<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
--------------------------------------
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
COMMISSION FILE NUMBER 33-11194
CENTURY PACIFIC HOUSING FUND-I
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. EMPLOYER IDENTIFICATION NO. 95-3938971
1925 CENTURY PARK EAST, SUITE 1760, LOS ANGELES, CA 90067
REGISTRANT'S TELEPHONE NUMBER: (310) 208-1888
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-K is not contained in this form and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference to Part III of this Form
10-K or any amendment to this Form 10-K (X)
No documents are incorporated into the text by reference.
Yes X No
----- -----
Exhibit Index is located on Page 18
Registrant's Prospectus dated April 15, 1987, as amended (the Prospectus) and
the Registrant's Supplement No. 3 dated December 21, 1988 to Prospectus dated
April 15, 1987 (Supplement No. 3) but only to the extent expressly
incorporated by reference in Parts I through IV hereof. Capitalized terms
which are not defined herein have the same meaning as in the Prospectus.
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<C> <S> <C>
PART I
ITEM 1 BUSINESS 3
ITEM 2 PROPERTIES 5
ITEM 3 LEGAL PROCEEDINGS 8
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 8
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS 9
ITEM 6 SELECTED FINANCIAL DATA 9
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 10
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 12
ITEM 9 CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 13
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 14
ITEM 11 EXECUTIVE COMPENSATION 15
ITEM 12 PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT 16
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 16
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K 17
EXHIBIT INDEX 18
SIGNATURES 19
</TABLE>
<PAGE> 3
PART I
ITEM 1. BUSINESS
--------
Century Pacific Housing Fund-I (the Partnership) was formed on October 6,
1986 as a limited partnership under the laws of the State of California to
invest in multi-family housing developments. The Partnership's business is
to invest primarily in other limited partnerships (Operating Partnerships)
that are organized for the purpose of either constructing or acquiring and
operating existing affordable multi-family rental apartments that are
eligible for the Low-Income Housing Tax Credit, or to a lesser extent, the
Rehabilitation Tax Credit, both enacted by the Tax Reform Act of 1986
(sometimes referred to as Credits or Tax Credits). The Partnership invested
in 21 properties (the properties). Each of the properties qualifies for the
Low-Income Housing Tax Credit, and one property, a historic structure,
qualifies for the Rehabilitation Tax Credit. All of these properties receive
one or more forms of assistance from federal, state or local governments. A
summary of the Partnership's objectives and a summary of the Tax Credits are
provided in the Prospectus under "Investment Objectives and Policies" and
"Federal Income Tax Aspects" on pages 45 and 79, respectively, and are
incorporated herein by reference.
In order to stimulate private investment in low and moderate income housing
of the types in which the Partnership has invested, the federal government
has provided investors with significant ownership incentives intended to
reduce the risks and provide investors/owners with certain tax benefits,
limited cash distributions and the possibility of long-term capital gains.
The ownership incentives include interest subsidies, rent subsidies, mortgage
insurance and other measures. However, there remains significant risks
inherent in this type of housing. Long-term investments in real estate limit
the ability of the Partnership to vary its portfolio in response to changing
economic, financial and investment conditions, and such investments are
subject to changes in economic circumstances and housing patterns, rising
operating costs and vacancies, rent controls and collection difficulties,
costs and availability of energy, as well as other factors which normally
affect real estate values. In addition, these properties usually are rent
restricted and are subject to government agency programs which may or may not
require prior consent to transfer ownership.
3
<PAGE> 4
The Partnership acquired the properties by investing as the limited partner
in Operating Partnerships which own the properties. As a limited partner,
the Partnership's liability for obligations of the Operating Partnerships is
limited to its investment. The Partnership made capital contributions to the
Operating Partnerships in amounts sufficient to pay the Operating
Partnerships' expenses and to reimburse the general partners for their costs
incurred in forming the Operating Partnerships, if any, and acquiring the
properties. For each acquisition, this typically included a cash down
payment (in one or more installments), acceptance of the property's mortgage
indebtedness, and execution of a Purchase Money Note in favor of the seller
of the property. For a summary of the acquisition financing activities for
each property, see the financial information contained under Item 2.
The Partnership's primary objective is to provide Low-Income Housing Tax
Credits to limited partners generally over a 10-year period. Each of the
Partnership's Operating Partnerships has been allocated by the relevant state
tax credit agency an amount of the Low-Income Housing Tax Credit for 10 years
from the date the property is placed-in-service. The required holding period
of the properties is 15 years (the Compliance Period). The properties must
satisfy rent restrictions, tenant income limitations and other requirements
(the Low-Income Housing Tax Credit Requirements) in order to maintain
eligibility for recognition of the Low-Income Housing Tax Credit at all times
during the Compliance Period. Once an Operating Partnership has become
eligible for the Low-Income Housing Tax Credit, it may lose such eligibility
and suffer an event of recapture if its property fails to remain in
compliance with the Low-Income Housing Tax Credit Requirements. To date,
none of the Operating Partnerships have suffered an event of recapture of the
Low-Income Housing Tax Credit.
Nineteen of the twenty-one Operating Partnerships receive rental subsidy
payments, including payments under Section 8 of Title II of the Housing and
Community Development Act of 1974 ("Section 8"). The subsidy agreements
expire at various times during and after the 15-year compliance period of the
Operating Partnerships. The United States Department of Housing and Urban
Development ("HUD") has issued a notice implementing provisions to renew
Section 8 contracts expiring during HUD's fiscal year 1997, where requested
by an owner, for an additional one year term at current rent levels. As of
June 13, 1999, fifteen of the Operating Partnerships' Section 8 contracts are
due to expire during 1999. The Operating Partnerships have not yet received
HUD's approval of their extension requests. At the present time, the
Partnership cannot reasonably predict legislative initiatives and government
budget negotiations, the outcome of which could result in a reduction in
funds available for the various federal and state administered housing
programs including the Section 8 program. Such changes could adversely
affect the future net operating income and debt structure of any or all
Operating Partnerships receiving such subsidy or similar subsidies.
4
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Employees
- ---------
The Partnership does not employ any persons. Alternatively, the Partnership
reimburses an affiliate for overhead allocation consisting primarily of
payroll costs.
ITEM 2. PROPERTIES
----------
As of March 31, 1999, the Partnership had acquired equity interests in the
Operating Partnerships set forth in the table below. Each of the properties
acquired by the Operating Partnerships receives benefits under government
assistance programs. The table set forth below summarizes the properties
acquired, and the purchase price, original indebtedness assumed and the
government assistance programs benefitting each property. Further
information concerning these Properties may be found in Supplement No. 3 to
the Prospectus, pages 4 through 66, which information is incorporated herein
by reference and is summarized below.
5
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<TABLE>
<CAPTION>
PROPERTY NAME, AVERAGE CASH GOVERNMENT
LOCATION AND OCCUPANCY PURCHASE DOWN PURCHASE MORTGAGE RESIDUAL ASSISTANCE
RENTAL UNITS 1998 PRICE PAYMENT NOTE ASSUMED NOTE PROGRAM
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Century Pacific Housing
Partnership V
(CPHP-V) - Jaycee Towers
Dayton, OH Section 236
204 residential units 98% $ 5,700,000 $ 400,196 $ 16,500 $ 3,000,123 $ 2,283,18 Section 8
CPHP - VIII - Sunset
Townhomes
Newton, KS
50 residential units 87% 1,225,000 138,000 -- 751,905 335,095 Section 236
CPHP - XI - Continental
Terrace
Fort Worth, TX Section 236
200 residential units 92% 4,600,000 482,883 -- 2,609,991 1,507,126 Section 8
CPHP - XII Yale
Village
Houston, TX Section 236
180 residential units 93% 5,250,000 530,894 -- 3,075,000 1,644,106 Section 8
CPHP - XIII - Atlantis
Virginia Beach, VA Section 236
208 residential units 98% 6,032,000 801,000 -- 2,678,416 2,552,584 Section 8
CPHP - XIV - Kings Row
Houston, Tx Section 236
180 residential units 94% 3,780,000 394,213 -- 1,848,269 1,537,518 Section 8
CPHP - XV - Castle
Gardens
Lubbock, TX Section 236
152 residential units 91% 3,268,000 320,140 -- 1,787,613 1,160,247 Section 8
CPHP - XVI -
Rockwell Villa
Oklahoma City, OK Section 236
60 residential units 90% 1,235,400 129,564 -- 707,207 398,629 Section 8
CPHP - XVII -
London Square Village
Oklahoma City, OK Section 236
200 residential units 95% 4,214,000 414,097 -- 2,820,832 979,071 Section 8
CPHP - XVIII
Ascension Towers
Memphis, TN
197 residential units 98% 6,727,500 409,094 50,000 3,863,739 2,404,667 Section 236
Coleman Manor
Associates Limited
Partnership Section
Baltimore, MD 221(d)(4)
50 residential units 97% 3,990,000<F1> 1,625,000 -- 2,365,000 -- Section 8
6
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<CAPTION>
PROPERTY NAME, AVERAGE CASH GOVERNMENT
LOCATION AND OCCUPANCY PURCHASE DOWN PURCHASE MORTGAGE RESIDUAL ASSISTANCE
RENTAL UNITS 1998 PRICE PAYMENT NOTE ASSUMED NOTE PROGRAM
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CPHP - XX
Holiday Heights
Fort Worth, TX Section 236
100 residential units 97% 2,200,000 $ 191,000 $ -- $ 1,120,000 $ 889,000 Section 8
CPHP - XXII
Harriet Tubman Terrace
Berkeley, CA Section 236
91 residential units 98% 4,732,000 593,000 -- 1,718,171 2,420,829<F2> Section 8
CPHP - I - Charter
House
Dothan, AL
100 residential units 100% 2,146,000 195,000 -- 1,169,000 782,000 Section 236
CPHP II - VOA - Section 236
Sunset Park Section 8
Denver, CO Flexible
242 residential units 98% 6,500,000 956,000 -- 3,081,144 2,462,856 Subsidy Loan
CPHP - III - Highland Section 221(d)(3)
Park Section 8
Topeka, KS Flexible
200 residential units 93% 6,900,000 939,000 -- 2,024,000 3,937,000 Subsidy Loan
CPHP - IV - Forest Section 236
Glen Estates Section 8
Kansas City, KS Flexible
160 residential units 95% 4,960,000 738,000 -- 2,488,000 1,734,000 Subsidy Loan
CPHP - VI - Edgewood
Danville, IL
150 residential units 76% 3,540,000 680,000 -- 2,359,950 500,050 Section 8
CPHP - VII - Gulfway
Terrace
New Orleans, LA Section 236
206 residential units 81% 5,700,000 683,000 -- 3,031,974 1,715,026 Section 8
Section 236
CPHP - IX - Wind Ridge Section 8
Wichita, KS Flexible
136 residential units 97% 3,500,000 382,000 -- 1,791,936 1,326,064 Subsidy Loan
CPHP - X - Bergen Circle
Springfield, MA Section 236
201 residential units 94% 12,261,000 1,768,000 -- 6,946,158 3,546,842 Section 8
- -------------------------------------------------------------------------------------------------------------------------------
$ 98,460,900 $12,770,081 $ 66,500 $51,508,428 $34,115,891
===============================================================================================================================
<FN>
<F1> This amount represents the development cost and not the purchase price.
<F1> This total includes a flex subsidy loan in the amount of $185,000 and
the assumption of a prior residual note in the amount of $200,000.
</TABLE>
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ITEM 3. LEGAL PROCEEDINGS
-----------------
As of June 13, 1999, there were no pending legal proceedings against the
Partnership or any Operating Partnership in which it has invested.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
There were no submissions of matters to a vote of security holders during the
year ended March 31, 1999.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS
-------------------------------------------------
There is at presently no public market for the Units of limited partnership
interests (the Units), and it is unlikely that any public market for the
Units will develop. See the Prospectus under "Transferability of Interests"
on pages 29 and 72 of the Prospectus, which information is incorporated
herein by reference. The number of owners of Units as of June 13, 1999 was
approximately 2,093, holding 22,315 units.
As of June 13, 1999, there were no cash distributions.
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
The following summary of selected financial data should be read in
conjunction with ITEM 14, herein, which also includes a summary of the
Partnership's significant accounting policies.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------------------
OPERATIONS 1999 1998 1997 1996 1995
- ---------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Revenues $ 3,715 $ 1,720 $ 2,100 $ 3,900 $ 5,000
Operating Expenses (74,653) (72,591) (73,359) (75,053) (72,069)
Equity in Net Losses of
Operating Partnerships (122,202) (134,311) (136,010) (176,789) (241,098)
---------- ---------- ---------- ---------- ----------
Net Loss $(193,140) $(205,182) $(207,269) $(247,942) $(308,167)
========== ========== ========== ========== ==========
Net Loss per Unit of Limited
Partnership Interest $ (9) $ (9) $ (9) $ (11) $ (14)
========== ========== ========== ========== ==========
<CAPTION>
March 31,
------------------------------------------------------------------------------
FINANCIAL POSITION 1999 1998 1997 1996 1995
- ---------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total Assets $ 171,816 $ 277,925 $ 410,633 $547,704 $ 722,045
========== ========== ========== ========== ==========
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The Partnership raised $8,517,000 in equity capital during calendar year 1987
and raised an additional $13,798,000 through April 15, 1988. In late
December 1987, the Partnership invested in eight Operating Partnerships,
which own eight multi-family properties located in various states
representing $45,507,000 of property value. During 1988, the Partnership
invested in an additional 13 properties located in eight states representing
$52,953,900 of property value.
As of March 31, 1999, the Partnership's portfolio consists of 21 properties.
The properties are located in 13 states and contain 3,267 residential units.
The average occupancy level for each property during calendar year 1998 was
approximately 93% and most properties generated sufficient revenue to cover
operating costs, debt service, and the funding of reserves. For a summary of
the combined financial status of the Operating Partnerships and the
properties, see the financial information contained under Item 14.
Liquidity and Capital Resources
- -------------------------------
The Partnership is currently experiencing a liquidity problem. Under the
Partnership Agreement, the Partnership is entitled to receive distributions
of surplus cash from the Operating Partnerships which is to provide the funds
necessary for the Partnership to meet its operating costs. To date, the
Operating Partnerships have not provided sufficient cash distributions to
enable the Partnership to meet its current obligations. The Partnership has
also incurred allocated losses from all but one of its Operating Partnerships
to the extent of the Partnership's cash contributions and has a negative
working capital. As a result of the foregoing, the Partnership has been
dependent upon its general partners and affiliates for continued financial
support to meet its operating costs. Management maintains that the general
partners and/or affiliates, though not required to do so, will continue to
fund operations of the Partnership by continuing to fund operating costs and
by deferring payment of allocated overhead expenses and repayment of
operating cash advances.
Management believes the possibility exists that one or several Operating
Partnerships may require additional capital, in addition to that previously
contributed by the Partnership, to sustain operations. In such case, the
source of the required capital needs may be from (i) limited reserves from
the Partnership (which may include distributions received from the Operating
Partnerships that would otherwise be available for distribution to partners),
(ii) debt financing at the Operating Partnership level (which may not be
available), or (iii) additional equity contributions from the general partner
of the Operating Partnerships (which may not be available). There can be no
assurance that any of these sources would be readily available to provide for
possible additional capital requirements which may be necessary to sustain
the operations of the Operating Partnerships. However, the Partnership is
under no obligation to fund operating deficits
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of the Operating Partnerships in the form of additional contributions or loans.
Due to the uncertainty of the continuation of the Section 8 program,
management has been forced to look at several options to prepare for the
possible lack of subsidy income to the Operating Partnerships. The loss of
subsidy income to the Operating Partnerships will make it more difficult for
the Operating Partnerships to provide sufficient cash distributions to the
Partnership. Management has identified the courses of action they will take
as a result of the potential changes to the Section 8 program.
The plan that the Operating Partnerships follow will depend on the federal
government's decision to implement the decentralization or elimination of
HUD. HUD's proposed Mark-to-Market approach would create an atmosphere where
the Projects would have to compete for residents in the conventional market.
The following alternatives are listed as plans of action that management
plans to pursue in response the HUD's actions:
1) HUD may transfer project control to a local Housing Authority in the
form of block grants. The Housing Authority would determine the market
rents based on the area market. The projects will respond to the local
Housing Authority and follow their procedures and guidelines.
2) The current tenants may receive a housing voucher administered by the
local Housing Authority. The projects will accept vouchers and actively seek
applicants who have vouchers. The projects will also accept non-voucher
residents who will pay rent amounts not to exceed the maximum rents for
persons at 60% of the median income level as in compliance with Section 42 of
the Internal Revenue Code (IRC).
3) If no subsidies or vouchers are given to the projects or the tenants,
all rents will be raised not to exceed the maximum rents for persons at 60%
of the median income level and in compliance with Section 42 of the IRC.
With rental rate increases, many of the current residents will be unable to
pay the higher rents, thus forcing them to move from the projects and to seek
housing elsewhere. An increase in the move out rate will cause a severe cash
flow strain to the project. To compensate for the loss of income and
increased vacancy turnover costs, the projects will require effective
marketing, competitive rental rates and possible upgrading to units and/or
common areas to attract qualified applicants and maintain a low vacancy rate.
4) HUD may restructure loans in order to minimize the monthly costs to the
project and reduce the chances for default. Even with reduced or eliminated
payments, the project will be forced to increase rents in order to operate.
5) The final option is to buy off the HUD insured loan making the complex
free from HUD's or the local Housing Authority's regulations.
11
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Tax Reform Act of 1986, Omnibus Budget Reconciliation Act of 1987, Technical
- ----------------------------------------------------------------------------
and Miscellaneous Revenue Act of 1988, Omnibus Budget Reconciliation Act of
- ---------------------------------------------------------------------------
1989, Omnibus Budget Reconciliation Act of 1990 and all subsequent tax acts.
- ----------------------------------------------------------------------------
The Partnership is organized as a limited partnership and is a "pass through"
tax entity which does not, itself, pay federal income tax. However, the
partners of the Partnership, who are subject to federal income tax, may be
affected by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act
of 1987, the Technical and Miscellaneous Revenue Act of 1988, the Omnibus
Budget Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of
1990 and all subsequent tax acts (collectively the Tax Acts). The
Partnership will consider the effect of certain aspects of the Tax Acts on
the partners when making investment decisions. The Partnership does not
anticipate that the Tax Acts will have a material adverse impact on the
Partnership's business operations, capital resources, plans or liquidity.
Results of Operations
- ---------------------
The Partnership generated revenue of $3,700, $1,700 and $2,100, in the fiscal
years ended March 31, 1999, 1998 and 1997 respectively, which principally
represents transfer fees charged to limited partners to cover administrative
costs incurred by the Partnership upon the private transfer of their
interests. There were $6,637,121 in tax losses generated during the
Partnership's calendar tax year ended December 31, 1998, arising primarily
from Operating Partnership losses allocated to the Partnership and the
Partnership's general and administrative costs. The Partnership received
$1,625,402 in tax credits allocated directly from the Operating Partnerships
for the calendar year ended December 31, 1998.
Inflation
- ---------
Inflation is not expected to have a material adverse impact on the
Partnership's operations during its period of ownership of the Properties.
Year 2000 Compliance
- --------------------
Background. Some computers, software, and other equipment include
programming code in which calendar year data is abbreviated to only two
digits. As a result of this design decision, some of these systems could
fail to operate or fail to produce correct results in "00" is interpreted to
mean 1900, rather than 2000. These problems are widely expected to increase
in frequency and severity as the year 2000 approaches, and are commonly
referred to as the "Millennium Bug" or "Year 2000 problem".
Assessment. The Year 2000 problem could affect computers, software and other
equipment used, operated, or maintained by the Company. Accordingly, the
Company is reviewing its internal computers, software, applications and
related equipment and its
12
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systems other than information technology systems to ensure that they will be
Year 2000 compliant. The Company believes that its Year 2000 plan will be
completed in all material respects prior to the anticipated Year 2000 failure
dates.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The financial statements at March 31, 1999 and 1998 together with the report
of the independent auditors thereon are incorporated by reference from the
Registrants Financial Statements on the pages indicated in ITEM 14.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
---------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
On April 28, 1999, the prior auditors, Novogradac & Company LLP, were
dismissed as auditors for the Partnership. The decision to change
accountants was approved by the Partnership's Board of Directors. Novogradac
& Company LLP's report on the Partnership's financial statements for the
years ended March 31, 1998, contained a modification as to uncertainty of the
Partnerships to continue as a going concern. Novogradac & Company LLP's
report on the above mentioned financial statements contained no adverse
opinions or disclaimer of opinions, and was not qualified as to uncertainty,
audit scope or accounting principles, other than those previously discussed.
Effective April 28, 1999, the Partnership engaged Rubin, Brown, Gornstein &
Co., LLP to perform the audit of the Partnership's financial statements as of
and for the year ending March 31, 1999.
There are no known disagreements on any matter of accounting principles or
practices or financial statement disclosure with current or predecessor
auditors.
13
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
The Partnership has no officers or directors. Management of the Partnership
is vested in Irwin Jay Deutch and Century Pacific Capital Corporation (CPCC)
(the general partners). The general partners will involve themselves in the
day-to-day affairs of the Partnership as required to protect the limited
partners' investment and advance the Partnership's tax investment objectives.
Mr. Deutch, the managing general partner, has the overall responsibility for
the preparation and transmittal of periodic reports to the limited partners,
preparation and filing of the Partnership's tax returns with the IRS and the
appropriate state tax authorities, and the preparation and filing of reports
to HUD and other government agencies.
Following is biographical information on Mr. Deutch and the Executive
Officers of CPCC:
IRWIN JAY DEUTCH
Irwin Jay Deutch, age 58, is Chairman of the Board, President, and Chief
Executive Officer of Century Pacific Realty Corporation (CPRC), a general
partner of the Operating Partnerships that own the Properties in which CPHF-I
has invested, and its Affiliates. Mr. Deutch has been involved with
low-income housing investments since 1968. He is the individual general
partner in 62 private limited partnerships and two public limited partnerships
investing in 209 properties, including 196 multifamily properties with 33,700
apartment units, 10 commercial projects, and 3 hotel properties. Fifty-eight
of the 62 private limited partnerships have invested in affordable housing.
In his capacity as general partner and officer of CPRC, he oversees the
management of these partnerships and assumes overall responsibility for the
development, direction, and operation of all affiliated CPRC companies. Mr.
Deutch is recognized as an expert in the field of affordable housing and
frequently addresses professional groups on topics of real estate investment,
syndication, tax law, and the Low-Income Housing Tax Credit program.
Mr. Deutch received a B.B.A. with distinction from the University of Michigan
School of Business Administration in 1962 and a Juris Doctor degree with
honors from the University of Michigan Law School in 1965. He is a member of
the Order of the Coif. Mr. Deutch served in the Honors Program in the Office
of the Chief Counsel of the Internal Revenue Service from 1965 to 1967, where
he was assigned to the Interpretative Division in Washington, D.C. He
attended Georgetown Law Center and received his Master of Laws degree in
taxation in 1967. Mr. Deutch is a member of the State Bars of Michigan and
California, as well as the American, Federal, Los Angeles, and Beverly Hills
Bar Associations.
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KEY OFFICERS OF CPCC AND AFFILIATES
ESSIE SAFAIE, age 50, is Chief Financial Officer and Chief Operating Officer
of CPRC. Prior to joining CPRC in 1988, from 1985-88, he was Vice President
and Chief Financial Officer of Sunrise Investments, Inc., a real estate
syndication firm with $450 million of real estate under management. During
this period, Mr. Safaie was also President of an affiliated property
management firm, S&L Property Management, Inc., with over 12,000 residential
units and 800,000 square feet of commercial office space under direct
management. From 1982 to 1985, Mr. Safaie was assistant controller of
Standard Management Company, builders and managers of luxury hotels,
commercial offices and residential units. From 1980-1982, he served as
financial officer of Diamond "M" Drilling Company. Mr. Safaie received a BA
degree in Business Administration from California State University with a
major in accounting.
CHARLES L. SCHWENNESEN, age 53, is Vice President of Acquisition Finance for
CPRC and is responsible for financial analysis and "due diligence" reviews of
all properties acquired by CPRC. Prior to joining CPRC in 1987, he was a
consultant to companies which provided investment opportunities through
private placements. From 1984 to 1985, Mr. Schwennesen was Vice President of
Cranston Securities Company and was responsible for the structuring of more
than $30 million of mortgage revenue bond financing for affordable housing
projects. From 1977 to 1984, Mr. Schwennesen was a manager with the
accounting firm of Price Waterhouse where he specialized in providing
auditing and consulting services to publicly held California real estate
development companies involved in the affordable housing industry. Mr.
Schwennesen is a Certified Public Accountant and holds a Masters degree in
Business Administration from the UCLA Graduate School of Management and a
B.A. degree in Mathematics from UCLA.
ITEM 11. EXECUTIVE COMPENSATION
----------------------
The Partnership has no officers or directors. However, in connection with
the operations of the Partnership and the Operating Partnerships, the general
partners and their affiliates will or may receive certain fees, compensation,
income and other payments which are described in the Prospectus under
"Compensation, Fees and Reimbursements" on page 17, the terms of which are
incorporated herein by reference.
During the fiscal years ended March 31, 1999, 1998, and 1997, CPCC, a general
partner of the Partnership, and CPRC, an general partner of the Operating
Partnerships, earned $535,596, $512,139 and $507,804, respectively, in
compensation from the Operating Partnerships and $60,000 was accrued for each
fiscal year for the reimbursement for overhead allocation from Century
Pacific Investment Corporation (CPIC). During fiscal year 1999, the general
partners received no payments from the Operating Partnerships.
15
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ITEM 12. PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
-----------------------------------------------------------
AND MANAGEMENT
--------------
No partner in the Partnership owns more than 5% of the total number of
partnership interests outstanding. Irwin J. Deutch, the managing general
partner, holds a one-half percent general partnership interest and C.P.
Westwood Associates holds a one percent limited partnership interest.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Irwin J. Deutch is the managing general partner of the Partnership, and CPCC
is also a general partner. Irwin J. Deutch is the sole Director and
President of CPCC, and the stock of CPCC is solely owned by the Deutch Family
Trust. Mr. Deutch is also the President, sole Director and the Deutch Family
Trust is the sole stockholder of Century Pacific Realty Corporation (CPRC),
the general partner of the Operating Partnerships that own the properties in
which the Partnership has invested. The general partners were allocated
their proportionate share of the Partnership's tax losses and allocated tax
credits. CPCC and CPRC accrued certain fees for their services in managing
and advising the Partnership and its business. Century Pacific Investment
Corporation (CPIC), an affiliate, provides all the services and materials
necessary for the operation of the Partnership and is reimbursed for actual
costs. These transactions are more particularly set forth in the financial
statements found under ITEM 14.
16
<PAGE> 17
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
---------------------------------------------------------------
(a) Exhibits - See the Exhibit Index at page 18 of this report.
(b) (1) Financial Statements:
</TABLE>
<TABLE>
<S> <C>
Independent Auditors' Reports F-1
Balance Sheet as of March 31, 1999 and 1998 F-4
Statement of Operations for the Years Ended March 31,
1999, 1998 and 1997 F-5
Statement Of Partners' Equity (Deficit) for the
Years Ended March 31, 1999, 1998 and 1997 F-6
Statement of Cash Flows for the Years Ended March 31,
1999, 1998 and 1997 F-7
Notes to Financial Statements F-8
(2) Financial Statement Schedules:
Schedule III - Real Estate and Accumulated Depreciation of
Operating Partnerships in which CPHF-I has
Limited Partnership Interests F-15
Notes to Schedule III - Real Estate and Accumulated
Depreciation of Operating Partnerships in which
CPHF-I has Limited Partnership Interests F-17
Schedule IV - Mortgage Loans on Real Estate of Operating
Partnerships in which CPHF-I has Limited
Partnership Interests F-19
Notes to Schedule IV - Mortgage Loans on Real Estate of
Operating Partnerships in which CPHF-I has
Limited Partnership Interests F-23
All other schedules are omitted because they are not applicable
or the required information is shown in the financial
statements or notes thereto.
</TABLE>
(b) Reports on Form 8-K
Registrant did file with the Securities and Exchange Commission a
Current Report on Form 8-K during the year ending March 31, 1999.
17
<PAGE> 18
EXHIBIT INDEX
These exhibits are numbered in accordance with the exhibit table of Item 601
of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit Number Description
------------------ ---------------------------------------
<C> <S>
11 Omitted - inapplicable
12 Omitted - inapplicable
13 Omitted - inapplicable
16 Omitted - inapplicable
18 Omitted - inapplicable
21 Omitted - inapplicable
23 Omitted - inapplicable
27 Financial Data Schedule
Financial Statements of Coleman Manor
(Equity Investment)
</TABLE>
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CENTURY PACIFIC HOUSING FUND - I
By: Irwin Jay Deutch, as Managing
General Partner
Date: -------------------------- ---------------------------------------
and
Century Pacific Capital I Corporation, as
Corporate General Partner and as Attorney-
in-Fact for all Investor Limited Partners
Date: -------------------------- ---------------------------------------
By: Irwin Jay Deutch, President
19
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
Partners
Century Pacific Housing Fund - I
We have audited the accompanying balance sheet of Century Pacific Housing
Fund - I as of March 31, 1999 and the related statements of operations,
partners' equity 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. The financial statements of Century Pacific Housing Fund-I for
the year ended March 31, 1998 were audited by other auditors, whose report
dated June 16, 1998, included an explanatory paragraph describing conditions
that raised substantial doubt about the Company's ability to continue as a
going concern.
We conducted our audit in accordance with generally accepted auditing
standards. 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 Century Pacific Housing Fund
- - I as of March 31, 1999 and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Notes 2, 3, 4
and 5 to the financial statements, the Partnership has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
Management's plans regarding these matters also are described in Note 3. The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
We have also prepared, from information audited by us, the related financial
statement schedules listed in Item 14(b)(2) as of December 31, 1998. In our
opinion the financial statement schedules present fairly, in all material
respects, the information required to be set forth therein.
St. Louis, Missouri
June 13, 1999
F-1
<PAGE> 21
REPORT OF INDEPENDENT AUDITORS'
To the Partners of
Century Pacific Tax Credit Housing Fund I
We have audited the accompanying balance sheet of Century Pacific Tax Credit
Housing Fund-I (the "Partnership"), as of March 31, 1998, 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 audit. The
financial statements of Century Pacific Tax Credit Housing Fund-I for the
years ended March 31, 1997 and 1996 were audited by other auditors, whose
reports dated June 16, 1997 and June 13, 1996, respectively, included an
explanatory paragraph describing conditions that raised substantial doubt
about the Partnership's ability to continue as a going concern.
We conducted our audit in accordance with generally accepted auditing
standards. 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 Century Pacific Tax Credit
Housing Fund-I as of March 31, 1998, and the results of its operations,
changes in partners' equity (deficit), and cash flows for the year then ended
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 6 to the
financial statements, the Partnership's Operating Partnerships have suffered
recurring operating losses, have not provided sufficient cash distributions
to fund administrative costs and the Partnership has a net capital
deficiency, which raises substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans in regard to these matters
are also described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
F-2
<PAGE> 22
To The Partners of
Century Pacific Tax Credit Housing Fund-I
- ------------------------------------------------------------------------------
We have also audited the related financial statement schedules listed in Item
14(b)(2) as of December 31, 1997. In our opinion, the financial statement
schedules present fairly, in all material respects, the information required
to be set forth therein.
Atlanta, Georgia
June 16, 1998
F-3
<PAGE> 23
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------------------------------------------
BALANCE SHEET
ASSETS
<CAPTION>
MARCH 31,
-----------------------------------
1999 1998
-----------------------------------
<S> <C> <C>
Cash $ 4,889 $ 2,296
Receivable from related party (Note 4) 29,049 15,549
Investments in Operating Partnerships (Notes 1 and 5) 137,878 260,080
- ------------------------------------------------------------------------------------------------------------------
$ 171,816 $ 277,925
==================================================================================================================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Accounts payable and accrued expenses $ 15,800 $ 10,800
Advance from affiliate (Note 4) 75,955 62,455
Payable to related parties (Note 4) 853,946 785,415
- ------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 945,701 858,670
- ------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE 6) -- --
- ------------------------------------------------------------------------------------------------------------------
PARTNERS' EQUITY (DEFICIT)
General partners (394,200) (390,337)
Limited partners, $1,000 stated value per unit,
50,000 units authorized, 22,315 units issued
and outstanding (Note 4) (379,685) (190,408)
- ------------------------------------------------------------------------------------------------------------------
TOTAL PARTNERS' EQUITY (DEFICIT) (773,885) (580,745)
- ------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT) $ 171,816 $ 277,925
==================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
See the accompanying notes to financial statements
</TABLE>
F-4
<PAGE> 24
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<CAPTION>
FOR THE YEARS ENDED MARCH 31,
--------------------------------------------------
1999 1998 1997
--------------------------------------------------
<S> <C> <C> <C>
REVENUES
Transfer fees $ 1,900 $ 1,720 $ 2,100
Miscellaneous 1,815 -- --
- -----------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 3,715 1,720 2,100
- -----------------------------------------------------------------------------------------------------------------------
EXPENSES
Allocated overhead expenses - affiliate (Note 4) 60,000 60,000 60,000
Other general and administrative 14,653 12,591 13,359
- -----------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 74,653 72,591 73,359
- -----------------------------------------------------------------------------------------------------------------------
LOSS BEFORE EQUITY IN NET LOSSES OF
OPERATING PARTNERSHIPS (70,938) (70,871) (71,259)
EQUITY IN NET LOSSES OF OPERATING
PARTNERSHIPS (NOTE 5) (122,202) (134,311) (136,010)
- -----------------------------------------------------------------------------------------------------------------------
NET LOSS $(193,140) $(205,182) $(207,269)
=======================================================================================================================
ALLOCATION OF NET LOSS
General partners $ (3,863) $ (4,104) $ (4,145)
Limited partners (189,277) (201,078) (203,124)
- -----------------------------------------------------------------------------------------------------------------------
$(193,140) $(205,182) $(207,269)
=======================================================================================================================
NET LOSS PER UNIT OF LIMITED PARTNERSHIP
INTEREST (NOTE 1) $ (9) $ (9) $ (9)
=======================================================================================================================
AVERAGE NUMBER OF OUTSTANDING UNITS 22,315 22,315 22,315
=======================================================================================================================
- ------------------------------------------------------------------------------------------------------------------
See the accompanying notes to financial statements
</TABLE>
F-5
<PAGE> 25
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
STATEMENT OF PARTNERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
---------------------------------------------------
<S> <C> <C> <C>
PARTNERS' EQUITY (DEFICIT) - MARCH 31, 1996 $(382,088) $ 213,794 $(168,294)
NET LOSS (4,145) (203,124) (207,269)
- -----------------------------------------------------------------------------------------------------------------------
PARTNERS' EQUITY (DEFICIT) - MARCH 31, 1997 (386,233) 10,670 (375,563)
NET LOSS (4,104) (201,078) (205,182)
- -----------------------------------------------------------------------------------------------------------------------
PARTNERS' EQUITY (DEFICIT) - MARCH 31, 1998 (390,337) (190,408) (580,745)
NET LOSS (3,863) (189,277) (193,140)
- -----------------------------------------------------------------------------------------------------------------------
PARTNERS' EQUITY (DEFICIT) - MARCH 31, 1999 $(394,200) $(379,685) $(773,885)
=======================================================================================================================
PERCENTAGE INTEREST - MARCH 31, 1999 2% 98% 100%
=======================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------
See the accompanying notes to financial statements.
</TABLE>
F-6
<PAGE> 26
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
<CAPTION>
FOR THE YEARS ENDED MARCH 31,
------------------------------------------------
1999 1998 1997
------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(193,140) $(205,182) $(207,269)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Equity in net losses of Operating Partnerships 122,202 134,311 136,010
Increase in receivable from related parties (13,500) -- --
Decrease in accounts payable and accrued
expenses 5,000 (800) (9,240)
Increase in advance from affiliate 13,500 -- --
Increase in payable to related parties 68,531 73,274 76,738
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 2,593 1,603 (3,761)
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Advance to affiliate -- -- 2,700
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH 2,593 1,603 (1,061)
CASH - BEGINNING OF PERIOD 2,296 693 1,754
- -----------------------------------------------------------------------------------------------------------------------
CASH - END OF PERIOD $ 4,889 $ 2,296 $ 693
=======================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------
See the accompanying notes to financial statements.
</TABLE>
F-7
<PAGE> 27
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999, 1998 AND 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Partnership maintains its financial records on the tax
basis. Memorandum entries, while not recorded in the records of the
Partnership, have been made in order to prepare the financial
statements in accordance with generally accepted accounting
principles.
On August 7, 1991, management of the Partnership changed from a
calendar year end to a fiscal year end of March 31 for financial
reporting purposes. Accordingly, the Partnership's quarterly
periods end June 30, September 30 and December 31. The Operating
Partnerships, for financial reporting purposes, have a calendar
year. The Partnership, as well as the Operating Partnerships, have
a calendar year for income tax purposes.
ESTIMATES AND ASSUMPTIONS
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.
INVESTMENTS IN OPERATING PARTNERSHIPS
The Partnership uses the equity method to account for its
investment in the Operating Partnerships in which it has invested
(Note 5). Under the equity method of accounting, the investment is
carried at cost and adjusted for the Partnership's share of the
Operating Partnerships' results of operations and by cash
distributions received. Equity in the loss of each Operating
Partnership allocated to the Partnership is not recognized to the
extent that the investment balance would become negative. Costs
paid by the Partnership for organization of the Operating
Partnership as well as direct costs of acquiring properties,
including acquisition fees and reimbursable acquisition expenses
paid to the general partner, have been capitalized as investments in
Operating Partnerships.
INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes and/or the recapture of the
Low-Income Housing Tax Credit benefits received, if any, are the
liability of the individual partners. The Partnership uses the
accrual method of accounting for tax purposes.
F-8
<PAGE> 28
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
NET LOSS PER UNIT OF LIMITED PARTNERSHIP INTEREST
Net loss per unit of limited partnership interest is calculated
based upon the weighted average number of units of limited
partnership interest (units) outstanding, which is 22,315 for the
years ending March 31, 1999, 1998, and 1997.
2. OPERATIONS
Century Pacific Housing Fund-I, a California limited
partnership, (the Partnership), was formed on October 6, 1986 for
the purpose of raising capital by offering and selling limited
partnership interests and then acquiring limited partnership
interests and then acquiring limited partnership interests in 21
limited partnerships (the Operating Partnerships), which acquired
and operate 21 multi-family residential apartment properties (the
properties).
The general partners of the Partnership are Century Pacific
Capital Corporation, a California corporation (CPCC), and Irwin Jay
Deutch, an individual (collectively, the general partners). The
general partners and affiliates of the general partners (the general
partners and affiliates) have interests in the Partnership and
receive compensation from the Partnership and the Operating
Partnerships (Note 3).
The Properties qualify for the Low-Income Housing Tax Credit
established by Section 42 of the Tax Reform Act of 1986 (the
Low-Income Housing Tax Credit) and one property qualifies for Historic
Rehabilitation Tax Credits (collectively the Tax Credits). These
properties are leveraged low-income multi-family residential
complexes and receive one or more forms of assistance from federal,
state or local government agencies (the Government Agencies).
In July 1987, the Partnership began raising capital from sales
of limited partnership interests, at $1,000 per unit, to limited
partners. The Partnership authorized the issuance of a maximum of
50,000 partnership units of which 22,315 were subscribed and issued.
The limited partnership interest offering closed in April 1988.
The Partnership has acquired limited partnership interests
ranging from 97% to 99% in the Operating Partnerships, which have
invested in rental property.
F-9
<PAGE> 29
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
3. REALIZATION OF ASSETS
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplates continuation of the Partnership as a going concern.
The Partnership's Operating Partnerships have not achieved the
operating results required to provide the Partnership with
sufficient cash distributions to fund the Partnership's
administrative costs. Additionally, the Partnership has incurred
allocated losses from all but one of its Operating Partnerships to
the extent of the Partnership's cash contributions. As a result of
the foregoing, the Partnership is dependent upon the general
partners and affiliates for continued financial support.
The auditors' report on fifteen of the Operating Partnerships'
financial statements contained an explanatory paragraph relating to
a going concern issue concerning the expiration of the Housing
Assistance Payment Contract. These Operating Partnerships have
Housing Assistance Payment Contracts with the U.S. Department of
Housing and Urban Development (HUD) that are due to expire during
1999. Management has requested one year extensions for the
remaining fifteen Operating Partnerships, however, as of June 13,
1999, these extensions have not been granted.
Management maintains that the general partners and affiliates,
though not required to do so, will continue to fund operations by
deferring payment to related parties of allocated overhead expenses,
and by funding any Partnership operating costs. Unpaid allocated
overhead expenses will accrue and become payable when the Operating
Partnerships generate sufficient cash distributions to the
Partnership to cover such expenses. The financial statements do no
include any adjustments that might result from the outcome of this
uncertainty.
4. TRANSACTIONS WITH THE GENERAL PARTNERS AND AFFILIATES OF THE
GENERAL PARTNERS
The general partners of the Partnership are CPCC and Irwin Jay
Deutch. The original limited partner of the Partnership is Westwood
Associates which partners are Irwin Jay Deutch and key employees of
CPCC. Century Pacific Placement Corporation (CPPC), an affiliate of
the general partners, served as the broker-dealer-manager for sales
of the limited partnership interests in the Partnership. Century
Pacific Realty Corporation (CPRC), an affiliate of CPCC, is a
general partner in each of the Operating Partnerships.
F-10
<PAGE> 30
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
The general partners have an aggregate one percent interest in
the Partnership, as does the original limited partner. CPRC has a
one percent interest in each of the Operating Partnerships, except
for one Operating Partnership in which it has a one-half percent
interest.
The general partners and affiliates receive compensation and
reimbursement of expenses from the Partnership, as set forth in the
limited partnership agreement, for their services in managing the
Partnership and its business. The general partners and affiliates
also receive compensation and reimbursement of expenses from the
Operating Partnerships. This compensation and reimbursement
includes services provided to the Partnership during its offering
stage, acquisition stage, operational stage, and termination of
refinancing stage.
The general partners and affiliates earned the following fees
for services provided to the Partnership and were entitled to
reimbursement for costs incurred by the general partners and
affiliates on behalf of the Partnership and the Operating
Partnerships for the years ended March 31, 1999, 1998 and 1997 as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
-----------------------------------------------
<S> <C> <C> <C>
Fees and reimbursement from the Partnership:
Reimbursement for overhead allocated from
Century Pacific Investment Corporation
(CPIC) $ 60,000 $ 60,000 $ 60,000
------------------------------------------------------------------------------------------------------------------------
Fees and reimbursement from the Operating
Partnerships
Supervisory management fee (CPCC and
CPRC) 152,115 152,115 152,115
Partnership management fee (CPCC and
CPRC) 383,681 360,024 355,688
------------------------------------------------------------------------------------------------------------------------
535,796 512,139 507,803
------------------------------------------------------------------------------------------------------------------------
$595,796 $572,139 $567,803
========================================================================================================================
</TABLE>
At March 31, 1999 and 1998, payable to related parties consists
of fees and certain general and administrative costs accrued as
payable by the Partnership to the general partners and affiliates
relating to the above and prior year's amounts totalling $853,946
and $785,415, respectively. Such fees and allocated costs have been
deferred until the Partnership has sufficient cash to pay them.
Receivable from related party of $29,049 and $15,549 at March
31, 1999 and 1998, respectively, represents cash advances to several
of the Operating Partnerships, and the payment of state franchise
taxes for CPHP III, IV, V, VIII, IX, XVIII, XX, and XXII.
F-11
<PAGE> 31
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
At March 31, 1999 and 1998, CPRC was owed $75,955 and $62,455,
respectively, for non-interest bearing, demand cash advances to the
Partnership.
The general partners may advance funds to the Partnership to
fund operating deficits, but are not obligated to do so. Such
advances shall be evidenced by a promissory note of a term no more
than 12 months in length and at a rate of interest no lower than the
prime rate. All such loans shall be repaid prior to any
distributions of net cash flow. At March 31, 1999 and 1998, the
Partnership had no outstanding advances due to the general partners.
5. INVESTMENTS IN OPERATING PARTNERSHIPS
At March 31, 1999 and 1998, the Partnership owned limited
partnership interests in 21 Operating Partnerships, each of which
has invested in a multi-family rental property.
Investments in Operating Partnerships consist of the
following:
<TABLE>
<CAPTION>
1999 1998
--------------------------------------
<S> <C> <C>
Cash contributions to Operating Partnerships
to fund purchase of beneficial interests in
properties $ 15,497,467 $ 15,497,467
Cash contributions to Operating Partnerships
to fund operations 6,150 6,150
Cash distribution from Operating Partnership (6,326) (6,326)
Acquisition and organization costs 3,342,778 3,342,778
Equity in net losses of Operating Partnerships (18,702,191) (18,579,989)
---------------------------------------------------------------------------------------------------------
$ 137,878 $ 260,080
=========================================================================================================
</TABLE>
A summary of the combined balance sheet as of December 31, 1998 and
1997 and statements of operations of the aforementioned Operating
Partnerships for the years then ended follows:
<TABLE>
<CAPTION>
COMBINED BALANCE SHEET
ASSETS
1998 1997
--------------------------------------
<S> <C> <C>
Cash $ 831,921 $ 765,650
Reserve for replacements 2,670,504 2,662,017
Land and buildings 63,317,940 66,772,562
Other assets 3,030,639 3,032,585
---------------------------------------------------------------------------------------------------------
$ 69,851,004 $ 73,232,814
=========================================================================================================
F-12
<PAGE> 32
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
LIABILITIES AND PARTNERS' DEFICIT
<CAPTION>
1998 1997
---------------------------------------
<S> <C> <C>
Notes payable $123,339,239 $ 122,299,736
Other liabilities 7,239,839 3,594,859
Partners' deficit (60,728,074) (52,661,781)
---------------------------------------------------------------------------------------------------------
$ 69,851,004 $ 73,232,814
=========================================================================================================
COMBINED STATEMENT OF OPERATIONS
<CAPTION>
1998 1997
---------------------------------------
<S> <C> <C>
REVENUES
Rental income $ 16,457,379 $ 16,129,155
Other income 413,609 771,008
---------------------------------------------------------------------------------------------------------
TOTAL REVENUES 16,870,988 16,900,163
---------------------------------------------------------------------------------------------------------
EXPENSES
Utilities 2,718,177 2,761,690
Repairs and maintenance 4,645,192 4,034,260
Management fees 1,287,155 1,340,547
Other operating expenses 4,848,663 5,044,824
Interest 7,339,635 7,017,451
Depreciation and amortization 4,378,554 4,299,752
---------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 25,217,376 24,498,524
---------------------------------------------------------------------------------------------------------
NET LOSS $ (8,346,388) $ (7,598,361)
=========================================================================================================
ALLOCATION OF LOSS
General partners and other limited partners $<36,694,485) $ (7,446,394)
CPHF-I (748,867) (151,967)
---------------------------------------------------------------------------------------------------------
$(37,443,352) $ (7,598,361)
=========================================================================================================
</TABLE>
F-13
<PAGE> 33
CENTURY PACIFIC HOUSING FUND-1
- -------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
6. COMMITMENTS AND CONTINGENCIES
The rents of the Operating Partnerships, all of which receive
rental subsidy payments, including payments under Section 8 of Title
II of the Housing and Community Development Act of 1974 ("Section
8") are subject to specific laws, regulations, and agreements with
federal and state agencies. The subsidy agreements expire at
various times during and after the 15-year compliance period of the
Operating Partnerships. The United States Department of Housing and
Urban Development ("HUD") has issued a notice implementing
provisions to renew Section 8 contracts expiring during HUD's fiscal
year 1999, where requested by an owner, for an additional one year
term at current rent levels. As of June 13, 1999, fifteen of the
Operating Partnerships' Section 8 contracts are due to expire during
1999. The Operating Partnerships have not yet received HUD's
approval of their extension requests. At the present time, the
Partnership cannot reasonably predict legislative initiatives and
governmental budget negotiations, the outcome of which could result
in a reduction in funds available for the various federal and state
administered housing programs including the Section 8 program. Such
changes could adversely affect the future net operating income and
debt structure of any or all Operating Partnerships receiving such
subsidy or similar subsidies.
F-14
<PAGE> 34
<TABLE>
Schedule III
------------
Page 1 of 2
CENTURY PACIFIC TAX CREDIT HOUSING FUND-I
- ------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING
PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
<CAPTION>
INITIAL COST TO COST CAPITALIZED
OPERATING PARNTERSHIP SUBSEQUENT TO ACQUISITION
-------------------------------- -------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION <F1> ENCUMBRANCES <F2> LAND IMPROVEMENTS LAND IMPROVEMENTS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Century Pacific Housing
Partnership I (CPHP-I) -
Charter House
Dothan, Alabama $ 2,411,583 $ 179,578 $ 1,918,124 $ -- $ 119,019
CPHP-II VOA/Sunset
Park, Ltd. -
Sunset Park
Denver, Colorado 8,806,079 803,595 5,696,405 7,305 831,712
CPHP-III - Highland Park
Topeka, Kansas 10,881,191 434,475 6,465,525 251 469,561
CPHP-IV Forest Glen
Estates
Kansas City, Missouri 6,197,589 427,519 4,469,134 292 230,903
CPHP-VI - Edgewood
Danville, Illinois 2,991,354 223,418 3,316,582 -- 250,554
CPHP-VII - Gulfway
Terrace
New Orleans, Louisiana 6,185,095 270,343 5,429,657 237 375,578
CPHP-IX - Wind Ridge
Wichita, Kansas 4,038,641 169,514 3,330,486 146 789,811
CPHP-X Bergen Circle
Springfield,
Massachusetts 15,092,874 901,206 11,359,794 -- 1,167,896
CPHP-V - Jaycee Towers
Dayton, Ohio 7,721,411 599,719 5,096,481 -- 381,203
CPHP-VIII - Sunset
Townhouses
Newton, Kansas 1,393,625 50,259 1,174,741 138 126,009
- ------------------------------------------------------------------------------------------------------------------------
BALANCE CARRIED
FORWARD 65,719,442 4,059,626 48,256,929 8,369 4,742,246
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
LIFE UPON
WHICH
GROSS AMOUNT AT WHICH ACCUMULATED DEPRECIATION
CARRIED AT CLOSE OF YEAR DEPRECIATION IN LATEST
------------------------------ ------------- INCOME
BUILDINGS AND BUILDINGS AND DATE OF DATE STATEMENT IS
LAND IMPROVEMENTS TOTAL IMPROVEMENTS CONSTRUCTION ACQUIRED COMPUTED
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Century Pacific Housing
Partnership I (CPHP-I) -
Charter House
Dothan, Alabama $ 179,578 $ 2,037,143 $ 831,208 1972 12/87 27.5 years
CPHP-II VOA/Sunset
Park, Ltd. -
Sunset Park
Denver, Colorado 810,900 6,528,117 2,657,784 1971 12/87 10 - 50 years
CPHP-III - Highland Park
Topeka, Kansas 434,726 6,935,086 3,701,559 1967 12/87 10 - 40 years
CPHP-IV Forest Glen
Estates
Kansas City, Missouri 427,811 4,700,037 2,172,627 1971 12/87 40 years
CPHP-VI - Edgewood
Danville, Illinois 223,418 3,567,136 1,445,712 1970 12/87 27.5 years
CPHP-VII - Gulfway
Terrace
New Orleans, Louisiana 270,580 5,805,235 2,626,828 1970 12/87 10 - 40 years
CPHP-IX - Wind Ridge
Wichita, Kansas 169,660 4,120,297 1,904,929 1969 12/87 10 - 40 years
CPHP-X Bergen Circle
Springfield,
Massachusetts 901,206 12,527,690 5,231,927 1976 12/87 10 - 40 years
CPHP-V - Jaycee Towers
Dayton, Ohio 599,719 5,477,684 2,026,522 1970 12/88 27.5 years
CPHP-VIII - Sunset
Townhouses
Newton, Kansas 50,397 1,300,750 608,059 1971 8/88 40 years
- ------------------------------------------------------------------------------------------------------------------------------
BALANCE CARRIED
FORWARD 4,067,995 52,999,175 23,207,155
- ------------------------------------------------------------------------------------------------------------------------------
See notes to schedule
</TABLE>
F-15
<PAGE> 35
<TABLE>
Schedule III
------------
Page 2 of 2
CENTURY PACIFIC TAX CREDIT HOUSING FUND-I
- -----------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING
PARTNERSHIPS IN WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
<CAPTION>
INITIAL COST TO COST CAPITALIZED
OPERATING PARNTERSHIP SUBSEQUENT TO ACQUISITION
-------------------------------- -------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION <F1> ENCUMBRANCES <F2> LAND IMPROVEMENTS LAND IMPROVEMENTS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE CARRIED FORWARD $ 65,719,442 $4,059,626 $48,256,929 $ 8,369 $ 4,742,246
CPHP-XI Continental Terrace
Fort Worth, Texas 5,801,368 231,946 4,368,054 1,049 615,219
CPHP-XII - Yale Village
Houston, Texas 7,555,344 299,925 4,950,075 1,364 909,160
CPHP-XIII - Atlantis
Virginia Beach, Virginia 8,005,078 520,607 5,382,387 2,861 768,778
CPHP-XIV - Kings Row
Houston, Texas 5,393,820 193,458 3,586,542 947 840,754
CPHP-XV - Castle Gardens
Lubbock, Texas 4,425,316 161,989 3,106,011 821 609,564
CPHP-XVI - Rockwell Villa
Oklahoma City, Oklahoma 1,477,179 75,255 1,160,145 1,168 239,741
CPHP-XVII - London Square Village
Oklahoma City, Oklahoma 4,681,619 203,978 4,009,000 -- 725,109
CPHP-XVIII - Ascension Towers
Memphis, Tennessee 8,976,516 176,341 6,551,159 -- 755,378
Coleman Manor Associates Limited
Partnership - Coleman Manor
Baltimore, Maryland 2,184,583 61,281 3,384,621 -- 160,330
CPHP-XX - Holiday Heights
Fort Worth, Texas 2,933,184 202,445 1,942,864 -- 193,476
CPHP-XXII - Harriet Tubman
Terrace - Berkeley,
California 6,185,790 361,275 3,807,339 5,097 436,832
- ------------------------------------------------------------------------------------------------------------------------
$123,339,239 $6,548,126 $90,505,126 $21,676 $10,996,587
========================================================================================================================
<CAPTION>
LIFE UPON
WHICH
GROSS AMOUNT AT WHICH ACCUMULATED DEPRECIATION
CARRIED AT CLOSE OF YEAR DEPRECIATION IN LATEST
------------------------------ ------------- INCOME
BUILDINGS AND BUILDINGS AND DATE OF DATE STATEMENT IS
LAND IMPROVEMENTS TOTAL IMPROVEMENTS CONSTRUCTION ACQUIRED COMPUTED
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE CARRIED FORWARD $4,067,995 $ 52,999,175 $23,207,155
CPHP-XI Continental Terrace
Fort Worth, Texas 232,995 4,983,273 2,303,684 1971 10/88 20 - 40 years
CPHP-XII - Yale Village
Houston, Texas 301,289 5,859,235 2,956,985 1970 8/88 20 - 40 years
CPHP-XIII - Atlantis
Virginia Beach, Virginia 523,468 6,151,165 2,819,948 1970 7/88 20 - 40 years
CPHP-SIV - Kings Row
Houston, Texas 194,405 4,427,296 2,073,835 1968 8/88 20 - 40 years
CPHP-XV - Castle Gardens
Lubbock, Texas 162,810 3,715,575 1,644,758 1971 7/88 15 - 40 years
CPHP-XVI - Rockwell Villa
Oklahoma City, Oklahoma 76,423 1,399,886 573,539 1970 7/88 27.5 years
CPHP-XVII - London
Square Village
Oklahoma City, Oklahoma 203,978 4,734,109 2,269,202 1975 8/88 27.5 years
CPHP-XVIII - Ascension
Towers
Memphis, Tennessee 176,431 7,306,537 2,926,059 1979 8/88 27.5 years
Coleman Manor Associates
Limited Partnership -
Coleman Manor
Baltimore, Maryland 61,281 3,354,951 1,331,772 1903 8/88 27.5 years
CPHP-XX - Holiday Heights
Fort Worth, Texas 202,445 2,166,340 949,791 1972 10/88 32 years
CPHP-XXII - Harriet Tubman
Terrace - Berkeley,
California 366,372 4,244,171 1,696,848 1975 8/88 27.5 years
- ------------------------------------------------------------------------------------------------------------------------------
$6,569,802 $101,501,713 $44,753,576
==============================================================================================================================
See notes to schedule
</TABLE>
F-16
<PAGE> 36
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH
CPHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
NOTE 1 - DESCRIPTION OF PROPERTIES
- ----------------------------------
The Properties held by the Operating Partnerships in which the Partnership
has invested are housing projects, primarily for families and elderly or
handicapped individuals of low and moderate income.
NOTE 2 - SCHEDULE OF ENCUMBRANCES
- ---------------------------------
<TABLE>
<CAPTION>
OPERATING PARTNERSHIP MORTGAGE RESIDUAL PURCHASE OTHER
NAME AND PROPERTY NAME NOTES NOTE NOTE NOTES TOTAL
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CPHP-I Charter House $ 889,916 $ 1,521,667 $ -- $ -- $ 2,411,583
CPHP-II VOA/Sunset Park,
Ltd. Sunset Park 2,441,712 6,282,260 -- 82,107 8,806,079
CPHP-III Highland Park 1,122,097 9,736,397 -- 22,697 10,881,191
CPHP-IV Forest Glen
Estates 1,925,470 4,203,214 -- 68,905 6,197,589
CPHP-V Jaycee Towers 2,393,207 5,063,501 -- 264,703 7,721,411
CPHP-VI Edgewood 1,915,584 903,274 -- 172,496 2,991,354
CPHP-VII Gulfway Terrace 3,345,423 2,551,866 -- 287,806 6,185,095
CPHP-VIII
Sunset Townhouses 589,770 786,176 -- 17,679 1,393,625
CPHP-IX Wind Ridge 1,329,763 2,644,713 -- 64,165 4,038,641
CPHP-X Bergen Circle 5,884,375 8,589,310 -- 619,189 15,092,874
CPHP-XI Continental Terrace 2,015,592 3,394,943 -- 390,833 5,801,368
CPHP-XII Yale Village 2,361,371 4,056,822 -- 1,137,151 7,555,344
CPHP-XIII Atlantis 2,073,824 5,878,732 -- 52,522 8,005,078
CPHP-XIV Kings Row 1,363,764 3,560,494 -- 469,562 5,393,820
CPHP-XV Castle Gardens 1,420,315 2,701,640 -- 303,361 4,425,316
CPHP-XVI Rockwell Villa 513,854 908,343 -- 54,982 1,477,179
CPHP-XVII London Square
Village 2,132,556 2,285,563 -- 263,500 4,681,619
CPHP-XVIII Ascension Towers 3,108,570 5,532,626 -- 335,320 8,976,516
Coleman Manor Associates
Limited Partnership
Coleman Manor 2,144,583 -- -- 40,000 2,184,583
CPHP-XX Holiday Heights 876,893 2,056,291 -- -- 2,933,184
CPHP-XXII Harriet Tubman
Terrace 1,386,216 4,578,074 221,500 -- 6,185,790
- ------------------------------------------------------------------------------------------------------------------------
$41,234,855 $77,235,906 $221,500 $4,646,978 $123,339,239
========================================================================================================================
</TABLE>
F-17
<PAGE> 37
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
NOTES TO SCHEDULE III - REAL ESTATE AND
ACCUMULATED DEPRECIATION OF OPERATING PARTNERSHIPS IN
WHICH CPHF-I HAS LIMITED PARTNERSHIP INTERESTS - CONTINUED
DECEMBER 31, 1998
NOTE 3 - RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
ACCUMULATED
COST DEPRECIATION
--------------------------------------
<S> <C> <C>
Balance at December 31, 1995 $105,392,749 $31,905,875
Additions during year:
Improvements 1,070,611 --
Depreciation -- 4,272,435
------------ -----------
Balance at December 31, 1996 106,463,360 36,178,310
Additions during year:
Improvements 744,144 --
Depreciation -- 4,256,632
------------ -----------
Balance at December 31, 1997 107,207,504 40,434,942
Additions during year:
Improvements 864,012 --
Depreciation -- 4,318,634
------------ -----------
$108,071,516 $44,753,576
============ ===========
</TABLE>
F-18
<PAGE> 38
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
<CAPTION>
Schedule IV
-----------
MONTHLY
PAYMENTS ORIGINAL
FINAL TO MATURITY FACE CARRYING
INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF
DESCRIPTION<F1> RATE DATE SUBSIDY) MORTGAGE MORTGAGE <F2>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
First mortgages assumed
by Operating Partnerships:
Century Pacific Housing
Partnership-I (CPHP-I)
Charter House
Dothan, Alabama 7% March 2013 $ 8,238 $ 1,325,700 $ 889,916
CPHP-II
VOA/Sunset Park, Ltd.
Sunset Park
Denver, Colorado 7% November 2014 8,592 4,859,300 2,441,712
CPHP-III
Highland Park
Topeka, Kansas 3% December 10,835 2,914,500 1,122,097
2008
CPHP-IV
Forest Glen Estates
Kansas City, Kansas 7.5% April 2013 6,582 2,787,000 1,925,470
CPHP-VI
Edgewood
Danville, Illinois 3% plus March 2013 18,155 2,360,000 1,915,584
treasury bill
rate
CPHP-VII
Gulfway Terrace
New Orleans, Louisiana 7% June 2015 13,576 3,616,200 3,345,423
CPHP-IX
Wind Ridge
Wichita, Kansas 8.5% November 2010 4,544 2,010,900 1,329,763
CPHP-X
Bergen Circle
Springfield, 6.92% March 2018 24,646 7,381,100 5,884,375
Massachusetts
CPHP-V
Jaycee Towers
Dayton, Ohio 8.5% September 7,387 3,361,200 2,393,207
2012
CPHP-VIII
Sunset Townhouses
Newton, Kansas 8.5% September 1,819 828,300 589,770
2012
- -----------------------------------------------------------------------------------------------------------------------
BALANCE BROUGHT FORWARD 104,374 31,444,200 21,837,317
- -----------------------------------------------------------------------------------------------------------------------
F-19
<PAGE> 39
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
<CAPTION>
Schedule IV
-----------
MONTHLY
PAYMENTS ORIGINAL
FINAL TO MATURITY FACE CARRYING
INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF
DESCRIPTION <F1> RATE DATE SUBSIDY) MORTGAGE MORTGAGE <F2>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE BROUGHT
FORWARD $104,374 $31,444,200 $21,837,317
CPHP-XI
Continental Terrace
Fort Worth, Texas 7% March 2013 18,659 3,002,600 2,015,592
CPHP-XII
Yale Village
Houston, Texas 7% June 2015 12,400 3,363,300 2,361,371
CPHP-XIII
Atlantis
Virginia Beach, Virginia 8.5% March 2012 7,200 2,946,500 2,073,824
CPHP-XIV
Kings Row
Houston, Texas 7.05% August 2011 13,925 2,116,000 1,363,764
CPHP-XV
Castle Gardens
Lubbock, Texas 8.5% June 2015 14,353 1,949,900 1,420,315
CPHP-XVI
Rockwell Villa September
Oklahoma City, Oklahoma 7% 2013 1,922 812,700 513,854
CPHP-XVII
London Square Village
Oklahoma City, Oklahoma 7.5% June 2012 7,787 3,153,900 2,132,556
CPHP-XVIII
Ascension Towers
Memphis, Tennessee 7% May 2015 9,506 4,290,000 3,108,570
Coleman Manor Associates
Limited Partnership
Coleman Manor
Baltimore, Maryland 10% July 2029 12,545 2,365,000 2,144,583
CPHP-XX
Holiday Heights
Fort Worth, Texas 7% April 2014 2,787 1,252,700 876,893
CPHP-XXII
Harriet Tubman Terrace
Berkeley, California 7% October 2015 4,155 1,882,700 1,386,216
- -----------------------------------------------------------------------------------------------------------------------
$209,613 $58,579,500 $41,234,855
=======================================================================================================================
See notes to schedule
F-20
<PAGE> 40
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
<CAPTION>
Schedule IV
-----------
MONTHLY
PAYMENTS ORIGINAL
FINAL TO MATURITY FACE CARRYING
INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF
DESCRIPTION <F1> RATE DATE SUBSIDY) MORTGAGE MORTGAGE <F2>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Residual notes (second
mortgages):
Century Pacific Housing
Partnership-I (CPHP-I)
Charter House
Dothan, Alabama <F1> December <F1> $ 781,581 $ 1,521,667
2002
CPHP-II
VOA/Sunset Park, Ltd.
Sunset Park
Denver, Colorado <F1> December <F1> 2,462,936 6,282,260
2002
CPHP-III
Highland Park
Topeka, Kansas <F1> December <F1> 3,936,695 9,736,397
2002
CPHP-IV
Forest Glen Estates
Kansas City, Kansas <F1> December <F1> 1,733,923 4,203,214
2002
CPHP-VI
Edgewood
Danville, Illinois <F1> December <F1> 415,192 903,274
2002
CPHP-VII
Gulfway Terrace
New Orleans, Louisiana <F1> December <F1> 1,255,000 2,551,866
2002
CPHP-IX
Wind Ridge
Wichita, Kansas <F1> December <F1> 1,053,084 2,644,713
2003
CPHP-X
Bergen Circle
Springfield, Massachusetts <F1> July 2013 <F1> 3,547,072 8,589,310
CPHP-V
Jaycee Towers
Dayton, Ohio <F1> October 2005 <F1> 2,245,673 5,063,501
CPHP-VIII
Sunset Townhouses
Newton, Kansas <F1> August 2003 <F1> 341,229 786,176
- -----------------------------------------------------------------------------------------------------------------------
BALANCE BROUGHT FORWARD 17,772,385 42,282,378
- -----------------------------------------------------------------------------------------------------------------------
F-21
<PAGE> 41
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPHF-I HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
<CAPTION>
Schedule IV
-----------
MONTHLY
PAYMENTS ORIGINAL
FINAL TO MATURITY FACE CARRYING
INTEREST MATURITY (NET OF HUD AMOUNT OF AMOUNT OF
DESCRIPTION <F1> RATE DATE SUBSIDY) MORTGAGE MORTGAGE <F2>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE BROUGHT FORWARD $17,772,385 $42,282,378
CPHP-XI
Continental Terrace
Fort Worth, Texas <F1> October 2003 <F1> 1,595,364 3,394,943
CPHP-XII
Yale Village
Houston, Texas <F1> August 2003 <F1> 1,255,000 4,056,822
CPHP-XIII
Atlantis
Virginia Beach, Virginia <F1> July 2003 <F1> 2,552,584 5,878,732
CPHP-XIV
Kings Row
Houston, Texas <F1> August 2003 <F1> 1,537,518 3,560,494
CPHP-XV
Castle Gardens
Lubbock, Texas <F1> July 2003 <F1> 1,160,247 2,701,640
CPHP-XVI
Rockwell Villa
Oklahoma City, Oklahoma <F1> July 2003 <F1> 398,629 908,343
CPHP-XVII
London Square Village
Oklahoma City, Oklahoma <F1> July 2003 <F1> 979,071 2,285,563
CPHP-XVIII
Ascension Towers
Memphis, Tennessee <F1> August 2003 <F1> 2,404,667 5,532,626
CPHP-XX
Holiday Heights
Fort Worth, Texas <F1> October 2004 <F1> 909,472 2,056,291
CPHP-XXII
Harriet Tubman Terrace
Berkeley, California <F1> December <F1> 2,036,000 4,578,074
2003
- -----------------------------------------------------------------------------------------------------------------------
$32,600,937 $77,235,906
=======================================================================================================================
See notes to schedule
</TABLE>
F-22
<PAGE> 42
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL
ESTATE OF OPERATING PARTNERSHIPS IN WHICH
CPHF-I HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1998
NOTE 1 - DESCRIPTION
-----------
Each Operating Partnership has invested in a Property. The Operating
Partnerships assumed mortgage loan obligations from the sellers of the
properties, and with the exception of two mortgages, all mortgage loan
obligations are insured by the United States Department of Housing and Urban
Development. All mortgages are secured by the land and buildings of the
properties.
In addition, the Operating Partnerships issued residual notes to the
sellers of the properties as partial consideration. The notes bear interest
at the minimum long-term federal rate as announced from time-to-time
pursuant to Section 1274 of the Internal Revenue Code, provided that such
rate shall not be less than 7% nor greater than 15%. The notes are secured
by the land and buildings of the properties. The notes are repayable out
of future cash available for distribution and unpaid principal and interest
are due at maturity.
NOTE 2 - RECONCILIATION OF MORTGAGES AND RESIDUAL NOTES
----------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1998
--------------------------------------------------
MORTGAGE RESIDUAL
LOANS NOTES
--------------- --------------
<S> <C> <C>
Balance at December 31, 1995 $44,540,052 $60,976,263
Additions during year:
Accrued interest -- 5,041,436
Deductions during year:
Payments (1,242,226) --
--------------- --------------
Balance at December 31, 1996 43,297,826 66,017,699
Additions during year:
Accrued interest -- 5,288,652
Deductions during year:
Payments (1,329,889) --
--------------- --------------
Balance at December 31, 1997 41,967,937 71,306,351
Additions during year:
Accrued interest -- 5,929,555
Deductions during year:
Payments (733,082) --
--------------- --------------
$41,234,855 $77,235,906
=============== ==============
</TABLE>
F-23
<PAGE> 43
================================================================================
COLEMAN MANOR ASSOCIATES
LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
DECEMBER 31, 1998
================================================================================
<PAGE> 44
<TABLE>
CONTENTS
==========================================================================================================
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report 1 - 2
Balance Sheet 3 - 4
Statement Of Profit And Loss 5 - 6
Statement Of Partners' Equity 7
Statement Of Cash Flows 8 - 9
Notes To Financial Statements 10 - 14
Supporting Data Required By HUD 15 - 17
Independent Auditors' Report On Internal
Controls 18 - 19
Independent Auditors' Report On Compliance With
Specific Requirements Applicable To Major HUD
Programs 20 - 21
Independent Auditors' Report On Compliance With
Specific Requirements Applicable To Fair Housing
And Non-Discrimination 22
Schedule Of Findings And Questioned Costs 23 - 25
Auditors' Comments On Audit Resolution Matters
Relating To The HUD Programs 26
Mortgagor's Certification 27
Management Agent's Certification 28
Auditor's Transmittal Letter 29
</TABLE>
<PAGE> 45
S2300-020 INDEPENDENT AUDITORS' REPORT
To The Partners
Coleman Manor Associates Limited Partnership
We have audited the accompanying balance sheet of Coleman Manor Associates
Limited Partnership, Project No. 052-35464, a limited partnership, as of
December 31, 1998 and the related statements of profit and loss, partners'
equity and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
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 Coleman Manor Associates
Limited Partnership as of December 31, 1998 and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (shown on pages 15 to 17) is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the
audit of the financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also issued a
report dated January 26, 1999 on our consideration of Coleman Manor
Associates Limited Partnership's internal controls and a report dated January
26, 1999 on its compliance with laws and regulations.
<PAGE> 46
Board of Directors
Coleman Manor Associates Limited Partnership Page 2
- ------------------------------------------------------------------------------
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 6, the
Partnership's contract with the U.S. Department of Housing and Urban
Development (HUD) for housing assistance payments is due to expire in 1999.
This matter raises substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
January 26, 1999
<PAGE> 47
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- ----------------------------------------------------------------------------------------------------------------
BALANCE SHEET
PAGE 1 OF 2
DECEMBER 31, 1998
ASSETS
<S> <C>
CURRENT ASSETS
1120 Cash - operations $ 21,029
1130 Tenant accounts receivable 366
1135 Accounts receivable - HUD 2,521
1200 Miscellaneous prepaid expenses 23,529
--------------
1100T TOTAL CURRENT ASSETS 47,445
--------------
DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant deposits held in trust 6,382
--------------
RESTRICTED DEPOSITS AND FUNDED RESERVES
1310 Escrow deposits 20,409
1320 Replacement reserve 33,820
--------------
1300T TOTAL DEPOSITS 54,229
--------------
FIXED ASSETS
1410 Land 61,281
1420 Buildings 3,426,317
1465 Office furniture and equipment 118,634
--------------
1400T Total Fixed Assets 3,606,232
1495 Less: Accumulated depreciation 1,331,772
--------------
1400N NET FIXED ASSETS 2,274,460
--------------
OTHER ASSETS
1520 Intangible assets - loan costs 101,431
--------------
1520 Intangible assets - credit application and
compliance fees 14,869
--------------
1500T TOTAL OTHER ASSETS 116,300
--------------
1000T TOTAL ASSETS $2,498,816
==============
- ----------------------------------------------------------------------------------------------------------------
See the accompanying report letter and notes to financial statements. Page 3
<PAGE> 48
CENTURY PACIFIC HOUSING FUND-1
- ----------------------------------------------------------------------------------------------------------------
BALANCE SHEET
PAGE 2 OF 2
DECEMBER 31, 1998
LIABILITIES
CURRENT LIABILITIES
2110 Accounts payable - operations $ 7,374
2120 Accrued wages payable 2,112
2113 Accounts payable - entity 169,954
2131 Accrued interest payable - first mortgage 14,959
2170 Mortgage payable - first mortgage (short-term) 8,590
2172 Mortgage payable - second mortgage (short-term) 1,355
2210 Prepaid revenue 414
--------------
2122T TOTAL CURRENT LIABILITIES 204,758
--------------
DEPOSIT AND PREPAYMENT LIABILITIES
2191 Tenant deposits held in trust (contra) 6,655
--------------
LONG-TERM LIABILITIES
2320 Mortgage payable - first mortgage 1,422,822
2322 Mortgage payable - second mortgage 711,816
2324 Other loans and notes payable 40,000
--------------
2300T TOTAL LONG-TERM LIABILITIES 2,174,638
--------------
2000T TOTAL LIABILITIES 2,386,051
PARTNERS' EQUITY
3130 Partners' equity 112,765
--------------
2033T TOTAL LIABILITIES AND PARTNERS' EQUITY $ 2,498,816
==============
- ----------------------------------------------------------------------------------------------------------------
See the accompanying report letter and notes to financial statements. Page 4
</TABLE>
<PAGE> 49
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- -----------------------------------------------------------------------------------------------------------------------
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1998
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
PART 1 DESCRIPTION OF ACCOUNT ACCT. NO. AMOUNT
- -----------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Rent Revenue - Gross Potential 5120 $ 47,225
------------------------------------------------------------------------------------
Tenant Assistance Payments 5121 $ 325,475
------------------------------------------------------------------------------------
Rent Revenue - Stores and Commercial 5140 $
------------------------------------------------------------------------------------
Garage and Parking Spaces 5170 $
------------------------------------------------------------------------------------
Flexible Subsidy Revenue 5180 $
RENT ------------------------------------------------------------------------------------
REVENUE Miscellaneous Rent Revenue 5190 $
5100 ------------------------------------------------------------------------------------
Excess Rent 5191 $
------------------------------------------------------------------------------------
Rent Revenue/Insurance 5192 $
------------------------------------------------------------------------------------
Special Claims Revenue 5193 $
------------------------------------------------------------------------------------
Retained Excess Income 5194 $
-------------------------------------------------------------------------------------------------
TOTAL RENT REVENUE 5100T $ 372,700
- -----------------------------------------------------------------------------------------------------------------------
Apartments 5220 $ 6,541
------------------------------------------------------------------------------------
Stores and Commercial 5240 $
------------------------------------------------------------------------------------
Rental Concessions 5250 $
VACANCIES ------------------------------------------------------------------------------------
5200 Garage and Parking Space 5270 $
------------------------------------------------------------------------------------
Miscellaneous 5290 $
-------------------------------------------------------------------------------------------------
TOTAL VACANCIES 5200T $ 6,541
-------------------------------------------------------------------------------------------------
NET RENTAL REVENUE Rent Revenue Less Vacancies 5152N $ 366,159
- -----------------------------------------------------------------------------------------------------------------------
Nursing Homes/Assisted Living/Board and Care/Other
5300 -------------------------------------------------------------------------------------------------
Elderly Care/Coop/ and Other Revenues 5300 $
- -----------------------------------------------------------------------------------------------------------------------
Financial Revenue - Project Operations 5410 $ 711
------------------------------------------------------------------------------------
Revenue from Investments - Residual Receipts 5430 $
FINANCIAL ------------------------------------------------------------------------------------
REVENUE Revenue from Investments - Replacement Reserve 5440 $ 680
5400 ------------------------------------------------------------------------------------
Revenue from Investments - Miscellaneous 5490 $
-------------------------------------------------------------------------------------------------
TOTAL FINANCIAL REVENUE 5400T $ 1,391
- -----------------------------------------------------------------------------------------------------------------------
Laundry and Vending Revenue 5910 $ 1,826
------------------------------------------------------------------------------------
Tenant Charges 5920 $ 518
------------------------------------------------------------------------------------
OTHER Interest Reduction Payments Revenue 5945 $
REVENUE ------------------------------------------------------------------------------------
5900 Miscellaneous Revenue 5990 $ 250
-------------------------------------------------------------------------------------------------
TOTAL OTHER REVENUE 5900T $ 2,594
-------------------------------------------------------------------------------------------------
TOTAL REVENUE 5000T $ 370,144
- -----------------------------------------------------------------------------------------------------------------------
Conventions and Meetings 6203 $
------------------------------------------------------------------------------------
Management Consultants 6204 $
------------------------------------------------------------------------------------
Advertising and Marketing 6210 $ 100
------------------------------------------------------------------------------------
Other Renting Expenses 6250 $ 100
------------------------------------------------------------------------------------
Office Salaries 6310 $ 17,122
------------------------------------------------------------------------------------
Office Expenses 6311 $ 6,738
------------------------------------------------------------------------------------
Office or Model Apartment Rent 6312 $
------------------------------------------------------------------------------------
Management Fee 6320 $ 20,229
ADMINISTRATIVE ------------------------------------------------------------------------------------
EXPENSES Manager or Superintendent Salaries 6330 $
6200/6300 ------------------------------------------------------------------------------------
Administrative Rent Free Unit 6331 $ 7,454
------------------------------------------------------------------------------------
Legal Expense - Project 6340 $ 16
------------------------------------------------------------------------------------
Audit Expense 6350 $ 5,000
------------------------------------------------------------------------------------
Bookkeeping Fees/Accounting Services 6351 $ 6,600
------------------------------------------------------------------------------------
Bad Debts 6370 $ 1,030
------------------------------------------------------------------------------------
Miscellaneous Administrative Expenses 6390 $ 1,842
-------------------------------------------------------------------------------------------------
TOTAL ADMINISTRATIVE EXPENSES 6263T $ 66,231
- -----------------------------------------------------------------------------------------------------------------------
Fuel Oil/Coal 6420 $
------------------------------------------------------------------------------------
Electricity 6450 $ 6,820
UTILITIES ------------------------------------------------------------------------------------
EXPENSE Water 6451 $ 1,152
------------------------------------------------------------------------------------
Gas 6452 $
------------------------------------------------------------------------------------
Sewer 6453 $ 2,703
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
TOTAL UTILITIES EXPENSE 6400T $ 10,675
-------------------------------------------------------------------------------------------------
TOTAL EXPENSES (CARRY FORWARD TO PAGE2) $ 76,906
- -----------------------------------------------------------------------------------------------------------------------
Page 1 of 2
- -----------------------------------------------------------------------------------------------------------------------
See the accompanying report letter and notes to financial statements. Page 5
<PAGE> 50
Project Name: Coleman Manor Associates Limited Partnership
- -----------------------------------------------------------------------------------------------------------------------
BALANCE CARRIED FORWARD $ 76,906
- -----------------------------------------------------------------------------------------------------------------------
Payroll 6510 $ 33,596
------------------------------------------------------------------------------------
Supplies 6515 $ 10,748
------------------------------------------------------------------------------------
Contracts 6520 $ 13,316
------------------------------------------------------------------------------------
Operating and Maintenance Rent Free Unit 6521 $
------------------------------------------------------------------------------------
Garbage and Trash Removal 6525 $ 1,650
OPERATING ------------------------------------------------------------------------------------
MAINTENANCE Security Payroll/Contract 6530 $
EXPENSES ------------------------------------------------------------------------------------
6500 Security Rent Free Unit 6531 $
------------------------------------------------------------------------------------
Heating/Cooling Repairs and Maintenance 6546 $ 3,640
------------------------------------------------------------------------------------
Snow Removal 6548 $
------------------------------------------------------------------------------------
Vehicle and Maintenance Equipment Operation
and Repairs 6570 $
------------------------------------------------------------------------------------
Miscellaneous Operating and Maintenance Expenses 6590 $ 2,471
-------------------------------------------------------------------------------------------------
TOTAL OPERATING AND MAINTENANCE EXPENSES 6500T $ 65,421
- -----------------------------------------------------------------------------------------------------------------------
Real Estate Taxes 6710 $ 36,535
------------------------------------------------------------------------------------
Payroll Taxes (Project's Share) 6711 $ 3,972
------------------------------------------------------------------------------------
Property and Liability Insurance (Hazard) 6720 $ 4,271
TAXES ------------------------------------------------------------------------------------
AND Fidelity Bond Insurance 6721 $
INSURANCE ------------------------------------------------------------------------------------
6700 Workmen's Compensation 6722 $ 1,529
------------------------------------------------------------------------------------
Health Insurance and Other Employee Benefits 6723 $ 4,050
------------------------------------------------------------------------------------
Miscellaneous Taxes, Licenses, Permits and Insurance 6790 $ 1,332
-------------------------------------------------------------------------------------------------
TOTAL TAXES AND INSURANCE 6700T $ 51,689
- -----------------------------------------------------------------------------------------------------------------------
Interest on Mortgage Payable 6820 $ 142,975
------------------------------------------------------------------------------------
Interest on Notes Payable (Long-Term) 6830 $ 7,140
FINANCIAL ------------------------------------------------------------------------------------
EXPENSES Interest on Notes Payable (Short-Term) 6840 $
6800 ------------------------------------------------------------------------------------
Mortgage Insurance Premium/Service Charge 6850 $ 7,186
------------------------------------------------------------------------------------
Miscellaneous Financial Expenses 6890 $
-------------------------------------------------------------------------------------------------
TOTAL FINANCIAL EXPENSES 6800T $ 157,301
- -----------------------------------------------------------------------------------------------------------------------
Nursing Homes/ Assisted Living/ Board and Care/ Other
6900 -------------------------------------------------------------------------------------------------
Elderly Care Expenses 6900 $
- -----------------------------------------------------------------------------------------------------------------------
TOTAL COST OF OPERATIONS BEFORE
DEPRECIATION AND AMORTIZATION 6000T $ 351,317
- -----------------------------------------------------------------------------------------------------------------------
PROFIT (LOSS) BEFORE DEPRECIATION
AND AMORTIZATION 5060T $ 18,827
- -----------------------------------------------------------------------------------------------------------------------
Depreciation Expense 6600 $ 135,879
------------------------------------------------------------------------------------
Amortization Expense 6610 $ 6,580
-------------------------------------------------------------------------------------------------
TOTAL DEPRECIATION AND AMORTIZATION $ 142,459
-------------------------------------------------------------------------------------------------
OPERATING PROFIT OR (LOSS) 5060N $(123,632)
- -----------------------------------------------------------------------------------------------------------------------
Officer's Salaries 7110 $
------------------------------------------------------------------------------------
Legal Expenses 7120 $
------------------------------------------------------------------------------------
Federal, State, and Other Income Taxes 7130 $
CORPORATE OR ------------------------------------------------------------------------------------
MORTGAGOR Interest Income 7140 $
ENTITY ------------------------------------------------------------------------------------
EXPENSES Interest on Notes Payable 7141 $
7100 ------------------------------------------------------------------------------------
Interest on Mortgage Payable 7142 $
------------------------------------------------------------------------------------
Other Expenses - Asset and supervisory management fee 7190 $ 19,800
-------------------------------------------------------------------------------------------------
NET ENTITY EXPENSES 7100T $ 19,800
-------------------------------------------------------------------------------------------------
PROFIT OR LOSS (NET INCOME OR LOSS) 3250 $(143,432)
- -----------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS OR OTHER INCOME AND EXPENSE SUB-ACCOUNT GROUPS. If miscellaneous or other income and/or expense
sub-accounts (5190, 5290, 5490, 5990, 6390, 6590, 6790, 6890 and 7190) exceed the Account Groupings by 10% or more,
attach a separate schedule describing or explaining the miscellaneous income or expense.
- -----------------------------------------------------------------------------------------------------------------------
PART II
- -----------------------------------------------------------------------------------------------------------------------
1. Total mortgage principal payments required during the audit year (12 monthly payments).
This applies to all direct loans and HUD-held and fully insured mortgages. Any HUD
approved second mortgages should be included in the figures. (Account S1000-010) $ 7,016
- -----------------------------------------------------------------------------------------------------------------------
2. Total of 12 monthly deposits in the audit year into the Replacement Reserve account, as
required by the Regulatory Agreement even if payments may be temporarily suspended or
reduced. (Account S1000-020) $ 5,910
- -----------------------------------------------------------------------------------------------------------------------
3. Replacement Reserves or Residual Receipts and Releases which are included as expense items
on this Profit and Loss Statement. (Account S1000-030) $
- -----------------------------------------------------------------------------------------------------------------------
4. Project Improvement Reserve Releases under the Flexible Subsidy Program that are included
as expense items on this Profit and Loss Statement. (Account S1000-040) $
- -----------------------------------------------------------------------------------------------------------------------
Page 2 of 2
- -----------------------------------------------------------------------------------------------------------------------
See the accompanying report letter and notes to financial statements. Page 6
</TABLE>
<PAGE> 51
CENTURY PACIFIC HOUSING FUND-1
STATEMENT OF PARTNERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1998
S1100-010 BEGINNING OF YEAR $ 256,197
3250 NET INCOME/LOSS (143,432)
---------------
3130 END OF YEAR $ 112,765
===============
- -------------------------------------------------------------------------------
See the accompanying report letter and notes to financial
statements. Page 7
<PAGE> 52
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- ----------------------------------------------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
PAGE 1 OF 2
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
ACCOUNT AMOUNT
--------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts:
S1200-010 Rental receipts $ 369,257
S1200-020 Interest receipts 1,391
S1200-030 Other operating receipts 266
-------------
S1200-040 Total Receipts 370,914
-------------
Disbursements:
S1200-050 Administrative (43,626)
S1200-070 Management fee (20,229)
S1200-090 Utilities (10,675)
S1200-100 Salaries and wages (32,939)
S1200-110 Operating and maintenance (31,825)
S1200-120 Real estate taxes (36,444)
S1200-140 Property insurance (11,796)
S1200-150 Miscellaneous taxes and insurance (3,972)
S1200-160 Tenant security deposits 273
S1200-180 Interest on mortgages (150,579)
S1200-210 Mortgage insurance premium (MIP) (7,186)
-------------
S1200-230 Total Disbursements (348,998)
-------------
S1200-240 NET CASH PROVIDED BY OPERATING ACTIVITIES 21,916
-------------
CASH FLOWS FROM INVESTING ACTIVITIES
S1200-245 Net withdrawal from the mortgage escrow account 921
S1200-250 Net deposits to the reserve for replacement account (6,590)
-------------
S1200-350 NET CASH USED IN INVESTING ACTIVITIES (5,669)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
S1200-360 Mortgage principal payments (8,372)
S1200-455 Entity/Construction financing activities:
S1200-456 Management fees paid S1200-457 (3,000)
-------------
S1200-460 NET CASH USED IN FINANCING ACTIVITI (11,372)
-------------
S1200-470 NET INCREASE IN CASH 4,875
S1200-480 BEGINNING OF PERIOD CASH 16,154
-------------
S1200T END OF PERIOD CASH $ 21,029
=============
- ----------------------------------------------------------------------------------------------------------------------
See the accompanying report letter and notes to financial statements. Page 8
</TABLE>
<PAGE> 53
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- ----------------------------------------------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
PAGE 2 OF 2
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
ACCOUNT AMOUNT
------------------------------------
<S> <C> <C>
RECONCILIATION OF NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
3250 Net loss $(143,432)
Adjustments to reconcile net loss to net cash
provided by operating activities:
6600 Depreciation $ 135,879
6610 Amortization 6,580
Change in assets and liabilities:
S1200-490 Increase in tenant accounts receivable (264)
S1200-500 Decrease in accounts receivable - other 2,098
S1200-520 Increase in prepaid expenses (523)
S1200-530 Decrease in cash restricted for tenant security deposits 202
S1200-540 Increase in accounts payable 2,376
S1200-560 Increase in accrued liabilities 193
S1200-580 Increase in tenant security deposits held in trust 71
S1200-590 Decrease in prepaid revenue (1,064)
S1200-605 Increase in entity/construction liability accounts
S1200-606 Management fee expense S1200-607 19,800
-------------
S1200-610 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 21,916
=============
- ----------------------------------------------------------------------------------------------------------------------
See the accompanying report letter and notes to financial statements. Page 9
</TABLE>
<PAGE> 54
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(S3100-010)
The Partnership is organized as a limited partnership formed under
the laws of the State of Maryland on May 16, 1988 to acquire an
interest in .723 acres of land in Baltimore City, Maryland, and to
construct and operate thereon an apartment complex of 50 units under
Section 221(d)(3) of the National Housing Act. Such projects are
regulated by the U.S. Department of Housing and Urban Development
(HUD) as to rent charges and operating methods. The regulatory
agreements limit annual distributions of net operating receipts to
"surplus cash" available at the end of each year. There was no
"surplus cash" as of December 31, 1998.
The following significant accounting policies have been followed in
the preparation of the financial statements:
Management uses estimates and assumptions in preparing
financial statements. Those estimates and assumptions
affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the
reported revenues and expenses.
The Partnership provides an allowance for doubtful accounts
equal to the estimated collection losses that will be
incurred in collection of all receivables. The estimated
losses are based on a review of the current status of the
existing receivables. No allowance for doubtful accounts
was provided for at December 31, 1998 as none was deemed
necessary by management.
Depreciation is provided using primarily the straight-line
method over the estimated useful lives of the assets
ranging from seven to twenty-seven years.
The replacement reserve can only be used for improvements
to buildings upon prior approval of HUD.
- ------------------------------------------------------------------------------
See the accompanying report letter. Page 10
<PAGE> 55
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
Deferred loan costs consist of fees for obtaining the HUD
insured mortgage loan and are being amortized using the
straight-line method over the life of the mortgage loan.
The low income credit application fee and the low income
credit compliance fee are being amortized over 15 years,
the term of the credit compliance period.
Income or loss of the Partnership is allocated 2% to the general
partners and 98% to the limited partners. 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.
2. MORTGAGES PAYABLE (S3100-050)
Permanent financing of the project has been provided by three
mortgages. The related notes are nonrecourse and are secured by the
Partnership's real estate.
The first mortgage is insured by the Federal Housing Administration
(FHA) and collateralized by a deed of trust on the rental property.
The mortgage bears interest at a rate of 10% and is payable in
monthly installments of $12,545 (including principal and interest)
through July 2029.
Under agreements with the mortgage lender and FHA, the Partnership
is required to make monthly escrow deposits for taxes, insurance and
replacement of project assets, and is subject to restrictions as to
operating policies, rental charges, operating expenditures and
distributions to partners.
The liability of the Partnership under the mortgage note is limited
to the underlying value of the real estate collateral plus other
amounts deposited with the lender.
SUBORDINATED MORTGAGE PAYABLE
The second mortgage, a variable interest loan through Community
Development Administration (CDA) of Maryland, is serviced by
Bogman, Inc. The note matures on July 1, 2029 and is payable as
follows:
1. Beginning August 1, 1990, fifteen annual payments of $8,500 are
due, which includes interest at 1% annum.
- ------------------------------------------------------------------------------
See the accompanying report letter. Page 11
<PAGE> 56
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
2. Beginning August 1, 2005, annual payments are due including
interest at 10%, in an amount sufficient to amortize the
principal balance over the remaining term of the loan.
SUBORDINATED PURCHASE MONEY MORTGAGE PAYABLE
This mortgage is with the Mayor and City Council of Baltimore and is
non-interest bearing. The full balance is due on September 1, 2029.
The scheduled maturities of the mortgages payable at December 31,
1998 are as follows: (S3100-x1x)
<TABLE>
<CAPTION>
YEAR ACCOUNT AMOUNT
-----------------------------------------------------------------------
<S> <C> <C>
1999 S3100-060 $ 9,945
2000 S3100-070 10,855
2001 S3100-080 11,860
2002 S3100-090 12,960
2003 S3100-100 14,000
Thereafter S3100-110 2,124,963
-----------------------------------------------------------------------
$ 2,184,583
=======================================================================
</TABLE>
3. COMMITMENTS (S3100-X3X) (S3100-240)
The Partnership has entered into regulatory agreements with HUD
which regulate, among other things, the rents which may be charged for
apartment units in the project, prohibit the sale of the project
without HUD consent, limit the annual distribution of cash flow to
the partners and otherwise regulate the relationship between the
Partnership and HUD.
The Department of Housing and Urban Development, under the U.S.
Housing Act of 1937, 42 U.S.C. 1437, and Department of Housing and
Urban Development Act, 42 U.S.C. 3531, has contracted with the
Partnership to make housing assistance payments to the Partnership
on behalf of qualified tenants. The current agreement, dated January
31, 1998, is for a term of 12 months and covers all 50 units at the
Project. The current agreement expires December 31, 1999. During
1998, the Partnership received $325,475 in tenant assistance
payments under the agreement.
- ------------------------------------------------------------------------------
See the accompanying report letter. Page 12
<PAGE> 57
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
4. RELATED PARTY TRANSACTIONS (S3100-200)
ASSET AND SUPERVISORY MANAGEMENT FEE (S3100-200)
The Project has a management agreement with Century Pacific Realty
Corporation (CPRC), the supervising general partner, which requires
a fee of $19,800 annually. The first portion of the fee ($3,000) is
to be paid out of operations. The second portion ($5,000) is to be
paid out of surplus cash (as defined by HUD). The remaining balance
and any unpaid portions of the above may be paid out of capital
transactions. As of December 31, 1998, $169,954 of this fee remains
unpaid.
INCENTIVE MANAGEMENT FEE (S3100-200)
The Project has an incentive management agreement with the managing
general partner. The fee is to be equal to 60% of surplus cash (as
defined by HUD) net of the second portion ($5,000) of the asset and
supervisory management fee. There were no fees charged nor payments
made related to this fee in 1998.
S3100-210 Century Pacific Realty Corporation
S3100-220 $3,000
S3100-210 Mt. Washington Management Group, Inc.
S3100-220 $20,229
MANAGEMENT FEE (S3100-230)
Mt. Washington Management Group, Inc., an affiliate of the general
partners, is the exclusive agent for the management of the property.
The current management agreement provides for a management fee equal
to 6% of gross collections. Total management and bookkeeping fees
incurred during 1998 were $20,229 and $6,600, respectively.
- ------------------------------------------------------------------------------
See the accompanying report letter. Page 13
<PAGE> 58
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
Notes To Financial Statements (Continued)
5. LOW-INCOME HOUSING TAX CREDITS (S3100-240)
The Partnership expects to generate an aggregate of $2,545,410 of
low-income housing tax credits. Generally, such credits are
expected to become available for use by its partners pro rata over a
ten-year period beginning in 1989. In order to qualify for these
credits, the Property must comply with various federal and state
requirements. These requirements, include, but are not limited to,
renting to low-income tenants at rental rates, which do not exceed
specified percentages of area median gross income for the first 15
years of operation.
6. GOING CONCERN (S3100-240)
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplates continuation of the Partnership as a going concern.
However, the Partnership's Housing Assistance Payments (HAP)
contract with HUD is due to expire in December, 1999 (See Note 3). No
extension to the contract has been granted as of January 26, 1999.
Management plans to begin negotiations with HUD during 1999 with the
intention of obtaining an additional term for the HAP contract. In
view of these matters, realization of a major portion of the assets
in the accompanying balance sheet is dependent upon continued
operations of the Partnership, which in turn is dependent upon the
Partnership's ability to renegotiate a new HAP contract with HUD.
The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
- ------------------------------------------------------------------------------
See the accompanying report letter. Page 14
<PAGE> 59
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
SUPPORTING DATA REQUIRED BY HUD
DECEMBER 31, 1998
REPLACEMENT RESERVE
In accordance with the provisions of the regulatory agreement, restricted
cash is held by WMF Huntoon Paige to be used for replacement of property
with the approval of HUD as follows:
<TABLE>
<S> <C>
1320P Balance at beginning of year $ 27,230
1320DT Total monthly deposits 5,910
1320ODT Other deposits 680
------------
1320OD-010 Interest Income
1320OD-020 $680
1320 Balance at end of year, confirmed by mortgagee $ 33,820
============
</TABLE>
- ------------------------------------------------------------------------------
See the accompanying report letter. Page 15
<PAGE> 60
<TABLE>
COMPUTATION OF SURPLUS CASH
DISTRIBUTIONS AND RESIDUAL
RECEIPTS
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PROJECT NAME FISCAL PERIOD ENDED: PROJECT NUMBER COLEMAN
COLEMAN MANOR ASSOCIATES LIMITED PARTNERSHIP 12/31/98 052-35464
--------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART A - COMPUTE SURPLUS CASH
- -----------------------------------------------------------------------------------------------------------------------------
CASH
- -----------------------------------------------------------------------------------------------------------------------------
1. Cash (Accounts 1120, 1170, 1191 minus Account 2105) (S1300010) $27,411
- -----------------------------------------------------------------------------------------
2. Tenant subsidy due for period covered by financial statement (1135) $
- -----------------------------------------------------------------------------------------
3. Other (describe) (S1300-030) $
- -----------------------------------------------------------------------------------------------------------------------------
(a) TOTAL CASH (Add Lines 1, 2, and 3) (S1300-040) $27,411
- -----------------------------------------------------------------------------------------------------------------------------
CURRENT OBLIGATIONS
- -----------------------------------------------------------------------------------------------------------------------------
4. Accrued mortgage interest payable (S1300-050) $14,959
- -----------------------------------------------------------------------------------------
5. Delinquent mortgage principal payments (S1300-060) $
- -----------------------------------------------------------------------------------------
6. Delinquent deposits to reserve for replacements (S1300070) $
- -----------------------------------------------------------------------------------------
7. Accounts payable - 30 days (S1300-075) $ 7,374
- -----------------------------------------------------------------------------------------
8. Loans and notes payable (due within 30 days) (S1300-080) $
- -----------------------------------------------------------------------------------------
9. Deficient tax insurance or MIP escrow deposits (S1300090) $
- -----------------------------------------------------------------------------------------
10. Accrued expenses (not escrowed) (S1300-100) $ 2,112
- -----------------------------------------------------------------------------------------
11. Prepaid revenue (2210) $ 414
- -----------------------------------------------------------------------------------------
12. Tenant security deposits liability (2191) $ 6,655
- -----------------------------------------------------------------------------------------
13. Other current obligations (Describe) (S1300-110) $
- -----------------------------------------------------------------------------------------------------------------------------
(b) TOTAL CURRENT OBLIGATIONS (Add Lines 4 through 13) (S1300-140) $31,514
- -----------------------------------------------------------------------------------------------------------------------------
(c) SURPLUS CASH <DEFICIENCY> [Line (a) minus Line (b)] (S1300150) $(4,103)
- -----------------------------------------------------------------------------------------------------------------------------
PART B - COMPUTE DISTRIBUTIONS TO OWNERS AND REQUIRED DEPOSIT TO RESIDUAL RECEIPTS
- -----------------------------------------------------------------------------------------------------------------------------
1. Surplus Cash
$ NONE
- -----------------------------------------------------------------------------------------------------------------------------
LIMITED DIVIDEND PROJECTS
- -----------------------------------------------------------------------------------------------------------------------------
2a. Annual distribution earned during fiscal period covered by the
statement (S1300-160) $
- -----------------------------------------------------------------------------------------
2b. Distribution accrued and unpaid as of the end of the prior fiscal
period (S1300-170) $
- -----------------------------------------------------------------------------------------
2c. Distributions and entity expenses paid during fiscal period covered
by statement (S1300-180) $
- -----------------------------------------------------------------------------------------
3. Distribution earned but unpaid (Line 2a plus 2b minus 2c) (S1300-190) $
- -----------------------------------------------------------------------------------------------------------------------------
4. Amount available for distribution during next fiscal period (S1300-200) $ NONE
- -----------------------------------------------------------------------------------------------------------------------------
5. Deposit due residual receipts (S1300-210) $
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
See the accompanying report letter. Page 16
</TABLE>
<PAGE> 61
<TABLE>
CENTURY PACIFIC HOUSING FUND-1
- --------------------------------------------------------------------------------------------------------------------------
SUPPORTING DATA REQUIRED BY HUD (CONTINUED)
DECEMBER 31, 1998
<CAPTION>
ASSETS ACCUMULATED DEPRECIATION
-------------------------------------------------------------- ------------------------------------
BALANCE BALANCE BALANCE
JANUARY 1, DECEMBER 31, JANUARY 1, CURRENT
1998 ADDITIONS DEDUCTIONS 1998 1998 PROVISIONS
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1410 Land $ 61,281 $ -- $ -- $ 61,281 $ -- $ --
1420 Buildings 3,426,317 -- -- 3,426,317 1,095,394 130,633
1465 Office furniture and
equipment 118,634 -- -- 118,634 100,499 5,246
- --------------------------------------------------------------------------------------------------------------------------
TOTAL $ 3,606,232 $ -- $ -- $3,606,232 $1,195,893 $ 135,879
==========================================================================================================================
<CAPTION>
ACCUMULATED DEPRECIATION
-----------------------------------------------------------------
NET
BALANCE BOOK VALUE
DECEMBER 31, DECEMBER 31,
DEDUCTIONS 1998 1998
-----------------------------------------------------------------
<S> <C> <C>
1410 Land $ -- $ -- $ 61,281
1420 Buildings -- 1,226,027 2,200,290
1465 Office furniture and
equipment -- 105,745 12,889
- ----------------------------------------------------------------------------------------------------------
TOTAL $ -- $ 1,331,772 $ 2,274,460
==========================================================================================================
- --------------------------------------------------------------------------------------------------------------------------
See the accompanying report letter. Page 17
<PAGE> 62
S2200-020 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROLS
To The Partners
Coleman Manor Associates Limited Partnership
We have audited the financial statements of Coleman Manor Associates Limited
Partnership as of and for the year ended December 31, 1998, and have issued
our report thereon dated January 26, 1999. We have also audited Coleman
Manor Associates Limited Partnership's compliance with requirements
applicable to HUD-assisted programs and have issued our reports thereon dated
January 26, 1999.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States and the Consolidated Audit Guide for Audits of
HUD Programs (the "Guide") issued by the U.S. Department of Housing and Urban
Development, Office of the Inspector General. Those standards and the Guide
require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement and
about whether Coleman Manor Associates Limited Partnership complied with laws
and regulations, noncompliance with which would be material to a major
HUD-assisted program.
In planning and performing our audits, we obtained an understanding of the
design of relevant internal controls and determined whether they had been
placed in operation, and we assessed control risk in order to determine our
auditing procedures for the purpose of expressing our opinions on the
financial statements of Coleman Manor Associates Limited Partnership and on
its compliance with specific requirements applicable to its major
HUD-assisted programs and to report on the internal control structure in
accordance with the provisions of the Guide and not to provide any assurance
on the internal control structure.
Page 18
<PAGE> 63
To The Partners
Coleman Manor Associates Limited Partnership
- ------------------------------------------------------------------------------
The management of Coleman Manor Associates Limited Partnership is responsible
for establishing and maintaining internal controls. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of internal controls. The objectives
of internal controls are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed in
accordance with management authorization and recorded properly to permit the
preparation of financial statements in accordance with generally accepted
accounting principles and that HUD-assisted programs are managed in
compliance with applicable laws and regulations. Because of inherent
limitations in any internal controls, errors, irregularities or instances of
noncompliance may nevertheless occur and not be detected. Also, projection
of any evaluation of the structure to future periods is subject to the risk
that procedures may become inadequate because of changes in conditions or
that the effectiveness of the design and operation of policies and procedures
may deteriorate.
We performed tests of controls, as required by the Guide, to evaluate the
effectiveness of the design and operation of internal controls that we
considered relevant to preventing or detecting material noncompliance with
specific requirements applicable to Coleman Manor Associates Limited
Partnership's major HUD-assisted programs. Our procedures were less in scope
than would be necessary to render an opinion on internal control.
Accordingly, we do not express such an opinion.
Our consideration of internal controls would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be
material in relation to the financial statements being audited or that
noncompliance with laws and regulations that would be material to a
HUD-assisted program may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We
noted no matters involving the internal control structure and its operations
that we consider to be material weaknesses as defined above.
This report is intended solely for the information and use of management and
the Department of Housing and Urban Development and is not intended to be and
should not be used by anyone other than these specified parties.
January 26, 1999
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<PAGE> 64
S2300-020 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS
To The Partners
Coleman Manor Associates Limited Partnership
We have audited the financial statements of Coleman Manor Associates Limited
Partnership as of and for the year ended December 31, 1998 and have issued
our report thereon dated January 26, 1999. In addition, we have audited
Coleman Manor Associates Limited Partnership's compliance with the specific
program requirements governing federal financial reports, mortgage status,
replacement reserve, security deposits, cash receipts and disbursements,
tenant application, eligibility and recertification and management functions
that are applicable to each of its major HUD-assisted programs for the year
ended December 31, 1998. The management of Coleman Manor Associates Limited
Partnership is responsible for compliance with those requirements. Our
responsibility is to express an opinion on compliance with those requirements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General
of the United States, and the Consolidated Audit Guide for Audits of HUD
Programs (the "Guide") issued by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether material noncompliance with the requirements referred to above
occurred. An audit includes examining, on a test basis, evidence about
Coleman Manor Associates Limited Partnership's compliance with those
requirements. We believe that our audit provides a reasonable basis for our
opinion.
The results of our audit procedures disclosed immaterial instances of
noncompliance with the requirements referred to above, which are described in
the accompanying Schedule of Findings and Questioned Costs. We considered
those instances of noncompliance in forming our opinion on compliance, which
is expressed in the following paragraph.
Page 20
<PAGE> 65
To The Partners
Coleman Manor Associates Limited Partnership
- ------------------------------------------------------------------------------
In our opinion, Coleman Manor Associates Limited Partnership complied, in all
material respects, with the requirements described above that are applicable
to each of its HUD-assisted programs for the year ended December 31, 1998.
This report is intended solely for the information and use of management and
the Department of Housing and Urban Development and is not intended to be and
should not be used by anyone other than these specified parties.
January 26, 1999
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<PAGE> 66
S2500-020
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION
To The Partners
Coleman Manor Associates Limited Partnership
We have audited the financial statements of Coleman Manor Associates Limited
Partnership as of and for the year ended December 31, 1998, and have issued
our report thereon dated January 26, 1999.
We have applied procedures to test Coleman Manor Associates Limited
Partnership's compliance with Fair Housing and Non-Discrimination
requirements applicable to its HUD-assisted programs, for the year ended
December 31, 1998.
Our procedures were limited to the applicable compliance requirements
described in the Consolidated Audit Guide for Audits of HUD Programs issued
by the U.S. Department of Housing and Urban Development, Office of Inspector
General. Our procedures were substantially less in scope than an audit, the
objective of which would be the expression of an opinion on Coleman Manor
Associates Limited Partnership's compliance with Fair Housing and
Non-Discrimination requirements. Accordingly, we do not express such an
opinion.
The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under the Guide.
This report is intended solely for the information and use of management and
the Department of Housing and Urban Development and is not intended to be and
should not be used by anyone other than these specified parties.
January 26, 1999
Page 22
<PAGE> 67
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (S2700-X1X)
S2700-010 * STATEMENT OF CONDITION - Management is currently
operating with no approved management agreement. An
agreement has been submitted and is awaiting approval.
Mt. Washington is currently charging 6% of cash
collected.
S2700-020 * CRITERIA - HUD requires management to obtain a current
management agreement.
S2700-030 * EFFECT - No material direct or indirect effect on the
financial statements.
S2700-040 * CAUSE - N/A
S2700-050 * RECOMMENDATION - Management should obtain a HUD approved
current management agreement.
S2700-065 Amount of Questioned Costs N/A
S2700-010 * STATEMENT OF CONDITION - No copy of an Identity of
Interest statement has been located.
S2700-020 * CRITERIA - HUD requires management to possess a copy of
an Identity of Interest statement.
S2700-030 * EFFECT - No material direct or indirect effect on the
financial statements.
S2700-040 * CAUSE - N/A
S2700-050 * RECOMMENDATION - Management should locate a copy of an
Identity of Interest statement.
S2700-065 Amount of Questioned Costs N/A
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<PAGE> 68
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) (S2700-X1X)
S2700-010 * STATEMENT OF CONDITION - Client has fidelity bond
coverage; however, it is not enough to cover two months'
gross potential rent. It should be noted that it is
enough to cover two months' rent collected by the
on-site manager.
S2700-020 * CRITERIA - HUD requires management to obtain fidelity
bond coverage equal to or greater than two months' gross
potential rent.
S2700-030 * EFFECT - No material direct or indirect effect on the
financial statements.
S2700-040 * CAUSE - N/A
S2700-050 * RECOMMENDATION - Management should obtain coverage of at
least $62,120.
S2700-065 Amount of Questioned Cost
Shortage of $12,120
S2700-010 * STATEMENT OF CONDITION - Client does not possess any
support of HUD approval for the accounting charge of
$11/unit/month.
S2700-020 * CRITERIA - HUD requires management to perform support
analysis or obtain HUD approval for any charges.
S2700-030 * EFFECT - No material direct or indirect effect on the
financial statements.
S2700-040 * CAUSE - N/A
S2700-050 * RECOMMENDATION - Management should either obtain HUD
approval for accounting charges or perform support
analysis on the fee charged.
S2700-065 Amount of Questioned Costs
$6,600
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<PAGE> 69
CENTURY PACIFIC HOUSING FUND-1
- ------------------------------------------------------------------------------
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) (S2700-X1X)
S2700-010 * STATEMENT OF CONDITION - The security deposit account
was $273 less than the related liability at December 31,
1998.
S2700-020 * CRITERIA - HUD requires the funds in the security
deposit account to equal or exceed the related liability
on a continuous basis.
S2700-030 * EFFECT - No material direct or indirect effect on the
financial statements.
S2700-040 * CAUSE - Funds were not being transferred from the
operating account to the security deposit account in a
timely manner.
S2700-050 * RECOMMENDATION - Management should monitor tenants'
security deposits more closely to ensure adequate funds
are maintained in the security deposit account.
S2700-065 Amount of Questioned Costs
Under funded by $273
S2700-010 * STATEMENT OF CONDITION - Client could not locate 3 out of
10 invoices requested for cash disbursement testing.
S2700-020 * CRITERIA - HUD requires invoices to be examined in
connection with cash disbursement testing.
S2700-030 * EFFECT - No material direct or indirect effect on the
financial statements.
S2700-040 * CAUSE - N/A
S2700-050 * RECOMMENDATION - Client should keep invoices readily
available for inspection.
S2700-065 Amount of Questioned Costs N/A
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<PAGE> 70
CENTURY PACIFIC HOUSING FUND-1
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AUDITORS' COMMENT(S) ON AUDIT RESOLUTION
MATTERS RELATING TO THE HUD PROGRAMS (S2800-X1X)
S2800-010 Narrative
Management was unable to provide a current management
agreement and/or "Identity of Interest Statement"
stating the current management fees.
S2800-020 Status
OUTSTANDING - repeated comments this year.
S2800-030 Reporting Period
12/31/97
S2800-010 Narrative
Fidelity bond coverage is not at least equal to two
months' gross potential rent collections.
S2800-020 Status
OUTSTANDING - repeated comment this year.
S2800-030 Reporting Period
12/31/97
S2800-010 Narrative
In one tenant file reviewed, the rental application was
not signed.
S2800-020 Status
CLEARED.
S2800-030 Reporting Period
12/31/97
S2800-010 Narrative
In one tenant file reviewed, the security deposit amount
stated in the lease does not agree to the rent roll.
S2800-020 Status
CLEARED.
S2800-030 Reporting Period
12/31/97
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<PAGE> 71
S2900-010 MORTGAGOR'S CERTIFICATION
S2900-020 Name of Signatory #1-------------------------------------------
*S2900-030 Name of Signatory #2 (if required)-----------------------------
* For all owning entities other than a sole proprietor or a limited
partnership, this field is required.
S2900-040 Auditee Telephone Number---------------------------------------
S2900-050 Date of Certification------------------------------------------
------------------------------------------
Signature Date
------------------------------------------
Signature Date
52-1565644
------------------------------------------
Federal Identification Number
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<PAGE> 72
(S3000-010) MANAGEMENT AGENT'S CERTIFICATION
We hereby certify that we have examined the accompanying financial statements
and supplemental data of Coleman Manor Associates Limited Partnership and, to
the best of our knowledge and belief, the same is complete and accurate.
Mt. Washington Management Group, Inc.
--------------------------------------------------
Name of Managing Agent (S3000-020) Date
--------------------------------------------------
Name of Signatory (S3000-030)
52-1618787
--------------------------------------------------
Management Agent TIN (S3000-040)
Eldamae Ingram
--------------------------------------------------
Name of Individual (i.e., Property Manager)
(S3000-050)
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<PAGE> 73
AUDITOR'S TRANSMITTAL LETTER
S3200-010 Audit Firm Rubin, Brown, Gornstein & Co. LLP
------------------------------------------------
S3200-020 Lead Auditor First Name Lawrence
--------------------------------
S3200-030 Lead Auditor Middle Name Edward
----------------------------------
S3200-040 Lead Auditor Last Name Rubin
--------------------------------
S3200-050 Auditor Street Address Line 1 230 South Bemiston Avenue
------------------------------
S3200-060 Auditor Street Address Line 2
------------------------------
S3200-070 Auditor City St. Louis
-----------------------------------------------
S3200-080 Auditor State Missouri
----------------------------------------------
S3200-090 Auditor Zip Code 63105
-------------------------------------------
S3200-100 Auditor Zip Code Extension
--------------------------------
S3200-110 Auditor Telephone Number (314) 727-8150
-----------------------------------
S3200-120 Auditor Firm TIN 43-0765316
-------------------------------------------
S3200-130 Date of Submission
----------------------------------------
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Page 29
</TABLE>
