Louisville Housing Authority Agenda and Packet 2011 04 26

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aid , Boulder County Department of Housing & Human Services Date: April 26, 2011 To: LHA Board of Director's From: Vipheatra J Dana CC; Chuck Schloz, Frank Alexander, Jay Morein RE: ESLP, LSELP, and LHA The following memo details the preliminary audit findings for the 2010 ESLP and the 2010 LSELP as well as the recommendations of the BCHA Finance and Operations Division and outstanding items from the March 2011 LHA Board meeting. 2010 ESLP During the 2010 ESLP Audit it was determined that the operating reserve had a required minimum balance of $48,000. The operating reserve deficit is calculated to be $30,287, in addition per the US. Bank agreement there is an additional set aside requirement if the Debt Service Coverage Ratio (DSCR) falls below a minimum of 1.15 or the Loan to Value falls below 80 %. At the time of the audit the LTV ratio was met, however the DSCR was below the minimum 1.15 and there for triggered an additional set aside requirement of $14,680.65 (both are calculated on EXHIBIT I). According to the partnership agreement at Section 8.8 and 12.12 monies advanced to the Partnership can be structured as a loan and paid back to the LHA as the General Partner. The current unrestricted cash reserves for LHA are $617,749.08, this balance is made up of the following accounts (EXHIBIT II): CASH Balance Sheet Roll -Up Line # /GL Code Description 02- ? ?- ? ? ? ? - ? ? ?- 1111.000 Cash - Operating 02 ? ? - ? ? ? ? - ? ? ? - 1111.001 Cash Maint /Replacement Reserve 02 -01- 0000 -000 - 1111.005 Cash - LHA LB - 284 02 -01- 0000 -000 - 1111.010 L Cash Operating 1 Per GL Detail 5,980.41 608,647.62 2,000.00 1,121.05 During the 2010 ESLP Audit it was determined that the ESLP Promissory note had an incorrectly stated interest rate of one -half of one percent (.5 %). The note has been modified to correctly account for this error (EXHIBIT III). The 2010 ESLP preliminary audit (EXHIBIT IV) will be finalized with Clifton Gunderson, CPA's by April 30 per changes recommended by US Bank. 2010 LSELP No concerns during the audit. However, a minor change was requested by Enterprise Community Investments, Inc., to show vacancy loss broken out on the income statement as a percentage and dollar amount. This has been completed. Final reports have not yet been issued.