june 2014 - capitolhillhousing.org€¦ · his bio is attached to the packet. ... roger valdez bio...

June 2014 Capitol Hill Housing Board Meeting Keys and Addenda

Reminder: Dinner begins at 5:45. The meeting starts promptly at 6 PM. Disclosures and recusals: Board members will review items on the agenda and make any necessary disclosures. New Members: The board will be introduced to potential board member Heyward Watson for a regular seat. His bio is attached to the packet. The board will be asked to consider the candidate for election at the end of this meeting. Finance: The finance committee presents its regular report and quarterly dashboard and the 2013 CHH Audit. Additionally the terms of renewal for our $300,000 operating line of credit with Key Bank have reached and the board will be asked to pass a resolution to renew the line. Presentation and Discussion: We will further our consideration of Incentive Zoning in Seattle with a presentation from Roger Valdez. Roger will present a perspective that is an alternative to the Housing Development Consortium position that we saw in May. His bio is attached. Executive Committee: Kristine Mathews and Amy Allsopp will present the new logo and branding concept. Chris will discuss next steps for the strategic planning process and provide an update on Fire Station 7 conversations. Chris will provide an update on our three recent awards. Real Estate Development Discussion: David will provide verbal updates on 12th Avenue Arts. The board will enter executive session to discuss current transactions. Foundation Update: Michael will discuss this year’s Omnivorous event planned for September. Board Packet Attachments 1. Meeting Keys & Agenda 2. Consent Agenda and Attachments

a. Contracts and Expenditures b. Draft Board Minutes c. Property Management Report and Minutes d. Property Management dashboard e. Memo from the CHH Foundation f. Real Estate Development Report and Minutes g. Executive Director Report (distributed at meeting)

Upcoming Meetings and Events Monday, June 9

CHH Board Meeting Mon, June 16 Board Member Building Tours Mon, June 23 CHH Executive Committee Meeting Monday, July 14 CHH Board Meeting

h. Executive Committee Minutes 3. Finance and Asset Management Report 4. 2013 CHH Audit 5. Line of Credit with Key Bank: Resolution 2014-08 (distributed at meeting) 6. Roger Valdez Bio 7. Heyward Watson Resume

CAPITOL HILL HOUSING BOARD June 9, 2014

6:00 PM – 7:40 PM Regular Meeting Admissions and Alumni Building Seattle University, Seattle, WA

AGENDA

6:00 Call to Order (Quaintance)

1. Approve consent agenda Attachment 2 2. Disclosures and recusals 3. Guest introductions

6:05 Public Comment (Not to exceed 5 minutes per individual or 15 for combined speakers) 6:10 Treasurer and Finance Committee Report (O’Donnell & Fleming)

1. Financial summary, cash management report: April 2014 Attachment 3 2. Presentation of 2013 CHH Audit Attachment 4 3. Line of Credit with Key Bank: Resolution 2014-08 Handout

6:20 Presentation and Discussion

1. Incentive Zoning (Roger Valdez, Smart Growth Seattle) PowerPoint 6:50 Executive Committee & Executive Director Report (Quaintance & Persons)

1. Branding Presentation PowerPoint 2. 2014 Strategic Planning Meeting Next Steps Handout 3. Fire Station Seven Verbal 4. Forterra, PSRC and Neighborworks Awards Verbal

7:10 Real Estate Development Discussion (Dologite/Persons)

1. 12th Avenue Arts Verbal 2. Real Estate Transaction Matters

The Board will enter an executive session to consider the acquisition of real estate by lease or purchase when public knowledge regarding such consideration would cause a likelihood of increased price.

7:30 Foundation and Communications Update (Seiwerath) 1. Omnivorous

7:35 Board Candidate Discussion (Quaintance/Persons) Attachment 7 7:40 Adjourn (Quaintance)

THIS PAGE INTENTIONALLY LEFT BLANK

CAPITOL HILL HOUSING REGULAR MEETING

June 9, 2014 6:00 – 7:30 PM

A&A Community Room Seattle Univeristy Seattle, WA

CONSENT ITEMS

MINUTES AND REPORTS 1. May 2014 Board Meeting Minutes (attached for adoption) 2. Committee Reports and Minutes (attached for acceptance)

DONATIONS, TRANSACTIONS OVER $10,000 OR 1-YEAR, AGREEMENTS WITH PUBLIC ENTITIES

Date Bldg/entity Contract with: Amount: Purpose

GP ACTIVITIES (information only)

Date Contract with: Amount Purpose

May 2014 Board Minutes Page 1 of 3

Capitol Hill Housing

Regular Board Meeting

A&A Building Seattle Univeristy

Seattle, WA

May 12, 2014

Members Present: Alice Quaintance, Drew Porter, Farin Houk, Catherine Hillenbrand, Liz Dunn, Paige

Chapel, Matt Roewe, Sharron O’Donnell, Robert Schwartz Staff Present: Chris Persons, David Dologite,

Michael Seiwerath, Joel Sisolak, Cynthia Chirot, Jill Fleming, Melissa Blankenship (taking minutes) Guests

Present: Jaebadiah Gardner , Paul Breckenridge, Kelly Rider. Absent: Michael Malone, Pamela Banks,

Dana Behar, Rachel Ben-Shmuel.

Because a quorum was not reached at 6:00 PM Alice asked Michael to make his presentation.

Foundation and Communications Update: Michael presented a briefing on the success of Top of the

Town and provided information on the upcoming Give Big campaign. He then provided an Update on

the Community Forum to be held at the Century Ballroom on May 20th. He also reported that the

branding process is moving forward and a final design will be brought to the board at the June meeting.

Agenda & Minutes: The May 12th meeting of the Capitol Hill Housing Board of Directors was called to

order by Chair Alice Quaintance at 6:05pm.

A motion to approve the Consent Agenda was made, seconded and passed unanimously.

Disclosures and recusals: Catherine Hillenbrand disclosed that she is the Chair of the Champion Steering

Committee.

Guest Introductions: The board was introduced to two potential board members: Paul Breckenridge for

a regular seat and Jaebadiah Gardiner for the Emerging Leader seat.

Public comment: Randall Lindsey a resident of the Ponderosa addressed the board regarding his

frustrations about both CHH Staff and his conflict with other residents. He feels he is being harassed by

two tenants in the building and feels that the site staff and CHH management have not sufficiently

addressed his issues. Staff reported that they were aware of the circumstances of which Mr. Lindsey

had spoken to the board in the past and that they were very involved in seeking appropriate resolutions

to his concerns.


Treasurer and Finance Committee Report: Sharron presented the finance committee’s regular report.

There were no additions to the written report.

A motion to accept the Treasurer and Finance report was made, seconded, and passed unanimously.

Incentive Zoning Introduction: Kelly Rider of HDC presented the HDC Incentive Zoning position paper as

an introduction to a full board level discussion on incentive zoning in Seattle to be held at our June

meeting.

Executive Committee and Executive Director Report: The date for the strategic planning board and

management retreat is set for June 4 at the Summit Event Space from 12-5pm.The final retreat agenda

was reviewed by the board.

The executive committee has reviewed the policy for use of executive session for the discussion of real

estate transactions in development and they have been presented to the full board via memo in the

board packet. The policy will be implemented at this meeting.

Chris announced that the CH Development Association (CHDA) requires a new board member due to the

departure of Brian Lloyd. The board of CHH appoints all CHDA board members.

A motion to appoint Liz Dunn was CHDA board was made, seconded and passed unanimously.

Real Estate Development: David provided verbal updates on 12th Avenue Arts and projections of real

estate developments, revenue and staffing for the next 4-5 years. The board was asked to adopt

Resolution 2014-07, a standard form resolution provided by the Washington State Housing Finance

Commission granting signature authority for execution of the tax credit documents related to the Haines

and pursuant to CHH Resolution 2012-01.

A motion to accept Resolution 2014-07 was made, seconded, and passed unanimously.

The Board entered into executive session at 7:00pm to consider the acquisition of real estate by lease or

purchase. The board exited Executive Session at 7:08 pm.

EcoDistrict update: Joel Sisolak presented an update of the EcoDistrict retreat, progress made in the

department and updates on the many projects currently underway.

Board Candidate Discussion: Alice and Chris presented Paul Breckenridge and Jaebadiah Gardiner to the

board as nominees.

A motion to elect Paul Breckenridge to the board in a regular seat was made, seconded, and passed

unanimously.


A motion to elect Jaebadiah Gardner to the Emerging Leader board member seat was made, seconded,

and passed unanimously.

The meeting was adjourned at 7:45pm

Attested,

____________________________________

Alice Quaintance, Chair May 12, 2014

PROPERTY MANAGEMENT REPORT

Property Management Committee Members: Rob Schwartz (Chair), Farin Houk, Cathy Hillenbrand and Mitchell Belcher. Staff: Cynthia Chirot, Billie Abers

June 2014

The Property Management Committee met June 3, 2014 at 12:00pm. Farin Houk, Cathy Hillenbrand, and Mitchell Belcher met with Cynthia Chirot, Chief Operating Officer, Billie Abers, Director of Property Management, Tristan Heart Hunter, Portfolio Manager and Amanda Alvarez, Leasing Supervisor. The committee reviewed the report and discussed current asset management and property management activities. Current Asset Management

Brewster—Met with Senior City Light Management 4/17/14 to discuss mitigation. We indicated that we continued to be concerned about EMF, vacation of Pontius, size of substation, etc. and would be evaluating our options moving forward. Sent comment letter responding to EIS 4/25/14, waiting for response. Hazel Plaza –Hired RAFN as contractor. RAFN continues to refine cost estimate. Constructability review will be completed after final scope and estimate are determined. Construction expected to start early summer. Portfolio assessment –Portfolio Assessment and Action Plans were presented to the site staff at the May meeting. Portfolio Strategy Matrix has been developed to track action steps and for use in quarterly meeting with Portfolio Managers to discuss progress. Broadway—CHH is continuing to explore affordable ownership options. A Condo conversion would be difficult due to expenses and potential liability. Looking into conversion to a co-‐op, which would avoid many of the issues associated with condos. Potential downside is co-‐ops are less well known in market which may limit appeal. Review is ongoing. Capital Projects—current We are working with the City of Seattle’s Weatherization Department to replace the boiler at Elizabeth James House. We are looking at a new innovative heat pump water heater system. Due to the complexity of the system we are working with a design team. We expect a scope of work to go out for proposals in August. We have two of three proposals to create an office space at the Silvian. Estimated cost is approximately $20,000. The meeting space at the Pantages is complete. Installation of the television for the projector will be

complete by mid-‐June. The installation of the fencing and playground equipment at Gale Place is complete. The ribbon cutting is scheduled for Friday June 6th, at 4 pm. The planters on the southeast corner of the property at Burke Gilman Gardens have been removed and the concrete pad poured. The new raised beds on the north side of the property are installed and the soil arrives next week. Resident Services Resident Services continued to hold office hours at the Ponderosa and Elizabeth James. Brett has assisted the residents at the Elizabeth James with bed bugs inspections and treatments. We have hired a new Resident Services Manager, Elliot Swanson. His first day is June 9th; he will work part time in June and start full time in July. Elliot will attend the July PMC meeting. Building Operations

From the Finance report: Year to date April 30, 2014 Blended Operating Statement Vacancy loss for the portfolio on a 12 month rolling basis is 2.7%. Vacancy loss for 2013 was 2.7% across the portfolio. This is a historically low vacancy rate for CHH. For the first four months of 2014, vacancy loss was 3.2%. Vacancy loss was 3.4% for 2012 and 3.9% for 2011. For budget purposes we assume vacancy rates ranging from 3 – 5 % depending on the building. The building occupancy rate for the month of April is 96% and it is at 97% for the twelve month rolling average. At the end of April 2014, we have 11 vacant units and that less than 2% of the portfolio. Special Topics 12AA Lease up – Amanda Alvarez discussed the lease up of 12AA which commences on June 9th. Charter – the committee discussed the newly drafted committee charter (attached) . Eligibility in Housing For Individuals with Criminal History – Tristan Heart Hunter presented the proposed changes to the CHH screening criteria and the timeline for roll out. The committee discussed topics for discussion at future meetings.

Capitol Hill Housing Property Management Committee Charter

Draft May 2014 Purpose: The Property Management Committee provides high level oversight, consents to broad property operational policy and gives guidance for the day-‐to-‐day operations of the properties. Areas of focus: • CNA’s • Reserve Levels • Dashboard/Key indicators • MSP analysis • Building operating budgets • Rent analysis • PM Personnel • Capital improvements, major repairs and maintenance Frequency of meeting: The Property Management Committee (PMC) meets monthly approximately one week in advance of the board meeting. Duration: Perpetual, as determined from time to time by the board. Membership and staffing: The PMC is chaired by a member of the Board appointed by the Chair and is comprised of at least 2 additional Board members and members of the community who have been officially appointed by the Board. It is staffed by the COO and Director of Property Management.


Operating Statement

For the period ending: 4/30/2014

Benchmarks

98% Excellent

95% Good

90% Poor

98% Excellent

95% Good

90% Poor

<30 days Excellent

45 days Good

60+ days Poor

1.15 excellent

1.05 good

<1.0 concern

1.15 excellent

1.05 good

<1.0 concern

Frequency YTD YTD YTD YTD YTD YTD Monthly YTD M M YTD 2014 A A

Type HUD Buildings Units Actual Inc Budget Var % Actual Exp Budget Var %

Op exp/unit -

YTD (Before

Res)

2014 YTD

Vac Loss

Vac 2/2013-

4/2014

YTD Vac

2013 2013 Vac

YTD Cash Flow

after reserves

Occupancy

Rate

Occupancy Rate

12 mth trend

Repl Res

Y or N

Op Res

Y or N

Average Unit

Turnaround Time

DCR 2013

Actual

DCR 2012

ActualComments

Blended HUD 18th Ave 9 38,609 37,475 3% 17,215 22,394 23% 1,913 0.0% 0.0% 0.9% 0.3% 6,614 100% 100% Y 1.14 1.02

Blended 410 Apts 6 18,106 16,992 7% 9,664 12,506 23% 1,611 0.0% 0.0% 8.3% 2.8% 5,439 100% 100% Y 2.49 3.03

Blended HUD 412 Apts 12 60,074 57,476 5% 27,312 43,112 37% 2,276 0.0% 0.0% 0.9% 0.3% 24,943 92% 98% Y 2.30 2.38

Blended Berneva 12 33,692 33,310 1% 25,520 27,901 9% 2,127 3.7% 1.2% 0.0% 0.0% 6,223 92% 99% Y Y 54 2.18 1.22

Blended Boylston Howell 30 93,307 92,362 1% 68,557 68,587 0% 2,285 0.0% 0.0% 7.5% 2.5% 21,431 100% 100% Y Y 1.09 1.08

Blended Bremer 49 131,594 128,348 3% 76,584 87,466 12% 1,563 2.0% 3.1% 4.4% 3.9% 19,330 96% 97% Y Y 63 1.25 1.46

Blended Brewster 35 93,050 89,902 4% 66,764 68,722 3% 1,908 3.4% 3.0% 3.4% 3.0% 17,520 97% 96% Y Y 47 3.20 1.64

Blended Broadway 5 16,745 18,699 -10% 15,424 11,950 -29% 3,085 10.9% 4.5% 5.5% 2.6% (1,856) 100% 97% Y 42 1.76 2.78 2-bedroom market unit vacant

Blended Burke Gilman Gardens 15 55,043 55,815 -1% 42,256 46,532 9% 2,817 4.3% 5.4% -0.3% 3.9% (12,712) 91% 94% Y Y 50 0.88 1.89 Once a year debt service payment

Blended Byron Wetmore 12 38,826 41,485 -6% 25,803 37,660 31% 2,150 8.0% 7.7% 9.5% 8.2% 5,618 100% 93% Y 177 1.35 2.97

Blended Casa di Cinque 5 19,788 19,261 3% 10,417 15,412 32% 2,083 0.0% 0.0% 0.0% 0.0% 7,365 100% 100% Y ***

Blended Centennial 30 94,929 97,408 -3% 54,969 56,827 3% 1,832 5.8% 3.2% 5.0% 2.9% (454) 93% 97% Y Y 35 1.12 1.13

Blended Devonshire 62 177,146 174,996 1% 121,031 124,815 3% 1,952 2.7% 4.0% 6.5% 5.3% 13,227 98% 95% Y Y 89 4.56 7.14

Blended HUD Elizabeth James 60 185,687 190,938 -3% 162,521 141,824 -15% 2,709 7.0% 2.8% 0.9% 0.7% (33,505) 93% 97% Y 43 1.51 1.67 Elevator expenses

Blended Fleming 36 97,955 96,570 1% 66,375 66,651 0% 1,844 2.4% 3.0% 7.6% 4.7% (2,483) 94% 96% Y Y 50 1.06 1.01

Blended Fredonia 12 48,879 54,609 -10% 44,284 45,210 2% 3,690 0.0% 0.5% 1.2% 0.9% 15,148 100% 98% Y Y 1.54 1.60

Blended Gale Place 24 101,410 89,696 13% 87,320 75,672 -15% 3,638 2.6% 1.3% 5.7% 2.3% 676 100% 99% Y 63 1.97 1.51

Blended Gilman Court 25 93,270 91,203 2% 73,029 76,325 4% 2,921 1.0% 2.1% 0.9% 2.1% 6,413 96% 98% Y Y 1.75 1.55

Discrete HUD Haines 30 94,193 94,113 0% 73,428 65,226 -13% 2,448 4.0% 1.3% 0.9% 0.6% (8,162) 97% 97% Y 79 part yr

Blended HUD Hazel Plaza 16 53,047 55,596 -5% 34,960 37,365 6% 2,185 7.3% 5.5% 0.1% 3.2% 11,960 94% 96% Y **

Blended HUD Holden Vista 16 50,868 53,208 -4% 52,769 49,555 -6% 3,298 10.8% 8.3% 3.2% 5.7% (20,215) Y 0.51 1.20 3rd party management

Blended John Carney 27 67,904 66,753 2% 47,031 49,519 5% 1,742 2.6% 3.0% 2.8% 3.1% 7,090 100% 98% Y Y 61 1.35 2.07

Blended Larned 33 74,406 73,156 2% 85,063 70,522 -21% 2,578 2.6% 3.2% 1.7% 2.9% (13,939) 100% 97% Y Y 99 ** $8000 reserves in transit

Blended Lincoln Court 29 87,886 87,055 1% 53,064 49,520 -7% 1,830 1.3% 0.9% 2.2% 1.2% 3,208 100% 99% Y Y 39 1.09 1.09

Blended HUD Mary Ruth Manor 20 79,216 78,871 0% 51,405 60,792 15% 2,570 2.6% 1.7% 0.0% 0.8% 8,563 95% 99% Y 38 2.11 1.37

Blended Maxwell 4 13,864 13,525 3% 8,718 9,879 12% 2,180 0.0% 0.0% 7.3% 2.4% 3,117 100% 100% Y 2.51 2.41

Blended Melrose 30 83,966 72,551 16% 53,266 59,869 11% 1,776 6.1% 3.9% 5.3% 3.6% 9,553 88% 96% Y Y 38 1.73 1.58

Blended Miller Park 12 42,816 43,176 -1% 31,744 32,207 1% 2,645 3.0% 3.1% 5.0% 3.8% 123 92% 97% Y Y 1.16 1.39

Blended Park Hill 30 114,705 113,832 1% 72,715 83,626 13% 2,424 3.7% 1.9% 2.1% 1.3% 20,733 94% 99% Y 1.76 1.44

Blended HUD Ponderosa 23 62,326 64,890 -4% 55,969 63,348 12% 2,433 6.6% 5.7% 1.3% 3.9% 1,459 95% 94% Y 114 ***

Blended Seneca 32 105,907 103,188 3% 69,770 79,824 13% 2,180 0.4% 1.6% 2.1% 2.2% 21,787 100% 98% Y Y 16 2.82 2.84

Blended Tiltsonian 5 16,080 16,056 0% 11,226 13,264 15% 2,245 9.2% 6.5% 4.7% 5.0% 2,054 81% 94% Y 63 1.13 2.00 3-bedroom unit vacant

Blended Villa 62 224,649 220,551 2% 123,536 134,871 8% 1,993 1.2% 1.5% 4.8% 2.8% 26,339 99% 98% Y Y 51 1.24 1.22

2,569,940 2,543,070 1,819,710 1,888,952 172,607

Discrete Broadway Crossing 44 101,696 107,845 -6% 77,031 71,686 93% 2,568 6.0% 3.8% 3.1% 4.2% (16,923) 91% 96% Y Y 74 1.37 1.64 $8000 reserves in transit

Discrete HUD El Nor 55 156,359 160,094 -2% 144,168 115,587 80% 2,942 5.3% 4.6% 0.1% 0.4% 12,874 100% 99% Y 81 1.69 1.30

Discrete Fremont Solstice 18 67,926 68,372 -1% 51,284 53,271 104% 2,849 5.0% 3.4% 0.0% 1.6% (3,699) 94% 97% Y Y 1.32 1.34

Discrete Harrison 19 85,810 89,292 -4% 65,923 74,651 113% 2,197 4.0% 3.3% 0.0% 0.0% (7,439) 95% 100% Y Y 1.10 1.03

Discrete HUD Helen V 38 132,409 133,674 -1% 124,870 115,596 93% 2,838 3.9% 4.4% 0.4% 0.8% 2,262 97% 99% Y Y 1.41 1.39

Discrete Holiday 30 105,707 99,471 6% 81,340 61,632 76% 2,392 3.6% 4.2% 11.8% 5.7% (18,130) 97% 96% Y 71 1.00 0.94 $8000 reserves in transit, payroll over budget, one time audit expense

Discrete Jefferson 40 134,146 132,341 1% 84,277 82,001 97% 2,218 1.6% 1.2% 1.7% 3.8% (10,798) 99% 97% Y 41 1.02 part yr $8000 R & M expense

Discrete Oleta 34 182,542 179,421 2% 129,319 139,254 108% 2,351 1.5% 0.9% 3.1% 4.1% (21,948) 90% 95% Y Y 40 1.02 1.03 $10000 reserves in transit

Discrete Pantages 49 106,797 106,896 0% 69,970 68,041 97% 3,683 1.2% 0.4% 2.3% 3.6% (30,639) 94% 95% Y Y 73 1.47 1.76 $24000 reserves in transit

Discrete HUD Silvian 32 120,350 116,323 3% 112,013 99,688 89% 3,500 0.8% 1.1% 5.3% 2.6% 1,022 100% 99% Y 14 1.45 1.68

Discrete Unity Village 30 161,376 153,204 5% 92,956 97,530 105% 2,324 0.8% 3.4% 6.6% 4.1% 15,644 Y ** N/A

1197 1,355,119 1,346,933 1,033,152 978,937 (77,774)

M:\Admin\Board\Packets\2014 Packets\06 14\Word and other documents\Property Management Dashboard June 2014.xlsx

MEMORANDUM

To: Capitol Hill Housing Board of Directors

From: Michael Seiwerath, Executive Director, Capitol Hill Housing Foundation

CC: Christopher Persons

Re: June 2014 CHH Foundation Update

GRANTS AND DONATIONS

A $10,000 grant from the City of Seattle was recently awarded, funding tenant

engagement in the Capitol Hill EcoDistrict. A $10,000 grant from Union Bank supports

general operations. Recent submissions include requests to KeyBank Foundation,

USBank, the Wyncote Foundation, and King Conversation District.

EVENTS

GiveBIG One more BIG thanks is owed to the board, staff and donors who made this a success for Capitol Hill Housing. While we do not yet know the amount of the stretch pool, it will likely be $3,000 - $4,000 more towards our mission. For the first time ever, CHH is in the top 50 organizations, ranked by the amount raised.

Here is the list:

http://www.seattlefoundation.org/givingcenter/GiveBIG/Pages/GiveBIGTotals.aspx

Community Forum

The community forum on May 20 sparked a good conversation about starting an arts district on Capitol Hill. We asked the question: What do you want the arts district to accomplish? The answers were varied, but the words affordability and preservation came up again and again. The online poll will be available through June 11. You can see all the answers here. And add your own answer here. CHH will be working with the city, arts organizations and artists over the next few months to help make the arts district a reality.

http://www.seattlefoundation.org/givingcenter/GiveBIG/Pages/GiveBIGTotals.aspx

http://www.polleverywhere.com/free_text_polls/mMfJxoDC4aucNZR/web

http://www.polleverywhere.com/free_text_polls/mMfJxoDC4aucNZR/web

Omnivorous Mark your calendar for Omnivorous, returning to the Summit event space on Thursday,

September 18. We are currently seeking sponsors for the event; if you have any ideas,

please contact Michael Seiwerath. Omnivorous will again feature a “raise the paddle”

event benefitting CHH’s mission. Tickets will go on sale this summer.

AWARDS

CHH Asset Manager Brad Lange travelled to the conference of NeighborWorks America

in Louisville, KY. Brad returned with a first prize recognition - The Mission Matrix Award.

This was given to CHH for “creative and analytic excellence in managing Profit,

Sustainability and Mission.” The award came with a $2,500 cash prize, which will further

our asset management work.

COMMUNICATIONS

CHH received several earned media mentions around the recent arts district forum. The

event was promoted by the Seattle Times, Publicola, the Capitol Hill Seattle blog and the

Capitol Hill Times. Articles following the forum appeared in the Seattle Times, Publicola

and the CHS blog. Recent coverage in the CHS blog and Capitol Hill Times of the

shortlisted developers for the Capitol Hill TOD site has also mentioned CHH.

The brand refresh project is moving along. The brand workgroup, executive committee

and leadership team have signed off on a new logo and visuals, which will be presented

at the board meeting on June 9.

CAPITAL CAMPAIGN 12th Avenue Arts Capital Campaign Overall GOAL : $4.6 M

Goal Pledged TOTAL $4,600,000 $4,655,605 While not yet reflected in the numbers above, we have received a new $31,000 campaign pledge from an individual.

http://seattletimes.com/html/thearts/2023668684_artsdistrictmeetingxml.html

http://www.seattlemet.com/news-and-profiles/publicola/articles/morning-fizz-mayartists-2014

http://www.capitolhillseattle.com/2014/05/capitol-hill-arts-district-gets-a-push-with-ideas-for-promotion-preservation-and-helping-artists-make-rent/

As of May 30, 2014 CAPITOL HILL HOUSING FOUNDATION

2014 Budget Overview

Unrestricted Budget

Income Source 2014 Goal Actual % to Goal

Government $ -

$ 10,000

NA

Foundation $ 143,167

$ 114,000

79.6%

Corporate $ 78,500

$ 17,061

21.7%

Individual $ 87,000

$ 49,964

57.4%

Events & Sponsorships $ 135,500

$ 96,400

71.1%

TOTAL $

444,167 $

287,425 64.7%

Restricted Budget


Government $

5,000 $ -

0.0%

Foundation $ -

$ -

0.0%

Corporate $ -

$ -

0.0%

Individual $ -

$ -

0.0%

Events & Sponsorships $ -

$ -

0.0%

TOTAL $

5,000 $ -

0.0%

Combined Budgets

(Restricted & Unrestricted)


Government $

5,000 $

10,000 200.0%

Foundation $

143,167 $

114,000 79.6%

Corporate $

78,500 $

17,061 21.7%

Individual $

87,000 $

49,964 57.4%

Events & Sponsorships $

135,500 $

96,400 71.1%

TOTAL $

449,167 $

287,425 64.0%

REAL ESTATE DEVELOPMENT BOARD REPORT

Development Committee Members: Pamela Banks, Paul Breckenridge, Alice Quaintance, Liz Dunn, Matt Roewe, Dana Behar, Rachel Ben-Schmuel Bob Fikso; Staff: David Dologite, Katie Porter, Alex Brennan, Joel Sisolak The Property Development Committee met on Tuesday, June 3rd at 4:30pm. PDC members in attendance were Paul, Alice, Rachel and Bob; CHH staff members Katie Porter, Alex Brennan, Joel Sisolak and David Dologite were in attendance.

June 2014

CURRENT PROJECTS

1. 12th Avenue Arts (88 units/arts/commercial/office): Last Month: Rough-in inspections are complete. Window and siding installation is complete, and exterior painting at the rear is 99% complete. Drywall work on the residential floors is complete. Cabinet, counter and bathroom fixture installation has started. Theater build-out has started. We have a signed LOI for Retail Bay #3, agreeing to all our terms. We have a signed LOI for one of the two remaining office suites. Current report (Prior Month): Residential Construction completion: 79% (68%) Contingency expended: 82% (74%)

Commercial Construction completion: 81% (77%) Contingency expended: 100% (100%)

Exterior painting for the front of the building is 99% complete. The majority of 1st and 2nd floor storefronts have been installed. Interior unit finishes and appliance installation have been completed on the 6th floor, and remaining floors will be completed in June. Theater rough-ins are complete and drywall installation in the theater has started. Building signage package is out to bid. Theater equipment package will be bid in June. We have come to terms on the final office space. A lease is out to Retail Bay #3. The restaurant space is starting to get interest.

2. Haines Responses to the RFP for investors and lenders have been received. Three responses were received for investors and four responses were received for the lenders. Selections will be made this week and we will have a core of the financing team that will inform the timing of the rehabilitation and permanent loan closing. It was a strong response for a small project, which generally do not generate much investor interest.

3. Community Solar: Capitol Hill Housing Foundation has agreed to be the contractor with Seattle City Light. We have

secured permissions from our LIHTC partners at the two sites. Bonneville Environmental Foundation is

developing the specifications for the procurement process. They hired Seattle Structural to do

structural analysis on the Silvian. Preliminary structural review of the two sites is positive for hosting

ballasted systems. Seattle City Light has set a cap of $5.00 per Watt. The actual cost will be

determined via the bidding process.

4. Resource Venture:

We have entered a contract with Cascadia Consulting for 2014 services to Capitol Hill businesses. We will provide direct outreach and technical assistance in addressing waste, potable water use, stormwater, waste water, and Fats, Oils and Grease (FOG). Alex Brennan and Joel Sisolak will be trained for this program June 4, 5.

5. Community Energy Developer: We have begun work with Preservation Green Lab. Focus will be on working with Seattle City Light

and Puget Sound Energy to prove the model. Specifically, we will demonstrate with a small pilot

whether or not the software that PGL is developing with Department of Energy funds can accurately

perform remote audits using utility data. We have submitted a request to the Seattle Office of

Sustainability and Environment for access to information and data collected via the Community Power

Works for Small Business.

6. EcoDistrict Index: We have a contract with the Office of Sustainability and the Environment (OSE) to create the

EcoDistrict Index. Also, we have continued conversation with UW College of the Built Environment

about hosting a studio in 2014. We have purchased hardware and software to provide GIS mapping

capacity in-house. An EcoDistrict Index Task Force has been formed within the EcoDistrict Steering

Committee.

7. District Shared Parking: Resident surveys continue. We are scheduling our first focus groups. We are looking for a summer

intern to help with research. The Braeburn also signed up as our first Condominium to participate.

8. Only In Seattle: The Pike/Pine Conservation Overlay Update community meeting will be held June 5th at 6pm at the

Gay City Calamus Auditorium 517 E Pike St. We are supporting PPUNC to put together this event.

We continue to work with the 12th Avenue Stewards, other neighbors and the County to look for a way

for the new Children and Family Justice Center to adhere to the 12th Avenue Pedestrian Overlay, a

central issue in the current request for new zoning for the site.

BDS Consulting was selected by the Capitol Hill Chamber to lead their Community Action Plan process.

We will be working closely with them.

POTENTIAL PROJECTS

9. Sound Transit - Transit Oriented Development (TOD):

CHH and the CHH/Jonathan Rose team were both short-listed – RFPs will be issued to short-listed

developers in June. A community meeting was held on June 2nd to introduce short-listed firms to the

Capitol Hill community. CHH presented on our affordable housing qualification and was well received.

10. Central District: The Memorandum of Understanding was signed by all parties: the Garfield Community Council, the Central District Association, and the Central Area Neighborhood District Council. Staff are sending invitations to potential Advisory Board members this month. This will formally begin our work with the community to understand their priorities in commemorating Liberty Bank and for the project as a whole. We are continuing our outreach efforts to maintain visibility in the community and in community events. The purchase and sale agreement was amended to extend the negotiations until the end of the year, which is when we anticipate closing.

11. Mt Baker TOD:

We are reviewing an alternative site near the Mt Baker light rail station.

12. Pollinator Pathway: We will apply to King Conservation District in June for funds to support

Sarah Bergmann’s effort to complete the Pollinator Pathway between Seattle University and Nora’s

Wood, develop a long-term stewardship plan, and scoping for a second Pollinator Pathway running

north-south through the EcoDistrict. Seattle University and the Seattle Department of Transportation

have agreed to support our application for these funds.

Executive Committee Minutes May 27, 2014 5:00-6:30 PM Attendance: Alice Quaintance, Sharron O’Donnell, Catherine Hillenbrand, Robert Schwartz Staff: Chris Persons, Amy Allsopp, Francesca Umali

1. Board Development and Board Matters a. New logo – Amy presented images to EC of new logo and branding. The new design

incorporated a number of suggestions from the EC and Leadership Team. EC agreed on the revised designed – adaptable and better than last design.

b. Board Development Process (defer) - Chris skipped this agenda item and will report on this in the future.

c. Board Transitions – Chris reported on Heyward Watson as candidate to join the board. Alice and Chris met with Heyward and highly recommend him. EC reviewed candidate’s resume and agreed he is highly qualified. Sharron asked about candidate’s at that high level commitment. Alice reported candidate will be an active board member and Chris reported candidate has previously served as Impact Capitol executive. EC agreed on candidate’s capability to serve on the board and will recommend to full board.

d. June Board Agenda: The EC discussed the board agenda-- i. Logo Presentation – Amy and Kristine Matthews to present logo.

ii. National Trends – Chris reported on having a speaker come in to talk about this subject sometime in June/July. Chris will follow-up. EC agreed.

iii. Incentive Zoning 2.0 – Chris reported having a speaker talk about Incentive Zoning from a different perspective. EC agreed on presentation.

iv. Audit Presentation – The Audit committee will present the CHH audit. EC agreed.

v. Real Estate – Robert mentioned having a primer presented at the Board meeting. Alice suggested having the PowerPoint emailed to members. Chris reported on scheduling with David an abbreviated explanation be presented to the Board. EC agreed to have it presented regularly. Chris will follow-up with David. EC agreed.

2. HR and Personnel

a. Chris reported on the new Resident Services Manager. Current Resident Services Coordinator will be off-site, working in HUD buildings. Also hired Senior IT Manager, administrative staff and housing assistant.

b. Racial Equity Convening – Chris reported that HDC has been doing this for all its members; 15 people from CHH signed up for a May 30th workshop.

3. Property Management a. SHA Properties – Chris reported SHA has approached CHH to sell their scattered site

properties. Less than 10-12 units per site. Chris reported considering options of converting to affordable homeownership. Chris reported having SHA convert units into project based properties (Section 8). One building is across from 24th & Union which will be considered. Chris reported it is in the early stages and will follow up.

b. Ponderosa – Chris reported on tenant’s presence at the last Board meeting. Chris reported on reoccurring issues with tenant at property and allowing RSC to work on site to mitigate concerns. Chris passed out a memo about the history of the problem.

c. Gale Place Playground Dedication – Chris reported on the new playground being built. Formal grand opening on June 6th @ 4pm. EC will receive scheduled date to event.

4. Strategic Initiatives and ED Report

a. Strategic partnerships – Chris reported on various partnership conversations. b. 2014 Strategic Planning Agenda – Chris reported on agenda and discussion points. Chris

reported on which initiatives will be moved into SOP. EC agreed on agenda.

5. Finance and Asset Management Administration a. First Place for Mission Matrix Award – Chris reported on winning the award. Brad

collected award for CHH. b. Lines of Credit – Chris reported moving forward with KeyBank. Also possible line of

credit with Banner Bank c. CHH Audit – Chris reported on audit going smoothly. d. Denny Substation, Fire Station 7, The Broadway and additional dispositions – Chris

reported on Denny Substation moving along. Considering fundraising for Broadway, focus on asset management and real estate. Partner with HomeSight.

6. Property Development Update

a. Chris reported on various projects activities. b. 12th Ave Arts – Chris reported it is on schedule. Only one restaurant bay has not been

leased. c. CHTOD (Meet the Developers June 2) – Cathy reported on purpose of meeting and

meeting does not have any influence on the development process. Not an opportunity to represent CHH support as project developer. Chis reported on concerns about negative CHH presence at meeting. Cathy stated that members are aware of comments that might be made – comments will be addressed cautiously. Chris will follow up with staff to clarify.

d. 24th and Union and Central Area – Chris reported no new updates.

7. CHH Foundation & External Relations a. Community Forum Review – Chris reported on the outcome of the community

forum. b. PSRC Award – Chris reported on award won for 12th Ave Arts c. External involvement – Chris reported on his current participation in other

activities.i. HDC

ii. Impact board iii. ID Tour iv. ULI Multifamily

Product Council v. PSRC Award

vi. SCIDPDA Spring Roll vii. Homestead

Breakfast

CAPITOL HILL HOUSING JUNE 2014

FINANCE AND ASSET MANAGEMENT COMMITTEE REPORT AND MINUTES

The Finance Committee met Tuesday, June 3, 2014. Committee members Sharron O’Donnell, Paige Chapel, Drew Porter, Frank Alvarado, and Jaebadiah Gardner met with CFO Jill Fleming and Asset Manager Brad Lange. Dinah Thoreson was absent. The committee reviewed the monthly report, the proposed committee charter, annual ratios and benchmarks and the Schedule of Real Estate Owned. Proposals for operating lines of credit at Banner Bank and Key Bank were reviewed and the committee is recommending to the Board that the Key Bank proposal be accepted. Brad reported on the Mission Matrix prize we won at the NeighborWorks/CHAM Asset Management Convening in Louisville, Kentucky. Comments and Analysis re: April 30, 2014 CHH Blended Balance Sheet The December 31, 2013 balance sheet now reflects all of the closing entries. The decrease in Net Position from December 31, 2013 through April 30, 2014 results is due primarily to the net effect of the Fleming Apartments Limited Partnership transition to a blended component unit following the Year 15 exit of the limited partner. The Fleming and its assets, liabilities and operating results are now included in these reports. Fleming’s liabilities exceed its assets by $700,000. The balance of the decrease in Net Position is due to $600,000 in depreciation expense. Comments and Analysis re: Year to date April 30, 2014 Blended Operating Statement Development Fees are under budget due to $25,000 less fee than budgeted received from Jefferson. The balance of the Jefferson fee may be taken later in the year. Vacancy loss for the portfolio on a 12 month rolling basis is 2.7%. Vacancy loss for 2013 was 2.7% across the portfolio. This is a historically low vacancy rate for CHH. For the first four months of 2014, vacancy loss was 3.2%. Vacancy loss was 3.4% for 2012 and 3.9% for 2011. For budget purposes we assume vacancy rates ranging from 3 – 5 % depending on the building. Debt Service is under budget due to several refinancings not yet completed and several smaller timing differences. Insurance is over budget temporarily due to the annual payment of the Directors and Officers policy. Payroll, Taxes and Benefits are under budget due to open staff positions including the COO and staff accountant positions plus a timing difference in how benefits are accrued which will reverse later in the year. Utilities are over budget due to seasonal fluctuations in natural gas and electricity.

Capitol Hill Housing Improvement ProgramBalance Sheets

Unaudited UnauditedApril 30, 2014 March 31, 2014 December 31, 2013 December 31, 2012

Assets

Unrestricted Cash 1,297,528 1,446,178 1,360,596 1,226,012

Accounts Receivable 54,610 44,705 59,063 50,806

Prepaids & Other Current Assets 233,753 245,227 206,923 110,523

Contributions/Grants Receivable 0 0 32,250 46,125

Due from Affiliates 2,920,319 2,899,250 3,185,542 2,801,124

Board Designated Operating Reserve 1,016,791 1,016,707 816,483 615,391

Restricted Cash 3,839,159 3,861,652 3,761,648 3,715,726

Notes Receivable from Affiliates 16,400,139 16,400,619 16,403,826 16,480,020

Land 14,127,679 14,127,679 13,576,257 13,576,257

Buildings, Improvements & Equipment 59,520,905 59,501,377 56,713,903 53,760,686

Accumulated Depreciation (28,673,043) (28,516,159) (26,859,942) (23,470,745)

Lease Receivable 951,476 951,476 951,476 983,031

Investment in LPs/LLCs 316,764 316,764 316,764 316,934

Other Assets 231,000 232,775 172,221 192,119

Total Assets 72,237,080 72,528,250 70,697,010 70,404,009

Liabilities

Notes Payable 49,240,215 49,241,862 46,822,225 48,357,295

Accrued Interest Payable 3,930,687 3,935,366 3,730,045 3,530,973

Accounts Payable & Accrued Liabilities 2,535,267 2,670,566 2,343,487 2,844,920

Tenant Security Deposit Liability 408,683 406,505 391,750 329,270

Total Liabilities 56,114,852 56,254,299 53,287,507 55,062,458

Net Position 16,122,228 16,273,951 17,409,503 15,341,551

Total Liabilities and Net Position 72,237,080 72,528,250 70,697,010 70,404,009

Date: 6/3/2014, 5:43 PM Page: 1M:\Finance & Accounting\Board reports\2014\04 2014 Balance Sheet.xls

Capitol Hill Housing Improvement ProgramOperating Statement

From 1/1/2014 Through 4/30/2014

130 - 2014 Blended Component Units(In Whole Numbers)

Year to Date Actual

Year to Date Budget

Year to Date Budget

Variance Variance Pct Total BudgetBudget

Remaining

Revenue

Tenant Revenue

Tenant Rent 2,469,990 2,471,048 (1,058) (0.04)% 7,413,144 4,943,154

Commercial Rent & NNN 162,893 164,734 (1,841) (1.11)% 494,202 331,309

Parking, Laundry & Other 64,800 60,959 3,841 6.30% 182,877 118,077

Vacancy & Concessions (118,323) (118,010) (313) 0.26% (296,029) (177,706)

Total Tenant Revenue 2,579,361 2,578,731 629 0.02% 7,794,194 5,214,833

Other Operating Revenue

Property Management Fees 352,453 351,903 550 0.15% 1,055,708 703,255

Partnership Management Fees 90,170 73,979 16,191 21.88% 189,741 99,572

Development Fees/EcoDistrict 381,487 420,333 (38,846) (9.24)% 1,106,662 725,175 Acctg, Leasing & Compliance Fees 194,411 205,662 (11,251) (5.47)% 663,861 469,450

Other Fees 0 0 0 0.00% 25,774 25,774

Other Operating Revenue 3,750 11,250 (7,500) (66.66)% 45,000 41,250

Total Other Operating Revenue 1,022,270 1,063,127 (40,857) (3.84)% 3,086,746 2,064,476

Other Revenue

Grants & Donations 2,959 0 2,959 0.00% 360,000 357,041

Interest Income 81,157 83,723 (2,566) (3.06)% 168,669 87,512

Other Income 17,097 26 17,071 66,477.45% 77 (17,020)

Total Other Revenue 101,212 83,749 17,464 20.85% 528,746 427,534

Total Revenue 3,702,843 3,725,607 (22,764) (0.61)% 11,409,686 7,706,843

Expenses

Operating Expenses

Accounting, Audit & Legal 143,717 155,526 11,809 7.59% 407,379 263,661

Administrative Expenses 79,966 95,356 15,390 16.13% 286,068 206,102

Bad Debt 8,673 13,019 4,346 33.37% 39,057 30,384

Board Expense 392 2,267 1,875 82.72% 6,800 6,408

CHH Occupancy Expense 47,756 57,140 9,384 16.42% 171,419 123,663

Compliance, Taxes & License 48,648 48,368 (281) (0.58)% 106,647 57,999

Consulting 5,264 11,933 6,669 55.88% 35,800 30,536

Debt Service 481,680 513,490 31,809 6.19% 1,567,660 1,085,980

Insurance 112,832 84,928 (27,904) (32.85)% 254,784 141,952

Leasing/Compliance Expense 77,540 77,541 0 0.00% 232,622 155,082

Miscellaneous Financial Expense 665 117 (548) (469.72)% 2,850 2,185

Other Operating Expense 0 567 567 100.00% 1,700 1,700

Payroll, Taxes and Benefits 1,246,940 1,326,355 79,415 5.98% 3,979,065 2,732,125

Partnership Mgmt Fee Expense 33,167 33,699 533 1.58% 118,631 85,464

Property Mgmt Fee Expense 270,060 270,217 157 0.05% 810,650 540,590

Repair and Maintenance 427,173 422,055 (5,118) (1.21)% 1,266,165 838,992

Technology 33,798 35,573 1,775 4.98% 106,719 72,921

Training, Dues, Subscriptions 25,442 28,767 3,325 11.55% 86,300 60,858

Utilities 346,968 332,848 (14,120) (4.24)% 998,544 651,576

Total Expenses 3,390,681 3,509,765 119,083 3.39% 10,478,860 7,088,179

Operating Surplus (Deficit) B4 Reserves 312,162 215,843 96,319 44.62% 930,826 618,664

Reserve Contributions

Replacement Reserve (144,564) (141,644) (2,920) 2.06% (419,532) (274,968)

Operating Reserve (17,407) (8,997) (8,410) 93.47% (25,740) (8,333)

Other Reserve (1,200) (1,200) 0 0.00% (3,600) (2,400)

Total Reserve Contributions (163,171) (151,841) (11,330) 7.46% (448,872) (285,701)

Operating Surplus (Deficit) 148,991 64,002 84,989 132.79% 481,954 332,963

Date: 6/3/2014, 5:42 PM Page: 1

Entity Bank CHH Blended Component Unit Type Balance

Current Month's Interest

260 Chase Larned Reserves 50,089 - 285 Chase 412 Reserves 73,782 - 290 Chase Holden Vista Security Deposit 2,981 -

Total Chase 126,853 - 100 KeyBank Capitol Hill Housing Security Deposit 244,228 - 100 KeyBank Capitol Hill Housing - SoundFamilies Restricted Savings 75,350 - 255 KeyBank Hazel Plaza Reserves 47,366 - 255 KeyBank Hazel Plaza Security Deposit 2,485 - 260 KeyBank Larned Security Deposit 14,129 - 270 KeyBank Byron Wetmore Reserves 37,366 - 270 KeyBank Byron Wetmore Security Deposit 6,986 - 285 Key Bank 412 Security Deposit 4,174 - 290 KeyBank Holden Vista Reserves 58,405 - 295 KeyBank Mary Ruth Manor Reserves 131,498 - 295 KeyBank Mary Ruth Manor Security Deposit 5,342 - 305 KeyBank EJSH Security Deposit 9,763 - 335 KeyBank Fleming Apts LP Security Deposit 19,652 315 KeyBank Gilman Court LP Reserves 69,964 - 315 KeyBank Gilman Court LP Security Deposit 19,163 - 330 KeyBank Seneca Security Deposit 19,496 - 335 KeyBank Haines Reserves 55,882 - 335 KeyBank Haines Security Deposit 5,424 - 345 KeyBank Villa Apts LP Reserves 104,312 - 345 KeyBank Villa Apts LP Security Deposit 41,962 - 355 KeyBank 18th Ave Apartments Security Deposit 1,925 - 400 KeyBank Ponderosa Reserves 339,353 - 400 KeyBank Ponderosa Security Deposit 3,229 -

Total KeyBank 1,317,452 -

100 LGIP Capitol Hill Housing Reserves 2,017,248 - Total LGIP 2,017,248 -

305 Oppenheimer EJSH Escrow 27,752 305 Oppenheimer EJSH Reserves 109,415 295 Oppenheimer Mary Ruth Manor Escrow 10,208

Total Oppenheimer 147,375 - 355 US Bank 18th Ave Apartments Reserves 79,558 -

Total USBank 79,558 - 335 BofA Fleming Apts LP Reserves 90,226 330 BofA Seneca Reserves 60,447 - 330 BofA Seneca Bond Funds - -

Total BofA 150,673 - Total Restricted - CHH Blended Components 3,839,159 -

- 100 LGIP Capitol Hill Housing Board Designated Op Reserve 1,016,791 -

Total Designated 1,016,791 -

100 Union Bank Capitol Hill Housing EQII 250,000 - Total Union Bank 250,000

290 Chase Holden Vista (Quantum) Operating Checking 1,878 - Total Chase 1,878 -

290 SterlingBank Holden Vista (Quantum) Savings 5,334 - Total SterlingBank 5,334 -

100 KeyBank Capitol Hill Housing M/M Savings 3,010 - 100 KeyBank Capitol Hill Housing Operating Checking 344,983 110 KeyBank Capitol Hill Dev. Assoc Operating Checking 5,229 255 KeyBank Hazel Plaza Operating Checking 50,279 - 260 KeyBank Larned Operating Checking 11,625 270 KeyBank Byron Wetmore Operating Checking 15,805 285 KeyBank 412 Operating Checking 11,330 295 KeyBank Mary Ruth Manor Operating Checking 56,078 - 305 KeyBank EJSH Operating Checking 14,928 335 KeyBank Fleming Apts LP Operating Checking 10,062 315 KeyBank Gilman Court LP Operating Checking 24,449 330 KeyBank Seneca Operating Checking 293,039 345 KeyBank Villa Apts LP Operating Checking 75,610 355 KeyBank 18th Ave Apartments Operating Checking 18,608 400 KeyBank Ponderosa Operating Checking 8,791 430 KeyBank Haines Operating Checking (8,925) 448 KeyBank 12th Ave Arts Development Operating Checking 91,318 449 KeyBank 12th Ave Arts Master Tenant LLC Operating Checking 10,000

Total KeyBank 1,036,222 - 100 Cash Various Petty Cash - CHHIP 4,095

Total Petty Cash 4,095 Total Unrestricted - CHH Blended Components 1,297,528 -

Total All Cash - CHH Blended Components 6,153,479 -

CHHCASH IN BANK

FOR THE MONTH ENDING: April 2014

6/3/2014 5:43 PM M:\Finance & Accounting\Staff Accountant\Recurring\ 2014 Cash Report Totals by Bank.xlsx APR 14 Page 1 of 2

CHHCASH IN BANK

FOR THE MONTH ENDING: April 2014

Bank Discrete Component Unit Type Balance

Current Month's Interest

360 Chase Harrison Reserves 130,845 - 365 Chase Oleta Reserves 132,492 - 405 Chase Woodland Park Ave LLC Reserves 125,030 -

Total Chase 388,367 - 390 KeyBank Broadway & Pine Reserves 232,143 - 390 KeyBank Broadway & Pine Security Deposit 20,576 - 350 KeyBank El Nor LP Reserves 685,092 - 350 KeyBank El Nor LP Capital Reserves 119,403 - 350 KeyBank El Nor LP Security Deposit 8,029 - 360 KeyBank Harrison Security Deposit 16,885 370 KeyBank Helen V Apts LLC Reserves 353,608 - 370 KeyBank Helen V Apts LLC Security Deposit 6,996 - 410 KeyBank Holiday Apts Security Deposit 19,644 - 425 KeyBank Jefferson & 12th Reserves 249,468 - 425 KeyBank Jefferson & 12th Security Deposit 40,790 - 365 KeyBank Oleta Security Deposit 21,099 380 KeyBank Pantages Apts LLC Security Deposit 26,040 - 385 KeyBank Silvian Security Deposit 5,782 - 415 KeyBank SOPI / Unity Village Reserves 150,982 - 415 KeyBank SOPI / Unity Village (Quantum) Security Deposit 13,634 - 405 KeyBank Woodland Park Ave LLC Security Deposit 12,099 - 445 KeyBank 12th Avenue Arts Associates LLC 12AA HEDC CDE Controlled Account 809,009 - 445 KeyBank 12th Avenue Arts Associates LLC 12AA Key CDE Controlled Account 963,887 - 445 KeyBank 12th Avenue Arts Associates LLC 12AA HEDC Fee Reserve Account 307,571 - 445 KeyBank 12th Avenue Arts Associates LLC 12AA Key Fee Reserve Account 535,708 -

Total KeyBank 4,598,445 - 445 Bank of NY Mellon Trust Co 12th Avenue Arts Associates LLC 12AA 108 Loan Guaranteed Loan Funds Account 23,503 - 445 Bank of NY Mellon Trust Co 12th Avenue Arts Associates LLC Escrow 16,357

Total Bank of NY Mellon Trust Co 39,860 - 410 UnionBank Holiday Reserves 162,306 -

Total UnionBank 162,306 - 380 US Bank Pantages Apts LLC Reserves 664,968 - 385 US Bank Silvian Reserves 413,209 -

Total USBank 1,078,178 - Total Restricted - Discrete Components 6,267,156 -

350 KeyBank El Nor LP Operating Checking 118,299 360 KeyBank Harrison Operating Checking 21,310 365 KeyBank Oleta Operating Checking 7,352 370 KeyBank Helen V Apts LLC Operating Checking 33,410 380 KeyBank Pantages Apts LLC Operating Checking 34,005 385 KeyBank Silvian Operating Checking 121,638 - 390 KeyBank Broadway & Pine Operating Checking 13,900 405 KeyBank Woodland Park Ave LLC Operating Checking 19,799 - 410 KeyBank Holiday Apts Operating Checking 7,717 415 KeyBank SOPI / Unity Village (Quantum) Operating Checking 31,412 - 425 KeyBank Jefferson & 12th Construction 164,903 - 425 KeyBank Jefferson & 12th Operating Checking 72,063 440 KeyBank Twelfth Avenue Arts Housing LLP 12AA Housing-Construction Checking 31,542 445 KeyBank 12th Avenue Arts Associates LLC 12AA Commercial-Construction Ckg 1,012,625

Total KeyBank 1,689,974 - Total Unrestricted - Discrete Components 1,689,974 -

Total All Cash - Discrete Components 7,957,130 - Total All Cash - CHH Blended Components 6,153,479

Total All Cash 14,110,609

TOTALS BY BANKKey Bank 8,642,092.48$

Chase 517,098.32$ US Bank 1,157,736.03$

Union Bank 412,306.39$ Bank of America 150,673.05$

LGIP 3,034,039.10$ Other and Petty 196,663.59$

TOTAL CASH 14,110,609$

6/3/2014 5:43 PM M:\Finance & Accounting\Staff Accountant\Recurring\ 2014 Cash Report Totals by Bank.xlsx APR 14 Page 2 of 2


Ratio Analysis

12/31/2010 12/31/2011 12/31/2012 12/31/2013

Cash concentration ratio = Cash & cash equivalents/Total Net Assets

Cash & cash equivalents 669,939 898,931 1,841,406 2,177,079

Total Net Position 6,299,274 6,652,594 15,341,551 17,409,501

Cash concentration ratio 11% 14% 12% 13%

Unrestricted Net Position Ratio = Unrestricted Net Position/Total Assets

Benchmark: 10% ‐ 25%

Unrestricted net position 1,479,953 2,012,158 11,174,948 12,930,603

Total assets 50,409,566 52,200,775 69,311,605 69,919,402

Unrestricted Net Position Ratio 3% 4% 16% 18%

Current Ratio = Current assets/current liabilities

Benchmark: 1 ‐ 1.5

Current assets 2,019,014 2,069,951 3,538,576 4,487,700

Current liabilities 1,845,242 1,693,210 3,365,096 2,011,560

Current ratio 1.1 1.2 1.1 2.2

Leverage Ratio=Total liabilities/total net position

Benchmark: 4.0 maximum

Total liabilities 44,110,292 45,548,181 53,970,054 52,509,901


Leverage ratio 7.0 6.8 3.5 3.0

Days operating cash = Cash & equivalents/(operating exps (excluding non cash exps, debt service, reserves)/360)

Benchmark: 90 ‐ 180 days

Cash & Cash equivalents 669,939 898,931 1,841,406 2,177,079

Operating expenses 5,472,964 5,981,160 6,524,091 7,413,092

Days operating cash 44 54 102 106

Profitability Ratio = (Operating Income ‐ operating expense)/operating income

Benchmark: positive

Operating income 58,819 235,529 1,681,818 112,410

Operating revenue 6,900,338 7,770,607 9,836,316 9,594,676

Profitability ratio 0.9% 3.0% 17.1% 1.2%

Self sufficiency ratio = Operating revenue/operating expenses (including interest income & expen

Benchmark:

Operating revenue 6,956,259 7,830,182 9,955,490 9,594,676

Operating expenses 7,827,943 8,507,615 9,124,720 10,409,441

Self sufficiency ratio ‐ earned 89% 92% 109% 92%

Self sufficiency ratio = Total revenue/total expenses

Benchmark:

Total Revenue 8,482,875 8,554,975 17,928,928 11,354,667

Total Expenses 7,827,943 8,507,615 9,124,720 10,471,069

Self sufficiency ratio ‐ total 108% 101% 196% 108%

6/3/2014 5:46 PM

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM

Financial Statements and Single Audit Reports

For the Years Ended December 31, 2013 and 2012

Table of Contents

Page Independent Auditor’s Report 1 - 2 Management Discussion and Analysis 3 - 8 Financial Statements: Balance Sheets 9 - 10 Statements of Revenues, Expenses and Changes in Net Position 11 Statements of Cash Flows 12 - 13 Notes to Financial Statements 14 - 34 Supplementary Information: Schedule of Departmental Operations 35 Schedule of Property Operations 36 - 38 Schedule of Expenditures of Federal Awards and Related Notes 39 - 40 Single Audit Reports: 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 41 - 42 Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance 43 - 44 Schedule of Findings and Questioned Costs 45 - 46 Schedule of Prior Audit Findings 47

10900 NE 4th StreetSuite 1700

Bellevue WA 98004tel 425 454 4919fax 425 454 4620

800 504 8747 clarknuber.com

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Accountants

and Consultants

Independent Auditor’s Report Board of Directors Capitol Hill Housing Improvement Program Seattle, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the business-type activities and the aggregate discretely presented component units of Capitol Hill Housing Improvement Program (CHHIP), as of and for the years ended December 31, 2013 and 2012, and the related notes to the financial statements, which collectively comprise CHHIP’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the aggregate discretely presented component units of CHHIP, as of December 31, 2013 and 2012, and the respective changes in financial position and, where applicable, cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Certified Public

Accountants

and Consultants

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Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3 through 8 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise CHHIP’s basic financial statements. The schedules of departmental operations and property operations are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. The schedules are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedules of department operations and property operations are fairly stated, in all material respects, in relation to the basic financial statements as a whole. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 21, 2014 on our consideration of CHHIP’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 CHHIP’s internal control over financial reporting and compliance.

Certified Public Accountants May 21, 2014

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Management Discussion and Analysis For the Year Ended December 31, 2013

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As management of Capitol Hill Housing Improvement Program (“CHHIP”), we offer readers of the CHHIP financial statements this narrative overview and analysis of the financial activities of CHHIP for the year ended December 31, 2013. Financial Highlights

- Assets exceeded liabilities (net position) at the close of 2013 by over $17 million.

- Unrestricted cash and cash equivalents at December 31 totaled $2,177,078.

- During 2013 CHHIP, as the developer, began construction of the 12th Avenue Arts project, a $47 million development combining affordable housing, performing arts space, community space, retail, and parking.

- CHHIP properties continue to operate with extremely low vacancy rates with the portfolio averaging just over 3 percent in 2013.

- During January 2013, National Equity Fund and JPMorgan Chase executed a donation agreement

gifting their combined 99.99% limited partnership interests in 1214 Boylston Avenue Limited Partnership, a low income tax credit partnership established in 1996, to CH Development Association, a blended component unit of CHHIP.

Overview of The Financial Statements CHHIP’s financial statements consist of three parts - management’s discussion and analysis (this section), financial statements prepared in accordance with Governmental Accounting Standards Board (GASB), and supplemental schedules. CHHIP financial statements provide information about CHHIP’s overall financial position and results of operations. The financial statements report information about CHHIP as a whole using accounting methods similar to those used by private sector companies. These statements, which are presented on the accrual basis, consist of the Balance Sheet, Statement of Revenues, Expenses and Changes in Net Position, and the Statement of Cash Flows. The Balance Sheet includes all of CHHIP’s assets and liabilities. All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses and Changes in Net Position regardless of when cash is received or paid. The financial statements include the activities of CHHIP and 14 related entities that are required to be combined with CHHIP. These entities are three nonprofits, Elizabeth James Senior Housing, Central City Affordable Housing and CH Development Association and eleven limited partnerships and limited liability companies, Larned Apartments Limited Partnership, Byron/Wetmore Limited Partnership, Ponderosa at Madison LLC, SOPI Village Manager LLC, Villa Apartments Limited Partnership, Gilman Court Limited Partnership, 1214 Boylston Avenue Limited Partnership, Holiday Affordable LLC, Haines Acquisition LLC, Twelfth Avenue Arts Master Tenant LLC and Twelfth Avenue Arts Development LLC. Although legally separate, the nonprofits were formed to meet the mission of CHHIP. Since CHHIP board members comprise all or a majority of the nonprofit boards' members, they are considered instrumentalities of CHHIP and are included in CHHIP's financial statements. CHHIP is the general partner and CH Development Association has replaced the investor limited partners in the five limited partnerships. CHHIP is the sole member of Ponderosa at Madison LLC, Haines Acquisition LLC and Holiday Affordable LLC and has a majority interest in SOPI Village Manager LLC. CH Development Association is the sole member of Twelfth Avenue Arts Development LLC which is, in turn, the sole member of Twelfth Avenue Arts Master Tenant LLC.


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Overview of The Financial Statements - Continued The financial statements also include as "Discrete Component Units" 13 legally separate tax credit partnerships and limited liability companies for which CHHIP is financially accountable as the sole general partner or managing member. Additionally, the Capitol Hill Housing Foundation is included as a discrete component unit as is 12th Avenue Arts Associates LLC and Twelfth Avenue Arts Association. Financial information for these affiliates is aggregated and reported in a separate column from the CHHIP financial information. Audited financial statements are available for 12 of the discrete component units and may be requested from CHHIP. The financial statements also include a “Notes to Financial Statements” section that provides additional information that is essential to a full understanding of the data provided in the financial statements. The supplemental schedules provide a breakdown of CHHIP property operations at the building level. The following changes should be considered in reviewing these financial statements. 1214 Boylston Avenue Limited Partnership was not included in the CHHIP financial statements for 2012, but it is included in 2013 due to the exit of the investor limited partners. Unamortized financing costs were written off and net position restated as of January 1, 2012 in accordance with GASB Statement 65. Overview of the CHHIP Blended Entity Financial Position and Operations

December 31, 2013 2012 2011Assets: Current assets 4,487,700$ 3,538,576$ 2,069,951$ Noncurrent assets-

Capital assets, net 43,495,197 43,866,202 41,092,369 Other 21,936,505 21,906,827 9,038,455

Total Assets 69,919,402$ 69,311,605$ 52,200,775$

Liabilities:Current liabilities 2,011,560$ 2,596,346$ 1,693,210$ Noncurrent liabilities 50,498,341 51,373,708 43,854,971

Total Liabilities 52,509,901$ 53,970,054$ 45,548,181$

Net Position: Invested in capital assets, net of related debt 717,247$ 450,879$ 1,014,082$ Restricted 3,761,651 3,715,724 3,626,354 Unrestricted 12,930,603 11,174,948 2,012,158

Total Net Position 17,409,501$ 15,341,551$ 6,652,594$

The financial assets of CHHIP consist primarily of capital assets, its land, buildings and building improvements. This is consistent with CHHIP’s mission to build vibrant, engaged communities through affordable housing and community development efforts in Seattle. Capital assets are shown net of depreciation. Other assets include cash reserves for repairs and replacements and debt service as required by our lenders.


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Overview of the CHHIP Blended Entity Financial Position and Operations - Continued The liabilities are predominantly long-term debt that has been used to purchase, develop and rehabilitate our apartment buildings. Many of these loans, provided by governmental entities, have below market interest rates and do not require annual debt service. See Note 5 for a more complete discussion. The difference between total assets and total liabilities, net position is one indicator of financial health. Net position increased by $2,067,950 in 2013 and $8,688,957 in 2012. For 2013, $1,184,352 was due to the change in component units which occurred when CH Development Association acquired the limited partners’ interests in 1214 Boylston Avenue LP. The balance resulted from positive operating results and capital grants passed through for the 12th Avenue Arts project. For 2012, if the Net gain on 12th Avenue Arts transactions and the Gain on the sale of Elizabeth Dean Wells are excluded, the change in net position would have been $1,609,644. In 2012 CHHIP recognized unusually large development and other fees related to 12th Avenue Arts contributing to the increase. The results of operations for CHHIP are presented below:

For the Year Ended December 31, 2013 2012 2011

Operating revenues-Tenant revenues 7,374,941$ 6,678,970$ 6,290,666$ Fees for services 788,004 603,526 507,470 Project development fees 1,099,245 2,337,260 904,569 Other 78,721 216,560 67,902

Nonoperating revenues-

Contributions and grants 1,759,991 894,125 724,793 Interest income 253,765 119,174 59,575 Net gain on 12th Avenue Arts transactions 6,504,036 (Loss) gain on sale of assets (61,628) 575,277

Total Revenues 11,293,039 17,928,928 8,554,975

Operating expenses-

Salaries, benefits, and payroll taxes 3,688,293 3,281,278 3,047,060 Operating and maintenance 1,357,785 1,054,445 988,578 Other operating expenses 2,367,014 2,188,368 1,945,522 Depreciation and amortization 1,815,409 1,630,407 1,553,918

Nonoperating expenses-

Interest expense 1,180,940 970,222 972,537

Total Expenses 10,409,441 9,124,720 8,507,615

Change in Net Position 883,598$ 8,804,208$ 47,360$


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Overview of the CHHIP Blended Entity Financial Position and Operations - Continued Results of Operations - Operating revenues are generated principally from rental income as well as property management and other fees paid by the discrete component units. Tenant revenues increased 9 percent in 2013, 6 percent in 2012 and 9 percent in 2011. We are limited in how much we can increase tenant revenues as our rents are regulated, and we have nearly reached the maximum occupancy at our buildings. Vacancy loss for 2013 was 3.2 percent, which is the third year our annual vacancy loss has been below 4 percent. Vacancy loss for 2012 was 3.3 percent and for 2011 was 3.8 percent. We continue to work to turn and lease units faster. CHHIP earns development fees for its management role in the development of new properties. During 2013 CHHIP earned development fees for both the commercial and housing components of the 12th Avenue Arts project representing 12 percent of total operating revenues. During 2012 CHHIP earned development fees for two projects, The Jefferson and 12th Avenue Arts representing 24 percent of total operating revenues. The development fees associated with 12th Avenue Arts were unusually large due to the significant commercial component recognized in 2012. The fees earned on the 12th Avenue Arts commercial component were reinvested in the project. During 2011 CHHIP earned development fees for two projects, The Jefferson and Unity Village, representing 11 percent of total operating revenues. Project development fees can vary significantly from year to year depending on the number of projects in development and their stage of completion. Development fee revenue is recognized during the development period while the cash payments of developer fee are often deferred and paid over the early years of operation and sometimes over the 15-year tax credit period. This can lead to dramatic swings in income while our cash position remains stable. Salaries, benefits and payroll tax expense increased in 2013 by 9 percent which included increased staffing in property development, information technology, leasing and the addition of a full time manager for our EcoDistrict work. We continue to see large increases in our health insurance premiums annually. The 2012 increase of 8 percent was driven by an 18 percent increase in health insurance premiums and adding staff positions in resident services and property management. Salaries, benefits and payroll tax expense increased in 2011 by 13 percent due in part to CHHIP beginning participation in the Social Security system combined with the measures taken to mitigate the impact for employees through a combination of one time salary increases and retirement contribution. Previously CHHIP had funded a SEP-IRA in lieu of participation in the Social Security system. Included in the 2011 increase was a 9 percent increase in health insurance premiums. Operating and maintenance expenses increased by 8 percent in 2013 compared to an increase of 7 percent in 2012 and a minimal increase in 2011. Some variability is to be expected as building components wear out, long time tenants move out and our portfolio ages. We increased our maintenance staffing in 2012 in response to our growing portfolio. We continue to be proactive in maintaining our buildings. Interest expense, primarily from the long-term financing of the properties, continues to be a significant expense. Typically each property acquired has both amortizing and non-amortizing debt from commercial and governmental sources, respectively. A portion of the interest expense, under the terms of the financing, is deferred and will eventually be forgiven as long as the properties are managed in compliance with the loan agreements. Contributions and grants in 2013 include grants totaling $1,187,233 from the Capitol Hill Housing Foundation for the 12th Avenue Arts project. These grants increase revenues without an offsetting expense. Excluding these capital grants, contributions and grants in 2013 totaled $572,757 compared to $406,096 in 2012 and $446,853 in 2011.


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Overview of the CHHIP Blended Entity Financial Position and Operations - Continued Contributions and grants in 2012 include a grant of $442,582 from the Capitol Hill Housing Foundation for the 12th Avenue Arts project and energy efficiency funds for Hazel Plaza in the amount of $45,447. Contributions and grants in 2011 include weatherization funds for 2 buildings, Melrose and Centennial, totaling $88,135 which was used for capital assets and the balance of a federal grant, $189,805, for the predevelopment costs at The Jefferson. Over all 3 years we continued to receive grants from the City of Seattle Office of Economic Development and Impact Capital in support of our economic development work on 12th Avenue and Broadway. We began a new initiative around creating an EcoDistrict on Capitol Hill in 2011 which has received increased grant funding each year. Supplemental Schedule - The supplemental Schedule of Departmental Operations provides additional insight into the financial operations of CHHIP. CHHIP budgets and manages financial performance based on its lines of business including its buildings (Property Operations) and organizational and off site activities (Administration and Management). Property Operations, which includes all building-based revenues and expenses, shows revenues exceeded expenditures plus debt service and scheduled reserve deposits by $635,891. In addition to the operating expenditures, we spent an additional $286,802 on repair and maintenance funded from our building reserves. Economic Factors Affecting CHHIP’s Future Significant economic factors affecting CHHIP are as follows:

- CHHIP faces risk from political and governmental decisions beyond its control such as changes to the federal and local rental subsidy programs or changes in priorities for capital subsidies to develop new properties.

- CHHIP operates and develops affordable housing in and adjacent to Seattle and is subject to the ups and downs of the local real estate market conditions.

- Availability of credit and tax credit equity partners affects our ability to develop new projects and recapitalize existing projects.

- CHHIP faces increased competition for scarce resources such as state and local funds and corporate and foundation donations.

- Local employment trends affect resident incomes and therefore the demand for housing and the rental rates CHHIP can realize.

- Inflation may cause overall operating expenses to increase faster than it is desirable or allowable to raise rents for existing unit occupants which may generate higher turnover or vacancy. Certain operating expenses such as insurance or utilities may increase due to external events outside of the control of CHHIP.


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Contacting CHHIP’s Financial Management The financial report is designed to provide a general overview of CHHIP’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Chief Executive Officer, Capitol Hill Housing Improvement Program, 1402 3rd Avenue, Suite 200, Seattle, WA 98101.

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Balance Sheets - Assets December 31, 2013 and 2012

See accompanying notes. - 9 -

Discrete DiscreteComponent Component

CHHIP Units CHHIP Units

Current Assets:Cash and cash equivalents 2,177,078$ 981,222$ 1,841,406$ 902,310$ Accounts receivable, net 2,091,974 20,704 1,552,985 25,921 Current portion of pledges

receivable, net 1,121,055 447,291 Prepaid expenses and other

current assets 141,946 227,161 110,521 276,960 Current portion of notes and

interest receivable 40,990 Current portion of leases receivable 35,712 - 33,664 -

Total Current Assets 4,487,700 2,350,142 3,538,576 1,652,482

Restricted cash and cash equivalents 3,761,651 10,259,417 3,715,724 17,103,359 Pledges receivable, net of current portion 644,167 Prepaid ground lease 11,104,718 11,104,718 Leases receivable, net of current portion 915,763 - 949,368 - Notes and interest receivable 16,770,106 - 16,733,494 - Land, buildings and equipment, net 43,495,197 82,749,445 43,866,202 72,265,742 Investment in limited

partnerships and LLCs 316,764 - 316,934 - Long-term prepaid expense 141,605 155,765 Unamortized financing costs, net 172,221 2,518,317 191,307 2,637,014

Total Assets 69,919,402$ 109,123,644$ 69,311,605$ 105,563,247$

2013 2012

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Balance Sheets - Liabilities and Net Position December 31, 2013 and 2012




Current Liabilities:Accounts payable and

accrued liabilities 739,966$ 5,291,326$ 850,182$ 3,371,275$ Deferred income 69,717 47,643 180,047 44,042 Current portion of accrued

interest payable 118,391 120,797 94,018 80,902 Current portion of notes payable 1,083,486 294,136 1,472,099 6,477,346

Total Current Liabilities 2,011,560 5,753,902 2,596,346 9,973,565

Security deposits 391,751 213,517 329,271 218,545 Ground lease obligation 11,104,718 11,104,718 Long-term deferred income 756,198 768,750 Notes payable, net of current portion 45,738,738 75,310,400 46,836,231 67,569,822 Accrued interest payable 3,611,654 1,588,090 3,439,456 1,328,025

Total Liabilities 52,509,901 93,970,627 53,970,054 90,194,675

Net Position:Restricted for building improvements 2,854,277 3,131,425 2,895,241 2,998,163 Restricted for other purposes 907,374 1,750,002 820,483 1,851,291

Total restricted 3,761,651 4,881,427 3,715,724 4,849,454

Invested in capital assets, net of related debt 717,247 14,102,030 450,879 12,825,347

Unrestricted 12,930,603 (3,830,440) 11,174,948 (2,306,229)


Total Liabilities and Net Position 69,919,402$ 109,123,644$ 69,311,605$ 105,563,247$

2013 2012

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Statements of Revenues, Expenses and Changes in Net Position For the Years Ended December 31, 2013 and 2012



CHHIP Units CHHIP UnitsOperating Revenues:Gross rent potential 7,434,713$ 4,227,842$ 6,718,220$ 4,096,582$ Vacancy loss (233,230) (118,894) (221,561) (128,693) Laundry, parking, and other tenant income 173,458 127,695 182,311 143,318 Fees for services 788,004 603,526 Project development and other fees 1,099,245 2,337,260 Other operating revenue 78,721 74,314 216,560 3,117

Total Operating Revenues 9,340,911 4,310,957 9,836,316 4,114,324

Operating Expenses:Salaries, benefits, and payroll taxes 3,688,293 711,911 3,281,278 681,068 Utilities 942,818 601,674 830,648 450,952 Professional fees 442,022 331,365 241,974 423,221 Administrative 520,646 510,941 418,750 546,331 Taxes and insurance 322,439 174,036 290,503 150,149 Operating and maintenance 1,357,785 669,893 1,054,445 652,964 Bad debt expense 22,639 19,552 155,460 12,091 Grants to CHHIP and affiliates 1,542,409 817,807 Other 116,450 228,347 251,033 180,647 Depreciation and amortization 1,815,409 2,215,868 1,630,407 2,125,634

Total Operating Expenses 9,228,501 7,005,996 8,154,498 6,040,864

Operating Income (Loss) 112,410 (2,695,039) 1,681,818 (1,926,540)

Nonoperating Revenues (Expenses):Contributions and grants 1,759,991 1,170,934 894,125 1,990,221 In-kind revenue 201,526 199,774 Interest income 253,765 2,725 119,174 2,135 Grants for equipment purchases - 242,494 Warranty settlement for equipment defect 65,459 Loan fees - Net gain on 12th Avenue Arts transactions 0 6,504,036(Loss) gain on disposition of

property and equipment (61,628) - 575,277 (19,735) In-kind expense (201,526) (199,774) Interest expense (1,180,940) (1,294,485) (970,222) (1,021,947)

Total Nonoperating Revenues (Expenses) 771,188 (55,367) 7,122,390 1,193,168

Change in Net Position 883,598 (2,750,406) 8,804,208 (733,372)

Net Position:Beginning of year 15,341,551 15,368,572 6,652,594 12,350,108 Change in accounting principle (115,251) Change in component units 1,184,352 (1,184,352) Syndication costs - (105,670) Capital contributions 3,719,203 3,857,506

End of Year 17,409,501$ 15,153,017$ 15,341,551$ 15,368,572$

2013 2012

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Statements of Cash Flows For the Years Ended December 31, 2013 and 2012




Cash Flows from Operating Activities:Receipts from tenants and customers 8,313,291$ 4,312,121$ 7,315,004$ 4,166,508$ Receipts for developer and guarantee fees 483,684 2,024,541 Payments to employees and for

payroll taxes and benefits (3,669,813) (711,911) (3,267,442) (681,068) Payments to suppliers (3,844,517) (2,092,420) (2,683,763) (4,353,613)

Net Cash Provided (Used) by Operating Activities 1,282,645 1,507,790 3,388,340 (868,173)

Cash Flows from Noncapital Financing Activities:Receipts from contributions and grants 1,665,141 1,141,337 1,052,609 1,411,946

Net Cash Provided by Noncapital Financing Activities 1,665,141 1,141,337 1,052,609 1,411,946

Cash Flows from Capital and Related Financing Activities:

Acquisition of land, building, and equipment (587,517) (14,326,790) (4,527,070) (14,652,574) Proceeds from sale of land, building, and equipment 534,224 Reimbursement of predevelopment costs 877,790 Proceeds from warranty settlement 65,459 Proceeds from notes payable 159,019 6,312,439 7,943,499 29,401,085 Net line of credit activity 148,371 27,981 Net proceeds from 12th Avenue Arts transactions - 6,504,036 Principal payments on notes payable (2,497,777) (4,050,790) (438,859) (2,853,659) Interest paid on notes payable (984,369) (994,525) (813,699) (753,050) Net proceeds from lease receivable 31,557 15,122 Payment of financing costs - (31,302) (53,174) (1,520,500) Payment of syndication costs - (105,670) Capital contributions 3,719,203 3,857,506

Net Cash (Used) Provided by Capital and Related Financing Activities (2,852,926) (9,306,306) 9,192,060 13,373,138

Cash Flows from Investing Activities:Net change in restricted cash and cash equivalents 43,178 6,754,837 (89,370) (13,784,673) Cash transfer due to change in component units 21,471 (21,471) Advances of notes receivable (121,320) (12,895,633) Receipts on repayment of notes receivable 43,718 39,369 Interest receipts 253,765 2,725 119,174 2,135

Net Cash Provided (Used) by Investing Activities 240,812 6,736,091 (12,826,460) (13,782,538)

Net Change in Cash and Cash Equivalents 335,672 78,912 806,549 134,373

Cash and cash equivalents, beginning of year 1,841,406 902,310 1,034,857 767,937

Cash and Cash Equivalents, End of Year 2,177,078$ 981,222$ 1,841,406$ 902,310$

2013 2012

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Statements of Cash Flows (Continued) For the Years Ended December 31, 2013 and 2012




Reconciliation of Operating Loss to NetCash Provided by Operating Activities:

Operating income (loss) 112,410$ (2,695,039)$ 1,681,818$ (1,926,540)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities-

Depreciation and amortization 1,815,409 2,215,868 1,630,407 2,125,634 Partnership income 170 (27,908) Changes in assets and liabilities:

Accounts receivables (552,579) 4,932 (636,723) 13,548 Prepaid expenses and other current assets (10,050) 28,424 (33,825) (249,625) Long-term prepaid expense 14,160 (155,765) Accounts payable and accrued liabilities (113,826) 1,923,661 451,251 (726,152) Security deposits and deferred income 31,111 15,784 323,320 50,727

Net Cash Provided (Used) by Operating Activities 1,282,645$ 1,507,790$ 3,388,340$ (868,173)$

Schedule of Noncash Financing and Investing Activities:

Noncash balance sheet net adjustmentsrelating to change in component units,

increase (decrease) to balance-Accounts receivables, net 285$ (285)$ -$ -$ Prepaid expenses and other current assets 21,375$ (21,375)$ -$ -$ Restricted cash and cash equivalents 89,105$ (89,105)$ -$ -$ Land, buildings, and equipment, net 1,710,205$ (1,710,205)$ -$ -$ Unamortized financing costs, net 67,013$ (67,013)$ -$ -$ Accounts payable and accrued liabilities 3,610$ (3,610)$ -$ -$ Security deposits 16,040$ (16,040)$ -$ -$ Deferred income 1,171$ (1,171)$ -$ -$ Notes payable 704,281$ (704,281)$ -$ -$

2013 2012

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Notes to Financial Statements For the Years Ended December 31, 2013 and 2012

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Note 1 - Nature of Operations and Summary of Significant Accounting Policies Organization - Capitol Hill Housing Improvement Program (CHHIP) is a public corporation chartered in 1975 under Washington State and municipal law as a public development authority. CHHIP has broad powers to assist residents and property owners in preserving and improving housing and the neighborhood and to undertake activities in support of those goals. These financial statements include the accounts of CHHIP and CHHIP's blended component units. The blended component units include CH Development Association, Elizabeth James Senior Housing, Central City Affordable Housing and 11 wholly-owned or majority-owned limited partnerships and LLCs. CHHIP and its blended component units include 32 apartment projects and 772 units. Blended component units, although legally separate entities, are, in substance, part of CHHIP’s operations. During 2012, Twelfth Avenue Arts Development LLC (Twelfth Avenue Arts Development) was created to act as the leveraged lender in a New Markets Tax Credit project as further described in Note 2. CH Development Association is the sole member of Twelfth Avenue Arts Development and, therefore, Twelfth Avenue Arts Development is considered a blended component unit. Discrete Component Units - CHHIP serves as the general partner or managing member in 14 limited partnerships and LLCs (see Note 6). These limited partnerships and LLCs have investor limited partners or members who own majority interests in the entities. As general partner or managing member, CHHIP is financially accountable for and oversees the day-to-day operation of these properties. Each limited partnership and LLC is audited separately except for Twelfth Avenue Arts Housing LLLP and 12th Avenue Arts Associates LLC. Copies of the separately audited financial statements may be obtained by contacting CHHIP. The limited partnerships and LLCs include 12 apartment projects and 425 units with an additional two projects under construction as of December 31, 2013. The Capitol Hill Housing Foundation (the Foundation) is incorporated in the State of Washington as a nonprofit corporation. The Foundation has received a tax exempt determination letter from the Internal Revenue Service. The Foundation operates with the intent to act primarily as a fundraising organization to supplement the resources that are available to CHHIP in support of its mission. The Foundation Board is independent of the CHHIP Board. Although CHHIP will not control the timing or amount of receipts from the Foundation, it is anticipated that the majority of the funds raised will be directed to activities of CHHIP by either the Foundation or its donors. Because of these restrictions, the Foundation will be considered a discrete component unit of CHHIP. During 2012, 12th Avenue Arts Associates LLC (12th Ave Arts Associates) was formed to construct and operate the commercial and parking components of the 12th Avenue Arts project (Note 2). The 12th Ave Arts Associates sole member is the Twelfth Avenue Arts Association (the Association). The Association was formed in 2012 as a nonprofit corporation in the State of Washington. The Association was formed with the exclusive purpose of supporting the mission of CHHIP and has a separate self-electing Board of Directors. During 2013, all remaining ownership interests in 1214 Boylston Avenue LP (Seneca) were transferred to CH Development Association. As such, Seneca changed from being reported as a discrete component unit in fiscal year 2012 to a blended component unit as of and for the year ended December 31, 2013.


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Note 1 - Continued Basis of Accounting - The financial statements of CHHIP have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) applied to governmental units. These financial statements have been prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Contributions and grants are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Cash and Cash Equivalents - CHHIP considers all highly liquid temporary investments purchased with a maturity of three months or less at the acquisition date to be cash equivalents. CHHIP’s deposits and certificates of deposit are entirely covered by the federal depository insurance (FDIC) or by collateral held in a multiple financial institution collateral pool (the collateral pool) administered by the Washington Public Deposit Protection Commission. The FDIC insures the first $250,000 of CHHIP’s deposits at each financial institution with remaining balances insured by the collateral pool. As of December 31, 2013 and 2012, the carrying amount of CHHIP’s demand deposits was $3,092,392 and $2,979,998 respectively and was not materially different from the bank balances. At December 31, 2013 and 2012, CHHIP had $2,846,337 and $2,553,491, respectively, in the Washington State’s Local Government Investment Pool (LGIP). The LGIP is operated in a manner consistent with Rule 2a-7 money market funds, as recognized by the Securities and Exchange Commission. Rule 2a-7 funds are limited to high quality obligations with limited maximum and average maturities in order to minimize both market and credit risk. The LGIP is audited annually by the Office of the State Auditor and by an outside independent auditor. Financial reports are available at the State Treasurer’s Office. The amounts invested in the pool represent the fair value equal to the value of the pool shares held by CHHIP. Certain cash balances are restricted for building improvements and other specific uses in accordance with debt and regulatory agreements and donor imposed restrictions. At December 31, 2013 and 2012, the restricted cash balances were held in deposits with the LGIP and other separate accounts as required by the agreements and donor imposed restrictions. During 2012, the Board established the Board Designated Operating Reserve for the purpose of strengthening CHHIP’s liquidity and financial position. The intent is to make annual deposits from operating surplus. The net proceeds of the sale of Elizabeth Dean Wells (see Note 10) was deposited to the reserve. The Board Designated Operating Reserve is held in the LGIP. The balance at December 31, 2013 and 2012, of $816,483 and $615,391, respectively, is included in cash and cash equivalents. Accounts Receivable - Accounts receivable consist primarily of rents due from tenants, grants due from grantors and amounts due from the limited partnerships and LLCs as described in Note 6. Annually, tenant receivables are analyzed and the allowance for doubtful accounts is adjusted. Other receivable allowances are established for uncertain collectibles.


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Note 1 - Continued Notes Receivable and Notes Payable - Many of the notes carry below market interest rates and/or contain provisions for deferral or forgiveness of interest or principal. Such notes and related interest amounts are recorded in the financial statements according to the terms of the notes. No adjustment to market rates has been made due to the compliance requirements that must be met for forgiveness or deferral to occur. Forgiveness of debt and related accrued interest for notes payable will be recorded as income in accordance with terms of the various loan agreements. Land, Buildings and Equipment - CHHIP capitalizes assets with a cost greater than $1,000 and an estimated useful life of one or more years. Land, buildings and equipment are recorded at cost or estimated fair value at the date of donation. Depreciation of buildings and equipment is recorded on a straight-line basis over their estimated useful lives of five to 40 years. CHHIP reviews land, building and equipment for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability is measured by a comparison of the future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. No impairment losses were recognized in 2013 or 2012. Investment in Limited Partnerships and LLCs - CHHIP is the sole general partner and owns a 0.01 percent interest in six limited partnerships and is the managing member and owns a 0.01 percent interest in seven LLCs. CHHIP owns a 51 percent interest in, and is the managing member of SOPI Village Manager LLC who is the managing member and 0.01 percent owner of an eighth LLC, SOPI Village LLC. The remaining ownership interests in these entities are owned by unrelated third parties. CHHIP records its investment in these partnerships and limited liability companies using the equity method of accounting as it is the general partner or managing member and possesses significant influence in the operating and financial policies of the investees. Revenue Recognition - Gross rent potential reflects gross rental revenue at full occupancy. CHHIP deducts vacancy loss from gross rent potential to reflect actual occupancy. Rental revenue is recognized monthly as earned. Development fee revenue is recognized over the development period using the percentage-of-completion method. Operating Revenues and Expenses - Operating revenues include fees and charges from the ongoing operations of providing and developing affordable housing. Operating revenues also include operating subsidies and grants provided by the US Department of Housing and Urban Development (HUD). The use of this classification is based on guidance from HUD, one of the users of the financial statements. Operating expenses are those expenses that are directly incurred while in the operation of providing housing. This presentation results in an operating income that is higher than a nonoperating revenue presentation by the amount of the subsidies and/or grants. Overall it does not affect the presentation of the change in net assets in the statements of revenues, expenses, and changes in net assets, or the presentation of cash and cash equivalents in the statements of cash flows. All other revenues and expenses are considered nonoperating. Restricted Net Position - Net position has been reported as restricted for building improvements and other purposes due to constraints that are either externally imposed by creditors, grantors, contributors or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. CHHIP's policy is to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available.


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Note 1 - Continued Federal Income Tax - CHHIP has been notified by the Internal Revenue Service that it is exempt from federal income taxes as an entity described in Section 115 of the Internal Revenue Code. CH Development Association, Elizabeth James Senior Housing and Central City Affordable Housing have been notified by the Internal Revenue Service that they are exempt from federal income taxes as entities described in Section 501(c)(3) of the Internal Revenue Code. CHHIP’s wholly-owned limited partnerships and LLCs that are reported as blended component units have no provision or benefit for income taxes included in these financial statements since taxable income or loss passes through to, and is reportable by, each partner or member individually. Concentrations of Credit Risk - All of CHHIP’s properties are located in Seattle, Washington except for one property included immediately outside of the Seattle city limits. As such, CHHIP’s operations are directly linked to the economic conditions in the Seattle area. 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. These affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Reclassifications - Certain accounts in the December 31, 2012 financial statements have been reclassified for comparative purposes to conform with the presentation in the 2013 financial statements. These reclassifications had no effect on the total assets, total liabilities, net position, or change in net position for the year ended December 31, 2012. Note 2 - Notes and Interest Receivable Notes and interest receivable consisted of the following amounts due primarily from affiliated limited partnerships and LLCs (Note 6) as of December 31:

2013 2012

Broadway & Pine LLCNote receivable, interest at 5%, annual payments from availablecash flow starting June 2007 through maturity on June 1, 2057. $ 180,000 $ 180,000

Firestation Seven AssociatesNote receivable, interest at 9%, monthly payments of $306 untilmaturity in September 2017, secured by deed of trust. 9,610 13,328

Fleming Apartments Limited PartnershipNote receivable, interest at 1%, payments from available cashflow, principal and accrued interest due at maturity on December31, 2049. 436,169 436,169


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Note 2 - Continued 2013 2012

Developer fee note receivable, interest at 4.67%, payments fromavailable cash flow, principal and accrued interest due at maturityon June 1, 2014. 160,324 160,324

Note receivable, interest at 0%, annual payments from availablecash flow, principal due at maturity on April 8, 2043. 339,580 339,580

Helen V LLCDeveloper fee note receivable, interest at 1%, monthly paymentsfrom available cash flow of $1,163 until maturity on December31, 2015. 78,904 93,904

Holiday Apartments LPNote receivable, interest at 3%, annual payments from availablecash flow through maturity on December 1, 2061. 354,654 354,654

Jefferson & 12th LLCNote receivable, interest at 5%, annual payments from availablecash flow starting 2013 through maturity on May 1, 2063. 706,150 706,150

Oleta Apartments Limited PartnershipNote receivable, interest at 0%, annual payments from availablecash flow starting June 2003 through maturity on June 30, 2053. 909,000 909,000

Pantages Apartments LLCNote receivable, interest at 6%, annual payments from availablecash flow starting February 2006 through maturity on February 1,2056. 151,994 167,289

SOPI Village LLCNote receivable, interest at 4%, annual payments from availablecash flow starting in 2011 through maturity on December 31,2061. 140,000 140,000

Woodland Park Avenue LLCNote receivable, interest at 0%, annual payments from availablecash flow starting in 2009 through maturity on August 31, 2058. 140,000 140,000

New Markets Tax Credits LoansNote receivable from 12th Avenue Arts NMTC Investment Fund IILLC, interest at 1.0%, quarterly interest payments beginningApril 15, 2013, quarterly principal and interest paymentsbeginning April 15, 2028 through maturity on October 1, 2052. 4,870,600 4,870,600


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Note 2 - Continued

2013 2012

Note receivable from 12th Avenue Arts NMTC Investment FundLLC, interest at 1.409%, quarterly interest payments beginningApril 15, 2013, quarterly principal and interest paymentsbeginning April 15, 2028 through maturity on October 1, 2052. 7,926,840 7,926,840

Total principal 16,403,825 16,437,838 Accrued interest on the above notes 407,271 295,656

Total principal and interest 16,811,096 16,733,494 Less current portion of notes and interest receivable (40,990)

Noncurrent Portion 16,770,106$ 16,733,494$

In December 2012, CHHIP entered into a New Markets Tax Credit transaction to partially finance the construction of the 12th Avenue Arts cultural and civic center. The New Markets Tax Credit Program was designed to stimulate investment and economic growth in low-income communities by offering federal tax credit for Qualified Equity Investments (QEI) made through investment vehicles known as Community Development Entities (CDE). CDEs use capital derived from tax credits to make loans to projects in low-income areas. As a part of the transaction, Twelfth Avenue Arts Development, LLC, a blended component unit of CHHIP, made two loans to two QEI’s totaling $12,797,440, which in turn, lent a total of $17,951,000 to two CDEs, which in turn was lent to 12th Avenue Arts Associates, LLC, a discrete component unit. To earn the tax credit the QEI must remain invested in the CDE for a seven-year period ending in December 2019. CHHIP and Key Community Development Corporation have entered into put/call option agreements to take place at the end of the seven-year period. Under the agreements, Key Community Development Corporation can exercise put options to sell all interest in the QEIs for $1,000 each to CHHIP. If Key Community Development Corporation does not exercise the put option within 90 days of the end of the seven-year period, CHHIP can exercise call options to purchase the interest of the QEIs at an appraised fair market value.


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Note 3 - Land, Buildings and Equipment Land, buildings and equipment activity consisted of the following:

January 1, Net December 31,2012 Increases Decreases Transfers 2012

Nondepreciable assets-Land 12,173,706$ 1,435,353$ (32,801)$ -$ 13,576,258$ Pre-development costs 391,145 596,987 988,132

Depreciable assets-

Buildings and facilities 48,988,057 2,347,131 (406,045) 77,686 51,006,829 Equipment and vehicles 1,727,878 119,941 (4,406) (77,686) 1,765,727

Less accumulated depreciation (22,188,417) (1,619,850) 337,523 (23,470,744)

41,092,369$ 2,879,562$ (105,729)$ -$ 43,866,202$

January 1, Net December 31,

2013 Increases Decreases Transfers 2013

Nondepreciable assets-Land 13,576,258$ -$ -$ -$ 13,576,258$ Pre-development costs 988,132 132,091 (877,790) 242,433

Depreciable assets-

Buildings and facilities 51,006,829 403,116 3,244,005 54,653,950 Equipment and vehicles 1,765,727 52,316 64,455 1,882,498

Less accumulated depreciation (23,470,744) (1,790,943) (1,598,255) (26,859,942)

43,866,202$ (1,203,420)$ (877,790)$ 1,710,205$ 43,495,197$

During 2013, the limited partner interests in the 1214 Boylston Avenue LP were transferred to CH Development Association changing the limited partnership to a blended component unit. This transfer during 2012 resulted in a net increase of $1,710,205 to land, buildings, and equipment. During 2013, pre-development costs of $877,790 relating to the 12th Avenue Arts development were transferred to 12th Avenue Arts Associates LLC and Twelfth Avenue Arts Housing LLLP, discretely presented component units in exchange for reimbursement in the same amount.


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Note 4 - Leases Operating Lease - CHHIP, as lessee, leases administrative office space and housing space. Rental expense under these leases totaled $108,947 and $111,989 for fiscal years 2013 and 2012, respectively. Minimum lease payments under these leases are as follows:

For the Year Ending December 31,

2014 108,280$ 2015 5,346 2016 5,867 2017 3,935 2018

123,428$

CHHIP, as lessor, leases apartments under noncancelable terms of less than one year. Additionally CHHIP leases commercial space to other entities. Minimum future lease revenue under the leases is as follows:


2014 260,790$ 2015 265,912 2016 270,080 2017 274,386 2018 266,198 Thereafter 1,428,145

2,765,511$

Ground Lease - CHHIP as lessor has entered into a ground lease with Harrison Family Housing Limited Partnership through 2074. Lease payments are $12,000 per year with a three percent annual increase. Payments are made subject to available cash flow, as defined or from proceeds of a sale or refinance. Unpaid ground lease payments totaled $149,551 and $147,443 at December 31, 2013 and 2012, respectively, and are included in lease receivable in the balance sheet. Minimum lease payments under the lease are as follows:


2014 17,622$ 2015 18,151 2016 18,696 2017 19,256 2018 19,834 Thereafter 2,883,633

2,977,192$


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Note 4 - Continued City of Seattle Ground Lease - During 2012, Twelfth Avenue Arts Development, LLC, as lessee, entered into a ground lease with the City of Seattle for the parking garage land and condominium unit of the 12th Avenue Arts project (Note 2). Twelfth Avenue Arts Development, LLC assigned the lease to 12th Avenue Arts Associates, LLC in 2012 transferring all obligations under the lease other than the requirement to pay the minimum lease payments that which was retained by Twelfth Avenue Arts Development LLC. The lease term starts 2012 and extends through 2078, however the lease allows for a put option to be exercised for $1,000 with the City starting in January 2020 that would effectively terminate this ground lease if exercised. CHHIP intends to exercise this option. Lease payments begin August 2014 and are $100,000 per year with a $5,000 annual increase. Minimum lease payments under the lease are as follows:


2014 41,667$ 2015 100,000 2016 105,000 2017 110,000 2018 115,000 Thereafter 15,745,000

16,216,667$

Jefferson & 12th LLC Master Commercial Lease - CHHIP, as lessee, has entered into a master commercial lease with Jefferson & 12th LLC for the ground-level commercial premises with annual lease payments of $100 for a period of 20 years through September, 2032. Financing Lease - During 1999, CHHIP entered into a finance lease agreement, leasing real property to the Fleming Apartments Limited Partnership. CHHIP has recorded this lease as a direct financing lease expiring on December 31, 2097. The lessee has the right to extend the term of this agreement for a period of time equal to the remaining useful life of the capital improvements to the property as of December 31, 2097. The lease payments due to CHHIP are made in the form of principal and interest payments totaling $6,853 monthly directly to the bank as repayment of CHHIP's note payable, which had a balance of $801,924 and $835,589 at December 31, 2013 and 2012, respectively (see Note 5), plus annual rent of $12. The lease agreement requires the lessee to pay, to the bank as owner of the note payable, on behalf of CHHIP, rent in an amount sufficient to pay in full all of the principal, premium, and interest on the note payable when due, whether at maturity or upon earlier redemption or acceleration. Such rent shall be allocated to principal, premium and interest in proportion to the payment due on the note payable to be paid. The lessee has the option to buy the property at the end of the lease for $1.


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Note 4 - Continued Minimum lease payments to be received under this lease are as follows:


2014 82,227$ 2015 82,227 2016 82,227 2017 82,227 2018 82,227 Thereafter 870,240 1,281,375

Less amounts representing interest (479,452) Less current portion (35,712) Noncurrent Portion 766,211$

Note 5 - Notes Payable and Accrued Interest Notes payable are generally nonrecourse and secured by the respective properties and bear simple interest rates unless otherwise noted:

2013 2012

Permanent conventional loans, bearing compound interest from5.5% to 8.63% generally with principal and interest due monthly,to be repaid in full at various dates through 2036. Interestexpense was $708,186 and $716,840 in 2013 and 2012,respectively. $ 10,840,762 $ 11,335,894

Interim note payable to commercial bank, interest only payablemonthly at 6.25%, due March, 2014. This note replacedconventional debt which was in the process of being refinancedat December 31, 2013. The note was paid in full from proceedsof a permanent conventional loan in March 2014. 682,434

Acquisition/predevelopment loans, bearing interest from 0% to6% generally with interest only payments due monthly, to berepaid in full or partially converted to permanent loans through2017. Interest capitalized was $520 and $23,712, respectively.Interest expense was $55,590 and $37,493 in 2013 and 2012respectively. 3,435,177 4,296,476


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Note 5 - Continued

2013 2012

Bridge loan for the development of Twelfth Avenue Arts, bearinginterest at 3.25%, principal and accrued interest to be repaid infull at maturity in December, 2015 from proceeds of aFoundation capital campaign. 2,899,855 4,057,418

City of Seattle loans, bearing interest from 1% to 3%. Interest isgenerally deferred until maturity and in some instances may beforgiven if certain conditions are met over the term of the loan.The loans are to be repaid in full at various dates through 2053.Certain loans may be forgiven in their entirety if conditions aremet through the extended maturity date. Interest expense was$232,093 and $153,759 in 2013 and 2012 respectively. 20,008,990 19,959,599

State of Washington loans, bearing interest from 0% to 2%generally payable annually, to be repaid in full at various datesthrough 2051. In some instances annual payments are deferredto the second half of the loan term. Interest expense was$61,568 and $62,128 in 2013 and 2012 respectively. 8,545,987 8,658,943

Equity equivalent investment loan, interest only at 2.5% payablequarterly, to be repaid in full December, 2018. 250,000

Tenant improvements loan bearing interest at 6%, interest onlyfor the first year, amortized over the next five years, due in fullFebruary, 2019. 159,019

Total principal 46,822,224 48,308,330 Less current portion of notes payable (1,083,486) (1,472,099)

Noncurrent Portion $ 45,738,738 $ 46,836,231


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Note 5 - Continued Debt service requirements to maturity on these notes are as follows:

For the Year Ending December 31, Principal Interest

2014 1,765,920$ 980,425$ 2015 3,402,196 901,636 2016 1,532,151 729,029 2017 2,926,513 690,077 2018-2022 3,792,700 2,942,833 2023-2027 4,187,638 1,907,052 2028-2032 9,433,977 875,279 2033-2037 12,294,815 341,720 2038-2042 3,788,835 139,969 2043-2047 1,807,927 33,473 2048-2052 489,042 173 2053-2057 1,400,510 -

46,822,224$ 9,541,666$

Accrued interest payable on the above notes payable totaled $3,730,045 and $3,533,474 at December 31, 2013 and 2012, respectively and is presented separately from the above total for notes payable on the balance sheet. Interest expense on the above notes payable aggregated $1,180,940 and $970,222 for 2013 and 2012, respectively and included the deferred interest on certain non-amortizing loans. Substantially all notes payable are secured by deeds of trust on the related buildings. The notes payable to the City of Seattle and the State of Washington require rental of the apartment units to low or moderate income tenants at stipulated base rents with certain allowable increases, compliance with certain federal regulations as to discrimination and establishment of certain reserves for repairs and maintenance. Subsequent to December 31, 2013, CHHIP secured a mortgage payable to Banner Bank in the amount of $900,000 which was used to pay in full the loan payable to Bank of America for the 1214 Boylston property and to fund reserves for future improvements to the project. The loan closed March 14, 2014. The new mortgage is payable to Banner Bank in monthly installments of $4,427 beginning May, 2014, including interest at 4.25% for five years at which time the rate will adjust to the Federal Home Loan Bank of Seattle Advance Bullet rate plus 250 basis points. The loan is due in full April, 2024. For financial reporting purposes, the outstanding balance of the loan payable at December 31, 2013 of $682,434 was reported in the balance sheet as noncurrent. However, the schedule of future debt service payments shows the $682,434 as being due in 2014 as the refinance occurred subsequent to year end. Also subsequent to December 31, 2013, CHHIP entered into negotiations with the City of Seattle to extend the maturity of the Fredonia note payable in the amount of $409,760 from March 2014 until March 2019.


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Note 5 - Continued Long-term liability activity consisted of the following during 2012:

AccruedNotes Interest

Payable Payable

Beginning balance, December 31, 2011 40,945,609$ 3,382,618$

Increases- Haines Apartments 3,400,000 12th Avenue Arts Loans 4,566,930 Accrual 297,798

Decreases-Payments (604,209) (146,942)

Ending Balance, December 31, 2012 48,308,330$ 3,533,474$

Long-term liability activity consisted of the following during 2013:

AccruedNotes Interest

Payable Payable

Beginning balance, December 31, 2012 48,308,330$ 3,533,474$

Increases- CHH 409,019 Other increases 49,391 Accrual 314,129 Transfers from a change in reporting unit:

1214 Boylston 704,281

Decreases-Payments (2,648,797) (117,558)

Ending Balance, December 31, 2013 46,822,224$ 3,730,045$


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Note 6 - Investments in Limited Partnerships and LLCs CHHIP is the sole general partner and owns a 0.01 percent interest in six limited partnerships and is the managing member and owns a 0.01 percent interest in seven limited liability companies. CHHIP owns a 51 percent interest in, and is the managing member of SOPI Village Manager LLC who is then the managing member and .01 percent owner of an eighth LLC, SOPI Village LLC. The remaining ownership interests in these entities are owned by unrelated third parties. During 2013 and 2012, CHHIP earned property management fees of $503,420 and $355,948 respectively, and limited partnership and LLC management fees of $178,999 and $157,300, respectively, from these entities. Additionally, CHHIP earned development and other fees totaling $1,099,245 and $2,337,260 in 2013 and 2012, respectively, from Jefferson & 12th Apartments LLC, 12th Avenue Arts Associates LLC, and Twelfth Avenue Arts Housing LLLP. The following is a summary of selected financial information as of and for the year ended December 31, 2013, from the limited partnerships and LLCs described above and also represents condensed financial information for the aggregated discretely presented component units:

Assets Liabilities Equity

Broadway & Pine Apartments LLC $ 8,793,029 $ 5,255,965 $ 3,537,064 Capitol Hill Housing Foundation 1,252,899 123 1,252,776 El Nor Limited Partnership 3,304,660 2,093,972 1,210,688 Fleming Apartments Limited Partnership 1,988,378 2,685,277 (696,899)Harrison Family Housing Limited Partnership 2,541,037 2,791,378 (250,341)Helen V Apartments LLC 3,339,609 3,510,320 (170,711)Holiday Apartments Limited Partnership 6,301,842 5,745,503 556,339 Jefferson & 12th LLC 11,900,694 8,881,345 3,019,349 Oleta Apartments Limited Partnership 1,997,724 2,577,619 (579,895)Pantages Apartments LLC 8,533,568 5,832,410 2,701,158 Silvian Apartments LLC 3,798,078 3,025,975 772,103 SOPI Village LLC 8,845,545 5,831,960 3,013,585 Woodland Park Avenue LLC 4,575,276 4,069,106 506,170 12th Avenue Arts Associates LLC 30,837,679 31,083,756 (246,077)Twelfth Avenue Arts Housing LLLP 11,113,626 10,585,918 527,708

$ 109,123,644 $ 93,970,627 $ 15,153,017

December 31, 2013


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Note 6 - Continued

Total Net IncomeRevenues (Loss)

Broadway & Pine Apartments LLC $ 457,459 $ (304,825)Capitol Hill Housing Foundation 1,279,842 (638,395)El Nor Limited Partnership 548,064 (45,119)Fleming Apartments Limited Partnership 397,979 44,072 Harrison Family Housing Limited Partnership 325,256 (73,397)Helen V Apartments LLC 400,034 (62,938)Holiday Apartments Limited Partnership 301,587 (125,396)Jefferson & 12th LLC 472,430 (403,496)Oleta Apartments Limited Partnership 286,998 (73,336)Pantages Apartments LLC 457,729 (306,391)Silvian Apartments LLC 354,731 (71,914)SOPI Village LLC 263,535 (273,594) Woodland Park Avenue LLC 205,957 (187,020)12th Avenue Arts Associates LLC (233,657) Twelfth Avenue Arts Housing LLLP 5,000

$ 5,751,601 $ (2,750,406)

Year Ended December 31, 2013

The following is a summary of selected financial information as of and for the year ended December 31, 2012, from the limited partnerships and LLCs described above and represents condensed financial information for the aggregated discretely presented component units:

Assets Liabilities Equity

1214 Boylston Avenue Limited Partnership $ 1,909,454 $ 725,102 $ 1,184,352 Broadway & Pine Apartments LLC 9,133,173 5,291,284 3,841,889 Capitol Hill Housing Foundation 1,385,936 1,385,936 El Nor Limited Partnership 3,405,545 2,149,738 1,255,807 Fleming Apartments Limited Partnership 1,945,525 2,686,496 (740,971)Harrison Family Housing Limited Partnership 2,628,275 2,805,219 (176,944)Helen V Apartments LLC 3,427,743 3,535,516 (107,773)Holiday Apartments Limited Partnership 6,425,497 5,743,762 681,735 Jefferson & 12th LLC 11,974,310 11,765,433 208,877 Oleta Apartments Limited Partnership 2,087,929 2,594,488 (506,559)Pantages Apartments LLC 8,832,708 5,825,159 3,007,549 Silvian Apartments LLC 3,881,442 3,037,425 844,017 SOPI Village LLC 9,118,542 5,831,363 3,287,179 Woodland Park Avenue LLC 4,741,925 4,048,735 693,190 12th Avenue Arts Associates LLC 29,043,298 29,055,718 (12,420)Twelfth Avenue Arts Housing LLLP 5,621,945 5,099,237 522,708

$ 105,563,247 $ 90,194,675 $ 15,368,572

December 31, 2012


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Note 6 - Continued

Total Net IncomeRevenues (Loss)

1214 Boylston Avenue Limited Partnership $ 298,548 $ (74,937)Broadway & Pine Apartments LLC 406,332 (134,049)Capitol Hill Housing Foundation 2,163,445 955,960 El Nor Limited Partnership 529,206 (96,563)Fleming Apartments Limited Partnership 247,437 (71,197)Harrison Family Housing Limited Partnership 318,873 (70,070)Helen V Apartments LLC 382,875 (55,047)Holiday Apartments Limited Partnership 291,856 (140,415)Jefferson & 12th LLC 126,923 (170,758)Oleta Apartments Limited Partnership 267,943 (69,891)Pantages Apartments LLC 462,851 (271,156)Silvian Apartments LLC 344,398 (15,300)SOPI Village LLC 258,881 (314,344) Woodland Park Avenue LLC 206,886 (188,035)12th Avenue Arts Associates LLC (12,420) Twelfth Avenue Arts Housing LLLP (5,000)

$ 6,306,454 $ (733,222)

Year Ended December 31, 2012

In addition to the notes receivable described in Note 2, CHHIP has recorded accounts receivable from the limited partnerships and LLCs described above with a net balance of $1,941,118 and $1,438,629 at December 31, 2013 and 2012, respectively. The accounts receivable balance at December 31, 2013 and 2012, is reported net of an allowance for doubtful accounts totaling $870,420 for both years, and is included in accounts receivable in the balance sheets. CHHIP as the general partner or managing member has the option to purchase partnership property and right of first refusal at any time during the last 12 months of the initial 15-year low-income housing tax credit compliance period for each of the housing limited partnerships and LLCs. As a general partner or managing member, as applicable, of the above partnerships and LLCs, CHHIP is liable for recourse liabilities. The limited partnership and LLC agreements provide for various obligations of the general partner or managing member, including an obligation to provide funds for any development and operating deficits. CHHIP has guaranteed the outstanding debt and certain performance obligations of 12th Avenue Arts Associates LLC as part of the 12th Avenue Arts project (Note 2). At December 31, 2013 and 2012, CHHIP had $24,187,132 and $25,993,784 of outstanding guarantees and $361,106 and $363,058 of advances under guarantees, respectively.


- 30 -

Note 7 - Blended Component Units The following condensed combining information is presented as of and for the year ended December 31, 2013 for blended components as summarized in single column titled CHHIP in the basic financial statements. Condensed combining information for the balance sheet is presented below:

Housing Non-HousingBlended Blended

CHHIP Component Units Component Units Total

Assets:Current assets $ 4,318,602 $ 99,119 $ 69,979 $ 4,487,700 Due to CHHIP from

component units 271,550 (271,550)Noncurrent assets-

Capital assets, net 25,716,007 17,779,190 - 43,495,197 Other 7,887,378 1,197,172 12,851,955 21,936,505

Total Assets $ 38,193,537 $ 18,803,931 $ 12,921,934 $ 69,919,402

Liabilities:Current liabilities $ 1,734,340 $ 277,180 $ 40 $ 2,011,560 Noncurrent liabilities 31,401,522 15,901,854 3,194,965 50,498,341

Total Liabilities $ 33,135,862 $ 16,179,034 $ 3,195,005 $ 52,509,901

Net Position:Invested in capital assets,

net of related debt $ 682,152 $ 35,095 $ - $ 717,247 Restricted 3,011,342 750,309 - 3,761,651 Unrestricted 1,364,181 1,839,493 9,726,929 12,930,603

Total Net Position $ 5,057,675 $ 2,624,897 $ 9,726,929 $ 17,409,501

December 31, 2013


- 31 -

Note 7 - Continued Condensed combining information for the statement of revenues, expenses and changes in net position is presented below:



Operating revenues-Tenant revenues 4,411,391$ 2,963,550$ -$ 7,374,941$ Fees for services 773,684 14,320 - 788,004 Project development fees 1,099,245 - - 1,099,245 Other 63,527 12,563 2,631 78,721

Total Operating Revenues 6,347,847 2,990,433 2,631 9,340,911

Operating expenses 5,221,834 2,188,258 3,000 7,413,092 Depreciation and amortization 916,831 891,808 6,770 1,815,409

Total Operating Expenses 6,138,665 3,080,066 9,770 9,228,501

Operating Income (Loss) 209,182 (89,633) (7,139) 112,410

Nonoperating revenues (expenses)-Contributions and grants 572,758 - 1,187,233 1,759,991 Interest income 77,015 11,745 165,005 253,765 Loss on disposition of

property and equipment (61,628) (61,628) Interest expense (638,549) (424,479) (117,912) (1,180,940)

Change in Net Position 220,406 (563,995) 1,227,187 883,598

Net Position:Beginning of year 3,652,917 3,188,892 8,499,742 15,341,551 Change in component units 1,184,352 - - 1,184,352

End of Year 5,057,675$ 2,624,897$ 9,726,929$ 17,409,501$

For the Year Ended December 31, 2013


- 32 -

Note 7 - Continued Condensed combining information for the statement of cash flows is presented below:



Net cash provided (used) by operating activities 1,352,998$ 310,440$ (380,793)$ 1,282,645$

Net cash provided by noncapital financing activities 507,578 - 1,157,563 1,665,141

Net cash (used) providedby capital and related financing activities (2,690,003) (162,923) - (2,852,926)

Net cash provided (used) by investing activities 1,560,102 (161,727) (1,157,563) 240,812

Net change in cash and cash equivalents 730,675 (14,210) (380,793) 335,672

Cash and cash equivalents, beginning of year 1,057,746 334,388 449,272 1,841,406

Cash and Cash Equivalents, End of Year 1,788,421$ 320,178$ 68,479$ 2,177,078$

For the Year Ended December 31, 2013


- 33 -

Note 8 - Employee Benefits CHHIP contributes to a Simplified Employee Pension plan (SEP), a defined contribution benefit plan, on behalf of all eligible employees. CHHIP’s contribution is discretionary. Contributions for 2013 and 2012 were 2 percent of gross wages annually and were in the amounts of $49,229 and $46,152 for the years ended December 31, 2013 and 2012, respectively. Note 9 - Acquisitions and Development During 2013, CHHIP was engaged in the following acquisition and development projects: Haines Apartments - During 2012, Haines Acquisition LLC, wholly owned by CHHIP acquired the Haines Apartments, a 30 unit apartment complex located in Seattle, Washington. During 2013, CHHIP worked to secure funding commitments for the rehabilitation of the properties, which is expected to occur in the second half of 2014. 12th Avenue Arts - During 2012, CHHIP’s years of predevelopment work on the 12th Avenue Arts project came to fruition with closing on the financing and acquisition December 28, 2012. 12th Avenue Arts will be comprised of 88 units of affordable housing; commercial space including two theaters, offices for CHHIP and nonprofits and street level retail; and secure below grade parking for the Seattle Police Department. Construction of the 12th Avenue Arts project began in 2013. The commercial portion was 56 percent complete and the residential portion was 38 percent complete at December 31, 2013. Completion is expected in September, 2014. 24th and Union - During 2013 CHHIP entered into a purchase and sale agreement to purchase the site of a former bank branch for $560,000 to redevelop as 60 units of affordable housing. The feasibility contingency period expires June 3, 2014. Note 10 - Disposition During 2012, CHHIP sold the Elizabeth Dean Wells, a 5 unit apartment project for $780,000 recognizing a gain on the property sale of $575,227. CHHIP provided relocation assistance to the affected tenants. The net proceeds of the sale were deposited in the board designated operating reserve as described in Note 1.


- 34 -

Note 11 - Contingencies CHHIP is exposed to risks commonly associated with the ownership and rental of real properly. Risks including bodily injury, property damage by fire and forces of nature; loss of assets from theft and employee dishonesty; and liability for employees' conduct are mitigated by a combination of insurance, training and policies and procedures. Management is of the opinion that those risks are immaterial to the financial statements. In connection with various federal, state, and city grants and loan programs, CHHIP is obligated to operate in accordance with those grant and loan requirements and is subject to audit by those agencies. In cases of noncompliance, the agencies involved may require that CHHIP refund payment of program funds. The amount, if any, of expenses which may be disallowed by the agencies cannot be determined at this time, although CHHIP expects such amounts, if any, to be immaterial. Note 12 - Risk Management CHHIP has obtained insurance coverage through a commercial insurance broker with the exception of workers compensation insurance and unemployment insurance which are provided by agencies of the State of Washington. Property loss coverage is on a replacement basis with a deductible of $5,000 per occurrence. Settled claims have not exceeded coverage purchased during the past three years. Note 13 - Subsequent Events On January 31, 2014, National Equity Fund executed a donation agreement gifting its 99.99 percent limited partnership interest in Fleming Apartments Limited Partnership, a low income tax credit partnership established in 1996, to CH Development Association, a blended component unit of CHHIP. Note 14 - Change in Accounting Principle Governmental Accounting Standards Board (GASB) Statement 65 became effective as of January 1, 2013 for CHHIP and requires CHHIP to expense debt issuance costs as incurred. Prior to the effective date of GASB Statement 65, debt issuance costs were capitalized as an asset and amortized over the term of the related debt. To implement GASB Statement 65 CHHIP has removed all debt issuance costs from the Balance Sheet resulting in an adjustment to beginning net position at January 1, 2012 of $115,251 and a reduction of operating expenses for the year ended December 31, 2012 of $8,354.

SUPPLEMENTARY INFORMATION

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Departmental Operations For the Year Ended December 31, 2013

See independent auditor’s report. - 35 -

Property Administration Operations & Management Total

Receipts:Rents 7,434,713$ -$ 7,434,713$ Vacancy (233,230) (233,230) Tenant fees 173,458 173,458 Development fees 1,099,245 1,099,245 Fees for services 2,133,352 2,133,352 Contributions and grants 10,000 1,749,991 1,759,991 Other income 17,434 61,287 78,721

Total Receipts 7,402,375 5,043,875 12,446,250 Expenditures:On-site management expense 1,308,891 1,308,891 Office salaries, benefits and payroll taxes 2,586,141 2,586,141 Utilities 937,795 5,023 942,818 Professional fees 318,018 180,502 498,520 Insurance 201,187 34,492 235,679 Property management fees 837,234 837,234 Repairs, maintenance and improvements 1,251,196 15,665 1,266,861 Debt service 1,259,591 1,259,591 Office lease and NNN costs 131,648 131,648 Reserves 442,152 442,152 Other 210,420 519,748 730,168

Total Expenditures 6,766,484 3,473,219 10,239,703

Operating Income 635,891 1,570,656 2,206,547

Reconciliation to Statement of Income:Depreciation (1,779,530) (35,879) (1,815,409) Reserves additions 442,152 442,152 Interest income 4,769 248,972 253,741 Interest expense (1,052,315) (128,625) (1,180,940) Other income (expenses) (61,628) (61,628) Loss on disposition of property - Fixed asset additions from operations 66,346 66,346 Expenses paid from reserves (286,802) (286,802) Debt service payments 1,259,591 1,259,591 Front-line charges 508,114 (508,114) 0Management fees 837,234 (837,234) 0

Net Income 573,822$ 309,776$ 883,598$

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Property Operations For the Year Ended December 31, 2013


18th Avenue 410 11th E. Berneva Boylston/

Howell Bremer Brewster Broadway

Burke Gilman

Gardens

Byron/ Wetmore

Apartments LP

Casa diCinque Centennial

Receipts:Rents 114,138$ 48,821$ 102,384$ 270,690$ 379,922$ 276,615$ 53,956$ 164,547$ 118,905$ 52,980$ 278,841$ Vacancy (370) (1,348) - (6,827) (14,953) (8,268) (1,428) (6,377) (9,742) - (8,107) Tenant fees 857 1,201 1,418 8,908 7,106 6,146 955 5,130 4,571 975 11,593 Other income 174 10 - 4 698 3,864 10 380

Total Receipts 114,799 48,684 103,802 272,771 372,079 275,191 53,483 167,164 113,744 53,955 282,707 Expenditures:On-site management expense 22,107 7,964 25,851 52,041 53,190 42,541 6,026 21,053 18,560 6,476 48,259 Utilities 10,746 5,273 14,958 45,546 39,077 32,993 3,844 21,274 25,604 8,964 22,111 Professional fees 5,778 1,885 5,736 9,424 16,134 14,714 1,571 4,712 5,370 1,571 9,424 Insurance 3,374 2,711 6,352 9,360 9,701 7,817 2,688 5,000 4,225 1,960 7,347 Property management fees 5,711 3,781 7,947 31,375 54,874 39,566 7,638 24,137 21,099 7,709 21,287 Repairs, maintenance and improvements 8,908 7,579 7,558 52,795 67,509 23,656 15,548 54,467 36,040 3,100 39,280 Debt service 37,264 6,000 14,983 57,928 86,403 26,789 8,100 23,017 5,100 112,851 Reserves 14,496 4,000 2,220 10,000 19,973 26,400 1,500 7,500 7,000 - 8,500 Other 1,362 611 1,262 4,690 4,432 3,159 682 9,110 6,182 7,577 3,026

Total Expenditures 109,746 39,804 86,867 273,159 351,293 217,635 47,597 170,270 129,180 37,357 272,085

Operating Income (Loss) 5,053 8,880 16,935 (388) 20,786 57,556 5,886 (3,106) (15,436) 16,598 10,622

Reconciliation to Statement of Income:Depreciation and amortization (24,978) (8,739) (26,089) (80,162) (61,495) (68,070) (9,952) (72,455) (40,640) (299) (61,202) Reserves additions 14,496 4,000 2,220 10,000 19,973 26,400 1,500 7,500 7,000 - 8,500 Interest income - restricted 35 98 10 113 135 714 18 202 73 52 55 Interest and financial expenses (32,172) (3,752) (1,374) (44,142) (66,864) (18,969) (5,634) (9,682) 1,945 (82,163) Other income (expense) - - Fixed asset additions from operations - - 4,231 - 1,345 11,169 1,251 3,354 - 1,255 Expenses paid from reserves (1,613) - - (21,326) (11,539) - - - (687) - (15,729) Debt service payments 37,264 6,000 14,983 57,928 86,403 26,789 8,100 23,017 5,100 112,851 Frontline and bookkeeping charges 7,964 3,522 7,044 17,610 28,763 20,545 2,935 8,805 8,809 2,934 17,610 Management fees 5,711 3,781 7,947 31,375 54,874 39,566 7,638 24,137 21,099 7,709 21,287

Net Income (Loss) 11,760$ 13,790$ 21,676$ (24,761)$ 71,036$ 85,876$ 21,660$ (20,331)$ (9,383)$ 26,994$ 13,086$ Less: SUPP GAAP statement (11,759) (13,789) (21,675) 24,762 (71,037) (85,874) (21,660) 20,332 9,383 (26,995) (13,086)

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Property Operations (Continued) For the Year Ended December 31, 2013


City Affordable

Housing Devonshire

Elizabeth James Senior

Housing Fredonia Gale Place

Gilman Court LP

Hazel Plaza

Haines Acquisition

LLC Holden

Vista

Jefferson & 12th

Commercial John

Carney

Larned Apartments

LP

Receipts:Rents 173,496$ 514,517$ 581,510$ 240,476$ 262,797$ 282,972$ 156,416$ 288,773$ 162,970$ 93,353$ 197,275$ 219,579$ Vacancy (502) (27,489) (4,361) (1,270) (6,037) (4,885) (4,973) (883) (8,747) (52,130) (5,550) (5,601) Tenant fees 2,395 17,299 5,039 5,484 7,982 6,489 3,611 2,526 2,193 - 3,175 4,752 Other income 52 700 12 - 10 2,859 66 4,246 2,002 - 10 207

Total Receipts 175,441 505,027 582,200 244,690 264,752 287,435 155,120 294,662 158,418 41,223 194,910 218,937 Expenditures:On-site management expense 42,915 72,487 108,752 23,225 50,116 56,069 37,326 49,636 32,557 3,157 34,358 52,690 Utilities 28,609 64,798 63,317 18,158 45,085 37,218 22,729 38,171 35,790 2,914 25,171 32,001 Professional fees 5,600 19,746 23,614 4,700 7,996 13,567 10,826 16,850 8,262 - 8,794 13,098 Insurance 4,515 11,380 11,979 4,664 6,925 8,256 4,519 6,695 4,478 - 5,848 6,459 Property management fees 8,273 69,044 36,000 38,913 37,676 42,834 9,990 14,131 7,584 - 30,168 36,775 Repairs, maintenance

and improvements 25,662 123,765 94,211 26,204 39,784 46,150 17,761 38,019 54,136 47 34,778 42,081 Debt service 18,800 9,080 139,367 68,196 36,000 50,919 - 55,701 15,994 35,700 - Reserves 14,400 101,500 30,129 6,455 4,320 10,000 14,400 10,380 6,960 - 5,800 9,920 Other 2,549 9,789 17,349 19,127 5,417 4,975 12,137 13,776 3,687 24,894 2,989 9,040

Total Expenditures 151,323 481,589 524,718 209,642 233,319 269,988 129,688 243,359 169,448 31,012 183,606 202,064

Operating Income (Loss) 24,118 23,438 57,482 35,048 31,433 17,447 25,432 51,303 (11,030) 10,211 11,304 16,873

Reconciliation to Statement of Income:Depreciation and amortization (40,189) (67,978) (99,003) (28,895) (51,123) (133,302) (34,933) (53,130) (19,908) (6,720) (46,326) (92,620) Reserves additions 14,400 101,500 30,129 6,455 4,320 10,000 14,400 10,380 6,960 - 5,800 9,920 Interest income - restricted 91 368 228 357 79 162 37 24 85 - 70 219 Interest and financial expenses (7,184) (6,121) (100,129) (49,234) (24,922) (25,103) 4,680 (127,393) (4,591) (4,731) (17,431) 8,296 Other income (expense) - - - - Fixed asset additions

from operations 7,150 13,908 - 3,252 - 1,517 - Expenses paid from reserves (2,738) (79,333) - - - (22,127) - - - - (26,076) Debt service payments 18,800 9,080 139,367 68,196 36,000 50,919 - 55,701 15,994 - 35,700 Frontline and bookkeeping charges 9,460 36,394 42,265 7,044 13,509 20,817 10,176 31,801 6,099 - 15,559 21,961 Management fees 8,273 69,044 36,000 38,913 37,676 42,834 9,990 14,131 7,584 - 30,168 36,775

Net Income (Loss) 25,031$ 93,542$ 120,247$ 77,884$ 50,224$ (38,353)$ 29,782$ (17,183)$ 2,710$ (1,240)$ 34,844$ (24,652)$ p ( , ) ( , ) ( , ) ( , ) ( , ) , ( , ) , ( , ) , ( , ) ,

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Property Operations (Continued) For the Year Ended December 31, 2013


Lincoln Court

Mary Ruth Manor Maxwell Melrose Miller Park Park Hill

Ponderosa at Madison

LLC Seneca Tiltsonian

Villa Apartments

LP Total

Receipts:Rents 253,056$ 235,640$ 40,063$ 218,873$ 122,133$ 338,934$ 194,370$ 305,716$ 46,762$ 643,233$ 7,434,713$ Vacancy (3,066) (1,933) (964) (7,827) (4,598) (4,552) (7,575) (6,645) (2,338) (13,884) (233,230) Tenant fees 6,635 3,980 1,231 4,205 5,060 6,182 6,164 5,744 1,305 23,147 173,458 Other income 10 - 10,755 10 476 879 - - 27,434

Total Receipts 256,625 237,697 40,330 226,006 122,595 340,574 193,435 305,694 45,729 652,496 7,402,375 Expenditures:On-site management expense 45,716 52,299 4,930 47,023 26,337 53,293 69,851 40,913 6,236 94,937 1,308,891 Utilities 30,663 31,190 4,879 31,852 18,274 44,549 20,389 29,756 4,774 77,118 937,795 Professional fees 9,110 11,349 1,257 14,164 4,619 9,424 10,773 17,130 1,571 29,249 318,018 Insurance 6,500 5,517 2,381 6,062 4,070 9,621 5,512 7,954 2,624 14,693 201,187 Property management fees 14,888 12,647 2,974 25,975 10,863 51,573 12,305 72,949 6,670 69,878 837,234 Repairs, maintenance and improvements 28,309 20,442 10,349 37,423 22,283 57,857 48,168 41,357 13,662 112,308 1,251,196 Debt service 95,423 39,681 4,644 32,688 22,385 53,820 - 44,924 8,400 149,434 1,259,591 Reserves 17,400 18,000 1,440 15,600 10,461 10,000 14,484 10,000 - 28,914 442,152 Other 2,913 4,952 488 3,576 3,622 3,575 7,517 7,262 749 7,944 210,420

Total Expenditures 250,922 196,077 33,342 214,363 122,914 293,712 188,999 272,245 44,686 584,475 6,766,484

Operating Income (Loss) 5,703 41,620 6,988 11,643 (319) 46,862 4,436 33,449 1,043 68,021 635,891

Reconciliation to Statement of Income:Depreciation and amortization (80,482) (40,612) (6,316) (41,099) (37,284) (38,603) (12,159) (117,891) (8,935) (267,941) (1,779,530) Reserves additions 17,400 18,000 1,440 15,600 10,461 10,000 14,484 10,000 - 28,914 442,152 Interest income - restricted 87 136 40 113 295 242 369 10 34 218 4,769 Interest and financial expenses (81,778) (36,079) (1,275) (15,841) (22,467) (91,368) - (19,736) (5,842) (161,259) (1,052,315) Other income (expense) - - - (61,628) (61,628) Fixed asset additions from operations - 2,418 - 7,026 5,345 - 3,125 66,346 Expenses paid from reserves - - (11,843) - (3,119) (19,316) (3,770) - (67,586) (286,802) Debt service payments 95,423 39,681 4,644 32,688 22,385 53,820 - 44,924 8,400 149,434 1,259,591 Frontline and bookkeeping charges 17,023 17,699 2,349 17,610 7,044 17,610 18,201 25,691 2,935 40,326 508,114 Management fees 14,888 12,647 2,974 25,975 10,863 51,573 12,305 72,949 6,670 69,878 837,234

Net Income (Loss) (11,736)$ 55,510$ (999)$ 46,689$ (12,141)$ 37,846$ 39,211$ (12,232)$ 4,305$ (136,870)$ 573,822$

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2013

See accompanying notes to schedule of expenditures of federal awards and independent auditor’s report. - 39 -

Federal FederalFederal Grantor / Pass-Through CFDA Pass-Through Disbursements/Grantor / Program Title Number Identifying Number Expenditures

Department of Housing and Urban Development:Pass-Through Program From-

Housing Authority of the City of Bremerton:Section 8 Housing Assistance Payments Program 14.195 WA19L000022 95,990$ Section 8 Housing Assistance Payments Program 14.195 WA 19M000017 120,745 Section 8 Housing Assistance Payments Program 14.195 WA 19M000141 132,477

Total 14.195 349,212

City of Seattle:Community Development Block Grants/Entitlement Grants-

410 Apartments* 14.218 30,100 Bremer Apartments* 14.218 102,630 Fredonia Apartments* 14.218 409,760 Gale Place Apartments* 14.218 286,400 Lincoln Court Apartments* 14.218 1,203,904 Park Hill Apartments* 14.218 282,303 Community Development Block Grant Entitlement Grants 14.218 2111/13 21,105

Total 14.218 2,336,202

Rental Rehabilitation Program-Gale Place Apartments* 14.230 480,000 Park Hill Apartments* 14.230 122,088

Total 14.230 602,088

State of Washington:HOME Investment Partnership Program* 14.239 04-40403-004 1,000,000

Total 14.239 1,000,000

Enterprise Community Partners, Inc.:Section 4 Capacity Building for Community Development

and Affordable Housing 14.252 B-10-CB-MD-0001 40,000 Section 4 Capacity Building for Community Development

and Affordable Housing 14.252 B-11-CB-MD-0001 25,000 Section 4 Capacity Building for Community Development

and Affordable Housing 14.252 13SG2761 35,000

Local Initiatives Support Corporation:Section 4 Capacity Building for Community Development

and Affordable Housing 14.252 PA# 40257-0038 3,893 Section 4 Capacity Building for Community Development

and Affordable Housing 14.252 PA# 40257-0039 23,003

Total 14.252 126,896

Total Federal Expenditures 4,414,398$

* Denotes outstanding loan

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Expenditures of Federal Awards For the Year Ended December 31, 2013

- 40 -

Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Capitol Hill Housing Improvement Program (CHHIP) under programs of the federal government for the year ended December 31, 2013. The information in this Schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Government, and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of CHHIP, it is not intended to and does not present the financial position, changes in net assets or cash flows of CHHIP. Note 2 - Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available.

SINGLE AUDIT REPORTS




Certified Public

Accountants

and Consultants

- 41 -

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor’s Report To the Board of Directors Capitol Hill Housing Improvement Program Seattle, Washington We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the business-type activities and the aggregate discretely presented component units of Capitol Hill Housing Improvement Program (CHHIP), as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise CHHIP’s basic financial statements, and have issued our report thereon dated May 21, 2014. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered CHHIP's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of CHHIP’s internal control. Accordingly, we do not express an opinion on the effectiveness of CHHIP’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Certified Public

Accountants

and Consultants

- 42 -

COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether CHHIP's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests 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 entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.





Certified Public

Accountants

and Consultants

- 43 -

Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance

Independent Auditor’s Report

Board of Directors Capitol Hill Housing Improvement Program Seattle, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited Capitol Hill Housing Improvement Program’s (CHHIP’s) compliance with types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of CHHIP’s major federal programs for the year ended December 31, 2013. CHHIP’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. CHHIP’s financial statements include the operations of certain HUD projects and Elizabeth James Senior Housing, blended component unit of CHHIP, that in total received $3,430,377 in federal awards. Those projects are subject to U.S. Department of Housing and Urban Development (HUD) reporting requirements. Those HUD projects were audited as a separate organizational unit and Elizabeth James Senior Housing as a legally separate entity as permitted by OMB Circular A-133, Section §__.500a and HUD. Accordingly, the federal awards of $3,430,377 are excluded from the accompanying schedule of expenditures of federal awards. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of CHHIP’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about CHHIP’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of CHHIP’s compliance.

Certified Public

Accountants

and Consultants

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Opinion on Each Major Federal Program In our opinion, CHHIP 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, 2013. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of CHHIP 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 CHHIP’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 OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of CHHIP’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 OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.


CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Findings and Questioned Costs For the Year Ended December 31, 2013

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Section I - Summary of Auditor’s Results Financial Statements

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

- Material weaknesses identified? Yes No - Significant deficiencies identified? Yes None reported.

Noncompliance material to financial statements noted? Yes No

Federal Awards

Internal control over major programs:

- Material weaknesses identified? Yes No

- Significant deficiencies identified? Yes None reported. Type of auditor’s report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133? Yes No

Identification of Major Programs CFDA Numbers Name of Federal Program or Cluster 14.218 Community Development Block Grant Cluster

Dollar threshold used to distinguish between Type A and Type B programs: $ 300,000 Auditee qualified as low-risk auditee? Yes No

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Findings and Questioned Costs For the Year Ended December 31, 2013

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Section II - Financial Statement Findings No matters were reported. Section III - Findings and Questioned Costs for Federal Awards No matters were reported.

CAPITOL HILL HOUSING IMPROVEMENT PROGRAM Schedule of Prior Audit Findings For the Year Ended December 31, 2013

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There were no prior audit findings; therefore, no matters are reportable.

Guest Presenter

Roger Valdez

Roger has worked as a campaign manager, lobbyist, legislative aid and

program manager. He has held a variety of positions including Regional

Health Officer and manager of the Tobacco Prevention Program at Public

Health Seattle King County, and Neighborhood Development Manager for

the South West Sector in the City's Department of Neighborhoods where

he worked on implementing neighborhood plans. Recently, he worked as a

research associate at Sightline Institute where he researched and wrote

about energy efficiency and financing sustainability.

Roger's work in public health and in neighborhood development has always

focused on creating mutually beneficial partnerships between the public

and private sector to enhance public space and effectively integrate

economic development, neighborhood values, health, arts and culture into

the planning and development of the built environment.

In 2011, Roger read through the Seattle Land Use Code and blogged about it, and he sometimes

contributes to the Seattle Transit Blog, Publicola, and Crosscut. His writing has also been featured in the

Seattle Post Intelligencer, Seattle Times, The Stranger, and City Journal.

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&docid=bwUwHVVSMq055M&tbnid=EJDI24zAP85qRM:&ved=0CAUQjRw&url=http://manywordsforrain.blogspot.com/2010/08/roger-valdez-tunnel-hater-is-this-weeks.html&ei=gA6NU_2pF8KxoQS6_IG4AQ&bvm=bv.68235269,d.cGU&psig=AFQjCNEK4Dy9dkj6sUeFg4hDb1QrYZgACQ&ust=1401839594526727

HEYWARD WATSON SEATTLE, WA 98109 | 206-856-5564

[email protected]

OBJECTIVE: Seeking a management position that utilizes my experience in strategic direction development, team building with diverse community partners, community development and financial management.

PROFESSIONAL EXPERIENCE

BC HOUSING | VANCOUVER, BC (2012-2014) CONTRACT SENIOR PROJECT OFFICER

• Managed a portfolio of 12 housing projects ranging from $1.5MM to $35MM from inception through all

phases of construction development, to warranty and occupancy permit.

• Delivered 27% of 733-unit production for Lower Mainland Region for Development Services for the Program Year 2013.

• Delivered 83% of projects on time and within budget for the 2013 Program year.

• Worked collaboratively with 12 project sponsors and partners, including societies, private sector developers, industry specialists, contractors, government ministries and other agencies in achieving project objectives.

IMPACT CAPITAL | SEATTLE, WA (2006-2011) EXECUTIVE DIRECTOR

• Steered the vision and direction of this $24.5M financial services and intermediate lending nonprofit organization, providing credit, financial and technical services to community development organizations.

• Developed and reestablished the Board Committee System from 7 Committees to 3 fully functioning Committees.

• Directed the creation of a website and a quarterly electronic newsletter which raised external communications exposure by 25%.

• Renegotiated $10MM worth of investments to Impact Capital which allowed the organization to retain it’s lending pool at $20.5MM during the economic downturn.

• Created policies and procedures that secured a 20% reduction in operating costs for 2010.

• Negotiated the Memorandum of Agreement with Local Initiatives Support Corporation (LISC), establishing Impact Capital as an affiliate of LISC in the Northwest.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FANNIE MAE) | SEATTLE, WA (1995-2006) DIRECTOR (1999-2006), DEPUTY DIRECTOR (1995-1999)

• Directed the Community Development Office of this financial services company with $4 billion in revenue. • Designed mortgage products for housing finance agencies to originate $100M in down payment assistance

for mortgages nationally between 1996 and 2001. • Responsible for forging and maintaining business relationships with nonprofit organizations, mortgage

lenders and government entities, fulfilling housing requirements of underserved communities.

• Developed Congressional relationships and tracked relevant legislative issues. • Served as liaison to company departments requiring community representation and presented new business

development proposals to local private and public sector entities. • Expanded this office’s coverage from the City of Seattle to eight counties in the Puget Sound region;

further expanding to the States of Washington, Alaska and Hawaii, to accomplish key investment plan goals.

• Grew loan volume and customer base by actively soliciting qualified business from unconventional partners such as the Urban League, International District Housing Alliance and government agencies.

• As Deputy Director, promoted public awareness of Fannie Mae’s housing and community development activities; helped improve the organization’s public image in the States of Washington, Alaska and Hawaii.

• Assisted Corporate Relations in identifying, creating and capitalizing on media opportunities that included the appearance of U.S. Senator Maria Cantwell at the HomeChoice 100 Celebration in Spokane, Washington.

• Ranked as the organization’s first Deputy Director to be promoted to Director within Housing and Community Development.

WASHINGTON STATE HOUSING FINANCE COMMISSION | SEATTLE, WA (1988-1995) DIRECTOR, HOMEOWNERSHIP PROGRAMS

• Served in a senior management capacity role for this housing finance agency; led the development of, and formulated policy for innovative programs assisting first-time homebuyers state-wide.

• Advanced work on housing policy issues affecting minority populations.

• Conducted presentations to the Board of Directors on new program ideas and status.

• Prepared and administered a $300,000 departmental budget.

• Compiled loan delinquency reports and designed homebuyer education seminars to reduce delinquency. • Developed fund allocation system to maximize mortgage revenue bond issue fund usage from 85% under

the lender allocation to 98% through the “First Come First Serve” system. • Principal participant in structuring mortgage revenue bond offerings that ranged from $20M to $40M;

drafted and concluded contracts with lenders and program administrators. • Served as Human Resources Director charged with applying state regulations to hiring, corrective action

and employee training/development policies and procedures; created training programs on the mortgage origination business, and instituted employee recognition and recruitment programs for professional staff.

FIRST MUTUAL SAVINGS BANK | BELLEVUE, WA (1983-1987) ASSISTANT VICE PRESIDENT & MANAGER

• Provided oversight of the bank’s Construction Loan Department; responsible for developing and implementing procedures governing construction loan underwriting; marketed the bank’s Custom Construction Program to loan officers; scheduled and coordinated loan closing and servicing activities; informed executive committee on construction lending program progress.

• Revived the Construction Loan Department’s production from under $100K to more than $12M in an 18-month period, including custom and spec construction; built a competitive and profitable Custom Construction Program that accounted for 70% of the department’s revenue stream.

• Developed contractor approval criteria to mitigate risk during construction; formulated loan origination strategy that expanded the program to several markets and price points, reducing exposure to market downturns.

EDUCATION & CREDENTIALS

• Antioch University | Seattle, WA | Master of Science in Business Management

• Harvard University | Cambridge, MA | Senior Executive Program

• University of Washington | Seattle, WA | Bachelor of Arts, Sociology

PROFESSIONAL DEVELOPMENT: • Washington State Executive Programs • School of Mortgage Banking

BOARD APPOINTMENTS & PROFESSIONAL AFFILIATIONS: • Sound Families Initiative | Board of Advisors, Member-At-Large • Habitat for Humanity Seattle/South King County | Chair, Executive Committee • Washington State Affordable Housing Advisory Board | Chair • Seattle Housing Authority | Board of Commissioners, Member-At-Large • Washington Higher Education Finance Authority | Chair • Seattle Mortgage Bankers | former Board Member • Seattle Mortgage Bankers Association | CRA Committee, former Co-Chair • FNMA Housing Impact Advisory Council | Western Regional Officer, former Member

june 2014 - capitolhillhousing.org€¦ · his bio is attached to the packet. ... roger valdez bio...

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