HomeMy WebLinkAboutBallpark Audit 12-31-02 TEXAS STUDENT HOUSING AUTHORITY -
JEFFERSON COMMONS
AT THE BALLPARK PROPERTY
FINANCIAL STATEMENTS
Year Ended December 31,2002
and Period from Inception (December 27, 2001)
through December 31, 2001
with Report of Independent Auditors
TEXAS STUDENT HOUSING AUTHORITY -
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
Year Ended December 31, 2002 and Period from Inception (December
27, 2001) through December 31, 2001
Table of Contents
Report of Independent Auditors......................................................................................................... I
Financial Statements:
Statements of Financial Position......-..........-.............. .......................................... ?
Statements of Activities and Changes in Net Deficit............... ................. ............ ............. 3
Statements of Cash Flows..................................................................................................... 4
Notes to Financial Statements............................................................................................................ 5
Supplemental Schedules:
Schedule I - Schedule of Revenues and Expenses................................................................ 15
Schedule II- Certification of the Fixed Charges Coverage Ratio ........................................ 16
Partners
Larry G.Autrey, P.C.
W I- I T L E Y PENN Felix J.Lozano ill, P.(
CPAS AND PROFESSIONAL CONSULTANTS
David L.Neal, P.C.
James C.Penn, P.C.
Thomas J.Rein,P.C.
Mark A. Topel, P.C.
J.Alan White, P.C.
B.
REPORT OF INDEPENDENT AUDITORS Glen Whitley; P.C.
To the Board of Directors of
Texas Student Housing Authority—Jefferson Commons at the Ballpark Property
We have audited the accompanying statements of financial position of Texas Student Housing
Authority — Jefferson Commons at the Ballpark Property (the "Property") as of December 31,
2002 and 2001, and the related statements of activities and changes in net deficit and cash flows
for the year ended December 31, 2002 and the period from inception (December 27, 2001)
through December 31, 2001. These financial statements are the responsibility of the Property's
management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 misstatements.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of Texas Student Housing Authority — Jefferson Commons at the Ballpark
Property as of December 31, 2002 and 2001, and the changes in its net deficit and its cash flows
for the year ended December 31, 2002 and the period from inception (December 27, 2001)
through December 31, 2001 in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. Schedules I and II are presented for purposes of additional analysis
and are not required as part of the basic financial statements. Such information has been
subjected to 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.
WA #4 ��
Fort Worth. Tex s
July 11. 2003
Fort Worth:17o1 River Run Road,Suite 507•Fort Worth,Texas 76107• (817)258-9100•metro(817)498-0237•fax(817)877-3036
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TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
STATEMENTS OF FINANCIAL POSITION
December 31,
2002 2001
Assets
Current assets:
Cash $ 114,613 $ 388,274
Restricted cash 2,530,100 343,000
Restricted investments 2,476,413 2,476,413
Accounts receivable 77,620 -
Other assets 33,182 4,018
Total current assets 5,231,928 3,211,705
Property and equipment:
Land 4,788,265 4,788,265
Furniture, fixtures and equipment 2,518,078 2,491,445
Building and building improvements 25,820,290 25,820,290
Total property and equipment 33,126,633 33,100,000
Less accumulated depreciation 1,205,749 -
Total property and equipment, net 31,920,884 33,100,000
Intangible assets:
Deferred financing costs 5,411,387 5,381,862
Less accumulated amortization 180,380 -
Total intangible assets, net 5,231,007 5,381,862
Total assets $ 42,383,819 $ 41,693,567
Liabilities and Net Deficit
Liabilities:
Accounts payable and accrued liabilities $ 1,750,938 $ 166,693
Deferred revenue 288,644 307,674
Tenant security deposits 63,700 114,200
Current portion of bonds payable 265,000 -
Total current liabilities 2,368,282 588,567
Deferred purchase price payable 1,460,000 1,460,000
Bonds payable 39,380,000 39,645,000
Total liabilities 43,208,282 41,693,567
Net deficit:
Temporarily restricted (824,463) -
Total liabilities and net deficit $ 42,383,819 $ 41,693,567
See accompanying notes. 2
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TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
STATEMENTS OF CASH FLOWS
Year Ended December 31,2002 and Period from Inception (December 27,2001)through
December 31,2001
2002 2001
Operating Activties
Changes in net deficit $ (824,463) $
Adjustments to reconcile changes in net deficit
to net cash used in operating activities:
Depreciation 1,205,749
Amortization 180,380
Changes in operating assets and liabilities
Restricted cash (2,187,100) (343,000)
Accounts receivable (77,620) -
Other assets (29,164) (4,018)
Intangible assets (29,525) (5,381,862)
Accounts payable and accrued liabilities 1,584,245 166,693
Deferred revenue (19,030) 307,674
Tenant security deposits (50,500) 114,200
Net cash used in operating activities (247,028) (5,140,313)
Investing Activities
Purchases of investments - (2,476,413)
Purchases of property and equipment (26,633) (31,640,000)
Net cash used in investing activities (26,633) (34,116,413)
Financing Activities
Proceeds from issuance of bonds - 39,645,000
Net cash provided by financing activities - 39,645,000
Net increase(decrease) in cash (273,661) 388,274
Cash at beginning of year 388,274 -
Cash at end of year $ 114,6 13 S 388,274
Supplemental Disclosures of Cash Flow Information:
Cash paid during year for interest S 1,346,340 $ -
I
See accompanying notes. 4
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS
December 31,2002
A. Nature of Business
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 (the
"Town") pursuant to Section 53.11 of Chapter 53 of the Texas Education Code, as amended (the
"Act"). The Authority purchased Jefferson Commons at the Ballpark (the "Property") from
Jefferson Commons—Austin L.P., (the"Seller") a Delaware limited partnership on December 27,
2001. The Property's primary purpose was to purchase and operate student housing facilities
throughout the state of Texas.
The Authority obtained its financing to purchase the Property through the issuance of Texas
Student Housing Authority Student Housing Revenue Bonds (Austin, Texas Property) Series
2001 (the "Bonds"). The Bonds were issued through a Trust Indenture (the "Trust Indenture")
between the Authority and The Bank of New York(the "Trustee") dated December 1, 2001. The
Bonds consist of Series 2001A, Series 2001E and Series 2001C Bonds and were issued in the
amounts of$34,175,000, $2,470,000 and $3,000,000, respectively. The Property also issued an
unsecured deferred purchase price payable in the amount of$1,460,000 in connection with the
sale.
The Authority was also established to provide education and/or housing assistance to deserving
students residing in the Keller Independent School District, the Carroll Independent School
District, and the Northwest Independent School District at institutions of higher education that are
aided by the Authority (the"Student Assistant Program").
The Property is operated and managed under the terms of (a) the Property Management and
Leasing Agreement by and between the Authority and JPI Campus Quarters Management, L.P.
and (b) the Asset Management Agreement by and between the Authority and JPI Apartment
Management, L.P. (collectively "Management Agreements"). The Property is managed by both
JPI Campus Quarters Management, L.P. and JPI Apartment Management, L.P. (collectively
"JPI").
B. Summary of Significant Accounting Policies
A summary of the Property's significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
Basis of Accounting
The financial statements of the Property have been prepared on the accrual basis of accounting
and accordingly reflect all significant receivables, payables, and other liabilities. The significant
accounting policies followed are described below to enhance the usefulness of the financial
statements to the reader.
5
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
B. Summary of Significant Accounting Policies - continued
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts and disclosures regarding certain types of assets
and liabilities. Such estimates were primarily related to unsettled transactions and events as of
the financial statement date. Accordingly, actual results could differ from estimated amounts.
Cash
The Property considers all investments and securities with original maturities of three months or
less to be cash equivalents. The Property had no such investments or securities at December 31,
2002 and 2001.
Restricted Cash
Restricted cash represents amounts held in the Texas Student Housing Authority American Bank
account for payment of required expenses. The Board of Directors manages this account and the
board must approve all expenses. Restricted cash also represents amounts held by the Trustee,
which are restricted for the payment of expenses as required by the Trust Indenture.
Restricted Investments
Restricted investments represent two guaranteed interest accounts required by the Trust Indenture
for the funds held in the debt service reserve funds.
Deferred Financing Costs and Amortization
Deferred financing costs represent certain costs incurred in connection with the issuance of the
Bonds. These costs are being amortized using the straight-line method over the life of the Bonds,
or 30 years.
Property and Equipment
Property and equipment have been recorded at the date of acquisition at cost. Routine
maintenance and repair costs are expensed as incurred. As assets are retired or disposed of the
associated cost of assets retired and the related accumulated depreciation are removed from the
accounts. There were no retirements during 2002 or the period from inception (December 27,
200 1) through December 31, 2001.
Expenditures directly related to the improvement of property and equipment are capitalized at
cost. The Property capitalizes the cost of roof replacement, appliances, and expenditures for
other major property improvements, as well as rehabilitation and repositioning costs incurred.
6
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK_PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
B. Summary of Significant Accounting Policies- continued
Property and Equipment- continued
Depreciation is computed using the straight-line method over the estimated useful lives as
follows:
Building 30 years
Furniture, fixtures and equipment 5 — 10 years
Revenue Recognition
Rental and other income are recorded on the accrual method of accounting and recognized as
earned. The Property reports prepaid rental income as revenue when the rental income is due
from the tenant. Such amounts received but not yet earned as of year end are reported as deferred
revenue. Rental income received from the operation of the Property is restricted by terms of the
Trust Indenture for the purpose of satisfying the amounts owed by the Authority to the
bondholders and for the payment of operating expenses incurred by the Property.
Financial Statement Presentation
The Property presents their financial statements in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 117, Financial Statefnents of Not-for-Profit Corporations.
Under SFAS No. 117, the Property is required to report information regarding its financial
position and activities according to three classes of net assets: unrestricted, temporarily restricted,
and permanently restricted. In addition, the Property is required to present a statement of cash
flows.
C. Restricted Cash
Restricted cash represents amounts placed on deposit in an account held by the Board of
Directors of the Authority. This cash is restricted for specific purposes and will be distributed at
the determination of the board. As of December 31, 2002, there was approximately 5101,000 in
this account being held to pay supplemental management fees to JPI, in accordance with the Trust
Indenture. The supplemental management fees have been accrued as of December 31, 2002 and
are included in accounts payable and accrued liabilities in the accompanying financial statements.
7
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
C. Restricted Cash- continued
Restricted cash also represents amounts held by the Trustee, which are restricted for the payment
of expenses as required by the Trust Indenture. At December 31, 2002 and 2001, restricted cash
consists of the following funds and accounts-
Fund/Account Description 2002 2001
Revenue Fund $ 66,732 $ -
Senior Debt Service Account 905,668 130,819
Subordinate Debt Service Account- Series B 83,363 12,041
Subordinate Debt Service Account- Series C 15 23,833
Senior Bonds Principal Account 250,000 -
Sub B Bonds Principal Account 15,000 -
Debt Service Reserve 2001 B Account 5,732 -
Project Fund 50,211 176,307
Repair and Replacement Fund 153,988 -
Minimum Scholarship Fund 115,280 -
Subordinate Bond Amortization Account-Series C 299,307 -
Issuers Education Surplus Fund 182,401 -
Austin Fee Fund 7,106 -
Tax and Insurance Fund 41,856 -
Supplemental Management Fee Fund 43,289 -
American Bank 310,152 -
$ 2,530,100 $ 343,000
The following is a brief description of the funds 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 Property. All monies are
deposited in the revenue fund and then properly distributed to the other funds, as
required by the Trust Indenture. Amounts in this fund at year end represent amounts
that have not been distributed to the other funds due to timing of the interfund transfers.
Senior Debt Service Account—The Senior Debt Service Account is established under the
Bond Fund. Deposits are made in this fund, as required by the Trust Indenture, solely
as a fund for the payment of the interest on the senior bonds.
Subordinate Debt Service Account-Series B — The Subordinate Debt Service Account-
Series B is for the same purposes of the Senior Debt Service Account, except it is for
the servicing of the Series B bonds.
8
i
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
C. Restricted Cash-continued
Subordinate Debt Service Account-Series C — The Subordinate Debt Service Account-
Series C is for the same purposes as the Senior Debt Service Account, except it is for
the servicing of the Series C bonds.
Senior Bonds Principal Account The Senior Bonds Principal Account is established
under the Bond Fund. Deposits are made in this fund, as required by the Trust
Indenture, solely as a fund for the payment of the principal on the senior bonds, for the
redemption of the senior bonds at or prior to maturity, and to purchase senior bonds in
the open market.
Sub B Bonds Principal Account — The Sub B Bonds Principal Account is for the same
purposes as the Senior Bonds Principal Account, except it is for the servicing of the
Series B bonds.
Debt Service Reserve 2001 B Account—The amounts on deposit in this account at year
end represent interest earned on the guaranteed interest account that has not yet been
swept from the account.
Project Fund—The Project Fund shall be used solely for the purpose of purchasing assets
from the Seller. On January 1, 2003, the Trustee shall transfer all amounts remaining
in the Project Fund;less amounts retained or set aside to meet costs not then due and
payable or which are being contested, to the Senior Debt Service Account to be used to
pay interest on the next following interest payment date.
Repair-and Replacement Fund—Monies in the Repair and Replacement Fund: (1) shall be
used to pay the maintenance and repair costs related to the Project which the Project is
obligated to pay pursuant to the Trust Indenture, (ii) shall be, at the written direction of
the bond insurer, transferred to the bond account to pay principal or interest on the
senior bonds to the extent there are insufficient funds in the Senior Debt Service
Account within the Bond Fund on any interest payment date; and, (iii) after the senior
bonds are paid in full monies shall be transferred to the appropriate accounts in the
Bond Fund to pay first the Series 2001B Bonds and after the Series 20010 Bonds.
Mininzurn Scholarship Fund — The Minimum Scholarship Fund shall be used for the
purpose of awarding scholarships to students in accordance with the Trust Indenture.
The scholarships are generally in the form of a free or discounted room for the student.
The funds for these students are transferred to the Revenue Fund on a monthly basis.
Subordinate Bond Amortization Account-Series C — While Series 2001C Bonds are
outstanding, an amount equal to 49% of all deposits made to the residual fund shall be
transferred to the Subordinate Bond Amortization Account-Series C. Amounts shall be
transferred from the Subordinate Bond Amortization Account-Series C to the
Subordinate Debt Service Account-Series C in accordance with Section 5.07 of the
Trust Indenture.
9
I
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
C. Restricted Cash- continued
Issuers Education Surplus Fund—While Series 2001C Bonds are outstanding, an amount
equal to 51 percent of all deposits made to the residual fund shall be transferred to the
Issuers Education Account. In accordance with Section 5.07 of the Trust Indenture,
amounts are first transferred from the Issuers Education Account to the Minimum
Scholarship Fund and secondly transferred to the Authority to be used for any lawful
purpose as authorized.
Austin Fee Fund— The Austin Fee Fund is used to hold monies for fees payable to the
trustee and other fees related to the trust activity.
Tax and Insurance Fund—Amounts are transferred into the Tax and Insurance Fund from
the Revenue Fund pursuant to Section 5.01 of the Trust Indenture. Amounts in the Tax
and Insurance Fund are for reimbursement for costs of maintaining the insurance of the
Property, payment of ad valorem property taxes, if any, or payments in lieu of taxes, if
any.
Supplemental Management Fee Fund — In accordance with Section 5.01 of the Trust
Indenture, amounts are deposited into the Supplemental Management Fee Fund, in
order to pay any management fee in excess of the basic management fee, as defined by
the Management Agreements.
American Bank— Amounts in this account relate to funds that have been deposited in a
bank account held by the Authority. The amount in this account is restricted pursuant
to the Trust Indenture, as the deposits in the fund are for specific purposes. Included in
this account is approximately $101,000 payable to 7PI relating to supplemental
management fees, which has been included in accounts payable and accrued liabilities
in the accompanying financial statements.
D. Restricted Investments
Restricted investments represent two guaranteed interest accounts related to the debt service
reserve funds, as required by the Trust Indenture.
Fund/Account Description 2002 2001
Debt Service Reserve 2001 A Account S 2,280,538 $ 2,280,538
Debt Service Reserve 2001 B Account 195,875 195,875
$ 2,476,413 $ 2,476,413
10
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
D. Restricted Investments- continued
The following is a brief description of the funds making up the restricted investments balance at
year end, as defined by the Trust Indenture:
Debt Service Reserve 2001 A 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 2001 B 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.
E. Deferred Purchase Price
In accordance with the Contract of Sale by and between the Seller and the Authority, the
Authority agreed to pay a deferred purchase price to the Seller in the amount of$1,460,000. The
deferred purchase price is a limited recourse obligation and is to be paid with 49% of the funds
released related to the Property, only after the Series C Bonds have been paid in full,which based
on the current amortization schedule will be in 2033.The deferred purchase price accrues interest
at I I%per annum. Interest expense related to the deferred purchase price is included in accounts
payable and accrued liabilities in the accompanying financial statements. Interest expense
incurred on the deferred purchase price for the year ended December 31, 2002 was approximately
$174,000. There was no interest expense related to the deferred purchase price for the period
from inception (December 27, 200 1) through December 31,2001.
F. Bonds Payable
The Bonds are Tax-Exempt Governmental Obligations under the Internal Revenue Code. The
bonds payable represents amounts due to the bondholders, via the Trustee, and payable under the
terms of the Trust Indenture. The bonds are payable solely from the revenues generated by the
Austin Property and are secured by, the revenues pledged and assigned under the terms of the
Trust Indenture. Future payments for principal are as follows:
Principal
Year Ending Payment
2003 $ 265,000
2004 505,000
2005 525,000
2006 545,000
2007 570,000
Thereafter 37,235,000
$ 39,645,000
11
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
F. Bonds Payable- continued
The Bonds bear interest at the rates per annum, as described below, computed on the basis of a
360-day year consisting of twelve 30-day months,payable semi-annually beginning July 1, 2002,
and payable on January 1 and July 1 of each year thereafter. Interest rates for the Bonds are as
follows:
Maturity Series 2001A Bonds Interest
Year Principal Amount Rate
2003 $ 250,000 4.000%
2004 475,000 4.000%
2005 495,000 4.000%
2006 515,000 4.000%
2007 535,000 4.200%
2008 560,000 4.400%
2009 585,000 4.550%
2010 610,000 4.650%
2011 640,000 4.750%
2023 10,885,000 5.375%
i
Maturity Series 2001B Bonds Interest
Year Principal Amount Rate
2033 S 2,470,000 6.750%
Maturity Series 20010 Bonds Interest
Year Principal Amount Rate
2033 $ 3,000,000 11.00%
Interest expense incurred on the Bonds for the year ended December 31, 2002 was approximately
$2,353,000. There was no interest expense for the period from inception (December 27, 2001)
through December 31, 2001.
G. Temporarily Restricted Net Deficit
Temporarily restricted net deficit represents excess of expenses over revenues in 2002 in the
amount of($824,463). There were no operations in 2001; as such there was no change in the net
deficit account during the period from inception (December 27, 2001) through December 31,
2001. The activity in the temporarily restricted net deficit is restricted for the operations of the
Property and the repayment of principal and interest associated with the Trust Indenture entered
into by the Authority and the Trustee.
12
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
NOTES TO FINANCIAL STATEMENTS (continued)
H. 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.
I. Employee Benefit Plan
Employees of the Property are eligible to participate in the TPI 401(k) Profit Sharing Retirement
Plan (the "Plan"). Employee salary deferrals into the Plan are matched by the Property up to 3)%
of employee compensation as defined by the Plan. However, the Property made no contributions
to the Plan for the year ended December 31, 2002 or the period from inception (December 27,
200 1)through December 31, 2001.
J. Concentrations of Credit Risk
The Property maintains cash deposits at three banks, which are insured by the Federal Deposit
Insurance Corporation up to $100,000. As of December 31, 2002 and 2001, the uninsured
portions of these deposits were approximately $531,000 and $2,551,000, respectively.
13
SUPPLEMENTAL SCHEDULES
TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
SCHEDULE I-SCHEDULE OF REVENUES AND EXPENSES
Year Ended December 31,2002
2002
Actual Budget Variance
Revenue:
Rental income $ 4,084,192 $ 4,204,646 $ (I20,454)
Scholarship revenue 82,176 82,083 93
Other income 453,318 433,962 19,356
4,619,686 4,720,691 (101,005)
Expenses:
Property management 356,268 269,021 87,247
General and administrative 209,621 177,534 32,087
Repairs and maintenance 121,778 149,595 (27,817)
utilities 357,875 389,979 (32,104)
Property management fees 192,000 192,000 -
Repair and replacement deposits 153,600 153,600 -
1,391,142 1,331,729 59,413
Revenue available for fixed charges 3,228,544 3,388,962 (160,418)
I
Other expenses:
Asset management fees 78,000 78,000 -
Supplemental property management fees 99,243 94,800 4,443
Replacements 39,231 - 39,231
Depreciation and amortization 1,381,604 1,149,198 232,406
Interest expense 2,507,600 2,614,499 (106,899)
Other non-operating expenses 18,753 66,450 (47,697)
4,124,431 4,002,947 121,484
Add repair and replacement deposits 153,600 153,600 -
Less scholarship revenue 82,176 82,083 93
Excess of expenses over revenue $ (824,463) $ (542,468) $ (281,995)
15
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TEXAS STUDENT HOUSING AUTHORITY-
JEFFERSON COMMONS AT THE BALLPARK PROPERTY
Schedule II—Certification of the Fixed Charges Coverage Ratio
We are providing this letter, as required by the Trust Indenture by and between Texas Student
Housing Authority(the "Authority")and the Bank of New York(the "Trustee"), dated December
1, 2001, relating to Texas Student Housing Authority, Student Housing Revenue Bonds (Austin,
Texas Project) Series 2001 (the "Indenture") to certify the Fixed Charges Coverage Ratio as of
December 31, 2002.
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.
Schedule I indicates revenue available for fixed charges for the year ending December 31, 2002,
to be $3,228,544. The maximurn annual debt service for the bonds is $2,473,556, excluding
Series C interest and$2,803,556 including Series C interest.
Based on the above revenues and fixed charges excluding the Series C interest, we hereby certify
that the Fixed Charges Coverage Ratio as of December 31, 2002 is 1.305, which appears to be in
compliance with the Indenture.
Based on the above revenues and fixed charges including the Series C interest, we hereby certify
that the Fixed Charges Coverage Ratio as of December 31, 2002 is 1.152, which appears to be in
compliance with the Indenture.
Schedule I indicates that the budgeted revenue available for fixed charges for the year ended
December 31, 2002 to be $3,388,962. Based on the budgeted revenue available for fixed charges
and the fixed charges excluding Series C interest, the Fixed Charges Coverage Ratio would have
been 1.37.
Based on the budgeted revenue available for fixed charges and the fixed charges including Series
C interest,the Fixed Charges Coverage Ratio would have been 1.208.
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