this policy and understand that if they are not exempt, failure to comply with the community service requirement will result in a nonrenewal of their lease; and Declare if they are exempt. If exempt, they must complete the Exemption Form (Exhibit 11-3) and provide documentation of the exemption. 27 Upon written notice from the PHA, non-exempt family members must present complete documentation of activities performed during the applicable lease term. This documentation will include places for signatures of supervisors, instructors, or counselors, certifying to the number of hours contributed. If a family member is found to be noncompliant at the end of the 12-month lease term, he or she, and the head of household, will be required to sign an agreement with the housing authority to make up the deficient hours over the next twelve (12) month period, as a condition of continued occupancy. 4. Change in exempt status: If, during the twelve (12) month lease period, a non-exempt person becomes exempt, it is his or her responsibility to report this to the PHA and provide documentation of exempt status. If, during the twelve (12) month lease period, an exempt person becomes non-exempt, it is his or her responsibility to report this to the PHA. Upon receipt of this information the PHA will provide the person with the appropriate documentation form(s) and a list of agencies in the community that provide volunteer and/or training opportunities. D. Authority Obligation 1. To the greatest extent possible and practicable, the HAMC will: Provide names and contacts at agencies that can provide opportunities for residents, including residents with disabilities, to fulfill their community service obligations. Provide in-house opportunities for volunteer work or self-sufficiency activities. 2. HAMC will provide the family with a copy of this policy, and all applicable exemption verification forms and community service timesheet forms, at lease-up or when a family member becomes subject to the community service requirement during the lease term, and at any time upon the family’s request. 3. Although exempt family members will be required to submit documentation to support their exemption, HAMC will verify the exemption status in accordance with its verification policies. HAMC will make the final determination as to whether or not a family member is exempt from the community service requirement. Residents may use the HAMC’s grievance procedure if they disagree with the HAMC’s determination. 4. Noncompliance of family member: At least ninety (90) days prior to the end of the twelve (12) month lease term, HAMC will begin reviewing the exempt or non-exempt status and compliance of family members; If, at the end of the initial twelve (12) month lease term under which a family member is subject to the community service requirement, HAMC finds the family member to be noncompliant, HAMC will not renew the lease unless: The head of household and any other noncompliant resident enter into a written agreement with HAMC, to make up the deficient hours over the next twelve (12) month period; or The family provides written documentation satisfactory to the HAMC that the noncompliant family member no longer resides in the unit. If, at the end of the next twelve (12) month lease term, the family member is still not compliant, a thirty (30) day notice to terminate the lease will be issued and the entire family will have to vacate, unless the family provides written documentation satisfactory to HAMC that the noncompliant family member no longer resides in the unit; The family may use HAMC’s grievance procedure to dispute the lease termination. 28 A resident needs questionnaire was developed and implemented to assist our residents in matching services and resources based on the needs of each household. In addition, each site office maintains a resource book that is available to the residents as a self-help guide to community services. The public housing FSS program had two successful graduates during the year plus the total annual earned income of the program participants increased by 33%. Maricopa County Human Resources continues to successfully manage our FSS program. HAMC distributes information to the residents regarding the program and provides referrals in addition to community meetings hosted by Human Services. A new combined program FSS grant was awarded to HAMC. New enrollments from the Housing Choice Voucher participants are underway. The ROSS program has been successful in providing training and educational opportunities to the public housing residents through a variety of service partnerships including Maricopa County Workforce Development, Goodwill of Central Arizona Senior Corp Employment program, Money Management International, U of A Cooperative Extension Services are some examples. Other area specific partnerships will continue to be developed to support the needs of our residents. 29 8. Safety and Crime Prevention. Each Public Housing Property Manager has attended Crime Free Multi-Housing training provided by local police agencies. The trainings opened up communications with various municipalities in regards to receiving reports of criminal activities at the public housing sites thus allowing management to act appropriately with the affected households. We encourage all of our on-site staff to attend the crime free type of trainings. Various police agencies have partnered with different sites in promoting block watch and crime prevention meetings with the residents. Direct e-mails from local enforcement agencies to the property management teams has made it possible for them to react quickly to problems. 6.0 HAMC has a vehicle registration program whereby households must register their vehicle in order to park on the property. This has been beneficial in reducing unwanted elements on the sites. HAMC contracts with an independent company to perform nationwide criminal background checks on all applicants. Local courts and police agencies are checked in conjunction with tenant lease renewals. HAMC replaced exterior building light fixtures on our single family homes to improve the lighting and energy efficiency. Security screen doors were installed at Varney Homes. HAMC continues to monitor neighborhood and surrounding area changes that directly affect our properties and review for additional safety and crime prevention measures as needed. 30 9. Pets. HAMC pet policy is comprised of four parts. 1) Assistance Animals, 2) Pet Policies for All Developments, 3) Pet Deposits and Fees in Elderly/Disabled Developments and in General Occupancy Developments. Assistance Animals that are needed as a reasonable accommodation for person with disabilities are not considered pets and thus, are not subject to HAMC’s pet policies. The Pet Policies for All Developments requires all pets be registered and licensed before being brought onto the premises, requires all dogs and cats be spayed or neutered at the time of registration or within 30 days of reaching 6 months of age, limits the number and type of pets allowed and defines the responsibilities of the pet owner. 6.0 Upon providing required documentation and HAMC approval, a Pet Lease Addendum must be signed. The Pet Lease Addendum is the resident’s certification that he or she has received a copy of HAMC’s pet policy and applicable house rules, that he or she has read the policies and/or rules, understands them, and agrees to comply with them. The Pet Deposit for ALL Developments requires a pet deposit in addition to any other required deposits. The amount of the pet deposit is equal to the total tenant payment (TTP) at the time the pet agreement is signed, up to a maximum of $100.00. HAMC does not require a non-refundable fee. 31 10. Civil Rights Certification. See Appendix A. 6.0 32 11. Fiscal Year Audit. See Appendix D for the Financial Statements and Reports of Independent Certified Public Accountants for the year ended June 30, 2014. 6.0 33 12. Asset Management. Each AMP has its’ own budget, financial reports, and inventories. These records allow individual assessment of the AMPs in regards to staffing, performance and capital needs. HAMC submitted an application to HUD under the Rental Assistance Demonstration (RAD) Program to convert all public housing units to either Project Based Rental Assistance or to Project Based Vouchers. AMP 1 and three sites included in AMP 5 were previously awarded CHAPs and we are in the process of finalizing these conversions. Allowable public housing reserves and capital funds will be used as necessary to complete the transition to RAD. HAMC recognized the increased demand for one bedroom apartments in the East Valley. The public housing program did not offer any one bedroom units at our Mesa sites although the wait list demand was high. A plan was formulated to convert the 4 bedroom units at Clare Feldstadt Homes on E. University into one bedroom sized apartments. A grant was applied for and received from the Gila River Indian Community to do the conversion along with HAMC replacement housing funds. The conversion was completed in October of 2014. HAMC has been managing a 35 unit tax credit development consisting of 35 single family homes in Mesa. We have public housing subsidy on 13 of the homes. HAMC will be pursuing additional subsidy through the Project Based Voucher Program on the balance of the units in order to make the rentals more affordable. A property based wait list has been created for this entity. 6.0 Rose Terrace Apartments in Avondale is a mixed finance property built in two phases with a total of 120 units of affordable housing. The unit mix includes 40 units of public housing in addition to 68 Project Based Vouchers. A separate Rose Terrace Apartments wait list is utilized to place households into the subsidized units. HAMC is dedicated to promoting energy efficiencies throughout the agency. An Energy Performance Contract (EPC) was completed in 2014 that included water saving devices, CFL bulbs and solar panels at 3 properties. These savings have resulted in lower energy costs for our residents. HAMC will be monitored annually to insure the EPC items are maintained per the agreement and the forecasted savings are attained. AMP 7 consists of 45 single family homes throughout the west valley. In AMP 15 there are 25 single family homes located in the City of Peoria. As homes vacate they are undergoing modernization including kitchen and bath improvements, energy efficient heat pumps including the installation of new duct work, insulation and windows. HAMC will study, and if feasible, implement a smoke free policy in public housing. As the RAD conversion progresses, HAMC will also assess the feasibility of converting these properties to being smoke free. A resident resource center managed by Chicanos Por La Causa continues to assist our residents at Father Fidelis Kuban (AMP 2) in Guadalupe. A community center to serve our residents is being planned at Villa Monterosa in El Mirage. The center will utilize a space formerly occupied by a head start program. 34 13. Violence Against Women Act (VAWA). The Housing Choice Voucher Program Administrative Policy and the Public Housing Admissions and Continued Occupancy Policy are current pursuant to Public Law 109-16 and amended as per the Reauthorization Act of 2013 Violence Against Women Act (VAWA). Accordingly: 1. HAMC has implemented policies and procedures that will enable us to address the needs of all victims of domestic violence, dating violent, sexual assault or stalking. HAMC has provided training to staff regarding VAWA and HAMC’s policies and procedures that pertain to VAWA. 2. An incident or incidents of actual or threatened domestic violence, dating violence, sexual assault, or stalking will not be construed as a serious or repeated violation of the lease by the victim or threatened victim of that violence, and shall not be good cause for terminating the assistance, tenancy, or occupancy rights of the victim of such violence. 3. HAMC may terminate the assistance to remove a lawful occupant or tenant who engages in criminal acts or threatened acts of violence, sexual assault or stalking to affiliated individuals or others without terminating the assistance or evicting victimized lawful occupants. 4. HAMC may honor court orders or other orders issued regarding the rights of access or control of the property to protect the victim and is used to address the distribution or possession or property among household members where the family “breaks up”. 5. There is no limitation on the ability of HAMC to evict for other good cause unrelated to the incident or incidents of domestic violence, dating violence, sexual assault or stalking, other than the victim may not be subject to a more demanding standard than non-victims. 6. There is no prohibition on HAMC evicting if it can demonstrate an actual and imminent threat to other 6.0 tenants or those employed at or providing service to the property if that tenant’s (victim’s) tenancy is not terminated. 7. Any protections provided by law which gives greater protection to the victim are not superseded by these provisions. 8. HAMC may require certification by the victim of victim status on such forms as HAMC and/or HUD shall prescribe or approve. 9. May take other actions to ensure the safety of the tenant victim, other residents, and employees. This may include, HAMC may bifurcate a lease in order to evict, remove, or terminate assistance to any individual who is a tenant or lawful occupant of the housing unit who engages in criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking against an affiliated individual or other individual without evicting, removing, terminating assistance to, or otherwise penalizing a victim of such criminal activity who is also a tenant or lawful occupant of the housing. If the individual is the sole tenant eligible to receive assistance, HAMC shall provide any remaining tenant an opportunity to establish eligibility for the housing unit. If the tenant cannot establish eligibility, HAMC must provide the tenant a reasonable time to find new housing. 10. HAMC invites police, advocacy organizations, and other programs that may assist victims based on the definitions of VAWA to make periodic presentations throughout the various housing communities and programs. 11. HAMC may refer victims affected by VAWA to appropriate agencies including domestic violence shelters and victim services programs. Families in crisis are referred to police and/or to the National Domestic Violence Crisis Hotline 1-800-799-SAFE. 35 B. Identify the specific location(s) where the public may obtain copies of the 5-Year and Annual PHA Plan. The Plan will be located at the following office locations as well as online at http://www.maricopahousing.org/ 8910 N. 78th Ave – Main Office 1510 S. 19th Drive – Coffelt Office Peoria, AZ Phoenix, AZ 710 W. Eight Ave – Mesa Office 1103 N. 6th Street, # 106 – Avondale Office Mesa, AZ Avondale, AZ 6.0 12976 Cottonwood – Surprise Office 10950 N. 87th Ave. – Peoria Office Surprise, AZ Peoria, AZ 36 7.0 Hope IV, Mixed Finance Modernization or Development, Demolition and/or Disposition, Conversion of Public Housing, Homeownership Programs, and Project-Based Vouchers (a) Hope IV, Mixed HAMC received HUD approval to restructure Maricopa Revitalization tax credit project Finance to provide HAMC more oversight and control of the partnership. Modernization or Development (b) Demolition and/or HAMC will address the feasibility of demolition/disposition of each public housing site Disposition once final approval on the entire RAD portfolio conversion is received. This process may include the disposition of the single family homes as noted under item (d) Homeownership. (c) Conversion of Public HAMC submitted a RAD portfolio conversion application to HUD. March 27, 2015, HAMC Housing received approval to move conversion plan forward. Involuntary displacement for HAMC public housing residents due to public housing disposition, demolition, renovation or substantial modernization may be transferred to another public housing units or receive Section 8 Housing Choice Voucher preference. See Appendix F Rental Assistance Demonstration and Appendix G Conversion Summary. (d) Homeownership HAMC will determine feasibility of a homeownership program once RAD portfolio application is approved. AMP 7 has 45 single family homes and AMP 15 has 25 single family homes that will be assessed for the program. (e) Project-Based HAMC will commit Project Based Vouchers for qualified projects. It is anticipated that Vouchers PBVs will be allocated to Apache ASL Trails in Tempe and Maricopa Revitalization Project in Mesa. 37 8.0 Capital Improvements. Please complete Parts 8.1 through 8.3, as applicable. Capital Fund Program Annual Statement/Performance and Evaluation Report. As part of the PHA 5-Year and Annual Plan, annually complete and submit the Capital Fund Program Annual Statement/Performance and Evaluation Report, 8.1 form HUD-50075.1, for each current and open CFP grant and CFFP financing. See Appendix B, CFP-501-13 Performance and Evaluation Report (HUD 50075.1) and CFP-501-14 Annual Statement. Capital Fund Program Five-Year Action Plan. As part of the submission of the Annual Plan, PHAs must complete and submit the Capital Fund Program Five-Year Action Plan, form HUD-50075.2, and subsequent annual updates (on a rolling basis, e.g., drop current year, and add latest year for a five year period). Large capital items must be included in 8.2 the Five-Year Action Plan. See Appendix B HUD Form 50075.2. 8.3 Capital Fund Financing Program (CFFP). Check if the PHA proposes to use any portion of its Capital Fund Program (CFP)/Replacement Housing Factor (RHF) to repay debt incurred to finance capital improvements. 38 Housing Needs. The HAMC jurisdiction includes incorporated cities and towns and unincorporated areas across the Valley from Wickenburg to Queen Creek. Maricopa County is and has been at the top of the list in terms of foreclosure activity, and this has wreaked havoc on low-and moderate-income households. About 8% of families and 11.7% of the population are below the poverty line, including 15.4% of those under age 18 and 7.4% of those age 65 or over. Since 2007 the unemployment rate has nearly doubled from 3.3% in January 2007 to today’s 6.1%. According to the Maricopa Urban County 2010-2014 Five Year Consolidated Plan, many Maricopa County residents pay more than 50% of their income on housing and utilities. It is estimated that a total of 11,900 households (7% of all households within the Urban County) are households earning less than 30% of the median income. 92% of HAMC public housing applicants and 82% of the Housing Choice Voucher applicants are at or below this income level. The table below describes the type of households facing housing issues at 30% of the median income. Of the 4,160 renting households… Of the 7,700 owner households… 33% are elderly 60% elderly 9.0 26% are small households 17% are small households 21% are large households 12% are large households 20% are one-person households 11 % are one-person households It is estimated that a total of 10,900 households or 6% of all households in HAMC’s jurisdiction are comprised of households earning between 31 to 50% of the median income with housing problems of some sort. 6% of HAMC public housing applicants and 12% of the Housing Choice Voucher applicants are at or below 50% of the median area income level. The table below describes the type of households that were facing housing issues at 50% of the median income. Of the 3,700 renting households… Of the 7,300 owner households… 40% are elderly 53% elderly 27% are small households 21% are small households 22% are large households 13% are large households 11% are one-person households 13 % are one-person households It is estimated that a total of 12,500 households or 7% of all households in HAMC’s jurisdiction are comprised of households earning between 51% to 80% of the median income with housing problems of some sort. This group makes up only 1% of HAMC’s public housing applicants and 6% of Housing Choice Voucher applicants on HAMC’s current waitlist. The table below describes the type of households that were facing housing issues at 80% of the median income. Of the 2,800 renting households… Of the 10,000 owner households… 39 45% are elderly 39% elderly 24% are small households 28% are small households 23% are large households 19% are large households 8% are one-person households 14 % are one-person households In an era when more than one-third of all American families rent their homes, we face a housing market that does not create nor sustain a sufficient supply of affordable rental homes, especially for low-income households. Despite significant improvements in housing quality in recent decades, much of our rental housing stock is not energy efficient or accessible to people with disabilities, and pockets of severely substandard housing remain. When it comes to strong, safe, and healthy communities, lower cost rental housing is particularly scarce. Many in the community await assistance from HAMC. Current surveys indicate 2,750 families are currently on the HAMC Public Housing waitlist and over 6,000 families on the Housing Choice Voucher waitlist. The supply offered in Arizona to renters will be affected, according to the Maricopa HOME Consortium 2010-2014 Five-Year Consolidated Plan, and two HUD Section 236 projects anticipated lost. Both projects predominantly accommodated those who had earnings under 30% of the median. Maricopa County specifically accounts for 904 units. These units are located in the following cities: Mesa, Phoenix, Buckeye, Avondale, Guadalupe, El Mirage, Tolleson, Surprise and Peoria. The portfolio is facing a serious and long term shortfall of capital funding to upgrade, rehabilitate and repair properties ranging in age from 23- to 58-years old. Capital funding from HUD has historically been insufficient to cover the maintenance and renovation needed for all the units. Construction costs have increased, and capital funds have decreased which further limits the resources needed for improvements to an aging portfolio. An estimated cost to improve the physical condition of the HAMC portfolio is at $50 million dollars. The HUD Capital Fund has been funded at $1.2 million annually, but the Capital Fund is anticipated to be reduced by $200,000 annually for 2012-2013. The HUD Capital Fund is currently allocated among projects with the most severe repairs and rehabilitation needs. A portion of the capital fund is used for administrative, operations and maintenance. At current funding levels, it will take over 4 decades to raise the capital resources needed to repair and rehabilitate the HAMC portfolio. The gap between the federal capital resources and needs, coupled with the operating subsidy changes, has put HAMC assets at risk of being obsolete in the next 10 years. What this means for HAMC inventory is a reduction in units that are operational or available for occupancy due to poor condition. This will reduce the number of subsidized units available in Maricopa County, and increase the wait time for households so desperately awaiting subsidized rentals. The demand and need for subsidized rental units is increasing and will continue to grow. Indication of this need became even more evident when HAMC opened the Housing Choice Voucher (Section 8) waitlist in 2011 and in one week received over 4,000 applications. Again in 2014 HAMC opened its Section 8 waitlist, and over 5,700 applications were received in less than 3 days. However, it was only in 2013 that HAMC was able to offer new vouchers to those who applied in 2009. HAMC public housing unit inventory has very few one bedroom units, and the largest demand for units is the one and two bedroom size. The aging baby boomer population is changing HAMC’s applicant profile. The HAMC wait list for public housing has 4,000 people with an average wait of at least 1 year and a longer wait for 1 or 2 bedrooms of 2-3 + 40 years. The situation facing HAMC has prompted a comprehensive asset-by-asset evaluation and prioritization of asset repositioning. The priority of preservation will be the overriding goal of the redevelopment process: to maintain the affordability and subsidy for each site. The goal will be to ensure optimal benefit to the residents, increase density where feasible, improve exterior/interior living conditions for residents, increase energy efficiency and maintain affordability. 41 Strategy for Addressing Housing Needs. Provide a brief description of the PHA’s strategy for addressing the housing needs of families in the jurisdiction and on the waitlist in the upcoming year. Note: Small, Section 8 only, and High Performing PHAs complete only for Annual Plan submission with the 5-Year Plan. Consistent with HAMC’s long-term, multi-faceted strategy to create quality affordable rental housing in the Maricopa County community is documented in its Housing Development Plan and to increase housing options in its Strategic Plan, HAMC strategy to address the jurisdiction’s housing needs include the following: HAMC improved access to its housing programs by improved outreach to its community partners and offered waitlist applications online. HAMC will increase density at public housing sites where feasible by adding new units and retrofitting exiting units. 16% of all Public Housing applicants are in the near elderly and elderly age range. HAMC may pursue the potential designation of one development to the status of elderly or near elderly housing so as to permit the elderly to have a safe and secure environment in which to live. HAMC‘s current waitlist for public housing indicate the highest demand for one (32%) and two bedrooms (34%), with the second highest for three bedrooms (25%). To address this need, HAMC converted 6 four bedroom Public Housing units into 12 one bedroom sized units due to the high demand for smaller sized apartments. Additional conversions of this type will be implemented as funding becomes available. In response to HUD’s goal to end homelessness, a Public Housing waitlist preference for the homeless was 9.1 implemented to provide stable housing for households currently being assisted through various shelter and support organizations. The support agencies are assisting these households in utility hook ups, paying deposits and initial rents. 81% of all public housing applicants are in the 30% median income range. HAMC will maintain or increase HCV lease-up rates by reviewing its Payment Standards and establish standards that will enable families to rent throughout the jurisdiction. HAMC will also improve access and its lease up rates by more effectively marketing the program to owners, particularly those outside of areas of minority and poverty concentration. HAMC will implement a PBV program for 22 single family homes in Mesa in order to provide additional affordable housing opportunities for the extremely low income in the East Valley. The two, three and four bedroom homes are part of Maricopa Revitalization Partnership that currently has 13 units of Public Housing. HAMC will administer a project based voucher program at Apache ASL Trails for low income residents who are deaf and hard of hearing and other persons with disabilities. HAMC may participate in the State’s initiative called the Bridge Subsidy Program, a housing initiative to expand the supply of Permanent Supportive Housing (PSH) in Arizona for individuals with serious mental illness enrolled in the public behavioral health system. HAMC will utilize attrition through the Housing Choice Voucher Program to house homeless families in effort to aid in the County’s efforts to end chronic homelessness. HAMC will participate in the 2015 Maricopa County Consolidated Plan development process lead by Crystal & Company to ensure collaboration and coordination with broader community strategies. 42 Additional Information. Describe the following, as well as any additional information HUD has requested. (a) Progress in Meeting Mission and Goals. Provide a brief statement of the PHA’s progress in meeting the mission and goals described in the 5- Year Plan. Mission or Goal described in 5-year Plan Statement of the PHAs progress in meeting the mission and goals described The former City of Peoria public housing inventory Goal 1: Preserve and where appropriate develop transferred to HAMC increasing the public housing additional affordable housing opportunities for the inventory by 70 units. community. Six four bedroom units were re-configured into 12 one bedroom apartments in Mesa to meet the demand for this unit size. RHF funds and a grant from a private source were utilized to create the additional 6 units. Entered into HAP agreement for project based vouchers at Rose Terrace Apartments. HAMC is currently redeveloping and renovating four Goal 2: Redevelop, renew and replace obsolete public housing properties using mix financing under the properties where appropriate with mixed income RAD program. housing opportunities for the community. A Portfolio RAD application for all the public housing units was submitted to HUD. BOC adopted a Housing Development Plan in 2013 to 10. identify development strategies for HAMC public 0 housing inventory. HAMC contracted with Maricopa Human Services Goal 3: Promote and secure services for housing department to provide case management for FSS public authority residents, participants and applicants. housing participants and renewed the agreement upon receipt of a new grant to include Housing Choice Voucher clients. Partnered with Parenting Arizona program to provide an on-site resource center for residents living at Father Fidelis public housing site in Guadalupe. Negotiated a partnership with homeless providers to provide public housing units for homeless households. Partnered with the Arizona Non-Profit Alliance to secure an AmeriCorps Vista volunteers to provide resident services at Rose Terrace Apartments. Executed an IGA with Workforce Connections to provide an Access Point/Workforce Connection Center at Rose Terrace and to add additional sites. A survey of several housing authorities was completed Goal 4: Foster a work environment that values and to evaluate best practices in transitioning from public encourages individual and team commitment to housing to mix finance management. Shared results of housing authority goals. best practices with public housing employees. Surveyed public housing employees to determine training needs, input on transition of public housing and determined best organizational structure to meet needs of agency. Have successfully used university and college internship programs in project management and IT services. 43 Goal 5: Promote the housing authority’s role as a Performed an energy audit of HAMC properties to community leader in the development of a sustainable determine energy upgrades to improve energy community throughout Maricopa County. efficiencies and decrease energy consumption. Selected Honeywell as EPC contractor to complete energy retrofits through an EPC contract that will reduce maintenance cost, improve living conditions of residents, address unfunded capital needs and reduce overall carbon footprint through green initiatives. HAMC has memberships with NAHRO, PHADA, AHADA, Goal 6: Foster the housing authority’s partnership with AZNAHRO, AMA and Arizona Housing Alliance to obtain Maricopa County Government, the State of Arizona and information on industry trends & policies on a cities to provide for the development of regional national/local level. affordable housing solutions and to further the Housing HAMC is a participating member of the Maricopa Authority’s Mission. County Consortium to End Homelessness. HAMC’s Housing Choice Voucher Program Supervisor sits on the Board of the Maricopa Workforce Connections Youth Council. HAMC’s Executive Director sits on the Board of both the Arizona Apartment Management Association (AMA) and the Arizona Housing Alliance. 44 SECTION 10 (b) Significant Amendment and Substantial Deviation/Modification (b) Significant Amendment and Substantial Deviation/Modification The Housing Authority of Maricopa County after submitting its Annual Plan to HUD, may modify, amend or change any policy, rule, regulation or other aspect of its plan. If any modifications, amendments or changes in any policy, rule, regulation or other aspect of the plan are not consistent with the HAMC Mission Statement, its Goals and Objectives, or HUD regulations, then these shall not be deemed significant amendments or modifications to the Annual and 5‐ Year Plan. If new program activities are required or adopted to reflect changes in HUD regulations or as a result of national or local emergencies, these activities are exempted actions and will not be considered as Substantial Deviation from the 5‐Year Plan. 10 The definition of Substantial Deviation/Modification of the PHA Plan is amended to exclude the following items: 1. The decision to convert to either Project Based Rental Assistance or Project Based Voucher Assistance; 2. Changes to the Capital Fund Budget produced as a result of each approved RAD conversion, regardless of whether the conversion will include use of additional Capital Funds; 2. Changes to the construction and rehabilitation plan for each approved RAD conversions; and 3. Changes to the financing structure for each approved RAD conversion. (f) Applicable memorandum of agreement with HUD or any plan to improve performance N/A 10 46 THIS PAGE INTENTIALLY LEFT BLANK 47 Appendix A: Certifications 48 49 50 51 52 53 54 55 56 57 Appendix B: Capital Fund 50075.1 and 50075.2 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 Part I: Summary PHA Name/Number Locality (City/County & State) Original 5-Year Plan Revision No: 1 Housing Authority of Maricopa County Phoenix, Maricopa, Arizona AZ20P00950115 Development Number and Work Statement Work Statement for Year 2 Work Statement for Year 3 Work Statement for Year 4 Work Statement for Year 5 A. Name for Year 1 FFY ____2016_______ FFY _____2017_______ FFY ____2018______ FFY ____2019______ FFY __2015___ B. Physical Improvements Annual Statement Subtotal 431,149 277,090 279,090 227,090 C. Management Improvements 5,000 3,000 2,000 2,000 D. PHA-Wide Non-dwelling 10,000 3,000 2,000 2,000 Structures and Equipment E. Administration 108,461 51,200 51,200 51,200 F. Other 105,000 50,000 50,000 50,000 G. Operations 125,000 30,000 30,000 30,000 H. Demolition I. Development 300,000 100,000 100,000 100,000 J. Capital Fund Financing – Debt Service K. Total CFP Funds 1,084,610 514,290 514,290 514,290 L. Total Non-CFP Funds M. Grand Total 1,084,610 514,290 514,290 514,290 82 Part I: Summary (Continuation) PHA Name/Number Housing Authority of Locality (City/county & State) Original 5-Year Plan Revision No: 1 Maricopa County- AZ20P00950113 Phoenix/Maricopa/Arizona Development Number Work Work Statement for Year 2 Work Statement for Year 3 Work Statement for Year 4 Work Statement for Year 5 A. and Name Statement for FFY ___2016_________ FFY ____2017________ FFY __2018________ FFY __2019_______ Year 1 FFY __2015__ Annual Statement PHA Wide Activities 165,049 66,590 97,590 26,000 AMP 2 Clare 22,500 48,000 50,000 40,000 Feldstadt/Father Fidelis AMP 5/16 Baden/Hollar 60,000 35,000 28,500 15,000 Amp. 7 Scattered site 41,000 homes-West Valley Amp. 8 Casa 24,000 24,000 15,000 30,000 Bonitas/Paradise/Villa Monte Rosa/Flora Statler Amp. 9 John 48,600 65,000 65,000 31,000 Hammond/Varney Amp. 13 Rose Terrace 14,000 13,000 5,000 25,000 Amp. 14 Mesa Scattered 21,000 18,000 Sites AMP 15 Parkview 35,000 7,500 18,000 30,000 Subtotal 431,149 277,090 279,090 279,090 83 Part II: Supporting Pages – Physical Needs Work Statement(s) Work Work Statement for Year ___2__________ Work Statement for Year: ____3________ Statement for FFY ______2016__________ FFY _____2017_________ Year 1 FFY Development Number/Name Quantity Estimated Cost Development Number/Name Quantity Estimated Cost _2015__ General Description of Major General Description of Work Categories Major Work Categories See Annual PHA WIDE-“Green Retrofit” PHA WIDE-“Green Retrofit” inc., landscape, sidewalks, 165,049 inc., landscape, sidewalks, 66,590 parking, bath, kitchen, plumb., parking, bath, kitchen, plumb., appliances& electric upgrades appliances & electric upgrades Statement AMP 2 Flooring 8 18,000 AMP 2 Flooring 4 8,000 AMP 2 tubs/surround 3 4,500 AMP. 2 Kitchen/Baths 8 40,000 AMP 5/16 Floors 5 10,000 AMP 5/16 flooring 5 10,000 AMP 5/16 Kit/Bath/doors 8 50,000 AMP 5/16 Kit/bath/doors 4 25,000 AMP 7 Roofs 4 20,000 AMP 8 Windows 12 24,000 AMP 7 HVAC 2 11,000 AMP. 9 Doors 10 15,000 AMP 7 Kitchen/Baths 1 10,000 AMP. 9 Roofing 4 50,000 AMP. 9 Roofing 4 48,600 AMP 13 Flooring 3 5,000 AMP 8 Windows 12 24,000 AMP. 13 HAVC 2 8,000 AMP 13 Flooring 2 4,000 AMP. 14 HAVC 2 8,500 AMP. 13 HVAC 2 10,000 AMP. 14 Windows 3 6,500 AMP. 14 HAVC 2 10,000 AMP. 14 Flooring 2 3,000 AMP. 14 Windows 2 4,500 AMP 15 kitchen/bath 2 7,500 AMP. 14 Flooring/Painting 3 6,500 AMP 15 kitchen/bath 4 15,000 AMP 15 Roofing 4 20,000 Subtotal of Estimated $ 431,149 Subtotal of Estimated Cost $ 277,090 Cost 84 Part II: Supporting Pages – Physical Needs Work Statement(s) Work Work Statement for Year ____4_________ Work Statement for Year: ____5________ Statement for FFY _____2018___________ FFY _____2019_________ Year 1 FFY Development Number/Name Quantity Estimated Cost Development Number/Name Quantity Estimated Cost __2015____ General Description of Major General Description of Major Work Categories Work Categories See PHA WIDE-“Green Retrofit” PHA WIDE-“Green Retrofit” inc., landscape, sidewalks, 97,590 inc., landscape, sidewalks, 108,090 parking, plumb, appliances & parking, plumb, appliances & electric upgrades electric upgrades Annual AMP 2 Kitchen/Bath upgrades 8 40,000 AMP 2 Kitchen/Bath upgrades 8 40,000 Statement AMP 2 Flooring 5 10,000 AMP 5/16 Bath upgrades 10 15,000 AMP 5/16 kit bath doors 5 25,000 AMP 8 Bath upgrade 20 30,000 AMP 5/16 Flooring 2 3,500 AMP. 9 Roofing 1 10,000 AMP 8 Bath upgrade 10 15,000 AMP 9 Bath Upgrades 5 6,000 AMP. 9 Roofing 2 50,000 AMP 9 Doors 10 15,000 AMP 9 Doors 10 15,000 AMP 13 Windows/screens 20 25,000 Amp. 13 HAVC 1 5,000 AMP 15 Kit bath 8 30,000 AMP 15 Roofs 3 10,500 AMP 15 Kit bath 2 7,500 Subtotal of Estimated Cost $ 279,090 Subtotal of Estimated Cost $ 279,090 85 Part III: Supporting Pages – Management Needs Work Statement(s) Work Work Statement for Year ______2________ Work Statement for Year: _____3_______ Statement for FFY ____2016________ FFY ____2017________ Year 1 FFY Development Number/Name Estimated Cost Development Number/Name Estimated Cost __2015____ General Description of Major Work Categories General Description of Major Work Categories See PHA WIDE PHA WIDE Annual Training, consulting 5,000 Training, consulting 3,000 Statement Administrative 108,461 Administrative 51,200 Office equip, maint. Equip 10,000 Office equip, maint. Equip 3,000 Operations 125,000 Operations 30,000 Development 300,000 Development 100,000 Other: Relocation, contingency 105,000 Other: Relocation, contingency 50,000 Subtotal of Estimated Cost $ 653,461 Subtotal of Estimated Cost $ 237,200 86 Part III: Supporting Pages – Management Needs Work Statement(s) Work Work Statement for Year ______4________ Work Statement for Year: ______5______ Statement for FFY ____2018________ FFY ___2019__________ Year 1 FFY Development Number/Name Estimated Cost Development Number/Name Estimated Cost ___2015___ General Description of Major Work Categories General Description of Major Work Categories See PHA Wide PHA Wide Annual Training, consulting 2,000 Training, consulting 2,000 Statement Administrative 10% 51,200 Administrative 10% 51,200 Office equip, maint. Equip 2,000 Office equip, maint. Equip 2,000 Operations 30,000 Operations 30,000 Development 100,000 Development 100,000 Other: Relocation, contingency 50,000 Other: Relocation, contingency 50,000 Subtotal of Estimated Cost $ 235,200 Subtotal of Estimated Cost $ 235,200 87 Appendix C: Resident Advisory Board and Public Comments 88 2015 Annual Agency Plan Resident Meetings HAMC facilitated local area meetings to address the required US Department of Housing and Urban Development mandate that the PH Authority coordinate an annual process, providing opportunity for Public Housing Residents to review and give their input to the PH Authority (HAMC), concerning the agency plan. HAMC facilitated the Annual Plan process which included: Formal meetings with staff and residents to discuss community accomplishments, current issues, and to solicit ideas and solutions for their local communities as part of the Annual Plan Input process. Discuss HAMC services and improvements completed within the past year. Discuss and solicit input on progress made toward the accomplishment of previous year recommendations and actions requested by the residents. Solicit input on new perspectives and suggestions from resident participants on future actions and improvements desired for their community. Review and provide for an opportunity for discussion on proposed changes to the Admissions and Continued Occupancy Policy for Public Housing. Meeting Notices and Community Meeting Schedules were distributed and posted at the local public housing properties. Although agenda content was common for all meetings, dialogue and feedback from residents was specific and distinct for each community and individualized local input was able to be gathered and assessed. Staff that attended the meeting provided responses and information to questions from residents. The local Property Manager served as the meeting facilitator and recorder. Some residents provided feedback to the PH Manager directly due to their inability to attend the meeting. General Overview: Tenants attending the meetings represented a cross section of demographics from the communities. All meetings required Spanish /English translation support. There were no issues expressed as critical or of extreme need, although across all sites, residents had suggestions for improving the physical site as well as adding more amenities to the apartments such as, dishwashers, garbage disposals , ice makers, ceiling fans and carports. These items have been suggested in the past. Changes to the ACOP regarding on‐line applications and restructure of the wait lists were discussed. The resident stated most folks have a computer these days and there is always the library, community center and other places to use a computer. Questions arose about the conversion of the Public Housing units to project based rental assistance. They were assured that it is a long process but as information is received, additional meetings would be held to keep them informed. Other common issues included routine maintenance services. These issues were resolved by issuing a routine work order. Suggestions for improvements from the Communities included: Improve landscaping, new doors, upgraded bathrooms and kitchens, dryer hook ups (at the locations that do not have them), dishwashers, ceiling fans, pantry doors, new flooring, police night patrol or security guards and gated entries. 1 89 Public Housing January 29, 2016 RAD COMMUNITY MEETING Subj: Presentation of RAD Conversion and Rehab 10:00 AM and adjourned at 11:30 AM I. Introductions – Meeting started with introduction of HAMC staff and (7) residents who were in attendance. II. RAD Conversion and Property Management / PBV’s Section 8 process‐ Gloria explained RAD on how it would affect the residents and how Public Housing would turn into a more stable Section 8 funding platform. RAD is a financing tool to be applied to at risk Public and Assisted Housing. Promote efficiency within and among HUD programs and builds strong, stable communities. Gloria also discussed the living condition of residents would be improved by RAD. Donna also stated that the conversion would help to beautify the property. Gloria and Donna explained the difference between the Housing Choice Voucher and the Project Base Voucher. They also stated that resident rent amount would not be affected. Resident would continuing paying their 30% of their adjusted gross income. If monthly rent increases by more than greater of 10% or $25 purely as a result of conversion (only likely in “flat rent” scenarios), rent increases will be phased in over 3 years (or5 years if PHA elects). No rescreening of residents upon conversion and will not affect continued residency. Gloria discussed that the conversion change would go into effect by December 2016. Resident would receive a 30 day notice with all changes upon signing of a new lease. Ruben Moreno in unit #108 and Stephanie Pope in unit #603 were inquiring about transferring back to Madison Height once construction was completed. Gloria then stated that Griselda Moreno would start obtaining a list of tenants who were requesting a transfer back to Madison Heights. Public Housing Office ‐ «Project_Address» «Project_CSTZip» www.maricopahousing.org Public Housing III. Rehab/Repairs ‐ Ernesto explained on what type of rehab would be occurring under the new program of RAD. Which included flooring, kitchen and bathroom cabinets, tub, interior and exterior lighting, a/c replacement, landscaping and roof. Ernesto also stated that resident would not have to move during the rehab construction. Residents will have the right to return if rehab or construction requires temporary relocation. Ernesto’s forecast is that HAMC will be investing $300,000 in rehab work to Rose Terrace within the next 20 years. Ernesto anticipates that the rehab completion date would be around December 2016. IV. Resident input/questions – Resident questions were made throughout the meeting and were addressed appropriately with the information stated above. IN ATTENDANCE HAMC STAFF Gloria Munoz, Executive Director Donna Ybarra, Asset Manager Director Griselda Moreno, RT Manager Mary Hermosillo, RT Asst. Manager RESIDENTS IN ATTENDANCE Stephanie Pope #603 Ruben & Maria Moreno #108 Carolyn Pope #117 Ruben Mercado #102 Gloria Concepcion #110 Virginia Patino Gonzalez #616 Public Housing Office ‐ «Project_Address» «Project_CSTZip» www.maricopahousing.org Public Housing Maricopa Revitalization Program RAD Project ‐ Resident Meeting Minute Date: Thursday, January 28th, 2016 Time: 10:00 am ‐ 11:00 am Meeting place: Mesa Office – 710 W. 8th Ave. Mesa AZ 85210 Meeting facilitators: Gloria Munoz and Donna Ybarra Staff: Ernesto Fonseca, Diane Kochen & Reina Hart Tenants: Phylllis Sinclair‐Caban (Larry Nelson), Sharon Ellington and Cheri Fox INTRODUCTION: Gloria presented RAD (Rental Assistance Demonstration) Project to the tenants. RAD CONVERSION: The Rental Assistance Demonstration (RAD) program will convert the current public housing model to a Project Based Section 8 (PBV) contract. The program will allow HAMC to operate the property using Section 8 rents and provides the resident an opportunity to maintain rental subsidy. REHAB/REPAIRS: A third party contractor EMG was hired to inspect the units for repairs and capital needs. EMG report identifies initial repairs and a 20 year schedule of repairs. The repairs identified in the report will started after the conversion is completed. HAMC anticipates this to be in December 2016. PROPERTY MANAGEMENT/PBVs/Section 8 Process: The conversion will allow residents currently living in the property at the time of conversion to be grandfather in without re‐screening. The program will require paperwork and a new lease. The residents will be given a 30 day notice to complete the paperwork and sign the new lease. Public Housing Office – 710 W. 8th Ave., Mesa AZ 85210 – Ph. 602 744 4563 www.maricopahousing.org Public Housing Tenants will have a Section 8 Housing Specialist at the Main Office in addition to the Property Manager located in Mesa. Resident Input/Questions: Tenants mentioned some issues they have with their refrigerators, stoves and cooling system. HAMC asked the residents to complete work orders for normal day to day request for repairs. Adjournment: The meeting was adjourned at 11 am. Public Housing Office – 710 W. 8th Ave., Mesa AZ 85210 – Ph. 602 744 4563 www.maricopahousing.org Appendix D: Financial Audit 90 THE HOUSING AUTHORITY OF MARICOPA COUNTY FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR ENDED JUNE 30, 2014 91 THE HOUSING AUTHORITY OF MARICOPA COUNTY TABLE OF CONTENTS FOR YEAR ENDED JUNE 30, 2014 Page INDEPENDENT AUDITOR’S REPORT i MANAGEMENT’S DISCUSSION & ANALYSIS 1 BASIC FINANCIAL STATEMENTS STATEMENT OF NET POSITION 6 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 7 STATEMENT OF CASH FLOWS 8 NOTES TO THE FINANCIAL STATEMENTS 10 SUPPLEMENTAL INFORMATION COMBINING FINANCIAL STATEMENTS OF DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENT OF NET POSITION 23 COMBINING STATEMENT OF REVENUES, EXPENSES, & CHANGES IN NET POSITION 24 FINANCIAL DATA SCHEDULE 25 COMPLIANCE AND SINGLE AUDIT REPORTING REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENT PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ii REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 iii SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 50 NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 51 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 52 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 55 92 Independent Auditor’s Report Board of Commissioners Housing Authority of Maricopa County Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities and the aggregate discretely presented component units of the Housing Authority of Maricopa County, Arizona (the Authority), a component unit of Maricopa County as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise Housing Authority of Maricopa County’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Housing Authority of Maricopa County’s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Maricopa Revitalization Partnership LLC, which represent 24 percent, 46 percent, and 19 percent, respectively, of the assets, net position, and operating revenues of the aggregate discretely presented component units. Those financial statements were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the aggregate discretely presented component units, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the aggregate discretely presented component units were not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 93 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Housing Authority of Maricopa County as of June 30, 2014, and the changes in its financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 1, the Housing Authority of Maricopa County has implemented Governmental Accounting Standards Board (GASB) Statement No. 65 Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 1-5 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board 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. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise Housing Authority of Maricopa County’s basic financial statements. The Financial Data Schedule, required by Uniform Financial Reporting Standards, issued by the Department of Housing and Urban Development, the Combining Statements of Component Units and Schedule of Expenditures of Federal Awards, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Financial Data Schedule, Combining Statements of Component Units, and the Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Financial Data Schedule, Combining Statements of Component Units, and the Schedule of Expenditures of Federal Awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 94 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 13, 2014 on our consideration of Housing Authority of Maricopa County’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 to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Housing Authority of Maricopa County’s internal control over financial reporting and compliance. Maletta & Company Certified Public Accountants Bristol, Connecticut November 13, 2014 95 HOUSING AUTHORITY OF MARICOPA COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30, 2014 Our discussion and analysis of the Housing Authority of Maricopa County’s financial performance provides an overview of the Authority’s financial activities for the fiscal year ended June 30, 2014. Please review it in conjunction with the Authority’s basic financial statements, which begin on page 6. FINANCIAL HIGHLIGHTS The Authority received reservation approval for 439 units previously known as Coffelt-Lamoreaux and Norton/O’Neil/Madison. In addition, the Authority entered into commitments to rehabilitate and develop the previously mentioned RAD approved units with a total budgeted development cost of approximately $75 million. As a result, the Authority has obligated the approximately $1.6 million in cash restricted for modernization to the Coffelt-Lamoreaux development and secured another $150,000 in local grants to help fund pre-development activities. All of such funding remained unspent as of the end of the audit period. The Authority executed an Energy Performance Contract (EPC) with Honeywell International to retrofit public housing units to improve energy efficiencies. The EPC has recently been completed pending final energy audit and closeout. As a result, the Authority incurred a Capital Lease obligation of $1,792,280, payable over the next 15 years, which represents the total cost of the EPC. Housing Choice Voucher receives funding based on a HUD calculation of estimated need. HUD funding for HAP expenditures is restricted until spent. As of June 30, 2014, the total HAP funding in excess of expenditures (Restricted Net Position) was $403,515. The Authority did not have the cash available to repay or utilize these funds for their restricted purpose. The total cash deficiency was $229,857. The cash deficiency represents an improvement from the prior year due to positive program operating results and other adjustments to the restricted balance. Based on the current trend of restricted net position usage, Housing Choice Voucher would require these funds in the immediate future. Further, HUD and the Authority are currently pursuing resolution of this deficiency. The Authority’s government-wide financial statements of the primary government reflect a current ratio, adjusted to remove certain restricted cash, of 3.08 compared to 4.18 in the prior year. Current ratio measures entities liquidity and is computed by dividing current assets by current liabilities. A ratio of less than one generally constitutes a poor performing entity as assets are not available to pay liabilities. The Authority’s ratio suggests that the entity is in strong financial condition as assets are available to satisfy near term liabilities. The Authority’s change in net position decreased by $724,673, which includes approximately $500,000 in HUD funding reductions as a result of the HUD mandated use of restricted HAP reserves (NRA). The adjusted deficit in net position of $(224,673) more accurately reflects current operating results. The adjusted deficit primarily related to the negotiated repayment agreement for prior year resulting in a one-time charge of $115,524 and approximately $100,000 in consulting fees to assist with significant staff turnover that occurred late last fiscal year. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of a series of financial statements and required supplemental information. The Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net Position and Statement of Cash Flows on pages 6-9 provide information about the activities of the Authority as a whole and present a longer-term view of the Authority’s finances. The HUD Financial Data Schedule reported as supplemental information starts on page 24. The supplemental information report the Authority’s operations in more detail than the financial statements by providing information about the Authority by program or grant. - 1 - 96 HOUSING AUTHORITY OF MARICOPA COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 GOVERNMENT-WIDE FINANCIAL ANALYSIS The Statement of Net Position and Statement of Changes in Net Position The Statement of Net Position and Statement of Changes in Net Position provide information about the Authority as a whole and about its activities. These statements include all assets and liabilities using the accrual basis of accounting that is used by most private sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the Authority’s net position and changes in them. The difference between assets and liabilities or net position is one way to measure the Authority’s financial health. Overtime, increases or decreases in the net position are one indicator of whether its financial position is improving or deteriorating. The higher the net position figure is, generally, the better the financial position. However, this information does not reflect ongoing fluctuations in the economic climate, regulatory changes, or other external forces that impact an entity’s financial position, but which may not be quantifiable as of the financial statement date. The Authority’s total Net Position was $29,265,119 at June 30, 2014. Table 1 Statement of Net Position (In millions) Total Total Change 2014 2013 Cash and Cash Equivalents $ 5.50 $ 4.59 $ 0.91 Other Current Assets 1.33 1.37 (0.04 ) Noncurrent Assets 26.18 25.26 0.92 Total Assets $ 33.01 $ 31.22 $ 1.79 Current Liabilities $ 1.65 $ 0.97 $ 0.68 Long Term Obligations 2.10 0.26 1.84 Total Liabilities $ 3.75 $ 1.23 $ 2.52 Net Investment in Capital Assets $ 19.81 $ 20.20 $ (0.39 ) Restricted 2.00 2.20 (0.20 ) Unrestricted 7.45 7.59 (0.14 ) Total Net Position $ 29.26 $ 29.99 $ (0.73 ) The increase in Cash and Cash Equivalents, Noncurrent Assets, Current Liabilities, and Long Term Obligations is primarily due to the HUD energy performance contract (EPC), in which the Authority leases energy efficient equipment for Public Housing units from PNC. The related activity includes: $1.72 million in additional long-term obligations, of which, $1.4 million was expended and included in noncurrent assets, $1.1 million in unpaid expenditures reported in Current Liabilities, and the resulting $1.42 million remaining in restricted Cash to be used on the unpaid expenditures in current liabilities and 300K in unexpended debt proceeds. All other increases and/or deceases result from the normal course of business. - 2 - 97 HOUSING AUTHORITY OF MARICOPA COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONT’D) The decrease in Net Position of $0.72 million is explained in more detail on Table 2. Table 2 compares the 2014 change in Net Position to the 2013 change in Net Position. Table 2 Changes in Net Position (In millions) Total Total Change 2014 2013 Program Revenues: Rental Income $ 1.50 $ 1.39 $ 0.11 Operating Grants 15.53 17.43 (1.90 ) Capital Grants Received 0.98 1.08 (0.10) Transfers Primary Gov’t -0- 0.03 (0.03) Gov’t Combinations -0- 2.11 (2.11) Other Revenue 5.32 4.78 0.54 Total Revenues 23.33 26.82 (3.49 ) Program Expenses: Admin 2.66 2.72 (0.06 ) Tenant Services 0.13 0.20 (0.07) Utilities 0.86 1.00 (0.14) Maint. & Operating 1.78 1.65 0.13 General & Insurance 0.86 0.79 0.07 Housing Assistance 16.29 17.07 (0.78) Depreciation 1.47 1.41 0.06 Total Expenses 24.05 24.84 (0.79 ) Change in Net Position $ (0.72 ) $ 1.98 $ (2.700) The decrease in Operating Grants of ($1.90) million primarily related to HCV program funding. A decrease in unit months leased of almost 2,000 units caused a decrease in funding of approximately $1,500,000, in addition to HUD’s mandated use of program reserves in place of HAP funding totaling $500,000. The rapid decrease in leased units was in part a reaction to feared over leasing at the program in prior audit period, which was later determined to be incorrectly reported. The decrease in Housing Assistance of ($0.78) million reflects $1.2 million in payment reductions due to the decrease in lease-up noted above net of an increase of $500,000 in portability in vouchers due to continued inflow of participants into the Authority’s jurisdiction. The decrease in revenue related to Government Combinations of ($2.11) million relates to the prior year additions of the City of Peoria HCV program and an additional component unit. These events are non-routine in nature and therefore are not expected to occur on an annual basis. All other increases and/or deceases result from the normal course of business. - 3 - 98 HOUSING AUTHORITY OF MARICOPA COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of June 30, 2014, the Authority had $21.12 million invested in a broad range of capital assets, including land, buildings, furniture and equipment. Table 3 Capital Assets Beginning Additions Deductions Ending Nondepreciable Assets: Land $ 4,527,044 $ -0- $ -0- $ 4,527,045 Depreciable Assets: Buildings & Improvements 50,472,048 533,818 -0- 51,005,866 Equipment 870,379 -0- (7,291) 863,088 Construction in Progress -0- 1,853,543 -0- 1,853,543 55,869,471 2,387,361 (7,291) 58,249,541 Accumulated Depreciation (35,671,993 ) (1,466,526) 4,860 (37,133,659 ) Net Book Value $ 20,197,478 $ 21,115,882 Construction in Progress includes $1,404,783 of the energy efficient equipment being constructed in relation to the HUD energy performance contract. The remaining $448,760 represents the current costs to retrofit Clare Feldstadt (AMP 2) to six, one bedroom units funded primarily through a $390,000 Gila River Indian Community (GRIC) grant and HUD Replacement Housing Factor (RHF) funds. The additions to Buildings and Improvements include capital expenditures financed with HUD Capital Grants. Long-term Debt The Authority incurred long-term debt obligations totaling $1,907,804, including $1,792,280 payable to PNC in accordance with the EPC capital lease obligation and a $115,524 repayment agreement with HUD. ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS Significant economic factors affecting the Authority are as follows: The Authority had submitted applications for HUD’s Rental Assistance Demonstration (RAD) program, which allows, amongst other things, conversion and modernization of its public housing units into stand-alone affordable housing projects with continued HUD rental assistance. In addition to the current year reservation, the Authority is on the waiting list for the remaining 455 of its public housing units. Commencement of RAD activities in the form of predevelopment loan activity utilizing public housing reserves. Finalization of the Energy Performance Contract. Completion of the retrofit of Clare Feldstadt units. Commencement of Project Based Vouchers at Maricopa Revitalization Partnership, a discretely presented component unit. - 4 - 99 HOUSING AUTHORITY OF MARICOPA COUNTY MANAGEMENT’S DISCUSSION AND ANALYSIS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 Significant economic factors (cont’d): Uncertainty in future HUD HCV Funding due to current economic conditions. The current admin fee proration is up to 79.51% of the HUD established fees, which represents an increase from the 2013 funding year. It is expected that 2015 will fall in the same range. Increase in Pension and Health Insurance costs, including required reporting of any unfunded pension obligations as determined by the pension trust fund. Inflationary pressure on utility rates, maintenance contracts and other costs. Local labor supply and demand, which affects salary and wage rates. CONTACTING THE AUTHORITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens with a general overview of the Authority’s finances and to demonstrate the Authority’s accountability for the money it receives. If you have any questions about this report or need additional financial information, contact Mary Driessen, Finance Manager at 8910 N. 78th Ave., Peoria, AZ 85345. - 5 - 100 THE HOUSING AUTHORITY OF MARICOPA COUNTY STATEMENT OF NET POSITION AS OF JUNE 30, 2014 Primary Discretely Presented Government Component Units ASSETS Current Assets Cash & Cash Equivalents - Unrestricted $ 2,550,139 $ 62,569 Cash & Cash Equivalents - Restricted 2,946,820 230,849 Tenant Accounts Receivable, net of Allowances 24,646 - Accounts Receivable - HUD 436,533 9,030 Accounts Receivable - Other, net of Allowances 768,641 - Inventory 57,634 - Prepaid Expenses 47,204 10,407 Total Current Assets 6,831,617 312,855 Noncurrent Assets Capital Assets, net of A/D Nondepreciable 4,527,045 210,500 Depreciable 16,588,837 12,210,241 Notes Receivable, net of Allowances 5,065,000 - Total Noncurrent Assets 26,180,882 12,420,741 Total Assets 33,012,499 12,733,596 DEFERRED OUTFLOWS OF RESOURCES Total Deferred Outflows of Resources - - LIABILITIES Current Liabilities Accounts Payable - Vendors and Contractors 1,009,089 12,175 Tenant Security Deposits Payable 177,277 31,085 Accounts Payable - Other 74,398 25,017 Accounts Payable - Related Parties - 266,874 Accrued Wages & Related Payables 71,743 5,909 Accrued Compensated Absences 17,081 57 Accrued Interest Payable 16,521 34,103 Accrued Liabilities - Other 175,475 36,120 Current Portion of Long Term Debt 11,552 54,821 Unearned Revenue 92,052 438 Total Current Liabilities 1,645,188 466,599 Noncurrent Liabilities Accrued Compensated Absences 153,723 14,304 Capital Lease Obligations 1,792,280 - Long Term Debt 92,419 8,573,681 Other Liabilities 63,770 4,107,067 Total Noncurrent Liabilities 2,102,192 12,695,052 Total Liabilities 3,747,380 13,161,651 DEFERRED INFLOWS OF RESOURCES Total Deferred Inflows of Resources - - Net Position Net Investment in Capital Assets 19,815,820 470,663 Restricted for: Housing Assistance Payments 403,515 Modernization and Development 1,598,073 33,228 Debt Service - 165,000 Unrestricted 7,447,711 (1,096,946) Total Net Position $ 29,265,119 $ (428,055) The accompanying notes are an integral part of these financial statements. 101 -6- THE HOUSING AUTHORITY OF MARICOPA COUNTY STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED JUNE 30, 2014 Primary Discretely Presented Government Component Units Operating Revenue Rental Revenue - Gross Potential $ 1,503,615 $ 284,907 Rental Assistance - Project Based Vouchers - 395,678 Rental Assistance - PH Operating Subsidy - 160,400 HUD Operating Grants 15,529,154 - Fees for Other Services 5,230,585 - Other Revenue 86,223 78,133 Total Operating Revenue 22,349,577 919,118 Operating Expenses Administrative 2,663,420 308,296 Tenant Services 132,493 517 Utilities 855,844 124,881 Ordinary Maintenance and Operations 1,776,368 436,083 Insurance Premiums 276,070 54,087 General 581,753 73,042 Housing Assistance Payments 16,285,491 - Depreciation 1,466,526 445,506 Total Operating Expenses 24,037,965 1,442,412 Operating Income (Loss) (1,688,388) (523,294) Nonoperating Revenues (Expenses) Nonroutine Maintenance & Replacement - (74,779) Interest Expense (16,521) (436,636) Gain (Loss) on Sale of Capital Assets (2,430) - Interest Income 88 1 Total Nonoperating Revenues (Expenses) (18,863) (511,414) Income (Loss) before Capital Contributions (1,707,251) (1,034,708) Capital Contributions 982,578 457,487 Change in Net Position (724,673) (577,221) Net Position, Beginning of Period - Restated 29,989,792 149,166 Net Position, End of Period $ 29,265,119 $ (428,055) The accompanying notes are an integral part of these financial statements. -7- 102 THE HOUSING AUTHORITY OF MARICOPA COUNTY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2014 Primary Government Cash Flows from Operating Activities: Cash Received from Operations $ 6,798,401 HUD Operating Grants 15,514,710 Housing Assistance Payments (16,285,491) Payments to Vendors (3,406,441) Payments to Employees (2,134,104) Other Receipts (Payments) 102,212 Net Cash Provided by (Used in) Operating Activities 589,287 Cash Flows from Noncapital Financing Activities: Payments on Long Term Debt (11,553) Net Cash Provided by (Used in) Noncapital Financing Activities (11,553) Cash Flows from Capital and Related Financing Activities: Purchases of Capital Assets (2,387,364) Proceeds from Acquisition of Debt 1,792,280 Payments on Long Term Debt - Capital Grants Received 923,713 Net Cash Provided by (Used in) Capital & Related Financing Activities 328,629 Cash Flows from Investing Activities: Interest Income 88 Net Cash Provided by (Used in) Investing Activities 88 Net Increase (Decrease) in Cash 906,451 Cash at the Beginning of the Period 4,590,508 Cash at the End of the Period $ 5,496,959 The accompanying notes are an integral part of these financial statements. -8- 103 THE HOUSING AUTHORITY OF MARICOPA COUNTY STATEMENT OF CASH FLOWS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 Primary Government Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Operating Income (Loss) $ (1,688,388) Adjustments to Reconcile Change in Net Cash Provided by Operating Activities: Depreciation Expense 1,466,526 HUD Operating Debt 115,524 Change in Operating Assets and Liabilities: Decrease (Increase) in Receivables (3,149) Decrease (Increase) in Inventory 62,131 Decrease (Increase) in Prepaid Expenses 7,772 Increase (Decrease) in Accounts Payable 607,949 Increase (Decrease) in Other Liabilities 20,922 Net Cash Provided by (Used in) Operating Activities $ 589,287 Noncash investing, capital, and financing activities During the reporting period, the Authority received Capital lease proceeds to improve public housing units. Costs of improvements include payments in process and retainage payable totaling $1,076,456. There were no payments made on the Capital lease. The accompanying notes are an integral part of these financial statements. -9- 104 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2014 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Housing Authority of Maricopa County Arizona (the Authority) is organized under the laws of the State of Arizona for the purpose of providing adequate housing for qualified low income individuals. Founded in 1943, the Authority owns and operates 16 housing communities located in Mesa, Guadalupe, Phoenix, Avondale, Tolleson, Buckeye, Peoria, Surprise and El Mirage. In July 1, 2003, the Maricopa County Board of Supervisors authorized the creation of the Housing Authority of Maricopa County to provide efficient and affordable rental housing units to low-income households of Maricopa County, pursuant to Arizona Revised Statutes (A.R.S.) 36-1404. The Authority is governed by the Board of Commissioners whom are appointed by the Maricopa County Board of Supervisors. Additionally, the Authority has entered into annual contribution contracts with the U.S. Department of Housing and Urban Development (“HUD”) to be the administrator of the housing and housing related programs described herein. The Authority is not subject to Federal or State income taxes and is not required to file Federal or State income tax returns. Reporting Entity The Authority’s financial reporting entity comprises the following: Primary Government: The Housing Authority of Maricopa County In determining the financial reporting entity, the Authority complies with the provisions of GASB Statement No. 61, The Financial Reporting Entity: Omnibus and includes all component units of which the Authority appointed a voting majority of the units’ board; the Authority is either able to impose its will on the unit or a financial benefit or burden relationship exists. These criteria include manifestation of oversight responsibility including financial accountability, appointment of a voting majority, imposition of will, financial benefit to or burden on a primary organization, financial accountability as a result of fiscal dependency, potential for dual inclusion, and organizations included in the reporting entity although the primary organization is not financially accountable. As the Maricopa County Board of Supervisors serves as the Authority’s Board of Commissioners, the County is able to significantly influence the programs, projects, activities, or level of services provided by the Authority. As such, the financial statements of the Authority are also reported in the Maricopa County Comprehensive Annual Financial Report as a blended component unit. Blended Component Units Blended component units are separate legal entities that meet the component unit criteria described above and whose governing body is the same or substantially the same as the Authority’s Board of Commissioners or the component unit provides services entirely to the Authority. These component units’ funds are blended into those of the Authority’s by appropriate activity type to compose the primary government presentation. Currently, the Authority has two component units that meet the criteria for blending. The Authority serves as the managing member and/or owns a majority interest in CSA-Rose Terrace LLC and CSA-Maricopa Revitalization LLC, which act as general partners in three LIHTC partnerships. The entities were created for the sole purpose of providing the Authority access to private and other outside financing necessary to create, develop and rehabilitate certain low income housing units; thereby enabling the Authority to carry out its mission of providing adequate and sufficient affordable housing. Discretely Presented Component Units Discretely presented component units are separate legal entities that meet the component unit criteria described above but do not meet the criteria for blending. - 10 - 105 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The Authority owns a stake in the general partners of three Low Income Housing Tax Credit (LIHTC) partnerships. The partnerships’ interests are held by third parties unrelated to the Authority. As the general partner, the Authority has certain rights and responsibilities which enable it to impose its will on the limited partnerships. In addition, the Authority has a financial benefit and burden relationship as the Authority has assumed the obligation to provide financial support to the organizations and has provided loans and advances to the entities amounting to approximately $8 million as of June 30, 2014. The partnerships do not serve the primary government exclusively, or almost exclusively, and therefore, are shown as discretely presented component units. The Authority has three discretely presented component units that operate on a December 31st year end, and are described as follows: Maricopa Revitalization Partnership, LLC, an Arizona limited liability company, was formed on September 10, 2001, for the purpose of rehabilitation and operating a qualified low-income housing project that qualifies for low-income housing credits under §42 of the Internal Revenue Code. The project consists of 35 units for rent to individuals and families of low and moderate income in Mesa, Arizona, and operates under the name of Maricopa Revitalization Partnership, LLC. As of December 31, 2013, Maricopa Revitalization Partnership, LLC, had an outstanding loan to the Authority of $2,065,000 and accrued interest on the loan of $1,399,655. Rose Terrace Development Partnership, LLC an Arizona limited liability company, was formed on September 11, 2001, for the purpose of constructing and operating a qualified low-income housing project that qualifies for low-income housing credits under §42 of the Internal Revenue Code. The project consists of a 100 unit apartment complex for rental to individuals and families of low and moderate income in Avondale, Arizona, and operates under the name of Rose Terrace Development Partnership, LLC. As of December 31, 2013, Rose Terrace Development Partnership, LLC had an outstanding loan to the Authority of $3,000,000 and accrued interest on the loan of $1,809,815. Rose Terrace Development Partnership Phase II, LLC an Arizona limited liability company, was formed on July 26, 2002, for the purpose of constructing and operating a qualified low-income housing project that qualifies for low-income housing credits under §42 of the Internal Revenue Code. The project consists of a 20 unit apartment complex for rental to individuals and families of low and moderate income in Avondale, Arizona, and operates under the name of Rose Terrace Development Partnership, LLC. Complete financial statements for each of the individual discretely presented component units may be obtained at the Authority’s administrative office: Housing Authority of Maricopa County 8910 N. 78th Avenue Peoria, AZ 85345 Measurement Focus and Basis of Accounting Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. The Authority’s funds are accounted for on the flow of economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time the liabilities are incurred. With this measurement focus, all assets and all liabilities associated with the operation are included on the Statement of Net Position. - 11 - 106 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Operating Revenue includes rental income, operating grants, management services income and all other revenue relating to the provision of safe, decent, and affordable housing that do not result from transactions defined as capital and related financing, non-capital and related financing, or investing activities. Operating expenses include wages, housing assistance payments, utilities, maintenance, depreciation, and all other expenses relating to the provision of safe, decent, and affordable housing that do not result from transactions defined as capital and related financing, non-capital and related financing, or investing activities. In addition, the Authority receives capital grants from HUD to be used for various purposes connected with the planning, modernization, and expansion of housing facilities and equipment. Receipts used for non-capitalizable costs are reported as operating revenue and receipts used for capitalization costs are reported as capital contributions. The Authority has elected to report as a single enterprise proprietary fund and its primary operations comprise a number of housing and grant programs as follows: The Public Housing Program operates under HUD’s Annual Contribution Contract and consists of the operations of low rent public housing properties totaling 1,059 units. The purpose of the program is to provide decent and affordable housing to low-income families at reduced rents. The properties are owned, maintained, and managed by the Authority. The properties are acquired, developed, and modernized under HUD’s Capital Fund Program. Funding of the program is provided by federal annual contributions and operating subsidies and tenant rentals (determined as a percentage of family income, adjusted for family composition). The Housing Choice Voucher Program provides rental housing assistance subsidies in support of 1,562 housing units. The purpose of the program is to provide decent and affordable housing to low income families and elderly and handicapped persons wherein rental assistance is provided by HUD. The associated units are owned, maintained and managed by private landlords. The Capital Fund Program accounts for the capital and management improvement activities, primarily for the modernization and development of low-rent public housing units. The Resident Opportunities and Support Services (ROSS) and ROSS Family Self Sufficiency (FSS) Programs provides public housing residents supportive services, resident empowerment activities and assistance in becoming economically self-sufficient. The financial statements of the Authority are prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The financial statements include: 1. A Management Discussion and Analysis (MD&A) section providing an analysis of the Authority’s overall financial position and results of operations. 2. Financial statements prepared using full accrual accounting for all of the Authority’s activities. - 12 - 107 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D) Cash and Cash Equivalents Cash and cash equivalents represent cash in checking accounts, money market funds or short-term investments with original maturities of three months or less. Accounts Receivable Management periodically assesses the collectability of its receivables and establishes an allowance for uncollectible accounts for all accounts it deems uncollectible. Currently, there is a $38,058 allowance established for tenant receivables in its public housing program and a $134,673 allowance for other receivables. Inventory The Authority’s inventory consists of materials and supplies used to maintain its rental stock. The inventory is valued using the weighted average method and recorded at cost. Capital Assets Land, buildings, and equipment are stated at cost and depreciated over their estimated useful lives. The capitalization threshold is $5,000. Donated assets are recorded at estimated market value as of the date of the donation. Construction in progress costs are not depreciated until the corresponding projects are completed. Depreciation has been provided over the following useful lives using the straight-line method of depreciation as follows: Building and Improvements 10 to 50 years Machinery and Equipment 5 to 15 years Capitalized Interest Interest costs are capitalized when incurred on debt where proceeds were used to finance the construction of assets. Leases The Authority leases most of its buildings and improvements to tenants in the form of operating leases. Leases are for a period of one year, cancellable upon sufficient notice. As of June 30, 2014, the total cost of leased property was $49,760,133 with accumulated depreciation of $36,654,542, for a carrying amount of $13,105,591. Compensated Absences Employees accumulate vacation and sick days for subsequent use or payment upon termination. Compensated absences are accrued when incurred and reported as a liability until paid. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses used during the reporting period. Actual results could differ from those estimates. Significant estimates include the economic lives of capital assets and allowances for doubtful accounts. - 13 - 108 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 Use of Restricted Funds When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as they are needed. Equity Classifications Equity is classified as net position and displayed in three components in the Statement of Net Position. 1. Net Investment in Capital Assets consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. 2. Restricted consists of net position with constraints place on the use either by (1) external groups such as creditors, grantors, contributions, or laws or regulations or other governments; or (2) law through constitutional provisions or enabling legislation. The Primary Government’s restricted net position consist of unspent Housing Assistance Payment funding, unspent Capital Lease proceeds, and asset disposition proceeds restricted from use by HUD. 3. Unrestricted consists of all other net position that do not meet the definition of Restricted or Net Investment in Capital Assets. Change in Accounting Principle The Authority adopted GASB Statement No. 65 Items Previously Reported as Assets and Liabilities on July 1, 2013. The implementation of this principle decreased the Authority’s prior period net position related to the aggregate discretely presented component units; there was no effect on the primary government. NOTE 2 – DEPOSITS WITH FINANCIAL INSTITUTIONS AND INVESTMENTS Custodial Credit Risk for Deposits and Investments The Authority maintains cash with FDIC depository banks. Custodial credit risk has been calculated based on the FDIC limit of $250,000. Additional protection against loss is provided for deposits in excess of depository insurance by a pledge of securities from the depository bank at 110 percent of the uninsured amount except for restricted funds held in trust by outside custodians on behalf of the Authority. As of June 30, 2014, the Authority reported deposits of $5,496,959, with a bank balance of $5,859,286, of which, $500,000 was covered by FDIC, and $5,359,286 was exposed to custodial credit risk as follows: $4,192,616 was collateralized with securities held by the depository bank and $1,166,670 was uninsured and uncollateralized. Uncollateralized deposits represent restricted funds held by an outside custodian as required by certain contractual provisions, of which the Authority has little control to avoid. The breakdown of restricted deposits reported as of June 30, 2014 is as follows: Primary Restrictions on Deposits Government Restricted Cash - Modernization and Development $ 1,598,073 Restricted Cash - Housing Assistance Payments 173,658 Restricted Cash - Security Deposits 177,277 Restricted Cash for Current Liabilities 997,812 Total Restricted Cash $ 2,946,820 - 14 - 109 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 3 – ACCOUNTS RECEIVABLE - OTHER Accounts receivables - Other represents all receivables other than tenant and HUD receivables as follows: Program Other Government Grants $ 99,885 Public Housing Component Units* 409,918 Public Housing Component Units 34,620 COCC PHA Projects - Portability* 224,218 Housing Choice Voucher Total Accounts Receivable – Other $ 768,641 * Balance net of allowance for doubtful accounts. NOTE 4 – CAPITAL ASSETS The following is a summary of the changes in Capital Assets during the year: Beginning Additions Deductions Ending Primary Government Nondepreciable Assets: Land $ 4,527,044 $ - $ - $ 4,527,044 Depreciable Assets: Building & Improvements 50,472,048 533,818 - 51,005,866 Equipment 870,379 - (7,291) 863,088 Construction in Progress - 1,853,543 - 1,853,543 Total 55,869,471 2,387,361 (7,291) 58,249,541 Accumulated Depreciation (35,671,993) (1,466,526) 4,860 (37,133,659) Net Book Value $ 20,197,478 $ 21,115,882 Fixed Asset Additions: Capital improvements made on the Authority’s Public Housing stock are financed primarily by grant funds provided by HUD under the Capital Fund Program (CFP). Funds provided through these programs are used to rehabilitate and extend the useful life of the housing stock. CFP grants are awarded annually based on a 5 year comprehensive modernization plan submitted by the Authority. In addition, the Authority entered into an Energy Performance Contract with HUD to provide energy efficiencies to its public housing stock totaling $1,792,280, of which $1,404,783 was incurred as of June 30, 2014 and included in Construction in Progress. - 15 - 110 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 4 – CAPITAL ASSETS (CONT’D) Discretely Presented Component Units: The following is a summary of changes in Capital Assets of the Authority’s discretely presented component units for the year ended December 31, 2013. Beginning Additions Deductions Ending Nondepreciable Assets: Land $ 210,500 $ - $ - $ 210,500 Depreciable Assets: Building & Improvements 17,084,787 - - 17,084,787 Equipment 318,645 - (11,660) 306,985 Total 17,613,932 - - 17,602,272 Accumulated Depreciation (4,748,861) (444,330) 11,660 (5,181,531) Net Book Value $ 12,865,071 $ 12,420,741 NOTE 5 – NOTES RECEIVABLE The Authority has entered into a mixed financing arrangement with Rose Terrace Development Partnership, LLC, a component unit of the Authority, to develop apartments in Avondale, Arizona to provide housing opportunities for low-income residents. Rose Terrace Development Partnership, LLC signed a promissory note secured by a deed of trust with the Authority in the amount of $3,000,000 on December 14, 2001. The note is due 50 years after completion of the project or when the property is sold. The Capital improvements purchased with note proceeds are reflected on the financial statements of Rose Terrace Development Partnership, LLC. Interest accrues on this note at a rate of 5.05% per annum. The accrued interest receivable on the note is fully reserved. The note is a nonrecourse note with the sole remedy of default being foreclosure of the deed of trust. The Authority has entered into a mixed financing arrangement with Maricopa Revitalization Partnership, LLC, a component unit of the Authority, to rehabilitate 35 scattered site units in order to provide housing opportunities for low-income residents. Maricopa Revitalization Partnership, LLC signed a promissory note secured by a deed of trust with the Authority in the amount of $2,065,000 on July 22, 2003. The note is due May 31, 2019. Interest accrues on this note at a rate of 5.85% per annum and is fully reserved. The note was issued in exchange for the transfer of ownership of the 35 scattered sites to Maricopa Revitalization Partnership, LLC. The Cost basis of these scattered sites is reflected on the financial statements of Maricopa Revitalization Partnership, LLC. - 16 - 111 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 6 – NONCURRENT LIABILITIES The following is a summary of changes in noncurrent liabilities during the year: Due Within Beginning Additions Deductions Ending One Year Primary Government Compensated Absences $ 149,882 $ 212,490 $ (191,568) $ 170,804 $ 17,081 Capital Lease Obligation - 1,792,280 - 1,792,280 - Long-Term Debt - 115,524 (11,553) 103,971 11,552 FSS Escrows 145,898 52,528 (125,071) 73,355 9,585 Total $ 295,780 $ 2,172,822 $ (328,192) 2,140,410 $ 38,218 Less Current Portion: (38,218) Noncurrent Portion: $ 2,102,192 Discretely Presented Component Units The following is a summary of changes in noncurrent liabilities of the discretely presented component units as of December 31, 2013: Due Within Beginning Additions Deductions Ending One Year Component Units Long-Term Debt** $ 8,674,943 $ - $ (46,441) $ 8,628,502 $ 54,821 Other Noncurrent Liabilities: Accrued Interest** 2,937,168 272,302 - 3,209,470 - Deferred Developer Fee** 569,584 - (457,478) 112,106 - Due to Members 368,419 81,054 - 449,473 Due to HAMC 317,191 18,827 - 336,018 - Compensated Absences - 14,361 - 14,361 57 Investor Service Fees 5,000 - (5,000) - - Total $ 12,872,305 $ 386,544 $ (508,919) 12,749,930 $ 54,878 Less Current Portion: (54,878) Noncurrent Portion: $ 12,695,052 ** Capital Asset Related Debt - 17 - 112 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 7 – CAPITAL LEASE OBLIGATIONS The Authority entered into a long-term lease commitment for equipment that has been accounted for as a capital lease. The lease obligation is part of a HUD approved Energy Performance Contract that provides for continued Public Housing funding and certain incentives for increasing the energy efficiency of Public Housing Units. The EPC is in progress as of June 30, 2014, with $1,404,783 of the present value of the Authority’s total obligation ($1,792,280), incurred and reported as Construction in Progress pending completion, audit and HUD approval. Future minimum rent payments by year and in the aggregate as of June 30, 2014: Rent Payment Interest Principal Amount Portion Portion June 30, 2015 $ 55,068 $ 55,068 $ - 2016 124,502 66,283 58,219 2017 129,027 64,130 64,897 2018 133,716 61,730 71,986 2019 138,574 59,068 79,506 2020-2024 772,100 245,064 527,036 2025-2029 922,703 128,987 793,716 2030 204,202 7,282 196,920 $ 2,479,892 $ 687,612 $ 1,792,280 NOTE 8 – LONG TERM DEBT Primary Government The Authority entered into a repayment agreement with HUD dated March 4, 2014 totaling $115,524 to repay misused program funds as determined by the 2010 HUD Limited Management and Financial Review. The agreement bears no interest and calls for equal annual payments of $11,552 from non- federal sources beginning June 30, 2014 and ending June 30, 2023. Discretely Presented Component Units Long term debt consists of Notes and Mortgages payable by the Discretely Presented Component Units as of December 31, 2013: Maricopa Revitalization Promissory note is payable to Maricopa County Housing Department with an original loan amount of $2,065,000. The note bears interest at 5.85% per annum. Payments of principal and interest will depend on the project generating positive cash flow. The payment, depending on positive cash flow, is based on amortizing the loan over a 30-year period. Unpaid interest will accrue and add to the outstanding balance of the loan. The loan will be due and payable in full on or before May 31, 2019. Note is collateralized by investment in real estate. Accrued interest at December 31, 2013 totaled $1,278,853. Promissory note is payable to Community Service of Arizona, Inc., with an original amount of $570,000. The note bears interest at 0.50% per annum commencing on the payment due date as defined in the note agreement. The outstanding loan balance shall be paid at the earlier of the date of sale of the property; breach of covenant, condition or restriction; or 15 years after the date of the project completion. Payments are contingent on positive cash flow of the Partnership. Note is collateralized by investment in real estate. - 18 - 113 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 8 – LONG TERM DEBT (CONT’D) Rose Terrace Promissory note payable to First Bank dated December 21, 2012 for $2,619,600. The note bears interest at 4.75% through January 1, 2018. The rate then increases to the greater of 6.00% or the 5-year Treasury Rate plus 3.00%. Monthly installments of principal and interest are payable in the amount of $13,793 through January 1, 2018. The payment amount will then be adjusted to fully amortize the unpaid principal balance over the remaining life of the loan. The maturity date is October 1, 2022. As of December 31, 2013, interest expense amounted to $125,768, and accrued interest totaled $10,233. Promissory note is payable to Maricopa County Housing Department dated December 14, 2001 for $3,000,000. The note bears interest at 5.05% per annum. Accrued interest and principal shall be due and payable as the cash flow of the borrower permits. The entire balance of principal and interest shall be due and payable on December 14, 2051. Note is collateralized by investment in real estate. As of December 31, 2013, interest expense amounted to $155,407 and accrued interest totaled $1,809,815. Rose Terrace II Promissory note payable to Mutual of Omaha Bank. The note bears interest at 8.75%. Monthly principal and interest payments of $3,744, are due each month and will continue through February 2020 at which time a balloon payment of $363,157 will be due. Collateralized by investment in real estate. As of December 31, 2013, interest expense amounted to $34,658 and accrued interest totaled $1,931. Aggregate maturities of long-term debt are as follows: Principal Interest December 31, 2014 $ 54,821 $ 144,453 2015 57,666 141,608 2016 60,173 139,101 2017 63,602 135,672 2018 627,243 160,096 2019-2023 4,764,997 2,608,044 2024-2028 - - 2029-2048 - - 2049-2053 3,000,000 7,575,000 $ 8,628,502 $ 10,903,974 NOTE 9 – NET POSITION - RESTATED The Net Position of the discretely presented component units was restated to reflect the write-off of the net unamortized balance of debt issuance costs in accordance with implementation of GASB 65. The Beginning Net Position as previously reported of $245,734 was reduced by ($96,568) for a restated Net Position of $149,166. - 19 - 114 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 10 – VOUCHER NET POSITION BREAKDOWN The following is a detailed breakdown of the change in Housing Choice Voucher Net Position: Unrestricted Restricted Total Beginning Net Position $ (332,566) $ 1,095,911 $ 763,345 Revenue HUD Operating Grants 787,640 10,809,343 11,596,983 Investment Income - - - Portability-In Fees 5,186,833 - 5,186,833 FSS Forfeitures - - - Fraud Recovery 22,951 22,951 45,902 Total Revenue 5,997,424 10,832,294 16,829,718 Expenses Operating (948,065) - (948,065) Housing Assistance Payments (4,955,509) (11,329,982) (16,285,491) Total Expenses (5,903,574) (11,329,982) (17,233,556) Net Result 93,850 (497,688) (403,838) Equity Transfers 143,460 (194,708) (51,248) Ending Net Position $ (95,256) $ 403,515 $ 308,259 NOTE 11 – RETIREMENT PLAN Plan Description: The Authority is a member of the Arizona State Retirement System (ASRS), a cost-sharing multiple- employer defined benefit pension plan that covers full-time employees of the Authority. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. Benefits are established by State statute and generally provide retirement, death, long-term disability, and health insurance premium benefits. ASRS issues a publicly available report that includes financial statements and required supplementary information. Those reports may be obtained by writing Arizona State Retirement System, 3300 North Central Avenue, Phoenix Arizona, 85012. Funding Policy: Participation is mandatory for all full time employees of the Authority. The retirement plan is a pooled risk type of plan. Under this type of plan, funding is determined based on all employees covered for all employing units. The funding liabilities are shared by each employing unit pro-rata based on the number of employees in the employing unit. Since the Authority’s share of pension liability is not based on its employees, pension expense is determined by the total required payment to be made to the retirement plan for the year. The Authority is required to contribute at an actuarially determined rate. The contribution requirements of the Authority are established and may be amended by the ASRS. The Authority and each covered employee are required by state statute to contribute at the actuarially determined rate of 11.54 percent (11.30 percent retirement and 0.24 percent long-term disability) of the members’ annual covered payroll. Annual Pension Costs: The Authority’s contributions to ASRS for both employee and employer portions for the years ended June 30, 2014, 2013, and 2012 were $526,193, $495,870 and $466,815, respectively. - 20 - 115 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 12 – HUD CAPITAL GRANTS The Authority was awarded Federal development funds for modernization projects and replacement housing. Grant expenditures were audited in accordance with program requirements. The following completed grants have been fully expended, disbursed and liabilities fully paid as of June 30, 2014: AZ20-P009 AZ20-P038 501-10 501-11 501-12 Funds Authorized $ 1,238,885 $ 86,392 $ 77,986 Funds Advanced 1,238,885 86,392 77,986 Less Project Expenditures 1,238,885 86,392 77,986 Excess(Deficiency) of Advances $ - $ - $ - AZ20-R009 501-11 502-11 501-12 Funds Authorized $ 3,524 $ 51,599 $ 21,710 Funds Advanced 3,524 51,599 21,710 Less Project Expenditures 3,524 51,599 21,710 Excess(Deficiency) of Advances $ - $ - $ - The following grants are open as of June 30, 2014: AZ20-P009 501-11 501-12 501-13 501-14 Funds Authorized $ 1,037,515 $ 949,228 $ 922,870 $ 1,007,672 Funds Advanced 1,003,356 566,085 362,019 - Less Project Expenditures 1,024,570 780,751 447,026 - Excess(Deficiency) of Advances $ (21,214) $ (214,666) $ (85,007) $ - AZ20-R009 502-12 501-13 502-13 Funds Authorized $ 63,333 $ 17,549 $ 1,180 Funds Advanced - - - Less Project Expenditures 63,333 17,549 1,180 Excess(Deficiency) of Advances $ (63,333) $ (17,549) $ (1,180) - 21 - 116 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 NOTE 13 – HUD ROSS GRANTS The Authority was awarded HUD operating grants for resident services expended as follows: AZ009 RPS013-A010 RFS013-A010 RFS013-A011 Funds Authorized $ 240,000 $ 69,000 $ 34,500 Funds Advanced 202,077 69,000 22,348 Less Project Expenditures 224,868 69,000 34,500 Excess(Deficiency) of Advances $ (22,791) $ - $ (12,152) NOTE 14 – CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS The Authority’s receives a substantial portion of its revenue from HUD. The operations of the Authority are subject to the administrative directives, rules and regulations of federal, and other regulatory agencies, including, but not limited to, HUD. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by HUD. Such changes may occur with little notice or inadequate funding to pay for the related cost to comply with the change. NOTE 15 – COMMITTMENTS The Authority has entered into various commitments related to the rehabilitation and development of low income housing units. The commitments include certain current Public Housing property to be converted to LIHTC properties through HUD approved dispositions under the Rental Assistance Demonstration (RAD) program. The Public Housing units will be transferred to separate entities and funded through individual long-term rental assistance contracts. No financial activity has occurred as of June 30, 2014. The Authority’s commitments, totaling $7,942,000, include land, buildings and current public housing reserves, restricted for modernization and development, as follows: Total Development Balance on Development Cost Units Commitments Net Position Coffelt-Lamoreaux Apartment Homes $ 43,511,323 296 $ 1,602,000 Restricted Coffelt-Lamoreaux Apartment Homes 5,000,000 Invested Capital Madison Heights Phase I 16,927,210 77 721,538 Invested Capital Madison Heights Phase II 13,935,297 66 618,462 Invested Capital Total 439 $ 7,942,000 NOTE 16 – DATE OF MANAGEMENT’S REVIEW Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date require disclosure in the accompanying notes. Management evaluated the activity of the Authority through November 13, 2014 the date the financial statements were available to be issued, and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements. - 22 - 117 THE HOUSING AUTHORITY OF MARICOPA COUNTY DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENTS OF NET POSITION AS OF JUNE 30, 2014 Total Discretely Presented Maricopa Component Units Revitalization Rose Terrace I Rose Terrace II (Memo Only) ASSETS Current Assets Cash & Cash Equivalents - Unrestricted $ - $ 52,746 $ 9,823 $ 62,569 Cash & Cash Equivalents - Restricted 43,554 183,695 3,600 230,849 Accounts Receivable Tenants, net of Allowances - 3,024 6,006 9,030 Other 6,921 - 8,216 15,137 Inventory - - - - Prepaid Expenses 1,939 7,117 1,351 10,407 Total Current Assets 52,414 246,582 28,996 327,992 Noncurrent Assets Capital Assets, net of A/D Nondepreciable 206,500 4,000 - 210,500 Depreciable 2,803,210 7,681,681 1,725,350 12,210,241 Notes Receivable - - - - Other Noncurrent Assets - - - - Total Noncurrent Assets 3,009,710 7,685,681 1,725,350 12,420,741 Total Assets 3,062,124 7,932,263 1,754,346 12,748,733 LIABILITIES Current Liabilities Accounts Payable -Vendors & Contractors 2,104 10,071 - 12,175 Tenant Security Deposits 8,790 18,695 3,600 31,085 Accounts Payable - Related Parties 9,588 214,991 57,432 282,011 Accounts Payable - Other 1,536 10,615 12,866 25,017 Accrued Wages and Related Payables 1,457 3,695 757 5,909 Accrued Compensated Absences - 57 - 57 Accrued Interest Payable - 32,172 1,931 34,103 Accrued Liabilities - Other - 36,069 51 36,120 Current Portion of Long Term Debt - 43,504 11,317 54,821 Unearned Revenue 438 - - 438 Total Current Liabilities 23,913 369,869 87,954 481,736 Noncurrent Liabilities Accrued Compensated Absences 2,893 9,836 1,575 14,304 Long Term Debt 2,635,000 5,543,170 395,511 8,573,681 Other Liabilties 1,622,165 2,326,782 158,120 4,107,067 Total Noncurrent Liabilities 4,260,058 7,879,788 555,206 12,695,052 Total Liabilities 4,283,971 8,249,657 643,160 13,176,788 NET POSITION Net Investment in Capital Assets (1,024,945) 289,192 1,206,416 470,663 Restricted for: Modernization 33,228 - - 33,228 Debt Service - 165,000 - 165,000 Unrestricted Net Position (230,130) (771,586) (95,230) (1,096,946) Total Net Position $ (1,221,847) $ (317,394) $ 1,111,186 $ (428,055) - 23 - 118 THE HOUSING AUTHORITY OF MARICOPA COUNTY DISCRETELY PRESENTED COMPONENT UNITS COMBINING STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED JUNE 30, 2014 Total Discretely Presented Maricopa Component Units Revitalization Rose Terrace I Rose Terrace II (Memo Only) Operating Revenue Rental Revenue - Gross Potential $ 108,116 $ 96,117 $ 80,674 $ 284,907 Rental Assistance - Project Based Vouchers - 367,262 28,416 395,678 Rental Assistance - PH Operating Subsidy 45,639 114,761 - 160,400 Other Government Grants - - - - Other Income 14,222 39,520 24,391 78,133 Total Operating Revenue 167,977 617,660 133,481 919,118 Operating Expenses Administrative 69,887 201,455 36,954 308,296 Tenant Services - 517 - 517 Utilities 35,249 80,636 8,996 124,881 Ordinary Maint. & Operations 117,442 274,588 32,820 424,850 Protective Services - 10,312 921 11,233 Insurance Premiums 10,310 37,129 6,648 54,087 General 32,812 34,525 5,705 73,042 Housing Assistance Payments - - - - Depreciation 95,196 286,490 63,820 445,506 Total Operating Expenses 360,896 925,652 155,864 1,442,412 Operating Income (Loss) (192,919) (307,992) (22,383) (523,294) Nonoperating Revenues (Expenses) Nonroutine Maintenance & Replacement - (65,782) (8,997) (74,779) Interest Expense (120,803) (281,175) (34,658) (436,636) Gain (Loss) on Sale of Capital Assets - - - - Other Government Contributions - - - - Interest Income - - 1 1 Total Nonoperating Revenues (Expenses) (120,803) (346,957) (43,654) (511,414) Income (Loss) before Capital Contributions,Transfers & Spec Items (313,722) (654,949) (66,037) (1,034,708) Capital Contributions - 457,487 - 457,487 Change in Net Position (313,722) (197,462) (66,037) (577,221) Net Position, Beginning of Period - Restated (908,125) (119,932) 1,177,223 149,166 Net Position, End of Period $ (1,221,847) $ (317,394) $ 1,111,186 $ (428,055) - 24 - 119 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 14.877 Public 14.870 Resident 6.1 Component Unit 14.871 Housing Housing Family Self- Project Total Opportunity and - Discretely Choice Vouchers Sufficiency under Supportive Services Presented ROSS 111 Cash - Unrestricted $2,292,176 $62,569 112 Cash - Restricted - Modernization and Development $1,598,073 $33,228 113 Cash - Other Restricted $27,918 $209,514 $165,000 114 Cash - Tenant Security Deposits $177,277 $31,085 115 Cash - Restricted for Payment of Current Liabilities $929,718 $4,320 $1,536 100 Total Cash $5,025,162 $0 $213,834 $0 $293,418 121 Accounts Receivable - PHA Projects $239,036 122 Accounts Receivable - HUD Other Projects $436,533 124 Accounts Receivable - Other Government $99,885 125 Accounts Receivable - Miscellaneous $529,773 126 Accounts Receivable - Tenants $62,704 $41,959 126.1 Allowance for Doubtful Accounts -Tenants -$38,058 -$32,929 126.2 Allowance for Doubtful Accounts - Other -$119,855 -$14,818 $0 120 Total Receivables, Net of Allowances for Doubtful Accounts $970,982 $0 $224,218 $0 $9,030 142 Prepaid Expenses and Other Assets $27,280 $9,959 $10,407 143 Inventories $70,941 143.1 Allowance for Obsolete Inventories -$13,307 144 Inter Program Due From 150 Total Current Assets $6,081,058 $0 $448,011 $0 $312,855 161 Land $4,527,045 $210,500 162 Buildings $51,005,866 $17,084,787 164 Furniture, Equipment & Machinery - Administration $847,626 $15,461 $306,985 166 Accumulated Depreciation -$37,125,929 -$7,730 -$5,181,531 167 Construction in Progress $1,853,543 160 Total Capital Assets, Net of Accumulated Depreciation $21,108,151 $0 $7,731 $0 $12,420,741 171 Notes, Loans and Mortgages Receivable - Non-Current $5,065,000 180 Total Non-Current Assets $26,173,151 $0 $7,731 $0 $12,420,741 190 Total Assets $32,254,209 $0 $455,742 $0 $12,733,596 200 Deferred Outflow of Resources 120 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 1 Business 2 State/Local COCC Subtotal ELIM Total Activities 111 Cash - Unrestricted $257,963 $2,612,708 $2,612,708 112 Cash - Restricted - Modernization and Development $1,631,301 $1,631,301 113 Cash - Other Restricted $402,432 $402,432 114 Cash - Tenant Security Deposits $208,362 $208,362 115 Cash - Restricted for Payment of Current Liabilities $935,574 $935,574 100 Total Cash $0 $0 $257,963 $5,790,377 $0 $5,790,377 121 Accounts Receivable - PHA Projects $239,036 $239,036 122 Accounts Receivable - HUD Other Projects $436,533 $436,533 124 Accounts Receivable - Other Government $99,885 $99,885 125 Accounts Receivable - Miscellaneous $34,620 $564,393 $564,393 126 Accounts Receivable - Tenants $104,663 $104,663 126.1 Allowance for Doubtful Accounts -Tenants -$70,987 -$70,987 126.2 Allowance for Doubtful Accounts - Other $0 -$134,673 -$134,673 120 Total Receivables, Net of Allowances for Doubtful Accounts $0 $0 $34,620 $1,238,850 $0 $1,238,850 142 Prepaid Expenses and Other Assets $9,965 $57,611 $57,611 143 Inventories $70,941 $70,941 143.1 Allowance for Obsolete Inventories -$13,307 -$13,307 144 Inter Program Due From $32,960 $32,960 -$32,960 $0 150 Total Current Assets $0 $0 $335,508 $7,177,432 -$32,960 $7,144,472 161 Land $4,737,545 $4,737,545 162 Buildings $68,090,653 $68,090,653 164 Furniture, Equipment & Machinery - Administration $1,170,072 $1,170,072 166 Accumulated Depreciation -$42,315,190 -$42,315,190 167 Construction in Progress $1,853,543 $1,853,543 160 Total Capital Assets, Net of Accumulated Depreciation $0 $0 $0 $33,536,623 $0 $33,536,623 171 Notes, Loans and Mortgages Receivable - Non-Current $5,065,000 $5,065,000 180 Total Non-Current Assets $0 $0 $0 $38,601,623 $0 $38,601,623 190 Total Assets $0 $0 $335,508 $45,779,055 -$32,960 $45,746,095 200 Deferred Outflow of Resources 121 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 14.877 Public 14.870 Resident 6.1 Component Unit 14.871 Housing Housing Family Self- Project Total Opportunity and - Discretely Choice Vouchers Sufficiency under Supportive Services Presented ROSS 290 Total Assets and Deferred Outflow of Resources $32,254,209 $0 $455,742 $0 $12,733,596 311 Bank Overdraft 312 Accounts Payable <= 90 Days $974,502 $28,165 $12,175 321 Accrued Wage/Payroll Taxes Payable $34,328 $11,387 $5,909 322 Accrued Compensated Absences - Current Portion $9,598 $525 $57 325 Accrued Interest Payable $16,521 $34,103 331 Accounts Payable - HUD PHA Programs $16,461 333 Accounts Payable - Other Government $9,867 $7,842 $7,696 341 Tenant Security Deposits $177,277 $31,085 342 Unearned Revenue $92,052 $438 343 Current Portion of Long-term Debt - Capital Projects/Mortgage Revenue $54,821 344 Current Portion of Long-term Debt - Operating Borrowings 345 Other Current Liabilities $6,729 $9,562 $284,195 346 Accrued Liabilities - Other $175,415 $36,120 347 Inter Program - Due To $32,960 310 Total Current Liabilities $1,496,289 $0 $106,902 $0 $466,599 351 Long-term Debt, Net of Current - Capital Projects/Mortgage Revenue $1,792,280 $8,573,681 352 Long-term Debt, Net of Current - Operating Borrowings 353 Non-current Liabilities - Other $27,914 $35,856 $4,107,067 354 Accrued Compensated Absences - Non Current $86,376 $4,725 $14,304 350 Total Non-Current Liabilities $1,906,570 $0 $40,581 $0 $12,695,052 300 Total Liabilities $3,402,859 $0 $147,483 $0 $13,161,651 400 Deferred Inflow of Resources 508.4 Net Investment in Capital Assets $19,808,089 $7,731 $470,663 511.4 Restricted Net Position $1,598,073 $403,515 $198,228 512.4 Unrestricted Net Position $7,445,188 $0 -$102,987 $0 -$1,096,946 513 Total Equity - Net Assets / Position $28,851,350 $0 $308,259 $0 -$428,055 600 Total Liab., Def. Inflow of Res., and Equity - Net Assets / Position $32,254,209 $0 $455,742 $0 $12,733,596 122 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 14.877 Public 14.870 Resident 6.1 Component Unit 14.871 Housing Housing Family Self- Project Total Opportunity and - Discretely Choice Vouchers Sufficiency under Supportive Services Presented ROSS 70300 Net Tenant Rental Revenue $1,446,830 $284,890 70400 Tenant Revenue - Other $56,785 $17 70500 Total Tenant Revenue $1,503,615 $0 $0 $0 $840,985 70600 HUD PHA Operating Grants $3,808,064 $73,640 $11,596,983 $50,467 70610 Capital Grants $692,713 70710 Management Fee 70720 Asset Management Fee 70730 Book Keeping Fee 70740 Front Line Service Fee 70700 Total Fee Revenue 70800 Other Government Grants 71100 Investment Income - Unrestricted $1 71400 Fraud Recovery $45,902 71500 Other Revenue $36,283 $5,186,833 $1,091,698 71600 Gain or Loss on Sale of Capital Assets -$2,430 72000 Investment Income - Restricted $88 70000 Total Revenue $6,038,333 $73,640 $16,829,718 $50,467 $1,376,606 91100 Administrative Salaries $417,106 $318,349 $104,455 91200 Auditing Fees $22,578 $11,231 $15,900 91300 Management Fee $546,891 $145,368 $43,958 91310 Book-keeping Fee $65,003 $120,410 91500 Employee Benefit contributions - Administrative $200,355 $156,709 $64,291 91600 Office Expenses $116,414 $54,142 $23,119 91700 Legal Expense $6,748 $10,557 91800 Travel $1,054 $31 $456 91900 Other $120,364 $52,743 $45,560 91000 Total Operating - Administrative $1,496,513 $0 $858,983 $0 $308,296 92000 Asset Management Fee $100,920 92100 Tenant Services - Salaries $51,334 92300 Employee Benefit Contributions - Tenant Services $17,054 123 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 1 Business 2 State/Local COCC Subtotal ELIM Total Activities 70300 Net Tenant Rental Revenue $1,731,720 $1,731,720 70400 Tenant Revenue - Other $56,802 $56,802 70500 Total Tenant Revenue $0 $0 $0 $1,788,522 $0 $1,788,522 70600 HUD PHA Operating Grants $15,529,154 $15,529,154 70610 Capital Grants $692,713 $692,713 70710 Management Fee $738,285 $738,285 -$692,259 $46,026 70720 Asset Management Fee $100,920 $100,920 -$100,920 $0 70730 Book Keeping Fee $185,502 $185,502 -$185,413 $89 70740 Front Line Service Fee $45,797 $45,797 -$45,797 $0 70700 Total Fee Revenue $1,070,504 $1,070,504 -$1,024,389 $46,115 70800 Other Government Grants $289,865 $289,865 $289,865 71100 Investment Income - Unrestricted $1 $1 71400 Fraud Recovery $45,902 $45,902 71500 Other Revenue $2,380 $6,317,194 $6,317,194 71600 Gain or Loss on Sale of Capital Assets -$2,430 -$2,430 72000 Investment Income - Restricted $88 $88 70000 Total Revenue $289,865 $0 $1,072,884 $25,731,513 -$1,024,389 $24,707,124 91100 Administrative Salaries $609,748 $1,449,658 $1,449,658 91200 Auditing Fees $6,525 $56,234 $56,234 91300 Management Fee $736,217 -$692,259 $43,958 91310 Book-keeping Fee $185,413 -$185,413 $0 91500 Employee Benefit contributions - Administrative $233,008 $654,363 $654,363 91600 Office Expenses $95,275 $288,950 $288,950 91700 Legal Expense $43,158 $60,463 $60,463 91800 Travel $5,244 $6,785 $6,785 91900 Other $209,126 $427,793 -$16,488 $411,305 91000 Total Operating - Administrative $0 $0 $1,202,084 $3,865,876 -$894,160 $2,971,716 92000 Asset Management Fee $100,920 -$100,920 $0 92100 Tenant Services - Salaries $51,334 $51,334 92300 Employee Benefit Contributions - Tenant Services $17,054 $17,054 124 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 14.877 Public 14.870 Resident 6.1 Component Unit 14.871 Housing Housing Family Self- Project Total Opportunity and - Discretely Choice Vouchers Sufficiency under Supportive Services Presented ROSS 92400 Tenant Services - Other $8,386 $5,252 $50,467 $517 92500 Total Tenant Services $8,386 $73,640 $0 $50,467 $517 93100 Water $525,724 $48,758 93200 Electricity $107,018 $3,328 $36,711 93300 Gas $23,667 $2,699 93600 Sewer $189,840 $36,713 93000 Total Utilities $846,249 $0 $3,328 $0 $124,881 94100 Ordinary Maintenance and Operations - Labor $496,734 $112,852 94200 Ordinary Maintenance and Operations - Materials and Other $505,618 $1,426 $65,839 94300 Ordinary Maintenance and Operations Contracts $504,194 $13,845 $217,566 94500 Employee Benefit Contributions - Ordinary Maintenance $236,070 $28,593 94000 Total Maintenance $1,742,616 $0 $15,271 $0 $424,850 95200 Protective Services - Other Contract Costs $21,320 $2,990 $11,233 95000 Total Protective Services $21,320 $0 $2,990 $0 $11,233 96110 Property Insurance $117,457 $862 $37,810 96120 Liability Insurance $49,229 $5,043 $13,095 96130 Workmen's Compensation $24,504 $8,436 $1,540 96140 All Other Insurance $34,014 $5,807 $1,642 96100 Total insurance Premiums $225,204 $0 $20,148 $0 $54,087 96200 Other General Expenses $196,302 $21,850 $1,524 96210 Compensated Absences $105,288 $24,391 96300 Payments in Lieu of Taxes $11,151 96400 Bad debt - Tenant Rents $35,587 $60,367 96000 Total Other General Expenses $337,177 $0 $46,241 $0 $73,042 96710 Interest of Mortgage (or Bonds) Payable $16,521 $436,636 96700 Total Interest Expense and Amortization Cost $16,521 $0 $0 $0 $436,636 96900 Total Operating Expenses $4,794,906 $73,640 $946,961 $50,467 $1,433,542 125 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 1 Business 2 State/Local COCC Subtotal ELIM Total Activities 92400 Tenant Services - Other $64,622 $64,622 92500 Total Tenant Services $0 $0 $0 $133,010 $0 $133,010 93100 Water $574,482 $574,482 93200 Electricity $6,267 $153,324 $153,324 93300 Gas $26,366 $26,366 93600 Sewer $226,553 $226,553 93000 Total Utilities $0 $0 $6,267 $980,725 $0 $980,725 94100 Ordinary Maintenance and Operations - Labor $609,586 $609,586 94200 Ordinary Maintenance and Operations - Materials and Other $1,473 $574,356 -$30,014 $544,342 94300 Ordinary Maintenance and Operations Contracts $18,665 $754,270 $754,270 94500 Employee Benefit Contributions - Ordinary Maintenance $264,663 $264,663 94000 Total Maintenance $0 $0 $20,138 $2,202,875 -$30,014 $2,172,861 95200 Protective Services - Other Contract Costs $4,047 $39,590 $39,590 95000 Total Protective Services $0 $0 $4,047 $39,590 $0 $39,590 96110 Property Insurance $862 $156,991 $156,991 96120 Liability Insurance $5,043 $72,410 $72,410 96130 Workmen's Compensation $18,388 $52,868 $52,868 96140 All Other Insurance $6,425 $47,888 $47,888 96100 Total insurance Premiums $0 $0 $30,718 $330,157 $0 $330,157 96200 Other General Expenses $115,524 $335,200 $335,200 96210 Compensated Absences $82,811 $212,490 $212,490 96300 Payments in Lieu of Taxes $11,151 $11,151 96400 Bad debt - Tenant Rents $95,954 $95,954 96000 Total Other General Expenses $0 $0 $198,335 $654,795 $0 $654,795 96710 Interest of Mortgage (or Bonds) Payable $453,157 $453,157 96700 Total Interest Expense and Amortization Cost $0 $0 $0 $453,157 $0 $453,157 96900 Total Operating Expenses $0 $0 $1,461,589 $8,761,105 -$1,025,094 $7,736,011 126 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 14.877 Public 14.870 Resident 6.1 Component Unit 14.871 Housing Housing Family Self- Project Total Opportunity and - Discretely Choice Vouchers Sufficiency under Supportive Services Presented ROSS 97000 Excess of Operating Revenue over Operating Expenses $1,243,427 $0 $15,882,757 $0 -$56,936 97100 Extraordinary Maintenance $49,810 97200 Casualty Losses - Non-capitalized $24,969 97300 Housing Assistance Payments $11,329,982 97350 HAP Portability-In $4,955,509 97400 Depreciation Expense $1,465,422 $1,104 $445,506 90000 Total Expenses $6,260,328 $73,640 $17,233,556 $50,467 $1,953,827 10010 Operating Transfer In $442,805 10020 Operating transfer Out -$442,805 10091 Inter Project Excess Cash Transfer In $713,985 10092 Inter Project Excess Cash Transfer Out -$713,985 10100 Total Other financing Sources (Uses) $0 $0 $0 $0 $0 10000 Excess (Deficiency) of Total Revenue Over (Under) Total Expenses -$221,995 $0 -$403,838 $0 -$577,221 11020 Required Annual Debt Principal Payments $0 $0 $0 $0 $53,021 11030 Beginning Equity $28,913,638 $0 $763,345 $0 $0 11040 Prior Period Adjustments, Equity Transfers and Correction of Errors $159,707 -$51,248 $149,166 11170 Administrative Fee Equity -$95,256 11180 Housing Assistance Payments Equity $403,515 11190 Unit Months Available 10637 18744 1860 11210 Number of Unit Months Leased 9265 16146 1697 11270 Excess Cash $1,561,672 11610 Land Purchases $0 11620 Building Purchases $982,578 11630 Furniture & Equipment - Dwelling Purchases $0 11640 Furniture & Equipment - Administrative Purchases $0 11650 Leasehold Improvements Purchases $0 11660 Infrastructure Purchases $0 13510 CFFP Debt Service Payments $0 13901 Replacement Housing Factor Funds $158,895 127 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 1 Business 2 State/Local COCC Subtotal ELIM Total Activities 97000 Excess of Operating Revenue over Operating Expenses $289,865 $0 -$388,705 $16,970,408 $705 $16,971,113 97100 Extraordinary Maintenance $49,810 $49,810 97200 Casualty Losses - Non-capitalized $24,969 $24,969 97300 Housing Assistance Payments $11,329,982 $11,329,982 97350 HAP Portability-In $4,955,509 $4,955,509 97400 Depreciation Expense $1,912,032 $1,912,032 90000 Total Expenses $0 $0 $1,461,589 $27,033,407 -$1,025,094 $26,008,313 10010 Operating Transfer In $442,805 $442,805 10020 Operating transfer Out -$442,805 -$442,805 10091 Inter Project Excess Cash Transfer In $713,985 $713,985 10092 Inter Project Excess Cash Transfer Out -$713,985 -$713,985 10100 Total Other financing Sources (Uses) $0 $0 $0 $0 $0 $0 10000 Excess (Deficiency) of Total Revenue Over (Under) Total Expenses $289,865 $0 -$388,705 -$1,301,894 $705 -$1,301,189 11020 Required Annual Debt Principal Payments $0 $0 $11,553 $64,574 $64,574 11030 Beginning Equity $0 -$181,406 $494,215 $29,989,792 $29,989,792 11040 Prior Period Adjustments, Equity Transfers and Correction of Errors -$289,865 $181,406 $149,166 $149,166 11170 Administrative Fee Equity -$95,256 -$95,256 11180 Housing Assistance Payments Equity $403,515 $403,515 11190 Unit Months Available 31241 31241 11210 Number of Unit Months Leased 27108 27108 11270 Excess Cash $1,561,672 $1,561,672 11610 Land Purchases $0 $0 $0 11620 Building Purchases $0 $982,578 $982,578 11630 Furniture & Equipment - Dwelling Purchases $0 $0 $0 11640 Furniture & Equipment - Administrative Purchases $0 $0 $0 11650 Leasehold Improvements Purchases $0 $0 $0 11660 Infrastructure Purchases $0 $0 $0 13510 CFFP Debt Service Payments $0 $0 $0 13901 Replacement Housing Factor Funds $0 $158,895 $158,895 128 Housing Authority of Maricopa County (AZ009) Peoria, AZ Entity Wide Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 1 Business 2 State/Local COCC Subtotal ELIM Total Activities 290 Total Assets and Deferred Outflow of Resources $0 $0 $335,508 $45,779,055 -$32,960 $45,746,095 311 Bank Overdraft 312 Accounts Payable <= 90 Days $6,422 $1,021,264 $1,021,264 321 Accrued Wage/Payroll Taxes Payable $26,028 $77,652 $77,652 322 Accrued Compensated Absences - Current Portion $6,958 $17,138 $17,138 325 Accrued Interest Payable $50,624 $50,624 331 Accounts Payable - HUD PHA Programs $16,461 $16,461 333 Accounts Payable - Other Government $25,405 $25,405 341 Tenant Security Deposits $208,362 $208,362 342 Unearned Revenue $92,490 $92,490 343 Current Portion of Long-term Debt - Capital Projects/Mortgage Revenue $54,821 $54,821 344 Current Portion of Long-term Debt - Operating Borrowings $11,552 $11,552 $11,552 345 Other Current Liabilities $23,937 $324,423 $324,423 346 Accrued Liabilities - Other $60 $211,595 $211,595 347 Inter Program - Due To $32,960 -$32,960 $0 310 Total Current Liabilities $0 $0 $74,957 $2,144,747 -$32,960 $2,111,787 351 Long-term Debt, Net of Current - Capital Projects/Mortgage Revenue $10,365,961 $10,365,961 352 Long-term Debt, Net of Current - Operating Borrowings $92,419 $92,419 $92,419 353 Non-current Liabilities - Other $4,170,837 $4,170,837 354 Accrued Compensated Absences - Non Current $62,622 $168,027 $168,027 350 Total Non-Current Liabilities $0 $0 $155,041 $14,797,244 $0 $14,797,244 300 Total Liabilities $0 $0 $229,998 $16,941,991 -$32,960 $16,909,031 400 Deferred Inflow of Resources 508.4 Net Investment in Capital Assets $20,286,483 $20,286,483 511.4 Restricted Net Position $2,199,816 $2,199,816 512.4 Unrestricted Net Position $0 $0 $105,510 $6,350,765 $6,350,765 513 Total Equity - Net Assets / Position $0 $0 $105,510 $28,837,064 $0 $28,837,064 600 Total Liab., Def. Inflow of Res., and Equity - Net Assets / Position $0 $0 $335,508 $45,779,055 -$32,960 $45,746,095 129 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000001 AZ009000002 AZ009000003 AZ009000005 AZ009000007 AZ009000008 111 Cash - Unrestricted $477,440 $207,451 $369,506 $128,775 $300,636 112 Cash - Restricted - Modernization and Development $734,695 $371,160 113 Cash - Other Restricted $3,776 $398 $5,325 $1,030 $5,179 114 Cash - Tenant Security Deposits $47,915 $22,333 $42,879 $12,070 $26,888 115 Cash - Restricted for Payment of Current Liabilities $5,265 100 Total Cash $529,131 $230,182 $734,695 $417,710 $518,300 $332,703 121 Accounts Receivable - PHA Projects 122 Accounts Receivable - HUD Other Projects $36,381 $108,308 $14,331 $99,783 $47,188 124 Accounts Receivable - Other Government $99,885 125 Accounts Receivable - Miscellaneous 126 Accounts Receivable - Tenants $8,867 $4,279 $24,547 $9,606 $9,476 126.1 Allowance for Doubtful Accounts -Tenants -$6,230 -$1,604 -$9,596 -$8,371 -$6,839 126.2 Allowance for Doubtful Accounts - Other $0 $0 $0 $0 $0 129 Accrued Interest Receivable 120 Total Receivables, Net of Allowances for Doubtful Accounts $39,018 $210,868 $0 $29,282 $101,018 $49,825 142 Prepaid Expenses and Other Assets $5,800 $4,281 $6,540 $1,681 $4,485 143 Inventories $17,497 $6,928 $21,766 $3,833 $15,559 143.1 Allowance for Obsolete Inventories -$6,215 -$1,246 -$4,312 -$325 -$1,209 144 Inter Program Due From 145 Assets Held for Sale 150 Total Current Assets $585,231 $451,013 $734,695 $470,986 $624,507 $401,363 161 Land $100,000 $700,589 $229,896 $2,657,506 $155,536 162 Buildings $11,992,318 $8,319,557 $13,583,960 $2,577,607 $7,211,724 163 Furniture, Equipment & Machinery - Dwellings 164 Furniture, Equipment & Machinery - Administration $139,048 $177,271 $117,167 $19,970 $61,444 166 Accumulated Depreciation -$10,175,428 -$6,172,679 -$9,940,870 -$1,110,714 -$5,160,553 167 Construction in Progress $448,760 160 Total Capital Assets, Net of Accumulated Depreciation $2,055,938 $3,473,498 $0 $3,990,153 $4,144,369 $2,268,151 171 Notes, Loans and Mortgages Receivable - Non-Current 180 Total Non-Current Assets $2,055,938 $3,473,498 $0 $3,990,153 $4,144,369 $2,268,151 190 Total Assets $2,641,169 $3,924,511 $734,695 $4,461,139 $4,768,876 $2,669,514 130 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000009 AZ009000011 AZ009000013 AZ009000014 AZ009000015 AZ009009999 Total 111 Cash - Unrestricted $293,968 $46,308 $28,646 $285,461 $153,985 $2,292,176 112 Cash - Restricted - Modernization and Development $492,218 $1,598,073 113 Cash - Other Restricted $4,005 $8,131 $74 $27,918 114 Cash - Tenant Security Deposits $10,416 $14,776 $177,277 115 Cash - Restricted for Payment of Current Liabilities $924,453 $929,718 100 Total Cash $308,389 $0 $46,308 $36,777 $300,311 $1,570,656 $5,025,162 121 Accounts Receivable - PHA Projects 122 Accounts Receivable - HUD Other Projects $4,811 $17,536 $45 $108,150 $436,533 124 Accounts Receivable - Other Government $99,885 125 Accounts Receivable - Miscellaneous $156,274 $31,446 $342,053 $529,773 126 Accounts Receivable - Tenants $3,109 $2,820 $62,704 126.1 Allowance for Doubtful Accounts -Tenants -$2,557 -$2,861 -$38,058 126.2 Allowance for Doubtful Accounts - Other $0 $0 $0 $0 -$119,855 -$119,855 129 Accrued Interest Receivable 120 Total Receivables, Net of Allowances for Doubtful Accounts $5,363 $0 $173,810 $31,491 $108,109 $222,198 $970,982 142 Prepaid Expenses and Other Assets $1,828 $2,665 $27,280 143 Inventories $1,907 $3,451 $70,941 143.1 Allowance for Obsolete Inventories $0 $0 -$13,307 144 Inter Program Due From 145 Assets Held for Sale 150 Total Current Assets $317,487 $0 $220,118 $68,268 $414,536 $1,792,854 $6,081,058 161 Land $128,168 $410,350 $145,000 $4,527,045 162 Buildings $2,653,642 $3,421,325 $1,245,733 $51,005,866 163 Furniture, Equipment & Machinery - Dwellings 164 Furniture, Equipment & Machinery - Administration $31,876 $32,860 $267,990 $847,626 166 Accumulated Depreciation -$1,897,842 -$2,196,456 -$471,387 -$37,125,929 167 Construction in Progress $1,404,783 $1,853,543 160 Total Capital Assets, Net of Accumulated Depreciation $915,844 $0 $0 $0 $1,668,079 $2,592,119 $21,108,151 171 Notes, Loans and Mortgages Receivable - Non-Current $5,065,000 $5,065,000 180 Total Non-Current Assets $915,844 $0 $0 $0 $1,668,079 $7,657,119 $26,173,151 190 Total Assets $1,233,331 $0 $220,118 $68,268 $2,082,615 $9,449,973 $32,254,209 131 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000001 AZ009000002 AZ009000003 AZ009000005 AZ009000007 AZ009000008 200 Deferred Outflow of Resources 290 Total Assets and Deferred Outflow of Resources $2,641,169 $3,924,511 $734,695 $4,461,139 $4,768,876 $2,669,514 311 Bank Overdraft 312 Accounts Payable <= 90 Days $3,704 $28,549 $5,464 $1,852 $6,339 313 Accounts Payable >90 Days Past Due 321 Accrued Wage/Payroll Taxes Payable $9,064 $4,834 $8,197 $1,541 $4,615 322 Accrued Compensated Absences - Current Portion $3,479 $742 $2,144 $366 $1,239 324 Accrued Contingency Liability 325 Accrued Interest Payable 333 Accounts Payable - Other Government $3,458 $1,209 $3,678 $1,107 341 Tenant Security Deposits $47,915 $22,333 $42,879 $12,070 $26,888 342 Unearned Revenue $76,612 $4,200 $5,428 $2,611 $3,033 345 Other Current Liabilities $1,237 $5,265 346 Accrued Liabilities - Other $281 $5,534 $7,334 $2,762 310 Total Current Liabilities $144,513 $67,401 $0 $76,361 $26,467 $43,221 351 Long-term Debt, Net of Current - Capital Projects/Mortgage 353 Non-current Liabilities - Other $3,772 $398 $5,325 $1,030 $5,179 354 Accrued Compensated Absences - Non Current $31,313 $6,676 $19,294 $3,292 $11,155 350 Total Non-Current Liabilities $35,085 $7,074 $0 $24,619 $4,322 $16,334 300 Total Liabilities $179,598 $74,475 $0 $100,980 $30,789 $59,555 400 Deferred Inflow of Resources 508.4 Net Investment in Capital Assets $2,055,938 $3,473,498 $3,990,153 $4,144,369 $2,268,151 511.4 Restricted Net Position $734,695 $371,160 512.4 Unrestricted Net Position $405,633 $376,538 $0 $370,006 $222,558 $341,808 513 Total Equity - Net Assets / Position $2,461,571 $3,850,036 $734,695 $4,360,159 $4,738,087 $2,609,959 600 Total Liab., Def. Inflow of Res., and Equity - Net Assets / $2,641,169 $3,924,511 $734,695 $4,461,139 $4,768,876 $2,669,514 132 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000009 AZ009000011 AZ009000013 AZ009000014 AZ009000015 AZ009009999 Total 200 Deferred Outflow of Resources 290 Total Assets and Deferred Outflow of Resources $1,233,331 $0 $220,118 $68,268 $2,082,615 $9,449,973 $32,254,209 311 Bank Overdraft 312 Accounts Payable <= 90 Days $1,050 $135 $45 $2,911 $924,453 $974,502 313 Accounts Payable >90 Days Past Due 321 Accrued Wage/Payroll Taxes Payable $2,395 $3,682 $34,328 322 Accrued Compensated Absences - Current Portion $653 $975 $9,598 324 Accrued Contingency Liability 325 Accrued Interest Payable $16,521 $16,521 333 Accounts Payable - Other Government $330 $85 $9,867 341 Tenant Security Deposits $10,416 $14,776 $177,277 342 Unearned Revenue $87 $81 $92,052 345 Other Current Liabilities $227 $6,729 346 Accrued Liabilities - Other $5,289 $2,212 $152,003 $175,415 310 Total Current Liabilities $20,220 $0 $220 $45 $24,637 $1,093,204 $1,496,289 351 Long-term Debt, Net of Current - Capital Projects/Mortgage $1,792,280 $1,792,280 353 Non-current Liabilities - Other $4,005 $8,131 $74 $27,914 354 Accrued Compensated Absences - Non Current $5,873 $8,773 $86,376 350 Total Non-Current Liabilities $9,878 $0 $0 $8,131 $8,847 $1,792,280 $1,906,570 300 Total Liabilities $30,098 $0 $220 $8,176 $33,484 $2,885,484 $3,402,859 400 Deferred Inflow of Resources 508.4 Net Investment in Capital Assets $915,844 $1,668,079 $1,292,057 $19,808,089 511.4 Restricted Net Position $492,218 $1,598,073 512.4 Unrestricted Net Position $287,389 $0 $219,898 $60,092 $381,052 $4,780,214 $7,445,188 513 Total Equity - Net Assets / Position $1,203,233 $0 $219,898 $60,092 $2,049,131 $6,564,489 $28,851,350 600 Total Liab., Def. Inflow of Res., and Equity - Net Assets / $1,233,331 $0 $220,118 $68,268 $2,082,615 $9,449,973 $32,254,209 133 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000001 AZ009000002 AZ009000003 AZ009000005 AZ009000007 AZ009000008 70300 Net Tenant Rental Revenue $319,307 $202,092 $294,574 $140,259 $271,839 70400 Tenant Revenue - Other $13,809 $12,995 $13,004 $2,119 $5,631 70500 Total Tenant Revenue $333,116 $215,087 $0 $307,578 $142,378 $277,470 70600 HUD PHA Operating Grants $1,246,256 $438,307 $880,889 $185,319 $336,384 70610 Capital Grants $183,448 $27,699 $292,481 $39,813 71500 Other Revenue $19,080 $1,902 $7,682 $1,068 $2,804 71600 Gain or Loss on Sale of Capital Assets 72000 Investment Income - Restricted 70000 Total Revenue $1,598,452 $838,744 $0 $1,223,848 $621,246 $656,471 91100 Administrative Salaries $119,147 $59,511 $97,026 $23,440 $59,711 91200 Auditing Fees $6,589 $3,291 $6,821 $1,175 $2,822 91300 Management Fee $135,081 $54,578 $104,012 $24,280 $62,037 91310 Book-keeping Fee $19,695 $7,958 $15,165 $3,540 $9,045 91400 Advertising and Marketing 91500 Employee Benefit contributions - Administrative $53,366 $31,767 $47,994 $12,756 $29,550 91600 Office Expenses $26,671 $23,997 $22,040 $3,562 $16,858 91700 Legal Expense $1,218 $3,253 $265 $736 91800 Travel $87 $232 $192 $543 91810 Allocated Overhead 91900 Other $19,428 $39,846 $12,074 $6,070 $18,661 91000 Total Operating - Administrative $381,195 $221,035 $0 $308,617 $75,280 $199,963 92000 Asset Management Fee $35,520 $11,760 $22,560 $5,400 $12,240 92400 Tenant Services - Other $135 $490 $2,550 $2,389 92500 Total Tenant Services $135 $490 $0 $2,550 $0 $2,389 93100 Water $253,233 $35,943 $111,660 $37,295 $48,939 93200 Electricity $24,913 $10,080 $41,344 $3,410 $12,434 93300 Gas $9,372 $2,227 $5,194 $549 $478 93400 Fuel 93500 Labor 93600 Sewer $63,170 $13,832 $60,136 $11,155 $32,173 93700 Employee Benefit Contributions - Utilities 93800 Other Utilities Expense 134 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000001 AZ009000002 AZ009000003 AZ009000005 AZ009000007 AZ009000008 93000 Total Utilities $350,688 $62,082 $0 $218,334 $52,409 $94,024 94100 Ordinary Maintenance and Operations - Labor $173,900 $73,335 $112,484 $17,868 $38,788 94200 Ordinary Maintenance and Operations - Materials and $98,814 $102,480 $86,386 $75,703 $51,190 94300 Ordinary Maintenance and Operations Contracts $160,645 $32,786 $119,000 $34,535 $58,222 94500 Employee Benefit Contributions - Ordinary Maintenance $77,889 $39,147 $55,641 $9,724 $19,195 94000 Total Maintenance $511,248 $247,748 $0 $373,511 $137,830 $167,395 95100 Protective Services - Labor 95200 Protective Services - Other Contract Costs $3,524 $3,457 $5,215 $3,657 95300 Protective Services - Other 95500 Employee Benefit Contributions - Protective Services 95000 Total Protective Services $3,524 $3,457 $0 $5,215 $0 $3,657 96110 Property Insurance $34,554 $15,971 $26,538 $7,703 $14,883 96120 Liability Insurance $18,224 $5,659 $10,614 $2,520 $5,882 96130 Workmen's Compensation $7,033 $3,978 $6,075 $310 $3,399 96140 All Other Insurance $8,836 $5,049 $7,515 $3,787 96100 Total insurance Premiums $68,647 $30,657 $0 $50,742 $10,533 $27,951 96200 Other General Expenses 96210 Compensated Absences $42,721 $13,046 $21,162 $4,421 $8,456 96300 Payments in Lieu of Taxes 96400 Bad debt - Tenant Rents $3,770 $2,731 $10,697 $3,144 $6,371 96500 Bad debt - Mortgages 96600 Bad debt - Other 96800 Severance Expense 96000 Total Other General Expenses $46,491 $15,777 $0 $31,859 $7,565 $14,827 96710 Interest of Mortgage (or Bonds) Payable 96720 Interest on Notes Payable (Short and Long Term) 96730 Amortization of Bond Issue Costs 96700 Total Interest Expense and Amortization Cost $0 $0 $0 $0 $0 $0 96900 Total Operating Expenses $1,397,448 $593,006 $0 $1,013,388 $289,017 $522,446 135 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000001 AZ009000002 AZ009000003 AZ009000005 AZ009000007 AZ009000008 97000 Excess of Operating Revenue over Operating Expenses $201,004 $245,738 $0 $210,460 $332,229 $134,025 97400 Depreciation Expense $307,440 $274,401 $346,477 $94,166 $215,559 90000 Total Expenses $1,704,888 $867,407 $0 $1,359,865 $383,183 $738,005 10010 Operating Transfer In $33,952 $78,568 $89,728 $69,454 $21,150 10020 Operating transfer Out -$33,952 -$78,568 -$89,728 -$69,454 -$21,150 10091 Inter Project Excess Cash Transfer In 10092 Inter Project Excess Cash Transfer Out -$350,000 -$254,243 10093 Transfers between Program and Project - In 10094 Transfers between Project and Program - Out 10100 Total Other financing Sources (Uses) -$350,000 $0 $0 $0 $0 -$254,243 10000 Excess (Deficiency) of Total Revenue Over (Under) Total -$456,436 -$28,663 $0 -$136,017 $238,063 -$335,777 11020 Required Annual Debt Principal Payments $0 $0 $0 $0 $0 $0 11030 Beginning Equity $2,970,814 $3,606,436 $734,695 $4,522,863 $4,506,650 $2,964,994 11040 Prior Period Adjustments, Equity Transfers and -$52,807 $272,263 -$26,687 -$6,626 -$19,258 Correction 11180 Housing Assistance Payments Equity 11190 Unit Months Available 3552 1137 0 2256 507 1224 11210 Number of Unit Months Leased 2627 1053 0 2023 471 1208 11270 Excess Cash $304,146 $324,079 $0 $281,327 $196,689 $290,591 11610 Land Purchases $0 $0 $0 $0 $0 $0 11620 Building Purchases $0 $473,313 $0 $27,699 $292,481 $39,813 11630 Furniture & Equipment - Dwelling Purchases $0 $0 $0 $0 $0 $0 11640 Furniture & Equipment - Administrative Purchases $0 $0 $0 $0 $0 $0 11650 Leasehold Improvements Purchases $0 $0 $0 $0 $0 $0 11660 Infrastructure Purchases $0 $0 $0 $0 $0 $0 13510 CFFP Debt Service Payments $0 $0 $0 $0 $0 $0 13901 Replacement Housing Factor Funds $0 $158,895 $0 $0 $0 $0 136 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000009 AZ009000011 AZ009000013 AZ009000014 AZ009000015 AZ009009999 Total 70300 Net Tenant Rental Revenue $89,918 $128,841 $1,446,830 70400 Tenant Revenue - Other $4,314 $4,913 $56,785 70500 Total Tenant Revenue $94,232 $0 $0 $0 $133,754 $0 $1,503,615 70600 HUD PHA Operating Grants $189,937 $92,287 $150,124 $41,837 $246,724 $3,808,064 70610 Capital Grants $17,749 $131,523 $692,713 71500 Other Revenue $1,480 $2,267 $36,283 71600 Gain or Loss on Sale of Capital Assets -$2,430 -$2,430 72000 Investment Income - Restricted $88 $88 70000 Total Revenue $303,398 $92,287 $150,124 $41,837 $514,268 -$2,342 $6,038,333 91100 Administrative Salaries $23,810 $34,461 $417,106 91200 Auditing Fees $1,880 $22,578 91300 Management Fee $25,254 $92,287 $49,362 $546,891 91310 Book-keeping Fee $3,540 $6,060 $65,003 91400 Advertising and Marketing 91500 Employee Benefit contributions - Administrative $9,065 $15,857 $200,355 91600 Office Expenses $7,799 $15,487 $116,414 91700 Legal Expense $1,014 $262 $6,748 91800 Travel $1,054 91810 Allocated Overhead 91900 Other $9,977 $3 $13,129 $1,176 $120,364 91000 Total Operating - Administrative $82,339 $92,287 $3 $0 $134,618 $1,176 $1,496,513 92000 Asset Management Fee $5,040 $8,400 $100,920 92400 Tenant Services - Other $2,822 $8,386 92500 Total Tenant Services $2,822 $0 $0 $0 $0 $0 $8,386 93100 Water $23,979 $10,051 $4,624 $525,724 93200 Electricity $4,219 $4,908 $5,710 $107,018 93300 Gas $1,420 $4,002 $425 $23,667 93400 Fuel 93500 Labor 93600 Sewer $4,559 $3,695 $1,120 $189,840 93700 Employee Benefit Contributions - Utilities 93800 Other Utilities Expense 137 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000009 AZ009000011 AZ009000013 AZ009000014 AZ009000015 AZ009009999 Total 93000 Total Utilities $34,177 $0 $0 $0 $22,656 $11,879 $846,249 94100 Ordinary Maintenance and Operations - Labor $31,510 $48,849 $496,734 94200 Ordinary Maintenance and Operations - Materials and $33,212 $57,833 $505,618 94300 Ordinary Maintenance and Operations Contracts $33,461 $46,775 $18,770 $504,194 94500 Employee Benefit Contributions - Ordinary Maintenance $11,996 $22,478 $236,070 94000 Total Maintenance $110,179 $0 $0 $0 $175,935 $18,770 $1,742,616 95100 Protective Services - Labor 95200 Protective Services - Other Contract Costs $918 $2,087 $2,462 $21,320 95300 Protective Services - Other 95500 Employee Benefit Contributions - Protective Services 95000 Total Protective Services $918 $0 $0 $0 $2,087 $2,462 $21,320 96110 Property Insurance $11,449 $4,203 $2,156 $117,457 96120 Liability Insurance $3,780 $2,550 $49,229 96130 Workmen's Compensation $2,716 $993 $24,504 96140 All Other Insurance $5,702 $3,125 $34,014 96100 Total insurance Premiums $23,647 $0 $0 $0 $10,871 $2,156 $225,204 96200 Other General Expenses $150,123 $46,179 $196,302 96210 Compensated Absences $6,205 $9,277 $105,288 96300 Payments in Lieu of Taxes 96400 Bad debt - Tenant Rents $4,854 $4,020 $35,587 96500 Bad debt - Mortgages 96600 Bad debt - Other 96800 Severance Expense 96000 Total Other General Expenses $11,059 $0 $150,123 $46,179 $13,297 $0 $337,177 96710 Interest of Mortgage (or Bonds) Payable $16,521 $16,521 96720 Interest on Notes Payable (Short and Long Term) 96730 Amortization of Bond Issue Costs 96700 Total Interest Expense and Amortization Cost $0 $0 $0 $0 $0 $16,521 $16,521 96900 Total Operating Expenses $270,181 $92,287 $150,126 $46,179 $367,864 $52,964 $4,794,906 138 Housing Authority of Maricopa County (AZ009) Peoria, AZ Project Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 06/30/2014 AZ009000009 AZ009000011 AZ009000013 AZ009000014 AZ009000015 AZ009009999 Total 97000 Excess of Operating Revenue over Operating Expenses $33,217 $0 -$2 -$4,342 $146,404 -$55,306 $1,243,427 97400 Depreciation Expense $75,036 $84,194 $68,149 $1,465,422 90000 Total Expenses $345,217 $92,287 $150,126 $46,179 $452,058 $121,113 $6,260,328 10010 Operating Transfer In $32,596 $35,364 $8,540 $73,453 $442,805 10020 Operating transfer Out -$32,596 -$35,364 -$8,540 -$73,453 -$442,805 10091 Inter Project Excess Cash Transfer In $197,144 $219,900 $61,740 $235,201 $713,985 10092 Inter Project Excess Cash Transfer Out -$109,742 -$713,985 10093 Transfers between Program and Project - In 10094 Transfers between Project and Program - Out 10100 Total Other financing Sources (Uses) $197,144 $0 $219,900 $61,740 -$109,742 $235,201 $0 10000 Excess (Deficiency) of Total Revenue Over (Under) Total $155,325 $0 $219,898 $57,398 -$47,532 $111,746 -$221,995 11020 Required Annual Debt Principal Payments $0 $0 $0 $0 $0 $0 $0 11030 Beginning Equity $1,055,086 $0 $0 $2,694 $2,096,663 $6,452,743 $28,913,638 11040 Prior Period Adjustments, Equity Transfers and -$7,178 $0 $159,707 Correction 11180 Housing Assistance Payments Equity 11190 Unit Months Available 503 0 480 156 822 0 10637 11210 Number of Unit Months Leased 472 0 452 154 805 0 9265 11270 Excess Cash $267,199 $0 $207,388 $56,244 $353,879 -$719,870 $1,561,672 11610 Land Purchases $0 $0 $0 $0 $0 $0 $0 11620 Building Purchases $17,749 $0 $0 $0 $131,523 $0 $982,578 11630 Furniture & Equipment - Dwelling Purchases $0 $0 $0 $0 $0 $0 $0 11640 Furniture & Equipment - Administrative Purchases $0 $0 $0 $0 $0 $0 $0 11650 Leasehold Improvements Purchases $0 $0 $0 $0 $0 $0 $0 11660 Infrastructure Purchases $0 $0 $0 $0 $0 $0 $0 13510 CFFP Debt Service Payments $0 $0 $0 $0 $0 $0 $0 13901 Replacement Housing Factor Funds $0 $0 $0 $0 $0 $0 $158,895 139 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 Independent Auditor’s Report Board of Commissioners Housing Authority of Maricopa County 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 Housing Authority of Maricopa County as of and for the year ended June 30, 2014,and the related notes to the financial statements, which collectively comprise Housing Authority of Maricopa County’s basic financial statements, and have issued our report thereon dated November 13, 2014. Our report includes a reference to other auditors who audited the financial statements of Maricopa Revitalization Partnership LLC, as described in our report on Housing Authority of Maricopa County’s financial statements. The financial statements of the aggregate discretely presented component units were not audited in accordance with Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered Housing Authority of Maricopa County’s internal control over financial reporting (internal control) to determine the 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 Authority of Maricopa County’s internal control. Accordingly, we do not express an opinion on the effectiveness of Housing Authority of Maricopa County’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. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we and the other auditors did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that 140 have not been identified. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs that we consider to be significant deficiencies as items 2014-001 and 2014-002. We noted certain matters that we have reported to management of Housing Authority of Maricopa County in a separate letter dated November 13, 2014. Compliance and Other Matters As part of obtaining reasonable assurance about whether Housing Authority of Maricopa County’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests and those of the other auditors disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Housing Authority of Maricopa County’s Response to Findings Housing Authority of Maricopa County’s response to the findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. Housing Authority of Maricopa County’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. 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. Maletta & Company Certified Public Accountants Bristol, Connecticut November 13, 2014 141 REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Independent Auditor’s Report Board of Commissioners Housing Authority of Maricopa County Compliance We have audited the compliance of Housing Authority of Maricopa County with the types of compliance requirements described in the U.S. Office of Management and Budget Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2014.Housing Authority of Maricopa County’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the entity’s management. Auditor’s Responsibility Our responsibility is to express an opinion on Housing Authority of Maricopa County’s compliance with the applicable compliance requirements based on our compliance audit. We conducted our compliance audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and Circular A-133 require that we plan and perform the compliance audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. A compliance audit includes examining, on a test basis, evidence about Housing Authority of Maricopa County’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our compliance audit provides a reasonable basis for our qualified opinion. Our compliance audit does not provide a legal determination on Housing Authority of Maricopa County’s compliance with those requirements. 142 Basis for Qualified Opinion As described in item 2014-003 in the accompanying schedule of findings and questioned costs, Housing Authority of Maricopa County did not comply with eligibility requirements that are applicable to its Housing Choice Voucher program. Compliance with such requirements is necessary, in our opinion, for Housing Authority of Maricopa County to comply with the requirements applicable to that program. Qualified Opinion In our opinion, except for the noncompliance described in the preceding paragraph, Housing Authority of Maricopa County complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2014. Internal Control over Compliance The management of Housing Authority of Maricopa County is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our compliance audit, we considered Housing Authority of Maricopa County’s internal control over compliance with requirements that could have a direct and material effect on a major federal program as a basis for designing our compliance auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Housing Authority of Maricopa County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over compliance that we consider to be significant deficiencies as described in the accompanying schedule of findings and questioned costs as items 2014-003 through 2014-005. 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. Housing Authority of Maricopa County’s responses to the findings identified in our compliance audit are described in the accompanying schedule of findings and questioned costs. We did not audit Housing Authority of Maricopa County’s responses and, accordingly, we express no opinion on the responses. 143 Restricted Use The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and compliance, and the result of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control over financial reporting 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 over financial reporting and compliance. Accordingly, this report is not suitable for any other purpose. Maletta & Company Certified Public Accountants Bristol, Connecticut November 13, 2014 144 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2014 Federal Grantor / Pass-Through CFDA Contract / Federal Grantor / Program Title Number Pass-Through Expenditures U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Direct Programs: Low Rent Public Housing 14.850 AZ009-00000012D $ 1,846 Low Rent Public Housing 14.850 AZ009-00000013D 1,458,794 Low Rent Public Housing 14.850 AZ009-00000014D 1,724,169 Low Rent Public Housing 14.850 AZ038-00000013D 13,253 Low Rent Public Housing 14.850 AZ038-00000014D 66,139 Total Low Rent Public Housing 3,264,201 Resident Opportunity and Supportive Services (ROSS) 14.870 AZ009-RPS081A010 73,640 Housing Choice Vouchers 14.871 AZ20P009501-10 11,596,983 Public Housing Capital Fund Program 14.872 AZ20P009501-10 43,545 Public Housing Capital Fund Program 14.872 AZ20P009501-11 86,616 Public Housing Capital Fund Program 14.872 AZ20P009501-12 435,091 Public Housing Capital Fund Program 14.872 AZ20P009501-13 447,026 Public Housing Capital Fund Program 14.872 AZ20P038501-11 4,610 Public Housing Capital Fund Program 14.872 AZ20P038501-12 60,793 Public Housing Capital Fund Program 14.872 AZ20R009501-11 3,524 Public Housing Capital Fund Program 14.872 AZ20R009502-11 51,599 Public Housing Capital Fund Program 14.872 AZ20R009501-12 21,710 Public Housing Capital Fund Program 14.872 AZ20R009502-12 63,333 Public Housing Capital Fund Program 14.872 AZ20R009501-13 17,549 Public Housing Capital Fund Program 14.872 AZ20R009502-13 1,180 Total Public Housing Capital Fund Program 1,236,576 Public Housing Family Self Sufficiency (FSS) 14.877 AZ009-RFS130A011 15,967 Public Housing Family Self Sufficiency (FSS) 14.877 AZ009-RFS130A012 34,500 Total Public Housing Family Self Sufficiency (FSS) 50,467 Total Expenditures of Federal Awards $ 16,221,867 See the accompanying notes to schedule of expenditures of federal awards. - 50 - 145 THE HOUSING AUTHORITY OF MARICOPA COUNTY NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2014 NOTE A – BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the Authority under programs of the federal government for the year ended June 30, 2014. The information in this Schedule is presented in accordance with the requirements of OMB Circular A-133 Audits of States, Local Government, and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, change in Net Position, or cash flows of the Authority. NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (1) Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. (2) Pass-through entity identifying numbers are presented where available. NOTE C – SUBRECIPIENTS Of the federal expenditures presented in the schedule, the Authority provided federal awards to subrecipients as follows: CFDA Amount Number Program Title/Subrecipient Provided 14.877 Public Housing Family Self Sufficiency (FSS)/Maricopa County $ 50,467 $ 50,467 NOTE D – PROGRAM COST The amounts presented as federal expenditures represent only the federal portion of the actual program costs. Actual program costs, including the Authority’s portion, may be more than is shown on the schedule. - 51 - 146 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2014 I. Summary of Auditor’s Results Financial Statements Type of auditor’s report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses? X Yes None Reported Noncompliance material to financial statements noted? Yes X No Federal Awards Internal control over major programs: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weaknesses? X Yes None reported Type of auditor’s report issued on compliance for major programs: Qualified Any audit finding disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133? X Yes No Identification of major programs tested: CFDA# Program Name 14.850 Public Housing 14.871 Housing Choice Vouchers 14.872 Public Housing Capital Fund Program Dollar threshold used to distinguish between type A and type B programs: $ 486,656 Auditee qualified as low-risk auditee Yes X No - 52 - 147 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 II. Findings Related to the Financial Statement Audit as Required to be Reported in Accordance with Generally Accepted Government Auditing Standards SIGNIFICANT DEFICIENCY 2014-001 General Ledger Maintenance Condition: Financial information relating to bank reconciliations, inter-program transactions, and portability payments and balances were not recorded appropriately and/or reconciled in a timely basis. Criteria: Adequate internal controls require accurate recording and periodic reconciliation of general ledger activity to ensure accurate financial reporting. Cause: Employee turnover; ineffective procedures for the recording and tracking of HCV portability transactions and other cash receipts. Effect or Potential Additional yearend reconciliations and adjustments were necessary. Effect: Potential effect on interim financial reporting. Recommendation: We recommend that financial activity for all balance sheet accounts be reconciled on a periodic basis to ensure accurate timely financial reporting. In addition, the Authority should modify the process for recording and tracking portability transactions and other cash receipts. SIGNIFICANT DEFICIENCY 2014-002 Fixed Asset Recording and Capital Grant reporting Condition: Capital grant activity and the related Fixed Assets are not maintained in accordance with generally accepted accounting principles. Criteria: Revenue is to be recognized when earned and assets capitalized in accordance with GAAP to facilitate accurate financial reporting. Cause: Multiple staffing changes and Capital grant activity being maintained on a budgetary basis whereas expenditures accumulate by grant and are recognized in the financials at yearend. Effect or Potential Yearend closing entries were needed to accurately report capital Effect: expenditures and revenues. Interim and internal financial reporting does not reflect capital activity. Recommendation: We recommend that capital grant activity be maintained in accordance with GAAP by modifying the Capital Grant chart of accounts to include revenue and expense accounts, whereby operating period activity can be tracked and reported as necessary. In addition, the Authority should consider automating the recognition of revenues to coincide with the recording of capital grant expenditures to assist in grant tracking and reporting in accordance with GAAP. - 53 - 148 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 III. Findings and Questioned Costs for Federal Awards U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT MATERIAL NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY 2014-003 Eligibility Housing Choice Vouchers – CFDA#14.871 Condition: The Authority did not recertify participants in a timely basis. In addition, income calculations and documentation procedures were not made in accordance HUD regulations. Criteria: HUD regulations require PHAs reexamine family income calculated in accordance with program requirements using third-party documentation at least once every 12 months. Cause Employee turnover, lack of staff experience and ineffective review/quality control procedures. Effect or Potential Potential overpayment of HAP due to incorrect and/or untimely income Effect: calculations. Recommendation: We recommend that the Authority adhere to resident file Quality Control review procedures to monitor and evaluate HCV staff performance and ensure compliance with HUD regulations. SIGNIFICANT DEFICIENCY 2014-004 Activities Allowed and Unallowed Housing Choice Vouchers – CFDA#14.871 Condition: Financial Statement finding 2014-001 applies to this program. SIGNIFICANT DEFICIENCY 2014-005 Special Tests and Provisions Public Housing – CFDA#14.850 Condition: Financial Statement finding 2014-002 applies to this program. - 54 - 149 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2014 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2013-003 Eligibility Housing Choice Vouchers – CFDA#14.871 Condition: The Authority did not recertify participants in a timely basis. In addition, some participant files were incomplete as some information required to document the recertification process was not consistently retained and/or organized within each participant’s file. Recommendation: We recommend that the Authority adhere to resident file Quality Control review procedures to monitor and evaluate HCV staff performance and ensure compliance with HUD regulations. Status Corrective action in progress. Improvements made in the recertification process, including performance of Quality Control reviews, as instances of noncompliance relate to late recertifications only. See additional current year audit finding. 2013-004 HUD Management and Financial Review Housing Choice Vouchers – CFDA#14.871 Public Housing – CFDA#14.850 Condition #1: Program Restricted funds – Insufficient cash available to support program balances Recommendation: HAMC must eliminate the NRA cash deficiency through collection of accounts of accounts receivable for portability and reimbursements from non-HUD sources. If HAMC does not have the non-HUD financial resources to eliminate the deficiency, they are to submit a repayment plan and enter into negotiations with HUD for a repayment agreement to repay the funds over time. Status: Corrective action in progress. HAMC continues to conduct research to determine actual amount of NRA deficiency. See Prior audit finding 2011-01. Condition #2: Program housing assistance payments for ports administered not collected effectively. Recommendation: HAMC is to reduce Accounts Receivable for portability to an amount that is less than 10% of monthly collections. Status: Corrective action in progress. The portability accounts receivable balance has not met the recommended threshold. See current year audit finding 2014-04. - 55 - 150 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF PRIOR AUDIT FINDINGS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2013-004 HUD Management and Financial Review (Cont’d) Housing Choice Vouchers – CFDA#14.871 Public Housing – CFDA#14.850 Condition #3: Inaccurate reporting on form HUD 50058 (PH FSS) Recommendation: To ensure timely and accurate reporting, HAMC must close the gap in reporting FSS participant progress by either directly allowing the MCHS to complete the form HUD 50058 - Section 17 (b) or require the MCHS to submit the information to HAMC to enter the data. Status: Corrective action completed this fiscal year. Condition #4: Community Service Self Sufficiency Requirement (CSSR) resident files and compliance tracking is inconsistent. Recommendation: HAMC must also review all eligible and ineligible CSSR tenant files within the 2014 fiscal year end to ensure accurate compliance tracking is maintained in the file and lease provisions are applied. Status: Corrective action completed this fiscal year. Condition #5: Public Housing Resident Files Recommendation: HAMC must address file errors and make any adjustments or corrections to the resident’s rent or rent roll, as deemed necessary. Status: Corrective action completed. Condition #6: HAMC is not in compliance with the site-based waiting list random testing requirement at all properties. Recommendation: HAMC must conduct random testing on all site-based waiting list properties that have been approved and implemented for the periods FY 2007 through FY 2010. Status: Corrective action completed this fiscal year. Random testing conducted with no fair housing issues noted. Condition #7: Obligation and Expenditure of Capital Funds and LOCCS reporting Recommendation: HAMC must prepare and follow a plan for renovation and rehabilitation of their public housing units using Capital Funds. The plan should ensure Obligation within 2 years of funding and Expenditure within 3 years of funding. Status: Corrective action completed this fiscal year. HAMC annual updates its 5-year plan. - 56 - 151 THE HOUSING AUTHORITY OF MARICOPA COUNTY SCHEDULE OF PRIOR AUDIT FINDINGS (CONT’D) FOR THE YEAR ENDED JUNE 30, 2014 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2011-001 Activities Allowed and Unallowed Housing Choice Vouchers – CFDA#14.871 Condition: The Housing Choice Voucher (HCV) program has accumulated $2,973,256 more in HUD funding than was expended for Housing Assistance Payments (HAP). However, the available cash balance as of June 30, 2011 was $2,513,093. Recommendation: We recommend that an immediate plan be put in place to recover all deficient funding and that all future Housing Choice Voucher funds be retained in the program as required by HUD. Status: Corrective action in progress. Positive operating results and additional work on the NRA balance have reduced the cash deficiency to $229,857. The Authority is currently in discussions with HUD regarding possible repayment. No current year audit finding noted. 2010-01 – HUD Management and Financial Review Public Housing – CFDA#14.850a Section 8 Housing Choice Voucher Program – CFDA#14.871 Capital Fund Program – CFDA#14.872 Condition: The prior audit findings listed, in detail, the findings of the HUD management review which included 30 findings relating to the management of HUD programs. Recommendation: We recommend the Authority continue to work with HUD to finalize Correction Action Plan. Status: Corrective Action completed this fiscal year. The Authority has entered into a repayment agreement to close the remaining findings. - 57 - 152 _____________________________________________________________________________________________ December 3, 2014 Barbara Gallegos U.S. Department of Housing & Urban Development Office of Public Housing One North Central Suite 600 Phoenix, AZ 85004‐4414 Subject: AZ009 2014 Single Audit Corrective Action Plan Dear Ms. Gallegos, The Housing Authority of Maricopa County respectfully submits the following Corrective Action Plan for the year ended 2014. The audit findings from the Schedule of Findings and Questions Costs for the year ended June 30, 2014 are discussed below. The findings are numbered consistently with the numbers assigned in the schedule provided by the independent accounting firm Maletta & Company, CPAs, 43 Enterprise Drive, Bristol, Connecticut 06010. FINDINGS RELATED TO THE FINANCIAL STATEMENT AUDIT AS REQUIRED TO BE REPORTED IN ACCORDANCE WITH GENERALLY ACCEPTED GOVERNMENT AUDITING STANDARDS SIGNIFICANT DEFICIENCY 2014‐001 General Ledger Maintenance Condition: Financial information relating to bank reconciliations, interprogram transactions, and portability payments and balances were not recorded appropriately and/or reconciled on a timely basis. Criteria: Adequate internal controls require accurate recording and periodic reconciliation of general ledger activity to ensure accurate financial reporting. Cause: Employee turnover; ineffective procedures for the recording and tracking of HCV portability transactions and other cash receipts. Effect or Potential Effect: Additional yearend reconciliations and adjustments were necessary. Potential effect on interim financial reporting. Recommendation: We recommend that portability activity be recorded and reconciled on a monthly basis to ensure accurate timely financial recording of payments and balances. Corrective Action/Actions Taken: HAMC has fully implemented review and reconciliation of interprogram transactions and bank reconciliations on a regular basis. Financial activity for interprogram transactions are being reviewed and reconciled on a quarterly basis. Bank reconciliations are being performed on a monthly basis. 8910 N. 78th Ave | Peoria AZ 85345 | p 602.744.4500 | f 602.744‐4550 | tdd 602.744.4540 153 www.maricopahousing.org All receipts of portability payments are now tracked separately in the general ledger and tied to bank reconciliations. The Agency has been implementing usage of the enterprise finance system to record and reconcile portability activity. Target Completion Date (Accountability): HAMC will fully implement improvements to tracking portability transactions, generating balance statements for housing authorities and recording portability receivables by April 30, 2015. (Finance Manager). 2014‐002 Fixed Asset Recording and Capital Grant Reporting Condition: Capital grant activity and the related Fixed Assets are not maintained in accordance with generally accepted accounting principles. Criteria: Revenue is to be recognized when earned and assets capitalized in accordance with GAAP to facilitate accurate financial reporting. Cause: Multiple staffing changes and Capital grant activity being maintained on a budgetary basis whereas expenditures accumulate by grant and are recognized in the financials at yearend. Effect or Potential Effect: Yearend closing entries were needed to accurately report capital expenditures and revenues. Interim and internal financial reporting does not reflect capital activity. Recommendation: We recommend that capital grant activity be maintained in accordance with GAAP by modifying the Capital Grant chart of accounts to include revenue and expense accounts, whereby operating period activity can be tracked and reported as necessary. In addition, the Authority should consider automating the recognition of revenues to coincide with the recording of capital grant expenditures to assist in grant tracking and reporting in accordance with GAAP. Corrective Action/Actions Taken: Corrective Action completed this fiscal year. HAMC has fully implemented procedures for grant tracking and reporting in accordance with GAAP. Target Completion Date (Accountability): Complete. (Finance Manager). FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2014‐003 Eligibility Housing Choice Vouchers – CFDA#14.871 Condition: The Authority did not recertify participants in a timely basis. In addition, income calculations and documentation procedures were not made in accordance HUD regulations. Criteria: HUD regulations require PHAs reexamine family income calculated in accordance with program requirements using third‐party documentation at least once every 12 months. Cause Employee turnover, lack of staff experience and ineffective review/quality control procedures. Effect or Potential Effect: Potential overpayment of HAP due to incorrect and/or untimely income calculations. Recommendation: We recommend that the Authority adhere to resident file Quality Control review procedures to monitor and evaluate HCV staff performance and ensure compliance with HUD regulations. Corrective Action/Actions Taken: Corrective Action completed this fiscal year. HCV Program Supervisor conducts monthly file Quality Control reviews. HCV Housing Specialists’ performance is evaluated for compliance with HUD 154 2 155 Appendix E: Grievance Procedures 156 Public Housing Grievance Procedures – A description of the grievance and informal hearing and review procedures that the PHA makes available to its residents and applicants. INFORMAL REVIEW PROCESS [24 CFR 960.208(a) and PH Occ. GB, p. 58] Informal reviews are provided for public housing applicants. An applicant is someone who has applied for admission to the public housing program, but is not yet a tenant in the program. Informal reviews are intended to provide a means for an applicant to dispute a determination of ineligibility for admission to a project [24 CFR 960.208(a)]. Applicants to public housing are not entitled to the same process afforded tenants in the HAMC grievance procedure [24 CFR 966.53(a) and PH Occ. GB, p. 58]. Informal reviews provide the applicant a means to hear the details of the reasons for rejection, and an opportunity to present evidence to the contrary if available, and to claim mitigating circumstances if possible. Use of Informal Review Process While HAMC must offer the opportunity of an informal review to applicants who have been determined as ineligible for admission, HAMC could make the informal review process available to applicants who wish to dispute other HAMC actions that adversely affect them. HAMC will only offer informal reviews to applicants for the purpose of disputing denials of admission. Notice of Denial [24 CFR 960.208(a)] HAMC must give an applicant prompt notice of a decision denying eligibility for admission. The notice must contain a brief statement of the reasons for HAMC decision, and must also state that the applicant may request an informal review to dispute the decision. The notice must describe how to obtain the informal review. Prior to notification of denial based on information obtained from criminal or sex offender registration records, the family, in some cases, must be given the opportunity to dispute the information in those records which would be the basis of the denial. See Section 2‐III.F. for details concerning this requirement. Scheduling an Informal Review A request for an informal review must be made in writing and delivered to HAMC either in person or by first class mail, by the close of the business day, no later than 10 calendar days from the date of HAMC’s notification of denial of admission. HAMC must schedule and send written notice of the informal review within 10 business days of the family’s request. Conducting an Informal Review [PH Occ. GB, p. 58] The informal review will be conducted by a person other than the one who made the decision under review, or a subordinate of this person. The applicant will be provided an opportunity to present written objections to the decision of HAMC. The person conducting the informal review will make a recommendation to HAMC, but HAMC is responsible for making the final decision as to whether admission should be granted or denied. Informal Hearing Decision [PH Occ. GB, p. 58] HAMC will notify the applicant of HAMC’s final decision, including a brief statement of the reasons for the final decision. In rendering a decision, HAMC may evaluate the following matters: Whether or not the grounds for denial were stated factually in the notice The validity of grounds for denial of admission. If the grounds for denial are not specified in the regulations or in HAMC policy, then the decision to deny assistance will be overturned. See Chapter 2 for a detailed discussion of the grounds for applicant denial. 157 The validity of the evidence: HAMC will evaluate whether the facts presented prove the grounds for denial of admission. If the facts prove that there are grounds for denial, and the denial is required by HUD, HAMC will uphold the decision to deny admission. If the facts prove the grounds for denial, and the denial is discretionary, HAMC may consider the recommendation of the person conducting the informal review in making the final decision whether to deny admission. HAMC will notify the applicant of the final decision, including a statement explaining the reason(s) for the decision. The notice will be mailed, with return receipt requested, within 10 business days of the informal review, to the applicant and his or her representative, if any. If the informal review decision overturns the denial, processing for admission will resume. Reasonable Accommodation for Persons with Disabilities [24 CFR 966.7] Persons with disabilities may request reasonable accommodations to participate in the informal review process and HAMC must consider such accommodations. HAMC must also consider reasonable accommodation requests pertaining to the reasons for denial if related to the person’s disability. HEARING AND APPEAL PROVISIONS FOR NON‐CITIZENS [24 CFR 5.514] Denial or termination of assistance based on immigration status is subject to special hearing and notice rules. These special hearings are referred to in the regulations as informal hearings, but the requirements for such hearings are different from the informal hearings used to deny applicants for reasons other than immigration status. Assistance to a family may not be delayed, denied, or terminated on the basis of immigration status at any time prior to a decision under the United States Citizenship and Immigration Services (USCIS) appeal process. Assistance to a family may not be terminated or denied while HAMC hearing is pending, but assistance to an applicant may be delayed pending the completion of the informal hearing. A decision against a family member, issued in accordance with the USCIS appeal process or HAMC informal hearing process, does not preclude the family from exercising the right, that may otherwise be available, to seek redress directly through judicial procedures. Notice of Denial or Termination of Assistance [24 CFR 5.514(d)] The notice of denial or termination of assistance for non‐citizens must advise the family of any of the following that apply: That financial assistance will be denied or terminated, and provide a brief explanation of the reasons for the proposed denial or termination of assistance. The family may be eligible for pro‐ration of assistance. In the case of a tenant, the criteria and procedures for obtaining relief under the provisions for preservation of families [24 CFR 5.514 and 5.518]. That the family has a right to request an appeal to the USCIS of the results of secondary verification of immigration status and to submit additional documentation or explanation in support of the appeal. That the family has a right to request an informal hearing with HAMC either upon completion of the USCIS appeal or in lieu of the USCIS appeal. For applicants, assistance may not be delayed until the conclusion of the USCIS appeal process, but assistance may be delayed during the period of the informal hearing process. United States Citizenship and Immigration Services Appeal Process [24 CFR 5.514(e)] When HAMC receives notification that the USCIS secondary verification failed to confirm eligible immigration status, HAMC must notify the family of the results of the USCIS verification. The family will have 30 days from the date of the notification to 158 request an appeal of the USCIS results. The request for appeal must be made by the family in writing directly to the USCIS. The family must provide HAMC with a copy of the written request for appeal and proof of mailing. HAMC will notify the family in writing of the results of the USCIS secondary verification within 10 business days of receiving the results. The family must provide HAMC with a copy of the written request for appeal and proof of mailing within 10 business days of sending the request to the USCIS. The family must forward to the designated USCIS office any additional documentation or written explanation in support of the appeal. This material must include a copy of the USCIS document verification request (used to process the secondary request) or such other form specified by the USCIS, and a letter indicating that the family is requesting an appeal of the USCIS immigration status verification results. The USCIS will notify the family, with a copy to HAMC, of its decision. When the USCIS notifies HAMC of the decision, HAMC must notify the family of its right to request an informal hearing. HAMC will send written notice to the family of its right to request an informal hearing within 10 business days of receiving notice of the USCIS decision regarding the family’s immigration status. Informal Hearing Procedures for Applicants [24 CFR 5.514(f)] After notification of the USCIS decision on appeal, or in lieu of an appeal to the USCIS, an applicant family may request that HAMC provide a hearing. The request for a hearing must be made either within 30 days of receipt of HAMC notice of denial, or within 30 days of receipt of the USCIS appeal decision. The informal hearing procedures for applicant families are described below. Informal Hearing Officer HAMC must provide an informal hearing before an impartial individual, other than a person who made or approved the decision under review, and other than a person who is a subordinate of the person who made or approved the decision. Evidence The family must be provided the opportunity to examine and copy at the family’s expense, at a reasonable time in advance of the hearing, any documents in the possession of HAMC pertaining to the family’s eligibility status, or in the possession of the USCIS (as permitted by USCIS requirements), including any records and regulations that may be relevant to the hearing. The family will be allowed to copy any documents related to the hearing at a cost of $.25 per page. The family must request discovery of HAMC documents no later than 12:00 p.m. two business days prior to the hearing. The family must be provided the opportunity to present evidence and arguments in support of eligible status. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings. The family must also be provided the opportunity to refute evidence relied upon by HAMC, and to confront and cross‐examine all witnesses on whose testimony or information HAMC relies. Representation and Interpretive Services The family is entitled to be represented by an attorney or other designee, at the family’s expense, and to have such person make statements on the family’s behalf. 159 The family is entitled to arrange for an interpreter to attend the hearing, at the expense of the family, or HAMC, as may be agreed upon by the two parties. If the family does not arrange for their own interpreter, HAMC is still obligated to provide oral translation services in accordance with its LEP Plan. Recording of the Hearing The family is entitled to have the hearing recorded by audiotape. HAMC may, but is not required to provide a transcript of the hearing. HAMC will not provide a transcript of an audio taped informal hearing. Hearing Decision HAMC must provide the family with a written notice of the final decision, based solely on the facts presented at the hearing, within 14 calendar days of the date of the informal hearing. The notice must state the basis for the decision. Retention of Documents [24 CFR 5.514(h)] HAMC must retain for a minimum of 3 years the following documents that may have been submitted to HAMC by the family, or provided to HAMC as part of the USCIS appeal or HAMC informal hearing process: The application for assistance The form completed by the family for income re‐certification Photocopies of any original documents, including original USCIS documents The signed verification consent form The USCIS verification results The request for a USCIS appeal The final USCIS determination The request for an informal hearing The final informal hearing decision Informal Hearing Procedures for Residents [24 CFR 5.514(f)] After notification of the USCIS decision on appeal, or in lieu of an appeal to the USCIS, a resident family may request that HAMC provide a hearing. The request for a hearing must be made either within 30 days of receipt of HAMC notice of termination, or within 30 days of receipt of the USCIS appeal decision. The informal hearing procedures for resident families whose tenancy is being terminated based on immigration status is the same as for any grievance under the grievance procedures for resident families found in Part III below. GRIEVANCE PROCEDURES FOR PUBLIC HOUSING RESIDENTS REQUIREMENTS [24 CFR 966.52] HAMC must have a grievance procedure in place through which residents of public housing are provided an opportunity to grieve any HAMC action or failure to act involving the lease or HAMC policies which adversely affect their rights, duties, welfare, or status. HAMC grievance procedure must be included in, or incorporated by reference in, the lease. HAMC grievance procedure will be incorporated by reference in the tenant lease. HAMC must provide at least 30 days notice to tenants and resident organizations setting forth proposed changes in HAMC grievance procedure, and providing an opportunity to present written comments. Comments submitted must be considered by HAMC before adoption of any grievance procedure changes by HAMC. 160 Residents and resident organizations will have 30 calendar days from the date they are notified by HAMC of any proposed changes in HAMC grievance procedure, to submit written comments to HAMC. HAMC must furnish a copy of the grievance procedure to each tenant and to resident organizations. DEFINITIONS [24 CFR 966.53; 24 CFR 966.51(a) (2) (i)] There are several terms used by HUD with regard to public housing grievance procedures, which take on specific meanings different from their common usage. These terms are as follows: Grievance – any dispute which a tenant may have with respect to HAMC action or failure to act in accordance with the individual tenant’s lease or HAMC regulations which adversely affect the individual tenant’s rights, duties, welfare or status Complainant – any tenant whose grievance is presented to HAMC or at the project management office Due Process Determination – a determination by HUD that law of the jurisdiction requires that the tenant must be given the opportunity for a hearing in court which provides the basic elements of due process before eviction from the dwelling unit Elements of Due Process – an eviction action or a termination of tenancy in a state or local court in which the following procedural safeguards are required: Adequate notice to the tenant of the grounds for terminating the tenancy and for eviction Right of the tenant to be represented by counsel Opportunity for the tenant to refute the evidence presented by HAMC including the right to confront and cross‐ examine witnesses and to present any affirmative legal or equitable defense which the tenant may have A decision on the merits Hearing Officer/Panel – a person/panel selected in accordance with HUD regulations to hear grievances and render a decision with respect thereto Tenant – the adult person (or persons) (other than a live‐in aide) Who resides in the unit, and who executed the lease with HAMC as lessee of the dwelling unit, or, if no such person now resides in the unit, Who resides in the unit, and who is the remaining head of household of the tenant family residing in the dwelling unit Resident Organization – includes a resident management corporation APPLICABILITY [24 CFR 966.51] Potential grievances could address most aspects of HAMC’s operation. However, there are some situations for which the grievance procedure is not applicable. The grievance procedure is applicable only to individual tenant issues relating to HAMC. It is not applicable to disputes between tenants not involving HAMC. Class grievances are not subject to the grievance procedure and the grievance procedure is not to be used as a forum for initiating or negotiating policy changes of HAMC. If HUD has issued a due process determination, HAMC may exclude from HAMC grievance procedure for any grievance concerning a termination of tenancy or eviction that involves: Any criminal activity that threatens the health, safety or right to peaceful enjoyment of the premises of other residents or employees of HAMC Any violent or drug‐related criminal activity on or off such premises Any criminal activity that resulted in felony arrest or conviction of a household member HAMC must grant opportunity for grievance hearings for all lease terminations, regardless of cause, but may use expedited grievance procedures, as described below, to deal with the first two of the above three categories of lease terminations. INFORMAL SETTLEMENT OF GRIEVANCE [24 CFR 966.54] 161 HUD regulations state that any grievance must be personally presented, either orally or in writing, to HAMC office so that the grievance may be discussed informally and settled without a hearing. HAMC will accept requests for an informal settlement of a grievance in writing, to HAMC office within 5 calendar days of the grievable event. Within 14 calendar days of receipt of the request HAMC will arrange a meeting with the tenant at a mutually agreeable time and confirm such meeting in writing to the tenant. If a tenant fails to attend the scheduled meeting without prior notice, HAMC will not reschedule the appointment only if the tenant can show good cause for failing to appear, or if it is needed as a reasonable accommodation for a person with disabilities. Good cause is defined as an unavoidable conflict which seriously affects the health, safety or welfare of the family. HUD regulations require that a summary of such discussion will be prepared within a reasonable time and one copy will be given to the tenant and one retained in HAMC’s tenant file. The summary must specify the names of the participants, dates of meeting, the nature of the proposed disposition of the complaint and the specific reasons therefore, and will specify the procedures by which a hearing may be obtained if the complainant is not satisfied. HAMC will prepare a summary of the informal settlement within 5 calendar days; one copy to be mailed to the tenant and one copy to be retained in HAMC’s tenant file. PROCEDURES TO OBTAIN A HEARING [24 CFR 966.55] Requests for Hearing and Failure to Request [24 CFR 966.55(a), (c), and (d)] All grievances must be presented in accordance with the informal procedures prescribed above as a condition prior to a grievance hearing. However, if the complainant can show good cause for failure to proceed with the informal settlement process to the hearing officer/panel, the hearing officer/panel may waive this provision [24 CFR 966.55(d)]. The complainant must submit the request in writing for a grievance hearing within a reasonable time after receipt of the summary of informal discussion [24 CFR 966.55(a)]. The request must specify the reasons for the grievance and the action or relief sought. The resident must submit a written request for a grievance hearing to HAMC within 5 calendar days of the tenant’s receipt of the summary of the informal settlement. If the complainant does not request a hearing, HAMC’s disposition of the grievance under the informal settlement process will become final. However, failure to request a hearing does not constitute a waiver by the complainant of the right to contest HAMC’s action in disposing of the complaint in an appropriate judicial proceeding [24 CFR 966.55(c)]. Escrow Deposits [24 CFR 966.55(e)] Before a hearing is scheduled in any grievance involving the amount of rent that HAMC claims is due, the family must pay an escrow deposit to HAMC. When a family is required to make an escrow deposit, the amount is the amount of rent HAMC states is due and payable as of the first of the month proceeding the month in which the family’s act or failure to act took place. After the first deposit the family must deposit the same amount monthly until the family’s complaint is resolved by decision of the hearing officer/panel. HAMC must waive the requirement for an escrow deposit where the family has requested a financial hardship exemption from minimum rent requirements or is grieving the effect of welfare benefits reduction in calculation of family income [24 CFR 5.630(b)(3)]. 162 Unless HAMC waives the requirement, the family’s failure to make the escrow deposit will terminate the grievance procedure. A family’s failure to pay the escrow deposit does not waive the family’s right to contest HAMC’s disposition of the grievance in any appropriate judicial proceeding. HAMC will not waive the escrow requirement for grievances involving rent amounts except where required to do so by regulation. Scheduling of Hearings [24 CFR 966.55(f)] If the complainant has complied with all requirements for requesting a hearing as described above, a hearing must be scheduled by the hearing officer/panel promptly for a time and place reasonably convenient to both the complainant and HAMC. A written notification specifying the time, place and the procedures governing the hearing must be delivered to the complainant and appropriate HAMC official. Within 14 calendar days of receiving a written request for a hearing, a hearing officer will be contacted to schedule the hearing and a written notice of the hearing sent to the complainant. HAMC may wish to permit the tenant to request to reschedule a hearing for good cause. The tenant may request to reschedule a hearing for good cause, or if it is needed as a reasonable accommodation for a person with disabilities. Good cause is defined as an unavoidable conflict which seriously affects the health, safety, or welfare of the family. Requests to reschedule a hearing must be made in writing two business days prior to the hearing date. At its discretion, HAMC may request documentation of the “good cause” prior to rescheduling the hearing. Expedited Grievance Procedure [24 CFR 966.55(g)]: HAMC does not offer expedited grievances for any grievance concerning a termination of tenancy or eviction. SELECTION OF HEARING OFFICER [24 CFR 966.55(b)] The grievance hearing must be conducted by an impartial person or persons appointed by HAMC, other than the person who made or approved HAMC action under review, or a subordinate of such person. HAMC must determine the methodology for appointment of the hearing officer and it must be stated in the grievance procedure. PROCEDURES GOVERNING THE HEARING [24 CFR 966.56] Rights of Complainant [24 CFR 966.56(b)] The complainant will be afforded a fair hearing. This includes: The opportunity to examine before the grievance hearing any HAMC documents, including records and regulations that are directly relevant to the hearing. The tenant must be allowed to copy any such document at the tenant’s expense. If HAMC does not make the document available for examination upon request by the complainant, HAMC may not rely on such document at the grievance hearing. The tenant will be allowed to copy any documents related to the hearing at a cost of $.25 per page. The family must request discovery of HAMC documents no later than 12:00 p.m. two business days prior to the hearing. The right to be represented by counsel or other person chosen as the tenant’s representative and to have such person makes statements on the tenant’s behalf. Hearings may be attended by the following applicable persons: HAMC representative(s) and any witnesses for HAMC The tenant and any witnesses for the tenant The tenant’s counsel or other representative 163 Any other person approved by HAMC as a reasonable accommodation for a person with a disability The right to a private hearing unless the complainant requests a public hearing. The right to present evidence and arguments in support of the tenant’s complaint, to controvert evidence relied on by HAMC or project management, and to confront and cross‐examine all witnesses upon whose testimony or information HAMC or project management relies. A decision based solely and exclusively upon the facts presented at the hearing. Decision without Hearing [24 CFR 966.56(c)] The hearing officer/panel may render a decision without proceeding with the hearing if the hearing officer/panel determines that the issue has been previously decided in another proceeding. Failure to Appear [24 CFR 966.56(d)] If the complainant or HAMC fails to appear at a scheduled hearing, the hearing officer/panel may make a determination to postpone the hearing for not to exceed five calendar days or may make a determination that the party has waived his/her right to a hearing. Both the complainant and the HAMC must be notified of the determination by the hearing officer/panel: Provided, That a determination that the complainant has waived his/her right to a hearing will not constitute a waiver of any right the complainant may have to contest the HAMC’s disposition of the grievance in an appropriate judicial proceeding. There may be times when a complainant does not appear due to unforeseen circumstances which are out of their control and are no fault of their own. If the tenant does not appear at the scheduled time of the hearing, the hearing officer will wait up to 15 minutes. If the tenant appears within 15 minutes of the scheduled time, the hearing will be held. If the tenant does not arrive within 15 minutes of the scheduled time, they will be considered to have failed to appear. If the tenant fails to appear and was unable to reschedule the hearing in advance, the tenant must contact HAMC within 24 hours of the scheduled hearing date, excluding weekends and holidays. The hearing officer may reschedule the hearing only if the tenant can show good cause for the failure to appear, or it is needed as a reasonable accommodation for a person with disabilities. “Good cause” is defined as an unavoidable conflict which seriously affects the health, safety, or welfare of the family. General Procedures [24 CFR 966.56(e), (f), and (g)] At the hearing, the complainant must first make a showing of an entitlement to the relief sought and thereafter HAMC must sustain the burden of justifying HAMC action or failure to act against which the complaint is directed [24 CFR 966.56(e)]. The hearing must be conducted informally by the hearing officer/panel. HAMC and the tenant must be given the opportunity to present oral or documentary evidence pertinent to the facts and issues raised by the complaint and question any witnesses. In general, all evidence is admissible and may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings [24 CFR 966.56(f)]. Any evidence to be considered by the hearing officer must be presented at the time of the hearing. There are four categories of evidence. Oral evidence: the testimony of witnesses Documentary evidence: a writing which is relevant to the case, for example, a letter written to HAMC. Writings include all forms of recorded communication or representation, including letters, emails, words, pictures, sounds, videotapes or symbols or combinations thereof. Demonstrative evidence: Evidence created specifically for the hearing and presented as an illustrative aid to assist the hearing officer, such as a model, a chart or other diagram. 164 Real evidence: A tangible item relating directly to the case. Hearsay Evidence is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter. Even though evidence, including hearsay, is generally admissible, hearsay evidence alone cannot be used as the sole basis for the hearing officer’s decision. If the HAMC fails to comply with the discovery requirements (providing the tenant with the opportunity to examine HAMC documents prior to the grievance hearing), the hearing officer will refuse to admit such evidence. Other than the failure of HAMC to comply with discovery requirements, the hearing officer has the authority to overrule any objections to evidence. The hearing officer/panel must require HAMC, the complainant, counsel and other participants or spectators to conduct themselves in an orderly fashion. Failure to comply with the directions of the hearing officer/panel to obtain order may result in exclusion from the proceedings or in a decision adverse to the interests of the disorderly party and granting or denial of the relief sought, as appropriate [24 CFR 966.56(f)]. The complainant or HAMC may arrange, in advance and at the expense of the party making the arrangement, for a transcript of the hearing. Any interested party may purchase a copy of such transcript [24 CFR 966.56(g)]. If the complainant would like HAMC to record the proceedings by audiotape, the request must be made to HAMC by 12:00 p.m. two business days prior to the hearing. HAMC will consider that an audio tape recording of the proceedings is a transcript. Accommodations of Persons with Disabilities [24 CFR 966.56(h)] HAMC must provide reasonable accommodation for persons with disabilities to participate in the hearing. Reasonable accommodation may include qualified sign language interpreters, readers, accessible locations, or attendants. If the tenant is visually impaired, any notice to the tenant which is required in the grievance process must be in an accessible format. DECISION OF THE HEARING OFFICER [24 CFR 966.57] The hearing officer must issue a written decision, stating the reasons for the decision, within a reasonable time after the hearing. Factual determinations relating to the individual circumstances of the family must be based on a preponderance of evidence presented at the hearing. A copy of the decision must be sent to the tenant and HAMC. HAMC must retain a copy of the decision in the tenant’s folder. A copy of the decision, with all names and identifying references deleted, must also be maintained on file by HAMC and made available for inspection by a prospective complainant, his/her representative, or the hearing officer/panel [24 CFR 966.57(a)]. In rendering a decision, the hearing officer will consider the following matters: HAMC Notice to the Family: The hearing officer will determine if the reasons for HAMC’s decision are factually stated in the notice. Discovery: The hearing officer will determine if the family was given the opportunity to examine any relevant documents in accordance with HAMC policy. HAMC Evidence to Support the HAMC Decision: The evidence consists of the facts presented. Evidence is not conclusion and it is not argument. The hearing officer will evaluate the facts to determine if they support HAMC’s conclusion. Validity of Grounds for Termination of Tenancy (when applicable): The hearing officer will determine if the termination of tenancy is for one of the grounds specified in the HUD regulations and HAMC policies. If the grounds 165 for termination are not specified in the regulations or in compliance with HAMC policies, then the decision of HAMC will be overturned. The hearing officer will issue a written decision to the family and HAMC no later than 10 business days after the hearing. The report will contain the following information: Hearing information: Name of the complainant Date, time and place of the hearing Name of the hearing officer Name of HAMC representative(s) Name of family representative (if any) Names of witnesses (if any) Background: A brief, impartial statement of the reason for the hearing and the date(s) on which the informal settlement was held, who held it, and a summary of the results of the informal settlement. Also includes the date the complainant requested the grievance hearing. Summary of the Evidence: The hearing officer will summarize the testimony of each witness and identify any documents that a witness produced in support of his/her testimony and that are admitted into evidence. Findings of Fact: The hearing officer will include all findings of fact, based on a preponderance of the evidence. Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Preponderance of the evidence may not be determined by the number of witnesses, but by the greater weight of all evidence. Conclusions: The hearing officer will render a conclusion derived from the facts that were found to be true by a preponderance of the evidence. The conclusion will result in a determination of whether these facts uphold HAMC’s decision. Order: The hearing report will include a statement of whether HAMC’s decision is upheld or overturned. If it is overturned, the hearing officer will instruct HAMC to change the decision in accordance with the hearing officer’s determination. In the case of termination of tenancy, the hearing officer will instruct HAMC to restore the family’s status. Procedures for Further Hearing The hearing officer may ask the family for additional information and/or might adjourn the hearing in order to reconvene at a later date, before reaching a decision. If the family misses an appointment or deadline ordered by the hearing officer, the action of HAMC will take effect and another hearing will not be granted. Final Decision [24 CFR 966.57(b)] A decision by the hearing officer/panel in favor of the PHA or which denies the relief requested by the tenant in whole or part shall not constitute a waiver of, nor affect in any manner whatever, the rights of the tenant to a trial or judicial review in any proceedings which may thereafter by brought in the matter [24 CFR 966.57(c)]. 166 SECTION 17 COMPLAINTS AND APPEALS 17.1 General The informal hearing requirements defined in HUD regulations are applicable to participating families who disagree with an action, decision, or inaction of HAMC. This chapter describes the policies to be used when families disagree with an HAMC decision. The requirements are explained for informal reviews and hearings. It is the policy of the HAMC to ensure that all families have the benefit of all protections due to them under the law. 17.2 General Complaints HAMC will respond promptly to complaints from families, owners, employees, and members of the public. All complaints must be provided to HAMC in writing with the exception of complaints regarding HQS violations. Program participants may report HQS violations via telephone. 17.3 Informal Review for Applicants Informal reviews apply to applicants: those families for which a Housing Assistance Payments contract has not yet been executed. HAMC will provide applicants with the opportunity for an informal review of decisions denying the following actions: Listing on or removal from the waiting list; Issuance of a voucher; Participation in the program; and, Assistance under portability procedures. When HAMC determines that an applicant is ineligible for the program, the family will be notified of their ineligibility in writing. The notice will contain: The reason(s) they are ineligible; The procedure for requesting a review if the applicant does not agree with the decision; and, The time limit for requesting a review. When denying admission for criminal activity HAMC will provide the subject of the record and the applicant with a copy of the criminal record upon which the decision to deny was based. It will be the responsibility of the applicant to resolve any incorrect information reported in the criminal report. Informal reviews are not required and will not be provided for established policies and procedures and HAMC determinations such as: 167 Discretionary administrative determinations by the HAMC General policy issues or class grievances A determination of the family unit size under the HAMC subsidy standards Refusal to extend or suspend a voucher A HAMC determination not to grant approval of the tenancy Determination that unit is not in compliance with HQS Determination that unit is not in accordance with HQS due to family size or composition 17.4 Procedure for Review A request for an informal review must be received in writing by the close of the business day, no later than 10 days from the date of the HAMC's notification of denial of assistance. The informal review will be scheduled within 30 days from the date the request is received. All reviews will be conducted by an individual other than the person who rendered the original decision. In order to expedite the review and provide improved service to customers, HAMC will encourage the review to be conducted by telephone if acceptable to the applicant. The applicant will be given the option of presenting oral or written objections to the decision. Both the HAMC and the family may present evidence and witnesses. The family may use an attorney or other representative to assist them at their own expense. A notice of the review findings will be provided in writing to the applicant within 15 days after the review. It shall include the decision of the review officer, and an explanation of the reasons for the decision. All requests for a review, supporting documentation, and a copy of the final decision will be retained in the family's file. 17.5 Informal Hearings for Participants Hearings are only available to program participants. Participants are households in which a HAP contract has been executed. Prior to execution of the HAP contract, all households are considered applicants and are only entitled to a review as described above. Hearing procedures will be provided to families in the briefing packet at the time of issuance of the voucher. HAMC will provide participants with prompt notice of determinations, which will include: The proposed action or decision of the HAMC; The date the proposed action or decision will take place; The family's right to an explanation of the basis for the HAMC's decision. The procedures for requesting a hearing if the family disputes the action or decision; The time limit for requesting the hearing. When denying admission for criminal activity HAMC will provide the subject of the record and the applicant with a copy of the criminal record upon which the decision to deny was based. It will be the responsibility of the applicant to resolve any incorrect information reported in the criminal report. 168 HAMC will provide participants with the opportunity for an informal hearing for decisions related to any of the following determinations. The opportunity for an informal hearing will be provided before termination of assistance. Determination of the family's annual or adjusted income and the computation of the housing assistance payment; Determination to terminate assistance for any reason; and, Informal hearings are not required for established policies and procedures and HAMC determinations such as: Discretionary administrative determinations by the HAMC General policy issues or class grievances Establishment of the HAMC schedule of utility allowances for families in the program A HAMC determination not to approve an extension or suspension of a voucher term A HAMC determination not to approve a unit or lease A HAMC determination that an assisted unit is not in compliance with HQS unless the non-compliance is the result of family obligations A HAMC determination to exercise or not exercise any right or remedy against the owner under a HAP contract 17.6 Notification of Hearing It is HAMC’s objective to resolve disputes at the lowest level possible, and to make every effort to avoid the most severe remedies. However, if this is not possible, the HAMC will ensure that participants will receive all of the protections and rights afforded by the law and the regulations. A request for a hearing must be received in writing by the close of the business day, no later than 10 days from the date of the HAMC's notification of proposed termination. The hearing will be scheduled within 30 days from the date the request is received. All hearings will be conducted by an individual other than the person who rendered the original decision. The notice of proposed termination shall include the following information: The date and time of the hearing; The location where the hearing will be held; The family's right to bring evidence, witnesses, legal or other representation at the family's expense; The right to view any documents or evidence in the possession of the HAMC upon which the HAMC based the proposed action and, at the family's expense, to obtain a copy of such documents prior to the hearing. A notice to the family that the HAMC will request a copy of any documents or evidence the family will use at the hearing. Requests for documents or evidence must be received by each party no later than 15 days before the scheduled hearing date. 169 17.7 Hearing Procedures After a hearing date is confirmed, the family may request to reschedule only upon showing "good cause," which is defined as an unavoidable conflict which seriously affects the health, safety or welfare of the family. If a family does not appear at a scheduled hearing and has not rescheduled the hearing in advance, the family must contact the HAMC within 24 hours, excluding weekends and holidays. The HAMC will reschedule the hearing only if the family can show good cause for the failure to appear. Families have the right to: Present written or oral objections to the HAMC's determination; Examine the documents in the file which are the basis for the HAMC's action, and all documents submitted to the Hearing Officer; Copy any relevant documents at their expense; Present any information or witnesses pertinent to the issue of the hearing; Request that HAMC staff be available or present at the hearing to answer questions pertinent to the case; and Be represented by legal counsel, advocate, or designated representatives at their own expense. If the family requests copies of documents relevant to the hearing, the HAMC will make the copies for the family and assess a charge of $.25 per copy. In no case will the family be allowed to remove the file from the HAMC's office. In addition to other rights contained in this Chapter, the HAMC has a right to: Present evidence and any information pertinent to the issue of the hearing; Be notified if the family intends to be represented by legal counsel, advocate, or another party; Examine and copy any documents to be used by the family prior to the hearing; Have its attorney present; and Have staff persons and other witnesses familiar with the case present. All hearings will be conducted by an individual other than the person who rendered the original decision. The hearing shall concern only the issues for which the family has received the opportunity for hearing. Evidence presented at the hearing may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings. No documents may be presented which have not been provided to the other party before the hearing if requested by the other party. "Documents" includes records and regulations. The Hearing Officer may ask the family for additional information and/or might adjourn the hearing in order to reconvene at a later date, before reaching a decision. If the family misses an appointment or deadline ordered by the Hearing Officer, the action of the HAMC shall take effect and another hearing will not be granted. 170 The Hearing Officer will determine whether the action, inaction or decision of the HAMC is legal in accordance with HUD regulations and this Administrative Plan based upon the evidence and testimony provided at the hearing. Factual determinations relating to the individual circumstances of the family will be based on a preponderance of the evidence presented at the hearing. A notice of the hearing findings shall be provided in writing to the HAMC and the family within 15 days and shall include: A clear summary of the decision and reasons for the decision; If the decision involves money owed, the amount owed; The date the decision goes into effect. The HAMC is not bound by hearing decisions: Which concern matters in which the HAMC is not required to provide an opportunity for a hearing Which conflict with or contradict to HUD regulations or requirements; Which conflict with or contradict Federal, State or local laws; or Which exceed the authority of the person conducting the hearing. The HAMC shall send a letter to the participant if it determines the HAMC is not bound by the Hearing Officer's determination within 15 days from the date of the letter issued by the Hearing Officer. The letter shall include the HAMC's reasons for the decision. All requests for a hearing, supporting documentation, and a copy of the final decision will be retained in the family's file. 17.8 Provisions for "Restrictions on Assistance to Non-Citizens" Assistance to the family may not be delayed, denied or terminated on the basis of immigration status at any time prior to the receipt of a decision if the family has a pending appeal with INS. 17.9 INS Determination of Ineligibility If a family member claims to be an eligible immigrant and the INS SAVE system and manual search do not verify the claim, the HAMC notifies the applicant or participant within 15 days of their right to file an appeal with INS within thirty days from the notification from HAMC; or of their right to request an informal review or hearing with HAMC, either in lieu of or subsequent to the INS appeal. If the family appeals to the INS, they must give HAMC a copy of the appeal and proof of mailing or the HAMC may proceed to deny or terminate assistance. The time period to request an appeal may be extended by HAMC for good cause. The request for an HAMC hearing must be made within 10 days of receipt of the notice offering the hearing or, if an appeal was made to the INS, within 10 days of receipt of that notice. After receipt of a request for an informal review or hearing, HAMC will conduct such 171 review or hearing in accordance with the policies described above. . If the hearing officer decides that the individual is not eligible, and there are no other eligible family members the HAMC will: Deny the applicant family Defer termination if the family is a participant and qualifies for deferral Terminate the participant if the family does not qualify for deferral If there are eligible members in the family, HAMC will prorate assistance pursuant to HUD regulations. All other complaints related to eligible citizen/immigrant status shall be handled as follows: If any family member fails to provide documentation or certification as required by the regulation, that member is treated as ineligible. If all family members fail to provide, the family will be denied or terminated for failure to provide. Participants whose termination is carried out after temporary deferral may not request a hearing since they had an opportunity for a hearing prior to the termination. Participants whose assistance is pro-rated (either based on their statement that some members are ineligible or due to failure to verify eligible immigration status for some members after exercising their appeal and hearing rights described above) are entitled to a hearing based on the right to a hearing regarding determinations of Tenant Rent and Total Tenant Payment. Families denied or terminated for fraud in connection with the non-citizens rule are entitled to a review or hearing in the same way as terminations for any other type of fraud. 17.10 Mitigating Circumstances for Individuals with Disabilities When applicants are denied placement on the waiting list, or HAMC is terminating assistance, the family will be informed that presence of a disability may be considered as a mitigating circumstance during the review or hearing process. Such circumstances shall be considered when making the final determination of the review or hearing. 172 Appendix Appendix E: F: Rental Grievance Assistance Procedures Demonstration (RAD) 173 Chapter 18 RENTAL ASSISTANCE DEMONSTRATION INTRODUCTION: The Rental Assistance Demonstration (RAD) implemented by HUD, allows projects funded under the public housing program to convert their assistance to long-term, project-based rental assistance contracts. Under this component of RAD, public housing agencies may choose between two forms of Section 8 Housing Assistance Payment (HAP) contracts: Project Based Rental Assistance (PBRA) or Project Based Vouchers (PBV). HAMC’s strategic plan is to convert its existing public housing stock to HAP contracts. The purpose of this chapter is to outline the HUD requirements and protections of the existing public housing tenants in a project being converted to PBRA or PBV and the existing applicants on the wait list. HAMC also recognizes that further policy updates may be forthcoming as the RAD program progresses and any such changes and/or clarifications will be implemented as needed. 18.A WAITLIST 1. In establishing the waiting list for the converted project, the PHA shall utilize the project-specific waiting list that existed at the time of conversion. 2. If a project – specific wait list does not exist for the project, HAMC will establish a wait list in accordance with 24 CFR 903.7(b)(2)(ii)-(iv) to ensure that applicants on the public housing area based wait list have been offered placement on the converted project’s initial waiting list. For the purpose of establishing the initial waiting list, HAMC has the discretion to determine the most appropriate means of informing applicants on the wait list given the number of applicants, PHA resources, and community characteristics of the proposed conversion under RAD. Such activities should be pursuant to the policies for waiting list management, including the obligation to affirmatively further fair housing. Existing public housing applicants who wish to be placed on the newly established project based wait list will be placed according to their original date and time of application. 3. After the initial project wait list has been established, the PHA shall administer its waiting list for the converted project in accordance with 24CFR 983.251(c). 18.B. ELIGIBILITY 1. No Rescreening of Tenants upon Conversion a. All in-place tenants at the time of conversion are eligible to remain in the unit and receive assistance according to the rent formula and/or the rent phase in formula specific to RAD. Current households will be grandfathered for conditions that occurred prior to conversion but will be subject to any ongoing eligibility requirements for actions that occur after conversion. b. If at conversion, households are over/under housed, these households must be transferred to appropriately sized units when an appropriate sized unit becomes available. 2. Right to Return a. Any resident that may need to be temporarily relocated to facilitate rehabilitation or construction will have a right to return to the development once rehabilitation or construction is completed. 3. Lease Renewal a. Under the PBV program, all leases must be renewed upon expiration, unless good cause exists. 18. C. PROVISIONS CONTINUING AFTER CONVERSION 1. PUBLIC HOUSING FAMILY SELF SUFFICIENCY (PH FSS) AND RESIDENT OPPORTUNITIES AND SELF SUFFICIENCY SERVICE COORDINATOR (ROSS-SC) PROGRAMS. a. Current Family Self-Sufficiency (FSS) participants will continue to be eligible for FSS once their housing is converted under RAD. Owner will be required to administer the FSS program in accordance with the participant’s contracts of participation and future guidance published by HUD. After conversion, residents not enrolled in FSS will not be eligible to participate in the program. However, under the PBV program, if the PHA has a Housing Choice Voucher FSS program, the FSS participant will be converted to HCV FSS. b. Current ROSS-SC grantees will be able finish out their current ROSS-SC grants once their housing is converted under RAD. However, once the proper is converted, it will no longer be eligible to be counted towards the unit count for future public housing ROSS-SC grants nor will its residents be eligible to be service by future public housing ROSS-SC grants. 2. EARNED INCOME DISALLOWANCE. a. Tenants who are employed and are currently receiving the Earned Income Disallowance (EID) exclusion at the time of conversion will continue to receive the EID exclusion after the conversion, in accordance with regulations at 24 CFR 960.255. After the conversion no other tenants will be eligible to receive the EID. If a tenant receiving the EID exclusion undergoes a break in employment, ceases to use the EID exclusion, or the EID exclusion expires in accordance with 24 CFR 960.255, the tenant will no longer receive the EID exclusion and owner will not be subject to the regulation. Furthermore, tenants whose EID ceases or expires after conversion shall not be subject to the rent phase –in provision, as described in Section 18.D. Instead, the rent will automatically be adjusted to the appropriate rent level based upon tenant income at that time. 174 3. EXISTING PETS a. Existing pets must be grandfathered into the property at RAD conversion. Owner will have the ability to restrict pets to households which were not part of the RAD conversion. 4. RESIDENT PARTICIPATION AND FUNDING a. Residents of the projects converting assistance to PBV or PBRA will have a right to establish and operate a resident organization as well as be eligible for resident participation funding. 18. D. RENT PHASE-IN PROCEDURE The method below explains the set percentage-based phase –in an owner must follow according to the phase-in period established. For purposes of this section “Calculated Multifamily Housing TTP” refers to the TTP calculated in accordance with regulations at 24 CFR 5.628 and the “most recently paid TTP” refers to the TTP recorded on the family’s most recent HUD form 50059. If the existing tenant rent portion increases by the greater of 10% or more than $25.00 per month purely as a result of the conversion in additional rent, the new rent will be phased in over the next 3 years. The PHA may extend the phase-in increase to 5 years. 1. Three Year Phase-In: a. Year 1: Any recertification (interim or annual) performed prior to the second annual re-certification after conversion – 33% of the difference between the most recently paid Total Tenant Payment (TTP) and the calculated Multifamily Housing TTP. b. Year 2: Year 2 Annual Recertification (AR) and any Interim Recertification (IR) prior to Year 3 – 66% of the difference between most recently paid TTP and calculated Multifamily Housing TTP. c. Year 3: Year 3 AR and all subsequent re-certifications – Full Multifamily Housing TTP. 18 E. RESIDENT PROCEDURAL RIGHTS HUD is incorporating additional termination notification requirements to comply with Section 6 of the Act for public housing projects that convert assistance under RAD. 1. RAD conversion to PBV and PBRA will require that PHAs to provide adequate written notice of termination of the lease which shall not be less than: a. A reasonable period of time, but not to exceed 30 days: • If the health or safety of other tenants, PHA employees, or person residing in the immediate vicinity of the premises is threatened; or • In the event of any drug related or violent criminal activity or any felony conviction; b. 14 days in the case of nonpayment of rent; and c. 30 days in any other case except that if a State or local law provides for a shorter period of time, such shorter period shall apply to PBV conversions. 2. Grievance Process for PBRA conversions In addition to program rules that require that tenants are given notice of covered actions under 24 CFR Part 245 (including increases in rent, conversions of a project from project paid utilities to tenant-paid utilities, or a reduction in tenant paid utility allowances), HUD is incorporating resident procedural rights to comply with the requirements of Section 6 of Act. RAD will require that: a. Residents be provided with notice of the specific grounds of the proposed owner adverse action, as well as their right to an informal hearing with the PHA (as owner); b. Residents will have an opportunity for an informal hearing with an impartial member of the PHA’s staff (as owner) within a reasonable period of time; c. Residents will have the opportunity to be represented by another person of their choice, to ask questions of witnesses, have others make statements at the hearing, and to examine any regulations and any evidence relied upon by the owner as the basis for the adverse actions. With reasonable notice to the PHA (as owner), prior to hearing and at the residents’ own cost, resident may copy any documents or records related to the proposed adverse action; and d. PHAs (as owner) provide the resident with a written decision within a reasonable period of time stating the grounds for the adverse action, and the evidence the PHA (as owner) relied on as the basis for the adverse action. e. The PHA (as owner) will be bound by decisions from these hearings, except if the” i. Hearing concerns a matter that exceeds the authority of the impartial party conducting the hearing. ii. Decision is contrary to HUD regulations or requirements, or otherwise contrary to federal, State, or local law. f. If the PHA (as owner) determines that it is not bound by a hearing decision, the PHA must promptly notify the resident of this determination, and of the reasons for the determination. 3. Grievance Process for PBV conversions HUD is incorporating additional rights to comply with the requirements of section 6 of the Act. For issues related to tenancy and termination of assistance, PBV program rules require the PHA to provide an opportunity for an informal hearing, as outlined in 24 CFR 982.555. RAD will waive 24 CFR 982.555(b) in part, which outlines when informal hearings are not required, and require that: a. In addition to reasons that require an opportunity for an informal hearing given in 24 CFR 982555(a)(1)(i-vi), an opportunity for an informal hearing must be given to residents for any dispute that a resident may have with respect to a 175 PHA (as owner) action in accordance with the individual’s lease or the contract administrator in accordance with RAD PBV requirements that adversely affect the resident’s rights, obligations, welfare, or status. • For any hearing required under 24 CFR 982.555 (a)(1)(i-vi), the contract administrator will perform the hearing, as is the current standard in the program. • For any addition hearings required under RAD, the PHA (as owner) will perform the hearing. b. An informal hearing will not be required for class grievances or disputes between residents, in involving the PH (as owner) or the contract administrator. This hearing requirement shall not apply to and is not intended as a forum for initiating or negotiating policy changes between a group or groups of residents and PHA (as owner) or contract administrator. c. The PHA (as owner) gives residents notice of their ability to request an informal hearing as outline in 24 CFR 982.555(c)(1) for informal hearings that will address circumstances that fall outside of the scope of 24 CFR 982.555(a)(1)(i-vi). d. The PHA (as owner) provides opportunity for an informal hearing before an eviction. e. The current PBV program rules require that hearing procedures must be outlined in the PHA’s Section 8 Administrative Plan. 18 F. MOBILITY Choice-mobility option allows a resident to move with a tenant-based voucher after the required tenancy in the covered project per 24 CFR 983.260 for conversions under the PBV and Section 1.7(C)(5) of the PIH notice 2012-32 (HA Rental Assistance Demonstration – Final Implementation. 176 Appendix G: Conversion Summary 177 COFFELT Identification of public 296 existing units at the Coffelt-Lamoreaux Apartment Homes (AMP 1) located at 1510 S. 19th Drive, Phoenix, AZ. housing units Conversion will result in 5 additional unsubsidized tax credit units for a total of 301 units. Legal description is as shown in Declaration of Trust dated June 11, 1954, recorded June 15, 1954, Docket 1372, Page 99, Maricopa County, Arizona. Identification and RAD CHAP received on August 12, 2013. Commitment to sell the project to Coffelt-Lamoreaux, LLC (new project obligation status of owner) through a seller carryback note to be approved by HUD as part of the FHA 221(d)(4) approval process. public housing funds Commitment to loan $1,602,000 in project reserves and modernization funds to the project on a permanent basis was approved by HUD as part of RAD approval process. $500,000 of this $1,602,000 has been loaned to the project for predevelopment costs from public housing reserves and cap funds under a HUD-approved predevelopment budget. The balance of $1,102,000 will be loaned in at closing. Evidence of HAMC and project partners have held stakeholder meetings with federal, state, county and local government consultation with public officials on a quarterly basis since 2013. City of Phoenix, AZ Mayor and City Council unanimously approved officials $650,000 in Community Development Block Grant funding for project. Arizona Department of Housing approved 4% Low Income Housing Tax Credit allocation and $1 Million State Housing Trust Fund award for project. U.S. Department of the Interior and the Arizona State Historic Preservation Office (SHPO) approved Coffelt’s nomination for placement on the National Register of Historic Places in December 2014. The Maricopa County Planning & Development Department has reviewed plans and specifications and are ready to issue building permits. The Maricopa County Industrial Development Authority (MCIDA) approved a bond inducement resolution for issuance of tax-exempt bonds for the project as well. Evidence of Two public meetings were held on-site in early 2013, leading up to our RAD application to HUD. Meeting consultation with agendas and minutes submitted to HUD along with RAD application. A series of resident meetings, design residents charrettes and resident engagement sessions related to the development of a Health Impact Assessment have been held throughout 2014 and 2015. One-on-one consultations with each resident in regards to relocation were also held in 2015. Description of PHA’s Coffelt will undergo a ‘gut rehabilitation’. Only the 4 exterior walls of all 150 residential buildings will remain. proposed future use of Each duplex will receive new roofing systems, new plumbing and electrical and mechanical systems, and all the developments interior finishes will be new (kitchens, baths, bedrooms and living areas). Small additions will be constructed off of the back of each unit. All units will have front-load washers and dryers. The community building/leasing office will undergo a ‘gut rehabilitation’ as well, with new amenities such as a multi-purpose room for before and after school programming, a computer lab, fitness center and theatre. All sidewalks and roadways will be improved, a new landscape plan will be installed, and all overhead power and phone lines will be replaced underground. Relocation Plan A complete relocation plan has been completed by our third party relocation consultant, Acquisition Sciences, Ltd. And has been uploaded to the RAD Resource Desk. MADISON Identification of public 143 units at three separate public housing sites (all of which comprise AMP 5) including 20 units at H.M. Watson housing units Homes, 415 S. 5th Street, Buckeye, AZ, 77 units at Madison Heights, 1102 N. 6th Place, Avondale, AZ and 46 units at Norton Circle, 304 S. 5th Avenue, Avondale, AZ. Subsidy from all three sites will be transferred to a newly- constructed, 143-unit development to be located at the current site of the Madison Heights public housing project. Identification and RAD CHAP received on November 25, 2013. RAD Conversion Commitment (RCC) received in June 2015. obligation status of Allocation of $386,500 in predevelopment funding from public housing reserves & cap funds approved by HUD public housing funds in 2014. These funds will be re-paid to HAMC at closing. Commitment to lease the land to Madison Heights I, LLC and Madison Heights II, LLC (new project owners) to be approved by HUD as part of the RAD closing process. No public housing funds will be contributed to the project on a permanent basis, other than the RAD rental assistance contract. Evidence of HAMC has met with federal, state, county and local government officials on a regular basis since 2013. The City consultation with public of Avondale, AZ Mayor and City Council unanimously approved a re-zoning of the site to accommodate the new officials plan. The Maricopa County Planning & Development Department has reviewed plans and specifications and are ready to issue building permits. The Arizona Department of Housing approved a 9% Low Income Housing Tax 178 Credit allocation and a $1,106,549 State Housing Trust Fund award for the project. The Maricopa County Human Services Department has awarded HOME funds in the amount of $520,000 to the project as well. Evidence of Two public meetings were held on-site in early 2013, leading up to our RAD application to HUD. Meeting consultation with agendas and minutes submitted to HUD along with RAD application. A series of resident meetings, design residents charrettes and resident engagement sessions related to the development of a Health Impact Assessment have been held throughout 2014 and 2015. One-on-one consultations with each resident in regards to relocation were also held in 2015. A HUD Part 58 Environmental Review and Request for Release of Funds was completed in April 2015 and an Authority to Use Grant Funds issued by HUD in June 2015. This process included public notices and public comment periods as well. The re-zoning of the site in early 2014 also included a series of public notices and public hearings. Description of PHA’s All 77 existing units at Madison Heights will be demolished after closing and completion of asbestos removal. A proposed future use of new 143-unit development will be constructed on the site, including 11 residential buildings (2-story garden the developments walk-up style) and one single-story 4,800 square foot leasing office/community center, which will include a multi-purpose room for the before and after school program, a computer lab, fitness center and theatre. The 20 units at H.M. Watson Homes and the 46 units at Norton Circle will remain as unrestricted, affordable housing developments until future redevelopment plans can be developed for those sites. Relocation Plan A complete relocation plan has been completed by our third party relocation consultant, Acquisition Sciences, Ltd. And has been uploaded to the RAD Resource Desk. 179 SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY HAMC’s Board of Commissioners approved application to HUD to convert its public housing portfolio under the RAD program to project‐based assistance on December 11, 2013. HAMC is amending its Public Housing Authority (PHA) Annual and 5‐Year Plan because HAMC’s application to convert 461 public housing units ‐‐ the balance of its portfolio ‐‐ was accepted and issued Commitments to Enter into Housing Assistance Payment Contracts on March 27, 2015. As a result, HAMC will be converting its Public Housing to Project Based Vouchers (PBV) and Project Based Rental Assistance (PRBA) under the guidelines of PIH Notice 2012‐32, REV‐1 and any successor Notices. This proposed amendment provides additional information as required by HUD concerning HAMC’s RAD portfolio conversion plans. It is HAMC’s intention to incorporate this proposed amendment in its entirety into the 2015‐2016 PHA Annual and 5‐Year Plan through an attachment in Appendix G entitled “Rental Assistance Demonstration Portfolio Conversion Summary.” Upon conversion to PBV and PBRA, HAMC will adopt the resident rights, participation, waiting list, and grievance procedures listed in Section 1.6C and 1.6 D of PIH Notice 2012‐32, REV‐1 as it pertains to PBV, and Section 1.7B and 1.7C of PIH Notice 2012‐32, REV‐1. These resident rights, participation, waiting list, and grievance procedures are found in Appendix F of the 2015‐2016 Annual and 5‐Year Plan. The RAD conversion complies with all applicable site selection and neighborhood reviews standards and that all appropriate procedures have been followed. HAMC is compliant with all fair housing and civil rights requirements. HAMC is not presently subject to a Voluntary Compliance Agreement, consent order, consent decree, final judicial ruling or administrative ruling that has any relation to or impact on the planned RAD conversion. RAD was designed by HUD to assist in addressing the capital needs of public housing by providing HAMC with access to private sources of capital to repair and preserve its affordable housing assets. Upon conversion, HAMC’s Capital Fund budget will be reduced by the pro rata share of Public Housing Developments converted as part of the Demonstration, and HAMC may also borrow funds to address capital needs. HAMC will also be contributing Operating Reserves in the estimated amount of $3,300,000 and Capital Funds in the estimated amount of $1,000,000 towards the conversion. Current and future Capital Fund Program Grants Budgets will be reduced as a result of RAD conversions. Full conversion of the HAMC portfolio to PBV or PBRA will eliminate the Capital Fund Program. The Physical Needs Assessment for each development will address the known and future needs at each location. HAMC currently has debt under an Energy Performance Contract (EPC) and will be working with PNC Bank to address outstanding debt issues which may result in additional reductions of capital or operating funds. SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Following is specific information related to the Public Housing Developments selected for RAD: Development # 1 Name of PH Development: Conversion Type: EPC: Yes Transfer of Assistance (if yes, put Clare Feldstadt Homes PBRA the location if known and # units AMP 2 transferring): Yes 50 units Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of 56 Family Units Family Units public housing units in PHA, multiplied by total number of units in project): Based on 2015 Capital fund allocation $ 66,791 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 12 12 0 2 Bedroom 20 20 0 3 Bedroom 24 24 0 4 Bedroom n/a n/a n/a 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of Existing Mesa wait list will be transferred. Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received on March 27, 2015. The plan is to used public housing reserves and capital funds for status of public housing funds pre‐development cost. Evidence of consultation with Meeting November, 2013‐ Two Resident Meetings held residents Description of PHA’s proposed All 56 units will be transferred to a newly developed site in the east valley. The financing is anticipated to future use of the development be low income housing tax credits. Relocation Plan A relocation plan will be developed SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 2 Name of PH Development: Conversion Type: EPC: Yes Transfer of Assistance (if yes, put Father Fidelis Kuban PBRA the location if known and # units AMP 2 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund 48 grant, divided by total number of Family Family public housing units in PHA, multiplied by total number of units in project): $ 64,119 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 11 11 0 2 Bedroom 15 15 0 3 Bedroom 16 16 0 4 Bedroom 6 6 0 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing reserves and cap funds will be used for pre‐ status of public housing funds development and gap financing. Evidence of consultation with Meeting November, 2013‐ two resident meetings held in November. residents Description of PHA’s proposed Plan is to rehab the project based on the third party needs assessment. Exterior and interior paint, future use of the development replace water heaters, entry doors, patio doors, flooring, interior lighting and fans, new appliances and repair/replace tub surrounds. Relocation Plan N/A SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 3 Name of PH Development: Conversion Type: EPC: Yes Transfer of Assistance (if yes, put John Hollar & Baden Homes PBRA the location if known and # units AMP 5 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of public housing units in PHA, 45 Family Family multiplied by total number of units in project): $ 57,683 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 7 7 0 2 Bedroom 15 15 0 3 Bedroom 18 18 0 4 Bedroom 5 5 0 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received on March 27, 2015. Public housing reserves and capital funds will be used for pre‐ status of public housing funds development and gap financing Evidence of consultation with Meeting December, 2013‐ two resident meetings held in December. residents Description of PHA’s proposed Projects will be rehabbed to specifications identified in the third party needs assessment. future use of the development Relocation Plan NA SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 4 Name of PH Development: Conversion Type: EPC: Yes Transfer of Assistance (if yes, put CASA BONITA PBRA the location if known and # units AMP 8 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of public housing units in PHA, 80 Family Family multiplied by total number of units in project): $ 101,046 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 6 6 0 2 Bedroom 40 42 2 Converting community space back to 2 – 2bedroom units 3 Bedroom 22 22 0 4 Bedroom 10 10 0 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing reserves and cap funds will be used for pre‐ status of public housing funds development cost and gap financing. Evidence of consultation with Meeting November 2013‐ two meetings held residents Description of PHA’s proposed The plan is to rehab the project using specifications in the third party needs report. future use of the development Relocation Plan NA SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 5 Name of PH Development: Conversion Type: EPC: Transfer of Assistance (if yes, put Casa Bonita (Paradise Homes) PBRA the location if known and # units AMP 8 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of public housing units in PHA, 24 Family Family multiplied by total number of units in project): $ 30,314 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 18 18 0 2 Bedroom 6 6 0 3 Bedroom n/a n/a n/a 4 Bedroom n/a n/a n/a 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing reserves and capital funds will be used for pre‐ status of public housing funds development and gap financing. Evidence of consultation with Meeting November 2013‐ two meetings held in November. residents Description of PHA’s proposed The plan is to rehab the project to third party needs assessment. future use of the development Relocation Plan No relocation anticipated SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 6 Name of PH Development: Conversion Type: EPC: yes Transfer of Assistance (if yes, put John Hammond Homes PBRA the location if known and # units AMP 9 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of public housing units in PHA, 42 Family Family multiplied by total number of units in project): $ 53,331 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom n/a n/a n/a 2 Bedroom 25 25 0 3 Bedroom 13 13 0 4 Bedroom 4 4 0 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Publix housing reserves and capital funds will be used for pre‐ status of public housing funds development and financing gap. Evidence of consultation with Meeting November 2013‐two meetings held in November residents Description of PHA’s proposed The project will be rehabbed to specifications identified in the third party needs assessment. future use of the development Relocation Plan No relocation anticipated SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 7 Name of PH Development: Conversion Type: EPC: Yes Transfer of Assistance (if yes, put Parkview Estates PBRA the location if known and # units AMP 15 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of public housing units in PHA, 45 Elderly, HC, Disabled Elderly, HC, Disabled multiplied by total number of units in project): $ 55,404 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 45 45 0 2 Bedroom n/a n/a n/a 3 Bedroom n/a n/a n/a 4 Bedroom n/a n/a n/a 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing reserves and capital funds will be utilized for pre‐ status of public housing funds development and gap financing. Evidence of consultation with Meeting November 2013‐ two meetings held in November residents Description of PHA’s proposed The project will be rehabbed to specifications identified in the third party needs assessment. future use of the development Relocation Plan No relocation anticipated SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 8 Name of PH Development: Conversion Type: EPC: Yes Transfer of Assistance (if yes, put Scattered Sites PBRA the location if known and # units AMP 7 – 45 units transferring): AMP 15 – 25 units Yes, 70 units Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of public housing units in PHA, 70 Single Family Homes Family Family multiplied by total number of units in project): $ 70,707 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom n/a n/a n/a 2 Bedroom 1 1 0 3 Bedroom 57 57 0 4 Bedroom 12 12 0 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of Wait list will be transferred with the project Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing and capital funds will be used for pre‐development status of public housing funds and gap financing Evidence of consultation with Resident Meetings in November & December 2013 residents Description of PHA’s proposed The plan is to create an opportunity for homeownership with these 70 single family homes in partnership future use of the development with a non‐profit counseling/homeownership group. A new site in the west valley will be acquired to transfer the rental subsidies through the RAD conversion. Relocation Plan A relocation plan will be developed SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development # 9 Name of PH Development: Conversion Type: EPC: NO Transfer of Assistance (if yes, put Rose Terrace Apts. PBV the location if known and # units AMP 13 transferring): NO Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of 40 20 Senior, 20 Family 20 Senior, 20 Family public housing units in PHA, multiplied by total number of units in project): $ 30,049 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom 20 20 0 2 Bedroom 7 7 0 3 Bedroom 9 9 0 4 Bedroom 3 3 0 5 Bedroom 1 1 0 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing reserves and capital funds will be used to rehab the status of public housing funds project to specifications identified in the needs assessment. Evidence of consultation with Two meetings held in November 2013, and again on January 29, 2016 residents Description of PHA’s proposed Existing PH units are being converted to Project Based Vouchers. The third party needs assessment future use of the development identified rehab scope to include repairing parking lot/driveways, exterior painting, roof repairs, replacing water heaters, exterior/exterior lighting, bathroom fixtures, vanities and tub surrounds. Relocation Plan No residents will need to be relocated with this conversion. SIGNIFICANT AMENDMENT: RENTAL ASSISTANCE DEMONSTRATION PORTFOLIO CONVERSION SUMMARY Development #10 Name of PH Development: Conversion Type: EPC: NO Transfer of Assistance (if yes, put Maricopa Revitalization PBV the location if known and # units Partnership, LLC transferring): NO AMP 14 Total Units: Pre‐RAD Unit Type (Family, Post‐RAD Unit Type if different Capital Fund allocation of Senior, etc.): (i.e. Family, Senior, etc.) Development (annual Cap Fund grant, divided by total number of 13 Family Family public housing units in PHA, multiplied by total number of units in project): $10 ,886 Bedroom Type Number of Units Pre‐ Number of Units Post‐ Change in Number of Units and Conversion Conversion Why (De Minimis Reduction, Transfer of Assistance, Unit Reconfigurations, etc.): Studio/Efficiency n/a n/a n/a 1 Bedroom n/a n/a n/a 2 Bedroom 5 5 0 3 Bedroom 8 8 0 4 Bedroom n/a n/a n/a 5 Bedroom n/a n/a n/a 6 Bedroom n/a n/a n/a If performing a Transfer of n/a Assistance, explain how transferring waiting list Identification and obligation RAD CHAP received March 27, 2015. Public housing reserves and capital funds will be used to rehab the status of public housing funds project to specifications identified in the needs assessment. Evidence of consultation with Two meetings held in November 2013, and again on January 28, 2016 residents Description of PHA’s proposed Existing PH units are being converted to Project Based Vouchers. The third party needs assessment future use of the development identified a rehab scope to include repairing driveways, duct and insulation sealing, HVAC replacements, kitchen countertops, refrigerators, light fixtures and fire extinguishers. Relocation Plan No residents will need to be relocated with this conversion.