Back to GetFilings.com
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(FEE REQUIRED)
For the fiscal year ended
March 31, 1997 Commission file number 0-17711
GATEWAY TAX CREDIT FUND, LTD.
(Exact name of Registrant as specified in its charter)
Florida 59-2852555
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (813) 573-3800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
Units of Limited Partnership Interest
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
Number of Record Holders
Title of Class as of March 31, 1997
Limited Partnership Interest 2,060
General Partner Interest 2
DOCUMENTS INCORPORATED BY REFERENCE
Part III and IV - Registration Form S-11 and all Amendments and
Supplements thereto. File No. 33-18142
PART I
Item 1. Business
Gateway Tax Credit Fund, Ltd. ("Gateway") is a Florida limited
partnership. The general partners are Raymond James Tax Credit
Funds, Inc., the Managing General Partner, and Raymond James
Partners, Inc. both of which are sponsors of Gateway Tax Credit
Fund, Ltd. and wholly-owned subsidiaries of Raymond James
Financial, Inc. Gateway was formed October 27, 1987 and commenced
operations as of June 30, 1988 with the first admission of Limited
Partners.
Gateway is engaged in only one industry segment, to acquire
limited partnership interests in unaffiliated limited partnerships
("Project Partnerships"), each of which owns and operates one or
more apartment complexes eligible for Low-Income Housing Tax
Credits under Section 42 of the Internal Revenue Code ("Tax
Credits"), received over a ten year period. Subject to certain
limitations, Tax Credits may be used by Gateway's investors to
reduce their income tax liability generated from other income
sources. Gateway will terminate on December 31, 2040 or sooner, in
accordance with the terms of its Limited Partnership Agreement.
Gateway closed its initial offering of Limited Partnership
Interests on March 1, 1990 after receiving capital contributions of
$1,000 from the General Partners and $25,566,000 from Limited
Partners.
Operating profits and losses, cash distributions from operations
and Tax Credits are allocated 99% to the Limited Partners and 1% to
the General Partners. Profit or loss and cash distributions from
sales of interests in Project Partnerships will be allocated as
described in the Limited Partnership Agreement.
Gateway has invested in 82 Project Partnerships, acquiring a 99%
interest in these properties by becoming the sole limited partner
in the Project Partnerships that own the properties. In October,
1996 Value Partners, Inc., an affiliate of Raymond James Tax Credit
Funds, Inc., became the sole general partner of one of the Project
Partnerships, Village Apartments of Sparta, Limited Partnership
("Sparta"). See Management's Discussion and Analysis of Financial
Condition and Results of Operations for additional details.
The primary sources of funds for the year ended March 31, 1997
were from the maturity of Treasury Notes for $357,000, interest
income of $14,371 earned on cash and cash equivalents, and $87,273
in distributions received from Project Partnerships. As of March
31, 1997 Gateway had $445,969 of Cash and Cash Equivalents and
$2,349,025 in investments in securities with annual maturities each
year until 2004, which will be used to meet future annual operating
needs of Gateway.
All Project Partnerships are government subsidized. Most have
mortgage loans from the Farmers Home Administration (now called
Rural Housing Services) ("RHS") under Section 515 of the Housing
Act of 1949. These mortgage loans are made at low interest rates
for multi-family housing in rural and suburban areas, with the
requirement that the interest savings be passed on to low income
tenants in the form of lower rents. A significant portion of the
Project Partnerships also receive rental assistance from RECD to
subsidize certain qualifying tenants.
The General Partners do not believe the Project Partnerships are
subject to the risks generally associated with conventionally
financed nonsubsidized apartment properties. Risks related to the
operations of Gateway are described in detail on pages 21 through
33 of the Prospectus, as supplemented, under the caption "Risk
Factors" which is incorporated herein by reference.
The investment objectives of Gateway are to:
1) Provide tax benefits to Limited Partners in the form of
Tax Credits during the period in which each Project is
eligible to claim tax credits;
2) Preserve and protect the capital contributions of
Investors;
3) Participate in any capital appreciation in the value of
the Projects; and
4) Provide passive losses to individual investors to offset
passive income from other passive activities, and provide
passive losses to corporate investors to offset business
income.
The investment objectives and policies of Gateway are described
in detail on pages 33 through 38 of the Prospectus, as
supplemented, under the caption "Investment Objectives and
Policies" which is incorporated herein by reference.
Gateway's goal was to invest in a diversified portfolio of
Project Partnerships located in rural and suburban locations with
a high demand for low income housing. As of March 31, 1997 the
capital contributions raised from Limited Partner investors were
successfully invested in Project Partnerships which met the
investment criteria. Management anticipates that competition for
tenants will only be with other low income housing projects, and
not with conventionally financed housing. With significant number
of rural American households living below the poverty level in
substandard housing, management believes there will be a continuing
demand for affordable low income housing for the foreseeable
future.
Gateway has no direct employees. The General Partners have full
and exclusive discretion in management and control of Gateway.
Item 2. Properties
Gateway owns interest in properties through 99% limited
partnership interests in 82 Project Partnerships. There are no
investments in individual Project Partnerships which are material
to Gateway taken as a whole with the largest single investment
comprising 11.5% of Gateway's total assets. The following table
provides certain summary information regarding the Projects in
which Gateway had an interest, excluding Sparta, as of December 31,
1996:
Item 2 - Properties (continued):
Location # of Date
Partnership of Property Units Acquired
- ----------- ----------- ----- ---------
Laynecrest Medway, OH 48 6/88
Martindale Union, OH 30 6/88
La Villa Elena Bernalillo, NM 54 8/88
Rio Abajo Truth/Conseq,NM 42 9/88
Fortville II Fortville, IN 24 11/88
Summitville Summitville, IN 24 11/88
Suncrest Yanceyville, NC 40 12/88
Brandywine III Millsboro, DE 32 12/88
Concord IV Perryville, MD 32 12/88
Dunbarton Oaks III Georgetown, DE 32 12/88
Federal Manor Federalsburg, MD 32 12/88
Laurel Apts Laurel, DE 32 12/88
Mulberry Hill IV Easton, MD 16 12/88
Madison Madison, OH 40 12/88
Hannah's Mill Thomaston, GA 50 12/88
Longleaf Apts. Cairo, GA 36 12/88
Sylacauga Garden Sylacauga, AL 45 12/88
Monroe Family Monroe, GA 48 12/88
Clayfed Apartments Denver, CO 32 12/88
Westside Apts. Denver, CO 52 12/88
Casa Linda Silver City, NM 41 3/89
Rivermeade Yorktown, VA 80 3/89
Laurel Woods Ashland, VA 40 3/89
Keysville Keysville, VA 24 3/89
Crosstown Kalamazoo, MI 201 4/89
Riverside Apts. Demopolis, AL 40 5/89
Brookshire Apts. McDonough, GA 46 6/89
Sandridge Apts. Fernandina Bch,FL 46 6/89
Limestone Estates Limestone, ME 25 6/89
Eagle's Bay Beaufort, NC 40 6/89
Teton View Rigby, ID 40 6/89
Albany Albany, KY 24 7/89
Burkesville Burkesville, KY 24 7/89
Scotts Hill Scotts Hill, TN 12 7/89
Sage Gallup, NM 44 7/89
Claremont Cascade, ID 16 8/89
Divernan Divernon, IL 12 8/89
Middleport Middleport, NY 25 9/89
Oakwood Apts. Columbus, NE 24 9/89
Morgantown Morgantown, IN 24 9/89
Ashburn Housing Ashburn, GA 41 9/89
Cuthbert Elderly Cuthbert, GA 32 9/89
Sandhill Forest Melrose, FL 16 9/89
Oakwood Grove Crescent City, FL 36 9/89
Hastings Manor Hastings, FL 24 9/89
Lakewood Apts. Norfolk, NE 72 9/89
Robinhood Apts. Springfield, TN 48 9/89
Skyview Terrace Springfield, TN 48 9/89
Mabank 1988 Mabank, TX 42 9/89
Buena Vista Buena Vista, GA 25 9/89
Woodcroft Elizabethtown, NC 32 9/89
Spring Creek Quitman, GA 18 10/89
Spring Creek Cherokee, AL 24 11/89
Milton Elderly Milton, FL 43 11/89
Winder Apartments Winder, GA 48 11/89
Hunters Ridge Killen, AL 40 12/89
Stone Arbor Madison, NC 40 12/89
Greeneville Greeneville, TN 40 12/89
Centralia II Centralia, IL 24 12/89
Poteau IV Poteau, OK 32 12/89
Barling Barling, AR 48 12/89
Booneville Booneville, AR 50 12/89
Augusta Augusta, KS 66 12/89
Meadows Farmville, VA 40 12/89
Kenly Housing Kenly, NC 48 2/90
Fairview South Athens, TX 44 2/90
River Road Apts. Waggaman, LA 43 2/90
Middlefield Middlefield, OH 36 3/90
Floresville Floresvile, TX 40 3/90
Mathis Retirement Mathis, TX 36 3/90
Sabinal Housing Sabinal, TX 24 3/90
Kingsland Housing Kingsland, TX 34 3/90
Crestwood Villa II Crestline, OH 36 3/90
Poteau Prop. III Poteau, OK 19 4/90
Decatur Properties Decatur, AR 24 4/90
Broken Bow Prop II Broken Bow, OK 46 4/90
Turtle Creek II Grove, OK 42 4/90
Pleasant Valley Grangeville, ID 32 4/90
Hartwell Elderly Hartwell, GA 24 4/90
Pulaski Village Pulaski, VA 44 7/90
Southwood Apts. Jacksonville, TX 40 7/90
-----
Total 3,110
The average effective rental per unit is $3,475 per year ($290 per
month).
Item 2 - Properties (continued):
12/31/96 12/31/96
Property Occupancy
Partnership Cost Rate
- ----------- -------- ---------
Laynecrest $ 1,860,570 100%
Martindale 1,174,715 100%
La Villa Elena 1,834,277 94%
Rio Abajo 1,713,156 98%
Fortville II 809,473 100%
Summitville 879,511 88%
Suncrest 2,131,169 100%
Brandywine III 1,265,521 97%
Concord IV 1,350,179 94%
Dunbarton Oaks III 1,338,637 97%
Federal Manor 1,448,417 100%
Laurel Apts 1,350,767 97%
Mulberry Hill IV 725,157 100%
Madison 1,439,849 100%
Hannah's Mill 1,812,786 92%
Longleaf Apts. 1,192,947 97%
Sylacauga Garden 1,607,002 100%
Monroe Family 1,788,673 92%
Clayfed Apartments 977,595 100%
Westside Apts. 1,565,112 100%
Casa Linda 1,677,613 100%
Rivermeade 3,044,152 97%
Laurel Woods 1,549,636 98%
Keysville 913,795 100%
Crosstown 5,927,779 98%
Riverside Apts. 1,423,971 95%
Brookshire Apts. 1,723,393 96%
Sandridge Apts. 1,632,755 100%
Limestone Estates 1,414,221 96%
Eagle's Bay 1,931,083 100%
Teton View 1,778,615 100%
Albany 934,862 96%
Burkesville 913,773 88%
Scotts Hill 501,138 100%
Sage 1,828,621 93%
Claremont 570,213 94%
Divernan 497,265 83%
Middleport 1,167,852 100%
Oakwood Apts. 963,152 100%
Morgantown 955,695 92%
Ashburn Housing 1,300,760 98%
Cuthbert Elderly 1,028,295 97%
Sandhill Forest 573,763 88%
Oakwood Grove 1,238,587 78%
Hastings Manor 864,376 96%
Lakewood Apts. 2,979,452 97%
Robinhood Apts. 1,807,695 100%
Skyview Terrace 1,475,370 98%
Mabank 1988 1,347,754 100%
Buena Vista 815,627 96%
Woodcroft 1,489,965 100%
Spring Creek 607,608 94%
Spring Creek 636,688 100%
Milton Elderly 1,342,395 100%
Winder Apartments 1,766,010 98%
Hunters Ridge 1,420,816 90%
Stone Arbor 1,874,064 98%
Greeneville 1,521,125 100%
Centralia II 996,364 100%
Poteau IV 716,016 88%
Barling 1,152,864 94%
Booneville 1,682,587 96%
Augusta 2,381,719 100%
Meadows 1,588,193 100%
Kenly Housing 1,666,432 94%
Fairview South 1,325,900 100%
River Road Apts. 1,478,045 98%
Middlefield 1,327,085 97%
Floresville 1,310,902 96%
Mathis Retirement 1,083,532 97%
Sabinal Housing 779,515 100%
Kingsland Housing 1,161,004 100%
Crestwood Villa II 1,371,933 94%
Poteau Prop. III 583,005 88%
Decatur Properties 969,816 100%
Broken Bow Prop II 1,957,868 98%
Turtle Creek II 1,558,446 98%
Pleasant Valley 1,443,382 100%
Hartwell Elderly 821,329 100%
Pulaski Village 1,785,352 100%
Southwood Apts. 1,203,598 93%
------------
Total $114,050,334
The average effective occupancy rate at December 31, 1996 was 97.0%
Item 2 - Properties (continued):
A summary of the cost of the properties, excluding Sparta, at
December 31, 1996, 1995 and 1994 is as follows:
December 31,
1996 1995
---- ----
Land $ 5,110,980 $ 5,142,980
Land Improvements 1,610,178 1,809,982
Buildings 102,790,145 103,331,434
Furniture and Fixtures 4,539,031 4,499,828
------------ ------------
Properties, at Cost 114,050,334 114,784,224
Less: Accumulated Depreciation 27,941,689 24,594,181
------------ ------------
Properties, Net $ 86,108,645 $ 90,190,043
============ ============
December 31,
1994
----
Land $ 5,142,730
Land Improvements 1,801,470
Buildings 103,319,305
Furniture and Fixtures 4,036,535
------------
Properties, at Cost 114,300,040
Less: Accumulated Depreciation 21,323,768
------------
Properties, Net $ 92,976,272
============
Item 3. Legal Proceedings
Gateway is not a party to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
As of March 31, 1997, no matters were submitted to a vote of
security holders, through the solicitation of proxies or otherwise.
PART II
Item 5. Market for the Registrant's Securities and Related
Security Holder Matters
(a) Gateway's Limited Partnership interests are not publicly
traded. There is no market for the Registrant's Limited
Partnership interests and it is unlikely that any will
develop. No transfers of Limited Partnership Units are
permitted without the prior written consent of the
Managing General Partner. There have been several
transfers over the last two years, with most being from
individuals to their trusts or heirs. The Managing
General Partner is not aware of the price at which the
units are transferred. The conditions under which
investors may transfer units is found under ARTICLE XII -
"Transfer of a Limited Partnership Interest" on pages A-
24 and A-25 of the Limited Partnership Agreement within
the Prospectus, which is incorporated herein by
reference.
There have been no distributions paid to the Limited Partner
investors over the last five years.
(b) Approximate Number of Equity Security Holders:
Number of Record Holders
Title of Class as of March 31, 1997
Limited Partnership Interest 2,060
General Partner Interest 2
Item 6. Selected Financial Data
FOR THE YEARS ENDED MARCH 31,:
1997 1996 1995
---- ---- ----
Total Revenues 249,627 227,632 229,530
Net Loss (1,766,212) (1,507,296) (2,441,636)
Equity in Losses
of Project Partnerships (1,365,627) (1,135,565) (2,088,642)
Total Assets 8,092,005 8,839,600 10,142,829
Investments in
Project Partnerships 4,562,124 5,935,650 7,195,516
Per Limited Partnership
Unit Outstanding:
Net Loss (68.39) (58.37) (94.55)
Passive Loss (A) (135.00) (127.80) (126.00)
Portfolio Income (A) 17.30 17.10 15.90
Tax Credits (A) 148.70 148.30 148.20
1994 1993
---- ----
Total Revenues 264,345 175,549
Net Loss (2,366,043) (2,453,545)
Equity in Losses
of Project Partnerships (1,972,346) (1,963,800)
Total Assets 12,334,922 14,455,286
Investments in
Project Partnerships 9,378,713 11,357,747
Per Limited Partnership
Unit Outstanding:
Net Loss (91.62) (95.01)
Passive Loss (A) (129.50) (117.96)
Portfolio Income (A) 15.50 13.74
Tax Credits (A) 148.00 147.67
(A) The Tax information is as of December 31, the year end of the
Partnership for tax purposes.
The above selected financial data should be read in conjunction
with the financial statements and related notes appearing elsewhere
in this report. This statement is not covered by the auditor's
opinion included elsewhere in this report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations -
Gateway commenced operations June 30, 1988. During the offering
period, Gateway received $25,566,000 in capital contributions from
investors. The proceeds available for investment from the capital
contributions were used to acquire interests in Project
Partnerships. At December 31, 1989, Gateway owned an interest in
65 Project Partnerships, and since December 31, 1990, Gateway has
owned an interest in 82 Project Partnerships. There are no unusual
events or trends to describe.
As disclosed on the Statements of Operations, interest income was
comparable for the years ended March 31, 1997, 1996 and 1995.
Total expenses were comparable for the years ended March 31, 1996
and 1995. Total expense for the year ended March 31, 1997
increased to $651,606 as compared to $599,363 for the year ended
March 31, 1996 primarily as a result of combining the operating
expenses of Sparta.
Equity in Losses of Project Partnerships for the year ended March
31, 1996 decreased from $2,088,642 for the year ended March 31,
1995 to $1,135,565 as a result of not including losses of $660,883,
as these losses would reduce the investment in certain Project
Partnerships below zero. The Equity in Losses of Project
Partnerships increased to $1,365,627 for the year ended March 31,
1997 as Gateway recognized prior suspended losses relating to the
Combined Entity. In general, it is common in the real estate
industry to experience losses for financial and tax reporting
purposes because of the non-cash expenses of depreciation and
amortization. (For the twelve months ending December 31, 1996,
December 31, 1995, and December 31, 1994, the 81 Project
Partnerships reported depreciation and amortization expense of
$3,685,935, $3,316,673, and $4,137,837, respectively). As a
result, management expects Gateway will continue to report its
equity in Project Partnerships as a loss for tax and financial
reporting purposes.
Overall, management believes Gateway is operating as expected and
the Project Partnerships are generating tax credits which meet
projections. However, there are two Project Partnerships that have
experienced significant operating problems which are described
below. Management does not expect any material adverse effect to
Gateway from these Project Partnerships.
1) On October 1, 1996 Value Partners, Inc. became the sole
general partner of Village Apartments of Sparta Limited
Partnership, replacing the former local general partners. Value
Partners, Inc. is an affiliate of Raymond James Tax Credit Funds,
Inc., the managing General Partner of Gateway. Sparta is a 24 unit
property located in Sparta, Illinois in which Gateway invested as
the sole limited partner on August 1, 1989. High vacancy rates due
to the closure of a major area employer and excessive real estate
taxes caused Sparta to experience operating cash shortages and
deferred maintenance. Effective October 1, 1996, a problems
resolution plan was executed between the mortgage lender (RHS) and
Sparta. Under the terms of the plan, a new property management
company was hired, Gateway agreed to loan Sparta approximately
$35,000 to pay delinquent real estate taxes and to complete various
maintenance requirements and RHS reduced the loan payments for a 24
month period beginning October 1996. Based on current occupancy,
the property is projected to require additional loans from Gateway
of approximately $10,000 per year until additional rental
assistance becomes available.
2) A property located in Killen, Alabama experienced significant
cash flow shortages due to a recent occupancy problem created by
competition from a new 80 unit complex located nearby. The
management company and local general partners are working
diligently to improve occupancy. As of March 1997, occupancy was
90%.
There were no cash distributions paid in the fiscal years ended
March 31, 1995, 1996, and 1997 and management does not anticipate
distributions in the foreseeable future.
Liquidity and Capital Resources -
Gateway's capital resources are used to pay General and
Administrative operating costs including personnel, supplies, data
processing, travel, and legal and accounting associated with the
administration and monitoring of Gateway and the Project
Partnerships. The capital resources are also used to pay the Asset
Management Fee due the Managing General Partner, but only to the
extent that Gateway's remaining resources are sufficient to fund
Gateway's ongoing needs. (Payment of any Asset Management Fee due
but unpaid at the time Gateway sells its interests in the Project
Partnerships is subordinated to the investors return of their
original capital contribution.)
The sources of funds to pay the operating costs are short term
investments and interest earned thereon, the maturity of U.S.
Treasury Security Strips ("Zero Coupon Treasuries") which were
purchased with funds set aside for this purpose, and cash
distributed to Gateway from the operations of the Project
Partnerships. At March 31, 1997, Gateway had $445,969 of short
term investments (Cash and Cash Equivalents). It also had
$2,349,025 in Zero Coupon Treasuries with maturities providing
$375,000 in fiscal year 1998 increasing to $514,000 in fiscal year
2004. Management believes these sources of funds are sufficient to
meet Gateway's current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.
For the year ending March 31, 1997, Gateway received $87,273 in
cash distributions from the Project Partnerships and it received
$357,000 from the matured Zero Coupon Treasuries. The General and
Administrative operating costs were $80,923 and the Asset
Management Fee actually paid was $306,217.
Item 8. Financial Statements and Supplementary Data
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Gateway Tax Credit Fund, Ltd.
We have audited the accompanying combined balance sheets of
Gateway Tax Credit Fund, Ltd. (a Florida Limited Partnership) as of
March 31, 1997 and 1996 and the related combined statements of
operations, partners' equity, and cash flows for each of the three
years in the period ended March 31, 1997. These combined financial
statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these combined
financial statements based on our audits. We did not audit the
financial statements of certain underlying Project Partnerships
owned by Gateway Tax Credit Fund, Ltd. for each of the three years
in the period ended March 31, 1997, the investments in which are
recorded using the equity method of accounting. The investments in
these partnerships represent 92% and 91% of the total investment in
Project Partnerships and 52% and 61% of the Partnership's assets as
of March 31, 1997 and 1996, and the equity in their losses
represents 88%, 73% and 85% of the equity in losses of the Project
Partnerships for the years ended March 31, 1997, 1996 and 1995.
Those statements were audited by other auditors whose reports have
been furnished to us, and our opinion, insofar as it relates to the
amounts included for such underlying partnerships, is based solely
on the reports of the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
combined financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable basis
for our opinion.
In our opinion, based on our audits and the reports of other
auditors, the combined financial statements referred to above
present fairly, in all material respects, the financial position of
Gateway Tax Credit Fund, Ltd. as of March 31, 1997 and 1996 and the
results of its operations and its cash flows for each of the three
years in the period ended March 31, 1997, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed
under Item 14(a)(2) in the index are presented for purposes of
complying with the Securities and Exchange Commission's rules and
are not part of the basic financial statements. These schedules
have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, based on our
audits and the reports of other auditors, fairly state in all
material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a
whole.
/s/ Spence Marston, Bunch, Morris & Co.
SPENCE, MARSTON, BUNCH, MORRIS & CO.
CERTIFIED PUBLIC ACCOUNTANTS
Clearwater, Florida
June 20, 1997
PART I - Financial Information
Item 1. Financial Statements
GATEWAY TAX CREDIT FUND, LTD.
(A Florida Limited Partnership)
COMBINED BALANCE SHEETS
MARCH 31, MARCH 31,
1997 1996
----------- ----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 445,969 $ 403,542
Accounts Receivable 1,426 0
Investments in Securities 353,436 336,350
Prepaid Insurance 358 0
Tenant Security Deposits 3,216 0
----------- ----------
Total Current Assets 804,405 739,892
Investments in Securities 1,995,589 2,164,058
Investments in Project
Partnerships, Net 4,562,124 5,935,650
Replacement Reserves 15,205 0
Rental Property at cost, Net 714,682 0
---------- ----------
Total Assets $8,092,005 $8,839,600
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Payable to General Partners $ 335,155 $ 333,494
Accrued Real Estate Taxes 17,642 0
Tenant Security Deposits 2,980 0
Accrued Management Fees 5,177 0
---------- ----------
360,954 333,494
Long-Term Liabilities:
Payable to General Partners 2,100,459 1,904,659
Mortgage Note Payable 822,897 0
---------- ----------
Total Liabilities 2,923,356 1,904,659
---------- ----------
Minority Interest in Local
Limited Partnership (27,540) 0
Partners' Equity:
Limited Partners (25,566
units outstanding at
March 31, 1997 and 1996 5,010,872 6,759,422
General Partners (175,637) (157,975)
---------- ----------
Total Partners' Equity 4,835,235 6,601,447
---------- ----------
Total Liabilities and
Partners' Equity $8,092,005 $8,839,600
========== ==========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND, LTD.
(A Florida Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31,
1997 1996 1995
----------- ---------- -----------
Revenue:
Rental $ 14,111 $ 0 $ 0
Interest Subsidy 14,499 0 0
Interest Income 220,055 227,632 229,530
Miscellaneous 962 0 0
------------- ------------- ------------
Total Revenue 249,627 227,632 229,530
Expenses:
Asset Management Fee-
General Partner 502,017 502,333 503,482
General and Administrative-
General Partner 25,316 25,447 31,168
General and Administrative-
Other 55,607 50,476 46,399
Rental Operating
Expenses 14,708 0 0
Interest 16,226 0 0
Depreciation 7,592 0 0
Amortization 30,140 21,107 1,475
------------- ------------- ------------
Total Expenses 651,606 599,363 582,524
Loss Before Equity in Losses of
Project Partnerships (401,979) (371,731) (352,994)
Equity in Losses of Project
Partnerships (1,365,627) (1,135,565) (2,088,642)
Minority Interest in Loss of
Combined Project
Partnership 1,394 0 0
------------- ------------- -------------
Net Loss $ (1,766,212) $ (1,507,296) $ (2,441,636)
============= ============= =============
Allocation of Net Loss:
Limited Partners $ (1,748,550) $ (1,492,223) $ (2,417,220)
General Partners (17,662) (15,073) (24,416)
------------- ------------- -------------
$ (1,766,212) $ (1,507,296) $ (2,441,636)
============= ============= =============
Net Loss Per Number of
Limited Partnership Units $ (68.39) $ (58.37) $ (94.55)
Number of Limited Partnership
Units Outstanding 25,566 25,566 25,566
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND, LTD.
(A Florida Limited Partnership)
COMBINED STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1997, 1996 AND 1995:
Limited General
Partners Partners Total
----------- ----------- -----------
Balance at
March 31, 1994 $10,668,865 $(118,486) $10,550,379
Net Loss (2,417,220) (24,416) (2,441,636)
------------ ---------- ------------
Balance at
March 31, 1995 8,251,645 (142,902) 8,108,743
Net Loss (1,492,223) (15,073) (1,507,296)
------------ ---------- ------------
Balance at
March 31, 1996 6,759,422 (157,975) 6,601,447
Net Loss (1,748,550) (17,662) (1,766,212)
------------ ---------- ------------
Balance at
March 31, 1997 $ 5,010,872 $(175,637) $ 4,835,235
============ ========== ============
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND, LTD.
(A Florida Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1997, 1996 AND 1995:
1997 1996 1995
----------- --------- ---------
Cash Flows from Operating Activities:
Net Loss $(1,766,212) $(1,507,296) $(2,441,636)
Adjustments to Reconcile
Net Loss to Net Cash
Used in Operating Activities:
Amortization 30,140 21,107 1,475
Depreciation 7,592 0 0
Accreted Interest Income
on Investments in
Securities (205,617) (215,038) (221,104)
Equity in Losses of
Project Partnerships 1,365,627 1,135,565 2,088,642
Minority Interest In Losses
of Combined Project
Partnership (1,394) 0 0
Interest Income from Redemption
of Securities 135,745 110,537 81,237
Changes in Operating Assets
and Liabilities:
Decrease in Accounts
Receivable 10,289 0 0
Decrease in Prepaid
Insurance 1,083 0 0
Decrease in Accounts
Payable (9,897) 0 0
Increase in Replacement
Reserves (10,729) 0 0
Decrease in Security
Deposits (220) 0 0
Decrease in Accrued
Real Estate Taxes (2,358) 0 0
Increase in Payable to
General Partners 197,461 204,067 249,544
------------ ------------ ------------
Net Cash Used in
Operating
Activities (248,490) (251,058) (241,842)
------------ ----------- ------------
Cash Flows from Investing Activities:
Distributions Received from
Project Partnerships 87,273 103,193 93,080
Redemption of Investment
in Securities 221,255 227,463 153,763
------------ ------------ ------------
Net Cash Provided by
Investing
Activities 308,528 330,656 246,843
------------ ------------ ------------
Cash Flows from Financing Activities:
Principal Payment
on Debt (329) 0 0
Proceeds from Loan 5,178 0 0
Repayments to
Affiliates (22,534) 0 0
------------ ------------ ------------
Net Cash Used in
Financing
Activities (17,685) 0 0
------------ ------------ ------------
Increase in Cash and
Cash Equivalents 42,353 79,598 5,001
Cash and Cash Equivalents at
Beginning of Year 403,616 323,944 318,943
------------ ------------ ------------
Cash and Cash Equivalents at
End of Year $ 445,969 $ 403,542 $ 323,944
============ ============ ============
Supplemental Cash Flow Information:
Interest Paid $ 6,906 $ 0 $ 0
============ =========== ===========
See accompanying notes to financial statements.
GATEWAY TAX CREDIT FUND, LTD.
(A Florida Limited Partnership)
NOTES TO COMBINED FINANCIAL STATEMENTS
March 31, 1997, 1996 AND 1995
NOTE 1 - ORGANIZATION:
Gateway Tax Credit Fund, Ltd. ("Gateway"), a Florida Limited
Partnership, was formed October 27, 1987 under the laws of Florida.
Operations commenced on June 30, 1988. Gateway invests, as a
limited partner, in other limited partnerships ("Project
Partnerships"), each of which owns and operates apartment complexes
expected to qualify for Low-Income Housing Tax Credits. Gateway
will terminate on December 31, 2040 or sooner, in accordance with
the terms of the Limited Partnership Agreement. Gateway closed the
offering on March 1, 1990 after receiving Limited and General
Partner capital contributions of $25,566,000 and $1,000,
respectively. The fiscal year of Gateway for reporting purposes
ends on March 31.
Raymond James Partners, Inc. and Raymond James Tax Credit Funds,
Inc., wholly-owned subsidiaries of Raymond James Financial, Inc.,
are the General Partner and Managing General Partner, respectively.
The Managing General Partner manages and controls the business of
Gateway.
Operating profits and losses, cash distributions from operations
and tax credits are allocated 99% to the Limited Partners and 1% to
the General Partners. Profit or loss and cash distributions from
sales of properties will be allocated as formulated in the Limited
Partnership Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Combined Statements
The accompanying statements include, on a combined basis, the
accounts of Gateway and Village Apartments of Sparta Limited
Partnership ("Combined Entity"), a Project Partnership in which
Gateway has invested. As of October 1, 1996, an affiliate of
Gateway's Managing General Partner, Value Partners, Inc. became the
general partner of the Combined Entity. Since the general partner
of the Combined Entity is now an affiliate of Gateway, these
combined financial statements include the financial activity of the
Combined Entity for the period from October 1, 1996 through
December 31, 1996. All significant intercompany balances and
transactions have been eliminated. Gateway has elected to report
the results of operations of the Combined Entity on a 3-month lag
basis, consistent with the presentation of financial information of
all Project Partnerships.
Basis of Accounting
Gateway utilizes the accrual basis of accounting whereby revenues
are recognized when earned and expenses are recognized when
obligations are incurred.
Gateway accounts for its investments as the sole limited partner
in Project Partnerships ("Investments in Project Partnerships"),
with the exception of the Combined Entity, using the equity method
of accounting and reports the equity in losses of the Project
Partnerships on a 3-month lag in the Statements of Operations.
Under the equity method, the Investments in Project Partnerships
initially include:
1) Gateway's capital contribution,
2) Acquisition fees paid to the General Partner for services
rendered in selecting properties for acquisition, and
3) Acquisition expenses including legal fees, travel and other
miscellaneous costs relating to acquiring properties.
Quarterly the Investments in Project Partnerships are increased or
decreased as follows:
1) Increased for equity in income or decreased for equity in
losses of the Project Partnerships,
2) Decreased for cash distributions received from the Project
Partnerships,
3) Decreased for the amortization of the acquisition fees and
expenses,
4) In certain Project Partnerships, where Gateway's investment
was greater than Gateway's pro-rata share of the book value of
the underlying assets, decreased for the amortization of the
difference; and
5) In certain Project Partnerships, where Gateway's investment
was less than Gateway's pro-rata share of the book value of the
underlying assets, increased for the accretion of the
difference.
Amortization and accretion are calculated on a straight-line
basis over 35 years, as this is the average estimated useful life
of the underlying assets. The net amortization and accretion are
shown as amortization expense on the Statements of Operations.
Pursuant to the limited partnership agreements for the Project
Partnerships, cash losses generated by the Project Partnerships are
allocated to the general partners of those partnerships. In
subsequent years, cash profits, if any, are first allocated to the
general partners to the extent of the allocation of prior years'
cash losses.
Since Gateway invests as a limited partner, and therefore is not
obligated to fund losses or make additional capital contributions,
it does not recognize losses from individual Project Partnerships
to the extent that these losses would reduce the investment in
those Project Partnerships below zero. The suspended losses will
be used to offset future income from the individual Project
Partnerships.
Cash and Cash Equivalents
It is Gateway's policy to include short-term investments with an
original maturity of three months or less in Cash and Cash
Equivalents. Short-term investments are comprised of money market
mutual funds.
Capitalization and Depreciation
Land, buildings and improvements are recorded at cost and
provides for depreciation using the modified accelerated cost
recovery system method for financial and tax reporting purposes in
amounts adequate to amortize costs over the lives of the applicable
assets as follows:
Buildings 27-1/2 years
Equipment 7 years
Expenditures for maintenance and repairs are charged to expense
as incurred. Upon disposal of depreciable property, the
appropriate property accounts are reduced by the related costs and
accumulated depreciation. The resulting gains and losses are
reflected in the statement of income.
Rental Income
Rental income, principally from short-term leases on the Combined
Entity's apartment units, is recognized as income under the accrual
method as the rents become due.
Concentrations of Credit Risk
Financial instruments which potentially subject Gateway to
concentrations of credit risk consist of cash investments in a
money market mutual fund that is a wholly-owned subsidiary of
Raymond James Financial, Inc.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
estimates that affect certain reported amounts and disclosures.
These estimates are based on management's knowledge and experience.
Accordingly, actual results could differ from these estimates.
Investment in Securities
Effective April 1, 1995, Gateway adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("FAS 115"). Under FAS 115, Gateway is
required to categorize its debt securities as held-to-maturity,
available-for-sale or trading securities, dependent upon Gateway's
intent in holding the securities. Gateway's intent is to hold all
of its debt securities (U. S. Treasury Security Strips) until
maturity and to use these reserves to fund Gateway's ongoing
operations. Interest income is recognized ratably on the U.S.
Treasury Strips using the effective yield to maturity.
Offering and Commission Costs
Offering and commission costs were charged against Limited
Partners' Equity upon the admission of Limited Partners.
Income Taxes
No provision for income taxes has been made in these financial
statements, as income taxes are a liability of the partners rather
than of Gateway.
Reclassifications
For comparability, the 1996 and 1995 figures have been
reclassified, where appropriate, to conform with the financial
statement presentation used in 1997.
NOTE 3 - INVESTMENT IN SECURITIES:
The March 31, 1997 Balance Sheet includes Investments in
Securities equal to $2,349,025 ($353,436 and $1,995,589). These
investments consist of U. S. Treasury Security Strips at their
cost, plus accreted interest income of $933,575. The estimated
market value at March 31, 1997 of these debt securities is
$2,488,791 resulting in a gross unrealized gain of $139,766.
As of March 31, 1997, the cost and accreted interest by
contractual maturities is as follows:
Due within 1 year $ 353,436
After 1 year through 5 years 1,317,113
After 5 years through 10 years 678,476
----------
Total Amount Carried on Balance Sheet $2,349,025
==========
NOTE 4 - RELATED PARTY TRANSACTIONS:
The Payable to General Partners primarily represents the asset
management fees owed to the General Partners at the end of the
period. It is unsecured, due on demand and, in accordance with the
limited partnership agreement, non-interest bearing. Within the
next 12 months, the Managing General Partner does not intend to
demand payment on the portion of Asset Management Fees payable
classified as long-term on the Balance Sheet.
The General Partners and affiliates are entitled to compensation
and reimbursement for costs and expenses as follows:
Asset Management Fee - The Managing General Partner is entitled to
an annual asset management fee equal to 0.45% of the aggregate cost
of Gateway's interest in the projects owned by the Project
Partnerships. The asset management fee will be paid only after all
other expenses of Gateway have been paid. These fees are included
in the Statements of Operations. Totals incurred for the years
ended March 31, 1997, 1996 and 1995 were $502,017, $502,333 and
$503,482, respectively.
General and Administrative Expenses - Raymond James Tax Credit
Funds, Inc., the Managing General Partner, is reimbursed for
general and administrative expenses of Gateway on an accountable
basis. These expenses are included in the Statements of
Operations. Totals incurred for the years ended March 31, 1997,
1996 and 1995 were $25,316, $25,447 and $31,168, respectively.
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT
A summary of the property, plant and equipment is as follows at
December 31, 1996:
Accumulated Book
Cost Depreciation Value
----------- ----------- -----------
Land $ 32,000 $ 0 $ 32,000
Buildings 932,287 250,002 682,285
Furniture and Appliances 18,608 18,211 397
----------- ---------- ----------
Net Book Value $ 982,895 $ 268,213 $ 714,682
=========== ========== ==========
NOTE 6 - MORTGAGE NOTE PAYABLE
The mortgage note payable is the balance due on the note dated
May 10, 1989 in the amount of $829,545. The loan is at a stated
interest rate of 9.5% for a period of 50 years, the loan also
contains a provision for an interest subsidy which reduces the
effective interest rate to 2.4%. At December 31, 1996 the
development was in financial trouble and RHS ("Rural Housing
Services") had adjusted loan payments to $700 per month for 24
months beginning October 1, 1996 through September 30, 1998. These
payments are expected to pay the interest due during this period
and no reduction to principal will occur. If the development is in
compliance with the terms of the subsidy agreement the monthly
payments are expected to be $1,760 beginning October 1, 1998.
Expected maturities of the mortgage note payable are as follows:
Year Ending Amount
----------- ------
12/31/97 $ 0
12/31/98 342
12/31/99 1,391
12/31/00 1,424
12/31/01 1,459
Thereafter 818,281
-----------
Total $ 822,897
===========
NOTE 7 - TAXABLE INCOME (LOSS):
The following is a reconciliation between Net Loss as described
in the financial statements and the Partnership loss for tax
purposes:
1997 1996 1995
---- ---- ----
Net Loss per Financial
Statements $ (1,766,212) $ (1,507,296) $ (2,441,636)
Equity in Losses of Project
Partnerships for tax purposes
in excess of losses for
financial statement
purposes (417,417) (919,755) (89,161)
Losses suspended for financial
reporting purposes (1,081,456) (660,883) (569,854)
Adjustments to convert March 31,
fiscal year end to
December 31, taxable year
end 21,703 37,073 (56,810)
Items Expensed for Financial
Statement purposes not
expensed for Tax purposes:
Asset Management Fee 196,393 208,040 249,234
Amortization Expense 11,468 (13,070) 63,028
------------- ------------- -------------
Partnership loss for tax
purposes as of
December 31 $ (3,035,521) $ (2,855,891) $ (2,845,199)
============= ============= =============
Federal Low Income December 31, December 31, December 31,
Housing Tax Credits 1996 1995 1994
------------- ------------ ------------
$ 3,842,287 $ 3,830,702 $ 3,828,025
============= ============= =============
The Partnership's Investment in Project Partnerships is
approximately $6,300,000 higher for financial reporting purposes
than for tax return purposes because (i) annual tax depreciation
expense is higher than financial depreciation, (ii) certain
expenses are not deductible for tax return purposes and (iii)
losses are suspended for financial purposes but not for tax return
purposes.
NOTE 8 - INVESTMENTS IN PROJECT PARTNERSHIPS:
As of March 31, 1997, the Partnership owned a 99% limited partner
ownership interest in 81 Project Partnerships, excluding the
Combined Entity at March 31, 1997, which own and operate
government assisted multi-family housing complexes.
The following is a summary of Investments in Project
Partnerships, excluding the Combined Entity at March 31, 1997:
March 31, March 31,
1997 1996
--------- ---------
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships) $ 18,061,129 $ 18,212,885
Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1) (64,627) (67,517)
Cumulative equity in losses of
Project Partnerships (2) (14,741,418) (13,637,061)
Cumulative distributions received
from Project Partnerships (497,286) (410,013)
Acquisition fees and expenses 2,254,715 2,254,715
Accumulated amortization of
acquisition fees and expenses (450,389) (417,359)
------------- -------------
Investments in
Project Partnerships $ 4,562,124 $ 5,935,650
============ =============
(1) Includes amounts representing the excess of purchase price over
the book value of the underlying assets of the Project
Partnerships. At March 31, 1997 these excess costs were $566,298
and at March 31, 1996 these excess costs were $579,459.
(2) In accordance with the Partnership's accounting policy to not
carry Investments in Project Partnerships below zero, cumulative
suspended losses of $2,821,826 for the period ended March 31, 1997
and cumulative suspended losses of $1,740,370 for the year ended
March 31, 1996 are not included.
NOTE 8 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):
In accordance with the Partnership's policy of presenting the
financial information of the Project Partnerships, excluding the
Combined Entity beginning on the date of combination, on a three
month lag, below is the summarized financial information for the
Series' Project Partnerships as of December 31 of each year:
1997 1996 1995
SUMMARIZED BALANCE SHEETS ----------- ---------- --------------
Assets:
Current assets $ 8,640,544 $ 8,116,228 $ 7,705,141
Investment properties,
net 86,108,645 90,190,043 92,976,272
Other assets 270,537 313,200 370,219
------------- ------------- -------------
Total assets $ 95,019,726 $ 98,619,471 $101,051,632
============= ============= =============
Liabilities and Partners' Equity
Current liabilities $ 2,879,571 $ 2,902,474 $ 3,022,016
Long-term debt 93,255,821 94,360,342 94,618,092
------------- ------------- -------------
Total liabilities 96,135,392 97,262,816 97,640,108
Partners' Equity
Limited Partner (101,396) 2,339,568 4,152,333
General Partners (1,014,270) (982,913) (740,809)
------------- ------------- -------------
(1,115,666) 1,356,655 3,411,524
Total liabilities and
partners' equity $ 95,019,726 $ 98,619,471 $101,051,632
============= ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income $ 16,964,448 $ 16,868,404 $ 16,646,882
Expenses:
Operating expenses 7,365,924 6,968,042 6,607,610
Interest expense 8,388,303 8,471,083 8,575,691
Depreciation and
amortization 3,685,935 3,316,673 4,137,837
------------- ------------- -------------
Total expenses 19,440,161 18,755,798 19,321,138
Net loss $ (2,475,713) $ (1,887,394) $ (2,674,256)
============= ============= =============
Other partners' share
of net loss $ (28,630) $ (90,946) $ (15,760)
Partnership's share
of net loss $ (2,447,083) $ (1,796,448) $ (2,658,496)
Suspended loss 1,081,456 660,883 569,854
Equity in Loss of ------------- ------------- -------------
Project Partnerships $ (1,365,627) $ (1,135,565) $ (2,088,642)
============= ============= =============
As of December 31, 1996 and 1995, the largest Project Partnership
constituted 6.4% and 7.3% of the combined total assets and combined
total revenues.
Item 9. Disagreements on Accounting and Financial Disclosures
None.
PART III
Item 10. Directors and Executive Officers of Gateway
Gateway has no directors or executive officers. Gateway's
affairs are managed and controlled by the Managing General Partner.
Certain information concerning the directors and officers of the
Managing General Partner are set forth below.
Raymond James Tax Credit Funds, Inc. - Managing General Partner
Raymond James Tax Credit Funds, Inc. is the Managing General
Partner and is responsible for decisions pertaining to the
acquisition and sale of Gateway's interests in the Project
Partnerships and other matters related to the business operations
of Gateway. The officers and directors of the Managing General
Partner are as follows:
Ronald M. Diner, age 53, is President and a Director. He is
a Senior Vice President of Raymond James & Associates, Inc.,
with whom he has been employed since June 1983. Mr. Diner
received an M.B.A. degree from Columbia University (1968) and
a B.S. degree from Trinity College (1966). Prior to joining
Raymond James & Associates, Inc., he managed the broker-dealer
activities of Pittway Real Estate, Inc., a real estate
development firm. He was previously a loan officer at Marine
Midland Realty Credit Corp., and spent three years with
Common, Dann & Co., a New York regional investment firm. He
has served as a member of the Board of Directors of the
Council for Rural Housing and Development, a national
organization of developers, managers and syndicators of
properties developed under the RECD Section 515 program, and
is a member of the Board of Directors of the Florida Council
for Rural Housing and Development. Mr. Diner has been a
speaker and panel member at state and national seminars
relating to the low-income housing credit.
Alan L. Weiner, age 36, is a Vice President and a Director.
He is a Senior Vice President of Raymond James & Associates,
Inc. which he joined in 1983. Mr. Weiner received an M.B.A.
from the Wharton Business School (1983) and is a Phi Beta
Kappa graduate of the University of Florida (1981), where he
received a B.S. with high honors.
J. Davenport Mosby, age 41, is a Vice President and a Director.
He is a Senior Vice President of Raymond James & Associates,
Inc. which he joined in 1982. Mr. Mosby received an MBA from
the Harvard Business School (1982). He graduated magna cum
laude with a BA from Vanderbilt University where he was elected
to Phi Beta Kappa. Mr. Mosby is the head of the real estate
investment banking group and the Limited Partnership Trading
Desk.
Teresa L. Barnes, age 50, is a Vice President. Ms. Barnes is
a Senior Vice President of Raymond James & Associates, Inc.,
which she joined in 1969.
Sandra L. Furey, age 34, is Secretary, Treasurer. Ms. Furey
has been employed by Raymond James & Associates, Inc. since
1980 and currently serves as Closing Administrator for the
Gateway Tax Credit Funds.
Raymond James Partners, Inc. -
Raymond James Partners, Inc. has been formed to act as the
general partner, with affiliated corporations, in limited
partnerships sponsored by Raymond James Financial, Inc. Raymond
James Partners, Inc. is a general partner for purposes of assuring
that Gateway and other partnerships sponsored by affiliates have
sufficient net worth to meet the minimum net worth requirements of
state securities administrators.
Information regarding the officers and directors of Raymond James
Partners, Inc., is included on pages 58 and 59 of the Prospectus
under the section captioned "Management" (consisting of pages 56
through 59 of the Prospectus) which is incorporated herein by
reference.
Item 11. Executive Compensation
Gateway has no directors or officers.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Neither of the General Partners, nor their directors and
officers, own any units of the outstanding securities of Gateway as
of March 31, 1997.
Gateway is a Limited Partnership and therefore does not have
voting shares of stock. To the knowledge of Gateway, no person
owns of record or beneficially, more than 5% of Gateway's
outstanding units.
Item 13. Certain Relationships and Related Transactions
Gateway has no officers or directors. However, various kinds of
compensation and fees are payable to the General Partners and their
affiliates during the organization and operations of Gateway.
Additionally, the General Partners will receive distributions from
Gateway if there is cash available for distribution or residual
proceeds as defined in the Partnership agreement. The amounts and
kinds of compensation and fees are described on pages 13 to 15 of
the Prospectus under the caption "Management Compensation", which
is incorporated herein by reference. See Note 3 of Notes to
Financial Statements in item 8 of this Annual Report on Form 10-K
for amounts accrued or paid to the General Partners and their
affiliates during the years ended March 31, 1997, 1996 and 1995.
The Payable to General Partners primarily represents the asset
management fees owed to the General Partners at the end of the
period. It is unsecured, due on demand and, in accordance with the
limited partnership agreement, non-interest bearing. Within the
next 12 months, the Managing General Partner does not intend to
demand payment on the portion of Asset Management Fees payable
classified as long-term on the Balance Sheet.
The General Partners and affiliates are entitled to compensation
and reimbursement for costs and expenses as follows:
Asset Management Fee - The Managing General Partner is entitled to
an annual asset management fee equal to 0.45% of the aggregate cost
of Gateway's interest in the projects owned by the Project
Partnerships. The asset management fee will be paid only after all
other expenses of Gateway have been paid. These fees are included
in the Statements of Operations. Totals incurred for the years
ended March 31, 1997, 1996 and 1995 were $502,017, $502,333 and
$503,482, respectively.
General and Administrative Expenses - Raymond James Tax Credit
Funds, Inc., the Managing General Partner, is reimbursed for
general and administrative expenses of Gateway on an accountable
basis. These expenses are included in the Statements of
Operations. Totals incurred for the years ended March 31, 1997,
1996 and 1995 were $25,316, $25,447 and $31,168, respectively.
Schoonover Boyer Gettman & Assoc.
110 Northwoods Blvd. Suite 200
Worthington, OH 43235
PHONE: 614-888-8000
FAX: 614-888-8634
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Crosstown Seniors Limited Dividend
Housing Association Limited Partnership
(A Michigan limited partnership)
Kalamazoo, MI
We have audited the accompanying balance sheets of Crosstown
Seniors Limited Dividend Housing Association Limited Partnership (A
Michigan limited partnership), as of December 31, 1996 and 1995,
and the related statements of income, partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Crosstown Seniors Limited Dividend Housing Association Limited
Partnership as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
/s/ Schoonover Boyer Gettman & Assoc.
Certified Public Accountants
January 25, 1997
D W P
Certified Public Accountants
9683 S Golden Eagle Ave.
Highlands Ranch, CO 80126
PHONE: 303-683-8019
FAX: 303-683-8009
INDEPENDENT AUDITORS' REPORT
----------------------------
Partners
Clayfed Apartments, Ltd.
(A Colorado Limited Partnership)
Denver, CO
We have audited the accompanying balance sheets of Clayfed
Apartments, HUD Project No. C099-K094-007 (A Colorado Limited
Partnership), as of December 31, 1996, and the related statements
of profit and loss, changes in partners' deficit and cash flows for
the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Clayfed
Apartments, HUD Project No. C099-K094-007, at December 31, 1996
and the results of its operations and changes in Partners' deficit
and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated February 18, 1997 on our consideration of the
Clayfed Apartments internal control structure, a report dated
February 18, 1997 on its compliance with laws and regulations, a
report dated February 18, 1997 on its compliance with major HUD
program requirements, a report dated February 18, 1997 on its
compliance with nonmajor HUD program requirements and a report
dated February 18, 1997 on its compliance with Affirmative Fair
Housing requirements.
The accompanying supplementary information on pages 11 to 19 is
presented for purposes of additional analysis which is not a
required part of the basic financial statements of Clayfed
Apartments, HUD Project No. C099-K094-007. Such information has
been subjected to the auditing procedures applied in the audit of
the basic financial statements, and in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Donald W. Prosser, P.C.
Certified Public Accountant
Denver, Colorado
February 18, 1997
D W P
Certified Public Accountants
9683 S Golden Eagle Ave.
Highlands Ranch, CO 80126
PHONE: 303-683-8019
FAX: 303-683-8009
INDEPENDENT AUDITORS' REPORT
----------------------------
Partners
Clayfed Apartments, Ltd.
(A Colorado Limited Partnership)
Denver, CO
We have audited the accompanying balance sheets of Clayfed
Apartments, HUD Project No. C099-K094-007 (A Colorado Limited
Partnership), as of December 31, 1995, and the related statements
of profit and loss, changes in partners' deficit and cash flows for
the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Clayfed
Apartments, HUD Project No. C099-K094-007, at December 31, 1995
and the results of its operations and changes in Partners' deficit
and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 31, 1996 on our consideration of the
Clayfed Apartments internal control structure, a report dated
January 31, 1996 on its compliance with laws and regulations, a
report dated January 31, 1996 on its compliance with major HUD
program requirements, a report dated January 31, 1996 on its
compliance with nonmajor HUD program requirements and a report
dated January 31, 1996 on its compliance with Affirmative Fair
Housing requirements.
The accompanying supplementary information on pages 11 to 19 is
presented for purposes of additional analysis which is not a
required part of the basic financial statements of Clayfed
Apartments, HUD Project No. C099-K094-007. Such information has
been subjected to the auditing procedures applied in the audit of
the basic financial statements, and in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Donald W. Prosser, P.C.
Certified Public Accountant
Denver, Colorado
January 31, 1996
D W P
Certified Public Accountants
9683 S Golden Eagle Ave.
Highlands Ranch, CO 80126
PHONE: 303-683-8019
FAX: 303-683-8009
INDEPENDENT AUDITORS' REPORT
----------------------------
The Partners
Westside Apartments, Ltd.
(A Colorado Limited Partnership)
Denver, CO
We have audited the accompanying balance sheet of Westside
Apartments, Ltd., HUD Project No. C099-K001-004 (A Colorado Limited
Partnership), as of December 31, 1996 and the related statements of
profit and loss, changes in partners' deficit and cash flows for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Westside Apartments, Ltd., HUD Project No. C099-K001-004, at
December 31, 1996 and the results of its operations and changes in
Partners' deficit and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated February 19, 1997 on our consideration of the
Clayfed Apartments internal control structure, a report dated
February 19, 1997 on its compliance with laws and regulations, a
report dated February 19, 1997 on its compliance with major HUD
program requirements, a report dated February 19, 1997 on its
compliance with nonmajor HUD program requirements and a report
dated February 19, 1997 on its compliance with Affirmative Fair
Housing requirements.
The accompanying supplementary information on pages 11 to 19 is
presented for purposes of additional analysis which is not a
required part of the basic financial statements of Westside
Apartments, Ltd., HUD Project No. C099-K001-004. Such information
has been subjected to the auditing procedures applied in the audit
of the basic financial statements, and in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Donald W. Prosser, P.C.
Certified Public Accountant
Denver, Colorado
February 18, 1997
D W P
Certified Public Accountants
9683 S Golden Eagle Ave.
Highlands Ranch, CO 80126
PHONE: 303-683-8019
FAX: 303-683-8009
INDEPENDENT AUDITORS' REPORT
----------------------------
The Partners
Westside Apartments, Ltd.
(A Colorado Limited Partnership)
Denver, CO
We have audited the accompanying balance sheet of Westside
Apartments, Ltd., HUD Project No. C099-K001-004 (A Colorado Limited
Partnership), as of December 31, 1995 and the related statements of
profit and loss, changes in partners' deficit and cash flows for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Westside Apartments, Ltd., HUD Project No. C099-K001-004, at
December 31, 1995 and the results of its operations and changes in
Partners' deficit and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 31, 1996 on our consideration of the
Clayfed Apartments internal control structure, a report dated
January 31, 1996 on its compliance with laws and regulations, a
report dated January 31, 1996 on its compliance with major HUD
program requirements, a report dated January 31, 1996 on its
compliance with nonmajor HUD program requirements and a report
dated January 31, 1996 on its compliance with Affirmative Fair
Housing requirements.
The accompanying supplementary information on pages 11 to 19 is
presented for purposes of additional analysis which is not a
required part of the basic financial statements of Westside
Apartments, Ltd., HUD Project No. C099-K001-004. Such information
has been subjected to the auditing procedures applied in the audit
of the basic financial statements, and in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Donald W. Prosser, P.C.
Certified Public Accountant
Denver, Colorado
January 31, 1996
Larry C. Stemen CPA & Associates
380 South Fifth Street, The Americana - Suite 1
Columbus, OH 43215
PHONE: 614-224-0955
FAX: 614-224-0971
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Madison, Ltd.
(A Limited Partnership)
DBA Madison Woods Apartments
Madison, OH
We have audited the accompanying balance sheets of Madison, Ltd. (A
Limited Partnership), DBA Madison Woods Apartments, FmHA Case No.
41-093-341595553, as of December 31, 1996 and 1995, and the related
statements of income, changes in partners' equity (deficit) and
cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department
of Agriculture, Farmers Home Administration 'Audit Program' issued
in December 1989. Those standards and the Audit Program require
that we plan and perform our audits to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Madison, Ltd. (A Limited Partnership) DBA Madison Woods Apartments,
FmHA Case No. 41-093-341595553, at December 31, 1996 and 1995, and
the results of its operations, and changes in partners' equity
(deficit), and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental data
included in this report (shown on pages 14-18) are presented for
the purpose of additional analysis and are not a required part of
the financial statements of FmHA Case No. 41-093-341595553. Such
information has been subjected to the same auditing procedures
applied in the audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also
issued a report dated February 4, 1997 on our consideration of
Madison, Ltd. internal control structure and a report dated
February 4, 1997 on its compliance with specific requirements
applicable to Rural Development Services programs.
/s/ Larry C. Stemen CPA & Associates
Certified Public Accountants
Columbus, Ohio
February 4, 1997
Larry C. Stemen CPA & Associates
380 South Fifth Street, The Americana - Suite 1
Columbus, OH 43215
PHONE: 614-224-0955
FAX: 614-224-0971
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Middlefield, Limited
(A Limited Partnership)
DBA Lakeview Village II
Hudson, OH
We have audited the accompanying balance sheets of Middlefield,
Limited (A Limited Partnership), DBA Lakeview Village II, FmHA Case
No. 41-028-341618469, as of December 31, 1996 and 1995, and the
related statements of income, changes in partners' equity (deficit)
and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department
of Agriculture, Farmers Home Administration 'Audit Program' issued
in December 1989. Those standards require that we plan and perform
our audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Middlefield, Limited. (A Limited Partnership) DBA Lakeview Village
II, FmHA Case No. 41-028-341618469, at December 31, 1996 and 1995,
and the results of its operations, and changes in partners' equity
(deficit), and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental data
included in this report (shown on pages 14-18) are presented for
the purpose of additional analysis and are not a required part of
the financial statements of FmHA Case No. 41-028-341618469. Such
information has been subjected to the same auditing procedures
applied in the audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also
issued a report dated February 4, 1997 on our consideration of
Middlefield, Limited's internal control structure and a report
dated February 4, 1997 on its compliance with specific requirements
applicable to Rural Development Services programs.
/s/ Larry C. Stemen CPA & Associates
Certified Public Accountants
Columbus, Ohio
February 4, 1997
Goddard, Henderson, Godbee & Nichols, P.C.
3488 North Valdosta Road
Valdosta, GA 31604
PHONE: 912-245-6040
FAX: 912-245-1669
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners of
Ashburn Housing, Ltd., L.P.
Valdosta, Georgia
We have audited the accompanying balance sheets of Ashburn Housing,
Ltd., L.P. (A Limited Partnership), Federal ID No.: 58-1830643, as
of December 31, 1996 and 1995, and the related statements of
income, partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Ashburn
Housing, Ltd., L.P. (A Limited Partnership) as of December 31, 1996
and 1995, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 24, 1997 on our consideration of
Ashburn Housing, Ltd.'s internal control structure and a report
dated January 24, 1997 on its compliance with laws and regulations.
/s/ Goddard, Henderson, Godbee & Nichols, P.C.
Certified Public Accountants
January 24, 1997
Goddard, Henderson, Godbee & Nichols, P.C.
3488 North Valdosta Road
Valdosta, GA 31604
PHONE: 912-245-6040
FAX: 912-245-1669
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Buena Vista Housing, Ltd.
(A Limited Partnership)
Valdosta, GA
We have audited the accompanying balance sheets of Buena Vista
Housing, Ltd. L.P. (A Limited Partnership), Federal ID No.: 58-
1830642, as of December 31, 1996 and 1995, and the related
statements of income, partners' equity (deficit) and cash flows for
the years then ended. The financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Buena
Vista Housing, Ltd. as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 24, 1997 on our consideration of the
Buena Vista Housing Ltd.'s internal control structure and a report
dated January 24, 1997 on its compliance with laws and regulations.
/s/ Goddard, Henderson, Godbee & Nichols, P.C.
Certified Public Accountants
January 24, 1997
Goddard, Henderson, Godbee & Nichols, P.C.
3488 North Valdosta Road
Valdosta, GA 31604
PHONE: 912-245-6040
FAX: 912-245-1669
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Cuthbert Elderly Housing, Ltd.
Valdosta, GA
We have audited the accompanying balance sheets of Cuthbert Elderly
Housing, Ltd. (A Limited Partnership), Federal ID No.: 58-1830589,
as of December 31, 1996 and 1995, and the related statements of
income, partners' equity (deficit) and cash flows for the years
then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Cuthbert Elderly Housing, Ltd. as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 24, 1997 on our consideration of the
Cuthbert Elderly Housing Ltd.'s internal control structure and a
report dated January 24, 1997 on its compliance with laws and
regulations.
/s/ Goddard, Henderson, Godbee & Nichols, P.C.
Certified Public Accountants
January 24, 1997
Goddard, Henderson, Godbee & Nichols, P.C.
3488 North Valdosta Road
Valdosta, GA 31604
PHONE: 912-245-6040
FAX: 912-245-1669
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Hannah's Mill Apartments, Ltd.
Valdosta, GA
We have audited the accompanying balance sheets of Hannah's Mill
Apartments, Ltd. (A Limited Partnership), Federal ID No.: 58-
1786726, as of December 31, 1996 and 1995, and the related
statements of income, partners' equity (deficit) and cash flows for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Hannah's Mill Apartments, Ltd. as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 24, 1997 on our consideration of
Hannah's Mill Apartments, Ltd.'s internal control structure and a
report dated January 24, 1997 on its compliance with laws and
regulations.
/s/ Goddard, Henderson, Godbee & Nichols, P.C.
Certified Public Accountants
January 24, 1997
Goddard, Henderson, Godbee & Nichols, P.C.
3488 North Valdosta Road
Valdosta, GA 31604
PHONE: 912-245-6040
FAX: 912-245-1669
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Milton Elderly Housing, Ltd.
Valdosta, GA
We have audited the accompanying balance sheets of Milton Elderly
Housing, Ltd. (A Limited Partnership), Federal ID No.: 59-2911560,
as of December 31, 1996 and 1995, and the related statements of
income, partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Milton
Elderly Housing, Ltd. as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 24, 1997 on our consideration of
Milton Elderly Housing, Ltd.'s internal control structure and its
compliance with laws and regulations.
/s/ Goddard, Henderson, Godbee & Nichols, P.C.
Certified Public Accountants
January 24, 1997
Goddard, Henderson, Godbee & Nichols, P.C.
3488 North Valdosta Road
Valdosta, GA 31604
PHONE: 912-245-6040
FAX: 912-245-1669
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Winder Apartments, Ltd.
Valdosta, GA
We have audited the accompanying balance sheets of Winder
Apartments, Ltd. (A Limited Partnership), Federal ID No.: 58-
1786693, as of December 31, 1996 and 1995, and the related
statements of income, partners' (deficit) and cash flows for the
years then ended. The financial statements are the responsibility
of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Winder
Apartments, Ltd. as of December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated January 24, 1997 on our consideration of
Winder Apartments, Ltd.'s internal control structure and a report
dated January 24, 1997 on its compliance with laws and regulations.
/s/ Goddard, Henderson, Godbee & Nichols, P.C.
Certified Public Accountants
January 24, 1997
Donald W. Causey, CPA, P.C.
516 Walnut Street - P.O. Box 775
Gadsden, AL 35902
PHONE: 205-543-3707
FAX: 205-543-9800
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
Sylacauga Garden Apartments III, Ltd.
Sylacauga, AL
I have audited the accompanying balance sheets of Sylacauga Garden
Apartments III, Ltd. (A Limited Partnership), RHS Project No.: 01-
061-630953708 as of December 31, 1996 and 1995, and the related
statements of operations, partners' deficit and cash flows for the
years then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility
is to express an opinion on these financial statements based on my
audits.
I conducted the audits in accordance with generally accepted
auditing Standards and Government Auditing Standards issued by the
Comptroller General of the United States, and the U.S. Department
of Agriculture, Farmers Home Administration Audit Program. Those
standards require that I plan and perform the audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. I believe that the audits provide a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Sylacauga Garden Apartments III, Ltd., RHS Project No.:01-061-
630953708 as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on pages 10 through 13 is presented for purposes of
additional analysis and is not a required part of the basic
financial statements. The supplemental information presented in
the Multiple Family Housing Borrower Balance Sheet (Form FmHA 1930-
8) Parts I through II for the year ended December 31, 1996 and
1995, is presented for purposes of complying with the requirements
of the Rural Housing Services and is also not a required part of
the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic
financial statements and, in my opinion is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
In accordance with Government Auditing Standards, I have also
issued a report dated February 19, 1997 on my consideration of
Sylacauga Garden Apartments III, Ltd., internal control structure
and a report dated February 19, 1997 on its compliance with laws
and regulations.
/s/ Donald W. Causey, CPA, P.C.
Certified Public Accountants
February 19, 1997
Cole, Evans & Peterson
Fifth Floor Travis Place - P.O. Drawer 1768
Shreveport, LA 71166-1768
PHONE: 318-222-8367
FAX: 318-425-4101
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Partners
River Road Apartments, A Louisiana Partnership in Commendam
Mansfield, Louisiana
We have audited the accompanying balance sheets of River Road
Apartments, A Louisiana Partnership in Commendam at December 31,
1996 and December 31, 1995, and the related statements of income,
partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and 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 assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of River
Road Apartments, A Louisiana Partnership in Commendam at December
31, 1996 and December 31,1995, and the results of its operations
and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated February 5, 1997 on our consideration of
River Road Apartments, A Louisiana Partnership in Commendam's
internal control structure and a report dated February 5, 1997 on
its compliance with laws and regulations.
/s/ Cole, Evans & Peterson
Certified Public Accountants
February 5, 1997
Baird, Kurtz, & Dobson CPA
5000 Rogers Avenue, Suite 700
Ft. Smith, AR 72903
PHONE: 501-452-1040
FAX: 501-452-5542
INDEPENDENT AUDITORS' REPORT
----------------------------
Partners
Sun Valley Apartments, A Division of Augusta Properties
(A Limited Partnership)
Fort Smith, Arkansas
We have audited the accompanying balance sheets of SUN VALLEY
APARTMENTS, A DIVISION OF AUGUSTA PROPERTIES, (A LIMITED
PARTNERSHIP), as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' equity (deficit) and
cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing Standards and the standards for financial audits contained
in Government Auditing Standards issued by the U.S. General
Accounting Office. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of SUN
VALLEY APARTMENTS, A DIVISION OF AUGUSTA PROPERTIES, (A LIMITED
PARTNERSHIP), as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued our reports dated February 21, 1997 on our consideration of
the internal control structure of SUN VALLEY APARTMENTS, A DIVISION
OF AUGUSTA PROPERTIES, (A LIMITED PARTNERSHIP), and on its
compliance with certain provisions of laws, regulations, contracts
and grants.
/s/ Baird, Kurtz, & Dobson CPA
February 21, 1997
Baird, Kurtz, & Dobson CPA
5000 Rogers Avenue, Suite 700
Ft. Smith, AR 72903
PHONE: 501-452-1040
FAX: 501-452-5542
INDEPENDENT AUDITORS' REPORT