HomeMy WebLinkAbout01-20-09 TSH Denton Agenda Packet HousING
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AGENDA
THE BOARD OF DIRECTORS OF THE
TEXAS STUDENT HOUSING CORPORATION—DENTON PROJECT
(AN INSTRUMENTALITY OF THE TOWN OF STLA )
January 20,2009
5:30 P.M.
TEXAS STUDENT HOUSING OFFICE
3 VILLAGE CIRCLE, SUITE 207
WESTLAKE, TEXAS
1. CALL TO ORDER.
2. DISCUSS AND CONSIDER APPROVAL OF TSIIC — DENTON PROJECT
ANNUAL AUDIT FOR FY 2007-2005 PRESENTED BY PATTILLO BROWN chi
HILL,L.L.P.
3. DISCUSS AND CONSIDER APPROVAL OF AMENDED BYLAWS.
4. REVIEW AND APPROVE MINUTES OF JUNE 17,2005.
5. ADJOURN.
CERTIF'ICA.TION
I certify/hat the above notice was posted at the Town Hall of the Town of Westlake, 3 Village Circle, Westlake,
Texas, n Friday,January 16, 2009,by 5 p.m.under the Open Meetings Act,Chapter 551 of the Texas Government
Co
i Sutter,
utte ,TRMC,Town Secretary
I you plan to attend this public meeting and have a disability that requires special needs, please advise the Town
Secretary 48 hours in advance at 817-490-5710 and reasonable accommodations will be made to assist you.
TEXAS
THE RIDGE AT NORTH TEXAS PROJECT
FINANCIAL REPORT
AUGUST 31, 2008
TEXAS STUDENT HOUSING CORPORATION
THE RIDGE AT NORTH TEXAS PROJECT
TABLE OF CONTENTS
AUGUST 31,2008
Page
Number
FINANCIAL SECTION
IndependentAuditors' Report............................................................................................. 1 —2
Management's Discussion and Analysis ............................................................................ 3 — 6
Financial Statements:
Statementof Net Assets................................................................................................... 7
Statement of Revenues, Expenses and Changes in Net Assets......................... ........ 8
Statementof Cash Flows ................................................................................................. 9
Notes to Financial Statements.......................................................................................... 10 — 18
SUPPLEMENTAL SCHEDULES
Schedule I— Schedule of Revenues and Expenses............................................................. 19
Schedule II—Certificate of the Fixed Charges Coverage Ratio......................................... 20
]FINANCIAL STATEMENTS
PATTILLO, BROWN & PIILL, L.L.P,
CERTIFIED PUBLIC ACCOUNTANTS E BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Texas Student Housing Corporation—
The Ridge at North Texas Project
Westlake, Texas
We have audited the accompanying financial statements of Texas Student Housing Corporation—
The Ridge at North Texas Project (tire "Project"), as of and for the year ended August 3I , 2008, which
collectively comprise the Project's basic financial statements as listed in the table of contents. Texas
Student Housing Corporation— The Ridge at North Texas Project is a component unit of the Town of
Westlake. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. 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 the 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.
As discussed in Note I, the financial statements present only the Project and do not purport to,
and do not, present fairly the financial position of Texas Student Housing Corporation as of Aug
fi ust 31
2008, and the changes in its financial position and cash flows, where applicable, for the period then
ended in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Texas Student Housing Corporation — The Ridge at North Texas Project as
of August 31, 2008, and the changes in financial position, and, where applicable, cash flows thereof for
the year then ended in conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that Texas Student
Housing Corporation — The Ridge at North Texas Project will continue as a going concern. As
discussed in Note I to the financial statements, the Project is in default on its bonds and bondholders
may choose to continue as a going concern. Management's plans in regard to these matters are
discussed in Note 1. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
1
401 WEST HIGHWAY 6 E P.O.BOX 20725 ®WACO,TX 76792-0725 0(254)772-4901 ®FAX:(254)772-4920 0 www-pbliepa.com
AFFILIATE OFFICES:BROWNS VILLE,TX(956)544-7778 E HILLSBORO,Tx(254)582-2583
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The management's discussion and analysis on pages 3 through 5 are not a required part of the
basic financial statements but are supplemental information required by accounting principles generally
accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
required supplementary information. However, we did not audit the information and express no opinion
on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements
that collectively comprise the Project's basic financial statements. The accompanying supplemental
information on pages 19 and 20 is presented for purposes of additional analysis and is not a required part
of the basic financial statements. The supplemental information has been subjected to the auditing
procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
r r
January 14, 2009
2
MANAGEMENT'S
DISCUSSION AND ANALYSIS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As staff of the Texas Student Housing Corporation (the "Corporation") — The Ridge at North Texas
Project (the "Project"), we offer the readers of the Project's financial statements this narrative overview
and analysis of the financial activities of the Project for the fiscal year ended August 31, 2008. We
encourage readers to consider the information presented herein in conjunction with the Project's
financial statements which follow this section. As the Corporation is a component unit of the Town of
Westlake and is thus considered a governmental entity, Governmental Accounting Standards Board
Statement 34, Basic Financial Statements—and Management's Disczssion and Analysis—for State and
Local Governments has been implemented. The reader should note that this financial report addresses
only the financial condition of the Project itself for 2008.
FINANCIAL HIGHLIGHTS
• The liabilities of the Project exceeded its assets at the close of the fiscal year by
$8,727,759, an increase of$506,891 over the prior year. The primary reason for this
increase in debt service payments.
• Operating revenue of$4,073,240 is $317,048 less than budget. Operating expense is
$266,821 better than budget. Major components of the expense variance were
utilities, and turnover expenses as compared to budget.
• At the end of the current fiscal year, the total cash balances were $723,592 in
unrestricted cash and $2,413,934 in restricted cash.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Project's basic financial
statements. The Project's report consists of three parts, Management's Discussion and Analysis, the
basic financial statements, and notes to financial statements. The basic financial statements include a
statement of net assets, statement of revenues, expenses and changes in net assets, a statement of cash
flows and supplemental schedules.
The Project is being treated as a going concern. The Project is in default on its bonds and is not
financially able to make scheduled principal and interest payments on its outstanding debt. They are
considered an event of default by the Trustee, which gives the bondholders the right to accelerate and
demand payment of the bonds in full. Management and the property manager are in the process of
developing plans to increase occupancy and rental rates at the property to improve its financial
performance.
3
The statement of net assets presents information on all of the Project's assets and liabilities with the
difference between the two reported as net assets.
TABLE I
TEXAS STUDENT HOUSING CORPORATION-
THE RIDGE AT NORTH TEXAS PROJECT
NET ASSETS
Business-type Activities
2008 2007
Current and other assets $ 3,970,679 S 3,839,895
Capital assets 21,695,260 22,699,714
Total assets 25,665,939 26,539,609
Current liabilities 34,393,698 34,760,477
Total liabilities 34,3931698 34,760,477
Net assets:
Invested in capital assets,
net of related debt ( 8,222,476) ( 7,690,537)
Restricted 299,112 656,013
Unrestricted ( 804,395) ( 1,186,344)
Total net assets $( 8,727,759) S( 8,220,868)
The statement of revenues, expenses and changes in net assets accounts for all of the Project's revenues
and expenses regardless of when cash is paid or received.
TABLE 2
TEXAS STUDENT HOUSING AUTHORITY-
THE RIDGE AT NORTH TEXAS PROJECT
CHANGES IN NET ASSETS
Business-ty pe Activities
2008 2007
Total operating revenue S 4,073,240 S 3,999,846
Total operating expenses ( 2,469,428) ( 27766,614)
Total operating income 1,603,812 1,233,232
Interest income 173,109 79,589
Interest expense ( 2,283,812) ( 2,864,714)
Total nonoperating loss ( 2,110,703) ( 2,785,125)
CHANGE IN NET ASSETS ( 506,891) ( 1,551,893)
NET ASSETS, BEGINNING ( 8,220,868) { 6,668,975)
NET ASSETS, ENDING $( 8,727,759) $( 8,220,868)
The statement of cash flows recaps how cash changed from year to year.
4
FINANCIAL ANALYSIS OF THE PROJECT'S FUNDS
Notes to financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the financial statements.
Restricted cash. Restricted cash represents monies held in escrow by the trustee and are restricted for
the payment of expenses as outlined in the Installment Sale Agreement. As of August 31, 2008, these
balances were as follows:
Revenue Fund $ 109
Bond Fund, Series 2001A 155,803
Bond Fund, Series 2001B 69
Debt Service Reserve Fund, Series 2001A 3
Bond Reserve Fund-CD 2,237,187
Debt Service Reserve Fund,Series 2002B 364
Repair and Replacement Fund 8
Trustee Fee Fund 3,246
Series A Principal Fund 17,099
Series B Principal Fund 39
Denton(UNT)Operating Reserve 7
Total S 2,413,934
Nonrestricted cash. Nonrestricted cash is available for general use of the Project.
Bonds payable. As of August 31, 2008, since the bonds are in default, all amounts are considered due
immediately.
2001A Bonds S 27,495,000
2001B Bonds 3,240,000
Less discounts ( 822,264)
Total S 29,912,736
For the fiscal year ending August 31, 2009, the total principal and interest payment is calculated at
$2,620,593. A total of$510,000 in principal was paid during 2008.
ECONOMIC FAC'T'ORS AND NEVI' YEAR'S BUDGET
Leases at the Project are primarily 12-month leases, however, due to competitive and market conditions,
a relatively minor number of 6 and 10-month leases exist. These leases do bring a monthly premium
over the 12-month leases. Occupancy for the fiscal year ending August 31, 2009, forecasts at 85%.
Rental rates will see a small increase. This is exacerbated by the fact that university of North Texas
does not allow freshmen to live in off-campus housing.
CON'T'AC'T'ING THE PROJEC'T'S FINANCIAL MANAGEMENT
This financial report is designed to provide the reader with a general overview of the Project's finances
and to demonstrate the Project's accountability for the money it receives. If you have any questions
about this report, or need additional information, please contact Pete Ehrenberg at (817) 490-5723.
5
TEXAS STUDENT HOUSING CORPORATION
THE RIDGE AT NORTH TEXAS PROD
STATEMENT OF NET ASSETS
AUGUST 31, 2008
ASSETS
Current assets:
Cash $ 723,592
Restricted cash 2,413,934
Accounts receivable, net reserve of$2,857 8,351
Prepaid expenses 18,315
Property management receivable 31,420
Total current assets 3,195,612
Capital assets:
Land 2,200,000
Other capital assets, net of accumulated depreciation 19,495 260
Total capital assets 216957260
Other assets:
Deferred financing costs, net of amortization 775.067
Total other assets 775,067
Total assets 25.665.939
LIABILITIES
Current liabilities:
Trade accounts payable 56,220
Accrued liabilities 394,189
Management and development fees payable 831,011
Deferred revenue and prepaid rent 579,983
Accrued interest 2,114,822
Property management advance 499.737
Bonds payable 297917,736
Total current liabilities 34,393,698
NET ASSETS
Invested in capital assets,net of related debt ( 8,222,476)
Restricted for debt service 299,112
Unrestricted ( 804,395)
Total net assets $( 8,727,759)
The accompanying notes are an integral part of these financial statements.
6
TEXAS STUDENT HOUSING CORPORATION
THE RIDGE AT NORTH 'TEXAS PROJECT
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 2008
OPERATING REVENUES
Rental $ 3.920,227
Other 153,013
Total operating revenues 4,073,240
OPERATING EXPENSES
Personnel 303.404
Contract services 47,697
Utilities 356,274
Repairs and maintenance 54;614
Turnover 123,892
Advertising and promotion 45,834
Administration 148,930
Management fees 166,780
Replacements 145,064
Depreciation and amortization 1,075,878
Travel t061
Total operating expenses 2,469,428
OPERATING INCOME 1.603,812
NONOPERATING REVENUES (EXPENSES)
Interest income 173.109
Interest expense ( 2,283,812)
Total nonoperating revenues (expenses) ( 2,110,703)
CHANGE IN NET ASSETS ( 506,891)
NET ASSETS, BEGINNING ( 8,220;868)
NET ASSETS, ENDING $( 8,727,759)
The accompanying notes are an integral part of these financial statements.
7
TEXAS STUDENT HOUSING CORPORATION
THE RIDGE AT NORTH TEXAS PROJECT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31,2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants $ 4,016,916
Cash paid to employees ( 263,176)
Cash paid to suppliers { 1,258.335)
Net cash provided by operating activities 2,495,405
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments on bonds payable ( 472;515)
Interest paid ( 2,036,536)
Net cash used in capital and related financing activities ( 2,509,051)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 173.109
Net cash provided by investing activities 173,109
NET CHANGE IN CASH AND CASH EQUIVALENTS 159,463
CASK AND CASH EQUIVALENTS, BEGINNING 2,978,063
CASK AND CASH EQUIVALENTS, ENDING $ 3.137.526
Cash $ 723.592
Restricted cash 2,413,934
Total cash and cash equivalents $ 3,137.526
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 1,603,512
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 1,038,393
Changes in operating assets and liabilities:
Accounts receivable ( 5,260)
Trade accounts payable ( 130,704)
Deferred revenue ( 51,064)
Other current liabilities 40,228
Net cash provided by operating activities $ 2,495.405
The accompanying notes are an integral part of these financial statements.
8
TEXAS STUDENT HOUSING CORPORATION—
THE RIDGE AT NORTH TEXAS PROJECT
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2008
I. GENERAL STATEMENT
Texas Student Housing Corporation—The Ridge at North Texas (the "Project"), a Texas nonprofit
organization, was incorporated on May 17, 2001, a component unit of the Town of Westlake,
Texas (the "Town") pursuant to Section 53.35(b) of the Texas Education Code, as amended (the
"Act"). The Project's primary purpose is to purchase, own and operate a student housing facility
known as Texas Student Housing Corporation—The Ridge at North Texas.
The Project was purchased from Jefferson Commons—Denton, L.P. on July 17, 2001. The Project
obtained its financing through the issuance of Texas Student Housing Corporation — Denton
Project Texas Student Housing Revenue Bonds (University of North Texas Project), Series 2001A
and Subordinate Series 2001B (the "Bonds"). The Bonds were issued through a Trust Indenture
(the "Trust Indenture") by and between the Corporation and The Bank of New York (the
"Trustee"). The Series 2001A and Subordinate Series 2001B bonds were issued in the face
amounts of $29,105,000 and S5,250,000, respectively. The accompanying financial statements
present the operations of the Project, whose revenue streams are pledged for the bonds described
herein.
The Corporation was also established to acquire educational facilities and housing facilities to be
used by the students, faculty and staff of institutions of higher education and facilities incidental,
subordinate or related thereto or appropriate within the State of Texas.
The Project was operated and managed under the terms of the (a) Property Management and
Leasing Agreement by and between the Corporation and JPI Campus Quarters Management, L.P.
("JPI") and (b) the Asset Management Agreement by and between the Corporation and JPI
Apartment Management, L.P., up until September 30, 2004. The Project subsequent to September
30, 2004, is managed and operated by Asset Campus Housing under the terms of a Property
Management and Leasing Agreement.
The 2008 financial statements were prepared assuming the Project will continue as a going
concern. The Project's bonds payable are considered to be in default due to the discontinuance of
principal and interest payments. These are considered an event of default by the Trustee, which
gives the bondholders the right to accelerate and demand payment of the bonds in frill.
Management and the property manager are in the process of developing and implementing plans to
increase occupancy and rental rates at the property to improve its financial performance.
9
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A surrunary of the Project's significant accounting policies consistently applied in the preparation
of the accompanying financial statements follows:
A. ReportinV, Entity
For financial reporting purposes, management has considered all potential component units.
The decision to include a potential component unit in the reporting entity was made by
applying the criteria set forth in GASB Statement No. 14 as amended by GASB Statement
No. 39. The criteria used is as follows:
Financial Accountabilitti — The primary government is deemed to be financially
accountable if it appoints a voting majority of the organization's governing body and
1) is able to impose its will on that organization; or 2) there is a potential for the
organization to provide specific financial benefits to, or impose specific financial
burdens on, the primary government. Additionally, the primary government may be
financially accountable if an organization is fiscally dependent on the primary
government regardless of whether the organization has a separately elected
governing board appointed by a higher level of goverrunent or a jointly appointed
board.
B. Measurement Focus and Basis of Accounting
The Project uses the economic resources measurement focus. This means that all assets,
liabilities, equity, revenues, and expenses are accounted for using the accrual basis of
accounting.
Revenue is recognized when earned and expenses are recognized when they are incurred. In
applying the requirements of GASB Statement No. 20, the Project has chosen to apply all
applicable GASB pronouncements as well as Financial Accounting Standards Board
pronouncements issued on or before November 30, 1989, unless those pronouncements
conflict with or contradict GASB pronouncements.
C. Assets, Liabilities and Net Assets or Equity
Income Taxes
The Project is an instrumentality of the Town and, therefore, its income is not subject to
federal income taxation pursuant to Section 115 of the Internal Revenue Code.
(continued)
10
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity (Continued)
Cash and Cash Equivalents
The Project considers all highly liquid investments with maturity of three months or less
when purchased to be cash equivalents. At August 31, 2008, the Project had no such
investments included in cash and cash equivalents.
In addition, the Project has restricted cash of$2,413,934 that is held by the Trustee for the
bonds payable under provisions of the Trust Indenture. During the year ended August 31,
2008, the investment income received from cash was $173,109. See Note III for risk
disclosures and breakdown of restricted cash accounts.
Use of 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 certain reported amounts in the financial statements and
accompanying notes. Actual results could differ from these estimates and assumptions.
Accounts Receivable
Accounts receivable are stated at amounts management expects to collect from outstanding
balances. Management writes off uncollectible amounts through a reduction to revenue and a
credit to accounts receivable based on its assessment of the outstanding receivables. At year-
end, management assesses the accounts receivable balance and establishes a valuation
allowance based on historical experience and an evaluation of the outstanding balances. An
allowance of$2,87 has been provided at August 31, 2008.
Deferred Financing Costs
Costs associated with the issuance of bonds are deferred and amortized over the term of the
bonds.
Advertising Costs
All adverting costs are expensed as they are incurred. Advertising costs for the year ended
August 31, 2008, were approximately $46;000.
Capital Assets
Property and equipment have been recorded at the date of acquisition at cost. Routine
maintenance and repair costs to ready the units for the next period are expensed as incurred.
(continued)
11
IL SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Assets, Liabilities and Net Assets or Equity (Continued)
Capital Assets (Continued)
Expenditures directly related to the improvement of property are capitalized at cost. The
Project capitalizes the cost of roof replacements and expenditures for other major property
improvements.
Depreciation is computed using the straight-line method over the estimated useful lives as
follows:
Estimated
Asset Class Useful Lives
Building 30 years
Furniture and fixtures 3-20 years
III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
At August 31, 2008, the carrying amount of Texas Student Housing Authority—The Ridge at
North Texas Project deposits (cash with interest bearing accounts and restricted cash held in
interest bearing accounts) was in total $3,137,526 of which $2,413,934 represented restricted
cash.
Restricted Cash
Restricted cash represents amounts placed on deposit in accounts and held by the Trustee,
which are restricted for the payment of expenses as required by the Trust Indenture. At
August 31, 2008, restricted cash consists of the following funds and accounts:
Fund/Account Description
Revenue Fund $ 109
Bond Fund, Series 2001A 155,803
Bond Fund, Series 2001B 69
Repair and Replacement Fund 8
Trustee Fee Fund 3,246
Series A Principal Fund 17,099
Series B Principal Fund 39
Operating Reserve Fund 7
Debt Service Reserve Fund, Series 2001A 3
Debt Service Reserve Fund, Series 2001B 364
Bond Reserve Fund-CD 2,237,187
Total $ 2,413,934
(continued)
12
III. DETAILED NOTES CAN ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Restricted Cash (Continued)
The following is a brief description of the funds and accounts making up the restricted cash
balance at year-end, as defined by the Trust Indenture:
Revenue Fund — The Revenue Fund was established for monthly deposits from
the depository account that holds general revenues of the Project. All monies are
deposited in the Revenue Fund and then properly distributed to the other funds, as
required by the Trust Indenture. Amounts in the fund at year-end represent
amounts that have not been distributed to the other funds due to timing of the
interfund transfers.
.Bond Fund— The Trustee makes monthly deposits in the Bond Fund pursuant to
the Trust Indenture. Amounts in the Bond Fund shall be used solely to fund the
payment of principal and interest on the bonds, for the redemption of the bonds at
or prior to maturity, and to purchase bonds on the open market. hl the event of
default, amounts in this fund may pay the fees and expenses of the Trustee prior
to making any payments to the bondholders. This fiend has two accounts, the
Series 2001A and the Series 2001B accounts.
Repair and Replacement Fund— Amounts in the Repair and Replacement Fund
may be (a) used to pay the maintenance and repair costs related to the Project,
which the Project is obligated to pay pursuant to the Trust Indenture and (b)
transferred to the Bond Fund to pay principal of or interest on the bonds to the
extent there are insufficient monies in the Bond Fund.
Surplus Fund— The Trustee shall deposit any remaining amount in the Revenue
Fund into the Surplus Fund. Amounts on deposit in the Surplus Fund will be
released to the Project if certain release tests are satisfied. If the release tests are
not satisfied, the Trustee will retain the monies on deposit in the Surplus Fund.
Trustee Fee Fund—Amounts are deposited in the Trustee Fee Fund on a monthly
basis and are intended to pay the fees to the Trustee at year-end.
Series A Principal Fund — Amounts in the Series A Principal Fund represent
sinking fund payments set aside for repayment of the principal balance on the
Series A Bonds.
Series B Principal Fund — Amounts in the Series B Principal Fund represent
sinking fund payments set aside for repayment of the principal balance on the
Series B Bonds.
(continued)
13
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Restricted Cash (Continued)
®peratina Reserve Fund — Amounts in the Operating Reserve Fund may be
transferred to the property Manager to fund operations if the transfer from the
Revenue Fund is not sufficient to pay operating expenses. Amounts may also be
transferred to the Bond Fund to pay principal and interest on the bonds; to the
extent there are insufficient monies in the Bond Fund on any interest payment
date.
Debt Service Reserve 2001A Account — The amounts on deposit in this account
are to be used for the purpose of playing principal and interest on the Series
2001A Bonds as they become due in the event there should be insufficient funds
in the Bond Fund.
Debt Service Reserve 20018 Account — The amounts on deposit in this account
are to be used for the purpose of paying principal and interest on the Series 2001 B
Bonds as they become due in the event there should be insufficient fiends in the
Bond Fund.
The Public Fluids Investment Act (Government Code Chapter 2256) contains specific
provisions in the areas of investment practices, management reports and establishment of
appropriate policies relating to a governmental entity's cash and investments.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an instrument. Generally, the longer the maturity of an investment the greater the
sensitivity of its fair value to changes in market interest rates. Texas Student Housing
Corporation — The Ridge at North Texas Project is not significantly exposed to interest rate
risk as all investments earn a variable rate.
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. The Public Funds Investment Act has a minimum
rating that is required for investments. Texas Student Housing Corporation — The Ridge at
North Texas Project holds all of its cash and investments with the bond Trustee and
commercial banks.
(continued)
14
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Concentration of Credit Risk
The investment policy of Texas Student Housing Corporation — The Ridge at North Texas
Project is subject to the indenture agreement of the bonds. As of August 31, 2008, the
Project held all of its restricted cash balances with the Trustee, which represents 77% of the
total cash and investments held at August 31, 2008.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be able
to recover collateral securities that are in the possession of an outside party. The custodial
credit risk for investments is the risk that, in the event of the failure of the counteiparty to a
transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another party. The Public Funds Investment Act does
not contain legal or policy requirements that would limit the exposure to custodial credit risk
for deposits or investments, other than the following provision for deposits: The Public
Funds Investment Act requires that a financial institution secure deposits made by state or
local governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The
market value of the pledged securities in the collateral pool must equal at least the bank
balances less FDIC insurance at all times.
As of August 31, 2008, the Project has unrestricted cash of $723,592 (bank balance
$737,766). Of the bank balances, $100,000 was covered by federal depository insurance
while the remaining $637,766 was uncollateralized. The Project has a Bank Deposit
Guarantee Bond from the Project's depository in the amount of$3.000,000.
B. Property Management Advance and Management fees
As of August 31, 2008, the Project has recorded a liability to JPI for amounts received of
approximately $499,737. These advances have been made to the Project according to the
terms of the Agreements.
Further, the Agreement requires interest to accrue on the advances at the "Prime Rate" as
published in The Wall Street Journal, plus 100 basis points 9.25% at August 31, 2008). As
of August 31, 2008, the financial statements include accrued interest related to the Property
Management advance in the amount of approximately $428,570 with expense for 2008 of
approximately $78,598.
(continued)
15
III. DETAILED NOTES ON ALL FUNDS (Continued)
B. Property Management Advance and Management Fees (Continued)
In addition, the Project owes JPI property and asset management fees for the management of
the Denton Property. As of August 31, 2008, the Project has recorded $831,011 in unpaid
property and asset management fees. Interest accrues at 12% on unpaid management fees.
Accrued interest of approximately $352,373 and current year expense of $99,721 has been
recorded at August 31, 2008.
The Project owes management fees of approximately $110,000 to ACH at August 31, 2008,
which is included in other current liabilities.
C. Capital Assets
Capital asset activity for the Project for the year ended August 31ti 2008, was as follows:
Beginning Ending
Balance Balance
Capital assets,not being depreciated:
Land $ 2,200,000 $ $ 2,200,000
Total capital assets;
not being depreciated 2,200,000 - 2,200,000
Capital assets,being depreciated:
Buildina 25,705,000 25,705,000
Furniture and fixtures 1,253.841 1 253,841
Total capital assets,
being depreciated 26,958,841 - 26,958,841
Less accumulated depreciation for:
Building ( 4,274,208) ( 856,833) ( 5J3 1,041)
Furniture and fixtures ( 2,184,919) ( 147,621) ( 2,332,540)
Total accumulated depreciation ( 6,459,127} ( 1,004,454) ( 7,463.581)
Total capital assets,
being depreciated,net 20,499.714 ( 1.004,454) - 19,495,260
Capital assets,net $ 22,699,714 $( 1,004,454) $ $ 21,695,260
D. Bonds Pavable
The bonds are tax-exempt governmental obligations under the Internal Revenue Code. The
bonds payable represent amounts due to the bondholders, via the Trustee, and payable under
the terms of the Trust Indenture dated July 1, 2001. The Bonds are payable solely from the
revenues pledged and assigned under the terms of the Trust Indenture. The Town of
Westlake does not have any liability for the payment of the bonds, as the bonds are non-
recourse to both the Town of Westlake and Texas Student Housing Authority. Interest rates
on the bonds range from 5.00% to 11.00% and are payable semi-annually on July 1 and
January 1 of each year thereafter.
(continued)
16
III. DETAILED NOTES OIL ALL FUNDS (Continued)
D. Bonds Parable (Continued)
At August 31, 2008, the Project was not in compliance with certain covenants of the
Indenture including insufficient funds in some of the required funds discussed in Note II and
the fixed charge ratio. Upon certain events of default either the Trustee, or owners of not less
than 25% in aggregate principal of the bonds then outstanding, may declare the principal and
all interest then due to be immediately due and payable. Generally accepted accounting
principles require that if the events of default occur, the liability should be disclosed as
current on the financial statements. In addition, all required principal payments on the Series
B bonds had not been made at August 31, 2008.
The following is a summary of long-term debt transactions of the Project for the year ended
August 31, 2008:
Amounts
Beginning Ending Due within
Balance Increases Decreases Balance One Year
Revenue Bonds:
2001A Bonds $ 28,005,000 - $ 510,000 $ 27,495,000 $ 27,495,000
2001 B Bonds 3,240,000 - 3,240,000 3,240,000
Less discounts ( 859,749) - ( 37,485) ( 822,264) ( 822,264)
Total $ 30,385,251 $ $ 471515 $ 29,912,736 $ 29,912,736
The debt originally was to be amortized through 2031 with varying monthly principal
payment amounts ranging from $2,618,093 to $3,465,280 for interest and principal. The
annual requirements to amortize all debts outstanding as of August 31, 2008, are as follows
and have not been adjusted for the default of the bonds. Under the original terms of the
Indenture, a total of $540,000 in principal and $2,079,992 in interest is due in fiscal 2008.
The total interest to be paid will depend on the ultimate maturities of the bonds.
Year Ending
August 31, Principal Interest Total
2008 $ 30,735,000 $ 34,237,678 $ 64,972,678
E. Net Assets
Net assets represent the residual assets after liabilities are deducted. These assets are
reported in the following categories:
Invested in Capital Assets, Net of Related Debt consists of capital assets, net of
accumulated depreciation and reduced by outstanding balances for bonds, notes,
and other debt that are attributed to the acquisition, construction, or improvement
of those assets.
(continued)
17
III. DE'T'AILED NOTES ON ALL FUNDS (Continued)
E. Net Assets (Continued)
Restricted fox Debt Service results when constraints placed on net asset use are
either externally unposed by creditors, grantors and the like, or imposed by law
through constitutional provisions or enabling legislation.
F. Concentrations
The Project consists of one property in Denton, Texas and is dependent upon the Denton area
and the higher education facilities in the Denton area for revenue.
G. Commitments and ContinIzencies
The Project has yet to have an arbitrage calculation performed for its outstanding debt. After
that analysis, the Project may incur a liability for interest earned in accordance with Internal
Revenue Service regulations.
18
Cl Y TP
'14
ou PLEMENTAL SCHEDULES
TEXAS STUDENT HOUSING CORPORATION
THE RIDGE AT NORTH TEXAS PROJECT
SCHEDULE I-SCHEDULE OF REVENUES AND EXPENSES
BUDGET AND ACTUAL
FOR THE YEAR ENDED AUGUST 31, 2008
Budget Actual Variance
REVENUES AND OTHER SUPPORT
Rental $ 4,284,328 $ 3,920,227 $( 3647101)
Other 105,960 153,013 47,053
Interest - 173,109 173.109
Total revenues and other support 4,390288 4246,349 ( 143,939)
OPERATING EXPENSES
Persomiel 340,201 303,404 36,797
Contract services 62,300 47,697 14,603
Utilities 506,952 356,274 150,678
Repairs and maintenance 45,805 54,614 ( 8,809)
Turnover 154,325 123,892 30,433
Advertising and promotion 57,198 45,834 11,364
Administration 179,071 148,930 3 0,141
Travel 2.675 1,061 1,614
Total operating expenses 1.348.327 1.081.706 266.821
REVENUES AVAILABLE FOR
FIXED CHARGES 3,041,761 3;164,643 121882
OTHER EXPENSES
Management fees 197,563 166,780 30,783
Replacements 135,500 145,064 ( 9,564)
Depreciation and amortization 1,075,878 1,075,878 -
Interest 2,283,812 2,283,812
Total other expenses 3,692,75 3) 3.671,534 21219
EXCESS OF EXPENSES OVER REVENUES $( 650,992) $( 506,891) $ 144,101
19
TEXAS STUDENT HOUSING CORPORATION
THE RIDGE AT NORTH TEXAS PROJECT
SCHEDULE II-CERTIFICATE OF THE FIXED C1€ARGES COVERAGE RATIO
FOR THE YEAR ENDED AUGUST 31,2008
We are providing this letter, as required by the Trust Indenture by and between Texas Student Housing
Corporation — The Ridge at North Texas (the "Project'') and The Bank of New York (the "Trustee"),
dated July 1, 2001, as amended on March 22, 2005, relating to Texas Student housing Corporation —
Denton Project Texas Student Housing Revenue Bonds (University of North Texas project) the
"Indenture," to certify the fixed charges coverage ratio as of August 31, 2008.
The fixed charges coverage ratio is defined in the Indenture as the ratio of revenue available for fixed
charges to fixed charges. Further, fixed charges are defined in the Indenture as the sum of all cash
outflows related to the Project that the Issuer cannot avoid without violating long-term contractual or
legal obligations (those obligations which extend for a period greater than one year), including, but not
limited to, (i) interest on indebtedness other than short-term indebtedness, and (ii) scheduled payments
of principal on indebtedness other than short-term indebtedness, provided that maximum annual debt
service shall be used for purposes of computing (1) and (ii) above.
The audited financial statements indicate revenue available for fixed charges for the year ended August
31, 2008, to be $3,164,643.
Based on the above revenues and fixed charges, we calculate that the fixed charges coverage ratio as of
August 31, 2008, to be .90, which is based on one year of operations and is not in compliance with the
Indenture.
20
AMENDEDED AND RESTATED
BYLAWS
of
TEXAS STUDENT HOUSING:A �W-)4-t4-- =Cor){)ration-I.)entori Proicct
ARTICLE I
POWERS AND OPERATIONS IN GENERAL
SECTION 1.1. Powers of,— the Corporation
The Texas Student Housing A tl c ity-4l�-�-u4hi-wi4�,'')C_oi-t)oratio _Deiito«Proiec_t_�th Cc B porado n)
shall have all of the powers and authority granted to "Higher Education Authorities"created under Section
53.11, Texas Education Code,as amended (the"Act"). The .x;4;. e Cor)oration shall be managed by the
Board of Directors(the`Board of Directors") in accordance with the Act.
SECTION 1.2. Supervision by a fd of Aldermen.the Town Council.
As the instrumentality of the Town of Westlake (the "Town"), the : t-hoa i and its
policies are subject to supervision by the Ta nls Be a_- of Aldermen (the- "BeaFd of ldennen.n)Town
Council(the Council)
SECTION 1.3. Student Assistance Program.
(a) The A+46of4y-*C or:poration_shall establish a program(the"Student Assistance Program")to
provide assistance to students attending institution(s)of higher education whose principal campus is located in
the State of Texas.
(b) Students qualifying for assistance shall be referred to as"Recipients,"who in order to qualify
must:
(i) be a graduate of a high school located in the State of Texas,
(ii) attend an institution of higher education whose principal campus is located in the State
of Texas,and
(iii) meet the requirements promulgated from time to time by the Board of Directors.
(c) Recipients may be provided use of student housing facilities owned by the -A+J 4zK+Fit-y
Cojj2g)rLtion at a cost Iess than the cost paid by other students residing in the same student housing facility(the
assistance provided to each Recipient shall be referred to as a"Scholarship'').
(d) The Student Assistance Program shall be funded exclusively from those funds(if any)of the
Authority that are
(i) not subject to a lien and/or pledge securing the -' t-i4 C'or .oration's=5 bonds or
other obligations,
TSHA.BYLAWS—Page I
TAM.vl.4120(2004
(ii) not required for the timely payment of the operation and
maintenance expenses, and
(iii) authorized by the Board of Directors.
(e) ^ E,=Ct3r1}c�^anon funds not used to provide funds for the Student Assistance Program
may be used for any lawful purpose.
SECTION 1.4. Regulations.
The A+&eHt-1�,-C.or oration by action of the Board of Directors, may promulgate regulations (the
"Regulations") governing the ity Cod'I�oratio��'s operations and implementation of the Student
Assistance Program. The Regulations shall not conflict with,and shall be subject to,these Bylaws.
ARTICLE I1
THE BOARD OF DIRECTORS
SECTION 2.1. Number Appointment Term Disqualifications and Removal of Directors.
(a) The Board of Directors shall consist of seven Directors.
(b) Successor Directors(including Directors filling vacancies)shall be appointed by the
(c) The term of each Director shall be two years.
(d) As a Director's term expires,the Director shall continue to serve until a successor is appointed
and assumes office; provided that, if a Director is removed or resigns,the Director's office shall be deemed
vacant upon the removal or resignation.
(e) Any Director may be removed at any time (with or without cause) by the
(f) No officer or employee of the Town may serve as a Director.
SECTION 2.2. Resignation.
Any Director may resign at any time. A resignation shall be made by written instrument and shall take
effect at the time specified therein or, if no time is specified,at the time of its receipt by the president or the
secretary of the A uthcarrityCorporatior - The acceptance of a resignation is not necessary to make it effective
unless expressly provided in the instrument of resignation.
SECTION 2.3. Committees.
(a) With respect to the management of then =itCortttigg.the Board of Directors, by
resolution adopted by a majority of the Directors present,may designate one or more committees that,to the
extent provided in the resolution,shall have the authority of the Board of Directors in the management of the
.oration Each committee shall consist of two or more Directors. Committees that do not have
TSHA.BYLAWS—Page 2
TAM.0.4/20/2004
the authority of the Board of Directors in the management of the A t€tl��r y- =orl�{�rati,o.... be designated by
resolution of the Board of Directors and membership on any committee is not limited to Directors.
(b) With respect to the administration of the Student Assistance Program, an Education
Leadership Advisory Committee (the "Advisory Committee") empowered to advise the Board of Directors
concerning student needs, assistance, and other matters relating to Scholarships, may be established by the
President. The Advisory Committee shall be composed of five members and shall include two Directors. The
President shall be empowered to appoint and remove all members of the Advisory Committee.
SECTION 2.4. Compensation of Directors.
Directors are not entitled to receive any compensation for their services as officers, except for
reimbursement of their actual expenses incurred in the performance of their official duties.
ARTICLE III
THE OFFICERS AND DUTIES
SECTION 3.1. Officers.
1 (a) The officers of the A °' —Corporation shall be a president (the "President"), a vice
president (the "Vice President"), a secretary (the "Secretary"), an assistant secretary (the "Assistant
Secretary"), a treasurer (the "Treasurer"), an assistant treasurer (the "Assistant Treasurer"), an executive
director(the"Executive Director"), and such other officers as the Board of Directors may from time to time
appoint.
(b) The President and Vice President shall be Directors, but no other officers are required to be
Directors.
(c) The same person may hold more than one office,except that the President shall not hold the
office of Secretary.
SECTION 3.2. Appointment Term Removal Vacancy of Offices.
(a) Each officer shall be appointed by the Board of Directors for a teen of two years and, in the
absence of resignation or removal, shall continue to serve until his/her successor is appointed and assumes
office, except that the Executive Director shall automatically cease being an officer upon the removal or
resignation of the Executive Director.
(b) Each officer is subject to removal from office(with or without cause)at any time by the vote
of a two-thirds majority of the Directors in office.
(c) A vacancy in any office shall be filled in the same manner as the original appointment for the
unexpired term thereof.
TSHA.BYLAWS—Page 3
TAM.v 1.4/20/2004
SECTION 3.3 President.
(a) The President is the chief executive officer of the A�u' �s-Cornorationand, subject to the
actions of the Board of Directors,shall have general charge and supervision of the management ofthe affairs of
the Authority.
(b) The President shall preside at all meetings of the Board of Directors.
(c) The President shall cause all orders and resolutions of the Board of Directors to be put into
effect.
(d) The President shall sign and execute all legal documents and instruments in the name of the
Au,t -4�N-Corl?ol�ation_when authorized to do so by the Board of Directors; provided that, the Board of
Directors may delegate the signing and execution thereof to some other officer or to an agent of the
"„ iy-orporation.
SECTION 3.4. Vice President.
(a) In the event of the absence or disability of the President,the Vice President shall discharge the
powers and duties of the President.
(b) The Vice President shall perform such additional duties as may be assigned from time to time
by the Board of Directors.
SECTION 3.5. Secretary.
(a) The Secretary shall have charge of the records and correspondence of the A°Y y
Corporation under the direction of the President.
(b) The Secretary is responsible for the giving of notice of meetings of the Board of Directors.
(c) The Secretary shall attend the Board of Directors meetings and shall take and keep minutes of,
and record all votes cast at,the meetings.
(d) The Secretary shall discharge such other duties as may be assigned from time to time by the
President or the Board of Directors.
SECTION 3.6. Assistant Secretary.
(a) In the event of the absence or disability of the Secretary, the Assistant Secretary shall
discharge the powers and duties of the Secretary.
(b) The Assistant Secretary shall perform such additional duties as may be assigned from time to
time by the Board of Directors.
SECTION 3.7. Treasurer.
(a) To the extent not otherwise provided in any resolution of the Board of Directors relating to the
issuance of bonds or other obligations of the.''°,�—`—C:_:ofporation to instruments authorized by the Board of
TSHA.BYLAWS-Page 4
TAM.v 1.4/20/2004
Directors to provide security therefor,the Treasurer shall have the custody of all the funds and securities of the
A-utl��-C t�s�,D0rat.ii»7._and shall deposit them to the credit of the A�rtl city C c 1.13c>_ tigi.i,in such banks or other
depositories as the Board of Directors may designate.
(b) The Treasurer shall keep proper books of account and other records showing at all times the
amount of the funds and other property belonging to the Aught =Corporation of all receipts and
disbursements of the A no'Comoration.
(e) Under the direction of the Board of Directors,the Treasurer shall disburse all money and sign
all checks and other instruments drawn on or payable out of the funds of the.^+ACor..,oration and shall
make transfers and other dispositions of the funds and securities of the Aut CC moratio�i as may be
ordered by the Board of Directors.
(d) The Treasurer shall also discharge such additional duties as may be assigned from time to time
by the Board of Directors.
(e) Upon the request of the President and/or the Board of Directors,the Treasurer shall render an
accounting of all transactions of the Treasurer and of the financial condition of the A-i+ i; =Corporation.
(f) The Treasurer shall give bond only if required to do so by the Board of Directors.
SECTION 3.8. Assistant Treasurer.
(a) In the event of the absence or disability of the Treasurer, the Assistant Treasurer shall
discharge the powers and duties of the Treasurer.
(b) The Assistant Treasurer shall perform such additional duties as may be assigned from time to
time by the Board of Directors.
SECTION 39. Executive Director.
(a) The Executive Director shall be appointed by the President,on terms approved by the Board
of Directors and consented to by the Beafd of^ldefl=i°n Town Council.In connection with the employment of
the Executive Director,the m-*- Cc-rppr�jt-i'gi*shall enter into an employment contract with the Executive
Director, which contract shall be approved by the Board of Directors and consented to by the Beaf"
Aldeizffleii Town Council.
(b) The Executive Director shall
(i) report and be accountable to the Board of Directors, the
, and the President,
(ii) carryout instructions given by the President, and
(iii) be subject to removal(for cause or without cause)at anytime by the President and/or
the
TSHA.BYLAWS—Page 5
TAKN11.4/20/2004
(c) If the Executive Director is removed, the Au E.-+ €N-_C'orporatioi' shall hire, as a successor
Executive Director,the person appointed by the President on terms approved by the Board of Directors and
consented to by the
(d) Without any action by the Board of Directors,the Executive Director shall serve ex gfflicio as
both Assistant Secretary and Assistant Treasurer.
SECTION ').10. Compensation of Officers.
Officers who are not Directors may receive compensation for their services as officers on terns
approved by the Board of Directors.
ARTICLE IV
MEETINGS
SECTION 4.1. Meetings of Directors.
(a) The Board of Directors shall hold its meetings at the principal office of the
-uth w- C.--oit_ion provided that if the President determines that with respect to ally regular orspecial
meeting,an alternative meeting place is appropriate,the President may designate an alternative place for such
meeting.
(b) The time and place of each meeting of the Board of Directors shall be provided in each notice
of meeting.
(c) Regular meetings of the Board of Directors shall be held at the times designated by resolution
of the Board of Directors.
(d) Special meetings of the Board of Directors shall be held whenever called by the President or
the Secretary or by the Board of Directors at the time and place specified by the officer calling the special
meeting.
(e) Unless otherwise indicated in the notice of a special meeting, any matter that may be acted
upon by the Board of Directors at a regular meeting may be acted upon at a special meeting.
(f) Except as otherwise provided by law,notice to Directors of a regular meeting is not required.
Notice of the time and place of each special meeting shall be given to each Director (either by personal
delivery, United States mail, telephone, telecopy, or any other lawful means) not later than two hours in
advance of the meeting. Notice of any Board of Directors meeting to persons other than Directors shall be
given if and to the extent required by law.
(g) Attendance by a Director at a meeting shall constitute a waiver by the Director of any notice of
meeting,unless the Director attends the meeting for the express purpose of objecting to the transaction of any
business on the grounds that the meeting is not lawfully called or convened. A waiver of a notice in writing,
signed by any person entitled to notice(whether before or after the tirne for giving the notice)shall be deemed
to be the equivalent to the giving of notice.
SECTION 4.2. Quorum.
TSHA.BYLAWS-Page 6
TAM.v 1.4!20/2004
A majority of the number of Directors fixed by these bylaws as constituting the Board of Directors
shall constitute a quorum for the transacting of the business of the A-+ `+y(orp'o-ra_t 7n. The act of a majority
of the Directors present at ameeting at which a quorum is in attendance shall constitute the act of the Board of
Directors except as otherwise required by law or by these Bylaws.
SECTION 4.3. Order of Business.
The Board of Directors shall consider the matters before it in such order as the presiding officer of the
Board of Directors may determine.
ARTICLE V
ADMINISTRATION
SECTION 5.1. Staffing.
(a) Upon the recommendation of the President and the approval of the Board of Directors, the
A-�•Viefity—_Qojr)oratios�__may hire full or part-time employees to carry out the functions of the
(b) Staff functions of the A�C,oworat_ion may be performed by employees of the Town if
and to the extent approved by the Beard f"ldeF::en Town Council and if the Town is reimbursed for all
actual costs of the performance of the staff functions.
(c) The Executive Director shall be the senior staff member of the and all
employees of the-A+F ity Corporation shall report to the Executive Director.
SECTION 5.2. Engagement of Consultants.
(a) To assist the At"F4�=Cor oration in acquiring, financing, and managing the 4iefit�,,-Is
Corljoration.'s projects and administering the Student Assistance Program and other activities of the
_- �,{;orporation,the Authority shall retain a general counsel(the"General Counsel"),a finance counsel
(the"Finance Counsel"), a special finance counsel (the"Special Finance Counsel"), a financial adviser(the
"Financial Adviser"), and a real estate and finance consultant(the "Real Estate and Finance Consultant").
Collectively,the General Counsel,the Finance Counsel,the Special Finance Counsel,the Financial Adviser,
and the Real Estate and Finance Consultant shall be referred to as the "Consultants."
(b) Each of the Consultants shall be designated by resolution of the Board of Directors and the
Boafd of A ldefnien Town Council and shall be responsible directly to the President,the Board of Directors,
and the BeaFd efAldefmen Town Council.
(e) Each of the Consultants shall be employed pursuant to a written agreement that (i) shall
preclude the Consultants from having any conflicts-of-interest with either the A titer._,or�E�i7t_i��n._or the
Town and (ii) shall prescribe the compensation payable to the Consultant. With respect to the relationship
between the A-utli-er-ity-Corporation and the Town,the interest of the Town shall be paramount.
(f) The General Counsel shall not be compensated for services rendered.
(g) Each Consultant entitled to compensation shall be compensated on the basis of effort and,as a
condition to being compensated,shall furnish the Board of Directors with a written statement that describes in
TSHA.BYLAWS-Page 7
TAMvI A/20/2004
reasonable detail the services rendered,the number of hours spent in rendering the services,and the amount
charged for the services.
SECTION 5.3. Responsibilities of Executive Director.
The Executive Director shall be responsible for the following:
(a) If the A-€+#Kii ty-Corporation has oversight responsibilities, including, but not limited to,
approval of budgets,monitoring the perfonnance of the A+tl+€ y C>rpor_atic t�ss.property manager(s)(if any),
obtaining insurance, and other related matters, for any project that the Autlw+t-�—C'rppc at on—has financed
and/or owns, the Executive Director, with respect to the provisions that are contained in the documents
governing the acquisition,financing,operations,and management of the project(collectively,such documents
shall be referred to as the "Project Administration Documents"), shall certify in writing to the Board of
Directors at least once each calendar quarter the following:
(1) the is in compliance with all material requirements applicable
to the A-u�ri -Corporation that are contained in the Project Administration Documents,
(ii) the project is being managed by the Authority's property manager(s)in compliance
the Project Administration Documents,
(iii) the budget for the project has been timely submitted to the Board of Directors and is in
compliance with the Project Administration Documents, and
(iv) such other matters as may be requested by the President and/or the Board of Directors.
(b) If the Executive Director is unable to certify to the matters referred to in Section 5.3(a)above,
the Executive Director shall provide a written statement to the President stating in reasonable detail the reasons
that the Executive Director cannot make such certification.
(c) No later than 60 days prior to the beginning of each fiscal year,the Executive Director shall
prepare and submit to the Board of Directors an annual budget containing all material revenues and expenses
relating to all corporate activities of the A-€+t�--Cor n}oratioji.
(d) With respect to any project budget that is required to be approved by the Board of Directors,
the Executive Director shall make written recommendations to the Board of Directors regarding the budget.
(e) The Executive Director shall provide to the Board of Directors and the BeaFd of ldei-Men
Town Council a monthly transaction report showing all income received and expenses paid during each
calendar month. Upon the request of the President or a majority of the Board of Directors, the Executive
Director shall provide any financial report,to the extent reasonably possible,to the Board of Directors and the
Beard f A'dean°^ Town Council.
(f) In performing the duties assigned to the Executive Director, the Executive Director shall
confer with each of the Consultants to the extent the Executive Director believes that consultation is
appropriate to assure that the duties of the Executive Director will be performed properly.
SECTION 5.4. Records.
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TAM.vl.4/20/2004
(a) The t 4--Corz�ario_n,shall keep complete corporate and financial records,including all
banking records, and minutes of the proceedings of its Board of Directors and of committees (if any)of the
Board of Directors in accordance with applicable law.
(b) The records and minutes shall be made available for inspection at all reasonable times by any
(i) Director, and
(ii) Town representative authorized by the ° •a efAidefiBe Town Council.
(c) The Secretary and Assistant Secretary,under the supervision of the Executive Director,shall
be responsible for keeping and maintaining the Al. » Corporation's records.
SECTION 5.5. Authorization to Write Checks.
The President,the Treasurer,the Executive Director,the Assistant Treasurer and the Secretary each
E,t,.,..,+.� C;
shall be authorized to write checks on behalf of the n,� orj)orationfrom any bank or trust account
maintained by the r^. =Corporation for any purpose authorized by the Board of Directors;provided tat,
with respect to any check in excess of$5,000,the check must be signed by two officers at least one of which
must be a Director.
SECTION 5.6. Administrative Fees.
The s��- may prescribe fees payable by applicants for financial participation and/or
assistance by the ' hFCorpc?ration and such other fees and charges as the Board of Directors detennines
appropriate to defray the administrative expenses incurred in the operation of the A€ut4+&F4-y Corporation or to
be used for any other lawful purposes.
SECTION 5.7. Fiscal Year.
i The fiscal year of the."•
- HFrCorporation shall be the annual period determined by resolution of the
Board of Directors.
SECTION 5.8. Amounts Owning to Town.
The +iq C:orvoration_.shall pay any amounts owed to the Town for pennitting its employees to
provide staffing for the A Corporation upon receipt(or as promptly thereafter as practicable)from any
of its funds available for such payment.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Time for Taking Effect.
These Bylaws shall take effect upon their adoption by the Board of l defff e Town Council and the
Board of Directors.
SECTION 6.2. Seal.
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TAM.v l.4/20/2004
The official seal of the.^ .<rp<> Itt�n...shall be as determined by the Board of Directors. The
I seal shall not be necessary to the proper execution by the officers of the lty-C:or}3oratio« of any
document or instrument unless otherwise specified by the Board of Directors.
SECTION 6.3. Amendments.
These Bylaws may be amended at any time, and from time to time, by resolutions adopted by the
Board of Directors and the Beafd of kideimeft Town Council.
SECTION 6.4. Interpretation.
These Bylaws shall be liberally construed to effect the purposes of the Ado Corporation. If any
part of these Bylaws is ruled invalid by a court of competent jurisdiction,the remainder of these Bylaws shall
remain in effect to the fullest extent possible under the application of such ruling. References in these Bylaws
to the singular number shall include the plural and vice versa(unless the context otherwise.requires).
SECTION 6.5. Special Requirements.
The -Corporation shall comply with the following special requirements:
j
2o
(a) The " �a �:��r ratioij_shall maintain its books and records separate and apart from any
other legal entity.
(b) The k==tjjari-Ay Corporation shall not commingle its assets with the assets of any other legal
entity.
(c) The ion shall maintain financial records separate from any other legal
entity.
j (d) The A+Al+e Corporation shall maintain an"anus-length"relationship with all other legal
entities except as otherwise may be required by law.
{e) The A ,C )jp_gjtgbon._shall pay the salaries of its own employees.
SECTION 6.6. Financial Relationship with Town.
(a) As the duly created instrumentality of the Town,the����:=-�=wg- ,c?rp{?�'at�o��shail be required to
compensate the Town for overseeing the activities of the - -oorat`ton and providing facilities and
staff to the At efit-YCorporation. Upon receipt of a resolution adopted by the B ' "' °ri"°" Town
Council assessing an oversight and facilities fee payable by the �Cor.orationto the Town, the
Authe:ity- tion shall be obligated to pay the fee in the amount and on terms authorized by the Baa l e€
^ �nen Town Council without any action being the
to be taken by the Board of Directors.
Notwithstanding any provision in these Bylaws,the President and/or the Executive Director shall be authorized
to pay any fees payable by the at e-Corporatio to the Town by check or otherwise without any action
being required to be taken by any other officer or director.
(b) As the duly created instrumentality of the Town, upon dissolution of the
A-�l i CorPoratio ,the following actions shall be taken:
TSHA.BYLAWS-Page 10
TAMA.4/20/2004
1„�i!„�re4e�
(i) all assets, including real and personal property of all types, owned by the �r�
Cor��oratiorl at the time of such dissolution shall be transferred to the Town after all debts, liabilities, and
obligations of the A+Ah-a=ity—C'orpof'ation have been paid or otherwise satisfied without any action being
required to be taken by the Board of Directors, and
(ii) the officers and directors of the A,# Corporation shall take any action necessary
or appropriate to effect the transfer of the Authority's assets to the'Town.
TSHA.BYLAWS—Page I I
TAM.vi.4/20/2004
IL UD-E-`NT HousING
MINUTES OF THE MEETING OF
THE BOARD OF DIRECTORS OF THE
TEXAS STUDENT HOUSING CORPORATION—DENTON PROJECT
(AN INSTRUMENTALITY OF THE TOWN OF WESTLA )
June 17, 2008
PRESENT: Chair Jim Carter and Directors George Ledak, Jac Irvine, and Chuck Schultz.
ABSENT: Directors Jill McKean, Larry Darlage, and Melanie Lekkos.
OTHERS PRESENT: President Hank Smyth, General Counsel Scott Bradley, Finance
Manager Pete Ehrenberg, and Secretary Kim Sutter.
1. CALL TO ORDER.
Chairman Carter called the meeting at 7:09 p.m.
2. CONSIDER APPROVAL OF MINUTES OF THE MEETING OF THE TEXAS
STUDENT HOUSING CORPORATION—DENTON PROJECT HELD JANUARY
29,2008.
Chair Carter introduced the item and asked for a motion:
MOTION: Director Ledak made a motion to approve the minutes as presented.
Director Irvine seconded the motion. The motion carried by a vote of 4-0.
3. CONSIDER APPROVAL OF THE FY 2008-2009 BUDGET.
Finance Manager Pete Ehrenberg addressed the Board regarding the item and advised
that the budget is based on an occupancy of 85%. .
MOTION: Director McKean made a motion to approve the FY 2008-2009 budget as
presented. Director Ledak seconded the motion. The motion carried by a
vote of 4-0.
TSHC—Denton Project Page 2 of 2
Minutes
June 17,2008
4. ADJOURN.
There being no further business before the Board, Chairman Carter declared the meeting
adjourned at 7:12 p.m.
The Minutes are approved and certified to be a true and correct reflection of the actions of the
officers and members of the Board, and is hereby certified to be an official copy thereof, on file
among the official records of the Board, on this the 20 day of January 2009.
Jim Carter, Chairman
ATTEST:
Kim Sutter, TRMC, Secretary