SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] Annual report pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
For the fiscal year ended March 31, 2000 or
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[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
For the transition period from ________ to ________
Commission file number 0-17696
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AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2992309
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Boston Place, Suite 2100, Boston, MA 02108-4406
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code (617)624-8900
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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None None
----------------------------------- -------------------------
Securities registered pursuant to Section 12(g) of the Act:
Class A Limited Partner Interests
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for 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
----- -----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K( 229.405 of this chapter)
is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. __
|xx|
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of the Registrant are incorporated by
reference:
Form 10-K
Parts Documents
--------- ---------
Parts III and IV Prospectus of the registrant dated
September 22, 1988, as supplemented
AMERICAN AFFORDABLE HOUSING II LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED
March 31,2000
TABLE OF CONTENTS
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote
of Security-Holders
PART II
Item 5. Market for the Registrant's Class A Limited Partner
Interests and Related Security-Holder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers
of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial
Owners and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
Signatures
PART I
Item I. Business
American Affordable Housing II Limited Partnership (the
"Partnership") is
a limited partnership which was formed under the laws of the
Commonwealth of
Massachusetts on May 13, 1987. The general partners of the
Partnership are
Boston Capital Associates Limited Partnership, a Massachusetts
limited
partnership, and C & M Associates, d/b/a Boston Capital
Associates, a
Massachusetts general partnership (the "General Partners"). The
Partnership
was formed to acquire limited partner interests in limited
partnerships (the
"Operating Partnerships"), each of which was to own and operate
an apartment
complex for low- and moderate income tenants. Each apartment
complex
qualified for the low-income housing tax credit under Section 42
of the
Internal Revenue Code of 1986, as amended, (the "Code"), and some
apartment
complexes also qualified for the historic rehabilitation tax
credit under
Section 48 of the Code. Section 236 (f) (ii) of the National
Housing Act, as
amended, in Section 101 of the Housing and Urban Development Act
of 1965, as
amended, each provide for the making by HUD of rent supplement
payments to low
income tenants in properties which receive other forms of federal
assistance
such as Tax Credits. The payments for each tenant, which are
made directly to
the owner of their property, generally are in such amounts as to
enable the
tenant to pay rent equal to 30% of the adjusted family income.
Some of the
Apartment Complexes in which the Partnership has invested are
receiving such
rent supplements from HUD.
HUD has been in the process of converting rent supplement
assistance to
assistance paid not to the owner of the Apartment Complex, but
directly to
the individuals. At this time, the Partnership is unable to
predict whether
Congress will continue rent supplement programs payable directly
to owners of
the Apartment Complex.
The investment objectives of the Partnership are (i) to
provide Investors
with tax benefits during the first ten years of operations in the
form of (a)
low-income housing and historic rehabilitation tax credits which
may be
applied against the Investors' Federal income tax liability
arising from, in
the case of individuals, active and portfolio income on a limited
basis from
passive income, and in the case of corporations, against Federal
income tax
liability from active and passive income and, as to certain
corporations,
against all income and (b) passive losses which may be used to
reduce an
Investor's income in the same manner, (ii) to preserve and
protect the capital
of the Partnership, (iii) provide long-term capital appreciation
through
increases in the value of the Partnership's investments, and (iv)
provide cash
distributions from Capital Transaction proceeds. The General
Partners are
currently of the belief that the Partnership's investment
objectives will be
met. Current distributions are not an investment objective of
the
Partnership.
The offering of Class A Limited Partner interests (the
"Units") in the
Partnership (the "Public Offering") began on February 2, 1988 and
was
concluded on September 21, 1988. Investors purchasing 26,501
Units
contributed $26,501,000 to the Partnership. The Partnership held
interests in
49 Operating Partnerships at March 31, 2000. See Item 2.
1
Item 2. Properties
As of its fiscal year ending March 31, 2000, the Partnership
held Limited
Partnership interests in the Operating Partnerships described
below. In each
instance the Apartment Complex owned by the applicable Operating
Partnership
is eligible for the Federal Housing Tax Credit. Occupancy of a
unit in each
Apartment Complex which initially complied with the Minimum
Set-Aside Test
(i.e., occupancy by tenants with incomes equal to no more than a
certain
percentage of area median income) and the Rent Restriction Test
(i.e., gross
rent charged tenants does not exceed 30% of the applicable income
standards)
is referred to hereinafter as "Qualified Occupancy." Each of the
Operating
Partnerships and each of the respective Apartment Complexes are
described more
fully in the Prospectus or applicable report on Form 8-K. The
General
Partners believe that there is adequate casualty insurance on the
properties.
Please refer to Item 7. "Management's Discussion and Analysis
of Financial
Condition and Results of Operations" for a more detailed
discussion of
operational difficulties experienced by certain of the Operating
Partnerships.
2
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 2000
Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/99 Completion
3/31/00 uted
----------------------------------------------------------------
-------------
Anacapa Lake Havasu,
Apartments AZ 40 $1,419,469 4/88
100% $348,915
Anthony Garden Green Valley,
Apartments AZ 100 3,854,588 3/89
100% 751,267
Blairview Blairsville, 42
Apartments PA 1,424,846 12/88
100% 308,388
Bloomfield Bloomfield,
Apartments MO 16 366,824 6/88
100% 62,878
Boardman Lake Travers City,
II Apartments MI 32 974,163 5/89
100% 202,700
Bowdoinham Bowdoinham,
Estates ME 25 1,272,298 5/89
100% 308,824
Brookhollow Brookshire,
Apartments TX 48 890,626 8/88
100% 160,000
Center Way Shelbyville,
Apartments TN 20 608,328 7/88
100% 136,620
Carthage Carthage,
Court NY 32 1,271,232 10/88
100% 270,000
Casa Belen,
Valencia NM 39 1,478,517 12/88
100% 303,000
Cedar Forest Brewton,
Apartments AL 33 948,495 6/88
100% 219,696
Charters Cove St. Ignace,
Apartments MI 24 768,089 5/88
100% 166,200
Deer Crossing Farmington,
Apartments ME 24 1,176,665 4/89
100% 312,920
3
American Affordable Housing II Limited
Partnership
PROPERTY PROFILES AS OF March 31, 2000
Continued
---------
Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/99 Completion
3/31/00 uted
-----------------------------------------------------------------
-------------
East Ridge Southwest Harbor,
Estates ME 25 $1,245,805 9/88
100% $294,771
Fredericktown Fredericktown,
Apartments II MO 16 368,954 5/88
100% 79,670
Harbor Hill Bar Harbor,
Estates ME 25 1,214,289 2/89
100% 325,500
Harbour Oaks East China,
Apartments MI 32 893,956 11/88
100% 191,500
Harvest View Garden City,
MO 16 381,709 6/88
100% 86,785
Kersey Kersey,
Apartments CO 32 1,200,725 10/88
100% 226,000
Kingsley Park Essex,
Apartments MD 312 9,817,656 10/88
100% 1,750,000
Liberty Center Jacksonville,
FL 109 1,075,830 10/88
100% 1,014,770
Malone Senior Malone,
Housing NY 40 1,475,345 11/88
98% 309,000
Maple Tree Mapleton,
Estates ME 25 1,231,242 4/89
100% 325,500
Michelle Manor Green Valley,
Apartments AZ 24 903,157 9/88
100% 174,264
Middleburg Bluffs Middleburg,
FL 45 1,407,240 3/89
100% 375,283
4
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 2000
Continued
--------- Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/99 Completion
3/31/00 uted
-----------------------------------------------------------------
-------------
Nicollete Minneapolis,
Island Homes MN 22 $1,080,431 12/88 100%
$713,000
Paige Hall Minneapolis,
Apartments MN 69 2,253,150 4/89 100%
472,336
Partridge McMinnville,
Meadows TN 48 1,393,074 10/88 98%
296,461
Perramond Madawaska,
Estates ME 25 1,176,556 4/89 100%
287,000
Pine Knoll Smithfield,
Manor NC 33 1,354,572 5/89 100%
309,450
Pine Ridge Port St. Joe,
Apartments FL 50 1,473,827 6/88 100%
384,180
Pine Terrace Callahan,
Apts. Phase III FL 40 1,186,921 1/89 100%
309,500
Platteville Platteville,
Apartments CO 16 542,730 10/88 100%
120,000
River Place Holyoke,
Apartments MA 100 4,028,429 3/89 100%
1,824,000
Sara Pepper Dixfield,
Place ME 12 631,235 3/88 100%
171,189
Silver Pines Fryburg,
Apartments ME 25 1,373,754 8/88 100%
351,547
South Estates Nebraska City,
NE 15 416,760 7/88 100%
85,911
South View III Marionville,
MO 8 193,010 5/88 100%
42,100
5
American Affordable Housing II Limited Partnership
PROPERTY PROFILES AS OF March 31, 2000
Continued
--------- Mortgage
Balance Construc-
Qualified Capital
As of tion
Occupancy Contrib-
Property Name Location Units 12/31/99 Completion
3/31/00 uted
-----------------------------------------------------------------
-------------
Southview Place Lovington,
Apts NM 48 $1,085,725 2/89 100%
$245,602
Spring Hollow Springfield,
Apartments GA 52 1,432,134 3/88 100%
321,860
Stokes Rowe Philadelphia,
PA 16 1,054,279 6/88 100%
673,000
Story Hill Washburn,
Estates ME 24 1,206,579 1/89 100%
322,425
Suncrest Newport,
Apartments TN 32 966,275 5/88 97%
210,960
Lodging House at Boston,
300 Shamut Ave., MA 15 632,191 12/88 100%
508,000
The
Village Chase Zephyrhills,
Apts FL 48 1,482,188 4/89 100%
386,368
Village Walk Zephyrhills,
Apartments FL 43 1,387,435 3/89 100%
362,500
Washington Mews Dorchester,
MA 20 818,712 12/88 100%
510,000
Wildwood Statesboro,
Villas II GA 58 1,469,259 9/88 100%
369,260
Willowbrook Immokalee,
Place FL 41 1,313,544 3/88 100%
328,711
6
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
7
PART II
Item 5. Market for the Registrant's Class A Limited Partner
Interests and Related Security-Holder Matters
There is no established public trading market for the
Units and it is
not anticipated that any public market will develop for the
purchase and sale
of any Units.
As of March 31, 2000, the Partnership had 2,370 registered
holders of
an aggregate of 26,501 Units.
The Partnership made no distributions to its Limited
Partners from
Operating Partnership cash flow from its inception on May 13,
1987 through
March 31, 2000. Because the Partnership invested in Operating
Partnerships
owning apartment complexes which receive government assistance,
the cash
distributions which may be made by the Operating Partnerships are
often
restricted. The Partnership does not anticipate that it will
provide
significant cash distributions to its Limited Partners in
circumstances other
than refinancing or sale of apartment complexes by the Operating
Partnerships.
8
Item 6. Selected Financial Data
The information set forth below presents selected
financial data of the
Partnership for each of the years in the five year period ended
March 31,
2000. Additional detailed financial information is set forth in
the audited
financial statements listed in Item 14 hereof.
March 31, March 31, March 31, March
31, March 31,
2000 1999 1998 1997
1996
-------- -------- -------- --------
--------
Operations
----------
Interest Income $ 1,604 $ 203 $ 331 $ 743
$ 783
Other Income 7,070 7,894 6,355 1,470
- Share of Losses
from Operating
Partnerships (373,152) (418,312) (383,653)
(795,677) (1,047,309)
Operating Expenses (470,987) (483,891) (478,740)
(477,380) (516,882) --------- --------- -
--------- ---------- ----------
Net Loss $ (835,465)$ (894,106)$ (855,707)
$(1,270,844)$(1,563,408)
========= ========= ========== ==========
==========
Net Loss per Unit of
Limited Partnership
Interest $ (31.21)$ (33.40) $ (31.97) $
(47.48)$ (58.40) ========= =========
=========== ========== ==========
March 31, March 31, March 31, March
31, March 31,
Balance Sheet 2000 1999 1998 1997
1996 ------------- -------- -------- --------
-------- --------
Total Assets $ 2,230,488 $2,602,756 $ 3,022,949 $ 3,409,282
$ 4,274,839
========= ========== ========== ==========
==========
Total Liabilities $ 4,949,165 $4,485,968 $ 4,012,055 $ 3,542,681
$ 3,137,394
========= ========== ========== ==========
==========
Partners' Equity $(2,718,677)$(1,883,212)$ (989,106) $ (133,399)
$ 1,137,445
(Deficit) ========= ========== ========== ==========
==========
Other Data
----------
Credit Per BAC* $ 6.69 $ 103.96 $ 129.93 $ 130.05
$ 114.28
======== ========= ========== ==========
==========
* The credit per BAC data is reported for the calendar year
which ends in the
third quarter of the related fiscal year.
9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity
---------
The Partnership's primary source of funds was the proceeds of
its Public
Offering. Other sources of liquidity have included (i) interest
earned on
capital contributions held pending investment or held for working
capital
reserves and (ii) cash distributions, if any, from operations of
the Operating
Partnerships in which the Partnership has invested. Both of
these sources of
liquidity are available to meet the obligations of the
Partnership. The
Partnership is currently accruing the annual asset management
fees. Asset
management fees accrued during the year ended March 31, 2000 were
$436,961
and total asset management fees accrued as of March 31, 2000 were
$4,711,651.
Pursuant to the Partnership Agreement, such liabilities will be
deferred until
the Partnership receives sale or refinancing proceeds from
Operating
Partnerships, and at that time proceeds from such sales or
refinancing would
be used to satisfy such liabilities.
Affiliates of the General Partners have advanced $182,784 to
the
Partnership to pay certain operating expenses. This and any
additional
advances will be repaid, without interest, from available cash
flow, reporting
fees or the proceeds of sales or refinancing of the Partnership's
interests in
Operating Partnerships. Cash flow and reporting fees will be
added to the Partnership's Working Capital and will be available
to meet future third party obligations of the Partnership. The
Partnership is currently pursing, and will continue to
aggressively pursue, available cash flow and reporting fees. No
significant distributions of cash flow from the Operating
Partnerships are anticipated on a long term or short term basis
due to the restrictions on rents which apply to low-income
apartment complexes.
During 1995 an affiliate of the General Partners funded
$100,375,
interest free, to the Partnership so that it could make a
$100,375 loan to the
Operating Partnership Washington Mews. The loan enabled the
Operating
Partnership to refinance its mortgage at a more favorable rate,
and will be
repaid by the Operating Partnership with surplus cash from
operations. As repayments are received from Washington Mews,
they will be used to repay the funding, free of interest, from
the General Partners' affiliate. As of March 31, 2000 Washington
Mews has paid the Partnership $60,375. This has been repaid to
the affiliate leaving a balance of $40,000 as of March 31, 2000.
Capital Resources
-----------------
The Partnership received $26,501,000 in subscriptions for
Units (at $1,000
per Unit) during the period February 2, 1988 to September 21,
1988 pursuant to
the Public Offering, resulting in net proceeds available for
investment in
Operating Partnerships (after payment of acquisition fees and
expenses and
10
funding of a reserve) of approximately $18,550,700. As of March
31, 2000, the
Partnership had committed to investments requiring cash payments
of
$18,613,793, all of which has been paid. At March 31, 2000, the
Partnership
held working capital of $12,021. Since the Partnership has
completed funding
of all investments, it anticipates that there should be no
significant need
for capital resources in the future.
Results of Operations
---------------------
The Partnership was formed with the investment objectives
set forth above under Item 1. The Partnership incurs an annual
asset management fee to Boston Capital Asset Management Limited
Partnership in an amount equal to 0.5% of the
aggregate cost of the apartment complexes owned by the Operating
Partnerships,
less the amount of certain partnership management and reporting
fees paid or
payable by the Operating Partnerships. The annual asset
management fee
incurred for the fiscal years ended March 31, 2000 and 1999 was
$423,001 and
$420,831, respectively. Because the Partnership is not expected
to receive
any significant cash flow from the Operating Partnerships in
subsequent years,
the annual asset management fee is currently being deferred and
is expected to
be paid from the proceeds of sales or refinancing of the
Partnership's
interests in Operating Partnerships.
The Partnership expects that all of its cash receipts will be
used to pay third party operating expenses. The Partnership had
interest income of $1,604 and $203 in the fiscal years ended
March 31, 2000 and 1999, respectively. During the fiscal years
ended March 31, 2000 and 1999, the Partnership received $8,350
and $4,676, respectively, in distributions of cash flow and
$13,960 and $16,130,respectively, of reporting fees from the
Operating Partnerships. Of the total cash flow received in the
fiscal years ended March 31, 2000 and 1999,$7,070 and $ 4,394,
respectively, was recorded as miscellaneous income instead of as
a decrease in Investments in Operating Limited Partnerships, due
to the equity method of accounting. No other significant sources
of income are anticipated.
As of March 31, 2000 and 1999 the Partnership held limited
partnership
interests in 49 and 50 Operating Partnerships, respectively. In
each instance the Apartment Complex owned by the applicable
Operating Partnership is eligible for the Federal Housing Tax
Credit. Occupancy of a unit in each Apartment Complex which
initially complied with the Minimum Set-Aside Test (i.e.,
occupancy
by tenants with incomes equal to no more than a certain
percentage of area median income) and the Rent Restriction Test
(i.e., gross rent
charged tenants does not exceed 30% of the applicable income
standards)
is referred to hereinafter as "Qualified Occupancy". Each of the
Operating
Partnerships and each of the respective Apartment Complexes are
described more
fully in the Prospectus or applicable report on Form 8-K. The
General
Partners believe that there is adequate casualty insurance on the
properties.
As of March 31, 2000 and 1999 the Qualified Occupancy for the
Partnership was 99.8%. The Partnership had a total of 49
properties at March 31,2000, of which 46 were at 100% qualified
occupancy.
11
For the years ended December 31, 1999 and 1998 the Operating
Partnerships
reflected a net income of $483,315 and $765,577, respectively,
when adjusted for depreciation which is a non-cash item.
For the tax year ended December 31, 1999 and 1998 the
Partnership generated $2,414,733 and $2,954,474, respectively, in
passive income tax losses that were passed through to the
investors and also provided $7 and $104, respectively, in tax
credits per BAC to the investors. The Operating Partnerships
were allocated tax credits for 10 years. Based on each Operating
Partnership's lease-up, the total credits could be spread over as
many as 13 years. In cases where the actual number of years is
more than 10, the credits delivered in the early and later years
will be less than the maximum allowable per year. The decrease
in credits provided for the year 1999 mainly resulted from the
fact that a large number of the Operating Partnerships were in
their next to last or final year of credit in 1999. The decrease
was also due in part to the recapture of a portion of the credits
provided by Fairbanks Flats Limited Partnership (Fairbanks Flats
Apartments) in prior tax years. As previously reported in the
Investment Partnership's 10-Q, Fairbanks Flats was foreclosed on
in the third quarter of 1999. The decrease in tax credits
generated per BAC is expected to continue into calendar year
2000, as the rest of the Operating Partnerships complete their
respective credit periods.
Historically, the financial statements of Rouse Stokes Rowe
Housing Associates, L.P. have been prepared assuming that the
Operating Partnership will continue as a going concern. Despite
high occupancy, the property suffers from cash flow deficits
related to excessive operating expenses. As a result, both of
the Operating Partnership's mortgages are in technical default
for non-payment and as such the entire balance has been
classified as a current liability. (The first permanent loan is
payable to the stockholder of Southwark Realty, an affiliate of
the Operating General Partners). To date, efforts to reduce
operating expenses have not been successful. Due to its small
size, the property has been unable to take advantage of
efficiencies of scale, which might lower expenses and improve
operations. In May 2000, a third party consultant hired by the
Investment General Partner conducted a site visit and tenant file
review at the property. The findings included recommendations for
tax credit training for the management company and consultation
with the local housing authority aimed at improving the contents
of the tenant files. The Investment General Partner intends to
work with the Operating General Partner and third party
consultant to implement the recommendations contained in the site
visit report.
Occupancy at Lovington Housing Associates, L.P. (Southview
Place Apartments) has experienced a downturn during the past
four quarters. The local economy and tenant population were
adversely impacted by the decline of local oil production. The
management company has indicated that any improvements in the
property is contingent on the recovery of the local economy.
Western States Housing was unsuccessful in obtaining financing
for deferred maintenance items which primarily consist of
interior and exterior painting. As such, the completion of these
items will be funded through the replacement reserve account and
operating cash as it becomes available. Although the replacement
reserve account is under funded, the property remains in
compliance with a workout plan to cure the deficit. A site visit
performed by a third party consultant in November, 1999 confirmed
the existence of these deferred maintenance items.
12
In May 1999, the General Partner of the Investment Limited
Partnership received a copy of a Notice of Acceleration and
Demand for Payment, filed by the United States Department of
Agriculture (USDA) for East Ridge Associates Limited Partnership
(East Ridge Estates). The General Partner of the Operating
Partnership filed an appeal with the National Appeals in November
1999 and the decision to accelerate the mortgage was upheld by
the USDA National Appeals Division on January 31,2000. The
partnership continues to suffer from ongoing operating deficits,
a delinquent mortgage, under funded reserves, and low occupancy.
The General Partner of the Operating Partnership is currently
working with Maine Rural Development to develop a strategy to
address the current problematic areas. The Operating
Partnership's average physical occupancy for 1999 was 78% and for
the first quarter of 2000 was 83%. The Low occupancy at the
project has resulted from the expiration of a rental assistance
contract with Maine State Housing Authority. The Operating
General Partner's most recent work out plan is on hold pending
the final approval of the management company, which is affiliated
with the Operating General Partner. The Investment General
Partner will continue to monitor the negotiations between the
Operating General Partner and Maine Rural Development.
13
Recent Accounting Statements Not Yet Adopted
--------------------------------------------
In December 1999, the Financial Accounting Standards Board
(FASB) issued SFAS No. 136, "Transfers of Assets to a Not-For-
Profit Organization or Charitable Trust that Raises of Holds
Contributions for Others," and in June 1999, the FASB issued SFAS
No. 137, "Accounting for Derivative Instruments and Hedgers
Activities-Deferral of the Effective Date of SFAS No. 133".
SFAS No. 136 is generally effective for periods beginning
after December 15, 1999 and SAFS 137 is effective upon issuance
in June 1999.
The Fund does not have any derivative or hedging activities
and is not a not-for-profit organization. Consequently, these
pronouncements are not expected to have any effect on the Fund's
financial statements.
Year 2000 Compliance
--------------------
Boston Capital and its management did not experience any
computer-related problems as a result of the century date change
known as the "Year 2000" or "Y2K"and therefore, there was no
impact on our investors.
Recent Accounting Statements Not Yet Adopted
Item 7A. Quantitative and Qualitative Disclosure About Market
Risk - Not Applicable
Item 8. Financial Statements and Supplementary Data
The financial statements of the Partnership are listed in
Item 14 as being
filed as a part of this Report and are incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and
Financial Disclosure
None.
14
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
(a), (b), (c), (d) and (e)
The Partnership has no directors or executives officers of
its own. The
following biographical information is presented for the partners
of the
General Partners and affiliates of those partners (including
Boston Capital
Partners, Inc. ("Boston Capital")) with principal responsibility
for the
Partnership's affairs.
Herbert F. Collins, age 70, is co-founder and Chairman of
the Board of Boston Capital Corporation. Nominated by President
Clinton and confirmed by the United States Senate, Mr. Collins
served as the Republican private sector member of the Thrift
Depositor Protection Oversight Board. During 1990 and 1991 he
served as Chairman of the Board of Directors for the Federal Home
Loan Bank of Boston, a 314-member, $12-billion central bank in
New England. Mr. Collins is co-founder and past president of the
Coalition for Rural Housing and Development. In the 1980s he
served as Chairman of the Massachusetts Housing Policy Commission
to evaluate current programs and recommend future housing policy.
Additionally, he served as a member of the Board of Directors of
the Metropolitan Boston Housing Partnership and on the Mitchell-
Danforth Task Force, which helped structure the 1990 federal Tax
Credit legislation. Mr. Collins is also a past member of the
Board of Directors of the National Leased Housing Association and
has served as member of the U.S. Conference of Mayors Task Force
on "HUD and the Cities: 1995 and Beyond." Mr. Collins also was a
member of the Fannie Mae Housing Impact Advisory Council and the
Republican Housing Opportunity Caucus. He is Chairman of the
Business Advisory Council, and a member of the National Council
of State Housing Agencies Tax Credit Commission. Mr. Collins
graduated from Harvard College. President Bush appointed him to
the President's Advisory Committee on the Arts at the John F.
Kennedy Center for the Performing Arts. He is a leader in the
civic community, serving on the Boards of Youthbuild Boston, the
Pine Street Inn and the I Have a Dream Foundation.
John P. Manning, age 51, is co-founder, President and Chief
Executive Officer of Boston Capital Corporation, where he is
primarily responsible for strategic planning and business
development. In addition to his responsibilities at Boston
Capital, Mr. Manning is a proactive leader in the industry. He
served in 1990 as a member of the Mitchell-Danforth Task Force,
to review and reform the Low Income Housing Tax Credit. He was
the founding President of the Affordable Housing Tax Credit
Coalition, is a former member of the board of the National Leased
Housing Association and sits on the Advisory Board of the
publication Housing and Development Reporter. During the 1980s
he served as a member of the Massachusetts Housing Policy
Committee, as an appointee of the Governor of Massachusetts. In
addition, Mr. Manning has testified before the U.S. House Ways
and Means Committee and the U.S. Senate Finance Committee, on the
critical role of the private sector in the success of the Low
Income Housing Tax Credit Program. In 1996, President Clinton
appointed him to the President's Advisory Committee on the Arts
at the John F. Kennedy Center for the Performing Arts. In 1998,
President Clinton also appointed Mr. Manning to the President's
Export Council, which is the premiere committee comprised of
major corporate CEOs to advise the President in matters of
foreign trade.
15
Mr. Manning is also a member of the Board of Directors of the
John F. Kennedy Presidential Library in Boston. In the civic
community, Mr. Manning is a leader, serving on the Board of
Youthbuild Boston. Mr. Manning is a graduate of Boston College.
Richard J. DeAgazio, age 55, is Executive Vice President of
Boston Capital Corporation, Inc., and is President of Boston
Capital Services, Inc., Boston Capital's NASD registered
broker/dealer. Mr. DeAgazio formerly served on the national
Board of Governors of the National Association of Securities
Dealers (NASD), He currently serves as a member of the National
Adjudicatory Council of the NASD. He was the Vice Chairman of
the NASD's District 11 Committee, and served as Chairman of the
NASD's Statutory Disqualification Subcommittee of the National
Business Conduct Committee. He also served on the NASD State
Liaison Committee and the Direct Participation Program Committee.
He is a founder and past President of the National Real Estate
Investment Association, past President of the Real Estate
Securities and Syndication Institute (Massachusetts Chapter) and
the Real Estate Investment Association. Prior to joining Boston
Capital in 1981, Mr. DeAgazio was the Senior Vice President and
Director of the Brokerage Division of Dresdner Securities (USA),
Inc., an international investment banking firm owned by four
major European banks, and was a Vice President of Burgess &
Leith/Advest. He has been a member of the Boston Stock Exchange
since 1967. He is on the Board of Directors of Kelmoore
Investment Company and Kansas City Technologies, Inc. He is a
leader in the community and serves on the Business Leaders
Council of the Boston Symphony, Board of Directors of Junior
Achievement of Massachusetts, the Board of Advisors for the Ron
Burton Training Village and is on the Board of Corporators of
Northeastern University. He graduated from Northeastern
University.
Christopher W. Collins, age 43, is an Executive Vice
President and a principal of Boston Capital Partners, Inc., and
is responsible for, among other areas, overseeing the investment
portfolio of funds sponsored by Boston Capital and the
acquisition of real estate investments on behalf of such funds.
Mr. Collins has had extensive experience in real estate
development activities, having founded and directed the American
Development Group, a comprehensive real estate development firm,
and has also had extensive experience in the area of acquiring
real estate investments. He is on the Board of Directors of the
National Multi-Housing Council and a member of the Massachusetts
Housing Finance Agency Multi-Family Advisory Committee. He
graduated from the University of New Hampshire.
Anthony A. Nickas, age 39, is Chief Financial Officer of
Boston Capital Partners, Inc., and serves as Chairman of the
firm's Operating Committee. Mr. Nickas is responsible for all
the financial, accounting and operational functions of Boston
Capital and has spent the past thirteen years in the real estate
syndication and investment business. His prior responsibilities
at Boston Capital included management of finance and accounting
for the project development and property management affiliates.
Prior to joining Boston Capital in 1987, he was Assistant
Director of Accounting and Financial Reporting for the Yankee
Companies, Inc., and was an Audit Supervisor for Wolf & Company
of Massachusetts, P.C., a regional certified public accounting
firm based in Boston. He graduated with honors from Norwich
University.
16
(f) Involvement in certain legal proceedings.
None.
(g) Promoters and control persons.
None.
Item 11. Executive Compensation
(a), (b), (c), (d) and (e)
The Partnership has no officers or directors. However, under
the terms of
the Amended and Restated Agreement and Certificate of Limited
Partnership of
the Partnership, the Partnership has paid or accrued obligations
to the
General Partners and their affiliates for the following fees
during the 2000
fiscal year:
1. An annual asset management fee based on .5 percent of the
aggregate
cost of all apartment complexes acquired by the Operating
Partnerships has
been accrued as payable to Boston Capital Asset Management
Limited Partnership The annual asset management fee accrued
during the year ended March 31, 2000 was $436,961. The fee is
payable without interest as sufficient funds become available.
2. The Partnership has accrued as payable to affiliates of
the General Partners a total of $4,431 for amounts charged to
operations during the year ended March 31, 2000. The charges
include, but may not be limited to postage,
printing, travel, and overhead allocations.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The General Partners named in Item 1 own all of the
outstanding general
partner interests in the Partnership. The General Partners have
a 1% interest
in all profits, losses, tax credits and distributions of the
Partnership. No
person is known to own beneficially in excess of 5% of the
outstanding limited
partnership interests. In addition, no individuals listed in
Item 10 are
known to own any units.
Item 13. Certain Relationships and Related Transactions
The Partnership has no officers or directors. However, under
the terms of
the Public Offering, various kinds of compensation and fees are
payable to the
General Partners and their affiliates during the organization and
operation of
the Partnership. Additionally, the General Partners will receive
distributions from the Partnership if there is cash available for
distribution
or residual proceeds as defined in the Partnership Agreement.
The amounts and
kinds of compensation and fees are described on pages 9 to 11 of
the
Prospectus under the caption "Compensation of General Partners
and Affiliate",
which is incorporated herein by reference. See Note B of Notes
to Financial
Statements in Item 14 of this Annual Report on Form 10-K for
amounts accrued
or paid to the General Partners and their affiliates during the
period from
April 1, 1993 through March 31, 2000.
17
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form
8-K
(a) 1. Financial Statements
--------------------
American Affordable Housing II Limited Partnership
Independent Auditors' Report
Balance Sheets, March 31, 2000 and 1999
Statements of Operations, Years ended March 31, 2000, 1999
and 1998
Statements of Changes in Partners' Capital, Years ended
March 31,
2000, 1999, and 1998
Statements of Cash Flows, Years ended March 31, 2000, 1999
and 1998
Notes to Financial Statements, Years ended March 31, 2000,
1999
and 1998
Liberty Center, Ltd.
Independent Auditors' Report
Balance Sheets, December 31, 1999 and 1998
Statements of Operations, Years ended December 31, 1999 and
1998
Statements of Cash Flow, Years ended December 31, 1999 and
1998
Statements of Changes in Partners' Capital, Years ended
December 31,
1999 and 1998
Notes to Financial Statements, Years ended December 31,
1999 and
1998
18
Riverplace Apartments
Independent Auditors' Report
Balance Sheets, December 31, 1999 and 1998
Statements of Operations, Years ended December 31, 1999 and
1998
Statements of Changes in Partners' Capital, Years ended
December 31,
1999 and 1998
Statements of Cash Flow, Years ended December 31, 1999 and
1998
Notes to Financial Statements, Years ended December 31,
1999 and
1998
(a) 2. Financial Statement Schedules
-----------------------------
Schedule III - Real Estate and Accumulated Depreciation
Notes to Schedule III
Schedules not listed are omitted because of the absence of the
conditions
under which they are required or because the information is
included in the
financial statements or the notes hereto.
19
(a) 3. Exhibits
--------
(3) Amended and Restated Certificate and Agreement of
Limited
Partnership. (1)
(4) Instruments defining the rights of security holders,
including
indentures (same as Exhibit (3)).
(9) None.
(10) None.
(11) None.
(12) None.
(13) None.
(16) None.
(18) None.
(19) None.
(22) Subsidiaries of the Registrant.
(23) None.
(24) None.
(25) None.
(28) Independent Auditors' Reports for Operating
Partnerships.
(29) None.
(a) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the period
ending March
31, 2000.
(b) Exhibits
Same as Item 14(a)3. above.
(c) Financial Statement Schedules
See Items (a)1. and (a)2. above.
20
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the Securities
Exchange Act
of 1934, the Registrant has duly caused this Report to be signed
on its behalf
by the undersigned, thereunto duly authorized.
American Affordable Housing II
Limited Partnership
By: Boston Capital Associates Limited
Partnership, General Partner
By: Boston Capital Associates,
General Partner
By: /s/ John P. Manning
------------------------------
J. P. Manning, Partner
By: Boston Capital Associates, General
Partner
By:/s/ John P. Manning
------------------------------
John P. Manning, Partner
Date: July 13, 2000
Pursuant to the requirements of the Securities Exchange Act
of 1934, this
report has been signed below by the following persons on behalf
of the
Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
Boston Capital Associates General Partner July 13,
2000
Limited Partnership
By: Boston Capital Associates,
General Partner
By: /s/ John P. Manning
----------------------------
John P. Manning, Partner
21
SIGNATURE TITLE DATE
--------- ----- ----
Boston Capital Associates General Partner
By: /s/ John P. Manning
------------------------ July 13,
2000
John P. Manning, Partner
-------------
/s/ Herbert F. Collins
------------------------ July 13,
2000
Herbert F. Collins General Partner
-------------
of Boston Capital
Associates, Principal
Executive Officer,
Principal Financial
Officer and Principal
Accounting Officer
/s/ John P. Manning
------------------------ July 13,
2000
John P. Manning General Partner
-------------
of Boston Capital
22
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
------- ----------------------
Page
----
(22) Subsidiary of the registrant
Exhibit (22)
Subsidiaries of the Registrant
------------------------------
Each of the Operating Partnerships listed in the chart included
in Item 2 may
be considered a subsidiary of the Partnership.
23
To the Partners of
Bowdoinham Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Bowdoinham
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations, changes in
partners equity (deficit) and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Bowdoinham Associates as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations.
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners
Brookhollow Manor, Ltd.
We have audited the accompanying balance sheet of Brookhollow
Manor, Ltd. as of December 31, 1999 and 1998, and the related
statements of operations, partners' equity (deficit), and cash
flow for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally-accepted
auditing standards and Government Auditing Standards, issued by
the Comptroller General of the United States, and the U.S.
Department of Agriculture, Farmers Home Administration Audit
Program. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the accompanying financial statements referred to
above present fairly, in all material respects, the financial
position of Brookhollow Manor, Ltd. as of December 31, 1999 and
1998, and the results of its operation and its cash flows for the
years then ended, in conformity with generally-accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued our reports dated March 9, 2000, on our consideration of
Brookhollow Manor, Ltd.'s internal control and on its compliance
with laws and regulations.
To the Partners
Carthage Court Housing Company
We have audited the accompanying balance sheets of Carthage Court
Housing Company as of December 31, 1999 and 1998, and the related
statements of operations, partners' deficit, and cash flows for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Carthage Court Housing Company as of December 31,1999 and
1998, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued reports dated February 1, 2000, on our consideration of
the Carthage Court Housing Company's internal control structure
and its compliance with laws and regulations.
To the Partners of
Deer Crossing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Deer Crossing
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations1 changes in
partners' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Deer Crossing Associates as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
The Partners
Fredericktown Associates II, L.P.
Fredericktown, Missouri
We have audited the accompanying balance sheets of Fredericktown
Associates 11, L.P. (a limited partnership) as of December 31,
1999 and 1998, and the related statements of operations,
partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Fredericktown Associates II, L.P. as of December 31, 1999 and
1998, and the results of its operations, changes in partners'
capital and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information included on page 13 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 audits of the basic financial
statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as
a whole.
To the Partners of
Harbor Hill Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Harbor Hill
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations, changes in
partners' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Harbor Hill Associates as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations.
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners
Liberty Center, Ltd.
We have audited the accompanying balance sheets of Liberty
Center, Ltd. as of December 31, 1999 and 1998, and the related
statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the
responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
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 Liberty Center, Ltd. as of December 31,1999 and 1998, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
To the Partners
Lovington Housing Associates Limited Partnership
d.b.a. Southview Place Apartments
We have audited the accompanying balance sheets of Lovington
Housing Associates Limited Partnership as of December 31, 1999
and 1998, and the related statements of operations, partners'
equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our 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 Lovington Housing Associates Limited Partnership as of
December 31, 1999 and 1998, and the results of its operations and
its cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards issued by the
Comptroller General of the United States, we have also issued a
report dated January 31, 2000, on our consideration of Lovington
Housing Associates Limited Partnership's internal control
structure and a report dated January 31, 2000, on its compliance
with laws and regulations.
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 19 through 20 is
presented for purposes of additional analysis and is not a
required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
To the Partners
Malone Housing Redevelopment Company
We have audited the accompanying balance sheets of Malone Housing
Redevelopment Company as of December 31, 1999 and 1998, and the
related statements of operations, partners' equity (deficit), and
cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on the financial
statements based on our audits.
We conducted our audits 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Malone Housing Redevelopment Company as of December 31,1999
and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued reports dated February 1, 2000, on our consideration of
Malone Housing Redevelopment Company's internal control structure
and its compliance with laws and regulations.
To the Partners of
Maple Tree Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Maple Tree
Associates (a Maine Limited partnership) as of December 31, 1999
and 1993, and the related statements of operations, changes in
partners equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Maple Tree Associates as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations.
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners of
Perramond Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Perramond
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations, changes in
partners' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Perramond Associates as of December 31, 1999 and 1993, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners of
Sara Pepper Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Sara Pepper
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations, changes in
partners' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Sara Pepper Associates as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations.
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners
Shelbyville FH, Ltd.
We have audited the accompanying balance sheets of Shelbyville
FH, Ltd. (a Tennessee limited partnership), RHS Project No.: 48
002 621246065, as of December 31, 1999 and 1998, and the related
statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are
the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Shelbyville FH, Ltd. as of December 31, 1999 and 1998, and the
results of its operations, the changes in partners' equity
(deficit) and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on pages 16 and 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 audit procedures applied in the audits of the basic financial
statements and, In our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also
issued a report on our consideration of the entity's internal
control and a report on compliance with laws and regulations
applicable to the financial statements.
To the Partners of
Silver Pines Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Silver Pines
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations, changes in
partners' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Silver Pines Associates as of December 31, 1999 and 1998, and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations.
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners
Suncrest, Ltd.
We have audited the accompanying balance sheets of Suncrest, Ltd.
(a Tennessee Limited partnership) RHS Project No.: 48 015
621251107, as of December 31 1999 and 1998 and the related
statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are
the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditinq 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Suncrest. Ltd. as of December 31, 1999 and 1998, and the
results of its operations, the changes in partners' equity
(deficit) and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on pages 15 and 16 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
audit procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also
issued a report on our consideration of the entity's internal
control and a report on compliance with laws and regulations
applicable to the financial statements.
To the Partners
Warren Properties, Ltd.
We have audited the accompanying balance sheets of Warren
Properties, Ltd. (a Tennessee limited partnership), RHS Project
No 48 089 621237357, as of December 31. 1999 and 1998, and the
related statements of operations1 partners' equity (deficit) and
cash flows for the years then ended. These financial statements
are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Warren Properties. Ltd. as of December 31, 1999 and 1998, and
the results of its operations, the changes in partners' equity
(deficit) and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
Information on pages 16 and 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 audit procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects In relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also
issued a report on our consideration of the entity's internal
control and a report on compliance with laws and regulations
applicable to the financial statements.
To the Partners of
Washington Mews Limited Partnership
We have audited the accompanying balance sheets of Washington
Mews Limited Partnership as of December 31,1999 and 1998, and the
related statements of operations and partners' equity and cash
flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Washington Mews Limited Partnership as of December 31,1999 and
1998, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supporting schedules included in the Supplemental Information are
presented for the purpose of additional analysis and is not a
required part of the basic financial statements of Washington
Mews Limited Partnership. Such information has been subjected to
the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
To the Partners of
Wilder Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheets of Wilder
Associates (a Maine Limited Partnership) as of December 31, 1999
and 1998, and the related statements of operations, changes in
partners' equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Wilder Associates as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 2000, on our consideration of the
Partnership's internal controls and a report dated March 2, 2000,
on its compliance with laws and regulations.
The accompanying supplementary information 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 audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
Dauby O'Connor & Zaleski
Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Bowdoinham Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Bowdoinham
Associates (a Maine Limited Partnership) as of December 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 1997 financial
statements were audited by other auditors whose report dated
January 19, 1998, expressed an unqualified opinion on those
statements.
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 Bowdoinham Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5,
1999, on its compliance with laws and regulations.
698 Pro Med Lane Carmel, Indiana 46032
317-848-5700 Fax: 317-815-6140
Bowdoinham Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
March 5, 1999 Dauby O'Connor &
Zaleski, LLC
Carmel, Indiana Certified Public
Accountants
2
Marshall, Shafer & Spalffing, P.C.
Certified Public Accountants
10497 Town & Country Way, Suite 420
Houston' Tex s 77024
713 / 973-8378
FAX 713 / 973-8377
INDEPENDENT AUDITOR'S REPORT
March 12, 1999
To the Partners
Brookhollow Manor, Ltd.
We have audited the accompanying balance sheet of Brookhollow
Manor, Ltd. as of December 31, 1998 and 1997, and the related
statements of operations, partners' equity (deficit), and cash
flow for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally-accepted
auditing standards and Government Auditing Standards, issued by
the Comptroller General of the United States, and the U.S.
Department of Agriculture, Farmers Home Administration Audit
Program. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the accompanying financial statements referred to
above present fairly, in all material respects, the financial
position of Brookhollow Manor, Ltd. as of December 31, 1998 and
1997, and the results of its operation and its cash flows for the
years then ended, in. conformity with generally-accepted
accounting principles.
in accordance with Government Auditing Standards, we have also
issued our reports dated March 12, 1999, on our consideration of
Brookhollow Manor, Ltd.'s internal control and on its compliance
with laws and regulations.
Marshall, Shafer & Spalding, P.C,
Houston, Texas
-3-
INDEPENDENT AUDITORS' REPORT
To the Partners
Carthage Court Housing Company
We have audited the accompanying balance sheets of Carthage Court
Housing Company as of December 31, 1998 and 1997, and the related
statements of operations, partners' deficit, and cash flows for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Carthage Court Housing Company as of December 31, 1998 and
1997, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued reports dated February 4, 1999, on our consideration of
the Carthage Court Housing Company's internal control structure
and its compliance with laws and regulations.
February 4, 1999 Fecteau & Co.
Albany, New York
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Deer Crossing Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Deer Crossing
Associates (a Maine Limited Partnership) as of December 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 1997 financial
statements were audited by other auditors whose report dated
January 23, 1998, expressed an unqualified opinion on those
statements.
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 Deer Crossing Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med LaneCarmel, Indiana 46032
317-848-5700 Fax: 317-815-6140
Deer Crossing Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financia.1 statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public AccountantsMUELLER, WALLA & ALBERTSON, PC.
CERTIFIED PUBLIC ACCOUNTANTS
10714 MANCHESTER ROAD
SUITE 202
KIRKWOOD, MISSOURI 63122
(314) 822-6575
INDEPENDENT AUDITORS' REPORT
The Partners
Fredericktown Associates II, L.P.
Fredericktown, Missouri
We have audited the accompanying balance sheets of Fredericktown
Associates 11, L.P. (a limited partnership) as of December 31,
1998 and 1997, and the related statements of operations,
partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Fredericktown Associates II, L.P. as of December 31, 1998 and
1997, and the results of its operations, changes in partners'
capital and cash flows for the years then ended in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information included on page 13 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 audits of the basic financial
statements and, in our opinion, is fairly stated, in all material
respects, in relation t6-the basic financial statements taken as
a whole.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
January 22, 1999
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Harbor Hill Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Harbor Hill
Associates (a Maine Limited Partnership) as of December 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 1997 financial
statements were audited by other auditors whose report dated
January 24, 1998, expressed an unqualified opinion on those
statements.
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 Harbor Hill Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5,
1999, on its compliance with laws and regulations.
698 Pro Med Lane
Harbor Hill Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
2
INDEPENDENT AUDITOR'S REPORT
To the Partners
Liberty Center, Ltd.
We have audited the accompanying balance sheets of Liberty
Center, Ltd. as of December 31, 1998 and 1997, and the related
statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the
responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit. 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.
4209 BAYMEADOWS ROAD
SUITE 2
JACKSONVILLE, FL 32217
904.731.9222
FAX 904.731.0352
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Liberty Center, Ltd. as of December 31, 1998 and 1997, and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
March 1, 1999
4209 BAYMEADOWS ROAD
SUITE 2
JACKSONVILLE, FL 32217
904.731.9222
FAX 904.731.0352
Kenneth C. Boothe & Company, P.C.
Certified Public Accountant
1001 East Farm Road 700 Big Spring, Texas 79720 (915) 263-1324
FAX (915) 263-2124
INDEPENDENT AUDITORS' REPORT
To the Partners
Lovington Housing Associates Limited Partnership
d.b.a. Southview Place Apartments
We have audited the accompanying balance sheets of Lovington
Housing Associates Limited Partnership as of December 31, 1998
and 1997, and the related statements of operations, partners'
equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our 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 Lovington Housing Associates Limited Partnership as of
December 31, 1998 and 1997, and the results of its operations and
its cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards issued by the
Comptroller General of the United States, we have also issued a
report dated February 6, 1999, on our consideration of Lovington
Housing Associates Limited Partnership's internal control
structure and a report dated February 6, 1999, on its compliance
with laws and regulations.
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 19 through 20 is
presented for purposes of additional analysis and is not a
required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing
procedures applied in the audit of-the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
KENNETH C. BOOTHE AND COMPANY, P.C.
February 6, 1999
Big Spring, Texas
FECTEAU & COMPANY, P.C.
Certified Public Accountants
Advisors of Taxation
INDEPENDENT AUDITORS' REPORT
To the Partners
Malone Housing Redevelopment Company
We have audited the accompanying balance sheet of Malone Housing
Redevelopment Company as of December 31, 1998 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 the 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 Malone Housing Redevelopment Company 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.
In accordance with Government Auditing Standards, we have also
issued reports dated February 4, 1999, on our consideration of
Malone Housing Redevelopment Company's internal control
structure and its compliance with laws and regulations.
The financial statements of Malone Housing Redevelopment Company
as of December 31, 1997 were audited by other accountants whose
report dated January 19, 1998 expressed an unqualified opinion
on those statements.
FECTEAU & COMPANY, P.C.
February 4, 1999
Albany, New York
Executive Woods, 4 Atrium Drive, Albany, NY 12205
(518) 438-7400 FAX (518) 438-7444
Member
American Institute of Certified Public Accountants
(Private Companies Practice Section & Tax Division)
New York State Society of CPA's
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Maple Tree Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Maple Tree
Associates
(a Maine Limited Partnership) as of December 31, 1998, and the
related statements of operations, changes in partners' equity
(deficit), and cash flows f or 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 1997 financial
statements were audited by other auditors whose report dated
January 21,1998, expressed an unqualified opinion on those
statements.
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 Maple Tree Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Maple Tree Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Certified Public Accountants
Carmel, Indiana
2
MAHONEY
ULBRICH
CHRISTIANSEN
The Partners
Nicollet Island Historic Homes
Saint Paul, Minnesota
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Nicollet Island
Historic Homes (A Limited Partnership) as of December 31, 1998,
and the related statements of operations, partners' capital and
cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit. The financial statement and
supplemental information of Nicollet Island Historic Homes as of
December 31, 1997, were audited by other auditors whose report
dated January 20, 1998, expressed an unqualified opinion on those
financial statements and supplemental information.
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 Nicollet Island Historic Homes 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 made for the purpose of forming an opinion on the
basic 1998 financial statements taken as a whole. The
supplemental information on page 10 is presented for the 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 basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic 1998 financial statements taken
as a whole.
Saint Paul, Minnesota
January 19, 1999
I
Certified Public Accountants
MAHONEY
ULBRICH
CHRISTIANSEN
The Partners
Paige Hall Limited Partnership
Minneapolis, Minnesota
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Paige Hall
Limited Partnership as of December 31, 1998 and 1997 and the
related statements of operations, partners' capital and cash for
the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Paige Hall Limited Partnership as of December 31, 1998 and
1997, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
information on page 9 is presented for the 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 audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
Saint Paul, Minnesota
January 22, 1999
I
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Perramond Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Perramond
Associates (a Maine Limited Partnership) as of December 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 1997 financial
statements were audited by other auditors whose report dated
January 21, 1998, expressed an unqualified opinion on those
statements.
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 Perramond Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Perramond Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmey, Indiana
Certified Public Accountants
2
Bernard Robinson & Company, LLP
Certified Public Accountants since 1947
MAILING ADDRESS
OFFICES
P.O. B6x 19608
109 MUIRS CHAPEL ROAD
GREENSBORO, NC 27419-9608
GREENSBORO, NC 274 10
FAX 336-547-0840
TELEPHONE 336-294-4494
Independent Auditor's Report
To the Partners
Pine Knoll Development Company
D/B/A Pine Knoll Manor
Smithfield, North Carolina
We have audited the accompanying balance sheets of Pine Knoll
Development Company (a North Carolina limited partnership), as of
December 31, 1998 and 1997, and the related statements of
operations, partners' equity, and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards and the standards applicable to financial
audits contained in 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Pine Knoll Development Company as of December 31, 1998 and
1997, and the results of its operations and its cash flows for
the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued our report dated January 15, 1999, on our consideration of
the Partnership's internal control over financial reporting and
our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplementary
information listed in the table of contents is presented for
purposes of additional analysis and is not a required part of the
basic financial statements of the Partnership. Such information
has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
CERTIFIED PUBLIC ACCOUNTIANTS
Greensboro, North Carolina January 15, 1999
Page 1
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Sara Pepper Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Sara Pepper
Associates (a Maine Limited Partnership) as of December 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
1997 financial statements were audited by other auditors whose
report dated January 18, 1998, expressed an unqualified opinion
on those statements.
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 Sara Pepper Associates as of December 31, 1998, and the
results of its operations and cash flows for the year then ended
in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5,1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Sara Pepper Associates
Page Two
The accompanying supplementary information 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 basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
2
GLOVER & GLOVER
206 WILSON PIKE CIRCLE BRENTWOOD,
TENNESSEE 37027
(615) 370-0341
FAX 370-0342
MEMBERS
M. Lawrence Glover, CPA
Bryon L.Glvoer, CPA
AMMUCAN INSTITUTE OF CMTWW KMUC ACCOUNTANTTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Shelbyville FH, Ltd.
We have audited the accompanying balance sheets of Shelbyville
FH, Ltd. (a Tennessee limited partnership), RHS Project No.: 48
002 621246065, as of December 31, 1998 and 1997, and the related
statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are
the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits In accordance with 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, In all material respects, the financial position
of Shelbyville FH, Ltd. as of December 31, 1998 and 1997, and the
results of Its operations, the changes In partners' equity
(deficit) and cash flows for the years then ended In conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
Information on pages 16 and 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
audit procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects In relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have also
issued a report on our consideration of the entity's internal
control and a report on compliance with laws and regulations
applicable to the financial statements.
March 15, 1999
4
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Silver Pines Associates
(A Maine Limited Partnership)
We have audited the accompanying balance sheet of Silver Pines
Associates (a Maine Limited Partnership) as of December 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 1997 financial
statements were audited by other auditors whose report dated
January 22, 1998, expressed an unqualified opinion on those
statements.
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 Silver Pines Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
Partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
698 Pro Med Lane
Carmel, Indiana 46032
317-848-5700
Fax: 317-815-6140
Silver Pines Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
2
GLOVER & GLOVER
CERTIFIED PUBLIC ACCOUNTANTS
206 WILSON P11M CIRCLE BRENTWOOD, TENNESSEE 37027
(615) 370-0341
FAX 370-0342
M. Lawrence Glover, CPA
Bryon L. Glover, CPA
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Partners
Suncrest, Ltd.
We have audited the accompanying balance sheets of Suncrest, Ltd. (a
Tennessee limited partnership), RHS Project No.: 48 015 621251107, as of
December 31, 1998 and 1997, and the related statements of operations,
partners' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits In accordance with 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 audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly,
In all material respects, the financial position of Suncrest, Ltd. as of
December 31, 1998 and 1997, and the results of its operations, the changes
In partners' equity (deficit) and cash flows for the years then ended In
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Information on
pages 15 and 16 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 audit procedures applied in the audits of the
basic financial statements and, in our opinion, is fairly stated in all
material respects In relation to the basic financial statements taken as
a whole.
In accordance with Government Auditing Standards, we have also issued a
report on our consideration of the entity's internal control and a report
on compliance with laws and regulations applicable to the financial
statements.
March 15, 1999
4
GLOVER & GLOVER
CERTIFIED PUBLIC ACCOUNTANTS
206 WILSON P11M CIRCLE BRENTWOOD, TENNESSEE 37027
(615) 370-0341
FAX 370-0342
M. Lawrence Glover, CPA
Bryon L. Glover, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners
Warren Properties, Ltd.
We have audited the accompanying balance sheets of Warren Properties, Ltd.
(a Tennessee limited partnership), RHS Project No.: 48 089 621237357, as of
December 31, 1998 and 1997, and the related statements of operations,
partners' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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 audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Warren Properties, Ltd.
as of December 31, 1998 and 1997, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the years then
ended In conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 16 and 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 audit procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a
report on our consideration of the entity's internal control and a report
on compliance with laws and regulations applicable to the financial
statements.
March 15, 1999
4
Bernard, Johnson & Company, RC.
Certified Public Accountants and Business Advisors
INDEPENDENT AUDITORS'REPORT
To the Partners of
Washington Mews Limited Partnership
We have audited the accompanying balance sheets of Washington
Mews Limited Partnership as of December 31, 1998 and 1997, and
the related statements of income (loss) and partners' equity and
cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Washington Mews Limited Partnership as of December 31, 1998
and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supporting schedules included in the Supplemental Information are
presented for the purpose of additional analysis and is not a
required part of the basic financial statements of Washington
Mews Limited Partnership. Such information has been subjected to
the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
Topsfield, Massachusetts
February 26, 1999
-1-
15 Main Street, Topsfield, MA 01983-1842 , Tel. (978) 887-2220 -
Fax (978) 887-5443
30 Maplewood Avenue, Suite 213, Portsmouth, NH 03801-3732 - Tel.
(603) 436-8110 - Fax (603) 427-0888
Dauby O'Connor & Zaleski
A Limited Liability Company
Certified Public Accountants
Independent Auditors' Report
To the Partners of
Wilder Associates
(A Main Limited Partnership)
We have audited the accompanying balance sheet of Wilder
Associates (a Maine Limited Partnership) as of December 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 1997 financial
statements were audited by other auditors whose report dated
January 24, 1998, expressed an unqualified opinion on those
statements.
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 included 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
represent fairly, in all material respects, the financial
position of Wilder Associates 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.
In accordance with Government Auditing Standards, we have also
issued a report dated March 5, 1999, on our consideration of the
partnership's internal controls and a report dated March 5, 1999,
on its compliance with laws and regulations.
Wilder Associates
Page Two
The accompanying supplementary information 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 basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
March 5, 1999
Dauby O'Connor & Zaleski, LLC
Carmel, Indiana
Certified Public Accountants
Coopers & Lybrand L.L.P.
a professional services firm
Report of Independent Accountants
To the Partners
Malone Housing Redevelopment Company
We have audited the accompanying statements of financial position
of Malone Housing Redevelopment Company (A Limited Partnership),
as of December 31, 1997 and 1996, and the related statements of
operations, partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Malone Housing Redevelopment Company as of December 31, 1997
and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also
issued our report dated January 19, 1998 on its compliance with
laws and regulations.
Rochester, New York
January 19, 1998
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS REPORT
AMERICAN AFFORDABLE HOUSING II
LIMITED PARTNERSHIP
MARCH 31, 2000 AND 1999
<PAGE>
TABLE OF CONTENTS
American Affordable Housing II Limited Partnership
PAGE
INDEPENDENT AUDITORS REPORT F - 3
FINANCIAL STATEMENTS
BALANCE SHEETS F - 5
STATEMENTS OF OPERATIONS F - 6
STATEMENTS OF CHANGES IN PARTNERS DEFICIT F - 7
STATEMENTS OF CASH FLOWS F - 8
NOTES TO FINANCIAL STATEMENTS F - 9
SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION F - 19
Schedules not listed are omitted because of the absence of the
conditions under which they are required or because the
information is included in the financial statements or the
notes thereto.
<PAGE>
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation
4520 East-West Highway * Suite 300 * Bethesda, MD 20814-3319
(301) 652-9100 * Fax (301) 652-1848
INDEPENDENT AUDITORS' REPORT
To the Partners
American Affordable Housing II
Limited Partnership
We have audited the accompanying balance sheets of
American Affordable Housing II Limited Partnership as of March
31, 2000 and 1999, and the related statements of operations,
changes in partners' deficit and cash flows for each of the
three years in the period ended March 31, 2000. These
financial statements are the responsibility of the
partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the financial statements of certain operating
limited partnerships in which American Affordable Housing II
Limited Partnership owns a limited partnership interest.
Investments in such partnerships comprise 42% and 43% of the
assets as of March 31, 2000 and 1999, and 15%, 14% and 6% of
the partnership loss for each of the three years in the period
ended March 31, 2000, of American Affordable Housing II Limited
Partnership. The financial statements of these partnerships
were audited by other auditors, whose reports have been
furnished to us, and our opinion, insofar as it relates to
information relating to these partnerships, is based solely on
the reports of the other auditors.
We conducted our audits 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 audits and the
reports of the other auditors provide a reasonable basis for
our opinion.
In our opinion, based on our audits and the reports of
the other auditors referred to above, the financial statements
referred to above present fairly, in all material respects, the
financial position of American Affordable Housing II Limited
Partnership as of March 31, 2000 and 1999, and the results of
its operations and its cash flows for each of the three years
in the period ended March 31, 2000, in conformity with
generally accepted accounting principles.
F-3
<PAGE>
We have also audited the related financial statement
schedule listed in Form 10-K, item 14(a) of American Affordable
Housing II Limited Partnership as of March 31, 2000. In our
opinion, the schedule presents fairly the information required
to be set forth therein, in conformity with generally accepted
accounting principles.
Bethesda, Maryland
June 23, 2000
F-4
American Affordable Housing II Limited Partnership
BALANCE SHEETS
March 31,
ASSETS
<TABLE>
2000 1999
----------- -----------
<S> <C> <C>
INVESTMENTS IN OPERATING LIMITED
PARTNERSHIPS (notes A and D) $ 2,169,618 $ 2,544,050
OTHER ASSETS
Cash 12,021 9,857
Note receivable (note C) 40,000 40,000
Other assets 8,849 8,849
----------- -----------
$ 2,230,488 $ 2,602,756
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES
Due to affiliates (note B) $ 4,949,165 $ 4,482,468
Accounts payable - 3,500
----------- -----------
4,949,165 4,485,968
----------- -----------
PARTNERS' DEFICIT
Limited partners
Units of limited partnership
interest, consisting of
50,000 authorized units,
$1,000 stated value
per unit; issued and
outstanding -26,501 units (2,461,584) (1,634,474)
General partners (257,093) (248,738)
----------- -----------
(2,718,677) (1,883,212)
----------- -----------
$ 2,230,488 $ 2,602,756
=========== ===========
</TABLE>
See notes to financial statements
F-5
<PAGE>
American Affordable Housing II Limited Partnership
STATEMENTS OF OPERATIONS
Year ended March 31,
<TABLE>
2000 1999 1998
--------- --------- --------
<S> <C> <C> <C>
Income
Interest income $ 1,604 $ 203 $ 331
Miscellaneous income 7,070 7,894 6,355
--------- --------- --------
8,674 8,097 6,686
--------- --------- --------
Share of losses from operating
limited partnerships (note A) (373,152) (418,312) (383,653)
--------- --------- --------
Expenses
Professional fees 29,562 47,488 31,208
General and administrative expense
(Note D) 18,424 15,572 20,371
Asset management fee (note B) 423,001 420,831 427,161
--------- --------- --------
(470,987) (483,891) (478,740)
--------- --------- --------
NET LOSS $ (835,465) (894,106) (855,707)
========= ========= ========
Net loss allocated to general
partnership $ (8,355) $ (8,941) $ (8,557)
========= ========= ========
Net loss allocated to limited
partnership $(827,110) (885,165) (847,150)
========= ========= ========
Net loss per unit of limited
partnership interest $ (31.21) $ (33.40) $ (31.97)
========= ========= ========
</TABLE>
See notes to financial statements
F-6
<PAGE>
American Affordable Housing II Limited Partnership
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
Years ended March 31, 2000, 1999 and 1998
<TABLE>
Limited General
partners partners Total
----------- ----------- -----------
<S> <C> <C> <C>
Partners' capital (deficit),
March 31, 1997 $ 97,841 $ (231,240) $ (133,399)
Net loss (847,150) (8,557) (855,707)
----------- ----------- -----------
Partners' deficit,
March 31, 1998 (749,309) (239,797) (989,106)
Net loss (885,165) (8,941) (894,106)
----------- ----------- -----------
Partners' deficit,
March 31, 1999 (1,634,474) (248,738) (1,883,212)
Net loss (827,110) (8,355) (835,465)
----------- ----------- -----------
Partners' deficit,
March 31, 2000 $(2,461,584) $ (257,093) $(2,718,677)
=========== =========== ===========
</TABLE>
See notes to financial statements
F-7
<PAGE>
American Affordable Housing II Limited Partnership
STATEMENTS OF CASH FLOWS
Year ended March 31,
<TABLE>
2000 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (835,465) $ (894,106) $ (855,707)
Adjustments to reconcile net
loss to net cash provided by
operating activities
Cash flows from operating
limited partnerships 1,280 282 846
Share of losses from operating
limited partnerships 373,152 418,312 383,653
Increase in other assets - (1,000) -
Decrease in accounts payable (3,500) - -
Increase in due to affiliate 466,697 473,913 469,374
----------- ----------- -----------
Net cash provided by
(used in) operating
activities 2,164 (2,599) (1,834)
----------- ----------- -----------
NET INCREASE (DECREASE
IN CASH 2,164 (2,599) (1,834)
Cash, beginning 9,857 12,456 14,290
----------- ----------- -----------
Cash, end $ 12,021 $ 9,857 $ 12,456
----------- ----------- -----------
</TABLE>
See notes to financial statements
F-8
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS
March 31, 2000, 1999 and 1998
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
American Affordable Housing II Limited Partnership (the
"partnership") was formed under the laws of the Commonwealth
of Massachusetts on May 13, 1987, for the purpose of
acquiring, holding, and disposing of limited partnership
interests in operating limited partnerships which were
established to acquire, develop, rehabilitate, operate and
own newly constructed, existing or rehabilitated apartment
complexes which qualify for the Low-Income Housing Tax
Credit established by the Tax Reform Act of 1986. Certain
of the apartment complexes may also qualify for the Historic
Rehabilitation Tax Credit for their rehabilitation of
certified historic structures; accordingly, the apartment
complexes are restricted as to rent charges and operating
methods and are subject to the provisions of Section
42(g)(20) of the Internal Revenue Code relating to the
rehabilitation investment credit. The general partners of
the partnership are Boston Capital Associates Limited
Partnership and Boston Capital Associates.
In accordance with the limited partnership agreement,
profits, losses and cash flow (subject to certain priority
allocations and distributions) and tax credits are allocated
99% to the limited partners and 1% to the general partners.
Pursuant to the Securities Act of 1933, the partnership
filed a Form S-11 Registration Statement with the Securities
and Exchange Commission, effective September 21, 1987, which
covered the offering (the "Public Offering") of the
partnership's units of limited partnership interest, as well
as the units of limited partnership interest offered by
American Affordable Housing I, III, IV and V Limited
Partnerships. The partnership registered 50,000 units of
limited partnership interest at $1,000 each unit for sale to
the public. During 1988, the partnership sold 26,501 units
of limited partnership interest, representing $26,501,000 of
capital contributions.
Income Taxes
------------
No provision or benefit for income taxes has been included
in these financial statements since taxable income or loss
passes through to, and is reportable by, the partners
individually.
F-9
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Investments in Operating Limited Partnerships
---------------------------------------------
The partnership accounts for its investments in operating
limited partnerships using the equity method of accounting.
Under the equity method of accounting, the partnership
adjusts its investment cost for its share of each operating
limited partnership's results of operations and for any
distributions received or accrued. However, the partnership
recognizes an individual operating limited partnership's
losses only to the extent that the partnership's share of
losses of the operating limited partnership does not exceed
the carrying amount of its investment. Unrecognized losses
will be suspended and offset against the future individual
operating limited partnership's income.
A loss in value of an investment in an operating limited
partnership other than a temporary decline would be recorded
as an impairment loss. Impairment is measured by comparing
the investment carrying amount to the sum of the total
amount of the remaining tax credits allocated to the
partnership and the estimated residual value of the
investment.
Capital contributions to operating limited partnerships are
adjusted by tax credit adjusters. Tax credit adjusters are
defined as adjustments to operating limited partnership
capital contributions due to reductions in actual tax
credits from those originally projected. The partnership
records tax credit adjusters as a reduction in investment in
operating limited partnerships and capital contributions
payable.
The operating limited partnerships maintain their financial
statements based on a calendar year and the partnership
utilizes a March 31 year-end. The partnership records
losses and income from the operating limited partnerships on
a calendar year basis which is not materially different from
losses and income generated if the operating limited
partnerships utilized a March 31 year-end.
The partnership records capital contributions payable to the
operating limited partnerships once there is a binding
obligation to fund a specified amount. The operating
limited partnerships record capital contributions from the
partnership when received.
The partnership records acquisition costs as an increase in
its investment in operating limited partnerships. Certain
operating limited partnerships have not recorded the
acquisition costs as a capital contribution from the
partnership. These differences are shown as reconciling
items in note D.
F-10
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Fiscal Year
-----------
For financial reporting purposes, the partnership uses a
March 31 year-end, whereas for income tax reporting
purposes, the partnership uses a calendar year. The
operating limited partnerships use a calendar year for both
financial and income tax reporting.
Net Loss per Unit of Limited Partnership Interest
-------------------------------------------------
Net loss per unit of limited partnership interest is
calculated based upon the number of units outstanding. For
each of the three years in the period ended March 31, 2000,
26,501 units were outstanding.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could
differ from those estimates.
Recent Accounting Pronouncements
--------------------------------
In June 1999, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS)
N o . 1 36, "Transfers of Assets to a Not-for-Profit
Organization or Charitable Trust That Raises or Holds
Contributions for Others," and in June 1999, the FASB issued
SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of SFAS
No. 133."
SFAS No. 136 is generally effective for periods beginning
after December 15, 1999 and SFAS 137 is effective upon
issuance in June 1999.
F-11
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
--------------------------------
The fund does not have any derivative or hedging activities
and is not a non-for-profit organization. Consequently,
these pronouncements are not expected to have any effect on
the fund's finance statements.
NOTE B - RELATED PARTY TRANSACTIONS
During the years ended March 31, 2000, 1999 and 1998, the
partnership entered into several transactions with various
affiliates of the general partners, including Boston Capital
Partners, Inc., Boston Capital Holdings Limited Partnership,
and Boston Capital Asset Management Limited Partnership, as
follows:
General and administrative expenses of $4,431, $1,973 and
$2,441, incurred by Boston Capital Asset Management Limited
Partnership, Boston Capital Holdings Limited Partnership,
a n d Boston Capital Partners, Inc., were charged to
operations during the years ended March 31, 2000, 1999 and
1998, respectively. At March 31, 2000 and 1999, the unpaid
general and administrative expenses totaled $197,514 and
$167,779, respectively.
During fiscal year ended March 31, 1995, Boston Capital
Asset Management Limited Partnership advanced the
partnership $95,375 in order to fund an advance made to an
operating limited partnership, as more fully described in
note C. The advance is noninterest bearing and due upon
demand. The amount still outstanding at the end of fiscal
years 2000 and 1999 was $40,000.
An annual asset management fee based on 0.5% of the
aggregate cost of all apartment complexes acquired by the
operating limited partnerships has been accrued as payable
to Boston Capital Asset Management Limited Partnership. The
aggregate cost is comprised of the capital contributions
made by the partnership to the operating limited partnership
and 99% of the permanent financing at the operating limited
partnership level. At March 31, 2000 and 1999, the unpaid
asset management fees totaled $4,711,651 and $4,274,689,
respectively. The fee is payable without interest as
sufficient funds become available. The asset management
fees charged to operations during the years ended March 31,
2000, 1999 and 1998 were $436,961, $436,961 and $436,961,
respectively, which are netted with reporting fees paid by
the operating
F-12
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE B - RELATED PARTY TRANSACTIONS (Continued)
limited partnerships. During the years ended March 31,
2000, 1999 and 1998, the amount of reporting fees paid by
the operating limited partnerships was $13,960, $16,130 and
$9,800, respectively.
NOTE C - NOTE RECEIVABLE
Note receivable is an advance made to an operating limited
partnership during the fiscal year ended March 31, 1995.
The note, secured by a second mortgage on the property owned
by the operating limited partnership, bears interest at 6%
per annum and was due December 31, 1997. The carrying
amount of the note receivable approximates fair value as of
March 31, 2000 and 1999.
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
At March 31, 2000 and 1999, the partnership has limited
partnership equity interests in 49 and 50 operating limited
partnerships, respectively, which own apartment complexes.
During the fiscal year ended March 31, 2000, one of the
operating limited partnerships was foreclosed upon, and the
Investment Partnership has relinquished ownership.
Under the terms of the partnership's investment in each
operating limited partnership, the partnership was required
to make capital contributions to the operating limited
partnerships. These contributions were payable in
installments over several years upon each operating limited
partnership achieving specified levels of construction
and/or operations. All contributions have been made to the
operating limited partnerships as of March 31, 2000 and
1999. The partnership has no further obligation to make any
additional contributions.
F-13
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
(Continued)
The partnership's investments in operating limited
partnerships at March 31, 2000 and 1999 are summarized as
follows:
<TABLE>
2000 1999
---------------- ----------------
<S> <C>
<C>
Capital contributions paid to operating limited partnerships, net of $
19,473,665 $ 19,473,665
tax credit adjusters of $213,468 and $213,468, respectively
Acquisition costs of operating limited partnerships
2,492,705 2,492,705
Cumulative losses from operating limited partnerships
(19,726,339) (19,353,187)
Cumulative distributions from operating limited partnerships
(70,413) (69,133)
---------------- ----------------
Investment per balance sheet
2,169,618 2,544,050
Acquisition costs not included in net assets of operating limited
122,748 122,748
partnerships (see note A)
Loss from operating limited partnerships of $253,315 and $875,460
1,128,775 1,128,775
for the three months ended March 31, 1990 and 1989 which the
operating limited partnerships have not included in partners'
capital (see note A)
Tax credit adjusters not accounted for in net assets of operating
121,349 121,349
limited partnerships (see note A)
Loss of operating limited partnerships not recognized under the
(10,806,695) (8,808,750)
equity method of accounting (see note A)
Other adjustments
58,910 61,361
---------------- ----------------
Equity per operating limited partnerships' combined financial
statements $
(7,205,295) $ (4,830,467)
================ ================
</TABLE>
F-14
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
(Continued)
The combined summarized balance sheets of the operating
limited partnerships at December 31, 1999 and 1998 are as
follows:
COMBINED SUMMARIZED BALANCE SHEETS
<TABLE>
1999 1998
ASSETS
---------------- ----------------
<S> <C>
<C>
Buildings and improvements, net of accumulated depreciation of $
57,131,467 $ 59,634,159
$33,898,561 and $30,999,473
Land
4,292,033 4,288,727
Other assets
6,264,011 6,127,631
---------------- ----------------
$
67,687,511 $ 70,050,517
================ ================
LIABILITIES AND PARTNERS' DEFICIT
Mortgages payable $
67,622,818 $ 67,945,260
Accounts payable and accrued expenses
3,830,775 3,373,939
Other liabilities
2,580,063 2,640,381
---------------- ----------------
74,033,656 73,959,580
---------------- ----------------
PARTNERS' CAPITAL (DEFICIT)
American Affordable Housing II Limited Partnership
(7,205,295) (4,830,467)
Other partners
859,150 921,404
---------------- ----------------
(6,346,145) (3,909,063)
---------------- ----------------
$
67,687,511 $ 70,050,517
================ ================
</TABLE>
F-15
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE D - INVESTMENTS IN OPERATING LIMITED PARTNERSHIPS
(Continued)
The combined summarized statements of operations of the
operating limited partnerships for the years ended December
31, 1999, 1998 and 1997 are as follows:
COMBINED SUMMARIZED STATEMENTS OF OPERATIONS
<TABLE>
1999
1998 1997
----------------
---------------- ----------------
<S> <C> <C>
<C>
Revenue
Rental $ 10,495,010 $
10,590,206 $ 10,648,605
Interest and other 485,737
439,999 430,683
----------------
---------------- ----------------
10,980,747
11,030,205 11,079,288
----------------
---------------- ----------------
Expenses
Interest 3,718,151
3,779,559 3,924,370
Depreciation and amortization 2,911,171
2,892,193 2,886,227
Taxes and insurance 1,267,231
1,313,538 1,387,190
Repairs and maintenance 1,691,965
1,628,137 1,754,632
Operating expenses 3,820,085
3,543,394 3,422,817
----------------
---------------- ----------------
13,408,603
13,156,821 13,375,236
----------------
---------------- ----------------
NET LOSS $ (2,427,856) $
(2,126,616) $ (2,295,948)
================
================ ================
Net loss allocated to American Affordable Housing $ (2,371,097) $
(2,085,431) $ (2,158,133)
II Limited Partnership * ================
================= ===============
Net loss allocated to other partners $ (56,759) $
(41,185) $ (137,815)
================
================= ================
</TABLE>
* Amount includes $1,997,945, $1,667,119 and $1,774,480
for the years ended December 31, 1999, 1998 and 1997,
respectively, of loss not recognized under the equity
method of accounting as described in note A.
F-16
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE E - RECONCILIATION OF FINANCIAL STATEMENT NET LOSS TO TAX
RETURN
For income tax purposes, the partnership reports using a
December 31 year end. The partnership's net loss for
financial reporting and tax return purposes for the years
ended March 31 are reconciled as follows:
<TABLE>
2000
1999 1998
----------------
---------------- ----------------
<S> <C> <C>
<C>
Net loss for financial reporting purposes $ (835,465) $
(894,106) $ (855,707)
Operating limited partnership rents received in 7,468
(2,572) 4,359
advance
Related party expenditures 135,120
58,054 72,243
Asset management fee not deductible for tax 436,961
436,961 436,961
purposes until paid
Excess of tax depreciation over book depreciation (318,295)
(406,024) (423,900)
on operating limited partnership assets
Difference due to fiscal year for book purposes (73,226)
3,150 149,012
and calendar year for tax purposes
Operating limited partnership net loss not (1,997,945)
(1,667,119) (1,774,480)
allowed for financial reporting under equity
method
Other 126,154
(512,660) (5,996)
----------------
---------------- ----------------
Net loss for income tax purposes $ (2,519,228) $
(2,984,316) $ (2,397,508)
================
================ ================
</TABLE>
F-17
<PAGE>
American Affordable Housing II Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 2000, 1999 and 1998
NOTE E - RECONCILIATION OF FINANCIAL STATEMENT NET LOSS TO TAX
RETURN (Continued)
The difference between the investments in operating limited
partnerships for tax purposes and financial statement
purposes is primarily due to the differences in the losses
not recognized under the equity method of accounting, the
three month period due to fiscal year reporting and the
historic tax credits taken for income tax purposes. At
March 31, 2000 and 1999, the differences are as follows:
<TABLE>
2000 1999
---------------- ----------------
<S>
<C> <C>
Investment in operating limited partnerships - tax basis
$ (9,921,018) $ (7,432,058)
Add back losses not recognized under the equity method
10,806,695 8,808,750
Estimated share of loss of $253,315 and $875,460 for the
three (1,128,775) (1,128,775)
months ended March 31, 1990 and 1989 due to fiscal year
reporting
Historic tax credits
651,016 651,016
Other
1,761,700 1,645,117
---------------- ----------------
Investment in operating limited partnerships - as reported
$ 2,169,618 $ 2,544,050
================ ================
</TABLE>
F-18
LIBERTY CENTER, LTD.
Financial Statements
December 31, 1999 and 1998
Hunter & Associates, P.A.
4201 Baymeadows Road, Suite 4
Jacksonville, Florida 32217
Phone: (904) 731-9222
Fax: (904) 731-0352
March 10, 2000
INDEPENDENT AUDITOR'S REPORT
To the Partners
Liberty Center, Ltd.
We have audited the accompanying balance sheets of Liberty
Center, Ltd. As of December 31, 1999 and 1998, and the related
statements of operations, partners' equity and cash flows for the
years then ended. These financial statements are the
responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
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 Liberty Center, Ltd. As of December 31 1999 and 1998 and the
results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting
principles.
Liberty Center, Ltd.
Balance Sheets
December 31, 1999 and 1998
Assets
1999 1998
Current assets: ---- ----
Cash and cash equivalents $115,753
$118,339
Accounts Receivable 2,217 10,253
--------- ---------
Total Current Assets 117,970 128,592
--------- ---------
Property and Equipment, at cost:
Land 198,000 198,000
Building and improvements 2,487,005 2,487,005
Equipment 13,173 6,174
Less Accumulated Depreciation (704,474) (641,850)
--------- ---------
1,993,704 2,049,329
--------- ---------
Total Assets: 2,111,674 $2,177,921
========= =========
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Balance Sheets
December 31, 1999 and 1998
Liabilities and Partners' Equity
1999 1998
------- -------
Current Liabilities
Current portion of notes payable $ 71,019 $ 396,574
Accrued interest, due within one year 995 2,903
Accounts payable and accrued expenses 48,593 53,915
--------- ---------
Total current liabilities 120,607 453,392
--------- ---------
Long-Term Liabilities
Notes payable - net of current portion 1,004,811 719,899
Accrued interest, due after one year 605,518 553,538
Advances from affiliates 31,291 32,716
Tenant security deposits 5,955 3,966
--------- ---------
Total long-term liabilities 1,647,575 1,310,119
--------- ---------
Total Liabilities 1,768,182 1,763,511
--------- ---------
Partners' Equity
General partner (13,870) (13,162)
Limited partner 357,362 427,572
--------- ---------
Total partners' equity 343,492 414,410
--------- ---------
Total liabilities and partners'
equity $2,111,674 $2,177,921
========= =========
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Statements of Operation
For the Years ended December 31, 1999 and 1998
1999 1998
Rental revenues $514,184 $473,447
Interest and dividends 664 1,647
------- -------
514,848 475,094
------- -------
Expenses
Bad Debts 13,201 0
Depreciation and amortization 62,624 62,432
General and administrative 42,948 37,253
Insurance 46,335 45,558
Interest 91,203 98,923
Investor Services fee 24,000 0
Legal and professional services 18,141 16,533
Maintenance and repairs 28,349 26,999
Management fees 25,347 21,600
Salaries - operations 102,030 44,017
Salaries - Administration 50,278 49,886
Taxes 39,333 39,322
Utilities 41,977 43,146
------- -------
Total expenses 585,766 485,669
------- -------
Net income (loss) from operations $ (70,918) $ (10,575)
======= =======
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Statement of Partners' Equity
For the Years ended December 31, 1999 and 1998
Investor
General Limited
Partner Partner
Total
------- --------
-----
Partners' equity December 31, 1997 ($13,056) $438,041
$424,985
Loss (loss) ($106) $(10,469)
$(10,575)
Distributions $0 $0
$0
Partners' equity December 31, 1998 ($13,162) $427,572
$414,410
Loss (loss) (708) (70,210)
($70,918)
Distributions 0 0
$0
--------- ---------
----------
Partners' equity December 31, 1999 ($13,870) $357,362
$343,492
========= =========
=========
See Independent Auditors' Report and Notes to Financial
Statements.
Liberty Center, Ltd.
Statements of Cash Flows
For the Years ended December 31, 1999 and 1998
1999
1998
Cash flow from operating activities ----
----
Net income (loss) $ (70,918) $
(10,575)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 62,624
62,432
Changes in asset and liabilities:
Decrease (increase) in tenant receivables 8,036
6,427
Decrease (increase) in prepaid expenses
and other assets 0
522
Increase (decrease) in accounts payable
and accrued expenses (7,230)
9,377
Increase (decrease) in net security
deposits 1,989
(1,033)
Net cash (used for) provided -------
-------
by operations (5,499)
67,150
-------
-------
Cash flows from investing activities
Purchase of equipment (6,999)
0
Increase in accrued interest 51,980
64,791
Net cash provided by investing -------
-------
activities 44,981
64,791
-------
-------
Cash flows from financing activities
Repayment of long-term debt (40,643)
(60,000)
Increase in advances from affiliates (1,425)
(59,775)
Net cash used for financing -------
-------
activities (42,068)
(119,775)
-------
-------
Net decrease in cash and cash equivalents (2,586)
12,166
Cash and cash equivalents at beginning of year 118,339
106,173
-------
-------
Cash and cash equivalents at end of year $ 115,753 $
118,339
=======
=======
Liberty Center, Ltd.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
A summary of the significant accounting policies consistently
applied in the
preparation of the accompanying financial statements follows.
Capitalization and Depreciation
--------------------------------
Land, buildings and improvements are recorded at cost.
Depreciation is
provided for in amounts sufficient to relate the cost of
depreciable assets to
operations over their estimated service lives using the
straight-line method.
Improvements are capitalized, while expenditures for maintenance
and repairs
are charged to expense as incurred. Upon disposal of depreciable
property,
the appropriate property accounts are to be reduced by the
related costs and
accumulated depreciation. The resulting gains and losses are to
be reflected
in the statement of operations.
Income Taxes
------------
No provision or benefit for income taxes has been included in
these financial
statements since taxable income or loss passes through to, and is
reportable
by, the partners individually.
Cash and Cash Equivalents
-------------------------
The partnership considers all highly liquid investments with a
maturity of
three months or less when purchased to be cash equivalents. Cash
equivalents
include $101,728 and $101,225 in money market deposits (Note C)
at December 31, 1999 and 1998, respectively.
NOTE B - ORGANIZATION
------------
Liberty Center, Ltd. was organized under the laws of the State of
Florida on
June 28, 1988, for the purpose of constructing and operating a
109-unit low
income residential apartment project known as Liberty Center.
NOTE C - CERTIFICATES OF DEPOSIT, MONEY MARKETS AND
------------------------------------------
MARKETABLE EQUITY SECURITIES
----------------------------
Prior to amending the operating reserve agreement June 29, 1993,
certificates
of deposit, money market funds and marketable equity securities
have been
established under an agreement between the limited an general
partners which
provides that such funds are available to fund any excess of
operating
expenses over operating income for a period of sixty (60) months.
Interest
earned on these funds is allocated and distributed to the general
partner
annually.
The operating reserve agreement was amended June 29, 1993,
establishing an
operating reserve of $100,000 and allowing for a distribution to
the general
partner of part of the operating reserve. The purpose was
substantially the
same as that of the prior agreement. A distribution to the
general partner of
this operating reserve is allowed if certain profitability
objectives are met.
The operating reserve account totaled $101,778 and $101,225 at
December 31, 1999 and December 31, 1998.
NOTE D - PARTNERS' CAPITAL CONTRIBUTIONS
-------------------------------
The partnership has one general partner, The Harris Group, Inc.
and one investor limited partner - American Affordable Housing
II. As of December 31, 1999, the general partner and the
investor limited partner have made capital
contributions of $1,014,521 and $1,220,553, respectively.
NOTE E - ACCRUED INTEREST
----------------
The second mortgage provides for deferral of interest payments
based upon
projected cash flow as determined annually by the lender. In
addition, a
portion of the deferred interest payable on the second mortgage
may be
forgiven based upon the project maintaining a very low income
set-aside for a
period longer than that required. Interest forgiven increases
with each year
the project is extended. No interest has been forgiven at
December 31, 1999.
The following is a schedule of accrued interest payable:
December 31
1999
1998
----
----
First mortgage payable (Note F) 995 $
2,903
Second mortgage payable 605,518
553,538
-------
-------
606,513
556,441
Less amount due within one year 995
2,903
-------
-------
$605,518
$553,538
=======
=======
NOTE F - NOTES PAYABLE
------------- December
31
The following is a schedule of notes payable:
-----------
1999
1998
Mortgage note payable to a bank monthly at ----
----
$6,727 including interest at 3.0% until
March, 2004, secured by first mortgage on
apartment project. $ 355,931 $
396,574
Mortgage note payable at 9% to The Florida
Housing Finance Agency; interest payments
only as determined by lender annually based
on cash flow, with a balloon payment in 2004;
secured by second mortgage on apartment
project. (Note E) $ 719,899
719,899
---------
---------
$1,075,830
$1,116,473
Less amount due 71,019
396,574
---------
---------
$1,004,811 $
719,899
=========
=========
Aggregate maturities of long-term debt for the next five year are
estimated as
follows:
2000 $ 71,019
2001 73,179
2002 75,405
2003 77,698
2004 778,529
---------
$1,075,830
=========
NOTE G - TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES
------------------------------------------------
Annual Investor Service Fee
---------------------------
An annual investor service fee of $8,000 is payable to Boston
Capital
Communication, Inc., an affiliate of American Affordable Housing
II Limited
Partnership, an investor limited partner which holds a 99%
interest in the
partnership, for services rendered in reporting to the investor
limited
partner.
Management Fees
---------------
In accordance with the partnership agreement, the partnership
pays management
fees for services rendered in connection with the leasing and
operation of the
project. Fees are paid to Liberty Center for the Homeless, Inc.
and Harris
Group, Inc. Management fees charged to operations for the year
ended December
31, 1999 and 1998, $25,347 and $21,600 respectively.
NOTE H - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
------------------------------------------------
All profits and losses prior to the first date on which an
investor limited
partner was admitted (December 1, 1988) were allocated 100% to
the general
partner. Upon admission of the investor limited partner, the
interest of the
general partner was reduced to 1%.
Distributable cash flow is defined in the partnership agreement
as the sum of
all cash receipts less disbursements for operating activities,
including the
annual investor service fee.
Distributable cash flow is payable annually as follows:
1) 50% to the investor limited partner and 50% to the general
partner.
Gain, if any, from a sale or refinancing is allocable as follows:
1) To all partners having negative balances in their capital
accounts prior
to the distribution of any sale or refinancing proceeds, an
amount of such
gain to increase their negative balance to zero.
2) To partners who have received or will receive a distribution
of sale or
refinancing proceeds in excess of their capital accounts, an
amount of such
gain, if any, equal to such excess; and
3) The remainder of such gain, if any, 50% to the limited
partner and 50% to
the general partners.
Loss from a sale refinancing is allocable 50% to the limited
partner and 50% to the
general partners.
Interest earned on certificates of deposit, marketable securities
and money
market funds is allocable 100% to the general partner. (Note C)
The partnership agreement provides for a special distribution to
the general
partner in the amount of $100,000. (Note C)
NOTE I - REIMBURSEMENT FOR OPERATING PERSONNEL
-------------------------------------
In 1998 the partnership was reimbursed for services provided to
an affiliate. The services provided were mainly leasing, tenant
assistance, record keeping, and security services. The
reimbursement was recorded as a reduction in salary expenses.
NOTE J - BAD DEBTS
---------
The partnership makes every attempt to collect accounts
receivable and periodically reviews the accounts to determine
collectability. In 1999, the general partner determined that
$13,201 of the accounts receivable were not collectable in the
ordinary course of business.
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
DECEMBER 31, 1999 AND 1998
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
YEARS ENDED DECEMBER 31, 1999 AND 1998
C O N T E N T S
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
BALANCE SHEETS 2-3
STATEMENT OF OPERATIONS 4
STATEMENT OF PARTNERS' EQUITY (DEFICIT) 5
STATEMENT OF CASH FLOWS 6
NOTES TO FINANCIAL STATEMENTS 7-16
SUPPLEMENTAL INFORMATION
SCHEDULES OF RENTING, ADMINISTRATIVE,
OPERATING, MAINTENANCE, TAXES AND
INSURANCE, AND INTEREST EXPENSE 17-18
Robert Ercolini & Company LLP
Certified Public Accountants Business Consultants
INDEPENDENT AUIDITOR'S REPORTTo the Partners ofRiverplace Apartments
Limited PartnershipHolyoke, Massachusetts
We have audited the accompanying balance sheet of Riverplace
Apartments Limited Partnership as of December 31, 1999 and 1998,
and the related statements of operations, partners' capital, and
cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audit
We conducted our audit in accordance with 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
assess' 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
Riverplace Apartments Limited Partnership as of December 31, 1999
and 1998, and the results of its operations, changes in partners'
capital, and its cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole, The additional information
included in this report (shown on pages 17 and 18) 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 basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
January 28, 2000
Fifty Five Summer Street - BOSTON, MA 021 10-100-1 - TELEPHONE 617-482-
5511 - FAX 617.426-5252
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
1999 1998
CURRENT ASSET ---- ----
Cash 50,756 $ 46,010
Restricted cash - grants 25 375
Tenants' rents recievable, less
allowance for doubtful accounts
of $20,921 in 1999 16,378 10,481
Tenants' rent subsidies receivable 43,723 36,720
Receivables - affiliate 3,855 4,188
Grants receiveable 38,893 39,860
Prepaid expenses 6,838 6,838
--------- ---------
Total Current Assets 160,468 144,472
--------- ---------
Tenants' Security Deposits 14,202 13,850
held in trust --------- ---------
RESTRICTED DEPOSITS AND FUNDED RESERVES
Reserve for Replacements 46,556 24,307
--------- ---------
RENTAL PROPERTY - AT COST
Land 175,260 175,260
Buildings and Improvements 6,604,141 6,604,141
Personal Property 210,434 190,497
--------- ---------
6,989,835 6,969,898
Less Accumulated Depreciation (2,059,061) (1,860,055)
--------- ---------
4,930,774 5,109,843
--------- ---------
Deferred financing costs, net of accumulated
amortization of $33,445 and $30,296 37,133 40,282
--------- ---------
$5,189,133 $5,332,754
========= =========
See notes to financial statements.
2
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
BALANCE SHEETS - CONTINUED
DECEMBER 31, 1999 AND 1998
LIABILITIES
1999 1998
CURRENT LIABILITIES -------- -------
Current Portion of Mortgage Note Payable $ 69,990 $ 63,355
Accounts Payable 18,890 19,809
Accounts payable - grants 13,000 40,235
Payables Affiliates 6,248 7,005
Accrued Mortgage Interest Payable 33,570 34,108
Accrued expenses - fire repairs 20,157 -
Accrued Expenses Other 42,785 67,312
Prepaid Rents 3,703 1,281
--------- --------
Total Current Liabilities 208,343 233,105
--------- --------
Tenants' Security Deposits Liability 13,730 13,756
--------- --------
LONG-TERM LIABILITIES
Mortgage Note Payable, 3,958,439 4,029,564
less current portion
Accrued fees payable - affiliate 55,000 49,500
--------- ---------
4,013,439 4,079,064
--------- ---------
Total Liabilities 4,235,512 4,325,925
PARTNERS' CAPITAL
Partners' Capital 953,621 1,006,829
--------- ---------
$ 5,189,133 $ 5,332,754
========= =========
See notes to financial statements. 3
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
Income ---- ----
Rents $ 1,091,704 $ 1,112,011
Less Vacancy Losses 22,388 20,037
--------- ---------
1,069,316 1,091,974
Interest Income 2,246 923
Other Income 6,003 6,633
--------- ---------
1,077,565 1,099,530
--------- ---------
Expenses
Administrative 75,616 82,986
Utilities 158,412 167,079
Management Fee - affiliates 64,491 65,805
Operating and Maintenance 111,222 120,961
Taxes 21,192 24,364
Insurance 51,489 53,543
Interest 406,207 412,412
Depreciation and Amortization 202,155 199,326
--------- ---------
1,090,784 1,126,476
--------- ---------
LOSS BEFORE MORTGAGE EXPENSE (13,219) (26,946)
NONOPERATING EXPENSE:
Loss on involuntary conversion (34,489) -
---------- ---------
LSS BEFORE MORTGAGE ENTITY EXPENSE (47,708) (26,946)
MORTGAGE ENTITY EXPENSE
Partnership reporting fee - affiliate (5,500) (5,500)
---------- ---------
NET LOSS $ (53,208) $ (32,446)
========== =========
See notes to financial statements
4
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1999 AND 1998
General Limited
Partner Partner Total
------- -------- -------
Balance (deficiency)
January 1, 1998 $ (123,296)$ 1,162,571 $ 1,039,275
Net Loss for Year (324) (32,122) (32,446)
---------- ---------- -----------
Balance (deficiency)
December 31, 1998 ( 123,620) 1,130,449 1,006,829
Net Loss for Year ( 532) ( 52,676) ( 53,208)
--------- ------- ---------
Balance (deficiency)
December 31, 1999 $ (124,152)$ 1,077,773 $ 953,621
========== ========= =========
Percentage Interest at
December 31, 1999 and 1998 1% 99% 100%
==== ==== ====
See notes to financial statements
5
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999
1998
------ -
-----
Cash Flow From Operating Activities
Net Loss $ (53,208) $
(32,446)
Adjustments to Reconcile Net Loss to net
Cash provided by operating activities:
Depreciation 199,006
196,177
Amortization of deferred costs 3,149
3,149
Provision for bad debts 22,603
-
Loss on involuntary conversion 34,489
-
Mortgage Entity Expense 5,500
5,500
Changes in Assets and Liabilities:
Increase in tentants' rents recievable (28,500)
(1,043)
Increase in tenants' rent subsidies recievable (7,003)
(5,872)
Decrease (increase) in recievables - affiliates 333
(4,188)
Increase in prepaid expenses -
(1,655)
Increase (decrease) in accounts payable (919)
7,745
Decrease in payables - affiliates (757)
(11,043)
Decrease in accrued mortgage interest payable (538)
(495)
Increase (decrease in accrued expenses - other (24,527)
559
Increase (decrease) in prepaid rents 2,422
(3,941)
Increase in Tenants' Security deposits (352)
(389)
(Decrease increase in tenants' security
deposit liabilities (26)
875
-------- --
------
Net Cash Provided by Operating Activities 151,672
152,933
-------- -
-------
Cash Flows From Investing Activities
Purchase of Rental Property (19,937)
(28,534)
Reserve for Replacements Funded,
Including Interest Earned (22,249)
(21,505)
(Increase) decrease in restricted cash - garnts 350
(375)
(Increase) decrease in grants receivable 967
(39,860)
Increase (decrease) in accounts payable - grants (27,235)
40,235
Insurance proceeds from involuntary conversion 60,295
-
Fire restoration costs (94,784)
-
Increase in accrued expenses - fire reparis 20,157
-
-------- --
------
Net cash used in investing activities (82,436)
(50,039)
-------- --
------
See notes to financial statements
6
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
------
------
Cash flows from financing activities:
Payments on mortgage note payable (64,490)
(58,355)
--------
--------
Net increase in cash 4,746
44,539
Cash, beginning of year 46,010
1,471
--------
--------
Cash, end of year $ 50,756
$ 46,010
=========
=========
Supplemental disclosure of cash flow
Information:
Cash paid during the year for interest $406,745
$412,907
=========
=========
See notes to financial statements. 7
RIVERPLACE APARTMENTS LIMITED PARTNERSIHP
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1. Organization and summary of significant accounting policies:
Organization:
Riverplace Apartments Limited Partnership ("the Partnership"),
organized as a Massachusetts Limited Partnership on February 29,
1988, was formed to acquire and operate an affordable residential
apartment complex consisting of 100 units located at various
scattered locations in Holyoke, Massachusetts ("the Property") as
follows: 298, 300, 302, 304 Chestnut Street; 294, 298 Elm Street;
82, 82@ R. Clemente Street; 44 Lyman Street; 22, 24 Northeast
Street; 532 South Bridge Street; 527 South Summer Street; and
177, 183, 185 West Street. The project is currently operating
under the name Riverplace Apartments. The Partnership Agreement
was last amended and restated on September 1, 1988.
Summary of significant accounting policies:
Use of estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
Method of accounting:
The financial statements of the Partnership have been prepared on
the accrual basis of accounting, consistent with generally
accepted accounting principles.
Rental income:
Rental income is recognized under the operating method as the
rentals become due. Rental payments received in advance are
deferred until earned. Residential units are principally on
short-term leases.
Rental property:
Rental property recorded at cost. Depreciation is provided for
in amounts sufficient to relate the cost of depreciable assets to
operations over their estimated useful lives of 40 years for
buildings, 12 years for certain improvements and 3 to 15 years
for personal property using both straight-line and accelerated
methods. For federal income tax purposes, depreciation is being
calculated using the Modified Accelerated Cost Recovery System
(MACRS).
Improvements to rental property are capitalized, while
expenditures for maintenance and repairs are charged to expense
as incurred. Upon disposal of depreciable property, the
appropriate property accounts are reduced by the related costs
and accumulated depreciation. The resulting gains and losses are
reflected in the statement of operations.
8
RIVERPLACE APARTMENTS LIMTED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
1. Organization and summary of significant accounting policies
- continued:
Deferred financing costs:
Deferred financing costs consist of costs associated with
obtaining the mortgage on the Property. These costs are being
amortized on a straight-line basis over the life of the related
debt.
Income taxes:
Federal and state income taxes are not included in the
accompanying financial statements because these taxes, if any,
are the responsibility of the individual Partners.
The Project is eligible for low-income housing tax credits for a
ten-year
period, beginning in 1988, which are calculated at between 9.12%
- 9.22% of
qualified rehabilitation costs. The maximum annual credit is
$364,094 and it is a
pass-through credit to the partners. The credits for 1999 and
1998 were $32,909 and $350,362, respectively. The year ended
December 31 1999 will be the final year in which low income
housing tax credits may be claimed for the Project.
Provisions of the enabling legislation regarding the tax credit
restrict occupancy of all 100 apartments to qualified low-income
tenants for a fifteen-year period. Recapture provisions of the
legislation could result in a required repayment by the partners
of a portion of the tax credits if relevant provisions are not
adhered to.
Reclassifications:
Certain reclassifications have been made to the 1998 financial
statements to conform with the 1999 presentation.
2. Partners' capital contributions:
The general partners of the Partnership are Mark A. Berezin,
Herbert G. Berezin, and Stephen L. Berezin. As of December 31,
1999 and 1998, the general partners have made aggregate capital
contributions of $3.
The investment limited partner of the Partnership is American
Affordable Housing II Limited Partnership. As of December 31,
1999 and 1998, the investment limited partner has made capital
contributions of $2,186,118.
3. Allocation of benefits:
In accordance with the Partnership Agreement, as last amended,
all profits and losses from operations and tax credits are
allocated as follows:
Investment Limited Partner 99%
General Partners 1
-----
100%
9
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
3. Allocation of benefits - continued:
Distributable cash flow is defined in the Partnership Agreement,
as last amended, to include all profits and losses of the
Partnership from operating activities subject to the following
adjustments:
(a) Depreciation of rental property and amortization of deferred
costs shall not be deducted;
(b) Mortgage principal payment shall be deducted;
(c) Payments to reserves for working capital needs,
improvements, replacements and any other contingencies shall
be deducted;
(d) Amounts paid for capital expenditures shall be deducted,
unless paid from a replacement reserve or funded through
insurance.
(e) Proceeds from a capital transaction shall not be included;
(f) Any rent or interest subsidies received shall be included;
(g) Certain fees to the General Partners and others, as defined
in the Partnership Agreement, shall not be deducted;
(h) The reporting fee shall be deducted only when and to the
extent paid; and
(i) Deposits to or releases of funds, letters of credit or other
security (and the interest, if any, thereon) provided in
connection with any mortgage by the General Partners and their
affiliates shall not be included.
Distributable cash flow from operations shall be applied, subject
to governmental agency and lender approvals (if required), as
follows (all terms are as defined in the Partnership Agreement,
as last amended) -.
(a) First, to the repayment of Subordinated Loans and interest
thereon;
(b) Second the balance there of shall be distributed 5O% to the
Investment Limited Partner and 5O% to the General Partners.
Distributable cash flow from operations in respect to any fiscal
year may not exceed such amounts as governmental agency
regulations and lender regulations permit to be distributed.
Further, the Partnership Agreement provides that until September
1, 2003 all distributable cash flow from operations be paid into
a reserve account to fund the costs of paying increased debt
service on the Partnership's mortgage note due to interest rate
'increases and the costs of refinancing the mortgage as may be
applicable. On September 1, 2003 or such earlier time as
approved by the General Partners and the designated affiliate of
the Investment Limited Partner, any funds remaining in the
reserve account shall be disbursed to the partners.
10
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
3. Allocation of benefits - continued:
Profits from a capital transaction, as defined in the Partnership
Agreement, as last amended, are allocated to the partners as
follows:
(a) First, to restore the negative capital accounts of all
partners to zero in proportion to each partner's negative
capital account balance;
(b) Second to the partners to the extent of their invested
amounts not previously distributed and
(c) Third the balance, if any, of such profits shall be
allocated, 50% to the investment Limited Partner and 50% to
the General Partners.
Losses from a capital transaction are allocated to the partners
as follows:
(a) First, losses shall be allocated to all partners having
positive capital accounts until their capital accounts have
been reduced to zero; and
(b) Second, the balance of such losses shall be allocated to the
General
Partners.4.Cash, restricted deposits and funded reserves:
The Partnership maintains certain operating, security deposit,
replacement
reserve, and grant related cash balances in one financial
institution located in Massachusetts.
Insured the balances are by the Federal Deposit Insurance
Corporation
("FDIC") up to $100,000. Balances in excess of $100,000 are
insured by the Deposit Insurance Fund of Massachusetts.
5.Mortgage note payable:
The mortgage note payable consists of a note in the original
amount of
$4,500,000, dated March 11, 1988 and last amended on May 23,
1989, with Fleet National Bank as successor in interest to Bank
of New England-West, N.A. In February, 1998, Fleet National Bank
transferred the loan servicing to Regency Savings Bank. The note
is secured by the real estate and related personal property of
the Partnership and an assignment of rents and leases. Interest
is currently payable on the note at a rate of 10% per annum.
This rate was fixed at the conversion date (August 1, 1989), as
defined in the loan agreement. The lender has the right to
adjust the interest rate every three years subsequent to the
conversion date to a rate that is equal to 2 1/2% per annum above
the three year Treasury note rate in effect on the interest rate
adjustment dates. The next scheduled interest rate adjustment
date is August 1, 2001. Based upon the current interest rate,
the note requires monthly installments of principal and interest
of $39,240. The note matures on July 1, 2019. However, the
lender has the right to demand repayment of the loan in full on
September 19, 2003 which is the date fifteen years following the
execution of the first Housing Assistance Payments contract for
the Property. The mortgage note may be prepaid by the Partnership
without premium or penalty.
11
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
5. Mortgage note payable - continued
Aggregate principal maturities on the mortgage loan for each of
the next five years, based on the current effective interest
rate, are as follows:
Year Amount
2000 $ 69,990
2001 77,318
2002 85,415
2003 94,359
2004 104,239
The liability of the Partnership under the mortgage note is
limited to the underling value of the real estate collateral plus
any amounts that may be deposited with the lender.
6. Rental housing assistance agreement:
The Partnership has a contract with the Housing Authority of the
City of Holyoke, Massachusetts to receive HUD Section 8 rental
assistance funds for the benefit of qualified tenants. The
program restricts assistance to those who meet certain HUD
established criteria including maximum income limitations. The
Housing Authority is responsible for determining tenant
eligibility for participation 'm the program. This Housing
Assistance Payments ("HAP") contract was awarded in stages
covering all 100 apartment units and it expires m corresponding
stages from September 19, 2003 through March 20, 2004. During
the years ended December 31, 1999 and 1998, rental assistance
income organized under the contract amounted to $875,065 and
$924,969 respectively.
7. Transactions with realted parties:
Marken Properties, Inc. ("Marken"), an affiliate of the General
Partners, is the project management agent. Marken recieves a
base management fee calculated at 6% of gross revenues from the
Property. Management fees expensed in 1999 and a998 amounted to
$64,491 and $65,805, respectively. At December 31, 1999 and
1998, the Partnership has recievables from Marken of $11,904 and
$5,295, respectively.
Personnel working at the project site are employees of Marken and
therefore the Project reimbursed Marken for the actual salaries
and realted benfits, as reflected in the accompanying financial
statements. Such salaries and realted benefit costs expensed
during 1999 and 1998 amounted to $68,295 and $96,520,
respectively. In addition, salaries and realted benefit costs
associated with grants during 1999 and 1998 amounted to $40,553
and $27,364, respectively. At December 31, 1998, $1,107 of these
costs remained unpaid. The payable of $1,107 at December 31,
1998 has been against a recievable from Marken in the
accompanying 1998 balance sheet.
The partnership incurred accounting and data processing fees of
$7,200 to Marken in each of the years ended December 31, 1999 and
1998.
12
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
7. Transactions with related parties - continued
Marken allocates certain office and administrative expenses among
multiple properties under its management. For the year ended
December 31, 1999 and 1998, the Partnership's allocable share of
these costs amounted to $8,049 and $5,044, respectively. At
December 31, 1999, these costs remained unpaid and have been
netted against a reciavable from Marken in the accompanying 1999
balance sheet. In addition, the Partnership purchases various
operating and maintenance supplies and services as well as its
fuel oil and heating service contract from companies (Interstate
Plumbing & Heating Supply Corp., Key Contractors, Inc., and
Hampden Contractors, Inc.) affiliated with the General Partners.
For the year ended December 3 1, 1999 and 1998, the Partnership
incurred costs to Interstate Plumb' & Heating Supply Corp. and
Key Contractors, Inc. for capital equipment and operating and
maintenance supplies and services in the amounts of $22,368 and
$31,045, respectively. For the year ended December 3 1, 1999 and
1998, the Partnership incurred costs to Key Contractors, Inc. for
operating and maintenance supplies and services in the amounts of
$720 and $4,883, respectively. Additionally, the Partnership
incurred costs to Key contractors, Inc. for operating and
maintenance supplies and services associated with grants in the
amount of $9,000 in 1998. Costs incurred to Hampden Contractors,
Inc. for fuel Oil and heating services and to maintain the
laundry concession aggregated $61,549 in 1999 and $54,735 in
1998. As of December 31, 1999 and 1998, the Partnership had
payables to these affiliates totaling $1,904 and $7,005,
respectively.
The partnership shares a site office with other affiliated real
estate partnerships. The Partnership is allocated its share of
costs incurred to maintain this office. Certain of these costs
are reimbursed to the affiliate and amounted to $6,156 in 1999
and $8,870 in 1998. At December 31, 1999, $4,344 of these costs
remained unpaid.
Hampden Contractors, Inc. also serves as the general contractor
for repairs to the Property caused by a fire in 1999 (see Note
10).
Pursuant to the Partnership Agreement, as last amended, a
reporting fee is payable to an affiliate of the Investment
Limited Partner for its services in assisting with the
preparation of tax returns and other reports to the partners as
required by the Partners Agreement. The fee is in an annual
amount of $5,500 and is payable from available cash flow from
operations. Any unpaid fees shall accrue and be payable on a
cumulative basis in the first year in which there is sufficient
cash flow from operations or from the proceeds of a capital
transaction. A reporting fee in the amount of $5,5 00 was
expensed in
13
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
7. Transactions with related parties - continued
the years ended December 3 1, 1999 and 1998. No fees were paid
in 1999 or
1998. The Partnership's cumulative liability to the affiliate
for these fees at December 31, 1999 and 1998 amounted to $55,000
and $49,500, respectively.
In accordance with the provisions of the Partnership Agreement,
as last amended if the Partnership is required to obtain loans to
fund increased debt service under its mortgage note on account
of interest rate increases during the fifteen year period ending
on September 1, 2003, the General Partners are required to either
guarantee such loans or to make such loans to the Partnership.
Any such loans made to the Partnership by the General Partners
will be Subordinated Loans. These loans will bear interest at
the prime rate of Fleet National Bank. The loans and related
interest thereon may only be repaid from available cash flow from
operations or from the proceeds of a capital transaction.
Pursuant to the Partnership Agreement, as last amended, the
General Partners are entitled to receive a sales preparation fee
in the amount of 3 % of the gross sales price upon any sale of
the Property.
8. Grants:
The Partnership was rewarded two grants under the Federally
Assisted Low-Income Housing Elimination Grant Program from the
U.S. Department of Housing and Urban Development (HUD). The
initial granmt was in the amount of $124,960. The Partnership
received the entire proceeds of the grant, of which $29, 544 and
$95,416 were received in 1999 and 1998, respectively. The grant
period expired in 1999. The other grant was awarded to the
Partnership in Januray, 1999 in the amount of $125,000. The term
of the grant is twelve months beginning March 1, 1999. An
extension of up to six months can be obtained with the approval
of HUD. The Partnership received proceeds under this grant of
$73,746 during 1999. The remaining amount available to be drawn
against the grant is $51,254.
The Partnership was also rewarded two grants under the New
Approach Anti-Drug Grant Program (formerly known as the Safe
Neighborhood Grant Program) from HUD. The initial grant was in
the amount of $119,600 and is in a term for twenty-four months
beginning May 1, 1998. An extension of up to six months can be
obtained with the approval of HUD. As of December 31, 1999, the
Partnership has received proceeds under this grant totaling
$91,600, all of which was received in 1999. The remaining amount
available to be drawn against the grant is $28,000. The other
grant was awarded to the Partnership in June, 1999 in the amount
of $129,960. The term of the grant is twenty-four months
beginning June 1, 1999. The Partnership has not requested any
draws against this grant as of December 31, 1999.
14
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
8. Grants - continued:
Expenditures of funds under these grant programs are based upon
budgets apporoved by the HUD. Expenditures must be made in
compliance with the grant agreements and for the specific
purposes of the grant awards. Grant proceeds are received by the
Partnership based upon expenditures incurred (cost eimbursement
method).
Grant expenditures in excess of grant proceeds are reflected as a
recievable in the accompanying balance sheets since these amounts
are expected to be reimbursed to the Partnership under the terms
of the grants agreements. During 1999, the Partnership paid
certain costs totalling $25,918 which are to be reimbursed under
the terms of the grants. Accordingly, this amount will be
replenished to the Partnership's operating cash account upon its
reimbusement.
9. Contingencies:
The Partnership is required to maintain compliance with the Low-
Income Housing Tax Credit Program as a condition to receiving low-
income housing tax credits. Failure to comply with the
requirements of the Low-income Housing Tax Credit Program or to
correct noncompliance a specified time period can result in a
recapture of a portion of the tax credits previously taken.
The Partnership recieves federal financial assistance from the
U.S. Department of Housing and Urban Development (HUD) under the
Drug Elimination and Safe Neighborhood Grant Programs.
Expenditures of funds under these programs require compliance
with the grant agreements and are subject to audit by HUD. Any
disallowed expenditures resulting from such audits become a
liability of the Partnership. In the opinion of the
Partnership's management, disallowed expenditures, if any, will
not have a material effect on the financial position of the
Partnerhsip.
The Partnership is involved in a dispute with the City of
Holyoke, Massachusetts related to water meter readings and sewer
use charges at the Property's 304 Chestnut Street location. In
March 1994, the Holyoke Water Department determined that its
meter reader had been incorrectly reading the water meter at this
location since December 1989. As a result, the City has
alleged that the Partnership had only been billed for a small
portion of the total water consumption and sewer use charges at
this location for the period from December, 1989 to March, 1994.
The City billed the Partnership an amount of approximately
$83,000 for the previously unbilled water and sewer use charges
allegedly incurred for this period of time. The Partnership has
contested the City's actions in this matter.
15
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
9. Contingecies - Continues
As a consequence, on June 6, 1995, the City placed a lien on the
Property for the unpaid water bill, sewer charges and accumulated
interest thereon totaling $94,503. Management is currently
attempting to settle this matter with the City. A liability in
the amount of approximately $42,785 has been accrued in the
accompanying financial statements for 1999 and 1998 and it has
been included with accrued expenses other. Management believes,
based in part upon the opinion of legal counsel, that the
Partnership may be able to settle this matter with the City for
an amount approximating the liability recorded in the
accompanying financial statements. The ultimate resolution of
this matter cannot be determined at the present time.
Nevertheless, due to uncertainties in the settlement process, it
is at least reasonably possible that management's view of the
outcome will change in the near term.
In Septemeber, 1999, the Partnership filed lawsuits against Fleet
Bank and Regency Savings Bank, its predecessor and current
mortgagees, respectively. The Partnership alleges, among other
things, that there are contractual inconsistencies between the
mortgage note on the Property and the commitment letter issued by
the lender which could have a favorable impact to the
Partnership. The lawsuit against Fleet Bank is presently staying
pending settlement discussions. The lawsuit against Regenscy
Savings Bank was dismissed and an appeal has subsequently been
filed. The ultimate outcome of the lawsuits cannot be determined
at the present time. Accordingly, no estimates can be made as to
the time or the amount, if any, of recoveries to the Partnership.
10. Involuntary conversion:
On February 28, 1999, the Partnership suffered a loss as a result
of a fire which damaged three rental units at the apartment
complex. The loss consisted of both physical property damage and
related costs and rent loss caused by an interruption to tenant
occupancy while the Property was being restored. The Partnership
has estimated the aggregate costs to restore the Property to be
$60,295. The Partnership plans to file a supplemental claim on
this loss in the amount of $14,828. As a result of the fire, a
loss of $24,020, has been reflected as a nonoperating expense in
the accompanying 1999 statement of operations. Any additional
insurance proceeds received from the supplemental claim will be
reflected in income when received.
Hampden Contractors, Inc., an affiliate of the General Partners,
has acted as the general contractor for the property restoration.
At December 31, 1999, the Partnership has a liability to the
contractor in the amount of $20,157 for the remaining unpaid
costs associated with this loss.
The fire repairs were substantially complete as of December 31,
1999 with the final certificate of occupancy issued on January
10, 2000.
16
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
11. Concentrations:
The Partnership's operations are concentrated in the multifamily
real estate market. In addition, the Partnership operates in a
heavily regulated environment. The operations of the Partnership
are subject to the administrative directives, rules and
regulations of federal, state and local regulatory agencies,
including, but not limited to, HUD. Such administrative
directives, rules and regulations are subject to change by an act
of Congress or an administrative change mandated by HUD. Such
changes may occur with little notice or inadequate funding to pay
for the related costs, including the additional administrative
burden, to comply with a change.
12. Reconciliation to taxable loss:
Reconciliation's of financial statement net loss to taxable loss
of the Partnership for the years ended December 31, 1999 and 1998
are as follows:
1999 1998
Net loss per financial statement ($ 53,208) ($ 32,446)
Adjustments:
Excess of tax depreciation
over book depreciation ( 61,060) (
62,553)
Increase in allowance for doubtful
Accounts 20,921 -
Rents collected in advance 2,422 (
3,941)
Audit adjustments not reflected in
Tax return 11,861 (
39,860)
Tax adjustments not reflected in
Financial statements 39,860 -
Miscellaneous other - 4,756
-------- --------
Taxable loss per tax return ($ 39,204) ($134,044)
======== ========
17
ADDITIONAL INFORMATION
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
SCHEDULES OF RENTING, ADMINISTRATIVE, OPERATING,
MAINTENANCE,
TAXES AND INSURANCE, AND INTEREST EXPENSES
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
Administrative Expenses
Advertising and Promotion $ 73 $
1,839
Office Salaries 22,055 28,143
Employee Benefits 4,971 10,406
Legal 3,990 676
Auditing 7,925 8,500
Telephone 4,471 3,698
Office Expense 11,954 10,363
Data Processing Fees/ Bank Charges 9,820 9,530
Licenses and Permits 416 240
Miscellaneous 9,959 9,591
-------- --------
Total Administrative Expenses $ 75,616 $ 82,986
======== ========
Utilities
Fuel oil 55,081 $ 46,274
Electricity 14,838 13,531
Water and Sewer 78,816 93,553
Gas 9,677 13,721
-------- --------
Total Utilities $158,412 $ 167,079
======= ========
Operating Expenses
Maintenance Salaries $ 19,258 $ 25,336
Cleaning Salaries 9,580 14,888
Trash Removal 8,892 9,785
Exterminating 9,204 5,403
Cleaning Supplies 1,386 2,003
Snow Removal 948 387
HVAC Repairs and Maintenance 10,969 12,367
Repairs Material 43,144 34,789
Decorating Supplies and Contract 7,841 16,003
-------- --------
Total Operating and Maintenance Expenses $111,222 $ 120,961
======== ========
See independent auditor's report on additional information on
page 1. 18
RIVERPLACE APARTMENTS LIMITED PARTNERSHIP
SCHEDULES OF RENTING, ADMINISTRATIVE, OPERATING,
MAINTENANCE,
TAXES AND INSURANCE, AND INTEREST EXPENSES - CONTINUED
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
Taxes
Real Estate Taxes $ 14,524 $ 15,782
Payroll Taxes 6,649 8,496
Other Taxes 19 86
------- --------
Total Taxes $ 21,192 $ 24,364
======== ========
Insurance Expense
Property and Liability $ 44,844 $ 44,292
Workers' Compensation 2,195 3,105
Employee Health 4,450 6,146
-------- --------
Total Insurance Expenses $ 51,489 $ 53,543
======== ========
Interest Expense
Interest on Mortgage $405,852 $ 412,030
Other Interest 355 382
-------- --------
Total Interest Expense $406,207 $ 412,412
======== ========
See independent auditor's report on additional information on
page 1. 19
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C> <C>
American Affordable
Housing II Limited Partnership
Schedule III - Real
Estate and Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized
Gross amount at which
cost to company Costs**
carried at close of period
--------------- -----------
--------------------------
Buildings
Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve-
and im- Depre- struct uired ciation
Description brances Land provements ments
Land provements Total ciation Date Date Life
-----------------------------------------------------------------
-------------------------------------------------------------
Anthony Garden
Apartments 3,854,588 501,332 2,632,779 1,727,786
501,322 4,360,565 4,861,887 1,243,004 3/89 10/88 5-50
Belen Apts. 1,478,517 54,000 1,468,653 578,398
87,960 2,047,051 2,135,011 856,439 12/88 12/88 5-27.5
Blairview
Associates 1,424,846 80,814 1,705,626 126,309
80,814 1,831,935 1,912,749 892,603 12/88 3/89 5-27.5
Bloomfield
Associates 366,824 11,500 466,419 6,986
11,500 473,405 484,905 208,996 6/88 6/88 5-27.5
Boardman Lake
Apartments 974,163 60,200 590,096 672,641
60,200 1,262,737 1,322,937 568,739 5/89 10/88 5-27.5
Bowdoinham
Associates 1,272,298 95,132 966,112 721,576
65,132 1,687,688 1,752,820 597,004 5/89 11/88 5-27.5
Brewton Ltd. 948,495 72,500 1,211,379 4,023
72,500 1,215,402 1,287,902 537,686 6/88 8/88 5-27.5
F-19
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized Gross amount at
which
cost to company Costs** carried at close
of period
--------------- -----------
--------------------------
Buildings Buildings
Accum. Con- Acq- Depre-
Encum- and im- Improve- and im-
Depre- struct uired ciation
Description brances Land provements ments Land
provements Total ciation Date Date Life
--------------------------------------------------------------------------------
----------------------------------------------
Bridgeview 768,089 12,000 1,012,110 16,826 12,000 1,028,936
1,040,936 495,842 5/88 8/88 5-27.5
Brookhollow
Manor, Ltd. 890,626 25,080 1,003,839 196,617 25,080 1,200,456
1,225,536 508,930 8/88 10/88 5-27.5
Carthage Court
Housing 1,271,232 18,000 1,568,266 73,196 24,700 1,641,462
1,666,162 702,559 10/88 12/88 5-27.5
Deer Crossing
Associates 1,176,665 73,102 1,565,336 32,588 73,102 1,600,924
1,674,026 480,699 4/89 4/89 5-27.5
East China
Township 893,956 52,039 1,140,464 18,404 52,039 1,158,868
1,210,907 543,725 11/88 8/88 5-27.5
East Ridge
Associates 1,245,805 70,000 1,602,988 8,132 70,000 1,611,120
1,681,120 618,561 9/88 8/88 5-27.5
Fairbanks Flats* -0- 40,000 883,522 (883,522)b -0- -0-
-0- -0- 12/88 7/88 5-27.5
Fredericktown
Associates 368,954 20,000 456,784 25,486 20,000 482,270
502,270 204,653 5/88 6/88 5-27.5
* No Financial Statement
F-20
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized Gross amount at
which
cost to company Costs** carried at close
of period
--------------- -----------
--------------------------
Buildings
Buildings Accum. Con- Acq- Depre-
Encum- and im- Improve- and im-
Depre- struct uired ciation
Description brances Land provements ments Land provements
Total ciation Date Date Life
--------------------------------------------------------------------------------
---------------------------------------------
Garden City
Family Hsg. 381,709 14,775 483,300 4,000 14,775 487,300
502,075 177,621 6/88 6/88 5-35
Harbor Hill
Associates 1,214,289 65,132 1,443,798 171,874 65,132 1,615,672
1,680,804 592,031 2/89 11/88 5-27.5
Immokalee
RRH, Ltd. 1,313,544 107,000 1,573,636 17,690 107,000 1,591,326
1,698,326 528,892 3/88 5/88 5-27.5
Kersey Apts. 1,200,725 90,000 1,270,768 254,169 92,040 1,524,937
1,616,977 610,091 10/88 10/88 5-27.5
Kingsley Park
Associates 9,817,656 521,725 12,281,821 145,089 521,725 12,426,910
12,948,635 5,253,016 10/88 3/88 5-27.5
Lake Havasu
Invsmt. Grp. 1,419,469 176,845 1,595,306 0 176,845 1,595,306
1,772,151 514,016 4/88 3/88 5-50
Liberty Center,
Ltd. 1,075,830 198,000 2,480,840 19,338 198,000 2,500,178
2,698,178 704,474 10/88 12/88 5-27.5
Lovington
Housing Assoc. 1,085,725 30,000 1,464,954 92,920 30,000 1,557,874
1,587,874 439,581 2/89 2/89 5-27.5
F-21
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized Gross amount at
which
cost to company Costs** carried at close
of period
--------------- -----------
--------------------------
Buildings Buildings
Accum. Con- Acq- Depre-
Encum- and im- Improve- and im-
Depre- struct uired ciation
Description brances Land provements ments Land provements
Total ciation Date Date Life
--------------------------------------------------------------------------------
----------------------------------------------
Malone Housing
Redevelopment 1,475,345 64,900 1,788,215 162,893 64,900 1,951,108
2,016,008 778,462 11/88 12/88 5-27.5
Maple Tree
Associates 1,231,242 65,132 1,464,954 164,716 65,132 1,629,670
1,694,802 584,177 4/89 5/89 5-27.5
Marionville
Family Hsg. 193,010 19,825 230,104 0 19,825 230,104
249,929 76,153 5/88 6/88 5-35
Michelle Manor
Apartments 903,157 131,945 1,009,687 1,304a 131,945 1,010,991
1,142,936 287,147 9/88 10/88 5-50
Middleburg
Assoc. Ltd. 1,407,240 104,000 1,155,947 261,514 104,000 1,417,461
1,521,461 604,415 3/89 10/88 5-27.5
Nebraska City
Senior Hsg. 416,760 27,119 516,617 0 27,119 516,617
543,736 189,921 7/88 6/88 5-35
Nicollet Island
Historic Homes 1,080,431 0 1,875,059 81,255 0 1,956,314
1,956,314 665,437 12/88 11/88 7-27.5
Paige Hall Ltd. 2,253,150 633,666 2,544,140 706,485 0 3,250,625
3,250,625 1,066,849 4/89 3/89 7-27.5
F-22
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized Gross amount at
which
cost to company Costs** carried at close
of period
--------------- -----------
--------------------------
Buildings Buildings
Accum. Con- Acq- Depre-
Encum- and im- Improve- and im-
Depre- struct uired ciation
Description brances Land provements ments Land
provements Total ciation Date Date Life
--------------------------------------------------------------------------------
----------------------------------------------
Perramond
Associates 1,176,556 88,813 1,487,597 99,968 28,000 1,587,565
1,615,565 479,066 4/89 4/89 7-27.5
Pine Knoll
Devpmt. Co. 1,354,572 45,000 803,220 770,338 199,301 1,573,558
1,772,859 631,160 5/89 10/88 5-27.5
Pine Ridge Ltd. 1,473,827 110,000 1,899,826 13,929 110,000 1,913,755
2,023,755 840,126 6/88 7/88 5-27.5
Pine Terrace
Ltd. 1,186,921 61,500 1,188,396 327,395 61,500 1,515,791
1,577,291 638,866 1/89 12/88 5/27.5
Plattevill
Apartments 542,730 45,000 659,035 71,879 49,607 730,914
780,521 303,409 10/88 10/88 5-27.5
Riverplace
Apts. 4,028,429 175,260 6,463,578 350,997 175,260 6,814,575
6,989,835 2,059,061 3/89 9/88 5-27.5
Sara Pepper
Associates 631,235 67,200 740,378 66,765 22,000 807,143
829,143 264,181 3/88 5/88 5-27.5
Shawmut Ave 632,191 69,325 1,145,503 60,576 69,325 1,206,079
1,275,404 421,937 12/88 11/88 5-34
F-23
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized Gross amount at
which
cost to company Costs** carried at close
of period
--------------- -----------
--------------------------
Buildings Buildings
Accum. Con- Acq- Depre-
Encum- and im- Improve- and im-
Depre- struct uired ciation
Description brances Land provements ments Land
provements Total ciation Date Date Life
--------------------------------------------------------------------------------
----------------------------------------------
Shelbyville FH,
Ltd. 608,328 13,000 736,830 0 13,000 736,830
749,830 236,341 7/88 10/88 5-27.5
Silver Pines
Associates 1,373,754 170,050 1,684,846 119,856 98,500 1,804,702
1,903,202 556,851 8/88 8/88 5-27.5
Springfield Ltd.1,432,134 66,000 1,864,463 30,670 66,000 1,895,133
1,961,133 845,446 3/88 5/88 5-27.5
Stokes Rowe
Ltd. Ptnrshp. 1,054,279 7,321 1,914,238 5,168 7,321 1,919,406
1,926,727 558,715 6/88 6/88 5-27.5
Suncrest, Ltd. 966,275 50,000 1,141,518 4,176 50,000 1,145,694
1,195,694 361,443 5/88 10/88 5-27.5
Village Chase of
Zephyrhills,
Ltd. 1,482,188 151,350 490,589 1,332,111 151,350 1,822,700
1,974,050 764,557 4/89 12/88 7-27.5
Village Walk of
Zephyrhills,
Ltd. 1,387,435 133,650 619,248 1,077,169 133,650 1,696,417
1,830,067 703,838 3/89 12/88 7-27.5
F-24
American Affordable Housing II
Limited Partnership
Schedule III - Real Estate and
Accumulated Depreciation
March 31, 2000
Subsequent
Initial capitalized Gross amount at
which
cost to company Costs** carried at close
of period
--------------- -----------
--------------------------
Buildings Buildings
Accum. Con- Acq- Depre-
Encum- and im- Improve- and im-
Depre- struct uired ciation
Description brances Land provements ments Land provements
Total ciation Date Date Life
--------------------------------------------------------------------------------
---------------------------------------------
Warren
Properties,
Ltd. 1,393,074 70,000 1,648,427 9,720 70,000
1,658,147 1,728,147 542,503 10/88 10/88 5-27
Washington
Mews LP. 818,712 55,225 1,921,104 (81,037) 55,225
1,840,067 1,895,292 764,170 12/88 8/88 5-27.5
Wilder
Associates 1,206,579 62,947 1,519,472 90,417 62,947
1,609,889 1,672,836 583,728 1/89 11/88 5-27.5
Wildwood Villas 1,469,259 100,960 1,872,065 7,686 100,960
1,879,751 1,980,711 811,440 9/88 9/88 5-27.5
---------- --------- ---------- --------- --------- ---------
- ---------- ----------
67,622,818 4,978,364 81,253,852 9,776,176 4,292,033
91,030,028 95,322,061 33,898,561
========== ========= ========== ========= =========
========== ========== ==========
Since the Operating Partnerships maintain a calendar year end the information
reported on this schedule is as of December 31, 1999.
a Decrease due to reallocation of acquistion costs.
b Decrease due to impairment.
**There were no carrying costs as of December 31, 1999. The column has been
ommitted for presentation purposes
F-25
</TABLE>
Notes to Schedule III
American Affordable Housing II Limited Partnership
Reconciliation of Land, Building & Improvements current year changes
Balance at beginning of period-04/01/92..........................$100,538,670
Additions during period:
Acquisitions through foreclosure..................$ 0
Other acquisitions................................ 0
Improvements, etc................................. 37,387
Other............................................. 0
----------
$ 37,387
Deductions during period:
Cost of real estate sold..........................$ 0
Other............................................. 0
----------
$ 0
-----------
Balance at close of period - 03/31/93............................$100,576,057
Additions during period:
Acquisitions through foreclosure..................$ 0
Other acquisitions................................ 0
Improvements, etc................................. 230,965
Other............................................. 0
----------
$ 230,965
Deductions during period:
Cost of real estate sold..........................$ 0
Other............................................. 0
----------
$ 0
-----------
Balance at close of period - 03/31/94............................$100,807,022
Additions during period:
Acquisitions through foreclosure..................$ 0
Other acquisitions................................ 0
Improvements, etc................................. 237,425
Other............................................. 0
----------
$ 237,425
Deductions during period:
Cost of real estate sold..........................$ 0
Other............................................. 0
----------
$ 0
-----------
Balance at close of period - 03/31/95............................$101,044,447
F-26
Notes to Schedule III-Continued
American Affordable Housing II Limited Partnership
Reconciliation of Land, Building & Improvements current year changes-Continued
Balance at close of period - 03/31/95............................$101,044,447
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................ 367,972
Other............................................ 0
-----------
$ 367,972
Deductions during period:
Cost of real estate sold.........................$(6,044,508)
Other............................................ (818,769)
----------
$ (6,863,277)
-----------
Balance at close of period - 03/31/96............................$ 94,549,142
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................ 246,897
Other............................................ 0
-----------
$ 246,897
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................ (383,000)
----------
$ (383,000)
-----------
Balance at close of period - 03/31/97............................$ 94,413,039
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................
Other............................................ 821,235
-----------
$ 821,235
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................ 0
----------
$ 0
-----------
Balance at close of period - 03/31/98............................$ 95,234,274
===========
F-27
Notes to Schedule III-Continued
American Affordable Housing II Limited Partnership
Reconciliation of Land, Building & Improvements current year
changes-Continued
Balance at close of period -
03/31/98............................$ 95,234,274
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................ 571,607
Other............................................ 0
-----------
$ 571,607
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................
(883,522)
-----------
$ (883522)
-----------
Balance at close of period -
03/31/99............................$ 94,922,359
Additions during period:
Acquisitions through foreclosure.................$ 0
Other acquisitions............................... 0
Improvements, etc................................
(1,527025)
Other............................................ 0
-----------
$ (1,527,025)
Deductions during period:
Cost of real estate sold.........................$ 0
Other............................................ 0
-----------
$ 0
-----------
Balance at close of period -
03/31/00............................$ 95,322,061
===========
F-28
Notes to Schedule III - Continued
American Affordable Housing II Limited Partnership
Reconciliation of Accumulated Depreceiation current year changes
Balance at beginning of period -
04/01/92............................$11,032,545
Current year
expense.....................................$3,313,285
---------
Balance at close of period -
3/31/93.................................$14,345,830
Current year
expense.....................................$3,266,272
---------
Balance at close of period -
3/31/94.................................$17,612,102
Current year
expense.....................................$3,206,264
---------
Balance at close of period -
3/31/95.................................$20,818,366
Current year
expense.....................................$1,831,578
---------
Balance at close of period -
3/31/96.................................$22,649,944
Current year
expense.....................................$2,951,028
---------
Balance at close of period -
3/31/97.................................$25,600,972
Current year
expense.....................................$2,826,160
---------
Balance at close of period -
3/31/98.................................$28,427,132
Current year
expense.....................................$2,572,341
---------
Balance at close of period -
3/31/99.................................$30,999,473
Current year
expense.....................................$2,340,373
-----------
Balance at close of period -
3/31/00.................................$33,898,561
==========
F-29
