FY 1987-1988 RDA Financial StatementsLA QULNTA REDEVELOPMENT AGENCY
June 30, 1988
CONTENTS
Page
Number
Accountants' Report 1
General Purpose Financial Statements:::
Combined Balance Sheet - All Fund Types and.Account Group 2
Combined Statement of Revenues, Expenditures and Changes
in Fund Balances - All Governmental -Fund Types .3 -
Notes to Financial Statements 4 - 10
Supplementary Information:
Combining Balance Sheet — Capital Project Funds 11
Combining Statement -of Revenues, Expenditures -and Changes -
in Fund Balances - Capital Project Funds 12
Accountants' Report on Compliance with Audit Guidelines
for California Redevelopment Agencies 13
DIEHL,EVANs
&COMPANY
.ERTIFIED PUBLIC ACCOUNTANTS
A PARTNERSHIP INCWpING ACCOUNTANCY CORPORATIONS
1910 NORTH BUSH'STREET
SANTA ANA - CALIFORNIA 92706.2894
PHONE (714) -542 -OM
August 25, 1988
WIN Q PETERS. CPA
DONALD H. PETERSON, CPA
- - -DONALD E. CALLAHAN, CPA
L. PETMSCHERER, CPA'
.. RODNEY K. ?&DANIEL: CPA
- -. RALPH N. WEINTRAUB• CPA
MICHAEL R. LUDIN, CPA
PHILIP H. HOLTKAMP, CPA .
. THOMAS M. PERLOWSIO, CPA
Board of Directors
La Quints Redevelopment Agency
La Quinta, California
We have examined the.general purpose financial statements of -the La Quinta
Redevelopment Agency, as of and for the year ended June 30, 1988, as listed in
the table of contents. Our examination was made in -accordance with generally
accepted audit-ing standards and; accordingly, included such tests of the
accounting records and such other auditing procedures as we considered necessary
in the circumstances.
In our opinion, the -general purpose financi-al statements -referred to .above
present fairly the financial position of the La Quinta Redevelopment Agency at
June 30, 1988 and the results of its operations for the year then ended, in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
Our examination was made for the purpose of forming an opinion on the general
purpose financial statements taken as a whole. The supplementary information
listed in the table of contents is presented for purposes of additional analysis
and is not a required part of the general purpose financial statements of the La
Quinta Redevelopment Agency. The information has been subjected to the auditing
procedures applied in the examination of the general purpose financial.`
statements and, in our opinion, is.fairly stated in all material respects in
relation to the general purpose financial statements taken as a whole.
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OTHER OFFICES AT: ONE CMC PLAZA - SUITE 265 2965 ROOSEVELT ST. 120 WEST WOODWARD. AVE.
NEWPORT BEACH, CA 926645915 CARLSBAD, CA 9200&2389 ESCONDIDO, CA 92025-9990-
(714)
20T5 999p(714) 644'•6156 (619) 7292343 (619) 741-3141
LA QUINTA REDEVELOPMENT AGENCY.
COMBINED_ BALANCE SHEET
ALL' FUND TYPES. AND ACCOUNT GROUP '
June 30, 1988
LIABILITIES AND FUND EQUITY
LIABILITIES:
Bonds payable_(Note 8)
Due to County of Riverside
(Note 8)
Note payable to Water District
(Note 8)
Loan payable to City of
La Quinta (Note 8)
TOTAL LIABILITIES
FUND BALANCES (NOTES 7 AND 8):
Reserved for debt service
Reserved for capital projects
TOTAL FUND BALANCES
TOTAL LIABILITIES AND
FUND EQUITY
$ - $ $ 20,000;000 $205000,000
.2,206,812 .2,206,812
- • 4,596,593
13,670 -
13,670 4,596,593
96,005 A 96,005
86,003 -86,003
22,388,820 22,388,820
4,596,593
13,670
4,610,263
13 670 $4,596,593 $ 22,388,820 $ 26,999,083
See accountants' report and notes,to financial statements.
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Governmental
Account
Fund Types
Group
Totals
Capital
Debt
Long -Term
(Memorandum
Projects
Service
Debt
Only)
ASSETS:
-
_
Cash and temporary investments
(ib
(Notes lc and 3)
$ 13,670
$ 1,454,000
$ -
$,/1,467,670
Accrued interest receivable
-
26,291
-
26,291
Tax increment revenue
receivable (Note 4)
-
39,942
-
39,942
Restricted Assets (Note 6):
-
Cash
-
3,076-9-360
-
3,07.6,360
Amount available for retirement
of long-term debt
-
-
5,096,593.
-
5,096,593
Amount to be provided for
repayment of debt
-
-
17,292,227
179292,227
TOTAL ASSETS
L12.L670
$ 4,596,593
$ 22,388,820
$ 26,999,083
LIABILITIES AND FUND EQUITY
LIABILITIES:
Bonds payable_(Note 8)
Due to County of Riverside
(Note 8)
Note payable to Water District
(Note 8)
Loan payable to City of
La Quinta (Note 8)
TOTAL LIABILITIES
FUND BALANCES (NOTES 7 AND 8):
Reserved for debt service
Reserved for capital projects
TOTAL FUND BALANCES
TOTAL LIABILITIES AND
FUND EQUITY
$ - $ $ 20,000;000 $205000,000
.2,206,812 .2,206,812
- • 4,596,593
13,670 -
13,670 4,596,593
96,005 A 96,005
86,003 -86,003
22,388,820 22,388,820
4,596,593
13,670
4,610,263
13 670 $4,596,593 $ 22,388,820 $ 26,999,083
See accountants' report and notes,to financial statements.
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LA QUINTA REDEVELOPMENT 'AGENCY
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES --ALL GOVERNMENTAL FUND`TYPES-
For the year ended June -30, 1988`
Totals
Capital Debt. (Memorandum
_- Proiects -Service Only)
REVENUES:
Tax increment revenue (Note 4) $ 703,737 $ 2,814;947. $ 3,5181684
Interest income - 264,787; 264,787
Miscellaneous revenue 45 45
TOTAL REVENUES 703,782 3,079,734- 3;783,51b
EXPENDITURES: -
Trustee fees
Administrative (Note 5)
Professional and consulting services
Project costs
Debt Service:
Taxing agency payments (Note 4b)
Interest on bonds
Principal payments (Note 8)
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Loans from City (Note 8)'
Operating transfers in (Note 5)
Operating transfers out (Note 5)
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER SOURCES
OVER EXPENDITURES AND OTHER USES
FUND BALANCES, JULY 1, 1987
FUND BALANCES, JUNE 30, 1988
- -
11,301 -
-119301
80,000
- -
80,000 -
7,555
-
7,555
314,174
314,174
-
530,000
530,000
-
1,900,477
1,900,477
12106,612
1,106i612
401,729
3,548,390
3,950,119
302,053
(468,656)
(166,603)
414,616
-
414,616
703,737
-703,737
(703,737)
-
(703,737)
(289,121)
703,737
414,616
12,932
235,081
248,013
738
4,361,512
4,362,250
$ 13,670
$ 4,596,593
$ 4,610,263
See accountants' report and notes.to financial statements.
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LA QUINTA REDEVELOPMENT. AGENCY
NOTES TO FINANCIAL STATEMENTS
June 30, 1988
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a -Description of funds and account group:
The accounts of the La Quinta Redevelopment Agency (the Agency) are
organized on the basis of funds and account group, each of which is
considered a separate accounting entity with a self-bal-ancing set of
accounts. The funds and account group used in the accompanying
financial statements and described below are those -specif-ied for
governmental units by the Governmental Accounting Standards Board
(GASB).
Cavital Proiect Funds
Capital Project Funds are established to account for bond proceeds
available for project improvements and interest income on invested
funds. The funds are expended primarily for administrative expenses and
redevelopment project costs. Included as a capital project fund is the
low income housing fund which accounts for twenty percent of all taxes
which are allocated by the Agency pursuant to the California Health and
_Safety Code. These funds shall be used by -the Agency for the purpose of
providing affordable housing.- Under provisions of the Health and Safety
Code, such funds are referred to as "Redevelopment Funds".
Debt Service Fund
Debt service funds are established to account -for tax increment
revenues, bond proceeds required to be set aside for future debt.service
and related interest income. The fund is used to repay principal and
interest on indebtedness of the Agency. Under provisions of the,Health
and Safety Code, such funds are referred to as "Special Funds".
Long -Term Debt Group of Accounts
The Long -Term Debt Group of Accounts is used to account for bonds
payable and other long-term debt indebtedness of the.Agency.
b. Basis of Accounting:
The modified accrual basis of accounting is used for all funds of the
Agency. Revenues are re -cognized when they become measurable and
available to finance expenditures of the current period. Accrued
revenues include tax increment revenue and accrued interest on --
investments received within 60 days after year end. -Expenditures, are
recorded when the related -liability is incur.red,-.except that principal
and interest payments on -bonds are recorded a,s expenditures when due.
Accrued interest on amounts due to the County of Riverside and the
Coachella Valley Water District is reflected -in the long-term debt -group
of accounts.
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
_ NOTES --TO FINANCIAL STATEMENTS
(Continued) =
June 30, 1988.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c. Investments:
Investments are stated at cost, or amortized cost, which -approximates
market value. (See Note 3).
d. Bond Discounts and Bond Issue Costs:
As described at Note lb. above, interest on bonds pa.yab-le- is not
accrued, but rather is recorded as an expenditure when due:'- Consistent
with this policy, discounts on the sale of bonds and bond issue costs
are recorded as expenditures when -paid-in-the year -the bonds are issued.
e. Budgetary Reporting:
The budgets of the Agency are primarily "long-term" budgets which
emphasize major programs and capital outlay plans extending over a
number of years. Because of the long-term nature of projects, "annual"
budget comparisons are not considered meaningful, and accordingly, no
budgetary information is included in the accompanying financial
statements.
f. Total Columns on Combined -Statements:
Total columns on the financial statements are captioned "Memorandum
Only" to indicate that they are presented only to facilitate financial
analysis and such .data is not comparable to a consolidation. Interfund
eliminations have not been made -in the aggregation of this data.
-
g. Measurement Focus:
All governmental funds are accounted for on a spending or "financial
flow" measurement focus. This means that generally only current assets
and current liabilities are included on their balance sheets, with the
exception that the noncurrent portion of long-term receivables due to
governmental funds are reported on their -balance sheets, offset by fund
balance reserve accounts. Statements.of revenue, expenditures and
changes in fund balances for governmental funds generally present
increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets.
2. HISTORY AND ORGANIZATION:
The Agency was activated on July 5, 1983. The -primary purpose of the Agency-:
is to eliminate blight through the process of _redev-e-lo_pment.. --.:On N.ov:ember_.-
29, 1983 the City Council approved and adopted.the Redeve-lopment Plan for•_
the La Quinta Redevelopment Project. This plan provides for the -elimination-._
of blight and deterioration which- was found to exi-st in the project area.-
The
rea._The project area encompasses approximately 17.5 square miles of the City.
The Coachella Valley Water District is constructing -the Agency's -projects to
correct flooding of the project area.
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1988
3., CASH AND INVESTMENTS:
Cash and investments at June 30, 1988 consisted of the following:
Market
Cost Value
Deposits:
Banks:
Demand accounts (all insured) $ 13,670 $ 13_,670
Investments held by fiscal agent:
U.S. Treasury Notes 3,076,360 3,076,360
California Local -Agency Investment
Fund (LAIF) 1,454,000_ 1,454-,000
Total cash and investments $ 4,544,030
$ 4,544,030
Cash and investments are recorded in the accompanying combined balance sheet
as follows:
Cash and Investments - unrestricted $ 1,467,670
Cash and Investments - restricted 3,076,360
Authorized Investments:
Under provisions of the Agency's Investment Policy, and in accordance with
Section 53601 of the California Government Code, the Agency may invest in
the following types of investments:
- U.S. Government Obligations
- Obligations of U.S. Government Agencies
- U.S. Government Instrumentality Obligations
- Repurchase Agreements (Repos) whose underlying collateral
consists of the foregoing specified securities
- Bankers' Acceptances that are "prime" rated
- State Investment Pool
- Other instruments as may become available and authorized
by California Law
- Bonds issued by the City of La Quinta or the La Quints
Redevelopment Agency
LA QUINTA REDEVELOPMENT-, AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1988
3.. CASH AND INVESTMENTS (CONTINUED):
California Local Agency Investment Fund (LAIF)
The LAIF is a special fund of the California State Treasury through which
local governments may pool investments. The City and the Agency each may
invest up to $5,000,000 in the fund. Investments in LAIF ar.e=highly-liquid,
as deposits can be converted to -cash within 24 hours withoutlogs of
interest.
Classification of Cash and Investments -b Cred-it Risk
Deposits:
All deposits 100% insured $ 13 ;6 70
Investments:
Category 3:
Investments not registered in City's name,
uninsured, etc. 3,076,360
California Local Agency Investment Fund:
All investments with LAIF secured by the full
faith and credit of the State of California 1,454,000
,$ 4,544,030
Allocation of Interest Income Among Funds
Interest income is allocated to each fund based on the preceding month's
ending cash balance.
4. TAX INCREMENT FINANCING AND RELATED RECEIVABLES:
The Agency's primary source of revenue comes from property taxes, referred
to in the accompanying financi-al statements as "tax increment revenue".
Property taxes allocated to the Agency are computed in the following manner:
a. The assessed valuation of all property within the project' area is
determined on the date of adoption of the Redevelopment Plan.
b. Property taxes related to the incremental increase in assessed values
after the adoption of the Redevelopment Plan are allocated to the
Agency; all taxes on the "frozen" assessed valuation of the property are
allocated to the City and other districts per agreements for specific
_ amounts of tax increment each year. In 1988 these districts received a
total of $530,000 in tax increment revenue:
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1988
4.. TAX INCREMENT FINANCING AND RELATED RECEIVABLES (CONTINUED):
The Agency has no power to levy and collect taxes and =any legislative
property tax de -emphasis might necessarily reduce the amount of tax revenues
that would otherwise be available to pay the principal of, and interest on
bonds payable. Broadened property tax exemptions could have a similar
effect. Conversely, any increase in the tax rate or assessed valuation, or
any reduction or elimination of: present exemptions would necessarily
increase the amount of tax revenues that would be available to pay principal
and interest on bonds payable.
The tax increment receivable of $39,942 represents assessments attributable
to the fiscal year ended June 30, 1988 that were remitted to - the- Agenc-y by
the County of Riverside after the year end.
5. REIMBURSEMENT AGREEMENT:
Pursuant to the terms of a reimbursement agreement, the Agency has
reimbursed the City $80,000 for the use of City facilities during the past
year. This amount is included in the administrative expenditures of the
Capital Projects Fund.
During the year ended June 30, 1986 a finding was made by the. Agency that a
project of the Capital Project Fund of the Agency was of benefit to the
entire project area and that the low income housing portion of this project
met the requirements of the City for low -and -moderate income housing. It
was estimated in the finding that -all tax increment to be received through
June 30, 1988 would equal the cost of the benefit allocable to .low -and -
moderate income housing. Accordingly the low income housing fund -,of the
Agency transferred tax increment revenue in the amount of $703,737 to the
Debt Service Fund of the Agency during the year ended June 30, 1988.
6. RESTRICTED ASSETS:
These assets are restricted in their use to the retirement of principal and
interest on bonds and Water District advances (see Note 8), and are not
available for use by the Agency for any other purpose.
7. FUND BALANCE RESERVES:
Under generally accepted accounting principles, a municipal entity may set
up "reserves" of fund equity to segregate fund balances which are not
appropriable for expenditure in future periods, or which are legally. set
aside for a specific future use. Fund "designations" a lso-are.estab.lished
to indicate tentative plans for financial resource utilization in a future
period.
See accountants' report.
M -C
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1988
7.. FUND BALANCE RESERVES (CONTINUED):
The entire net equity of the debt -service fund is reserved for future debt
service, and accordingly, is not available for general expenditures. The
bond indenture requires $2,115,350 to be reserved. The -trustee -has
currently reserved $2,226,769 which exceeds the bond indenture requirement.
Other funds held by the trustee also are pledged for debt service.
At June 30, 1988, a "Reserve for Capital Projects" was set up in -the Capita -1
Projects Fund to indicate that the related assets were not "available" as a
current asset.
8. LONG-TERM DEBT:
Changes in long-term debt during'theyear ended June 30, 1988 was as
follows:
June 30, June 30,
1987 Additions Payments 1988
Bonds payable $ 20,000,000 $ $ - $ 20,000,000
Due to County of `
Riverside 1,035,196 1,171,616 - 2,206,812
Note payable to
Water District 850,975 23,030 778,000 96,005
Loan payable to City
of La Quinta - 414,616 328,612 86,003
Total $ 21,886,171 $ 1,609,262,$ 1,106,612 $ 22,388,820
Unpaid accrued interest and. -subventions due to the County of Riverside
totalling $1,194,646 have been added to long-term debt, however, these
amounts have not been included -as an expenditure for the year ended June 30,
1988.
Bonds Pavable
La Quinta Redevelopment Project Tax Allocation Bonds, Series 1985 were
issued during the fiscal year ending June 30, 1987. The bonds were issued
in the amount of $20,000,000 and have an average interest rate of 9.404% per_-
annum. Principal payments are -paid annually on September 1, beginning in
1989. Interest payments are payable semi-annually on March 1 and September
1, beginning in 1987. Bonds maturing on or before September 1, 1995 are not e
subject to call and redemption prior to maturity. Bonds maturing on or =
after September 1, 1996 are subject. to redemption- on. a-ny interest ' payment
date at par plus a premium together with accrued interest -to the date of'
redemption.
See accountants' report.
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LA QUINTA REDEVELOPMENT -AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1988
8.. LONG-TERM DEBT (CONTINUED):
The scheduled future debt service payments on the bonds is as follows:
Year Ended
June 30, Principal Interest Total
1989 $ 245,:000 $ 1,900,000 $ 2,145,000
1990 265,000 1,876,725 2,141,725
1991 290,000 1,851,550 2,141,550
1992 320,000 1,824,000 2,144,000
1993 350,000 1,793,600 2,143,600
All subsequent years 18,530,000 27,865,400 461395,400
Total $ 20,000,000 $ 37,111,275 $ 57,111,275
Due to County of Riverside
Based on an agreement with the County of Riverside, the Agency shall repay
to the County 50 percent of tax increment received which would have been
retained by the County if the Agency did not -exist. These repayments are
subordinate to certain debt -service of the -Agency and exclude amounts
allocated to the low-income housing fund. The repayments will begin when
certain conditions of the bond indenture agreement have been met. Unpaid
balances accrue interest at 10% per annum. The total amount payable to the
County under this agreement at June 30, 1988 is $2,206,812 including
$133,790 of accrued interest. This amount has been recorded in the long-
term debt group of accounts.
Notes Payable to Water District
The Coachella Valley Water District advanced $778,000 to the Agency during
the fiscal year ending June 30, 1986 for engineering costs incurred for a
flood control project. This amount accrued interest at the rate of interest
being earned by funds deposited with the State of California Local Agency
Investment Fund. The original advance was repaid to the Water District in
November, 1987 and the accumulated accrued interest of $96,005 remain's as
long-term debt.
Loans Payable to the City of La Quinta
The City of La Quinta periodically makes operating advances to the Agency."
Outstanding advances from the City to the Agency were $86,003 at June -30, --
1988.
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
COMBINING BALANCE SHEET -
CAPITAL=PROJECT FUNDS
June 30, 1988
Flood Low
Control Income
Project Housing Totals
ASSETS
Cash and temporary investments L12j670 $ - $ 13.,670
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accounts payable and accrued expenses $ _ $ $ _
FUND BALANCE:
Reserved for capital projects 13,670 - 13,670
TOTAL LIABILITIES AND FUND BALANCE -$_13_L670 $ - $ 13,670
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
COMBINING STATEMENT -OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - CAPITAL PROJECT FUNDS--
For
UNDS_For the year ended June 30, 1988
REVENUES:
Tax increment revenue
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES:
Administrative
Professional and consulting services
Project costs
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES):
Loan from City
Operating transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER SOURCES
OVER EXPENDITURES AND OTHER USES
FUND BALANCES, JULY 1, 1987
FUND BALANCES, JUNE 30, 1988
See accountants' report.
Flood Low
Control Income
Project Housing Totals
$ - $ 703,737 $ 703,737
45 - 45
45 703,737 703,782
80,000 - 80,000
7,555 - 7,555
314,174 - 314,174
401,729 - 401,729
(401,684) 703,737 302,053
414,616
414,616
(703,737) (703,737)
414,616 (703,737) (2895121)
12,932 - 12,932
738 - 738
$ 132670 $ - $ 13,670
-12-
LA QUINTA REDEVELOPMENT AGENCY
August_ 25,' 1988
ACCOUNTANTS' REPORT ON
COMPLIANCE WITH AUDIT GUIDELINES FOR
CALIFORNIA REDEVELOPMENT AGENCIES
In connection with our examination of the financial statements of the La Quints
Redevelopment Agency for the year ended June 30, 1988, we have performed, to -the
extent applicable, -the tasks contained in Sections I through V of -the-
"Guidelines for Compliance Audits of California Redevelopment-Agenc-ies"
published by the State Controller.
Based on the above procedures, we are of the opinion that the Agency complied in
all material respects with criteria established in the State Controller's
guidelines referred to above.