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2007 11 20 RDAea# 44Rdja Redevelopment Agency agendas are available on the City' web page @ www.la-quinta.org REDEVELOPMENT AGENCY AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting TUESDAY, NOVEMBER 20, 2007 3:00 P.M. Closed Session / 4:00 P.M. Open Session Beginning Resolution No. RA 2007-017 CALL TO ORDER Roll Call: Agency Board Members: Adolph, Henderson, Kirk, Sniff, and Chairman Osborne PUBLIC COMMENT At this time, members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CLOSFrD SESSION NOTE: Time permitting the Redevelopment Agency Board may conduct Closed Session discussions during the dinner recess. In addition, persons identified as negotiating parties are not invited into the Closed Session meeting when acquisition of real property is considered. CONFERENCE WITH THE CITY'S REAL PROPERTY NEGOTIATOR, DOUGLAS IR. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY IDENTIFIED AS APN: 649- 030-016, AND -017. PROPERTY OWNERS/NEGOTIATORS: JERRY JOHNSON, DESERT EUROPEAN MOTOR CARS, LTD. 001 Redevelopment Agency Agenda 1 November 20, 2007 RECESS TO CLOSED SESSION RECONVENE AT 4:00 P.M. 4:00 P,.M. PUBLIC COMMENT At this time members of the public may address the Redevelopment Agency on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CONFIRMATION OF AGENDA APPROVAL OF MINUTES APPROVAL OF MINUTES OF NOVEMBER 6, 2007. CONSENT CALENDAR NOTE: Consent Calendar items are considered to be routine in nature and will be approved by one motion. 1 . APPROVAL OF DEMAND REGISTER DATED NOVEMBER 20, 2007. 2. RECEIVE AND FILE TREASURER'S REPORT DATED SEPTEMBER 30, 2007. 3. RECEIVE AND FILE REVENUE & EXPENDITURES REPORT DATED SEPTEMBER 30, 2007. 4. APPROVAL OF THE SEPARATELY -ISSUED LA QUINTA REDEVELOPMENT AGENCY ANNUAL AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2007. 5. APPROVAL OF AN APPROPRIATION TO REMOVE DEBRIS AT SILVERROCK RESORT FROM PHASE I CONSTRUCTION. 6. AUTHORIZATION FOR OVERNIGHT TRAVEL FOR ASSISTANT CITY MANAGER -DEVELOPMENT SERVICES AND ONE MANAGEMENT ANALYST TO ATTEND THE 2008 CALIFORNIA REDEVELOPMENT ASSOCIATION (CRA) ANNUAL CONFERENCE AND EXPO TO BE HELD IN ANAHEIM, CALIFORNIA, MARCH 26-28, 2008. Redevelopment Agency Agenda 2 November 20, 2007 U BUSINESS SESSION - NONE STUDY SESSION — NONE CHAIR AND BOARD MEMBERS' ITEMS — NONE PUBLIC HEARINGS For all Oublic Hearings on the agenda, a completed "request to speak" form must be filed with the City Clerk prior to consideration of that item. 1. PUBLIC HEARING TO REVIEW AND TAKE TESTIMONY ON THE MID -YEAR REVIEW OF THE THIRD FIVE YEAR IMPLEMENTATION PLAN FOR THE LA QUINTA REDEVELOPMENT AGENCY PROJECT AREA NOS. 1 AND 2 AND TO COMMIT ADDITIONAL PROGRAMS TO THE THIRD FIVE YEAR PLAN. ADJOURNMENT The next regular meeting of the Redevelopment Agency will be held on December 4, 2007, commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of November 20, 2007, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 111, on November 16, 2007. DATED;Qui er 16, 2007 VERONTECINO, City Clerk City of California 001 Redevelopment Agency Agenda 3 November 20, 2007 AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: November 20, 2007 BUSINESS SESSION ITEM TITLE: Demand Register Dated CONSENT CALENDAR / November 20, 2007 STUDY SESSION PUBLIC HEARING RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and File the Demand Register Dated November 20, 2007 of which $150,716.50 represents Redevelopment Agency Expenditures PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA 001, COUNCIIL/RDA MEETING DATE: November 20, 2007 ITEM TITLE: Receive and File Transmittal of Treasurer's Report dated September 30, 2007 RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and file. AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA 00) COUNCIL/RDA MEETING DATE: November 20, 2007 ITEM TITLE: Receive and File Transmittal of Revenue and Expenditure Report dated September 30, 2007 RECOMMENDATION: Receive and File BACKGROUND AND OVERVIEW: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: 3 STUDY SESSION: PUBLIC HEARING: Transmittal of the September 30, 2007 Statement of Revenue and Expenditures for the La Quinta Redevelopment Agency. Respectfully submitted, John M. Falconer, Finance Director Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Revenue and Expenditures, September 30, 2007 005 Attachment 1 LA OUINTA REDEVELOPMENT AGENCY REVENUE SUMMARY PROJECT AREA LOW/MODERATE BOND FUND: Allocated Interest Home Bale Proceeds Non Allocated Interest Transfer In TOTAL LOW/MOD BOND LOW/MODERATE TAX FUND: Tax Increment Allocated Interest Non Allocated Interest Miscellaneous revenue Non Allocated Interest LORP-Rent Revenue Home Sales Proceeds Sale of Land Sewer Subsidy Reimbursements Rehabodatton Loan Repayments 2nd Trust Deed Repayment Transfer in TOTAL, LOW/MOD TAX DEBT SERVICE FUND: Tax Increment Allocated Interest Non Allocated Interest Interst. County Loan Interest Advance Proceeds Transfers In TOTAL DEBT SERVICE 07/01/2007 - 9/3012007 REMAINING % BUDGET RECEIVED BUDGET RECEIVED 000 000 000 0 000 % 000 000 000 0 000 % 000 000 000 0000% 000 000 000 0000% 000 0 00 0 00 0 000 % 10.600.600 00 7464 10,600,525 36 0000% 404,800 00 000 404,800 00 0 000 % 000 37924 (379 24) 0000% 000 125,000 00 (125,000 00) 0000% 000 000 000 0000% 252,000 00 49,583 00 202,417 00 19 680 % 150,000 00 158,060 85 (8,060 85) 105 370% 000 000 0.00 0000% 000 2,14459 (2,14459) 0000% 000 000 000 0000% 000 55,36250 (55,36250) 0000% 313,156.00 000 31315600 0000% 11,720,556 00 390,604.82 11.329,951 18 3 330 % 42,638,70000 (29854) 42,638,99854 0000% 896,10000 000 896,10000 0.000% 000 000 000 0000% 000 000 000 0000% 000 000 000 0000% 4,450,261 00 2,925.794 41 1,524,466 59 65 740% 47,985,06100 2,925,49587 45,059,56513 6100% CAPITAL IMPROVEMENT FUND - NON-TAXABLE Pooled Cash Allocated Interest 37,90000 000 37.90000 0000% Non Allocated Interest 500,00000 203,12989 296,87011 40630% Developper Agreement Funding 000 000 000 0.000% Sale of Land Proceeds 3,894,600 00 000 3.894,600 00 0000% Rental Income 000 000 coo 0000% Transfers In 25,000,000 00 000 25,000,000 00 0 000% TOTAL CAPITAL IMPROVEMENT 29,432,50000 203,12989 29,229,37011 _ 0690% CAPITAL IMPROVEMENT FUND - TAXABLE Pooled Cash Allocated Interest 000 0.00 000 0.000% Non Allocated Interest 0,00 000 000 0000% Litigatian Settlement Revenue 000 000 000 0000% Bond proceeds 000 000 000 0000% Rental Income 000 000 000 0000% Transfers In 000 000 000 0000% TOTAL CAPITAL IMPROVEMENT 000 coo 000 0000% 007 LA QUINTA REDEVELOPMENT AGENCY EXPENDITURE SUMMARY PROJECT AREA NO. 1: LOW/MODERATE BOND FUND LOW/MODERATF TAX FUND: DEBT SERVICE FUND 07/01/2007 - 09/30/2007 REMAINING BUDGET EXPENDITURES ENCUMBERED BUDGET PERSONNEL 000 000 000 000 SERVICES 000 000 000 000 REIMBURSEMENT TO GEN FUND 000 0.00 000 000 HOUSING PROJECTS 000 000 000 000 TRANSFERS OUT 000 0.00 000 000 TOTAL LOW/MOD BOND u uu 000 000 u-00 PERSONNEL 1,10000 80515 000 29485 SERVICES 362,76400 49,30665 000 313,45732 BUILDING HORIZONS 0,00 22,06928 000 (22,06928) LQ RENTAL PROGRAM 200,00000 12,86815 000 187,13185 2nd TRUST DEED PROGRAM 250,00000 191,05000 000 58,95000 LAND ACQUISITION 10,276, 12700 57,90000 000 10,218,22700 FORECLOSURE 150,00000 000 000 150.00000 REIMBURSEMENT TO GEN FUND 652,471 00 163,11744 0 00 489.353 56 TRANSFERS OUT 4,450,26100 2,925,79441 000 1,524,46659 TOTAL LOW/MOU TAX SERVICES 457,30000 7,01266 000 450,28734 BOND PRINCIPAL 3,514,579.00 2,795,00000 000 719,57900 BOND INTEREST 7,500,553 00 3,791,308 13 0 00 3,709,244 87 INTEREST CITY ADVANCE 1,020,000 00 255,000 00 0 00 765,000 00 PASS THROUGH PAYMENTS 22,808,012 00 386,467 59 0 00 22 421,544 41 ERAF SHIFT 000 000 000 000 TRANSFERS OUT 28,970,96000 2,519,31935 000 26451,64065 TOTAL DEBT SERVICE CAPITAL IMPROVEMENT FUND: PERSONNEL 1, 10000 80515 000 29485 SERVICES 774,22600 57,73938 000 716,48662 LAND ACQUISITION 000 000 000 000 ASSESSMENT DISTRICT 000 000 000 000 ADVERTISING -ECONOMIC DEV 000 000 000 000 ECONOMIC DEVELOPMENT 000 0 00 0 00 000 BOND ISSUANCE COSTS 000 000 0 00 0 00 CAPITAL -BUILDING 10,00000 000 000 10.00000 REIMBURSEMENT TO GEN FUND 311,033 00 77,757 96 000 233,275 04 TRANSFERS OUT 63,089,04000 767,80335 000 62, 321,23665 TOTAL CAPITAL IMPROVEMENT F29NT9_ CAPITAL IMPROVEMENT FUNDITAXABLE BOND BOND ISSUANCE COSTS 000 000 000 000 TRANSFERS OUT 000 000 000 000 TOTAL CAPITAL IMPROVEMENT 000 000 000 ME LA OUINTA REDEVELOPMENT AGENCY 0710112007-913012007 REMAINING % REVENUE SUMMARY' BUDGET RECEIVED BUDGET RECEIVED PROJECT AREA NO. 2: LOW/MODERATE BOND FUND: Allocated Interest 000 0 00 000 0 000 % Non Allocated Interest 000 000 000 0000% Bond proceeds (net) 000 000 000 0.000% Transfer In 000 000 000 0000% TOTAL LOW/MOD BOND 000 000 000 0000% LOWIMODERATE TAX FUND: Tax Increment 5,563,90000 000 5,563,90000 0,000% Allocated Interest 742,10000 000 742,10000 0000% Non Allocated Interest 000 000 000 0000% Developer funding 000 000 000 0 000 % Vista [)ones MHP Rental Rev 000 0.00 000 0000% 2nd Trust Deed Repayment 000 59,21900 (59,21900) 0000% ERAF 51dt-Interest 000 000 000 0000% Sale of Land 12,694,30100 000 12,694,301.00 0,000% Transfer In 000 000 000 0000% TOTAL LOW/MOD TAX 19,000,301 00 59,219 00 18,941,082 00 0 310% 2004 LOW/MODERATt BOND FUND: Allocated Interest 000 000 000 0000% Home (Sale Proceeds 000 000 0.00 0000% Non Allocated Interest 2,000,000 00 522,222 99 1,477,777 01 26 110% Transfer In 000 000 000 0000% TOTAL LOWIMOD BOND 2.000000.00 522,222.99 1,477,77701 26110% DEBT SERVICE FUND,: Tax Increment 22,923,10000 000 22,923,10000 0000% Allocated Interest 573,20000 0.00 573,20000 0000% Non Allocated Interest 000 000 000 0000% Interest Advance Proceeds 000 000 000 0000% Transfer In 1,955,84600 1,240,858.77 714987.23 63440% TOTAL DEBT SERVICE 25,452,14600 1,240,858.77 24,211,28723 4880% CAPITAL IMPROVEMENT FUND: Allocated Interest 58,90000 000 68,900.00 0000% Non Allocated Interest 000 000 000 0000% Developer Agreement 000 000 0.00 0.000% Transfers In 000 000 000 0000% TOTAL CAPITAL IMPROVEMENT 58,90000 000 58,90000 0000% 001 LA QUINTA REDEVELOPMENT AGENCY EXPENDITURE SUMMARY PROJECT AREA NO 2- LOW/MODERATE BOND FUND 07/01/2007 - 09/30/2007 REMAINING BUDGET EXPENDITURES ENCUMBERED BUDGET 2nd TRUST DEEDS LAND 000 000 000 000 BOND ISSUANCE COSTS 000 0.00 0.00 000 000 000 TRANSFERS OUT 000 000 000 0 00 000 0 00 TOTAL LOW/MOD BONG �— LOW/MODERATE TAX FUND: PERSONNEL SERVICES 70000 48724 000 21276 2ND TRUST DEEDS 540,484 00 46,234 52 000 494,229 48 LOW MOD HOUSING PROJECTS 000 000 000 000 0 00 FORECLOSURE ACQUISITION 100.000.00 50000 000 000 (50000) WATERCOLOR COURT HOMES 4,500,00000 1,727,100.00 0.00 000 100,00000 2,772,90000 LAND ACQUISITION 333,55500 39,427.00 000 294,12800 REIMBURSEMENT TO GEN FUND 356,50500 89, 12598 000 267,37902 TRANSFERS OUT 7,256,43000 1,860, 21145 000 5,396,17355 TOTAL LOW/MOD TAX TTlST 2004 LOW/MODERATE BOND FUND HOUSING PROGRAMS 000 000 000 000 LAND 000 000 000 000 TRANSFERS OUT 36,527, 50000 2,185,5637, 000 34,341,93621 TOTAL LOW/MOD BOND --�-- DEBT SERVICE FUND SERVICES BOND PRINCIPAL 176.100 00 41454 000 175,685 46 BONDINTEREST 110,00000 110,000.00 000 000 INTEREST CITY ADVANCE 310,13500 1,000,00000 156,26375 249,99994 000 153,87125 PASS THROUGH PAYMENTS 18,688,406 DO 2,61046 000 000 750,00006 18,685,795 54 TRANSFERS OUT 1,955,B46.00 1,240,85877 000 714.98723 TOTAL DEBT SERVICE -5-- CAPITAL IMPROVEMENT FUND: 4 PERSONNEL 700.00 486 96 SERVICES 123,641 00 19,545 58 ADVERTISING -ECONOMIC DEV 000 000 ECONOMIC DEVELOPMENT ACTIVITY 000 000 REIMBURSEMENT TO GEN FUND 25,29100 6,32262 TRANSFERS OUT 473,004 00 12000 TOTAL CAPITAL IMPROVEMENT 000 213 04 000 104,095 42 000 000 000 0 00 000 18.9138 38 �i� T4t�t 4 4 Qu&m COUNCIL/RDA MEETING DATE: November 20, 2007 ITEM TITLE: Approval of the Separately Issued La Quinta Redevelopment Agency Annual Audited Financial Statements for the Year Ended June 30, 2007 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve, receive and file the Annual Audited Financial Statement for the year ended June 30, 2007 (Attachment 1). FISCAL IMPLICATIONS: None. BACKGROUND AND OVERVIEW: At the end of every fiscal year, the Redevelopment Agency prepares an audited financial report. FINDINGS AND ALTERNATIVES: The alternatives available to the Redevelopment Agency include: 1. Approve, receive and file the Annual Audited Financial Statement for the year ended June 30, 2007; or 2. Do not approve, receive and file the Annual Audited Financial Statement for the year ended June 30, 2007; or 3. provide staff with alternative direction. Oil Respectfully submitted, A4LM- l d`_, John M. Falconer, Finance Director Approved for submission by: l G� Thomas P. Genovese, Executive Director Attachment: 1. Annual Audited Financial Statement for the year ended June 30, 2007 012 r ■_J t] 11 u LA QUINTA REDEVELOPMENT AGENCY LA QUINTA, CALIFORNIA FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2007 1] 91 11 F u 1 1 11 ' LA QUINTA REDEVELOPMENT AGENCY JUNE 30,2007 TABLE OF CONTENTS ' Page Number INDEPENDENT AUDITORS' REPORT ' Financial Audit................................................................................................................................1 ComplianceAudit...........................................................................................................................3 1 BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements: Statementof Net Assets.............................................................................................................7 Statementof Activities................................................................................................................8 Fund Financial Statements: Balance Sheet - Governmental Funds...:....................................................................................9 ' Reconciliation of the Balance Sheet of Government Funds to the Statement of Net Assets..................................................................................................11 ' Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds...............................................................................................12 ' Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statementof Activities...............................................................................................................14 ' Budgetary Comparison Statement— Low/Moderate Income Housing Fund — PA No. 1...........15 Budgetary Comparison Statement — Low/Moderate Income Housing Fund — PA No. 2...........16 ' Notes to Financial Statements......................................................................................................17 COMBINING AND INDIVIDUAL FUND SCHEDULES Combining Project Area Balance Sheet - AllGovernmental Funds................................................................................................................30 Combining Project Area Statement of Revenues, ' Expenditures and Changes in Fund Balances - AIIGovernmental Funds................................................................................................................33 Computation of Low and Moderate Income Housing FundsExcess/Surplus...................................................................................................................36 1 Brandon W.Burrows Donald L. Parker MLa,,Ice &Michael ng hard K. Chu David E. Hale A Profearbnd Corporagan Donald G. Slater LLP Richard K. Kikuchi Certified Public Accountants Refired Robert C. Lance 1914.1994 Richard C. Soll FWd J. Lunghard, Jr. 1928.1m INDEPENDENT AUDITORS' REPORT To the Honorable Chair and Members of the Governing Board La Quinta Redevelopment Agency, California 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, 2007, 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 La Quinta Redevelopment Agency's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of 1 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 respective financial position of the governmental activities and each major fund of the La Quinta Redevelopment Agency at June 30, 2007, and the respective changes in financial position thereof and the respective budgetary comparisons for the Low/Moderate Income Housing Fund — PA No. 1 and the Low/Moderate Income Housing Fund - PA No. 2 for the year then ended in conformity with accounting principles generally accepted in the United States of America. DIn accordance with Government Auditing Standards issued by the Comptroller General of the United States, we have also issued our report dated October 31, 2007, on our consideration of the La Quinta Redevelopment Agency's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal controls over financial reporting and compliance and the results of that testing, and not to provide and opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results or our audit. ' The La Quinta Redevelopment Agency has not presented a Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not required to be part of, the basic financial statements. ' 75 YEARS 192L9 """/�/��"2""6"0"""4 ' Qp FXikffe![M 203 N. Brea Blvd., Suite 203 • Brea, CA 92821-4056 • (714) 672-0022 0 Fax (714) 672-0331 • www.lslcpas.com L hLance son fi ard LLP CENIIFIEO fl/BLIC ACCWN11NI6 To the Honorable Chair and Members of the Governing Board Redevelopment Agency of the City of La Quinta, California ' Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Agency's basic financial statements. The combining project area statements and computation of low and moderate income housing funds excess/surplus are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has 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. 1 ,�'-, ,e.� �•� October 31, 2007 u D 1 U 1 U �I J U Brandon W. Burrows Donald L. Parker Mance nghard Michael K. Chu David E. Hale A P/VlLllblWl COlp01A110A Donald G. Slater LLP Richard K. Kikuchi Certified Public Accountants Retired Robert C. Lance 1914im Richard C. Sou Fred J. Lunghard, Jr. im-im J REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ITo the Honorable Chair and Members of the Governing Board La Quinta Redevelopment Agency, California We have audited the financial statements of the governmental activities and each major fund of the La Quinta Redevelopment Agency as of and for the year ended June 30, 2007, which collectively comprise the Agency's basic financial statements,, and have. issued our report thereon dated October 31, 2007. We 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 Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the La Quinta Redevelopment Agency's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the La Quinta Redevelopment Agency's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the La Quinta Redevelopment Agency's internal control over financial reporting. 11 I I F u n P Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the La Quinta Redevelopment Agency's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the La Quinta Redevelopment Agency's financial statements that is more than inconsequential will not be prevented or detected by the La Quinta Redevelopment Agency's internal control. We consider the following deficiencies to be significant deficiencies in internal control: 75 YEARS 1929 2004 O6 ExeeM"M 203 N. Brea Blvd., Suite 203 • Brea, CA 92821-4056 • (714) 672-0022 • Fax (714) 672-0331 • www.lslcpas.com I 1 1 1 1 U 1 r 1 P 1 I� 1 1 1 L 1 Liu IA rdP CETTi(FU WBLC ACCp/NIRMS To the Honorable Chair and Members of the Governing Board Redevelopment Agency of the City of La Quinta, California Audit Joumal Entries We requested that the Finance Department make certain journal entries as the result of the account analyses we performed during the audit. These journal entries included adjustments to record pass -through payments which were paid in August 2007 but which should have been reported as accounts payable at June 30, 2007. Caoltal Asset Policy During our inquiries with management, it was brought to our attention that Agency does not have a formal written capital asset policy. The Agency should consider creating one which details the capitalization threshold, depreciation policies and capitalization policies. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the La Quints Redevelopment Agency's internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant - deficiencies that are also considered to be material weaknesses. However, we believe that none of the significant deficiencies described above are material weaknesses. Compliance and Other Matters As part of obtaining reasonable assurance about whether the La Quinta Redevelopment Agency's financial statements are free of material misstatements, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Such provisions included those provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies issued by the State Controller and as interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of California Redevelopment Agencies issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. 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 the following instance of noncompliance or other matters that is required to be reported under Government Auditing Standards issued by the Comptroller General of the United States: In accordance with the California Health and Safety Code Section 33080.1, the Redevelopment Agency is required to produce and present, an annual report (due six months following the end of the Agency's fiscal year-end date), to the State Controller and its legislative body. This report was produced and presented, however, it did not contain the following required components: a. A loan report identifying loans (receivable) which equal or exceed $50,000 and that were found by the Agency during the previous fiscal year to have either defaulted or not complied with the terms of the agreements approved by the Agency. b. A property report which describes the properties owned by the agency and those acquired in the previous fiscal year. 1 A L Lance LaungheEd LLP LEfl IIFIEO WBL/C ACCIX/N IAN1$ ' To the Honorable Chair and Members of the Governing Board Redevelopment Agency of the City of La Quints, California The Agency did not produce and present the required information for the annual report as required by the Code. We recommend that the Agency accomplish procedural steps necessary to comply with this section of the Code. This report is intended for the information of the governing board, management and the State Controller and is not intended to be and should not be used by anyone other than these specific parties. '/� 9,-44a, "?ozi iOctober 31, 2007 e 0 0 I 11 F 0 n 0 0 5 0 I'I F p �J I 0 1 0 THIS PAGE INTENTIONALLY LEFT BLANK 1 H 11 u 1 1 E n L I. LA QUINTA REDEVELOPMENT AGENCY STATEMENT OF NET ASSETS JUNE 30, 2007 Assets: Cash and investments Receivables: Accounts Interest Notes Total Receivables Due from other governments Deposits Deferred charges Prepaid items Restricted assets: Cash and investments with fiscal agent Capital assets: Buildings, net Land Total Capital Assets Total Assets Liabilities: Accounts payable and accrued expenses Due to other governments Deposits payable Long-term liabilities: Due within one year Due in more than one year Total Long -Term Liabilities Total Liabilities Net Assets: Invested in capital assets, net of related debt Restricted for. Community development Debt service Unrestricted Total Net Assets 11 '1 I i Governmental Activities $ . 79,339 241,125 13,066,117 312,000 68,700,871 $ 55,118,104 13,386,581 5,546,842 206,050 4,753AQ9 7,977 61,492,009 69,012,871 209,623,843 4,193,069 560,698 40,238 5,395,558 254,923,390 260,318,948 266,112,963 41.624,909 38,283,337 46,398,586 (181,895,942) $ (66,589,110) L, See Notes to Financial Statements 7 LA QUINTA REDEVELOPMENT AGENCY STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2007 j Not (Expense) Revenues and Program Revenues Changes in Operating Capital Net Assets ! Expenses Charges for Contributions Contributions Services Governmental and Grants and Grants Activities Functions/Programs Governmental Activities: General government - $ 3,395,820 $ - $ - $ - $ (3,395,820) Planning and development 25,679,389 - - - (25,679,389) j Interest on long-term debt 14,550,754 - - - (14,550,754) Total Governmental Activities $ 43,626,963 $ - - $ - $ - (43,626,983) General Revenues: - Taxes (net of pass -through payments) 42,009,753 Use of money and property - Other 6,785,119 1,093,958 Total General Revenues 49,888,830 Change in Net Assets 6,262,867 Net Assets at Beginning of Year (60,376,657) i� Restatement of Net Assets (1,475,320) Net Assets at End of Year $ (66,589,110) I ' See Notes to Financial Statements 8 r 1 LA QUINTA REDEVELOPMENT AGENCY BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2007 ' Special Revenue Capital Projects Low/Moderate Low/Moderate 2004 Redevelopment income Housing- Income Housing- Low/Mod Agency - PA No. 1 PA No. 2 Bond PA No. 1 Assets: Cash and investments $ 3,311,795 $ 10,020,157 $ $ 71,795 Cash and investments with fiscal agent 44,469,386 17,022,623 Receivables: 1 Accounts 9,939 8,500 Interest 25,937 12,875 - - Notes 3,566,117 9,500,000 - - 1 Due from capital projects funds - - - - Due from other governments 82,488 60,556 Advances to the City of La Quinta - 3,878,873 Deposits 206,050 - _ - Prepaid items 2,485 1,504 2,485 Total Assets $ 7,204,811 $ 19,603,592 $ 44,469,386 $ 20,975,776 Liabilities and Fund Balances: Liabilities: Accounts payable $ 26,610 $ 26,636 $ $ 35,409 payable 12,403 - - - 'Deposits Due to debt service funds 6,186,049 Due to other governments _ Deferred revenue 1,484,472 9,500,000 - - 1 Total Liabilities 1,523,485 9,526,636 6,186,049 35,409 Fund Balances: Reserved: ' Bond projects 44,469,386 17,022,623 Prepaid items 2,485 1,504 - 2,485 Notes receivable 2,081,645 - Deposits - 206,050 - _ Advances to the City of La Quinta 3,878,873 Unreserved: - - Designated: ' Debt service - - _ _ Continuing projects 3,391,146 10,075,452 36,386 Undesignated - (6,186,049) - ' Total Fund Balances 5,681,326 10,076,956 38,283,337 20,940,367 Total Liabilities and ' Fund Balances $ 7,204,811 $ 19,603,592 $ 44,469,386 $ 20,975,776 I ' See Notes to Financial Statements 9 U 1 LA QUINTA REDEVELOPMENT AGENCY BALANCE SHEET 'GOVERNMENTALFUNDS JUNE 30, 2007 Capital ' Projects Debt Service Redevelopment Redevelopment Redevelopment Total Agency- Agency- Agency- Governmental PA No. 2 PA No. 1 PA No. 2 Funds Assets: Cash and investments $ 1,716,384 $ 33,187,356 $ 6,810,617 $ 55,118,104 Cash and investments with fiscal agent - - - 61,492,009 Receivables: Accounts 60,900 79,339 Interest 7,306 -133,761 61,246 241,125 - _ - 13,066,117 'Notes Due from capital projects funds 6,186,049 6,186,049 Due from other governments 335,328 244,927 723,299 Advances to the City of La Quints 944,670 - - 4,823,543 Deposits Prepaid items 1,503 206,050 7,977 Total Assets $ 2,730,763 $ 33,666,445 $ 13,302,839 $ 141,943,612 ' Liabilities and Fund Balances: Liabilities: - Accounts payable $ 12,580 $ - $ - $ 101,235 payable 27,835 - 40,238 iDeposits Due to debt service funds 6,186,049 Due to other governments 168,201 392,497 560,698 Deferred revenue - - - - 10,984,472 ' Total Liabilities 40,415 168,201 392,497 17,872,692 Fund Balances: Reserved: - Bond projects 61,492,009 Prepaid items 1,503 - - 7,977 Notes receivable - 2,081,645 Deposits 206,050 Advances to the City of La Quinta 944,670 i 4,823,543 Unreserved: Designated: Debt service 33,488,244 12,910,342 46,398,586 Continuing projects 1,744,175 15,247,159 Undesignated - - (6,186,049) Total Fund Balances 2,690,348 33,488,244 12,910,342 124,070,920 Total Liabilities and ' Fund Balances $ 2,730,763 $ 33,656,446 $ 13,302,839 $ 141,943,612 1 l l 1 See Notes to Financial Statements 10 LJ ILA QUINTA REDEVELOPMENT AGENCY GOVERNMENTALFUNDS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2007 III Fund balances of governmental funds $ 124,070,920 Amounts reported for governmental activities in the statement of net assets are 1 different because: Capital assets used in governmental activities are not financial resources 1 and, therefore, are not reported in the funds 69,012,871 Deferred revenue is present in governmental fund financial statements to indicate that receivables are not available currently; however, in the Statement of eNet Assets these deferrals are eliminated. 10,984.472 Bond issuance costs is an expenditure in the governmental funds, but it is deferred charges in the statement of net assets: Unamortized debt issuance costs - amortized over life of new bonds 4,753,409 Long-term liabilities, including bonds payable, are not due and payable in the ' current period and, therefore, are not reported in the funds Bonds payable (232,915,000) Loans from City (22,100,000) Other debt (6,181,178) Unamortized net original issue discounts and (premiums) 877,230 Accrued interest payable for the current portion of interest due on Tax Allocation Bonds has not been reported in the governmental funds. (4,091,834) Net assets of governmental activities $ (55,589,110) n E j P ISee Notes to Financial Statements 11 LA QUINTA REDEVELOPMENT AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Special Revenue Capital Projects LmModerate Low/Moderate 2004 Redevelopment Income Housing - income Housing - Low/Mod Agency. PA No. 1 PA No. 2 Bond PA No. 1 Revenues: Taxes and assessments $ 10,507,377 $ 5,194,289 $ - $ - Use of money and property 740,204 343,072 2,706,511 1,137,304 - Other revenue 987,611 59,409 82,841 Total Revenues 12,235,192 5,596,770 2,706,511 1,220,146 ' Expenditures:. Current: General government 994,529 546,749 - 1,027,937 Planning and development 137,029 19,966,444 4,705,800 - 1 Capital outlay 1,173,210 16,564,295 4,336,775 Debt service 1 Total Expenditures 1,131,658 21,686,403 21,270,096 6,364,712 Excess (Deficiency) of Revenues Over (Under) Expenditures 11,103,634 (16,089,633) (18,563,684) (4,144,567) ' Other Financing Sources (Uses): Transfersin 100,000 16,000,000 Transfers out (20,448,138) (1,954,560) Long-term debt issued Pass -through agreement payments Proceeds from sale of capital asset 124,097 Total Other Financing ' Sources (Uses): (20,224,041) 14,046,"0 Excess (Deficiency) of Revenues and Other Sources Over (Under) Expenditures and Other Uses (9,120,407) (2,044,193) (18,563,584) (4,144,567) Fund Balances: Beginning of Year 14,801,733 12,121,149 56,846,921 25,084,934 End of Year $ 5,681,326 $ 10,076,956 $ 38,283,337 $ 20,940,367 F I H ISee Notes to Financial Statements 12 I ILA OUINTA REDEVELOPMENT AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Capital Projects Debt Service Redevelopment Agency- Redevelopment Agency. Redevelopment Agency- Total Governmental PA No. 2 PA No. 1 PA No. 2 Funds Revenues: Taxes and assessments $ $ 42,029,504 $ 20,777,158 $ 78,508,328 Use of money and property 125,423 1,054,152 556,329 6,662,995 Other revenue 1,129,861 Total Revenues 125,423 43,083,656 21,333,487 86,301,184 Expenditures: Current: General government 117,398 506,056 184,484 3,377,153 Planning and development - - 24,809,273 Capital outlay 66,107 _ 22,140,387 Debt service - 16,042,698 3,474,345 19,517,043 1 Total Expenditures 183,505 16,648,754 3,658,829 69,843,856 Excess (Deficiency) of Revenues Over (Under) Expenditures (58,082) 26,534,902 17,674,658 16,457,328 ' Other Financing Sources (Uses): Transfers in - 4,448,138 1,954,560 22,502,698 Transfers out (100,000) (22,502,698) Long -tens debt issued 100,000 100,000 Pass -through agreement payments _ (19,044,700) ,(17,453,875) (36,498,575) Proceeds from sale of capital asset 124,097 Total Other Financing - Sources (Uses): (14,596,562) (15,499,316) (36,274,478) Excess (Deficiency) of Revenues and Other Sources Over (Under) Expenditures and Other Uses (58,082) 11,938,340 2,175,343 (19,817,160) Fund Balances: IBeginning of Year 2,748,430 21,549,904 10,734,999 143,888,070 End of Year $ 2,690,348 $ 33,488,244 $ 12,910,342 $ 124,070,920 1 I I 1 See Notes to Financial Statements 13 I I I I I I I I I I 0 I 0 P LA QUINTA REDEVELOPMENT AGENCY GOVERNMENTALFUNDS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities differ because: Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Bond issuance costs is an expenditure in the governmental funds, but is deferred charges in the statement of net assets: Amortization for current fiscal year Unamortized premium or discounts on bonds issued are revenue or expenditures in the governmental funds, but these are spread to future periods over the life of the new bonds: Amortization for current fiscal year Governmental funds report capital outlay as expenditures. However, in the statement of activities the cost of those assets in capitalized and allocated over their estimated useful lives through depreciation expense: Amount by which capital outlay exceeds depreciation Depreciation Proceeds of debt is revenue in the governmental funds, but these are additions to the statement of net assets. Revenues reported in the governmental funds which were previously deferred and meet the revenue recognition criteria currently and, therefore, are not reported as revenues in the Statement of Activities Expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Current accrual of interest due on bonds Prior year accrual of interest due on bonds Change In net assets of governmental activities $ (19,817,150) 5,120,449 (185,679) (36,143) 21,110,271 (18,667) (100,000) 122,124 (4,091,834) 4,159,496 $ 6,262,867 ISee Notes to Financial Statements 14 I LA QUINTA REDEVELOPMENT AGENCY BUDGETARY COMPARISON STATEMENT i LOW/MODERATE INCOME HOUSING PA NO, 1 FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Variance with Final Budget Budget Amounts Actual Positive 1 Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 14,801,733 $ 14,801,733 $ 14,801,733 $ - Resources (inflows): Taxes and Assessments: Tax increment 8,915,100 10,349,200 10,507,377 158,177 Use of Money and Property: Interest income 333,300 442,300 505,876 63,576 Rental income 252,000 252,000 234,328 (17,672) Other revenue: Miscellaneous revenues - 50,000 162,038 112,038 Loan repayments - 1,000,000 825,573 (174,427) Transfers from other funds - 140,000 100,000 (40,000) Proceeds from sale of capital asset 150,000 645,000 124,097 (520,903) Amounts Available for Appropriations 24,452,133 27,680,233 27,261,022 (418,211) Charges to Appropriation (Outflow): Current: ' General Government: Administrative costs 591,827 591,827 581,980 9,847 Professional services 466,081 466,081 412,549 53,532 Planning and development: Real estate acquisitions 7,150,000 8,950,000 12,029 8,937,971 Subsidy to low and moderate 'housing Transfers to other funds 750,000 4,440,304 750,000 20,448,304 125,000 20,448,138 625,000 166 Total Charges to Appropriations 13,406,212 31,206,212 21,579,698 9,626,518 Budgetary Fund Balance, June 30 $ 11,045,921 $ (3,525,979) $ 5,681,326 $ 9,207,305 1 e I I P 1 See Notes to Financial Statements 15 LA OUINTA REDEVELOPMENT AGENCY BUDGETARY COMPARISON STATEMENT - LOWIMODERATE INCOME HOUSING PA NO.2 FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) ' Budgetary Fund Balance, July 1 $ 12,121,149 $ 12,121,149 $ 12,121,149 $ Resources (Inflows): ' Taxes and Assessments: Tax increment 4,870,400 5,401,800 5,194,289 (207,511) Use of Money and Property: - Interest income Other revenue: 275,300 441,000 343,072 (97,928) Loan repayments 100,000 59,409 - (40,591) Transfers from other funds 16,000,000 16,000,000 - Proceeds from sale of capital asset - 12,641,903 - (12,641,903) Amounts Available for Appropriations 17,266,849 46,705,852 33,717,919 (12,987,933) Charges to Appropriation (Outflow): Current: General Government: Administrative costs 314,053 314,053 315,022 (969) 'Professional services 277,481 277,481 231,727 45,754 Planning and development: Real estate acquisitions 150,000 20,450,000 19,966,444 483,556 ' Subsidy to low and moderate housing 4,500,000 - 4,500,000 Capital Outlay: Project improvement costs 1,173,210 1,173,210 1,173,210 - Transfers to other funds Total Charges to Appropriations 781,432 2,696,176 5,918,706 32,633,450 1,954,560 3,964,146 23,640,963 8,992,487 Budgetary Fund Balance, June 30 $ 14,570,673 $ 14,072,402 $ 10,076,956 $ (3,995,446) E k ! J D 1 See Notes to Financial Statement 16 I 0 LA QUINTA REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS JUNE 30, 2007 Note 1: Organization and Summary of Significant Accounting Policies a. Organization and Tax Increment Financing The La Quinta Redevelopment Agency is a component unit of a reporting entity that consists of the following primary and component units: AReporting Entity: Primary Government: ' City of La Quinta Component Units: La Quints Redevelopment Agency City of La Quinta Public Financing Authority ' 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 Project Areas ' The Agency has established two redevelopment project areas. On November 29, 1983, the City Council approved and adopted the Redevelopment Plan 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 Quints 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 roll", 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 over the base roll ("tax ncrement") 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. l'1 1 17 11 La Quints Redevelopment Agency Notes to Financial Statements (Continued) Note 1: Organization and Summary 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 a 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 Quints Redevelopment Agency has no business -type activities or discretely presented component units. For the most part, effect of interfund activity has ' been removed from these statements. 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 construct 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 government -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 non -exchange transaction are recognized in accordance with the requirements 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 statement of activities to present the net cost of each program. Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial statements, rather than reported as expenditure. Proceeds of long-term debt are recorded as a liability in the govemment-wide financial statements, rather than as other financing source. Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. P j 1 18 ' La Quinta Redevelopment Agency Notes to Financial Statements (Continued) ' Note 1: Organization and Summary of Significant Accounting Policies (Continued) 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 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. These ' 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 funds, enterprise funds, or fiduciary funds. Governmental Funds ' In the fund financial statements, governmental funds and agency funds are presented using the modiried-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. 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 non -exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the 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 are 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 fund 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. 1 19 ' La Quints Redevelopment Agency Notes to Financial Statements (Continued) ' Note 1: Organization and Summary of Significant Accounting Policies (Continued) 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 source rather than as a fund liability. Amounts paid to reduce long-term 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. 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 and No 2 — To account for the bond proceeds, interest and other funding that will be used for development, planning, construction and land acquisition. ' 2004 Low Moderate and Income Housing Fund — To account for the bond proceeds, interest and other funding that will be used for development, planning, construction, and ' land acquisition for low and moderate income housing projects. d. Cash and Investments For financial reporting purposes, investments are reported at their fair market value. 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. 1 20 I La Quints Redevelopment Agency Notes to Financial Statements (Continued) ' Note 4: Notes Receivable e. Capital Assets ' Capital assets (including infrastructure) are recorded at cost where historical records 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. Capital assets include public domain (infrastructure) general fixed assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. ' Note 2: Stewardship, Compliance and Accountability a. Budgetary Data ' Budgets and Budgetary Accounting The Governing Board 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 the Governing Board. Prior year appropriations lapse unless they are approved for carryover into the following efiscal year. Expenditures may not legally exceed appropriations at the department level. b. Encumbrances ' Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue and similar governmental funds. Encumbrances outstanding ' at year-end are reported as a reservation of fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in -process at year-end is completed. They do not constitute expenditures or estimated liabilities. As of June 30, 2007 the Agency had no encumbrances. tc. Budget Basis of Accounting ' Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Note 3: Cash and Investments 1 Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments pooled with the City $ 55,118,104 Cash and investments with fiscal agent 61,492,009 $ 116,610,113 ' The Agency's funds are pooled with the City of Le Quinta's cash and investments in order to generate optimum interest income. The information required by GASB Statement No. 40 related to investments, credit risk, etc., is available in the annual report of the City. 1 21 I La Quinta Redevelopment Agency Notes to Financial Statements (Continued) Note 4: Notes Receivable Outstanding Balance at June 30, 2007 In September 1994, the Agency sold certain real property to LINC Housing for $2,112,847. The property was used to construct single-family homes and rental units to increase the Citys supply of low and moderate income housing. The note bears interest at 6% per annum and is Odue in full on June 15, 2029. $ 3,519,860 In December 2000, the Agency entered into an agreement with LINC Housing to receive $9,500,000 as a 1 reimbursement for Agency costs incurred for the construction of infrastructure related to the development of senior apartments. Payments are due to the Agency in 1 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 46,257 1 Total notes receivable $ 13,066.117 Note 5: Due from Other Governments The Redevelopment Agency advanced funds to the City of La Quinta to help the City meet the cost of developing the public -owned improvements to the La Quinta Community Park and Civic Center Campus. There is no stipulated repayment date established for the Agency advances. Interest accrues at the earning rate of the City's Investment Pool funds, and shall be adjusted quarterly. At June 30, 2007, outstanding Project Area No. 1 advances were $3,878,873 and Project Area No. 2 advances were $944,670. Note 6: Capital Assets Capital asset activity for the year ended June 30, 2007 was as follows: 1 Balances at Balances at June 30, 2006 Additions Deletions June 30, 2007 Buildings $ 560,000 $ (40,000) $ 520,000 Total cost of depreciable assets 560,000 (40,000) 520,000 Less accumulated depreciation: 1 Buildings (205,333) (18,667) 16,000 (20B4O00) Net depreciable assets 354,667 (18,667) (24,000) 312,000 1 Capital assets not depreciated: Land 47,566,600 21,270,271 (136,000) 68,700,871 Capital assets, net $ 47,921,267 $ 1,251,604 $(160,000) $ 69,012,871 1 22 U 1 1 1 1 La Quinta Redevelopment Agency Notes to Financial Statements (Continued) Note 6: Capital Assets (Continued) Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General govemment - $18,667 Note 7: Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1 % 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 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. The Agency has no power to levy and collect taxes and any 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. Note 8: Long -Term Liabilities 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 range from 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 e 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 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 June 30, 2007 is $12,525,000. 1 23 [I La Quinta Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long -Tenn Liabilities (Continued) Tax Allocation Refunding Bonds, Series 1998 - Project 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 erequirement. The principal balance of outstanding bonds at June 30, 2007 is $15,760,000. Tax Allocation Refunding Bonds, Series 1998 - Project Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. 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. Tenn Bonds maturing September 1, 202B 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 June 30, 2007 is $6,025,000. Tax Allocation Bonds, Series 2001 — Project 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, 2007 is $48,000,000. 1 24 �J La Quinta Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long -Term Liabilities (Continued) Tax Allocation Bonds, Series 2002 — Project Area No. 1 On June 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. 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 and September 1 of each year until maturity. Term 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. 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, 2007 is $37,675,000. Tax Allocation Bonds, Series 2003 — Project Area No. 1 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 from pledged tax increment revenues. I Term bonds maturing on September 1, 2013 through September 1, 2032, are subject to mandatory redemption from minimum sinking fund payments, in part 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 eaccrued 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 bonds at June 30, 2007 is $25,185,000. 2004 Series A Local Agency Revenue Bonds On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of $90,000,000 to finance projects benefiting low 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. 1 and 2, 1995 Housing Tax Allocation Bonds. The 2004 local agency revenue bonds were issued with issuance costs of $2,600.229 and a premium of $476,496. 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. 1 25 ' La Quints Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long -Term Liabilities (Continued) 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 1 September 1, 2017, September 1, 2025, and September 1, 2030, respectively, and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. 1 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 bonds at June 30, 2007 is $87,745,000. Due to County of Riverside — Project 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 Countys 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 Quints 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, 2007 is $1,750,000. ' Pass -through Agreement Payable to Coachella Valley Unified School District An agreement was entered into in 1991 between the Agency, the City of La Quints 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 $474,617 to $834,076 for a total amount of $15,284,042. Tax increment payments outstanding at June 30, 2007 totaled $4,431,178. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school buses, expansion or rehabilitation of current facilities. Advances from the City of La Quints 1 The City of La Quints advances money to the Redevelopment Agency to cover operating and capital shortfalls. As of June 30, 2007, the amount due to the General Fund from Project Area No. 1 was $12,100,000. This consists of an outstanding advance of: 1) $6,000,000 loaned to the Redevelopment Agency with repayments beginning in 2030/31 and accrues interest at 10% per annum. I 2) $6,000,000 loaned to the Redevelopment Agency requires repayments beginning in 2030/31 and accrues interest at 7% per annum. 3) $100,000 loaned to the Redevelopment Agency for the purpose of funding escrow deposits and due diligence studies for Washington Street land acquisitions to be repaid by the Agency after the annexation of the Washington Street properties and accrues interest at 7 % per annum. 1 26 H n D I L L--:l U U 0 L H d u La Quinta Redevelopment Agency Notes to Financial Statements (Continued) Note 8: Long -Tenn Liabilities (Continued) As of June 30, 2007, the amount due to the General Fund from Project Area No. 2 was $10,000,000. The advance loaned to the Redevelopment Agency with repayment beginning in 2035/36 and accrues interest at 10% per annum. The following is a schedule of changes in long-term debt of the Agency for the fiscal year ended June 30, 2007: Project Area No. 1: City Loans - Principal Pass -through agreement payable: 1994 Tax Allocation Bonds 1998 Tax Allocation Bonds 2001 Tax Allocation Bonds 2002 Tax Allocation Bonds 2003 Tax Allocation Bonds 2004 Series A Local Agency Revenue Bonds Balance Balance Due Within July 1, 2006 Adjustments ` Additions Repayments June 30, 2007 One Year $ 12,000,000 $ - 5,186,627 - 14,145,000 - 15,760,000 - 46,383,564 1,616,436 36,879,584 1,395,416 24,745,542 85B,458 16,848.677 382,555 $ 100,000 $ - $ 12,100,000 $ - - 755,449 4,431,178 770,558 - 1,620,000 12,525,000 1,740,000 - - 15,760,000 - - - 48,000,000 - - 600,000 37,675,000 615,000 - 420,000 25,185,000 440,000 293,360 16,937,872 303,010 Total 171,949,994 4,252,865 100,000 3,688,809 172,614,050 3,868,568 Project Area No. 2: City Loans - Principal $ 10,000,000 $ - $ - $ - $ 10,000,000 $ Due to County of Riverside 1,850,000 - - 100,000 1,750,000 150,000 1998 Tax Allocation Bonds 6,130,000 - 105,000 6,025,000 110,000 2004 Series A Local Agency Revenue Bonds 4,553,671 103,468 79,344 4,577,795 81,954 Total 22,533,671 103,468 2B4,344 22,352,795 341,954 Unallocated to Project Areas 2004 Series A Wcal Agency Revenue Bonds $ 65,880,501 $ 1,496,128 $ $ 1,147,296 $ 66,229,333 $ 1,185,036 Total 65,880.501 1,496,12E - 1,147,296 66,229.333 1, 185,036 Total - All Project Areas $260,364,166 $ 5,852,461 $ 100,000 $ 5,120,449 $ 261,196,178 $ 5,395,558 Adjustments; Unamortized net original issue (discount) or premium (877,230) Net Long -tam Debt $ 260,318,948 `Adjustments were to reclassify reporting of deferred charges and original issue (discountypremium The following schedule illustrates the debt service requirements to maturity for the debt outstanding as of June 30, 2007: TaxAllocagon Refunding Bonds, Tex Allocation Refunding Bonds, Tax Allocation Refunding Bonds, Series 1994-PANo.1 Series 1998-PANo. t Series 1998-PANo. 2 Principal Interest Principal Interest Principal Interest 2007-2008 $ 1,740,000 . $ 8 00,815 $ - $ 8 99,620 $ 110,000 $ 310,135 2008-2009 1,865,000 719,233 - -819,520 115,000 305,184 2009-2010 2,000,000 578,160 - 819,520 120,000 299,550 2010-2011 2,145,000 426,868 - 819,620 125,000 293,272 2011-2012 2,305,000 264,443 - 819,520 130,000 286,738 2012-2017 2,470,000 90,155 2,835,000 3,812,250 765,000 1,322,859 2017-2022 - - 4,456,000 2,805,270 975,000 1,100,075 2022-2027 - - 5,740,000 1,485,900 1,270,000 807,188 2027-2032 - - 2,730,000 143,780 1,635,000 428,006 2032-2037 - - - - 780,000 41,475 Totals $ 12,525,000 $ 2,929,674 $ 15,760,000 $ 12,344,800 $ 6,025,000 $ 5,194,482 U 27 I ' La Quinta Redevelopment Agency Notes to Financial Statements (Continued) L✓ F I 1 P 1 F 1 Note 8: Long -Tenn Liabilities (Continued) 2007-2008 2008-2009 2009-2010 2010 - 2011 2011-2012 2012 - 2017 2017-2022 2022 - 2027 2027 - 2032 2032-2037 Tax Allocation Bonds, Series 2001 - PA No. 1 Principal Interest $ - $ 2,430,720 - 2,430,720 - 2,430,720 - 2,430,720 - 2,430,720 6,755,000 11,498,975 10,525,000 9,200,475 13,455,000 6,186,173 17,265,000 2,288,753 Tax Allocation Bonds, Series 2002 - PA No. 1 Principal Interest $ 615,000 $ 1,849,616 635,000 1,829,914 660,000 1,807,556 680,000 1,782,926 705,000 1,756,429 3,755,000 8,287,856 4,710,000 7,245,156 6,025,000 5,899,091 12,385,000 3,795,959 7,505,000 192,316 Tax Allocation Bonds, Series 2003 - PA No. 1 Principal Interest $ 4401060 $ 1,5491882 460,000 1,530,802 475,000 1,508,106 505,000 1,481,401 530,000 1,453,198 3,130,000 6,763,557 4,220,000 5,636,456 5,730,000 4,085,165 7,815,000 1,926,043 1,880,000 60,536 Totals $ 48,000,000 $ 41,327,976 $ 37,675,000 $ 34,446,819 $ 25,185,000 $ 25,995,146 2007-2008 2008 - 2009 2009 - 2010 2010 - 2011 2011 - 2012 2012-2017 2017 - 2022 2022 - 2027 2027 - 2032 2032 - 2037 Totals 20D4 Series A Local Agency Revenue Bonds Principal Interest $ 1,570,000 $ 4,356,806 1,615,000 4,304,994 1,670,000 4,243,331 1,740,000 4,175,131 1,805,000 4,099,719 10,405,000 19,076,413 13,385,000 16,001,125 17,280,000 12,014,144 22,115,000 7,061,797 16,160,000 1,269,975 Due to Countv of Riverside Principal Interest $ 150,000 $ - 200,000 200,000 200,000 250,000 750,000 Pass -through Payable - Coachella Valley Unified School District Principal Interest $ 770,558 $ 785,968 801,688 - 817,722 - 834,076 - 421,166 - $ 87,745,000 $ 76,603,435 $ 1,750,000 $ - $ 4,431,178 $ - 1 Note 9: Pledge 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. 1 Note 10: Transfers In and Out The following transfers were made during the year ended June 30, 2007: LI Transfers Out: Special Revenue: - Low/Moderate Income Housing PA No. 1 Low/Moderate Income Housing PA No. 2 Debt Service: 1 Redevelopment Agency - PA No i Total Transfers In Special Revenue Debt Service Low/Moderate Low/Moderate Redevelopment Redevelopment Income Housing Income Housing Agency- Agency - PA No. 1 PA No. 2 PA No. 1 PA No. 2 Total 16,000,000 4,448,138 - 20,448,138 - - 1,954,560 1,954,560 100,000 - - - 100,000 $ 100,000 $ 16,000,000 $ 4,448,138 $ 1,954,560 $ 22,602,698 1 28 La Quinta Redevelopment Agency Notes to Financial Statements (Continued) Note 10: Transfers In and Out (Continued) a) $4,448,138 was transferred from the Low/Moderate Income Housing PA No. 1 Fund to the Redevelopment Agency Debt Service Project Area No. 1 Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. b) $1,954,560 was transferred from the Low/Moderate Income Housing PA No. 2 Fund to the Redevelopment Agency Debt Service PA No. 2 Fund to pay a portion of the 2004 Series A Local Agency Revenue Bond debt service. c) $100,000 was transferred from the Redevelopment Agency PA No. 1 to the Law/Moderate Income Housing PA No. 1 Fund for an escrow deposit on the purchase of land. These funds were advanced to the Agency from the City. d) $16,000,000 was transferred from the Low/Moderate Income Housing PA No. 1 Fund to the Low/Moderate Income Housing PA No. 2 Fund to purchase land. Note 11: Due To/From Other Funds The following interfund receivables and payables were made during the year ended June 30, 2007: Due From Other Funds Due To Other Funds Amount Debt Service — RDA PA No. 2 Capital Projects — 2004 Low/Mod Bond $ 6,186,049 (a) (a) Short term borrowing to cover temporary cash shortfall. Note 12: Insurance 1 The La Quinta Redevelopment Agency is covered under the City of La Quinta's insurance policies. Therefore, the limitations and self -insured retentions applicable to the City of La Quinta also apply to its Redevelopment Agency. Additional information as to coverage and self -insured retentions can be obtained by contacting the City. Note 13: Restatements of Net Assets Beginning net assets have been restated on the government -wide financial statements by ($1,475,320) relating to the adjustment of accrued interest payable on long-term liabilities. In addition, beginning net assets were adjusted for an understatement of deferred charges and understatement of long-term liabilities in the amount of $5,582,461 both related to the prior accounting treatment of unamortized costs of issuance. The combined affect of these two net asset restatements was zero. 1 U 1 1 29 0 LA QUINTA REDEVELOPMENT AGENCY COMBINING PROJECT AREA BALANCE SHEET ALL GOVERNMENTAL FUNDS _ JUNE 30, 2007 Project Area No. 1 Capital Debt Capital Special Projects Service Projects Revenue 2004 Redevelopment Redevelopment LowlModerate Low/Mod Agency- Agency- Income Housing - Bond No. 1 PA No. 1 PA No.1 ASSETS —PA Cash and investments $ - $ 33,187,356 $ 71,795 $ 3,311,795 Cash and investments with fiscal agent 44,469,386 17,022,623 Receivables: Accounts - - - 9,939 Interest 133,761 - 25,937 Notes 3,566,117 Due from capital projects funds - - - Due from other governments - 335,328 - _ 82,488 Advances to the City of La Quints - - 3,876,873 - Deposits 206,050 Prepaid items - 2,485 2,486 Total Assets LIABILITIES AND FUND BALANCES S 44,469,386 $ - 33,656,445 $ 20,975,776 $ 7,204,811 Liabilities: Accounts payable $ _ $ - $ 35,409 $ 26,610 Deposits payable 12,403 Due to debt service funds 6,186,049 Due to other governments - 168,201 - Deferred revenue - - - 1,484,472 Total Liabilities 6,186,049 168,201 36,409 1,523,405 Fund Balances: Reserved: Bond projects 44,469,386 17,022,623 Prepaid items - - 2,485 2,485 Notes receivable - - - 2,081,645 Deposits - - - 206,050 Advances to the City of La Quints 3,878,873 Unreserved: Designated: Debt service Continuing projects _ 33,488,244 - 36,386 - - 3,391,146 Undesignated (6,186,049) Total Fund Balances 38,283,337 33,488,244 - 20,940,367 6,681,326 Total Liabilities and Fund Balances $ "A69,386 E 33,656,445 $ 20,975,776 $ 7,204,811 0 0 30 I LA QUINTA REDEVELOPMENT AGENCY COMBINING PROJECT AREA BALANCE SHEET ALL GOVERNMENTAL FUNDS JUNE 30, 2007 ASSETS ' Cash and investments Cash and investments with fiscal agent Receivables: Accounts ' Interest Notes Due from capital projects funds Due from other governments t Advances to the City of La Quinta Deposits Prepaid items Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits payable - Due to debt service funds Due to other governments Deferred revenue Total Liabilities Fund Balances: 1 Reserved: Bond projects Prepaid items Notes receivable Deposits Advances to the City of La Quints Unreserved: Designated: Debt service Continuing projects Undesignated Total Fund Balances Total Liabilities and Fund Balances U Project Area No. 2 Debt Capital Special Service Projects Revenue Redevelopment Redevelopment Low/Moderate Agency • Agency • Income Housing PA No. 2 PA No. 2 PA No. 2 $ 6,810,617 $ 1,716,384 $ 10,020,157 - 60,900 8,500 61,246 7,306 12.875 - 9,500,000 6,18B4O49 _ - 244,927 - 60,556 - 944,670 - 1,503 1,504 $ 13,302,839 $ 2,730,763 $ 1903,592 $ - $ 12,580 $ 26,636 _ 27,835 _ 392,497 - - - - 91500,000 392,497 40,416 9,526,636 1,503 1,504 944,670 12.910,342 _ 1,744,175 10,075,452 12,910,342 2,690,348 10,076,956 $ 13,302,839 $ 2,730,763 $ 19,603,592 1 31 ' LA QUINTA REDEVELOPMENT AGENCY COMBINING PROJECT AREA BALANCE SHEET ' ALL GOVERNMENTAL FUNDS JUNE 30, 2007 TOTALS Debt Capital Special Service Projects Revenue Funds Funds Funds ASSETS ' Cash and investments $ 39,997,973 $ 1,788,179 $ 13,331,952 Cash and investments with fiscal agent 61,492,009 Receivables: Accounts Interest - 80,900 18,439 Notes 195,007 7,306 38,812 Due from capital projects funds 6,186,049 - 13,066,117 Due from other governments 580,265 - 143,044 Advances to the City of La Quints 4,623,543 - Deposits _ Prepaid items 206,050 - 3,988 3,989 Total Assets $ 46,959,284 $ 68,176,925 $ 26,808,403 ' LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Deposits payable - $ _ $ 47,989 $ 53,246 Due to debt service funds 27,835 12,403 Due to other governments 560,698 6,186,049 - Deferred revenue 10,9B4,472 ' Total Liabilities 560,698 6,261,873 11,050,12l Fund Balances: Reserved: Bond projects 61,492,009 Prepaid items Notes receivable - 3,988 3,989 Deposits - - 2,061,645 ' Advances to the City of La Duinta - - 206,050 Unreserved: 4,823,543 Designated: Debt service Continuing projects 46,398,586 - - Undesignated 1,780,561 13,466,598 - (6,186,049) - Total Fund Balances 46,398,686 61,914,052 15,758,282 Total Liabilities and Fund Balances $ 46,959,284 $ 68,175,925 $ 26,808,403 U r 1 32 ' LA QUINTA REDEVELOPMENT AGENCY COMBINING PROJECT AREA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS - FOR THE FISCAL YEAR ENDED JUNE 30, 2007 ' Project Area No. 1 Capital Debt Capital Special Projects Service Projects Revenue ' 2004 Redevelopment Redevelopment Low/Moderate LowlMod Agency- Agency- Income Housing - Revenues: _ Bond PA No. i PA No. 1 PA No. 1 Taxes and Assessments: Tax increment Use of Money and Property: $ $ 42,029,504 $ $ 10,507,377 Interest income Rental in 2,706,511 1,054,152 1,137,304 505,876 - Other revenue 234 328 Miscellaneous revenues - 82,841 162,038 Loan repayments 825,573 Total Revenues 2,706,511 43,083,666 1,220,145 12,236,192 Expenditures: CunenC - General Government: Administrativa costs - 362.062 293,692 581,980 1 Professional services Planning and development: 143,994 734,245 412,549 Real estate acquisitions Subsidy to low and moderate - 12 029 housing Capital Outlay: 4,705,800 - _ 125,000 Project improvement costs - 16,564,295 - 4,336,775 Debt Service: - Interest expense Long-term debt repayments _ - 11,628,a49 4,413,849 - Total Expenditures 21,270,095 16,548,754 5'364,712 11131,558 Excess of Revenues over (under) Expenditures $ (18,663,584) $ 26,634,902 $ (4,144,567) S 11,103,634 Other Financing Sources (Uses) Transfers in Transfers out $ - $ 4,448,138 $ $ 100,000 Long-term debt issued - (100,000) - (20,448,138) Pass through agreement payments - 100,000 (19,044,700) Proceeds from sale of capital asset - 124,097 Total Other Financing Sources 1 (Uses) (14,596,562) (20,224,041) Excess of Revenues and Other Sources over (under) 1 Expenditures and Other Uses (18,563,594) 11,938,340 (4,144,567) (9,120,407) Fund Balances Beginning of Year 56,846,921 21,549.904 25,094,934 14,601,733 End of Year $ 38,283,337 $ 33,488,244 $ 20,940,367 $ 5,681,326 C 1 33 LA OUINTA REDEVELOPMENT AGENCY COMBINING PROJECT AREA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2D07 Project Area No. 2 Debt Capital Special Service Projects Revenue ' Redevelopment Redevelopment Um/Moderate Agency- Agency- incomeHousing- Revenues: PA No. 2 PA No. 2 PA No. 2 Taxes and Assessments: ' Tax increment $ 20,777,158 $ $ 5,194,289 Use of Money and Property: Interest income 556,329 125,423 343,072 Rental income Other revenue: _ Miscellaneous revenues Loan repayments _ - 59,409 Total Revenues 21,333,487 125,423 5,596,770 Expenditures: Current: General Government: Administrative costs 184,484 76,401 316,022 Professional services 40997 231727 Planning and development: Real estate acquisitions Subsidy to low and moderate - - 19,966,444 housing Capital Outlay Project improvement costs - 66,107 1,173,210 Debt Service: Interest expense Long-term debt repayments 745 2,700 706,600, _ - - Total Expenditures 3,658,829 183,506 21,686,403 Excess of Revenues over - junder) Expenditures $ 17,674,658 $ (58,082) $ (16,089,633) Other Financing Sources (Uses) Transfers in Transut $ 1,954,560 $ $ 16,000,000 Long-termrs de Long-term debt issued _ - (1,954,560) Pass through agreement payments (17,453,875) " Proceeds from sale of capital asset Total Other Financing Sources (Uses) (15,499,316) 14,015,"0 Excess of Revenues and Other Sources over (under) Expenditures and Other Uses 2,175,343 (68,082) (2,044,193) Fund Balances Beginning of Year 10,734,999 2,748,430 12,121,149 End of Year $ 12,010,342 S 2,890,348 $ 10,078,856 U Ii 1 34 I ' LA QUINTA REDEVELOPMENT AGENCY COMBINING PROJECT AREA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2007 1 TOTALS ' Debt Capital Special Service Projects Revenue Revenues: Funds Funds Funds Taxes and Assessments: ' Tex increment $ 62,806,662 $ $ 15,701,666 Use of Money and Property: Interest income n Rental income 1,610,481 3,969,238 848,948 Other revenue: - - 234,328 Miscellaneous revenues 82,841 162,038 Loan repayments 884,982 ' Total Revenues 64,417,143 4,052,079 17,931,962 Expenditures: Current: General Government Administrative costs 546,546 370,093 - 897,002 Professional services 143,994 775,242 644,276 Planning and development: Real estate acquisitions - Subsidy to low and moderate - - 19,978,473 ' housing Capital Outlay: - 4,705,800 125,000 Project improvement costs - 20,967,177 1,173,210 Debt Service: ' Interest expense Long -tens debt repayments 14,396,594 5,120,448 Total Expenditures 20,207,583 26,818,312 22,817,901 Excess of Revenues over (under) Expenditures $ 44,209,560 $ (22,766,233) $ (4,986,9M) Other Financing Sources (Uses) Transfers in Transfers out $ 6,100,000 $ - $ ' Long -tens debt issued (100,000) - 2,102,000 (22,g02,698 698 ) Pass through agreement payments 100,000 (36,498,575) Proceeds from sale of capital asset - - 124,097 Total Other Financing Sources ' (Uses) (30,095,977) (6,178,601) Excess of Revenues and Other Sources over (under) Expenditures and Other Uses 14,113,683 (22,766,233) (11,164,600) Fund Balances Beginning of Year 32,284,903 84,680,265 26,922,882 ' End of Year $ 46,398,586 $ 61,914,052 $ 15,758,282 1 1 1 35 LA OUINTA REDEVELOPMENT AGENCY COMPUTATION OF LOW AND MODERATE INCOME HOUSING FUNDS EXCESSISURPLUS Low and Moderate Housing Funds - All Project Areas July 1, 2006 Opening Fund Balance $ 83,769,803 Less Unavailable Amounts: Unspent debt proceeds (Section 33334.12 (g)(3)(13)) (56,846,921) Notes receivable (12,974,945) (69,821,866) Available Low and Moderate Income Housing Funds 13,947,937 Limitation (greater of $1,000,000 or four years set -aside) Set -Aside for last four years: 2006 - 2007 $ - 2005-2006 14,089,024 2004 - 2005 10,282,664 2003 - 2004 9,023,407 2002 - 2003 7,750,765 Total $ 41,146,860 Base Limitation $ 1,000,000 Greater amount 41,145,860 Computed Excess/Surplus None Low and Moderate Housing Funds - All Project Areas July 1, 2007 $ 54,041.619 (38,283,337) (13,066,117) (51,349,454) 2,692,165 $ 15,701,666 14,089,024 10,282,664 9,023,407 $ 49,096,761 $ 1,000,000 49,096,761 None 36 T4t!t 4 aCP QuiRrai AGENDA CATEGORY: BUSINESS SESSION: COUNCIUBDA MEETING DATE: November 20, 2007 CONSENT CALENDAR: ITEM TITLE: Approval of an Appropriation to Remove STUDY SESSION: Debris at SilverRock Resort from Phase I Construction PUBLIC HEARING: RECOMMENDATION: Approve an appropriation of $32,050 from the Redevelopment Agency to have Tri-Star Contracting remove debris from SilverRock Resort on the undeveloped property. FISCAL IMPLICATIONS: Adequate funding is available in RDA Project Area No. 1 unallocated reserves (Account 405-0000-290.00-00) for this appropriation. BACKGROUND AND OVERVIEW: Currently, there are two main debris piles on the undeveloped property at SilverRock Resort. The north pile (by Avenue 52) contains mostly concrete and asphalt which came from the infrastructure construction. The south pile (by the maintenance building on Avenue 54) contains mostly green waste and some demolition material from the former Kennedy Ranch. The piles are highly visible to the members of the public utilizing the site. Staff contacted Burrtec Waste Management, Emery Landclearing, and Tri-Star Contracting for bids to remove the construction debris from SilverRock Resort. Burrtec only provides container services and does not provide the equipment for debris clearing and loading. Emery Landclearing's bid was $36,661 and Tri-Star's bid was $32,050. Staff is recommending an appropriation of $32,050 from the RDA for Tri-Star Contracting to remove the construction debris from the undeveloped property at SilverRock. A 013 FINDINGS AND ALTERNATIVES: The alternatives available to the Redevelopment Agency include: Approve an appropriation of $32,050 from the Redevelopment Agency to have Tri-Star Contracting remove debris from SilverRock Resort that was left on the undeveloped property; or 2. Do not approve an appropriation of $32,050 from the Redevelopment Agency to have Tri-Star Contracting remove debris from SilverRock Resort that was left on the undeveloped property; or 3. Provide staff with an alternative direction. Respectfully submitted, Edie Hylton Community Services Director Approved for submission by: Thomas P. Genovese, Executive Director 014 COUNCILRDA MEETING DATE: November 20, 2007 ITEM TITLE: Authorization for Overnight Travel for Assistant City Manager/Development Services and one Management Analyst to attend the 2008 California Redevelopment Association (CRA) Annual Conference and Expo to be held in Anaheim, California on March 26 - 28, 2008 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: A2 STUDY SESSION: PUBLIC HEARING: Authorize overnight travel for the Assistant City Manager/Development Services and one Management Analyst to attend the 2008 CRA Annual Conference and Expo to be held in Anaheim, California on March 26 - 28, 2008. FISCAL IMPLICATIONS: The Fiscal Year 2007/2008 RDA Budget has allocated funds for travel, training and meetings for staff. Attendance at this seminar is estimated to be $1,258 per person based upon the following costs: Conference $ 545 Lodging (2 nights x $190) $ 380 Meals 13 days x $75) $ 225 Travel $ 108 Total $1,258 The cost will be divided among Project Areas 1 and 2 Capital Project Fund and Low - Mod Housing Fund as follows: Acct. #405-9001-702.510-01 (40%); #245-9001- 703.51-01 (20%); 406-9002-702.51-01 (20%); and #246-9002-703.51-01 20%►. CHARTER CITY IMPLICATIONS: None 015 BACKGROUND AND OVERVIEW: CRA provides education and networking opportunities for redevelopment practitioners so they can effectively apply California redevelopment law and regulations in reducing blight, promoting economic development, creating jobs, and developing affordable housing in their communities. CRA conducts educational seminars and conferences each year and publishes workbooks and documents regarding various aspects of redevelopment. The 2008 Annual Conference & Expo is a large convention of local and state officials, organizations and firms taking part in substantive sessions, small group discussions, a trade show, networking, and keynotes that provoke thought, stir to action, develop relationships and renew acquaintances. FINDINGS AND ALTERNATIVES: The alternatives available to the City Council include: 1. Authorize overnight travel for Assistant City Manager/Development Services and one Management Analyst to attend the 2008 CRA Annual Conference & Expo to be held in Anaheim on March 26 through March 28, 2008; or 2. Do not authorize overnight travel for Assistant City Manager/ Development Services and one Management Analyst to attend the 2007 CRA Annual Conference & Expo to be held in Anaheim on March 26 through March 28, 2008; or 3. Provide staff with alternative direction. Respectfully submitted, Douglas R. E4ans Assistant City Manager - Development Services Approved for submission by: Thomas P. Genovese, Executive Director Attachment 1: Conference Program Description ois visit www.calredevelop.org Redevelopment. Building Better Communities Desired topic areas and case studies: Innovative, effective techniques and approaches to carrying out redevelopment activity; trends and patterns of redevelopment in California; diverse societal, cultural, economic, technical, legal, planning, demographic, and other relevant perspectives; blight findings, eminent domain proceedings, land use regulations, sustainable and green development within redevelopment; financing techniques, relocation issues, close-out of expiring project areas, implementation plans Job creation, inclusionary housing, infrastructure, dealing with brownfields, public education about redevelopment, and preparing the next generation of redevelopment leaders. Types of panels and sessions: A mix of agency practitioners and private sector experts who can present (Werent, relevant perspectives. Most panels are comprised of a moderator and not more than three speakers. We encourage participation by women and minorities on panels. Session length is 75 minutes. Selection criteria: Relevance and timeliness; Well-defined focus; Practical application of the material; Originality; Format for delivery; Availability of presenters; Speaker diversity; Inclusion of redevelopment agency representatives, including those from smaller agencies; Active involvement of attendees and minimized the use of`talking heads." CRA members are given priority over nonmembers. Proposal abstracts; Include title, abstract (about 150 words); and proposed speakers. Submit to: Roger Bunting Director of Professional Development California Redevelopment Association 1400 K Street, Suite 204 Sacramento, CA 95814 (831) 373-0215 Fax: (831) 373-0661 rbunting@calredevelop.org Deadline: October 5, 2007 O17 Cfdf 4 4 a" COUNCIL/RDA MEETING DATE: November 20, 2007 ITEM TITLE: Public Hearing to Review and Take Testimony on the Mid -Year Review of the Third Five Year Implementation Plan for the La Quinta Redevelopment Agency Project Areas Nos. 1 and 2 and to Commit Additional Programs to the Third Five Year Plan RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: _ PUBLIC HEARING: Approve the Mid -Year Third Five Year Implementation Plan and approve the inclusion of the Projects and Programs listed therein in the Mid -Year Third Five Year Implementation Plan (Attachment 1). FISCAL IMPLICATIONS: None for this action. BACKGROUND AND OVERVIEW: Per the Community Redevelopment Law, the Redevelopment Agency must adopt a five-yearimplementation plan that identifies: • The housing and non -housing redevelopment projects that will be implemented during a five year period; • The financial resources the redevelopment agency will pledge to implement the projects and programs; • The blight the projects and programs will alleviate; and • The affordable housing units the redevelopment agency will facilitate that feature long-term affordability covenants. ..j 013 The Agency adopted the Third Five -Year Implementation Plan for Redevelopment Project Area Nos. 1 and 2 in June 2005. The Redevelopment Law requires the Agency to publicly review the Implementation Plan no earlier than two years and no later than three years after the Plan was adopted. Further, if the Agency desires to undertake new redevelopment projects and programs that were not listed in the Implementation Plan, then these projects must be added to the Plan before they can be implemented. A public hearing must be conducted for the mid-term review before the Agency may add projects to the Implementation Plan. The public hearing notice for this meeting was published three consecutive weeks on October 20, 2007, October 27, 2007, and November 3, 2007. Further, the notice was posted in four areas within both Project Areas for three consecutive weeks. The attached report entitled, "Five -Year Implementation Plan Review" details the projects and their related costs that the Agency has implemented since July 2005. Further, this document also identifies the projects that staff recommends be added to the Third Five -Year Implementation Plan. These projects were developed from prior consultations with the Agency Board. Following the Public Hearing, staff will incorporate the Agency Board's direction into the Third Five -Year Implementation Plan. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve the Mid -Year Third Five -Year Implementation Plan and approve the inclusion of the Projects and Programs listed therein in the Mid -Year Third Five - Year Implementation Plan; or 2. Do not approve the Mid -Year Third Five -Year Implementation Plan and do not approve the inclusion of the Projects and Programs listed therein; or 3. Provide staff with alternative direction. Respectfully submitted, Douglas R. vans Assistant City Manager - Development Services �... 013 Approved for submission by: C 11)'141� Thomas P. Genovese, Executive Director Attachment: 1. Mid -Year Third Five -Year Implementation Plan 2. Third Five -Year Implementation Plan 020 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 —ATTACHMENT 1 G 2007 Midterm Review of Third FivewYear Implementation Plan • Project Area 1 • Project Area 2 (q RSG INTELLIGENT COMMUNITY DEVELOPMENT November 20, 2007 ROSENOW SPEVACEK GROUP INC. T 714 541458S / 021 309 WEST 4TH STREET F 714 5411175 J SANTA ANA, CALIFORNIA E INFOa WEBRSG COM 92701-4502 W EBRSG COM LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 INTRODUCTION The purpose of this document is to present a Mid Term Review of the Third Five -Year Implementation Plan ("Implementation Plan") for the La Quinta Redevelopment Agency (the "Agency") for the City of La Quinta ("City"). The Implementation Plan was prepared and adopted on June 7, 2005 by the Agency in compliance with Article 16.5, Section 33490 of the California Community Redevelopment Law ("Law"). Since 2005 the Agency has been actively implementing the redevelopment, economic development and housing initiatives outlined in the Implementation Plan. The Law provides that the Agency shall conduct a public hearing at least once during the five-year term to receive testimony regarding redevelopment and housing implementation activities. Further, the Law provides that the Agency shall conduct a public hearing if it intends to amend the Implementation Plan to add or delete projects during the five-year term. This document summarizes the Agency's progress toward implementing the initiatives summarized in the Implementation Plan, and serves as the basis for the mid -point public review and discussion. Further, it identifies new redevelopment and housing projects the Agency proposes to add to the Implementation Plan. If these projects are approved by the Agency after the November 20, 2007 public hearing, the Implementation Plan will be revised accordingly. IMPLEMENTATION PLAN CONTENTS The Law requires that the Agency prepare an Implementation Plan every 5 years that details the following: • The anticipated redevelopment, economic development and affordable housing projects and programs that will be implemented during the five year period; • The blight and the redevelopment purposes the project and program proposals will address; • The anticipated revenues and expenditures for the five year period; and • The housing projects and programs that will preserve and increase the supply of housing affordable to very low-, low- and moderate -income households. The Agency has two Redevelopment Project Areas and prepares a consolidated implementation plan for these two project areas. The first implementation plan was adopted in December 1994. The second implementation plan was adopted in July 1999. The second implementation plan was subsequently replaced by the current Implementation Plan. PROJECTS AND PROGRAMS IMPLEMENTED SINCE 2004 Project No. 1 and Project No. 2 were created to address physical and economic blighting conditions in the City. Project No. 1 was established in 1983 to redevelop and expand deficient public infrastructure and facilities, to revitalize La Quinta's Cove and Village communities, and to address deficient community recreation facilities. Project No. 2 was created in 1989 to provide a mechanism to remove impediments to commercial and residential redevelopment by addressing acute infrastructure and public facility deficiencies. Both projects also assist the City with achieving its affordable housing mandates per State planning laws. 022 O RSG C Wocuments and Settings\dpowell\Local Settings\Temporary Internet Files\OLKV7 LO 2007 Mid Term Renew (2).decPage 2 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 Redevelopment/Economic Development Projects Initiated or Completed The Agency's redevelopment and economic development activities have been a combination of developing/implementing new projects/strategies, completing projects initiated in prior fiscal years and expanding the Project Areas' marketing program. These activities are designed to address physical and economic blight, to encourage private sector investment by removing impediments to development and redevelopment, and to provide increased sales and economic activities within the Project Areas. The following activities have been completed since the adoption of the Implementation Plan: Project Area No. 1— Redevelopment/Economic Development Improvements SilverRock Resort Expenditures since 2004: $28, 691, 059 The City opened the Phase I tournament golf course (the Arnold Palmer Classic Course at SilverRock). The Agency conducted a developer/operator solicitation process that resulted in an Exclusive Negotiation Agreement with Destination Development Company (DDC), a Lowe Enterprise Company. The Agency then accepted a conceptual site plan in June 2005 and authorized staff to negotiate a property disposition and development agreement (DDA) and development agreement (DA). The DDA and DA were approved by the City Council and Agency Board in December 2006. Project Area No. 1—Capital Improvements Eisenhower Drive Bridge and Drainage Improvements Expenditures since 2004: $2, 866,126 This completed project included the widening of Eisenhower Street from two to four lanes, from Avenue 50 to just north of Calle Tampico, including the bridge over the La Quinta Evacuation Channel. SilverRock Resort Phase II Infrastructure Expenditures since 2004: $4,135, 800 This project includes the design and construction of on -site water, sewer, dry utilities, irrigation, and golf cart bridges to serve the balance of the SilverRock Resort property. Design is underway; construction is expected to begin in early 2008. SilverRock Resort Phase II Roads and Entries Expenditures since 2004: $1,436,000 The project entails the design and construction of the resort entrance at Jefferson Street as well as all remaining internal roads. Design is underway; construction is expected to begin in mid 2008. SilverRock Resort Clubhouse Expenditures since 2004: $8,640,000 This project includes the design, construction, and furnishing of a permanent clubhouse at SilverRock Resort. Design is underway; construction is expected to begin in late 2008. O RSG 4..00 V3 Page 3 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 YEW SilverRock Resort Phase II Golf Course Expenditures since 2004: $421,943 The second 18-hole golf course at SilverRock Resort is currently being designed by Jacobsen/Hardy Golf Course Design. Timing of construction will be dependent upon market demand, but is anticipated in the 2011-2012 timeframe. Continuing Projects from Previous Five Year Planning Period Expenditures since 2004: $1,357,646 The La Fonda Street improvements, which included decorative street lights, new sidewalk, curb, and gutter, street reconstruction and restriping, were completed in July 2004. The Downtown Lighting Project included the installation of new light fixtures on new foundations and associated electrical infrastructure on Avenida Bermudas and Desert Club Drive and was completed in June 2005. Eisenhower Landscape Improvements included the installation of landscape materials along the east side of Eisenhower Drive and along Avenue 50 and were completed in 2005. The Village Parking Lot Project enhanced an existing turf parking lot with a concrete asphalt surface, perimeter landscaping, lighting, and two "protected" pedestrian crossings on Avenida Bermudas and was completed in December 2005. The Village Roundabout Project, originally completed in 2001, was the installation of a traffic circle at the intersection of Avenida Montezuma and Avenida Navarro to calm traffic while providing unrestricted flow. Further upgrades, completed in August 2007, were made to the Village roundabout to better control speed and improve efficiency. Upgrades included the installation of a raised center island, revised entry alignments, and installation of a "truck apron" to improve truck traffic flow. Avenue 52 median landscaping improvements are currently under construction and Avenue 54 median landscaping is in the design phase. Additional funds were used to fund street improvements to the traffic signal at Westward Ho and Dune Palms adjacent to a CVWD wellsite, as required by an agreement between the City and CVWD. The project also included installation of sidewalk on Westward Ho Drive, from Dune Palms Road to 650' east to improve safety for students walking to La Quinta High School. Project Area No. 2 — Redevelopment/Economic Development Improvements SilverRock Resort Expenditures since 2004: $1,512,445 The City opened the Phase I tournament golf course (the Arnold Palmer Classic Course at SilverRock.). The Agency conducted a developer/operator solicitation process that resulted in an Exclusive Negotiation Agreement with Destination Development Company (DDC), a Lowe Enterprise Company. The Agency then accepted a conceptual site plan in June 2005 and authorized staff to negotiate a property disposition and development agreement (DDA) and development agreement (DA). The DDA and DA were approved by the City Council and Agency Board in December, 2006. Project Area No. 2 — Capital Improvements Highway 111 Improvements Expenditures since 2004: $312,000 Completed in 2005, the project included roadway, curb and gutter improvements along Highway 111 in the eastern segment of Project Area No. 2. Q RSG 024 Page 4 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 Simon Drive Traffic Signals Expenditures since 2004: $45,379 This project included the installation of a new traffic signal at the intersection of Washington Street and Simon Drive and is complete. Housing Projects - Both Project Areas 0 RSG The Agency is proactively implementing a multifaceted housing program to meet both the Agency's and the City's state housing mandates. Agency housing activities center around the following initiatives that afford housing opportunities to very low-, low- and moderate -income households: Facilitate new housing development by working with developers to purchase property and underwriting new construction; • Fund silent trust deed loans that afford home purchase opportunities; and • Fund residential rehabilitation loans that improve the affordable homes in the community, or facilitate the conversion of dwelling sanitary systems from aging septic tanks to the City's sewer system. The attached Exhibit 1 shows the location of the housing projects in the Project Areas. Specific programs and projects include the following: La Quinta Rental Housing Program Expenditures since 2004: $331,050 Since 2004, the Agency has substantially rehabilitated 38 units including 37 units affordable to very low-income households and 1 unit affordable to low-income households. La Quinta Housing Program Expenditures since 2004: $957,002 Since the adoption of the Implementation Plan, the Agency has funded 13 second trust deed mortgages for 1 very low- and 2 low-income households Vista Dunes Courtyard Homes Expenditures since 2004: $20,084,082 Relocation activities are complete. Site improvements and home construction began in July 2006 and are expected to be complete in Spring 2008. The Agency will record 80 55-year covenants on units affordable to very low-income households. Dune Palms Multi -Family Housing Expenditures since 2004: $2,261,283 The Agency has entered into an Affordable Housing Agreement with Coachella Valley Housing Coalition to facilitate development of a 218 unit multi -family complex. These one, two, three and four bedroom dwellings will rented at affordable rents to very low Page.5 025 LA QUINT'A REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 and moderate income households. The site is currently being graded and construction will begin in January 2008. Property Acquisition Expenditures since 2004: $19,966,444 This expenditure was to purchase a 19.97 acre property for Dune Palms Road — South. We are in the site planning stages and do have an exclusive negotiation agreement with the Shovlin Companies to develop affordable rental multi -family housing on a portion of this property. The location will be determined once the site planning efforts are complete. The Agency is in escrow to acquire this 73 unit apartment complex located on Washington Street, north of Darby Road. Once purchased, the complex will be rehabilitated and new apartment units will be constructed on site. The development will be affordable to very low income households. The Agency also acquired a 5.8 acre vacant property adjacent to the Washington Street apartments. This parcel will be combined with the apartment parcel to establish a larger multi -family rental complex. The combined properties can accommodate 156 units, the 73 existing apartment dwellings and 83 new dwellings. As with the Washington Street Apartments, these dwellings will be affordable to very low income households. The Agency is in escrow to purchase this 34,848 square foot parcel in the La Quinta Village. It anticipates facilitating a mixed use development that will include low and moderate income dwellings. O RSG �� Padw6 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 Affordability Covenants O RSG The Agency has recorded affordability covenants for a total of 66 dwelling units since July 2004, including 41 units that house very low-income households. During the same timeframe, the Agency lost covenants on 33 dwelling units, including 5 units affordable to very low-income households. The Agency also has 574 units that are either under construction or in the planning process, including 512 units that will, be affordable to very low-income households. The following table summarizes the Agency's production to date. Units Completed Since 2004: LQ Rental Housing Sales 37 1 38 Agency Acqusition/Rehabilitation 1 1 Second Trust Deed Loans 1 2 10 13 Residential Rehahllitation 3 7 4 14 Units Lost (5) (16) (12) (33) Subtotal: 36 (6) 3 33 in PlanningfUnderConstruction: Coachella Valley Housing Coattion 216 2 218 Dune Palms South 200 200 Washington 96 60 156 Subtotal: 512 60 2 574 2004 to 2007 Production: 548 54 5 607 1994 to 2004 Production: 242 335 405 982 Total: 1994 to 2007 790 389 410 1,589 The Agency also has three proposed projects, summarized in the following table: Proposed Projects Very Low, Low/Moderate Total Dune Palms North 30 30 Total 0 30 30 The following table summarizes the Agency's total production requirement and progress to date. The production need is projected through the end of the effectiveness of the Project Areas. Page 7, A 027 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 Affordable Housing Need)Surplus '!: Ve Low Low)Moclmte Total Production Need 798 1,196 1,994 Units Produced (1994 to 2007) 790 799 1,589 Remainng Need 8 397 405 Proposed Projects 0 30 30 Remaining Need/(Surplus) 8 367 375 As noted previously, the units produced totals include units under construction or in the planning process. Including the proposed projects, the Agency has an additional need foj 8 units affordable to very low-income households and 367 units affordable to low - and moderate -income households. ORSG T Page's 023 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 FINANCIAL RESOURCES The Implementation Plan includes anticipated revenues and expenditures for the Project Areas during the five year planning period for Project No. 1 and Project No. 2. The following tables updates those projections with actual revenues and expenditures since July 2004 and provide new estimates through the end of the five year period. Revenue Expenditure$ Tabrg Agency Payments ERAF Payments Bond Payments Gereral Fund Loan Interest Contract Services Agency Adninistration Washirgton4-10 Interchange Sidewalk Improvements IHandicap Ramp Improvements Eisenhower Bridge1Drainag9 EisenhowerWashington La Fonda Street Imps Downto,vn Lighting SlverRock Resort Phase I SlverRock Resort Phase 2 Golf Course SilverRock Resort Clubhouse SWerRodk Resort Phase 2 Infrastructure S,ilverRock Resort Phase 2 Entry Eisenhower Landscape Boys and Grls Club Sports Complex Village Pakng Lot Village Roundabout Ave 52 & Ave 54 Medan Landscapirg Traffic Signal Village Sigrage Corporation Yard Phase 1 Golf Cart Routes Calla E stado/La Fonda Fed. Crossing Eisenhower Drwe Rehabilitation Miscellaneous Street Improvments Total Expenditures Year End Fund Balance o RSG 2D04-05 2005-06 2006-07 2007-08 20OB-09 $ 28,155,950 $ 37,815,635 $ 44,303,802 $ 47,967,300 $ 49,406.319 19,309,927 19,044,700 23,527,591 24,233,419 2,780,728 2,903,657 - - - 10,324,969 10,305,905 10,298,900 10,295,553 10,304,913 952,764 1,116,237 1,020, 000 1,02Q 000 1,020,000 3,114,004 2,194,225 1,441,616 1,568,380 1,803,637 - 500,425 92377 28,110 292,413 50,000 50,000 50000 5Q000 50,000 1,078 25,000 25,000 10,000 10,000 2,100,053 766, 074 854,394 74,476 212,046 63,487 (16,270) 16,313,666 3,193,435 3,40Q 550 14,475,909 421,943 2,10Q000 8,64Q000 16,507,900 4,135,800 22,223,141 1,436,000 4,158,224 56,010 Pha 652 331 352,485 13,801 8Q 638 66,149 791,073 21,019 24Q393 18,969 65QODO 650,000 163,163 44Z200 904,520 45Q000 115,771 62Q501 35,000 35,000 $ 34,790,279 $ 42,875,629 $ 50,964,912 $ 98,635,811 $ 39,328.902 $ (6,634,329) $ (11,694,322) $ (18,355.432) $ (69,02a,943) $ (58,946,526) Page 9 029 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quints, CA 92247 Revenue Expenditures Taxing Agency Payments ERAF Payments Bond Payments General Fund loan Payments Contract Services Agency Administration SilverRodc Resort Highway 111 Improvements Simon Drive Signal Pedestrian Activated Crosswalk Traffc Signal Total Expenditures Year End Fund Balance O RSG 2004.05 2005-06 2006-07 2007-08 2008-09 $ 14,249,709 $ 20,410,735 $ 21,45B,909 $ 23,555,200 $ 24,251,856 16,748,363 17,453,875 5,702,380 5,702,192 418,Z 4 419,168 419,785 1,450,000 1,500,000 1,053,580 1,593,358 1,000,000 100,000 50,000 373,462 1,404, 396 - 187,633 200,000 200,000 1,512,445 312,526 127,128 45,379 275,000 2D,728 $ 3,357,751 $ 20,665,444 $ 18,919.039 $ 7,579,508 $ 7.452.192 $ 10,891,958 $ 10,637,249 $ 13,177,119 $ 29,152,811 $ 45,962,475 Page'10 039 LA QUINTA REDEVELOPMENT AGENCY P.O. Box 1504, La Quinta, CA 92247 R Housing Fund The following table updates the projected housing fund revenues and expenditures since the beginning of the Third Implementation Plan period. Note that the year end fund balances include proceeds from the 2004 Finance Authority Bond. Revenue 2004-05 2005-06 2006-07 2007-08 2008-09 Beginning Fund Balance $ 9,512,242 $ 73.377,371 $ 82,504,289 $ 58,835,309 $ 17,089.382 Project No.1 Tax Increment Project No. 2 Tax Increment 2004 Finance Authority Band LQ Rental Program Income 2nd Trust Deed Home Sale Income Building Horizons Home Sale Income Interest Income Other Revenues Total Revenue Expenditures 2004 Finance Authority Bond 1994 Bond Payments Housing Program Administration LQ Rental Program 2nd Trust Deed Loan Program Foreclosure Acquisition Building Horizons Mdti-Family Housirg Rehabilitation Vista Dunes Courtyard Home; Lennar Court Homes Mobile Home Park Rehabilitation Property Acquisition Village Mixed Use Housing New Housing Production Dune Palms Road Dune Palms &Ave 48 Housing Ham mer Property Total Expenditures Year End Fund Balance 6,773,423 9,125,550 10,507,376 10,007,549 1Q317,685 3,509,241 4,962,474 5,194,288 5,257,145 5,417,572 56,736,017 517,243 299,525 234,328 314,000 305,000 384,812 249,097 150,000 150,000 85,000 85,000 1,412,344 2,923,270 3,555,460 57,800 50,000 2,39a 994 1,932, 077 1,022,021 $ 80,854,504 $ 93,006,079 $ 103,266,859 $ 74,706,803 $ 33.414,639 2,990,049 5,171,981 5,923,156 5,926,806 5,919,994 483,246 480,575 479,789 479,301 478,083 516,043 324,656 1,235,750 1,236,869 331,050 314,000 305,000 957,002 250,000 150,000 150,000 250,000 250,000 3,96Q 782 1,485,664 14,636,636 12, 021,371 z520,000 4,000,000 3,000,000 169,601 19,966,444 1,000,000 1,000,000 1,000,000 500,000 1,016,001 1,315,255 475,246 372,973 1,785,614 27,994,948 $ 7,477,133 $ 10,501,790 $ 44,431,550 $ 57,617,421 $ 12,839,946 $ 73,377,371 $ 82,504,289 $ 58,835.309 $ 17,089,382 $ 20,574,693 o RSG 0 31 Page 11 LA QUINTA REDEVELOPMENT AGENCY r P.O. Box 1504, La Quinta, CA 92247 PROJEiCTS/PROGRAMS PROPOSED TO BE ADDED TO THE IMPLEMENTATION PLAN The Agency desired to implement the following projects and proposes to add these projects to the Implementation Plan. These projects are also the subject of the mid-term public hearing. Project Area No. 7 The Village Signage Program Expenditures: $442,200 This project includes the design and installation of six double -face monument style signs at key locations in and around the La Quinta Village area. Phase I Golf Cart Routes Expenditures: $456, 000 Phase I focuses on installing golf cart routes that serve the Village. Initial routes include: Park Avenue from Washington Street to Avenue 50; Calle Tampico from Washington Street to Eisenhower Drive; Eisenhower Drive from Avenue 50 to Avenida Fernando; and a golf cart charging station within the Village Parking Lot. Calle Estado/La Fonda Mid -Block Pedestrian Crossing Expenditures: $115,271 This project is the installation of a mid -block pedestrian crossing between Calle Estado and La Fonda, which includes decorative interlocking pavers, landscape, irrigation, and site furnishings. Eisenhower Drive Rehabilitation Expenditures: $620, 501 The project includes pavement rehabilitation on Eisenhower Drive from the Eisenhower Bridge to Coachella Drive. Corporation Yard Expenditures: $904,520 This project entails the design and construction of a new City Corporate Yard. The project is currently under design. Project Area No. 2 Pedestrian Activated Crosswalk (Westward Ho Drive at La Quinta High School) Expenditures: $275,000 The proposed improvements include the installation of a pedestrian activated crosswalk and Westward Ho Drive across from La Quinta High School. OO RSG Page 12' 032 LA QUINTA REDEVELOPMENT AGENCY P.O. Oox 1504, La Quinta, CA 92247 X Housing projects o RSG Dune Palms Road North (Project Area No. 2) Expenditures: $2, 261, 283 The Agency is assembling properties along the east side of Dune Palms Road, just south of Westward Ho. The four single family homes are on large, deep lots, and Dune Palms Road widening effort will eliminate all front setbacks (the homes front onto Dune Palms Road). In order to facilitate a planned development of these properties after the roadway widening, The Agency is acquiring these homes, relocating the residents, and will then be assembling these parcels for an affordable housing development. The Agency anticipates the 5.12 acre site can accommodate up to 30 dwellings. These dwellings will be affordable to low and moderate special needs households. Page 13 033 LA QUINTA - AFFORDABLE HOUSING DEVELOPMENTS EXHIBIT 1 Washington St Apts Miles Ave— �..... Centre Point f I Hadley Villas Vista Dunes Dune Palms North Aventine - �L ,ii. '!` '�}C� Watercolors CVHC Silverhawk `r" n S��easons Senior11 A iss "Y 0 z 11110-111111 C �I Mountain View ! ��-` J.,J,:.+Lc;:,:�,1,: �. ;,,,... nC: - — LEGEND „.... - +I - City Boundary r I L] Project Area 1 ~ �..1._...... ® Project Area 2 A�" ..._:.fir �,� �.•- Affordable Housing Developments �Rs- 0 0.150.3 0.6 0.9 1.2 i ATTACHMENT 2 THIRD IMPLEMENTATION PLAN This document is the Third Implementation Plan ("Implementation Plan") for La Quinta Redevelopment Project No. 1 ("Project No. 1") and La Quinta Redevelopment Project No. 2 ("Project) No. 2"). It has been prepared by the La Quinta Redevelopment Agency ("Agency") to address the requirements of Section 33490 of the California Community Redevelopment Law, Health, and Safety Code Sections 33000 et seg. ("Law"). Pursuant to the Law, this Implementation Plan presents: • The goals and objectives that will guide redevelopment and affordable housing implementation activities in La Quinta Redevelopment Project Area No. 1 ("Project Area No. 1 ") and La Quinta Redevelopment Project Area No. 2 ("Project Area No. 2") • The specific programs, projects, and expenditures for the five-year term (2004-05 through 2008-09) of this Implementation Plan • An explanation of how the projects will eliminate blight in the Project Areas • An explanation of how the Agency's affordable housing projects and expenditures will implement the low- and moderate -income housing requirements of the Law through: 1. An annual Housing Program for the five-year term that provides sufficient detail to measure performance of the Low- and Moderate- Income Housing Fund ("Housing Fund") requirements 2. An enumeration of the number of housing units to be rehabilitated, assisted, price restricted, or destroyed during the term of the respective Project No. 1 and Project No. 2 Redevelopment Plans 3. An outline of the Agency's plan for the utilization of the Housing Fund including annual deposits, transfer of funds, or accruals for special projects 4. An identification of programs/projects that will result in the destruction of existing affordable housing (if any), and the proposed locations for replacement housing • The Agency's Second Ten -Year Affordable Housing Compliance Plan. La Quints Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 1 Third Implementation plan 0 3 L= BACKGROUND The La Quinta Redevelopment Agency was established on July 5, 1983. Shortly thereafter, in November 1983, the Agency adopted the 11,600-acre Project Area No. 1, which includes land designated for commercial, office, residential, retail, institutional, recreational, and public uses. Generally, Project Area No. 1 is bounded by Avenue 50 to the north, Jefferson and Madison Streets to the east, Avenue 60 to the south, and the La Quinta City boundary on the west. Project Area No. 1 was established to redevelop and expand deficient public infrastructure and facilities, to facilitate economic development, to expand recreation opportunities, and to revitalize the La Quinta Village. The Project No. 1 Redevelopment Plan has been amended twice since its adoption. The first Amendment occurred in 1995 to modify certain time limits and to: • Add eligible public facilities and infrastructure projects • Increase the tax increment revenue limit to $2,000,000,000 • Increase the bond indebtedness limit to $100,000,000 • Extend the Agency's eminent domain authority for 12 years. The Redevelopment Plan was again amended in 2003 to eliminate the November 2003 time limit on the Agency's ability to incur debt that would be repaid from future tax increment revenue, and to extend, for one year, the time period that the Agency may receive tax increment revenue from Project No. 1. Important Project No. 1 Redevelopment Plan time and financial limits are as follows: Tax Increment Revenue Limit: $2,000,000,000 Total Bond Debt Limit: $100,000,000 Agency May Implement Redevelopment Projects Until: November 2024 Agency May Receive Tax Increment Revenue Until: November 2034 Agency May Use Eminent Domain for Property Acquisition: March 2007 In May 1989, the Agency established Project Area No. 2. This Project Area is 3,116 acres in size and encompasses commercial, residential and institutional land uses. Located in the northern area of the City, Project Area No. 2 is generally bounded by Avenue 50 to the south, Fred Waring Drive to the north, Washington Street to the west, and Jefferson Street to the east. Project No. 2 was established to provide a mechanism to remove impediments to commercial and residential development, to address public infrastructure and facility deficiencies, and to increase and improve the community's supply of affordable housing. Since it was adopted, the Project No. 2 Redevelopment Plan was amended twice. The first Amendment occurred in December 1994 to bring the Redevelopment Plan's time limits in La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 2 Third Implementation Plan 036 3G BACKGROUND conformance with the Law. The second Amendment occurred in January 2004, when the tax increment limit was increased to $1,500,000,000. Important Project No. 2 Redevelopment Plan financial and time limits are as follows: Tax Increment Revenue Limit: $1,500,000,000 Total Bond Debt Limit: $100,000,000 Agency May Implement Redevelopment Projects Until: November 2024 Agency May Receive Tax Increment Revenue Until: November 2034 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 3 Third Implemeptation "7 f _- REDEVELOPMENT GOALS - Project No. 1 Section 400 of the Project No. 1 Redevelopment Plan delineates the following redevelopment goals. These goals were used to develop the strategy for this Implementation Plan and will guide project implementation activities. • Eliminate Blight. Eliminate and prevent the spread of conditions of blight including: underutilized properties and deteriorating buildings, incompatible and uneconomic land uses, deficient infrastructure and facilities, obsolete structures, and other economic deficiencies in order to create a more favorable environment for commercial, office, residential, and recreational development. • Ej pand Commercial Base. Expand the Project Area's commercial base. • Improve Facilities/Infrastructure. Improve public facilities and public infrastructure. • Improve Drainage Facilities. Improve inadequate drainage infrastructure. • I rove Utili Service. Improve and/or provide electric, gas, telephone, and wastewater in rastructure to both developed and undeveloped properties. • Promote Job Growth. Promote local job opportunities. • Coordinate Stake Holder Participation. Encourage the cooperation and participation of residents, businesses, business persons, public agencies, and community organizations in redevelopment/revitalization initiatives. • Ensure Quality Design and Development. Implement design and use standards to assure high aesthetic and environmental quality, and provide unity and integrity to development within the Project Area. • Mdress Irregular Lots. Address parcels of property that are of irregular form and shape, are inadequately sized for proper usefulness and development, and/or are held in multiple ownership. • Alsemble Parcels. Remove impediments to land disposition and development through the assembly of property into reasonably sized and shaped parcels served by improved infrastructure and public facilities. • Cgrrect Underutilized Lots. Recycle and/or develop underutilized parcels to accommodate higher and better economic uses while enhancing the City's financial resources. • Promote Housing. Promote the rehabilitation of existing housing stock. • Increase and Improve the Community's Supply of Affordable Housing. Increase, improve, and preserve the supply of housing affordable to very low-, low- and moderate -income households. La Quinta (Redevelopment Agency Project No. 1 May 2005 4 Third Implementation Plan r. D3v i BLIGHTING CONDITIONS - Project No. 1 When Project No. 1 was established the Agency identified the following blighting conditions: Inadequate Flood Control Facilities. A majority of the properties were not served by flood control facilities. When summer and winter rains would occur, many of these properties would flood which would inflict significant physical and economic losses, and impact the health, safety and welfare of residents and businesses. Deteri� orated Residential Structures in the Cove. Numerous residential dwellings in the Cove community suffered from moderate to heavy structural deterioration and had been cited for numerous Building Code violations. Because rehabilitation costs were estimated to exceed 50 percent of the then market value, many of these dwellings were considered candidates for demolition. Other less -deteriorated residential structures were candidates for an Agency -sponsored rehabilitation and reconstruction program. • Substandard Structure Design. A building survey identified a number of specific properties that were developed under less stringent building standards prior to the City's incorporation in 1982. As a result, these structures were more susceptible to flood damage due to inadequate foundations and were plagued with numerous safety hazards due to defective and substandard electrical wiring. • Mixed and Incompatible Uses. A number of residential structures in both the Cove and the La Quinta Village were being used for nonresidential uses. In addition to the unsuitability of these buildings to house these new uses, these converted properties frequently generated land use compatibility conflicts and lacked adequate storage and off-street parking facilities. • Inadequate Water and Sanitation Infrastructure. A majority of the water system was installed in the 1930's. It was undersized and the distribution system infrastructure was deteriorating. A majority of the properties were serviced by septic systems, which often, overflowed during the flooding that would occur during heavy rains, leaking sewage into the water system. • Inadequate Roadways/Streets. Regional access was limited due to the lack of roads, and the existing roadways did not have curbs and gutters and often flooded during summer and winter rains. • Stpgnant Commercial Activity. Economic activity was stagnating because many of the commercially zoned properties were subdivided into 2,500 square foot parcels and were under multiple ownership. In order to assemble a three to five acre parcel, a developer would need to negotiate land purchase transactions with as many as a dozen property owners. The water, sewer and street infrastructure was also inadequate to support commercial development, and developers often found the cost for these facilities could not be borne by their development proposals. Inadequate Park. Recreation and Cultural Facilities. The Agency also identified a lack of park space, recreation and cultural facilities. Due to its low property tax rate the City could not fund land acquisition and facility development costs. La Quinta (Redevelopment Agency Project No. 1 May 2005 5 Third Implementation Plan 039 FINANCIAL RESOURCES - Proiect No. 1 The chart below presents the anticipated revenues and expenditures for the Project No. 1 Debt Service and Capital Projects funds during the five year term of this Implementation Plan. These revenue and expenditure estimates are based upon the data contained in the City of La Quinta's March 2005 Annual Financial Management Review (the City annually conducts a comprehensive review of all of the City and Agency funds and prepares five year revenue and expenditure forecasts from which annual budget policy and project/program determinations are formulated). The revenue projections assume that Project Area No. 1 assessed values will annually increase by the inflation adjustment allowed by Proposition 13, and from development of the remaining vacant parcels within Project Area No. 1. Anticipated expenditures are based upon the polices established by the La Quinta City Council, the projects and programs identified in the March 2005 Annual Financial Management Review, and the City's Capital Improvement Program. During the next five years the Agency anticipates that the Project No. 1 expenditures will entail: Funding fiscal mitigation payments to the various taxing agencies that levy taxes in Project Area No. 1. These payments are based upon schedules that are contained in the taxing agency agreements with the County of Riverside, the community college district, local school districts, and other public agencies. Funding Education Revenue Augmentation Fund (ERAF) payments per the mandates from the State of California. In an effort to address the State's budget deficit, the State is roquirmg that the Agency pay up to $3,000,000 of tax increment revenue into a fund to reduce the State's funding commitment to local school districts. Initially, ERAF payments were to end during Fiscal Year 2005-06. However, since the State budget is still in a deficit position, the Agency is projecting continued ERAF payments at their current level during the five year term of this Implementation Plan. If ERAF payments cease, these funds would be available to fund additional projects and programs or to retire additional Project No. 1 debt. • Funding debt service payments on the 1994, 1998, 2001, 2002 and 2003 tax allocation bonds. It should be noted that the 1994 Bonds will be repaid in 2012. • Interest payments on outstanding City General Fund loans. • Funding Agency administration costs associated with Project No. 1 activities. • Completing projects that were initiated during the Second Implementation Plan funding cycle. La Quinta Redevelopment Agency Project No. 1 May 2005 6 Third Implementation Plan FINANCIAL RESOURCES - Project No. 1 2004-05 2005-06 2006-07 2007-08 2008-09 Revenue 27,307,161 27,256,607 28,073,070 28,944,862 29,851,677 Expenditures taxing agency payments 12,283,973 13,076,663 13,369,011 13,774,939 14,192,776 ERAF payments 2,780,728 3,000,000 3,000,000 3,000,000 3,000,000 bond payments 10,324,969 10,312,988 10,310,440 10,317,855 10,304,913 General Fund loan interest 952,764 661,530 1,111,206 1,604,050 contract services 707,878 519,585 354,676 363,449 372,525 Agency administration 292,413 292,413 292,413 292,413 292,413 WashingteNl-10 interchange 50,000 50,000 50,000 50,000 60,000 sidewalk improvements 25,000 25,000 25,000 25,000 25,000 handicap ramp improvements 10,000 10,000 10,000 10,000 10,000 Eisenhower bridgeldrainage 2,691,000 Total Expenditures 30,118,725 27,286,649 28,073,070 28,944,862 29,851,677 Year End Fund Balance (2,811,564) (30,042) - - - The year end fund balance deficits for Fiscal Years 2004-05 and 2005-06 will be funded from the Fiscal Year 2003-04 fund balance. The Agency projects that the Project No. 1 Non -Housing Fund will conclude Fiscal Years 2006-07 through 2008-09 with a zero fund balance. If revenues exceed projections or if ERAF payments cease, the Agency will then revise its expenditures plan accordingly during the mid-term review of this Implementation Plan. La Quinta Redevelopment Agency Project No. 1 / May 2005 7 Third Implementation Plan a Y 1 NONHOUSING PROGRAMS - Project No. 1 Through the Second Implementation Plan the Agency implemented a variety of economic development, infrastructure and public facility improvements in Project Area No. 1 including the following; SilverRock Resort. The Agency purchased 525 acres of property in Project Area No. 1 and completed master planning activities for a resort community that will encompass two golf courses, three to four resorts, community facilities, recreation space, convention facilities and retail space. The first golf course was opened in February 2005, and the Agency is currently negotiating a land disposition and development transaction with Lowe Enterprises for the development of the first resort property, and the future phased development of the additional resort, convention facilities and retail uses. • Lo Quinta Library. The Agency is funding the construction of a 20,000 square foot library that will serve both Project Area No. 1 residents and the greater community. This facility will replace the existing 3,000 square foot library which is housed in leased facilities. • Lg Quinta Historical Museum. The Agency purchased the La Quinta Historical Museum, which is located in the Village. Operated by the La Quinta Historical Society, the Museum houses exhibits on La Quinta's cultural and historical heritage. • Village Streetscape and Parking Improvements. The La Quinta Village is the commercial core of Project Area No. 1. However, it lacked sufficient off-street parking and attractive stfeetscapes. The Agency funded streetscape improvements involving the major boulevards that serve the Village and has initiated improvements to the first off-street parking facility. • Other Infrastructure and Community Facility Projects. During the past five year planning cycle the Agency also completed the following Project Area No. 1 related projects: o Improvements to the Washington Street and 1-10 interchange o Calle Rondo Channel storm drain improvements o Median landscape improvements — Avenue 50/Sinaloa/Calle Tampico o Cove mini park expansion o Phase VI - A Village commercial capital improvements o Cove Oasis/Lake Cahuilla capital improvements o CVAG/Jefferson Street Phase 1 construction o Phase 11 Fritz Burns Park improvements o Streettsidewalk improvements o La Fonda street improvements Implementation Activities — 2004-05 to 2008-09 Planning Period Nonhousing programs and projects for the coming five-year cycle are presented on the following pages. A8 funding is available, the Agency will be facilitating new initiatives that stimulate private development, address blight, and provide needed public infrastructure and facilities. La Quinta Itedevelopment Agency Project No. 1 May 2005 8 Third Implementatioq Plan 0 4 h i NONHOUSING PROGRAMS - Project No. 1 PROGRAM/PROJECT SilverRock Resort FIVE:TEAR PLAN ACTIVITIES This project will entail initiating site and building planning activities for a permanent clubhouse and a second golf course, constructing trail and passive recreation improvements, purchasing and improving domestic water well sites, and concluding negotiations for hotel and commercial property disposition and development. EXPENDITURE The Agency anticipates expending up to $14,500,000 in remaining Project No. 1 bond proceeds to leverage additional private investment. TIMELINE These activities will be implemented from Fiscal Years 2004-05 through 2008-09. PLAN GOALS THE PROJECT WILL ADDRESS • Expand Commercial Base • Improve Facilities/Infrastructure • Promote Job Growth • Coordinate Stake Holder Participation • Ensure Quality Design and Development • Correct Underutilized Lots BLIGHTING CONDITIONS THE PROJECT WILL ADDRESS • Inadequate Water and Sanitation Infrastructure • Inadequate Roadways/Streets • Stagnant Commercial Activity • Inadequate Park, Recreation and Cultural Facilities La Quinta Redevelopment Agency Project No. 1 May 2005 9 Third Implementation, Plan 0 4 3 NONIHOUSING PROGRAMS - Project No. 1 PROGRAM/PROJECT Eisenhower Drive Bridge and Drainage Improvements FIVE:YEAR PLAN ACTIVITIES This project entails replacing an existing two lane structure that is located on one of the three major arterials that accommodates north/south vehicular and pedestrian traffic through Project Area No. 1. This project also includes improving the underlying drainage system that is part of a larger Project Area No. 1 storm water evacuation facility. EXPENDITURES The Agency will expend $2,691,000 during Fiscal Years 2004-05 through 2006-07; Project No. 1 tax increment revenues will fund this project. TIMELINE This project will be designed and constructed in Fiscal Years 2004-05 through 2006-07. PLAN GOALS THE PROJECT WILL ADDRESS Improve Facilities/Infrastructure Improve Drainage Facilities BLIGHTING CONDITIONS THE PROJECT WILL ADDRESS • Inadequate Roadways/Streets • Inadequate Flood Control Facilities La Quinta Redevelopment Agency Project No. 1 May 2005 10 Third Implementation ?Ian 044 NONWOUSING PROGRAMS - Proiect No. 1 PROGRAM/PROJECT Continuing Projects from Previous Five Year Planning Period FIVE-YEAR PLAN ACTIVITIES During the Second Implementation Plan the Agency initiated the following projects; funding will continue through this five year planning period: • Washington Street/interstate 10 freeway interchange improvements • Sidewalk Improvement throughout Project Area No. 1 • Handicap Access Ramp Improvements throughout Project Area No. 1 I EXPENDITURES The Agency will expend $425,000 during Fiscal Years 2004-05 through 2006-07; Project No. 1 tax increment revenues will fund these projects. TIMELINE These projects will be implemented during Fiscal Years 2004-05 through 2007-08. PLAN GOALS THE PROJECT WILL ADDRESS • Improve Facilities/Infrastructure BLIGHTING CONDITIONS THE PROJECT WILL ADDRESS . • Inadequate Roadways/Streets La Quinta Redevelopment Agency Project No. 1 May2005 11 Third Implementation Rlan 045 REDEVELOPMENT GOALS - Project No. 2 Section 4100 of the Project No. 2 Redevelopment Plan delineates the following redevelopment goals for the Project Area. These goals were used to develop the strategy for the Implementation Plan and will guide project implementation activities. • Eliminate Blight: Remedy, remove, and prevent physical blight and economic obsolescence in the Project Area. • Diversify Economic Base: Expand the commercial base of the community. • Encourage Stakeholder Participation: Encourage the cooperation and participation of residents, businesses, business persons, public agencies, and community organizations in the redevelopment/revitalization activities. • Upgrade Urban Design Standards: Upgrade the general aesthetics of the commercial enterprises to improve their economic viability. • Expansion of Businesses: Provide for businesses within the Project Area to possible, give preferences to business persons residing in the Project Area. the expansion, renovation, and relocation of enhance their economic viability; whenever concerns either located within or owned by • Invest in Infrastructure: Improve and/or provide electric, gas, telephone, water, and wastewater facilities to both developed and subdivided undeveloped properties. • Expand Developable Land: Recycle and/or develop underutilized parcels to accommodate higher and better economic uses and improve the City's financial viability. • Improve Traffic Circulation: Address inadequate street improvements and roads that vary in width and degree of improvement. • Correct Drainage System Deficiencies: Alleviate inadequate drainage improvements that constrain the development of various parcels in the Project Area, the cost of which cannot be borne by private enterprise acting alone. • Assemble and Consolidate Underutilized Land: Address parcels that are inadequately sized for proper usefulness and development, and are held in divided and widely scattered ownerships. • Remedy Values: Remedy depreciating property values and impaired investments. • Provide for Economic Growth: Provide opportunities and mechanisms to increase sales tax, business license tax, and other revenues. • Increase and Improve the Community's Supply of Affordable Housing. Provide for low - and moderate -income housing opportunities as is required to satisfy the needs and desires of various age and income groups of the community, maximizing the opportunity for individual choice, and meeting the requirements of State law. La Quinta Redevelopment Agency Project No. 2 May 2005 12 Third Implementation Plan BLIGHTING CONDITIONS - Project No. 2 When Project No. 2 was established the Agency identified the following blighting conditions that required redevelopment to remedy: • Unsafe/Dilapidated/Deteriorated Buildings. Buildings in which it is unsafe or unhealthy for persons to live or work and are characterized by serious Building Code violations, dilapidation and deterioration, defective design or physical construction, faulty or inadequate utilities, or other similar factors. • Physical Conditions that Limit the Economic Viability and Use of Lots/Buildings. Factors that prevent or substantially hinder the economically viable use or capacity of buildings or lots which include substandard building design, inadequate parcel size given current development standards and market conditions, and lack of parking. • Lots of Irregular Shape, Inadequate Size and Under Multiple Ownership. The existence of subdivided lots of irregular form and shape, and of inadequate size for proper usefulness and development that are owned by a variety of entities. • Inadequate Public Infrastructure/Facilities. Inadequate public improvements, parking facilities, open space, or utilities. • Depreciated/Stagnant Property Values; Impaired Investments. Depreciated or stagnant property values or impaired investments, including, but not necessarily limited to, properties that are contaminated with hazardous materials and waste. • High Business Turnovers and Vacancies/Low Lease Rates/Abandoned Buildings/Vacant Lots. Abnormally high business vacancies, abnormally low lease rates, high turnover rates, abandoned buildings, or excessive vacant lots within an area developed for urban use and served by utilities. • Lack of Commercial Facilities. A lack of necessary commercial facilities that are normally found in neighborhoods, including grocery stores, drug stores, banks, and other lending institutions. • Residential Overcrowding/Excess Bars, Liquor Stores, Adult Businesses. Residential overcrowding or an excess of bars, liquor stores, or other businesses that cater exclusively to adults that has led to problems of public safety and welfare. La Quinta Redevelopment Agency Project No. 2 May 2005 13 Third Implementation Plan 0 4 7 FINANCIAL RESOURCES - Project No. 2 The chart below presents the combined anticipated revenues and expenditures for the Project No. 2 Debt Service and Capital Projects funds during the five year term of this Implementation Plan. These revenue and expenditure estimates are based upon the data contained in the City of La Quinta's March 2005 Annual Financial Management Review (the City annually conducts a comprehensive review of all of the City and Agency funds and prepares five year revenue and expenditure forecasts from which annual budget policy and project/program determinations are formulated). The revenue projections assume that Project Area No. 2 assessed values will annually increase by the inflation adjustment allowed by Proposition 13, and from development of the remaining vacant parcels within Project Area No.2. Anticipated expenditures are based upon the polices established by the La Quinta City Council, the projects and programs identified in the March 2005 Annual Financial Management Review, and the City's Capital Improvement Program. During the next five years the Agency anticipates that the Project No. 2 expenditures will entail: • Funding fiscal mitigation payments to the various taxing agencies that levy taxes in Project Area No_ 2. These payments are based upon schedules that are contained in the taxing agency agreements with the County of Riverside, the community college district, local school districts, and other public agencies. • Funding debt service payments on the 1998 tax allocation bonds. • Continuing interest payments on outstanding City General Fund loans. • Funding Agency administration costs associated with Project No. 2 activities. • Completing capital improvement projects that were initiated during the Second Implementation Plan funding cycle. Project No. 2 also has the requirement to disburse Funding Education Revenue Augmentation Fund (ERAF) payments per the mandates from the State of California. In an effort to address the State's budget deficit, the State is requiring the Agency pay a total of $3,000,000 of tax increment revenue into a fund to reduce the State's funding commitment to local school districts. However, the Project No. 2 ERAF payments are being funded from Project No. 1; there was not sufficient revenue to fund this obligation and meet other pre-existing obligations. La Quinta Redevelopment Agency Project No. 2 May 2005 14 Third Implementation Plan O 4 g 2004-05 2005-06 2006-07 2007-08 2008-09 Revenue 16,537,044 13,788,038 14,200,947 14,626,261 15,108,453 Expenditures taxing agency payments 11,394,169 11,826,665 12,178,465 12,590,820 13,014,045 ERAF payments - - - - - bond payments 418.264 417,080 418,264 419,168 419,785 General Fond loan payments 1,053,580 1,158,938 1,274,832 1,402,315 1,542,547 contract services 339,983 93,734 97,672 101,028 104,114 Agency administration 41,443 15,000 15,000 15,000 15,000 Silvedtockresort 1,112,445 Highway'111 improvements 312,000 Simon Drive signal 45,379 Total Expenditures 14,717,263 13,511,417 13,984,233 14,528.331 15,095,491 Year End Fund Balance 1,819,781 276,621 216,714 97,930 12,962 The year end fund balance surpluses have not been scheduled for new projects or program expenditures because the Agency has elected to maintain a minimal reserve for future uncertainties. However, if revenues exceed projections, the Agency will then revise its expenditures plan accordingly during the mid-term review of this Implementation Plan. La Quinta Redevelopment Agency Project No. 2 f1 May 2005 15 Third Implementation Plan 4 A NONHOUSING PROGRAMS - No. 2 Through the Second Implementation Plan the Agency implemented a variety of economic development, infrastructure and public facility improvements in Project Area No. 2 including the following: • Miles Avenue/Washington Street Property Disposition and Development Agreement. In 2003 the Agency approved the Disposition and Development Agreement (DDA) with Centre Point, a local development company, that facilitated the sale and development of the Agency's 45.0 acre property located southeast of the intersection of Miles Avenue and Washington Street. The development program encompasses: o An approximately 134 room Homewood Suites by Hilton o Approximately 136 one and two story casitas hotel condominium units to be rented as vacation rental units o A sanctuary villas development with approximately 26 1,200 square foot villas and a spa o A 120,000 square foot medical and surgical center comprised of three 40,000 square foot buildings o Two sit-down restaurants 0 13 courtyard cluster villa homes that will be sold at market sales prices 0 54 One-story Single Family and Courtyard Homes of which 40 will be sold at prices affordable to moderate -income households with the remaining 14 sold at market sales prices o A 2.68-acre park. Centre Point is currently implementing the DDA with the first development entailing a Homewood Suites hotel, the two story casitas hotel condominium units, and the extension of Seeley Drive. • Other Infrastructure and Community Facility Proiects. During the past five year planning cycle the Agency completed the following projects: o Underground utility improvements o Highway 111 traffic signals and street lights o Phase VI-C Westward Ho. o Phase VI-D — Sagebrush, Bottlebrush, Saquaro o Streettsidewalk improvements o Point Happy/Cliffhouse sidewalk improvements Implementation Activities — 2004-05 to 2008-09 Planning Period Nonhousiing programs and projects for the coming five-year cycle are presented on the following pages. These project proposals entail continuing or completing current initiatives. The Agency will also seek new initiatives (as funding is available) that address blight, stimulate private development, enhance the economic viability of Project Area No. 2, and provide needed public infrastructure and facilities. La Quinta Redevelopment Agency Project No. 2 050 May 2005, 16 Third Implementation Plan t s� NONHOUSING PROGRAMS- Project No. 2 PROGRAM/PROJECT SilverRock Resort FIVE-YEAR PLAN ACTIVITIES This project will entail initiating site and building planning activities for a permanent clubhouse and a second golf course, constructing trail and passive recreation improvements, purchasing and improving domestic water well sites, and concluding negotiations for hotel and commercial property disposition and development. EXPENDITURES The Agency anticipates expending up to $1,112,445 in Project No. 2 non -housing tax increment revenue to facilitate development of the recreation facilities. TIMELINE These activities will be funded in Fiscal Year 2004-05. PLAN GOALS THE PROJECT WILL ADDRESS • Diversify Economic Base • Invest in Infrastructure • Improve Traffic Circulation • Provide for Economic Growth I BLIGHTING CONDITIONS THE PROJECT WILL ADDRESS I Inadequate Public Infrastructure/Facilities La Quinta Redevelopment Agency Project No. 2 n ' 1 May 2005 17 Third Implementation Plan U 51 NONHOUSING PROGRAMS- Project No. 2 PROGRAM/PROJECT Highway 111 Improvements FIVE:YEAR PLAN ACTIVITIES This project entails funding roadway, curb and gutter improvements along Highway 111 in the eastern segment of Project Area No. 2. EXPENDITURES The Agency anticipates expending up to $312,000 in Project No. 2 non -housing tax increment revenue to leverage additional public and private investment. TIMELINE These activities will be funded in Fiscal Year 2004-05. PLAN GOALS THE PROJECT WILL ADDRESS • Diversify Economic Base • Invest in Infrastructure • Expand Developable Land • Improve Traffic Circulation • Provide for Economic Growth BLIGHTING CONDITIONS THE PROJECT WILL ADDRESS • Inadequate Public Infrastructure/Facilities La Quinta Redevelopment Agency Project No. 2 May 2005 18 Third Implementation Plan 052 NONHOUSING PROGRAMS- Project No. 2 PR0GRAM/PROJECT Simon Drive Traffic Signals FIVE-YEAR PLAN ACTIVITIES This project entails funding traffic signal improvements at Simon Drive at Washington Stlreet. EXPEINDITURE� The Agency anticipated expending up to $45,379 in Project No. 2 non -housing tax increment revenue to leverage additional private investment. TIMELINE These activities will be funded in Fiscal Year 2004-05. PLAN GOALS THE PROJECT WILL ADDRESS • Diversify Economic Base • Invest in Infrastructure • Expand Developable Land • Improve Traffic Circulation • Provide for Economic Growth BLIGHTING CONDITIONS THE PROJECT WILL ADDRESS • Inadequate Public Infrastructure/Facilities La Quinta, Redevelopment Agency Project No. 2 May 2005 19 Third Implementation Pian 053 L HOUSING PROJECTS/PROGRAMS Through the Second Implementation Plan the Agency implemented the following affordable housing activities that generated 826 affordable units that feature 30, 45 or 55 year covenants. These covenants insure that the dwellings remain affordable for these time frames. B_{i ilding Horizons — 8 Dwellings. This program is sponsored by the Boys and Girls Club of Coachella Valley and utilizes La Quinta High School students to design, build and market single-family homes in the Cove. During the past five years this program has generated eight affordable units of which four were sold to low-income family households and four to moderate -income family households. The Agency recorded silent second trust deed loans against the properties in order to insure that total housing costs are affordable to the designated income categories and that the dwellings remain affordable for 30 to 45 years. These homes are located in Project Area No. 1. SiIVerHawk Apartment Homes — 75 Dwellings. The Agency provided funds to assist with infrastructure and utility system improvements to facilitate the development of 200 new apartment homes. This investment resulted in reserving 75 one and two bedroom units as housing affordable to moderate -income family households; these dwellings will remain affordable for 55 years. This development is located in Project Area No. 1. • R el A artment Rehabilitation — 14 Dwellings, The Agency provided funds to substantially re abilitate these 1970's era family apartment homes. New facades, roofs, landscaping and covered carports were installed. By providing this investment, the Agency secured 14 units that will be affordable to moderate -income family households for 30 years. These homes are located in Project Area No. 1. Mi aflores — 162 Dwellings. This development was completed and opened during the past five year planning term. Located in Project Area No. 2, this neighborhood contains 44 single-family dwellings that are affordable to moderate -income families (affordability is secured through 30 year Agency funded silent second trust deed loans), and 118 senior apartment homes; 94 of the one and two bedroom senior apartments are affordable to low- income households and 24 are affordable to moderate -income households. Aventine Family Apartments — 20 Dwellings. Located in Project Area No. 2, the Agency secured 20 affordable apartment homes in this complex, 10 affordable to low-income households and 10 to moderate -income households. These units will remain affordable for 55 years. WWotercolors Court Homes — 149 Dwellings. The Agency concluded an Affordable Housing Agreement that will facilitate the construction of 149 dwellings that will be sold, at affordable housing costs, to moderate -income households that are 55 years of age and older. The dwellings will feature Agency funded silent second trust deed mortgages that will insure that those homes will remain affordable to moderate -income households for 45 years. This development is in Project Area No. 2. La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 20 Third Implementation Plan r HOUSING PROJECTS/PROGRAMS Lonnar Court Homes — 40 Dwellings. In 2003, the Agency concluded a Disposition and Development Agreement that facilitated the sale of 45 acres of land, located southeast of the Miles Avenue and Washington Street intersection, and the development of resort, medical, restaurant, and residential uses. Included are 40 single-family homes that will be sold to moderate -income family households. These dwellings will feature Agency funded silent second trust deed loans that will insure that the dwellings remain affordable to moderate -income family households for 45 years. This development is located in Project Area No. 2. Hodley Villas Senior Apartments — 80 Dwellings. This development was funded through a combination of Agency and HUD funds to generate a senior apartment complex that is affordable to very low-income households that are 55 year of age or older. The dwellings will remain affordable to very low-income households for 55 years. This development is located in Project Area No. 2. Silent Second Trust Deed Loans - 192 Dwellings. The Agency continued to fund silent second trust deed loans to facilitate home purchases in both Project Areas. During the past five years, 178 loans were funded for Project Area No. 1 home purchases (10 very low- income, 134 low-income, and 34 moderate -income) and 14 loans were funded for Project Area No. 2 home purchases (6 low-income and 8 moderate -income). These second trust deed loans feature covenants to insure that the dwellings remain affordable for 30 to 45 years. eta Dunes Courtyard Homes — 80 Dwellings. In 2004 the Agency purchased the 1950's vintage Vista Dunes Mobile Home Park in Project Area No. 2. This Park contained 92 travel trailers, and single and double -wide mobile home units, that were in dilapidated condition. The Agency is currently relocating the residents and will then redevelop this property with 80 single and duplex dwellings that will be rented to very low-income family households. The rents will remain affordable for 55 years. During the past five year planning cycle the Agency refunded the 1995 Tax Allocation Housing Bonds to secure lower interest costs, and to generate $65,000,000 of new bond proceeds that the Agency Will invest in new affordable housing initiatives. La Quinte Redevelopment Agency La Quinta Project No. 1 and Project No. 2 O May 2005 21 Third Implementation Plan HOUSING FINANCIAL RESOURCES The chart below presents the combined (Project No. 1 and Project No. 2) revenue and expenditure projections for the five year planning period. The revenue ledger includes anticipated tax increment revenue, the proceeds from the 2004 Housing Bond (the 2004 Finance Authority Bond), income from the to Quinta Rental Housing Program, and the sale of dwellings that feature Agency silent second trust deed loans. The Rental Program income is used to maintain and to substantially rehabilitate these dwellings prior to their sale to very low-income family households. The Agency's silent second trust deed loan income represents repayment of the second trust deed loans and shared appreciation revenue when these units are sold to non -qualifying households and are removed from the Agency's affordable housing inventory. This revenue is then invested to gain replacement dwellings that will remain affordable for 45 years. Revenue 2004-05 2005-06 2006-07 2007-08 2008-09 beginning fund balance $ 9,512,242 $ 61,979,947 $ 10,513,095 $ 5,961,430 $ 1,180,078 Project No. 1 tax increment Project No. 2 tax increment 2004 Finance Authority Bond LQ rental program income 2nd trust deed home sale income Building Horizons home sale income interest income Total Revenue Expenditures 2004 Finance Authority Bond 1994 bond payments housing program administration LQ rental program 2nd trust deed loan program foreclosure acquisition Building Horizons multi -family housing rehabilitation Vista Dunes Courtyard Homes Dune Palms multi -family Watercolors court homes Lennar court homes mobile home park rehabilitation property acquisition Village mixed use housing Total Expenditures Year End Fund Balance 6,480,979 6,675,408 6,875,670 7,081,940 7,294,399 3,345,543 3,445,910 3,549,287 3,655,765 3,765,438 56,736,017 341,000 332,000 323,000 314,000 305,000 660,000 150,000 150,000 150,000 150,000 85,000 85,000 85,000 85,000 85,000 20,800 40,700 42,800 57,800 86,000 $ 77,181,581 $ 72,708,965 $ 21,538,852 $ 17,305,935 $ 12,865,915 2,990,049 5,171,981 5,923,156 5,926,806 5,919,994 483,246 480,575 479,789 479,301 478,083 1,454.589 1,289,448 1,201,477 1,235,750 1,236,869 150,000 332,000 323,000 314,000 305,000 3,618,240 500,000 250,000 250,000 650,000 150,000 150,000 150,000 150,000 250,000 250,000 250,000 250,000 250,000 276,411 5,128,134 16,871,866 50,965 20,000,000 150,000 7,000.000 2,520,000 7,000,000 4,000,000 4,000,000 3,000,000 3,000,000 2,000,000 1,000,000 1,00Q,000 150,000 1,000,000 $ 15,201,634 $ 62,195,870 $ 15,577,422 $ 16,125,857 $ 12,339,946 $ 61,979,947 $ 10,513,095 $ 5,961,430 $ 1,180,078 $ 525,969 La Quintd Redevelopment Agency La Quinta Project No.1 and Project No. 2 May 2005 22 Third Implementation Plan 056 1 HOU$ING FINANCIAL RESOURCES Units Assisted Through Housing Fund Expenditures During the past five years the Agency funded the following affordable housing projects with Housing Fund revenue. Very Low, Moderate Total !ExpendituresI Project Area No!1 iI LQ Rental Housing sales 7 1 12 Building Horizons 4 8 290,000 Rael apartment rehabilitation 14 14 350,000 Silverhawk apartment homes 75 75 3,000,000 Second trust deed loans 10 34 178 6,200,000 Subtotal: Project Area No. 1 17 128 287 $ 9,840,000 Project Area N'ol 2 Aventine apartments 10 20 300,000 Hadley Villas Senior Apartments 80 80 887,000 Watercolors court homes 149 149 1,736,138 Second trust deed loans 8 14 500,000 Lennar courtyard homes 40 40 375,000 Vista Dunes courtyard homes 80 80 7,857,500 Subtotal: Project Area No. 2 160 207 383 $ 11,655,638 Total - 1999 to 2004 177 335 670 $ 21,495,638 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 23 Third implementation Plan 057 NEW HOUSING PROJECTS/PROGRAMS The Agency will continue to pro actively implement affordable housing initiatives in order to increase and improve the community's supply of affordable housing, and to achieve its affordable housing production mandates as detailed in the Second Affordable Housing Compliance Plan which follows this section. The following pages outline the programs and projects the Agency will undertake during this five year planning cycle. La Quints Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 24 Third ImplementationIPJan 053, NEW HOUSING PROJECTS/PROGRAMS LA QUINTA RENTAL HOUSING PROGRAM I In 1995 the Agency purchased 50 units in Project Area No. 1 to secure the $1.2 million Agency investment which preserved 50 single-family units that were rented to very low- income Section 8 households. As homes became vacant or as existing tenants qualified, the Agency substantially rehabilitated the dwellings and sold them to very low-, low- or moderate -income households. To date, 12 of the 50 units have been sold, 7 to very low- income households, 4 to low-income households, and 1 to a moderate -income household. All of these dwellings feature 30 or 45 year affordability covenants. The Agency will continue to rent the remaining 38 dwellings until the existing tenants elect, and are qualified, to purchase their units, or the units are vacant and may then be sold to a very low-income household. The Agency will continue to substantially rehabilitate these dwellings prior to these sales. FIVE -'YEAR PLAN ACTIVITIES The Agency will continue to rent the units until they are sold and anticipates substantially rehabilitating and selling two units per year. EXPEINDITURES Annual management and maintenance costs are expected to average $323,000. This cost i5 funded solely from rental income. No tax increment revenues are expected to be utilized for this program. TIMELINE This is an ongoing program that will continue through the five-year cycle. GOALS THIS PROGRAM WILL ADDRESS I • Increase and Improve the Community's Supply of Affordable Housing Promote Housing I BLIGHTING CONDITIONS THIS PROGRAM WILL ADDRESS I 61 Deteriorated Residential Structures in the Cove La Quints Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 25 Third Implementation Flan Q cj NEW HOUSING PROJECTS/PROGRAMS LA QUINTA HOUSING PROGRAM The Agency will continue to fund silent second trust deed mortgage loans that facilitate home purchases for low- and moderate -income households in both Project Area No. 1 and No. 2. Principal and interest payments on these second trust deed loans are not required a8 long as the dwellings remain affordable for 45 years. Initially, this program funded numerous second trust deed mortgage loans when home prices were reasonable in both Project Areas. However, rapidly increasing home values have significantly decreased the benefits associated with this program. The Agency anticipates phasing it out by Fiscal Year 2007-08, or sooner, if it continues to loose its effectiveness. FIVE -)(EAR PLAN ACTIVITIES Staff estimates that five to ten households per year may apply for these second trust deed mortgage loans. EXPEINDITURES A total of $4,618,240 is budgeted for this program during the five year planning cycle. TIMELINE The Agency will fund this program during the first four years of this five year planning cycle. This program may be terminated sooner if there is no demand for these loans. The funds Would then be reallocated to other housing initiatives. PLANT GOALS THIS PROGRAM WILL ADDRESS I • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROGRAM WILL ADDRESS • Not Applicable La Quinto Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 26 Third Implementation Plan 060 NEW HOUSING PROJECTS/PROGRAMS BUILgING HORIZONS PROJECT The Agency and the Boys and Girls Club have partnered in t moderate -income single-family homes in Project Area No. constructed over the past eleven years. This program, which trust deed loans, will continue over the next five-year term at a single-family dwellings per year that are subsequently sold to falmily households. FIVE-YEAR PLAN ACTIVITIES le construction of low- and 1; 19 homes have been uses Agency silent second rate of developing two new low- and moderate -income This project will result in ten low -and/or moderate -income units developed from Fiscal Years 2004-05 through 2008-09. EXPENDITURES The Agency will advance $1,250,000 during the five year term; $425,000 will be repaid during the five year term from home sale proceeds and $800,000 will be converted into silent second trust deed mortgage loans. TIMELINE This project will continue over the five-year cycle. PLANT GOALS THIS PROJECT WILL ADDRESS I • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS Deteriorated Residential Structures in the Cove La Quinto Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 27 Third Implementation Plan 061 NEW HOUSING PROJECTSIPROGRAMS MULTI -FAMILY HOUSING REHABILITATION This project entails completing the property rehabilitation and new construction activities associated with a 2001 Affordable Housing Agreement involving a 26 unit apartment complex located southeast of the intersection of Eisenhower Drive and Calle Tampico in Project Area No. 1. This Agreement provides up to $350,000, which when combined with property owner funding, facilitates the substantial rehabilitation of a 26 unit apartment complex and the development of a new six unit two and three bedroom multi -family apartment complex. In return, the Agency has secured 14 units that will remain affordable to moderate -income family households for 30 years. FIVE-YEAR PLAN ACTIVITIES A majority of the property rehabilitation activities have been completed and the owner has secured the required entitlements to build the new six unit apartment complex. The 14 affordable units have been secured in the existing 26 unit apartment complex. EXPEINDITURES-] The Agency anticipates that it will invest the remaining $276,411 by the end of Fiscal Year 2004-05. TIMELINE These activities started in Fiscal Year 2001-02 and should be completed by Fiscal Year 2006-07. PLANT GOALS THIS PROJECT WILL ADDRESS • Eliminate Blight • Assemble Parcels • Promote Housing • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS ] 01 Substandard Structure Design La Quints Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 28 Third Implementation Plan 062 1_ i NEW HOUSING PROJECTS/PROGRAMS VISTA DUNES COURTYARD HOMES The Agency will complete resident relocation activities and build 80 new single-family and duplex units that will be rented to very low-income family households. FIVE-YEAR PLAN ACTIVITIES Relocation activities will be concluded by December 2005. Improvement demolition will commence in January 2006, with new home construction starting by the second quarter of 2006. Assuming a 12 month construction time period, the new dwellings should be ready for occupancy by the summer of 2007. EXPEIVDITURES� The Agency anticipates that it will invest $22,000,000 in this project during the five. year planning cycle. TIMELINE These activities started in Fiscal Year 2004-05 and should be completed by Fiscal Year 2006-07. PLANT GOALS THIS PROJECT WILL ADDRESS • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS • Unsafe/Dilapidated/Deteriorated Buildings • Inadequate Public Infrastructure/Facilities • Residential Overcrowding La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2006 29 Third Implementatiort Plan 063 NEW HOUSING PROJECTS/PROGRAMS DUNE! PALMS MULTI -FAMILY HOUSING In 2004 the Agency purchased a 27.75 acre parcel located on Dune Palms Road, south of Highway 111, in Project Area No. 2. Approximately 15 acres is slated for up to 300 apartment homes that will be rented to very low-, low- and moderate -income households. Developer proposals have been submitted and the Agency anticipates selecting a developer by the summer of 2005. Site planning and project structuring/financing negotiations will subsequently take place which should generate an affordable housing agreement by the first quarter of 2006. Assuming a 24 month period to secure building permits and construct the apartment home complex, the units should be available for occupancy in 2008. FIVE -'YEAR PLAN ACTIVITIES During the five year term of this Implementation Plan the Agency will select a developer/operator, conclude an affordable housing agreement, complete site and building planning activities, and facilitate the construction and resident occupancy of the apartment home community. EXPENDITURES The Agency anticipates that it will invest $20,050,965 in this development during the five ylear planning cycle. TIMELINE These activities started in Fiscal Year 2004-05 and should be completed by Fiscal Year 2007-08. PLAN GOALS THIS PROJECT WILL ADDRESS *I Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS I • Inadequate Public Infrastructure/Facilities •, Residential Overcrowding La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 30 Third Implementation Plan 064 NEW HOUSING PROJECTS/PROGRAMS WATERCOLORS COURT HOMES This development will generate 149 single-family court homes that will be sold to moderate income households aged 55 years and older. The dwellings will remain affordable for 45 years with the affordability component secured through silent second trust deed mortgage loans. FIVE-YEAR PLAN ACTIVITIES The remaining municipal fee costs were funded in Fiscal Year 2004-05 and the silent second trust deed loans will be funded during Fiscal Year 2005-06. EXPENDITURES AI total of $7,150,000 will be expended on project activities during this planning period, $1150,000 on municipal fee costs and $7,000,000 on silent second trust deed mortgage loans. TIMELINE The homes are under construction and prospective buyers are being qualified. The second trust deed mortgage loans should be funded during Fiscal Year 2005-06. When the loans are funded the affordability covenants will be recorded against each dwelling. PLAN GOALS THIS PROJECT WILL ADDRESS I Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS • Inadequate public infrastructure/facilities La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May2006 31 Third Implementation Plan 065 NEW HOUSING PROJECTS/PROGRAMS LENNAR COURT HOMES The Agency will fund 40 silent second trust deed mortgage loans to accommodate home purchases by moderate -income family households. This project is part of a larger development program for a 55-acre parcel located southeast of the intersection of VVashington Street and Miles Avenue. In 2003 the Agency approved the Disposition and Development Agreement with Centre Point that facilitates hospitality, medical office, residential and park uses on this property. FIVE-YEAR PLAN ACTIVITIES The Agency will fund silent second trust deed mortgage loans to facilitate home purchases at affordable costs by moderate -income family households. EXPEi,NDITURES A total of $2,520,000 will be expended on silent second trust deed mortgage loans. TIMELINE The Agency anticipates funding the silent second trust deed mortgage loans in Fiscal Year 2007-08. PLANT GOALS THIS PROJECT WILL ADDRESS • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS • Inadequate public infrastructure/facilities La Quintp Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 32 Third Implementation Plan 066 NEW HOUSING PROJECTS/PROGRAMS MOBILE HOME PARK REHABILITATION This project would entail either working with the existing owner or purchasing the Dune Palms Mobile Home Park, located in Project Area No. 2, to rehabilitate the infrastructure, replace the existing dilapidated mobile home coaches with new mobile or modular home units, and secure up to 100 affordable housing covenants that would remain affordable to very low- and low-income families for 55 years. FIVE-YEAR PLAN ACTIVITIES Discussions with the Park owner will continue during Fiscal Year 2005-06. Acquisition activities (if required) may also start during Fiscal Year 2005-06, with park and home rehabilitation activities commencing in Fiscal Year 2006-07 and continuing through the five year planning period. EXPEINDITURES The estimated five-year expenditures for this project are $18,000,000. TIMELINE Implementation will occur from Fiscal Years 2005-06 through 2008-09. PLAN GOALS THIS PROJECT WILL ADDRESS • Eliminate Blight • Upgrade Urban Design Standards Invest in Infrastructure • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS I Unsafe/Dilapidated/Deteriorated Buildings • Physical Conditions that Limit the Economic Viability and Use of Lots/Buildings • Residential Overcrowding La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 33 Third Implementation Plan 067 NEW HOUSING PROJECTS/PROGRAMS PROPERTY ACQUISITION The Agency has sold, or is in the process of selling all of the vacant property it acquired since 1995 to accommodate affordable housing development. In order to meet its housing mandates, it will continue to identify and purchase new properties that may accommodate affordable housing. Since a majority of land within both Project Areas is either developed or committed for development, it will also evaluate purchasing property outside of the Project Areas, but within the City limits, in order to facilitate affordable housing development on a two to one basis. FIVE-�1(EAR PLAN ACTIVITIES Staff is identifying sites as part of the City's annexation efforts. Property acquisition expenditures would commence in Fiscal Year 2005-05 and continue through Fiscal Year 2008-09. EXPEINDITURES Land acquisition costs are estimated to total $7,000,000 during the five year planning period. TIMELINE Property identification and acquisition activities would occur in Fiscal Years 2005-06 through 2008-09. PLANT GOALS THE PROJECT WILL ADDRESS • Ensure Quality Design and Development • Assemble Parcels • Correct Underutilized lots • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS • Improve Facilities/Infrastructure La Quintp Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 34 Third Implementation Plan 063 t. NEW HOUSING PROJECTS/PROGRAMS VILLAGE LIVEIWORK HOUSING This program will involve the construction of a mixed -use development of commercial, office and affordable residential units in the Village, located in Project Area No. 1. The housing units would be affordable to very low-, low- and moderate -income households. FIVE -'YEAR PLAN ACTIVITIES The program is currently in the planning stages. Staff is identifying potential sites and the costs associated with purchasing these sites and facilitating mixed use development proposals. Preliminary project structuring work would occur during Fiscal Year 2005-06, With site acquisition occurring in 2006-07. EXPEINDITURES Project costs are estimated at $1,150,000; $150,000 for planning activities and $1,000,000 for property acquisition costs. TIMELINE Planning activities will continue through Fiscal Year 2005-06 with property acquisition in Fiscal Year 2006-07. PLAN GOALS THE PROJECT WILL ADDRESS I • Expand Commercial Base • Ensure Quality Design and Development • Address Irregular Lots • Assemble Parcels • Correct Underutilized lots • Increase and Improve the Community's Supply of Affordable Housing BLIGHTING CONDITIONS THIS PROJECT WILL ADDRESS • Mixed and Incompatible Uses • Stagnant Commercial Activity La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 35 Third Implementation Plan 069 SECOND HOUSING COMPLIANCE PLAN This document is the Second Affordable Housing Compliance Plan ("Second Compliance Plan") for La Quinta Redevelopment Project No. 1 ("Project No. 1") and Redevelopment Project No. 2 ("Project No. 2") of the La Quinta Redevelopment Agency ("Agency"). This Second Compliance Plan replaces the Agency's First Affordable Housing Compliance Plan (adopted on December 1994 and subsequently amended in Marcy 1998 and July 1999) to update Agency's affordable housing activities since 1994. In 1994, the Agency initiated a ten-year affordable housing effort to produce 1,672 inclu$ionary housing units estimated to be needed by 2004 to meet its housing mandate. Since then, the Agency has produced 1,031 affordable housing units. Legal Requirements The California Community Redevelopment Law, Health and Safety Code Section 33000, et. s ("Law"), sets forth the requirement to prepare a plan that outlines how the Agency will achieve its affordable housing production objectives for a ten year period. This Second Compliance Plan sets forth the Agency's program for ensuring that the appropriate number of very low-, low-, and moderate -income housing units will be produced in La Quinta Redevelopment Project Area No. 1 ("Project Area No. 1") and La Quinta Redevelopment Project Area No. 2 ("Project Area No. 2") or ("Project Areas") for a teri-year period (Fiscal Years 2004-05 through 2013-14), and how the Agency will erase the deficit in affordable unit production that it did not achieve during the previous ten year planning period. Contents This (Second Compliance Plan has been developed to: • Account for the number of affordable dwelling units, either constructed or substantially rehabilitated, in both Project Areas since their respective adoptions • Assess existing needs for the production of affordable housing as a result of the construction or substantial rehabilitation of dwelling units since the Project Areas were adopted • Present the estimated number of dwelling units to be privately developed or substantially rehabilitated between 2004-05 and 2013-14 and over the duration of the respective Redevelopment Plans for the Project Areas • Forecast the number of dwelling units to be developed or substantially rehabilitated by the Agency between 2004-05 and 2013-14 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 070 May',2005 36 Second Affordable Housing Compliance Plan SECOND HOUSING COMPLIANCE PLAN a Identify City/Agency and other revenue sources for funding affordable housing production a Identify implementation policies/programs and potential sites for affordable housing development a Establish a schedule of actions for implementing this Second Compliance Plan so as to ensure that the Agency's affordable housing mandate is being achieved M Review the affordable housing goals, objectives, and programs contained in the November 2004 City of La Quinta Housing Element Update ("Housing Element") to confirm this Second Compliance Plan is consistent with the Housing Element. Background On November 29, 1983 the Agency adopted the Redevelopment Plan for the Project Area No. 1, establishing the Agency's first redevelopment project area which encompasses 17.5 square miles. Project Area No. 1 is located in the southern portion of the City and includes land designated for commercial, office, residential, retail, institutional, recreational, and public uses. Project Area No. 1 is generally bounded by Avenue 50 to the north, Jefferson Street and Madison Streets to the east, Avenue 60 to the south, and the City limit boundary on the west. At the time of its adoption, Project Area No. 1 included 2,240 dwelling units according to its Report to Council. The Agency established its second redevelopment project on May 16, 1989 with the adoption of the Redevelopment Plan for Project Area No. 2. Essentially, Project Area No. 2 encompasses a major portion of the City north of Avenue 50. Covering an area of 3,11$ acres, Project Area No. 2 includes residential, commercial and institutional uses. Project Area No. 2 is bounded by Avenue 50 to the south, Fred Waring Drive to the north, Washington Street to the west, and Jefferson Street to the east. Also included within Project Area No. 2 are properties located west of Washington Street, north of the prolongation of the future alignment of Avenue 48; properties surrounding Point Happy north of Highway 111 and west of Washington Street; and property east of Jefferson Street and north of Highway 111. According to its Report to Council, Project Area No. 2 contained 608 dwelling units at the time of its adoption. Purpose Since 1976, redevelopment agencies have been required to assure that at least 15% of all new or rehabilitated units developed within a redevelopment project area by entities other than a redevelopment agency are available at affordable costs to households of very low-, low-, or moderate -income. Of this 15%, not less than 40% of the affordable units must be affordable to very low-income households (50% or below of area median income). Further, at least 30% of all new or rehabilitated dwelling units developed within a project area by a redevelopment agency are made available at affordable costs to low - or moderate -income households. Of this 30%, not less than 50% of the dwelling units must be available at affordable costs to very low-income households. These La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 U 1 May',2005 37 Second Affordable Housing Compliance Plan SECOND HORSING COMPLIANCE PLAN requirements are applicable to housing units as aggregated and not on a case -by -case basis to each dwelling unit created or rehabilitated unless so required by a redevelopment agency. The Law requires agencies to adopt an affordable housing compliance plan that identifies how the redevelopment agency will achieve the aforementioned affordable housing production requirements for each project area. The compliance plan must be consistent with the jurisdiction's housing element and must also be reviewed and, if necessary, amended at least every five years in conjunction with the cyclical preparation of the housing element or the agency's five-year implementation plan. If, at the end of each ten year planning period, the affordable housing production goals are not realized, the Law requires that a redevelopment agency meet the production goals on an annual basis until the requirements for the previous ten year period are met. Should an agency exceed the production requirements within the ten year period, the Law allows an agency to count the units that exceed the requirements to meet housing production requirements during the next ten year period. Agency Housing Funds The (Agency is required to allocate 20% of the tax increment revenue it receives from both Project Areas to increase and improve housing affordable to very low-, low-, and moderate -income households. A separate Housing Fund has been established for this revenue. .The Agency may invest this revenue in new construction and rehabilitation activities in both Project Areas. To date, the Agency has expended this revenue on new construction, rehabilitation, and rental housing assistance. Definitions and Data Compilation This Second Compliance Plan takes into account all residential construction or substantial rehabilitation that has occurred within the Project Areas since their adoption in order to determine affordable housing production needs; it includes figures for existing residential construction and substantial rehabilitation, and projections for the number of additional dwelling units to be constructed or substantially rehabilitated during the ten-year planning period. The following narratives define "new construction" and "substantially rehabilitated" as used in this Second Compliance Plan. New Construction. Construction statistics were provided by the City of La Quinta's planning staff. Because the Law does not provide a clear definition for new construction, Agency staff, consultant, and legal counsel have agreed upon a "definition" for new construction. For the purposes of this Second Compliance Plan, building permits issued for the construction of new dwelling units since the respective adoption dates of the Project Areas are considered to be new construction dwelling units; therefore, these units generate the Agency's affordable housing production requirements. Future dwelling unit construction projections were determined by identifying the build out capacity of all vacant and underdeveloped parcels within both Project Areas, based upon existing land uses and recent historical trends of building permits issued for residential units. The City Community Development Department staff La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 072 May 2005 38 Second Affordable Housing Compliance Plan SECOND HOUSING COMPLIANCE PLAN does not anticipate the Project Areas will experience build out within the ten year time frame covered by this Second Compliance Plan. 10 Substantial Rehabilitation. The Law defines "substantial rehabilitation" as: "....rehabilitation, the value of which constitutes 25 percent of the after rehabilitation value of the dwelling, inclusive of the land value. " "Substantially rehabilitated dwelling units" means: "....all units substantially rehabilitated with agency assistance." Research indicates that the only units that have undergone substantial rehabilitation are those that have been part of the Agency's affordable housing activities. These units have been included in the overall housing production requirements. La Quinta Redevelopment Agency La Quinta Project No. t and Project No. 2 Q 3 May 2005 39 Second Affordable Housing Compliance Plan AFFORDABLE HOUSING ACTIVITIES This section reviews the number of dwelling units which have been destroyed/removed by thle Agency to date, the number of privately developed or substantially rehabilitated units for both Project Areas, and the Agency's affordable housing production efforts to date. Dwellings Destroyed or Removed Directly or Indirectly by Agency to Date As of May 2005, the Agency has demolished 78 dilapidated mobile home units that housed very low-, low- or moderate -income persons or families at the Vista Dunes Mobile Home Park in Project Area No. 2. The Agency will be replacing these units, on a one for one basis, in the Vista Dunes Courtyard Homes development and the Dune Palms Multi -Family Housing development, both of which are further described later in this Second Compliance Plan. Dwellings Constructed/Substantially Rehabilitated within the Project Areas Based upon data provided by the City's Community Development Department, the total number of new housing units constructed and/or substantially rehabilitated in Project Area, No. 1 ("PA 1") and Project Area No. 2 ("PA 2") from adoption to Fiscal Year 2003- 04 is presented below: 198311989 to 1994 3,824 904 4,728 1994 to 2004 2,568 3,852 6,420 Total: 1983-1989 to 2004 6,392 4,756 11,148 This new housing construction or substantial rehabilitation activity generated the following affordable housing production requirements for the Agency: (Very Low I Low/Moderate Total 1983/1989to 1994 284 425 709 1994 to 2004 385 578 963 Subtotal: 1983/1989 to 2004 669 1,003 1,672 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 0 rj May 2005 40 Second Affordable Housing G Compliance Plan r ' AFFORDABLE HOUSING ACTIVITIES Affordable Housing Developed or Substantially Rehabilitated Since 1994 the Agency has facilitated the production or substantial rehabilitation of 1,0311 affordable dwellings that feature 30, 45 or 55 year covenants that insure the dwellings will remain affordable for that time period. The Law initially required 30 year covenants but was amended in 2002 to increase this period to 45 years for owner occupied dwellings and 55 years for rental dwellings. The chart that follows identifies the Project Area, project/program and the income level of the affordable dwellings produced as of May 2005. Stockman LQ Rental Housing sales LQ Rental Housing rental units Coachella Valley Housing Coalition Sweat Equity Building Horizons Seasons Seniors Williams Development single family Rae] apartment rehabilitation SilverHawk apartments Second trust deed loans Subtotal: Project Area No. 1 Mira Flores senior apartments Mira Flores single family Aventine apartments Hadley Villas senior apartments Watercolors court homes Second trust deed loans Lennar court homes Vista Dunes Courtyard Homes Subtotal: Project Area No. 2 Total Produced/Approved - 1994 to 2004 Very Low I Low I I Moderate Total 1 1 Project Area No. 1 I 9 6 15 7 4 1 12 38 38 5 5 10 1 14 8 23 45 46 91 6 14 20 14 14 75 75 10 134 44 188 121 218 147 486 I Project Area No. 2 1!, 94 24 118 44 44 10 10 20 80 80 149 149 6 8 14 40 40 80 80 160 110 275 545 281 328 422 1,031 While the Agency has made significant progress towards producing affordable units, it still has a production deficit. Private development and substantial rehabilitation activities in both Project Areas created an affordable housing production requirement of 1,672 units (as of Fiscal Year 2004-05); 669 units must be affordable to very low- income households. The Agency has secured 1,031 affordable units to date (641 units short of the required number) of which 281 are affordable to very low-income households (388 units short of the required number). The Agency will correct this deficit during the ten year planning period of this Second Compliance Plan. La Quinta Redevelopment Agency La Quints Project No. 1 and Project No. 2 May 12005 41 Second Affordable Housing ' 075 Compliance Plan AFFORDABLE HOUSING ACTIVITIES The Chart below presents the affordable housing production needs from the respective adoption of Project No. 1 and Project No. 2 to Fiscal Year 2003-04, from Fiscal Year 2004405 through 2013-14, and for the remaining life of the Project No. 1 and Project No. 2 Redevelopment Plans. During the ten year planning period of this Second Compliance Plan, the Agency is projected to need 230 affordable units of which 92 must be affordable to very low- income households. This is in addition to the 641 unit deficit that remains from the previous ten year planning period (1994-2004). During this Second Compliance Plan, the Agency must produce a projected 871 affordable dwellings of which 483 must be affordable to very low-income households. The Agency is projected to need a total of 1,994 affordable dwellings, of which 798 must be affordable to very low-income households, by the end of the effectiveness periods of the Project No. 1 and Project No. 2 Redevelopment Plans. EM..• 1983/1989to 1994 284 425 709 1994to 2004 385 578 963 Total: 1983/1989 to 2004 669 1,003 1,672 Second Housing Compliance Plan 2004-05 to 2013-14 92 138 230 2013r14 to 2023/2029 (Redevelopment Plan Effectiveness) 37 55 92 Total Projected Incluslonary Housing Need 798 1,196 1,994 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 076 May 2005 42 Second Affordable Housing Compliance Plan FINANCIAL RESOURCES The Agency deposits 20% of tax increment revenue allocated to the Agency into separate housing funds for each Project Area. For purposes of this Second Compliance Plan, the revenue and expenditures for both Project No. 1 and Project No. 2 are combined into one revenue and expenditure schedule. The Agency implements its housing program as one comprehensive program. Projections of Housing Fund revenues for both Project Areas are presented on the following pages. Expenditures include debt service payments for the Agency's Series 1994 tax allocation bonds and for the ILa Quinta Financing Authority's 2004 Housing Bonds, housing program administration costs, and housing program expenditures. 2004-05 2005-06 2006.07 2007-08 2008-09 Revenue beginning fund balance $ 9,512,242 $ 61,979,947 $ 10,513,095 $ 6,139,592 $ 907.479 Project No. 1 tax increment 6,480,979 6,675,408 6,925,102 7,380,485 8,127,261 Project No. 2 tax increment 3,345,543 3,445,910 3,678,017 3,906,459 4,107,203 2004 Finance Authority Bond 56,736,017 LQ rental program income 341,000 332,000 323,000 314,000 305,000 2nd trust deed home sale income 660,000 150,000 150.000 150,000 150,000 Building Horizons home sale income 85,000 85,000 85,000 85,000 85,000 interest income 20,800 40,700 42,800 57,800 50,000 Total Revenue $ 77,181,581 $ 72,708,965 $ 21,717,014 $ 18,033,336 $ 13,731,944 Expenditures 2004 Finance Authority Bond 2,990,049 5,171,981 5,923,156 5,926,806 5,919,994 1994 bond payments 483,246 480,575 479,789 479,301 478,083 housing program administration 1,454,589 1,289,448 1.201,477 1,235.750 1,236,869 LQ rental program 150,000 332,000 323,000 314,000 305,000 2nd trust deed loan program 3,618,240 500,000 260,000 250,000 foreclosure acquisition 650,000 150,000 150,000 150,000 150,000 Buitding Horizons 250,000 250,000 250.000 250,000 250,000 multi -family housing rehabilitation 276,411 Vista Dunes Courtyard Homes 5,128,134 16,871,866 Dune Palms multi -family 50,965 20,000,000 Watercolors court homes 150,000 7,000,000 Lennar court homes 2,520,000 mobile home park rehabilitation 7,000,000 4,000,000 4,000,000 3,000,000 property acquisition 3,000,000 2,000,000 1,000,000 1,000,000 Village mixed use housing 150,000 1,000,000 1,000,000 500,000 new housing production Total Expenditures $ 15,201,634 $ 62,195,870 $ 15,577,422 $ 17,125,857 $ 12,839,946 Year End Fund Balance $ 61,979,947 $ 10,513,095 $ 6,139.592 $ 907,479 $ 891,998 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 43 Second Affordable Housing Compliance Plan 077 z- FINANCIAL RESOURCES Revenue beginning fund balance $ Project No. 1 tax increment Project No. 2 tax increment 2004 Finance Authority Bond LQ rental program income 2nd trust deed home sale income Building Horizons home sale income interest income Total Revenue Expenditures 2004 Finance Authority Bond 1994 bond payments (housing program administration LQ rental program 2nd trust deed loan program foreclosure acquisition Building Horizons multi -family housing rehabilitation Vista Dunes Courtyard Homes Dune Palms multi -family Watercolors court homes Lennar court homes mobile home park rehabilitation property acquisition Viflage mixed use housing new housing production Total Expenditures Year End Fund Balance 2009-10 2010-11 2011-12 2012-13 2013-14 891,998 $ 2,223,576 $ 3,027,798 $ 2,419,647 $ 2,818,045 8,827,443 9,192,264 9,564,381 9,847,755 10,106,192 4,311,962 4,520,817 4,733.848 4,968,023 5,189,999 200,000 150,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 85,000 85,000 85,000 85,000 85,000 50,000 50,000 50,000 50,000 50,000 $ 14,466,404 $ 16,321,657 $ 17,661,027 $ 17,670,425 $ 18,449,236 5,702,548 5,702,947 5,701,072 5,702,380 5,702,192 490,280 490,911 490,307 1,300,000 1,400,000 1,400,000 1,450,000 1,500,000 250,000 200,000 150,000 100,000 50,000 200,000 200,000 200,000 200,000 200,000 300,000 300,000 300,000 300,000 300,000 2,000,000 2,000,000 5.000,000 7,000,000 7,000,000 7,000,000 $ 12,242,828 $ 13,293,858 $ 15,241,379 $ 14,752,380 $ 14,752,192 $ 2,223,576 $ 3,027,798 $ 2.419,647 $ 2,818,045 $ 3,697,044 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 -f May 2005 44 Second Affordable Housing 079 Compliance Plan FINANCIAL RESOURCES Per the Law, the Agency's housing fund expenditures must be in proportion to the community's total population of very low to moderate -income households, as well as the proportion of the population both over and under 65. The chart that follows presents the minimum thresholds for housing fund expenditures during the ten year term of this Second Compliance Plan. Basically, during the ten year planning period of this Second Compliance Plan the Agency's total housing fund expenditures must be aligned with the percentages outlined below. Minimum Percentage Household Type of Housing Fund Ex enditures Vefry Low -Income Households - Based on community's need for housing for households 28% earning less than 50% of county median income. Low -Income Households Based on community's need for housing for households 22% earning less than 80% of county median income. Moderate -Income Households - Based on communitts need for housing for households 11 % earning less than 120% of county median income. Households Under Age 65 87% Households Over Age 65 13% This data was derived from the 2000 U.S. Census and the Housing Element. La Qpinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 45 Second Affordable Housing 079 Compliance Plan 4 , . NEW HOUSING PROJECTS/PROGRAMS This (section presents the strategies the Agency will pursue to meet the production requirements for the ten year planning period of the Second Compliance Plan. During the ton year planning period of this Second Compliance Plan, the Agency is projected to need 230 affordable units of which 92 must be affordable to very low-income households. This is in addition to the 641 unit deficit that remains from the previous ten year planning period (1994-2004). During this Second Compliance Plan, the Agency must produce a projected 871 affordable dwellings of which 483 must be affordable to very I'pw-income households. The Agency will pursue the following programs to produce needed affordable housing for the remainder of the ten year cycle. • Building Horizons. The Agency will continue to fund this program that is sponsored by the Boys and Girls Club of Coachella Valley. During the ten-year period, the Agency anticipates that this program will generate 20 affordable dwellings, of which 10 will be affordable to moderate -income households and 10 affordable to low-income households. All of these dwellings will be affordable to households under the age of 65. - Estimated Units to be Produced: 20 at 2 units per year. Dune Palms Multi -Family. The Agency owns an approximately 15 acre parcel that is located west of Dune Palms Road, north of Avenue 48. During Fiscal Year 2004-05 that the Agency has solicited developer proposals and will select a development team to design, finance, construct and manage these apartment homes in 2005. Construction should commence in 2006 with occupancy by 2008. The Agency anticipates obtaining 250 apartment homes on this property, of which at least 122 units will be affordable to very low- income households. The remaining units will be affordable to low- and moderate -income households. If additional very low-income units can be obtained, the Agency will seek to do so. All of these units will be affordable to households under the age of 65. - Estimated Units to be Produced: 300 with anticipated opening by 2008. Mobile Home Park Rehabilitation. The Dune Palms Mobile Home Park, located in Project Area No. 2, is in a dilapidated condition. The Agency is initiating discussions with the current owner to either work with the owner to rehabilitate the park and install new mobile or modular home units, or purchase the park and rehabilitate this housing stock and secure dwellings that would remain affordable to very low-income family households for 55 years. All of these units would be affordable to households under the age of 65. - Estimated Units to be Produced: 100 with anticipated opening by 2008. • La Quinta Housing Program. The Agency will continue to implement the La Quinta Housing Program to facilitate the production of affordable housing units throughout the Project Areas. While this program effectiveness has diminished over the past two years, the Agency anticipated that it will fund 20 La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 46 Second Affordable Housing Compliance Plan 0°0 NEW HOUSING PROJECTS/PROGRAMS to 40 silent second trust deed mortgage loans during the first four years of the ten-year planning cycle. These loans facilitate home purchase opportunities for low- and moderate -income family households. All of these units would be affordable to households under the age of 65. - Estimated Units to be Produced: 32 with 8 per year during the next 4 years. Village Live/Work Housing. This program entails facilitating the construction of mixed -use developments in the Village area consisting of commercial uses and housing. The housing units could potentially be lofts above first floor businesses, and may be affordable to low- and very low-income households. This program is still in the planning stages, and potential sites, specifics regarding the development and the affordability mix, have not been determined as of the date of the Second Compliance Plan. However, based upon preliminary planning activities, the Agency may secure up to 50 affordable units through this effort. All of these units would be affordable to households under the age of 65. -.Estimated Units to be Produced: 50 with 10 per year starting in Fiscal Year 2007-08. Property Acquisition. The remaining land inventory the Agency assembled during the past ten years has been sold or otherwise committed for development. With the adoption of this Second Compliance Plan, the Agency will be initiating an acquisition effort to secure sites for new affordable housing development both within the Project Areas, and where feasible, out of the Project Areas, but within the community. This effort will be necessary to generate the remaining 420 affordable units that the Agency must achieve during the 10 year planning term of this Second Implementation Plan. The Law does allow the Agency to meet affordable housing requirements by providing affordable housing units outside of the Project Areas on a two -for - one basis. The Agency has adopted Resolutions for both Project Areas to allow the use of housing funds outside of Project Area boundaries. These units will be affordable to households under the age of 65. Estimated Units to be Produced: 420 with 55 per year starting in Fiscal Year 2006-07. La Quinta Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 2005 47 Second Affordable Housing Q 1 Compliance Plan HORSING ELEMENT COMPLIANCE Because this Second Compliance Plan focuses on providing housing for very low- and low-income households who are generally the most difficult segment of the community to provide housing for, it is consistent with the Housing Element's goal to provide housing for all economic groups within the City. Both this Second Compliance Plan and the Housing Element state there is a definite need to assure an adequate supply of housing for the lower income segments of the City. It should be noted, however, that the Regional Housing Needs Assessment (RHNA) prepared by SCAG for the City of 4a Quinta shows that the greatest housing concentration need through 2005 will be generated and above moderate -income households. The future need determined by SCAG shows 21% of the need for moderate -income households and 48% of the households need as above moderate. A major focal point of the goals policies and objectives of the Housing Element is to provide housing for all economic segments of the City, especially very low- and low-income families. Because the major goal of this Second Compliance Plan is also to provide housing for these households, and the proposed plans and programs for improving the supply of affordable housing in the City presented in this Second Compliance Plan are similar to plans and policies of the Housing Element, there is clearly a high degree of consistency between the Second Compliance Plan and the Housing Element. La Quints Redevelopment Agency La Quinta Project No. 1 and Project No. 2 May 200$ 48 Third Implementation Plan n U 2