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TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
FINANCIAL REPORT
AUGUST 31, 2008
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
TABLE OF CONTENTS
AUGUST 31,2008
Page
Number
FINANCIAL SECTION
Independent Auditors' Report............................................................................................. 1 -2
Management's Discussion and Analysis ............................................................................ 3 -6
Financial Statements:
Statementof Net Assets................................................................................................... 7
Statement of Revenues, Expenses and Changes in Net Assets........................................ 8
Statement of Cash Flows ................................................................................................. 9
Notes to Financial Statements.......................................................................................... 10- 18
SUPPLEMENTAL SCHEDULES
Schedule I— Schedule of Revenues and Expenses............................................................. 19
PATTILLO, BROWN & HILL, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Texas Student Housing Authority—
Town Lake Austin Project
Westlake, Texas
We have audited the accompanying financial statements of Texas Student Housing Authority —
Town Lake Austin Project (the "Project"), as of and for the year ended August 31, 2008, which
collectively comprise the Project's basic financial statements as listed in the table of contents. Texas
Student Housing Authority — Town Lake Austin Project is a component unit of the Town of Westlake.
These financial statements are the responsibility of the Project management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As discussed in Note I, the financial statements present only the Project and do not purport to,
and do not, present fairly the financial position of Texas Student Housing Authority as of August 31,
2008, and the changes in its financial position and cash flows, where applicable, for the period then
ended in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Texas Student Housing Authority—Town Lake Austin Project as of August
31, 2008, and the respective changes in its financial position, and, where applicable, cash flows thereof
for the year then ended in conformity with accounting principles generally accepted in the United States
of America.
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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
TEMPLE,TX(254)791-3460■WHITNEY,TX(254)694-4600■ALBUQUERQUE,NM(505)266-5904
The management's discussion and analysis on pages 3 through 6 is not a required part of the
basic financial statements but is supplemental information required by accounting principles generally
accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the
required supplementary information. However, we did not audit the information and express no opinion
on it.
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the Texas Student Housing Authority — Town Lake Austin Project's basic
financial statements. The accompanying supplemental information on page 19 is presented for purposes
of additional analysis and is not a required part of the basic financial statements. The supplemental
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
+ � L. 1 .P.
January 14, 2009
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MANAGEMENT'S DISCUSSION AND ANALYSIS
As staff of the Texas Student Housing Authority (the "Authority") — Town Lake Austin Project (the
"Project"), we offer the readers of the Project's financial statements this narrative overview and analysis
of the financial activities of the Project for the fiscal year ended August 31, 2008. We encourage readers
to consider the information presented herein in conjunction with the Project's financial statements which
follow this section. As the Authority is a component unit of the Town of Westlake and is thus
considered a governmental entity, Governmental Accounting Standards Board Statement 34, Basic
Financial Statements—and Management's Discussion and Analysis for State and Local Governments
has been implemented. The reader should note that this financial report addresses only the financial
condition of the Project itself for 2008.
FINANCIAL HIGHLIGHTS
• The liabilities of the Project exceeded its assets at the close of the fiscal year by
$3,361,664, an increase of$950,100 over the prior year.
• Operating revenue of$2,831,579 is $13,795 less than budget; and operating expenses
were $29,217 more than budget.
• At the end of the current fiscal year, the total cash balances were $587,382 in
unrestricted cash and$1,041,774 in restricted cash.
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OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Project's basic financial
statements. The Project's report consists of three parts, Management's Discussion and Analysis, the
basic financial statements, and notes to financial statements. The basic financial statements include a
statement of net assets, statement of revenues, expenses and changes in net assets, a statement of cash
flows and a supplemental schedule.
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The statement of net assets presents information on all of the Project's assets and liabilities with the
difference between the two reported as net assets.
TABLE 1
TEXAS STUDENT HOUSING AUTHORITY-
TOWN LAKE AUSTIN PROJECT
NET ASSETS
Business-type Activities
2008 2007
Current and other assets $ 2,502,102 $ 2,667,636
Capital assets 16,748,671 17,405,068
Total assets 19,250,773 20,072,704
Current liabilities 1,211,342 860,408
Noncurrent liabilities 21,401,095 21,623,860
Total liabilities 22,612,437 22,484,268
Net assets:
Invested in capital assets,
net of related debt ( 4,857,382) ( 4,423,750)
Restricted 552,995 1,214,006
Unrestricted 942,723 798,180
Total net assets $( 3,361,664) $( 2,411,564)
The statement of revenues, expenses and changes in net assets accounts for all of the Project's revenues
and expenses regardless of when cash is paid or received.
TABLE 2
TEXAS STUDENT HOUSING AUTHORITY-
TOWN LAKE AUSTIN PROJECT
CHANGES IN NET ASSETS
Business-type Activities
2008 2007
Total operating revenue $ 2,831,579 $ 2,790,825
Total operating expenses 2,137,550 1,967,332
Total operating income 694,029 823,493
Interest income 33,592 63,230
Interest expense ( 1,677,721) ( 1,782,361)
Total nonoperating loss ( 1,644,129) ( 1,719,131)
CHANGE IN NET ASSETS ( 950,100) ( 895,638)
NET ASSETS,BEGINNING ( 2,411,564) ( 1,515,926)
NET ASSETS,ENDING $( 3,361,664) $( 2,411,564)
The statement of cash flows recaps how cash changed from year to year.
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FINANCIAL ANALYSIS OF THE PROJECT'S FUNDS
Notes to financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the financial statements.
Restricted cash. Restricted cash represents monies held in escrow by the trustee and are restricted for
the payment of expenses as outlined in the Installment Sale Agreement. As of August 31, 2008, these
balances were as follows:
Bond Proceeds Principal Fund,Series 2002 A-1 $ 303
Bond Proceeds Interest Fund,Series 2002 A-1 3,318
Bond Proceeds Interest Fund,Series 2002 A-2 5,235
Reserve Fund 167
Debt Service Reserve Fund 675,315
Repair and Replacement Fund 329,624
Deferred Debt Service 16,397
Tax and Insurance Fund 2,115
Fee and Expense Fund 9,309
Initial Purchase Fund ( 9)
Total $ 1,041,774
Nonrestricted cash. Nonrestricted cash is available for general use of the Project.
Bonds payable. As of August 31, 2008, the following amounts on the Series 2002 A-1 and 2002 A-2
were payable:
Series 2002 A-1 $ 16,516,812
Series 2002 A-2 5,089,241
Total $ 21,606,053
For the fiscal year ending August 31, 2008, the total principal and interest payment is calculated at
$1,891,637. A total of$222,765 in principal was paid during 2008.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
Leases at the Project are primarily 12-month leases, however, due to competitive and market conditions,
a relatively minor number of 10-month leases exist. These leases do bring a monthly premium over the
12-month leases. Occupancy for the fiscal year ending August 31, 2009, forecasts at 100%. However,
rental rates, again due to competitive pressures will not see a large increase.
Net operating revenue for next year is projected at $1,480,151.
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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.
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TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
STATEMENT OF NET ASSETS
AUGUST 31,2008
ASSETS
Current assets:
Cash $ 587,382
Restricted cash 1,041,774
Accounts receivable 21,869
Prepaid expenses 15,000
Total current assets 1,666,025
Capital assets:
Land 2,182,816
Other capital assets,net of accumulated depreciation 14,565,855
Total capital assets 16,748,671
Intangible assets:
Debt issue costs,net of amortization 836,077
Total intangible assets 836,077
Total assets 19,250,773
LIABILITIES
Current liabilities:
Accounts payable 65,059
Accrued liabilities 107,105
Bonds payable-current maturities 204,958
Management and development fees payable 79,200
Deferred revenue and prepaid rent 471,199
Accrued interest 283,821
Total current liabilities 1,211,342
Noncurrent liabilities:
Bonds payable 21,401,095
Total noncurrent liabilities 21,401,095
Total liabilities 22,612,437
NET ASSETS
Invested in capital assets,net of related debt ( 4,857,382)
Restricted for debt service 552,995
Unrestricted 942,723
Total net assets $( 3,361,664)
The accompanying notes are an integral part of these financial statements.
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TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31,2008
OPERATING REVENUES
Rental $ 2,721,224
Other 110,355
Total operating revenues 2,831,579
OPERATING EXPENSES
Personnel 264,901
Contract services 52,893
Utilities 500,461
Repairs and maintenance 22,780
Turnover 65,128
Advertising and promotion 65,924
Administration 136,953
Management fees 153,671
Replacements 53,261
Depreciation and amortization 821,578
Total operating expenses 2,137,550
OPERATING INCOME 694,029
NONOPERATING REVENUES (EXPENSES)
Interest income 33,592
Interest expense ( 1,677,721)
Total nonoperating revenues(expenses) ( 1,644,129)
CHANGE IN NET ASSETS ( 950,100)
NET ASSETS,BEGINNING ( 2,411,564)
NET ASSETS,ENDING $( 3,361,664)
The accompanying notes are an integral part of these financial statements.
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TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED AUGUST 31,2008
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from tenants $ 3,111,872
Cash paid to employees ( 253,797)
Cash paid to suppliers ( 1,010,279)
Net cash provided by operating activities 1,847,796
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Payments on bonds payable ( 222,765)
Interest paid ( 1,668,871)
Net cash used in capital and related financing activities ( 1,891,636)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 33,592
Net cash provided by investing activities 33,592
NET CHANGE IN CASH AND CASH EQUIVALENTS ( 10,248)
CASH AND CASH EQUIVALENTS,BEGINNING 1,639,404
CASH AND CASH EQUIVALENTS,ENDING $ 1,629,156
Cash $ 587,382
Restricted cash 1,041,774
Total cash and cash equivalents $ 1,629,156
RECONCILIATION OF OPERATING INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 694,029
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation and amortization 821,578
Changes in operating assets and liabilities:
Accounts receivable ( 10,284)
Prepaids 389
Trade accounts payable 40,403
Deferred revenue 290,577
Other current liabilities 11,104
Net cash provided by operating activities $___L,847,796
The accompanying notes are an integral part of these financial statements.
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TEXAS STUDENT HOUSING AUTHORITY—
TOWN LAKE AUSTIN PROJECT
NOTES TO FINANCIAL STATEMENTS
AUGUST 31,2008
I. GENERAL STATEMENT
Texas Student Housing Authority (the "Authority"), a higher education authority, was established
on January 23, 1995, as a duly constituted authority of the Town of Westlake, Texas, pursuant to
Section 53.11 of Chapter 53 of the Texas Education Code, as amended. The Authority's purpose
among other things is to acquire, finance, and operate student housing facilities. The Authority
operates several student housing facilities in Texas and one of the housing projects is the Town
Lake Austin Project (the "Project"). The Project was purchased from Jefferson Commons —
Austin, L.P., a Delaware limited partnership on December 17, 2002. The Project obtained its
financing through the issuance of Texas Student Housing Authority — Student Housing Revenue
Bonds (Jefferson Commons at Town Lake Project), Series 2002 A-1 and A-2 (the "Bonds"). The
Bonds were issued through a Trust Indenture (the"Trust Indenture") by and between the Authority
and The Bank of New York (the "Trustee"). The Series 2002 A-1 and Series 2002 A-2 Bonds
were issued in the face amounts of$19,480,000 and $5,670,000, respectively. The accompanying
financial statements present the operations of the one Project, whose revenue streams are pledged
for the Bonds described herein.
The Project was operated and managed under the terms of the (a) Property Management and
Leasing Agreement by and between the Authority and JPI Campus Quarters Management, L.P.
("JPI") and (b) the Asset Management Agreement by and between the Authority and JPI
Apartment Management, L.P., up until February 2005. The Project is now managed and operated
by Asset Campus Housing under the terms of a Property Management and Leasing Agreement
dated March 1, 2005. The Property Management Agreements are collectively referred to as the
"Agreements."
II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Project's significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
A. Reporting Entity
For financial reporting purposes, management has considered all potential component units.
The decision to include a potential component unit in the reporting entity was made by
applying the criteria set forth in GASB Statement No. 14 as amended by GASB Statement
No. 39. The criteria used is as follows:
(continued)
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II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
A. Reporting Entity (Continued)
Financial Accountability — The primary government is deemed to be financially
accountable if it appoints a voting majority of the organization's governing body and
1) is able to impose its will on that organization; or 2) there is a potential for the
organization to provide specific financial benefits to, or impose specific financial
burdens on,the primary government. Additionally, the primary government may be
financially accountable if an organization is fiscally dependent on the primary
government regardless of whether the organization has a separately elected
governing board appointed by a higher level of government or a jointly appointed
board.
B. Measurement Focus and Basis of Accounting
The Project uses the economic resources measurement focus. This means that all assets,
liabilities, equity, revenues, and expenses are accounted for using the accrual basis of
accounting.
Revenue is recognized when earned and expenses are recognized when they are incurred. In
applying the requirements of GASB Statement No. 20, the Project has chosen to apply all
applicable GASB pronouncements as well as Financial Accounting Standards Board
pronouncements issued on or before November 30, 1989, unless those pronouncements
conflict with or contradict GASB pronouncements.
C. Assets,Liabilities and Net Assets or Equity
Income Taxes
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The Project is an instrumentality of the Town and, therefore, its income is not subject to
federal income taxation pursuant to Section 115 of the Internal Revenue Code.
Cash and Cash Equivalents
The Project considers all highly liquid investments with maturity of three months or less
when purchased to be cash equivalents. At August 31, 2008, the Project had no such
investments included in cash and cash equivalents.
In addition, the Project has restricted cash of$1,041,774 that is held by the Trustee for the
Bonds payable under provisions of the Trust Indenture. During the year ended August 31,
2008, the investment income received from cash was $33,592. See Note III for risk
disclosures and breakdown of restricted cash accounts.
(continued)
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II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Assets,Liabilities and Net Assets or Equity(Continued)
Accounts Receivable
Accounts receivable are stated at amounts management expects to collect from outstanding
balances. Management writes off uncollectible amounts through a reduction to revenue and a
credit to accounts receivable based on its assessment of the outstanding receivables. At year-
end, management assesses the accounts receivable balance and establishes a valuation
allowance based on historical experience and an evaluation of the outstanding balances. As
of August 31, 2008, management has determined that all accounts doubtful of collection have
been charged to operations and an allowance is not required.
Deferred Financing Costs
Costs associated with the issuance of bonds are deferred and amortized over the term of the
Bonds.
Advertising Costs
All adverting costs are expensed as they are incurred. Advertising costs for the year ended
August 31, 2008, were $65,924.
Capital Assets j
Property and equipment have been recorded at the date of acquisition at cost. Routine j
maintenance and repair costs to ready the units for the next period are expensed as incurred. j
Expenditures directly related to the improvement of property are capitalized at cost. The
Project capitalizes the cost of roof replacements and expenditures for other major property
improvements.
The indenture provides for a replacement fund requirement. Depreciation is computed using
the straight-line method over the estimated useful lives as follows:
Estimated
Asset Class Useful Lives
Building 30
Furniture,fixtures and equipment 3-20
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III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
At August 31, 2008, the carrying amount of Texas Student Housing Authority— Town Lake
Austin Project deposits (cash with interest bearing accounts and restricted cash held in
interest bearing accounts) was in total $1,629,156 of which $1,041,774 represented restricted
cash.
Restricted Cash
Restricted cash represents amounts placed on deposit in accounts and held by the Trustee,
which are restricted for the payment of expenses as required by the Trust Indenture. At
August 31, 2008,restricted cash consists of the following funds and accounts:
Fund/Account Description
Bond Proceeds Principal Fund, Series 2002 A-1 $ 303
Bond Proceeds Interest Fund, Series 2002 A-1 3,318
Bond Proceeds Interest Fund, Series 2002 A-2 5,235
Reserve Fund 167
Debt Service Reserve Fund 675,315
Repair and Replacement Fund 329,624
Deferred Debt Service 16,397
Tax and Insurance Fund 2,115
Fee and Expense Fund 9,309
Initial Purchase Fund ( 9)
Total $ 1,041,774
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The following is a brief description of the funds and accounts making p the restricted cash
balance at year-end, as defined by the Trust Indenture:
Revenue Fund— The Revenue Fund was established for monthly deposits from
the depository account that holds general revenues of the Project. All monies are
deposited in the Revenue Fund and then properly distributed to the other funds, as
required by the Trust Indenture. Amounts in the fund at year-end represent
amounts that have not been distributed to the other funds due to timing of the
interfund transfers.
Bond Proceeds Fund — The Trustee makes monthly deposits in the Bond
Proceeds Fund pursuant to the Trust Indenture. Amounts in the Bond Proceeds
Fund shall be used solely to fund the payment of principal and interest on the
Bonds, for the redemption of the Bonds at or prior to maturity, and to purchase
Bonds on the open market.
(continued)
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III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Restricted Cash (Continued)
Debt Service Reserve Fund— The amounts on deposit in this account are to be
used for the purpose of paying principal and interest on the Bonds in the event the
principal and interest is not paid by issuer in accordance with the terms of the
indenture and written notice of the Servicing Agent.
Proiect Fund— Amounts in the Project Fund are held and disbursed for costs of
the Project.
Repair and Replacement Fund— Amounts in the Repair and Replacement Fund
may be used to make mandatory repairs of the Project pursuant to the Trust
Indenture.
Trustee Fee Fund—Amounts are deposited in the Trustee Fee Fund on a monthly
basis and are intended to pay the fees to the Trustee at year-end.
Temporary Funds and Accounts—The Trustee may establish and maintain for so
long as is necessary one or more Temporary Funds and accounts under this
indenture. The Deferred Debt Service Reserve Fund, Tax and Insurance Fund,
and Initial Purchase Funds are Temporary Funds at August 31, 2008.
Residual Fund—The Trustee shall deposit any remaining amount in the Revenue
Fund into the Surplus Fund. Amounts on deposit in the Surplus Fund will be
released to the Project if certain release tests are satisfied. If the release tests are
not satisfied, the Trustee will retain the monies on deposit in the Residual Fund.
The Public Funds Investment Act (Government Code Chapter 2256) contains specific
provisions in the areas of investment practices, management reports and establishment of
appropriate policies relating to a governmental entity's cash and investments.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an instrument. Generally, the longer the maturity of an investment the greater the
sensitivity of its fair value to changes in market interest rates. Texas Student Housing
Authority — Town Lake Austin Project is not significantly exposed to interest rate risk as all
investments earn a variable rate.
(continued)
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III. DETAILED NOTES ON ALL FUNDS (Continued)
A. Cash and Investments (Continued)
Credit Risk
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Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. The Public Funds Investment Act has a minimum
rating that is required for investments. Texas Student Housing Authority—Town Lake Austin
Project holds all of its cash and investments with the Bond Trustee and commercial banks.
Concentration of Credit Risk
The investment policy of Texas Student Housing Authority — Town Lake Austin Project is
subject to the indenture agreement of the Bonds. As of August 31, 2008, the Project held all
of its restricted cash balances with the Trustee, which represents 64% of the total cash and
investments held at August 31, 2008.
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Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be able
to recover collateral securities that are in the possession of an outside parry. The custodial
credit risk for investments is the risk that, in the event of the failure of the counterparty to a
transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another parry. The Public Funds Investment Act does
not contain legal or policy requirements that would limit the exposure to custodial credit risk
for deposits or investments, other than the following provision for deposits: The Public
Funds Investment Act requires that a financial institution secure deposits made by state or
local governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The
market value of the pledged securities in the collateral pool must equal at least the bank
balances less FDIC insurance at all times.
As of August 31, 2008, the Project has unrestricted cash of $587,382 (bank balance
$277,068). Of the bank balance, $272,841 was covered by federal depository insurance
while the remaining $4,227 was uncollateralized. The Project has a Bank Deposit Guarantee
Bond from the Project's depository in the amount of$3,000,000.
(continued)
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III. DETAILED NOTES ON ALL FUNDS (Continued)
B. Capital Assets
Capital asset activity for the Project for the year ended August 31, 2008, was as follows:
Beginning Ending
Balance Additions Retirements Balance
Capital assets,not being depreciated:
Land $ 2,182,816 $ - $ - $ 2,182,816
Total capital assets,
not being depreciated 2,182,816 - - 2,182,816
Capital assets,being depreciated:
Building and improvements 13,270,150 - - 13,270,150
Capitalized purchase costs 887,095 - - 887,095
Land improvements 2,806,596 - - 2,806,596
Unit appliances 295,134 - - 295,134
Furniture and fixtures 915,951 - - 915,951
Total capital assets,
being depreciated 18,174,926 - - 18,174,926
Less accumulated depreciation for:
Building and improvements 1,768,268 627,913 - 2,396,181
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Capitalized purchase costs 118,280 28,484 - 146,764
Land improvements 374,212 - - 374,212
Unit appliances 168,648 - - 168,648
Furniture and fixtures 523,266 - - 523,266
Total accumulated depreciation 2,952,674 656,397 - 3,609,071
Total capital assets,
being depreciated,net 15,222,252 ( 656,397) - 14,565,855
Capital assets,net $ 17,405,068 $( 656,397) $ - $ 16,748,671
C. Bonds Payable
The Bonds are tax-exempt governmental obligations under the Internal Revenue Code. The
Bonds payable represent amounts due to the bondholders, via the Trustee, and payable under
the terms of the Trust Indenture dated December 1, 2001. The Bonds are payable solely from
the revenues generated by the Project and are secured by the revenues pledged and assigned
under the terms of the Trust Indenture. The Town of Westlake does not have any liability for
the payment of the Bonds, as the Bonds are non-recourse to both the Town of Westlake and
Texas Student Housing Authority. Interest rates on the Bonds range from 7.76% to 8.69%
and are payable semi-annually on July 1 and January 1 of each year thereafter.
(continued)
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III. DETAILED NOTES ON ALL FUNDS (Continued)
C. Bonds Payable (Continued)
The following is a summary of long-term debt transactions of the Project for the 12-month
period ended August 31,2008:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Revenue Bonds:
2002 A-1 Bonds $ 16,739,577 $ - $( 222,765) $ 16,516,812 $ 222,872
2002 A-2 Bonds 5,089,241 - - 5,089,241 -
Total $ 21,828,818 $ - $ 222,765 $ 21,606,053 $ 222,872
The debt is to be amortized on the A-1 Bonds through 2033 with monthly payments of
$124,726 and the A-2 Bonds through 2038 with monthly payments of $167,675 starting
November 1, 2033. The A-2 Bonds have no regular principal payments until the year 2033.
The Bonds also had a clause for an initial purchase release draw. The requirements for that
draw were not met and during 2006, the funds held in the initial Purchase Fund were applied
to principal on the Bonds. The annual requirements to amortize all debts outstanding as of
August 31, 2008, are as follows: I
Year Ending Governmental Activities
August 31, Principal Interest Total
2009 $ 222,872 $ 1,668,765 $ 1,891,637
2010 240,795 1,650,842 1,891,637
2011 260,159 1,631,478 1,891,637
2012 281,080 1,610,557 1,891,637
2013 303,683 1,587,954 1,891,637
2014-2018 1,926,465 7,531,720 9,458,185
2019-2023 2,836,079 6,622,106 9,458,185
2024-2028 4,175,185 5,283,000 9,458,185
2029-2033 11,359,735 3,312,414 14,672,149
Totals $ 21,606,053 $ 30,898,836 $ 52,504,889
D. Net Assets
Net assets represent the residual assets after liabilities are deducted. These assets are
reported in the following categories:
Invested in Capital Assets, Net of Related Debt consists of capital assets, net of
accumulated depreciation and reduced by outstanding balances for bonds, notes,
and other debt that are attributed to the acquisition, construction, or improvement
of those assets.
(continued)
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III. DETAILED NOTES ON ALL FUNDS (Continued)
D. Net Assets (Continued)
Restricted for Debt Service results when constraints placed on net asset use are
either externally imposed by creditors, grantors and the like, or imposed by law
through constitutional provisions or enabling legislation.
Unrestricted Net Assets consists of the portion of net assets after invested in
capital assets,net of related debt and restricted for debt service has been satisfied.
E. Management Fees
The Project paid JPI property and asset management fees for the Project through February
28, 2005. Effective March 1, 2005, the Project entered into a management agreement with
ACH and began paying management fees to ACH at that date. During 2008, the Project
recorded management fees of$153,671 to ACH. At August 31, 2008, the Project owed JPI
$79,200 for property management fees.
F. Concentrations
The Project consists of one property in Austin, Texas, and is dependent upon the Austin area
and the higher education facilities in the Austin area for revenues.
G. Commitments and Contingencies
The Project has yet to have an arbitrage calculation performed for its outstanding debt. After
that analysis, the Project may incur a liability for interest earned in accordance with Internal
Revenue Service regulations.
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I
SUPPLEMENTAL SCHEDULE
TEXAS STUDENT HOUSING AUTHORITY
TOWN LAKE AUSTIN PROJECT
SCHEDULE I-SCHEDULE OF REVENUES AND EXPENSES
BUDGET AND ACTUAL
FOR THE YEAR ENDED AUGUST 31,2008
Budget Actual Variance
REVENUES AND OTHER SUPPORT
Rental $ 2,758,234 $ 2,721,224 $( 37,010)
Other 87,140 110,355 23,215
Interest - 33,592 33,592
Total revenues and other support 2,845,374 2,865,171 19,797
OPERATING EXPENSES
Personnel 293,104 264,901 28,203
Contract services 78,120 52,893 25,227
Utilities 415,580 500,461 ( 84,881)
Repairs and maintenance 19,750 22,780 ( 3,030)
Turnover 82,775 65,128 17,647
Advertising and promotion 75,800 65,924 9,876
Administration 114,694 136,953 ( 22,259)
Total operating expenses 1,079,823 1,109,040 ( 29,217)
I
REVENUES AVAILABLE FOR FIXED CHARGES 1,765,551 1,756,131 ( 9,420)
OTHER EXPENSES
Management fees 147,195 153,671 ( 6,476)
Replacements 55,500 53,261 2,239
Depreciation and amortization 821,578 821,578 -
Interest 1,677,721 1,677,721 -
Total other expenses 2,701,994 2,706,231 4,237
EXCESS OF EXPENSES OVER(UNDER)REVENUES $L_936,443) $( 950,100) $( 13,657)
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