HomeMy WebLinkAboutCambridge Audit 08-31-07 i
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TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
FINANCIAL REPORT
AUGUST 31, 2007
TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
TABLE OF CONTENTS
AUGUST 31,2007
Page
Number
FINANCIAL SECTION
Independent Auditors' Report............................................................................................. 1 -2
Management's Discussion a n d Analysis ............................................................................ 3 - 5
Financial Statements:
Statement of Net Assets................................................................................................... 6
Statement of Revenues, Expenses and Changes in Net Assets........................................ 7
Statementof Cash Flows ................................................................................................. 8
Notes to Financial Statements.......................................................................................... 9- 16
SUPPLEMENTAL SCHEDULES
Schedule I—Schedule of Revenues and Expenses............................................................. 17
Schedule II—Fixed Charges Coverage Ratio..................................................................... 18
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
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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, 2007, 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.
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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,
2007, 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,
2007, 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
H, 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 II, H. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
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401 WEST HIGHWAY 6■P.0.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
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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.
P.
January 24, 2008
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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, 2007. 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-or State and Local Governments l
has been implemented. The reader should note that this financial report addresses only the financial
condition of the Project itself for 2007.
FINANCIAL HIGHLIGHTS
• The liabilities of the Project exceeded its assets at the close of the fiscal year by
$3,363,805, due primarily to a decrease in net assets of$1,230,285.
• Major components of the expense overage were $75,430 in utilities and $13,386 in
repairs and maintenance expenses.
• At the end of the current fiscal year, the total cash balances were $3,369,881 in
unrestricted cash and$1,383,586 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.
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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 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, 2007, these
balances were as follows:
Replacement Fund $ 194,117
Series A Debt Service Reserve Fund 338,752
Series B Debt Service Reserve Fund 475,445
Transaction Cost Payment Fund 31,766
Series D Interest Fund 40,187
Current receipts 303,319
Total $ 1,383,586
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 September 1, 2004, by issuing debt certificates in the following classes:
Series A $ 17,500,000
Series B 4,900,000
Series C 4,820,000
Series D 5,380,000
Total $ 32,600,000
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.84 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.
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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 .84, all of the A and B certificate holders received
all proceeds due them. The 2007/2008 budget clearly indicates that operating income will be sufficient
to again service the A and B certificates.
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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, or
Hank Smyth at(817) 281-5053.
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TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
STATEMENT OF NET ASSETS
AUGUST 31,2007
ASSETS
Current assets:
Cash $ 3,369,881
Restricted cash 1,383,586
Accounts receivable,net of$64,045 allowance 434,856
Prepaid expenses 18,227
Total current assets 5,206,550
Capital assets:
Land 2,899,597
Other capital assets,net of accumulated depreciation 26,304,353
29,203,950
Total capital assets 29,203,950
Total assets 34,410,500
LIABILITIES
Current liabilities:
Accounts payable 308,602
Accrued expenses 304,023
Deferred revenue and prepaid rent 3,035,354
Accrued interest 1,781,326
Installment loan payable 32,345,000
Total current liabilities 37,774,305
NET ASSETS
Invested in capital assets,net of related debt ( 3,141,050)
Unrestricted ( 222,755)
Total net assets $( 3,363,805)
The accompanying notes are an integral part of these financial statements.
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TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31,2007
OPERATING REVENUES
Rental $ 5,109,233
Other 48,388 j
Total operating revenues 5,157,621
OPERATING EXPENSES
Management fees 276,000
Administration and marketing 800,206 E
Cafeteria 804,000
Utilities 662,785
Repairs and maintenance 439,342
Insurance 61,977
Depreciation and amortization 1,382,975
Total operating expenses 4,427,285
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OPERATING INCOME 730,336
NONOPERATING REVENUES (EXPENSES)
Interest revenue 114,394
Interest expense ( 2,075,015)
Total nonoperating revenues (expenses) ( 1,960,621)
CHANGE IN NET ASSETS ( 1,230,285)
NET ASSETS, BEGINNING ( 2,133,520)
NET ASSETS,ENDING $( 3,363,805)
The accompanying notes are an integral part of these financial statements.
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TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31,2007
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants $ 5,131,428
Other operating revenues 48,388
Cash paid to employees ( 857,130)
Cash paid to suppliers ( 1,659,968)
Net cash provided by operating activities 2,662,718
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal repayments on bonds ( 255,000)
Interest paid ( 2,075,015)
Net cash used in capital and related financing activities ( 2,330,015)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 114,394
Acquisition and construction of capital assets ( 3,377)
Net cash provided by investing activities 111,017
NET CHANGE IN CASH AND CASH EQUIVALENTS 443,720
CASH AND CASH EQUIVALENTS,BEGINNING 4,309,747
CASH AND CASH EQUIVALENTS,ENDING $ 4,753,467
Cash $ 3,369,881
Restricted cash 1,383,586
Total cash and cash equivalents $ 4,753,467
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 730,336
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 1,382,975
Changes in operating assets and liabilities:
Accounts receivable ( 113,835)
Other assets ( 13,227)
Accounts payable 64,307
Accrued interest 467,540
Accrued liabilities 122,427
Deferred revenue and prepaid rent 22,195
Net cash provided by operating activities $ 2,662,718
The accompanying notes are an integral part of these financial statements.
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TEXAS STUDENT HOUSING AUTHORITY—
COLLEGE STATION PROJECT
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2007
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I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Operations
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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)
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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)
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I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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D. Assets,Liabilities and Net Assets or Equity
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Cash and Cash Equivalents
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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
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cash and cash equivalents.
Concentration of Credit Risk
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As of and during the year ended August 31, 2007, the Project had cash deposits with
financial institutions in excess of the $100,000 amount insured by the Federal Deposit
Insurance Corporation. Any amounts over the FDIC limit are insured with pledged securities
by the Project's depository. E
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, 2007,were approximately$63,000.
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.
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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, 2007, restricted
cash consists of the following:
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Fund/Account Description
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Replacement Fund $ 194,117 €
Series A Reserve Fund 338,752 !
Series B Reserve Fund 475,445
Transaction Costs Payment Fund 31,766
Series D Interest Fund 40,187
Current Receipts Fund 303,319
Total $ 1,383,586
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)
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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
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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% $ 32,345,000
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, 2007:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Installment note $ 32,600,000 $ - $ 255,000 $ 32,345,000 $ 32,345,000
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 $ 17,245,000
B 4,900,000
C 4,820,000
D 5,380,000
Total $ 32,345,000
(continued)
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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, 2007, 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, 2007, 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
Capital assets,being depreciated:
Building 27,727,646 - - - 27,727,646
Furniture and fixtures 2,591,427 3,377 - - 2,594,804
Total capital assets,
being depreciated 30,319,073 3,377 - - 30,322,450
Less accumulated depreciation for:
Building ( 1,783,245) ( 955,553) - - ( 2,738,798)
Furniture and fixtures ( 851,877) ( 427,422) - - ( 1,279,299)
Total accumulated depreciation ( 2,635,122) ( 1,382,975) - - ( 4,018,097)
Total capital assets,
being depreciated,net 27,683,951 ( 1,379,598) - - 26,304,353
Capital assets,net $ 30,583,548 $( 1,379,598) $ $ - $ 29,203,950
(continued)
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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.
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E. Net Assets
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Net assets represent the residual assets after liabilities are deducted. Net assets are reported
in the following categories.
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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, 2007, the total
funds available for debt service were less than the accrued interest due at August
31, 2007. 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
$276,000 for the period ended August 31, 2007.
Administration and marketing expenses include approximately $102,000 for administrative
fees earned by Texas Student Housing Authority. Administrative fees totaling approximately
$20,000 are included in accounts payable at August 31, 2007.
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)
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II. DETAILED NOTES ON ALL FUNDS (Continued)
G. Commitments and Contingencies (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. Going Concern
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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.
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SUPPLEMENTAL SCHEDULES
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TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
SCHEDULE I-SCHEDULE OF REVENUES AND EXPENSES
BUDGET AND ACTUAL
FOR THE YEAR ENDED AUGUST 31,2007
Budget Actual Variance
REVENUES AND OTHER SUPPORT
Rental $ 4,714,811 $ 5,109,233 $ 394,422
Other 548,806 48,388 ( 500,418)
Interest - 114,394 114,394
Total revenues and other support 5,263,617 5,272,015 8,398
OPERATING EXPENSES
Administrative and marketing 829,161 800,206 28,955
Cafeteria 807,482 804,000 3,482
Utilities 587,355 662,785 ( 75,430)
Repairs and maintenance 425,956 439,342 ( 13,386)
Insurance 94,800 61,977 32,823
Total operating expenses 2,744,754 2,768,310 23,556
REVENUE AVAILABLE FOR FIXED CHARGES 2,518,863 2,503,705 ( 15,158)
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OTHER EXPENSES
Management fees 276,000 276,000 -
Depreciation and amortization 1,382,975 1,382,975 -
Interest 2,075,015 2,075,015 -
Total other expenses 3,733,990 3,733,990 -
EXCESS OF EXPENSES OVER REVENUES $( 1,215,127) $( 1,230,285) $ 15,158
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TEXAS STUDENT HOUSING AUTHORITY
COLLEGE STATION PROJECT
SCHEDULE II-FIXED CHARGES COVERAGE RATIO
FOR THE YEAR ENDED AUGUST 31,2007
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CALCULATION OF FIXED CHARGES COVERAGE RATIO
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Total gross revenues $ 5,272,015
Total expenses $( 6,502,300)
Add:
Interest 2,075,015
Depreciation and amortization 1,382,975
Property management fees in excess of
base property management fee 118,352
Adjusted expenses ( 2,925,958)
Adjusted net operating income available to pay fixed charges $ 2,346,057
Fixed charges/maxinuunprincipal and interest for
fiscal year-end $ 2,778,540
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Fixed charges coverage ratio 0.84
Required ratio 1.10
Pass or fail Fail
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