HomeMy WebLinkAbout01-20-09 TSHA Agenda Packet TEXAS
STUDENTLHOUSING
AGENDA
BOARD OF DIRECTORS OF THE
TEXAS STUDENT HOUSING AUTHORITY
(AN INSTRUMENTALITY OF THE TOWN OF WESTLAKE)
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 TEXAS STUDENT HOUSING
AUTHORITY_ AUDIT FOR FY 2007-2008 PRESENTED BY PATILLO BROWN&HILL,
L.L.P.
3. DISCUSS AND CONSIDER APPROVAL OF BALLPARK PROPERTY ANNUAL AUDIT
FOR FY 2007-2008 PRESENTED BY PATILLO BROWN&HILL,L.L.P.
4. DISCUSS AND CONSIDER APPROVAL OF TOWNLAKE ANNUAL AUDIT FOR FY
2007-2008 PRESENTED BY PATILLO BROWN&HILL.,L.L.P.
5. DISCUSS AND CONSIDER APPROVAL OF CAMBRIDGE ANNUAL AUDIT FOR FY
2007-2008 PRESENTED BY PATILLO BROWN&HILL,L.L.P.
6. DISCUSS AND CONSIDER APPROVAL OF AMENDED BYLAWS.
7. EXECUTIVE DIRECTORS' REPORT.
S. CONSIDER APPROVAL OF A SCHOLARSHIP CONSULTANT AGREEMENT FOR
THE 2009-2010 SCHOLARSHIP CYCLE.
9. CONSIDERATION OF RENEWAL SCHOLARSHIPS FOR 2009-2010.
10. REVIEW AND APPROVE MINUTES OF SEPTEMBER 16,2008.
11. REVIEW AND APPROVE MINUTES OF OCTOBER 14,2008.
12. ADJOURN.
TEXAS STUDENT HOUSING AUTHORITY
FINANCIAL REPORT
AUGUST 31, 2008
TEXAS STUDENT HOUSING AUTHORITY
TABLE OF CONTENTS
AUGUST 31,2008
Page
Number
FINANCIAL SECTION
Independent Auditors' Report............................................................................................. 1
Management's Discussion and Analysis ............................................................................
Financial Statements:
Statementof Net Assets................................................................................................... 4
i
Statement of Revenues, Expenses and Changes in Net Assets........................................ 5
Statementof Cash Flows ................................................................................................. 6
Notes to Financial Statements.......................................................................................... 7 — 10
SUPPLEMENTAL INFORMATION
Budgetary Comparison Schedule........................................................................................ 11
FINANCIAL STATEMENTS
W,
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Texas Student Housing Authority
Westlake, Texas
We have audited the accompanying financial statements of Texas Student Housing Authority (the
"Authority") (a component unit of the Town of Westlake), as of and for the year ended August 31, 2008,
which collectively comprise the Authority's basic financial statements, as listed in the table of contents.
These financial statements are the responsibility of the Authority'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.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Texas Student Housing Authority as of August 31, 2008, and the respective
changes in its 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 management's discussion and analysis on pages 2 through 3 is not a required part of the
basic financial statements but is 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 financial statements that
collectively comprise the Authority's basic financial statements. The accompanying supplemental
information on page 11 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 basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
P00a/ d %�4,L.L. R
January 14, 2009
1
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-4901 ■FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■WHITNEY,TX(254)694-4600■ALBUQUERQUE,NM(505)266-5904
MANAGEMENT'S
DISCUSSION AND ANALYSIS
MANAGEMENT'S DISCUSSION AND ANALYSIS
As staff of the Texas Student Housing Authority (the "Authority"), we offer the readers of the
Authority's financial statements this narrative overview and analysis of the financial activities of the
Authority for the fiscal year ended August 31, 2008. We encourage readers to consider the information
presented herein in conjunction with the Authority's financial statements. The Authority is a component
unit of the Town of Westlake and is considered a governmental entity; accordingly, the Authority has
adopted Governmental Accounting Standards Board Statement 34, Basic Financial Statements—and
Management's Discussion 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 Authority itself.
Properties managed by the Authority are reported individually by property under separate cover.
FINANCIAL HIGHLIGHTS
• The assets of the Authority exceeded its liabilities at the close of the fiscal year by
$337,876, a decrease of $210,904 over the prior fiscal year. All of the assets and
liabilities of the Authority are classified as current.
• At the end of the current fiscal year, the total cash balances were $393,264, a decrease
of$229,206 over the prior fiscal year. The main factor was the increase in oversight
fees paid to the Town of Westlake. The Authority paid $200,000 more than FY 2007.
• All revenues are generated from management of the properties and scholarship
activity of the authority and totaled $1,029,550. Total expenses incurred were
$1,292,170.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Authority's basic financial
statements. The Authority'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 statement of net assets presents information on the Authority's assets and liabilities with the
difference between the two reported as net assets.
The statement of revenues, expenses and changes in net assets accounts for all of the Authority's
revenues and expenses regardless of when cash is paid or received.
The statement of cash flows reflects cash inflows and outflows by operating, noncapital financing and
capital related financing activities during the year.
2
NOTES TO THE FINANCIAL STATEMENTS
The notes provide additional information that is essential to a full understanding of the data provided in
the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
It is anticipated that fiscal year 2008/2009 will end with less income to the Authority as we have
increased scholarships at our overflow facility in College Station.
CONTACTING THE AUTHORITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide the reader with a general overview of the Authority's finances
and to demonstrate the Authority'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.
3
TEXAS STUDENT HOUSING AUTHORITY
STATEMENT OF NET ASSETS
j AUGUST 31, 2008
ASSETS
Current assets:
Cash
$ 393,264
Accounts receivable
32,947
Prepaid expenses
5,236
Total current assets
431,447
Total assets
431,447
LIABILITIES
Deferred revenue
93,571
Total liabilities
93,571
NET ASSETS
Unrestricted
337,876
Total net assets $ 337,876
The accompanying notes are an integral part of these financial statements.
4
TEXAS STUDENT HOUSING AUTHORITY
I
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 2008
OPERATING REVENUES
Basic property administration
$ 240,491
Scholarship value
492,600
Scholarship administration
296,459
Total operating revenues
1,029,550
OPERATING EXPENSES
Scholarship
492,600
Scholarship expense
239,756
Labor
214,054
Professional fees
5,000
Oversight fee
300,000
Office and other
40,760
Total operating expenses
1,292,170
OPERATING LOSS ( 262,620)
NONOPER NTING REVENUES (EXPENSES)
Interest income 18,408
Other income 33,308
Total nonoperating revenues (expenses) 51,716
CHANGE IN NET ASSETS ( 210,904)
NET ASSETS, BEGINNING 548,780
NET ASSETS, ENDING $ 337,876
The accompanying notes are an integral part of these financial statements.
5
it
TEXAS STUDENT HOUSING AUTHORITY
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from scholarships and scholarship properties
Cash paid to contract services
i Cash paid to others
Net cash used for operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Miscellaneous other income
Net cash provided by investing activities
NET CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,BEGINNING
CASH AND CASH EQUIVALENTS,ENDING
RECONCILIATION OF OPERATING GAIN TO
NET CASH USED FOR OPERATING ACTIVITIES
Operating loss
Adjustments to reconcile operating income to
net cash provided(used)by operating activities:
Accounts receivable
Deferred revenue
Net cash used for operating activities
The accompanying notes are an integral part of these tmancial statements.
10
$ 1,011,248
( 214,054)
( 1,078,116)
( 280,922)
18,408
33,308
51,716
( 229,206)
622,470
$ 393,264
$( 262,620)
1,345
( 19,647)
$( 280,922)
TEXAS STUDENT HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2008
I. GENERAL STATEMENT
Texas Student Housing Authority (the "Authority"), a higher education authority, was established
on January 23, 1995, as a duly constituted authority of the Town of Westlake (the "Town"), Texas,
pursuant to Section 53.11 of Chapter 53 of the Texas Education Code, as amended. The
Authority's purpose among other things is to acquire, finance, and operate student housing
facilities and to provide scholarships to students from high schools and community colleges in
Texas. The Authority operates several student housing projects in Texas. The accompanying
financial statements do not present the projects, but the scholarship administration of the Authority.
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Authority's significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
A. ReportinL,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 Accountability — 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 government or a jointly appointed
board.
(continued)
7
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Measurement Focus and Basis of Accounting
Measurement focus refers to what is being measured; basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the financial
statements. The Authority uses the economic resources measurement focus and the accrual
basis of accounting. The economic resources measurement focus means all assets and
liabilities (whether current or noncurrent) are included on the statement of net assets and the
operating statement present increases (revenues) and decreases (expenses) in net total assets
under the accrual basis of accounting, revenues are recognized when earned, and expenses
are recognized at the time the liability is incurred.
In applying the requirements of GASB Statement No. 20, the Authority 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 Authority 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.
Cash and Cash Equivalents
The Authority considers all highly liquid investments with maturity of three months or less
when purchased to be cash equivalents. At August 31, 2008, the Authority had no such
investments included in cash and cash equivalents.
Accounts Receivable
Accounts receivable are stated at amounts management expects to collect from outstanding
balances. 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. As of August 31, 2008, management has determined that all accounts doubtful of
collection have been charged to operations and an allowance is not required.
Capital Assets
Texas Student Housing Authority utilizes space within the Town of Westlake offices and
does not have capital assets at this time.
III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
The Public Funds 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
Authority 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 Authority holds all of its cash
and investments with commercial banks.
Concentration of Credit Risk
Texas Student Housing Authority holds no investments at August 31, 2008, and is not
exposed to concentration of credit risk.
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 counterparty 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 Authority's cash balances totaled $393,264 (bank balance of
$396,105). Of the bank balance, $100,000 was covered by federal depository insurance
while the remaining amount was collateralized by a Bank Deposit Guarantee Bond from the
Authority's depository in the amount of$296,105.
(continued)
9
III. DETAILED NOTES ON ALL FUNDS (Continued)
B. Net Assets
Net assets represent the residual assets after liabilities are deducted. These assets are
reported in the following categories:
Unrestricted Net Assets consists of the portion of net assets after invested in
capital assets, net of related debt and restricted for net assets has been satisfied.
At August 31, 2008, the Authority has no restricted net assets or capital assets.
All net assets are unrestricted.
C. Concentrations
The Authority services scholarships for Texas students attending Texas higher education
facilities and is dependent upon the geographic areas and the higher education facilities in
Texas.
D. Related Party Transactions
The Town of Westlake charges an oversight fee to the Authority. The fee of $300,000 is
included in expenses at August 31, 2008. The Authority also received revenues of$240,491
related to its oversight of the various properties.
10
SUPPLEMENTAL INFORMATION
TEXAS STUDENT HOUSING AUTHORITY
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED AUGUST 31,2008
11
Budget
Actual
Variance
REVENUES
Basic property administration
$ 259,316
$ 240,491
$( 18,825)
Scholarship value
492,600
492,600
-
Scholarship administration
315,428
296,459
( 18,969)
Interest income
50,000
18,408
( 31,592)
Other income
25,000
33,308
8,308
Total revenues
1,142,344
1,081,266
( 61,078)
EXPENDITURES
Scholarships
492,600
492,600
-
Scholarship expense
252,120
239,756
12,364
Contract labor
230,000
214,054
15,946
Professional fees
7,400
5,000
2,400
Contingency fund
100,000
300,000
( 200,000)
Office and other
45,320
40,760
4,560
Total expenditures
1,127,440
1,292,170
( 164,730)
CHANGE IN NET ASSETS OVER EXPENSES
14,904
( 210,904)
( 225,808)
NET ASSETS, BEGINNING
548,780
548,780
-
NET ASSETS, ENDING
$ 563,684
$ 337,876
$( 225,808)
11
TEXAS STUDENT HOUSING AUTHORITY
BALLPARK AUSTIN PROJECT
FINANCIAL REPORT
AUGUST 31, 2008
TEXAS STUDENT HOUSING AUTHORITY
BALLPARK AUSTIN PROJECT
TABLE OF CONTENTS
AUGUST 31,2008
Page
Number
FINANCIAL SECTION
Independent Auditors' Report............................................................................................. 1 —2
Management's Discussion and Analysis ............................................................................ 3 -6
Financial Statements:
Statement of 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
IV4
PATTILLO, BROWN & HILL, L_L.P_
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Texas Student Housing Authority—
Ballpark Austin Project
Westlake, Texas
We have audited the accompanying financial statements of Texas Student Housing Authority —
Ballpark Austin Project (the "Project"), as of and for the year ended August 31, 2008, as listed in the
table of contents. Texas Student Housing Authority—Ballpark Austin Project is a component unit of the
Town of Westlake. These financial statements are the responsibility of the Project 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 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 Authority as of August 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 Authority — Ballpark Austin Project at August 31,
2008, and the respective changes in its 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—Ballpark Austin 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 the Trustee or Service Agent may
choose to continue as a going concern. Management's plans in regard to these matters are discussed in
Note I. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
1
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)7724901 ■FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■WHITNEY,TX(254)694-4600■ALBUQUERQUE,NM(505)266-5904
The management's discussion and analysis on pages 3 through 6 is not a required part of the
basic financial statements but is supplementary 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 financial statements that
collectively comprise the Texas Student Housing Authority — Ballpark Austin Project's basic financial
statements. The accompanying supplemental information on pages 20 and 21 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 basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Pte, � �ld, c L a
January 14, 2009
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
As staff of the Texas Student Housing Authority (the "Authority") — Ballpark Austin 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 Authority 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 Discussion 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
$11,731,496. Of this liability, a total of$338,450 is carried as a liability to JPI, the
former management company, and management is of the opinion that pending a
settlement with JPI, this liability may be forgiven.
• Operating revenue of $3,540,628 is $140,215 more than budget, and operating
expense is $36,878 less than budget, not including depreciation and amortization.
• At the end of the current fiscal year, the total cash balances were $700,599 in
unrestricted cash and $1,886,562 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 1
TEXAS STUDENT HOUSING AUTHORITY-
BALLPARK AUSTIN PROJECT
NET ASSETS
Current and other assets
Capital assets
Total assets
Long-term liabilities
Other liabilities
Total liabilities
Net assets:
Invested in capital assets,
Business-
2008
$ 5,357,557
24,949,032
30,306,589
36,173,009
5,865,076
42,03 8,085
Activities
$ 5,351,810
25,917,825
31,269,635
36,637,924
4,568,587
41,206,511
net of related debt ( 10,358,977) ( 9,855,099)
Restricted ( 1,877,960) ( 719,602)
Unrestricted 505,441 637,825
Total net assets $( 11,731,496) $( 9,936,876)
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-
BALLPARK AUSTIN PROJECT
CHANGES IN NET ASSETS
Business-type Activities
Total operating revenue
$ 3,540,628
Total operating expenses
2,779,670
Total operating income
760,958
Interest income
111,411
Interest expense
( 2,666,989)
Total nonoperating loss
( 2,555,578)
CHANGE IN NET ASSETS
( 1,794,620)
NET ASSETS,BEGINNING
( 9,936,876)
NET ASSETS,ENDING
$( 11,731,496)
The statement of cash flows recaps how cash changed from year to year.
4
$ 3,359,388
2,964,501
394,887
134,855
( 2,246,094)
( 2,111,239)
( 1,716,352)
( 8,220,524)
$( 9,936,876)
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:
Bond Fund, Series 2001A Senior Interest
$ 117,358
Bond Fund, Series 200113 Sub B
12,977
Bond Fund, Series 2001C Sub C
16
Debt Service Reserve 2001A Senior
1,579,129
Debt Service Reserve 2001B Sub B
861
Repair and Replacement Fund
1,311
Minimum Scholarship Fund
1,939
Trustee Fee Fund
3
Tax and Insurance Fund
13,006
Senior Bonds Principal
157,029
Sub B Bond Principal
2,933
Total
$ 1,886,562
Nonrestricted cash. Nonrestricted cash is available for general use of the Project.
Bonds payable. As of August 31, 2008, the following amounts on the Series A, B and C Bonds were
owed:
Series A $ 31,345,000
Series B 2,365,000
Series C 3,000,000
Less discounts ( 1,401,991)
Total $ 35,308,009
For the fiscal year ending August 31, 2008, the total principal and interest payment is calculated at
$2,962,341. A total of$560,000 in principal was paid during 2008.
Fixed charge cover ratio. The bond indenture provides for a fixed charge coverage ratio of 1.25 when
payments on the A and B Bond Series are considered and 1.15 when payments on the C Bond Series are
added. At this time, the Project has only realized a ratio of .87 and .77, respectively, and is thus
technically in default of the indenture.
5
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
Leases at the Project are primarily 12-month leases, however, due to competitive and market conditions,
a relatively minor number of 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, indicates a substantial increase
to 100%; however, rental rates, again due to competitive pressures, will not see an increase.
Net operating revenue for next year is projected at $1,623,819. This negative gap between cash
available for debt service and cash required for debt service will result in the necessity to invade the
Series A debt service reserve funds.
CONTACTING THE PROJECT'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.
G
TEXAS STUDENT HOUSING AUTHORITY
BALLPARK AUSTIN PROJECT
STATEMENT OF NET ASSETS
AUGUST 31,2008
ASSETS
Current assets:
Cash
Restricted cash
Accounts receivable
Prepaid expenses
Total current assets
Capital assets:
Land
Other capital assets,net of accumulated depreciation
Total capital assets
Intangible assets:
Deferred financing costs, net of amortization
Total intangible assets
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Management and development fees payable
Accrued liabilities
Deferred revenue and prepaid rent
Accrued interest
Bonds payable
Total current liabilities
Long-term liabilities:
Bonds payable
Deferred purchase price
Total long-term liabilities
Total liabilities
NET ASSETS
Invested in capital assets,net of related debt
Restricted for debt service
Unrestricted
Total net assets
$ 700,599
1,886,562
B,390
8,225
2,610,776
4,788,265
20,160,767
24,949,032
2,746,781
2,746,781
30,306,589
112,699
496,483
352,241
544,131
3,764,522
595,000
5,865,076
34,713,009
1,460,000
36,173,009
42,03 8,085
( 10,358,977)
( 1,877,960)
505,441
$( 11,731,496)
The accompanying notes are an integral part of these financial statements.
7
TEXAS STUDENT HOUSING AUTHORITY
BALLPARK AUSTIN PROJECT
STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31,2008
OPERATING REVENUES
Rental income
Other income
Total operating revenues
OPERATING EXPENSES
Personnel
Contract services
Utilities
Repairs and maintenance
Turnover
Advertising and promotion
Administration
Management fees
Replacements
Depreciation
Amortization
Total operating expenses
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest income
Interest expense
Total nonoperating revenues (expenses)
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING
NET ASSETS, ENDING
$ 3,516,568
24,060
3,540,628
309,229
58,928
565,936
57,025
181,216
94,025
169,308
194,656
174
968,794
180,379
2,779,670
760,958
111,411
( 2,666,989)
( 2,555,578)
( 1,794,620)
( 9,936,876)
$( 11,731,496)
The accompanying notes are an integral part of these financial statements.
8
TEXAS STUDENT HOUSING AUTHORITY
BALLPARK AUSTIN PROJECT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31,2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants
Miscellaneous other income
Cash paid to employees
Cash paid to suppliers
Net cash provided by operating activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments on bonds payable
Interest paid
Net cash provided by capital and related financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments
Net cash provided by investing activities
NET CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,BEGINNING
CASH AND CASH EQUIVALENTS,ENDING
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization
Changes in operating assets and liabilities:
Accounts receivable
Trade accounts payable
Deferred revenue
Other current liabilities
Net cash provided by operating activities
The accompanying notes are an integral part of these financial statements.
9
$ 3,839,918
24,060
( 289,336)
( 1,271,994)
2,302,648
525,000)
1,742,146)
2,267,146)
111,411
111,411
146,913
2,440,248
$ 2,587,161
$ 760,958
1,149,172
20,872
49,275
302,478
19,893
$ 2,302,648
TEXAS STUDENT HOUSING AUTHORITY—
BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2008
L GENERAL STATEMENT
Texas Student Housing Authority (the "Authority"), a higher education authority, was established
on January 23, 1995, as a duly constituted authority of the Town of Westlake, Texas, pursuant to
Section 53.11 of Chapter 53 of the Texas Education Code, as amended. The Authority's purpose
among other things is to acquire, finance, and operate student housing facilities. The Authority
operates several student housing facilities in Texas and one of the housing projects is the Ballpark
Austin Project (the "Project"). The Project was purchased from Jefferson Commons — Austin,
L.P., a Delaware limited partnership on December 27, 2001. The Project obtained its financing
through the issuance of Texas Student Housing Authority — Student Housing Revenue Bonds
(Austin, Texas Project), Series 2001A, Series 2001B and Subordinate Series 2001C. The bonds
were issued through a trust indenture by and between the Authority and the Bank of New York,
the, trustee. The Series 2001A, 2001B and Subordinate Series 2001C Bonds were issued in the
face amounts of $34,175,000, $2,470,000 and $3,000,000, respectively. The accompanying
financial statements present the operations of the Project, whose revenue streams are pledged for
the bonds described herein.
The 2007 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 full.
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.
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Project's significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
A. Reporting 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:
(continued)
10
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity (Continued)
Financial Accountability — 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 government 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.
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 $1,886,562 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 $111,411. See Note III for risk
disclosures and breakdown of restricted cash accounts.
(continued)
11
I1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Assets, Liabilities and Net Assets or Equity (Continued)
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. As
of August 31, 2008, management has determined that all accounts doubtful of collection have
been charged to operations and an allowance is not required.
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 $94,000.
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.
F,xpenditures 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.
The trust indenture (dated December 1, 2001) provides for a repair and replacement fund
requirement. The covenant states that no less frequently than every five years following the
date of issuance of the bonds, the Project will cause a professional engineer or firm of such
engineers to conduct a physical assessment of the Project and to submit a written report
concerning the physical condition of the Project and the engineer's recommendations for
capital improvements needed at the Project.
Depreciation is computed using the straight-line method over the estimated useful lives as
follows:
Estimated
Asset Class Useful Lives
Building
Furniture,fixtures and equipment
12
30
3 -20
III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
At August 31, 2008, the carrying amount of Texas Student Housing Authority — Ballpark
Austin Project deposits (cash with interest bearing accounts and restricted cash held in
interest bearing accounts)was in total $2,587,161 of which $1,886,562 represented restricted
cash. The following is the breakdown of the 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
Bond Fund, Series 2001A Senior Interest
$ 117,358
Bond Fund,Series 2001 B Sub B
12,977
Bond Fund, Series 2001C Sub C
16
Debt Service Reserve 2001A Senior
1,579,129
Debt Service Reserve 2001B Sub B
861
Repair and Replacement Fund
1,311
Minimum Scholarship Fund
1,939
Trustee Fee Fund
3
Tax and Insurance Fund
13,006
Senior Bonds Principal
157,029
Sub B Bond Principal
2,933
Total
$ 1,886,562
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.
(continued)
13
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Restricted Cash (Continued)
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. In 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 fund has three accounts, the
Series 2001A, 2001B and the Series 2001C 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 Ballpark
Austin property, 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.
Operating 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 2001 Account—The amounts on deposit in this account are
to be used for the purpose of paying principal and interest on the Series 2001A
bonds as they become due in the event there should be insufficient funds in the
Bond Fund.
(continued)
14
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Restricted Cash (Continued)
Debt Service Reserve 2001B Account — The amounts on deposit in this account
are to be used for the purpose of paying principal and interest on the Series 2001B
Bonds as they become due in the event there should be insufficient funds in the
Bond Fund.
Project Fund— Amounts in the Project Fund are held and disbursed for costs of
the Project.
Residual Fund — Amounts in the Residual Fund related to three accounts — the
Subordinate Bond Amortization Account — Series C, the Issuer Education
Account and the Supplemental Management Fee Account. Based on release, tests
funds are then transferred to each respective account. In addition, insurance funds
are held to pay costs of maintaining insurance on the Project.
The Public Funds 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
Authority — Ballpark Austin 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 Authority — Ballpark Austin
Project holds all of its cash and investments with the bond trustee and commercial banks.
Concentration of Credit Risk
The investment policy of Texas Student Housing Authority — Ballpark Austin 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 73% of the total cash and
investments held at August 31, 2008.
(continued)
15
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Custodial Credit Risk
Custodial credit risk for s o 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 counterparty 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, $254,147 of the Project's $367,084 bank balance was collateralized
with a Bank Deposit Guarantee Bond from the Project's depository. The remaining balance,
$1 12,937, was covered by FDIC insurance.
B. Capital Assets
Capital asset activity for the Project for the year ended August 31, 2008, was as follows:
Beginning Ending
Balance Additions Retirements Balance
Capital assets,not being depreciated:
Land
$ 4,788,265
$ - $
- $ 4,788,265
i Total capital assets,
not being depreciated
4,788,265
-
4,788,265
Capital assets,being depreciated:
Building
21,345,305
-
- 21,345,305
Improvements,furniture
and fixtures
6,993,063
-
- 6,993,063
Total capital assets,
being depreciated
28,338,368
-
- 28,338,368
Less accumulated depreciation for:
Building
( 4,031,890)
( 711,511)
- ( 4,743,401)
Improvements,furniture
and fixtures
( 3,176,918)
( 257,282)
- ( 3,434,200)
Total accumulated depreciation
( 7,208,808)
( 968,793)
- ( 8,177,601)
Total capital assets,
j being depreciated,net
21,129,560
( 968,793)
- 20,160,767
Capital assets,net
$ 25,917,825
$L__268,793 $
- $ 24,949,032
j
(continued)
16
III. DETAILED NOTES ON ALL FUNDS (Continued)
C. Bonds Payable
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 December 1, 2001. The bonds are payable solely from
the revenues generated by the Project and are secured by 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 4.00% to 11.00%
and are payable semi-annually on July 1 and January 1 of each year thereafter.
At August 31, 2006, the Project had not made interest payments on the Subordinate 2001C
Bond Series since July 2003, and the Subordinate 2001C Bond is in default. In addition, the
Project's fixed charges coverage ratio was not in compliance with the covenants of the
indenture. These events do not constitute an event of default that accelerates the bonds. As a
result, the maturities are presented under the original repayment terms.
The following is a summary of long-term debt transactions of the Project for the 12-month
period ended August 31, 2008:
The debt is to be amortized through 2033 with varying payment amounts ranging from
$330,000 to $4,505,000 for interest and principal. The annual requirements to amortize all
debts outstanding as of August 31, 2008, are as follows:
Year Ending
August 31,
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2028
2029-2033
Totals
Principal
$ 690,000
650,000
680,000
715,000
755,000
4,440,000
5,785,000
7,575,000
15,420,000
Governmental Activities
Interest
$ 36,710,000
(continued)
17
$ 2,340,339
2,311,359
2,280,294
2,247,194
2,208,144
10,375,044
9,021,281
7,236,000
4,865,075
$ 42,884,730
Total
$ 3,030,339
2,961,359
2,960,294
2,962,194
2,963,144
14,815,044
14,806,281
14,811,000
20,285,075
$ 79,594,730
Amounts
Beginning
Ending
Due Within
Balance Increases
Decreases
Balance
One Year
Revenue Bonds:
2001A Bonds
$ 31,905,000 $ -
$( 560,000)
$ 31,345,000
$ 585,000
2001B Bonds
2,330,000 35,000
-
2,365,000
105,000
2001C Bonds
3,000,000 -
-
3,000,000
-
Less discounts
( 1,462,076) -
60,085
( 1,401,991)
-
Total
$ 35,772,924 $ 35,000
$( 499,915)
$ 35,308,009
$ 690,000
The debt is to be amortized through 2033 with varying payment amounts ranging from
$330,000 to $4,505,000 for interest and principal. The annual requirements to amortize all
debts outstanding as of August 31, 2008, are as follows:
Year Ending
August 31,
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2028
2029-2033
Totals
Principal
$ 690,000
650,000
680,000
715,000
755,000
4,440,000
5,785,000
7,575,000
15,420,000
Governmental Activities
Interest
$ 36,710,000
(continued)
17
$ 2,340,339
2,311,359
2,280,294
2,247,194
2,208,144
10,375,044
9,021,281
7,236,000
4,865,075
$ 42,884,730
Total
$ 3,030,339
2,961,359
2,960,294
2,962,194
2,963,144
14,815,044
14,806,281
14,811,000
20,285,075
$ 79,594,730
III. DETAILED NOTES ON ALL FUNDS (Continued)
D. 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.
Restricted for Debt Service results when constraints placed on net asset use are
either externally imposed by creditors, grantors and the like, or imposed by law
through constitutional provisions or enabling legislation.
E. Management Fees
Beginning June 1, 2004, the Project retained Asset Campus Management for property
management and recorded property management fees of approximately $155,694 for the year
ended August 31, 2008, with approximately $27,510 due at August 31, 2008, and included in
accounts payable. As of August 31, 2008, the Project has recorded approximately $338,450
in unpaid property and asset management fees to the prior property management company.
The management agreement with the previous management company states that if the
management fees are not paid, the amounts past due will accrue interest at the lesser of 12% or
the highest lawful rate of interest. The Project's financials include accrued interest of
approximately$40,614 for the unpaid management fees for the year ended August 31, 2008.
F. Concentrations
The Project consists of one property in Austin, Texas, and is dependent upon the Austin area
and the higher education facilities in the Austin area for revenues.
G. Commitments and Contingencies
The Project has a deferred purchase commitment for $1,460,000 as part of the original
purchase of the Project. The deferred purchase price accrues interest at a rate of 11% per
annum. The first deferred purchase price installment shall be payable on September 1 of the
first year after the Series C Bonds have been paid in full (scheduled final payment on Series
C Bonds is in 2033), and the remaining installments shall be paid on each anniversary
thereafter until the deferred purchase price and all interest thereon has been paid in full. As
of August 31, 2008, there have been no payments made on the deferred purchase price.
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
SUPPLEMENTAL SCHEDULES
TEXAS STUDENT HOUSING AUTHORITY
BALLPARK AUSTIN PROJECT
SCHEDULE I-SCHEDULE OF REVENUES AND EXPENSES
BUDGET AND ACTUAL
FOR THE YEAR ENDED AUGUST 31, 2008
REVENUES AND OTHER SUPPORT
Rental income
Other income
Interest income
Total revenues and other
OPERATING EXPENSES
Personnel
Contract services
Utilities
Repairs and maintenance
Turnover
Advertising and promotion
Administration
Total operating expenses
REVENUES AVAILABLE FOR FIXED CHARGES
OTHER EXPENSES
Management fees
Replacements
Depreciation and amortization
Interest
Total other expenses
EXCESS OF EXPENSES OVER REVENUES
19
Budget
Actual
Variance
$ 3,299,973
$ 3,516,568
$ 216,595
100,440
24,060
( 76,380)
-
111,411
111,411
3,400,413
3,652,039
251,626
315,001
309,229
5,772
65,459
58,928
6,531
573,232
565,936
7,296
62,545
57,025
5,520
188,100
181,216
6,884
98,900
94,025
4,875
59,935
169,308
( 109,373)
1,363,172
1,435,667
( 72,495)
2,037,241
2,216,372
179,131
271,245
194,656
76,589
-
174
( 174)
1,149,173
1,149,173
-
2,666,989
2,666,989
-
4,087,407
4,010,992
76,415
$( 2,050,166)
$( 1,794,620)
$ 255,546
TEXAS STUDENT HOUSING AUTHORITY—
BALLPARK AUSTIN PROJECT
SCHEDULE II-CERTIFICATE OF
THE FIXED CHARGES COVERAGE RATIO
AUGUST 31,2008
We are providing this letter, as required by the Trust Indenture by and between Texas Student Housing
Authority — Ballpark Austin Project (the "Project") and the Bank of New York (the "Trustee"), dated
December 1, 2001, relating to Texas Student Housing Authority — Ballpark Austin Project Student
Housing Revenue Bonds the "Indenture," to certify the Fixed Charges Coverage Ratio as of August 31,
2007.
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 (i) and (ii) above.
The audited financial statements indicate revenue available for fixed charges for the 12-month period
ended August 31, 2008, to be $2,216,372.
Based on the above revenues and fixed charges utilizing Bond A and Bond B, we calculate that the fixed
charges coverage ratio as of August 31, 2008, to be .87 which is based on 12 months of operations.
Based on the above revenues and fixed charges utilizing Bond A, Bond B and Bond C, we calculate that
the fixed charges coverage ratio as of August 31, 2008, to be .77 which is based on 12 months of
operations.
Based on the above budgeted revenues and fixed charges utilizing Bond A and Bond B, we calculate
that the fixed charges coverage ratio as of August 31, 2008, to be .80 which is based on 12 months of
operations.
20
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
FINANCIAL REPORT
AUGUST 31, 2008
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
TABLE OF CONTENTS
AUGUST 31,2008
Page
Number
FINANCIAL SECTION
Independent Auditors' Report............................................................................................. 1 —2
Management's Discussion and Analysis ............................................................................ 3 — 6
lFinancial Statements:
Statementof Net Assets................................................................................................... 7
Statement of Revenues, Expenses and Changes in Net Assets........................................ 8
Statement of Cash Flows .............................:................................................................... 9
Notes to Financial Statements.......................................................................................... 10 — 18
SUPPLEMENTAL SCHEDULES
Schedule I— Schedule of Revenues and Expenses............................................................. 19
IV4
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Texas Student Housing Authority—
Town Lake Austin Project
Westlake, Texas
We have audited the accompanying financial statements of Texas Student Housing Authority —
Town Lake Austin Project (the "Project"), as of and for the year ended August 31, 2008, which
collectively comprise the Project's basic financial statements as listed in the table of contents. Texas
Student Housing Authority— Town Lake Austin Project is a component unit of the Town of Westlake.
These financial statements are the responsibility of the Project 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 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 Authority as of August 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 Authority—Town Lake Austin Project as of August
31, 2008, and the respective changes in its 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.
1
401 WEST HIGHWAY 6■P.O.BOX 20725 ■WACO,TX 76702-0725■(254)772-4901 ■FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■WHITNEY,TX(254)694-4600■ALBUQUERQUE,NM(505)266-5904
The management's discussion and analysis on pages 3 through 6 is not a required part of the
basic financial statements but is 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 financial statements that
collectively comprise the Texas Student Housing Authority — Town Lake Austin Project's basic
financial statements. The accompanying supplemental information on page 19 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 basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
f 8"',
am I , + 4 Z. Z .
January 14, 2009
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
As staff of the Texas Student Housing Authority (the "Authority") — Town Lake Austin 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 Authority 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 Discussion 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
$3,361,664, an increase of$950,100 over the prior year.
• Operating revenue of$2,831,579 is $13,795 less than budget; and operating expenses
were $29,217 more than budget.
• At the end of the current fiscal year, the total cash balances were $587,382 in
unrestricted cash and$1,041,774 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 a supplemental schedule.
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 1
j TEXAS STUDENT HOUSING AUTHORITY-
TOWN LAKE AUSTIN PROJECT
NET ASSETS
Business-type Activities
2008
2007
i
Current and other assets
$ 2,502,102
$ 2,667,636
Capital assets
16,748,671
17,405,068
Total assets
19,250,773
20,072,704
Current liabilities
1,211,342
860,408
Noncurrent liabilities
21,401,095
21,623,860
Total liabilities
22,612,437
22,484,268
Net assets:
Invested in capital assets,
net of related debt
( 4,857,382)
( 4,423,750)
Restricted
552,995
1,214,006
Unrestricted
942,723
798,180
Total net assets
i
$( 3,361,664)
$( 2,411,564)
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.
j
TABLE 2
TEXAS STUDENT HOUSING AUTHORITY-
TOWN LAKE AUSTIN PROJECT
CHANGES IN NET ASSETS
Business-type
Activities
2008
2007
Total operating revenue
$ 2,831,579
$ 2,790,825
i Total operating expenses
2,137,550
1,967,332
Total operating income
694,029
823,493
Interest income
33,592
63,230
Interest expense
( 1,677,721)
( 1,782,361)
Total nonoperating loss
( 1,644,129)
( 1,719,131)
CHANGE IN NET ASSETS
( 950,100)
( 895,638)
l NET ASSETS,BEGINNING
( 2,411,564)
( 1,515,926)
NET ASSETS,ENDING
$( 3,361,664)
$( 2,411,564)
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:
Bond Proceeds Principal Fund, Series 2002 A-1
$ 303
Bond Proceeds Interest Fund,Series 2002 A-1
3,318
Bond Proceeds Interest Fund, Series 2002 A-2
5,235
Reserve Fund
167
Debt Service Reserve Fund
675,315
Repair and Replacement Fund
329,624
Deferred Debt Service
16,397
Tax and Insurance Fund
2,115
Fee and Expense Fund
9,309
Initial Purchase Fund
( 9)
Total
$ 1,041,774
Nonrestricted cash. Nonrestricted cash is available for general use of the Project.
Bonds payable. As of August 31, 2008, the following amounts on the Series 2002 A-1 and 2002 A-2
were payable:
Series 2002 A-1
Series 2002 A-2
Total
$ 16,516,812
5,089,241
$ 21,606,053
For the fiscal year ending August 31, 2008, the total principal and interest payment is calculated at
$1,891,637. A total of$222,765 in principal was paid during 2008.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
Leases at the Project are primarily 12-month leases, however, due to competitive and market conditions,
a relatively minor number of 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 100%. However,
rental rates, again due to competitive pressures will not see a large increase.
Net operating revenue for next year is projected at $1,480,151.
5
CONTACTING THE PROJECT'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.
6
1 TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
STATEMENT OF NET ASSETS
AUGUST 31,2008
ASSETS
Current assets:
Cash
Restricted cash
Accounts receivable
Prepaid expenses
Total current assets
Capital assets:
Land
Other capital assets,net of accumulated depreciation
Total capital assets
Intangible assets:
Debt issue costs,net of amortization
Total intangible assets
I
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued liabilities
Bonds payable-current maturities
Management and development fees payable
Deferred revenue and prepaid rent
Accrued interest
Total current liabilities
Noncurrent liabilities:
Bonds payable
Total noncurrent liabilities
Total liabilities
NET ASSETS
Invested in capital assets,net of related debt
Restricted for debt service
i
Unrestricted
Total net assets
$ 587,382
1,041,774
21,869
15,000
1,666,025
2,182,816
14,565,855
16,748,671
836,077
836,077
19,250,773
65,059
107,105
204,958
79,200
471,199
283,821
1,211,342
21,401,095
21,401,095
22,612,437
( 4,857,382)
552,995
942,723
$( 3,361,664)
The accompanying notes are an integral part of these financial statements.
7
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31,2008
OPERATING REVENUES
Rental
Other
Total operating revenues
OPERATING EXPENSES
Personnel
Contract services
Utilities
Repairs and maintenance
Turnover
Advertising and promotion
Administration
Management fees
Replacements
Depreciation and amortization
Total operating expenses
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest income
Interest expense
Total nonoperating revenues (expenses)
CHANGE IN NET ASSETS
NET ASSETS,BEGINNING
NET ASSETS,ENDING
$ 2,721,224
110,355
2,831,579
264,901
52,893
500,461
22,780
65,128
65,924
136,953
153,671
53,261
821,578
2,137,550
694,029
33,592
( 1,677,721)
( 1,644,129)
( 950,100)
( 2,411,564)
$( 3,361,664)
The accompanying notes are an integral part of these financial statements.
8
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants
$
3,111,872
Cash paid to employees
(
253,797)
Cash paid to suppliers
(
1,010,279)
Net cash provided by operating activities
1,847,796
i CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments on bonds payable
(
222,765)
Interest paid
(
1,668,871)
Net cash used in capital and related financing activities
(
1,891,636)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments
33,592
Net cash provided by investing activities
33,592
NET CHANGE IN CASH AND CASH EQUIVALENTS
(
10,248)
CASH AND CASH EQUIVALENTS,BEGINNING
I
1,639,404
CASH AND CASH EQUIVALENTS,ENDING
$
1,629,156
Cash
$
587,382
Restricted cash
1,041,774
Total cash and cash equivalents
$
1,629,156
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income
$
694,029
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization
821,578
Changes in operating assets and liabilities:
Accounts receivable
10,284)
Prepaids
389
Trade accounts payable
40,403
Deferred revenue
290,577
Other current liabilities
11,104
Net cash provided by operating activities
$
1,847,796
The accompanying notes are an integral part of these financial statements.
9
TEXAS STUDENT HOUSING AUTHORITY—
TOWN LAKE AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2008
I. GENERAL STATEMENT
Texas Student Housing Authority (the "Authority"), a higher education authority, was established
on January 23, 1995, as a duly constituted authority of the Town of Westlake, Texas, pursuant to
Section 53.11 of Chapter 53 of the Texas Education Code, as amended. The Authority's purpose
among other things is to acquire, finance, and operate student housing facilities. The Authority
operates several student housing facilities in Texas and one of the housing projects is the Town
Lake Austin Project (the "Project"). The Project was purchased from Jefferson Commons —
Austin, L.P., a Delaware limited partnership on December 17, 2002. The Project obtained its
financing through the issuance of Texas Student Housing Authority — Student Housing Revenue
Bonds (Jefferson Commons at Town Lake Project), Series 2002 A-1 and A-2 (the "Bonds"). The
Bonds were issued through a Trust Indenture (the "Trust Indenture") by and between the Authority
and The Bank of New York (the "Trustee"). The Series 2002 A-1 and Series 2002 A-2 Bonds
were issued in the face amounts of$19,480,000 and $5,670,000, respectively. The accompanying
financial statements present the operations of the one Project, whose revenue streams are pledged
for the Bonds described herein.
The Project was operated and managed under the terms of the (a) Property Management and
Leasing Agreement by and between the Authority and JPI Campus Quarters Management, L.P.
("JPI") and (b) the Asset Management Agreement by and between the Authority and JPI
Apartment Management, L.P., up until February 2005. The Project is now managed and operated
by Asset Campus Housing under the terms of a Property Management and Leasing Agreement
dated March 1, 2005. The Property Management Agreements are collectively referred to as the
"Agreements."
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Project's significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
A. Reporting 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:
(continued)
10
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity(Continued)
Financial Accountability — 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 government 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.
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$1,041,774 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 $33,592. See Note III for risk
disclosures and breakdown of restricted cash accounts.
(continued)
11
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Assets, Liabilities and Net Assets or Equity (Continued)
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. As
of August 31, 2008, management has determined that all accounts doubtful of collection have
been charged to operations and an allowance is not required.
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 $65,924.
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.
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.
The indenture provides for a replacement fund requirement. Depreciation is computed using
the straight-line method over the estimated useful lives as follows:
Asset Class
Building
Furniture,fixtures and equipment
12
Estimated
Useful Lives
30
3 -20
III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
At August 31, 2008, the carrying amount of Texas Student Housing Authority — Town Lake
Austin Project deposits (cash with interest bearing accounts and restricted cash held in
interest bearing accounts) was in total $1,629,156 of which $1,041,774 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
Bond Proceeds Principal Fund,Series 2002 A-1
Bond Proceeds Interest Fund, Series 2002 A-1
Bond Proceeds Interest Fund, Series 2002 A-2
Reserve Fund
Debt Service Reserve Fund
Repair and Replacement Fund
Deferred Debt Service
Tax and Insurance Fund
Fee and Expense Fund
Initial Purchase Fund
Total
$ 303
3,318
5,235
167
675,315
329,624
16,397
2,115
9,309
( 9)
$ 1,041,774
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 Proceeds Fund — The Trustee makes monthly deposits in the Bond
Proceeds Fund pursuant to the Trust Indenture. Amounts in the Bond Proceeds
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.
(continued)
13
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Restricted Cash (Continued)
Debt Service Reserve Fund— The amounts on deposit in this account are to be
used for the purpose of paying principal and interest on the Bonds in the event the
principal and interest is not paid by issuer in accordance with the terms of the
indenture and written notice of the Servicing Agent.
Proiect Fund— Amounts in the Project Fund are held and disbursed for costs of
the Project.
Repair and Replacement Fund— Amounts in the Repair and Replacement Fund
may be used to make mandatory repairs of the Project pursuant to the Trust
Indenture.
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.
Temporary Funds and Accounts—The Trustee may establish and maintain for so
long as is necessary one or more Temporary Funds and accounts under this
indenture. The Deferred Debt Service Reserve Fund, Tax and Insurance Fund,
and Initial Purchase Funds are Temporary Funds at August 31, 2008.
Residual 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 Residual Fund.
The Public Funds 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
Authority — Town Lake Austin Project is not significantly exposed to interest rate risk as all
investments earn a variable rate.
(continued)
14
III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
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 Authority—Town Lake Austin
Project holds all of its cash and investments with the Bond Trustee and commercial banks.
Concentration of Credit Risk
The investment policy of Texas Student Housing Authority — Town Lake Austin 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 64% 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 counterparty 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 $587,382 (bank balance
$277,068). Of the bank balance, $272,841 was covered by federal depository insurance
while the remaining $4,227 was uncollateralized. The Project has a Bank Deposit Guarantee
Bond from the Project's depository in the amount of$3,000,000.
(continued)
15
III. DETAILED NOTES ON ALL FUNDS (Continued)
i
i
B. Capital Assets
Capital asset activity for the Project for the year ended August 31, 2008, was as follows:
Beginning Ending
Balance Additions Retirements Balance
Capital assets,not being depreciated
Land $
2,182,816
$ - $
- $ 2,182,816
Total capital assets,
not being depreciated
2,182,816
-
- 2,182,816
Capital assets,being depreciated:
Building and improvements
13,270,150
-
- 13,270,150
Capitalized purchase costs
887,095
-
- 887,095
Land improvements
2,806,596
-
- 2,806,596
Unit appliances
295,134
-
- 295,134
Furniture and fixtures
915,951
-
- 915,951
Total capital assets,
being depreciated
18,174,926
-
- 18,174,926
Less accumulated depreciation for:
Building and improvements
1,768,268
627,913
- 2,396,181
Capitalized purchase costs
118,280
28,484
- 146,764
Land improvements
374,212
-
- 374,212
Unit appliances
168,648
-
- 168,648
Furniture and fixtures
523,266
-
- 523,266
Total accumulated depreciation
2,952,674
656,397
- 3,609,071
Total capital assets,
being depreciated,net
15,222,252
656,397)
- 14,565,855
Capital assets,net $
17,405,068
$L6 6,397 $
- $ 16,748,671
C. Bonds Payable
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 December 1, 2001. The Bonds are payable solely from
the revenues generated by the Project and are secured by 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 7.76% to 8.69%
and are payable semi-annually on July 1 and January 1 of each year thereafter.
(continued)
16
III. DETAILED NOTES ON ALL FUNDS (Continued)
C. Bonds Payable (Continued)
The following is a summary of long-term debt transactions of the Project for the 12-month
period ended August 31, 2008:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Revenue Bonds:
2002 A-1 Bonds $ 16,739,577 $
2002 A-2 Bonds 5,089,241 -
$( 222,765) $ 16,516,812 $ 222,872
- 5,089,241 -
Total $ 21,828,818 $ - $ 222,765 $ 21,606,053 $ 222,872
The debt is to be amortized on the A-1 Bonds through 2033 with monthly payments of
$124,726 and the A-2 Bonds through 2038 with monthly payments of $167,675 starting
November 1, 2033. The A-2 Bonds have no regular principal payments until the year 2033.
The Bonds also had a clause for an initial purchase release draw. The requirements for that
draw were not met and during 2006, the funds held in the initial Purchase Fund were applied
to principal on the Bonds. The annual requirements to amortize all debts outstanding as of
August 31, 2008, are as follows:
Year Ending
August 31,
2009
2010
2011
2012
2013
2014-2018
2019-2023
2024-2028
2029-2033
Totals
D. Net Assets
Principal
$ 222,872
240,795
260,159
281,080
303,683
1,926,465
2,836,079
4,175,185
11,359,735
$ 21,606,053
Governmental Activities
Interest
$ 1,668,765
1,650,842
1,631,478
1,610,557
1,587,954
7,531,720
6,622,106
5,283,000
3,312,414
Total
$ 1,891,637
1,891,637
1,891,637
1,891,637
1,891,637
9,458,185
9,458,185
9,458,185
14,672,149
$ 30,898,836 $ 52,504,889
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. DETAILED NOTES ON ALL FUNDS (Continued)
D. Net Assets (Continued)
Restricted for Debt Service results when constraints placed on net asset use are
either externally imposed by creditors, grantors and the like, or imposed by law
through constitutional provisions or enabling legislation.
Unrestricted Net Assets consists of the portion of net assets after invested in
capital assets, net of related debt and restricted for debt service has been satisfied.
E. Management Fees
The Project paid JPI property and asset management fees for the Project through February
283 2005. Effective March 1, 2005, the Project entered into a management agreement with
ACH and began paying management fees to ACH at that date. During 2008, the Project
recorded management fees of$153,671 to ACH. At August 31, 2008, the Project owed JPI
$79,200 for property management fees.
F. Concentrations
The Project consists of one property in Austin, Texas, and is dependent upon the Austin area
and the higher education facilities in the Austin area for revenues.
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
SUPPLEMENTAL SCHEDULE
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
SCHEDULE I-SCHEDULE OF REVENUES AND EXPENSES
BUDGET AND ACTUAL
FOR THE YEAR ENDED AUGUST 31,2008
19
Budget
Actual
Variance
REVENUES AND OTHER SUPPORT
Rental
$ 2,758,234
$ 2,721,224
$( 37,010)
Other
87,140
110,355
23,215
Interest
-
33,592
33,592
Total revenues and other support
2,845,374
2,865,171
19,797
OPERATING EXPENSES
Personnel
293,104
264,901
28,203
Contract services
78,120
52,893
25,227
Utilities
415,580
500,461
( 84,881)
Repairs and maintenance
19,750
22,780
( 3,030)
Turnover
82,775
65,128
17,647
Advertising and promotion
75,800
65,924
9,876
Administration
114,694
136,953
( 22,259)
Total operating expenses
1,079,823
1,109,040
( 29,217)
REVENUES AVAILABLE FOR FIXED CHARGES
1,765,551
1,756,131
( 9,420)
OTHER EXPENSES
Management fees
147,195
153,671
( 6,476)
Replacements
55,500
53,261
2,239
Depreciation and amortization
821,578
821,578
-
Interest
1,677,721
1,677,721
-
Total other expenses
2,701,994
2,706,231
4,237
EXCESS OF EXPENSES OVER(UNDER) REVENUES
$( 936,443)
$( 950,100)
$( 13,657)
19
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
FINANCIAL REPORT
AUGUST 31, 2008
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
TABLE OF CONTENTS
AUGUST 31,2008
Page
FINANCIAL SECTION
Independent Auditors' Report.............................................................................................. 1 —2
Management's Discussion and Analysis ............................................................................ 3 -
Financial Statements:
Statementof Net Assets................................................................................................... 6
Statement of Revenues, Expenses and Changes in Net Assets........................................ 7
Statement of Cash Flows ................................................................................................. 8
Notes to Financial Statements.......................................................................................... 9 — 16
SUPPLEMENTAL SCHEDULES
i
Schedule I—Schedule of Revenues and Expenses............................................................. 17
Schedule II—Fixed Charges Coverage Ratio..................................................................... 18
W,
PATTILLO, BROWN & HILL, L.L_P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Texas Student Housing Authority—
College Station Project
Westlake, Texas
We have audited the accompanying financial statements of Texas Student Housing Authority —
College Station Project (the "Project"), as of and for the year ended August 31, 2008, which collectively
comprise the Project's basic financial statements as listed in the table of contents. Texas Student
Housing Authority — College Station 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 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 Authority as of August 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 Authority— College Station Project as of August 31,
2008, and the respective 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— College Station Project will continue as a going concern. As discussed in Note
II, H to the financial statements, the Project is in default on its certificates and certificate holders may
choose to continue as a going concern. Management's plans in regard to these matters are discussed in
Note Il, H. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
1
401 WEST HIGHWAY 6■P.O.BOX 20725■WACO,TX 76702-0725■(254)772-4901 ■FAX:(254)772-4920■www.pbhcpa.com
AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778■HILLSBORO,TX(254)582-2583
TEMPLE,TX(254)791-3460■WHITNEY,TX(254)694-4600■ALBUQUERQUE,NM(505)266-5904
The management's discussion and analysis on pages 3 through 5 is not a required part of the
basic financial statements but is supplementary 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 financial statements that
collectively comprise the business-type activities of Texas Student Housing Authority— College Station
Project's basic financial statements. The accompanying supplementary information on pages 17 and 18
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 basic financial statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
January 14, 2009
2
MANAGEMENT'S DISCUSSION AND ANALYSIS
As staff of the Texas Student Housing Corporation (the "Corporation") — College Station 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 Discussion 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
$4,730,505 due primarily to a decrease in net assets of$1,366,700.
• Major components of the expense overage were $130,611 in administrative and
marketing, and $58,979 in repairs and maintenance expenses.
• At the end of the current fiscal year, the total cash balances were $3,992,27') in
unrestricted cash and$928,518 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 certificates 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 certificate holders the right to accelerate
and demand payment of the certificates 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.
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.
3
The statement of revenues, expenses and changes in net assets accounts for all of the Authority's
revenues and expenses regardless of when cash is paid or received.
The statement of cash flows recaps how cash increased year over year.
FINANCIAL ANALYSIS OF THE PROJECT'S FUNDS
Notes to financial statements. The notes provide additional inforination that is essential to a frill
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:
Replacement Fund
$ 202,655
Series A Reserve Fund
3,186
Series B Reserve Fund
156,827
Series A Interest Account
232,045
Series A Principal Account
103,678
Series B Interest Account
62,000
Series B Principal Fund
93,333
Transaction Costs Payment Fund
32,457
Series D Interest Account
40,187
Current Receipts Fund
2,150
Total
$ 928,518
Nonrestricted cash. Nonrestricted cash is available for general use of the Project.
Installment note payable. The Project's developer refinanced the original Installment Sale Agreement
effective December 1, 2004, by issuing debt certificates in the following classes:
Series A
$ 17,220,000
Series B
4,650,000
Series C
4,820,000
Series D
5,380,000
Total
$ 32,070,000
The note is payable at the rate of$231,545 monthly.
Fixed Charge Coverage Ratio
The Installment Sale Agreement provides for a fixed charges coverage ratio of 1.1. At this time, the
Project has only realized a ratio of 1.06 and is thus technically in default of the Agreement. Upon
default, the lender may accelerate maturity of the unpaid portion of the principal, however, it is not
anticipated that this event will incur since foreclosure by the certificate holders would result in the loss
of the Project's tax-exempt status.
11
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
Leases at the Project have a duration that encompasses the school year, primarily the months of
September through May. The June to August revenue is dependent on the ability to attract various
camps/meetings. As the Project is tax-exempt through the Texas Higher Education Act, only those
functions sponsored by the University are eligible for acceptance. The occupancy for this school year is
100%, thus the focus for this year will be on increasing this "summer" revenue.
Although the fixed charges coverage ratio was only 1.06, all of the A and B certificate holders received
all proceeds due them. The 2008/2009 budget clearly indicates that operating income will be sufficient
to again service the A and B certificates.
CONTACTING THE PROJECT'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.
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
STATEMENT OF NET ASSETS
AUGUST 31,2008
ASSETS
Current assets:
Cash
Restricted cash
Accounts receivable,net of$64,045 allowance
Prepaid expenses
Total current assets
Capital assets:
Land
Other capital assets,net of accumulated depreciation
Total capital assets
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued expenses
Deferred revenue and prepaid rent
Accrued interest
Installment loan payable
Total current liabilities
NET ASSETS
Invested in capital assets,net of related debt
Unrestricted
Total net assets
$ 3,992,273
928,518
791,135
18,227
5;730,153
2,899,597
24,947,732
27,847,329
27,847,329
33,577,482
245,863
428,938
2,562,422
3,000,764
32,070,000
38,307,987
( 4,222,671)
( 507,834)
$( 4,730,505)
The accompanying notes are an integral part of these financial statements.
6
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31,2008
OPERATING REVENUES
Rental
Other
Total operating revenues
OPERATING EXPENSES
Management fees
Administration and marketing
Cafeteria
Utilities
Repairs and maintenance
Insurance
Depreciation and amortization
Total operating expenses
OPERATING INCOME
NONOPERATING REVENUES (EXPENSES)
Interest revenue
Interest expense
Total nonoperating revenues (expenses)
CHANGE IN NET ASSETS
NET ASSETS,BEGINNING
NET ASSETS, ENDING
$ 5,945,851
54,748
6;000;599
274,058
904,016
861,747
689,788
468,335
67,757
1,356,620
4,622,321
1,378,278
72,935
( 2,817;913)
( 2,744,978)
( 1,366,700)
( 3,363,805)
$( 4,730,505)
The accompanying notes are an integral part of these financial statements.
rA
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31,2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants
$ 5,472,919
Other operating revenues
54,748
Cash paid to employees
( 779,101)
Cash paid to suppliers
( 2,780,702)
Net cash provided by operating activities
1,967,864
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal repayments on bonds
( 275,000)
Interest paid
( 1,598,475)
Net cash provided by capital and related financing activities
( 1,873,475)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
72.935
Net cash provided by investing activities
72,935
NET CHANGE IN CASH AND CASH EQUIVALENTS
167,324
i
CASH AND CASH EQUIVALENTS,BEGINNING
4,753,467
CASH AND CASH EQUIVALENTS,Q NTS,ENDING
$ 4,920,791
Cash
$ 3,992,273
Restricted cash
928,518
Total cash and cash equivalents
$ 4,920,791
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income
$ 1,378,278
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation
1,356,620
Changes in operating assets and liabilities:
Accounts receivable
( 356,279)
Accounts payable
( 62,738)
Accrued liabilities
124,915
Deferred revenue and prepaid rent
( 472,932)
Net cash provided by operating activities
$ 1,967,864
The accompanying notes are an integral part of these financial statements.
TEXAS STUDENT HOUSING AUTHORITY—
COLLEGE STATION PROJECT
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2008
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operations
Texas Student Housing Authority — College Station Project (the "Project"), a duly constituted
authority of the Town of Westlake, Texas (the "Town") pursuant to Section 53.35(b) of the
Texas Education Code, as amended (the "Act"). The Authority was established to acquire
educational facilities and housing facilities to be used by the students, faculty and staff of
institutions of higher education within the State of Texas. The Project's purpose is to own and
operate a student housing facility known as Cambridge at College Station (the "College Station
Project") in College Station, Texas.
The College Station Project was purchased from Cambridge Student Housing Development, L.P.
(the "Developer") effective September 1, 2004. The Project obtained its financing through a
seller-financed installment sale agreement. The accompanying financial statements present the
operations of the Project, whose revenues are pledged for the installment note described herein.
The College Station Project is operated and managed under the terms of the First Amended and
Restated Property Project Management and Leasing Agreement by and between the Authority
and Asset Campus Housing, Inc. for the period audited.
The Project's significant accounting policies are as follows:
A. Reporting 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.
(continued)
I
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity (Continued)
The criteria set forth require governmental reporting entities to determine their primary
government for the purposes of annual reporting. The primary government is deemed to be
financially accountable if it appoints a voting majority of the organization's governing body
and (1) it 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 regardless of whether the organization
has a separately elected governing board appointed by a higher level of government or a
jointly appointed board.
B. Measurement Focus and Basis of Accounting
The Project uses the "net income and capital maintenance" measurement focus. This means
that all assets, liabilities, equity, revenues, and expenses are accounted for using the accrual
basis of accounting. Such standards are generally in accordance with the reporting standards
of income producing real estate projects owned in the private sector.
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. Capitalization, Depreciation and Impairment Policies
Property and Depreciation
Property and equipment are recorded at cost. Such costs include carpet and appliance
replacements. Expenditures for routine maintenance and repairs are expensed as incurred.
Property and equipment are depreciated using the straight-line method over the following
useful lives:
Buildings 30 years
Improvements 15 years
Equipment,furniture and fixtures 5 -20 years
(continued)
10
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Assets, Liabilities and Net Assets or Equity
Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Project considers unrestricted cash and
highly liquid investments with maturities of three months or less at the date of purchase to be
cash and cash equivalents.
Concentration of Credit Risk
As of and during the year ended August 31, 2008, the Project had cash deposits with
financial institutions in excess of the $250,000 amount insured by the Federal Deposit
Insurance Corporation. Any amounts over the FDIC limit are insured with pledged securities
by the Project's depository.
Taxes
The Project is an instrumentality of the Town of Westlake, therefore, its income is not
subject to federal income taxation pursuant to Section 115 of the Internal Revenue Code.
Additionally, the Project is exempt from local property taxes.
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.
Advertising Costs
All advertising costs are expensed as they are incurred. Advertising costs for the year ended
August 31, 2008, were approximately$90,390.
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 the reported amounts of 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.
11
II. DETAILED NOTES ON ALL FUNDS
A. Restricted Cash
Restricted cash represents amounts held in escrow, which are restricted for the payment of
expenses as required by the installment sale agreement. As of August 31, 2008, restricted
cash consists of the following:
Replacement Fund
$ 202,655
Series A Reserve Fund
3,186
Series B Reserve Fund
156,827
Series A Interest Account
232,045
Series A Principal Account
103,678
Series B Interest Account
62,000
Series B Principal Fund
93,333
Transaction Costs Payment Fund
32,457
Series D Interest Account
40,187
Current Receipts Fund
2,150
Total
$ 928,518
The following is a brief description of the funds and accounts comprising the restricted cash
balance at year-end, as defined by the installment sale agreement and the trust agreement:
Replacement Fund— Amounts in the Replacement Fund may be used to pay the
maintenance and repair costs related to the College Station Property, which the
Project is obligated to pay pursuant to the installment sale agreement.
Series A Reserve Fund—The amounts on deposit in this account were required to
be contributed by the Developer and are to be used for the purpose of paying
principal and interest on the Series A certificates as they become due in the event
there should be insufficient funds in the Debt Service Fund.
Series B Reserve Fund—The amounts on deposit in this account were required to
be contributed by the Developer and are to be used for the purpose of paying
principal and interest on the Series B certificates as they become due in the event
there should be insufficient funds in the Debt Service Fund.
Series A Principal Fund — Amounts in the Series A Principal Fund represent
payments set aside for the repayment of the principal balance on the Series A
certificates.
Transaction Costs Payment Fund— Amounts in the Transaction Costs Payment
Fund are to be used to pay for debt issuance costs.
(continued)
12
II. DETAILED NOTES ON ALL FUNDS (Continued)
A. Restricted Cash (Continued)
Debt Service Fund — Amounts in the Debt Service Fund are to be used to
accumulate funds that are used to pay debt service costs.
Series D Interest Fund — Amounts in the Series D Interest Fund are used to
accumulate funds to pay interest on the Series D certificates.
Current Receipts Fund—Amounts in the Current Receipts Fund are to be used to
accumulate funds from the collections of rent payments and other income from
the College Station Project.
B. Installment Note Payable
The Project's installment note payable is summarized as follows:
Interest
Lender/Security/Due Date Rate Balance
Cambridge Student Housing Financing Company, L.P.;
substantially all assets and assignment of rents; due
November 1,2039 8.00% $ 32,070,000
The Project's installment note is payable monthly with principal and interest payments of
$231,545 until November 1, 2039.
The following is a summary of long-term debt transactions of the Project for the year ended
August 31, 2008:
Amounts
j Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Installment note $ 32,345,000 $ - $ 2757000 $ 32,070,000 $ 32,070,000
i
The Project's original Developer refinanced the installment note through a secondary
offering with Cambridge Student Housing Financing Company, L.P. The debt certificates
were sold to private investors in the following classes:
Class(Series) Offering Total
A $ 17,500,000
B 4,900,000
C 4,820,000
D 5,380,000
Total $ 32,600,000
(continued)
13
II. DETAILED NOTES ON ALL FUNDS (Continued)
B. Installment Note Payable (Continued)
Each class has certain rights and privileges, as contained in the private placement
memorandum. As a part of the offering, the Project entered into a trust agreement with J. P.
Morgan Trust Company, N.A. (the "Trustee") for the purpose of determining that each class
is paid in accordance with the private placement memorandum.
At August 31, 2008, the Project was not in compliance with the fixed charge coverage ratio.
Should the project default, the lender may accelerate the maturity of the unpaid portion of the
principal payable under the installment sale agreement. However, the Authority does not
anticipate this event will occur, since foreclosure by private interests would result in the loss
of tax-exempt status for the Project.
C. Capital Assets
Capital asset activity for the Project for the year ended August 31, 2008, was as follows:
Beginning Prior Period Ending
Balance Increase Decrease Adjustment Balance
Capital assets,not being depreciated:
Land $ 2,899,597 $ $ - $ - $ 2,899,597
Total capital assets,
not being depreciated 2,899,597 - - 2,899,597
1
Capital assets,being depreciated:
Building 27,727,646 - 27,727,646
Furniture and fixtures 2,594,804 - - 2,594,804
Total capital assets,
being depreciated 30,322,450 - 30,322,450
iLess accumulated depreciation for:
Building ( 2,738,798) ( 871,729) - ( 3,610,527)
Furniture and fixtures ( 1,279,299) ( 484,892) - - ( 1,764,191)
Total accumulated depreciation ( 4,018,097) ( 1,356,621) - - ( 5,374,718)
i
Total capital assets,
being depreciated,net 26,304,353 ( 1,356,621) - - 24,947,732
Capital assets,net $ 29,203,950 $L 1,356,621 $ - $ $ 27,847,329
(continued)
14
II. DETAILED NOTES ON ALL FUNDS (Continued)
D. Geography and Concentration
Resident leases generally have a duration that encompasses the school year. This enables the
Project to pass on inflationary increases in operating expenses on a timely basis; however,
this exposes the Project to rental rate decreases during economic downturns. Additionally,
competition from nearby university housing properties in College Station, Texas influences
the housing rates charged to students. Despite these risks, the Project believes there will be a
continued strong demand for its dwelling units.
E. Net Assets
Net assets represent the residual assets after liabilities are deducted. Net 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 certificates,
notes, and other debt that are attributed to the acquisition, construction, or
improvement of those assets.
Restricted for Debt Service—consists of net assets for which conditions are either
externally imposed by creditors, grantors and the like, or imposed by law through
constitutional provisions or enabling legislation. At August 31, 2008, the total
funds available for debt service were less than the accrued interest due at August
31, 2008. As a result,net assets restricted for debt service is shown at zero.
Unrestricted—available for general use of the Project without restriction.
F. Management Fees/Related Party Transactions
The Project pays Asset Campus Housing asset management fees for the management of the
College Station Property. The Project recorded property management fees of approximately
$280,800 for the period ended August 31, 2008.
Administration and marketing expenses include approximately $96,346 for administrative
fees earned by Texas Student Housing Authority. There were no administrative fees
included in accounts payable at August 31, 2008.
G. Commitments and Contingencies
During fiscal year 2006, the Brazos County Tax — Assessor's office filed suit against the
Project in order to eliminate the Project's tax-exempt status. This would force the Project to
begin paying property taxes on the property owed by the Project. The County is also seeking
back property taxes previously not paid as the Project was under tax-exempt status. The
status of this suit is unknown at this time and a liability has not been booked. Should the
county prevail, the Project would owe the county a material amount of property taxes, from
both current and prior periods.
(continued)
15
II. DETAILED NOTES ON ALL FUNDS (Continued)
G. Commitments and ContiniZencies (Continued)
The Project has not 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.
H. GoinLr Concern
The 2007 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 partial non-
payment 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 full. This condition raises substantial doubt about the Project's ability to continue as a going
concern. 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.
16
SUPPLEMENTAL SCHEDULES
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION 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
$ 4,610,924
$ 5,945,851
$ 1,334,927
Other
510,623
54,748
( 455,875)
Interest
69,522
72,935
3,413
Total revenues and other support
5,191,069
6,073,534
882,465
OPERATING EXPENSES
Administrative and marketing
773,405
904,016
( 130,611)
Cafeteria
822,561
861,747
( 39,186)
Utilities
675,133
689,788
( 14,655)
Repairs and maintenance
409,356
468,335
( 58,979)
Insurance
208,200
67,757
140.443
Total operating expenses
2,888,655
2,991,643
( 102,988)
REVENUE AVAILABLE FOR FIXED CHARGES
2,302,414
3,081,891
779,477
OTHER EXPENSES
Management fees
280,800
274,058
6,742
Depreciation and amortization
1,356,620
1,356,620
-
Interest
2,817,913
2,817,913
-
Total other expenses
4,455,333
4,448,591
6.742
EXCESS OF EXPENSES OVER REVENUES
$( 2,152,919)
$( 1,366,700)
$ 786,219
17
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
SCHEDULE II-FIXED CHARGES COVERAGE RATIO
FOR THE YEAR ENDED AUGUST 31,2008
CALCULATION OF FIXED CHARGES COVERAGE RATIO
Total gross revenues
Total expenses
Add:
Interest
Depreciation and amortization
Property management fees in excess of
base property management fee
Adjusted expenses
Adjusted net operating income available to pay fixed charges
Fixed charges/maximum principal and interest for
fiscal year-end
Fixed charges coverage ratio
Required ratio
Pass or fail
18
$( 7,440,234)
2,817,913
1,356,620
124,915
$ 6,073,534
( 3,140,786)
$ 2,932,748
$ 2,778,540
1.06
1.10
Fail
(c) Under the direction ofthe 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 Authority and shall make transfers and
other dispositions of the funds and securities ofthe Authority 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 Authority.
(f) The Treasurer shall give bond on Iy 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 3.9.Executive Director.
(a) The Executive Director shall be appointed by the° id t, on tefms..ppro by the Board
of Directors and consented to by the R a ...,f Aldgfmen ToN-%,-n Council. In connection with the employment of the
Executive Director.the Authority 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:R d of A Idg en Town Council.
(b) The Executive Director shall
(i) report and be accountable to the Board of Directors, and to the Town Council
carryout instructions given by the Pr-esiden t Board of Directors and
(iii) be subject to removal(for cause or without cause)at anytime by the Board of Directors
and or the Town Council
(c) If the Executive Director is removed,the Authority shall hire,as a successor 'Ixecutive
Director.the person appointed by the Presidpl#on.40H:Hs' 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 qffcio as
both:assistant Secretary and Assistant Treasurer.
SECTION 3.10.Compensation of Officers.
Officers who are not Directors may receive compensation for their services as officers on terms approved by
the Board of Directors.
'ESHA.BYLAWS Page
TAM.v 1.4:20.-2004
AMENDEDED AND RESTATED
BYLAWS
of
TEXAS STUDENT HOUSING AUTHORITY
ARTICLE I
POWERS AND OPERATIONS IN GENERAL
SECTION 1.1. Powers of Authority.
The Texas Student Housing Authority (the "Authority") 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 Authority shall be managed by the Board of Directors (the "Board of Directors") in
accordance with the Act.
SECTION 1.2. Supervision by Beafd of ldefinen.the Town Council.
As the instrumentality of the Town of Westlake(the"Town"),the Authority and its policies are subject
to supervision by the Town's Bawd of ^'a eF ?E}(the�"Board 0f la°^—.... )Town Council(the Council)
SECTION 1.3. Student Assistance Program.
(a) The Authority 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:
of Texas, and
(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
(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 Authority at a cost
less 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
(1) not subject to a lien and/or pledge securing the Authority's bonds or other obligations,
(ii) not required for the timely payment of the Authority's operation and maintenance
expenses, and
TSHA.BYLAWS—Page 1
TAM.v1.4/20/2004
(iii) authorized by the Board of Directors.
(e) Authority funds not used to provide funds for the Student Assistance Program may be used for
any lawful purpose.
SECTION 1.4. Regulations.
The Authority,by action of the Board of Directors,may promulgate regulations(the"Regulations")
governing the Authority's operations and implementation ofthe Student Assistance Program. The Regulations
shall not conflict with, and shall be subject to,these Bylaws.
ARTICLE II
THE BOARD OF DIRECTORS
SECTION 2.1. Number,Appointment, Tenn,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 1X? r>r of
'Vid 11. Jbvv= ::£: r <°il.
.................................................................
(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 -13,o -1. 1.4'
(f) No officer or employee of the Town may serve as a Director.
SECTION 2.2. Resi ation.
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 Authority. 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 the Authority, 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
Authority. Each committee shall consist of two or more Directors. Committees that do not have the authority
of the Board of Directors in the management of the Authority may be designated by resolution of the Board of
Directors and membership on any committee is not limited to Directors.
TSHA.BYLAWS—Page 2
TAM.v].4/20/2004
(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.
(a) The officers of the Authority 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 term 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.
SECTION 3.3 President.
(a) The President is the chief executive officer of the Authority and,subject to the actions of the
Board of Directors, shall have general charge and supervision of the management of the affairs of the
Authority.
(b) The President shall preside at all meetings of the Board of Directors.
TSHA.BYLAWS—Page 3
TAMA.4/20/2004
(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
Authority 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 Authority.
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 Authority 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 ofthe Board of Directors relating to the
issuance of bonds or other obligations of the Authority or to instruments authorized by the Board of Directors
to provide security therefor,the Treasurer shall have the custody of all the funds and securities of the Authority
and shall deposit them to the credit of the Authority 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 fiends and other property belonging to the Authority and of all receipts and disbursements ofthe
Authority.
TSHA.BYLAWS—Page 4
TAM.v1.4/20/2004
(c) 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 Authority and shall make transfers
and other dispositions of the funds and securities of the Authority 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 Authority.
(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 3.9. 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 Board of Aldermen Town Council.In connection with the employment of
the Executive Director, the Authority 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 Beafd of"'ao... en 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 oi•without cause)at anytime by the President and/or
the
.. ...-. ................ ........
(c) If the Executive Director is removed, the Authority 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 officio as
both Assistant Secretary and Assistant Treasurer.
SECTION 3.10. Compensation of Officers.
Officers who are not Directors may receive compensation for their services as officers on tel-ms
approved by the Board of Directors.
TSHA.BYLAWS—Page 5
TAM.v1.4/20/2004
ARTICLE IV
MEETINGS
SECTION 4.1. Meetings of Directors.
(a) The Board of Directors shall hold its meetings at the principal office of the Authority;
provided that, if the President determines that, with respect to any regular or special 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 time for giving the notice)shal l be deemed
to be the equivalent to the giving of notice.
SECTION 4.2. Quorum.
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 Authority. The act of a majority of the
Directors present at a meeting 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 ofthe
Board of Directors may determine.
TSHA.BYLAWS—Page 6
TAM.v 1.4/20/2004
ARTICLE V
ADMINISTRATION
SECTION 5.1. Staffing.
(a) Upon the recommendation of the President and the approval of the Board of Directors,the
Authority may hire full or part-time employees to carry out the functions of the Authority.
(b) Staff functions of the Authority may be performed by employees of the Town if and to the
extent approved by the Board of Aldermen 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 Authority,and all employees of
the Authority shall report to the Executive Director.
SECTION 5.2. Engagement of Consultants.
(a) To assist the Authority in acquiring, financing, and managing the Authority's projects and
administering the Student Assistance Program and other activities of the Authority,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
BE)afd of Aldeffnen Town Council and shall be responsible directly to the President,the Board of Directors,
and the a of lde men 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 Authority or the Town and(ii)
shall prescribe the compensation payable to the Consultant. With respect to the relationship between the
Authority 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
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 Authority has oversight responsibilities, including, but not limited to, approval of
budgets,monitoring the performance of the Authority's property manager(s)(if any),obtaining insurance,and
other related matters,for any project that the Authority has financed and/or owns,the Executive Director,with
respect to the provisions that are contained in the documents governing the acquisition,financing,operations,
TSHA.BYLAWS—Page 7
TAM.vl.4/20/2004
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:
(i) the Authority is in compliance with all material requirements applicable to the
Authority 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 Authority.
(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' °°-Fa e f "'a
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
Board of Aldeffnen 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.
(a) The Authority 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 Beafd e f ide ie Town Council.
TSHA.BYLAWS—Page 8
TAMM.4/20/2004
(c) The Secretary and Assistant Secretary,under the supervision of the Executive Director,shall
be responsible for keeping and maintaining the Authority's records.
SECTION 5.5. Authorization to Write Checks.
The President,the Treasurer,the Executive Director,the Assistant Treasurer and the Secretary each
shall be authorized to write checks on behalf of the Authority from any bank or trust account maintained by the
Authority for any purpose authorized by the Board of Directors; provided that, 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 Authority may prescribe fees payable by applicants for financial participation and/or assistance by
the Authority and such other fees and charges as the Board of Directors determines appropriate to defray the
administrative expenses incurred in the operation of the Authority or to be used for any other lawful purposes.
SECTION 5.7. Fiscal Year.
The fiscal year of the Authority shall be the annual period determined by resolution of the Board of
Directors.
SECTION 5.8. Amounts Owning to Town.
The Authority shall pay any amounts owed to the Town for permitting its employees to provide
staffing for the Authority 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 B,,aM of Aldefffien Town Council and the
Board of Directors.
SECTION 6.2. Seal.
The official seal of the Authority shall be as detennined by the Board of Directors. The seal shall not
be necessary to the proper execution by the officers of the Authority of any document or instrument unless
otherwise specified by the Board of Directors.
SECTION 6.3. Amendments.
These Bylaws may be amended at any tune, and from time to time, by resolutions adopted by the
Board of Directors and the Beard of Aldefmen Town Council.
SECTION 6.4. Interpretation.
TSHA.BYLAWS—Page 9
TAMM A/20/2004
These Bylaws shall be liberally construed to effect the purposes of the Authority. 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.
entity.
The Authority shall comply with the following special requirements:
(a) The Authority shall maintain its books and records separate and apart from any other legal
(b) The Authority shall not commingle its assets with the assets of any other legal entity.
(c) The Authority shall maintain financial records separate from any other legal entity.
(d) The Authority shall maintain an"arms-length"relationship with all other legal entities except
as otherwise may be required by law.
(e) The Authority shall pay the salaries of its own employees.
SECTION 6.6. Financial Relationship with Town.
(a) As the duly created instrumentality ofthe Town,the Authority shall be required to compensate
the Town for overseeing the activities of the Authority and providing facilities and staffto the Authority. Upon
receipt of a resolution adopted by the 8...,,d of l def en Town Council assessing an oversight and facilities
fee payable by the Authority to the Town,the Authority shall be obligated to pay the fee in the amount and on
teens authorized by the B..^,..7 of ldef nen Town Council without any action being required 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 Authority 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 Authority, the
following actions shall be taken:
(i) all assets,including real and personal property of all types,owned by the Authority at
the time of such dissolution shall be transferred to the Town after all debts, liabilities,and obligations of the
Authority 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 Authority shall take any action necessary or
appropriate to effect the transfer of the Authority's assets to the Town.
TSHA.BYLAWS—Page 10
TAM.v 1.4/20/2004
January 15,2009
Mr. Henry C. Smyth
512 Wagonwheel Court
Colleyville,Tx 76034
Re: Employment of Scholarship Consultant
Dear Mr. Smyth:
The Texas Student Housing Authority(TSHA) acting under the Inter-Entity Agreement
for the various corporations is pleased to employ Henry C. Smyth as Scholarship Consultant.
Mr. Smyth shall be referred to in this agreement as the "Scholarship Consultant"
DUTIES OF SCHOLARSHIP CONSULTANT
1. The Scholarship Consultant shall be responsible to the President of TSHA or to the Executive
Director of the TSHA.
2. The Scholarship Consultant shall be responsible for the conduct of the TSHA Scholarship
Process.
3. The process shall include but not be limited to:
(1) Read and analyze new scholarship applications for each TSHA location.
(2)In conjunction with staff,determme the priority listing and initial order of scholarship offers.
(3) Assist in the process of communicating the Group 1, highest priority offers to applicants.
(4)In conjunction with staff,select follow on offers and repeat the process sequentially for Groups 2,3
and 4 on a two week cycle or as directed.
(5) In conjunction with staff, determine the Full Scholarship offers and communicate with the
potential recipients and families to verify that the scholarships will be accepted if offered.
January 15, 2009
Mr. Henry C. Smyth
512 Wagonwheel Court
Colleyville,Tx 76034
Re: Employment of Scholarship Consultant
Dear Mr. Smyth:
The Texas Student Housing Authority (TSHA)acting under the Inter-Entity Agreement
for the various corporations is pleased to employ Henry C. Smyth as Scholarship Consultant.
Mr. Smyth shall be referred to in this agreement as the "Scholarship Consultant"
DUTIES OF SCHOLARSHIP CONSULTANT
1. The Scholarship Consultant shall be responsible to the President of TSHA or to the Executive
Director of the TSHA.
2.The Scholarship Consultant shall be responsible for the conduct of the TSHA Scholarship
Process.
3. The process shall include but not be limited to:
(1) Read and analyze new scholarship applications for each TSHA location.
(2)In conjunction with staff,determine the priority listing and initial order of scholarship offers.
(3) Assist in the process of communicating the Group 1,highest priority offers to applicants.
(4)In conjunction with staff,select follow on offers and repeat the process sequentially for Groups 2,3
and 4 on a two week cycle or as directed.
(5) In conjunction with staff, determine the Full Scholarship offers and communicate with the
potential recipients and families to verify that the scholarships will be accepted if offered.
January 15,2009
Mr. Henry C. Smyth
512 Wagonwheel Court
Colleyville,Tx 76034
Re: Employment of Scholarship Consultant
Dear Mr. Smyth:
The Texas Student Housing Authority(TSHA)acting under the Inter-Entity Agreement
for the various corporations is pleased to employ Henry C. Smyth as Scholarship Consultant.
Mr. Smyth shall be referred to in this agreement as the "Scholarship Consultant"
DUTIES OF SCHOLARSHIP CONSULTANT
1. The Scholarship Consultant shall be responsible to the President of TSHA or to the Executive
Director of the TSHA.
2.The Scholarship Consultant shall be responsible for the conduct of the TSHA Scholarship
Process.
3. The process shall include but not be limited to:
(1) Read and analyze new scholarship applications for each TSHA location.
(2)In conjunction with staff,determine the priority listing and initial order of scholarship offers.
(3) Assist in the process of communicating the Group 1,highest priority offers to applicants.
(4)In conjunction with staff,select follow on offers and repeat the process sequentially for Groups 2,3
and 4 on a two week cycle or as directed.
(5) In conjunction with staff, determine the Full Scholarship offers and communicate with the
potential recipients and families to verify that the scholarships will be accepted if offered.
DENTON RENEWALS
1 Denton
2006-2007
Med School
No
Not Eligible 3
2 Denton
2008-2009
No
No
Yes 20
3 Denton
2007-2008
No
No
No 8
4 Denton
2005-2006
4th year
Not Eligible
3.703/4.0/12
No
No Response 8
5 Denton
2008-2009
No
No
No/Main.Issues
Total 39
6 Denton
2006-2007
No
No
7 Denton
2008-2009
Grad Aug
No
No
8 Denton
2008-2009
No
No/engaged
9 Denton
2006-2007
Grad May
No
10 Denton
2005-2006
4th year
Not Eligible
11 Denton
2005-2006
4th year
Not Eligible
12 Denton
2008-2009
yes
185
Yes
Yes
13 Denton
2008-2009
Yes
195
yes
Yes
14 Denton
Full 2007-2008
Yes
170
Yes
Yes
15 Denton
2007-2008
Yes
215
yes
yes
16 Denton
2008-2009
Yes
150
yes
yes
17 Denton
2008-2009
Yes
220
3.68/3.38/18
Yes
18 Denton
2008-2009
Yes
170
Yes
Yes
19 Denton
2008-2009
Yes
210
4.0/4.0/16
Yes
20 Denton
2008-2009
Yes
195
Yes
Yes
21 Denton
2008-2009
Yes
185
3.53/3.28/14
Yes
22 Denton
2008-2009
Yes
180
Yes
Yes
23 Denton
2008-2009
Yes
200
Yes
yes
24 Denton
2008-2009
Yes
210
3.9615/4/16
Yes
25 Denton
2008-2009
Yes
175
No/3.85/12
Yes
26 Denton
2006-2007
Yes
215
Yes
Yes
27 Denton
2007-2008
Yes
200
Yes
yes
28 Denton
2007-2008
Yes
175
3.466/3.2/15
Yes
29 Denton
2008-2009
Yes
185✓3.558/3.666/15
Yes
30 Denton
2008-2009
Yes/Prov.
80
2.58/3.0/12
Yes
31 Denton
2008-2009
32 Denton
2007-2008
33 Denton
2008-2009
34 Denton
2008-2009
Yes
35 Denton
2008-2009
Yes/Prov.
145 2.866/2.850/15
Yes
36 Denton
2008-2009
Yes
37 Denton
2007-2008
38 Denton
Full 2007-2008
Yes
39 Denton
2008-2009
+-,cw C&
1/20/2009 11:45 AM
PAGE 3 OF12
`t,Y
ti..
SAN MARCOS RENEWALS
1 San Marcos
2008-2009 Grad/Dec.2009
No
200
3.85/4.0/15
Yes
Not Eligible
2 San Marcos Full
2005-2006 4th year
Not Eligible
No
Yes
3 San Marcos
2008-2009 Grad May
No
No
No
4 San Marcos
2008-2009
No
30
1.5/1.5/9
Yes
No Response
5 San Marcos
2008-2009
Yes
155
Yes
Yes
Total
6 San Marcos
2008-2009
Yes
215
Yes
Yes
7 San Marcos
2008-2009
yes
180
3.3/3.6/14
Yes
8 San Marcos
2008-2009
Yes/Prov.
150
2.62/2.62/16
Yes
9 San Marcos
2008-2009
Yes/Prov.
130
2.85/2.18/17
Yes
10 San Marcos
2008-2009
Yes
11 San Marcos
2008-2009
12 San Marcos
2008-2009
13 San Marcos
2008-2009
Yes
1
5
3
4
13
1/20/2009 11:45 AM
PAGE 5 OF12
BALLPARK RENEWALS
Property
Full?
Year
Renewal
Renew?
1 Ballpark
210 Yes
2007-2008
200 Yes
No
2 Ballpark
Full
2007-2008
Yes
No
3 Ballpark
165 Yes
2008-2009
165 Yes
No
4 Ballpark
Yes
2005-2006
4th year
Not Eligible
5 Ballpark
130 No/3.12/2.67/15
2005-2006
4th year
Not Eligible
6 Ballpark
Full
2008-2009
Yes
No
7 Ballpark
2007-2008
Grad May
No
8 Ballpark
2006-2007
Grad May
No
9 Ballpark
2008-2009
No
10 Ballpark
2005-2006
4th year
Not Eligible
11 Ballpark
2008-2009
Grad May
No
12 Ballpark
2005-2006
4th year
Not Eligible
13 Ballpark
Full
2007-2008
Yes
14 Ballpark
2006-2007
Yes
15 Ballpark
Full
2008-2009
Yes
16 Ballpark
Full
2008-2009
Yes
17 Ballpark
2006-2007
Yes
18 Ballpark
Full
2007-2008
Yes
19 Ballpark
Full
2006-2007
Yes
20 Ballpark
2006-2007
Yes
21 Ballpark
2007-2008
Yes
22 Ballpark
2006-2007
Yes
23 Ballpark
Full
2008-2009
Yes
24 Ballpark
Full
2007-2008
Yes/Incre
25 Ballpark
Full
2007-2008
Yes/Incre/Prov.
26 Ballpark
2008-2009
Yes/Prov.
27 Ballpark
2008-2009
Yes/Prov.
28 Ballpark
2006-2007
Yes/Prov.
29 Ballpark
2007-2008
30 Ballpark
Full
2008-2009
31 Ballpark
2007-2008
32 Ballpark
2006-2007
33 Ballpark
2008-2009
No
34 Ballpark
2008-2009
35 Ballpark
2006-2007
Yes
36 Ballpark
Full
2007-2008
37 Ballpark
2008-2009
Score Met Reqments Req't Renewal
No Not Eligible
90 2.2/1.75/16 Yes Yes
No No
No Response
Total
No
3.75/4.0/15
185 Yes
Yes
200 Yes
Yes
175 Yes
Yes
210 Yes
Yes
200 Yes
Yes
155 Yes
yes
160 3.41/3.25/16
Yes
200 Yes
yes
165 Yes
Yes
165 Yes
Yes
3.0666/3.0666/18
Yes
115 7592/2.2352/17
Yes
125 No/2.92/2.66/12
Yes
130 No/3.12/2.67/15
Yes
150 3.26/2.44/16
Yes
105 8235/2.5384/13
Yes
Yes
Yes
30 4285/2.4285/14 Yes
Yes
150 3.4078/2.5/12 Yes
Yes
4
17
9
7
37
1/20/2009 11:45 AM
PAGE 1 OF12
TOWN LAKE RENEWALS
1
Town
Lake
2005-2006
4th year
Not Eligible
Not Eligible
2
Town
Lake
2008-2009
No
No/moving
Yes
3
Town
Lake
2007-2008
Grad May
No
No
4
Town
Lake
2008-2009
No
75
2.2/2.2/15
Yes
No Response
5
Town
Lake
2007-2008
No
115
No/2.84/2.38/16
Yes
Total
6
Town
Lake
2008-2009
No
105
No/2.75/2.75/12
Yes
7
Town
Lake
2008-2009
No
1.875/1.875/16
8
Town
Lake
2005-2006
4th year
Not Eligible
9
Town
Lake
2008-2009
Grad
No
No
10
Town
Lake
2005-2006
4th year
Not Eligible
11
Town
Lake
2005-2006
4th year
Not Eligible
12
Town
Lake
2005-2006
4th year
Not Eligible
13
Town
Lake
2008-2009
Yes
190
yes
yes
14
Town
Lake
Full
2006-2007
Yes
165
2.98/3.0/15
Yes
15
Town
Lake
2008-2009
Yes
180
Yes
Yes
16
Town
Lake
2007-2008
Yes
155
Yes
Yes
17
Town
Lake
2008-2009
Yes
190
Yes
Yes
18
Town
Lake
Full
2007-2008
Yes
200
Yes
Yes
19
Town
Lake
2006-2007
Yes
195
3.47/3.65/17
Yes
20
Town
Lake
2008-2009
Yes
120
2.844/2.4/15
Yes
21
Town
Lake
Full
2006-2007
Yes
195
Yes
Yes
22
Town
Lake
2008-2009
Yes
185
Yes
Yes
23
Town
Lake
2006-2007
Yes
155
3.17/3.0/14
Yes
24
Town
Lake
2006-2007
Yes
Yes
Yes
25
Town
Lake
2008-2009
Yes
1650
2.95/3.25/16
Yes
26
Town
Lake
2006-2007
Yes
175
3.26/3.6/15
Yes
27
Town
Lake
2007-2008
Yes
225
Yes
Yes
41
Town
Lake
Full
2007-2008
Yes
155
3.2571/3.4/12
Yes
28
Town
Lake
2008-2009
Yes
180
Yes
yes
29
Town
Lake
2008-2009
Yes
195
Yes
yes
30
Town
Lake
2008-2009
Yes
215
Yes
Yes
31
Town
Lake
2008-2009
Yes
215
Yes
Yes
32
Town
Lake
2007-2008
Yes
160
Yes
Yes
33
Town
Lake
Full
2007-2008
Yes
205
Yes
Yes
34
Town
Lake
2006-2007
Yes/Prov.
130
No/2.94/2.75/15
Yes
35
Town
Lake
2006-2007
Yes/Prov.
155
Yes
yes
36
Town
Lake
Full
2008-2009
Yes/Prov.
110
No/2.75/2.75/16
Yes
37
Town
Lake
2007-2008
Yes/Prov.
145
No/2.78/2.8/15
yes
38
Town
Lake
2008-2009
Yes/Prov.
145
2.8/3.4/15
Yes
39
Town
Lake
2008-2009
40
Town
Lake
2008-2009
42
Town
Lake
2008-2009
43
Town
Lake
2008-2009
5
27
7
4
43
1/20/2009 11:45 AM
PAGE 6 OF12
CAMBRIDGE RENEWALS
1 Cambridge
2007-2008
No
No
Not Eligible
2 Cambridge
2007-2008
No
No
Yes
3 Cambridge
2008-2009
No
60 1.87/1.87/15
Yes
No
4 Cambridge
Full
2007-2008
Yes
150,/3.146/3.307/13
Yes
No Response
5 Cambridge
Full
2007-2008
Yes
175 Yes
Yes
Total
6 Cambridge
2008-2009
Yes
195 Yes
Yes
7 Cambridge
Full
2006-2007
Yes
215 Yes
Yes
8 Cambridge
Full
2006-2007
Yes
185 Yes
yes
9 Cambridge
Full
2006-2007
Yes
165 Yes
yes
10 Cambridge
Full
2007-2008
Yes
165 3.384/3.0/15
Yes
11 Cambridge
2008-2009
Yes/Prov.
125,/2.923/2.923/14
Yes
12 Cambridge
2008-2009
Yes/Prov.
130 2.86/2.86/15
Yes
13 Cambridge
2008-2009
Yes
165 No/3.5/12
Yes
14 Cambridge
Full
2007-2008
15 Cambridge
Full
2007-2008
16 Cambridge
2008-2009
17 Cambridge
2007-2008
2.891/2.937/16
0
10
3
4
17
1/20/2009 11:45 AM
PAGE 2 OF12
Q
47
m
O
O
N
O
N
CO
W
Z
W
rr
W
0
rr
J
5W
O m r N
N r N
N N O 07
m} Z O 1-
CL
W y
(V
O Q'
Z o
Z
O N O O N O V) 0 0 V) 0 N N 0 N N 0 V) N N N 0 0 N N N 0 V) N N N N 0 N 0 0 V) N V) N
z N z z O C N O) N N d N N O) d N N O N O N O N d N N N N N O) N N O) O) N N O N N CO
} } }}} }}} } T T} } }} } T}}} } } } T} } } } } } } }} } } }
n
N
d
}
m co to N CD Cl) V) Lo V) V) V) V) V) V) Lo V) V) V) V) V) V) V) V) V) w V) Lo V) V) V) O (D "T N (D (D
N f) O M O (D 1- >- >-} } } } } } } } }}}} } } T} }} T
W z
V M CO �o
N V N N CO Crj Cl) Cl) a) M N
N N N N N
p N LO N
N N
N V N o N (D M M M Cm0 N M to N
N o Z z N o } N n
M
z z N N
N O O O LO N Lo N tf�o Crn N m O to O N O N O to O to O to Lo N to O Co O M to O l)
m m V V MO to
(D O mtommNto W 1� W mm c0 Into NN (2 C011
Z Z Z Z Z Z Z Z Z Z }}}} } }}} }}} } }} } } } }} }}} } } O O O O }
aaaa
N N f/l N
N
Q
R
U
G
O
[7)
C
m m m m m m m m m I- m m mrl- m m m m m m m OD I- I- m m W m c0 m m W W m m m OD m m W m OD m m m m m m m m m m
0 o O o O o 0 o 0 0 0 o 0 0 o O O O o 0 o O O o 0 o O O O O O O O O O o 0 0 o 0 0 o o o o o o o o 0 0 o
O O O 0 O o O O O 0 O o 0 0 0 o O o o O O O O o O O O O O O O O O o o O o 0 o 0 0 o o o o o o o o 0 0 o
N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N
co W 00 OD W co co OD CO m W W co m OD co 00 OD OD OD co I- m CD co co I- M r M co r � co co W I� co co I- co I- W W OD OD co N co co co co
o o o o o o o o o o o 0 0 o o 0 o o 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 O O 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 O 0
o o o o o o o o o o o o o 0 o o o o 0 0 o 0 0 o O O o 0 0 0 O O O O O O o O O o 0 o O O O O O O O O o O
N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N
N N N N N N N N N N N N N N N N N N N N N N d N N N d O N d d N N N N d N N N N N N N N N N N N N (U N N
u> VI N u) V) V) V) U) VI U1 V1 V1 V) V) N V) N N N N V) N V) N N N N VI V) N VI U) N N V) U) V) V7 V) VI N V) Ul VI N N Vl VI U) Ul N N
O_ O O O O O O O O O O O O O O O O O_ 0 0 0 0 0 0 O_ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O_ 0 0 0 0 0 0
N N N N N N N N O O N N N N N O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N d N N N N (O d
�- N CO V to (D 1- CO m 0�- CV Co V N (D I- M m 0 N CO V N CD 1-- W m O N M V M m r CO m 0 N
•- .- �- N N N N N N N N N N M M M M M M M M M M V V' V 'IT 'IT V V V V V N N N
N_
LL
O
V
W
C7
Q
d
i I G
MINUTES OF THE
BOARD OF DIRECTORS OF THE
TEXAS STUDENT HOUSING AUTHORITY
(AN INSTRUMENTALITY OF THE TOWN OF WESTLAKE)
September 16,2008
PRESENT: Chairman Jim Carter and Directors Jac Irvine, George Ledak, and Jill McKean,
Melanie Lekkos, and Chuck Schultz.
ABSENT: None.
OTHERS PRESENT: Finance Manager Pete Ehrenberg, Secretary Kim Sutter, and
General Counsel Scott Bradley.
1. CALL TO ORDER.
Chairman Carter called the meeting to order at 6:34 p.m.
2. PRESENTATION AND RECOGNITION OF OUTGOING PRESIDENT HENRY C.
SMYTH.
Chairman Carter presented outgoing President Smyth with a token of the Board's
appreciation.
Members of the Board expressed their appreciation to Mr. Smyth for his years of service.
3. PRESENTATION AND DISCUSSION BY ASSET CAMPUS REGARDING
PROPERTY MANAGEMENT.
Staff advised that, due to the recent hurricane, Asset Campus was unable to attend the
meeting, and a presentation will be scheduled for a future meeting date.
Chairman Carter recessed the meeting at 6:55 p.m.
Chairman Carter reconvened the meeting at 7:31 p.m. at the Town Hall offices, 3 Village
Circle, Suite 207, Westlake, Texas.
4. HEAR AND ACCEPT FINANCE MANAGER'S REPORT.
Finance Manager Ehrenberg presented the report to the Board, and reviewed the property
budgets, including the balance sheets, and profit and lost statements through August 31,
2008.
TSHA Board of Directors Page 2 of 4
Meeting Minutes
September 16,2008
Board discussion ensued regarding the report.
MOTION: Director Schultz made a motion to accept the Finance Manager's report.
Director McKean seconded the motion. The motion carried by a vote of
6-0.
5. CONSIDER APPROVAL OF THE MINUTES OF THE APRIL 15, 2008,
MEETING.
Chairman Carter introduced the item and requested a motion.
MOTION: Director McKean made a motion to approve the minutes as presented.
Director Lekkos seconded the motion. The motion carried by a vote of 6-
0.
6. CONSIDER APPROVAL OF THE MINUTES OF THE JUNE 17,2008, MEETING.
Chairman Carter introduced the item and requested a motion.
MOTION: Director Ledak made a motion to approve the minutes as presented.
Director McKean seconded the motion. The motion carried by a vote of
6-0.
7. EXECUTIVE SESSION.
Chairman Carter recessed the regular meeting at 7:55 p.m. to discuss the following items
in executive session:
A. The Board will conduct a closed session under Texas Government Code section
551.074 to discuss personnel matters, specifically related to the appointment of an
interim President.
B. The Board will conduct a closed session under Texas Government Code section
551.071 to seek advice of counsel on legal matters involving pending or contemplated
litigation, settlement offers, or other legal matters not related directly to litigation or
settlement of litigation, specifically related to 1) a consultant contract for the purpose
of evaluating scholarship applications; and 2) current and proposed contracts for
President, Interim President and Finance Manager.
Chairman Carter convened the executive session at 7:56 p.m. The executive session
adjourned at 9:39 p.m.
Chairman Carter reconvened the meeting at 9:47 p.m.
8. DISCUSS AND CONSIDER REQUEST FOR PAYOUT OF VACATION ACCRUAL
TO PAST PRESIDENT.
Chairman Carter introduced the item and asked for a motion.
No motion was brought to the table for consideration.
TSHA Board of Directors
Meeting Minutes
September 16,2008
Page 3 of 4
9. DISCUSS AND CONSIDER APPROVING THE FY 2008-2009 AUTHORITY
BUDGET.
Discussion ensued regarding the proposed budget.
Staff was directed by the Board to make the following revisions and resubmit a balanced
budget to the Board for consideration.
- Reduce the contract labor line item to $167,000;
- Reduce the Other Expense Reserve line item 8020 to $50,000;
- Reduce Other Expenses line item 8010 to $0.00.
Director Irvine asked for clarification regarding the amounts associated with the assessment
of TSHA and the executive search for a President.
Town Manager Brymer addressed the Board regarding the estimates presented for an
executive search and assessment of TSHA.
MOTION: Based on the discussion, Director Schultz made a motion directing staff to
present a revised budget for consideration. Director Lekkos seconded the
motion. The motion carried by a vote of 6-0.
10. DISCUSS AND CONSIDER APPOINTING AN INTERIM PRESIDENT.
Chairman Carter recommended the Board appoint Mr. Pete Ehrenberg to serve as the TSHA
President on an interim basis. Mr. Carter recommended an increase in salary of$1,000 per
month for the additional responsibilities.
Discussion ensued regarding the recommendation of the Board of Aldermen to utilize an
executive search firm to identify a candidate to serve as the TSHA President.
MOTION: Director McKean made a motion to appoint Pete Ehrenberg to serve as the
TSHA President on an interim basis. Director Schultz seconded the motion.
The motion carried by a vote of 6-0.
11. DISCUSS AND CONSIDER APPROVING A CONTRACT FOR A CONSULTANT
TO EVALUATE SCHOLARSHIP APPLICATIONS.
Chairman Carter introduced the item and recommended the Board considering tabling action
on the item until the TSHA Board receives feedback from the Board of Aldermen.
MOTION: Director Schultz made a motion to table this item at this time. Director Ledak
seconded the motion. The motion carried by a vote of 6-.
12. ADJOURN.
MOTION: Director Schultz made a motion to adjourn the meeting. Director Lekkos
seconded the motion. The motion carried by a vote of 6-0.
Chairman Carter declared the meeting adjourned at 10:12 p.m.
TSHA Board of Directors
Meeting Minutes
September 16,2008
Page 4 of 4
APPROVED BY THE TEXAS STUDENT HOUSING AUTHORITY BOARD OF
DIRECTORS JANUARY 20, 2009.
Jim Carter, Chairman
ATTEST
Kim Sutter, Secretary