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HomeMy Public PortalAboutCDP Cape Housing Institute CPC Application (900 community development partnership December 1, 2017 Paul Ruchinskas Chair, Brewster Community Preservation Committee Brewster Town Hall 2198 Main Street Brewster, MA 02631- 1898 RE : 2017 CPA PROJECT FUNDING REQUEST : Caoe Housing Institute , Dear Mr . Ruchinskas : I am pleased to enclose 12 copies of an application from the Lower Cape Cod Community Development Corporation d/ b/a the Community Development Partnership ( CDP ) in submission for 2017 CPA Project Funding . I have also enclosed a thumb drive containing the complete application . The CDP is excited about expanding our Cape Housing Institute in Year 2 ( 2018 ) to offer this training opportunity to municipal officials and town staff in Brewster along with advanced level topics for those who will have already attended the Cape Housing Institute in Year 1 ( 2017 ) . The Cape Housing Institute is a much needed continuing education opportunity as evidenced by the 73 Lower Cape officials who registered for our first annual 2017 Institute . These participants currently include members of the Brewster Community Preservation Committee, Brewster Finance Committee, Brewster Housing Partnership, Brewster Planning Board , Brewster Open Space Committee and staff from the Departments of Town Administration , Police and Planning . In total, eleven municipal officials and town staff from Brewster participated in the 2017 Cape Housing Institute . With 25 years of experience in managing and developing affordable housing, the CDP understands that creating more affordable housing in our region is complicated . That's why we created the Cape Housing Institute to demystify the process and support towns in creating and implementing a comprehensive housing supply strategy to meet current housing needs and plan for future growth . We look forward to the Committee' s response and please feel free to contact me with questions or comments . Sincerely, n� t � t I i �M1 Jay Cob�ur n C ief Ed edutive Officer L, 3 Main Street Mercantile, Unit 7, Eastham, MA 02642 ph : 508 . 240 . 7873 800 . 220 . 6202 fx : 508 . 240 . 5085 contact@capecdp . org www . capecdp . org www . facebook. com/capecdp Brewster • Chatham • Eastham • Harwich • Orleans • Provincetown • Truro • Wellfleet S+'.s191lili4{!!r,r 1 TQwn of Brewster ►� €a' Community Preservation Committee � � .4 ° .. - 2198 Main Street w ' = = Brewster Massachusetts 02631 - 1898 RR `STk1( NTLfIIAI, (508) 896=3701 x 133 � Fox (508) 89 &8089 � APPLICATION FOR COMMUNITY PRESERVATION ACT FUNDING Date Application Submitted : December 1 , 2017 Name of Project Applicant : Community Development Partnership Name of Co-Applicant(s) , if applicable : Name of Contact Person : Ann Robinson , Chief Program Officer Contact Person ' s Mailing Address * 3 Main Street Mercantile , Unit 7 , Eastham , 02642 Contact Person ' s Daytime Phone Number : ( 5 0 8 ) 240 - 7873 x13 Contact Person ' s email Address : ANN@CAPECDP . ORG Proposed Project Name : Cape Housing Institute Project Address (or assessor' s parcel ID) : Not applicable Project Synopsis : The Community Development Partnership seeks funding to support the second year of the Cape Housing Institute , a 6 - week training that equips local elected and appointed officials with the knowledge and skills needed to support the creation of more year - round housing in the Lower Cape , including Brewster . Category : ❑ Open Space ❑ Historic Preservation ❑ Recreation N Community Housing CPA funding requested $ $ 151000a00 Total Cost of Proposed Proj ect $ 17 5 , 0 0 0 PROJECT DESCRIPTION See attached Project Description Form 1111012015 Community Preservation Committee Application 3 I 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute Project Description 1 . Project Description The lack of affordable housing on Cape Cod is a crisis that places considerable strain on year round residents and impedes economic development in the region due to the lack of housing for the workforce . Affordable year- round rentals are in short supply, rental stock is limited due to the premium placed on high- priced summer vacation rentals, and lower-wage workers cannot afford market rate rents for year- round housing . In the US, 31% of housing units are occupied by renters, while on Cape Cod only 13% of housing units are available for year- round renters . Between 2010 and 2015, the Cape lost 3, 800 year- round housing units while gaining 5,000 seasonal units . To meet current needs, the Cape Cod Commission estimates that the Lower Cape needs 1, 100 new units of housing affordable to working families . Our proposed program , the Cape Housing Institute, will assist the Town of Brewster in responding to this crisis by supporting the creation of affordable housing in its town . The Cape Housing Institute is a component of the Cape Community Housing Partnership — a comprehensive response to insufficient affordable housing in Brewster and throughout Barnstable County. The region' s ability to respond to this housing crisis is hindered by land use policies that encourage sprawl and discourage smart growth oriented multi-family housing . Existing zoning has resulted in a housing monoculture : over 80% of the Cape' s housing is single family, detached homes on one acre lots . Local elected and appointed municipal officials and town staff are in need of training and technical assistance in the complexity of developing and managing housing that is affordable to year round residents in order to address this situation . Another major factor hindering the creation of affordable housing in the region has been community resistance to specific proposals to build affordable housing . Many voters have misconceptions and harbor stereotypes about working families in need of affordable housing. Few voters understand the economics of development and the need for density to reduce costs and impact on the environment . In June of 2017, the Community Development Partnership ( CDP ) launched a comprehensive community- based strategy entitled the Cape Community Housing Partnership ( CGRP ) in partnership with Housing Assistance Corporation . It is designed to build public support for affordable housing and equip LMI residents, business and community leaders, and local elected and appointed officials with the knowledge and skills to support the creation of more year- round housing. The CDP is responsible for implementing the CCHP on the Lower and Outer Cape while Housing Assistance Corporation is responsible for implementation on the Upper and Mid -Cape . The CCHP will help overcome many of the barriers to developing more affordable housing in the region in order to better meet the housing needs of working families . Without an informed electorate, skilled and knowledgeable volunteer officials, and town staff with expertise in affordable housing development, little progress can be made in addressing the region's affordable and year- round housing challenges . The CCHP will address these barriers through traditional community organizing and leadership development strategies in three ways : 1 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute Strateev 1 : Cane Housine Institute In October 2017, the CDP offered the first of what will be an annual Cape Housing Institute (CHI ) to educate at least 40 local elected and appointed officials across each town on the Lower and Outer Cape including the Town of Brewster. Training consists of a series of six workshops that equip officials with the knowledge and skills to support affordable housing development in their towns . Each workshop is held two times per week, once in each sub- region ( Lower Cape and Outer Cape ) to make the CHI accessible to both retirees and working people . We have collaborated with Mass Housing Partnership ( MHP ) and the Cape Cod Commission to develop the curriculum . Both organizations provide guest speakers and advice on the project. The Cape Housing Institute covers the following topics : 1. Session 1 : Introduction to Housing a . Defining affordability b . Overview of the Chapter 40B process c . Review of the Cape Cod Commission's 2017 Regional Housing Market Analysis and 10" Year Forecast of Housing Supply and Demand for Barnstable County 2 . Session 2 : Planning & Needs Assessment a . Developing a Housing Supply Strategy (going beyond a Housing Production Pian to create housing for all income levels ) b. Funding and technical assistance available to support development of a Housing Supply Strategy 3 . Session 3 : Zoning & Site Selection a . Current Cape Zoning and housing types b . Missing housing stock and housing types c. Site selection & Infrastructure issues 4. Session 4 : Financing 101 & Development a . Building affordably without subsidy and public subsidies in other forms b. Understanding an Operating Pro Forma for a Mixed -Income Rental Project c. Phases of Development 5 . Session 5 : Making the Case for Affordable Housing a . What is Fair Housing? Why is it important to build strong communities and when does it apply? b . The RFP process & issues that arise c. Chapter 30B Procurement rules 6 . Session 6 : Developing an Action Plan a . Regionalism : How towns can work together to solve their affordable housing problems b. Developing an Action Plan in your town Strateev 2 : Advocate Training Lower Cape residents concerned about the lack of affordable housing will be trained to develop leadership, organizing and public speaking skills to effectively engage in public hearings and Town Meetings. Participants will gain an understanding of how affordable housing is created and how decisions are made at a town level that affect the development of affordable housing. Training will launch in February 2018 . 2 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute Strateev 3 : Public Education Campaien Most municipal decisions affecting affordable housing development require a town meeting vote . Therefore, it is critical to develop broad support for affordable housing. This campaign is designed to dispel stereotypes about Low- Moderate Income residents of affordable housing developments . The CCHP will implement a media campaign that will launch in March 2018 and will utilize print, broadcast and social media to build broader support for affordable housing on the Cape . At the end of Year 1, the CDP will have already developed the curriculum and received feedback from a graduating class of municipal officials and staff making this project entirely feasible . The CDP will be poised to offer a second annual Cape Housing Institute building on lessons learned . As participants share their experience with colleagues, we are confident that demand for the Cape Housing Institute will increase . It is our goal to provide training to all town officials and staff who are interested . This application seeks funding to support Year Two of the Cape Housing Institute (July 1, 2018 through June 30, 2019) . Given regular turnover among elected and appointed officials , and the existence of a pool of over 400 eligible participants, the Cape Housing Institute will be offered annually . In addition , we will develop a program of quarterly half-day workshops for graduates of the Cape Housing Institute, designed to cover more advanced topics related to housing production and planning. To ensure knowledge stays current, participants of the Institute will receive communications regarding important information related to affordable housing . It is necessary that the Cape Housing Institute continues to build momentum from the previous year to address the urgency of meeting the housing needs of our Lower Cape towns . At this time, the CDP is the only organization offering affordable housing training and resources to Lower Cape towns through a regional approach and with a local, Cape Cod focus . The project will be expanded , beginning in Year 2, by adopting a model in existence in suburban Boston whereby 5 towns have joined forces to establish a regional affordable housing office to provide technical and planning services to towns around affordable housing production . By hiring consultants to work with individual towns on their specific needs, we will boost internal capacity and foster multi -town collaboration on affordable housing initiatives . As a non - profit, the CDP can more efficiently provide these services rather than having Towns contract for such services themselves . The CDP will seek Community Preservation Funds from each of the towns to provide these services . 2 . For Historic Preservation projects Not applicable 3 . CPA Goals/Criteria The Cape Housing Institute is specifically designed to assist the Town of Brewster in creating, preserving and supporting community housing for low-to- moderate income residents including families and seniors . As such, this project is eligible for CPA funds under the Community Housing eligible use . By attending the Cape Housing Institute and advanced training, Town officials and staff will have the knowledge and tools that they need to make decisions and implement strategies that increase affordable housing in a way that is appropriate for the town . Furthermore, Brewster will be better positioned to support the creation of affordable housing in a way that protects open space, maintains its historic character and enhances recreational use of land . 3 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute Alignment with the Brewster CPC General Criteria • Boost the vitality of the Town Reducing the burden of housing costs for residents is a critical component of community wellness and vitality. Cost burdened families experience greater financial and personal stress with a cascade of associated negative impacts to these families . Residents who are able to afford a safe and appropriate home are better able to engage with and contribute to the local economy . • Enhance the quality of life for Brewster residents Safe and decent housing is the most important aspect of life quality. Creating affordable housing for residents directly impacts their quality of life . • Serve a currently under-served Town population The primary beneficiaries of the Cape Housing Institute are local elected and appointed municipal officials who are involved in decisions that affect housing production . Municipal officials lack continuing education opportunities . The Cape Housing Institute is the only local training opportunity related to increasing the production of affordable housing . • Demonstrate practicality and feasibility, and ability to implement within budget The Community Development Partnership has developed the program expansion and budget based on actual year 1 costs and participants feedback. The CDP has a track record of high quality program delivery. • Leverage additional public and/or private funds The CDP has applied for private and public funding to support year 2 of the Cape Housing Institute . Additionally, the CDP will contribute reserve funds to fill the funding gap as necessary . • Preserve, enhance or better utilize existing Town resources The Cape . Housing Institute is designed to support town staff in better focusing their priorities and resources to implement strategies that have the highest potential for impact . As part of the year 2 expansion, the CDP will seek and pay for consultants to support town in accomplishing their specific affordable housing production goals . Alignment with the Brewster CPC Category Specific Criteria for Communitv Housing Proposals • Contribute to the goal of achieving 10 percent affordable housing • Promote a socioeconomic environment that encourages diversity • Provide housing that is harmonious in design and scale with the surrounding neighborhood • Ensure long-term affordability • Promote use of existing buildings or construction on previously-developed or Town- owned sites • Convert market rate to public subsidized units • Provide an appropriate mix of rental and ownership housing • Give priority to local residents, town employees, employees of local business as allowed by law 4 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute The purpose of the Cape Housing Institute is to provide Brewster elected and appointed officials, and staff with the knowledge and skills necessary to increase the supply of affordable housing in their town . By definition, these units will add to Brewster' s Subsidized Housing Inventory (SHI ) thereby getting closer to meeting the Commonwealth' s 10% affordability goal . However, the Institute will go further by teaching participants how to exceed this goal by planning for the future needs of town residents at all income levels . The Cape Housing Institute will support the Town of Brewster in determining its affordable housing needs and implementing strategies to meet those needs in a way that is place- based and contextual . Session one of the Cape Housing Institute lays the foundation for the institute by reviewing regional and town- level data on the current and future housing needs . Session two provides an overview of the different types of planning tools available to meet specific needs . The Cape Housing Institute will dedicate an entire session (three ) to Zoning and Site Selection . Understanding housing types as well as analyzing the housing stock that is missing in your town is critical to making informed decisions about the range of zoning tools available to meet production goals . A local affordable housing developer and architect will provide a unique perspective to zoning options and how they can help or hinder a town in utilizing zoning options that attract the type of development that Brewster desires and requires to reach 10% of affordable housing stock. Session three will also provide alternatives to current zoning and case studies that demonstrate how the town can meet housing needs in a way that is appropriate for Brewster. Throughout the Institute, we will be focusing on reducing sprawl and protecting open spaces by encouraging village housing close to infrastructure and amenities, which residents prefer. Session four will focus on understanding the complex financing required to develop affordable housing as well as the phases of development as they pertain to the town . In sessions two and four, participants will learn about funding sources and municipal subsidies that can support these processes and attract high quality developments . In Session five we will review the historical policies that have led to the homogenous population that we have on the Cape and the resulting Fair Housing regulations that towns must abide by . Participants will understand why each town is legally obligated to take action to increase diversity in our region . Session six will discuss regionalism and the utility of sharing housing staff and knowledge across towns to leverage limited resources and share solutions across the region . This session will also support Brewster participants in identifying concrete action items that are specific to the Town of Brewster such as the goals above . Progress on these goals can be supported by strengthening communication with neighboring towns who are striving toward the same goal or who are hoping to do so . Therefore, participants will be led through a process to identify opportunities for cross collaboration . 4. Community Benefits As a result of receiving training, Brewster will be better positioned to implement changes in zoning by- laws that support affordable housing development . These changes will ultimately increase the number of affordable units in Brewster's Subsidized Housing Inventory. Furthermore, Brewster will increase its utilization of Community Preservation Act funding for community housing. S 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute The success of the Cape Housing Institute will be measured against the following short -term and long-term outcomes : • 40 local elected and appointed officials will have a solid knowledge of affordable housing development solutions and strategies . • Broad public support will exist for the development of affordable housing units . • Towns will implement changes in zoning by-laws that support affordable housing development . • There will be an increase in the number of affordable units to each town' s Subsidized Housing Inventory. • Towns will utilize Community Preservation Act funding for affordable housing. S . Community Support The CDP has collected preliminary feedback from municipal officials and staff who are participating in the Cape Housing Institute . Participants were asked to state the value of the Cape Housing Institute from the following options : Very valuable, Valuable, Fairly valuable or Not valuable . As of November 29th, 100% of respondents indicate that the sessions are either Very valuable or Valuable . We have also received anecdotal praise for the Cape Housing Institute and how it empowers municipal officials to work toward their affordable housing goals . At the end of the Institute, all participants were asked to complete a final evaluation to provide feedback on how we can strengthen the Cape Housing Institute in year 2 and beyond . The CDP and HAC are currently deliberating over the evaluation results to develop Year 2 programming that directly responds to participant feedback . 6 . Timeline October 2018 — November 2018 Second Cape Housing Institute February 2019 — March 2019 Second Advocate Training July 2018 — June 2019 Public Education Campaign Before the project start date, the CDP will have already evaluated the first year of the Cape Housing Institute and improved the curriculum and session design by incorporating lessons learned . Attendee recruitment will be conducted during the summer of 2018 . Recruitment will include outreach to an extensive email list comprised of all potential participants . 7 . Credentials Chief Program Officer, Ann C. Robinson, will oversee the Cape Housing Institute . Ann graduated from Dartmouth College with an A . B . in government and then earned a law degree from Boston University. Before joining the CDP, Ann was the Executive Director of Bridgeport Neighborhood and Commercial Services, Bridgeport Neighborhood Fund and Bridgeport Neighborhood Trust, and Community Capital Fund, all located in Bridgeport, CT. Ann Robinson will directly supervise the CDP ' s Director of Housing Advocacy, Andrea Aldana , who is responsible for implementing the Cape Housing Institute as well as the broader Cape Community Housing Partnership throughout the eight towns of the Lower Cape including Brewster. Andrea holds a BA in Metropolitan Studies from New York University with a minor in Environmental Science . 6 2017 CPA PROJECT FUNDING REQUEST: Cape Housing Institute Andrea has been with the CDP for over six years and also runs the First Time Homebuyer Education program . 8 . Budget/ Need for Public Funds See attached budget and recent audited financial report . CPA funds would be used for town consultants and salaries and will directly benefit the Town of Brewster. Costs are based on actual costs from the 2017 Cape Housing Institute . One commitment of $ 15 ,000 has been received for funding for the second year of the Cape Community Housing Partnership from the Ferring Foundation . Each of the eight towns of the Lower and Outer Cape is being asked to commit CPA funds to this project . In addition, requests have been made to the United Way, the Cape Cod Foundation and the Kelley Foundation . The CDP will commit funds from its Cape and Island license plate proceeds . 9. Maintenance Not applicable . 10. Site Control Not applicable . 7 2018 Cape Housing Institute Budget The proposed budget for the Cape Housing Institute is $ 175,000, with the following breakdown : Income Year 2 Major Donors — $ 15, 000 committed and $ 10, 000 applied for $ 25,000 Cape & Islands Plate Fund — flexible funds can increase if Major Donor funds decrease $ 35,000 Town Community Preservation Funds : includes $ 15, 000 from Town of Brewster $ 115, 000 Total $ 175,000 Expenses Salaries & Benefits — Project Director @80% & Program Officer @ 10% $ 79,000 Project implementation - training venues, speakers, travel, training materials $ 200000 venues, speakers, travel, training materials Consultants - to provide services for towns $ 60, 091 Overhead ( 10%) $ 15, 909 Total $ 175,000 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION For the Years Ended June 30 , 2015 and .2015 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Table of Contents For the Years Ended June 30, 2016 and 2015 Page INDEPENDENT AUDITOR'S REPORT 1 - 2 FINANCIAL STATEMENTS : Consolidated Statements of Financial Position 3 Consolidated Statements of Activities 4 Consolidated Statements of Functional Expenses 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 - 24 SUPPLEMENTAL INFORMATION : Schedule of Expenditures of Federal Awards 25 - 26 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 27 - 28 INDEPENDENT AUDITORS REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD . HAVE A . DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH UNIFORM GUIDANCE 29 - 30 AUDITOR'S STATEMENT OF FINDINGS AND QUESTIONED COSTS 3142 32 aaa :_ = rf � aaana c� aaaao : i: 000. a6aaa r. , r . c, � aeaaa SANDERS , WALSH & EATON, LLP CERTIFIED PUBLIC ACCOUNTANTS . INDEPENDENT AUDITOR'S REPORT To the Board of Directors Community Development Partnership Report on the Financial Statements We have audited the accompanying consolidated financial statements of Community Development Partnership and Thankful Chase Pathways , LLC, which comprise the consolidated statements of financial position as of June 30, 2016 and 2015 , and the related consolidated statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the financial statements. Management 's Responsibility for the Financia! Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America , this includes the design, Implementation , and maintenance of Internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud orerror, Auditor's Responsibility Our responsibility Is to express an opinion on these consolidated financial statements based on our audits, We conducted our audits in accordance with audited standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, Issued by the Comptroller - - - General of the United States. Those standards require that we plan and perform the audit to obtain reasonable f assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated financial statements . The procedures selected depend on the auditor's Judgment, including the assessment of the risks of material misstatement of the consolidated financial statements , whether due to fraud or error. In making those risk assessments, the auditor considers Internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but notfor the purpose of expressing an opinion on the effectiveness of the entity's Internal control, Accordingly, we express no such opinion : An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion , the consolidated financial statements referred to above present fairly, in all material respects , the consolidated financial position of Community Development Partnership and Thankful Chase Pathways, LLC as of June 30 , 2016 and 2015 , and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. i Other Matters Other Information Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards , as required by Title 2 U.S. Code of Federal Regulations .(CFR) Part 200, Uniform Administrative Requirements, Cost Principles , and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and Is not a required part of the consolidated financial statements, Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The Information has been subjeq�tadcWbeaudi"ArculLogogppjkt*ddn,g)gD4pug4atA.92gonsolidated financial P.Q. Box F • Asterville, MA 02655 * Tel: 508P2890790 . 877A28.1040 • Fax; 508.428.6150 Q 66 00000 6906066066 coo * ** Member • American instmrte ofCenifed PoblkAccountants • Massachusetts Society ofCertiried Public AccountanO Community Development Partnership and Thankful Chase Pathways, LLC Page 2 statements and certain additional procedures, including comparing and reconciling such Information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted In the United States of America, In our opinion , the information is fairly stated , in all material respects , in relation to the consolidated financial statements as a whole, Other Reporting Required by Govemment Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated November 30, 2018 , on our consideration of Community Development Partnership and Thankful Chase Pathways , LLC"s Internal control over financial reporting and on our tests of its compliance with certain provisions of laws , regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing , and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Community Development Partnership and Thankful Chase Pathways , LLC's internal control over financial reporting and compliance . , v�I"« � �►�, ice' Osterviile , Massachusetts November 30 , 2016 2 1 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , .LLC Consolidated Statements of Financial Position June 30, 2016 and 2015 ASSETS 2016 2015 Current Assets : Cash Accounts $ 11165 , 564 $ 818 , 270 Restricted Capital Reserve Cash Accounts 413, 090 458 , 674 Escrow Accounts 116 ,606 231 ,490 Accounts Receivables 357 , 078 473 , 550 Rent Receivables 10, 359 33 , 939 Prepaid expenses 55,233 57 , 306 Security deposits 38 , 999 37 , 987 Loans receivable, current portion 138 ,471 85 , 502 Total Current Assets : 21285 ,400 21196 , 718 Fixed Assets . Land 10129 , 203 10129, 203 Buildings and equipment 91931 , 801 9 , 81311. 11 Total Fixed Assets 11 , 061 , 004 10 ;9421314 Accumulated depreciation (31036 , 010) (21707 , 552) Net Fixed Assets 8 , 0241994 80234 , 762 . Other Assets: Inventory: Fishing permits 6001000 600 ; 000 Loans receivable, long term (net of allowances for loan losses of $31 ,623 and $40 , 860 respectively) 272, 919 209 , 040 Total Other Assets 872, 919 809 , 040 Total Assets $ 111183 , 313 $ 11 , 240 , 520 LIABILITIES AND NET ASSETS Current Liabilities: Accounts payable $ 106 , 719 $ 217, 173 Accrued expenses 110, 335 83 , 174 Advance on grant contracts 440, 253 543 ,261 Deposits payable 39 , 626 35, 920 Mortgage and Note payable , current portion 58 , 300 54 , 000 Total Current Liabilities 755 ,233 933 , 528 Long-Term Liabilities: Mortgage Payable Private and Government 2 ,4621066 2 ,492 , 075 Note Payable - Scallop Quota Loan 441 , 318 477 , 210 Government Mortgages : - Deferred Financing 513891011 51389 , 011 Total Long-Term Liabilities 81292 , 395 8 , 358 , 296 Total Liabilities 91047, 628 9, 2911824 Net Assets : Unrestricted 21135 , 685 109480696 Total Net Assets 21135, 685 1 ,948, 696 Total Liabilities and Net Assets $ 111183 , 313 $ 11 , 240, 520 The accompanying notes are an integral part of these financial statements 3 3 F COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC ; Consolidated Statements of Activities For the Years Ended June .30 , 2016 and 2015 2016 2015 _Changes in unrestricted net assets Grant income $ 1 ; 950,747 $ 1 ,2101766 Program incomo 846,842 769 , 509 Contributions 495 ,630 392, 514 Special events 221674 18, 849 Interest income 31551 31920 . Other income 59,296 16,853 Total Revenues and Support 3 , 378, 740 . 2,4110411 Expenses , Program 3 , 056 , 881 11990,469 General and administrative 381390 41 , 285 Fundraising 96,479 76 , 511 Total Expenses 3191 , 751 21108 ,265 Increase in Net Assets 186, 989 303, 146 . Net Assets , Beginning of Year 1 , 948, 696 11646 , 550 Net Assets, End of Year $ 2 , 136,685 $ 1 , 948,696 The accompanying notes are an integral part of these financial statements 4 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Consolidated Statements of Functional Expenses For the Year Ended June 30 , 2016 and 2015 2016 General and Program .Administrative Fund-Raising Total Salaries, benefits, and payroll taxes $ 694 , 918 $ 1494295 $ 4908 $ 894 ; 111 Advertising 18 , 677 23 , 660 1 ,1. , 504 53 ;841 Depreciation and amortization 329 , 519 51678 278 335 ,475 Dues and memberships 4 , 525 1 , 106 397 61026 Insurance 63 ,497 41324 726 68 , 547. Interest 185, 251 1 , 048 111 186 ,410 Licenses, permits and fees 5 , 772 839 21193 81804 Maintenance and repairs 186 , 887 10 , 916 1 , 737 199 , 540 Office supplies and equipment 23 , 362 61902 6, 967 37 ,231 Professional fees 69 , 502 161465 7,620 93 , 587 Real estate tax 15 , 551 210 1 15 , 762 Rent (Office expense) 15, 006 3,015 497 18 , 518 .Special program 11174, 085 720 1 ; 174 , 805 Training 61580 21040 154 81774 Travel 91510 806 577 10. , 893 Utilities 76, 581 31499 346 79 ,426 Subtotal 21878,223 2294802 83 , 726 31191 , 751 Allocation of G&A costs 178 ,658 ( 191 ,412 ) 12,754 - Total $ 31056 , 881 $ 38 , 390 $ 96, 479 $ 31191 , 751 . 2015 General and Program Administrative Fund4Raising Total Salaries, benefits, and payroll taxes $ 525 , 055 $ 132 ,630 $ 32 , 541 $ 6900226 Advertising 17 , 154 21 , 982. 11638 40, 774 Depreciation and amortization 314 ,902 4 $ 07 151 3191560 Dues and memberships 3 , 872 1 ,078 . 253 51203 Insurance 610171 41405 471 66 , 047 Interest 172, 277 141 8 172 ,426 Licenses , permits and fees 61447 708 996 80151 Maintenance and repairs 100 , 667 41254 422 105 , 343 Office supplies and equipment 49 , 213 38 , 950 70672 951835 Professional fees 86 , 518 9 , 013 18 ; 605 114 , 136 Real estate tax 14, 355 - - 14 , 355 Rent (Office expense) 19 , 285 018 21087 25 , 690 Special program 363, 225 - - 363 , 225 Training 1 , 856 2 ,678 253 41787 Travel 6 , 377 11039 177 7, 593 Utilities 71 , 555 3 , 104 255 74 , 914 Subtotal 11813; 929 228 , 807 651529 21108 , 265 Allocation of G &A costs 176, 540 (187 , 522 ) 10, 982 6 Total $ 11990 ,469 $ 41 , 285 $ 76 , 511 $ 2 , 1081265 Tile accompanying notes are an integral part of these financial statements 5 1 f f COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Consolidated Statements of Cash Flows For the Years Ended June 30, 2016 and 2015 2016 2015 Cash Flows from Operating Activities: Increase/( Decrease) in net assets $ 186 , 989 $ 303 , 146 Adjustments to reconcile changes in net assets provided by operating activities: Depreciation 328;458 316 , 697 ( Increase) decrease in : Accounts receivable 116 ,472 (374 , 585) Rents receivable 23, 584 ( 141416) Loan receivables ( 116 , 848) (31 ,221 ) Escrow accounts 114, 884 (33, 315) Security deposits ( 11012 ) (31020) Prepaid expenses 21073 ( 13 , 379) Increase (decrease) in: Accounts payable (110 ,455) 152 ; 146 Deposits payable 3, 706 313 Accrued expenses 27, 161 12 ,757 Advance on grant contracts ( 103, 008) 283 , 261 Net Cash Provided by Operating Activities 472 , 000 598 , 384 Cash Flows from Investing Activities: Net deposits to reserves 45, 584 (27, 488 ) Purchase of property and equipment. ( 118 ,690) (368 , 770) Net Cash Used in Investing Activities (73 , 106) ( 396 , 258) Cash Flows from Financing Activitles: Proceeds from loans 74 ,280 Repayments of mortgage payable ( 135, 880) (95 , 696) Net Cash Used in Financing Activities (61 , 600) (95 , 896) Net increase in Cash 4337, 294 106 , 230 Cash , Beginning of Year 8181270 712 , 040 Cash , End of Year $ 11155, 564 $ 818 , 270 Supplemental Cash Flow Information Interest costs incurred $ 186 ,410 $ 172 ,426 Interest subsidy credited (45 , 762) (45 ,762 ) Interest Costs Paid $ 140 , 648 $ 126 ,664 Noncash Financing and Investing Activities; Government interest subsidies credited towards debt service requirements $ 45 , 762 $ 45 , 762 Noncash Financing and Investing Activities: $ 45, 762 $ 45 , 762 { The accompanying notes are an integral part of these financial statements 6 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , Oraanization ' The Community Development Partnership d/b/a Community Development Partnership (CDP) was organized July 1 , 1992 , as a nonprofit corporation under the Massachusetts General Laws Chapter 180 and was formed to promote and assist commun (ty-based development organizations and Individuals in their efforts to address the needs of low, and moderate income residents in the Lower Cape Cod Area. Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Accounting Standards Codification (ASC) No. 958-320, Accounting for Certain Investments Held by Not-for- Profit Organizations . As a result the financial activity for Thankful Chase Pathway, LLC (TCP) a for"profit company owned 100% by CDP have been consolidated with the financial activity of CDP for the years ended June 30, 2016 and 2015 . TCP was formed for the purpose of Investment and holding of a leasehold interest in , and development of, real estate and interests therein , including, but not limited to , the leasing , acquiring , operating , selling , financing , refinancing , disposing of and otherwise dealing with interests in real estate , directly or indirectly through joint ventures , partnerships or other entities, specifically those associated with the property known as 35 Main Street Extension , Harwich , Massachusetts, to be known as Thankful Chase Pathway, with the specific intention of holding the property as affordable housing , and to engage in any activities directly or indirectly related or incidental thereto . Basis of Accountina The accompanying financial statements have been prepared on the accrual basis of accounting . The significant accounting policies are described below to enhance the usefulness of the financial statements to the reader, Basis of Presentation The consolidated financial statements include the accounts CDP and . TCP (for-profit company) ; its 100% wholly owned subsidiary, All significant intercompany balances and transactions were eliminated in consolidation . The organization have common control and an element of economic interest. in accordance with the American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 94-3 , consolidation Is required . Financial statement presentation follows the professional recommendations. Under professional recommendations , the .Corporation reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets , temporarily restricted net assets, and permanently restricted netassets. Net assets of the two restricted classes are created only by donor imposed restrictions on their use . All other . net assets are legally unrestricted and are reported as part of the unrestricted class. There were no temporarily or permanently restricted net assets or activities as of June 30 , 2016 and 2015. 7 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30 , 2016 and 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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, Functional Allocation of Expenses The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities . Accordingly, certain administrative and general costs have been allocated among the program and supporting services benefited . Tax Exempt Status The CDP is a not-for-profit organization exempt from taxes under Internal Revenue Code .501 (c)(3) and Is defined as a social welfare organization . Cash and Cash Eauivalents For the purposes of the statements of cash flows , the CDP considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Property and Equipment . Donated capital assets and property and equipment are recorded at cost. Expenditures for maintenance and repairs'. are charged against operations . Donations of property and equipment are recorded at their estimated fair market value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Property and equipment are . depreciated using the straight-line method over their estimated useful lives of three to ten years for equipment and five to thirty years for buildings and V mprovements. In Kind Revenue and Expenses CDP receives support in the form of donated goods and services . These goods and services are recorded at their fair market values at the time received and are reflected in the financial statements as both support and F .expense. Total in-kind contributions amounted to $45 , 572 and $74 , 047 for the year ended June 30, 2016 and 2015 , respectively. Allowance for Bad Debts Accounts and loan receivables are stated at unpaid balances, less an allowance for doubtful accounts , The CDP provides for losses on accounts and loan receivable using the allowance method . The allowance is based on experience and other circumstances. It is CDP's policy to charge off uncollectible accounts receivable when management determines the receivable will not be collected . 8 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) . Advertising CDP follows the policy of charging the costs of advertising to expense as incurred. Advertising expense for the .years ended June .30, 2016 and 2015 were $53 , 841 and $40, 774, respectively. Combensated Absences . Compensated absences have been accrued in the amount of $48 , 903 and $43 ,291 as of June 30, 2016 and 2015, respectively , NOTE B - CASH AND CASH EQUIVALENTS , Cash and cash equivalents at June 30 consist of the following ; 2016 2015 General operating fund $ 641 , 846 $ ;359 , 257 Money market funds 513 , 718 4590013 Total cash and cash equivalents $ 10155 , 564 $ 818 ,270 Included in total cash and cash , equivalents Is restricted cash for the Micro loan program at June 30 consists of the following. 2016 2015 Money market funds $ 1051665 $ 121 , 865 NOTE C RESTRICTED DEPOSITS AND FUNDED RESERVES : Replacement Reserve and Solar Reserve In accordance with the terms of the MHP's regulatory agreement TCP funds and maintains a replacement reserve fund . The replacement reserve balance was $ 33 , 164 and $21 , 981 as of June 30, 2016 and 2015 respectively, The Solar reserve balance was $22, 140 and $22 , 076. as of June 30 2016 and 2015 respectively. ODeratina Reserve In accordance with the terms of the MHP`s regulatory agreement, TCP will maintain a revenue fund account for its operations , starting March 31 , 2011 , held by MHP . The revenue fund amount at June 30 , 2016 and 2015 was $ 14, 048 and $ 14 , 005, respectively. Rental Property Reserve Accounts CDP maintains funded reserves for various rental properties for future capital improvements . The reserves account balances were $343 , 738 and $400,612 as of June 30 , 2016 and 2015 respectively. 9 t t I COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE C - RESTRICTED DEPOSITS AND FUNDED RESERVES (continued) , Escrow Reserve Accounts Escrow reserve accounts were comprised of the following as of June 30 , 2016 and 201. 5 : 2016 2015 Mass Ground Fish Loan Fund $ 67 , 559 $ 1201256 Real estate escrow reserves - 743 MHP Escrow Reserve-TCP 9 , 027 41520 CDBG - Housing Rehabilitation Fund 40 , 020 105, 971 $ 116 , 606 $ 231 ,490 NOTE D - INVENTORIES :. Inventories consist of three ( 3) fishing permits purchased for resale/lease . They are stated at the lower of cost or market. The inventory balance was $600 , 000 and $600; 000+ as of June 30 , 2016 and 2015 , respectively. NOTE E - LINE OF CREDIT , .CDP has entered into credit agreements with banks that allow the Corporation to borrow an amount not to exceed $75, 000 . The credit line bears interest at prime plus 1 % . The loan is not secured by the assets of the Corporation . The outstanding balance as of June 30 , 2016 and 2015 was $0 and $ 0, respectively. CDP has entered into a seven (7) year credit agreement with Massachusetts Growth Capital Corporation (MGCC) , a Massachusetts .quasi-public lending agency, that allows CDP to borrow an amount not to exceed $250,000 for the purpose of providing capital to fund microloans to qualified businesses . The credit line bears interest only of 3 .25% for three (3) years . Outstanding principal balance at the end of the three (3) year period Is amortized over a four (4) year period with a maturity date of January 29 , 2021 . The outstanding balance as of June 30 , 2016 and 2015 was $0 and $0, respectively. ? NOTE F - RENTAL REHABILITATION AND HOUSING REHABILITATION LOAN PROGRAM : The CDP has received pass-through grants from the Towns of Welifieet, Truro, Eastham and Dennis to administer rehabilitation loans to eligible property owners or investors under the United States Department of Housing and Urban Development Small Cities Program . Loans are now capped at $35 ,000 per unit, and for loans 'issued through fiscal year 1999 , repayment of the outstanding balance is forgiven at the rate of 10% per year provided that . the borrower is in compliance with loan provisions . Loans issued between fiscal year 2000 and . 2001 are deferred for ten years with no annual loan forgiveness while loans after fiscal year 2002 are deferred for fifteen years with no annual loan forgiveness. The loans secured through a ten or fifteen year property lien . 10 COMMUNITY DEVELOPMENT PARTNERSHIP ; AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE F - RENTAL REHABILITATION AND HOUSING REHABILITATION LOAN PROGRAM (continued) . The CDP does not expect to collect on a substantial portion of these loans and any loans collected because of default of grant terms and conditions would be remitted to the grant awarding authorities and do not represent available resources to the CDP. Therefore, the issuance of these loans is considered anon-exchange transaction and is recorded as . a grant/program expense in the financial statements and no receivable is recorded . Grant revenue andexpense was $ 1 , 158 , 320 and $317, 933 for the years ended June 30 ; 2016 and 2016 respectively. NOTE G - LOANS RECEIVABLE; The CDP microioan fund was funded originally With a pass-through grant from the Town of Chatham to administer a small business revolving loan program under the United States Department of Housing and Urban Development Small Cities 'program, These micro-loans of up to $40 , 000 are issued to eligible Individuals to , start up or expand small, private businesses in the Lower Cape Cod area . Principal and interest is repayable, monthly at interest rates of prime plus 2%; and the loan maturities do not exceed a five year term. An allowance for doubtful accounts is estimated each year based on specific identification of at risk loans. Uncollectible loans are charged off when the business declares bankruptcy. The CDP Ground Fish Revolving loan fund was funded by a $250, 000 federal pass through grant from the Massachusetts Department of Marine . Fisheries , The Ground fish revolving loans of up to $50 , 000 are issued to eligible individuals to encourage the continued profitability of small-scale ground fish fishing businesses' with leasing `ground fish quota. The CDP Shellfish Microioan .fund was capitalized by a $60, 000 contribution from Weilfleet SPAT. Loans are made to eligible applicants that are Wellfleet based shellfish and aquaculture businesses . In addition to the microioan , ground fish revolving loan and shellfish microloan funds , CDP has also issued short-term business loans , using its own funds to fund various small businesses such as scallop leases to buy quota licenses . Loans receivables are carried at unpaid principal balances , less an allowance for loan losses and net deferred loan fees . Management's periodic evaluation of the adequacy of the allowance is based on past loan loss experience , specific impaired loans, adverse situations that may affect the borrower's abilltyto repay and current economic conditions . Loan receivables were comprised of the following at June 30 , 2016 and 2016 , 2016 2015 Microloans $ 244 , 157 $ 203 , 015 Ground fish loans 184, 640 129 ,445 Shellfish microloans 12 , 709 - Scallop lease to buy loans 11507 21942 443, 013 335, 402 Less allowance for uncollected accounts (31 ,623) (40 , 860) Net Loan Receivable 411 03v 4i 2941o4z 11 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements :For the Years Ended June .30, 2016 and 2015 NOTE H - GRANT INCOME : CDP receives a substantial amount of its support from the United States Department of Housing and Urban Development on a pass-through basis under cost reimbursement , contracts , which are based on approved budgets . Additional funding is received directly from the United States Department of Agriculture as rent ; subsidies and through fees charged by the Registry of Motor Vehicles associated with the issuance of Cape and Islands license plates , net of related direct costs . Under Massachusetts General Law Chapter 90, Section 2 , the CDP receives 20 % of the net fees of these license plates in amounts proportional to the . number of vehicles registered in Barnstable County in order to promote tourism or economic development. Support received under cost reimbursement contracts and grants is recorded as grant revenue and grant receivable in unrestricted net assets when the related costs are incurred or billed . Cost reimbursement+ grant revenue in excess of costs incurred are recorded as a liability "advance on grant contracts" , until costs are incurred and the revenue earned . Support received under rent subsidies and the Cape and Islands license plate program are recorded as grant revenue and grant receivables when the underlying transaction generating . these grant amounts occur. Cape and Islands license plate revenue is allocated for the use among CDP programs by the Board of Directors . A summary of CDP's significant grant programs for the years ended June 30 2016 ad +2016 are as follows: 2016 2015 U . S . Department of Housing and Urban Development $ 11413 ,477 $ 444 , 810 U . S . Department of Agriculture 229,436 196 , 504 Mass Growth and Capital Corp. 83 , 125 96, 305 Towns and Barnstable County - 290, 854 Com EOHED 300000 - Cape and Islands Plates 194 , 709 182 , 293 $ 11950 , 747 $ 11210 ,766 NOTE 1 - MORTGAGES AND NOTES PAYABLE : 2016 2015 Mortgages payable : Note payable to US Department of Agriculture ( USDA) , 6 . 75% interest and principal payment of $2 , 183 payable monthly, final payment due September, 2032 , collateralized by property located at 324 Old Kings . Highway, Welifleet, MA. $ 973 , 116 $ 978 , 643 Note payable to Cape Cod Five Cent Savings Bank, 5 . 03% interest and principal payment of $ 1 , 616 payable monthly, final payment due October, 2025 , collateralized by property located at 836 Main Street, Harwich , MA. 138 , 854 150, 944 12 COMMUNITY' DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30 , 2016 and 2015 NOTE 1 - MORTGAGES AND NOTES PAYABLE (continued ) . 2016 2015 Note payable to the Cape Cod Five Cents . Savings Bank, 9 . 00%0 Interest and principal payment of $961 payable monthly , final payment due August, 2020, collateralized by property Located at Gull Cottages , Eastham . 95 ,759 98 , 369 Note payable to Seamen's Bank, 5 .0% interest and principal payment of $724 payable monthly, final payment due August, 2037 , collateralized by property located at 27 Nelson Ave . , Provincetown ; MA. 112, 393 115 , 290 Note payable to TD Bank , 4 .22% interest and principal payment of $2 , 401 payable monthly, final payment due May, . 2027 , collateralized by property located at 17 & 19 Robert Lane and 836 Route 28, Harwich , MA; 249 , 396 267 , 098 Note payable to Cape Cod Five Cents Savings Bank, 7,30% interest and principal payment of $515 payable monthly , final payment due December, 2Q25 , collateralized by property located at Unit 7 Main Street Mercantile, Eastham , MA . 46 , 068 50 ,677 Note payable to TD Bank, 4. 0% interest and principal payment of $500 payable monthly, final payment due March , 2033 , collateralized by property located. at 1475 State Highway, Eastham , MA. 88, 738 92 ,3 .58 Note payable to Cape Cod Five Cents Savings Bank, 4 . 20% interest and principal payment of $328 payable monthly, final payment due July, 2033, collateralized by property located at Gull Cottages , Eastham , MA. 47 , 694 49 ; 550 Note payable to Santander Bank (formerly the Sovereign Bank) , 7.42% interest and principal payment of .$374 payable monthly, final payment due April, 2018 , collateralized by property located at 71 . Canal Rd . , Orleans, MA . - $7, 946 Note payable to Town of Eastham , 5 . 00 % Interest and principal payment of $2 , 315 payable semi-annually, final payment due November, 2019, collateralized by property located at Gull Cottages , Eastham . 61615 81268 f 13 COMMUNITY DEVELOPMENT PARTNERSHIP ARID THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30 , 2016 and 2015 NOTE I- MORTGAGES AND NOTES PAYABLE (continued) : 2016 2015 Note payable to the Massachusetts Housing Partnership (MHP) , 6 . 58 interest and principal payment .of $4 , 653 payable monthly, final payment due August 25 , 2031 , collateralized by property located at Thankful Chase Pathway, 686 , 662 696 , 942 Note payable to Seaman's Bank, 4. 0% interest and principal payment of $219 payable monthly, final payment due August 13 , . 2020, collateralized by property located at 3 Main Street Mercantile, Unit 18A. 34 , 947 - Note payable to Seaman 's Bank, 4 : 0% interest and principal payment of $244 payable monthly, final , payment due January 7 , 2021 , collateralized by property located at 3 MainStreet Mercantile, Unit 6 . 39 , 333 - Total Mortgages Payable 24520 , 365 21546, 075 Note Payable : Note payable to Cape Cod Commercial Hook Fishermen's Association , Inc. . 3 . 0% interest and principal payment of $4 , 143 payable monthly, final payment due October, 2026 , collateralized by 1hree(3) Northeast f=ederal Fishery Permits . 441 , 318 477,210 Total Note Payable 441 , 318 477, 210 Total Mortgages and Note Payable 2 , 9611683 31023 , 285 Current portion 58 , 300 54 , 000 Long term portion $ 21903, 383 $ 21969 , 285 The following is a maturity schedule for the above mentioned mortgages and note payables: June 30 2017 58, 300 2018 .63, 000 2019 681000 2020 73 , 000 2021 781500 Thereafter 2 ,6201883 $ 21961_ 1683 The CDP incurred interest costs totaling $ 186 ,410 and $ 172 ,426 for the years ended June 30 , 2016 and 2015, respectively, all of which were charged to operations . t 14 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC. Notes to Consolidated Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE J '- GOVERNMENT MORTGAGES - DEFERRED 2016 2015 CDP - Deferred Financing provided by HUD Note payable to the Dept. of Housing and Community Development ( DHCD) thru the Cape Cod Commission under the HOME ! Investments Partnership Program , 0. 00% interest and balloon payment of $ 170 , 000 due March , 2037 , collateralized by property located at 71 Canal Rd . , Orleans , MA . $ 170 , 000 $ 170 , 000 Note payable to the Barnstable County thru the Cape Cod Commission under the HOME Investment Partnership Program , 0. 00% interest and balloon payment of $ 120, 000 due March , 2037, ' collateralized by property located at 71 Canal Rd „ Orleans , MA , 120 , 000 120 ,000 Note payable to ' Barnstable County thru the Cape Cod Commission . under the HOME Investments Partnership Program ; 0 . 00% interest and balloon payment of $ 166 , 000 due August, 2040, collateralized by property located at Gull Cottages , Eastham , 1667000 166 , 000 Note payable to Barnstable County thru the Cape Cod Commission under the HOME Investment Partnership Program , 0 . 00 % interest and balloon payment of $60 , 000 due June , 2041 , collateralized. by property located at 27 .Nelson Ave. , Provincetown , MA . 60 , 000 601000 E . Note payable to DHCD under the HOME Investments Partnership ` : Program , 0. 00 % interest and balloon payment of $ 550 ; 000 due: Aprli , . . 2032 , collateralized by property located at 324 Old Kings Highway , Welifleet, MA , 550 , 000 550 , 000 E Note payable to Barnstable County thru the Cape Cod Commission. under the HOME Investments Partnership Program , 0 . 00% interest and balloon payment of $175 , 000 due April , 2042, collateralized by property located at 324 Old Kings Highway, Welifleet, MA. 175, 000 175 , 000 Note payable to Barnstable County thru the Cape Cod Commission under the HOME Investments Partnership Program, 0. 00% Interest and balloon payment of $ 160, 000 due July, 2044 , collateralized by property located at 58 Harry Kemp Way, Provincetown ; MA. 1601000 160 , 000 15 i i COMMI,INITY DEVELOPMENT PARTNERSHIP ANIS THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30, _2016 and 2015 E NOTE J - GOVERNMENT MORTGAGES - DEFERRED FINANCING (continued) 2016 2015 Note payable to the Barnstable County thru the , Cape Cod Commission under the HOME ' Investments Partnership Program , 0. 00% interest and balloon payment of $ 117,714 due October, 2055, collateralized by property located at 836 Main Street, Harwich, MA, 117 ,714 117,714 Note payable to the Barnstable County thru the Cape Cod Commission under the HOME Investments Partnership Program , 0. 00% interest and balloon payment of $37, 286 due October, 2055, collateralized by property located at 836 Main Street, Harwich, MA, 37 ,286 37 ,286 Note payable to DCHD thru the Town of Provincetown under the . Housing Development Support Program CDBG , 0 .00% interest and balloon payment of $ 176 , 373 due August, 2041 , collateralized by property located at 27 Nelson Ave. , Provincetown ,. .MA . 176 , 373 116 , 373 Note payable to DCHD ihru the Town of Harwich under the Housing Development Support Program CDBG , 0. 00 % Interest and balloon . payment of $493, 000 due November, 2052, collateralized by property located at 17 & 19 Robert Lane, Harwich , MA . 4931000 493,000 Note payable to DCHD thru the Town of Eastham under the Housing Development Support Program CbBG , 0.00% Interest and balloon payment of $248,400 due April, 2052, collateralized by property located at 1475 State Highway; Eastham , MA . 248 ,400 248 ,400 Note payable to the Massachusetts Housing Fund Board under the HOME Investment Partnership program , 0. 00% interest and balloon .payment of $400 , 040 due October, 2055 , collateralized by property located at 836 Main Street, Harwich, MA, 400, 000 400,000 Default Conditional Note payable to The Resource , Inc. thru Housing . Rehab Loan Program, 0. 00% interest and payment In the amount of $40 , 163 due June, 2020, collateralized by property located at 836 Main Street, Harwich , MA. (Forgiven at due date if loan conditions met. } 40, 163 40 , 163 Total CDP Deferred Financing provided by HUD 21913 , 936 21913 , 936 16 i F COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30 , 2016 and 201. 5 NOTE J - GOVERNMENT MORTGAGES - DEFERRED FINANCING (continued ) , 2016 2015 TCP - Deferred Financing provided by HUD Note payable to the Barnstable County thru the Cape Cod • Commission under the HOME Investments Partnership Program , 0. 00% Interest and balloon payment of $ 550 , 500 due March , 2041 , • collateralized by property located at Thankful Chase Pathway, 550 , 000 5500000 Note payable to the Barnstable County thru the Cape Cod . Commission under the HOME Investments Partnership Program , 0 . 00 % interest and balloon payment of $ 1. 50 , 000 due February 26, 2060 , collateralized by property located at Thankful Chase . Pathway, 150 , 000 150 , 000 Total TCP Deferred Financing provided by HUD 700 , 000 .700 , 000 Total Deferred Financing provided by HUD 31613 ,936 3 , 6131936 CDP Other governmental agencies deferred loans , Note payable ' to Massachusetts DHCD under the Housing Stabilization Program , 0. 00 % interest and balloon payment of $ 159, 750 due July, 2044,, collateralized by property located at 68 HarryKemp Way, Provincetown , MA, 159 , 760 150, 750 Note payable to the Massachusetts DHCD under the Affordable Housing Trust, 0,00% interest and balloon payment . of $265 , 325 due October, 2035 , collateralized by property , located at 836 Main Street; Harwich , MA. 265 , 325 265 , 325 CDP Other governmental agencies deferred loans , 425 , 075 425 , 075 Total GDP deferred governmental Financing 4 , 039, 011 41039 , 011 TCP - Other governmental agencies deferred loans : Thankful Chase Pathways, LLC secured financing from a Massachusetts Corporation , Community Economic Development Assistance Corporation (CEDAC) , for a maximum amount of $ 350 , 000 due March 31 , 2041 . In the requirements of the Housing Innovations Funds are met, CEDAC may extend the maturity date for another ten ( 10) years period until March 31 , 2051 . Principal and interest payments are not required before the maturity dates unless the cash flow generated by the project exceeds 105% of the capital expenditures of the project. This loan is collateralized by property located at Thankful Chase Pathway, 350 , 000 350 , 000 17 i 'MMMUNITY DEVELOPMENT PARTNERSHIP I I AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years . Ended June 30, 2016 and 2015 NOTE J - GOVERNMENT MORTGAGES - DEFERRED FINANCING ( continued ) . 2016 2015 Note payable to the Massachusetts Housing Partnership (MHP) at 0% Interest, final payment due March 31 , 2031 , collateralized by . property located at Thankful Chase Pathway. 400 , 000 400 ,000 Note payable to the Affordable Housing Trust, 0, 00 % Interest and balloon payment of $600, 000 due March , 2041 , collateralized by property located at Thankful Chase Pathway. 600 , 000 600 , 000 Total TCP - Other governmental agencies deferred loans . 11350, 000 1 , 350 ,000 Total Government Mortgages - Deferred Financing . $ 51389 , 011 $ 51389 , 011 The following is a maturity schedule for the above-mentioned government mortgage payables: , June 30 2011 $ - 2018 - 2019 - 2020 - 2021 - Thereafter 5,389 ,011 $ 5,389 ,01 ,1 The CDP incurred interest costs on the deferred governmental mortgages totaling $0. and .$ 0 for the Years ended June 30 , 2016 and 2015, respectively. The property located at 324 Old King's Highway in Wellfleet, Massachusetts consists of buildings , improvements and program equipment. The land is owned by the Wellfleet Housing Authority and leased to CDSthrough November, 2061 at no cost. NOTE K. - RELATED PARTY TRANSACTIONS : Board members also include employees of Cape Cod Five Cents Savings Bank and Seamen's Bank, which hold mortgage loans on property owned by CDP . These Board members do not have positions which affect the lending of funds. to CDP. 18 t COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years .nded June 30, 2016 and 2015 s NOTE L - ECONOMIC DEPENDENCY: The CDP receives substantially all of its funding from federal, state , and county agencies. A loss in a funding source would have an adverse material effect on the Corporation . A summary of the significant funding categories and the governmental agencies follows; 2016 2015 United States Department of Agriculture - Direct Loans $ 973 , 116 $ 978 , 643 United States Department of Agriculture - Mortgage Interest Subsidy 45 , 762 45 ,762 United States Department of Agriculture - Rental Assistance '105 , 363 , 105 , 743 United States Department of Agriculture - Rural Enterprise Grant 781311 50 , 1)00 United States Department of HUD-HOME Direct Loans Permanent 21656 , 000 21656 , 000 United States Department of MUD-CDBG Direct Loans Permanent 957 , 936 9571936 United States Department of HUD-CDBG Housing Rehab Grants 1 ,413 , 477 4440 $ 10 United States Department of HUD-Section 8 Rental Assistance 175,634 157 ,609 United States Department of NOAA-NMFS Revolving Loan Fund 30 , 869 96 , 501 Massachusetts DHCD-Housing Stabilization Direct Loan Permanent 159 ;750 159 ,750 Massachusetts DHCD-Affordable Housing Trust Direct Loan Perm . 865 , 325 865 , 325 Massachusetts CEDAC-Affordable Housing Deferred Direct Loan 350, 000 350, 000 Massachusetts MHP-Affordable Housing Deferred Direct Loan 400, 000 400 , 000 $ 80211 , 643 $ 7, 268 , 079 NOTE M - LEASES : CDP leased two office spaces; Unit 18A as a tenant at will and Unit 6 for $250 under non-cancelable operating leases, which expired October 31 ; 2015. For the years ended June 30 , 2016 and 2015 total rent expense amounted to $4 , 879 and $ 12 , 774 , respectively. CDP purchased unit 6 In January 2016 and unit 18A in August :2015 . NOTE N - SIGNIFICANT" CONCENTRATIONS OF CREDIT RISK. Concentrations of credit risk with respect to trade receivables and note receivables are limited du6p to the large number of 'customers comprising the CDP's customer base and their dispersion across differing industries and geographic areas . The CDP maintains its cash balances in various financial institutions that are Insured by the Federal Deposit Insurance Corporation ( FDIC ) up to $250 , 000 for each institution . The CDP's uninsured cash balances totaled $0 and $0 at June 30 , 2016 and 2015, respectively. NOTE 0 - CONTINGENT LIABILITIES , The CDP receives a substantialportion of Its revenues from various government contracts ; all of which , are subject to audit by the . applicable government agency; Should an audit be conducted and result in any disallowed costs , the CDP would be liable for such disallowed amounts. In management's opinion , liability, if any, resulting from such an audit would not have a material adverse effect on the CDP's financial position, Additionally, other contracts entered into with the agency contain compliance provisions which require the CDP to .adhere to specified operating methods and procedures . In the event of noncompliance ; the Agency has the discretion to demand Immediate repayment of the note payable described in Note I . 19 f ! `nm !Vli INITV [IFVF !_ rIPMFNT PARTNERSHIP i AND THANKFUL CHASE PATHWAYS , LLC Notes to Consolidated Financial Statements For the Years Ended June 30, 2016 and 2015, E E NOTE P - PENSION PLAN : CDP established a SIMPLE IRA Plan as an employeebenefit program as defined under Section 401 ( k) of the U . S . Internal Revenue Code . Eligible employees are able to elect employee deferred amounts in accordance with IRS guidelines . CDP matches employee elective deferrals up to a match of 3% of eligible employee compensation . Pension expense was $ 13 ,435 and $ 10, 317 for the years ended June 30, 2.016 and 2015, respectively. 3 20 I COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Financial Statements . For the Years Ended June 30 , 2016 and 2015 NOTE Q - CONSOLIDATING SCHEDULE OF FINANCIAL POSITION AND ACTIVITIES : June 30, 2016 CDP TCP TOTAL Current Assets: Cash Accounts $ 11074, 363 $ 81 , 201 $ 1 ; 1551564 Restricted Capital Reserve Cash Accounts 3430740 69 , 350 413 , 090 Escrow Accounts 1070579 .91027 7116, 606 Accounts Receivables 357, 078 - 357; 078 Rent Receivables 80266 21093 10 , 359 Prepaid expenses 49, 602 5 , 631 55, 233 Security deposits 3Q , 044 8 , 955 38, 999 Loans receivable , current, portion - - - Total Current Assets 11970, 672 176, 257 2 , 146, 929 Fixed Assets ; . Land 1 , 1291203 - 1 , 129, 203 Buildings and equipment 61287 , 115 31644 ,685 91931 , 800 Total Fixed Assets 71416 , 318 31644585 11 , 061 , 003 Accumulated depreciation (21398 , 189) (637, 820) (31036 , 009) Net Fixed Assets 5 , 018 , 129 3 , 006 , 865 81024, 994 Other Assets : Inventory: Fishing permits 600 , 000 - 6000000 Loans receivable, long term (net of loan: losses of $24 , 831 and $40 , 860 respectively) 411 ;390 - 4110390 Total Other Assets 11011 , 390 - 11011 , 390 Total Assets $ 8 , 000 , 191 $ 31183 , 122 $ 11 , 183, 313 Current Liabilities: Accounts payable $ 95 , 767 $ 10 ,952 $ 106 , 719 Accrued expenses 110 , 335 - 1101335 Advance on grant contracts 440 ,253 - 440 , 253 Deposits payable 30 ,677 8 , 949 39 ,626 Mortgage payable, current portion 58 , 300 - 58 , 300 Total Current Liabilities 735 , 332 19 , 901 755 ,233 21 1 f rnllAnf1111►11TV E) =% I= l nDOAFRIT DA0TK11= PgjIID AND THANKFUL CHASE PATHWAYS , LLC Notes to Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE Q -' CONSOLIDATING SCHEDULE OF FINANCIAL POSITION AND ACTIVITIES (continued): For the Year Ended June 30 , 2016 CDP TCP TOTAL Long-Term Liabilities: Mortgage Payable - Private and 11775,404 .6861662 21462, 066 Note Payable - Scallop Quota 441 ,318 - 441 , 3.18 Government Mortgages - ` 3 , 339, 011 21050 , 000 51389 , 011 Total Long-Term Liabilities 51555, 733 2 , 7361662 - 81292 ,395 Total Liabilities 6 , 291 , 065 21756 , 563 9, 047 ,628 Net Assets: Unrestricted 11709 , 126 426 , 559 21135 ,685 TOTAL LIABILITIES AND NET ASSETS $ 81000J91 $ 31183 , 122 $ 11 , 183, 313 Changes in unrestricted netassets Grant income $ 11950, 747 $ - $ 11950 , 747 Program income 678 , 882 167 , 960 846 , 842 Contributions 495 , 630 - 495, 630 Special events 22, 674 - 22 , 674 Interest income 31367 184 31551 Other income 59, 070 226 59 , 296 Total Revenues and Support 31210 , 370 168 , 370 3 ;378, 740 Expenses : Program 21779 , 764 277, 118 31056, 882 General and administrative 381390 - 381390 Fundraising 96 ,479 - 96,479 . Total Expenses 21914 , 633 277 , 118 3 , 191 , 751 Decrease in Net Assets 295 , 737 ( 108 , 748) 186, 989 Net Assets, Beginning of Year 1 ,413 , 388 535 , 308 11948, 696 Net Assets, End of Year $ 11709, 125 $ 426 , 560 $ 21135 , 685 22 i COMMUNITY DEVELOPMENT PARTNERSHIP i AND THANKFUL CHASE PATHWAYS , LLC Notes to Financial Statements For the Years Ended June 30 , 2016 and 2015 NOTE Q - CONSOLIDATING SCHEDULE OF FINANCIAL POSITION AND ACTIVITIES (continued): June 30, 2015 i CDP TCP TOTAL Current Assets : Cash Accounts $ 720,236 $ 98 , 034 $ 818 ,270` Restricted Capital Reserve Cash Accounts 4001612 58 , 062 458 ,674 Escrow Accounts 226 , 970 41520 231 ,490 Accounts Receivables 4730550 - '4730550 Rent Receivables 30, 547 31392 33 ,939 Prepaid expenses 51 ,664 5 , 642 570306 Security deposits 30,214 717.73 37 ,987 Loans receivable, current portion 85 , 502 - 85 , 502 Total Current Assets 2 , 019, 295 177 , 423 2 ; 196 , 718 Fixed Assets : Land 1; 1294203 - 1 , 1280203 Buildings and equipment 61168 , 426 3 , 644 , 685 9 , 813 , 111 Total Fixed Assets 71297 , 629 31644 , 685 101942 , 314 Accumulated depreciation (2 , 191 , 221 ) (516 , 331 ) (21707 , 552) Net Fixed Assets 51106 ,408 301281354 80234 , 762 t Other Assets; Inventory: Fishing . permits 600, 000 - 60.010.00 Loans receivable , long term (net of loan losses of $40, 860 and $24 , 831 respectively) 209 , 040 209 , 040 Total Other Assets 8091040 - 809, 040 Total Assets $ 71934 , 743 $ 31305 , 777 $ 11 ,240$ 20 Current Liabilities : Accounts : payable $ 202 , 364 $ 141809 $ 217 , 173 Accrued : expenses 83 , 174 v83j174 Advance on grant contracts 543,261 - 543 , 261 Deposits payable 27 ; 201 8 ; 719 35, 920 Mortgage payable, current portion. 541000 64 , 000 Total Current Liabilities 910 , 000 23 , 528 933, 528 Long-Term Liabilities : Mortgage Payable, .: Private and 1 , 795 , 134 696, 941 214921075. Note Payable - Scallop Quota 477, 210 - 477 , 210 Government Mortgages - Deferred Financing 3 , 339 , 011 21050 , 000 5 , 3891011 Total Lang-Term Liabilities 51611 , 355 2, 7461941 - 8 , 358, 296 Total Liabilities 61521 , 355 20770 , 469 91291 , 824 23 1 rommi wiTY nFVFI ,nPMFNT PA,RTNFRR IIP AND THANKFUL CHASE PATHWAYS , LLC Notes to Financial Statements For the Years Ended June 30, 2016 and 2015 NOTE Q - CONSOLIDATING SCHEDULE OF FINANCIAL POSITION AND ACTIVITIES (continued) : For the Year Ended June 30, 2015 CDP TCP TOTAL Net Assets: Unrestricted 1 ,413 , 388 535 , 308 11948 ,696 TOTAL LIABILITIES AND NET ASSETS $ 71934 ,743 $ 31305 , 777 $ 11 ,240 , 520 Changes in unrestricted net assets Grant income $ 11210, 766 $ - $ 11210 , 766 Program income 603 ,497 166, 012, 769 , 509 Contributions 392 , 514 - 392 , 514 Special events 18, 849 - 18, 849 Interest income 3 , 876 44 31920 Other income 14 ,433 11420 15, 853 Total Revenues and. Support 2 , 243, 935 167 ,476 2 ,4111411 Expenses : Program 1 , 725 ,219 265 , 250 1 ,990 ,469 General and administrative 41 ,285 41 ,285 Fundraising 76 , 511 - 76 , 511 Total Expenses 11843 , 015 265 , 250 2 , 1081265 Decrease in Net Assets 400, 920 (97 , 774) 303 , 146 Net Assets , Beginning of Year 11012 ,468 633 , 082 11645 , 550 Net Assets , End of Year $ 11413 , 388 $ 635, 308 $ 11948 , 696 NOTE R - SUBSEQUENT EVENTS : CDP has evaluated subsequent .events through November 30 , 2016, the date which the financial statements were available to be issued, As of November 30 , 2016 there were no other subsequent events to report. 3 24 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Schedule of Expenditures of Federal Awards For the Year Ended June 8.0 , 2016 Federal Federal CFDA # Expenditures Federal Grantor/Pass throuah Grantor/Program or Cluster title Type A Programs . U .S ,, Department Of Housing and Urban Development HOME Investment Partnership program deferred non interest mortgage mortgage loans 14, 239 $ 2, 656 ,000 CDBG " Small Cities Program , Thru Massachusetts DHCD Housing Housing Development support program deferred non interest mortgage loans 14 .228 957 ; 936 CDBG -Small Cities Program % Thru Massachusetts DHCD Thru Towns of Dennis and Truro, Massachusetts housing rehabilitation grants 14.228 1 ,413 ,477 U . S . Department Of Agriculture Rural Rental Housing Mortgage Loan 10. 415 9730116 Rural Rental Housing Mortgage Loan interest subsidy 10:415 45,762 Rural Development Rental Assistance Payments 10427 105363 Type A Total 6, 1511654 Type B Programs : U , S , Department Of Housing and Urban Development Section 8 - Rental Assistance 14 . 855 175 , 635 U. S . Departmentof Agriculture Rural Business Enterprise Grant 10. 769 78 , 311 U . S. , Department of Commerce NOAH- Ground fish Business Loans 11 . 307 30 , 869 Type B Total 284 , 815 Total Federal assistance $ 6,436 ,469 Type A programs are determined to be the larger of $750 , 000 or three (3) percent of . total federal awards expended if total awards exceed $750 , 000 ; There were no awards received that were passed through to subrecelpients , The accompanying notes are an integral part of these financial statements 26 nnm"i INITY nFVF1 nPMFNT PARTNFRRHIP AND THANKFUL CHASE PATHWAYS , LLC Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2016 NOTE A. - BASIS. OF PRESENTATION : The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Community Development Partnership and Thankful Chase Pathways, LLC under programs of the federal government for the year ended June 30 , 2016 . The information in this Schedule is presented in accordance with the requirements of Title 2 U. S. Code of Federal Regulations Part 200, Uniform .Administrative Requirements, Cost Principles_ and Audit Requirements of Federal Awards (Uniform Guidance) . Because the Schedule presents only a selected portion of the operations of Community Development Partnership and Thankful Chase Pathways, LLC it is not intended to and does not present the financial position , changes in net assets , or cash flows of Community Development Partnership and Thankful Chase Pathways , LLC . NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES : Expenditures reported on the Schedule are reported on the accrual basis of accounting . Such expenditures are recognized following the cost principles contained in the Uniform Guidance and OMB Circular A422 , Costs Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. NOTE C - INDIRECT COST RATE : .Community Development Partnership and Thankful Chase Pathways , LLC has elected not to use the 10% de minimums indirect cost rate allowed under the Uniform Guidance . There are no cost reimbursement contracts, NOTE D - FEDERAL AWARDS EXPENDED FOR LOAN OR LOAN GUARANTEE PROGRAMS : Balances of loans and loan guarantee programs outstanding as of June 30 , 2016 for loans described in 2 CFR section 200 . 502( b) are as follows : Beginning New loans Outstanding CFDA # Program name balance as of from 7/1/15- balance as of mF 6/30/15 6/30115 6/30/16 14.239 HOME Investment Partnership program 21656t000 $ - 21656 , 000 deferred non interest mortgage loans 14 228 Small Cities Program deferred non 857, 936 - 957 , 936 Interest mortgage loans 10 .415 Rural Rental Housing Mortgage Loan 110241405 - 11018, 878 and interest subsidy Total $ 4 ,638 . 341 $ $ 4 .632 . 814 The accompanying notes are an integral part of these financial statements 26 00 * 0 * SWE ,ct41 TOGO * SANDERS , WALSH & EATON , LLP CERTIFIED PUBLIC ACCOUNTANTS REPORT ON INTERNAL CONTROL OV5R FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED . iN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT Board of Directors Community Development Partnership and Thankful Chase Pathways, LLC Eastham, Massachusetts . - We have audited , in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of Community Development Partnership and Thankful. Chase Pathways, LLC ( nonprofit organizations), which comprise the consolidated statement of financial position as of June 30, 2016 , and the related consolidated statements of activities , and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated November 30, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered Community Development Partnership and Thankful Chase Pathways, LLC 's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements , but not for the purpose of expressing an opinion on the effectiveness of Community Development Partnership and Thankful Chase Pathways, LLC's internal control . Accordingly, we da not express an opinion on the effectiveness of Community Development Partnership and Thankful Chase Pathways, LLC 's Internal control. A deficiency in infernal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis , A material weakness is a deficiency, or a combination of deficiencies , in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements Will not be prevented , or detected and corrected on a timely basis . A significant deficiency is a deficiency, or a combination of deficiencies , in Internal control that Is less severe than a material weakness, yet important enough to merit attention by those charged with governance . Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to Identify all deficiencies in internal control that might be material weaknesses or significant deficiencies . Given these limitations, during our audit we did not identify any deficiencies in Internal control that we consider to be material weaknesses . However, material weaknesses may exist that have not been identified . Compliance and Other Matters As part of obtaining reasonable assurance about whether Community Development . Partnership and Thankful Chase Pathways, LLC 's consolidated financial statements are free from material misstatement; we performed tests of its compliance with certain provisions of laws , regulations, contracts, and grant agreements, noncompliance with which could have : a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion, The results of our tests disclosed no Instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, P.O. Box 1427 • Wast Chatham; MA02069 >Tel: 506,045,0031 + 600.287:1040 • Fax: 608.9 M267 P.O. Box F • Osterville, MA 02655 • Tel: 502W,0790 . 877A28.1040 * Fax: 50BA28.6150 k: t, K (rooatMoto 060 ® a & i � � � 14b +rAPO ® OmiA � 1► 61 Member Amwaan institute orcerefed Pubb'cAceountants �Messachusetfs Soci* OtCoiVriad Public Accountants Community Development Partnership and Thankful Chase Pathways , LLC Page 2 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing , and not to provide an opinion on the effectiveness of the organization 's internal control or on compliance . This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the organization's Internal control and compliance . Accordingly, this communication is not suitable for any other purpose, I \hr"j � Ostervi le Massachusetts November 30, 2016 f E 28 . :: Cote W E frord00 ! ! SANDERS , WALSH & EATON , LLP CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR'S REPORT REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors Community Development Partnership and Thankful Chase Pathways , LLC Report on Compliance for Each Major Federal Program We have audited Community Development Partnership and Thankful Chase Pathways, LLC's compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Community Development Partnership and Thankful Chase Pathways , LLC's major federal programs for the year ended June 30, 2016, Community Development Partnership and Thankful Chase Pathways , LLC's major federal programs are Identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs . Management's Responsibility Management is responsible for _ compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of Community Development ' Partnership and Thankful Chase Pathways , LLC's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance In accordance with auditing standards generally :accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, Issued by the Comptroller General of . the United States; and the audit requirements of Title 2 U. S , Code of Federal Regulation, Part 200 , Uniform Administrative Requirements , Cost Principles , and Audit Requirements of Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred . An audit includes examining , on a test basis, evidence about Community Development Partnership and Thankful Chase Pathways , LLC 's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances, We believe that our audit provides a reasonable basis for our opinion on compliance for each mojor federal program. However, our audit does not provide a legal determination on Community Development Partnership and Thankful Chase Pathways, LLC's compliance. Opinion of Each Major Federal Program In our opinion , Community Development Partnership and Thankful Chase Pathways , LLC complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of Community Development. Partnership and Thankful Chase Pathways , LLC is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above, .in planning and performing our audit of compliance, we considered Community Development Partnership and Thankful Chase Pathways, LLC's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures i that are appropriate In the circumstances for the purpose of expressing an opinion, on compliance for each major federal program and, to test and report on Internal control over compliance in accordance with the . Unlform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance, Accordingly, we do not express an opinion on the effectiveness of Community Development Partnership and Thankful Chase Pathways, LLC's Internal control over compliance, P.O. Box 1427 9 west Chatham, MA 02669 • Tel: 508,945.0091 + 800.2871040 # Fax. 500.9453267 P.O. Box r • Ostervilie, MA 02655 + Tel: 50298.0790 . 877.428.1040 • Fax: 508.428.6150 MemberAmericanInstitute ofeerdled PublicAccountants Massachusetts Society ofCertiriedPublic Accountants 3 t Community Development Partnership and Thankful Chase Pathways, LLC Page 2 j A deficiency in internal control over compliance exists when the, design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis; A material weakness in internal control over compliance is a deficiency, or combination of deficiencies , in internal control over compliance , such that there Is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented , or detected and corrected, on a timely basis. A significant deficiency in intemal control over compliance is a deficiency, or a combination of deficiencies, in Internal control over compliance with a type of compliance requirement of a federal program that Is less severe than a material weakness . in internal control over -compliance, yet important enough to merit attention by those charged with governance . Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to Identify all deficiencies in the internal control over compliance that might be material weaknesses or significant deficiencies, We did not identify any deficiencies In internal control over :compliance that we consider tobe material weaknesses. However, material weaknesses may exist that have . not been identified . The purpose of this report on internal control over compliance Is solely to describe the scope of our testing of Internal control over compliance and the results of that testing based .on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 4sterville , Massachusetts November 30, 2016 30 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Statement of Findings and Questioned Costs For the Year Ended June 30, 2016 SECTION I - SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issued Unmodified opinion Internal control over financial reporting : Material weakness(es) identified ? yes x no Reportable conditions) identified not considered to be material weaknesses? yes x none reported. Noncompliance material to financial statements noted ? yes x no Federal Awards Internal control over major programs: Material weakness(es) identified? yes x no Reportable condition (s) identified not considered to be material weaknesses? :yes x none reported Type of auditor's report issued on compliance with major programs : Unmodified opinion Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance, Section 510(a) ? yes x no Identification of major programs: CFDA Number(s ) Name of Federal Program or Cluster 14 .228 Community Development Block Grants/Entitlement Grants - Small Cities Program 10415 Rural Housing Rental Assistance and Mortgage Dollar threshold used to distinguish between Type A and Type B programs: $750 , 000 Auditee qualified for low-risk auditee: x yes no SECTION II - FINANCIAL STATEMENT FINDINGS No reportable findings or questioned costs were discovered that required reporting in accordance with Government Auditing Standards, 31 COMMUNITY DEVELOPMENT PARTNERSHIP AND THANKFUL CHASE PATHWAYS , LLC Statement of Findings and Questioned Costs For the Year Ended June 30, 2016 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No reportable findings or questioned costs were discovered that required reporting in accordance with Government Auditing Standards . i 32