June 29, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Boston Financial Qualified Housing Tax Credits L.P. V
Annual Report on Form 10-K for the Year Ended March 31, 2000
File Number 0-19706
Dear Sir / Madam:
Pursuant to the requirements of section 15(d) of the Securities Exchange Act of
1934, filed herewith is one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
QH510K-K
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(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 31, 2000
-------------------------------------------
OR
[ ] 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 0-19706
Boston Financial Qualified Housing Tax Credits L.P. V
(Exact name of registrant as specified in its charter)
Massachusetts 04-3054464
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, MA 02110-1106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
--------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
100,000
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 (Subsection 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. [ X ]
State the aggregate sales price of partnership units held by non-affiliates of
the registrant.
$60,904,650 as of March 31, 2000
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b)
OR (c) UNDER THE SECURITIES ACT OF 1933.
<TABLE>
<CAPTION>
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
<S> <C>
Post-effective amendments No. 1 - 5 to the
Form S-11 Registration Statement, File # 33-29935 Part I, Item 1
Acquisition Reports Part I, Item 1
Post-effective amendment No. 6 to the Registration
Statement on Form S-11, File # 33-29935 Part III, Item 12
Prospectus - Sections Entitled:
"Investment objectives and Policies -
Principal Investment Policies" Part I, Item 1
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensations and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED MARCH 31, 2000
TABLE OF CONTENTS
Page No.
PART I
<S> <C>
Item 1 Business K-3
Item 2 Properties K-6
Item 3 Legal Proceedings K-12
Item 4 Submission of Matters to a Vote of
Security Holders K-12
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-13
Item 6 Selected Financial Data K-14
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-14
Item 7A. Quantitative and Qualitative Disclosures about
Market Risk K-17
Item 8 Financial Statements and Supplementary Data K-17
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-17
PART III
Item 10 Directors and Executive Officers
of the Registrant K-17
Item 11 Management Remuneration K-19
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-19
Item 13 Certain Relationships and Related Transactions K-19
PART IV
Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K K-22
SIGNATURES K-23
</TABLE>
<PAGE>
PART I
Item 1. Business
Boston Financial Qualified Housing Tax Credits L.P. V (the "Partnership") is a
Massachusetts limited partnership formed on June 16, 1989 under the laws of the
State of Massachusetts. The Partnership's partnership agreement ("Partnership
Agreement") authorized the sale of up to 100,000 units of Limited Partnership
Interest ("Units") at $1,000 per Unit, adjusted for certain discounts. The
Partnership raised $68,928,650 ("Gross Proceeds"), net of discounts of $350,
through the sale of 68,929 Units. Such amounts exclude five unregistered Units
previously acquired for $5,000 by the Initial Limited Partner, which is also one
of the General Partners. The offering of Units terminated on August 31, 1991. No
further sale of Units is expected.
The Partnership is engaged solely in the business of real estate investment.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole.
The Partnership has invested as a limited partner in other limited partnerships
("Local Limited Partnerships") which own and operate residential apartment
complexes ("Properties") some of which benefit from some form of federal, state
or local assistance programs and all of which qualify for the low-income housing
tax credits ("Tax Credits") added to the Internal Revenue Code (the "Code") by
the Tax Reform Act of 1986. The investment objectives of the Partnership include
the following: (i) to provide current tax benefits in the form of Tax Credits
which qualified limited partners may use to offset their federal income tax
liability; (ii) to preserve and protect the Partnership's capital; (iii) to
provide limited cash distributions from property operations which are not
expected to constitute taxable income during the expected duration of the
Partnership's operations; and (iv) to provide cash distributions from sale or
refinancing transactions. There cannot be any assurance that the Partnership
will attain any or all of these investment objectives. A more detailed
discussion of these investment objectives, along with the risks in achieving
them, is contained in the section of the prospectus entitled "Investment
Objectives and Policies - Principal Investment Policies" which is herein
incorporated by this reference.
Table A on the following page lists the Properties originally acquired by the
Local Limited Partnerships in which the Partnership has invested. Item 7 of this
Report contains other significant information with respect to the Local Limited
Partnerships. As required by applicable rules, the terms of the acquisition of
each Local Limited Partnership interest have been described in supplements to
the Prospectus and collected in the post-effective amendments to the
Registration Statement listed in Part IV of this Report (collectively, the
"Acquisition Reports"); such descriptions are incorporated herein by this
reference.
<PAGE>
<TABLE>
<CAPTION>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
Date
Properties Owned by Local Interest
Limited Partnerships Location Acquired
-------------------------------- ---------------------- --------------
<S> <C> <C>
Strathern Park/Lorne Park (1)* Los Angeles, CA 07/05/90
Park Caton Catonsville, MD 08/17/90
Cedar Lane I London, KY 09/10/90
Silver Creek II Berea, KY 08/15/90
Rosecliff Sanford, FL 09/18/90
Brookwood Ypsilanti, MI 10/01/90
Oaks of Dunlop Colonial Heights, VA 01/01/91
Water Oak Orange City, FL 01/01/91
Yester Oaks Lafayette, GA 01/01/91
Ocean View Fernandina Beach, FL 01/01/91
Wheeler House (2) Nashua, NH 01/01/91
Archer Village Archer, FL 01/01/91
Timothy House Towson, MD 03/05/91
Westover Station Newport News, VA 03/30/91
Carib III St. Croix, VI 03/21/91
Carib II St. Croix, VI 03/01/91
Whispering Trace Woodstock, GA 05/01/91
New Center Detroit, MI 06/27/91
Huguenot Park* New Paltz, NY 06/26/91
Hillwood Pointe Jacksonville, FL 07/19/91
Pinewood Pointe Jacksonville, FL 07/31/91
Westgate* Bismark, ND 07/25/91
Woodlake Hills Pontiac, MI 08/01/91
Bixel House Los Angeles, CA 07/31/91
Magnolia Villas North Hollywood, CA 07/31/91
Schumaker Place Salisbury, MD 09/20/91
Circle Terrace Lansdowne, MD 12/06/91
</TABLE>
* The Partnership's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99%, except for a 95%
interest in Strathern Park/Lorne Park Apartments, an 88.55% interest in
Huguenot Park, and a 49.5% interest in Westgate. Profits and losses arising
from sale or refinancing transactions are allocated in accordance with the
respective Local Limited Partnership Agreements.
(1) On January 1, 1994, Lorne Park merged into Strathern Park in a business
combination accounted for as a pooling of interests. Lorne Park's total
assets, liabilities and partners' equity were combined with Strathern Park
at their existing book value, and neither partnership recognized a gain or
loss on the merger.
(2) In January 2000, the lender for Wheeler House foreclosed on the property
and the Partnership transferred its interest.
<PAGE>
Although the Partnership's investments in Local Limited Partnerships are not
subject to seasonal fluctuations, the Partnership's equity in losses of Local
Limited Partnerships, to the extent it reflects the operations of individual
Properties, may vary from quarter to quarter based upon changes in occupancy and
operating expenses as a result of seasonal factors.
Each Local Limited Partnership has, as its general partners ("Local General
Partners"), one or more individuals or entities not affiliated with the
Partnership or its General Partners. In accordance with the partnership
agreements under which such entities are organized ("Local Limited Partnership
Agreements"), the Partnership depends on the Local General Partners for the
management of each Local Limited Partnership. As of March 31, 2000, the
following Local Limited Partnerships have a common Local General Partner or
affiliated group of Local General Partners accounting for the specified
percentage of the capital contributions to Local Limited Partnerships: (i)
Timothy House and Maidens Choice, representing 10.07%, have Shelter Development
Corp. as Local General Partner; (ii) Hillwood Pointe, Pinewood Pointe and
Whispering Trace, representing 11.92%, have Flournoy Development Co. as Local
General Partner; (iii) Silver Creek and Cedar Lane, representing .87%, have
Robinson A. Williams as Local General Partner; (iv) Water Oak, Yester Oaks and
Ocean View, representing 1.71%, have Seals & Associates, Inc. & E. Lamar Seals
as Local General Partners; (v) Bixel House and Harmony Apartments, representing
7.07%, have Julian Weinstock Construction Co., Inc. as Local General Partner;
and (vi) Carib Villas II and Carib Villas III, representing 1.21%, have First
Centrum Corp. as Local General Partner. The Local General Partners of the
remaining Local Limited Partnerships are identified in the Acquisition Reports,
which are incorporated herein by this reference.
The Properties owned by the Local Limited Partnerships in which the Partnership
has invested are, and will continue to be, subject to competition from existing
and future apartment complexes in the same areas. The continued success of the
Partnership will depend on many outside factors, most of which are beyond the
control of the Partnership and cannot be predicted at this time. Such factors
include general economic and real estate market conditions, both on a national
basis and in those areas where the Properties are located, the availability and
cost of borrowed funds, real estate tax rates, operating expenses, energy costs
and government regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Partnership, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and local conditions, such as competitive
over-building, or a decrease in employment or adverse changes in real estate
laws, including building codes; and (iii) the possible future adoption of rent
control legislation which would not permit increased costs to be passed on to
the tenants in the form of rent increases, or which suppress the ability of the
Local Limited Partnerships to generate operating cash flow. Since most of the
Properties benefit from some form of government assistance, the Partnership is
subject to the risks inherent in that area including decreased subsidies,
difficulties in finding suitable tenants and obtaining permission for rent
increases. In addition, any Tax Credits allocated to investors with respect to a
Property are subject to recapture to the extent that the Property or any portion
thereof ceases to qualify for the Tax Credits. Other future changes in federal
and state income tax laws affecting real estate ownership or limited
partnerships could have a material and adverse affect on the business of the
Partnership.
The Partnership is managed by Arch Street V, Inc., the Managing General Partner
of the Partnership. The other General Partner of the Partnership is Arch Street
V Limited Partnership. The Partnership, which does not have any employees,
reimburses Lend Lease Real Estate Investments, Inc., ("Lend Lease"), an
affiliate of the General Partner for certain expenses and overhead costs. A
complete discussion of the management of the Partnership is set forth in Item 10
of this Report.
<PAGE>
Item 2. Properties
The Partnership owns limited partnership interests in twenty-six Local Limited
Partnerships which own and operate Properties, some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the Tax Credits added to the Code by the Tax Reform Act of 1986. The
Partnership's ownership interest in each Local Limited Partnership is generally
99%, except for Strathern Park/Lorne Park, Westgate and Huguenot Park, where the
Partnership's ownership interests are 95%, 49.5% and 88.55%, respectively.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the properties is fifteen years. During
these fifteen years, the properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; and iii) loans that have repayment
terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Partnership.
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
------------------------------- -------------- ----------------- ------------- ---------------- ------------- -------------
Strathern Park/Lorne Park, a
California Limited Partnership (1)
Strathern Park/Lorne Park
<S> <C> <C> <C> <C> <C> <C>
Los Angeles, CA 241 $8,418,667 $8,418,667 $17,356,140 None 100%
Maiden Choice Limited
Partnership
Park Caton
Catonsville, MD 101 2,513,300 2,513,300 4,005,020 None 100%
Cedar Lane I, Ltd.
Cedar Lane I
London, KY 36 288,587 288,587 1,100,004 None 100%
Silver Creek II, Ltd.
Silver Creek II
Berea, KY 24 193,278 193,278 766,558 None 100%
Tompkins/Rosecliff, Ltd.
Rosecliff
Sanford, FL 168 3,604,720 3,604,720 5,531,104 None 98%
Brookwood L.D.H.A.
Brookwood
Ypsilanti, MI 81 2,373,295 2,373,295 2,996,929 None 91%
Water Oak Apartment, L.P.
Water Oak
Orange City, FL 40 293,519 293,519 1,252,979 None 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
------------------------------ ----------- ----------------- ----------------- -------------------- ------------- -------------
Yester Oaks, L.P.
Yester Oaks
<S> <C> <C> <C> <C> <C> <C>
Lafayette, GA 44 319,254 319,254 1,283,141 FmHA 97%
Ocean View Apartments, L.P.
Ocean View
Fernandina Beach, FL 42 334,177 334,177 1,363,339 None 95%
Burbank Limited Partnership I (2)
Wheeler House
Nashua, NH
Archer Village, Ltd.
Archer Village
Archer, FL 24 171,380 171,380 706,791 FmHA 100%
The Oaks of Dunlop Farms, L.P.
Oaks of Dunlop
Colonial Heights, VA 144 2,791,280 2,791,280 4,413,492 None 100%
Timothy House Limited
Partnership
Timothy House
Towson, MD 112 3,064,250 3,064,250 2,039,244 None 91%
Westover Station Associates, L.P.
Westover Station
Newport News, VA 108 1,972,947 1,972,947 2,653,568 None 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
--------------------------------- -------------- ------------ --------------- ------------------- ------------ -------------
Christiansted Limited Dividend
Housing Association
Carib III
<S> <C> <C> <C> <C> <C> <C>
St. Croix, VI 24 322,260 322,260 1,478,494 FmHA 75%
St. Croix II Limited Partnership
Carib II
St. Croix, VI 20 347,680 347,680 1,399,088 FmHA 90%
Whispering Trace Apartments,
A Limited Partnership
Whispering Trace
Woodstock, GA 40 1,093,330 1,093,330 1,358,987 None 91%
Historic New Center Apartments
Limited Partnership
New Center
Detroit, MI 104 3,077,187 3,077,187 2,913,936 Section 8 87%
Huguenot Park Associates, L.P.
Huguenot Park
New Paltz, NY 24 982,358 982,358 1,400,000 None 100%
Cobblestone Place Townhomes,
A Limited Partnership
Hillwood Pointe
Jacksonville, FL 100 2,356,133 2,356,133 2,888,685 None 95%
Kensington Place Townhomes,
A Limited Partnership
Pinewood Pointe
Jacksonville, FL 136 3,153,173 3,153,173 3,911,198 None 96%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mortgage loans Occupancy
Local Limited Partnership Number Committed at through payable at Type at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
--------------------------------- -------------- ----------------- ------------ ---------------- ------------- ------------
Westgate Apartments Limited
Partnership
Westgate
<S> <C> <C> <C> <C> <C> <C>
Bismark, ND 60 935,893 935,893 1,351,284 None 96%
Woodlake Hills Limited
Partnership
Woodlake Hills
Pontiac, MI 144 4,154,667 4,154,667 3,774,677 None 91%
Bixel House, a California
Limited Partnership
Bixel House
Los Angeles, CA 76 710,677 710,677 1,162,940 Section 8 92%
Harmony Apartments, a California
Limited Partnership
Magnolia Villas
North Hollywood, CA 65 3,203,996 3,203,996 2,206,214 None 100%
Schumaker Place Associates, L.P.
Schumaker Place
Salisbury, MD 96 2,910,453 2,910,453 2,896,834 None 97%
Circle Terrace Associates Limited
Partnership
Circle Terrace
Lansdowne, MD 303 5,811,237 5,811,237 8,573,318 Section 8 97%
------- ------------ ------------ -------------
2,357 $ 55,397,698 $ 55,397,698 $ 80,783,964
======= ============ ============ =============
</TABLE>
<PAGE>
* FmHA This subsidy, which is authorized under Section 515 of
the Housing Act of 1949, can be one or a combination of
different types of financing. For instance, FmHA may
provide: 1) direct below-market-rate mortgage loans for
rural rental housing; 2) mortgage interest subsidies which
effectively lower the interest rate of the loan to 1%; 3) a
rental assistance subsidy to tenants which allows them to pay
no more than 30% of their monthly income as rent with the
balance paid by the federal government; or 4) a combination of
any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title
II of the Housing and Community Development Act of 1974,
allows qualified low-income tenants to pay 30% of their
monthly income as rent with the balance paid by the federal
government.
(1) On January 1, 1994, Lorne Park merged into Strathern Park
in a business combination accounted for as a pooling of
interests. Lorne Park's total assets, liabilities and
partners' equity were combined with Strathern Park at
their existing book value, and neither partnership
recognized a gain or loss on the merger. The combined
Partnerships constructed a 241 Unit apartment project
(Lorne Park: 72 Units, Strathern Park: 169 Units) for
tenants whose income is very low to moderate.
(2) In January 2000, the lender of Wheeler House foreclosed on
the property. This Partnership had total capital
contributions and mortgage payable amounts of $300,531 and
$674,021, respectively as of the foreclosure date.
<PAGE>
Two Local Limited Partnerships invested in by the Partnership each represent
more than 10% of the total capital contributions to be made to Local Limited
Partnerships by the Partnership. The first is Strathern Park/Lorne Park, a
California Limited Partnership. Strathern Park/Lorne Park, representing 15.20%
of the total capital contributions to Local Limited Partnerships, is a 241-unit
apartment complex located in Los Angeles, California.
Strathern Park/Lorne Park is financed by a combination of private and public
sources, including a first mortgage at 9.41% interest and 30 year term with
California Community Reinvestment Corporation, a consortium of private lenders.
Secondary financing has a term of 40 years and is provided by the Community
Redevelopment Agency of the City of Los Angeles and a U.S. Housing and Urban
Development Action Grant, with payments made from the residual receipts of the
project.
The other Local Limited Partnership which represents more than 10% of the total
capital contributions made to Local Limited Partnerships is Circle Terrace
Associates Limited Partnership. Circle Terrace, representing 10.49% of the total
capital contributions to Local Limited Partnerships, is a substantially
renovated 303-unit apartment complex located in Lansdowne, Maryland with 23
garden-style buildings and a newly-constructed community building.
All of the units at Circle Terrace benefit from Section 8 Loan Management Set
Aside Program. Additionally, Circle Terrace assumed a HUD Section 236 mortgage
and financing by Crestar of Richmond Virginia, Inc. and by Maryland's Department
of Housing and Community Rental Housing Program. The Property also has a loan
financed by Baltimore County's Community Development Block Grant program, and it
received weatherization funds from the U.S. Department of Energy.
Duration of leases for occupancy in the Properties described above is six to
twelve months. The Managing General Partner believes the described herein are
adequately covered by insurance.
Additional information required under this Item, as it pertains to the
Partnership, is contained in Items 1, 7 and 8 of this Report.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal or administrative
proceeding. However, Tompkins/Rosecliff, Ltd. which owns a property in Sanford,
Florida, had been involved in certain litigation with an entity formerly
affiliated with this Partnership and its previous local general partner. A
settlement agreement was agreed upon in July 1999 totaling $200,000, of which
the Partnership's share was $100,000. In the opinion of Management, this was an
appropriate settlement, which it believes will eliminate the risk of foreclosure
and recapture posed by this litigation.
Item 4. Submission of Matters to a Vote of Security Holders
None.
<PAGE>
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Partnership. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Partnership.
The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.
As of June 15, 2000, there were 3,241 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. No cash distributions were
paid for the years ended March 31, 2000, 1999 and 1998.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Partnership's financial position and operating results. This information should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Notes
thereto, which are included in Items 7 and 8 of this Report. Certain amounts
have been restated to conform with current year presentation.
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31, March 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Revenue $ 235,508 $ 281,041 $ 222,072 $ 204,683 $ 224,012
Equity in losses of Local Limited
Partnerships (2,576,356) (2,932,545) (4,921,903) (4,044,413) (4,695,617)
Net loss (3,006,310) (3,371,589) (5,794,498) (4,337,761) (4,952,448)
Per Limited Partnership Unit (A) (43.18) (48.42) (83.22) (62.30) (71.13)
Cash and cash equivalents 523,352 449,931 239,708 449,567 243,644
Marketable securities 2,332,268 2,666,281 3,064,717 2,840,127 3,099,255
Investment in Local Limited
Partnerships 18,818,290 21,538,791 24,748,484 30,531,768 34,878,562
Total assets (B) 21,702,984 24,862,400 28,092,950 33,871,495 38,246,869
Total liabilities 295,987 405,479 286,362 298,276 318,728
Other data:
Passive loss (C) (4,835,075) (5,120,476) (5,324,956) (5,154,301) (5,187,774)
Per Limited Partnership Unit (A,C) (69.44) (73.54) (76.48) (74.03) (74.51)
Portfolio income (C) 325,210 340,850 361,519 281,707 350,417
Per Limited Partnership Unit (A,C) 4.67 4.90 5.19 4.05 5.03
Low-Income Housing Tax Credit (C) 10,510,853 10,405,744 10,512,076 10,512,996 10,506,229
Per Limited Partnership Unit (A,C) 150.96 150.97 150.98 150.99 150.90
Local Limited Partnership interests
owned at end of period (D, E) 26 27 27 27 27
</TABLE>
(A) Per Limited Partnership Unit data is based upon 68,929 outstanding Units.
(B) Total assets include the net investment in Local Limited Partnerships.
(C) Income tax information is as of December 31, the year end of the Partnership
for income tax purposes.
(D) On January 1, 1994, Strathern Park and Lorne Park merged.
(E) In January 2000, the Partnership wrote off the foreclosed Wheeler House
property.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Partnership intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements, and are including this
statement for purposes of complying with these safe harbor provisions. Although
the Partnership believes the forward-looking statements are based on reasonable
assumptions, the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, without limitation, general economic and real
estate conditions, and interest rates.
<PAGE>
Liquidity and Capital Resources
At March 31, 2000, the Partnership had cash and cash equivalents of $523,352,
compared with $449,931 at March 31, 1999. The increase is attributable to
proceeds from sales and maturities of marketable securities and cash
distributions received from Local Limited Partnerships, partially offset by net
cash used for operations, investments in Local Limited Partnerships, and
purchases of marketable securities.
Approximately $2,231,000 of marketable securities has been designated as
Reserves by the Managing General Partner. The Reserves were established to be
used for working capital of the Partnership and contingencies related to the
ownership of Local Limited Partnership interests. Management believes that the
investment income earned on the Reserves, along with cash distributions received
from Local Limited Partnerships, to the extent available, will be sufficient to
fund the Partnership's ongoing operations and any contingencies that may arise.
Reserves may be used to fund Partnership operating deficits, if the Managing
General Partner deems funding appropriate.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Partnership might deem it in its best interests
to provide such funds, voluntarily, in order to protect its investment. To date,
the Partnership has advanced approximately $303,000 to Local Limited
Partnerships to fund operating deficits.
Since the Partnership invests as a limited partner, the Partnership has no
contractual duty to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at March 31, 2000, the Partnership had no
contractual or other obligation to any Local Limited Partnership, which had not
been paid or provided for.
Cash Distributions
No cash distributions were made during the years ended March 31, 2000, 1999 or
1998. It is not expected that cash available for distribution, if any, will be
significant during the 2000 calendar year. Based on the results of 1999
operations, the Local Limited Partnerships are not expected to distribute
significant amounts of cash to the Partnership because such amounts will be
needed to fund Property operating costs. In addition, many of the Properties
benefit from some type of federal or state subsidy and, as a consequence, are
subject to restrictions on cash distributions.
Results of Operations
2000 versus 1999
The Partnership's results of operations for the year ended March 31, 2000
resulted in a net loss of $3,006,310 as compared to a net loss of $3,371,589 for
the same period in 1999. The decrease in net loss is primarily attributable to
decreases in equity in losses of Local Limited Partnerships and general and
administrative expenses. These effects were partially offset by provisions for
valuation of investments in Local Limited Partnerships related to advances to
two Local Limited Partnerships recorded in 2000, as well as a decrease in other
revenue. Equity in losses of Local Limited Partnerships decreased primarily due
to an increase in unrecognized losses for Local Limited Partnerships whose
carrying values have been reduced to zero.
1999 versus 1998
The Partnership's results of operations for the year ended March 31, 1999
resulted in a net loss of $3,371,589 as compared to a net loss of $5,794,498 for
the same period in 1998. The decrease in net loss is primarily attributable to a
decrease in equity in losses of Local Limited Partnerships and a provision for
valuation of Investment in Local Limited Partnership in 1998 not required in
1999. The decrease was partially offset by an increase in general and
administrative expenses. Equity in losses of Local Limited Partnerships
decreased primarily due to an increase in unrecognized losses for Local Limited
Partnerships whose carrying values have been reduced to zero.
<PAGE>
Low-Income Housing Tax Credits
The 2000, 1999, and 1998 Tax Credits per Unit were $150.96, $150.97 and $150.98,
respectively. The Tax Credit per Limited Partnership Unit stabilized in 1993 at
approximately $151.00 per Unit. The credits are expected to remain stable
through the year 2000 and then they are expected to decrease as certain
properties reach the end of the ten year credit period. However, because the
compliance periods extend significantly beyond the tax credit periods, the
Partnership is expected to retain most of its interests in the Local Limited
Partnerships for the foreseeable future, which is well beyond 2000.
Property Discussions
Historic New Center in Detroit, Michigan has been generating operating deficits
due to low occupancy and collection problems. However, as previously reported,
the Managing General Partner was successful in finalizing the negotiations with
the lenders for a loan modification. This loan modification should allow the
property to meet debt service coverage and provide capital for the physical
improvements. In addition, a new property manager was hired in October 1998. The
new property manager is focusing on implementing a new marketing strategy and
improving rent collections. As of March 31, 2000, occupancy for Historic New
Center remained at 87%, the same as last quarter. However, bad debt expense
continues to be high as a result of poor collections. The Managing General
Partner continues to meet with property management on a monthly basis to monitor
this issue.
Westgate, located in North Dakota, had been experiencing operating deficits due
to occupancy issues. Occupancy as of March 31, 2000 was 96%. Affiliates of the
Managing General Partner have been working with the Local General Partner, who
has raised some concerns over the long-term financial health of the property. In
response to these concerns and to reduce possible future risk, the Managing
General Partner consummated the transfer of 50% of the Partnership's capital and
profits in the properties to an affiliate of the Local General Partner in
November 1997. Subsequently, the Local General Partner transferred both its
general partner interest and 48.5% of its partnership interest in Westgate to a
non profit general partner effective June 17, 1999. The Managing General Partner
has the right to transfer the Partnership's remaining interest to the new Local
General Partner any time after one year from June 17, 1999. Further, the new
Local General Partner has the right to call the remaining interest after the tax
credit period has expired.
As previously reported, in 1997, the Local General Partner, of Wheeler House,
located in Nashua, New Hampshire was removed due to financial insolvency and an
affiliate of the Managing General Partner stepped in as temporary Local General
Partner. As the new Local General Partner, the affiliate of the Managing General
Partner negotiated with the lender on temporary debt restructuring to reduce
interest rates and extend the due date of the loan to 1998. However, in December
1999, the Lender began foreclosure proceedings. The foreclosure was completed in
early January, 2000. The foreclosure will result in recapture of credits of
approximately $3.70 per unit, which will be on the 2000 Schedule K-1 that will
be filed in April of 2001. In addition, the foreclosure will result in the
allocation of taxable income to the Partnership and loss of future benefits
associated with this property. Since the property's carrying value was zero, the
transaction had no financial statement impact.
The Partnership has implemented policies and practices for assessing potential
impairment of its investments in Local Limited Partnerships. The investments are
analyzed by real estate experts to determine if impairment indicators exist. If
so, the carrying value is compared to the undiscounted future cash flows
expected to be derived from the asset. If there is a significant impairment in
carrying value, a provision to write down the asset to fair value will be
recorded in the Partnership's financial statements.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Partnership for the years ended March 31, 2000, 1999 and 1998.
<PAGE>
Since some of the properties benefit from some form of government assistance,
the Partnership is subject to the risks inherent in that area including
decreased subsidies, difficulties in finding suitable tenants and obtaining
permission for rent increases. In addition, any Tax Credits allocated to
investors with respect to a property are subject to recapture to the extent that
the property or any portion thereof ceases to qualify for the Tax Credits.
Certain of the Properties in which the Partnership invests may be located in
areas suffering from poor economic conditions. Such conditions could have an
adverse effect on rent or occupancy levels at such properties. Nevertheless,
management believes that the generally high demand for below market rate housing
will tend to negate such factors. However, no assurance can be given in this
regard.
Other Development
Lend Lease Real Estate Investments, Inc. ("Lend Lease"), the U.S. subsidiary
of Lend Lease Corporation and the leading U.S. institutional real estate
advisor, as ranked by assets under management, acquired The Boston Financial
Group Limited Partnership ("Boston Financial") on November 3, 1999.
Headquartered in New York and Atlanta, Lend Lease Corporation has regional
offices in 12 cities nationwide. The company ranks as the leading U.S. manager
of tax-exempt assets invested in real estate. Lend Lease is a subsidiary of Lend
Lease Corporation, an international real estate and financial services group
listed on the Australian Stock Exchange. Worldwide, Lend Lease Corporation
operates from more than 30 cities on five continents: North America, Europe,
Asia, Australia and South America. In addition to real estate investments, the
Lend Lease Group operates in the areas of property development, project
management and construction, and capital services (infrastructure).
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Partnership has invested in marketable securities with a fair value of
$2,332,268 at March 31, 2000; these securities, with rates ranging from 4.88% to
8.50%, do not subject the Partnership to significant market risk because of
their short term maturities and high liquidity.
The Partnership has no other exposure to market risk associated with activities
in derivative financial instruments, derivative commodity instruments, or other
financial instruments.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Partnership is Arch Street V, Inc., a
Massachusetts corporation (the "Managing General Partner"), an affiliate of Lend
Lease Real Estate Investments, Inc. ("Lend Lease"). The Managing General Partner
was incorporated in June 1989. Randolph G. Hawthorne is the Chief Operating
Officer of the Managing General Partner and had the primary responsibility for
evaluating, selecting and negotiating investments for the Partnership. The
Investment Committee of the Managing General Partner approved all investments.
The names and positions of the principal officers and the directors of the
Managing General Partner are set forth below.
<PAGE>
Name Position
Jenny Netzer President, Managing Director
Michael H. Gladstone Vice President, Managing Director
Randolph G. Hawthorne Vice President, Managing Director
Paul F. Coughlan Vice President
William E. Haynsworth Vice President
The other General Partner of the Partnership is Arch Street V Limited
Partnership, a Massachusetts limited partnership ("Arch Street L.P.") that was
organized in June 1989. Arch Street, Inc. is the managing general partner of
Arch Street L.P.
The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 44, Principal, Head of Housing and Community Investing. -
Responsible for tax credit investment programs to institutional clients. Joined
Lend Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1987. Previously, led Boston Financial's new business initiatives
and managed firm's Asset Management division, responsible for performance of 750
properties and providing service to 35,000 investors. Prior to joining Boston
Financial, served as Deputy Budget Director for Commonwealth of Massachusetts,
responsible for Commonwealth's health care and public pension program's budgets,
served as Assistant Controller at Yale University and former member of Watertown
Zoning Board of Appeals Officer of Affordable Housing Tax Credit Coalition and
frequent speaker on affordable housing and tax credit industry issues, BA
Harvard University; Master's in Public Policy Harvard's Kennedy School of
Government.
Michael H. Gladstone, age 43, Principal, Legal - Responsible for legal work in
the areas of affordable and conventional housing and investment products and
services. Joined Lend Lease through its 1999 acquisition of Boston Financial,
started with Boston Financial in 1985; served as firm's General Counsel. Prior
to joining Boston Financial, associated with law firm of Herrick & Smith, served
on advisory board of Housing and Development Reporter. Lectured at Harvard
University on affordable housing matters, Member, The National Realty Committee,
Cornell Real Estate Council, National Association of Real Estate Investment
Managers and Massachusetts Bar, BA Emory University; JD & MBA Cornell
University.
Randolph G. Hawthorne, age 50, Principal, Housing and Community Investing -
Responsible for structuring and acquiring real estate investments. Joined Lend
Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1973. Previously, served as Boston Financial's Treasurer, Past
Chairman of the Board of the National Multi Housing Council, having served on
the board since 1989, Past President of the National Housing and Rehabilitation
Association, Member, Multifamily Council of the Urban Land Institute, Frequent
speaker at industry conferences. Serves on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News, BS Massachusetts Institute of
Technology; MBA Harvard Graduate School of Business. Board of Directors National
Housing Conference. Graduated MIT 1971, HBS 1973.
Paul F. Coughlan, age 56, Principal, Housing and Community Investing -
Responsible for marketing and sales of institutional tax credit investments.
Joined Lend Lease through its 1999 acquisition of Boston Financial, started with
Boston Financial in 1975. Previously, served as sales manager for Boston
Financial's retail tax credit fund, AB Brown University.
William E. Haynsworth, age 60, Principal, Housing and Community Investing -
Responsible for the structuring of real estate investments and the acquisition
of property interests. Joined Lend Lease through its 1999 acquisition of Boston
Financial, started with Boston Financial in 1977. Prior to joining Boston
Financial, Acting Executive Director and General Counsel of the Massachusetts
Housing Finance Agency. Served as Director of Non-Residential Development of the
Boston Redevelopment Authority and Associate of Goodwin, Proctor & Hoar, Past
President and current Chairman of the Board of Directors of Affordable Housing
Tax Credit Coalition, BA Dartmouth College; LLB and LLM Harvard Law School.
<PAGE>
Item 11. Management Remuneration
Neither the directors nor officers of Arch Street, Inc., the partners of Arch
Street L.P. nor any other individual with significant involvement in the
business of the Partnership receives any current or proposed remuneration from
the Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 31, 2000, the following is the only entity known to the Partnership
to be the beneficial owner of more than 5% of the total number of Units
outstanding:
<TABLE>
<CAPTION>
Amount
Title of Name and Address Beneficially Percent of
Class of Beneficial Owner Owned Class
<S> <C> <C>
Limited Oldham Institutional Tax Credits LLC 8,024 Units 11.64%
Partner 101 Arch Street
Boston, MA
</TABLE>
Oldham Institutional Tax Credits LLC is an affiliate of Arch Street V, Inc., the
Managing General Partner.
The equity securities registered by the Partnership under Section 12(g) of the
Act consist of 100,000 Units, 68,929 of which had been sold to the public as of
March 31, 2000. The remaining Units were deregistered in Post-Effective
Amendment No. 6, dated January 21, 1992, herein incorporated by this reference.
Holders of Units are permitted to vote on matters affecting the Partnership only
in certain unusual circumstances and do not generally have the right to vote on
the operation or management of the Partnership.
Arch Street L.P. owns five (unregistered) Units not included in the 68,929 Units
sold to the public. Additionally, five registered Units were sold to an employee
of an affiliate of the Managing General Partner of the Registrant. Such Units
were sold at a discount of 7% of the Unit price for a total discount of $350 and
a total purchase price of $4,650.
Except as described in the preceding paragraphs, neither Arch Street, Inc., Arch
Street L.P., Lend Lease nor any of their executive officers, directors, partners
or affiliates is the beneficial owner of any Units. None of the foregoing
persons possesses a right to acquire beneficial ownership of Units.
The Partnership does not know of any existing arrangement that might at a later
date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
The Partnership paid certain fees to and reimbursed certain expenses of the
Managing General Partner or its affiliates in connection with the organization
of the Partnership and the offering of Units. The Partnership was also required
to pay certain fees to and reimburse certain expenses of the Managing General
Partner or its affiliates in connection with the administration of the
Partnership and its acquisition and disposition of investments in Local Limited
Partnerships. In addition, the General Partners are entitled to certain
Partnership distributions under the terms of the Partnership Agreement. Also, an
affiliate of the General Partners will receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership if it is still a limited
partner at the time of such a transaction. All such fees, expenses and
distributions are more fully described in the sections of the Prospectus
entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and
"Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions". Such
sections are incorporated herein by reference. In addition, affiliates of the
Managing General Partner serve as property management agents for New Center,
Carib II, Carib III and Woodlake Hills.
<PAGE>
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Information regarding the fees paid and expense reimbursements made in the three
ended March 31, 2000 is presented below.
Organizational fees and expenses
In accordance with the Partnership Agreement, the Partnership was required to
pay certain fees to and reimburse expenses of the General Partners and others in
connection with the organization of the Partnership and the offering of its
Limited Partnership Units. Selling commissions, fees and accountable expenses
related to the sale of the Units totaling $9,499,984 have been charged directly
to Limited Partners' equity. In connection therewith, $5,858,935 of selling
expenses and $3,641,049 of offering expenses incurred on behalf of the
Partnership have been paid to an affiliate of the General Partners. The
Partnership was required to pay a non-accountable expense allowance for
marketing expenses equal to a maximum of 1% of Gross Proceeds; this is included
in total offering expenses. The Partnership has capitalized an additional
$50,000 which was reimbursed to an affiliate of the General Partners. Total
organization and offering expenses, exclusive of selling commissions, did not
exceed 5.5% of the Gross Proceeds and organizational and offering expenses,
inclusive of selling commissions did not exceed 14.0% of the Gross Proceeds. No
organizational fees and expenses and selling expenses were paid during the three
years ended March 31, 2000.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Partnership was required to
pay acquisition fees to and reimburse acquisition expenses of the Managing
General Partner or its affiliates for selecting, evaluating, structuring,
negotiating and closing the Partnership's investments in Local Limited
Partnerships. Acquisition fees totaled 7% of the gross offering proceeds.
Acquisition expenses, which include such expenses as legal fees and expenses,
travel and communications expenses, costs of appraisals, accounting fees and
expenses, were expected to total 1.5% of the gross offering proceeds. As of
March 31, 2000, acquisition fees totaling $4,825,005 for the closing of the
Partnership's Local Limited Partnership Investments have been paid to an
affiliate of the Managing General Partner. Acquisition expenses totaling
$899,430 at March 31, 2000 were incurred and have been reimbursed to an
affiliate of the Managing General Partner. No acquisition fees or expenses were
paid during the three years ended March 31, 2000.
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an Asset Management Fee for services in connection with
the administration of the affairs of the Partnership. The affiliate currently
receives the base amount of .365% (as adjusted by the CPI factor) of Gross
Proceeds annually as the Asset Management Fee. Asset Management Fees incurred in
each of the three years ended March 31, 2000 are as follows:
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
Asset Management Fees $ 247,331 $ 243,169 $ 238,087
</TABLE>
<PAGE>
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries and benefits expenses. The reimbursements are based upon
the size and complexity of the Partnership's operations. Reimbursements paid or
payable in each of the three years ended March 31, 2000 are as follows:
<TABLE>
<CAPTION>
2000 1999 1998
----------- ----------- --------
<S> <C> <C> <C>
Salaries and benefits expense reimbursements $ 139,757 $ 109,845 $ 127,926
</TABLE>
Property Management Fees
Affiliates of the Managing General Partner are management agents for four Local
Limited Partnerships. Fees charged in each of the two years ended December 31,
1999 are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- --------
<S> <C> <C> <C>
Property Management Fees $ 84,640 $ 80,455 $ 77,858
</TABLE>
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the
Partnership, Arch Street V, Inc. and Arch Street V Limited Partnership, receive
1% of cash distributions paid to partners. No cash distributions were paid to
the General Partners in the three years ended March 31, 2000.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Lend Lease and its affiliates for the three years
ended March 31, 2000 is presented in Note 5 to the Financial Statements.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedule and the auditors' report relating thereto are submitted as a
separate section of this Report. See Index to the Financial Statements on page
F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
28.1 of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3) See Exhibit Index contained herein.
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the year ended March 31,
2000.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
18. Letter on Change in Accounting Principle
27. Financial Data Schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(b) Audited financial statements of Local Limited Partnerships
Strathern Park/Lorne Park
Circle Terrace
(a)(3)(d) None.
<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.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
By: Arch Street V, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date: June 29, 2000
------------------------ -------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Partnership and in the capacities and on the dates indicated:
By: /s/Randolph G. Hawthorne Date: June 29, 2000
------------------------------ -------------
Randolph G. . Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: June 29, 2000
----------------------- -------------
Michael H. Gladstone,
Managing Director, Vice President
<PAGE>
Item 8. Financial Statements and Supplementary Data
<TABLE>
<CAPTION>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
Annual Report on Form 10-K
For The Year Ended March 31, 2000
Index
Page No.
Report of Independent Accountants
<S> <C>
For the years ended March 31, 2000, 1999 and 1998 F-2
Financial Statements
Balance Sheets - March 31, 2000 and 1999 F-3
Statements of Operations - Years Ended
March 31, 2000, 1999 and 1998 F-4
Statements of Changes in Partners' Equity (Deficiency) -
Years Ended March 31, 2000, 1999 and 1998 F-5
Statements of Cash Flows - Years Ended
March 31, 2000, 1999 and 1998 F-6
Notes to the Financial Statements F-7
Financial Statement Schedule
Schedule III - Real Estate and Accumulated Depreciation F-16
See also Index to Exhibits on Page K-22 for the financial statements of the
Local Limited Partnerships included as a separate exhibit in this Annual Report
on Form 10-K.
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Qualified Housing Tax Credits L.P. V:
In our opinion, based on our audits and the reports of other auditors, the
financial statements listed in the accompanying index present fairly, in all
material respects, the financial position of Boston Financial Qualified Housing
Tax Credits L.P. V (the "Fund") at 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 accounting principles generally
accepted in the United States. In addition, in our opinion, the financial
statement schedule listed in the accompanying index presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related financial statements. These financial statements and financial
statement schedule are the responsibility of the Fund'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 local
limited partnerships for which $35,175,229 and $32,930,842 of cumulative
equity in losses are included in the balance sheet as of March 31, 2000 and
1999, respectively, and for which net losses of $2,576,356, $2,932,545,
and $4,921,903 are included in the accompanying financial statements for
the years ended March 31, 2000, 1999, 1998, respectively. Those statements
were audited by other auditors whose reports thereon have been furnished to us,
and our opinion expressed herein, insofar as it relates to the amounts included
for the Local Limited Partnerships, is based solely on the reports of the other
auditors. We conducted our audits of these financial statements in accordance
with auditing standard generally accepted in the United States, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits and the reports of other
auditors provide a reasonable basis for the opinions expressed above.
As discussed in Note 2 to the financial statements, in 2000 the Partnership
changed the basis of presentation of its financial statements from a combined
basis to a stand-alone basis. The 1999 financial statements have been restated
to show the effects of this change in reporting entity.
/S/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
June 22, 2000
Boston, Massachusetts
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
BALANCE SHEETS
March 31, 2000 and 1999
1999
2000 (Restated)
Assets
<S> <C> <C>
Cash and cash equivalents $ 523,352 $ 449,931
Accounts receivable from affiliates - 174,739
Investments in Local Limited Partnerships, net (Note 4) 18,818,290 21,538,791
Marketable securities, at fair value (Note 3) 2,332,268 2,666,281
Other assets 29,074 32,658
------------- -------------
Total Assets $ 21,702,984 $ 24,862,400
============= =============
Liabilities and Partners' Equity
Accounts payable to affiliates (Note 5) $ 121,184 $ 143,443
Accounts payable and accrued expenses 43,605 115,218
Deferred revenue (Note 6) 131,198 146,818
------------- -------------
Total Liabilities 295,987 405,479
------------- -------------
General, Initial and Investor Limited Partners' Equity 21,443,142 24,449,452
Net unrealized gains (losses) on marketable securities (36,145) 7,469
---------------- -------------
Total Partners' Equity 21,406,997 24,456,921
------------- -------------
Total Liabilities and Partners' Equity $ 21,702,984 $ 24,862,400
============= =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 2000, 1999 and 1998
1999 1998
2000 (Restated) (Restated)
Revenue:
<S> <C> <C> <C>
Investment $ 156,312 $ 158,954 $ 179,908
Other 79,196 122,087 42,164
------------- ------------- --------------
Total Revenue 235,508 281,041 222,072
------------- ------------- --------------
Expenses:
General and administrative
(includes reimbursements to an affiliate
in the amounts of $139,757, $109,845
and $127,926 in 2000, 1999 and 1998,
respectively) (Note 5) 219,794 453,057 237,092
Asset management fees, related party (Note 5) 247,331 243,169 238,087
Provision for valuation of investment in
Local Limited Partnership 174,739 - 590,197
Amortization 23,598 23,859 29,291
------------- ------------- --------------
Total Expenses 665,462 720,085 1,094,667
------------- ------------- --------------
Loss before equity in losses of Local Limited
Partnerships (429,954) (439,044) (872,595)
Equity in losses of Local Limited
Partnerships (Note 4) (2,576,356) (2,932,545) (4,921,903)
------------- ------------- --------------
Net Loss $ (3,006,310) $ (3,371,589) $ (5,794,498)
============= ============= ==============
Net Loss allocated:
General Partners $ (30,063) $ (33,716) $ (57,945)
Limited Partners (2,976,247) (3,337,873) (5,736,553)
------------- ------------- --------------
$ (3,006,310) $ (3,371,589) $ (5,794,498)
============= ============= ==============
Net Loss per Limited Partnership
Unit (68,929 Units) $ (43.18) $ (48.42) $ (83.22)
============= ============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 2000, 1999 and 1998
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partner Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1997 $ (255,951) $ 5,000 $ 33,866,490 $ (42,320) $ 33,573,219
------------ ------------ ------------ ------------ ------------
Comprehensive Income (Loss):
Change in net unrealized
losses on marketable securities
available for sale - - - 27,867 27,867
Net Loss (57,945) - (5,736,553) - (5,794,498)
------------ ------------ ------------ ------------ ------------
Comprehensive Income (Loss) (57,945) - (5,736,553) 27,867 (5,766,631)
------------ ------------ ------------ ------------ ------------
Balance at March 31, 1998
(restated) (313,896) 5,000 28,129,937 (14,453) 27,806,588
------------ ------------ ------------ ------------ ------------
Comprehensive Income (Loss):
Change in net unrealized
losses on marketable securities
available for sale - - - 21,922 21,922
Net Loss (33,716) - (3,337,873) - (3,371,589)
------------ ------------ ------------ ------------ ------------
Comprehensive Income (Loss) (33,716) - (3,337,873) 21,922 (3,349,667)
------------ ------------ ------------ ------------ ------------
Balance at March 31, 1999
(restated) (347,612) 5,000 24,792,064 7,469 24,456,921
------------ ------------ ------------ ------------ ------------
Comprehensive Loss:
Change in net unrealized
gains on marketable securities
available for sale - - - (43,614) (43,614)
Net Loss (30,063) - (2,976,247) - (3,006,310)
------------ ------------ ------------ ------------ ------------
Comprehensive Loss (30,063) - (2,976,247) (43,614) (3,049,924)
------------ ------------ ------------ ------------ ------------
Balance at March 31, 2000 $ (377,675) $ 5,000 $ 21,815,817 $ (36,145) $21,406,997
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 2000, 1999 and 1998
1999 1998
2000 (Restated) (Restated)
Cash flows from operating activities:
<S> <C> <C> <C>
Net loss $ (3,006,310) $ (3,371,589) $ (5,794,498)
Adjustments to reconcile net loss to net
cash used for operating activities:
Equity in losses of Local Limited Partnerships 2,576,356 2,932,545 4,921,903
Provision for valuation of Investment in Local
Limited Partnership 174,739 - 590,197
Amortization 23,598 23,859 29,291
(Gain) Loss on sales and maturities of
marketable securities (2,498) 14,790 (1,154)
Cash distribution income included in cash
Distributions received from Local Limited
Partnerships (5,132) (65,089) -
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Other assets 3,584 6,383 10,992
Accounts payable to affiliate (22,259) 64,233 (9,017)
Accounts payable and accrued expenses (71,613) 47,527 31,999
Deferred revenue (15,620) 7,357 (34,896)
------------- ------------- -------------
Net cash used for operating activities (345,155) (339,984) (255,183)
------------- ------------- -------------
Cash flows from investing activities:
Investments in Local Limited Partnerships (127,767) (50,420) -
Purchases of marketable securities (1,067,998) (2,523,829) (2,889,608)
Proceeds from sales and maturities of
marketable securities 1,360,895 2,929,397 2,694,039
Cash distributions received from Local Limited
Partnerships 253,446 368,798 241,893
Advances to Local Limited Partnerships (188,700) (173,739) (1,000)
Repayment of advances to Local Limited
Partnerships 188,700 - -
------------- ------------- -------------
Net cash provided by investing activities 418,576 550,207 45,324
------------- ------------- -------------
Net increase (decrease) in cash and
cash equivalents 73,421 210,223 (209,859)
Cash and cash equivalents, beginning 449,931 239,708 449,567
------------- ------------- -------------
Cash and cash equivalents, ending $ 523,352 $ 449,931 $ 239,708
============= ============= =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
Notes to the Financial Statements
1. Organization
Boston Financial Qualified Housing Tax Credits L.P. V ("the Partnership") was
formed on June 16, 1989 under the laws of the State of Massachusetts for the
primary purpose of investing, as a limited partner, in other limited
partnerships ("Local Limited Partnerships"), some of which own and operate
apartment complexes benefiting from some form of federal, state or local
assistance, and each of which qualifies for low-income housing tax credits. The
Partnership's objectives are to: (i) provide current tax benefits in the form of
tax credits which qualified investors may use to offset their federal income tax
liability; (ii) preserve and protect the Partnership's capital; (iii) provide
limited cash distributions from property operations which are not expected to
constitute taxable income during Partnership operations; and (iv) provide cash
distributions from sale or refinancing transactions. The General Partners of the
Partnership are Arch Street V, Inc., a Massachusetts corporation, which serves
as the Managing General Partner, and Arch Street V Limited Partnership, a
Massachusetts Limited Partnership whose general partner consists of Arch Street
V, Inc., which also serves as the Initial Limited Partner. Both of the General
Partners are affiliates of Lend Lease Real Estate Investments, Inc. ("Lend
Lease"). The fiscal year of the Partnership ends on March 31.
The Partnership's partnership agreement (the "Partnership Agreement") authorized
the sale of up to 100,000 units of limited partnership interest ("Units") at
$1,000 per Unit, adjusted for certain discounts. On August 31, 1991, the
Partnership held its final investor closing. In total, the Partnership received
$68,928,650 of capital contributions, net of discounts, from investors admitted
as Limited Partners for 68,929 Units.
Generally, profits, losses, tax credits and cash flows from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners after certain priority payments.
Under the terms of the Partnership Agreement, the Partnership initially
designated 4% of the Gross Proceeds from the sale of Units as a reserve for
working capital of the Partnership and contingencies related to ownership of
Local Limited Partnership interests. The Managing General Partner may increase
or decrease such Reserves from time to time, as it deems appropriate. At March
31, 2000, the Managing General Partner has designated approximately $2,231,000
of marketable securities as such Reserves.
2. Significant Accounting Policies
Basis of Presentation
The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting because the Partnership does not have control
over the major operating and financial policies of the Local Limited
Partnerships in which it invests. Under the equity method, the investment is
carried at cost, adjusted for the Partnership's share of income or loss of the
Local Limited Partnerships, additional investments in and cash distributions
from the Local Limited Partnerships. Equity in income or loss of the Local
Limited Partnerships is included in the Partnership's operations. The
Partnership has no obligation to fund liabilities of the Local Limited
Partnerships beyond its investment and therefore a Local Limited Partnership's
investment will not be carried below zero. To the extent that equity losses are
incurred when a Local Limited Partnership's respective investment balance has
been reduced to zero, the losses will be suspended to be used against future
income. Distributions received from Local Limited Partnerships whose respective
investment balance has been reduced to zero are included in income.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the
Partnership. These fees and expenses are included in the Partnership's
Investments in Local Limited Partnerships and are being amortized on a
straight-line basis over 35 years.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation (continued)
The General Partners have decided to report the results of the Local Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying financial
statements is as of December 31, 1999, 1998 and 1997.
The general partner of Wheeler House Apartments, Ltd. ("Wheeler House") Local
Limited Partnership and the General Partner of the Partnership are affiliated
entities. In prior periods, the Partnership combined its financial statements
with those of Wheeler House. During 2000, the General Partner concluded that the
presentation of the financial position and results of operations of the
Partnership, with Wheeler House accounted for using the equity method, resulted
in a more meaningful presentation. All prior period financial data has been
restated to reflect the change in reporting entity.
The Partnership recognizes a decline in the carrying value of its investments in
Local Limited Partnerships when there is evidence of a non-temporary decline in
the recoverable amount of the investment. There is a possibility that the
estimates relating to reserves for non-temporary declines in carrying value of
investments in Local Limited Partnerships may be subject to material near term
adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is
subject to risks inherent in the ownership of property which are beyond its
control, such as fluctuations in occupancy rates and operating expenses,
variations in rental schedules, proper maintenance and continued eligibility for
tax credits. If the cost of operating a property exceeds the rental income
earned thereon, the Partnership may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
Cash Equivalents
Cash equivalents consist of short-term money market instruments with original
maturities of ninety days or less at acquisition and approximate fair value.
Marketable Securities
Marketable securities consists primarily of U.S. Treasury instruments and
various asset-backed investment vehicles. The Partnership's marketable
securities are classified as "Available for Sale" securities and are reported at
fair value as reported by the brokerage firm at which the securities are held.
Realized gains and losses from the sales of securities are based on the specific
identification method. Unrealized gains and losses are excluded from earnings
and reported as a separate component of partners' equity.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
an obligation of the partners of the Partnership.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value, investments accounted for under the
equity method, and all nonfinancial assets such as real property. Unless
otherwise described, the fair values of the Partnership's assets and liabilities
which qualify as financial instruments under SFAS No. 107 approximate their
carrying amounts in the accompanying balance sheets.
Reclassifications
Certain reclassifications have been made to prior years' financial statements to
conform to the current year presentation.
3. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by the US
Treasury and other US
<S> <C> <C> <C> <C>
government corporations and agencies $ 2,046,494 $ 1,407 $ (26,680) $ 2,021,221
Mortgage backed securities 321,919 95 (10,967) 311,047
------------ ----------- ---------- ------------
Marketable securities at March 31, 2000 $ 2,368,413 $ 1,502 $ (37,647) $ 2,332,268
============ =========== ========== ============
A summary of marketable securities is as follows:
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by the US
Treasury and other US
government corporations and agencies $ 2,347,480 $ 11,715 $ (4,787) $ 2,354,408
Mortgage backed securities 311,332 1,865 (1,324) 311,873
------------ ----------- ---------- ------------
Marketable securities at March 31, 1999 $ 2,658,812 $ 13,580 $ (6,111) $ 2,666,281
============ =========== ========== ============
</TABLE>
The contractual maturities at March 31, 2000 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in less than one year $ 998,056 $ 994,143
Due in one year to five years 1,048,438 1,027,078
Mortgage backed securities 321,919 311,047
----------- -----------
$ 2,368,413 $ 2,332,268
=========== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from the sales and
maturities of marketable securities were approximately $493,000, $451,000 and
$1,792,000 during the years ended March 31, 2000, 1999 and 1998, respectively.
Proceeds from the maturities of marketable securities were approximately
$868,000, $2,479,000 and $902,000 during the years ended March 31, 2000, 1999
and 1998, respectively. Included in investment income are gross gains of $2,617,
$4,895 and $7,205 and gross losses of $119, $19,685 and $6,051 that were
realized on the sales during the years ended March 31, 2000, 1999 and 1998,
respectively.
4. Investments in Local Limited Partnerships
The Partnership uses the equity method to account for its limited partner
interest in twenty-six Local Limited Partnerships. Each of these Local Limited
Partnerships owns and operates multi-family housing complexes, most of which are
government-assisted. The Partnership, as Investor Limited Partner pursuant to
the various Local Limited Partnership Agreements which contain certain operating
and distribution restrictions, has generally acquired a 99% interest in the
profits, losses, tax credits and cash flows from operations of each of the Local
Limited Partnerships, with the exception of Strathern Park/Lorne Park
Apartments, Westgate and Huguenot Park, which are 95%, 49.5% and 88.55%,
respectively. Upon dissolution, proceeds will be distributed according to each
respective partnership agreement.
The following is a summary of Investments in Local Limited Partnerships at
March 31:
<TABLE>
<CAPTION>
1999 1998
2000 (Restated) (Restated)
Capital contributions and advances paid to
Local Limited Partnerships and purchase price
paid to withdrawing partners of Local Limited
<S> <C> <C> <C>
Partnerships $ 55,571,437 $ 55,570,462 $ 55,520,042
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of $2,566,642,
$1,290,733 and $177,371 in 2000, 1999 and
1998, respectively) (35,175,229) (32,930,842) (30,063,386)
Cumulative cash distributions received
from Local Limited Partnerships (1,594,323) (1,341,854) (973,056)
------------- ------------- -------------
Investments in Local Limited Partnerships
before adjustment 18,801,885 21,297,766 24,483,600
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,006,357 1,039,751 1,039,751
Accumulated amortization of acquisition
fees and expenses (226,016) (208,529) (184,670)
------------- ------------- -------------
Investments in Local Limited Partnerships 19,582,226 22,128,988 25,338,681
Reserve for valuation of Investment in Local
Limited Partnership (763,936) (590,197) (590,197)
------------- ------------- -------------
$ 18,818,290 $ 21,538,791 $ 24,748,484
============= ============= =============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
The Partnership has provided a reserve for valuation for one of its investments
in Local Limited Partnerships, Westgate Apartments, because there is evidence of
a non-temporary decline in the recoverable amount of the investment.
The lender for Wheeler House foreclosed on the property in January 2000. The
Partnership does not anticipate any further obligations, receipts or operations
relative to this property. As no material gain or loss is expected, and the
Partnership's net investment is zero, all capital accounts have been written off
and excluded from the above investment amounts as of March 31, 2000.
Summarized financial information as of December 31, 1999, 1998 and 1997 (due to
the Partnership's policy of reporting the financial information of its Local
Limited Partnership interests on a 90 day lag basis) of all Local Limited
Partnerships in which the Partnership has invested as of that date is as
follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
1998 1997
1999 (Restated) (Restated)
Assets:
<S> <C> <C> <C>
Investment property, net $ 105,177,955 $ 109,435,843 $ 113,801,556
Current assets 3,101,609 3,057,635 3,323,600
Other assets 5,902,390 5,871,685 5,952,402
-------------- -------------- --------------
Total Assets $ 114,181,954 $ 118,365,163 $ 123,077,558
============= ============== ==============
Liabilities and Partners' Equity:
Long-term debt, net of current portion $ 81,383,935 $ 82,067,318 $ 84,748,636
Current liabilities (including current portion
of long-term debt) 2,803,716 9,399,982 8,071,988
Other liabilities 9,502,115 2,206,860 1,480,334
-------------- -------------- --------------
Total Liabilities 93,689,766 93,674,160 94,300,958
Partnership's Equity 15,351,058 19,610,331 23,844,561
Other Partners' Equity 5,141,130 5,080,672 4,932,039
-------------- -------------- --------------
Total Liabilities and Partners' Equity $ 114,181,954 $ 118,365,163 $ 123,077,558
============== ============== ==============
Summarized Income Statements - for the years ended
December 31,
Rental and other income: $ 15,034,859 $ 14,644,117 $ 14,408,684
-------------- -------------- --------------
Expenses:
Operating 8,504,043 7,852,719 7,812,411
Interest 5,762,221 5,916,749 5,983,954
Depreciation and amortization 4,760,003 4,940,971 5,822,201
-------------- -------------- --------------
Total Expenses 19,026,267 18,710,439 19,618,566
-------------- -------------- --------------
Net Loss $ (3,991,408) $ (4,066,322) $ (5,209,882)
============== ============== ==============
Partnership's share of Net Loss (1999 and 1998
include adjustments from prior
years of $(25,790)
and $(12,175), respectively) $ (3,927,947) $ (3,980,818) $ (5,097,131)
============== ============== ==============
Other partners' share of Net Loss $ (89,251) $ (97,679) $ (112,751)
============== ============== ==============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
For the years ended March 31, 2000, 1999 and 1998, the Partnership has not
recognized $1,351,591, $1,048,273 and $175,228, respectively, of equity in
losses of Local Limited Partnerships relating to several Local Limited
Partnerships where cumulative equity in losses exceeded its total investments in
these Local Limited Partnerships.
The Partnership's equity as reflected by the Local Limited Partnerships of
$15,351,058 differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $18,801,885 principally because: a) the
Partnership has not recognized $2,566,642 of equity in losses of eight Local
Limited Partnerships whose equity in losses exceeded its total investment; b)
distributions made by Local Limited Partnerships during the quarter ended March
31, 2000 are not reflected in the December 31, 1999 balance sheets of the Local
Limited Partnerships; and c) syndication costs charged to equity by a Local
Limited Partnership are not reflected in the Partnership's investment in the
Local Limited Partnership.
5. Transactions with Affiliates
An affiliate of the Managing General Partner currently receives the base amount
of 0.365 (as adjusted by the CPI factor) of Gross Proceeds annually as the Asset
Management Fee for administering the affairs of the Partnership. Asset
Management Fees for the years ended March 31, 2000, 1999 and 1998 are $247,331,
$243,169 and $238,087, respectively. Included in accounts payable to affiliate
at March 31, 2000 and 1999 are $62,841 and $122,057, respectively, of Asset
Management Fees due to an affiliate of the Managing General Partner.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Partnership's operating expenses. Included in general and administrative
expenses for the years ended March 31, 2000, 1999 and 1998 are $139,757,
$109,845 and $127,926, respectively, that the Partnership has paid or is payable
as reimbursement for salaries and benefits expenses. The amounts payable for
salaries and benefits at March 31, 2000 and 1999 are $58,343 and $21,386,
respectively.
Affiliates of the Managing General Partner are the management agents for four
Local Limited Partnerships in which the Partnership has invested. The management
fee charged to each property is equal to 4% of property gross revenues. Included
in operating expenses in the summarized income statements in Note 4 to the
financial statements are $84,640, $80,455 and $77,858 of fees paid to the
affiliates for the years ended December 31, 1999, 1998 and 1997, respectively.
6. Deferred Revenue
Under the terms of a Local Limited Partnership Agreement, the Partnership was
required to fund a Supplemental Reserve in the amount of $196,000. The original
purpose of the contribution was to fund the development expenses of the Local
Limited Partnership. In lieu of transferring the Supplemental Reserve to the
Local Limited Partnership, the Partnership designated $196,000 of its cash and
cash equivalents for this purpose. Since the funds were not needed, the Local
Limited Partnership Agreement allows that the established Supplemental Reserve,
along with the interest earned, are available to pay the Partnership its annual
priority distribution. As of March 31, 2000, $121,000 has been released to the
Partnership. The balance of the Supplemental Reserve is included in cash and
cash equivalents. This balance, along with the accrued interest thereon, has
also been accounted for as deferred revenue, as it represents the future annual
priority distributions to be released to the Partnership from this Reserve.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
7. Litigation
The Partnership is not a party to any pending legal or administrative
proceeding. However, Tompkins/Rosecliff, Ltd. which owns a property in Sanford,
Florida, had been involved in certain litigation with an entity formerly
affiliated with this partnership and its previous local general partner. A
settlement agreement was agreed upon in July 1999 totaling $200,000 of which the
Partnership's share was $100,000. In the opinion of Management, this was an
appropriate settlement, which it believes will eliminate the risk of foreclosure
and recapture posed by this litigation.
8. Transfer of Interest in Local Limited Partnership
On November 10, 1997, the Managing General Partner transferred 50% of its
interest in capital and profits of Westgate to the local general partner.
Included in this transfer is a put option. The put option grants the Managing
General Partner the right to put the Partnership's remaining interest to the
local general partner any time after one year has elapsed. For financial
reporting purposes, the Partnership has written down the remaining carrying
value of this investment in Local Limited Partnership to zero, because it is
unknown as to whether the Partnership will be able to recover its remaining
invested balance. The Partnership will retain its full share of tax credits
until such time as the remaining interest is put to the local general partner.
9. Federal Income Taxes
The following schedule reconciles the reported financial statement loss for
the fiscal years ended March 31, 2000, 1999 and 1998 to the loss reported on
Form 1065, U.S. Partnership Return of Income for the years ended December 31,
1999, 1998 and 1997:
<TABLE>
<CAPTION>
1999 1998
2000 (Restated) (Restated)
<S> <C> <C> <C>
Net Loss per financial statements $ (3,006,310) $ (3,371,589) $ (5,794,498)
Adjustment for equity in losses of Local Limited
Partnerships for tax purposes in excess of
equity in losses for financial reporting purposes (76,548) (341,051) (1,419,314)
Equity in losses of Local Limited Partnerships not
recognized for financial reporting purposes (1,356,723) (1,113,362) (175,228)
Adjustment to reflect March 31 fiscal year end
to December 31 tax year end (137,842) 31,950 31,986
Related party expenses not currently deductible for
tax purposes - 60,556 -
Related party expenses paid in current year but
expensed for financial reporting purposes in
prior year (60,556) - (114,572)
Amortization of acquisition fees and expenses
for tax purposes in excess of amortization
for financial reporting purposes (13,964) (13,703) (8,383)
Provision for valuation of investment in Local
Limited Partnership not deductible for
tax purposes 174,739 - 590,197
Cash distribution included in loss for financial
reporting purposes (32,662) (32,427) -
------------- ------------- -------------
Net Loss per tax return $ (4,509,866) $ (4,779,626) $ (6,889,812)
============== ============= =============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
9. Federal Income Taxes (continued)
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax reporting purposes for the year ended March 31, 2000
are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 18,818,290 $ 14,081,467 $ 4,736,823
============== ============== ============
Other assets $ 2,884,694 $ 12,765,769 $ (9,881,075)
============== ============== =============
Liabilities $ 295,987 $ 201,859 $ 94,128
============== ============== ============
</TABLE>
The differences in assets and liabilities of the Partnership for financial
reporting and tax purposes are primarily attributable to: (i) the cumulative
equity in loss from Local Limited Partnerships for tax reporting purposes is
approximately $5,508,000 greater than for financial reporting purposes,
including approximately $2,567,000 of losses the Partnership has not recognized
relating to eight Local Limited Partnerships whose cumulative equity in losses
exceeded its total investment; (ii) the cumulative amortization of acquisition
fees for tax reporting purposes exceeds financial reporting purposes by
approximately $85,000; (iii) approximately $60,000 of cash distributions
received from Local Limited Partnerships during the quarter ended March 31, 2000
are not included in the Partnership's Investments in Local Limited Partnerships
for tax reporting purposes at December 31, 1999; and (iv) organizational and
offering costs of approximately $9,500,000 that have been capitalized for tax
reporting purposes, are charged to Limited Partners' equity for financial
reporting purposes.
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1999
are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 21,538,791 $ 18,320,798 $ 3,217,993
============= ============== ============
Other assets $ 3,323,609 $ 13,039,165 $ (9,715,556)
============= ============= ============
Liabilities $ 405,479 $ 204,721 $ 200,758
============= ============= ============
</TABLE>
The differences in assets and liabilities of the Partnership for financial
reporting purposes are primarily attributable to: (i) the cumulative equity in
loss from Local Limited Partnerships for tax reporting purposes is approximately
$3,743,000 greater than for financial reporting purposes, including
approximately $1,291,000 of losses the Partnership has not recognized relating
to five Local Limited Partnerships whose cumulative equity in losses exceeded
its total investment; (ii) the cumulative amortization of acquisition fees for
tax reporting purposes exceeds financial reporting purposes by approximately
$64,000; (iii) approximately $50,000 of cash distributions received from Local
Limited Partnerships during the quarter ended March 31, 1999 are not included in
the Partnership's Investments in Local Limited Partnerships for tax reporting
purposes at December 31, 1998; and (iv) organizational and offering costs of
approximately $9,500,000 that have been capitalized for tax reporting purposes,
are charged to Limited Partners' equity for financial reporting purposes.
<PAGE>
June 29, 2000
Boston Financial Qualified Housing Tax Credits L.P. V
101 Arch Street
Boston, MA 02110-1106
To the Partners of
Boston Financial Qualified Housing Tax Credits L.P. V:
We are providing this letter to you for inclusion as an exhibit to your Form
10-K filing pursuant to Item 601 of Regulation S-K.
We have audited the financial statements included in Boston Financial Qualified
Housing Tax Credits L.P. V's (the "Partnership") Annual Report on Form 10-K for
the year ended March 31, 2000 and issued our report thereon dated June 22, 2000.
Note 2 to the financial statements describes a change in reporting entity from a
combined basis presentation to a stand-alone basis presentation. It should be
understood that the preferability of one acceptable method of presenting
entities under common control over another has not been addressed in any
authoritative accounting literature, and in expressing our concurrence below we
have relied on management's determination that this change in reporting entity
is preferable. Based on our reading of management's stated reasons and
justification for this change in reporting entity in the Form 10-K, and our
discussions with management as to their judgment about the relevant business
planning and legal factors relating to the change, we concur with management
that such change represents, in the Partnership's circumstances, the adoption of
a preferable accounting principle in conformity with Accounting Principles Board
Opinion No. 20.
Very truly yours,
/S/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
<PAGE>
Boston Financial Qualified Housing Tax Credits L. P. V
Schedule III - Real Estate and Accumulated Depreciation of Property Owned by
Local Limited Partnerships in which Registrant has invested at March 31, 2000
<TABLE>
<CAPTION>
COST OF INTEREST AT ACQUISITION
DATE
-----------------------------------
NET IMPROVEMENTS
NUMBER TOTAL CAPITALIZED
OF ENCUM- BUILDING AND SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND IMPROVEMENTS ACQUISITION
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C>
Strathern Park/Lorne 241 $17,356,140 $4,369,500 $10,513,639 $10,997,952
Park
Los Angeles, CA
Maidens Choice 101 4,005,020 807,791 2,013,769 3,459,429
Baltimore, MD
Cedar Lane 36 1,100,004 40,000 1,375,512 11,854
London, KY
Silver Creek 24 766,558 20,000 946,812 0
Berea, KY
Rosecliff 168 5,531,104 1,200,000 3,304,950 4,578,797
Orlando, FL
Brookwood 81 2,996,929 91,470 344,580 4,578,953
Ypsilanti Township, MI
Water Oak 40 1,252,979 98,058 1,467,944 5,638
Orange City, FL
Yester Oaks 44 1,283,141 47,105 1,574,145 2,489
Lafayette, GA
Ocean View 42 1,363,339 112,620 1,600,421 28,592
Ferandina Beach, FL
Wheeler House 17 674,021 42,000 1,139,412 (133,840)
Nashua, NH
Archer Village 24 706,791 40,000 861,288 38,869
Archer, FL
Oaks of Dunlop 144 4,413,492 631,959 6,492,444 156,533
Colonial Heights, VA
Timothy House 112 2,039,244 11,638 6,344,664 457,230
Towson, MD
Westover Station 108 2,653,568 305,645 4,299,613 7,924
Newport News, VA
Carib Villas III 24 1,478,494 107,582 1,802,466 5,614
St. Croix, VI
Carib Villas II 20 1,399,088 57,720 1,787,528 5,614
St. Croix, VI
Whispering Trace 40 1,358,987 218,000 2,413,145 (447,564)
Woodstock, GA
New Center 104 2,913,936 79,652 3,534,776 2,934,509
Detroit, MI
Huguenot Park 24 1,400,000 83,000 2,088,664 0
New Paltz, NY
Hillwood Pointe 100 2,888,685 454,185 5,103,711 130,945
Jacksonville, FL
Pinewood Pointe 136 3,911,198 555,093 6,809,808 663,311
Jacksonville, FL
Westgate 60 1,351,284 215,168 2,152,519 24,702
Bismark, ND
Woodlake Hills 144 3,774,677 233,690 6,481,250 2,392,831
Pontiac, MI
Bixel House 76 1,162,940 190,746 2,294,879 51,935
Los Angeles, CA
Harmony 65 2,206,214 0 7,020,696 117,827
North Hollywood, CA
Schumaker Place 96 2,896,834 531,776 1,627,716 3,609,531
Salisbury, MD
Circle Terrace 303 8,573,318 0 7,884,733 8,635,332
Lansdown, MD
------------------------------------------------------------------------------------
TOTAL 2,374 $81,457,985 $10,544,398 $93,281,084 $42,315,007
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1999
----------------------------------------------------------- LIFE ON
WHICH
DEPRECIATION
BUILDING AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION LAND IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
----------- ---- ------------ ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C> <C> <C>
Strathern Park/Lorne $5,889,320 $19,991,771 $25,881,091 $6,666,393 1991 various 07/05/90
Park
Los Angeles, CA
Maidens Choice 807,791 5,473,198 6,280,989 1,896,164 1991 various 08/17/90
Baltimore, MD
Cedar Lane 40,000 1,387,366 1,427,366 368,886 1991 various 09/10/90
London, KY
Silver Creek 20,000 946,812 966,812 257,716 1990 various 08/15/90
Berea, KY
Rosecliff 1,120,000 7,963,747 9,083,747 2,728,299 1991 various 09/18/90
Orlando, FL
Brookwood 522,673 4,492,330 5,015,003 1,277,101 1992 various 10/01/90
Ypsilanti Township, MI
Water Oak 98,058 1,473,582 1,571,640 470,013 1991 various 01/01/91
Orange City, FL
Yester Oaks 47,105 1,576,634 1,623,739 518,600 1991 various 01/01/91
Lafayette, GA
Ocean View 112,620 1,629,013 1,741,633 544,244 1991 various 01/01/91
Ferandina Beach, FL
Wheeler House 42,000 1,005,572 1,047,572 322,159 1991 various 01/01/91
Nashua, NH
Archer Village 40,000 900,157 940,157 302,483 1991 various 01/01/91
Archer, FL
Oaks of Dunlop 631,958 6,648,978 7,280,936 2,496,547 1991 various 01/01/91
Colonial Heights, VA
Timothy House 11,638 6,801,894 6,813,532 1,548,601 1992 various 03/05/91
Towson, MD
Westover Station 305,645 4,307,537 4,613,182 1,113,634 1991 various 03/30/91
Newport News, VA
Carib Villas III 239,009 1,676,653 1,915,662 612,095 1992 various 03/21/91
St. Croix, VI
Carib Villas II 197,195 1,653,667 1,850,862 594,608 1991 various 03/01/91
St. Croix, VI
Whispering Trace 218,000 1,965,581 2,183,581 794,669 1990 various 05/01/91
Woodstock, GA
New Center 96,116 6,452,821 6,548,937 1,870,814 1992 various 06/27/91
Detroit, MI
Huguenot Park 83,000 2,088,664 2,171,664 662,875 1991 various 06/26/91
New Paltz, NY
Hillwood Pointe 454,185 5,234,656 5,688,841 1,750,566 1991 various 07/19/91
Jacksonville, FL
Pinewood Pointe 555,093 7,473,119 8,028,212 2,473,232 1991 various 07/31/91
Jacksonville, FL
Westgate 238,920 2,153,469 2,392,389 664,844 1991 various 07/25/91
Bismark, ND
Woodlake Hills 187,588 8,920,183 9,107,771 2,389,145 1992 various 08/01/91
Pontiac, MI
Bixel House 190,746 2,346,814 2,537,560 1,015,434 1991 various 07/31/91
Los Angeles, CA
Harmony 0 7,138,523 7,138,523 2,303,749 1991 various 07/31/91
North Hollywood, CA
Schumaker Place 1,029,027 4,739,996 5,769,023 1,245,007 1992 various 09/20/91
Salisbury, MD
Circle Terrace 1,104,269 15,415,796 16,520,065 4,074,656 1993 various 12/06/91
Lansdown, MD
-----------------------------------------------------------
TOTAL $14,281,956 $131,858,533 $146,140,489 $40,962,534
===========================================================
</TABLE>
(1) The aggregate cost for Federal Income Tax purposes is approximately
$127,178,000.
* Mortgage notes payable generally represent non-recourse
financing of low-income housing projects payable with
terms of up to 40 years with interest payable at rates
ranging from 8.00% to 11%. The Partnership has not
guaranteed any of these mortgage notes payable.
Summary of property owned and accumulated depreciation:
<TABLE>
<CAPTION>
Property Owned December 31, 1999 Accumulated Depreciation December 31,
1999
------------------------------------------------------------------ ---------------------------------------
<S> <C> <C>
Balance at beginning of period $145,851,429 Balance at beginning of 36,683,600
period
Additions during period: Additions during period:
Other acquisitions 46,195
Improvements etc. 242,865 Depreciation 4,278,934
---------------- ------------
289,060 Balance at close of period $40,962,534
============
Deductions during period:
Cost of real estate sold 0
Impairment of Assets 0
----------------
0
----------------
Balance at close of period $146,140,489
================
Property Owned December 31, 1998 Accumulated Depreciation December 31,
1998
------------------------------------------------------------------ ---------------------------------------
Balance at beginning of period $145,480,348 Balance at beginning of 31,678,791
period
Additions during period: Additions during period:
Other acquisitions 95,346 Depreciation 5,004,809
------------
Improvements etc. 275,735 Balance at close of period $36,683,600
---------------- ============
371,081
Deductions during period:
Cost of real estate sold 0
Impairment of Assets 0
----------------
0
----------------
Balance at close of period $145,851,429
================
Property Owned December 31, 1997 Accumulated Depreciation December 31,
1997
------------------------------------------------------------------ ---------------------------------------
Balance at beginning of period $145,480,438 Balance at beginning of 26,076,146
period
Additions during period: Additions during period:
Other acquisitions 125,851 Depreciation 5,602,645
------------
Improvements etc. 34,059 Balance at close of period $31,678,791
---------------- ============
159,910
Deductions during period:
Cost of real estate sold 0
Impairment of Assets (1) (160,000)
----------------
(160,000)
----------------
Balance at close of period $145,480,348
================
</TABLE>
(1) During the year ended December 31, 1997, Wheeler House recognized an
impairment loss on its rental property in the net amount of $160,000
as a result of applying FASB 121, Accounting for the Impairment of Long
Lived Assets and for Long Lived Assets to be Disposed of.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS V
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 2000
Reports of Independent Auditors
Woodlake Hills
[Letterhead]
[LOGO]
JOHN J. LEHOTAN, C.P.A.
4385 W. Main Street
Brown City, MI 48416
To The Partners of Woodlake Hills
Limited Partnership
Dearborn, Michigan 48124
Independent Auditor's Report
I have audited the accompanying balance sheet of Woodlake Hills Limited
Partnership, a Michigan limited partnership as of December 31, 1999 and the
related statements of profit and loss, partners' equity and cash flow for the
year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted our audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Woodlake Hills Limited Partnership
as of December 31, 1999 and the results of its operations and its cash flow for
the year then ended in conformity with generally accepted accounting principles.
/s/John J. Lehotan
Certified Public Accountant
February 1, 2000
<PAGE>
Woodlake Hills
[Letterhead]
[LOGO]
JOHN J. LEHOTAN, C.P.A.
4385 W. Main Street
Brown City, MI 48416
To The Partners of Woodlake Hills
Limited Partnership
Dearborn, Michigan 48124
Independent Auditor's Report
I have audited the accompanying balance sheet of Woodlake Hills Limited
Partnership, a Michigan limited partnership as of December 31, 1998 and the
related statements of profit and loss, partners' equity and cash flow for the
year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted our audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Woodlake Hills Limited Partnership
as of December 31, 1998 and the results of its operations and its cash flow for
the year then ended in conformity with generally accepted accounting principles.
/s/John J. Lehotan
Certified Public Accountant
February 10, 1999
<PAGE>
Woodlake Hills
[Letterhead]
[LOGO]
JOHN J. LEHOTAN, C.P.A.
4385 W. Main Street
Brown City, MI 48416
To The Partners of Woodlake Hills
Limited Partnership
Detroit, Michigan
Independent Auditor's Report
I have audited the accompanying balance sheet of Woodlake Hills Limited
Partnership, a Michigan limited partnership as of December 31, 1997 and the
related statements of profit and loss, partners' equity and cash flow for the
year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted our audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Woodlake Hills Limited Partnership
as of December 31, 1997 and the results of its operations and its cash flow for
the year then ended in conformity with generally accepted accounting principles.
/s/John J. Lehotan
Certified Public Accountant, C.P.A.
February 5, 1998
<PAGE>
Strathern Park
[Letterhead]
[LOGO]
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
9454 Wilshire Boulevard, Suite 405
Beverly Hills, California 90212-2907
Independent Auditors' Report
The Partners
Strathern Park
Los Angeles, California
We have audited the accompanying balance sheet of Strathern Park (a California
limited partnership), as of December 31, 1999 and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
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 Strathern Park as of December
31, 1999, 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 financial
statements taken as a whole. The additional information on Schedules I, II and
III 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 financial statements taken as a whole.
/s/Nanas, Stern, Biers, Neinstein and Co., LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
January 26, 2000
<PAGE>
Strathern Park
[Letterhead]
[LOGO]
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
9454 Wilshire Boulevard, Suite 405
Beverly Hills, California 90212-2907
Independent Auditors' Report
The Partners
Strathern Park
Los Angeles, California
We have audited the accompanying balance sheet of Strathern Park (a California
limited partnership), 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 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 Strathern Park 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 financial
statements taken as a whole. The additional information on Schedules I, II and
III 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 financial statements taken as a whole.
/s/Nanas, Stern, Biers, Neinstein and Co., LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
February 3, 1999
<PAGE>
Strathern Park
[LOGO]
NANAS, STERN, BIERS, NEINSTEIN AND CO.LLP 9454 Wilshire Boulevard Beverly Hills,
California 90212-2907
Independent Auditors' Report
The Partners
Strathern Park
Los Angeles, California
We have audited the accompanying balance sheet of Strathern Park (a California
limited partnership), as of December 31, 1997 and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
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 Strathern Park as of December
31, 1997, 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 financial
statements taken as a whole. The additional information on Schedules I, II and
III 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 financial statements taken as a whole.
/s/Nanas, Stern, Biers, Neinstein and Co., LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO.
January 28, 1998
<PAGE>
Maiden Choice Limited Partnership
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Maiden Choice Limited Partnership
We have audited the accompanying balance sheet of Maiden Choice Limited
Partnership as of December 31, 1999, and the related statements of operations,
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.
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 Maiden Choice Limited
Partnership as of December 31, 1999, and the results of its operations, the
changes in partners' equity (deficit) 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 supplemental information on pages 21 through 30
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 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 8,
2000, on our consideration of Maiden Choice Limited Partnership's internal
control and on its compliance with specific requirements applicable to
DHCD-assisted programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
January 8, 2000
<PAGE>
Maiden Choice Limited Partnership
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Maiden Choice Limited Partnership
We have audited the accompanying balance sheet of Maiden Choice Limited
Partnership as of December 31, 1998, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Maiden Choice Limited
Partnership as of December 31, 1998, and the results of its operations, the
changes in partners' equity 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 supplemental information on pages 22 through 27
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 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 6,
1999, on our consideration of Maiden Choice Limited Partnership's internal
control and on its compliance with specific requirements applicable to
DHCD-assisted programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
January 6, 1999
<PAGE>
Maiden Choice Limited Partnership
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Maiden Choice Limited Partnership
We have audited the accompanying balance sheet of Maiden Choice Limited
Partnership as of December 31, 1997, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Maiden Choice Limited
Partnership as of December 31, 1997, and the results of its operations, changes
in partners' equity 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 supplemental information on pages 21 through 33
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, 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.
<PAGE>
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued reports dated January 6,
1998, on our consideration of Maiden Choice Limited Partnership's internal
control and on its compliance with specific requirements applicable to CDA
programs, fair housing and non-discrimination, and laws and regulations
applicable to the financial statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
January 6, 1998
<PAGE>
Cedar Lane I, Ltd.
[Letterhead]
[LOGO]
Miller, Mayer, Sullivan & Stevens LLP
INDEPENDENT AUDITORS' REPORT
To the Partners Rural Development
Cedar Lane I, Ltd. London, Kentucky
We have audited the accompanying balance sheets of Cedar Lane I, Ltd., (a
limited partnership) Case No. 20-063-621358072, 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 the standards for 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 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 Cedar Lane I, Ltd. 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 our report
dated January 27, 2000 on our consideration of Cedar Lane I, Lts.'s internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts and grants.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report 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 presented fairly, in all material respects, in relation
to the basic financial statements taken as a whole.
/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
January 27, 2000
<PAGE>
Cedar Lane I, Ltd.
[Letterhead]
[LOGO]
Miller, Mayer, Sullivan & Stevens LLP
INDEPENDENT AUDITORS' REPORT
To the Partners Rural Development
Cedar Lane I, Ltd. London, Kentucky
We have audited the accompanying balance sheets of Cedar Lane I, Ltd., (a
limited partnership) Case No. 20-063-621358072, as of December 31, 1998 and 1997
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 the standards for 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 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 Cedar Lane I, Ltd. 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 February 11, 1999 on our consideration of Cedar Lane I, Lts.'s internal
control over financial reporting and our tests of its compliance with certain
provisions of laws, regulations, contracts and grants.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report 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 presented fairly, in all material respects, in relation
to the basic financial statements taken as a whole.
/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
February 11, 1999
<PAGE>
Silver Creek II, Ltd.
[Letterhead]
[LOGO]
Miller, Mayer, Sullivan & Stevens LLP
INDEPENDENT AUDITORS' REPORT
To the Partners
Silver Creek II, Ltd.
We have audited the accompanying balance sheets of Silver Creek II, Ltd., (a
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. 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 Creek II, Ltd. 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 was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report 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 presented fairly in all material respects, in relation to
the basic financial statements taken as a whole.
/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
January 27, 2000
<PAGE>
Silver Creek II, Ltd.
[Letterhead]
[LOGO]
Miller, Mayer, Sullivan & Stevens LLP
INDEPENDENT AUDITORS' REPORT
To the Partners
Silver Creek II, Ltd.
We have audited the accompanying balance sheets of Silver Creek II, Ltd., (a
limited partnership), as of December 31, 1998 and 1997, 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. 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 Creek II, Ltd. 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 was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report 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 presented fairly in all material respects, in relation to
the basic financial statements taken as a whole.
/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
January 2, 1999
<PAGE>
Tomkins/Rosecliff, Ltd.:
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Suite 1800
200 South Orange Avenue
Orlando, Florida 32801
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Tomkins/Rosecliff, Ltd.:
We have audited the accompanying balance sheet of Tomkins/Rosecliff, Ltd. (a
Florida Limited Partnership) as of December 31, 1999, and the related statements
of operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
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 Tomkins/Rosecliff, Ltd. (a
Florida Limited Partnership) as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/Deloitte & Touche LLP
January 21, 2000
<PAGE>
Tomkins/Rosecliff, Ltd.:
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Suite 1800
200 South Orange Avenue
Orlando, Florida 32801
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Tomkins/Rosecliff, Ltd.:
We have audited the accompanying balance sheet of Tomkins/Rosecliff, Ltd. (a
Florida Limited Partnership) 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 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 Tomkins/Rosecliff, Ltd. (a
Florida Limited Partnership) as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/Deloitte & Touche LLP
January 29, 1999
<PAGE>
Tomkins/Rosecliff, Ltd.:
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Suite 1800
200 South Orange Avenue
Orlando, Florida 32801
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Tomkins/Rosecliff, Ltd.:
We have audited the accompanying balance sheet of Tomkins/Rosecliff, Ltd. (a
Florida Limited Partnership) as of December 31, 1997, and the related statements
of operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
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 Tomkins/Rosecliff, Ltd. (a
Florida Limited Partnership) as of December 31, 1997, and the results of its
operations and its cash flow for the year then ended in conformity with
generally accepted accounting principles.
/s/Deloitte & Touche LLP
January 24, 1998
<PAGE>
Brookwood L.D.H.A
[Letterhead]
[LOGO]
Follmer, Rudzewicz & Co., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of:
Brookwood L.D.H.A. Limited Partnership
28388 Franklin Road
Southfield, Michigan 48034
We have audited the accompanying balance sheet of Brookwood L.D.H.A. Limited
Partnership (a Michigan limited partnership), MSHDA Development No. 832 as of
December 31, 1999 and the related statement of profit and loss, changes in
accumulated earnings and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Brookwood L.D.H.A. Limited Partnership,
MSHDA No. 832 as of December 31, 1999, and the results of its operations, the
changes in its cumulative income and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Brookwood
L.D.H.A. Limited Partnership, MSHDA No. 832 on pages 13 through 18 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements. This additional information is the responsibility of the
partnership's management. 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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 24, 2000 on our consideration of the partnership's internal
control structure and on its compliance with laws and regulations.
/s/Follmer, Rudzewicz & Co., P.C.
Follmer,Rudzewicz & Co. P.C.
Certified Public Accountants
Southfield, Michigan
38-1910111
<PAGE>
Brookwood L.D.H.A
[Letterhead]
[LOGO]
Follmer, Rudzewicz & Co., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of:
Brookwood L.D.H.A. Limited Partnership
28388 Franklin Road
Southfield, Michigan 48034
We have audited the accompanying balance sheet of Brookwood L.D.H.A. Limited
Partnership (a Michigan limited partnership), MSHDA Development No. 832 as of
December 31, 1998 and the related statement of profit and loss, changes in
accumulated earnings and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Brookwood L.D.H.A. Limited Partnership,
MSHDA No. 832 as of December 31, 1998, and the results of its operations, the
changes in its cumulative income and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Brookwood
L.D.H.A. Limited Partnership, MSHDA No. 832 on pages 11 through 14 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements. This additional information is the responsibility of the
partnership's management. 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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1999 on our consideration of the partnership's internal
control structure and on its compliance with laws and regulations.
/s/Follmer, Rudzewicz & Co., P.C.
Follmer,Rudzewicz & Co. P.C.
Certified Public Accountants
Southfield, Michigan
38-1910111
<PAGE>
Brookwood L.D.H.A.
[Letterhead]
[LOGO]
Follmer, Rudzewicz & Co., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of:
Brookwood L.D.H.A. Limited Partnership
28388 Franklin Road
Southfield, Michigan 48034
We have audited the accompanying Balance sheet of Brookwood L.D.H.A. Limited
Partnership (a Michigan limited partnership), MSHDA Development No. 832 as of
December 31, 1997 and the related Statement of Profit and Loss, changes in in
accumulated earnings and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Brookwood L.D.H.A. Limited Partnership,
MSHDA No. 832 as of December 31, 1997, and the results of its operations, the
changes in its cumulative income and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Brookwood
L.D.H.A. Limited Partnership, MSHDA No. 832 on pages 11 through 14 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements. This additional information is the responsibility of the
partnership's management. 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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1998 on our consideration of the partnership's internal
control structure and a report dated January 22, 1998 on its compliance with
laws and regulations.
/s/Follmer, Rudzewicz & Co., P.C.
Follmer,Rudzewicz & Co. P.C.
Certified Public Accountants
Southfield, Michigan
38-1910111
<PAGE>
Burbank Limited Partnership I
[Letterhead]
Otis, Atwell & Timberlake
Professional Association
The Partners
Burbank Limited Partnership I
We have audited the accompanying balance sheet of Burbank Limited
Partnership I as of December 31, 1999 and 1998, and the related statements of
income, 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. 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 statements 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 Burbank Limited
Partnership
I as of December 31, 1999 and 1998, and the results of its operations, changes
in partners' equity (deficit) and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership's first mortgage note has matured and has
not yet been refinanced, which raises substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/Otis, Atwell & Timberlake, P.A.
Certified Public Accountants
January 19, 2000
Portland, Maine
<PAGE>
Burbank Limited Partnership I
[Letterhead]
BILLIE J. BURNETT,CPA
5 Benton Drive
Nashua, NH 03060
(603) 883-4230
To The Partners
Burbank Limited Partnership I
I have audited the accompanying balance sheets of Burbank Limited
Partnership I as of December 31, 1997, and the related statements of income,
partners' equity and cash flows for the year then ended. The financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Burbank Limited Partnership
I as of December 31, 1997, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/Billie J. Burnett
Billie J. Burnett
January 8, 1998
<PAGE>
Virginia Housing Development Authority
[Letterhead]
[LOGO]
Wall Einhorn & Chernitzer., P.C.
Certified Public Accountants
First Virginia Bank Tower
555 Main Street
Suite 1500
Post Office Box 3610
Norfolk, Virginia 23514
Alvin A. Wall, CPA Telephone (757)625-4700
Martin A. Einhorn, CPA, CVA Telephone (757)625-0527
Jeffrey S. Chernitzer, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners Virginia Housing Development Authority
The Oaks of Dunlop Farms, L. P. 601 South Belvidere Street
(A Limited Partnership) Richmond, Virginia 23220
Norfolk, Virginia
We have audited the accompanying balance sheets of The Oaks of Dunlop Farms,
L.P. (A Limited Partnership), VHDA Project Number 90-0300-C, 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 project'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 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 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 VHDA Project Number 90-0300-C
as of December 31, 1999 and 1998, and the results of its operations, changes in
partners' equity, and cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying supplementary information (shown on pages 10 to 17) 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.
/s/Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
January 26, 2000
<PAGE>
Virginia Housing Development Authority
[Letterhead]
[LOGO]
Wall Einhorn & Chernitzer., P.C.
Certified Public Accountants
First Virginia Bank Tower
555 Main Street
Suite 1500
Post Office Box 3610
Norfolk, Virginia 23514
Alvin A. Wall, CPA Telephone (757)625-4700
Martin A. Einhorn, CPA, CVA Telephone (757)625-0527
Jeffrey S. Chernitzer, CPA
INDEPENDENT AUDITORS' REPORT
To the Partners Virginia Housing Development Authority
The Oaks of Dunlop Farms, L. P. 601 South Belvidere Street
(A Limited Partnership) Richmond, Virginia 23220
Norfolk, Virginia
We have audited the accompanying balance sheets of The Oaks of Dunlop Farms,
L.P. (A Limited Partnership), VHDA Project Number 90-0300-C, 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 project'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 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 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 VHDA Project Number 90-0300-C
as of December 31, 1998 and 1997, and the results of its operations, changes in
partners' equity, and cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying supplementary information (shown on pages 10 to 17) 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.
/s/Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
February 1, 1999
<PAGE>
Timothy House Limited Partnership
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Timothy House Limited Partnership
We have audited the accompanying balance sheet of Timothy House Limited
Partnership as of December 31, 1999 and the related statements of operations,
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.
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 Timothy House Limited
Partnership as of December 31, 1999, and the results of its operations, the
changes in partners' equity (deficit) 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 supplemental information on pages 21 through 30
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 18,
2000, on our consideration of Timothy House Limited Partnership's internal
control structure and on its compliance with requirements applicable to
DHCD-assisted programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 18, 2000 Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
<PAGE>
Timothy House Limited Partnership
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Timothy House Limited Partnership
We have audited the accompanying balance sheet of Timothy House Limited
Partnership as of December 31, 1998 and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Timothy House Limited
Partnership as of December 31, 1998, and the results of its operations, the
changes in partners' equity 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 supplemental information on pages 22 through 27
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 13,
1999, on our consideration of Timothy House Limited Partnership's internal
control structure and on its compliance with requirements applicable to
DHCD-assisted programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 13, 1999 Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
<PAGE>
Timothy House Limited Partnership
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Timothy House Limited Partnership
We have audited the accompanying balance sheet of Timothy House Limited
Partnership as of December 31, 1997 and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Timothy House Limited
Partnership as of December 31, 1997, and the results of its operations, changes
in partners' equity 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 supplemental information on pages 21 through 33
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, 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.
<PAGE>
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued reports dated January 10,
1998, on our consideration of Timothy House Limited Partnership's internal
control structure and on its compliance with requirements applicable to CDA
programs, fair housing, and laws and regulations applicable to the financial
statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 10, 1998 Identification Number:
52-1088612
Audit Principal: William T. Riley, Jr.
<PAGE>
Westover Station Associates, L.P.
[Letterhead]
Wilfore & Wynn
A Professional Corporation
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
The Partners Virginia Housing Development
Westover Station Associates, L.P. Authority
(A Limited Partnership) 601 South Belvidere Street
Newport News, Virginia Richmond, Virginia 23220
We have audited the accompanying balance sheets of Westover Station Associates,
L.P., VHDA Project Number 90-0303-C, 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 audits.
We conducted our audits in accordance with generally accepted auditing standards
and the Virginia Housing Development Authority's Mortgagor/Grantee's Audit
Guide.
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 Westover Station Associates,
L.P. at 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 audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules included in
the report are presented for purposes of additional analysis and are not a
required part of the basic financial statements of Westover Station Associates,
L.P. Such information has been subjected to the auditing procedures applied in
the audit of the basis financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/Wilfore & Wynn
Wilfore & Wynn
Virginia Beach, Virginia
February 9, 2000
4530 Professional Circle Virginia Beach, Virginia 23455-6498
Telephone (757)456-0111 Fax (757)473-1095
<PAGE>
Westover Station Associates, L.P.
[Letterhead]
Wilfore & Wynn
A Professional Corporation
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
The Partners Virginia Housing Development
Westover Station Associates, L.P. Authority
(A Limited Partnership) 601 South Belvidere Street
Newport News, Virginia Richmond, Virginia 23220
We have audited the accompanying balance sheets of Westover Station Associates,
L.P., VHDA Project Number 90-0303-C, as of December 31, 1998 and 1997 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 audits.
We conducted our audits in accordance with generally accepted auditing standards
and the Virginia Housing Development Authority's Mortgagor/Grantee's Audit
Guide.
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 Westover Station Associates,
L.P. at 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 audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules included in
the report are presented for purposes of additional analysis and are not a
required part of the basic financial statements of Westover Station Associates,
L.P. Such information has been subjected to the auditing procedures applied in
the audit of the basis financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/Wilfore & Wynn
Wilfore & Wynn
Virginia Beach, Virginia
February 3, 1999
4530 Professional Circle Virginia Beach, Virginia 23455-6498
Telephone (757)456-0111 Fax (757)473-1095
<PAGE>
Christiansted Limited Dividend Housing
[Letterhead]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
26913 Northwestern Hwy. Suite 510
Southfield, Michigan 48034-8444
Telephone: (248) 356-3880
Facsimile: (248) 356-3885
Independent Auditors' Report
January 18, 2000
Partners
Christiansted Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Christiansted Limited Dividend
Housing Association Limited Partnership 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. 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 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 Christiansted Limited Dividend
Housing Association 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.
/s/Kirshner Huton Perlin, P.C.
<PAGE>
Christiansted Limited Dividend Housing
[Letterhead]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
26913 Northwestern Hwy. Suite 510
Southfield, Michigan 48034-8444
Telephone: (248) 356-3880
Facsimile: (248) 356-3885
Independent Auditors' Report
January 23, 1999
Partners
Christiansted Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Christiansted Limited Dividend
Housing Association 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 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 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 Christiansted Limited Dividend
Housing Association 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.
/s/Kirshner Huton Perlin, P.C.
<PAGE>
St. Croix II. Limited Partnership
[Letterhead]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
26913 Northwestern Hwy. Suite 510
Southfield, Michigan 48034-8444
Telephone: (248) 356-3880
Facsimile: (248) 356-3885
Independent Auditors' Report
January 17, 2000
Partners
St. Croix II. Limited Partnership
We have audited the accompanying balance sheet of St. Croix II, Limited
Partnership 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. 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 St. Croix II, 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.
/s/Kirshner Huton Perlin, P.C.
<PAGE>
St. Croix II. Limited Partnership
[Letterhead]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
26913 Northwestern Hwy. Suite 510
Southfield, Michigan 48034-8444
Telephone: (248) 356-3880
Facsimile: (248) 356-3885
Independent Auditors' Report
January 20, 1999
Partners
St. Croix II. Limited Partnership
We have audited the accompanying balance sheet of St. Croix II, Limited
Partnership 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. 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 St. Croix II, 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.
/s/Kirshner Huton Perlin, P.C.
<PAGE>
Kensignton Place Townhomes,
Letterhead]
[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
Independent Auditors' Report
The Partners
Kensignton Place Townhomes,
A Limited Partnership:
We have audited the accompanying balance sheets of Kensignton Place Townhomes, A
Limited Partnership as of December 31, 1999 and 1998, and the related statements
of loss, 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 Kensignton Place Townhomes, A
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.
/s/ KPMG Peat Marwick LLP
February 25, 2000
<PAGE>
Kensignton Place Townhomes,
Letterhead]
[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
Independent Auditors' Report
The Partners
Kensignton Place Townhomes,
A Limited Partnership:
We have audited the accompanying balance sheets of Kensignton Place Townhomes, A
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of loss, 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 Kensignton Place Townhomes, A
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.
/s/ KPMG Peat Marwick LLP
February 26, 1999
<PAGE>
Cobblestone Place Townhomes,
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
Independent Auditors' Report
The Partners
Cobblestone Place Townhomes,
A Limited Partnership:
We have audited the accompanying balance sheets of Cobblestone Place Townhomes,
A Limited Partnership as of December 31, 1999 and 1998, and the related
statements of loss, 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 Cobblestone Place Townhomes, A
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.
/s/ KPMG Peat Marwick LLP
February 25, 2000
<PAGE>
Cobblestone Place Townhomes,
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
Independent Auditors' Report
The Partners
Cobblestone Place Townhomes,
A Limited Partnership:
We have audited the accompanying balance sheets of Cobblestone Place Townhomes,
A Limited Partnership as of December 31, 1998 and 1997, and the related
statements of loss, 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 Cobblestone Place Townhomes, A
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.
/s/ KPMG Peat Marwick LLP
February 26, 1999
<PAGE>
Whispering Trace Apartments
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
Independent Auditors' Report
The Partners
Whispering Trace Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Whispering Trace Apartments,
A Limited Partnership as of December 31, 1999 and 1998, and the related
statements of loss, partners' capital (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. 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 statements 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 Whispering Trace Apartments, A
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.
/s/ KPMG Peat Marwick LLP
February 25, 2000
<PAGE>
Whispering Trace Apartments
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA 30308
Independent Auditors' Report
The Partners
Whispering Trace Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Whispering Trace Apartments,
A Limited Partnership as of December 31, 1998 and 1997, and the related
statements of loss, partners' capital (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. 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 statements 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 Whispering Trace Apartments, A
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.
/s/ KPMG Peat Marwick LLP
February 26, 1999
<PAGE>
Huguenot Park Associates, L.P.
[letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS REPORT
To the Partners
Huguenot Park Associates, L.P.
We have audited the accompanying balance sheet of Huguenot Park Associates, L.P.
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 audit.
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 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 Huguenot Park Associates, L.P.
as of December 31, 1999 and 1998, and the results of its operations, the changes
in partners' capital and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
February 7, 2000
<PAGE>
Huguenot Park Associates, L.P.
[letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS REPORT
To the Partners
Huguenot Park Associates, L.P.
We have audited the accompanying balance sheet of Huguenot Park Associates, L.P.
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 audit.
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 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 Huguenot Park Associates, L.P.
as of December 31, 1999 and 1998, and the results of its operations, the changes
in partners' capital and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 20, 2000
<PAGE>
Huguenot Park Associates, L.P.
[letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS REPORT
To the Partners
Huguenot Park Associates, L.P.
We have audited the accompanying balance sheet of Huguenot Park Associates, L.P.
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 audit.
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 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 Huguenot Park Associates, L.P.
as of December 31, 1998 and 1997, and the results of its operations, the changes
in partners' capital and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 20, 1999
<PAGE>
Westgate Apartments Limited Partnesrhip
[Letterhead]
[LOGO]
EideBailly LLP
Consultants, Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
The Partners
Westgate Apartments Limited Partnesrhip
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Westgate Apartments 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 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 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 Westgate Apartments 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.
/s/EideBailly LLP
Fargo, North Dakota
January 21, 2000
<PAGE>
Westgate Apartments Limited Partnesrhip
[Letterhead]
[LOGO]
EideBailly LLP
Consultants, Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
The Partners
Westgate Apartments Limited Partnesrhip
Wahpeton, North Dakota
We have audited the accompanying balance sheets of Westgate Apartments 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 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 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 Westgate Apartments 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.
/s/EideBailly LLP
Fargo, North Dakota
January 22, 1999, except for Note 10,
as to which the date is January 25, 1999
<PAGE>
Bixel House
[Letterhead]
SUAREZ ACCOUNTANCY CORPORATION
150 W. Seventh Street Suite 100
San Pedro, CA 90731 Richard Suarez, Jr., CPA
Telephone (310) 832-7887
Fax (310) 832-6563
Independent Auditor's Report
To The Partners of
Bixel House
Los Angeles, California
I have audited the accompanying balance sheet of Bixel House as of
December 31, 1999, and the related statements of operations, changes in
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bixel House at December 31,
1999, and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
/s/Suarez Accountancy Corporation
San Pedro, California
February 8, 2000
<PAGE>
Bixel House
[Letterhead]
SUAREZ ACCOUNTANCY CORPORATION
150 W. Seventh Street Suite 100
San Pedro, CA 90731 Richard Suarez, Jr., CPA
Telephone (310) 832-7887
Fax (310) 832-6563
Independent Auditor's Report
To The Partners of
Bixel House
Los Angeles, California
I have audited the accompanying balance sheet of Bixel House as of
December 31, 1998, and the related statements of operations, changes in
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bixel House at December 31,
1998, and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
/s/Suarez Accountancy Corporation
San Pedro, California
February 28, 1999
<PAGE>
Bixel House
[Letterhead]
SUAREZ ACCOUNTANCY CORPORATION
150 W. Seventh Street Suite 100
San Pedro, CA 90731 Richard Suarez, Jr., CPA
Telephone (310) 832-7887
Fax (310) 832-6563
Independent Auditor's Report
To The Partners of
Bixel House
Los Angeles, California
I have audited the accompanying balance sheet of Bixel House as of
December 31, 1997, and the related statements of operations, changes in
partners' capital, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bixel House at December 31,
1997, and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.
/s/Suarez Accountancy Corporation
San Pedro, California
January 15, 1998
<PAGE>
Harmony Apartments
[Letterhead]
SUAREZ ACCOUNTANCY CORPORATION
150 W. Seventh Street Suite 100
San Pedro, CA 900731 Richard Suarez
Telephone (310) 832-7887
Fax (310) 832-6563
Independent Auditor's Report
To The Partners of
Harmony Apartments
Los Angeles, California
I have audited the accompanying balance sheet of Harmony Apartments as of
December 31, 1999, and the related statements of operations, changes in
partners' capital, and cash flows for the year ended December 31, 1999. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statements presentation.
I believe that my audit provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Harmony Apartments at
December 31, 1999, and the results of its operations and cash flows for the year
ended December 31, 1999 in conformity with generally accepted accounting
principles.
/s/Suarez Accountancy Corporation
San Pedro, California
February 8, 2000
<PAGE>
Harmony Apartments
[Letterhead]
SUAREZ ACCOUNTANCY CORPORATION
150 W. Seventh Street Suite 100
San Pedro, CA 900731 Richard Suarez
Telephone (310) 832-7887
Fax (310) 832-6563
Independent Auditor's Report
To The Partners of
Harmony Apartments
Los Angeles, California
I have audited the accompanying balance sheet of Harmony Apartments as of
December 31, 1998, and the related statements of operations, changes in
partners' capital, and cash flows for the year ended December 31, 1998. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statements presentation.
I believe that my audit provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Harmony Apartments at
December 31, 1998, and the results of its operations and cash flows for the year
ended December 31, 1998 in conformity with generally accepted accounting
principles.
/s/Suarez Accountancy Corporation
San Pedro, California
February 28, 1999
<PAGE>
Harmony Apartments
[Letterhead]
SUAREZ ACCOUNTANCY CORPORATION
150 W. Seventh Street Suite 100
San Pedro, CA 900731 Richard Suarez
Telephone (310) 832-7887
Fax (310) 832-6563
Independent Auditor's Report
To The Partners of
Harmony Apartments
Los Angeles, California
I have audited the accompanying balance sheet of Harmony Apartments as of
December 31, 1997, and the related statements of operations, changes in
partners' capital, and cash flows for the year ended December 31, 1997. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 statements presentation.
I believe that my audit provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Harmony Apartments at
December 31, 1997, and the results of its operations and cash flows for the year
ended December 31, 1997 in conformity with generally accepted accounting
principles.
/s/Suarez Accountancy Corporation
San Pedro, California
February 11, 1998
<PAGE>
Schumaker Place Associates, L.P.
[Letterhead]
[LOGO]
Halbert, Katz & Co., P.C.
121 South Broad Street
Philadelphia, Pennsylvania 19107
INDEPENDENT AUDITORS' REPORT
To the Partners
Schumaker Place Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of Schumaker Place Associates,
L.P., as of December 31, 1999 and December 31, 1998, and the related statements
of loss, partners' capital (capital deficiency) 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 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 Schumaker Place Associates,
L.P., as of December 31, 1999 and December 31, 1998, and the results of its
operations, changes in partners' capital (capital deficiency) and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
Our audit were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on page 12) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Schumaker Place Associates, L.P. 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.
/s/Halbert Katz & Co., P.C.
January 31, 2000
<PAGE>
Schumaker Place Associates, L.P.
[Letterhead]
[LOGO]
Halbert, Katz & Co., P.C.
121 South Broad Street
Philadelphia, Pennsylvania 19107
INDEPENDENT AUDITORS' REPORT
To the Partners
Schumaker Place Associates, L.P.
Wilmington, Delaware
We have audited the accompanying balance sheets of Schumaker Place Associates,
L.P., as of December 31, 1998 and December 31, 1997, and the related statements
of loss, partners' capital (capital deficiency) 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 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 Schumaker Place Associates,
L.P., as of December 31, 1998 and December 31, 1997, and the results of its
operations, changes in partners' capital (capital deficiency) and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
Our audit were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on page 12) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of
Schumaker Place Associates, L.P. 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.
/s/Halbert Katz & Co., P.C.
January 29, 1999
<PAGE>
Circle Terrace Associates
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Circle Terrace Associates
Limited Partnership
We have audited the accompanying balance sheet of Circle Terrace Associates
Limited Partnership as of December 31, 1999, and the related statements of
operations, 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.
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 Circle Terrace Associates
Limited Partnership as of December 31, 1999, and the results of its operations,
the changes in partners' equity (deficit) and 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 supplemental information on pages 27 through 37
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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated March 24,
2000 on our consideration of Circle Terrace Associates Limited Partnership's
internal control and on its compliance with specific requirements applicable to
Major HUD and fair housing and non-discrimination.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
March 24, 2000 Identification Number:
52-1088612
Lead Auditor: Robert J. Denmark
<PAGE>
Circle Terrace Associates
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Circle Terrace Associates
Limited Partnership
We have audited the accompanying balance sheet of Circle Terrace Associates
Limited Partnership as of December 31, 1998, and the related statements of
operations, 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.
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 Circle Terrace Associates
Limited Partnership as of December 31, 1998, and the results of its operations,
the changes in partners' equity (deficit) and cash flows for the year then
ended, in conformity with generally accepted accounting principles.
The Housing Assistance Payment contracts covering all 303 units expired on
November 30, 1998 and November 30, 1997. It is uncertain whether HUD will renew
these contracts under terms that are consistent with the successful operations
of the project (see note G).
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 28 through 37
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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 20,
1999 on our consideration of Circle Terrace Associates Limited Partnership's
internal control and on its compliance with specific requirements applicable to
Major HUD and DHCD-assisted programs, fair housing and non-discrimination, and
laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland Federal Employer
January 20, 1999 Identification Number:
52-1088612
Audit Principal: Lester Kanis
<PAGE>
Circle Terrace Associates
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Circle Terrace Associates
Limited Partnership
We have audited the accompanying balance sheet of Circle Terrace Associates
Limited Partnership as of December 31, 1997, and the related statements of
profit and loss (on HUD Form No. 92410), partners' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Circle TerraceAssociates
Limited Partnership as of December 31, 1997, and the results of its operations,
the changes in partners' equity and 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 supplemental information on pages 25 through 37
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information, except for that portion marked
"unaudited," on which we express no opinion, 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 21,
1998, on our consideration of Circle Terrace Associates Limited Partnership's
internal control and on its compliance with specific requirements applicable to
Major HUD and CDA programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Baltimore, Maryland Federal Employer
January 21, 1998 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
Water Oaks
[Letterhead]
[LOGO]
Habif, Arogeti& Wynne, LLP
INDEPENDENT AUDITORS REPORT
To the Partners
Water Oaks Apartments, L.P.
We have audited the accompanying balance sheet of WATER OAKS APARTMENTS, L.P.,
RHS Project No. 09-64-581801555 as of December 31, 1999 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 audit. The financial statements of WATER OAK
APARTMENTS, L.P. as of December 31, 1998 were audited by other auditors whose
report dated January 28, 1999 expressed and unqualified opinion on those
statements.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the U.S. Department of Agriculture, Farmers Home
Administration's 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 accordance with Government Auditing Standards, we have also issued reports
dated January 21, 2000 on our consideration of WATER OAK APARTMENTS, L.P.'s
internal control and on its compliance with laws and regulations applicable to
the financial statements.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WATER OAKS APARTMENTS, L.P., as
of December 31, 1999, and the results of its operations and its cash flows for
the year 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 13
through 22 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.
/s/Habif, Arogeti&Wynne, LLP
Atlanta, Georgia
January 21, 2000
<PAGE>
Water Oaks
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS REPORT
To the Partners
Water Oaks Apartments, L.P.
We have audited the accompanying balance sheets of Water Oaks Apartments, L.P.,
RHS Project No. 09-64-581801555 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 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 Water Oaks Apartments, L.P.,
RHS Project No. 09-64-581801555 as of December 31, 1998 and 1997, and the
results of its operations, the changes in partners' equity (deficit), 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 pages 16
through 22 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.
In accordance with Government Auditing Standards, we have also issued reports
dated January 28, 1999, on our consideration of Water Oak Apartments, L.P.'s
internal control and on its compliance with laws and regulations applicable to
the financial statements.
/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 1999
<PAGE>
Archer Village
[Letterhead]
[LOGO]
Habif, Arogeti&Wynne, LLP
INDEPENDENT AUDITORS' REPORT
To the Partners
Archer Village, Ltd.
We have audited the accompanying balance sheet of ARCHER VILLAGE, LTD.,
RHS Project No.: 09-001-267869575, as of December 31, 1999, and the related
statements of operations, changes in partners' accumulated deficit, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits. The financial statements of
ARCHER VILLAGE , LTD., as of December 31, 1998 were audited by other auditors
whose report dated January 28, 1999 expressed and unqualified opinion on those
statements.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the U.S. Department of Agriculture, Farmers Home
Administration's 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 financial statements referred to above present fairly, in
all material respects, the financial position of ARCHER VILLAGE, LTD. as of
December 31, 1999 and the results of its operations, its changes in partners'
accumulated deficit 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 January 21, 2000 on our consideration of ARHCER VILLAGE, LTD. internal
control and on its compliance with laws and regulations applicable to the
financial statements.
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 13
through 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 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.
/s/Habif Arogeti&Wynne, LLP
Atlanta, Georgia
January 21, 2000
<PAGE>
Archer Village
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Archer Village, Ltd.
We have audited the accompanying balance sheets of Archer Village, Ltd., RHS
Project No.: 09-001-267869575, 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 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 Archer Village, Ltd., RHS
Project No.: 09-001-267869575 as of December 31, 1998 and 1997, and the results
of its operations, the changes in partners' equity (deficit) 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 pages 16
through 22 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.
In accordance with Government Auditing Standards, we have also issued reports
dated January 28, 1999, on our consideration of Archer Village, Ltd.'s internal
control and its compliance with laws and regulations applicable to the financial
statements.
/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 1999
<PAGE>
Ocean View Apartments
[Letterhead]
[LOGO]
Habif Aroget&Wynne, LLP
INDEPENDENT AUDITORS' REPORT
To the Partners
Ocean View Apartments, L.P.
We have audited the accompanying balance sheet of OCEAN VIEW APARTMENTS, L.P.,
RHS Project No.: 09-45-581801553, as of December 31, 1999 and the related
statements of operations, changes in partners' accumulated deficit, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits. The financial statements of
OCEAN VIEW APARTMENTS, L.P. as of December 31, 1998 were audited by other
auditors whose report dated January 28, 1999 expressed and unqualified opinion
on those statements.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the U.S. Department of Agriculture, Farmers Home
Administration's 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 accordance with Government Auditing Standards, we have also issued reports
dated January 21, 2000 on our consideration of OCEAN VIEW APARTMENTS, L.P's
internal control and on its compliance with laws and regulations applicable to
the financial statements.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OCEAN VIEW APARTMENTS, L.P., as
of December 31, 1999 and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the year 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 11
through 15 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 financial statements taken as a whole.
/s/Habif Arogeti&Wynne, LLP
Atlanta, Georgia
January 21, 2000
<PAGE>
Ocean View Apartments
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Ocean View Apartments, L.P.
We have audited the accompanying balance sheets of Ocean View Apartments, L.P.,
RHS Project No.: 09-45-581801553, as of December 31, 1998 and 1997, 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 Ocean View Apartments, L.P.,
RHS Project No.: 09-45-581801553, 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
through 22 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 financial statements taken as a whole.
In accordance with Government Auditing Standards we have also issued reports
dated January 28, 1999 on our consideration of Ocean View Apartments, L.P.'s
internal control structure and on its compliance with laws and regulations
applicable to the financial statements.
/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 9, 1999
<PAGE>
Yester Oaks
[Letterhead]
[LOGO]
Habif Arogeti&Wynne, LLP
INDEPENDENT AUDITORS' REPORT
To the Partners
Yester Oaks, L.P.
We have audited the accompanying balance sheet of YESTER OAKS, L.P.
RHS Project No.: 11-046-581814319, as of December 31, 1999 and the related
statements of operations, changes in partners' accumulated deficit, and cash
flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. The
financial statements of YESTER OAKS, L.P. as of December 31, 1998 were audited
by other auditors whose report dated January 28, 1999 expressed and
unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the U.S. Department of Agriculture, Farmers Home
Administration's 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 financial statements referred to above present fairly, in
all material respects, the financial position of YESTER OAKS, L.P., as of
December 31, 1999 and the results of its operations, the changes in partners'
equity (deficit) 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 reports
dated January 21, 2000 on our consideration of YESTER OAKS, L.P.'s internal
control and on its compliance with laws and regulations applicable to the
financial statements.
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 12
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 financial statements taken as a whole.
/s/Habif Arogeti&Wynne, LLP
Atlanta, Georgia
January 28, 2000
<PAGE>
Yester Oaks
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
INDEPENDENT AUDITORS' REPORT
To the Partners
Yester Oaks, L.P.
We have audited the accompanying balance sheets of Yester Oaks, L.P.,RHS Project
No.: 11-046-0581814319, as of December 31, 1998 and 1997, 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 Yester Oaks, L.P., RHS Project
No.: 11-046-0581814319 as of December 31, 1998 and 1997, and the results of its
operations, the changes in partners' equity (deficit), 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 pages 16
through 17 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.
In accordance with Government Auditing Standards, we have also issued reports
dated January 28, 1999, on our consideration of Yester Oaks L.P.'s internal
control and on its compliance with laws and regulations applicable to the
financial statements.
/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 1999
<PAGE>
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSH
[letterhead]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
Detroit, Michigan
We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS
LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 1999, and the
related statements of profit and loss, changes in partners' equity and statement
of 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
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 HISTORIC NEW CENTER APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1999, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Haran & Associates Ltd.
Certified Public Accountants
Wilmette, Illinois
Illnois Certificate No. 060-3097692
January 25, 2000
<PAGE>
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSH
[letterhead]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
Detroit, Michigan
We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS
LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 1998, and the
related statements of profit and loss, changes in partners' equity and statement
of 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
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 HISTORIC NEW CENTER APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1998, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Haran & Associates Ltd.
Certified Public Accountants
Wilmette, Illinois
Illnois Certificate No. 060-3097692
February 3, 1999
<PAGE>
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
[letterhead]
Haran & Associates Ltd.
INDEPENDENT AUDITOR'S REPORT
To the Partners
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
Detroit, Michigan
We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1997, and the related statements of
profit and loss, changes in partners' equity and statement of 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
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 HISTORIC NEW CENTER APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Haran & Associates Ltd.
Certified Public Accountants
Wilmette, Illnois
Illnois Certificate No. 060-3097692
January 29, 1998
<PAGE>
STRATHERN PARK
DECEMBER 31, 1998
INDEPENDENT AUDITORS' REPORT
The Partners
Strathern Park
Los Angeles, California
We have audited the accompanying balance sheet of Strathern Park (a California
limited partnership), 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 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 Strathern Park 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 financial
statements taken as a whole. The additional information on Schedules I, II and
III 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 financial statements taken as a whole.
/s/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
February 3, 1999
<PAGE>
STRATHERN PARK
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Cash and cash equivalents (Note 5) $ 89,129
Receivables 24,068
Reserve for replacements (Note 5) 187,249
Tenant security deposits (Note 5) 113,365
Rental property - at cost (Note 2)
Land $ 5,889,320
Buildings 19,042,548
Equipment and furnishings 949,223
-------------------
25,881,091
Less: accumulated depreciation (5,972,453) 19,908,638
-------------------
Other assets
Syndication fee (Net of accumulated amortization
of $130,186) 588,481
-------------------
TOTAL ASSETS $ 20,910,930
===================
Accounts payable and accrued expenses $ 66,386
Tenant security deposits 112,707
Accrued interest payable (Note 2) 4,609,113
Long term debt (Notes 2 and 5) 17,428,457
-------------------
TOTAL LIABILITIES 22,216,663
15,419
(1,321,152)
-------------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 20,910,930
===================
See Accompanying auditors' report.
The notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATHERN PARK
STATEMENT OF PARTNERS' EQUITY
YEAR ENDED DECEMBER 31, 1998
Profit Balance Net Distri- Balance
and Loss January Loss butions December
Percentage 1, 1998 for the year Paid 31, 1998
-------------- -------------- -------------- -------------- --------------
GENERAL PARTNER
Safran Associates Investment
Partnership II, A California
<S> <C> <C> <C> <C> <C>
Limited Partnership 1% $ (72,184) $ (13,008) $ (334) $ (85,526)
CLASS A LIMITED PARTNER
Safran Associates Investment
Partnership II, A California
Limited Partnership 4% (296,841) (52,032) (1,336) (350,209)
INVESTOR LIMITED PARTNER
Boston Financial Qualified
Housing Tax Credits L.P.V., A
Massachusetts Limited
Partnership 95% 382,071 (1,235,763) (31,725) (885,417)
SPECIAL LIMITED PARTNER
S L P 90, Inc. --- --- --- --- ---
-------------- -------------- -------------- --------------
$ 13,046 $ (1,300,803) $ (33,395) $ (1,321,152)
============== ============== ============== ==============
</TABLE>
See Accompanying auditors' report.
The notes are an integral part of these financial statements.
<PAGE>
STRATHERN PARK
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
INCOME
<S> <C> <C> <C>
Gross potential - rents $ 1,574,908
(Vacancies) (28,013)
Interest 8,845
Miscellaneous 45,666
--------------
TOTAL INCOME $ 1,601,406
EXPENSES (Note 4)
Administrative expense 187,108
Management fees 124,605
Utilities 154,049
Operating and maintenance expense 223,717
Taxes and insurance 183,784
Interest expense - Mortgage note payable 567,918
Interest expense - Notes payable 684,115
Depreciation and amortization 776,913
--------------
TOTAL EXPENSES 2,902,209
--------------
NET LOSS $ (1,300,803)
==============
</TABLE>
See Accompanying auditors' report.
The notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
STRATHERN PARK
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1998
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (1,300,803)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation and amortization $ 776,913
(Increase)/Decrease in -
Receivables 3,935
Tenant security deposits 6,977
(Decrease)/Increase in -
Accounts payable and accrued expenses (6,435)
Accrued interest payable 668,898
Security deposits 6,098
Deferred income (5,185)
----------------
Total Adjustments 1,451,201
----------------
Net Cash Provided by Operating Activities 150,398
CASH FLOWS FROM INVESTING ACTIVITIES
Deposits to reserve for replacements (86,489)
Releases from reserve for replacements 38,067
----------------
Net Cash Used in Investing Activities (48,422)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on mortgage (54,502)
Distributions paid (33,395)
----------------
Net Cash Used in Financing Activities (87,897)
----------------
Net Increase in Cash and Cash Equivalents 14,079
Cash and cash equivalents at January 1, 1998 75,050
----------------
Cash and cash equivalents at December 31, 1998 $ 89,129
================
SUPPLEMENTAL DISCLOSURE OF CASH FROM INFORMATION:
Cash paid during the year for interest $ 590,181
================
See Accompanying auditors' report.
The notes are an integral part of these financial statements.
</TABLE>
<PAGE>
STRATHERN PARK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization -
Strathern Park (the partnership) was organized pursuant to a
limited partnership agreement dated March 28, 1989 as amended.
Effective June 1, 1990, the partnership agreement was amended
with the admission of a new limited partner who purchased a
95% limited partnership interest for a total capital
contribution of $5,963,067. On January 1, 1994 Lorne Park was
merged into Strathern Park. The combined partnerships
constructed a 241 unit apartment project (Lorne Park 72 units,
Strathern Park 169 units) located in Sun Valley, California
for tenants whose income is very low to moderate. The project
is regulated under the terms of certain of its loan
agreements. Such agreements contain certain restrictions
concerning rental charges, the number of units rented to
tenants in the very low, low and moderate income levels and
other matters. Those restrictions of rent and income shall
remain in effect for a minimum of 30 years.
Use of Estimates in the Preparation of Financial Statements -
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 disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
Significant Accounting Policies -
Method of Accounting - The partnership books are maintained
and its financial statements and tax returns are prepared on
the accrual basis.
Cash Equivalents - For purposes of the statement of cash
flows, the partnership considers all highly liquid debt
instruments purchased with a maturity date of three months or
less to be cash equivalents.
Rental Property - The partnership records property, equipment
and improvements at the cost of acquisition or construction.
The cost of maintenance and repairs is charged to operations
as incurred; significant renewals and betterments are
capitalized. Depreciation is computed using the straight line
method for financial statement purposes and accelerated
methods for tax purposes. Estimated useful lives for financial
statement purposes are as follows:
Classification Life
--------------------- ---------------
Buildings 27.5 Years
Equipment and furnishings 5-7 Years
Amortization - amortization of syndication costs is computed
using the straight line method over a period of 10 years.
<PAGE>
Strathern Park
Notes to Financial Statements
December 31, 1998
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Income Taxes - The project receives low-income tax credits provided
under Section 42 of the Internal Revenue Code. Also, no provision
for income taxes has been included since the income or loss of the
partnership as well as the tax credits are required to be reported
by the respective partners on their separate income tax returns.
Note 2 LONG TERM DEBT
Mortgage note payable, secured by First Deed of Trust,
requiring monthly payments of $51,913, including interest at
9.41% per annum, maturing
<TABLE>
<CAPTION>
<S> <C>
February, 2022. $ 5,804,177
Note payable secured by Second Deed of Trust, payable to the
Community Redevelopment Agency of the City of Los Angeles with
interest at 7% per annum. Interest accrues from the date of
issuance of the first certificate of occupancy which is
December 26, 1991. Unpaid principal together with all accrued
and unpaid interest are due and payable in full upon the
maturity of the primary permanent loan, but not later than 40
years from date of issuance. Principal and interest payments
may be made in annual installments from the residual receipts
of the project, as the term residual receipts is defined in
the loan agreement. The note was funded by a Housing
Development Grant from the United States Department of Housing
and Urban Development. The terms of the Grant agreement impose
certain restrictions on the use of the Grant proceeds and
operating policies of the partnership. Accrued interest on
this note at December 31, 1998 amounted
to $2,456,728. 5,179,105
Note payable secured by Third Deed of Trust, payable to the
Community Redevelopment Agency of the City of Los Angeles,
with interest at 5% per annum. Interest accrues from the date
of issuance of the first certificate of occupancy which is
December 26, 1991. Unpaid principal together with all accrued
and unpaid interest are due and payable in full upon the
maturity of the primary permanent loan, but not later than 40
years from date of issuance. Principal and interest payments
may be made in annual installments from the residual receipts
of the project, as the term residual receipts is defined in
the loan agreement. Accrued interest on this note at
December 31, 1998 amounted to $2,152,385. 6,445,175
---------------
$ 17,428,457
===============
</TABLE>
<PAGE>
Strathern Park
Notes to Financial Statements
December 31, 1998
Note 2 LONG TERM DEBT (Cont.)
Maturities of long term debt as of December 31, 1998 for the
succeeding five years are as follows:
Years ended December 31,
1999 72,337
2000 77,942
2001 87,318
2002 96,023
2003 105,596
Thereafter 16,989,241
---------------
$ 17,428,457
===============
Note 3 DISTRIBUTION TO PARTNERS
Pursuant to the terms of the partnership agreement, as amended, and
the loan agreement with the Community Redevelopment Agency of the
City of Los Angeles, distributions are payable only from residual
receipts, as defined in the agreements.
Distributions are apportioned as follows:
1) 40% to the Community Redevelopment Agency of the City of Los Angeles(CRA)
2) The remaining 60% is allocated as follows:
a) The Investor Limited Partner (Boston) is to
receive any cumulative return ($60,000
annually) in arrears;
b) The next $63,158 is distributed 95% to
Boston, 4% to the Class A Limited Partner
(SAIP II) and 1% to the General Partner
(SAIP II);
c) Any additional cash is used to repay any partner
advances to the partnership; d) The next $63,158 is
distributed 5% to Boston, 94% to SAIP II (Limited
Partner)
and 1% to SAIP II (General Partner);
e) Thereafter, cash is distributed 50% to
Boston, 49% to SAIP II (Limited Partner)
and 1% to SAIP II (General Partner).
<PAGE>
Strathern Park
Notes to Financial Statements
December 31, 1998
Note 4 RELATED PARTY TRANSACTIONS
There were no direct compensation payments to the partners during
the year. However, there were related party transactions which
occurred which are set forth below:
<TABLE>
<CAPTION>
(Income) Receivable
Expense (Payable)
Account for the At December
Name Description No. Year 31, 1998
--------------------------------- -------------------- --------------- --------------- ---------------
Thomas Safran and
<S> <C> <C> <C> <C>
Associates, Inc.(TS&A) Management fee 6320 $ 95,685 $ (1,648)
Apartment Investment and
Managemet Company
(AIMCO)/Insignia Residential
Group, Inc. (IRG) Management fee 6320 28,920 ---
--------------- ---------------
$ 124,605 $ (1,648)
=============== ===============
</TABLE>
The general partner has a direct ownership interest in TS&A listed above.
Thomas Safran & Associates, Inc. (TS&A) has subcontracted certain
accounting and supervisory functions to Insignia Residential Group
(IRG) for a period of two years commencing August 1, 1997. On
October 1, 1998, IRG merged with Apartment Investment and Management
Company (AIMCO) which took over IRG's management function. TS&A will
continue to be the managing agent and AIMCO will report to them on a
monthly basis. The agreement among TS&A, AIMCO and the Project
provides a portion of the approved management fees to be paid to
AIMCO for their services.
Note 5 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash and Short Term Investments -
The carrying amount approximates fair value because of the
short maturity of those investments.
Long Term Debt (First Deed of Trust) -
The project does not have the right to prepay this debt during
the first ten years of the term of this note. Accordingly, the
carrying amount approximates its fair value.
Long Term Debt (Second & Third Deed of Trust) -
The carrying amount approximates fair value because there is
no ready market for such debt, repayment/refinancing is
severely restricted by the CRA and HUD.
<PAGE>
Strathern Park
Notes to Financial Statements
December 31, 1998
Note 5 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)
<TABLE>
<CAPTION>
December 31, 1998
-----------------------------------
Carrying Fair
Amount Value
<S> <C> <C>
Cash and Short Term Investments $ 389,743 $ 389,743
Long Term Debt (First Deed of Trust) (5,804,177) (5,804,177)
Long Term Debt (Second & Third Deed of Trust) (11,624,280) (11,624,280)
</TABLE>
Note 6 YEAR 2000 ISSUE
The General Partner has assessed the Partnership's exposure to date
sensitive computer software programs that may not be operative
subsequent to 1999 and has implemented a requisite course of action
to minimize Year 2000 risk and ensure that neither significant costs
nor disruption of normal business operations are encountered.
However, because there is no guarantee that all systems of outside
vendors or other entities affecting the partnership's operations
will be 2000 compliant, the Partnership remains susceptible to
consequences of the Year 2000 issue.
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
STRATHERN PARK
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
BOSTON FINANCIAL QUALIFIED HOUSING
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET FORMAT
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1110 Petty cash $ 800
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1120 Cash in bank 88,329
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1130 Tenant accounts receivable 23,200
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1140 Other accounts receivable 868
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1191 Tenant security deposits 113,365
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Total Current Assets $ 226,562
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
RESERVES AND DEPOSITS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1320 Reserve for replacements 187,249
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
FIXED ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1410 Land 5,889,320
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1420 Buildings 19,042,548
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1450 Furniture 949,223
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
25,881,091
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
4100 Less: accumulated depreciation (5,972,453)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Total Fixed Assets 19,908,638
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1820 Syndication fee (Net of accumulated amortization
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
of $130,186) 588,481
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 20,910,930
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Accompanying auditors' report.
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
STRATHERN PARK
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
BOSTON FINANCIAL QUALIFIED HOUSING
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET FORMAT
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' EQUITY
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2110 Accounts payable $ 19,354
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1st mortgage accrued interest payable 47,032
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
2191 Tenant security deposits 112,707 $ 179,093
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
MORTGAGE NOTE PAYABLE CURRENT PORTION
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1st mortgage note payable current portion 72,337
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 251,430
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Accrued interest payable - notes
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
2nd mortgage note payable 2,456,728
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
3rd mortgage note payable 2,152,385
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Mortgage notes payable
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
2321 1st mortgage note payable 5,731,840
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
2322 2nd mortgage note payable 5,179,105
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
2323 3rd mortgage note payable 6,445,175 17,356,120
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
OTHER LONG TERM LIABILITIES
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
2210 Deferred income 15,419
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Total Long Term Liabilities 21,980,652
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
PARTNERS' EQUITY
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
3130 Limited partners' equity (1,235,626)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
3131 General partners' equity (85,526)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
Total Partners' Equity (1,321,152)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 20,910,930
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Accompanying auditors' report.
<PAGE>
STRATHERN PARK
BOSTON FINANCIAL QUALIFIED HOUSING -
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
REVENUE
Rent revenue
<S> <C> <C> <C> <C>
5120 Apartments $ 1,500,682
5121 Tenant assistance payments 61,056
5130 Furniture and equipment -
5140 Stores and commercial 13,170
5170 Garage and parking -
5180 Flexible subsidy income -
5190 Miscellaneous -
----------------
Total rent revenue $ 1,574,908
Vacancies
5220 Apartments (28,013)
5240 Stores and commercial -
5270 Garage and parking -
5290 Miscellaneous -
----------------
Total Vacancies (28,013)
----------------
Net Rental Revenue 1,546,895
Financial Revenue
5410 Interest Income - operations 2,589
5430 Interest Income - residual receipts -
5440 Interest income - replacement reserve 4,403
5490 Interest income - miscellaneous 1,853
----------------
Total Financial Revenue 8,845
Other Revenue
5910 Laundry and vending 31,897
5920 NSF and late charges 7,667
5930 Damages and cleaning fees 3,522
5940 Forfeited tenant security deposit 406
5990 Other revenue 2,174
5991 Non-cash revenue -
----------------
Total Other Revenue 45,666
----------------
NET REVENUE $ 1,601,406
================
</TABLE>
See Accompanying auditors' report.
<PAGE>
STRATHERN PARK
BOSTON FINANCIAL QUALIFIED HOUSING -
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EXPENSES
Administrative Expenses
<S> <C> <C> <C>
6210 Advertising $ 4,739
6250 Other renting expense 6,368
6310 Office salaries 20,650
6311 Office supplies 47,953
6320 Management fee 124,605
6330 Manager or superintendent salary 55,737
6331 Manager's rent free unit -
6340 Legal expenses (project) 9,498
6350 Auditing expenses (project) 9,500
6351 Bookkeeping fees/accounting services -
6360 Telephone and answering service 11,496
6370 Bad debts 21,167
6390 Miscellaneous administrative expenses -
----------------
Total Administrative Expenses $ 311,713
Utilities Expenses
6420 Fuel oil/coal -
6450 Electricity 44,769
6451 Water 69,736
6452 Gas 7,411
6453 Sewer 32,133
----------------
Total Utilities Expenses 154,049
Operating & Maintenance
6510 Janitor and cleaning payroll -
6515 Janitor and cleaning supplies 7,998
6517 Janitor and cleaning contract -
6519 Exterminating payroll/contract 1,106
6520 Exterminating supplies -
6525 Garbage and trash removal 16,500
6530 Security payroll/contract 19,673
</TABLE>
See Accompanying auditors' report.
<PAGE>
STRATHERN PARK
BOSTON FINANCIAL QUALIFIED HOUSING -
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EXPENSES (Cont.)
Operating & Maintenance (Cont.)
<S> <C> <C> <C>
6535 Grounds payroll $ -
6536 Grounds supplies 5,015
6537 Grounds contract 30,839
6540 Repairs payroll 66,955
6541 Repairs material 23,209
6542 Repairs contract 23,117
6545 Elevator maintenance/contract -
6546 Heating/cooling repairs and maintenance 3,321
6547 Swimming pool maintenance/contract -
6548 Snow removal -
6560 Decorating payroll/contract 18,677
6561 Decorating supplies 7,307
6570 Other, gasoline -
6590 Miscellaneous operating and maintenance -
----------------
Total Operating and Maintenance $ 223,717
Taxes and Insurance
6710 Real estate taxes 122,658
6711 Payroll taxes (FICA) 11,399
6719 Miscellaneous taxes, licenses 3,872
6720 Property and liability insurance 27,431
6721 Fidelity bond insurance -
6722 Workmen's compensation 5,686
6723 Health insurance and other benefits 12,238
6729 Other insurance -
6790 Miscellaneous taxes and insurance -
----------------
Total Taxes and Insurance 183,284
Interest on Mortgage Notes
6821 Interest on 1st mortgage 567,918
</TABLE>
See Accompanying auditors' report.
<PAGE>
STRATHERN PARK
BOSTON FINANCIAL QUALIFIED HOUSING -
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
EXPENSES (Cont.)
Other Financial Expenses
<S> <C> <C> <C>
6690 Amortization $ 17,967
6830 Interest on notes payable (long term) 684,115
6850 Mortgage insurance premium -
6890 Miscellaneous financial expenses 500
6895 Non-cash expense -
----------------
Total Financial Expenses $ 702,582
---------------
TOTAL EXPENSES BEFORE DEPRECIATION 2,143,263
---------------
PROFIT (LOSS) BEFORE DEPRECIATION (541,857)
6600 Depreciation 758,946
---------------
OPERATING PROFIT (LOSS) (1,300,803)
Other Expenses Prior Period (Entity) ---
---------------
NET PROFIT (LOSS) $ (1,300,803)
===============
1st mortgage principal payment $ 54,502
2nd mortgage principal payment ---
3rd mortgage principal payment ---
---------------
Total mortgage principal payments $ 54,502
===============
Actual replacement reserve deposits $ 86,489
Replacement or painting reserve releases $ (38,067)
Cash subsidies ---
Capital improvements not expensed ---
Capital contribution or disbursement $ 33,395
See Accompanying auditors' report.
</TABLE>
<PAGE>
STRATHERN PARK
COMPUTATION OF RESIDUAL RECEIPTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Net income (loss) as of December 31, 1998 $ (1,300,803)
ADD: Depreciation $ 758,946
Amortization 17,967
Community Redevelopment Agency loan interest 322,258
Housing Development Grant loan interest 361,857
Approved releases from reserve for replacements ---
Releases from reserve for replacements 38,067 1,499,095
-------------- ---------------
198,292
LESS: Principal payments on mortgage (54,502)
Deposits to reserve for replacements (86,489)
Payments for capital expenditures --- (140,991)
-------------- ---------------
RESIDUAL RECEIPTS, as defined in the partnership agreement
at December 31, 1998 $ 57,301
===============
</TABLE>
See Accompanying auditors' report.
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
CIRCLE TERRACE ASSOCIATES
LIMITED PARTNERSHIP
HUD PROJECT NO.: 052-44056-LDP
CDA PROJECT NO.: 28.04.0010
DECEMBER 31, 1997
<PAGE>
TABLE OF CONTENTS - CONTINUED
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
PAGE
MORTGAGOR'S CERTIFICATION 4
MANAGING AGENT'S CERTIFICATION 5
INDEPENDENT AUDITORS' REPORT 6
FINANCIAL STATEMENTS
BALANCE SHEET 8
STATEMENT OF PROFIT AND LOSS 10
STATEMENT OF PARTNERS' EQUITY 12
STATEMENT OF CASH FLOWS 13
NOTES TO FINANCIAL STATEMENTS 15
SUPPLEMENTAL INFORMATION
ACCOUNTS AND NOTES RECEIVABLE 25
CONTRIBUTIONS DUE 25
MORTGAGE ESCROW DEPOSITS 25
TENANT SECURITY DEPOSITS 26
RESERVE FOR REPLACEMENTS 26
RESIDUAL RECEIPTS 26
PAINTING RESERVE 26
ACCOUNTS PAYABLE 27
ACCRUED TAXES 27
LETTERS OF CREDIT 27
LOANS AND NOTES PAYABLE 27
MORTGAGES PAYABLE 28
MORTGAGES PAYABLE FROM SURPLUS CASH 28
COMPENSATION OF PARTNERS 28
UNAUTHORIZED DISTRIBUTIONS OF
PROJECT INCOME TO PARTNERS 28
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES 29
NON-REVENUE PRODUCING UNITS 29
DECLARATION OF OWNERSHIP - UNAUDITED 29
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
RESIDUAL RECEIPTS 30
CHANGES IN FIXED ASSET ACCOUNTS 31
COMPARISON OF BUDGET TO ACTUAL INCOME AND EXPENSES 32
MONTHLY INCOME AND EXPENSE STATEMENT - CASH BASIS 35
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL 38
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD AND
CDA PROGRAMS 40
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO FAIR HOUSING AND
NON-DISCRIMINATION 42
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND
REGULATIONS APPLICABLE TO THE FINANCIAL STATEMENTS 43
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 45
ANNUAL AUDIT QUESTIONNAIRE 46
<PAGE>
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
- 24 -
MORTGAGOR'S CERTIFICATION
I hereby certify that I have examined the accompanying financial
statements and supplemental data of Circle Terrace Associates Limited
Partnership and, to the best of my knowledge and belief, the same is complete
and accurate.
GENERAL PARTNER
---------------------------------------
Judith Siegel Date
Partnership Employer
Identification Number:
05-0461953
<PAGE>
MANAGING AGENT'S CERTIFICATION
I hereby certify that I have examined the accompanying financial
statements and supplemental data of Circle Terrace Associates Limited
Partnership and, to the best of my knowledge and belief, the same is complete
and accurate.
MANAGING AGENT
Rental Housing Management
Partnership
---------------------------------------
Eric Richelson Date
David Staley Managing Agent Employer
Property Manager Identification Number:
13-3580730
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
Circle Terrace Associates
Limited Partnership
We have audited the accompanying balance sheet of Circle Terrace
Associates Limited Partnership as of December 31, 1997, and the related
statements of profit and loss (on HUD Form No. 92410), partners' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Circle Terrace
Associates Limited Partnership as of December 31, 1997, and the results of its
operations, the changes in partners' equity and 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 supplemental information on pages 25
through 37 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
that portion marked "unaudited", on which we express no opinion, 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 21, 1998 on our consideration of Circle Terrace Associates Limited
Partnership's internal control and on its compliance with specific requirements
applicable to major HUD and CDA programs, fair housing and non-discrimination,
and laws and regulations applicable to the financial statements.
Bethesda, Maryland Federal Employer
January 21, 1998 Identification Number:
52-1088612
Audit Principal: Lester A. Kanis
<PAGE>
BALANCE SHEET
DECEMBER 31, 1997
ASSETS
CURRENT ASSETS
1110 Petty cash $ 1,400
1120 Cash in bank 143,737
1121 Cash - partnership 247,311
1130 Tenant accounts receivable 11,720
1131 Accounts receivable - HUD 178,313
1240 Prepaid property insurance 37,733
1250 Prepaid mortgage insurance 16,332
1270 Prepaid real estate taxes 34,169
-----------------
Total current assets 670,715
DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant security deposits 40,834
RESTRICITAD DEPOSITS AND FUNDED RESERVES
1310 Mortgage escrow deposits $ 108,992
1320 Reserve for replacements 486,850
1330 Painting reserve 123,993
---------------
719,835
RENTAL PROPERTY
1410 Land 1,104,269
1420 Buildings and improvements 15,214,660
1440 Building equipment - fixed 34,325
1440 Building equipment - portable 18,164
1450 Personal property 18,440
1460 Furnishings 8,378
--------------
16,398,236
1495 Less accumulated depreciation 2,929,726
-----------
13,468,510
OTHERASSETS
1901 Mortgage costs, less accumulated
amortization of $85,191 221,729
=======
$ 15,121,623
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
BALANCE SHEET-Continued
DECEMBER 31, 1997
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
2110 Accounts payable $ 23,487
2130 Accrued interest payable 34,763
2150 Accrued P.I.L.O.T. 91,140
2190 Accrued management fees 22,482
2210 Rent deferred credits 675
2320 Current maturities of long term debt 283,526
-------
Total Current Liabilities 456,073
DEPOSITS LIABILITIES
2191 Tenant security deposits (contra) 34,440
LONG TERM LIABILITIES
2320 Long term debt, net of current maturities $ 9,435,867
2335 Accrued interest 103,030
-------------
9,538,897
CONTINGENCY -
3130 PARTNERS' EQUITY 5,092,113
-------------
$15,121,523
STATEMENT OF PROFIT AND LOSS
DECEMBER 31, 1997
<TABLE>
RENTAL INCOME
<S> <C> <C>
5120 Apartments or member carrying charges (Coops) $ 305,325
5121 Tenant assistance payments 1,988,739
-------
Total rent revenue potential at 100% occupancy $2,294,064
VACANCIES
5220 Apartments (7,223)
--------------
Total vacancies (7,223)
Net rental revenue 2,286,841
FINANCIAL REVENUE
5410 Interest Income -project operations 6,619
5440 Income from investments - reserve for replacement 12,093
-----
Total financial revenue 18,712
OTHER REVENUE
5910 Laundry and vending 9,482
5920 NSF and late charges 4,117
-----
Total other revenue 13,599
Total revenue 2,319,152
</TABLE>
<PAGE>
STATEMENT OF PROFIT AND LOSS (continued)
DECEMBER 31, 1997
<TABLE>
ADMINISTRATIVE EXPENSES
<S> <C> <C>
6210 Advertising and marketing 8,719
6250 Other renting expenses 5,778
6310 Office salaries 89,954
6311 Office Supplies 26,989
6320 Management fee 130,164
6331 Manager or superintendent rent free unit 7,548
6340 Legal expenses - project 13,711
6350 Auditing expenses - project 9,600
6351 Bookkeeping fees/accounting services 16,368
6360 Telephone and answering services 11,916
6370 Bad debts 4,749
6390 Miscellaneous administrative expenses 23,761
------
Total administrative expenses 349,257
UTILITIES EXPENSE
6450 Electricity 17,224
6451 Water 14,777
6452 Gas 109,333
Total utilities expense 141,334
OPERATING AND MAINTENANCE EXPENSES
6515 Janitor and cleaning supplies 9,387
6517 Janitor and cleaning contract 3,843
6520 Exterminating supplies 734
6525 Garbage and trash removal 38,158
6530 Security payroll/contract 166,940
6536 Grounds supplies 893
6537 Grounds contract 35,980
6540 Repairs payroll 127,205
6541 Repairs material 102,277
6542 Repairs contract 11,242
STATEMENT OF PROFIT AND LOSS (continued)
DECEMBER 31, 1997
6546 Heating/cooling repairs and maintenance 8,406
6548 Snow removal 1,275
6560 Decorating payroll contract 22,135
6561 Decorating supplies 7,557
6570 Other 9,544
6590 Miscellaneous operating and maintenance expenses 236
-----------
Total operating and maintenance expenses 545,812
TAXES AND INSURANCE
6710 Real estate taxes 123,445
6711 Payroll taxes (FICA) 29,527
6719 Miscellaneous taxes, licenses and permits 400
6720 Property and liability insurance (Hazard) 88,162
6721 Fidelity bond insurance 914
6722 Workmen's compensation 11,018
6723 Heath insurance and other employee benefits 28,951
------
Total taxes and insurance 282,417
FINANCIAL EXPENSES
6820 Interest on mortgage payable 435,537
6840 Interest on notes payable - short-term 1,342
6850 Mortgage insurance premium/service charge 45,753
------
Total financial expenses 482,632
DEPRECIATION AND AMORTIZATION
Total cost of operations before depreciation 1,801,452
Profit (Loss) before depreciation 517,700
Depreciation and amortization 574,584
Operating Profit or (Loss) (56,884)
CORPORATE OR MORTGAGOR ENTITY EXPENSES
7190 Other (revenue)/expenses (9,077)
Total corporate expenses (9,077)
----
Net Profit (47,807)
</TABLE>
STATEMENT OF PARTNER'S EQUITY
DECEMBER 31, 1997
Special Investor
General Limited Limited
Partner Partner Partner Total
Partners' equity,
Beginning $217,706 - $4,922,214 $5,139,920
Net Loss (478) - (47,329) (47,807)
--------- ------------ --------- -----------
Partners' equity,
End $ 217,228 - $ 4,874,885 $ 5,092,113
--------- ----------- -----------
Statement OF CASH FLOWS
DECEMBER 31, 1997
Cash flows from operating activities
Rental income received $ 2,131,151
Interest received 18,709
Other income received 13,599
Administrative expenses paid (133,228)
Management fees paid (130,164)
Utilities paid (145,670)
Salaries and wages paid (406,234)
Operating and maintenance paid (217,547)
Real estate taxes paid (65,118)
Payroll taxes paid (29,527)
Property insurance paid (124,576)
Other taxes and insurance paid (29,351)
Interest paid on mortgage (413,662)
Interest paid on notes (1,342)
Mortgage insurance premium paid (45,753)
Decrease in mortgage escrow deposits 2,700
Mortgagor entity income received, net 9,077
Net tenant security deposits received 2,163
--------------
Net cash provided by operating activities 435,227
--------------
Cash flows from investing activities
Deposits to reserve for replacement (96,633)
Deposits to painting reserve (42,497)
Payment of developer fees payable (34,554)
Purchase of fixed assets (18,440)
-------------
Net cash used in investing activities (192,124)
-------------
Cash flow from financing activities
Mortgage and note principal payments (261,217)
Proceeds from note payable 17,940
----------------
Net cash used in financing activities (243,277)
STATEMENT OF CASH FLOWS (CONTINUED)
DECEMBER 31, 1997
NET DECREASE IN CASH (174)
Cash, beginning 392,622
Cash, end $ 392,448
===============
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Circle Terrace Associates Limited Partnership was organized under the laws
of the State of Maryland on March 28, 1990, for the purpose of acquiring and
operating a rental housing project under Section 236 of the National Housing
Act. The project consists of 303 units located in Lansdowne, Maryland, and
is currently operating under the name of Circle Terrace Apartments. The
property is managed by an affiliate of the general partner based on a fee of
$35.80 per unit per month.
Cash distributions are limited by agreements between the partnership and the
United States Department of Housing and Urban Development (HUD) to an annual
amount of $30,340 per year to the extent of surplus cash as defined by HUD.
Undistributed amounts are cumulative and may be distributed in subsequent
years if future operations provide surplus cash in excess of current
requirements.
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. In addition, Circle
Terrace Associates Limited Partnership has executed an Extended Low-income
Housing Agreement/Land Deed Restriction/Extended Use Commitment which
requires the utilization of the project pursuant to Section 42 for a minimum
of 30 years, even after the disposition of the project by the partnership.
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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Rental Property
Rental property is 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-year
life. Personal property is recorded at cost and is depreciated over its
estimated service life of 5-7 years using accelerated methods. 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 respective loan using the
straight-line method.
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 upon such
determination.
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.
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.
<PAGE>
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments
Investments in U.S. Treasury bills are carried at amortized cost, which
approximates fair market value, and are classified as held to maturity. Such
investments are included in the reserve for replacements in the accompanying
balance sheet.
NOTE B - PARTNERS' CAPITAL CONTRIBUTIONS
The partnership has one general partner - Cooperative Associates Limited
Partnership and two limited partners - SLP, Inc. (the special limited
partner) and Boston Financial Qualified Housing Tax Credits L.P. V, a
Limited Partnership (the investor limited partner). The general partner has
made capital contributions of $413,562. SLP, Inc. is required to make a
capital contribution of $10. The investor limited partner has made capital
contributions totaling $5,615,234.
NOTE C - LONG-TERM DEBT
First Mortgage
The partnership is obligated under the terms of a mortgage note which is
insured by the Federal Housing Administration (FHA) and bears interest at
the rate of 7%, less a varying interest subsidy in the current amount of
$17,879 per month. Monthly payments of principal and interest in the reduced
amount of $10,564 are due through maturity in February 2017. The total
interest subsidy of $213,447 is reflected as a reduction of interest
expense. Principal and accrued interest due at December 31, 1997 are
$3,596,386 and $2,897, respectively.
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.
<PAGE>
NOTE C - LONG-TERM DEBT (Continued)
Second Mortgage
The partnership is obligated under the terms of a mortgage note in the
original amount of $4,000,000, which is insured by the Maryland Housing Fund
(MHF) payable to Crestar of Richmond, Virginia, Inc. The note bears interest
at the rate of 8%. Monthly payments of principal and interest in the amount
of $34,576 are due through maturity in December 2011. Principal and accrued
interest due at December 31, 1997 are $3,483,497 and $24,099, respectively.
The liability of the partnership under the terms of the mortgage is limited
to the underlying value of the real estate collateral plus other amounts
deposited with the lender.
Third Mortgage
The partnership is obligated under the terms of a mortgage note in the
original amount of $2,227,330 payable to the Department of Housing and
Community Development of the State of Maryland (CDA). The note bears
interest at 4.5%. Monthly payments of principal and interest of $11,373 are
due through July 1, 2023. Principal and accrued interest due at December 31,
1997 are $2,071,870 and $7,767, respectively.
The liability of the partnership under the terms of the mortgage is limited
to the underlying value of the real estate collateral.
Promissory Note
The partnership is obligated under the terms of an unsecured promissory note
payable to Baltimore County, Maryland. Interest accrues at the rate of 4%.
Annual interest payments commenced January 1, 1996. Annual payments of
principal will be due commencing January 1, 2000 and will extend for 30
years through maturity on December 31, 2030. Payments may be made only to
the extent of surplus cash as defined by HUD. Principal and accrued interest
due at December 31, 1997 are $550,000 and $103,030, respectively.
<PAGE>
NOTE C - LONG-TERM DEBT (Continued)
Note Payable
The partnership is obligated under the terms of a note payable for the
purchase of a truck. The note bears interest at 8.75% and requires monthly
payments of principal and interest of $588 through maturity in October 2000.
The amount payable at December 31, 1997 is $17,640.
Aggregate annual maturities of long-term debt for each of the next five
years are as follows:
--------------------------------------------- -- ----------------
December 31, 1998 $ 283,526
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
1999 304,471
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2000 325,839
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2001 343,827
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2002 369,264
--------------------------------------------- -- ----------------
NOTE D - RELATED PARTY TRANSACTIONS
Working Capital Advances
The general partner is obligated to make working capital advances to the
partnership as needed, up to an aggregate of $100,000. Such advances are
noninterest bearing and can be repaid out of available net cash flow as
defined in the partnership agreement. No such advances were required as of
December 31, 1997.
In the event cash flow does not provide sufficient funds to pay the investor
limited partner its minimum distribution, such amount required will be
advanced by the general partner and will be considered a project expense
loan.
Management Agreement
The property is managed by an affiliate of the general partner. The
management fee is based on a charge of $35.80 per unit per month. The
management agent also receives fees of $4.50 per unit per month for
accounting services provided to the partnership. Management and accounting
fees charged to operations during 1997 were $130,164 and $16,368,
respectively, of which $22,482 of management fee is payable at December 31,
1997.
<PAGE>
NOTE D - RELATED PARTY TRANSACTIONS (Continued)
Insurance
The sole shareholder of an affiliate of the general partner provided debt
financing for the capitalization of LaMere Associates, Inc. (LaMere). In
connection with such debt financing, the shareholder received 20% of the
stock of LaMere. LaMere was paid premiums in connection with the following
insurance coverage provided to the partnership: property and liability,
fidelity bond and auto. In connection with such insurance coverage, the
partnership incurred $100,094 in premiums for the year ended December 31,
1997.
Computer Services
In accordance with HUD Regulations 4381.5 Rev-2, Paragraph 6.38, the
partnership uses the services of a computer consultant company to provide
the following services: purchase and install personal computers and the
related equipment and software for the project's rental office; provide
training and technical support, and consult on software upgrades. Dynamic
Information Services, Inc. (DIS), which is owned by a relative of an officer
of the management company, is a licensed representative of Project Data
Systems, Inc., a nationally known provider of computer system software for
the subsidized housing industry. DIS derives 40% of its consulting service
revenues from third-party clients not affiliated with the management
company. In 1997, the partnership paid DIS $2,174 for equipment and
software, representing actual cost, and $1,697 for technical support and
training services based on billable hours.
NOTE E - CONTRACT WITH BALTIMORE COUNTY (IN LIEU OF TAXES)
The partnership has entered into an agreement with Baltimore County,
Maryland, whereby the partnership is to pay the County $162.50 per apartment
unit per year (the minimum payment) in lieu of real estate taxes. To the
extent there is net cash flow, as defined in the agreement, such amount is
to be applied toward additional payments. The minimum payment has been
increased 10% annually. The amount incurred during 1997 under the terms of
this agreement was $58,327. This amount is included with other city and
county real estate taxes in the statement of profit and loss. As of December
31, 1997, $91,140 remains payable.
<PAGE>
NOTE F - HOUSING ASSISTANCE PAYMENT (HAP) CONTRACT AGREEMENTS
HUD has contracted with the partnership under the United States Housing Act
of 1937 to make housing assistance payments to the partnership on behalf of
qualified tenants. The terms of the contract covering 142 units expires on
November 30, 1998 and the contract covering 161 units expired on November
30, 1997. The contracts do not have renewal options.
With Congressional passage in October 1997 of the Multifamily Assisted
Housing and Reform and Affordability Act (the Act), HUD has been given
budgetary authority to approve requests for one-year renewals on all Section
8 contracts expiring through September 30, 1998. Thus, one of the
partnership's HAP agreements will be eligible for a one-year renewal through
March 31, 1999.
Under provisions of the Act, renewal of Section 8 contracts expiring after
September 30, 1998 are subject to evaluation and assessment under a complex
set of requirements as prescribed by this "mark-to-market" legislation.
Further, implementing regulations by HUD affecting administration over the
renewal process have not been finalized. As a result, it is uncertain
whether HUD will renew these contracts under terms that are consistent with
the successful operation of the project. The project is economically
dependent upon the rental income received from both of its agreements. If
HUD were not to extend either one, the project's operating cash flow would
be adversely affected.
NOTE G - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
All profits and losses are allocated 1% to the general partner and 99% to
the investor limited partner.
Cash flow, as defined in the partnership agreement, is to be distributed as
follows:
1. 99% to the investor limited partner and 1% to the general partner until
the investor limited partner has received distributions, in the
aggregate, equal to the cumulative priority distribution.
2. To the repayment of any project expense loans.
<PAGE>
NOTE G - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)
3. To the general partner until it has received cumulatively an amount
equal to the cumulative amount paid to the investor limited partner as
defined above.
4. 50% to the general partner and 50% to the investor limited partner.
Gain, if any, from a sale, exchange or other disposition 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 each partner until the positive capital account balance is equal to
the amount of cash available for distribution as a result of the
transaction, as defined in the partnership agreement.
Loss from a sale is allocable as follows:
1. To the partners in proportion to their positive capital account
balances. In the event the loss is less than the sum of the positive
capital accounts, the loss is to be allocated such that the resulting
capital account balance is as near as possible to the amount of cash to
be distributed as a result of the transaction.
2. 1% to the general partner and 99% to the investor limited partner.
NOTE H - TAXABLE LOSS
A reconciliation of the financial statement net loss to the income tax net
loss of the partnership for the year ended December 31, 1997 is as follows:
----------------------------------------------------------------------
Financial statement net loss $ (47,807)
----------------------------------------------------------------------
----------------------------------------------------------------------
Excess depreciation for income tax purposes (5,750)
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Income net tax loss $ (53,557)
----------------------------------------------------------------------
<PAGE>
NOTE I - INVESTMENT IN REAL ESTATE
A reconciliation of the basis of the investment in real estate for financial
reporting purposes to that for income tax purposes as of December 31, 1997
is as follows:
-------------------------------------------------------------------------------
Investment in real estate for financial reporting $ 13,468,510
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Excess accumulated depreciation for income tax purposes (50,844)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Interest expense portion of subsidy capitalized for income tax purposes 177,337
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Investment in real estate for income tax purposes $ 13,595,003
-------------------------------------------------------------------------------
NOTE J - CONCENTRATION OF CREDIT RISK
The partnership maintains its cash balances in several banks. The balances
are insured by the Federal Deposit Insurance Corporation (FDIC) up to
$100,000 per bank. As of December 31, 1997, the uninsured portion of the
partnership cash balances held at one bank was $147,311.
NOTE K - CONTINGENCY
The partnership'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 capital contributed
by the investor limited partner.
NOTE L - OTHER MORTGAGOR ENTITY EXPENSES (ACCOUNT NO. 7190)
Other mortgagor entity expenses consist of the following:
------------------------------------------------------------------------
Interest income - partnership accounts $ 9,077
------------------------------------------------------------------------
<PAGE>
SUPPLEMENTAL INFORMATION
SUPPORTING DATA REQUIRED BY HUD AND CDA
<PAGE>
SUPPLEMENTAL INFORMATION
SUPPORTING DATA REQUIRED BY HUD AND CDA
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
- 52 -
ACCOUNTS AND NOTES RECEIVABLE (OTHER THAN FROM REGULAR TENANTS)
<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
Name of borrower Original date Terms Original amount Balance due
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
U.S. Department of Housing and Oct. - Dec. 1/98 $ 178,313 $ 178,313
Urban Development 1997
---------------------------------------------------------------------------------------------------------------
DELINQUENT TENANT ACCOUNTS RECEIVABLE
---------------------------------------------------------------------------------------------------------------
Number of Amount
tenants past due
----------------------------------
----------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent 30 days 56 $ 1,980
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent 31-60 days 52 1,807
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent 61-90 days 32 2,022
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent over 90 days 49 5,911
----------------------------------------------------------------------------- --------------------
----------------------------------------------------------------------------- --------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
$ 11,720
----------------------------------------------------------------------------- --------------------
CONTRIBUTIONS DUE
---------------------------------------------------------------------------------------------------------------
SLP, Inc. $ 10
---------------------------------------------------------------------------------------------------------------
MORTGAGE ESCROW DEPOSITS
---------------------------------------------------------------------------------------------------------------
Estimated amount required as of December 31, 1997, for future payment of:
---
---
City, state and county taxes (P.I.L.O.T) $ 37,836
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Property insurance 31,915
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Mortgage insurance 13,314
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
83,065
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Amount on deposit in excess of estimated requirements 25,927
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Total confirmed by mortgagee $ 108,992
---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SUPPLEMENTAL INFORMATION - CONTINUED
SUPPORTING DATA REQUIRED BY HUD AND CDA
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
TENANT SECURITY DEPOSITS
Tenant security deposits are held in a separate bank account in the name of
the project.
RESERVE FOR REPLACEMENTS
In accordance with the provisions of the regulatory agreement, restricted
cash is held by Mellon Mortgage Company to be used for replacement of
property with the approval of HUD as follows:
----------------------------------------------------------------------
Balance at December 31, 1996 $ 390,217
----------------------------------------------------------------------
----------------------------------------------------------------------
Monthly deposits
----------------------------------------------------------------------
----------------------------------------------------------------------
$7,045 x 12 84,540
----------------------------------------------------------------------
----------------------------------------------------------------------
Interest earned 12,093
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Balance at December 31, 1997, confirmed by mortgagee $ 486,850
----------------------------------------------------------------------
RESIDUAL RECEIPTS
NONE
PAINTING RESERVE
The partnership has established a reserve for painting of the property. The
restricted cash is held by the partnership.
----------------------------------------------------------------------
Balance at December 31, 1996 $ 81,496
----------------------------------------------------------------------
----------------------------------------------------------------------
Monthly deposits
----------------------------------------------------------------------
----------------------------------------------------------------------
$3,333 x 12 39,996
----------------------------------------------------------------------
----------------------------------------------------------------------
Interest earned 2,501
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Balance at December 31, 1997 $ 123,993
----------------------------------------------------------------------
<PAGE>
ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS)
NONE
<TABLE>
ACCRUED TAXES
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Description of tax Basis for accrual Period covered Date due Amount accrued
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Baltimore County, Maryland P.I.L.O.T. 1997 12/31/97 $ 91,140
P.I.L.O.T.
--------------------------------------------------------------------------------------------------------------
LETTERS OF CREDIT
NONE
LOANS AND NOTES PAYABLE (OTHER THAN THE INSURED MORTGAGE)
---------------------------------------------------------------------------------------------------------------
Creditor Interest Collateral Date Terms Original amount Balance due
rate incurred
-------------------------------------------------------------------------- ----------------- -----------------
-------------------------------------------------------------------------- ----------------- -----------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Crestar of 8% Second trust 12/91 20 yrs 4,000,000 $ 3,483,497
Richmond,
Virginia, Inc.
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
State of Maryland 4.5% Third trust 12/91 20 yrs 2,227,330 $ 2,071,870
CDA
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Baltimore County, 4.0% Unsecured 11/90 40 yrs 550,000 $ 550,000
Maryland
---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
MORTGAGES PAYABLE
---------------------------------------------------------------------------
Creditor Address of creditor
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
HUD Washington, D.C.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Crestar of Richmond, Virginia, Inc. Richmond, Virginia
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Department of Housing and Community Crownsville, Maryland
Development of the State of Maryland
---------------------------------------------------------------------------
Servicer Address of servicer
Mellon Mortgage Company Cleveland, Ohio
Crestar of Richmond, Virginia, Inc. Richmond, Virginia
Bogman, Inc. Bethesda, Maryland
MORTGAGES PAYABLE FROM SURPLUS CASH
NONE
COMPENSATION OF PARTNERS
NONE
UNAUTHORIZED DISTRIBUTIONS OF PROJECT INCOME TO PARTNERS
NONE
<PAGE>
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES
<TABLE>
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Company name Services rendered Amount paid Amount payable
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Rental Housing Management $ 130,164 $ 22,482
Partnership
Property management
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Rental Housing Management $ 16,368 $ -
Partnership
Accounting fees
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
LaMere Associates, Inc. $ 100,094 $ -
Insurance coverage
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Dynamic Information Equipment, software, technical support $ 3,871 $ -
Services, Inc. and training services
--------------------------------------------------------------------------------------------------------------
NON-REVENUE PRODUCING UNITS
------------------------------------------------------------------------------------------------------------
Name of occupant Connection with project
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Willfred Chatterton Assistant Supervisor
------------------------------------------------------------------------------------------------------------
DECLARATION OF OWNERSHIP - UNAUDITED
----------------------------------------------------------------------------------------------------------------
Type of partner Name of partner Capital Ownership
contributed percentage
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
General Partner Cooperative Associates Limited $ 413,562 1%
Partnership
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Special Limited Partner SLP, Inc. $ 0 0%
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Limited Partner Boston Financial Qualified $ 5,615,234 $ 99%
Housing Partnership
----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1997, and have
issued our report thereon dated January 21, 1998. We have also audited Circle
Terrace Associates Limited Partnership's compliance with specific requirements
applicable to major HUD-assisted and CDA programs and have issued our report
thereon dated January 21, 1998.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, the "Consolidated Audit Guide for Audits of HUD Programs"
(the Guide), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General and the Maryland Department of Housing and
Community Development, Community Development Administration Audit Guide dated
October 1997. Those standards and the two guides require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement and about whether Circle Terrace
Associates Limited Partnership complied with laws and regulations, noncompliance
with which would be material to major HUD-assisted and CDA programs.
The management of the partnership is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. The objectives of internal control are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition, that transactions are executed in
accordance with management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally accepted
accounting principles, and that HUD-assisted and CDA programs are managed in
compliance with applicable laws and regulations. Because of inherent limitations
in internal control, errors, fraud or instances of noncompliance may
nevertheless occur and not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that procedures may
become inadequate because of changes in conditions or that the effectiveness of
the design of controls may deteriorate.
<PAGE>
In planning and performing our audits of the partnership for the year
ended December 31, 1997, we obtained an understanding of the design of the
relevant controls and determined whether they have been placed in operation, and
we assessed control risk in order to determine our auditing procedures for the
purpose of expressing our opinions on the partnership's financial statements and
on its compliance with specific requirements applicable to major HUD-assisted
and CDA programs and to report on internal control in accordance with the
provisions of the Guide and not to provide an opinion on internal control.
We performed tests of controls, as required by the Guide, to evaluate
the effectiveness of the design and operation of controls that we considered
relevant to preventing or detecting material noncompliance with specific
requirements that are applicable to the partnership's HUD-assisted and CDA
programs. Our procedures were less in scope than would be necessary to render an
opinion on internal control. Accordingly, we do not express such an opinion.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or fraud in amounts that would be material in
relation to the financial statements or that noncompliance with laws and
regulations that would be material to a HUD-assisted or CDA program may occur
and not be detected within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving internal
control and its operation that we consider to be material weaknesses as defined
above.
This report is intended for the information of the audit committee,
management, the Department of Housing and Urban Development and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.
Bethesda, Maryland
January 21, 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT ON
COMPLIANCE WITH SPECIFIC REQUIREMENTS
APPLICABLE TO MAJOR HUD AND CDA PROGRAMS
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1997, and have
issued our report thereon dated January 21, 1998.
We have also audited Circle Terrace Associates Limited Partnership's
compliance with specific program requirements governing federal financial
reports; mortgage status; replacement reserve; residual receipts; security
deposits; cash receipts and disbursements; distributions to owners; tenant
application, eligibility, and recertification; and management functions that are
applicable to its major HUD-assisted and CDA programs for the year ended
December 31, 1997. The management of Circle Terrace Associates Limited
Partnership is responsible for compliance with those requirements. Our
responsibility is to express an opinion on compliance with those requirements
based on our audit.
We conducted our audit of compliance with specific program requirements
in accordance with generally accepted auditing standards, Government Auditing
Standards, issued by the Comptroller General of the United States, the
"Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by the
U.S. Department of Housing and Urban Development, Office of the Inspector
General and the Maryland Department of Housing and Community Development,
Community Development Administration Audit Guide dated October 1997. Those
standards and the two guides require that we plan and perform the audit to
obtain reasonable assurance about whether material noncompliance with the
requirements referred to above occurred. An audit includes examining, on a test
basis, evidence about Circle Terrace Associates Limited Partnership's compliance
with those requirements. We believe that our audit provides a reasonable basis
for our opinion.
The results of our audit procedures disclosed immaterial instances of
noncompliance with the requirements referred to above, which are described in
the accompanying Schedule of Findings and Questioned Costs. We considered these
instances of noncompliance in forming our opinion on compliance, which is
expressed in the following paragraph.
<PAGE>
In our opinion, Circle Terrace Associates Limited Partnership complied,
in all material respects, with the specific program requirements that are
applicable to its major HUD-assisted and CDA programs for the year ended
December 31, 1997.
This report is intended for the information of the audit committee,
management, the Department of Housing and Urban Development and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.
Bethesda, Maryland
January 21, 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO
FAIR HOUSING AND NON-DISCRIMINATION
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1997, and have
issued our report thereon dated January 21, 1998. We have also audited Circle
Terrace Associates Limited Partnership's compliance with specific requirements
applicable to major HUD-assisted and CDA programs and have issued our report
thereon dated January 21, 1998.
We have applied procedures to test Circle Terrace Associates Limited
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements applicable to its HUD-assisted and CDA programs for the year ended
December 31, 1997.
Our procedures were limited to the applicable procedures described in
the "Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by
the U.S. Department of Housing and Urban Development, Office of the Inspector
General. Our procedures were substantially less in scope than an audit, the
objective of which is the expression of an opinion on Circle Terrace Associates
Limited Partnership's compliance with the Fair Housing and Non-Discrimination
requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under the Guide.
This report is intended for the information of the audit committee,
management, the Department of Housing and Urban Development and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.
Bethesda, Maryland
January 21, 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
WITH LAWS AND REGULATIONS APPLICABLE
TO THE FINANCIAL STATEMENTS
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1997, and have
issued our report thereon dated January 21, 1998.
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.
Compliance with laws, regulations, contracts, and grants applicable to
Circle Terrace Associates Limited Partnership is the responsibility of Circle
Terrace Associates Limited Partnership's management. As part of obtaining
reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of Circle Terrace Associates Limited
Partnership's compliance with certain provisions of laws, regulations,
contracts, and grants. However, the objective of our audit of the financial
statements was not to provide an opinion on overall compliance with such
provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under Government Auditing Standards.
However, the results of our tests disclosed certain immaterial
instances of noncompliance that are described in the accompanying Schedule of
Findings and Questioned Costs.
This report is intended for the information of the audit committee,
management, the Department of Housing and Urban Development and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.
Bethesda, Maryland
January 21, 1998
<PAGE>
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
December 31, 1997
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Finding
In performing our lease tests on the tenant files, we noted the following
findings:
1) One lease did not have the manager's signature.
2) One recertification did not have the manager's signature.
Recommendation
Management should strengthen procedures to ensure that all forms are signed
by the appropriate individuals.
<PAGE>
CLIENT NAME Circle Terrace Apartments
CLOSING DATE December 31, 1997
<TABLE>
ANNUAL AUDIT
QUESTIONNAIRE
CDA PROJECTS
Answers to these questions should be based upon a review of procedures
and/or an actual test of transactions. "NO" answers are indicative of an adverse
condition which must be described in the audit report unless the mortgagor has
written permission from DHCD to deviate from the regular mortgage requirements.
<S> <C> <C>
--------------------------------------------------------------------------------------------------------------------
Examination Item Yes, No or N/A Working
(Not Applicable) Paper
Reference
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1. Mortgage Status
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Are payments on all mortgages current?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 1 Yes AA-2
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 2 Yes AA-3
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 3 Yes AA-3
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 4
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 5
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Has the mortgagor complied with the terms and conditions of the Yes AA
Regulatory Agreement and/or workout arrangements?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2. Books and Records
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Are a complete set of books and records maintained in a Yes CF
satisfactory manner?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Does the mortgagor make frequent postings (at least monthly) to the Yes CF
ledger accounts?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
3. Cash Activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Are the cash receipts deposited in the name of the project in a Yes CF
bank whose deposits are federally-insured?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Are security deposits kept separate and apart from all other funds Yes
A-9 of the project in an insured institution?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
c. Does the mortgagor keep sufficient funds in the security deposit Yes DD-1
account to equal or exceed the aggregate of all outstanding
obligations to the depositors?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
d. Does the owner or his/her management agent have a fidelity bond in Yes
CF an amount at least equal to potential collections for two months
plus the full security deposit liability which provides coverage for
all employees handling assets of the project?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
e. Did cash disbursements exclude payments for items listed below:
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1) Legal expenses incurred in the sale of partnership interest? Yes CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2) The fee for the preparation of a partner's, shareholder's or Yes CF
individual's federal, state or local income tax returns?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
3) Advice to an owner on tax consequences of foreclosure? Yes CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
4) Reimbursement to the owners or affiliates while the mortgage N/A
is in default, or under workout arrangements for prior
advances, capital expenditures and/or project acquisition
costs?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
5) Letter of credit fees? N/A
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
f. Were distributions made to, or on behalf of, the owners limited to Yes
A-1 those authorized by the Regulatory Agreement or the distributions
in accordance with prior written approval of CDA while the project was
in a "surplus cash" position?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
NOTE
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1) Distribution to nonprofit mortgagor entities or principals may N/A
not be permitted by the Regulatory Agreement.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2) The use of rental proceeds to pay for costs included in the N/A
mortgagor's costs certification are unauthorized distributions
of project income.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
g. Was surplus cash available for payment on cash flow debt for the
Regulatory Agreement and Note?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
h. Were residual receipts deposited with the mortgagee within 90 days N/A
after the close of the mortgagor's annual accounting period?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
i. Were excess rental collections in Section 236 projects remitted to Yes CF
HUD each month?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
j. Does the mortgagor have a formal collection policy? Yes CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
k. Is the collection policy enforced? Yes CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
l. Do tenant accounts receivable consist exclusively of amounts due Yes
B-1 from other than employees?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
m. Have "write-offs" of tenants' accounts been less than 1% of the Yes B-1
gross rent?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
n. Are accounts receivable other than tenants' receivables composed Yes
B-2 exclusively of amounts due from unrelated persons or firms?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
o. Were there indications that payments for services, supplies or Yes CF
materials were not in excess of amounts normally paid for such
services?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
p. If applicable, were utility allowance payments to residents paid on N/A
a monthly basis?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
4. Management Compensation
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Was compensation to the management agent limited to the amounts Yes 25
prescribed in the management agreement or amendments thereto?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
5. Rents and Occupancy
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Is the gross potential income from apartments equal to or less than Yes 10
that approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. In subsidized projects, are dwelling unit contract rental rates and Yes
CF Fair Market rental rates in Section 236 projects the same as those
approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
6. DHCD/HUD Subsidy Payments (Section 8/RAP Projects Only)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Were the amounts requested from DHCD/HUD adequately supported by Yes B-2
the accounting records?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Were subsidy payments received recorded in the proper accounts? Yes B-2
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
CIRCLE TERRACE ASSOCIATES
LIMITED PARTNERSHIP
HUD PROJECT NO.: 052-44056-LDP
CDA PROJECT NO.: 28.04.0010
DECEMBER 31, 1998
<PAGE>
TABLE OF CONTENTS - CONTINUED
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
PAGE
MORTGAGOR'S CERTIFICATION 6
INDEPENDENT AUDITORS' REPORT 7
FINANCIAL STATEMENTS
BALANCE SHEET 9
STATEMENT OF OPERATIONS 11
STATEMENT OF PARTNERS' EQUITY (DEFICIT) 14
STATEMENT OF CASH FLOWS 15
NOTES TO FINANCIAL STATEMENTS 17
SUPPLEMENTAL INFORMATION
ACCOUNTS AND NOTES RECEIVABLE 29
DELINQUENT TENANT ACCOUNTS RECEIVABLE 29
CONTRIBUTIONS RECEIVABLE 29
MORTGAGE ESCROW DEPOSITS 30
RESERVE FOR REPLACEMENTS 30
RESIDUAL RECEIPTS RESERVE 30
ACCOUNTS PAYABLE 31
ACCRUED EXPENSES 31
LETTERS OF CREDIT 31
LOANS AND NOTES PAYABLE 32
MORTGAGES PAYABLE 32
MORTGAGES PAYABLE FROM SURPLUS CASH 32
UNAUTHORIZED DISTRIBUTIONS OF
PROJECT INCOME TO PARTNERS 32
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES 33
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
RESIDUAL RECEIPTS 34
CHANGES IN FIXED ASSET ACCOUNTS 35
DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS 36
OTHER INFORMATION 38
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL 39
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD AND
DHCD-ASSISTED PROGRAMS 41
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO
FAIR HOUSING AND NON-DISCRIMINATION 43
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
LAWS AND REGULATIONS APPLICABLE TO THE
FINANCIAL STATEMENTS 44
ANNUAL AUDIT QUESTIONNAIRE 45
<PAGE>
December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
- 30 -
MORTGAGOR'S CERTIFICATION
I hereby certify that I have examined the accompanying financial
statements and supplemental data of Circle Terrace Associates Limited
Partnership and, to the best of my knowledge and belief, the same is complete
and accurate.
GENERAL PARTNER
---------------------------------------
Judith Siegel, President Date
Landex of Maryland, Inc. for Cooperative
Associates Limited Partnership as General
Partner of Circle Terrace Limited Partnership
Partnership Employer
Identification Number:
05-0461953
Telephone Number: (703) 516-6690
<PAGE>
MANAGEMENT AGENT'S CERTIFICATION
I hereby certify that I have examined the accompanying financial
statements and supplemental data of Circle Terrace Associates Limited
Partnership and, to the best of my knowledge and belief, the same is complete
and accurate.
MANAGING AGENT
Rental Housing Management
Partnership
---------------------------------------
Eric Richelson Date
David Staley Managing Agent Employer
Property Manager Identification Number:
13-3580730
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the accompanying balance sheet of Circle Terrace
Associates Limited Partnership as of December 31, 1998, and the related
statements of operations, 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.
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 Circle Terrace
Associates Limited Partnership as of December 31, 1998, and the results of its
operations, the changes in partners' equity (deficit) and cash flows for the
year then ended, in conformity with generally accepted accounting principles.
The Housing Assistance Payment contracts covering all 303 units expired
on November 30, 1998 and November 30, 1997. It is uncertain whether HUD will
renew these contracts under terms that are consistent with the successful
operations of the project (see note G).
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 28
through 37 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.
<PAGE>
December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 20, 1999 on our consideration of Circle Terrace Associates Limited
Partnership's internal control and on its compliance with specific requirements
applicable to major HUD and DHCD-assisted programs, fair housing and
non-discrimination, and laws and regulations applicable to the financial
statements.
Bethesda, Maryland Federal Employer
January 20, 1999 Identification Number:
52-1088612
Audit Principal: Lester Kanis
<PAGE>
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
CURRENT ASSETS
1120 Cash - Operstions $ 232,306
1125 Cash - Entity 80,337
1130 Tenant accounts receivable 15,651
1135 Accounts receivable - HUD 160,117
1140 Accounts and notes receivable - operations 9,477
1145 Accounts and notes receivable - entity 860
1200 Miscellaneous prepaid expenses 78,039
-------------------
Total current assets 576,787
DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant deposits 42,824
RESTRICITAD DEPOSITS AND FUNDED RESERVES
1310 Escrow deposits 75,274
1320 Reserve for replacements 586,618
1330 Other reserves 233,968
895,860
RENTAL PROPERTY
1410 Land 1,104,269
1420 Buildings 15,271,257
1440 Building and equipment - portable 31,654
1460 Furnishings 8,378
1480 motor vehicles 18,340
1490 Miscellaneous fixed assets 86,167
------
16,520,065
1495 Less accumulated depreciation 3,501,702
---------
13,018,363
OTHERASSETS
1520 Intangible assets, net of accumulated
amortization of $99,195 207,725
14,741,559
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
2110 Accounts payable 77,228
2121 Accrued payroll taxes payable 178
2123 Accrued management fee payable 22,482
2131 Accrued interest payable - first mortgage 2,393
2132 Accrued interest payable - second mortgage 22,275
2134 Accrued interest payable - other loans/notes 7,603
2160 Notes payable, current maturities 6,257
2170 Mortgage payable - first mortgage, current maturities 99,190
2172 Mortgage payable - second mortgage, current maturities 152,678
2174 Other loans/noted payable, current maturities 46,346
2190 Miscellaneous current liabilities 21,144
2210 Prepaid revenue 2,791
Total Current Liabilities 460,565
DEPOSITS LIABILITY
2191 Tenant deposits held in trust(contra) 39,580
LONG TERM LIABILITIES
2133 Accrued interest payable -
other loans/notes(surplus cash) 103,030
2310 Notes payable, net of current maturities 5,648
2311 Notes payable - surplus cash 550,000
2320 Mortgage payable - first mortgage,
net of current maturities 3,404,737
2322 Mortgage payable - second mortgage,
net of current maturities 3,188,620
2324 Other loans/notes payable,
net of current maturities 1,981,365
9,233,400
CONTINGENCY -
3130 PARTNERS' EQUITY (DEFICIT) 5,008,014
$ 14,741,559
RENTAL REVENUE
5120 Rent revenue - gross potential $ 335,564
5121 Tenant assistance payments 1,958,686
---------
Total rental revenue $2,294,250
VACANCIES
5220 Apartments (13,871)
5250 Rental concessions (2,830)
-------
Total vacancies (16,701)
Net rental revenue 2,277,549
FINANCIAL REVENUE
5410 Financial revenue - project operations 8,469
5440 Revenue from investment - replacement reserve 15,228
------
Total financial revenue 23,697
OTHER REVENUE
5910 Laundry and vending 12,848
5920 Tenant charges 5,917
5990 Miscellaneous revenue 1,575
-----
Total other revenue 20,340
Total revenue 2,321,586
<PAGE>
ADMINISTRATIVE EXPENSES
6210 Advertising and marketing 3,199
6250 Other renting expenses 1,749
6310 Office salaries 136,160
6311Office expenses 49,522
6320 Management fee 130,164
6331 Administrative rent free unit 5,661
6340 Legal expense - project 15,346
6350 Auditing expense 9,600
6351 Bookkeeping fees/accounting service 16,368
6370 Bad debts 10,697
6390 Miscellaneous administrative expenses 43,940
------
Total administrative expenses 422,406
UTILITIES EXPENSE
6450 Electricity 28,145
6451 Water 25,465
6452 Gas 87,218
Total utility expense 140,828
OPERATING AND MAINTENANCE EXPENSES
6510 Payroll 142,202
6515 Supplies 35,595
6520 Contracts 88,217
6525 Garbage and trash removal 32,202
6530 Security payroll/contract 139,709
6546 Heating/cooling repairs and maintenance 13,319
6548 Snow removal 571
6570 Vehicle and maintenance equipment operation and repairs26,639
6590 Miscellaneous operating and maintenance expenses 70,148
------
Total operating and maintenance expenses 548,602
TAXES AND INSURANCE
6710 Real estate taxes 126,078
6711 payroll taxes 26,199
6720 Property and liability insurance 83,542
6723 Heath insurance and other employee benefits 21,323
------
Total taxes and insurance 257,142
FINANCIAL EXPENSES
6820 Interest on mortgage payable 395,638
6830 Interest on notes payable - long-term 1,317
6850 Mortgage insurance premium/service charge 43,848
------
Total financial expenses 440,803
DEPRECIATION AND AMORTIZATION
6600 Depreciation expense 571,976
6610 Amortization expense 14,004
------
Total depreciation and amortization 585,980
CORPORATE OR MORTGAGOR ENTITY REVENUE AND EXPENSES
7140 Interest income (12,945)
7141 Interest on notes payable 22,000
7190 Other (revenue)/expenses 870
---
Total corporate or mortgagor entity revenue and expenses 9,925
-----
Total expenses 2,405,686
Net income (loss) (84,100)
See notes to financial statements
<PAGE>
General partners Limited partners Total
Partners' equity (deficit),
December 31, 1997 $217,228 $4,874,886 $5,092,114
Net income (loss) (841) (83,259) (84,100)
----- ------- --------
Partners' equity (deficit),
December 31, 1998 $ 216,387 $ 4,791,627 $ 5,008,014
--------- ----------- -----------
See notes to financial statements
<PAGE>
Cash flows from operating activities
Rental receipts $ 2,277,573
Interest receipts 23,697
Other operating receipts 10,003
Administrative expenses paid (129,954)
Management fees paid (130,164)
Utilities paid (140,167)
Salaries and wages paid (418,071)
Operating and maintenance paid (222,341)
Real estate taxes paid (216,629)
Property insurance paid (74,523)
Net tenant security deposits received (paid) 3,150
Other operating expenses paid (27,240)
Interest paid on mortgages (397,965)
Interest paid on notes (1,482)
Mortgage insurance premium paid (43,261)
Entity expenses received (paid)
Interest income 12,945
Professional fees (870)
Interest expense (22,000)
--------
Net cash provided by (used in) operating activities 502,701
Cash flows from investing activities
Net withdrawals from mortgage escrows 33,718
Net deposits to reserve for replacements (99,768)
Net deposits to other reserves (109,975)
Net purchases of fixed assets (121,929)
---------
Net cash provided by (used in) investing activities (297,954)
Cash flow from financing activities
Mortgage principal payments (284,552)
---------
Net cash provided by (used in) financing activities (284,552)
---------
NET INCREASE (DECREASE) IN CASH (79,805)
Cash, beginning 392,447
-------
Cash, end $ 312,642
---------------
See notes to financial statements
<PAGE>
Reconciliation of net income (loss) to net
Cash provided by (used in) operating activities
Net income (loss) $ (84,100)
-------------
Adjustments to reconcile net income (loss) to net
Cash provided by (used in) operating activities
Depreciation 571,976
Amortization 14,004
Changes in asset and liability accounts
(Increase) decrease in assets
Tenant account receivable 3,929
Miscellaneous prepaid expenses 10,195
Tenant security deposits funded (1,990)
Increase (decrease) in liabilities
Accounts payable 65,069
Accrued liabilities (81,146)
Accrued interest payable (2,492)
Tenant security deposits held in trust 5,140
Prepaid revenue 2,116
-----
Total adjustments 586,801
Net cash provided by (used in) operating activities $ 502,701
---------
<PAGE>
NOTE A - ORGANIZATION
Circle Terrace Associates Limited Partnership was organized under the laws
of the State of Maryland on March 28, 1990, for the purpose of acquiring and
operating a rental housing project under Section 236 of the National Housing
Act. The project consists of 303 units located in Lansdowne, Maryland, and
is currently operating under the name of Circle Terrace Apartments.
Cash distributions are limited by agreements between the partnership and the
United States Department of Housing and Urban Development (HUD) to an annual
amount of $30,340 per year to the extent of surplus cash as defined by HUD.
Undistributed amounts are cumulative and may be distributed in subsequent
years if future operations provide surplus cash in excess of current
requirements.
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. In addition, Circle
Terrace Associates Limited Partnership has executed an Extended Low-income
Housing Agreement/Land Deed Restriction/Extended Use Commitment which
requires the utilization of the project pursuant to Section 42 for a minimum
of 30 years, even after the disposition of the project by the partnership.
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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Rental Property
Rental property is 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-year
life. Personal property is recorded at cost and is depreciated over its
estimated service life of five to seven years using accelerated methods.
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 operations.
Intangible Assets and Amortization
Mortgage costs are amortized over the term of the respective loan using the
effective interest method.
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 upon such
determination.
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.
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.
<PAGE>
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
SFAS No. 121
The partnership has implemented Statement of Financial Accounting Standards
No. 121 - Accounting for the Impairment of Long-Lives Assets which requires
the partnership under certain circumstances to receive long-lived assets to
determine if the carrying value exceeds the fair value. If the carrying
value exceeds the fair value then recorded amounts of the assets will be
reduced to their fair value.
NOTE C - MORTGAGES PAYABLE
First Mortgage
The partnership is obligated under the terms of a mortgage note which is
insured by the Federal Housing Administration (FHA) and bears interest at
the rate of 7%, less a varying interest subsidy in the current amount of
$18,052 per month. Monthly payments of principal and interest in the reduced
amount of $10,564 are due through maturity in February 2017. The total
interest subsidy of $216,628 is reflected as a reduction of interest
expense. Principal and accrued interest due at December 31, 1998 are
$3,503,927 and $2,393, respectively.
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.
Second Mortgage
The partnership is obligated under the terms of a mortgage note in the
original amount of $4,000,000, which is insured by the Maryland Housing Fund
(MHF) payable to Crestar of Richmond, Virginia, Inc. The note bears interest
at the rate of 8%. Monthly payments of principal and interest in the amount
of $34,645 are due through maturity in December 2011. Principal and accrued
interest due at December 31, 1998 are $3,341,298 and $22,275, respectively.
<PAGE>
NOTE C - MORTGAGES PAYABLE (Continued)
Third Mortgage
The partnership is obligated under the terms of a mortgage note in the
original amount of $2,227,330 payable to the Department of Housing and
Community Development of the State of Maryland (CDA). The note bears
interest at 4.5%. Monthly payments of principal and interest of $11,373 are
due through July 1, 2023. Principal and accrued interest due at December 31,
1998 are $2,027,711 and $7,603, respectively.
The liability of the partnership under the terms of all of these mortgages
is limited to the underlying value of the real estate collateral plus
deposits held by the lenders.
Aggregate annual maturities of mortgages payable for each of the next five
years and thereafter are as follows:
--------------------------------------------- -- ----------------
December 31, 1999 $ 298,214
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2000 318,873
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2001 343,827
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2002 369,264
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2003 396,638
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
Thereafter 7,146,120
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
$ 8,872,936
--------------------------------------------- -- ----------------
NOTE D - NOTES PAYABLE
The partnership is obligated under the terms of an unsecured promissory note
payable to Baltimore County, Maryland. Interest accrues at the rate of 4%.
Annual interest payments commenced January 1, 1996. Annual payments of
principal will be due commencing January 1, 2000 and will extend for 30
years through maturity on December 31, 2030. Payments may be made only to
the extent of surplus cash as defined by HUD. Principal and accrued interest
due at December 31, 1998 are $550,000 and $103,030, respectively.
<PAGE>
NOTE D - NOTES PAYABLE (Continued)
The partnership is obligated under the terms of a note payable for the
purchase of a truck. The note bears interest at 8.75% and requires monthly
payments of principal and interest of $588 through maturity in October 2000.
The amount payable at December 31, 1998 is $11,905.
Aggregate annual maturities of notes payable for each of the next five years
and thereafter are as follows:
--------------------------------------------- -- ----------------
December 31, 1999 $ 6,257
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2000 5,648
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2001 -
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2002 -
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2003 -
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
Thereafter 550,000
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
$ 561,905
--------------------------------------------- -- ----------------
NOTE E - RELATED PARTY TRANSACTIONS
Working Capital Advances
The general partner is obligated to make working capital advances to the
partnership as needed, up to an aggregate of $100,000. Such advances are
noninterest bearing and can be repaid out of available net cash flow as
defined in the partnership agreement. No such advances were required as of
December 31, 1998.
In the event cash flow does not provide sufficient funds to pay the investor
limited partner its minimum distribution, such amount required will be
advanced by the general partner and will be considered a project expense
loan to be paid from surplus cash after required distributions as defined in
the partnership agreement.
Insurance
The sole shareholder of an affiliate of the general partner provided debt
financing for the capitalization of LaMere Associates, Inc. (LaMere). In
connection with such debt financing, the shareholder received 20% of the
stock of LaMere. LaMere was paid premiums in connection with the following
insurance coverage provided to the partnership: property and liability,
fidelity bond and auto. In connection with such insurance coverage, the
partnership incurred $83,542 in premiums for the year ended December 31,
1998.
<PAGE>
NOTE E - RELATED PARTY TRANSACTIONS (Continued)
Shared Project Payroll Costs
The site superintendent was shared with another project in the area and
payroll costs were allocated based on time spent on each project.
Computer Services
In accordance with HUD Regulations 4381.5 Rev-2, Paragraph 6.38, the
partnership uses the services of a computer consultant company to provide
the following services: purchase and install personal computers and the
related equipment and software for the project's rental office; provide
training and technical support, and consult on software upgrades. Dynamic
Information Services, Inc. (DIS), which is owned by a relative of an officer
of the management company, is a licensed representative of Project Data
Systems, Inc., a nationally known provider of computer system software for
the subsidized housing industry. DIS derives 40% of its consulting service
revenues from third-party clients not affiliated with the management
company. In 1998, the partnership paid DIS $1,710 for technical support and
training services based on billable hours.
Laundry Lease
The partnership has entered into a lease agreement with Moonbeam Equipment
and Communications, LLC ("Moonbeam"), an affiliate of the general partner
and management agent, which permits Moonbeam to install coin operated
laundry equipment for use by the tenants.
The partnership retains 55% of the income on the coin operated equipment as
reimbursement of utility and janitorial expenses incurred by the partnership
to maintain the common area laundry facilities; the balance is remitted to
Moonbeam. The lease agreement expires in January 2023 and, among other
terms, states that expenses relating to the maintenance and repair of the
equipment are the obligation of Moonbeam.
Moonbeam earned $9,591 from the proceeds of the laundry room collections
during 1998. As of December 31, 1998, Moonbeam owes the partnership $860 for
maintenance expenses relating to installed equipment, which was paid
subsequent to December 31, 1998.
<PAGE>
NOTE F - MANAGEMENT FEE
The property is managed by an affiliate of the general partner. The
management fee is based on a charge of $35.80 per unit per month. The
management agent also receives fees of $4.50 per unit per month for
accounting services provided to the partnership. Management and accounting
fees charged to operations during 1998 were $130,164 and $16,368,
respectively, of which $22,482 of management fee is payable at December 31,
1998.
NOTE G - HOUSING ASSISTANCE PAYMENT (HAP) CONTRACT AGREEMENTS
HUD has contracted with the partnership under the United States Housing Act
of 1937 to make housing assistance payments to the partnership on behalf of
qualified tenants. The terms of the contract covering 142 units expired on
November 30, 1998 and the contract covering 161 units expired on November
30, 1997. The contracts do not have renewal options.
Under the Multifamily Assisted Housing and Reform and Affordability Act
(MAHRAA) of 1997, Congress set forth the legislation for a permanent
"mark-to-market" program and provided for permanent authority for the
renewal of Section 8 contracts. On September 11, 1998, HUD issued an interim
rule to provide clarification of the implementation of the mark-to-market
program. Owners with Section 8 contracts expiring after September 30, 1998
are subject to the provisions of MAHRAA. As such, the partnership may choose
to either opt out of the Section 8 program, request mortgage restructuring
and renewal of the Section 8 contract, or request renewal of the Section 8
contract without mortgage restructuring. Each option contains a specific set
of rules and procedures that must be followed in order to comply with the
requirements of MAHRAA. As of the date of the report, the partnership has
extended both contracts from October 1, 1998 through September 30, 1999.
It is uncertain whether HUD will renew these contracts under terms that are
consistent with the successful operation of the project. The project is
economically dependent upon the rental income received from both of its
agreements. If HUD were not to extend either one, the project's operating
cash flow would be adversely affected.
<PAGE>
NOTE H - PARTNERS' CAPITAL CONTRIBUTIONS
The partnership has one general partner - Cooperative Associates Limited
Partnership and two limited partners - SLP, Inc. (the special limited
partner) and Boston Financial Qualified Housing Tax Credits L.P. V, a
Limited Partnership (the investor limited partner). The general partner has
made capital contributions of $413,562. SLP, Inc. is required to make a
capital contribution of $10. The investor limited partner has made capital
contributions totaling $5,615,234.
NOTE I - CONTRACT WITH BALTIMORE COUNTY (IN LIEU OF TAXES)
The partnership has entered into an agreement with Baltimore County,
Maryland, whereby the partnership is to pay the County $162.50 per apartment
unit per year (the minimum payment) in lieu of real estate taxes. To the
extent there is net cash flow, as defined in the agreement, such amount is
to be applied toward additional payments. The minimum payment has been
increased 10% annually. The amount incurred during 1998 under the terms of
this agreement was $58,329. This amount is included with other city and
county real estate taxes in the statement of operations. The County has
advised the partnership that $239,359 is due for additional taxes and
interest applicable to 1992 through 1995 and has placed a lien on the
property. The partnership believes that such payments are not due in
accordance with the P.I.L.O.T. agreement. Such amount has not been recorded
until this matter is resolved.
NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
All profits and losses are allocated 1% to the general partner and 99% to
the investor limited partner.
Cash flow, as defined in the partnership agreement, is to be distributed as
follows:
1. 99% to the investor limited partner and 1% to the general partner until
the investor limited partner has received distributions, in the
aggregate, equal to the cumulative priority distribution.
2. To the repayment of any project expense loans.
<PAGE>
NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)
3. To the general partner until it has received cumulatively an amount
equal to the cumulative amount paid to the investor limited partner as
defined above.
4. 50% to the general partner and 50% to the investor limited partner.
Gain, if any, from a sale, exchange or other disposition 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 each partner until the positive capital account balance is equal to
the amount of cash available for distribution as a result of the
transaction, as defined in the partnership agreement.
Loss from a sale is allocable as follows:
1. To the partners in proportion to their positive capital account
balances. In the event the loss is less than the sum of the positive
capital accounts, the loss is to be allocated such that the resulting
capital account balance is as near as possible to the amount of cash to
be distributed as a result of the transaction.
2. 1% to the general partner and 99% to the investor limited partner.
NOTE K - TAXABLE LOSS
A reconciliation of the financial statement net loss to the income tax net
loss of the partnership for the year ended December 31, 1998 is as follows:
Financial statement net loss $ (84,100)
Excess depreciation for income tax purposes (13,329)
Prepaid rent 2,791
Income net tax loss $ (94,638)
==================
<PAGE>
NOTE L - INVESTMENT IN REAL ESTATE
A reconciliation of the basis of the investment in real estate for financial
reporting purposes to that for income tax purposes as of December 31, 1998
is as follows:
Investment in real estate for financial reporting $ 13,018,363
Excess accumulated depreciation for income tax purposes (53,042)
Interest expense portion of subsidy capitalized for
income tax purposes 177,317
Investment in real estate for income tax purposes $ 13,142,638
==================
NOTE M - CONCENTRATION OF CREDIT RISK
The partnership maintains its cash balances and escrow in several banks. The
balances are insured by the Federal Deposit Insurance Corporation (FDIC) up
to $100,000 per bank. As of December 31, 1998, the uninsured portion of the
cash balances held at two banks was $285,780.
NOTE N - CONTINGENCY
The partnership'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 capital contributed
by the investor limited partner.
Baltimore County has advised the partnership that $239,359 is due for
additional taxes and interest applicable to 1992 through 1995 and has placed
a lien on the property. The partnership believes that such payments are not
due in accordance with the P.I.L.O.T agreement. Such amount has not been
recorded until this matter is resolved.
<PAGE>
NOTE O - YEAR 2000 ISSUE (UNAUDITED)
The Managing Agent/General Partner has assessed the partnership's exposure
to date sensitive computer software programs that may not be operative
subsequent to 1999 and has implemented a requisite course of action to
minimize Year 2000 risk and ensure that neither significant costs nor
disruption of normal business operations are encountered. However, because
there is no guarantee that all systems of outside vendors or other entities
affecting the partnership's operation will be Year 2000 compliant, the
partnership remains susceptible to consequences of the Year 2000 Issue.
<PAGE>
SUPPLEMENTAL INFORMATION
SUPPORTING DATA REQUIRED BY HUD AND CDA
<PAGE>
SUPPLEMENTAL INFORMATION
SUPPORTING DATA REQUIRED BY HUD AND CDA
December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
- 54 -
ACCOUNTS AND NOTES RECEIVABLE (OTHER THAN FROM REGULAR TENANTS)
<TABLE>
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
Name of borrower Original date Terms Original amount Balance due
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
U.S. Department of Housing and Oct. - Nov. 1998 Demand $ 160,117 $ 160,117
Urban Development
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Travelers Sept. - Oct. 1998 Demand $ 28,312 $ 9,477
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Moonbeam Dec. 1998 Demand $ 860 $ 860
---------------------------------------------------------------------------------------------------------------
DELINQUENT TENANT ACCOUNTS RECEIVABLE
---------------------------------------------------------------------------------------------------------------
Number of Amount
tenants past due
----------------------------------
----------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent 30 days 41 $ 6,775
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent 31-60 days 9 1,356
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent 61-90 days 13 2,131
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Delinquent over 90 days 19 5,389
----------------------------------------------------------------------------- --------------------
----------------------------------------------------------------------------- --------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
$ 15,651
----------------------------------------------------------------------------- --------------------
CONTRIBUTIONS RECEIVABLE
---------------------------------------------------------------------------------------------------------------
SLP, Inc. $ 10
---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SUPPLEMENTAL INFORMATION - CONTINUED
SUPPORTING DATA REQUIRED BY HUD AND CDA
December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
MORTGAGE ESCROW DEPOSITS
--------------------------------------------------------------------------
Estimated amount required as of December 31, 1998, for future payment of:
---
---
City, state and county taxes (P.I.L.O.T) $ 38,632
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Property insurance 31,136
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Mortgage insurance 8,826
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
78,594
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Amount on deposit in deficient of estimated requirements (3,320)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Total confirmed by mortgagee $ 75,274
--------------------------------------------------------------------------
RESERVE FOR REPLACEMENTS
In accordance with the provisions of the regulatory agreement, restricted
cash is held by Mellon Mortgage Company to be used for replacement of
property with the approval of HUD as follows:
----------------------------------------------------------------------
Balance at December 31, 1997 $ 486,850
----------------------------------------------------------------------
----------------------------------------------------------------------
Monthly deposits
----------------------------------------------------------------------
----------------------------------------------------------------------
$7,045 x 12 84,540
----------------------------------------------------------------------
----------------------------------------------------------------------
Interest earned 15,228
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Balance at December 31, 1998, confirmed by mortgagee $ 586,618
----------------------------------------------------------------------
RESIDUAL RECEIPTS RESERVE
NONE
<PAGE>
ACCOUNTS PAYABLE
---------------------------------------------------------------------------
Payable within 30 days $ 77,228
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Payable within 31-60 days -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Payable within 61-90 days -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Payable more than 90 days -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Balance $ 77,228
---------------------------------------------------------------------------
ACCRUED EXPENSES
<TABLE>
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
Description Basis for Owed to Date due Amount accrued
accrual
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Payroll taxes 12/98 F.W.I./FICA 1/99 $ 178
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Management fee 12/98 Rental Housing 1/99 $ 22,482
Management Partnership
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Interest - first mortgage 12/98 HUD 1/99 $ 2,393
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Interest - second mortgage 12/98 Crestar Bank 1/99 $ 22,275
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Interest - Baltimore County note 12/98 Baltimore County Surplus cash $ 103,030
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Interest - third mortgage 12/98 State of Maryland 1/99 $ 7,603
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Audit fee 12/98 Reznick, Fedder and 2/99 $ 3,536
Silverman
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Water and sewer 12/98 City of Baltimore 2/99 $ 6,392
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Utility reimbursement 12/98 Tenants 1/99 $ 10,821
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Payroll 12/98 Employees 1/99 $ 395
----------------------------------------------------------------------------------------------------------------
</TABLE>
LETTERS OF CREDIT
NONE
<PAGE>
LOANS AND NOTES PAYABLE (OTHER THAN MORTGAGES)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
Creditor Interest Collateral Date incurred Terms Original amount Balance due
rate
----------------------------------------------------------------------- ----------------- -----------------
----------------------------------------------------------------------- ----------------- -----------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Baltimore 4.0% Unsecured 11/90 40 yrs $ 550,000 $ 550,000
County,
Maryland
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
GMAC 8.75% Truck 11/97 3 yrs $ 18,096 $ 11,905
---------------------------------------------------------------------------------------------------------------
MORTGAGES PAYABLE
---------------------------------------------------------------------------------------------------------------
Creditor Terms Original amount Balance due
------------------------------------------------------------------------ ------------------ -----------------
------------------------------------------------------------------------ ------------------ -----------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
HUD $10,564 per month $ 4,034,207 $ 3,503,927
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------- ----
--------------------------------------------------------------------------- ----
Crestar of Richmond, Virginia, Inc. $34,645 per month $ 4,000,000 $ 3,341,298
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------- ----
--------------------------------------------------------------------------- ----
Department of Housing and Community $11,373 per month $ 2,227,330 $ 2,027,711
Development of the State of
Maryland
---------------------------------------------------------------------------------------------------------------
</TABLE>
MORTGAGES PAYABLE FROM SURPLUS CASH
NONE
UNAUTHORIZED DISTRIBUTIONS OF PROJECT INCOME TO PARTNERS
NONE
<PAGE>
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES
<TABLE>
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
Company name Services rendered Amount paid Amount payable
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Rental Housing Management $ 130,164 $ 22,482
Partnership
Property management
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Rental Housing Management $ 16,368 $ -
Partnership
Accounting fees
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
LaMere Associates, Inc. $ 83,542 $ -
Insurance coverage
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Dynamic Information Equipment, software, technical $ 1,710 $ -
Services, Inc. support and training services
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Moonsbeam Equipment and Laundry equipment $ 8,731 $ -
Communications, LLC
--------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SUPPLEMENTAL INFORMATION - CONTINUED
SUPPORTING DATA REQUIRED BY HUD AND CDA
Year ended December 31, 1998
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS
-------------------------------------------------------------------------------
Part A - Compute Surplus Cash
---------------------
Cash (Accounts 1120, 1170 and 1191 less 2105) $ 275,130
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Tenant subsidy vouchers due for period covered by financial statements 160,117
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other (describe in detail) -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Total cash 435,247
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Accrued mortgage interest payable 32,271
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Delinquent mortgage principal payments -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Delinquent deposits to reserve for replacements -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Accounts payable (due within 30 days) 77,228
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Loans and notes payable (due within 30 days) -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Deficient tax, insurance or MIP escrow deposits 3,320
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Accrued expenses (not escrowed) 43,804
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prepaid revenue (Account 2210) 2,791
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Tenant security deposits liability (Account 2191) 39,580
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other current obligations (describe in detail) -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Contracted maintenance $ 208,950
-------------------------------------------------------- ----
------------------------------------------------------------- ----
Required maintenance 270,360
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Less total current obligations 469,354
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Surplus cash (deficiency) $ (34,107)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
------------------------------------------------------------------------------
Part B - Compute Distributions to Owners and Required Deposit to
Residual Receipts
Surplus cash $ NONE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited dividend projects
---------------------
---------------------
Annual distribution earned during fiscal period covered by the 30,340
statements
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distribution accrued and unpaid as of the end of the prior fiscal period422,419
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distributions and entity expenses or paid during fiscal period covered (22,000)
by the statements
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Amount remaining as distribution earned but unpaid 430,759
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Amount available for distribution during next fiscal period $ -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Deposit due residual receipts reserve $ NONE
-------------------------------------------------------------------------------
Facsimile form HUD-93486
<PAGE>
CHANGES IN FIXED ASSET ACCOUNTS
<TABLE>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
Assets
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Balance 12/31/97 Additions Deductions Balance 12/31/98
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Land $ 1,104,269 $ - $ - $ 1,104,269
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Buildings 15,248,985 22,272 - 15,271,257
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Building equipment - portable 18,164 13,490 - 31,654
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Furnishings 8,378 - - 8,378
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Motor vehicles 18,340 - 18,340
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Miscellaneous fixed assets - 86,167 - 86,167
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
$ 16,398,136 $ 121,929 $ - $ 16,520,065
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Accumulated depreciation $ 2,929,726 $ 571,976 $ - $ 3,501,702
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
------------------------------------ ---- ---- ----
------------------------------------ ---- ---- ----
Total net book value $ 13,018,363
------------------------------------ ---- ---- ---------------------
</TABLE>
Fixed Asset Detail
Additions to Buildings Account
--------------------------------------------------------------------
Item and quantity Amount
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Railings $ 5,304
--------------------------------------------------------------------
Lighting fixtures 9,373
--------------------------------------------------------------------
Drains 7,595
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
$ 22,272
--------------------------------------------------------------------
<PAGE>
CHANGES IN FIXED ASSET ACCOUNTS (Continued)
Fixed Asset Detail (Continued)
Additions to Building Equipment - Portable Account
--------------------------------------------------------------------
Item and quantity Amount
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Security camera equipment $ 5,750
--------------------------------------------------------------------
--------------------------------------------------------------------
Computer cabinets 7,740
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
$ 13,490
--------------------------------------------------------------------
Additions to Miscellaneous Fixed Assets Account
--------------------------------------------------------------------
Item and quantity Amount
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
Landscaping shrubs, trees $ 33,944
--------------------------------------------------------------------
--------------------------------------------------------------------
Sidewalk replacement 52,223
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
$ 86,167
--------------------------------------------------------------------
DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS
MISCELLANEOUS ADMINISTRATIVE EXPENSES (ACCOUNT NO. 6390)
-----------------------------------------------------------------------
Payroll preparation $ 1,668
-----------------------------------------------------------------------
-----------------------------------------------------------------------
License and fees 6,516
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Travel 3,129
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Resident services 19,000
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Miscellaneous 13,627
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
$ 43,940
-----------------------------------------------------------------------
<PAGE>
DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS (Continued)
OTHER OPERATING AND MAINTENANCE EXPENSES (ACCOUNT NO. 6590)
-----------------------------------------------------------------------
Extraordinary repairs $ 2,566
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Alterations and improvements 29,230
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Appliances 11,035
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Carpeting 26,017
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Additional maintenance 1,300
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
$ 70,148
-----------------------------------------------------------------------
<PAGE>
OTHER INFORMATION
---------------------------------------------------------------------------
Total mortgage principal payments required during the audit year
(12 monthly payments). Applies to all direct loans and HUD-held and
fully-insured mortgages. Any HUD-approved second mortgages are
included. $284,552
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total of 12 monthly deposits in the audit year made to the replacement
reserve account, as required by the regulatory agreement, even if payments
are temporarily suspended or reduced. $84,540
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
----------------------------------------------------------------------------
Replacement reserve and residual receipts reserve releases which are
included as expense items on the statement of operations. $ -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Project improvement reserve releases under the flexible subsidy program
which are included as expense items on the statement of operations. $ -
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Mortgage payable note detail (Section 236 only)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Interest reduction payments from subsidy $ 216,628
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Related party transactions detail:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Entity name Amount paid
---------------------------------------------------------------------------
---------------------------------------------------------------------------
----------------------
----------------------
LaMere Associates, Inc. $ 83,542
--------------------------------------
-------------------------------------
----------------------
----------------------
Dynamic Information Systems, Inc. $ 1,710
--------------------------------------
-------------------------------------
----------------------
----------------------
Rental Housing Management Partnership $ 16,368
-------------------------------------
--------------------------------------
----------------------
----------------------
Rental Housing Management Partnership $ 130,164
------------------------------------
--------------------------------------
----------------------
----------------------
Moonbeam Equipment and Communications, LLC $ 8,731
---------------------------------
<PAGE>
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1998, and have
issued our report thereon dated January 20, 1999. We have also audited Circle
Terrace Associates Limited Partnership's compliance with specific requirements
applicable to major HUD-assisted and DHCD-assisted programs and have issued our
report thereon dated January 20, 1999.
We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, the "Consolidated Audit Guide for Audits of HUD Programs"
(the Guide), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General and the Audit Guide issued by the Maryland
Department of Housing and Community Development. Those standards and the two
guides require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement and about whether Circle Terrace Associates Limited Partnership
complied with laws and regulations, noncompliance with which would be material
to major HUD-assisted and DHCD-assisted programs.
The management of the partnership is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. The objectives of internal control are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition, that transactions are executed in
accordance with management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally accepted
accounting principles, and that HUD-assisted and DHCD-assisted programs are
managed in compliance with applicable laws and regulations. Because of inherent
limitations in internal control, errors, fraud or instances of noncompliance may
nevertheless occur and not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that procedures may
become inadequate because of changes in conditions or that the effectiveness of
the design of controls may deteriorate.
<PAGE>
In planning and performing our audits of the partnership for the year
ended December 31, 1998, we obtained an understanding of the design of the
relevant controls and determined whether they have been placed in operation, and
we assessed control risk in order to determine our auditing procedures for the
purpose of expressing our opinions on the partnership's financial statements and
on its compliance with specific requirements applicable to major HUD-assisted
and DHCD-assisted programs and to report on internal control in accordance with
the provisions of the Guide and not to provide any assurance on internal
control.
We performed tests of controls, as required by the Guide, to evaluate
the effectiveness of the design and operation of controls that we considered
relevant to preventing or detecting material noncompliance with specific
requirements that are applicable to the partnership's HUD-assisted and
DHCD-assisted programs. Our procedures were less in scope than would be
necessary to render an opinion on internal control. Accordingly, we do not
express such an opinion.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or fraud in amounts that would be material in
relation to the financial statements or that noncompliance with laws and
regulations that would be material to a HUD-assisted or DHCD-assisted program
may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters involving
internal control and its operation that we consider to be material weaknesses as
defined above.
This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban Development and the Maryland Department of Housing and Community
Development and is not intended to be and should not be used by anyone other
than these specified parties.
Bethesda, Maryland
January 20, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT ON
COMPLIANCE WITH SPECIFIC REQUIREMENTS
APPLICABLE TO MAJOR HUD AND DHCD-ASSISTED PROGRAMS
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1998, and have
issued our report thereon dated January 20, 1999.
We have also audited Circle Terrace Associates Limited Partnership's
compliance with specific program requirements governing federal financial
reports; mortgage status; replacement reserve; residual receipts; security
deposits; cash receipts and disbursements; distributions to owners; tenant
application, eligibility, and recertification; and management functions that are
applicable to its major HUD-assisted and DHCD-assisted programs for the year
ended December 31, 1998. The management of Circle Terrace Associates Limited
Partnership is responsible for compliance with those requirements. Our
responsibility is to express an opinion on compliance with those requirements
based on our audit.
We conducted our audit of compliance with specific program requirements
in accordance with generally accepted auditing standards, Government Auditing
Standards, issued by the Comptroller General of the United States, the
"Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by the
U.S. Department of Housing and Urban Development, Office of the Inspector
General and the Audit Guide issued by the Maryland Department of Housing and
Community Development. Those standards and the two guides require that we plan
and perform the audit to obtain reasonable assurance about whether material
noncompliance with the requirements referred to above occurred. An audit
includes examining, on a test basis, evidence about Circle Terrace Associates
Limited Partnership's compliance with those requirements. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, Circle Terrace Associates Limited Partnership complied,
in all material respects, with the specific program requirements that are
applicable to its major HUD-assisted and DHCD-assisted programs for the year
ended December 31, 1998.
<PAGE>
This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban Development and the Maryland Department of Housing and Community
Development and is not intended to be and should not be used by anyone other
than these specified parties.
Bethesda, Maryland
January 20, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO
FAIR HOUSING AND NON-DISCRIMINATION
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1998, and have
issued our report thereon dated January 20, 1999.
We have applied procedures to test Circle Terrace Associates Limited
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements applicable to its HUD-assisted and DHCD-assisted programs for the
year ended December 31, 1998.
Our procedures were limited to the applicable procedures described in
the "Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by
the U.S. Department of Housing and Urban Development, Office of the Inspector
General. Our procedures were substantially less in scope than an audit, the
objective of which is the expression of an opinion on Circle Terrace Associates
Limited Partnership's compliance with the Fair Housing and Non-Discrimination
requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under the Guide.
This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban Development and the Maryland Department of Housing and Community
Development and is not intended to be and should not be used by anyone other
than these specified parties.
Bethesda, Maryland
January 20, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
WITH LAWS AND REGULATIONS APPLICABLE
TO THE FINANCIAL STATEMENTS
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the financial statements of Circle Terrace Associates
Limited Partnership as of and for the year ended December 31, 1998, and have
issued our report thereon dated January 20, 1999.
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.
Compliance with laws, regulations, contracts, and grants applicable to
Circle Terrace Associates Limited Partnership is the responsibility of Circle
Terrace Associates Limited Partnership's management. As part of obtaining
reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of Circle Terrace Associates Limited
Partnership's compliance with certain provisions of laws, regulations,
contracts, and grants. However, the objective of our audit of the financial
statements was not to provide an opinion on overall compliance with such
provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under Government Auditing Standards.
This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban Development and the Maryland Department of Housing and Community
Development and is not intended to be and should not be used by anyone other
than these specified parties.
Bethesda, Maryland
January 20, 1999
<PAGE>
CLIENT NAME Circle Terrace Associates Limited Partnership
PROJECT NUMBER 28.04.0010 ANNUAL AUDIT
QUESTIONNAIRE
FISCAL YEAR END December 31, 1998 CDA PROJECTS
-------------------------------------------------------
Answers to these questions should be based upon a review of procedures
and/or an actual test of transactions. Answers indicative of an adverse
condition must be described in the audit report unless the mortgagor has written
permission from DHCD to deviate from the requirements of law, regulation,
contract or grant.
<TABLE>
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Examination Status Yes, No or N/A Working
(Not Applicable) Paper
Reference
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1. Mortgage Status
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Are payments on all mortgages current? Yes AA-1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 1 Yes AA-2
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 2 Yes AA-4
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 3
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 4
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Position 5
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Has the mortgagor complied with the terms and conditions of the Yes
Regulatory Agreement and/or workout agreements?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2. Books and Records
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Are a complete set of books and records maintained in a Yes CF
satisfactory manner?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Does the mortgagor make frequent postings (at least monthly) to the Yes CF
ledger accounts?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
3. Cash Activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Are the cash receipts deposited in the name of the project in a Yes A-1
bank whose deposits are federally-insured?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Are security deposits kept separate and apart from all other funds Yes
A-10 of the project in an insured institution?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
c. Does the mortgagor keep sufficient funds in the security deposit Yes DD-1
account to equal or exceed the aggregate of all outstanding
obligations to the tenants?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
d. Does the owner or his/her management agent have a fidelity bond in Yes
CF an amount at least equal to the requirements of the Regulatory
Agreement which provides coverage for all employees handling assets of
the project?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
e. Did cash disbursements exclude payments for items listed below:
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1) Legal expenses incurred in the sale of partnership interest? Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2) The fee for the preparation of a partner's, shareholder's or Yes
individual's federal, state or local income tax returns?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
3) Advice to an owner on tax consequences of foreclosure? Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
4) Reimbursement to the owners or affiliates while the mortgage Yes
is in default, or under workout arrangements for prior
advances, capital expenditures and/or project acquisition
costs?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
5) Letter of credit fees? Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
f. Were distributions made to, or on behalf of, the owners limited to
those authorized by the Regulatory Agreement or the distributions in
accordance with prior written approval of CDA while the project was in
a "surplus cash" position?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
NOTE
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1) Distribution to nonprofit mortgagor entities or principals may not
be permitted by the Regulatory Agreement.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2) The use of rental proceeds to pay for costs included in the N/A
mortgagor's costs certification are unauthorized distributions
of project income.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
g. Was surplus cash available for payment on cash flow debt per the N/A
Deed of Trust and Note?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
h. Were residual receipts deposited with the mortgagee within 90 days N/A
after the close of the mortgagor's fiscal year?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
i. Were excess rental collections in Section 236 projects remitted to N/A
HUD each month?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
j. Does the mortgagor have a formal collection policy? Yes HUD-Q
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
k. Is the collection policy enforced? Yes HUD-Q
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
l. Do tenant accounts receivable consist exclusively of amounts due Yes
B-1 from tenants?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
m. Have "write-offs" of tenants' accounts been less than 1% of the Yes 11
gross rents?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
n. Are accounts receivable other than tenants' receivables composed No B-3
exclusively of amounts due from unrelated persons or firms?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
o. Were there indications that payments for services, supplies or Yes
materials were consistent with amounts normally paid for such services?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
p. If applicable, were utility allowance payments to residents paid on Yes Lease test
a monthly basis?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
4. Management Compensation
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Was compensation to the management agent limited to the amounts Yes 20
prescribed in the management agreement as written or amended?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
5. Rents and Occupancy
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Is the gross potential income from apartments equal to or less than Yes 10
that approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. In subsidized projects, are dwelling unit contract rental rates and Yes
Fair Market rental rates in Section 236 projects the same as those
approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
6. DHCD/HUD Subsidy Payments (Section 8/RAP Projects Only)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
a. Were the amounts requested from DHCD/HUD adequately supported by Yes
the accounting records?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
b. Were subsidy payments received recorded in the proper accounts? Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------- ----
--------------------------------------------------------------------------------- ----
7. Ownership Interest
--------------------------------------------------------------------------------- ----
--------------------------------------------------------------------------------- ----
--------------------------------------------------------------------------------- ----
--------------------------------------------------------------------------------- ----
a. Were any changes of stockholders or investors during the current N/A
fiscal year approved by DHCD? (provide a schedule of significant
changes)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------- ----
--------------------------------------------------------------------------------- ----
b. Were any dividends paid or other distribution made to owners or No
stockholders including distribution, purchase or redemption of stock
that is not reflected in the equity statement? (provide a schedule of
payments or distributions)
--------------------------------------------------------------------------------------------------------------------
</TABLE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
CIRCLE TERRACE ASSOCIATES
LIMITED PARTNERSHIP
HUD PROJECT NO.: 052-44056-LDP
CDA PROJECT NO.: 28.04.0010
DECEMBER 31, 1999
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
TABLE OF CONTENTS
MORTGAGOR'S CERTIFICATION
MANAGING AGENT'S CERTIFICATION
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
BALANCE SHEET
STATEMENT OF OPERATIONS
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
STATEMENT OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL INFORMATION
ASSETS AND LIABILITIES DATA
INCOME AND EXPENSE STATEMENT DATA
ACCOUNTS AND NOTES RECEIVABLE
RESERVE FOR REPLACEMENTS
RESIDUAL RECEIPTS RESERVE
LETTERS OF CREDIT
LOANS AND NOTES PAYABLE
MORTGAGES PAYABLE
MORTGAGES PAYABLE FROM SURPLUS CASH
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
TABLE OF CONTENTS - CONTINUED
SUPPLEMENTAL INFORMATION (CONTINUED)
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
RESIDUAL RECEIPTS
CHANGES IN FIXED ASSET ACCOUNTS
DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS
OTHER INFORMATION
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO
MAJOR HUD AND DHCD-ASSISTED PROGRAMS
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND
NON-DISCRIMINATION
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
LAWS AND REGULATIONS APPLICABLE TO THE
FINANCIAL STATEMENTS
ANNUAL AUDIT QUESTIONNAIRE
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
December 31, 1999
MORTGAGOR'S CERTIFICATION
I hereby certify that I have examined the accompanying financial
statements and supplemental data of Circle Terrace Associates Limited
Partnership and, to the best of my knowledge and belief, the same are complete
and accurate.
OFFICER
Peter Siegel, Vice President Date
Landex of Maryland, Inc. for Cooperative
Associates Limited Partnership as General
Partner of Circle Terrace Limited Partnership
Partnership Employer
Identification Number:
05-0461953
Telephone Number: (410) 234-0111
<PAGE>
MANAGING AGENT'S CERTIFICATION
I hereby certify that I have examined the accompanying financial
statements and supplemental data of Circle Terrace Associates Limited
Partnership and, to the best of my knowledge and belief, the same are complete
and accurate.
MANAGING AGENT
Rental Housing Management
Partnership
Fred Beguin
David Staley
Property Manager Managing Agent Taxpayer
Identification Number:
13-3580730
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
Circle Terrace Associates Limited Partnership
We have audited the accompanying balance sheet of Circle Terrace
Associates Limited Partnership as of December 31, 1999, and the related
statements of operations, partners' equity (deficit) and cash flows for the year
then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with 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 Circle Terrace
Associates Limited Partnership as of December 31, 1999, and the results of its
operations, the changes in partners' equity (deficit) and 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 supplemental information on pages 27
through 37 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.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated March
24, 2000 on our consideration of Circle Terrace Associates Limited Partnership's
internal control and on its compliance with specific requirements applicable to
major HUD programs and fair housing and non-discrimination.
Bethesda, Maryland Federal Employer
March 24, 2000 Identification Number:
52-1088612
Lead Auditor: Robert J. Denmark
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
BALANCE SHEET
DECEMBER 31, 1999
ASSSETS
<TABLE>
<CAPTION>
CURRENT ASSETS
<S> <C>
1120 Cash - operations $ 197,819
1125 Cash - entity 83,708
1130 Tenant accounts receivable 7,305
1135 Accounts receivable - HUD 30,070
1200 Miscellaneous prepaid expenses 94,917
----------------
Total current assets 413,819
DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant deposits 46,173
RESTRICTED DEPOSITS AND FUNDED RESERVES
1310 Escrow deposits $ 48,177
1320 Reserve for replacements 688,508
1330 Other reserves 275,538
------------------
1,012,223
RENTAL PROPERTY
1410 Land 1,104,269
1420 Buildings 15,271,257
1440 Building equipment - portable 31,654
1460 Furnishings 8,378
1480 Motor vehicles 18,340
1490 Miscellaneous fixed assets 86,167
-------------------
16,520,065
1495 Less accumulated depreciation (4,074,656)
------------------
12,445,409
OTHER ASSETS
1520 Intangible assets, net of accumulated
amortization of $113,199 193,721
------------------
$ 14,111,345
</TABLE>
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
BALANCE SHEET - Continued
DECEMBER 31, 1999
LIABILIATIES AND PARTNERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
CURRENT LIABILITIES
<S> <C>
2110 Accounts payable - operations $ 66,510
2123 Accrued management fee payable 22,482
2131 Accrued interest payable - first mortgage 2,393
2132 Accrued interest payable - second mortgage 22,275
2134 Accrued interest payable - other loans/notes 7,603
2160 Notes payable, current maturities 5,000
2170 Mortgage payable - first mortgage, current maturities 106,364
2172 Mortgage payable - second mortgage, current maturities 165,351
2174 Other loans/notes payable, current maturities 48,476
2180 Utility allowances 977
2190 Miscellaneous current liabilities 16,438
2210 Prepaid revenue 1,415
--------------------
Total current liabilities 465,284
DEPOSITS LIABILITY
2191 Tenant deposits held in trust (contra) 44,969
LONG-TERM LIABILITIES
2133 Accrued interest payable - other loans/notes
(surplus cash) $ 125,030
2311 Notes payable - surplus cash 550,000
2320 Mortgage payable - first mortgage, net of
current maturities 3,298,373
2321 Mortgage payable - second mortgage, net of
current maturities 3,022,010
2324 Other loans/notes payable, net of current maturities 1,932,744
-----------------
8,928,157
CONTINGENCIES
-
3130 PARTNERS' EQUITY (DEFICIT) 4,672,935
----------------
$ 14,111,345
</TABLE>
See notes to financial statements
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Statement of Operations - Continued
Year end DECEMBER 31, 1999
<TABLE>
<CAPTION>
RENTAL REVENUE
<S> <C>
5120 Rent revenue - gross potential $ 403,361
5121 Tenant assistance payments 1,875,570
------------------
Total rental revenue $ 2,278,931
VACANCIES
5220 Apartments (10,077)
5250 Rental concessions (5,587)
--------------------
Total vacancies (15,664)
Net rental revenue 2,263,267
FINANCIAL REVENUE
5410 Financial revenue - project operations 7,494
5440 Revenue from investments - replacement reserve 17,350
5490 Revenue from investments - miscellaneous 2,314
--------------------
Total financial revenue 27,158
OTHER REVENUE
5910 Laundry and vending 18,276
5920 Tenant charges 4,674
5990 Miscellaneous revenue 7,997
--------------------
Total other revenue 30,947
Total revenue 2,321,372
</TABLE>
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Statement of Operations - Continued
Year end DECEMBER 31, 1999
<TABLE>
<CAPTION>
ADMINISTRATIVE EXPENSES
<S> <C>
6210 Advertising and marketing 13,789
6250 Other renting expenses 10,086
6310 Office salaries 169,032
6311 Office expenses 52,082
6320 Management fee 130,164
6331 Administrative rent free unit 3,774
6340 Legal expense - project 15,944
6350 Auditing expense 10,275
6351 Bookkeeping fees/accounting services 16,368
6370 Bad debts 20,504
6390 Miscellaneous administrative expenses 24,423
-------------------
Total administrative expenses 466,441
UTILITIES EXPENSE
6450 Electricity 32,231
6451 Water 25,852
6452 Gas 70,637
6453 Sewer 2,188
--------------------
Total utilities expense 130,908
OPERATING AND MAINTENANCE EXPENSES
6510 Payroll 173,639
6515 Supplies 54,463
6520 Contracts 220,014
6525 Garbage and trash removal 36,820
6530 Security payroll/contract 149,009
6546 Heating/cooling repairs and maintenance 17,328
6548 Snow removal 1,709
6570 Vehicle and maintenance equipment operation
and repairs 15,478
6590 Miscellaneous operating and maintenance expenses 78,662
-------------------
Total operating and maintenance expenses 747,122
</TABLE>
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Statement of Operations - Continued
Year end DECEMBER 31, 1999
<TABLE>
<CAPTION>
TAXES AND INSURANCE
<S> <C>
6710 Real estate taxes 139,107
6711 Payroll taxes 37,131
6720 Property and liability insurance 80,122
6723 Health insurance and other employee benefits 25,809
-------------------
Total taxes and insurance 282,169
FINANCIAL EXPENSES
6820 Interest on mortgage payable 377,439
6830 Interest on notes payable - long-term 547
6850 Mortgage insurance premium/service charge 44,738
-------------------
Total financial expenses 422,724
6900 Nursing home/Assisted living and other elderly care expenses 1,500
DEPRECIATION AND AMORTIZATION
6600 Depreciation expense 572,954
6610 Amortization expense 14,004
-------------------
Total depreciation and amortization 586,958
CORPORATE OR MORTGAGOR ENTITY
REVENUE AND EXPENSES
7105 Entity revenue (3,371)
7141 Interest on notes payable 22,000
-------------------
Total corporate or mortgagor entity revenue and expenses 18,629
Total expenses 2,656,451
Net income (loss) $ (335,079)
================
</TABLE>
See notes to financial statements
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Statement of Partner's Equity (deficit)
Year ended December 31, 1999
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
Partners' equity (deficit)
<S> <C> <C> <C> <C> <C>
December 31, 1998 $ 216,387 $ 4,791,627 $ 5,008,014
Net income (loss) (3,351) (331,728) (335,079)
------------------- ---------------- ----------------
Partners' equity (deficit)
December 31, 1999 $ 213,036 $ 4,459,899 $ 4,672,935
================== ================= ================
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Statement Cash Flows
Year ended December 31, 1999
Cash flows from operating activities
<S> <C>
Rental receipts $ 2,376,006
Interest receipts 27,158
Other operating receipts 30,947
Entity/construction receipts
Entity interest income 3,371
Administrative expenses paid (133,490)
Management fees paid (130,164)
Utilities paid (129,931)
Salaries and wages paid (491,680)
Operating and maintenance paid (435,192)
Real estate taxes paid (150,451)
Property insurance paid (87,072)
Miscellaneous taxes and insurance paid (178)
Net tenant security deposits received (paid) 2,040
Other operating expenses paid (69,146)
Interest paid on mortgages (377,439)
Interest paid on notes (547)
Mortgage insurance premium paid (43,322)
Net cash provided by (used in) operating activities 390,910
Cash flows from investing activities
Net deposits to mortgage escrows 27,097
Net deposits to reserve for replacements (101,890)
Net deposits to other reserves (41,570)
Net cash provided by (used in) investing activities (116,363)
---------------------
Cash flows from financing activities
Mortgage principal payments (306,523)
Entity/construction financing activities
Due from affiliate 860
Net cash provided by (used in) financing activities (305,663)
---------------------
NET INCREASE (DECREASE) IN CASH (31,116)
Cash, beginning 312,643
Cash, end $ 281,527
====================
</TABLE>
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
Statement Cash Flows - continued
Year ended December 31, 1999
<TABLE>
<CAPTION>
Reconciliation of net income (loss) to net
cash provided by (used in) operating activities
<S> <C>
Net income (loss) $ (335,079)
-------------------
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Depreciation 572,954
Amortization 14,004
Changes in asset and liability accounts
(Increase) decrease in assets
Tenant accounts receivable 8,346
Accounts receivable - other 130,047
Accounts receivable - interest 9,477
Miscellaneous prepaid expenses (16,878)
Tenant security deposits funded (3,349)
Increase (decrease) in liabilities
Accounts payable (10,718)
Accrued liabilities (3,907)
Accrued interest payable 22,000
Tenant security deposits held in trust 5,389
Prepaid revenue (1,376)
Total adjustments 725,989
Net cash provided by (used in) operating activities $ 390,910
==================
</TABLE>
See notes to financial statements
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE A - ORGANIZATION
Circle Terrace Associates Limited Partnership was organized under the laws
of the State of Maryland on March 28, 1990, for the purpose of acquiring and
operating a rental housing project under Section 236 of the National Housing
Act. The project consists of 303 units located in Lansdowne, Maryland, and
is currently operating under the name of Circle Terrace Apartments.
Cash distributions are limited by agreements between the partnership and the
United States Department of Housing and Urban Development ("HUD") to an
annual amount of $30,340 per year to the extent of surplus cash as defined
by HUD. Undistributed amounts are cumulative and may be distributed in
subsequent years if future operations provide surplus cash in excess of
current requirements.
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. In addition, Circle
Terrace Associates Limited Partnership has executed an Extended Low-income
Housing Agreement/Land Deed Restriction/Extended Use Commitment which
requires the utilization of the project pursuant to Section 42 for a minimum
of 30 years, even after the disposition of the project by the partnership.
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.
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
CDA Project No.: 28.04.0010
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Rental Property
Rental property is 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-year
life. Personal property is recorded at cost and is depreciated over its
estimated service life of five to seven years using accelerated methods.
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 operations.
Intangible Assets and Amortization
Mortgage costs are amortized over the term of the respective loan using the
effective interest method.
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 upon such
determination.
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.
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.
<PAGE>
NOTE C - MORTGAGES PAYABLE
First Mortgage
The partnership is obligated under the terms of a mortgage note which is
insured by the Federal Housing Administration ("FHA") and bears interest at
the rate of 7%, less a varying interest subsidy in the current amount of
$17,999 per month. Monthly payments of principal and interest in the reduced
amount of $10,564 are due through maturity in February 2017. The total
interest subsidy of $215,990 is reflected as a reduction of interest
expense. Principal and accrued interest due at December 31, 1999 are
$3,404,737 and $2,393, respectively.
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.
Second Mortgage
The partnership is obligated under the terms of a mortgage note in the
original amount of $4,000,000, which is insured by the Maryland Housing Fund
("MHF") and payable to Crestar of Richmond, Virginia, Inc. The note bears
interest at the rate of 8%. Monthly payments of principal and interest in
the amount of $34,645 are due through maturity in December 2011. Principal
and accrued interest due at December 31, 1999 are $3,187,361 and $22,275,
respectively.
Third Mortgage
The partnership is obligated under the terms of a mortgage note in the
original amount of $2,227,330 payable to the Department of Housing and
Community Development of the State of Maryland ("CDA"). The note bears
interest at 4.5%. Monthly payments of principal and interest of $11,373 are
due through July 1, 2023. Principal and accrued interest due at December 31,
1999 are $1,981,220 and $7,603, respectively.
The liability of the partnership under the terms of all of these mortgages
is limited to the underlying value of the real estate collateral plus
deposits held by the lenders.
<PAGE>
NOTE C - MORTGAGES PAYABLE (Continued)
Third Mortgage (Continued)
Aggregate annual maturities of mortgages payable for each of the next five
years and thereafter are as follows:
December 31, 2000 $ 320,191
2001 343,827
2002 369,264
2003 396,638
2004 426,097
Thereafter 6,717,301
-------------------
$ 8,573,318
===================
NOTE D - NOTES PAYABLE
The partnership is obligated under the terms of an unsecured promissory note
payable to Baltimore County, Maryland. Interest accrues at the rate of 4%.
Annual interest payments commenced January 1, 1996. Annual payments of
principal will be due commencing January 1, 2000 and will extend for 30
years through maturity on December 31, 2030. Payments may be made only to
the extent of surplus cash as defined by HUD. Principal and accrued interest
due at December 31, 1999 are $550,000 and $125,030, respectively.
The partnership is obligated under the terms of a note payable for the
purchase of a truck. The note bears interest at 8.75% and requires monthly
payments of principal and interest of $588 through maturity in October 2000.
The amount payable at December 31, 1999 is $5,000.
<PAGE>
NOTE D - NOTES PAYABLE (Continued)
Aggregate annual maturities of notes payable for each of the next five years
and thereafter are as follows:
December 31, 2000 $ 5,000
2001 -
2002 -
2003 -
2004 -
Thereafter 550,000
-------------------
$ 555,000
===================
NOTE E - RELATED PARTY TRANSACTIONS
Working Capital Advances
The general partner is obligated to make working capital advances to the
partnership as needed, up to an aggregate of $100,000. Such advances are
noninterest bearing and can be repaid out of available net cash flow as
defined in the partnership agreement. No such advances were required as of
December 31, 1999.
In the event cash flow does not provide sufficient funds to pay the investor
limited partner its minimum distribution, such amount required will be
advanced by the general partner and will be considered a project expense
loan to be paid from surplus cash after required distributions as defined in
the partnership agreement.
Insurance
The majority shareholder of an affiliate of the general partner provided
debt financing for the capitalization of LaMere Associates, Inc. ("LaMere").
In connection with such debt financing, the shareholder received 20% of the
stock of LaMere. LaMere was paid premiums in connection with the following
insurance coverage provided to the partnership: property and liability,
fidelity bond and auto. In connection with such insurance coverage, the
partnership incurred $80,228 in premiums for the year ended December 31,
1999.
<PAGE>
NOTE E - RELATED PARTY TRANSACTIONS (Continued)
Shared Project Payroll Costs
The site superintendent was shared with another project in the area and
payroll costs were allocated based on time spent on each project.
Computer Services
In accordance with HUD Regulations 4381.5 Rev-2, Paragraph 6.38, the
partnership uses the services of a computer consultant company to provide
the following services: purchase and install personal computers and the
related equipment and software for the project's rental office, provide
training and technical support, and consult on software upgrades. Dynamic
Information Services, Inc. (DIS), which is owned by a relative of an officer
of the management company, is a licensed representative of Project Data
Systems, Inc., a nationally-known provider of computer system software for
the subsidized housing industry. DIS derives 40% of its consulting service
revenues from third-party clients not affiliated with the management
company. In 1999, the partnership paid DIS $928 for technical support and
training services based on billable hours.
Laundry Lease
The partnership has entered into a lease agreement with Moonbeam Equipment
and Communications, LLC ("Moonbeam"), an affiliate of the general partner,
which permits Moonbeam to install coin-operated laundry equipment for use by
the tenants.
The partnership retains 45% of the income on the coin-operated equipment as
reimbursement of utility and janitorial expenses incurred by the partnership
to maintain the common area laundry facilities; the balance is remitted to
Moonbeam. The lease agreement expires in January 2023 and, among other
terms, states that expenses relating to the maintenance and repair of the
equipment are the obligation of Moonbeam.
Moonbeam earned $8,918 from the proceeds of the laundry room collections
during 1999, of which $6,245 remains payable as of December 31, 1999.
<PAGE>
NOTE F - MANAGEMENT FEE
The property is managed by an affiliate of the general partner. The
management fee is based on a charge of $35.80 per unit per month. The
management agent also receives fees of $4.50 per unit per month for
accounting services provided to the partnership. Management and accounting
fees charged to operations during 1999 were $130,164 and $16,368,
respectively, of which $22,482 of management fee is payable at December 31,
1999.
NOTE G - HOUSING ASSISTANCE PAYMENT (HAP) CONTRACT AGREEMENTS
HUD has contracted with the partnership under the United States Housing Act
of 1937 to make housing assistance payments to the partnership on behalf of
qualified tenants. The terms of the contract covering 142 units expired on
November 30, 1998, and the contract covering 161 units expired on November
30, 1997.
The contracts do not have renewal options.
Under the Multifamily Assisted Housing and Reform and Affordability Act
("MAHRAA") of 1997, Congress set forth the legislation for a permanent
"mark-to-market" program and provided for permanent authority for the
renewal of Section 8 contracts. On September 11, 1998, HUD issued an interim
rule to provide clarification of the implementation of the mark-to-market
program. Owners with Section 8 contracts expiring after September 30, 1998
are subject to the provisions of MAHRAA. As such, the partnership may choose
to either opt out of the Section 8 program, request mortgage restructuring
and renewal of the Section 8 contract, or request renewal of the Section 8
contract without mortgage restructuring. Each option contains a specific set
of rules and procedures that must be followed in order to comply with the
requirements of MAHRAA. As of the date of the report, the partnership has
extended both contracts from October 1, 1999 through September 30, 2000.
It is uncertain whether HUD will renew these contracts under terms that are
consistent with the successful operation of the project. The project is
economically dependent upon the rental income received from both of its
agreements. If HUD were not to extend either one, the project's operating
cash flow would be adversely affected.
<PAGE>
NOTE H - PARTNERS' CAPITAL CONTRIBUTIONS
The partnership has one general partner - Cooperative Associates Limited
Partnership and two limited partners - SLP, Inc. (the special limited
partner) and Boston Financial Qualified Housing Tax Credits L.P. V, a
Limited Partnership (the investor limited partner). The general partner has
made capital contributions of $413,562. SLP, Inc. is required to make a
capital contribution of $10. The investor limited partner has made capital
contributions totaling $5,615,234.
NOTE I - CONTRACT WITH BALTIMORE COUNTY (IN LIEU OF TAXES)
The partnership is obligated under the terms of an agreement with Baltimore
County, Maryland, whereby the partnership is to pay the County $220 per
apartment unit per year (the minimum payment) in lieu of real estate taxes.
To the extent there is net cash flow, as defined in the agreement, such
amount is to be applied toward additional payments. The minimum payment has
been increased 10% annually. The amount incurred during 1999 under the terms
of this agreement was $66,660. This amount is included with other city and
county real estate taxes in the statement of operations. The County has
advised the partnership that $239,359 is due for additional taxes and
interest applicable to 1992 through 1995 and has placed a lien on the
property. The partnership believes that such payments are not due in
accordance with the P.I.L.O.T.
agreement. Such amount has not been recorded until this matter is resolved.
NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS
All profits and losses are allocated 1% to the general partner and 99% to
the investor limited partner.
Cash flow, as defined in the partnership agreement, is to be distributed as
follows:
1. 99% to the investor limited partner and 1% to the general partner until
the investor limited partner has received distributions, in the
aggregate, equal to the cumulative priority distribution.
2. To the repayment of any project expense loans.
<PAGE>
NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)
3. To the general partner until it has received cumulatively an amount
equal to the cumulative amount paid to the investor limited partner as
defined above.
4. 50% to the general partner and 50% to the investor limited partner.
Gain, if any, from a sale, exchange or other disposition 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 each partner until the positive capital account balance is equal to
the amount of cash available for distribution as a result of the
transaction, as defined in the partnership agreement.
Loss from a sale is allocable as follows:
1. To the partners in proportion to their positive capital account
balances. In the event the loss is less than the sum of the positive
capital accounts, the loss is to be allocated such that the resulting
capital account balance is as near as possible to the amount of cash to
be distributed as a result of the transaction.
2. 1% to the general partner and 99% to the investor limited partner.
NOTE K - TAXABLE LOSS
<TABLE>
<CAPTION>
A reconciliation of the financial statement net loss to the income tax net
loss of the partnership for the year ended December 31, 1999 is as follows:
<S> <C>
Financial statement net loss $ (335,079)
Excess depreciation for income tax purposes (6,393)
Other differences (6,658)
-------------------
Income net tax loss $ (348,130)
===================
</TABLE>
NOTE L - INVESTMENT IN REAL ESTATE
A reconciliation of the basis of the investment in real estate for financial
reporting purposes to that for income tax purposes as of December 31, 1999
is as follows:
<TABLE>
<CAPTION>
<S> <C>
Investment in real estate for financial reporting $ 12,445,409
Excess accumulated depreciation for income tax purposes (59,435)
Interest expense portion of subsidy capitalized for income tax purposes 177,317
-------------------
Investment in real estate for income tax purposes $ 12,563,291
===================
</TABLE>
NOTE M - CONCENTRATION OF CREDIT RISK
The partnership maintains its cash balances and escrow in several banks. The
balances are insured by the Federal Deposit Insurance Corporation ("FDIC")
up to $100,000 per bank. As of December 31, 1999, the uninsured portion of
the cash balances held at two banks was $337,199.
NOTE N - CONTINGENCIES
The partnership'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 capital contributed
by the investor limited partner.
Baltimore County has advised the partnership that $239,359 is due for
additional taxes and interest applicable to 1992 through 1995 and has placed
a lien on the property. The partnership believes that such payments are not
due in accordance with the P.I.L.O.T. agreement. Such amount has not been
recorded until this matter is resolved.
<PAGE>
