2024 CDA Financial Statements.pdf

COMMUNITY DEVELOPMENT AUTHORITY

OF THE CITY OF WAUSAU, WISCONSIN

FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION

YEARS ENDED DECEMBER 31, 2024 AND 2023

COMMUNITY DEVELOPMENT AUTHORITY OF THE CITY OF WAUSAU, WISCONSIN

TABLE OF CONTENTS

YEARS ENDED DECEMBER 31, 2024 AND 2023

INDEPENDENT AUDITORS’ REPORT 1

MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) 5

FINANCIAL STATEMENTS

STATEMENTS OF NET POSITION 12

STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET

POSITION 13

STATEMENTS OF CASH FLOWS 14

NOTES TO FINANCIAL STATEMENTS 15

SUPPLEMENTARY INFORMATION

FINANCIAL DATA SCHEDULES

STATEMENT OF NET POSITION DATA 30

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET

POSITION DATA 32

SCHEDULE OF MODERNIZATION COSTS 34

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 35

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR THE MAJOR

FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE

REQUIRED BY THE UNIFORM GUIDANCE 37

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 40

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 41

SCHEDULE OF FINDINGS AND QUESTIONED COSTS 42

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INDEPENDENT AUDITORS’ REPORT

Board of Commissioners Community Development Authority of the City of Wausau, Wisconsin Wausau, Wisconsin

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of the Community Development Authority of the City of Wausau, Wisconsin, (the CDA) as of and for the years ended December 31, 2024 and 2023, and the related notes to the financial statements, as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Community Development Authority of the City of Wausau, Wisconsin, as of December 31, 2024 and 2023, and the changes in its financial position and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Community Development Authority of the City of Wausau, Wisconsin, and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Board of Commissioners Community Development Authority of the City of Wausau, Wisconsin

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In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Community Development Authority of the City of Wausau, Wisconsin’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Community Development Authority of the City of Wausau, Wisconsin’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Community Development Authority of the City of Wausau, Wisconsin’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

the City of Wausau, Wisconsin

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Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5 through 11 be presented to supplement the financial statements. Such information is the responsibility of management and, although not a part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Community Development Authority of the City of Wausau, Wisconsin’s financial statements. The financial data schedules on pages 30 through 33 are presented for purposes of additional analysis as required by the U.S. Department of Housing and Urban Development and are not a required part of the financial statements. The accompanying schedule of modernization costs on page 35 is presented for purposes of additional analysis and is not a required part of the financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the financial data schedules, the schedule of modernization costs and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the financial statements as a whole.

the City of Wausau, Wisconsin

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2025 on our consideration of the Community Development Authority of the City of Wausau, Wisconsin’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Community Development Authority of the City of Wausau, Wisconsin’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP

Wausau, Wisconsin June 26, 2025

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CITY OF WAUSAU • WAUSAU COMMUNITY DEVELOPMENT AUTHORITY

550 EAST THOMAS STREET • WAUSAU, WI 54403 • 715-261-6687

June 26, 2025

As management of the Wausau Community Development Authority (the “CDA”), we offer readers of the CDA‘s financial statements, this narrative overview and analysis of the financial activities of the CDA for the fiscal year which ended December 31, 2024.

The CDA’s Management Discussion and Analysis (MD&A) is designed to assist the reader in focusing on significant financial issues, provide an overview of the CDA’s financial activity, identify changes to the CDA’s financial position and identify fund issues and/or concerns.

The MD&A is designed to focus on the current year’s activities, changes and currently known facts.

Please read it in conjunction with the CDA’s Financial Statements for the year ended December 31, 2024.

FINANCIAL HIGHLIGHTS

The CDA’s 2024 Net position remains stable at just under $23 million, up just more than $2.3 million from 2023, which is significantly higher than the 2022 level.

2024 Operating revenues were $4.83 million, up from $3.34 million in 2023.

2024 Operating expenses held relatively steady at $3.61 million, just up from 2023’s $3.32 million, and about parallel to 2022’s $3.4 million.

OVERVIEW OF THE FINANCIAL STATEMENTS

The CDA‘s Financial Report consists of the following three parts:

Management Discussion and Analysis Financial Statements Additional Supplementary Information

FINANCIAL STATEMENTS

The financial statements provide information about the overall financial position of the CDA and the results of its operations. These statements contain: Statements of Net Position; Statements of Revenues, Expenses and Changes in Net Position; Statements of Cash Flows; and Notes to Financial Statements.

The Statements of Net Position present the financial capital and resources of the CDA. Changes in the net position of the CDA may serve as an indicator of whether the financial position of the CDA is improving or deteriorating.

Net position comprises the various net earnings from operating income, non-operating revenues and expenses, and capital contributions. Net position is classified in the following three components.

Net investment in capital assets - this component consists of capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of invested in capital assets, net of related debt. Rather, that portion of the debt is included in the same net assets component as the unspent proceeds.

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Restricted - this component consists of constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or constraints imposed by law through constitutional provisions or enabling legislation.

Unrestricted net position - this component, consists of net position that does not meet the definition of “restricted” or “net investment in capital assets.”

The Statements of Revenues, Expenses and Changes in Net Position present the revenues and expenses for the current and previous fiscal year. The Statements of Cash Flows disclose net cash provided by (used for) operating activities, investing activities, and capital and related financing activities.

Supplementary Information: In addition to the Management’s Discussion and Analysis there is also the Schedule of Expenditures of Federal Awards and other schedules required by regulatory agencies.

OVERVIEW OF THE WAUSAU COMMUNITY DEVELOPMENT AUTHORITY

The Wausau CDA was established by the Wausau City Council in May of 1989, combining the Housing Authority and Redevelopment Authority under a single entity now known as the Wausau Community Development Authority. The Community Development Authority is a division of the Community Development Department and is staffed with city employees. The role of the CDA is to administer housing programs for low and moderate income persons and families, and assist with the redevelopment needs within the City of Wausau.

The CDA operates under the direction of a Board of Commissioners specifically appointed by the Mayor for their particular skill set. All property is owned by the Authority and is not City owned.

The CDA administers a Housing Choice Voucher Program and currently maintains an annual contribution contract with HUD. This program facilitates contracts with eligible tenants and landlords. Each unit is inspected and must meet the Housing Qualified Standards (HQS) established by HUD.

The CDA has operated public housing at 500 Grand Avenue commonly referred to as Riverview Towers since the late 1960’s. Riverview Towers LLC underwent major interior and exterior renovations of all 149 units in 2012 - 2013. The renovation was made possible through a WHEDA low-income housing tax credit, CDA funds, and a grant from the Federal Home Loan Bank of Chicago. Gorman and Company was our partner on the project and National Equity Fund (NEF) is our investor.

In May 2017, the CDA closed on the Rental Assistance Demonstration (RAD) conversion of Riverview Towers LLC and entered into a long-term Section 8 Project Based Voucher contract with HUD. In January 2018, Riverview Towers began receiving Housing Assistance Payment (HAP) subsidy. The units at Riverview Towers are available to near-elderly 55 and over and disabled persons over 18 years of age.

The CDA also has 46 units of public housing scattered site family housing units throughout Wausau.

These units vary in bedroom size from one to four bedrooms and have a current waiting list. We are continuing our physical improvement program as funds exist. Garage doors were updated in 2022. A roof was replaced on a six-plex unit in 2023, kitchen countertops and sinks were updated in 2024 and concrete repair and installing additional smoke detectors to be compliant with NSPIRE are next to be completed.

The CDA also owns and operates 36 units of independent elderly housing at Riverview Terrace. Subsidy is provided through project-based Housing Choice Vouchers. The facility was converted to 62 and older January 1, 2023.

In 2021, the CDA Board voted to assist a new state-of-the-art nonprofit campus, the Community Partners Campus (CPC), with a $1.5 million low-interest line of credit. This campus is located just down the block from the CDA and houses a dozen different nonprofits focusing on basic human service needs. Also in 2021, the CDA Board voted to assist Gorman and Company with restoration of the historic Landmark

(7) building to upgrade the affordable living complex of 90+ units through its Business Activity accounts. The renovation increased some unit sizes, making the building more accessible to families. It also provided upgrades to units that have not been refurbished in decades, giving a cleaner, safer living experience to residents without displacement.

In 2023, the CDA RFP’d 8 project-based vouchers. One response was submitted and chosen: Gorman & Co.’s Landmark restoration project. In 2023, the CDA Board voted to acquire a multi-unit complex of supportive living on Fulton Street from the City Community Development Department. As of January 1, 2024, the CDA has taken over maintenance activities and retained all tenants at affordable rates. This is an unsubsidized property. Also in 2023, the CDA Board voted to assist Gorman and Company in another affordable housing project – this one located at 415 S 1st Ave. The project, called Westside Commons, will add another 56 units of one to three-bedroom affordable apartments to Wausau’s near west side.

In 2024, the CDA and City signed a Beneficiary Agreement for the transfer of $1,097,763 of ARPA funds to be used towards affordable housing within the City. The CDA also collaborated with the Community Development Department to purchase 405 S 8th Avenue from the County to build a six-plex building designated for affordable housing. CDBG funds were used for the purchase of this lot.

Previously, the CDA rented office space to North Central Health Care (NCHC) for more accessible client assistance. After NCHC cut these services, as of January 1, 2024, the CDA no longer rents office space to any outside agency.

FINANCIAL STATEMENTS

The following table shows the condensed Statements of Net Position for the years ended December 31, 2024, 2023, and 2022.

2024 2023 2022

ASSETS

Current Assets 9,122,817$ 6,990,643$ 5,411,974$ Capital Assets, Net 12,303,496 12,064,085 12,572,341 Other Assets 1,890,582 1,872,319 2,570,208

Total Assets 23,316,895 20,927,047 20,554,523

LIABILITIES

Current Liabilities 305,152 226,873 276,854 Long-Term Liabilities 780,637 771,462 796,528

Total Liabilities 1,085,789 998,335 1,073,382

NET POSITION

Net Investment In Capital Assets 11,553,496 11,314,085 11,822,341 Restricted 2,427,734 1,220,171 1,110,897 Unrestricted 8,249,876 7,394,456 6,547,903

Total Net Position 22,231,106$ 19,928,712$ 19,481,141$

Total Liabilities, Deferred Inflows, and Net Position 23,316,895$ 20,927,047$ 20,554,523$

Restricted net position at December 31, 2024, 2023, and 2022, consists of operating and replacement reserve balances for Riverview Towers LLC as well as the Housing Choice Voucher Program cumulative totals of unspent Housing Assistance Payment (HAP) funds provided by HUD along with restricted amounts for our Affordable Housing program. The HAP funds may only be used for future HAP to eligible recipients.

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Significant changes in capital assets during 2024, 2023, and 2022 were as follows:

Capital Assets - Beginning of Year 24,722,396$ 24,554,419$ 24,405,004$

Additions 870,108 167,977 191,373

Disposals (16,020) - (41,958)

Capital Assets - End of Year 25,576,484 24,722,396 24,554,419 Less: Accumulated Depreciation (13,272,988) (12,658,311) (11,982,078)

Capital Assets, Net 12,303,496$ 12,064,085$ 12,572,341$

The following table shows the condensed Statements of Revenues, Expenses and Changes in Net Position for the years ended December 31, 2024, 2023, and 2022.

OPERATING REVENUES

HUD Contributions 2,555,061$ 2,323,043$ 2,029,305$ WHEDA Contributions and Other Government Grants 1,097,764 - - Rental and Tenant Care Revenue 1,080,366 1,003,590 1,130,302 Other Income 99,195 18,243 7,944

Total Operating Revenues 4,832,386 3,344,876 3,167,551

EXPENSES AND LOSSES

Housing Assistance Payments 1,528,795 1,308,048 1,033,557 Administration 620,253 548,251 532,187 Other Operating Expenses 832,928 788,493 1,121,831 Depreciation and Amortization 633,838 679,374 719,482

Total Expenses and Losses 3,615,814 3,324,166 3,407,057

NONOPERATING REVENUE

Interest Income 327,172 303,148 52,374 Gain on Disposal of Capital Assets 10,800 1,300 9,116

Total Nonoperating Revenue 337,972 304,448 61,490

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS 1,554,544 325,158 (178,016)

CAPITAL CONTRIBUTIONS 747,850 122,413 42,283

CHANGE IN NET POSITION 2,302,394 447,571 (135,733)

Net Position - Beginning of Year 19,928,712 19,481,141 19,616,874

NET POSITION - END OF YEAR 22,231,106$ 19,928,712$ 19,481,141$

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ECONOMIC FACTORS

Significant economic factors affecting the CDA’s financial position are as follows:

Economic challenges and the effects of the COVID-19 pandemic and its impact on housing, material cost, labor shortage, and inflation will remain major factors for 2025 and beyond.

Housing affordability remains a national problem and although the Wausau economy is relatively strong, housing availability and affordability are still important challenges.

The region’s 3% unemployment rate, post Great Resignation and 8,000+ open jobs necessitate new affordable housing options so workers can live near available jobs.

The City formed an Affordable Housing Task Force in late 2021 to assess the city’s market of affordable housing and propose solutions to increase affordable housing opportunities.

We also continue to experience high levels of voucher recipients with limited, or no income, contributing to higher housing assistance payments. Funding for HCV remains level for 2024 and 2025.

In 2022, PFAs (aka forever chemicals) were discovered in Wausau’s drinking water. In response, the City invested millions in a new PFAs filtration system in the new water treatment plant. This resulted in a 60% increase in water rates. This continued for 2024 and will level out for 2025 as new increases were anticipated.

In 2024, the City underwent a revaluation of property assessments, which resulted in an average increase of 50% for residential properties and 20% for commercial properties.

Between the assessment increases, water rates, and inflation, Wausau residents are in need of affordable housing capped at 30% of income now more than ever.

The 2022 Regional Planning Commission Metro Housing Study and Analysis will add 440 new affordable housing units to the City by 2025.

In 2024 the City and County collaborated to create a joint task force to study the unhoused population in the area. This resulted both entities allocating up to $400K each to address unhoused issues over the next two years.

GOALS AND OBJECTIVES

In 2017 the CDA, along with the City’s Planning, Community and Economic Development divisions adopted a first-ever consolidated Mission and Goal Statement which reflects the interconnected nature of the development mission.

The CDA updated this Mission and Goal Statement in May 2019 along with the other divisions.

We strive to be caring professionals who work for community change, advocate for good urban planning and design, champion economic development, and seek sustainable solutions.

We work to make Wausau better by valuing historic assets, promoting a thriving downtown, building quality neighborhoods, growing local businesses, and welcoming private investment.

We accept the goals of the development process as a vocation and seek creative, transformative and pragmatic solutions for urban problems.

We engage stakeholders, businesses and citizens to educate the public on best practices to enhance the built and natural environments and provide policy feedback to improve our City.

Economic Development (approved by Economic Development Committee 12/4/18)

The City of Wausau strives to be a dynamic, successful, diversified and sustainable community where citizens are actively engaged and businesses proud to invest. The City’s economic development efforts must:

Encourage business expansion, retention and vertical integration, especially in our competitive sectors such as manufacturing, information technology, insurance, healthcare, and construction materials.

Support craft industry and a maker economy which highlights our strengths in local food, value-added agricultural processing, consumer packaging, millwork, locally-owned specialty retail, outdoor recreation, the visual and performing arts, and entertainment.

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Enhance urban amenities with a focus on creating place-based experiences and support local entrepreneurs seeking to provide experiences that are new and unique in the region.

Ensure more diversified housing choices and affordable homeownership opportunities including both more affordable and higher-end rental offerings, more infill development in existing neighborhoods, greater resources for the preservation of historic properties, and the promotion of walkability and complete streets.

Develop quality public infrastructure and municipal services which supports business expansion and improves quality of life indicators including education, health, recreation and citizenship.

Collaborate with our peer regional municipalities, corporate partners, and local nonprofits and foundations to develop and commit to a shared economic vision of our region.

Embrace economic and social diversity which especially engages both local youth and aging populations, promotes infrastructure and housing well suited to both populations, and opening new opportunities for local entrepreneurship.

Enhance our physical and natural environments, increase connections to public assets, build appreciation for efforts that engage the Wisconsin River and Downtown.

Foster a knowledge-based economy which values both professional and technical skill development along with personal intellectual growth

Planning

The City of Wausau is committed to quality planning and design which sets a foundation for development and investment. The City’s planning goals are:

Protect and enhance the quality of significant natural resources.

Preserve historic sites and support cultural opportunities for community residents.

Plan for future high quality utilities, public infrastructure and community facilities to be provided in a cost-effective and cost-efficient manner.

Provide a safe, efficient and diverse transportation network that will facilitate the movement of people and goods throughout the community.

Strengthen downtown Wausau as the heart of the City and surrounding region, support corridor and neighborhood revitalization efforts.

Balance the land use needs of the community to maximize resources potential for taxable value, ecological preservation and enhancing local quality of life.

Strengthen and expand cooperative activities with all levels of government and engaged civic dialogue to improve the provision of public services and facilities.

Community Development Department (CDD) Housing & Neighborhoods (approved by the Citizens Advisory Committee 9/9/19)

The City of Wausau assists those in need with programs that target transitional neighborhoods, assist homeowners with crucial repairs, and empower small businesses. The City’s community development efforts must:

Preserve the housing stock with low interest loans for property owners and landlords for necessary repairs and property maintenance which helps stabilize neighborhoods.

Promote homeownership and homesteading activities with low interest loans to assist the purchasing of owner-occupied homes within the City of Wausau.

Support the development of Neighborhood Associations through local capacity building and funding for public improvements throughout qualifying census tract neighborhoods.

Partner with non-profit organizations whose programs assist and empower lower income residents and promote the ideals of a ‘housing first’ agenda.

Preserve and rehabilitate historic and commercial buildings with low interest loans for business owners for necessary façade improvements.

Strive to eliminate blight by encouraging infill construction and renovation of historic properties which increases diversification and choice for both market rate and affordable housing options.

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Community Development Authority (CDA) Housing & Property Redevelopment (approved by Board of Commissioners 5/28/19)

The City of Wausau provides quality housing options to elderly, disabled and low income residents in a variety of locations and formats through the Wausau Community Development Authority (WCDA) and assists in the redevelopment of challenged sites. The mission of the Authority is to:

Ensure decent, safe and affordable housing choices and increased opportunities, especially for those who are elderly, disabled and/or low income.

Link residents to community services and education by focusing on programs that enrich the quality of life, promote self-sufficiency, increase community involvement and support successful tenancies.

Preserve, maintain and expand affordable housing specifically for residents in need by ensuring equal opportunity, implementing Affirmatively Further Fair Housing (AFFH) goals, furthering Violence Against Women Act (VAWA) goals, and related strategies of the US Department of Housing and Urban Development (HUD).

Assist in the proactive redevelopment of problem and challenged properties.

CONTACTING THE CDA’S FINANCIAL MANAGEMENT PERSONNEL

This financial report is designed to provide a general overview of the CDA’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Wausau Community Development Authority, 550 East Thomas Street, Wausau, Wisconsin 54403.

STATEMENTS OF NET POSITION

DECEMBER 31, 2024 AND 2023

See accompanying Notes to Financial Statements.

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2024 2023

ASSETS

Current Assets:

Cash and Cash Equivalents:

Cash and Cash Equivalents 6,576,895$ 5,656,455$ Cash and Cash Equivalents - Restricted 2,524,135 1,310,767

Total Cash and Cash Equivalents 9,101,030 6,967,222 Receivables:

Tenants 1,739 1,101 Fraud Recovery - 1,244 Other 922 945

Notes Receivable, Current Portion 6,004 6,004 Prepaid Expenses 13,122 14,127

Total Current Assets 9,122,817 6,990,643 Capital Assets:

Capital Assets, Nondepreciable 1,074,312 984,312 Capital Assets, Depreciable, Net 11,229,184 11,079,773

Total Capital Assets 12,303,496 12,064,085 Other Assets:

Notes Receivable, Net of Current Portion 1,881,944 1,860,540 Intangibles, Net of Accumulated Amortization 8,638 11,779

Total Other Assets 1,890,582 1,872,319 Total Assets 23,316,895 20,927,047

LIABILITIES

Current Liabilities:

Accounts Payable 24,870 14,172 Accrued Wages 62,172 - Compensated Absences 38,040 34,918 Accrued Property Taxes 83,669 73,497 Tenant Security Deposits 96,401 90,598 Other Accrued Liabilities - 13,688

Total Current Liabilities 305,152 226,873 Long-Term Liabilities:

Compensated Absences 30,637 21,462 Loans Payable 750,000 750,000

Total Long-Term Liabilities 780,637 771,462 Total Liabilities 1,085,789 998,335

NET POSITION

Net Investment in Capital Assets 11,553,496 11,314,085 Restricted 2,427,734 1,220,171 Unrestricted 8,249,876 7,394,456

Total Net Position 22,231,106$ 19,928,712$

STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

YEARS ENDED DECEMBER 31, 2024 AND 2023

See accompanying Notes to Financial Statements.

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2024 2023

OPERATING REVENUES

HUD Contributions 2,555,061$ 2,323,043$ Other Government Grants 1,097,764 - Rental Income 1,038,659 970,288 Tenant Care Revenue 41,707 33,302 Other Income 99,195 18,243

Total Operating Revenues 4,832,386 3,344,876

OPERATING EXPENSES AND LOSSES

Housing Assistance Payments 1,528,795 1,308,048 Administration 620,253 548,251 Tenant Services 8,122 10,073 Utilities 214,876 240,204 Operations and Maintenance 426,171 377,498 General Expenses 183,759 160,718 Depreciation and Amortization 633,838 679,374

Total Operating Expenses and Losses 3,615,814 3,324,166

OPERATING INCOME 1,216,572 20,710

NONOPERATING INCOME

Interest Income 327,172 303,148 Gain on Disposal of Capital Assets 10,800 1,300

Total Nonoperating Income 337,972 304,448

OPERATING INCOME BEFORE CAPITAL CONTRIBUTIONS 1,554,544 325,158

CAPITAL CONTRIBUTIONS 747,850 122,413

CHANGE IN NET POSITION 2,302,394 447,571

Net Position - Beginning of Year 19,928,712 19,481,141

NET POSITION - END OF YEAR 22,231,106$ 19,928,712$

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2024 AND 2023

See accompanying Notes to Financial Statements.

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2024 2023

CASH FLOWS FROM OPERATING ACTIVITIES

Collections from Tenants, HUD, and Others 4,838,818$ 3,352,156$ Payments for Housing Assistance (1,528,795) (1,308,048) Payments Made to Suppliers (596,309) (553,740) Payments Made to Employees (700,719) (799,510) Payments Made in Lieu of Taxes (73,497) (63,766)

Net Cash Provided by Operating Activities 1,939,498 627,092

CASH FLOWS FROM CAPITAL AND RELATED FINANCING

ACTIVITIES

Proceeds from Sale of Capital Assets 10,800 1,300 Acquisition and Construction of Capital Assets (179,108) (167,977) Capital Contributions Received 56,850 122,413

Net Cash Used by Capital and Related Financing Activities (111,458) (44,264)

CASH FLOWS FROM INVESTING ACTIVITIES

(Increase) Decrease in Notes Receivable (21,404) 696,075 Interest on Investments 327,172 303,148

Net Cash Provided by Investing Activities 305,768 999,223

NET CHANGE IN CASH AND CASH EQUIVALENTS 2,133,808 1,582,051

Cash and Cash Equivalents - Beginning of Year 6,967,222 5,385,171

CASH AND CASH EQUIVALENTS - END OF YEAR 9,101,030$ 6,967,222$

RECONCILIATION OF OPERATING INCOME TO NET CASH

PROVIDED BY OPERATING ACTIVITIES

Operating Income 1,216,572$ 20,710$ Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities:

Depreciation and Amortization 633,838 679,374 Changes in Operating Assets and Liabilities:

Receivables 629 3,719 Prepaid Expenses 1,005 (1,664) Accounts Payable 10,698 1,555 Accrued Wages 62,172 (72,772) Compensated Absences 12,297 (25,605) Accrued Property Taxes 10,172 9,731 Tenant Security Deposits 5,803 6,000 Unearned Revenue - (2,439) Other Accrued Liabilities (13,688) 8,483

Net Cash Provided by Operating Activities 1,939,498$ 627,092$

SUPPLEMENTARY SCHEDULE OF NONCASH CAPITAL

AND RELATED FINANCING ACTIVITIES

Contributed Property and Equipment 691,000$ -$

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024 AND 2023

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Community Development Authority of the City of Wausau, Wisconsin (the CDA), have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standards Board is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The significant accounting principles and policies utilized by the CDA are described below:

A. Reporting Entity

The Community Development Authority of the City of Wausau, Wisconsin, was created by the Common Council of the City of Wausau on May 1, 1989, pursuant to Section 66.4325 of the Wisconsin Statutes, for the purpose of carrying out blight elimination, slum clearance, urban renewal programs and projects, and housing projects, and to act as the agent of the City of Wausau in planning and carrying out community development programs and activities approved by the Mayor and Common Council under the Federal Housing and Community Development Act of 1974. The majority of the CDA’s funding is provided by the U.S. Department of Housing and Urban Development (HUD).

These financial statements include all of the programs operated by the CDA. The reporting entity for the CDA consists of: (a) the primary government, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

The criteria for including organizations as component units within the reporting entity include whether:

The organization is legally separate (can sue and be sued in their own name).

The primary government holds the corporate powers of the organization.

The primary government appoints a voting majority of the organization’s governing board.

The primary government is able to impose its will on that organization.

The organization has the potential to provide specific financial benefits to, or burdens on, the primary government.

The organization is fiscally dependent on the primary government.

DECEMBER 31, 2024 AND 2023

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

A. Reporting Entity (Continued)

Based on the foregoing criteria, Riverview Towers MM, LLC and Riverview Towers, LLC were identified as blended component units of the CDA. The CDA is considered a discretely presented component unit of the City of Wausau, Wisconsin. Financial statements for the component units can be obtained from Riverview Towers, 550 E.

Thomas Street, Wausau, Wisconsin 54403.

B. Programs Administered by the CDA

The programs of the CDA are organized on the basis of fund accounting, as prescribed by HUD. Each is maintained using a separate set of self-balancing accounts. The CDA operates the following programs:

Housing Choice Vouchers Program – the CDA maintains one annual contributions contract with HUD for the funding and administration of 435 HUD housing assistance payments vouchers. As part of this program, HUD holds undisbursed renewal and nonrenewal funds obligated-to-date in reserve. The CDA may request reserved funds as needed. The CDA’s HUD-held reserves were $-0- and $54,023 at December 31, 2024 and 2023, respectively.

Low-Rent Public Housing Program – consists of 46 units of low-income public housing owned by the CDA. Riverview Towers MM, LLC is wholly owned by the CDA and is also a 0.01% owner and the managing member of Riverview Towers, LLC.

Capital Funds Program – consists of modernization projects in progress.

Riverview Terrace – a residential care apartment complex (RCAC) consisting of 36 assisted-living housing units for low-income persons. Riverview Terrace was transitioned from a RCAC to elderly independent-living apartments effective January 1, 2023.

Redevelopment Program – provides for various urban renewal programs on an as-needed basis.

Property Management – consists of managing Riverview Towers, LLC.

Riverview Towers, LLC – consists of 149 housing units for elderly and disabled residents of low- and very low-income, known as Riverview Towers Apartments. Of these housing units, 148 are subject to the rules and requirements of the Low- Income Housing Tax Credit program under Internal Revenue Code Section 42. One unit remains part of the Low-Rent Public Housing program. Effective June 1, 2017, the Company has entered into a Rental Assistance Demonstration (RAD) Conversion Commitment with HUD. Under the RAD Commitment, the Company, through RVTMM, has also executed a Rental Assistance Demonstration Use Agreement (RAD Use Agreement), and a Section 8 Housing Assistance Payments Contract (RAD HAP Contract) to receive Project-Based Vouchers which began January 1, 2018, in place of the operating subsidy received under the Annual Contributions Contract (ACC).

DECEMBER 31, 2024 AND 2023

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. Measurement Focus and Basis of Accounting

The CDA’s financial statements are presented on the full accrual basis of accounting and conform to accounting principles generally accepted in the United States of America.

The accounts of the CDA are organized on the basis of a proprietary fund type, specifically an enterprise fund. Enterprise funds account for activities: (i) that are financed with debt that is secured solely by a pledge of the net revenues from fees and charges of the activity, or (ii) that are required by laws or regulations that the activity’s costs of providing services, including capital costs (such as depreciation or debt service), be recovered with fees and charges, rather than with taxes or similar revenues, or

(iii) that the pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service).

The accounting and financial reporting treatment applied to the CDA is determined by its measurement focus. The transactions of the CDA are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operations are included on the statements of net position. Net position (i.e., total assets net of total liabilities) are segregated into net investment in capital assets, restricted, and unrestricted components.

Enterprise funds distinguish operating revenues and expenses from nonoperating items.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the CDA are intergovernmental rent subsidies and charges to residents for rents and services. Operating expenses for enterprise funds include the cost of operating properties owned, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the CDA’s policy to use restricted resources first, then unrestricted resources as they are needed.

D. Budgets and Budgetary Accounting

The CDA is required by contractual agreements to adopt annual, appropriated operating budgets for all programs funded by federal awards. All budgets are prepared on a basis of accounting practices prescribed by HUD, which is materially consistent with GAAP. All annual appropriations lapse at fiscal year-end.

Budgets for the Low-Rent Public Housing program, Housing Choice Voucher program, Riverview Towers and Riverview Terrace are prepared annually. The board of commissioners adopts the budget for the Low-Rent Public Housing program through passage of a budget resolution.

DECEMBER 31, 2024 AND 2023

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position

1. Cash and Cash Equivalents

Cash deposits consist of cash on hand, and demand and time deposits with financial institutions that are carried at cost. For purposes of the statements of cash flows, all cash deposits and highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.

2. Restricted Assets

Restricted assets consist of the following:

Tenant Security Deposits – tenants are required to pay a security deposit upon move-in. Tenant deposits are refunded upon move-out if the premises are left in satisfactory condition and if the rent obligation has been met.

Housing Choice Voucher Cash – restricted for housing assistance payments within the Housing Choice Voucher program.

Affordable Housing grant – restricted for use within the CDA’s affordable housing program within Business Activities.

Cash Restricted for Payment of Current Liabilities – cash received but unearned and amounts due on current debt obligations as of the end of the year.

3. Capital Assets

Land, buildings and equipment are stated at cost at the date of acquisition, or at estimated cost if donated. The CDA defines capital assets as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. Except for appliances which are also capitalized, all expenses for personal property valued under the threshold and for repairs and maintenance that do not materially prolong the useful lives of assets are expensed. Depreciation of all exhaustible capital assets used by the CDA is charged as an expense of operations.

Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows:

Buildings and Improvements 15 to 40 Years Furniture and Equipment 5 to 10 Years

DECEMBER 31, 2024 AND 2023

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position (Continued)

4. Intangible Assets

Intangible assets relate to Riverview Towers, LLC and consist of tax credit fees paid to Wisconsin Housing and Economic Development Authority in the amount of $47,114. The tax credit fees are being amortized over 15 years. The loan financing fees were fully expended during 2015. Total amortization expense for the years ended December 31, 2024 and 2023, was $3,141 and $3,141, respectively.

5. Due to/from Other Programs

During the course of operations, numerous transactions occur between individual programs for goods provided or services rendered. These receivables and payables have been eliminated in the financial statements.

6. Compensated Absences

The CDA recognizes a liability for compensated absences for leave time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled during or upon separation from employment. Based on the criteria listed, two types of leave qualify for liability recognition for compensated absences – vacation time, and sick leave. A liability for compensated absences totaling $68,677 and $56,380 has been recorded in the accompanying statements of net position as of December 31, 2024 and 2023, respectively.

7. Net Position

Net position comprises the various net earnings from operating income, nonoperating revenues and expenses, and capital contributions. Net position is classified in the following three components:

Net Investment in Capital Assets – this component consists of capital assets, net of accumulated depreciation and capital related deferred outflows of resources less outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets and any capital related deferred inflows of resources.

Restricted – this component consists of constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or constraints imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position – this component consists of net position that does not meet the definition of “restricted” or “net” investment in capital assets.

DECEMBER 31, 2024 AND 2023

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. Inter-Program Transactions

Quasi-external transactions are accounted for as revenues and expenses. Transactions that constitute reimbursements to a program for expenses initially made from it that are properly applicable to another program, are recorded as expenses in the reimbursing program and as reductions of expenses in the program that is reimbursed.

G. Related Party Transactions with Riverview Towers, LLC

On October 1, 2012, the CDA, through Riverview Towers MM, LLC, invested $175,000 in Riverview Towers, LLC as a new tax credit project and received a 0.01% ownership interest.

The CDA entered into an agreement as management agent for the project. The current agreement is for three years and expires on August 31, 2025. Fees for management agent services are calculated at the rate of 6% of total monthly gross receipts. Total property management fees were $38,498 and $37,246 for 2024 and 2023, respectively.

The CDA provided a construction second mortgage in the amount of $2,500,000 for rehabilitation of the apartment units. The construction mortgage bears interest at 2.0% with payment commencing one year from the date the completed project is placed in service, assuming available project cash flows. It is collateralized by an open-end leasehold mortgage and a security agreement.

The CDA also provided a construction second mortgage in the amount of $750,000 for rehabilitation of the apartment units. The construction mortgage bears interest at 0.5% with payment commencing one year from the date the completed project is placed in service, assuming available project cash flows. It is collateralized by an open-end leasehold mortgage and a security agreement.

Outstanding principal and interest for the above construction mortgages were $3,842,297 and $3,788,355 as of December 31, 2024 and 2023, respectively. Interest revenue for the above were $53,942 and $53,922 for 2024 and 2023, respectively.

These preceding transactions have been eliminated in the accompanying financial statements.

H. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally…