Agenda — Yreka City Council, May 16, 2023

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Corey Middleton, Mayor Paul
McCoy, Mayor Pro tempore
Colleen Baker, Councilmember
Drake Davis, Councilmember
Duane Kegg, Councilmember
Jason Ledbetter, City Manager
Rhetta Hogan, Asst. City Manager and Clerk
Emily Aldrich, Finance Director
Matthew Bray, Public Works Director
John Elsnab, Human Resources Director
Mark Gilman, Police Chief
Andrew Jared, City Attorney
Jerry Lemos, Fire Chief
Juliana Lucchesi, Planning Director

YREKA CITY COUNCIL MEETING AGENDA
May 16, 2023
Closed Session 5:30 PM
Regular Session: 6:30 PM
Yreka City Council Chamber, 701 Fourth Street, Yreka, CA Phone 530-841-2386, Facsimile 530-842-4836, email: [email protected] Regular Meetings of the Yreka City Council are held the 1st and 3rd Tuesday of every month.

The full agenda packet can be found on the City’s website: www.ci.yreka.ca.us/AgendaCenter Announcement of any action taken by the City Council in Closed Session required by the Ralph M. Brown Act. (Government Code § 54950 et. seq.)

1. 5:30PM CALL TO ORDER:

2. PUBLIC COMMENT ON CLOSED SESSION:

3. CLOSED SESSION:

The City Council will recess to Closed Session to discuss the following item(s). At the conclusion of the Closed Session, Open Session will reconvene and reportable action, if any, will be announced:
a. Real Property Negotiations (Gov. Code § 54956.8)

1. APN: 053-591-400-000, 053-591-380-000
Agency Negotiator: Jason Ledbetter, City Manager
Negotiating Party: E B Development Corporation
Under Negotiation: Price and Terms

2. APN: 053-473-240-000
Join this meeting via Zoom:

Link: https://us02web.zoom.us/j/6194957056
Meeting ID# 619-495-7056
Members of the public may also remotely listen to and participate in the meeting via teleconference. If you wish to listen or participate in this meeting through teleconference, simply dial into the conference number below, and enter the meeting ID#.

Conference call in Number: 669-900-6833 (Toll-Free 888 788 0099) “RAISE YOUR HAND” to provide public comment for your desired item. Speakers will be asked to identify themselves.
• Online: If you are online, click on “raise hand” on the bottom of your screen. • Mobile App: In the mobile app, you can raise your hand by tapping the "Raise Hand" option in the "More" tab. • Telephone: If you are calling in via telephone, to raise your hand, dial *9 (star-nine). Speakers will be called on by the last four digits of their phone number. To unmute yourself dial *6 (star-six). 1 of 519

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Agency Negotiator: Jason Ledbetter, City Manager
Negotiating Party: Nelson Steven L and Janice L Trustee Under Negotiation: Price and Terms

3. APN: 054-051-020-000 and 054-051-010-000
Agency Negotiator: Jason Ledbetter, City Manager
Negotiating Party: Blazier Larry/Carrie-Lin L
Under Negotiation: Price and Terms
b. Liability Claim (Gov. Code § 54956.95)
Claimant: Duncan, Derek
Agency claimed against: City of Yreka

4. 6:30PM CALL TO ORDER REGULAR SESSION AND PLEDGE OF ALLEGIANCE:

5. SPECIAL PRESENTATIONS AND/OR ANNOUNCEMENTS:

This time slot is for informational presentations, appointments, or awards to be presented by the City Council or to the City Council.
a. Oath of Office Swearing-in Ceremony for City Attorney, Mr. Andrew Jared by City Clerk, Hogan. b. Siskiyou Community Food Bank, by Laura Leach, Executive Director and Board or Directors Treasurer

6. PUBLIC COMMENTS:

Public participation is welcomed and invited at all City Council meetings. This time is set aside for residents to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the Regular Agenda, please address the Council when that item is open for public comment.

The City requests that persons addressing the City Council refrain from making personal, slanderous, profane, or disruptive remarks.

Councilmembers, when recognized by the Mayor, may ask questions of presenter but no action may be taken by the City Council during the public comment section of the meeting. Under the Brown Act, the City Council is prohibited from discussing or taking action on any item not listed on the posted agenda.

This time is set aside for residents to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the Regular Agenda, please address the Council when that item is open for public comment. • Please speak into the microphone from the podium. The podium electronically adjusts up and down to accommodate speaker.
• Please state your name for the record prior to providing your comments. • Please address the Council as a whole.
• If you have documents to present, please provide a minimum of seven (7) copies. • Please limit your remarks to five (5) minutes.

Public comments period is not intended to be a “Question and Answer” period or conversations with the Council or City staff.

7. PUBLIC COMMENT FOLLOW-UP:
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This is the time for City Council or the City Manager to respond to public comments and may direct staff to prepare a report or place an item on a future agenda.

8. CONSENT AGENDA:

All matters listed under the consent agenda are considered routine and non-controversial and will be enacted by one motion unless any member of the Council wishes to remove an item for discussion, a. Approval/ratification of payments issued from April 3, 2023, through May 5, 2023. b. Approval of Minutes of the Special Meeting held April 14, 2023. c. Approval of Minutes of the Regular Meeting held April 18, 2023. d. Continuation of Urgency Ordinance #864: Fireworks (needed until June 18, 2023, when Ordinance 874 becomes effective).
e. Waive Full Text Reading of All Ordinances on the Agenda. Ordinances shall be introduced and adopted by title only.

Recommended City Council Action: Motion to Adopt the Consent Agenda of the City Council of the City of Yreka as presented.

9. NEW BUSINESS
City Manager
a. Agenda Title: Yreka Elks Lodge special event known as “Yreka Holiday Parade” to be held November 25, 2023
The Yreka Elks have submitted a letter of interest in hosting the Yreka Holiday Parade. The Elks, as the event organizer, is requesting $7,500 cash payment, a waiver of the Stage Rental Fee ($250 per day), rental of portable restrooms and match of in-kind labor and equipment costs incurred by the Public Works Department for street closures, street sweeping, stage setup and break down, extra trash removal before, during and after the event, ($750 estimated value).

Recommended City Council Action: Motion to Adopt Resolution 2023-22 of the City Council of the City of Yreka Approving Street Closures and Other Requests (to appropriate a $7,500 cash match and provide $1,000 of city in-kind services) for the Yreka Elks Lodge special event known as “Yreka Holiday Parade”.

Public Works Director
b. Agenda Title: SB1: Road Repair and Accountability Act Projects List for Fiscal Year 2023-2024.

The City has been allocated an estimated $192,348 in Road Maintenance and Rehabilitation (RMRA) funds for fiscal year 2023-24. To accept these funds and fulfill the accountability and transparency provisions of SB1, a resolution listing the potential projects is required by the California Transportation Commission (CTC) before the list is submitted. City staff have created the 2023 Strategic Paving, Preventive and Planning (SPPP) Project to encompass the City’s priorities.

Recommended City Council Action: Motion to Adopt Resolution 2023-23 approving a list of projects for Fiscal Year 2023-24 funded by SB1: The Road Repair and Accountability Act.

Community Development Director
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c. Agenda Title: Authority to Negotiate a Memorandum of Understanding with Rural Communities Housing Development Corporation for a Homekey housing project and affordable housing developer.

Authorize the City Manager and City Attorney to negotiate a Memorandum of Understanding (MOU) with Rural Communities Housing Development Corporation (RCHD) in consideration for Round 3 of California Department of Housing and Community Development (CA HCD) Grant Project Application for Homekey as the housing project developer pursuant to the City’s Request for Qualifications.

Recommended City Council Action: Motion to Adopt Resolution 2023-24 Authorizing the City Manager to enter into a Memorandum of Understanding with Rural Communities Housing Development Corporation for California Department of Housing and Community Development Grant Project Application Homekey as the housing project developer. d. Agenda Title: Authority to Negotiate a Memorandum of Understanding with Danco for Affordable Housing Tax Credit project.

Authorize the City Manager and City Attorney to negotiate a Memorandum of Understanding (MOU) with Danco in consideration to develop affordable housing project(s) utilizing low-income housing tax credits or other structured financing opportunities pursuant to the City’s Request for Qualifications.

Recommended City Council Action: Motion to Adopt Resolution 2023-25 Authorizing the City Manager to enter into a Memorandum of Understanding with Danco as an affordable housing project developer.

10. CITY MANAGER/STAFF REPORTS:

City Manager and Staff may make brief announcements or reports at this time.

11. MAYOR/COUNCILMEMBERS REPORTS, STATEMENTS AND REQUESTS:

AB 1234* Conference and Meeting Report (verbal, if any) *(In accordance with AB 1234, Councilmembers shall make a brief report or file a written report on any meeting/event/conference attended at City expense.) Members of the Council may make brief announcements, reports, or request staff to report to Council on any matter at a subsequent meeting.

12. ADJOURNMENT:

In compliance with the requirements of the Brown Act, notice of this meeting has been posted in a publicly accessible place, 72 hours in advance of the meeting.

All documents produced by the City which are related to an open session agenda item and distributed to the City Council are made available for public inspection in the City Clerk’s Office during normal business hours.

Public Hearings: If, in the future, you wish to challenge in court any of the matters on an agenda for which a public hearing is to be conducted, you may be limited to raising only those issues which you (or someone else) raised orally at the public hearing or in written correspondence received by the City at or before the hearing. Any person seeking to challenge a City Council decision made as a result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken, and the discretion in the determination of facts is vested in the City Council, shall be required to commence that action 90 days following the date on which the decision becomes final as provided in Code of Civil Procedure Section 1094.6. Please refer to Code of Civil Procedure 1094.6 to determine how to calculate when a decision becomes “final.”
"CHALLENGING DECISIONS OF CITY ENTITIES The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City of Yreka is governed by Section 1094.6 of the Code of 4 of 519

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Civil Procedure, unless a shorter limitation period is specified by any other provision, including without limitation Government Code section 65009 applicable to many land use and zoning decisions, Government Code section 66499.37 applicable to the Subdivision Map Act, and Public Resources Code section 21167 applicable to the California Environmental Quality Act (CEQA). Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. Government Code section 65009 and 66499.37, and Public Resources Code section 21167, impose shorter limitations periods and requirements, including timely service in addition to filing. If a person wishes to challenge the above actions in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Yreka, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies." The City of Yreka does not discriminate on the basis of race, color, national origin, religion, age, gender, sexual orientation, disability, or any other legally protected classes in employment or provision of services. In compliance with the Americans with Disabilities Act, those requiring accommodations for this meeting should notify the City Clerk 48 hours prior to the meeting at (530) 841-2386 or by notifying the Clerk at [email protected].

AFFIDAVIT OF NOTIFICATION AND POSTING

STATE OF CALIFORNIA)

COUNTY OF SISKIYOU) SS

CITY OF YREKA )
I, Rhetta Hogan, City Clerk for the City of Yreka, hereby declare under penalty of perjury that a copy of the above Agenda of the Regular Meeting of the City Council of the City of Yreka, California, was delivered and/or notice by email not less than 72 hours, before the hour of 5:30 p.m. on May 16, 2023 to the members of the governing agency, and caused the agenda to be posted on the City’s website at www.ci.yreka.ca.us and posted at Yreka City Hall, 701 Fourth St., Yreka, California. /s/: Rhetta Hogan
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Corey Middleton, Mayor
Paul McCoy, Mayor Pro tempore
Colleen Baker, Councilmember
Drake Davis, Councilmember
Duane Kegg, Councilmember
Jason Ledbetter, City Manager
Rhetta Hogan, Asst. City Manager and Clerk
Emily Aldrich, Finance Director
Matthew Bray, Public Works Director
John Elsnab, Human Resources Director
Mark Gilman, Police Chief
Andrew Jared, City Attorney
Jerry Lemos, Fire Chief
Juliana Lucchesi, Planning Director

YREKA CITY COUNCIL SPECIAL MEETING MINUTES
Closed Session - Friday, April 14, 2023, 1:00PM
Yreka City Council Chamber, 701 Fourth Street, Yreka, CA 96097 Phone 530-841-2386, Facsimile 530-842-4836, email: [email protected] Regular Meetings of the Yreka City Council are held the 1st and 3rd Tuesday of every month.

The full agenda packet can be found on the City’s website: www.ci.yreka.ca.us/AgendaCenter

1. CALL TO ORDER SPECIAL SESSION AND PLEDGE OF ALLEGIANCE:

Mayor Middleton called the meeting to order at 1:05PM. Councilmembers Baker, Davis, Kegg, McCoy and Middleton were present.

2. PUBLIC COMMENT ON CLOSED SESSION:

There was no public comment.

3. CLOSED SESSION:

4. OPTIONAL RECESS IF DESIRED:

5. RETURN TO OPEN SESSION:

Announcement of any action taken by the City Council in Closed Session required by the Ralph M. Brown Act. (Government Code § 54950 et. seq.)
There was no reportable action.

6. CALL TO ORDER REGULAR OPEN SESSION:

Meeting returned to open session at 2:20PM

7. PUBLIC COMMENTS:

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The City requests that persons addressing the City Council refrain from making personal, slanderous, profane, or disruptive remarks.

Public comments period is not intended to be a “Question and Answer” period or conversations with the Council or City staff.

There was no public comment.

8. PUBLIC COMMENT FOLLOW-UP:

This is the time for City Council or the City Manager to respond to public comments and may direct staff to prepare a report or place an item on a future agenda.

9. NEW BUSINESS
City Manager
a. Agenda Title: Award Professional Services Agreement with Colantuono, Highsmith, Whatley, PC for City Attorney Legal Representation
Recommended City Council Action: Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with Colantuono, Highsmith, Whatley, PC for City Attorney Legal Representation.

Brief adjournment and meeting resumed at 2:45PM
Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with Colantuono, Highsmith, Whatley, PC for City Attorney Legal Representation.

MOTIONED: Councilmember McCoy
SECONDED: Councilmember Kegg
AYES: Councilmembers Baker, Davis, Kegg, McCoy, and Middleton NOES: -0-
ABSENT: -0-
b. Agenda Title: Award Professional Services Agreement with The Water Group, Water Law and Advocacy Legal Representation
Recommended City Council Action: Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with The Water Group, Water Law and Advocacy Legal Representation. 46 of 519

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Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with The Water Group, Water Law and Advocacy Legal Representation.

MOTIONED: Councilmember Kegg
SECONDED: Councilmember Baker
AYES: Councilmembers Baker, Davis, Kegg, McCoy, and Middleton NOES: -0-
ABSENT: -0-
c. Agenda Title: Award Professional Services Agreement with Silver & Wright, LLP to perform nuisance abatement, code enforcement, receivership, and City Prosecutor Legal services as assigned by City Staff.

Recommended City Council Action: Motion to Authorize the City Manager and staff to execute a Legal and Professional Services Agreement with Silver & Wright, LLP.

Motion to Authorize the City Manager and staff to execute a Legal and Professional Services Agreement with Silver & Wright, LLP.

MOTIONED: Councilmember Baker
SECONDED: Councilmember Kegg
AYES: Councilmembers Baker, Davis, Kegg, McCoy, and Middleton NOES: -0-
ABSENT: -0-

10. ADJOURNMENT:

The meeting was adjourned at 2:48PM

Corey Middleton, Mayor
Minutes approved by City Council,
Motion on May 16, 2023
______________________
Rhetta Hogan, City Clerk
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Corey Middleton, Mayor
Paul McCoy, Mayor Pro tempore
Colleen Baker, Councilmember
Drake Davis, Councilmember
Duane Kegg, Councilmember
Jason Ledbetter, City Manager
Rhetta Hogan, Asst. City Manager and Clerk
Emily Aldrich, Finance Director
Matthew Bray, Public Works Director
John Elsnab, Human Resources Director
Mark Gilman, Police Chief
Andrew Jared, City Attorney
Jerry Lemos, Fire Chief
Juliana Lucchesi, Planning Director

YREKA CITY COUNCIL MEETING MINUTES
April 18, 2023, 6:30 PM
Yreka City Council Chamber, 701 Fourth Street, Yreka, CA Phone 530-841-2386, Facsimile 530-842-4836, email: [email protected] Regular Meetings of the Yreka City Council are held the 1st and 3rd Tuesday of every month.

The full agenda packet can be found on the City’s website: www.ci.yreka.ca.us/AgendaCenter

1. 6:30PM CALL TO ORDER REGULAR SESSION AND PLEDGE OF ALLEGIANCE:

2. SPECIAL PRESENTATIONS AND/OR ANNOUNCEMENTS:

This time slot is for informational presentations, appointments, or awards to be presented by the City Council or to the City Council.

3. PUBLIC COMMENTS:

The City requests that persons addressing the City Council refrain from making personal, slanderous, profane, or disruptive remarks.

Public comments period is not intended to be a “Question and Answer” period or conversations with the Council or City staff.

Public comment was heard from resident from Mt. Shasta, Elizabeth Taylor, Steve Radford, Tad White

4. PUBLIC COMMENT FOLLOW-UP:
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This is the time for City Council or the City Manager to respond to public comments and may direct staff to prepare a report or place an item on a future agenda.

5. CONSENT AGENDA:

All matters listed under the consent agenda are considered routine and non-controversial and will be enacted by one motion unless any member of the Council wishes to remove an item for discussion, a. Approval/ratification of payments issued from March 27, 2023, through April 09, 2023. b. Approval of Minutes of the Regular Meeting held April 4, 2023. c. Acceptance of the City of Yreka’s Audited Financial Statements for Fiscal Year 2021-22. d. Cash Balances, Budget to Actual and Fiscal Performance Reports for March 2023. e. Adopt Resolution 2023-19 to include Uniform Allowance for Public Safety Classifications of Unrepresented Employees.
f. Continuation of Urgency Ordinance #864: Fireworks.
g. Waive Full Text Reading of All Ordinances on the Agenda. Ordinances shall be introduced and adopted by title only.

Recommended City Council Action: Motion to Adopt the Consent Agenda of the City Council of the City of Yreka as presented.

Motion to Adopt the Consent Agenda of the City Council of the City of Yreka as presented.

MOTIONED: Councilmember Kegg
SECONDED: Councilmember Baker
AYES: Councilmembers Baker, Davis, Kegg, McCoy, and Middleton NOES: -0-
ABSENT: -0-

6. OLD BUSINESS
City Manager
a. Agenda Title: Legal Services Agreement for Special Counsel Retainer Services for City Attorney Dohn Henion.

City Attorney Dohn Henion is retiring as the City’s Legal Counsel at the end of April 2023 after eleven years of distinguished service. The proposed contract facilitates the transition to new legal counsel after April 30, 2023.

Recommended City Council Action: Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with Dohn Henion for Special Counsel Retainer Services.

There was no public comment.

Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with Dohn Henion for Special Counsel Retainer Services.

MOTIONED: Councilmember Davis
SECONDED: Councilmember Kegg
AYES: Councilmembers Baker, Davis, Kegg, McCoy, and Middleton NOES: -0-
ABSENT: -0-
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7. PUBLIC HEARINGS:

Public Hearing Protocol:
i. Mayor will describe the purpose of the Public Hearing. ii. City Staff will provide the Staff Report.
iii. City Staff will respond to questions from the City Council. iv. Mayor will open the Public Hearing.
v. Public wanting to comment will come to the podium, provide the City Clerk with their name and address, and provide their comments.
vi. Mayor will close the Public Hearing.
vii. City Council will deliberate and act on the item.

City Manager/Fire Chief
a. Agenda Title: Second Reading of Ordinance 874 “Personal Fireworks Prohibited”.

At the February 21, 2023, City Council meeting, direction was given to the City Attorney to draft an ordinance banning the sale and use of fireworks within city limits. The City Attorney prepared Ordinance #874, An Ordinance of the City Council of the City of Yreka, California, Adding Chapter

9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited”. The ordinance was introduced on March 21, 2023, passed, and moved to a second reading and public hearing. The ordinance allows for use of fireworks at supervised public display permitted events (e.g. pyrotechnic shows and displays at the fairgrounds or casino).

Recommended City Council Action: Conduct a public hearing, consider and move to Adopt Ordinance 874 – An Ordinance of the City Council of the City of Yreka, California, Adding Chapter

9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited” and finding the Ordinance exempt from CEQA.

Public comment from Brian Favero, Richard Rolzinski, and Dawnmarie Autrey.

Motion to Adopt Ordinance 874 – An Ordinance of the City Council of the City of Yreka, California, Adding Chapter 9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited” and finding the Ordinance exempt from CEQA.

MOTIONED: Councilmember McCoy
SECONDED: Councilmember Kegg
AYES: Councilmembers Kegg, McCoy, and Middleton
NOES: Councilmember Baker, Davis
ABSENT: -0-
b. Agenda Title: Resolution 2023-20 Liability for Response Costs - Fireworks Within Ordinance 874, pursuant to Chapter 9.70.050 Liability for Response Cost, the City would recover the fully burdened cost of police, fire, code enforcement or other City personnel required to deal with the violation, the cost of seizure and disposal of the illegal fireworks, and attorney fees for any and all notices, meetings, or administrative or court proceedings to enforce this ordinance.

Recommended City Council Action: Motion to adopt Resolution 2023-20 Establishing Fees Relating to the Violation of Use of Personal Fireworks Pursuant to Ordinance 874, Liability for Response Costs Fireworks.

Public comment from Susan.
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Motion to adopt Resolution 2023-20 Establishing Fees Relating to the Violation of Use of Personal Fireworks Pursuant to Ordinance 874, Liability for Response Costs Fireworks.

MOTIONED: Councilmember Kegg
SECONDED: Councilmember McCoy
AYES: Councilmembers Kegg, McCoy, and Middleton
NOES: Councilmember Baker and Davis
ABSENT: -0-

8. NEW BUSINESS
City Manager
a. Agenda Title: Issuance of Public Safety Ballot Measure Civic Engagement, Polling and Initiative Language Request for Proposal.

The City of Yreka is seeking qualified consultants, political strategists, community organizing, or civic engagement firms for the polling and engagement strategy needed to support a ballot measure or property assessment that will generate revenue to maintain and improve public safety initiatives within the City of Yreka.

Recommended City Council Action: Motion to Adopt Resolution 2023-21 Authorizing the City Manager to issue a Request for Proposal/Qualifications for Public Safety Ballot Measure Civic Engagement, Polling and Initiative Language and Designating Proceeds from Small Cities Organized Risk Entities’ one-time dividend of $80,650 (from real property and general liability policies) to the project.

Motion to Adopt Resolution 2023-21 Authorizing the City Manager to issue a Request for Proposal/Qualifications for Public Safety Ballot Measure Civic Engagement, Polling and Initiative Language and Designating Proceeds from Small Cities Organized Risk Entities’ one-time dividend of $80,650 (from real property and general liability policies) to the project.

MOTIONED: Councilmember Baker
SECONDED: Councilmember Davis
AYES: Councilmembers Baker, Davis, Kegg, McCoy, and Middleton NOES: -0-
ABSENT: -0-

9. CITY MANAGER/STAFF REPORTS:

City Manager and Staff may make brief announcements or reports at this time.

City Manager Ledbetter announced the first meeting for the communications ad hoc meeting will be May 11, 2023, at 6PM. The CDBG Planning Grant for the Firehall is progressing should have a contract in front of City Council for consideration in May.

10. MAYOR/COUNCILMEMBERS REPORTS, STATEMENTS AND REQUESTS:

Councilmember Baker, Davis enjoyed the LOLA meeting in Weed.

Councilmember Baker attended LAFCO worked on the budget. 51 of 519

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Councilmember Kegg, the planned Continuum of Care meeting in April was cancelled, the next Continuum of Care meeting is scheduled for May.

Councilmember Kegg would like to reschedule his presentation on the point in time count from May 2 to May 16, 2023.

Councilmember McCoy would like to address the code of conduct follow-up at a future meeting.

11. ADJOURNMENT:

The meeting was adjourned at 8:39 PM.

Corey Middleton, Mayor
Minutes approved by City Council,
Motion on May 16, 2023
______________________
Rhetta Hogan, City Clerk
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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
To:

Prepared By:

Agenda Title:

Meeting date:

Yreka City Council
City Clerk
Discussion/Possible Action: Continuation of Urgency Ordinance 864.

May 16, 2023
Discussion:

The drought, prevailing climatic temperatures, and the allocation of Yreka Fire Resources to mutual aid to suppress wildfires was found to constitute an immediate threat to the public safety.

Ordinance 864 delays the sale of fireworks and the use of fireworks and public displays of pyrotechnics until the threat to public safety is abated.

Recommendation:

That the Council continue Urgency Ordinance 864.
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SUMMARY OF ADOPTED URGENCY ORDINANCE No. 864
Please take notice that the Yreka City Council adopted, at an emergency meeting held on July 29, 2021, a temporary urgency ordinance, number 864, entitled: “AN UNCODIFIED URGENCY

ORDINANCE OF THE CITY OF YREKA DECLARING A LOCAL EMERGENCY, AND AUTHORIZING THE

DELAY OF THE SALE AND USE OF FIREWORKS WHICH MAY CREATE A THREAT TO PUBLIC SAFETY

DEEMED TO BE ARISING FROM THE INCIDENCE OF THE LAVA FIRE AND SETTING FORTH THE FACTS CONSTITUTING SUCH URGENCY AND FINDING THE ORDINANCE EXEMPT FROM CEQA REVIEW” This urgency ordinance generally provides:

1. The factual background of the Lava Fire, the drought, the prevailing climatic temperatures and the fact that Yreka’s Fire Resources are engaged in mutual aid to suppress the Lava Fire as well as the allocation of law enforcement resources in traffic control and the fact that without Yreka’s normally available police and fire resources, the use of fireworks and pyrotechnics fire may not be able to be suppressed which was found to constitute the basis for the urgency nature of the ordinance and the City Council determined that there existed an immediate threat to the public health, safety and/or welfare and a need for immediate preservation of the public peace, health, or safety that warrants the adopted urgency measures.

2. The ordinance delays the sale of fireworks and the use of fireworks and public displays of pyrotechnics until the threat to public safety is abated and the urgency ordinance is terminated.

3. The city council determined that a local emergency now exists and shall continue to exist until its termination is ordained by the City Council. The need for continuance of the urgency measures will be regularly reviewed by City Council until it is terminated. The ordinance will be terminated at the earliest possible time.

4. The ordinance vests in the City Manager, Chief of Police and the Fire Chief with the discretion to take such acts as may be necessary to effectuate the intent of the ordinance.

5. The Council determined that the ordinance complies with a categorical exemption from CEQA review.

By roll call vote the following councilmembers voted in favor of the ordinance: Duane Kegg, Deborah Baird, Paul McCoy and Corey Middleton.

This summary is not intended to be a comprehensive statement of all of the provisions of the Ordinance, but constitutes only a fair summary of the Ordinance. The complete text of the Ordinance and the minutes of the emergency session is available for review online in Yreka’s City Council Agenda section or through a public records request as an in-person review of it is not available because City Hall is not currently open to the public.

Yreka City Clerk
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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
TO: Yreka City Council
PREPARED BY: Emily Aldrich, Finance Director,
AGENDA TITLE: Discussion/Possible Actions: Adopt Resolution 2023-22 of the City Council of the City of Yreka Approving Street Closures and Other Requests (to appropriate a $7,500 cash match and provide $1,000 of city in-kind services) for the Yreka Elks Lodge special event known as “Yreka Holiday Parade”
MEETING DATE: Tuesday, May 16, 2023
Discussion and Fiscal Impact:

The Yreka Elks have submitted a letter of interest in hosting the Yreka Holiday Parade to be held Saturday, November 25, 2023. The Elks, as the event organizer, is requesting $7,500 cash payment, a waiver of the Stage Rental Fee ($250.00 per day), and match of in-kind labor and equipment costs incurred by the Public Works Department for stage setup and tear down, street closures, street sweeping, extra trash removal, placement and retrieval of portable toilets and restroom maintenance before, during and after the event, ($750.00 estimated value). Many of these support services are outlined in the Elks’ MOU dated 4/26/2023.

This amount does not include costs that may be incurred by the Yreka Police Department for traffic control.

Recommendation and Requested Action:

A motion to Adopt Resolution 2023-22 of the City Council of the City of Yreka Approving Street Closures and Other Requests (to Appropriate a $7,500 cash match and provide $1,000 of city in-kind services) for the Yreka Elks Lodge special event known as “Yreka Holiday Parade”. 55 of 519
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RESOLUTION NO. 2023-22

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YREKA

APPROVING STREET CLOSURES AND OTHER REQUESTS FOR THE YREKA ELKS LODGE SPECIAL EVENT KNOWN AS “YREKA HOLIDAY PARADE” WHEREAS, the City, a municipal corporation is the owner of certain lands within City of Yreka which are operated by the City as public municipal facilities, and WHEREAS, the Yreka Elks Lodge No. 1980 (hereafter also referred to as “event sponsor”) desires to sponsor a special event on Saturday November 25, 2023, known as the Yreka Holiday Parade; and
WHEREAS, due to the proposed plan submitted for the events, the event sponsor has demonstrated that the following provisions of the Yreka Municipal Code [YMC] are not adversely implicated by this event:

Vehicle controls – YMC Chapter 10.73,
Sound Amplifying Devices-YMC Chapter 9.28,
Temporary Signs-YMC Section 13.16.020(d),
WHEREAS, in conjunction with these events, the event sponsor requests temporary closure of certain city streets, a cash contribution of $7,500 from the City, a $250 fee waiver for the use of the City-owned portable stage; and services of public works department for a $750 in-kind value.

WHEREAS, pursuant to Government Code Section 21101(e) the City Council has authority to designate by resolution a temporary closing of a through street where the closing is necessary for the safety and protection of persons who are to use that portion of the street during the temporary closing; and,
WHEREAS, the City Council finds that the closing of the requested streets is necessary for the safety and protection of persons who are to use that portion of the street during the temporary closing; and,
WHEREAS, the Yreka Elks Lodge No. 1980 has demonstrated to the City its eligibility under YMC 5.04.160, and that the event will not disrupt traffic within the City beyond practical solution; will not interfere with the access to fire stations and fire hydrants; the location of the special event will not require the diversion of so many public employees that allowing the event would unreasonably deny service to the remainder of the city; and,
WHEREAS, pursuant to Title 14 of the California Code of Regulations, Section 15061(b)(3) that this action is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a Project which has potential for causing a significant effect on the environment; and
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WHEREAS, the City Council has determined it would be in the best interest of the City to approve and authorize the action outlined in this Resolution.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YREKA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. The Council hereby finds and determines that the foregoing recitals are true and correct.

Section 2. The City Council directs as follows:
a) Temporary Street Closure: On November 25, 2023, City Streets are ordered closed to through traffic in accordance with the request attached as Exhibit “A” subject to the terms and conditions as set forth hereafter and as required by the Department of Public Works. The Department of Public Works shall prepare a Use and Encroachment Agreement to that effect to be executed by the event sponsor prior to any use.
b) Permission is hereby granted for the use of the community stage at no charge for the scheduled event known as the Yreka Holiday Parade. Use of the portable stage shall be coordinated with the Public Works Maintenance Manager. c) A permit is granted for the Exclusive Use of the Downtown Plaza located at the corner of Miner Street and N. Broadway Street for the Special Event. Event Sponsor will be required to install reservation signs in the Plaza for the event. d) The Yreka Elks Lodge No. 1980 is hereby issued a temporary use permit and business license for this event and is exempt from the business license tax. The exemption from the tax shall not apply to vendors at the event unless each vendor can separately demonstrate eligibility for exemption. The Yreka Elks Lodge No. 1980 may add vendors to their event and the City will work with the Event Sponsor to facilitate issuance of the daily business licenses for the event. Event Sponsor will be responsible and hold harmless the City for acts of the vendors. e) The Event Sponsor shall provide the City with proof of general liability insurance of not less than $1,000,000 and separate endorsement naming the City of Yreka as additionally insured specific to the event dates and location, at least 1 week prior to the event. Event Sponsor will be responsible and hold harmless the City for acts of volunteers and vendors.
f) The event sponsor shall comply with all other City of Yreka ordinances and shall comply with such further conditions and requirements as may be set by the Chief of Police, Director of Public Works and the Public Works Maintenance Manager. g) The event sponsor shall not place any paint on the street pavement, curb, gutter, and sidewalk. Any markings on the street pavement, curb, gutter, and sidewalk shall be of a temporary nature and shall be removed by the event sponsor within 7 days after the end of the event.
h) The event sponsor is responsible for personally contacting each business that may be potentially affected by this street closure prior to the event. 60 of 519
i) The event sponsor shall be charged for any services not expressly waived in this resolution that are required by the Public Works Department in connection with this event.
j) The Department of Public Works is directed to prepare the Use and Encroachment Agreement to be signed by the Event Sponsor setting forth the terms of use in accordance with this Resolution.

Section 3. It is further resolved, if any section, subsection, part, clause, sentence or phrase of this Resolution or application thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, the validity of the remaining portions of this Resolution, the application thereof, shall not be effected thereby but shall remain in full force and effect, it being the intention of the City Council to adopt each and every section, subsection, part, clause, sentence phrase regardless of whether any other section, subsection, part, clause, sentence or phrase or the application thereof is held to be invalid or unconstitutional.

Section 4. The City Manager, the Chief of Police, Director of Public Works, Public Works Maintenance Manager, and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to affect the purposes of this Resolution and the transactions herein authorized.

Section 5. The City Clerk of the City shall forward a copy of this Resolution to the event sponsor, Chief of Police, the Director of Public Works and the Public Works Maintenance Manager. This Resolution shall take effect immediately upon its passage.

Passed and adopted this 16th day of May 2023, by the following vote:

AYES:

NAYS:

ABSENT:

ABSTAIN:
________________________
Corey Middleton, Mayor
Attest:__________________
Rhetta Hogan,
City Clerk
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USE AND ENCROACHMENT AGREEMENT
This Encroachment Agreement is made and entered into on this ______ day of ______, 2023 by and between the Yreka Elks Lodge, B.P.O.E. #1980 (“Permittee") and the City of Yreka, a municipal corporation, hereinafter referred to as "City".

RECITALS:

Whereas, the City Council of the City of Yreka adopted Resolution No. 2023-22 (“Resolution”) in connection with an event to be hosted by Permittee as described in that Resolution, which is attached hereto as Exhibit “A” and made a part hereof by this reference; and,
Whereas, the Resolution authorizes the City Manager to fix such additional conditions as necessary to implement the Resolution; and,
Whereas, the parties desire to establish the conditions for use and maintenance of the City’s property in connection with the event.

NOW THEREFORE, in consideration of the undertakings set forth hereafter, a Temporary Encroachment Permit (the “Permit”) is hereby granted to Permittee, to allow Permittee to enter onto City property and use the area shown in the attached map, marked Exhibit “B” and incorporated hereat by this reference, consistent with the provisions of the Resolution and subject to the following additional covenants and conditions:

1. Said encroachment shall include the areas designated in the attached map of the City streets and property (Exhibit B), also described as “Traffic Control Plan.” Permittee understands that the public may enter the event area; the temporary closing of the streets only prohibits vehicle traffic.

2. Said encroachment shall occur on November 25, 2023, or as the parties may agree occur otherwise. Said encroachment is permitted on the conditions set forth in the Resolution and by signing this Agreement, Permittee agrees to abide by all of the terms and conditions of the Resolution and this Agreement.

3. The Permittee shall repair or replace any damage caused to City property by the activities conducted pursuant to this Permit, at Permittee’s sole expense, within 10 days of notification from the City. This Permit notwithstanding, no encroachment may occur without the prior written consent of the city.

4. The Permittee shall provide adequate provisions for the protection for the public and ensure minimum interference with pedestrian and traffic at all times during the existence of the encroachment. Warning signs, lights and safety devices and/or other measures required for the public safety shall conform to the requirements of the City.

5. The City reserves the right to require that the Permittee provide an engineered traffic plan for street and sidewalk closures to ensure that the closure notifications and barricade 62 of 519

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placement are completed in accordance with the California Manual of Uniform Traffic Control Devices (MUTCD).

6. Neither the City, nor any of its officials, officers, agents, or employees shall be responsible or liable for injury to persons (including the death of person or persons) or damage to any property by reason of the activities conducted pursuant to this Permit. Said liability and responsibility shall be borne solely by the Permittee. Permittee, by accepting this Permit, agrees to protect, defend, indemnify, and hold the City, its officials, officers, agents and employees, free and harmless from claims for injuries or damages of any kind whatsoever.

Permittee is self-insured and will be primarily liable for Permittee and its employees, agents, contractors, and sub-contractors, and no other insurance effected by City or other insureds will be called on to cover a loss incurred pursuant to the activities of this Permit.

Permittee shall hold City, its officials, officers, agents and employees free and harmless from any claims for injuries or damages in connection with any claim for Workers’ Compensation associated with the activities covered by this Permit.

7. Upon execution of this Agreement Permittee shall provide liability insurance naming the City of Yreka as additionally insured specific to the event dates and location, covering the period of the event, satisfactory to the City and as set forth in Exhibit “C1”. Event sponsor will be responsible and hold harmless the City for acts of the vendors.

8. During the term of the Permit, the Permittee shall comply, and cause attendees of the event to comply, with all other City of Yreka ordinances, with all applicable federal, state, and local laws, statutes, rules, regulations, resolutions, and policies, both now existing and as amended in the future, including but not limited to the Americans with Disabilities Act.

Permittee shall notify event participants of all the conditions set forth herein to assure the proper use and maintenance.

9. This Permit does not constitute a deed or grant of any easement by the City and is transferable or assignable only with the prior written permission of the City. This Permit is revocable at any time with or without notice by the City at its sole discretion. This Permit is immediately revocable upon a violation of the terms of this Use Agreement or the cessation or termination of the Permittee’s operation at the location for which this Permit is issued.

10. This Permit is binding upon the Permittee’s successors and assigns.

11. Permittee, by accepting this Permit, guarantees the prompt removal of any and all structures and/or modifications herein permitted and/or located within the public property subject to this Permit upon notification from the City and at Permittee’s cost.

12. Permittee understands and agrees, by accepting this Permit, that the City has the right to remove the encroachment at its own expense without compensation to the Permittee if necessary for any City purposes.

13. This Permit shall not become effective until receipt by the City of a copy of this Permit with properly signed endorsements accepting the same, subject to terms and conditions contained herein.
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14. This Permit is issued with the understanding that any particular action is not to be considered as establishing any precedent: (1) on the question of permitting any certain kind of encroachment to be erected upon City property; or (2) as to the acceptability of any such permits

15. as to any other or future situation.

IN WITNESS WHEREOF, this Agreement is executed on the date first above written.

City of Yreka PERMITTEE: Event Sponsor

By: ____________________________ By: ___________________________ Jason Ledbetter, Brian Favero, Trustee Chair, as
City Manager Event Organizer for Yreka Elks

Attest:
_____________________________
Rhetta Hogan, City Clerk
Exhibit A – Authorizing Resolution No. 2023-22 and Request Letter Exhibit B – Traffic Control Plan
Exhibit C1 – Insurance Requirements of City
Exhibit C2 – Certificate of Insurance Coverage and Additional Insured Endorsement 64 of 519
Exhibit A:

Authorizing Resolution and Request
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Exhibit B:

Traffic Control Plan
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Exhibit C1:

CITY OF YREKA Insurance Requirements
For Event Sponsors (Use/Rental of City Facilities)
Sponsorshall procure and maintain for the duration of the rental period insurance against claims for injuriesto persons or damagesto property which may arise from or in connection with the rental of the facilities and the activities of the sponsor, his guests, agents, representatives, employees, or subcontractors.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as Insurance Services Form CG 00 01 covering CGL on an “occurrence” basis, including property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

If the Sponsor maintains broader coverage and/or higher limits than the minimums shown above, the Entity requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Sponsor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Entity.

Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:

Additional Insured Status
The Entity, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of the rental of the facility, work or operations performed by or on behalf of the Sponsor including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Sponsor’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).

Primary Coverage
For any claims related to this contract, the Sponsor’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the Sponsor’s insurance and shall not contribute with it.

Notice of Cancellation
Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the Entity.

Waiver of Subrogation
Sponsor hereby grants to Entity a waiver of any right to subrogation which any insurer of said Sponsor may acquire against the Entity by virtue of the payment of any loss under such insurance.

Sponsor agrees to obtain any endorsement that may be necessary to affect this waiver of 67 of 519
subrogation, but this provision applies regardless of whether or not the Entity has received a waiver of subrogation endorsement from the insurer.

Acceptability of Insurers
Insurance isto be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the Entity.

Verification of Coverage
Sponsor shall furnish the Entity with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to Entity before work begins. All certificates and endorsements are to be received and approved by the Entity at least five days before Sponsor commences activities.

Liquor Liability
If Sponsor will be supplying alcoholic beverages, the general liability insurance shall include host liquor liability coverage. If Sponsor is using a caterer or other vendor to supply alcohol that vendor must have liquor liability coverage. If Sponsor intends to sell alcohol either the Sponsor or vendor providing the alcohol for sale must have a valid liquor sales license and liquor liability insurance covering the sale of alcohol.

HomeownersInsurance
In some cases, the Sponsor’s homeowner’s liability insurance may provide coverage sufficient to meet these requirements. Sponsor should provide these requirements to his or her agent to confirm and provide verification to the Entity.

Special Events Coverage
Special events coverage is available for an additional fee to provide the liability insurance required by this agreement. Sponsor can obtain additional information and cost from Entity.

Special Risks or Circumstances
Entity reserves the right to modify these requirements based on the nature of the risk, prior events, insurance coverage, or other special circumstances.

Insurance Requirements in Contracts Alliant, 2022 Version 68 of 519
EXHIBIT C2:

Certificate of Insurance Coverage and Additional Insured Endorsement 69 of 519

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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
To: Yreka City Council
From: Matthew K. Bray, Director of Public Works
Prepared by: Cynthia Lynch, Municipal Projects Manager
Agenda title: Discussion/Possible Action: Adopt a Resolution Approving a List of Projects for Fiscal Year 2023-24 Funded by SB1: The Road Repair and Accountability Act
Meeting date: May 16, 2023
Recommendation and Requested Action:

Motion to adopt a resolution approving a list of projects for Fiscal Year 2023-24 funded by SB1:

The Road Repair and Accountability Act.

Discussion:

Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 in order to address the significant multi-modal transportation funding shortfalls statewide. The 2020 California Statewide Local Streets and Roads Needs Assessment found that the local streets and roads in Siskiyou County are, on average, in an “at-risk” condition.

The City has been allocated an estimated $ 192,348 in Road Maintenance and Rehabilitation (RMRA) funds for fiscal year 2023-24. In order to accept these funds and fulfill accountability and transparency provisions of SB1, a resolution listing the potential projects is required by the CTC before the list is submitted. City staff have created the 2023 Strategic Paving, Preventive and Planning (SPPP) Project to encompass the City’s priorities.

Fiscal Impact:

The attached Resolution allows the City to receive RMRA funds for Fiscal Year 2023-24 in the approximate amount of $ 192,348 for the purpose of maintaining and rehabilitating local streets and roads.
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Resolution No. 2023-23 SB1/RMRA Funding Page 1 of 3
RESOLUTION NO. 2023-23

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YREKA
ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2023-24 FUNDED BY SB 1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017 WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Yreka are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and WHEREAS, the City must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and WHEREAS, the City will receive an estimated $ 192,348 in RMRA funding in Fiscal Year 2023-24 from SB 1; and
WHEREAS, this is the seventh year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and WHEREAS, the City has made public outreach and education a priority to ensure public input into our community’s street project priorities by holding public presentations regarding the City’s streets at City Council and Planning Commission meetings, posting those presentations on the City’s website and social media pages, and posting City street maps demonstrating improvements in PMI; and
WHEREAS, the City used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the community’s priorities for transportation investment; and WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate numerous streets/roads throughout the City this year and many similar projects into the future; and
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Resolution No. 2023-23 SB1/RMRA Funding Page 2 of 3
WHEREAS, the 2020 California Statewide Local Streets and Roads Needs Assessment found that the City’s streets and roads are in an “at-risk” condition and this revenue will help us increase the overall quality of our road system and over the next decade will bring our streets and roads into “good” condition; and
WHEREAS, citizens of the City of Yreka depend upon a safe, reliable local street and road system; and
WHEREAS, the local street and road system is also critical for farm to market needs, interconnectivity, multimodal needs, and commerce; and
WHEREAS, police, fire, and emergency medical services all need safe, reliable roads to react quickly to emergency calls and a few minutes of delay can be a matter of life and death; and
WHEREAS, maintaining and preserving the local street and road system in good condition will reduce drive times and traffic congestion, improve bicycle safety, and make the pedestrian experience safer and more appealing, which leads to reduce vehicle emissions helping the State achieve its air quality and greenhouse gas emissions reductions goals; and WHEREAS, restoring roads before they fail reduces construction time and costs; and

WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.

NOW, THEREFORE IT IS HEREBY RESOLVED, ORDERED AND FOUND by the City Council of the City of Yreka, State of California, as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. The following list of proposed projects will be funded in-part or solely with fiscal year 2023-24 Road Maintenance and Rehabilitation Account revenues:

Project Title: 2023 Strategic Paving, Preventive and Planning Project Project Description: Involves chipsealing of multiple streets in the City of Yreka to maintain good condition;
Project Location: City of Yreka, streets listed in Exhibit “A” to this Resolution; Estimated Project Schedule: Start July 2023, complete June 2024; 72 of 519
Resolution No. 2023-23 SB1/RMRA Funding Page 3 of 3
Estimated Project Useful Life: 15 years.

Section 3. The City Manager, the City Clerk and all other proper officers and officials of the City are authorized and directed to execute agreements, other documents and certificates, negotiate changes, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized.

Section 4. It is further resolved, if any section, subsection, part, clause, sentence or phrase of this Resolution or the application thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, the validity of the remaining portions of this Resolution, the application thereof, shall not be affected thereby but shall remain in full force and effect, it being the intention of the City Council to adopt each and every section, subsection, part, clause, sentence phrase regardless of whether any other section, subsection, part, clause, sentence or phrase or the application thereof is held to be invalid or unconstitutional.

Section 5. This resolution shall take effect immediately upon its passage.

PASSED AND ADOPTED by the City Council of the City of Yreka this 16th day of May, 2023, by the following vote:

AYES:

NAYS:

ABSENT:

ABSTAIN:
_______________________________
Corey Middleton
Mayor of the City of Yreka
Attest: ________________________________
Rhetta Hogan, City Clerk
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RESOLUTION NO. 2023 ‐ 23 EXHIBIT A
City of Yreka
SB1 LSR‐RMRA 23/24 FY
2023 Strategic Paving, Preventive and Planning
Project
2023 SPPP Project ‐ Prospective Streets for Improvement List:
*The following list is tentative; specific locations to be improved with SB1 LSR‐RMRA funding have yet to be finalized. All locations will be determined taking time, street conditions and available funding into account.

UPDATE FOR FY 2023‐24:

East Lennox Neighborhood
• Kleaver Dr
• Herzog Blvd
• Warrens Ave
• Allen St
• E Lennox St
Humbug Neighborhood
• Wetzel Way
• Georgia Way
• Humbug Rd
• Grizzly Ct
• Henig Way
Oberlin Rd from Caltrans Right of Way to City Limits
(Dependent on Caltrans HWY 3 Project progress)
Skim Overlay on Shasta Ave from South Street to French Street

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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
Prepared by: Jason Ledbetter, City Manager
Juliana Lucchesi, AICP, Community Development Director
Agenda Title: 9c. Authority to Negotiate a Memorandum of Understanding with Rural Communities Housing Development Corporation
for a “Homekey” and other affordable housing projects.

Meeting date: May 16, 2023
Recommended Action:

Motion to Adopt Resolution 2023-24 Authorizing the City Manager to negotiate and enter into a Memorandum of Understanding with Rural Communities Housing Development Corporation for California Department of Housing and Community Development Grant Project Application “Homekey” and affordable housing as the housing project developer.

Summary:

The City of Yreka City Council gave directions to the City Manager to move forward with a work scope developed by Housing Tools to facilitate a Homekey Round 3 grant application at the October 18, 2022 City Council meeting. The City of Yreka released a Request for Qualifications (RFQ) for Affordable Housing Developers with experience in Homekey Developments February 2022 through April 5, 2023. The RFQ process produced three proposals from qualified firms. Out of the three, Housing Tools and City Staff recommend moving forward with Rural Communities Housing Development Corporation (RCHDC) as a partner in developing and implementing a round 3 HomeKey grant project and affordable housing projects.

Project Description:

City Staff prepared a RFQ to solicit statements of qualifications from qualified affordable housing developers that have experience applying, developing, and implementing a HomeKey project and affordable housing projects (Attachment 2). We received three statements of qualifications from housing developers. Two of the submissions had extensive experience with affordable housing projects and Homekey in the previous two rounds of funding. These developers, RCHDC and Danco, were interviewed by City and Housing Tools staff to determine which developer would be able to 1) understand the building environment of Yreka, 2) 75 of 519
quickly on-board with Housing Tools to submit a Homekey application in cycle 3, and 3) implement and manage the Homekey project long-term in a way that would not negatively impact the community.

After the interview process, City and Housing Tools staff agreed that RCHDC would be able to quickly develop and implement a HomeKey application in the City. RCHDC has experience with the City Planning and Building Departments due to the management of the Siskiyou Crossroads project. The developer also has significant affordable housing development and management experience.

Environmental Review:

The action to authorize the City Manager to negotiate and enter into agreement is not considered a project under the California Environmental Quality Act (CEQA). The action would not result in any foreseeable direct or indirect impacts to the environment pursuant to Section 150601(b)(3) of the CEQA Guidelines.

Fiscal Impact:

The City Council approved a budget not to exceed $20,000 at the October 18, 2022 meeting for the preparation of a HomeKey Round 3 application. There are no other fiscal impacts anticipated with this project.

Staff Recommendation:

City Staff recommend authorizing the City Manager to enter into a Memorandum of Understanding with RCHDC based on the developer scoring the highest in the review process.

Attachments:

1. CCR-2023-24 “Resolution of the City Council of the City of Yreka Authorizing City Manager to Negotiate and Enter into a Memorandum of Understanding with Rural Communities Housing Development Corporation for California Department of Housing and Community Development Grant Project Application “Homekey” as the Housing Developer and as a Housing Developer Partner for Future Affordable Housing Projects”

2. Request for Qualifications

3. RCHDC Proposal

4. Draft Memorandum of Understanding
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RESOLUTION NO. 2023-24

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YREKA

AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND ENTER INTO A

MEMORANDUM OF UNDERSTANDING WITH RURAL COMMUNITIES

HOUSING DEVELOPMENT CORPORATION FOR CALIFORNIA DEPARTMENT

OF HOUSING AND COMMUNITY DEVELOPMENT GRANT PROJECT
APPLICATION “HOMEKEY” AND AFFORDABLE HOUSING

AS THE HOUSING PROJECT DEVELOPER
WHEREAS, the City of Yreka is desirous of stimulating affordable housing within the City of Yreka; and
WHEREAS, over 58% of the City’s residents are classified as moderate (20%) low (18%), very low (7%) and extremely low (13%) income households will benefit from affordable housing options, and
WHEREAS, the City of Yreka desires to enter into an agreement with the Rural Communities Housing Development Corporation (RCHDC) to provide services as a California Department of Housing and Community Development Grant Project Application Homekey and Affordable Housing as Project Developer for the City of Yreka; and
WHEREAS, RCHDC is a nonprofit whose mission is to provide decent, affordable housing to low- and moderate-income persons. RCHDC, based in Ukiah, CA offers development, construction, and property management services throughout the State of California, and has an extensive project resume in northern and southern California; and WHEREAS, the City and RCHDC recognizes that community engagement is a huge part of what makes these housing projects work, and where each project considered will be approved by the City Council; and
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WHEREAS, Housing Tools the City’s housing consulting service provider and City staff have evaluated proposals from the City’s Request for Qualifications based on criteria that evaluated RCHDC’s organizational experience and qualifications, staff experience and qualifications, portfolio of properties, proposed work plan financial health, and found RCHDC to be highly qualified to perform developer services and, WHEREAS, the members of the City Council find it to be in the best interests of the City to authorize the City Attorney and City Manager to negotiate with RCHDC to execute a memorandum of understanding document.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YREKA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. The Council hereby finds and determines that the foregoing recitals are true and correct, and the City Council finds it to be in the best interests of the City to authorize the City Attorney and City Manager to negotiate with RCHCD to execute a memorandum of understanding documents is hereby approved.

Section 2. The City Council of the City of Yreka does hereby find that the Agreement described herein is in the best interests of the City of Yreka, and the City Council does hereby authorize execution of said Agreement by the City Manager on behalf of the City of Yreka. The City Manager or designee is hereby further authorized and directed to execute such other agreements, documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized, and the City Clerk or such Clerk's designee is hereby authorized and directed to affix the City's seal to said documents and to attest thereto.

Section 3. It is further resolved, if any section, subsection, part, clause, sentence or phrase of this Resolution or the application thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, the validity of the remaining portions of this Resolution, the application thereof, shall not be effected thereby but shall remain in full force and effect, it being the intention of the City Council to adopt each and every section, subsection, part, clause, sentence phrase regardless of whether any other section, subsection, part, clause, sentence or phrase or the application thereof is held to be invalid or unconstitutional.
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Section 4. This resolution shall take effect immediately upon its passage.

Passed and adopted this 16th day of May 2023, by the following vote:

AYES:

NAYS:

ABSENT:

ABSTAIN:
________________________
Corey Middleton, Mayor
Attest:__________________
Rhetta Hogan,
City Clerk
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City of Yreka

REQUEST FOR QUALIFICATIONS
Affordable Housing Developer
RFQ No. 23-03
Deadline for Submission: April 5, 2023
Prepared for:

City of Yreka
Planning Department
701 4th Street
Yreka, CA 96097
RFQ Contact:

Juliana Lucchesi AICP, Planning Director
(530) 841-2324
[email protected]
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City of Yreka RFQ— Affordable Housing Developer
Table of Contents
A. Intent of the RFQ 1
B. Background 3
C. Timeline 4
D. Submission Requirements 5
E. Evaluation 7
F. Terms 9
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A. Intent of the RFQ
The intent of this Request for Qualifications (RFQ) is to request Statements of Qualification (SOQ) from housing developers (Respondents) and based on a review of submissions, select a Respondent who the City of Yreka (the “City”) will partner with to produce affordable rental housing. The City completed its 2023-2031 Housing Element to the General Plan, in which it has identified a need for a diversity of housing types:
• Affordable to Low, Very Low, and Extremely Low Income households • Persons experiencing homelessness
• Seniors on fixed income
• Persons with a disability
• Workforce housing
The Housing Element establishes various Programs intended to address these needs, which include the following:
• Reduction of regulatory barriers to the development of higher density and special needs housing;
• Streamlined review and approval of permits;
• Implementation of impact fee waivers or deferrals for affordable housing; • Consider amending the municipal code to allow for by-right conversion of existing motels and hotels to permanent housing;
• Completion of a site inventory that identifies opportunities for multi-family residential development; and
• Support the development of workforce and affordable housing through site identification, assisting with funding applications, land donation, expedited permit review, approval of density bonus requests, direct funding, and other incentives.

The final draft of the City of Yreka 2023-2031 Housing Element may be found at https://ci.yreka.ca.us/164/Planning.

The City has completed a Housing Site Inventory, in which 14 different sites have been identified and assessed for development feasibility of affordable rental housing. Of these sites, 12 vacant sites have been identified, assessed, and ranked according to feasibility for new construction projects financed by tax credits, and 2 motel sites have been identified, assessed, and ranked according to feasibility for acquisition and rehabilitation projects financed by the State Homekey Program (Homekey). The Housing Site Inventory may be found at https://ci.yreka.ca.us/273/RFPs-Bids. The City has contracted with consultant Housing Tools to complete the Housing Site Inventory, develop this RFQ, and facilitate collaboration between the City and the selected Respondent with the end goal of constructing affordable housing. 82 of 519
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It is the City’s intent to work with the Respondent(s) selected through this RFQ to develop affordable housing, financed with tax credits or Homekey. Depending on the expertise and housing product specialization of each respondent, the City may choose to select more than one respondent. The City plans to support the selected Respondent’s projects by assisting with identifying and assessing feasible sites, property acquisition, providing local funding, deferring or waiving impact fees, facilitating necessary permit variances and density bonuses, streamlining the permit review process, providing technical assistance as needed, and assisting in applying for funding, which could include Homekey, the Infill Infrastructure Grant (IIG), the Affordable Housing and Sustainable Communities Program (AHSC), Competitive Permanent Local Housing Allocation (CPLHA), and/or State Community Development Block Grant (CDBG) or HOME funds.

Siskiyou County applied for the City of Yreka’s and seven additional cities’/towns’ Permanent Local Housing Allocation (PLHA) formula funds in 2022 per legally binding delegation agreements with the jurisdictions. Disbursement of funds is pending award letters, standard agreements, and submittal of supporting documentation to the State.

Siskiyou County is committed to supporting the City’s endeavors to develop a Homekey project in Yreka. As the administrative entity of PLHA formula funds for the City of Yreka and seven additional cities/towns, the County has set aside $1,885,321 for necessary operating subsidies for the Homekey project from the 2020 and 2021 PLHA allocations. The County has also set aside $581,573 for a supportive services reserve from the 2019 PLHA allocations. This supportive services reserve is planned to be used for multiple projects, including the County’s No Place Like Home (NPLH) project in Yreka called Siskiyou Crossroads with an estimated completion date in 2023, as well as the Homekey project in Yreka and other potential permanent supportive housing projects. The 2022 PLHA allocations are also planned to be deposited into the supportive services reserve. The 2022 PLHA allocations amounts are not known at this time and will be published by the State in 2023. In addition, Siskiyou County Behavioral Health staff will help develop an appropriate supportive services plan for the project and provide staffing as needed.

Due to the State’s requirements for PLHA-funded projects, operating subsidies will be provided in the form of a low-interest deferred loan. Loan documents are subject to approval by the State and will include a Loan Agreement, a Promissory Note secured by a Deed of Trust, and a Regulatory Agreement for a term of at least 55 years. The selected developer will coordinate with the County for annual monitoring of the project which may include a site visit and written materials as directed by the County. The developer will be expected to share data and information as requested by the County, City, or State. 83 of 519
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B. Background
The City of Yreka is located in the northern region of Siskiyou County, about 18 miles south of the California border with Oregon. It is the largest city in Siskiyou County, with an estimated 2020 population of 7,807 according to the U.S. Decennial Census. Siskiyou County’s estimated 2020 population was 44,076. Yreka’s population increased 8% from 2000 to 2020. Listed below are some other noteworthy demographic data points for Yreka. • According to the 2020 U.S. Decennial Census, the largest racial group that is Not Hispanic or Latino is White at 68.1% of the population, followed by Two or More Races at 8.4%, and American Indian or Alaska Native at 7.9%. An estimated 12.3% of the population is Hispanic or Latino.
• According to the U.S. Census 2015-2019 American Community Survey, the largest age cohort for the City as of 2019 was 65 years and older, with an estimated 1,514 persons (20% of the total population), followed by 25-34 years old with 1,217 persons (16.1% of the total population). Most of the population growth from 2000 to 2019 occurred in the 25-34 age cohort.
• According to the U.S. Census 2016-2020 American Community Survey, an estimated 19% of the population has a disability, and 39% of the population 65 years and older has a disability.
• According to the U.S. Census 2015-2019 American Community Survey, an estimated 1,245 Lower Income households (earning 80% or less of Area Median Income) were paying more than 30% of their income toward housing costs.

There are an estimated 3,402 households in Yreka per the 2015-2019 U.S. Census American Community Survey. According to the 2020 U.S. Decennial Census, the average household size is

2.21 person, and the average family size is 3.04 persons. Below are estimates of households by percent of Area Median Income (AMI).

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City of Yreka, Households by Income Group, 2019
Income Group Income Households Percent of Total
Extremely Low (Below 30% of AMI) <$12,745 445 13%
Very Low (30%-50% of AMI) $12,745-$21,242 239 7%
Low (50%-80% of AMI) $21,242-$33,987 598 18%
Moderate (80%-120% of AMI) $22,987-$50,980 667 20%
Above Moderate (Over 120% of AMI) >$50,980 1,453 43%
Total Households 3,402
Source: U.S. Census 2015-2019 American Community Survey An estimated 59% of units in Yreka are owner-occupied and 41% renter-occupied. The 2019 median income for households in owner-occupied units was $53,611, while the median income for households in renter-occupied units was $29,662 (U.S. Census 2015-2019 American Community Survey).

Most employment in Yreka is in Educational services, and health care and social assistance with 26% of employment and a median income of $39,792, followed by Arts, entertainment, and recreation, and accommodation and food services with 12% of employment and a median income of $12,422 (U.S. Census 2015-2019 American Community Survey). Yreka’s largest employers are Fairchild Medical Center, Nor-Cal Products Inc. (vacuum system manufacturer), Raley’s, Siskiyou County Public Works, and Walmart.

C. Timeline
Key dates for this RFQ are listed below.

RFQ released Mar. 6, 2023
Last day for Respondents to submit questions to the City Mar. 17, 2023 Q & A released Mar. 24, 2023
Statements of Qualifications due Apr. 5, 2023
Interviews Apr. 10-14, 2023
City selects preferred Respondent Apr. 28, 2023
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D. Submission Requirements
D.1. Content
Format the SOQ in 12-point font on 8.5” x 11” pages with 1” margins, organized as laid out below.

1. Cover Letter— Include the legal name and business address, as well as the contact name, title, phone number, and email address, for the entity submitting the SOQ. The letter should be signed by the principal or officer authorized to make commitments on behalf of the entity submitting the SOQ.

2. Organizational Experience and Qualifications (max 3 pages, not including Attachments)— Provide the following information for the entity submitting the SOQ:
• Mission, history, and number of years in operation
• Location of office(s)
• Total number of rental units built, as well as total number of affordable rent-restricted units built
• Development focus (i.e. senior, family, special needs housing, etc.) • A description of experience developing and/or managing permanent supportive housing in a housing-first philosophy for people experiencing or at-risk of homelessness • A description of experience working in rural communities • A description of approach to community engagement
• A description of how properties are managed (i.e. in-house, third-party company) • A description of how supportive services are provided to residents (i.e. in-house, by contract with other organizations), along with examples of such partnerships • Include in the SOQ Attachments section labeled “Attachment A: Project List”, a list of all affordable rent-restricted projects developed, owned and operated by the entity over the last 20 years, up to 10 projects in service more than 3 years, including the name and address of each project, whether it received a tax credit allocation, whether it served special needs residents, total number of units, and year placed in service • Include the entity’s last two years of financial audits in the SOQ Attachments section labeled “Attachment B: Entity Financial Audits”

3. Staff Experience and Qualifications (max 3 pages, not including Attachments)— Provide the following information for the entity submitting the SOQ:
• Number of staff and organizational structure
• Org chart
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• Description of the staffing roles and responsibilities for development, transition to operations, and asset management, and identify who would be the primary point of contact for coordination with the City
• Experience and qualifications for each member of the housing development staff and any other staff person that will work on projects in Yreka • Include resumes for key staff in the SOQ Attachments section labeled “Attachment C:

Resumes”

4. Portfolio (max 3 pages, not including Attachments)— Describe three recently constructed affordable rent-restricted projects, including the following for each project:
• Project name and address
• Target tenant population(s)
• Unit mix, including rent levels and unit types
• Primary funding sources
• Brief design description, including site plan, outdoor amenities, number of stories, indoor common spaces, offices, parking, and any environmental sustainability features • One or more photos or renderings of the project
• Property manager
• Supportive services (if applicable)
• Any unique aspects of the development process, or noteworthy challenges that were overcome to realize the project
• Reference contact information, including name, title, entity, phone number, and email address (preferably a local government contact)
• Include a copy of each project’s most recent financial audit in the SOQ Attachments section labeled “Attachment D: Project Financial Audits”.

5. Proposed Work Plan (max 3 pages)— Describe how the entity submitting the SOQ proposes working with the City to establish a project type and target population, identify and assess a site, achieve site control, conduct community outreach, secure entitlements, and obtain financing.

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D.2. Submission
By no later than 5:00 PM on April 5, 2023, submit an electronic pdf copy of the SOQ to [email protected] at:

Juliana Lucchesi, AICP, Planning Director
City of Yreka
701 4th Street
Yreka, CA 96097
Email: [email protected]
D.3. Questions
Submit questions about this RFQ by email to Juliana Lucchesi at the address above in Section D.2 by 5:00 PM on March 17, 2023. A Q&A with responses to questions submitted by this date and time will be published on the City’s website at https://ci.yreka.ca.us/273/RFPs-Bids on February 17, 2023.

E. Evaluation
E.1. Threshold Requirements
In order to submit a SOQ, Respondents to this RFQ must have developed and owned at least one rental housing project in a rural California community. There is no single definition of “rural” so the Respondent may make a case as to why a particular California community is considered “rural.”
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E.2. Selection Criteria
The following selection criteria will be used to evaluate SOQs that respond to this RFQ.

Criteria

Points
Entity’s overall affordable housing development track record and capacity to complete and operate the project
40 Experience and capacity of staff assigned to work on the project 20 Experience and capacity in developing housing-first permanent supportive housing and Homekey projects
10 Experience working in rural California communities 10 Strength of services, partnerships, collaborations, and community outreach 10 Demonstration of long-term project sustainability and community integration 10 Total Possible Points 100
E.3. Selection Process
An Evaluation Committee will review, score, and rank submitted SOQs, and recommend a selected Respondent(s) to partner with the City. The Evaluation Committee will be made up of City staff and consultant Housing Tools staff. The selection process will consist of the following steps.

1. Threshold— Each SOQ submitted by the submission deadline will be reviewed for completeness and meeting Threshold Requirements per Section E.1. of this RFQ.

2. Scoring— Each SOQ that is complete and meets Threshold will be scored by the Selection Criteria as outlined in Section E.2. of this RFQ.

3. Interviews— After Threshold and Scoring review, the Evaluation Committee may select SOQs deemed most qualified for further evaluation. Interviews of these selected organizations may be conducted via Zoom as part of the final evaluation process.

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process. If scoring is to be used for interviews, the scoring criteria will be shared ahead of the interviews.

4. Selection— After Threshold and Scoring review, and Interviews (if deemed necessary), the Evaluation Committee will recommend selection of a Respondent. The Respondent recommended by the Selection Committee will be reviewed by the City Council for approval. The City will then enter into agreements as necessary to memorialize the roles, responsibilities and commitments of the City and the selected Respondent, which will include a Memorandum of Understanding for predevelopment activities, may also include an Exclusive Negotiation Agreement and/or Disposition and Development Agreement at later stages, if necessary.

F. Terms
F.1. Equal Opportunity and Affirmative Action
The City is an Equal Opportunity/Affirmative Action Employer and the successful Respondent will be required to comply with the provisions of Federal Executive Order 11246 and applicable state and federal laws. Respondent selection as a result of this RFQ will be made without discrimination based on race, color, religion, sex, national origin, age, disability, or genetic information (including family medical history).

F.2. Reasonable Accommodation
Respondents should be familiar with the Employers’ Practical Guide to Reasonable Accommodations Under the Americans with Disabilities Act as published by the Job Accommodation Network, a service of the U.S. Department of Labor’s Office of Disability Employment Policy.

F.3. Modification of SOQ
The City reserves the right to request any Respondent to clarify the submittal or to supply additional information necessary to assist in the selection process.

F.4. Rejection of Qualifications
The City reserves the right to reject any and/or all SOQs at its discretion for any reason. 90 of 519
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F.5. Right to Negotiate and Limitations
The City reserves the right to negotiate with any qualified firm or to modify or cancel in part or in its entirety this RFQ if it is in the best interests of the City to do so. This RFQ does not commit the City to award a contract, to pay any costs incurred in the preparation of an SOQ for this RFQ, or to procure a contract for services with a Respondent.

F.6. Enforceable Commitments
Respondents are advised that should this RFQ result in a recommendation for the City to enter into agreement with the selected respondent, the agreement will not be enforceable until it is approved by the City Council and fully executed by the City.

F.7. Verbal Agreement or Conversation
No oral interpretations will be made to respondents regarding this RFQ. All questions shall be submitted in writing per Section D.3 of this RFQ. The City will accordingly respond to questions submitted in adherence with Section D.3 of this RFQ with a Q &A document that will be published on the City’s website at https://ci.yreka.ca.us/273/RFPs-Bids on March 24, 2023. Any oral communication between the City and respondents is not binding, nor will it modify this RFQ in any way.

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STATEMENT OF QUALIFICATIONS

RURAL COMMUNITIES HOUSING DEVELOPMENT CORPORATION
RESPONSE TO RFQ NO. 23-03
499 Leslie Street
Ukiah, CA 95482
Phone: (707) 463-1975
www.rchdc.org
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Contents
Organizational Experience and Qualifications............................................................................................ 2 Supportive Housing Experience .................................................................................................. 3 Housing First................................................................................................................................ 4 Community Engagement............................................................................................................. 4 Staff Experience and Qualifications............................................................................................................. 4 RCHDC Corporate Officers: ......................................................................................................... 5 RCHDC’s Development Team:..................................................................................................... 5 Property Management:............................................................................................................... 7 Number of Staff and Organizational Structure ........................................................................... 7 Primary Point of Contact for Coordination with the City of Yreka ............................................. 7 Organizational Chart ................................................................................................................... 7 Portfolio........................................................................................................................................................ 8 Proposed Work Plan...................................................................................................................................10 Collaboration with City of Yreka ............................................................................................... 10 Financial Structure .................................................................................................................... 11 Sustainability Plan ..................................................................................................................... 12 Timeline..................................................................................................................................... 12 Attachment A: Project List.........................................................................................................................13 Attachment B: Entity Financial Audits.......................................................................................................13 Attachment C: Resumes.............................................................................................................................13 Attachment D: Project Financial Audits ....................................................................................................13 94 of 519
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Organizational Experience and Qualifications
Rural Communities Housing Development Corporation’s (RCHDC) mission is to provide decent, affordable housing to low- and moderate-income persons. Incorporated in 1975, RCHDC has almost 50 years of extensive history developing and managing housing. RCHDC’s corporate office is in Mendocino County, however, our housing portfolio expands across seven Northern California Counties including, Mendocino, Lake, Humboldt, Del Norte, Siskiyou, Shasta, and Tehama.

RCHDC was officially incorporated as a charitable public benefit non-profit corporation in November 1975. The corporation was initially developed and staffed by North Coast Opportunities (NCO) a local Community Action Agency. NCO recognized the need for housing for low-income persons, as well as the need for a local, single-purpose, housing development, public benefit corporation to address the problem. In January 1983 RCHDC became financially and administratively independent of NCO. Initially, RCHDC was involved in developing affordable multi-family apartment communities for low-income senior citizens, special needs groups, and families. Later it expanded by providing a USDA - Rural Development Mutual Self-Help Housing Program serving Lake, Mendocino, and Humboldt Counties. RCHDC also performs all Property Management and maintenance services for our portfolio of 1,492 units in 50 apartment communities. In addition, about 15 years ago RCHDC also began the preservation of “at-risk housing” by purchasing and rehabilitating affordable housing developments at risk of being sold and converted into market-rate rental housing. RCHDC’s success in carrying out its mission is evidenced by the following:
• Assisted families in the construction of 413 single-family homes through the USDA – Rural Development Mutual Self-Help Housing Program.
• Owns 15 rental developments and fee manages 1, reserved exclusively for qualified LowIncome Seniors. Together these 16 developments consist of 497 units. • Owns 11 rental developments and fee manages 12 communities reserved for qualified Low-Income Families. Together these 22 developments consist of 665 units. • Owns 9 rental developments and fee manages 3 communities consisting of 330 units reserved exclusively for individuals with various forms of disabilities, status of homelessness or other special needs.
• Presently has 90 units under construction.
• Presently has 249 units in the predevelopment phase.
• Through the Community Land Trust, RCHDC has facilitated 22 homes becoming permanently affordable.

RCHDC has an extensive history of developing and managing affordable housing in the communities we serve. RCHDC contracts with various community-based non-profit service providers and County entities in Northern California for the provision of behavioral health and supportive services for our permanent supportive housing developments. RCHDC also has a proven track record and extensive history of sustainable business practices and financial and 95 of 519
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personnel management systems in place. An annual audit is completed for each development operated by RCHDC as well as a Consolidated Audit of the Organization.

RCHDC’s Board of Directors is composed of highly competent and dedicated individuals. Many of these Board members have business experience in the fields of real estate, banking, and business.

The Board oversees the Chief Executive Officer and other Corporate Staff managing the day-today operations of the corporation in a professional and responsible manner.

Supportive Housing Experience
RCHDC has over 40 years of experience developing and owning special needs housing for disabled persons. In the last seven years, RCHDC has refined its capacity to develop permanent supportive housing for special needs populations by successfully completing and now managing Arcata Bay Crossing, Willow Terrace, Orr Creek Commons I and II, Pine Hill Village, and Olive Grove. These developments offer much-needed housing and supportive services for some of the most vulnerable populations.

RCHDC’s experience with the development, ownership, and operation of supportive housing originated in 1982 with the development of Holden Street Apartments, a 6-unit complex located in Ukiah (Mendocino County) to provide affordable housing with supportive services for adults.

This was accomplished using a loan from HUD, authorized under Section 202 of the National Housing Act of 1959. RCHDC partnered with Mendocino County Behavioral Health and Recovery Services to offer on-site supportive services with a shared goal of empowering people with disabilities to remain housed independently.

In 2002, RCHDC developed Gibson Court, a 16-unit apartment complex in Ukiah, and Bevins Court, a 10-unit apartment complex in Lakeport (Lake County). These apartment complexes offer affordable housing and supportive services for low-income households with disabilities. To fund these developments, RCHDC leveraged financing from the HOME Program, local Redevelopment Agency funds, and the Affordable Housing Program (AHP). RCHDC also secured a HUD Section 811 Project Rental Assistance Contract (PRAC) to subsidize the rents of the disabled residents.

These programs are precursors to the current programs available to facilitate the development of Permanent Supportive Housing (PSH) and gave RCHDC firsthand experience administering public assistance programs linked to supportive services. As a result, RCHDC strengthened relationships among supportive service providers and developed housing-specific policies and procedures to reinforce coordination among housing and supportive service staff.

In 2015, RCHDC partnered with Housing Humboldt, a nonprofit housing agency in Arcata, to develop Arcata Bay Crossing. This 32-unit apartment complex offers PSH for people experiencing homelessness and/or serious mental illness and other low-income households. Arcata Bay Crossing was developed by leveraging Low Income Housing Tax Credits (LIHTC), CDBG, and Mental Health Services Act (MHSA) funding, supporting eligible tenants in 15 of the units.

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and Human Services to create a supportive services plan aimed at assisting residents in overcoming barriers that prevent them from accessing and/or maintaining affordable housing.

In collaboration with Mendocino County Behavioral Health and Recovery Services, RCHDC developed Willow Terrace, a supportive housing program in Ukiah. Willow Terrace has 37 units with one onsite property managers unit. This development provides PSH to people experiencing homelessness and/or serious mental illness. Tenants reside in private units designed for efficient living and have access to community gathering areas designed to facilitate health and wellbeing and community engagement. Through careful planning and coordination, RCHDC and Mendocino County designed strategies development, supportive services, and property management to provide onsite wraparound mental health services and case management. These strategies were an integral part of the project and necessary to access funding through Low Income Housing Tax Credits, MHSA, and FHL Bank’s Affordable Housing Program.

Housing First
RCHDC uses the low-barrier Housing First model to serve people experiencing homelessness; and recognizes that each person must first be able to access a decent, safe place to live, that does not limit the length of stay (permanent supportive), before stabilizing, improving health, reducing harmful behaviors, or increasing income. RCHDC recognizes that people must access necessities like food and shelter before addressing potential housing barriers such as sobriety requirements or absence of criminal history. Supportive services are provided at RCHDC’s PSH housing developments, however, utilizing them is not a requirement to access or retain housing.

Community Engagement
Community engagement is a strategic process where RCHDC works collaboratively with stakeholders, City and County governments, and service provider entities, to engage with the local community. RCHDC engages with communities to receive input and help achieve longterm and sustainable outcomes, processes, and relationships. This framework is based on the guiding principles that respect the right of all community members to be informed, consulted, involved, and empowered. Engaging with the communities we develop housing in fosters and enhances trust, assists us in managing conflicting opinions and ideologies, mobilizes resources, and can serve as a catalyst for change by broadening the scope and shifting the focus from the individual entity to the collective. This ensures consideration and inclusiveness for the diversity that exists within any community. To achieve these goals and outcomes, RCHDC will perform any combination of the following, send an informational flier to members of the community surrounding a potential new development sight, hold community meetings, speak to local newspapers, reach out to local businesses, and inform the local Continuum of Care.

Staff Experience and Qualifications
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success. RCHDC treats employees with respect and dignity, provides employees with fair and adequate compensation, offers opportunities for personal and career growth and development, and a healthy and comfortable work environment.

RCHDC Corporate Officers:

Ryan LaRue, Chief Executive Officer
Ryan joined RCHDC in 2015 as a Project Manager for the Development Department subsequently becoming the Director of Development. As CEO, Ryan is committed to bringing much needed affordable housing to the communities we serve. Ryan is particularly grateful for the opportunity to develop Permanent Supportive Housing. As Director, Ryan secured financing and partnerships for six multifamily permanent supportive housing communities. Prior to joining RCHDC, Ryan worked in the construction and social services industries. In his downtime, he enjoys working on his alpaca farm and spending time with his wife and two children.

Dan McIntire, Chief Operations Officer
Daniel has a master’s in science in Organizational Leadership and a master’s in science in Management from Colorado State University’s Global campus. Dan has over 15 years of experience in senior management in the fields of production, quality control, purchasing, construction and construction management. In January 2015, Daniel began his career in the affordable housing industry as the Corporate Facilities Manager and he currently holds a California Real Estate Brokers license and serves as the broker for RCHDC. Once RCHDC’s developments are complete, Dan is responsible for the transition to operations and asset management.

Jennifer Hofstetter, Chief Financial Officer
Jennifer holds a Bachelor of Science in Business Administration in Accounting from Sonoma State University. As RCHDC's Chief Financial Officer, Jennifer works directly under the Chief Executive Officer. She is responsible for the daily activities of the Finance Department. Jennifer is certified as an Asset Management Specialist (AMS) and is pursuing a Certified Housing Asset Manager (CHAM) designation. Prior to working for RCHDC, Jennifer worked for Eel River Fuels Inc. and Mendocino Forest Products, LLC.

RCHDC’s Development Team:

Angie Figueroa—Director of Development
Angelica has been with RCHDC for the last 5 years. She holds a Bachelor of Science degree in Engineering-Construction Management with a minor in Business Administration from CSU, Sacramento. She is involved in all aspects of development from site acquisition and project financing to overseeing the construction phase of all projects. Angie has a vital role in establishing and maintaining the Development Pipeline. She has developed a great relationship with not only her team members but also consultants, contractors, architects, and local government representatives. She is goal oriented and understands the complexities and the extensive rules and regulations of affordable housing development. Her hands-on experience in finance and construction management continues to be quintessential in bringing RCHDC’s projects to completion.
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Elizabeth Matsumoto—Director of Multifamily Development Beth has 20 years of experience in nonprofit affordable housing. She holds a master’s degree focused on Sustainable Community Development from Humboldt State University and a bachelor’s degree from the University of Colorado Leeds School of Business. Beth has learned to navigate the complex but rewarding field of developing and preserving affordable housing to help meet a basic need of our community members. In 2015, she was selected as the recipient of the Northern California Nonprofit Leadership Achievement Award for her contribution to affordable housing. As Executive Director of Housing Humboldt based in Arcata, Beth helped to facilitate a formal partnership with RCHDC to strengthen the nonprofit housing sector in Humboldt County and the surrounding region.

Larry Weiss—Construction Supervisor
Larry has been a licensed construction contractor for more than 20 years. He has worked for RCHDC as both the Construction Foreman for our Self-Help Program and as the Construction Supervisor for all Development Department affordable housing projects. Larry assists in the preparation of the construction budgets, procuring bids and estimates of materials in order to accurately project construction costs for all multi-family, senior and special need properties. He is responsible for directing and coordinating all sub-contractors for all relative project work.

Larry ensures that construction is completed in accordance with the blueprint design and according to code. He coordinates all City or County inspections and planning aspects of our projects. To date, Larry has provided all aspect of construction supervision and sub-contractor coordination for the rehab of 7 multi-family projects.

Yessica Figueroa—Senior Project Manager
Yessica is a graduate from Sonoma State University, majoring in Sociology and minoring in Criminal Justice. Yessica started working in RCHDC’s Development in 2017 as a Project Manager and in 2021 was promoted to Senior Project Manager. Yessica continually collaborates with local jurisdictions in the determination of appropriate sites to develop. She conducts feasibility assessments ensuring that the sites comply with federal and state requirements. She has managed compliance during the development phase, maintained appropriate documentation, and the completion of several successful funding grants for both multifamily and single-family developments. Yessica is passionate about helping others and hopes to improve the quality of life of low-income communities through the development of affordable housing.

Allie Campbell—Project Manager
Allie transferred from a Regional Manager in Property Management to a Project Manager with the Development Department. Allie is well rounded in understanding the different funding sources within Affordable Housing. As a Regional Property Manager, she was responsible for each property’s budget in her region and assisted her property management staff with growing into leaders, meeting deadlines and managing the properties successfully. As a Project Manager she has been able to take her knowledge from Property Management and apply to the numerous components of Development. Allie lead a HomeKey rehabilitation project in Mendocino County, working with Mendocino County Planning and Building, Social Services, and subcontractors to ensure all deadlines and requirements were met. This project converted what was formally known as the Best Western Hotel into permanent supportive housing. 99 of 519
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Jessica Johnson—Project Manager
Jessica has extensive knowledge researching, writing, managing, complying, and reporting on various State and Federal funding opportunities. She has participated in multiple collaborations focusing on program and project development with community stakeholders and partnering agencies, helping bring more robust supportive services to some of the most vulnerable populations. Jessica’s work has included participating in opening an emergency shelter for people experiencing homelessness in Mendocino County; collaborating with community partners and school districts to obtain funding for better mental health services in schools; and applying for and obtaining grant funding to bolster a variety of supportive services in Mendocino, Lake, and Humboldt counties.

Property Management:

Rebecca Neilson, Director of Property Management
Rebecca attended Cornell University for business and currently holds a California Real Estate License. In addition, she holds the following Certifications: Certified Occupancy Specialist, Certified Tax Credit Specialist, Certified Manager of Housing, Certified Manager of Maintenance, Site-Based Budgeting Specialist, and USDA Rural Development Certified Manager.

Rebecca also holds a Certificate in Mental Health First Aid and is a Certified Mental Health First Aid Instructor. She has been a Notary Public for 13 years. Rebecca has been with RCHDC for 12 years serving in the following capacities: Property Manager, Compliance Specialist, Regional Manager, Senior Regional Manager, and is now the Director of Property Management.

Number of Staff and Organizational Structure
RCHDC has a clearly established organizational structure to carry out the mission and achieve the goals of the agency. The structure of RCHDC improves operational efficiency by providing clarity to employees at all levels of the agency, enabling better coordination between departments. RCHDC currently has seventy-four employees within five departments that include the Chief Suite, Finance, Human Resources, Property Management, and Development.

RCHDC’s CEO ultimately oversees the entire agency but directly supervises 7 employees, including our CFO, COO, HR Manager, Director of Development, Director of Multi-family Development, and our Director of Property Management. The Directors of each of the departments are responsible for their direct staff supervision. RCHDC’s CFO oversees our Finance Department; our Property Management Director oversees our Property Management department and maintenance team; and our Director of Development and Director of Multifamily Development collaboratively oversee the Development department.

Primary Point of Contact for Coordination with the City of Yreka Elizabeth Matsumoto, Director of Development. Email: [email protected] Organizational Chart
Please see Organizational Chart included in “Attachment C – Resumes”. 100 of 519
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Portfolio
Project name and address: Orr Creek Commons, 355 Brush Street, Ukiah, CA 95482 Target tenant population(s): Special Needs
Unit mix and unit types: 39 units – 10 units for developmentally delayed individuals, 10 units for transitional age youth, 10 units for homeless or in-house supportive services clients; 26 – 1bed, 13 – 2bed, and 1 – 3bed managers unit.

Rent levels: 15 units - 30%; 24 units – 50%
Primary funding sources: HCD- HOME, County of Mendocino, Savings Bank of Mendocino County, and 9% Low-Income Housing Tax Credits.

Design description: Orr Creek Commons consists of five residential two-story buildings and a one-story community/administrative building. The buildings share a courtyard that is the focal point for gathering and creating a sense of community. The first floor will consist of 4 accessible units and 15 adaptable units. The facility has a traditional laundry, community room and manager’s office, there is substantial space allocated for providing the supportive services for qualified tenants. There are 32 parking spaces, including two accessible spaces and three electric vehicle charging stations. The construction meets Title 24 provisions, and solar panels make the facility attain net-zero energy usage.

Property manager: Deborah Schuler
Supportive services: RCHDC’s partners for providing specialized supportive services for Orr Creek Commons include Health and Human Services of
Mendocino County (HHSA); Redwood Community Services (RCS); Redwood Coast Regional Center (RCRC).

Development process: Orr Creek Commons was a unique development in that it was RCHDC’s first community in Mendocino County to house a mix of special needs individuals including transitional age youth, developmentally delayed individuals, IHSS clients and unsheltered individuals. The mutual collaboration and coordination of services between the service providers and our property management department greatly contributed to a successful supportive housing development.

Reference Contact
Name Leah E. Thompson
Title and Entity RCRC, CPP Resource Coordinator
Phone Number 707-616-2206
Email [email protected]
______________________________________________________________________________ 101 of 519
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Project name and address: Arcata Bay Crossing, 824 L Street, Arcata, CA 95521 Target tenant population(s): Special Needs
Unit mix and types: 32 units – 15 units for Seriously Mentally Ill/Homeless or at risk of homelessness; 4 units for chronically homeless; 12 units general low income and 1 – two-bed manager’s unit.

Rent levels: 16 units – 30%; 5 units – 45%; 5 units – 50%; 3 units – 55% and 2 units – 60%
Primary funding sources: CalHFA, City of Arcata, CDBG, 9% Low-Income Housing Tax Credits Design description: The development includes new construction and rehabilitation of energy-efficient two-story buildings. The first floor has 12 accessible single units, a laundry room and two accessory storage/maintenance rooms. The second floor has a new building that contains 12 single units, 3 double units, and an accessory storage room. The rehab included the existing building remodeled into the main office a separate but adjacent common area. The main office area has 4 private offices, a meeting room, a lobby, and an intake/reception space. An existing warehouse space was remolded into a community room, kitchen, and accessible bathrooms. The development offers 24 off-street parking spaces and bike lanes were added during the improvements.

Property manager: Rebecca Neilson
Supportive services: RCHDC’s partners for providing specialized supportive services for Arcata Bay Crossing included: Arcata House Partnership/Apt First, Department of Health and Human Services, and Open-Door
Community Health Center
Development Process: Arcata Bay Crossing was the result of an effective public-private partnership between the City of Arcata, the County of Humboldt, and RCHDC. At the time, many rural communities were unable to access the Mental Health Services Act (MHSA) funds due to lack of political will and land use challenges; however, leadership within RCHDC, the County Health and Human Services Agency, and the City of Arcata’s Community Development Department facilitated the partnership and prioritization of supportive housing.

Reference Contact
Information
Name Connie Beck
Title and Entity Director, Humboldt County Dept of Health & Human Services Phone Number 707-441-5400
Email [email protected]
______________________________________________________________________________ 102 of 519
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Project name and address: Willow Terrace, 237 East Gobbi Street, Ukiah, CA 95482 Target tenant population(s): Special Needs
Unit mix and types: 37 units for Seriously Mentally Ill/Homeless or At Risk of Homelessness; 26 SRO, 11 – 1bed, and 1 – 3bed manager’s unit.

Rent Levels: 30% AMI
Primary funding sources: Mental Health Services Act, Affordable Housing Program, 9% LowIncome Housing Tax Credits Design Description: There are three two-story residential buildings and a one-story building for offices, meeting rooms, and provision of services to the tenants. One office each for property management and service providers, two service delivery rooms, two ADA
community bathrooms, a meeting room, a community room with a full-service kitchen, a laundry room, a maintenance workshop, and storage room, and several utility closets will be included in the one-story building. The project has 16 parking spaces. The building meets Title 24 provisions and is net-zero energy usage.

Property manager: Ashley Hathaway
Supportive services: Redwood Community Services Inc., Manzanita Services, and Mendocino County AIDS Viral Hepatitis Network
Development process: Willow Terrace followed a permanent supportive housing model that the community had not seen before so there were many concerns about ongoing operations. RCHDC, with the support of Redwood Community Services, had to greatly advocate for community support and to get to the next level of entitlements.

Reference Contact
Information
Name Karen Lovato
Title and Entity Acting Deputy Director Behavioral Health & Recovery Services Phone Number 707-472-2342
Email [email protected]
______________________________________________________________________________ Proposed Work Plan
Collaboration with City of Yreka
Rural Communities Housing Development Corporation’s (RCHDC) approach to developing affordable housing in the city of Yreka will be driven by the needs of the local community. In order to understand and plan for a project that meets those needs, we focus on five essential components – building a project-specific team, ensuring community involvement and integration, knowing the market and target population, assessing the development type options, and matching the appropriate funding sources. Each of these components requires planning, research, and action based on informed decisions. Fortunately, much of the planning 103 of 519
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and research will be informed by the City’s 2023-2031 Housing Element along with the Affordable Housing Site Inventory completed by Housing Tools; however, we expect to supplement the report findings through further research and analysis.

If selected through this RFQ, our development team will start working immediately to ensure the timely development of an affordable housing community. Our first step will be to execute a contract between RCHDC and the City of Yreka which will demonstrate the duties and responsibilities of both parties. Concurrently, RCHDC will also convene a project kick-off meeting with the City of Yreka in which we will further define team member roles, discuss financing options, and establish common goals.

RCHDC will begin to build upon the existing information on housing needs and potential development sites by engaging with stakeholders to develop a vision for a project suitable to meet the needs of the community. The vision will inform the preferred development site, the target population, the physical features of the buildings as well as how the housing and services will operate. Interviews and one or two meetings will be held to engage with the community and stakeholders. Our experience-based knowledge of what types of features and program successes and lessons learned in other communities we work in will be offered to help guide the visioning process.

With a project vision in place, RCHDC will enter an Option to Purchase Agreement for the selected development site. During our due diligence period, we will begin procuring professional reports and studies as well as analyzing financial feasibility, reviewing the entitlement process and start preparing the applications for our initial sources of financing. If the project’s financial feasibility necessitates Low Income Housing Tax Credit funding, we will apply for the first round of tax credits due in March 2025. If awarded tax credits in June 2025, we will be prepared to begin construction within 180 days and no later than December 2025, with project completion expected Summer 2027. At the end of this document, you will find a Work Plan Timeline; however, it is important to note that the development steps and timeline may vary depending on the project type and funding mix. RCHDC is more than willing and capable to adjust our Work Plan and Timeline to fit the needs of the City.

Financial Structure
The financial strategy for long-term sustainability will rely on soft debt in combination with private equity offered through the Low Income Housing Tax Credit program. This financial structure enables the property to support reduced revenues consistent with rent rates that low and very-low-income households can afford. Concurrently, a Capitalized Operating Subsidy would enable residents who sometimes have no income or very low income to obtain and retain housing. We also understand that there is a strong market for affordable housing in Siskiyou County that will be able to sustain the property with minimal vacancies. The strategy will also rely on sound property and asset management plans. These plans rely on preventative maintenance and careful attention to revenue and expense statements for the purpose of 104 of 519
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retaining tenants, stabilizing operating costs, and re-investing in the property’s long-term sustainability.

Sustainability Plan
The operations plan for after the affordable housing project is placed in service will be guided by a property management plan. The plan will address how the needs of the housing community will be met in terms of occupancy, maintenance, personnel management, financial management, and tenant services. RCHDC will fulfill the role of property manager and will be responsible for implementing the property management plan. A property manager will live onsite and will be responsible for the day-to-day management activities including coordinating maintenance issues and ensuring that tenants’ needs are met. A maintenance technician will be responsible for always keeping and maintaining buildings and grounds in good condition.

Regional Managers who report directly to the Director of Property Management oversee the on-site staff and overall management of the property.

If developing a permanent supportive housing development, we will reach out to the County of Siskiyou Health and Human Services Agency for collaboration. If the County cannot take on this responsibility, then we will engage with a qualified service provider with three or more years of experience serving persons with special needs. The supportive services available to the special needs tenants will be voluntary, flexible, and individualized. RCHDC will also commit to a parttime resident services coordinator that will provide services to all residents of this community.

Both the property management and service plans will document policies that promote participation by tenants in community activities and impose no restrictions on guests that are not otherwise required or common in other rental housing in the community. RCHDC housing staff will work closely with the lead service provider’s supportive service staff. The housing and support staff positions will fulfill separate roles but will work collaboratively with the shared goal of supporting tenants to remain stably housed.

Timeline
Work Plan Timeline
Spring 2023 Develop/ Execute contract between Rural Communities Housing Development Corporation (RCHDC) and City of Yreka.

Summer 2023 Kick-off meeting with City of Yreka to define team member roles.

Summer 2023 RCHDC to further assess the feasibility of the top 3 sites from the City of Yreka Affordable Housing Site Inventory.

Fall 2023 RCHDC to conduct community meetings to receive input from stakeholders on the biggest need, site development and design.

Spring 2024 RCHDC to enter into an Option to Purchase Agreement for the preferred site.
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Spring 2024 RCHDC to complete due diligence including Environmental Review, Market Study, Appraisal etc.

Summer/Fall 2024 RCHDC to pursue the necessary initial financing for a competitive tax credit application.

March 2025 RCHDC to apply for Low Income Housing Tax Credits.

June 2025 RCHDC to have secured all financing necessary to begin construction June 2025 RCHDC to work with Architectural and Engineering firms in the development of a construction-ready Project Plan Set.

August 2025 RCHDC to submit plans to local jurisdiction for review.

September 2025 RCHDC to negotiate with funding partners on terms and conditions of loan and regulatory agreements to the benefit of the housing community.

December 2025 RCHDC to close and record loans and Regulatory Agreements.

December 2025 RCHDC to commence construction
June 2027 RCHDC to complete construction
September 2027 RCHDC to lease up community
September 2027 RCHDC to provide ongoing Property Management Services Attachment A: Project List
Please see a list of affordable rent restricted projects developed, owned, and operated by RCHDC; and a list of RCHDC’s projects in service for more than 3 years, included as “Attachment A – Project List”.

Attachment B: Entity Financial Audits
Please see RCHDC’s last two years of financial audits included as “Attachment B – Entity Financial Audits”.

Attachment C: Resumes
Please see RCHDC’s Organizational Chart and Resumes for key proposed project staff included as “Attachment C – Resumes”.

Attachment D: Project Financial Audits
Please see the Portfolio section of this RFQ’s subject projects most recent financial audits and project photos and/or renderings included as “Attachment D – Project Financial Audits”. 106 of 519
1 MEMORANDUM OF UNDERSTANDING
Between City of Yreka
and
Rural Communities Housing Development Corporation (RCHDC) THIS MEMORANDUM OF UNDERSTANDING, hereinafter referred to as "MOU" or "Agreement," is made and entered into on this day of , 2023, by and between the City of Yreka, a political subdivision of the State of California, (hereinafter known as "City"), and Rural Communities Housing Development Corporation, a California nonprofit public benefit corporation (hereinafter known as "RCHDC"). Together the above entities shall be referred to hereafter as the "Parties."
WHEREAS, RCHDC proposes to develop and provide property management services for an affordable housing development ("Development") within the jurisdiction of the City of Yreka funded by the Homekey Program (“Homekey”), with at least a portion of the units dedicated to house individuals experiencing homelessness that are eligible under Homekey; WHEREAS, Homekey is administered by the California State Department of Housing and Community Development ("HCD") and provides financing for the development of permanent supportive housing for individuals who are homeless, chronically homeless, or at-risk of chronic homelessness. The supportive housing is required to be linked with supportive services. The services assist the Homekey tenant to retain housing, improve his or her health, and increase his or her self-sufficiency;
WHEREAS, the City and RCHDC will jointly apply for Round 3 Homekey funds to HCD for the Development;
WHEREAS, the City and RCHDC will coordinate with the County of Siskiyou Behavioral Health Department (the “County”) to provide operating and services subsidies to the Development, and supportive services to Homekey tenants in the Development; and WHEREAS, the funding award will be made directly to RCHDC or an affiliate of RCHDC through agreements with HCD.

NOW, THEREFORE, the Parties mutually agree asfollows:

Section 1. Term
This MOU shall become effective immediately upon execution by the Parties and shall continue until start of construction of the Development, or until replaced by a new agreement between the Parties, whichever is earlier.

Section 2. Intent
The intention of this MOU is to outline the roles and responsibilities among the Parties and to coordinate their resources and efforts to provide permanent affordable housing to the Homekey target populations utilizing the supportive housing model within the City of Yreka. Supportive services are made available to Homekey eligible residents who may benefit from such services, to help them maintain stable housing and/or achieve improvements in health, wellness, recovery, 107 of 519
2 employment, income, socialization and quality of life.

Section 3. Guiding Principles
The Parties share the following principles that will guide the Parties under this MOU:
• All Parties shall work together, establish a foundation of trust and partnership, and provide seamless and high-quality services to each Homekey tenant, based on the Homekey tenant's individual needs.
• All Parties agree to provide permanent supportive housing that incorporates core Housing First Guidelines (CA Welfare and institutions Code, Section 8255). • All mental health services shall be client-driven and coordinated with the needs and wishes of the Homekey tenant.
• On-site and off-site supportive services provided by the County will be available to Homekey tenants on a voluntary basis.
• All Parties shall protect tenant privacy in the delivery of services. • The supportive services shall include linkage to community services.

Section 4. Scope of Services
A. Responsibilities of City

1. Co-apply for Round 3 Homekey funds with RCHDC.

2. Assist RCHDC in the preparation of the application for Round 3 Homekey funds.

3. Assist RCHDC in identifying an appropriate property for acquisition.

4. Assist RCHDC is securing all necessary planning permits for construction of the Development.

5. Collaborate with the County to secure a County commitment of PLHA funds for the Development.

B. Responsibilities of RCHDC

1. Development, Construction, and Property Management. RCHDC will:
a. Legally organize an affiliated single purpose entity to own and operate the Development.
b. Have sole duties and responsibility for the successful development, operation, and management of the Development.
c. Ensure that the Development will meet all Homekey requirements in its design, construction, and operation.
d. Ensure the design and construction of the Development will meet ADA requirements for accessibility.
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3 e. Comply with prevailing wage laws regarding the payment of prevailing wages, if required by lenders. In addition to any other indemnification provision of this MOU, RCHDC shall indemnify and hold the City harmless from and defend the City against any and all claims of liability for any failure by RCHDC arising in part or in whole from its agents, contractors, or employees' failure to pay prevailing wages for work on the project or to comply with the duties proscribed by this section.
f. On an annual basis, execute a management contract with a bonded and licensed property management agent. RCHDC shall ensure the property management contract includes copies of the Homekey Regulatory Agreement(s) and are made a part of the contract.
g. Provide a unit and office space within the Development for an on-site property manager.
h. Monitor and provide oversight of property management and ensure compliance with applicable local, State, and Federal statutes and regulations governing Fair Housing and tenant's rights.
i. Provide a 30-day written notice to the City prior to change in property management.

Any such change may need prior approval by the City, HCD, and other interested lenders.

2. Outreach, Application & Screening of Tenants. RCHDC will:
a. Dedicate Homekey assisted units in accordance with the Homekey Standard Agreement from HCD for eligible Homekey tenants.
b. Develop a Community Outreach and Marketing Plan for the Development. The Plan shall comply with applicable local, State and Federal Fair Housing regulations and shall use the Coordinated Entry System (CES) for Homekey assisted units for tenant referrals. Develop an on-site wait list for non-supportive housing units, if applicable, which includes procedures to administer the wait list, and ongoing maintenance of the wait list.

3. Ongoing Tenancy. RCHDC will:
a. RCHDC will provide, directly or by contract, on-site supportive services that meet Homekey requirements. Social services may include, but are not limited, to the following:
• Services Coordination
• Case Management
• Mental Health Services
• Benefit/Entitlement Assistance
• Health and Wellness Services
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4 b. Shall ensure RCHDC notifies County staff and the local Coordinated Entry System Committee when new units under construction are placed into service and/or when vacancies occur in Homekey funded units.
c. Develop and maintain a clear separation of responsibilities and duties between property management and supportive services.
d. Collaborate with the County to help Homekey tenants resolve issues as they emerge.
e. Provide regular training for on-site property management staff in advanced safety precautions, including first aid, crisis management, conflict de-escalation and other skills.

4. Communication and Reporting. RCHDC will:
a. Provide on-site office space for County and community service agencies to conduct individual and confidential meetings with Homekey tenants. b. Comply with the necessary documentation and reporting requirements and guidelines as established by the City, County, HCD and other project lenders.
c. Submit an annual audit prepared by a certified public accountant in accordance with commonly accepted accounting standards.

Section 5. Compensation for Services
There shall be no compensation among the Parties hereto for services provided under this Memorandum of Understanding. Fees for services provided under the property management contract, however, will be paid from operations of the Development to the property manager in accordance with the contract between the single-asset entity that owns the Development and RCHDC in its capacity as property manager.

Section 6. Financial Records
All Parties shall maintain financial, programmatic, statistical and other supporting records of its operation and financial activities in accordance with State and Federal requirements and thissection. All records shall be open to inspection by, and may be audited by, the authorized representatives of the City, County, and any State and/or Federal governing agencies. This provision shall survive the termination, expiration, or cancellation of this MOU.

Section 7. Termination of this MOU
Either City or RCHDC may terminate this MOU upon breach of this MOU by the other Party. A written notice of such breach must be given, and if the noticed Party fails to cure such breach to the reasonable satisfaction of the notifying Party within thirty (30) days of delivery of the notice 110 of 519
5 of breach, or such extended period as is agreed necessary to cure the breach, such termination by the noticing Party shall be effective at the end of the cure period if no cure has been affected.

In addition, the following occurrences will give City the right to terminate this MOU:

A. A petition is filed for voluntary or involuntary bankruptcy by or on behalf of RCHDC, which petition not dismissed within sixty (60) days.

B. RCHDC makes a general assignment, or RCHDC's interests hereunder are assigned involuntarily or by operation of law, for the benefit of creditors.

C. Abandonment of the Development by RCHDC.

Section 8. Changes to MOU
A. This MOU may be amended by written mutual consent of the Parties hereto. Said amendments shall become effective only when in writing and fully executed by duly authorized officers of the Parties hereto and any required third party consents have been obtained.

B. All notices to be given by the Parties hereto shall be in writing, served by depositing same in the United States Post Office, postage prepaid, return receipt requested or by overnight delivery service such as Federal Express.

Notices to the City shall be addressed as follows:

City Manager
City of Yreka
701 4th Street 96097
Yreka, California
Alternatively, to such other location asthe City directs. Notices to RCHDC shall be addressed as follows:

Chief Executive Officer
Rural Communities Housing Development Corporation (RCHDC) 499 Leslie Street
Ukiah, CA 95482
Alternatively, to such other locations as RCHDC directs.

Section 9. Miscellaneous Provisions
A. SEVERABILITY: If any provisions in the MOU are held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalid in any way.

B. DELEGATION AND ASSIGNMENT: RCHDC shall not delegate its duties or assign its rights under this MOU, or both, either in whole or in part, without prior written consent of the City, and any prohibited delegation or assignment shall be null and void; provided, 111 of 519
6 however, no consent is required for RCHDC to assign its rights and duties as development sponsor and owner under this MOU to an affiliated single purpose entity whose purpose is to provide for the continued development, ownership, and operation of the Development.

C. ENTIRE AGREEMENT: This document and the documents referred to herein or exhibits hereto are the entire MOU between the Parties and they incorporate or supersede all prior written or oral Agreements or understandings.

D. COMPLIANCE and NON-DISCRIMINATION: All Parties warrant and certify that, in the performance of the MOU, they shall comply with all applicable laws, rules, regulations and orders of the United States, the State of California, the City of Yreka, and the County of Siskiyou, including the laws and regulations pertaining to labor, wages, hours and other conditions of employment. All Parties further warrant and certify that they shall comply with new, amended, or revised laws, regulations and/or procedures that apply to the performance of the MOU.

RCHDC shall not discriminate in employment practices or in the delivery of services on the basis of race, color, creed, religion, national origin, sex, age, marital status, sexual orientation, medical condition (including cancer, HIV, and AIDS) physical or mental disability, use of family care leave under either the Family & Medical Leave Act or the California Family Rights Act, or on the basis of any other status or conduct protected by law.

RCHDC and represents that RCHDC is in compliance with and agrees that RCHDC shall continue to comply with the Americans with Disabilities Act of 1990 (42 U.S.C. sections 12101, et seq.), the Fair Employment and Housing Act (Government Code sections 12900, et seq.), and regulations and guidelines issued pursuant thereto.

E. HOLD HARMLESS-INDEPENDENT PROJECT SPONSOR/DEVELOPER AND PROPERTY MANAGEMENT: It is understood and agreed by Partiesthat RCHDC is an independent entity and that no relationship of employer-employee exists between the Parties hereto outside of what is explicitly declared and outlined in this MOU. RCHDC shall not be entitled to any benefits payable to employees of City, including City Workers' Compensation Benefits. The City is not required to make any deductions from the compensation payable to RCHDC under the provisions of the MOU; and as an independent entity, RCHDC hereby holdsthe City harmless from any and all claims that may be made against City based upon any contention by any third party that an employeremployees relationship exists by reason of this MOU.

F. LICENSES, PERMITS, REGISTRATIONS, ACCREDITATIONS, AND CERTIFICATES: RCHDC officers, employees, and agents, and subcontractors performing the work or services required by this MOU, shall obtain and maintain in effect all necessary licenses, permits, certificates, and credentials required by the laws of the United States, the State of California, the City, the County, and all other appropriate governmental agencies, including any certification and credentials required by the City.

Failure to maintain the licenses, permits, certificates, and credentials shall be deemed a 112 of 519
7 breach of this MOU and constitutes grounds for the termination of this MOU by the City.

G. CONFLICT OF INTEREST: RCHDC officers and employees shall not have a financial interest, or acquire any financial interest, direct or indirect, in any business, property, or source of income that could be financially affected by or otherwise conflict in any manner or degree with the performance of the work or services required under this MOU.

Section 10. Insurance and Indemnification
A. RCHDC shall defend, indemnify, and hold the City, its officers, agents and employees, free and harmless from any claim and/or liability whatsoever, including wrongful death, based or asserted upon any acts or omission of RCHDC, its agents, representatives, employees, and subcontractors, relating to or in any way connected with or arising from the performance of the work under this MOU by RCHDC, its agents, representatives, employees, and subcontractors.

B. Without limiting RCHDCs indemnification of the City, RCHDC shall procure and maintain for the duration of this agreement, insurance against claims for injuries to persons or damages to property that may arise from, or be in connection with the performance of the work hereunder by RCHDC, RCHDC's agents, representatives, employees, and subcontractors. At the very least, RCHDC shall maintain the insurance coverage, limits of coverage and other insurance requirements as described in Standard Insurance Requirements for City contracts (Attachment 1), which by reference is incorporated hereto. Certificates evidencing the maintenance of RCHDC's insurance coverage shall be filed with the City.

Section 11. Choice of Law; Jurisdiction and Venue
This MOU is to be construed under the laws of the State of California. The Parties agree that venue is proper in state and federal courts having jurisdiction in the City of Yreka, County of Siskiyou, State of California.

Section 12. Signatures
All Parties mutually agree to fully, and faithfully perform all applications set forth in this MOU.

All parties agree to have their duly authorized signatories sign this MOU. [SIGNATURE PAGE FOLLOWS]
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8 IN WITNESS WHEREOF, the parties hereto have executed this MOU in the County of Siskiyou, State of California, on the dates set forth below, and each signatory represents that he/she has the authority to execute this agreement and to bind the party on whose behalf his/her execution is made.

Rural Communities Housing Development Corporation
By: _________________________________________ _________________ Date
Name: _______________________________________
Title: ________________________________________
City of Yreka
By: ___________________________________________ __________________ Jason Ledbetter Date
City Manager
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Attachment 1

CITY OF YREKA

STANDARD INSURANCE REQUIREMENTS
Workers' Compensation:

Indemnification:

General Liability and Automobile Insurance:

Certificate of Insurance and Endorsements:

Professional Liability:
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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
Prepared by: Jason Ledbetter, City Manager
Juliana Lucchesi, AICP, Community Development Director
Agenda Title: 9d. Authority to Negotiate a Memorandum of Understanding with Danco for Affordable Housing Tax Credit project.

Meeting date: May 16, 2023
Recommended Action:

Motion to Adopt Resolution 2023-25 Authorizing the City Manager to negotiate and enter into a Memorandum of Understanding with Danco as an affordable housing project developer.

Summary:

The adopted 2023-2031 Housing Element includes goal HE-2 that aims to create at least 250 workforce housing units within Yreka by 2030. In order to meet this goal, a master housing developer is needed to help the city and private property owners navigate the affordable housing financing structure and develop specialized housing units, such as low income, workforce, special needs, and the City of Yreka released a Request for Qualifications (RFQ) for Affordable Housing Developers with experience in Homekey Developments February 2022 through April 5, 2023. The RFQ process produced three proposals from qualified firms. Out of the three, Housing Tools and City Staff recommend moving forward with Danco Development Corporation (Danco) as a partner in developing and implementing affordable housing projects in Yreka.

Project Description:

City Staff prepared a RFQ to solicit statements of qualifications from qualified affordable housing developers that have experience applying, developing, and implementing a HomeKey project and affordable housing projects (Attachment 2). We received three statements of qualifications from housing developers. Two of the submissions had extensive experience with affordable housing projects and Homekey in the previous two rounds of funding. These developers, RCHDC and Danco, were interviewed by City and Housing Tools staff to determine which developer would be able to 1) understand the building environment of Yreka, 2) quickly on-board with Housing Tools to submit a Homekey application in cycle 3, 116 of 519
and 3) implement and manage the Homekey project long-term in a way that would not negatively impact the community.

After the interview process, City and Housing Tools staff agreed that Danco has significant affordable housing development and management experience.

Danco would be able to assist the city and private developers with preparing housing developments that meet the City’s goal of 250 units.

Environmental Review:

Fiscal Impact:

Negotiating and signing a MOU with Danco will not result in any fiscal impacts to the city. Each project will be required to develop and present a specific budget if requesting city funds that will be reviewed by the City Council on an individual basiis.

Staff Recommendation:

City Staff recommend authorizing the City Manager to enter into a Memorandum of Understanding with Danco based on the developer scoring the second highest in the review process.

Attachments:

1. CCR-2023-24 “Resolution of the City Council of the City of Yreka Authorizing City Manager to Negotiate and Enter into a Memorandum of Understanding with Danco as an Affordable Housing Project Developer ”

2. Request for Qualifications

3. Danco Proposal

4. Draft Memorandum of Understanding
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RESOLUTION NO. 2023-25

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YREKA

AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND ENTER INTO A

MEMORANDUM OF UNDERSTANDING WITH DANCO AS AN AFFORDABLE

HOUSING PROJECT DEVELOPER
WHEREAS, the City of Yreka is desirous of stimulating affordable housing within the City of Yreka; and
WHEREAS, over 58% of the City’s residents are classified as moderate (20%) low (18%), very low (7%) and extremely low (13%) income households will benefit from affordable housing options, and
WHEREAS, the City of Yreka desires to enter into an agreement with the Danco Group to provide services as a Low-Income Housing Project Developer for the City of Yreka; and;
WHEREAS, the Danco Group, based in Arcata, CA offers development, construction, and property management services throughout the State of California, and has an extensive project resume in northern and southern California, and WHEREAS, the City and Danco recognizes that community engagement is a huge part of what makes these housing projects work, and where each project considered will be approved by the City Council, and;
WHEREAS, Housing Tools the City’s housing consulting service provider and City staff have evaluated proposals from the City’s Request for Qualifications based on criteria that evaluated Danco’s organizational experience and qualifications, staff experience and qualifications, portfolio of properties, proposed work plan financial health, and found Danco to be highly qualified to perform developer services and, 118 of 519
WHEREAS, the members of the City Council find it to be in the best interests of the City to authorize the City Attorney and City Manager to negotiate with Danco to execute a memorandum of understanding document.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YREKA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. The Council hereby finds and determines that the foregoing recitals are true and correct, and the City Council finds it to be in the best interests of the City to authorize the City Attorney and City Manager to negotiate with Danco to execute a memorandum of understanding documents is hereby approved.

Section 4. This resolution shall take effect immediately upon its passage.

Passed and adopted this 16th day of May 2023, by the following vote:

AYES:

NAYS:

ABSENT:

ABSTAIN:
________________________
Corey Middleton, Mayor
Attest:__________________
Rhetta Hogan,
City Clerk
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City of Yreka

REQUEST FOR QUALIFICATIONS
Affordable Housing Developer
RFQ No. 23-03
Deadline for Submission: April 5, 2023
Prepared for:

City of Yreka
Planning Department
701 4th Street
Yreka, CA 96097
RFQ Contact:

Juliana Lucchesi AICP, Planning Director
(530) 841-2324
[email protected]
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City of Yreka RFQ— Affordable Housing Developer
Table of Contents
A. Intent of the RFQ 1
B. Background 3
C. Timeline 4
D. Submission Requirements 5
E. Evaluation 7
F. Terms 9
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City of Yreka RFQ— Affordable Housing Developer 1
A. Intent of the RFQ
The intent of this Request for Qualifications (RFQ) is to request Statements of Qualification (SOQ) from housing developers (Respondents) and based on a review of submissions, select a Respondent who the City of Yreka (the “City”) will partner with to produce affordable rental housing. The City completed its 2023-2031 Housing Element to the General Plan, in which it has identified a need for a diversity of housing types:
• Affordable to Low, Very Low, and Extremely Low Income households • Persons experiencing homelessness
• Seniors on fixed income
• Persons with a disability
• Workforce housing
The Housing Element establishes various Programs intended to address these needs, which include the following:
• Reduction of regulatory barriers to the development of higher density and special needs housing;
• Streamlined review and approval of permits;
• Implementation of impact fee waivers or deferrals for affordable housing; • Consider amending the municipal code to allow for by-right conversion of existing motels and hotels to permanent housing;
• Completion of a site inventory that identifies opportunities for multi-family residential development; and
• Support the development of workforce and affordable housing through site identification, assisting with funding applications, land donation, expedited permit review, approval of density bonus requests, direct funding, and other incentives.

The final draft of the City of Yreka 2023-2031 Housing Element may be found at https://ci.yreka.ca.us/164/Planning.

The City has completed a Housing Site Inventory, in which 14 different sites have been identified and assessed for development feasibility of affordable rental housing. Of these sites, 12 vacant sites have been identified, assessed, and ranked according to feasibility for new construction projects financed by tax credits, and 2 motel sites have been identified, assessed, and ranked according to feasibility for acquisition and rehabilitation projects financed by the State Homekey Program (Homekey). The Housing Site Inventory may be found at https://ci.yreka.ca.us/273/RFPs-Bids. The City has contracted with consultant Housing Tools to complete the Housing Site Inventory, develop this RFQ, and facilitate collaboration between the City and the selected Respondent with the end goal of constructing affordable housing. 122 of 519
City of Yreka RFQ— Affordable Housing Developer 2
It is the City’s intent to work with the Respondent(s) selected through this RFQ to develop affordable housing, financed with tax credits or Homekey. Depending on the expertise and housing product specialization of each respondent, the City may choose to select more than one respondent. The City plans to support the selected Respondent’s projects by assisting with identifying and assessing feasible sites, property acquisition, providing local funding, deferring or waiving impact fees, facilitating necessary permit variances and density bonuses, streamlining the permit review process, providing technical assistance as needed, and assisting in applying for funding, which could include Homekey, the Infill Infrastructure Grant (IIG), the Affordable Housing and Sustainable Communities Program (AHSC), Competitive Permanent Local Housing Allocation (CPLHA), and/or State Community Development Block Grant (CDBG) or HOME funds.

Due to the State’s requirements for PLHA-funded projects, operating subsidies will be provided in the form of a low-interest deferred loan. Loan documents are subject to approval by the State and will include a Loan Agreement, a Promissory Note secured by a Deed of Trust, and a Regulatory Agreement for a term of at least 55 years. The selected developer will coordinate with the County for annual monitoring of the project which may include a site visit and written materials as directed by the County. The developer will be expected to share data and information as requested by the County, City, or State. 123 of 519
City of Yreka RFQ— Affordable Housing Developer 3
B. Background
The City of Yreka is located in the northern region of Siskiyou County, about 18 miles south of the California border with Oregon. It is the largest city in Siskiyou County, with an estimated 2020 population of 7,807 according to the U.S. Decennial Census. Siskiyou County’s estimated 2020 population was 44,076. Yreka’s population increased 8% from 2000 to 2020. Listed below are some other noteworthy demographic data points for Yreka. • According to the 2020 U.S. Decennial Census, the largest racial group that is Not Hispanic or Latino is White at 68.1% of the population, followed by Two or More Races at 8.4%, and American Indian or Alaska Native at 7.9%. An estimated 12.3% of the population is Hispanic or Latino.
• According to the U.S. Census 2015-2019 American Community Survey, the largest age cohort for the City as of 2019 was 65 years and older, with an estimated 1,514 persons (20% of the total population), followed by 25-34 years old with 1,217 persons (16.1% of the total population). Most of the population growth from 2000 to 2019 occurred in the 25-34 age cohort.
• According to the U.S. Census 2016-2020 American Community Survey, an estimated 19% of the population has a disability, and 39% of the population 65 years and older has a disability.
• According to the U.S. Census 2015-2019 American Community Survey, an estimated 1,245 Lower Income households (earning 80% or less of Area Median Income) were paying more than 30% of their income toward housing costs.

There are an estimated 3,402 households in Yreka per the 2015-2019 U.S. Census American Community Survey. According to the 2020 U.S. Decennial Census, the average household size is

2.21 person, and the average family size is 3.04 persons. Below are estimates of households by percent of Area Median Income (AMI).

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City of Yreka RFQ— Affordable Housing Developer 4
City of Yreka, Households by Income Group, 2019
Income Group Income Households Percent of Total
Extremely Low (Below 30% of AMI) <$12,745 445 13%
Very Low (30%-50% of AMI) $12,745-$21,242 239 7%
Low (50%-80% of AMI) $21,242-$33,987 598 18%
Moderate (80%-120% of AMI) $22,987-$50,980 667 20%
Above Moderate (Over 120% of AMI) >$50,980 1,453 43%
Total Households 3,402
Source: U.S. Census 2015-2019 American Community Survey An estimated 59% of units in Yreka are owner-occupied and 41% renter-occupied. The 2019 median income for households in owner-occupied units was $53,611, while the median income for households in renter-occupied units was $29,662 (U.S. Census 2015-2019 American Community Survey).

C. Timeline
Key dates for this RFQ are listed below.

RFQ released Mar. 6, 2023
Last day for Respondents to submit questions to the City Mar. 17, 2023 Q & A released Mar. 24, 2023
Statements of Qualifications due Apr. 5, 2023
Interviews Apr. 10-14, 2023
City selects preferred Respondent Apr. 28, 2023
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City of Yreka RFQ— Affordable Housing Developer 5
D. Submission Requirements
D.1. Content
Format the SOQ in 12-point font on 8.5” x 11” pages with 1” margins, organized as laid out below.

3. Staff Experience and Qualifications (max 3 pages, not including Attachments)— Provide the following information for the entity submitting the SOQ:
• Number of staff and organizational structure
• Org chart
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City of Yreka RFQ— Affordable Housing Developer 6
• Description of the staffing roles and responsibilities for development, transition to operations, and asset management, and identify who would be the primary point of contact for coordination with the City
• Experience and qualifications for each member of the housing development staff and any other staff person that will work on projects in Yreka • Include resumes for key staff in the SOQ Attachments section labeled “Attachment C:

Resumes”

Describe the preferred financial structure(s) and what steps need to be taken to assess feasibility. Describe the plan to sustainably operate the project and maintain improvements in good condition. Include a work plan timeline with key dates. 127 of 519
City of Yreka RFQ— Affordable Housing Developer 7
D.2. Submission
By no later than 5:00 PM on April 5, 2023, submit an electronic pdf copy of the SOQ to [email protected] at:

E. Evaluation
E.1. Threshold Requirements
In order to submit a SOQ, Respondents to this RFQ must have developed and owned at least one rental housing project in a rural California community. There is no single definition of “rural” so the Respondent may make a case as to why a particular California community is considered “rural.”
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City of Yreka RFQ— Affordable Housing Developer 8
E.2. Selection Criteria
The following selection criteria will be used to evaluate SOQs that respond to this RFQ.

Criteria

1. Threshold— Each SOQ submitted by the submission deadline will be reviewed for completeness and meeting Threshold Requirements per Section E.1. of this RFQ.

2. Scoring— Each SOQ that is complete and meets Threshold will be scored by the Selection Criteria as outlined in Section E.2. of this RFQ.

Interviews may or may not have their own separate scoring during the evaluation 129 of 519
City of Yreka RFQ— Affordable Housing Developer 9
process. If scoring is to be used for interviews, the scoring criteria will be shared ahead of the interviews.

F.3. Modification of SOQ
The City reserves the right to request any Respondent to clarify the submittal or to supply additional information necessary to assist in the selection process.

F.4. Rejection of Qualifications
The City reserves the right to reject any and/or all SOQs at its discretion for any reason. 130 of 519
City of Yreka RFQ— Affordable Housing Developer 10
F.5. Right to Negotiate and Limitations
The City reserves the right to negotiate with any qualified firm or to modify or cancel in part or in its entirety this RFQ if it is in the best interests of the City to do so. This RFQ does not commit the City to award a contract, to pay any costs incurred in the preparation of an SOQ for this RFQ, or to procure a contract for services with a Respondent.

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City of Yreka - Request for Qualifications - Affordable Housing Developer - RFQ No. 23-03
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The Danco Group of Companies’ mission is to provide safe and affordable housing while improving our communities and satisfying our customers. Danco Communities, the developer entity of the Danco Group of Companies, is excited to submit this proposal in hopes of being chosen by the City of Yreka for the development of affordable multi-family housing. The Danco Group is a diversified group of companies in the real estate and construction industries and offers a one‐stop shop for development, construction, and property management. We have over 35 years of successful business in these industries and offer a breath of knowledge and skill in developing affordable housing. We can be an effective partner with the County in accomplishing its goals of increasing the supply of affordable housing. We look forward to working with the County and drawing on our companies’ strengths as an industry leader in multiple domains to be able to produce more housing faster and less expensively by collaboratively developing innovative means to speed up construction and cut costs.

The fact that the Danco Group offers development, construction and property management services is a strength to us and our development partners. Each of our core teams works closely together throughout the life of a project, creating an environment of collaboration. The project team consists of Chris Dart, Leader of Danco Communities, McKenzie Dibble, Project Manager & Hailey Del Grande, Grant Manager.

The Danco Group would be honored by the opportunity to work with the City of Yreka. We are passionate about bringing affordable housing to populations in need all over the western United States. A more in‐depth narrative on our qualifications is contained in the body of this proposal.

Please reach out directly with any questions regarding this proposal to Hailey Del Grande, Grant Manager by phone (707) 825‐1580 or e‐mail, hdelgrande@danco‐group.com. 5251 Ericson Way
Arcata, CA 95521
Phone: (707) 822 9000
CA Lic #: 500851 & 899392
[email protected]
www.danco-group.com
To whom it may concern:

Respectfully Yours,
Daniel J. Johnson
President
5 April 2023
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Founded in 1986 by our President/CEO, Dan
Johnson, The Danco Group consists of seven
business entities: Danco Builders, Danco
Builders Northwest, Danco Communities,
Danco Property Management, Danco
Supportive Services, Danco Hospitality, &
Western Living Concepts. These seven
business entities make up “The Danco
Group”.

The Danco Group has over 25 years in
development experience in the Western
United States, which includes multi-family,
senior, & permanent supportive affordable
housing and senior assisted living/memory
care facilities.

Danco Communities, the affordable housing
development company within The Danco
Group, was formed to tackle the high
demand for quality affordable housing.

Danco Communities has completed over 18
affordable housing developments with two in
the early stages of construction. Danco
Communities has brought to market over
700 affordable units to date.

Out of all the units that Danco Communities
has brought to the market, a majority of the
units have been located in Northern Rural
California with projects located in Arcata,
Eureka, Rio Dell, Redway, Ft. Bragg, Ukiah
and more.

All of the Danco Group's projects are
managed by our in-house property
management company. All of the services on
the projects are serviced through a thirdparty contact. We have worked with companies such as LifeSTEPS, Operation
Dignity, and more.

2. Experience &
Qualifications
Mission of The Danco Group:
"We believe in seeking
opportunities that will offer
diverse and efficient assets
to our communities."
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The Danco Group's main office is located in Arcata, CA however we also have an office in Phoenix, AZ.

Danco Communities develops all types of housing: Family, Workforce, Senior and Permanent Supportive Housing. Over the last 5 years, Danco Communities has developed more Permanent Supportive Housing (PSH) as the need for this specific type of housing has become more urgent.

Danco Communities, has developed over 15 PSH projects with 9 of those being placed in service to date.

Danco Communities and Danco Property Management certify to employ the core components of Housing First, as set forth at Welfare and Institutions Code section 8255, in its property management and tenant selection practices.

Housing First is a philosophy that homelessness can be most efficiently ended by providing someone with access to safe, decent, and affordable housing. Danco understands that although an individual experiencing homelessness may benefit from supportive services such as mental health or substance abuse counseling, participation in these services is not a prerequisite to access housing or a condition of maintaining it. In fact, the stability that a housing unit provides bolsters a tenant’s ability to participate in these services. Danco Property Management works in collaboration with experienced Service Providers to ensure that we are always in line with the Housing First model and philosophies.

Danco understands the importance of the housing First program. Because of Danco’s experience and philosophy on affordable housing development and Permanent Supportive Housing, our company has been outstandingly supported on each project by local service providers, governments, and cities.

Community Engagement is a huge part of what makes these projects work. We like to include the community in the design process through a meeting which goes over design, color boards, services, etc. and give the community a change to comment on the project and give input to what they would like to see. This gives the community a chance to feel as if they are connected to the project.

A list of 10 of our properties developed are attached as Attachment A as well as the financial statements attached as Attachment B.

A list of projects in various development stages is below. 135 of 519
Rogers Garage
Buttermilk
NAPA
Sun Valley Housing
North Orchard
Oakland Telegraph - Mid Rise
Sacramento Mid Rise
Lassen - Fair Drive
Lassen - Parkside
Yuma
Payson
Crescent City Supportive Housing
Mount Shasta
Clearlake Single Family
Madrone Place
Ponderosa Village
Meridian at Corona Station
Alvarado Gardens
Vendra Gardens
Parlier
Blue Lake Affordable Housing
Placer
96 W. El Camino
Amador
Cussick Apartments
La Pine
Canby Road
MLK
Inn at Coliseum
Super 8 Homekey
Feasibility
Land Acquisition
Design/Entitlements/Financing Units Housing Type City
Mount Shasta, CA
Clearlake, CA
San Jose, CA
Santa Rosa, CA
Petaluma, CA
San Pablo, CA
Moorpark, CA
Parlier, CA
Blue Lake, CA
Redding, CA
Mountain View, CA
Sutter Creek, CA
Chico, CA
La Pine, OR
Redding, CA
Portland, CA
Oakland, CA
Sacramento, CA
Family
Family
Family
Family
Family
Family
Family
Family
Mixed Use
Family
Family
PSH
Senior
Family
Family
Family
PSH
PSH
25 22
154
80 132
100
200
80 50
64 79
50 80
60 150
100
36 126
Units Housing Type City
Arcata, CA
Arcata, CA
Napa, CA
Arcata, CA
Ukiah, CA
Oakland, CA
Family
Non Targted
Family
Farm Labor
Farm Labor
Family
50 30
120
50 55
60 60 Family Sacramento, CA
Units Housing Type City
Susanville, CA
Lakeport, CA
Yuma, CA
Payson, AZ
PSH
Family
Family
Family
50 64
80 50
30 Family Crescent City, CA
Danco Communities
Inventory of Projects
2023-2024
Brentwood Crossing
Acorn Valley Plaza
Eureka 7th & Myrtle
Mariposa Place
Oak Valley Villas
Central Sacramento Studios
West Village Studios
Construction Units Housing Type City
Bakersfield, CA
Ukiah CA
Eureka, CA
San Jose, CA
Clearlake, CA
Sacramento, CA
Farm Labor
Family
Senior
PSH
Family
PSH
57 71
36 80
50 100
84 PSH Arcata, CA
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3. Staff Experience & Qualifications
Danco Communities the development department of Danco is made up of 7 individuals. Chris Dart is the President of Danco Communities and holds the role of land acquisition, proforma strategy and leadership within the company. McKenzie Dibble is a Senior Project Manager.

Jayden Johnson is a Jr. Project Manager, Hailey Del Grande is our Cheif Grant Writer. Jordon Andrade is our development assistant. Laura Berreth and Michele Kerrigan are both on our Asset Management team. See Organization Chart below.

The Danco Communities team is also supported by a large accounting and administrative team and many subconsultants. The main point of contact with the City will be Hailey Del Grande, Chief Grant Writer.

Danco Communities staff is currently overseeing a large portfolio which includes 37 projects that are either in predevelopment stages up to currently under construction and an additional 25 that are currently being overseen by our asset management department. Our asset management department also oversees all financial draws that take place during construction and any installments that come in as well.

Please see attached resumes as Attachment C.
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Design Description
General Info
Awarded:

October 2019
Completion:

February 2022
Development Cost:
$22,097,249
AHSC, HOME, TCAC, City of Arcata
Funding Sources:

Property Management Company:

Danco Property Management

4. Portfolio:

Sorrel Place A 4-story affordable multi-family housing
project featuring 1-3 bedroom units. This family
project consists of 16 1 bedroom units, 17 2
bedroom units and 11 three bedroom units.

AMI's range from 30%-50% AMI.

Services on this project include cooking classes
as well as exercise classes.

This project in particular had environmental
challenges that were overcome due to old
vapors. A vapor barrier was installed under the
building.

Description
969 7th Street
Arcata, CA 95521
Amenities include a community lounge area,
kitchen, game room, playgrounds, patio area,
& on-site laundry room. Right in the heart of
downtown Arcata, this property is walking
distance away from local shops & restaurants.

This 4 story building is a net zero project
which also includes bus passes for the
residents. The parking on this project is very
minimal since it is a project funded with AHSC
funds.

Reference
City of Arcata
David Loya - Community Development Director
707-825-2045
[email protected]
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Design Description
General Info
Awarded:

July 2018
Completion:

May 2021
Development Cost:
$30,036,135
IIG, TCAC, Local Gap Financing
Funding Sources:

Property Management Company:

Danco Property Management
Portfolio:

Phyllis Rex Samoa
Townhomes 10 buildings composed of 3-4 stories which
includes a total of 80 units. These buildings
include a range of 1-4 bedroom units with AMI
levels ranging from 30%-50% AMI.

Services on this project include cooking classes
as well as exercise classes.

This project in particular was in the coastal
zone so there are tsunami measures in place
such as lower level garages with holes for
water to flow through.

Description
26 Samoa Coast Lane
Samoa, CA 95564
Amenities include a community lounge area,
kitchen, game room, playgrounds, patio area,
& on-site laundry room. There is also an on-site
facility for Open Door to offer services to
clients.

This 4 story building is a net zero project
which also includes bus passes for the
residents. The parking on this project is very
minimal since it is a project funded with AHSC
funds.

Reference
C
David Loya - Community Development Director
707-825-2045
[email protected]
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Design Description
General Info
Awarded:

July 2018
Completion:

May 2021
Development Cost:
$30,036,135
IIG, TCAC, NPLH, City of Eureka
Funding Sources:

Property Management Company:

Danco Property Management
Portfolio:

Bayview Heights A three-story building, Bayview Heights consists of 51 units which 50 are all permanent
supportive housing. All 50 units are studios
ranging from 30% AMI-40% AMI.

Services on this project include case
management and resident service
coordination.

This project in particular is a challenge in itself
being 100% PSH. We have extra security
measures, services, and intense management
on-site.

Description
108 4th Street
Eureka, CA 95503
Amenities include a community lounge area,
kitchen, game room, roof top patio area, & onsite laundry room. Right in the heart of downtown Eureka, this property is walking
distance away from local shops & restaurants.

This community also has community gardens
that the residents have added personal
touches to. The community gardens are a vital
part of our PSH properties.

Reference
City of Eureka
Kristen Goetz - Principal Planner
(707) 441 4166
[email protected]
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5. Proposed Work
Plan
At Danco Communities, we are
committed to developing affordable
multi-family rental and permanent
supportive housing to meet the needs of
low-income individuals and families in our
communities. Our approach to
development is driven by our
commitment to quality, sustainability,
and community engagement.

We will work closely with the City to
ensure we are creating a development
which the City and surrounding
community is proud of as well as the
project is meeting their needs and
concerns.

First off, Danco Communities sees this
partnership as a public-private
partnership where we will work with the
City as a team to ensure we are
establishing the most appropriate project
type, target population and all other
aspects of the project design.

Secondly, Danco would like to see the
project include some soft financing from
the City along with a deffered developer
Redding Canby
Apartments
Redding, CA
fee from Danco Communities. If the City is available to throw more money into the deal or purchase the land, we would also be open to that.

Finally, we believe that community engagement is essential to the success of our developments.

We work closely with residents, community organizations, and local businesses to ensure that our developments are integrated into the fabric of the community. This will include community engagement meetings to ensure we hear all concerns of the community. We are committed to providing safe, comfortable, and sustainable housing for all.

We would be looking to have a site, schematic design and all local environmental and planning applications done by the end of 2023 with hopes to apply for financing in 2024. 141 of 519
4/28/2023 - RFQ Awarded
7/1/2023 - City and Danco have secured a site for development 8/1/2023 - Initial Design is started for Entitlement Package 12/1/2023 - Project is Entitled
3/1/2024 - Apply for 9% Tax Credits
7/1/2024 - Award of 9% Tax Credits
1/1/2025 - Close on Construction Financing
1/1/2025 - Pull Building Permits
6/1/2026 - Completion of Construction
7/1/2026 - 100% Occupancy
The Danco Group's property management department, Danco Property Management, does an intensive operating plan prior to application to ensure we are budgeting appropriately. They use a mix of historical data and calling around to local utility companies to get ground assessments on what annual revenue the property will need to sustainably operate. In addition, The Danco Group's in-house construction team Danco Builders Northwest, is contracted to be our designbuild contractor. Since we have a related party contractor and property management company, we strive to have our buildings last as long as we can. We choose quality product to build with as well as furnish the buildings with.

A proposed project timeline is outlined below:
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Attachment A : Project Lists
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Name & Address Tax Credit
Project Housing Type Units PIS Date
Arcata Courtyards Phase I
3101 Boyd Rd, Arcata, CA 95521
Arcata Courtyards Phase II
3101 Boyd Rd, Arcata, CA 95521
Aster Place
2405 Aster Place, Eureka, CA 95501
Bayview Heights
108 4th St, Eureka, CA 95501
Church Hill Townhomes
2601 School St, Fortuna, CA 95540
Cottages at Cypress
330 Cypress St, Fort Bragg, CA 95437
Lodge at Eureka
428 8th St, Eureka, CA 95501
Monterey Gateway Apartments
6500 Monterey Rd, Gilroy, CA 95020
Plaza Point
977 8th St, Arcata, CA 95521
River Bluff Cottages
355 Center St, Rio Dell, CA 95562
Family
Family
Yes Family 64
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
PSH
Family
Senior
Senior & PSH
Senior & PSH
Senior
PSH
36 40
51 35
25 50
75 29
26 6/1/2004
6/29/2012
1/1/2003
4/30/2020
2/28/2013
2/25/2014
10/28/215
4/30/2020
6/19/2012
1/30/2020
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Attachment B : Entity Financial Audits
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Arcata Humboldt Associates, LP
A California Limited Partnership
Financial Statements
For the Years Ended December 31, 2021 and 2020
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Arcata Humboldt Associates, LP
December 31, 2021 and 2020

CONTENTS
Page
Financial Statements
Independent Auditors' Report 1
Balance Sheets 4
Statements of Income 5
Statements of Changes in Partners' Capital 6
Statements of Cash Flows 7
Notes to the Financial Statements 9
Supplementary Information Cover Page 18
Supplementary Information 19 - 21
Independent Auditors' Report on Compliance With Specific Requirements Applicable to NonMajor USDA GRRHP Program Transactions 21 Independent Auditors' Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination 23
RD Supplemental Information 24
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Independent Auditors' Report
To the Partners
Arcata Humboldt Associates, LP
Report on the Financial Statements
Opinion
We have audited the accompanying financial statements of Arcata Humboldt Associates, LP, a limited partnership, which comprise the balance sheets as of December 31, 2021 and 2020 and the related statements of income, changes in partners' capital, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arcata Humboldt Associates, LP as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Arcata Humboldt Associates, LP and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 4487 N. Dresden Place, Suite 101 · Boise, Idaho 83714 · Phone (208) 375-6490 · Fax (208) 375-6593 ·www.gbbaccounting.com 148 of 519
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, 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.

Auditors' 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 generally accepted auditing standards 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 omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, 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 generally accepted auditing standards, 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 Arcata Humboldt Associates, LP '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 Arcata Humboldt Associates, LP'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.
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Other Matters
Report on Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information referenced in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the financial statements as a whole.

Report on Other Legal and Regulatory Requirements
In accordance with the U.S. Department of Agriculture ("USDA") Guaranteed Rural Rental Housing Program ("GRRHP") Supplemental Government Auditing Standards Guide ("The Guide"), we have issued our report dated March 31, 2022 on our consideration of Arcata Humboldt Associates, LP's compliance with specific requirements applicable to a non-major USDA GRRHP program. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance with the Guide.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
March 31, 2022
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Arcata Humboldt Associates, LP
Balance Sheets
December 31, 2021 and 2020
2021 2020
Assets
Cash and Cash Equivalents $ 77,546 $ 77,313
Restricted Cash:

Tenant Security Deposits 31,230 30,467
Escrow Deposits 16,749 19,010
Replacement Reserve 232,841 213,229
Other Reserves 115,844 88,915
Rental Property, net 4,507,192 4,743,074
Total Assets $ 4,981,402 $ 5,172,008
Liabilities and Partners' Capital
Liabilities
Accounts Payable $ 12,614 $ 26,292
Accrued Interest Payable 216,206 187,237
Security Deposits Liability 33,640 31,105
Related Party Payables 245,954 284,834
Long-Term Debt, net 1,795,691 1,836,871
Total Liabilities 2,304,105 2,366,339
Partners' Capital
Partners' Capital 2,677,297 2,805,669
Total Liabilities and Partners' Capital $ 4,981,402 $ 5,172,008 The accompanying notes are an integral part of these financial statements. 4 151 of 519
Arcata Humboldt Associates, LP
Statements of Income
For the Years Ended December 31, 2021 and 2020
2021 2020
Operating Revenue
Gross Rental Income $ 551,345 $ 540,915
Net Rental Income 551,345 540,915
Miscellaneous Income (1,179) 3,449
Total Operating Revenue 550,166 544,364
Operating Expenses
Administrative Expenses 79,877 93,566
Utilities 93,354 96,787
Operating and Maintenance Expenses 153,004 106,210
Taxes and Insurance 14,555 21,135
Total Operating Expenses 340,790 317,698
Net Operating Income 209,376 226,666
Non-Operating Income (Expenses)
Interest Income 59 89
Interest Expense (109,885) (113,397)
Interest Reduction Payments Revenue 27,296 28,342
Depreciation Expense (235,882) (235,882)
USDA Guarantee Fee (6,132) (6,132)
Asset Management Fee (6,803) (6,691)
Partnership Management Fee (6,400) (6,400)
Total Non-Operating Income (Expenses) (337,747) (340,071) Net Loss $ (128,371) $ (113,405)
The accompanying notes are an integral part of these financial statements. 5 152 of 519
Arcata Humboldt Associates, LP
Statements of Changes in Partners' Capital
For the Years Ended December 31, 2021 and 2020
TPC Holdings I,
LLC
(BEG 2021 .01%)
(END 2021 49.995%)
Johnson &
Johnson
Investments, LLC
(BEG 2021 .01%)
(END 2021 49.995%)
Central
Valley
Coalition
for
Affordable
Housing
(.01%)
Alliant Tax Credit
Fund XXIV, Ltd
(BEG 2021 99.96%)
(END 2021 0.0%)
Alliant ALP I-30,
LLC
(BEG 2021 .01%)
(END 2021 0.0%)
Total
(100.00%)
Prior Year Activity
Balance, January 1, 2020 $ (249) $ (349) $ (348) $ 2,920,370 $ (350) $ 2,919,074 Net income (loss) for the period (12) (11) (11) (113,360) (11) (113,405) Balance, December 31, 2020 (261) (360) (359) 2,807,010 (361) 2,805,669 Current Year Activity
Capital Transfer 1,339,158 1,339,158 - (2,678,690) 374 - Net income (loss) for the period (12) (13) (13) (128,320) (13) (128,371) Balance, December 31, 2021 $ 1,338,885 $ 1,338,785 $ (372) $ - $ - $ 2,677,297 The accompanying notes are an integral part of these financial statements. 6 153 of 519
Arcata Humboldt Associates, LP
Statements of Cash Flows
For the Years Ended December 31, 2021 and 2020
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash Receipts
Rental Receipts $ 551,345 $ 540,915
Interest Receipts 59 89
Other Operating Receipts 26,117 31,791
Total Receipts 577,521 572,795
Disbursements
Administrative (55,989) (34,067)
Management Fee (38,703) (40,569)
Utilities (93,354) (96,787)
Operating and Maintenance (153,004) (106,210)
Real Estate Taxes (1,544) (2,612)
Property Insurance (11,265) (17,214)
Taxes and Insurance (1,746) (1,309)
Tenant Security Deposits 2,535 560
Interest on Mortgage and Notes Payable (75,172) (85,393) Partner Fees (19,630) (6,400)
USDA Guarantee Fee (6,132) (6,132)
Total Disbursements (454,004) (396,133)
NET CASH FLOWS PROVIDED BY (USED BY) OPERATING ACTIVITIES 123,517 176,662 CASH FLOWS FROM INVESTING ACTIVITIES:

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal Payments - Mortgage Payable (PNC/Midland) (46,924) (47,803) Principal Payments - Deferred Developer Fees Payable (31,316) (22,875) NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES (78,240) (70,678) Net change in cash, cash equivalents, and restricted cash 45,277 105,984 Cash, cash equivalents, and restricted cash at beginning of year 428,933 322,949 Cash, cash equivalents, and restricted cash at end of year $ 474,210 $ 428,933 The accompanying notes are an integral part of these financial statements. 7 154 of 519
Arcata Humboldt Associates, LP
Statements of Cash Flows (Continued)
For the Years Ended December 31, 2021 and 2020
2021 2020
Cash, cash equivalents, and restricted cash consist of the following:

Cash and Cash Equivalents $ 77,546 $ 77,312
Tenant Security Deposits 31,230 30,467
Escrow Deposits 16,749 19,010
Replacement Reserve 232,841 213,229
Other Reserves 115,844 88,915
$ 474,210 $ 428,933
Reconciliation of Net Income to Net Cash Flow Provided By (Used By) Operating Activities
Net Loss (128,372) (113,405)
Adjustments to reconcile net loss to net cash provided by (used by) operating activities
Depreciation 235,882 235,882
Amortization/Interest Debt Issuance Costs 5,744 5,744
(Increase) decrease in assets
Increase (decrease) in liabilities
Accounts Payable (13,677) 15,347
Accrued Interest Payable 28,969 22,260
Security Deposits Liability 2,535 560
Related Party Payables (7,564) 10,274
Net cash provided by (used by) operating activities $ 123,517 $ 176,662 The accompanying notes are an integral part of these financial statements. 8 155 of 519
Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

1. Organization
a. Partnership
The financial statements reflect the accounts of Arcata Humboldt Associates, LP (a California Limited Partnership) only and consequently, do not include all assets, liabilities, income and expenses of the partners.

The partnership was formed in 2002. The General Partners are: TPC Holdings I, LLC (.01%), Central Valley Coalition for Affordable Housing (CVCAH) (.01%) and Johnson & Johnson Investments, LLC (.01%). The Limited Partners are: Alliant Tax Credit Fund XXIV, Ltd (99.96%) and Alliant ALP I-30, LLC (.01%). To date the General Partners have contributed $100 and the Limited Partners $6,406,720. The partnership was formed for the purpose of constructing acquiring, owning, operating, managing, and selling or otherwise disposing of a 64-unit rural rental housing project in Arcata, California known as Arcata Courtyards Apartments. The project construction was completed in April 2004 when rental operations also began. The project operates in accordance with a regulatory agreement signed with the California Tax Credit Allocation Committee intended to keep the project in compliance with Section 42 of the Internal Revenue Code and qualify for the Federal Low Income Housing Tax Credit. Each building of the project must meet the provisions of these regulations (occupant eligibility and unit gross rent) in order to remain qualified to receive the credits.

Assignment and Assumption of Limited Partner Interest Effective December 23, 2021, TPC Holdings I, LLC and Johnson & Johnson Investments, LLC was assigned the ILP and SLP limited partnership interests and respective rights from Alliant Tax Credit Fund XXIV, Ltd and Alliant ALP I-30, LLC. The purchase price was $191,000.

2. Significant Accounting Policies
a. Accounting Method
The financial statements are prepared in accordance with generally accepted accounting principles in the United States, and conform in all material respects with International Accounting Standards with regards to the presentation of historical cost financial information. Under the accrual basis of accounting, income is recognized as earned and expenses as incurred, regardless of timing of payment. b. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and may have impact on future periods. c. Reclassifications
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.
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Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

2. Significant Accounting Policies (Continued)
d. Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents includes short-term investments and highly liquid investments in money market instruments which are carried at the lower of cost and market value with a maturity date of three months or less from the acquisition date. These are valued at cost which approximates market value.

Restricted cash is not considered cash and cash equivalents, and includes cash held with financial institutions for refunds of tenant security deposits, funding of operating deficits, and repairs or improvements to the buildings which extend their useful lives.
e. Rental Property
Rental property is carried at cost. Depreciation is calculated using the straight-line method over estimated useful lives ranging from 10 to 40 years. Depreciation expense for December 31, 2021 was $ 235,882 (2020 - $ 235,882).
f. Impairment of Long Lived Assets
The partnership reviews its rental property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When recovery is reviewed, if the undiscounted cash flows estimated to be generated by the property are less than their carrying amounts, management compares the carrying amount of the property to its fair value in order to determine whether an impairment loss has occurred. The amount of the impairment loss is equal to the excess of the asset’s carrying value over its estimated fair value. No impairment loss has been recognized during the years ended December 31, 2021 and 2020.
g. Debt Issuance Costs
Unamortized debt issuance costs of $74,241 and $79,985 at December 31, 2021 and 2020 are reported as a direct reduction of the obligation to which such costs relate. Amortization of debt issuance costs of $5,744 and $5,744 is reported as a component of interest expense and is computed using the straight-line method which is not significantly different than the effective interest method. h. Revenue Recognition - Rental Revenue and Receivable
The partnership retains substantially all of the risks and benefits of ownership of its rental properties and, therefore, accounts for leases with its tenants as operating leases. Rental revenue is recognized as rentals become due, net of provisions for uncollectible amounts. Rental payments received in advance are deferred until earned. All leases between the partnership and the tenants of the project are considered to be operating leases. Management considers receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been provided. If amounts become uncollectible, they are charged to operations in the period in which determination is made. U.S. generally accepted accounting principles ("GAAP") requires that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. 10 157 of 519
Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

2. Significant Accounting Policies (Continued)
i. Advertising Costs
Advertising and marketing costs are expensed as incurred. For years ending 2021 and 2020, advertising and marketing costs totaled $0 and $550, respectively.
j. Income Taxes
Under the provisions of the Internal Revenue Code and applicable state laws, the Partnership is not directly subject to income taxes; the results of its operations are includable in the tax returns of its partners. Therefore, no provision for income tax expense has been included in the accompanying financial statements. While no income tax returns are currently being examined by the Internal Revenue Service, tax years dating back three years remain open.
k. Economic Concentrations and Contingencies
The partnership operates on property located in Arcata, California. Future operations could be affected by changes in the economy or other conditions in that geographical area or by changes in federal low-income housing subsidies or the demand for such housing. The project's low-income housing tax credits and regulatory agreement require compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility, and/or unit gross rent, or to correct non-compliance within a specified time period could result in recapture of previously taken tax credits plus interest. In addition, such potential noncompliance may require an adjustment to the contributed capital of the limited partner. l. Financial Instruments
The partnership has determined that the estimated fair value of the financial assets and liabilities do not differ considerably from their book value.

3. Related Party Transactions
a. Partner Fees
An annual asset management fee of $4,700 (annual CPI adjustment) is payable to the limited partner. The partnership agreement provides for payment, to the Managing General Partner, of a cumulative annual Partnership Management Fee of $6,400, accrued and payable out of cash flow only.

The partnership agreement provides for payment, to the Administrative General Partner, of a non-cumulative Incentive Supervisory Management Fee of up to 80% of cash flow for management supervisory services (not to exceed 12% of gross revenues).
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Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

3. Related Party Transactions (Continued)
b. Developer Fee Payable
A developer fee of $1,070,443 was accrued to an affiliate of the general partner upon completion of the project in 1999. The general partner guaranteed construction completion and any development deficits by agreeing to defer a portion of the fee that could not be paid out of all sources of debt and equity until sufficient cash flows for payment could be generated from operations. The partnership agreement provides that if the developer fee has not been paid in full by the thirteenth (13th) anniversary of the occurrence of Completion (4/30/2017), the General Partners will make a loan within ten days thereafter to allow payment in full. None has been made to date.
c. Operating Cash Flow
Cash flow, which means the excess of Cash Receipts over Cash Expenditures as determined for each fiscal year or portion thereof, shall be distributed in the following order of priority as defined by the partnership agreement.

1. To the Limited Partner for any unpaid tax credit shortfall.

2. To the Partners for any unpaid interest and then principal on loans.

3. To pay any unpaid asset management fees due to the limited partner.

4. To pay any unpaid Partnership management fee.

5. To pay any unpaid deferred developer fees.

6. To the general partner as a supervisory management fee (up to 80%) to the administrative general partner - remaining funds shall be distributed 99.96% to the limited partner, and 0.01% to the administrative limited partner, TPC Holdings, Johnson & Johnson, and the MGP each. d. Guarantees
Operating Deficit Guaranty - The general partner (and affiliates of the general partner) will provide funds to the partnership necessary to pay any operating deficit in the form of a loan to the partnership. The general partner has been providing the funds as a operating deficit guarantee fee instead. The operating deficit guarantee period begins after the achievement of the "Rental Achievement Date", as defined by the partnership agreement, and ends on the third anniversary of the "Rental Achievement Date". The break-even date has been determined as August 2004.

Recapture Guaranty - The general partner has guaranteed to reimburse the limited partners for certain amounts in the event there is a "Tax Credit Recapture Event", as defined in the partnership agreement.

Replacement Reserve Guaranty - The general partner guarantees that they will contribute to the partnership any funds required to ensure that $12,800 per year is funded into a replacement reserve account. 12 159 of 519
Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

3. Related Party Transactions (Continued)
e. Related Party Receivables/Payables
Amounts due from and due to related parties are as follows:
2021 2020
Due to related parties
Deferred Developer Fee Payable $ 218,634 $ 249,950
Asset Management Fee Payable 6,803 13,230
Partnership Management Fee Payable 6,400 6,400
Due to related entity - Arcata Courtyards II - 2,536
Due to GP affiliates - Danco Builders/Danco Property Management 14,117 12,718 Total $ 245,954 $ 284,834
f. Construction Contract
The project was built by an affiliate of one of the General Partners. The construction contract was for $6,167,368 and is capitalized as part of the building costs. g. Operational Expenses
The property is now managed by an affiliate of one of the General Partners (Danco - see note 3.h.). Payroll is not based upon actual expenses, and is instead based upon budgeted rates, regardless of time spent. Danco is also responsible for a large number of operations and maintenance expenses mostly billed at budgeted rates as opposed to actual time involved although some expenses are reimbursements of actual expenses (office supplies, gardening service, maintenance, maintenance supplies/materials, service & repairs) totaling $74,406.
h. Property Management Fees
Effective October 1, 2011 the property is managed by Danco PM, who is affiliated with one of the General Partners. The management agreement calls for a management fee of 7.5% of collected rent. Management Fees of $38,703 and $40,569 were incurred at during 2021 and 2020, respectively. 13 160 of 519
Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

4. Rental Property
Rental property consists of the following:
2021 2020
Land $ 454,442 $ 454,442
Buildings 8,221,287 8,221,287
Office Furniture and Equipment 239,172 239,172
Total cost 8,914,901 8,914,901
Accumulated Depreciation (4,407,709) (4,171,827)
Total Rental Property, net $ 4,507,192 $ 4,743,074

5. Restricted Cash
a. Cash Reserve Account
The partnership agreement requires the establishment of a capital replacement reserve account with contributions by the partnership of $285 per unit per year ($18,240), while the HOME regulatory agreement requires $391 per unit per year ($25,044). Funding began with the closing of the permanent loan. The Lender requires monthly deposits of $1,778 ($25,311.74 annually). The deposits will be released to the partnership upon requests for capital replacements. The balance in the lender account was $176,659 and $157,047 at December 31, 2021 and 2020, respectively.

A second reserve account was established in 2007 to account for the difference in the reserve requirements of the perm loan vs. the HOME loan. The balance in the second account was $56,182 and $56,182 at December 31, 2021 and 2020, respectively.
b. Tenant Security Deposits
Tenant security deposits are required to be maintained in separate accounts in banks insured by FDIC. The balance on December 31, 2021 and 2020 was $31,230 and $30,467 respectively. The balance on December 31, 2021 was under funded by an immaterial amount of $2,410. c. Tax and Insurance Account
The permanent loan requires an impound account for insurance. The monthly amount required as of December 31, 2021 was $751.
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Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

5. Restricted Cash (Continued)
d. Other Reserves Account
The HOME loan regulatory agreement required an initial deposit of $4,900 plus 3% of annual operating expenses, to be established in a reserve but states it can be held as a sub account within the general operating account but was held in a separate account at December 31, 2021 and 2020 with a balance of $52,351 and $52,346.

The mortgage company impounds the interest credit income. The balance at December 31, 2021 and December 31, 2020 was $55,638 and $28,342.

The permanent loan requires an account for the payment of the USDA Guarantee Fee. The balance at December 31, 2021 and 2020 was $7,855 and $8,227 respectively. e. Restricted Account Activity
Replacement
Reserve T & I Account Other Reserves
USDA Guarantee
Fee Reserve
Interest Credit
Subsidy Reserve
Prior Year Activity
Balance, beginning of period $ 183,880 $ 18,348 $ 52,391 $ 8,116 $ - Deposits 29,309 17,876 - 6,243 28,342
Interest 65 - 25 - -
Withdrawals (25) (17,214) - (6,132) -
Balance, end of period 213,229 19,010 52,416 8,227 28,342 Current Year Activity
Deposits 19,558 9,888 - 5,561 27,296
Interest 54 398 - - -
Withdrawals - (12,547) (65) (5,933) -
Subtotal, current year activity 19,612 (2,261) (65) (372) 27,296 Balance, end of period $ 232,841 $ 16,749 $ 52,351 $ 7,855 $ 55,638 15 162 of 519
Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

6. Long-Term Debt
a. Mortgage and Notes Payable
2021
Interest
Payable
2021
Principal
2020
Interest
Payable
2020
Principal
Midland Mortgage Payable
The Midland mortgage payable closed December 7, 2004 for $1,650,000. It matures December 2034, bears interest at 7.11%, and is secured by the real property and an assignment of rents from the limited partnership. The loan is backed by guarantee from USDA for 90% and is subject to loan guarantee. There is also an USDA-RD interest rate guarantee on this loan which means the federal government provides a yearly interest subsidy which effectively reduces the interest rate to the AFR at time of loan closing. This subsidy is not accrued and is usually received in the second quarter for the previous year. The monthly payments are $11,099.66 prior to the interest credit subsidy. Interest expense for 2021 totaled $81,881 (2020 - $85,393).
$ - $ 1,127,932 $ - $ 1,174,856
HOME Loan City of Arcata
The HOME loan with the City of Arcata was dated April 19, 2005 for $742,000 and matures 4/30/2044 . The interest rate is 3% with payments of 50% of residual receipts only. Residual receipts are operating income in excess of operating expenses and other cash requirements like principal and reserves. No principal payments are anticipated during the next five years. Interest expense for 2021 totaled $22,260 (2020 - $22,260).
216,206 742,000 187,237 742,000
Subtotal Interest and Principal 216,206 1,869,932 187,237 1,916,856 Less: Unamortized Debt Issuance Costs (74,241) (79,985) Total Long-Term Debt, net $ 216,206 $ 1,795,691 $ 187,237 $ 1,836,871 16 163 of 519
Arcata Humboldt Associates, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

6. Long-Term Debt (Continued)
b. Schedule of Principal Maturities
The principal payments per annum on the mortgages and notes payable are due as follows:
2022 $ 55,084
2023 59,131
2024 63,475
2025 68,138
2026 73,143
Subsequent 1,550,961
Total $ 1,869,932

7. Subsequent Events
Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date, require disclosure in the accompanying notes. Management evaluated the activity of the partnership through March 31, 2022 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.

8. Federal Low-Income Housing Tax Credits
The partnership was allocated low-income housing tax credits by the California Tax Credit Allocation Committee amounting to $6,396,590 federal tax credits. The tax credits were fully utilized by the partners in 2014 and there are no remaining federal tax credits available in the future.

9. Commitments and Contingencies
The partnership has qualified for low-income housing tax credits which are contingent on its ability to remain in compliance with the applicable requirements of Section 42 of the Internal Revenue Code. Failure to maintain compliance with occupant eligibility, and/or unit gross rent or to correct non-compliance within a specific time period, could result in recapture of previously issued tax credits plus interest. In addition, under the terms of the Limited Partnership Agreement, such potential non-compliance could require a refund of previously contributed capital by the Investor Limited Partner.
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Arcata Humboldt Associates, LP
For the Years Ended December 31, 2021 and 2020
Schedule of Operating Expenses
2021 2020
Administrative Expenses
Advertising and Marketing $ - $ 550
Office Expenses 5,375 5,163
Property Management Fees 38,703 40,569
Manager or Superintendent Salaries 28,179 41,095
Legal Expense - Project 83 (24)
Audit Expense 4,875 4,825
Miscellaneous Administrative Expenses 2,662 1,388
Total Administrative Expenses 79,877 93,566
Utilities
Electricity 6,968 8,066
Water 41,378 45,341
Gas 976 788
Sewer 44,032 42,592
Total Utilities 93,354 96,787
Operating and Maintenance
Payroll 32,619 23,982
Supplies 17,287 11,634
Contracts 37,431 21,649
Garbage and Trash 50,806 39,827
Miscellaneous Operating and Maintenance Expense 14,861 9,118 Total Operating and Maintenance 153,004 106,210
Taxes and Insurance
Real Estate Taxes 1,544 2,612
Property & Liability Insurance (Hazard) 11,265 17,214
Miscellaneous Taxes, Licences, Permits, & Ins 1,746 1,309 Total Taxes and Insurance 14,555 21,135
Total Operating Expenses $ 340,790 $ 317,698
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Arcata Humboldt Associates, LP
For the Years Ended December 31, 2021 and 2020
Cash Flow Available for Distribution
The calculation of cash flow available for distribution is as follows:
2021
Net Cash Provided by Operating Activities $ 123,517
Add:

Partner Fees Paid 19,630
Deduct:

Principal Payments of Long-Term Debt (46,924)
Change in Replacement Reserve Accounts (21,390)
Change in Operating Reserve 367
Change in Mortgage Escrow Accounts 2,261
Change in Tenant Security Deposits (763)
Cash Flow Available for Distribution $ 76,698
Distribution of Available Cash Flow
Cash flow available for distribution from 2021 will be distributed in 2022 as follows:
2021
Asset Management Fee Payable $ 6,803
Partnership Management Fee Payable 6,400
Deferred Developer Fee Payable 63,495
Total $ 76,698
20 167 of 519
Independent Auditors' Report on Compliance With Specific Requirements Applicable to a Non-Major USDA GRRHP Project
To the Partners of Arcata Humboldt Associates, LP:

Compliance
We have audited the financial statements of Arcata Humboldt Associates, LP as of and for the year ended December 31, 2021, and have issued our report thereon dated March 01, 2022.

In connection with that audit and with our consideration of Arcata Humboldt Associates, LP's internal control used to administer USDA GRRHP, as required by the GRRHP Supplemental Government Auditing Standards Guide ("Guide") issued by the USDA Rural Housing Service, we selected certain transactions applicable to certain nonmajor USDA GRRHP for the year ended December 31, 2021.

Auditor's Responsibility
As required by the Guide, we performed auditing procedures to test compliance with the requirements governing federal financial reports, fair housing and non-discrimination; mortgage status; reserve for replacements; distributions to owners; cash receipts; cash disbursements; rent restrictions; tenant security deposits; management functions; unauthorized change of ownership/acquisition of liabilities; and unauthorized loans of project funds that are applicable to those transactions.

Compliance on Non-Major Programs
Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Arcata Humboldt Associates, LP's compliance with these requirements. Accordingly we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.
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Purpose of this Report
The purpose of his report is solely to describe the scope of our testing of Arcata Humboldt Associates, LP's compliance with the requirements that are applicable to certain non-major USDA GRRHP assisted programs, and the results of that testing, and not to provide an opinion on Arcata Humboldt Associates, LP's compliance with those requirements. Accordingly, this report is not suitable for any other purpose.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
March 01, 2022
4487 N. Dresden Place, Suite 101 · Boise, Idaho 83714 · Phone (208) 375-6490 · Fax (208) 375-6593 ·www.gbbaccounting.com 169 of 519
Independent Auditors' Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination
To the Partners of Arcata Humboldt Associates, LP:

Compliance
We have applied procedures to test Arcata Humboldt Associates, LP's compliance with Fair Housing and NonDiscrimination requirements applicable to its USDA GRRHP, for the year ended December 31, 2021.

Auditor's Responsibility
Our procedures were limited to the applicable compliance requirement described in the Supplemental Auditing Standards Guide ("Guide") issued by the USDA Rural Housing Service.

Fair Housing and Non-Discrimination
Our procedures were substantially less in scope than an audit, the objective of which would be the expression of an opinion on Arcata Humboldt Associates, LP's compliance with the Fair Housing and Non-Discrimination requirements. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.

Purpose of this Report
This report is intended solely for the information of ownership, management, and the USDA and is not intended to be and should not be used by anyone other than these specified parties.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
March 01, 2022
4487 N. Dresden Place, Suite 101 · Boise, Idaho 83714 · Phone (208) 375-6490 · Fax (208) 375-6593 ·www.gbbaccounting.com 170 of 519
To the Partners of
Arcata Humboldt Associates, LP
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Arcata Humboldt Associates, LP's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Arcata Humboldt Associates, LP's internal control. Accordingly, we do not express an opinion on the effectiveness of Arcata Humboldt Associates, LP's internal control.

INDEPENDENT AUDITORS' 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
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 Arcata Humboldt Associates, LP, which compromise the balance sheet as of December 31, 2021 and the related and the related statements of operations, changes in partners' equity and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March 1, 2022.

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 detect 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 conrol was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
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Compliance and Other Matters
Purpose of this Report
Certified Public Accountants
Boise, ID
March 1, 2022
The purpose of this report is soley 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 Arcata Humboldt Associates, LP's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Arcata Humboldt Associates, LP's internal control and compliance.

Accordingly, this communication is not suitable for any other purpose.

Grigg, Bratton, & Brash, PC
As part of obtaining reasonable assurance about whether Arcata Humboldt Associates, LP'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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion, The results of our tests discosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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Our audit disclosed no findings or questioned costs that are required to be reported.

Arcata Courtyard Apartments
Schedule of Findings and Questioned Costs
For the year ended December 31, 2021
173 of 519
Finding No.:

Status: N/A
Arcata Courtyard Apartments
Project's Comments on Audit Resolution Matters
For the year ended December 31, 2021
NONE
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Project Name: Arcata Courtyard Apartments
Project Number:

Auditor/Audit Firm: Grigg, Bratton, & Brash P.C.

Audit Period: For the year ended December 31, 2021
Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations:

As there are no findings reported, there is no corrective action plan at this time.

Arcata Courtyard Apartments
Project's Comments on Audit Resolution Matters
For the year ended December 31, 2021
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Arcata Humboldt Associates II, LP
A California Limited Partnership
Financial Statements
For the Years Ended December 31, 2021 and 2020
176 of 519
Arcata Humboldt Associates II, LP
December 31, 2021 and 2020

CONTENTS
Page
Financial Statements
Independent Auditors' Report 1
Balance Sheets 4
Statements of Income 5
Statements of Changes in Partners' Capital 6
Statements of Cash Flows 7
Notes to the Financial Statements 9
Supplementary Information 20 - 21
Independent Auditors Report on Compliance With Specific Requirements Applicable to NonMajor USDA GRRHP 22 Independent Auditors Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination 24
RD Supplemental Information 25
177 of 519
Independent Auditors' Report
To the Partners
Arcata Humboldt Associates II, LP
Report on the Financial Statements
Opinion
We have audited the accompanying financial statements of Arcata Humboldt Associates II, LP, a limited partnership, which comprise the balance sheets as of December 31, 2021 and 2020 and the related statements of income, changes in partners' capital, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arcata Humboldt Associates II, LP as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Arcata Humboldt Associates II, LP and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 4487 N. Dresden Place, Suite 101 · Boise, Idaho 83714 · Phone (208) 375-6490 · Fax (208) 375-6593 · www.gbbaccounting.com 178 of 519
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, 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 performing an audit in accordance with generally accepted auditing standards, 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 Arcata Humboldt Associates II, LP '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 Arcata Humboldt Associates II, LP'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.
2 179 of 519
Other Matters
Report on Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information referenced in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the financial statements as a whole.

Report on Other Legal and Regulatory Requirements
In accordance with the U.S. Department of Agriculture ("USDA") Guaranteed Rural Rental Housing Program ("GRRHP") Supplemental Government Auditing Standards Guide ("The Guide"), we have issued our report dated March 19, 2022 on our consideration of Arcata Humboldt Associates II, LP's compliance with specific requirements applicable to a non-major USDA GRRHP program. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance with the Guide.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
March 19, 2022
3 180 of 519
Arcata Humboldt Associates II, LP
Balance Sheets
December 31, 2021 and 2020
2021 2020
Assets
Cash and Cash Equivalents $ 45,743 $ 21,585
Prepaid Expenses - (2)
Related Party Receivables - 4,360
Restricted Cash:

Tenant Security Deposits 30,467 30,467
Escrow Deposits 12,258 12,723
Replacement Reserve 242,498 223,202
Other Reserves 96,613 96,834
Rental Property, net 5,920,210 6,155,113
Other Assets 2,108 3,492
Total Assets $ 6,349,897 $ 6,547,774
Liabilities and Partners' Capital
Liabilities
Accounts Payable $ 15,427 $ 19,823
Accrued Interest Payable 1,507,841 1,405,466
Security Deposits Liability 23,162 22,388
Related Party Payables 180,385 171,278
Long-Term Debt, net 4,670,932 4,683,090
Total Liabilities 6,397,747 6,302,045
Partners' Capital
Partners' Capital (47,850) 245,729
Total Liabilities and Partners' Capital $ 6,349,897 $ 6,547,774 The accompanying notes are an integral part of these financial statements. 4 181 of 519
Arcata Humboldt Associates II, LP
Statements of Income
For the Years Ended December 31, 2021 and 2020
2021 2020
Operating Revenue
Net Rental Income $ 354,597 $ 347,923
Miscellaneous Income 1,075 718
Total Operating Revenue 355,672 348,641
Operating Expenses
Administrative Expenses 65,800 73,414
Utilities 78,769 64,133
Operating and Maintenance Expenses 66,581 55,676
Taxes and Insurance 15,327 12,825
Total Operating Expenses 226,477 206,048
Net Operating Income 129,195 142,593
Non-Operating Income (Expenses)
Interest Income 1,118 -
Interest Expense (203,530) (203,468)
Interest Reduction Payments Revenue 32,481 32,792
Depreciation Expense (234,903) (234,903)
Amortization Expense (1,384) (1,384)
USDA Guarantee Fee (6,397) (6,531)
Bond Fees (5,000) (5,000)
Asset Management Fee (3,200) (3,200)
Partnership Management Fee (3,200) (3,200)
Other Non-Operating Income 1,241 -
Total Non-Operating Income (Expenses) (422,774) (424,894) Net Loss $ (293,579) $ (282,301)
The accompanying notes are an integral part of these financial statements. 5 182 of 519
Arcata Humboldt Associates II, LP
Statements of Changes in Partners' Capital
For the Years Ended December 31, 2021 and 2020
TPC
Holdings I,
LLC
(.0033%)
Johnson &
Johnson
Investments,
LLC (.0033%)
Central
Valley
Coalition
for
Affordable
Housing
(.0034%)
Boston
Capital Corp

TCF XXVII
(90.624513%)
Boston
Capital Corp

TCF XXIV
(9.365487%)
BCCC,
Inc.
(0%)
Total
(100.00%)
Prior Year Activity
Balance, January 1,
2020 $ (121) $ (121) $ (125) $ 475,822 $ 52,575 $ - $ 528,030 Net income (loss) for the
period (9) (9) (10) (255,834) (26,439) - (282,301)
Balance, December 31,
2020 (130) (130) (135) 219,988 26,136 - 245,729
Current Year Activity
Net income (loss) for the
period (10) (10) (10) (266,054) (27,495) - (293,579)
Balance, December 31,
2021 $ (140) $ (140) $ (145) $ (46,066) $ (1,359) $ - $ (47,850) The accompanying notes are an integral part of these financial statements. 6 183 of 519
Arcata Humboldt Associates II, LP
Statements of Cash Flows
For the Years Ended December 31, 2021 and 2020
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash Receipts
Rental Receipts $ 354,597 $ 347,923
Interest Receipts 1,118 -
Other Operating Receipts 39,157 33,510
Total Receipts 394,872 381,433
Disbursements
Administrative (42,567) (42,695)
Management Fee (27,630) (26,094)
Utilities (78,769) (64,133)
Operating and Maintenance (63,873) (83,115)
Real Estate Taxes (2,708) (2,792)
Property Insurance (11,267) (9,012)
Taxes and Insurance (1,354) (1,019)
Tenant Security Deposits 774 684
Interest on Mortgage and Notes Payable (100,493) (100,431) Bond Fees (5,000) (5,000)
USDA Guarantee Fee (6,397) (6,531)
Total Disbursements (339,284) (340,138)
NET CASH FLOWS PROVIDED BY (USED BY) OPERATING ACTIVITIES 55,588 41,295 CASH FLOWS FROM INVESTING ACTIVITIES:

NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES - - CASH FLOWS FROM FINANCING ACTIVITIES:

Principal Payments - Mortgages and Notes Payable (12,820) (12,992) NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES (12,820) (12,992) Net cash increase (decreases) in cash, restricted cash, and cash equivalents 42,768 28,303 Cash, restricted cash, and cash equivalents at beginning of period 384,811 356,508 Cash, restricted cash. and cash equivalents at end of period $ 427,579 $ 384,811 The accompanying notes are an integral part of these financial statements. 7 184 of 519
Arcata Humboldt Associates II, LP
Statements of Cash Flows (Continued)
For the Years Ended December 31, 2021 and 2020
2021 2020
Cash, restricted cash, and cash equivalents consist of the following:

Cash and Cash Equivalents $ 45,743 $ 21,585
Tenant Security Deposits 30,467 30,467
Escrow Deposits 12,258 12,723
Replacement Reserve 242,498 223,202
Other Reserves 96,613 96,834
$ 427,579 $ 384,811
Reconciliation of Net Income to Net Cash Flow Provided By (Used By) Operating Activities
Net Loss (293,579) (282,301)
Adjustments to reconcile net loss to net cash provided by (used by) operating activities
Depreciation 234,903 234,903
Amortization 1,384 1,384
Amortization/Interest Debt Issuance Costs 662 662
(Increase) decrease in assets
Related Party Receivables 4,360 -
Prepaid Expenses (2) 2
Increase (decrease) in liabilities
Accounts Payable (4,396) 4,625
Accrued Interest Payable 102,375 102,375
Security Deposits Liability 774 684
Related Party Payables 9,107 (21,039)
Net cash provided by (used by) operating activities $ 55,588 $ 41,295 The accompanying notes are an integral part of these financial statements. 8 185 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

1. Organization
a. Partnership
The financial statements reflect the accounts of Arcata Humboldt Associates II, LP (a California Limited Partnership) only and consequently, do not include all assets, liabilities, income and expenses of the partners.

The partnership was formed in 2004. The General Partners are: TPC Holdings I, LLC (.0033%), Johnson & Johnson Investments, LLC (.0033%)(Administrative General Partners) and Central Valley Coalition for Affordable Housing (CVC)(.0034%)(Managing General Partner). The Limited Partners are: Boston Capital Corporate Tax Credit Fund XXVII (90.624513%), Boston Capital Corporate Tax Credit Fund XXIV (9.365487%) and BCCC, Inc (0%). Boston Capital Corporate Tax Credit Fund XXIV entered the partnership on May 31, 2007 while SunAmerica Housing Fund 1395 exited on February 9, 2007. The partnership was formed for the purpose of constructing acquiring, owning, operating, managing and selling or otherwise disposing of a 36-unit rural rental housing project in Arcata, California known as Arcata Courtyards II Apartments. The project construction was completed in August 2007 when rental operations also began. The project operates in accordance with a regulatory agreement signed with the California Tax Credit Allocation Committee intended to keep the project in compliance with Section 42 of the Internal Revenue Code and qualify for the Federal Low Income Housing Tax Credit. Each building of the project must meet the provisions of these regulations (occupant eligibility and unit gross rent) in order to remain qualified to receive the credits.

2. Significant Accounting Policies
a. Accounting Method
The financial statements are prepared in accordance with generally accepted accounting principles in the United States, and conform in all material respects with International Accounting Standards with regards to the presentation of historical cost financial information. Under the accrual basis of accounting, income is recognized as earned and expenses as incurred, regardless of timing of payment. b. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and may have impact on future periods. c. Reclassifications
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.
d. Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents includes short-term investments and highly liquid investments in money market instruments which are carried at the lower of cost and market value with a maturity date of three months or less from the acquisition date. These are valued at cost which approximates market value. 9 186 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

2. Significant Accounting Policies (Continued)
e. Rental Property
Rental property is carried at cost. Depreciation is calculated using the straight-line method over estimated useful lives ranging from 10 to 40 years. Depreciation expense for December 31, 2021 was $234,903 (2020 - $234,903).
f. Impairment of Long Lived Assets
The partnership reviews its rental property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When recovery is reviewed, if the undiscounted cash flows estimated to be generated by the property are less than their carrying amounts, management compares the carrying amount of the property to its fair value in order to determine whether an impairment loss has occurred. The amount of the impairment loss is equal to the excess of the asset’s carrying value over its estimated fair value. No impairment loss has been recognized during the years ended December 31, 2021 and 2020.
g. Other Assets - Deferred Fees
Other assets include tax credit agency fees of $20,757 related to obtaining the application and allocation of low income housing tax credits from the state agency. Other assets are amortized on a straight-line basis over the life of the 15 year compliance period. Accumulated amortization totaled $18,649 and $17,265 as of December 31, 2021 and 2020, respectively.
h. Debt Issuance Costs
Unamortized debt issuance costs of $20,865 and $21,527 at December 31, 2021 and 2020 are reported as a direct reduction of the obligation to which such costs relate. Amortization of debt issuance costs of $662 and $662 is reported as a component of interest expense and is computed using the straight-line method which is not significantly different than the effective interest method. i. Revenue Recognition - Rental Revenue and Receivable
The partnership retains substantially all of the risks and benefits of ownership of its rental properties and, therefore, accounts for leases with its tenants as operating leases. Rental revenue is recognized as rentals become due, net of provisions for uncollectible amounts. Rental payments received in advance are deferred until earned. All leases between the partnership and the tenants of the project are considered to be operating leases. Management considers receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been provided. If amounts become uncollectible, they are charged to operations in the period in which determination is made. U.S. generally accepted accounting principles ("GAAP") requires that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. 10 187 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

2. Significant Accounting Policies (Continued)
j. Advertising Cost
Advertising and marketing costs are expensed as incurred. For years ending 2021 and 2020, advertising and marketing costs totaled $0 and $513, respectively.
k. Income Taxes
Under the provisions of the Internal Revenue Code and applicable state laws, the Partnership is not directly subject to income taxes; the results of its operations are includable in the tax returns of its partners. Therefore, no provision for income tax expense has been included in the accompanying financial statements. While no income tax returns are currently being examined by the Internal Revenue Service, tax years dating back three years remain open.
l. Economic Concentrations and Contingencies
The partnership operates on property located in Arcata, California. Future operations could be affected by changes in the economy or other conditions in that geographical area or by changes in federal low-income housing subsidies or the demand for such housing. The project's low-income housing tax credits and regulatory agreement require compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility, and/or unit gross rent, or to correct non-compliance within a specified time period could result in recapture of previously taken tax credits plus interest. In addition, such potential noncompliance may require an adjustment to the contributed capital of the limited partner. m. Financial Instruments
The partnership has determined that the estimated fair value of the financial assets and liabilities do not differ considerably from their book value.

3. Related Party Transactions
a. Partner Fees
A cumulative annual asset management fee of $3,200 is payable to the Limited Partner (commencing in 2008) when cash flow is sufficient. A cumulative annual partnership management fee of $3,200 is payable to the Managing General Partner when cash flow is sufficient.

The partnership agreement provides for payment, to the Administrative General Partner, of a non-cumulative Incentive Supervisory Management Fee of up to 60% of cash flow for management supervisory services. The fee is payable only after other priority payments and is not to exceed 8% of gross apartment income. 11 188 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

3. Related Party Transactions (Continued)
b. Developer Fee Payable
A developer fee of $995,130 was accrued to an affiliate of the general partner upon completion of the project in 2007. The general partner guaranteed construction completion and any development deficits by agreeing to defer a portion of the fee that could not be paid out of all sources of debt and equity until sufficient cash flows for payment could be generated from operations.
c. Operating Cash Flow
Cash flow, which means the excess of Cash Receipts over Cash Expenditures as determined for each fiscal year or portion thereof, shall be distributed in the following order of priority as defined by the partnership agreement.

1. To the Limited Partner for any credit recovery loans.

2. To the payment of all unpaid Asset Management Fees.

3. To pay any unpaid deferred developer fees.

4. To pay 50% of remaining cash flows toward the HOME loan obligation.

5. To pay any remaining Subordinated loans.

6. To pay any unpaid Partnership Management Fees.

7. To the payment of the Incentive Management Fee.

8. The balance thereof, to the Administrative General Partners - 79.99%, 20% to the Limited Partners, and .01% to the Managing General Partner.
12 189 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

3. Related Party Transactions (Continued)
d. Guarantees
Operating Deficit Guaranty - The general partner (and affiliates of the general partner) will provide funds to the partnership necessary to pay any operating deficit in the form of a loan to the partnership. The general partner shall not be obligated to make subordinated loans in excess of $175,000. The operating deficit guarantee period begins after the achievement of the "Rental Achievement Date" (which was October 31, 2008), as defined by the partnership agreement, and ends on the third anniversary of the "Rental Achievement Date".

The break-even date has not been determined yet. The General Partner is obligated to fund an operating reserve out of the third capital contribution of $56,800 which can be released after meeting certain benchmarks and used to pay any deferred developers fee.

Recapture Guaranty - The Administrative General Partner has guaranteed to reimburse the limited partners for certain amounts in the event there is a "Tax Credit Recapture Event", as defined in the partnership agreement.

Replacement Reserve Guaranty - The general partner guarantees that they will contribute to the partnership any funds required to ensure that $14,400 per year is funded into a replacement reserve account.

Construction Completion Guaranty - The Administrative General Partner has guaranteed to complete construction and fund all operating deficits until Rental Achievement (October 31, 2008). e. Property Management Fees
The property was managed by Danco PM who is affiliated with one of the General Partners. The management agreement calls for a management fee of 7.5% per month for project income. Management fees totaled $27,630 and $26,094 during 2021 and 2020, respectively. 13 190 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

3. Related Party Transactions (Continued)
f. Related Party Payables
Amounts due from and due to related parties are as follows:
2021 2020
Due From Related Parties:

Due from GP Affiliate - Danco PM $ - $ 1,824
Due from Arcata Humboldt Associates, LP - 2,536
Total Related Party Receivables $ - $ 4,360
2021 2020
Due to Related Parties:

Deferred Developer Fee Payable $ 142,860 $ 142,860
Asset Management Fee Payable 9,600 6,400
Partnership Management Fee Payable 20,000 16,800
Related Party Payables - Due to GP Danco Builders 7,925 5,218 Total Related Party Payables $ 180,385 $ 171,278
g. Construction Contract
The project was built by an affiliate of one of the Administrative General Partners. The construction contract was for $6,432,173 which was paid in full during 2008.
h. Clubhouse\Office Rent
The project has no clubhouse or office of its own, instead it rents these facilities from an adjacent project (Arcata Courtyards I) for $1,000 per month. Both projects have the same general partners. 14 191 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

4. Rental Property
Rental property consists of the following:
2021 2020
Land $ 557,165 $ 557,165
Buildings 8,730,906 8,730,906
Office Furniture and Equipment 137,190 137,190
Total cost 9,425,261 9,425,261
Accumulated Depreciation (3,505,051) (3,270,148)
Total Rental Property, net $ 5,920,210 $ 6,155,113

5. Restricted Cash
a. Cash Reserve Account
The partnership agreement requires the establishment of a capital replacement reserve account with contributions by the partnership of $400 per unit per year ($14,400), while the HOME regulatory agreement requires $527 per unit per year ($18,972). Funding will begin with the closing of the permanent loan. The Lender requires monthly deposits of $1,000 ($12,000 annually). The deposits will be released to the partnership upon requests for capital replacements. The balance in the lender account was $207,013 and $188,041 at December 31, 2021 and 2020, respectively.

A second reserve account was established to account for the difference in the requirements of the perm loan versus the HOME loan. The balance in the second account was $35,485 and $35,161 at December 31, 2021 and 2020, respectively.
b. Tenant Security Deposits
Tenant security deposits are required to be maintained in separate accounts in banks insured by FDIC. The balance on December 31, 2021 and 2020 was $30,467 and $30,467 respectively. The balance on December 31, 2021 was over funded by $7,305.
c. Tax and Insurance Account
The partnership is required to impound funds for payment of insurance and taxes and should be released to the partnership as the corresponding expenses are incurred. Monthly amounts required as of December 31, 2021 are $950.
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Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

5. Restricted Cash (Continued)
d. Other Reserves Account
The partnership is required to impound funds for payment of the USDA guarantee fee. Monthly amounts required as of December 31, 2021 are $533. The balance at December 31, 2021 and 2020 was $7,000 and 7,070.

Bonneville mortgage required an operating reserve of $28,000 be set up with no monthly deposits required.

The account was closed when the loan was converted to a permanent loan February 2009. The HOME loan regulatory agreement requires an operating reserve of $60,900 be established and additions are only required when the balance falls below this level. The balance at December 31, 2021 and 2020 was $86,906 and $86,112
Bonneville mortgage required a conversion reserve of $176,004 be set up with no monthly deposits required.

The account was closed when the loan was converted to a permanent loan February 2009. e. Restricted Account Activity
Replacement
Reserve
Insurance
Escrow
Operating Deficit
Reserve

USDA MIP
Escrow
Interest Credit
Subsidy Reserve
Prior Year Activity
Balance, beginning of period $ 208,973 $ 12,737 $ 86,112 $ 7,140 $ 13,789 Deposits 14,229 9,000 - 6,460 32,792
Withdrawals - (9,014) - (6,531) (42,929)
Balance, end of period 223,202 12,723 86,112 7,069 3,652 Current Year Activity
Deposits 18,972 10,800 - 6,481 4,468
Interest 324 - 794 - -
Withdrawals - (11,265) - (6,550) (5,413)
Subtotal, current year activity 19,296 (465) 794 (69) (945) Balance, end of period $ 242,498 $ 12,258 $ 86,906 $ 7,000 $ 2,707 16 193 of 519
Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

6. Long-Term Debt
a. Mortgage and Notes Payable
2021
Interest
Payable
2021
Principal
2020
Interest
Payable
2020
Principal
Bonneville Mortgage Payable
The Bonneville mortgage payable which closed 8/10/2006 for $1,400,000 was converted to a permanent loan 2/9/2009. It matures August 2049, bears interest at 7.73%, and is secured by the real property and an assignment of rents from the limited partnership. The loan is backed by a guarantee from USDA for 90% and is subject to loan guarantee fees and will receive an annual interest credit subsidy from USDA. The monthly payments are $9,452. Interest expense for 2021 totaled $100,493 (2020 - $100,431).
$ - $ 1,279,293 $ - $ 1,292,113
HOME Loan City of Arcata
The HOME loan with the City of Arcata was dated 8/2/06 for $3,412,500. The interest rate is 3% with payments of 50% of residual receipts (after payment of DDF and 12K in fees) only. No principal maturities are expected during the next five years.

Interest expense for 2021 totaled $102,375 (2020 - $102,375). 1,507,841 3,412,504 1,405,466 3,412,504
Subtotal Interest and Principal 1,507,841 4,691,797 1,405,466 4,704,617 Less: Unamortized Debt Issuance Costs (20,865) (21,527) Total Long-Term Debt, net $ 1,507,841 $ 4,670,932 $ 1,405,466 $ 4,683,090 b. Schedule of Principal Maturities
The principal payments per annum on the mortgages and notes payable are due as follows:
2022 $ 15,059
2023 16,265
2024 17,568
2025 18,975
2026 20,494
Subsequent 4,603,436
Total $ 4,691,797
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Arcata Humboldt Associates II, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

7. Subsequent Events
Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date, require disclosure in the accompanying notes. Management evaluated the activity of the partnership through March 19, 2022 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.

8. Federal Low-Income Housing Tax Credits
The partnership was allocated low-income housing tax credits by the California Tax Credit Allocation Committee amounting to $3,997,630 federal. As of December 31, 2017 the federal low-income tax credits have been fully utilized and there are no tax credits available for future years.

9. Commitments and Contingencies
The partnership has qualified for low-income housing tax credits which are contingent on its ability to remain in compliance with the applicable requirements of Section 42 of the Internal Revenue Code. Failure to maintain compliance with occupant eligibility, and/or unit gross rent or to correct non-compliance within a specific time period, could result in recapture of previously issued tax credits plus interest. In addition, under the terms of the Limited Partnership Agreement, such potential non-compliance could require a refund of previously contributed capital by the Investor Limited Partner.
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Arcata Humboldt Associates II, LP
For the Years Ended December 31, 2021 and 2020
Schedule of Operating Expenses
2021 2020
Administrative Expenses
Advertising and Marketing $ - $ 513
Other Renting Expenses 51 (2)
Office Expenses 963 1,056
Property Management Fees 27,630 26,094
Manager or Superintendent Salaries 18,573 29,948
Audit Expense 4,875 2,800
Miscellaneous Administrative Expenses 13,708 13,005
Total Administrative Expenses 65,800 73,414
Utilities
Fuel Oil/Coal 463 112
Electricity 5,516 5,263
Water 35,110 29,975
Sewer 37,680 28,783
Total Utilities 78,769 64,133
Operating and Maintenance
Payroll 15,678 12,480
Supplies 6,017 6,062
Contracts 14,539 12,797
Garbage and Trash 27,651 22,354
Miscellaneous Operating and Maintenance Expensese 2,696 1,983 Total Operating and Maintenance 66,581 55,676
Taxes and Insurance
Real Estate Taxes 2,708 2,792
Property & Liability Insurance (Hazard) 11,265 9,014
Miscellaneous Taxes, Licences, Permits, & Ins 1,354 1,019 Total Taxes and Insurance 15,327 12,825
Total Operating Expenses $ 226,477 $ 206,048
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Arcata Humboldt Associates II, LP
For the Years Ended December 31, 2021 and 2020
Cash Flow Available for Distribution
The calculation of cash flow available for distribution is as follows:
2021
Net Cash Provided by Operating Activities $ 55,589
Add:

Deduct:

Principal Payments of Long-Term Debt (12,820)
Change in Replacement Reserve Accounts (19,296)
Change in Operating Reserve Accounts 221
Change in Mortgage Escrow Accounts 465
Cash Flow Available for Distribution $ 24,159
Distribution of Available Cash Flow
Cash flow available for distribution from 2021 will be distributed in 2022 as follows:
2021
Asset Management Fee Payable $ 9,600
Partnership Management Fee Payable 12,000
Deferred Developer Fee Payable 2,303
LP Distribution 256
Total $ 24,159
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Independent Auditors' Report on Compliance With Specific Requirements Applicable to a Non-Major USDA GRRHP
To the Partners of Arcata Humboldt Associates II, LP:

Compliance
We have audited the financial statements of Arcata Humboldt Associates II, LP as of and for the year ended December 31, 2021, and have issued our report thereon dated March 19, 2022.

In connection with that audit and with our consideration of Arcata Humboldt Associates II, LP's internal control used to administer USDA GRRHP, as required by the GRRHP Supplemental Government Auditing Standards Guide ("Guide") issued by the USDA Rural Housing Service, we selected certain transactions applicable to certain nonmajor USDA GRRHP for the year ended December 31, 2021.

Auditors' Responsibility
As required by the Guide, we performed auditing procedures to test compliance with the requirements governing federal financial reports, fair housing and non-discrimination; mortgage status; reserve for replacements; distributions to owners; cash receipts; cash disbursements; rent restrictions; tenant security deposits; management functions; unauthorized change of ownership/acquisition of liabilities; and unauthorized loans of project funds; that are applicable to those transactions.

Compliance on Non-Major Programs
Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Arcata Humboldt Associates II, LP's compliance with these requirements. Accordingly we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.
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Purpose of this Report
The purpose of his report is solely to describe the scope of our testing of Arcata Humboldt Associates II, LP's compliance with the requirements that are applicable to certain non-major USDA GRRHP assisted programs, and the results of that testing, and not to provide an opinion on Arcata Humboldt Associates II, LP's compliance with those requirements. Accordingly, this report is not suitable for any other purpose.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
March 19, 2022
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Independent Auditors' Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination
To the Partners of Arcata Humboldt Associates II, LP:

Compliance
We have applied procedures to test Arcata Humboldt Associates II, LP's compliance with Fair Housing and NonDiscrimination requirements applicable to its USDA GRRHP, for the year ended December 31, 2021.

Auditors' Responsibility
Our procedures were limited to the applicable compliance requirement described in the Supplemental Auditing Standards Guide ("Guide") issued by the USDA Rural Housing Service.

Fair Housing and Non-Discrimination
Our procedures were substantially less in scope than an audit, the objective of which would be the expression of an opinion on Arcata Humboldt Associates II, LP's compliance with the Fair Housing and Non-Discrimination requirements. Accordingly we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
4487 N. Dresden Place, Suite 101 · Boise, Idaho 83714 · Phone (208) 375-6490 · Fax (208) 375-6593 · www.gbbaccounting.com 201 of 519
To the Partners of
Arcata Humboldt Associates II, LP

INDEPENDENT AUDITORS' 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
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 Arcata Humboldt Associates II, LP, which compromise the balance sheet as of December 31, 2021 and the related and the related statements of operations, changes in partners' equity and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March ϭϵ, 2022.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Arcata Humboldt Associates II, LP's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Arcata Humboldt Associates II, LP's internal control.

Accordingly, we do not express an opinion on the effectiveness of Arcata Humboldt Associates II, LP's internal control.

Compliance and Other Matters
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Purpose of this Report
Certified Public Accountants
Boise, ID
March 1ϵ,
2022
The purpose of this report is soley 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 Arcata Humboldt Associates II, LP's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Arcata Humboldt Associates II, LP's internal control and compliance.

Accordingly, this communication is not suitable for any other purpose.

Grigg, Bratton, & Brash, PC
As part of obtaining reasonable assurance about whether Arcata Humboldt Associates II, LP'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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion, The results of our tests discosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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Our audit disclosed no findings or questioned costs that are required to be reported.

Arcata Courtyard Apartments
Schedule of Findings and Questioned Costs
For the year ended December 31, 2021
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Finding No.:

Status: N/A
Arcata Courtyard Apartments
Project's Comments on Audit Resolution Matters
For the year ended December 31, 2021
NONE
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Project Name: Arcata Courtyard Apartments
Project Number:

Auditor/Audit Firm: Grigg, Bratton, & Brash P.C.

Audit Period: For the year ended December 31, 2021
Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations:

As there are no findings reported, there is no corrective action plan at this time.

Arcata Courtyard Apartments
Project's Comments on Audit Resolution Matters
For the year ended December 31, 2021
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Eureka 4th Street LP
(A California Limited Partnership)
HCD No. 18-NPLH-12676
________________________________________
Report on Audits of
Financial Statements
Years Ended
December 31, 2022 and 2021
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Eureka 4th Street LP
(A California Limited Partnership)

INDEPENDENT AUDITOR INFORMATION
Years Ended December 31, 2022 and 2021
The December 31, 2022 audit of Eureka 4th Street LP was performed by Leavitt, Christensen & Co., PLLC. The December 31, 2021 audit of Eureka 4th Street LP was performed by other auditors. Additional information on Leavitt, Christensen & Co., PLLC follows:

Name: Leavitt, Christensen & Co., PLLC
Address: 6149 N. Meeker Place Ste. 250
Boise, ID 83713
Phone number: (208) 287-5353
Lead auditor: Ryan T. Leavitt
Idaho license number: CP-5035

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Contents
Independent Auditors' Report 1
Balance Sheets 4
Statements of Operations 5
Statements of Changes in Partners' Capital (Deficit) 6
Statements of Cash Flows 7
Notes to Financial Statements 9
Supplemental Information 17
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters 23 Audit Findings and Management Response 25
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1 Independent Auditors' Report
February 10, 2023
To the Partners
Eureka 4th Street LP
(A California Limited Partnership)
Arcata, California
Report on the Audit of the Financial Statements
Opinion
We were engaged to audit the accompanying financial statements of Eureka 4th Street LP (A California Limited Partnership), which comprise the balance sheet as of December 31, 2022, and the related statement of operations, changes in partners’ capital and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Eureka 4th Street LP as of December 31, 2022, and the results of its operations, changes in partners’ capital and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
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 Eureka 4th Street LP 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 opinion.

Prior Period Financial Statements
The financial statements of Eureka 4th Street LP (A California Limited Partnership) as of December 31, 2021 were audited by other auditors whose report dated February 15, 2022 expressed an unmodified opinion on those statements.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.
ln 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 Eureka 4th Street LP's ability to continue as a going concern for one year from the date that the financial statements were issued.

Auditors’ Responsibility 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 and Government Auditing Standards will always detect a material misstatement when it exists.
6149 N. Meeker Place, Suite 250 • Boise, Idaho 83713 • (208) 287-5353 • Fax (208) 994-0716 243 of 519
2 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 omissions, 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 and Government Auditing Standards 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 Eureka 4th Street LP’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 Eureka 4th Street LP’s ability to continue as a going concern for a reasonable period of time.

Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information on pages 17 through 22, as required by the California Department of Housing and Community Development and the California Housing Finance Agency, is presented for purposes of additional analysis, and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.

In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards and the requirements of the Audited Financial Statement Handbook for Multifamily Rental Housing of the California Department of Housing and Community Development and the California Housing Finance Agency, we have also issued a report dated February 10, 2023 (see pages 23 to 24) on our consideration of Eureka 4th Street LP's internal control over financial reporting and on our tests of its compliance with laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of the testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing and the requirements of the Audited Financial Statement Handbook for Multifamily Rental Housing of the California Department of Housing and Community Development and the California Housing Finance Agency in considering Eureka 4th Street LP’s internal control over financial reporting and compliance.
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3 Disclaimer on Procedures Related to Tax Credit Compliance The partnership has filed tax returns with the Internal Revenue Service which allow the partners to receive the benefit of a low-income housing tax credit. Due to the fact that the low-income housing tax credit relates to income taxes which are the responsibility of the individual partners, the scope of the audit was not designed or intended to audit the compliance with the various low-income housing tax credit laws. Therefore, these audits cannot be relied on to give assurances with regard to compliance with any low-income housing tax credit laws.

Boise, ID
Leavitt, Christensen & Co., PLLC
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Eureka 4th Street Limited Partnership

BALANCE SHEETS
as of December 31, 2022 and 2021
ASSETS 2022 2021
CURRENT ASSETS:

Cash on hand and in banks $ 8,575 $ 26,137
Accounts receivable - tenant 9,728 20,126
Accounts receivable - related party and other 410 410
Prepaid expenses - 2,960
TOTAL CURRENT ASSETS 21,673 46,673
RESTRICTED DEPOSITS & FUNDED RESERVES:

Tenant security deposits 14,298 14,298
Replacement reserve 55,251 31,875
Operating reserve 127,121 127,121
Subsidy transition reserve 283,416 283,416
Capitalized operating subsidy reserve 235,594 349,170
Compliance controlled account 369,180 369,180
TOTAL RESTRICTED DEPOSITS & FUNDED RESERVES 1,175,060 1,084,860 RENTAL PROPERTY:

Land and improvements 2,802,144 2,802,144
Building, building improvements and equipment 15,108,441 15,108,441 17,910,585 17,910,585
Accumulated depreciation (1,703,803) (1,064,877)
NET RENTAL PROPERTY 16,845,708 16,206,782
OTHER ASSETS:

Deferred costs, net of $13,219 and $8,262 accumulated amortization 66,090 61,133 TOTAL OTHER ASSETS 66,090 61,133
TOTAL ASSETS $ 17,374,448 $ 18,133,531

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:

Accounts payable $ 75,090 $ 34,247
Interest payable 136,480 52,946
Asset management fee payable 11,011 8,483
Partnership management fee payable 13,333 8,333
Due to affiliates 20,000
Current portion of mortgage note payable 20,201 19,048
TOTAL CURRENT LIABILITIES 123,057 276,115
DEPOSITS AND PREPAID LIABILITIES:

Prepaid rents 25,259 12,497
Tenant security deposits 13,053 14,996
TOTAL DEPOSITS AND PREPAID LIABILITIES 40,255 25,550
LONG TERM LIABILITIES:

Mortgage notes payable, less current portion 7,629,633 7,638,212 Permanent financing costs, net of $5,903 and $1,736 accumulated amortization (61,808) (65,975) Long-term note payable, net of unamortized permanent financing costs 7,567,825 7,572,237 Developer fee payable 815,269 681,428
TOTAL LONG TERM LIABILITIES 8,387,506 8,249,253
TOTAL LIABILITIES 8,550,818 8,550,918
PARTNERS' CAPITAL (DEFICIT) 9,582,713 8,823,530
TOTAL LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) $ 17,374,448 $ 18,133,531 See accompanying notes to the financial statements
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Eureka 4th Street Limited Partnership

STATEMENTS OF OPERATIONS
Years Ended December 31, 2022 and 2021
REVENUES: 2022 2021
Rent revenue
Rent revenue - tenant $ 531,072 $ 510,762
less vacancies, loss to lease, rent concessions (5,675) (16,126) Net rental income 525,397 494,636
Other income 7,379 9,238
TOTAL NET REVENUE 503,874 532,776
EXPENSES:

Operating expenses
Administrative expenses 103,283 125,405
Operating and maintenance 189,091 178,384
Utilities 59,397 59,346
Mortgage interest 241,628 370,466
Real estates taxes and insurance 22,788 29,372
616,187 762,973
NET OPERATING INCOME (LOSS) (259,099) (83,411)
Non-Operating expenses (revenues)
Other income (50,202)
Social services fee 70,833 85,000
Depreciation and amortization 643,883 643,883
Partnership fees - asset management fees 5,332 5,150
Partnership fees - management fees 5,000 5,000
674,846 739,033
NET INCOME (LOSS) $ (758,257) $ (998,132)
See accompanying notes to the financial statements
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Eureka 4th Street Limited Partnership

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Years Ended December 31, 2022 and 2021
General Limited
Partner Partner Total
Partners' capital (deficit) as
previously stated, January 1 $ (183) $ 9,582,896 $ 9,582,713 Distributions (926) (926)
Net income (loss) (758,181) (76) (758,257)
Partners' capital (deficit),
December 31 $ (259) $ 8,823,789 $ 8,823,530
General Limited
Partner Partner Total
Partners' capital (deficit) as
previously stated, January 1 $ (83) $ 4,925,336 $ 4,925,253 Capital Contributions 5,655,592 5,655,592
Net income (loss) (998,032) (100) (998,132)
Partners' capital (deficit),
December 31 $ (183) $ 9,582,896 $ 9,582,713
2022
2021
See accompanying notes to the financial statements
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Eureka 4th Street Limited Partnership

STATEMENTS OF CASH FLOWS
Years Ended December 31, 2022 and 2021
2022 2021
CASH FLOWS FROM OPERATIONS:

Rental receipts $ 523,033 $ 540,783
Other receipts 55,638 9,936
Administrative payments (61,608) (78,211)
Maintenance payments (2,604) (47,807)
Utilities paid (66,723) (50,808)
Salaries and wages (180,276) (177,498)
Social services fee (70,833) (85,000)
Interest paid for operating purposes (153,927) (357,578) Real estate taxes and Insurance paid (17,758) (27,562)
Other expenses (1,810) (10,511)
NET CASH PROVIDED (USED) BY OPERATIONS 14,431 (275,555) CASH FLOWS FROM INVESTING ACTIVITIES:

NET CASH PROVIDED (USED) BY INVESTING - -
CASH FLOWS FROM FINANCING ACTIVITIES:

Mortgage notes principal payments (7,426) (6,955)
Proceeds form mortgage loan payable - 4,157,565
Debt issuance costs incurred - (29,788)
Repayment of developer fee payable (133,841) (539,874)
Proceeds from construction loan - 22,781
Repayments of construction loan - (8,186,414)
Partner capital contributions - 5,655,592
Distributions (926)
Due to (from) related parties, net 20,000 -
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 1,072,907 (122,193) NET INCREASE (DECREASE) IN CASH 797,352 (107,762)
CASH - BEGINNING OF PERIOD 1,201,197 403,845
CASH - END OF PERIOD $ 1,093,435 $ 1,201,197
Cash on hand and in banks $ 8,575 $ 26,137
Tenant security deposits 14,298 14,298
Replacement reserve 55,251 31,875
Operating reserve 127,121 127,121
Subsidy transition reserve 283,416 283,416
Capitalized operating subsidy reserve 235,594 349,170
Compliance controlled account 369,180 369,180
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 1,093,435 $ 1,201,197
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheet that sum to the total of the same such amounts shown in the Statement of Cash Flows.

See accompanying notes to the financial statements
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Eureka 4th Street Limited Partnership

STATEMENTS OF CASH FLOWS
Years Ended December 31, 2022 and 2021
2022 2021

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
FLOWS PROVIDED (USED) BY OPERATIONS:

Net income (loss) $ (758,257) $ (998,132)
Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization 643,883 643,883
Permanent financing cost amortization 4,167 1,736
Decrease (increase) in:

Tenant accounts receivable 10,398 17,308
Prepaid expenses (2,960) 3,580
Increase (decrease) in:

Accounts payable 40,843 34,070
Accrued asset management fees payable 2,528 5,150
Accrued partnership management fees payable 5,000 5,000 Real estate taxes payable - -
Accrued interest payable 83,534 11,152
Prepaid rents (12,762) -
Tenant security deposit payable 698 (1,943)
NET CASH PROVIDED BY OPERATIONS: $ 14,431 $ (275,555)
See accompanying notes to the financial statements
8 250 of 519
9 Eureka 4th Street LP

NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 2022 and 2021
A. Organization and Significant Accounting Policies
Organization
Eureka 4th Street LP (the Partnership) is a California limited partnership, formed in December 2018. The purpose of the Partnership is to acquire, develop, construct, lease, maintain and operate a 51-unit multifamily housing development known as Bayview Heights Apartments (The Project). The housing development is located in Eureka, California and provides housing for low and very low-income residents with special needs. Construction was completed and operations began in May 2020. Rents are restricted under a Regulatory Agreement with the California Tax Credit Allocation Committee. The Project consists of 25 units reserved for veterans with special needs and 25 units serve those at risk for homelessness. The 25 units reserved for veterans with special needs is served by the designated Veterans Affairs Supportive Housing (VASH) Project-Based Voucher. The remaining 25 units are designated in a master lease agreement between the Partnership and Humboldt County Department of Health and Human Services (DHHS) for use under its homeless program. The Project was awarded by the California Department of Housing and Community Development (HCD) Capitalized Operating Subsidy Reserve (COSR) funds for use under its No Place Like Home (NPLH) program for 19 units. The Project is operating in a manner necessary to qualify for federal low-income housing tax credits as provided under Section 42 of the Internal Revenue Code.

Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting. The financial statements have been prepared solely from the accounts of the partnership, and do not include the personal accounts of the partners.

Revenue Recognition
The Partnership revenue includes revenue from tenant apartment leases, rental assistance, interest income and other income. Revenue is recognized upon the completion of the underlying performance obligations related to the type of revenue.

Recognition of Tenant Lease Revenue and Tenant Rental Assistance The Partnership entered into a rental assistance contract for low- and moderate-income individuals and families in the Eureka, California area. In accordance with the regulations, the tenants are required to meet certain income and asset qualifications in order to occupy a rental apartment unit. Based upon the qualifying income the tenant may receive rental assistance. The rental assistance includes project-based VASH Vouchers provided by the Veterans Affairs and NPLH assistance from the California Department of Housing and Community Development. Under the terms of the agreements the Project is paid the difference between the apartment contract rent and the portion of the rent payable by the tenant.

Tenants are required to recertify their income and assets annually or whenever their income changes. The tenant rent payment may change based upon the recertification. The tenant apartment leases are one-year renewable lease contracts. Monthly tenant rent is recognized on a monthly basis upon occupancy of the rental unit as the performance obligation is satisfied. The annual leases are cancelable by the tenants upon 30-day notice.
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10 Interest and Other Income
The Partnership earns interest on certain bank accounts including the tenant security deposit and replacement reserve accounts. Interest is recorded when paid by the bank. Additionally, the Project provides on-site laundry equipment for use by the Apartment residents, assesses late rental charges and apartment damages to tenants. These amounts are recorded as other income.

Fair Value Measurement of Short-Term Financial Instruments The fair value of short-term financial instruments, including cash and cash equivalents, restricted deposits, accounts receivable, accounts payable and accrued liabilities approximate their carrying value due to the short-term nature of these instruments.

Income Taxes
The Partnership is organized as a limited partnership. Accordingly, all profits and losses of the Partnership are recognized by each partner on their respective tax returns. Federal and state tax authorities generally have the right to examine and audit the previous three years of tax returns filed. Any interest or penalties assessed to the partnership are recorded in operating expenses. For the years ended December 31, 2022 and 2021 there were no penalties recorded in the accompanying financial statements.

Rental Property
Land, buildings, and improvements are recorded at cost. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Management annually evaluates the Project’s property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment losses were recorded for the years ended December 31, 2022 and 2021. Depreciation is provided using the straight-line and/or accelerated methods over the estimated useful lives of the assets, as follows:

Years
Buildings and land improvements 15-40
Building Equipment 7-12
Furnishings 5-7
Maintenance Equipment 5-7
Expenditures for maintenance and repairs are charged to operating expenses as incurred. The cost and accumulated depreciation of assets sold or otherwise retired are removed from the accounts and gain or loss on disposition is included in the results of operations.

Tenant Receivables
Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, security deposit or the charges for damages and cleaning fees. The Partnership does not accrue interest on the tenant receivable balances. The Partnership has not established an allowance for doubtful accounts and does not use the reserve method for recognizing bad debts. Bad debts are written off to bad debt expense in the period management determines that collection is not probable. 252 of 519
11 Deferred Costs
Deferred costs consist of tax credit fees. Deferred costs are amortized using the straight-line method over the tax credit compliance period.

Amortization schedule for tax credit fees:
2023 4,957 $
2024 4,957
2025 4,957
2026 4,957
2027 4,957
24,785
Thereafter 36,348
Total $ 61,133
Permanent Financing Costs
Permanent financing costs consist of loan origination costs. The costs are amortized using the straight line method. Amortization of the costs is reported as interest expense.

Amortization schedule for finance costs:
2023 $ 4,167
2024 4,167
2025 4,167
2026 4,167
2027 4,167
20,835
Thereafter 40,973
Total $ 61,808
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Implementation of new FASB Standards
The Partnership has evaluated ASU No. 2016-02 “Leases” and determined that all of its leases in which the Partnership is the lessor, will continue to be classified as operating leases under the new standard.

Consequently, the impact of implementing this standard will not be material to the financial statements and related disclosures.
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12 B. Restricted Deposits and Funded Reserves
Tenant Security Deposits
Tenant security deposits are deposited into a separate bank account and held in trust for the tenants until they vacate the property. The deposits are held in a federally insured bank account in the name of the Project.

Repayment of the security deposit is to occur within fourteen days of vacancy. Any amounts forfeited by tenants due to lease violations are transferred to the project's operating account.

Replacement Reserves
Under the partnership agreement, the partnership is required to fund a replacement reserve at $2,125 per month and contributions to the replacement reserve began the first month the property achieved stabilized operation.

Expenditures are subject to the approval by the Investor Limited Partner and by HCD.

An analysis of the activity for 2022 and 2021, and the reserve's status at December 31, 2022 and 2021 is:

Replacement Reserve
2022 2021
Balance, January 1, $ 31,875 $ -
Deposits 25,500 31,875
Withdrawals - (2,124)
Balance, December 31, 55,251 $ 31,875 $
Other Reserves
The Partnership is required to maintain certain tax and insurance as well as other escrow deposits and reserve balances. An analysis of the activity for 2022 and 2021 follows:
2022
Beginning End
of year Additions Withdrawals of year
Operating Reserve $ 127,121 $ - $ - $ 127,121
Subsidy Transition Reserve $ 283,416 $ - $ - $ 283,416
Capitalized Operating Subsidy Reserve $ 349,170 $ - $ 113,576 $ 235,594 Compliance Controlled Account $ 369,180 $ - $ - $ 369,180 2021
Beginning End
of year Additions Withdrawals of year
Operating Reserve $- $ 127,121 $ - $ 127,121
Subsidy Transition Reserve $- $ 283,416 $ - $ 283,416
Capitalized Operating Subsidy Reserve $- $ 349,170 $ - $ 349,170 Compliance Controlled Account $- $ 369,180 $ - $ 369,180 254 of 519
13 2022 2021
Real Estate Taxes Payable December 31, $ - $ -
Real Estate Tax Expense $ - $ 12,352
Property Insurance Expense $ 14,798 $ 15,210
Other Tax and Insurance Information
During 2022, the Limited Partnership applied for and received an exemption from property taxes. During 2022, the Project received property tax reimbursements of $50,203, which are recorded as other income. As of December 31, 2022 and 2021, no property tax amounts were due, respectively.

C. Mortgage Notes Payable
The mortgage notes payable consists of a conventional loan from Pacific Western Bank, a loan payable from California Department of Housing and Community Development (HCD) and two loans from Eureka Veterans Village LLC.

The Pacific Western Bank loan is secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. Cash payments of principal and interest are payable in monthly installments. The Construction loan converted to a permanent loan with Pacific Western Bank in August 2021.

Monthly principal and interest payments began August 2021. The accrued interest as of December 31, 2022 and 2021 was $10,125 and $10,210, respectively.

The Partnership has a non-interest loan payable to Eureka Veterans Village LLC secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. The principal balance of the note is due December 2075.

The Partnership has a loan payable to HCD secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. Cash payments of principal and interest are payable in annual installments. Annual payments for 30 years are in the amount of .42% per year on the original principal balance of the loan. The accrued interest as of December 31, 2022 and 2021 was $94,466 and $30,630, respectively.
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14 Long-term debt and related information at December 31, 2022 and 2021 consisted of the following:
2022 2021
Pacific Western Bank loan, original loan balance
$2,070,000; bearing interest at 5.75%, payable in
monthly installments of principal and interest of
$11,569 through 2056. $ 2,051,745 2,044,319 $
HCD loan, bearing simple interest at 3%, payable in
annual installments over 30 years of principal and
interest. The note will mature in August 2076. 1,125,000 1,125,000 Eureka Veterans Village, LLC loan, non-interest
bearing, with the principal balance due 2075. 1,681,808 1,681,808 HCD loan, bearing simple interest at 3%, payable in
annual installments over 30 years of principal and
interest. The note will mature in August 2076. $ 2,798,707 2,798,707 $ 7,657,260 7,649,834
Less current portion (20,201) (19,048)
Total long-term debt $ 7,638,212 7,629,633 $
Maturities of long-term debt for the next five years are:
2023 20,201 $
2024 21,071
2025 22,673
2026 24,030
2027 25,469
113,444
Thereafter 7,536,390
Total 7,649,834 $
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15 D. Related Party Transactions
Property Management Company
The Project is managed by Danco Property Management, (an affiliate of a general partner). The partnership has a management fee agreement with Danco Property Management to pay management fees calculated at 7.7% of gross rental receipts.

Danco employs management and maintenance personnel who perform work for the partnership. The partnership reimburses Danco for the payroll and benefits costs associated with these personnel. Unpaid management fees and payroll costs are included in accounts payable.
2022 2021
Management Fees $ 40,456 $ 50,605
Payroll Payments $ 51,061 $ 65,850
Unpaid Management Fees at December 31, $ 7,426 $ -
Unpaid Payroll Costs at December 31, $ 55,065 $ -
Developer Fees
The Partnership contracted with Danco Communities (an affiliate of a general partner) to provide development services to the Partnership for a $2,209,265 development fee. During 2022 and 2021 the Partnership paid developer fees of $133,841 and $539,874, respectively. The unpaid balance of accrued developer fees as of December 31, 2022 and 2021 was $681,428 and $815,269, respectively.

Asset Management Fee
The Partnership has agreed to pay the Limited Partner an asset management fee of $5,000 per annum for its services in reviewing the informational reports, financial statements, and tax returns of the partnership. The fee is to be increased annually by 3%. The fees incurred during 2022 and 2021 totaled $5,332 and $5,150, respectively. The unpaid balance at December 31, 2022 and 2021 was $11,011 and $8,483, respectively.

Partnership Management Fee
The Partnership has agreed to pay Eureka Veterans Village LLC (the Managing General Partner) an annual management fee of $5,000. During 2022 and 2021, the Managing General Partner earned and accrued a partnership management fee of $5,000 and $5,000. The unpaid balance at December 31, 2022 and 2021 was $13,333 and $8,333, respectively.

Due to Affiliates
During 2022, the Partnership received funds from a related entity. The unpaid balance at December 31, 2022 was $20,000.
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16 Related party receivables
The Partnership has receivables relating to the payment of a one-time monitoring fee paid by Danco Communities to TCAC. The outstanding balance as of December 31, 2022 and 2021 as follows:

Related Party Receivables
December 31, December 31,
2022 2021
Due from Danco Communities $ 410 $ 410
E. Concentrations and Risks
Economic Concentrations and Risks
The Partnership’s sole asset is Bayview Heights Apartments. The Partnership’s operations are concentrated in the affordable housing real estate market. In addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives, rules and regulations are subject to change by an act of Congress or other regulatory agency. Such changes may occur with little or inadequate funding to pay for the related costs, including the additional administrative burden, to comply with a change.

F. Subsequent Events
Management has evaluated events through February 10, 2023, the date which the financial statements were available to be issued.

G. Additional Capital Contributions
In accordance with the Partnership Agreement, the limited partner is required to make an additional capital contributions in the amount of $100,000 (subject to adjustment). The capital contribution will be used to pay amounts set forth in the development budget.

Capital contributions are made by the Limited Partner as the Partnership reaches certain operational benchmarks, including achievement of occupancy targets, and receipt of permanent financing and a final allocation of low-income housing tax credits. Capital contributions during 2022 and 2021 were $0 and $5,655,592, respectively.

H. Reclassifications
We have reclassified certain items in the accompanying financial statements and notes thereto for prior periods to be comparable with the classification for the year ended December 31, 2021. These reclassifications had no effect on previously reported net income.

I. Cash Deposits
The partnership maintains cash deposits at various banks. The amount insured by the Federal Deposit Insurance Corporation is $250,000. At December 31, 2022, the deposits at one bank totaled $1,102,490, which exceeds the $250,000 maximum. Therefore, at December 31, 2022, $852,490 of the deposits were uninsured.

At December 31, 2021, the deposits at one bank totaled $1,201,049, which exceeds the $250,000 maximum. Therefore, at December 31, 2021, $951,049 of the deposits were uninsured.

The Partnership has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash or cash equivalents.
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17 Eureka 4th Street LP
(A California Limited Partnership)

SUPPLEMENTARY INFORMATION
Years Ended December 31, 2022 and 2021
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EUREKA 4TH STREET LP

SCHEDULE OF OPERATING REVENUES AND EXPENSES
For the Year Ended December 31, 2022
NPLH
Assisted Other Total

REVENUES

Rent Revenue
5120 Rent Revenue - Gross Potential $ 197,824 $ 333,248 $ 531,072 5100T Total Rent Revenue 197,824 333,248 531,072
Vacancies
5220 Apartments 2,114 3,561 5,675
5200T Total Vacancies 2,114 3,561 5,675
5152N Net Rental Revenue (Rent Revenue Less Vacancies) 195,710 329,687 525,397 Other Revenue
5910 Laundry and Vending Revenue 1,932 3,254 5,186
5920 Tenant Charges 501 1,692 2,193
5990 Miscellaneous Revenue - 47,485 47,485
5900T Total Other Revenue 2,433 52,431 54,864
5000T Total Revenue 198,143 382,118 580,261
Administrative Expenses
6210 Advertising and Marketing - 179 179
6311 Office Expenses 2,841 5,256 8,097
6315 Credit Check - 146 146
6320 Management Fee 15,070 25,386 40,456
6330 Manager or Superintendent Salaries 12,634 21,282 33,916 6340 Legal Expense - Project 931 1,694 2,625
6350 Audit Expense 3,315 5,585 8,900
6370 Bad Debts 1,974 3,326 5,300
6390-010 Telephone/Internet 1,051 2,613 3,664
6390-020 Site Services Coordinator 70,833 - 70,833
6263T Total Administrative Expenses 108,649 65,467 174,116 Utilities Expenses
6450 Electricity 14,267 24,034 38,301
6451 Water 4,089 5,634 9,723
6452 Gas 28 47 75
6453 Sewer 4,209 7,089 11,298
6400T Total Utilities Expense 22,593 36,804 59,397
See Accountants' Report on Supplemental Information
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EUREKA 4TH STREET LP

SCHEDULE OF OPERATING REVENUES AND EXPENSES
(CONTINUED)
For the Year Ended December 31, 2022
NPLH
Assisted Other Total
Operating & Maintenance Expenses
6510 Payroll 5,366 8,866 14,232
6515 Supplies 1,204 1,547 2,751
6520 Contracts 2,228 3,752 5,980
6525 Garbage and Trash Removal 5,726 9,647 15,373
6530 Security Payroll/Contract 131,564 564 132,128
6541 Repairs Material 11,728 2,963 14,691
6590-010 Gardening Service 523 636 1,159
6590-020 Security Monitoring 824 1,389 2,213
6590-030 Pest Control 161 403 564
6500T Total Operating and Maintenance Expenses 159,324 29,767 189,091 Taxes & Insurance
6710 Real Estate Taxes
6720 Property & Liability Insurance (Hazard) 5,512 9,286 14,798 6790 Miscellaneous Taxes, Licenses, Permits and Insuranc 1,964 3,309 5,273 6700T Total Taxes and Insurance 7,476 12,595 20,071
Total Operating Expenses 298,042 144,633 442,675
Financial Expenses
6820 Interest on First Mortgage (or Bonds) Payable 90,006 241,628 151,622 6800T Total Financial Expenses 90,006 241,628 151,622
Operating Results
6000T Total Cost of Operations before Depreciation 296,255 388,048 684,303 5060T Profit (Loss) before Depreciation (189,905) 85,863 (104,042) 6600 Depreciation Expenses 238,000 400,926 638,926
6610 Amortization Expense 1,846 3,111 4,957
5060N Operating Profit or (Loss) (429,751) (318,174) (747,925) Entity Expenses
6390-010 Partnership Management Fee 1,863 3,137 5,000
6390-020 Asset Management Fee 1,986 3,346 5,332
7100T Total Net Entity Expenses 3,849 6,483 10,332
Profit or Loss - Profit Motivated
3250 Profit or Loss (Net Income or Loss) $ (433,600) $ (324,657) $ (758,257) See Accountants' Report on Supplemental Information
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EUREKA 4TH STREET LP

SUPPLEMENTARY INFORMATION REQUIRED BY THE

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
For the Year Ended December 31, 2022
Cash on Hand and in Banks 2022
Unrestricted accounts:

Checking Accounts $ 8,575
Total $ 8,575
Restricted accounts:

Replacement Reserves $ 55,251
Rental Security Deposit 14,298
Operating Reserve 127,121
Subsidy Transition Reserve 283,416
Capitalized Operating Subsidy Reserve 235,594
Compliance Controlled Account 369,180
Total $ 1,084,860
Replacement Reserve and Operating Reserve
Replacement Operating
Reserve Reserve
Balance, December 31, 2021 $ 31,875 $ 127,121
Monthly Deposits
Twelve months at $2,125 per month 25,500 -
Withdrawals (amount included in operating expense) (2,124) - Balance, December 31, 2022 $ 55,251 $ 127,121
See Accountants' Report on Supplemental Information
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EUREKA 4TH STREET LP

SUPPLEMENTARY INFORMATION REQUIRED BY THE

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
(CONTINUED)
For the Year Ended December 31, 2022
Property, Equipment and Improvements
Land &
Improvements
Building &
Improvements
Furniture &
Fixtures Total
Balance, December 31, 2021 $ 2,802,144 $ 14,221,362 $ 887,079 $ 17,910,585 Additions - - - -
Balance, December 31, 2022 $ 2,802,144 $ 14,221,362 $ 887,079 $ 17,910,585 Accounts Payable and Accrued Expenses
Accounts payable are payable to vendors and are being paid on a current basis, Detail follows:

Accounts Payable - Trade $ 75,090
Gross Potential Rents
Tenant Rental Payments $ 525,397
Vacancy Loss 5,675
Total Gross Potential Rents $ 531,072
Management Fee
Property Management Fee $ 40,456
A property management fee was incurred during 2022 for the property management services provided by Danco Property Management.

See Accountants' Report on Supplemental Information
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EUREKA 4TH STREET LP

SUPPLEMENTARY INFORMATION REQUIRED BY THE

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
(CONTINUED)
For the Year Ended December 31, 2022
Operating cash flow/surplus cash will be distributed according to the HCD method.

Operating Income
Total Income $ 580,261
Operating Expenses (442,675)
Adjusted Net Income 137,586
Other Activity
Mandatory Debt Service
Pacific Western Bank (138,830)
HCD-NPLH (11,755)
HCD-VHHP (4,725)
Deposits into Replacement Reserve Account (25,500)
Total Other Activity (180,810)
Operating Cash Flow/Surplus Cash $ (43,224)
See Accountants' Report on Supplemental Information
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23 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINCANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors' Report
February 10, 2023
To the Partners
Eureka 4th Street LP
(A California Limited Partnership)
Arcata, California
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 Eureka 4th Street LP (A California Limited Partnership), which comprise the balance sheet as of December 31, 2022, and the related statements of operations, changes in partners’ capital, and cash flows for the year then ended and the related notes to the financial statements, and have issued our report thereon dated February 10, 2023.

Report on Internal Control Over Financial Reporting
In planning and performing our audit, we considered Eureka 4th Street LP’s internal control over financial reporting (internal control) as a basis for designing 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 Eureka 4th Street LP’s internal control. Accordingly, we do not express an opinion on the effectiveness of Eureka 4th Street LP’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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. Given those 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 were not identified. 6149 N. Meeker Place, Suite 250 • Boise, Idaho 83713 • (208) 287-5353 • Fax (208) 994-0716 265 of 519
24 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Eureka 4th Street LP's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.

The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standard and which are described in the accompanying Schedule of Findings and Questioned Costs as Findings 2022-001 and 2022-002.

Eureka 4th Street LP’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on Eureka 4th Street LP's response to the noncompliance and internal control over compliance findings identified in our audit described in the accompanying Schedule of Findings and Questioned Costs. Eureka 4th Street LP's response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

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 of the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Eureka 4th Street LP’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Boise, ID
Leavitt, Christensen & Co., PLLC
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25 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS Year Ended December 31, 2022
Finding 2022-001
Compliance Finding:

Over billed payroll expenses
Condition and Context:

The Property Management Company overbilled the project for payroll expenses.

Cause:

We noted that during the year, the property management company included a profit margin in the payroll charges billed to the Project
Criteria:

The property management company cannot receive funds in excess of reasonable payroll cost reimbursements.

Effect:

The Project is out of compliance with the Partnership Agreement and Lenders’ Regulatory Agreement.

Recommendation:

The property management company should only charge the Project the actual amount of payroll expenses. 267 of 519
26 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS

MANAGEMENT RESPONSE
Year Ended December 31, 2022
Finding 2022-001
Compliance Finding:

Over billed payroll expenses
Condition and Context:

The Property Management Company overbilled the Project for payroll expenses.

Management Response:

The Property Management Company will only charge the Project the actual amount of payroll expenses going forward.
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27 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS Year Ended December 31, 2022
Finding 2022-002
Compliance Finding
Unauthorized transfers
Condition and Context:

Criteria:

Cause:

Effect:

The Partnership is required to maintain certain reserves in accordance with the Partnership Agreement and the Lenders' Regulatory Agreement. During our audit, we noted reserves which were transferred outside of the Partnership. The funds were then transferred back into the reserves during January 2022.

The Project reserves should remain fully funded throughout the year and should only be moved with the proper authorization.

The Management did not follow the Partnership and Lenders’ Regulatory Agreement in maintaining the reserves.

The Project is out of compliance with the Partnership Agreement and Lenders’ Regulatory Agreement.

Recommendation:

We recommend that the project should only transfer funds outside the Partnership with the proper authorization.
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28 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS

MANAGEMENT RESPONSE
Year Ended December 31, 2022
Finding 2022-002
Compliance Finding
Unauthorized transfers
Condition and Context:

Management Response:

The funds were transferred back into the reserve bank accounts during January 2022. The Project will avoid making unauthorized transfers in the future.
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29 Eureka 4th Street LP
(A California Limited Partnership)
AUDITORS’ COMMENTS ON PRIOR YEAR AUDIT FINDINGS
Year Ended December 31, 2022

PRIOR YEAR FINDINGS
Finding 2021-001
Compliance Finding
Unauthorized transfers
Condition and Context:

Criteria:

Cause:

The Partnership is required to maintain certain reserves in accordance with the Partnership Agreement and the Lenders' Regulatory Agreement. During the prior auditor’s audit, they noted that reserves were initially funded upon the permanent loan close. Then these funds were transferred outside of the Partnership. The funds were then transferred back into the reserves on December 30, 2021. These reserves were fully funded as of December 31, 2021; however, the funds were again transferred outside of the Partnership on January 3, 2022.

The Project reserves should remain fully funded throughout the year and should only be moved with the proper authorization.

The Management did not follow the Partnership and Lenders’ Regulatory Agreement in maintaining the reserves.

Effect:

The Project is out of compliance with the Partnership Agreement and Lenders’ Regulatory Agreement.

AUDITORS’ COMMENTS:

We find that in 2022 the management company continued to transfer funds outside the Partnership. See Current Year Audit Finding 2022-002.
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Eureka Aster Place, LP
A California Limited Partnership
Financial Statements
For the Years Ended December 31, 2021 and 2020
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Eureka Aster Place, LP
December 31, 2021 and 2020

CONTENTS
Page
Financial Statements
Independent Auditors' Report 1
Balance Sheets 4
Statements of Income 5
Statements of Changes in Partners' Capital 6
Statements of Cash Flows 7
Notes to the Financial Statements 9
Supplementary Information 21 - 22
Independent Auditors' Report on Compliance With Specific Requirements Applicable to NonMajor USDA GRRHP 23 Independent Auditors' Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination 25
RD Supplemental Information 26
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Independent Auditors' Report
To the Partners
Eureka Aster Place, LP
Report on the Financial Statements
Opinion
We have audited the accompanying financial statements of Eureka Aster Place, LP, a limited partnership, which comprise the balance sheets as of December 31, 2021 and 2020 and the related statements of income, changes in partners' capital, and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Eureka Aster Place, LP as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Eureka Aster Place, LP and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
4487 N. Dresden Place, Suite 101 - Boise, Idaho 83714 - Phone (208) 375-6490 - Fax (208) 375-6593 - www.gbbaccounting.com 294 of 519
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, 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 performing an audit in accordance with generally accepted auditing standards, 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 Eureka Aster Place, LP '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 Eureka Aster Place, LP'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.
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Other Matters
Report on Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information referenced in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects, in relation to the financial statements as a whole.

Report on Other Legal and Regulatory Requirements
In accordance with the U.S. Department of Agriculture ("USDA") Guaranteed Rural Rental Housing Program ("GRRHP") Supplemental Government Auditing Standards Guide ("The Guide"), we have issued our report dated April 5, 2022 on our consideration of Eureka Aster Place, LP's compliance with specific requirements applicable to a non-major USDA GRRHP program. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion on compliance with the Guide.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
April 05, 2022
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Eureka Aster Place, LP
Balance Sheets
December 31, 2021 and 2020
2021 2020
Assets
Cash and Cash Equivalents $ 5,204 $ 42,411
Prepaid Expenses 2 11
Restricted Cash:

Tenant Security Deposits 26,937 26,217
Escrow Deposits 13,577 10,676
Replacement Reserve 177,827 159,458
Other Reserves 165,653 176,282
Rental Property, net 6,049,100 6,326,275
Other Assets 8,408 9,960
Total Assets $ 6,446,708 $ 6,751,290
Liabilities and Partners' Capital
Liabilities
Accounts Payable $ 6,070 $ 5,451
Accrued Interest Payable 1,179,219 1,060,719
Security Deposits Liability 26,957 26,098
Related Party Payables 211,404 241,122
Long-Term Debt, net 5,782,979 5,835,275
Total Liabilities 7,206,629 7,168,665
Partners' Capital
Partners' Capital (759,921) (417,375)
Total Liabilities and Partners' Capital $ 6,446,708 $ 6,751,290 The accompanying notes are an integral part of these financial statements. 4 297 of 519
Eureka Aster Place, LP
Statements of Income
For the Years Ended December 31, 2021 and 2020
2021 2020
Operating Revenue
Net Rental Income $ 372,187 $ 371,826
Miscellaneous Income 10,905 16,528
Total Operating Revenue 383,092 388,354
Operating Expenses
Administrative Expenses 71,662 72,047
Utilities 51,173 46,413
Operating and Maintenance Expenses 88,814 79,341
Taxes and Insurance 20,789 18,247
Total Operating Expenses 232,438 216,048
Net Operating Income 150,654 172,306
Non-Operating Income (Expenses)
Interest Income 195 275
Interest Expense (182,435) (182,993)
Depreciation Expense (277,175) (277,175)
Amortization Expense (1,552) (1,552)
Bond Fees (30,186) (29,282)
Asset Management Fee (8,867) (8,609)
Partnership Management Fee (4,000) (4,000)
Other Non-Operating Income 10,820 -
Total Non-Operating Income (Expenses) (493,200) (503,336) Net Loss $ (342,546) $ (331,030)
The accompanying notes are an integral part of these financial statements. 5 298 of 519
Eureka Aster Place, LP
Statements of Changes in Partners' Capital
For the Years Ended December 31, 2021 and 2020
General
Partners
(.01%)
WNC Inst.

Tax Credit
Fund Calif.

Series 8,
LP
(20.884%)
WNC
Institutional
Tax Credit
Fund XXVI,
LP (8.353%)
WNC
Institutional
Tax Credit
Fund 32, LP
(70.743%)
WNC
Housing,
LP (.01%)
Total
(100.00%)
Prior Year Activity
Balance, January 1, 2020 $ (234) $ (17,964) $ (7,172) $ (60,842) $ (133) $ (86,345) Net income (loss) for the period (33) (69,132) (27,651) (234,181) (33) (331,030) Balance, December 31, 2020 (267) (87,096) (34,823) (295,023) (166) (417,375) Current Year Activity
Net income (loss) for the period (35) (71,537) (28,613) (242,327) (34) (342,546) Balance, December 31, 2021 $ (302) $ (158,633) $ (63,436) $ (537,350) $ (200) $ (759,921) The accompanying notes are an integral part of these financial statements. 6 299 of 519
Eureka Aster Place, LP
Statements of Cash Flows
For the Years Ended December 31, 2021 and 2020
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash Receipts
Rental Receipts $ 372,187 $ 371,826
Interest Receipts 195 275
Other Operating Receipts 21,725 16,528
Total Receipts 394,107 388,629
Disbursements
Administrative (43,235) (48,294)
Management Fee (27,808) (26,028)
Utilities (51,173) (46,413)
Operating and Maintenance (106,309) (67,378)
Real Estate Taxes (4,677) (6,359)
Property Insurance (12,853) (9,396)
Taxes and Insurance (3,250) (2,503)
Tenant Security Deposits 859 (200)
Interest on Mortgage and Notes Payable (56,231) (56,789) Partner Fees (8,609) (12,358)
Bond Fees (30,186) (29,282)
Total Disbursements (343,472) (305,000)
NET CASH FLOWS PROVIDED BY (USED BY) OPERATING ACTIVITIES 50,635 83,629 CASH FLOWS FROM INVESTING ACTIVITIES:

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal Payments - Mortgages and Notes Payable (60,000) (40,000) Principal Payments on Loans or Notes Payable (16,481) - NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES (76,481) (40,000) Net cash increase (decreases) in cash, restricted cash, and cash equivalents (25,846) 43,629 Cash, restricted cash, and cash equivalents at beginning of period 415,044 371,415 Cash, restricted cash, and cash equivalents at end of period $ 389,198 $ 415,044 The accompanying notes are an integral part of these financial statements. 7 300 of 519
Eureka Aster Place, LP
Statements of Cash Flows (Continued)
For the Years Ended December 31, 2021 and 2020
2021 2020
Cash, restricted cash, and cash equivalents consist of the following:

Cash and Cash Equivalents $ 5,204 $ 42,411
Tenant Security Deposits 26,937 26,217
Escrow Deposits 13,577 10,676
Replacement Reserve 177,827 159,458
Other Reserves 165,653 176,282
$ 389,198 $ 415,044
Reconciliation of Net Income to Net Cash Flow Provided By (Used By) Operating Activities
Net Loss (342,546) (331,030)
Adjustments to reconcile net loss to net cash provided by (used by) operating activities
Depreciation 277,175 277,175
Amortization 1,552 1,552
Amortization/Interest Debt Issuance Costs 7,704 7,704
(Increase) decrease in assets
Prepaid Expenses 9 (11)
Increase (decrease) in liabilities
Accounts Payable 619 (2,275)
Accrued Interest Payable 118,500 118,500
Security Deposits Liability 859 (200)
Related Party Payables (13,237) 12,214
Net cash provided by (used by) operating activities $ 50,635 $ 83,629 The accompanying notes are an integral part of these financial statements. 8 301 of 519
Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

1. Organization
a. Partnership
The financial statements reflect the accounts of Eureka Aster Place, LP (aCalifornia Limited Partnership) only and consequently, do not include all assets, liabilities, income and expenses of the partners. The partnership was formed in 2010. The General Partners are: Community Revitalization and Development Corporation, Managing General Partner, (0.005%), TPC Holdings I, LLC, Administrative General Partner, (.0025%), and Johnson & Johnson Investments, LLC, Administrative General Partner, (.0025%). The Limited Partners are:

WNC Institutional Tax Credit Fund XXVI, LP (8.353%) and WNC Institutional Tax Credit Fund 32, LP (70.743%), and WNC Institutional Tax Credit Fund X California Series 8, LP (20.884%). The Special Limited Partner is WNC Housing, LP (.01%). The partnership was formed for the purpose of constructing acquiring, owning, operating, managing, and selling or otherwise disposing of a 40-unit rental apartment project in Eureka, California known as Eureka Aster Place Apartments. The project construction was completed in May 2012 when rental operations also began. The project operates in accordance with a regulatory agreement signed with the California Tax Credit Allocation Committee intended to keep the project in compliance with Section 42 of the Internal Revenue Code and qualify for the Federal Low Income Housing Tax Credit. Each building of the project must meet the provisions of these regulations (occupant eligibility and unit gross rent) in order to remain qualified to receive the credits.

2. Significant Accounting Policies
a. Accounting Method
The financial statements are prepared in accordance with generally accepted accounting principles in the United States, and conform in all material respects with International Accounting Standards with regards to the presentation of historical cost financial information. Under the accrual basis of accounting, income is recognized as earned and expenses as incurred, regardless of timing of payment. b. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and may have impact on future periods. c. Reclassifications
Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.
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Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

Restricted cash is not considered cash and cash equivalents, and includes cash held with financial institutions for refunds of tenant security deposits, funding of operating deficits, and repairs or improvements to the buildings which extend their useful lives.
e. Rental Property
Rental property is carried at cost. Depreciation is calculated using the straight-line method over estimated useful lives ranging from 10 to 40 years. Depreciation expense for December 31, 2021 was $ 277,175 (2020 - $ 277,175).
f. Impairment of Long Lived Assets
The partnership reviews its rental property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When recovery is reviewed, if the undiscounted cash flows estimated to be generated by the property are less than their carrying amounts, management compares the carrying amount of the property to its fair value in order to determine whether an impairment loss has occurred. The amount of the impairment loss is equal to the excess of the asset’s carrying value over its estimated fair value. No impairment loss has been recognized during the years ended December 31, 2021 and 2020.
g. Other Assets - Deferred Fees
Other assets include tax credit agency fees of $23,281 related to obtaining the application and allocation of low income housing tax credits from the state agency. Other assets are amortized on a straight-line basis over the life of the 15 year compliance period). Accumulated amortization totaled $14,873 and $13,321 as of December 31, 2021 and 2020, respectively.
h. Debt Issuance Costs
Unamortized debt issuance costs of $242,021 and $249,725 at December 31, 2021 and 2020 are reported as a direct reduction of the obligation to which such costs relate. Amortization of debt issuance costs of $7,704 and $7,704 is reported as a component of interest expense and is computed using the straight-line method which is not significantly different than the effective interest method. 10 303 of 519
Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

2. Significant Accounting Policies (Continued)
i. Revenue Recognition - Rental Revenue and Receivable
The partnership’s primary revenue stream is rent charges for residential units under leases with durations of less than one year. The partnership records revenue for such leases at gross potential rent. Rental revenue is recognized as rentals become due, net of provisions for uncollectible amounts. Rental payments received in advance are deferred until earned. The rental value of vacancies and other concessions are stated separately to present net rental income on the accrual basis. Subsidy revenue for certain low-income eligible tenants is provided under a Section 8 voucher. The partnership believes that such both rental and subsidy income streams are exempted from compliance with ASC 606 due to their inclusion under current and future lease standards. Revenue streams subject to ASC 606 include: tenant reimbursement of consumption-based costs paid by the partnership on behalf of the tenant, such as utilities and other monthly fees. Additional revenue includes laundry, vending, pet and parking fees as well as damages. Such fees are ancillary to the lease process and are recognized as revenue at the point in time such fees are incurred.

Management considers receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been provided. If amounts become uncollectible, they are charged to operations in the period in which determination is made. U.S. generally accepted accounting principles ("GAAP") requires that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. j. Advertising Cost
Advertising and marketing costs are expensed as incurred. For years ending 2021 and 2020, advertising and marketing costs totaled $199 and $188, respectively.
k. Income Taxes
Under the provisions of the Internal Revenue Code and applicable state laws, the Partnership is not directly subject to income taxes; the results of its operations are includable in the tax returns of its partners. Therefore, no provision for income tax expense has been included in the accompanying financial statements. While no income tax returns are currently being examined by the Internal Revenue Service, tax years dating back three years remain open.
l. Economic Concentrations and Contingencies
The partnership operates on property located in Eureka, California. Future operations could be affected by changes in the economy or other conditions in that geographical area or by changes in federal low-income housing subsidies or the demand for such housing. The project's low-income housing tax credits and regulatory agreement require compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility, and/or unit gross rent, or to correct non-compliance within a specified time period could result in recapture of previously taken tax credits plus interest. In addition, such potential non-compliance may require an adjustment to the contributed capital of the limited partner. 11 304 of 519
Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

2. Significant Accounting Policies (Continued)
m. Financial instruments
The partnership has determined that the estimated fair value of the financial assets and liabilities do not differ considerably from their book value.

3. Related Party Transactions
a. Partner Fees
An annual asset management fee of $7,000 is payable to the limited partner, increasing by three percent (3%) per year. An annual partnership management fee of $4,000 is payable to the managing general partner. These fees are cumulative and payable from net operating income beginning in 2013.

The partnership agreement provides for two payments beginning in 2013 to the Administrative General Partner, a non-cumulative Tax Credit Compliance Fee of 40% of Net Operating Income and a non-cumulative Incentive Management Fee of up to 40% of net operating income. These fees are not to exceed 50% of the amount by which 12% of cash receipts exceeds the amount of any fees paid to the Management Agent. b. Developer Fee Payable
A developer fee of $971,146 was accrued to an affiliate of the general partner upon completion of the project in 2012. The general partner guaranteed construction completion and any development deficits by agreeing to defer a portion of the fee that could not be paid out of all sources of debt and equity until sufficient cash flows for payment could be generated from operations. The fee will be paid in full by December 31, 2026. c. Guarantees
Operating Deficit Guaranty - The administrative general partner will provide funds to the partnership necessary to pay any operating deficit in the form of a loan to the partnership. The maximum amount of this obligation is 12 month of operating expenses (including debt and reserves), which, as agreed to by the administrative general partner and the special limited partner, is $308,834.

Replacement Reserve Guaranty - The general partner guarantees that they will contribute to the partnership any funds required to ensure that $459 per unit per year is funded into a replacement reserve account. 12 305 of 519
Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

3. Related Party Transactions (Continued)
d. Operating Cash Flow
Cash flow, which means the excess of Cash Receipts over Cash Expenditures as determined for each fiscal year or portion thereof, shall be distributed in the following order of priority as defined by the partnership agreement.

1. To the Limited Partner to repay any voluntary funding.

2. To pay any Tax Credit adjuster not paid by the General Partners.

3. To pay any deferred management fees.

4. To pay the current asset management fees and then any unpaid accrued asset management fees to the limited partner.

5. To pay an annual partnership management fee and unpaid accrued partnership management fees to the managing general partner.

6. To pay interest and then principal on the development fee.

7. Of the balance, 50% to pay operating loans, if any.

8. Pro rata, to pay the incentive management fee and the tax credit compliance fee.

9. The balance will be distributed 8.353% to Fund 26, 70.743% to Fund 32, 20.884% to California 8, 0.01% to the special limited partner, 0.5% to the managing general partner, 0.0025% to TPC Holdings I, and 0.0025% to Johnson.
e. Related Party Receivables/Payables
Amounts due from and due to related parties are as follows:
2021 2020
Due to related parties
Deferred Developer Fee Payable $ 172,246 $ 188,727
Asset Management Fee Payable 8,867 8,609
Partnership Management Fee Payable 4,000 -
Accounts Payable - Related Party 26,291 43,786
Total $ 211,404 $ 241,122
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Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

4. Property Management Fees
The partnership entered into an agreement on November 15, 2010 with Danco Management Company (an affiliate of the general partners) for management of the housing development. Monthly management fees are seven percent (7%) of gross monthly income. There is also a one time rent-up fee of $150 per unit to be paid upon full occupancy.

Management Fees of $27,808 and $26,028 were paid during 2021 and 2020, respectively.

5. Rental Property
Rental property consists of the following:
2021 2020
Land $ 875,000 $ 875,000
Buildings 5,741,428 5,741,428
Land Improvements 1,775,078 1,775,078
Furniture and Fixtures 308,896 308,896
Total cost 8,700,402 8,700,402
Accumulated Depreciation (2,651,302) (2,374,127)
Total Rental Property, net $ 6,049,100 $ 6,326,275
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Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

6. Restricted Cash
a. Cash Reserve Account
The partnership agreement requires the establishment of a capital replacement reserve account in the amount of $459 per unit per year ($18,360). Funding of the account commenced in 2013. The deposits will be released to the partnership upon requests for capital replacements. The balance in the account at December 31, 2021 and 2020 was $167,001 and $148,632, respectively.

The partnership funded a supplemental replacement reserve during 2013. The balance in the account at December 31, 2021 and 2020 was $10,826 and $10,826, respectively. b. Tenant Security Deposits
Tenant security deposits are required to be maintained in separate accounts in banks insured by FDIC. The balance on December 31, 2021 and 2020 was $26,937 and $26,217, respectively. The security deposit account was underfunded by $20 at December 31, 2021.
c. Tax and Insurance Account
The general partner is required to open a tax and insurance account and deposit monthly one twelfth (1/12) of the annual required amount. Funding commenced in 2013.
d. Other Reserves Account
The partnership agreement requires the general partner to open an operating reserve account in the amount of $154,417. The account was funded in 2013 and the account balance at December 31, 2021 and 2020 was $158,547 and $158,388, respectively.

The bond loan agreement requires the establishment of a principal reserve account. The deposits in the account will be used to make the required principal payments on the bond loan. The balance at December 31, 2021 and 2020 was $7,106 and $17,894, respectively.

The general partner is required to establish an asset management reserve in the amount of $25,000 funded from the capital contribution. The account was not funded. 15 308 of 519
Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

6. Restricted Cash (Continued)
e. Restricted Account Activity
Replacement Reserve T & I Account Other Reserves
Prior Year Activity
Balance, beginning of period $ 139,436 $ 10,276 $ 169,175 Deposits 20,000 9,785 46,881
Interest 46 - 226
Withdrawals (24) (9,385) (40,000)
Balance, end of period 159,458 10,676 176,282
Current Year Activity
Deposits 20,000 16,816 49,212
Interest 36 - 159
Withdrawals (1,667) (13,915) (60,000)
Subtotal, current year activity 18,369 2,901 (10,629)
Balance, end of period $ 177,827 $ 13,577 $ 165,653
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Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

7. Long-Term Debt
a. Mortgage and Notes Payable
2021
Interest
Payable
2021
Principal
2020
Interest
Payable
2020
Principal
Permanent Loan-Wells Fargo
The construction loan is the initial phase of the bond loan with Citi dated July 19, 2010 and is for a maximum of $5,000,000. It was funded by California Statewide Communities Development
Authority Multifamily Housing Revenue Bonds 2009 Series A-13 in the amount of $2,150,000. Interest only payments were due during construction. This loan converted to the permanent loan on June 1, 2013.

The permanent bond loan with Wells Fargo closed June 1, 2013 and will mature June 6, 2043. The interest rate is 3.01% and the loan is secured by the real property. Monthly expenses for credit enhancement, servicing, trustee, and issuer fees total an additional 1.54%. The monthly principal payment is being deposited into a principal payment reserve. The principal payment reserve funds will be used to make the semi-annual principal payments as required by the trustee. Interest expense for 2021 totaled $56,231 (2020 - $56,789).
$ - $ 1,800,000 $ - $ 1,860,000
HOME Loan Payable - County of Humboldt
The HOME loan, dated November 1, 2010, is with the County of Humboldt from the HOME Investment Partnerships Program in the amount of $3,950,000. The loan matures 55 years after
completion of construction and bears interest at three percent (3%). Payments are to be made from 50% of residual receipts (after fees), first to unpaid interest and then to unpaid principal. No principal payments are anticipated during the next five years.

Interest expense for 2021 totaled $118,500 (2020 - $118,500). 1,179,219 3,950,000 1,060,719 3,950,000
Community Development Block Grant Program Loan
The CDBG Program loan, dated November 1, 2010, is with the County of Humboldt in the amount of $275,000. The interest rate is zero percent (0%) and matures 55 years after the completion date. No principal payments are anticipated during the next five years.Interest expense for 2021 totaled $0 (2020 - $0). - 275,000 - 275,000
Subtotal Interest and Principal 1,179,219 6,025,000 1,060,719 6,085,000 Less: Unamortized Debt Issuance Costs (242,021) (249,725) Total Long-Term Debt, net $ 1,179,219 $ 5,782,979 $ 1,060,719 $ 5,835,275 17 310 of 519
Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

7. Long-Term Debt (Continued)
b. Schedule of Principal Maturities
The principal payments per annum on the mortgages and notes payable are due as follows:
2022 $ 45,926
2023 47,328
2024 48,772
2025 50,261
2026 51,795
Subsequent 5,780,918
Total $ 6,025,000

8. Subsequent Events
Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date, require disclosure in the accompanying notes. Management evaluated the activity of the partnership through April 05, 2022 (the date the financial statements were available to be issued) and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.

9. Federal Low-Income Housing Tax Credits
The partnership was allocated low-income housing federal tax credits by the California Low-Income Housing Tax Credit Program amounting to $3,300,162 in federal tax credits. The 8609's have been issued and it is estimated that for the year ended December 31, 2021 $328,347 federal tax credits will be utilized by the partners.

The expected availability of the remaining federal tax credits in the future are estimated as follows:
2022 $ 200,667
2023 6,827
2024 6,045
2025 6,045
2026 6,045
Total $ 225,629
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Eureka Aster Place, LP
Notes to the Financial Statements
For the Years Ended December 31, 2021 and 2020

10. Commitments and Contingencies
The partnership has qualified for low-income housing tax credits which are contingent on its ability to remain in compliance with the applicable requirements of Section 42 of the Internal Revenue Code. Failure to maintain compliance with occupant eligibility, and/or unit gross rent or to correct non-compliance within a specific time period, could result in recapture of previously issued tax credits plus interest. In addition, under the terms of the Limited Partnership Agreement, such potential non-compliance could require a refund of previously contributed capital by the Investor Limited Partner.
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Supplementary Information
20 313 of 519
Eureka Aster Place, LP
For the Years Ended December 31, 2021 and 2020
Schedule of Operating Expenses
2021 2020
Administrative Expenses
Advertising and Marketing $ 199 $ 188
Other Renting Expenses (1,199) 41
Office Expenses 4,147 3,333
Property Management Fees 27,808 26,028
Manager or Superintendent Salaries 33,144 31,362
Legal Expense - Project 851 5,312
Audit Expense 4,875 4,825
Miscellaneous Administrative Expenses 1,837 958
Total Administrative Expenses 71,662 72,047
Utilities
Electricity 12,596 9,359
Water 13,535 15,368
Sewer 25,042 21,686
Total Utilities 51,173 46,413
Operating and Maintenance
Payroll 19,986 13,206
Supplies 5,211 5,318
Contracts 15,232 12,300
Garbage and Trash 37,771 25,887
Miscellaneous Operating and Maintenance Expense 10,614 22,630 Total Operating and Maintenance 88,814 79,341
Taxes and Insurance
Real Estate Taxes 4,677 6,359
Property & Liability Insurance (Hazard) 12,862 9,385
Miscellaneous Taxes, Licences, Permits, & Ins 3,250 2,503 Total Taxes and Insurance 20,789 18,247
Total Operating Expenses $ 232,438 $ 216,048
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Eureka Aster Place, LP
For the Years Ended December 31, 2021 and 2020
Cash Flow Available for Distribution
The calculation of cash flow available for distribution is as follows:
2021
Net Cash Provided by Operating Activities $ 50,635
Add:

Partner Fees Paid 8,609
Deduct:

Principal Payments of Long-Term Debt (60,000)
Change in Replacement Reserve Accounts (18,369)
Change in Operating Reserve Accounts 10,629
Change in Mortgage Escrow Accounts (2,901)
Change in Tenant Security Deposits (720)
Cash Flow Available for Distribution $ (12,117)
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Independent Auditors' Report on Compliance With Specific Requirements Applicable to a Non-Major USDA GRRHP
To the Partners of Eureka Aster Place, LP:

Compliance
We have audited the financial statements of Eureka Aster Place, LP as of and for the year ended December 31, 2021, and have issued our report thereon dated April 05, 2022.

In connection with that audit and with our consideration of Eureka Aster Place, LP's internal control used to administer USDA GRRHP, as required by the GRRHP Supplemental Government Auditing Standards Guide ("Guide") issued by the USDA Rural Housing Service, we selected certain transactions applicable to certain nonmajor USDA GRRHP for the year ended December 31, 2021.

Compliance on Non-Major Programs
Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on Eureka Aster Place, LP's compliance with these requirements. Accordingly we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.
4487 N. Dresden Place, Suite 101 - Boise, Idaho 83714 - Phone (208) 375-6490 - Fax (208) 375-6593 - www.gbbaccounting.com 316 of 519
Purpose of this Report
The purpose of his report is solely to describe the scope of our testing of Eureka Aster Place, LP's compliance with the requirements that are applicable to certain non-major USDA GRRHP assisted programs, and the results of that testing, and not to provide an opinion on Eureka Aster Place, LP's compliance with those requirements. Accordingly, this report is not suitable for any other purpose.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
April 05, 2022
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Independent Auditors' Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination
To the Partners of Eureka Aster Place, LP:

Compliance
We have applied procedures to test Eureka Aster Place, LP's compliance with Fair Housing and Non-Discrimination requirements applicable to its USDA GRRHP, for the year ended December 31, 2021.

Fair Housing and Non-Discrimination
Our procedures were substantially less in scope than an audit, the objective of which would be the expression of an opinion on Eureka Aster Place, LP's compliance with the Fair Housing and Non-Discrimination requirements.

Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide.

Grigg, Bratton, & Brash, PC
Certified Public Accountants
Boise, ID
April 05, 2022
4487 N. Dresden Place, Suite 101 - Boise, Idaho 83714 - Phone (208) 375-6490 - Fax (208) 375-6593 - www.gbbaccounting.com 318 of 519
To the Partners of
Eureka Aster Place, LP

INDEPENDENT AUDITORS' 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
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 Eureka Aster Place, LP, which compromise the balance sheet as of December 31, 2021 and the related and the related statements of operations, changes in partners' equity and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated Ɖƌŝůϱ, 2022.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Eureka Aster Place, LP's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Eureka Aster Place, LP's internal control. Accordingly, we do not express an opinion on the effectiveness of Eureka Aster Place, LP's internal control.

Our consideration of internal conrol was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
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Compliance and Other Matters
Purpose of this Report
Certified Public Accountants
Boise, ID
Ɖƌŝůϱ, 2022
The purpose of this report is soley 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 Eureka Aster Place, LP's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Eureka Aster Place, LP's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Grigg, Bratton, & Brash, PC
As part of obtaining reasonable assurance about whether Eureka Aster Place, LP'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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion, The results of our tests discosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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Our audit disclosed no findings or questioned costs that are required to be reported.

Eureka Aster Place
Schedule of Findings and Questioned Costs
For the year ended December 31, 2021
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Finding No.:

Status:

Eureka Aster Place
Project's Comments on Audit Resolution Matters
For the year ended December 31, 2021
None.
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Project Name: Eureka Aster Place
Project Number:

Auditor/Audit Firm: Grigg, Bratton, & Brash P.C.

Audit Period: For the year ended December 31, 2021
Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations:

As there are no findings reported, there is no corrective action plan at this time.

Eureka Aster Place
Project's Comments on Audit Resolution Matters
For the year ended December 31, 2021
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GILROY MONTEREY LP
(A California Limited Partnership)

COMPARATIVE FINANCIAL REPORT
December 31, 2021 and 2020
358 of 519

CONTENTS

INDEPENDENT AUDITORS' REPORT ON THE

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS
Balance sheets
Statements of income
Statements of partners' equity
Statements of cash flows
Notes to financial statements

SUPPLEMENTARY INFORMATION
Page
1-2
3-4
5 6
7-8
9-15
16-19
359 of 519
:ti
BOWMAN

CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT
To the Partners
Gilroy Monterey LP
(A California Limited Partnership)
Arcata, California
Opinion
We have audited the accompanying financial statements of Gilroy Monterey LP (A California Limited Partnership), ( the "Partnership"), which comprise the balance sheet as of December 31, 2021 and 2020, and the related statements of income, partners' equity, and cash flow for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2021 and 2020 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Partnership and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements 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.

Established 1949
ww.cpabowman.com
Bowman & Company, LLP
10100 Trinity Parkway, Suite 310
Stockton, CA 95219
- 1 -
Telephone: 209-473.1040
Facsimile: 209-473.9771
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Auditors' 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 auditors' 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 generally accepted auditing standards 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 omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, 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 generally accepted auditing standards, 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 Partnership'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 Partnership's ability to continue as a going concern for a reasonable period of time.

Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole.

The supplemental information to the financial statements as referenced in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.
601• im~~ f lP1u.nru0, w Stockton,~A f I {
March 3, 2022
- 2 -
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GILROY MONTEREY LP
(A California Limited Partnership)

BALANCE SHEETS
December 31, 2021 and 2020
ASSETS
Cash
Rent receivable
Property tax receivable
Prepaid expenses

RESTRICTED DEPOSITS AND FUNDED RESERVES
Tenant security deposits
Replacement reserve
Operating reserve
PROPERTY AND EQUIPMENT, at cost
Land improvements
Building and improvements
Furniture and fixtures
Less accumulated depreciation

OTHER ASSETS
Tax credit monitoring fees, net of accumulated
amortization of $5,000 in 2021 and $1,941 in 2020
Leasehold, net of accumulated amortization
of $9,255 in 2021 and $3,702 in 2020
See Notes to Financial Statements - 3 -
2021
$ 509,622
81,303
142,753
733,678
43,537
35,625
360,859
440,021
3,792,788
28,470,893
1,208,903
33,472,584
(2,009,548)
31,463,036
40,882
296,153
337,035
$ 32,973,770
2020
$ 660,492
82,347
164,713
566
908,118
19,409
13,125
32,534
3,792,788
28,435,115
1,208,903
33,436,806
(803,589)
32,633,217
41,722
301,706
343,428
$ 33,917,297
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GILROY MONTEREY LP
(A California Limited Partnership)
BALANCE SHEETS (Cont.)
December 31, 2021 and 2020

LIABILITIES AND PARTNERS' EQUITY

LIABILITIES
Accounts payable and accrued expenses $
Asset management fee payable
Partnership management fee payable
Tenant security deposits
Payable to affiliates of the general partner
Construction costs payable
Development fee payable
Accrued interest
Mortgage loans payable
Less unamortized debt issuance costs
Total liabilities

PARTNERS' EQUITY
2021
33,320
8,511
12,725
43,446
5,878
2,388,391
453,682
20,330,607
(278,659)
22,997,901
9,975,869
2020
$ 142,308
3,333
5,000
20,680
15,000
69,676
3,611,336
320,136
20,569,234
(286,659)
24,470,044
9,447,253
$ 32,973,770 $ 33,917,297
See Notes to Financial Statements -4-
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GILROY MONTEREY LP
(A California Limited Partnership)

STATEMENTS OF INCOME
For the Years Ended December 31, 2021 and 2020
2021 2020

REVENUES
Rental income $ 1,566,994 $ 994,967
Miscellaneous income 2,573 2,145
Total revenues 1,569,567 997,112

OPERATING EXPENSES
Outside services 199,657 6,962
Property management fees 85,596 45,631
Payroll 65,850 104,455
Utilities 61,444 42,580
Repairs and maintenance 51,855 10,462
Insurance 38,621 24,645
Real estate tax 29,062
Other taxes and licenses 17,955 13,186
Office and administration 14,670 14,774
Professional fees 8,288
Travel 7,063
Advertising 3,915 2,796
Total operating expenses 583,976 265,491
Operating income 985,591 731,621

OTHER EXPENSES
Depreciation 1,205,959 803,589
Interest expense - mortgage payable 844,248 654,199
Social services fee 92,475 52,725
Interest expense - debt issuance costs 15,440
Amortization 8,612 5,643
Partnership management fee 7,725 5,000
Asset management fee 5,178 3,333
Organizational legal 32,365
Total other expenses 2,179,637 1,556,854
Net loss $ (1,194,046) $ (825,233)
See Notes to Financial Statements - 5 -
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GILROY MONTEREY LP
(A California Limited Partnership)

STATEMENTS OF PARTNERS' EQUITY
For the Years Ended December 31, 2021 and 2020
Limited
Total Partners
Balance (deficit), December 31, 2019 $ 1,952,521 $ 1,952,421 Capital contributions 8,319,965 8,319,965
Net loss (825,233) (825,150)
Balance (deficit), December 31, 2020 9,447,253 9,447,236 Capital contributions 1,722,662 1,722,662
Net loss (1,194,046) (1,193,927)
Balance (deficit), December 31, 2021 $ 9,975,869 $ 9,975,971 See Notes to Financial Statements - 6 -
General
Partners
$ 100
(83)
17 (119)
$ (102)
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GILROY MONTEREY LP
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2021 and 2020
2021

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,194,046)
Adjustments to reconcile net loss to net
cash provided (used for) operating activities
Depreciation 1,205,959
Amortization 8,612
Amortization of debt issuance costs 15,440
Change in assets and liabilities:
(Increase) decrease in:

Rent receivable 1,044
Property tax receivable 21,960
Prepaid expenses 566
Increase (decrease) in:

Accounts payable and accrued expenses (108,988)
Asset management fee payable 5,178
Partnership management fee payable 7,725
Tenant security deposits 22,766
Payable to affiliates of the general partner (9,122)
Accrued interest 133,546
Net cash provided (used for) operating activities 110,640

CASH FLOWS FROM INVESTING ACTIVITIES
Land improvement cost incurred
Building and improvement costs incurred (35,778)
Purchase of furniture and fixtures
Debt issuance costs incurred (7,440)
Tax credit fees incurred (2,219)
Leasehold cost incurred
Payment of construction costs (69,676)
Net cash used for investing activies (115,113)
See Notes to Financial Statements - 7 -
2020
$ (825,233)
803,589
5,643
(82,347)
(164,713)
(566)
40,646
3,333
5,000
20,680
15,000
109,516
(69,452)
(2,307,768)
(1,948,171)
(679,294)
(286,659)
(43,663)
(305,408)
(5,570,963)
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GILROY MONTEREY LP
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS (Cont.)
For the Years Ended December 31, 2021 and 2020
2021

CASH FLOWS FROM FINANCING ACTIVITIES
Partner capital contributions 1,722,662
Proceeds from mortgage loan payable
Repayments of mortgage loan payable (238,627)
Payment of development fee payable (1,222,945)
Net cash provided by financing activities 261,090
Net increase in cash, restricted deposits and funded reserves 256,617 Cash, restricted deposits and funded reserves
Beginning 693,026
Ending $ 949,643

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

INFORMATION
Interest paid $ 710,702
Taxes paid $ 800

CASH, RESTRICTED DEPOSITS AND FUNDED RESERVES
Cash $ 509,622
Tenant security deposits 43,537
Replacement reserve 35,625
Operating reserve 360,859
$ 949,643
See Notes to Financial Statements - 8 -
2020
8,319,965
6,285,155
(8,319,965)
6,285,155
644,740
48,286
$ 693,026
$ 2,321,559
$
$ 660,492
19,409
13,125
$ 693,026
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Note 1.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Organization and Summary of Significant Accounting Policies Organization:

Gilroy Monterey LP, (A California Limited Partnership) was formed in August 2017 to acquire, develop, construct, lease, maintain and operate a 75-unit low-income housing tax credit project, known as Monterey Gateway Apartments located in Gilroy, California and provide low-cost housing to low to moderate income senior residents. Construction was completed and operations began in April 2020. The project provides low-cost housing to low to moderate income tenants. Rents are restricted under a Regulatory Agreement with the California Tax Credit Allocation Committee.

Summary of significant accounting policies:

Basis of presentation
The Partnership prepares its financial statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of America.

Cash, restricted deposits and funded reserves
For purposes of reporting the statement of cash flows, the Partnership includes all cash, restricted deposits and funded reserve accounts as cash on the accompanying balance sheet. The Partnership maintains balances in one financial institution in excess of the Federal Deposit Insurance Corporation (FDIC) coverage limit of$250,000. On December 31, 2021, the uninsured balance held by the Partnership is $726,094.

Accounts receivable
Management considers receivables to be fully collectible; accordingly, no allowance for doubtful accounts has been provided. If amounts become uncollectible, they are charged to operations in the period in which that determination is made. Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance.

Revenue recognition
Rental income attributable to residential leases is recorded when due from residents, generally upon the first day of each month. Leases are for a period of up to one year, with rental payments due monthly. Other income is recorded when earned and consists primarily of laundry and other tenant charges.
- 9 -
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Note 1.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Organization and Summary of Significant Accounting Policies ( cont.) Depreciation
Depreciation is computed using the straight-line method over the following estimated useful lives:

Land improvements
Buildings and improvements
Furniture and equipment
Amortization
Years
15 40
5 Tax credit monitoring fees are amortized under the straight-line method over 15 years, which coincides with the compliance period in accordance with Section 42. Leasehold costs are amortized under the straight-line method over 55 years, which coincides with the term of the ground lease. Estimated amortization expense for each of the five succeeding years is $8,612.

Debt issuance costs
Debt issuance costs, net of accumulated amortization, are reported as a direct reduction of the obligation to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and is computed using the straight-line method.

Impairment oflong-lived assets
The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the future net undiscounted cash flow expected to be generated and any estimated proceeds from the eventual disposition. If the long-lived asset is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount exceeds the fair value as determined from an appraisal, discounted cash flows analysis, or other valuation technique. There were no impairment losses recognized for 2021 or 2020.

Income taxes
Income taxes on Partnership income are levied on the partners at the partner level. Accordingly, all profits and losses of the Partnership are recognized by each partner on their respective tax returns.
- 10 -
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Note 1.

Note 2.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Organization and Summary of Significant Accounting Policies (cont.) Income taxes (cont.)
Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Partnership's tax returns will not be challenged by the tax authorities and that the Partnership or its partners will not be subject to additional tax, penalties, and interest as a result of such challenge. Generally, the Partnership's tax returns remain open for three to four years for income tax examination.

Economic concentration
The Partnership operates one property located in Gilroy, California. Future operations could be affected by changes in economic or other conditions in that geographical area or by changes in federal low-income housing subsidies or the demand for such housing.

Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

Fair value of financial instruments
The carrying amount of financial instruments, including cash, accounts receivable, and accounts payable approximate their value due to the short-term maturities of these instruments.

Subsequent events
Management has evaluated subsequent events through March 3, 2022, the date the financial statements were available to be issued.

Restricted Deposit and Funded Reserves
Replacement Reserve
In accordance with the terms of the partnership agreement, the Partnership is required to make monthly deposits of$1,875 and contributions to the replacement reserve began the first month the property achieved stabilized operation.
- 11 -
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Note 2.

Note 3.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Restricted Deposit and Funded Reserves (cont.)
Replacement Reserve (cont.)
Beginning balance, January 1
Deposits
Interest
Withdrawals
Ending balance, December 31
Operating Reserve
$
$
2021
13,125 $
22,500
2020
13,125
35,625 $ 13,125
=====
In accordance with the Partnership Agreement, the Partnership maintains a reserve account for the purpose of payment from operating deficits. The Partnership made an initial deposit of $360,859 from the proceeds of the third capital contribution in 2021. The Partnership is required to make distributions from net cash flow to fund the operating reserve should fall below $360,859.

Beginning balance, January 1
Deposits
Interest
Withdrawals
Ending balance, December 31
Ground Lease
$
$
2021 2020
$
360,859
360,859 $
=====
The Partnership leases the land from the County of Santa Clara under a ground lease expiring August 21, 2073. The lease includes an option to extend the term of the lease another 24 years after the expiration date. The annual rent for this lease is $1 and the payment for the initial 55 year lease term is owed to the County of Santa Clara at the beginning of the term of the lease. $55 was payable at December 31, 2020 and was paid in 2021. - 12 -
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Note 4.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Mortgage Loans Payable
In August 2018, the Partnership entered into a
construction loan payable to California Municipal
Finance Authority and Pacific Western Bank of
$22,000,000 with interest accrued at 3 .5% as
determined by Lender, secured by a deed of trust on
the Partnership's property. This mortgage loan
payable is converted from construction to permanent
in February 2021 and was paid down to $16,600,000
with a fixed interest rate of 4.5% and a maturity date
of October 1, 2037. Accrued interest is $63,682 at
December 31, 2021 and $47,136 at December 31,
2021 2020
2020. $ 16,430,607 $ 16,669,234
The Partnership has a note payable to the County of
Santa Clara of $3,900,000, simple interest at 3%,
secured by a deed of trust on the property. Principal
and interest is payable from residual receipts of
project operations as defined in the note, due August
1, 2075. Accrued interest is $390,000 at December
31, 2021 and $273,000 at December 31, 2020. 3,900,000 3,900,000 $ 20,330,607 $ 20,569,234
The aggregate amount of principal payments under these mortgage loans payable at December 31, 2021 is as follows:
2022 $ 209,015
2023 218,754
2024 226,880
2025 239,516
2026 250,675
Thereafter 19,185,767
$ 20,330,607
- 13 -
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Note 4.

Note 5.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Mortgage Loans Payable (cont.)
Debt issuance costs are amortized using the straight-line method. At December 31, 2021 net unamortized debt issuance costs were $278,659 and at December 31, 2020 net amortized debt issuance costs were $286,659.

Partnership capitalized a portion of interest costs as a component of capitalized costs of construction. Interest costs incurred and capitalized were $0 for the year ended December 31, 2021 and $296,146 for the year ended December 31, 2020.

Related Party Transactions
The Partnership contracted with Danco Builders for the construction of the project. Danco Builders is owned by an affiliate of the general partner of the Partnership. The total amount of the construction contract is $23,629,433. At December 31, 2021, $0 is payable to Danco Builders for construction costs. At December 31, 2020, $16,366 is payable to Danco Builders for construction costs. $5,878 is also payable to Danco Builders for development cost advances at December 31, 2021, and $68,986 is payable to Danco Builders for development cost advances at December 31, 2020.

The Partnership contracted with Danco Communities ("Danco") to provide development services to the Partnership for a $4,359,995 development fee. Danco_is a general partner of the Partnership. $2,388,391 is payable at December 31, 2021 and $3,611,336 is payable at December 31, 2020.

In December 2020, the Partnership received a loan from an affiliate of a general partner in the amount of $15,000. The interest rate on the loan is 5% compounded annually. All principal and interest is due on demand. $15,000 was payable and accrued interest $0 at December 31, 2020.

This loan was repaid in 2021.

The Partnership contracted with Danco Property Management, an affiliate of a general partner for property management services. Property management fees of $85,596 in were incurred in 2021 and $45,631 were incurred in 2020. $0 is payable at December 31, 2021 and $22,454 in 2020.

The investor limited partner, Raymond James California Housing Opportunities Fund VI LLC, earned an asset management fee of $5,178 in 2021 and $3,333 in 2020 for services provided to the Partnership as defined in the Partnership Agreement. $8,511 is payable at December 31, 2021 and $3,333 is payable at December 31, 2020.
- 14 -
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Note 5.

Note 6.

GILROY MONTEREY LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Related Party Transactions (cont.)
The managing general partner, Community Revitalization and Development Corporation (CRDC), a California nonprofit corporation, materially participates in and has substantial management duties with respect to the Partnership in accordance with the California Property Tax Rules 140, 140.1, and 140.2. Accordingly, the Partnership will receive a real property tax exemption for the project under Sec. 214(g) of the California Revenue and Taxation Code, which enables the Partnership to charge lower rents to its tenants. The partnership management fee incurred by the Partnership with respect to these services was $7,725 at December 31, 2021 and $5,000 at December 31, 2020. $12,725 is payable at December 31, 2021 and $5,000 is payable at December 31, 2020.

Additional Capital Contributions
In accordance with the Partnership Agreement, the limited partner is required to make an additional capital contribution in the amount of $500,000 (subject to adjustment). The capital contribution will be used to pay development fees.

Capital contributions are made by the limited partner as the Partnership reaches certain operational benchmarks, including achievement of occupancy targets, and receipt of permanent financing and a final allocation of low-income housing tax credits. Capital contributions of $1,722,662 were made in 2021.
- 15 -
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SUPPLEMENTARY INFORMATION
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Account
33000
37000
68000
92100
69900
69950
69952
64000
59010
61509
61517
61526

GILROY MONTEREY LP
(A California Limited Partnership)

SUPPLEMENTARY INFORMATION
For the Years Ended December 31, 2021 and 2020
Description Report 12/31/2021
Revenue
Revenue
Residential Rentals (1,566,994.00)
(1,566,994.00)
Other Revenue
Laundry Income (2,573.00)
(2,573.00)
{1,569,567.00)
General and Administrative
Advertising
Sales and Marketing 3,915.00
3,915.00
Asset Management Fee
Asset Management Fee 5,178.00
5,178.00
Depreciation
Depreciation 1,205,959.00
1,205,959.00
Amortization
Amortization 3,059.00
Amortization - Leasehold 5,553.00
8,612.00
Insurance
Insurance 38,621.00
38,621.00
Office Expenses
Credit Qualification Reports 175.00
Telephone/Internet 6,270.00
Office Supplies 3,339.00
Postage 0.00
See Independent Auditor's Report - 16 -
Report 12/31/2020
(994,967.00)
(994,967.00)
(2,145.00)
(2,145.00)
(997,112.00)
2,796.00
2,796.00
3,333.00
3,333.00
803,589.00
803,589.00
1,941.00
3,702.00
5,643.00
24,645.00
24,645.00

32.00 4,280.00
3,243.00
165.00
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GILROY MONTEREY LP
(A California Limited Partnership)

SUPPLEMENTARY INFORMATION
For the Years Ended December 31, 2021 and 2020
Account Description Report 12/31/2021
61714 Land Lease 55.00
62300 Software Expensed 1,469.00
65301 Travel Auto 0.00
67260 Dues/Subscrip/Membership 16.00
67265 Education 59.00
68515 Cleaning 857.00
69820 Fees 528.00
70001 Miscellaneous Income/Exp 509.00
72205 Late Fees 808.00
72300 Bank Fees 585.00
14,670.00
Other Taxes and Licenses
69500 License/Gov't Agency Fees 17,155.00
92000 State Tax-Current 800.00
17,955.00
Outside Service Expense
61511 Security Monitoring 183,909.00
61704 Pest Control 2,734.00
61712 Gardening Service 10,899.00
62100 Software Tech Support 2,115.00
199,657.00
Partnership Management Fee
92200 Partnership Management Fee 7,725.00
7,725.00
Lifesteps Social Services Fee
67051 Return to Owner-Services 92,475.00
92,475.00
Property Management Fees
69800 Management Fee Expense 85,596.00
85,596.00
Professional Fees
67100 Legal Fees 138.00
67200 Accounting & Bookkeeping Fees 8,150.00
8,288.00
See Independent Auditor's Report - 17 -
Report12/31/2020

0.00 0.00
776.00

0.00 500.00
4,832.00

0.00 478.00

0.00 468.00
14,774.00
13,186.00

0.00 13,186.00
2,062.00
1,500.00
3,400.00

0.00 6,962.00
5,000.00
5,000.00
52,725.00
52,725.00
45,631.00
45,631.00

0.00 0.00

0.00 377 of 519
Account
89500
63000
67302
68500
68505
68506
67301
68600
65100
65200
65300
65900
61707
61708
61709
61718
67300
40900
49990

GILROY MONTEREY LP
(A California Limited Partnership)

SUPPLEMENTARY INFORMATION
For the Years Ended December 31, 2021 and 2020
Description Report 12/31/2021
Property Taxes
Property Taxes 29,062.00
29,062.00
Repairs and Maintenance
Appliance/Flooring Replacement 898.00
Maintenance 0.00
Maint-Supplies/Materials 8,821.00
Service & Repairs 36,120.00
Elevator Maintenance 6,016.00
51,855.00
Salaries and Wages
Maintenance 13,630.00
On Site Manager 52,220.00
65,850.00
Travel
Travel Hotel 2,375.00
Travel Meals 47.00
Travel Auto 886.00
Travel Other 3,755.00
7,063.00
Utilities
Utilities - Water 17,745.00
Utilities - Sewer 27,332.00
Utilities - Electric 2,307.00
Garbage Collection 14,060.00
Dump Fees 0.00
61,444.00
1,903,925.00
Other Income and Expenses
Other Expense
Other Direct Costs 1,391,596.00
Reclass to CIP (Contra) (1,391,596.00)

0.00 See Independent Auditor's Report - 18 -
Report 12/31/2020

0.00 0.00

0.00 4,321.00
1,321.00
4,820.00

0.00 10,462.00

0.00 104,455.00
104,455.00

0.00 0.00

0.00 11,353.00
19,878.00
1,694.00
9,227.00
428.00
42,580.00
1,135,781.00
4,170,749.00
(4,170,749.00)

0.00 378 of 519
Account
85000
69951
67101
Net Income (Loss)
Total Revenue
Total Expense

GILROY MONTEREY LP
(A California Limited Partnership)

SUPPLEMENTARY INFORMATION
For the Years Ended December 31, 2021 and 2020
Description Report 12/31/2021
Interest Expense
Interest Expense 844,248.00
844,248.00
Interest Expense - Debt Issuance Amortization
Amortization - Debt Issuance Costs 15,440.00
15,440.00
Organizational Costs
Legal Fees - Organizational Legal 0.00

0.00 859,688.00
1,194,046.00
(1,194,046.00}
(1,569,567.00}
2,763,613.00
See Independent Auditor's Report - 19 -
Report 12/31/2020
654,199.00
654,199.00

0.00 0.00
32,365.00
32,365.00
686,564.00
825,233.00
(825,233.00}
(997,112.00}
1,822,345.00
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Attachment C : Resumes
435 of 519
Dan Johnson
President & CEO
The Danco Group
Chris Dart
President
Danco Communities
Dan has over 36 years of professional experience in the construction industry. During his 36 years as
President/CEO of Danco Builders, Danco Property
Management, Danco Communities,
and other management entities, Dan has overseen
multiple multi-million dollar projects. He specializes in the areas of computerized cost control, cost estimating, cost review, value engineering, constructability review, scheduling, and project management.

Chris’s extensive experience and knowledge in
the development and construction industry spans
over 30 years with The Danco Group. Beginning in the
construction field under operations, Chris successfully worked his way through the ranks to his current
position as President of Danco Communities. He
pioneered the affordable housing endeavors of Danco
Communities and continues to be the visionary
principal of the development department at Danco.

Licenses & Certifications
General Contractor’s License: CA, OR, & AZ
Concrete Subcontractor’s License
Engineering Subcontractor’s License
Suretrack, Project Scheduling Completion
CalDRE Broker’s License: No. 01898103
Education
Shasta Community College, Redding, CA
Selected Experience
Education & Related Training
LEED Accredited Professional
LEIP Program Advanced Study Program
for Business Leaders
California State University, Humboldt
Selected Experience
7th & Myrtle, Eureka, CA | $15 M
Acorn Valley Plaza, Ukiah, CA | $33 M
Bayview Heights, Eureka, CA | $21 M
Brentwood Crossing, Bakersfield, CA | $32 M
Central Sacramento Studios, Sacramento, CA | $31 M
Mariposa Place, San Jose, CA | $63 M
Monterey Gateway, Gilroy, CA | $35 M
Oak Valley Villas, Clearlake, CA | $35 M
Orchard Commons, Santa Rosa, CA | $26 M
Phyllis Rex Samoa Townhomes, Samoa, CA | $30 M
The Plateau, Fort Bragg, CA | $30 M
Sage Commons, Santa Rosa, CA | $27 M
Sorrel Place, Arcata, CA | $22 M
Temescal Commons, Oakland, CA | $22.6 M
West Village Studios, Arcata, CA | $28 M
7th & Myrtle, Eureka, CA | $15 M
Acorn Valley Plaza, Ukiah, CA | $33 M
Bayview Heights, Eureka, CA | $21 M
Brentwood Crossing, Bakersfield, CA | $32 M
Central Sacramento Studios, Sacramento, CA | $31 M
Mariposa Place, San Jose, CA | $63 M
Monterey Gateway, Gilroy, CA | $35 M
Oak Valley Villas, Clearlake, CA | $35 M
Orchard Commons, Santa Rosa, CA | $26 M
Phyllis Rex Samoa Townhomes, Samoa, CA | $30 M
The Plateau, Fort Bragg, CA | $30 M
436 of 519
McKenzie Dibble
Project Manager
Danco Communities
Hailey Del Grande
Grant Manager
Danco Communities
McKenzie Dibble started her career in the
development industry with the Danco Group.

During her time on the team, McKenzie has
submitted numerous funding applications with
varying public agencies. Through these endeavors
McKenzie has secured over $190 million dollars
in public and publicly backed financing. She is
thoroughly versed in many state and federally
sourced funding application processes, and post
award compliance with the rigorous regulations of these funding agencies.

Hailey Del Grande began her career at The Danco
Group in April of 2018 on our treasury management
team. She quickly transitioned into the Danco
Communities development assistant and worked her
way up to becoming one of our most knowledgeable
& organized development project managers,
overseeing a handful of projects, each with their own
deadlines & obstacles. Because of her industry
knowledge, impeccable organizational skills, and
utilizing they key networks she has made, Hailey is
able to set practices in place to create multiple
funding strategies in case one does not work out. Education & Related Training University of California, Santa Barbara &
Universitat de Barcelona
Bachelor of Arts, International Relations &
Spanish
College of the Redwoods
Real Estate Principles, Real Estate Practice,
Real Estate Finance
REALTOR, CalDRE License No. 01983881
Selected Experience
7th & Myrtle, Eureka, CA | $15 M
Acorn Valley Plaza, Ukiah, CA | $33 M
Bayview Heights, Eureka, CA | $21 M
Brentwood Crossing, Bakersfield, CA | $32 M
Central Sacramento Studios, Sacramento, CA | $31 M
Mariposa Place, San Jose, CA | $63 M
Monterey Gateway, Gilroy, CA | $35 M
Oak Valley Villas, Clearlake, CA | $35 M
Orchard Commons, Santa Rosa, CA | $26 M
Phyllis Rex Samoa Townhomes, Samoa, CA | $30 M
The Plateau, Fort Bragg, CA | $30 M
Education & Related Training
California State University, Humboldt
Bachelor of Science, Business Administration -
Accounting
College of the Redwoods
Associates in Science - Business Administration
Grant Revenue Secured
Homekey Financing - $30,003,639
4% Tax Credits - $154,804,470
9% Tax Credits - $41,657,662
Other Soft Financing $34,474,377
Development Project Oversight:

Ponderosa Village – Santa Rosa, CA
Madison Square Studios – Sacramento, CA
Parkside Apartments, Lakeport, CA
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Attachment D : Project Financial
Audits
438 of 519
Arcata 7th Street LP
(A California Limited Partnership)
________________________________________
Report on Audit of
Financial Statements
Year Ended
December 31, 2022
439 of 519

Arcata 7th Street LP
(A California Limited Partnership)

INDEPENDENT AUDITOR INFORMATION
Year Ended December 31, 2022
The December 31, 2022 audit of Arcata 7th Street LP (A California Limited Partnership) was performed by Leavitt, Christensen & Co., PLLC. Additional information on Leavitt, Christensen & Co., PLLC follows:

Name: Leavitt, Christensen & Co., PLLC
Address: 6149 N. Meeker Place Ste. 250
Boise, ID 83713
Phone number: (208) 287-5353
Lead auditor: Ryan Leavitt
Idaho license number: CP-5035

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Contents
Independent Auditors' Report 1
Balance Sheet 3
Statement of Operations 4
Statement of Changes in Partners' Capital (Deficit) 5
Statement of Cash Flows 6
Notes to Financial Statements 8
Supplemental Information 15
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1 Independent Auditors' Report
March 8, 2023
Managing Partner
Arcata 7th Street LP
(A California Limited Partnership)
Arcata, CA
Opinion
We have audited the accompanying financial statements of Arcata 7th Street LP (A California Limited Partnership), which comprise the balance sheet as of December 31, 2022, and the related statements of operations, changes in partners’ capital and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements present fairly, in all material respects, the financial position of Arcata 7th Street LP as of December 31, 2022, and the results of its operations, changes in partners’ capital and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). 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 Arcata 7th Street LP and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 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 omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements. 6149 N. Meeker Place, Suite 250 • Boise, Idaho 83713 • (208) 287-5353 • Fax (208) 994-0716 442 of 519
2 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 Arcata 7th Street LP’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 Arcata 7th Street LP’s ability to continue as a going concern for a reasonable period of time.

Report on Supplemental Information
Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The Supplemental Information (see pages 15 to 16) is presented for purposes of additional analysis and is not a required part of the financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.

In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Disclaimer on Procedures Related to Tax Credit Compliance The Partnership has filed tax returns with the Internal Revenue Service which allow the partners to receive the benefit of a low-income housing tax credit. Due to the fact that the low-income housing tax credit relates to income taxes which are the responsibility of the individual partners, the scope of the audit was not designed or intended to audit the compliance with the various low-income housing tax credit laws. Therefore, these audits cannot be relied on to give assurances with regard to compliance with any low-income housing tax credit laws.

Boise, ID
Leavitt, Christensen & Co., PLLC
443 of 519
Arcata 7th Street, LP
(A California Limited Partnership)

BALANCE SHEET
December 31, 2022
ASSETS 2022
CURRENT ASSETS:

Cash on hand and in banks $ 614,958
Accounts receivable - tenant 2,516
Prepaid expenses 3,010
Accounts receivable - other 54,027
TOTAL CURRENT ASSETS 674,511
RESTRICTED DEPOSITS & FUNDED RESERVES:

Tenant security deposits 23,542
Required replacement reserve 11,000
Operating reserve 163,176
TOTAL RESTRICTED DEPOSITS & FUNDED RESERVES 197,718
RENTAL PROPERTY:

Land and land improvements 2,886,927
Building, improvements and equipment 18,708,656
21,595,583
Accumulated depreciation (1,347,757)
NET RENTAL PROPERTY 20,247,826
OTHER ASSETS:

Deferred costs, net of $6,119 85,168
TOTAL OTHER ASSETS 85,168
TOTAL ASSETS $ 21,205,223

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:

Accounts payable $ 11,691
Due to related party 13,868
Accrued interest payable 140,750
Real estate taxes payable 539
Partnership fees payable 4,400
Asset management fees payable 4,400
Current portion of mortgage note payable 11,244
TOTAL CURRENT LIABILITIES 186,892
DEPOSITS AND PREPAID LIABILITIES:

Tenant security deposits 23,542
Unearned rents 17,749
TOTAL DEPOSITS AND PREPAID LIABILITIES 41,291
LONG TERM LIABILITIES:

Mortgage note payable, less current portion 5,138,756
Permanent financing costs, net of $61 (29,008)
Long-term mortgage note payable, net of unamortized permanent financing costs 5,109,748 Developer fee payable 1,264,189
TOTAL LONG TERM LIABILITIES 6,373,937
TOTAL LIABILITIES 6,602,120
PARTNERS' CAPITAL (DEFICIT) 14,603,103
TOTAL LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) $ 21,205,223 See Independent Auditors' Report
3 444 of 519
Arcata 7th Street, LP
(A California Limited Partnership)

STATEMENT OF OPERATIONS
Year Ended December 31, 2022
REVENUES: 2022
Rent revenue $ 368,977
Other income 11,389
TOTAL NET REVENUE 380,366
EXPENSES:

Operating expenses
Administrative expenses 68,145
Operating and maintenance 31,503
Utilities 77,239
Mortgage interest 369,007
Property insurance and claims 20,035
Other expenses 2,376
568,305
NET OPERATING INCOME (LOSS) (187,939)
Non-Operating expenses
Depreciation and amortization 1,348,699
Partnership expenses 8,800
1,357,499
NET INCOME (LOSS) $ (1,545,438)
See Independent Auditors' Report
4 445 of 519
Arcata 7th Street, LP
(A California Limited Partnership)

STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Year Ended December 31, 2022
2022
General Limited
Partner Partner Total
Partners' capital (deficit),
January 1 $ $ 1,591,480 (4) $ 1,591,476
Capital contributions 14,557,065 14,557,065
Net income (loss) (1,545,283) (155) (1,545,438)
Partners' capital (deficit),
December 31 $ (159) $ 14,603,262 $ 14,603,103
See Independent Auditors' Report
5 446 of 519
Arcata 7th Street, LP
(A California Limited Partnership)

STATEMENT OF CASH FLOWS
Year Ended December 31, 2022
2022
CASH FLOWS FROM OPERATIONS:

Rental receipts $ 393,510
Other receipts 82,286
Administrative payments (662,103)
Operating and maintenance payments (24,796)
Utilities paid (73,214)
Property taxes 539
Interest paid (371,881)
Insurance payments (20,035)
Other payments (2,276)
NET CASH PROVIDED (USED) BY OPERATIONS (677,970)
CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (28,861)
NET CASH PROVIDED (USED) BY INVESTING (28,861)
CASH FLOWS FROM FINANCING ACTIVITIES:

Contributions 14,557,065
Developer fee payable (372,875)
Mortgage and note payable principal payments (12,733,426) NET CASH PROVIDED (USED) BY FINANCING 1,450,764
NET INCREASE (DECREASE) IN CASH 743,933
CASH - BEGINNING OF PERIOD 68,743
CASH - END OF PERIOD $ 812,676
Cash on hand and in banks $ 614,958
Tenant security deposits 23,542
Required reserve 11,000
Operating Reserve 163,176
$ 812,676
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheet that sum to the total of the same such amounts shown in the Statement of Cash Flows.

Total cash, cash equivalents, and restricted cash
shown in the statement of cash flows
See Independent Auditors' Report
6 447 of 519
Arcata 7th Street, LP
(A California Limited Partnership)

STATEMENT OF CASH FLOWS
Year Ended December 31, 2022
2022

RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH FLOWS PROVIDED (USED) BY OPERATIONS:

Net income (loss) $ (1,545,438)
Adjustments to reconcile net income to net cash provided by Depreciation and amortization 1,348,699
Permanent financing cost amortization 61
Decrease (increase) in:

Tenant accounts receivable 24,533
Prepaid expenses (3,010)
Increase (decrease) in:

Accounts payable (580,116)
Accrued interest payable (16,803)
Real estate taxes payable 47,894
Tenant security deposit payable 23,542
Partnership and asset management fees payable 8,800
Due to related party 13,868
NET CASH PROVIDED BY OPERATIONS: $ (677,970)
See Independent Auditors' Report
7 448 of 519
8 Arcata 7th Street LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 2022
A. Organization and Significant Accounting Policies
Organization
Arcata 7th Street LP (the Partnership) is a California limited partnership, formed in May 2020. The purpose of the Partnership is to acquire, develop, construct, lease, maintain and operate a 44-unit multifamily housing development known as Sorrel Place (The Project). The housing development is located in Arcata, California and provides housing for low and very low-income residents. Construction was completed and operations began in January 2022. Rents are restricted under a Regulatory Agreement with the California Tax Credit Allocation Committee. The Project receives Section 8 based vouchers from the County of Humboldt Housing Authority (CHHA) for 5 units. The Project is operating in a manner necessary to qualify for federal low-income housing tax credits as provided under Section 42 of the Internal Revenue Code. The General Partners are Community Revitalization and Development Corporation (CRDC), a California nonprofit corporation which owns 0.001%, Johnson & Johnson Investments, LLC, which owns .0045%, and Danco Communities, which owns .0045%. The Limited Partner is Raymond James California Housing Opportunities Fund IX L.L.C. which owns 99.99%.

Rental Income
The Project leases its rental units to low and moderate-income individuals in the Arcata, California area. In association with the low-income tax credits, the apartments are operated subject to certain restrictions with regard to targeted low-income tenants that the units will be rented to.

Revenue Recognition
The Partnership revenue includes revenue from tenant apartment leases, interest income and other income.

Revenue is recognized upon the completion of the underlying performance obligations related to the type of revenue.

Recognition of Tenant Lease Revenue
The Partnership was awarded Federal low-income housing tax credits for the construction or rehabilitation of the project. The tenants are required to meet certain income and asset qualifications in order to occupy a rental apartment unit. Under the terms of the award, the LIHTC tenant rent is calculated using percentages of the Area Median Income (AMGI) based upon the location of the project. The maximum rent charged is limited to the amount calculated under this formula.

The Partnership entered into a rental assistance contract for low- and moderate-income individuals and families in the Arcata, California area. In accordance with the regulations, the tenants are required to meet certain income and asset qualifications in order to occupy a rental apartment unit. Based upon the qualifying income the tenant may receive rental assistance. The rental assistance includes project-based Section 8 Vouchers provided by the CHHA. Under the terms of the agreements the Project is paid the difference between the apartment contract rent and the portion of the rent payable by the tenant.

The tenant apartment leases are one-year renewable lease contracts. Monthly tenant rent is recognized on a monthly basis upon occupancy of the rental unit as the performance obligation is satisfied. The annual leases are cancelable by the tenants upon 30-day notice. 449 of 519
9 Interest and Other Income
The Partnership earns interest on certain bank accounts including the tenant security deposit and replacement reserve accounts. Interest is recorded when paid by the bank. Additionally, the Project provides on-site laundry equipment for use by the Apartment residents, assesses late rental charges and apartment damages to tenants. These amounts are recorded as other income.

Income Taxes
The Partnership is organized as a limited partnership. Accordingly, all profits and losses of the partnership are recognized by each partner on their respective tax returns. Federal and state tax authorities generally have the right to examine and audit the previous three years of tax returns filed. Any interest or penalties assessed to the partnership are recorded in operating expenses. For the year ended December 31, 2022 there were no penalties recorded in the accompanying financial statements.

Rental Property
Land, buildings, and improvements are recorded at cost. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Management evaluates the Project’s property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment losses were recorded for the year ended December 31, 2022. Depreciation is provided using the straight-line and/or accelerated methods over the estimated useful lives of the assets, as follows:

Years
Land Improvements 15
Buildings and Improvements 30-40
Furnishings and Equipment 5
Expenditures for maintenance and repairs are charged to operating expenses as incurred. The cost and accumulated depreciation of assets sold or otherwise retired are removed from the accounts and gain or loss on disposition is included in the results of operations.

Financial Instruments
All financial instruments are held for purposes other than trading. The project’s financial instruments normally consist of cash and cash equivalents, tenant and rental assistance receivables, escrow reserves, trade payables, and mortgage notes payable. There has been no significant change in interest rates available to the Partnership. Therefore, the fair value of the mortgage notes, approximate the book value.

Tenant Receivables
Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, security deposit or the charges for damages and cleaning fees. The Partnership does not accrue interest on the tenant receivable balances. The Partnership has not established an allowance for doubtful accounts and does not use the reserve method for recognizing bad debts. Bad debts are written off to bad debt expense in the period management determines that collection is not probable. 450 of 519
10 Organizational Costs
Organizational costs are expensed as incurred.

Deferred Costs
Deferred costs consist of tax credit fees. Deferred costs are amortized using the straight-line method over the tax credit compliance period.

Amortization schedule for tax credit fees:
2023 6,086 $
2024 6,086
2025 6,086
2026 6,086
2027 6,086
30,430
Thereafter 54,738
Total 85,168 $
Permanent Financing Costs
Permanent financing costs consist of loan origination costs. The costs are amortized using the straight-line method over the estimated life of the loans. Amortization of the costs is reported as interest expense.

Amortization schedule for finance costs:
2023 727 $
2024 727
2025 727
2026 727
2027 727
3,635
Thereafter 25,373
Total 29,008 $
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consequently, the impact of implementing this standard will not be material to the financial statements and related disclosures.
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11 B. Restricted Deposits and Funded Reserves
Tenant Security Deposits
Tenant security deposits are deposited into a separate bank account and held in trust for the tenants until they vacate the property. The deposits are held in a federally insured bank account in the name of the Project. Repayment of the security deposit is to occur within fourteen days of vacancy. Any amounts forfeited by tenants due to lease violations are transferred to the project's operating account.

Replacement Reserves
In accordance with the terms of the partnership agreement, the Partnership is required to make annual deposits of $22,000 and contributions to the replacement reserve began six months after completion of construction. During the first year, this amount was prorated to total contributions of $11,000.

An analysis of the activity for 2022, and the reserve's status at December 31, 2022 is:

Replacement Reserve
2022
Balance, January 1, $ -
Deposits 11,000
Withdrawals -
Balance, December 31, 11,000 $
Other Reserve Accounts
In accordance with the provisions of the Partnership Agreement, cash is required to be deposited into a reserve account for the purpose of payment from operating and shall be maintained for the duration of the compliance period. The Partnership is required to make distributions from net cash flow to fund the operating reserve should it fall below $80,000. An analysis of the activity follows:

Operating Reserve
2022
Balance, January 1, $ -
Deposits 163,176
Withdrawals -
Balance, December 31, 163,176 $
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12 Other Tax and Insurance Information
2022
Real Estate Taxes Payable December 31, $ 539
Real Estate Tax Expense $ -
Property Insurance Expense $ 20,035
During 2022, the Limited Partnership applied for and received an exemption from property taxes and received property tax reimbursements of $1,356.

C. Mortgage Notes Payable
The Pacific Western Bank loan is secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. Cash payments of principal and interest are payable in monthly installments. The Construction loan converted to a permanent loan with Pacific Western Bank in December 2022. Monthly principal and interest payments shall begin January 2023.

The City of Arcata loan is secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. Payments of principal and interest are payable in annual payments.

The mortgage requires annual payments for 55 years in the amount of 75% of the Residual Receipts. The accrued interest as of December 31, 2022, was $140,750.

The Partnership has a non-interest loan payable to Community Revitalization and Development Corporation secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. The principal balance of the note is due in 2076.

Long-term debt and related information at December 31, 2022 consisted of the following:
2022
Pacific Western Bank loan, original loan balance
$15,250,000; bearing interest at 5.65%, payable in
monthly installments. $ 1,200,000
City of Arcata loan, bearing simple interest at 3%,
payable in annual installments over 55 years of
principal and interest. The note will mature in May
2075. 1,800,000
Community Revitalization and Development
Corporation loan, non-interest bearing, with the
principal balance due 2076. $ 2,150,000
5,150,000
Less current portion (11,244)
Total long-term debt $ 5,138,756
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13 Maturities of long-term debt for the next five years are:
2023 $ 11,244
2024 11,896
2025 12,586
2026 13,316
2027 14,088
63,130
Thereafter 5,086,870
Total 5,150,000 $
D. Related Party Transactions
Property Management Company
The Project is managed by Danco Property Management, (an affiliate of a general partner). The partnership has a management fee agreement with Danco Property Management to pay management fees calculated at 5% of gross rental receipts.

Danco Builders, an affiliate of the General Partner, employs management and maintenance personnel who perform work for the Partnership. The Partnership pays Danco Builders for the payroll and benefits costs associated with these personnel.

Unpaid management fees and payroll costs are included in accounts payable. 2022
Management Fees $ 19,018
Payroll Payments $ 57,758
Developer Fees
The Partnership contracted with Danco Communities to provide development services to the Partnership for a $2,136,527 development fee. During 2022 the Partnership paid developer fees of $372,875. The unpaid balance of accrued developer fees as of December 31, 2022 was $1,264,189.

Partnership Management Fee Payable
The managing general partner, CRDC, is a California nonprofit corporation which materially participates in and has substantial management duties with respect the Partnership in accordance with the California Property Tax Rules, 140, 140-1 and 140.2. Accordingly, the Partnership will receive a real property tax exemption for the project under Sec 214(g) of the California Revenue and Taxation Code, which enables the Partnership to charge lower rents to its tenants. The fee is to be increased annually by 3%. During 2022, the partnership accrued fees of $4,400. The accrued balance as of December 31, 2022 is $4,400.

Asset Management Fee
The Partnership has agreed to pay the Limited Partner an asset management fee of $4,400 per annum for its services in reviewing the informational reports, financial statements, and tax returns of the partnership. The fee is to be increased annually by 3%. The fee incurred during 2022 totaled $4,400. The unpaid balance at December 31, 2022 was $4,400.

Due to Related Party
In a prior year, Danco Communities, a related party, paid pre-development interest on behalf of the Partnership. The unpaid balance at December 31, 2022 was $13,868. 454 of 519
14 E. Economic Concentrations and Risks
The Partnership’s sole asset is Sorrel Place. The Partnership’s operations are concentrated in the affordable housing real estate market. In addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives, rules and regulations are subject to change by an act of Congress or other regulatory agency. Such changes may occur with little or inadequate funding to pay for the related costs, including the additional administrative burden, to comply with a change.

F. Subsequent Events
Management has evaluated events through March 8, 2023, the date which the financial statements were available to be issued.

G. Cash Deposits
The partnership maintains cash deposits at various banks. The amount insured by the Federal Deposit Insurance Corporation is $250,000. At December 31, 2022, the deposits at one bank totaled $316,747, which exceeds the $250,000 maximum. Therefore, at December 31, 2022, $66,747 of the deposits were uninsured.

The Partnership has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash or cash equivalents.

H. Capital Contributions
In accordance with the Partnership Agreement, the limited partner is required to make an additional capital contribution in the amount of $100,000 (subject to adjustment). The capital contribution will be used to pay amounts set forth in the development budget.

Capital contributions are made by the limited partner as the Partnership reaches certain operational benchmarks, including achievement of occupancy targets, and receipt of permanent financing and a final allocation of low-income housing tax credits. During 2022 and 2021 capital contributions were made in the amount of $14,557,065 and $0, respectively. 455 of 519
15 Arcata 7th Street LP
(A California Limited Partnership)

SUPPLEMENTAL INFORMATION
Year Ended December 31, 2022
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Arcata 7th Street, LP
(A California Limited Partnership)

SUPPLEMENTAL INFORMATION
Year Ended December 31, 2022
2022
Administrative Expenses:

Management fees $ 19,018
On-site manager payroll 35,623
Telephone 3,001
Office supplies and expenses 1,629
Training and travel expenses 1,212
Professional fees 2,838
Other 4,824
Total Administration $ 68,145
Operating & Maintenance:

Maintenance payroll $ 19,521
Grounds maintenance 2,614
Maintenance and repairs 9,368
Painting and decorating
Total Operating and Maintenance $ 31,503
Utilities:

Electricity $ 35,908
Water 10,841
Sewer 12,792
Garbage removal 17,698
Total Utilities $ 77,239
Other:

Legal fees $ 1,666
Other taxes, license and permit 662
Other 48
Total Other $ 2,376
See Independent Auditors' Report
16 457 of 519
Eureka 4th Street LP
(A California Limited Partnership)
HCD No. 18-NPLH-12676
________________________________________
Report on Audits of
Financial Statements
Years Ended
December 31, 2022 and 2021
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Eureka 4th Street LP
(A California Limited Partnership)

Name: Leavitt, Christensen & Co., PLLC
Address: 6149 N. Meeker Place Ste. 250
Boise, ID 83713
Phone number: (208) 287-5353
Lead auditor: Ryan T. Leavitt
Idaho license number: CP-5035

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Contents
Independent Auditors' Report 1
Balance Sheets 4
Statements of Operations 5
Statements of Changes in Partners' Capital (Deficit) 6
Statements of Cash Flows 7
Notes to Financial Statements 9
Supplemental Information 17
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters 23 Audit Findings and Management Response 25
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1 Independent Auditors' Report
February 10, 2023
To the Partners
Eureka 4th Street LP
(A California Limited Partnership)
Arcata, California
Report on the Audit of the Financial Statements
Opinion
We were engaged to audit the accompanying financial statements of Eureka 4th Street LP (A California Limited Partnership), which comprise the balance sheet as of December 31, 2022, and the related statement of operations, changes in partners’ capital and cash flows for the year then ended, and the related notes to the financial statements.

Auditors’ Responsibility 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 and Government Auditing Standards will always detect a material misstatement when it exists.
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2 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 omissions, misrepresentations, or the override of internal control.

In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards and the requirements of the Audited Financial Statement Handbook for Multifamily Rental Housing of the California Department of Housing and Community Development and the California Housing Finance Agency, we have also issued a report dated February 10, 2023 (see pages 23 to 24) on our consideration of Eureka 4th Street LP's internal control over financial reporting and on our tests of its compliance with laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of the testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing and the requirements of the Audited Financial Statement Handbook for Multifamily Rental Housing of the California Department of Housing and Community Development and the California Housing Finance Agency in considering Eureka 4th Street LP’s internal control over financial reporting and compliance.
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3 Disclaimer on Procedures Related to Tax Credit Compliance The partnership has filed tax returns with the Internal Revenue Service which allow the partners to receive the benefit of a low-income housing tax credit. Due to the fact that the low-income housing tax credit relates to income taxes which are the responsibility of the individual partners, the scope of the audit was not designed or intended to audit the compliance with the various low-income housing tax credit laws. Therefore, these audits cannot be relied on to give assurances with regard to compliance with any low-income housing tax credit laws.

Boise, ID
Leavitt, Christensen & Co., PLLC
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Eureka 4th Street Limited Partnership

BALANCE SHEETS
as of December 31, 2022 and 2021
ASSETS 2022 2021
CURRENT ASSETS:

Deferred costs, net of $13,219 and $8,262 accumulated amortization 66,090 61,133 TOTAL OTHER ASSETS 66,090 61,133
TOTAL ASSETS $ 17,374,448 $ 18,133,531

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:

Prepaid rents 25,259 12,497
Tenant security deposits 13,053 14,996
TOTAL DEPOSITS AND PREPAID LIABILITIES 40,255 25,550
LONG TERM LIABILITIES:

STATEMENTS OF CASH FLOWS
Years Ended December 31, 2022 and 2021
2022 2021
CASH FLOWS FROM OPERATIONS:

NET CASH PROVIDED (USED) BY INVESTING - -
CASH FLOWS FROM FINANCING ACTIVITIES:

See accompanying notes to the financial statements
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7 519
Eureka 4th Street Limited Partnership

STATEMENTS OF CASH FLOWS
Years Ended December 31, 2022 and 2021
2022 2021

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
FLOWS PROVIDED (USED) BY OPERATIONS:

Net income (loss) $ (758,257) $ (998,132)
Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization 643,883 643,883
Permanent financing cost amortization 4,167 1,736
Decrease (increase) in:

Tenant accounts receivable 10,398 17,308
Prepaid expenses (2,960) 3,580
Increase (decrease) in:

Tenants are required to recertify their income and assets annually or whenever their income changes. The tenant rent payment may change based upon the recertification. The tenant apartment leases are one-year renewable lease contracts. Monthly tenant rent is recognized on a monthly basis upon occupancy of the rental unit as the performance obligation is satisfied. The annual leases are cancelable by the tenants upon 30-day notice.
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10 Interest and Other Income
The Partnership earns interest on certain bank accounts including the tenant security deposit and replacement reserve accounts. Interest is recorded when paid by the bank. Additionally, the Project provides on-site laundry equipment for use by the Apartment residents, assesses late rental charges and apartment damages to tenants. These amounts are recorded as other income.

Tenant Receivables
Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, security deposit or the charges for damages and cleaning fees. The Partnership does not accrue interest on the tenant receivable balances. The Partnership has not established an allowance for doubtful accounts and does not use the reserve method for recognizing bad debts. Bad debts are written off to bad debt expense in the period management determines that collection is not probable. 470 of 519
11 Deferred Costs
Deferred costs consist of tax credit fees. Deferred costs are amortized using the straight-line method over the tax credit compliance period.

Consequently, the impact of implementing this standard will not be material to the financial statements and related disclosures.
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12 B. Restricted Deposits and Funded Reserves
Tenant Security Deposits
Tenant security deposits are deposited into a separate bank account and held in trust for the tenants until they vacate the property. The deposits are held in a federally insured bank account in the name of the Project.

Repayment of the security deposit is to occur within fourteen days of vacancy. Any amounts forfeited by tenants due to lease violations are transferred to the project's operating account.

Expenditures are subject to the approval by the Investor Limited Partner and by HCD.

An analysis of the activity for 2022 and 2021, and the reserve's status at December 31, 2022 and 2021 is:

Replacement Reserve
2022 2021
Balance, January 1, $ 31,875 $ -
Deposits 25,500 31,875
Withdrawals - (2,124)
Balance, December 31, 55,251 $ 31,875 $
Other Reserves
The Partnership is required to maintain certain tax and insurance as well as other escrow deposits and reserve balances. An analysis of the activity for 2022 and 2021 follows:
2022
Beginning End
of year Additions Withdrawals of year
Operating Reserve $ 127,121 $ - $ - $ 127,121
Subsidy Transition Reserve $ 283,416 $ - $ - $ 283,416
Capitalized Operating Subsidy Reserve $ 349,170 $ - $ 113,576 $ 235,594 Compliance Controlled Account $ 369,180 $ - $ - $ 369,180 2021
Beginning End
of year Additions Withdrawals of year
Operating Reserve $- $ 127,121 $ - $ 127,121
Subsidy Transition Reserve $- $ 283,416 $ - $ 283,416
Capitalized Operating Subsidy Reserve $- $ 349,170 $ - $ 349,170 Compliance Controlled Account $- $ 369,180 $ - $ 369,180 472 of 519
13 2022 2021
Real Estate Taxes Payable December 31, $ - $ -
Real Estate Tax Expense $ - $ 12,352
Property Insurance Expense $ 14,798 $ 15,210
Other Tax and Insurance Information
During 2022, the Limited Partnership applied for and received an exemption from property taxes. During 2022, the Project received property tax reimbursements of $50,203, which are recorded as other income. As of December 31, 2022 and 2021, no property tax amounts were due, respectively.

Monthly principal and interest payments began August 2021. The accrued interest as of December 31, 2022 and 2021 was $10,125 and $10,210, respectively.

The Partnership has a loan payable to HCD secured by a deed of trust on the Partnership’s property. The mortgage notes are collateralized by the buildings and land. Cash payments of principal and interest are payable in annual installments. Annual payments for 30 years are in the amount of .42% per year on the original principal balance of the loan. The accrued interest as of December 31, 2022 and 2021 was $94,466 and $30,630, respectively.
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14 Long-term debt and related information at December 31, 2022 and 2021 consisted of the following:
2022 2021
Pacific Western Bank loan, original loan balance
$2,070,000; bearing interest at 5.75%, payable in
monthly installments of principal and interest of
$11,569 through 2056. $ 2,051,745 2,044,319 $
HCD loan, bearing simple interest at 3%, payable in
annual installments over 30 years of principal and
interest. The note will mature in August 2076. 1,125,000 1,125,000 Eureka Veterans Village, LLC loan, non-interest
bearing, with the principal balance due 2075. 1,681,808 1,681,808 HCD loan, bearing simple interest at 3%, payable in
annual installments over 30 years of principal and
interest. The note will mature in August 2076. $ 2,798,707 2,798,707 $ 7,657,260 7,649,834
Less current portion (20,201) (19,048)
Total long-term debt $ 7,638,212 7,629,633 $
Maturities of long-term debt for the next five years are:
2023 20,201 $
2024 21,071
2025 22,673
2026 24,030
2027 25,469
113,444
Thereafter 7,536,390
Total 7,649,834 $
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15 D. Related Party Transactions
Property Management Company
The Project is managed by Danco Property Management, (an affiliate of a general partner). The partnership has a management fee agreement with Danco Property Management to pay management fees calculated at 7.7% of gross rental receipts.

Due to Affiliates
During 2022, the Partnership received funds from a related entity. The unpaid balance at December 31, 2022 was $20,000.
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16 Related party receivables
The Partnership has receivables relating to the payment of a one-time monitoring fee paid by Danco Communities to TCAC. The outstanding balance as of December 31, 2022 and 2021 as follows:

F. Subsequent Events
Management has evaluated events through February 10, 2023, the date which the financial statements were available to be issued.

At December 31, 2021, the deposits at one bank totaled $1,201,049, which exceeds the $250,000 maximum. Therefore, at December 31, 2021, $951,049 of the deposits were uninsured.

The Partnership has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash or cash equivalents.
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17 Eureka 4th Street LP
(A California Limited Partnership)

SUPPLEMENTARY INFORMATION
Years Ended December 31, 2022 and 2021
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EUREKA 4TH STREET LP

SCHEDULE OF OPERATING REVENUES AND EXPENSES
For the Year Ended December 31, 2022
NPLH
Assisted Other Total

REVENUES

SUPPLEMENTARY INFORMATION REQUIRED BY THE

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
For the Year Ended December 31, 2022
Cash on Hand and in Banks 2022
Unrestricted accounts:

Checking Accounts $ 8,575
Total $ 8,575
Restricted accounts:

SUPPLEMENTARY INFORMATION REQUIRED BY THE

See Accountants' Report on Supplemental Information
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EUREKA 4TH STREET LP

SUPPLEMENTARY INFORMATION REQUIRED BY THE

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
(CONTINUED)
For the Year Ended December 31, 2022
Operating cash flow/surplus cash will be distributed according to the HCD method.

Operating Income
Total Income $ 580,261
Operating Expenses (442,675)
Adjusted Net Income 137,586
Other Activity
Mandatory Debt Service
Pacific Western Bank (138,830)
HCD-NPLH (11,755)
HCD-VHHP (4,725)
Deposits into Replacement Reserve Account (25,500)
Total Other Activity (180,810)
Operating Cash Flow/Surplus Cash $ (43,224)
See Accountants' Report on Supplemental Information
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23 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINCANCIAL STATEMENTS PERFORMED IN

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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. Given those 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 were not identified. 6149 N. Meeker Place, Suite 250 • Boise, Idaho 83713 • (208) 287-5353 • Fax (208) 994-0716 483 of 519
24 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Eureka 4th Street LP's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.

Boise, ID
Leavitt, Christensen & Co., PLLC
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25 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS Year Ended December 31, 2022
Finding 2022-001
Compliance Finding:

Over billed payroll expenses
Condition and Context:

The Property Management Company overbilled the project for payroll expenses.

Cause:

We noted that during the year, the property management company included a profit margin in the payroll charges billed to the Project
Criteria:

The property management company cannot receive funds in excess of reasonable payroll cost reimbursements.

Effect:

The Project is out of compliance with the Partnership Agreement and Lenders’ Regulatory Agreement.

Recommendation:

The property management company should only charge the Project the actual amount of payroll expenses. 485 of 519
26 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS

MANAGEMENT RESPONSE
Year Ended December 31, 2022
Finding 2022-001
Compliance Finding:

Over billed payroll expenses
Condition and Context:

The Property Management Company overbilled the Project for payroll expenses.

Management Response:

The Property Management Company will only charge the Project the actual amount of payroll expenses going forward.
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27 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS Year Ended December 31, 2022
Finding 2022-002
Compliance Finding
Unauthorized transfers
Condition and Context:

Criteria:

Cause:

Effect:

The Project reserves should remain fully funded throughout the year and should only be moved with the proper authorization.

The Management did not follow the Partnership and Lenders’ Regulatory Agreement in maintaining the reserves.

The Project is out of compliance with the Partnership Agreement and Lenders’ Regulatory Agreement.

Recommendation:

We recommend that the project should only transfer funds outside the Partnership with the proper authorization.
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28 Eureka 4th Street LP
(A California Limited Partnership)

SCHEDULE OF FINDINGS, QUESTIONED COSTS, AND RECOMMENDATIONS

MANAGEMENT RESPONSE
Year Ended December 31, 2022
Finding 2022-002
Compliance Finding
Unauthorized transfers
Condition and Context:

Management Response:

The funds were transferred back into the reserve bank accounts during January 2022. The Project will avoid making unauthorized transfers in the future.
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29 Eureka 4th Street LP
(A California Limited Partnership)
AUDITORS’ COMMENTS ON PRIOR YEAR AUDIT FINDINGS
Year Ended December 31, 2022

PRIOR YEAR FINDINGS
Finding 2021-001
Compliance Finding
Unauthorized transfers
Condition and Context:

Criteria:

Cause:

The Project reserves should remain fully funded throughout the year and should only be moved with the proper authorization.

The Management did not follow the Partnership and Lenders’ Regulatory Agreement in maintaining the reserves.

Effect:

The Project is out of compliance with the Partnership Agreement and Lenders’ Regulatory Agreement.

AUDITORS’ COMMENTS:

We find that in 2022 the management company continued to transfer funds outside the Partnership. See Current Year Audit Finding 2022-002.
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Samoa Vance Ave LP
(A California Limited Partnership)
________________________________________
Report on Audits of
Financial Statements
Years Ended
December 31, 2022 and 2021
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Samoa Vance Ave LP
(A California Limited Partnership)

INDEPENDENT AUDITOR INFORMATION
Years Ended December 31, 2022 and 2021
The December 31, 2022 audit of Samoa Vance Ave LP (A California Limited Partnership) was performed by Leavitt, Christensen & Co., PLLC. The December 31, 2021 audit of Samoa Vance Ave LP (A California Limited Partnership) was performed by other auditors. Additional information on Leavitt, Christensen & Co., PLLC follows:

Name: Leavitt, Christensen & Co., PLLC
Address: 6149 N. Meeker Place Ste. 250
Boise, ID 83713
Phone number: (208) 287-5353
Lead auditor: Ryan Leavitt
Idaho license number: CP-5035

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Contents
Independent Auditors' Report 1
Balance Sheets 3
Statements of Operations 4
Statements of Changes in Partners' Capital (Deficit) 5
Statements of Cash Flows 6
Notes to Financial Statements 8
Supplemental Information 16
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1 Independent Auditors' Report
February 13, 2023
Managing Partner
Samoa Vance Ave LP
(A California Limited Partnership)
Arcata, CA
Opinion
We have audited the accompanying financial statements of Samoa Vance Ave LP (A California Limited Partnership), which comprise the balance sheet as of December 31, 2022, and the related statements of operations, changes in partners’ capital and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements present fairly, in all material respects, the financial position of Samoa Vance Ave LP as of December 31, 2022, and the results of its operations, changes in partners’ capital and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). 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 Samoa Vance Ave LP and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Prior Period Financial Statements
The financial statements of Samoa Vance Ave LP as of December 31, 2021 were audited by other auditors whose report dated March 1, 2022 expressed an unmodified opinion on those statements.

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 Samoa Vance Ave LP’s ability to continue as a going concern for one year from the date that the financial statements are available to be issued. 6149 N. Meeker Place, Suite 250 • Boise, Idaho 83713 • (208) 287-5353 • Fax (208) 994-0716 493 of 519
2 Auditors’ Responsibility 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.

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 Samoa Vance Ave LP’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 Samoa Vance Ave LP’s ability to continue as a going concern for a reasonable period of time.

Report on Supplemental Information
Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The Supplemental Information (see pages 16 to 17) is presented for purposes of additional analysis and is not a required part of the financial statements.

In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Leavitt, Christensen & Co., PLLC
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Samoa Vance Ave, LP
(A California Limited Partnership)

BALANCE SHEETS
December 31, 2022 and 2021
ASSETS 2022 2021
CURRENT ASSETS:

Cash on hand and in banks $ 555,484 $ 396,345
Prepaid Expenses 5,039 -
Accounts receivable - California Tax Credit Allocation Committee - 55,406 Accounts receivable - tenant 46,149 69,974
Accounts receivable - affiliates 3,650 47,916
TOTAL CURRENT ASSETS 569,641 610,322
RESTRICTED DEPOSITS & FUNDED RESERVES:

Tenant security deposits 20,000 34,978
Required replacement reserve 35,097 12,000
Operating reserve 169,358 -
TOTAL RESTRICTED DEPOSITS & FUNDED RESERVES 46,978 224,455 RENTAL PROPERTY:

Land 1,000,000 1,000,000
Building, improvements and equipment 29,164,281 29,164,281 30,164,281 30,164,281
Accumulated depreciation (2,273,395) (1,082,866)
NET RENTAL PROPERTY 29,081,415 27,890,886
OTHER ASSETS:

Deferred costs, net of $13,467 and $5,021 accumulated amortization 113,219 121,665 Interest receivable on note from affiliate 117,062 117,062 TOTAL OTHER ASSETS 238,727 230,281
TOTAL ASSETS $ 28,955,944 $ 29,936,761

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES:

Accounts payable $ 47,621 $ 50,994
Due to related party - 27,174
Partnership fees payable 10,872 5,567
Asset management fees payable - 5,655
Payable to co-administrative general partner 87,796 106,746 Construction costs payable 8,535 421,687
Accrued interest payable 133,732 105,708
Current portion of mortgage note payable 69,572 1,679,553 TOTAL CURRENT LIABILITIES 2,403,084 358,128
DEPOSITS AND PREPAID LIABILITIES:

Tenant security deposits 44,793 34,978
Unearned rents 14,175 -
TOTAL DEPOSITS AND PREPAID LIABILITIES 34,978 58,968
LONG TERM LIABILITIES:

Mortgage note payable, less current portion 10,041,085 9,789,249 Permanent financing costs, net of $4,257 and $278 accumulated amortization (102,562) (106,541) Long-term mortgage note payable, net of unamortized permanent financing costs 9,938,523 9,682,708 Developer fee payable 1,201,493 2,160,460
TOTAL LONG TERM LIABILITIES 11,843,168 11,140,016
TOTAL LIABILITIES 14,281,230 11,557,112
PARTNERS' CAPITAL (DEFICIT) 15,655,531 17,398,832
TOTAL LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) $ 28,955,944 $ 29,936,761 See accompanying notes to the financial statements
3 495 of 519
Samoa Vance Ave, LP
(A California Limited Partnership)

STATEMENTS OF OPERATIONS
Years Ended December 31, 2022 and 2021
REVENUES: 2022 2021
Rent revenue $ 880,878 $ 682,881
Interest - 40,658
Other income 19,139 16,797
TOTAL NET REVENUE 897,675 742,678
EXPENSES:

Operating expenses
Administrative expenses 117,967 118,605
Operating and maintenance 117,444 53,181
Utilities 145,302 140,949
Mortgage interest 312,605 791,470
Real estate taxes - 7,039
Property insurance and claims 29,513 28,897
Other expenses 1,033 29,159
1,141,174 751,990
NET OPERATING INCOME (LOSS) (398,496) 145,685
Non-Operating expenses
Depreciation and amortization 1,198,975 1,052,998
Organization costs - 24,925
Partnership expenses 10,388 10,610
1,088,311 1,209,585
NET INCOME (LOSS) $ (1,063,900) $ (1,486,807)
See accompanying notes to the financial statements
4 496 of 519
Samoa Vance Ave, LP
(A California Limited Partnership)

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
Years Ended December 31, 2022 and 2021
2022
General Limited
Partner Partner Total
Partners' capital (deficit),
January 1 $ (43) $ 15,655,574 $ 15,655,531
Capital contributions 2,807,819 - 2,807,819
Distribution (618) - (618)
Net income (loss) (1,063,794) (106) (1,063,900)
Partners' capital (deficit),
December 31 $ (149) $ 17,398,981 $ 17,398,832
2021
General Limited
Partner Partner Total
Partners' capital (deficit),
January 1 $ 106 $ 2,038,669 $ 2,038,775
Capital contributions 15,103,563 - 15,103,563
Net income (loss) (1,486,658) (149) (1,486,807)
Partners' capital (deficit),
December 31 $ (43) $ 15,655,574 $ 15,655,531
See accompanying notes to the financial statements
5 497 of 519
Samoa Vance Ave, LP
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS
Years Ended December 31, 2022 and 2021
2022 2021
CASH FLOWS FROM OPERATIONS:

Rental receipts $ 918,878 $ 612,907
Other receipts 26,612 38,935
Administrative payments (131,958) (250,064)
Operating and maintenance payments (115,909) (63,507)
Utilities paid (136,219) (160,882)
Property taxes - (7,039)
Interest paid (280,602) (817,842)
Insurance payments (34,552) (28,897)
Social service payments - (24,925)
Other payments (40,119) (1,033)
NET CASH PROVIDED (USED) BY OPERATIONS 206,131 (702,347) CASH FLOWS FROM INVESTING ACTIVITIES:

Notes receivable from affiliates - 995,980
Purchase of property and equipment - (1,655,128)
NET CASH PROVIDED (USED) BY INVESTING - (659,148)
CASH FLOWS FROM FINANCING ACTIVITIES:

Capital contributions 2,807,819 15,103,563
Distributions (618)
Due to/from related parties (1,858) 1,858
Developer fee payable (958,967) (238,571)
Payment of construction loan (413,152) 365,014
Debt issuance costs incurred - (106,819)
Tax credit fees 55,406 (126,686)
Proceeds mortgage and note payable 320,607 767,241
Mortgage and note payable principal payments (14,323,391) (1,678,752) NET CASH PROVIDED (USED) BY FINANCING 130,485 1,442,209 NET INCREASE (DECREASE) IN CASH 80,714 336,616
CASH - BEGINNING OF PERIOD 443,323 362,609
CASH - END OF PERIOD $ 779,939 $ 443,323
Cash on hand and in banks $ 555,484 $ 396,345
Tenant security deposits 20,000 34,978
Required reserve 35,097 12,000
Operating Reserve 169,358 -
$ 779,939 $ 443,323
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheet that sum to the total of the same such amounts shown in the Statement of Cash Flows.

Total cash, cash equivalents, and restricted cash
shown in the statement of cash flows
See accompanying notes to the financial statements
498 of
6 519
Samoa Vance Ave, LP
(A California Limited Partnership)

STATEMENTS OF CASH FLOWS
Years Ended December 31, 2022 and 2021
2022 2021

RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH FLOWS PROVIDED (USED) BY OPERATIONS:

Net income (loss) $ (1,063,900) $ (1,486,807)
Adjustments to reconcile net income to net cash provided by Depreciation and amortization 1,198,975 1,052,998
Permanent financing cost amortization 3,979 278
Decrease (increase) in:

Tenant accounts receivable 23,825 (69,974)
Prepaid expenses (5,039) -
Interest income from affiliates - (40,658)
Increase (decrease) in:

Accounts payable (3,373) (161,718)
Accrued interest payable 28,024 (26,650)
Tenant security deposit payable 9,815 19,796
Unearned rents 14,175 -
Partnership fees payable 5,305 5,150
Asset management fees payable 5,238 (5,655)
NET CASH PROVIDED BY OPERATIONS: $ 206,131 $ (702,347)
See accompanying notes to the financial statements
7 499 of 519
8 Samoa Vance Ave LP
(A California Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 2022 and 2021
A. Organization and Significant Accounting Policies
Organization
Samoa Vance Ave LP was formed under the laws of the State of California in August 2017, to develop, own, and operate Samoa Coast Townhomes, a low-income apartment complex of 80 units in Samoa, California. Construction was completed and operations began on a portion of the Project in November 2020. The remainder of the Project was completed by May 2021. The project is financed with mortgage loans provided by Pacific Western Bank, a loan from Community Revitalization and Development Corporation and a loan provided by the Humboldt Area Foundation.

The Partnership operates the apartment complex in compliance with all applicable Federal and State regulations in such a manner as to qualify the apartment as an affordable housing project. The General Partners are Community Revitalization and Development Corporation (CRDC), a California nonprofit corporation which owns 0.0001%, Johnson & Johnson Investments, LLC, which owns .0045%, and Danco Communities, which owns .0045%. The Limited Partner is Raymond James California Housing Opportunities Fund V LLC, which owns 99.99%.

Rental Income
The Project leases its rental units to low and moderate-income individuals in the Eureka, California area.

In association with the low-income tax credits, the townhomes are operated subject to certain restriction with regard to targeted low-income tenants that the units will be rented to.

Revenue Recognition
The Partnership revenue includes revenue from tenant apartment leases, interest income and other income.

Revenue is recognized upon the completion of the underlying performance obligations related to the type of revenue.

The tenant apartment leases are one-year renewable lease contracts. Monthly tenant rent is recognized on a monthly basis upon occupancy of the rental unit as the performance obligation is satisfied. The annual leases are cancelable by the tenants upon 30-day notice. 500 of 519
9 Interest and Other Income
The Partnership earns interest on certain bank accounts including the tenant security deposit and replacement reserve accounts. Interest is recorded when paid by the bank. Additionally, the Project provides on-site laundry equipment for use by the Apartment residents, assesses late rental charges and apartment damages to tenants. These amounts are recorded as other income.

Income Taxes
The Partnership is organized as a limited partnership. Accordingly, all profits and losses of the partnership are recognized by each partner on their respective tax returns. Federal and state tax authorities generally have the right to examine and audit the previous three years of tax returns filed. Any interest or penalties assessed to the partnership are recorded in operating expenses. For the years ended December 31, 2022 and 2021, there were no penalties recorded in the accompanying financial statements.

Rental Property
Land, buildings, and improvements are recorded at cost. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Management evaluates the Project’s property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment losses were recorded for the years ended December 31, 2022 and 2021. Depreciation is provided using the straight-line and/or accelerated methods over the estimated useful lives of the assets, as follows:

Years
Land improvements 15
Building and improvements 40
Furniture and equipment 5
Expenditures for maintenance and repairs are charged to operating expenses as incurred. The cost and accumulated depreciation of assets sold or otherwise retired are removed from the accounts and gain or loss on disposition is included in the results of operations.

Tenant Receivables
Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, security deposit or the charges for damages and cleaning fees. The Partnership does not accrue interest on the tenant receivable balances. The Partnership has not established an allowance for doubtful accounts and does not use the reserve method for recognizing bad debts. Bad debts are written off to bad debt expense in the period management determines that collection is not probable. 501 of 519
10 Organizational Costs
Organizational costs are expensed as incurred.

Deferred Costs
Deferred costs consist of tax credit fees. Deferred costs are amortized using the straight-line method over the tax credit compliance period.

Amortization schedule for tax credit fees:
2023 8,446 $
2024 8,446
2025 8,446
2026 8,446
2027 8,446
42,230
Thereafter 70,989
Total 113,219 $
Permanent Financing Costs
Permanent financing costs consist of loan origination costs. The costs are amortized using the straight-line method over the estimated life of the loans. Amortization of the costs is reported as interest expense.

Amortization schedule for finance costs:
2023 4,681 $
2024 4,681
2025 4,681
2026 4,681
2027 4,681
23,405
Thereafter 79,157
Total 102,562 $
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Consequently, the impact of implementing this standard will not be material to the financial statements and related disclosures.
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11 B. Restricted Deposits and Funded Reserves
Tenant Security Deposits
Tenant security deposits are deposited into a separate bank account and held in trust for the tenants until they vacate the property. The deposits are held in a federally insured bank account in the name of the Project.

Repayment of the security deposit is to occur within fourteen days of vacancy. Any amounts forfeited by tenants due to lease violations are transferred to the project's operating account.

Replacement Reserves
Under the partnership agreement, the Partnership is required to make deposits of $2,000 beginning six months after the completion of construction. These deposits are subject to an annual increase of 3%. In 2022 and 2021 the Partnership deposited the unadjusted required deposits. Use of these funds is restricted to renovation or special maintenance which is subject to approval by the General Partner.

An analysis of the activity for 2022 and 2021, and the reserve's status at December 31, 2022 and 2021 is:

Replacement Reserve
2022 2021
Balance, January 1, $ 12,000 $ -
Deposits 24,000 12,000
Withdrawals - (903)
Balance, December 31, 35,097 $ 12,000 $
Operating Reserve
Under the Partnership Agreement, the Partnership is required to maintain a reserve account for the purpose of payment from operating deficits. The Partnership made an initial deposit of $169,358 from the proceeds of the third capital contribution during 2022. The Partnership is required to make distributions from net cash flow to fund the operating reserve should the balance fall below $165,000.

An analysis of the activity for 2022 and 2021, and the reserve's status at December 31, 2022 and 2021 is:

Operating Reserve
2022 2021
Balance, January 1, $ - $ -
Deposits 169,358 -
Withdrawals - -
Balance, December 31, 169,358 $ - $
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12 Other Tax and Insurance Information
2022 2021
Real Estate Taxes Payable December 31, $ - - $
Real Estate Tax Expense $ 7,039 - $
Property Insurance Expense $ 28,897 29,513 $
During 2022, the Limited Partnership applied for and received an exemption from property taxes. As of December 31, 2022, no property tax amounts were paid and no amounts were due, respectively.

C. Mortgage Notes Payable
The mortgage notes payable consists of a loan through Pacific Western Bank, a loan from Community Revitalization and Development Corporation and a loan from Humboldt Area Foundation. The mortgage notes are collateralized by the buildings and land. Cash payments of principal and interest are payable in monthly or annual installments as indicated below.

Long-term debt and related information at December 31, 2022 and 2021 consisted of the following:

2022 2021
Pacific Western Bank construction note payable,
bearing interest at 4.5% and secured by a deed of
trust on the Partnership's property. Payable in
monthly principal and interest installments of
$26,957. At December 31, 2022 and 2021, the
accrued interest is $21,697 and $29,763,
respectively. $ 7,276,409 5,597,657 $
The Partnership has a note payable to the managing
general partner, Community Revitalization and
Development Corporation (CRDC), a California
nonprofit, of $3,513,000, non-interest bearing,
secured by a second deed of trust on the
Partnership's property. All principal is due March
2074. 3,192,393 3,513,000
The Partnership has a note payable to Humboldt
Area Foundation of $1,000,000, simple interest at
3%, secured by a third deed of trust on the property.

All principal is due June 2074. At December 31,
2022 and 2021, the accrued interest is $112,035 and
$75,945, respectively. 1,000,000 1,000,000
11,468,802 10,110,657
Less current portion (69,572) (1,679,553)
Total long-term debt $ 10,041,085 $ 9,789,249
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13 Maturities of long-term debt for the next five years are:
2023 $ 69,572
2024 72,096
2025 76,173
2026 79,722
2027 83,436
380,999
Thereafter 9,729,658
Total 10,110,657 $
D. Related Party Transactions
Property Management Company
The Project is managed by Danco Property Management, (an affiliate of a general partner). The partnership has a management fee agreement with Danco Property Management to pay management fees calculated at 3.8% of gross rental receipts.

Danco employs management and maintenance personnel who perform work for the partnership. The partnership reimburses Danco for the payroll and benefits costs associated with these personnel.

Unpaid management fees and payroll costs are included in accounts payable.

2022 2021
Management Fees $ 33,473 $ 44,576
Payroll Payments $ 102,547 $ 85,289
Unpaid Management Fees at December 31, $ 4,172 $ -
Unpaid Payroll Costs at December 31, $ 8,329 $ -
Developer Fees
Danco Communities (an affiliate of a general partner) was the developer of the property and provided development services for $2,796,649. During 2022 and 2021 the partnership paid developer fees of $958,967 and $0, respectively. The unpaid balance of accrued developer fees as of December 31, 2022 and 2021 was $1,201,493 and $2,160,460, respectively.

Related Party Payables
Danco Communities in prior years advanced funds to pay for a California Tax Credit Allocation Committee performance deposit as well as funds to pay for tax filings. As of December 31, 2022 and 2021 the Partnership owed Danco Communities $87,796 and $106,746, respectively.

The Partnership contracted with Danco Builders (an affiliate of a general partner) for the construction of the project. As of December 31, 2022 and 2021 the Partnership owed Danco Builders $8,535 and $421,687, respectively.
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14 D. Related Party Transactions (continued)
Partnership Management Fee Payable
The managing general partner, CRDC, is a California nonprofit corporation which materially participates in and has substantial management duties with respect the Partnership in accordance with the California Property Tax Rules, 140, 140-1 and 140.2. Accordingly, the Partnership will receive a real property tax exemption for the project under Sec 214(g) of the California Revenue and Taxation Code, which enables the Partnership to charge lower rents to its tenants. The managing general partner fee incurred by the Partnership with respect to these services as of December 31, 2022 and 2021 was $5,305 and $5,150, respectively. The accrued balance as of December 31, 2022 and 2021 is $10,872 and $5,567, respectively.

Asset Management Fee
The partnership pays an annual asset manager fee to the Limited Partner of $5,000, increasing by 3% per year as defined in the Asset Management Agreement. The agreement is for services related to reviewing informational reports, financial statements, and tax returns of the partnership. The asset management fees incurred by the Partnership with respect to these services as of December 31, 2022 and 2021 was $5,305 and $5,238, respectively.

The accrued balance as of December 31, 2022 and 2021 is $0 and $5,655, respectively.

Payable to Affiliate of General Partner
The Partnership was advanced funds in the past from an affiliate of the General Partner for insurance and other expenses. The unpaid balances as of December 31, 2022 and 2021 were $0 and $27,174, respectively.

Construction Costs Payable
The Partnership contracted with Danco Builders for the construction of the project. Danco Builders is owned by an affiliate of the administrative general partner of the Partnership. The total amount of the construction contracts are $22,825,288. The unpaid balance of construction costs payable at December 31, 2022 and 2021 was $8,535 and $421,687, respectively.

Related Party Receivables
In the past, the Partnership has made advances to the Administrative General Partner. These advances are due on demand.

In June 2109, the Partnership made a loan to an affiliate of the Administrative General Partner in the amount of $995,980. The interest rate on the loan is compounded annually. All principal and interest are due on demand. The principal was repaid in October 2021. As of December 31, 2022 and 2021, the accrued interest receivable was $117,062.

The amount of the advances and loans to affiliates is as of December 31, 2022 and 2021 as follows:

December 31, December 31,
2022 2021
Due from Danco Communities $ 3,650 $ 47,916
Note receivable from Danco Communities $ 117,062 $ 117,062 506 of 519
15 E. Economic Concentrations and Risks
The Partnership’s sole asset is Samoa Coast Townhomes. The Partnership’s operations are concentrated in the affordable housing real estate market. In addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives, rules and regulations are subject to change by an act of Congress or other regulatory agency. Such changes may occur with little or inadequate funding to pay for the related costs, including the additional administrative burden, to comply with a change.

F. Subsequent Events
Management has evaluated events through February 13, 2023, the date which the financial statements were available to be issued.

G. Additional Capital Contributions
In accordance with the Partnership Agreement, the Limited Partner is required to make an additional capital contribution in the amount of $200,000 (subject to adjustment).

Capital contributions are made by the Limited Partner as the Partnership reaches certain operational benchmarks, including achievement of occupancy targets, and receipt of permanent financing and a final allocation of lowincome housing tax credits. During 2022 and 2021, capital contributions were made of $2,807,819 and $15,103,563, respectively.

I. Cash Deposits
The partnership maintains cash deposits at various banks. The amount insured by the Federal Deposit Insurance Corporation is $250,000. At December 31, 2022, the deposits at one bank totaled $779,930, which exceeds the $250,000 maximum. Therefore, at December 31, 2022, $529,930 of the deposits were uninsured.

At December 31, 2021, the deposits at one bank totaled $443,323, which exceeds the $250,000 maximum.

Therefore, at December 31, 2021, $193,323 of the deposits were uninsured.

The Partnership has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash or cash equivalents.

G. Accounts Receivable - California Tax Credit Allocation Committee The Partnership, in a prior year, paid the California Tax Credit Allocation Committee $55,406 as part of the tax credit application. This amount was recorded on the balance sheet as a receivable. During 2022, the Partnership was refunded this amount upon the completion of the Project. The accounts receivable balance as of December 31, 2022 and 2021 was $0 and $55,406, respectively. 507 of 519
16 Samoa Vance Ave LP
(A California Limited Partnership)

SUPPLEMENTAL INFORMATION
Years Ended December 31, 2022 and 2021
508 of 519
Samoa Vance Ave, LP
(A California Limited Partnership)

SUPPLEMENTAL INFORMATION
Years Ended December 31, 2022 and 2021
2022 2021
Administrative Expenses:

Management fees $ 33,473 $ 44,576
On-site manager payroll 45,719 37,571
Telephone 13,593 13,000
Office supplies and expenses 1,614 6,532
Training and travel expenses - 195
Professional fees 9,651 8,450
Other 8,281 13,917
Total Administration $ 117,967 $ 118,605
Operating & Maintenance:

Maintenance payroll $ 52,120 $ 33,750
Grounds maintenance 19,840 13,968
Maintenance and repairs 5,463 45,484
Total Operating and Maintenance $ 117,444 $ 53,181
Utilities:

Electricity $ 16,733 $ 15,804
Water 33,600 24,581
Sewer 43,200 32,063
Garbage removal 68,501 51,769
Total Utilities $ 145,302 $ 140,949
Other:

Other taxes, license and permit $ 850 $ 1,033
Other - 28,309
Total Other $ 29,159 $ 1,033
See accompanying notes to the financial statements
17 509 of 519
5251 Ericson Way
Arcata, CA 95521
Phone: (707) 822 9000
Fax: (707) 822 9596
www.danco-group.com
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1 MEMORANDUM OF UNDERSTANDING
Between City of Yreka
and
The Danco Group (Danco)
THIS MEMORANDUM OF UNDERSTANDING, hereinafter referred to as "MOU" or "Agreement," is made and entered into on this day of , 2023, by and between the City of Yreka, a political subdivision of the State of California, (hereinafter known as "City"), and The Danco Group, a California nonprofit public benefit corporation (hereinafter known as "Danco"). Together the above entities shall be referred to hereafter as the "Parties." WHEREAS, DANCO proposes to develop and provide property management services for an affordable housing development ("Development") within the jurisdiction of the City of Yreka funded by the affordable housing programs (“Funding Programs”), with at least a portion of the units dedicated to house individuals experiencing homelessness that are eligible under the Funding Programs;
WHEREAS, the City and DANCO will jointly apply for housing development funds for the Development, if either party requests a joint application; WHEREAS, the funding award will be made directly to DANCO or an affiliate of DANCO through agreements with funding agencies.

WHEREAS, affordable housing shall include, but not be limited to, workforce housing, supportive
NOW, THEREFORE, the Parties mutually agree asfollows:

Section 2. Intent
The intention of this MOU is to outline the roles and responsibilities among the Parties and to coordinate their resources and efforts to provide permanent affordable housing to target populations within the City of Yreka. Supportive services may be made available to eligible residents who may benefit from such services, to help them maintain stable housing and/or achieve improvements in health, wellness, recovery, employment, income, socialization and quality of life.

Section 3. Guiding Principles
The Parties share the following principles that will guide the Parties under this MOU:
• All Parties shall work together, establish a foundation of trust and partnership, and provide seamless and high-quality services to each tenant, based on the tenant's 511 of 519
2 individual needs.
• All Parties agree to provide permanent supportive housing that incorporates core Housing First Guidelines (CA Welfare and institutions Code, Section 8255). • All mental health services shall be client-driven and coordinated with the needs and wishes of the tenant, if needed for the specific Development. • All Parties shall protect tenant privacy in the delivery of services. • The supportive services shall include linkage to community services.

Section 4. Scope of Services
A. Responsibilities of City

1. Co-apply for affordable housing development funds with DANCO.

2. Assist DANCO in the preparation of the application for funds.

3. Assist DANCO in identifying an appropriate property for acquisition.

4. Assist DANCO is securing all necessary planning permits for construction of the Development.

B. Responsibilities of DANCO

1. Development, Construction, and Property Management. DANCO will:
a. Legally organize an affiliated single purpose entity to own and operate the Development.
b. Have sole duties and responsibility for the successful development, operation, and management of the Development.
c. Ensure that the Development will meet all program requirements in its design, construction, and operation.
d. Ensure the design and construction of the Development will meet ADA requirements for accessibility.
e. Comply with prevailing wage laws regarding the payment of prevailing wages, if required by lenders. In addition to any other indemnification provision of this MOU, DANCO shall indemnify and hold the City harmless from and defend the City against any and all claims of liability for any failure by DANCO arising in part or in whole from its agents, contractors, or employees' failure to pay prevailing wages for work on the project or to comply with the duties proscribed by this section.
f. On an annual basis, execute a management contract with a bonded and licensed property management agent. DANCO shall ensure the property management contract includes copies of the applicable Regulatory Agreement(s) and are made a part of the contract.
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3 g. Provide a unit and office space within the Development for an on-site property manager, if required by funding agency or lenders.
h. Monitor and provide oversight of property management and ensure compliance with applicable local, State, and Federal statutes and regulations governing Fair Housing and tenant's rights.
i. Provide a 30-day written notice to the City prior to change in property management.

Any such change may need prior approval by the City, HCD, and other interested lenders.

2. Outreach, Application & Screening of Tenants. DANCO will:
a. Dedicate units in accordance with the Standard Agreement from funding agencies for eligible tenants.
b. Develop a Community Outreach and Marketing Plan for the Development. The Plan shall comply with applicable local, State and Federal Fair Housing regulations and shall use the Coordinated Entry System (CES) for dedicated units for tenant referrals. Develop an on-site wait list for housing units, if applicable, which includes procedures to administer the wait list, and ongoing maintenance of the wait list.

3. Ongoing Tenancy. DANCO shall:
a. Provide, directly or by contract, on-site supportive services that meet housing program requirements. Social services may include, but are not limited, to the following:
• Services Coordination
• Case Management
• Mental Health Services
• Benefit/Entitlement Assistance
• Health and Wellness Services
b. Ensure DANCO notifies Siskiyou County and City of Yreka staff and the local Coordinated Entry System Committee when new units under construction are placed into service and/or when vacancies occur in dedicated units.
c. Develop and maintain a clear separation of responsibilities and duties between property management and supportive services.
d. Collaborate with the County and City to help tenants resolve issues as they emerge.
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4 e. Provide regular training for on-site property management staff in advanced safety precautions, including first aid, crisis management, conflict de-escalation and other skills.

4. Communication and Reporting. DANCO will:
a. Provide on-site office space for County and community service agencies to conduct individual and confidential meetings with tenants. b. Comply with the necessary documentation and reporting requirements and guidelines as established by the City, County, funding agencies, and other project lenders.
c. Submit an annual audit prepared by a certified public accountant in accordance with commonly accepted accounting standards.

Section 7. Termination of this MOU
Either City or DANCO may terminate this MOU upon breach of this MOU by the other Party. A written notice of such breach must be given, and if the noticed Party fails to cure such breach to the reasonable satisfaction of the notifying Party within thirty (30) days of delivery of the notice of breach, or such extended period as is agreed necessary to cure the breach, such termination by the noticing Party shall be effective at the end of the cure period if no cure has been affected.

In addition, the following occurrences will give City the right to terminate this MOU:

A. A petition is filed for voluntary or involuntary bankruptcy by or on behalf of DANCO, which petition not dismissed within sixty (60) days.

B. DANCO makes a general assignment, or DANCO's interests hereunder are assigned involuntarily or by operation of law, for the benefit of creditors. 514 of 519
5 C. Abandonment of the Development by DANCO.

Notices to the City shall be addressed as follows:

City Manager
City of Yreka
701 4th Street 96097
Yreka, California
Alternatively, to such other location asthe City directs.

Notices to DANCO shall be addressed as follows:

Grant Manager
The Danco Group
5251 EricsonWay
Arcata, CA 95521
Alternatively, to such other locations as DANCO directs.

B. DELEGATION AND ASSIGNMENT: DANCO shall not delegate its duties or assign its rights under this MOU, or both, either in whole or in part, without prior written consent of the City, and any prohibited delegation or assignment shall be null and void; provided, however, no consent is required for DANCO to assign its rights and duties as development sponsor and owner under this MOU to an affiliated single purpose entity whose purpose is to provide for the continued development, ownership, and operation of the Development.

D. COMPLIANCE and NON-DISCRIMINATION: All Parties warrant and certify that, in 515 of 519
6 the performance of the MOU, they shall comply with all applicable laws, rules, regulations and orders of the United States, the State of California, the City of Yreka, and the County of Siskiyou, including the laws and regulations pertaining to labor, wages, hours and other conditions of employment. All Parties further warrant and certify that they shall comply with new, amended, or revised laws, regulations and/or procedures that apply to the performance of the MOU.

DANCO shall not discriminate in employment practices or in the delivery of services on the basis of race, color, creed, religion, national origin, sex, age, marital status, sexual orientation, medical condition (including cancer, HIV, and AIDS) physical or mental disability, use of family care leave under either the Family & Medical Leave Act or the California Family Rights Act, or on the basis of any other status or conduct protected by law.

DANCO and represents that DANCO is in compliance with and agrees that DANCO shall continue to comply with the Americans with Disabilities Act of 1990 (42 U.S.C. sections 12101, et seq.), the Fair Employment and Housing Act (Government Code sections 12900, et seq.), and regulations and guidelines issued pursuant thereto.

E. HOLD HARMLESS-INDEPENDENT PROJECT SPONSOR/DEVELOPER AND PROPERTY MANAGEMENT: It is understood and agreed by Partiesthat DANCO is an independent entity, and that no relationship of employer-employee exists between the Parties hereto outside of what is explicitly declared and outlined in this MOU. DANCO shall not be entitled to any benefits payable to employees of City, including City Workers' Compensation Benefits. The City is not required to make any deductions from the compensation payable to DANCO under the provisions of the MOU; and as an independent entity, DANCO hereby holds the City harmless from any and all claims that may be made against City based upon any contention by any third party that an employeremployees relationship exists by reason of this MOU.

F. LICENSES, PERMITS, REGISTRATIONS, ACCREDITATIONS, AND CERTIFICATES: DANCO officers, employees, and agents, and subcontractors performing the work or services required by this MOU, shall obtain and maintain in effect all necessary licenses, permits, certificates, and credentials required by the laws of the United States, the State of California, the City, the County, and all other appropriate governmental agencies, including any certification and credentials required by the City.

Failure to maintain the licenses, permits, certificates, and credentials shall be deemed a breach of this MOU and constitutes grounds for the termination of this MOU by the City.

G. CONFLICT OF INTEREST: DANCO officers and employees shall not have a financial interest, or acquire any financial interest, direct or indirect, in any business, property, or source of income that could be financially affected by or otherwise conflict in any manner or degree with the performance of the work or services required under this MOU.
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7 Section 10. Insurance and Indemnification
A. DANCO shall defend, indemnify, and hold the City, its officers, agents and employees, free and harmless from any claim and/or liability whatsoever, including wrongful death, based or asserted upon any acts or omission of DANCO, its agents, representatives, employees, and subcontractors, relating to or in any way connected with or arising from the performance of the work under this MOU by DANCO, its agents, representatives, employees, and subcontractors.

B. Without limiting DANCOs indemnification of the City, DANCO shall procure and maintain for the duration of this agreement, insurance against claims for injuries to persons or damages to property that may arise from, or be in connection with the performance of the work hereunder by DANCO, DANCO's agents, representatives, employees, and subcontractors. At the very least, DANCO shall maintain the insurance coverage, limits of coverage and other insurance requirements as described in Standard Insurance Requirements for City contracts (Attachment 1), which by reference is incorporated hereto. Certificates evidencing the maintenance of DANCO's insurance coverage shall be filed with the City.

Section 12. Signatures
All Parties mutually agree to fully, and faithfully perform all applications set forth in this MOU.

All parties agree to have their duly authorized signatories sign this MOU. [SIGNATURE PAGE FOLLOWS]
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8 IN WITNESS WHEREOF, the parties hereto have executed this MOU in the County of Siskiyou, State of California, on the dates set forth below, and each signatory represents that he/she has the authority to execute this agreement and to bind the party on whose behalf his/her execution is made.

The Danco Group
By: _________________________________________ _________________ Date
Name: _______________________________________
Title: ________________________________________
City of Yreka
By: ___________________________________________ __________________ Jason Ledbetter Date
City Manager
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Attachment 1

CITY OF YREKA

STANDARD INSURANCE REQUIREMENTS
Workers' Compensation:

Indemnification:

General Liability and Automobile Insurance:

Certificate of Insurance and Endorsements:

Professional Liability:
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Yreka City CouncilMay 16, 2023

Yreka City Council
May 16, 2023