Independent Auditor s Report

Transcription

1 Combined Financial Statements Christian Care Retirement Apartments, Inc. Christian Care Assisted Living (Phoenix), Inc. Christian Care Mesa, Inc.

2 Table of Contents Independent Auditor s Report... 1 Combined Financial Statements... 3 Combined Statements of Financial Position... 3 Combined Statements of Activities... 4 Combined Statements of Cash Flows... 5 Notes to Combined Financial Statements... 7

3 Independent Auditor s Report Board of Directors Christian Care Retirement Apartments, Inc.; Phoenix, Arizona Report on the Financial Statements We have audited the accompanying combined financial statements of Christian Care Retirement Apartments, Inc.;, which comprise the combined statements of financial position as of, and the related combined statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits 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 combined financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion N. Central Ave., Ste. 400 Phoenix, AZ T F EOE 1

4 Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of Christian Care Retirement Apartments, Inc.; Christian Care Assisted Living (Phoenix), Inc.;, as of, and the results of their combined operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Phoenix, Arizona March 28,

5 Combined Statements of Financial Position Assets Cash and cash equivalents $ 161,722 $ 594,778 Tenant accounts receivable, net 227, ,321 Miscellaneous receivables 31,574 - Insurance proceeds receivable - 56,014 Prepaid expenses 183, ,864 Inventory 79,363 79,589 Restricted deposits under bond indenture 3,562,371 3,376,700 Property and equipment, net 20,310,868 20,795,328 Due from affiliates 5,225,305 3,386,527 Bond issuance costs, net of accumulated amortization of $704,527 in 2012 and $608,635 in ,132,912 2,228,804 Total assets $ 31,915,315 $ 30,996,925 Liabilities and Net Deficit Liabilities Accounts payable $ 325,775 $ 443,330 Accrued Expenses 571, ,528 Tenant security and reservation deposits 330, ,080 Deferred revenue - prepaid rent 36,348 17,261 Deferred revenue - insurance proceeds - 171,882 Notes payable 43,621 60,987 Bonds payable 32,080,000 32,880,000 Total liabilities 33,388,096 34,456,068 Net Assets (Deficit) Unrestricted Net Assets (Deficit) 1,160,735 (825,627) Unrestricted Net Deficit - Related to Refinancing (2,633,516) (2,633,516) Total net deficit (1,472,781) (3,459,143) Total liabilities and net deficit $ 31,915,315 $ 30,996,925 See Notes to Combined Financial Statements 3

6 2012 Temporarily Unrestricted Restricted Total Revenues, gains, and other support Tenant rental and service income $ 15,872,187 $ - $ 15,872,187 Financial income Contributions 53,547-53,547 Insurance proceeds - storm damage 303, ,461 Other income 1,223-1,223 Total revenues, gains, and other support before net assets released from restriction 16,231,376-16,231,376 Satisfaction of purpose restrictions Total revenues, gains, and other support 16,231,376-16,231,376 Expenses Operating 9,483,416-9,483,416 Administrative 2,678,565-2,678,565 Financial expenses 789, ,480 Loss on disposal 142, ,678 Depreciation and amortization 1,150,875-1,150,875 Total expenses 14,245,014-14,245,014 Revenues in Excess of Expenses and Change in Net Assets (Deficit) 1,986,362-1,986,362 Net Deficit, Beginning of Year (3,459,143) - (3,459,143) Net Deficit, End of Year $ (1,472,781) $ - $ (1,472,781) See Notes to Combined Financial Statements

7 Combined Statements of Activities Years Ended 2011 Temporarily Unrestricted Restricted Total $ 15,170,033 $ - $ 15,170,033 2,102-2,102 15,969-15, , ,818 1,798-1,798 15,346,720-15,346, (901) - 15,347,621 (901) 15,346,720 8,889,753-8,889,753 2,604,024-2,604, , ,475 10,094 10,094 1,145,480-1,145,480 13,381,826-13,381,826 1,965,795 (901) 1,964,894 (5,424,938) 901 (5,424,037) $ (3,459,143) $ - $ (3,459,143) 4

8 Combined Statements of Cash Flows Years Ended Cash Flows Provided by Operating Activities Change in net assets $ 1,986,362 $ 1,964,894 Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 1,054,983 1,008,255 Amortization of bond issuance costs 95, ,225 Loss on disposal of property and equipment 142,678 10,094 Decrease (increase) in Tenant accounts receivable, net 17,390 (67,953) Miscellaneous receivables (31,574) - Prepaid expenses 50,595 (5,473) Inventory 226 (2,000) Due from affiliates 65,159 56,312 Increase (decrease) in Accounts payable (117,555) 63,837 Accrued expenses 26,344 43,279 Tenant deposits (6,600) (18,550) Deferred revenue - prepaid rent 19,087 (7,096) Total adjustments 1,316,625 1,217,930 Net Cash Provided by Operating Activities 3,302,987 3,182,824 Cash Flows Used in Investing Activities Increase in restricted deposits under bond indenture (185,671) (278,543) Purchase of property and equipment (713,201) (446,534) Net Cash Used in Investing Activities (898,872) (725,077) Cash Flows Used in Financing Activities Financing activities with affiliates (1,903,937) (1,459,219) Insurance proceeds receivable 56,014 (56,014) Deferred revenue - insurance proceeds (171,882) 171,882 Payments on notes payable (17,366) (16,797) Retirement of bond principal (800,000) (765,000) Bond issuance costs - (36,988) Issuance of long-term debt - 54,804 Net Cash Used in Financing Activities (2,837,171) (2,107,332) Net Increase (Decrease) in Cash and Cash Equivalents (433,056) 350,415 Cash and Cash Equivalents, Beginning of Year 594, ,363 Cash and Cash Equivalents, End of Year $ 161,722 $ 594,778 See Notes to Combined Financial Statements 5

9 Combined Statements of Cash Flows Supplemental Disclosures of Cash Flows Information Cash paid during the year for interest $ 393,161 $ 410,064 See Notes to Combined Financial Statements 6

10 Notes to Combined Financial Statements Note 1 - Nature of Operations and Significant Accounting Policies These combined financial statements include the amounts of Christian Care Retirement Apartments, Inc.; (the Organizations). All significant intercompany transactions have been eliminated in the preparation of the combined financial statements. Christian Care Retirement Apartments, Inc. operates a 265-unit apartment complex with services in Phoenix, Arizona for low to middle income seniors. Significant rental operations began in April Christian Care Assisted Living (Phoenix), Inc. operates a 40-unit assisted living complex in Phoenix, Arizona for the low to middle income seniors. Significant rental operations began in March Christian Care Mesa, Inc. operates a 194-unit apartment complex with services and a 42-unit assisted living complex for low to middle income seniors. Both complexes are located in Mesa, Arizona. Significant rental operations began in May Basis of Accounting and Presentation The combined financial statement presentation of the Organizations is prepared on the accrual basis and accordingly reflects all significant receivables, payables, and other liabilities. The Organizations report information regarding their financial position and activities according to three classes of net assets: unrestricted net assets, temporary restricted net assets, and permanently restricted net assets. Cash and Cash Equivalents The Organizations consider all highly-liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents excluding deposits restricted under bond indentures. The Organizations maintain cash in banks which, at times, may exceed federally insured limits. Tenant Accounts Receivable Accounts receivable are primarily non-interest bearing amounts due from third party insurance providers for certain services provided for residents. Certain receivables are uncollateralized resident obligations, due for services rendered. Payments of accounts receivable are allocated to the specific invoices identified on a resident or third party remittance advice or applied to the earliest unpaid claim. The carrying amount of accounts receivable may be reduced by a valuation allowance that reflects management s best estimate of uncollectible amounts. Management reviews all accounts receivable balances that exceed thirty days from the invoice date, and based on an assessment of creditworthiness, estimates the portion, if any, of the balance that will not be collected. As of the allowance for uncollectible accounts was $12,000 and $0, respectively. Inventory Inventory is stated at the lower of cost or market using the FIFO (first in, first out) method. As of December 31, 2012 and 2011, inventory consisted of food and gift shop items. 7

11 Notes to Combined Financial Statements Investments The Organizations have adopted generally accepted accounting principles in which investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the combined statements of financial position. Material unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are reported as increases in unrestricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized. Fair Value Measurements The Organizations have determined the fair value of certain assets and liabilities in accordance with the provisions of generally accepted accounting principles, which provides a framework for measuring fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established, which prioritizes the valuation inputs into three broad levels. Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the related asset or liability. Level 3 inputs are unobservable inputs related to the asset or liability. The Organizations determine the fair value measurement valuation policies and procedures, including those for Level 3 recurring measurements. The Organizations determine if the current valuation techniques used in fair value measurements are still appropriate and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Fair Value of Financial Instruments Generally accepted accounting principles require disclosure of an estimate of fair value of certain financial instruments. The Organization s significant financial instruments include bonds payable. For these financial instruments, carrying values approximate fair value. Bond Issuance Costs Bond issuance costs are comprised of the cost to issue the original bonds and costs associated with remarketing the bonds in These costs are being amortized on a straight-line basis over the bond term Interest Rate Cap The costs associated with obtaining the interest rate cap, effective December 31, 2010 (see Note 6), are included in prepaid expenses on the Statement of Financial Position. These costs are being amortized over a period of 5 years (the duration of the cap agreement). 8

12 Notes to Combined Financial Statements Property and Equipment Property and equipment acquisitions are recorded at cost, if purchased, or at estimated fair market value if received as a donation. Additions, renewals, and betterments greater than $1,000 are generally capitalized, whereas expenditures for maintenance and repairs are charged to expense. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets. The Organizations review their property and equipment whenever events indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recorded when the sum of the future cash flows is less than the carrying amount of the asset. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. No impairment loss was recorded for property and equipment for the years ended. Resident Revenues Resident revenues are recorded at amounts billed to and paid by residents at rates established by management after market studies are performed. The rates are approved by the board during the budgeting process. The tenant rental leases or residency agreements in assisted living expire on various dates depending on the lease term, which can vary from 30 days to one year. After expiration of the initial lease term, the lease is normally renewed annually for the residential living apartment units and month to month for the assisted living units. Revenues in Excess of Expenses Revenues in excess of expenses excludes unrealized gains and losses on investments, transfers of assets to and from related parties for other than goods and services, and contributions of long-lived assets, including assets acquired using contributions which were restricted by donors. Contributions The Organizations account for contributions using generally accepted accounting principles in which contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions. Recognition of Donor Restricted Contributions Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 and those differences could be material. 9

13 Notes to Combined Financial Statements Advertising Advertising costs are expensed as incurred. Advertising expense was approximately $142,962 and $127,542 for the years ended, respectively. Income Taxes The Organization is organized as an Arizona non-profit corporation and has been recognized by the Internal Revenue Service (IRS) as exempt from federal income taxes under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3), qualifies for the charitable contribution deduction under Section 170(b)(1)(A)(vi) and (viii), and has been determined not to be private foundations under Sections 509(a)(1) and (3), respectively. The entity is annually required to file a Return of Organization Exempt from Income Tax (Form 990) with the IRS. In addition, the entity is subject to income tax on net income that is derived from business activities that are unrelated to their exempt purposes. The entity has determined it is not subject to unrelated business income tax and has not filed an Exempt Organization Business Income Tax Return (Form 990- T) with the IRS. The entity believes that it has appropriate support for any tax positions taken affecting its annual filing requirements, and as such, does not have any uncertain tax positions that are material to the financial statements. The entity would recognize future accrued interest and penalties related to unrecognized tax benefits and liabilities in income tax expense if such interest and penalties are incurred. Functional Expenses The costs of providing various programs and other activities are summarized on a functional basis as follows for December 31: Program $ 11,566,449 $ 10,777,802 Administration 2,678,565 2,604,024 Total Expenses $ 14,245,014 $ 13,381,826 Reclassifications Certain reclassifications have been made to the 2011 financial statements to conform to the 2012 presentation. These reclassifications had no effect on the change in net assets Subsequent Events The Organization has evaluated subsequent events through March 28, 2013, the date which the financial statements were available to be issued. 10

14 Notes to Combined Financial Statements Note 2 - Related Party Transactions The Organizations are components of the Christian Care Companies. The Christian Care Companies are comprised of non-profit corporations sponsored by the non-denominational Christian Churches of Arizona. The corporations are governed by a common Board of Directors and share administrative facilities and employees. Related entities include the following: Christian Care Foundation; Christian Care Management, Inc.; Christian Care Holding Company; Christian Care Foundation; Christian Care Tucson, Inc.; Christian Care Mesa II, Inc.; Christian Care Mesa III, Inc.; Christian Care Nursing Center, Inc.; Christian Care Manor I, Inc.; Christian Care Manor II, Inc.; Christian Care Manor III, Inc.; Christian Housing Mesa, Inc.; Christian Housing Cottonwood, Inc.; Christian Care Cottonwood, Inc.; Christian Care Cottonwood III, Inc.; Christian Care Cottonwood IV, Inc.; Christian Care Cottonwood V, Inc.; Christian Care Cottonwood VI, Inc.; Christian Care Cottonwood VII, Inc.; and Christian Care Cottonwood VIII, Inc. The Organizations and Christian Care Management, Inc. entered into a management agreement under which the Organizations are to pay management fees to Christian Care Management, Inc. of 5% of each organization s gross receipts, subject to restrictions imposed by bond covenants. During 2012 and 2011, $795,096 and $763,792, respectively, was paid in management fees. In the normal course of business, the Organizations can repay shared expenses paid on their behalf and short-term advances extended by the HC, and receive payments for shared expenses paid from and to MGT, HC, and Christian Care Mesa II, Inc.; Christian Care Tucson, Inc.; and Christian Care Foundation. The payroll for employees working on the Organizations campuses is paid through MGT. If the Organization needs cash during the month, it is advanced by HC. Shared expenses are repaid monthly. In 2012 and 2011, expenses including payroll paid by affiliates on the Organizations behalf, totaled $7,864,824 and $7,341,547, respectively. Expenses paid by the Organizations on behalf of affiliates totaled $474,447 and $463,421, respectively. Net cash was advanced from the Organizations to affiliates in 2012 and 2011 totaling $1,796,118 and $1,501,348, respectively. Net cash advanced to the Organizations from affiliates in 2012 and 2011 totaled $84,000 and $42,129, respectively. Note 3 - Restricted Deposits Under Bond Indenture As a requirement of the 2005 Senior Living Facilities Revenue Bonds (see Note 6) certain trustee-held funds were established. Their use is restricted to retiring bond principal and interest, operating reserve, bond reserve, and funding for various items. The reserve funds consist of cash held by the trustee and may exceed federally insured limits at times. 11

15 Notes to Combined Financial Statements The balances of the funds were as follows as of December 31: Operating reserve fund $ 1,944,816 $ 1,744,635 Subordinate bond reserve fund 864, ,320 Debt service interest funds 139, ,870 Debt service principal fund 245, ,416 Capital and maintenance fund 79, ,210 Tax and insurance escrow fund 200, ,067 Other funds 88, ,182 The above funds were held as follows at December 31: $ 3,562,371 $ 3,376,700 Wells Fargo Treasury money market funds $ 3,562,371 $ 3,376,700 Note 4 - Property and Equipment The balances of major classes of property and equipment were as follows at December 31: Land and improvements $ 2,680,345 $ 2,629,862 Construction in Progress 18, Buildings 31,165,717 30,918,106 Building equipment 1,803,188 1,727,459 Furniture and fixtures 467, ,964 Vehicles 378, ,502 Computers and equipment 374, ,219 36,888,065 36,477,217 Accumulated depreciation (16,577,197) (15,681,889) $ 20,310,868 $ 20,795,328 Depreciation expense charged to operations was $1,054,983 and $1,008,255 for 2012 and 2011, respectively. Substantially all of the property and equipment has been pledged as collateral with regard to the bonds payable (see Note 6). 12

16 Notes to Combined Financial Statements Note 5 - Notes Payable Notes payable consisted of the following at December 31: Vehicle loan, payable in monthly installments of $939, including interest at 5.75%, due October 2016, collateralized $ 39,311 $ 47,292 by the vehicle. Other 4,310 13,695 Total notes payable $ 43,621 $ 60,987 Future minimum payments on the notes are as follows at December 31, 2012: 2013 $ 12, , , ,835 $ 43,621 Note 6 - Bonds Payable During 2005, the Industrial Development Authority of the County of Maricopa, Arizona (Maricopa IDA) issued Adjustable Rate Senior Living Facilities Revenue Refunding Bonds (Christian Care Retirement Apartments, Inc.), Series 2005A in the amount of $30,750,000. The Maricopa IDA also issued Subordinate Senior Living Facilities Revenue Refunding Bonds (Christian Care Retirement Apartments), Series 2005B in the amount of $7,600,000. The Series 2005A Bonds were issued for the purpose of refinancing three multifamily rental housing projects, one in Mesa, Arizona, and two in Phoenix, Arizona. The bonds are subject to optional and mandatory redemption and to mandatory tender prior to maturity as described in the bond documents. The bonds are secured by the real and personal property of the Organizations. From September 28, 2005 to December 15, 2010, the bonds bore interest at the Initial Reset Rate and were to be converted to a weekly variable rate, subject to terms and conditions of the Indenture. During the Initial Reset Period, the bonds bore interest at a rate of 4.855%, interest was payable semiannually on December 15 and June 15 each year, and the first payment commenced on December 15, On December 15, 2010, the outstanding senior bonds in the amount of $28,700,000 were converted from a fixed rate to a weekly variable rate based on the auction of Fannie Mae 7-day paper. Weekly rates are capped at a maximum of 6% through December 15, Additional interest related costs of about 1.6% are incurred monthly for guarantee, servicing, liquidity, remarketing, interest rate cap amortization, and related fees. As of, the bonds are being redeemed in increments of $100,000 as principal redemption funds are available. 13

17 Notes to Combined Financial Statements The Series 2005B Bonds were issued to Christian Care Retirement Apartments, Inc., Christian Care Assisted Living (Phoenix), Inc.; for the purpose of providing funds for a portion of the cost of (i) refunding certain prior bonds issued to finance the costs of equipping: (a) a 265-unit senior living facility located at 2002 West Sunnyside Drive, Phoenix, Arizona; (b) a 40-unit assisted living facility at N. 19th Avenue in Phoenix, Arizona; and (c) a 42-unit assisted living facility and a 194-unit senior living facility located at 6945 East Main Street, Mesa, Arizona; (ii) to fund a debt service reserve related to the Subordinate Bonds; (iii) to fund an operating reserve; and (iv) to pay certain costs of issuing the Subordinate Bonds. The bonds are subject to mandatory sinking fund requirements, extraordinary and optional redemption prior to their stated maturity date and are secured by the real and personal property of the Organizations. Interest is payable semiannually on January 1 and July 1 each year, and the first payment commenced on January 1, The bonds principal amounts, interest rates, and maturities are as follows at December 31: Series 2005A bonds, at variable rates capped at 6%, maturity date of September 15, Interest rate at $ 27,800,000 $ 28,300,000 December 31, 2012 was 0.13% Series 2005B bonds, at 6.5%, maturity date of January 1, ,280,000 4,580,000 $ 32,080,000 $ 32,880,000 The loan agreements obligate the Organizations to pay to a trustee, for the account of the issuer, ratable monthly payments equal to the amounts required to pay the interest coming due on each interest payment date with respect to the bonds, plus the principal amounts on the bonds maturing or required to be redeemed, as defined. Future minimum payments on the bonds are as follows at December 31, 2012: 2013 $ 720, , , , ,000 Thereafter 28,355,000 $ 32,080,000 Under the terms of the bond agreements, the Organizations are required to (i) maintain a debt service coverage ratio of at least 1.20 to 1, (ii) make monthly payments to specified reserve accounts, and (iii) attain minimum occupancy percentages of 85%. The loan agreement also requires the furnishing of periodic financial statements and reports, maintenance of continuous insurance coverage, restrictions as to disposition of assets, and other conditions. As of December 31, 2012, the Organizations were in compliance with these covenants. Under the terms of the Series 2005 regulatory agreement, at least 20% of the rental units of the Organizations are required to be rented to individuals whose income is 60% or less of area median income (adjusted for family size), as determined by the United States Department of Housing and Urban Development under Section 8 of the Housing Act of 1937, as amended. 14

18 Notes to Combined Financial Statements Note 7 - Revolving Line of Credit During 2012, Christian Care Retirement Apartments, Inc. obtained a $400,000 unsecured revolving line of credit with a financial institution. At December 31, 2012, the maximum amount available to borrow under the agreement was $400,000, with no amounts owed. The line of credit bears interest at the prime rate plus 1.0% (4.25% at December 31, 2012) or 5.0%, whichever is greater. This agreement matured January 18, 2013 and was renewed for one year with a new maturity date of June 18, The line of credit is guaranteed by Christian Care Holding Company, a related party. Note 8 - Employees Tax Deferred Annuity Program The Organizations have a tax-deferred annuity program under Section 403(b) of the Internal Revenue Code. An employee is eligible to voluntarily participate in the plan if they are scheduled to work at least 20 hours per week. In addition, once an employee reaches age 18 and has one year of service, the Organizations will begin making matching contributions. The Organizations will match 100% of qualified employees contributions up to 3% of the employees gross pay. The total annual maximum amount that can be contributed, including both employees and employer s contribution, is 25% of the employees pay. The contribution charged to expense for the years ended was $71,748 and $28,787, respectively. The employer match that was temporarily suspended during 2009 was reinstated as of July 1, Note 9 - Property Taxes The Organizations have an agreement with Maricopa County for an exemption from property taxes. The Organizations apply annually for the exemption. 15