Attached files

file filename
10-K - NAT 6-13 10K 03-31-10 - WNC Housing Tax Credit Fund VI, L.P., Series 13nat61310k033110.htm
EX-31.2 - EXHIBIT 31.2 - WNC Housing Tax Credit Fund VI, L.P., Series 13exhibit312.htm
EX-31.1 - EXHIBIT 31.1 - WNC Housing Tax Credit Fund VI, L.P., Series 13exhibit311.htm
EX-99 - GROVE_2007 - WNC Housing Tax Credit Fund VI, L.P., Series 13grove_2007.htm
EX-32.2 - EXHIBIT 32.2 - WNC Housing Tax Credit Fund VI, L.P., Series 13exhibit322.htm
EX-32.1 - EXHIBIT 32.1 - WNC Housing Tax Credit Fund VI, L.P., Series 13exhibit321.htm
EX-99 - DAVENPORT VII LP 2008 - WNC Housing Tax Credit Fund VI, L.P., Series 13davenportviilp_08.htm
EX-99 - GROVEVILLAGE 12-31-09 - WNC Housing Tax Credit Fund VI, L.P., Series 13grovevillage_123109.htm
EX-99 - DEVENPORT VII LP 12-31-09 - WNC Housing Tax Credit Fund VI, L.P., Series 13davenportviilp_123109.htm

 
 
 
 
 
 
 
 
 
 
 
GROVE VILLAGE LIMITED PARTNERSHIP
 
FINANCIAL STATEMENTS
 
Year Ended December 31, 2008
 


 
 
 
 
 
 
 
 
 

 
PAILET, MEUNIER and LeBLANC, L.L.P.

 
 

 
 
 
CONTENTS
 
 
PAGE
INDEPENDENT AUDITOR'S REPORT
3
   
FINANCIAL STATEMENTS:
 
    Balance Sheets
4-5
    Statements of Income
6
    Statements of Changes in Partners' Equity
7
    Statements of Cash Flows
8-9
    Notes to Financial Statements
10-14
   
INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION
16
    Balance Sheet Data
17-18
    Statement of Income Data
19-22
    Statement of Changes in Partners' Equity Data
23
    Statement of Cash Flows Data
24-25
    Supplementary Data Required by HUD
26-28
   
INDEPENDENT AUDITOR'S REPORT ON THE INTERNAL CONTROL
29-30
   
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS
31
   
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION
32
   
CERTIFICATION OF PARTNERS
33
   
MANAGEMENT AGENT'S CERTIFICATION
34
   
AUDITOR INFORMATION
35
 
 
 

 
 
2

 
 
PAILET, MEUNIER and LeBLANC, L.L.P.
Certified Public Accountants
Management Consultants
 
 
INDEPENDENT AUDITOR'S REPORT
 
To the Partners
Grove Village Limited Partnership
Portland, Oregon
 
We have audited the accompanying balance sheets of Grove Village Limited Partnership, owner of Grove Village Apartments, HUD Section 8 Contract Nos. TX16L00024 and TX16M000311, as of December 31, 2008, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Grove Village Limited Partnership as of December 31, 2008 and
the results of its operations, changes in partners' equity, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of
America.
 
In accordance with Government Auditing Standards and the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, we have also issued a report dated May 7, 2009, on our consideration of Grove Village Limited Partnership's internal control, and reports dated May 7, 2009, on its compliance with specific requirements applicable to major HUD programs and specific requirements applicable to Fair Housing and Non-Discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
 
 
 
/s/ PAILET, MEUNIER and LeBLANC, L.L.P.
Metairie, Louisiana
May 7, 2009
 
 
3

 

GROVE VILLAGE LIMITED PARTNERSHIP
 
BALANCE SHEET
 
DECEMBER 31, 2008
 
 
 
ASSETS
     
Rental property and equipment, at cost:
     
    Buildings, furnishings and equipment
  $ 9,729,480  
    Accumulated depreciation
    (1,043,949 )
      8,685,531  
    Land
    876,846  
      9,562,377  
         
Restricted deposits:
       
    Replacement reserves
    14,720  
    Other reserves
    122,486  
    Tenant trust - security deposits
    19,237  
      156,443  
         
Other assets:
       
    Cash
    58,147  
    Accounts receivable
    4,837  
    Prepaid expenses
    24,350  
    Intangible assets, net of amortization of $33,793
    319,700  
      407,034  
       TOTAL ASSETS
  $ 10,125,854  

 
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
4

 

GROVE VILLAGE LIMITED PARTNERSHIP
 
BALANCE SHEET
 
DECEMBER 31, 2008
 
 
 
 
LIABILITIES AND PARTNERS' EQUITY
     
Liabilities:
     
Mortgage note payable
  $ 6,119,975  
Developer fee payable
    1,487,120  
Notes payable - affiliate
    2,065,969  
Accounts payable
    397,418  
Accrued interest payable
    446,002  
Rents received in advance
    10,820  
Tenant security deposits payable
    18,559  
      10,545,863  
         
Partners' equity
    (420,009 )
         
          TOTAL LIABILITIES AND EQUITY
  $ 10,125,854  
 
 
 

 
 
The accompanying notes are an integral part of these financial statements.
 
5

 

GROVE VILLAGE LIMITED PARTNERSHIP
 
STATEMENT OF OPERATIONS
 
FOR THE YEAR ENDED DECEMBER 31, 2008
 
 
 
 
Revenue:
     
Rent, net
  $ 1,518,444  
Other
    29,229  
         
Total Income
    1,547,673  
Expenses:
       
Administrative
    495,412  
Utilities
    464,832  
Operating and maintenance
    269,966  
Taxes and insurance
    138,351  
Interest
    445,109  
Other financial
    65,695  
Depreciation
    606,331  
Amortization
    24,921  
Total expenses
    2,510,617  
         
Operating income (loss) before partnership revenue (expenses)
    (962,944 )
Partnership revenue
    52  
Other expenses
    (140,313 )
         
Net income (loss)
  $ (1,103,205 )

 
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
6

 

GROVE VILLAGE LIMITED PARTNERSHIP
 
STATEMENT OF CHANGES IN PARTNERS' EQUITY
 
FOR THE YEAR ENDED DECEMBER 31, 2008
 
 
 
 
    Total    
General
Partner
   
Limited
Partner
 
Balance - January 1, 2008
  $ 9,302     $ (1,321,330 )   $ 1,330,632  
                         
Contributions
    673,894       217,455       456,439  
                         
Net income (loss)
    (1,103,205 )     (110 )     (1,103,095 )
                         
Balance - December 31, 2008
  $ (420,009 )   $ (1,103,985 )   $ 683,976  

 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
7

 

GROVE VILLAGE LIMITED PARTNERSHIP
 
STATEMENT OF CASH FLOWS
 
FOR THE YEAR ENDED DECEMBER 31, 2008
 
 
Cash flows from operating activities:
     
Net Income (Loss)
  $ (1,103,205 )
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
       
Depreciation and amortization expense
    631,252  
Changes in certain assets and liabilities:
       
Accounts receivable
    181,479  
Prepaid expenses
    (13,235 )
Accounts payable
    249,216  
Accrued interest payable
    202,136  
Rent received in advance
    4,860  
Entity/construction liability accounts
    7,500   
Tenant security deposits
    (678 )
         
               Net cash provided (used) by operating activities
    159,325  
         
Cash flow from investing activities:
       
Additions to fixed assets
    (104,884 )
Deposits to reserve accounts
    (135,451 )
Net cash provided (used) by investing activities
    (240,335 )
         
Cash flow from financing activities:
       
Proceeds from notes payable
    (60,025 )
Contributions
    643,440  
Payment of construction payable
    (467,000 )
Net cash provided (used) by financing activities
    116,415  
         
Net increase (decrease) in cash and equivalents
    35,405  
Cash and equivalents, beginning of year
    22,742  
Cash and equivalents, end of year
  $ 58,147  

 
 
The accompanying notes are an integral part of these financial statements.
 
8

 

GROVE VILLAGE LIMITED PARTNERSHIP
 
STATEMENT OF CASH FLOWS
 
FOR THE YEAR ENDED DECEMBER 31, 2008
 
 
 
 
Supplemental disclosure of cash flow information:
     
    Cash paid for interest
  $ 61,976  
         
Supplemental schedule of non-cash investing and financing activities:
       
         
    Additions to fixed assets from reclassification of:
       Construction-in-progress
  $ 2,388  
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements.
 
9

 
 
GROVE VILLAGE LIMITED PARTNERSHIP
 
NOTES TO FINANCIAL STATEMENTS
 
DECEMBER 31, 2008
 
NOTE 1 - NATURE OF BUSINESS
 
Grove Village Limited Partnership (the Partnership) is an Oregon limited partnership which was formed in 2004 to own and operate a 232-unit apartment project (the Project) in Dallas, Texas. The Project was rehabilitated in conformity with the provisions of Section 42 of the Internal Revenue Code, including, but not limited to, complying with tenant eligibility and rent restrictions.
 
The Partnership was initially formed by and among the General Partner, Walker Guardian LLC, an Oregon limited liability company, and the Limited Partner, Walker Bridge L.L.C. The Partnership shall continue until January 1, 2050 unless terminated as provided by the Agreement of Limited Partnership. During 2006 a new limited partner WNC Housing Tax Credit Fund VI Series 13, L.P was admitted and Walker Bridge L.L.C. withdrew as the limited partner.
 
The Partnership has assumed existing contracts with the US. Department of Housing and Urban Development ("HUD") under the Section 8 Housing Assistance Payment Program, which covers 143 of the 232 housing units in the Project. The project receives a rent subsidy provided by HUD. During the year rental revenue from HUD totaled $969,904, representing 63 percent of total revenue. The rent subsidy contracts with HUD expire August 31, 2009 and September 30, 2009.
 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Method of Accounting
The accrual method of accounting is used for financial statement purposes.
 
Depreciation
Depreciation is computed for financial statement purposes using the straight-line method over the estimated useful lives of the related assets.
 
Amortization
Amortization is computed on a straight-line basis. Financing costs are amortized over 5 years.
 
Income Taxes
No income tax provision has been included in the financial statements since income or loss of the Partnership is required to be reported by the respective partners on their income tax returns.
 
Cash Equivalents
For purposes of the statement of cash flows, the Partnership considers all investment instruments purchased with a maturity of three months or less to be cash equivalents. At December 31, 2008, there were no cash equivalents.
 
 
 
10

 
 
GROVE VILLAGE LIMITED PARTNERSHIP
 
NOTES TO FINANCIAL STATEMENTS
 
DECEMBER 31, 2008
 
 
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
 
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.
 
Concentration of Credit
The Partnership maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Partnership has not experienced any losses in such accounts. Management believes the Partnership is not exposed to any significant credit risk on cash and cash equivalents.
 
Accounts Receivable
Accounts receivable are reported at the amount management expects to collect on balances outstanding at December 31, 2008. Management closely monitors outstanding balances and writes off all balances deemed uncollectible.
 
Going Concern
The partnership has been evaluated as to its ability to continue to operate as a going concern. The willingness and ability of management to continue to fund operating deficits for the partnership mitigates concerns related to the lack of cash flow. As a result the partnership is expected to continue as a going concern.
 
NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD
 
Developer fee payable
Developer fees are owed to an affiliate of the general partner for services rendered during the rehabilitation of the project . There is no interest charged on the note. There were no payments made during the year. As of December 31, 2008 developer fee payable totaled $1,487,120 all of which was earned.
 
Property Management Fee
Management of the Project has been performed by an affiliate of the general partner. During the year ended December 31, 2008, management fees charged by the related entity totaled $107,174. Payments totaling $173,741 were made during 2008.
 
Asset Management Fee
The operating agreement provides for the limited partner to be paid an annual asset management fee beginning in 2008 in the amount of $7,500 with annual increases of 3%. The fee is cumulative. As of December 31, 2008, $7,500 was charged and payable.
 
 
 
11

 
 
GROVE VILLAGE LIMITED PARTNERSHIP
 
NOTES TO FINANCIAL STATEMENTS
 
DECEMBER 31, 2008
 
 
NOTE 3 - RELATED PARTY TRANSACTIONS AND PRIOR PERIOD - (CONTINUED)
 
Other fees
Tenant and employment background screening services of the Project has been performed by an affiliate of the general partner. During the year ended December 31, 2008, screening fees totaling $11,298 were earned by and paid to the related entity.
 
Land Acquisition Fee
The partnership agreement provides for the general partner to be paid a land acquisition fee in the amount of $15,000 for services in locating, negotiating and closing on the purchase of the real property. As of December 31, 2008 land acquisition fee payable totaled $15,000.
 
Guardian Management Loan
A loan payable to an affiliate of the General Partner totaled $737,156 for 2008. The amounts relate to operating costs of the Project, financing costs and capital improvements to the Project. Under the terms of the Agreement of Limited Partnership, the loan bears interest at 9.5% per annum over a 40 year period. The note is not secured by the property and payments shall be made solely from Net Operating Income, sale or refinancing proceeds. No payments were made during 2008. As of December 31, 2008, interest charged and payable totaled $163,403.
 
Walker Bridge Loan
Under the terms of the Agreement of Limited Partnership, amounts advanced by Walker Bridge LLC bear interest at 9.5% per annum. No payments were made during 2008. Principal due on the note totaled $1,078,154 for 2008. The note is not secured by the property and payments shall be made solely from Net Operating Income, sale or refinancing proceeds. As of December 31, 2008, interest charged and payable totaled $114,008 and $250,949, respectively.
 
Notes Payable
The partnership has a Note Payable to Apartment Acquisition LLC in the face amount of $633,400 with an initial discount of $451,726. The note is in connection with the purchase of the Project, for which Apartment Acquisitions LLC assigned the right to purchase the Project to the Partnership in exchange for a non-interest bearing note which has been discounted at 7.75%. The cumulative accretion of the discount totaled $68,985 at December 31, 2008. The accretion of the discount for 2008 is $18,635. The note is due in annual payments equal to Net Cash Flow. The note matures December 2020. The note is not secured by the property.
 
NOTE 4 - MORTGAGE PAYABLE
 
The partnership has a note payable to U.S. National Bank Association (the "Bank") in the amount of $6,180,000 for the acquisition and operations of the project. The Bank is also the trustee for the Bonds. Monthly payments of $37,384 are due beginning March, 2008 and the note is secured by the property. The note matures February 2023.
 
 
 
 
12

 
 
GROVE VILLAGE LIMITED PARTNERSHIP
 
NOTES TO FINANCIAL STATEMENTS
 
DECEMBER 31, 2008
 
 
NOTE 4 - MORTGAGE PAYABLE - (CONTINUED)
 
Affiliates of the general partner have personally guaranteed the Note Payable. The following schedule outlines principal amounts due on the note:
 
Year
 
Amount
 
       
2009
  $ 71,352  
2010
    76,896  
2011
    81,704  
2012
    86,819  
2013
    91,934  
2014 and thereafter
    5,711,270  
         
    $ 6,119,975  

 
NOTE 5 - DISTRIBUTIONS/RESIDUAL RECEIPTS
 
Distributions payable to partners from funds provided by rental operations are permitted by the regulatory agreement, provided: 1) surplus cash, as defined by HUD, is available for such purposes; 2) the Project is in compliance with all outstanding notices of requirements for proper maintenance; and, 3) there is no default under the regulatory agreement. As of December 31, 2008, there was no surplus cash available for distribution.
 
NOTE 6 - PARTNERS' CAPITAL
 
Since the formation of Partnership, total capital contributions of $ -0-, $304, and $2,130,351 have been received from the General Partner, the Special Limited Partner and the Limited Partner, respectively. The Limited Partner is required to make additional capital contributions of $456,438. No additional capital contributions are required by the General Partner and the Special Limited Partner.
 
NOTE 7 -CONSTRUCTION COSTS PAYABLE
 
The Partnership has entered into a construction contract for the rehabilitation of the project that provides for total construction costs of $4,676,052 all of which has been billed. During 2008, the construction payable was paid in full.
 
 
 
 
 
 
 
13

 
 
GROVE VILLAGE LIMITED PARTNERSHIP
 
NOTES TO FINANCIAL STATEMENTS
 
DECEMBER 31, 2008
 
 
NOTE 8 - COMMITMENTS AND CONTINGENCIES
 
Operating Deficit Guaranty
Under the terms of the partnership agreement, the general partner is obligated to pay all expenses of operating and maintaining the Project in excess of gross collections to the extent necessary to maintain break-even operations, as defined in the agreement. Such payments are required through the break-even date and the ensuing period of approximately six years and are limited to $2,105,000. Any payments made by the general partner would be treated as non-interest bearing loans to the Partnership, to be repaid based on a priority set forth in the partnership agreement.
 
Tax Credit Guaranty
Affiliates of the general partner (the Guarantors) have entered into a tax credit guaranty agreement. The guarantors are obligated to insure that the property will be constructed and operated in accordance with terms and conditions set forth in the various agreements in order to be eligible for the maximum annual tax credits, as defined in the tax credit guaranty agreement.
 
Incentive Management Fee
Commencing in 2008, the Partnership shall pay to the general partner, through the compliance period, an annual Incentive Management Fee equal to 40% of Net Operating Income. The Incentive Management Fee shall be payable from Net Operating Income in the manner and priority set forth in the Partnership Agreement. If the Incentive Management Fee is not paid in any year, it shall not accrue for payment in subsequent years.
 
Tax Credit Compliance Fee
Commencing in 2006, the Partnership shall pay to the general partner, through the compliance period, an annual tax credit compliance fee equal to 40% of Net Operating Income. The tax credit compliance fee shall be payable from Net Operating Income in the manner and priority set forth in the Partnership Agreement. If the tax credit compliance fee is not paid in any year, it shall not accrue for payment in subsequent years.
 
Developer Fee Guaranty
Affiliates of the general partner have entered into a guaranty agreement which guarantees the full and prompt payment of the developer fees when due.
 
 
 
 
 
 
 14