SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Exchange Act of 1934
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal year ended December 31, 2005
Commission file number 0-11578
AMERICAN REPUBLIC REALTY FUND I
(Exact name of registrant as specified in its charter)
Wisconsin 39-1421936
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2800 N Dallas Pkwy #100, Plano, Texas 75093-5994
Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including area code (972) 836-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
None None
Securities registered pursuant to Section 12 (g) of the Act:
Limited Partnership Interests
(Title of Class)
Indicated by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X . No ___.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained, to the best of
Registrant's knowledge in definitive proxy on information to
statements incorporated by reference in Part III of the Form 10-K
or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).
Yes___ No X.
Documents Incorporated by Reference
The Definitive Prospectus of American Republic Realty Fund I dated May
2, 1983 filed pursuant to Rule 424(b) is incorporated by reference
as is the Supplement to that Prospectus filed pursuant to Rule
424(b) on May 25, 1984.
PART I
Item 1. Business
The Registrant, American Republic Realty Fund I, (the
"Partnership"), is a limited partnership organized under the
Wisconsin Uniform Limited Partnership Act pursuant to a Certificate
of Limited Partnership dated December 22, 1982. As of December 31,
2005, the Partnership consisted of an individual general partner,
Mr. Robert J. Werra, (the "General Partner") and 625 limited
partners owning 11,000 limited partnership interests at $1,000 per
interest. The distribution of limited partnership interests
commenced May 2, 1983 and ended April 17, 1984, pursuant to a
Registration Statement on Form S-11 under the Securities Act of
1933 (Registration #0-11578) as amended.
The Partnership was organized to acquire a diversified portfolio of
income-producing real properties, primarily apartments, as well as
office buildings, industrial buildings, and other similar
properties.
During 1983 and 1984, the Partnership acquired four properties:
Kenwood Gardens Apartments, a 104 unit apartment community located
in Fort Myers, Florida (acquired on September 1, 1983, subsequently
disposed of by sale during 1988), Jupiter Plaza Office/Showroom, a
131,440 rentable square foot commercial building located in
Garland, Texas (acquired on September 29, 1983, subsequently
disposed of in foreclosure during 1988), Four Winds Apartments, a
154 unit apartment community located in Orange Park, Florida (Phase
I acquired September 12, 1983 and Phase II acquired May 1, 1984)
and Forestwood Apartments (formerly Oak Creek) a 263 unit apartment
community located in Bedford, Texas (acquired December 20, 1983).
No additional properties were purchased by the Partnership and the
Partnership will not acquire additional properties in the future.
The properties remaining are described more fully in this report at
"Item 2. Properties".
Univesco, Inc.("Univesco"), a Texas corporation, eighty three
percent owned by Robert J. Werra ("Univesco") manages the affairs
of the Partnership. Univesco acts as the managing agent with
respect to the Partnership's properties. Univesco may also engage
other on-site property managers and other agents to the extent the
management considers appropriate. The General Partner has ultimate
authority regarding property management decisions.
The Partnership competes in the residential rental markets.
Univesco prepared marketing analyses for all property areas and
determined that these areas contain other like properties which are
considered competitive on the basis of location, amenities and
rental rates. It is realistic to assume that additional properties
similar to the foregoing will be constructed within their various
market areas.
No material expenditure has been made or is anticipated for either
Partnership-sponsored or consumer research and development
activities relating to the development or improvement of facilities
or services provided by the Partnership. There neither has been,
nor are any anticipated, material expenditures required to comply
with any federal, state, or local environmental provisions which
would materially affect the earnings or competitive position of the
Partnership.
The Partnership is engaged solely in the business of real estate
investments. Its business is believed by management to fall
entirely within a single industry segment. Management does not
anticipate that there will be any material seasonal effects upon
the operation of the Partnership.
Competition and Other Factors
The majority of the Properties' leases are six to twelve month
terms. Accordingly, operating income is highly susceptible to
changing market conditions. Occupancy and local market rents are
driven by general market conditions which include job creation, new
construction of single and multi-family projects, and demolition
and other reduction in net supply of apartment units.
Rents have generally been increasing in recent years due to the
generally positive relationship between apartment unit supply and
demand in the Partnership's markets. However, the properties are
subject to substantial competition from similar and often newer
properties in the vicinity in which they are located. In addition,
operating expenses and capitalized expenditures have increased as
units are updated and made more competitive in the market place.
(See Item 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations".)
Item 2. Properties
At December 31, 2005 the Partnership owned two properties with
approximately 416,623 net rentable square feet. Both properties are
apartment communities.
Name and Location General Description of the Property
Forestwood A fee simple interest in a 263-unit
Apartments apartment community located in
Bedford, Texas, purchased in 1983
containing 244,407 net rentable
square feet on approximately 14
acres of land.
Four Winds Apartments A fee simple interest in a 100-unit
Phase I community, located in Orange Park,
Florida, purchased in 1983,
containing approximately 110,716 net
rentable square feet on 10 acres of
land.
Four Winds Apartments A fee simple interest in a 54-unit
Phase II apartment community located in
Orange Park, Florida, adjacent to
four Winds Apartments I, purchased
in 1984 and containing approximately
61,500 net rentable square feet on
3.73 acres of land.
Occupancy Rates
December 31,
Percent
2001 2002 2003 2004 2005
Four Winds I & II 95.2% 89.6% 94.2% 81.8% 95.5%
Forestwood 95.9% 93.2% 84.4% 90.9% 84.8%
The Properties are encumbered by non-recourse mortgages payable.
For information regarding the encumbrances to which the properties
are subject and the status of the related mortgage loans, see
"Management's Discussion and Analysis of Financial Condition and
Results of Operating - Liquidity and Capital Resources" contained
in Item 7 hereof and Note B to the Financial Statements contained
in Item 8.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the unit holders of the
Partnership during the fourth quarter of 2005.
By virtue of its organization as a limited partnership, the
Partnership has outstanding no securities possessing traditional
voting rights. However, as provided and qualified in the Limited
Partnership Agreement, limited partners have voting rights for,
among other things, the removal of the General Partner and
dissolution of the Partnership.
PART II
Item 5. Market for the Partnership's Securities and Related Unit
Holder Matters
The Partnership's outstanding securities are in the form of Limited
Partnership Interests ("Interests"). The distribution period for
the sale of the Interests began May 2, 1983, and closed April 17,
1984. As of December 31, 2005 there were approximately 625 limited
partners owning 11,000 limited partnership interests at $1,000 per
interest. A public market for trading Interests has not developed
and none is expected to develop. In addition, transfer of an
Interest is restricted pursuant to the Limited Partnership
Agreement.
Although a public market for trading Interests has not developed,
MP Value Fund 5, LLC acquired 1,444.5 units, approximately 13.1%,
of the outstanding Interests of the partnership during, 1999.
During 2003 MP Value Fund 5, LLC transferred these units to Branzan
Alternative Investment Fund LLLC. On October 25, 2004 these units
were transferred to Everest Management. As of December 31, 2005
Everest Management owns 3,318.5 units or 30.2% of the outstanding
interests of the partnership. During 2002 and 2003 Equity Resources
acquired 617.5 units or 5.6% of the fund. The registrant knows of
no other activity involving the sale or acquisition of Interests.
The General Partner continues to review the Partnership's ability
to make distributions on a quarter-by-quarter basis, however, no
such distributions have been made and none are anticipated in the
immediate future due to the debt service requirements of the
Partnership.
An analysis of taxable income or (loss) allocated, and cash
distributed to Investors per $1,000 unit is as follows:
YEARS INCOME GAIN LOSS CASH
DISTRIBUTED
1984 $0 $0 $342 $0
1985 0 0 $291 0
1986 0 0 $271 0
1987 0 0 $279 0
1988 0 $43 $63 0
1989 0 $38 $127 0
1990 0 0 $126 0
1991 0 0 $122 0
1992 $121 0 0 0
1993 $2 $1,071 0 0
1994 $17 0 0 0
1995 0 (a) 0 0 0
1996 $45 0 0 0
1997 $0 0 $70 0
1998 $0 0 $48 0
1999 0 0 39 0
2000 $46 0
2001 $47 $50
2002 $29 $25
2003 $15 $0
2004 $1 $0
2005 $12 $0
(a) For Federal Income Tax purposes income only was reallocated in
accordance with the regulations promulgated thereunder of the
Internal Revenue code of 1986 as amended.
Item 6: Selected Financial Data
The following table sets forth selected financial data regarding the
Partnership's results of operations and financial position as of
the dates indicated. This information should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in Item 7 hereof and Financial
Statements and notes thereto contained in Item 8.
2005 2004 2003 2002 2001
Limited Partner Units Outstanding 11,000 11,000 11,000 11,000 11,000
Statement of Operations
Total Revenues $2,556 $2,490 $2,708 $2,760 $2,896
Net Income (Loss) (435) (485) (337) (217) (42)
Limited Partner Net Income
Loss per Unit-Basic (39.16 )(43.73) (30.30) (19.54) (3.45)
Cash Distributions to Limited
Partners per Unit - Basic 0 0 0 25 50
Balance Sheet:
Real Estate, net $3,773 $4,248 $4,825 $5,382 $5,943
Total Assets 4,570 5,160 5,812 6,305 6,941
Mortgages Payable 9,754 9,919 10,071 10,211 10,341
Partner's Deficit (5,574) (5,139) (4,653) (4,316) (3,824)
Item 7. Management's Discussion and Analysis of Financial Conditions
and Results of Operations
This discussion should be read in conjunction with Item 6 -
"Selected Financial Data" and Item 8 - "Financial Statements and
Supplemental Information."
Results of Operations: 2005 VERSUS 2004 -
Revenue from Property Operations increased $66,379 or 2.7% as
compared to 2004. This increase is primarily attributed to a
$57,100 increase in rental revenue, which was principally due to an
increase in rental rates. The increase in other revenue of
$9,279 was principally caused by an increase in fees from tenants.
The following table illustrates the increases:
Increase
Rental income $57,100
Fees & Other 9,279
Net Increase $66,379
Property operating expenses for 2005 increased $30,359 or 1.4%.
Utilities increased $26,770 or 12.05% primarily due to higher gas
rates. Real estate taxes increased $13,965 or 5.05% due to higher
assessed valuations. General and administrative expenses decreased
$30,335 or 5.36% primarily due to decreased insurance costs.
Maintenance and repairs increased $13,762 or 4.8% due primarily to
deferred maintenance projects performed. Administrative service
fees are paid to an affiliate of the general partner and represent
reimbursements for accounting and bookkeeping costs. Property
management fees are paid to an affiliated entity and represent
approximately 5% of gross revenues (see Note C to the Financial
Statements and Schedule Index contained in Item 8). The following
table illustrates the increases or (decreases):
Increase
(Decrease)
Utilities 26,770
Real estate taxes 13,965
Property management fee to affiliate 3342
Depreciation and amortizatio 4,777
General and administrative (30,335)
Advertising and marketing (1,922)
Maintenance and repairs 13,762
Net Increase 30,359
Results of Operations: 2004 VERSUS 2003 -
Revenue from Property Operations decreased $218,303 or 8.3% as
compared to 2003. This decrease is primarily attributed to a
$217,205 decrease in rental revenue, which was principally due to a
decrease in occupancy. The decrease in other revenues of $1,098
was principally caused by a decrease in fees from tenants. The
following table illustrates the decreases:
(Decrease)
Rental income $(217,205)
Fees & Other (1,098)
Net Decrease $(218,303)
Property operating expenses for 2004 decreased $58,425 or 2.6%.
General and administrative expenses increased $18,912 or 3.46%
primarily due to increased insurance costs. Maintenance and
repairs decreased $46,087 or 13.77% due primarily to the decrease
in deferred maintenance projects. Utilities increased $7,177 or
3.34% primarily due to higher gas rates. Administrative service
fees are paid to an affiliate of the general partner and
represent reimbursements for accounting and bookkeeping costs.
Property management fees are paid to an affiliated entity and
represent approximately 5% of gross revenues (see Note C to the
Financial Statements and Schedule Index contained in Item 8). The
following table illustrates the increases or (decreases):
Increase
(Decrease)
General and administrative 18,912
Real estate taxes (19,475)
Maintenance and repairs (46,087)
Depreciation and amortization (9,178)
Property management fee to affiliate (10,957)
Advertising and marketing 1,183
Utilities 7,177
Net Decrease (58,425)
Liquidity and Capital Resources
While it is the General Partner's primary intention to operate
and manage the existing real estate investments, the General
Partner also continually evaluates this investment in light of
current economic conditions and trends to determine if these
assets should be considered for disposal. At this time, there is
no plan to dispose of either Property.
As of December 31, 2005, the Partnership had $178,644 in cash and
cash equivalents as compared to $353,871 as of December 31, 2004.
The decrease of $175,227 cash on hand reflects the cash flow from
operations. See Note C to the Financial Statements contained in
Item 8 for information regarding related party transactions.
The properties are encumbered by two non-recourse mortgage notes
as of December 31, 2005. These mortgages payable have a carrying
value of $9,754,216 at December 31, 2005. The mortgage notes
were entered into during 1997 to refinance certain mortgage
notes.
For the foreseeable future, the Partnership anticipates that
mortgage principal payments (excluding any balloon mortgage
payments), improvements and capital expenditures will be funded
by net cash from operations. The primary source of capital to
fund balloon mortgage payments will be proceeds from the sale,
financing or refinancing of the Properties.
The Partnership's required principal payments due under the
stated terms of the Partnership's mortgage notes payable and
notes payable to affiliates are $177,870, and 9,576,346 for each
of the next two years.
Item 7a - Quantitative and Qualitative Disclosure about Market
Risk
Market Risk
The Partnership is exposed to interest rate changes primarily as
a result of its real estate mortgages. The Partnerships interest
rate risk management objective is to limit the impact of interest
rate changes on earnings and cash flows and to lower it's overall
borrowing costs. To achieve its objectives, the partnership
borrows primarily at fixed rates. The partnership does not enter
into derivative or interest rate transactions for any purpose.
The Partnerships' activities do not contain material risk due to
changes in general market conditions. The partnership invests
only in fully insured bank certificates of deposits, and mutual
funds investing in United States treasury obligations.
Risk Associated with Forward-Looking Statements Included in this
Form 10-KThis Form 10-K contains certain forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934, which are intended to be covered by the safe harbors
created thereby. These statements include the plans and
objectives of management for future operations, including plans
and objectives relating to capital expenditures and
rehabilitation costs on the Properties. The forward-looking
statements included herein are based on current expectations that
involve numerous risks and uncertainties. Assumptions relating
to the foregoing involve judgments with respect to, among other
things, future economic, competitive and market conditions and
future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the
control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could be inaccurate and,
therefore, there can be no assurance that the forward-looking
statements included in this Form 10-K will prove to be accurate.
In light of the significant uncertainties inherent in the forward-
looking statements included herein, the inclusion of such
information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the
Company will be achieved.
AMERICAN REPUBLIC REALTY FUND I
CONSOLIDATED FINANCIAL STATEMENTS
AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
December 31, 2005 and 2004
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm 2
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2005 and 2004 3
Consolidated Statements of Operations for the years ended
December 31, 2005, 2004 and 2003 4
Consolidated Statements of Partners' Equity (Deficit) for
the years ended December 31, 2005, 2004 and 2003 5
Consolidated Statements of Cash Flows for the years ended
December 31, 2005, 2004 and 2003 6
Notes to Consolidated Financial Statements 7
Schedule III - Real Estate and Accumulated Depreciation15
All other schedules have been omitted because they are not
applicable, not required or the information has been supplied
in the consolidated financial statements or notes thereto.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the General Partner and Limited Partners of
American Republic Realty Fund I
We have audited the accompanying consolidated balance sheets of
American Republic Realty Fund I and subsidiary, a Wisconsin
limited partnership (the "Partnership") as of December 31, 2005
and 2004, and the related consolidated statements of operations,
partners' equity (deficit), and cash flows for each of the years
in the three-year period ended December 31, 2005. These
consolidated financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. The
Partnership is not required to have, nor were we engaged to
perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
Partnership's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements, assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of American Republic Realty Fund I as of
December 31, 2005 and 2004, and the results of its operations and
its cash flows for each of the years in the three-year period
ended December 31, 2005 in conformity with accounting principles
generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the
basic consolidated financial statements taken as a whole.
Schedule III for the year ended December 31, 2005 is presented
for the purpose of complying with the Securities and Exchange
Commission's rules and is not a required part of the basic
consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the
basic consolidated financial statements and, in our opinion,
fairly states, in all material respects, the financial data
required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
January 17, 2005
Plano, Texas
AMERICAN REPUBLIC REALTY FUND I
CONSOLIDATED BALANCE SHEETS
December 31,
ASSETS
2005 2004
Investments in real estate at cost
Land $1,822,718 $1,822,718
Buildings, improvements and furniture
and fixtures 16,337,299 16,164,861
18,160,017 17,987,579
Accumulated depreciation (14,386,239) (13,739,447)
3,773,778 4,248,132
Cash and cash equivalents 178,644 353,871
Escrow deposits
541,874 452,842
Deferred financing costs, net of
accumulated amortization of
$195,018 and $172,075, respectively 34,413 57,357
Prepaid expenses
40,962 48,020
TOTAL ASSETS 4,569,671 5,160,222
LIABILITIES AND PARTNERS' DEFICIT
Mortgages payable 9,754,216 9,918,658
Amounts due affiliates 695 1,256
Accounts payable and accrued expenses 317,754 312,974
Security deposits 71,020 66,196
TOTAL LIABILITIES 10,143,685 10,299,084
PARTNERS' DEFICIT (5,574,014) (5,138,862)
TOTAL LIABILITIES AND PARTNERS' DEFICIT $4,569,671 $5,160,222
AMERICAN REPUBLIC REALTY FUND I
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31,
2005 2004 2003
PROPERTY REVENUE
Rentals $2,475,546 $2,418,446 $2,635,651
Fees and other 80,849 71,570 72,668
Total property revenues 2,556,395 2,490,016 2,708,319
OPERATING EXPENSES
Depreciation and amortization 669,735 664,958 674,136
General and administrative 535,470 565,805 546,893
Real estate taxes 290,466 276,501 295,976
Maintenance and repairs 302,384 288,622 334,709
Utilities 248,968 222,198 215,021
Property management fee to affiliate 127,862 124,520 135,477
Advertising and marketing 32,934 34,856 33,673
Administrative service fee to
general partner 12,408 12,408 12,408
Total operating expenses 2,220,227 2,189,868 2,248,293
OPERATING INCOME 336,168 300,148 460,026
OTHER INCOME AND (EXPENSE)
Interest income 2,905 652 1,534
Interest expense (774,224) (786,720) (798,271)
Total other income and expense (771,319) (786,068) (796,737)
NET LOSS $(435,151) $(485,920) $(336,711)
NET LOSS PER LIMITED PARTNERSHIP
UNIT - BASIC
Net loss per unit - basic $(39.16) $(43.73) $(30.30)
LIMITED PARTNERSHIP UNITS
OUTSTANDING - BASIC 11,000 11,000 11,000
AMERICAN REPUBLIC REALTY FUND I
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For the Years Ended December 31, 2005, 2004 and 2003
General Limited
Partner Partners Total
Balance, January 1, 2003 41,126 (4,357,357) (4,316,231)
Net loss (3,367) (333,344) (336,711)
Balance, December 31, 2003 37,759 (4,690,701) (4,652,942)
Net loss (4,859) (481,061) (485,920)
Balance, December 31, 2004 $ 32,900 $(5,171,762) $(5,138,862)
Net loss (4,352) (430,799) (435,151)
Balance, December 31, 2005 $ 28,548 $(5,602,561) $(5,574,013)
AMERICAN REPUBLIC REALTY FUND I
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
2005 2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(435,151) $(485,920) $(336,711)
Adjustments to reconcile net loss to
net cash provided by operations:
Depreciation and amortization 669,735 664,958 674,136
Change in assets and liabilities:
Prepaid expenses 7,058 (4,643) (11,183)
Escrow deposits (57,890) (55,144) (63,512)
Accounts payable and accrued expenses 4,780 (6,440) (13,587)
Security deposits 4,824 (5,748) (3, 084)
Net cash provided by operating activities 193,356 107,063 246,059
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in real estate (172,438) (64,958) (93,896)
Net proceeds from (payments to) reserve
for replacement (31,142) 29,686 208,729
Net cash provided by (used for) investing
activities (203,580) (35,272) 114,833
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgages payable (164,442) (152,028) (140,552)
Proceeds from (payments on)
amounts due affiliates (561) (1,196) 727
Net cash used for financing activities (165,003) (153,224) (139,825)
Net increase (decrease) in cash and cash
equivalents (175,227) (81,433) 221,067
Cash and cash equivalents at beginning of
period 353,871 435,304 214,237
Cash and cash equivalents at end of period $178,644 $353,871 $435,304
Supplemental disclosure of cash flow
information:
Cash paid during the year for interest $775,303 $787,717 $799,193
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
American Republic Realty Fund I (the "Partnership"), a
Wisconsin limited partnership, was formed on December 22,
1982, under the laws of the state of Wisconsin, for the
purpose of acquiring, maintaining, developing, operating,
and selling buildings and improvements. The Partnership
operates rental apartments in Texas and Florida. The
Partnership will be terminated by December 31, 2012,
although this date can be extended if certain events occur.
The general partner is Mr. Robert J. Werra.
An aggregate of 20,000 units is authorized, of which 11,000
were outstanding for each of the three years ended December
31, 2005. Under the terms of the offering, no additional
units will be offered.
Allocation of Net Income (Loss) and Cash
Net operating income and loss are allocated 1% to general
partners and 99% to limited partners. Net operating cash
flow, as defined in the partnership agreement, shall be
distributed to the limited and general partners first to the
limited partners in an amount equal to a variable
distribution preference on capital contributions for the
current year and then to the extent the preference has not
been satisfied for all preceding years, and, thereafter, 10%
to the general partner and 90% to the limited partners.
Net income from the sale of property is allocated first, to
the extent there are cumulative net losses, 1% to the
general partner and 99% to the limited partners; second, to
the limited partners in an amount equal to their
distribution preference; and, thereafter, 15% to the general
partner and 85% to the limited partners.
Cash proceeds from the sale of property or refinancing are
allocated first to the limited partners to the extent of
their capital contributions and their distribution
preference and, thereafter, 15% to the general partner and
85% to the limited partners.
Basis of Accounting
The Partnership maintains its books on the basis of
accounting used for federal income tax reporting purposes.
Memorandum entries have been made to present the
accompanying consolidated financial statements in accordance
with U.S. generally accepted accounting principles.
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Recent Accounting Pronouncements
In May 2005, the FASB issued Statement No. 154, "Accounting
Changes and Error Corrections" ("Statement No. 154").
Statement No. 154, which replaces APB Opinion No. 20,
"Accounting Changes" and FASB Statement No. 3, "Reporting
Accounting Changes in Interim Financial Statements", changes
the requirements for the accounting for and reporting of a
change in accounting principle. The statement requires
retrospective application of changes in accounting principle
to prior periods' financial statements unless it is
impracticable to determine the period-specific effects or
the cumulative effect of the change. Statement No. 154 is
effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005. The
adoption of Statement No. 154 is not expected to have a
material impact on the consolidated financial position,
results of operations or cash flows of the Partnership.
In June 2005, the FASB ratified the consensus in EITF Issue
No. 04-5, "Determining Whether a General Partner, or the
General Partners as a Group, Controls a Limited Partnership
or Similar Entity When the Limited Partners Have Certain
Rights" ("Issue 04-5"), which provides guidance in
determining whether a general partner controls a limited
partnership. Issue 04-5 states that the general partner in a
limited partnership is presumed to control that limited
partnership. The presumption may be overcome if the limited
partners have either (1) the substantive ability to dissolve
the limited partnership or otherwise remove the general
partner without cause or (2) substantive participating
rights, which provide the limited partners with the ability
to effectively participate in significant decisions that
would be expected to be made in the ordinary course of the
limited partnership's business and thereby preclude the
general partner from exercising unilateral control over the
partnership. Issue 04-5 is not expected to have a material
effect on the consolidated financial position, results of
operations or cash flows of the Partnership.
Income Taxes
No provision for income taxes has been made since the
partners report their respective share of the results of
operations on their individual income tax return.
Revenue Recognition
The Partnership has leased substantially all of its rental
apartments under cancelable leases for periods generally
less than one year. Rental revenue is recognized on a
monthly basis as earned.
Deferred Financing Costs
Costs incurred to obtain mortgage financing are being
amortized over the life of the mortgage using the straight-
line method.
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Consolidation
The consolidated financial statements include the accounts
of the Partnership and a wholly owned entity. All inter-
company amounts have been eliminated.
Cash and Cash Equivalents
The Partnership considers all highly liquid instruments with
a maturity of three months or less to be cash equivalents.
Investments in Real Estate and Depreciation
All real estate holdings are stated at cost or adjusted
carrying value. Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-
Lived Assets" ("SFAS No. 144"), requires that a property be
considered impaired if the sum of the expected future cash
flows (undiscounted and without interest charges) is less
than the carrying amount of the property. If impairment
exists, an impairment loss is recognized, by a charge
against earnings, equal to the amount by which the carrying
amount of the property exceeds the fair value less cost to
sell the property. If impairment of a property is
recognized, the carrying amount of the property is reduced
by the amount of the impairment, and a new cost for the
property is established. Such new cost is depreciated over
the property's remaining useful life. Depreciation is
provided by the straight-line method over estimated useful
lives, which range from 5 to 27.5 years.
There was no charge to earnings during 2005 due to an
impairment of real estate.
Computation of Earnings Per Unit
The Partnership has adopted Statement of Financial
Accounting Standards ("SFAS") No.128, "Earnings per Share".
Basic earnings per unit is computed by dividing net income
(loss) attributable to the limited partners' interests by
the weighted average number of units outstanding. Earnings
per unit assuming dilution would be computed by dividing net
income (loss) attributable to the limited partners'
interests by the weighted average number of units and
equivalent units outstanding. The Partnership has no
equivalent units outstanding for any period presented.
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Concentration of Credit Risk
Financial instruments which potentially subject the
Partnership to concentrations of credit risk consist
primarily of cash. The Partnership places its cash with
various financial institutions. The Partnership's exposure
to loss should any of these financial institutions fail
would be limited to any amount in excess of the amount
insured by the Federal Deposit Insurance Corporation or
Securities Investor Protection Corporation, where
applicable. Management does not believe significant credit
risk exists at December 31, 2005.
At December 31, 2005 and 2004, included in cash and cash
equivalents is $141,762 and $258,703, respectively, which is
cash held in a pooled account of the property's management
company, as a fiduciary, in a financial institution and
could be at risk.
Use of Estimates
The preparation of consolidated financial statements in
conformity with U.S. generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses
during that reporting period. Actual results could differ
from those estimates.
Environmental Remediation Costs
The Partnership accrues for losses associated with
environmental remediation obligations when such losses are
probable and reasonably estimable. Accruals for estimated
losses from environmental remediation obligations generally
are recognized no later than completion of the remedial
feasibility study. Such accruals are adjusted as further
information develops or circumstances change. Costs of
future expenditures for environmental remediation
obligations are not discounted to their present value.
Recoveries of environmental remediation costs from other
parties are recorded as assets when their receipt is deemed
probable. Project management is not aware of any
environmental remediation obligations that would materially
affect the operations, financial position or cash flows of
the Project.
Comprehensive Income
Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income, (SFAS 130), requires that
total comprehensive income be reported in the consolidated
financial statements. For the years ended December 31,
2005, December 31, 2004, and December 31, 2003, the
Partnership's comprehensive income (loss) was equal to its
net income (loss) and the Partnership does not have income
meeting the definition of other comprehensive income.
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE B - MORTGAGES PAYABLE
Mortgages payable at December 31, 2005 and 2004, consisted
of the following:
2005 2004
Mortgage note, original face value of
$6,800,000, payable in monthly
installments of principal and interest
of $49,517, bears interest at a rate of
7.92% and matures August 1, 2007, at
which time a lump-sum payment of
approximately $5,965,548 is due. This
mortgage note is secured by real estate
assets with a net book value of
approximately $2,385,689. 6,146,143 $6,249,105
Mortgage note, original face value of
$4,000,000, payable in monthly
installments of principal and interest
of $28,795 bears interest at a rate of
7.8% and matures August 1, 2007, at
which time a lump-sum payment of
approximately $3,500,406 is due. This
mortgage note is secured by real estate
assets with a net book value of
approximately $1,388,089. 3,608,073 3,669,553
$9,754,216 $9,918,658
At December 31, 2005, required principal payments due under
the stated terms of the Partnership's mortgage notes payable
are as follows:
2006 177,870
2007 9,576,346
2008 ---
2009 ---
2010 ---
Thereafter ---
$9,754,216
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE C - RELATED PARTY TRANSACTIONS
The Partnership agreement specifies that certain fees be
paid to the general partner or his designee. An affiliate
of the general partner receives a property management fee
that is 5% of the Partnership's gross receipts.
Additionally, the Partnership reimburses the affiliate for
administrative expenditures. The following fees and
reimbursements earned by an affiliate of the general partner
in 2005, 2004 and 2003:
2005 2004 2003
Property management fee $127,862 $124,520 $135,477
Administrative service fee 12,408 12,408 12,408
NOTE D - ACCUMULATED AMORTIZATION
At December 31, 2005, amortization expense for deferred
financing costs over the next five years is as follows:
2006 22,943
2007 11,470
2008 ---
2009 ---
2010 ---
Thereafter ---
$34,413
NOTE E - COMMITMENTS
The Partnership will pay a real estate commission to the
general partner or his affiliates in an amount not exceeding
the lesser of 50% of the amounts customarily charged by
others rendering similar services or 3% of the gross sales
price of a property sold by the Partnership, provided that
the limited partners have received their original capital
plus preferential interest, as defined.
The Partnership is a party to various claims, legal
actions and complaints arising in the ordinary course of
business. In the opinion of management, all such matters are
adequately covered by insurance or involve such amounts that
unfavorable disposition would not have a material effect on
the Partnership's consolidated financial position.
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE F - RECONCILIATION OF BOOK TO TAX LOSS (UNAUDITED)
If the accompanying consolidated financial statements had
been prepared in accordance with the accrual income tax
basis of accounting rather than generally accepted
accounting principals ("GAAP"), the excess of revenues over
expenses for 2005 would have been as follows:
Net loss per accompanying consolidated
financial statements $(435,151)
Add - book basis depreciation using
straight-line method 646,792
Deduct - income tax basis depreciation
expense using
ACRS method
(81,123)
Excess of revenues over expenses,
accrual income tax basis $130,518
NOTE G - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair value amounts have been
determined using available market information or other
appropriate valuation methodologies that require
considerable judgement in interpreting market data and
developing estimates. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that
the Partnership could realize in a current market exchange.
The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated
fair value amounts.
The fair value of financial instruments that are short-term
or reprice frequently and have a history of negligible
credit losses is considered to approximate their carrying
value. These include cash and cash equivalents, accounts
payable and other liabilities.
Management has reviewed the carrying values of its mortgages
payable in connection with interest rates currently
available to the Partnership for borrowings with similar
characteristics and maturities and has determined that their
estimated fair value would approximate their carrying value
as of December 31, 2005 and 2004.
AMERICAN REPUBLIC REALTY FUND I
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE G - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
(CONTINUED)
The fair value information presented herein is based on
pertinent information available to management. Although
management is not aware of any factors that would
significantly affect the estimated fair value amounts, such
amounts have not been comprehensively revalued for purposes
of these consolidated financial statements since that date,
and therefore, current estimates of fair value may differ
significantly from the amounts presented herein.
NOTE H - QUARTERLY DATA (UNAUDITED)
The table below reflects the partnership's selected
quarterly information for the years ended December 31, 2005
and 2004.
Year ended December 31, 2005
First Second Third Fourth
Quarter Quarter Quarter Quarter
Rents and other property revenues $621,677 $631,754 $655,053 $647,911
Operating expenses 533,040 596,616 585,578 504,993
Operating income 88,637 35,138 69,475 142,918
Other income/(expense) (194,998) (193,315) (192,718) (190,288)
Net loss (106,361) (158,177) (123,243) (47,370)
Loss allocable to limited
partnership unit (105,297) (156,595) (122,011) (46,896)
Loss per limited unit -
basic and diluted $(9.57) (14.24) (11.09) (4.26)
Year ended December 31, 2004
First Second Third Fourth
Quarter Quarter Quarter Quarter
Rents and other property revenue $637,744 $607,071 $617,423 $627,748
Operating expenses 553,099 580,861 597,459 508,449
Operating income 84,675 76,210 19,964 119,299
Other income/(expense) (197,703) (197,042) (196,472) (194,851)
Net loss (113,028) (120,832) (176,508) (75,552)
Loss allocable to limited
partnership unit (111,898) (119,624) (174,743) (74,796)
Loss per limited unit -
basic and diluted $(10.17) (10.87) (15.89) (6.80)
AMERICAN REPUBLIC REALTY FUND I
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2005
Initial Cost
to Partnership
Description Encumberances Land Building Total Cost
And Subsequent to
Improvements Acquisition
26 two-story
apartment
buildings of
concrete block
construction
with stucco
and cedar
exterior and
gabled roofs
located in
Jacksonville,
Florida (b) $583,000 $5,686,771 $662,980
37 two-story
apartment
buildings of
concrete block
construction
with brick
veneer, stucco
and wood siding
exterior, and
composition,
shingled roofs
located in
Bedford, Texas (b) 1,239,718 8,679,421 1,308,127
$1,822,718 $14,366,192 $1,971,107
Gross Amounts at Which
Carried at Close of Year
Description Building
And Accumulated
Land Improvements Total Depreciation
(c)(d) (c)
26 two-story
apartment
buildings of
concrete block
construction
with stucco
and cedar
exterior and
gabled roofs
located in
Jacksonville,
Florida $583,000 $6,349,751 $6,932,751 $5,544,662
37 two-story
apartment
buildings of
concrete block
construction
with brick
veneer, stucco
and wood siding
exterior, and
composition,
shingled roofs
located in
Bedford, Texas 1,239,718 9,987,548 11,227,266 8,841,577
$1,822,718 $16,337,299 $18,160,017 $14,386,239
Life on Which
Description Date of Date Depreciation
Construction Acquired Is Computed
26 two-story
apartment
buildings of
concrete block
construction
with stucco
and cedar
exterior and
gabled roofs Phase I complete at
located in date acquired; 9/12/83 (a)
Jacksonville, Phase II complete at
Florida date acquired 5/01/84 (a)
37 two-story
apartment
buildings of
concrete block
construction
with brick
veneer, stucco
and wood siding
exterior, and
composition,
shingled roofs
located in Complete at
Bedford, Texas Date acquired 12/20/83 (a)
See notes to Schedule III.
AMERICAN REPUBLIC REALTY FUND I
Schedule III - Real Estate and Accumulated Depreciation (Continued)
December 31, 2005
NOTES TO SCHEDULE III:
(a) See Note A to consolidated financial statements outlining
depreciation methods and lives.
(b) See description of mortgages and notes payable in Note B to the
consolidated financial statements.
(c) The reconciliation of investments in real estate and accumulated
depreciation for the years ended December 31, 2005, 2004 and 2003
is as follows:
Investments in Accumulated
Real Estate Depreciation
Balance, January 1, 2003 $17,828,725 $12,446,239
Acquisitions 93,896 ---
Depreciation expense --- 651,193
Balance, December 31, 2003 17,922,621 13,097,432
Acquisitions 64,958 ---
Depreciation expense --- 642,015
Balance, December 31, 2004 17,987,579 13,739,447
Acquisitions 172,438 ---
Depreciation expense --- 646,792
Balance, December 31, 2005 18,160,017 14,386,239
(d) Aggregate cost for federal income tax purposes is $17,639,692.
Item 9. Changes in and Disagreements on Accounting and Financial
Disclosure
On November 6, 1998, an 8-K was filed to disclose the change in
auditors. No financial statements were issued in conjunction with
this filing. The Registrant has not been involved in any
disagreements on accounting and financial disclosure.
Item 9a. Controls and Procedures
Based on their most recent evaluation, which was completed within
90 days of the filing of this Form 10-K, our Principal Financial
Officer and Principal Executive Officer, believe our disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) are effective. There were not any significant changes in
internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation, and there
has not been any corrective action with regard to significant
deficiencies and material weaknesses.
PART III
Item 10. Directors and Executive Officer of the Partnership
The Partnership itself has no officers or directors. Robert J.
Werra is the General Partner of the Partnership.
Robert J. Werra, 66, the General Partner, Mr. Werra joined Loewi &
Co., Incorporated ("Loewi") in 1967 as a Registered Representative.
In 1971, he formed the Loewi real estate department, and was
responsible for its first sales of privately placed real estate
programs. Loewi Realty was incorporated in 1974, as a wholly owned
subsidiary of Loewi & Co., with Mr. Werra as President. In 1980, Mr.
Werra, along with three other individuals, formed Amrecorp Inc. to
purchase the stock of Loewi Real Estate Inc., and Loewi Realty. In
1991 Univesco, Inc. became the management agent for the Partnership.
Limited Partners have no right to participate in management of the
Partnership.
Item 11. Management Remuneration and Transactions
As stated above, the Partnership has no officers or directors.
Pursuant to the terms of the Limited Partnership Agreement, the
General Partner receives 1% of Partnership income and loss and up to
15% of Net Proceeds received from sale or refinancing of
Partnership properties (after return of Limited Partner capital
contributions and payment of a 6% Current Distribution Preference
thereon).
Univesco, Inc., an affiliate of the General Partner, is entitled
to receive a management fee with respect to properties actually
managed of 5% of the actual gross receipts from a property or an
amount competitive in price or terms for comparable services available
from non-affiliated persons. The Partnership is also permitted to
engage in various transactions involving affiliates of the General
Partner as described under the caption "Compensation and Fees" at
pages 6-8, "Management" at page 17 and "Allocation of Net Income and
Losses and Cash Distributions" at pages 34-36 of the Prospectus as
supplemented, incorporated in the Form S-11 Registration Statement
which was filed with the Securities and Exchange Commission and made
effective on May 2, 1983.
For the years ended December 31, 2005, 2004, and 2003, property
management fees earned totaled $127,862; $124,520; and $135,477,
respectively. An additional administration service fee was paid to
the General Partner of $12,408, $12,408 and $12,408 for the years
ended December 31, 2005, 2004, and 2003, respectively.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
(a) No one except as listed in item (b) below, owns of
record, and the General Partner knows of no one who owns beneficially,
more than five percent of the Interests in the Partnership, the only
class of securities outstanding.
Amount and Nature
Title Name of of Beneficial Percent
of Class Beneficial Owner Ownership of Interest
Limited Everest Management 3,318.50 30.2%
Partnership
Interests
Equity Resources 617.5 5.6%
(b) By virtue of its organization as a limited partnership,
the Partnership has no officers or directors. Persons performing
functions similar to those of officers and directors of the
Partnership, beneficially own, the following Units of the Partnership
as of December 31, 2005.
Amount and Nature
Title Name of of Beneficial Percent
of Class Beneficial Owner Ownership of Interest
Limited Robert J. Werra 591 5.37%
Partnership
Interests
No Selling Commissions were paid in connection with the purchase of
these Units.
(c) There is no arrangement, known to the Partnership,
which may, at a subsequent date, result in a change in control of the
Partnership.
Item 13. Certain Relationships and Related Transactions
None other than discussed in Item 11 and Note C to the financial
statements at Item 8 elsewhere in this 10-K.
Item 14. Principal Accounting Fees and Services
The following table sets forth the aggregate fees for professional
services rendered to the Partnserhip for the years 2004 and 2003 by
the Partnership's principal accounting firm, Farmer, Fuqua, & Huff,
P.C.
Type of Fees 2005 2004
Audit Fees $11,500 $11,500
Audit related fees --- ---
Tax fees --- ---
All other fees --- ---
PART IV
Item 15. Exhibits, Financial Statements, Schedules and Reports on
Form 8-K
(A) 1. See accompanying Financial Statements Index
2. Additional financial information required to be furnished:
Schedule III - Real Estate and Accumulate Depreciation.
3. Exhibits
None.
(B) Reports on Form 8-K for the quarter ended December 31, 2005.
None
(C) Exhibits
3. Certificate of Limited Partnership, incorporated by
reference to Registration Statement No. 0-11578 effective
May 2, 1983.
4. Limited Partnership Agreement, incorporated by
reference to Registration Statement No. 0-11578 effective
May 2, 1983.
9. Not Applicable
10. Not Applicable
11. Not Applicable
12. Not Applicable
13. Reports to security holders, incorporated by reference from
Registrant's Quarterly Reports on Form 1O-Q, dated September
30, 2005.
14. Code of Ethcis for Senior Financial Officers
18. Not Applicable
19. Not Applicable
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. Power of Attorney, incorporated by reference to
Registration Statement No. 0-11578 effective May
2, 1983.
28. None
31. Certification
32. Officers' Section 1350 Certifcation
(d) Financial Statement Schedules excluded from the annual report
None
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN REPUBLIC REALTY FUND I
ROBERT J. WERRA, GENERAL PARTNER
/s/ Robert J. Werra
March 29, 2006
EXHIBIT 14
Code of Ethics for Senior Financial Officers
The principal executive officer, president, principal financial
officer, chief financial officer, principal accounting officer and
controller (all, the partnership's "Senior Financial Officers") hold
an important and elevated role in corporate governance, vested with
both the responsibility and authority to protect, balance, and
preserve the interests of all of the enterprise stakeholders,
including shareholders, customers, employees, suppliers, and citizens
of the communities in which business is conducted. Senior Financial
Officers fulfill this responsibility by prescribing and enforcing the
policies and procedures employed in the operation of the enterprise's
financial organization and by acting in good faith and in the
company's best interests in accordance with the partnerhip's Code of
Business Conduct and Ethics.
1 Honest and Ethical Conduct
Senior Financial Officers will exhibit and promote
honest and ethical conduct through the establishment and
operation of policies and procedures that:
. Encourage and reward professional integrity in all
aspects of the financial organization, by eliminating
inhibitions and barriers to responsible behavior, such
as coercion, fear of reprisal, or alienation from the
financial organization or the enterprise itself.
. Promote the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships.
. Provide a mechanism for members of the finance
organization to inform senior Management of deviations
in the practice from policies and procedures governing
honest and ethical behavior.
. Respect the confidentiality of information acquired in
the course of work, except when authorized or otherwise
legally obligated to disclose such information, and
restrict the use of confidential information acquired
in the course of work for personal advantage.
. Demonstrate their personal support for such policies
and procedures through periodic communication
reinforcing these ethical standards throughout the
finance organization.
2 Financial Records and Periodic Reports
Senior Financial Officers will establish and manage the
enterprise transaction and reporting systems and
procedures to provide that:
. Business transactions are properly authorized and
accurately and timely recorded on the company's books
and records in accordance with Generally Accepted
Accounting Principles ("GAAP") and established company
financial policy.
. No false or artificial statements or entries for any
purpose are made in the partnership's books and
records, financial statements and related
communications.
. The retention or proper disposal of company records
shall be in accordance with established records
retention policies and applicable legal and regulatory
requirements.
. Periodic financial communications and reports will
include full, fair, accurate, timely and understandable
disclosure.
3 Compliance with Applicable Laws, Rules and Regulations.
Senior Financial Officers will establish and maintain
mechanisms to:
. Educate members of the finance organization about any
federal, state or local statute, regulation or
administrative procedure that affects the operation of
the finance organization and the enterprise generally.
. Monitor the compliance of the finance organization with
any applicable federal, state or local statute,
regulation or administrative rule.
. Identify, report and correct in a swift and certain
manner, any detected deviations from applicable
federal, state or local statute or regulation.
4 Reporting of Non-Compliance
Senior Financial Officers will promptly bring to the attention of
the Audit Committee:
. Material information that affects the disclosures made
by the company in its public filings.
. Information concerning significant deficiencies in the
design or operation of internal controls that could
adversely affect the company's ability to record,
process, summarize and report financial data.
Senior Financial Officers will promptly bring to the attention of
the General Counsel and to the Audit Committee:
. Fraud, whether or not material, that involves
management or other employees who have a significant
role in the partnerhip's financial reporting,
disclosures or internal controls.
. Information concerning a violation of this Code or the
company's Code of Business and Ethics Conduct,
including any actual or apparent conflicts of interest
between personal and professional relationships,
involving management or other employees who have a
significant role in the partnership's financal
reporting, disclosures or internal controls.
. Evidence of a material violation by the company or its
employees or agents of applicable laws, rules or
regulations.
5 Disciplinary Action
In the event of violation by Senior Financial Officers
of this Code or the company's Code of Business Conduct and
Ethics, the Audit Committee of the Board of Directors shall
recommend appropriate disciplinary and remedial actions.
Exhibit 31
CERTIFICATION
I, Robert J. Werra, certify that:
1 . I have reviewed this annual report on Form 10-K of American
Republic Realty Fund;
2 . Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
3 . Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this annual report;
4 . The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13-15(e) and 15d-15e) and
have internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
(a)(a) designed such disclosure controls and
procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this annual report
is being prepared;
(b) designed such internal control over financial
reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with generally accepted
accounting principals; and
(c) evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
controls and procedures as of the end of the period covered
by this report based on such evaluation; and
(d) disclosed in this report any change in the
registrant's internal control over financial reporting that
occurred during the registrant's most recent fiscal quarter
that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over
financial reporting; and
e) presented in this annual report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;
(b)5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions):
(a) all significant deficiencies and material
weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls.
Dated: March 29, 2006.
/s/ Robert J. Werra
____________________________________
Exhibit 32
Officers' Section 1350 Certifications
The undersigned officer of American Republic Realty Fund, a
Wisconsin limited partnership (the "Partnership"), hereby certifies
that (i) the Partnership's Annual Report on Form 10-K for the year
ended December 31, 2004 fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934, and (ii) the
information contained in the Partnership's Annual Report on Form 10-K
for the year ended December 31, 2004 fairly presents, in all material
respects, the financial condition and results of operations of the
Partnership, at and for the periods indicated.
Dated: March 29, 2006.
/s/ Robert J. Werra
______________________________________