FY 2003-2004 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY
Financial Statements and
Supplemental Data
Year ended rune 30, 2004
(with independent Auditors' Report Thereon)
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o"^
LA QUINTA REDEVELOPMENT AGENCY
Financial Statements and Supplemental Data
Year ended June 30, 2004
TABLE OF CONTENTS
Page
Independent Auditors, Report
1
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets
4
Statement of Activities
5
Fund Financial Statements:
— Governmental Funds:
Balance Sheet
6
_ Reconciliation of the Balance Sheets of Governmental Funds to the
Statement of Net Assets
8
Statement of Revenues, Expenditures and Changes in Fund Balances
10
Reconciliation of the Statement of Revenues, Expenditures and Changes
12
Notes to the Basic Financial Statements
13
Required Supplementary Information:
Notes to Required Supplementary Information
36
Schedule of Revenues, Expenditures, and Changes in Fund Balances'—
Budget and Actual:
Low/Moderate Income Housing Fund — PA No. 1
37
- Low/Moderate Income Housing Fund — PA No. 2
38
Supplementary Information:
Non -Manor Governmental Funds
- Balance Sheet
40
Statement of Revenues, Expenditures and Changes in Fund Balances
41
Report on Compliance and on Internal Control Over Financial Reporting
Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
42
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CONRADAINO
ASSOCIA"T"ES, L.L.P.
Board of Directors
La Quinta Redevelopment Agency
La Quinta, California
CERTIFIED PUBLIC ACCOUNTANTS
- INDEPENDENT AUDITORS' REPORT
2301 DUPONT DRIVE, SUITE 200
IRVINE, CALIFORNIA 92612
i (949) 474-2020
Fax (949) 263-5520
We have audited the accompanying financial statements of the governmental activities and each
major fund of the La Quinta Redevelopment Agency, a component unit of the City of La Quinta,.
California as of and for the year ended June 30, 2004, which collectively comprise the Agency's
basic financial statements as listed in the table of contents. These basic financial statements are
- the responsibility of the management of the La Quinta Redevelopment Agency. Our
responsibility is to express an opinion on these financial statements lased on our audit.
-- We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the basic financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
basic financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the governmental activities and each major fund of the La Quinta
Redevelopment Agency at June 30, 2004, and the results of its operations for the year then
ended, in conformity with accounting principles generally accepted in the United States of
America.
The La Quinta Redevelopment Agency has not presented Management's Discussion and
Analysis that the Governmental Accounting Standards Board has determined is necessary to
supplement, although not required to be part of, the basic financial statements.
The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is supplementary
information required by the Governmental Accounting Standards Board. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the supplementary information. However, we did
not audit the information and express no opinion on it.
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
i
Board of Directors
La Quinta Redevelopment Agency
Page Two
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the basic financial statements. The combining fund financial statements
are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The combining fund financial statements have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated
August 20, 2004 on our consideration of the Agency's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts and
grants.
August 20, 2004
2
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3
LA QUINTA REDEVELOPMENT
AGENCY
Statement of Net Assets
June 30, 2004
Governmental Activities
2004
2003
Assets:
Cash and investments (note 2)
$ 44,248,109
35,991,319
Accounts receivable
141,113
139,347
Interest receivable
166,135
-
Notes receivable (note 3)
12,741,527
12,613,565
Deposits
-
185,000
Due from other governments
530,820
551,789
Advances to the City of La Quinta (note 4)
5,336,158
4,921,720
Restricted assets:
Cash and investments with fiscal agent (note 2)
95,419,807
30,019,213
Capital assets (note 5):
Land
68,488,416
51,450,306
Other capital assets, net
560,000
616,000
Total assets
_227,632,085
136 488,259
Liabilities:
Accounts payable
72,677
2,368,690
Interest payable
2,756,408
2,767,256
Deposits payable
46,499
47,144
Due to the City of La Quinta
2,746,630
-
Noncurrent liabilities (notes 7 to 12):
Due within one year
4,051,114
3,196,877
Due in more than one year
270025 3I7
172 977,863
Total liabilities
279,698645
181,357,830
Net assets:
Invested in capital assets, net of related debt _ _
Restricted for:
Low moderate housing 56,551,121 20,592,059
Capital projects 56,275,681 44,167,562
Unrestricted 164,893,362 109 629,192
Total net assets $ (52 066 560} (44 869 571)
See accompanying notes to the basic financial statements.
4
LA QUINTA REDEVELOPMENT AGENCY
Statement of Activities
Year ended. June 30, 2004
Program revenues
See accompanying notes to the basic financial stata m=ts.
5
I
Operating
Capital
-
Charges for Contributions
Contributions
Governmental Activities
-Expenses Services and Grants
and Grants
2004
2003
Governmental activities:
Planning and
development
$ 3,379,030 - -
369,709
(3,009,321)
(3,408,173)
Low and moderate
housing
18,477,569 - -
647,037
(17,830,532)
(8,988,127)
Interest expense
._
_12,279, - -
953__2,622,415)
-(12,279,953)
TOW governnnental
activities
$ 34,136,552 - -
1,016,746
(33,119,806)
(22018715
General revenues:
_
Taxes:
Property taxes
23,668,885
21,191,832
Investment income
893,828
666,854
Rental income
437,972
415,555
Gain (loss) on sale of capital assets
(56,763)
-
Miscellaneous revenues
978,895
336,541
Total general revenues
25,922,817
22,610,782
Change in net assets
(7,196,989)
592,067
Net assets (deficit) at beginning of year
_ (44,869,571)
45 461,638
Net assets (deficit) at end of year
$ (524066,560)
44,869 571
r
See accompanying notes to the basic financial stata m=ts.
5
I
:i
LA QUINTA REDEVELOPMENT AGENCY
a
Governmental Funds
- Balance Sheet
June 30, 2004
Special Revenue
Funds
Debt Service Funds
Low/Moderate
Low/Moderate
Redevelopment
Redevelopment
Income Housing -
Income Housing -
Agency -
Agency -
Assets
PA No. 1
PA No. 2
PA No. I
PA No. 2
Cash and investments
$ 1,588,670
5,645,763
16,134,876
5,021,687
Cash and investments with fiscal agent
-
-
309
11
Accounts receivable
71,713
8,500
-
_
Interest receivable
7,370
22,253
53,535
20,892
Notes receivable
3,241,527
9,500,000
-
_
Deposits
-
_
_
Due from other governments
58,936
47,228
235,743
188,913
Advances to the City of La Quinta
_
-
_
_
Total assets
$ 4,968,216
_15,223,744
_16,424,463
5,231,503 -
Liabilities and Fund Balances
Liabilities:
-
Accounts payable
$ 21,302
21,651
1,109
Deferred revenue
1,118,102
9,500,000
-
_
Deposits payable
18,664
-
_
_ -
Due to the. City of La Quinta
-
_
_
_
Advances from the City of La Quinta
-
-
12,335,283
16 3�35,gp0
Total liabilities
1,1582068
95 2, ,1,_651
_12,336,392
16,335,800
Fund balances:
Reserved for:
Bond projects
Debt service
-
4,088,071
Notes receivable
2,123,425
Deposits
-
Advances to the City of La Quinta
-
_
-
Unreserved, reported in:
Special revenue funds
1,686,723
5,702,093
-
Debt service funds
-
-
-
(11,104,297)
Capital projects funds
Total fund balanc6s (deficit)
3,810,148
5,702,093
4,0884071_(L1,104,297)
~
Total liabilities and fund balances
$ 4,968,216
15,223,744
I6,424,463
5,231,503
See accompanying notes to the basic financial statements
6
Capital Projects Funds
Redevelopment
2004
Other
Agency -
Low/Mod
GovemnienW
Totals
P.A. No, 1
Bond
Funds
2004
2003
-, 14,011,979
-
1,845,134
44,248,109
35,991,319
29,272,059
57,656,982
8,490,446
95,419,807
30,019,213
-
60,900
141,113
139,347
60,403
-
1,682
166,135
-
-
-
-
12,741,527
12,613,565
-
-
-
-
185,000
-
-
530,820
551,789
4,0752463
-
_ 1,260,695
5,336,158
_ 4,921,720
_ 47,419,904
57656,982
11 658 857
158,583,669
� 84 4� 253
16,531
-
12,084
72,677
2,368,690
-
-
-
10,618,102
10,495,979
-
-
27,835
46,499
47,144
-
-
2,746,630
2,746,630
-
-
28,671,083
21081,322
16,531
-
_ 2,786,549
42^ 15� 4,991
33,9932135
29,2722-059
57,656,982
8,490,446
95,419,487
30,016,934
-
-
-
4,088,071
2,273,059
-
-
2,123,425
2,117,586
-
185,000
4,075,463
-
1,260,695
5,336,158
3,811,874
-
-
7,388,816
7,868,117
(11,104,297)
(6,182,506)
14 055 851
_
(878,833
_ 13,177,018
10354
' 47,403,373
57,656,982
8,872,308
116,428,678,
50,428,818
47,419,904
57,6- 6556
_ 11,658,857
158158 583,669
84 4�3
7
LA QUINTA REDEVELOPMENT AGENCY
Governmental Funds
Reconcilation of the Balance Sheet of Governmental Funds to
the Statement of Net Assets
June 30, 2004 4
Fund balances of governmental funds $ 116,428,678
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets, net of depreciation, have not been -included
as financial resources in governmental fund activity.
Capital assets 69,288,416
Accumulated depreciation (240,000)
Long term debt has not been included in the governmental fund activity. (245,405,348)
Accrued interest payable for the current portion of interest due on
Long term debt has not been reported in the governmental hands. (2,756,408)
Revenues that are measurable but not available. Amounts are recorded
as deferred revenue under the modified accrual basis of accounting. 10,618,102
Net assets of governmental activities $ (52,066,560)
See accompanying notes to the basic financial statements.
8
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9
LA QUINTA REDEVELOPMENT AGENCY
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
Year ended June 30, 2004
_ Special Revenue Funds _
Debt Service Funds
Low/Moderate
Low/Moderateµ
Redevelopment
Redevelopment
Income Housing -
Income Housing -
Agency -
Agency -
PA No. 1
PA No. 2
PA No. I
PA No. 2
Revenues:
Taxes
$ 5,991,739
3,031,668
23,966,954
12,126,671
Developer fees
20,275
622,305
-
_
Investment income
-
109,504
201,721
75,625
Rental income
367,598
63,580
_
-
Miscellaneous revenues
856,474
122,421
Total revenues
7,236,086
3,9492478
24,168,675
12,202,296
Expenditures:
Current:
Planning and development
3,591,028
562,895
377,920
168,983
Debt service:
Principal
-
-
2,920,708
276,169
Interest and fiscal charges
-
9,018,568
1,536,694
Payments under pass-
through obligations
-
-
11,767,922
9,680,225
Total expenditures
3,591,028
562,895
24,0852118
11,662,071
Excess (deficiency) of
revenues over (under)
expenditures
3,6452058
3,386,583
83,557
540,225
Other financing sources (usq):
Issuance of tax allocation bonds
-
Proceeds from loans
-
-
16,961,867
4,584,240
Proceeds from sale of capital assets
-
108,570
-
-
Payment to bond escrow
-
-
(16,961,867)
(4,584,240)
Transfers in (note 14)
-
-
1,731,455
337,984
Transfers out (note 14)
(1,731,455)
(337,984)
-
(5,800,000)
Transfers from (to) the City of La Quinta
(2,216,625)
(3,437 986
-
_
Total other financing sources (uses)
(3,948280)
(3,667,400)
1,731,455
(5,462,016
Net change in fimd balances
(303,022)
(280,817)
1,815,012
(4,921,791)
Fund balances (deficit) at beginning of year
4;113,170
5,982,910
2,273,059
(6,1822506)
Fund balances (deficit) at end of year
$ 3,810,148
5,702,093
4,00888 071
(11,104,297)
See accompanying notes to the basic financial statements.
10
Capital 1'ro'ects Funds
Redevelopment
2004
Other
Agency -
Low/Mod
Governmental
Totals
PA No. 1
Bond
Funds
2004
2003
-
-
-
45,117,032
38,753,826
-
-
-
642,580
-
635,823
2,781
120,417
1,145,871
1,173,037
6,794
-
-
437,972
415,555
-
-
-
978,895
336,541
6„ 42,617
2,781
_ 120,417
48,322,350
_40,678 959
1,832,408
-
174,152
6,707,386
7,112,115
-
-
-
3,196,877
2,537,918
-
-
949,968
11,505,230
8,959,140
w -
-
-
21,448,147
17,561,994
1,832,408
-
1,124,120
4218572640
36,171,167
1 189 791
2,781
(1,003,703)
5464710
4,507,792
-
-
26,400,000
26,400,000
-
-
66,323,236
-
87,869,343
-
-
-
-
108,570
-
-
-
-
(21,546,107)
-
-
-
5,800,000
7,869,439
9,117,678
(7,869,439)
(9,177,678)
7,5022631_(8,669,035
(25,475,641)
(32,296,656)
(5,884,492
7 5�fi31
572654201
6,724,359
_ 60,535,150
(5,$84,492)
6,312,840
57,656,982
5,720,656
65,999,860
(1,376,700)
410,533
-
_ 3,151,652
50,4282818
51,805,518
47,403,373
57,656 82
8,872,308
116,428,678
50,428,818„
11
LA QUINTA REDEVELOPMENT AGENCY
Reconcilation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Year ended June 30, 2004
Net changes in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of
activities is different because:
$ 65,999,860
Governmental funds report capital outlay as expenditures. However, in the
statement of activities, th cost of those assets is allocated over their estimated
useful lives as depreciation expense. This is the. amount by which capital
outlays exceeded depreciation in the current period. 16,982,110
Proceeds from the issuance of debt is reported as other financing sources
in the governmental funds. The issuance of debt increases liabilities in the
statement of net assets, but does not result in an increase in the statement of
activities. (114,269,343)
Repayment of bond principal is an expenditure in the governmental funds,
but the repayment reduces long-term liabilities in the statement of net assets.
Principal repayment 3,196,877
Payment to bond escrow agent 21,546,107
Bond issuance costs are recorded as an expenditure in the governmental
funds while frill accrual requires the amortization of these costs over the life
of the debt. - (785,571)
The statement of net assets includes accrued interest on long term debt. 10,848
Revenues that are measurable but not available. Amounts are not recorded
as revenues under the modified accrual basis of accounting. 122 123
Changes in net assets of governmental activities g (7,196�ggg"
See accompanying notes to the basic financial•statements.
12
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
Year ended June 30, 2004
�' 1 Surra€.m of Si 7i�cant Accountin Policies
The following is a summary of the significant accounting policies of the La Quinta
;- Redevelopment Agency:
La) Organization and Tax Increment Financin
Redevelopment Goals and Objectives
The general objective of the Redevelopment Plan adopted by the Agency is to
encourage investment in the Redevelopment Project Areas by the private sector.
The Redevelopment Plan provides for the demolition of buildings and
improvements, the relocation of any displaced occupants, and .the construction of
streets, parking facilities, utilities and other public improvements. The
Redevelopment Plan also includes the ability to redevelop land by private enterprise
or public agencies, the rehabilitation of structures, the rehabilitation or construction
of single family and low and moderate income housing, and participation by owners
and tenants of properties in the Redevelopment Project.
Redevelopment Proiect Areas
The Agency has established two redevelopment project areas. On November 29,
1983 the City Council approved ,and adopted the Redevelopment Pian for the La
Quinta Redevelopment Project Area No. 1. On May 16, 1989 the City Council
approved and adopted the Redevelopment Plan for the La Quinta Redevelopment
Project Area No. 2. These plans provide for the elimination of blight and
deterioration that was found to exist in the project areas.
Tax Increment Financing
The Law provides a means for financing redevelopment projects based upon an
allocation of taxes collected within a redevelopment project. The assessed valuation
of a redevelopment project last equalized prior to adoption of a redevelopment plan
or amendment to such redevelopment plan, or "base roil", is established and, except
for any period during which the assessed valuation drops below the base year level,
the taxing bodies, thereafter, receive the taxes produced by the levy of the current
tax rate upon the base roll. Taxes collected upon any increase in assessed valuation
A over the base roll ("tax increment") are paid and may be pledged by a
redevelopment agency to the repayment of any indebtedness incurred in financing
or refinancing a :redevelopment project. Redevelopment agencies themselves have
no authority to levy property taxes.
13
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
W Surnmaa of Significant Accounting Policies Continued
b) Basis of Accounting and Measurement Focus
The basic financial statements of the Agency are composed of the following:
• Government -wide financial statements
• Fund financial statements
• ' Notes to the basic financial statements
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements include
separate columns for the governmental and business -type activities of the primary
government (including its blended component units), as well as its discreetly
presented component units. The La Quinta Redevelopment Agency has no business -
.type activities or discretely presented component units. Eliminations have been
made in the Statement of Activities so that certain allocated expenses are recorded
only once (by the function to which they were allocated). However, general
government expenses have not been allocated as indirect expenses to the various
functions of the Agency.
The accompanying government -wide financial statements for the Agency present
negative net assets because the primary activity of the Agency is to issue debt to
constraact infrastructure that will be owned and maintained by the City.
Government -wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic
resources measurement focus, all (both current and long-term) economic resources
and obligations of the reporting government are reported in the goverm ent-wide -
financial statements. Basis of accounting refers to when revenues and expenditures
are recognized in the accounts and reported in the financial statements. Under the
accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities
resulting from exchange and exchange -like transactions are recognized when the
exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities
resulting from nonexchange transaction are recognized in accordance with the
requirl ments of GASB Statement No. 33.
Program revenues include charges for services and payments made by parties
outside of the reporting government's citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the Y
statement of activities to present the net cost of each program.
14
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
1
Summa of Significant Accounting Policies, (Continued
Amounts paid to acquire capital assets are capitalized as assets in the government -
wide financial statements, rather than reported as an expenditure. Proceeds of long-
term debt are recorded as a liability in the government -wide financial statements,
rather than as an other financing source. Amounts paid 6 reduce long-term
indebtedness of the reporting government are reported as a reduction of the related
liability, rather than as an expenditure.
Fund Financial Statements
The underlying accounting system of the Agency is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting
entity. The operations of each fund are accounted for with a separate set of self -
balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses, as appropriate. Governmental resources are allocated to
41 and accounted for in individual funds based upon the purposes for which they are to
be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government's ,governmental, proprietary,
and fiduciary funds are presented after the government -wide financial statements.
`hese statements display information about major funds individually and nonmajor
funds in the aggregate for governmental and enterprise funds. Fiduciary statements
include financial information for fiduciary funds and similar component. units.
Fiduciary funds primarily represent assets held by the Agency in a custodial
capacity for other individuals or organizations. The Agency has. no nonmajor fields,
enterprise funds, or fiduciary funds.
Governmental Funds
n In the fund financial statements, governmental funds and agency funds are
presented using the modified -accrual basis of accounting,. Their revenues are
recognized when they become measurable and available as net current assets.
Measurable means that the amounts can be estimated, or otherwise determined.
Available means that the amounts were collected during the reporting period or
soon enough thereafter to be available to finance the expenditures accrued for the
reporting period. The Agency uses a sixty day availability period.
15
L.
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
I Summary of Significant Accouz tin Fol cies, (Continued)
Revenue recognition is subject to the measurable and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related goods
or services are provided). Locally imposed derived tax revenues are recognized as
revenues in the period in which, the underlying exchange transaction upon which
they are based takes place. Imposed tion -exchange transactions are recognized as
revenues in the period for which they were unposed. if the period of use is not
specified, they are recognized as revenues when an enforceable legal clairm to the T
revenues arises or when they are received, whichever occurs first. Government -
mandated and voluntary non-exchange transactions are recognized as revenues
when all applicable eligibility requirements have been met.
In the fund financial statements, governmental funds axe presented using the current
financial resources measurement focus, This means that only current assets and
current liabilities are generally included on their balance sheets. The reported hind
balance (net current assets) is considered to be a measure of "available spendable
resources." Governmental fund operating statements present increases (revenues
and other financing sources) and decreases (expenditures and other financing uses)
in net current assets. Accordingly, they are said to present a summary of sources
and uses of "available spendable resources" during a period.
Non-current portions of long-term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not be
considered "available spendable resources," since they do not represent net current
assets. Recognition of governmental fund type revenues represented by noncurrent
receivables are deferred until they become current receivables. Noncurrent portions
of other long-term receivables are offset by fund balance reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities. -
Since they do not affect net current assets, such long-term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year
that resources were expended, rather than as fund assets. The proceeds of long-term
debt are recorded as an other financing sources rather than as a fund liability.
Amounts paid to reduce long -terra indebtedness are reported as fund expenditures.
When,both restricted and unrestricted resources are combined in a fund, expenses
are considered to be paid first from restricted resources, and then from unrestricted
resources.
16
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
1
Summai
y of Si nificant Accounting Policies Continued
c Major Funds
The following funds are presented as major funds in the accompanying basic
financial statements:
Special Revenue Low and Moderate Income Housing P.A. No. 1 and No. 2 Funds
— To account for the required 20% set aside of property tax' increments that is
legally restricted for increasing or improving housing for low and moderate income
households.
Debt Service Funds, P.A. No. 1 and No. 2 — To account for the accumulation of
resources for the payment of debt service for bond principal, interest and trustee
fees.
Capital Projects Funds, P.A. No. 1 -- To account for the band proceeds, interest and
other funding that will be used for development, planning, construction and land
acquisition.
2044 Low and Moderate Income Housing Fund — To account for the bond proceeds,
interest and other funding that will be used for development, plaiming, construction,
and land acquisition for low and moderate income housing projects.
(d) Cash and Investments
For financial reporting purposes, investments are adjusted -'to their fair value
whenever the difference between fair value and the carrying amount, is material.
Changes in fair value that occur during a fiscal year are recognized as investment
income reported for that fiscal year. Investment income includes interest earnings,
changes in fair value, and any gains or losses realized upon the liquidation or sale of
investments.
e) Canital Assets
Capital assets (including infrastructure) are recorded at cost where historical records
T are available and at an estimated historical cost where no historical records exist.
Contributed fixed assets are valued at their estimated fair market value at the date of
the contribution. Generally, fixed asset purchases in excess of $5,000 are capitalized
if they have an expected useful life of three years or more. Buildings are depreciated
over a useful life of thirty years.
17
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
1) Summary of Significant Accounting Policies Continued
Capital assets include public domain (infrastructure) general fixed assets consisting
of certain improvements including roads, streets, sidewalks, medians, and storm
drains.
(f) g2Lnparative Data
Comparative total data for the prior year have been presented in the accompanying
financial statements in order to provide an understanding of changes in the
Agency's financial position and operations. However; comparative (i.e.,
presentation of prior year totals by fund type) data have not been presented in each
of the statements since their inclusion would make the statements unduly complex
and difficult to read. Certain miner reclassifications of prior year data have been
made in order to enhance their comparability with current year figures,
t2 Cash and Investments
Cash and investments held by the Agency at June 30, 2004 consisted of the following:
Equity in State of California Local Agency Investment Fund $ 6,524,262
Equity in City cash and investment pool 37,723,847
Total cash and investments held by the Agency $44.248,10 9
Cash and investments held by fiscal agent at June 30, 2004 consisted of the following:
U.S. Treasury Bills $89,348,970
Mutual funds - First American Treasury Obligations 6,070,83
Total cash and investments held by fiscal agent $95 .419
The Agency is authorized by the City's investment policy to invest in the following types
of investments:
Investment Type
U.S. treasuries and GNMA
FHLB, FFCB, FLB, FNMA, FHLMC
Student Loan Marketing Association
Government Pools
U.S., government and agency securities
Commercial Paper
Mutual Funds
Cbrtificates of Deposit
18
Restriction
None
$5 million per issuer
$3 million
$40 million and 20% of portfolio
100% of portfolio
$3 million per issuer, and 90 days
20%
60%
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
2) Cash and Investments. (Continued
Investments of cities in securities are classified in three categories to give an indication of
the levet of custodial risk assumed by the entity.
Category 1 - includes investments that are insured or registered or for which the securities
are held by the Agency or the Agency's custodial agent (which must be a different
institution other than the party through which the Agency purchased the securities) in the
Agency's name. Investments held "in the Agency's name" include securities held in a
separate custodial or fiduciary account and identified as owned by the Agency in the
custodian's internal accounting records.
Category 2 - includes uninsured and unregistered investments for which the securities are
held in the Agency's name by the dealer's agent (or by the trust depart sent of the dealer
if the dealer was a financial institution and another department of the institution
purchased the securities for the Agency.)
Category 3 - includes uninsured and unregistered investments for which the securities are
held by the dealer's trust department or agent, but not in the Agency's name. Category 3
also includes all securities held by the broker-dealer agent of the Agency (the party that
purchased the securities for the Agency) regardless of whether or not the securities are
being held in the Agency's name.
Carrying
Categoa Amount
1 2 3
U.S. Treasury Bills $ 89.348.970 89,348,970
Investments held by the City not subject to categorization:
Investment in State of California Local Agency Investment Fund 6,524,262
Equity in City cash and investment pool 37,723,847
Investments held by fiscal agent not subject to categorization:
Investment in mutual fluids:
First American Treasury Obligation Fund 6,070,837
39.667ib
19
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
2 Cash and Investments Continued
The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that
is regulated by California Government Code Section 15429 under the oversight of the
Treasurer of the State of California. The fair value of the City's investment in this pool is
reported in the accompanying financial statements at amounts based upon the City's pro -
rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to
the amortized cost of that portfolio). The balance available for withdrawal is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Included in LAIF's investment portfolio are collateralized mortgage obligations,
mortgage-backed securities, other asset-backed securities, loans to certain state 'funds, and
floating rate securities issued by federal agencies, government-sponsored enterprises, and
corporations.
Q Notes Receivable Outstanding
Balance at
In September 1994, the Agency sold certain real property to LINO lune 30, 2004
Housing for $2,112,847. The property was used to construct
single-family homes and rental units to increase the City's supply
of low and moderate income housing. The note bears interest at 6°/o
per annum and is due in full on June 15, 2029. $ 3,153,490
In December 2000, the Agency entered into an agreement with
LILAC Housing to receive $9,500,000 as a reimbursement for
Agency costs incurred for the construction of infrastructure related
to the development of senior apartments. Payments are due to the
Agency in the amount of annual positive cash flow generated by
the rental of the units. All unpaid principal and interest on the note
are due fifty-five years after the completion of the project. Interest
on the note accrues at 3% per annum. 9,500,000
Other notes 'receivable 88,037
Total notes receivable $12,741.527
+ 4 _ Advances to the Cit, of La Quinta
The Redevelopment Agency advanced funds to the City of La Quinta to help the City
meet the dost of developing the public -owned improvements to the La Quinta
Community, bark and Civic Center Campus. There is no stipulated repayment date
established ,for the Agency advances. Interest accrues at the earning rate of City's
Investment fool funds, and shall be adjusted quarterly. At June 30, 2004, outstanding
Project Area No. 1 advances were $4,075,463 and Project Area No. 2 advances were
$1,260,695:
20
i
LA QUINTA REDEVELOPMENT AGENCY
r Notes to the
Basic Financial Statements
(Continued)
5 Capital Assets
Capital asset activity for the year ended June 30, 2004 was as follows:
Balances at
Balances at
June 30, 2003 Additions
Deletions
June 30, 2004
Buildings
$ 840,000
(40,0 00
_500,000
Total cost of depreciable assets
840,000 -
(40,000)
800,000
Less accumulated depreciation for:
Buildings
_(224,000) _ (2. 6,667)
10,6672_
(.40,000)
Net depreciable assets
616,000 (26,667)
(29,333)
560,000
Capital assets not depreciated:
Land
51,450,306 17,174,110
136 000
68,488,416
Capital assets, net
$52.066.3064? 44
16l S•333)
69,048,416
Property Taxes
Under California law, property taxes.,are assessed and collected by the counties up to I%
of assessed value, plus other increases approved by the voters. The property taxes are
recorded initially in a pool, and are then allocated to the cities -'based on complex
formulas. Accordingly, the City of La Quinta accrues only those taxes that are received
from the County within sixty days after year-end.
Lien date January 1
Levy date July 1
Due dates November 1 and February 1
Collection dates December 10 and April 10
The La Quinta Redevelopment Agency's primary source of revenue comes from property
taxes. Property taxes allocated to the Agency are computed in the following tnanner:
(a) The assessed valuation of all property within the project area is determined on the
date of adoption of the Redevelopment Plan.
21
J
I
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
Pro ert Taxes Continued)
(b) Property takes 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 valuationof the property are allocated to the City and other
districts.
The Agency has no power to levy and collect taxes and arty legislative property tax shift
might reduce the amount of tax revenues that would otherwise be available to pay the
principal of, and interest on, debt, 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 increase the amount of tax
revenues that would be available to pay principal and interest on debt.
Long -Term Liabilities
Long-term liability activity for the year ended June 30, 2004 was as follows:
Amounts
Balance at Balance at due within
June 30.2003 Additions Deletions June 30, 2004 one year
Loans payable to City of La Quinta
Financing Authority
Project Area No. 1:
1994 Tax Allocation Bonds
1995 Housing Tax Allocation Bonds
1998 Tax Allocation Bonds
2001 Tax Allocation Bonds
2002 Tax Allocation Bonds
2003 Tax Allocation Bonds
Pass-through agreement payable:
Coachella Valley Unified School District
Advances from City of La Quinta
Loans payable to City of La Quanta
Financing Authority
Project Area No. 2:
1995 Housing Tax Allocation Bonds
1998 Tax Allocation Bonds
Due to Couniy of Riverside
Advances from City of La Quinta
Loans payable to City of La Quinta
Financing' Authority
ToW long-term liabilities
$ -
66,323,236
-
66,323,236
554,773
18,410,000
-
(1,325,000)
17,085,000
1,430,000
16,026,850
(16,026,850)
-
15,760,000
-
_
15,760,000
-
46,189,590
64,658
-
46,254,248
-
38,443,574
53,670
(565,000)
37,932,244
575,000
-
25,476,136
-
25,476,136
390,000
7,365,254
-
(711,877)
6,653,377
726,114
11,503,322
958,335
(126,374)
12,335,283
-
-
16,961,867
-
16,961,867
141,881
4,333,150
-
(4,333,150)
-
-
6,415,000
-
(90,000)
6,325,000
95,000
2,150,000
-
(100,000)
2,050,000
100,000
9,578,000
6,757,800
-
16,335,800
-
__ 4,584,240 4,584,240 38,346
,M_6..17" J .1�, 79.942 2.51) ?74.076.431 4.05].114
22
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
8) Tax Allocation Bonds
Tax Allocation Refunding Bonds, Series 1994
Tax allocation refunding bonds, Series 1994, in the amount of $26,665,000 were issued
by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance
certain capital improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds ranges frorrn 3.80% to 8% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the
bonds are payable solely from pledged tax increment revenues. The bonds are not subject
to redemption prior to maturity. There are certain limitations regarding the issuance of
parity debt as fw-ther described in the official statement. A portion of the proceeds was
used to obtain a surety agreement to satisfy the bond reserve requirement. The principal
balance of outstanding bonds at June 30, 2004 is $17,085,000.
Tax Allocation Refunding Bonds, Series 1998 - Proiect Area No 1
Tax allocation refunding bonds, Series 1998, in the amount of ,$15,760,000 were issued
by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain
capital improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on
March 1 and September 1. of each year until maturity. The interest .and principal of the
bonds are payable from pledged tax increment revenues. There are certain limitations
regarding the issuance of parity debt as further described in the official statement.
Term Bonds maturing September 1, 2028 are subject to mandatory sinking fund
redemption, in part by lot, on September 1, 2013 and on each September 1 thereafter,
through September 1, 2028, at a price equal to the principal amount thereof plus accrued
interest. A portion of the proceeds was used to obtain a surety agreement to satisfy the
bond reserve requirement. The principal balance of outstanding bonds at June 30, 2004 is
$15,760,000.
Tax Allocation Refunding -Bonds, Series 1998 - Pro iect Area No. 2
Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by
the Agency to refund the outstmiding aggregate principal amount of the Agency's Tax
Allocation Bands, Series 1992. The remaining proceeds were used to finance certain
capital improvements within the La Quinta Redevelopment Project Axea No. 2.
23
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
8 Tax Allocation Bonds Coxatix�xxed
Interest rates on the bonds range from 3.75% to 5.25% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the
bonds are payable solely from pledged tax increment revenues of Project Area No. 2.
Term Bonds maturing September 1, 2028 and September 1, 2033 are subject to
mandatory sinking fund redemption, in part by lot, on September 1, 2009 and
September 1, 2019, respectively, and on each September 1 thereafter at a price equal to
the principal. amount thereof plus accrued interest. There are certain limitations regarding
the issuance- of parity debt as further described in the official statement. A portion of the
proceeds was used to obtain a surety agreement to satisfy the bond reserve requirement.
The principal balance of outstanding bonds at rune 30, 2004 is $6,325,000.
Tax Allocation Bonds, Series 2001- Proiect Area No 1
On August 15, 2001, the Agency issued tax allocation bonds in the amount of
$48,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project
Area No. 1. The 2001 tax allocation bonds were issued at a discount of $422,400 and
issuance costs of $1,517,325.
The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature
on September 1, 2021_.and $30,720,000 of term bonds that accrue interest at 5.18% and
mature on September 1, 2031. The interest and principal on the bonds are payable from
pledged tax increment revenues.
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond
reserve requirement. The principal balance of outstanding bonds at June 30, 2004 is
$4+6,254,248 ($48,000,000 net ofunamortixed discount and issuance costs of $1,810,410).
Tax Allocation Bonds Series 2002 — Project Area No. 1
On .lune 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000
to finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1.
The 2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs
of $1,250,096. At June 30, 2003, the unexpended balance of bond proceeds is
$1,014,486.
The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest
rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on
March 1 mid September 1 of each year until maturity. Terra bonds accrue interest at
5.00% and 5.125% and mature on September 1, 2022 and September 1, 2023. The
interest and principal on the bonds are payable from pledged tax increment revenues.
24
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
Tax Allocation Bonds, (Continued)
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond
reserve requirement. The principal balance of outstanding bonds at June 30, 2004 is
i $37,932,244 ($39,435,000 net of unamortized discount and issuance costs of $1,502,756).
Tax Allocation Bonds, Series 2003 — Project Area No. I
On September 1, 2003, the Agency issued tax allocation bonds' in the amount of
$26,400,000 to finance capital projects benefiting the La Quinta Redevelopment Project
Area No. 1. The 2003 tax allocation bonds were issued at a discount of $277,200
issuance costs of$629,191.
Interest is payable semi-annually on March 1 and September 1 of each year, commencing
March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest
and principal on the bonds are payable franc pledged tax increment revenues.
Tern bonds maturing on September 1, 2013 through September 1, 2032 are subject to
mandatory redemption frOln minimum sinlung fund payments, in pari by lot, on
September 1, 2004, September 1, 2014, and September 1, 2024, respectively, and on each
September 1 thereafter at a redemption price equal to the principal amount thereof plus
accrued interest to the redemption date.
A portion of the proceeds was used to obtain a surety agreement to satisfy the bond
reserve requirement. There are certain. Iimitations regarding the issuance of parity debt as
further described in the official statement. The principal balance of outstanding bonds at
June 30, 2004 is $25,476,136 ($26,400,000 net of unamortized discount and issuance
costs of $923,864).
25
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
. (Continued)
$
Tax Allocation Bonds
Continued
The minimum annual
requirements (including sinking fund
requirements) to
amortize
Project Area No. 1 tax allocation
bonds as
of June 30, 2004 are
as follows:
Pro ect
Area NGA
1994
112 998 Tax Allacwi2g Bonds
2001 Tax Alloc®man B onds
208,,,E -IM Allocation
Bonds
2003 Tax Allocation Bonds
June 30
Friaelosl
ntereaC
l weZ'oe29
W99t
)snclw
intee m
Princlnal
We
2005
$1,430,000
1,182,140 -
819,520
-
2,430,720
575,000
1,895,131
390,000
1,602,458
2006
1,510,000
1,087,700 -
819,520
-
2,430,720
585,000
1,882,361
405,000
1,585,604
2007
1,620,000
973,455 -
819,520
-
2,430,720
600,000
1,867,091
420,000
1,568,114
2008
1,740,000
850,815 -
819,520
-
2,430,720
615,000
1,849,617
440,000
1,549,882
2009
1,865,000
719,233 -
819,520
-
2,430,720
635,000
1,829,914
460,000
1,530,802
2010
2,000,000
578,160 -
819,520
-
-2,430,720
660,000
1,807,557
475,000
1,508,106
2011
2,145,000
426,868 -
819,520
2,430,720
680,000
1,782,926
505,000
1,481,401
2012
2,305,000
264,443 -
819,520
-
2,430,720
705,000
1,756,430
530,000
1,453,198
2013
2,470,000
90,155 -
819,520
-
2,430,720
735,000
1,727,981
560,000
1,423,496
2014
-
- 655,ODO
802,490
1,565,000
2,391,595
705,000
1,695,656
590,000
1,392,158
2015
-
- 690,000
767,520
1,645,000
2,311,345
735,000
1,659,656
620,000
1,356,736
2016
-
- 725,000
730,730
1,730,000
2,226,970
770,000
1,622,031
660,000
1,316,800
2017
765,000
691,990
1,815,000
2,138,345
810,000
1,562,531
700,000
1,274,368
2018
- 800,000
651,300
1,905,000
2,045,345
855,000
1,540,906
745,OD0
1,229,284
2019
-
- 845,000
608,530
2,000,000
1,947,720
895,000
1,497,156
790,000
1,181,392
2020
-
- 890,000
563,420
2,100,000
1,845,220
940,000
1,451,281
840,000
1,130,536
2021
-
- 935,000
515,970
2,205,000
1,737,595
985,000
1,403,156
895,000
1,076,404
2022
-
- 985,000
466,050
2,315,000
1,624,595
1,035,000
1,352,656
950,000
1,018,840
2023
-
- 1,035,000
413,530
2,430,000
1,504,755
1,090,000
1,299,531
1,010,000
957,688
2024
-
- 1,090,000
358,260
2,555,000
1,377,637
1,140,000
1,243,069
1,075,000
892,636
2025
- 1,145,000
300,170
2,685,000
1.244,018
1,200,000
1,183,106
1,140,ODO
822,388
2026
-
- 1.205,000
239,070
2,820,000
1,103,640
1,265,000
1,119,941
1,215,000
746,557
2027
-
- 1.265,000
174,850
2,965,ODO
956,123
1,330,000
1,053,444
1,290,000
665,896
2028
-
- 1,330,000
107,380
3,120,ODD
800,955
1,395,000
983,615
1,375,000
580,083
2029
-
1,400,000
36,400
3,275,000
637,882
1,470,000
910,200
1,465,000
488,635
2030
-
-
3,445,000
466,523
3,015,000
795,272
1,555,000
391,391
2031
3,620,000
286,365
3,170,000
636,781
1,655,000
288,029
2032
3,805,000
97,027
3,335,000
470,091
1,765,000
177.905
2033
-
-
7,505,000
192,316
1,880,000
60,536
2034
L 70J 3M
6.172.969,i4.40n`30751.323-
26
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
8 Tax Allocation Sonds Continued
The minimum ar mual requirements (including sinking fund requirements) to amortize
Project Area No. 2 tax allocation bonds as of June 30, 2004 are as follows.
27
Project Area No.
2
149. 8 Tax Allocation
Bonds
June 30
_'z7nci _
interest
2005
$ 95,000
323,264
2006
100,000
319,168
2007
105,000
314,785
2008
110,000
310,135
2009
2010
115,000
305,194
2011
120,000
125,000
299,550
293,272
2012
130,000
286,737
2013
140,000
279,819
2014
145,000
272,516
2015
150,000
264,956
_. 2016
160,000
257,013
2017
170,000
248,556
2018
2019
175,000
185,000
239,716
230,491
- 2020
195,000
220,631
2021
205,000
210,131
2022
215,000
199,106
2023
230,000
187,425
2024
240,000
175,087
2025
255,000
162,094
2026
265,000
148,444
2027
280,000
134,138
2028
295,000
119,044
2029
310,000
103,163
2030
325,000
86,494
2031
345,000
68,906
2032
360,000
50,400
2033
380,000
30,975
2034
400 000
10,500
$6,325,000 _
61151100
27
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(9) Loans Payable to the City of La Quinta Financing Authority
On ,Tune 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount
of $90,000,000 to finance projects benefiting law and moderate income housing in La
Quinta Redevelopment. Project Area No. 1 and the La Quinta Redevelopment Project
Area No. 2 and to advance refund the Agency's Redevelopment project Areas No. I and
2, 1995 Housing Tax Allocation Bonds. The La Quinta Financing Authority loaned
$87,869,343 of the proceeds of the bonds to the La Quinta Redevelopment Agency.
Interest is payable semi-annually on March 1 and September 1 of each year, commencing
September 1; 2004. Interest payments range from 3% to 5.25% per annum. The interest
and principal on the bonds are payable from pledged tax increment revenues.
Term bonds maturing on September 1, 2024, September 1, 2029 and 'September 1, 2034
are subject to mandatory redemption from minimum sinking fund payments, in part by
lot, on September 1, 2417, September 1, 2025, and September 1, 2034, respectively, and
on each September 1 thereafter at a redemption price equal to the principal amount
thereof plus accrued interest to the redemption date.
A portion of the proceeds was used to obtain a surety agreement to satisfy the bond
reserve requirement. There are certain limitations regarding the issuance of parity debt as
further described in the official statement. The principal balance of outstanding loans
payable to the Financing Authority at June 30, 2004 is $87,869,343.
28
9
R
' LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(g) Loans Payable to the City of La Quinta Financing Authority, (Continued)
The minimum annual requirements to repay the loan to the Financing Authority as of
June 30, 2004 are as follows:
29
2004 Series A Revenue Bonds
June 30
Principal
Interest
2005
$ 735,000
2,990,049
2006
1,520,000
4,436,981
2007
1,570,000
4,403,156
2008
1,615,000
4,356,806
2009
1,670,000
4,304,994
2010
1,740,000
4,243,332
2011
1,805,000
4,175,132
2012
1,890,000
4,099,719
2013
1,975,000
4,016,581
2014
2,075,000
3,924,681
2015
2,175,000
3,823,431
2016
2,290,000
3,714,462
2017
2,410,000
3,597,256
2018
2,535,000
3,473,881
2019
2,670,000
3,344,075
2020
2,810,000
3,207,444
2021
2,960,000
3,063,594
2022
3,115,000
2,912;132
2023
3,275,000
2,752,663
2024
3,450,000
2,584,925
2025
3,630,000
2,408,394
2026
3,810,000
2,227,082
2027
4,000,000
2,041,082
2028
4,200,000
1,845,832
2029
4,410,000
1,640,832
2030
4,635,000
1,425,582
2031
4,870,000
1,196,560
2032
5,120,000
952,994
2033
5,380,000
697,000
2034
3.1529,343
572s969
37 861343
-88,433.621
29
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
.(Continued)
10) Due to Countv of Riverside
Proiect Area No. 2
Based on an agreement dated July 5, 1989 between the Agency and the County, until the
tax increment reaches $5,000,000 annually in Project Area No, 2, the Agency will pay to
the County 50% of the County portion of tax increment. At the County's option, the
County's pass-through portion can be retained by the Agency to finance new County
facilities or land costs that benefit the County and serve the La Quinta population. Per the
agreement, the Agency must repay all amounts withheld from the County. The tax
increment is to be paid to the County in amounts ranging from $100,000 to $250,000
over a payment schedule through June 30, 2015. Interest does not accrue on this
obligation. The balance at June 30, 2004 is $2,050,000.
The minimum annual requirement to amortize due to County of Riverside as of June 30,
2004 are as follows:
June 30 Principal
2005
$ 100,000
2006
100,000
2007
100,000
2008
150,000
2009
200,000
2010
200,000
2011
200,000
2012
250,000
2013
250,000
2014
250,000
2015
250.000
30
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
r 11 Pass-through Agreement Payable to Coachella Valley Unified School District
An agreement was entered into in 1991 between the Agency, the City of La Quinta and
the Coachella Valley Unified School District (District), which provides for the payment
to the District a. portion of tax increment revenue associated.. with. properties within
District confines. Such payments are -subordinate to other indebtedness of the Agency
incurred in furtherance of the Redevelopment Plan for Project Area No. 1. This tax
increment is paid to the District over a payment schedule through August 1, 2012 in
amounts ranging from $474,517 to $834,076 for a total amount of $15,284,042. Tax
increment payments outstanding at June 30,, 2004 totaled $6,653,37. The District agrees
-to use such funds to provide classroom and other construction costs, site acquisition,
school buses, expansion or rehabilitation of current facilities.
The minimum annual requirements to amortize payable .to Coachella Valley Unified
School District as of June 30, 2003 are as follows:
June 30 Pri� ncil)al
2005 $ 726,114
2006 740,636
' .2007 755,.449
2008 770,558
2009 785,968
2010 801,688-
2012
01,688-
2012 . 834,076
2013 42-1,166
12 Adypm from the City of La Ouinta
.� The City of U Quinta advances money to the Redevelopment Agency to cover operating
and capital shortfalls. There is no stipulated repayment date established for the City
advance. Interest accrues at 10% per annum. In fiscal year ended June 30, 2004, the City
of La Quinta advanced money to Project Area. No. 1 in the amount of $6;397,129 with
interest accruing at 7% per annum. The maturity date for this advance is November 29,
} 2033. At June 30, 2004, the outstanding balances for Project Area No. 1 and Project Area
No. 2 are $12,335,283 and $16,335,800, respectively.
- 31
LA. QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
(13) .pledged Tax Revenues
All tax revenues received by the Agency other than the amount required by law to be
deposited in a low and moderate income housing fund, are required to be used to meet
debt service requirements of the bond indentures before any payments may be made on
other obligations of the Agency.
(14) Transfers In and Out
The following transfers were made during the -year ended June 30,.2004:
Transfers to the Debt Service — Project Area No. 1 'Fund from:
Special Revenue — Low/Moderate Income
Housing— Project Area No.- 1
Transfers to the Debt Service — Project Area No. 2 Fund from:
Special Revenue-- Low/Moderate Income
Housing — Project Area No. 2
Transfer to the Capital Proj ect -- Proj ect Area No. 2 Fund from:
Debt Service — Project Area No. 2
Total transfers. .
$1,731,455 (A)
337,984 (A).
5,800,000 (B)
U. $
(A) $1,731,455 and $337,984 were transferred to the Debt Service — Project Area No.
1 and 2 Funds from the Low/Moderate Income Housing — Project Area No. 1 and
2 Funds for debt service payments on the 1995 Housing Tax Allocation Bonds.
(E) Proceeds of advances were transferred to the respective Capital Projects Funds to
provide financing for certain capital projects.
(15) Educational Revenue Augmentation Fund (ERAF) PAWent
During fiscal year ended June 30, 2004, Chapter 1127 of the 2002 Statutes of the State of
California require redevelopment agencies to shift $135,000,000 in property tax revenue
to kindergarten through twelfth grade schools and communit} colleges, The State
Department ,of Finance has determined that the La Quinta redevelopment Agency
amount is $1,467,995 of the $135,000,000 which was forwarded to the Riverside County
Auditor in accordance with,the statute.
32
LA QUINTA REDEVELOPMENT AGENCY
Notes to the Basic Financial Statements
(Continued)
e
.(10 -Fund Deficit
At June 30, 2004, the Redevelopment Agency, PA No. 2 had a deficit .fund balance of
$11,104,297. The deficit was created by outstanding advances from the City of La
Quinta which are intended to be paid back in the future with anticipated tax increment
revenues.
r..
33
(This page intentionally left blank)
34
LA QUINTA REDEVELOPMENT AGENCY
Notes to Required Supplementary Information
Year ended June 30, 2004
1) Budgets and BudRetary Accountin,
The Agency adopts an annual budget prepared on the modified accrual basis of
accounting for its governmental funds. The City Manager or his designee is authorized to
transfer budgeted amounts between the accounts of any department. Revisions that alter
the total appropriations of any department or fund are approved by City Council.
Appropriations were $3,318,296 during the year. Prior year appropriations lapse unless
they are approved for carryover into the following fiscal year. Expenditures may not
legally exceed appropriations at the department level. Reserves for encumbrances are not
recorded by the City of La Quinta.
36
Expenditures:
Current:
Planning and development
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
5,037,558
LA QUINTA REDEVELOPMENT AGENCY
562,895
5,146,310
765,795 -
Low/Moderate Income Housing Fund - PA No. 2
5,709,205
562,895
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual
4,774,769
4,243,534
Year ended June 30, 2004
856,951
1,842,709
Variance with
Prior
Budget
Final Budget
Year
Original Final Actual
Positive (negative
Actual
Revenues:
Taxes
$ 2,730,853 2,871,265 3,031,668
160,403
2,479,241
Developer fees
7,054,074 7,054,074 622,305
(6,431,769)
129,263 `
Investment income
27,400 27,400 109,504
82,104
-
Rental income
- - 63,580
63,580
-
Miscellaneous
- - 122,421
122,421
-
Total revenues9
812,327 9,952,739 3,949,478
6,003 261
2,609 504
Expenditures:
Current:
Planning and development
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
5,037,558
5,709,205
562,895
5,146,310
765,795 -
5,037,55
5,709,205
562,895
5,146,310
765,795 v
4,774,769
4,243,534
3,386,583
856,951
1,842,709
Other financing sources (uses):
Sale of capital assets - - 108,570
Transfers in -
Transfers out - (6,688,211) (337,984)
Transfers to the City of La Quinta 3,442,855 (3,442,855) 3,437,986
Total other financing
sources (uses)
i
Net change in fund balances
Fund balances at begin=" g of year
Fund balances at end of year
(3,44Z,855) 10,131,066 3,667 400
1,331,914 (5,887,532) (280,817)
5,982,910 5,982,910 5,982,910
7,3� 14,824 95,378 5,702,093
38
108,570
6,350,227
4,869
6,4� 6
5,606,715
5,606,715_
19,861
(338,895)
246,8581
565,892
1,276,817
4,746,093
5,982,910
SUPPLEMENTARY INTORMATION
39
LA QUINTA REDEVELOPMENT AGENCY
Non -Major Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
Year ended June 30, 2004
Revenues:
Investment income
Total revenues
Expenditures:
Current:
Planning and development
Debt service:
Interest and fiscal charges
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Issuance of tax allocation bonds
Transfers in
Transfers from (to) the
City of La Quiuta
Total other financing
sources (uses) .
Net change in find balances
Fund balances at beginning of year
Fund balances at end of year
Special Revenue
Fund - Ca ital Pro'ects Funds
Low/Moderate Redevelopment Redevelopment
Bond - Agency - Agency - Taxable
$ - 49,219
49,219
71,198
71,198
174,152 _
174,152
949,968
949,968
Totals
2004
2003
1069 913
(74,623) 51,463
120,417
82,124
71623 3,077,029
120,417
82,124
174,152 217,599
949,968 -
11,120 217,599
124,933 878 770 l 003 703 Q35,475
- 26,400,000 26,400,000 -
- 5,800,000 - 5,800,000 1,100,000
(742623) (5,6237605) (19,777,414) (25L475,641) 2169913
(74,623) 1^76396
62,586 6,724,359
1069 913
(74,623) 51,463
5,743,816 5,720,656
(1,205,388)
71623 3,077,029
- 3,151,652
4,357,040
$$ 3,12'8,492
5,743,816 8,8722308
3,151,652
41
CONRADAND
ASSOCIATES, L.L.P.
Board of Directors
La Quinta Redevelopment Agency
La Quinta, California
CERTIFIED PUBLIC ACCOUNTANTS
2301 DUPONT DRIVE, SUITE 200
IRVINE, CALIFORNIA 92612
(949) 474-2020
Fax (949) 263-5520
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMET)
We have audited the financial statements of the La Quinta Redevelopment Agency as of and for
the year ended June 30, 2004, and have issued our report thereon dated August 20, 2004. Vire
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
AuditingStandards, issued by the Comptroller General of the United States.
Compliatnce
As part of obtaining reasonable assurance about whether the financial statements of the La
Quinta. Redevelopment Agency acre free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts and grants, noncompliance
with which could have a direct and material effect on the determination of financial statement
amounts. Such provisions include those provisions of laws and regulations identified in the
Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State
Controller. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance that are required to be reported under Government
Auditing Standards.
Internal Control Over Financial Re o_ r#ir>
In planning and performing our audit, we considered the La Quinta Redevelopment Agency's
internal control over financial reporting in order to determine our auditing procedures for the
purpose of expressiing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting. Our consideration of the internal control over financial
reporting would not necessarily disclose all matters in the internal control over financial
reporting that might be material weaknesses. A material weakness is a condition in which the
design or operation'of one or more misstatements in amounts that would be material in relation
to the financial statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. We noted no matters
involving the internal control over financial reporting and its operation that we consider to be
material weaknesses.
This report is intended solely for the information and use of the Audit committee, management,
and the State Controller and is not intended to be and should not be used by anyone other than
those specified partiles.
August 20, 2004: '
42
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION