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Home My WebLink About07/28/2004HOUSING AUTHORITY MEETING July 28, 2004 LOBBY CONFERENCE ROOM 7:00 P.M. A. Call Meeting to Order B. Roll Call C. Approval of the Minutes: Marc6 24, 2004 D. Officers Reports E. Public Forum F. Unfmished Business G. New Business 1. Presentation & acceptance of audit 2. Update on Caraation Square Project 3. Management of Carnation Square 4. Update on 44In & Tabor Project H. Other I. Adjournment CITY OF WHEAT RIDGE HOUSING AUTHORITY Minutes of Meeting March 24, 2004 A. CALL MEETING TO ORDER The meeting was called to order at 7:00 p.m. by Chair DiTullio. B. ROLL CALL Authority Members Present: Cheryl Brungazdt Kent Davis Jerry DiTullio Kathryn Fulton Kathy Nuanes Others Present: Alan White, Community Development D'uector Larry Schulz, City Council Lena Rotola, City Council Alan Feinstein, Jeffco Housing Authority - Larry Nelson, Comerstone Realty Betty Maybin, Comerstone Realty Jun Bills, Vectra Bank Dick Matthews, Accountant Ann Lazzeri, Recording Secretary C. APPROVAL OF MINUTES It was moved by Kent Davis and seconded by Cheryl Brungardt to approve the minutes of February 25, 2004. The motion passed unanimously. D. OFFICERS REPORTS There were no officers reports. E. PUBLIC FORUM No one was present to address the Authority. F. UNFINISHED BUSINESS There was no unfinished business. G. NEW BUSINESS Financial Reaort Dick Matthews presented a financial report for the Housing Authority as of Mazch 19, 2004. The report did not include the third property that closed the moming of the Authority meeting. Update on Carnation Square Proiect Larry Nelson reported that three uniu have been sold. Two other units are scheduled for closing in April. Alan Feinstein reported that two bids have been received for a 6-foot privacy fence to be placed behind the garages. The fence should prevent "tagging" of the gazages. Jeffco Housing Authority's role in the project is complete with the exception of any problems that might arise from walk-through's. New Proiect Pronosal - 44`" and Tabor Lazry Nelson provided an in-depth report on pazcels available at this location which could be used to build a new affordable housing project. There is vacant land as well as some land that would require demolition of existing structures. The consensus of those involved in the discussion was that it was very important to have an attractive project with attractive design, sufficient green space, etc. The maximum units a(lowed on this property would be 16 units per acre. Alan White stated that a development has recently arisen regarding a 25-foot vacated right-of-way strip between two of the pazcels. A plat will be obtained and the situation further investigated. Following discussion of the various options presented by this project proposal, there was a consensus that the project has enough merit to warrant further investigation including sending letters of intent to property owners and having appraisals performed. H. ADJOUI2NMENT The meeting was adjourned at 7:56 p.m. Jerry DiTullio, Chair Housing Authority Minutes March 24, 2004 Ann Lazzeri, Secretary 2 Swanhorst & Cutler LLC Cenified Public Accouman~s July 19, 2004 Alan White Wheat Ridge Housing Authoriry 7500 W. 29" Avenue Wheat Ridge, Colorado 802] 5 Dear Alan: Enclosed is a draft of one (1) copy of the financial statements for the Wheat Ridge Housing Authority as of December 31, 2003. Please review and make any comments as soon as possible. We will issue a final report after receiving your comments. Please desuoy this draft when you receive the final report. Sincerely, Swanhorst & Cutler LLC 8400 E. Crescent Parkway • Suite 600 • Greenwood Village, CO 80111 •(720) 528-4306 Fax: (720) 528-4307 N'HEAT RIDGE HOUS WG AUTHOAITY Gcnml Fwd December 31. 2003 ACCOUNT ACCOUNT NUMBER DESCRIPTION Cssh - Openaing Cesh - Condo Assoc. Cuh - Cemation Consv Aca Lovis Receiveble Prepadlnsurviu Accrnmt Receivable - pirnnts Noperty Hcld for Rcsele eccumWemd depmciation TOTAL ASSETS Liflb A/P Reteivepe Payable RE uues payable Home O~rs Dues Escmw Tenanl deposits Accrued Imaes, nrne payable - conswction mortgng<peyeble - long ttrm TOTAL LIABILITIES W/P Clirn, Adjus[mrnts Audit REF. 12/31/03 DEBIT CREOIT 12/31103 C 297.136 297.136 0 0 C 236,650 136,650 DI 12,963 12,963 HI 1.996 1:996 EI 0 20,000 20,000 U3 793.665 773665 0 0 1,322.410 20,000 -"-~-'0 I 342.410 2003 Audit Au& Budgei 12/31/02 12/31/01 725,308 66,008 7.550 0 13.210 0 0 0 0 0 369,839 1 292,129 0 0 RETAINED EAR7hING5 INCOME (LOSS) TOTAL LIAB & $URPLVS INCOME Intergovvnmenul RcnW Inwme Procads-Salc of Units lnmrtct lncom< Other Gamlneome - CDBG G. on Sale o(Condo Units TOTALINCOME EXPENSES Gm«al Houvmg Repeire & Maimrnence G/A Otfiu Supplies GIA Conf & Mening G/A Accouming & Legd G/A Dues. Books. Su6s APOovsnl Fas G~A Homcowncrs Assoc. Dms Insurance ItE Tues G/A Ciry Rcimburscmrnt AcquisiGOn con - Nle frea G/A Niliue¢ Condo mep G/A Other Loaa on Sele of Coedo Units Cost of Uniu Sold Begimning Co, of Uniu Sold Ending Cos1s o( Units Sold &Iling casMBuy<rs lncentwes Zoning Commiasions CapiW Wtlry pmpeny Acqwsition Roperty Reheb Dcb, Scrcice Pnnciyal In[crtu lqsn Coa1a, b[le seMChes. c~c Comingenry TOTALEXPENDITURES NETINCOME MI 19,710 19,710 M2 77.31I 27,311 immtd 269 269 0 0 P 300 300 p 0 L 173,298 173.298 0 ~ 320,888 0 0 220,888 0 SALY 1.105 72] 1.105,727 (4,205) (146,951) (1,404951) 15]95 1.101.522 (146.951) (1004951)I.I21.522 1,342,410 (146.951) (1.400,951) 1.302,410 0 0 W 10,570 10,570 UI 639,000 639,Oq1 0 1.063 1,063 55 55 EI 11.581 20.000 31,581 p 0 662,269 639,000 20,000 43,269 0 1.110,907 I,JSB.U] 2,630 4,279 7.550 0 0 0 0 0 0 238,294 0 5,I80 242.573 " O 0 0 1,11536d 0 0 (9,637) 1,115,564 0 1.105,727 1.115,564 0 I.I I0.907 1.358.137 O _-o 0 0 1,000,000 0 28.627 15,650 0 0 0 0 530 3,6]2 0 0 102,365 0 43,698 0 0 4 a 0 73,065 1,121 70] p 0 0 0 4,5]0 2,533 2.533 0 0 53 53 0 71 0 ZS 15 0 200 0 7,246 7,246 0 0 0 60 60 0 60 0 550 550 0 0 0 0 1.288 1.268 0 2.578 0 3,498 3,498 0 0 364 364 0 0 506 2 2506 0 4,996 0 , 301 301 o 0 0 0 1,541 1,541 0 6,173 0 695 1 1,693 0 , 20 30 0 0 12,286 12,386 0 57,051 Q 0 369,839 369,839 a a (773.665) 773.665 0 0 17,388 17.388 0 0 3pp 300 0 0 21,394 27.38C 0 0 0 0 0 000 V3 789 789,000 0 0 0 0 , U3 211,748 211,718 0 0 0 0 0 0 0 0 0 0 2,149 3449 0 II?53 I.SD 6 351 6,351 0 0 , a o o - a " o 666,474 785,951 1,424951 -27,474 - -"'0 82.882 6.143 (4,205) (166,951) (1,404951) 15,795 _ __0 _ __(9,837) 1.11536d Wheat Ridge Housing Authority Audit Adjustments December 31, 2003 Ref Account # Description (1) El New Acct Granu Receivable 564 CDBG Grant DR 20,000.00 CR 20,000.00 To record grant receivable for CDBG grant at 12/31/03. (2) TB 500 Sale of Units 639,000.00 New Acct Loss on sale of Units 12,283.25 599 Ending Costs of Units Sold 773,664.58 551 Beginning Costs of Uniu Sold 369,839.00 555 Purchase of Units 789,000.00 802 Gardening and Maintenance 1,084.00 843 Repairs 1,448.52 560 Acquisition Appraisal Fees 550.00 807 Insurance 3,497.55 857 Taxes - Real Estate 363.58 562 Acquisition Costs 300.90 565 CondoMap 1,694.50 700 Selling Costs 925.00 704 Buyerlncentives 12,448.70 705 Closing Cosu 4,014.05 595 Zoning Application 300.00 710 Commissions 21,384.00 567 Construction Period Maintenance 6,208.60 569 Environmental Study 1,530.00 570 Garages 11,732.00 573 Rehabilitation - Appliances 8,227.00 574 Rehabilitation - Cabineu 11,000.00 575 Rehabilitation - Electrical 8,540.00 576 Rehabilitation - Exterior 42,240.50 577 Rehabilitation - Floors 18,927.44 578 Rehabilitation - Plumbing 55,515.15 579 Rehabilitation - Structural 42,733.70 580 Rehabilitation - Various 5,092.64 572 Loan Costs 5,140.00 582 Title Insutance 946.00 585 Title Searches 265.00 To record loss from sale of condos. WHEAT RIDGE HOUSING AUTIIORITY FINANCIAL STATEMENTS December 31, 2003 Kfie ~~f TABLE OF CONTENT3 Independent Auditors' Report GenetjI Purpose Financial Statements ,,,$s#ance Sheet Statement of Revenues, Expenses and Changes in Retained Earnings Statement of Cash Flows Notes to Financial Statements PAGE 2 3 4 5-9 Bo1~id'of Commissioners ~t'tidge Housing Authority eat Ridge, Colorado INDEPENDENT AUDTTORS' REPORT We have audited the accompanying general purpose financial statemenu of the Wheat Ridge Housing Authority as of December 31, 2003, and for the year then ended. These general purpose financial statemenu are the responsibiliTy of the WoeiWidge Housing Authority's management. Our responsibility is to express an opinion on these general 'ancial statements based on our audit. We wnducted our'`audit in aceordance with auditing standards generally accepted in the United States of America. Those standazds require that we plan and perfortn the audit to obtain reasonable assurance about whether the general purpose financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disdosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose f tements referred to above present fairly, in all material respects, the financial position of the Whear ousing Authoriry as of December 31, 2003, and the results of iu operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. May 21, 2004 ~ `yM ~ r ~ • GENERAL PURPOSE FINANCIAL STATEMENTS Sk+1ir, 40p, WHEAT RIDGE HOUSING AUTHORITY BALANCE gHEET December 31, 2003 ASSETS Cash.. P ~eld for Resale G~eceivable Prepaid Expenses Loans Receivable TOTAL ASSETS LIABILITIES AND FUND EQUITY CURREN'C I,IABILITIES Accounts Payable RetainagePayable `Accrued Liabilities Homeowners Dues Escrow Loan Payable TOTAL LIABILITIES FUND EQUITY Retained Earnings TOTAL LIABILITIES AND FUND EQUITY ~a . 2003 2002 $ 533,786 S 727,858 773,665 369,839 20,000 - 1,996 - 12,963 13,210 $ 1,342,410 $ 1,110,907 $ 19,710 S 2,630 2'7,311 - 569 - 2,550 173,298 - 22QS88 5,180 1,121,522 1,105,727 $ 1,342,410 $ 1,110,907 ~ The accompanying notes are an integral psrt of the financial statements. 2 WHEAT RIDGE HOUSING AUTHORITY STATEMENT OF RFVENJES EXPFNSES AND CfiANGES IN RF_TAINED EARxINGS Yeaz Ended December 31, 2003 OPERATIN4-ICEV ENUES a' - Re.`n~tal::. ~uR ~ rt. TOTAL OPERAT[NG REVENUES OPERATING EXPENSES Generai and AdminisVative Utilities Homeowners Dues City Reimbursement TOTAL OPERATING NET OPERATING [NCONfE NONAPERAT[NG REVENUES (EXPENSES) incerest [ncome Interest Expense Loss on Sale of Investment Property NET NON-OPERATING REVENUES (EXPENSES) xi> NET INCOME (LOSS) BEFORE CAP[TAL Ollr ONS CAPITAL CONTRIBUTIONS Granu NET INCOME (LOSS) RETAINED EARNINGS, Beginning RETAINED EARNINGS, Ending 2003 $ 10,570 s 55 10,625 7,404 ],541 1,288 2,506 12,739 (2,114) ],063 (Z,449) (12,286) (13,672) (I5,786) 31,581 15,795 1,105,727 $ 1,121,522 . ~k,., 2002 28,627 _ 28,627 331 6,173 2,578 4,996 14,078 14,549 520 (ll,753) (57,05]) (68,284) (53,735) 43,898 (9,837) 1,115,564 $ 1105,727 V~ 400 The accompenying notes are an integral part of the financial statements. 3 WHEAT RIDGE HOUSMG AUTHORITY STATFMFNT OF CASH FLOWS YearEnded December 31, 2003 Increase (Decrease) in Cash 2003 2002 CASH FLQW$'FROM OPERATING ACTIVITIES Cuh Re&~iysd:lrom Tenants and Others $ 10,625 $ 31,177 Ca~;~~q~ents to Suppliers and Others (13,730) (15,727) Net Cash Provided (Used) by Operating Activities (3,105) 15,450 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Loans to Homeowners - (13•210) Loan Repayments from Homeowners 247 " Net Cash Provided (Used) by NotrCapital Financing Activities _247 (13•210) ;A:ND RELATED FINANGNG ACTIVITIES CASH FLOWS fROM C~# r t . Rehabilitatiort'Nitd~t:msmg Costs of Investment Property Purchase (1,013,707) (536,461) , Proceeds from Sale of Investinent Property 639,000 1,401,700 Grant Proceeds 11.581 43,898 Loan Proceeds 173,298 - Loan Principal Payments (238,294) Loan interost Payments (2,449) (I1,753) Net Cash ProvideA (Used) by Capitzl and Related Financing Activities . (192,277) 659,090 CASH FLOWS FROM INVESTING ACTIVITIES . interest Income 1,063 520 Net Cuh Provided by Investing Activities 1,063 520 NET INCREASE (DECREASE) IN CASH (194,072) 661,850 CASH, Beginning 727,858 _ 66,008 CASH, Ending $ _ 533,786 5 727,858 RECONCILIATION OF NET OPERATiNG MCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 549 S 14 Net Operating [ncome S (2,114) , Adjustrnents to Reconcile Net Operating Income to Net Cash Providrd (Used) by Operating Activities Changes in Assets and Liabilities Related to Operations Prepaid Insurance (1,996) 986 2 (1,649) Accounu Payable , 569 Accrued Liabilicies (2,550) 2,550 Homeowners Dues Escrow _ _ S 105 $ 15,450 Net Cash Provided by Operating Activities The accompanying notes are an integal part of the financial statements. 4 WHEAT RIDGE HOUSING AUTHORITY NOTES TO FINANCIAL STATEMENTS December 31, 2003 NOTE 1: SUMMARY OF SIGNIFICANTACCOUNTING POLICIES The financial statements ofthe Whea[ Ridge Housing Authority (the Authoriry) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to govemmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more signi5cant of the Authority's accounting policies are described below. Reporting EntiTy In accordance with govemmental accounting standards, the Authority has considered the possibiliry of inclusion of additional entities in iu financial statemenu. The definition of the reporting entiry is based ~ily on financial accountability. The Authority is financially accountable for org ~ 3~at make up its legal entity. It is also financially accountable for Iegally separate org s if Authority officials appoint a voting majority of the organization's governing body and eit~`ier it is able to impose its will on that organization or there is a potential for benefits to, or to impose specific financial burdens on the Authority. The Authority may also be financially accountable for organizations that are fiscally dependent upon it. Based on the application of this criteria, the Authority does not include additional organizations within its reporting entity. Fund Accounring The Authority uses fun ort on its financial position and its cash flows. Fund accounting is designed to demonstrate='#egal compliance and to aid £nancial management by segregating transactions related to certain functions or activities. A fund is a separate accounting entity with a self-balancing set of accounu. The Authority is classified as a proprietary fund. This fund rype accouau for operations that are organized to be self-supporting through user chazges. The fund included in this category is an enterprise fund. Enterprise funds are used to account for operations that are financed and operated in a manner similaz to private business enterprises, where ent of the goveming body is that costs of providing goods or services to the general ; on~a continuing basis be financed or recovered primazily through user charges. Basis of Accounting Basis of accounting refers to when revenues and expenditures/expenses aze recognized in the accounts and reported in the financial statemenu. The accounting and financial reporting treatment applied to a fund is determined by iu measurement focus. ~ The proprietary fund is accounted for on a flow of economic reso ~easurement focus. W ith this measurement focus, all asseu and all liabilities associated e operation of these funds are included on the balance sheet. Proprietary fund-type operati statements present increases (e.g., revenues) and decreases (e.g. expenses) in net total assets. WHEAT RIDGE I10USIt\ • AUTH ,.i"I Y NOTES TO FINANCIAL -IATEn' XlS December 31, _'~03 NOTE 1: SUMMAR) OFSIGNIFICANTACCOUN7,1'GPOI l'"I_F,S(Continued) Basis of Ac! unting (Contli;ued) - ' Theaccruali sisofaccountingisutilizedbyti ^roprie . + indtype. Under this method, revenues ` are recordeo ~~hen earned a id expenses are n:, rded ai 'ic time liabilities are incurred. The Authorv_ has elected not to apply Financ„I Accoo ting Standards Boazd (FASB) statements and interpre': tions issued after November 30. 989. Budgets an,: Budgetary Accountinh The Aut*"'Prepares anncal budgets for ma .:ement oses. However, because the Authority . is fequired to budget its activities, r~ budget: ti-,atements are presented in the financial statemiitis` Encumbrances Encumbrancr accounting is not utilized. Risk Manarement The Authori;y is exposed t risks of lo;s related !o torts; thefr of, damage to, and destruction of asseu; errors and o nd natural disasters. The Authority carries commercial insurance for properry-related risks ' oss during the rehabilitation phase of the projects. Cash and Inrestments Cash equiv,::ents are defined as investments v,ith an ; itinal maturity of three months or less. Investments :re recorded at fair value. PropertyH, idForResale , t, ; Property held for resale includes the purclpiie ^:n~ reha. : i:ation costs of imestment property, and is recorded cost. NOTE2: DEVELOP.'!F.NTPROJECTS During 200 i. the Authoriry purchased a foun::n (14) c ofestablishinzandprovidin,ahomeownershorograc Ridge. The '+uthoriry rehabilitated the units' resale December = i, 2003, the remaining units w~re sold : $129,000. 7 iie average per unit cost to the Au;hority, mt commissiom. was $132,566. The resulting lo> s on the F. year ended 1%ecember 31, 2003 of $8,810. i ccIndominium complex for the purpose ~ Iow-income residents ofthe City Wheat ,1~.ialified,~ers. During the yeaz ended ,:,les s ranging from $125,000 to ud' urchase, rehabilitation and broker J cct was $65,861, including a loss for the 6 WHEAT RIDGE HOUSING AUTHORITY NOTES TO FINANCIAL STATEMENTS December 31, 2003 NOTE 2: DEVELOPMENT PROJECTS (Continued) During 2003, the Authoriry purchased a ten (10) unit condominium complex known as Camation Square to provide a homeownership program to low-income residents of the City of Wheat Ridge. The Authoriry rehabilitated the uniu for resale to qualified buyers. During the year ended December „`33Y 31, 2003, two units were sold at sales prices of $123,000 and $134,000. The average unit cost to the Authority, including purchase, rehabilitation and broker commissions was approximately 115,000, resulting in a loss of $3,476 for the year ended December 31, 2003. NOTE 3: CASH Cash Depa~it~4;, The Cqwado Public Deposit Protection Act (PDPA) requires that all units of local govemment deposit cash in eligible public depositories. Eligibility is determined by state regulations. Amounts on deposit in excess of federal insurance levels must be collateralized by eligible collateral determined by the PDPA. The institution is allowed to create a single coliateral pool for all public funds held. The pool is to be maintained by another institution or held in trust for all the uninsured public deposits as a group. The market value of the collateral must be at least equal to 102% of the uninsured deposiu. Deposits are categorize4to' -i ndication of risk assumed by the Authoriry at the end of the year. Category 1 includes at are insured, Category 2 includes collateralized deposits with securities held by the pinstitution's trust department or agent in the Authoriry's name, and Category 3 includes uncollateralized, uninsured deposiu. At December 31, 2003, the Authority's deposiu had a carrying balance of $533,786 and a corresponding bank balance as follows: Bank Balance Insured(Category 1) 100,000 Collateralized in Single Institution Pool(s) (~'2) 204.488 " Total Cash Deposiu $ 304.488 NOTE 4: PROPERTYHELD FOR RESALE Following is a summary of transactions related to the property held for resale for the year ended December 31, 2003. Balance Balance 12/31/02 Addition ~eletions 12/31/03 Purchase and Rehabilitation Costs of Investment Properry S369A39 $ 1000.680 S 596.854 S 773,665 WHEAT RIDGE HOUSING AUTHORITY NOTES TO F[NANCIAL STATEMENTS December 31, 2003 NOTES: LOANSRECEIVABLE During 2002, the Authority approvedloans,totaling$13,21Qtoassisttwohomeownerswithclosing h` costs related to their condominium purchases. One loan requires monthly payments of $50, including interest at 3.5% per annum, through September, 2012. The second loan requires one payment of $3,525, including interest at 3.5% per annum, due in October, 2007. These loans are secured by the condominium units. During 2003, the homeowners made principal payments totaling $247, resulting in a balance of $12,963 at December 31, 2003. NOTE 6: LOANPAYABLE Followi mmary of loan transactions for the year ended December 31, 2003. s Balance Balance 12/31/02 Additions Pavments 12/31/03 Loan Payable - Vectra Bank $ - $ 173,298 $ - $ 173,298 Loao Payable - Vectra Bank During 2003, the Authority o ined a$325,000 loan to provide short-term financing for rehabilitationof[heCamaf econdominiumcomplex. At December 31,2003, the Authority had drawn $173,298 ortt The loan accrues interest at 335% per annum and is secured by land and buildings. The An was paid in full on the maturity date, May 19, 2004. NOTE 7: COMMITMENTSAND CONTINGENCIES Management Agreement The Authority has a management agreement with efferson County Housing Authority (JCHA) for contracted services. Under the terms of Aeement, the Authoriry contracts for labor and expertise in housing authority managem ' o ration and administration, etc. The contracted services have been classified as functional expenses for better reporting purposes. Cooperatioo Agreement The Authority has entered into an agreement with the City of Wheat Ridge for contracted services. Under the terms of this agreement, the City will provide legal, planning, engineering services, etc., as deemed necessary by the Authority. Under the tenns of this ageement, the City Manager or his designee will act as the Executive Director of the Authority. WHEAT RIDGE HOUSING AUTHORITY NOTES TO FINANCIAL STATEMENTS December 31, 2003 NOTE 7: COMMITMENTSAND CONTINGENC/ES (Continued) Claims and Judgemeots : The Authoriry participates in federal programs that are fully or partially funded by grants received from other governmental units. Expenses financed by grants are subject to audit by the appropriate grantor government. If expenses are disallowed due to noncompliance with grant program regulations, the Authoriry may be required to reimburse the grantor govemment. As of December 31, 2003, significant amounts of grant expenses have not been audited bu[ the Authority bel ieves that subsequent audits will not have a material effect on the overall financial position of the Authority. Tabor AmeNlment Col xrs passed an amendment to the State Constitution, Article X, Section 20, which has severai initations, including revenue raising, spending abilities, and other specifc requirements of state and local government. The Amendment is complex and subject to judicial interpretation. Management believes the AuthoriTy is exempt from the provisions of the Amendment. wi, P~ May 21,.~'04 ~5 Board of Commissioners Wheat Ridge Housing Authoriry Wheat Ridge, Colorado We have audited the generl.p~fpose fnancial statements ofthe Wheat Ridge Housing Authority for the year ended December 31, 2003, " ued our report thereon dated May 21, 2004. Professional standards require that we provide you with th mg information related to our audit. T~;. Our Responsibility under Generally Accepted Auditing Standards As stated in our engagement letter, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the general purpose financial statements are free of material misstatement. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material erzors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be d,';~ d by us. - As part of our audit, we considered the ~n(it control of the Authority. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal conVol. Significant Accounting Policies Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness ofaccounting policies and their application. The significant accounting policies used by Authority are described in Note 1 to the general purpose financial statements. We noted no Vansactions entered in[o by th rity duringthe yearthat were both significant and unusual, and of which, under professional standazds, rquired to inform you, or transactions for which there is a lack of authoritative guidance or consensus. Significant Audit Adjustmenu For purposes of this letter, professional standards define a significant audit adjustment as a proposed wffection of the general purpose financial statements that, in our judgment, may not have been detected except through our auditing procedures. These adjustments may include those proposed by us but not recorded by the Authority that could potentially cause future financial statements to be materially misstated, even th"gh we have concluded that such adjustrnenu are not material to the current financial statements. We propos it adjustrnenu that could, inourjudgnent,eitherindividuallyorintheaggregate,haveasignifcanteffect Authority'sfnancialreporting process. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the general purpose financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course of our audit. Consul s with Other Independent Accountants In es, management may decide to consult with other accountants about auditing and accounting matters, si to obtaining a"second opinion" on certain situations. If a consultation involves application of an accounting principle to the Authority's financial statements or a determination of the type of auditors' opinion [hat may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowiedge, there were no such consultations with other accountanu. Issues Discussed Prior to Retention of Independent Auditors We generally discuss ` matters, including the application ofaccounting principles and auditing standards, with management e Q, prior to retention as the Authority's auditors. However, these discussions occurred in the normal course of o professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in performing our audit. Conclusion ;x We would like to thank Alan White and 11of ews for their assistance and cooperation during the audit. This information is intended solely for thethe Board of Commissioners and management ofthe Whea[ Ridge Housing Authoriry and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Swanhorst & Cutler LLC a. ~ . u 2 CARNATION SQUARE MARKETING STATUS Closed 12/31 Yes 1/ 2 M 3/13 Yes 4/30 Yes el 5/27 Yes No A-5 Lo z 7/19 No Yes B-3 Harrold 7/23 No Yes B-4 Meadows 7/30 No Yes B-5 Unsold No Yes 07120i04 Wheat Ridge Housing Authority Camation Project All Transactions Jul 18,'04 % o( Incane Ordinary ImomelExpense Income 500 • Sale of Units 770,761 100% SSO • Rmt 1,570 0% 518 - MiscelWneous Incane 50 0% Total incane 772,381 100% Cos[ of Goods Sold 565 • Purchau of Unks 789,000 102% 560 • Acquiction Appraisal Fees 550 0% 662 • Acquisitfons Costs 301 0% 664 • CDBG Grant -37 ,581 -4°b 666 • Condo Map 2,871 Q°M 566 • Conatruction Perfotl IMerest 1,375 0% 667 • Conatruction Period Maintenance 11,557 1% 568 • Construction ManagemeM 11,711 2% 668 • Envfronmental Study 1,530 0% 570. Garages 45,659 6% 671 • Homeownerc Association 2,000 0% SM • Loan Costs 6,401 7% 573 • Rehabilihdon - Appliances 19,377 3% 574 • Rehabiiitation - Cabinetc 20,050 3% 678 • ReAabilitafon - Electrical 19,935 3% 676 • Rehabilihdon - Exterior 45,451 6% $77 • Rehabilitation - Fioors 30,249 4% 578 • Rehabilkafon - Plunbing 65,086 8% fi78•Rehabililation-Struetunl 70,124 9% 680 • RehabilRation - Various 5,093 1% 581 • Supplies/Mataials 3,469 0% $82 • Title Insuraue 946 0% 585 • TNe Searches 265 0% 686 • Zonirg Appl'ication 300 0% 588 • Ending Cost oi Units -441,565 S7% Tota1COG5 680,154 88% Gross Profil 92.227 12% Expense 704 • Buyer Incen4ves 10,625 1% 705 • Cbsing Costs 4,169 1% Page 1 of 2 oinoioa Wheat Ridge Housing Authority Camation Project All Transactions Ju118,'W X ollncome 770 • Comnissions 32,335 760. AecounUng 3 Legal 1.024 0% 762•Bank Charges 2 0% 802 • Gardening 3 Mainlenance 2,010 0% 807 • Insuronce 8,891 1 % 825 • Oifice Supplies z a% 632•Postage 61 0% 843 • Repairs 766 0% 853 • Supplies 1,296 0% 857 • Taxes - Real Estate 389 0% 866 • Trash Removal 288 0% 872 • Utililies 5.352 1 % Total Enpense 67,210 9% Net Ordinary Ineome 25,017 3% Other IneomNExpense OtherExpense 910 • Interest Expense ToWlOtherExpence 7,134 0% 1,134 0% Net Other Income Net Income -1,134 -0% 23,863 3% Page 2 of 2