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TABLE OF CONTENTS

Page INDEPENDENT AUDITOR’S REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (Required Supplemental

Information) 4 BASIC FINANCIAL STATEMENTS Statement of Net Position 11 Statement of Revenues, Expenses and Changes in Net Position 12 Statement of Cash Flows 13 Notes to Basic Financial Statements 15 SUPPLEMENTAL INFORMATION

Financial Data Schedule 56 Schedule of Actual Capital Fund Program Costs and Advances 61

SINGLE AUDIT SECTION Schedule of Expenditures of Federal Awards 63 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 64

Independent Auditor’s Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 66

Schedule of Findings and Questioned Costs 68

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2

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Authority’s business-type activities as of December 31, 2015, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note B-14 to the financial statements, in 2015 the Authority adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions. Our opinion is not modified with respect to this matter. Other Matters Required Supplemental 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, 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 supplemental information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority’s financial statements as a whole. The accompanying financial data schedule and schedules of actual program costs and advances are presented for purposes of additional analysis as required by U.S. Department of Housing and Urban Development, and are not a required part of the financial statements of the Authority. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements, and is not a required part of the financial statements of the Authority. The supplemental information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements.

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The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements taken as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 29, 2016 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 to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance. August 29, 2016 Melbourne, Florida

Berman Hopkins Wright & LaHam CPAs and Associates, LLP

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Management Discussion and Analysis Pinellas County Housing Authority (the “Authority”) offers the readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the year ended December 31, 2015. We encourage readers to consider the information presented here in conjunction with the Authority’s financial statements. This financial report is designed to provide our residents, the citizens of Pinellas County, Florida, all federal and state regulatory bodies, and any creditors with a general overview of the Authority’s finances and program compliance. Financial Highlights

The assets and deferred outlfows of resources of the Authority exceeded its liabilities and deferred inflows of resources by $46,947,249 (net position).

The Authority’s total cash, cash equivalents and investments (excluding investment in joint ventures) as of December 31, 2014 and 2015 are $10,427,493 and $12,586,433 respectively, representing an increase of $2,158,940.

The Authority received revenue from HUD of $27,309,337 for 2015, which includes funds for capital asset activities.

Public housing maintained occupancy of 99% for the fiscal year. Overview of Financial Statements The financial statements included in this annual report are those of a special-purpose governmental agency engaged in a single business-type activity prepared on an accrual basis. Over time, significant changes in the Authority’s net assets serve as a useful indicator of the entity’s financial health. To fully assess the financial health of any authority, the reader must also consider other non-financial factors such as changes in family composition; fluctuations in the local economy, HUD mandated program changes, and the physical condition of capital assets. The following statements are included:

Statement of Net Position - this statement reports the Authority’s assets, liabilities, and net position at the end of the fiscal year. You can think of the Authority’s net position as the difference between the Authority’s rights (assets and deferred outflows of resources) and the Authority’s obligations (liabilities and deferred inflows of resources).

Statement of Revenues, Expenses, and Changes in Net Position - this statement

presents information showing how the Authority’s net position increased or decreased during the current fiscal year. All changes in net positions are reported as soon as the underlying event giving rise to the change occurs, regardless of when cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will result in cash inflows and cash outflows in future periods.

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Overview of Financial Statement (continued)

Statement of Cash Flows - this statement presents information showing the total cash receipts and cash disbursements of the Authority during the current fiscal year. The statement reflects the net changes in cash resulting from operations plus any other cash requirements during the current year (i.e. capital additions, debt service, prior period obligations, etc.). In addition, the statement reflects the receipt of cash that was obligated to the Authority in prior periods and subsequently received during the current fiscal year (i.e. accounts receivable, notes receivable, etc.).

Notes to the Basic Financial Statements - notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided. These notes provide greater understanding on the overall activity of the Authority and how values are assigned to certain assets and liabilities and the longevity of these values. In addition, notes reflect the impact (if any) of any uncertainties the Authority may face.

In addition to the basic financial statements listed above, our report includes supplemental information. This information provides more detail on the Authority’s various programs and the required information mandated by regulatory bodies that fund the Authority’s various programs. The Authority’s Programs Low Rent Public Housing - under this program, the Authority rents units that it owns to low-income households. The Low Rent Public Housing Program is operated under an Annual Contributions Contract (ACC) with HUD, and HUD provides Operating Subsidy to enable the Authority to provide housing at a rental rate that is based upon 30% of household income, adjusted for family composition and certain allowances. Public Housing Capital Fund Program - this program is the primary funding source for physical improvements to the Authority’s public housing properties. Resident Opportunity and Self-Sufficiency - this program provides funds for a coordinator to assist public housing residents with supportive services, resident empowerment activities, and assistance in becoming economically self-sufficient. Housing Choice Voucher (HCV) Program and Veterans Affairs Supportive Housing (VASH) - the Authority administers contracts with independent landlords and private property owners. Landlords and property owners enter into Housing Assistance Payment contracts with the Authority. The Authority then subsidizes the family’s rent through a Housing Assistance Payment made to the landlord. The program is administered under an Annual Contributions Contract (ACC) with HUD. HUD provides Annual Contributions funding to enable the Authority to approve market rate leases, with the participants’ portion of rent set at 30% of household income, adjusted for family composition and certain allowances. New Construction Section 8 Program - Norton Apartments is a multifamily community consisting of 48 units. All units are subsidized by HUD under a project-based Housing Assistance Payments Contract.

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The Authority’s Programs (continued)

Business Activities - the Authority owns and operates a 240-unit affordable apartment complex, East Lake Club Apartments in Oldsmar, Florida; a 10-unit efficiency complex, Redwood Apartments located in unincorporated Pinellas County, Florida; a parcel of land in Largo, Florida for the development of Pinellas Heights; a parcel of land in unincorporated Pinellas County, Florida for the development of Landings at Cross Bayou; two parcels of land for future development: 1) a parcel in Largo contiguous to the Authority’s administrative office; and 2) a parcel in Seminole; and the Authority’s central office located in Largo, Florida. Business activities also includes two cost centers, a cost center for affordable housing property management and a cost center for relocation of residents for the Landings at Cross Bayou Rental Assistance Demonstration development project (formal agreement with Developer to perform services). Central Office Cost Center (“COCC”) - is a business unit within the Authority that generates revenue from fees for service and other business activities. The COCC consists of activities funded through these revenue sources. Blended Component Units

Blended component units consist of Pinellas County Housing and Economic Development Corporation, Pinellas Heights, LLC (Pinellas Heights), Landings at Cross Bayou, LLC, PCHA Development, LLC, and Palm Lake Village Housing Corporation (see Note A-1).

Pinellas County Housing and Economic Development Corporation - a Florida not for profit 501 (c)(3) corporation that wholly owns Pinellas Heights, LLC and Landings at Cross Bayou, LLC.

Pinellas Heights, LLC - this is the development entity for a property in the construction stage of 153 senior apartments consisting of 21 public housing units and 132 affordable project based housing choice voucher units. Construction completion was in April of 2014 (see Note A-1).

Landings at Cross Bayou, LLC - this is the development entity for a property of 184 family apartments (formerly known as French Villas and a Rental Assistance Demonstration project) consisting of 184 affordable project based housing choice voucher units (see Note A-1). Heritage Oaks, LLC - is the development entity for The Oaks at Ridgecrest, a new community development that is currently in the planning phase.

PCHA Development, LLC - is wholly owned by the Authority and will receive all development fee income earned for the Pinellas Heights LLC and Landings at Cross Bayou LLC projects.

Palm Lake Village Housing Corporation -incorporated on July 7, 1986, consists of Palm Lake Village, Crystal Lakes Manor, and Magnolia Gardens Assisted Living Facility.

Palm Lake Village - 475 one and two bedroom affordable apartments for residents age 55 and older.

Crystal Lake Manor - 236 one and two bedroom affordable apartments for residents age 55 and older.

Magnolia Gardens Assisted Living Facility - 100 studio, one and two bedroom apartments that provide affordable assisted living to residents age 60 and older.

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Financial Analysis

2015 2014 Net ChangeCurrent assets 14,875,813$ 6,876,127$ 7,999,686$ Capital assets, net 54,702,644 49,919,009 4,783,635 Other noncurrent assets 14,472,643 19,723,205 (5,250,562)

Total assets 84,051,100 76,518,341 7,532,759

Deferred outflows of resources 470,385 - 470,385

Current liabilities 2,810,074 2,076,133 733,941 Long-term debt 31,877,719 25,701,136 6,176,583 Other noncurrent liabilities 2,594,303 429,428 2,164,875

Total liabilities 37,282,096 28,206,697 9,075,399

Deferred inflows of resources 292,140 - 292,140

Net investment in capital assets 22,137,463 23,116,254 (978,791) Restricted 11,887,547 11,830,057 57,490 Unrestricted 12,922,239 13,365,333 (443,094)

Total net position 46,947,249$ 48,311,644$ (1,364,395)$

Statement of Net Position

Current Assets increased by $7,999,686 primarily due to an increase in current cash and cash equivalents of $1,919,151, increase in accrued interest receivable of $457,182. The increases were offset by a decrease in prepaid expenses of $172,367. In addition, investments of approximately $5,500,000 were reclassified from noncurrent assets to current assets. Refer to the financial highlights for the Authority’s change in total cash, cash equivalents and investments (excluding investment in joint ventures).

Net Capital Assets increased by $4,783,635 primarily due to capital additions of $8,165,555 offset by depreciation expense of $3,381,922. Significant additions include structure improvements of $6,395,261 for East Lake Club, capital improvements of $553,175 for public housing, $80,460 for Magnolia Gardens Assisted Living Facility, $588,062 for Crystal Lake Manor Apartments mainly consisting of Energy Grant HVAC and Water Heater replacements, $496,807 for Palm Lake Village Apartments unit upgrades, $35,155 for Norton Apartments and $16,635 for outparcel demolition of building and sod installation.

Other Noncurrent Assets decreased by $5,250,562 mainly due to the reclassification of investments from noncurrent to current assets.

Deferred Outflows of Resources increased by $470,385 due to the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pension, (“GASB No. 68”) and the recording of changes in net pension liability and contributions subsequent to the measurement date (see Note B-8).

Total Liabilities increased by $9,075,399 primarily due to a net increase in debt of $6,258,163 (see Note B-7), an increase of $2,096,202 for Net Pension Liability and $640,128 for an increase in accrued expenses.

Deferred Inflows of Resources increased by $292,140 due to the implementation of GASB No. 68 and changes in net pension liability (see Note B-8).

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Financial Analysis (continued)

Net Position - The difference between an organization’s assets and its liabilities is its net position. Net position is categorized as one of three types.

1. Net investment in capital assets - The Authority’s capital assets, net of accumulated depreciation and related debt.

2. Restricted - the Authority’s net position which is subject to constraints imposed by law or agreement.

3. Unrestricted - the Authority’s net position that is neither invested in capital assets nor restricted which changes principally due to operations. These resources are available to meet the Authority’s ongoing obligations to its residents and creditors.

2015 2014 Net Change Operating revenue

HUD revenue 26,804,865$ 24,376,469$ 2,428,396$ Tenant revenue 9,550,791 9,303,069 247,722 Grant revenue 1,222,043 701,437 520,606 Other revenue 956,808 2,525,923 (1,569,115)

Total operating revenue 38,534,507 36,906,898 1,627,609

Operating expensesAdministrative 4,329,695 3,976,981 352,714 Tenant services 1,588,407 2,463,205 (874,798) Utilities 1,486,307 1,624,476 (138,169) Maintenance 2,587,899 2,437,530 150,369 Protective services 128,371 128,781 (410) General 1,269,642 1,200,265 69,377 Depreciation 3,381,922 3,461,921 (79,999) Housing assistance payments 22,710,701 21,563,449 1,147,252

Total operating expenses 37,482,944 36,856,608 626,336

Operating income (loss) 1,051,563 50,290 1,001,273

Non operating revenues (expenses)Gain on disposal of fixed assets - 5,500 (5,500) Interest income 536,068 539,616 (3,548) Interest expense (1,513,347) (1,379,499) (133,848)

Total non operating revenues (expenses) (977,279) (834,383) (142,896)

Change in net position before capital contributions 74,284 (784,093) 858,377 Capital contributions

HUD capital grants 504,472 259,721 244,751

Change in net position 578,756 (524,372) 1,103,128 Total net position - beginning 48,311,644 48,836,016 (524,372) Prior period adjustment (1,943,151) - (1,943,151)

Total net position - ending 46,947,249$ 48,311,644$ (1,364,395)$

Changes in Net Position

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Financial Analysis (continued) Total Operating Revenue increased by $1,627,609 mainly due to increased HUD revenue of $3,043,470 from the Housing Choice Voucher program, offset by a decrease of $693,803 in portability revenues for the Housing Choice Voucher program and $800,000 for developer fees for Pinellas Heights that were accrued in 2014. Operating Expenses are categorized by the Authority as housing assistance payments, depreciation expense, administrative, tenant services, utilities, maintenance, protective services and general. Total Operating Expenses increased by $626,336 during 2015 as compared to 2014 primarily as result of increased Housing Assitance Payments of $1,147,252, increased administrative expenses of $352,714, offset by a decrease in tenant services of $874,798 due to the disposition of French Villas. Non Operating Expenses net of Non Operating Revenue increased $142,896 primarily due to the increase of interest expense $133,848. Capital Contributions increased by $244,751 during 2015 as compared to 2014 primarily due to RAD funding and construction of a new laundary facility for Lakeside Terrace. Capital Asset and Debt Activity

Throughout 2015, the Authority had significant capital additions. These improvements included new roofing, flooring, kitchen renovations, bathroom renovations, HVAC’s and water heater replacements with the Energy Grant awarded for Crystal Lake Manor and unit renovations for Palm Lake Village and East Lake Club Apartments. At the end of the fiscal year 2015, the Authority had debt of $32,565,181 which is comprised of $31,877,719 in long-term debt and $687,462 as the current portion of long-term debt. Principal payments of $609,088 were made in 2015. During the year, the Authority obtained a new loan for Crystal Lakes Manor Apartments of $2,500,000 and the remaining loan amount of $2,363,151 for the 2014 Crystal Lake Manor Apartments was drawn down. In addition, the Authority obtained another loan for Magnolia Gardens for $2,000,000. These Loans were obtained to pay for the structural construction of East Lake Club. Factors Affecting Next Year’s Budget

The Authority is primarily dependent upon HUD for the funding of its Low Rent Public Housing, Section 8 Housing Choice Voucher, Veterans Affairs Supportive Housing, and Public Housing Capital Fund programs; therefore, the Authority is affected more by the Federal budget than by local economic conditions. The current funding levels are anticipated to continue for FY 2016. Economic Factors

Significant economic factors affecting the Authority are as follows:

Federal funding provided by Congress to the U.S. Department of Housing and Urban Development;

Local inflationary, recessionary and employment trends, which can affect resident incomes and therefore the amount of rental income;

Inflationary pressure on utility rates, housing costs, supplies and other costs.

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Conclusion The Authority continues to operate a diverse housing portfolio to provide revenue not dependent on Federal sources. The Authority’s management is committed to staying abreast of regulations and appropriations as well as performing ongoing analysis of budgets, expenses and program compliance to assure the Authority continues to operate at the highest standards and degree of integrity. During 2015, the Authority completed 90% of the structural construction for East Lake Club. The remainder construction was completed in the second quarter of 2016. The Authority will continue to deliver quality service to its customers and will strive to continue to increase the availability of quality affordable housing for very-low to moderate income citizens of Pinellas County through a variety of mixed-finance approaches. The Authority is continuing to search for opportunities to increase revenues, increase resident employment and self-sufficiency, reduce dependency on federal funding, promote staff development, and develop cost saving opportunities. Requests for Information This financial report is designed to provide our residents, the citizens of Pinellas County, Florida, all Federal and State regulatory bodies, and any creditors with an overview of the Authority’s finances. If you have questions regarding these financial statements or supplemental information, they should be addressed to Debra Johnson, Executive Director, 11479 Ulmerton Road, Largo, FL 33778.

Pinellas County Housing Authority

STATEMENT OF NET POSITION

December 31, 2015

ASSETS

CURRENT ASSETSCash and cash equivalents - unrestricted 4,935,055$ Cash and cash equivalents - restricted 1,591,540 Investments - unrestricted 5,717,770 Investments - restricted 129,614 Receivables, net 1,080,065 Prepaid expenses 149,139 Inventory, net 56,735 Accrued interest receivable 1,215,895

Total current assets 14,875,813 NONCURRENT ASSETS

Cash and cash equivalents - restricted 212,454 Note receivable - restricted 10,005,010 Note receivable - unrestricted 2,500,000 Capital assets, net 54,702,644 Investment in joint ventures 600,000 Intangible assets, net 520,190 Prepaid escrows - restricted 634,989

Total assets 84,051,100

DEFERRED OUTFLOWS OF RESOURCESDefined benefit pension plan 470,385

LIABILITIES

CURRENT LIABILITIESCurrent portion of long-term debt 687,462 Accounts payable and accrued expenses 1,181,767 Accrued salaries 89,003 Accrued compensated absences 13,274 Unearned revenue 99,050 Accrued interest payable 86,002 Payments in lieu of taxes 178,206 Tenant security deposits 364,755 Other current liabilities 110,555

Total current liabilities 2,810,074

NONCURRENT LIABILITIESLong-term debt 31,877,719 Net pension liability 2,096,202 Accrued compensated absences 285,647 Family self-sufficiency escrow 212,454

Total liabilities 37,282,096

DEFERRED INFLOWS OF RESOURCES

Defined benefit pension plan 292,140 NET POSITION

Net investment in capital assets 22,137,463 Restricted 11,887,547 Unrestricted 12,922,239

Total net position 46,947,249$

The accompanying notes are an integral part of this financial statement.

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STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

December 31, 2015

OPERATING REVENUESHUD operating revenues 26,804,865$ Tenant revenue, net 9,550,791 Grant revenue 1,222,043 Other operating revenue 956,808

Total operating revenues 38,534,507

OPERATING EXPENSESAdministrative 4,329,695 Tenant services 1,588,407 Utilities 1,486,307 Maintenance 2,587,899 Protective services 128,371 General 1,269,642 Depreciation 3,381,922 Housing assistance payments 22,710,701

Total operating expenses 37,482,944

OPERATING INCOME 1,051,563

NON-OPERATING REVENUES (EXPENSES)Interest income - unrestricted 77,811 Interest income - restricted 1,076 Mortgage note interest income 457,181 Interest expense (1,513,347)

Total non-operating revenues (expenses) (977,279)

Change in net position before capital contributions 74,284

CAPITAL CONTRIBUTIONSHUD capital grants 504,472

Change in net position 578,756 Total net position - beginning 48,311,644

Prior period adjustment (1,943,151)

Total net position - ending 46,947,249$


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STATEMENT OF CASH FLOWS

December 31, 2015

CASH FLOWS FROM OPERATING ACTIVITIES HUD operating grants received 26,758,472$ Collections from tenants 9,570,198 Collections from other sources 1,988,237 Payments to employees (6,026,513) Payments to suppliers (4,621,002) Housing assistance payments (22,681,896)

Net cash provided by operating activities 4,987,496

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

HUD capital grants received 513,214 Interest paid (1,500,423) Payments on long-term debt (609,088) Proceeds from long-term debt 6,863,151 Purchase of property and equipment (8,174,297)

Net cash used in capital and related financing activities (2,907,443)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of investments (134,154)

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,945,899

Cash and cash equivalents at beginning of year 4,793,150

Cash and cash equivalents at end of year 6,739,049$

AS PRESENTED IN THE STATEMENT OF NET POSITION:Cash and cash equivalents - unrestricted 4,935,055$ Cash and cash equivalents - restricted 1,591,540 Cash and cash equivalents - restricted noncurrent 212,454

6,739,049$


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STATEMENT OF CASH FLOWS (CONTINUED)

December 31, 2015

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Operating income 1,051,563$ Adjustments to reconcile operating income to net cash provided by operating activities

Depreciation 3,381,922 Provision for bad debt, net of recoveries 49,805 (Increase) decrease in assets:

Receivables, net (296,457) Prepaid expenses 172,367 Inventory, net (2,321) Intangible assets, net (66,265) Prepaid escrows - restricted 1,127 Defined benefit pension plan (178,669)

Increase (decrease) in liabilities: Accounts payable and accrued expenses 613,730 Accrued salaries 2,925 Accrued compensated absences 39,049 Payments in lieu of taxes 9,448 Unearned revenue 6,451 Tenant security deposits 25,087 Net pension liability 634,559 Defined benefit pension plan (481,084) Other current liabilities 24,259

Net cash provided by operating activities 4,987,496$


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NOTES TO BASIC FINANCIAL STATEMENTS

December 31, 2015

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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Reporting entity Pinellas County Housing Authority (the “Authority”), a governmental agency, was created pursuant to Florida Statutes Chapter 421 by Pinellas County, Florida (the “County”). The primary purpose of the Authority is to develop, acquire and operate safe, decent, sanitary, and affordable housing for low-income families in Pinellas County in accordance with federal legislation and regulations. The Authority's governing board consists of a five member Board of Commissioners (the “Board”), the members of which are appointed by the Governor of the State of Florida. The Authority is not a component unit of the County, as defined in Governmental Accounting Standards Board (“GASB”) Statement No. 61, The Financial Reporting Entity: Omnibus, as amended, as the Board independently oversees the Authority’s operations. The definition of the reporting entity as defined by GASB No. 61, is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization’s governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. Blended component units

Some component units, despite being legally separate from the primary government, are so integrated with the primary government that they are in substance part of the primary government. These component units are blended with the primary government. The Authority’s operations include five blended component units, which are all included in the basic financial statements of the Authority. The blended component units are as follows:

Palm Lake Village Housing Corporation (“PLVHC”) Pinellas County Housing and Economic Development Corporation (“PCHEDC”) PCHA Development, LLC Pinellas Heights, LLC Landings at Cross Bayou, LLC Heritage Oaks, LLC

PLVHC is a Florida not for profit corporation and is an instrumentality of the Authority. PLVHC has the same governing board as the Authority. PLVHC owns and operates Palm Lake Village, Crystal Lake Manor Apartments and Magnolia Gardens Assisted Living Facility.



December 31, 2015

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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

1. Reporting entity (continued)

Blended component units (continued)

PCHEDC is a Florida not for profit 501(c)(3) corporation and is an instrumentality of the Authority. PCHEDC has the same governing board as the Authority. PCHEDC wholly owns Pinellas Heights, LLC and Landings at Cross Bayou, LLC.

PCHA Development, LLC is a Florida limited liability company and is an instrumentality of the Authority. PCHA Development, LLC is wholly owned by PCHA. PCHA Development, LLC will receive a portion of all development fee income earned for the Pinellas Heights and Landings at Cross Bayou projects.

Pinellas Heights, LLC is a Florida limited liability company and is an instrumentality of the Authority. Pinellas Heights, LLC was created solely to assist in the planning and development of Pinellas Heights Apartments (“Pinellas Heights”), a new 153 senior apartment complex. Pinellas Heights consists of 21 public housing units and 132 affordable project based Section 8 units and was financed with bonds of $5,775,000, 4% low income housing tax credits of $8,724,285, a loan from Pinellas County of $1,245,000, a deferred development fee of $1,453,893 and other loans from the Authority not to exceed $6,650,000 (see Note B-4). Construction was completed in 2014. Pinellas Heights, LLC is a general partner of Pinellas Heights, LLLP which is the owner of Pinellas Heights. Pinellas Heights, LLLP is considered a related party of the Authority.

Landings at Cross Bayou, LLC is a Florida limited liability company and is an instrumentality of the Authority. Landings at Cross Bayou, LLC was created solely to assist in the planning and development of Landings at Cross Bayou (“Landings”), a rental assistance demonstration property, consisting of 184 project based Section 8 units, which is located on the previous French Villas public housing site. The Landings rehabilitation is financed through low income housing tax credits and other sources. Landings at Cross Bayou, LLC is a general partner of Landings at Cross Bayou, LLLP, which is the owner of the Landings. Landings at Cross Bayou, LLLP is considered a related party of the Authority.

Heritage Oaks, LLC is a Florida limited liability company and is an instrumentality of the Authority. Heritage Oaks, LLC was created solely to assist in the planning and development of The Oaks at Ridgecrest, a new community development which will be located on the Rainbow Villas public housing site and surrounding area. The Oaks at Ridgecrest rehabilitation is anticipated to be financed through low income housing tax credits and other sources. Heritage Oaks, LLC is one of the general partners of Heritage Oaks, LLLP, which will be the owner of property and will be considered a related party of the Authority. 2. Government-wide and fund financial statements The government-wide financial statements report information about the reporting government as a whole excluding fiduciary activities. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Business-type activities rely to a significant extent on fees and charges for support.



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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2. Government-wide and fund financial statements (continued) Governments use fund accounting, whereby funds are organized into three major categories: governmental, proprietary and fiduciary. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues and expenditures/expenses. For financial reporting purposes, the Authority reports all of its operations as a single business activity in a single enterprise fund. Therefore, the government-wide and the fund financial statements are the same. Enterprise funds are proprietary funds. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating activity generally arises from providing services in connection with a proprietary fund’s principal activity. The operating revenues of the Authority consists primarily of rental charges to tenants, county operating grants and operating grants from the Department of Housing and Urban Development (“HUD”), and include, to a lesser extent, certain operating amounts of capital grants that offset operating expenses. Operating expenses for the Authority include the cost of tenant services, general, administrative, utilities, maintenance, protective services, depreciation and housing assistance payments. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses, except for capital contributions, which are presented separately. When restricted resources meet the criteria to be available for use and unrestricted resources are also available for use, it is the Authority’s policy to use restricted resources first, and then unrestricted resources, as needed. 3. Measurement focus and basis of accounting Measurement focus is a term used to describe which transactions are recorded within the various financial statements. The proprietary fund utilizes an economic resources measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net position. Basis of accounting refers to when transactions are recorded regardless of the measurement focus applied. The basis of accounting used is similar to businesses in the private sector; thus, these funds are maintained on the accrual basis of accounting. Revenues are recognized when earned and expenses are recorded in the period incurred or economic asset used.



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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3. Measurement focus and basis of accounting (continued) For financial reporting purposes, the Authority considers its HUD grants associated with operations as operating revenue because these funds more closely represent revenues generated from operating activities rather than nonoperating activities. HUD grants associated with capital acquisition and improvements are considered capital contributions and are presented after nonoperating activity on the accompanying statement of revenues, expenses and changes in net position. As provided by GASB No. 34 and related guidance, tenant revenue is reported net of $49,805 in accounts written-off.

4. Summary of programs The accompanying basic financial statements include the activities of several housing programs subsidized by HUD at the Authority. A summary of each significant program is provided below.

Low Rent Public Housing Programs The Low Rent Public Housing Programs include the following: asset management projects (“AMPs”), Public Housing Capital Fund, and various other related HUD grants. The purpose of the public housing program is to provide decent and affordable housing to low-income families at reduced rents. The developments are owned, maintained and managed by the Authority. The developments/units are acquired, developed and modernized under HUD’s Development and Capital Fund programs. Funding of the program operations and development is provided by operating subsidies and tenant rentals (determined as a percentage of family income, adjusted for family composition and other allowances). Resident Opportunity and Self-Sufficiency The Resident Opportunity and Self-Sufficiency program provides funds for a coordinator to assist public housing residents with supportive services, resident empowerment activities, and assistance in becoming economically self-sufficient. New Construction Section 8 Program Norton Apartments is a multifamily community consisting of 48 units, of which all are subsidized by HUD under a project-based Housing Assistance Payments Contract. Central Office Cost Center The Central Office Cost Center (“COCC”) is a business unit within the Authority that generates revenue from fees for service and other business activities. The COCC consists of activities funded through these revenue sources.



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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. Summary of programs (continued)

Housing Assistance Payments Programs The Section 8 Housing Choice Voucher (“HCV”), Veterans Affairs Supportive Housing (“VASH”), and Section 8 New Construction programs utilize existing privately owned family rental housing units to provide decent and affordable housing to low-income families. Funding of the programs is provided by federal housing assistance contributions from HUD for the difference between the approved landlord contract rent and the rent paid by the tenant. In addition, the Authority receives an administrative fee to cover operating expenses. The VASH program combines HUD HCV rental assistance for homeless veterans with case management and clinical services provided by the Department of Veterans Affairs at its medical centers and in the community. For reporting purposes, the VASH program is reported within HCV. Business Activities The Authority owns and operates East Lake Club Apartments, a 240 unit affordable apartment complex in Oldsmar, Florida; Redwood Apartments, a 10 unit facility in unincorporated Pinellas County; a parcel of land in Largo, Florida for the development of Pinellas Heights; a parcel of land in unincorporated Pinellas County, Florida for the development of Landings at Cross Bayou; two parcels of land for future development: 1) a parcel in Largo contiguous to the Authority’s administrative office; and 2) a parcel in Seminole; and the Corporate Office which consists of the central offices, which are both classified as business activities. Business activities also includes two costs centers, one for affordable housing property management and the other for relocation of residents for the Landings at Cross Bayou development project.

5. Assets, deferred outflows, liabilities, deferred inflows, and net position

a. Cash and cash equivalents

For financial statement purposes cash and cash equivalents are considered to be cash in banks, bond fund reserves in U.S. treasuries, certificates of deposits and money market funds with original maturities of three months or less.

b. Investments

For financial statement purposes, certificates of deposit with original maturities greater than three months are considered to be investments. Investments are reported at fair value and the Authority’s policy is to only invest in HUD allowed investments and to monitor these investments.



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5. Assets, deferred outflows, liabilities, deferred inflows, and net position (continued)

c. Receivables

Receivables consist of all revenues earned at year-end and not yet received. The majority of receivables consist of tenant receivables and other grant receivables. The receivables are reported net of an allowance for doubtful accounts consisting of $5,561. The allowance for uncollectible amounts is based on periodic aging of tenant accounts receivables and fraud recovery receivables.

d. Inventory

Inventory, net, consists principally of materials held for use or consumption and is recorded on the first-in, first-out (“FIFO”) method. If inventory falls below cost due to damage, deterioration or obsolescence, the Authority establishes an allowance for obsolete inventory. Based on management’s experience with the types of items in inventory and related usage plans, an allowance for obsolescence of $6,302 is recorded as of December 31, 2015.

e. Capital assets

The Authority’s policy is to capitalize assets with a value in excess of $2,000 and a useful life in excess of one year. The Authority capitalizes the costs of site acquisition and improvement, structures, equipment and direct development costs meeting the capitalization policy. Assets are valued at historical cost, or estimated historical cost if actual historical cost is not available, and contributed assets are valued at fair market value on the date contributed.

Depreciation has been provided using the straight-line method over the estimated useful lives, which range as follows:

Buildings and improvements 10 - 30 years

Equipment 5 years

Leasehold improvements 5 years

f. Intangible assets

Intangible assets net, consists of costs paid by the Authority to developers, attorneys, and consultants on behalf of the developments that may be reimbursed upon closing. The costs are amortized using the straight line basis over the life of the respective development and leases which vary between ten to thirty years. These intangible assets have a cost of $551,458 and are being presented in the financial statements net of accumulated amortization of $31,268. For the year ended December 31, 2015, associated amortization expense was $21,567.



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g. Deferred outflows of resources

In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and thus, will not be recognized as an outflow of resources until then. The Authority’s balance of deferred outflows of resources relates to funding of the net pension liability (see Note B-8).

h. Unearned revenues

Unearned revenues include amounts collected before revenue recognition criteria are met, which consist of prepaid rents totaling $99,050

i. Accrued compensated absences It is the Authority’s policy to permit full-time permanent employees to accumulate earned but unused vacation and sick pay benefits, based on tenure with the Authority. The policy allows employees to accumulate unused vacation leave up to a maximum of 240 hours and unused sick leave up to a maximum of 480 hours. Upon termination, employees are paid for unused accumulated vacation (after one year of continuous employment). Unused accumulated sick leave is paid to the employee upon termination as follows: age 55 or over and five years of service at 50% (maximum of 240 hours) or all others with at least six years of service and with a minimum of 400 hours accumulated at 25% (maximum of 100 hours). In accordance with the provisions of GASB Statement No. 16, Accounting for Compensated Absences, the estimated liability for vested leave benefits is recorded when it is earned as an expense and the cumulative unpaid amount is reported as a liability.

j. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Authority’s participation in the Florida Retirement System, and additions to/deductions from the Authority’s fiduciary net position have been determined on the same basis as they are reported by the Florida Retirement System. For this purpose, benefits (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms of the Florida Retirement System. Investments are reported at fair value.



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k. Deferred inflows of resources In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and thus, will not be recognized as an inflow of resources until then. The Authority’s balance of deferred inflows of resources relates to funding of the net pension liability (see Note B-8).

l. Eliminations

For financial reporting purposes, the Authority eliminates amounts that are internally generated from and among various programs within the Authority as well as certain activity with blended component units. The following have been eliminated from the financial statements.

i). Interprogram due to/from

In the normal course of operations, certain programs pay for common costs that create interprogram receivables or payables. These interprogram receivables and payables normally offset and are eliminated for the presentation of the Authority as a whole. As of December 31, 2015, $1,693,660 was eliminated.

ii). Fee for service

The Authority’s Central Office Cost Center internally charges fees for services rendered to the AMPs and other programs of the Authority. In addition, the Authority charges fees to other programs. These charges include management fees, bookkeeping fees, and asset management fees. For financial reporting purposes $1,827,094 of fees have been eliminated for the year ended December 31, 2015.

iii). Internal rent charges

The Corporate Office, a division of the Authority’s business activities, charges rent to programs within the Authority. For financial reporting purposes $177,420 of internal rent charges have been eliminated for the year ended December 31, 2015.



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l. Eliminations (continued)

iv). Internal loans

Palm Lake Village Housing Corporation and Landings at Cross Bayou, LLC, both blended component units, approved the lending of funds in the amounts of $539,800 and $346,043, respectively, to the Authority. For financial reporting purposes, the internal loans balances, both current and noncurrent, and interest are being eliminated for the year ended December 31, 2015. The elimination consists of the current portions of $20,113 and the noncurrent portions of $804,351. The corresponding mortgage interest income and expense of $14,683 and accrued interest of $623 related to this note was also eliminated.

m. Net position In accordance with GASB No. 34 as amended, total equity as of December 31, 2015, is classified into three components of net position:

i.) Net investment in capital assets This category consists of capital assets, net of accumulated depreciation and reduced by any outstanding balances of bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, and improvements of those assets. ii.) Restricted component of net position This category consists of net position restricted in its use by (1) external groups such as grantors, creditors or laws and regulations of other governments; or (2) law through constitutional provisions or enabling legislation. The statement of net position of the Authority reports $11,887,547 of the restricted component of net position which consists of amounts restricted for modernization and development of $10,005,010, escrows of $1,752,923 that are restricted by bond and note payable restrictions and Section 8 HAP reserves of $129,614 that are restricted by HUD guidelines (see Note B-10-b).

iii.) Unrestricted component of net position

This category includes all of the remaining net position that does not meet the definition of the other two categories.



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6. Budgets

Budgets are prepared on an annual basis for each major program and are used as a management tool throughout the accounting cycle. Budgets are approved annually by the Board of Commissioners.

7. Income taxes

The Authority is a governmental entity and is exempt from federal and state income taxes. Accordingly, no provision for income taxes has been made in the financial statements. The Authority’s blended component units are subject to the income tax provisions of Florida Statutes and the Internal Revenue Code.

The Authority’s blended component units account for income taxes in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes, which clarifies the accounting and disclosure requirements for uncertainty in tax position. It requires a two-step approach to evaluate tax positions and determine if they should be recognized in the financial statements. The two-step approach involves recognizing any tax positions that are “more likely than not” to occur and then measuring those positions to determine if they are recognizable in the financial statements. Management regularly reviews and analyzes all tax positions and has determined no aggressive tax positions have been taken. For the fiscal year ended December 31, 2015, the accompanying financial statements do not reflect income taxes paid or due for the blended component units. The income tax filings of the Authority’s blended component units are subject to audit by various taxing authorities. The open audit periods for these entities are 2012 through 2015.

8. Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

9. Leasing activities

The Authority is the lessor of dwelling units to low-income and market rate residents. The low-income rents under the leases are determined generally by the resident’s income as adjusted for eligible deductions regulated by HUD, although the resident may opt for a flat rent. Leases may be cancelled by the lessee at any time or renewed every year. The Authority may cancel the leases only for cause. A significant majority of the capital assets are used in these leasing activities. Revenues associated with these leases are recorded in the accompanying financial statements and related schedules within tenant revenue.



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NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 10. Impairment of long-lived assets The Authority evaluates events or changes in circumstances affecting long-lived assets to determine whether an impairment of its assets has occurred. If the Authority determines that a capital asset is impaired, and that impairment is other-than-temporary, then an impairment loss will be recorded in the Authority’s financial statements. Management has determined that there were no impairments as of December 31, 2015. 11. Impact of recently issued accounting policies In February 2015, the GASB issued Statement No. 72, Fair Value Measurement and Application, to enhance the transparency and comparability of fair value measurements and disclosures in state and local governments’ financial statements. This statement is effective for the Authority’s December 31, 2016 fiscal year end. Management is currently evaluating the impact of the adoption of this statement on the Authority’s financial statements. In June 2015, the GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement 68 and Amendments to Certain Provisions of GASB Statements 67 and 68, which clarifies certain provisions of GASB No. 68, Accounting and Financial Reporting for Pensions, and it establishes requirements for defined contribution pensions that was not within the scope of GASB No. 68. This statement is effective for the Authority’s December 31, 2017 fiscal year end. Management is currently evaluating the impact of the adoption of this statement on the Authority’s financial statements. In January 2016, the GASB issued Statement No. 80, Blending Requirements for Certain Component Units – An Amendment of GASB Statement No. 14, which amends GASB Statement No. 14, The Financial Reporting Entity, as amended, by addressing the blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. This statement is effective for the Authority’s December 31, 2017 fiscal year end. Management is currently evaluating the impact of the adoption of this statement on the Authority’s financial statements.

NOTE B - DETAILED NOTES

1. Cash and cash equivalents As of December 31, 2015, the Authority’s cash and cash equivalents consists of cash in banks in the amount of $6,714,944 and cash in money market funds in the amount of $24,105.

In accordance with GASB No. 40, the Authority’s exposure to deposit and investment risk is disclosed as follows:



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NOTE B - DETAILED NOTES (continued)

1. Cash and cash equivalents (continued)

Credit Risk. Credit risk is the risk that a counterparty will fail to meet its obligations in accordance with agreed terms. It is the Authority’s policy to follow the HUD regulations by only having direct investments and investments through mutual funds to direct obligations, guaranteed obligations, or obligations of the agencies in the United States of America. As of December 31, 2015, the Authority was not exposed to credit risk since they follow HUD regulations.

Custodial Credit Risk. Custodial credit risk is the risk that in the event of a bank failure, the Authority’s deposits may not be returned. The Authority’s deposit policy for custodial credit risk requires collateral to be held in the Authority’s name by its agent or by the bank’s trust department.

The Authority’s deposits are insured by the Federal Depository Insurance Corporation up to $250,000, for interest bearing accounts. Monies invested greater than the insurance coverage are secured by qualified public depositories pledging securities with the State Treasurer in such amounts required by the Florida Security for Public Deposits Act. In the event of a default or insolvency of a qualified public depositor, the State Treasurer will implement procedures for payment of losses according to the validated claims of the Authority pursuant to Section 280.08, Florida Statutes.

Financial institutions must meet the criteria of being a Qualified Public Depository as described in the Florida Security for Public Deposits Act, under Chapter 280, Florida Statutes, before any investments are made with those institutions. As of December 31, 2015, none of the Authority’s total cash and investments bank balance of $13,470,225 was exposed to custodial credit risk.

Restricted cash and cash equivalents

As of December 31, 2015, restricted cash and cash equivalents consist of:

Tenant security deposits 364,755$ Family self sufficiency escrow - current 77,100 Restricted funded reserves:

Crystal Lakes Manor operating fund 31,751$ Palm Lake Village: Project fund 400,001 Operating fund 414,911 Replacement reserve 106,924 General fund 191,818 Fees fund 4,280

Palm Lake Village Housing Corporation subtotal: 1,149,685

Total restricted cash and cash equivalents - current 1,591,540 Family self sufficiency escrow - noncurrent 212,454

Total restricted cash and cash equivalents 1,803,994$



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NOTE B - DETAILED NOTES (continued) 2. Investments The Authority’s investments consist of taxable bonds and are carried at fair value based on quoted market prices in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and External Investment Pools. The Authority’s investments are held in an account at an institution covered by Securities Investor Protection Corporation. In accordance with GASB 40, the Authority’s exposure to risk is disclosed as follows: Interest Rate Risk. Interest rate risk is the risk that the relative value of a security will decline due to a change in interest rates. The Authority’s policy to limit its exposure to declines in fair values of its investment portfolio is to only invest in HUD allowed investments and to monitor investments. The Authority’s exposure to interest rate risk as of December 31, 2015, is as follows:

Total Fair Value <1 year 1-3 years

Concentration of Credit Risk

Investments:

United States Treasury Note 4,696,408$ 2,161,484$ 2,534,924$ 80%

Federal National Mortgage Association Medium Term Note 1,137,662 - 1,137,662 20%

Investments subtotal 5,834,070 2,161,484$ 3,672,586$

Accrued interest 13,314

Total Investments 5,847,384$

Investment Maturities

As presented on the statement of net position, investments of $5,717,770 are classified as unrestricted and $129,614 are restricted for Section 8 Housing Assistance Payments. Credit Risk. Credit risk is the risk that an issuer or other counterparty will fail to meet its obligations in accordance with agreed terms. It is the Authority’s policy to follow the HUD regulations by only having direct investments and investments through mutual funds to direct obligations, guaranteed obligations, or obligations of the agencies in the United States of America. The Authority has no policy that further limits its investment choices in terms of credit ratings other than authorized investment types discussed above. As of December 31, 2015, the Authority was not exposed to credit risk since they follow HUD regulations.



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2. Investments (continued)

Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributable to the Authority’s investment in a single issuer. A display of the Authority’s concentration of credit risk by investment is represented above. 3. Receivables, net As of December 31, 2015, receivables consist of:

HUD grants receivable 167,371$ Tenant receivables 87,880 Developer fee receivable 589,540 Other 240,835

Total receivables 1,085,626 Allowance for doubtful accounts - tenants (5,561)

1,080,065$

4. Notes receivable The Authority has entered into several notes receivable associated with tax credit and Rental Assistance Demonstration (“RAD”) activity. i.) Pinellas Heights The Authority entered into two mortgage note agreements with Pinellas Heights for the construction of Pinellas Heights Apartments for a total amount not to exceed $6,650,010. As of December 31, 2015, the total outstanding balance of the First Mortgage Note is $5,500,000. The sources of the First Mortgage Note consist of $3,000,000 of public housing funds and $2,500,000 of unrestricted funds. Per the Loan Agreement, $4,500,000 was disbursed during construction and an additional $1,000,000 was disbursed upon the issuance of the certificate of occupancy. The loan has a maturity date of September 1, 2044 with interest compounded annually at a rate of 4.0%. The principal balance is due at maturity and annual interest payments will be made only to the extent of available cash flow, if any. As of December 31, 2015, the total outstanding balance of the Second Mortgage Note is $1,150,010. The sources of the Second Mortgage Note consist of $1,000,010 Affordable Housing Program funds, and $150,000 of Community Development Block Grant funds. Per the loan agreement, the total amount was disbursed during construction and upon issuance of the certificate of occupancy. The loan bears no interest and has a maturity date of September 1, 2044. The principal balance is due at maturity.



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NOTE B - DETAILED NOTES (continued) 4. Notes receivable (continued) ii.) Landings at Cross, Bayou, LLP The Authority entered into a mortgage note agreement with Landings at Cross Bayou, LLP to fund the RAD conversion of French Villas to Landings at Cross Bayou Apartments for a total amount of $5,855,000. As of December 31, 2015, the total outstanding balance of the French Villas Mortgage Note is $5,855,000. The principal balance is due at maturity and annual interest payments will be made only to the extent of available cash flow, if any. 5. Capital assets A summary of changes in capital assets for the year ended December 31, 2015 is as follows:

Balance atJanuary 1, 2015

Transfers in/ Additions

Transfers out/ Deletions

Balance atDecember 31, 2015

Non-depreciable:Land 12,384,474$ 16,635$ -$ 12,401,109$ Construction in progress 234,432 315,302 (149,704) 400,030

Total non-depreciable 12,618,906 331,937 (149,704) 12,801,139 Depreciated:

Buildings and improvements 77,339,204 7,851,592 - 85,190,796 Equipment 993,223 - - 993,223 Leasehold improvements 1,725,633 131,732 - 1,857,365

Total depreciated 80,058,060 7,983,324 - 88,041,384

Total capital assets 92,676,966 8,315,261 (149,704) 100,842,523 Less accumulated depreciation:

Buildings and improvements (40,716,021) (3,105,307) - (43,821,328) Equipment (834,636) (87,583) - (922,219) Leasehold improvements (1,207,300) (189,032) - (1,396,332)

Total accumulated depreciation (42,757,957) (3,381,922) - (46,139,879)

Capital assets, net 49,919,009$ 4,933,339$ (149,704)$ 54,702,644$

During the year ended December 31, 2015, the majority of the additions consisted of structural rehabilitation at East Lake, a business activity, for approximately $6.5 million.



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NOTE B - DETAILED NOTES (continued) 6. Prepaid escrows As of December 31, 2015, prepaid escrows consist of:

East Lake Mortgage 2007 prepaid escrow 293,990$ Palm Lake Village Bond Series 2005

Insurance escrow deposit 312,766 PILOT tax escrow deposit 28,233

Total prepaid escrows 634,989$

7. Noncurrent liabilities A summary of changes in noncurrent liabilities is as follows:

Payable at January 1,

2015 Additions Reductions

Payable at December 31,

2015Due Within One Year

Housing Revenue Bonds, Series 2005 - Palm Lake Village 10,310,000$ -$ (275,000)$ 10,035,000$ 290,000$ Less unamortized bond discount (84,733) - 4,100 (80,633) (4,100)

Housing Revenue Bonds, Series 2005, net 10,225,267 - (270,900) 9,954,367 285,900

Crystal Lake Manor Loan 2014 636,849 2,363,151 (29,941) 2,970,059 55,304

Crystal Lake Manor Loan 2015 - 2,500,000 - 2,500,000 18,131

East Lake Mortgage 2007 12,643,739 - (268,171) 12,375,568 282,232

Magnolia Gardens Loan 2015 - 2,000,000 - 2,000,000 5,907

Redwood Mortgage 2011 303,154 - (6,576) 296,578 6,776

Norton Apts Mortgage 2011 602,867 - (8,123) 594,744 8,371

Norton NSP Loan 2012 550,000 - (4,795) 545,205 7,262

Norton Apts Clearwater Loan 2013 440,466 - - 440,466 -

Norton Apts Hancock Loan 2014 904,676 - (16,482) 888,194 17,579

Total long-term debt 26,307,018 6,863,151 (604,988) 32,565,181 687,462

FRS net pension liability 419,393 1,108,255 (591,246) 936,402 -

HIS net pension liability 1,042,250 243,937 (126,387) 1,159,800 -

Family self-sufficiency escrow 306,336 125,960 (142,742) 289,554 77,100

Accrued compensated absences 259,872 380,245 (341,195) 298,922 13,275

Total noncurrent liabilities 28,334,869$ 8,721,548$ (1,806,558)$ 35,249,859$ 777,837$



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NOTE B - DETAILED NOTES (continued) 7. Noncurrent liabilities (continued)

The interest expense associated with all of the debt service of the Authority totaled $1,513,347 for the year ended December 31, 2015, none of which was capitalized.

a. Housing Revenue Bonds, Series 2005

On September 1, 2005, the Authority issued Housing Revenue Bonds, Series 2005 of $12,300,000 at a varying interest rate of 2.90% to 4.35%. The bonds were issued with a mandatory tender for purchase on November 1, 2020 and a maturity date of November 1, 2035. The Authority is required to make monthly deposits to the trustee to provide for, among other deposits, semi-annual interest and principal payments beginning May 1, 2007. The bonds are secured by a Trust Indenture dated September 1, 2005 between the Authority and U.S. Bank, with reimbursement obligations secured by a multifamily mortgage and an assignment of rents and security agreement. Proceeds from the bonds in the amount of $11,522,409 were used to repay a line of credit draw, the proceeds of which were deposited into the Authority’s Acquisition Fund to refinance Palm Lake Village Housing Corporation’s (including Magnolia Gardens) portion of the Housing Revenue Bonds, Series 2001, and $400,000 was deposited with the trustee to provide funds for capital improvements to Palm Lake Village Apartments.

As of December 31, 2015 the future principal maturities for Housing Revenue Bonds, Series 2005 is as follows:

Principal Interest2016 290,000$ 433,477$ 2017 305,000 420,645 2018 320,000 407,160 2019 340,000 393,131 2020 360,000 378,122

2021-2025 2,135,000 1,632,229 2026-2030 2,740,000 1,111,099 2031-2035 3,545,000 440,003

10,035,000$ 5,215,866$



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b. Crystal Lake Manor Loan 2014

On May 22, 2014, the Board of Directors of Palm Lake Village Housing Corporation, a blended component unit of the Authority (see Note A-1), approved a loan for $3,000,000. The loan bears interest at a rate of 4% with payments calculated based on an amortization of 30 years with a balloon payment after 10 years and a maturity date of May 22, 2024. The Authority is required to make monthly interest payments with principal payments commencing on June 22, 2015. On February 5, 2015, the Authority received the remaining $2,363,151. As of December 31, 2015, the future principal and interest maturities based on the current and future principal borrowed for Crystal Lake Manor Loan 2014, are as follows for the years ending December 31:


2021-2024 2,669,827 457,046

2,970,059$ 1,033,795$

c. Crystal Lake Manor Loan 2015

On August 4, 2015, the Board of Directors of Palm Lake Village Housing Corporation, a blended component unit of the Authority (see Note A-1), approved a loan for $2,500,000. The loan bears interest at a rate of 4% with payments calculated based on an amortization of 30 years with a balloon payment after 10 years and a maturity date of May 22, 2024. The Authority is required to make monthly interest payments with principal payments commencing on September 4, 2016.



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c. Crystal Lake Manor Loan 2015 (continued)

As of December 31, 2015, the future principal and interest maturities based on the current and future principal borrowed for Crystal Lake Manor Loan 2015, are as follows for the years ending December 31:


2021-2024 2,291,568 293,884

2,500,000$ 776,361$

d. East Lake Mortgage 2007

On March 22, 2007, the Authority refinanced the Housing Revenue Bonds, Series 2001 and replaced them with the East Lake Mortgage 2007 for $14,260,000. The new debt was issued with a fixed rate of 5.78% with the payments calculated based on an amortization of 30 years with a balloon payment after 15 years and a maturity date of April 22, 2022. The mortgage is secured by the property of East Lake Apartments. As of December 31, 2015, the future principal and interest maturities for East Lake Mortgage 2007 are as follows for the years ending December 31:


2021-2022 10,776,711 771,042

12,375,568$ 4,181,552$



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e. Landings at Cross Bayou Inter-Authority Loan 2015

On April 1, 2015, the Board of Directors of Landings at Cross Bayou, LLC, a blended component unit of the Authority (see Note A-1), approved a loan of $346,043 for the purchase of land and demolition of an existing structure. The loan bears interest at a rate of 1% per annum for a term of forty (40) years with payments commencing May 1, 2015. During the year, $4,707 of the principal balance was repaid.

As of December 31, 2015, the future principal and interest maturities for Landings at Cross Bayou Inter-Authority Loan 2015 are as follows for the years ending December 31:


2021-2025 38,179 14,320 2026-2030 40,136 12,364 2031-2035 42,193 10,496 2036-2040 44,355 8,144 2041-2045 46,628 5,871 2046-2050 49,018 3,482 2051-2055 44,508 990

341,336$ 71,848$

Due to the internal nature of the borrowing, the full outstanding balance of this loan has been eliminated for financial reporting purposes (see Note A-5-i-iv).

f. Magnolia Gardens Loan 2015

On December 3, 2015, Palm Lake Village Housing Corporation, a blended component unit of the Authority (see Note A-1), entered into a leasehold mortgage agreement with US Ameribank as evidenced by a promissory note in the amount of $2,000,000 for Magnolia Gardens Assisted Living Facility. The loan bears interest at a rate of 4% with payments calculated based on an amortization of 30 years with a balloon payment after 10 years and a maturity date of December 3, 2025. The Authority is required to make monthly interest payments with principal payments commencing on December 3, 2016.



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f. Magnolia Gardens Loan 2015 (continued)

As of December 31, 2015, the future principal and interest maturities based on the current and future principal borrowed for Magnolia Gardens Loan 2015, are as follows for the years ending December 31:


2021-2025 1,839,869 340,662

2,000,000$ 727,953$

g. Redwood Mortgage 2011 On April 12, 2011, the Authority entered into a leasehold mortgage agreement with the Housing Finance Authority of Pinellas County (“HFA”) evidenced by a promissory note in the amount of $307,958 for the acquisition and renovation of an existing 10-unit apartment facility, Redwood Apartments, located in unincorporated Pinellas County. Under this agreement, the Authority will provide affordable rental housing to qualified low-income individuals or families throughout the Affordability Period, as defined.

The note bears interest at 3% per annum for a term of 33 years ending May 1, 2044. The Authority is required to make monthly principal and interest payments beginning May 1, 2014. The note is secured by the mortgage on the underlying property.



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g. Redwood Mortgage 2011 (continued)

As of December 31, 2015, the future principal and interest maturities for Redwood Mortgage 2011 are as follows for the years ending December 31:


2021-2025 41,821 36,080 2026-2030 48,580 29,321 2031-2035 56,432 21,470 2036-2040 65,552 12,350 2041-2044 48,190 2,448

296,578$ 143,568$

h. Norton Apartments Mortgage 2011

On March 15, 2011, the Authority entered into a leasehold mortgage agreement with the Housing Finance Authority of Pinellas County (“HFA”) evidenced by a promissory note in the amount of $1,507,490 for the acquisition and preservation of Norton Apartments in Clearwater, Florida, an existing 48-unit residential rental property. Under this agreement, the Authority will provide affordable rental housing to qualified low-income individuals or families throughout the Affordability Period, as defined. The note had an original maturity of April 1, 2012, with no interest accruing and no principal payments required; however, the Authority refinanced the debt subsequent to December 31, 2011, which modified the interest terms and maturity of the note. The leasehold mortgage and note modification agreement included reducing the principal amount of the HFA mortgage to $607,490 and maturing on June 1, 2054 with revised payment terms deferring payment until June 1, 2014 with no principal payments due and no interest accruing as long as the Authority developed and operated Norton Apartments as residential rental housing, including affordable rental housing, and complied with the terms of the HFA Mortgage, as well as the Land Use Restriction Agreement and the Agency Agreement, both of which were executed on March 15, 2011 and any other security instrument associated with the HFA mortgage. Payments commenced on June 1, 2014 and are based on the loan amount of $607,490 with interest at 3% per annum amortized for 40 years.



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7. Noncurrent liabilities (continued)

h. Norton Apartments Mortgage 2011 (continued)

As of December 31, 2015, the future principal and interest maturities for Norton Apartments Mortgage 2011 are as follows for the years ending December 31:


2021-2025 51,607 78,876 2026-2030 59,912 70,571 2031-2035 69,646 60,837 2036-2040 80,906 49,577 2041-2045 93,987 36,496 2046-2050 109,175 21,308 2051-2054 85,085 4,559

594,744$ 408,282$

i. Norton Apartments Inter-Authority Loan 2011

On January 25, 2011, the Board of Directors of Palm Lake Village Housing Corporation, a blended component unit of the Authority (see Note A-1), approved a loan of $539,800 for the creation of Norton capital and operating reserves. The loan bears interest at a rate of 3% per annum for a term of thirty (30) years with payments commencing April 15, 2011. During the year, $12,610 of the principal balance was repaid.



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i. Norton Apartments Inter-Authority Loan 2011 (continued)

As of December 31, 2015, the future principal and interest maturities for Norton Apartments Inter-Authority Loan 2011 are as follows for the years ending December 31:


2021-2025 80,201 56,348 2026-2030 93,163 43,386 2031-2035 108,220 28,330 2036-2040 125,710 10,840

2041 6,791 40

483,128$ 206,451$

Due to the internal nature of the borrowing, the full outstanding balance of this loan has been eliminated for financial reporting purposes (see Note A-5-i-iv).

j. Norton NSP Loan 2012

On May 31, 2012, the Authority entered into a leasehold mortgage agreement with Pinellas County evidenced by a promissory note in the amount of $550,000 for repair and renovation of affordable rental housing units at Norton Apartments. Under this agreement, proceeds from this loan may be used to reimburse any allowable repair and renovation cost incurred by the Authority. The principal sum of the indebtedness is due upon the earlier of Authority’s sale of the property or June 1, 2055.



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j. Norton NSP Loan 2012 (continued) As of December 31, 2015, the future principal and interest maturities for Norton NSP Loan 2012 are as follows for the years ending December 31:

Principal Interest

2016 7,262$ 16,272$ 2017 7,578 16,049 2018 7,809 15,818 2019 8,002 15,625 2020 8,290 15,337

2021-2025 45,344 72,791 2026-2030 52,674 65,460 2031-2035 61,160 56,975 2036-2040 71,087 47,048 2041-2045 82,581 35,554 2046-2050 95,933 22,202 2051-2055 97,485 6,788

545,205$ 385,919$

k. Norton Apartments Clearwater Loan 2013

On October 31, 2013, the Authority received a $304,466 loan from the City of Clearwater to finance the rehabilitation of certain units at Norton Apartments. The loan is comprised of funding in the amount of $243,572 from the HOME Program and $60,894 from the SHIP Program, and is subject to a Land Use Restriction Agreement that requires the Authority to maintain the development as affordable housing for a minimum period of 30 years from the date of the agreement. Per the agreement, the loan is a 30-year deferred payment loan with no payment required during the affordability period of 30 years provided the Authority does not default on the loan. Additionally, no interest will accrue during the life of the loan. Should the Authority default on the loan during the period, the entire amount will become due and payable. The maturity of the note is October 30, 2043 and will be forgiven after the period. At December 31, 2015, the principal balance of the loan was $440,466.



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l. Norton Apartments Hancock Loan 2014

On September 5, 2014, the Authority obtained a private loan with Hancock Bank for an original principal of $910,000. The debt was issued with a fixed rate of 3.75% with the payments calculated based on an amortization of 30 years with a balloon payment after 10 years and a maturity date of September 5, 2024. As of December 31, 2015, the future principal and interest maturities for Norton Apartments Hancock Loan 2014 are as follows for the years ending December 31:


2021-2024 793,268 103,652

888,194$ 261,645$

8. Retirement plans

a. Florida Retirement System

General Information - All of the Authority’s employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan (“Pension Plan”) and the Retiree Health Insurance Subsidy (“HIS Plan”). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan (“Investment Plan”) alternative to the FRS Pension Plan, which is administered by the State Board of Administration (“SBA”).

As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature.



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8. Retirement plans (continued)

a. Florida Retirement System (continued)

The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the Web site: www.dms.myflorida.com/workforce_operations/retirement/publications Pension description The pension plan is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program (“DROP”) for eligible employees.

Benefits under the pension plan are computed on the basis of age, average final compensation, and service credit. For pension plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service.

For plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular class members. Also, the final average compensation for all these members will be based on the eight highest years of salary.

As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment.

The annual cost-of-living adjustment is a proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.



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Pension description (continued) In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants. Funding policy Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute three percent of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature. These rates are updated as of July 1 of each year. The employer contribution rates by job class for the periods from October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015, respectively, were as follows: Regular—7.37% and 7.26%; and DROP participants—12.88% and 18.75%. These employer contribution rates include 1.26% and 1.66% HIS Plan subsidy for the periods October 1, 2014 through June 30, 2015 and from July 1, 2015 through December 31, 2015, respectively.

The Authority’s contributions, including employee contributions, to the pension plan totaled $174,731 for the fiscal year ended December 31, 2015. Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows of resources related to pensions At December 31, 2015, the Authority reported a liability of $936,402 for its proportionate share of the Pension Plan’s net pension liability. The net pension liability was measured as of June 30, 2015. The Authority’s proportionate share of the net pension liability was based on the Authority’s 2014-2015 fiscal year contributions relative to the 2013-2014 fiscal year contributions of all participating members. At June 30, 2015, the Authority's proportionate share was 0.000072 percent, which was an increase of 0.000004 percent from its proportionate share measured as of June 30, 2014.



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Funding policy (continued)

For the fiscal year ended December 31, 2015, the Authority recognized pension expense of $94,384. In addition the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

DescriptionRecognition

Period

Deferred Outflows of Resources

Deferred Inflows of

ResourcesDifferences between expected and actual experience 6.3 years 98,856$ 22,209$ Change in assumptions 6.3 years 62,152 - Net difference between projected and actual earnings on Pension Plan investments 5.0 years - 223,597 Changes in proportion and differences

between Authority Pension Plan contributions and proportionate share of contributions 6.3 years 127,292 - Authority Pension Plan contributions subsequent to the measurement date 45,732 -

Total 334,032$ 245,806$

The deferred outflows of resources related to the Pension Plan, totaling $45,732 resulting from the Authority’s contributions to the Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended December 31, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows:

Fiscal Year EndingDecember 31: Amount

2016 (46,640)$ 2017 (46,640) 2018 (46,640) 2019 137,835 2020 36,189

Thereafter 8,390



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Actuarial assumptions

The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumption, applied to all period included in the measurement:

Inflation 2.60%

Salary increases 3.25%, average, including inflation

Investment rate of return 7.65%, net of pension plan investment expense, including inflation

Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables. The actuarial assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2015. The long-term expected rate of return on pension plan investments was not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy’s description of each asset was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table:

CompoundAnnual Annual

Target Arithmetic (Geometric) Standard Asset Class Allocation (1) Return Return DeviationCash 1.00% 3.20% 3.10% 1.70%Fixed Income 18.00% 4.80% 4.70% 4.70%Global Equity 53.00% 8.50% 7.20% 17.70%Real Estate (Property) 10.00% 6.80% 6.20% 12.00%Private Equity 6.00% 11.90% 8.20% 30.00%Strategic investments 12.00% 6.70% 6.10% 11.40%

Total 100.00%

Assumed Inflation - Mean 2.60% 1.90%

(1) As outlined in the Pension Plan's investment policy



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a. Florida Retirement System (continued) Discount rate The discount rate used to measure the total pension liability was 7.65%. The pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculation of the total pension liability is equal to the long-term expected rate of return. Sensitivity of net pension liability to changes in the discount rate The following represents the Authority’s proportionate share of the net pension liability calculated using the discount rate of 7.65% as well as what the Authority’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.65%) or one percentage point higher (8.65%) than the current rate:

1% Decrease (6.65%)

Current Discount Rate

(7.65%)1% Increase

(8.65%)Authority's proportionate share of the net pension liability 2,426,429$ 936,402$ (303,545)$

Pension plan fiduciary net position Detailed information regarding the Pension Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. Payables to the pension plan At December 31, 2015, the Authority did not have a payable for outstanding contributions to the Pension Plan required for the fiscal year ended December 31, 2015.



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b. Health Insurance Subsidy (HIS) (continued) Plan description The HIS Plan is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. For the fiscal year ended December 31, 2015, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month. To be eligible to receive these benefits, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Funding policy The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended December 31, 2015, the HIS contribution for the period October 1, 2014 through June 30, 2015 and from July 1, 2015 through December 31, 2015 was 1.26% and 1.66%, respectively. The Authority contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plans contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or cancelled. The Authority’s contributions to the HIS Plan totaled $47,852 for the fiscal year ended December 31, 2015. Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows of resources related to pensions At December 31, 2015, the Authority reported a liability of $1,159,800 for its proportionate share of the HIS plan’s net pension liability. The net pension liability was measured as of June 30, 2015. The Authority’s proportionate share of the net pension liability was based on the Authority’s 2014-2015 fiscal year contributions relative to the 2013-2014 fiscal year contributions of all participating members. At June 30, 2015, the Authority’s proportionate share was 0.000111 percent, which was a decrease of 0.000002 percent from its proportionate share measured as of June 30, 2015.



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b. Health Insurance Subsidy (HIS) (continued)

Pension liabilities, pension expense, and deferred outflows of resources and deferred inflows of resources related to pensions (continued)

For the fiscal year ended December 31, 2015, the Authority recognized pension expense of $81,462. In addition the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

DescriptionRecognition

Period

Deferred Outflows of Resources

Deferred Inflows of

ResourcesDifferences between expected and actual experience -$ -$ Change in assumptions 7.2 years 91,246 - Net difference between projected and actual earnings on Pension Plan investments 5.0 years 628 - Changes in proportion and differences between Authority Pension Plan contributions and proportionate share of contributions 7.2 years 17,505 46,334 Authority Pension Plan contributions subsequent to the measurement date 26,974 -

Total 136,353$ 46,334$

The deferred outflows of resources related to the HIS Plan, totaling $26,974 resulting from Authority contributions to the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended December 31, 2015.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized in pension expense as follows:

Fiscal Year EndingDecember 31: Amount

2016 10,947$ 2017 10,947 2018 10,947 2019 10,820 2020 10,758

Thereafter 14,574



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b. Health Insurance Subsidy (HIS) (continued) Actuarial assumptions The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.60%

Salary increases 3.25%, average, including inflation

Municipal bond rate 3.80%

Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables. The actuarial assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2015. Discount rate The discount rate used to measure the total pension liability was 3.80%. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index. Sensitivity of net pension liability to changes in the discount rate The following represents the Authority’s proportionate share of the net pension liability calculated using the discount rate of 3.80%, as well as what the Authority’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (2.80%) or one percentage point higher (4.80%) than the current rate:

1% Decrease(2.80%)

CurrentDiscount Rate

(3.80%)1% Increase

(4.80%)Authority's proportionate share of the net pension liability 1,321,535$ 1,159,800$ 1,024,932$



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b. Health Insurance Subsidy (HIS) (continued) Pension plan fiduciary net position Detailed information regarding the HIS Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. Payables to the pension plan At December 31, 2015, the Authority did not have a payable for outstanding contributions to the HIS Plan required for the fiscal year ended December 31, 2015.

9. Risk management The Authority is exposed to various risks of loss related to torts; theft of, damages to, and destruction of assets; errors and omissions; injuries to employees, and natural disasters. As part of the Authority’s risk management program, certain commercial insurance policies are purchased, and the Authority participates in a risk retention group to cover designated exposures and potential loss situations. The group collects reserve deposits and carries reinsurance; however, the group may charge each group member additional amounts if losses are in excess of reserve deposits and reinsurance amounts. There were no significant reductions of insurance coverage from prior years and settlements did not exceed insurance coverage for each of the past three years.

10. Commitments and contingencies

a. Legal

In the normal course of operations, the Authority may be party to various pending or threatened legal actions. As of the date of this report, management is not aware of any such instances that have a material impact on the Authority.



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10. Commitments and contingencies (continued)

b. Grants and contracts

The Authority participates in various federally-assisted grant programs that are subject to review and audit by the grantor agencies. Entitlements to these resources are generally conditional upon compliance with the terms and conditions of grant agreements and applicable federal regulations, including the expenditure of resources for allowable purposes. Any disallowance resulting from a federal audit may become a liability of the Authority. As of the date of this report, management is not aware of any such instances.

The Authority has received cumulative funding in excess of housing assistance payments (“HAP”) and earned administrative fees through the Section 8 Housing Choice Voucher Program in accordance with current regulations. As of December 31, 2015, the remaining Housing Choice Voucher HAP reserve of $129,614 is presented as restricted equity subject to possible future recapture.

c. Capital Funds awarded

The Authority receives funding from HUD through the Public Housing Capital Fund Program to help subsidize the cost of project repairs, improvements and certain operating costs. Unspent awarded amounts as of December 31, 2015 amounted to $1,687,350 for the Public Housing Capital Fund Program.

d. Ground Lease - Redwood Apartments

As part of the purchase of Redwood Apartments (see Note B-7-g), the Authority has executed a 99-year ground lease agreement with Pinellas Community Housing Foundation, Inc. (“Lessor”) as Trustee of the Pinellas Community Housing Program Land Trust - Redwood Apartments, a land trust formed for the benefit of the Housing Finance Authority of Pinellas County, Florida (“FHA”). The lease is subject to various use restrictions, as defined in the lease, including the requirement that all 10 of the units be continuously set aside during the Affordability Period, as defined, for occupancy by qualified low-income households. The terms of the lease provide for a ground lease fee of $910 payable annually beginning January 1, 2012, throughout the term of the lease. The Authority has the option to extend the lease for one additional 99-year term. All improvements, alterations, additions, equipment and fixtures shall remain the property of the Authority, subject to the restrictions under the lease.



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10. Commitments and contingencies (continued) e. Ground Lease - Norton Apartments

As part of the purchase of Norton Apartments (see Note B-7-h), the Authority has executed a 99-year ground lease agreement with Pinellas Community Housing Foundation, Inc. (“Lessor”) as Trustee of the Pinellas Community Housing Program Land Trust - Norton Apartments, a land trust formed for the benefit of the Housing Finance Authority of Pinellas County, Florida (“FHA”). The lease is subject to various use restrictions, as defined in the lease, including the requirement that all 48 of the units be continuously set aside during the Affordability Period, as defined, for occupancy by qualified low-income households. f. Ground Lease - Norton Apartments

The terms of the lease provide for a ground lease fee of $4,344 payable annually beginning January 1, 2012, throughout the term of the lease. The Authority has the option to extend the lease for one additional 99-year term. All improvements, alterations, additions, equipment and fixtures shall remain the property of the Authority, subject to the restrictions under the lease.

11. Concentrations For the year ended December 31, 2015, approximately 65% of revenues and 8% of receivables reflected in the basic financial statements are from HUD. The Authority operates in a heavily regulated environment. The operations of the Authority are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies, including, but not limited to, HUD. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by HUD. Such changes may occur with little notice or inadequate funding to pay for the related costs and the additional administrative burden to comply with the changes.

12. Financial data schedule As required by HUD, the Authority prepares its financial data schedule in accordance with HUD requirements in a prescribed format which differs from the presentation of the basic financial statements. The schedule’s format presents certain operating items as non-operating such as depreciation expense, housing assistance payments and extraordinary maintenance expense. In addition, the schedule’s format includes non-operating items as operating such as investment revenue, HUD capital grants revenue, gains and losses on the disposal of capital assets and interest expense. Furthermore, the schedule reflects tenant revenue and bad debt expense separately.



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NOTE B - DETAILED NOTES (continued) 13. Condensed blended combining information Condensed component unit information for the Authority’s blended component units as listed in Note A-1 is presented below. Pinellas County Housing and Economic Development Corporation is included in the reporting entity as a blended component unit but this entity had incurred little to no activity as of December 31, 2015. Condensed Statement of Net Position

Palm Lake Village Housing

Corporation

PCHA Development,

LLCPinellas

Heights, LLC

Landings at Cross Bayou,

LLCHeritage

Oaks, LLC

Assets:Current assets 4,588,831$ 1,522,471$ 600,000$ 292,269$ 23,120$ Restricted assets 1,673,417 - - - - Due from other programs 550,707 618,290 - - - Capital assets, net 25,483,725 - - - 34,418 Notes receivable 470,134 - - 334,217 - Investments in joint ventures 600,000 - - - - Other noncurrent assets 103,025 - - - -

Total assets 33,469,839 2,140,761 600,000 626,486 57,538

Deferred outflows 103,906 - - - - Liabilities:

Current liabilities 1,011,241 - - - 383 Due to other programs 125,641 - 600,000 34,331 34,035 Noncurrent liabilities 17,559,551 - - - -

Total liabilities 18,696,433 - 600,000 34,331 34,418

Deferred inflows 28,884 - - - - Net position:

Net investment in capital assets 8,059,300 - - - 34,418 Restricted 1,458,933 - - - - Unrestricted 5,330,195 2,140,761 - 592,155 (11,298)

Total net position 14,848,428$ 2,140,761$ -$ 592,155$ 23,120$



December 31, 2015

53


13. Condensed blended combining information (continued)

Condensed Statement of Revenues, Expenses, and Changes in Net Position


Corporation

PCHA Development,

LLC

Pinellas Heights,

LLC

Landings at Cross

Bayou, LLCHeritage

Oaks, LLC

Operating revenues and (expenses)Tenant revenue, net 5,925,647$ -$ -$ -$ -$ Other government grants 1,222,043 - - - - Other revenue 241,239 421,185 - - 23,120 Depreciation (1,715,711) - - - - Other operating expenses (5,033,244) (139) - (138) -

Operating income (loss) 639,974 421,046 - (138) 23,120 Nonoperating revenues and (expenses)

Interest income - - - 2,293 - Interest expense (689,424) - - - - Transfer from (to) other programs (7,282,849) - - - -

Change in net position (7,332,299) 421,046 - 2,155 23,120 Beginning net position 22,565,516 1,719,715 - 590,000 - Prior period adjustment (384,789) - - - -

Ending net position 14,848,428$ 2,140,761$ -$ 592,155$ 23,120$

Condensed Statement of Cash Flows


Corporation

PCHA Development,

LLC

Pinellas Heights,

LLC

Landings at Cross

Bayou, LLCHeritage

Oaks, LLC

Net cash provided by (used in):Operating activities 2,342,662$ 355,594$ -$ 345,905$ 34,418$ Capital and related financing activities (2,635,936) - - (339,043) (34,418) Investing activities 607,056 - - - -

Net increase (decrease) in cash 313,782 355,594 - 6,862 - Beginning cash 2,202,799 523,455 - 278,288 -

Ending cash 2,516,581$ 879,049$ -$ 285,150$ -$



December 31, 2015

54


14. Prior period adjustment - change in accounting principle Due to the implementation of GASB Statement No. 68, Accounting and Financial Reporting For Pensions, the Authority is reflecting a prior period adjustment in the amount of $1,943,151 to restate beginning balances of its pension plan components. As provided by the statement, the Authority is reflecting the restatement as of the June 30, 2014 measurement date and the current year’s activity as of the June 30, 2015 measurement date. The effect on the beginning balances is a reduction of net position as presented in the statement of revenues, expenses, and changes in net position of $1,943,151 which consists of an increase in the net pension liability of $1,461,643 (see Notes B-7 and B-8), and an increase in the deferred inflows of $773,224 for the change in assumptions, and an increase in deferred outflows of $291,716 for pension contributions made after the June 30, 2014 measurement date. 15. Subsequent events Management has evaluated subsequent events through August 29, 2016, the date which the financial statements were available to be issued, and noted no additional significant items to be disclosed, except as follows: In August 2016, the Board will consider for approval, the development of the Palms of Pinellas Multi-Family Affordable Housing Development, and execution of loan documents with USAmeriBank for approximately $10,382,000. This will be comprised of two mortgage loans; approximately $9,032,000 with the Palms of Pinellas for a 30 year amortization at a 4.67% interest rate and $1,350,000 with Magnolia Gardens for a 30 year amortization at a 4.67% interest rate. The loans are expected to be executed in November 2016.

55

SUPPLEMENTAL INFORMATION


FINANCIAL DATA SCHEDULE

Year ended December 31, 2015

PHA: FL062 FYED: 12/31/2015

Line Item No. Account Description

AMP 2RainbowVillage

Operating14.850

AMP 2RainbowVillage

Capital Fund14.872

AMP 4LakesideTerrace

Operating14.850


Capital Fund14.872 Total AMPS

Section 8 Housing Choice

Voucher Program14.871

N/C S/R Section 8 Programs 14.182

Resident Opportunity and Support Service

14.870Central OfficeCost Center

Business Activities: East Lake, Redwood & Corporate Office

Blended Component Unit Subtotal Elimination Total

111 Cash - Unrestricted 90,272 - 176,099 - 266,371 178,679 144,626 - 71,605 1,925,412 2,348,362 - 4,935,055

113 Cash - other restricted - - - - - 212,454 - - - - 752,692 - 965,146

114 Cash - Tenant Security Deposits 51,212 - 12,175 - 63,387 - 7,673 - - 110,962 182,733 - 364,755

115 Cash - Restricted for payment of current liability - - - - - 77,100 - - - - 396,993 - 474,093

100 Total Cash 141,484 - 188,274 - 329,758 468,233 152,299 - 71,605 2,036,374 3,680,780 - 6,739,049

122 Accounts Receivable - HUD 12,538 - 68,027 - 80,565 75,391 - 11,415 - - - - 167,371

125 Accounts Receivable - Miscellaneous 839 - - - 839 - 292 - 96,075 44,086 689,083 - 830,375

126 Accounts Receivable - Tenants Dwelling Rents 3,487 - 1,794 - 5,281 - 8,138 - - 2,806 71,655 - 87,880

126.1 Allowance for Doubtful Accounts - Dwelling Rents (1,860) - (250) - (2,110) - (757) - - (1) (2,687) - (5,555)

126.2 Allowance for Doubtful Accounts - Other (1) - - - (1) (1) (1) - (1) (1) (1) - (6)

127 Notes, Loans, & Mortgages Receivable - current - - - - - - - - - - 20,113 (20,113) -

129 Accrued interest receivable - - - - - - - - - 1,215,895 623 (623) 1,215,895

120 Total Receivables, net of allowances for doubtful accounts 15,003 - 69,571 - 84,574 75,390 7,672 11,415 96,074 1,262,785 778,786 (20,736) 2,295,960

131 Investments - Unrestricted 328,809 - 406,485 - 735,294 295,513 - - 99,177 756,200 3,831,586 - 5,717,770

132 Investments - restricted - - - - - 129,614 - - - - - - 129,614

135 Investments - restricted for payment of current liability - - - - - - - - - - - - -

142 Prepaid Expenses and Other Assets 7,524 - 3,403 - 10,927 20,046 8,486 2,007 41,119 18,599 47,955 - 149,139

143 Inventories 13,434 - 1,952 - 15,386 - 3,394 - - 22,033 22,224 - 63,037

143.1 Allowance for Obsolete Inventories (1,343) - (195) - (1,538) - (339) - - (2,203) (2,222) - (6,302)

144 Interprogram due from - - - - - - - - 157,618 367,045 1,168,997 (1,693,660) -

150 Total Current Assets 504,911 - 669,490 - 1,174,401 988,796 171,512 13,422 465,593 4,460,833 9,528,106 (1,714,396) 15,088,267

161 Land 92,655 - 154,800 - 247,455 - - - - 5,655,795 6,497,859 - 12,401,109

162 Buildings 10,926,373 - 5,010,634 - 15,937,007 - 3,510,740 - - 25,833,581 39,909,468 - 85,190,796

164 Furniture, Equipment & Machinery - Administration 153,707 - 95,420 - 249,127 106,078 14,692 - 120,109 141,593 361,624 - 993,223

165 Leasehold Improvements 155,777 - 228,103 - 383,880 - 65,245 - - 774,139 634,101 - 1,857,365

166 Accumulated Depreciation (9,441,262) - (4,138,833) - (13,580,095) (102,048) (725,510) - (120,109) (9,629,121) (21,982,996) - (46,139,879)

167 Construction In Progress 98,497 - 194,682 - 293,179 - 8,764 - - - 98,087 - 400,030

160 Total Fixed Assets, Net of Accumulated Depreciation 1,985,747 - 1,544,806 - 3,530,553 4,030 2,873,931 - - 22,775,987 25,518,143 - 54,702,644

171

Notes, loans, and mortgages receivable - Noncurrent - - - - - - - - - 12,505,010 804,351 (804,351) 12,505,010

174 Other Assets - - - - - - 28,331 - - 682,824 444,024 - 1,155,179

176 Investment in joint ventures - - - - - - - - - - 600,000 - 600,000

180 Total Non-Current Assets 1,985,747 - 1,544,806 - 3,530,553 4,030 2,902,262 - - 35,963,821 27,366,518 (804,351) 68,962,833

190 Total Assets 2,490,658 - 2,214,296 - 4,704,954 992,826 3,073,774 13,422 465,593 40,424,654 36,894,624 (2,518,747) 84,051,100

200 Deferred Outflow of Resources 45,348 - - - 45,348 118,081 9,057 - 130,968 63,025 103,906 - 470,385

290 Total Assets and Deferred Outflows 2,536,006 - 2,214,296 - 4,750,302 1,110,907 3,082,831 13,422 596,561 40,487,679 36,998,530 (2,518,747) 84,521,485

See independent auditor's report.

56




PHA: FL062 FYED: 12/31/2015


AMP 2RainbowVillage

Operating14.850

AMP 2RainbowVillage

Capital Fund14.872


Operating14.850










321 Accrued Wage/Payroll Taxes Payable 4,409 - 1,486 - 5,895 11,363 1,343 913 15,975 4,144 49,370 - 89,003

322 Accrued Compensated Absences 347 - - - 347 2,138 644 - 2,869 1,897 5,379 - 13,274

325 Accrued interest payable - - - - - - 2,799 - - - 83,826 (623) 86,002

331 Accounts Payable - HUD PHA Programs - - - - - 1,538 - - - - - - 1,538

333 Accounts Payable - Other Government - - - - - - - - - 75,630 102,576 - 178,206

341 Tenant Security Deposits 51,212 - 12,175 - 63,387 - 7,673 - - 110,962 182,733 - 364,755

342 Unearned Revenues 5,258 - 316 - 5,574 - 385 - - 89,177 3,914 - 99,050

343 Current portion of L-T debt - capital projects - - - - - - 46,206 - - 296,127 365,242 (20,113) 687,462

345 Other current liabilities 1,474 - 531 - 2,005 100,364 68 - 681 2,159 5,278 - 110,555

346 Accrued liabilities - other 76,869 - 71,716 - 148,585 75,153 10,477 13 60,195 672,500 213,306 - 1,180,229

347 Interprogram due to - - - - - - - 6,082 418,822 474,749 794,007 (1,693,660) -

310 Total Current Liabilities 139,569 - 86,224 - 225,793 190,556 69,595 7,008 498,542 1,727,345 1,805,631 (1,714,396) 2,810,074

351 Long-term debt, net of current - capital projects - - - - - - 2,905,533 - - 12,717,354 17,059,183 (804,351) 31,877,719

353 Noncurrent Liabilities - Other - - - - - 212,454 - - - - - - 212,454

354 Accrued compensated Absenses - Non Current 5,559 - 8,457 - 14,016 38,296 4,603 6,414 152,866 22,389 47,063 - 285,647

357 Net Pension Liability 205,770 - - - 205,770 524,120 39,815 - 588,966 284,226 453,305 - 2,096,202

350 Total Noncurrent Liabilities 211,329 - 8,457 - 219,786 774,870 2,949,951 6,414 741,832 13,023,969 17,559,551 (804,351) 34,472,022

300 Total Liabilities 350,898 - 94,681 - 445,579 965,426 3,019,546 13,422 1,240,374 14,751,314 19,365,182 (2,518,747) 37,282,096

400 Deferred Inflow of Resources 41,642 - - - 41,642 65,679 3,619 - 100,838 51,478 28,884 - 292,140

508.4 Net Investment in Capital Assets 1,985,747 - 1,544,806 - 3,530,553 4,030 (77,808) - - 9,762,506 8,093,718 824,464 22,137,463

511.4 Restricted Net Position - - - - - 129,614 - - - 10,299,000 1,458,933 - 11,887,547

512.4 Unrestricted Net Position 157,719 - 574,809 - 732,528 (53,842) 137,474 - (744,651) 5,623,381 8,051,813 (824,464) 12,922,239

513 Total Equity 2,143,466 - 2,119,615 - 4,263,081 79,802 59,666 - (744,651) 25,684,887 17,604,464 - 46,947,249

600 Total Liabilities, Deferred Inflows and Equity 2,536,006 - 2,214,296 - 4,750,302 1,110,907 3,082,831 13,422 596,561 40,487,679 36,998,530 (2,518,747) 84,521,485


57




PHA: FL062 FYED: 12/31/2015


AMP 2RainbowVillage

Operating14.850

AMP 2RainbowVillage

Capital Fund14.872


Operating14.850










70300 Net Tenant Rental Revenue 482,870 - 285,599 - 768,469 - 95,222 - - 2,493,807 4,343,663 - 7,701,161

70400 Tenant Revenue - Other 34,846 - 3,903 - 38,749 - 2,250 - - 425,447 1,610,409 (177,420) 1,899,435

70500 Total Tenant Revenue 517,716 - 289,502 - 807,218 - 97,472 - - 2,919,254 5,954,072 (177,420) 9,600,596

70600 HUD PHA Grants 856,047 147,199 262,031 92,011 1,357,288 24,778,212 464,451 88,416 - 116,498 - - 26,804,865

70610 HUD PHA Capital Grants - 266,914 - 237,558 504,472 - - - - - - - 504,472

70710 Management Fee Revenue - - - - - - - - 725,308 - - (725,308) -

70720 Asset Management Fee Revenue - - - - - - - - 42,720 - - (42,720) -

70730 Bookkeeping Fee Revenue - - - - - - - - 314,933 - - (314,933) -

70800 Other government grants - - - - - - - - - - 1,222,043 - 1,222,043

71100 Investment Income - Unrestricted 1,658 - 2,046 - 3,704 461 - - 489 3,746 69,411 - 77,811

71200 Mortgage interest income - - - - - - - - - 457,181 14,683 (14,683) 457,181

71400 Fraud recovery - - - - - 29,107 - - - - - - 29,107

71500 Other revenue 7,644 - - - 7,644 83,460 49,866 - 261,389 665,732 603,743 (744,133) 927,701

72000 Investment income - restricted - - - - - 1,076 - - - - - - 1,076

70000 Total Revenue 1,383,065 414,113 553,579 329,569 2,680,326 24,892,316 611,789 88,416 1,344,839 4,162,411 7,863,952 (2,019,197) 39,624,852


58




PHA: FL062 FYED: 12/31/2015


AMP 2RainbowVillage

Operating14.850

AMP 2RainbowVillage

Capital Fund14.872


Operating14.850










91100 Administrative Salaries 81,200 71,728 52,444 33,218 238,590 774,895 31,578 54,567 1,060,705 132,651 486,234 - 2,779,220

91200 Accounting and Auditing Fees 9,700 - 5,300 - 15,000 25,000 1,249 - - 250 8,550 - 50,049

91300 Management Fee 130,871 39,215 72,522 21,568 264,176 454,488 36,707 - - 338,289 372,626 (1,466,286) -

91310 Book-keeping Fee 16,905 - 9,832 - 26,737 284,055 - - - 4,141 - (314,933) -

91400 Advertising and Marketing - - - - - - - - - 10,240 - - 10,240

91500 Employee Benefit Contributions - Administrative 35,111 - 17,785 - 52,896 265,127 13,094 22,213 312,722 40,709 106,258 - 813,019

91600 Office Expenses 74,215 - 63,151 - 137,366 273,946 16,913 4,705 81,047 43,536 197,936 (177,420) 578,029

91700 Legal Expense 8,594 - 3,674 - 12,268 8,470 2,797 - 1,820 6,131 7,572 - 39,058

91800 Travel 4,621 - 2,967 - 7,588 10,376 912 373 17,997 1,170 3,031 - 41,447

91900 Other - 870 - 17,763 18,633 - - - - - - - 18,633

92000 Asset Management Fee Expense 24,000 - 13,200 - 37,200 - - - - 5,520 - (42,720) -

92100 Tenant services - salaries 13,874 - - - 13,874 - 19,910 - - - 845,440 - 879,224

92200 Relocation Costs - - - - - - - - - 149,651 - - 149,651

92300 Employee benefit contributions - tenant services 2,366 - - - 2,366 - 5,114 - - - 122,210 - 129,690

92400 Tenant Services - Other 5,396 - 7,800 - 13,196 - 11,329 14 - 28,284 377,019 - 429,842

93100 Water 198,440 - 72,783 - 271,223 - 42,428 - - 97,420 579,227 - 990,298

93200 Electricity 57,006 - 3,473 - 60,479 - 9,923 - - 114,496 223,192 - 408,090

93300 Gas 51,192 - 183 - 51,375 - 831 - - 10,971 24,742 - 87,919

94100 Ordinary Maintenance and Operations - Labor 212,381 - 54,171 - 266,552 - 40,802 - - 143,180 312,213 (1,893) 760,854

94200 OMO - Materials and Other 161,551 - 34,716 - 196,267 - 36,065 - - 105,005 182,952 - 520,289

94300 OMO - Contract Costs 137,787 - 45,559 - 183,346 - 60,875 - - 318,315 443,179 - 1,005,715

94500 Employee Benefit Contributions - Ordinary Maintenance 69,478 - 18,089 - 87,567 - 19,290 - - 70,279 125,167 (1,262) 301,041

95200 Protective Services - Other Contract Costs 74,909 - 6,813 - 81,722 - 881 - - 18,848 26,920 - 128,371

96110 Property Insurance 62,601 - 15,160 - 77,761 - 10,356 - - 120,913 289,305 - 498,335

96120 Liability Insurance 8,894 - 5,153 - 14,047 10,400 2,168 - - 11,195 76,489 - 114,299

96130 Workmen's Compenasation 3,879 - 1,089 - 4,968 12,950 1,098 - 9,807 3,317 6,738 - 38,878

96140 All Other Insurance 2,398 - 1,517 - 3,915 2,627 2,091 - 6,959 13,808 22,589 - 51,989

96200 Other General Expenses - - - - - 1,537 - - - - - - 1,537


59




PHA: FL062 FYED: 12/31/2015


AMP 2RainbowVillage

Operating14.850

AMP 2RainbowVillage

Capital Fund14.872


Operating14.850










96210 Compensated Absences 26,447 - 8,447 - 34,894 58,017 10,894 6,544 152,094 26,447 91,355 - 380,245

96300 Payments in Lieu of Taxes - - - - - - - - - 81,783 102,576 - 184,359

96400 Bad Debt - Tenant Rents 7,502 - 3,700 - 11,202 - 423 - - 9,755 28,425 - 49,805

96710 Interest on Mortage (or Bonds ) Payable - - - - - - 78,358 - - 745,000 683,105 (14,683) 1,491,780

96730 Amortization of Bond Issue Costs - - - - - - 3,115 - - 12,133 6,319 - 21,567

96900 Total Operating Expenses 1,481,318 111,813 519,528 72,549 2,185,208 2,181,888 459,201 88,416 1,643,151 2,663,437 5,751,369 (2,019,197) 12,953,473

97000 Excess Operating Revenue over Operating Expenses (98,253) 302,300 34,051 257,020 495,118 22,710,428 152,588 - (298,312) 1,498,974 2,112,583 - 26,671,379

97300 Housing Assistance Payments - - - - - 22,710,701 - - - - - - 22,710,701

97350 HAP Portability-In - - - - - - - - - - - - -

97400 Depreciation Expense 336,597 - 221,307 - 557,904 10,806 206,587 - 8,742 882,172 1,715,711 - 3,381,922

90000 Total Expenses 1,817,915 111,813 740,835 72,549 2,743,112 24,903,395 665,788 88,416 1,651,893 3,545,609 7,467,080 (2,019,197) 39,046,096

10010 Operating transfers in 35,386 - 19,462 - 54,848 34,500 - - - 7,282,849 - (7,372,197) -

10020 Operating transfers out - (35,386) - (19,462) (54,848) - - - - (34,500) (7,282,849) 7,372,197 -

10100 Total other financing sources (Uses) 35,386 (35,386) 19,462 (19,462) - 34,500 - - - 7,248,349 (7,282,849) - -

10000

Excess (deficiency) of total revenue over (under) total expenses (399,464) 266,914 (167,794) 237,558 (62,786) 23,421 (53,999) - (307,054) 7,865,151 (6,885,977) - 578,756

11020 Debt Principal Payments - - - - - - 29,400 - - 274,747 304,941 - 609,088

11030 Beginning Equity 2,480,152 - 2,049,851 - 4,530,003 534,626 148,580 - 127,740 18,095,465 24,875,230 - 48,311,644

11040

Prior Period Adjustments, Equity transfer and correction of errors 62,778 (266,914) 237,558 (237,558) (204,136) (478,245) (34,915) - (565,337) (275,729) (384,789) - (1,943,151)

11200 Unit Months Available 2,400 - 1,320 - 3,720 39,811 576 - - 3,025 9,732 - 56,864

11210 Number of Unit Months Leased 2,373 - 1,315 - 3,688 37,874 571 - - 2,893 9,430 - 54,456

11170 Administrative Fee Equity - - - - - (49,812) - - - - - - (49,812)

11180 Housing Assistance Payments Equity - - - - - 129,614 - - - - - - 129,614

11270 Excess Cash 222,112 - 536,285 - 758,397 - - - - - - - 758,397

11650 Leasehold Improvement Purchases - 266,914 - 237,558 504,472 - - - - - - - 504,472


60


SCHEDULE OF ACTUAL CAPITAL FUND PROGRAM COSTS AND ADVANCES


PROGRAMCFP

501-11CFP

501-12CFP

501-13CFP

501-14CFP

501-15CFP

501-16RHF

501-13RHF

501-14RHF

501-15 Total

BUDGET 693,296$ 630,842$ 607,840$ 155,085$ 412,163$ 511,477$ 62,248$ 70,642$ 72,051$ 3,215,644$

ADVANCESCash receipts - prior years 421,013$ 101,083$ 18,125$ 73,087$ -$ -$ -$ -$ -$ 613,308$ Cash receipts - current year 272,283 183,581 296,559 81,998 - - - - - 834,421

Cumulative as of December 31, 2015 693,296 284,664 314,684 155,085 - - - - - 1,447,729

COSTSPrior years 471,759 139,643 18,125 73,087 - - - - - 702,614 Current year 221,537 172,838 349,307 81,998 - - - - - 825,680

Cumulative as of December 31, 2015 693,296 312,481 367,432 155,085 - - - - - 1,528,294

RECEIVABLE DUE FROM HUD -$ 27,817$ 52,748$ -$ -$ -$ -$ -$ -$ 80,565$

SOFT COSTSPrior years 354,541$ 97,825$ -$ 73,087$ -$ -$ -$ -$ -$ 525,453$ Current year 44,600 75,643 118,967 81,998 - - - - - 321,208

Cumulative as of December 31, 2015 399,141 173,468 118,967 155,085 - - - - - 846,661

HARD COSTSPrior years 117,218 41,818 18,125 - - - - - - 177,161 Current year 176,937 97,195 230,340 - - - - - - 504,472

Cumulative as of December 31, 2015 294,155 139,013 248,465 - - - - - - 681,633

CUMULATIVE HARD AND SOFT COSTS 693,296$ 312,481$ 367,432$ 155,085$ -$ -$ -$ -$ -$ 1,528,294$


61

62

SINGLE AUDIT SECTION


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Federal Grantor/Pass-Through Grantor/Program or Cluster Title

CFDANumber

FederalExpenditures

Direct from the U.S. Department of Housing and Urban Development:

Section 8 Housing Choice Voucher Program 14.871 24,778,212$ Public and Indian Housing 14.850 1,118,078 Public Housing Capital Fund Program 14.872 825,680 Resident Opportunity and Support Service 14.870 122,916 Section 8 New Construction 14.182 464,451

TOTAL EXPENDITURES OF FEDERAL AWARDS 27,309,337$

Note 1

Note 2

The above schedule of expenditures of federal awards includes the federal grant activityof the Authority and is presented on the accrual basis of accounting. The information onthis schedule is presented in accordance with the requirements of Title 2 U.S. Code ofFederal Regulations (CFR) Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements . Therefore, some amounts presented in this schedulemay differ from amounts presented in, or used in the preparation of, the basic financialstatements.

In accordance with HUD regulations, HUD considers the Annual Budget Authority for theHousing Choice Voucher Program, CFDA No. 14.871, to be considered an expenditure forthe purposes of this schedule. Therefore, the amount in this schedule is the total amountreceived directly from HUD.


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Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’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 Authority’s internal control over compliance. Accordingly, this communication is not suitable for any other purpose. August 29, 2016 Melbourne, Florida


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We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Authority’s compliance. Opinion on Each Major Federal Program In our opinion, the Authority complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2015. Report on Internal Control Over Compliance Management of the Authority is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Authority’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. August 29, 2016 Melbourne, Florida



SCHEDULE OF FINDINGS AND QUESTIONED COSTS

December 31, 2015

68

A. SUMMARY OF AUDITOR’S RESULTS

Financial Statements Type of auditor’s report issued: Unmodified Internal control over financial reporting:

Material weakness identified? No Significant deficiencies identified? None reported

Noncompliance material to financial statements noted? No

Federal Awards Internal control over major programs:

Material weakness identified? No Significant deficiencies identified? None reported

Type of auditor’s report issued on compliance for major programs: Unmodified There are no audit findings included in this report that are required to be reported in accordance with 2 CFR 200.516(a). The program tested as a major program is as follows:

Housing Voucher Cluster Public Housing Capital Fund Program – CFDA No. 14.872

The threshold for distinguishing types A and B programs was $819,280

Did the auditee qualify as a low-risk auditee? Yes

B. FINDINGS AND QUESTIONED COSTS - FINANCIAL STATEMENTS AUDIT

None.

C. FINDINGS AND QUESTIONED COSTS - FEDERAL AWARD PROGRAMS

None.

D. PRIOR YEAR AUDIT FINDINGS None.

Documents

PINELLAS COUNT Y HOUSING · PDF fileIndependent Auditor’s Report on Internal Control Over Financial ... Governmental Accounting Standards Board ... statements in an appropriate operational,