HomeMy WebLinkAboutMINUTES - 01132015 - HA C.03RECOMMENDATIONS
ACCEPT the financial and program compliance audit report for the period April 1, 2013 through March 31, 2014,
prepared by Harn & Dolan CPA’s, Walnut Creek, California.
BACKGROUND
The U. S. Department of Housing & Urban Development requires every housing authority to have an annual
independent audit conducted of its financial statements and business activities as well as of compliance with program
requirements for the public housing, Housing Choice Voucher and Shelter-Plus Care programs. HACCC contracted
with Harn & Dolan to prepare the audit report for the fiscal year ending March 31, 2014.
Harn & Dolan’s audit identified no findings and no material weaknesses in either the financial or program
compliance portions of the audit.
The complete audit and the management letter are attached.
FISCAL IMPACT
Funding was provided for the audit contract in the Housing Authority of the County of Contra Costa’s (HACCC)
Fiscal Year 2014/2015 Consolidated Operating Budget.
Action of Board On: 01/13/2015 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF COMMISSIONERS
AYE:John Gioia, Commissioner
Candace Andersen,
Commissioner
Mary N. Piepho,
Commissioner
Karen Mitchoff,
Commissioner
Federal D. Glover,
Commissioner
Aqueela Bowie,
Commissioner
ABSENT:Fay Nathaniel,
Commissioner
Contact: 925-957-8028
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: January 13, 2015
Joseph Villarreal, Executive Director
By: June McHuen, Deputy
cc:
C.3
To:Contra Costa County Housing Authority Board of Commissioners
From:Joseph Villarreal, Housing Authority
Date:January 13, 2015
Contra
Costa
County
Subject:Financial and Program Audit for the Fiscal Year Ending March 31, 2014
CONSEQUENCE OF NEGATIVE ACTION
Should the Board of Commissioners elect not to accept the financial audit report as performed by the certified
public accountancy firm of Harn & Dolan, it would become necessary to expend additional funds to either redo
the financial audit report or contract with another certified public accountancy firm to conduct an audit of
HACCC’s finances and programs.
CLERK'S ADDENDUM
ATTACHMENTS
Audit Management Letter
2014 Annual Audit
HOUSING AUTHORITY
OF THE COUNTY OF CONTRA COSTA
(A Component Unit of the County of Contra Costa)
BASIC FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2014
(Including Auditors' Report Thereon)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
TABLE OF CONTENTS
Page
Independent Auditors’ Report 1
Managements Discussion and Analysis 4
Financial Statements:
Statement of Net Position - Proprietary Funds 12
Statement of Revenues, Expenses, and Changes in Fund
Net Position - Proprietary Funds 14
Statement of Cash Flows - Proprietary Funds 15
Notes to the Basic Financial Statements 17
Required Supplementary Information 52
Supplementary Information:
Schedule of Expenditures of Federal Awards 54
Notes to the Schedule of Expenditures of Federal Awards 55
Financial Data Schedule (CA011) 56
Schedule of Relevant Statistics 64
Statement of Completed Capital Fund Program Project 65
Independent Auditors’ Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards 66
Independent Auditors’ Report on Compliance with Requirements
Applicable to Each Major Program and Internal Control over
Compliance in Accordance with OMB Circular A-133 68
Status of Prior Audit Findings 70
Schedule of Findings and Questioned Costs 71
Harn & Dolan
Certified Public Accountants
2423 Stirrup Court
Walnut Creek, California 94596-6526
(925) 280-1693 Fax (925) 938-4829
INDEPENDENT AUDITORS’ REPORT
To the Board of Commissioners
Housing Authority of the
County of Contra Costa
Martinez, California
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activities and the major fund
of the Housing Authority of the County of Contra Costa, component unit of the County of Contra Costa,
California (the Authority), as of and for the year ended March 31, 2014, and the related notes to the financial
statements, which collectively comprise the Authoritys basic financial statements as listed in the table of
contents. We did not audit the financial statements of the aggregate discretely presented component units
reported in the financial statements.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatements, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit
the financial statements of HACCC Casa Del Rio, Inc, a California Nonprofit Public Benefit Corporation
and CDR Senior Housing Associates, a California Limited Partnership, which represent 14.9%, -2.0% and
0.5%, respectively, of the primary governments assets, net position, and revenue. We did not audit the
financial statements of DeAnza Housing Corporation, a California Nonprofit Public Benefit Corporation
and DeAnza Gardens L.P. a California Limited Partnership, which are combined and reported as discretely
presented component units titled Component Units in the fund financial statements. Those financial
statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar
as it relates to the amounts included for the discretely presented component units and blended component
units - Casa Del Rio Housing is based solely on the reports 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 of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors judgment, including the assessment
of the risks of material misstatements of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the Authoritys 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 Authoritys
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Opinions
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above
present fairly, in all material respects, the respective financial position of the business-type activities, the
aggregate discretely presented component units, and the major fund of the Authority, as of March 31, 2014,
and the respective changes in financial position, and, where applicable, cash flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the managements
discussion and analysis on pages 4 through 11 and schedule of funding progress for OPEB on page 52 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 and the other auditors 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 managements 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 opinions on the financial statements that collectively
comprise the Housing Authority of the County of Contra Costa, Californias basic financial statements. The
schedule of relevant statistics is presented for purposes of additional analysis and are not a required part of
the financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for
purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations , and is also not a required part of the
basic financial statements. The accompanying Financial Data Schedules (CA 011) shown on pages 56-63
are presented for purposes of additional analysis as required by Uniform Financial Reporting Standards
issued by the U.S. Department of Housing and Urban Development and are not a required part of the basic
financial statements. Finally, the accompanying Schedule of Completed Capital Fund Program Project is
presented for the purpose of additional analysis as required by the U.S. Department of Housing and Urban
Development and is not a required part of the basic financial statements.
The Schedule of Expenditures of Federal Awards, Financial Data Schedules, and Schedule of Completed
Capital Fund Program Project are the responsibility of management and were derived from and relate
2
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
The management of the Housing Authority of the County of Contra Costa (the Authority) would like to provide the
readers of the Authoritys financial statements this narrative overview and analysis of the financial activities of the
Authority for the fiscal year ended March 31, 2014.
The Management Discussion and Analysis (MD&A) is an element of the reporting model adopted by the
Governmental Accounting Standards Board (GASB) in their Statement No. 34 Basic Financial Statements-and
Managements Discussion and Analysis-for State and Local Governments issued in June 1999. Certain comparative
information between the current year and the prior year is required to be presented in the MD&A.
FINANCIAL HIGHLIGHTS
Net position decreased by $5,010,175 (or 22.1%) during 2014 (see Table 1) as a result of current year
activities.
Unrestricted net position (see Table 2) decreased $1.1 million (or 14.9%) as a result of current year
activities.
Total revenue decreased by $8.6 million (or 8.5%) as a result of current year activities.
Total expenditures decreased $1.6 million (or 1.6%) as a result of current year activities.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as introduction to the Authoritys basic financial statements. The
Authoritys basic financial statements are comprised of three parts as follows: (1) Fund Financial Statements,
(2) Notes to the Basic Financial Statements, and (3) Supplementary Information.
FUND FINANCIAL STATEMENTS
The Fund Financial Statements presentation is similar to the traditional government financial statements. The
statements are the Statement of Net Position, the Statement of Revenue, Expenses, and Changes in Fund Net
Position, and the Statement of Cash Flows. The focus is now on Major Funds, rather than fund types. The
Authoritys funds consist exclusively of Enterprise Funds. Enterprise funds utilize the full accrual basis of
accounting. The Enterprise method of accounting is similar to accounting utilized by the private sector accounting.
Many of the funds administered by the Authority are provided by the Department of Housing and Urban
Development. Others are segregated to enhance accountability and control. GASBs 34 and 37 require individual
enterprise funds to be reported as major funds if total assets, liabilities, revenue, or expenses of that individual fund
exceed 10% or corresponding element total of the Authority as a whole. In the past, the Authority reported four
major funds and an aggregate column for non-major funds. Beginning April 1, 2006, the Authority reported all of
its activities in one major fund titled Housing. The Authoritys mission is to provide affordable housing within
the County of Contra Costa, regardless of grant or program. Therefore, we believe that reporting all activity in one
fund is consistent with this mission and simpler for the readers of the Authoritys report.
The Authoritys activity includes:
Public Housing Under the Public Housing Program, (also titled as Low Rent-Aided Housing) the Authority rents
units that it owns to very low & low-income households. The Public Housing Program is operated under an Annual
Contributions Contract (ACC) with HUD. The ACC provides Operating Subsidy and Capital improvement Grant
4
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
funding to enable the PHA to provide the housing at a rent that is based upon 30% of household income or at a flat
rate below market rate.
Public Housing Capital Fund Grant - HUD provides grants for the modernization of the Public Housing Program
units. The modernization is accounted for by each grant, which is merged as a part of the Public Housing Program
totals.
Housing Choice Voucher Program Under the Housing Choice Voucher Program, (hereunder titled as Voucher
Program) the Authority administers the program under an Annual Contributions Contract (ACC) with HUD. The
ACC provides funding to the Authority to provide tenant based rental assistance to program participants. The rental
assistance payment is structured so as the rental payment that the participant is obligated to pay is 30% to 40% of
household income. This is a major federal program.
Casa Del Rio, Associates - Casa Del Rio, Senior Housing Associates (CDR) was formed as a limited partnership
on April 12, 1994, for the purpose of developing, owning and operating an 82-unit affordable housing rental
complex (the project) located in Antioch, California. The Project qualifies for low-income housing tax credits
under Section 42 of the Internal Revenue Service Code. Such projects are regulated under terms of a Regulatory
Agreement, including rent charges, operating methods and other matters. This limited partnership is considered
to be a blended component unit of the Authority. The most recent audits were for the fiscal year ended December
31, 2013. These reports can be obtained from the Authority using the information on page 11.
Casa Del Rio, Incorporated - The general partner of the Casa Del Rio Partnership is HACCC Casa Del Rio, Inc.,
a California public benefit corporation. The officers and Board members of HACCC Casa Del Rio, Inc. are
employees of the Authority, which was the developer of the Project, and is consider a blended component unit of
the Housing Authority. These component units receive separate audit reports performed on a calendar year basis.
The most recent audits were for the fiscal year ended December 31, 2013. These reports can be obtained from the
Authority using the information on page 11.
Shelter Plus Care Program is designed to provide rental assistance and supportive services to homeless and
disabled individuals and their families. It is cooperatively administered by the County Health Services Department
and the Housing Authority of Contra Costa County, and has the capacity to serve roughly 200 households.
Participants receive rental assistance and supportive services funded by the U.S. Department of Housing and Urban
Development.
CDBG Rental Rehabilitation Program (RRP) - Under the RRP, the Authority executes annual funding contract with
various governmental entities to fund the operations of a program that assists rental property owners with
rehabilitation of housing units to help assure a supply of affordable rental apartments and homes for its Section
8/Voucher users and other low-income households. Technical assistance in determining repairs is provided by
Authority staff and below-market-rate loans are made to cover part of rehabilitation costs. Program administrative
costs are shared by the funding providers and the Authority.
Rental Rehabilitation Program (RRP) - Under the RRP, the Authority operates a program that assists rental property
owners with rehabilitation of housing units to help assure a supply of affordable rental apartments and homes for
its Section 8/Voucher users and other low-income households. Technical assistance in determining repairs is
5
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
provided by Authority staff and below-market-rate loans are made to cover part of rehabilitation costs. Funds from
this program are to supplement the CDBG RRP for loans or administration.
Management Fund & County Programs This program is often referred to as the State and Local Fund. The fund
represents non-HUD resources developed from a variety of activities, including developer fees, management fees,
program cost reimbursement, and other local and non local activities.
Central Office Cost Center - The COCC fund earns revenue from fees and services provided to various federal
programs. The funds earned are considered non-HUD funds and go to cover the overhead and support services
provided to the various federal programs.
Discretely Presented Component Unit:
DeAnza Gardens L.P. (DeAnza) DeAnza was formed as a limited partnership on December 10, 2001 for the
purpose of acquisition, ownership, maintenance, and operation of 180 multi-family affordable rental housing
complex located in Contra Costa County.
The project was built on land owned by and leased from the Housing Authority of the County of Contra Costa (the
Authority). Under the terms of the lease, title to the improvements reverts to the lesser at the end of the 75-year
lease. The Project qualifies for low-income housing tax credits under Section 42 of the Internal Revenue Service
Code. Such projects are regulated under terms of a Regulatory Agreement, including rent charges, operating
methods and other matters.
The general partner of DeAnza Gardens L.P. is DeAnza Corporation Inc., a California public benefit corporation.
The officers and Board members of the corporation are separate and apart from the Housing Authority. The only
Board member position in the corporation that represents the Housing Authority is the Executive Director, who
serves as one of the five board positions of the corporation. The Housing Authority has been designated as the
managing general partner.
The DeAnza entities, under HUD REACs direction, are to be considered by the Authority as other organizations
for which the nature and significance of their relationship with the Authority are such that exclusion would cause
the Authoritys financial statements to be misleading or incomplete. As such, the Authority considers these two
entities to be discretely presented component units. These component units receive separate audit reports performed
on a calendar year basis. The most recent audits were for the calender year ended December 31, 2013. These
reports can be obtained from the Authority using the information on page 11.
Also included in the Basic Financial statements are:
Notes to the Financial Statements. The notes provide additional information that is essential to a full
understanding of the data provided in the fund financial statements.
Supplementary Information. Certain information is required to be included in this report by various federal
agencies. This information is included after the notes to the financial statements under the title supplementary
information.
6
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
TABLE 1
STATEMENT OF NET POSITION
The following table reflects the condensed Statement of Net Position, for the primary government, compared to
prior year. The Authority is engaged only in Business-Type Activities.
Increase
March 31, 2014 March 31, 2013 (Decrease) %
Current assets $ 7,464,493 $ 9,286,236 (1,821,743)19.62%
Restricted assets 3,838,856 6,178,580 (2,339,724)37.87%
Capital assets, net of depreciation 15,684,971 17,338,090 (1,653,119)9.53%
Other noncurrent assets 3,764,808 4,866,528 (1,101,720)22.64%
Total assets $ 30,753,128 $ 37,669,434 $ (6,916,306)18.36%
Current liabilities 1,783,835 2,490,732 (706,897)28.38%
Payable from restricted assets 686,256 595,252 91,004 15.29%
Long term liabilities 10,679,036 11,969,274 (1,290,238)10.78%
Total liabilities 13,149,127 15,055,258 (1,906,131)12.66%
Net position:
Net investment in capital assets 8,248,266 9,739,430 (1,491,164)15.31%
Restricted 3,152,600 5,583,328 (2,430,728)43.54%
Unrestricted 6,203,135 7,291,418 (1,088,283)14.93%
Total net position 17,604,001 22,614,176 (5,010,175)22.16%
Total liabilities and net position $ 30,753,128 $ 37,669,434 $ (6,916,306)18.36%
Major Factors Affecting the Statement of Net Position
The major factor for the reduction to Net Assets was a direct result of reduced Federal funding. A change
by the Department of Housing & Urban Development (HUD) to no longer allow Housing Authorities to
retain excess program funds led to a $2.4 million reduction in restricted reserves. In addition, due to a
Federal sequester of funding unrestricted reserves were used to cover a short falls of over $1.0 million.
The decrease in net investment in capital assets is the result of depreciation.
7
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
Table 2 below presents details on the change in Unrestricted Net Position.
TABLE 2
CHANGE OF UNRESTRICTED NET POSITION
2014 2013
Net gain (loss) before contributions $ (5,765,103) $ 25,148
Adjustments:
Prior period adjustment - (190,494)
Depreciation which does not effect unrestricted net position 2,419,744 2,763,153
Loss on disposal of equipment 6,427 -
Expenses paid from restricted accounts 104,055 33,639
Interest expensed, but not paid 78,787 78,787
Interest earned on restricted accounts (2,148) (24,063)
Restricted income (64,162) (50,367)
Accumulation of excess HAP funds - Housing Choice Voucher - (1,150,659)
Use of excess HAP funding - Housing Choice Voucher 2,474,946 -
Net gain (loss) in unrestricted net position due to operations (747,454) 1,485,144
Other receipt (use) of unrestricted net position
Capital additions not covered by capital grant or restricted reserves (18,125) (326,338)
Debt retired (240,741) (225,526)
Casa Del Rio - funding of restricted reserves for current year (81,963) (39,742)
Changes to unrestricted net position (1,088,283) 893,538
Beginning unrestricted net position balance 7,291,418 6,397,880
Ending unrestricted net position balance $ 6,203,135 $ 7,291,418
While the result of operations is a significant measure of the Authoritys activities, the analysis of the changes in
unrestricted net position provides a clearer change in financial well-being.
8
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
TABLE 3
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
The following schedule compares the revenues and expenses for the current and previous fiscal year. The Authority
is engaged only in Business-Type Activities.
Actual Budget Actual Budget
March 31, 2014 March 31, 2014 March 31, 2013 March 31, 2013
Operating revenue:
Rental and other $ 7,909,519 $ 5,340,376 $ 7,866,117 $ 5,431,692
Non-operating revenue:
Federal grants and subsidies 84,201,426 85,770,274 91,299,480 92,055,681
Capital contributions 754,928 1,608,961 1,978,955 804,481
Sale (disposal) of real property (6,427) - 250,000 -
Other revenue 133,160 3,474,600 238,024 3,962,640
Total revenues 92,992,606 96,194,211 101,632,576 102,254,494
Operating expenses:
Administration 11,300,777 12,189,942 10,820,546 11,864,484
Tenant services 411,126 353,467 344,162 343,516
Utilities 1,774,442 1,825,983 1,661,972 1,990,120
Maintenance 4,002,231 4,135,260 4,180,334 4,578,091
General 1,401,472 1,566,021 1,839,941 1,382,229
Housing assistance payments 76,426,454 80,143,300 77,723,394 79,372,867
Depreciation 2,419,744 1,808,985 2,763,153 2,690,198
Non-operating expenses:
Debt-service interest 263,395 225,526 291,831 956,075
Loan amortization 3,140 3,142 3,140 3,142
Total expenses 98,002,781 102,251,626 99,628,473 103,180,722
Changes in net position (5,010,175) (6,057,415) 2,004,103 (926,228)
Net position, beginning of the year 22,614,176 20,727,177 20,727,177 20,504,478
Prior period adjustment - - (117,104) -
Net position, end of the year $ 17,604,001 $ 14,669,762 $ 22,614,176 $ 19,578,250
Major Factors Affecting the Statement of Revenue, Expenses and Changes in Net Position
The major factor affecting change in revenue as reflected in Table 3 above, was a decrease in HUD funding which
affected Federal Grants and Subsidies and Capital Contributions of $7.0 million. The major factor affecting change
in expenditures as reflected above in the Housing Assistance Payments was a reduction of $1.3 million.
9
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
CAPITAL ASSETS ANDDEBT ADMINISTRATION
Capital Assets
As of year-end, the Authority had $15.68 million invested, see also Note 6 to the basic financial
statements.
TABLE 4
CAPITAL ASSETS
March 31, 2014 March 31, 2013 Change
Land $ 1,825,993 $ 1,825,993 $ -
Buildings 96,430,183 95,666,776 763,407
Equipment 2,436,074 2,420,420 15,654
Accumulated Depreciation (85,805,381) (83,391,660) (2,413,721)
Construction In Progress 798,102 816,561 (18,459)
Total $ 15,684,971 $ 17,338,090 $ (1,653,119)
The following reconciliation summarizes the change in Capital Assets.
TABLE 5
CHANGE IN CAPITAL ASSETS
2014 2013
Capital assets - beginning of year $ 17,338,090 $ 17,742,256
Prior period adjustment:
Change of fiscal year end reported for Casa Del Rio (blended CU) - 53,692
Additions:
Capital Fund Grant 754,928 1,978,955
Improvements to dwelling units (2,100) 105,007
Equipment - computer upgrades 20,224 221,333
Deletions at a loss (6,427) -
Depreciation (2,419,744) (2,763,153)
Capital assets - end of year $ 15,684,971 $ 17,338,090
Notes Payable Outstanding
As of year-end, the Authority had $5,869,176 of notes payable outstanding, see Note 7 to the basic
financial statements.
10
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
MANAGEMENT DISCUSSION AND ANALYSIS
MARCH 31, 2014
(Continued)
ECONOMIC FACTORS
The Authority is primarily dependent upon HUD for funding operations; therefore, the Authority is
affected more by the federal budget than by state or local economic conditions. The Authoritys budgets
and subsidy funding requests are approved by HUD.
It should be noted that HUD has instituted a major change in the funding process for the Housing Choice
Voucher Program. This change will have a major impact on the restricted reserves reported by the
Authority. HUD will no longer be advancing HAP funds based on the Annual Contributions Contract, but
will be advancing funds based on the need of the Authority from a quarterly review process. This change
will greatly reduce restricted reserves held by the Authority and impact the cash flow of the program.
FINANCIAL CONTACT
The individual to be contacted regarding this report, and the reports of the Authoritys component units,
is John Hunter, Director of Finance of the Housing Authority of the County of Contra Costa, at (925) 957-
8014. Specific requests may be submitted to John Hunter, Director of Finance, Housing Authority of the
County of Contra Costa, P.O. Box 2759, 3133 Estudillo Street, Martinez, CA 94553.
11
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
MARCH 31, 2014
Primary Component
Government Units
Housing
ASSETS
Current assets
Cash and investments (Note 2 and 15) $ 6,836,304 $ 41,127
Due from other funds (Note 4) 84,744 -
Due from other agencies 167,970 -
Due from related parties - DeAnza (Note 15) 19,596 -
Tenant accounts receivable 136,320 24,006
Allowance for doubtful accounts (53,760) (6,160)
Miscellaneous accounts receivable 10,139 30,007
Allowance for doubtful accounts - (7,131)
Interest receivable 19,138 978
Notes receivable - short term (Note 5) 53,083 -
Allowance for doubtful accounts (Note 5) (49,636) -
Prepaid expenses 240,595 22,146
Total current assets 7,464,493 104,973
Restricted assets:
Restricted cash (Note 2 and 3 and 15) 3,838,856 1,465,133
Capital assets (Note 6 and 15):
Land 1,825,993 1,150,712
On site improvements - 4,028,709
Buildings 96,430,183 29,655,110
Furniture and equipment 2,436,074 488,321
Construction in progress 798,102 -
Accumulated depreciation (85,805,381) (9,640,774)
Total capital assets 15,684,971 25,682,078
Other noncurrent assets:
Long-term notes receivable (Note 5) 617,381 -
Long-term notes receivable - DeAnza (Note 5 and 15) 1,000,000 -
Interest receivable on long-term notes (Note 5) 103,951 -
Due from related parties - DeAnza (Note 15) 1,687,522 -
Due from other funds (Note 1.E.) 290,799
Other long-term assets 30,905 -
Loan costs (net of amortization of $59,893 and $271,908) 34,250 119,553
Total other noncurrent assets 3,764,808 119,553
Total assets $ 30,753,128 $ 27,371,737
12
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
MARCH 31, 2014
(Continued)
Primary Component
Government Units
Housing
LIABILITIES
Current liabilities:
Accounts payable $ 511,726 $ 51,710
Due to other funds 84,744 -
Due to related parties - Authority (Note 15) - 18,338
Due to other agencies 171,104 -
Accrued salaries and related costs 216,302 -
Accrued interest (Note 15) - 49,251
Unearned revenue (Note 9) 239,676 6,565
Current portion of compensated absences (Note 1.H.) 307,451 -
Current portion of long-term debt (Note 7 and 15) 252,832 189,982
Total current liabilities 1,783,835 315,846
Payable from restricted assets:
Tenant security deposits 356,613 156,666
Family self sufficiency escrows 300,023 -
Due to other agencies 29,620 -
Total payable from restricted assets 686,256 156,666
Other noncurrent liabilities:
Long-term portion of compensated absences (Note 1.H.) 60,161 -
Long-term debt (Note 7 and 15) 5,801,344 8,764,809
Long-term debt - Authority (Note 15) - 1,000,000
Due to other funds (Note 1.E.) 290,799 -
Other noncurrent liabilities (Note 10 and 15) 4,526,732 26,503
Due to related parties - Authority (Note15) -1,654,231
Total noncurrent liabilities 10,679,036 11,445,543
Total liabilities 13,149,127 11,918,055
NET POSITION (Note 11)
Net investment in capital assets 8,248,266 16,678,036
Restricted net position 3,152,600 1,442,936
Unrestricted net position 6,203,135 (2,667,290)
Total net position 17,604,001 15,453,682
Total liabilities and net position $ 30,753,128 $ 27,371,737
The accompanying notes are an integral part of this statement
13
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED MARCH 31, 2014
Primary Component
Government Units
Housing
Operating revenue:
Rents and other tenant revenue $ 3,732,091 $ 2,019,578
Other 4,177,428 -
Total operating revenue 7,909,519 2,019,578
Operating expenses:
Administration 11,300,777 403,759
Tenant services 411,126 -
Utilities 1,774,442 243,381
Maintenance 4,002,231 427,703
General 1,401,472 89,549
Housing assistance payments 76,426,454 -
Depreciation (Note 6 and 15) 2,419,744 1,011,197
Total operating expenses 97,736,246 2,175,589
Operating income (loss) (89,826,727) (156,011)
Nonoperating revenue (expenses):
Grants 84,201,426 -
Restricted interest 2,080 (3,577)
Unrestricted interest (19,033) -
Mortgage interest 35,153 -
Interest on notes receivable
with related party (Note 5 and 15) 30,000 (30,000)
Related party fees (Note 15) 84,960 (84,960)
Amortization - loan fees (3,140) (30,064)
Loss on disposal of real property (Note 6) (6,427) -
Debt service - interest (Note 7 and 15) (263,395) (596,458)
Net gain before contributions and transfers (5,765,103) (901,070)
Capital contributions 754,928 -
Change in net position (5,010,175) (901,070)
Net position - beginning of year 22,614,176 16,354,752
Net position - end of year $17,604,001 $ 15,453,682
The accompanying notes are an integral part of this statement.
14
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED MARCH 31, 2014
Primary Government
Housing
Cash flows from operating activities:
Tenant receipts $ 3,593,864
Other receipts 1,292,244
Payroll and benefit expenditures (8,873,447)
Administration expenditures (1,930,788)
Tenant services expenditures (163,308)
Utilities expenditures (1,775,429)
Maintenance expenditures (2,452,539)
General expenditures (726,683)
Housing assistance payment expenditures (76,355,875)
Net cash used by operating activities (87,391,961)
Cash flows from noncapital financing activities :
Operating grants received 84,275,137
Funds returned to granting agency (216,011)
Related parties transactions (957)
Repayment of notes receivable 240,027
Interest received on notes receivable 119,151
Net cash provided by noncapital financing activities 84,417,347
Cash flows from capital financing activities:
Grants received to acquire capital assets 754,928
Acquisition of capital assets (773,050)
Principal paid on debt (240,742)
Interest paid on debt (184,609)
Net cash used by capital financing activities (443,473)
Cash flows from investing activities:
Interest receipts (22,334)
Interest on restricted cash (42)
Net cash provided by investing activities (22,376)
Net increase to cash (3,440,463)
Cash at beginning of year 14,115,623
Cash at end of year $ 10,675,160
Cash and investments $ 6,836,304
Restricted cash 3,838,856
Total cash at year end $ 10,675,160
15
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED MARCH 31, 2014
(Continued)
Primary Government
Housing
Reconciliation of operating loss to net
cash used by operating activities:
Operating loss $ (89,826,727)
Adjustments to reconcile operating loss to
Net cash used by operating activities:
Depreciation expense 2,419,744
(Increase) Decrease in:
Tenants accounts receivable 38,377
Other accounts receivable (10,139)
Prepaid expenses (26,320)
Other long-term assets 1,950
Increase (Decrease) in:
Accounts payable (101,906)
Due to other agencies 81,102
Tenant security deposits 3,073
Accrued salaries 12,412
Unearned revenues (117,450)
FSS escrows 58,311
Compensated absences (13,915)
Noncurrent liabilities (38,393)
Post retirement benefits 127,920
Net cash used by operating activities $ (87,391,961)
Noncash transactions:
Interest of $78,787 was accrued as payable to RHCP. The payments on this loan are deferred, unless the project generates
surplus cash.
Interest of $30,000 was accrued as receivable from DeAnza Gardens L.P. No payments were received with regards to this
loan.
Lease fees of $72,000 were accrued as receivable from DeAnza Gardens L.P. These fees are deferred.
Interest on the Rental Rehabilitation loans of $3,806 was accrued as revenue, while $40,640 was received. The interest on these
loans is due at maturity.
Interest on the CDBG loans of $31,346 was accrued as revenue, while $78,511 was received. Interest is due only at maturity.
The accompanying notes are an integral part of this statement.
16
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of The Housing Authority of the County of Contra Costa (the
Authority) have been prepared in conformity with accounting principles generally accepted in the
United States of America as applied to governmental entities. The Governmental Accounting
Standards Board (GASB) is the accepted standard setting body for establishing governmental
accounting and financial reporting principles.
A. Organization
The Authority was established pursuant to the State Health and Safety Code in 1941. The
Authority is a public entity organized under the laws of the State of Californias Health and
Safety Code to provide housing assistance to low and moderate income families at rents they
can afford. Eligibility is determined by family composition and income in areas served by
the Authority. To accomplish this purpose, the Authority has entered into Annual
Contributions Contracts with the U.S. Department of Housing and Urban Development
(HUD) to operate assisted housing programs.
The governing board of the Authority is the County Board of Supervisors. The Authority is
a legally separate entity from the County, maintaining separate accounting records, staff, and
administration facilities. In addition, there is no financial benefit/burden relationship between
the County and the Authority and the County has limited or no opportunity to impose its will
upon the Authority because the Authority is governed by rules and regulations imposed by
the Federal government through the U.S. Department of Housing and Urban Development.
The County defines the Authority as a discretely presented component unit in its
Comprehensive Annual Financial Report (CAFR). A copy of this report may be obtained by
contacting the Office of the Auditor-Controller, 625 Court Street, Martinez, California
94553.
B. Financial Reporting Entity
The Authoritys combined financial statements include the accounts of all the Authoritys
operations. The criteria for including organizations as component units within the
Authoritys reporting entity, as set forth in Section 2100 of GASBs Codification of
Governmental Accounting and Financial Reporting Standards , include whether:
* The organization is legally separate (can sue and be sued in their own name)
* The Authority holds the corporate powers of the organization
* The Authority appoints a voting majority of the organizations board
* The Authority is able to impose its will on the organization
* The organization has the potential to impose a financial benefit/burden on the Authority
* There is financial dependency by the organization on the Authority
17
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Based on the aforementioned criteria, the Authority has blended and discretely presented
component units. The accompanying financial statements present the Authority and its
component units, entities for which the Authority is considered to be financially accountable.
The blended component units, although legally separate entities, are, in substance, part of the
Authoritys operations. Discretely presented component units are reported in a separate
column in the fund financial statements to emphasize that they are legally separate from the
government. The component units are as follows:
Blended Component Units. HACCC Casa Del Rio, Inc (A California Nonprofit Public
Benefit Corporation) and CDR Senior Housing Associates (A California Limited
Partnership) . HACCC Casa Del Rio, Inc. is the general partner of CDR Senior Housing
Associates. The officers and Board members of HACCC Casa Del Rio, Inc. are employees
of the Authority. The partnership was formed in 1994 to develop and operate an 82-unit
affordable housing rental complex located in Antioch, California, which is currently known
as Casa Del Rio Senior Housing.
Casa Del Rio Senior Housing was placed into service in 1995. Pursuant to the
Indemnification Agreement dated July 1, 1994, by and among the Authority, HACCC Casa
Del Rio, Inc., CDR Senior Housing Associates, and MHIFED I Limited Partnership, the
Authority could possibly be liable for unpaid taxes, interest and penalties, cost to contest,
operating deficiency and expenses of enforcement as identified in the Agreement and for a
sponsors operating guaranty to provide sufficient staff or equipment to the general partner,
as needed and remedies against sponsor for default under the Amended HCD Agreement.
Casa Del Rio Senior Housing participates in the low-income housing tax credit program
under Section 42 of the Internal Revenue Code. Various agreements dictate the maximum
income levels of new tenants and also provide rent restrictions through 2054.
Since HACCC Casa Del Rio, Inc and CDR Senior Housing Associates have the potential to
impose a financial burden on the Authority, these entities have been included in the
Authoritys financial statements as blended component units. See also Note 15.
Discretely Presented Component Units. DeAnza Housing Corporation (A California
Nonprofit Public Benefit Corporation) and DeAnza Gardens, L.P. (A California Limited
Partnership). The Authority is the General Partner and DeAnza Housing Corporation is the
managing general partner of DeAnza Gardens, L.P. The partnership was formed for the
purpose of acquisition, ownership, maintenance, and operation of 180 multi-family rental
housing units and the provision of low-income housing through the construction, renovation,
rehabilitation, operation, and leasing of an affordable housing development located in Contra
Costa County, which is currently known as DeAnza Gardens.
18
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
DeAnza Gardens was placed into service during 2005. It was built on land owned by and
leased from the Authority. Under the terms of the lease, title to the improvements revert to
the Authority at the end of the 75-year lease. Financing for construction was obtained
through notes from the Authority, Bank of America, and DeAnza Housing Corporation.
DeAnza Gardens participates in the low-income housing tax credit program under Section
42 of the Internal Revenue Code. Various agreements dictate the maximum income levels
of new tenants and also provide rent restrictions through 2078.
Since DeAnza Housing Corporation and DeAnza Gardens L.P. are other organizations for
which the nature and significance of their relationship with the Authority are such that
exclusion from the financial statements would cause the Authoritys financial statements to
be misleading or incomplete, these entities have been included in the Authoritys financial
statements as discretely presented component units. See also Note 15.
Complete audited financial statements are issued separately for each of the individual
component units listed above and may be obtained from the Housing Authority of the County
of Contra Costa, 3133 Estudillo Street, P.O. Box 2759, Martinez, California 94553.
C. Basis of Presentation
Business-type activities are financed in whole or in part by fees charged to external parties
for goods or services. The Authoritys activities are strictly business-type. The Authority
has no fiduciary funds.
Fund Financial Statements:
Fund financial statements of the Authority are organized into funds, each of which is
considered a separate accounting entity. The operations of each fund are accounted for
within a separate set of self balancing accounts that comprise its assets, liabilities, fund
equity, revenues, and expenses/expenditures as appropriate. Government resources are
allocated to, and accounted for, in individual funds based upon the purpose for which they
are to be spent and the means by which spending activities are controlled. A fund is
considered major if it is the primary operating fund of the Authority or if total assets,
liabilities, revenue, or expenses/expenditures of the individual fund are at least 10 percent
of the Authority-wide total. The Authority considers all of its activity to be housing related
and therefore, considers all the financial activity of the Authority to be one major fund, titled
Housing. As such, the Authority has no non-major funds.
19
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
PROPRIETARY FUND TYPES
Enterprise Funds - Enterprise funds are used to account for operations that are financed and
operated in a manner similar to private business enterprises, where the intent is that costs of
providing goods or services to the general public on a continuing basis be financed or
recovered primarily through user charges. Enterprise funds are also used when the governing
body has decided that periodic determination of revenue earned, expenses incurred, or net
income is appropriate for capital maintenance, public policy, management control,
accountability or other purposes. The Authoritys funds are operated as enterprise funds.
D. Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured; basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the financial
statements. Basis of accounting relates to the timing of the measurement made, regardless
of the measurement focus applied.
The Proprietary Fund Types are accounted for on an economic resources measurement focus
using the accrual basis of accounting. Revenues are recognized when they are earned and
expenses are recorded at the time liabilities are incurred. Under this basis of accounting and
measurement focus, the Authority applies all GASB pronouncements.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses result from providing goods and services related to the
funds ongoing operations. The principal operating revenue of the Authoritys enterprise
funds is dwelling rental income. Operating expenses are necessary costs that have been
incurred in order to provide the good or service that is the primary activity of the fund. The
principal operating expenses of the Authoritys enterprise funds are employee salaries and
benefits, housing assistance payments, utilities, and the costs to maintain the owned units.
All revenues and expenses not meeting this definition are reported as nonoperating revenues
and expenses.
When the Authority incurs an expense for which both restricted and unrestricted resources
may be used, it is the Authoritys policy to use restricted resources first and then unrestricted
resources as needed.
20
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
E. Interfund Transactions
Statement of Net Position:
Short-term amounts due between funds are classified as Due from/to other funds. As of
March 31, 2014, the Public Housing Enterprise Fund owed $84,744 in fees to the Central
Office Enterprise Fund.
Operating advances made to the blended component units, Casa Del Rio, Inc and CDR
Senior Housing Associates were $295,667 as of March 31, 2014. The interfund balance as
of December 31, 2013, was $290,799 and was reported as non-current related party payable
by the other auditors. The Statement of Net Position - Proprietary Funds, reported as of
March 31, 2014, shows $290,799 as both a noncurrent asset and as a noncurrent liability.
The difference of $4,868, due to the timing differences in fiscal year end, is shown as other
noncurrent assets (see also Note 15).
A long-term note due from the Management Enterprise Fund to the blended component unit,
HACCC Casa Del Rio, Inc in the amount of $185,000 is reported as long-term notes
receivable and long-term debt. See also Notes 5 and 7.
Statement of Revenues, Expenses, and Changes in Fund Net Position :
Participants of the Housing Choice Voucher Program have decided to occupy units owned
by the Authoritys blended component unit. Housing assistance payments made by the
Housing Choice Voucher and Shelter Plus Care Programs to Casa Del Rio Senior Housing
(CDR) totaled $12,267 for the fiscal year ended March 31, 2014. CDR also paid the
Authority $52,452 during the current fiscal year for management fees.
The Authority utilizes a Central Office Enterprise Fund to account for administrative costs
that are not charged to its Public Housing and Housing Choice Voucher Enterprise Funds.
The Housing Choice Voucher Enterprise Fund paid management fees and bookkeeping fees
in the amount of $905,388 and $565,867, respectively. The Public Housing Enterprise Fund
paid property management, bookkeeping, and asset management fees in the amount of
$1,043,628, $94,043, and $141,240, respectively. These costs, totaling $2,750,166, are
reported as other revenue in the Central Office Enterprise Fund and administrative expenses
of the Public Housing and Housing Choice Voucher Enterprise Funds.
The Authority is required by HUD to pay HAP on behalf of other authorities with Housing
Choice Voucher Program participants residing within Contra Costa County. The Authority
is reimbursed for this HAP from the initiating housing authority. HUD requires this HAP
to be reported as an expense when paid to the landlord and as income when reimbursed from
21
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
the initiating housing authority. For the current fiscal year, the Authority received
reimbursement of $875,752 in HAP paid on behalf of other housing authorities. This amount
is therefore reported as revenue and expense of the Housing Choice Voucher Enterprise
Fund.
Interfund transfers of $78,760 were made between the Authoritys two loan programs to
cover operating costs. The Rental Rehabilitation Enterprise Fund transferred funds to the
CDBG Rental Rehabilitation Enterprise Fund.
F. Cash and Investments
Cash includes amounts in demand deposits and saving accounts. Investments are reported
in the accompanying statement at market value. All of the Authoritys investments can be
converted to cash in a relatively short amount of time. Therefore, all cash and investments
are used in the Statement of Cash Flows.
Changes in fair value that occur during a fiscal year are recognized as interest income
reported for that fiscal year. Interest income includes interest earnings, changes in fair value,
and any gains or losses realized upon the liquidation, maturity, or sale of investments.
The Authority pools cash and investments of all programs. Each programs share in this pool
is displayed in the accompanying Financial Data Schedule as cashand investments. Interest
income earned by the pooled investments is allocated to the various funds based on each
funds average cash and investment balance.
G. Accounts Receivable
Receivables are principally amounts due from HUD and tenants. Allowance for doubtful
accounts has been provided based on the likelihood of the recovery.
H. Capital Assets
Capital assets, which include property, plant and equipment, acquired for Proprietary Funds
are capitalized in the respective funds to which they apply. The Authority has an established
capitalization policy, which requires all acquisitions of property and equipment in excess of
$5,000 and all expenditures for repairs, maintenance, renewals, and betterments that
materially prolong the useful lives of assets to be capitalized. Property and equipment are
recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair market value at the date of donation. Interest
expense incurred during the development period is capitalized. The costs of normal
22
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
maintenance and repairs that do not add to the value of the asset or materially extend assets
lives are not capitalized.
Depreciation of exhaustible capital assets used by Proprietary Funds is charged as an expense
against operations, and accumulated depreciation is reported on the Statement of Net
Position. Capital assets are being depreciated using the straight-line basis over the useful
lives of the assets. The useful lives are generally 27.5 years for buildings, 10 years for
modernization, 5 years for vehicles, furniture and equipment, and 3 years for computer
equipment. Salvage value on all depreciable equipment is assumed to be insignificant and
therefore valued at $0.
I. Compensated Absences
It is the Authoritys policy to permit employees to accumulate earned but unused vacation
and sick pay benefits. There is no liability for unpaid accumulated sick leave since the
government does not have a policy to pay any amounts when employees separate from
service with the Authority. All vacation pay is accrued when incurred and allocated to the
appropriate proprietary fund. Total liability for the Authority is $367,612 based on year-end
hourly rates. Of this amount $307,451 is considered by the Authority to be a current liability.
J. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Financial Position will sometimes include a separate
section for deferred outflows of resources. This separate financial statement element
represents a consumption of net position that applies to a future period and so will not be
recognized as an outflow of resources (expense) until that time. The Authority does not have
any deferred outflows of resources as of March 31, 2014.
In addition to liabilities, the Statement of Financial Position will sometimes include a
separate section for deferred inflows of resources. This separate financial statement element
represents an acquisition of net position that applies to a future period and so will not be
recognized as an inflow of resources (revenue) until that time. The Authority does not have
any deferred inflows of resources as of March 31, 2014.
K. Net Position
Net position represents the differences between assets and liabilities. Net position consists
of net investment in capital assets; restricted net position; and unrestricted net position. Net
investment in capital assets consists of capital assets, net of accumulated depreciation,
reduced by the outstanding balances of borrowing used for acquisition, construction, or
23
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
improvement of those assets (excluding interfund borrowing and including accrued interest).
Net position is reported as restricted when there are limitations imposed on its use through
constitutional provisions or enabling legislation or through external restrictions imposed by
creditors, grantors, or laws or regulations of other governments.
L. Taxes
The Authority is exempt from federal and state income taxes. The Authority is also exempt
from property taxes but makes payments in lieu of taxes on owned housing.
M. Budgets and Budgetary Accounting
The Board of Commissioners adopts an operating budget effective April 1 annually. This
budget may be revised by the Board of Commissioners during the year to give consideration
to unanticipated revenue and expenditures primarily resulting from events unknown at the
time of budget adoption.
N. Estimates
Management uses estimates and assumptions in preparing financial statements. Those
estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities, and the reported revenues and expenses. Actual results
could differ from those estimates.
O. Encumbrances
Encumbrance accounting is not employed by the Authority.
P. Grant Restrictions
The Authority has received loans and grants from the U.S. Department of Housing and Urban
Development. The grants require that only individual and families that meet various income,
age and employment standards be housed or aided.
Q. Cost Allocation Procedures
Cost allocation procedures are divided into one of the following three methods, 1) Direct
Costs, 2) Indirect Costs, 3) Fee for Service.
Direct Allocation Method: this method is used when the cost being incurred directly benefits
a specific program, region, development, project or site. Allocation at the regional,
24
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
development, project or site level shall be allocated by using the ratio of number of bedrooms
managed (zero bedroom units will count as 1). Allocation at the Program level will be based
on a common factor within the program area, such as units within a grant, grant award
amounts, or other reasonable factors where allowed.
Indirect Allocation Method: this method is used when the cost being incurred is for a
common or joint objective and therefore does not directly benefit a specific program, region,
development, project or site. These costs will be allocated using a ration from direct salary
allocation plan consistent with OMB Circular A-87. The direct salary allocation plan will
be established annually as a part of the annual budget process.
Fee for Service Method: this method is used when an employee performs work outside of
their budgeted allocation. The fee for service method will reduce the allocations of salary
and benefits from the program that the position was originally budgeted for. This method
should be documented on a time reporting process, either by way of time card or activity log
or both.
R. New GASB Pronouncements
The Governmental Accounting Standards Board (GASB) has issued several new
pronouncements that the Authority has reviewed for application to their accounting and
reporting.
GASB Statement No. 65 Items Previously Reported as Assets and Liabilities, is effective for
financial statements for periods beginning after December 15, 2012. This statement
improves financial reporting by clarifying the appropriate use of the financial statement
elements deferred outflows of resources and deferred inflows of resources to ensure
consistency in financial reporting. The Authority has implemented this statement in the year
ended March 31, 2014. Statement 65 requires that debt issuance costs be reported as
expenses when incurred since they no longer meet the definition of an asset. The component
units are nonprofit public benefit corporations and limited partnerships and they follow the
guidance of the Financial Accounting Standards Board for their financial reporting. Certain
recognition criteria and presentation features are different from GASB. For instance, these
entities report debt issuance costs as an asset amortized over time. No modifications have
been made to the audited financial information as presented. The unamortized value of the
loan costs does not have a material effect on the Authoritys net position. Net loan costs of
$34,250 are reported as other noncurrent assets of the primary government, for the blended
component units, and $119,553 as other noncurrent assets of the component units, for the
discretely presented component units.
25
Note 1 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
GASB Statement No. 68 Accounting and Financial Reporting for Pensions - an amendment
of GASB Statement No 27, is effective for financial statements for periods beginning after
June 15, 2014. This statement improves financial reporting for pensions. This Statement
results from a comprehensive review of the effectiveness of existing standards of accounting
and financial reporting for pensions with regard to providing decision-useful information,
supporting assessments of accountability and inter-period equity, and creating additional
transparency. Management is currently evaluating the impact of the adoption of this
Statement on the Authoritys financial statements. Management anticipates that the
implementation of this Statement will have a material impact on the financial statements in
future years.
Note 2 - CASH AND INVESTMENT
Cash and investments as of March 31, 2014 are classified in the accompanying financial statement
as follows:
Statement of net position:
Cash and investments $ 6,836,304
Restricted cash 3,838,856
Total Cash & Investments $ 10,675,160
Demand deposits $ 2,889,212
Investments 7,324,296
Cash held by other agencies 459,702
Cash on hand 1,950
Total Cash & Investments $ 10,675,160
Investments Authorized by the Authoritys Investment Policy
Investments authorized by the Authority are empowered by the HUD Notice 99-48 and its own
investment policy to invest HUD funds in the following:
United States Treasury Bills, Notes and Bonds;
Obligations issued by Agencies or Instrumentalities of the U.S. Government;
State or Municipal Depository Funds, such as the Local Agency Investment Fund (LAIF) or
pooled cash investment funds managed by County treasurers;
Insured Demand and Savings Deposits, provided that deposits in excess of the insured
amounts must be 100% collateralized by federal securities;
Insured Money Market Deposit Accounts;
Insured SUPER NOW accounts, provided that deposits in excess of the insured amount must
be 100% collateralized by federal securities;
26
Note 2 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Negotiable Certificates of Deposit issued by federally or state chartered banks or associations,
limited to no more than 30% of surplus funds;
Repurchase/Reverse Repurchase Agreements of any securities authorized by this section;
securities purchased under purchase agreements shall be no less than 102% of market value;
Sweep Accounts that are 100% collateralized by federal securities;
Shares of beneficial interest issued by diversified management companies investing in the
securities and obligations authorized by this Section (Money Market Mutual Funds); Funds
must carry the highest rating of at least two national rating agencies and are limited to not
more than 20% of surplus funds;
Funds held under the terms of a Trust Indenture or other contract or agreement including the
HUD/PHA Annual Contributions Contract, may be invested according to the provisions of
those indentures or contracts; and
Any other investment security authorized under the provisions of HUD Notice PIH 97-41.
The Authority is empowered by the California Government Code (CGC) Sections 5922 and
53601 et seq and its own investment policy to invest non-HUD funds in the following:
Bonds issued by the local entity with a maximum maturity of five years;
United States Treasury Bills, Notes and Bonds;
Registered state warrants or treasury notes or bonds issued by the State of California;
Bonds, notes, warrants or other evidence of debt issued by a local agency within the State of
California, including pooled investment accounts sponsored by the State of California, County
Treasurer, other local agencies or Joint Powers Agencies;
Obligations issued by Agencies or Instrumentalities of the U.S. Government;
Bankers Acceptances with a term not to exceed 270 days, limited to 40% of surplus funds;
no more than 30% of surplus funds can be invested in Bankers Acceptances of any single
commercial bank;
Prime Commercial Paper with a term not to exceed 180 days and the highest ranking issued
by Moodys Investors Service or Standard & Poors Corp., limited to 15% of surplus funds;
provided that if the average total maturity of all commercial papers does not exceed 31 days
up to 30% of surplus funds can be invested in commercial papers.
Negotiable Certificates of Deposit issued by federally or state chartered banks or associations,
limited to not more than 30% of surplus funds;
Repurchase/Reverse Repurchase Agreements of any securities authorized by this Section,
securities purchased under these agreements shall be no less than 102% of market value.
Securities purchased under reverse repurchase agreements shall be for temporary and
unanticipated cash flow needs only.
Medium term notes (not to exceed two years) of U.S. corporations rated AAA or better by
Moodys or Standard & Poors limited to not more than 30% of surplus funds;
27
Note 2 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Shares of beneficial interest issued by diversified management companies investing in the
securities and obligations authorized by this Section (Money Market Mutual Funds), limited
to not more than 15% of surplus funds;
Funds held under the terms of a Trust Indenture or other contract or agreement may be
invested according to the provisions of those indentures or agreements;
Collateralized bank deposits with a perfected security interest in accordance with the Uniform
Commercial Code (UCC) or applicable federal security regulations;
Any mortgage pass-through security, collateralized mortgage obligation, mortgaged backed
or other pay-through bond, equipment least-backed certificate, consumer receivable pass-
through certificate or consumer receivable backed bond of a maximum maturity of five years,
securities in this category must be rated AA or better by a national rating service and are
limited to not more than 30% of surplus funds;
Any other investment security authorized under the provisions of California Government
Code Sections 5922 and 53601.
Disclosure Related to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity
of its fair value to changes in the market rates. See the table shown later in this note titled
Investment Disclosure for the maturity dates for each of the Authoritys investments.
Disclosures related to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. See the table shown later in this note titled Investment
Disclosure for the ratings assigned to the issuer for each of the Authoritys investments.
Concentration of Credit Risk
See the table shown later in this note titled Investment Disclosure to determine how the
Authoritys investments are concentrated. These investments are owned by the following
programs:
Housing Choice Voucher Program $ 4,132,181 56.42%
Other State and Local Programs 1,478,821 20.19%
Public Housing Program 1,299,506 17.74%
Central Office Cost Center 159,159 2.17%
Rental Rehabilitation Loan Program 147,309 2.01%
Casa Del Rio (blended component unit) 107,320 1.47%
Total investments $ 7,324,296
28
Note 2 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be able to
recover collateral securities that are in the possession of an outside party. The California
Government Code and the Authoritys investment policy do not contain legal or policy
requirements that would limit the exposure to custodial credit risk for deposits, other than the
following provision for deposits: The California Government Code requires California banks and
savings and loan associations to secure the Authoritys deposits not covered by federal deposit
insurance by pledging mortgages or government securities as collateral. The market value of the
pledged securities in the collateral pool must equal at least 110% of the total amount deposited
by the public agencies. California law also allows financial institutions to secure Authority
deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public
deposits. Such collateral must be held in the pledging banks trust department in a separate
depository in an account for the Authority.
The custodial risk for investments is the risk that, in the event of the failure of the counterparty
(broker-dealer, etc) to a transaction, a government will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The California
Government Code and the Authoritys investment policy do not contain legal or policy
requirements that would limit the exposure to custodial credit risk for investments. With respect
to investments, custodial credit risk generally applies only to direct investments in marketable
securities. Custodial credit risk does not apply to a local governments indirect investment in
securities through the use of mutual funds or government investment pools (such as LAIF).
The Authority has executed depository agreements with the two banks with which it currently
does business. The General Depository Agreement with WestAmerica Bank is dated October
24, 2005. It states that any portion of PHA funds not insured by a Federal insurance organization
shall be fully (100%) and continuously collateralized with specific and identifiable U.S.
Government or Agency securities prescribed by HUD. The Contract of Deposit of Monies
with Bank of America is dated April 15, 2002. This contract states that The Bank will maintain
at all times with the Agent of the Bank as security for Depositors deposits: a) eligible securities
of the classes described in Government Code Section 53651 having market value of least 10%
in excess of the total amount of deposits secured by those securities, b) eligible securities of the
class described in subdivision (m) of Government Code Section 53651 having a market value at
least 50% in excess of the total amount of deposits secured by those securities, and c) eligible
securities of the class described in subdivision (p) of Government Code Section 53651 having a
market value at least 5% in excess of the total amount of deposits secured by those securities.
29
Note 2 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
The Authoritys exposure to custodial credit risk is as follows:
Demand deposits with banks, fully insured by FDIC $ 500,000
Demand deposits with banks covered by depository agreements 2,372,403
Cash held by investment companies 16,809
Deposits held by CHFA 459,702
Total demand deposits and cash held by other agencies $ 3,348,914
See the table below for information regarding the investments.
Investment Disclosure - March 31, 2014
Investment Type Issuer Book Value Market Value Maturity Rate
Government Security LAIF $ 3,527,366 $ 3,528,485 N/A
Interest on LAIF 2,005 2,005 N/A
Certif. Of Deposit American Express Cent 168,000 165,813 4/25/18 300
Certif. Of Deposit JP Morgan Chase 200,000 198,084 4/30/18 199
Certif. Of Deposit Sandhills Bank 100,000 100,317 7/26/18 146
Certif. Of Deposit BBVA Compass Bank 235,000 235,710 9/25/18 207
Certif. Of Deposit Sallie Mae Bank 100,000 100,200 10/23/18 300
Certif. Of Deposit Sallie Mae Bank 100,000 100,162 10/30/18 300
Certif. Of Deposit C I T Bank 105,000 103,640 4/24/18 295
Certif. Of Deposit C I T Bank 120,000 120,362 11/14/18 295
Certif. Of Deposit G E Capital Bank 110,000 106,996 5/3/18 292
Certif. Of Deposit G E Capital Bank 102,000 99,728 6/14/18 300
Certif. Of Deposit G E Retail Bank 100,000 100,033 12/6/18 300
Certif. Of Deposit G E Retail Bank 100,000 100,521 9/13/18 300
Certif. Of Deposit Marlin Business Bank 220,000 218,603 2/12/19 300
Certif. Of Deposit Bangor Savings Bank 120,000 119,814 12/20/18 206
Certif. Of Deposit Essa Bank & Trust 100,000 99,764 12/28/18 196
Certif. Of Deposit Discover Bank 248,000 246,681 2/06/18 300
Certif. Of Deposit First Bank Puerto Rico 147,000 145,931 2/08/18 163
Certif. Of Deposit Mid First Bank OKH 105,000 104,786 1/30/18 300
Certif. Of Deposit Safra National Bank 200,000 194,980 2/28/18 197
Certif. Of Deposit Goldman Sachs Bank 149,000 147,309 3/27/18 253
Certif. Of Deposit First Republic Bank 100,000 102,554 5/06/15 178
Certif. Of Deposit Queensborough Natl Bank 99,000 101,595 7/30/15 140
Certif. Of Deposit Cole Taylor Bank 99,000 101,225 12/30/15 293
Certif. Of Deposit BMW Bank of No. America 150,000 147,159 6/28/18 300
Certif. Of Deposit BMW Bank of No. America 99,000 101,289 1/28/16 300
Certif. Of Deposit Goldman Sachs Bank 99,000 100,456 3/28/17 253
Certif. Of Deposit Bank of Baroda 125,000 124,939 10/29/18 220
Certif. Of Deposit Bank of Baroda 100,000 98,954 3/08/18 220
Certif. Of Deposit Goldman Sachs Bank 107,000 107,320 1/16/18 253
Total Investments $ 7,336,371 7,325,415
Investments reported below market value (1,119)
Total Investments reported $ 7,324,296
30
Note 2 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
The Authority is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by the California Government Code under the oversight of the Treasurer of the State
of California. The LAIF is a special fund of the California State Treasury through which local
governments may pool investments. Each government agency may invest up to $30,000,000 in
each account in the fund. Investments in LAIF are highly liquid, as deposits can be converted to
cash within twenty-four hours without loss of interest or principal. The full faith and credit of the
State of California secure investments in LAIF.
At March 31, 2014, an account was maintained in the name of the Housing Authority of the
County of Contra Costa for $3,527,366. The total cost value of investment in LAIF was
$3,527,366. The total fair value of investments in LAIF was $3,528,485. The fair value total
includes an unrealized gain on investments of $1,119. The unrealized gain was based on a fair
value adjustment factor of 1.000317118 that was calculated by the State of California Treasurers
Office. The unrealized gain was not recorded by the Authority and is considered immaterial. Of
the $3,527,366 invested in LAIF, $3,529,371 is recorded as assets of the Authority. The
difference includes $2,005 of interest receivable from LAIF as of March 31, 2014, shown by the
Authority as investments.
LAIF is a part of the State of California Pooled Money Investment Account (PMIA). At March
31, 2014, the fair value of the State of California Pooled Money Investment Account (PMIA),
including accrued interest, was $57,568,181,449. The PMIA portfolio had no securities in the
form of structured notes and asset-backed securities totaling $982,373,000. The PMIA has
policies, goals and objectives for the portfolio to make certain that the goals of safety, liquidity,
and yield are not jeopardized. These policies are formulated by investment staff and reviewed by
both the PMIA and LAIF Advisory Boards on an annual basis. LAIFs and the Authoritys
exposure to credit, market, or legal risk is not available.
During 2002, California Government code was added to the LAIFs enabling legislation stating
that the right of a city, county...special district...to withdraw its deposited money from the LAIF
upon demand may not be altered, impaired, or denied in any way by any state official or state
agency based upon the States failure to adopt a State Budget by July 1 of each new fiscal year.
In addition, it has been determined that the State of California cannot declare bankruptcy under
Federal regulations. This allows other government code stating that money placed with the State
Treasurer for deposit in the LAIF shall not be subject to ...transfer or loan...or impound or seizure
by any state official or state agency to stand.
31
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Note 3 - RESTRICTED CASH
Restricted cash consists of funds that are held in escrow, Federal funds held for future HAP
expenditures, replacement and operating reserves required by the lender, and funds being held by
the Authority on behalf of its clients. The balances are as follows:
Tenant security deposits - Public Housing $ 320,961
Family Self Sufficiency Program participants escrow funds 300,023
HUD funds restricted in use for HAP payments (See also note 11) 2,692,898
Funds due back to HUD 29,620
Blended component unit - Casa Del Rio:
Funds held by CHFA:
Replacement reserve 221,367
Operating reserve 227,368
Hazard and earthquake insurance impounds 10,967
Tenant security deposits 35,652
Total restricted cash $ 3,838,856
The funds held by the California Housing Finance Agency (CHFA) can only be used for major
repairs or insurance, upon receipt of prior written approval from CHFA. These amounts are also
reported as restricted net position (see also Note 11).
The amounts held by the Authorities for program participants of the FSS program, for tenant
security deposits, and payable to HUD are reported as payable from restricted assets.
Please see the prior note to determine interest rates and credit risks for the above restricted cash.
Note 4 - INTERFUND BALANCES
The Authority utilizes a few cash accounts to make payments to vendors and for payroll. Costs
are accrued to appropriate funds, which necessitates the use of interfund accounts. Costs are
reimbursed on a periodic basis. The interfund receivable/payable balance of $84,744 is owed by
the Public Housing Enterprise Fund to the Central Office Enterprise Fund for asset management
fees.
32
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Note 5 - NOTES RECEIVABLE
A schedule of changes in notes receivable is as follows:
Balance Transferred Loans Loans Balance Long-term Short-term
3/31/13 to County Issued Repaid 3/31/14 Portion Portion
CDBG Loan Program $ 1,307,379 $(745,004) $ - $(141,931) $ 420,444 $ 420,444 $ -
Rental Rehab. Program 149,442 - - (95,412) 54,030 11,937 42,093
Employee computer loans 13,674 - 23,478 (26,162) 10,990 - 10,990
DeAnza Gardens LP 1,000,000 - - - 1,000,000 1,000,000 -
2,470,495 (745,004) 23,478 (263,505) 1,485,464 1,432,381 53,083
Interfund:
CDR from mgmt fund 185,000 --- 185,000 185,000 -
Totals $ 2,655,495 $(745,004)$ 23,478 $(263,505) $ 1,670,464 $ 1,617,381 $ 53,083
Interest on these loans is a follows:
Balance Transferred Interest Interest Balance Long-term Short-term
3/31/13 to County Accrued Repaid 3/31/14 Portion Portion
CDBG Loan Program $ 329,925 $(194,622) $43,796 $ (78,511) $ 100,588 $ 100,588 $ -
Rental Rehab. Program 47,741 - 3,806 (40,640) 10,906 3,363 7,543
DeAnza Gardens LP 360,107 - 30,000 - 390,107 390,107 -
Totals $ 737,773 $(194,622)$77,602 $(119,151) $ 501,601 $ 494,058 $ 7,543
The Authority has made deferred payment loans to individuals and organizations under the
Countys Community Development Block Grant (CDBG) and Rental Rehabilitation (RR)
Programs. These loans are secured by deeds of trust in the name of the County of Contra Costa
or the City of Antioch. These programs are revolving loan programs administered by the
Authority. Any repayments of outstanding loans, or interest on the loans, must be used for new
loans or program administration as authorized by the County or the City of Antioch. These loans
typically earn 3% interest per annum. These notes receivable, along with all of the accrued
interest, are offset by an equal amount shown in other noncurrent liabilities (See Note 10).
Due to diminished funding at the federal level, the Authority transferred the administration of the
Countys CDBG files back to the County in May 2013. The remaining CDBG loans are
associated with the City of Antioch.
During the prior year, the Authority expected that one of the Rental Rehab loans would default
during the current year. An allowance for doubtful accounts, in the amount of $49,636, was
recorded as of March 31, 2013. No determination was made with regards to this loan and it
remains doubtful.
The Authority administers an employee loan program whereby employees can borrow funds for
the purpose of purchasing a computer to be used at home. These loans accrue no interest.
Payments are made through the payroll system.
Pursuant to a demand note dated June 30, 1994, the Authority may be liable to HACCC Casa Del
Rio, Inc for $185,000. Although the note is due upon demand, the maturity date is December 31,
33
Note 5 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
2059. The note will be called prior to maturity only in the event that there are operating deficits
and there is insufficient cash available to cover expenses.
The Authority has also issued a note to the DeAnza Gardens, L.P., which is a discretely presented
component unit of the Authority (see Note 1.B.). The note bears simple interest at the rate 3%
per annum, payments are due commencing on October 1, 2005, but are payable only to the extent
of the previous years excess/distributable cash, and is due June 2043. No payments, of interest
or principal, have been received on this loan.
Not shown on the previous schedule, the DeAnza Housing Corporation issued a note in the
amount of $1,000,000 bearing simple interest at 6.8%, to be paid in full June 2043. This second
note is an intra-fund transaction. DeAnza Gardens L.P. owes the DeAnza Housing Corporation.
This loan has been eliminated from the discretely presented component unit column of the
Statement of Net Position. Since this loan does not effect the Authority, it is not shown in the
table on the prior page.
Note 6 - CAPITAL ASSETS
Capital asset activity for the year ending March 31, 2014.
March 31, March 31,
2013 Additions Transfers Deletions 2014
Capital assets, not
being depreciated:
Land $ 1,825,993 $ - $ - $ - $ 1,825,993
Construction in progress 816,561 744,948 (763,407) - 798,102
Total 2,642,554 744,948 (763,407) - 2,624,095
Capital assets depreciated:
Buildings and improvements 95,666,776 - 763,407 - 96,430,183
Equipment 2,420,420 28,104 - (12,450) 2,436,074
Total capital assets
being depreciated 98,087,196 28,104 763,407 (12,450) 98,866,257
Total capital assets 100,729,750 773,052 - (12,450) 101,490,352
Accumulated depreciation:
Buildings and improvements (81,310,659) (2,251,466) - - (83,562,125)
Equipment (2,081,001) (168,278) - 6,023 (2,243,256)
Total accumulated
depreciation (83,391,660) (2,419,744) - 6,023 (85,805,381)
Total capital assets depreciated, net 14,695,536 (2,391,640) 763,407 (6,427) 13,060,876
Total capital assets, net $ 17,338,090 $ (1,646,692) $ - $ (6,427) $ 15,684,971
34
Note 6 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
The changes by project are as follows:
March 31, March 31,
2013 Additions Transfers Deletions 2014
TOTAL CAPITAL ASSETS:
Public Housing $ 89,154,833 $ 770,096 $ - $ - $ 89,924,929
Housing Choice Voucher 4,123,325 2,562 - (6,023) 4,119,864
Section 8 Moderate Rehab 168,778 - - - 168,778
Shelter Plus Care 2,399 13 - - 2,412
CDBG Loan 3,887 50 - - 3,937
Management Fund 75,115 - - - 75,115
Central Office Cost Center 142,055 331 - - 142,386
Blended Component Units:
Casa Del Rio 7,059,358 - - (6,427) 7,052,931
Total capital assets 100,729,750 773,052 - (12,450) 101,490,352
DEPRECIATION:
Public Housing (78,410,210) (1,989,691) - - (80,399,901)
Housing Choice Voucher (1,391,294) (192,151) - 6,023 (1,577,422)
Section 8 Moderate Rehab (168,778) - - - (168,778)
Shelter Plus Care (1,563) (579) - - (2,142)
CDBG Loan (2,516) (951) - - (3,467)
Management Fund (74,997) (117) - - (75,114)
Central Office Cost Center (86,003) (35,288) - - (121,291)
Blended Component Units:
Casa Del Rio (3,256,299) (200,967) - - (3,457,266)
Total depreciation (83,391,660) (2,419,744) - 6,023 (85,805,381)
Net $ 17,338,090 $ (1,646,692) $ - $ (6,427) $ 15,684,971
Note 7 - LONG TERM DEBT
The following is a schedule of the changes in long-term debt for the current fiscal year:
Balance Loans Balance Short-term Long-term Interest
3/31/2013 Issued Payments 3/31/2014 Portion Portion Payable
Energy equipment lease $ 543,550 $ - $ (147,433) $ 396,117 $ 153,854 $ 242,263 $ -
Office building mortgage 2,536,659 - (72,174) 2,464,485 76,135 2,388,350 -
Blended component units:
Casa Del Rio:
CHFA 403,091 - (21,135) 381,956 22,843 359,113 -
RHCP 2,626,618 -- 2,626,618 - 2,626,618 1,567,529
6,109,918 - (240,742) 5,869,176 252,832 5,616,344 1,567,529
Interfund:
Mgmt Fund to CDR 185,000 -- 185,000 - 185,000 -
Totals $ 6,294,918 $ -$ (240,742) $ 6,054,176 $ 252,832 $ 5,801,344 $1,567,529
35
Note 7 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Following is a schedule of debt payment requirements to maturity for the mortgages noted above
that require payments:
Energy Lease Loan Office Building CHFA
Year ending Principal Interest Principal Interest Principal Interest Total
2015 $ 153,854 $ 14,181 $ 76,135 $ 129,350 $ 22,843 $ 28,988 $ 425,351
2016 160,710 7,325 82,150 123,335 24,690 27,141 425,351
2017 81,553 1,019 2,306,200 99,414 26,686 25,145 2,540,017
2018 - - - - 28,843 22,988 51,831
2019 - - - - 31,175 20,656 51,831
2020-2024 - - - - 198,022 61,132 259,154
2025-2026 ----49,697 2,124 51,821
$ 396,117 $ 22,525 $ 2,464,485 $ 352,099 $ 381,956 $ 188,174 $ 3,805,356
On April 8, 2003, the Authority entered into an energy services agreement with EUA Citizens
Conservation Services, Inc. (Citizens). Citizens prepared an energy audit which generated a report
and plan of action. Citizens proposed installing certain energy saving equipment in the housing
units of the Public Housing Program. The Authority agreed to pay for the purchase and
installation of this equipment in an amount not to exceed $1,570,465. Citizens guarantees the
Authority a specific level of cost savings due to the installation of the equipment for a period of
twelve years. The costs savings is guaranteed by Citizens to exceed the Authoritys debt service
on the financing associated with the purchase and installation of this equipment. At the end of the
twelve year period the title to the equipment will pass to the Authority. The $1,570,465 to fund
this equipment lease and installation activity was borrowed from WestAmerica Bank. The loan
is due in monthly installments of $14,003. The Authority began making these monthly payments
during the fiscal year ended March 31, 2005. The payments will continue through September
2016. Interest accrues on this loan at a rate of 4.330% per annum. Interest in the amount of
$20,601 was paid and expensed during the year.
During December 2006, the Authority purchased an office building to house the staff of their
Housing Choice Voucher Program. To facilitate this purchase, the Authority borrowed $2,847,500
from WestAmerica Bank on December 15, 2006. Originally, the interest on this loan was 6.75%
per annum. The interest rate decreased to 6% in 2012 and 5.25% in 2013. Currently, the loan
requires a monthly payment of $17,124. A balloon payment of $2,247,471 will be due on January
1, 2017, when the note becomes due. Interest in the amount of $133,311 was paid and expensed
during the year.
The California Housing Finance Agency note, received through the State of California, is dated
November 14, 1994. The original amount borrowed was $600,000. The loan carries a simple
interest rate of 7.8% per annum. Principal and interest are payable in monthly installments of
36
Note 7 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
$4,319. The note is due in full December 2024. Interest in the amount of $30,696 was paid and
expensed during the calendar year ended December 31, 2013.
The Rental Housing Construction Program note, received through the State of California, is dated
January 15, 1993. The original amount borrowed was $2,626,618. The loan accrues interest at
a rate of 3% per annum. Payments are required on this loan only to the extent that the Casa Del
Rio project has surplus cash. This note and interest on the note are due June 5, 2054. No principal
or interest payments were made on this loan during the year ended December 31, 2013. Interest
was expensed in the amount of $78,787. The amount of deferred interest accrued as payable as
of the end of the fiscal year was $1,567,529. The entire amount is considered to be long-term and
is shown as other noncurrent liabilities. See also Note 10.
Pursuant to a demand note dated June 30, 1994, the Authority may be liable to HACCC Casa Del
Rio, Inc for $185,000. Although the note is due upon demand, the maturity date is December 31,
2059. The note will be called prior to maturity only in the event that there are operating deficits
and there is insufficient cash available to cover expenses.
Note 8 - PAYMENT IN LIEU OF TAXES
In connection with the Public Housing Program, the Authority is obligated to make annual
payments in lieu of property taxes based on the lesser of 25% of the assessable value of owned
housing, times the current tax rate; or 10% of the dwelling rents, net of utilities expense. At
March 31, 2014, $88,870 was expensed for payment in lieu of taxes. Approximately 75% is
payable as of March 31, 2014 and is shown as Due to Other Agencies.
Note 9 - UNEARNED REVENUE
Unearned revenue consists of:
Prepaid rent - Public Housing $ 12,881
Casa Del Rio 50 $ 12,931
Revolving loan funds held for future expenditures:
CDBG (returned to County in 2013) -
Rental Rehabilitation 214,652 214,652
Prepaid portability payments from other agencies 12,093
$ 239,676
37
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Note 10 - OTHER NONCURRENT LIABILITIES
Other noncurrent liabilities consist of:
Loan liability:
CDBG:
Notes receivable (See also Note 5) $ 420,444
Interest on notes receivable (See also Note 5) 100,588 $ 521,032
Rental Rehabilitation:
Notes receivable (See also Note 5) 54,030
Interest on notes receivable (See also Note 5) 10,906
Allowance for doubtful accounts (49,636) 15,300
Housing Choice Voucher Program 147,044
Long term portion of the interest payable
on the RHCP loan - a liability of the blended
component unit, Casa Del Rio (See also Note 7) 1,567,529
Post retirement benefits payable (See also Note 13) 2,275,827
$ 4,526,732
Note 11 - NET POSITION
A. Net investment in capital assets
Net investment in capital assets consists of the following:
Capital assets, net of depreciation (see Note 6) $ 15,684,971
Long term debt (omitting interfund balances) (see Note 7) (5,869,176)
Accrued interest on long term debt (see Note 7 & 10) (1,567,529 )
Net investment in capital assets $ 8,248,266
B. Restricted Net Position
Net position is reported as restricted when constraints placed on the net asset use are either
externally imposed by creditors, grantors, contributors, or laws or regulations of other
governments; or imposed by law through constitutional provisions or enabling legislation.
The Authority has reported the following as restricted net position:
Excess HAP funding - Housing Choice Voucher $ 2,692,898
Casa Del Rio Senior Housing
replacement and operating reserves 459,702
$ 3,152,600
38
Note 11 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
The excess HAP funds are fully funded, see also Note 3. The restrictions associated with
Casa Del Rio Senior Housing are required by the lender, held by CHFA and fully funded, see
also Note 3.
Commencing with the calendar year 2005, PHAs received full disbursement of their HAP
allocations. It was the responsibility of the PHAs to maintain any excess HAP disbursements
in their Net Restricted Asset account, for use only for future HAP needs to assist additional
families up to the number of units under contract. Since 2005, PHAs have accumulated
significant amounts in their Net Restricted Asset accounts. Beginning in 2008, at
Congressional direction, HUD began recapturing this excess HAP by offsetting the annual
allocations with the excess HAP held by PHAs. In 2012, HUD implemented cash
management procedures which mitigated the accumulation of excess HAP in Net Restricted
Asset accounts by PHAs. These procedures based the payment of HAP on actual need
reported by PHAs in the Voucher Management System (VMS). Any excess allocation will
now be held by HUD until PHAs demonstrate need for the disbursement of the funds.
The change in the Authoritys Net Restricted Asset account for the Housing Choice Voucher
Program is as follows:
Balance as of March 31, 2013 $ 5,102,812
Use of excess HAP funding (2,474,946)
FSS forfeitures, including associated interest 64,162
Interest 870
Balance as of March 31, 2014 $ 2,692,898
Note 12 - RETIREMENT PLAN
The Authority participates in a cost-sharing multiple-employer defined benefit retirement plan that
is administered by the Contra Costa County Employees’ Retirement Association. All full-time
employees of the Authority participate in this plan. The plan provides death, disability and
service retirement benefits. Benefits are based on the employee’s highest level of annual salary,
years of service and age at the time of retirement. The Authority’s retirement plan had 134
participants at March 31, 2014. Employer contributions are vested (1) after 10 years of service
and employee attain age 50 or (2) 30 years of service regardless of age or (3) at mandatory age
regardless of the amount of service.
Employees contribute to the retirement system through biweekly payroll deductions. The rate of
contribution for employees is determined by numerous factors at the time of entrance into the
39
Note 12 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
system. Employee contributions and interest thereon may be withdrawn only at termination of
employment or at retirement.
Information on contributions for the last five years is as follows:
Fiscal Payroll As a As a
Year Subject to Employer Percentage Employee Percentage
Ended Contribution Contribution of Payroll Contribution of Payroll
3/31/2010 $ 5,345,205 $ 1,760,494 32.94% $ 371,528 6.95%
3/31/2011 $ 5,227,243 $ 1,806,368 34.56% $ 370,477 7.09%
3/31/2012 $ 5,057,120 $ 1,916,003 37.89% $ 322,557 6.38%
3/31/2013 $ 4,922,992 $ 1,821,886 37.01% $ 367,216 7.46%
3/31/2014 $ 4,647,605 $ 1,761,687 37.91% $ 330,230 7.11%
The ten-year trend analysis and other disclosures required by U.S. generally accepted accounting
principles are described in the financial statements of the Contra Costa County Employees
Retirement Association (CCCERA). The CCCERA is a component unit of the County of Contra
Costa and is reported as a pension trust fund in their basic financial statements. Complete audited
financial statements may be obtained from the administrative offices of CCCERA 1355 Willow
Way, Suite 221, Concord, CA 94520.
Note 13 - POST EMPLOYMENT HEALTHCARE PLAN
Plan Description: Contra Costa County Housing Authority (CCCHA) provides a defined benefit
health care program to its retired employees and their dependents. Benefits include coverage in
the Kaiser health and dental plans administered by CCCHA. Benefit provisions are established
and amended through negotiations between CCCHA and the respective unions and employee
groups. CCCHA does not issue a publicly available financial report for the retiree health care
program.
Eligibility: CCCHA retirees are eligible for membership in the plans upon retirement (drawing
a pension from Contra Costa County Employee Retirement Association (CCCERA) or CalPers).
No provision currently exists for members in deferred retirement status.
Retirees and beneficiaries receiving benefits 66
Active plan members 76
Total 142
Funding Policy: The contribution requirements of program members and CCCHA are
determined by negotiations between CCCHA and the respective unions and employee groups.
40
Note 13 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
The required contribution is based on projected pay-as-you-go financing requirements. For fiscal
year 2014 CCCHA contributed $291,724 to the plan to cover the annual pay-as-you-go cost. The
percentage of the employers cost-sharing towards retiree medical plan premiums is currently at
35% of active premiums for retirees under the age of 65, and 74% of active premiums for retirees
over the age of 65. The members cover any premiums over the limits set by the Authority. The
monthly maximum limits vary from $345 to $980, based on the size of the retirees family.
Annual Other Post Employment Benefit (OPEB) Cost and Net OPEB Obligation: The
CCCHAs annual OPEB costs (expense) is calculated based on the annual required contribution
(ARC) of the employer, an amount actuarially determined in accordance with the parameters of
Governmental Accounting Standards Board (GASB) Statement 45. The ARC represents a level
of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty
years. Interest on net OPEB obligation is based on the actuarial interest rate of 4.5% and is
computed on the unfunded amount.
The most current actuarial report calculated these amounts for the fiscal year ended March 31,
2014. The following table shows the components of the CCCHAs annual OPEB cost for the past
three years, the amount actually contributed to the plan, and changes in the CCCHAs net OPEB
obligation.
3/31/2014 3/31/2013 3/31/2012
Present value of the Actuarial
Accrued Liability $ 5,365,137 $ 5,224,097 $ 5,105,240
Normal costs $ 190,278 $ 190,278 $ 215,582
Amortization of UAAL 221,311 215,493 210,590
Interest on net OPEB obligation
at beginning of year 96,656 90,572 82,426
ARC adjustment for current fiscal year (88,601) (83,024) (75,557)
Annual OPEB cost/Annual
Required Contribution 419,644 413,319 433,041
Contributions made (291,724) (278,133) (252,016)
Increase in net OPEB obligation 127,920 135,185 181,025
Net OPEB obligation - Beginning of year 2,147,907 2,012,722 1,831,697
Net OPEB obligation - End of year $ 2,275,827 $ 2,147,907 $ 2,012,722
41
Note 13 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
The CCCHAs annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation are as follows:
Pay-as-you-go Percentage of
Fiscal Year Annual Employer Annual OPEB Net OPEB
Ended OPEB Cost Contributions Costs Contributed Obligation
3/31/2011 $ 414,017 $ 247,213 59.71% $ 1,831,697
3/31/2012 $ 433,041 $ 252,016 58.2% $ 2,012,721
3/31/2013 $ 413,319 $ 278,133 67.3% $ 2,147,907
3/31/2014 $ 419,644 $ 291,724 69.52% $ 2,275,827
See page 52 for the Schedule of Funding Progress for OPEB. This schedule presents multi-year
trend information about whether the actuarial value of plan assets is increasing or decreasing over
time relative to the actuarial accrued liability for benefits.
Funding Status and Funding Progress: The most recent actuarial valuation dated April 1,
2012, reflects a accrued liability for benefits of $5.3 million, therefore, unfunded actuarial accrued
liability as a percentage of covered payroll is 93.00%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future. The schedule of funding progress, presented as
required supplementary information below, presents multi-year trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
liabilities for benefits.
Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes
are based on the substantive plan (the plan as understood by the employer and the plan members)
and include the types of benefits provided at the time of each valuation and the historical pattern
of sharing of benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the effects of short-
term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the
long-term perspective of the calculations.
The funding method used was the Entry Age Normal Cost method and assuming an open 30-year
amortization of the Unfunded Actuarial Liability using the level percent of payroll amortization
method. The valuation results are based on a 4.5% discount rate assuming that the CCCHA
continues pay-as-you-go funding of its post-employment benefit program.
42
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Note 14 - DEFERRED COMPENSATION PLAN
The Authority offers its employees a deferred compensation plan created in accordance with
Internal Revenue Code Section 457. The plan is administered by Mass Mutual Financial Group.
The plan, available to all regular employees, permits them to defer a portion of their salary until
future years. The deferred compensation is not available to employees until termination,
retirement, death or unforeseeable emergency. All amounts of compensation deferred under the
plan, all property and rights purchased with those amounts, and all income attributable to those
amounts, property, or rights are held in trust for the exclusive benefits of participants and their
beneficiaries.
A total of $2,604,857 is being held by Mass Mutual Financial Group on behalf of the Authoritys
employees. These funds are not recorded as assets of the Authority since they are held in trust for
the exclusive benefit of participants and their beneficiaries and are not subject to claims of the
Authoritys general creditors.
Note 15 - RELATED PARTIES
Casa Del Rio Housing - Blended Component Unit
Organization:
Casa Del Rio Housing is made up of HACCC Casa Del Rio, Inc (A California Nonprofit Public
Benefit Corporation) and CDR Senior Housing Associates (A California Limited Partnership).
HACCC Casa Del Rio, Inc. is the general partner of CDR Senior Housing Associates. The
officers and Board members of HACCC Casa Del Rio, Inc. are employees of the Authority. The
partnership was formed in 1994 to develop and operate an 82-unit affordable housing rental
complex located in Antioch, California, which is currently known as Casa Del Rio Senior
Housing.
Pursuant to the Indemnification Agreement dated July 1, 1994, by and among the Authority,
HACCC Casa Del Rio, Inc., CDR Senior Housing Associates, and MHIFED I Limited Partnership,
the Authority could possibly be liable for unpaid taxes, interest and penalties, cost to contest,
operating deficiency and expenses of enforcement as identified in the Agreement.
Pursuant to the Operating Deficit Guaranty Agreement dated July 1, 1994, by the Authority to and
for the benefit of MHIFED I Limited Partnership, the Authority can possibly be liable for operating
deficit and expenses of enforcement as identified in the Agreement.
Pursuant to the Indemnity Agreement, dated July 1, 1994, by the Authority to and for the benefit
of CDR Senior Housing Associates and MHIFED I Limited Partnership, the Authority can possibly
43
Note 15 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
be liable for any costs, expenses, and liabilities arising out of claims made by FPI (FPI Real Estate
Group, FPI Mortgage Co. and FPI Management, Inc.) under the Development Agreement.
Pursuant to the Demand Note dated June 30, 1994, from the Authority to HACCC Casa Del Rio,
Inc., the Authority can possibly be liable to HACCC Casa Del Rio, Inc. for $185,000. Although
the note is due upon demand the maturity date is December 31, 2059, the note will be called prior
to maturity only in the event that there are operating deficits and there is not sufficient cash
available to cover expenses. This note is recorded as both an interfund note receivable and note
payable (see Notes 5 and 7).
Pursuant to the Assignment and Assumption Agreement, the Authority can possibly be liable for
any and all claims relating to the Assignment and Assumption Agreement arising prior to the date
of the Assignment and Assumption Agreement.
Pursuant to the Department of Housing and Community Development Rental Housing
Construction Program First Amendment to the Regulatory Agreement (the Amended HCD
Agreement) dated November 14, 1994, by and among the Department of Housing and
Community Development, CDR Senior Housing Associates, and the Authority; the Authority can
possibly be liable for a sponsors operating guaranty to provide sufficient staff or equipment to the
general partner, as needed and remedies against sponsor for default under the Amended HCD
Agreement.
Since HACCC Casa Del Rio, Inc (CDR Inc) and CDR Senior Housing Associates (CDR
Associates) have the potential to impose a financial burden on the Authority, these entities have
been included in the Authoritys financial statements as a blended component unit. The fiscal year
end of these blended component units is December 31. Audits were conducted on these entities
as of December 31, 2013, by Linquist, Von Husen, & Joyce, LLP. The opinions were not
modified. These audit reports may be obtained by contacting the Authority at the address on page
11. The Authority reports the balances for these blended component units as of December 31,
2013, which differs from that of the Authoritys fiscal year end of March 31, 2014. The balances
at each fiscal year end do not differ materially. Modification were made to the audited financial
statements to conform with the reporting categories of the Authority. Specifically, net assets
reported in the audit were converted to the three categories of net position in conformity with the
Authoritys reporting practices.
44
Note 15 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Condensed Financial Statements:
The condensed financial statements for HACCC Casa Del Rio, Inc. and subsidiary as of and for
the year ended December 31, 2013, are as follows:
STATEMENT OF NET POSITION
Current assets $ 266,152
Restricted assets 495,354
Property and equipment 3,595,665
Other non-current assets 219,250
Total assets $ 4,576,421
Current liabilities $ 34,418
Payable from restricted assets 35,652
Long term liabilities 4,844,059
Total liabilities 4,914,129
Net investment in capital assets (980,438)
Restricted net position 459,702
Unrestricted net position 183,028
Total net position (337,708)
Total liabilities and net position $ 4,576,421
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
Rental revenue $ 517,830
Interest and other revenue 16,501
Total revenue 534,331
Administrative expenses 170,420
Utility expenses 78,565
Maintenance expenses 112,434
General expenses 45,999
Depreciation 200,967
Total expenses 608,385
Operating income (loss) (74,054)
Debt service interest (109,483)
Loss on disposal of equipment (6,427)
Amortization (3,140)
Change in net position (193,104)
Net position at the beginning of the year - 1/1/2013 (144,604)
Net position at the end of the year - 12/31/2013 $ (337,708)
STATEMENT OF CASH FLOWS
Net cash provided (used) by:
Operating activities $ 128,491
Noncapital financing activities (39,438)
Capital financing activities (51,831)
Investing activities 1,210
Net change in cash 38,432
Cash at the beginning of the year - 1/1/2013 675,188
Cash at the end of the year - 12/31/2013 $ 713,620
45
Note 15 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Interfund accounting issues:
Operating advances made by the Authority were $295,667 as of March 31, 2014. The interfund
balance as of December 31, 2013 was $290,799 and was reported as non-current related party
payable by the other auditors. The Statement of Net Position - Proprietary Funds, reported as of
March 31, 2014, shows $290,799 as both a noncurrent asset and as a noncurrent liability. The
difference of $4,868, due to the timing differences of the fiscal year ends, is shown as other
noncurrent assets.
During the fiscal year ended December 31, 2013, CDR Associates paid management fees to the
Authority in the amount of $52,452. Some of the Casa Del Rio Senior Housing tenants (3 as of
December 31, 2013) are also participants in the Authoritys Housing Choice Voucher or Shelter
Plus Care Programs. The rent for these tenants is subsidized by HUD through the Authority.
During the twelve months ended March 31, 2014, the Authoritys Housing Choice Voucher and
Shelter Plus Care Programs paid $8,556 and $3,711, respectively, in HAP payments to CDR
Associates.
Intrafund accounting issues:
The intrafund amounts which have been eliminated as of March 31, 2014, from the Casa Del Rio
Blended Component Unit Enterprise Fund for inclusion into the Fund Financial Statements
include:
$85,530 receivable/payable between CDR Inc and CDR Associates
$627,202 investment in partnership recorded as an liability of CDR Inc and net position of
CDR Associates.
$15,000 managements fees reported as revenue to CDR Inc and expenses of CDR Associates.
$13,912 interest revenue and donation to related party, both reported in CDR Inc.
Deficit Net Position
These blended component units combined, have a deficit net position $337,708.
DeAnza - Discretely Presented Component Units
Organization:
The discretely presented component units are DeAnza Housing Corporation (A California
Nonprofit Public Benefit Corporation) and DeAnza Gardens, L.P. (A California Limited
Partnership). The Authority is the General Partner and DeAnza Housing Corporation is the
managing general partner of DeAnza Gardens, L.P. The partnership was formed for the purpose
of acquisition, ownership, maintenance, and operation of 180 multi-family rental housing units and
46
Note 15 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
the provision of low-income housing through the construction, renovation, rehabilitation,
operation, and leasing of an affordable housing development located in Contra Costa County,
which is currently known as DeAnza Gardens.
DeAnza Housing Corporation (DeAnza Corp) and DeAnza Gardens L.P. (DeAnza L.P.) have been
reported as discretely presented component units of the Authority. The fiscal year end of these
discretely presented component units is December 31. Audits were conducted on these entities as
of December 31, 2013, by Linquist, Von Husen, & Joyce, LLP. The opinions were not modified.
These audit reports may be obtained by contacting the Authority at the address on page 11. The
Authority reports the balances for these discretely presented component units as of December 31,
2013, which differs from that of the Authoritys fiscal year end of March 31, 2014. The balances
at each fiscal year end do not differ materially. Modifications were made to the audited financial
statements to conform with the reporting categories of the Authority. Specifically, net assets
reported in the audit were converted to the three categories of net position in conformity with the
Authoritys reporting practices.
Inter-agency accounting issues:
The amounts shown as due to related parties consist of the following:
Primary Govt Component Unit
Assets Liabilities
3/31/2014 12/31/2013
Due to the Authority:
Short-term for operations $ 19,596 $ 18,338
Long-term:
Interest on note $ 390,107 $ 382,607
Land lease 780,000 762,000
Long-term for operations 517,415 509,624
$ 1,687,522 $ 1,654,231
Due to Boston Capital - long-term $ 26,503
The Authoritys Housing Choice Voucher Enterprise Fund loaned $1 million to DeAnza Gardens
L.P. The note bears simple interest at the rate 3% per annum, payments are due commencing on
October 1, 2008, but are payable only to the extent of the previous years excess/distributable cash,
and is due June 2043. Interest of $30,000 was expensed during the fiscal year ended December
31, 2013. No interest has been paid to the Authority. The Authoritys Housing Choice Voucher
Enterprise Fund reported $390,107 due from related parties and revenue of $30,000. See Note 5.
DeAnza Gardens was built on land owned by the Authoritys Public Housing Program Enterprise
Fund. Based on an agreement between DeAnza Gardens L.P. and the Authority, the land is leased
for $72,000 per year, payable from excess/distributable cash. Unpaid lease amounts are carried
47
Note 15 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
forward without interest. The Authoritys Public Housing Program Enterprise Fund reported
$780,000 due from related party for this lease, with $72,000 reported in the current fiscal year as
fees charged to a related party (nonoperating revenue).
During the fiscal year ended December 31, 2013, DeAnza Gardens L.P. paid management fees to
the Authority in the amount of $12,960. Nonoperating revenue of $12,960 is reported in the
Authoritys Statement of Revenues, Expenses, and Changes in Fund Net Position for the year
ended March 31, 2014. Some of the DeAnza Gardens tenants (7 as of December 2013) are also
clients of the Authoritys Housing Choice Voucher or Shelter Plus Care Program. The rent for
these tenants is subsidized by HUD through the Authority. During the twelve months ended March
31, 2014, the Authoritys Housing Choice Voucher Program paid $59,977 in HAP payments, while
the Shelter Plus Care Program paid $7,381 in HAP payments to DeAnza Gardens L.P.
Intrafund accounting issues:
The intrafund amounts which have been eliminated when reporting these entities in the Statement
of Net Position and Statement of Revenues, Expenses, and Changes in Fund Net Position are:
$1,000,000 long-term note held by DeAnza Corp from DeAnza L.P.
$714,280 of interest on the long-term note held by DeAnza Corp from DeAnza L.P.
$182,396 receivable recognized by DeAnza Corp from DeAnza L.P.
$6,000 receivable recognized by DeAnza L.P from DeAnza Corp.
$557 deficit investment in partnership reported by DeAnza Corp is offset by net position in
DeAnza L.P.
$50,684 managements fees reported as revenue to DeAnza Corp and expenses of DeAnza L.P.
$68,000 interest revenue on the long-term debt is recognized by DeAnza Corp and expensed
by DeAnza L.P.
Cash and investments:
Unrestricted Restricted
Demand deposits (FDIC insured up to $250,000) $ 40,627 $ 22,197
Cash held by investment companies - 9,066
Investments - 992,870
Held by mortgagor - 441,000
Cash on hand 500 -
$ 41,127 $ 1,465,133
The demand deposits are with WestAmerica bank. The total on deposit did not exceed the amount
covered by FDIC as of December 31, 2013. FDIC coverage is $250,000 for 2013. Cash and
investments of $1,001,936 are held by Cantella & Co., Inc. The investments consist of five
marketable certificates of deposit with face values ranging from $108,000 to $240,000.
48
Note 15 (continued)
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Restricted cash consists of replacement and operating reserves required by the lender and reported
as restricted net assets totaling $1,442,936. Cash has also been restricted for security deposits in
the amount of $22,197. The excess of the security deposit liability of $156,666, over the cash
balance represents cash held as an investment in the operating reserve account.
Capital assets:
DeAnza Gardens was completed and placed into service during the fiscal year ended December
31, 2004. DeAnza Gardens L.P.s property and equipment are summarized as follows:
12/31/2013 12/31/2012
Building and improvements $ 29,446,662 $ 29,446,662
Land improvements 1,150,712 1,150,712
Off-site improvements 208,448 208,448
On-site improvements 4,028,709 4,028,709
Furniture and fixtures 488,321 477,933
35,322,852 35,312,464
Less accumulated depreciation (9,640,774) (8,629,577)
$ 25,682,078 $ 26,682,887
Property and equipment are being depreciated on the straight-line method over the estimated useful
life of the assets. The useful lives of the assets are estimated to be forty years for buildings and
off-site improvements, fifteen years for on-site improvements and seven years for furniture and
fixtures.
Long-term debt:
Permanent financing was obtained for the costs of the DeAnza Gardens construction during 2005.
The note is held by California Community Reinvestment Corporation. The original amount of the
loan was $10,115,373. This loan requires monthly payments of $64,603, beginning November 1,
2005, earns interest at a rate of 6.6% per annum, and is due in full October 2023. Activity on the
loan is as follows:
Balance Balance S/T L/T Interest
12/31/2012 Payments 12/31/2013 Portion Portion Payable
$ 9,132,587 $ (177,796) $ 8,954,791 $ 189,982 $ 8,764,809 $ 49,251
Interest expense for the fiscal year ended December 31, 2013 $ 596,458
Deficit Unrestricted Net Position
While DeAnza Gardens has a positive net position in total, its unrestricted net position is in deficit
as of December 31, 2013. The majority of the entitys assets are either invested in capital assets
or restricted, leaving the unrestricted net position in deficit by $2,667,290. This deficit is an
increase over the prior years deficit of $2,537,832.
49
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Note 16 - CONTINGENT LIABILITIES
A. Grants
The Authority has received funds from various federal, state and local grant programs. It is
possible that at some future date it may be determined that the Authority was not in
compliance with applicable grant requirements. The amount, if any, of expenditures which
may be disallowed by the granting agencies cannot be determined at this time although the
Authority does not expect such disallowed amounts, if any, to materially affect the financial
statements.
B. Line of Credit
On October 24, 2013, the Authority renewed an agreement with WestAmerica Bank for a $1
million line of credit. The interest rate is variable, but will not exceed the amount allowed
by law. The initial rate for this line of credit was 4.25%. It is the Authoritys intention to use
this line of credit to cover any shortage in cash flow, if any, that may arise over the term of
the loan.
C. Litigation
The Authority is involved in various matters of litigation. It is the Authoritys opinion that
these matters of litigation will not have a material effect, if any, on the financial position of
the Authority.
Note 17 - ECONOMIC DEPENDENCE
The Authority receives a significant portion of its revenue from the U.S. Department of Housing
and Urban Development. See the Schedule of Expenditures of Federal Awards, shown as
supplemental information, for the HUD programs that the Authority administers. These programs
are currently on-going. However, they are dependent on the Federal budgeting processes, and
therefore, funding will vary from year to year.
50
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
MARCH 31, 2014
(Continued)
Note 18 - RISK MANAGEMENT
Workers Compensation Insurance: The Authority participates in a joint venture under a joint
powers agreement (JPA) with the California Housing Workers Compensation Authority
(CHWCA). CHWCA was formed to provide workers compensation insurance coverage for
member housing authorities. At December 31, 2013, there were thirty-three members. The
relationship between the Authority and CHWCA is such that CHWCA is not a component unit of
the Authority for financial reporting purposes.
Condensed CHWCA audited financial information for the year ended December 31, 2012 and
2013 are as follows:
December 31, 2013 December 31, 2012
Total assets $ 23,971,319 $ 23,541,211
Total liabilities (16,767,281) (16,612,551)
Net position $ 7,204,038 $ 6,928,660
Total revenues $ 4,347,888 $ 4,386,310
Total expenses (4,072,510) (6,513,868)
Net change in net position $ 275,378 $ (2,127,558)
CHWCA had no long-term debt outstanding at December 31, 2013. The Authoritys share of year
end assets, liabilities, or retained earnings has not been calculated. The Authoritys annual
premium is based on covered payroll. Premiums paid for the calendar year ended December 31,
2013 were $192,753. CHWCA issues a separate comprehensive annual financial report. Copies
of this report may be obtained by contacting Bickmore Risk Services, 6371 Auburn Boulevard,
Suite B, Citrus Heights, California, 95621.
Property and Liability Insurance: The Authority carries insurance for its various operations with
the Housing Authority Insurance Services (HAI), the Housing Authority Risk Retention Group
(HARRG), and Employment Risk Management Authority (ERMA). The property insurance limits
vary by property covered, with a deductible of $25,000 per occurrence. The commercial liability
limit of coverage is $5,000,000 aggregate for the policy year. The deductible is $25,000 per
occurrence. The liability insurance covers bodily injury and property damage liability ($5 million
limit), mold liability ($250,000 limit), and employee benefits administration liability ($1 million
limit, with a deductible of $1,000 per employee). The automobile insurance limits are $4 million
for liability, $1 million for non-owned hired autos, and $1 million for uninsured motorists.
Employment liability insurance coverage through ERMA is $1 million with a $50,000 deductible
per occurrence. Premiums paid for this coverage were approximately $290,000 for the policy year
beginning June 1, 2013.
51
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
REQUIRED SUPPLEMENTARY INFORMATION
AS OF MARCH 31, 2014
Schedule of Funding Progress for OPEB
Unfunded UAAL as a
Actuarial Actuarial Actuarial Actuarial Percentage of
Valuation Value of Accrued Accrued Funded Covered Covered
Date Assets Liability Liability Status Payroll Payroll
3/31/2008 $ - $ 16,457,000 $ 16,457,000 0% $ 5,279,413 311.72%
3/31/2009 $ - $ 8,236,801 $ 8,236,801 0% $ 5,345,205 154.10%
3/31/2010 $ - $ 8,236,801 $ 8,236,801 0% $ 5,133,982 160.44%
3/31/2011 $ - $ 4,931,685 $ 4,931,685 0% $ 5,832,771 84.55%
3/31/2012 $ - $ 5,105,240 $ 5,105,240 0% $ 5,057,120 100.95%
3/31/2013 $ - $ 5,224,097 $ 5,224,097 0% $ 5,352,272 97.61%
3/31/2014 $ - $ 5,365,137 $ 5,365,137 0% $ 5,768,742 93.00%
52
SUPPLEMENTARY INFORMATION
53
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED MARCH 31, 2014
Federal Grantor CFDA Number Expenditures
Department of Housing and
Urban Development (HUD):
Direct Programs:
Shelter Plus Care 14.238 $ 3,010,695
Public and Indian Housing 14.850 4,702,719
Lower Income Housing Assistance Program
Section 8 Moderate Rehabilitation 14.856 239,478
Housing Choice Voucher Program 14.871 78,500,134 *
Public Housing - Capital Fund Program 14.872 1,550,550
Subtotal federal expenditures, Dept of HUD 88,003,576
Total expenditures of federal awards $ 88,003,576
* Major program.
The accompanying Independent Auditors Report and notes are an integral part of this schedule.
54
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED MARCH 31, 2014
1. The schedule of expenditures of federal awards includes the federal grant activity of the Housing
Authority of the County of Contra Costa, California, and is presented on the accrual basis of
accounting. The information in this schedule is presented in accordance with the requirements of OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit Organization . Therefore, some
amounts presented in this schedule may differ from amounts presented in, or used in the preparation
of, the basic financial statements.
2. Expenditures are reported as follows:
Shelter Plus Care Program - expenditures reported agree with the HUD grants earned for the year.
Public and Indian Housing Program - expenditures reported consist only of the operating subsidy
amount received from HUD for the fiscal year ended March 31, 2014.
Moderate Rehabilitation Program - expenditures reported consist of operating expenses to the
extent that federal grants were received towards these expenditures and/or that prior year funding is
available for expenditure. These amounts differed from the actual annual contributions received from
HUD.
Housing Choice Voucher Program - expenditures reported consist of operating expenses, including
capital transactions and omitting depreciation, to the extent that federal grants were received towards
these expenditures and/or that prior year funding was available for expenditure. These amounts
differed from the actual annual contributions received from HUD. The expenditures were determined
as follows:
HAP Admin Total
Operating expenses $ 73,469,920 $ 6,023,381 $ 79,493,301
Adjustments:
Depreciation - (192,150) (192,150)
HAP reimbursed by
other housing authorities (875,752) - (875,752)
Capital additions - 2,561 2,561
Debt retired - 72,174 72,174
Total Expenditures of Federal Funds $ 72,594,168 $ 5,905,966 $ 78,500,134
Federal grants received $ 70,119,221 $ 5,392,265 $ 75,511,486
Public Housing Capital Fund Program - expenditures reported agree with the revenue and actual
expenditures (expenses, plus capital expenditures, less depreciation expense) for the current fiscal year.
55
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
FINANCIAL DATA SCHEDULE (CA011)
BALANCE SHEET
AS OF MARCH 31, 2014
Public Housing
(including
Capital Fund
Housing Choice
Voucher
Discretely
Presented
Component Unit -
De Anza
Blended
Component Unit -
Casa Del Rio
Rental Rehab
Loan
CFDA number 14.850/14.872 14.871
$ 337,028 $ 1,377,173 $ 41,127 $ 110,946 $ 67,347
$ 33,410 $ 1,442,936 $ 459,703
$ 320,962 $ 22,197 $ 35,651
$ 657,990 $ 1,410,583 $ 1,506,260 $ 606,300 $ 67,347
$ 121,330
$ 10,139 $ 30,008
$ 118,341 $ 24,006 $ 17,973
$ (46,184) $ (6,160) $ (7,576)
$ (7,131) $ (49,636)
$ 42,093
$ 3,041 $ 5,616 $ 978 $ 7,563
$ 206,667 $ 5,616 $ 41,701 $ 10,397 $ 20
$ 1,299,506 $ 1,143,052 $ 107,320 $ 147,309
$ 2,989,129
$ 80,773 $ 2,224 $ 22,146 $ 37,489
$ 2,244,936 $ 5,550,604 $ 1,570,107 $ 761,506 $ 214,676
$ 1,026,405 $ 330,791 $ 1,150,712 $ 468,797
$ 86,781,987 $ 3,168,053 $ 29,655,110 $ 6,405,729
$ 1,318,437 $ 621,020 $ 488,321 $ 178,405
$ (80,399,900) $ (1,577,422) $ (9,640,774) $ (3,457,266)
$ 798,102
$ 4,028,709
$ 9,525,031 $ 2,542,442 $ 25,682,078 $ 3,595,665 $ -
$ 1,000,000 $ 185,000 $ 11,937
$ 806,038 $ 390,107 $ 119,553 $ 34,250 $ 3,364
$ 10,331,069 $ 3,932,549 $ 25,801,631 $ 3,814,915 $ 15,301
$ 12,576,005 $ 9,483,153 $ 27,371,738 $ 4,576,421 $ 229,977
$ - $ - $ - $ - $ -
$ 12,576,005 $ 9,483,153 $ 27,371,738 $ 4,576,421 $ 229,977
111 Cash - Unrestricted
100 Total Cash
114 Cash - Tenant Security Deposits
113 Cash - Other Restricted
126 Accounts Receivable - Tenants
126.1 Allowance for Doubtful Accounts -Tenants
124 Accounts Receivable - Other Government
125 Accounts Receivable - Miscellaneous
121 Accounts Receivable - PHA Projects
122 Accounts Receivable - HUD Other Projects
129 Accrued Interest Receivable
120 Total Receivables, Net of Allowances for Doubtful Accounts
126.2 Allowance for Doubtful Accounts - Other
127 Notes, Loans, & Mortgages Receivable - Current
142 Prepaid Expenses and Other Assets
132 Investments - Restricted
131 Investments - Unrestricted
161 Land
150 Total Current Assets
144 Inter Program Due From
166 Accumulated Depreciation
167 Construction in Progress
164 Furniture, Equipment & Machinery - Administration
162 Buildings
171 Notes, Loans and Mortgages Receivable - Non-Current
168 Infrastructure
160 Total Capital Assets, Net of Accumulated Depreciation
190 Total Assets
180 Total Non-Current Assets
174 Other Assets
290 Total Assets and Deferred Outflow of Resources
200 Deferred Outflow of Resources
56
Other State and
Local
Community
Development
Block Grants
Shelter Plus
Care
Section 8
Moderate
Rehab
Central Office
Cost Center Subtotal Eliminations Total
14.218 14.238 14.856
$ 648 $ 31,897 $ 107,653 $ 71,539 $ 396,906 $ 2,542,264 $ 2,542,264
$ 1,936,049 $ 1,936,049
$ 378,810 $ 378,810
$ 648 $ 31,897 $ 107,653 $ 71,539 $ 396,906 $ 4,857,123 $ - $ 4,857,123
$ 15,453 $ 31,188 $ 167,971 $ 167,971
$ - $ -
$ 19,596 $ 59,743 $ 59,743
$ 160,320 $ 160,320
$ (59,920) $ (59,920)
$ (56,767) $ (56,767)
$ 10,990 $ 53,083 $ 53,083
$ 2,918 $ 20,116 $ 20,116
$ 33,504 $ - $ 15,453 $ - $ 31,188 $ 344,546 $ - $ 344,546
$ 1,478,821 $ 159,159 $ 4,335,167 $ 4,335,167
$ 2,989,129 $ 2,989,129
$ 45,131 $ 1,500 $ 975 $ 72,503 $ 262,741 $ 262,741
$ 84,744 $ 84,744 $ (84,744) $ -
$ 1,558,104 $ 33,397 $ 123,106 $ 72,514 $ 744,500 $ 12,873,450 $ (84,744) $ 12,788,706
$ 2,976,705 $ 2,976,705
$ 74,415 $ 126,085,294 $ 126,085,294
$ 699 $ 3,937 $ 2,412 $ 168,779 $ 142,387 $ 2,924,397 $ 2,924,397
$ (75,114) $ (3,467) $ (2,142) $ (168,779) $ (121,291) $ (95,446,155) $ (95,446,155)
$ 798,102 $ 798,102
$ 4,028,709 $ 4,028,709
$ - $ 470 $ 270 $ - $ 21,096 $ 41,367,052 $ - $ 41,367,052
$ 420,444 $ 1,617,381 $ (185,000) $ 1,432,381
$ 813,082 $ 100,588 $ 2,266,982 $ (290,799) $ 1,976,183
$ 813,082 $ 521,502 $ 270 $ - $ 21,096 $ 45,251,415 $ (475,799) $ 44,775,616
$ 2,371,186 $ 554,899 $ 123,376 $ 72,514 $ 765,596 $ 58,124,865 $ (560,543) $ 57,564,322
$ - $ - $ - $ - $ - $ - $ - $ -
$ 2,371,186 $ 554,899 $ 123,376 $ 72,514 $ 765,596 $ 58,124,865 $ (560,543) $ 57,564,322
The accompanying Independent Auditors' Report and Notes are an integral part of this schedule.
57
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
FINANCIAL DATA SCHEDULE (CA011)
BALANCE SHEET
AS OF MARCH 31, 2014
(continued)
Public Housing
(including
Capital Fund
Housing Choice
Voucher
Discretely
Presented
Component Unit -
De Anza
Blended
Component Unit -
Casa Del Rio
Rental Rehab
Loan
CFDA number 14.850/14.872 14.871
$ 147,174 $ 180,856 $ 51,710 $ 11,525 $ 13
$ 75,182 $ 73,855 $ 11
$ 108,037 $ 96,661
$ 49,251
$ 29,620
$ 67,559
$ 320,962 $ 156,666 $ 35,652
$ 12,881 $ 12,093 $ 6,565 $ 50 $ 214,652
$ 153,854 $ 76,135 $ 189,982 $ 22,843
$ 25,000
$ 124,075 $ 18,339
$ 84,744
$ 1,119,468 $ 469,220 $ 472,513 $ 70,070 $ 214,676
$ 242,265 $ 2,388,350 $ 8,764,809 $ 2,985,731
$ 1,000,000
$ 447,067 $ 1,680,734 $ 1,858,328
$ 25,231 $ 18,677
$ 15,301
$ 1,101,801 $ 809,536
$ 1,369,297 $ 3,663,630 $ 11,445,543 $ 4,844,059 $ 15,301
$ 2,488,765 $ 4,132,850 $ 11,918,056 $ 4,914,129 $ 229,977
$ - $ - $ - $ - $ -
$ 9,128,912 $ 77,957 $ 16,678,036 $ (980,438)
$ 2,692,898 $ 1,442,936 $ 459,702
$ 958,328 $ 2,579,448 $ (2,667,290) $ 183,028
$ 10,087,240 $ 5,350,303 $ 15,453,682 $ (337,708) $ -
$ 12,576,005 $ 9,483,153 $ 27,371,738 $ 4,576,421 $ 229,977
312 Accounts Payable <= 90 Days
325 Accrued Interest Payable
331 Accounts Payable - HUD PHA Programs
322 Accrued Compensated Absences - Current Portion
321 Accrued Wage/Payroll Taxes Payable
343 Current Portion of Long-term Debt - Capital Projects
344 Current Portion of Long-term Debt - Operating Borrowings
341 Tenant Security Deposits
342 Unearned Revenue
332 Account Payable - PHA Projects
333 Accounts Payable - Other Government
310 Total Current Liabilities
347 Inter Program - Due To
348 Loan Liability - Current
345 Other Current Liabilities
346 Accrued Liabilities - Other
355 Loan Liability - Non Current
353 Non-current Liabilities - Other
354 Accrued Compensated Absences - Non Current
351 Long-term Debt, Net of Current - Capital Projects
352 Long-term Debt, Net of Current - Operating Borrowings
400 Deferred Inflow of Resources
300 Total Liabilities
357 Accrued Pension and OPEB Liabilities
350 Total Non-Current Liabilities
600 Total Liab., Def. Inflow of Res., and Equity - Net Assets / Position
512.4 Unrestricted Net Position
513 Total Equity - Net Assets / Position
511.4 Restricted Net Position
508.4 Net Investment in Capital Assets
58
Other State and
Local
Community
Development
Block Grants
Shelter Plus
Care
Section 8
Moderate
Rehab
Central Office
Cost Center Subtotal Eliminations Total
14.218 14.238 14.856
$ 39 $ 426 $ 212 $ 277 $ 22,127 $ 414,359 $ 414,359
$ 7,228 $ 1,145 $ 3,528 $ 55,354 $ 216,303 $ 216,303
$ 1,991 $ 2,792 $ 1,740 $ 96,226 $ 307,447 $ 307,447
$ 49,251 $ 49,251
$ 17,576 $ 47,196 $ 47,196
$ - $ -
$ 8,493 $ 77,477 $ 153,529 $ 153,529
$ 513,280 $ 513,280
$ 246,241 $ 246,241
$ 442,814 $ 442,814
$ - $ -
$ 25,000 $ 25,000
$ 142,414 $ 142,414
$ 84,744 $ (84,744) $ -
$ - $ -
$ 7,267 $ 12,055 $ 84,009 $ 19,593 $ 173,707 $ 2,642,578 $ (84,744) $ 2,557,834
$ 14,381,155 $ 14,381,155
$ 185,000 $ 1,185,000 $ (185,000) $ 1,000,000
$ 3,986,129 $ (290,799) $ 3,695,330
$ 315 $ 506 $ 204 $ 15,228 $ 60,161 $ 60,161
$ 521,031 $ 536,332 $ 536,332
$ 36,201 $ 20,606 $ 32,099 $ 1,979 $ 273,605 $ 2,275,827 $ 2,275,827
$ 221,201 $ 541,952 $ 32,605 $ 2,183 $ 288,833 $ 22,424,604 $ (475,799) $ 21,948,805
$ 228,468 $ 554,007 $ 116,614 $ 21,776 $ 462,540 $ 25,067,182 $ (560,543) $ 24,506,639
$ - $ - $ - $ - $ - $ - $ -
$ 470 $ 270 $ 21,096 $ 24,926,303 $ 24,926,303
$ 4,595,536 $ 4,595,536
$ 2,142,718 $ 422 $ 6,492 $ 50,738 $ 281,960 $ 3,535,844 $ 3,535,844
$ 2,142,718 $ 892 $ 6,762 $ 50,738 $ 303,056 $ 33,057,683 $ - $ 33,057,683
$ 2,371,186 $ 554,899 $ 123,376 $ 72,514 $ 765,596 $ 58,124,865 $ (560,543) $ 57,564,322
The accompanying Independent Auditors' Report and Notes are an integral part of this schedule.
59
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
FINANCIAL DATA SCHEDULE (CA011)
PROFIT AND LOSS STATEMENT
FOR THE YEAR ENDED MARCH 31, 2014
Public Housing
(including
Capital Fund)
Housing Choice
Vouchers
Discretely
Presented
Component Unit -
De Anza
Blended
Component Unit -
Casa Del Rio
Rental Rehab
Loan
CFDA number 14.850/14.872 14.871
$ 3,139,728 $ 1,858,414 $ 517,830
$ 68,753 $ 157,587 $ 5,780
$ 3,208,481 $ - $ 2,016,001 $ 523,610 $ -
$ 5,498,341 $ 75,511,486
$ 754,928
$ - $ - $ - $ - $ -
$ 2,078 $ 16,306 $ 1,524
$ 3,806
$ 243,832 $ 1,083,273 $ 9,511 $ 77,371
$ (6,427)
$ 870 $ 1,210
$ 9,707,660 $ 76,611,935 $ 2,016,001 $ 527,904 $ 82,701
$ 868,181 $ 1,946,771 $ 150,874 $ 50,063 $ 3,643
$ 20,394 $ 14,141 $ 11,359 $ 9,250
$ 1,043,628 $ 905,388 $ 52,452
$ 94,047 $ 565,867
$ 485,038 $ 910,378 $ 53,301 $ 14,615 $ 273
$ 305,795 $ 650,957 $ 177,263 $ 44,040 $ 25
$ 147,821 $ 131,886 $ 20,798
$ 2,990 $ 152 $ 3,124
$ 15,787 $ 30,010
$ 2,983,681 $ 5,155,550 $ 416,719 $ 170,420 $ 3,941
$ 141,240
$ 126,593 $ 71,035
$ 5,834
$ 21,721 $ 40,457
$ 46,485
$ 200,633 $ 111,492 $ - $ - $ -
$ 582,123 $ 5,856 $ 126,401 $ 11,700
$ 470,338 $ 27,722 $ 17,092 $ 31,156
$ 124,608 $ 2,072 $ 6,612 $ 2,687
$ 454,638 $ 2,447 $ 72,424 $ 33,022
$ 20,852
$ 1,631,707 $ 38,097 $ 243,381 $ 78,565 $ -
$ 1,001,752 $ 701 $ 71,681 $ 38,215
$ 487,046 $ 10,575 $ 94,926 $ 20,041
$ 1,047,360 $ 48,003 $ 164,059 $ 49,378
$ 603,133 $ 55 $ 23,844
$ 3,139,291 $ 59,334 $ 354,510 $ 107,634 $ -
94500 Employee Benefit Contributions - Ordinary Maintenance
94000 Total Maintenance
94200 Ordinary Maintenance and Operations - Materials and Other
94300 Ordinary Maintenance and Operations Contracts
94100 Ordinary Maintenance and Operations - Labor
93800 Other Utilities Expense
93000 Total Utilities
93600 Sewer
93200 Electricity
93300 Gas
93100 Water
92400 Tenant Services - Other
92500 Total Tenant Services
92200 Relocation Costs
92300 Employee Benefit Contributions - Tenant Services
92000 Asset Management Fee
92100 Tenant Services - Salaries
91000 Total Operating - Administrative
91900 Other
91700 Legal Expense
91800 Travel
91500 Employee Benefit contributions - Administrative
91600 Office Expenses
91310 Book-keeping Fee
91200 Auditing Fees
91300 Management Fee
91100 Administrative Salaries
72000 Investment Income - Restricted
70000 Total Revenue
71500 Other Revenue
71600 Gain or Loss on Sale of Capital Assets
71200 Mortgage Interest Income
71100 Investment Income - Unrestricted
70700 Total Fee Revenue
70720 Asset Management Fee
70730 Book Keeping Fee
70610 Capital Grants
70710 Management Fee
70600 HUD PHA Operating Grants
70400 Tenant Revenue - Other
70500 Total Tenant Revenue
70300 Net Tenant Rental Revenue
60
Other State and
Local
Community
Development
Block Grants
Shelter Plus
Care
Section 8
Moderate Rehab
Central Office
Cost Center Subtotal Eliminations Total
14.218 14.238 14.856
$ 5,515,972 $ (12,267) $ 5,503,705
$ 232,120 $ 232,120
$ - $ - $ - $ - $ - $ 5,748,092 $ (12,267) $ 5,735,825
$ 3,010,695 $ 180,904 $ 84,201,426 $ 84,201,426
$ 754,928 $ 754,928
$ 1,949,016 $ 1,949,016 $ (1,949,016) $ -
$ 141,240 $ 141,240 $ (141,240) $ -
$ 659,914 $ 659,914 $ (659,914) $ -
$ - $ - $ - $ - $ 2,750,170 $ 2,750,170 $ (2,750,170) $ -
$ 56 $ 19,964 $ 19,964
$ 31,346 $ 35,152 $ 35,152
$ 58,996 $ 13,337 $ 16,901 $ 1,503,221 $ (52,452) $ 1,450,769
$ (6,427) $ (6,427)
$ 2,080 $ 2,080
$ 58,996 $ 44,683 $ 3,010,695 $ 180,960 $ 2,767,071 $ 95,008,606 $ (2,814,889) $ 92,193,717
$ 28,280 $ 35,922 $ 49,297 $ 1,325,733 $ 4,458,764 $ 4,458,764
$ 466 $ 1,000 $ 2,000 $ 58,610 $ 58,610
$ 2,001,468 $ (2,001,468) $ -
$ 659,914 $ (659,914) $ -
$ 46,630 $ 56,282 $ 37,949 $ 34,419 $ 830,521 $ 2,469,406 $ 2,469,406
$ 302 $ 5,536 $ 18,061 $ 2,947 $ 285,856 $ 1,490,782 $ 1,490,782
$ 835 $ 521 $ 54,593 $ 356,454 $ 356,454
$ 22 $ 36 $ 12 $ 1,020 $ 7,356 $ 7,356
$ 554 $ 360 $ 26,797 $ 73,508 $ 73,508
$ 46,932 $ 91,975 $ 91,968 $ 88,556 $ 2,526,520 $ 11,576,262 $ (2,661,382) $ 8,914,880
$ 141,240 $ (141,240) $ -
$ 197,628 $ 197,628
$ 5,834 $ 5,834
$ 62,178 $ 62,178
$ 500 $ 98,501 $ 145,486 $ 145,486
$ 500 $ - $ 98,501 $ - $ - $ 411,126 $ 411,126
$ 726,080 $ 726,080
$ 457 $ 297 $ 22,108 $ 569,170 $ 569,170
$ 64 $ 42 $ 3,104 $ 139,189 $ 139,189
$ 562,531 $ 562,531
$ 20,852 $ 20,852
$ - $ 521 $ - $ 339 $ 25,212 $ 2,017,822 $ - $ 2,017,822
$ 1,112,349 $ 1,112,349
$ 3,874 $ 353 $ 229 $ 20,231 $ 637,275 $ 637,275
$ 244 $ 167 $ 11,805 $ 1,321,016 $ 1,321,016
$ 627,032 $ 627,032
$ 3,874 $ 597 $ - $ 396 $ 32,036 $ 3,697,672 $ - $ 3,697,672
The accompanying Independent Auditors' Report and Notes are an integral part of this statement.
61
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
FINANCIAL DATA SCHEDULE (CA011)
PROFIT AND LOSS STATEMENT
FOR THE YEAR ENDED MARCH 31, 2014
(continued)
Public Housing
(including
Capital Fund)
Housing Choice
Vouchers
Discretely
Presented
Component Unit -
De Anza
Blended
Component Unit -
Casa Del Rio
Rental Rehab
Loan
CFDA number 14.850/14.872 14.871
$ 578,404 $ 65,032
$ 54,411 $ 14,601 $ 8,165 $ 4,800
$ 632,815 $ 14,601 $ 73,197 $ 4,800 $ -
$ 190,607 $ 8,732 $ 54,596 $ 38,045
$ 1,895 $ 58
$ 107,743 $ 33,708 $ 8,773
$ 300,245 $ 42,498 $ 63,369 $ 38,045 $ -
$ 8,689 $ 144,847 $ 72,000
$ 187,563 $ 131,499
$ 88,870 $ 18,293 $ 2,254
$ 124,337 $ 7,884 $ 5,700
$ 409,459 $ 276,346 $ 98,177 $ 7,954 $ -
$ 20,601 $ 133,311 $ 626,458 $ 109,483
$ 30,063 $ 3,140
$ 20,601 $ 133,311 $ 656,521 $ 112,623 $ -
$ 9,459,672 $ 5,831,229 $ 1,905,874 $ 520,041 $ 3,941
$ 247,988 $ 70,780,706 $ 110,127 $ 7,863 $ 78,760
$ 25,000
$ 72,594,168
$ 875,751
$ 1,989,691 $ 192,150 $ 1,011,197 $ 200,967
$ 11,474,363 $ 79,493,298 $ 2,917,071 $ 721,008 $ 3,941
$ (78,760)
$ 758,449
$ (758,449)
$ - $ - $ - $ - $ (78,760)
$ (1,766,703) $ (2,881,363) $ (901,070) $ (193,104) $ -
$ 153,854 $ 76,135 $ 189,982 $ 22,843 $ -
$ 11,853,943 $ 8,231,666 $ 16,354,752 $ - $ -
$ - $ (144,604)
$ 2,657,405
$ 2,692,898
13929 76632 2160 960
12539 75449 2140 946
$ 323,037
$ 754,928 11620 Building Purchases
11210 Number of Unit Months Leased
11270 Excess Cash
11180 Housing Assistance Payments Equity
11190 Unit Months Available
11170 Administrative Fee Equity
11040 Prior Period Adjustments, Equity Transfers, Correction of Errors
11020 Required Annual Debt Principal Payments
11030 Beginning Equity
10000 Excess (Deficiency) of Total Rev Over (Under) Total Exp
10100 Total Other financing Sources (Uses)
10091 Inter Project Excess Cash Transfer In
10092 Inter Project Excess Cash Transfer Out
10010 Operating Transfer In
10020 Operating transfer Out
90000 Total Expenses
97350 HAP Portability-In
97400 Depreciation Expense
97200 Casualty Losses - Non-capitalized
97300 Housing Assistance Payments
97000 Excess of Operating Revenue over Operating Expenses
96900 Total Operating Expenses
96730 Amortization of Bond Issue Costs
96700 Total Interest Expense and Amortization Cost
96710 Interest of Mortgage (or Bonds) Payable
96000 Total Other General Expenses
96400 Bad debt - Tenant Rents
96210 Compensated Absences
96300 Payments in Lieu of Taxes
96200 Other General Expenses
96100 Total insurance Premiums
96120 Liability Insurance
96130 Workmen's Compensation
96110 Property Insurance
95000 Total Protective Services
95300 Protective Services - Other
95100 Protective Services - Labor
62
Other State and
Local
Community
Development
Block Grants
Shelter Plus
Care
Section 8
Moderate Rehab
Central Office
Cost Center Subtotal Eliminations Total
14.218 14.238 14.856
$ 643,436 $ 643,436
$ 137 $ 89 $ 6,627 $ 88,830 $ 88,830
$ - $ 137 $ - $ 89 $ 6,627 $ 732,266 $ - $ 732,266
$ 185 $ 101 $ 9,868 $ 302,134 $ 302,134
$ 1,589 $ 830 $ 77,908 $ 82,280 $ 82,280
$ 1,234 $ 1,558 $ 777 $ 19,207 $ 173,000 $ 173,000
$ - $ 3,008 $ 1,558 $ 1,708 $ 106,983 $ 557,414 $ - $ 557,414
$ 1,404 $ 24,263 $ 30 $ 6,930 $ 258,163 $ 258,163
$ 2,961 $ 5,289 $ 4,627 $ 143,161 $ 475,100 $ 475,100
$ 109,417 $ 109,417
$ 137,921 $ 137,921
$ 1,404 $ 27,224 $ 5,289 $ 4,657 $ 150,091 $ 980,601 $ - $ 980,601
$ 889,853 $ 889,853
$ 33,203 $ 33,203
$ - $ - $ - $ - $ - $ 923,056 $ - $ 923,056
$ 52,710 $ 123,462 $ 197,316 $ 95,745 $ 2,847,469 $ 21,037,459 $ (2,802,622) $ 18,234,837
$ 6,286 $ (78,779) $ 2,813,379 $ 85,215 $ (80,398) $ 73,971,147 $ (12,267) $ 73,958,880
$ 25,000 $ 25,000
$ 2,812,801 $ 143,733 $ 75,550,702 $ (12,267) $ 75,538,435
$ 875,751 $ 875,751
$ 117 $ 950 $ 579 $ 35,289 $ 3,430,940 $ 3,430,940
$ 52,827 $ 124,412 $ 3,010,696 $ 239,478 $ 2,882,758 $ 100,919,852 $ (2,814,889) $ 98,104,963
$ 78,760 $ 78,760 $ 78,760
$ (78,760) $ (78,760)
$ 758,449 $ 758,449
$ (758,449) $ (758,449)
$ - $ 78,760 $ - $ - $ - $ - $ - $ -
$ 6,169 $ (969) $ (1) $ (58,518) $ (115,687) $ (5,911,246) $ - $ (5,911,246)
$ - $ - $ - $ - $ - $ 442,814 $ 442,814
$ 1,991,945 $ 1,861 $ 6,763 $ 109,256 $ 418,743 $ 38,968,929 $ 38,968,929
$ 144,604 $ - $ -
$ 2,657,405 $ 2,657,405
$ 2,692,898 $ 2,692,898
2892 336 96909 96909
2892 295 94261 94261
$ 323,037 $ 323,037
$ 754,928 $ 754,928
The accompanying Independent Auditors' Report and Notes are an integral part of this statement.
63
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SCHEDULE OF RELEVANT STATISTICS
FOR THE YEAR ENDED MARCH 31, 2014
Fiscal year ended March 31 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Number of employees 90 99 89 99 90 107 111 103 103 104
Number of clients served:
Public Housing 1,168 1,168 1,168 1,168 1,168 1,168 1,168 1,168 1,168 1,168
Housing Choice Voucher 6,287 6,359 6,400 6,359 6,234 6,400 6,394 6,206 6,206 6,097
Shelter plus Care 241 241 241 241 303 280 281 274 274 285
Section 8 Moderate Rehab 25 26 23 26 25 25 25 23 23 28
Section 8 Voucher 0 5 5 5 5 4 4 5 5 5
Component Units
Casa Del Rio Senior Hsg 82 82 82 82 82 82 82 82 82 82
DeAnza Gardens 180 180 180 180 180 180 180 180 180 180
Total 7,983 8,061 8,099 8,061 7,997 8,139 8,134 7,938 7,938 7,845
Capital Asset Information:
Total units 1,430 1,430 1,430 1,430 1,430 1,430 1,430 1,430 1,430 1,430
Total buildings 636 636 636 636 636 636 636 636 636 374
Total vehicles 46 46 46 46 49 49 49 49 49 49
By project: Unit Bldg Last change Unit Bldg
11001 Martinez 50 28
11002 Bay Point - 1 2002 83 43
11003 Antioch 36 19
11004 Brentwood 44 24
11005 Pittsburgh 171 57
11006 Richmond 71 30
11008 Oakley 30 16
11009a Richmond 81 44
11009b Richmond 56 28
11010 Rodeo 248 63
11011 Martinez 50 1
11012 Oakley 40 13
11013 Bay Point 50 14
11015 Antioch 100 4
45001 San Pablo 100 31
45002 San Pablo 41 1
Total PHA 1,168 374
Component units:
Casa Del Rio Senior Hsg 82 1
DeAnza Gardens 180 22 2005 180 22
The accompanying Independent Auditors’ Report and notes are an integral part of this schedule.
64
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATEMENT OF COMPLETED CAPITAL FUND PROGRAM PROJECT
ANNUAL CONTRIBUTIONS CONTRACT SF-182
MARCH 31, 2014
CA39P01150111
Funds approved $ 1,725,012
Funds expended 1,725,012
Excess of funds approved $ -
Funds advanced $ 1,725,012
Funds expended 1,725,012
Excess of funds advanced $ -
The accompanying Independent Auditors’ Report and notes are an integral part of this statement.
65
Harn & Dolan
Certified Public Accountants
2423 Stirrup Court
Walnut Creek, California 94596-6526
(925) 280-1693 Fax (925) 938-4829
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Commissioners
Housing Authority of the
County of Contra Costa
Martinez, California
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
major fund of the Housing Authority of the County of Contra Costa, California, as of and for the year ended
March 31, 2014, and the related notes to the financial statements, which collectively comprise the Housing
Authority of the County of Contra Costa, Californias basic financial statements, and have issued our report
thereon dated November 10, 2014. Our report includes a reference to other auditors who audited the
financial statements of the blended component units and discretely presented component units, as described
in our report on the Housing Authority of the County of Contra Costa, Californias financial statements.
This report does not include the results of the other auditors testing of internal control over financial
reporting or compliance and other matters that are reported on separately by those auditors.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Housing Authority of
the County of Contra Costa, California’s internal control over financial reporting (internal control) to
determine the auditing 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 the Housing Authority of the County of Contra Costa, Californias internal control.
Accordingly, we do not express an opinion on the effectiveness of the Housing Authority of the County of
Contra Costa, Californias 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 combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the Authoritys
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or 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.
66
Harn & Dolan
Certified Public Accountants
2423 Stirrup Court
Walnut Creek, California 94596-6526
(925) 280-1693 Fax (925) 938-4829
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
To the Board of Commissioners
Housing Authority of the
County of Contra Costa
Martinez, California
Report on Compliance for Each Major Federal Program
We have audited the Housing Authority of the County of Contra Costa, Californias compliance with the
types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular
A-133 Compliance Supplement that could have a direct and material effect on each of the Housing Authority
of the County of Contra Costa, Californias major federal programs for the year ended March 31, 2014. The
Housing Authority of the County of Contra Costa, California’s major federal programs are identified in the
summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
Management Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to each of its major federal programs.
Auditors Responsibility
Our responsibility is to express an opinion on compliance for each of the Housing Authority of the County
of Contra Costa, California’s major federal programs based on our audit of the types of compliance
requirements referred to above. We conducted our audit of compliance in accordance with auditing
standards generally accepted in the United States of America; the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States; and
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations . Those standards
and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on a major federal program occurred. An audit includes examining, on a test basis,
evidence about the Housing Authority of the County of Contra Costa, California’s compliance with those
requirements and performing such other procedures as we consider necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination on the Housing Authority of the County
of Contra Costa, California’s compliance.
68
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
STATUS OF PRIOR AUDIT FINDINGS
MARCH 31, 2014
The audit report for the fiscal year ended March 31, 2013, contained no audit findings.
70
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
MARCH 31, 2014
Section I - Summary of Auditors’ Results
Financial Statements
Type of auditors’ report issued: unqualified
Is a going concern explanatory paragraph included in the audit report? no
Internal control over financial reporting:
Significant deficiencies identified? no
Any significant deficiency reported as a material weakness? none reported
Noncompliance material to financial statements noted? no
Federal Awards
Does the auditors report include a statements that the auditees financial
statements include departments, agencies, or other organizational units
expending $500,000 or more in Federal awards that have separate A-133
audits which are not included in this audit? no
Dollar threshold used to distinguish between Type A and Type B programs $ 2,640,107
Auditee qualified as low-risk auditee? yes
Identification of major programs:
Housing Choice Voucher Program 14.871
Type of auditors’ report issued on compliance for major programs: unqualified
Did the audit disclose any audit findings which the auditor is required
to report under OMB A-133, paragraph 510(a) no
Internal control over major programs:
Significant deficiencies identified? no
Any significant deficiency reported as a material weaknesses? none reported
Are any known questioned costs reported? no
Were prior audit findings related to direct funding shown in the
Summary of Prior Audit Findings? no
Section II - Financial Statement Findings
None
Section III - Federal Award Findings
None
71
Harn & Dolan
Certified Public Accountants
2423 Stirrup Court
Walnut Creek, California 94596-6526
(925) 280-1693 Fax (925) 938-4829
November 10, 2014
To the Board of Commissioners
and Executive Director
Housing Authority of the
County of Contra Costa
Martinez, California
We have audited the financial statements of the business-type activities and the major fund of the Housing
Authority of the County of Contra Costa, component unit of the County of Contra Costa, California (the
Authority) for the year ended March 31, 2014. We did not audit the financial statements of the Authoritys
component units which were audited by other auditors and the reports were furnished to us. Professional
standards require that we provide you with information about our responsibilities under generally accepted
accounting standards, Government Auditing Standards, and OMB Circular A-133, as well as certain
information related to the planned scope and timing of our audit.
Our Responsibility under U.S. Generally Accepted Auditing Standards and OMB Circular A-133
As stated in our engagement letter dated January 8, 2014, our responsibility, as described by professional
standards, is to express opinions about whether the financial statements prepared by management with your
oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting
principles. Our audit of the financial statements does not relieve you or management of your
responsibilities.
In planning and performing our audit, we considered the Housing Authority of the County of Contra Costa,
Californias internal control over financial reporting in order to determine our auditing procedures for the
purpose of expressing our opinions on the financial statements and not to provide assurance on the internal
control over the financial reporting. We also considered internal control over compliance with requirements
that could have a direct and material effect on a major federal program in order to determine our auditing
procedures for the purpose of expressing our opinion on compliance and to test and report on internal control
over compliance in accordance with OMB Circular A-133.
As part of obtaining reasonable assurance about whether the Authoritys financial statements are free of
material misstatements, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grants. However, providing an opinion on compliance with those provision is not an objective
of our audit. Also, in accordance with OMB Circular A-133, we examined, on a test basis, evidence about
the Authoritys compliance with the types of compliance requirements described in the U.S. Office of
Management and Budget (OMB) Circular A-133 Compliance Supplement applicable to each of its major
federal programs for the purpose of expressing an opinion on the Authoritys compliance with those
requirements. While our audit provided a reasonable basis for our opinion, it does not provide a legal
determination on the Authoritys compliance with those requirements.
Generally accepted accounting principles provide for certain required supplementary information (RSI) to
supplement the basic financial statements. Our responsibility with respect to the Management Discussion
and Analysis (MD&A), which supplements the basic financial statements, is to apply certain limited
Housing Authority of the County of Contra Costa
November 10, 2014
Page 2
procedures in accordance with generally accepted auditing standards. However, the RSI was not audited
and, because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance, we do not express an opinion or provide any assurance on the RSI.
We have been engaged to report on the Schedule of Expenditures of Federal Awards, the Financial Data
Schedule and the Statement of Completed Capital Fund Program Project. Our responsibility for the
supplementary information, as described by professional standards, is to evaluate the presentation of the
supplementary information in relation to the financial statements as a whole and to report on whether the
supplementary information is fairly stated, in all material respects, in relation to the financial statements as
a whole.
We have not been engaged to report on the Schedule of Relevant Statistics which accompanies the financial
statements but is not RSI. Our responsibility with respect to this other information in documents containing
the audited financial statements and auditors report does not extend beyond the financial information
identified in the report. We have no responsibility for determining whether this other information is properly
stated. This other information has not been audited and we did not express an opinion or provide any
assurance on it.
Planned Scope and Timing of the Audit
The audit included examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; therefore, our audit involves judgement about the number of transactions to be
examined and the areas to be tested.
Our audit included obtaining an understanding of the entity and its environment, including internal control,
sufficient to assess the risks of material misstatement of the financial statements and to design the nature,
timing, and extent of further audit procedures. Material misstatement may result from (1) errors, (2)
fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental
regulations that are attributable to the entity or to acts by management or employees acting on behalf of the
entity. We noted no material misstatement that required communication to you during our audit.
Professional standards also require that we communicate to you the following information related to our
audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the Authority are described in Note 1 to the financial statements. No new
accounting policies were adopted and the application of existing policies were not changed during the fiscal
year ended March 31, 2014. As described in Note 1.R. to the financial statements, the Authority considered
the effect that several new GASB pronouncements would have on the financial statements. The Authority
implemented GASB No 65 Items Previously Reported as Assets and Liabilities, during the current fiscal
year. The implementation of this GASB had no material effect on the financial statements of the Authority.
We noted no transactions entered into by the Authority during the year for which there is a lack of
authoritative guidance or consensus. All significant transactions have been recognized in the financial
statements in the proper period.
Housing Authority of the County of Contra Costa
November 10, 2014
Page 3
Accounting estimates are an integral part of the financial statements prepared by management and are based
on managements knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to the financial
statements and because of the possibility that future events affecting them may differ significantly from those
expected. The most sensitive estimates affecting the Authoritys financial statement were:
Allowance for uncollectible tenant accounts receivable: Managements estimate is based on past
experience and subsequent collections. We inquired with management on the need for the amount of
the allowances.
Depreciation on capital assets: Managements estimate of the useful lives of its capital assets is based
on historical information about similar assets, the length of time the assets are expected to meet service
and technology demands, and the Authoritys maintenance policy for the assets. These estimates have
remained consistent for several years. We evaluated the key factors and assumption used to develop the
depreciation estimates in determining that they are reasonable in relation to the financial statements
taken as a whole.
OPEB liability: Managements estimate is derived from actuarial valuations obtained from experts. We
agreed the OPEB liability and the other information contained in the OPEB footnote to the amounts
reported in the actuarial report prepared in 2012 for the period beginning April 1, 2012, by Nicolay
Consulting Group.
Noncurrent liability for insurance claims: Managements estimate is derived from advice received from
its insurance carriers.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most significant disclosure affecting the financial statements was the disclosure of the
related parties - component units, both blended and discreetly presented, in Note 15 to the financial
statements. This disclosure describes the Authoritys relationship, including financial, with its component
units.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. In addition, none of the misstatements detected as a
result of audit procedures and corrected by management were material, either individually or in the
aggregate, to each opinion units financial statements taken as a whole.
Disagreements with Management
For the purpose of this letter, a disagreement with management as a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial