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HomeMy WebLinkAboutProposal to City of Bozeman-ARPA Economic Impact Response - HRDCProposal to City of Bozeman American Rescue Plan Economic Stabilization Response Human Resource Development Council, IX Executive Summary In response to the economic impacts of COVID-19 pandemic on Bozeman residents, the HRDC is proposing to utilize the Coronavirus State and Local Fiscal Recovery Funds noted in the Request for Proposal released by the City of Bozeman to support the immediate economic stabilization for households and businesses. It is our intention to pair much needed financial support in the areas of childcare and unanticipated household expenses with financial coaching in order to support families to more effectively achieve economic stability during this current period of economic insecurity. Recent and ongoing partnerships with the City of Bozeman and HRDC work to address the housing needs of so many local families who are struggling as a result of the pandemic. With this funding request, HRDC aims to connect with families who are currently housed, but whose economic stability is tenuous due to the high cost and high demand for childcare and other unforeseen household expenses. In our conversations with both local employers as well as local families, the availability and affordability of childcare is one of the critical factors that impact the ability of our local workforce to return to their jobs. We propose that a direct subsidy to households with children in care, or seeking care will create an immediate increase in economic stability for the families as well as provide greater workforce security for our local employers by helping capable, talented people return or enter our local job market. We recognize that as the result of the pandemic, the cost of living in our area has increased rapidly. HRDC works with many customers who have been impacted by COVID who are faced with one time unforeseen household expenses, which impact the health and safety of our local families, such as frozen pipes, leaking roofs, transportation or other emergency needs. This proposal aims to support those impacted Bozeman families with not only the financial support for household crises or childcare subsidies, but also to pair this with a financial coach who can assist them in developing plans and habits to support their long term economic stability. Economically healthy citizens help not only our local families, but the economic health of our local business and the entire Bozeman community. HRDC Profile The Human Resource Development Council of District IX, Inc. (HRDC), a private not-for-profit 501(c)(3) Community Action Agency, formed in 1975 to instill hope, develop resources, design solutions and change lives. As a Community Action Agency, HRDC’s responsibility is to identify and respond to our community’s most pressing needs and support resilience in a place where opportunity and quality of life are equally afforded to everyone. Our breadth of programs demonstrate our commitment to this: Housing, Child & Youth Development, Food & Nutrition, Senior Empowerment, Community Transportation, Energy Assistance and Community Development. We provide services across the entire continuum of need. We tackle housing instability, operating two warming centers. Rental assistance, down payment assistance, transitional housing, and homeless support help around 500 families a year find stable housing (and educate and prepare hundreds more for home ownership); while property management of 8 facilities guarantees affordable housing for hundreds more. Our approach to hunger and food security includes operating three food banks, a pay what you can social enterprise restaurant , culinary training opportunities, and food-to-school initiatives. Early Childhood Education and HeadStart programs serve 200 families annually; Senior programming supports more than 1700 elders in the community, meeting their unique needs. Our transportation services, Streamline and Galavan, provide more than 313,000 free rides each year, and Energy Assistance supports 2500 families paying their energy bills. While the Covid-19 pandemic has certainly added challenges to this programming, HRDC has never wavered in its commitment to address the systemic needs of our community. Audit Report - see attached Related Experience HRDC has a long and successful history in partnering with the City of Bozeman as a subcontractor or sub recipient of funding in the provision of services to the benefit of Bozeman residents. Previous experience includes the provision of homebuyer education to local residents, the maintenance of the City’s affordable housing waitlist and ongoing compliance with the affordable housing programs, as well as previous COVID response grants which are directly administering benefits to Bozeman residents in their pursuit of stable and secure housing. HRDC also has been successful in the provision of financial coaching to local residents with a national proven system for supporting growth in economic stability. Program Description Economic Impact Response Child care is an essential part of our economy, enabling families to work while preparing children for school and employing a large workforce. Unfortunately, the coronavirus public health crisis has exacerbated the challenges that decades of underinvestment have produced in the child care system. Bozeman has a large population of working parents with young children who need child care to work. Prior to the pandemic, our child care system served only half of children needing care, and the number of providers had decreased in the previous decade. In Montana, 320 of the 859 licensed and registered family, group, and child care providers closed following the April 1 stay-at-home order, reducing Montana’s child care capacity by over 10,000 slots. At the same time we have a shortage of available workers to keep our local businesses open and operating. This proposal aims to support both local families and local businesses in supporting Bozeman residents to reenter the workforce with the support of a childcare subsidy. In addition to the cost of childcare being out of reach for families who have been financially impacted by the COVID public health emergency, we also recognize that there are also many families who are now unprepared to respond to unforeseen household expenses. Examples of these expenses include home repairs such as plumbing or roof repair, as well as auto repair. For our Bozeman families who are already grappling with a high cost of living, these one time expenses can often mean the difference between economic stability and dire consequences. Our proposal pairs financial support for these unexpected expenses and childcare subsidies with one on one financial coaching for the families that are accessing these supports. HRDC currently offers financial and career coaching to local residents. Financial coaches work with local families to support them in achieving their financial goals and taking control of their financial situation through spending and savings plans, credit support and accessing additional income support. It is our aim that by pairing coaching with financial support, we can strengthen our Bozeman community to weather the impacts of the pandemic. Funding Requested HRDC is currently requesting $100,000 in funding to immediately address the economic stability of Bozeman residents. This funding will support the following activities. Childcare Subsidies: Direct Payment to local childcare providers on behalf of local families to support parents in getting back to work estimated at $55,000 for the contract period Subsidies of $200/month will be provided to families who are earning between 180-250% of the Federal Poverty Level A limited number of $500/month subsidies will be provided to families who are earning less than $180% of the Federal Poverty Level AND were screened to ineligible for the Best Beginnings Scholarships Unexpected Household Expenses: These direct payments to households or household vendors (i.e. plumber, mechanic, repairs, etc.) will be made to support local households who have been impacted by covid and are experiencing and unanticipated household expense that jeopardizes their economic stability; estimated at $25,000 for the contract period. Financial Coaching: One half of an FTE dedicated to providing financial coaching and determining eligibility for the assistance noted above for Bozeman households who are cost burdened and financially insecure; estimated at $20,000 for contract period. Funding Distribution Bozeman families who are seeking support with either childcare subsidies or unforeseen household expenses will initially meet with a financial coach. Those who are determined to be eligible and appropriate for financial assistance based on the criteria outlined above, will receive that assistance directly to their childcare provider or to the repair company or plumber providing the assistance. HRDC in its current provision of services already has the financial capacity and mechanisms in place to support these activities. In cases in which financial assistance cannot be provided directly to the service provider, that assistance can be provided to the household. Administrative Fees There will be no administrative fees associated with the provision of these services. Federal Compliance The HRDC has an annual operating budget of approximately $9 million, total assets of approximately $22 million, and employs over 100 individuals. The HRDC administers over 60 individual grants and contracts on an annual basis as the grantee. A full set of audited financial statements are available. In addition, the HRDC has served as the fiscal sponsor for several community projects, including the Community Incentive Program, Bozeman Turner Youth Initiative, HRDC Directors Association, and Volunteer Connections of Southwest Montana. Community groups approach the HRDC for fiscal sponsorship due to our excellent track record and expertise in managing federal grants and our high level of accountability for funds placed in our care. The HRDC has an established system of internal controls to ensure that financial transactions are properly authorized, accounted for, executed in compliance with laws, regulations and the provisions of contracts, and that assets are safeguarded against loss from unauthorized use or disposition. This system also functions to minimize the time elapsed between the receipt of funds and the disbursement of those funds for program activity. The HRDC’s internal controls are tested each year during the annual external audit (see below under Financial Accountability). The HRDC is able to trace expenditures for individual programs to a level adequate to establish that funds have not been used in violation of specific program requirements. A strong audit trail exists for all accounting transactions, and every dollar expended on a program can be traced to the General Ledger and to supporting documentation. The HRDC maintains a tight internal control structure to ensure that grant funds are only used in accordance with the terms of the grant agreement, applicable OMB Circulars, and Generally Accepted Accounting Principles. The HRDC’s fiscal staff has over 30 years of combined experience administering federal, state, and local grants and contracts. Fiscal staff members are very knowledgeable of Generally Accepted Accounting Principles (GAAP), federal and state laws and regulations, OMB Circulars, and specific requirements of federal grants. City Compliance HRDC has an agency-wide belief in the power of evaluation and assessment, and a long history of programmatic tracking, as well as a long history of complying with a wide variety of funder requests for reporting and validation. We believe that accurate collection of data and tracking individual and program progress is the best, and really the most reliable, measure of our effectiveness at achieving outcomes and having the impacts we (and our funders) desire. We have also had a successful history in meeting City Compliance requirements as identified in the subrecipient agreement with this request for proposal. Equity in service provision HRDC has a long-standing commitment to racial justice, coordinated through the Racial Equity Working Group (which actively works to diversify staff and Board, ensures principles of equity and racial justice are aligned throughout policy, governance, and delivery of services. It also oversees direct outreach to communities of color in our region). That said, census data confirms our service area (and Montana generally) to be around 90% white, non-Hispanic or Latino (those identifying as Native American are the second largest racial group, at around 6-7%). We actively engage Native communities and the increasing numbers of Latinx members of our communities; at the same time, HRDC works diligently to dismantle, structural white privilege (ongoing, efforts to redress widespread poverty and its effects speak to this) Our housing, hunger, transportation, education, finances--all our programs tackle systemic barriers to equity and opportunity; our financial education and economic stability focus is a direct action against historical privileging of white citizens--and arguably, white men--in areas of economic prosperity, wealth accumulation, and legacy policies. In other parts of the country, our work would manifest as direct support of people of color; here, it manifests as a concerted effort to deconstruct systems that perpetuate poverty and economic inequity. HRDC is also engaged in a partnership with Montana Language Services to ensure that all local community members have access to our services regardless of their home language or english proficiency. Schedule for Program and Funding Distribution HRDC is currently prepared to begin offering these services upon receipt of the funding. We are currently working with families who would benefit from financial assistance, as well as financial coaching. We anticipate that during the remainder of 2021 our agency would work with existing customers, while concurrently engaging in outreach to our community partner and business partners in order to connect with Bozeman residents who may best benefit from the services indicated in this proposal. We anticipate that the majority of the funding would be allocated and distributed to households during 2023, as word of mouth and other outreach efforts ensure we are reaching a wide spectrum of Bozeman residents. The funding would be fully expended in early 2024, prior to the July 2024 requirement. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED FINANCIAL REPORT June 30, 2020 and 2019 C O N T E N T S PAGE INDEPENDENT AUDITOR’S REPORT......................................................................1 through 3 MANAGEMENT’S DISCUSSION AND ANALYSIS.................................................4 through 6 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Financial Position...............................................................7 and 8 Consolidated Statements of Activities...........................................................................9 and 10 Consolidated Statements of Functional Expenses.......................................................11 and 12 Consolidated Statements of Cash Flows .....................................................................13 and 14 Notes to Consolidated Financial Statements ........................................................15 through 56 SUPPLEMENTAL INFORMATION Explanation of Supplemental Schedules .................................................................................57 Consolidating Schedules of Financial Position...........................................................58 and 59 Consolidating Schedules of Activities.........................................................................60 and 61 Home Corporation Schedules of Financial Position.............................................................................................62 Schedules of Activities..........................................................................................................63 Schedules of Cash Flows.......................................................................................................64 Sherwood Inn Apartments, Inc. Schedules of Financial Position.............................................................................................65 Schedules of Activities..........................................................................................................66 Schedules of Cash Flows.......................................................................................................67 Unrestricted Corporate Funds Schedules of Financial Position.............................................................................................68 Schedules of Revenues, Expenses and Changes in Net Assets.............................................69 C O N T E N T S ( C O N T I N U E D ) PAGE Schedules of Revenues, Expenses, and Changes in Net Assets Weatherization Assistance –LIEAP .....................................................................................70 Weatherization Assistance -DOE.........................................................................................71 LIEAP Administration Program............................................................................................72 Low Income Energy Assistance Program .............................................................................73 LIEAP Client Education & Outreach Program .....................................................................74 Northwestern Energy Weatherization Program.....................................................................75 Energy Share .........................................................................................................................76 Supplemental Weatherization Assistance..............................................................................77 LISC ......................................................................................................................................78 Healthy Housing Housing First Village ................................................................................79 Bridges to Career Opportunities............................................................................................80 Section 8 Housing Program...................................................................................................81 HUD Emergency Shelter Grants Program.............................................................................82 Home to Stay -Emergency Services.....................................................................................83 Federal Emergency Management Agency.............................................................................84 Ryan White Part B HIV Care ................................................................................................85 Partnerships for Permanently Supportive Housing ...............................................................86 Rapid Re-Housing .................................................................................................................87 Warming Center ....................................................................................................................88 Livingston Warming Center –Pilot.......................................................................................89 Gallatin Valley Food Bank....................................................................................................90 Gallatin Valley Food Bank -Senior CFSP............................................................................91 Fork & Spoon Homestyle Kitchen ........................................................................................92 Healthy KidsPack Program ...................................................................................................93 Summer Lunch Program........................................................................................................94 Headwaters Area Food Bank.................................................................................................95 Big Sky Community Food Bank ...........................................................................................96 In Home Services ..................................................................................................................97 In Home Services –Park County ..........................................................................................98 State Health Insurance Program (SHIP) –Information and Assistance................................99 Retired Senior Volunteer Program ......................................................................................100 Senior Medicare Patrol........................................................................................................101 Sherwood Service Coordinator............................................................................................102 Galavan/Senior Transportation............................................................................................103 Streamline Bus/Public Transportation.................................................................................104 Work Force Innovation and Opportunity Act –Youth .......................................................105 Chafee Foster Care Independence Program ........................................................................106 Blueprint -Youth Transitional Living House .....................................................................107 Head Start Program .............................................................................................................108 Head Start Private Pay Program..........................................................................................109 Pre-School Development.....................................................................................................110 Head Start Facilities ............................................................................................................111 C O N T E N T S ( C O N T I N U E D ) PAGE Big Sky Community Housing Trust....................................................................................112 Road To Home (Homeownership Center)...........................................................................113 Resource Property Management..........................................................................................114 Community Services Block Grant.......................................................................................115 HRDC Central Office/HRDC Annex Office.......................................................................116 Schedule of Administrative Costs Allocated.......................................................................117 SINGLE AUDIT SECTION Schedule of Expenditures of Federal Awards ..................................................118 through 122 Notes to Schedule of Expenditures of Federal Awards.........................................................123 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAL AUDITING STANDARDS ...........................................................124 and 125 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE .................126 and 127 Schedule of Findings and Questioned Costs ...............................................................................128 -1-1019 E MAIN ST• SUITE 201• BOZEMAN, MONTANA 59715 TEL: 406.556.6160• FAX:406.586.8719• WEB: www.azworld.comANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT To the Board of Directors Human Resource Development Council of District IX, Inc. Bozeman, Montana Report on the Financial Statements We have audited the accompanying consolidated financial statements of Human Resource Development Council of District IX, Inc.(a nonprofit organization), which comprise the consolidated statements of financial position as of June 30, 2020 and 2019, and the related consolidated statements of activities, functional expenses, and cash flows for the year s then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 an opinion on these consolidated 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 t o 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 s 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 consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 opinion. ANDERSON ZURMUEHLEN & CO., P.C CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS -2- Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Human Resource Development Council of District IX, Inc.as of June 30, 2020 and 2019, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Effect of Adopting New Accounting Standards As discussed in Note 1, the Organization adopted the Financial Accounting Standards Board’s Accounting Standard Updates (ASU) 2014-09, Revenue from Contracts with Customers (Topic 958), ASU 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-15 Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, ASU 2016-18, Statement of Cash Flows (Topic 230) –Restricted Cash and ASU 2018-13 Disclosure Framework –Changes to the Disclosure Requirements for Fair Value Measurement as of and for the year ended June 30, 2020. Our opinion is not modified with respect to these matters. Other Matters Supplemental and Other Information Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplemental information on pages 57 through 117 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. The accompanying schedule of expenditures of federal awards is presented for the purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Management’s discussion and analysis on pages 4 through 6, which is the responsibility of management, includes information of a nonaccounting nature and has not been subjected to the auditing procedures applied in the audits of the financial statements. Accordingly, we do not express an opinion or provide any assurance on it. ANDERSON ZURMUEHLEN & CO., P.C CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS -3- Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 16, 2021, on our consideration of the Human Resource Development Council of District IX, Inc.’s.internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, a nd not to provide an opinion on the effectiveness of the Human Resource Development Council of District IX, Inc.internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Human Resource Development Council of District IX, Inc.internal control over financial reporting and compliance. Bozeman, Montana June 16, 2021 -4- Management Discussion & Analysis Our previous fiscal year started with an urgent need to find funding and financing to preserve a rare, local, irreplaceable treasure, the Boulevard Apartments. This downtown Bozeman apartment complex has been home to some of our community’s most vulnerable for decades. Everyone who lives there is either extremely low income or very low income and struggling to find ways to put food on the table each and every day, yet grateful for the place they call home. Thanks to a patient and committed seller, local investors wanting to make a difference in our community, and a Board of Directors that understands the critical nature of preserving subsidized housing in our community, we were able to save 41 homes. This started our pilot of local social impact investing and resulted in a low income housing tax credit award that will rehabilitate and preserve 230 homes in Bozeman and Livingston, affordable for our low and extremely low income residents. These are the partnerships and community solutions we are chartered to identify and implement. We had many other housing successes throughout the year –the development and completion of the first 18 homes affordable to families that live and work in Big Sky, with 34 more being developed in Phase 2. We got final plat approval on the first missing middle homeownership development in Bozeman. We also worked with local partners to reinvent and revision public transit in the greater Bozeman area, mapping out a plan to build and implement a strategic, regional public transit solution. We also experienced the onset of the Pandemic. From providing portable restrooms to leasing a hotel to provide shelter in place space for our neighbors without homes to virtual pre-K to ensuring every essential worker still had a ride to work and every senior had a ride to dialysis treatment to transitioning our youth home to a supportive classroom to make sure our youth graduate high school to partnering with the school districts to make sure every student had food to delivering essential products to our homebound neighbors, we were here for every member of our community. This response exposed the very weaknesses in our economy and community that we respond to each and every day, highlighting how vulnerable all of us can be. It also forced us to work without 3,500 of our team members –our volunteer workforce. We miss you and we cannot wait to have each and every one of you back at the helm. We are committed to continuing to respond to and meet surfacing needs resulting from the impact of the pandemic. Financially, HRDC continues to operate very efficiently. Our combined administration and fundraising expense ratio is less than 10% of our total annual expenses of operations based on HRDC’s Consolidated Statement of Functional Expenses for fiscal year 2019-20. -5- In addition to our 2019-20 ongoing core operations, HRDC’s Consolidated Statement of Activities for the fiscal year ended June 30, 2020 includes: nonrecurring sales of 29 affordable workforce housing units constructed in Big Sky and Bozeman totaling $7,210,000; pledged contributions restricted for future capital projects of $2,611,601; nonrecurring capital grants of $2,323,375 consisting of o $1,884,163 to assist affordable workforce housing construction in Big Sky and Bozeman, o $355,000 to assist with downpayment assistance loans to eligible homebuyers of affordable workforce housing units constructed in Big Sky, and o $84,212 to assist with the purchase of two additional Galavan vehicles to help meet our area’s growing public transportation and paratransit needs. The prior fiscal year 2018-19 also included nonrecurring activities, primarily: nonrecurring capital grants of $1,919,865 consisting of o $1,750,000 to purchase land for workforce housing construction in Big Sky, and o $169,865 to assist with purchasing three Galavan vehicles for paratransit transportation; nonrecurring non-cash land donation $1,600,000 for Bozeman workforce housing development; pledged contributions restricted for future capital projects of $585,720; and nonrecurring sales of affordable condominiums and other housing units of $344,400. Excluding these nonrecurring activities, HRDC had ongoing revenues from our core operations of $17.8 million and corresponding expenses of $18.0 million in fiscal year 2019-20, compared with ongoing core revenues of $16.0 million and expenses of $16.4 million in the prior fiscal year 2018- 19. In short, HRDC’s programs and activities, taken as a whole, used slightly more resources to sustain our ongoing core operations than we received and mobilized in resources during fiscal years 2019-20 and 2018-19. The revenues reported in HRDC’s Consolidated Statement of Activities also include $2.9 million in non-cash contributions of food received from donors in fiscal year 2019-20, as required by U.S. generally accepted accounting principles, and the reported expenses include a corresponding amount of non-cash distributions of food to customers. -6- These non-cash contributions and distributions of food are valued at $1.62 per pound, which is the industry standard estimate of their fair market value. If these non-cash contributions and distributions of food were also excluded, in addition to the nonrecurring activities excluded in the paragraph above, HRDC’s adjusted ongoing core revenues would be $14.9 million and adjusted ongoing core expenses would be $15.1 million for fiscal year 2019-20. Additional information on the revenues, expenses, and net results of the ongoing, individual programs and activities of HRDC is reported in the supplemental schedules found on pages 57 through 117. As we look to 2021, we will craft a new strategic plan, continue our development and preservation of affordable homes, and break ground on our new facilities. Our Strategic Plan will focus on the top 5 pressing issues facing our community (as identified in our Community Needs Assessment): Housing, Childcare, Transportation, Medical and Behavioral Health Care. We will preserve 230 homes and build many new ones. Our partnerships will create hundreds of rental units across Bozeman and Livingston, creating homes on the ground that are affordable to Montana families. We promise to continue to forge new ground in creative solutions to address homelessness, bringing the first tiny home community to Montana –Housing First Village. We will also continue our work to create a regional public transportation system, and develop and implement programming that will help families not only survive, but thrive. HRDC’s mission is to instill hope, develop resources, design solutions and change lives. We envision a place where poverty has no impact because opportunity and quality of life are equally afforded to everyone. C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION June 30, 2020 and 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -7- 2020 2019 ASSETS Cash and cash equivalents 2,853,933$ 2,422,500$ Escrow and building reserve 1,897,627 552,285 Certificates of deposit - 155,673 Receivables (Note 3) Grantors 2,045,186 920,989 Accounts receivable, net 1,170,936 711,123 Pledges, net 2,897,321 585,720 Prepaid expenses 200,476 57,298 Investments (Note 4)1,204,145 1,173,750 Inventory - supplies and food bank 321,827 289,686 Inventory - condominiums, federal constraints 1,264,406 323,076 Inventory - condominiums - 402,533 Other asset - housing units 494,323 486,282 Deferred loans receivable, net (Note 3)2,991,791 2,720,374 Construction in progress (Note 6)7,524,701 4,875,658 Construction in progress, federal constraints (Note 6)1,308,709 1,077,239 Property and equipment, net, federal constraints (Note 6)8,929,031 9,644,261 Property and equipment, net (Note 6)14,330,666 8,333,594 Total assets 49,435,078$ 34,732,041$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED) June 30, 2020 and 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -8- 2020 2019 LIABILITIES Accounts payable 1,742,379$ 886,266$ Accrued liabilities 374,819 331,100 Accrued vacation, sick, and paid time off 271,123 182,155 Accrued interest payable 16,605 20,067 Deposits payable 300,690 142,839 Unearned revenue (Note 7)47,717 5,028 Notes payable (Note 8)17,984,413 9,682,105 Total liabilities 20,737,746 11,249,560 NET ASSETS Without donor restrictions Undesignated 12,272,854 7,895,443 HRDC general endowment fund - board designated 5,542 5,542 Federal constrained inventory and capital assets 11,502,146 11,044,576 Total net assets without donor restrictions 23,780,542 18,945,561 With donor restrictions Purpose or time restrictions 4,752,978 4,382,317 Perpetual in nature (endowment)163,812 154,603 Total net assets with donor restrictions 4,916,790 4,536,920 Total net assets 28,697,332 23,482,481 Total liabilities and net assets 49,435,078$ 34,732,041$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENTS OF ACTIVITIES For the Years Ended June 30, 2020 and 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -9- 2020 2019 NET ASSETS WITHOUT DONOR RESTRICTIONS REVENUES Contract revenue 999,029$ 1,071,907$ Rental income 1,692,370 1,317,700 City/County/Local Government support 2,031,227 2,384,583 Sale of housing units 7,210,423 344,400 Contributions (including Fundraising): Grants: Federal 6,280,805 6,438,959 State 893,961 641,441 Private 1,278,455 305,447 Food (non-cash contributions)2,920,791 3,164,087 Pledged contributions 2,611,601 585,720 Contributions & fundraising 2,994,590 1,794,979 Net investment income 38,968 116,870 Gain on sale of property 56,249 196,401 Other 342,476 186,707 Net assets released from program restrictions 573,668 107,523 Total revenues 29,924,613 18,656,724 EXPENSES Program services: Energy 1,077,026 1,326,870 Food and nutrition 4,738,571 4,693,394 Senior citizens 496,126 526,825 Community development 8,554,815 977,268 Economic and youth development 546,348 398,509 Housing 3,442,876 2,738,398 Early childhood education 1,980,674 2,220,007 Transportation 2,542,983 2,343,930 Total program services 23,379,419 15,225,201 Supporting services: Administration 1,063,464 1,041,368 Fundraising 646,749 466,397 Total supporting services 1,710,213 1,507,765 Total expenses 25,089,632 16,732,966 Change in net assets without donor restrictions 4,834,981$ 1,923,758$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENTS OF ACTIVITIES (CONTINUED) For the Years Ended June 30, 2020 and 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -10- 2020 2019 NET ASSETS WITH DONOR RESTRICTIONS Purpose or time restricted contributions 944,329$ 2,862,207$ Perpetually restricted contributions 9,209 100,372 Net assets released from restrictions (573,668) (107,523) Change in net assets with donor restrictions 379,870 2,855,056 Total change in net assets 5,214,851 4,778,814 Net assets, beginning of year 23,482,481 18,703,667 Net assets, end of year 28,697,332$ 23,482,481$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2020 The Notes to Consolidated Financial Statements are an integral part of these statements. -11- Early Food & Senior Community Economic Childhood Total Energy Nutrition Programs Development Development Housing Education Transportation Administration Fundraising 2020 Program Expenses: Salaries 363,348$ 702,395$ 308,377$ 490,325$ 296,111$ 744,744$ 1,106,264$ 366,264$ 575,622$ 187,076$ 5,140,526$ Bad debt - - - - - 18,803 - 6,300 - - 25,103 Client assistance 277,727 - 1,000 - 5,255 747,331 19,234 106,753 522 6,688 1,164,510 Closing costs and housing fees - - - 314,592 - 2,850 - - - - 317,442 Contract services 208,996 8,459 47,972 147,641 - 158,387 126,108 833,687 59,786 265,112 1,856,148 Cost of goods sold - - - 7,112,408 - - - - - - 7,112,408 Depreciation and amortization 16,399 55,730 - 4,721 32,342 384,452 87,723 398,258 11,446 3,564 994,635 Food - 3,306,394 - - - - 76,130 - - 426 3,382,950 Fundraising - 28,538 3,903 90 821 2,317 - 64 10 12,349 48,092 Insurance 13,353 24,862 4,134 34,666 6,066 38,638 22,196 97,725 4,354 1,364 247,358 Interest - 10,744 - (1,553) 20,959 260,773 37,982 - 16,313 - 345,218 Legal and audit - 220 - 5,017 - 4,785 290 135 44,658 - 55,105 Loans forgiven - - - 51,840 - - - - - - 51,840 Office costs 10,106 25,195 11,820 32,901 5,494 37,627 27,487 28,106 40,327 21,054 240,117 Other 291 10,630 832 80,876 4,661 14,430 5,438 614 39,171 1,858 158,801 Outreach and marketing 3,362 9,055 208 690 3,743 3,071 418 68,997 7,681 19,302 116,527 Payroll taxes and benefits 101,466 190,667 76,144 142,988 90,312 186,258 331,008 107,251 164,856 55,704 1,446,654 Repairs and maintenance 3,218 12,652 - 1,013 2,975 136,835 6,258 236,853 20,421 - 420,225 Space and occupancy costs 28,021 104,748 27,112 95,150 33,700 448,248 73,346 58,561 (38,068) 20,901 851,719 Subgrants - 187,976 - 6,324 - - - - - - 194,300 Supplies 30,221 39,502 7,669 7,487 8,839 229,465 39,086 38,316 108,138 41,674 550,397 Trainee wages and benefits - - - - 24,188 - - - - - 24,188 Training 3,336 6,580 3,585 23,810 - 17,372 15,451 785 5,819 3,766 80,504 Travel and transportation 17,182 14,224 3,370 3,829 10,882 6,490 6,255 194,314 2,408 5,911 264,865 Total expenses 1,077,026$ 4,738,571$ 496,126$ 8,554,815$ 546,348$ 3,442,876$ 1,980,674$ 2,542,983$ 1,063,464$ 646,749$ 25,089,632$ 4.3%18.9%2.0%34.1%2.2%13.7%7.9%10.1%4.2%2.6%100.0% Program Supporting HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENT OF FUNCTIONAL EXPENSES For the Year Ended June 30, 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -12- Early Food &Senior Community Economic Childhood Total Energy Nutrition Programs Development Development Housing Education Transportation Administration Fundraising 2019 Program Expenses: Salaries 356,617$ 643,366$ 297,047$ 323,588$ 213,952$ 646,142$ 1,177,463$ 385,564$ 530,392$ 133,260$ 4,707,391$ Bad debt - - - - - 30,179 - - - - 30,179 Client assistance 363,014 - - 1,687 6,007 585,909 25,428 1,161 6,261 15,539 1,005,006 Closing costs and housing fees - - - - - 2,628 - - - - 2,628 Contract services 404,887 25,315 84,032 52,545 - 116,982 201,387 777,738 21,587 146,294 1,830,767 Cost of goods sold - - - 297,336 5,744 - - - - - 303,080 Depreciation and amortization 16,375 56,500 - 4,719 10,504 286,786 113,792 405,609 12,103 3,564 909,952 Food - 3,536,328 - - - - 82,132 - - - 3,618,460 Fundraising - 22,101 4,366 92 353 3,928 19 115 - 8,819 39,793 Insurance 10,826 26,352 5,009 11,033 3,293 20,958 22,639 76,572 3,758 773 181,213 Interest - 10,846 - 11,768 3,280 92,379 42,223 - 18,109 - 178,605 Legal and audit - 542 - 1,638 792 2,555 - 347 44,380 - 50,254 Loans forgiven - - - 52,319 - - - - - - 52,319 Office costs 10,067 20,411 16,945 33,890 6,165 39,329 25,837 30,809 58,729 10,448 252,630 Other 1,927 9,109 1,528 1,736 2,808 6,161 4,496 22,393 8,038 2,054 60,250 Outreach and marketing 1,855 10,100 837 3,875 6,324 5,525 3,361 62,805 4,280 44,888 143,850 Payroll taxes and benefits 83,271 144,620 62,925 80,552 51,965 157,240 295,164 86,589 115,138 32,185 1,109,649 Repairs and maintenance 607 11,934 - 5,986 863 349,191 19,638 244,665 34,477 - 667,361 Space and occupancy costs 28,360 99,457 20,538 43,396 29,385 325,461 130,093 31,399 100,732 16,200 825,021 Subgrants - - - 9,087 - - - - - - 9,087 Supplies 19,187 55,507 17,621 16,611 13,582 35,154 34,928 11,764 65,467 42,443 312,264 Trainee wages and benefits - - - - 30,079 - - - - - 30,079 Training 3,899 6,229 12,543 16,800 2,797 17,900 28,852 7,593 15,383 75 112,071 Travel and transportation 25,978 14,677 3,434 8,610 10,616 13,991 12,555 198,807 2,534 9,855 301,057 Total expenses 1,326,870$ 4,693,394$ 526,825$ 977,268$ 398,509$ 2,738,398$ 2,220,007$ 2,343,930$ 1,041,368$ 466,397$ 16,732,966$ 7.9%28.0%3.1%5.8%2.4%16.4%13.3%14.0%6.2%2.8%100.00% Program Supporting HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended June 30, 2020 and 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -13- 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from grantors 7,371,713$ 7,253,183$ Cash received from contracts 421,141 1,443,368 Cash received from rentals 1,850,221 1,398,744 Cash received from City/County/Local Government 2,031,227 2,384,583 Cash received from sale of housing units 7,210,423 344,400 Cash received from contributions 4,248,128 4,657,186 Cash received from interest and dividends 40,315 116,673 Cash received from other activities 342,476 186,707 Cash paid to employees (6,478,681) (5,812,675) Cash paid to suppliers (5,706,887) (5,615,048) Cash paid for direct assistance to clients (1,164,510) (1,005,006) Cash paid for other operational expenses 753,792 (52,279) Cash paid for fundraising activities (48,092) (39,793) Interest paid (348,680) (158,538) Net cash flows from operating activities 10,522,586 5,101,505 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of capital assets (3,087,495) (10,687,655) Investment purchases (31,742) (210,000) Proceeds from sales of investments 155,673 - Principal loan receivable payments received 259,441 1,141,734 Principal loan receivable advances (582,298) (112,600) Net cash flows from investing activities (3,286,421) (9,868,521) CASH FLOWS FROM FINANCING ACTIVITIES Contributions to endowment 9,209 100,372 Proceeds from long-term debt - 5,534,893 Proceeds from payroll protection program (PPP) loan 407,000 - Cash paid on notes payable (5,875,599) (1,485,869) Investment in partnership - 312,083 Net cash flows from financing activities (5,459,390) 4,461,479 Net change in cash and cash equivalents 1,776,775 (305,537) Cash and cash equivalents, beginning of year 2,974,785 3,280,322 Cash and cash equivalents, end of year 4,751,560$ 2,974,785$ Reconciliation to Consolidated Statements of Financial Position Cash and cash equivalents 2,853,933$ 2,422,500$ Escrow and building reserve 1,897,627 552,285 4,751,560$ 2,974,785$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the Years Ended June 30, 2020 and 2019 The Notes to Consolidated Financial Statements are an integral part of these statements. -14- 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets 5,214,851$ 4,778,814$ Adjustments to reconcile change in net assets to net cash flows from operating activities: Depreciation and amortization 994,635 909,952 Bad debt, allowances, and loans forgiven 26,737 7,539 Contributions to Endowment (9,209) (100,372) Unrealized loss (gain) on investments 1,347 (197) Gain on sale of property and equipment and homes (56,249) (366,401) Proceeds from sale of housing units and condomimiums 7,210,423 344,400 Change in operating assets and liabilities: Inventory (32,141) (331,065) Grants receivable (1,124,197) (114,945) Accounts receivable (434,710) 348,541 Pledges receivable (2,311,601) (585,720) Prepaid expenses (143,178) 22,920 Accounts payable 856,113 70,203 Accrued liabilities 43,719 30,042 Vacation payable 88,968 4,402 Accrued interest payable (3,462) 20,067 Rent deposits 157,851 81,044 Unearned revenue 42,689 (17,719) Net cash flows from operating activities 10,522,586$ 5,101,505$ SUPPLEMENTAL SCHEDULE OF NON-CASH OPERATING ACTIVITIES Contributions of food 2,920,791$ 3,164,087$ SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES Fixed assets and inventory purchased or constructed with debt 13,770,507$ 1,900,797$ Fixed assets acquired through Miles Limited Partnership -$ 1,850,061$ SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES Debt acquired through Miles Limited Partnership -$ 1,900,797$ SUPPLEMENTAL CASH FLOW INFORMATION Interest paid (includes capitalized interest)915,798$ 683,666$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2020 and 2019 -15- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the assets, liabilities, net assets, and financial activities of Human Resource Development Council of District IX, Inc. and its wholly owned subsidiaries, the Home Corporation, The Miles Building, Inc., Summit Apartments, Inc., Sherwood Inn Apartments, Inc., Darlinton Apartments, Inc., Big Sky Villas Rural Partners, LLC, and Miles Limited Partnership. All significant inter-company transactions and balances have been eliminated. Subsidiary elimination worksheets are included as supplementary schedules on pages 57 to 61. Organization Human Resource Development Council of District IX, Inc. (HRDC) is a private not-for-profit corporation under Internal Revenue Code Section 501(c)(3). HRDC is located in Bozeman, Montana. HRDC is a non-profit community action agency, dedicated to strengthening community and advancing the quality of people’s lives. HRDC works to achieve this by developing the resources (talent and capital) to help people of all ages and situations confront and overcome obstacles so that they can improve their lives. HRDC focuses on seven strategic challenges and operates multiple programs to address these pressing human needs. HRDC serves the community in these seven areas: Food and Nutrition, Housing and Homelessness, Child and Youth Development, Senior Empowerment, Community Transportation, Home Heating, Efficiency, and Safety, and Community (Economic) Development. Through HRDC programs, sustainable results are fostered through practical, comprehensive approaches to social and economic challenges. Services are delivered statewide with an emphasis in Gallatin, Park, and Meagher Counties. The Board of Directors is composed of individuals from the private sector, public sector, and representatives of the low-income sector. Colorado Apartments,West Edge Condominiums, Cottages at Menicucci Square, and Boulevard Apartments are HRDC owned properties which are accounted for separately from HRDC’s programs. Financial data has been reported accordingly in the supplementary consolidating schedules on pages 57 to 61. The Home Corporation is a private not-for-profit title holding company under Internal Revenue Code Section 501(c)(2). The Home Corporation was formed as a single asset entity in order to facilitate financing with the Montana Board of Housing (MBOH) for the West Babcock Apartment Affordable Housing project. The Miles Building, Inc. is defined as a 501(c)(3) Supporting Organization under the Internal Revenue Code. The Miles Building, Inc. was formed as a single asset entity to facilitate financing with the Montana Board of Housing and U.S. Department of Housing and Urban Development for the purchase of the Miles Building Apartments in Livingston, Montana in May,1999. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -16- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Organization (Continued) The Miles Building was purchased to preserve 40 units of existing low-income housing stock in the Livingston community. In December, 2001, the Miles Building, Inc. transferred all of its assets and liabilities to the Miles Limited Partnership in order to facilitate the sale of low income housing tax credits. The Miles Building, Inc. serves as the non-profit managing general partner of the Miles Limited Partnership. The Miles Building, Inc. owns 0.01 percent of the Miles Limited Partnership. During the year ended June 30, 2019, Miles 2017, LLC (a new subsidiary) was created and purchased the remaining .99 percent of the Miles Limited Partnership. The Darlinton Apartments, Inc. is defined as a 501(c)(3) Supporting Organization under the Internal Revenue Code. The Darlinton Apartments, Inc. was formed to participate in a statewide initiative to preserve low-income housing in Montana. The Darlinton Apartments, Inc. is the Non-Profit General Partner in a Limited Partnership which owns the 100-unit Darlinton Apartments in Bozeman, Montana. The Sherwood Inn Apartments, Inc. is defined as a 501(c)(3) Supporting Organization under the Internal Revenue Code. The HRDC formed the Sherwood Inn Apartments, Inc. a wholly owned subsidiary to act as a single asset entity to hold and operate the 49-unit low income Apartment Complex. In May, 2001, the HRDC signed a memorandum of understanding and a 24 month option for the purchase of the Sherwood Inn Apartments in Livingston, Montana. The purchase was completed on February 1, 2004 for a purchase price of $1,375,000. The Sherwood Inn Apartments, Inc. purchase financing included the following: the seller’s donation of $209,922; a private mortgage for $475,139; a Home Investment Partnership Grant of $371,000; an existing HUD mortgage on the property (the 1st HUD mortgage) in the amount of $444,268 which was assigned by HUD to HRDC for future collection; and another existing HUD mortgage on the property (the 2nd HUD mortgage) in the amount of $127,023 which was forgiven by HUD. Neither HUD mortgage loan remained FHA insured; therefore the HUD loan regulatory agreements were not assumed by the purchaser. The Summit Apartments, Inc. is defined as a 501(c) (3) Supporting Organization under the Internal Revenue Code. Summit Apartments, Inc. was formed to facilitate the transfer of physical assets of the Summit Place Apartments in Livingston, Montana, through the U.S. Department of Housing and Urban Development. The transfer of physical assets of the seven-unit low-income apartment complex was completed in September,2006 through the assumption of the HUD deferred mortgage on the property in the amount of $438,100 and related regulatory and use agreements until the maturity date of the note in January,2037. Big Sky Villas Rural Partners, LLC (a limited liability company) was formed to purchase and rehabilitate the Big Sky Villas Apartments in Belgrade, Montana. The Big Sky Villas Apartment Complex was purchased to preserve 24 units of existing low-income housing stock in the Belgrade community. Big Sky Villas Rural Partners, LLC serves as the managing general partner of West Jefferson Partners, LLP and owns 0.01 percent of West Jefferson Partners, LLP. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -17- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting The accompanying consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America (GAAP), as codified by the Financial Accounting Standards Board (FASB). New Accounting Pronouncements On July 1, 2019, HRDC adopted the following Accounting Standards Updates (ASUs): ASU No. 2014-09, Revenue from Contracts with Customers including the subsequent revisions (collectively referred to as Topic 606). This accounting standard was issued to clarify the principles of recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards (IFRS). The Council adopted Topic 606 using the modified retrospective method. Implementation of the standard did not have a material effect on HRDC’s methodology for the recognition of revenue, nor required any adjustment of activity reported in a prior period. ASU 2018-08, Not-for-Profit Entities (Topic 958) – Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. This update provides guidance on (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transactions) or as exchange (reciprocal) transactions subject to other guidance and (2) determining whether a contribution in conditional. The ASU has been applied retrospectively to all periods presented. Implementation of the standard has changed the way HRDC accounts for Federal grants received. HRDC previously accounted for Federal awards as exchange (reciprocal) transactions and revenue was recognized as reimbursable expenses were incurred. HRDC now accounts for Federal grants as conditional grant contributions. Revenue is recognized as the condition is met, incurring the qualifying expense under Uniform Guidance. Consequently, revenue is recognized at the same point under both accounting policies. Thus, implementation of the standard required no adjustment of activity reported in the prior period. ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The main objective of this accounting standard was to enhance the reporting model for financial instruments and to provide users of the financial statements with more decision-useful information. The standard was implemented on a retrospective basis. Implementation of the standard had no effect on HRDC’s existing policies, nor required any adjustment of activity reported in a prior period. ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash. The update addresses the classification and presentation of changes in restricted cash on the statement of cash flows. The ASU has been applied retrospectively to all periods presented, which had no effect on the total assets, liabilities or net assets previously stated. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -18- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) New Accounting Pronouncements (Continued) ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This update provides clarify for certain aspects for ASU 2016-01. The standard was implemented on a retrospective basis. Implementation of the standard had no effect on HRDC’s existing policies, nor required any adjustment of activity reported in a prior period. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The objective of the update is to reduce the diversity in practice over certain cash flow issues. HRDC adopted this update using a retrospective transition method to each period presented. Accordingly, the information is presented as if the accounting policy had been adopted in the prior year. HRDC has elected to report distributions received from equity method investees using the cumulative earnings approach where distributions received are considered returns on investment and classified as cash inflows from operating activities. ASU 2018-13, Disclosure Framework –Changes to the Disclosure Requirements for Fair Value Measurement. The main objective of the update is to improve the effectiveness of disclosures in the notes to the financial statements. HRDC adopted the ASU on a retrospective basis to all periods presented, which had no effect on the total assets, liabilities or net assets previously presented. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash in banks and on hand, and highly liquid debt instruments with an original maturity of three months or less. HRDC has restricted cash accounts related to reserves and escrows for several of their properties. Such amounts are required to be held in separate accounts and require the amounts to be expended for specific purposes, such as repairs and maintenance of the properties. HRDC participates in a Master Sweep Repurchase Agreement (Agreement) through a reputable financial institution. Daily, the financial institution sells to HRDC a unified fractional interest in the principal amount of government securities. The securities must be direct obligations of, or guaranteed by, the United States, its agencies, or instrumentalities. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -19- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents (Continued) Market risks associated with this agreement are similar to market risks of any government security; the securities have a current market value equal to or greater than the principal amount of the transactions. The funds invested in the Agreement are not considered deposits and are not insured by the Federal Deposit Insurance Corporation; however, the funds are collateralized by the government securities purchased with those funds. At June 30, 2020 and 2019, HRDC has no uninsured balances. All other accounts are either fully insured by the Federal Deposit Insurance Corporation or collateralized. Although management has expressed no intention to do so, HRDC may terminate the Agreement at any time. Certificates of Deposit HRDC had one certificate of deposit (CD) at June 30, 2019. The CD term was six months maturing in July 2019,with an interest rate of 0.60%. The CD is stated at the principal balance. Investments and Investment Income Investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair value in the consolidated statement of financial position with the unrealized gains (losses) in the consolidated statement of activities. Gains and losses on investments and other assets are reported as unrestricted net assets unless their use is restricted by explicit donor stipulation. Promises to Give and Other Receivables Unconditional promises to give (pledges receivable) are recognized at fair value in the period received. Unconditional promises to give that will be collected beyond one year are reported at the present value of the anticipated cash flows. HRDC has elected under GAAP to subsequently report pledges receivable at fair value by evaluating and adjusting the initial discount rate. Management elected the fair value method to improve valuation of pledges received in current and previous years. HRDC has discounted the pledge receivable based on the present value discount for a multi-year pledge. In subsequent years, amortization of the discounts is included in contributions in the statement of activities. Management has determined that an allowance for uncollectible amounts to be $-0-at June 30, 2020 and 2019. Conditional promises to give are recognized when the conditions on which they depend are substantially met. At June 30, 2020 and 2019, there were no conditional promises to give. HRDC has an additional $3,512,858 and $2,383,481 in unearned grant commitments as of June 30, 2020 and 2019, respectively. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -20- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Inventories Inventories include 14 manufactured housing units at June 30, 2020 and 2019. HRDC purchased 75 manufactured housing units in July and September 2016 and had sold 43 of these units and transferred 18 of these units to property and equipment to be used for the Cottages at Menicucci Square during the year ended June 30, 2019. These housing units are planned as affordable housing units to be placed in a variety of developments in HRDC’s service area communities in Gallatin and Park Counties. The total cost of the 14 unsold manufactured housing units is $494,323 and $486,282 at June 30, 2020 and 2019, respectively. Inventories include 3 unsold condominium units which are carried at the lower of cost or net realizable value amounting to $323,076 for the years ended June 30, 2020 and 2019.HRDC purchased 23 units and constructed 60 units of an affordable housing development, West Edge Condominiums, during fiscal years 2010-2014 under the Neighborhood Stabilization Program (NSP). Through June 30, 2020 and 2019, HRDC had cumulatively sold 80 of the 83, condominium units, at an average sale price of $115,000 and cost basis of $138,000. The remaining three units will be sold upon the current occupants’ decision to vacate the property under the terms of the original lease agreements assumed at the time of acquisition in 2010. During the year ended June 30, 2019, 2 humble homes were constructed, for which 1 unit was sold during the year. The remaining humble home carried at the lower of cost or net realizable value amounting to $137,869 was sold during the year ended June 30, 2020. Inventories include a condo that was purchased during the year ended June 30, 2019. The condo is carried at the lower of cost or net realizable value amounting to $264,664. The condo was sold during the year ending June 30, 2020. During the year ended June 30, 2020, 12 affordable townhomes were completed, for which 9 units were sold during the year. The remaining affordable townhomes are carried at the lower of cost or net realizable value amounting to $941,330. Supplies and food bank inventories contain repair parts used in the weatherization program ($1,214 and $4,113 on June 30, 2020 and 2019, respectively) and the food inventory at the Gallatin Valley Food Bank, Big Sky Community Food Bank and Headwaters Area Food Bank ($320,613 and $285,573 on June 30, 2020 and 2019, respectively). All inventories are recorded at the lower of cost or net realizable value. Property and Equipment HRDC capitalizes equipment with a purchase price of at least $5,000 or lower amount if required by grantors, and an expected life of at least three years. Property and equipment are carried at cost. Depreciation is allocated between program support and supporting services. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -21- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Equipment (Continued) Depreciation is computed on a straight-line basis over the following estimated useful lives: Furniture and Equipment 3 to 10 years Vehicles 7 to 10 years Land Improvements 20 years Building and Improvements 20 to 30 years Software 3 years Depreciation expense for the years ended June 30, 2020 and 2019 was $994,635 and $909,952, respectively. Vacation/Paid Time Off and Sick Leave HRDC charges the individual programs for vacation and paid time off (PTO) leave earned by employees. These monies are deposited in the Vacation Leave Fund. When an employee uses vacation benefits, the vacation time is charged against this fund. As of June 30, 2020 and 2019, the Vacation Leave/PTO Fund had a liability balance of $251,953 and $162,157, respectively. HRDC pays terminating employees one quarter of the value of their unused sick leave.On June 30, 2020 and 2019, the liability for one quarter unused sick leave was $19,170 and $19,998 including related payroll taxes. The other three quarters of sick leave expenses are recorded when paid. Classification of Net Assets The Organization reports information regarding its financial position and activities according to two classes of net assets, as follows: Net assets without donor restrictions consist of investments and amounts that are available for use in carrying out the mission of HRDC, and include those expendable resources that have been designated by the Board of Directors for special use by the HRDC. Net assets with donor restrictions represent those amounts that are subject to donor or certain grantor imposed stipulations. Some donor or grantor restrictions are temporary in nature such as those that will be met by passage of time or other events specified by the donor or grantor. Other donor imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor-imposed restrictions are released when a restriction expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled or both. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -22- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Classification of Net Assets (Continued) A summary of net assets restricted for purpose or time at June 30 is as follows: 2020 2019 Bridger View Redevelopment - land 1,600,000$ 1,600,000$ Griffin Site Development 1,411,626 597,920 Galavan Transportation operations 1,057,568 1,043,780 Big Sky Community Food Bank 250,848 256,074 Road to Home homeownership center 213,087 187,635 Bridger View Redevelopment - 341,952 Healthy Kids Pack Food program 63,871 53,871 LISC Citi Bridges 45,716 - Title 3 Home Care 37,431 27,039 Partnership for Permanent Supportive Housing 32,662 45,052 Sunset Park Hope Relocation 21,920 - Fork and Spoon 10,568 7,213 School Food Pantry 5,045 5,044 National Council on Aging: SNAP 2,636 14,198 Big Sky Community Land Trust - 183,539 Livingston Warming Center - 11,000 GVFB Story Mill Learning Garden - 8,000 Total purpose or time restricted 4,752,978$ 4,382,317$ A summary of net assets perpetual in nature at June 30 is as follows: 2020 2019 Warming Center 76,302$ 76,302$ Gallatin Valley Food Bank 76,301 76,301 Greatest Needs of HRDC 11,209 2,000 Total perpetually restricted (endowment)163,812$ 154,603$ Contributed Support HRDC recognizes all unconditional gifts and promises to give in the period notified. Contributed support is reported as net assets with or without donor restrictions depending upon the existence of donor stipulations. Purpose or time restricted contributions whose restrictions have been fulfilled in the current year are reported as net assets without donor restriction. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -23- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue Recognition Contract revenues are recognized as performance obligations are met on the contract based on input and output methods, dependent on the individual contract. This may include the delivery of goods or services, as costs are incurred to deliver services, or upon completion of events. Contract revenue included in the financial statements at June 30, 2020 and 2019 are recognized monthly over the contract period. This revenue includes property management income and public transportation contracted services. Contributed service revenue results when donated services create or enhance non-financial assets or when they require specialized skills provided by people possessing those skills that would typically be purchased if not provided by donation. Contributed goods are valued at their estimated fair value at the date of contribution. Professional services donated to HRDC that are included in the consolidated financial statements as of June 30, 2020 and 2019 total $105,972 and $121,492, respectively. Additional non-cash donations of clothing, volunteer time, and miscellaneous items have also been contributed to HRDC that have not been included in these consolidated financial statements because they do not meet the requirements for recognition or are considered immaterial for inclusion in the financial statements. Advertising HRDC expenses advertising costs as incurred. Total advertising and outreach costs were $105,972 and $143,870 for the years ended June 30, 2020 and 2019, respectively. Income Taxes HRDC is exempt from income taxes under §501(c)(3) of the Internal Revenue Code. Accordingly, the increase in net assets is generally not subject to taxation. No provision for income tax has been recorded in these financial statements because the HRDC believes it had no income unrelated to its tax-exempt purpose in 2020 or 2019. Reclassifications Certain reclassifications have been made to the June 30, 2019 financial statements to conform to the June 30, 2020 presentation. Such reclassifications had no effect on previously reported amounts. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -24- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Description of the HRDCs’ Program Activities and Expense Classification Separate accounts are maintained for each fund; however, in the accompanying consolidated financial statements, funds that have similar characteristics have been combined into activity groups. The primary activity groups and their related purposes are summarized as follows: Energy Activities HRDC’s Energy Initiative combines emergency assistance, heat bill supplements, and home energy savings measures to offset heating costs for limited income households. Food & Nutrition Activities HRDC’s Nutrition Initiatives work to improve food security across the Gallatin Valley. Through the Gallatin Valley, Headwaters Area, and Big Sky Community Food Banks, emergency food assistance is provided in the form of emergency food boxes. Additionally, the Fork & Spoon Homestyle Kitchen provides a ‘pay what you can’ model for evening dinner service six nights a week, the KidsPack Program provides supplemental weekend food to children experiencing hunger, the Summer Lunch Program provides free lunchtime meals to children during the summer months, and the Senior Grocery Program provides supplemental food to low income seniors. Senior Programs Activities HRDC’s Senior Empowerment Initiative addresses quality of life and independence in the home for many area seniors. With door to door transportation to medical and other appointments, meaningful volunteer opportunities, supplemental food, and in-home health care, HRDC works to provide each and every senior with wrap-around services that enable them to maintain independence and be engaged with the community. Community Development Activities HRDC’s Community Development Initiative provides innovative and creative solutions to identified community needs. The goal is to build and sustain healthy communities through the construction of housing and community facilities and the development of community programs that educate and support families and individuals. Economic Development Activities  HRDC’s Economic Development Initiatives work to provide free tax filing assistance, job readiness training and placement for the area’s at risk youth populations. Housing Activities HRDC’s Housing initiative works across all levels of housing security, from homelessness to homeownership. HRDC’s Housing programs work to ensure that every member of the community can afford to have and preserve a place to call home, whether it is in the form of emergency shelter, transitional housing, affordable rentals, rental subsidies, down payment assistance, or home repairs. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -25- NOTE 1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Description of the HRDCs’ Program Activities and Expense Classification (Continued) Early Childhood Education Activities HRDC’s Early Childhood Care and Education Initiative provides for the healthy development of children and strengthening families through education, health, nutrition, mental health, and disability services. Transportation Activities HRDC’s Public Transportation Initiative, Streamline, provides fare free public transit serving the communities of Belgrade, Bozeman, and Livingston. HRDC’s Para Transit Initiative, Galavan, serves the senior and disabled residents with door to door transportation to medical and other appointments. Administrative Activities Consists of funds that are used for administering HRDC. Fundraising Activities These activities provide low-cost supplies and services for special events and activities designed to create public awareness and support for community based activities operated by HRDC. Cost Allocation HRDC allocates costs that can be identified specifically with a particular final cost objective directly to the individual program benefiting. Joint costs are allocated directly to individual programs using a base most appropriate to the particular cost being prorated. HRDC utilizes following bases for allocated costs: Occupancy costs square footage* Telephone number of telephones* Copies, print, postage actual usage Agency wide audit, fiscal office number of accounting transactions** Common supplies, general number of FTEs** liability insurance, human resources office, receptionist, executive, computer network * For staffing in multiple HRDC programs, costs are further allocated in a second tier based on hours work by program. ** Time which is easily and specifically identifiable to a particular program may be alternatively charged as a Specific Direct Cost via a Time Sheet. In no case is a cost charged both as a specific direct cost and as an allocated cost. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -26- NOTE 2.LIQUIDITY AND AVAILABILITY Financial assets available for general expenditure include only those without donor restrictions, excluding board designated net assets or other restrictions limiting their use within one year of the statement of financial position date. General expenditures include those listed with the management and general classification of the statement of activities. The following financial assets are expected to be available to support HRDC in the years ending June 30, 2021 and 2020: 2020 2019 Cash and cash equivalents 2,853,933$ 2,422,500$ Escrow and building reserve 1,897,627 552,285 Certificates of deposit - 155,673 Receivables 6,113,443 2,217,832 Prepaid expenses 200,476 57,298 Investments 1,204,145 1,173,750 Inventories 1,586,233 1,015,295 Other asset - housing units 494,323 486,282 Deferred loans receivable, net 2,991,791 2,720,374 Construction in progress 8,833,410 5,952,897 Property and equipment, net 23,259,697 17,977,855 Total assets 49,435,078 34,732,041 Escrow and building reserve (1,897,627) (552,285) Receivables (grantors)(2,045,186) (920,989) Receivables (pledges)(2,897,321) (585,720) Prepaid expenses (200,476) (57,298) Inventories (1,586,233) (1,015,295) Other asset - manufactured homes (494,323) (486,282) Deferred loans receivable, net (2,991,791) (2,720,374) Construction in progress (8,833,410) (5,952,897) Property and equipment, net (23,259,697) (17,977,855) Financial assets 5,229,014 4,463,046 Board designated (5,542) (5,542) Donor restricted net assets*(3,316,790) (2,936,920) Cash committed to HRDC projects (799,570) (1,030,576) Financial assets available within 1 year 1,107,112$ 490,008$ *Amount excludes land recorded at $1,600,000 that is donor restricted and removed from property and equipment, net, above. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -27- NOTE 2.LIQUIDITY AND AVAILABILITY (CONTINUED) As part of HRDC’s liquidity management plan, HRDC has a policy to structure its financial assets to be available as general expenditures, liabilities, and/or obligations as they become due. Escrows and building reserves and grants receivable are excluded from financial assets available for general as they are generally restricted for specific grant purposes. During the course of the year, HRDC has numerous capital projects in process, in which cash committed has been excluded from financial assets. Schedules of unrestricted corporate funds are included on pages 68 and 69 in the supplemental information. NOTE 3.RECEIVABLES Grants Receivable represents the balance of grant funds earned but not yet received in cash. Most grants allow monthly draw-downs of cash which provide operating capital for program operation. Accounts Receivable represent amounts owing to HRDC from program service contracts stated at unpaid balances. Contracts call for a fixed fee for service and are primarily comprised of property management and other service contracts. Delinquent accounts are reviewed on an annual basis, when it is decided whether to write off an account. These amounts are shown net of a provision for bad debts of $21,435 and $39,745 as of June 30, 2020 and 2019, respectively. Pledges Receivable represents an unconditional promise to give by a donor. Pledges receivable consist of the following: 2020 2019 Receivable in one year or less 1,447,442$ 300,000$ Receivable in one to five years 1,559,379 300,000 3,006,821 600,000 Less discount (109,500) (14,280) Net unconditional promises to give 2,897,321$ 585,720$ The rates used for the pledge discounts range from .7835% -.9524%. Deferred Loans Receivable represents amounts advanced by BSV Rural Partners, LLC to West Jefferson Partners, LLLP for the rehabilitation of the Big Sky Villas Apartments, down payment assistance loans through the HRDC Homeownership Center, and second mortgage loans through the Neighborhood Stabilization Program. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -28- NOTE 3.RECEIVABLES (CONTINUED) Deferred Loans Receivable (Continued) The following table presents deferred loans receivable from related parties at June 30, 2020 and 2019: BSV Rural Partners, LLC HOME Loan 832,000$ Date of loan December 14, 2016 Maturity date December 14, 2046 Interest rate 1.00% Terms Collateral Secured by revenues of West Jefferson Partners, LLLP Loan deferred until available cash flow after all other debts and HRDC’s Homeownership Center provides financial assistance to first-time homebuyers in the form of a no-interest, deferred payment, equity-share mortgage loan to help the household complete down payment needs or fill the gap between the total purchase price and the maximum loan amount offered by the lender. Repayments of the loans are required upon satisfaction of the primary mortgage loan, refinance, or sale of the home and property. HRDC shares in the equity of the home and the total amount due to HRDC upon repayment conditions is based upon the appraised value of the home. As of June 30, 2020, HRDC had thirty-one outstanding down payment assistance loans totaling $506,328, offset by a provision for loan losses of $105,699.As of June 30, 2019, HRDC had thirty- four outstanding down payment assistance loans totaling $554,490, offset by a provision for loan losses of $91,648. As of June 30, 2020 and 2019, HRDC had forty-one and forty-five small housing assistance loans to clients totaling $22,494 and $24,523, respectively. HRDC West Edge Condominiums development provided financial assistance through the Neighborhood Stabilization Program (NSP) to acquire twenty-three condominiums in 2010 and construct sixty additional affordable condominium units through 2014. HRDC sold the condominiums to income-eligible buyers with a maximum of 50% of the mortgage amount being financed through NSP funds in the form of no-interest, deferred payment, second mortgage loans to help fill the gap between the total purchase price and the maximum loan amount offered by the primary lender. Repayment of the second mortgage is required upon the sale of the residence, cash- out refinance, full payment of the first mortgage, or if the condominium is no longer used as the primary residence. Upon repayment, an appreciation share formula is applied in lieu of interest to determine the amount of repayment. As of June 30, 2020, there were forty-one second mortgage loans outstanding in the amount of $1,282,918, offset by a provision for loan losses of $77,000. As of June 30, 2019, there were forty-one second mortgage loans outstanding in the amount of $1,468,009, offset by a provision for loan losses of $67,000.The provision for loan losses is based on approximately six percent of the amount loaned in the final phase of the program. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -29- NOTE 3.RECEIVABLES (CONTINUED) Deferred Loans Receivable (Continued) HRDC Willow Springs Townhomes development in Bozeman is an initiative to increase homeownership among low to moderate income households. When completed, the development project will consist of 24 townhome units. Land and infrastructure for the Willow Springs townhomes was partially funded with program revenue from a previous federal Neighborhood Stabilization (NSP) program grant, to be maintained permanently affordable via a Community Land Trust. Construction of the townhomes is being funded through conventional bank construction loan financing, as well as grant assistance from the City of Bozeman. Funding from NSP and the City of Bozeman requires that eligible buyer households earn no more than 120% of the Area Median Income, have no more than $70,000 in total family assets, contribute $1,500 towards the purchase, and complete structured homeownership education. Upon resale of a townhome, the owner’s equity share is limited to a maximum of 2% per year of ownership, to maintain permanent affordability of the townhomes for future eligible buyers. As of June 30, 2020, twelve townhome units had been completed and nine townhome sales had been closed. Seven of these townhome buyers received down payment assistance loans from HRDC ranging from $10,000 to $15,000 each, with deferred payment terms. Repayment of these loans is deferred until the townhome is sold or refinanced. As of June 30, 2020, there were seven loans outstanding in the total amount of $75,000. HRDC Meadowview Condominiums development in Big Sky is an initiative to increase homeownership among low to moderate income households participating in the local Big Sky workforce. When completed, the development project will consist of 52 condominium units. Land and infrastructure for the Big Sky Meadowview condominiums was partially funded through grant assistance from the Big Sky Resort Area District, to be maintained permanently affordable via a Community Land Trust. Construction of the condominiums is being funded through conventional bank construction loan financing. Upon resale of a condominium, the owner’s equity share is limited, to maintain permanent affordability of the condominiums for future eligible buyers in Big Sky. As of June 30, 2020, eighteen condominium units had been completed and sold to eligible homebuyers participating in the local Big Sky workforce. Ten of these condominium buyers received down payment assistance loans from HRDC ranging from $30,000 to $55,000 each, with deferred payment terms. Repayment of these loans is deferred until the condominium is sold or refinanced. As of June 30, 2020, there were ten loans outstanding in the total amount of $455,750. Due to inherent uncertainties in the estimate of a provision for loan losses, it is reasonably possible this estimate could change in the near term. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -30- NOTE 3.RECEIVABLES (CONTINUED) Deferred Loans Receivable (Continued) A summary of loans receivable and their related allowances at June 30, 2020 and 2019, is as follows: Allowance for Allowance for Loan Doubtful Loan Doubtful Receivable Accounts Receivable Accounts 2020 2020 2019 2019 Affordable Housing Road to Home down-payment assistance 506,328$ 105,699$ 554,490$ 91,648$ West Edge condo loans 1,282,918 77,000 1,468,009 67,000 Rental housing assistance loans 22,494 - 24,523 - Big Sky Meadowview condo loans 455,750 - - - Willow Spring condo loans 75,000 - - - Intercompany Loans Sherwood Inn Apartments 442,801 - 483,160 - West Babcock Apartments 167,138 - 172,391 - Miles LP 815,649 - 821,118 - Related Party Commercial West Jefferson Partners, LLLP 832,000 - 832,000 - Total 4,600,078 182,699$ 4,355,691 158,648$ Intercompany elimination (1,425,588) (1,476,669) Less: allowance (182,699) (158,648) Deferred loans receivable, net 2,991,791$ 2,720,374$ An analysis of credit exposure by internally assigned grade at June 30, 2020 and 2019, is as follows: 2020 2019 2020 2019 Pass - performing loans 2,342,490$ 2,047,022$ 832,000$ 832,000$ Pass with collateral deficiencies - - - - Non-performing, collateralized - - - - Non-performing, collateral deficiencies - - - - Total 2,342,490$ 2,047,022$ 832,000$ 832,000$ Residential Commercial Related Party An analysis of past due financing receivables as of June 30, 2020 and 2019, is as follows: 2020 2019 2020 2019 30 - 59 days past due -$ -$ -$ -$ 60 - 89 days past due - - - - Greater than 90 days past due - - - - Total past due - - - - Current financing receivables 2,342,490 2,047,022 832,000 832,000 Total financing receivables 2,342,490$ 2,047,022$ 832,000$ 832,000$ Related Party Residential Commercial HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -31- NOTE 3.RECEIVABLES (CONTINUED) HRDC recognizes interest income on loans receivable on the accrual basis. Loan fees and costs are recognized as income in the period the fees or costs are earned. Loans receivable accrue interest under the applicable loan document terms until the loan is deemed uncollectible. Loans are considered delinquent after 30 days of non-payment from the original due date or deferred due date. Loans are considered impaired when collection of the full amount of the loan is unlikely based on various factors discussed below. HRDC uses multiple bases to estimate the allowance for credit losses including historical losses of the loan program, existing economic conditions related to the industry in which the loan recipient operates, collateral of the loan recipient, loan payment history and actual or likely events which have occurred or will occur. The risk characteristics of the individual loan programs are similar in nature. HRDC operates loan programs for recipients who cannot generally obtain conventional financing under the requirements and restrictions placed on them by federal and state loan funding sources. Therefore, due to the nature of the loan programs operated, HRDC’s loan portfolio is generally of inherently higher risk than typical conventional financing loans; however the loans are collateralized by the property. HRDC’s loans receivable are considered deferred loans, therefore no loans are considered past due as of June 30, 2020 and 2019, and all amounts are considered current under the terms of the loans. Impaired loans are valued at the estimated value of the remaining recoverable assets after consideration of collateral and guarantees. An allowance for bad debt is recorded against these impaired loans for the difference between the balance of the loan and estimated recovery value. As of June 30, 2020 and 2019, HRDC did not have any impaired loans. NOTE 4.INVESTMENTS Investments carried at fair value, as of June 30, 2020, are as follows: Amortized Cost Fair Value Net Unrealized Gain (Loss) Cash held for investment $ 20,318 $ 20,318 $ - Equity securities: Mutual funds 700,738 747,145 46,407 Exchange traded funds 440,782 436,682 (4,100) Total investments 1,161,838$ 1,204,145$ 42,307$ 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -32- NOTE 4.INVESTMENTS (CONTINUED) Investments carried at fair value, as of June 30, 2019, are as follows: Amortized Cost Fair Value Net Unrealized Gain Cash held for investment $ 9,483 $ 9,483 $ - Certificates of deposit 155,673 155,673 - Mutual funds 1,122,562 1,164,267 41,705 Total investments 1,287,718$ 1,329,423$ 41,705$ 2019 The following summarizes investment return and its classifications on the statement of activities: 2020 2019 Interest, dividends and capital gains (losses)(1,588)$ 30,206$ Loan and other interest income 60,388 97,900 Realized losses (7,479) (1,382) Unrealized (losses) gains (1,347) 197 Net realized/unrealized loss on investments (8,826) (1,185) Investment fees (11,006) (10,051) Total investment income 38,968$ 116,870$ A significant portion of HRDC’s investments are subject to the risk of value fluctuation that is inherent in the market. As such, the value of HRDC’s assets may change frequently. To help manage this risk, HRDC utilizes professional investment management firms to oversee the HRDC portfolio and monitor its performance. Total investment fees paid to the investment managers were $11,006 and $10,051 for the years ended June 30, 2020 and 2019, respectively. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -33- NOTE 5.FAIR VALUE MEASUREMENTS The Organization has determined the fair value of its investments through the application of accounting standards for Fair Value Measurements. This standard establishes a fair value hierarchy, which prioritizes the valuation into three broad levels: Level 1:Quoted prices in active markets for identical assets or liabilities Level 2:Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in methodologies used at June 30, 2020 and 2019. Cash Held for Investment: valued at the balance held in this account. Certificates of Deposit: valued at the closing price reported in the active market in which the instrument is traded. Equity Securities: valued at the closing price reported on the active market on which the individual securities are traded. Pledges Receivable: valued at fair value based on the net present value of expected future cash flows discount rate for a multi-year pledge. Charitable Gift Annuities: valued at fair value based on the present value of the future payments over the beneficiaries’ estimated remaining lives using the original discount rates at the date of the gift and applicable mortality tables. Investment assets are classified in their entirety based upon the lowest level of input that is significant at the fair value measurement. The following tables present by level, within the fair value hierarchy, HRDCs’investment assets at fair value, as of June 30, 2020. Fair Value Level 1 Level 2 Level 3 Total Cash held for investment $ 20,318 $ 20,318 $ - $ - $ 20,318 Equity securities: Mutual funds 747,145 747,145 - - 747,145 Exchange traded funds 436,682 436,682 - - 436,682 Total investments at fair value 1,204,145 1,204,145 - - 1,204,145 Pledges receivable 2,897,321 - - 2,897,321 2,897,321 Total assets at fair value 4,101,466$ 1,204,145$ -$ 2,897,321$ 4,101,466$ June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -34- NOTE 5.FAIR VALUE MEASUREMENTS (CONTINUED) The following table sets forth by level, within the fair value hierarchy, HRDC’s liabilities measure at fair value on a reoccurring basis as of June 30, 2020: Fair Value Level 1 Level 2 Level 3 Total Charitable gift annuity obligations 12,176$ -$ -$ 12,176$ 12,176$ The following tables present by level, within the fair value hierarchy, HRDCs’investment assets at fair value, as of June 30, 2019. Fair Value Level 1 Level 2 Level 3 Total Cash held for investment $ 9,483 $ 9,483 $ - $ - $ 9,483 Certificates of deposit 155,673 155,673 - - 155,673 Equity securities: Mutual funds 1,164,267 1,164,267 - - 1,164,267 Total investments at fair value 1,329,423 1,329,423 - - 1,329,423 Pledges receivable 585,720 - - 585,720 585,720 Total assets at fair value 1,915,143$ 1,329,423$ -$ 585,720$ 1,915,143$ June 30, 2019 The following table sets forth by level, within the fair value hierarchy, HRDC’s liabilities measure at fair value on a reoccurring basis as of June 30, 2019: Fair Value Level 1 Level 2 Level 3 Total Charitable gift annuity obligations 11,204$ -$ -$ 11,204$ 11,204$ Changes in level 3 assets and liabilities for the years ended June 30, 2020 and 2019, are as follows: Pledges Charitable receivable gift annuities Balance, July 1, 2018 $ - $ 3,882 Additions 900,000 7,322 Payments (300,000) - Changes in discount (14,280) - Balance, June 30, 2019 585,720 11,204 Additions 2,728,050 972 Payments (321,230) - Changes in discount (95,219) - Balance, June 30, 2020 2,897,321$ 12,176$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -35- NOTE 6.PROPERTY AND EQUIPMENT Equipment purchased with grant funds is subject to rights of rescission of the grantors. Equipment purchased with grant monies is limited to use by the grant program that purchases the equipment. Should the program terminate, grantors may invoke claim to that equipment purchased through the grant agreement terms. Property and equipment consisted of the following at June 30,2020 and 2019: 2020 2019 Furniture and equipment 777,332$ 777,332$ Vehicles 4,789,454 4,789,454 Land and improvements 11,248,596 8,717,952 Buildings 17,527,638 13,781,808 Less accumulated depreciation (11,083,323) (10,088,691) Total land, buildings, equipment and vehicles 23,259,697 17,977,855 Software 139,440 139,440 Less accumulated depreciation (139,440) (139,440) Total software - - Construction in progress 8,833,410 5,952,897 Total property and equipment 32,093,107$ 23,930,752$ Presented on the statement of financial position as: Construction in progress 7,524,701$ 4,875,658$ Construction in progress, federal contraints 1,308,709 1,077,239 Property and equipment, net, federal constraints 8,929,031 9,644,261 Property and equipment, net 14,330,666 8,333,594 Total 32,093,107$ 23,930,752$ NOTE 7.UNEARNED REVENUE Unearned revenue consists of cash received from grantors that was not earned as of June 30, 2020 and 2019. The activity in the unearned revenue account is as follows: 2020 2019 Unearned revenue, beginning of year 2,830,925$ 1,324,837$ Grant awards received 6,660,397 7,708,799 Grant expenditures (6,440,597) (6,202,711) Gross unearned revenue, end of year 3,050,725 2,830,925 Less amount not received in cash (3,003,008) (2,825,897) Net unearned revenue 47,717$ 5,028$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -36- NOTE 8.NOTES PAYABLE HRDC’s notes payable at June 30, 2020 and 2019 are as follows: Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding Big Sky Western Bank 660,578$ 361,339$ 372,723$ Original loan date November 18, 1996 Refinanced April 29, 2010 Modified May 30, 2013 Maturity date May 5, 2040 Monthly payment 2,233$ Interest rate 4.21% Terms Resets every 7 years to 3.00% above the Federal Home Loan Bank Bullet Rate (1.21% at June 30, 2020 and 2019). Collateral First lien on the West Babcock Apartments and guaranteed by HRDC. City of Bozeman Community Affordable Housing 150,000$ 32,916$ 37,916$ Loan date January 1, 1997 Maturity date January 1, 2027 Monthly payment 417$ Interest rate 0.00% Collateral Second lien on the West Babcock Apartments. U.S. Department of Agriculture - Rural Development 116,415$ 81,744$ 84,340$ Loan date October 6, 1999 Maturity date October 3, 2039 Monthly payment 543$ Interest rate 4.75% Collateral Revenue from the Livingston Child Care Center. U.S. Department of Agriculture - Rural Development 30,000$ 21,043$ 21,686$ Loan date October 6, 1999 Maturity date October 6, 2039 Monthly payment 140$ Interest rate 4.75% Collateral Revenue from the Livingston Child Care Center. U.S. Department of Agriculture - Rural Development 450,000$ 338,802$ 347,618$ Loan date February 1, 2002 Maturity date February 1, 2042 Monthly payment 2,097$ Interest rate 4.75% Collateral HRDC Central Office building and land. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -37- NOTE 8.NOTES PAYABLE (CONTINUED) Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding First Interstate Bank 152,800$ 58,653$ 65,938$ Original loan date December 28, 1999 Refinanced June 19, 2003 Maturity date May 1, 2028 Monthly payment 893$ Interest rate 3.75% Terms Resets every 5 years to .50% above the Wall Street Journal Prime Rate (3.25% and 5.50% at June 30, 2020 and 2019, respectively) Collateral First lien on the Gallatin Valley Food Bank building and land. Stockman Bank of Montana 252,287$ 188,365$ 198,628$ Loan date April 17, 2013 Maturity date May 17, 2033 Monthly payment 1,633$ Interest rate 4.80% Terms Resets every 10 years to 4.00% above the 5-year U.S. Treasury Constant Maturity Index (.29% and 1.79% at June 30, 2020 and 2019, respectively) Collateral First lien on the HRDC Annex building Big Sky Western Bank 275,000$ 138,081$ 144,583$ Loan date May 22, 2014 Maturity date May 20, 2034 Monthly payment 1,709$ Interest rate 4.29% Terms Resets every 5 years to 3.00% above the Federal Home Loan Bank Bullet Rate (1.21% at June 30, 2020 and 2019, respectively) with a floor of 4.29% Collateral First lien on the Fork & Spoon Homestyle Kitchen building, land, and all equipment, furniture, and fixtures. U.S. Department of Housing and Urban Development 438,100$ 438,100$ 438,100$ Loan date September 30, 2006 Maturity date January 1, 2037 Monthly payment Interest rate 0.00% Collateral Summit Apartments. The loan terms call for no payments with the loan balance forgiven at maturity if all compliance requirements are met. If default occurs, interest is 7% and the loan is due and payable without notice. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -38- NOTE 8.NOTES PAYABLE (CONTINUED) Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding Community First Fund of Montana 92,500$ 83,487$ 85,511$ Loan date August 24, 2015 Maturity date September 1, 2045 Monthly payment 415$ Interest rate 3.50% Collateral First lien on the Youth Transitional Home building. Big Sky Western Bank 540,000$ 507,559$ 524,909$ Loan date July 14, 2017 Maturity date July 14, 2038 Monthly payment 3,499$ Interest rate 4.78% Terms Resets every 5 years to 2.50% above the Federal Home Loan Bank 5-year long-term fixed rate (.78% and 2.16% at June 30, 2020 and 2019, respectively) with a minimum rate of 4.78% Collateral First lien on the Belgrade Child Care Center building and land Big Sky Western Bank 1,342,500$ 1,265,237$ 1,312,803$ Loan date October 23, 2017 Maturity date October 23, 2037 Monthly payment 8,978$ Interest rate 4.60% Terms Resets every 5 years to 2.50% above the Federal Home Loan Bank 5-year long-term fixed rate (.78% and 2.16% at June 30, 2020 and 2019, respectively) with a minimum rate of 4.60% Collateral First lien on the Cottages at Menicucci Square buildings and land First Security Bank 4,971,317$ 699,607$ 3,914,321$ Loan date December 20, 2018 Modified August 21, 2020 Maturity date June 18, 2040 Interest rate 5.25% Terms Note is a construction loan with multiple draws, up to a maxmium of $5,239,537. Due in monthly installments beginning September 18, 2021 of $4,881. Collateral Deed of trust on 18 condominiums and land for the Meadowview Development in Big Sky, MT. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -39- NOTE 8.NOTES PAYABLE (CONTINUED) Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding First Security Bank 2,656,362$ 2,656,362$ -$ Loan date September 23, 2019 Modified August 21, 2020 Maturity date March 23, 2041 Interest rate 5.00% Terms Note is a construction loan with multiple draws, up to a maxmium of $6,221,027. Due in monthly installments beginning September 23, 2021 of $42,660. Collateral Deed of trust on 52 condominiums and land for the Meadowview Development in Big Sky, MT. First Security Bank 1,125,000$ 1,125,000$ 1,125,000$ Loan date July 6, 2018 Maturity date July 6, 2020 Monthly payment 4,922$ Interest rate 5.25% Terms Principal due upon maturity. Monthly interest payments beginning August 6, 2018 until maturity. Collateral Deed of trust dated July 6, 2018, on to a trustee in favor of Lender on 5.73 acres of land located in Bozeman, MT. Private Loan 890,100$ 890,100$ 375,000$ Loan date October 2, 2018 Maturity date October 2, 2022 Monthly payment 1,484$ Interest rate 2.00% Terms Note agrees to loan up to $1,000,000. Principal due upon maturity. Monthly interest only payment. Collateral Deed of trust to a trustee in favor of Lender on real property located in Gallatin County, MT. US Department of Housing and Urban 388,532$ 293,050$ 316,011$ Development, Mortgage Restructuring Loan Loan date May 12, 1999 Maturity date July 1, 2029 Interest rate 1.00% Terms Payments dependent on remaining cash from operations Collateral Secured by second lien on Miles Building Apartments HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -40- NOTE 8.NOTES PAYABLE (CONTINUED) Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding Montana Board of Housing 550,000$ 274,661$ 297,018$ Loan date May 6, 1999 Maturity date June 1, 2029 Monthly payment 3,298$ Interest rate 6.00% Collateral Secured by first lien on Miles Building Apartments Local Initiatives Support Corporation 20,000$ -$ 20,000$ Original loan date October 1, 2018 Maturity date September 30, 2019 Interest rate 0.00% Terms Principal due upon maturity Collateral Secured by Housing First Village Recoverable Grant First Security Bank 3,111,200$ 1,892,640$ -$ Loan date May 28, 2019 Maturity date November 28, 2020 Interest rate 5.34% Terms Note is a construction loan up to a maxium of $3,111,200. Principal and accrued interest due upon maturity Collateral Secured by Willow Springs property First Security Bank 2,498,492$ 6,433$ -$ Loan date May 14, 2020 Maturity date November 14, 2021 Interest rate 4.59% Terms Note is a construction loan up to a maxium of $2,498,492. Principal and accrued interest due upon maturity Collateral Secured by Willow Springs property First Security Bank 423,750$ 416,527$ -$ Loan date August 23, 2019 Maturity date August 23, 2044 Monthly payment 2,477$ Interest rate 5.00% Terms Resets every 5 years to 2.75% above the Federal Home Loan Bank 5-year long-term fixed rate (currently at 0.78%) with a minimum rate of 5.00% Collateral Deed of trust dated August 23, 2019 on property located at 214 & 216 N. 15th Ave located in Bozeman, MT. First Security Bank 407,000$ 407,000$ -$ Loan date April 16, 2020 Maturity date April 16, 2022 Interest rate 1.00% Terms Due in monthly installments beginning September 16, 2021 of $22,904; Loan is a payroll protection program (PPP) loan, subject to forgiveness upon meeting certain criteria. Collateral Loan is unsecured HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -41- NOTE 8.NOTES PAYABLE (CONTINUED) Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding First Security Bank 585,000$ 585,000$ -$ Loan date June 26, 2020 Maturity date June 26, 2022 Interest rate 4.59% Terms Principal and accrued interest due upon maturity American Bank 751,195$ 751,195$ -$ Loan date December 30, 2019 Maturity date December 31, 2020 Interest rate 4.75% Terms Note is a construction loan up to a maxium of $950,000. Principal and accrued interest due upon maturity Collateral Secured by Livingston Housing Development property Private Loan 1,471,512$ 1,471,512$ -$ Loan date August 30, 2019 Maturity date August 30, 3022 Interest rate 2.00% Terms Monthly interest only payments. Principal and accrued interest due upon maturity Private Loan 3,000,000$ 3,000,000$ -$ Loan date August 31, 2019 Maturity date August 31, 2024 Interest rate 6.00% Terms Monthly interest only payments. Principal and accrued interest due upon maturity Total notes payable 17,984,413$ 9,682,105$ Annual maturities for the fiscal years ending June 30 are as follows: 2021 7,282,989$ 2022 1,164,365 2023 2,535,686 2024 182,617 2025 3,190,978 Thereafter 3,627,778 17,984,413$ On April 16, 2020, HRDC received loan proceeds in the amount of $407,000 under the Paycheck Protection Program (PPP). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), provides for loans to qualifying organizations for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -42- NOTE 8.NOTES PAYABLE (CONTINUED) The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the covered period. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first ten months following the end of the covered period. While HRDC currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan,it is possible HRDC may be ineligible for forgiveness of the loan in whole or in part. In addition, HRDC uses corporate unrestricted funds received from donations and other sources to finance housing programs and social programs through intercompany loans. The loans bear interest at rates of 0 to 8 percent and carry terms of various lengths. A summary of these intercompany loans from HRDC funds is as follows: Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding Sherwood Inn Apartments, Inc. loan - Corporate funds 444,269$ 223,853$ 238,678$ Loan date February 1, 2004 Maturity date February 1, 2034 Annual payment 17,215$ Interest rate 1.00% Collateral Sherwood Inn Apartments Sherwood Inn Apartments, Inc. loan - Corporate funds 142,642$ 79,542$ 88,817$ Loan date August 30, 2012 Maturity date September 1, 2027 Annual payment 1,055$ Interest rate 4.00% Collateral Sherwood Inn Apartments Sherwood Inn Apartments, Inc. loan - Smyth funds 250,000$ 139,406$ 155,665$ Loan date August 30, 2012 Maturity date September 1, 2027 Annual payment 1,849$ Interest rate 4.00% Collateral Sherwood Inn Apartments 200,000$ 167,138$ 172,391$ Loan date April 29, 2013 Maturity date May 5, 2040 Annual payment 1,034$ Interest rate 4.21% Collateral West Babcock Apartments Home Corporation (West Babcock Apartments) - Smyth funds HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -43- NOTE 8.NOTES PAYABLE (CONTINUED) Original Loan 2020 Balance 2019 Balance Amount Outstanding Outstanding Miles LP - Miles Building, Inc. CDBG Loan 500,000$ 500,000$ 500,000$ Original date of loan July 1, 2002 Loan acquired in acquisition January 1, 2019 Maturity date July 1, 2042 Annual payment Loan deferred until available cash flow and reserves are funded Interest rate 5.70% Collateral Secured by revenues of Miles Limited Partnership Miles LP - Miles Building, Inc. Equity Loan 259,947$ 251,729$ 257,198$ Original date of loan December 4, 2001 Loan acquired in acquisition January 1, 2019 Maturity date December 4, 2041 Annual payment Loan deferred until available cash flow and reserves are funded Interest rate 1.00% Collateral Secured by revenues of Miles Limited Partnership Miles LP - Miles Building, Inc. Reserves Loan N/A 63,920$ 63,920$ Original date of loan March 31, 2013 Loan acquired in acquisition January 1, 2019 Maturity date Not Specified Annual payment Loan deferred until available cash flow and reserves are funded Interest rate 0.00% Collateral Secured by revenues of Miles Limited Partnership Total long-term intercompany notes payable 1,425,588$ 1,476,669$ There are no intercompany loans due within the next five years. Other temporary intercompany loans provided from HRDC funds are as follows: 2020 2019 Other temporary intercompany loans Miles Building, Inc. 0%151,713$ 151,713$ Koch Home 8%18,952 21,401 HRDC Annex Building 0%145,355 145,355 Fork & Spoon Building 0%100,208 100,208 Belgrade Head Start Center 0%317,638 317,638 Cottages at Menicucci Square 0%519,147 519,147 Boulevard Apartments 0%34,703 - Total temporary intercompany loans 1,287,716$ 1,255,462$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -44- NOTE 9.LEASES HRDC classifies its leases as either operating or capitalized leases. Currently all leases are operating leases. Office space in Livingston,Montana is leased for $500 per month to effectively serve the Livingston community with HRDC programs and services. The lease renews on an annual basis. HRDC also began leasing a networked copier/printer system for $1,573 per month under a 5 year term beginning March 2012. This lease has been renewed on a month to month basis. HRDC entered into a lease agreement for parking space for the Fork & Spoon in October 2015 continuing through September 2021. Rent was $1,000 per month and increased to $1,100 per month in October 2018. HRDC entered into a lease agreement in January 2018 for facilities used by the Big Sky Food Bank that expires December 31, 2020. Rent under the agreement is $1,500 per month for the first year; $1,550 per month for the second year; and $1,600 for the third year. HRDC entered into a month-to-month lease agreement in September 2015 for lot rental for the Youth Transitional Home. Rent was $335 per month and increased to $350 per month in November 2015 and remains at this amount. HRDC entered into a lease agreement in January 2017 to store manufactured housing units in Belgrade for $30 per unit per month. HRDC entered into a lease agreement in April 2017 to lease land in Three Forks for 20 years for $100 per month. HRDC entered into a month-to-month lease agreement in October 2018 for office space in Helena for $250 per month. HRDC entered into a month-to-month lease agreement in November 2018 for office space in Big Sky for $550 per month. HRDC entered into a month-to-month lease agreement in November 2018 for seven additional offsite parking spaces for $350 per month through November 2019. This lease has been renewed on a month to month basis. HRDC entered into a lease agreement in January 2019 for office space that expires December 31, 2019 for $1,300 per month. This lease has been renewed through December 2021 for $1,313 per month. HRDC entered into a lease agreement in February 2019 for office space that expires September 30, 2021 for $2,200 per month. Rent will be adjusted annually with the consumer price index rate. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -45- NOTE 9.LEASES (CONTINUED) HRDC entered into a lease agreement in December 2019 for a warming center in Bozeman that expires December 2024 for $10,000 per month. Rent expense totaled $180,732 and $100,412 for 2020 and 2019, respectively. Future minimum payments due under lease agreements is as follows: Year ending June 30, 2021 189,756$ 2022 146,286 2023 132,324 2024 68,730 2025 1,200 Thereafter 17,000 555,296$ NOTE 10.EMPLOYEE BENEFITS HRDC employees may participate in a Code Section 401(k) Retirement Plan. 401(k) Retirement Plan Employees are eligible to make elective deferrals upon meeting the plans hour and service requirements and can contribute up to the maximum amount allowed by law. Employees meeting the plan’s hour and service requirements are eligible for employer matching contributions. HRDC matches employee contributions up to 7% of the employee’s salary. Employer matching contributions vest as follows: Years of Service Non-forfeitable Less than 1 year 0% One year 33% Two years 67% Three years 100% For the years ended June 30, 2020 and 2019, HRDC contributed $184,030 and $169,930 in matching contributions to the 401(k) Retirement Plan. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -46- NOTE 10.EMPLOYEE BENEFITS (CONTINUED) Health Insurance HRDC participates in a Group Health Benefit Plan (Health Plan) which provides eligible employees and their dependents with medical insurance. Employees can choose between a traditional plan where the Health Plan has a $2,500 deductible provision whereby the first $2,500 of medical expense annually is paid by the employee or a high deductible plan with $3,500 deductible. Any cost in excess of the deductible is covered through an insurance policy from an insurance provider. HRDC paid $470,242 and $422,165 for insurance premiums for the years ended June 30, 2020 and 2019, respectively. The employee maximum annual responsibility for the traditional plan and high deductible plan is $4,500 for single coverage and $9,000 for family coverage, respectively. NOTE 11.LAND TRUSTS Bozeman, Montana HRDC created the West Babcock Land Trust in Bozeman, Montana in 1994 upon which twenty-three homes have been constructed and sold to income eligible individuals (including three homes constructed by Habitat for Humanity). The purpose of the Land Trust is to provide housing that is permanently affordable to low and moderate income levels, while creating home ownership opportunities. HRDC is able to stimulate the availability of long-term affordable housing through the use of long-term Ground Leases. HRDC retains title to the Land, and shares in the equity of the home with eligible individuals who purchase the homes for a price based upon their ability to pay. The total equity is determined by independent appraisals. A summary of sales prices and equity percentages are as follows: 2020 %2019 % Appraised value of homes at the time of purchase (excluding land)2,450,300$ 100.0%2,300,300$ 100.0% Sales price to individuals 2,077,425 84.8%1,927,425 83.8% Balance of equity to HRDC 372,875$ 15.2%372,875$ 16.2% When the individuals sell their homes, they must sell either to HRDC or to other income eligible individuals. Proceeds from a sale are allocated between the individual and HRDC in the relative proportion of equity at the time of purchase in accordance with the Ground Lease Agreement. Each homeowner has signed a 99-year renewable Ground Lease which is paid in semiannual installments of $180. Lease payments billed during the years ending June 30, 2020 and 2019 totaled $8,280 per year. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -47- NOTE 11.LAND TRUSTS (CONTINUED) Bozeman, Montana (Continued) HRDC has agreed to act as a guarantor on two individual Deeds of Trust with local lenders with a combined original mortgage amount of $95,600 as of June 30, 2020 and 2019. HRDC serves as a guarantor in order to secure financing for purchasers of these affordable homes. HRDC’s guarantee is secured by land held in the Land Trust. HRDC created the Willow Springs Land Trust in Bozeman, Montana in 2019-2020, upon which up to twenty-four townhomes may be constructed and sold to income eligible individuals. The construction of the townhomes was facilitated by program revenue from a previous Neighborhood Stabilization Program grant from the U.S. Department of Housing and Urban Development (HUD) through the Montana Department of Commerce. Twelve townhome units were completed in Phase 1, and nine townhomes sales to individuals had been finalized as of June 30, 2020. A summary of sales prices and equity percentages for the homes sold are as follows: 2020 %2019 % Appraised value of homes at the time of purchase (excluding land)2,137,500$ 100.0%-$ 100.0% Sales price to individuals 2,062,500 96.5%- 100.0% Balance of equity to HRDC 75,000$ 3.5%-$ 100.0% Livingston, Montana HRDC created a Land Trust in Livingston, Montana in 1998, upon which up to twenty-two homes may be constructed and sold to income eligible individuals. The construction of the homes was facilitated by a HOME grant from the U.S. Department of Housing and Urban Development (HUD) through the Montana Department of Commerce. Eighteen homes were completed and sales to individuals were finalized. During fiscal year 1997, land valued at $90,000 was donated to HRDC for the Livingston Land Trust. A summary of sales prices and equity percentages for the homes sold are as follows: 2020 %2019 % Appraised value of homes at the time of purchase (excluding land)913,500$ 100.0%913,500$ 100.0% Sales price to individuals 837,522 91.7%837,522 91.7% Balance of equity to HRDC 75,978$ 8.3%75,978$ 8.3% Each homeowner has signed a 99-year renewable Ground Lease which includes provisions required for use with homeowner mortgages insured by HUD/Federal Housing Authority. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -48- NOTE 11.LAND TRUSTS (CONTINUED) Big Sky, Montana HRDC created the Meadowview Land Trust in Big Sky, Montana in 2019-2020, upon which up to fifty-two condominium homes may be constructed and sold to income eligible individuals. The construction of the condominium units was facilitated by grant funding from the Big Sky Resort Area District. Eighteen condominium units were completed in Phase 1, and sales to individuals were finalized during the year ending June 30, 2020. A summary of sales prices and equity percentages for the homes sold are as follows: 2020 %2019 % Appraised value of homes at the time of purchase (excluding land)4,756,600$ 100.0%-$ 100.0% Sales price to individuals 4,071,634 85.6%- 100.0% Balance of equity to HRDC 684,966$ 14.4%-$ 100.0% NOTE 12.RISK MANAGEMENT HRDC faces a number of risks including (1) loss or damage to property, (2) general liability, and (3) employee medical insurance. Commercial insurance policies are purchased for loss or damage to property, general liability, and employee medical insurance to manage these risks. NOTE 13.PLANNED GIFT LIABILITIES The liability of each type of planned gift changes each year with receipts of new gifts, payments under contracts, change in trust asset values, and the change in present value of required payments to beneficiaries. The present value of the future payments over the beneficiaries’ estimated remaining lives was calculated using the original discount rates at the date of the gift and applicable mortality tables. The discount rate used in the calculation was 2.6%. The following table summarizes the change to planned gift liabilities for the year ended June 30, 2020 and 2019: Estimated present value of liability at July 1, 2018 3,882$ Increase in estimated present value of liability from contributions 7,322 Estimated present value of liability at July 1, 2019 11,204 Increase in estimated present value of liability from contributions 972 Estimated present value of liability at June 30, 2020 12,176$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -49- NOTE 13.PLANNED GIFT LIABILITIES (CONTINUED) HRDC is subject to certain provisions of the Montana Code Annotated which specify that a charitable organization may only issue a “qualified charitable gift annuity” if it meets the following statutory requirements on the date of the annuity agreement: Has a minimum of $300,000 net assets or has a minimum of $100,000 in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement; Has been in continuous operation for at least three years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three years; and Maintains a separate annuity fund with at least one-half the value of the initial amount transferred for outstanding annuities. If the charitable organization cannot meet the requirements, the issuance of a qualified charitable gift annuity by a charitable organization must be commercially insured by a licensed insurance company that is qualified to do business in Montana. For the year ended June 30, 2020, HRDC met the requirements to issue qualified charitable gift annuities. NOTE 14.ENDOWMENT NET ASSETS HRDC maintains endowments within its permanently restricted net assets established for the greatest needs of HRDC. Contributions to the endowment funds are subject to donor restrictions that stipulate the original principal of the gift is to be held and invested by the HRDC indefinitely, and income from the fund is to be expended for the greatest needs of the HRDC. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of Relevant Law HRDC has interpreted the Montana Uniform Prudent Management of Institutional Funds Act (MUPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result, HRDC classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, and (b) the original value of subsequent gifts to the permanent endowment. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the HRDC in a manner consistent with the standard of prudence prescribed by MUPMIFA. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -50- NOTE 14.ENDOWMENT NET ASSETS (CONTINUED) In accordance with MUPMIFA, HRDC considers the following factors when making a determination to appropriate or accumulate donor-restricted endowment funds. The duration and preservation of the fund The purpose of HRDC and the donor-restricted endowment fund General economic conditions The possible effect of inflation and deflation The expected total return from income and the appreciation of investments Other resources of HRDC The investment policies of HRDC Funds with Deficiencies From time to time, the fair value of assets associated with the endowment funds may fall below the level that the donor or MUPMIFA requires HRDC to retain as a fund of perpetual duration. In accordance with generally accepted accounting principles, deficiencies of this nature are reported in unrestricted net assets. These deficiencies result from unfavorable market fluctuations that occur during the investment of contributions and continued appropriation, if any, for certain programs that are deemed prudent by the Board of Directors. There were no such deficiencies as of June 30, 2020 and 2019. Return Objectives and Risk Parameters HRDC has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor- restricted funds that the organization must hold in perpetuity or for a donor-specified period as well as board-designated funds. Under this policy, endowment assets are invested in a manner that is intended to produce results that exceed the market rate while assuming a prudent level of investment risk. The HRDC targets an asset allocation of fixed income and cash equivalents until the balances in the endowment are great enough for investment. Spending Policy and How the Investment Objectives Relate to Spending Policy HRDC’s spending policy allows an annual distribution not to exceed the average net earnings, growth, and income. Any portion of the annual distribution funds not distributed in any given year will be retained in the endowment fund for expenditure in future years. The HRDC expects its spending policy to allow the endowment to grow and to maintain the purchasing power of the endowment assets. No funds were distributed in 2020 and 2019. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -51- NOTE 14.ENDOWMENT NET ASSETS (CONTINUED) Endowment net asset composition by type of fund as of June 30, 2020 and 2019 are as follows: Without Donor With Donor Restrictions Restrictions Total 2020 Donor-restricted endowment funds -$ 163,812$ 163,812$ Board designated endowment funds 5,542 - 5,542 5,542$ 163,812$ 169,354$ 2019 Donor-restricted endowment funds -$ 154,603$ 154,603$ Board designated endowment funds 5,542 - 5,542 5,542$ 154,603$ 160,145$ Changes in HRDC General Endowment net assets for the years ended June 30, 2020 and 2019 are as follows: Without Donor With Donor Restrictions Restrictions Total Endowment net assets, July 1, 2018 5,542$ 54,231$ 59,773$ Contributions and transfers - 100,372 100,372 Endowment net assets, June 30, 2019 5,542 154,603 160,145 Contributions and transfers - 9,209 9,209 Endowment net assets, June 30, 2020 5,542$ 163,812$ 169,354$ NOTE 15.RELATED PARTIES HRDC is the non-profit general partner of the Bridger Peaks Village Associates, LP, Darlinton Apartments, LP, and Stoneridge Apartments, LP. HRDC entered into these limited partnership agreements to facilitate the construction and operation of low-income housing partially financed by the sale of low-income housing tax credits. HRDC has a 0.01 percent ownership interest in the Bridger Peaks Village Associates, LP, Darlinton Apartments, LP, and Stoneridge Apartments, LP. HRDC is not considered to have any liability nor asset relating to its interests in the Bridger Peaks Village Associates, LP, Darlinton Apartments, LP, or Stoneridge Apartments, LP. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -52- NOTE 15.RELATED PARTIES (CONTINUED) In August 2011, HRDC’s Board of Directors approved the divestiture of HRDC’s Community First Fund program to the Community First Fund of Montana, a separate 501(c)(4) not-for-profit corporation. The Chief Executive Officer and the past Chief Executive Officer of HRDC make up two of three board members of the Community First Fund of Montana. HRDC’s Community First Fund program was founded in 1999 through support from the Willow Springs Foundation. The program was created out of previous HRDC community development initiatives with a goal of generating funds that were available for projects with fewer restrictions than State and Federal funding sources. HRDC’s Community First Fund was designed to encourage growth and positive elements within the region through enhanced job creation, business promotion, construction of affordable housing, and establishing enduring physical and social institutions. Effective June 1, 2019, HRDC purchased a condominium from a board member in the amount of $264,000. The purpose of purchasing this property is to implement a deed restriction on the property in perpetuity requiring that future buyers meet certain affordable housing qualifications, thus increasing Bozeman’s supply of owner-occupied affordable housing units. The condominium unit was sold to a qualifying third party on September 10, 2019 for $230,000, after implementing the affordable deed restriction, which also reduced its appraised fair market value at sale. NOTE 16.CONCENTRATION OF RISK HRDC has invested in apartment complex buildings and equipment with a cost basis of $14,261,873 and net book value of $9,745,715 as of June 30, 2020, representing a concentration in the real estate rental market. Additionally, the low-income housing sector operates in a heavily regulated environment which is subject to the directives, rules, and regulations of federal, state, and local regulatory agencies, which could change with little notice. For the year ended June 30, 2020, revenues generated from rental operations were $1,692,370 or six percent of the HRDC’s total revenues. Corresponding debt service payments made to third parties were $109,264 for the year with total outstanding debts related to the apartment units of $7,136,816 or thirty-two percent of HRDC’s total liabilities. If there was a change in the demand for rental housing in the area, or change in federal, state, or local regulations, it could adversely affect the operations of HRDC. HRDC receives a significant portion of its revenue from grants from government agencies; thus, the HRDC is subject to possible cutbacks due to changes in funding priorities. During the years ended June 30, 2020 and 2019, HRDC received approximately 24% and 37%, respectively, of its gross public support from such grants. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -53- NOTE 17.RISKS AND UNCERTAINTIES The COVID-19 outbreak in the United States has caused business disruption to HRDC. While the disruption is currently expected to be temporary, there is considerable uncertainty around the duration of the financial impact of the disruption. At this time, HRDC cannot reasonably estimate the financial impact of COVID-19 on its overall operations. NOTE 18.SUBSEQUENT EVENTS On July 10, 2020, HRDC purchased the Rodeway Inn in Bozeman, a hotel property with 42 rooms, for the primary purpose of providing temporary shelter for community members under short-term COVID-19 quarantine and isolation restrictions. The purchase price was $1,950,000, financed by two loans. HRDC entered into a new loan agreement with Yellowstone Bank to borrow $1,462,500 at an initial interest rate of 4.03% variable, with monthly principal and interest payments of $10,820 per month for 15 years and a maturity date of July 10, 2035. The loan is secured by the hotel land, improvements and rental revenue. HRDC also borrowed $473,315 from a private lender, evidenced by a new loan agreement dated July 9, 2020. The loan terms include an interest rate of 2.00% fixed, with monthly interest only payments averaging $789 per month for three years, followed by a balloon payment of all outstanding principal and accrued interest due on the maturity date of July 9, 2023. This bridge loan is secured by a second position lien on the hotel land and improvements. Effective July 28, 2020, HRDC and its wholly owned subsidiaries, Darlinton Apartments, Inc. and Darlinton 2020, LLC, acquired 100% of the existing partners’ ownership interests in the Darlinton Manor HP/HRDC Limited Partnership, owner of the Darlinton Manor Apartments. HRDC had previously exercised its Right of First Refusal to purchase the Darlinton Manor Apartments, a multifamily affordable housing property consisting of 100 subsidized rental units in Bozeman. Under the Purchase Option and Right of First Refusal Agreement dated October 29, 1999, as amended by the Interests Purchase Agreement (Conversion to Partnership Interests) dated July 23, 2020, the purchase price was stipulated as the amount of outstanding debt plus exit taxes plus net current assets as of the purchase closing date. Based on this, the purchase price was $1,989,817, consisting of the outstanding debt balances of two loans owed to the Montana Board of Housing (MBOH) and HUD in the amounts of $1,747,742 and $41,274 respectively, plus exit taxes of $129,382, plus net current assets of $71,419. The Darlinton Manor Apartments continued to be owned by the Darlinton Manor HP/HRDC Limited Partnership after HRDC’s acquisition of the controlling ownership interest. In September 2020, construction of HRDC’s affordable rental housing development project in Livingston was substantially completed, including infrastructure and placement of 12 manufactured housing units purchased in July 2016 on previously undeveloped lots in HRDC’s Livingston Community Land Trust. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -54- NOTE 18.SUBSEQUENT EVENTS (CONTINUED) Total development cost was $1,283,741, consisting of $423,706 for the 12 manufactured housing units and $860,035 of additional construction costs including the cost of landscaping completed in March 2021. To provide permanent financing for the Livingston development, on September 29, 2020, HRDC entered into a new loan agreement with the Montana Board of Housing (MBOH) to borrow $900,000 at an initial interest rate of 3.56%, with monthly principal and interest payments of $4,072 per month for 30 years and a maturity date of October 1, 2050. The loan is secured by the land and improvements. In addition, HRDC borrowed $200,000 from Montana Homeownership Network, Inc., dba NeighborWorks Montana, evidenced by a new loan agreement dated October 1, 2020. The loan terms include an initial interest rate of 4.00%, with monthly principal and interest payments of $955 per month for 30 years and a maturity date of October 1, 2050. This loan is secured by a second position lien on the land and improvements. HRDC’s construction loan of $950,000 previously received from American Bank for the Livingston development was paid off with the new mortgage loan proceeds. On October 30, 2020, HRDC purchased property in Gardiner, Montana consisting of a 4.6 acre land parcel with one residential structure for future development of affordable workforce housing units to serve the increasing needs of the Gardiner community. The purchase price was $875,000, financed by two loans. HRDC entered into a new loan agreement with First Security Bank, a Division of Glacier Bank, to borrow $656,250 at an initial interest rate of 4.19% variable, with monthly principal and interest payments of $3,534 per month for 10 years, followed by a balloon payment of all outstanding principal and accrued interest of approximately $475,193 due on the maturity date of November 1, 2030. The loan is secured by the land and improvements. HRDC also borrowed $220,000 from Montana Homeownership Network, Inc., dba NeighborWorks Montana, evidenced by a new loan agreement dated February 17, 2021. The loan terms include an interest rate of 6.50% fixed, with quarterly interest only payments averaging $3,575 per calendar quarter for two years, followed by a balloon payment of all outstanding principal and accrued interest due on the maturity date of February 28, 2023. This bridge loan is secured by a second position lien on the land and improvements. During July-December 2020, HRDC undertook a construction project to make significant leasehold improvements and alterations to a recently leased facility. The leasehold improvements were substantially completed in December 2020 at a cost of $834,186, and the new facility began serving the Warming Center program of HRDC. Effective January 21, 2021, HRDC conveyed a land parcel of 8.03 acres known as the Bridger View Redevelopment tract in Bozeman to the Headwaters Community Housing Trust by means of a Special Warranty Deed at no cost to the recipient. This land parcel had been previously conveyed by the Trust for Public Lands (TPL) to HRDC by donation on June 26, 2019, with an appraised fair market value of $1,600,000, for future development of workforce housing and mixed-income housing units. HRDC will in turn treat this conveyance transaction as a corresponding donation to the recipient. As the new owner, Headwaters Community Housing Trust has assumed responsibility for future housing development activities at the Bridger View Redevelopment tract. HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -55- NOTE 18.SUBSEQUENT EVENTS (CONTINUED) Construction activity continued in progress on Phase 2 of HRDC’s Meadowview condominium development project, which will produce 34 additional new affordable workforce housing units in Big Sky. Total construction cost to date through March 2021 is $9,571,863, and corresponding construction loan draws total $6,919,996. As Phase 2 condominium units are completed, they are being sold to qualifying homebuyers who will live and work in Big Sky, with the sales proceeds applied toward repayment of the construction loan balance with First Security Bank, a Division of Glacier Bank. Construction activity has also continued to progress on Phase 2 of HRDC’s Willow Springs Planned Unit Development, which will produce 12 additional new affordable townhouse units in Bozeman. Total construction cost to date through March 2021 is $3,492,456, and corresponding construction loan draws total $2,498,492. As Phase 2 townhouse units are completed, they are being sold to qualifying homebuyers, with the sales proceeds applied toward repayment of the construction loan balance with First Security Bank, a Division of Glacier Bank. In addition, predevelopment and early construction activity has continued on future facilities of HRDC currently under development. In February 2021, construction commenced on the tiny house development known as Housing First Village on a land parcel purchased by HRDC in June 2020, with total development costs to date through March 2021 of $296,661. Predevelopment, design and engineering activities have also continued to progress on another land parcel previously acquired by HRDC for future expansion of facilities, with total development costs to date through March 2021 of $727,615. Effective March 1, 2021, HRDC and its affiliates sold four multifamily affordable rental housing properties located in Bozeman and Livingston to a newly formed limited partnership for the purpose of rehabilitating and preserving the combined 230 subsidized rental units as affordable housing, utilizing financing provided by federal Low Income Housing Tax Credit investors, tax- exempt bonds, new loans and other related sources. The four sold properties are: Boulevard Apartments, a 40-unit building in downtown Bozeman owned by HRDC; Darlinton Manor Apartments, a 100-unit building in Bozeman owned by the Darlinton Manor HP-HRDC Limited Partnership, whose partner-owners are Darlinton Apartments Inc. and Darlinton 2020 LLC, both wholly owned subsidiaries of HRDC; Miles Building Apartments, a 40-unit building in downtown Livingston owned by the Miles Limited Partnership, whose partner-owners are Miles Building Inc. and Miles 2017 LLC, both wholly owned subsidiaries of HRDC; and Sherwood Inn Apartments, a 50-unit building in downtown Livingston owned by Sherwood Inn Apartments Inc., a wholly owned subsidiary of HRDC. The new owner of these four properties as of March 1, 2021 is HRDC IX Affordable Housing Solutions LP (Limited Partnership). Its co-general partners are GHP BZLV Holdings LLC, an affiliate of Good Housing Partnership LLC (Administrative GP with an ownership interest of .0051%) and 4 Property LLC, a wholly owned subsidiary of HRDC newly formed for this purpose (Managing GP with .0049%). HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) June 30, 2020 and 2019 -56- NOTE 18.SUBSEQUENT EVENTS (CONTINUED) Its limited partner ownership interests (99.99%) are held by affiliates of CREA. Resource Property Management, an operating division of HRDC, serves as property manager for the four properties. The March 1, 2021 sales transaction and formation of the new limited partnership owner, HRDC IX Affordable Housing Solutions LP, was preceded by a Memorandum of Understanding between Good Housing Partnership LLC and HRDC and its affiliates executed on December 5, 2019, which outlined the intent and general framework of the arrangement. Management has evaluated events through June 16, 2021, the date on which the financial statements were available for issue. S U P P L E M E N T A L I N F O R M A T I O N HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. EXPLANATION OF SUPPLEMENTAL SCHEDULES June 30, 2020 and 2019 -57- NOTE 1.BUDGET COLUMN The grant award budget column is based upon the last formally approved budget provided by the grantor. In addition, the grantee is allowed to make certain budget transfers within prescribed limits. These latter transfers are not reflected. The intention of HRDC is to show the budget based upon the final budget including all transfers, to provide a more meaningful presentation to the reader. NOTE 2.EXPLANATION OF ACRONYMS Acronyms used in the grant number indicate the grantor agency. Acronyms used in the supplemental schedules follow: CDBG = Community Development Block Grant CSBG = Community Service Block Grant DOC = Montana Department of Commerce DOE = U.S. Department of Energy DOLI = Montana Department of Labor and Industry DOT = U.S. Department of Transportation DPHHS= Montana Department of Public Health and Human Services FEMA = Federal Emergency Management Agency FTA = Federal Transit Administration HHS = U.S. Department of Health and Human Services HUD = U.S. Department of Housing and Urban Development LIEAP = Low Income Energy Assistance Program MBOH = Montana Board of Housing MDT = Montana Department of Transportation RSVP = Retired Senior Volunteer Program TANF = Temporary Assistance to Needy Families WIA = Workforce Investment Act WX = Weatherization HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATING SCHEDULE OF FINANCIAL POSITION June 30, 2020 See Independent Auditor’s Report. -58- HRDC HRDC Colo. Apts. HRDC West Edge Cottages at Menicucci Square Home Corporation Miles Building, Inc.Miles, LP Darlinton Apts., Inc. Sherwood Inn Apts., Inc. Summit Apts., Inc Boulevard Apartments BSV Rural Partners, LLC Eliminations Consolidated Total ASSETS Cash and cash equivalents 2,226,277$ 43,081$ 15,886$ 20,940$ 60,223$ 221,419$ 73,844$ 20,421$ 79,102$ 14,112$ 46,135$ 32,493$ -$ 2,853,933$ Escrow and building reserve 1,022,249 21,900 - - 116,810 - 265,386 58,533 315,314 97,435 - - - 1,897,627 Receivables (Note 3) Grantors 2,045,186 - - - - - - - - - - - - 2,045,186 Accounts receivable, net 1,231,124 - - 10,701 88 515,774 (2,537) - 1,015 3,459 1,850 19,791 (610,329) 1,170,936 Pledges, net 2,897,321 - - - - - - - - - - - - 2,897,321 Prepaid expenses 188,428 347 121 808 1,006 - 5,059 - 2,768 283 1,656 - - 200,476 Investments (Note 4)1,204,145 - - - - - - - - - - - - 1,204,145 Inventory - supplies and food bank 321,827 - - - - - - - - - - - - 321,827 Inventory - condominiums, federal constraints 1,264,406 - - - - - - - - - - - - 1,264,406 Other assets - manufactured homes 494,323 - - - - - - - - - - - - 494,323 Deferred loans receivable, net (Note 3)3,475,294 - - - - 815,649 - - - - - 832,000 (2,131,152) 2,991,791 Investment in partnership 2,099,850 - - - - 312,083 - - - - - - (2,411,933) - Construction in progress (Note 6)7,524,701 - - - - - - - - - - - - 7,524,701 Construction in progress, federal constraints (Note 6)1,308,709 - - - - - - - - - - - - 1,308,709 Property and equipment, net, federal constraints (Note 6)5,665,982 - - - 530,907 - 1,796,854 - 662,928 272,360 - - - 8,929,031 Property and equipment, net (Note 6)8,038,519 21,006 - 1,801,117 - - 15,661 - - 2,252 4,452,111 - - 14,330,666 Total assets 41,008,341$ 86,334$ 16,007$ 1,833,566$ 709,034$ 1,864,925$ 2,154,267$ 78,954$ 1,061,127$ 389,901$ 4,501,752$ 884,284$ (5,153,414)$ 49,435,078$ LIABILITIES Accounts payable 1,666,390$ 1,661$ 215$ 56,359$ 14,492$ -$ 13,656$ 58,533$ 14,310$ 2,059$ 9,156 -$ (94,452)$ 1,742,379$ Accrued liabilities 371,338 - - - 881 - 2,600 - - - - - - 374,819 Accrued vacation, sick, and paid time off 271,123 - - - - - - - - - - - - 271,123 Accrued interest payable 10,163 - - 1,169 2,000 - 516,494 - 2,656 - - - (515,877) 16,605 Deposits payable 225,702 4,071 2,610 19,621 17,558 - 10,320 - 13,148 826 6,834 - - 300,690 Unearned revenue (Note 7)47,717 - - - - - - - - - - - - 47,717 Notes payable (Note 8)10,847,597 - - 1,784,384 561,394 151,713 1,383,361 - 442,801 438,100 4,506,215 - (2,131,152) 17,984,413 Total liabilities 13,440,030 5,732 2,825 1,861,533 596,325 151,713 1,926,431 58,533 472,915 440,985 4,522,205 - (2,741,481) 20,737,746 NET ASSETS Without donor restrictions Undesignated 14,406,882 80,602 13,182 (27,967) (418,198) 1,713,212 (1,569,018) 20,421 (74,716) (323,444) (20,453) 884,284 (2,411,933) 12,272,854 HRDC General Endowment fund 5,542 - - - - - - - - - - - - 5,542 Federal constrained inventory and capital assets 8,239,097 - - - 530,907 - 1,796,854 - 662,928 272,360 - - - 11,502,146 Total net assets without donor restrictions 22,651,521 80,602 13,182 (27,967) 112,709 1,713,212 227,836 20,421 588,212 (51,084) (20,453) 884,284 (2,411,933) 23,780,542 With donor restrictions Purpose or time restrictions 4,752,978 - - - - - - - - - - - - 4,752,978 Perpetual in nature (endowment)163,812 - - - - - - - - - - - - 163,812 Total net assets with donor restrictions 4,916,790 - - - - - - - - - - - - 4,916,790 Total net assets 27,568,311 80,602 13,182 (27,967) 112,709 1,713,212 227,836 20,421 588,212 (51,084) (20,453) 884,284 (2,411,933) 28,697,332 Total liabilities and net assets 41,008,341$ 86,334$ 16,007$ 1,833,566$ 709,034$ 1,864,925$ 2,154,267$ 78,954$ 1,061,127$ 389,901$ 4,501,752$ 884,284$ (5,153,414)$ 49,435,078$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATING SCHEDULE OF FINANCIAL POSITION June 30, 2019 See Independent Auditor’s Report. -59- HRDC HRDC Colo. Apts. HRDC West Edge Cottages at Menicucci Square Home Corporation Miles Building, Inc.Miles, LP Darlinton Apts., Inc. Sherwood Inn Apts., Inc. Summit Apts., Inc BSV Rural Partners, LLC Eliminations Consolidated Total ASSETS Cash and cash equivalents 1,724,347$ 29,187$ 11,122$ 20,459$ 38,766$ 197,004$ 54,589$ 15,945$ 27,142$ 12,457$ 291,482$ -$ 2,422,500$ Escrow and building reserve 10,000 17,000 - - 86,189 - 89,529 - 271,562 78,005 - - 552,285 Certificates of deposit - - - - - - 155,673 - - - - - 155,673 Receivables (Note 3) Grantors 920,989 - - - - - - - - - - - 920,989 Accounts receivable, net 723,831 - 4,592 3,880 293 491,727 1,901 - 2,011 3,570 15,631 (536,313) 711,123 Pledges, net 585,720 - - - - - - - - - - - 585,720 Prepaid expenses 50,360 321 - 804 964 - 519 - 4,049 281 - - 57,298 Investments (Note 4)1,173,750 - - - - - - - - - - - 1,173,750 Inventory - supplies and food bank 289,686 - - - - - - - - - - - 289,686 Inventory - condominiums, federal constraints 323,076 - - - - - - - - - - - 323,076 Inventory - condominiums 402,533 - - - - - - - - - - - 402,533 Other assets - manufactured homes 486,282 - - - - - - - - - - - 486,282 Deferred loans receivable, net (Note 3)3,214,784 - - - - 821,118 - - - - 832,000 (2,147,528) 2,720,374 Investment in partnership 2,303,733 - - - - 312,083 - - - - - (2,615,816) - Construction in progress 4,875,658 - - - - - - - - - - - 4,875,658 Construction in progress, federal constraints (Note 6)1,077,239 - - - - - - - - - - - 1,077,239 Property and equipment, net, federal constraints (Note 6)6,180,994 - - - 582,857 - 1,885,208 - 707,944 287,258 - - 9,644,261 Property and equipment, net (Note 6)6,401,520 21,925 - 1,887,391 - - 20,057 - - 2,701 - - 8,333,594 Total assets 30,744,502$ 68,433$ 15,714$ 1,912,534$ 709,069$ 1,821,932$ 2,207,476$ 15,945$ 1,012,708$ 384,272$ 1,139,113$ (5,299,657)$ 34,732,041$ LIABILITIES Accounts payable 862,336$ 2,007$ 374$ 30,043$ 9,277$ -$ 15,499$ -$ 13,213$ 1,659$ -$ (48,142)$ 886,266$ Accrued liabilities 321,069 - - - 936 - 9,095 - - - - - 331,100 Accrued vacation, sick, and paid time off 182,155 - - - - - - - - - - - 182,155 Accrued interest payable 14,304 - - 1,280 1,981 - 488,864 - 1,809 - - (488,171) 20,067 Deposits payable 75,225 4,680 5,414 15,746 16,956 - 10,285 - 13,358 1,175 - - 142,839 Unearned revenue (Note 7)5,028 - - - - - - - - - - - 5,028 Notes payable (Note 8)6,907,534 - - 1,831,949 583,026 151,713 1,434,148 - 483,163 438,100 - (2,147,528) 9,682,105 Total liabilities 8,367,651 6,687 5,788 1,879,018 612,176 151,713 1,957,891 - 511,543 440,934 - (2,683,841) 11,249,560 NET ASSETS Without donor restrictions Undesignated 10,253,080 61,746 9,926 33,516 (485,964) 1,670,219 (1,635,623) 15,945 (206,779) (343,920) 1,139,113 (2,615,816) 7,895,443 HRDC General Endowment fund 5,542 - - - - - - - - - - - 5,542 Federal constrained inventory and capital assets 7,581,309 - - - 582,857 - 1,885,208 - 707,944 287,258 - - 11,044,576 Total net assets without donor restrictions 17,839,931 61,746 9,926 33,516 96,893 1,670,219 249,585 15,945 501,165 (56,662) 1,139,113 (2,615,816) 18,945,561 With donor restrictions Purpose or time restrictions 4,382,317 - - - - - - - - - - - 4,382,317 Perpetual in nature (endowment)154,603 - - - - - - - - - - - 154,603 Total net assets without donor restrictions 4,536,920 - - - - - - - - - - - 4,536,920 Total net assets 22,376,851 61,746 9,926 33,516 96,893 1,670,219 249,585 15,945 501,165 (56,662) 1,139,113 (2,615,816) 23,482,481 Total liabilities and net assets 30,744,502$ 68,433$ 15,714$ 1,912,534$ 709,069$ 1,821,932$ 2,207,476$ 15,945$ 1,012,708$ 384,272$ 1,139,113$ (5,299,657)$ 34,732,041$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATING SCHEDULE OF ACTIVITIES For the Year Ended June 30, 2020 See Independent Auditor’s Report. -60- HRDC HRDC Colo. Apts. HRDC West Edge Cottages at Menicucci Square Home Corporation Miles Building, Inc.Miles, LP Darlinton Apts., Inc. Sherwood Inn Apts., Inc. Summit Apts., Inc Boulevard Apartments BSV Rural Partners, LLC Eliminations Consolidated Total NET ASSETS WITHOUT DONOR RESTRICTIONS REVENUES Contract revenue 1,124,007$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (124,978)$ 999,029$ Rental income 55,744 53,797 33,780 189,075 204,597 11,955 366,465 - 397,793 62,260 316,904 - - 1,692,370 City/County/Local Government support 2,031,227 - - - - - - - - - - - - 2,031,227 Sale of manufactured homes and condominiums 7,210,423 - - - - - - - - - - - - 7,210,423 Contributions (including Fundraising): Grants: Federal 6,280,805 - - - - - - - - - - - - 6,280,805 State 893,961 - - - - - - - - - - - - 893,961 Private 1,278,455 - - - - - - - - - - - - 1,278,455 Food (non-cash contributions)2,920,791 - - - - - - - - - - - - 2,920,791 Pledged contributions 2,611,601 - - - - - - - - - - - - 2,611,601 Contributions & fundraising 2,994,590 - - - - - - - - - - - - 2,994,590 Net investment income 51,201 6 - 4 28 31,058 748 - 1,233 151 - 4,160 (49,621) 38,968 Income from subsidiaries 96,337 - - - - - - - - - - - (96,337) - Gain on sale of property 56,249 - - - - - - - - - - - - 56,249 Other 248,763 - - - - - 34,573 7,383 - - 35,326 16,431 - 342,476 Net assets released from program restrictions 573,668 - - - - - - - - - - - - 573,668 Total revenues 28,427,822 53,803 33,780 189,079 204,625 43,013 401,786 7,383 399,026 62,411 352,230 20,591 (270,936) 29,924,613 EXPENSES Program services: Energy 1,077,026 - - - - - - - - - - - - 1,077,026 Food and nutrition 4,738,571 - - - - - - - - - - - - 4,738,571 Senior citizens 496,126 - - - - - - - - - - - - 496,126 Community development 8,554,447 - - - - - - - - - - 368 - 8,554,815 Economic and youth development 546,348 - - - - - - - - - - - - 546,348 Housing 1,969,844 34,947 8,524 250,562 188,809 20 423,535 2,907 311,979 56,833 372,683 - (177,767) 3,442,876 Early childhood education 1,980,674 - - - - - - - - - - - - 1,980,674 Transportation 2,542,983 - - - - - - - - - - - - 2,542,983 Total program services 21,906,019 34,947 8,524 250,562 188,809 20 423,535 2,907 311,979 56,833 372,683 368 (177,767) 23,379,419 Supporting services: Administration 1,063,464 - - - - - - - - - - - - 1,063,464 Fundraising 646,749 - - - - - - - - - - - - 646,749 Total supporting services 1,710,213 - - - - - - - - - - - - 1,710,213 Total expenses 23,616,232 34,947 8,524 250,562 188,809 20 423,535 2,907 311,979 56,833 372,683 368 (177,767) 25,089,632 Change in net assets without donor restrictions 4,811,590 18,856 25,256 (61,483) 15,816 42,993 (21,749) 4,476 87,047 5,578 (20,453) 20,223 (93,169) 4,834,981 NET ASSETS WITH DONOR RESTRICTIONS Purpose or time restricted contributions 944,329 - - - - - - - - - - - - 944,329 Perpetually restricted contributions 9,209 - - - - - - - - - - - - 9,209 Net assets released from program restrictions (573,668) - - - - - - - - - - - - (573,668) Change in net assets with donor restrictions 379,870 - - - - - - - - - - - - 379,870 Change in total net assets 5,191,460 18,856 25,256 (61,483) 15,816 42,993 (21,749) 4,476 87,047 5,578 (20,453) 20,223 (93,169) 5,214,851 Net assets, beginning of year 22,376,851 61,746 9,926 33,516 96,893 1,670,219 249,585 15,945 501,165 (56,662) - 1,139,113 (2,615,816) 23,482,481 Capital contribution - - - - - - - - - - - - - - Distribution to owner - - (22,000) - - - - - - - - (275,052) 297,052 - Net assets, end of year 27,568,311$ 80,602$ 13,182$ (27,967)$ 112,709$ 1,713,212$ 227,836$ 20,421$ 588,212$ (51,084)$ (20,453)$ 884,284$ (2,411,933)$ 28,697,332$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. CONSOLIDATING SCHEDULE OF ACTIVITIES For the Year Ended June 30, 2019 See Independent Auditor’s Report. -61- HRDC HRDC Colo. Apts. HRDC West Edge Cottages at Menicucci Square Home Corporation Miles Building, Inc.Miles, LP Darlinton Apts., Inc. Sherwood Inn Apts., Inc. Summit Apts., Inc BSV Rural Partners, LLC Eliminations Consolidated Total NET ASSETS WITHOUT DONOR RESTRICTIONS REVENUES Contract revenue 912,272$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 255,000$ (95,365)$ 1,071,907$ Rental income 211,475 55,166 31,980 187,733 208,890 8,235 174,070 - 382,938 57,213 - - 1,317,700 City/County/Local Government support 2,384,583 - - - - - - - - - - - 2,384,583 Sale of manufactured homes and condominiums 344,400 - - - - - - - - - - - 344,400 Contributions (including Fundraising): Grants: Federal 6,438,959 - - - - - - - - - - - 6,438,959 State 641,441 - - - - - - - - - - - 641,441 Private 305,447 - - - - - - - - - - - 305,447 Food (non-cash contributions)3,164,087 - - - - - - - - - - - 3,164,087 Pledged contributions 585,720 - - - - - - - - - - - 585,720 Contributions & fundraising 1,794,979 - - - - - - - - - - - 1,794,979 Net investment income 94,751 5 - 4 20 47,922 486 - 2,366 114 8,320 (37,118) 116,870 (Loss) from subsidiaries (26,310) - - - - - - - - - - 26,310 - Gain on sale of property 196,401 - - - - - - - - - - - 196,401 Other 185,910 - 3,987 3,390 - - - 10,776 - - 16,430 (33,786) 186,707 Net assets released from program restrictions 107,523 - - - - - - - - - - - 107,523 Total revenues 17,341,638 55,171 35,967 191,127 208,910 56,157 174,556 10,776 385,304 57,327 279,750 (139,959) 18,656,724 EXPENSES Program services: Energy 1,326,870 - - - - - - - - - - - 1,326,870 Food and nutrition 4,693,394 - - - - - - - - - - - 4,693,394 Senior citizens 526,825 - - - - - - - - - - - 526,825 Community development 909,714 - - - - - - - - - 67,554 - 977,268 Economic and youth development 398,509 - - - - - - - - - - - 398,509 Housing 1,669,276 49,280 2,488 277,242 192,293 2,503 203,268 222 370,539 103,770 - (132,483) 2,738,398 Early childhood education 2,220,007 - - - - - - - - - - - 2,220,007 Transportation 2,343,930 - - - - - - - - - - - 2,343,930 Total program services 14,088,525 49,280 2,488 277,242 192,293 2,503 203,268 222 370,539 103,770 67,554 (132,483) 15,225,201 Supporting services: Administration 1,041,368 - - - - - - - - - - - 1,041,368 Fundraising 466,397 - - - - - - - - - - - 466,397 Total supporting services 1,507,765 - - - - - - - - - - - 1,507,765 Total expenses 15,596,290 49,280 2,488 277,242 192,293 2,503 203,268 222 370,539 103,770 67,554 (132,483) 16,732,966 Change in net assets without donor restrictions 1,745,348 5,891 33,479 (86,115) 16,617 53,654 (28,712) 10,554 14,765 (46,443) 212,196 (7,476) 1,923,758 NET ASSETS WITH DONOR RESTRICTIONS Purpose or time restricted contributions 2,862,207 - - - - - - - - - - - 2,862,207 Perpetually restricted contributions 100,372 - - - - - - - - - - - 100,372 Net assets released from program restrictions (107,523) - - - - - - - - - - - (107,523) Change in net assets with donor restrictions 2,855,056 - - - - - - - - - - - 2,855,056 Change in total net assets 4,600,404 5,891 33,479 (86,115) 16,617 53,654 (28,712) 10,554 14,765 (46,443) 212,196 (7,476) 4,778,814 Net assets, beginning of year 17,776,447 70,855 1,077 231 80,276 1,616,565 - 5,391 486,400 (10,219) 926,917 (2,250,273) 18,703,667 Capital contribution - - - - - - 278,297 - - - - (278,297) - Distribution to owner - (15,000) (24,630) 119,400 - - - - - - - (79,770) - Net assets, end of year 22,376,851$ 61,746$ 9,926$ 33,516$ 96,893$ 1,670,219$ 249,585$ 15,945$ 501,165$ (56,662)$ 1,139,113$ (2,615,816)$ 23,482,481$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. THE HOME CORPORATION SCHEDULES OF FINANCIAL POSITION June 30, 2020 and 2019 See Independent Auditor’s Report. -62- 2020 2019 ASSETS CURRENT ASSETS Cash and cash equivalents (net of reserved cash)44,122$ 22,868$ Accounts receivable (net of allowance of $-0- and $12,000, respectively)88 293 Prepaid assets 1,006 964 Total current assets 45,216 24,125 PROPERTY AND EQUIPMENT Land 193,094 193,094 Buildings and improvements 1,558,503 1,558,503 Accumulated depreciation (1,220,690) (1,168,740) Total property and equipment 530,907 582,857 OTHER ASSETS Cash reserved for tenant deposits 16,101 15,898 Cash reserved for replacements 38,731 26,724 Cash reserved for taxes and insurance 78,079 59,465 Total other assets 132,911 102,087 Total assets 709,034$ 709,069$ LIABILITIES AND NET ASSETS CURRENT LIABILITIES Operating accounts payable 14,492$ 9,277$ Accrued liabilities 2,881 2,917 Rent deposits 17,558 16,956 Current portion of long-term debt 21,464 21,464 Total current liabilities 56,395 50,614 LONG TERM LIABILITIES Long-term debt, net of current portion 539,930 561,562 Total liabilities 596,325 612,176 NET ASSETS Without donor restrictions Undesignated 112,709 96,893 Total liabilities and net assets without donor restrictions 709,034$ 709,069$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. THE HOME CORPORATION SCHEDULES OF ACTIVITIES For the Years Ended June 30, 2020 and 2019 See Independent Auditor’s Report. -63- 2020 2019 UNRESTRICTED REVENUES Rental income 202,707$ 208,222$ Tenant fees 1,890 668 Interest income 28 20 Total revenues 204,625 208,910 EXPENSES Administration Advertising and leasing 247 263 Bank and misc fees 962 88 Bookkeeping fees 4,183 3,244 Legal and accounting 800 999 Management fee 18,396 19,337 Office supplies 1,065 666 Professional fees 1,750 - Operating and maintenance Bad debts 1,376 (4,651) Contract on-site manager 10,633 14,765 Depreciation 51,950 51,950 Insurance 3,353 2,957 Interest 22,594 25,255 Key replacement 70 - Maintenance and supplies 33,912 35,987 Pest control - 1,393 Property taxes 1,720 1,923 Repairs 1,380 1,114 Snow plowing and lawn care 15,041 19,383 Utilities, phone, garbage 19,377 17,620 Total expenses 188,809 192,293 Change in net assets 15,816 16,617 Net assets without donor restrictions, beginning of year 96,893 80,276 Net assets without donor restrictions, end of year 112,709$ 96,893$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. THE HOME CORPORATION SCHEDULES OF CASH FLOWS For the Years Ended June 30, 2020 and 2019 See Independent Auditor’s Report. -64- 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from tenants 204,802$ 211,233$ Cash received for interest 28 20 Cash paid for management and bookkeeping (1,209) (22,581) Cash paid for property operations (114,873) (96,996) Cash paid for interest (15,041) (25,255) Net cash flows from operating activities 73,707 66,421 CASH FLOWS FROM FINANCING ACTIVITIES Cash paid on loan principal (21,629) (20,933) Net cash flows from financing activities (21,629) (20,933) Net change in cash and cash equivalents 52,078 45,488 Cash and cash equivalents, beginning of year 124,955 79,467 Cash and cash equivalents, end of year 177,033$ 124,955$ Reconciliation to Statements of Financial Position Cash and cash equivalents 44,122$ 22,868$ Cash reserves 132,911 102,087 177,033$ 124,955$ CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets 15,816$ 16,617$ Adjustments to reconcile change in net assets to net cash flows from operating activities: Depreciation 51,950 51,950 Change in operating assets and liabilities: Accounts receivable 205 2,343 Prepaid expenses (42) (964) Accounts payable 5,179 (4,758) Rent deposits 599 1,233 Net cash flows from operating activities 73,707$ 66,421$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX,INC. SHERWOOD INN APARTMENTS, INC. SCHEDULES OF FINANCIAL POSITION June 30, 2020 and 2019 See Independent Auditor’s Report. -65- 2020 2019 ASSETS CURRENT ASSETS Cash and cash equivalents (net of reserved cash)65,836$ 13,998$ Accounts receivable (net of allowance of $500)1,015 2,011 Prepaid expenses 2,768 4,049 Total current assets 69,619 20,058 PROPERTY AND EQUIPMENT Land 59,562 59,562 Furniture and fixtures 77,701 77,701 Buildings and improvements 1,277,660 1,277,660 Accumulated depreciation (751,995) (706,979) Total property and equipment 662,928 707,944 OTHER ASSETS Cash reserved for tenant deposits 13,266 13,144 Cash reserved for replacements 315,314 271,562 Total other assets 328,580 284,706 Total assets 1,061,127$ 1,012,708$ LIABILITIES AND NET ASSETS CURRENT LIABILITIES Operating accounts payable 14,310 13,213$ Accrued interest 2,656 1,809 Rent deposits 13,148 13,358 Current portion of long-term debt 40,507 40,507 Total current liabilities 70,621 68,887 LONG TERM LIABILITIES Long-term debt, net of current portion 402,294 442,656 Total liabilities 472,915 511,543 NET ASSETS Without donor restrictions Undesignated 588,212 501,165 Total liabilities and net assets without donor restrictions 1,061,127$ 1,012,708$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SHERWOOD INN APARTMENTS, INC. SCHEDULES OF ACTIVITIES For the Years Ended June 30, 2020 and 2019 See Independent Auditor’s Report. -66- 2020 2019 UNRESTRICTED REVENUES Rental income 394,649$ 378,561$ Tenant fees 3,144 4,377 Interest income 1,233 2,366 Total revenues 399,026 385,304 EXPENSES Administration Accounting fees 8,578 7,171 Advertising and leasing 636 867 Bank and misc fees 66 30 Legal and accounting 1,343 4,789 Management fee 32,055 30,891 Office supplies 8,418 4,293 Operating and maintenance Contract management 38,975 46,523 Depreciation 45,017 45,017 Insurance 7,349 6,499 Interest 12,550 13,604 Maintenance and supplies 57,912 118,518 Pest control 10 4 Repairs 24,237 17,495 Snow plowing and lawn care 4,709 6,298 Utilities, phone, garbage 70,124 68,540 Total expenses 311,979 370,539 Change in net assets 87,047 14,765 Net assets without donor restrictions, beginning of year 501,165 486,400 Net assets without donor restrictions, end of year 588,212$ 501,165$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SHERWOOD INN APARTMENTS, INC. SCHEDULES OF CASH FLOWS For the Years Ended June 30, 2020 and 2019 See Independent Auditor’s Report. -67- 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Cash received from tenants 398,789$ 381,561$ Cash received for interest 1,233 2,366 Cash paid for management (8,578) (30,891) Cash paid for property operations (251,508) (294,778) Cash paid for interest (3,862) (12,851) Net cash flows from operating activities 136,074 45,407 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for property and equipment - (2,559) Net cash flows from investing activities - (2,559) CASH FLOWS FROM FINANCING ACTIVITIES Cash paid on loan principal (40,362) (39,216) Net cash flows from financing activities (40,362) (39,216) Net change in cash and cash equivalents 95,712 3,632 Cash and cash equivalents, beginning of year 298,704 295,072 Cash and cash equivalents, end of year 394,416$ 298,704$ Reconciliation to Statements of Financial Position Cash and cash equivalents 65,836$ 13,998$ Cash reserves 328,580 284,706 394,416$ 298,704$ CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets 87,047$ 14,765$ Adjustments to reconcile change in net assets to net cash flows from operating activities: Depreciation 45,017 45,017 Change in operating assets and liabilities: Accounts receivable 996 (1,377) Prepaid expenses 1,281 (1,835) Accounts payable 1,097 (12,678) Accrued interest 847 753 Rent deposits (211) 762 Net cash flows from operating activities 136,074$ 45,407$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. UNRESTRICTED CORPORATE FUNDS SCHEDULES OF FINANCIAL POSITION June 30, 2020 and 2019 See Independent Auditor’s Report. -68- 2020 2019 ASSETS Cash - operating savings 153,887$ 153,238$ Cash - operating checking 966,003 554,209 Less: cash currently committed to HRDC capital projects (799,570) (1,030,086) Unrestricted corporate cash available 320,320 (322,639) Investments in marketable securities 393,304 388,242 Accounts receivable 3,047 3,350 Interest receivable 1,198 1,291 Prepaid expense 9,696 9,696 Escrow account - 10,000 Loans receivable 303,394 327,498 Intercompany loans receivable 1,935,573 2,133,833 Investment in subsidiaries 650,185 650,185 Buildings 535,365 500,397 Land 56,267 56,267 Accumulated depreciation (240,378) (216,066) Total assets 3,967,971$ 3,542,054$ LIABILITIES Accounts payable 15,499$ 25,094$ Rental deposits 675 675 Loan payable 188,365 198,628 Intercompany loans payable 164,307 166,755 Total liabilities 368,846 391,152 NET ASSETS Net assets, beginning of fiscal year 3,150,902 3,214,669 Change in net assets, current year 448,223 (63,767) Total net assets 3,599,125 3,150,902 Total liabilities and net assets 3,967,971$ 3,542,054$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. UNRESTRICTED CORPORATE FUNDS SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For the Years Ended June 30, 2020 and 2019 See Independent Auditor’s Report. -69- 2020 2019 REVENUE Donations - unrestricted (HRDC Greatest Needs)629,650$ 261,335$ Fundraising income - unrestricted (HRDC Greatest Needs)105,510 79,411 Rent income 45,300 56,118 Partnership distribution income 8,466 7,516 Loan interest income 7,303 8,328 Investment interest income 2,708 13,007 Realized and unrealized gain on investments 8,427 27,474 Total revenues 807,364 453,189 EXPENSES Salaries and fringe 342,747 231,652 Admin.service cost allocations 51,737 44,717 Bad debt expense - 6,844 Business meals/meetings 2,596 4,341 Contract services 47,887 13,572 Depreciation expense 24,312 24,312 Dues 3,320 9,411 Equipment and supplies 12,297 22,282 Fundraising expense 11,722 8,291 Insurance 5,494 5,188 Interest expense 14,692 11,942 Investment management fees 3,365 3,267 Janitorial expense 4,972 6,160 Legal 450 628 Other 7,490 8,222 Outreach/advertising/public relations 17,421 40,203 Property management 2,400 2,500 Property taxes 508 1,356 Recognition 7,196 10,723 Repairs and maintenance 2,648 8,408 Software 16,117 7,588 Space 16,547 11,740 Travel/training 6,563 10,663 Utilities 5,298 7,392 Total expenses 607,779 501,402 REVENUE OVER/(UNDER) EXPENSES 199,585 (48,213) Transfers in 877,564 346,758 Transfers out (628,926) (362,312) Net assets, beginning of fiscal year 3,150,902 3,214,669 Net assets, end of fiscal year 3,599,125$ 3,150,902$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -70- Budget Actual REVENUE Grant 401,531$ 370,158 Total Revenue 401,531$ 370,158 EXPENSES Administration 40,153$ 40,153 Program Support 361,378 361,378 Total Expenses 401,531$ 401,531 Revenue Over/Under Expenses -$ - Transfer In -$ Net Assets at July 1, 2018 0$ Net Assets at September 30, 2019 0$ WEATHERIZATION ASSISTANCE Grant Perio d: July 1, 2018 to September 30, 2019 - LIEAP Grant Number: DPHHS 18-028-16007-0 ----LIEAP---- HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -71- Budget Actual REVENUE Grant 208,648$ 185,482 Total Revenue 208,648$ 185,482 EXPENSES Administration 22,996$ 14,049 Program Operations 143,268 134,171 Liability Insurance 200 113 Financial Audit 1,000 1,176 Training & Technical Assistance 17,000 19,153 Health & Safety 24,184 16,821 Total Expenses 208,648$ 185,482 Revenue over/under expenses -$ - Transfer In -$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 0$ WEATHERIZATION ASSISTANCE Grant Period: July 1, 2019 to June 30, 2020 - DOE Grant Number: DPHHS 19-028-30027-0 ----DEPT OF ENERGY---- HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -72- Budget Actual REVENUE Grant 73,205$ 73,205 Total Revenue 73,205$ 73,205 EXPENSES 73,205$ Salaries and Fringe Benefits 61,588 Supplies 850 Communication 1,520 Space Costs 3,607 Travel 871 Office Costs 4,769 Direct Services 0 Total Expenses 73,205$ 73,205 Revenue Over/Under Expenses (0)$ Net Assets at October 1, 2017 0$ Net Assets at September, 2019 0$ LIEAP ADMINISTRATION PROGRAM Grant Period: October 1, 2017 to September 30, 2019 - ADMIN Grant Number: DPHHS 18-028-13007-0 ----LIEAP ADMIN---- HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -73- ----LIEAP CRF---- Actual REVENUE Grant 170,864$ Total Revenue 170,864$ EXPENSES Direct Services 170,864$ Total Expenses 170,864$ Revenue Over/Under Expenses -$ Net Assets at November 1, 2018 0$ Net Assets at November 13, 2019 0$ LOW INCOME ENERGY ASSISTANCE PROGRAM Grant Period: November 1, 2018 to November 13, 2019 - Contingency Revolving Fund (CRF) Grant Number: DPHHS 19-028-13007-0 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -74- Budget Actual Budget Actual REVENUE Grant 32,807$ 32,807 52,630 52,630 Total Revenue 32,807$ 32,807 52,630 52,630 EXPENSES Salaries & Fringe Benefits 26,284 30,806 44,455 42,624 Communications 3,714 214 175 Space Costs 1,809 1,695 3,000 2,193 Travel 1,000 0 1,000 511 Office Costs 92 4,174 7,126 Total Expenses 32,807$ 32,807 52,630 52,630 Revenue Over/Under Expenses 0$ 0 Net Assets at October 1, 2017 0$ 0 Net Assets at September 30, 2019 0$ 0 ----CLIENT ED--------OUTREACH---- LIEAP CLIENT EDUCATION & OUTREACH PROGRAM Grant Period: October 1, 2017 to September 30, 2019 - CLIENT ED October 1, 2017 to September 30, 2019 - OUTREACH Grant Numbers: DPHHS 18-028-13007-0 DPHHS 18-028-15057-0 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -75- Budget Actual REVENUE Grant 359,966$ 359,966 Total Revenue 359,966$ 359,966 EXPENSES NWE Program Overhead 125,988$ 124,113 NWE Program Operations 233,978 236,971 Total Expenses 359,966$ 361,084 Revenue Over/Under Expenses 0$ (1,118) Transfer In 1,118$ Net Assets at January 1, 2019 0$ Net Assets at December 10, 2019 0$ NORTHWESTERN ENERGY WEATHERIZATION PROGRAM Grant Perio d: January 1, 2019 to December 10, 2019 Grant Number: DPHHS 19-028-33007-0 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -76- Actual REVENUE General Energy Funds 2,606$ USB Funds 28,317 Energy Deposits 3,765 TEAM: Temporary Energy Assist for Minor Needs 254 TEAM: Deposits 335 Water Heater 1,339 Administrative Funds 6,904 Donations 815 Total Revenues 44,336$ EXPENSES Energy Assistance 3,123$ Energy Assistance - USB 28,317 Energy Assistance - Deposits 3,765 Energy Assistance - TEAM 254 Energy Assistance - TEAM Deposits 335 Energy Assistance - Water Heater 1,339 Administration 22,853 Total Expenses 59,986$ Revenue Over/Under Expenses (15,650)$ Transfer In/Out 0$ Net Assets at July 1, 2019 29,124$ Net Assets at June 30, 2020 13,474$ ENERGY SHARE Grant Period: July 1, 2019 to June 30, 2020 Grant Number: FY 2019-2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -77- Actual REVENUE Energy Share Fees/Reimb 2,664$ Contract Income 400 Total Revenue 3,064$ EXPENSES Labor and Materials 2,044$ Subcontractor Services 540 Total Expenses 2,584$ Revenue over/under expenses 480$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 480$ SUPPLEMENTAL WEATHERIZATION ASSISTANCE Grant Period: July 1, 2019 to June 30, 2020 - ESOM HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -78- Budget Actual REVENUE Grant 39,500$ 39,500 Total Revenue 39,500$ 39,500 EXPENSES Salaries and Fringe Benefits 27,000 25,628 Travel and Training 9,500$ 7,396 Administration 3,000 8,896 Total Expenses 39,500$ 41,920 Revenue Over/Under Expenses -$ (2,420) Transfer In 2,420$ Net Assets at October 1, 2017 0$ Net Assets at September 30, 2019 (0)$ LISC Grant Perio d: October 1, 2017 to September 30, 2019 - LISC Grant Number: 41189-0038 ----LISC---- HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -79- Budget Actual REVENUE Grant 16,830$ 16,830 Total Revenue 16,830$ 16,830 EXPENSES Salaries and Fringe Benefits 15,000 15,995 Administration 1,830$ 1,668 Total Expenses 16,830$ 17,663 Revenue Over/Under Expenses -$ (833) Transfer In 833$ Net Assets at July 1, 2018 0$ Net Assets at September 30, 2019 0$ HEALTHY HOUSING HOUSING FIRST VILLAGE Grant Perio d: July 1, 2018 to September 30, 2019 - LISC Grant Number: 41189-0040 ----LISC---- HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -80- Budget Actual REVENUE Grant 30,000$ 30,000 Total Revenue 30,000$ 30,000 EXPENSES Salary and Fringe Benefits 27,273 31,622 Administration 2,727$ 1,506 Total Expenses 30,000$ 33,128 Revenue Over/Under Expenses -$ (3,128) Transfer Out 3,128$ Net Assets at February 1, 2019 0$ Net Assets at December 31, 2019 0$ BRIDGES TO CAREER OPPORTUNITIES Grant Period: February 1, 2019 to December, 31 2019 Grant Number: 41189-0042 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -81- Actual REVENUE MDOC Contract Income 201,658$ NWMT Contract Income 2,023 Other Income 0 Total Revenue 203,681$ EXPENSES Salaries & Fringe Benefits 156,909$ Travel & Training 4,187 Space 11,382 Office Costs 8,902 Insurance 1,370 Communications 1,274 Ready to Rent Program - Housing Assistance Payments 8,255 Other 911 Total Expenses 193,190$ Revenue Over/Under Expenses 10,491$ Net Assets at July 1, 2019 35,812$ Net Assets at June 30, 2020 46,303$ SECTION 8 HOUSING PROGRAM Grant Period: July 1, 2019 to June 30, 2020 Grant Number: MT DOC 20-745-0006 NeighborWorks Montana (NWMT) HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -82- Budget Actual REVENUE Grant 64,667$ 64,667 Total Revenue 64,667$ 64,667 EXPENSES Prevention of Homelessness - Security Deposits 3,250$ 3,250 Prevention of Homelessness - Rental Assistance 5,283 5,283 Prevention of Homelessness - Rental Assistance Medium 566 566 Prevention of Homelessness - Rental Assistance Arrears 9,696 9,696 Prevention of Homelessness - Rental Assistance Medium Term Arrears - - Prevention of Homelessness - Housing Search & Placement 7,181 13,407 Homeless Services - Security Deposits 13,373 13,373 Homeless Services - Rental Assistance 8,640 8,640 Homeless Services - Rental Assistance Medium Term 1,881 1,881 Homeless Services - Rental Assistance Arrears 0 0 Homeless Services - Housing Search & Placement 11,101 14,524 Administration 3,696 7,306 Total Expenses 64,667$ 77,926 Revenue Over/Under Expenses 0$ (13,259) Transfer In 13,259$ Net Assets at August 1, 2018 0$ Net Assets at July 31, 2019 0$ HUD EMERGENCY SHELTER GRANTS PROGRAM Grant Period: August 1, 2018 to July 31, 2019 Grant Number: DPHHS 18-028-51007-0 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -83- April 1, 2019 to March 31, 2020 Actual REVENUE Private Grant Revenue 35,000$ United Way 21,000 Donations 5,386 MHN / NWMT 31,761 Total Revenues 93,146$ EXPENSES Prevention of Homelessness 12,833$ Homeless Services 0 Salaries & Fringe Benefits 74,165 Supportive Services 4,292 Office Expenses 13,510 Total Expenses 104,801$ Revenue Over/Under Expenses (11,654)$ Transfer In 32,126$ Paycheck Protection Program Loan Proceeds 1,374 Transfer Out (15,755)$ Net Assets at July 1, 2019 -$ Net Assets at June 30, 2020 6,091$ HOME TO STAY - EMERGENCY SERVICES Report Period: July 1, 2019 to June 30, 2020 Grant Number: MT HomeOwnership Network (MHN) / NeighborWorks MT (NWMT) HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -84- Food Bank Gallatin County Housing Park County Housing Actual Actual Actual REVENUE Grant 18,835$ 19,605 3,236 Total Revenue 18,835$ 19,605 3,236 EXPENSES Preventative & Homeless Services 0$ 19,605 3,236 Food Expense 18,835$ 0 0 Total Expenses 18,835$ 19,605 3,236 Revenue Over/Under Expenses 0$ (0) (0) Transfer Out -$ - - Net Assets at July 1, 2019 0$ 0 0 Net Assets at June 30, 2020 0$ 0 0 FEDERAL EMERGENCY MANAGEMENT AGENCY Grant Period: July 1, 2019 to June 30, 2020 Grant Number: LRO 556000-003 Phase 35 Food LRO 556000-002 Phase 35 Gallatin County Housing LRO 559600-008 Phase 35 Park County Housing HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -85- Budget Actual REVENUES Grant 33,885$ 33,885 Total Revenues 33,885$ 33,885 EXPENSES Rental Assistance 30,066$ Security Deposit Assistance 0 Case Management 2,248 Administration 1,713 Total Expenses 34,027$ Revenue Over/Under Expenses (142)$ Transfer In/Out 142$ Net Assets at October 1, 2018 0$ Net Assets at September 29, 2019 0$ RYAN WHITE PART B HIV CARE Grant Period: October 1, 2018 to September 29, 2019 Grant Number: 17-07-4-51-310-0 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -86- Budget Actual REVENUE Grant 60,000$ 43,073 Total Revenue 60,000$ 43,073 EXPENSES Salary and Fringe Benefits 35,000 17,239 Program Operations 25,000$ 25,000 Total Expenses 60,000$ 42,239 Revenue Over/Under Expenses -$ 833 Transfer Out (833)$ Net Assets at November 1, 2018 0$ Net Assets at December 31, 2019 0$ PARTNERSHIPS FOR PERMANENTLY SUPPORTIVE HOUSING Grant Perio d: November 1, 2018 to December, 31 2019 Grant: Montana Healthcare Foundation HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -87- Budget Actual REVENUE Grant 110,353$ 110,353 Donations 400 Total Revenues 110,353$ 110,753 EXPENSES 110,353$ Rental Assistance 84,586 Security Deposit Assistance 8,619 Case Management 9,151 Administration 10,750 Total Expenses 110,353$ 113,106 Revenue Over/Under Expenses (2,353)$ Transfer In 2,353$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 0$ RAPID RE-HOUSING Grant Period: July 1, 2019 to June 30, 2020 Grant Number: HUD MT0055L8T001803 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -88- Actual REVENUE Donations 343,651$ City of Bozeman 25,000 Fund Raising 39,225 Rental Income 12,100 Total Revenues 419,976$ EXPENSES Salaries & Fringe Benefits 260,578$ Contract Services 1,108 Rent 79,100 Travel & Training 6,555 Supplies 6,058 Communications 1,649 Office Costs 7,640 Equipment 4,814 Supportive Services 6,607 Other 3,600 Utilities 12,523 Maintenance & Repairs 4,658 Fund Raising 2,007 Insurance 3,916 Advertising - Audit 1,472 Total Expenses 402,284$ Revenue Over/Under Expenses 17,691$ Transfer In/Out (29,121) Paycheck Protection Program 7,221 Net Assets at July 1, 2019 47,889$ Net Assets at June 30, 2020 43,680$ WARMING CENTER Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -89- Actual REVENUE Donations 41,959$ Private Grant Revenue 11,000 United Way Income 5,000 Fundraising 257 Total Revenues 58,216$ EXPENSES Salaries & Fringe Benefits 55,679$ Rent 9,875 Travel & Training 1,469 Supplies 418 Communications 963 Office Costs 1,991 Other 195 Utilities 940 Maintenance & Repairs 535 Fund Raising 310 Insurance 620 Advertising 144 Audit 362 Total Expenses 73,501$ Revenue Over/Under Expenses (15,285)$ Transfer In 15,285$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 0$ LIVINGSTON WARMING CENTER - PILOT Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -90- Actual REVENUE Contributions: Food *2,797,928$ United Way 2,000 Gallatin County Senior Mill Levy 10,500 Other 1,295,310 Fund Raising 176,229 Senior Food Contract Income - Other Grant Revenue 10,800 Other Income 8,290 Total Revenues 4,301,058$ EXPENSES Salaries & Fringe Benefits 511,083$ Travel & Training 1,863 Warehouse Space 11,486 Communication 3,416 Utilities, Garbage, Snow Removal 14,965 Fund Raising 13,558 Outreach/Public Relations 1,689 Vehicle 5,305 Repairs & Maintenance 10,738 Supplies 10,213 Insurance 15,107 Food Purchases 57,013 Food Distributions *2,706,564 Office costs 17,716 Audit 2,435 Interest Expense 3,422 Meat Processing - Senior Food Program - Depreciation Expense 29,523 Other 9,746 Total Expenses 3,425,843$ Revenue Over/Under Expenses 875,215$ Transfer Out (35,000) Net Assets at July 1, 2019 792,973$ Net Assets at June 30, 2020 1,633,188$ * Food Contributions In-Kind valued at $1.62 per pound GALLATIN VALLEY FOOD BANK Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -91- Grant Number: DPHHS 19-027-21002-0 Actual REVENUE Fund Raising 500 Senior Food Contract Income 219,923 Other Grant Revenue - Other Income - Contributions 6,108 Total Revenues 226,531$ EXPENSES Salaries & Fringe Benefits 15,902$ Fund Raising 34 Supplies 218 Insurance 105 Food Purchases 1,680 Food Distributions *203,402 Office costs 710 Audit 310 Other 472 Total Expenses 222,831$ Revenue Over/Under Expenses 3,700$ Net Assets at October 1, 2018 16,408$ Net Assets at September 30, 2019 20,108$ * Food Contributions In-Kind valued at $1.62 per pound GALLATIN VALLEY FOOD BANK - SENIOR CFSP Report Period: October 1, 2018 to September 30, 2019 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -92- Actual REVENUES Donations 143,113$ Meals Service (Net of Discounts)54,824 Catering & Space Rental 123,989 City of Bozeman Support 25,000 Fund Raising 66,912 Private Grant 4,300 Kitchen Rental Fees 2,762 Catering Private Grant 5,845 Total Revenues 426,745$ EXPENSES Salaries & Fringe Benefits 337,763$ Contract Services 2,859 Parking Lot Space 13,200 Travel & Training 4,355 Communications 2,634 Utilities, Garbage, Grounds Maintenance 31,000 Fund Raising 7,751 Outreach/Public Relations 5,445 Vehicle 1,371 Equipment - Repairs & Maintenance 7,760 Supplies 17,776 Insurance 5,859 Food Purchases 84,962 Office Costs 6,776 Audit 3,528 Interest Expense 7,322 Depreciation Expense 11,880 Other 12,509 Total Expenses 564,749$ Revenue Over/Under Expenses (138,004)$ Transfers In From: Summer Lunch 5,099$ HRDC Unrestricted Donations (Greatest Need)43,846$ Paycheck Protection Program Loan Proceeds 69,059$ GVFB 20,000$ Net Assets at July 1, 2019 (230,858)$ Net Assets at June 30, 2020 (230,858)$ FORK AND SPOON HOMESTYLE KITCHEN Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -93- Actual REVENUE Private Grant Revenue 2,000$ Fund Raising 18,458 Donations 40,223 Restricted Donations 10,000 Total Revenues 70,681$ EXPENSES Salaries & Fringe Benefits 16,361$ Travel and Training 591 Fund Raising 1,449 Outreach - Supplies 56 Insurance 169 Food Purchases 40,700 Office Costs 613 Audit 355 Other - Total Expenses 60,295$ Revenue Over/Under Expenses 10,386$ Paycheck Protection Program Loan Proceeds 2,261$ Net Assets at July 1, 2019 58,916$ Net Assets at June 30, 2020 71,563$ HEALTHY KIDSPACK PROGRAM Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -94- Actual REVENUE Summer Lunch Contract Income 91,373$ Donations 614 Other Income - Private Grant 2,400 Total Revenue 94,387$ EXPENSES Salaries & Fringe Benefits 43,695$ Vehicle 799 Travel & Training 1,741 Supplies 1,734 Office Costs 2,847 Food Purchases 38,471 Total Expenses 89,287$ Revenue Over/Under Expenses 5,099$ Transfer Out (5,099)$ Net Assets at October 1, 2018 -$ Net Assets at September 30, 2019 (0)$ SUMMER LUNCH PROGRAM Grant Period: October 1, 2018 to September 30, 2019 Grant Number: MT OPI 16-6512 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -95- Actual REVENUE Contributions: Food *81,433$ United Way 2,500 Other 91,030 Private Grant - Building Fund 11,310 Fund Raising 6,389 Total Revenues 192,661$ EXPENSES Salaries & Fringe Benefits 44,590$ Travel & Training 107 Communications 1,906 Rent 1,200 Utilities, Garbage, Snow Removal 3,561 Fund Raising 3,241 Vehicle 988 Repairs & Maintenance 850 Insurance 2,066 Food Purchases 2,081 Food Distributions *84,850 Office Costs 2,341 Audit 769 Other 1,763 Total Expenses 150,313$ Revenue Over/Under Expenses 42,349$ Transfer In 29,000$ Paycheck Protection Program Loan Proceeds 12,980$ Net Assets July 1, 2019 50,751$ Net Assets at June 30, 2020 135,080$ * Food Contributions In-Kind valued at $1.62 per pound HEADWATERS AREA FOOD BANK Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -96- Actual REVENUE Contributions: Food *60,667$ United Way - Big Sky Resort Tax 26,296 Other 145,168 Private Grant 17,509 Fund Raising 6,187 Total Revenues 255,828$ EXPENSES Salaries & Fringe Benefits 55,296$ Travel & Training 0 Communic ations 1,254 Space Rental 18,900 Utilities, Garbage, Snow Removal 3,150 Fund Raising 2,488 Outreach/Public Relations 519 Vehicle 2,956 Repairs & Maintenance 4,813 Insurance 1,380 Food Purchases 16,294 Food Distributions *45,339 Office Costs 2,944 Audit 775 Meat Processing 0 Other 748 Total Expenses 156,856$ Revenue Over/Under Expenses 98,972$ Net Assets at July 1, 2019 34,031$ Net Assets at June 30, 2020 133,003$ * Food Contributions In-Kind valued at $1.62 per pound BIG SKY COMMUNITY FOOD BANK Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -97- Budget Actual REVENUE Title III Revenue 52,766$ 52,766 Title III Revenue - Respite 19,597 19,597 United Way 8,000 6,000 Donations 25,422 1,022 Other Grant Revenue 17,000 22,000 Total Revenues 122,785$ 101,385 EXPENSES Salaries & Fringe Benefits 104,535$ 106,548 Supplies 650 705 Communications 250 340 Travel & Training 1,300 1,582 Insurance 1,115 1,240 Audit 250 484 Other - Program Support 16,263 1,451 Total Expenses 124,363$ 112,349 Revenue Over/Under Expenses 0$ (10,964)$ Paycheck Protection Program Loan Proceeds 21,356$ Net Assets at July 1, 2019 27,039$ Net Assets at June 30, 2020 37,431$ IN HOME SERVICES Grant Period: July 1, 2019 to June 30, 2020 Grant Number: Area IV Agency on Aging 2020-004-013 (Gallatin County) HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -98- Budget Actual REVENUE Title III Revenue 24,500$ 24,500 Title III Revenue - Respite 18,750 18,750 United Way 6,000 6,000 Park County 0 Donations 0 0 Other Grant Revenue 11,000 Total Revenues 60,250$ 49,250 EXPENSES Salaries & Fringe Benefits 47,993$ 56,778 Supplies 700 313 Communicatio ns 0 0 Travel & Training 1,450 433 Building Space 0 Insurance 750 676 Audit 200 341 Other - Program Support 9,157 305 Total Expenses 60,250$ 58,846 Revenue Over/Under Expenses 0$ (9,596)$ Paycheck Protection Program Loan Proceeds 11,871 Net Assets at July 1, 2019 4,499$ Net Assets at June 30, 2020 6,773$ IN HOME SERVICES - PARK COUNTY Grant Period: July 1, 2019 to June 30, 2020 Grant Number: Area IV Agency on Aging 2020-004-013 (Park County) HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -99- Budget Actual REVENUE Grant 50,000$ 50,000 Other Income 5,000 0 Total Revenue 55,000$ 50,000 EXPENSES Salaries & Fringe Benefits 47,500$ 46,903 Supplies 500 191 Communications 1,750 Travel 750 766 Insurance 500 17 Audit 500 250 Other 3,500 2,772 Total Expenses 55,000$ 50,899 Revenue Over/Under Expenses 0$ (899) Transfer In 899$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 0$ STATE HEALTH INSURANCE PROGRAM (SHIP) - INFORMATION & ASSISTANCE Grant Period: July 1, 2019 to June 30, 2020 Grant Number: Area IV Agency on Aging 2020-004-013 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -100- Budget Actual In-Kind Excess Non- Federal Share REVENUE Federal Grant 86,161$ 86,161 Federal Grant - 3-Year Augmentation Carryfwd 244,222 136,627 Gallatin County Senior Mill Levy 11,000 11,000 United Way 5,000 5,000 Title III Grant 6,425 3,934 2,491 Donations 14,746 10,765 Work site 6,506 1,375 Other Grant Revenue 20,000 In-Kind 17,330 16,224 Total Revenues 411,390$ 254,862 16,224 2,491 EXPENSES Personnel Expense Project Director 57,923$ 51,509 2,163 Program Coordinators 36,411 34,218 Senior Reach Program Manager 28,080 21,957 Fiscal Staff 6,123 6,614 Executive 4,000 5,053 Personnel 3,163 4,549 Receptionists 1,721 2,229 Fringe Benefits 20,363 22,778 328 Agency-wide Insurance 3,750 1,581 Local Travel 500 1,229 Long Distance Travel 4,500 593 Supplies 5,000 3,655 Computer Service 1,650 3,437 Senior Reach: Community Health Partners 47,860 47,860 Senior Reach Licensing Fee 6,200 6,200 Communications 5,000 3,124 Printing 5,977 376 2,531 Space 24,694 19,344 9,694 Audit 567 808 Other 500 370 Volunteer Expense Meals 1,000 804 Insurance 1,060 1,221 Travel 2,009 430 3,999 Recognition 10,571 9,623 Augmentation Year 3 101,536 Total Expenses 380,158$ 249,563 16,224 2,491 Revenue Over/Under Expenses 31,232$ 5,299 0 0 Net assets at April 1, 2019 0$ 0 0 Net assets at March 31, 2020 5,299$ 0 0 RETIRED SENIOR VOLUNTEER PROGRAM Grant Period: April 1, 2019 to March 31, 2020 Grant Number: CNCS 18SRPMT002 Area IV Agency on Aging (Title III) 2020-004-013 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -101- Budget Actual REVENUE Grant 9,537$ 9,535 Total Revenue 9,537$ 9,535 EXPENSES Salaries & Fringe Benefits 9,537$ 8,216 Travel & Training 86 Space 1,233 Total Expenses 9,537$ 9,535 Revenue Over/Under Expenses 0$ 0$ Transfer In -$ Net Assets at June 1, 2019 0$ Net Assets at May 31, 2020 0$ SENIOR MEDICARE PATROL Grant Period: June 1, 2019 to May 31, 2020 Grant Number: Area XI Agency on Aging MOU HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -102- Budget Actual REVENUE Grant 34,577$ 33,174 Total Revenue 34,577$ 33,174 EXPENSES Salaries & Fringe Benefits 26,408$ 26,886 Travel & Training 3,571 2,391 Other 4,598 8,531 Total Expenses 34,577$ 37,808 Revenue Over/Under Expenses 0$ (4,634.05) Transfer In from Sherwood Apts Inc 4,635$ Net Assets at January 1, 2019 0$ Net Assets at December 31, 2019 0$ SHERWOOD SERVICE COORDINATOR Grant Period: January 1, 2019 to December 31, 2019 Grant Number: MFSC179734-01-01 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -103- Capital Budget Actual Actual REVENUE Title III Revenue 21,400$ 21,400 ParaTransit Contract - Streamline 101,500 101,500 MT DOT Transade 210,717 210,717 MT DOT Capital Grants - Vehicles 0 - 29,084 MT DOT CARES Funding - 212,024 Local Revenue Friends of Galavan - 3,500 Gallatin County 78,500 78,500 City of Bozeman 105,000 122,183 City of Belgrade 10,000 10,000 United Way 10,000 5,000 Rider Donations 15,000 4,884 Contributions 2,000 2,655 Other (Advertising) Income 8,400 - Storage Space Rental Income 4,000 5,596 Investment Income/Other 10,500 553 Adopt-A-Bus - 0 Contract Income-Headstart/Family Promise 6,400 - Sale Proceeds 0 0 Other - 6,422 Total Revenues 583,417$ 784,934 29,084 EXPENSES Salaries & Fringe Benefits 380,000$ 349,499 HRDC Admin. Cost Allocations 45,000 44,028 Gas & Oil 55,000 42,980 Repairs & Maintenance 40,000 36,685 Insurance 18,000 20,008 Voucher Program Contract - - Bus Barn Operating Costs 5,000 5,898 Travel & Training 2,500 411 Advertising/PR 1,500 457 Cleaning - 12,150 Supplies 3,500 4,134 Communications 4,500 6,090 Audit 1,000 1,386 Other (incl RM software)5,000 11,145 Equipment-Other 500 413 Equipment-Vehicles 0 0 34,216 Total Expenses 561,500$ 535,283 34,216 Revenue Over/Under Expenses 21,917$ 249,651 (5,132) Operating Funds Applied to Capital (5,132)$ 5,132 Transfer Out (1,995) Transfer In - Smyth Interest Income 10,500$ Net Assets at July 1, 2019 23,845$ 0 Net Assets at June 30, 2020 276,868$ 0 GALAVAN / SENIOR TRANSPORTATION Grant Period: July 1, 2019 to June 30, 2020 Grant Names: Not for Profit Work & Services Agreement - 2020318 MT DOT 111074 - Section 5311 Capital MT DOT - TransAde HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -104- Montana State University - Contract # CS180031 Streamline Bridger Bowl Service Contract City of Bozeman - Transfer Station Contract Budget Actual Capital Actual REVENUE MT DOT Operating Grant 1,150,046$ 1,602,247 MT DOT Capital Grant - Vehicle Repair 0 18,581 Local Revenue Associated Students of MSU 164,500 188,556 Contract Income 101,000 135,125 City of Bozeman 150,000 150,000 City of Belgrade 8,000 10,000 Gallatin County - 20,000 Montana State University 112,000 69,167 Other (Advertising) Income 2,000 85 Storage Space Rental Income 14,000 14,200 Contributions 1,000 31,305 Insurance Revenue - 4,858 Total revenues 1,702,546$ 2,225,543 18,581 EXPENSES Salaries & Fringe Benefits 145,000$ 124,490 HRDC Admin Cost Allocations 63,000 63,560 Contract Services 860,465 935,056 Gas & Oil 188,000 116,681 Repairs & Maintenance 250,000 175,856 24,312 Insurance 59,000 77,717 Bus Barn Operating Costs 13,000 16,271 Parking Garage Cleaning/Security 15,000 13,317 - Travel & Training 8,000 2,560 Advertising/PR & Outreach 40,000 70,474 Supplies 5,000 5,069 Communications 8,000 9,681 Space 0 0 Audit 2,000 2,080 Other 2,000 473 Equipment - Other 1,000 3,366 Equipment - Vehicles 0 23,419 Equipment - Vehicle Wraps 0 0 Equipment - GPS Tracking Software 20,000 21,826 Bus Shelters/Street Furniture 0 0 Transportation Development Plan - 105,440 Total Expenses 1,679,465$ 1,767,337 24,312 Revenue Over/Under Expenses 23,081$ 458,206 (5,731) Operating Funds Applied to Capital (5,731)$ 5,731 Transfer Out (212,024) - Net Assets at July 1, 2019 420,046$ 0$ Net Assets at June 30, 2020 660,497$ 0$ STREAMLINE BUS / PUBLIC TRANSPORTATION Grant Period: July 1, 2019 to June 30, 2020 Grant Names: MT DOT 110742 - Section 5311 Operating MT DOT 110656 - Section 5311 Capital Grant - Vehicle Repair HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -105- Budget Actual Budget Actual REVENUE Grant 160,042$ 160,042 7,145 7,145 Other Income 0 0 0 0 Total Revenues 160,042$ 160,042 7,145 7,145 EXPENSES In-School 40,010$ 4,723 1,786 154 Out-of-School 120,031 158,800 5,359 6,999 Total Expenses 160,041$ 163,524 7,145 7,153 Revenue Over/Under Expenses 1$ (3,482) 0 (8) Transfer In 3,482$ 0 Net Assets at July 1, 2019 0$ 0 Net Assets at June 30, 2020 0$ (8) WORKFORCE INNOVATION & OPPORTUNITY ACT - YOUTH Grant Period: July 1, 2019 to June 30, 2020 Grant Name: DLISF13_WIAYouth09-6 Modification #1 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -106- Budget Actual REVENUE Grant 107,100$ 107,900 Other Income Total Revenues 107,100$ 107,900 EXPENSES Salaries & Fringe Benefits 83,500$ 83,567 Rent Expenses 3,000 3,110 Administrative 8,500 16,802 Travel & Training 6,600 7,102 Equipment & Supplie s 3,000 1,593 Youth Stipends/Support 2,200 2,714 NYTD Survey Incentives 300 120 Total Expenses 107,100$ 115,008 Revenue Over/Under Expenses -$ (7,108) Transfer In 7,108$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 0$ CHAFEE FOSTER CARE INDEPENDENCE PROGRAM Grant Period: July 1, 2019 to June 30, 2020 Contract Number: DPHHS 20193FCIP0009 Action Inc (Butte) MOU for Combined Service Area HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -107- Actual REVENUE Donations 69,469$ Gallatin County 545 United Way 5,000 Fund Raising Income 4,354 Private Grants 12,500 Insurance Revenue 39,578 Misc Income 255 Total Revenues 131,701$ EXPENSES Salaries & Fringe Benefits 97,487$ Youth Stipends/Support 2,239 Rent 4,400 Utilities & Phone 3,580 Maintenance & Repairs 3,775 Supplies/Office Costs 2,980 Travel & Training 2,571 Legal & Audit 875 Insurance 3,405 Taxes 2,639 Interest Expense 20,959 Depreciation 24,975 Other Expenses 5,934 Total Expenses 175,818$ Revenue Over/Under Expenses (44,116)$ Paycheck Protection Program Loan Proceeds 36,321$ Transfers Out Foster Youth Support (6,775)$ WIOA Youth Support (3,482)$ Net Assets at July 1, 2019 60,724$ Net Assets at June 30, 2020 42,673$ BLUEPRINT - YOUTH TRANSITIONAL LIVING HOUSE Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -108- Budget Actual In-Kind REVENUE Grant 1,571,938$ 1,599,373 USDA Child Care Food Contract 95,000 108,492 Other Income 9,100 10,665 In-kind 392,985 318,496 Total Revenues 2,069,023 1,718,530$318,496$ EXPENSES Salaries 1,011,472$ 1,062,848 Fringe Benefits 278,459 309,615 Travel/Training 9,500 28,474 Supplies 14,034 30,393 Contract Services 8,225 16,192 Other 354,348 291,481 In-kind Expenses 392,985 318,496 Total Expenses 2,069,023$ 1,739,003 318,496 Revenue Over/Under Expenses 0$ (20,473) (0) Transfer In 20,473$ Net Assets at April 1, 2019 0$ 0 Net Assets at March 31, 2020 (0)$ (0) HEAD START PROGRAM Grant Period: April 1, 2019 to March 31, 2020 Grant Number: HHS 08CH010871-01-01 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -109- Budget Actual REVENUE Grant 30,000$ 1,437 Contract Income 88,000 62,258 Other Income 10,000 10,000 Total Revenues 128,000$ 73,695$ EXPENSES Salaries 139,820$ 70,575 Fringe Benefits 46,607 21,393 Travel/Training 1,300 279 Supplies 3,325 1,541 Contract Services - 133 Other 36,832 22,996 Total Expenses 227,883$ 116,916 Revenue Over/Under Expenses (99,883)$ (43,221) Transfer In 43,221$ Net Assets at April 1, 2019 0$ Net Assets at March 31, 2020 0$ Grant Period: April 1, 2019 to March 31, 2020 HEAD START PRIVATE PAY PROGRAM HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -110- Budget Actual REVENUE Grant 116,937$ 116,937 Total Revenue 116,937$ 116,937 EXPENSES Salaries 74,429$ 77,558 Fringe Benefits 18,728 25,563 Purchased Professional & Technical 10,000 7,500 Purchased Property Services 543 - Other Purchased Services 4,500 - Supplies 8,737 7,154 Property & Equipment - - Total Expenses 116,937$ 117,775 Revenue Over/Under Expenses -$ (838) Transfer In 838$ Net Assets at July 1, 2019 0$ Net Assets at June 30, 2020 0$ PRE-SCHOOL DEVELOPMENT Report Period: July 1, 2019 to June 30, 2020 Grant Number: MT OPI 16 6646 16 20 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -111- Bozeman Center Livingston Center Belgrade Center Actual Actual Actual REVENUE Rental Income 32,400$ 42,000 74,400 Total Revenue 32,400$ 42,000 74,400 EXPENSES Gas & Electric 3,495$ 3,216 6,201 Water, Sewer, & Garbage 2,484 2,081 2,629 Maintenance & Repairs 7,976 10,604 9,560 Janitorial/Grounds 7,196 6,541 9,373 Property Management/Audit 2,000 2,000 2,000 Insurance 2,051 1,788 2,973 Taxes 500 0 83 Interest Expense 0 5,014 23,650 Depreciation 1,800 1,794 62,174 Total Expenses 27,502$ 33,038$ 118,643$ Revenue Over/Under Expenses 4,898$ 8,962 (44,243) Net Assets at July 1, 2019 52,617$ (28,685) 379,698 Net Assets at June 30, 2020 57,515$ (19,723) 335,455 HEAD START FACILITIES Report Period: For the Year Ended June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -112- Operations DPA Lending REVENUE Big Sky Resort Tax Revenue 125,501$ 110,000 Donations 11,000 Fund Raising Income 350 Underwriting Fees 4,858 Grants 90,000 Total Revenue 136,851$ 204,858 EXPENSES Salaries & Fringe Benefits 109,893$ 8,753 Consultant Services 10,643 0 Travel & Training 1,766 0 Legal/Audit 58 0 Supplies 2,106 0 Office Space 8,704 0 Other 4,287 0 Total Expenses 137,457$ 8,753 Revenue Over/Under Expenses (606)$ 196,105 Homebuyer Loans Disbursed (455,750) Transfer Out (27,933) 0 Net Assets at July 1, 2019 28,539$ 154,275 Net Assets at June 30, 2020 0$ (105,370) BIG SKY COMMUNITY HOUSING TRUST Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -113- HOME COB COB AHO Other Total Actual Actual Actual Actual Actual Actual REVENUE Grant 172,002$ 172,002 Contract Income 40,000 78,150 95,153 213,303 Contributions 5,485 5,485 Homebuyer Loans Repaid 75,955 35,000 13,159 124,114 Appreciation Share Realized 16,139 15,634 31,773 Total Revenues 264,096$ 90,634 78,150 13,159 100,638 546,677 EXPENSES Salaries & Fringe 19,554$ 13,417 4,144 106,266 143,381 Space 1,066 1,383 241 3,841 6,531 Communications 86 41 4 451 582 Supplies 1,000 6,620 7,620 Contract Services 419 419 Audit & Legal 1,280 1,280 Travel & Training 34 4,899 4,933 Homebuyer Loan Fees 962 1,400 2,362 Total Expenses 21,702$ 14,841 6,789 0 123,776 167,109 Revenue Over/(Under) expenses 242,394$ 75,792 71,361 13,159 (23,138) 379,568 Homebuyer Loans Disbursed (235,957)$ 0 (70,000) 0 0 (305,957) Transfer Out *(81,193) (81,193) Net assets at July 1, 2019 (1,525)$ 399,251$ 1,123$ 180,112$ (73,296)$ 505,666$ Net Assets for Operations at June 30, 2020 4,912$ 285,145$ 2,484$ 31,277$ (107,753)$ 216,065$ Net Assets for Lending at June 30, 2020 0$ 189,898$ 0$ 80,800$ 11,320$ 282,019$ * CDBG Program Income Applied to Humble Homes and Scattered Sites Land Trust RTH Lending Pool: July 1, 2006 to June 30, 2020 Grant Number: HOME M13-SG300100-01-A/B/C/D/E/F/G/H CDBG Pgm Inc ROAD TO HOME - HOMEOWNERSHIP CENTER Report Period: July 1, 2019 to June 30, 2020 Grant Periods: MT Dept of Commerce (HOME) November 7, 2013 to September 30, 2020 City of Bozeman (COB) November 25, 2003 to June 30, 2020 City of Bozeman Affordable Hsg Ordinance (AHO) March 30, 2018 to June 30, 2020 MT HomeOwnership Network (MHN)/NeighborWorks MT (NWMT) October 1, 2004 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -114- Actual REVENUE HRDC Owned Management fees: Big Sky Villas Apts (24 units)17,912$ Management fees: Boulevard Apts (42 units)23,492 Management fees: Colorado Apts (8 units)4,035 Management fees: Cottages @ Menicucci Sq (18 units)13,692 Management fees: Miles Apts (40 units)26,804 Management fees: Sherwood Inn Apts (50 units)31,806 Management fees: Summit Place Apts (7 units)4,387 Management fees: West Babcock Apts (24 units)18,396 Management fees: West Edge Condos (4 units)2,365 Management fees: HRDC Facilities (14 buildings)29,600 Third-Party Owned Management fees: Antelope Court Apts (30 units)16,393 Management fees: Buffalo Court Apts (20 units)9,443 Management fees: Castle Mountain Apts (10 units)8,026 Management fees: Guardian Apts (118 units)63,821 Total Revenues 270,173$ EXPENSES Salaries & Fringe Benefits 176,396$ Contract Services 2,630 Travel & Training 1,031 Space Costs 7,517 Communications 1,267 Supplies 5,638 Office Costs 1,432 Liability Insurance 3,151 Legal 45 Other 663 Total Expenses 199,770$ Revenue over/under expenses 70,403$ Transfer In (Out) (8,867)$ Net assets at July 1, 2019 85,039$ Net assets at June 30, 2020 146,575$ RESOURCE PROPERTY MANAGEMENT Report Period: July 1, 2019 to June 30, 2020 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -115- Budget Actual REVENUE Grant 317,785$ 317,785 Misc Income 1,556 Total Revenue 317,785$ 319,341 EXPENSES Salaries & Fringe 147,233$ 168,543 Consultants & Contract Services 4,600 9,276 Travel/Training 3,000 10,862 Space 7,500 9,954 Supplies 4,000 600 Small Equipment 6,000 0 Other Non-Direct Expenses 0 10,738 Support for Programs/Projects and Other Costs 145,442 109,369 Total Expenses 317,775$ 319,341 Revenue Over/Under Expenses 10$ (0) Net Assets at January 1, 2018 0$ Net Assets at August 31, 2019 0$ COMMUNITY SERVICES BLOCK GRANT Grant Period: January 1, 2018 to August 31, 2019 Grant Number: DPHHS 18-028-10007-0 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -116- Budget Actual Budget Actual REVENUE Rental Income 110,400$ 110,400 37,200 37,200 Other Income 0 4,800 0 0 Total Revenue 110,400$ 115,200 37,200 37,200 EXPENSES Gas & Electric 13,200$ 13,844 3,600 3,778 Water, Sewer, & Garbage 3,800 3,693 700 1,220 Maintenance & Repairs 40,808 39,430 2,200 1,425 Janitorial/Grounds 15,800 15,600 5,800 6,440 Property Management/Audit 7,200 7,200 1,000 800 Insurance 2,796 2,567 1,048 2,238 Taxes 620 932 130 204 Interest Expense 17,516 16,313 10,682 9,318 Depreciation 42,297 42,297 16,742 16,742 Total Expenses 144,037$ 141,876 41,902 42,166 Revenue Over/Under Expenses (33,637)$ (26,676) (4,702) (4,966) Net Assets at July 1, 2019 734,301$ (120,939) Net Assets at June 30, 2020 707,625$ (125,905)$ HRDC CENTRAL AND ANNEX OFFICES Report Period: July 1, 2019 to June 30, 2020 HRDC Central Office HRDC Annex Office HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SUPPLEMENTAL SCHEDULE SCHEDULES OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS See Independent Auditor’s Report. -117- Actual REVENUE Allo cation Payments from Programs 911,061$ Total Revenues 911,061$ EXPENSES Salaries & Fringe Benefits 724,750$ Space Costs 31,651 Financial Audit 44,405 Communications 10,173 Office Costs 2,771 Small Equipment 5,672 Computer Service 79,196 Travel/Training 6,966 Contract Services 15,948 Other 2,357 Total Expenses 923,889$ Revenue Over/Under Expenses (12,827)$ Transfer In 8,683$ Net Assets at July 1, 2019 -$ Net Assets at June 30, 2020 (4,144)$ SCHEDULE OF ADMINISTRATIVE COSTS ALLOCATED Report Period: For the Year Ended June 30, 2020 S I N G L E A U D I T S E C T I O N HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2020 -118- FEDERAL SOURCE Total Total PASS THROUGH SOURCE CFDA Pass Through Dollars Federal Awards to PROGRAM NAME No.Grant Term Number Awarded Expenditures Subrecipients Dept. of Housing and Urban Development Montana Dept. of Health and Human Services Emergency Shelter Grant 19-20 14.231 08/01/19 - 07/31/20 19-028-51007-0 76,337 75,037$ -$ Emergency Shelter Grant 20-21 14.231 08/01/20 - 03/31/21 20-028-51007-0 257,067 43,129 - Total Emergency Shelter Grant 118,166 - Direct Continuum of Care - Rapid Re-Housing 14.267 07/01/19 - 06/30/20 MT0055L8T1802 110,353 110,353 - Total Continuum of Care 110,353 - Direct Multifamily Housing Service Coordinators 14.191 01/01/20 - 12/31/20 MFSC179734-01-04 28,661 20,346 - Multifamily Housing Service Coordinators 14.191 01/01/19 - 12/31/19 MFSC179734-01-03 15,365 15,365 - 35,711 - Montana Dept. of Commerce Home Investment Partnership Program - RTH 14.239 07/01/19 - 09/30/20 M13-SG300100-01-G 2,159,000 247,957 - Local Initiatives Support Corporation Rural LISC 14.252 10/01/17 - 09/30/19 41189-0038 39,500 2,792 - Rural LISC - Health Housing HFV 14.252 07/01/18 - 09/30/19 41189-0040 16,830 5,218 - Rural LISC - Health Housing HFV 14.252 07/01/19 - 09/30/20 41189-0043 15,300 10,406 - Rural LISC 14.252 10/01/19 - 09/30/21 41189-0044 36,000 17,708 - Rural LISC - Bridges to Career Opportunities 14.252 01/01/20 - 12/31/20 41189-0045 30,000 2,376 - Total LISC 38,500 - Total Department of Housing and Urban Development 550,687 - Department of Labor Montana Department of Labor WIA/WIOA Cluster Workforce Innovation & Opportunity Act 17.259 07/01/19 - 06/30/20 DLISF20CONWSD_102 160,042 160,042 - Workforce Innovation & Opportunity Act - MOD 17.259 07/01/19 - 06/30/20 DLISF20CONWSD_102_1 7,145 7,145 - Total Department of Labor, WIA/WIOA Cluster 167,187 - HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) Year Ended June 30, 2020 -119- FEDERAL SOURCE Total Total PASS THROUGH SOURCE CFDA Pass Through Dollars Federal Awards to PROGRAM NAME No.Grant Term Number Awarded Expenditures Subrecipients Department of Transportation Montana Department of Transportation Formula Grants for Other Than Urbanized Areas 20.509 07/01/19 - 06/30/20 110742 1,150,046 696,669 - Formula Grants for Other Than Urbanized Areas 20.509 07/01/18 - 06/30/20 110656 36,517 18,581 - COVID-19 Formula Grants for Other Than Urbanized Areas 20.509 01/20/20 - 12/31/20 REIMB 961,130 - 1,676,380 - Montana Department of Transportation Capital Assistance Program Enhanced Mobility 20.513 07/01/19 - 06/30/20 111074 29,084 29,084 - Federal Transit Cluster Bus and Bus Facilities Formula Program 20.526 07/01/18 - 06/30/19 110507 - - - Bus and Bus Facilities Formula Program 20.526 07/01/18 - 06/30/19 110579 - - - Total Federal Transit Cluster - Total Department of Transportation 1,705,464 - Department of Energy Montana Dept. of Health and Human Services DOE Weatherization 19-20 81.042 07/01/19 - 06/30/20 20-028-30027-0 208,648 185,482 - Total Department of Energy 185,482 - Department of Education Montana Office of Public Instruction Preschool Development 19-20 84.419 07/01/19 - 06/30/20 016-6646-1616 116,937 116,937 - Total Department of Education 116,937 - Federal Emergency Management Agency United Way Emergency Food and Shelter Program Cluster FEMA - Housing, Park County 97.024 10/01/18 - 05/31/20 559600-008 (36)3,236 3,236 - FEMA - Housing, Gallatin County 97.024 10/01/18 - 05/31/20 559600-002 (36)19,605 19,605 - FEMA - Food 97.024 10/01/18 - 05/31/20 559600-003 (36)18,835 18,835 - Total Federal Emergency Management Agency, Emergency Food and Shelter Cluster 41,676 - HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) Year Ended June 30, 2020 -120- FEDERAL SOURCE Total Total PASS THROUGH SOURCE CFDA Pass Through Dollars Federal Awards to PROGRAM NAME No.Grant Term Number Awarded Expenditures Subrecipients Department of Health and Human Services Rocky Mountain Development Council, Inc. Aging Cluster TITLE III-B Homemaker Services 93.044 07/01/19 - 06/30/20 2020-004-013 381 381 - TITLE III-B Respite / Caregiver Support 93.052 07/01/19 - 06/30/20 2020-004-013 19,597 19,597 - TITLE III-E Caregiver Support - Park County 93.052 07/01/19 - 06/30/20 2020-004-013 18,750 18,750 - Total Aging Cluster 38,728 - State Health Insurance Assistance Program 93.324 07/01/19 - 06/30/20 2019-004-013 25,000 25,000 - Missoula Aging Services (Area XI Agency on Aging) Senior Medicare Patrol 19-20 93.048 06/01/19 - 05/31/20 None 10,537 8,667 - Senior Medicare Patrol 20-21 93.048 06/01/20 - 05/31/21 None 9,537 951 - Total Senior Medicare Patrol 9,618 - CSBG 18 93.569 01/01/18-08/31/19 18-028-10007-0 317,785 9,451 - CSBG 19 93.569 01/01/19-08/31/20 19-028-10007-0 332,667 332,667 6,324 Total 477 Cluster 342,118 6,324 Direct Head Start Head Start 19-20 93.600 04/01/19 - 03/31/20 08CH010871-01 1,571,886 1,146,886 - In-Kind - 251,938 - Head Start 20-21 93.600 04/01/20 - 03/31/21 08CH010871-02 1,579,444 396,783 - In-Kind - 10,275 - Less In-Kind (262,213) - COVID - 19 Head Start 40,774 - Total Head Start 1,584,443 - Montana Dept. of Health and Human Services 477 Cluster HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) Year Ended June 30, 2020 -121- FEDERAL SOURCE Total Total PASS THROUGH SOURCE CFDA Pass Through Dollars Federal Awards to PROGRAM NAME No.Grant Term Number Awarded Expenditures Subrecipients Department of Health and Human Services, continued Montana Dept. of Health and Human Services LIEAP Client Education/Advocacy 18-19 93.568 10/01/18 - 08/31/20 19-028-13007-0 40,771 40,739 - LIEAP Client Education/Advocacy 19-20 93.568 10/01/19 - 08/31/21 20-028-13007-0 38,557 928 - LIEAP Outreach 17-18 93.568 10/01/17 - 09/30/19 18-028-15057-0 52,630 2,203 - LIEAP Outreach 18-19 93.568 10/01/18 - 08/31/20 19-028-13007-0 48,061 48,061 - LIEAP Outreach 19-20 93.568 10/01/19 - 10/01/20 20-028-13007 35,437 348 LIEAP Administration 18-19 93.568 10/01/18 - 09/31/20 19-028-13007-0 80,716 75,538 - LIEAP Administration 20-21 93.568 10/01/19 - 09/30/21 20-028-13007-0 77,807 7,292 - LIEAP Contingency Revolving Fund 18-19 93.568 11/01/18 - 11/13/19 19-028-13007-0 REIMB 44,063 - LIEAP Contingency Revolving Fund 20-21 93.568 11/14/19 - 09/30/20 20-028-11007-0 REIMB 93,584 - LIEAP Weatherization 18-19 93.568 07/01/18 - 09/30/19 19-028-16007-0 401,531 103,747 - LIEAP Weatherization 20-21 93.568 07/01/19 - 08/31/21 20-028-16007-0 491,413 283,027 - COVID-19 LIEAP Administration 93.568 05/01/20 - 09/30/21 20-028-19067-0 28,685 8,492 - COVID-19 CRF 20-21 93.568 05/01/20 - 09/30/21 20-028-19067-0 REIMB 6,673 - Total LIEAP 714,695 - Chafee Foster Care Independence 93.674 07/01/19 - 06/30/20 20123FCIP0008 107,900 107,900 - Ryan White Part B HIV Care Formula Grant 93.917 10/01/18 - 09/30/19 17-07-4-51-310-0-2 33,885 14,713 - Ryan White Part B HIV Care Formula Grant 93.917 10/01/19 - 09/29/20 17-07-4-51-310-0-2 33,885 15,179 - Total Ryan White 29,892 - Total Department of Health and Human Services 2,852,394 6,324 Corporation for National and Community Service Direct RSVP 2019-20 94.002 04/1/19 - 03/31/20 18SRPMT002 86,161 35,998 - RSVP 2019-20 Senior Reach Augmentation 94.002 04/1/19 - 03/31/20 18SRPMT002 244,222 136,627 Match - 22,049 - RSVP 2020-21 94.002 04/1/20 - 03/31/21 18SRPMT002 86,161 23,107 - RSVP 2020-21 Senior Reach Augmentation 94.002 04/1/20 - 03/31/21 18SRPMT002 107,596 15,788 Match - 13,951 - Less Match (36,000) - Total Corporation for National and Community Service 211,520 - HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) Year Ended June 30, 2020 -122- FEDERAL SOURCE Total Total PASS THROUGH SOURCE CFDA Pass Through Dollars Federal Awards to PROGRAM NAME No.Grant Term Number Awarded Expenditures Subrecipients Department of Agriculture Montana Department of Health and Human Services Child and Adult Care Food Program 19-20 10.558 04/01/19-03/31/20 HS 04087C - 75,934 - Child and Adult Care Food Program 20-21 10.558 04/01/20-03/31/21 HS 04087C - 9,928 - Total Child and Adult Care Food Program 85,862 - Montana Office of Public Instruction Child Nutrition Cluster Summer Food Service Program for Children '19 10.559 10/01/18 - 09/30/19 16-6512 - 63,854 - Summer Food Service Program for Children '20 10.559 10/01/19 - 09/30/20 16-6512 - 19,768 - COVID-19 Summer Food Service Program for Children 10.559 03/16/20 - 09/30/20 208,081 187,976 Total Summer Food Service Program for Children 291,703 187,976 Montana Dept. of Health and Human Services Food Distribution Cluster Commodity Supplemental Food Program 18-19 10.565 10/01/18 - 09/30/19 19-027-21002-0 - 50,316 - Commodity Supplemental Food Program 20-21 10.565 10/01/19 - 09/30/20 20-027-21002-0 - 160,361 - Total Food Distribution Cluster 210,677 - Local Initiatives Support Corporation Non-Research and Dev Technical Assistance Program 10.446 02/01/19 - 12/31/19 41189-0042 30,000 21,009 - Total Department of Agriculture 609,251 187,976 TOTAL FEDERAL AWARDS EXPENDED 6,440,598$ 194,300$ Principal Amount Owed LOAN AND LOAN GUARANTEES Repayment June 30, 2020 Direct Loan Guaranteed by the U.S. Department of Housing 14.181 - 438,100$ HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2020 -123- NOTE 1.BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes federal award activity of HRDC under programs of the federal government for the year ended June 30, 2020. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a select portion of the operations of HRDC,it is not intended to, and does not present, the financial position, changes in net assets, or cash flows of HRDC. NOTE 2.SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES The Schedule has been prepared on the accrual basis of accounting, which is the method of accounting used for the financial statements. Such expenditures are recognized following Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule present adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. NOTE 3.INDIRECT COST RATE HRDC has elected not to use the optional 10-percent de minimis indirect cost rate allowed by Uniform Guidance. NOTE 4.MATCHING In accordance with the terms of the grants, HRDC has expended matching contributions during the year ended June 30, 2020 for the following programs: Department of Health and Human Services: Head Start $251,938 Retired and Senior Volunteer Program $ 36,000 NOTE 5.LOAN AND LOAN GUARANTEES HRDC has one direct loan guaranteed by the U.S. Department of Housing, CFDA 14.181, with a balance of $438,100 at June 30, 2020. -124-1019 E MAIN ST• SUITE 201• BOZEMAN, MONTANA 59715 TEL: 406.556.6160• FAX:406.586.8719• WEB: www.azworld.comANDERSON ZURMUEHLEN & CO.,P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Human Resource Development Council of District IX, Inc. Bozeman, Montana 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 consolidated financial statements of Human Resource Development Council of District IX, Inc.(HRDC) which comprise the consolidated statements of financial position as of June 30, 2020, and the related consolidated statements of activities, and consolidated cash flows for the year then ended, and the related notes to the consolidated financial statements, and have issued our report thereon dated June 16, 2021. Internal Control over Financial Reporting In planning and performing our audit of the consolidated financial statements, we considered HRDC’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 opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of HRDC’s internal control. Accordingly, we do not express an opinion on the effectiveness of HRDC’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 over financial reporting 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 financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. ANDERSON ZURMUEHLEN & CO., P.C CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS -125- Compliance and Other Matters As part of obtaining reasonable assurance about whether the HRDC’s consolidated financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of HRDC’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 HRDC’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Bozeman, Montana June 16, 2021 -126-1019 E MAIN ST• SUITE 201• BOZEMAN, MONTANA 59715 TEL: 406.556.6160• FAX:406.586.8719• WEB: www.azworld.comANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors Human Resource Development Council of District IX, Inc. Bozeman, Montana Report on Compliance for Each Major Federal Program We have audited Human Resource Development Council of District IX, Inc.(HRDC) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of HRDC’s major federal programs for the year ended June 30, 2020. The HRDC’s major federal programs are identified in the summary of auditor’s results section of the accom panying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of HRDC’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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 HRDC’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 HRDC’s compliance. Opinion on Each Major Federal Programs In our opinion, HRDC 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 June 30, 2020. ANDERSON ZURMUEHLEN & CO., P.C CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS -127- Report on Internal Control Over Compliance Management of HRDC 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 HRDC’s internal control over compliance with the types of requirements that could have a direct and material effect on a major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on compliance for each major federal program and to test and report on the internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of HRDC’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 report 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 based to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Bozeman, Montana June 16, 2021 HUMAN RESOURCE DEVELOPMENT COUNCIL OF DISTRICT IX, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS June 30, 2020 -128- SECTION I –SUMMARY OF AUDIT RESULTS Financial Statements: Type of auditor's report issued:Unmodified Internal control over financial reporting: Material weakness identified?No Significant deficiencies identified that are not considered to be material weaknesses?None reported Noncompliance material to financial statements noted?No Federal Awards: Internal Control over major programs: Material weakness identified?No Significant deficiencies identified that are not considered to be material weaknesses?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 2 CFR 200.516(a)?No Identification of major programs: CFDA Number 93.600 10.559 Dollar threshold used to distinguish between Type A and Type B programs:$750,000 Auditee qualified as low-risk auditee?Yes Name of Federal Program or Cluster DPHHS Head Start Summer Food Service Program SECTION II –FINANCIAL STATEMENT FINDINGS The audit report for the year ended June 30, 2020, reported no findings. SECTION III –FEDERAL AWARD FINDINGS AND QUESTIONED COSTS The audit report for the year ended June 30, 2020, reported no findings. SECTION IV –STATUS OF CORRECTIVE ACTION ON PRIOR FINDINGS The audit report for the year ended June 30, 2019, reported no findings. CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS www.azworld.com MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS