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2009 11 03 RDAea# 4 adja 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 3, 2009 3:30 P.M. Closed Session / 4:00 P.M. Open Session Beginning Resolution No. RA 2009-009 CALL TO ORDER Roll Call: Agency Board Members: Adolph, Evans, Henderson, Sniff, Chairperson Franklin 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. CLOSED 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. 1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED SOUTHEAST OF THE MILES AVENUE AND WASHINGTON STREET INTERSECTION AND NORTH OF THE WHITEWATER STORM CHANNEL. PROPERTY OWNER/ NEGOTIATOR: CP DEVELOPMENT LA QUINTA, LLC., RICHARD OLIPHANT. OUi Redevelopment Agency Agenda 1 November 3, 2009 2. CONFERENCE WITH AGENCY'S LEGAL COUNSEL PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a) REGARDING PENDING LITIGATION, LA QUINTA REDEVELOPMENT AGENCY V. VERIZON CALIFORNIA, INC., RIVERSIDE SUPERIOR COURT CASE NO. INCO55168. 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 1. APPROVAL OF MINUTES OF OCTOBER 20, 2009. 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 3, 2009. 2. APPROVAL OF FINANCIAL AND COMPLIANCE REPORTS FOR WASHINGTON STREET APARTMENTS FOR THE YEAR ENDED JUNE 30, 2009. 3. APPROVAL OF AN AGREEMENT WITH DOLPHIN LA QUINTA, LLC PERMITTING THE TEMPORARY LEASING OF CASITAS UNITS AT CENTRE POINTE. 002 Redevelopment Agency Agenda 2 November 3, 2009 4. APPROVAL OF THE TRANSFER OF TEN PARCELS OF LAND FROM THE LA QUINTA REDEVELOPMENT AGENCY TO THE CITY OF LA QUINTA AND AUTHORIZE THE EXECUTIVE DIRECTOR TO EXECUTE THE REQUIRED DOCUMENTS (APNs: 604-040-057, 604-470-001, 770-184-001, 773-101- 001, AND -002, 769-083-007, -008, AND -009, AND LOTS E, F, G, H, AND I OF PARCEL MAP 31116, AND LOT D OF PARCEL MAP 33588. BUSINESS SESSION - NONE STUDY SESSION — NONE CHAIR AND BOARD MEMBERS' ITEMS — NONE PUBLIC HEARINGS — NONE ADJOURNMENT The next regular meeting of the Redevelopment Agency will be held on November 17, 2009, 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 3, 2009, 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 October 30, 2009. DATED:/October 30, 2009 ERONICA J ONTECINO, City Clerk City of La Quinta, California Public Notice Any writings or documents provided to a majority of the Redevelopment Agency regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. Redevelopment Agency Agenda 3 November 3, 2W.9 003 T-ity 4 4 QaA AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: November 3, 2009 BUSINESS SESSION ITEM TITLE: Demand Register Dated CONSENT CALENDAR / November 3, 2009 STUDY SESSION PUBLIC HEARING RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and File the Demand Register Dated November 3, 2009 of which $274,815.96 represents Redevelopment Agency Expenditures PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA • 004 Tdy� 4 4 a" COUNCIL/RDA MEETING DATE: November 3, 2009 ITEM TITLE: Approval of Financial and Compliance Reports for Washington Street Apartments for the Year Ended June 30, 2009 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve and file the Financial and Compliance Reports for Washington Street Apartments for the year ended June 30, 2009. FISCAL IMPLICATIONS: Page 24 of the Audit contains a summary of Audit Results. No significant items were noted (Attachment 1). BACKGROUND AND OVERVIEW: In October 2008, the La Quinta Redevelopment Agency acquired a 73 unit low- income apartment complex, Washington Street Apartments. The apartment complex is managed by Hyder & Company and the audit was performed by Joyce Rethmeier, CPA. The audit was required since the United States Department of Agriculture (USDA) Rural Development provides Federal funding. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve and file the Financial and Compliance Reports for the Washington Street Apartments for the year ending June 30, 2009; or 2. Do not approve and file Financial and Compliance Reports for the Washington Street Apartments for the year ending June 30, 2009; or 3. Provide staff with alternative direction. Respectfully submitted, John M. Falconer, Finance Director Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Washington Street Apartments Financial and Compliance Reports Dated June 30, 2009 006 ATTACHMENT 1 WASHINGTON STREET APARTMENTS FINANCIAL AND COMPLIANCE REPORTS JUNE 30, 2009 007 CONTENTS Independent Auditors' Report Financial Statements Statement of Financial Position Statement of Activities Statement of Cash Flows Notes to the Financial Statements Supplemental Information 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 Audit Findings on Compliance Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 Schedule of Findings and Questioned Costs Schedules of Expenditures of Federal Awards Accompanying Multiple Family Housing Borrower Balance Sheet — Form RD 3560-10 Accompanying Multiple Family Housing Project Budget — Form RD 3560-7 PAGE 3-4 5-6 7 8-9 10-13 15-18 19-20 21 22-23 24 25 26-27 28-32 008 f JOYCE E. RETHMEIER - _ CERTIFIED PUBLIC ACCOUNTANT x Independent Auditors' Report To La Quinta Redevelopment Agency USDA Rural Development Washington Street Apartments Moreno Valley Office (An elderly housing development owned by Moreno Valley, CA La Quinta Redevelopment Agency) La Quinta, CA I have audited the accompanying statements of financial position of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), Case No. 04-033-953740431, as of June 30, 2009, and the related statements of activities and cash flows for the period from inception (October 31, 2008) to June 30, 2009. These financial statements are the responsibility of the Project's management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, the evidence supporting the amounts and disclosures in the 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. I believe that my audits provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Washington Street Apartments, as of June 30, 2009, and the results of its operations and its cash flows for the initial period then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, I have also issued a report dated September 30, 2009, on our consideration of Washington Street Apartments's internal control over financial reporting and my 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 my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an 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 read in conjunction with this report in considering the results of my audits. 2235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants O O n California Society of Certified Public Accountants .,�� J My audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplementary information shown on page 15-18 and 26-32 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Project. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in my opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. oyce E. Rethmeier Certified Public Accountant September 30, 2009 010 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO. 04-033-953740431 STATEMENT OF FINANCIAL POSITION JUNE 30, 2009 ASSETS Current Assets Cash $ 69,319 Rental assistance receivable 40,406 Tenant receivable 2,201 Prepaid expenses 17,598 Receivable - other 96 Total Current Assets 129,620 Restricted Deposits and Funded Reserves Cash restricted for tenant security deposits 26,234 Real estate tax and insurance reserve 24,478 Replacement reserve 272,369 323,081 Rental Property Land 3,447,094 Buildings & Improvements 2,736,127 6,183,221 Less: Accumulated Depreciation (60,803) 6,122,418 Other Assets Permanent loan fees, net of accumulated amortization of $926 in 2009 17,008 Deposits 4,540 21,548 Total Assets $ 6,596,667 The accompanying notes are an integral part of these financial statements. O 1 q -5- 1 t i I WASHINGTON STREET APARTMENTS (An elderly housing development owned by ii La Quinta Redevelopment Agency ) CASE NO.04-033-953740431 STATEMENT OF FINANCIAL POSITION (continued) JUNE 30, 2009 LIABILITIES AND NET ASSETS Current Liabilities (i Current portion of mortgage note payable $ 36,085 Accounts payable 4,046 Accrued expenses 2,328 Total Current Liabilities 42,459 Deposits and Prepaid Liabilities Tenants' security deposits 26,268 Tenants' prepaid rents 1,731 27,999 Long -Term Liabilities i ! Mortgage note payable, net of current portion 2,269,921 Total Liabilities 2,340,379 Commitments Net Assets 4,256,288 Total Liabilities and Net Assets $ 6,596,667 The accompanying notes are an integral part of these financial statements. �. 6- 012 ( t ii WASHINGTON STREET APARTMENTS ( An elderly housing development owned by (j La Quinta Redevelopment Agency) CASE NO.04-033-953740431 STATEMENT OF ACTIVITIES i FOR THE PERIOD FROM INCEPTION (OCTOBER 31, 2008) TO JUNE 30, 2009 Rental Income Apartments 122,361 Less: Overage - ` 'f Tenant Utility Allowance - Tenant Assistance Payments 296,643 Potential Rental Income 419,004 Less: Vacancies (3,546) Total Rental Income 415,458 Other Income • . Laundry& Vending 2,307 Interest Income 777 I Tenant Charges 1,846 Other Income - Total Other Income 4,930 Total Income 420,388 Expenses Operating & Maintenance Expenses 129,835 Utilities Expenses 37,238 Taxes & Insurance 25,493 Bad Debts - Interest on Mortgage Payable 85,833 Total Expenses 278,399 i ? Income/(Loss) from Operations 141,989 Non -Operating (Income) & Expense Interest Subsidy Income 27,365 . Interest Subsidy Expense (27,365) Depreciation & Amortization 61,729 Total Non -Operating Income & Expense (61,729) i Change in Net Assets 80,260 Net Assets - Beginning of Year - # * Owner Contributions 4,176,028 Net Assets - End of Year S 4,256,288 The accompanying notes are an integral part of these financial statements. -7- e 013 'f WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) RD CASE NO. 04-033-953740431 STATEMENT OF CASH FLOWS 's FOR THE PERIOD FROM INCEPTION (OCTOBER 31, 2008) TO JUNE 30, 2009 Operating Activities Rental receipts $ 118,249 Rental subsidy 256,237 Interest receipts 777 Other receipts 4,153 Net tenant security deposits (paid) received 34 Net deposits received (4,540) Payroll (33,052) Administrative (44,491) Management fee Utilities (34,409) Maintenance (38,919) Insurance and taxes (52,919) Interest on mortgage note payable (85,833) Net Cash From Operating Activities r 85,287 E Investing Activities Reserve for Taxes & Insurance (24,478) Reserve for Replacement (272,369) Payment of Loan Fees (17,934) Purchase/Disposal of Rental Property (6,183,221) Net Cash From Investing Activities (6,498,002) Financing Activities • . Mortgage Principal Payments - (26,746) Mortgage Proceeds 2,332,752 Owner Contributions 4,176,028 Net Cash From Financing Activities 6,482,034 Net Increase/(Decrease) in Cash 69,319 Cash at Beginning of Period _ Cash at End of Period 3. $ 69,319 '.i ` - The accompanying notes are an integral part of these financial statements. -8 IpN! 011 4 WASHINGTON STREET APARTMENTS (An elderly housing development owned by i La Quinta Redevelopment Agency) CASE NO. 04-033-953740431 i STATEMENT OF CASH FLOWS (cont'd) FOR THE PERIOD FROM INCEPTION (OCT. 31, 2008) TO JUNE 30, 2009 .I Operating Activities Increase in net assets $ 80,260 Adjustments to Reconcile Net Income/(Loss) to Net Cash From Operating Activities Depreciation & Amortization 61,729 Decrease (Increase) in Assets: - Rental Assistance Receivable (40,406) Tenant Receivables (2,201) Receivable- Other (96) " Prepaid Expenses (17,598) Cash restricted for tenant security deposits (26,234) i� Deposits (4,540) r - Increase (Decrease) in Liabilities: Accounts Payable 4,046 Accrued Expenses 2,328 Security Deposits - Liability 26,268 Prepaid Rents 1,731 Net Cash From Operating Activities $ 85,287 -' Supplemental Disclosures Interest Subsidy $ 27,365 ' t The accompanying notes are an integral part of these financial statements. 9 015 I I; A. Organization WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 Washington Street Apartments ("the Project") is an elderly housing development owned by La Quinta Redevelopment Agency herein referred to as the Project). The Pro Project operates a 73 unit elder) housing P g Y(J P Y g development for low-income seniors, as defined in Section 521 of the Housing Act of 1949. The Project commenced rental operations in November 2008. Legal title to the Project is held by La Quinta Redevelopment Agency, a government agency. The accompanying financial statements are those of the Project and do not represent the financial statements of La Quinta Redevelopment Agency. The Project operates as an enterprise fund and, as such, follows governmental accounting standards and uses the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded in the accounting period in which they are earned and become measurable. Expenses are recorded in the period incurred, if measurable. B. Significant Accounting Policies A summary of the Project's significant accounting policies consistently applied in the preparation of the accompanying financial statements are as follows: Basis of Accounting The Project utilized the accrual basis of accounting, whereby income is recognized as earned and expenses are recognized as obligations are incurred. Cash and Cash Equivalents Cash and cash equivalents consist of short-term investments with an original maturity of three months or less, cash on deposit, money market funds and certificates of deposit. Tenant Receivable and Bad Debt Policy ( Tenant rent charges for the current month are due on the first of the month. Tenants who are evicted or move - out are charged with damages or cleaning fees, if applicable. Tenant receivable consists of amounts due for rental income, security deposit or the charges for damages and cleaning fees. The Project does not accrue interest on the tenant receivable balances. The Project has not established an allowance for doubtful accounts and does not use the reserve method for j recognizing bad debts. Bad debts are treated as direct write-offs in the period management determines that collection is not probable. There are no bad debts for the period from inception (October 31, 2008) to June 30, 's 2009. 1 o ' 016 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 B. _ Significant Accounting Policies — (Continued) Rental Property Rental property is recorded at cost. Improvements are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the statements of operations. The rental property is depreciated over estimated service lives as follows: Buildings & Improvements 30 years straight-line Land Improvements 15 years accelerated Furnishings & Equipment 5-7 years accelerated The Project reviews its investment in real estate for impairment whenever events or changes in circumstances indicate that the carrying value of such property may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the real estate to the future net undiscounted cash flow expected to be generated by the rental property including the low income housing tax credits and any estimated proceeds from the eventual disposition of the real estate. If the real estate is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the real estate exceeds the fair value of such property. There were no impairment losses recognized in 2009. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Advertising Advertising costs are expensed when incurred. During 2009, there was no advertising expense. 017 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 C. Mortgage Payable Rural Development The mortgage note was assumed by Project and is payable to Rural Development in monthly installments of $7,107, at an interest rate of 10% and a term of 30 years, maturing in the year 2036. As part of the Loan Agreement, the Partnership entered into an Interest Credit and Rental Assistance Agreement that reduces the monthly mortgage payment to $3,198, which effectively lowers the interest rate to approximately 1% over the term of the loan. The mortgage liability of the Partnership is limited to the underlying value of the real estate collateral pledged. Under the loan agreement, the Project is required to make monthly escrow deposits for real estate, taxes and insurance premiums, and is subject to operating and return to owner restrictions. The Project's real and personal property are pledged as collateral for the trust deed note. Maturities of the mortgage notes in each of the next five years are approximated as follows: 2010 $ 10,583 2011 11,691 2012 12,916 2013 14,267 2014 15,760 Thereafter 686,537 $ 751,754 There has been no significant change in interest rates available to the Project. Therefore, the fair value of the mortgage notes approximate the book value. Provident Savings Bank, FSB The Project is financed under a deed of trust with Provident Savings Bank, FSB, dated October 31, 2008 in the original amount of $1,572,031. Monthly installments are $12,873 through October, 2038. The interest rate on the note is 8.36%. Maturities of the Permanent Loan in each of the next five years are approximated as follows: 12- 0 018 i ,I WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 C. Mortgage Payable (continued) Year ending December 31, 2010 $ 25,502 2011 27,717 2012 30,125 2013 32,742 2014 35,587 Thereafter 1,402,579 $ 1,554,252 D. Commitments and Contingencies Rental Assistance Agreement The Project has entered into a Rental Assistance Agreement with Rural Development commencing November 2008, providing rental assistance for 72 units. The agreement provides for a maximum rental assistance commitment of $389,664. The agreement expires September 22, 2009, but is then renewable under contract with Rural Development pending congressional approval of budget authority. E. Current VulnerabilitV Due to Certain Concentrations The Project's sole asset is Washington Street Apartments Apartments. The Project's operations are concentrated in the affordable housing real estate market. In addition, the Project operates in a heavily regulated environment. The operations of the Project are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies, including, but not limited to, Rural Development and the State Housing Agency. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by Rural Development or the State Housing Agency. Such changes may occur with little notice or inadequate funding to pay for the related cost, including the additional administrative burden, to comply with a change. F. Concentration of Credit Risk The Project maintains its cash in financial institutions insured by Federal Deposit Insurance Corporation (FDIC). Deposit accounts, at times, may exceed federally insured limits. As of June 30, 2009, the cash balance exceeded those limits by $152,429. The Project has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. ri 13" „:' 019 SUPPLEMENTAL INFORMATION 020 ti WASHINGTON STREET APARTMENTS ( An elderly housing development owned by La Quinta Redevelopment Agency) CASE NO.04-033-953740431 RETURN ON INVESTMENT SURPLUS CASH FOR THE PERIOD FROM INCEPTION (OCT. 31, 2008) TO JUNE 30, 2009 Return on Investment: Net Cash (Deficit) (from Part I, line 30) $ 85,344 Any Return to Owner, paid this year for prior year(s) (at Part I, Line 23) + - Any RD authorized use of unrestricted cash + - Any RD authorized release of 2% initial operating capital + - Any special reserve deposit (over that required in the regular loan agreement) made to reduce excess cash + - Any special reserve "redeposit" that was required by RD as a result of the "adjustment to the reserve" calculation in the previous years audit's reserve account reconciliation + - If the project had an RD approved negative budget, add back any actual Net Deficit up to the amount of the approved negative budget + - Net Cash/Deficit, earned from current yeai s operation = $ 85,344 Surpius Cash: Ending Cash Balance (Part I, Line 33 of RD 3560-7) 20% of total O & M proposed in the year being reviewed Surplus Cash $ 93,797 37,862 55,935 See independent auditor's report on additional information. 021 �""w •r -15- WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Qunita Redevelopment Agency) CASE NO. 04-033-953740431 REPLACEMENT RESERVE RECONCILIATION FOR THE PERIOD FROM INCEPTION (OCT. 31, 2008) TO JUNE 30, 2009 Reserve requirement 10/31/08 (Per Rural Development area office) (1) 242,474 Required annual reserve deposit (From loan agreement and any subsequent amendments) (64,000/12x8) (2) 42,667 Actual reserve account deposit 33,151 Total all authorized reeular reserve withdrawals * (3) 3,256 Total all unauthorized reserve withdrawals Required reserve balance 06/30/09 (5) 281,885 (1)+(2)-(3)=(5) Verified Balance 06/30/09 272,369 - Amount account over (+) under (-) fimded (9,516) ** * Detail of all reserve withdrawals during the fiscal year: Regular Puroose Date Amount Authorized Copier 6/30/2009 3,256 yes Subtotal 3,256 ** Funded in full on September 29, 2009. F , ( See independent auditor's report on additional information. 1 16 4�» r 022 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 1. Management Fee Calculation The management fee is based on a fee per unit occupied by tenants during the month. Total Qualified Units (73 * 8 months) 584 Less: Rent Free Unit (6) Vacancies (1) Total Occupied Units 577 Fee Per Unit (Effective November 1, 2008) $52 Management Fee Expense $30,004 2. Insurance Disclosure The Project maintains Insurance coverage as follows: Deductible Coverage Building Insurance $2,500 $6,972,790 Comprehensive Business Liability No Deductible $2,000,000 Fidelity / Employee Dishonesty $5,000 $500,000 3. Return to Owner In accordance with the Loan Agreement, the annual return to owner is as follows: Maximum Return to Owner $ Budgeted Return to Owner ($7,500 X 8/12) $ 5,000 Return to Owner Paid: Asset Management Fee $ 0 See Independent Auditors' Report. _17_ 023 I} l WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 4. Project Accounts Account Type Account Title Account Financial Interest Balance ' Number Institution Rate Checking Operating Account 2120367221 California Bank & Trust 69,169 Checking Tax & Insurance 2120367491 California Bank & Trust 24,478 . Checking Security Deposit 2120276859 California Bank & Trust 0.50% 26,234 Checking Replacement Reserve 2120277909 California Bank & Trust 1.40% 272,369 S. Changes to Owner Entity There have been no changes to the owner entity. rz Ei i See Independent Auditors' Report. ,I 18- ..... 024 '.l i JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT j Independent Auditors' 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 To La Quinta Redevelopment Agency USDA Rural Development Washington Street Apartments Moreno Valley Office (An elderly housing development owned by Moreno Valley, CA La Quinta Redevelopment Agency) La Quinta, CA We have audited the financial statements of Washington Street Apartments as of and for the period from inception (October 31, 2008) to June 30, 2009, and have issued my report thereon dated September 30, 2009. 1 conducted my audits 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 my audits, I considered Washington Street Apartments's internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control over financial reporting. Accordingly, 1 do not express an opinion on the effectiveness of the Project's internal control over financial reporting. 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 project'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 project's financial statements that is more than inconsequential will not be prevented or detected by the project's internal control. 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 project's internal control. My consideration of 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 internal control that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I consider to be material weaknesses, as defined above. Q 025 '.l Compliance and Other Matters ,i 'I As part of obtaining reasonable assurance about whether Washington Street Apartments's financial statements are ({ free of material misstatement, I 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 statements amounts. However, providing an opinion on compliance with those provisions was not an objective of my audits, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported herein under Government Auditing Standards. This report is intended soley for the information and use of the La Quinta Redevelopment Agency, management, others witin the organization and the U.S. Department of Agriculture Rural Development and is not intended to be and should not be used by anyone other than these specified parties. Joyce E. Rethmeier Certified Public Accountant September 30, 2009 .; «.. 026 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2009 Reportable Conditions of Non Compliance There were no issues of non compliance. �n,. 1 021 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To La Quinta Redevelopment Agency Washington Street Apartments Compliance I have audited the compliance of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), RD Case No. 04-033-953740431, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to its major federal program for the period from inception (October 31, 2008) to June 30, 2009. Washington Street Apartments's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to its major federal program is the responsibility of Washington Street Apartments's management. My responsibility is to express an opinion on Washington Street Apartments's compliance based on. my audits. I conducted my audits of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non - Profit Organizations. Those standards and OMB Circular A-133 require that I plan and perform the audits to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Washington Street Apartments's compliance with those requirements and performing such other procedures as I considered necessary in the circumstances. I believe that my audits provide a reasonable basis for my opinion. My audits do not provide a legal determination on the Washington Street Apartments's compliance with those requirements. In my opinion, Washington Street Apartments complied, in all material respects, with the requirements referred to above that are applicable to its major federal program for the period from inception (October 31, 2008) to June 30, 2009. Internal Control Over Compliance The management of Washington Street Apartments is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing my audits, I considered Washington Street Apartments's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine my auditing procedures for the purpose of expressing my opinion on compliance and to test and report on internal control over compliance, but not for the purpose of expressing an opinion on the effectiveness of Washington Street Apartments's internal control over compliance. �• 028 f l l j A control deficiency in a project's internal control over compliance 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 noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the project's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the project's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the project's internal control. My consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weakness. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended soley for the information and use of the La Quinta Redevelopment Agency, management, others witin the organization and the U.S. Department of Agriculture Rural Development and is not intended to be and should not be used by anyone other than these specified parties. September 30, 2009 ». 029 ii WASHINGTON STREET APARTMENTS j. (An elderly housing development owned by La Quinta Redevelopment Agency) Case No. 04-033-953740431 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE PERIOD FROM INCEPTION (OCT. 31, 2008 TO JUNE 30, 2009 SUMMARY OF AUDIT RESULTS 1. The auditor's report expresses an unqualified opinion on the financial statements of Washington Street Apartments. si 2. No material weaknesses were identified during the audit of the financial statements 3. No instances of noncompliance material to the financial statement of Washington Street Apartments were disclosed during the audit. 4. No material weaknesses were identified during the audit of the major federal award programs. 5. The auditor's report on compliance for the major federal award programs for Washington Street Apartments expresses an unqualified opinion. 6. There were no audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-133. 7. The programs tested as major programs included: CFDA # ` Farmers Home Administration pursuant to Section 521 of the Housing Act of 1949, Sec. 515 Rural Rental Housing Loans 10.415 Rental Assistance 10.427 8. The threshold for distinguishing Types A and B programs was $300,000. 9. Washington Street Apartments qualifies as a low -risk auditee. FINDINGS None See independent auditor's report on additional information. _24- �... 030 ,l I� WASHINGTON STREET APARTMENTS (An elderly housing development owned by { ? La Quinta Redevelopment Agency) Case No.04-033-953740431 (! SCHEDULE OF EXPENDITURES AND FEDERAL AWARDS FOR THE PERIOD FROM INCEPTION (OCT. 31, 2008) TO JUNE 30, 2009 Federal Grantor/Pass-through Federal CFDA Expenditures Grantor/Program Title Number 2009 U.S. Department of Agriculture, Rural Development Farmers Home Administration pursuant to Section 521 of the Housing Act of 1949, Sec. 515 Rural Rental Housing Loans 10.415 $751,754 Rental Assistance 10.427 296,642 Total $1,048,396 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS NOTE A -BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), RD CaseNo. 04-033-953740431, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States,Local Governments, and Non -Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. See independent auditor's report on additional information. :.i -25- 031 s �i i Form RD 3560-10 (02-05) r� MULTI -FAMILY HOUSING BORROWER BALANCE SHEET PART I - BALANCE SHEET )JECT NAME IBORROWER NAME 1BORROWER LA QUINTA REDEVELOPMENT AGENCY BEGINNING DATES> 11 -01 - ASSETS ENDING DATE> F (6 -30 - C CURRENT ASSETS 1. GENERAL OPERATING ACCOUNT ..... 2. R.E. TAX & INSURANCE ACCOUNT .... 3. RESERVE ACCOUNT ......................... 4. SECURITY DEPOSIT ACCOUNT ........ 5. OTHER CASH (identify) Petty Cash....... 6. OTHER Marketable investment securities 7. TOTAL ACCOUNTS RECEIVABLE (Alta, ACCTS RCVBLE 0-30 DAYS $ ACCTS RCVBLE 30-60 DAYS $ ACCTS RCVBLE 60-90 DAYS $ ACCTS RCVBLE OVER 90 DAYS $ 8. LESS: ALLOWANCE FOR DOUBTFUL F 9. INVENTORIES (supplies) .................... 10. PREPAYMENTS ............................... 11. 12. TOTAL CURRENT ASSETS (Add 11 FORM APPROVED OMB NO. 0575-0189 ................. ..................... _........... .... ................. .................. ....................... �h list) ............ _42,703 69,169 24,478 272,369 26,234 150 42,703 t3 U CCOUTNS._.. .................... .................... 7m 11)............. ) ( ) 17,598 452,701 0 FIXED ASSETS 13. LAND ........................... ....... _.............................. 14. BUILDINGS.......................................................... 15. LESS: ACCUMULATED DEPRECIATION ................... 16. FURNITURE & EQUIPMENT .................................... 17. LESS: ACCUMULATED DEPRECIATION ................... 18. DEFERRED FINANCING COSTS 19. TOTAL FIXED ASSETS (Add 13 thru 18).................. OTHER ASSETS 20. DEPOSITS 4,540 21. TOTAL ASSETS (Add 12, 19, and 20)..................... I 6,596,667 0 LIABILITIES AND OWNERS EQUITY CURRENT LIABILITIES 22. TOTAL ACCOUNTS PAYABLE (Attach list) .................. ACCTS PAYABLE 0-30 DAYS $ 4,046 ACCTS PAYABLE 30-60 DAYS $ ACCTS PAYABLE 60-90 DAYS $ ACCTS PAYABLE OVER 90 DAYS $ 23. NOTES PAYABLE (Attach list)ACCRUED EXPENSES.... 24. SECURITY DEPOSITS ............................................ 25. TOTAL CURRENT LIABILITIES (Add 22 thm 24) ..... According to the Paperwork HedUCtron Act or 1995, an agency may not conduct or sponsor, and a person is not required o respond o a co ion o information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 05750189. The time required to complete this information collection is estimated to average 2 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. See independent auditor's report on additional information. = 26 - ..rj 032 LONG TERM LIABILITIES 26. NOTES PAYABLE RURAL DEVELOPMENT 27. OTHER (Identity) Tenants'prepaidrents 28. TOTAL LONG-TERM LIABILITIES (Add 26 and 27). 29. TOTAL LIABILITIES (Add 25 and 28) .................. 2,340,379 0 30. OWNER'S EQUITY (Net Worth) (21 minus 29) ............. 4,256,288 0 31. TOTAL LIABILITIES AND OWNER'S EQUITY 6,596,667 0 (Add 29 and 30) Section 1001 of Title 18, United States Code provides: "Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined under this title or imprisoned not more than five years, or both. I HAVE READ THE ABOVE WARNING STATEMENT AND I HEREBY CERTIFY THE FOREGOING INFORMATION IS COMPLETE AND ACCURATE TO THE BEST OF MY KNOWLEDGE. (Date) (Signature of Borrower or Borrower's Representative) (Title) PART II -THIRD PARTY VERIFICATION OF REVIEW I/We have reviewed the borrower's records. The accompanying balance sheet, and statement of actual budget and income on Form RD 3560-7, is a fair presentation of the borrower's records. I/We certify that no identity of interest exists between me/us and any individual or organization doing business with the project or borrower. (Date) (Signature) (Name and Title) (Address) El In lieu of the above verification and signature, a review completed, dated and signed by a person or firm qualified by license or certification is attached. See independent auditor's report on additional information. �.., 033 -21- ,r Form RD 3560-7 I... c caws. v mmCCT FORM APPROVED OMB NO. 0575-0189 PROJECT NAME WASHINGTON STREET APARTMENTS BORROWER NAME LA QUINTA REDEVELOPMENT AGENCY BORROWER ID AND PROJECT NO. 04-033-953740431 Repotting Period Budget Typc Project Rental Type Project Type Borrower Type Plan Code D� aaaal E]Inniol E:]Famlb (Full Profit [:11adoidual Borower Account, E]Qiamuty ❑%Regular Repo. ]Elderh ILiuiled Profit E] (Assn. ofFumers Monthly ElRen Change 11Congmgam [D )Non -Profit ❑Limaed Primus 0g. of Farm Method E]SMR ❑Grouphome Daffier 1wra ers Other Servicing Mixed E]LH IGeneml Panne, ❑Cnh J]Acruod 1Innligible I BEGINNING DATES ENDING DATES OPERATIONAL CASH SOURCES I. Rental Income............................................................ 2. RHS Rental Assistance Received ....................................... ' 1 3. Occupancy Surcharges Received ........... .......................... 1 4. Laundry and Vending ................................................ ....-....... i5. Interest Income............................................................ 6. Tenant Charges_.......................................................... 7. Other -Project Sources......................................................... 8. Less Uossou and Conringeary Allowance) ...._................. le 9. Less (Agen yApprovedlncerave Allowance) .............. ....... ' 10, SUR-TOTAL/(Irhra 7)-(8&9)1....................................... NON -OPERATIONAL CASH SOURCES • IL Cash - Non Project............................................................ 12. Authorized Loan (Non-RHS)....................................... 13. Transfer From Reserve......................................................... 14. SUB -TOTAL (II rhm 13) ...................................................... 15, TOTAL CASH SOURCES (10-14)....................................... OPERATIONAL CASH USES 16. Total O&M Expenses (From Pan 11)....................................... 17. RHS Debt Payment ................ ....._...... ......................... e1 18, REIS Payment (Overage) ............................. ............... ' 19. RHS Payment (Lore Fee) ................. .................................... 20. RHS Payment (Occripuny Sumhnrge) ....................................... 21. Tenant Utility Payments......................................................... j22. Transfer to Reserve............................................................ i23. Rehm to Owner............................................................ 24. SUB-TOTAL(/6 thra 13)...................................................... I NON -OPERATIONAL CASH USES 25, Authorized Debt Payment (Non -MS) ....................................... t 26. Annual Capital Budget (From Pan 111, Lines 4-6)• .... ......... ........ 27. Miscellaneous............................................................ 28. SUB -TOTAL (25 rhrn 27)...................................................... +; 29. TOTAL CASH USES(2J-28)....................................... 30_ NET CASH (DEFICIT) (15-19)....................................... PLOW SIAIEMENI CURRENT ACTUAL PROPOSED COMMENTS BUDGET BUDGET or(YTD) (11101/08) 1 (11101/08) 418,176 118,813 g p 6-r` t i € 296,642 Yt2m"'• s ^'' x.. i aSus'>,,5w3$s,. 2,450 2,307 2,590 777 221 1,845 k5t p i` 6 416, 119 420,394 456,134 1 423,640 234,600 189,310 25440 22A69 ,.. :?^z.: "NON v`. r� ;I.LK ti fit 43,200 33,151 9,476 312,716 244,930 102983 90,110 l-; 40,O7S 3 216 142998 1 93,366 455,714 338,296 420 85,344 j CASH BALANCE 31. Beginning Cash Balance ................................................... ' 32. Accrual to Cash Adjustment .................................... 33. Ending Cash Balance(30,31-31J....................................... . I P M eporting hureen/or rhu mllenian o/inJorma imamd r g J haum per sparse induct-rlg the hue! r rm e^' % - x. eea, one 1 ainrmnmgorredraneeeed and. - gnemnerr rkmlrice 4endcom02.14 ynlher a. pet o, o 7 / on.ud00c .1 burden so US oJAgnouLure. Cleoram'e O�cer. SI01 uggeeraabberedudng thisurnarsro USan IaA,rhleduA-n.0 )bo}.IJW fndepeneena Avz e.SW. Worhinglon.00 25 702. R£TUIW arroacU ."Preir-DONOT r<Is/arm ro fhu aaLrna. h-orwararorhe fmnl USUA sae Doty 1'ou are nor reyuiree ro resjrorl ro rhix conenion or mfar unless it Oiep(ayea nrly w(iO UMU conlralnumoer. UTA I9,994 65,182 .era' �:� 56,729 ",f`•"af ..."'y�yt•'N('. 2Q4I3 93,797 See independent auditors repo" on additional information. -28- 034 Is l i j PART 11- i{I L Maintenance and Repairs Payroll ...........___ ..... ......... 2. Maintenance and Repairs Supply ..................__.........- 3. Maintenance and Repair Contract ... _. _. _..................... 4. Painting and Decorating __.. _. _.__...._.......... 5- Snow Removal ._..._........ ___.. _................. & Elevator Maintenance/Contract ........... ...__....... I_ - 7. Grounds .... ..... ................ .....__............ ..._..... 8. Services ........................ _........... ...._.......__.. 9. Annual Capital Budget (From Part V - Operating) 10. Other Operating Expenses .................... _. _... _. 11. SUB -TOTAL MAINT. & OPERATING (I thru 10) .............. 12. Electricity ......_.._......___...___ ............._... ..... I. V 13. Water ..__ ..............._._........__...._._._.. _. 14. Sewer ... ................... ........... 15. Fuel (OiICoal/Gas) ..__....____....._.._._.. 16. Garbage & Trash Removal ... _-__._..._..-_......... i 17. Other Utilities ....._........_.... _........._..._._......._..... 18. SUB -TOTAL UTILITIES (11 thru 17) ........................... 19. Site Management Payroll ....... 20. Management Fee ........._.._.........._ ............... _............ 21. Project Auditing Expense ........ _. 22. Project Bookkeeping/Accounting ._.................. ....... 23. Legal Expenses _.__........._..... _......._._.......___..... 24. Advertising ... ............_. ...... .... ._._........... _.__.. 25. Telephone& Answering Service .. _........................_.. 26. Office Supplies _..... ...__._........... _. _....._.............. 27. Office Furniture & Equipment ...... _.... _.................. 28, Training Expense ..._..._ ............._..._...._...._...._........ 29. Health Ins. & Other Emp. Benefits ........_ _...... _............ 30. Payroll Taxes ...... _............. _... 31. Workman's Compensation ......... _. _.__..___...... 32. Other Administrative Expenses .................. _............ 33. SUB -TOTAL ADMINISTRATIVE(19 thru32) .............. 34. Real Estate Taxes .......__ ............. ._._...._...... ...._........ 35. Special Assessments ....._........._.._.......... 36. Other Taxes, Licenses & Permits ... ........... ..._........ _. 37. Property & Liability Insurance ...... _................ _...... 38. Fidelity Coverage Insurance ......... 39. Otherinsurance..._.................... 1.11__. 40. SUB -TOTAL TAXES & INSURANCE (34 thru 39) .............. CURRENT BUDGET PROPOSED I COMMENTS RI if or(YTD) 16,080 18,596 9,040 6,452 26,833 8,299 5,583 1,525 21,330 15,363 3,478 11,710 3,081 1,868 943 95,922 54,259 5,833 5,603 12,250 12,162 11,081 12,568 1,533 1,373 4,917 5,532 350 35,964 37,238 18,540 16,784 30,056 30,004 4,717 1,217 3,167 142 1,623 1,875 1,517 6,133 667 910 5,837 5,569 2,994 3,960 4,078 3,732 3,425 2,136 76,763 72,320 5,423 4,262 400 7,637 6,282 658 11,833 14,949 25,951 25,493 41. TOTAL O&M EXPENSES (11+18+33+40) ............... 1 234,600 189,310 1 'i z See independent auditors report on additional information. -29- , r_ -'' 035 RESERVE ACCOUNT: I. Beginning Balance ........................... 2. Transfer to Reserve .............. ............ Transfer from Reserve: _.. ..... _.__ 3- Operating Deficit ._... _. _.... _......._. 4. Building Repair & Improvements ..-... _-._- 5. Equipment Repair & Replacements ............. 6. Other Non -Operating Expenses ............. T TOTAL(3 thru 6) .... .._...... ...._....... 8. ENDING BALANCE 1(1.2)-71 GENERAL OPERATING ACCOUNT:* Beginning Balance ......... _....... ..... _. _....._........ Ending Balance ....... _......_.... _... _. _-._._.. REAL EST TAX & INSUR ESCROW ACCOUNT:* Beginning Balance ...___._..__......__.. _........ _.. Ending Balance ............................................ CURRENT PROPOSED I COMMENTS 242,474 33,151 3,256 3,256 272,369 39,523 69,319 25,659 24,478 TENANT SECURITY DEPOSIT ACCOUNT:* Beginning Balance ......... 27391 Ending Balance ...... _._-. _..... _...._-_.. 26,234 " ('Cumplere only when Form RD 1930-b' is nor required) PART IN - RENT SCHEDULE 1 I, Check if attached PART V - ADDITIONAL INFORMATION l TO BE COMPLETED BY BORROWER: I. Past Due Rents ._-__._.... _................._........ 2. Debts Not Current ..-._........ _.......... _.. _............ r I 3. Delinquent Real Estate Taxes .......... I 4. Delinquent Personal Property Taxes ........_... 5. Number of Applicants on Waiting List ...-..-._... 6. Number of Applicants Needing RA .. _. _..... Check if Borrower comments attached l ,�1 e CERTIFIED CORRECT(Borrower or Auth Representative): i� Agency APPROVAL (Rural Development Approval Of ictol): TO BE COMPLETED BY RURAL DEVELOPMENT 7. Project Payment Status 8. Reserve Account Required Balance ...................... _ Amount Ahead ............ 9. Occupancy Concerns? FYes - Attached Narrative JNo VI - SIGNATURES, DATES AND COMMENTS Check if Rural Development comments attached See independent auditor's report on additional information. -30- DATE: DATE: 036 PART IV — RENT SCHEDULE AND UTILITY ALLOWANCE UNIT DESCRIPTION RENTAL RATES POTENTIAL INCOME FROM EACH RATE BR SIZE UNIT TYPE. NUMBER BASIC NOTE RATE HUD BASIC NOTERATE HUD UTILITY ALLOWANCE 1 BIT M 72 S 726 $ 961 S - S 627,264 i 743,904 i - S 72 1BR Z 1 s - s - $ - $ - E - S - s s - S - $ - S - 3 - $ - s S - $ - S - E - $ - S - $ E - S - 3 - 4 - S -$ - S E $ - $ E - S -is -$ CURRENT RENT TOTALS $ 627,264 $ 743,904 $ BASIC NUDE HUD n.... / / N. h.... UNIT DESCRIPTION RENTAL RATES POTENTIAL INCOME FROM EACH BR SIZE UNIT TYPE- NUMBER BASIC NOTE RATE HUDKBASICNOTE RATE HUD S - S - s - s S - $ - SS -$S -$ - i - SS - $ - S - S - $ $ - s - $ - S - E$ - 3 - $ - $ - S S - S -$ - S CURRENT RENT TOTALS $ - $ - S BASIC NUIE HUD C. PROPOSED UTILITY ALLOWANCE - EDeafive DIM, rw v nnn eP err nwenrPs BR SIZE UNITTYPE NUMBER ELECTRIC GAS WATER SEWER TRASH OTHER TOTAL i BR M 72 56 16 72 1 BR Z 1 :G :i e 't :i See independent auditor's report on additional information. 037 .31 _ o+• e 1 ;r i is i I i1 Appliances: Range j Refrigerator Range Hood Washers & Dryers Carpet & Vinyl: 1 Br. 2 Br. 3 Br. 4 Br. 5 Br. Common Area Cabinets: Kitchens Bathroom Doors: Exterior Interior Window Coverings: Detail: Blinds Heating & Air Conditioning: Furnace HVAC Plumbing: Water Heater Bath Sinks Kitchen Sinks Faucets Toilets ! Major Electrical: Detail: Flood Lights Structures: Windows Screens Walls Roofing Siding Exterior Painting Paving Asphalt Concrete Seal & Stripe Landscape & Grounds: Landscaping Lawn Equipment Fencing Recreating Area -Playground/Shade Signs Accessibility Features: Detail: Automation Equipment: Site Management Common Area -Counter Tops Other: List: List: List: List List: List: Actual Actual Number Actual From Ooeralinq Of Units I Total 3,256 13,256 TOTAL CAPITAL EXPENSES: 1 3,256 1 3,081 1 16,337 See independent auditor's report on additional information. -32- ... 038 WASHINGTON STREET APARTMENTS Report to Management Year Ended Junc 30, 2009 Table of Contents Statement on Auditing Standards No. 112 Communications Letter Statement on Auditing Standards No. 114 Communication Letter Journal Entry Report Management Representation Letter Page ...' 039 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT September 30, 2009 Hyder Property Management Professionals 1649 Capalina Road, Suite 500 San Marcos, CA 92069 Mr. Thomas P. Genovese Executive Director La Quinta Redevelopment Agency P. O. Box 1504 La Quinta, CA 92253 In planning and performing my audit of the financial statements of Washington Street Apartments as of and for the initial period ended June 30, 2009, in accordance with auditing standards generally accepted in the United States of America, I considered internal control over financial reporting (internal control) as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control. Accordingly, I do not express an opinion on the effectiveness of the Project's internal control. 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 and detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the project'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 project's financial statements that is more than inconsequential will not be prevented or detected by the project's internal control. 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 project's internal control. My consideration of 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 internal control that might be significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I considered to be material weaknesses, as defined above. However, we identified the following areas in which internal controls can be strengthened. 235 W. Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants 040 Funding of Replacement Reserves The regulatory agreement of the Rural Development Mortgage requires annual deposits of $64,000 to the replacement reserve. The project was acquired October 31, 2008 and was required to make seven monthly mortgage payments between October 31, 2008 and June 30, 2009. Only six monthly deposits were made to the replacement reserve through June 30, 2009. It is the policy of the Management Company that one twelfth of the replacement reserve deposit will be paid monthly. Management should ensure that full replacement reserve deposit is made prior to the end of the annual period of the loan. Management response: The Loan Resolution Reserve Account requirement is annual. Management will ensure that the full annual deposit of $64, 000 is made prior to October 31, 2009. Adjusting Journal Entries During the course of our field work we noted that entries were not made capitalize the assets, liabilities and net assets as they relate to the acquisition of the Project. Depreciation of buildings and amortization of loan fees were not recorded by the Project. These entries were provided to us by La Quinta Redevelopment Agency employees and we made the necessary adjustments to the financial statements. Management should ensure that they record acquisition costs and the related depreciation and amortization when taking on a new Project. Management response: Past practice has been to record additions and deletions to fixed assets in August of each year in preparation of the City's annual audit. Staff did receive a request for an earlier than normal journal entry to record the Washington Street fixed assets which was prepared. In addition, staff agrees with the auditor's subsequent recommendation to change the value of the fixed assets to capitalize certain issuance costs. In the future, staff will change its policy from annually recording fixed assets to recording fixed assets quarterly beginning with the three month period ending September 30, 2009. This communication is intended solely for the use of the management company and the owner and should not be used by anyone other than these specified parties. Sincerely, VU�[Y�� &.ye. Rethmeier Certified Public Accountant 041 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT September 30, 2009 Hyder Property Management Professionals 1649 Capalina Road, Suite 500 San Marcos, CA 92069 Mr. Thomas P. Genovese Executive Director La Quinta Redevelopment Agency P. O. Box 1504 La Quinta, CA 92253 1 have audited the financial statements of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency) for the initial period ended June 30, 2009 and have issued my report thereon dated September 30, 2009. Professional standards require that we provide you with the following information related to my audit. My Responsibility under auditing standards generally accepted in the United States of America As stated in my engagement letter dated April 17, 2009, my responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. My audit of the financial statements does not relieve you of your responsibilities. Planned Scope and Timing of the Audit I performed the audit according to the planned scope and timing previously communicated to you in the engagement letter dated April 17, 2009. Significant Audit Findings Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Washington Street Apartments are described in Note I to the financial statements. I noted no transactions entered into by the Project during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. 235 W. Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants 042 Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. There were no sensitive estimates affecting the financial statements. The disclosures in the financial statements are neutral, consistent and clear. There are no sensitive disclosures affecting the financial statements. Difficulties encountered in Performing the Audit I encountered no significant difficulties in dealing with management in performing and completing my audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements anc recorded the entries necessary to capitalize the Project. Included are the journal entries made as a result of my audit for your reference. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. I am pleased to report that no such disagreements arose during the course of my audit. Management Representations I have requested certain representations from management that are included in the management representation letter dated September 30, 2009. A copy of the management representation letter is included in this report for your signature. Management Consultations with other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Project's financial 043 statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To my knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues I generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Project's auditor. However, these discussions occurred in the normal course of my professional relationship and my responses were not a condition of my retention. This communication is intended solely for the use of the management company and the owner and should not be used by anyone other than these specified parties. Sincerely, iy,,4E�%Iethmeier Certified Public Accountant ••- 044 WASHINGTON STREET APARTMENTS C/O HYDER & COMPANY 1649 CAPALINA ROAD, SUITE 500 SAN MARCOS, CA 92069-1226 September 30, 2009 Joyce E. Rethmeier, CPA 235 West Fifth Avenue, Suite G Escondido, CA 92025 We are providing this letter in connection with your audit of the statements of financial position of Washington Street Apartments (An elderly housing development owned by La Quinta Redevelopment Agency), RD case No. 04-33- 953740431, as of June 30, 2009, and the related statements of activities and cash flows for the year period of inception (October 31, 2008) to June 30, 2009 for the purpose of expressing an opinion as to whether the financial statements present fairly, in all material respects, the financial position, changes in net assets, and cash flows of Washington Street Apartments in conformity with U.S. generally accepted accounting principles. We confirm that we are responsible for the fair presentation in the financial statements of financial position, changes in net assets, and cash flows in conformity with generally accepted accounting principles. We are also responsible for adopting sound accounting policies, establishing and maintaining effective internal control, and preventing and detecting fraud. Certain representations in this letter are described as being limited to matters that are material. Items are considered material if they involve an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a. reasonable person relying on the information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors. We confirm, to the best of our knowledge and belief as of September 30, 2009, the following representations made to you during your audit. I. The financial statements referred to above are fairly presented in conformity with U.S. generally accepted accounting principles and includes all assets and liabilities under Washington Street Apartments's control. 2. We are responsible for the supplementary information accompanying the basic financial statements required by the Department of Agriculture, Rural Development and the information submitted to Rural Development. 3. We have made available to you all financial records and related data and all audit or relevant monitoring reports, if any, received from funding sources. 4. There have been no communications from Rural Development or other regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. 5. There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements or the schedule of expenditures of federal awards. 6. We believe the effects of the uncorrected financial statement misstatements summarized in the attached schedule are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. 045 In addition, you have recommended adjusting journal entries that have been posted to Washington Street Apartments's accounts. We are in agreement with those adjustments. 7. We acknowledge our responsibility for the design and implementation of programs and controls to prevent and detect fraud. 8. We have no knowledge of any fraud or suspected fraud affecting the entity involving — a. Management b. Employees who have significant roles in internal control, or c. Others where the fraud could have a material effect on the financial statements. 9. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, former employees, grantors, regulators, or others. 10. The entity has no plans or intentions that may materially affect the carrying value or classification of assets, liabilities, or equity balances. 11. Receivables recorded in the financial statements represent valid claims against tenants or other parties arising on or before the balance sheet date and have been appropriately reduced to their estimated net realizable value. 12. The following, if any, have been properly recorded or disclosed in the financial statements: a. Related party transactions and related accounts receivable or payable, including revenues, expenses, loans, transfers, leasing arrangements, and guarantees- b. Arrangements with financial institutions involving compensating balances or other arrangements involving restrictions on cash balances and line -of -credit or similar arrangements. C. Arrangements to repurchase assets previously sold. d. Guarantees, whether written or oral, under which Washington Street Apartments is contingently liable. 13. There are no estimates that may be subject to a material change in the near term that have not been properly disclosed in the financial statements. We understand that near term means the period within one year of the date of the financial statements. In addition, we have no knowledge of concentrations existing at the date of the financial statements that make the project owner vulnerable to the risk of severe impact that have not been properly disclosed in the financial statements. We understand that concentrations include individual or group concentrations of tenants, suppliers, lenders, products, services, sources of labor or materials, licenses or other rights, or operating areas or markets. We further understand that severe impact means a significant financially disruptive effect on the normal functioning of the project. 14. We are responsible for — a. Compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us; and we have identified and disclosed to you all laws, regulations and provisions of contracts and grant agreements that we believe have a direct and material effect on the determination of financial statement amounts, or other financial data significant to the audit objectives. C.46 b. Establishing and maintaining effective internal control over financial reporting. 15. There are no — a. Violations or possible violations of laws or regulations and provisions of contracts and grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, or for reporting on noncompliance. b. Unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with Statement of Financial Accounting Standards No. 5. c. Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by Statement of Financial Accounting Standards No. 5. d. Designations of net assets disclosed to you that were not properly authorized and approved, or reclassifications of net assets that have not been properly reflected in the financial statements. 16. Washington Street Apartments has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged. 17. We are responsible for Washington Street Apartments's compliance with laws and regulations and the provisions of contracts and grant agreements applicable to it and the requirements of each Rural Development program; and we have identified, and disclosed to you, all laws and regulations and the provisions of contracts and grant agreements that have a direct and material effect on the determination of the financial statement amounts and the requirements of each Rural Development program. We have complied with (a) all aspects of laws, regulations, and the provisions of contracts and grant agreements that would have a material effect on the financial statements in the event of noncompliance and (b) the requirements of each Rural Development program. 18. We have complied with all restrictions on resources (including donor restrictions) and all aspects of contractual and grant agreements that would have a material effect on the financial statements in the event of noncompliance. This includes complying with donor requirements to maintain a specific asset composition necessary to satisfy their restrictions. 19. As part of your audit, you prepared the draft financial statements and related notes, supplementary information, and schedule of expenditures of federal awards. We have designated a competent management -level individual to oversee your services and have made all management decisions and performed all management functions. We have reviewed, approved, and accepted responsibility for those financial statements and related notes, supplementary information, and schedule of expenditures of federal awards. 20. We have identified to you any previous financial audits, attestation engagements, performance audits, or other studies related to the objectives of the audit being undertaken and the corrective actions taken to address significant findings and recommendations. 21. With respect to federal award programs: a. We are responsible for complying and have complied with the requirements of OMB Circular A-133, Audits oJStates, Local Governments, and Non -Profit Organizations. b. We have, in accordance with OMB Circular A-133, identified in the schedule of expenditures of federal awards, expenditures made during the audit period for all awards provided by federal agencies in the form of grants, rent subsidies, federal cost -reimbursement contracts, loans, loan guarantees, capital advances, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance. ��', 047 c. We are responsible for complying with, and have complied with in all material respects, the requirements of laws, regulations, and the provisions of contracts and grant agreements related to each of our federal programs and have identified and disclosed to you the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on each major federal program. d. We are responsible for establishing and maintaining, and have established and maintained, effective internal control over compliance requirements applicable to federal programs that provide reasonable assurance that we are managing our federal awards in compliance with laws, regulations, and the provisions of contracts and grant agreements that could have a material effect on our federal programs. We believe the internal control system is adequate and is functioning as intended. Also, no changes have been made in internal control over compliance or other factors to the date of this letter that might significantly affect internal control, including any corrective action taken with regard to internal control deficiencies reported in the schedule of findings and questioned costs. e. We have made available to you all contracts and grant agreements (including amendments, irany) and any other correspondence with federal agencies or pass -through entities relating to each major federal program. f. We have received no requests from a federal agency to audit one or more specific programs as a major program. g. We have complied, in all material respects, with the compliance requirements, including when applicable, those set forth in the OMB Circular A-133 Compliance Supplement, relating to federal awards and have identified and disclosed to you all amounts questioned and any known noncompliance with the requirements of federal awards, including the results of other audits or program reviews. It, We have disclosed to you our interpretation of compliance requirements that may have varying interpretations. i. We have made available to you all documentation relating to the compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements. j. Federal program financial reports and claims for advances and reimbursements are supported by the books and records from which the basic financial statements have been prepared, and are prepared on a basis consistent with the schedule of expenditures of federal awards. k. The copies of federal program financial reports provided you are true copies of the reports submitted, or electronically transmitted, to the respective federal agency or pass -through entity, as applicable. To the best of our knowledge and belief, no events, including instances of noncompliance, have occurred subsequent to the statement of financial position date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements, supplementary information or schedules. Hyder & Company, Inc. La Quinta Redevelopment Agency Date September 30, 2009 Date September 30, 2009 Washington Street Year End: June 30,2009 Adjusting Journal Entries Date: 07/01/08 To 06/30/09 Prepared by Reviewed by ran- JER 08/11/09 09/28/09 G. 6 1 Refno Date - Name Account No Debit Credit 1 06130/09 Provident - Mrtg Principal 2330-000 1,572,031.47 1 06/30/09 Assets Contributed 2390-000 1,572,031.47 To book original balance on Provident loan. 2 06/30/09 Provident - Mrtg Principal 2330-000 3.965.66 2 06/30/09 Provident - Mrtg Interest 6830-000 3,965.66 To adjust Provident mortgage to actual balance. 3 06/30/09 RD - Mortgage Principal 2320-000 760,721.00 3 06/30/09 Assets Contributed 2390-000 760,721,00 To book original USDA loan to books 4 06/30/09 RD - Mortgage Principal 2320-000 8,966-95 4 06/30/09 USDA - Mortgage/Interest 6820-000 8,966.95 To adjust RD loan to actual at 6/30/09 5 06/30/09 Land 1801-000 3,447,094A9 5 06/30/09 Building 1810-000 2,736,126.51 5 06/30/09 Loan Fees 1900-000 17,934.01 5 06/30/09 Assets Contributed 2390-000 6,201,155.01 To book fixed assets 6 06/30/09 Accumulated Depreciation 1830-000 60,803.00 6 06/30/09 Accumulated Amortization 1910-000 926.00 6 06/30/09 Depreciation 6600-000 60,803.00 6 06/30/09 Amortization 6601-000 926.00 To book current period depreciation. WP H. 8,608,569.09 8,608,569.09 Net Income (Loss) 80,260.54 09I28/09 14:20 Page 1 049 Tit�p 4 4 aubtrai COUNCIL/RDA MEETING DATE: November 3, 2009 ITEM TITLE: Approval of an Agreement with Dolphin La Quinta, LLC Permitting the Temporary Leasing of Casitas Units at Centre Pointe RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: 15 STUDY SESSION: PUBLIC HEARING: Approve the Agreement Permitting the Temporary Leasing of Casitas Units between the La Quinta Redevelopment Agency and Dolphin La Quinta, LLC. FISCAL IMPLICATIONS: The agreement requires Dolphin La Quinta, LLC to pay the City a monthly "Public Facilities Use Payment" of five percent (5%) of any amount charged for occupancy of a Casitas Unit which is leased for more than thirty days. Transient Occupancy Tax ("TOT") would be charged for occupancy of fewer than 30 days. BACKGROUND AND OVERVIEW: In December 2003, the La Quinta Redevelopment Agency entered into a Disposition and Development Agreement ("DDA"), and the City entered into a Development Agreement ("DA"), with CP Development, LLC ("CP") to facilitate development of approximately 50 acres located at the southeast corner of Miles Avenue and Washington Street. The development plan includes a hotel, resort casitas, two restaurants, housing, a medical facility, and a park. To date, the Homewood Suites Hotel, 44 casitas units, the park, and Applebee's Restaurant have been constructed, and the Eisenhower medical building is nearing completion. The casitas units were never occupied, and in May 2008, Dolphin La Quinta, LLC ("Dolphin") acquired the 44 casitas units and adjoining vacant land. Dolphin and CP 050 then negotiated a land swap, whereby CP now owns the four casitas units northwest of the hotel. The City and Agency consented to these transactions, and Dolphin assumed all rights and obligations under the DDA and DA with respect to the properties it now owns. The DDA requires the casitas units to be sold to private owners and the DA sets forth a payment scheme for the payment of certain mitigation and public facilities fees to be collected and remitted to the City. However, because of the current economic conditions, the market for casitas unit sales is weak. The recent closure of the Homewood Suites has left the area unoccupied, which has resulted in vandalism and break-ins at several casitas units. In addition, Dolphin needs to generate a partial return on this investment. Therefore, Dolphin has requested permission to lease the casitas units on a temporary basis. The terms and conditions under which Dolphin would be permitted to lease the casitas units are included in the Agreement Permitting the Temporary Leasing of Casitas Units (Attachment 1) (the "Leasing Agreement"). In summary, the Leasing Agreement would permit Dolphin to lease the units for a maximum of 30 months, and if market conditions have not improved, the Agency Executive Director would have the authority to grant extensions of up to 18 months. The Leasing Agreement would require that Dolphin's individual tenant leases include a relocation waiver, and that` Dolphin indemnify the Agency and City against any relocation claims. Dolphin is required to retain a local leasing agent and property manager. Every month, Dolphin must collect and remit to the City a Public Facilities Use Payment of 5% of any amount charged for occupancy of a casitas unit which is leased for more than thirty days; and must report and pay TOT for occupancy of fewer than 30 days. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve the Agreement Permitting the Temporary Leasing of Casitas Units between the La Quinta Redevelopment Agency and Dolphin La Quinta, LLC; or 2. Do not approve the.Agreement Permitting the Temporary Leasing of Casitas Units between the La. Quinta Redevelopment Agency and Dolphin La Quinta, LLC; or 3. Provide staff with alternative direction. '�- ' 051 Respectfully submitted, 041C Douglas R. E ans Assistant City Manager — Development Services Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1 . Agreement Permitting the Temporary Leasing of Casitas Units ... 052 ATTACHMENT I AGREEMENT PERMITTING THE TEMPORARY LEASING OF CASITAS UNITS THIS AGREEMENT PERMITTING THE TEMPORARY LEASING OF CASITAS UNITS (this "Agreement') is made and entered into as of , 2009 (the "Effective Date") by and between LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and DOLPHIN LA QUINTA, LLC, a California limited liability company ("Dolphin"). RECITALS: A. Dolphin owns certain real property located southeast of the Miles Avenue and Washington Street intersection in the City of La Quinta, County of Riverside, State of California (the "Dolphin Property"). The Dolphin Property is more particularly described in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. The Dolphin Property is subject to a Disposition and Development Agreement entered into on or about December 18, 2003, between CP Development, LLC, a California limited liability company ("CP") and the Agency (the "Original DDA"). Pursuant to the Original DDA, (i) Agency sold to CP the Dolphin Property and certain adjacent real property located in the City of La Quinta, California 92253 (collectively with the Dolphin Property, the "Property"), and (ii) CP agreed to construct, complete, and operate thereon a commercial project, as more particularly described therein (the "Original Project'). C. The Original DDA has been amended on six (6) occasions, on or about October 28, 2004, on or about December 7, 2004, on or about November 2, 2005, on or about October 20, 2006, on or about August 23, 2007, and on or about March 19, 2008 (collectively, the "Prior DDA Amendments"). The Original DDA, as amended by the Prior DDA Amendments, is hereinafter referred to as the "DDA" and the Original Project, as amended by the Prior DDA Amendments, is hereinafter referred to as the "Project." D. The Dolphin Property is also subject to a Development Agreement entered into between the City of La Quinta (the "City") and CP concurrently with the execution of the Original DDA (the "Original DA"). The Original DA was recorded in the Official Records of the County Recorder for the County of Riverside (the "Official Records") on January 5, 2004, as Instrument No. 2004-0005256. The Original DA has been amended on three (3) prior occasions, pursuant to that certain Amendment No. 1 to Development Agreement executed on or about October 28, 2004, and recorded in the Official Records on November 8, 2004, as Instrument No. 2004-0885063, that certain Amendment No.2 to Development Agreement executed on or about November 17, 2005, and recorded in the Official Records on December 19, 2005, as Instrument No. 2005-1045418, and that certain Amendment No. 3 to Development Agreement executed on or about May 6, 2008 and recorded in the Official Records on June 4, 2008, as Instrument No. 2008-0303530 (collectively, the "Prior DA Amendments") The Original DA, as amended by the Prior DA Amendments, is hereinafter referred to as the "DA." E. Dolphin acquired a portion of the Dolphin Property and certain other real property (collectively, "Parcel 2") from Lennar Homes of California, a California corporation ("Lennar"), who had previously acquired Parcel 2 from CP. The City and Agency consented to 882/015610.0085 1042837,07.1028/09 -1- 053 the foregoing transfer to Dolphin pursuant to that certain Agreement for Deposit of Funds entered into by and among the City, Agency, Dolphin, and Lennar on or about May 22, 2008 ("Agreement for Deposit of Funds"). Dolphin has satisfied the requirements as stated in Section 1(a) of said Agreement for Deposit of Funds, and more specifically Section l(a)(ii) by timely achieving the land swap transaction as described in Recital G below. F. In connection with said transfer, Dolphin assumed all of Lennar's rights and obligations under the DDA and DA with respect to Parcel 2 pursuant to an Assignment and Assumption Agreement recorded in the Official Records of the County of Riverside, as Instrument No. 2008-0411463, on July 28, 2008. G. On September 26, 2008, Dolphin transferred that portion of Parcel 2 described as "Parcel A" in the Certificate of Lot Line Adjustment for Lot Line Adjustment Number 2008-495 (the "Certificate") to CP, and CP transferred an adjacent portion of the Property ("Parcel 3 of Parcel Map 31116") to Dolphin. Concurrently with said transfers, CP and Dolphin entered into that certain Assignment and Assumption Agreement, which was recorded in the Official Records of the County of Riverside, as Instrument No. 2008-0527098, on September 26, 2008, pursuant to which Dolphin and CP each assigned to the other its rights and obligations under the DDA and DA with respect to the real property transferred. The portion of Parcel 2 retained by Dolphin, which is described as "Parcel B" in the Certificate, and Parcel 3 of Parcel Map 31116 collectively comprise the Dolphin Property. H. On September 16, 2009, Dolphin recorded Tract Map No. 36089, which subdivided the Dolphin Property into two individual lots, Lot 1 and Lot 2. Lot 1 of the Dolphin Property is developed with forty (40) condom in ium/casitas units that were completed by Lennar prior to Dolphin's acquisition of any portion of the Dolphin Property (the "Casitas Units"). Lot 2 of the Dolphin Property is undeveloped. I. Pursuant to the DDA, Dolphin is required to sell the Casitas Units to individual, private owners. In contemplation of such sales, the DA sets forth a comprehensive payment scheme based on individual, private ownership of the Casitas Units. J. As a result of the general economic slowdown, the market for the Casitas Units sales is weak. Dolphin has now requested the ability to lease the Casitas Units on a temporary basis, to enable Dolphin to achieve some economic use of the Dolphin Property and to prevent break-ins into the Casitas Units and other criminal activity. The parties now wish to set forth the terms and conditions on which Dolphin shall be permitted to lease the Casitas Units, and to set forth a deadline by which Dolphin must execute amendments to the DDA and DA with respect to Lot 2 of the Dolphin Property. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 882/015610-0085 1042839.07 a O/28/09 -2- '•... 054 I. Permission to Lease Casitas Units. Notwithstanding the requirement in the DDA that each of the Casitas Units be individually sold to private owners, Dolphin shall be permitted to temporarily lease the Casitas Units on the terms and conditions set forth below. (a) Retention of Leasing Agent. Dolphin shall retain and maintain during the term of this Agreement a residential leasing professional with experience and expertise in La Quinta, California -based residential real estate rentals in a product type that is similar in nature to the Casitas Units to process all leases with respect to the Casitas Units (the "Leasing Agent"). Dolphin shall provide the Leasing Agent with a full-time marketing and leasing office on Lot I of the Dolphin Property. Dolphin shall require the Leasing Agent to actively market the Casitas Units for lease, and to document each transaction in the manner customary for leases of first class resort condominiums in Riverside County. The Leasing Agent, and any replacement Leasing Agent, must be approved by the Agency's Executive Director, in his or her reasonable discretion. The Agency hereby approves as a Leasing Agent Lori Bowers of The Lori Bowers Group -Desert Properties; located in Old Town La Quinta. (b) Retention of Property Manageer. Dolphin shall retain a professional residential property management company with experience and expertise in La Quinta, California -based residential real estate similar in product type to the Casitas Units (the "Property Manager") as the property manager for Lot 1 of the Dolphin Property. The Property Manager shall be responsible for the day-to-day oversight of the Casitas Units and Lot I of the Dolphin Property, and for (i) tenant relations; (ii) all necessary repairs of the Casitas Units; (iii) grounds maintenance; (iv) oversight of service vendors to Lot 1 of the Dolphin Property; (v) accepting all calls from lessees and responding with appropriate action; (vi) maintaining service logs; (vii) rent collection; (viii) providing security services to the Dolphin Property when necessary to prevent criminal activity; and (ix) assisting Dolphin with the preparation of the "Monthly Report" (as that term is defined in Section 4 below), including the tracking and payment of "Public Facilities.Use Payments" (as that term is defined in Section 5 below) to the City. The Property Manager shall provide a maintenance person dedicated to Lot 1 of the Dolphin Property (a "Maintenance Person"). If the professional care and maintenance of the Casitas Units requires, as reasonably determined by Dolphin, that the Maintenance Person be on - site, or if applicable ordinances and/or laws governing the subject rentals requires on -site residence of one individual for rental properties comprised of forty (40) units, then the Maintenance Person shall reside in one of the Casitas Units. Regardless of whether the Maintenance Person resides on -site or off -site, however, the Maintenance Person shall be available to handle all routine maintenance issues pertaining to the Casitas Units and Lot 1 of the Dolphin Property. The Property Manager, and any replacement Property Manager, must be approved by the Agency's Executive Director, in his or her reasonable discretion. The Agency hereby approves Desert Resort Management as a Property Manager. (c) Asset Manaizement. Dolphin shall remain actively involved in the leasing of the Casitas Units and the operation and management of the Dolphin Property. All leases shall be executed by Dolphin. (d) Lease Requirements. Each lease agreement shall include (i) a reference to the DDA, including to the requirement therein that the Casitas Unit to be sold to an individual, 882/015610-0085 1042837.07 a1028109 -3- �- 055 private buyer, (ii) an acknowledgement by the lessee that the lessee is only able to lease the Casitas Unit because of a special accommodation made by the Agency that allows the Casitas Unit to be temporarily leased and that the lessee has no expectation that the lease will be renewed, and (iv) a waiver and 1542 release by the lessee of any relocation assistance, benefits, or payments to which the lessee may otherwise be entitled. Unless authorized by the Agency's Executive Director pursuant to Section 3 below, no lease shall extend beyond thirty (30) months after the Effective Date (the "Termination Date"). 2. CaMort Construction. Prior to entering into any lease, Dolphin shall construct forty-two (42) carports on the Dolphin Property for use by the lessees of the Casitas Units. 3. Annual Meetings with Agency. At least sixty (60) days before each anniversary of the Effective Date during the term hereof, Dolphin and Agency representatives shall meet to discuss the viability of the market for selling the Casitas Units. In the event the Agency Executive Director reasonably determines that said market has not sufficiently improved, the Agency Executive Director shall have the authority to extend the Termination Date for up to a maximum of eighteen (18) months. 4. Reporting Requirements. During the term hereof, Dolphin shall be responsible to provide to City Finance Department, at the address listed in Section 14 below (addressed to the attention of City Finance Director John Falconer), a monthly report, on a form provided to Dolphin by the City not later than thirty (30) days after the Effective Date of this Agreement, that contains all of the following information on each Casitas Unit for such month: (a) the number of said Unit; (b) the dates the Unit was occupied; and (c) if applicable, the TOT that has been collected by Dolphin or the Property Manager and remitted to the City for use of said Unit during such month (each, a "Monthly Report"). A representative of Dolphin with authority to bind Dolphin shall sign each Monthly Report, certifying that to the best of his or her knowledge the information contained therein is true and correct. Each Monthly Report shall be sent to the City (evidenced by the date postmarked on the envelope) no later than thirty (30) days after the end of the month covered by such Monthly Report. 5. Payment of Public Facilities Use Payments. During the term hereof, Dolphin shall be required to pay to the City the sum of five percent (5%) of any amount charged for occupancy of a Casitas Unit which is leased for a period of more than thirty (30) days (each, a "Public Facilities Use Payment"). The Public Facilities Use Payments shall be due and payable to the City with, and at the same time Dolphin is required to provide, the applicable Monthly Report, regardless of whether the lease payment due for occupancy of said Casitas unit, or any amount thereof, was collected. If the Casitas Unit is provided free of charge or at a discount, as consideration for a service provided by the lessee to Dolphin, the Leasing Agent, or the Property Manager, and/or for promotional or marketing purposes, the lease amount shall be deemed to be the higher of (i) the value of the services received; or (ii) the average lease amount of all of the Casitas Units during the period the Casitas Unit was leased (prorated for the time the Casitas Unit in question was leased). 6. Late Payments. If Dolphin fails to pay to the City any Public Facilities Use Payment required to be collected and remitted to the City hereunder within the time required, Dolphin 882/01561M085 1042837.07 a10/28/09 -4- 056 shall pay to the City a penalty of ten percent (10%) of the applicable payment or late portion of the applicable payment, in addition to the applicable payment or late portion of the applicable payment, plus interest at the rate of one-half of one percent (.05%) per month, or fraction thereof, from the date on which the applicable payment or late portion of the applicable payment required to be collected and remitted to the City becomes delinquent until the date of remittance to the City. If Dolphin fails to pay any penalty imposed under this Section 6 within ten (10) days after receipt of written notice thereof, Dolphin shall pay interest thereon at the rate of one-half of one percent (.05%) per month, or fraction thereof from the date on which the penalty becomes due and payable to the City until the date of remittance to the City. 7. Effect of Agreement on DDA and DA. Dolphin acknowledges and agrees that the effect of this Agreement is to temporarily allow Dolphin to lease the Casitas Units in accordance with the terms hereof and to provide the timing for Dolphin to execute DDA and DA amendments. With the exception of allowing such temporary leasing and providing the timing for Dolphin to execute DDA and DA amendments, nothing herein shall be construed as an amendment to the DDA or DA, the terms of which continue to apply to the Dolphin Property. At such time as this Agreement expires or is terminated, Dolphin shall no longer be permitted to lease the Casitas Units without obtaining the prior written approval of the Agency. 8. Future DDA/DA Amendments. By the thirtieth (30`h) month after the Effective Date, Dolphin shall execute with the Agency an amendment to the DDA (the "DDA Amendment") and with the City an amendment to the DA with respect to Lot 2 of the Dolphin Property; provided, however, that nothing herein shall require Dolphin to execute either of said amendments prior to said deadline. The Agency's Executive Director shall have authority to extend such deadline for up to eighteen (18) additional months. With the execution hereof, the Dolphin Performance Schedule set forth in Exhibit B of the Agreement for Deposit of Funds is hereby deemed terminated. The DDA Amendment shall contain a revised performance schedule for the development of Lot 2 of the Dolphin Property. 9. Relocation Indemnification. Dolphin shall indemnify, defend, and hold harmless City and Agency and their respective officers, officials, members, representatives, employees, and agents (collectively, the "Indemnitees"), from and against any and all claims, liabilities, damages, costs, losses, or expenses (including reasonable attorneys' fees incurred in connection with any of the foregoing and incurred in connection with enforcing this provision), of any kind whatsoever, paid, incurred or suffered by or asserted against any of the Indemnitees by any person in connection with, arising out of, or resulting in any way whatsoever, from the termination of, or failure to renew, any lease of a Casitas Unit during or after the expiration of the term hereof, or after the termination hereof (collectively, the "Claims"), including, without limitation, all transactional costs incurred by the Agency and/or City in connection with any Claims, including, but not limited to, consultants' costs and fees, the costs to prepare plans, including, without limitation, relocation plans, and the costs of any relocation assistance, benefits or payments paid or required to be paid by the City and/or Agency in the settlement of any of such Claims. 10. Reimbursement. Dolphin shall reimburse Agency for all of the costs Agency incurs or has incurred to negotiate, prepare and process this Agreement. Agency acknowledges that 882/015610-0085 1042837 07 a 10/28/09 -5- ••w' Q57 Dolphin deposited Five Thousand Dollars ($5,000) with the Agency on or about September 29, 2009, identified as Deposit Number 09-001 (the "Deposit"). The Deposit shall be the first source of funds for the reimbursement required by this Section 10. If the funds comprising the Deposit are insufficient to cover all of such costs, Dolphin shall provide additional funds to cover the balance. Within five (5) business days after the execution hereof, Agency shall provide to Dolphin an accounting of Agency's use of the Deposit. 11. City as Third Party Beneficial. City is an express third party beneficiary of the provisions in Sections 4, 5, 6, and 9 above and shall have the right, but not the obligation, to enforce said provisions. 12. Compliance with Laws. Dolphin shall comply with all applicable laws, ordinances, and regulations in the leasing of the Casitas Units, including, without limitation, the requirement to pay transient occupancy tax (as that term is used in La Quinta Municipal Code Chapter 3.24) on all leases subject thereto. 13. Defaults; Remedies. (a) Defaults Generally. Failure by either party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default, if such party cures such default within thirty (30) days from receipt of such notice, or if the nature of such default is that it cannot reasonably be expected to be cured within such thirty (30) day period, if such party, with due diligence, commences to cure, correct or remedy such failure or delay within thirty (30) days from receipt of such notice, and completes such cure, correction or remedy with diligence. Upon a Default by Dolphin which has not been cured within the timeframes set forth herein, Agency shall have the right to terminate this Agreement. Upon such termination, Dolphin shall be prohibited from renewing any existing lease or entering into any new lease for a Casitas Unit. (b) Acceptance of Service of Process. In the event that any legal action is commenced by Dolphin against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director of the Agency or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against Dolphin, service of process on Dolphin shall be made by personal service upon any officer of Dolphin, whether made within or outside the State of California, or in such other manner as may be provided by law. (c) Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 182/015610-0085 1042837,07 ¢l0/28/09 -6- W. . 058 (d) Attorney's Fees. In the event of any action between the parties hereto seeking enforcement of any of the terms and conditions to this Agreement, the prevailing party in such action shall be awarded its reasonable costs and expenses, including without limitation its expert witness fees and reasonable attorney's fees. 14. Notices. Demands and Communications Between the Parties. Any notice which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable means to the party to whom the notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by notice. To Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Phone No.: 760-777-7031 Facsimile No.: 760-777-7101 Attention: Executive Director With a copy to: Rutan & Tucker, LLP 611 Anton, Suite 1400 P.O. Box 1950 Costa Mesa, California 92628 Phone No.: 714-641-5100 Facsimile No.: 714-546-9035 Attention: M. Katherine Jenson, Esq. To Dolphin: Dolphin La Quinta, LLC 18818 Teller Avenue, Suite 200 Irvine, CA 92612 Phone No.: 949-852-9230 Facsimile No.: 949-852-8924 Attention: Kevin S. Pitts Any written notice, demand or communication shall be deemed received upon delivery if delivered by hand, and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 15. Prepared by both Parties. This Agreement shall be construed according to its fair meaning and as if prepared by all of the parties hereto. 16. Governing Law. This Agreement shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Superior Court of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Agreement. 182/015610-0085 1042837.07 a] 0/28/09 -7- •�Y • -\ 059 17. Time of Essence. Time is of the essence of this Agreement and of each and every term and provision hereof. 18. Waiver. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by Agency and Dolphin. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 19. Counterparts. This Agreement may be executed in counterparts, each of which, when this Agreement has been signed by all the parties hereto, shall be deemed an original, and such counterparts shall constitute one and the same instrument. 20. Representations. The person(s) executing this Agreement on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which such party is bound. 21. Severability. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. [signature page follows] 882/015610-0085 1042837.07 a 10/28/09 -$- M IN WITNESS WHEREOF, Agency and Dolphin each hereby represents that it has read this Agreement, understands it, and hereby executes this Agreement to be effective as of the day and year first written above. 2009 "Dolphin" DOLPHIN LA QUINTA, LLC, a California limited liability coma By: Dolphin Its: Its: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic 2009 By: ATTEST: Veronica J. Montecino, Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP in M. Katherine Jenson, Agency Counsel 112/015610-0085 1042837.07 a]0/28/09 512 Executive Director «- ." C 61 EXHIBIT "A" LEGAL DESCRIPTION OF DOLPHIN PROPERTY IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO BASE AND MERIDIAN.: LOT 1 OF TRACT NO. 36089, AS RECORDED IN BOOK 432 OF MAPS AT PAGES 64 THROUGH 66, OFFICIAL RECORDS OF RIVERSIDE COUNTY AS INSTRUMENT NO. 2009-0482164. CONTAINING 99,836 SF (2.292 AC.) MORE OR LESS 882/015610-0083 1042837,07 e10/28/09 -�- -� C �` ,on. V �a \11111�, Y � Qum O� �. F'y OF'1'�'9 COUNCIURDA MEETING DATE: October 6, 2009 ITEM TITLE: Approval of the Transfer of Ten Parcels of Land from the La Quinta Redevelopment Agency to the City of La Quinta and Authorize the Executive Director to Execute the Required Documents (APNs 604-040-057, 604-470-001, 770-184-001, 773- 101-001, 002, 769-083-007, 008, 009), Lots E, F, G, H, and I of Parcel Map 31116, and Lot D of Parcel Map 33588 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve the transfer of ten parcels of land from the Redevelopment Agency to the City and authorize the City Attorney to prepare and the Executive Director to execute the required documents. FISCAL IMPLICATIONS: None at this time. All operation and maintenance costs are currently in the City Budget. BACKGROUND AND OVERVIEW: Staff has been in the process of cataloging Agency and City property. In reviewing the Agency -owned properties, staff determined that a number of parcels should be transferred to the City for on -going operation, maintenance purposes, and future disposition. Attachment 1 is a map identifying the location of the parcels. These properties are described as follows: the Pioneer Park within the Centre Pointe project (APN 604-040-057) (Map #1); the La Quinta Community Park (APN 604-470- 001) (Map #2) on Westward Ho Drive and Adams Street; that portion of Fritz Burns Park 770-184-001) (Map #3) acquired in the Avenue 52 realignment; and the La Quinta Museum (APN 773-101-001, 002) (Map #4). These parcels should be transferred to the City for operation and maintenance. Two landscaped lots, Lots E, F, G, H, and I of Parcel Map 31 1 16-Centre Pointe (Map #5) and Lot D of Parcel Map 33588-Stamko Development Co. (Map #6), were not transferred to the City by the County when the Parcel Maps were recorded. The maps stipulated the lots were to be deeded to the City; in speaking with the County 063 N., . . Recorders Office, it was an oversight during map recording. Staff is therefore requesting authorization to make the transfer for on -going maintenance purposes. In addition, there are three lots (APNs 769-083-007, 008, 009) (Map #7-9) that are part of the Senior Center and Library complex that should be included in this transfer for future disposition of the land. Funding sources for the original purchase of the above properties are as follows: 1) the La Quinta Community Park and Pioneer Park were purchased with Capital Project Fund -Project Area No. 2 non -housing funds and 1995 Low -Mod Income Housing Bond Proceeds respectively; 2) the addition to Fritz Burns Park was purchased with Capital Project Fund -Project Area No. 1 Non -Housing Tax Increment Funds; 3) the Museum was purchased with Project Area No. 1 Non -Housing Tax Increment Funds; and 4) the three lots on Main Street/Avenida La Fonda were purchased with Capital Project Fund - Project Area No. 1 Non -Housing Funds. FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve the transfer of ten parcels of land from the Redevelopment Agency to the City and authorize the City Attorney to prepare and the Executive Director to execute the required documents; or 2. Do not approve the transfers; or 3. Provide staff with alternative direction. Respectfully submitted, —, �'r9'4- CA � �� Douglas R. vans Assistant City Manager — Development Services Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Location Map 064 �llllggfil��HIM, S 50 MT PORTION 11 CI NO City of La Quinta 065 w z Redevelopment Agency -owned Properties (as of April, 2dt?9) y s ,.