September 15, 2026, Item #4
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AG EN DA REPORT City of Poway
CITY COUNCIL
September 15, 2026
Honorable Chairman and Members of the Housing Authority Board Julie Procopio, Director of Development Serviceq
Darian Demerjian, Senior Management Analyst
(858) 668-4636 or [email protected]
Poway Housing Successor Annual Report for Fiscal Year 2024-25 Pursuant to California Health and Safety Code Sections 34176 and 34176.1 (f) (Dissolution Law), the Poway Housing Authority, in its capacity as Housing Successor to the dissolved Poway Redevelopment Agency, must prepare an annual report detailing its financial activities each fiscal year. The Poway Housing Successor Annual Report for Fiscal Year 2024-25 (Attachment A), and the Poway Housing Authority Basic Financial Statements and Independent Auditors Report for the year ending June 30, 2025 (Attachment B), are included with this agenda report for review by the Poway Housing Authority Board.
Recommended Action:
It is recommended the Poway Housing Authority Board receive and file this report.
Discussion:
Part 1.85, Division 24 of the California Health and Safety Code, particularly Sections 34176 and 34176.1 (f), require the Housing Successor provide an annual report of the Successor's activities during the prior fiscal year. The purpose of the report is to provide the governing body of the Housing Successor with an annual report on the housing assets and activities of the Housing Successor. The report is to be provided to the Poway Housing Authority Board, along with an independent financial audit of the Low-and Moderate-Income Housing Asset Fund (LMIHAF) within six months after the end of each fiscal year. Due to Poway's annual timing for completion of the Housing Authority audit, it is not possible for this report to be completed within the six-month period. However, there is no penalty for delayed submission of the report.
The Poway Housing Successor Annual Report for Fiscal Year 2024-25 indicates a balance in the LMIHAF of $5,738,465. LMIHAF monies may be utilized to acquire, rehabilitate, ensure long term affordability covenants for, or preserve lower income housing (affordable to households earning 80 percent of area median income [AMI] or less). Additionally, funds may be used for program administration and 1 of 37
September 15, 2026, Item #4
monitoring
as
well
as
for
homelessness
prevention
and
rapid
rehousing
services.
The
source
of
funding
for
the
LMIHAF
is
derived
from
the
previous
balance
of
Redevelopment
financing,
program
income
from
operations,
repayments
of
loans,
and
land
sales.
LMIHAF
funding
is
separate
from
the
housing
in-lieu
fee
collected
from
the
developer
of
each
market
rate
unit
to
support
the
development,
acquisition
and
rehabilitation
of
affordable
housing.
The
current
balance
of
the
Housing
In-Lieu
fund
is
$629,287.34.
During
Fiscal
Year
2025-26,
Rincon
Consulting
was
hired
to
complete
an
evaluation
of
Housing
Authority
owned
sites
. This
evaluation
assesses
and
categorizes
housing
authority
properties
based
on
their
suitability
for
development.
The
final
report
will
serve
as
a
strategic
roadmap
for
allocating
housing
funds
to
support
affordable
housing
production.
The
report
is
scheduled
to
be
completed
later
this
year
with
recommendations
to
be
presented
to the
City
Council
in
2027.
Environmental
Review:
The
proposed
action
is
not
a
project
under
the
California
Environmental
Quality
Act
(CEQA)
because
it
involves
the
review
of
annual
financial
reports
and
does
not
involve
any
project,
construction,
or
physical
change
to
the
environment.
Therefore,
no
further
environmental
review
is
required.
Fiscal
Impact:
There
is
no
fiscal
impact
associated
with
this
item
.
Public
Notification:
None. Attachments: A.
Poway
Housing
Successor
Annual
Report
for
Fiscal
Year
2024-25
B.
Poway
Housing
Authority
Basic
Financial
Statements
and
Independent
Auditors
Report
for
the
year
ended
June
30,
2025
Tracy
evens
Assistant
City
Manager
2 of
37 Reviewed
By
:
Alan
Fenstermacher
City
Attorney
Ap
~proved
By·
~
-~
~
Chris
elti
City
Manager
September 15, 2026, Item #4
POWAY HOUSING SUCCESSOR ANNUAL REPORT
REGARDING THE LOW-AND MODERATE-INCOME HOUSING ASSET FUND FOR FISCAL YEAR 2024-2025
PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f)
FOR THE POWAY HOUSING AUTHORITY
This Housing Successor Annual Report (Report) regarding the Low-and Moderate-Income Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1 (f) and is dated as of September 15, 2026. This Report sets forth certain details of the Poway Housing Authority, in its capacity as Housing Successor to the dissolved Poway Redevelopment Agency, activities during Fiscal Year 2024-25 (Fiscal Year). The purpose of this Report is to provide the governing body of the Housing Successor with an annual report on housing assets and activities of the Housing Successor under Part 1.85, Division 24 of the California Health and Safety Code, in particular sections 34176 and 34176.1 (Dissolution Law).
The following Report is based upon information prepared by Housing Successor staff and information contained within the Poway Housing Authority Basic Financial Statements and Independent Auditor's Report for Fiscal Year 2024-25 as prepared by Davis Farr, LLP, which the Audit is separate from this annual summary report; further, this report conforms with and is organized into sections I. through XII., inclusive, pursuant to the Dissolution Law:
I. Amount Deposited into LMIHAF: This section provides the total amount of funds deposited into the LMIHAF during the Fiscal Year. Any amount deposited for items listed on the Recognized Obligation Payment Schedule (ROPS) must be distinguished from the other amounts deposited.
II. Ending Balance of LMIHAF: This section provides a statement of the balance in the LMIHAF as of the close of the Fiscal Year. Any amount deposited for items listed on the ROPS must be distinguished from the other amounts deposited.
Ill. Description of Expenditures from LMIHAF: This section provides a categorized description of the expenditures made from the LMIHAF during the Fiscal Year.
IV. Statutory Value of Assets Owned by Housing Successor: This section provides the statutory value of real property owned by the Housing Successor, the value of loans and grants receivables, and the sum of these two amounts.
V. Description of Transfers: This section describes transfers pursuant to Health and Safety Code Section 34176.1 ( c)(2), if any, to another housing successor agency made in previous Fiscal Year(s), including whether the funds are unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used. The sole purpose of the transfers must be for the development of transit priority projects, permanent supportive housing, housing for agricultural employees or special needs housing.
3 of 37
POWAY HOUSING SUCCESSOR ANNUAL REPORT FISCAL YEAR 2024-2025
ATTACHMENT A
September 15, 2026, Item #4
VI. Project Descriptions: This section describes any project for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS and the status of that project.
VII. Status of Compliance with Section 33334.16: This section provides a status update on compliance with Section 33334.16 for interests in real property acquired by the former redevelopment agency prior to February 1, 2012. For interests in real property acquired on or after February 1, 2012, the Housing Successor must provide a status update on the project. The Poway Housing Successor has acquired two properties since February 1, 2012.
VIII. Description of Outstanding Obligations under Section 33413: This section describes the outstanding inclusionary and replacement housing obligations, if any, under Section 33413 that remained outstanding prior to dissolution of the former redevelopment agency as of February 1, 2012, along with the Housing Successor's progress in meeting those prior obligations, if any, of the former redevelopment agency and how the Housing Successor's plans to meet unmet obligations, if any.
IX. Income Test: This section provides the information required by Section 34176.1 (a)(3)(B), or a description of expenditures by income restriction for five-year period, with the time period beginning January 1, 2015, and whether the statutory thresholds have been met.
X. Senior Housing Test: This section provides the percentage of units of deed-restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its former redevelopment Agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted individually or jointly by the Housing Successor, its former Redevelopment Agency and its host jurisdiction within the same time period. For this Report, the ten-year period reviewed is January 1, 2015 to December 31, 2025.
XI. Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus, and the Housing Successor's plan for eliminating the excess surplus.
XII. Inventory of Homeownership Units: This section provides a summary of covenanted homeownership units assisted by the former redevelopment agency or the housing successor that are subject to covenants or restrictions or to an adopted program that protects the former redevelopment agency's investment of monies from the Low-and Moderate-Income Housing Fund pursuant to subdivision (f) of Section 33334.3. Inventory shall include the following: a) the number of those units; b) in the first report pursuant to this subdivision, the number of units lost to the portfolio after February 1, 2012, and the reason or reasons for those losses. For all subsequent reports, the number of the units lost to the portfolio in the last fiscal year and the reason for those losses; c) any funds returned to the housing successor as part of an adopted program that protects the former redevelopment agency's investment of moneys from the Low-and Moderate-Income Housing Fund; and d) whether the housing successor has contracted with any outside entity for the management of the units and, if so, the identity of the entity.
POWAY HOUSING SUCCESSOR ANNUAL REPORT FISCAL YEAR 2024 -2025 4 of 37
September 15, 2026, Item #4
I.
AMOUNT
DEPOSITED
INTO
LMIHAF
A
total
of
$719
,233
was
deposited
into
the
LMIHAF
during
the
Fiscal
Year.
II.
ENDING
BALANCE
OF
LMIHAF
At
the
close
of
the
Fiscal
Year,
the
ending
balance
in
the
LMIHAF
was
$5,738,465
none
of
which
is
being
held
for
items
listed
on
the
ROPS
. This
includes
$5,576
,245
in
cash
and
investments,
and
$227
,518
in
housing
loans
receivable,
less
$8,846
in
liabilities.
The
$227,518
is
due
from
the
Successor
Agency
and
represents
the
Housing
Authority's
20%
of
the
former
Redevelopment
Agency's
loan
balance
, and
repayment
is
subject
to
approval
by
the
California
Department
of
Finance
.
Ill.
DESCRIPTION
OF
EXPENDITURES
FROM
LMIHAF
The
following
is
a
description
of
expenditures
from
the
LMIHAF
by
category
: Fiscal
Year
2024-25
Monitoring
&
Administration
Expenditures
$34,613
Homeless
Prevention
&
Rapid
Rehousing
Expenditures
$0
Housing
Development
Expenditures
$66
,167
Total
LMIHAF
Expenditures
in
Fiscal
Year
$100,780
IV.
STATUTORY
VALUE
OF
ASSETS
OWNED
BY
HOUSING
SUCCESSOR
Under
the
Dissolution
Law
and
for
purposes
of
this
Report,
the
"statutory
value
of
real
property
"
means
the
value
of
properties
formerly
held
by
the
former
redevelopment
agency
as
listed
on
the
housing
asset
transfer
schedule
approved
by
the
Department
of
Finance
as
listed
in
such
schedule
under
Section
34176(a)(2)
, the
value
of
the
properties
transferred
to
the
Housing
Successor
pursuant
to
Section
34181
(f),
and
the
purchase
price
of
properties
purchased
by
the
Housing
Successor.
Further
, the
value
of
loans
and
grants
receivable
are
included
in
these
reported
assets
held
in
the
LMIHAF.
The
following
provides
the
statutory
value
of
assets
owned
by
the
Housing
Successor
:
Fiscal
Year
2024-25
Cash
and
Cash
Equivalents
$5,576,245
Accounts
Receivable
$232,585
Statutory
Value
of
Real
Property
Owned
by
Housing
Authority
$13,917,824
Value
of
Loans
and
Grants
Receivable
$227
,518
Total
Value
of
Housing
Successor
Assets
'
$6
,036
,348
V.
DESCRIPTION
OF
TRANSFERS
The
Housing
Successor
did
not
make
any
LMIHAF
transfers
to
other
Housing
Successor(s)
under
Section
34176
.1 (
c)(2)
during
the
Fiscal
Year.
POWAY
HOUSI
NG S
UCCESSOR
AN
NUAL
RE
POR
T
FISCAL
YEA
R
202
4 -2025
s
of
37 September 15, 2026, Item #4
VI.
PROJECT
DESCRIPTIONS
The
Housing
Successor
did
not
receive
and
did
not
hold
property
tax
revenue
pursuant
to
the
ROPS. VII.
STATUS
OF
COMPLIANCE
WITH
SECTION
33334.16
Section
34176.1
provides
that
Section
33334.16
does
not
apply
to
interests
in
real
property
acquired
by
the
Housing
Successor
on
or
after
February
1, 2012.
With
respect
to
interests
in
real
property
acquired
by
the
former
redevelopment
agency
prior
to
February
1,
2012
, and
transferred
to
the
Successor
Agency
pursuant
to
Health
and
Safety
Code
Section
34176,
the
time
periods
described
in
Section
33334.16
shall
be
deemed
to
have
commenced
on
the
date
that
the
Department
of
Finance
(DOF)
approved
the
property
as
a housing
asset
on
the
Housing
Asset
Transfer
Form;
thus
, as
to
real
property
acquired
by
the
former
redevelopment
agency
now
held
by
the
Housing
Successor,
the
Housing
Successor
must
initiate
activities
consistent
with
the
development
of
the
real
property
for
the
purpose
for
which
it
was
acquired
within
five
years
of
the
date
the
DOF
approved
such
property
as
a
housing
asset.
Poway
's
Housing
Assets
Transfer
Form
was
approved
by
the
DOF
on
August
31 , 2012
.
The
following
provides
a
status
update
on
the
real
property
housing
assets
that
were
acquired
by
the
former
redevelopment
agency
prior
to
February
1,
2012,
and
transferred
to
the
Housing
Successor
on
February
1,
2012,
and
compl
iance
with
the
five-year
period
to
commence
development
activities
.
APN
Street
Address
Date
of
Size
Status
Purchase
27546061
1267
4 Monte
Vista
Rd
02/22/2000
2.06 Acres
An
Affordable
Housing
Agreement
and
Ground
Lease
executed
11/19/2024
. The
Developer
and
Authority
are
evaluating
financing
and
next
steps.
32119028
0 Twin
Peaks
Rd
11/03/2004
2.15 Acres
Vacant
land.
31423026
13424
Scots
Way
08/27/2002
0.70 Acres
Vacant
land
. Due
to
access
issues
, development
options
are
still
actively
beino
evaluated.
31421418
14048
Sycamore
Ave
06/30/2005
0.32 Acres
Vacant
land.
Creek
runs
through
property
. Development
options
continue
to
be
evaluated
.
31710151
Floodway
adjacent
to
08/27/2004
2.15 Acres
Vacant
land
. Property
located
in
&
52 the
Solara
Affordable
floodway,
potential
development
Housino
Development
is
beinQ
evaluated.
The
following
provides
a
status
update
on
real
property
housing
assets
that
were
acquired
by
the
Housing
Successor
after
February
1,
2012
.
POWAY
HOUSING
SUCCESSOR
ANNUAL
REPORT
FISCAL
YEAR
2024
-2025
6 of37
September 15, 2026, Item #4
APN
Street
Address
PDateh
of
Size
Status
urc
ase
31723222
12207
&
12237
Old
&
36 Pomerado
Road
01/09/2018
1.07 Acres
Due
to
flood
plain
and
hab
itat
constraints,
the
development
potential
is
being
evaluated
.
VIII.
DESCRIPTION
OF
OUTSTANDING
OBLIGATIONS
PURSUANT
TO
SECTION
33413
Replacement
Housing
:
According
to
the
2010-2014
Implementation
Plan
for
the
former
redevelopment
agency
, no
Section
33413(a)
replacement
housing
obligations
were
transferred
to
the
Housing
Successor
. Furthermore
, the
Hous
ing
Successor
has
not
caused
the
demolition
of
any
units
and
no
new
replacement
housing
obligations
have
been
created
.
lnclusionary/Production
Housing.
According
to
the
2010-2014
Implementation
Plan
for
the
former
redevelopment
agency,
no
Section
33413(b)
inclusionary/production
housing
obligations
were
transferred
to
the
Housing
Successor.
The
former
redevelopment
agency's
Implementation
Plans
are
posted
on
the
City
's
website
at
http://poway
.org/207
/ Affordable-Housing
.
IX.
EXTREMELY
LOW-INCOME
TEST
Because
the
Housing
Successor
did
not
meet
the
30 percent
extremely
low-income
(ELI)
expenditure
requirement
in
the
prior
five-year
period
, FY
2024-25
is
subject
to
the
heightened
50 percent
ELI
expenditure
requirement
under
Health
and
Safety
Code
Section
34176.1
(a)(3)(B)
.
After
subtracting
administrative
and
monitoring
costs
, t
he
Housing
Successor
expended
$66
, 167
in
LMIHAF
funds
during
the
fiscal
year
. Of
this
amount,
$50,
183
was
expended
on
the
Monte
Vista
affordable
housing
development
, which
contains
18 extremely
low-income
units
out
of
60 total
units
. Applying
the
proportional
unit
method,
30 percent
of
this expenditure
($15,055)
is
attributable
to
extremely
low-income
rental
housing
. No
other
projects
funded
during
the
fiscal
year
contained
extremely
low-income
units;
therefore,
no
additional
expenditures
qualify
toward
the
ELI
requirement.
The
Housing
Successor's
extremely
low-income
expenditure
percentage
for
FY
2024-25
is
22. 75
percent.
This
is
below
both
the
required
50 percent
expenditure
threshold
and
the
30 percent
threshold
needed
to
exit
the
heightened
expenditure
requirement.
As
a
result
, the
Housing
Successor
remains
subject
to
the
50 percent
extremely
low-income
expenditure
requirement
for
FY
2025-26
Extremely
Low-Income
Expenditures
Test
July
1,
2024
through
June
30,
2025
LMIHAF
Spent
on
Extremely
Low-Income
Housing
$15,055
Amount
Spent
on
ELI
Units
= A
Total
LMIHAF
Spent
in
FY24-25
$66,167
Total
LMIHAF
Spent=
B
Extremely
Low-Income
Test
22 .75%
A/
B =
Percent
of
LMIHAF
Spent
on
ELI
Units
in
FY24-25
X.
SENIOR
HOUSING
TEST
The
Housing
Successor
is
required
to
calculate
the
percentage
of
units
of
deed-restricted
rental
POWAY
HOUSING
SUCCESSOR
ANNUAL
REPORT
FISCAL
YEAR
2024
-2025
7 of
37 September 15, 2026, Item #4
housing
restricted
to
seniors
and
assisted
by
the
Housing
Successor
, the
former
redevelopment
agency
and/or
the
City
within
the
previous
10 years
in
relation
to
the
aggregate
number
of
units
of
deed-restricted
rental
housing
assisted
by
the
Hous
ing
Successor
, the
former
redevelopment
agency,
and/or
City
within
the
same
time period
. If this
percentage
exceeds
50%
, then
the
Housing
Successor
cannot
expend
future
funds
in
the
LMIHAF
to
assist
additional
senior
housing
units
until
the
Housing
Successor
or
City
assists
and
construction
has
commenced
on
a
number
of
restricted
rental
units
that
is
equal
to
50%
of
the
total
amount
of
deed-restricted
rental
units.
The
following
provides
the
Housing Successor's
Senior
Housing
Test
for
the
10-year
period
of
January
1,
2015
through
December
31,
2025
:
Housing
Test
2015-2025
#
of
Assisted
Senior
Rental
Units
43 #
of
Total
Assisted
Rental
Units
166
Senior
Housing
Percentage
26%
XI.
EXCESS
SURPLUS
TEST
Excess
Surplus
is
defined
in
Section
34176
.1(d)
as
an
unencumbered
amount
in
the
LMIHAF
account
that
exceeds
the
greater
of
one
million
dollars
($1,000,000)
or
the
aggregate
amount
deposited
into
the
LMIHAF
account
during
the
Housing
Successor's
preceding
four
Fiscal
Years
,
whichever
is
greater.
The
LMIHAF
was
created
on
February
1,
2012
. The
current
uncommitted
balance
of
$5
,738,465
in
the
LMIHAF
exceeds
the
sum
of
the
annual
deposits
made
in
the
preceding
four
fiscal
years
of
$3,314
,803.
As
a
result,
the
LMIHAF
has
an
Excess
Surplus
of
$2,423
,662
. The
Excess
Surplus
Calculation
is
summarized
below
.
Excess
Surplus
Calculation
FY
2024-25
Current
Uncomm
itted
Balance
$5,738,465
Less:
Deposits
in
FY2021-22
through
FY
2024-25
($3,314,803)
Excess
Surplus
Amount
$2,423,662
The
following
table
provides
additional
detail
on
deposits,
expenditures
, commitments
, and
year
end
balances
for
each
of
the
preceding
four
fiscal
years
used
in
the
Excess
Surplus
test:
FY
2021/22
FY
2022/23
FY
2023/24
FY
2024/25
Total
FY21-25
Beginning
Ba
lance
$3,434,907
$5
,192
,658
$5
,078,830
$5
,181,530
Add:
Deposits
$1,841,651
$469,042
$284,877
$719,233
$3,314
,803
(Less)
Expenditures
($83
,900)
($582,870)
($182,
177)
($100,780)
Ending
Balance
$5,192,659
$5,078,830
$5
,181,530
$5
,799,984
(Less)
Commitments
$
(39,850)
$
(51,488)
$
(61
,373)
($61,519)
Closing
Balance
$5
,152
,808
$5
,027
,342
$5,120,157
$5
,738,465
Funds
for
an
evaluation
and
identification
of
affordable
housing
sites
survey
were
expended
during
POWAY
HOUSING
SUCCESSOR
ANNUAL
REPOR
T F
ISCAL
YEAR
2024
-2025
8 of
37 September 15, 2026, Item #4
FY25/26. The survey evaluated options and priorities for support of affordable housing. The final report will be presented to City Council in 2027 and is expected to serve as a strategic roadmap for allocating housing funds to support Affordable Housing production. For FY26/27, $552,175.33 was budgeted for an affordable housing project.
XII. HOMEOWNERSHIP UNITS
The Housing Successor is to provide an inventory of homeownership units assisted by the former redevelopment agency or the Housing Successor that are subject to covenants or restrictions or to an adopted program that protects the former redevelopment agency's investment of monies from the LMIHAF pursuant to Section 33334.3(f). Inventory is as follows:
Current Inventory Number of Units
Restricted Homeownership Units as of 12/31/2025 40
Add: Restricted Homeowner Units Added by Housing Successor (January 0 1, 2025 through December 31, 2025) (Less): Restricted Homeowner Units Lost to Portfolio (January 1, 2025 0 through December 31, 2025) No inventory was lost in 2025. A total of $0 was returned to the Housing Successor as a result of the restrictions adopted to protect the former redevelopment agency's investment in LMIHAF monies and the Housing Successor did not contract with an outside entity for the management of the ownership portfolio.
POWAY HOUSING SUCCESSOR ANNUAL REPORT FISCAL YEAR 2024-2025 9 of 37
September 15, 2026, Item #4
10 of
37 POWAY
HOUSING
AUTHORITY
(A
Component
Unit
of
the
City
of
Poway)
Financial
Statements
Vear
Ended
June
30,
2025
ATTACHMENT
B
September 15, 2026, Item #4
POWAY HOUSING AUTHORITY
Table of Contents
Year Ended June 30, 2025
Page
Independent Auditor's Report ......................................................................................................... 1 Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position ....................................................................................................... 4 Statement of Activities ............................................................................................................ 5 Fund Financial Statements
Balance Sheet .......................................................................................................................... 6 Reconciliation of the Balance Sheet of the Governmental Fund to the Statement of Net Position ............................................................................................ 7 Statement of Revenues, Expenditures and Changes in Fund Balance ................................... 8 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities ................ 9 Notes to the Basic Financial Statements ........................................................................................ 10 Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule ............................................................................................ 18 Note to Required Supplementary Information ....................................................................... 19 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 ................................................................ 21 11 of 37
September 15, 2026, Item #4
DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von l<mmon Avenue I Suite 1'100 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520
INDEPENDENT AUDITOR'S REPORT
Poway Housing Authority
City of Poway
Poway, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and the major fund of the Poway Housing Authority (the Authority), a component unit of the City of Poway, California, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Authority as of June 30, 2025, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of a Matter
As described more fully in Note 1, the basic financial statements present only the Authority and are not intended to present fairly the financial position and results of operations of the City of Poway, California in conformity with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.
Responsibilities of Management for the Financial Statements The Authority's management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority's ability to continue as a going concern for one year after the date that the financial statements are issued.
12 of 37
September 15, 2026, Item #4
Auditor's
Responsibilities
for
the
Audit
of
the
Financial
Statements
Our
objectives
are
to
obtain
reasonable
assurance
about
whether
the
financial
statements
as
a
whole
are
free
from
material
misstatement,
whether
due
to
fraud
or
error,
and
to
issue
an
auditor's
report
that
includes
our
opinion.
Reasonable
assurance
is
a
high
level
of
assurance
but
is
not
absolute
assurance
and
therefore
is
not
a
guarantee
that
an
audit
conducted
in
accordance
with
GAAS
will
always
detect
a
material
misstatement
when
it
exists.
The
risk
of
not
detecting
a
material
misstatement
resulting
from
fraud
is
higher
than
for
one
resulting
from
error,
as
fraud
may
involve
collusion,
forgery,
intentional
om1ss1ons,
misrepresentations,
or
the
override
of
internal
control.
Misstatements
are
considered
material
if
there
is
a
substantial
likelihood
that,
individually
or
in
the
aggregate,
they
would
influence
the
judgment
made
by
a
reasonable
user
based
on
the
financial
statements.
In
performing
an
audit
in
accordance
with
GAAS,
we:
•
Exercise
professional
judgment
and
maintain
professional
skepticism
throughout
the
audit.
•
Identify
and
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
fraud
or
error,
and
design
and
perform
audit
procedures
responsive
to
those
risks.
Such
procedures
include
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
•
Obtain
an
understanding
of
internal
control
relevant
to
the
audit
in
order
to
design
audit
procedures
that
are
appropriate
in
the
circumstances,
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Authority's
internal
control.
Accordingly,
no
such
opinion
is
expressed.
•
Evaluate
the
appropriateness
of
accounting
policies
used
and
the
reasonableness
of
significant
accounting
estimates
made
by
management,
as
well
as
evaluate
the
overall
presentation
of
the
financial
statements.
•
Conclude
whether,
in
our
judgment,
there
are
conditions
or
events,
considered
in
the
aggregate,
that
raise
substantial
doubt
about
the
Authority's
ability
to
continue
as
a
going
concern
for
a
reasonable
period
of
time.
We
are
required
to
communicate
with
those
charged
with
governance
regarding,
among
other
matters,
the
planned
scope
and
timing
of
the
audit,
significant
audit
findings,
and
certain
internal
control-related
matters
that
we
identified
during
the
audit.
Required
Supplementary
Information
Accounting
principles
generally
accepted
in
the
United
States
of
America
require
that
the
Budgetary
Comparison
Schedule
be
presented
to
supplement
the
basic
financial
statements.
Such
information
is
the
responsibility
of
management
and,
although
not
a
part
of
the
basic
financial
statements,
is
required
by
the
Governmental
Accounting
Standards
Board
who
considers
it
to
be
an
essential
part
of
financial
reporting
for
placing
the
basic
financial
statements
in
an
appropriate
operational,
economic,
or
historical
context.
We
have
applied
certain
limited
procedures
to
the
required
supplementary
information
in
accordance
with
auditing
standards
generally
accepted
in
the
United
States
of
America,
which
consisted
of
inquiries
of
management
about
the
methods
of
preparing
the
information
and
comparing
the
information
for
consistency
with
management's
responses
to
our
inquiries,
the
basic
financial
statements,
and
other
knowledge
we
obtained
during
our
audit
of
the
basic
financial
statements.
We
do
not
express
an
opinion
or
provide
any
assurance
on
the
information
because
the
limited
procedures
do
not
provide
us
with
sufficient
evidence
to
express
an
opinion
or
provide
any
assurance.
13 of
37 September 15, 2026, Item #4
Management
has
omitted
management's
discussion
and
analysis
that
accounting
principles
generally
accepted
in
the
United
States
of
America
require
to
be
presented
to
supplement
the
basic
financial
statements.
Such
missing
information,
although
not
a
part
of
the
basic
financial
statements,
is
required
by
the
Governmental
Accounting
Standards
Board
who
considers
it
to
be
an
essential
part
of
the
financial
reporting
for
placing
the
basic
financial
statements
in
an
appropriate
operational,
economic
or
historical
context.
Our
opinions
on
the
basic
financial
statements
are
not
affected
by
this
missing
information.
Other
Reporting
Required
by
Government
Auditing
Standards
In
accordance
with
Government
Auditing
Standards,
we
have
also
issued
our
report
dated
January
12,
2026
on
our
consideration
of
the
Authority's
internal
control
over
financial
reporting
and
on
our
tests
of
its
compliance
with
certain
provisions
of
laws,
regulations,
contracts,
and
grant
agreements
and
other
matters.
The
purpose
of
that
report
is
solely
to
describe
the
scope
of
our
testing
of
internal
control
over
financial
reporting
and
compliance
and
the
results
of
that
testing,
and
not
to
provide
an
opinion
on
the
effectiveness
of
internal
control
over
financial
reporting
or
on
compliance.
That
report
is
an
integral
part
of
an
audit
performed
in
accordance
with
Government
Auditing
Standards
in
considering
the
Authority's
internal
control
over
financial
reporting
and
compliance.
jfaw
7'--
~
Irvine,
California
January
12,
2026
14 of
37 September 15, 2026, Item #4
This page intentionally left blank
15 of 37
September 15, 2026, Item #4
BASIC FINANCIAL STATEMENTS
16 of 37
September 15, 2026, Item #4
17 of 37
ASSETS
Poway Housing Authority
Statement of Net Position
June 30, 2025
Cash and investments (Note 2)
Accounts receivable
Due from other governments
Capital assets, nondepreciable (Note 3)
Total assets
LIABILITIES
Accounts payable
Unearned revenue
Total liabilities
NET POSITION
Investment in capital assets
Restricted for:
Housing
Total net position
Governmental
Activities
$ 5,576,245
232,585
227,518
13,917,824
19,954,172
3,576
5,270
8,846
13,917,824
6,027,502
$ 19,945,326
See accompanying notes to the basic financial statements September 15, 2026, Item #4
Functions/Programs
Governmental activities:
General government
Development services
Total governmental activities
Poway Housing Authority
Statement of Activities
Year Ended June 30, 2025
Program Revenues
Expenses
$ 19,552
81,228
$ 100,780
Charges
for
Services
508,509
508,509
Operating
Contributions
and
Grants
General Revenues
Investment income
Total general revenues
Change in net position
Net position, beginning
Net position, ending
Capital
Contributions
and
Grants
See accompanying notes to the basic financial statements 18 of 37
Net (Expense)
Revenue
and
Changes in
Net Position
(19,552)
427,281
407,729
142,000
142,000
549,729
19,395,597
$ 19,945,326
September 15, 2026, Item #4
19 of
37 ASSETS Cash
and
investments
Accounts
receivable
Poway
Housing
Authority
Balance
Sheet
Governmental
Fund
June
30,
2025
Due
from
other
governments
Total
assets
LIABILITIES
AND
FUND
BALANCE
Liabilities:
Accounts
payable
Unearned
revenue
Total
liabilities
FUND
BALANCE
Restricted
for
housing
Total
fund
balances
Total
liabilities
and
fund
balance
$ $ $ $
See
accompanying
notes
to
the
basic
financial
statements
5,576,245 232,585 227,518
6,036,348
3,576 5,270 8,846
6,027,502 6,027,502 6,036,348
September 15, 2026, Item #4
Poway Housing Authority
Reconciliation of the Balance Sheet of the
Governmental Fund to the Statement of Net Position
June 30, 2025
Total Governmental Fund Balance
Amounts reported for governmental activities in the Statement of Net Position were different because:
Capital assets used in governmental activities were not current financial resources and, therefore, were not reported in the funds. $ 6,027,502
13,917,824
Net position of governmental activities $ 19,945,326
=========
See accompanying notes to the basic financial statements 20 of 37
September 15, 2026, Item #4
Poway Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Fund
Year Ended June 30, 2025
REVENUES
Investment income $
Reimbursement agreement fees
Total revenues
EXPENDITURES
Current:
General government
Development services
Total expenditures
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year $
See accompanying notes to the basic financial statements 21 of 37
142,000
508,509
650,509
19,552
81,228
100,780
549,729
5,477,773
6,027,502
September 15, 2026, Item #4
Poway
Housing
Authority
Reconciliation
of
the
Statement
of
Revenues,
Expenditures
and
Changes
in
Fund
Balance
of
the
Governmental
Fund
to
the
Statement
of
Activities
Vear
Ended
June
30,
2025
Net
change
in
fund
balance
-total
governmental
fund
Change
in
net
position
of
governmental
activities
See
accompanying
notes
to
the
basic
financial
statements
22 of
37 $
549,729
$
549,729
September 15, 2026, Item #4
POWAY HOUSING AUTHORITY
Notes to the Basic Financial Statements
Vear Ended June 30, 2025
Note 1-Reporting Entity and Summary of Significant Accounting Policies The accounting policies of the Poway Housing Authority (Authority) conform to accounting principles generally accepted in the United States of America as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting and financial reporting principles. The following is a summary of the Authority's significant accounting policies:
A. Description of Reporting Entity
On March 1, 2011, the City Council of the City of Poway declared a need for a housing authority in the City of Poway and adopted a resolution forming the Poway Housing Authority. The creation of the Housing Authority provides the City legal authority to continue monitoring ongoing rent and income compliance at affordable housing developments.
The former Poway Redevelopment Agency (Agency) and the Authority prepared a Cooperation Agreement to provide for implementation of certain low-and moderate-income housing projects and to make payments by the Agency to the Authority for the costs to the Authority for performing its obligations. The Agency was dissolved due to the passage of Assembly Bill Xl 26 which became effective on October 1, 2011. In accordance with Health and Safety code 3417S(b), on February 1, 2012, all housing assets, liabilities and fund balance of the Agency were transferred to the Authority as the Successor Agency to the Poway Redevelopment Agency.
The Authority meets the criteria set forth in U.S. GAAP for inclusion as a blended component unit within the City reporting entity based on the City's oversight responsibility in selection of the governing board.
In addition, all of the Authority's activities are conducted within the geographic boundaries of the City.
Blended component units, although legally separate entities, are, in substance, part of the City's operations; therefore, data from these units are combined with data of the primary government in the financial statement presentation of the City. Only the funds of the Authority are included herein; therefore, these financial statements do not purport to represent the financial position or results of operations of the City.
B. Basis of Accounting/Measurement Focus
The accounts of the Authority are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. 23 of 37
September 15, 2026, Item #4
POWAY HOUSING AUTHORITY
Notes to the Basic Financial Statements
Year Ended June 30, 2025
Note 1-Reporting Entity and Summary of Significant Accounting Policies (Continued) Government-Wide Financial Statements
The Authority's Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental activities for the Authority.
These basic financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the Authority's assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
Certain types of transactions are reported as program revenues for the Authority in three categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for the governmental fund. An accompanying schedule is presented to reconcile and explain the differences in fund balance as presented in these statements to the net position presented in the Government-Wide Financial Statements.
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balance presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the Authority, are property tax, and intergovernmental revenues. Expenditures are recorded in the accounting period in which the related fund liability is incurred. 24 of 37
September 15, 2026, Item #4
POWAY HOUSING AUTHORITY
Notes to the Basic Financial Statements
Year Ended June 30, 2025
Note 1-Reporting Entity and Summary of Significant Accounting Policies (Continued) The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of generally accepted accounting principles.
Fund Accounting
The Authority uses funds to maintain its financial records during the year. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts. The Authority only has one governmental fund.
Governmental Fund
Housing Authority Fund -The Housing Authority Fund is the Authority's operating fund. It accounts for all financial resources of the Authority.
C. Cash and Investments
The Authority's cash and investment balances are included in the City's investment pool. The City pools cash resources from all City funds in order to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms. Investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.
The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund ("LAIF") which has invested a portion of the pool funds in structured notes and asset backed securities. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. LAIF investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these investments are subject to market risk and changes in interest rates.
Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the Authority and are presented as "Cash and investments" in the accompanying basic financial statements. 25 of 37
September 15, 2026, Item #4
POWAY
HOUSING AUTHORITY
Notes
to
the
Basic
Financial
Statements
Year
Ended
June
30,
2025
Note
1-
Reporting
Entity
and
Summary
of
Significant
Accounting
Policies
(Continued)
D.
Capital
Assets
Capital
assets,
which
include
property,
plant,
equipment
and
infrastructure
assets
(e.g
., roads,
streets,
sidewalks,
medians
and
storm
drains)
are
reported
in
the
Government-Wide
Financial
Statements
.
Authority
policy
has
set
the
capitalization
threshold
for
reporting
capital
assets
at
$5,000
. Capital
assets
are
valued
at
historical
cost
or
estimated
historical
cost
if
actual
historical
cost
was
not
available.
Donated
assets
are
valued
at
their
estimated
acquisition
value
on
the
date
donated
.
Depreciation
is
recorded
on
a straight-line
basis
over
estimated
useful
lives
of
the
assets
as
follows:
Buildings Building
improvements
Furniture
and
equipment
Infrastructure
E.
Deferred
Outflows/Inflows
of
Resources
10-50
years
10-100
years
5-20
years
20-50
years
In
addition
to
assets,
the
balance
sheet
will
sometimes
report
a separate
section
for
deferred
outflows
of
resources.
This
separate
financial
statement
element,
deferred
outflows
of
resources,
represents
a
consumption
of
net
assets
that
applies
to
future
periods
and
so
will
not
be
recognized
as
an
outflow
of
resources
(expenditure)
until
then.
The
Authority
currently
has
no
items
that
qualify
for
reporting
in
this
category
.
In
addition
to
liabilities,
the
balance
sheet
will
sometimes
report
a
separate
section
for
deferred
inflows
of
resources.
This
separate
financial
element,
deferred
inflows
of
resources,
represents
an
acquisition
of
net
assets
that
applies
to
future
periods
and
so
will
not
be
recognized
as
an
inflow
of
resources
(revenue)
until
that
time.
The
Authority
currently
has
no
items
that
qualify
for
reporting
in
this
category.
F.
Unearned
Revenue
Unearned
revenues
arise
when
the
government
receives
resources
before
it
has
a
legal
claim
to
them,
as
when
grant
monies
are
received
prior
to
incurring
qualifying
expenditures
. In
subsequent
periods
when
both
revenue
recognition
criteria
are
met
or
when
the government
has
a
legal
claim
to
the
resources,
the
unearned
revenue
is
removed
from
the
balance
sheet
and
revenue
is
recognized.
26 of
37 September 15, 2026, Item #4
POWAY
HOUSING
AUTHORITY
Notes
to
the
Basic
Financial
Statements
Year
Ended
June
30,
2025
Note
1-
Reporting
Entity
and
Summary
of
Significant Accounting
Policies
(Continued)
G.
Net
Position
Net
position
is
comprised
of
the
various
net
earnings
from
operating
income,
non-operating
revenues
and
expenses.
Net
position
is
classified
in
the
following
categories:
Net
Investment
in
Capital
Assets
-
This
component
of
net
position
consists
of
capital
assets,
net
of
accumulated
depreciation,
reduced
by
the
outstanding
balances
of
debt
that
are
attributable
to
the
acquisition,
construction,
or
improvement
of
those
assets.
Restricted-
This
component
of
net
position
consists
of
restricted
assets
and
deferred
outflows
of
resources
reduced
by
liabilities
and
deferred
inflows
of
resources
related
to
those
assets
.
Unrestricted
-
This
component
of
net
position
is
the
amount
of
the
assets,
deferred
outflows
of
resources,
liabilities,
and
deferred
inflows
of
resources
that
are
not
included
in
the
determination
of
net
investment
in
capital
assets
or
the
restricted
component
of
net
position.
When
an
expense
is
incurred
for
purposes
for
which
both
restricted
and
unrestricted
net
position
are
available,
the
Authority's
policy
is
to
apply
restricted
net
position
first.
H.
Fund
Balances
In
the governmental
fund
financial
statements,
fund
balances
are
classified
in
the
following
categories:
Nonspendable
-
Nonspendable
fund
balances
are
items
that
cannot
be
spent
because
they
are
not
in
spendable
form,
such
as
prepaid
items
and
inventories,
items
that
are
legally
or
contractually
required
to
be
maintained
intact,
such
as
principal
of
an
endowment
or
revolving
loan
funds.
Restricted
-
Restricted
fund
balances
encompass
the
portion
of
net
fund
resources
subject
to
externally
enforceable
legal
restrictions.
This
includes
externally
imposed
restrictions
by
creditors,
such
as
through
debt
covenants,
grantors,
contributions,
laws
or
regulations
of
other
governments,
as
well
as
restrictions
imposed
by
law
through
constitutional
provisions
or
enabling
legislation
.
Committed
-
Committed
fund
balances
encompass
the
portion
of
net
fund
resources,
the
use
of
which
is
constrained
by
limitations
that
the
government
imposes
upon
itself
at
its
highest
level
of
decision
making,
normally
the
governing
body
through
council
resolutions,
etc.,
and
that
remain
binding
unless
removed
in
the same
manner.
The
Board
of
Commissioners
is
considered
the
highest
authority
for
the
Authority.
Assigned
-
Assigned
fund
balances
encompass
the
portion
of
net
fund
resources
reflecting
the
government's
intended
use
of
resources.
Assignment
of
resources
can
be
done
by
the
highest
level
of
decision
making
or
by
a
committee
or
official
designated
for
that
purpose.
The
Board
of
Commissioners
has
authorized
the
Executive
Director
for
that
purpose.
27 of
37 September 15, 2026, Item #4
POWAY
HOUSING AUTHORITY
Notes
to
the
Basic
Financial
Statements
Year
Ended
June
30,
2025
Note
1-
Reporting
Entity
and
Summary
of
Significant
Accounting
Policies
(Continued)
H.
Fund
Balances
{Continued)
Unassigned
-
This
category
is
for
any
remaining
balances
that
are
not
classified
as
nonspendable,
restricted,
committed
or
assigned
.
When
expenditures
are
incurred
for
purposes
for
which
both
restricted
and
unrestricted
fund
balances
are
available,
the
Authority's
policy
is
to
apply
restricted
fund
balances
first,
then
unrestricted
fund
balances
as
they
are
needed.
When
expenditures
are
incurred
for
purposes
where
only
unrestricted
fund
balances
are
available,
the
Authority
uses
the
unrestricted
resources
in
the
following
order:
committed,
assigned,
and
unassigned.
I.
Estimates
The
preparation
of
financial
statements
in
conformity
with
U.S
. GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
certain
reported
amounts
and
disclosures.
Accordingly,
actual
results
could
differ
from
those
estimates
.
Note
2 -
Cash
and
Investments
Equity
in
Cash
and
Investment
Pool
of
the
City
of
Poway
The
Authority
does
not
have
a
separate
bank
account;
however,
the
Authority's
cash
and
investments
are
maintained
in
an
investment
pool
managed
by
the
City.
The
Authority
is
a
voluntary
participant
in
that
pool.
This
pool
is
governed
by
and
under
the
regulatory
oversight
of
the
Investment
Policy
adopted
by
the
City
Council
of
the
City.
The
Authority
has
not
adopted
an
investment
policy
separate
from
that
of
the
City.
The
fair
value
of
the
Authority's
investment
in
this
pool
is
reported
in
the
accompanying
financial
statements
at
amounts
based
upon
the
Authority's
pro-rata
share
of
the
fair
value
calculated
by
the
City
for
the
entire
City
portfolio.
The
balance
available
for
withdrawal
is
based
on
the
accounting
records
maintained
by
the
City,
which
are
recorded
on
an
original
cost
basis.
At
June
30,
2025,
the
Authority
had
a
cash
balance
of
$5,576,245
.
28 of
37 September 15, 2026, Item #4
Note 3 -Capital Assets
POWAY HOUSING AUTHORITY
Notes to the Basic Financial Statements
YearEndedJune30,2025
The summary of changes in capital assets for the year ended June 30, 2025 is as follows:
Balance
June 30, 2024 Additions Deletions
Capital assets, not being
depreciated:
Land $ 13,917,824
Total capital assets, not being
depreciated 13,917,824
Governmental activities -capital
assets $ 13,917,824
Note 4 -Related Party Transactions
Balance
June 30, 2025
13,917,824
13,917,824
13,917,824
In an effort to ensure that the objectives of Poway's Redevelopment Plan and the Poway Redevelopment Agency's (Agency) 5-Year Implementation Plan are fulfilled, on March 11, 2011, the Agency transferred all housing-related assets to the Authority through a Cooperation Agreement between the Agency and the Authority. Under the terms of this agreement, the Authority agreed to respectively carry out the projects and activities of the Agency in accordance with the objectives and purposes included in the Redevelopment and Implementation Plans. Projects included in the Cooperation Agreement between the Agency and the Authority further the goals of the Redevelopment Plan. It was initially anticipated that these projects would be funded based on available tax increment to be received through 2037, but because of the dissolution of the Agency under AB Xl 26, tax increment revenue has been eliminated, and therefore, no funding for these projects from that source is available.
Future project funding will come from the management of the Authority's assets and may include interest revenue, lease revenue, residual receipt revenue and the sale of assets.
Note 5 -Rehabilitation Loan Program
Housing Rehabilitation Loan Program
There are two types of housing rehabilitation loan. Forgivable rehabilitation loans are forgiven at a rate of 10% per year given all loan covenants are met. Non-forgivable loans are due upon the sale, transfer or foreclosure of the property. Due to the contingent nature of the repayment schedule of these loans, there is an allowance recorded at 100% of the outstanding balance. The balance of the non-forgivable rehabilitation loans at June 30, 2025 is $7,870.
29 of 37
September 15, 2026, Item #4
POWAY HOUSING AUTHORITY
Notes to the Basic Financial Statements
Year Ended June 30, 2025
Note 5 -Rehabilitation Loan Program (Continued)
Affordable Housing Loans
These loans are made to aid in the purchase of affordable housing in the City of Poway. They are for a 45-year term with interest between two percent and three percent and if there is a sale, transfer or foreclosure before the end of the term the loan must be assumed by an income qualified buyer and the 45-year term starts over. Due to the contingent nature of the repayment schedule of these loans, there is an allowance recorded at 100% of the outstanding balance. The balance of these Affordable Housing loans at June 30, 2025 is $2,161,854.
Development Loans
The City, through the Housing Authority, has development loans primarily for affordable rental housing projects and for one group home for the developmentally disabled. The affordable rental housing loans have 55-year to 57-year terms with three percent simple interest. Loan payments are made from residual receipts and generally do not cover the annual accrued interest. Therefore, due to the contingent nature of the repayment schedule of these loans, there is an allowance recorded at 100% of the outstanding balance. The balance of the development loans, including accrued interest, at June 30, 2025 is $42,135,315.
30 of 37
September 15, 2026, Item #4
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31 of 37
September 15, 2026, Item #4
REQUIRED SUPPLEMENTARY INFORMATION
32 of 37
September 15, 2026, Item #4
REVENUES
Lease
revenue
Investment
income
Reimbursement
agreement
fees
Total
revenues
EXPENDITURES
Current:
General
government
Development
services
Total
expenditures
Excess
(deficiency)
of
revenues
over
(under)
expenditures
Net
change
in
fund
balance
Fund
balance,
beginning
of
year
Fund
balance,
end
of
year
33 of
37 $ $
POWAY
HOUSING
AUTHORITY
Budgetary
Comparison
Schedule
Year
Ended
June
30,
2025
Budget
Amounts
Original
Final
7 7
56,910
56,910
40,000
40,000
96,917
96,917
119,900
119,900
60,300
171,673
180,200
291,573
(83
,283)
(194,656)
(83,283)
(194,656)
See
note
to
required
supplementary
information
Actual
Variance
with
Amounts
Final
Budget
(7)
142,000
85,090
508,509
468,509
650,509
553,592
19,552
100,348
81,228
90,445
100,780
190,793
549,729
744,385
549,729
744,385
5,477,773
$
6,027,502
September 15, 2026, Item #4
POWAY
HOUSING
AUTHORITY
Note
to
Required
Supplementary
Information
Year
Ended
June
30,
2025
Note
1-
Budgetary
Information
The
Authority
adopts
an
annual
budget
prepared
on
the
modified
accrual
basis
for
its
major
fund.
The
Executive
Director
is
required
to
prepare
and
submit
to
the
Authority's
Board
of
Commissioners
the
annual
budget
of
the
Authority
and
administer
it
after
adoption
. Any
revisions
that
alter
the
total
appropriations
of
any
fund
must
be
approved
by
the
Board
of
Commissioners
.
Prior
year
appropriations
lapse
unless
they
are
encumbered
at year-end
or
re-appropriated
through
the
formal
budget
process.
For
the
major
fund,
total
expenditures
may
not
legally
exceed
total
appropriations. Budget
information
is
presented
for
the
major
fund
on
a
basis
consistent
with
generally
accepted
accounting
principles.
Budgeted
revenue
and
expenditure
amounts
represent
the
original
budget
modified
for
adjustments during
the
year.
34 of
37 September 15, 2026, Item #4
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35 of 37
September 15, 2026, Item #4
DavisFarr
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 ! Irvine, CA 926'12 Main: 949.474.2020 I Fax: 949.263.5520 CERTIFIED PUBLIC ACCOUNTANTS 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
Poway Housing Authority
City of Poway
Poway, California
INDEPENDENT AUDITOR'S REPORT
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, and the major fund of the Housing Authority of the City of Poway (Authority), a component unit of the City of Poway (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements, and have issued our report thereon dated January 12, 2026.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial reporting (internal control) as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
36 of 37
September 15, 2026, Item #4
Report
on
Compliance
and
Other
Matters
As
part
of
obtaining
reasonable
assurance
about
whether
the
Authority's
financial
statements
are
free
from
material
misstatement,
we
performed
tests
of
its
compliance
with
certain
provisions
of
laws,
regulations,
contracts,
and
grant
agreements,
noncompliance
with
which
could
have
a
direct
and
material
effect
on
the
financial
statements.
However,
providing
an
opinion
on
compliance
with
those
provisions
was
not
an
objective
of
our
audit,
and
accordingly,
we
do
not
express
such
an
opinion.
The
results
of
our
tests
disclosed
no
instances
of
noncompliance
or
other
matters
that
are
required
to
be
reported
under
Government
Auditing
Standards.
Purpose
of
this
Report
The
purpose
of
this
report
is
solely
to
describe
the
scope
of
our
testing
of
internal
control
and
compliance
and
the
results
of
that
testing,
and
not
to
provide
an
opinion
on
the
effectiveness
of
the
Authority's
internal
control
or
on
compliance.
This
report
is
an
integral
part
of
an
audit
performed
in
accordance
with
Government
Auditing
Standards
in
considering
the
entity's
internal
control
and
compliance.
Accordingly,
this
communication
is
not
suitable
for
any
other
purpose.
Irvine,
California
January
12,
2026
37 of
37