Attached files
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2005 and 2004
INDEPENDENT AUDITOR'S REPORT
To the Partners
Colonial Village Roseville
(A California Limited Partnership)
Roseville, California
I have audited the accompanying balance sheets of Colonial Village Roseville (A
California Limited Partnership), as of December 31, 2005 and 2004, and the
related statements of income, changes in partners capital, 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 my audits in accordance with auditing standards generally accepted
in the United States of America. 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 my audit provides 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 Colonial Village Roseville (A
California Limited Partnership) as of December 31, 2005 and 2004, and the
results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
/S/ Bernard E. Rea, CPA
Stockton, California
February 23, 2006
1
C O N T E N T S
Page
INDEPENDENT AUDITOR'S REPORT ON
THE FINANCIAL STATEMENTS..................................................1
FINANCIAL STATEMENTS
Balance sheets..........................................................2-3
Statements of income....................................................4-7
Statements of changes in partners capital.................................8
Statements of cash flows...............................................9-10
Notes to financial statements.........................................11-14
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
BALANCE SHEETS
December 31, 2005 and 2004
ASSETS 2005 2004
--------------- ----------------
CURRENT ASSETS
Cash $ 113,220 $ 133,309
Rents receivable - - - -
Other receivables - - - -
Prepaid expense 4,553 4,429
---------------- ---------------
Total current assets $ 117,773 $ 137,738
---------------- ---------------
RESTRICTED DEPOSITS AND FUNDED RESERVES
Tenants' security deposits $ 29,843 $ 29,053
Replacement reserve escrow 124,505 104,904
---------------- ---------------
$ 154,348 $ 133,957
---------------- ---------------
PROPERTY AND EQUIPMENT, AT COST
Land $ 315,303 $ 315,303
Building 4,865,200 4,861,210
Equipment 177,478 177,478
---------------- ---------------
$ 5,357,981 $ 5,353,991
Less accumulated depreciation 2,084,508 1,905,710
---------------- ---------------
$ 3,273,473 $ 3,448,281
---------------- ---------------
OTHER ASSETS
Deferred charges, less accumulated
amortization of $54,940 and $49,727 $ 78,482 $ 83,695
---------------- ----------------
$ 78,482 $ 83,695
---------------- ----------------
$ 3,624,076 $ 3,803,671
================ ================
See Notes to Financial Statements.
2
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
BALANCE SHEETS
December 31, 2005 and 2004
LIABILITIES AND PARTNERS CAPITAL 2005 2004
--------------- ---------------
CURRENT LIABILITIES
Current maturities of long-term debt $ 47,524 $ 40,297
Accounts payable 3,897 4,732
Accounts payable - general partner 10,388 10,722
Accrued expense 800 800
Accrued interest - - - -
---------------- ---------------
Total current liabilities $ 62,609 $ 56,551
---------------- ---------------
DEPOSIT AND PREPAYMENT LIABILITIES
Tenants' security deposits $ 23,550 $ 23,600
Prepaid rents - - - -
---------------- ----------------
$ 23,550 $ 23,600
---------------- ----------------
LONG-TERM DEBT
Mortgage payable, less current maturities $ 1,850,192 $ 1,899,408
---------------- ----------------
$ 1,850,192 $ 1,899,408
---------------- ----------------
COMMITMENT
PARTNERS CAPITAL $ 1,687,725 $ 1,824,112
---------------- ----------------
$ 3,624,076 $ 3,803,671
================ ================
See Notes to Financial Statements.
3
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF INCOME
Years Ended December 31, 2005 and 2004
2005 2004
-------------- ---------------
RENTAL INCOME
Apartments $ 541,423 $ 545,210
Tenant assistance payments - - - -
Subsidy income - - - -
Miscellaneous - - - -
-------------- ---------------
Net rental revenue $ 541,423 $ 545,210
-------------- ---------------
FINANCIAL REVENUE
Interest Income - project operations $ - - $ - -
Income from investments - replacement reserve 3,798 2,464
Income from investments - operating reserve 315 183
Income from investments - miscellaneous - - - -
-------------- ---------------
Sub-total financial revenue $ 4,113 $ 2,647
-------------- ---------------
OTHER REVENUE
Laundry and vending $ 11,352 $ 5,276
NSF and late charges 225 775
Damage and cleaning fees 2,044 5,882
Forfeited tenant security deposits - - - -
Other revenue - - 205
-------------- ---------------
Sub-total other revenue $ 13,621 $ 12,138
-------------- ---------------
Total revenues $ 559,157 $ 559,995
============== ================
See Notes to Financial Statements.
4
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF INCOME (CONTINUED)
Years Ended December 31, 2005 and 2004
2005 2004
-------------- ----------------
OPERATING EXPENSES
Renting expenses
Advertising $ 1,599 $ 617
Miscellaneous renting expenses - - 22
-------------- ----------------
Sub-total renting expenses $ 1,599 $ 639
-------------- ----------------
Administrative expenses
Office salaries $ - - $ - -
Office supplies 869 408
Office rent - - - -
Management fee 34,944 33,600
Manager's salary 22,657 20,673
Manager rent free unit 11,316 11,250
Legal expense 1,168 1,082
Audit expense 6,125 5,850
Bookkeeping / accounting services - - - -
Telephone and answering service 1,442 1,271
Bad debts 5,531 4,121
Miscellaneous administrative expenses 9,487 11,232
-------------- ----------------
Sub-total administrative expenses $ 93,539 $ 89,487
-------------- ----------------
Utilities expense
Fuel oil / coal $ - - $ - -
Electricity 4,927 4,853
Water 3,833 4,550
Gas 3,922 4,208
Sewer 8,090 7,665
-------------- ----------------
Sub-total utilities expense $ 20,772 $ 21,276
-------------- ----------------
See Notes to Financial Statements.
5
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF INCOME (CONTINUED)
Years Ended December 31, 2005 and 2004
2005 2004
--------------- ---------------
Operating and maintenance expense
Janitor and cleaning payroll $ 5,306 $ 5,973
Janitor and cleaning supplies 772 543
Janitor and cleaning contract 1,805 1,105
Exterminating payroll / contract 924 682
Exterminating supplies - - - -
Garbage and trash removal 7,608 7,304
Security payroll / contract - - - -
Grounds payroll - - - -
Grounds supplies 257 121
Grounds contract 12,945 9,579
Repairs payroll 24,182 22,196
Repairs material 2,211 1,435
Repairs contract 29,131 19,582
Elevator maintenance / contract - - - -
Heating / cooling repairs and maintenance - - - -
Swim pool maintenance / contract - - - -
Snow removal - - - -
Decorating payroll / contract 350 752
Decorating supplies 581 3,190
Vehicle and maintenance equipment o & r - - - -
Miscellaneous operating and maint. expenses 5,698 4,474
-------------- ---------------
Sub-total operating & maint. expense $ 91,770 $ 76,936
-------------- ---------------
Taxes and insurance
Real estate taxes $ 850 $ 566
Payroll taxes 4,896 4,728
Miscellaneous taxes, licenses, and permits 800 800
Property and liability insurance 7,664 6,860
Fidelity bond insurance - - - -
Workman's compensation 13,766 14,959
Health insurance and other employee benefits 9,968 9,581
Other insurance - - - -
--------------- ---------------
Sub-total taxes & insurance $ 37,944 $ 37,494
--------------- ---------------
Total operating expenses $ 245,624 $ 225,832
--------------- ---------------
See Notes to Financial Statements.
6
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF INCOME (CONTINUED)
Years Ended December 31, 2005 and 2004
2005 2004
---------------- -------------------
OTHER EXPENSES
Interest expense - mortgage $ 141,152 $ 150,344
Interest expense - notes - - - -
Miscellaneous financial expense - - - -
Depreciation and amortization 184,011 183,114
Non project expenses - - - -
----------------- -------------------
Sub-total other expenses $ 325,163 $ 333,458
----------------- -------------------
Total expenses $ 570,787 $ 559,290
----------------- -------------------
Net income (loss) $ (11,630) $ 705
================= ===================
See Notes to Financial Statements.
7
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS CAPITAL
Years Ended December 31, 2005 and 2004
General Limited
Total Partner Partner
-------------- --------------- ----------------
Partners capital
December 31, 2003 $ 1,858,497 $ 44,281 $ 1,814,216
Partners capital
contributions - - - - - -
Partners capital
distributions (35,090) (18,563) (16,527)
Net income (loss) 705 7 698
---------------- ----------------- ----------------
Partners capital
December 31, 2004 $ 1,824,112 $ 25,725 $ 1,798,387
Partners capital
contributions - - - - - -
Partners capital
distributions (124,757) (86,999) (37,758)
Net income (loss) (11,630) (116) (11,514)
----------------- ----------------- -----------------
Partners capital
December 31, 2005 $ 1,687,725 $ (61,390) $ 1,749,115
================= ================= =================
Percentage at
December 31, 2005 100% 1% 99%
================= ================= =================
See Notes to Financial Statements.
8
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
Years Ended December 31, 2005 and 2004
2005 2004
---------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (11,630) $ 705
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 184,011 183,114
Change in assets and liabilities:
Decrease (increase) in:
Prepaid expenses (124) 127
Tenants' security deposits (790) (444)
Rents receivable - - - -
Other receivables - - - -
Increase (decrease) in:
Accounts payable (835) 161
Accounts payable - general partner (334) 1,484
Accrued expenses - - - -
Accrued interest - - - -
Prepaid rents - - - -
Tenants' security deposits (50) (1,000)
----------------- ----------------
Net cash provided by (used in)
operating activities $ 170,248 $ 184,147
----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Funding of replacement reserve escrow $ (19,601) $ (18,754)
Withdrawals from replacement reserve escrow - - 49,095
Acquisition of property and equipment (3,990) (52,545)
----------------- ----------------
Net cash provided by (used in)
investing activities $ (23,591) $ (22,204)
----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Partner contributions $ - - $ - -
Partner distributions (124,757) (35,090)
Payment of development fees payable - - (11,303)
Principal payments on long-term debt (41,989) (37,331)
----------------- ----------------
Net cash provided by (used in)
financing activities $ (166,746) $ (83,724)
----------------- ----------------
See Notes to Financial Statements.
9
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS (CONTINUED)
Years Ended December 31, 2005 and 2004
2005 2004
---------------- ----------------
Increase (decrease) in cash and
cash equivalents $ (20,089) $ 78,219
Cash and cash equivalents
Beginning 133,309 55,090
---------------- ----------------
Ending $ 113,220 $ 133,309
================ ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the year for interest $ 141,152 $ 150,344
================ ================
See Notes to Financial Statements.
10
COLONIAL VILLAGE ROSEVILLE
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Partnership's significant accounting policies consistently
applied in the preparation of the accompanying financial statements
follows.
BASIS OF ACCOUNTING
-------------------
The financial statements of the partnership are prepared on the accrual
basis of accounting and in accordance 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.
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 credit 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.
11
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
SFAS NO. 144
------------
Statement of Financial Accounting Standards (SFAS) No. 144 requires that
long-lived assets and certain identifiable intangibles held and used by a
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 2 - ORGANIZATION
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 3 - 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.
12
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - DEFERRED CHARGES
Deferred charges as of December 31, 2005 and 2004, consists of the
following:
2005 2004
--------------- ---------------
Deferred debt expense $ 110,462 $ 110,462
Tax credit monitoring fee 22,960 22,960
--------------- ---------------
$ 133,422 $ 133,422
Less accumulated amortization 54,940 49,727
--------------- ---------------
$ 78,482 $ 83,695
=============== ===============
NOTE 5 - LONG-TERM DEBT
Long-Term debt consisted of a permanent loan with Midland Mortgage Company
in face 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
$15,639.62 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), at which time the interest rate will be
adjusted 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 months of the initial payment date.
As Of December 31, 2005, 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:
December 31, 2006 $ 47,524
2007 50,904
2008 54,524
2009 58,402
2010 62,555
Thereafter 1,623,807
-------------
TOTAL $ 1,897,716
-------------
NOTE 6 - 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 2005 and 2004 in the
amounts of $34,944 and 33,600, respectively, for services rendered in
connection with the leasing and operation of the project. The fee for its
services is approximately 6% of the project's rental income.
13
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - 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.
NOTE 8 - 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.
14