UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 30, 1999
OR
[]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ____________
0-17619
(Commission File Number)
American Tax Credit Properties L.P.
-----------------------------------
(Exact name of registrant as specified in its governing instruments)
Delaware 13-3458875
- ---------------------------- -----------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of organization)
Richman Tax Credit Properties L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut 06830
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 869-0900
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Securities registered pursuant to Section 12(b) of the Act:
None None
- -------------------- -----------------------------------------
(Title of each Class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- -------------------------------------------------------------------------------
(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
requirement 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 is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in a definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. X
Registrant has no voting stock.
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
BLUE HILL HOUSING
LIMITED PARTNERSHIP
DECEMBER 31, 1998, 1997 AND 1996
<PAGE>
Blue Hill Housing Limited Partnership
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT 6
FINANCIAL STATEMENTS
BALANCE SHEETS 7
STATEMENTS OF PROFIT AND LOSS 8
STATEMENTS OF PARTNERS' EQUITY (DEFICIT) 9
STATEMENTS OF CASH FLOWS 10
NOTES TO FINANCIAL STATEMENTS 11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
Blue Hill Housing Limited Partnership
We have audited the accompanying balance sheets of Blue Hill Housing
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of profit and loss, partners' equity (deficit) and cash flows for the years
ended December 31, 1998, 1997 and 1996. 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. These 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 Blue Hill Housing Limited
Partnership 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 ended
December 31, 1998, 1997 and 1996, in conformity with generally accepted
accounting principles.
Bethesda, Maryland
January 12, 1999
<PAGE>
Blue Hill Housing Limited Partnership
BALANCE SHEETS
December 31,
<TABLE>
<CAPTION>
<S> <C> <C>
1998 1997
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents - operations $ 272,243 $ 369,166
Cash and cash equivalents - entity 135,092 707
Tenant accounts receivable 1,409 4,095
Miscellaneous prepaid expenses 27,030 27,152
----------- -----------
Total current assets 435,774 401,120
----------- -----------
DEPOSITS HELD IN TRUST - FUNDED
Tenant deposits 37,356 37,711
----------- -----------
RESTRICTED DEPOSITS AND FUNDED RESERVES
Escrow deposits 101,752 183,477
Reserve for replacements 213,165 241,862
----------- -----------
314,917 425,339
----------- -----------
RENTAL PROPERTY
Land 111,325 111,325
Buildings 10,868,372 10,839,187
Furnishings 62,003 62,003
----------- -----------
11,041,700 11,012,515
Less accumulated depreciation 3,687,040 3,416,271
----------- -----------
7,354,660 7,596,244
----------- -----------
OTHER ASSET
Intangible assets, net of accumulated
amortization of $175,098 and $105,987 345,984 357,283
----------- -----------
$ 8,488,691 $ 8,817,697
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,718 $ 111,431
Accrued interest payable - mortgage 55,751 55,751
Management fees payable 10,830 10,663
Accounts payable - entity 74,157 92,061
Prepaid revenue 8,662 4,004
Current maturities of mortgage payable 31,362 28,319
Development fee payable 16,235 -
----------- -----------
Total current liabilities 205,715 302,229
----------- -----------
DEPOSITS LIABILITY
Tenant deposits held in trust (contra) 38,139 36,710
----------- -----------
LONG-TERM DEBT
Mortgage payable, less current maturities 6,467,417 6,498,779
Development fee payable - 98,377
----------- -----------
6,467,417 6,597,156
----------- -----------
CONTINGENCY - -
----------- -----------
PARTNERS' EQUITY 1,777,420 1,881,602
----------- -----------
$ 8,488,691 $ 8,817,697
=========== ===========
See notes to financial statements
</TABLE>
<PAGE>
Blue Hill Housing Limited Partnership
STATEMENTS OF PROFIT AND LOSS
Year ended December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 1997 1996
----------- ----------- -----------
Revenue
Rental $ 2,151,805 $ 2,104,840 $ 1,914,452
Interest and other 34,475 37,566 30,997
----------- ----------- -----------
2,186,280 2,142,406 1,945,449
----------- ----------- -----------
Expenses
Administrative 309,536 290,300 261,456
Utilities 317,797 307,875 283,606
Operating and maintenance 462,009 344,999 382,255
Taxes and insurance 179,333 193,017 179,562
Interest 667,709 670,054 672,924
Depreciation and amortization 282,068 407,921 404,875
Other 72,010 117,129 69,184
----------- ----------- -----------
2,290,462 2,331,295 2,253,862
----------- ----------- -----------
NET LOSS $ (104,182) $ (188,889) $ (308,413)
=========== =========== ===========
See notes to financial statements
</TABLE>
<PAGE>
Blue Hill Housing Limited Partnership
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
General Limited
Total partners partner
------------- ------------ ------------
Partners' equity (deficit), December 31, 1995 $ 2,383,904 $ (67,609) $ 2,451,513
Net loss - 1996 (308,413) 7,298 (315,711)
------------- ------------ ------------
Partners' equity (deficit), December 31, 1996 2,075,491 (60,311) 2,135,802
Distribution (5,000) - (5,000)
Net loss - 1997 (188,889) 490 (189,379)
------------- ------------ ------------
Partners' equity (deficit), December 31, 1997 1,881,602 (59,821) 1,941,423
Net loss - 1998 (104,182) 1,940 (106,122)
------------- ------------ ------------
Partners' equity (deficit), December 31, 1998 $ 1,777,420 $ (57,881) $ 1,835,301
============= =========== ============
See notes to financial statements
</TABLE>
<PAGE>
Blue Hill Housing Limited Partnership
STATEMENTS OF CASH FLOWS
Year ended December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 1997 1996
----------- ----------- -----------
Cash flows from operating activities
Net loss $ (104,182) $ (188,889) $ (308,413)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation 270,769 396,622 393,576
Amortization 11,299 11,299 11,299
Changes in asset and liability accounts
(Increase) decrease in assets
Tenant accounts receivable 2,686 (1,128) (696)
Miscellaneous prepaid expenses 122 111 2,476
Tenant security deposits - funded 355 (1,002) 5,791
Mortgage escrow deposits 1,686 (4,373) (974)
Increase (decrease) in liabilities
Accounts payable (102,713) 2,360 (40,474)
Accrued interest payable - (402) (14)
Accrued liabilities 167 1,055 (1,404)
Tenant security deposits held in trust 1,429 - -
Prepaid revenue 4,658 86 1,066
Entity/construction liabilities payable (17,904) 13,072 51,823
----------- ----------- -----------
Net cash provided by operating activities 68,372 228,811 114,056
----------- ----------- -----------
Cash flows from investing activities
Net withdrawals from (deposits to) reserve for
replacements 28,697 (26,733) (8,671)
Net withdrawals from (deposits to) other escrows 80,039 80,669 72,416
Entity/construction investing activities paid from
partnership cash (82,142) (82,141) (79,500)
Net purchases of fixed assets (29,185) (56,454) -
----------- ----------- -----------
Net cash used in investing activities (2,591) (84,659) (15,755)
----------- ----------- -----------
Cash flows from financing activities
Mortgage principal payments (28,319) (25,571) (23,091)
Distributions paid - (5,000) -
----------- ----------- -----------
Net cash used in financing activities (28,319) (30,571) (23,091)
----------- ----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 37,462 113,581 75,210
Cash and cash equivalents, beginning 369,873 256,292 181,082
----------- ----------- -----------
Cash and cash equivalents, end $ 407,335 $ 369,873 $ 256,292
=========== =========== ===========
Supplemental disclosure of cash flow information
Cash paid for interest during the year $ 667,709 $ 670,456 $ 672,938
=========== =========== ===========
See notes to financial statements
</TABLE>
<PAGE>
Blue Hill Housing Limited Partnership
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE A - ORGANIZATION
Blue Hill Housing Limited Partnership was organized under the laws of the
Commonwealth of Massachusetts on November 4, 1987, for the purpose of acquiring,
rehabilitating and operating a low-income residential housing project under
Section 221(d)4 of the National Housing Act. The project consists of 144 units
located in Dorchester, Massachusetts, and is currently operating under the name
of Blue Hill Housing.
Cash distributions are limited by agreements between the partnership and the
Department of Housing and Urban Development (HUD) to the extent of surplus cash
as defined by HUD. If the partnership does not distribute at least $2,500
annually to the limited partner, the general partners are obligated to pay such
shortfall. The distribution is payable from partnership cash.
Each building of the project has qualified and been allocated low-income housing
credits pursuant to Internal Revenue Code Section 42 ("Section 42") which
regulates the use of the project as to occupant eligibility and unit gross rent,
among other requirements. Each building of the project must meet the provisions
of these regulations during each of 15 consecutive years in order to remain
qualified to receive the credits.
NOTE B - 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 revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Property and Equipment
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 over a 27.5 to
40-year life. Personal property is recorded at cost and is depreciated over its
estimated service life of five to seven years using accelerated methods or 12
years 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
reduced by the related costs and accumulated depreciation. The resulting gains
and losses are reflected in the statement of profit and loss.
Amortization
Mortgage costs are amortized over the term of the mortgage loan using the
effective interest method.
Cash and Cash Equivalents
The partnership invests all cash balances in overnight repurchase agreements
with its bank which are invested in U.S. Treasury Notes. Management considers
highly liquid investments with original maturity dates of 90 days or less to be
cash equivalents.
Provision for Doubtful Accounts
The partnership considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required. If amounts become
uncollectible, they will be charged to operations when that determination is
made.
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.
<PAGE>
Blue Hill Housing Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Rental Income
Rental income is recognized as rentals become due. Rental payments received in
advance are deferred until earned. All leases between the partnership and
tenants of the property are operating leases.
U.S. Treasury Note
U.S. Treasury notes of $-0- and $39,791 at December 31, 1998 and 1997,
respectively, are carried at amortized cost, which approximates fair value, and
are classified as held-to-maturity. The U.S. Treasury notes are reflected in the
escrow deposits account. The notes bore interest at 5.10% - 6.25% and matured on
February 28, 1998.
NOTE C - MORTGAGE PAYABLE
The mortgage note is co-insured by the Federal Housing Administration (FHA) and
collateralized by a deed of trust on the rental property. The note bears
interest at the rate of 10.25%. Principal and interest are payable by the
partnership in monthly installments of $58,002 through October 2029.
Under agreements with the mortgage lender and FHA, the partnership is required
to make monthly escrow deposits for taxes, insurance and replacement of project
assets, and is subject to restrictions as to operating policies, rental charges,
operating expenditures and distributions to partners.
The liability of the partnership under the mortgage note is limited to the
underlying value of the real estate collateral plus other amounts deposited with
the lender.
Aggregate maturities of the mortgage payable for each of the next five years are
as follows:
December 31, 1999 $ 31,362
2000 34,732
2001 38,591
2002 42,597
2003 47,175
NOTE D - RELATED PARTY TRANSACTIONS
Development Fee Payable
The partnership has accrued a development fee payable to the general partners
for services provided during the development and rehabilitation of the project.
This fee was capitalized as part of the rental property during the year ended
December 31, 1989 and is payable from capital contributions, the operating
deficit escrow and interest earned on the escrow. During 1998, 1997 and 1996,
$82,142, $82,141 and $79,500, respectively, of this fee was paid. As of December
31, 1998 and 1997, $16,235 and $98,377, respectively, remains payable.
Management Fees
The property is managed by affiliates of the general partners, pursuant to a
management agreement approved by HUD. The current management agreement provides
for a management fee of 6% of monthly rental collections. The fee charged to
operations during 1998, 1997 and 1996 was $129,936, $127,538 and $115,165,
respectively. In addition, a reporting fee of $5.25 per unit per month is
charged for bookkeeping and reporting services. The reporting fee charged to
operations during each of the three years ended December 31 was $9,072. At
December 31, 1998 and 1997, $10,830 and $10,663, respectively, in management
fees are payable.
Partnership Administration Fee
The partnership has entered into a Partnership Administrative Services agreement
with the general partners for their services in managing the business of the
partnership. The annual fee is equal to 50% of net cash flow available for
distribution as defined in the partnership agreement with a maximum of $500,000
per annum. For the years ended December 31, 1998, 1997 and 1996, a partnership
administrative fee of $74,157, $92,061 and $78,989, respectively, was incurred,
of which $74,157 and $92,061, respectively, was payable as of December 31, 1998
and 1997.
<PAGE>
Blue Hill Housing Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998 and 1997
NOTE E - HOUSING ASSISTANCE PAYMENT CONTRACT AGREEMENT
FHA has contracted with the partnership, under Section 8 of Title II of the
Housing and Community Development Act of 1974, to make annual housing assistance
payments to the partnership on behalf of qualified tenants. The agreement
expires June 16, 2003.
NOTE F - OPERATING DEFICIT ESCROW
The partnership has entered into an agreement with the Commonwealth of
Massachusetts, Executive Office of Communities and Development (EOCD) in order
to receive its allocation of housing credit dollar amounts pursuant to Section
42 of the Internal Revenue Code. The agreement requires the establishment of a
reserve to fund operating deficits for a period of five years from the date of
final endorsement of the mortgage. The partnership was required to deposit into
an escrow account $684,507, reduced by an estimate of interest which will be
earned on the account during the deficit period. The deposit was made prior to
final endorsement of the mortgage. As of December 31, 1998 and 1997, $26,372 and
$106,411, respectively, are in escrow. Annually, the escrow will be released by
one-fifth (reduced by any required funding of operations or to make any
replacement required by EOCD).
NOTE G - CONTINGENCY
The project's low-income housing credits are contingent on its ability to
maintain compliance with applicable sections of Section 42. Failure to maintain
compliance with occupant eligibility, and/or unit gross rent, or to correct
noncompliance within a specified time period could result in recapture of
previously taken tax credits plus interest. In addition, such potential
noncompliance may require an adjustment to the contributed capital by the
limited partner.
NOTE H - NEIGHBORHOOD NETWORK CENTER
During 1997, pursuant to HUD's approval, the partnership and Elm Hill Housing,
L.P., an affiliate, established a Neighborhood Network Center. Cost incurred by
the partnership during 1998 and 1997 amounted to $29,185 and $173,014,
respectively. The amount of these costs capitalized during 1998 and 1997
amounted to $29,185 and $146,454, respectively. $26,560 was expensed in 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 TAX CREDIT PROPERTIES L.P.
(a Delaware limited partnership)
By: Richman Tax Credit Properties L.P.,
General Partner
by: Richman Tax Credit Properties Inc.,
general partner
Dated: June 29, 1999 /s/ Richard Paul Richman
------------- ------------------------
by: Richard Paul Richman
President
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 in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/ Richard Paul Richman President, Chief Executive Officer June 29, 1999
------------------------- and Director of the general partner
(Richard Paul Richman) of the General Partner
/s/ Neal Ludeke Vice President and Treasurer of the June 29, 1999
---------------------------------- general partner of the General -------------
(Neal Ludeke) Partner (Principal Financial and
Accounting Officer of Registrant)
</TABLE>
