Attached files
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORT
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
DECEMBER 31, 2007 and 2006
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT 3
FINANCIAL STATEMENTS:
BALANCE SHEETS 4
STATEMENTS OF OPERATIONS 6
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL 10
STATEMENTS OF CASH FLOWS 11
NOTES TO FINANCIAL STATEMENTS 12
PAILET, MEUNER AND LEBLANC, L.L.P.
Certified Public Accountants
Management Consultants
INDEPENDENT AUDITOR'S REPORT
To the Partners
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
We have audited the accompanying balance sheets of COLONIAL VILLAGE
ROSEVILLE, (A California Limited Partnership), as of December 31, 2007 and 2006,
and the related statements of operations, changes in partners' capital and cash
flows for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with the Standards of the Public
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The partnership has
determined that it is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
partnership's internal control over financial reporting. Accordingly, we express
no such opinion. 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 COLONIAL VILLAGE
ROSEVILLE, (A California Limited Partnership), as of December 31, 2007 and 2006,
and the results of its operations, changes in partners' capital and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Pailet, Meunier and LeBlanc, L.L.P.
---------------------------------------
Metairie, Louisiana
August 21, 2009
3421 N. Causeway Blvd., Suite 701 o Metairie, LA 70002 |X|
Telephone (504) 837-0770 o Few (504) 837-7102
Member of
IGAF Member Piano in Principal Cities o PCAOB --
Public Company Accounting Oversight Board
AICPA: Center for Public Company Audit firms (SEC)
o Governmental Audit Quality Center o Private
Companies Practice Section (PCPS)
COLONIAL VILLAGE ROSEVILLE (A
California Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 2007 AND 2006
2007 2006
----------- -----------
ASSETS
Current assets
Cash $ 116,270 $ 98,823
Prepaid expense 6,454 5,646
----------- -----------
Total current assets 122,724 104,469
----------- -----------
Restricted deposits and funded reserves
Tenants' security deposits 31,836 30,885
Replacement reserve escrow 102,789 145,363
----------- -----------
Total restricted deposits and funded reserves 134,625 176,248
----------- -----------
Property and equipment, at cost
Land 315,303 315,303
Building 4,873,899 4,865,200
Equipment 177,478 177,478
----------- -----------
5,366,680 5,357,981
Less: accumulated depreciation (2,441,860) (2,263,251)
----------- -----------
Total property and equipment 2,924,820 3,094,730
----------- -----------
Other assets
Deferred charges, less accumulated
amortization of $65,366 and $60,153 68,056 73,269
----------- -----------
Total other assets 68,056 73,269
----------- -----------
Total assets $ 3,250,225 $ 3,448,716
=========== ===========
See accompanying notes to financial statements
4
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 2007 AND 2006
2007 2006
---------- ----------
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Accounts payable $ 5,792 $ 11,052
Accounts payable - general partner 11,319 11,240
Current maturities of long term debt 54,524 50,904
Accrued expense 800 800
---------- ----------
Total current liabilities 72,435 73,996
---------- ----------
Deposit and prepayment liabilities
Tenants' security deposits 20,475 21,300
Prepaid rents 3,858 3,751
---------- ----------
Total deposit and prepayment liabilities 24,333 25,051
---------- ----------
Long-term debt
Mortgage payable, less current maturities 1,744,764 1,799,288
---------- ----------
Total long-term debt 1,744,764 1,799,288
---------- ----------
Commitment
Partners' capital 1,408,693 1,550,381
---------- ----------
Total liabilities and partners' capital $3,250,225 $3,448,716
========== ==========
See accompanying notes to financial statements
5
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
DECEMBER 31, 2007 AND 2006
2007 2006
-------- --------
Rental income
Apartments $554,364 $536,738
-------- --------
Net rental revenue 554,364 536,738
-------- --------
Financial revenue
Income from investments - replacement reserve 6,209 12,002
Income from investments - operating reserve 496 540
-------- --------
Total financial revenue 6,705 12,542
-------- --------
Other Revenue
Laundry and vending 11,431 8,901
NSF and late charges 55 365
Damage and cleaning fees 4,880 6,460
Other revenue 4,160 51
-------- --------
Total other revenue 20,526 15,777
-------- --------
Total revenue 581,595 565,057
-------- --------
See accompanying notes to financial statements
6
COLONIAL VILLAGE ROSEVILLE (A
California Limited Partnership)
STATEMENTS OF OPERATIONS
DECEMBER 31, 2007 AND 2006
2007 2006
-------- --------
Operating expenses
Renting expenses
Advertising $ 2,561 $ 2,917
Miscellaneous renting expenses 88 --
-------- --------
Total renting expenses 2,649 2,917
-------- --------
Administrative expenses
Office supplies 391 3,981
Management fee 38,304 36,288
Manager's salary 27,488 24,686
Manager rent free unit 11,344 11,109
Legal expense -- 355
Audit expense 7,500 6,500
Telephone and answering service 1,792 1,238
Bad debts 10,193 12,025
Miscellaneous administrative expenses 11,889 12,525
-------- --------
Total administrative expenses 108,901 108,707
-------- --------
Utilities expense
Electricity 5,504 6,151
Water 4,106 4,332
Gas 3,899 3,692
Sewer 16,510 12,437
-------- --------
Total utilities expense 30,019 26,612
-------- --------
See accompanying notes to financial statements
7
COLONIAL VILLAGE ROSEVILLE (A
California Limited Partnership)
STATEMENTS OF OPERATIONS
DECEMBER 31, 2007 AND 2006
2007 2006
-------- --------
Operating and maintenance expense
Janitor and cleaning payroll $ 7,772 $ 6,376
Janitor and cleaning supplies 734 891
Janitor and cleaning contract 870 750
Exterminating payroll I contract 924 924
Garbage and trash removal 8,078 8,215
Grounds supplies 6,666 151
Grounds contract 14,638 15,046
Repairs payroll 26,447 25,173
Repairs material 2,753 1,909
Repairs contract 48,998 40,128
Decorating payroll / contract 1,788 671
Decorating supplies 2,384 1,700
Miscellaneous 7,422 4,282
-------- --------
Total operating and maintenance expenses 129,474 106,216
-------- --------
Taxes and insurance
Real estate taxes 535 350
Payroll taxes 5,377 5,190
Miscellaneous taxes, licenses, and permits 800 800
Property and liability insurance 8,756 7,950
Workman's compensation 6,183 10,104
Health insurance and other employee benefits 14,074 13,528
-------- --------
Total taxes and insurance 35,725 37,922
-------- --------
Total operating expenses 306,768 282,374
-------- --------
See accompanying notes to financial statements
8
COLONIAL VILLAGE ROSEVILLE (A
California Limited Partnership)
STATEMENTS OF OPERATIONS
DECEMBER 31, 2007 AND 2006
2007 2006
--------- ---------
Other expenses
Interest expense - mortgage $ 125,891 $ 129,270
Depreciation and amortization 183,822 183,956
--------- ---------
Total other expenses 309,713 313,226
--------- ---------
Total expenses 616,481 595,600
--------- ---------
Net income (loss) $ (34,886) $ (30,543)
========= =========
See accompanying notes to financial statements
9
COLONIAL VILLAGE ROSEVILLE (A
California Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
DECEMBER 31, 2007 AND 2006
Total
General Limited Partners'
Partner Partners Capital
----------- ----------- -----------
Balance - January 1, 2007 $ (136,456) $ 1,686,837 $ 1,550,381
Net Income (Loss) (349) (34,537) (34,886)
Distributions to Partners (74,762) (32,040) (106,802)
----------- ----------- -----------
Balance - December 31, 2007 $ (211,567) $ 1,620,260 $ 1,408,693
=========== =========== ===========
See accompanying notes to financial statements
10
COLONIAL VILLAGE ROSEVILLE (A
California Limited Partnership)
STATEMENTS OF CASH FLOWS
DECEMBER 31, 2007 AND 2006
2007 2006
--------- ---------
Cash flows from operating activities:
Net Income $ (34,886) $ (30,543)
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 183,822 183,956
(Increase) decrease in prepaid expenses (808) (1,093)
Increase (decrease) in accounts payable (5,260) 7,155
Increase (decrease) in prepaid rents 107 3,751
Increase (decrease) in security deposits (825) (2,250)
Increase (decrease) in accounts payable - affiliates 79 852
--------- ---------
Total adjustments 177,115 192,371
--------- ---------
Net cash provided (used) by operating activities 142,229 161,828
--------- ---------
Cash flows from investing activities:
Acquisition of property and equipment (8,699) --
(Deposit) withdrawal replacement reserve 42,574 (20,858)
(Deposit) withdrawal security deposit account (951) (1,042)
--------- ---------
Net cash provided (used) by investing activities 32,924 (21,900)
--------- ---------
Cash flows from financing activities:
Partner distributions (106,802) (106,801)
Principal payments on long-term debt (50,904) (47,524)
--------- ---------
Net cash provided (used) by financing activities (157,706) (154,325)
--------- ---------
Net increase (decrease) in cash and equivalents 17,447 (14,397)
Cash and equivalents, beginning of year 98,823 113,220
--------- ---------
Cash and equivalents, end of year $ 116,270 $ 98,823
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest expense $ 125,891 $ 129,270
========= =========
See accompanying notes to financial statements
11
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006
NOTE A - NATURE OF OPERATIONS
Colonial Village Roseville is a California Limited Partnership which was formed
in April 1993, to develop, construct, own, maintain and operate a 56-unit
multi-family apartment complex and is located in the city of Roseville,
California. The Partnership Agreement and the loan agreement with the Midland
Mortgage Company govern the major activities of the Partnership. Under the
agreements, the Partnership is required to provide low cost housing to very
low-income or lower-income households.
The Partnership has one general partner, Project Go Inc., a 501(c) (3) tax
exempt, non-profit community service organization and one investing limited
partner, WNC Housing Tax Credits III, L.P., a California limited partnership.
Partnership transactions with the partners are described in other notes to these
financial statements.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS
A summary of the Partnership's significant accounting policies consistently
applied in the preparation of the accompanying financial statements follows:
Basis of Accounting
-------------------
The Partnership prepares its financial statements on the accrual basis of
accounting consistent with accounting principles generally accepted in the
United States of America.
Capitalization and Depreciation
-------------------------------
Land, buildings and improvements are recorded at cost. Depreciation of buildings
and equipment is computed principally using the Modified Accelerated Cost
Recovery System which approximates straight-line for buildings and
double-declining balance for equipment over the following estimated useful
lives:
Years
-----
Buildings 27.5
Equipment 7
Improvements are capitalized, while 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
operations.
12
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
-------------------------
For purposes of reporting the statements of cash flows, the Partnership includes
all cash accounts which are not subject to withdrawal restrictions or penalties,
and all highly liquid debt instruments purchased with a maturity of three months
or less as cash and cash equivalents on the accompanying balance sheet.
Amortization
------------
Deferred charges are amortized over the following estimated useful lives using
the straight-line method:
Years
-----
Deferred debt expense 30
Tax monitoring fee 15
Income Taxes
------------
No provision or benefit for income taxes has been included in these financial
statements since taxable income or loss passes through to, and is reportable by,
the partners individually.
Estimates
---------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. These assumptions affect the reported amounts of
assets, liabilities and the amount of any contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from the
estimates made.
Personal Assets and Liabilities
-------------------------------
In accordance with the generally accepted method of presenting partnership
financial statements, the financial statements do not include the personal
assets and liabilities of the partners, including their obligation for income
taxes on their distributive shares of the net income of the Partnership, nor any
provision for income tax expense.
13
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SFAS NO, 144
------------
Statement of Financial Accounting Standards (SEAS) No, 144 requires that
long-lived assets and certain identifiable intangibles held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
that the carrying amount of an asset may not be recoverable. The adoption of
SFAS No. 144 has not materially affected the partnership's reported earnings,
financial condition or cash flows.
NOTE C - RESTRICTED DEPOSITS AND FUNDED RESERVES
In accordance with the Partnership Agreement and the Rider to Multifamily
Instrument with Midland Mortgage Company, the Partnership is required to
maintain a replacement reserve account. The replacement reserve account is to be
funded annually in the amount of $16,800.
NOTE D - DEFERRED CHARGES
Deferred charges as of December 31, 2007 and 2006, consist of the following:
2007 2006
--------- ---------
Deferred debt expense $ 110,462 $ 110,462
Tax credit monitoring fee 22,960 22,960
--------- ---------
133,422 133,422
Less: accumulated amortization (65,366) (60,153)
--------- ---------
$ 68,056 $ 73,269
========= =========
NOTE E - LONG-TERM DEBT
Long-Term debt consisted of a permanent loan with Midland Mortgage Company in an
original amount of $2,200,000. Under the terms of the 30-year Promissory Note
with Midland, the loan provides for an initial interest rate of 7.67% and
monthly payments of $15,640 commencing on September 1, 1995, and continuing
through August 2025. The interest rate and monthly payment will be adjusted at
year eleven (11) and year twenty-one (21), based on the Current Index plus 2.75%
and the payment will be adjusted and determined by the amount of the monthly
payment that would be sufficient to repay the note within 360
14
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006
NOTE E - LONG-TERM DEBT (CONTINUED)
months of the initial payment date. As Of December 31, 2007, the current
interest rate, and minimum monthly payment due is 6.89% and $14.732.89,
respectively.
The apartment complex is pledged as collateral for the mortgage and is secured
by deeds of trust, assignment of rents, security agreements and fixture filings
against the property.
Aggregate maturities of Long-term debt for the next five years are as follows:
Year ending December 31,
2008 $ 54,524
2009 58,402
2010 62,555
2011 67,004
2012 71,769
Thereafter 1,485,034
---------
$1,799,288
==========
NOTE F - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Management Fee
--------------
In accordance with the Management Agreement, the Partnership paid Project Go,
Inc., the general partner, management fees during 2007 and 2006 in the amounts
of $38,304 and 36,288, respectively, for services rendered in connection with
the leasing and operation of the project. The fee For its services is
approximately 6.9% of the project's rental income.
NOTE G - COMMITMENT
The Partnership entered into a Regulatory Agreement with the Tax Credit
Allocation Committee (TCAC), established under Section 50185 of the Health and
Safety Code of the State of California, Under this Agreement, the Partnership
shall maintain the project as a Qualified Low-income Housing Project for a
period of 55 consecutive taxable years beginning with 1995, the first taxable
year of the Credit Period. In exchange for this agreement, TCAC has authorized
an allocation relating to the low-income housing credit under the provisions of
Section 42 of the Internal Revenue Code.
15
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006
NOTE H - CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS
The Partnership's sole asset is Colonial Village Roseville Apartments. The
Partnership's operations are concentrated in the multifamily real estate market.
16
