HomeMy WebLinkAboutBallpark Audit 08-31-04 TEXAS STUDENT HOUSING
AUTHORITY --
BALLPARK AUSTIN PROJECT
FINANCIAL REPORT
AUGUST 31, 2004
CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT ...................................................................................1
FINANCIAL STATEMENTS
Statement of Net Assets..................................................................................................2
Statement of Revenues, Expenses, and Changes in Net Assets.....................................3
Statementof Cash Flows.................................................................................................4
Notes to Financial Statements.........................................................................................6
Auditors Report of Supplemental Schedules..................................................................15
SUPPLEMENTAL SCHEDULES
Schedule I —Schedule of Revenues and Expenses.......................................................16
Schedule II — Certificate of the Fixed Charges Coverage Ratio .....................................17
INDEPENDENT AUDITOR'S REPORT
WEAVED To the Board of Directors
TID HELL Texas Student Housing Authority - Ballpark Austin Project
L.L.P,
We have audited the accompanying financial statements of Texas Student
CERTIFIED PUBLIC Housing Authority-Ballpark Austin Project (the "Project"), as of and for the twenty
Accou NTANTS
AND CONSULTANTS month period ended August 31, 2004, as listed in the table of contents. 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 1, 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, 2004, and the changes in its financial position
and cash flows, where applicable, for the twenty month 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, 2004 and the results of its operations and
cash flows for the twenty month period then ended in conformity with accounting
principles generally accepted in the United States of America.
Texas Student Housing Authority — Ballpark Austin Project has not presented
DALLAS management discussion and analysis that accounting principles generally
accepted in the United States of America has determined is necessary to
'hree Forest Plaza supplement, although not required to be part of the basic financial statements.
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FORT WORTH WEAVER AND TIDWELL, L.L.P.
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Site 300 Fort Worth, Texas
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Y 17.33 7.7905
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AN INDEPENDENT MEMBER OF
BAKER TILLY
I NTERNAT'lONAL
Page 2
TEXAS STUDENT HOUSING AUTHORITY - BALLPARK AUSTIN PROJECT
STATEMENT OF NET ASSETS
AUGUST 31, 2004
ASSETS
CURRENT ASSETS
Cash $ 238,962
Restricted cash 3,566,901
Accounts receivable 40,951
Total current assets 3,846,814
CAPITAL ASSETS
Land 4,788,265
Other capital assets, net of accumulated depreciation 24,946,058
Total capital assets 29,734,323
INTANGIBLE ASSETS
Deferred financing costs, net of amortization 3,288,042
Total intangible assets 3,288,042
TOTAL ASSETS $ 36,869,179
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Trade accounts payable $ 71,991
Management fees payable 338,450
Deferred revenue 249,992
Tenant security deposits 41,071
Accrued interest 1,365,405
Other current liabilities 132,583
Development fee payable 158,033
Bonds payable 464,915
Total current liabilities 2,822,440
LONG TERM LIABILITIES
Bonds payable 36,767,753
Deferred purchase price 1,460,000
Total long term liabilities 38,227,753
NET ASSETS
Invested in capital assets, net of related debt ( 7,498,345)
Restricted for debt service 2,116,652
Unrestricted 1,200,679
Total net assets ( 4,181,014)
TOTAL LIABILITIES AND NET ASSETS $ 36,869,179
The Notes to Financial Statements are
an integral part of this statement.
Page 3
TEXAS STUDENT HOUSING AUTHORITY - BALLPARK AUSTIN PROJECT
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE TWENTY MONTH PERIOD ENDED AUGUST 31, 2004
OPERATING REVENUES
Rental income $ 5,955,286
Other income 47,466
Total operating revenue 6,002,752
OPERATING EXPENSES
Personnel expenses 548,525
Contract services 65,748
Utilities 590,616
Repairs and maintenance 43,684
Turnover expenses 161,094
Advertising and promotion 114,709
Administration expenses 589,371
Management fees 448,360
Replacements 86,312
Depreciation expense 2,186,561
Amortization expense 300,633
Total operating expenses 5,135,613
OPERATING INCOME 867,139
NONOPERATING REVENUES (EXPENSES)
Interest income 218,379
Interest expense { 4,131,917)
TOTAL NONOPERATING LOSS { 3,913,538)
CHANGE IN NET ASSETS { 3,046,399)
NET ASSETS, AUGUST 31, 2003, AS PREVIOUSLY REPORTED ( 824,463)
PRIOR PERIOD ADJUSTMENT { 310,152)
NET ASSETS, AUGUST 31, 2003, RESTATED { 1,134,615)
NET ASSETS, AUGUST 31, 2004 ($ 4,181,014)
The Notes to Financial Statements are
an integral part of this statement.
Page 4
TEXAS STUDENT HOUSING AUTHORITY - BALLPARK AUSTIN PROJECT
STATEMENT OF CASH FLOWS
FOR THE TWENTY MONTH PERIOD ENDED AUGUST 31, 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants $ 5,978,140
Cash paid to employees { 543,424)
Cash paid to suppliers 1,793,680)
Net cash provided by operating activities 3,641,036
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES -
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Payments on bonds payable ( 770,000)
Interest paid ( 4,094,526)
Net cash used in capital and related financing activities ( 4,864,526
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 218,379
Net cash provided by investing activities 218,379
Net change in cash and cash equivalents { 1,005,111)
Cash and cash equivalents at beginning of year restated 4,810,974
Cash and cash equivalents at end of year $ 3,805,863
Cash $ 238,962
Restricted cash 3,566,901
Total cash and cash equivalents $ 3,805,863
The Notes to Financial Statements are
an integral part of this statement.
Page 5
TEXAS STUDENT HOUSING AUTHORITY - BALLPARK AUSTIN PROJECT
STATEMENT OF CASH FLOWS
FOR THE TWENTY MONTH PERIOD ENDED AUGUST 39, 2004
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 867,139
Adjustments to reconcile operating income to
net cash used in operating activities
Depreciation and amortization 2,487,194
Changes in operating assets and liabilities:
Accounts receivable 36,669
Other assets 33,182
Trade accounts payable ( 37,275)
Management fees payable 227,650
Deferred revenue ( 38,652)
Tenant security deposits ( 22,629)
Development fee payable 78,000
Other current liabilities 9,758
Net cash provided by operating activities $ 3,641,036
The Notes to Financial Statements are
an integral part of this statement.
Page 6
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 1. 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 Ballpark Austin
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"). 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 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 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 May 31, 2004. The Project is now
managed and operated by Asset Campus Management under the terms of a Property
Management and Leasing Agreement dated June 1, 2004. The property management
agreements are collectively referred to as the "Agreements".
NOTE 2. 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:
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:
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) 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
Page 7
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued
Reporting Entity - continued
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.
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.
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.
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, 2004, the Project had no such
investments included in cash and cash equivalents. The Project's cash of $238,962
(bank balance $456,158) is deposited in FDIC insured state or national banking
corporations and is categorized as category one and three. Category one represents
cash and cash equivalents that are insured in the amount of $100,000. Cash in excess
of FDIC insured amounts are secured by a safekeeping receipt from Northwest Bank in
the amount of$1,000,000 at August 31, 2004.
In addition, the Project has restricted cash of $3,566,901 that is held by the Trustee for
the Bonds payable under provisions of the Indenture. During the twenty month period
ending August 31, 2004 the investment income received from the restricted cash was
$215,392.
Page 8
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — 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, 2004, 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 terms
of the bonds.
Advertising Costs
A[] advertising costs are expensed as they are incurred. Advertising costs for the
twenty-month period ending August 31, 2004 were approximately $115,000.
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.
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 (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:
Building 30 years
Furniture, fixtures and equipment 3 to 20 years
Page 9
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — continued
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, 2004, restricted cash consists of the following funds and
accounts:
Fund/Account Description
Revenue Fund $ -
Bond Fund - Series 2001A Senior Interest 251,732
Bond Fund - Series 2001 B Sub B 3
Bond Fund - Series 2001 C Sub C 15
Debt Service Reserve 2001A Senior 2,280,538
Debt Service Reserve 2001 B Sub B 195,875
Project Fund 50,324
Repair and Replacement Fund 182,615
Minimum Scholarship Fund 1,726
Surplus Fund Sub C Amortization 150,497
Surplus Fund Issuer Education 4,591
Trustee Fee Fund 1,057
Tax and Insurance Fund 100,296
Support Management Fee Account 124,805
Senior Bonds Principal 220,095
Sub B Bond 2,732
Residual Fund/Insurance Fund -
Total $ 3,566,901
The following is a brief description of the funds and accounts making up the restricted cash
balance at year end, as defined by the Trust Indenture:
Revenue Fund - The revenue fund was established for monthly deposits from the
depository account that holds general revenues of the Project. All monies are deposited
in the revenue fund and then properly distributed to the other funds, as required by the
Trust Indenture. Amounts in the fund at year end represent amounts that have not been
distributed to the other funds due to timing of the interfund transfers,
,Bond Fund - The Trustee makes monthly deposits in the bond fund pursuant to the
Trust Indenture. Amounts in the Bond Fund shall be used solely to fund the payment of
principal and interest on the Bonds, for the redemption of the Bonds at or prior to
maturity, and to purchase Bonds on the open market. 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 20010 accounts.
Page 10
TEXAS STUDENT HOUSING AUTHORITY-- BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- continued
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 2001A 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.
Debt Service Reserve 2009E Account-- The amounts on deposit in this account are to
be used for the purpose of paying principal and interest on the Series 2001 B Bonds as
they become due in the event there should be insufficient 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 relate 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.
Page 11
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 3. CAPITAL ASSETS
Capital asset activity for the Project for the twenty month period ended August 31, 2004 was
as follows:
Beginning Ending
Balance Additions Retirements Balance
Capital assets not
being depreciated:
Land 4,788,265 $ - $ - $ 4,788,265
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
Totals at historical cost 33,126,633 - - 33,126,633
Less accumulated depreciation:
Building 711,510 1,185,850 - 1,897,360
improvements, furniture
and fixtures 494,239 1,000,711 - 1,494,950
Total accumulated depreciation 1,205,749 2,186,561 - 3,392,310
Capital assets, net $31.920.884 ($2,1, 86,561) $ - $29.734,323
NOTE 4. 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. 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.
Page 12
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 4. BONDS PAYABLE - continued
At August 31, 2004, 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 twenty
month period ended August 31, 2004:
Balance Balance
December 31, August 31, Due Within
2002 Increases Decreases 2004 One Year
Revenue Bonds
2001A Bonds $ 34,175,000 $ - ($ 725,000) $33,450,000 $ 495,000
2001B Bonds 2,470,000 - ( 45,000) 2,425,000 30,000
2001C Bonds 3,000,000 - - 3,000,000 -
Less Discounts ( 1,742,474) - 100,142 ( 1,642,332) (^ 60.085)
Total L37,902,526 .________ 37.232.668 $....464,915
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, 2004 are as follows:
Due Fiscal
Year Ending
August 31 Principal Interest Total
2005 $ 525,000 $ 2,255,211 $ 2,780,211
2006 545,000 2,232,586 2,777,586
2007 570,000 2,207,923 2,777,923
2008 595,000 2,180,920 2,775,920
2009 620,000 2,151,940 2,771,940
2010-2014 3,595,000 10,230,556 13,825,556
2015-2019 4,680,000 9,084,119 13,764,119
2020-2024 6,105,000 7,580,819 13,685,819
2025-2029 8,000,000 5,582,256 13,582,256
2030-2033 _ 1 3,640,000 2,467,756 16,1 07,756
Total Debt Service $ 38,875 000 $45,974,086 X84 849.086
NOTE 5. NET ASSETS
Net assets represents the residual assets after liabilities are deducted. These assets are
reported in the following categories.
Page 13
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 5. NET ASSETS - continued
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.
NOTE 6. EMPLOYEE BENEFIT PLAN
Employees of the Project are eligible to participate in the Asset Campus Management
401(k) as of August 31, 2004. Employee salary deferrals into the Plan are matched by the
Project up to 1% of employee compensation as defined by the Plan. As of August 31, 2004
there were no participants.
NOTE 7. MANAGEMENT FEES
Previous to May 31, 2004 the Project paid JPI property management fees for the
management of the Project. Subsequent to May 31, 2004 the Project paid Asset Campus
Management for property management fees for the management of the Project. The Project
recorded property management fees of approximately $448,500 for the twenty month period
ending August 31, 2004. As of August 31, 2004, the Project has recorded approximately
$338,450 in unpaid property and asset management fees to JPI.
The management agreement with JPI states that if the management fees are not paid then
the amounts past due will accrue interest at the lessor of 12% or the highest lawful rate of
interest. The Project's financials include accrued interest of approximately $50,000 for the
unpaid management fees to JPI for the twenty month period ending August 31, 2004.
NOTE 8. 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 revenue.
NOTE 9. PRIOR PERIOD ADJUSTMENT
The Project has cash accounts which are held by the trustee and cash accounts held by the
management company. The financial statements as of December 31, 2002 reported cash
accounts that belonged to the Texas Student Housing Authority instead of the Project.
These cash accounts have been removed from the financial statements with a resulting
decrease in net assets of$310,152.
Page 14
TEXAS STUDENT HOUSING AUTHORITY— BALLPARK AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
NOTE 10. RELATED PARTY TRANSACTIONS
The Authority receives funds for administrative services and other transfers based on
release tests from the Trustee on behalf of the Project. As of August 31, 2004 for the twenty
month period then ended the Trustee paid approximately $266,000 to the Authority.
NOTE 11.. COMMITMENTS
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, 2004 there have been no payments made on the deferred
purchase price.
Page 15
WEAVER
TIDWELL
L.L.R
CERTIFIED PUBLIC
ACcoUNTANTS
AND CONSULTANTS
To the Members of the Board of Directors
Texas Student Housing Authority— Ballpark Austin Project
Westlake, Texas
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental schedules on
pages 10 and 17 are presented for purposes of additional analysis and is not a
required part of the basic financial statements of the Texas Student Housing
Authority — Ballpark Austin Project. The information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
wAv'e"� a4 ,f�'•f.
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
March 14, 2005
DALLAS
12221 Merit Dive
Steirr 1400
Dallis, Texas 7 5251-2 28 0
972.490.1970
F 972,702.83 21
I
FORT WORTH
1600 Wrest Seven.,Street
Suite 300
Fort Mordi, Tex,s 1-6102-2506
Y 17.332.7905
F81 7. 59.36
WW W.WEAVERAN DTI DWELL_COM
AN INDEPENDENT MEMBER OF
BAKER TILLY
INTERNATIONAL
a
SUPPLEMENTAL SCHEDULES
Page 16
TEXAS STUDENT HOUSING AUTHORITY - BALLPARK AUSTIN PROJECT
SCHEDULE I -SCHEDULE OF REVENUES AND EXPENSES
FOR THE TWENTY MONTH PERIOD ENDED AUGUST 31, 2004
Actual Budget Variance
Revenue and other support: R�
Rental income $ 5,955,286 $ 6,743,172 ($ 787,886)
Other income 47,466 - 47,466
Interest income 218,379 90„000 128,379
Total revenue and other 6,221,131 6,833,172 ( 612,041)
Operating expenses
Personnel expenses 548,525 525,765 ( 22,760)
Contract services 65,748 85,457 19,709
Utilities 590,616 596,523 5,907
Repairs and maintenance 43,684 43,688 4
Turnover expense 161,094 136,059 ( 25,035)
Advertising and promotion 114,709 104,291 { 10,418)
Administration expenses 589,371 597,700 8,329
Total operating expenses 2,113,747 2,089,483 ( 24,264)
Revenue available for fixed charges 4,107,384 4,743,689 ( 636,305)
Other expenses
Management fees 448,360 328,261 ( 120,099)
Replacements 86,312 80,217 ( 6,095)
Depreciation and amortization 2,487,194 - ( 2,487,194)
Interest expense 4,131,917 3,165,620 ( 966,297)
Total other expenses 7,153,783 3,574,098 ( 3,579,685)
Excess of expenses over revenue ($ 3,046,399) $ 1,169,591 ($ 4,215,990)
Page 17
TEXAS STUDENT HOUSING AUTHORITY - BALLPARK AUSTIN PROJECT
SCHEDULE II - CERTIFICATE OF THE FIXED CHARGES COVERAGE RATIO
We are providing this letter, as required by the Trust Indenture by and between Texas Student
Housing Authority - Ballpark Austin Project ("Project") and the Bank of New York ("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, 2004.
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 twenty
month period ended August 31, 2004 to be $4,107,384.
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, 2004 to be .87, which is based on twenty
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, 2004 to be .51, which is
based on twenty months of operations.
Based on the budgeted revenues and fixed charges utilizing Bond A and Bond B, we calculate
that the Fixed Charges Coverage Ratio as of August 31, 2004, to be 1.01, which is based on
twenty months of operations.