FY2021 Proposed Operational Budget

Housing Authority of Snohomish CountyPam Frost, Finance Director

Presented to the Housing Authority of

Snohomish County’s Board of Commissioners

• Gary Weikel, Chairperson

• Amy Rusko, Vice Chairperson

• Kyoko Matsumoto Wright, Commissioner

• Jeffrey Wallace, Commissioner

• Michael Choy, Commissioner

• Joseph Alonzo, Commissioner

Our mission is to meet the diverse needs of Snohomish County residents by expanding housing opportunities that promote stability, strengthen community and provide affordability.

HASCO Agency Goals

• Property Acquisition and Program Expansion – Expand our reach physically and through influence/involvement with community and local governments.

• Invest in People – Attract and employ high quality experts in their fields and provide employee training and development to support professional growth.

• Increase Client Services – Expand client services and outreach with a focus on education, job and life skill development.

HASCO Core Values

• Diversity – We respect and encourage diversity in all its forms. We draw strength through our differences and actively seek out other perspectives.

• Integrity – We perform at a high level in support of our mission. We are honest in our communication. We follow through with our commitments. We fix our mistakes.

• Service – We exist to serve our community: families, landlords, and neighbors. We balance empathy and understanding with accountability in all our interactions.

• Stewardship – We take seriously our mission to maintain and expand housing as an asset to the community and to best use our financial resources to assist the greatest number.

• Team Work – We work best together – collaborating and creatively solving problems. We embrace the challenge of our work in a spirit of partnership.

Review of Key Objectives

Westend

HOUSING AUTHORITY OF SNOHOMISH COUNTYConsolidated Operating Budget Proposal

For the period July 1, 2020 through June 30, 2021

Enclosed is the proposed budget for fiscal year 2021 for your consideration.

Locally and worldwide the economic climate is in distress due to the COVID-19 pandemic. Governor Inslee has prohibited property owners from increasing rents and has set a temporary moratorium on evictions of tenants for non-payment of rent through August 1, 2020, and it is unknown if this will again be extended. Increased unemployment rates may result in higher vacancy rates later in the year. Even considering the slowed increase in rental rates, housing prices and rents are still unaffordable for many residents of our County. There will continue to be demand for our rental properties due to our rents being $200 - $300 below market rates.

TENANT BASED ASSISTANCE PROGRAM

HUD’s published fair market rents (FMR’s) increased 11% from 2019 to 2020. We were in a shortfall during our last fiscal year and worked closely with the HUD shortfall prevention team through the end of calendar year 2019. We continue to monitor HUD’s 2-year tool as we balance our lease-up rate against potential future shortfalls. Increases in per unit costs (PUC) are anticipated due to the impact of COVID-19 resulting in a possible reduction in the number of families that can get assistance, however we are currently leasing up because of an increase in Mainstream vouchers. We received CARES Act Supplemental Admin Fees in early May of this year and must return any unused funds to HUD. We’re allowed to use these funds for all currently eligible Housing Choice Voucher activities as well as newly eligible activities related to COVID-19.

As fiscal year 2020 draws to a close we have increased uncertainty. Last year's inflationary boost in HAP likely won’t be enough to carry us through a market with increased PUC which may lead to another funding shortfall. We currently have a total of 305 VASH vouchers, and our ACC total is 3,816, an increase of 15 vouchers.

We are continuing to invest in technology to streamline and improve our processes. We replaced all office computers in fiscal year 2020 due to a Microsoft operating system upgrade and then had to scramble to move all but essential personnel out of the main office in mid-March due to the pandemic. We’re in the process of purchasing laptops for many employees to make their working-from-home experience better. We’re also continuing to research other paperless options.

HOUSING PROGRAMS

We continue to utilize cash flow to upgrade our previous Public Housing units to compete in the marketplace. As units are rehabbed we are able to charge market rents on those units. Our bond projects are our other work force housing. We don’t expect a continuation of the moderately strong rental market that we have benefitted from over the last few years. Any modest rent increases will be delayed until the Governor’s order is lifted. We are predicting a loss to rental revenue due to unpaid rents and higher vacancies, however it is difficult to predict with any certainty the impact that COVID-19 will have on our bottom line. We continue to use conservative money-management techniques and may delay non-critical maintenance projects in order to conserve cash.

Our remaining projects are our senior and disabled housing, some of which is subsidized through USDA - Rural Development, and by project-based vouchers. We hope to implement a $25 monthly rent increase at these properties once we’re allowed to increase rents. This increase is primarily funded by USDA since most tenants are already paying 30% of their income for their rent portion. The subsidy attached to these units provides a valuable resource to the community. We continue to accumulate reserve funds for long term improvements, however we are also spending these funds for much-needed capital improvements.

OTHER INITIATIVES

We continue to look for new opportunities to expand awareness of affordable housing issues in the County. As part of that goal we are proposing in this year’s budget to again contribute operating funding to support the work of the Alliance for Housing Affordability (AHA). We believe this continues to be necessary to support the efforts of local jurisdictions to work together on regional housing solutions. We are continuing in our role as the fiscal agent for AHA.

Transit-oriented affordable housing development in south Snohomish County continues to be a priority of our real estate development activities, although we anticipate delays due to projects that are in our existing pipeline. These are redevelopment of Whispering Pines in Lynnwood, rezone and redevelopment of Timberglen & Pinewood in Lynnwood, and building on property adjacent to Westend in Marysville.

STAFFING

The FY 2021 budget includes 76 FTE’s, or full time equivalents, which is the total full time positions. This is a net decrease of 5, as the Development and Policy division has been eliminated. There are no open positions. Medical, retirement and other benefits have remained the same as last year. The employee's participation rate for medical insurance premiums is budgeted to remain at 20%.

The proposed budget includes merit pay increases as well as a proposed cost of living adjustment (COLA) of 2.0%, which was the percentage increase of the Consumer Price Index – Urban Wage Earners and Clerical Workers index (CPI-W) for the calendar year for the Seattle/Tacoma/ Bremerton area as published by the federal Bureau of Labor Statistics.

MANAGEMENT AND INSPECTION FEES

We continue to use the management fee approach recommended by HUD after the passage of the Quality Housing and Work Responsibility Act of 1998 (QHWRA). The recommendation was to adopt asset management based model for property management whereby the manager/owner would charge various fees to the properties for the services they provide. HUD based its initial fees on the fees established and used in its Multi-family programs. HUD also encouraged adoption of a fee for service approach to the Housing Choice Voucher (Section 8) program.

USDA RD has also issued administrative notices indicating fee for service is the required approach. Rural Development fees are also established by regulations, and are currently capped at $64 per unit per month. Rather than allocating overhead costs to various projects, we accumulate these overhead costs in Local/Overhead and then bill out various fees to each project in order to recover our overhead expenses. We also applied fees to our Affordable and Market Rate Housing Programs, and attempted to make up any shortfalls by adjusting the asset management fee where necessary. We have not increased fees this year due to the recession that we are currently experiencing.

While we continue to use the management fee approach, we are consolidating the management fee, asset management fee, and the bookkeeping fee in a single $60-$70 per unit month fee. We continue to keep the inspection department under the management of the HCV department. The expenses related to inspections will be directly paid by the administration fee received from HUD rather than charging an inspection fee as we did in past years.

Below is a summary of the fee estimates to be used for each project or program.

Authorized MonthlyProgram Fund/Project Units Total

Tenant Based AsstSection 8 2-211-100 4,056 89,682

PBV UnitsAIDS Units 3-320-100 2 140 East Terrace III 5-517-100 12 840

Rural Development USDA Craigmont 4-430-100 36 2,304 Hilltop House I 4-415-100 20 1,280 Hilltop House II 4-416-100 10 640 River Vista I 4-420-100 20 1,280 River Vista II 4-421-100 20 1,280 Wrobliski Manor 4-425-100 32 2,048 Glenwood 4-441-100 46 2,944 Willow Run 4-410-100 84 5,376 Rural Development non-USDASoap Suds 4-440-100 4 280 Tril l ium 4-444-100 40 2,800 Woodlake Manor III 4-455-100 24 1,680

LOCAL and Affordable HousingAurora House 5-510-100 1 275 Headstart 5-511-100 1 275 Maud's House 5-512-100 - -

Centerhouse 5-515-100 44 3,080 Raintree 5-520-100 112 7,840 Valley Commons 5-525-100 51 3,570 Thomas Lake 5-530-100 50 3,500 Alpine Ridge East 5-531-100 47 2,350 Alpine Ridge South 5-532-100 46 2,300 Millwood Estates 5-535-100 300 21,000 Edmonds Highlands 5-540-100 120 8,400 Ebey Arms 5-545-100 54 3,780 Bristol Square 5-555-100 96 6,720 Timberglen 5-569-100 40 2,800 Robin Park 5-570-100 30 2,100 North Terrace 5-571-100 12 840 Stevens Circle 5-572-100 19 1,330 Alderwood 5-573-100 25 1,750 Pinewood 5-574-100 25 1,750 Centerwood 5-575-100 20 1,400 Maplewood 5-576-100 15 1,050 Scattered Sites 5-577-100 10 700 East Terrace 5-578-100 26 1,820 Cedar Grove 5-579-100 28 1,960 Autumn Chase 5-580-100 120 8,400 Whispering Pines 5-585-100 240 16,800 Carvel Apartments 5-590-100 230 16,100

TOTAL 231,018

Basis of Budgetingvs. Basis of Accounting

HASCO uses the GAAP basis of accounting & budgeting with the following exceptions:

• HASCO uses a modified accrual basis for budgeting • The budget does not include accounting adjustments necessary to meet reporting requirements.

These include the timing recognition of certain accrued liabilities (such as accrued payroll compensation) ordinarily performed at fiscal year end.

• Revenue is recognized in the period it becomes available and measurable; expenditures are reported when the liability is incurred, if measurable.

• The budget document does not include any “below the line” expenses. Examples of those expenses are extraordinary maintenance and depreciation. We are including debt payments to illustrate cash flow.

• The budget document does not include any of our tax credit properties.• Capital needs are not included in this operations budget.

Budget Summary – Major Assumptions

• HASCO operates on a fiscal year from July 1 through June 30.• COLA increase of 2.0% for all employees.• HASCO will administer 3,822 HAP vouchers based on a subsidy that is

calculated by HUD based on CY2019 numbers.• HCV administrative fees are based on FY2019 rate levels prorated at 81% of

projected eligibility, up from 79%.• HASCO projects continued near-zero vacancy in its rural development with

potential vacancies in our market rate properties. Affordable properties vacancies will be filled based on economic conditions.

Organizational Overview

Stevens Circle

FUND DESCRIPTIONS AND FUND STRUCTURE

A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting distinguishes funds based on their intended purpose and assists management to present and verify compliance regarding finance-related legal and contractual provisions. While HASCO uses the enterprise fund type and its measurement focus is generally the same as that used by commercial entities, it does maintain separate accounting for resources that have unique uses and reporting requirements. These include the following:

Housing Choice Vouchers: Commonly referred to as Section 8, HASCO administers the Federal Government’s primary program for assisting low-income families, the elderly, and the disabled. HASCO receives funds from HUD to pay housing subsidy directly to landlords on behalf of the participating resident. HUD provides two sources of funding to HASCO:

• Rental subsidy to be paid directly to landlords for rent, and directly to participating residents for utility subsidy. These are the only costs allowed to be paid from HAP funds.

• Administrative fees, which are used to pay the administrative costs of managing the program.

Market Rate Properties: These communities the Housing Authority owns and contracts with third-party property management companies to manage the day-to-day operations. There are no subsidies attached to these communities. Restricted to 50% of the units must be occupied by tenants with less than 80% of median income.

Rural Development: Senior / young-disabled properties owned by HASCO and operated by HASCO staff. Most of these communities are financed through the USDA program; the rest are heavily subsidized by the PBV program.

Affordable Housing: Our formerly low-income housing portfolio; we own and manage these properties. There are no subsidies attached to these communities. Restricted to 50% of the units must be occupied by tenants with less than 80% of median income.

Manufactured Homes: Manufactured homes within designated parks. Residents own their own home and are responsible for its care and maintenance and pay a monthly pad rent. HASCO owns and manages the land and common structures. Alpine Ridge is an age-restricted (55+) community.

Other Miscellaneous Funds: This category includes our local fund, used for operating the day-to-day operations of HASCO; funds that have singular purpose or are a joint venture with another entity; and the management of the rehabilitation loans outstanding.

The greatest source of revenue for the Housing Authority is the housing assistance payments received from HUD, which we estimate to exceed $50 million in FY2021. The Housing Authority is also budgeting receiving over $26 million in tenant rentals on our affordable, rural development, and market rate properties. The remaining expected revenue streams will be the monthly management fees received from each of our properties, portability reimbursements and fees, miscellaneous tenant revenues such as parking fees and utility reimbursements on our market rate properties, and interest on our investments.

On the expense side, lease payments to Section 8 landlords account for the majority of total expenditures. Salaries & benefits typically are the second largest expenditure. We expect to spend nearly $4.5 million on maintenance and labor expenses on our owned properties. The majority of the remaining expenses are fees for management of the properties, interest on outstanding debt, utilities, and office and professional services.

Debt

Thomas Place

DEBT SERVICE SUMMARYHousing Authority of Snohomish County

DEBT MANAGEMENT POLICY

Because the Authority has no taxing powers, each project for which debt is issued should be self-supporting to the greatest extent possible. It is the Authority’s intention to underwrite and issue debt for long-term needs and specific projects with the intention that each project be self-supporting, and to manage the use of debt so that debt service payments will be a manageable part of each project’s operating budget.

In general, the Authority will attempt to raise capital at the lowest possible cost. This will be dependent on the fundamentals of the project and/or specific conditions of credit markets at the time a project is financed.

DEBT SCHEDULES

The Housing Authority currently has twelve (12) revenue bond issues outstanding along with other notes and loans payable. Three (3) of these bond issues are conduit bond issues whereby we have loaned the proceeds to private sponsors. The remaining nine (9) revenue bond issues are for projects owned directly by the Housing Authority.

I have included a chart that summarizes the debt service payments the Housing Authority anticipates making in fiscal year 2021. The second chart, below, outlines our anticipated debt service for all Authority bond issues currently outstanding for the next 5 years.

This schedule does not include conduit financed projects. As you can see from the chart, annual debt service for our projects is approximately $6.4 million per year through 2021. In FY 2021 a balloon payment of approximately $4.6 million will be due for Bristol Square unless the project is refinanced.

CONDUIT BOND ISSUES

From time to time the Authority has issued debt for the purpose of providing financing for projects owned by other sponsors in the County. The Housing Authority issues the debt and loans the proceeds to the private sponsor. The private sponsor is then responsible for repayment of the debt through the terms of a loan and regulatory agreement.

There are three (3) such bond issues outstanding. One of these bond issues is for our own tax credit partnership, Olympic and Sound View. Another tax credit project where the Housing Authority assisted with financing was the Avondale Village project for Housing Hope. The remaining projects were refinanced and were developed by the Snohomish Affordable Housing Group, a non-profit sponsor operating in the City of Snohomish.

It is important to remember that although we do not include these projects in our operating budgets, these outstanding bonds are liabilities of the Housing Authority, are reported on our financial statements, and do contribute to our total outstanding liabilities. The outstanding balances are included in the debt schedule of our audited financial statements each year.

RURAL DEVELOPMENT PROJECTS

The two revenue bond issues associated with Rural Development Projects were for the Pooled Project; where the proceeds were used to refinance Willow Run, Hilltop House 1 & 2, River Vista 1 & 2, and Wrobliski Manor, and to complete the purchase of Fairview and Woodlake Manor III. We have since sold Fairview to Housing Hope and repaid that portion of the revenue bond. The interest credit notes are federally subsidized loans which effectively reduce the interest rate of the loans to 1%.

MARKET RATE HOUSING DEBT

Our remaining seven (7) revenue bond issues were for acquisition of projects in our market rate housing portfolio. The Thomas Place and the Alpine Ridge (Squire and Kingsbury) Mobile Home Parks also have several other deferred loans that were secured from the State or the County in order to acquire and develop the parks. These loans have unique deferral or repayment features. We paid off the outstanding bond on Millwood Estates on July 9, 2018. On September 13, 2018 we acquired Carvel Apartments with a $70 million Revenue Note. The Housing Authority issued refunding revenue bonds in the par amount of $68,290,000 on April 10, 2019 that were used to refund the $70 million interim loan with Key Bank. We pledged the Housing Authority General Revenues when issuing these bonds rather than property deeds of trust and had S&P rate the bonds. We will continue to report our General Revenues each year while this bond issue is outstanding.

MISCELLANEOUS DEBT

The Housing Authority also has several issues of miscellaneous debt. Several are deferred loans from the State for the Aids Housing facility and Ebey Arms. The others are recoverable grants that eventually may be forgiven or are interest-only notes, such as for Olympic and Sound View LLC, which provided long term bridge financing for the tax credit partnership. Many of these loans and notes payable have unique repayment, deferral, or forgiveness features which are meant to further the long-term affordability of the projects they were awarded to. As reminder, the outstanding balances are included in the debt schedule of our audited financial statements each year and can be found on HASCO’s website.

Staffing

Centerwood

HASCO Employee Attributes• Authentic – We are all unique individuals who seek to bring our full selves to work.

We share our personalities and interests and celebrate each other’s successes and personal milestones.

• Dedicated – We are fully committed to our mission and shared sense of purpose. We strive to continuously learn and grow in support of our work.

• Kind and Compassionate – We care about the people we work for and work with. We demonstrate compassion, empathy and a desire to help.

• Professional – We are confident, calm and consistent. We clearly communicate our policies and work with our clients to resolve problems.

• Respectful – We treat all people with respect and dignity acknowledging them as individuals with unique circumstances and needs.

Staffing• Departments continue to be reorganized to bring staff

responsibilities in line with work performed.• Employee tenure average is 8.7 years, and our longest-

tenured employee has worked with us 28 years.• Hired 7 new employees and promoted 4 employees.

Department FY19 FTE FY20 FTE FY21 FTEAdministrative Services 12 16 15Asset Management 27 27 27Development and Policy 5 5 NAExecutive 7 2 3Finance 8 9 10Tenant Based Assistance 17 21 23Unassigned 1 1 1Total 77 81 79

Fiscal Year 2021 Budget Summaries

Consolidated by division

Olympic View

FY2021 Budget FY2021 Budget

Total Local Section 8

HCV

Manufactured

Housing Affordable

Units Market Rate Rural

Development

HASCO Managed Properties

Tenant Revenue 28,372,916 170,093 819,780 4,103,204 20,638,381 2,472,378 169,080 HUD PHA Operating Grants 55,434,350 55,434,350 Fee Revenue 2,809,424 2,809,424 Other Operating Revenue 2,854,340 10,900 2,843,440 Investment Income - Unrestricted 207,678 18,000 7,500 5,500 19,830 122,788 31,060 3,000

Operating Revenue 89,678,708 3,008,417 58,285,290 825,280 4,123,034 20,761,169 2,503,438 172,080 Wages & Benefits 9,758,396 2,771,682 2,281,049 179,153 1,019,386 2,568,231 842,274 96,621 Office Expenses 7,713,643 383,148 1,445,043 288,942 802,391 4,031,871 728,744 33,504 Maintenance Expenses 2,354,346 29,076 51,483 461,187 1,544,071 242,763 25,767 Housing Assistance Payments 54,472,350 110,000 54,362,350 Other Expenses 278,280 2,710 750 5,825 68,284 172,772 27,940

Operating Expense 74,577,016 3,296,616 58,089,191 525,403 2,351,247 8,316,945 1,841,721 155,892 Net Income / (Loss) from Operations 15,101,692 (288,199) 196,099 299,877 1,771,788 12,444,224 661,716 16,188

Required Annual Debt Principal 2,801,141 124,416 271,390 2,020,142 385,193 Interest Expenses & Amortization 4,253,090 134,204 125,684 3,908,110 85,092

Net Income / (Loss) 8,047,461 (288,199) 196,099 41,257 1,374,713 6,515,972 191,431 16,188

FY2021 Budget FY2021 Budget Cash Flow

Total HASCO Local

Section 8 HCV

Manufactured

Housing Affordable

Units Market Rate Rural

Development

HASCO Managed Properties

Cash Receipts from Tenants 27,996,773 170,093 819,780 4,103,204 20,262,238 2,472,378 169,080 Cash Receipts from Govt Grants 55,352,350 55,352,350 Cash Receipts from Other Sources 5,745,764 2,820,324 2,925,440 Cash Payments to Suppliers for Goods & Services (15,863,363) (517,708) (1,352,766) (347,264) (1,334,805) (10,577,687) (1,674,110) (59,024) Cash Payments for Housing Assistance (54,449,850) (54,449,850) Cash Payments to Employees for Wages/Benefits (9,758,396) (2,771,682) (2,281,049) (179,153) (1,019,386) (2,568,231) (842,274) (96,621)

Net Cash Provided/(Used) by Operating Activities 9,023,278 (298,973) 194,125 293,363 1,749,014 7,116,321 (44,006) 13,435 Cash Received from Grantors 0 0 Other non-capital proceeds 63,000 63,000

Net Cash Provided/(Used) by Non-Capital Financing 63,000 63,000 0 Purchase or Construction of Capital Assets - - - - - - - Proceeds from / (Repayment of) LT Debt or Loans (2,801,141) (124,416) (271,390) (2,020,142) (385,193) Interest & Fees Paid on LT Debt or Loans (4,242,255) (132,704) (119,934) (3,904,525) (85,092)

Net Cash Provided/(Used) by Capital Financing (7,043,396) - (257,120) (391,324) (5,924,667) (470,285) - Interest Received 207,678 18,000 7,500 5,500 19,830 122,788 31,060 3,000

Net Cash Provided/(Used) by Investing Activities 207,678 18,000 7,500 5,500 19,830 122,788 31,060 3,000 Net Increase/(Decrease) in Cash & Equivalents 2,250,560 (217,973) 201,625 41,743 1,377,520 1,314,442 (483,231) 16,435

Affordable Housing Properties

FY2020 Budget Actual + Budget

Remaining FY2021 BudgetTenant Revenue 3,663,160 4,192,156 4,103,204 Other Operating Revenue 145 Investment Income - Unrestricted 28,720 32,173 19,830

Operating Revenue 3,691,880 4,224,474 4,123,034 Wages & Benefits 957,431 1,010,923 1,019,386 Office Expenses 762,764 823,663 802,391 Maintenance Expenses 423,494 471,915 461,187 Other Expenses 66,583 53,605 68,284

Operating Expense 2,210,272 2,360,106 2,351,247 Net Income / (Loss) from Operations 1,481,608 1,864,368 1,771,788

Required Annual Debt Principal 166,135 169,538 271,390 Interest Expenses & Amortization 129,921 125,009 125,684

Debt Payments 296,056 294,547 397,074 Net Income / (Loss) 1,185,552 1,569,822 1,374,713

444 TRILLIUM

510 AURORA HOUSE

511 HEADSTART

515 CENTER HOUSE

569 TIMBERGLEN

570 ROBIN PARK

571 NORTH TERRACE

572 STEVENS CIRCLE

573 ALDERWOOD

574 PINEWOOD

575 CENTERWOOD

576 MAPLEWOOD

577 SCATTERED

SITES 578 EAST TERRACE

579 CEDAR GROVE

Tenant Revenue 554,860 12,060 10,776 447,486 439,920 424,560 134,784 217,548 295,680 300,360 229,056 161,732 159,440 351,198 363,744 Investment Income - Unrestricted 2,410 1,740 1,200 1,300 3,000 300 3,200 2,000 1,200 180 1,100 2,200

Operating Revenue 557,270 13,800 11,976 448,786 439,920 427,560 135,084 217,548 298,880 302,360 230,256 161,912 160,540 353,398 363,744 Wages & Benefits 128,411 3,341 697 91,011 105,269 99,493 38,538 79,110 65,953 52,737 65,291 67,766 28,803 76,064 116,903 Office Expenses 102,232 5,428 4,112 101,070 48,755 75,299 28,541 54,814 53,881 57,237 52,191 37,197 25,466 80,613 75,554 Maintenance Expenses 40,331 820 42,684 45,320 34,771 19,357 25,115 27,908 34,193 34,834 20,447 17,420 35,983 82,005 Other Expenses 2,020 36,804 1,850 9,240 1,500 750 16,120

Operating Expense 272,995 8,769 5,630 271,568 199,344 211,413 86,436 168,279 147,742 144,167 153,815 125,409 72,439 192,660 290,582 Net Income / (Loss) from Operations 284,275 5,031 6,346 177,218 240,576 216,147 48,648 49,269 151,138 158,193 76,441 36,503 88,101 160,738 73,162

Required Annual Debt Principal 85,000 84,390 102,000 Interest Expenses & Amortization 65,956 59,728

Debt Payments 150,956 144,118 102,000 Net Income / (Loss) 133,319 5,031 6,346 33,100 138,576 216,147 48,648 49,269 151,138 158,193 76,441 36,503 88,101 160,738 73,162

Rural Development Properties

• Craigmont – 36 Units in Lake Stevens• Glenwood – 46 Units in Lake Stevens• Hilltop House – 30 Units in Stanwood• River Vista – 40 Units in Arlington• Willow Run – 84 Units in Marysville• Wrobliski Manor – 32 Units in Arlington• PBV Units – 42 units in Snohomish & Mtlk Terrace

FY2020 Budget Actual + Budget

Remaining FY2021 Budget Tenant Revenue 2,462,791 2,471,746 2,472,378 Other Operating Revenue 219 Investment Income - Unrestricted 39,260 37,608 31,060

Operating Revenue 2,502,051 2,509,574 2,503,438 Wages & Benefits 830,209 787,738 842,274 Office Expenses 684,963 735,122 728,744 Maintenance Expenses 256,377 287,182 242,763 Other Expenses 14,537 26,043 27,940

Operating Expense 1,786,086 1,836,085 1,841,721 Net Income / (Loss) from Operations 715,964 673,489 661,716

Required Annual Debt Principal 283,685 352,479 385,193 Interest Expenses & Amortization 180,680 121,209 85,092

Debt Payments 464,365 473,688 470,285 Net Income / (Loss) 251,599 199,800 191,431

410 WILLOW RUN Hilltop 1&2

River Vista 1&2

425 WROBLISKI

MANOR 430

CRAIGMONT 440 SOAP

SUDS 441

GLENWOOD

455 WOODLAKE MANOR III

Tenant Revenue 623,694 239,887 306,102 239,348 322,307 55,145 398,095 287,800 Investment Income - Unrestricted 11,500 2,960 4,400 3,500 800 500 3,400 4,000

Operating Revenue 635,194 242,847 310,502 242,848 323,107 55,645 401,495 291,800 Wages & Benefits 195,644 100,567 131,083 104,142 126,646 12,390 111,026 60,775 Office Expenses 150,232 77,968 87,236 73,771 115,147 11,804 165,710 46,876 Maintenance Expenses 65,446 17,381 31,337 21,909 38,074 7,972 35,215 25,430 Other Expenses 540 194 7,459 6,146 5,600 8,000

Operating Expense 411,862 196,110 257,116 205,969 285,468 32,165 319,951 133,081 Net Income / (Loss) from Operations 223,332 46,737 53,386 36,879 37,639 23,480 81,544 158,719

Required Annual Debt Principal 129,048 37,625 47,815 60,869 50,010 25,712 34,113 Interest Expenses & Amortization 27,196 9,215 12,133 11,148 11,622 13,779

Debt Payments 156,244 46,840 59,948 72,017 50,010 37,334 47,891 Net Income / (Loss) 67,088 (103) (6,562) (35,137) (12,371) 23,480 44,209 110,828

Market Rate Properties• Autumn Chase – 120 Units in Bothell• Bristol Square – 96 Units in Lynnwood• Ebey Arms – 54 Units in Marysville• Edmonds Highlands – 120 Units in Edmonds• Millwood Estates – 300 Units in Lynnwood• Raintree Village – 112 Units in Everett• Valley Commons – 51 Units in Marysville• Whispering Pines – 240 Units in Lynnwood• Carvel – 230 Units in Mukilteo

Fiscal Year 2021 will be our first budgeted year for Carvel.

FY2020 Budget Actual + Budget

Remaining FY2021 Budget Tenant Revenue 20,609,503 20,882,058 20,638,381 Other Operating Revenue 5,635 Investment Income - Unrestricted 154,732 187,485 122,788

Operating Revenue 20,764,235 21,075,177 20,761,169 Wages & Benefits 2,519,149 2,252,483 2,568,231 Office Expenses 3,894,492 4,156,154 4,031,871 Maintenance Expenses 1,496,487 1,515,742 1,544,071 Other Expenses 117,484 131,568 172,772

Operating Expense 8,027,611 8,055,947 8,316,945 Net Income / (Loss) from Operations 12,736,624 13,019,230 12,444,224

Required Annual Debt Principal 1,221,632 2,096,232 2,020,142 Interest Expenses & Amortization 2,055,997 4,403,597 3,908,110

Debt Payments 3,277,628 6,499,829 5,928,252 Net Income / (Loss) 9,458,995 6,519,401 6,515,972

520 RAINTREE VILLAGE

525 VALLEY COMMONS

535 MILLWOOD

ESTATES

540 EDMONDS

HIGHLANDS 545 EBEY

ARMS 555 BRISTOL

SQUARE 580 AUTUMN

CHASE

585 WHISPERING

PINES 590 CARVEL

Tenant Revenue 1,378,349 706,259 5,005,335 2,037,110 614,375 1,495,211 2,273,916 2,509,118 4,618,708 Other Operating Revenue 1,057 - 1,543 2,307 5,584 Investment Income - Unrestricted 14,000 3,500 15,000 37,000 3,000 15,000 9,500 2,500 23,288

Operating Revenue 1,392,349 709,759 5,020,335 2,074,110 617,375 1,510,211 2,283,416 2,511,618 4,641,996 Wages & Benefits 181,931 69,963 554,958 218,344 106,750 171,452 269,568 533,418 461,848 Office Expenses 291,180 145,101 926,148 364,183 191,570 305,105 398,696 680,750 729,138 Maintenance Expenses 98,783 68,875 366,314 153,828 51,703 118,104 202,443 207,589 276,432 Other Expenses 47,600 36,757 18,910 21,294 18,007 5,340 9,236 7,200 8,428

Operating Expense 619,494 320,697 1,866,330 757,649 368,029 600,001 879,943 1,428,957 1,475,845 Net Income / (Loss) from Operations 772,855 389,062 3,154,005 1,316,461 249,346 910,210 1,403,473 1,082,661 3,166,151

Required Annual Debt Principal 112,100 79,650 504,489 285,000 78,375 90,818 229,195 - 640,515 Interest Expenses & Amortization 104,592 74,780 1,268,976 246,894 36,628 248,822 316,287 1,611,132

Debt Payments 216,692 154,430 1,773,464 531,894 115,003 339,640 545,482 - 2,251,648 Net Income / (Loss) 556,164 234,633 1,380,541 784,567 134,343 570,570 857,991 1,082,661 914,503

Manufactured Home Properties

• Alpine Ridge – 93 Homes in Lynnwood• Thomas Place – 50 Homes in Everett

FY2020 Budget Actual + Budget

Remaining FY2021 Budget Tenant Revenue 845,460 830,887 819,780 Other Operating Revenue 15,574 Investment Income - Unrestricted 5,800 8,180 5,500

Operating Revenue 851,260 854,641 825,280 Wages & Benefits 178,069 178,426 179,153 Office Expenses 282,820 270,866 288,942 Maintenance Expenses 52,454 59,694 51,483 Other Expenses 5,806 159,110 5,825

Operating Expense 519,149 668,096 525,403 Net Income / (Loss) from Operations 332,111 186,545 299,877

Required Annual Debt Principal 57,500 109,050 124,416 Interest Expenses & Amortization 96,384 130,912 134,204

Debt Payments 153,884 239,963 258,620 Net Income / (Loss) 178,227 (53,418) 41,257

530 THOMAS PLACE

531 ALPINE RIDGE SOUTH

532 ALPINE RIDGE EAST

Tenant Revenue 248,400 282,480 288,900 Investment Income - Unrestricted 2,500 1,485 1,515

Operating Revenue 250,900 283,965 290,415 Wages & Benefits 70,564 54,171 54,418 Office Expenses 98,624 93,004 97,314 Maintenance Expenses 13,331 17,931 20,221 Other Expenses 5,825

Operating Expense 188,344 165,106 171,953 Net Income / (Loss) from Operations 62,556 118,859 118,462

Required Annual Debt Principal 4,416 59,400 60,600 Interest Expenses & Amortization 684 66,100 67,420

Debt Payments 5,100 125,500 128,020 Net Income / (Loss) 57,456 (6,641) (9,558)

HCV Program (Section 8)

Bdrm Size

# of Hshlds in Bedroom

Size

Avg Contract

Rent

Avg Tenant

Rent

Tenant Portion of

RentTotal Number of Households Evaluated 3,906 0 34 $1,005 $166 14%Total # Family Members 8,545 1 1,324 $1,119 $216 16%Avg Annual Income: $15,658 2 1,398 $1,322 $227 15%% Households with Disabled Member 62% 3 827 $1,729 $322 16%% Non-Senior Disabled Households 38% 4 276 $2,094 $402 16%% Disabled Senior Households 24% 5 38 $2,349 $376 14%% Non-Disabled Senior Households 9% 6 6 $2,017 $237 11%% Families with Children 38% 7 3 $2,420 $119 5%

HASCO HCV Demographics

FY2020 Budget Actual + Budget

Remaining FY2021 Budget HUD PHA Operating Grants 44,065,000 47,364,100 51,809,350 Housing Assistance Payments 44,562,133 47,888,864 51,727,350

Net Restricted Position (497,133) (524,764) 82,000 Unrestricted Income Received 5,583,556 6,268,350 6,475,940

Wages & Benefits 2,187,300 1,927,991 2,281,049 Office Expenses 1,286,212 1,335,119 1,358,293 Ports & Related Expenses 2,097,500 2,659,049 2,722,500

Expenses Paid from Admin Fees 5,571,012 5,922,158 6,361,841 Unrestricted Net Position 12,544 346,191 114,099

Local Operations

Since we no longer have public housing, our Local Operations have become more streamlined, and we consolidated the LIPH-mandated 4 separate fee charges into a single management fee. Local Operations funds the research of projects under consideration, office management, and the administration of the tax credit properties. We intend to make significant investments in fiscal year 2021 to improve office technology, provide staff with appropriate training and support, and continue to participate in housing advocacy efforts.

FY2020 Budget Actual + Budget

Remaining FY2021 Budget Tenant Revenue 170,093 170,099 170,093 Fee Revenue 2,729,382 2,760,640 2,809,424 Other Operating Revenue 25,900 13,523 10,900 Investment Income - Unrestricted 36,000 28,421 18,000

Operating Revenue 2,961,375 2,972,683 3,008,417 Wages & Benefits 2,616,758 2,856,840 2,771,682 Office Expenses 372,719 614,363 383,148 Maintenance Expenses 24,065 48,772 29,076 Housing Assistance Payments 110,000 110,000 110,000 Other Expenses 2,710 3,345 2,710

Operating Expense 3,126,252 3,633,320 3,296,616 Net Income / (Loss) from Operations (164,877) (660,638) (288,199)

Net Income / (Loss) (164,877) (660,638) (288,199)

Goals for Fiscal Year 2021

Willow Run

Priorities for the coming year• Create a capital needs budget to help plan future projects.• Redesign HASCO.org website.• Engage employees to successfully meet HASCO’s values and expectations for

employee performance.• Create and implement a company brand to be used in all external

communications and throughout the agency.• Select developer for Whispering Pines Redevelopment.• Rezone Pinewood & Timberglen; begin construction on 1356 Cedar.• Implement financial policies & metrics.• Analyze and execute technology solutions.• Lease up 100 mainstream vouchers.

Summary• The Housing Authority will continue to renovate our properties as funds

allow to provide safe, comfortable, and affordable housing within the community.

• Management will collaborate with community partners in order to find opportunities to support housing programs throughout the county.

• Our staff is dedicated to helping individuals find resources to thrive in economical, clean, and secure homes, and to fairly administer those resources to ensure we meet all statutory and recommended reporting requirements.

• Information technology will implement solutions to ensure we maximize our efficiency and financial stewardship.

• The Housing Authority would like to thank the Board of Directors for their support of our vision and goals.