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2010 10 05 RDARedevelopment Agency agendas are available on the City' web page @ www.la-quinta.org REDEVELOPMENT AGENCY AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting ESDAY. OCTOBER 5. 2010 DUE TO THERE BEING NO CLOSED SESSION SCHEDULED, THE REDEVELOPMENT AGENCY WILL CONVENE AT 4:00 P.M. Beginning Resolution No. RA 2010-010 CALL TO ORDER Roll Call: Agency Board Members: Adolph, Franklin, Henderson, Sniff, Chairperson Evans PUBLIC COMMENT At this time, members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CLOSED SESSION — NONE CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1. APPROVAL OF MINUTES OF SEPTEMBER 21, 2010. Redevelopment Agency Agenda 1 October 5, 2010 CONSENT CALENDAR NOTE: Consent Calendar items are considered to be routine in nature and will be approved by one motion. 1. APPROVAL OF DEMAND REGISTER DATED OCTOBER 5, 2010. 2. APPROVAL OF FINANCIAL AND COMPLIANCE REPORTS FOR WASHINGTON STREET APARTMENTS FOR THE YEARS ENDING JUNE 30, 2010 AND 2009. BUSINESS SESSION - NONE STUDY SESSION — NONE CHAIR AND BOARD MEMBERS' ITEMS — NONE PUBLIC HEARINGS — NONE ADJOURNMENT The next regular meeting of the Redevelopment Agency will be held on October 19, 2010, commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of October 5, 2010, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 111, on October 1, 2010. DATED/ October 1, 2010 VERONICA J.,tdIONTECINO, City Clerk City of La inta, California Public Notice Any writings or documents provided to a majority of the Redevelopment Agency regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. RedevelopmentAgencyAgenda 2 October 5, 2010'0 • 0 ^ 2 U w CFM OF Tl� AGENDA CATEGORY: RDA MEETING DATE: October 5, 2010 BUSINESS SESSION ITEM TITLE: Demand Register Dated CONSENT CALENDAR / October 5, 2010 STUDY SESSION PUBLIC HEARING RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and File the Demand Register Dated October 5, 2010 of which $159,826.61 represents Redevelopment Agency Expenditures. PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA •,.. 003 T-df 4 4 a" COUNCIL/RDA MEETING DATE: October 5, 2010 ITEM TITLE: Approval of Financial and Compliance Reports for Washington Street Apartments for the Years Ended June 30, 2010 and 2009 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: _ STUDY SESSION: PUBLIC HEARING: Approve and file the Financial and Compliance Reports for Washington Street Apartments for the years ended June 30, 2010 and 2009. FISCAL IMPLICATIONS: Page 24 of the Audit contains a summary of Audit Results. No significant items were noted. CHARTER CITY IMPLICATIONS: None BACKGROUND AND OVERVIEW: In October 2008, the La Quinta Redevelopment Agency acquired a 73 unit low- income apartment complex, Washington Street Apartments. The apartment complex is managed by Hyder & Company and the audit was performed by Joyce Rethmeier, CPA. The audit (Attachment1) was required since the United States Department of Agriculture (USDA) Rural Development provides Federal funding. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 004 1. Approve and file the Financial and Compliance Reports for the Washington Street Apartments for the years ending June 30, 2010 and 2009; or 2. Do not approve and file Financial and Compliance Reports for the Washington Street Apartments for the years ending June 30, 2010 and 2009; or 3. Provide staff with alternative direction. Respectfully submitted, 4M 4"e" John M. Falconer, Finance Director Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Washington Street Apartments Financial and Compliance Reports Dated June 30, 2010 and 2009 005 WASHINGTON STREET APARTMENTS FINANCIAL AND COMPLIANCE REPORTS JUNE 30, 2010 AND 2009 CONTENTS Independent Auditors' Report Financial Statements Statement of Financial Position Statement of Activities Statement of Cash Flows Notes to, the Financial Statements Supplemental Information Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Audit Findings on Compliance Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 Schedule of Findings and Questioned Costs Schedules of Expenditures of Federal Awards Accompanying Multiple Family Housing Borrower Balance Sheet — Form RD 3560-10 Accompanying Multiple Family Housing Project Budget — Form RD 3560-7 PAGE 3-4 5-6 7 8-9 10-13 15-18 19-20 21 22-23 24 25 26-27 28-32 007 [1 I 1 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT Independent Auditors' Report To La Quinta Redevelopment Agency Washington Street Apartments (An elderly housing development owned by. La Quinta Redevelopment Agency) La Quinta, CA USDA Rural Development Moreno Valley Office Moreno Valley, CA ' I have audited the accompanying statements of financial position of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), Case No. 04-033-953740431, as of June 30, 2010 and 2009, and the related statements of activities and cash flows for the year ended June 30, 2010 and period from inception (October 31, 2008) to June 30, 2009. These financial statements are the responsibility of the Project's management. My responsibility is to express an opinion on these financial statements based on my audits. ' I conducted my audits in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I 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. I believe that my audits 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 Washington Street Apartments, as of June 30, 2010 and 2009, and changes in its net assets and its cash flows for the year ended June 30, 2010 and period from inception (October 31, 2008) to June 30, 2009 in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, I have also issued a report dated August 31, 2010, on my consideration of Washington Street Apartment's internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control over financial reporting and ' compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of my audits. 235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants 008 1 .. I My audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on page 15-18 and 26-32 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Washington Street Apartments. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and is also 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 my opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Joyce E. Rethmeier Certified Public Accountant August 31, 2010 009 V WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO. 04-033-953740431 STATEMENTS OF FINANCIAL POSITION JUNE 30, ASSETS Current Assets Cash Rental assistance receivable Tenant receivable Prepaid expenses Receivable - other Total Current Assets Restricted Deposits and Funded Reserves Cash restricted for tenant security deposits Real estate tax and insurance reserve Replacement reserve Rental Property Land Buildings & Improvements Less: Accumulated Depreciation Other Assets Permanent loan fees, net of accumulated amortization of $2,314 and $926 in 2010 and 2009 Deposits tTotal Assets 2010 2009 $ 89,087 34,784 5,061 823 8,300 138,055 26,249 46,320 331,043 403,612 3,447,094 2,748,477 6,195,571 (152,830) 6,042,741 15,620 6,400 22,020 $ 69,319 40,406 2,201 17,598 96 129,620 26,234 24,478 272,369 323,081 3,447,094 2,736,127 6,183,221 (60,803) 6,122,418 17,008 4,540 21,548 $ 6,606,428 $ 6,596,667 The accompanying notes are an integral part of these financial statements. "�..� 010 -5- 1 1 1 1 WASHINGTON STREET APARTMENTS ( An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO. 04-033-953740431 STATEMENTS OF FINANCIAL POSITION (continued) JUNE 30, LIABILITIES AND NET ASSETS Current Liabilities Current portion of mortgage note payable Accounts payable Accrued expenses Total Current Liabilities Deposits and Prepaid Liabilities Tenants' security deposits Tenants' prepaid rents Long -Term Liabilities Mortgage note payable, net of current portion Total Liabilities Commitments Net Assets Total Liabilities and Net Assets 2010 2009 $ 39,408 $ 36,085 30 4,046 21,185 2,328 60,623 42,459 26,105 26,268 2,301 1,731 28,406 27,999 2,232,706 2,269,921 2,321,735 2,340,379 4,284,693 4,256,288 $ 6,606,428 $ 6,596,667 The accompanying notes are an integral part of these financial statements. 011 -6- ' WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO.04-033-953740431 STATEMENTS OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2010 ' AND PERIOD OF INCEPTION (OCTOBER 31, 2008) TO JUNE 30, 2009 2010 2009 ' Rental Income Apartments $ 172,276 $ 122,361 Less: Overage - Tenant Utility Allowance - ' Tenant Assistance Payments 445,396 296,643 Potential Rental Income 617,672 419,004 Less: Vacancies (1,707) (3,546) ' Total Rental Income 615,965 415,458 Other Income Laundry & Vending 4,917 2,307 Interest Income 2,188 777 Tenant Charges 2,746 1,846 Other Income 142 Total Other Income 9,993 4,930 ' Total Income 625,958 420,388 Expenses Operating & Maintenance Expenses 235,715 129,835 Utilities Expenses 55,412 37,238 Taxes & Insurance 32,143 25,493 Bad Debts - - Interest on Mortgage Payable 169,618 85,833 1 Total Expenses 492,888 278,399 Income/(Loss) from Operations 133,070 141,989 Non -Operating (Income) & Expense Interest Subsidy Income (46,912) (27,365) Interest Subsidy Expense 46,912 27,365 Asset Management Fee 11,250 Depreciation & Amortization 93,415 61,729 Total Non -Operating Income & Expense (104,665) (61,729) Change in Net Assets 28,405 80,260 Net Assets - Beginning of Year 4,256,288 - Owner Contributions - 4,176,028 ' Net Assets - End of Year $ 4,284,693 $ 4,256,288 The accompanying notes are an integral part of these financial statements. '0°•' 012 -7- WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) ' CASE NO. 04-033-953740431 STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2010 AND PERIOD OF INCEPTION (OCTOBER 31, 2008) TO JUNE 30, 2009 2010 2009 Operating Activities ' Rental receipts $ 168,375 $ 118,249 Rental subsidy 451,018 256,237 Interest receipts 2,188 777 Other receipts 7,805 4,153 Net tenant security deposits (paid) received (178) 34 Net deposits received (1,860) (4,540) Payroll (53,844) (33,052) Administrative (71,411) (44,491) ' Professional fees (7,000) Management fee (11,250) - Utilities (58,241) (34,409) Maintenance (111,735) (38,919) Insurance and taxes (8,389) (52,919) Interest on mortgage note payable (158,952) (85,833) 1 Net Cash From Operating Activities 146,526 85,287 Investing Activities Reserve for Taxes & Insurance (21,842) (24,478) Reserve for Replacement (58,674) (272,369) Payment of Loan Fees - (17,934) Purchase/Disposal of Rental Property (12,350) (6,183,221) Net Cash From Investing Activities (92,866) (6,498,002) Financing Activities Mortgage Principal Payments (33,892) (26,746) ' Mortgage Proceeds 2,332,752 Owner Contributions - 4,176,028 Net Cash From Financing Activities (33,892) 6,482,034 Net Increase/(Decrease) in Cash 19,768 69,319 Cash at Beginning of Period 69,319 - Cash at End of Period $ 89,087 $ 69,319 The accompanying notes are an integral part of these financial statements. .,,,.` 013 ' 8 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO. 04-033-953740431 STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2010 AND PERIOD OF INCEPTION (OCTOBER 31, 2008) TO JUNE 30, 2009 Operating Activities Increase in net assets Adjustments to Reconcile Increase/(Decrease) in Net Assets to Net Cash From Operating Activities Depreciation & Amortization Decrease (Increase) in Assets: Rental Assistance Receivable Tenant Receivables Receivable - Other Prepaid Expenses Cash restricted for tenant security deposits Deposits Increase (Decrease) in Liabilities: Accounts Payable Accrued Expenses Security Deposits - Liability Prepaid Rents Net Cash From Operating Activities Supplemental Disclosures Interest Subsidy $ 28,405 $ 80,260 93,415 61,729 5,622 (40,406) (2,860) (2,201) (8,204) (96) 16,775 (17,598) (15) (26,234) (1,860) (4,540) (4,016) 4,046 18,857 2,328 (163) 26,268 570 1,731 $ 146,526 $ 85,287 $ 46,912 $ 27,365 The accompanying notes are an integral part of these financial statements. -9- "-. 014 F WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 A. Organization ' Washington Street Apartments ("the Project") is an elderly housing development owned by La Quinta Redevelopment Agency (herein referred to as the Project). The Project operates a 73 unit elderly housing ' development for low-income seniors, as defined in Section 521 of the Housing Act of 1949. The Project commenced rental operations in November 2008. ' Legal title to the Project is held by La Quinta Redevelopment Agency, a government agency. The accompanying financial statements are those of the Project and do not represent the financial statements of La Quinta Redevelopment Agency. The Project operates as an enterprise fund and, as such, follows governmental accounting standards and uses the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded in the accounting period in which they are earned and become measurable. Expenses are recorded in the period incurred, if ' measurable. B. SignificantAccountingPolicies A summary of the Project's significant accounting policies consistently applied in the preparation of the accompanying financial statements are as follows: Basis of Accounting ' The Project utilized the accrual basis of accounting, whereby income is recognized as earned and expenses are recognized as obligations are incurred. Cash and Cash Equivalents Cash and cash equivalents consist of short-term investments with an original maturity of three months or less, cash on deposit, money market funds and certificates of deposit. Tenant Receivable and Bad Debt Policy ■ Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move - out are charged with damages or cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, security deposit or the charges for damages and cleaning fees. The Project does not accrue interest on the tenant receivable balances. The Project has not established an allowance for doubtful accounts and does not use the reserve method for recognizing bad debts. Bad debts are treated as direct write-offs in the period management determines that collection is not probable. There are no bad debts for the year ended June 30, 2010 and period from inception (October 31, 2008) to June 30, 2009. ' -10- Poe 015 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 B. Significant Accounting Policies — (Continued) Rental Property Rental property is recorded at cost. Improvements are capitalized, while expenditures for maintenance and repairs are expensed 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 statements of operations. The rental property is depreciated over estimated service lives as follows: Buildings & Improvements Land Improvements Furnishings & Equipment 30 years 15 years 5-7 years straight-line accelerated accelerated The Project reviews its investment in real estate for impairment whenever events or changes in circumstances indicate that the carrying value of such property may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the real estate to the future net undiscounted cash flow expected to be generated by the rental property and any estimated proceeds from the eventual disposition of the real estate. If the real estate is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the real estate exceeds the fair value of such property. There were no impairment losses recognized in 2010 and 2009. Estimates ' The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Advertising Advertising costs are expensed when incurred. During 2010 there was $371 in advertising expense. During 2009, there was no advertising expense. 'n< ^ 01.6 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) ' Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 ' C. Mortga-ge Payable ' Rural Development The mortgage note was assumed by the Project and is payable to Rural Development in monthly installments of ' $7,107, at an interest rate of 10% and a term of 30 years, maturing in the year 2036. As part of the Loan Agreement, the Partnership entered into an Interest Credit and Rental Assistance Agreement that reduces the monthly mortgage payment to $3,198, which effectively lowers the interest rate to approximately 1% over the term of the loan. The mortgage liability of the Partnership is limited to the underlying value of the real estate collateral pledged. ' Under the loan agreement, the Project is required to make monthly escrow deposits for real estate, taxes and insurance premiums, and is subject to operating and return to owner restrictions. The Project's real and personal property are pledged as collateral for the trust deed note. Maturities of the mortgage notes in each of the next five years are approximated as follows: 2011 $ 11,691 2012 12,916 ' 2013 14,267 2014 15,760 2015 17,412 Thereafter 669,110 ' $ 741,156 There has been no significant change in interest rates available to the Project. Therefore, the fair value of the ' mortgage notes approximate the book value. ' Provident Savings Bank, FSB The Project is financed under a deed of trust with Provident Savings Bank, FSB, dated October 31, 2008 in the ' original amount of $1,572,031. Monthly installments are $12,873 through October, 2038. The interest rate on the note is 8.36%. ' Maturities of the Permanent Loan in each of the next five years are approximated as follows: r �pa •- ' -12- 017 WASHINGTON STREET APARTMENTS ' (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 ' NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 C. Mortgage Payable (continued) Year ending June 30, 2011 $ 27,717 ' 2012 30,125 2013 32,742 ' 2014 35,587 2015 38,679 Thereafter 1,366,108 $ 1,530,958 D. Commitments and Contingencies ' Rental Assistance Agreement The Project has entered into a Rental Assistance Agreement with Rural Development commencing April 2010, providing rental assistance for 72 units. The agreement provides for a maximum rental assistance commitment of $401,760. The agreement expires May 1, 2011, but is then renewable under contract with ' Rural Development pending congressional approval of budget authority. E. Current Vulnerability Due to Certain Concentrations The Project's sole asset is Washington Street Apartments. The Project's operations are concentrated in the affordable housing real estate market. In addition, the Project operates in a heavily regulated environment. ' The operations of the Project are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies, including, but not limited to, Rural Development and the State Housing Agency. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by Rural Development or the State Housing Agency. Such changes may occur with little notice or inadequate funding to pay for the related cost, including the additional administrative burden, to comply with a change. ' F. Concentration of Credit Risk The Project maintains its cash in financial institutions insured by Federal Deposit Insurance Corporation (FDIC). Deposit accounts, at times, may exceed federally insured limits. As of June 30, 2010 the cash balance did not exceed those limits. As of June 30, 2009, the cash balance exceeded those limits by $152,429, ' respectively. The Project has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. 1 -13- .np , 018 I 11 C C 1 1 1 SUPPLEMENTAL INFORMATION 1 1 1 1 r 1 1 1 . 019 WASHINGTON STREET APARTMENTS ( An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO. 04-033-953740431 RETURN ON INVESTMENT SURPLUS CASH FOR THE YEAR ENDED JUNE 30, 2010 Return on Investment: Net Cash (Deficit) (from Part I, line 30) $ 27,569 Any Return to Owner, paid this year for prior year(s) (at Part 1, Line 23) + 11,250 Any RD authorized use of unrestricted cash + - Any RD authorized release of 2% initial operating capital + - Any special reserve deposit (over that required in the regular loan agreement) made to reduce excess cash + - Any special reserve "redeposit" that was required by RD as a result of the "adjustment to the reserve" calculation in the previous years audit's reserve account reconciliation + - If the project had an RD approved negative budget, add back any actual Net Deficit up to the amount of the approved negative budget + - Net Cash/Deficit, earned from current year's operation = $ 38,819 Surplus Cash: Ending Cash Balance (Part I, Line 33 of RD 3560-7) 20% of total O & M proposed in the year being reviewed Surplus Cash $ 135,407 63,637 71,770 See independent auditor's report on additional information. -15- ae.' 020 WASHINGTON STREET APARTMENTS ( An elderly housing development owned by La Qunita Redevelopment Agency) CASE NO. 04-033-953740431 REPLACEMENT RESERVE RECONCILIATION FOR THE YEAR ENDED JUNE 30, 2010 Reserve requirement 6/30/09 (Per Rural Development area office) (1) 282,417 Required annual reserve deposit (From loan agreement and any subsequent amendments) (2) 64,800 Actual reserve account deposit 76,108 Total all authorized regular reserve withdrawals * (3) 17,434 Total all authorized excess reserve withdrawals * - Total all unauthorized reserve withdrawals * - Required reserve balance 06/30/10 (5) 329,783 (1)+(2)-(3)=(5) Verified Balance 06/30/10 331,043 Amount account over (+) under (-) funded 1,260 * Detail of all reserve withdrawals during the fiscal year Regular Purpose Date Amount Authorized Exterior lighting 07/01/09 6,175 yes Exterior lighting 07/01/09 6,175 yes Refrigerator F3,B8,A6,J 1 10/06/09 2,278 yes Range B8, B4, G6 10/06/09 1,059 yes Shopping carts 05/23/10 1,747 yes Subtotal 17,434 See independent auditor's report on additional information. -16- �b 0 21 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 1. Management Fee Calculation The management fee is based on a fee per unit occupied by tenants during the month. Total Qualified Units (73 * 12 months) 876 Less: Rent Free Unit (12) Vacancies (0) Total Occupied Units 864 Fee Per Unit (Effective July 1, 2009) $52 Management Fee Expense $ 44,928 2. Insurance Disclosure The Project maintains Insurance coverage as follows: Deductible Coverage Building Insurance $2,500 $6,982,970 blanket coverage Comprehensive Business Liability No Deductible $2,000,000 per occurrence Fidelity / Employee Dishonesty No Deductible $10,000 Earthquake Insurance $25,000 $20,000,000 3. Return to Owner In accordance with the Loan Agreement, the annual return to owner is as follows: Maximum Return to Owner $ 7,500 Budgeted Return to Owner $ 7,500 Return to Owner Paid: Asset Management Fee — Prior Year $ 3,750 Asset Management Fee — Current Year 7,500 $ 11,250 See Independent Auditors' Report. -17- •I.. ' 022 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 4. Proiect Accounts Account Tyne Account Title Account Financial Interest Balance Number Institution Rate Checking Operating Account 2120367221 California Bank & Trust 58,628 Savings Operating Savings 2110112028 Union Bank .65% 30,309 Checking Tax & Insurance 2120367491 California Bank - & Trust 46,320 Checking Security Deposit 2120276859 California Bank & Trust 0.20% 26,249 Checking Replacement Reserve 2120277909 California Bank & Trust 0.55% 130,780 Savings Replacement Reserve 2110153387 Union Bank 0.65% 200,263 5. Changes to Owner Entity There have been no changes to the owner entity. See Independent Auditors' Report. 023 n.. JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ' To La Quinta Redevelopment Agency USDA Rural Development Washington Street Apartments Moreno Valley Office (An elderly housing development owned by Moreno Valley, CA La Quinta Redevelopment Agency) La Quinta, CA 1 I have audited the financial statements of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), RD Case No. 04-033-953740431, as of and for the year ended June 30, 2010, and have issued my report thereon dated August 31, 2010. I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting IIn planning and performing my audit, I considered Washington Street Apartments internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Washington Street Apartments internal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of the Project's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented, or detected and corrected on a timely basis. My consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial I reporting that might be deficiencies, significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I consider to be material weaknesses, as defined above. i 235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants Califomia Society of Certified Public Accountants " 024 I Compliance and Other Matters As part of obtaining reasonable assurance about whether Washington Street Apartments financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the La Quinta Redevelopment Agency, management, others within the organization and the U.S. Department of Agriculture Rural Development and ' is not intended to be and should not be used by anyone other than these specified parties. Joyce E. Rethmeier Certified Public Accountant August 31, 2010 025 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2010 Reportable Conditions of Non Compliance There were no findings in 2010. Auditee's Comments on Prior Audit Resolution Matters Related to United States Department of Agriculture Rural Development Programs. There were no findings in 2009. 026 JOYCE E. RE'I'IT\AEIER CERTIFIED PUBLIC ACCOUNTANT REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER ICOMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 1 To La Quinta Redevelopment Agency Washington Street Apartments Cora liance I have audited Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), RD Case No. 04-033-953740431, compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on Washington Street Apartment's major federal program for the year ended June 30, 2010. Washington Street Apartment's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to its major federal program is the responsibility of Washington Street Apartment's management. My responsibility is to express an opinion on Washington Street Apartment's compliance based on my audit. I conducted my audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133. Those standards and OMB Circular A-133 require that I plan and perform the audits to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Washington Street Apartment's compliance with those requirements and performing such other I procedures as I considered necessary in the circumstances. I believe that my audit provides a reasonable basis for my opinion. My audit does not provide a legal determination on the Washington Street Apartments compliance with those requirements. In my opinion, Washington Street Apartments complied, in all material respects, with the compliance requirements referred to above that could have direct and material effect on its major federal program for the year ended June 30, 2010. Internal Control Over Compliance The management of Washington Street Apartments is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing my audit, I considered Washington Street Apartments internal control over compliance with requirements that could have a direct and material effect on a major federal program to determine my auditing procedures for the purpose of expressing my opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of Washington Street Apartments internal control over compliance. r235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants 0 n 1 •w.. �L I A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility 1 that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. My consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. I did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the La Quinta Redevelopment Agency, others within the organization and the U.S. Department of Agriculture, Rural Development and is fnot intended to be and should not be used by anyone other than these specified parties. Y� ' vz"V'c/X / 60?� August 31, 2010 �.. 028 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 r SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEARS ENDED JUNE 30, 2010 AND PERIOD FROM INCEPTION (OCT. 31, 2008) TO JUNE 30, 2009 SUMMARY OF AUDIT RESULTS 1. The auditor's report expresses an unqualified opinion on the financial statements of Washington Street Apartments. 2. No material weaknesses were identified during the audit of the financial statements 3. No instances of noncompliance material to the financial statement of Washington Street Apartments were disclosed during the audit. 4. No material weaknesses were identified during the audit of the major federal award programs. 5. The auditor's report on compliance for the major federal award programs for Washington Street Apartments expresses an unqualified opinion. 6. There were no audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133. 7. The programs tested as major programs included: Farmers Home Administration pursuant to Section 521 of the Housing Act of 1949, Sec. 515 Rural Rental Housing Loans Rental Assistance 8. The threshold for distinguishing Types A and B programs was $300,000. 9. Washington Street Apartments qualifies as a low -risk auditee. FINDINGS None 1 r r r See independent auditor's report on additional information. -24- CFDA # 10.415 10.427 w.. 029 I WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 SCHEDULE OF EXPENDITURES AND FEDERAL AWARDS FOR THE YEARS ENDED JUNE 30, 2010 AND PERIOD FROM INCEPTION (OCT. 31, 2008) TO JUNE 30, 2009 Federal Grantor/Pass-through Grantor/Program Title U.S. Department of Agriculture Rural Development Farmers Home Administration pursuant to Section 521 of the Housing Act of 1949, Sec. 515 Rural Rental Housing Loans Rental Assistance Total CFDA Federal Expenditures Number 2010 2009 10.415 $ 741,171 $751,754 10.427 445,396 296,642 $ 1,186,567 $1,048,396 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS NOTE A -BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), RD Case No. 04-033-953740431, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. See independent auditors report on additional information. -25- •a. . 030 Form RD 3560-10 MULTI -FAMILY HOUSING (02-05) BORROWER BALANCE SHEET PART I - BALANCE SHEET :1C411►UALTAIA WASHINGTON STREET APARTMENTS CURRENT YEA PRIOR YEAR BEGINNING DATES> 07 -01 - 09 11 -01 -a ASSETS ENDING DATE> (6 -30 -10 1 1 (6 -30 - 09 CURRENT ASSETS 1. GENERAL OPERATING ACCOUNT ..... 2. R.E. TAX & INSURANCE ACCOUNT .... 3. RESERVE ACCOUNT ......................... 4. SECURITY DEPOSIT ACCOUNT ......... 5. OTHER CASH (identify) Petty Cash....... 6. OTHER ........................................... 7. TOTAL ACCOUNTS RECEIVABLE (Attar ACCTS RCVBLE 0-30 DAYS $ ACCTS RCVBLE 30-60 DAYS $ ACCTS RCVBLE 60-90 DAYS $ ACCTS RCVBLE OVER 90 DAYS $ 8. LESS: ALLOWANCE FOR DOUBTFUL A 9. INVENTORIES (supplies) ..................... 10. PREPAYMENTS ................................ 11. 12. TOTAL CURRENT ASSETS (Add 1 t, FORM APPROVED OMB NO. 0575-0189 .................... ..................... .................... .................... ....................... .................... . :h list) ............ 88,937 69,169 46,320 24,478 331,043 272,369 26,249 26,234 150 150 48,145 42,703 CCOUNTS ..... .................... .......... iru 11)............. 823 17,598 541,667 452,701 FIXED ASSETS 13. LAND ...................................................... 14. BUILDINGS .............................................. 15. LESS: ACCUMULATED DEPRECIATION ...... 16. FURNITURE & EQUIPMENT ........................ 17. LESS: ACCUMULATED DEPRECIATION ...... 18. DEFERRED FINANCING COSTS 19. TOTAL FIXED ASSETS (Add 13 thru 18)... OTHER ASSETS 20. DEPOSITS 21. TOTAL ASSETS (Add 12, 19, and 20)... LIABILITIES AND OWNERS EQUITY CURRENT LIABILITIES 22. TOTAL ACCOUNTS PAYABLE (Attach list) .................. I ACCTS PAYABLE 0-30 DAYS $ ACCTS PAYABLE 30-60 DAYS $ ACCTS PAYABLE 60-90 DAYS $ ACCTS PAYABLE OVER 90 DAYS $ 23. NOTES PAYABLE (Attach list)ACCRUED EXPENSES...... 24. SECURITY DEPOSITS ............................................ 25. TOTAL CURRENT LIABILITIES (Add 22 thru 24) ....... 3,447,094 3,447,094 2,748,477 2,736,127 (152,830) (60,803 0 0 0 0 15,620 17,008 6,058,361 6,139,426 6,400 4,540 6,606,428 6,596,667 ' According to the Papenvork Heduchon Act 011995, an agency may not Conduct or sponsor, and a person Is not requIred to respond 0 a Collection o information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575-0189. The time required to complete this information collection is estimated to average 2 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. See independent auditor's report on additional information. n r� 9 -26- 0 UJ8 I LONG TERM LIABILITIES 26. NOTES PAYABLE RURAL DEVELOPMENT 2,272,1141 2,306,006 27. OTHER (Identify) Tenants'oreoaidrents 2,301 1,731 ' 28. TOTAL LONG-TERM LIABILITIES (Add 26 and 27)..... 2,274,415 2,307,737 29. TOTAL LIABILITIES (Add 25 and 28) .................. 2,321,735 2,340,379 30. OWNER'S EQUITY (Net Worth) (21 minus 29) ............. 4,284,693 4,256,288 31. TOTAL LIABILITIES AND OWNER'S EQUITY 6,606,428 6,596,667 (Add 29 and 30) 1 Section 1001 of Title 18, United States Code provides: "Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined under this title or imprisoned not more than five years, or both. I HAVE READ THE ABOVE WARNING STATEMENT AND I HEREBY CERTIFY THE FOREGOING INFORMATION IS COMPLETE AND ACCURATE TO THE BEST OF MY KNOWLEDGE. I(Date) (Signature of Borrower or Borrower's Representative) (Title) PART II -THIRD PARTY VERIFICATION OF REVIEW I/We have reviewed the borrower's records. The accompanying balance sheet, and statement of actual budget and income on Form RD 3560-7, is a fair presentation of the borrower's records. I/We certify that no identity of interest exists between me/us and any individual or organization doing business with the project or borrower. (Date) (Signature) (Name and Title) (Address) ❑ In lieu of the above verification and signature, a review completed, dated and signed by a person or firm qualified by license or certification is attached. See independent auditor's report on additional information. 032 -27- F FORM APPROVED OM B NO.0575-0189 Form RD 3560-7 ( 05 06) MULTIPLE FAMILY HOUSING PROJECT BUDGET PROJECT NAME WASHINGTON STREET APARTMENTS BORROWER NAME LA QUINTA REDEVELOPMENT AGENCY BORROWER ID AND PROJECT NO. 04-033-953740431 Reporting Period Budget Type Project Rental Type Project type Borrower Type Plan Code ❑X Armual ❑ Initial ❑Family 1-1IFug--m ❑Individual ❑Quaznly ORq larReport X❑Elderly ❑ ILimimd Profit ❑Coryontion ❑ IA. of Farmer, 9ovowcr Acwunting ❑Monthly ❑Rem C'lunge ❑cmuiegare X❑ INon-Profit ❑Limited Panes OrgofFarm Method ❑$MR ❑Gmuphome X❑ONer ❑ IWurEas ❑Other Snvieing []Mixed ❑LH ❑ IGen-al Parma ❑Cazh X❑Acnval ❑ Ineligible BEGINNING DATES, ENDING DATES OPERATIONAL CASH SOURCES I. Rental Income............................................................ 2. RHS Rental Assistance Received .............................. . '3. Occupancy Surcharges Received ...................... ......... 4. Laundry and Vending............................................................ 5. Interest Income............................................................ 6. Tenant Charges............................................................ ,7. Other - Project Sources....................................................... 8. Less (V.,ee Y and Contingency Allouanre) ........................ 9 Less(Agency Approved Incentive Allo wnce) ........................ 10. SUB -TOTAL [(I then 7) - (8 & 9)/....................................... NON -OPERATIONAL CASH SOURCES H. Cash - Non Project............................................................ 12. Authorized Loan (Non-RHS) ....................................... 13. Transfer From Reserve......................................................... 14, SUB -TOTAL (11 thru 13)...................................................... 15. TOTAL CASH SOURCES (10+14)....................................... OPERATIONAL CASH USES 16. Total O&M Expenses (From Part 11) 17, RHS Debt Payment ............. 18. RHS Payment (Overage) ....... 19. RHS Payment (Late Fee) ....... 20, RHS Payment (Occupancy Suechorge) 21. Tenant Utility Payments .I........ 22, Transfer to Reserve ............. 23. Retmn to Owner ............. 24. SUB-TOTAL(16thru 23) ....... NON -OPERATIONAL CASH USES 25. Authorized Debt Payment (Non-RHS)....................................... 26. Annual Capital Budget (From Part 111, Lines 4-6)' ........................ 27. Miscellaneous............................................................ 28. SUB -TOTAL (25 thin 27)...................................................... 29. TOTAL CASH USES 04+28)....................................... 30. NET CASH (DEFICIT) (15-19) ICASH BALANCE 31, Beginning Cash Balance 32. Accrual to Cash Adjustment 33, Ending Cash Balance (30+31+32) FIN CURRENT ACTUAL PROPOSED COMMENTS BUDGET I BUDGET or(YTD) (07/01/09) (07/01/09) 627,264 170,569 -.a b; �+r 4v' '. weir �,,. 445,396 - 'a -4 �Y+Y i, ,t�. 4,000 4,917 1,210 2,188 425 2,746 42 12,545 620,354 625,958 87,230 17,434 87230 I - 17434 707,584 1 643,392 707,457 1 615,823 ............ 1 127 1 27,569 63,000 1 93,797 ...".. ti .. .. 1`8' 63,127 14,041 1 135,407 . _...._. mtb/m reporting burden for rhu ro/(ecrion efinfammion a atinmhd m average 4 hens per ies xi, including she time forievievin8 instructions, searese, a&ring data sources. gathering and ainraining IXe dam needed, andeomp(eein8 and rmiexin%Ihe mlfecrian oji I r^abort. Smdcommenu regarding rhu burden atimarc or anY other arpea o/Mv collection ofieformadmi, including suggadivejo,i-Mv,ngthninrdevie U.S. DixnaaentofAgdculame, Clearance O$ceq STOP 7602. 14001ndesimmence AvenuaSW, te hingmn. D.0 10250-7601. Please DO NOT RETURN IftatmmhrrhismAdress. Foruaedmehemixl USDA inylle nly, you a, am required to respond to this collation ofinfoinnown an(asitannuity, a nnremly ralN OMB mntro( mrmbn. I See independent auditors report on additional information. -28- Q33 'aa.� I IPART II - OPERATING AND I. 2. Maintenance and Repairs Payroll .............. .................. Maintenance and Repairs Supply ................................ 3. Maintenance and Repair Contract ............ ... _............... 4. Painting and Decorating ...... _...__................. ' 5. 6. Snow Removal __......__._.... ......... ...... Elevator Maintenance/Contact ............ _.......... _...... 7. Grounds........................................................ 8. Services ........_._..._..... _............_.. _.. _... ' 9. 10. Annual Capital Budget (From Pail V - Operating) Other Operating Expenses ................................ 11. SUB -TOTAL MAINT. & OPERATING (I thou 10) .............. 12. Electricity 13. Water .__.... _... _........................................ 14. Sewer ................................................ ........ 15. Fuel (OiUCooi1Gas) ............................... 16. Garbage & Trash Removal ................................ 17. Other Utilities........................................................ 18. SUB -TOTAL UTILITIES (12 thou 17) ........................... 19. Site Management Payroll _.... ......................... 20. Management Fee ....._.... ._.......... _..... I ....................... 21. Project Auditing Expense ................................ 22. Project Bookkeeping/Accounting................................ 23. Legal Expenses.........................1.............................. 24. Advertising .......... 25. Telephone& Answering Service ....... ......... _...._........ 26. Office Supplies .....__ ... .... .......... .._.......................... 27. Office Furniture & Equipment ­_ 28. Training Expense ......_......... ................ .........._........ .. 29. Health Ins. & Other Emp. Benefits ................................ 30. Payroll Taxes ......................................... I _ _......... 31. Workman's Compensation ........_...................... 32. Other Administrative Expenses .... ............._..... ........ 33. SUB -TOTAL ADMINISTRATIVE (19 thru 32) .............. 34. Real Estate Taxes ........................................................ 35. Special Assessments ................................ 36. Other Taxes, Licenses & Permits .................. I............. 37. Property & Liability Insurance ................... 38. Fidelity Coverage Insurance ................................ 39. Other Insurance ......... ........... _.............. ................... 40. SUB -TOTAL TAXES & INSURANCE (34 thru 39) .............. CURRENT PROPOSED I COMMENTS ACTUAL BUDGET or(YTDI 30,160 29,187 12,280 13,968 27,000 16,024 8,500 2,113 36,500 33,260 3,990 4,446 15,720 23,621 3,950 4,919 138,100 127,538 9,50U 9,897 24,000 17,051 22162 20,266 3,000 1,376 9,500 6,822 68,162 55,412 27,880 25,869 44,928 44,928 7,000 5,783 2,500 816 300 371 3,250 2,716 5,750 4,280 I,000 137 7,883 5,123 5,056 4,964 4,545 4,250 6,066 3,856 116,158 103,093 845 800 7,107 9,886 900 62 23,010 22,195 32,662 32,143 41. TOTAL O&M EXPENSES (11+18+33+40) ............... 1 355,082 1 318,186 See independent auditors report on additional information. -29- �._ 03,4 ' PART HI — ACCOUNT BUDGETING/STATUS CURRENT PROPOSED COMMENTS BUDGEF ACTUAL BUDGET I or YTD RESERVE ACCOUNT: I BEGINNING BALANCE ..... --- ..... ..... ....... 2 TRANSFER TO RESERVE... .... - ................ TRANSFER FROM RESERVE ......... ...... ......... 3 OPERATING DEFICIT.......... 4 ANNUAL CAPITAL BUDGET (Part V - Reserve 5 EQUIPMENT REPAIR & REPLACEMENT...... 6 OTHER NON -OPERATING EXPENSES.......... 7TOTAL (3 throb).... .... .... _.................. 8 ENDING BALANCE [(/+2)-7]............ ....... . GENERAL OPERATING ACCOUNT:* BEGINNING BALANCE ... ......_.................. 69,319 ' ENDING BALANCE..... ................ .......... ......... 99,087 REAL ESTATE TAX AND INSURANCE ESCROW ACCOUNT:* BEGINNING BALANCE .... ................. --- 24,478. ' ENDING BALANCE. .............................. . 46,320 TENANT SECURITY DEPOSIT ACCOUNT:* BEGINNING BALANCE........_ ................... 26,234 ENDING BALANCE ..... _........ _._._....... .... 26,249. *(Complete upon submission ofaemal e,Rensea) NUMBER OF APPLICANTS ON WAITING LIST... RESERVE ACCT. REQ. BALANCE..... NUMBER OF APPLICANTS NEEDING RA. AMOUNT AHEAD/BEHIND... .... ....... - See independent auditors report on additional information. - 30 m.. 035 PART IV -- RENT SCHEDULE AND UTILITY ALLOWANCE A. ('IIRR FNT .tFFRnVFn RFNTC/IITII ITV f11nWAN!`C. UNIT DESCRIPTION RENTAL RATES POTENTIAL INCOME FROM EACH RATE BR SIZE UNIT TYPE NUMBER BASIC NOTE RATE HUD BASIC NOTE RATE I HUD UTILITY ALLOWANCE 1 BR M 72 S 726 S 861 E - S 627,264 $ 743.904 S - S 72 1BR Z 1 E - S - $ - $ - S - E - s E - $ - $ - b - s - 'S - S - E - $ - S - b - $ - E - S 8 - s - $ - E - $ - E - E - S S - $ 8 $ s $ $ - $ - S - $ - E - % - b - $ $ E S E S E CURRENT RENT TOTALS]$ 627,264 $ 743,904 $ BASIC NOTE HUD UNIT DESCRIPTION RENTAL RATES POTENTIAL INCOME FROM EACH BR SIZE UNIT TYPE I NUMBER BASIC NOTE RATE HUD BASIC NOTE RATE HUD I BR M 72 $ 726 S '. 861 S - E 627,264 S 743.9N E 1 BR Z 1 S - S -. $ . - s - $ - $ $ - $ - $ - % - $ - s $ - S - $ $ S S 8 4 S S S E b $ E $ -- 8 - E - E - $ - S CURRENT RENT TOTALS $ 627,264 $ 743,904 $ 13ANIC NUIE HUD C. PROPOSED UTILITY ALLOWANCE -Effective Date: BR SIZE UNITTYPE NUMBER ELECTRIC V GAS �V WATERvyV SEWER TRASH OTHER TOTAL 1 BR M 72 62 14 76 1 BR Z 1 ::4 See independent auditor's report on additional information. _31_ -a.a - C. 3 6 Appliances: Range Refrigerator Range Hood Washers & Dryers Carpet & Vinyl: 1 Br. 2 Br. 3 Br. 4 Br. 5 Br. Common Area Cabinets: Kitchens Bathroom Doors: Exterior Interior Window Coverings: Detail: Heating & Air Conditioning: Furnace HVAC Plumbing: Water Heater Bath Sinks Kitchen Sinks Faucets Toilets Major Electrical: Detail: Exterior lighting Structures: Windows Screens Walls Roofing Siding Exterior Painting Paving: Asphalt Concrete Seal & Stripe Landscape & Grounds: Landscaping Lawn Equipment Fencing Recreating Area Signs Accessibility Features: Detail: Automation Equipment: Site Management Common Area Other: List: List: List: List: List: List: Actual I Actual Number Actual n Reserve I From ODeratino Of Units I Total 1,059 3,333 11 4,392 2,279 3,388 10 5,667 12,350 1 1 1 12,350 TOTAL CAPITAL EXPENSES: 1 17,434 1 23,621 1 1 41,055 See independent auditor's report on additional information. _32_ C37