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Housing & Redevelopment Authority - HRA-Packet-10-17-2023 Supporting Documents - 10/17/2023
OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY & COMMUNITY DEVELOPMENT AGENCY BOARD PACKET October 16, 2023 1 of 91 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY AGENDA Government Services Center, Otter Tail Lake Room 500 West Fir Avenue, Fergus Falls, MN October 17, 2023 HOUSING AND REDEVELOPMENT AUTHORITY MEETING AGENDA 11:45am 1. Call Meeting to Order and Roll Call – Chairperson 2. Approval of Agenda 3. Consent Agenda A. Regular Board Meeting Minutes, September 19, 2023 B. Housing Choice Voucher Rental Assistance Program Report September 2023 C. Community Housing Investment Programs Report September 2023 D. Public Housing Program Report September 2023 E. Check Report and September 2023 Financial Reports F. Resolution No. 252 Adopting Fair Market Rents and Payment Standards for 2024 G. Resolution No. 253 Adopting Utility Allowance Schedule for the Housing Choice Voucher and Public Housing Programs for 2024 H. Resolution No. 254 Adopting The Passbook Savings Rate For Federal Assistance Programs Effective January 1, 2024 I. Resolution No. 255 Adopting Flat and Ceiling Rents for the Public Housing Program for 2024 4. New Business A. Motion to Accept Audited Financial Statements for the Year Ended December 31, 2022 B. Resolution No. 256 Rejecting Construction Estimate; Determining Not to Award Construction Contract for the North Fields of Dalton C. Resolution No. 257 Adopting Accounts Payable, Disbursements, and Check Writing Policy; Rescinding Resolution No. 187 5. Executive Director Report (verbal update) 6. General Discussion – Topics by Commissioners 7. Adjourn 2 of 91 JOINT WORK SESSION OF THE HRA AND CDA BOARDS 12:30pm 1. Discussion Items a. Review Proposed Housing Program Modifications i. Realign programs to simplify application and administrative process ii. Adjustments to meet the needs of the current marketplace b. 2024 Work Plan Priorities i. Leverage local resources with new and existing funding programs ii. Advance affordable senior rental and affordable/entry level single family development c. Housing Summit Preview d. 2024 Board Meeting Structure e. HRA Executive Director Transition COMMUNITY DEVELOPMENT AGENCY MEETING AGENDA 1:00pm or Following Joint Work Session 1. Call to Order 2. Approval of Agenda 3. Approval of Consent Agenda A. September 19, 2023 Regular Meeting Minutes B. September 2023 Financial Reports 4. Reports and Presentations A. Director Status Report B. Committee Reports Housing Growth and Investment Workforce Support and Development (did not meet) Childcare Investment (did not meet) D. ‘On the Map’ Report E. Board Member Updates 5. Regular Business - NONE 6. Discussion and Communications A. Review of General Levy Funding for Community Development Efforts a. Workforce b. Childcare B. Other Communications C. Upcoming meeting: Tuesday, November 21, 2023 at 1:00pm, Commissioner’s Room, Government Services Center with HRA Board meeting beginning at 11:45am 7. Adjourn 3 of 91 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 3. CONSENT AGENDA 4 of 91 1ir EOU/\l. HOUSING OPPORTUNITY The Otter Tail County HRA Board of Commissioners Met for a regular meeting on September 19, 2023 at 11:45am At the Otter Tail County Government Services Center 500 W Fir Ave, Fergus Falls, MN Board Members Present: Kurt Mortenson Betty Murphy Leland Rogness, Vice Chairperson Absent: Wayne Johnson, Chairperson and Jeff Ackerson Others Present: Barbara Dacy, OTC HRA Executive Director Paula Grunewald, OTC HRA Administrative Assistant Tanya Westra, OTC HRA Project Manager Julie Bakken, OTC HRA Accounting Specialist Amy Baldwin, OTC CDA Director 1. CALL TO ORDER Chairperson Johnson called the meeting to order at 11:47 am. 2. APPROVAL OF AGENDA Motion made by Betty Murphy, second by Kurt Mortenson to approve the September 19, 2023 Agenda with no changes needed. Motion passed unanimously. 3. APPROVAL OF CONSENT AGENDA ITEMS Motion made by Kurt Mortenson, second by Betty Murphy to approve the Consent Agenda. Motion passed unanimously. 4. NEW BUSINESS Resolution 251 Adopting Revenue Cycle Cash Management and Program Funding Policy Barbara Dacy, Otter Tail County HRA Executive Director described the “Revenue Cycle Cash Management and Program Funding” policy. She stated that there are two important aspects for cash management, primarily regarding the use of federal funds: 1) Funds cannot be transferred between Public Housing and Section 8; and 2) transfers from the General Revolving fund to the federal programs is not permitted unless specifically authorized by the program. She stated that the policy also includes monthly monitoring to determine if funds should be invested. Motion made by Kurt Mortenson, second by Betty Murphy to approve. Motion passed unanimously. 5. Discussion A. North Fields of Dalton Update Director Dacy stated that JBC Construction & Ohren Electric had submitted their estimates totaling $2,036,000 for the two triplexes in the North Fields of Dalton development. She stated that originally the construction budget was estimated at $1,500,000, including a contingency. Dacy stated that there would be no action taken today and staff 5 of 91 OTTERTAIL COUNTY -MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 218-998-8730 ® OTTER TAIL COUNTY IS AN EQUAL OPPORTUNITY EMPLOYER @ ottertailcounty.gov LIVE YOUR best life HERE. -----------------7 Pg. 2 will identify potential options for the future, including, but not limited to, including the development in a potential 2024 Housing Infrastructure Bond Application with other proposed triplexes. Ms. Westra stated that a letter will be mailed to the people on the waiting list. B. Statewide Local Housing Aid (SAHA) Director Dacy stated that SAHA will be distributed to Minnesota’s 87 counties, Tier 1 cities in Greater Minnesota (populations over 10,000), and tribal governments. She stated that this aid must be spent within four years on “qualifying projects”, which include homeownership developments serving households with 115% AMI and rental developments serving households with 80% AMI. She stated that qualifying projects also include production, preservation, acquisition/rehabilitation, emergency rent assistance, gap financing, demolition, etc. She stated that these allocations are in recognition of the lack of financial resources in the past and intended to add to existing resources. She stated that Otter Tail County will receive $143,671 in December 2023 and then the same amount again in 2024. She stated that the County Board will approve the use of these funds and must report annually to state. She suggested that HRA discuss potential options at the October meeting and then transmit to the County Board for discussion. 6. EXECUTIVE DIRECTOR REPORT Director Dacy reported the following: If the North Fields of Dalton development moves ahead in the future, she recommends that the HRA form a sole member Limited Liability Company (LLC) to limit liability to the assets of the development itself. She also stated that as a LLC, the project is eligible for the Otter Tail County Housing Trust Fund. Because the Otter Tail County HRA acts as the administrator of the Housing Trust Fund, she recommends that the County Board adopt a resolution to “consent” to the allocation. Local lenders have issued 5 “Start Up” (first time homebuyer) mortgages and 5 “Step Up” mortgages issued to repeat homebuyers under the Minnesota Cities Participation Program. The State Tax Credit Program is a new program where Minnesota taxpayers can receive an income tax credit for making contributions to eligible affordable housing developments. She stated that the state income tax liability can be reduced $.85 on each $1.00. Mitch Harry has been hired to be the new Project Manager. 7. GENERAL DISCUSSION – TOPICS BY COMMISSIONERS Director Dacy let the commissioners know that on September 27 there’s a session on “The Role of the Commissioner in Performance Management” from 11:30-1:00 pm. 8. ADJOURNMENT At 12:40 p.m. a motion was unanimously carried to adjourn the meeting. __________________________________________________ ___________________ Kurt Mortenson/Secretary/Clerk Date 6 of 91 9/30/2023 10/1/2023 Difference 41,230.50$ 40,094.00$ -$1,136.50 95 94 -1 *HAP Transactions 38,819.00$ 39,447.00$ *Utility Reimbursements 428.00$ 647.00$ *HAP Adjustment *Portability Tranactions (Out) 1,882.00$ 4.00$ *Portablilty Admin Fee (Paid)97.50$ -$ 9/30 10/1 New Admissions 3 End Participation 4 Shop Mode/ARS 0 Ports-Out Paid 2 0 Ports Out Pending 0 0 Ports In Pending 0 0 9/11/2023 Waiting List/To Date 18 Applications in Progress 5 Vouchers "on the street"18 ELI%92% Monthly Trend Report*Units Available Units Leased Leasing %Budget % Per Unit $ April 2023 144 100 68.8% 97.9% 419.32$ May 2023 144 99 69.4% 99.3% 409.40$ June 2023 144 95 70.1% 101.2% 588.15$ July 2023 144 95 70.4% 102.2% 585.63$ August 2023 144 93 68.7% 95.8% 437.26$ September 2023 144 95 68.7% 97.1% 434.00$ *Leasing % and Budget % based on cumulative activity during calendar year Per Unit $ is rolling three month average *Portability Utility Reimbursement *Hold Landlord Transaction OTC Section 8 Housing Choice Voucher Rental Assistance Program Summary of Actions September 30, 2023 Program Total Financial Transaction Paid This Month* UML (Unit Months Leased or # of Households) 7 of 91 &, OTTE:R 'TAIIL ~, COUNTY -MINNESOTA 21 8-998-8730 HOUSINIG ANID REDEVIEL.OPMIENT AUTHORITY ottertailcounty.gov Go,v,e;rn mein,t Services Center 500 Wes:t Fir Avenue Fergus Falls. MN 56537 hra@ottertailcounty.gov COMMUNITY HOUSING INVESTMENT PROGRAMS (CHIP) BOARD REPORT September 2023 Program Applications Approved Applications Denied Inspections Conducted Proceed to Work Issued Projects Complete Goal Program End Date Emergency Home Repair Program (EHRP) On‐Going Down Payment Assistance (DPA) 2 2 On‐Going SCDP: Reuse 2 2 2 2 On‐Going Rent Rehab ‐ RR On‐Going Affordable Rental Unit Construction ‐ ARUC On‐Going BATTLE LAKE 09/30/2023 SCDP: Commercial 2 1 1 1 8 SCDP: Homeowner 7 4 7 5 5 20 Residential Owner‐Occupied Leverage (ROHL) 2 4 2 UNDERWOOD 09/30/2023 SCDP: Homeowner 12 3 12 9 8 17 Residential Owner‐Occupied Leverage (ROHL) 5 5 4 8 of 91 218-998-8730 HOUSING AND REDEVELOPMENT AUTHORITY ottertailcounty.gov Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 (!) EOU/\L HOUSING OPPORTUNITY hra@ottertailcounty.gov PUBLIC HOUSING BOARD REPORT September 2023 Rents Payable $1,975 Rents Collected $1,975 Total Negative Rents $763 Negative Rents Paid $0 Late Fees Charged $0 Late Fees Collected $0 Number of Units Paying Flat/Ceiling Rent 0 Fiscal Year ELI 100% WAITING LIST 2 Bedroom 16 3 Bedroom 5 4 Bedroom 0 VACANCIES UNIT VACATED LEASE SIGNED 3 Bdrm ‐ Henning 08/14/2023 Units owned by the OTC HRA 13 Scattered Site Units 3 Bedroom Single Family Home 1 New York Mills 1 Henning 3 Bedroom Duplex 1 New York Mills 1 Henning 1 Underwood 1 Pelican Rapids 4 Bedroom Single Family Home 1 New York Mills 1 Henning 1 Underwood 9 of 91 218-998-8730 HOUSING AND REDEVELOPMENT AUTHORITY ottertailcounty.gov Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 (5) EOUl\l. HOUSING OPPORTUNITY hra@ottertailcounty.gov Doc Num Voided Type Document Recipient 58 No DD Barbara Dacy LLC 59 No DD Wayne Johnson 1370 No CHK James Irwin Construction 1371 No CHK Language Line Services Inc 1372 No CHK Minnesota NAHRO 1373 No CHK Otter Tail County Recorder's Office 1374 No CHK The Energy Network Worldwide LLC 1375 No CHK Cullens Home Center of Alexandria Inc 1376 No CHK Fergus Falls Daily Journal 1377 No CHK HighPoint Homes Inc 1378 No CHK Kevin Currie 1379 No CHK Otter Tail County Treasurer 1380 No CHK Taft Stettinius & Hollister LLP Payments $103,721.29 $103,721.29 Count 2 11 13 End of Report $93,875.98 Total:$103,721.29 Project Summary Program - Project Deposits General Revolving (GR) - General Revolving $0.00 Total:$0.00 Type Summary Document Type Amount Direct Deposit (DD)$9,845.31 Check (CHK) Cleared: 13 $103,721.29 Uncleared: 0 $0.00 Total Payments: 13 $103,721.29 09/22/2023 BC20 #02 Owner Match Mortgage Reg Tax Yes $3.27 09/22/2023 General Matters Yes $2,310.00 09/22/2023 Hidden Meadows #109 Pay App #5 Yes $41,659.00 09/22/2023 August 2023 Consulting Services Yes $4,300.86 09/22/2023 Battle Lake - Porch, Window, Door, Gutters, Bathroom Yes $30,472.15 09/22/2023 2024 Annual Plan, North Field of Dalton, Finance Yes $335.84 09/08/2023 SCDP Recording Fees BC 20#02 Yes $46.00 09/08/2023 109 Hidden Meadows, BL - Insulation Inspection Yes $450.00 09/08/2023 Interpretation Services Yes $121.86 09/08/2023 2023 Conference Reg-T Westra Yes $565.00 09/08/2023 Per Diem/Mileage Finance Comm Mtg Yes $101.86 09/08/2023 Main St, Battle Lake, Job Amount/Chg Order Yes $13,612.00 Payment Date Document Description Cleared Amount 09/08/2023 August 2023 Services Yes $9,743.45 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register General Revolving (GR) Posted Payments www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 8:26:18 AM Printed by: Julie Bakken 10 of 91 75% Period YTD Annual Remaining Amount Amount Budget Budget INCOME 3610 Interest Income 3703/5353/3741/0054 461.71 4,552.02 1,800.00 2,752.02 253% 3690 Other Revenue MISC 182.27 1,757.27 1,757.27 3690.01 SCDP Administration (DEED) - All Communities 1,708.46 2,912.46 85,000.00 (82,087.54)3% 3690.02 SCDP City/Grant Funds - All Communities 11,389.77 19,417.77 444,920.00 (425,502.23)4% 3690.99 Refunds & Reimbursements 340.00 12,794.57 12,794.57 3691 Levy Revenue 762,892.55 1,309,725.00 (546,832.45)58% 3693.01 CHIP Emerg Housing Repair Program (EHRP) Repayment 6,842.00 6,842.00 3693.03 CHIP FFHRA Rehab Repayments 24,012.90 24,012.90 3693.05 CHIP Rental Rehab Revolving Loan Payments 1,938.42 15,166.06 31,821.00 (16,654.94)48% 3695.01 MHFA Loan Distributions - All Projects 347,602.00 500,000.00 (152,398.00)70% 3695.02 MHFA Grant Distributions - All Projects 516,000.00 (516,000.00)0% 3697 Owner Match Revenue 354.93 9,469.93 9,469.93 3698 Developer Fees 75,000.00 (75,000.00)0% 3699 Sale of Property 422,867.15 745,000.00 (322,132.85)57% TOTAL INCOME 16,375.56 1,630,286.68 3,709,266.00 (2,078,979.32)44% EXPENSES 4130 Legal 682.98 3,352.96 30,000.00 26,647.04 11% 4140 Staff Training 565.00 5,585.22 5,000.00 (585.22)112% 4150 Travel 334.82 4,300.00 3,965.18 8% 4170 Accounting 30,000.00 60,000.00 30,000.00 50% 4171 Audit 10,000.00 16,100.00 6,100.00 62% 4190 Other Administrative Expenses 3.27 2,227.80 200.00 (2,027.80)1114% 4190.01 Manuals, Subscriptions 717.00 200.00 (517.00)359% 4190.02 Office Supplies 56.58 995.82 1,700.00 704.18 59% 4190.03 Postage 1,383.43 4,500.00 3,116.57 31% 4190.04 Telephone & Internet 122.70 300.00 177.30 41% 4190.05 Dues 791.74 1,000.00 208.26 79% 4190.06 Advertising 335.84 1,482.67 1,300.00 (182.67)114% 4190.08 Consulting Fees 121.86 6,767.68 28,000.00 21,232.32 24% 4190.2 Management Fees-OTC Admin 133,262.17 364,342.00 231,079.83 37% 4190.21 Management Fees-Administrator Contract 9,743.45 77,947.60 116,918.00 38,970.40 67% 4190.22 Management Fees - Construction Consultant 4,300.86 35,687.90 40,000.00 4,312.10 89% 4210 Board Member Payments 101.86 3,125.54 4,900.00 1,774.46 64% 4430.1 Misc Contracts - Software 218.00 6,373.50 5,000.00 (1,373.50)127% 4510 Insurance 46,305.71 35,000.00 (11,305.71)132% 4521 Assessments 80.00 420.00 340.00 19% 4570 Housing Choice Voucher Operating Support 30,000.00 30,000.00 0% 4580 Public Housing Operating Support 20,000.00 20,000.00 0% 4590.01 SCDP O & E Reports 85.00 2,000.00 1,915.00 4% 4590.02 SCDP Lead Based Paint Testing 325.00 10,000.00 9,675.00 3% 4590.03 SCDP Construction (DEED)37,481.00 91,107.77 432,000.00 340,892.23 21% 4590.04 SCDP Recording Fees 46.00 460.00 920.00 460.00 50% 4590.05 SCDP General Expense - Leverage 212,007.00 212,007.00 0% 4591 MHFA Impact Fund Expenses 42,109.00 887,045.74 1,016,000.00 128,954.26 87% 4591.01 MHFA Administration/Overrun 28,822.77 75,000.00 46,177.23 38% 4591.02 MHFA Loan Repayment 205,802.20 745,000.00 539,197.80 28% 4592.01 HOP Demolition/Site Clearance 41,537.50 40,000.00 (1,537.50)104% 4593.02 CAP Property Acquisition 50.65 25,000.00 24,949.35 0% 4593.03 CAP Consulting Fees 1,980.00 30,000.00 28,020.00 7% 4593.04 CAP Architect/Engineering 21,344.93 (21,344.93) 4593.05 CAP Legal Fees 1,827.00 4,627.00 (4,627.00) 4594 CHIP Down Payment Assistance 10,000.00 50,000.00 40,000.00 20% 4595.01 CHIP Emergency Housing Repair Program (EHRP)40,000.00 40,000.00 0% 4595.02 CHIP Res Owner Occupied Housing Leverage (ROHL)6,603.15 6,833.15 70,000.00 63,166.85 10% 4595.04 CHIP Affordable Rental Unit Constr (ARUC) Program 70,000.00 70,000.00 0% 4595.05 CHIP Rental Rehabilitation Loan 20,000.00 20,000.00 0% TOTAL EXPENSES 104,195.85 1,666,565.97 3,607,107.00 1,940,541.03 SURPLUS (87,820.29)(36,279.29)102,159.00 (138,438.29)-36% Otter Tail County Housing Redevelopment Authority Operating Statement Nine Months Ending 09/30/2023 Program: General Revolving (GR) Project: Consolidated Percent of Year www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 7:39:07 AM Printed by: Julie Bakken 11 of 91 Period Amount Balance ASSETS 1111 Cash (89,821.20)931,824.23 1111.1 Certificates of Deposit 142,898.17 1111.2 Cash MHFA Loan Acct #0054 0.50 4,082.08 1111.3 Cash Committed for Hidden Meadows 375,000.00 1111.4 Committed for Housing Trust Fund 542,596.00 1113 Cash Rent Rehab 2,000.41 302,935.47 1130.1 Loan Receivable-Rental Rehab 112,295.99 1130.2 Loan Receivable-Down Payment Assistance 79,238.00 1130.3 Loan Receivable-Tax Levy Rehab Provision 268,804.14 1130.4 Loan Receivable-Homeowner Rehab 337,957.94 1130.9 Loan Allowance (606,762.08) 1135.5 Taxes Receivable 16,095.00 1400.12 Assets Held for Resale 1,051.00 1400.5 Accumulated Depreciation (268.25) 1400.9 Furn/Equip/Mach - Admin 9,657.00 TOTAL ASSETS (87,820.29)2,517,404.69 LIABILITIES AND SURPLUS LIABILITIES 2310 MHFA Note Payable 167,006.00 TOTAL LIABILITIES 167,006.00 SURPLUS 2700 Income/Expense Clearing Account 421,028.43 2700 Income/Expense Clearing Account (Current Year) (80.00) 2806 Unrestricted Net Position 1,965,649.55 2806 Unrestricted Net Position (Current Year) (87,820.29)(36,199.29) TOTAL SURPLUS (87,820.29)2,350,398.69 TOTAL LIABILITIES AND SURPLUS (87,820.29)2,517,404.69 Otter Tail County Housing Redevelopment Authority Balance Sheet September 2023 Program: General Revolving (GR) Project: Consolidated www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 7:26:36 AM Printed by: Julie Bakken 12 of 91 Doc Num Voided Type 556 No DD 557 No DD 558 No DD 559 No DD 560 No DD 561 No DD 562 No DD 563 No DD 564 No DD 565 No DD 566 No DD 567 No DD 568 No DD 569 No DD 570 No DD 571 No DD 572 No DD 573 No DD 574 No DD 575 No DD 576 No DD 577 No DD 578 No DD 579 No DD 580 No DD 581 No DD 582 No DD 583 No DD 584 No DD 585 No DD 586 No DD 587 No DD 588 No DD 589 No DD 590 No DD 591 No DD 592 No DD 593 No DD 594 No DD 595 No DD 596 No DD 6084 No CHK 6085 No CHK 6086 No CHK 6087 No CHK 6088 No CHK 6089 No CHK 6090 No CHK 6091 No CHK 6092 No CHK 6093 No CHK 6094 No CHK 6095 No CHK 09/01/2023 HAP Util Payment Sep 23 Yes $84.00 09/01/2023 HAP Util Payment Sep 23 No $28.00 09/01/2023 HAP Util Payment Sep 23 Yes $54.00 09/01/2023 HAP Util Payment Sep 23 Yes $12.00 09/01/2023 HAP Payment Sep 23 Yes $331.00 09/01/2023 HAP Payment Sep 23 Yes $385.00 09/01/2023 HAP Payment Sep 23 No $461.00 09/01/2023 HAP Payment Sep 23 Yes $624.00 09/01/2023 HAP Payment Sep 23 Yes $357.00 09/01/2023 HAP Payment Sep 23 Yes $905.00 09/01/2023 HAP Payment Sep 23 Yes $675.00 09/01/2023 HAP Payment Sep 23 Yes $1,045.00 09/01/2023 HAP Payment Sep 23 Yes $639.00 09/01/2023 HAP Payment Sep 23 Yes $238.00 09/01/2023 HAP Payment Sep 23 Yes $674.00 09/01/2023 HAP Payment Sep 23 Yes $527.00 09/01/2023 HAP Payment Sep 23 Yes $1,225.00 09/01/2023 HAP Payment Sep 23 Yes $291.00 09/01/2023 HAP Payment Sep 23 Yes $381.00 09/01/2023 HAP Payment Sep 23 Yes $280.00 09/01/2023 HAP Payment Sep 23 Yes $590.00 09/01/2023 HAP Payment Sep 23 Yes $496.00 09/01/2023 HAP Payment Sep 23 Yes $316.00 09/01/2023 HAP Payment Sep 23 Yes $396.00 09/01/2023 HAP Payment Sep 23 Yes $357.00 09/01/2023 HAP Payment Sep 23 Yes $670.00 09/01/2023 HAP Payment Sep 23 Yes $683.00 09/01/2023 HAP Payment Sep 23 Yes $268.00 09/01/2023 HAP Payment Sep 23 Yes $3,539.00 09/01/2023 HAP Payment Sep 23 Yes $395.00 09/01/2023 HAP Payment Sep 23 Yes $493.00 09/01/2023 HAP Payment Sep 23 Yes $391.00 09/01/2023 HAP Payment Sep 23 Yes $411.00 09/01/2023 HAP Payment Sep 23 Yes $267.00 09/01/2023 HAP Payment Sep 23 Yes $5,643.00 09/01/2023 HAP Payment Sep 23 Yes $596.00 09/01/2023 HAP Payment Sep 23 Yes $150.00 09/01/2023 HAP Payment Sep 23 Yes $411.00 09/01/2023 HAP Payment Sep 23 Yes $1,031.00 09/01/2023 HAP Payment Sep 23 Yes $880.00 09/01/2023 HAP Payment Sep 23 Yes $609.00 09/01/2023 HAP Payment Sep 23 Yes $405.00 09/01/2023 HAP Payment Sep 23 Yes $340.00 09/01/2023 HAP Payment Sep 23 Yes $1,085.00 09/01/2023 HAP Payment Sep 23 Yes $925.00 09/01/2023 HAP Payment Sep 23 Yes $5,937.00 09/01/2023 HAP Payment Sep 23 Yes $386.00 09/01/2023 HAP Payment Sep 23 Yes $294.00 09/01/2023 HAP Payment Sep 23 Yes $327.00 09/01/2023 HAP Payment Sep 23 Yes $394.00 09/01/2023 HAP Payment Sep 23 Yes $301.00 09/01/2023 HAP Payment Sep 23 Yes $247.00 Payment Date Document Description Cleared Amount 09/01/2023 HAP Payment Sep 23 Yes $548.00 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Housing Choice Vouchers Posted Payments www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 2 10/4/2023 8:30:49 AM Printed by: Julie Bakken 13 of 91 Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Housing Choice Vouchers 6096 No CHK 6097 No CHK 6098 No CHK 6099 No CHK 6100 No CHK 6101 No CHK 6102 No CHK 6103 No CHK Doc Num Voided Type 277626281 No MO 28542824976 No MO Payments $43,218.08 $43,218.08 Count 41 20 2 63 End of Report $9,182.08 Money Order (MO)$148.00 Total:$43,366.08 Project Summary Program - Project Deposits Housing Choice $148.00 Total:$148.00 Type Summary Document Type Amount Direct Deposit (DD)$34,036.00 Check (CHK) Cleared: 2 $148.00 Uncleared: 0 $0.00 Total Deposits: 2 $148.00 09/13/2023 Payment - Money Order Yes $73.00 09/13/2023 Payment - Money Order Yes $75.00 Posted Deposits Control Date Document Description Cleared Amount Cleared: 58 $40,784.08 Uncleared: 3 $2,434.00 Total Payments: 61 $43,218.08 09/08/2023 Aug 23 Mileage Reimb (2)Yes $42.58 09/22/2023 Uapro for PH & S8 & No $1,945.00 09/01/2023 Port Out Payment Sep 23 Yes $867.75 09/01/2023 Port Out Payment Sep 23 Yes $1,115.75 09/01/2023 HAP Util Payment Sep 23 Yes $5.00 09/01/2023 HAP Util Payment Sep 23 Yes $49.00 09/01/2023 HAP Util Payment Sep 23 Yes $148.00 09/01/2023 HAP Util Payment Sep 23 Yes $48.00 www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 2 of 2 10/4/2023 8:30:49 AM Printed by: Julie Bakken 14 of 91 75% Period YTD Annual Remaining Amount Amount Budget Budget INCOME 3110 Dwelling Rent HAP Repayment (148.00)7,229.00 7,229.00 3301 Admin Subsidy 9,075.00 57,918.00 79,201.00 (21,283.00)73% 3301.1 HAP Subsidy 42,535.00 376,132.00 434,498.00 (58,366.00)87% 3450 Fraud Recovery - Admin 50%74.00 2,836.74 2,836.74 3450.1 Fraud Recovery - HAP 50%74.00 2,836.74 2,836.74 3610 Investment Income (0062)14.38 99.81 105.00 (5.19)95% 3690.1 Other Revenue HAP 30,000.00 (30,000.00)0% TOTAL INCOME 51,624.38 447,052.29 543,804.00 (96,751.71)82% EXPENSES 4150 Travel 42.58 359.85 1,200.00 840.15 30% 4190 Other Admin Expenses (Apps, Service Charges)252.51 120.00 (132.51)210% 4190.01 Manuals, Subscriptions 240.00 240.00 0% 4190.08 Consulting Fees 1,945.00 1,945.00 1,945.00 100% 4190.2 Management Fees-OTC 44,575.58 93,887.00 49,311.42 47% 4715.1 HAP Occupied Units 39,247.00 357,542.00 394,904.00 37,362.00 91% 4715.P HAP-Portability Out 1,886.00 16,352.00 32,462.00 16,110.00 50% 4716.P Port Out Admin Fee 97.50 1,016.08 1,423.00 406.92 71% TOTAL EXPENSES 43,218.08 422,043.02 526,181.00 104,137.98 80% SURPLUS 8,406.30 25,009.27 17,623.00 7,386.27 142% Otter Tail County Housing Redevelopment Authority Operating Statement Nine Months Ending 09/30/2023 Program: Housing Choice Vouchers Project: Consolidated Percent of Year www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 7:58:38 AM Printed by: Julie Bakken 15 of 91 Period Amount Balance ASSETS 1111 Cash Unrestricted 8,554.30 73,073.39 1121 Fraud A/R (148.00)2,993.00 1129 A/R Tenants 4,236.00 TOTAL ASSETS 8,406.30 80,302.39 LIABILITIES AND SURPLUS LIABILITIES TOTAL LIABILITIES SURPLUS 2700 Inc & Exp Clearing 4,078.69 2805 Restricted Net Position 22,114.50 2805 Restricted Net Position (Current Year) 1,476.00 5,074.74 2806 Unrestricted Position 29,099.93 2806 Unrestricted Position (Current Year) 6,930.30 19,934.53 TOTAL SURPLUS 8,406.30 80,302.39 TOTAL LIABILITIES AND SURPLUS 8,406.30 80,302.39 Otter Tail County Housing Redevelopment Authority Balance Sheet September 2023 Program: Housing Choice Vouchers Project: Consolidated www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 7:58:37 AM Printed by: Julie Bakken 16 of 91 Doc Num Voided Type 7066 No VD 7288 No CHK 7289 No CHK 7290 No CHK 7291 No CHK 7292 No CHK 7293 No CHK 7294 No CHK 7295 No CHK 7296 No CHK Doc Num Voided Type 1202 No CHK 1206 No CHK 2823 No CHK 3567 No CHK 5615 No CHK 82420781 No CHK 82420782 No CHK 82420783 No CHK 27407470645 No MO 28542824998 No MO 28985310033 No MO MAHBE Direct Dep No DDE MAHUBE - dir depos No DDE Payments $3,813.75 $3,813.75 Count 17 1 3 2 23 Payment Document Description Cleared Amount 09/21/2023 Lost Yes ($114.69) Otter Tail County Housing Redevelopment Authority General Ledger Cash Payment/Receipt Register Public Housing Posted Payments 09/08/2023 Aug 23 Mileage/Expense Reimb Yes $76.28 09/22/2023 Payment Sep 23 No $114.69 09/08/2023 Air Conditioning Labor/Supplies Yes $333.58 09/08/2023 Rental App Fees - 106 & 110 SW 10th Ave Yes $40.00 09/22/2023 Water, Gas, Sewer Yes $582.53 09/22/2023 NYM & Henning Lawn Care Yes $225.00 09/22/2023 Moving Boxes, Tape No $61.36 09/22/2023 Tree/Brush Removal & Clean Up No $550.00 Posted Deposits Control Date Document Description Cleared Amount 09/22/2023 Uapro for PH & S8 & Reasonable No $1,945.00 Cleared: 6 $1,142.70 Uncleared: 4 $2,671.05 Total Payments: $3,813.75 09/18/2023 Payment - Check Yes $300.00 09/22/2023 Payment - Check Yes $10.00 09/01/2023 Payment - Check Yes $584.00 09/22/2023 Payment - Check Yes $283.15 09/01/2023 Payment - Check Yes $170.49 09/01/2023 Payment - Check Yes $318.00 09/22/2023 Payment - Check Yes $982.74 09/01/2023 Payment - Check Yes $91.00 09/01/2023 Payment - Money Order Yes $300.00 09/18/2023 Payment - Direct Debit Yes $315.00 09/01/2023 Payment - Money Order Yes $84.14 09/18/2023 Payment - Money Order Yes $300.00 $6,667.82 Void Payment (VD) 09/07/2023 Payment - Direct Debit Yes $91.00 Cleared: 13 $3,829.52 Uncleared: 0 $0.00 Total Deposits: $3,829.52 Total:$7,643.27 End of Report ($114.69) Money Order (MO)$684.14 Direct Debit (DDE)$406.00 Project Summary Program - Project Deposits Public Housing - Family $3,829.52 Total:$3,829.52 Type Summary Document Type Amount Check (CHK) www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 8:33:48 AM Printed by: Julie Bakken 17 of 91 75% Period YTD Annual Remaining Amount Amount Budget Budget INCOME 3110 Dwelling Rental 1,212.00 28,711.46 25,000.00 3,711.46 115% 3401.1 HUD Operating Subsidy 18,022.00 40,132.00 45,000.00 (4,868.00)89% 3401.2 HUD Capital Funds-Operations/Admin 14,363.00 7,000.00 7,363.00 205% 3401.3 HUD Capital Funds-Project 36,971.88 33,000.00 3,971.88 112% 3610 Interest Income (5673/0070)26.71 185.69 40.00 145.69 464% 3690 Other Income (NSF, Late Fee, GR Support)806.50 21,000.00 (20,193.50)4% 3690.1 Water Charge Income 465.83 5,522.59 6,300.00 (777.41)88% 3690.2 Electric Charge Income 375.95 7,855.15 8,550.00 (694.85)92% 3690.3 Gas Charge Income 194.52 6,965.58 11,000.00 (4,034.42)63% 3690.31 Sewer Charge Income 556.48 6,396.26 7,350.00 (953.74)87% 3690.4 Other Tenant Charges (Maint)1,085.00 1,085.00 TOTAL INCOME 20,853.49 148,995.11 164,240.00 (15,244.89)91% EXPENSES 4130 Legal 380.50 750.00 369.50 51% 4140 Staff Training 450.00 450.00 500.00 50.00 90% 4150 Travel 35.37 294.26 1,000.00 705.74 29% 4171 Audit 2,000.00 2,000.00 0% 4190 Other Admin Expenses (Reports, Apps)40.00 59.00 2,100.00 2,041.00 3% 4190.01 Manuals, Subscriptions 500.00 500.00 0% 4190.02 Office Supplies 750.00 750.00 0% 4190.03 Postage 500.00 500.00 0% 4190.06 Advertising 200.00 200.00 0% 4190.08 Consulting Fees 1,945.00 1,945.00 1,945.00 100% 4190.2 Management Fees-OTC 16,999.99 17,000.00 0.01 100% 4310 Water 641.62 5,229.54 6,400.00 1,170.46 82% 4320 Electric 1,256.48 7,135.96 8,700.00 1,564.04 82% 4330 Gas 206.68 6,678.60 11,500.00 4,821.40 58% 4331 Sewer 726.73 5,811.71 7,500.00 1,688.29 77% 4400 Maintenance - Tools & Equip 22.95 22.95 750.00 727.05 3% 4420 Maintenance - Materials 1,314.49 2,118.37 5,500.00 3,381.63 39% 4430 Maintenance - Contracts 1,108.58 5,768.63 20,000.00 14,231.37 29% 4431 Garbage and Trash Removal Contracts 6.00 500.00 494.00 1% 4510 Insurance 15,762.60 15,763.00 0.40 100% 4520 PILOT 1,200.00 1,200.00 0% 4521 Assessments 1,237.36 1,200.00 (37.36)103% 4570 Collection Loss 500.00 500.00 0% 4580 Interest Expense (on Security Deposits)300.00 300.00 0% 4600 Capital Fund Projects 36,971.88 33,000.00 (3,971.88)112% 4610 Extraordinary Maintenance 3,500.00 3,500.00 0% TOTAL EXPENSES 7,747.90 106,872.35 143,558.00 36,685.65 74% SURPLUS 13,105.59 42,122.76 20,682.00 21,440.76 Otter Tail County Housing Redevelopment Authority Operating Statement Nine Months Ending 09/30/2023 Program: Public Housing Project: Consolidated Percent of Year www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 7:47:58 AM Printed by: Julie Bakken 18 of 91 Period Amount Balance ASSETS 1111 Cash 14,130.33 127,408.56 1114 Tenant Security Deposit Cash 9,044.40 1122 A/R Tenants (505.12)2,897.93 1122.1 Allowance for Doubtful Accts (200.00) 1122.9 A/R Tenant Repayment Agreements (50.00) 1400.5 Accumulated Depreciation (1,072,546.36) 1400.6 Land 32,990.31 1400.7 Buildings 1,661,869.49 TOTAL ASSETS 13,575.21 761,464.33 LIABILITIES AND SURPLUS LIABILITIES 2111.1 A/P Tenants 239.60 239.60 2114 Tenant Security Deposits 9,044.40 2240 Tenants Prepaid Rent 230.02 1,108.19 TOTAL LIABILITIES 469.62 10,392.19 SURPLUS 2700 Income/Expense Clearing Account (63,672.49) 2700 Income/Expense Clearing Account (Current Year) 13,105.59 42,122.76 2802 Invested in Capital Assets, Net of Related Debt 679,466.94 2806 Unrestricted Net Position 93,154.93 TOTAL SURPLUS 13,105.59 751,072.14 TOTAL LIABILITIES AND SURPLUS 13,575.21 761,464.33 Otter Tail County Housing Redevelopment Authority Balance Sheet September 2023 Program: Public Housing Project: Consolidated www.pha-web.com © 2023 Management Computer Services, Inc. (MCS) Page 1 of 1 10/4/2023 7:47:58 AM Printed by: Julie Bakken 19 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION October 17, 2023 BOARD MEETING DATE AGENDA ITEM # 3F Housing Choice Voucher & Public Housing Programs ORIGINATING DEPARTMENT/SERVICE Kelly Miller & Tanya Westra 10/03/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 252 Adopting Fair Market Rents and Payment Standards for 2024 PROPOSED REQUEST/JUSTIFICATION The U.S. Department of Housing and Urban Development (HUD) establishes Fair Market Rents (FMRs) for each metropolitan statistical area of the country. HUD requires housing authorities to establish Payment Standards in an amount between 90% and 110% of the FMR to reflect local housing market conditions. This is an annual approval. The purpose of this action is to formally adopt the HUD determined Fair Market Rent for the county to properly administer the Housing Choice Voucher & Public Housing Programs. In addition, it is required that the Payment Standards also be established by unit bedroom size. “Fair Market Rents” (FMR) are published annually by HUD and are based on rental data from the American Community Survey. FMRs are established based on the 40th percentile of rents charged for standard rental housing in the jurisdiction and represent the cost to rent a moderately-priced dwelling unit. “Payment Standards” are defined as the maximum monthly assistance payment for a family assisted in the voucher program (before deducting the total tenant payment by the family). Payment standards for each unit bedroom size must be established annually. Typically, the payment standard is between 90 percent to 110 percent of the 40th percentile FMR. Whenever the FMR increases or decreases, the PHA must ensure that its payment standards remain within the basic range. Both the FMR and the Payment Standards are increasing. The recommended payment standard is at 110% of the FMR. Staff recommends the Board approve the Resolution. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/03/2023 ATTACHMENT LIST: FINANCIAL IMPLICATIONS: HCV & PH Budget BUDGETED: X YES NO FUNDING: HUD COMMENTS 20 of 91 RESOLUTION NO. 252 RESOLUTION ADOPTING FAIR MARKET RENTS AND PAYMENT STANDARDS FOR 2024 WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) operates two federally funded programs, the Housing Choice Voucher Program and the Public Housing Program (the “Federal Assistance Programs ”); and WHEREAS, the Authority is responsible for the annual review of Fair Market Rents and Payment Standards as required by the Federal Assistance Programs. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1. That the Fair Market Rents and Payment Standards as presented in Exhibit A are hereby adopted and effective January 1, 2024 for new admissions and recertifications; 2. That the Executive Director is hereby authorized to implement the Fair Market Rents and Payment Standards as required by the Federal Assistance Programs; 3. That the Executive Director is hereby authorized, empowered, and directed to do all other acts and things as she deems necessary or desirable in her discretion to effectuate the purposes of the foregoing Resolution. Upon the motion of_________________, seconded by____________________, and passed on a unanimous vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 17th day of October, 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 21 of 91 EXHIBIT A Proposed 2024 & 2023 Fair Market Rents (FMR’s)s and Payment Standards By Unit Size Efficiency One- Bedroom Two- Bedroom Three- Bedroom Four- Bedroom Five- Bedroom Six- Bedroom 2024 FMR $ 640 $ 719 $ 944 $ 1,289 $ 1,395 $ 1,604 $ 1,813 2023 FMR $ 651 $ 656 $ 863 $ 1,151 $ 1,261 $ 1,595 $ 1,802 FMR Change +/- -$ 11 +$ 62 +$ 81 +$ 138 +$ 134 +$ 9 +$ 11 2024 Proposed Payment Standard $ 704 $ 789 $ 1,038 $ 1,417 $ 1,534 $ 1,764 $ 1,994 2023 Payment Standard $ 716 $ 721 $ 949 $ 1,266 $ 1,387 $ 1,595 $ 1,802 Payment Standard Change +/- -$ 12 +$ 68 +$ 89 +$ 151 +$ 147 +$ 169 +$ 192 22 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION October 17, 2023 BOARD MEETING DATE AGENDA ITEM # 3G HCV and Public Housing Programs ORIGINATING DEPARTMENT/SERVICE Kelly Miller & Tanya Westra 10/03/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 253 Adopting 2024 Utility Allowances for the Housing Choice Voucher & Public Housing Programs PROPOSED REQUEST/JUSTIFICATION The U.S. Department of Housing and Urban Development (HUD) requires that all housing authorities establish a utility allowance schedule for tenant paid utilities in rental assistance programs. The HRA must annually review and adjust the allowances when there are significant changes (more than 10%) in the utility rates. An external company was hired to review the utility data for the County. The purpose of this action is to formally approve the update to the utility allowances for different types of units (single family, apartment, duplex etc.). Utility costs are technically considered by HUD as part of the “rent” cost and include electricity, gas, fuel oil, propane, water and sewer services, garbage, and other customary utilities except for telephone. This also includes relevant expenses to operate medically necessary equipment for elderly and disabled households. Exhibit A of the resolution includes the utility allowances by building types for 2024. Staff recommends the Board approve the resolution. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED INTERIM EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/03/2023 ATTACHMENT LIST: Proposed Utility Allowance Schedules for 2024 as provided by Zappling FINANCIAL IMPLICATIONS: HCV & PH Budget BUDGETED: X YES NO FUNDING: HUD COMMENTS 23 of 91 RESOLUTION NO. 253 RESOLUTION ADOPTING THE UTILITY ALLOWANCE SCHEDULE FOR THE HOUSING CHOICE VOUCHER & PUBLIC HOUSING PROGRAMS FOR 2024 WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) operates two federally funded programs, the Housing Choice Voucher Program and the Public Housing Program (the “Federal Assistance Programs ”); and WHEREAS, the Authority is responsible for the annual review and establishment of utility allowances of tenant-paid utilities as required by the Federal Assistance Programs. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1. That the Utility Allowance Schedule as presented in Exhibit A is hereby approved and effective January 1, 2024; 2. That the Executive Director is hereby authorized to implement the Utility Allowance Schedule as required by the Programs; 3. That the Executive Director is hereby authorized, empowered, and directed to do all other acts and things as she deems necessary or desirable in her discretion to effectuate the purposes of the foregoing Resolution. Upon the motion of_________, seconded by__________, and passed on a ___________ vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 17th day of October 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 24 of 91 Exhibit A25 of 91 Allowances for Tenant-Furnished Utilities and Other Services UAG U.S. Department of Housing and Urban Development Office of Public and Indian Housing llo ce o e Locality Green Discount Unit Type Weather Code Date Otter Tail County HRA Section 8 -2023 None Large Apartment (5+ units) MN177 2024-01-01 Utility/Service Monthly Dollar Allowances 0BR 1 BR 2BR 3BR 4BR 5BR Space Heating Natural Gas $42 $49 $58 $67 $76 $85 Bottle Gas $81 $95 $112 $130 $147 $164 Electric Resistance $24 $28 $39 $49 $60 $71 Electric Heat Pump $21 $25 $29 $33 $37 $40 Fuel Oil $131 $155 $183 $211 $239 $267 Cooking Natural Gas $3 $4 $5 $7 $9 $11 Bottle Gas $7 $8 $11 $15 $18 $22 Electric $4 $5 $7 $10 $12 $14 Other Other Electric $15 $18 $26 $33 $41 $48 Air Conditioning $2 $3 $4 $5 $6 $7 Water Heating Natural Gas $9 $11 $16 $21 $26 $31 Bottle Gas $18 $21 $30 $40 $49 $58 Electric $12 $15 $19 $23 $27 $31 Fuel Oil $29 $34 $49 $64 $80 $95 Water $36 $37 $46 $60 $74 $88 Sewer $39 $40 $50 $64 $79 $93 Electric Fee $23 $23 $23 $23 $23 $23 Natural Gas Fee $13 $13 $13 $13 $13 $13 Fuel Oil Fee Bottled Gas Fee Trash Collection $38 $38 $38 $38 $38 $38 Range/Microwave $21 $21 $21 $21 $21 $21 Refrigerator $25 $25 $25 $25 $25 $25 Other -specify 2015 UAp<o 26 of 91 Allowances for Tenant-Furnished Utilities and Other Services UAG U.S. Department of Housing and Urban Development Office of Public and Indian Housing llo ce o e Locality Green Discount Unit Type Weather Code Date Otter Tail County HRA Section 8 -2023 None Lowrise Apartment (2-4 units) MN177 2024-01-01 Utility/Service Monthly Dollar Allowances 0BR 1 BR 2BR 3BR 4BR 5BR Space Heating Natural Gas $77 $90 $97 $104 $112 $119 Bottle Gas $148 $174 $188 $202 $215 $229 Electric Resistance $34 $40 $53 $66 $79 $93 Electric Heat Pump $27 $32 $38 $42 $47 $52 Fuel Oil $241 $283 $306 $328 $351 $373 Cooking Natural Gas $3 $4 $5 $7 $9 $11 Bottle Gas $7 $8 $11 $15 $18 $22 Electric $4 $5 $7 $10 $12 $14 Other Other Electric $19 $22 $32 $41 $50 $59 Air Conditioning $3 $3 $5 $6 $7 $8 Water Heating Natural Gas $12 $14 $20 $26 $32 $39 Bottle Gas $22 $26 $38 $50 $61 $73 Electric $15 $18 $23 $28 $33 $38 Fuel Oil $36 $43 $62 $81 $100 $119 Water $36 $37 $46 $60 $74 $88 Sewer $39 $40 $50 $64 $79 $93 Electric Fee $23 $23 $23 $23 $23 $23 Natural Gas Fee $13 $13 $13 $13 $13 $13 Fuel Oil Fee Bottled Gas Fee Trash Collection $38 $38 $38 $38 $38 $38 Range/Microwave $21 $21 $21 $21 $21 $21 Refrigerator $25 $25 $25 $25 $25 $25 Other -specify 2015 UAp<o 27 of 91 Allowances for Tenant-Furnished Utilities and Other Services UAG U.S. Department of Housing and Urban Development Office of Public and Indian Housing t iii llo ceo e Locality Green Discount Unit Type Weather Code Date Otter Tail County HRA Section 8 -2023 None Manufactured MN177 2024-01-01 Utility/Service Monthly Dollar Allowances OBR 1 BR 2BR 3BR 4BR 5BR Space Heating Natural Gas $51 $60 $71 $82 $92 $103 Bottle Gas $98 $115 $136 $157 $178 $199 Electric Resistance $60 $70 $73 $75 $77 $80 Electric Heat Pump $26 $30 $36 $40 $45 $49 Fuel Oil $160 $188 $222 $256 $290 $324 Cooking Natural Gas $3 $4 $5 $7 $9 $11 Bottle Gas $7 $8 $11 $15 $18 $22 Electric $4 $5 $7 $10 $12 $14 Other Other Electric $23 $27 $38 $50 $61 $72 Air Conditioning $2 $3 $5 $7 $9 $11 Water Heating Natural Gas $12 $14 $20 $26 $32 $39 Bottle Gas $22 $26 $38 $50 $61 $73 Electric $15 $18 $23 $28 $33 $38 Fuel Oil $36 $43 $62 $81 $100 $119 Water $36 $37 $46 $60 $74 $88 Sewer $39 $40 $50 $64 $79 $93 Electric Fee $23 $23 $23 $23 $23 $23 Natural Gas Fee $13 $13 $13 $13 $13 $13 Fuel Oil Fee Bottled Gas Fee Trash Collection $38 $38 $38 $38 $38 $38 Range/Microwave $21 $21 $21 $21 $21 $21 Refrigerator $25 $25 $25 $25 $25 $25 Other -specify 2015 UAp<o 28 of 91 Allowances for Tenant-Furnished Utilities and Other Services UAG U.S. Department of Housing and Urban Development Office of Public and Indian Housing t iii llo ceo e Locality Green Discount Unit Type Weather Code Date Otter Tail County HRA Section 8 -2023 None Single Family Attached MN177 2024-01-01 Utility/Service Monthly Dollar Allowances OBR 1 BR 2BR 3BR 4BR 5BR Space Heating Natural Gas $52 $61 $72 $83 $93 $104 Bottle Gas $101 $118 $139 $159 $180 $200 Electric Resistance $34 $40 $53 $66 $79 $93 Electric Heat Pump $26 $30 $36 $40 $45 $49 Fuel Oil $164 $193 $226 $259 $293 $326 Cooking Natural Gas $3 $4 $5 $7 $9 $11 Bottle Gas $7 $8 $11 $15 $18 $22 Electric $4 $5 $7 $10 $12 $14 Other Other Electric $20 $23 $33 $42 $52 $62 Air Conditioning $2 $3 $5 $7 $9 $11 Water Heating Natural Gas $12 $14 $20 $26 $32 $39 Bottle Gas $22 $26 $38 $50 $61 $73 Electric $15 $18 $23 $28 $33 $38 Fuel Oil $36 $43 $62 $81 $100 $119 Water $36 $37 $46 $60 $74 $88 Sewer $39 $40 $50 $64 $79 $93 Electric Fee $23 $23 $23 $23 $23 $23 Natural Gas Fee $13 $13 $13 $13 $13 $13 Fuel Oil Fee Bottled Gas Fee Trash Collection $38 $38 $38 $38 $38 $38 Range/Microwave $21 $21 $21 $21 $21 $21 Refrigerator $25 $25 $25 $25 $25 $25 Other -specify 2015 UAp<o 29 of 91 Allowances for Tenant-Furnished Utilities and Other Services UAG U.S. Department of Housing and Urban Development Office of Public and Indian Housing t iii llo ceo e Locality Green Discount Unit Type Weather Code Date Otter Tail County HRA Section 8 -2023 None Single Family House MN177 2024-01-01 Utility/Service Monthly Dollar Allowances OBR 1 BR 2BR 3BR 4BR 5BR Space Heating Natural Gas $60 $70 $83 $96 $109 $122 Bottle Gas $115 $136 $160 $185 $210 $235 Electric Resistance $58 $68 $80 $92 $104 $116 Electric Heat Pump $30 $35 $42 $47 $52 $58 Fuel Oil $188 $221 $261 $301 $342 $382 Cooking Natural Gas $3 $4 $5 $7 $9 $11 Bottle Gas $7 $8 $11 $15 $18 $22 Electric $4 $5 $7 $10 $12 $14 Other Other Electric $23 $27 $38 $50 $61 $72 Air Conditioning $2 $2 $5 $8 $11 $14 Water Heating Natural Gas $12 $14 $20 $26 $32 $39 Bottle Gas $22 $26 $38 $50 $61 $73 Electric $15 $18 $23 $28 $33 $38 Fuel Oil $36 $43 $62 $81 $100 $119 Water $36 $37 $46 $60 $74 $88 Sewer $39 $40 $50 $64 $79 $93 Electric Fee $23 $23 $23 $23 $23 $23 Natural Gas Fee $13 $13 $13 $13 $13 $13 Fuel Oil Fee Bottled Gas Fee Trash Collection $38 $38 $38 $38 $38 $38 Range/Microwave $21 $21 $21 $21 $21 $21 Refrigerator $25 $25 $25 $25 $25 $25 Other -specify 2015 UAp<o REPORT DATE:1/1/2024 PROPERTY:Otter Tail County HRA LOCATION:Fergus Falls, MN Hours/day*Wattage*Monthly kWh Energy Charge Utility Allowance 18 400 220 0.112432$ 25.00$ 1.3 75 3 0.112432$ 1.00$ 0.2 200 2 0.112432$ 1.00$ 24 70 52 0.112432$ 6.00$ 24 120 88 0.112432$ 10.00$ 8 360 88 0.112432$ 10.00$ 3 120 11 0.112432$ 2.00$ 7.5 30 7 0.112432$ 1.00$ 1.5 30 2 0.112432$ 1.00$ 1.8 710 39 0.112432$ 5.00$ *Based on literature search and online sources Oxygen Concentrator Nebulizer Electric Hospital Bed Alternating Pressure Mattress Low Air-Loss Mattress Oxygen concentrators take in air from the room and filter out nitrogen. The process provides the higher amounts of oxygen needed for oxygen therapy. A nebulizer is a type of breathing machine that lets you inhale medicated vapors. Nebulizers are used 3-4 times per day for 20 minutes at a time Electric hospital bed for home use features electric motor controls that raise the head, foot and height of the bed frame with a push of a button. Usage depends on adjustments. The alternating pressure mattress features air cells which periodically redistribute pressure by repeatedly loading and unloading the pressure beneath the body. This creates movement which alleviates pain from bed sores and ulcers. Used 24 hours a day for someone who is bed-ridden. A low air loss mattress is essentially an air mattress covered with tiny holes. These holes are designed to let out air very slowly which helps keep the skin dry and wicks away any moisture. The pressure changes cycle every 10-25 minutes. Alternating Pressure Matress Low Air-Loss Mattress Higher utility allowance as reasonable accommodation for a person with disabilities. On request from a family that includes a person with disabilities, the PHA must approve a utility allowance which is higher than the applicable amount on the utility allowance schedule if a higher utility allowance is needed as a reasonable accommodation in accordance with 24 CFR part 8 to make the program accessible to and usable by the family member with a disability. Item REASONABLE ACCOMODATION MEDICAL EQUIPMENT ALLOWANCES Oxygen Concentrator Nebulizer Electric Hospital Bed Power Wheelchair/Scooter Feeding Tube Pump CPAP Machine Leg Compression Pump Dialysis Machine/Equipment UAproTM is a trademark of Zappling 30 of 91 utility allowance online REASONABLE ACCOMODATION MEDICAL EQUIPMENT ALLOWANCES Power Wheelchair/Scooter Feeding Tube Pump CPAP Machine Leg Compression Pump Dialysis Machine/Equipment A feeding tube pump delivers nutrition throughout the day. The pump is used 5-6 times per day for 30 minutes at a time. A CPAP machine provides air at a pressure just high enough to prevent the collapse of a persons airway. The recommended usage time is 7.5 hours a night. Leg compression pumps treat vein problems (venous insufficiency) by compressing the lower extremities. The compression pump automatically inflates and deflates to force fluids back into the veins. Maximum usage is up to 3 times per day for 30 minutes at a time. Equipment that removes waste and fluids from the body when the kidneys no longer work well enough to keep the body healthy. Treatment is done 3 times a week for 3-4 hours per day. In order to keep the motorized scooter operating effectively, it's recommended to charge it every night as you sleep. Optimal charge time is at least eight hours. UAproTM is a trademark of Zappling 31 of 91 UAG utility allowance online OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION October 17, 2023 BOARD MEETING DATE AGENDA ITEM # 3H Administration/Executive Director ORIGINATING DEPARTMENT/SERVICE Barbara Dacy 10/05/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 254 Adopting the Passbook Savings Rate for Federal Assistance Programs Effective January 1, 2024 The U.S. Department of Housing and Urban Development (HUD) under 24 Code of Federal Regulations (CFR) 5.609(b)(3) states that the passbook savings rate must be used in determining income from net family assets. When determining annual income for families who apply for or receive assistance in the Housing Choice Voucher (HCV) program and public housing programs, a public housing agency (PHA) includes in the annual income the greater of either: (1) actual income resulting from all net family assets; or (2) a percentage of the value of such assets based on the current passbook savings rate when a family has net assets in excess of $5,000. Public and Indian Housing (PIH) notice 2012-29 allows the PHA to establish its own passbook rate that the PHA will apply in calculating imputed assets from income. The PHA must review its passbook rate at least annually to determine if it is within the safe harbor range of plus or minus 0.75. The passbook rate may not be less than 0%. The 2023 passbook savings rate that was adopted for use in both the Housing Choice Voucher and Public Housing Programs is 0.06%. As of September 18, 2023, the Savings National Rate is 0.45%. PHAs are allowed to use passbook rates from 0.0% to 1.2%. Due to the increase of the national rate, it is appropriate to increase the 2024 passbook savings rate to be used in asset calculations. It is recommended that the HRA use the rate of 0.30% as that is within the allowed safe harbor range. Staff recommends adopting the passbook savings rate of 0.30% effective January 1, 2024. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED INTERIM EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/05/2023 ATTACHMENT LIST: FINANCIAL IMPLICATIONS: NA BUDGETED: X YES NO FUNDING: Housing Choice Voucher and Public Housing COMMENTS 32 of 91 RESOLUTION NO. 254 RESOLUTION ADOPTING THE PASSBOOK SAVINGS RATE FOR FEDERAL ASSISTANCE PROGRAMS EFFECTIVE JANUARY 1, 2024 WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) currently operates the Housing Choice Voucher and Public Housing Programs (the “Federal Assistance Programs”); and WHEREAS, the Authority has entered into funding contracts with the United States Department of Housing and Urban Development (HUD) for the Federal Assistance Programs; and WHEREAS, the Agency is responsible for the annual review and adoption of the passbook savings rate as required for the Federal Assistance Programs. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1. That the Passbook Savings Rate of three tenths percent (0.3%) is hereby adopted and effective January 1, 2024 for recertifications and new admissions to the Federal Assistance Programs. 2. That the Executive Director is hereby authorized, empowered, and directed to do all other acts and things as she deems necessary or desirable in her discretion to effectuate the purposes of the foregoing Resolution. Upon the motion of__________, seconded by_____________, and passed on a ___________ vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 17th day of October, 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 33 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION October 17, 2023 BOARD MEETING DATE AGENDA ITEM # 3I___ Public Housing ORIGINATING DEPARTMENT/SERVICE Tanya Westra 10/05/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 255 Adopting Flat and Ceiling Rent Amounts for 2024 for the Public Housing Program PROPOSED REQUEST/JUSTIFICATION The 1998 Quality Housing Work Responsibility Act (QHWRA) requires public housing agencies to offer the option of a flat rent (as opposed to an income-based rent) to residents of public housing. Flat rents are based on market rents and, therefore, the tenant rent does not vary with income (a majority of tenants select the income-based approach). This is an annual process where the agency must complete calculations to prove that the flat rents plus the utility allowances (ceiling rent) will be no less than 80% of Fair Market Rents and not greater than the proposed Fair Market Rents. Recommend Approval of Flat Rents. A $70 per month increase is proposed due to rising costs of property insurance, anticipated maintenance needs of each unit and to meet the minimum FMR as set by HUD. It is proposed that the FY2024 Flat and Ceiling Rent rates go into effect January 1, 2024, for all new admissions and annual recertifications. Approval of the new Flat Rent will increase the security deposit charged to each new tenant as the amount required for a specific rental unit is equivalent to its flat rent. As of October 1, 2024, we have one family paying the flat rent amount. FY 2024 FMR FY2024 PROPOSED FLAT RENT/CEILING RENT 2024 PROPOSED UTILITY ALLOWANCE MIN. FLAT RENT MAX. FLAT RENT % of FMR, must be at least 80% Pelican Rapids 3 Bd Duplex $1,289 $745/$1,034 $289 $743 $1,000 80% Underwood 3 Bd Duplex $1,289 $745/$1,196 $451 $581 $961 93% Underwood 4 Bd SF $1,395 $770 $485 $631 $910 90% Henning 3 Bd Duplex $1,289 $745/$1,104 $359 $673 $930 86% Henning 3 Bd SF $1,289 $745/$1,122 $377 $688 $917 87% Henning 4 Bd SF $1,395 $770/$1,215 $445 $671 $950 87% New Yok Mills 3 Bd Duplex $1,289 $745/$1,073 $328 $704 $961 83% New York Mills 3 Bd SF $1,289 $745/1,089 $377 $655 $917 84% New York Mills 4 Bd SF $1,395 $770/$1,175 $405 $671 $950 84% PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/10/2023 ATTACHMENT LIST: FINANCIAL IMPLICATIONS: Rent revenue increase BUDGETED: X YES NO FUNDING: NA COMMENTS 34 of 91 RESOLUTION NO. 255 RESOLUTION ADOPTING FLAT AND CEILING RENTS FOR THE PUBLIC HOUSING PROGRAM FOR 2024 WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) operates the rental assistance program known as the Public Housing Program (the “Program ”); and WHEREAS, the Authority is responsible for the annual review of the Flat and Ceiling Rents as required by the Program. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1. That the Flat and Ceiling Rents as presented in Exhibit A are hereby approved and effective January 1, 2024 for new admissions and annual recertifications to the Program; 2. That the Executive Director is hereby authorized to implement the Flat and Ceiling Rents as required by the Program; 3. That the Executive Director is hereby authorized, empowered, and directed to do all other acts and things as she deems necessary or desirable in her discretion to effectuate the purposes of the foregoing Resolution. Upon the motion of ______________, seconded by___________, and passed on a __________vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 17th day of October 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 35 of 91 EXHIBIT A FY 2024 FMR FY2024 PROPOSED FLAT RENT/CEILING RENT 2024 PROPOSED UTILITY ALLOWANCE MIN. FLAT RENT MAX. FLAT RENT % of FMR, must be at least 80% Pelican Rapids 3 Bd Duplex $1,289 $745/$1,034 $289 $743 $1,000 80% Underwood 3 Bd Duplex $1,289 $745/$1,196 $451 $581 $961 93% Underwood 4 Bd SF $1,395 $770 $485 $631 $910 90% Henning 3 Bd Duplex $1,289 $745/$1,104 $359 $673 $930 86% Henning 3 Bd SF $1,289 $745/$1,122 $377 $688 $917 87% Henning 4 Bd SF $1,395 $770/$1,215 $445 $671 $950 87% New Yok Mills 3 Bd Duplex $1,289 $745/$1,073 $328 $704 $961 83% New York Mills 3 Bd SF $1,289 $745/1,089 $377 $655 $917 84% New York Mills 4 Bd SF $1,395 $770/$1,175 $405 $671 $950 84% 36 of 91 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 4. NEW BUSINESS 37 of 91 1ir EOU/\l. HOUSING OPPORTUNITY OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION _October 17, 2023__ BOARD MEETING DATE AGENDA ITEM #4A Administration/ Finance ORIGINATING DEPARTMENT/SERVICE Barbara Dacy 10/10/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Motion to Accept Audited Financial Statements for the Year Ended December 31, 2022 PROPOSED REQUEST/JUSTIFICATION The Finance Committee met on September 5, 2023 with Auditor, Bryce Karel, from Brady Martz regarding the 2022 Audit. Mr. Karel provided an overview of the 2022 audit and also reported on the “Compliance Section and Schedule of Findings and Responses”. The findings identified are the same findings that were reported in 2021 regarding 1) preparation of the financial statements and 2) recording a variety of journal entries prior to the audit. It is not cost effective for the HRA to prepare the financial statements internally and thus the auditor performs this task. Active oversight of the financial activity by the Board and its Finance Committee is a best practice recommended by HUD and is now being implemented. As to journal entries, 2022 was the first full year of HRA operations and while internal controls were continuing to be developed, additional entries were required to reflect the payment amounts according to the timeframe that the payments applied to, e.g. an insurance payment that extends from mid-year 2022 to mid-year 2023. It is recommended that just as the Finance Committee meets to review the previous year’s audit in September, the Finance Committee could meet in March of each year to review the upcoming audit year financial information and audit entries. The financial data for 2022 was submitted in a timely manner to the federal reporting agency (REAC – the Real Estate Assessment Center) and was recently approved. The Finance Committee adopted a motion to recommend the HRA Board “accept” the 2022 Audit. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/10/2023 ATTACHMENT LIST: 2022 Audited Financial Statements FINANCIAL IMPLICATIONS: NA BUDGETED: YES NO FUNDING: NA COMMENTS 38 of 91 The Otter Tail County HRA Board of Commissioners Met for a Finance Committee meeting on September 5, 2023 at 3:30 p.m. At the Otter Tail County Government Services Center 500 W Fir Ave, Fergus Falls, MN Board Members Present: Wayne Johnson, Chairperson Leland Rogness, Vice Chairperson Others Present: Barbara Dacy, OTC HRA Executive Director Tanya Westra, OTC HRA Project Manager Julie Bakken, OTC HRA Accounting Specialist Kris Vipond, OTC Assistant Finance Director Dawn Godel, OTC Accounting Supervisor Paula Grunewald, OTC HRA Administrative Assistant Bryce Karel, Brady Martz & Associates, P.C. Amy Baldwin, OTC CDA Director – arrived around 4:00 p.m. 1. 2022 Audited Financial Statements Bryce Karel, Brady Martz & Associates, P.C., stated he was from the Fargo branch of Brady Martz & Associates, P.C. He gave an overview of the 2022 audit and highlighted the Management’s Discussion and Analysis, Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position, Statement of Cash Flows, Notes to the Financial Statements, Client Specific Disclosure, Combining Schedule of Net Position (breaking out Public Housing, Section 8 and General & State/Local), Combining Schedule of Revenues, Expenses and Changes in Net Position, Combining Schedule of Cash Flows, and Schedule of Capital Fund Costs. He also reported on the Compliance Section and Schedule of Findings and Responses. Mr. Karel also responded to questions about the loss on Disposal of Capital Assets reported on page 10 and 19, and about noncurrent assets on page 24 pertaining to the various rehabilitation program questions. Rogness stated that the Committee should recommend the HRA Board accept the 2022 Audit. Johnson agreed and noted that the electronic reporting is a duty of staff to complete prior to the deadline. Johnson stated this was a great audit report. Mr. Karel left the meeting at this time. 2. HRA FINANCIAL POLICIES Director Dacy handed out a copy of a letter from Lucia Clausen, Director, Office of Public Housing, dated January 30, 2023 regarding the findings of the 2021 Audit, which Ms. Dacy stated, are the same for 2022. Ms. Dacy stated that the key message from this letter is that the Board of Commissioners should participate in the supervision and financial oversight of the Authority. Ms. Dacy stated that this is part of the purpose of the Finance Committee is to monitor these findings. She also stated that at the end of the letter there is a recommendation to establish policies and procedures and to continuously monitor the “environment to ensure that procedures and policies are updated when needed”. Director Dacy reviewed the status of updating and adopting various policies. She stated that the accounting policies adopted to date include the Investment Policy, Capital Assets Policy, HAP Processing Policy, and Fund 39 of 91 218-998-8730 @ HOUSING AND REDEVELOPMENT AUTHORITY OTTER TAIL COUNTY IS AN EQUAL OPPORTUNITY EMPLOYER LIVE YOUR best life HERE. Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 @ ottertailcounty.gov Pg. 2 Balance Policy. She stated that Finance staff is working on approximately 15 additional financial policies which are typical and routine policies. She stated that they will be presented at a future Finance meeting, before the end of the year, to review and bring forward for HRA’s Board approval. She noted that the 2010 Procurement Policy will also be presented for review and approval. It was requested that future Finance Meetings be scheduled at 3:30 pm. Also the Commissioners would like to see the policies in a collective manner which will serve ultimately as a HRA Policy Manual. 3. GENERAL DISCUSSION – TOPICS BY COMMISSIONERS Kris Vipond, Otter Tail County Assistant Finance Director, stated that Julie Bakken, HRA Accounting Specialist, has done a lot of work with the required financial reporting and policies, and has learned quickly in a short amount of time. Rogness and Johnson agreed and complemented staff on the audit on behalf of the HRA. The meeting was adjourned. __________________________________________________ ___________________ Wayne Johnson (Chairperson) Date 40 of 91 41 of 91 OTTERTAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY FERGUS FALLS, MINNESOTA AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022 42 of 91 TABLE OF CONTENTS ROSTER OF OFFICIALS INDEPENDENT AUDITOR'S REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL STATEMENTS Statement of Net Position Statement of Revenues, Expenses, and Changes in Net Position Statement of Cash Flows Notes to the Financial Statements SUPPLEMENTARY INFORMATION Combining Schedule of Net Position Combining Schedule of Revenues, Expenses, and Changes in Net Position Combining Schedule of Cash Flows Schedule of Capital Fund Costs Page 1 2 5 9 10 11 13 24 26 28 30 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 31 SCHEDULE OF FINDINGS AND RESPONSES SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS CORRECTIVE ACTION PLAN 33 35 36 43 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY ROSTER OF OFFICIALS -UNAUDITED DECEMBER 31, 2022 Name Position Term Expires Wayne Johnson Chairperson December 2027* Lee Rogness Vice,chairperson August 2024 John Lindquist Commissioner August 2026 Betty Murphy Commissioner August 2025 Kurt Mortenson Commissioner August 2023 Barbara Dacy Executive Director December 2023 * Annual appointment -1- 44 of 91 Brady Martz INDEPENDENT AUDITOR'S REPORT Board of Commissioners Otter Tail County Housing and Redevelopment Authority Fergus Falls, Minnesota Report on the Audit of the Financial Statements Opinion We have audited the accompanying financial statements of the business-type activities of Otter Tail County Housing and Redevelopment Authority, a component unit of Otter Tail County, Minnesota, as of and for the year ended December 31 , 2022, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the business-type activities of Otter Tail County Housing and Redevelopment Authority, as of December 31 , 2022, and the changes in financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion 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. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Otter Tail County Housing and Redevelopment Authority, and to meet our ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion . Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Otter Tail County Housing and Redevelopment Authority's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Make Every Day Count I ww.bradymartz com -2- 45 of 91 Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, no such opinion is expressed . • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of -3-Make Every Day Count I ww.bradymartz.com 46 of 91 America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority's basic financial statements. The combining schedules and capital fund costs are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining schedules and capital fund costs, as noted in the accompanying table of contents, are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information The Roster of Officials table on page 1 has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 3, 2023, on our consideration of the Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Otter Tail County Housing and Redevelopment Authority's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority's internal control over financial reporting and compliance. BRADY, MARTZ & ASSOCIATES, P.C. GRAND FORKS, NORTH DAKOTA August 3, 2023 -4-Make Every Day Count I ww.bradymartz.com 47 of 91 OTTERTAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31 , 2022 INTRODUCTION The Otter Tail County Housing and Redevelopment Authority's (the Authority) Management's Discussion and Analysis (MD&A) is designed to (a) assist the reader in focusing on significant financial information, (b) provide an overview of the financial activity, (c) identify changes in the financial position (its ability to address the next and subsequent year challenges), and (d) identify individual issues or concerns. Since the MD&A is designed to focus on the current year's activities, resulting changes, and current known facts, it should be read in conjunction with the Authority's financial statements. FINANCIAL HIGHLIGHTS Key financial highlights for the 2022 fiscal year include the following: • The assets of the Authority exceeded its liabilities at the close of the recent fiscal year by $3,150,922 (net position). Of this amount, $2,503,427 (unrestricted net position) may be used to meet the Authority's ongoing obligations to citizens and creditors. • The Authority's cash and cash equivalents balance at December 31 , 2022 was $2,122,815, representing an increase of $843,784 from December 31 , 2021 . • The Authority had HUD Grant revenue of $581 ,150, a decrease of $58,292 from that received in 2021 . OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to the Authority's basic financial statements. The Authority's basic financial statements comprise two components: 1) Financial statements, and 2) Notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. The Authority is a special-purpose government engaged only in Housing Assistance type activities and accounts for its financial activities as an enterprise fund. Accordingly, only business- activities financial statements are presented as the basic financial statements. The financial statements are prepared on the accrual basis of accounting. Therefore, revenues are recognized when earned and expenses are recognized when incurred. Capital assets are capitalized and depreciated, except for land, over their useful lives. See notes to the financial statements for a summary of the Authority's significant accounting policies and practices. The Authority's basic financial statements include the statement of net position, the statement of revenues, expenses and changes in net position, and the statement of cash flows. The statement of net position provides information about the nature and amount of assets and obligations (liabilities) of the Authority as of the end of the year. The statement of revenues, expenses and changes in net position reports revenues and expenses for the current year. The statement of cash flows reports cash receipts, cash payments, and net changes in cash resulting from operating activities, capital and related financing activities, and investing activities. -5- 48 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS -CONTINUED FOR THE YEAR ENDED DECEMBER 31 , 2022 This report also contains other supplementary information in addition to the basic financial statements themselves. The Authority is a special-purpose government engaged only in Housing Assistance type activities and accounts for its financial activities as an enterprise fund . Accordingly, only business-activities financial statements are presented as the basic financial statements. The financial statements are prepared on the accrual basis of accounting. Therefore, revenues are recognized when earned and expenses are recognized when incurred. Capital assets are capitalized and depreciated, except for land, over their useful lives. See notes to the financial statements for a summary of the Authority's significant accounting policies and practices. USING THIS ANNUAL REPORT Our auditors have provided assurance in their independent auditor's report, located immediately preceding this Management's Discussion and Analysis, that the Basic Financial Statements are fairly stated. Varying degrees of assurance are being provided by the auditors regarding the other information included in this report. A user of this report should read the independent auditor's report carefully to ascertain the level of assurance being provided for each of the other parts of this report. CHANGES IN NET POSITION Total net position increased from the previous year by $875,319. The largest component of net position is unrestricted. Unrestricted net position increased from the previous year by $952,243. FINANCIAL POSITION The following table summarizes the financial position of the Authority as of December 31, 2022 and 2021 . Condensed Statement of Net Position Current assets Loans receivable, noncurrent Capital assets, net Total assets Current liabilities Long-term liabilities Total liabilities Net position Net investment in capital assets Restricted Unrestricted Total net position -6- $ 2022 2,548,718 165,914 631 ,703 3,346,335 28,407 167,006 195,413 631 ,703 15,792 2,503,427 $ $ 3,150,922 $ 2021 1,362,847 273,560 679,467 2,315,874 40,271 40,271 679,467 44,952 1,551,184 2,275,603 49 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS -CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2022 The following table summarizes the changes in net position of the Authority for the years ended December 31, 2022 and 2021: Condensed Statement of Revenues, Expenses and Changes in Net Position 2022 2021 Operating revenues $ 2,127,369 $ 1,686,966 Operating expenses 1,246,606 1,452,999 Operating income (loss) 880,763 233,967 Nonoperating income (loss) (5,444) 1,657 Change in net position 875,319 235,624 Total net position , beginning of year 2,275,603 2,039,979 Total net position -i:ind of year $ 3,150,922 $ 2,275,603 Operating revenues increased by $440,403 due to an increase in tax levy revenues of approximately $465,000 and state and local government grants of approximately $52,000 and a decrease in housing choice vouchers of approximately $68,000. Operating expenses decreased by $206,393 due to decreases in tenant services of approximately $112,000 and in general expenses of approximately $96,000. Federal grants totaled $581,150 for the year ended December 31, 2022 and $639,442 for the year ended December 31, 2021. Housing Units. Managed The following table shows housing units managed by the Authority for the years ended December 31, 2022 and 2021: Owned by Authority United under vouchers Total housing units managed CAPITAL ASSETS 2022 2021 13 141 154 13 140 153 During 2022, there was no additional capital assets placed into service. For disposals, the Authority disposed $47,273 worth of assets during 2022. Please see Note 6 for additional details. DEBT ADMINISTRATION As of December 31, 2022, the Authority has new long term debt relating to a loan obtained from the Minnesota Housing Finance Agency for $750,000, of which $167,006 was awarded in 2022. Please see Note 7 for additional details. -7- 50 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS -CONTINUED FOR THE YEAR ENDED DECEMBER 31 , 2022 ECONOMIC FACTORS The Otter Tail County Housing and Redevelopment Authority administers several programs aimed at providing affordable housing choices for individuals, families, and seniors seeking both rental and owner-occupied housing. The Authority also operates rehabilitation programs in partnership with homeowners and rental property owners. From time to time, the Authority also responds to specific community requests for services to redevelop properties that, due to their condition, are obsolete or unsafe, and have a detrimental impact in the community. While the Authority receives federal funding from the Department of Housing and Urban Development (HUD) for its Housing Choice Voucher and Public Housing program, the Authority's budget is also bolstered by the Special Benefit Levy permitted in state law for housing authorities and other public or private funding sources. Combined, the Authority uses these funding sources to accomplish its mission in partnership with cities and townships. REQUESTS FOR INFORMATION The annual financial report is designed to provide a general overview of the Authority's finances for all those with an interest in the Authority's finances. Questions concerning any information provided in this report or requests for additional information should be addressed to Barbara Dacy, Executive Director, Otter Tail County Housing and Redevelopment Authority, 500 W Fir Ave, Fergus Falls, Minnesota 56537. -8- 51 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY STATEMENT OF NET POSITION DECEMBER 31, 2022 Current assets Cash and cash equivalents Restricted cash Accounts receivable ASSETS Tenants, net of allowance for doubtful accounts Taxes receivable Loans receivable, current Assets held for resale Prepaid expenses Total current assets Noncurrent assets Loans receivable, net of allowance for doubtful accounts Capital assets Nondepreciable Depreciable, net Total capital assets Total noncurrent assets Total assets Current liabilities Accounts payable Payment in lieu of taxes Tenant security deposits Unearned revenue LIABILITIES AND NET POSITION Total current liabilities Long-term liabilities Loan payable Net position Total long-term liabilities Total liabilities Net investment in capital assets Restricted for Section 8 HAP Unrestricted Total net position See Notes to the Financial Statements -9- $ 2,097,979 24,836 3,038 30,089 18,120 338,056 36,600 2,548,718 165,914 32,990 598,713 631,703 797,617 3,346,335 16,046 2,690 9,044 627 28,407 167,006 167,006 195,413 631,703 15,792 2,503,427 $ 3,150,922 52 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED DECEMBER 31 , 2022 Operating revenues Dwelling rentals Property taxes HUD operating grants Operating subsidy Housing choice vouchers Other government grants Tenant utility charges Fraud recovery Other Total operating revenues Operating expenses Service agreement fees Contract services Professional services Bad debt expense Advertising Office expense Travel Dues Staff training Consulting fees Ten ant services Utilities Repairs and maintenance Insurance General expenses Payments in lieu of taxes Housing assistance payments Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Interest income Investment income Interest expense Contribution from Otter Tail County Gain (loss) on disposal of capital assets Total nonoperating revenues (expenses) Change in net position Net position -beginning of year Net position -end of year See Notes to the Financial Statements -10- $ 30,093 1,316,930 147,801 433,349 81 ,069 33,987 999 83,141 2,127,369 217,168 197,867 125,474 9,475 1,066 5,247 2,528 1,000 5,294 8,507 7,680 29,631 28,923 31 ,757 67,276 2,690 464,870 40,153 1,246,606 880,763 57 2,432 (322) 9,657 (17,268) (5,444) 875,319 2,275,603 $ 3,150,922 53 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2022 Cash flows from operating activities: Receipts from tenants Receipts from other governmental units Receipts from property taxes Other receipts Payments to vendors Payments to other governmental units Payments for housing assistance Other payments Net cash provided (used) by operating activities Cash flows from capital and related financing activities: Proceeds from loans payable Interest paid Net cash provided (used) by capital and related financing activities Cash flows from investing activities: Payments received on loans receivable Issuance of loans Interest income Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents -beginning of year Cash and cash equivalents -end of year Reconciliation of cash and cash equivalents Cash and cash equivalents Restricted cash -tenant security deposits Restricted cash -Section 8 HAP Total See Notes to the Financial Statements -11- $ 63,154 662,219 1,306,115 84,175 (482,477) (230,116) (464,870) (404,316) 533,884 167,006 (322) 166,684 160,202 (19,475) 2,489 143,216 843,784 1,279,031 $ 2,122,815 $ 2,097,979 9,044 15,792 $ 2,122,815 54 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY STATEMENT OF CASH FLOWS-CONTINUED FOR THE YEAR ENDED DECEMBER 31 , 2022 Reconciliation of cash flows from operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation Bad debt expense Changes in assets and liabilities Accounts receivable Taxes receivable Assets held for resale Prepaid expenses Accounts payable Payments in lieu of taxes Tenant security deposits Unearned revenue Due to Otter Tail County Cash flows from operating activities Schedule of noncash investing, capital and financing activities: Transfer of vehicle from Otter Tail County Gain (loss) on disposal of capital assets See Notes to the Financial Statements -12- $ $ $ 880,763 40,153 9,475 (223) (10,815) (337,005) (36,600) (903) 1,192 ( 11) (692) {11,450) 533,884 9,657 (17,268) 55 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2022 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Otter Tail County Housing and Redevelopment Authority (the Authority) is a separate legal entity formed by Otter Tail County, Minnesota under the State of Minnesota statutes. The Authority was formed to own and operate housing for low-income clients, which is accounted for in the Low Rent Public Housing activity. The Authority has an agreement with the Housing and Urban Development (HUD) to help individuals and families procure decent and affordable housing by subsidizing their rent payments (Housing Choice Vouchers Program), which is accounted for in the Section 8 Housing Choice Vouchers activity. All other activities of the Authority are accounted for in the General & State/Local activity. The Authority, a component unit of Otter Tail County, Minnesota, was established in 1972 and is governed by a six-member Board of Commissioners who are appointed by the Otter Tail County Board of Commissioner. General The accounting policies of the Authority conform to accounting principles generally accepted in the United States of America. Basis of Accounting The Authority is a governmental entity and uses the proprietary fund model to account for its operations; therefore, the accrual basis of accounting is followed. Under this method of accounting, revenues are recognized when earned and expenses are recognized when incurred. When both restricted and unrestricted resources are available for use, it is the Authority's policy to use restricted resources first and then unrestricted resources as needed. Basis of Presentation The funds of the Otter Tail County Housing and Redevelopment Authority are presented as proprietary funds. Proprietary funds are used to account for operations financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund 's principal ongoing operations. Operating revenues include intergovernmental revenue and property taxes. Operating expenses for proprietary funds include the cost of service agreement fees, contract services, housing assistance payments, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. -13- 56 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS -CONTINUED DECEMBER 31 , 2022 The Authority reports on the following programs: The General & State/Local Fund accounts for money levied under state statute through Otter Tail County. These funds are used for both owner-occupied and rental rehabilitation throughout Otter Tail County, excluding the City of Fergus Falls. Owner- occupied loans are deferred over ten years and forgiven if the property remains owner occupied. These funds are also used to cover unreimbursed administration expenses in the Section 8 Housing Choice Voucher Program. The Low Rent Public Housing Program Fund is used to account for the operations of the 13 units (nine buildings) of family public housing that are rented to families who meet the low-income guidelines as established by the U.S. Department of Housing and Urban Development (HUD). Revenues for continuing operations consist primarily of dwelling rentals and operating subsidies from HUD. The Public Housing Capital Fund Program is used to account for grant funds provided to the Authority by HUD annually for capital and management activities, including the ongoing modernization of its public housing stock. The funds received for this program are transferred to the Low-Rent Public Housing Program. The Section 8 Housing Choice Voucher Program is used to account for the operation of the income-based program, which is funded by HUD. HUD contracts with the Authority, which, in turn, contracts with owners of rental housing to make assistance payments on the tenant's behalf. Payments made to the owners are generally the difference between the local payment standard and 30 percent of the family's adjusted gross income. Cash and Cash Equivalents The Authority's cash and cash equivalents consist of savings and checking accounts, cash on hand, and certificates of deposit. Restricted cash is shown separately from cash and cash equivalents. Receivables Property tax levies are set by the Authority and are certified to Otter Tail County each year for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. Real property taxes are generally due from taxpayers in equal installments on May 15 and October 15. The County remits tax settlements to the Authority at various times during the year. Taxes collectible in a given calendar year are generally recognized as revenue during that fiscal year. Amounts due from individuals and organizations are recorded as receivables at year-end. Receivables in the Low Rent Public Housing Program Fund have been shown net of an allowance for uncollectible accounts of $200. Prepaid Expenses Certain payments to vendors reflect expenses applicable to future acco unting periods are recorded as prepaid expenses. -14- 57 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2022 Restricted Assets Certain funds of the Authority are classified as restricted assets on the statement of net position because the restriction is either imposed by law through constitutional provisions or enabling legislation or imposed externally by creditors, granters, contributors, or laws or regulations of other governments. Therefore, their use is limited by applicable laws and regulations. Capital Assets Capital assets, which include land and buildings, are reported in the fund financial statements. Capital assets are defined by the Authority as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost 9r estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend lives are not capitalized. Capital assets are depreciated using the straight-line method. over their useful lives (5-50 years). The estimated useful lives are as follows: Buildings and improvements Furnitu~e, equipment and machinery Vehicles Net Position Classification Net position is classified and displayed in three components: 10-50 years 5-10 years 3 years a. Net investment in capital assets -Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position -Consists of .net position with constraints placed on the use either by (1) external groups such as creditors, granters, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. c. Unrestricted net position -All other net position that does not meet the definition of "restricted" or "invested in capital assets." -15- 58 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS-CONTINUED DECEMBER 31 , 2022 Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Grants The Authority participates in federal grant programs, which are governed by various rules and regulations of the grantor Authority. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agency; therefore, to the extent that the Authority has not complied with the rules and regulations governing the grants, refunds of any money received may be required and the collectability of any related receivable at December 31 , 2022 , may be impaired. In the opinion of the Authority, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants; therefore, no provision has been recorded in the accompanying financial statements for such contingencies. NOTE 2 DEPOSITS AND INVESTMENTS Deposits In accordance with Minnesota statutes, the Authority maintains deposits at those depository banks and brokerages authorized by the Authority Commission, all of which are covered by Federal Depository Insurance. Statutes require that all Authority deposits be protected by insurance, collateral, or surety bonds. The market value of the collateral pledged must be equal to or greater than 110% of the deposits not covered by insurance or bonds. At December 31 , 2022, the carrying amount of the Authority's deposits was $2,122,815 and the bank balance was $2,354 ,880. The entire bank balance was covered by the Federal Depository Insurance Corporation (FDIC) and pledged collateral at December 31 , 2022. Interest Rate Risk The Authority does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from changing interest rates. Credit Risk The Authority may invest idle funds in deposits that are properly secured by FDIC insurance coverage and are with designated depositories, which meet or exceed the Governmental National Mortgage Association Ratings. NOTE 3 RESTRICTED CASH Restricted cash consists of $9,044 in Low Rent Public Housing tenant security deposits and $15,792 restricted for HUD Section 8 vouchers. -16- 59 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS -CONTINUED DECEMBER 31, 2022 NOTE 4 LOANS RECEiVABLE The Authority offers several loan programs through its General & State/Local Fund. The loans due are from homeowners and landlords for assistance purchasing or rehabilitating properties. Homeowner rehab loans are "deferred loans" that are completely forgiven after ten years if all conditions are met. If the rehabilitated property is not sold, transferred, or otherwise conveyed within ten years, the conditions are met, and no repayment shall be due, the loan will be forgiven. If the conditions are not met, the recipient shall repay the principal amount of the loan, and the Authority shall have a lien for repayment of all funds. It is estimated that conditions are likely to be met by the borrower, and an allowance for the full amount of outstanding homeowner rehab loans has been recognized to offset the loan balance. Rental rehab loans are required to be paid back by the landlords in monthly payments, typically over ten years with a zero percent interest rate. Loans may have a forgivable portion, typically 25 percent, which will be forgiven after the first five years of loan compliance. The initial loan is reduced by the 25 percent forgivable portion when recorded on the books at inception. Down payment assistance loans are written for the term of the original mortgage on the home. The loans have a zero percent interest rate. The loans are to be repaid at final payment of original mortgage, upon loan refinancing, or upon sale or transfer of the property. The Authority records the loan at face value at inception, and it remains at that value until paid or written-off. Tax levy rehab loans are "deferred loans" that are forgivable at ten percent each year and completely forgiven after ten years, if all conditions are met. If the rehabilitated property is not sold, transferred, or otherwise conveyed within ten years, the conditions are met, and no repayment shall be due, the loan will be forgiven. If the conditions are not met, the recipient shall repay the principal amount of the loan, and the Authority shall have a lien for repayment of all funds. It is estimated that conditions are likely to be met by the borrower, and an allowance for the full amount of outstanding tax levy rehab loans has been recognized to offset the loan balance. -17- 60 of 91 OTTERTAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2022 Loans receivable activity for the year ended December 31 , 2022, was as follows: Loan receivable Homeowner rehab Rental rehab Down payment assistance Tax levy rehab provision Total Allowance for doubtful accounts: Homeowner rehab Tax levy rehab provision Total Total loan receivable, net Ending Balance Due Within Beginning Balance 1/1/2022 Additions Retirements 12/31/2022 One Year $ 629,281 $ 6,532 $ (297,855) $ (132,806) 10,000 (27,396) 245,098 89,138 331 ,011 --~2,_94_3 (65,150) 1,294,528 19,475 (523,207) (629,281) {6,532) 297,855 (331 ,011) --~(2~,9_4~3) __ 6_5~, 1_5_0 337,958 $ 112,292 71,742 268,804 790,796 (337,958) 18,120 18,120 (268,804) ---- (960,292) ---"-'(9.,_,4--'-7=5) 363,005 (606,762) ___ _ $ 334,236 $ 10,000 $ (160,202) $ 184,034 _$ __ 18_,1_2_0 NOTE 5 ASSETS HELD FOR RESALE The Authority has assets held for resale totaling $338,056 as of December 31 , 2022. These assets held for resale represent costs incurred to purchase and rehabilitate/renovate homes and also land that the Authority expects to be sold for economic development in the Pelican Rapids, MN and Battle Lake, MN areas. These assets have been classified as current on the statement of net position and are reported at cost. See also Note 7 for a loan received to assist in financing these activities. -18- 61 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS-CONTINUED DECEMBER 31, 2022 NOTE 6 CAPITAL ASSETS The Authority's capital asset activity for the year ended December 31, 2022, was as follows: Beginning Ending Balance Balance 1/1/2022 Additions Retirements 12/31/2022 Capital assets, not being depreciated: Land $ 32,990 $ $ -$ 32,990 Total capital assets not being depreciated 32,990 32,990 Capital assets, being depreciated: Buildings and improvements 1,688,010 (26,140) 1,661,870 Furniture, equipment and machinery 21,133 (21,133) Vehicles 9,657 9,657 Total capital assets being depreciated 1,709,143 9,657 (47,273) 1,671,527 Less accumulated depreciation for: Buildings and improvements (1,044,576) (39,885) 11,915 (1,072,546) Furniture, equipment and machinery (18,090) 18,090 Vehicles (268) (268) Total accumulated depreciation (1,062,666) (40,153) 30,005 (1,072,814) Total capital assets, being depreciated -net 646,477 (30,496) (17,268) 598,713 Total capital assets $ 679,467 $ {30,496) $ {17,268) $ 631,703 NOTE 7 LONG-TERM LIABILITIES On April 1, 2022, the Authority entered into a loan agreement with the Minnesota Housing Finance Association (MHFA). The Authority obtained an Interim Loan Pilot Program loan of $750,000 through the MHFA's Community Homeownership Impact Fund to be used for economic development related to assets held for resale in Note 5. The loan is due at its maturity date of June 1, 2024, and bears an interest rate of 3.75 percent. As of December 31, 2022, $167,006 has been requested and drawn down from MHFA. The following is a summary of the activity in long-term liabilities for the year: MHFA Interim Loan Totals Interest Rate 3:75% $ $ Balance 1/1/2022 Balance Addttions Retirements 12/31/2022 Current Maturities $ 167,006 ~$ ___ _ $ 167,006 ~$ ___ _ $ 167,006 ;:;.$ ___ _ $ 167,006 ;:;.$ ___ _ Requirements to maturity for long-term liabilities are as follows: Principal 2023 $ 2024 167,006 Total $ 167,006 -'ac--=-~ -19- 62 of 91 OTTERTAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS-CONTINUED DECEMBER 31 , 2022 NOTE 8 ANNUAL CONTRIBUTIONS CONTRACT The Authority has an annual contributions contract for Section 8 Housing Choice Vouchers and adjustments vary based on requirements. The total of administrative and HAP revenues was $512,550 for 2022. NOTE 9 RISK MANAGEMENT The Authority is exposed to various risks of losses including general liability, property damage and employee bodily injury. The insurance coverage is considered to be adequate to cover unexpected claims against the Authority. The Authority retains the responsibility to cover any settlements exceeding the specific coverage. There was no reduction in coverage from the prior year and settlements have not exceeded insurance coverage in the past three years. NOTE 10 COMMITMENTS AND CONTINGENCIES Grants The Authority participates in federal grant programs, which are governed by various rules and regulations of the grantor agency. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agency; therefore, to the extent that the Authority has not complied with the rules and regulations governing the grants, refunds of any money received may be required and the collectability of any related receivable at December 31, 2022, may be impaired. In the opinion of the Authority, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants; therefore, no provision has been recorded in the accompanying financial statements for such contingencies. Construction At December 31 , 2022, the Authority had construction project contracts in progress related to assets held for resale. The commitments for the remaining contract balances totaled $432,000. NOTE11 MANAGEMENTFEES The Authority had a management contract with Otter Tail County. Under this contract, the County will provide on-site workspace, internet access, technology, technological support, and office related functions to the Authority as needed. The County will make County employees available to support operations and purposes of the Authority. The services under the agreement will begin January 1, 2022 and continue through December 31 , 2022 and will renew automatically for additional one-year terms. Either party may terminate this agreement early, upon not less than 90 days' notice given in writing prior to the end of the fiscal year. The management fee paid by the Authority was $217, 168 for the year ended December 31 , 2022. -20- 63 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS -CONTINUED DECEMBER 31 , 2022 NOTE 12 NEW PRONOUNCEMENTS GASS Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, improves financial reporting by addressing issues related to public- private and public-public partnership arrangements (PPPs) and also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). The statement provides definitions of PPPs and APAs and provides uniform guidance on accounting and financial reporting for transactions that meet those definitions. A PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. An APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing , maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like transaction. The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Earlier application is encouraged. GASS Statement No. 96, Subscription-Based Information Arrangements provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBIT As). A SBITA is defined as a contract that conveys control of the right to use another party's (a SBITA vendor's) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction. Under this Statement, a government generally should recognize a right-to use subscription asset-an intangible asset- and a corresponding subscription liability. The requirements of this Statement will improve financial reporting by establishing a definition for SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Earlier application is encouraged. GASS Statement No . 99, Omnibus 2022, provides guidance on the following accounting matters: • Classification and reporting of derivative instruments within the scope of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument. • Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short-term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives. • Clarification of provisions in Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, related to (a) the determination of the public-private and public-public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset. • Clarification of provisions in Statement No. 96, Subscription-Based Information Technology Arrangements, related to the subscription-based information technology arrangement (SBITA) term, classification of a SBITA as a short-term SBITA, and recognition and measurement of a subscription liability. -21- 64 of 91 OTTERTAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS -CONTINUED DECEMBER 31 , 2022 • Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt. • Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP). • Disclosures related to nonmonetary transactions. • Pledges of future revenues when resources are not received by the pledging government. • Clarification of provisions in Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, as amended, related to the focus of the government-wide financial statement. • Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. • Terminology used in Statement 53 to refer to resource flows statements. The requirements of this statement are effective as follows: • The requirements related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance. • The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. • The requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter. GASB Statement No. 100, Accounting Changes and Error Corrections -An Amendment of GASB Statement No. 62, provides guidance on accounting and financial reporting requirements for accounting changes and error corrections. Statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this Statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements. This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections, such as their nature. In addition, information about the quantitative effects on beginning balances of each accounting change and error correction should be disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to beginning balances as restated. The requirements of this -22- 65 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS-CONTINUED DECEMBER 31 , 2022 Statement are effective for accounting changes and error corrections made in fiscal years beginning after June 15, 2023, and all reporting periods thereafter. Earlier application is encouraged. GASS Statement No. 101 , Compensated Absences, provides guidance on the recognition and measurement guidance for compensated absences. This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. This Statement also requires that a liability for specific types of compensated absences not be recognized until the leave is used. This Statement also establishes guidance for measuring a liability for leave that has not been used, generally using an employee's pay rate as of the date of the financial statements. A liability for leave that has been used but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be made. Certain salary-related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities. This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. Earlier application is encouraged. Management has not yet determined the effect these pronouncements will have on the Authority's financial statements. NOTE 13 SUBSEQUENT EVENTS No significant events occurred subsequent to the Authority's year end. Subsequent events have been evaluated through August 3, 2023, which is the date the financial statements were available to be issued. -23- 66 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF NET POSITION DECEMBER 31, 2022 Section 8 Low Rent Housing General & Public Choice State/Local Housing Vouchers Totals ASSETS Current assets Cash and cash equivalents $ 1,986,051 $ 72,427 $ 39,501 $ 2,097,979 Restricted cash 9,044 15,792 24,836 Accounts receivable Tenants, net of allowance for doubtful accounts 3,038 3,038 Taxes receivable 30,089 30,089 Loans receivable, current 18,120 18,120 Assets held tor resale 338,056 338,056 Prepaid expenses 20,837 15,763 36,600 Total current assets 2,393,153 100,272 55,293 2,548,718 Noncurrent assets Loans receivable, net of allowance for doubtful accounts 165,914 165,914 Capital assets Nondepreciable 32,990 32,990 Depreciable, liet 9,390 589,323 598,713 Total capital assets (net) 9,390 622,313 631,703 Total noncurrent assets 175,304 622,313 797,617 Total assets $ 2,568,457 $ 722,585 $ 55,293 $ 3,346,335 -24- 67 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF NET POSITION -CONTINUED DECEMBER 31, 2022 Section 8 Low Rent Housing General & Public Choice State/Local Housing Vouchers Totals LIABILITIES AND NET POSITION Current liabilities Accounts payable $ 14,772 $ 1,274 $ -$ 16,046 Payment in lieu of taxes 2,690 2,690 Tenant security deposits 9,044 9,044 Unearned revenue 627 627 Total current liabilities 14,772 13,635 28,407 Long-term liabilities Loan payable 167,006 167,006 Total long-term liabilities 167,006 167,006 Total liabilities 181,778 13,635 195,413 Net position Net investment in capital assets 9,390 622,313 631,703 Restricted 15,792 15,792 Unrestricted (deficit) 2,377,289 86,637 39,501 2,503,427 Total net position 2,386,679 708,950 55,293 3,150,922 Total liabilities and net position $ 2,568,457 $ 722,585 $ 55,293 $ 3,346,335 -25- 68 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEAR ENDED DECEMBER 31 , 2022 Operating revenues Dwelling rents Property taxes HUD operating grants Operating subsidy Housing Choice Vouchers Other government grants Tenant utility charges Fraud recovery Other Total operating revenues Operating expenses Service agreement fees Contract services Professional services Bad debt expense Advertising Office expense Travel Dues Staff training Consulting fees Tenant services Utilities Repairs and maintenance Insurance General expenses Payments in lieu of taxes Housing assistance payments Depreciation Total operating expenses Operating income (loss) General & State/Local $ -$ 1,316,930 81 ,069 67,179 1,465,178 113,516 197,867 121 ,529 9,475 1,066 4,398 945 1,000 5,294 6,562 7,680 8,643 18,953 60,526 268 557,722 907,456 -26- Low Rent Public Housing 30,093 $ 68,600 33 ,987 15,523 148,203 15,776 3,945 610 543 29,631 20,280 12,804 6,374 2,690 39,885 132,538 15,665 Section 8 Housing Choice Vouchers -$ 79,201 433,349 999 439 513,988 87,876 239 1,040 1,945 376 464,870 556,346 (42,358) Totals 30,093 1,316,930 147,801 433,349 81 ,069 33,987 999 83,141 2,127,369 217,168 197,867 125,474 9,475 1,066 5,247 2,528 1,000 5,294 8,507 7,680 29,631 28,923 31,757 67,276 2,690 464,870 40,153 1,246,606 880,763 69 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF REVENUES, EXPENSES AN0 CHANGES IN NET POSITION - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2022 Section 8 Low Rent Housing General & Public Choice State/Local Housing Vouchers Totals Nonoperating revenues (expenses) Interest income 57 57 Investment income 2,326 106 2,432 Interest expense (322) (322) Contribution from Otter Tail County 9,657 9,657 Gain (loss) on disposal of capital assets (17,268) (17,268) Total nonoperating revenues (expenses) 11,983 (17,533) 106 (5,444) Change in net position 919,439 (1,868) (42,252) 875,319 Net position -beginning of year 1,467,240 710,818 97,545 2,275,603 Net position -end of year $ 2,386,679 $ 708,950 $ 55,293 $ 3,150,922 -27- 70 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2022 Section 8 Low Rent Housing General & Public Choice State/Local Housing Vouchers Totals Cash flows from operating activities: Receipts from tenants $ $ 63,154 $ $ 63,154 Receipts from other governmental units 81,069 68,600 512,550 662,219 Receipts from property taxes 1,306,115 1,306,115 Other receipts 67,214 15,523 1,438 84,175 Payments to vendors (393,092) (85,909) (3,476) (482,477) Payments to other governmental units (124,693) (17,547) (87,876) (230,116) Payments for housing assistance (464,870) (464,870) Other payments (397,531) (6,409) (376) (404,316) Net cash provided (used) by operating activities: 539,082 37,412 (42,610) 533,884 Cash flows from capital and related financing activities: Proceeds on loans payable 167,006 167,006 Interest paid (322) (322) Net cash provided (used) for capital and related financing activities 167,006 (322) 166,684 Cash flows from investing activities: Payments received on loans receivable 160,202 160,202 Issuance of loans receivable (19,475) (19,475) Interest income 2,326 57 106 2,489 Net cash provided (used) for investing activities 143,053 57 106 143,216 Net increase (decrease) in cash and cash equivalents 849,141 37,147 (42,504) 843,784 Cash and cash equivalents, Beginning of year 1,136,910 44,324 97,797 1,279,031 Cash and cash equivalents, End of year $ 1,986,051 $ 81,471 $ 55,293 $ 2,122,815 Reconciliation of cash and cash equivalents Cash $ 1,986,051 $ 72,427 $ 39,501 $ 2,097,979 Restricted cash 9,044 15,792 24,836 TOTAL $ 1,986,051 $ 81,471 $ 55,293 $ 2,122,815 -28- 71 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY COMBINING SCHEDULE OF CASH FLOWS -CONTINUED FOR THE YEAR ENDED DECEMBER 31 , 2022 Low Rent Housing General & Public Choice State/Local Housing Vouchers Totals Reconciliation of cash flows from operating activities Operating income (loss) $ 907,456 $ 15,665 $ (42,358) $ 880,763 Adjustments to reconcile operating income (loss) to net cash from operating activities Depreciation 268 39,885 40,153 Bad debts (recovery) 9,475 9,475 Changes in assets and liabilities: Accounts receivable (223) (223) Taxes receivable (10,815) (10,815) Due from other funds 35 35 Assets held for resale (337,005) (337,005) Prepaid expenses (20,837) (15,763) (36,600) Accounts payable 1,682 (2,333) (252) (903) Payments in lieu of taxes 1,192 1,192 Tenant security deposits (11) (11) Unearned revenue (692) (692) Due to other funds (35) (35) Due to Otter Tail County (11 ,177) (273) (11,450) Cash flows provided (used) by operating activities $ 539,082 $ 37,412 $ (42,610) $ 533,884 Schedule of noncash investing, capital and financing activities: Transfer of vehicle from Otter Tail County $ 9,657 $ -$ -$ 9,657 Gain (loss) on disposal of capital assets (17,268) (17,268) -29- 72 of 91 OTTERTAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY SCHEDULE OF CAPITAL FUND COSTS DECEMBER 31 , 2022 Grant Year Grant Year Grant Year 2022 2021 2020 Grant Year 2019 MN46P17750122 MN46P17750121 MN46P17750120 MN46P17750121 Funds Approved $ 41,474 $ 34,495 $ 33,107 $ 33,054 Funds Expended 11 ,550 32,874 Excess of Funds Approved $ 41 474 $ 34,495 $ 21 ,557 $ 180 -30- 73 of 91 Brady Martz INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MA TIERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners Otter Tail County Housing and Redevelopment Authority Fergus Falls, Minnesota We have audited, in accordance with the 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 of Otter Tail County Housing and Redevelopment Authority as of and for the year ended December 31 , 2022, and the related notes to the financial statements and have issued our report thereon dated August 3, 2023. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and responses as items 2022-001 and 2022-002 that we consider to be significant deficiencies. Make Every Day Count I ww.bradymartz.com -31- 74 of 91 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, non-compliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Otter Tail County Housing and Redevelopment Authority's Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on Otter Tail County Housing and Redevelopment Authority's responses to the findings identified in our audit and described in the accompany schedule of findings and responses. Otter Tail County Housing and Redevelopment Authority's responses were not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the responses. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. BRADY, MARTZ & ASSOCIATES, P.C. GRAND FORKS, NORTH DAKOTA August 3, 2023 -32-Make Every Day Count I www.bradymartz com 75 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY SCHEDULE OF FINDINGS AND RESPONSES F;OR THE YEAR ENDED DECEMBER 31, 2022 Significant Deficiency 2022-001 Preparation of Financial Statements Criteria -An appropriate system of internal control requires the Authority to prepare financial statements ih compliance with accounting principles generally accepted in the United States of America. Condition -The Authority's personnel prepare periodic financial information for internal use that meets the needs of management and the board. However, the organization does not prepare financial statements, including accompanying note disclosures, as required by accounting principles generally accepted in the United States of America. The Authority has elected to have the auditors assist in the preparation of the financial statements and notes. Cause -The Authority elected to not allocate resources for the preparation of the financial statements. Effect -There is an increased risk of material misstatement to the Authority's financial statements. Repeat Finding -This is a repeat finding of 2021-001 Recommendation -We recommend the entity consider the additional risk of having the auditors assist in the preparation of the financial statements and note disclosures and consider preparing them in, the future. As a compensating control the entity should establish an internal control policy to document the annual review of the financial statements and schedules and to review a financial statement disclosure checklist. Views of Responsible Officials and Planning Corrective Actions -Due to cost constraints, the Authority will continue to have the auditors draft the financial statements and accompanying notes to the financial statements. .33. 76 of 91 2022-002 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY SCHEDULE OF FINDINGS AND RESPONSES-CONTINUED FOR THE YEAR ENDED DECEMBER 31 , 2022 Proposition of Journal Entries Criteria or Specific Requirement -The Authority is required to maintain internal controls at a level where underlying support for the general ledger accounts can be developed and a determination can be made that the general ledger accounts are properly reflected in accordance with GAAP. Condition -During our audit, adjusting entries to the financial statements were proposed in order to properly reflect the financial statements in accordance with GAAP. Cause -The Authority's internal controls continued to be developed throughout 2022 but were not fully sufficient to identify all adjustments necessary to properly reflect the financial statements in accordance with GAAP. Effect -The Authority's financial statements were materially misstated prior to adjustments detected as a result of audit procedures. Repeat Finding -This is a repeat finding of 2021-002 Recommendation -Accounting personnel will need to determine the proper balance in each general ledger account prior to the audit. Views of Responsible Officials and Planning Corrective Actions -The Authority's management and Board of Commissioners will review current and prior audit entries and implement a process to prepare those entries prior to the succeeding audit's field work for any entries the Authority is able to prepare. -34- 77 of 91 2021-001 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS FOR THE YEAR ENDED DECEMBER 31, 2022 Preparation of Financial Statements Criteria or Specific Requirement -Management is responsible for preparing the Authority's financial statements in accordance with generally accepted accounting principles (GAAP). The financial statement preparation in accordance with GAAP requires internal control over both: (1) recording, processing, and summarizing accounting data (that is, maintaining internal books and records); and (2) preparing and reporting appropriate government-wide and fund financial statements, including the related notes to the financial statements. A deficiency in internal control over financial reporting 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 of the financial statements on a timely basis. Auditing standards define a material weakness as a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Authority 's financial statements will not be prevented, or detected and corrected, on a timely basis. Condition -The Authority's personnel prepare periodic financial information for internal use that meets the needs of management and the Authority. However, the Authority does not have internal resources to maintain a general ledger and prepare full-disclosure financial statements required by GAAP for external reporting. The Authority .is aware of this deficiency, and obtains our assistance in the preparation of its annual financial statements. Current year status -See 2022-001 2021-002 Proposition of Journal Entries Criteria or Specific Requirement -A complete system of internal accounting control contemplates an adequate system for recording and processing adjusting journal entries significant to the financial statements. Condition -During the course of our engagement, we proposed numerous significant audit adjustments that had not been identified as a result of the Agency's existing internal controls, and therefore could have resulted in a material misstatement of the Agency's financial statements. Current year status -See 2022-002 -35- 78 of 91 HOUSING AND REDEVELOPMENT AUTHORITY OTTERTAIL COUNTY -MINNESOTA CORRECTIVE ACTION PLAN FOR THE YEAR ENDED December 31, 2022 2022-001 Contact Person Barbara Dacy, Executive Director Corrective Action Plan Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 No action is planned on the finding . The Authority feels that the additional costs to the Authority would not be significantly beneficial. The Authority does mitigate this situation through the review of the draft financial statements and accompanying notes to the financial statements. Planned Completion Date for CAP None. See above. 2022-002 Contact Person Barbara Dacy, Executive Director Corrective Action Plan The Authority's management and Board of Commissioners will review proposed audit entries and approve them. Any common adjustments, such as those identified in the current year, not likely to be recurring will be reviewed and approved by appropriate Authority personnel. Planned Completion Date for CAP December 31 , 2023 218-998-8730 ti) ~~ ottertailcounty.gov -36- hra@ottertailcounty.gov OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION _October 17, 2023__ BOARD MEETING DATE AGENDA ITEM #4B Community Assistance ORIGINATING DEPARTMENT/SERVICE Barbara Dacy 10/10//2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 256 Rejecting Construction Estimate; Determining Not to Award Construction Contract for the North Fields of Dalton PROPOSED REQUEST/JUSTIFICATION The HRA Board reviewed the procurement plan for the North Fields development at its April 18, 2023 meeting. Beginning on April 29, 2023, the RFP for General, Mechanical and Electrical Contracting Services was advertised on the county website, in the Daily Journal three times, on the Lake Region Builders website, and via direct solicitation to contractors. Respondents were given until close of business on May 16, 2023 to submit the required forms for consideration. JBS Construction, of Richville, Minnesota submitted a proposal for General Contractor, and Ohren Electric, of Dalton, Minnesota, submitted a proposal for Electrical Contractor. Staff contacted references contained in their submission for both firms, and both firms were highly recommended. At the Special Meeting on June 12, 2023, Resolution No. 243 was adopted to approve JBS Builders, LLC and Ohren Electric as the General Contractor and Electrical Contractor, respectively, and authorized preparation of the Design Build Agreement with the Contractors. Exhibit A of the Design Build Agreement was to contain the final construction estimate for the two triplexes in the City of Dalton. The construction estimate in the RFP was $1,351,000 and the Authority estimated a contingency of $150,000, for a total of approximately $1,500,000 for the triplexes. The construction estimate submitted by JBS Builders, LLC dated August 24, 2023, is $2,023,536 (See Attachment A). Staff reviewed the estimate in detail and discussed it with the Contractor. Unfortunately, this amount surpasses the financial resources available for the development, and as a result, staff is recommending that the Board not award a construction contract. Section 1.2 of the RFP states that the “HRA reserves the right not to award a contract pursuant to this RFP”. Further, Section 1.7 of the RFP states that the HRA “shall have no obligation to compensate any proposer for any costs incurred in responding to this RFP.” Staff recommends the Board approves Resolution No. 256. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/10/2023 ATTACHMENT LIST: Attachment A Construction Estimate Resolution No. 256 FINANCIAL IMPLICATIONS: NA BUDGETED: YES NO FUNDING: COMMENTS 79 of 91 PRELIMINARY Estimate BASED ON PLAN EMAILED TO ME AUG 15 and ( built as design build) 1/2 Lic#BC637708 32337 Ironwood Dr. Richville MN 56576 Cell: 218-232-0472 Email: jaysonbs@llve.com Send To: otc hra Dalton mn north fields development Project: 2 tri plex buildings in dalton 3o O J <J..'1 ,S flror.,.,_ G, CtJJ Fl.> fe,J{) Description see attached sheets 1.Builders bond jbs 2.Builders bond elec 3.Dirt work part 1 = 67567 part 2 = 50683 4.Cement slab on grade 5.Material 6.Labor 7.Elec 8.Insulation 9.Plumbing 10.Hvac 11.Cabintry 12.Flooring /"" �-let1"'-\ .l'-f .: i F 4# r- 13.Garage doors 14.Drywall/paint ceilings and walls all white same color white 15.Dumpster ,power,lift,bifi,job trailer, 16.Winter heat at 2500 per month per building Acceptance of est I I Date: 8/24/2023 Invoice# 4479 $25000.00 $8000.00 $118250.00 $171465.00 $504399.00 $305000.00 $180327.00 $38546.00 $113615.00 $166118.00 $82871.00 $122475.00 $14720.00 $97750.00 $50000.00 $25000.00 Total :$2023536.00 Down payment and Payment to be SO% down /estimate subject to change due to material shortages and delays of product all change orders billed at time and materials good for 15 days Attachment A 80 of 91 81 of 91 2/2 Thank you for your business. Terms: Accounts not paid in full in 30 days are subject to a finance charge of 8% per month (Annual Percentage Rate of 16%) 50 Cent Minimum Charge. RESOLUTION NO. 256 RESOLUTION REJECTING CONSTRUCTION ESTIMATE; DETERMINING NOT TO AWARD CONSTRUCTION CONTRACT FOR THE NORTH FIELDS OF DALTON WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) is authorized by Minnesota Statutes, Section 469 to carry out redevelopment activities; and WHEREAS, the City of Dalton (the “City”) owns property located on and near Court Street and Park Avenue (the “Property”); and WHEREAS, the Authority adopted Resolution No. 136 on July 20, 2020 authorizing demolition and site clearance and to provide redevelopment assistance in the City; and WHEREAS, the Authority is considering developing an affordable senior housing development to be known as North Fields of Dalton (the “North Fields of Dalton Proposed Development”) on a portion of the Property; and WHEREAS, the Authority staff solicited competitive request for proposals beginning on April 29, 2023 (the “RFP”) by advertisements for the North Fields of Dalton Proposed Development in the Fergus Falls Daily Journal, on the Otter Tail County Website, on the Lake Region Builders Association website; and by direct solicitation; and WHEREAS, Section 2.1 General Specifications estimated a construction budget of $1,351,000, without a contingency; and WHEREAS, two proposals were received; and WHEREAS, JBS Builders, LLC proposed as the General Contractor (the “General Contractor”); and WHEREAS, Ohren Electric proposed as the Electrical Contractor (the “Electrical Contractor”); and WHEREAS, it was determined that a Mechanical Contractor was not necessary; and WHEREAS, the Authority adopted Resolution No. 243 on June 12, 2023 approving JBS Builders, LLC and Ohren Electric as the General Contractor and Electrical Contractor, respectfully (the “Contractors”); and WHEREAS, the Authority drafted a Design Build Agreement (the “Agreement”) with the Contractors; and WHEREAS, Exhibit A of the Agreement was to contain the construction estimate; and WHEREAS, on August 24, 2023, the Contractors submitted an estimate totaling $2,023,536 (the “Construction Estimate”); and WHEREAS, the Authority reviewed the Construction Estimate with the Contractors; and 82 of 91 WHEREAS, the Authority has determined that the Construction Estimate surpasses the amount of funding available; and WHEREAS, the Authority has determined that it is not feasible to award a construction contract for the North Fields of Dalton Proposed Development. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1.That the Construction Estimate for the North Fields of Dalton Proposed Development is hereby rejected. 2.That, as provided in Section 1.2 of the RFP, the Authority hereby determines not to award a contract for the North Fields of Dalton Proposed Development. Upon the motion of _____________, seconded by ______________ and passed on a ____________vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 17th day of October, 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 83 of 91 OTTER TAIL COUNTY HOUSING AND REDEVELOPMENT AUTHORITY REQUEST FOR BOARD ACTION _October 17, 2023__ BOARD MEETING DATE AGENDA ITEM #4C Community Assistance ORIGINATING DEPARTMENT/SERVICE Barbara Dacy 10/17/2023 REQUESTOR’S SIGNATURE/DATE BOARD ACTION REQUESTED Resolution No. 257 Adopting Accounts Payable, Disbursements, and Check Writing Policy; Rescinding Resolution No. 187 PROPOSED REQUEST/JUSTIFICATION The purpose of this resolution to adopt a policy regarding all disbursements by the HRA, including but not limited to accounts payable, checks, and electronic forms of payment. The proposed policy also creates the procedures by which to incur, review, approve and pay these transactions. They have been included in one policy for ease of administration. The policy states the following: 1) It is the policy of the HRA to report all vendor account payable liabilities in the financial statements on an annual basis; 2) It is the policy of the HRA to ensure payments for the purchase of goods or services are made in a timely manner in the amount as required under the terms of the contract, agreement, purchase order, etc; and 3) The policy of the HRA that invoices are properly reviewed and analyzed to determine whether the service or product was properly requested and authorized and that the service or product, including price, is valid. The policy and corresponding procedures will therefore 1) ensure that the HRA’s year-end submission of the financial data schedule and the HRA’s financial statements are GAAP compliant and provide for more accurate reporting of the HRA’s financial position for the HRA’s various programs and projects; 2) provide prompt and accurate payment of goods and services; 3) disburse payment through approved disbursement types (e.g. checks, credit card, or electronic means) with appropriate documentation; and 4) ensures that checks are made in an efficient and timely manner to ensure that no fees or interest penalties accrue, and are paid from the proper bank accounts in the appropriate program. Further, because this policy addresses the procedures related “ACH” transactions (Automated Clearing House), staff has determined that Resolution No. 187, which was approved in February 2022, is no longer necessary, and should therefore be rescinded. Staff recommends the Board adopt the Resolution as presented. PREVIOUS ACTION ON REQUEST/OTHER PARTIES ADVISED EXECUTIVE DIRECTOR DATE: Barbara Dacy 10/17/2023 ATTACHMENT LIST: Resolution No. 257 and Exhibit A Policy FINANCIAL IMPLICATIONS: NA BUDGETED: YES NO FUNDING: NA COMMENTS 84 of 91 RESOLUTION NO. 257 RESOLUTION ADOPTING ACCOUNTS PAYABLE, DISBURSEMENTS, AND CHECK WRITING POLICY; RESCINDING RESOLUTION NO. 187 WHEREAS, the Otter Tail County Housing and Redevelopment Authority (the “Authority”) operates a variety of housing and redevelopment programs (the “Programs”); and WHEREAS, the Authority has determined it prudent to adopt a policy regarding accounts payable, check writing, and disbursements; and WHEREAS, the Authority adopted Resolution No. 187 entitled “Authorizing Recurring Automated Clearing House Withdrawals For Certain Vendors” on February 17, 2022 (the “ACH Resolution”); and WHEREAS, the Authority has drafted a comprehensive policy regarding appropriate procedures with regard to accounts payable, disbursements, and checks (the “Policy”) as represented in Exhibit A; and WHEREAS, the “Policy” as represented in Exhibit A are necessary and appropriate; and WHEREAS, the ACH Resolution is no longer necessary as a result of the proposed adoption of the Policy. NOW, THEREFORE, IT IS HEREBY RESOLVED: 1.That the Policy represented in Exhibit A is hereby adopted. 2.That the ACH Resolution is hereby rescinded. 3.That the Executive Director is authorized, empowered, and directed to undertake any other tasks as she deems necessary or desirable in her discretion to effectuate the purposes of the foregoing Resolution. Upon the motion of ___________, seconded by ____________, and passed on a __________ vote, the above resolution is hereby adopted by the Otter Tail County Housing and Redevelopment Authority Board of Commissioners. Adopted this 17th day of October, 2023. Dated: _______________________________ OTTER TAIL COUNTY HRA BOARD OF COMMISSIONERS Attest:________________________________ By:_______________________________ 85 of 91 EXHIBIT A ACCOUNTS PAYABLE, DISBURSEMENT, AND CHECK WRITING POLICY ACCOUNTS PAYABLE POLICY It is the policy of the HRA to report all vendor account payable liabilities in the financial statements on an annual basis. This policy will ensure that the HRA’s year-end submission of the financial data schedule and the HRA’s financial statements are GAAP compliant and provide for more accurate reporting of the HRA’s financial position for the HRA’s various programs and projects. ACCOUNTS PAYABLE PROCEDURES Accounting All payables are to be entered into the accounting software system as billing statements or invoices are received from the vendor. The amount of the liability shall be valued based upon the supporting documentation related to the transaction with adjustments for returned or un-received merchandise taken into account. Upon receipt of the proper documentation, the liability shall be accrued as an expense/asset and payable of the appropriate project/program within the HRA’s accounting system and in accordance with the distributions defined in the HRA’s cost allocation plan in effect for the period incurred. The liabilities will be posted within the period that they are incurred. A liability is deemed to have been incurred when the amount becomes payable. For tangible items (e.g., office supplies or maintenance materials), the liability will be considered incurred when the ordered item is received. Intangible items such as insurance, training, and advertising will be considered incurred when the item is ordered. Utility expenses will be considered incurred when the resources are used which is often prior to the invoice date. Accounts Payable Management 1. After ordered merchandise has been received, the approved shipping bill, invoice, order confirmation, and/or receipt will be provided to the Finance office. 2. The accounting specialist will reconcile where monthly vendor statements are provided, such as credit card statements, to the HRA’s monthly statements to verify that goods or services were actually received and that the amounts match the HRA’s monthly statements. 3. The unpaid payable invoices shall be filed together until they are matched with a payment. The invoices will be attached with the payment information during the disbursements process as the voucher is paid. 86 of 91 218-998-8730 @ HOUSING AND REDEVELOPMENT AUTHORITY OTTER TAIL COUNTY IS AN EQUAL OPPORTUNITY EMPLOYER Government Services Center 500 West Fir Avenue Fergus Falls, MN 56537 '5) EOU/\1. HOUSING OPPORTUNITY @ ottertailcounty.gov 4. Liabilities of the HRA shall be accrued as a payable prior to payment. Accounts payable liabilities will be relieved in accordance with the HRA’s disbursements policy. DISBURSEMENT POLICY This policy applies to all disbursements of the HRA. It is the policy of the HRA to ensure payments for the purchase of goods or services are made in a timely manner in the amount as required under the terms of the contract, agreement, purchase order, etc. The method of disbursement includes payment by check, electronic fund transfer, automated clearing house, and credit card. Proper documentation and approval should be obtained prior to payment of payables to ensure effective controls over disbursement of HRA funds. DISBURSEMENT PROCEDURES Authorized Payment Types All payments shall be made by check, electronic fund transfer (EFT), automated clearing house (ACH) or credit cards. All checks must follow the check writing policy (refer to check writing policy). Credit card payment is permitted only for those authorized goods and services allowed to be purchased under the HRA’s credit card policy (refer to credit card policy). No cash withdrawals from the bank or ATM for payments are allowed. Supporting Documentation and Payment Processing Payments should only be processed if supported by sufficient documentation. The supporting documentation at a minimum includes sufficient information to substantiate the amount as well as the business purpose, the payee's name, address, and the date and nature of the transaction, including: Verification that the expense is properly supported by the vendor's original invoice, a receiving document and a purchase order, if applicable; Verification that the purchase requisition and purchase, if used, were properly approved prior to ordering the goods or services; Determination that goods and services were received; and Determination that allowable discounts are taken. HRA staff assigned to authorize the payment must approve payment request with the supporting documentation by signing and dating the supporting documentation prior to the printing of checks. Payments shall be made timely to avoid any late payment fees, interest, or other payment related charges. It is the policy of the HRA that any charge failing to have the required documentation will be the direct financial responsibility of the individual who caused the HRA to incur an inappropriate cost, interest or late fee. 87 of 91 Miscellaneous Documentation for payments, other than payroll, to an authorized check signer must be approved by a different authorized check signer (i.e. cannot write a check to yourself). CHECK WRITING POLICY The policy of the HRA requires that invoices are properly reviewed and analyzed to determine whether the service or product was properly requested and authorized and that the service or product, including price, is valid. All payments will be approved by the Executive Director or Housing Program Supervisor. Payments are to be made in an efficient and timely manner to ensure that no fees or interest penalties accrue. Checks are to be paid from the proper bank accounts in the appropriate program from which the expense originated. The check writing policy and associated procedures applies to all checks issued by the HRA. CHECK WRITING PROCEDURES Check Processing Schedule and General Procedures The HRA will employ the following check processing schedule and general writing procedures. Checks will be processed at a minimum two times a month. Checks are to be processed in the PHA-Web software system. Checks are to be pre-numbered or may be automatically numbered, electronically signed, and printed on blank check paper using the HRA’s accounting software system. Checks are not to be post-dated, made out to cash, or signed with the amount left blank. Invoice Approval Process These procedures are designed to ensure that all checks have adequate documentation and that the proper authorizations have been obtained. Invoices are to be received by the finance office. All receipts for payment should be approved by the Housing Program Supervisor or Executive Director. The finance office will perform the following steps to process invoices prior to payment: Check the mathematical accuracy of each vendor invoice. Compare the nature, quantity and price of all items ordered per the vendor invoice to the purchase order, if applicable. Verify the approval of the project/program manager associated with the goods or services purchased (which includes confirmation of receipt of goods and services). Approvals shall be documented with initials or signatures of the approving individual on the invoice. Verify the program/project to be charged, the general ledger distribution and the fund source/bank account to be used is correct. 88 of 91 Check Processing Upon the approval of invoices, the finance office will perform the following steps to process the payments: A check register shall be maintained which documents the beginning and ending sequence check numbers and the dates. All payments require two signatures. A copy of the check voucher will be attached to the invoice plus any other documentation, such as purchase orders or shipping documents, and filed. Physical Security of Checks All unused check stock will be locked in a safe or cabinet with access limited to authorized staff. Void or spoiled checks will be stamped voided and retained by the Finance department. 89 of 91 OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 5. EXECUTIVE DIRECTOR REPORT 90 of 91 1ir EOU/\L HOUSING OPPORTUNITY OTTER TAIL COUNTY – MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY ITEM 6. GENERAL DISCUSSION TOPICS BY COMMISSIONERS and ADJOURN 91 of 91 1ir EOU/\L HOUSING OPPORTUNITY