Page 41 - RFCUNY-2010AnnualReport

39

and guidance relating to the law and incorporate the latest thinking in future measurements.

(5) Deferred Revenue

At June 30, 2010 and 2009, cash advances for grants and contracts are for the following projects:

2010 2009 Research $11,969,473 10,971,043 Training 17,466,951 13,686,070 Academic development 26,487,214 23,072,478 Student services 6,939,089 6,811,528 Other 4,924,023 3,295,495

$67,786,750 57,836,614

(6) Commitments

(a) Rental Expenses under Operating Leases

During 2005, the Foundation relocated its headquar-ters from 555 West 57th Street to 230 West 41st Street. However, the Foundation is obligated under noncancelable operating leases at 555 West 57th Street as follows: Year ending June 30:

 2011 $1,023,977  2012 258,299

$1,282,276

 The Foundation also sublets, at a lower rate than its contractual lease rate, the leased space at 555 West 57th Street to CUNY. Net rent expense for the years ended June 30, 2010 and 2009 was $232,051 and $190,871, respectively.

(b) Rental Income under Operating Leases

Future minimum rental income under the LLC’s oper-ating lease is as follows:

2011 $ 7,774,191 2012 7,258,508 2013 7,084,831 2014 6,655,754 2015 5,856,810 Thereafter 16,322,876  Pursuant to the individual tenant leases, the tenants pay their allocable share of the costs of operating the Property, including real estate taxes, certain insur-ance premiums, and other expenses that are not included above. (c) Letter of Credit

In fiscal year 2008, the Foundation entered into an agreement with one of its health insurance carriers

whereby the Foundation is required to pay the carrier, in advance, for claims incurred but not reported in the event of plan termination. The carrier has allowed the Foundation to retain this payment, which totals $2,888,491 and is included as a component of accounts payable and accrued expenses on the accompanying consolidated balance sheet as of June 30, 2010, pro-vided that the funds are secured by an irrevocable letter of credit. The Foundation issued a letter of credit for $2,888,491 to the carrier, which expires on December 30, 2010.

(7) Rental Property

Rental property (93% occupied as of June 30, 2010) consists of the following at June 30, 2010 and 2009:

2010 2009 Land $ 9,037,040 9,037,040 Building 36,149,160 36,149,160 Building

 improvements 5,587,182 5,262,412 Tenant improvements 12,580,842 12,580,842   Total 63,354,224 63,029,454 Accumulated

 depreciation (10,315,627) (8,160,263)   Rental property,

 net $ 53,038,597 54,869,191

(8) Mortgage Loan Payable

On July 11, 2004, the LLC entered into a mortgage loan (the Loan) with a principal amount of $62 million, which matures on August 11, 2014. The Loan bears interest at a rate of 6.19% and is payable in monthly installments of interest only through August 2006; thereafter, principal and interest payments are due in equal monthly installments of $379,328. A balloon payment is due at maturity consisting of unpaid prin­ cipal of $55,184,007 and any accrued and unpaid interest.

 Under the terms of the Loan, the LLC is required to deposit monthly payments of $24,500 into escrow accounts maintained by the LLC consisting of escrow accounts for building capital expenditures and tenant improvements, leasing commissions, lease cancella-tion fees, and other leasing costs. Included in restricted cash in the accompanying consolidated balance sheet are balances in escrow accounts, including interest earned, of $2,594,005 as of June 30, 2010. In addi-tion, under the terms of the mortgage, the LLC is required to deposit monthly payments to escrow accounts maintained by the LLC for real estate taxes and insurance.