EHA Board of Commissioners Regular Meeting - June 23, 2025

Colby Office: And Sandy and Craig Violante, who is also with fine with finance department. So I mean, he's already kind of engaged. So it's been pretty exciting.

Colby Office: I can't tell you how happy I am that you are actually in the building. I'm super excited to be here. Thank you for the warm welcome, and I look forward to working with all of.

ksmith: Welcome! Welcome!

Colby Office: It is.

Colby Office: and because of that, and because Sandy is for hours, Sandy is going to be here for about 2 more weeks helping. It's helping with the transition.

Colby Office: But I just have to tell you how grateful I am to her for agreeing to come in and assist us during the year plus year, plus that she has been here.

ksmith: I'm here.

Colby Office: Yeah. Yeah.

Colby Office: As you know, Sandy worked with me when I was in Marysville. She was my finance director there, and she has worked with every director that kind of turn this place into

Colby Office: really kind of wallowed machine on the financial side. There's a lot that still needs to be done. But the work that she has done, and working with the board, making sure that they're comfortable with the financial situation and also with the departments, making sure that they have what they need to do that job. I can't. I don't even know what more I can say. I'm just so

Colby Office: grateful grateful that you came on and helped us like I did a lot more than I think. It took everybody everybody.

Colby Office: I really appreciate working with everyone and getting to know you, and how smart you all are, and without your knowledge, I don't think, given you what you just said.

Colby Office: Well, it has been an adventure. Both Sandy and I didn't come from housing authorities. We have learned a ton a ton, and you know, I think in some-, in some ways that might have been an advantage, because we asked all sorts of questions that maybe wouldn't have

Colby Office: something.

Colby Office: Why are you doing it that way?

Colby Office: The last thing I want to talk about is the resident services director position we have received. I believe the last count was like 66 applicants. So we have been through them. I've narrowed it down to about 11 that I plan on interviewing, and then we'll narrow that down to about

Colby Office: 5 somewhere in that 4 or 5, and bring them into the interviews, much like we did with the other director position, so pretty excited about that. That will that will round up the whole team.

ksmith: Nice.

Colby Office: The other thing that's going on is we are

Colby Office: looking at this building. And what we need to do to get

Colby Office: to get people back into the office, and so that work is in progress. You'll hear a little bit about that during the budget process.

Colby Office: and and a lot of that has to do with making sure the electrical system is- is adequate that we have.

Colby Office: We're adding some cubicles upstairs into that area that has cubicles, and the goal is to make sure that everybody actually has a seat when they get here. And they're not sharing space. And so we're working through the details of that. The target date on that is September

Colby Office: after Labor Day, making sure that employees have an opportunity to get through the summer with any child care issues that they may have and not to complicate their lives. So. And that's all I have today.

ksmith: Okay. Well, offer your report. Thank you, Sandy, for all your work. It's very appreciated, very appreciated. Okay.

ksmith: all right. Moving on to our agenda. Now we're going to do the approval of the minutes.

ksmith: for the regularly

ksmith: held meeting on May 27, th 2025, and the Special Board meeting retreat held on June 13, th 2025, and I just need to call for a motion.

Colby Office: For approval.

Colby Office: Second.

ksmith: Okay, perfect. Thank you.

ksmith: Next, we're going to talk about the consent agenda and call for a single motion to approve the following

ksmith: section 8 payments for the month of May 2025 summary of vouchers for the month of May 2025, Wiggum's Hollow Park agreement.

ksmith: the property, lease, agreement. Epd. And pivotal pivotal point, Llp.

ksmith: So do I have a motion.

Cynthia Andrews: So moved.

ksmith: Okay, perfect.

ksmith: Next, we're going to move on to the individual items for consideration.

Colby Office: But again, if you need to call for a second and then call.

ksmith: Oh, sorry!

ksmith: I thought I heard that. My bad do I have a second.

Colby Office: Second.

ksmith: Okay, do I have any against

ksmith: no hearing? None. We move forward.

ksmith: Okay, sorry about that guys.

ksmith: So the 1st item for individual consideration is the motion to adopt extension of employment. Agreement between the Everett Housing Authority and Mary Swenson.

ksmith: Mary, could you please introduce.

Colby Office: Yes, so this is an extension of my employment contract to December 31.st we know we have the executive director interviews being conducted towards the end of August. This will give an opportunity to have that transition period during that whole process. So I think the earliest, since the end of the end of August will be. We'll probably be looking at October sometime to get somebody on board.

Colby Office: depending on what what that status currently is.

Colby Office: So this is basically just an extension of my com.

ksmith: To me any questions.

ksmith: Some commissioners.

Colby Office: Commissioner. Yeah, Commissioner Perez made a motion Commissioner Manziel seconded.

ksmith: Oh, okay. All those in favor.

Cynthia Andrews: Bye.

ksmith: I okay? Any against carrying on. We move forward. Thanks.

Colby Office: Thank you.

ksmith: Okay. Next on the agenda is Resolution number 1617, updating the time, location, and frequency of regular board meetings.

ksmith: Also Executive Director Mary Swenson, to introduce.

Colby Office: So when I arrived here we we had what my understanding is. The Commission had gone to 24 meetings. So you were doing a meeting a month, plus you were doing a meeting that had some

Colby Office: education piece to it, and then that seemed extremely cumbersome. As we move forward we were having meetings back to back, and then the Commission decided to go back to what had happened in the past. And that was 6 meetings a year.

Colby Office: Don't think that that's enough. Meetings like, from my standpoint, the touch base between commissioners and- and

Colby Office: and myself and the staff to only meet 6 times a year just didn't seem like enough. So I,

Colby Office: this resolution basically has a monthly meeting.

Colby Office: It's the the meeting has been moved to the second Monday of the month, and the reason why that was done is we had several, since.

Colby Office: I think it was. The annual meeting was on the second Monday of the month. The regular meetings on the off

Colby Office: 12 months was scheduled for like the 4th Monday, which then ran into holidays. And so then you were having meetings on holidays, and then that was confusing to people, because now it was on a Tuesday instead of a Monday. So my recommendation is to go to monthly meetings. Have it on the second Monday of the month. The only

Colby Office: the only thing that would hint that would interfere with that is potentially veterans day that would happen like every 7 years. That that is your annual meeting already spelled out. What happens

Colby Office: that date? I also know that there may be up. There may be times when we don't need to.

Colby Office: and I think at least it's the executive director to cancel a meeting. You know, if there is no need to meet.

Colby Office: That's my recommendation to go from for discussions.

ksmith: Any comments.

Colby Office: With with due respect, knowing well that I'm stepping down in December, I'm gonna leave for the remaining.

Colby Office: Well, if we do that, I'll miss 90% of just I just went through

Colby Office: my personal calendar does go back and make that frequency on that day. Okay, I could do it a different day, but not Monday, and that that is the discussion that needs to happen. What date works or what day, what time works for the rest of you. I mean that I know that there's been some

Colby Office: a session that, like a 4 PM. Meeting, works better for some, and I just picked the second Monday, because I know you have been meeting on Monday. It seemed logical to me, but it- it is your meeting, you know. So whatever works best

Colby Office: for the record.

Colby Office: The day and the week does not matter for me, but I prefer 12 noon meetings to later in the day.

ksmith: Okay.

Colby Office: Yeah, excuse me.

ksmith: Any other.

Colby Office: This is not. This doesn't need to be acted on today. We can have a discussion about that. And then and then, you know, put it on the next meeting agenda.

ksmith: It sounds like we might need to have further instructions so, or discussions. If I can talk today. Not really.

Colby Office: Let's just pull it. Then we can talk about it further.

ksmith: Okay, perfect.

ksmith: Okay, thank you.

ksmith: Next on the individual, did someone say something?

ksmith: No. Okay.

ksmith: Individual considerations is

ksmith: resolution number 1618, which is adopting fiscal year 2025 to 2026 budgets for housing authority programs.

ksmith: Sandy Langdon, to introduce.

Colby Office: Thank you, Commissioner Smith. We have Heather's gonna pull up the presentation for me.

Colby Office: Pass through.

Colby Office: So if you recall last year when I presented the budget. Analysis is done by the State Auditor's office, and that's on their website open to the public to do so. I pulled that down recently the information for Eha

Colby Office: and this

Colby Office: where we at they have changed the format a little bit. So it took me a bit to figure out where what they were doing, but they still have the same

Colby Office: metrics.

Colby Office: Okay, my apologies. We're seeing it on our end. And Cynthia. And if

Colby Office: you should, too many screens.

Colby Office: I don't understand 2 laptops right now.

Colby Office: Okay, can everyone see this? Now?

Colby Office: Perfect.

ksmith: Yeah.

Colby Office: Okay, you can see it now. Thank you.

Colby Office: So, based on our revenues and expenses, Eha is ranked number 7 out of 36 of the housing authorities in the State of Washington, even in the top 10. Is that

Colby Office: pretty big deal, in my opinion? So you see where we're at? If you can see this, our financial summary there shows our beginning balances and revenues, as well as those ending balances the revenues at 80 million.

Colby Office: and expenditures at 74.

Colby Office: You see, it breaks that down in the types of revenues and the types of expenditures, and, for instance, the intergovernmental revenues that 70% for Eha. That average next to it is the average for the 36 housing authorities in the State of Washington.

Colby Office: So that gives us a pretty good comparison that we're. We're

Colby Office: basically in very much in within the average, a little bit above with what that

Colby Office: breakdown categories in the revenues and expenditures which isn't uncommon for the same type of you know, we're all in the housing business. So housing authorities have pretty much those those types of revenues and expenditures.

Colby Office: but it gives us kind of a good gauge next slide.

Colby Office: So this is the 4 indicators, our cash balance sufficiency. That's our ability to have a cash balance to cover, I believe, 60 days of expenses. And we're we're sitting good at this point. And before I forget, this information is 2 years lagging. So this is for 2023

Colby Office: that's about as quickly as they can get things separate, really, because about how they do the audit. They pull this information from each of the audits that are done.

Colby Office: The Enterprise Fund cost recovery. That's pretty much our looking at, for instance, our properties are as a whole. Do we have enough

Colby Office: sufficient revenues to cover the expenses or the cost? Are are we being able to do that? So we're

Colby Office: I think we were getting close when we looked at this last year, we're a little bit. We fell a little bit more, and that's kind of where I talked about. We still need some having all the right directors in place now, and taking a look at more how each property functions we're going to be able to change that

Colby Office: like it's coming down a little bit, but it's still flattening out. And hopefully that will go up in the next year or so, based on the information that I know that the team's working on

Colby Office: the debt load because we have had some new debt recently that that hasn't been able to be calculated. So they're they're saying, it's indeterminate. At this point.

Colby Office: The current ratio is the ability of our current assets to cover our current liabilities. We are above the minimum requirement one. So we're at a good level. It's always nice to have that little bit more. Just as a buffer, I said, those are things that we can work on and

Colby Office: and work towards, especially with some of the policies we need to set in place.

ksmith: Love, this slide.

Colby Office: Questions, so far.

ksmith: I love this slide nice, overview.

Colby Office: I do, too. It's a nice little dashboard right.

ksmith: It's perfect.

Colby Office: So next slide this is, go over some of the assumptions. These are assumptions we made in our salary benefits. Putting the budget together, as you recall, we did a

Colby Office: salaries salary survey, and then we implemented a step system. So this budget will provide a full year of that step system.

Colby Office: We do have our teamster Cba, which expires the 30th of this year still under negotiations. So that always becomes a little tricky when you're trying to do a budget is you don't know exactly where that's going to end

Colby Office: the pension rate. We're going to thank the State of Washington for this change. They were having trouble balancing their budget. So they reduced the pension rate almost by 50%. So that had went from 9.1 1 to 5.5 8% and almost a $400,000 savings to the annual budget.

Colby Office: And I also not. Also they changed the rate. Yes, but they increased it. So there's a 3.8% average increase, almost a 50% increase in the rate for our maintenance crew.

Colby Office: Health benefits we are gonna are under a new plan and plan that we've moved to. We're not sure where that estimate's gonna be at. We did have a 12% estimate. Last year. I stayed with that increase just to make sure where we're at. Our Hr. Department gave me some information on Kevin. But how? That's increased over the last 4 years it because there's so I think there's 20 different

Colby Office: plans that they were all over the board somewhere down, and some had a 22% increase. Some had a decrease, so I thought 12% might be good. We won't know until around September that Pam is under the state budget, so they are under some mandates to make some

Colby Office: decreases, also to be, I want to say, 3 to 6% decrease in their budget, not sure how that will affect it affect us. It really shouldn't, because it's more on their their employees that work in the Pep program and their expenses.

Colby Office: But and you never know what's going to come out of that

Colby Office: and moving to a calendar year. Budget is gonna really help this because we will have those estimates before fiscal year. We don't get them until after, you know, after fiscal years.

Colby Office: During the retreat, we talked about adding 4 positions, 3 housing management specialists, one and one maintenance labor loader. So we do have that included in in this budget

Colby Office: document for today was able to give some detail on that on those positions.

Colby Office: So the spreadsheet that we use to

Colby Office: give us a prediction of what our payroll and benefits is going to be comes from. That comes from spreadsheet. So what you're looking at is what we have as a dashboard from that spreadsheet.

Colby Office: I noticed the notes are a little little hard to read there.

Colby Office: but bottom line is we actually had.

Colby Office: Comparing last year's budget to this year's budget, we have a decrease of almost 100,000,

Colby Office: and if you want to take a look at well, that 100,000 was more, almost the savings from our benefits, which was a hundred 87,000.

Colby Office: And then we had some increases like in LL. And I. And if you want to take a look at the 4 4 positions, we added, with the savings of the pension of 3, 80,

Colby Office: 380,000 always cover those 4 positions.

Colby Office: Want to take an overall. Look at Bha, right?

Colby Office: So that's where we at 100 446.2 5 fte counts last year, and with the 4 additional we have a hundred 50.2 5,

Colby Office: and the positions that were added, actually were requested in last year's budget also. And if we remember right, we told

Colby Office: we had everything last year. So these are positions that we really believe are needed to, can continue to provide the services to our residents.

Colby Office: Any questions

Colby Office: I can tend to talk fast sometimes, especially when I talk numbers. So please raise your hand if I'm a little going a little too fast, and

Colby Office: that may make sense

Colby Office: so. But moving on with our assumptions, this is more in the operation realm, and we tweak this a little bit from last year. Still, as Mary mentioned, when you're not on a calendar year, sometimes those things. We don't have those that information moving into this budget, but we will like in July. If we could only wait a month, but we can't. So

Colby Office: so we are looking at operating supplies and services somewhere between a 2 and a 4% increase from our projection projected actuals utilities. We have 5% increase from projected actuals

Colby Office: we have.

Colby Office: We were trying to dive in a little bit more of that. The utility increases. Everett actually had some rate increases that are affecting some properties.

Colby Office: Natural gas did also, but they were some somewhere all overboard again, kind of like the peb insurance somewhere up, somewhere down. We kind of ran out of time to investigate that a little bit more. But we are going to be doing that because there were some properties. We're seeing some pretty high increases looking at them individually. We want to make sure that we identify what's causing that if it's just the rate, or if it's maybe something else. We need to look at

Colby Office: some property liability insurance.

Colby Office: we don't really expect a 15% increase. But because we don't have that information, I want to leave it where we were last year, because that was enough to cover what was needed, and we will adjust that once we get that information, the vehicle insurance again, the same as the liability put an increase in there. We expect a savings because we package that for this year with our liability. I think Kimberly's staff projected about 27,000 annual savings for that.

Colby Office: So until we see that invoice and see where it it lies. For each of those property impacts kind of want to leave our our estimates and assumptions there, but we anticipate it'll be less than what we projected

Colby Office: any questions. So far, you show

Colby Office: so quite a few of these requests, I think. Actually all of them we talked about in the retreat. We have a status of where we are, and some of those we tried to include the majority of those in the budget based on the conversation from the retreat. We have a few that we're going to review for funding, and that includes the family day and updated community rooms where we were seeing some options of

Colby Office: some some volunteer

Colby Office: work or or supplies, which is great. This is, yeah. This is an also an area that once we have a resident service director on board, they will have the ability to go out and

Colby Office: look for donations for a variety of things. They'll also have the opportunity to do some grants and manage those grants, and then look for partners, whether it be, you know, Poa, or

Colby Office: boys and Girls club whatever. There's several partners out there that we could be partnering with. We just don't have the staff to make sure that that is done properly.

Colby Office: and if we'll hopefully get that taken care of

Colby Office: the budget manager, I don't think we mentioned at the Retreat was actually been approved in the 2324 budget, but not been billed, so that continued to be in last year's budget, and we rolled it over into this year's budget that was approved back then

Colby Office: the Peep card program. We believe that most of this could be staff time. We

Colby Office: card programs should be is basically a cash back credit card. So we hope that it doesn't cost us. But it actually, we make money off it in a sense based on Everett City of Everett's program. They've

Colby Office: they receive over a hundred 1,000 a year

Colby Office: from their program. So don't anticipate maybe that much. But we can always try.

Colby Office: and that money is not in the budget because we don't know what that is yet.

Colby Office: The food left and the consulting clean buildings. Those amount of dollars we need to review for funding. We potentially have some

Colby Office: reserves that can maybe cover that. But we want to review that a little bit more. See what it is that we really need to dive into, and how how we take care of those needs.

Colby Office: Next slide.

Colby Office: Then, continuing from the retreat. We have the 4 positions that we talked about that we've included that in the budget machine we need to review, for although we seem to want that.

Colby Office: That was a little resounding fun. But yes.

Colby Office: sounds like it'd be a big project with a recovery period of was it 5 years, you thought.

Colby Office: and it could pay for itself. Yeah.

Colby Office: Oh.

Colby Office: and it's always good that can happen that way. Rental assistance was looking for some laptop replacements. We believe the existing annual replacement can cover that

Colby Office: and then workspace additions. You talked a little bit earlier about this expanding Colby's workspace to bring those people in. We have to upgrade the electrical to accommodate that. So that's you know, included there. And we do have that within those budget.

Colby Office: since it's gonna happen a few months.

Colby Office: Let me see.

Colby Office: So if Kristen doesn't mind. We didn't talk about this in the retreat. But this is some of the properties in

Colby Office: capital projects. Oh, yes, improvements. Thing. Is that what it is? Or Mp. Oh, PC, it.

Colby Office: okay. Had to riot around the wrong order.

Colby Office: These are requests to improve properties, and we

Colby Office: we put in the budget what was covered by replacement reserves. Those that weren't aren't in the budget but may need to be looked at in the future, so I don't know if you wouldn't mind stepping through just a little bit of the summary of those items. Oh, sure, yeah. And this is a collaborative process in terms of developing the capital budget request with property management and asset management, you know, discussing all of the different capital needs at each property, and then

Colby Office: deciding on what the priority projects are. So at evergreen cottages. We have some, you know, kind of drainage issues out there that we want to put some money aside to resolve

Colby Office: at Pepperwoods. We're looking at doing the common area flooring, replacement, and ceiling the parking lot and striping it. We've

Colby Office: it. Pepperwoods is right next to Scriber Point, and we've already done Scriber Point. And so we did half the parking lot. And this is the other half of the parking lot

Colby Office: at Lakeview Terrace. We have some stairs that need to get into compliance with Hqs. Because there's some section 8 tenants that live there. And so this is a fairly major project to repair the stairs, both the railings and the stairs themselves, to make them safe

Colby Office: at Royal Oaks. We have, we sort of recently reviewed the properties. Capital needs more holistically and have a couple projects on here to address some of the ongoing items that we've had. So there's numerous areas of wood rot where we need to replace the wood exterior building and then with roof maintenance. This is something that we'll be working on together in terms of implementing a preventative maintenance program to take care of our all of our roofs.

Colby Office: The 11.

Colby Office: Thank you.

Colby Office: There you go.

Colby Office: And then we have a number of windows at Royal Oaks that are failing, that we would like to replace this budget cycle.

Colby Office: and all of these projects are to be taken out of the replacement.

Colby Office: Was there another slide here?

Colby Office: Oh, there was a question from Frank Hong, from the city of Everett going back to the payroll expenses summary. Could you explain what contributed to the decrease of the annual pension expense?

Colby Office: That was the change in pension rate. The State initiated preparers prefers. Yes, actually, it's for all their pensions were decreased. Yeah.

Colby Office: but but it affects per, yeah per person.

Colby Office: And there's the budget. So this is the proposed budget for ending. June 30, th 2026. We did do a 12 year budget as recommended by great actually. And then we can come back as we do our conversion to the calendar year

Colby Office: tack on those 6 months to get us to the 18 month. It's hard to difficult to put a 12, you know, 12 month project together, and looking out the future, and to do another 6 months on top of that, it might be easier, as we move into a few of the months, especially with some of the unknowns, that we might not know until September.

Colby Office: And and one of the things is that with all budgets. You know, I look at the budget as something that is really fluid. And then things change, especially with the environment that we're in right now, we don't really know what regulations or changes regulatory changes are coming down.

Colby Office: You know, we need to, you know, have

Colby Office: the budget needs to be a fluid

Colby Office: do upload documents. So the other thing that I'm actually really excited about that. It's it's 18 month budget like the 6 months. It's gonna be a great opportunity to take a look at this again, because you're gonna have a new that has some

Colby Office: be hired in the in the middle of that process. You also have a finance director that will be on for 6 months at that point. So it's like the perfect opportunity to have another look.

Colby Office: There's also a few other things that are going on. You know where

Colby Office: there's there's a lot of things that this agency doesn't have, that I believe that they should have the preventative maintenance pieces, the reserve- reserve policies, things that the Board, you know, should be involved in setting. And so you'll see more of that, you know at once you have a finance director, and and delve into some of that a little bit, a little bit more.

Colby Office: Some of those were also mentioned audit which

Colby Office: has had the opportunity to look at, and is actually pretty excited because of the roadmap for him into the position

Colby Office: question. So the previous slide different tasks on it, and different things that

Colby Office: there was mention of replacement reserves.

Colby Office: And is that like, count, is that?

Colby Office: Yeah, it's actually a separate- separate bank account right? That that is, each property has its own reserve replacement.

Colby Office: It comes from the operations, and maybe Kristin, can. You can add a little more detail to it.

Colby Office: There's certain, especially with certain properties, that we've identified a certain percent that has to go into that every year. And I would assume that some of those are dictated by the investor agreement. Yeah. So for tax credit properties that have investors, or for any property that has debt, the lender and tax credit investor will have certain requirements that they layer on for replacement reserves. And it typically is like a per unit

Colby Office: amount. And often it's informed by the capital needs assessment for the property that was like done at the time that the property was financed, and so we at least have to meet. You know the minimum that's set by our investors and lenders. But in many cases, in some cases, if we assess the physical needs of the property and determine that the property needs

Colby Office: us to be depositing higher amounts into the reserve for the capital needs. Then we'll deposit additional, and then, that is considered, you know, unrestricted in terms of our lenders and investors, but we set it aside for capital repairs. And so

Colby Office: each property or group of properties has a replacement reserve and makes replacement reserve deposits from operating. It's considered if the required amount is considered an operating expense, because, you know, we have to set that aside for all our agreements. So it is reflected like it's reflected in our net.

Colby Office: for each party.

ksmith: Actually.

Colby Office: Next few pages are details, and

Colby Office: I think you received that in your packet prior to so, unless you would like me to, I can go through those details, but we do have. All of all of them are budgeted.

Colby Office: The the audit did kind of impress some of our process. So we? That's why Mary mentioned. It's fluid. We, if we see that we need to make amendments as we move through. If we

Colby Office: we're

Colby Office: we should be allowed to do that to make sure that we can make the needed expenses that are required for these programs.

Colby Office: That's where we're at. You can see Baker Heights is in a negative amount. But it's because it doesn't have any income. So we need to have Cocc and property management support that and combining those together with property development, we and and with the cash flow

Colby Office: 1,600.

Colby Office: So it covers it. We are aware what needs to happen out there. And we have a plan that's gonna be for me.

Colby Office: It's a friendly, federally funded programs again, total wise as we move through the putting the pro all these programs together, showing you a cash flow of 56

Colby Office: 1,000 for year end, June 30.th

Colby Office: And the non Federal programs are

Colby Office: properties, and some of that non operating money or items below that. You see there, that's some of that is contributions to those replacement funds that we just talked about.

Colby Office: So for the program, these programs as a whole, the cash flow is at 690,

Colby Office: the non federal programs and nonprofits here they're they. This group is on a calendar year. We do like to include it in in our, in our programs.

Colby Office: And as a group, the cash flow is at ending at 8, just a little over 8,000.

Colby Office: So again, they like to put things back into the program to make sure that there's replacement dollars to to take care of the property as needed.

Colby Office: Ask you to talk about this.

Colby Office: Me, too. Yeah. So this is something that's actually a responsibility of Everett Housing authority as the section 8, Pbb. Contract administrator. So it's really kind of like an

Colby Office: Melanie's kind of side of the house. It's related to the Pbv contracts that we have signed for Bakerview grand View and Pine View, which are Eha's previous public housing property that we converted through the rental Assistance demonstration program back in 2014. And so, as the you know. Pbv. Contract administrator, that is, providing the rental assistance to this property.

Colby Office: We are required for our Board to review annually the budgets for these properties and information about the replacement reserves. And so we've we've been doing this because our tax credit budgets are included, are included as a reference. When the board passes the budget in June every year.

Colby Office: but we wanted to. HUD has, you know, kind of been looking at this a little bit more closely, and so we just wanted to make sure this was really explicitly included in the budget approval process.

Colby Office: particularly as it relates to the replacement reserve, so that the board can take a look at this. So it's and the purpose is just to make sure that you know we, as the housing authority, providing the rental assistance are making sure the properties are being taken care of from a capital need standpoint, flowing appropriately.

Colby Office: And so this is the calendar year 2025 budget for both properties. Pine view is one of 8. I believe it's 8 properties in the ever affordable housing portfolio. So the Ehp column represents, you know, all 8 properties. But we're calling out Pine View because pine view is the Rad Pbb property that's in that portfolio.

Colby Office: So just wanted to give you an overview of total income, total operating expenses, net operating income and cash flow for each of those property groups

Colby Office: and then below, you'll see. And this is something that we, if the Board is interested in seeing this, you know, for all the properties we can easily, you know, provide it. We kind of have some of this information in the property portfolio reports that we showed you a couple weeks ago, but

Colby Office: this shows the current balance of the replacement reserves for each of those property groups. It also includes what we're setting aside every you know, for the calendar year. We deposit this into the reserve out of operating, and then our projected capital expenditures that were included in the capital budget, and then the projected replacement reserve balance at the end of this calendar year for both of those

Colby Office: so happy that we can finally no.

Colby Office: Oh. Colby Office: thanks to Craig, he put together this cash position as of May 31, st and I hope the board understands where our cash is, and and if we move forward to adopt the budget, unrestricted cash is our the 1st grouping that we have, and we have general cash, which includes our a general payroll.

Colby Office: Mtw. And replacement reserves and

Colby Office: we're looking at ending May at 3.7 million.

Colby Office: The property cash is the are those individual properties that we group together, and as of May, they're at 8.5 over 8.5. Excuse me, the Hcv cash is just a little bit under 2 million is the end of May. So a total, unrestricted cash of.

ksmith: To.

Colby Office: 14.2 million restricted cash has is due with our like security security deposits, our replacement reserves.

Colby Office: There's another category, but I can't think of it right now that we is related to the properties, so that property related, it has those

Colby Office: is looking at 15, 1, 6, 5. That's the end of May

Colby Office: our section, 18 disposition proceeds, are a little over 10 million, and the Http cache for

Colby Office: Fss. The forfeitures and emergency housing is at 242,000, so total unrestricted cash as the end of May, or excuse me. Total restricted cash. Sorry at 25.6 almost 25.7 million.

Colby Office: So it gives a good summary of where, where our cash position is, including all our activities, free agent.

Colby Office: any questions regarding that

Colby Office: I can just add one more thing to just really to the replacement reserves. So up there under unrestricted property cash replacement reserves that should be the amount that we have set aside for replacement reserves that's not restricted by lenders or investors. So that's 1 bucket, and then down below, where you see restricted cash property related cash, that 15 million also includes the replacement reserves that are required by the lenders and investors. So

Colby Office: that kind of shows you where you where you would look for this, that that bucket all the time.

ksmith: Thank you.

Colby Office: Before. I forget the presentation, I know wasn't in your packet, but we will provide you access to that. So you have that.

ksmith: Great.

Colby Office: Hmm.

Colby Office: Moving on position. Summary we have by department, and then we also have more detail on the next slide, too, but this gives a summary of where those changes occurred from 2025 last year's budget to 2026.

Colby Office: We had a lot of movement around within some of the departments and position change. But the net effect was the 4 that we're looking at, adding that we talked to that we mentioned before. So, moving from the 146 and a quarter to 150.

Colby Office: Our largest department housing management, which can be understandable at 61 ftas, 45%. That's total.

Colby Office: Next slide provides the breakdown by position. And how many people are in those positions? So that gives you kind of

Colby Office: where everything lies in the sense of that grouping for the departments.

Colby Office: Sorry

Colby Office: any questions on the physicians and ftes.

ksmith: Great detail. Thank you.

Colby Office: Thanks to some budget notes core operations. Of course, our program are wholly owned

Colby Office: who own properties. Tax credits, again, are out of calendar year.

Colby Office: We're gonna take that out. The next budget that we have to do. We're all going to be on the calendar year. We operate on the fiscal. The Ha operates on fiscal. That's where we are now. But we're going to do the conversion, starting as of January 2027, as we are 1st a calendar year full calendar year. So we'll look at an 18 month conversion.

Colby Office: requesting we adopted one year budget today, and then

Colby Office: further down the road. When you feel comfortable enough hopefully before the end of the 12 months, and at tack on that 6 months, so that you have that 18 month

Colby Office: budget, we will actually be doing financials for 18 months.

Colby Office: And we thought keeping that in unison would probably be the best way to do that to.

ksmith: Move forward on this.

Colby Office: So that would be my recommendation. Anyway.

Colby Office: it's gonna be so nice to be on an annual budget, because we have audits like all the time. You know.

Colby Office: she's like you just don't have any time to do anything because you're constantly audit situation.

Colby Office: I also mentioned that our hard, hard annual annual plan was just approved for 18 months.

Colby Office: so they approved our plan for 18 months, which is a big deal, too, because, like Janine was telling me, we were started process already about 4 to 6 months back, to kind of do all of the like resident and public engagement and planning, and so we would have been doing another bunch of planning process.

Colby Office: Okay, you know, working

Colby Office: is still in the process of changing, updating our reporting to an 18 month so that we can

Colby Office: conversion. And once that happens, then we're kind of heading down that road

Colby Office: as we end this fiscal period, June 30, th 2025, that still has our audit for the 12 months. So we're gonna still see an audit beginning November, when we have to file. Is it November that you have to file. Yeah, and then they'll come back in February or so for that audit for the 2025. After that, then we won't see for 18 months

Colby Office: themselves, in a sense hopefully a little breather for for us to be able to enjoy 18 months

Colby Office: any questions on that.

ksmith: But the new format.

Colby Office: So the authority over 3,700 housing choice vouchers. I didn't have the exact numbers, but it says it's a lot.

Colby Office: maybe participate in the moving to work demonstration. The way we actually said 22.

Colby Office: So still fairly new, but working through it and seeing where that flexibility is.

Colby Office: we have, we have to adopt some type of budget changes into what I presented. We can do that as we thought, but I encourage you to adopt something.

Colby Office: What's next?

Colby Office: That's my presentation.

Colby Office: Thanks.

Colby Office: Thank you.

ksmith: So with that, said

ksmith: I'd like to call for a motion to approve. Approve!

ksmith: The proposed 2025, 26 budgets.

Colby Office: Translation.

ksmith: Did.

Colby Office: Person remains out.

Colby Office: Commissioner Perez made the motion Commissioner Randall.

ksmith: Thank you. Thank you. Couldn't hear all those in favor.

Cynthia Andrews: I.

ksmith: Okay, any against.

ksmith: I probably wouldn't hear it anyways.

ksmith: So then we will move forward on that. Thank you.

ksmith: Now,

ksmith: I know that we did not adopt Resolution 1617, so I guess the next regular meeting of the Board of Commissioners will be to

ksmith: to be announced.

Colby Office: Think I included language in that we included language in the cheat sheet that had, like a.

ksmith: Okay, thank you. Okay, okay.

ksmith: I'll go with it. Then. Okay, so the next regular board meeting of the Commissioners will be at noon, Monday, August 25, th

ksmith: so I will now call for a motion to adjourn at 12 3.

Colby Office: Yeah, Commissioner Smith, I'd like to have Kristen go through the work that we presented at the at the at the Retreat sheet. I can't remember what we call this document. Yeah, portfolio report portfolio report. We briefly went through this at the Retreat, but we kind of rushed through it. So I wanted to just go through it real quickly.

ksmith: Okay.

Colby Office: And I'm gonna also ask Erica to to help me with this, too, because there's a

Colby Office: portfolio performance section, too. So let me get this.

Colby Office: Okay? So this was the document that we handed out to the board at the

Colby Office: Budget workshop a few weeks ago. I also emailed the Pdf. To heather. So if anyone would like to receive it electronically, you can also get it that way. There are no changes since the version that you saw at the Retreat, but I know we didn't have a lot of time to go through it. And so

Colby Office: As we were talking about, you know, last time. We have one page for each portfolio grouping and the sections are on key performance metrics for the properties, key financial metrics, and then a budget variance analysis.

Colby Office: So starting with the tax credit portfolio, and this is a quarterly report. So for the tax credit portfolio, which is on a calendar year, it covers q. 1 of 2025, which is 3 months worth of information.

Colby Office: But there's 1,056 units at this portfolio, and you're good. I have this

Colby Office: and give you a good kind of summary of what we're looking at here for the property performance aspects, and what you'll probably see as we go through each of these tabs, for each portfolio is sort of these themes pop up where you see red

Colby Office: red is not good. Obviously, everybody knows that. And so I'm just gonna kind of draw your eye to those, because what we're seeing with regard to things like physical occupancy number of unit days leased

Colby Office: and routine work, orders, and average days to re-rent units

Colby Office: sort of align with the things that I spoke about in the Board Retreat. With respect to Staff Turnover with respect to the need for having processes in place. So we're really clear on what the priorities are are for these properties.

Colby Office: and

Colby Office: really just aligning our onboarding. So Staff know when they are starting to work on these properties, what these bottom line numbers really mean to us when they're carrying out their work. If you're going into a unit. And you're just sort of, you know, doing the unit turn sometimes that connection is not made. And so we're really seeing a need to be able to communicate that up front.

Colby Office: And I think you'll see as we as we go through these tabs. The red is sort of kind of

Colby Office: a lot, you know, aligned as we go through. So I I do want to point out something with

Colby Office: Let's see, there was one tenants with delinquent rent, so tenants with delinquent rent. We are looking at the number of tenants with delinquent rent, not the amount of delinquent rent, so that's a distinction I think that we need to make, because you will see red in some of those. And so that could be you know, I checked up on one property recently, and it was.

Colby Office: It was less than a handful of tenants. It was like 2 or 3 tenants that have that delinquent rent. So it's not. It's not always that we have high numbers with rent collection. It's it's the number of tenants, just something to keep in mind there.

Colby Office: And so yeah, as Erica said, we have the metric. It reflects how the portfolio is performing. The target is where we want the portfolio to be. And then the percent target is how the property is performing compared to target. And then there's a should be column that talks about whether we want the metric to be, you know, above or below 100, basically

Colby Office: and then on the far right, is a description of what the metric represents. So as Erica said, like physical occupancy rate is the number of unit days leased, divided by total unit days, and so like in this case, the tax credit portfolio is at about 97% target is 98%. And so the portfolio is performing at about 99% target. So pretty close.

Colby Office: but just a little bit under

Colby Office: when it comes to key financial metrics. The rent collection rate is a really big one. So this represents the rent that we have collected compared to the rent that's owed. So of course, 100% would be great. That's what we you know ideally would want, but

Colby Office: typical, you know, sort of in the affordable housing market. The rates tend to be about 95%. And that's because, you know, there's there will always be circumstances where a tenant does not pay their rent for various reasons.

Colby Office: and the property's job is to do the best they can to try to collect that rent from the tenant, but at some point, if there's uncollected rent or unpaid rent, excuse me, then there's a process from you know, moving that tenant towards eviction because we believe they have to pay rent to be able to stay in the unit.

Colby Office: So in the case of the tax credit portfolio. We're at a little bit less than 90% rec collection rates. We're not hitting target on that one. But the rest of the key. Financial metrics are looking really good for the tax credit portfolio. So the operating cash ratio, we have 3.4 3 months of operating expenses and operating cash. So we have a good cushion for anything that might pop up there.

Colby Office: We're beating budget for operating costs per unit, our debt burden. We'd like to see that below 30%, the debt burden of tax credit portfolio is 17.8 5%.

Colby Office: So we're doing well there

Colby Office: and then we're well above meeting debt cover ratio at 1.9 6. So that means for every dollar of debt that we have. We have a dollar and 96 cents to pay it

Colby Office: and then our replacement reserve balance per unit for the portfolio is at 2,733, which is great. We have an internal metric where we would like to have a minimum of $1,000 per unit in replacement reserves for each portfolio just in the event that we have, you know, unexpected things that come up, or emergencies that aren't fully covered by insurance, for instance.

Colby Office: and then overall in terms of budget variance. We're doing great at this portfolio. We are not quite hitting target for our actual income compared to budget, but all of the other metrics are positive. So we're below budget for operating expenses. We're above budget for net operating income. We're right where we need to be for debt service. That one. We want to be 100, and if it's above or below, then we just made up made an error in budgeting.

Colby Office: and then we're above budget for our net cash flow at this portfolio.

Colby Office: And just another comment here. You know, the net operating income is, you know, total income, less total expenses, and then the net cash flow of the property is the net operating income less debt, service, principal and interest.

Colby Office: and then moving on to our nonprofit portfolio. This portfolio includes 9 properties totaling 369 units. These are our properties that were in the HUD. 2 0. 2 craft program, and converted to Pbv through the rental assistance demonstration program in like 2023,

Colby Office: and so, Eric, you can share that. Yeah. So we're almost at our target here very close for occupancy rate. But I want to point out a couple of things that sort of overlap well.

Colby Office: occupancy does sort of overlap with average days to re-rent units, but we have experienced some unexpected.

Colby Office: well unexpected vacancies, but vacancies that took us much longer to get the unit ready.

Colby Office: Folks who have been there for a long time, appliances needed to be replaced, flooring and things of that nature. So days can add up very quickly when you have a long unit term like that, and we've got drive time for staff and waiting for parts and things things of that nature. And I do know that that has taken place in this portfolio as well as some staff turnover.

Colby Office: And then I also like to point out routine work orders. So 260%,

Colby Office: 7%. And we want to be app or below.

Colby Office: at or below, or equal to a hundred percent. Here.

Colby Office: We have set a target of 3 days

Colby Office: to perform routine work orders across all of our portfolios. This target was set many, many years ago.

Colby Office: and you'll see pretty consistently as we go through these tabs that we're not needing that

Colby Office: 3 days is pretty ambitious. And so we're going to be looking at that at that target, and really try to make that still a high performing target, but still something that is more realistic to what our maintenance staff are dealing with in terms of these portfolios and properties being really spread out. Now, when I was here years ago, it was kind of like this. Now it's like this, and

Colby Office: we've got lots of drive time we've got, you know, some parts on the property. We're trying to make that more effective and efficient. So we've got routine parts on the property, but when when it comes to unit terms, you know often we are having to order parts or pull from inventory at facilities which is here on the North end. So there's a lot of factors that play into being able to turn a unit in time and also get a routine work done on time.

Colby Office: And I think we definitely need to look at that. That target number.

Cynthia Andrews: I have a question.

Cynthia Andrews: So what? What is the what is the

Cynthia Andrews: challenge? Can you? Can't you? Change that target to 5 days.

Cynthia Andrews: or why keep it at 3, when we know.

Colby Office: Yes, and that that is what we're proposing. And as Kristen and I were, we're going through this report kind of getting prepared for the board retreat. This discussion came up. And

Colby Office: yeah, we could just change it to 5. We decided that we are going to keep the target as it is right now, and continue to have that discussion and include the teams and make sure that everybody's on the same page, and that we've had that discussion about what the target should be with the teams before. You know, we just sort of

Colby Office: make an arbitrary decision on that. But it definitely needs to change and

Colby Office: you know, having the team's input about what what is realistic is vital to.

Cynthia Andrews: Yeah, that makes sense. Okay, that makes sense. Thank you. I just didn't want to see you have a target that you're not able to meet and

Cynthia Andrews: thank you for that. I appreciate it.

Colby Office: Absolutely okay. So those are my comments.

Colby Office: Nonprofits. Okay? And then we're looking really good for the key. Financial metrics for this portfolio. This portfolio is a bit unique because of, you know, the rad conversion. And so

Colby Office: we

Colby Office: have no debt at the properties, and we have a very high replacement reserve deposit per unit which is required by HUD as part of the rad conversion. And so what you'll see is that, for instance, our target operating cost per unit is 15,305, which is very high. That's our budgeted operating cost per unit. And it does include our replacement reserve.

Colby Office: And so we are actually beating the operating cost per unit, which means, you know, we're still depositing the required reserve every month. But we're just our operating costs are lower than what we budgeted. So that's what you're saying there in terms of. Why, the target at this portfolio is so higher than you'll see at the rest.

Colby Office: we're beating our rent collection rate target by 4%. We have at least, you know, the 2 months of operating expenses and operating cash

Colby Office: debt burden is 0, which is great. But then, in exchange for not having debt at the property, we have the high replacement reserve deposit requirement.

Colby Office: And so, as you'll see here we have an average of $18,210 per unit in the replacement reserves, which is extremely high.

Colby Office: And again, it's just because typically what you would see is debt at the property which had been used to finance capital like a renovation. And so in this case, we have to just set enough money aside every year to essentially kind of do a long running renovation at the properties, and at some point this may change in the future. But for now this is working well.

Colby Office: and then same kind of theme here in terms of budget variance, we're we're down in terms of total income compared to budget. But all of the other. You know, we're beating budget for operating expenses, noi debt, service and cash flow.

Colby Office: and I will say, I think some you know. What I hope we are able to do is get a little bit more nuanced in our tracking, because right now, Eric and I don't have the right data to be able to see, you know, when, if we're coming in, you know, under budget for income, is that the result of vacancy loss is that the result of

Colby Office: we didn't increase contract rents as much as we expected to. We don't have the data right now to be able to track the reasons behind why we're under budget in that category. And so that's something that we'll be looking into in the future. So we can better report on like the reasons why that's

Colby Office: coming in under budget, if it is.

Colby Office: and then we have the HUD 2 0 2 Pbra portfolio. So this stands for

Colby Office: HUD section 202 project based rental assistance program. And so this is our Linwoods and Silverwoods properties, which are kind of like the HUD 202 practs. But they do also have debt.

Colby Office: And so this is just between the 2 properties. There's 74 units.

Colby Office: right? Okay? So I'm looking at this occupancy rate occupancy rate.

Colby Office: Yeah, I think we had a lot of vacant units that were vacant for quite a few numbers. We have vacant units.

Colby Office: even just with less than a handful of vacant units where folks have been there for a long time again, I mean, I kind of sound like a broken record. But this is, you know, sort of throughout. When we have to replace appliances and flooring and kind of the major pieces of of the unit that can definitely add days to

Colby Office: turning the unit and getting the unit occupied as well.

Colby Office: Routine work orders again. I'm just, you know, kind of pointing that out, and that number will change once we are able to define a better target for that, and then average days to rent units, to rent the units again. This is

Colby Office: the number of vacancies, the time that it's taking us to turn. But I don't want to let ourselves completely off the hook, because I do think that there is some training and some process oriented things that we can address on the property to for beginning to end. Once that unit becomes vacant to the time it becomes leased again that we have a cleaner process and a more clearly defined process for folks who, especially for folks who have just recently been on boarded to the properties, and they're kind of getting used to the flow of the work.

Colby Office: And then this portfolio is also a little bit unique because of the way the program works. And so this is, we have HUD Con. We have contracts with HUD for the rental subsidy, which is different than our other properties and rental rent, subsidized properties. And so there's very strict requirements that HUD has around. You know how much operating cash we can have, and how we can use our replacement reserves. And so what you're seeing there is an operating cash ratio that's negative, which

Colby Office: you know shouldn't be the case. But in this case we basically had. We paid

Colby Office: expenses that were more than the operating cash we had on hand, which means that Eha paid for some of these expenses, and we'll get reimbursed. But we're we're really not supposed to be doing that with this portfolio. It's

Colby Office: supposed to be self-sustaining, and we're not able to like temporarily lend this portfolio money to pencil. And so this one wrote, this portfolio requires a lot more monitoring and communication between finance and property, management and asset management to kind of address all sorts of

Colby Office: financial issues that come up as a result of how restricted the property is but overall. I don't see. You know there's nothing here that concerns me. We will always have a very low operating cash ratio if we have too high of an operating cash ratio. Then, at the end of the year, HUD will just sweep, basically like sweep the excess cash. And so we do want to make sure. We're sort of, you know, spending that down as much as we can.

Colby Office: And then, you know, same with here we have, we're, you know, below on income. I think that's most of the results of the vacant units. And we also had a lot of turnover within this portfolio.

Colby Office: So you know, and it's a senior portfolio. So usually the reasons that units are turning over are people are moving to assisted living and or, you know, passing away. So it's hard to predict when there might be a surge in that

Colby Office: thing happening.

Colby Office: The debt service, for some reason, is below what it should be so we'll let you know. Look into that.

Colby Office: I found my notes. Good thing, because this one has a big

Colby Office: down to our affordable properties. So that's Rucker Oaks, Royal Oaks, Lakeview Terrace, Pacific Square, Madisonville and Rainier Park.

Colby Office: So our physical occupancy target 98% worth within 98% of our of our target.

Colby Office: So we're we're close like to, you know, consistently. See that within our target range

Colby Office: tenants with delinquent rent. So this is much higher than we'd like to see? Obviously, that's a hundred 86%. We want to be below or equal to 100%. What I did find out is that there are 12 residents with small balances totaling less than $500 out of

Colby Office: 24 residents. So again, this kind of goes back to, you know these aren't like big, huge amounts that we're talking about, but the number of tenants can sort of

Colby Office: make it appear that way.

Colby Office: so you know, it kind of seems like not a big deal. But you can see how this impacts our our target metric.

Colby Office: This is a pretty simple lease enforcement issue, you know, even with small balances, we need to be enforcing the lease. And you know in the past there has been sort of 2 schools of thoughts about small balances, one where it's sort of, you know. Just remind the tenant.

Colby Office: you know. Make sure they get they get back on track the next month, the other. The other school of thought is, we just need to be enforcing the lease. So there's a fine line there, and we're really trying to balance that, because when we look at these numbers, we also need them to look like we need them to

Colby Office: for our metrics and for our targets.

Colby Office: it is somewhat common when a tenant has a paid rent that that through that legal process, if he payment arrangement has been made through the legal process.

Colby Office: you know. So.

Colby Office: I personally think that we need to be enforcing the rent, because even through that legal process there are avenues for the tenant to remain housed, but still be in compliance with the lease. So we need to be able to allow that process to follow through and play out, and we can still be working with resident services to help that tenant be successful, or that house will be successful, even though there might be money owed for the for the unit.

Colby Office: Again. Routine work orders is there and then average days to rent units. So across the board, we've had this staff turnover and this sort of lack of processes in place, and just say it again, we need to do that across folios and make sure folks understand sort of the priority from from beginning to end when it comes to vacancies.

Colby Office: And then so this portfolio has 90 units. So it's a pretty small portfolio, and

Colby Office: you know, so so even kind of small, you know. Differences in sort of actual budget, you know, can can

Colby Office: look, you know, maybe a lot worse than they

Colby Office: are. But I do. I am concerned about this portfolio in terms of how it's performing against budget. But I'm kind of jumping ahead. So, popping back up to the key financial metrics.

Colby Office: You know, overall. Everything looks good for this portfolio. We are over budget in terms of operating costs per unit. And so we need to dig, you know, into

Colby Office: what is driving that, but I know some of it has to do with

Colby Office: unit turns that have ended up being more expensive for the amount of work that had to be done in the unit compared to what we were expecting. So that can be tricky, because we always are just predicting how many unit turns we're going to have and the amount of money that we're going to need to spend on them. But then, reality is, you know we don't have control over unit turns. And so if someone moves out and it ends up costing us a lot more to get that unit rent ready again.

Colby Office: It's something that we can definitely use cost containment measures on. But at the end of the day we need to be able to re-rent the unit to keep earning income on it. So

Colby Office: but yeah, we're

ksmith: I was wondering if like, because items can cost differently at different times. So I was just wondering how you guys were controlling that. So.

Colby Office: Yeah, I think you know, a big issue for us right now is flooring replacement. And it seems as though with a lot of our units. We're having, you know, we were doing full flooring replacement.

Colby Office: but you know, the cost of flooring is just going up and up and up, and in some cases, even if we would like to be able to replace the flooring, we're starting to have to make decisions to not replace it and maybe repair it, which makes the unit more difficult to rent. But you know, sometimes flooring can cost us upwards of almost $10,000, depending on how big the unit is, and it's just not something that we can easily

Colby Office: budget, for.

Colby Office: We just don't have a lot of room in operating budget for that type of expense.

Colby Office: Not about that. But I did want to add something to the average days to re-rent unit and occupancy for the affordables. I don't want to give the impression that maintenance

Colby Office: doesn't know what they're doing, you know, or they're they're not doing their jobs, they absolutely are. They're really constrained by a lot of things right now. But one of the constraints we had at Lakeview Terrace is 2 units were offline for close to a year, because of frozen

Colby Office: pipes that burst and caused caused flooding. And in those units, so having those units offline for so long, really had, you know, an impact on what you're seeing here. And then.

Colby Office: you know, while that work was being done, we had a contractor change as well. So there! There was a lot going on in just these 2 units that are

Colby Office: impacting the numbers that you're looking at there. So

Colby Office: yeah, yeah, what's really nice about this document for me is I sit down and go through with Erica

Colby Office: Kristen.

Colby Office: You know I can key in go. Why did that happen, you know, and and there are some that get very explainable, like the water damage. But if if you don't have a document like this that has all this stuff together, you just, you know you're not keying in on things that might be a big pile

Colby Office: and a couple that we identified right out right out of the gate like, boy, this is something. Get this under control, so I can't say enough about the work that was done on this document. I find it to be extremely valuable, and I think for the board that you're actually seeing this data in one place, it's got to be reassuring.

Colby Office: even though there's some bread. And just to add, I think you know, we related to those insurance claims. There is definitely some room for improvement with our process, because I think the work did take a lot longer than it needed to, and with the contractor changes and certain things that happened.

Colby Office: insurance didn't fully reimburse us for the cost of that project. And so that's definitely something that I don't expect to see in the future, because we are honing in on. You know exactly the order that things need to happen, and to make sure that.

Colby Office: Okay? And finally, Huntington Park is just a it's a standalone project just because of the size. And it's and because it's different than the other ones. So Huntington Park is managed by a 3rd party Property Management company, groomstar, and has been since we acquired the property in 2022.

Colby Office: It has 381 units, and we are working towards being able to make sure the data for this property is apples to apples with the rest of our portfolio. But we don't have the same level of data in our software system for Huntington Park that we do for the rest of the properties, because we don't own it or we don't manage it ourselves. And so we're working through this. But there's some metrics that are calculated a little bit differently.

Colby Office: So the target metric for occupancy or the sorry. The target for occupancy of this property is 96%, because it is a at cost. Property that is not rent, subsidized and not rent restricted, and we are hitting. We've been consistently hitting that target.

Colby Office: Our resident retention rate is a little bit lower than what we would like. So we're hitting about 56% of residents staying, and therefore 44% of residents choosing to move or be evicted.

Colby Office: And

Colby Office: we also have a higher percent of tenants with delinquent delinquent rent than target. This has been a consistent issue at the property where we have

Colby Office: a subset of tenants that are always

Colby Office: delinquent on their rent, and then they get caught up. But they're always showing up as being delinquent, and they're getting charged late fees, and then on top of that, we have other residents that are 60, 90 days, 120 days delinquent, and they're at various stages of the eviction process.

Colby Office: And so this is something we continue to try to work on. But there's a pretty tight process here at the property, for you know if rent is not paid by the 5th of the month, they're getting a 30 day pay or vacate, and the process starts so

Colby Office: in terms of our key financial metrics we're we're beating target with in terms of rent collection. Operating cash ratio is a little bit skewed because there's an

Colby Office: a number of expenses, or actually no, never mind, I corrected this. So we have a replacement reserve at the property that is, owner directed. So it's not required by any lender or funder, and so sometimes there's just a delay in terms of you know, the operating cash is hit to pay for

Colby Office: capital replacements, and then eventually it's drawn out of the reserve to offset. And so but anyways, that this property has a very healthy operating cash ratio

Colby Office: and I guess the operating cash ratio is also skewed because we pay debt service every 6 months, but we don't have a debt service reserve yet, and so sometimes it looks like we have a lot of operating cash, but it's about to be used to pay, you know, a debt payment that's due. So we're looking at changing that for the upcoming year, so that that is being set aside every month, so that that'll essentially kind of lower the operating cash ratio. But it will assure that we have funds set aside in an account to pay for debt service.

Colby Office: The debt burden that this property, as you can see, is much higher than what we would typically have at one of our properties. Eha purchased this property with over a hundred percent

Colby Office: debt, and so purchase the property plus paid expenditures with debt. And so a very large percentage of our net operating income goes towards paying debt service.

Colby Office: Also the debt service coverage ratio of 1.1 5 is not required. But that's just kind of like an industry standard. And so at this property, we are not meeting, that we're at 1.1 3, as of the quarter.

Colby Office: We do have a good balance in the reserves. But again, this can be skewed because we might just be waiting to be able to draw down some of those reserves. So

Colby Office: take that with maybe a little bit of a grain of salt.

Colby Office: The budget variance analysis. Everything looks great. We're

Colby Office: Our income is higher than budget. Our operating expenses are lower than budget. Our Noi is higher than budget debt services right where it needs to be, and our net cash flow is beating budget. So no concerns at this property. I would just say, in general, I think one of the challenges here is that because debt

Colby Office: takes up so much of the

Colby Office: Noi at this property, and it's very dependent on kind of rents trending in a certain way, and the market has really, like slowed down and flattened in terms of our ability to increase rents. In some cases we have rent rates at the property that are lower than when we bought, which is, you know.

Colby Office: not something that we obviously underwrote it. We, you know, you typically don't underwrite rents to go down, you underwrite them to go up slowly. And so we just have some challenges at this property in terms of not getting necessarily like the revenue we were expecting. But we're really trying to make sure we have enough cash for

Colby Office: replacements, and we will look at doing a recapitalization with, you know, at the probably around the 10 year mark. So we were like 3 years.

Colby Office: this particular property, because we have so much debt on this property. It's really important that the money that we get from this property

Colby Office: let me bring that.

ksmith: What's that?

Colby Office: And this is just a summary where you can see, you know there's a column for each of the portfolios, so you can kind of. See how the properties are performing like compared to each other. In a sense, although, like I said, some of the targets differ, depending on the portfolio. But you can kind of see here the trends that Erica was talking about in terms of the physical occupancy rate

Colby Office: days to complete routine work, orders and days to re-rent units that kind of cross over a lot of the portfolios that we'll be focusing on

Colby Office: And then, you know, overall rent collection rates are, are not that bad, but at the tax credit portfolio is where we'd really be focusing there.

Colby Office: Oh.

Colby Office: and then digging into, you know, the operating cost per unit at the affordables, but otherwise everything's feeding budget.

Colby Office: And then this budget variance analysis section. We tried to compare apples to apples, so everything is converted into like a quarterly, an average quarterly number

Colby Office: and then the other thing I'll just add for this page is that right now we, the averages on the far right are not weighted averages, and so they are essentially kind of skewed. But it's gonna take us a while to build out the formulas for doing weighted averages. So

Colby Office: again, so that'll be improved hopefully on the next report. But for right now, just.

Colby Office: you know, be be aware that that's and then the phone

Colby Office: final slide is just capital improvement. So unless

Colby Office: I can just go through this really quick and then see if there's any questions on anything.

Colby Office: So again. This will be expanded in future reports. But right now this just shows for each of the portfolios the amount that was budgeted either in the fiscal year end 2025, or calendar year end 2025 budget.

Colby Office: The amount of work that's been completed, the amount that's in progress, and the amount that's remaining. And so you'll see that for the Lihtec nonprofit and HUD 2 Pbra, we're on the calendar year for those. So we only have like 3 months, you know, of

Colby Office: time to spend down that money. So you you'll see that not as much as expended as

Colby Office: and Huntington Park, and the affordable portfolio where we have 9 months of data, although sorry I don't have the Huntington Park data currently for this.

Colby Office: Oh.

Colby Office: and so that'll be really. I mean, that'll be one of the benefits of once we convert everything to the calendar year. It'll be easier to look at this and be able to kind of compare apples.

Colby Office: and then we just also have our capital fund spend down summary here. So our capital fund is

Colby Office: revenue that we received from HUD for public housing. However, we don't own any public housing that is occupied, and therefore this is something that our Mtw. Flexibility really helps us with, because we can use this money rather than using it for capital expenditures

Colby Office: in the public housing portfolio which we don't have anymore. We can use it for other types of things like our development projects that have project based vouchers. So you can see how we've spent Cfp

Colby Office: to close out Madrona Square, and then how much we've spent of Cfp for the Ben Young, new construction development, the mariner, new construction development. And then we are starting to take advantage of being able to charge the management fee at that property which is revenue to

Colby Office: Eha's general fund, and then this also shows just the remaining amount to be spent, and we have certain expenditure, obligation and expenditure deadlines with these grants that we track pretty closely. So, Mary. The stuff that you signed at the beginning of the meeting was for that cf, 2025. Grant, yeah.

ksmith: Well, this sure helps with planning.

Colby Office: You remove them.

Colby Office: One more thing about Linwoods and Silverwoods. I just found an important note. I want to do right by property management, and they're really like, Mary said, we're kind of. We're just at the beginning of really starting to dig into this stuff. So when I see a red right. I really need to understand what's going on there, and some stories are bigger than others, but something that's happening at Linwoods and Silverwoods. These are 2 senior properties.

Colby Office: One of these properties has a handful of studio units, and those studio units are consistently harder to get leased up, because when tenants are offered, applicants are offered. A, you know, choice of a 1 bedroom or studio. The one bedroom is is usually chosen, and it's income based. So

Colby Office: this is sort of similar to a marketing issue that we're having at Madronna Square, where they're just tax credit units, where there's no project-based voucher attached to that unit. We're really now having to get creative and start brainstorming and exploring how we better market those units. So those are the sort of deeper layers of conversation that are happening with these harder to fill units. Why are they harder to fill

Colby Office: the Linwoods property? The studios are a bit easier than Silverwoods, because Linwoods has

Colby Office: Fred Meyer across the street? There's a pharmacy, and Silverwoods doesn't have that. So so we're really taking a deeper look at where our properties are located what people are looking for.

Colby Office: There's just so much to consider when trying to market these units. And this is also a new and exciting thing for us

Colby Office: is marketing where you know, when I was here years ago, it just sort of wait list. Wait, list, you know. Just fill from the wait list, and that's not the configuration of our portfolios anymore. So so we're tasked to do things a little bit different.

ksmith: It's great.

ksmith: Well, your document sure helps with planning, I have to say.

ksmith: and then enlightening you where you can make improvement. That's awesome.

ksmith: Well, anything else that I need to know about, Mary, that before we.

Colby Office: The only thing that I do want to mention is Meadows one. We're doing an elevator

Colby Office: replacement at that property. It's going to be down for about 6 weeks, I believe, and that, as you can imagine, is causing some real issues within the residence there. I've heard from the mayor's office and a couple council members because they've been approached. And I've given them the information. I actually contacted the mayor because I knew that was going to happen, and said, Hey, you know, we kind of get this under control.

Colby Office: There are some residents that need to be relocated. We're in process of doing that. We, the staff has done a great job and kind of programs into you know what that means to them.

Colby Office: For instance, they're putting trash cans on each floor so that they don't have to carry their trash down. They have arranged for somebody to help people get stuff up to their unit. So there's a variety of things that we're doing. This is not the 1st time we've had to do something like this, and there's no way around. If you don't replace the elevator. You're gonna it's gonna break down, building

Colby Office: no parts anymore. And it could be down way longer. So just a heads up in case you hear anything that staff is doing a great job down there.

Colby Office: So, and I plan on being there, in and out within the 1st week.

Colby Office: so that the residents see me that we're paying attention. You know what's going on in the building.

Colby Office: It's in here.

Colby Office: There's only a single elevator. Yes, what year were they built?

Colby Office: This one is, I believe, 27 years old. And so typically, these elevators are built to last for about 15 years until you have to replace the control panel and other parts. So it's it's not a full elevator replacement, but the control panel is no longer manufactured. And so, because of the age of the elevator. We're installing a new control panel that we can't get parts for.

Colby Office: And so we've been, we've been handling these elevator locations as we've been able to. But, unfortunately for the nonprofit portfolio and the HUD. 2 0 2 Pba portfolio, they're all single buildings with only one elevator, and so we were able to replace the elevators at Glenwoods and Silverwoods, and it was the same, you know thing they were down for 6 weeks, you know. It is a burden for the residents, because, you know.

Colby Office: they have mobility issues, and it's hard for some to get up and down the stairs. We had researched

Colby Office: all sorts of different options, you know, and the you know. The best way to do this for this situation is to

Colby Office: do a combination of what we're doing and relocate certain residents that are, you know, wheelchair bound as well as implement. You know, all these other sort of accommodations that we can during the process, and just try to make sure that it's down for as minimal amount of time as possible. But you know Lni has to come, and you know, kind of certify everything before we can turn it back on to

Colby Office: oh, they're typically 3 3 stories, sometimes 4 stories.

Colby Office: Welcome. Wish to introduce other questions.

Cynthia Andrews: Question, where are we relocating these folks to.

Colby Office: I'm I'm not sure that we know the exact yet

Colby Office: accommodations, but those accommodations will definitely include a kitchenette style

Colby Office: space. So the household or the tenant has cooking amenities.

Colby Office: Yeah. So it's typically like an extended stay. You know, type of a situation. I know that property management is looking into any other units

Colby Office: within that group of buildings that have our ground floor that could be temporarily used.

Colby Office: So we look at a couple different options.

Colby Office: and we've alerted the fire department.

Colby Office: Do they know this is the whole.

Cynthia Andrews: Thank you.

ksmith: Any more comments.

Colby Office: I think that's it. Okay.

ksmith: Because I can't hear everybody. So so

ksmith: yeah, okay. So the next regular meeting of the Board of Commissioners will be scheduled for noon, Monday, August 25, th 2025,

ksmith: and I need a call for a motion to adjourn.

Colby Office: Just one second.

ksmith: All right, all in favor.

Colby Office: She didn't cry.

ksmith: Okay, and no one's again. So thank you. Everyone.

Cynthia Andrews: For all the information we appreciate it.

ksmith: Yes, it was great.

Colby Office: Thanks.

ksmith: Bye, everyone.