Attached files
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR’S REPORT
MESA VERDE APARTMENTS, L.P.
DECEMBER 31, 2003
MESA VERDE APARTMENTS, L.P.
TABLE OF CONTENTS
| PAGE | ||
| INDEPENDENT AUDITOR’S REPORT | F-2 | |
| FINANCIAL STATEMENT: | ||
| BALANCE SHEET | F-3 | |
| NOTES TO FINANCIAL STATEMENT | F-5 |
| F-1 |
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
To the Partners
MESA VERDE APARTMENTS, L.P.
Roswell, New Mexico
We have audited the accompanying balance sheet of MESA VERDE APARTMENTS, L.P., as of December 31, 2003 and the related statements of operations, changes in partners’ equity (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 audits.
We conducted our audit in accordance with the Standards of the Public Company 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. 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 MESA VERDE APARTMENTS, L.P. as of December 31, 2003 and the results of its operations, changes in partners’ equity and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Metairie, Louisiana
June 13, 2007
3421 N. Causeway Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770. Fax (504) 837-7102
Member of
IGAF Worldwide - Member
Firms in Principal Cities. PCAOB - Public Company Accounting Oversight Board
AICPA Centers. Center for Public Company Audit Firms (SEC)
Governmental Audit Quality Center. Private Companies Practice Section (PCPS)
| F-2 |
MESA VERDE APARTMENTS, L.P.
December 31, 2003
| 2003 | ||||
| ASSETS | ||||
| Current Assets | ||||
| Cash and Cash Equivalents | $ | 62,745 | ||
| Total Current Assets | 62,745 | |||
| Restricted Deposits & Reserves | ||||
| Replacement Reserve | 99,662 | |||
| Total Restricted Deposits & Reserves | 99,662 | |||
| Property and Equipment | ||||
| Land | 160,000 | |||
| Building | 5,827,633 | |||
| Furniture & Fixtures | 322,086 | |||
| Accumulated Depreciation | (1,115,471 | ) | ||
| Total Property and Equipment | 5,194,248 | |||
| Other Assets | ||||
| Financing Fees - Net | 27,360 | |||
| Total Other Assets | 27,360 | |||
| TOTAL ASSETS | $ | 5,384,015 | ||
See accountant’s report and notes to financial statements
| F-3 |
MESA VERDE APARTMENTS, L.P.
BALANCE SHEET
December 31, 2003
| 2003 | ||||
| LIABILITIES AND EQUITY | ||||
| Current Liabilities | ||||
| Accounts Payable | $ | 40,486 | ||
| Tenant Security Deposits | 7,292 | |||
| Accrued Interest Payable | 42,385 | |||
| Accrued Real Estate Taxes | 77,946 | |||
| Reporting Fees Payable | 15,000 | |||
| Current Portion Long-Term Debt | 1,871,295 | |||
| Total Current Liabilities | 2,054,404 | |||
| Long-Term Debt | ||||
| Mortgage Payable | 1,871,295 | |||
| Less Current Portion Long-Term Debt | (1,871,295 | ) | ||
| Mortgage Payable - Finance Authority | 260,679 | |||
| Accrued Interest - Deferred - Finance Authority | 36,612 | |||
| Due to Related Parties | 73,826 | |||
| Due to Developer | 509,084 | |||
| Total Long-Term Debt | 880,201 | |||
| Total Liabilities | 2,934,605 | |||
| Partners’ Equity | 2,449,410 | |||
| TOTAL LIABILITIES AND EQUITY | $ | 5,384,015 | ||
See accountant’s report and notes to financial statements
| F-4 |
MESA VERDE APARTMENTS, L.P.
DECEMBER 31, 2003
NOTE A - ORGANIZATION
MESA VERDE APARTMENTS, L.P. is a residential real estate property (the Property) consisting of 142 rental units located in Roswell, New Mexico. The property was built for the purpose of providing affordable housing to qualified individuals and families in the Roswell community.
MESA VERDE APARTMENTS, L.P. is a New Mexico limited partnership, which owns the Property. The general partners are Medlock Charitable Foundation and Shelter Resource Corporation. WNC Housing Tax Credit Fund V, Series 3, L.P., a California limited partnership, was admitted as the sole limited partner.
The general partner and the limited partner have a 1% and 99% interest, respectively, in operating profits and losses and tax credits. Partnership cash flow after operating expenses, debt service and required reserves is distributed per the terms of the Partnership agreement in varying percentages.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the 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.
Cash and Cash Equivalents
For purposes of statements of cash flows, cash and cash equivalents represent unrestricted cash and certificates of deposit with original maturities of 90 days or less. The carrying amount approximates fair value because of the short period to maturity of the instruments.
The partnership treats all non replacement reserve, escrows and security deposit funds as cash equivalents. Cash on hand, in checking and savings accounts and certificates of deposit are considered cash equivalents.
| F-5 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capitalization and Depreciation
Land, buildings and improvements are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives using the straight-line method. Buildings are depreciated over twenty-seven years using the straight line method. Improvements, equipment and furnishings are depreciated over a period ranging from three to fifteen years using the straight line method.
Income Taxes
No provision or benefit for income taxes has been included in this financial statement since taxable income or loss passes through to, and is reportable by, the partners individually. The Partnership is eligible to receive low income tax credits as provided by Section 42 of the internal Revenue Code.
NOTE C - ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 those estimates.
NOTE D - LONG-TERM DEBT
Bank of America
The Partnership has a mortgage note payable to Bank of America. The 9.18% mortgage was payable in monthly installments of $15,698, including interest, to June 1, 2028 at which time the unpaid balance was due and payable in full. The note is collateralized by all real and personal property of the Partnership.
The loan was accelerated as of August 1, 2003. All obligations outstanding under this loan have been due and payable in full since that date. Additionally, unpaid principal has been accruing interest at the Default Rate (9.18% + 3.0%) since August 1, 2003. Consequently, the entire principal is reported as current portion of long-term debt. This loan was refinanced in 2005.
| F-6 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE D - LONG-TERM DEBT (CONTINUED)
New Mexico Mortgage Finance Authority
The Partnership has a note payable to the New Mexico Mortgage Finance Authority. The 5.3% note provides that no principal or interest payments will be due until February, 2037. The note is collateralized by a deed of trust on the property, which is subordinate to the Bank’s first deed of trust.
Estimated principal payments due over the next five years are as follows:
| December 31, 2004 | $ | 1,871,295 | ||
| 2005 | 23,900 | |||
| 2006 | 25,417 | |||
| 2007 | 27,030 | |||
| 2008 | 28,746 | |||
| and Thereafter | 155,586 | |||
| Total | $ | 2,131,974 |
NOTE E - MANAGEMENT FEES
The Partnership entered into a management agreement with Monarch Properties, Inc., Albuquerque, New Mexico. Monarch Properties, Inc. is not related in any form to any owners, either general or limited partners, of the Partnership. Management fees paid during the years ended December 31, 2003 were $29,564.
| F-7 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
NOTE F - RELATED PARTY TRANSACTIONS
The Partnership has agreed to pay a developer fee in the amount of $735,611 to Trianon Development, the prior General Partner. As of December 31, 2003, $509,084 of this obligation had not been paid.
The Partnership has agreed to pay the limited partner an annual reporting fee of $5,000 for its services in connection with the Partnership’s accounting matters relating to the limited partner and assisting with preparation of required tax returns and reports. If cash flow from operations is insufficient to pay the full amount of the reporting fee, the unpaid portion accrues. As of December 31, 2003, cumulative unpaid fees under this agreement were $15,000.
Due to Related Parties represents cash advances made to the partnership by the limited partner and others. Amounts do not bear interest and are to be repaid when cash flow from operations permits or upon sale of the rental property. As of December 31, 2003 this obligation was comprised of the following:
| Trianon Management | $ | 13,826 | ||
| WNC Housing Tax Credits Fund V, Series 4, L.P. | 60,000 | |||
| Total | $ | 73,826 |
| F-8 |
FINANCIAL
STATEMENTS AND
INDEPENDENT AUDITOR’S REPORT
MESA VERDE APARTMENTS, L.P.
DECEMBER
31, 2004
MESA VERDE APARTMENTS, L.P.
TABLE OF CONTENTS
| PAGE | ||
| INDEPENDENT AUDITOR’S REPORT | F-2 | |
| FINANCIAL STATEMENT: | ||
| BALANCE SHEET | F-3 | |
| NOTES TO FINANCIAL STATEMENT | F-5 |
| F-1 |
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
To the Partners
MESA VERDE APARTMENTS, L.P.
Roswell, New Mexico
We have audited the accompanying balance sheet of MESA VERDE APARTMENTS, L.P., as of December 31, 2004 and the related statements of operations, changes in partners’ equity (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 audits.
We conducted our audit in accordance with the Standards of the Public Company 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. 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 MESA VERDE APARTMENTS, L.P. as of December 31, 2004 and the results of its operations, changes in partners’ equity and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Metairie, Louisiana
August 29, 2006
3421 N. Causeway Blvd., Suite 70. Metairie, LA 70002 Telephone (504) 837-0770. Fax (504) 837-7102
Member of
IGAF Worldwide - Member Firms in Principal Cities. PCAOB - Public Company Accounting Oversight Board
AICPA Centers. Center for Public Company Audit Firms (SEC)
Governmental Audit Quality Center. Private Companies Practice Section (PCPS)
| F-2 |
MESA VERDE APARTMENTS, L.P.
December 31, 2004
| ASSETS | ||||
| Current Assets | ||||
| Cash and Cash Equivalents | $ | 118,231 | ||
| Accounts Receivable | 49,099 | |||
| Due from Affiliate | 37,000 | |||
| Prepaid Insurance | 9,991 | |||
| Total Current Assets | 214,321 | |||
| Property and Equipment | ||||
| Land | 160,000 | |||
| Building | 5,831,270 | |||
| Furniture & Fixtures | 358,070 | |||
| Accumulated Depreciation | (1,310,004 | ) | ||
| Total Property and Equipment | 5,039,336 | |||
| Other Assets | ||||
| Financing Fees - Net | 26,220 | |||
| Deposits | 1,120 | |||
| Total Other Assets | 27,340 | |||
| TOTAL ASSETS | $ | 5,280,997 | ||
See accountant’s report and notes to financial statements
| F-3 |
MESA VERDE APARTMENTS, L.P.
BALANCE SHEET
December 31, 2004
| LIABILITIES AND EQUITY | ||||
| Current Liabilities | ||||
| Accounts Payable | $ | 60,481 | ||
| Tenant Security Deposits | 15,705 | |||
| Accrued Interest Payable | 56,896 | |||
| Accrued Real Estate Taxes | 12,127 | |||
| Reporting Fees Payable | 15,000 | |||
| Mortgage - Bank | 1,868,519 | |||
| Total Current Liabilities | 2,028,728 | |||
| Long-Term Debt | ||||
| Mortgage Payable - Finance Authority | 260,679 | |||
| Accrued Interest - Deferred - Finance Authority | 50,428 | |||
| Due to Related Parties | 204,660 | |||
| Note Payable - Due to Developer | 509,084 | |||
| Total Long-Term Debt | 1,024,851 | |||
| Total Liabilities | 3,053,579 | |||
| Partners’ Equity | 2,227,418 | |||
| TOTAL LIABILITIES AND EQUITY | $ | 5,280,997 | ||
See accountant’s report and notes to financial statements
| F-4 |
MESA VERDE APARTMENTS, L.P.
DECEMBER 31, 2004
NOTE A - ORGANIZATION
MESA VERDE APARTMENTS, L.P. is a residential real estate property (the Property) consisting of 142 rental units located in Roswell, New Mexico. The property was built for the purpose of providing affordable housing to qualified individuals and families in the Roswell community.
MESA VERDE APARTMENTS, L.P. is a New Mexico limited partnership, which owns the Property. The general partners are Medlock Charitable Foundation and Shelter Resource Corporation. WNC Housing Tax Credit Fund V, Series 3, L.P., a California limited partnership, was admitted as the sole limited partner.
The general partner and the limited partner have a 1% and 99% interest, respectively, in operating profits and losses and tax credits. Partnership cash flow after operating expenses, debt service and required reserves is distributed per the terms of the Partnership agreement in varying percentages.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the 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.
Cash and Cash Equivalents
For purposes of statements of cash flows, cash and cash equivalents represent unrestricted cash and certificates of deposit with original maturities of 90 days or less. The carrying amount approximates fair value because of the short period to maturity of the instruments.
The partnership treats all non replacement reserve, escrows and security deposit funds as cash equivalents. Cash on hand, in checking and savings accounts and certificates of deposit are considered cash equivalents.
| F-5 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capitalization and Depreciation
Land, buildings and improvements are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives using the straight-line method. Buildings are depreciated over twenty-seven years using the straight line method. Improvements, equipment and furnishings are depreciated over a period ranging from three to fifteen years using the straight line method.
Income Taxes
No provision or benefit for income taxes has been included in this financial statement since taxable income or loss passes through to, and is reportable by, the partners individually. The Partnership is eligible to receive low income tax credits as provided by Section 42 of the Internal Revenue Code.
NOTE C - ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 those estimates.
NOTE D - LONG-TERM DEBT
Bank of America
The Partnership has a mortgage note payable to Bank of America. The 9.18% mortgage was payable in monthly installments of $15,698, including interest, to June 1, 2028 at which time the unpaid balance was due and payable in full. The note is collateralized by all real and personal property of the Partnership.
The loan was accelerated as of August 1, 2003. All obligations outstanding under this loan have been due and payable in full since that date. Additionally, unpaid principal has been accruing interest at the Default Rate (9.18% + 3.0%) since August 1, 2003. Consequently, the entire principal is reported as current portion of long-term debt. This loan was refinanced in 2005.
| F-6 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE D - LONG-TERM DEBT (CONTINUED)
New Mexico Mortgage Finance Authority
The Partnership has a note payable to the New Mexico Mortgage Finance Authority. The 5.3% note provides that no principal or interest payments will be due until February, 2037. The note is collateralized by a deed of trust on the property, which is subordinate to the Bank’s first deed of trust.
Estimated principal payments due over the next five years are as follows:
| December 31, 2005 | $ | 1,868,519 | ||
| 2006 | 0 | |||
| 2007 | 0 | |||
| 2008 | 0 | |||
| 2009 | 0 | |||
| and Thereafter | 260,679 | |||
| Total | $ | $2,129,198 |
NOTE E - MANAGEMENT FEES
The Partnership entered into a management agreement with Monarch Properties, Inc., Albuquerque, New Mexico. Monarch Properties, Inc. is not related in any form to any owners, either general or limited partners, of the Partnership. Management fees paid during the years ended December 31, 2004 were $23,520.
| F-7 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE F - RELATED PARTY TRANSACTIONS
The Partnership has agreed to pay a developer fee in the amount of $735,611 to Trianon Development, the prior General Partner. As of December 31, 2004, $509,084 of this obligation had not been paid.
The Partnership has agreed to pay the limited partner an annual reporting fee of $5,000 for its services in connection with the Partnership’s accounting matters relating to the limited partner and assisting with preparation of required tax returns and reports. If cash flow from operations is insufficient to pay the full amount of the reporting fee, the unpaid portion accrues. As of December 31, 2004, cumulative unpaid fees under this agreement were $15,000.
Due to Related Parties represents cash advances made to the partnership by the limited partner and others. Amounts do not bear interest and are to be repaid when cash flow from operations permits or upon sale of the rental property. As of December 31, 2004 this obligation was comprised of the following:
| Trianon Management | $ | 13,826 | ||
| WNC Housing Tax Credits Fund V, Series 3, L.P. | 190,834 | |||
| Total | $ | 204,660 |
NOTE G - PRIOR PERIOD ADJUSTMENT
During 2004, a prior period adjustment, in the amount of $(49,849), was recognized to adjust prior year mortgage interest to actual.
| F-8 |
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR’S REPORT
MESA VERDE APARTMENTS, LP.
DECEMBER 31, 2005 AND 2004
MESA VERDE APARTMENTS, L.P.
TABLE OF CONTENTS
| PAGE | ||
| INDEPENDENT AUDITOR’S REPORT | F-2 | |
| FINANCIAL STATEMENT: | ||
| BALANCE SHEETS | F-3 | |
| STATEMENTS OF INCOME | F-5 | |
| STATEMENTS OF CHANGES IN PARTNERS’ EQUITY | F-6 | |
| STATEMENTS OF CASH FLOWS | F-7 | |
| NOTES TO FINANCIAL STATEMENT | F-8 |
| F-1 |
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
To the Partners
MESA VERDE APARTMENTS, L.P.
Roswell, New Mexico
We have audited the accompanying balance sheets of MESA VERDE APARTMENTS, L.P., as of December 31, 2005 and 2004 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 the Standards of the Public Company 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. 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 MESA VERDE APARTMENTS, L.P. as of December 31, 2005 and 2004 and the results of its operations, changes in partners’ equity and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Metairie, Louisiana
February 10, 2007
3421 N. Causeway Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770. Fax (504) 837-7102
Member of
IGAF Worldwide - Member Firms in Principal Cities. PCAOB - Public Company Accounting Oversight Board
AICPA Centers. Center for Public Company Audit Firms (SEC)
Governmental Audit Quality Center. Private Companies Practice Section (PCPS)
| F-2 |
MESA VERDE APARTMENTS, L.P.
December 31, 2005 and 2004
| 2005 | 2004 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | 6,083 | $ | 18,041 | ||||
| Accounts Receivable | 37,742 | 49,099 | ||||||
| Due from Affiliate | 37,000 | 37,000 | ||||||
| Prepaid Insurance | 9,075 | 9,991 | ||||||
| Total Current Assets | 89,900 | 114,131 | ||||||
| Restricted Deposits & Reserves | ||||||||
| Operating Reserve | 32,051 | 0 | ||||||
| Replacement Reserve | 31,872 | 100,190 | ||||||
| Total Restricted Deposits & Reserves | 63,923 | 100,190 | ||||||
| Property and Equipment | ||||||||
| Land | 160,000 | 160,000 | ||||||
| Building | 5,831,270 | 5,831,270 | ||||||
| Furniture & Fixtures | 358,070 | 358,070 | ||||||
| Accumulated Depreciation | (1,508,044 | ) | (1,310,004 | ) | ||||
| Total Property and Equipment | 4,841,296 | 5,039,336 | ||||||
| Other Assets | ||||||||
| Financing Fees - Net | 40,258 | 26,220 | ||||||
| Deposits | 1,120 | 1,120 | ||||||
| Total Other Assets | 41,378 | 27,340 | ||||||
| TOTAL ASSETS | $ | 5,036,497 | $ | 5,280,997 | ||||
See accountant’s report and notes to financial statements
| F-3 |
MESA VERDE APARTMENTS, L.P.
BALANCE SHEETS
December 31, 2005 and 2004
| 2005 | 2004 | |||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 16,485 | $ | 60,481 | ||||
| Tenant Security Deposits | 13,205 | 15,705 | ||||||
| Accrued Interest Payable | 8,972 | 56,896 | ||||||
| Accrued Real Estate Taxes | 14,427 | 12,127 | ||||||
| Reporting Fees Payable | 20,000 | 15,000 | ||||||
| Current Portion Long-Term Debt | 21,132 | 1,868,519 | ||||||
| Total Current Liabilities | 94,221 | 2,028,728 | ||||||
| Long-Term Debt | ||||||||
| Mortgage Payable | 1,745,039 | 1,868,519 | ||||||
| Less Current Portion Long-Term Debt | (21,132 | ) | (1,868,519 | ) | ||||
| Mortgage Payable - Finance Authority | 260,679 | 260,679 | ||||||
| Accrued Interest - Deferred - Finance Authority | 64,244 | 50,428 | ||||||
| Due to Related Parties | 594,149 | 204,660 | ||||||
| Due to Developer | 509,084 | 509,084 | ||||||
| Total Long-Term Debt | 3,152,063 | 1,024,851 | ||||||
| Total Liabilities | 3,246,284 | 3,053,579 | ||||||
| Partners’ Equity | 1,790,213 | 2,227,418 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 5,036,497 | $ | 5,280,997 | ||||
See accountant’s report and notes to financial statements
| F-4 |
MESA VERDE APARTMENTS, L.P.
For The Years Ended December 31, 2005 and 2004
| 2005 | 2004 | |||||||
| REVENUES | ||||||||
| Rent Revenue | $ | 652,296 | $ | 659,209 | ||||
| Vacancy Loss | (106,183 | ) | (148,673 | ) | ||||
| Laundry Revenue | 3,763 | 3,562 | ||||||
| NSF & Late Fee Revenue | 5,533 | 4,535 | ||||||
| Insurance Proceeds | 26,859 | 24,820 | ||||||
| Other Revenue | 2,972 | 16,358 | ||||||
| Total Revenue | 585,240 | 559,811 | ||||||
| EXPENSES | ||||||||
| Administrative | 233,585 | 106,491 | ||||||
| Utilities | 55,924 | 61,931 | ||||||
| Operating and Maintenance | 206,752 | 129,149 | ||||||
| Taxes and Insurance | 66,659 | 71,387 | ||||||
| Interest Expense | 230,309 | 182,834 | ||||||
| Depreciation & Amortization | 224,942 | 195,673 | ||||||
| Total Expenses | 1,018,171 | 747,465 | ||||||
| Net Operating Income (Loss) | (432,931 | ) | (187,654 | ) | ||||
| Other Revenue (Expense) | ||||||||
| Interest Income | 726 | 0 | ||||||
| Entity Expense - Reporting Fees | (5,000 | ) | (5,000 | ) | ||||
| Total Other Revenue (Expense) | (4,274 | ) | (5,000 | ) | ||||
| NET INCOME (LOSS) | $ | (437,205 | ) | $ | (192,654 | ) | ||
See accountant’s report and notes to financial statements
| F-5 |
MESA VERDE APARTMENTS, L.P.
STATEMENTS OF CHANGES IN PARTNERS’ EQUITY
For The Years Ended December 31, 2005 and 2004
| 2005 | 2004 | |||||||
| Balance, January 1 | $ | 2,227,418 | $ | 2,469,921 | ||||
| Capital Contributions | 0 | 0 | ||||||
| Net Income (Loss) | (437,205 | ) | (192,654 | ) | ||||
| Distributions | 0 | 0 | ||||||
| Prior Period Adjustments | 0 | (49,849 | ) | |||||
| Balance, December 31 | $ | 1,790,213 | $ | 2,227,418 | ||||
See accountant’s report and notes to financial statements
| F-6 |
MESA VERDE APARTMENTS, L.P.
For The Years Ended December 31, 2005 and 2004
| 2005 | 2004 | |||||||
| Cash flows from operating activities | ||||||||
| Net Income | $ | (437,205 | ) | $ | (192,654 | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Prior period adjustment | 0 | (49,849 | ) | |||||
| Depreciation and amortization | 184,002 | 195,673 | ||||||
| (Increase) decrease in accounts receivable | 11,357 | (26,166 | ) | |||||
| (Increase) decrease in prepaid expenses | 916 | (9,678 | ) | |||||
| (Increase) decrease in due from affiliates | 0 | (37,000 | ) | |||||
| (Increase) decrease in deposits receivable | 0 | 3,500 | ||||||
| Increase (decrease) in accounts payable | (43,996 | ) | (29,842 | ) | ||||
| Increase (decrease) in interest payable | (47,924 | ) | 14,511 | |||||
| Net change in tenants’ security deposits held | (2,500 | ) | (13,878 | ) | ||||
| Increase (decrease) in reporting fees payable | 0 | 5,000 | ||||||
| Increase (decrease) real estate taxes payable | 2,300 | (36,477 | ) | |||||
| Total adjustments | 104,155 | 15,794 | ||||||
| Net cash provided (used) by operating activities | (333,050 | ) | (176,860 | ) | ||||
| Cash flow from investing activities: | ||||||||
| Cash payments for the purchase of property | 0 | (39,620 | ) | |||||
| Transfer (to) from operating reserves | (32,051 | ) | 0 | |||||
| Transfer (to) from replacement reserve | 68,318 | (25,259 | ) | |||||
| Net cash provided (used) by investing activities | 36,267 | (64,879 | ) | |||||
| Cash flow from financing activities: | ||||||||
| Increase (Payments) Related Party Debts | 389,489 | 132,115 | ||||||
| Increase Accrued Interest | 13,816 | 13,816 | ||||||
| Principal payments on long-term debt | (1,873,480 | ) | (9,801 | ) | ||||
| Increase (payments) reporting fees payable | 5,000 | 5,000 | ||||||
| Proceeds long term debt | 1,750,000 | 0 | ||||||
| Net cash provided (used) by financing activities | 284,825 | 141,130 | ||||||
| Net increase (decrease) in cash and equivalents | (11,958 | ) | (100,609 | ) | ||||
| Cash and equivalents, beginning of year | 18,041 | 118,650 | ||||||
| Cash and equivalents, end of year | $ | 6,083 | $ | 18,041 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest expense | $ | 264,417 | $ | 138,507 | ||||
See accountant’s report and notes to financial statements
| F-7 |
MESA VERDE APARTMENTS, L.P.
DECEMBER 31, 2005 and 2004
NOTE A - ORGANIZATION
MESA VERDE APARTMENTS, L.P. is a residential real estate property (the Property) consisting of 142 rental units located in Rosweli, New Mexico. The property was built for the purpose of providing affordable housing to qualified individuals and families in the Rosweli community.
MESA VERDE APARTMENTS, L.P. is a New Mexico limited partnership, which owns the Property. The general partners are Medlock Charitable Foundation and Shelter Resource Corporation. WNC Housing Tax Credit Fund V, Series 3, L.P., a California limited partnership, was admitted as the sole limited partner.
The general partner and the limited partner have a 1% and 99% interest, respectively, in operating profits and losses arid tax credits. Partnership cash flow after operating expenses, debt service and required reserves is distributed per the terms of the Partnership agreement in varying percentages.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the 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.
Cash and Cash Equivalents
For purposes of statements of cash flows, cash and cash equivalents represent unrestricted cash and certificates of deposit with original maturities of 90 days or less. The carrying amount approximates fair value because of the short period to maturity of the instruments.
The partnership treats all non replacement reserve, escrows and security deposit funds as cash equivalents. Cash on hand, in checking and savings accounts and certificates of deposit are considered cash equivalents.
| F-8 |
MESA VERDE APARTMENTS, LP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 and 2004
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capitalization and Depreciation
Land, buildings and improvements are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives using the straight-line method. Buildings are depreciated over twenty-seven years using the straight line method. Improvements, equipment and furnishings are depreciated over a period ranging from three to fifteen years using the straight line method.
Income Taxes
No provision or benefit for income taxes has been included in this financial statement since taxable income or loss passes through to, and is reportable by, the partners individually. The Partnership is eligible to receive low income tax credits as provided by Section 42 of the Internal Revenue Code.
NOTE C - ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 those estimates.
NOTE D - LONG-TERM DEBT
Bank of America
The Partnership has a mortgage note payable to Bank of America. The 9.18% mortgage was payable in monthly installments of $15,698, including interest, to June 1, 2028 at which time the unpaid balance was due and payable in full. The note is collateralized by all real and personal property of the Partnership.
The loan was accelerated as of August 1, 2003. All obligations outstanding under this loan have been due and payable in full since that date. Additionally, unpaid principal has been accruing interest at the Default Rate (9.18% + 3.0%) since August 1, 2003. Consequently, the entire principal is reported as current portion of long-term debt. This loan was refinanced in 2005.
| F-9 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 and 2004
NOTE D - LONG-TERM DEBT (CONTINUED)
U.S. Bank
In July 2005, the Partnership entered into a new loan agreement with U.S. Bank in the original amount of $1,750,000. The 6.17% mortgage is payable in monthly installments of $10,684 through July 2015.
New Mexico Mortgage Finance Authority
The Partnership has a note payable to the New Mexico Mortgage Finance Authority. The 5.3% note provides that no principal or interest payments will be due until February, 2037. The note is collateralized by a deed of trust on the property, which is subordinate to the Bank’s first deed of trust.
Estimated principal payments due over the next five years are as follows:
| December 31, 2006 | $ | 21,132 | ||
| 2007 | 22,473 | |||
| 2008 | 23,900 | |||
| 2009 | 25,417 | |||
| 2010 | 27,030 | |||
| and Thereafter | 1,885,766 | |||
| Total | $ | 2,005,718 |
NOTE E - MANAGEMENT FEES
The Partnership entered into a management agreement with Monarch Properties, Inc., Albuquerque, New Mexico. Monarch Properties, Inc. is not related in any form to any owners, either general or limited partners, of the Partnership. Management fees paid during the years ended December 31, 2005 were $26,839.
| F-10 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 and 2004
NOTE F - RELATED PARTY TRANSACTIONS
The Partnership has agreed to pay a developer fee in the amount of $735,611 to Trianon Development, the prior General Partner. As of December 31, 2005, $509,084 of this obligation had not been paid.
The Partnership has agreed to pay the limited partner an annual reporting fee of $5,000 for its services in connection with the Partnership’s accounting matters relating to the limited partner and assisting with preparation of required tax returns and reports. If cash flow from operations is insufficient to pay the full amount of the reporting fee, the unpaid portion accrues. As of December 31, 2005, cumulative unpaid fees under this agreement were $20,000.
Due to Related Parties represents cash advances made to the partnership by the limited partner and others. Amounts do not bear interest and are to be repaid when cash flow from operations permits or upon sale of the rental property. As of December 31, 2005 this obligation was comprised of the following:
| Trianon Management | $ | 13,826 | ||
| WNC Nebraska | 312,948 | |||
| WNC Housing Tax Credits Fund V, Series 3, L.P. | 267,375 | |||
| Total | $ | 594,149 |
NOTE G - PRIOR PERIOD ADJUSTMENT
During 2004, a prior period adjustment, in the amount of $(49,849), was recognized to adjust prior year mortgage interest to actual.
| F-11 |
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR’S REPORT
MESA VERDE APARTMENTS, L.P.
DECEMBER 31, 2006 AND 2005
MESA VERDE APARTMENTS, L.P.
TABLE OF CONTENTS
| PAGE | ||
| INDEPENDENT AUDITOR’S REPORT | F-2 | |
| FINANCIAL STATEMENT: | ||
| BALANCE SHEETS | F-3 | |
| STATEMENTS OF INCOME | F-5 | |
| STATEMENTS OF CHANGES IN PARTNERS’ EQUITY | F-6 | |
| STATEMENTS OF CASH FLOWS | F-7 | |
| NOTES TO FINANCIAL STATEMENT | F-8 |
| F-1 |
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
To the Partners
MESA VERDE APARTMENTS, LP.
Roswell, New Mexico
We have audited the accompanying balance sheets of MESA VERDE APARTMENTS, L.P., as of December 31, 2006 and 2005 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 the Standards of the Public Company 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. 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 ail material respects, the financial position of MESA VERDE APARTMENTS, L.P. as of December 31, 2006 and 2005 and the results of its operations, changes in partners’ equity and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Metairie, Louisiana
April 27, 2007
3421 N. Causeway Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770. Fax (504) 837-7102
Member of
IGAF Worldwide - Member
Firms in Principal Cities. PCAOB - Public Company Accounting Oversight Board
AICPA Centers. Center for Public Company Audit Firms (SEC)
Governmental Audit Quality Center. Private Companies Practice Section (PCPS)
| F-2 |
MESA VERDE APARTMENTS, L.P.
December 31, 2006 and 2005
| 2005 | 2005 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | 28,147 | $ | 6,083 | ||||
| Accounts Receivable | 19,973 | 37,742 | ||||||
| Due from Affiliate | 37,000 | 37,000 | ||||||
| Prepaid Insurance | 17,426 | 9,075 | ||||||
| Total Current Assets | 102,546 | 89,900 | ||||||
| Restricted Deposits & Reserves | ||||||||
| Operating Reserve | 19,586 | 32,051 | ||||||
| Replacement Reserve | 44,508 | 31,872 | ||||||
| Total Restricted Deposits & Reserves | 64,094 | 63,923 | ||||||
| Property and Equipment | ||||||||
| Land | 160,000 | 160,000 | ||||||
| Building | 5,831,270 | 5,831,270 | ||||||
| Furniture & Fixtures | 358,070 | 358,070 | ||||||
| Accumulated Depreciation | (1,702,655 | ) | (1,508,044 | ) | ||||
| Total Property and Equipment | 4,646,685 | 4,841,296 | ||||||
| Other Assets | ||||||||
| Financing Fees - Net | 39,575 | 40,258 | ||||||
| Deposits | 1,120 | 1,120 | ||||||
| Total Other Assets | 40,695 | 41,378 | ||||||
| TOTAL ASSETS | $ | 4,854,020 | $ | 5,036,497 | ||||
See accountant’s report and notes to financial statements
| F-3 |
MESA VERDE APARTMENTS, L.P.
BALANCE SHEETS
December 31, 2006 and 2005
| 2006 | 2005 | |||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 27,675 | $ | 16,483 | ||||
| Tenant Security Deposits | 11,118 | 13,205 | ||||||
| Accrued Interest Payable | 9,170 | 8,972 | ||||||
| Accrued Real Estate Taxes | 12,362 | 14,427 | ||||||
| Reporting Fees Payable | 25,000 | 20,000 | ||||||
| Current Portion Long-Term Debt | 22,473 | 21,132 | ||||||
| Total Current Liabilities | 107,798 | 94,219 | ||||||
| Long-Term Debt | ||||||||
| Mortgage Payable | 1,725,467 | 1,745,039 | ||||||
| Less Current Portion Long-Term Debt | (22,473 | ) | (21,132 | ) | ||||
| Mortgage Payable - Finance Authority | 260,679 | 260,679 | ||||||
| Accrued Interest - Deferred - Finance Authority | 78,060 | 64,244 | ||||||
| Due to Related Parties | 702,123 | 594,149 | ||||||
| Due to Developer | 509,084 | 509,084 | ||||||
| Total Long-Term Debt | 3,252,940 | 3,152,063 | ||||||
| Total Liabilities | 3,360,738 | 3,246,282 | ||||||
| Partners’ Equity | 1,493,282 | 1,790,215 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 4,854,020 | $ | 5,036,497 | ||||
See accountant’s report and notes to financial statements
| F-4 |
MESA VERDE APARTMENTS, L.P.
For The Years Ended December 31, 2006 and 2005
| 2006 | 2005 | |||||||
| REVENUES | ||||||||
| Rent Revenue | $ | 652,296 | $ | 652,296 | ||||
| Vacancy Loss | (136,398 | ) | (106,183 | ) | ||||
| Laundry Revenue | 4,135 | 3,763 | ||||||
| NSF & Late Fee Revenue | 6,775 | 5,533 | ||||||
| Insurance Proceeds | 0 | 26,859 | ||||||
| Other Revenue | 7,387 | 2,973 | ||||||
| Total Revenue | 534,195 | 585,241 | ||||||
| EXPENSES | ||||||||
| Administrative | 169,581 | 233,585 | ||||||
| Utilities | 69,416 | 55,924 | ||||||
| Operating and Maintenance | 190,341 | 206,752 | ||||||
| Taxes and Insurance | 79,041 | 66,659 | ||||||
| Interest Expense | 122,651 | 230,309 | ||||||
| Depreciation & Amortization | 195,293 | 224,942 | ||||||
| Total Expenses | 826,323 | 1,018,171 | ||||||
| Net Operating Income (Loss) | (292,128 | ) | (432,930 | ) | ||||
| Other Revenue (Expense) | ||||||||
| Interest Income | 195 | 726 | ||||||
| Entity Expense - Reporting Fees | (5,000 | ) | (5,000 | ) | ||||
| Total Other Revenue (Expense) | (4,805 | ) | (4,274 | ) | ||||
| NET INCOME (LOSS) | $ | (296,933 | ) | $ | (437,204 | ) | ||
See accountant’s report and notes to financial statements
| F-5 |
MESA VERDE APARTMENTS, L.P.
STATEMENTS OF CHANGES IN PARTNERS’ EQUITY
For The Years Ended December 31, 2006 and 2005
| 2006 | 2005 | |||||||
| Balance, January 1 | $ | 1,790,215 | $ | 2,227,419 | ||||
| Capital Contributions | 0 | 0 | ||||||
| Net Income (Loss) | (296,933 | ) | (437,204 | ) | ||||
| Distributions | 0 | 0 | ||||||
| Prior Period Adjustments | 0 | 0 | ||||||
| Balance, December 31 | $ | 1,493,282 | $ | 1,790,215 | ||||
See accountant’s report and notes to financial statements
| F-6 |
MESA VERDE APARTMENTS, L.P.
For The Years Ended December 31, 2006 and 2005
| 2006 | 2005 | |||||||
| Cash flows from operating activities | ||||||||
| Net Income | $ | (296,933 | ) | $ | (437,204 | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 195,293 | 184,002 | ||||||
| (Increase) decrease in accounts receivable | 17,769 | 11,357 | ||||||
| (Increase) decrease in prepaid expenses | (8,351 | ) | 916 | |||||
| Increase (decrease) in accounts payable | 11,193 | (43,997 | ) | |||||
| Increase (decrease) in interest payable | 198 | (47,924 | ) | |||||
| Net change in tenants’ security deposits held | (2,087 | ) | (2,500 | ) | ||||
| Increase (decrease) in reporting fees payable | 5,000 | 5,000 | ||||||
| Increase (decrease) real estate taxes payable | 0 | 2,300 | ||||||
| Increase (decrease) in accrued liabilities | (2,065 | ) | 0 | |||||
| Total adjustments | 216,950 | 109,154 | ||||||
| Net cash provided (used) by operating activities | (79,983 | ) | (328,050 | ) | ||||
| Cash flow from investing activities: | ||||||||
| Transfer (to) from operating reserves | 12,465 | (32,051 | ) | |||||
| Transfer (to) from replacement reserve | (12,636 | ) | 68,318 | |||||
| Net cash provided (used) by investing activities | (171 | ) | 36,267 | |||||
| Cash flow from financing activities: | ||||||||
| Increase (Payments) Related Party Debts | 107,974 | 389,489 | ||||||
| Increase Accrued Interest | 13,816 | 13,816 | ||||||
| Principal payments on long-term debt | (19,572 | ) | (1,873,480 | ) | ||||
| Proceeds long term debt | 0 | 1,750,000 | ||||||
| Net cash provided (used) by financing activities | 102,218 | 279,825 | ||||||
| Net increase (decrease) in cash and equivalents | 22,064 | (11,958 | ) | |||||
| Cash and equivalents, beginning of year | 6,083 | 18,041 | ||||||
| Cash and equivalents, end of year | $ | 28,147 | $ | 6,083 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest expense | $ | 108,638 | $ | 264,417 | ||||
See accountant’s report and notes to financial statements
| F-7 |
MESA VERDE APARTMENTS, L.P.
DECEMBER 31, 2006 and 2005
NOTE A - ORGANIZATION
MESA VERDE APARTMENTS, L.P. is a residential real estate property (the Property) consisting of 142 rental units located in Roswell, New Mexico. The property was built for the purpose of providing affordable housing to qualified individuals and families in the Roswell community.
MESA VERDE APARTMENTS, L.P. is a New Mexico limited partnership, which owns the Property. The general partners are Medlock Charitable Foundation and Shelter Resource Corporation. WNC Housing Tax Credit Fund V, Series 3, L.P., a California limited partnership, was admitted as the sole limited partner.
The general partner and the limited partner have a 1% and 99% interest, respectively, in operating profits and losses and tax credits. Partnership cash flow after operating expenses, debt service and required reserves is distributed per the terms of the Partnership agreement in varying percentages.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the 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.
Cash and Cash Equivalents
For purposes of statements of cash flows, cash and cash equivalents represent unrestricted cash and certificates of deposit with original maturities of 90 days or less. The carrying amount approximates fair value because of the short period to maturity of the instruments.
The partnership treats all non replacement reserve, escrows and security deposit funds as cash equivalents. Cash on hand, in checking and savings accounts and certificates of deposit are considered cash equivalents.
| F-8 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 and 2005
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Capitalization and Depreciation
Land, buildings and improvements are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives using the straight-line method. Buildings are depreciated over twenty-seven years using the straight line method. Improvements, equipment and furnishings are depreciated over a period ranging from three to fifteen years using the straight line method.
Income Taxes
No provision or benefit for income taxes has been included in this financial statement since taxable income or loss passes through to, and is reportable by, the partners individually. The Partnership is eligible to receive low income tax credits as provided by Section 42 of the Internal Revenue Code.
NOTE C-ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of 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 those estimates.
NOTE D - LONG-TERM DEBT
Bank of America
The Partnership has a mortgage note payable to Bank of America. The 9.18% mortgage was payable in monthly installments of $15,698, including interest, to June 1, 2028 at which time the unpaid balance was due and payable in full. The note is collateralized by all real and personal property of the Partnership.
The loan was accelerated as of August 1, 2003. All obligations outstanding under this loan have been due and payable in full since that date. Additionally, unpaid principal has been accruing interest at the Default Rate (9.18% + 3.0%) since August 1, 2003. Consequently, the entire principal is reported as current portion of long-term debt. This loan was refinanced in 2005.
| F-9 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 and 2005
NOTE D - LONG-TERM DEBT (CONTINUED)
U.S. Bank
In July 2005, the Partnership entered into a new loan agreement with U.S. Bank in the original amount of $1,750,000. The 6.17% mortgage is payable in monthly installments of $10,684 through July 2015.
New Mexico Mortgage Finance Authority
The Partnership has a note payable to the New Mexico Mortgage Finance Authority. The 5.3% note provides that no principal or interest payments will be due until February, 2037. The note is collateralized by a deed of trust on the property, which is subordinate to the Bank’s first deed of trust.
Estimated principal payments due over the next five years are as follows:
| December 31, 2007 | $ | 22,473 | ||
| 2008 | 23,900 | |||
| 2009 | 25,417 | |||
| 2010 | 27,030 | |||
| 2011 | 28,746 | |||
| and Thereafter | 1,858,580 | |||
| Total | $ | 1,986,146 |
NOTE E - MANAGEMENT FEES
The Partnership entered into a management agreement with Monarch Properties, Inc., Albuquerque, New Mexico. Monarch Properties, Inc. is not related in any form to any owners, either general or limited partners, of the Partnership. Management fees paid during the years ended December 31, 2006 were $25,193.
| F-10 |
MESA VERDE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006 and 2005
NOTE F - RELATED PARTY TRANSACTIONS
The Partnership has agreed to pay a developer fee in the amount of $735,611 to Trianon Development, the prior General Partner. As of December 31, 2006, $509,084 of this obligation had not been paid.
The Partnership has agreed to pay the limited partner an annual reporting fee of $5,000 for its services in connection with the Partnership’s accounting matters relating to the limited partner and assisting with preparation of required tax returns and reports. If cash flow from operations is insufficient to pay the full amount of the reporting fee, the unpaid portion accrues. As of December 31, 2006, cumulative unpaid fees under this agreement were $25,000.
Due to Related Parties represents cash advances made to the partnership by the limited partner and others. Amounts do not bear interest and are to be repaid when cash flow from operations permits or upon sale of the rental property. As of December 31, 2006 this obligation was comprised of the following:
| Trianon Management | $ | 13,826 | ||
| WNC Nebraska. | 377,805 | |||
| WNC Housing Tax Credits Fund V, Series 3, L.P | 310,492 | |||
| Total | $ | 702,123 |
| F-11 |