Attached files
| file | filename |
|---|---|
| 10-K - NAT 6-10 SUPER 10K 03/31/2010 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | nat610super10k.htm |
| EX-32.2 - EXHIBIT 32.2 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit322.htm |
| EX-31.2 - EXHIBIT 31.2 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit312.htm |
| EX-32.1 - EXHIBIT 32.1 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit321.htm |
| EX-31.1 - EXHIBIT 31.1 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit311.htm |
| EX-99 - STARLIGHT 2007 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | starlight2007.htm |
| EX-99 - STARLIGHT 2006 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | starlight2006fs.htm |
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORT
STARLIGHT PLACE, LP
DECEMBER 31, 2008
STARLIGHT PLACE, LP
TABLE OF CONTENTS
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PAGE
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INDEPENDENT AUDITOR'S REPORT
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3
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FINANCIAL STATEMENTS:
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BALANCE SHEET
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4
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STATEMENT OF OPERATIONS
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6
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STATEMENT OF CHANGES IN PARTNERS' CAPITAL
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7
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STATEMENT OF CASH FLOWS
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8
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NOTES TO FINANCIAL STATEMENTS
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9
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2
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners
Starlight Place, LP
We have audited the accompanying balance sheet of Starlight Place, LP, as of December 31, 2008 and the related statements of operations, changes in partners' capital 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 the Standards of the Public Accounting Oversight Board (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. 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 audit provides 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 Starlight Place, LP as of December 31, 2008 and the results of its operations, changes in partners' capital and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ PAILET, MEUNIER and LeBLANC, L.L.P.
Metairie, LouisianaMay 18, 2011
3421 N. Causeway Blvd., Suite 701 ● Metairie, LA 70002 ● Telephone (504) 837-0770 ● Fax (504) 837-7102
201 St. Charles Ave., Ste. 2500 ● New Orleans, LA 70170 ● Telephone (504) 599-5905 ● Fax (504) 837-7102
www. pmlcpa.com
Member of
Member Firms in Principal Cities ● PCAOB - Public Company Accounting Oversight Board
AICPA: Center for Public Company Audit Firms (SEC)● Governmantal Audit Quality Center ● Private Companies Practice Section (PCPS)
3
STARLIGHT PLACE, LP
BALANCE SHEET
DECEMBER 31, 2008
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ASSETS
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|||
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Current Assets
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||||
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Cash
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$ | 22,866 | ||
| Accounts receivable | 1,085 | |||
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Prepaid expenses
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1,183 | |||
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Total Current Assets
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25,134 | |||
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Restricted Reserves and Escrows
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||||
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Tax escrow
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20,020 | |||
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Tenant security deposits
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8,600 | |||
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Replacement reserve
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47,914 | |||
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Operating deficit reserve
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41,739 | |||
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Total Restricted Reserves and Escrows
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118,273 | |||
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Property and Equipment
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||||
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Land
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248,710 | |||
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Land improvements
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663,095 | |||
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Building
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3,687,417 | |||
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Furniture and equipment
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83,151 | |||
| 4,682,373 | ||||
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Less: Accumulated depreciation
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(531,904 | ) | ||
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Property and equipment, net
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4,150,469 | |||
| Other Assets | ||||
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Monitoring fee, net of accumulated amortization
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5,980 | |||
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Total other assets
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5,980 | |||
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Total assets
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$ | 4,299,856 | ||
See auditors' report and accompanying notes
4
STARLIGHT PLACE, LP
BALANCE SHEET
DECEMBER 31, 2008
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LIABILITIES AND PARTNERS' CAPITAL
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Current liabilities
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||||
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Accounts payable
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$ | 756 | ||
| Prepaid rents | 1,071 | |||
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Current portion mortgage payable
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1,847 | |||
| Tenant security deposits | 8,600 | |||
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Total current liabilities
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12,274 | |||
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Other liabilities
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||||
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Accrued developer fee
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- | |||
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Mortgage payable, net of current portion
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368,708 | |||
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Total liabilities
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368,708 | |||
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Partners' equity
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3,918,874 | |||
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Total Liabilities and Partners' Capital
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4,299,856 | |||
See auditors' report and accompanying notes
5
STARLIGHT PLACE, LP
STATEMENT OF OPERATIONS
DECEMBER 31, 2008
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Income from rental operations
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|||
| Rental income | $ | 235,663 | ||
| Interest credit subsidy | 11,157 | |||
| Tenant charges | 6,039 | |||
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Interest income
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109 | |||
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Total Revenue
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252,968 | |||
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Operating expenses
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||||
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Maintenance and operating
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50,804 | |||
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Utilities
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6,820 | |||
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Administrative
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62,649 | |||
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Taxes and insurance
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47,925 | |||
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Investor service fee
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4,301 | |||
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Interest
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32,992 | |||
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Depreciation
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153,021 | |||
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Amortization
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520 | |||
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Total Operating Expenses
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359,032 | |||
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Net loss
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$ | (106,064 | ) | |
See auditors' report and accompanying notes
6
STARLIGHT PLACE, LP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
DECEMBER 31, 2008
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General
Partner
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Limited
Partners
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Total
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||||||||||
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Balance - January 1, 2008
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$ | (15 | ) | $ | 4,024,953 | $ | 4,024,938 | |||||
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Net Loss
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(5 | ) | (106,059 | ) | (106,064 | ) | ||||||
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Balance - December 31, 2008
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$ | (20 | ) | $ | 3,918,894 | $ | 3,918,874 | |||||
See auditors' report and accompanying notes
7
STARLIGHT PLACE, LP
STATEMENT OF CASH FLOWS
DECEMBER 31, 2008
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Cash flows from operating activities:
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||||
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Net Loss
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$ | (106,064 | ) | |
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Adjustments to reconcile net income to net cash provided by operating activities:
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||||
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Depreciation and amortization
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153,541 | |||
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(Increase) decrease in accounts receivable
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(929 | ) | ||
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(Increase) decrease in accounts receivableproperty tax refund
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34,763 | |||
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(Increase) decrease in prepaid expenses
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3,770 | |||
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Increase (decrease) in accounts payable
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501 | |||
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Increase (decrease) in security deposits payable
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250 | |||
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Increase (decrease) in accrued property taxes
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(28,067 | ) | ||
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Increase (decrease) in prepaid rent
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959 | |||
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Total adjustments
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164,788 | |||
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Net cash provided (used) by operating activities
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58,724 | |||
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Cash flows from investing activities:
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||||
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(Deposit) withdrawal tax and insurance escrow
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7,197 | |||
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(Deposit) withdrawal replacement reserve
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(14,274 | ) | ||
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(Deposit) withdrawal operating deficit reserve
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(35,991 | ) | ||
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(Deposit) withdrawal security deposit account
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(250 | ) | ||
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Net cash provided (used) by investing activities
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(43,318 | ) | ||
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Cash flows from financing activities:
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Principal payments on mortgage
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(1,725 | ) | ||
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Payment to developer
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(51,869 | ) | ||
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Net cash provided (used) by financing activities
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(53,594 | ) | ||
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Net increase (decrease) in cash and equivalents
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(38,188 | ) | ||
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Cash and equivalents, beginning of year
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61,054 | |||
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Cash and equivalents, end of year
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$ | 22,866 | ||
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Supplemental disclosures of cash flow information:
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Cash paid during the year for:
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Interest Expense
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$ | 32,992 | ||
See auditors' report and accompanying notes
8
STARLIGHT PLACE, LP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE A - NATURE OF OPERATIONS
Starlight Place, LP (the "Partnership") was formed in 2005 under the laws of the State of Georgia for the purpose of constructing and operating a 52-unit apartment community, known as Starlight Place, and located in Americus, Georgia. The community is financed by a USDA Rural Development ("RD") Section 538 Loan, and therefore is regulated by RD as to rent charges and operating methods.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies have been followed in the preparation of the financial statements:
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.
Revenue Income
Rental income is recognized as rentals become due. Rental payments received in advance are deferred until earned. All leases between the Partnership and tenants of the property are operating leases.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations using the straight-line method over their estimated service lives of 40 years for real property, 5 years for personal property, and 15 years for land improvements. Depreciation expense for the year ended December 31, 2008 was $153,021.
Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income.
Intangible assets
Monitoring fees have been recorded at cost. Amortization has been provided for using the straight-line method over 15 years. Amortization expense for the year ended December 31, 2008 was $520. As of December 31, 2008, accumulated amortization was $1,820.
9
STARLIGHT PLACE, LP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
Impairment of long-lived assets
The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the future net undiscounted cash flow expected to be generated and any estimated proceeds from the eventual disposition. If the long-lived asset is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount exceeds the fair value as determined from an appraisal, discounted cash flows analysis, or other valuation technique. There were no impairment losses recognized during 2008.
Income Taxes
No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the partners on their respective income tax returns.
NOTE C - TENANT SECURITY DEPOSITS
Security deposits collected from tenants are held in a separate bank account. The account's status at December 31, 2008, is:
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Tenant security deposit cash account
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$ | 8,600 | ||
| Tenant security deposits payable balance | (8,600 | ) | ||
| Total | $ | - |
10
STARLIGHT PLACE, LP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE D - REPLACEMENT RESERVE
In accordance with the provisions of the mortgage agreement, restricted cash is held by Capstone Realty Advisors, to be used for replacement of property as follows:
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Beginning balance
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$ | 33,640 | ||
| Add: Deposits | 14,274 | |||
| Less: Reserve releases | - | |||
| Ending balance, as confirmed by bank | $ | 47,914 |
NOTE E - REQUIRED RESERVES
In accordance with the provisions of the mortgage agreement, certain reserves are required to be established to be used for budgeted expense items and loan payments as follows:
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Rent-up reserve
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$ | 35,974 | ||
| Operating deficit reserve |
5,765
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|||
| Total | $ | 41,739 |
NOTE F - MORTGAGE PAYABLE
The mortgage was payable to Lewiston State Bank (care of Bonneville Mortgage Company) and was transferred to Capstone Realty Advisors in December 2007. The mortgage is secured by a deed of trust on the rental property. The note bears interest at the rate of 7.57% per annum. Principal and interest are payable by the Partnership in monthly installments of $2,487 through April 1, 2034.
The obligation arising from the Loan Agreement has been secured through a Loan Note Guarantee (the USDA Guarantee) under the Section 538 Guaranteed Rural Rental Housing Program pursuant to which the USDA will guarantee 90% of the losses realized under the Promissory Note.
Under an interest credit and rental assistance agreement with Rural Development, an interest credit is provided, thus reducing the interest rate approximately 3% annually. The interest credit is treated as additional income with interest expense being recorded at the note rate. An annual application as required by Rural Development must be submitted in order to be eligible for the interest credit. Eligibility began when the construction loan converted to a permanent loan on April 1, 2006.
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STARLIGHT PLACE, LP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE F - MORTGAGE PAYABLE (CONTINUED)
Aggregate annual maturities for the mortgage payable over each of the next five years are as follows:
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December 31, 2009
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$ | 1,847 | ||
| 2010 |
1,992
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|||
| 2011 | 2,148 | |||
| 2012 | 2,316 | |||
| 2013 | 2,498 | |||
| and thereafter | 359,754 | |||
| Total | $ | 370,555 |
NOTE G - ASSET MANAGEMENT FEE
The Partnership shall pay the Limited Partner an annual asset management fee of $2,500, increasing in subsequent years by the consumer price index. The minimal fee of $2,500 shall be payable in annual installments; provided, however, that if in any year net operating income is insufficient to pay the full $2,500, the unpaid portion thereof shall accrue and be payable on a cumulative basis in the first year in which there is sufficient net operating income.
NOTE H - PARTNERSHIP PROFITS, LOSSES AND DISTRIBUTIONS
Profits and losses from operations are allocated 99.97% to the limited partner, 0.01% to the Georgia limited partner, 0.01% to the special limited partner, 0.005% to the non-profit limited partner, and 0.005% to the general partner. Any and all Georgia tax credits shall be allocated to the Georgia limited partner. Cash flow shall be paid out in the following order and priority:
First, to pay the deferred management fee, if any;
Second, to pay the current asset management fee that was not paid monthly and then to pay any accrued asset management fees that have not been paid in full from previous years;
Third, to pay the principal and then interest on the development fee;
Fourth, to pay operating loans, if any, limited to 100% of the net operating income remaining after reduction for the payments made first to third;
Fifth, to pay the incentive management fee;
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STARLIGHT PLACE, LP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE H - PARTNERSHIP PROFITS, LOSSES AND DISTRIBUTIONS (CONTINUED)
Six, to pay the tax credit compliance fee; and,
Seventh, the balance, 29.98% to the limited partner, 0.01% to the Georgia limited partner, 0.01% to the special limited partner, 0.005% to the non-profit partner, and 69.995% to the general partner.
NOTE I - CONCENTRATION OF CREDIT RISK
The Partnership maintains its cash in financial institutions insured by the Federal Deposit Insurance Corporation (FDIC). Deposit accounts, at times, may exceed federally insured limits. The Partnership has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
NOTE J - MANAGEMENT FEES
The Partnership is managed by Boyd Management, Inc., pursuant to an agreement effective June 29, 2005. During the year ended December 31, 2008, Boyd Management, Inc. earned management fees of $21,632.
NOTE K - COMMITMENTS AND CONTINGENCIES
Interest Credit and Rental Assistance Agreement
Under an agreement with RD, mortgage subsidy is provided that reduces the effective interest rate on the mortgage to approximately 3% over the life of the loan agreement. RD may terminate the agreement if it determines that no subsidy is necessary or if the Partnership is determined to be in violation of the loan agreement or RD rules or regulations.
Housing Tax Credits
As incentive for investment equity, the Partnership applied for and received an allocation certificate for housing tax credits established by the Tax Reform Act of 1986. To qualify for the tax credits, the Partnership must meet certain requirements, including attaining a qualified basis sufficient to support the credit allocation. In addition, tenant eligibility and rental charges are restricted in accordance with Internal Revenue Code Section 42. Management has certified that each tax credit unit has met these qualifications to allow the credits allocated to each unit to be claimed.
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STARLIGHT PLACE, LP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
NOTE K - COMMITMENTS AND CONTINGENCIES (CONTINUED)
Compliance with these regulations must be maintained in each of the fifteen consecutive years of the compliance period. Failure to maintain compliance with occupant eligibility, unit gross rent, or to correct noncompliance within a reasonable time period could result in recapture of previously claimed tax credits plus interest.
NOTE L - DEVELOPER FEES
The developer, an affiliate of the general partner of the Partnership, will receive a developer's fee of $586,600 for its services during the development and construction of the Project. The fee is to be paid in installments as defined in the development agreement. During the year ended December 31, 2008, the remaining balance of the development fee was paid.
14