2011 06 21 RDARedevelopment Agency agendas are
available on the City' web page
@ www.la-quinta.org
REDEVELOPMENT AGENCY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calls Tampico
La Quinta, California 92253
Regular Meeting
TUESDAY, JUNE 21, 2011 AT 4:00 P.M.
Beginning Resolution No. RA 2011-024
CALL TO ORDER
Roll Call:.
Agency Board Members: Adolph, Evans, Franklin, Sniff, Chairperson Henderson
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 — NONE
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
1. APPROVAL OF REGULAR MEETING MINUTES OF JUNE 7, 2011
2. APPROVAL OF SPECIAL MEETING MINUTES OF JUNE 14, 2011 001
.,.M
REDEVELOPMENT AGENCY AGENDA 1 JUNE 21, 2011
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 JUNE 21, 2011
2. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT FOR APRIL 30,
2011
3. RECEIVE AND FILE TREASURER'S REPORT FOR APRIL 30, 2011
4. ADOPTION OF A RESOLUTION ADOPTING THE INVESTMENT POLICY OF
THE CITY OF LA QUINTA FOR FISCAL YEAR 2011 /2012
5. APPROVAL OF AN ASSIGNMENT AND ASSUMPTION AGREEMENT BY AND
BETWEEN CP DEVELOPMENT LA QUINTA AND LA QUINTA RETIREMENT
RESIDENCE LIMITED PARTNERSHIP FOR PROPERTY LOCATED AT THE
SOUTHEAST CORNER OF WASHINGTON STREET AND MILES AVENUE
PURSUANT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT
6. ADOPTION OF A RESOLUTION APPROVING A COST SHARING AGREEMENT
AMONG THE LA QUINTA REDEVELOPMENT AGENCY, THE CITY OF LA
QUINTA, AND THE COACHELLA VALLEY WATER DISTRICT FOR THE
RECONSTRUCTION OF THE COACHELLA CANAL, A REGIONAL WATER
CONVEYANCE SYSTEM, WITHIN THE SILVERROCK PROPERTY AND
MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND SAFETY CODE
SECTION 33445 WITH RESPECT TO THE AGENCY'S EXPENDITURE
7. ADOPTION OF A RESOLUTION APPROPRIATING REDEVELOPMENT FUNDS
FOR THE WASHINGTON STREET TURN LANE IMPROVEMENTS AT
EISENHOWER DRIVE / CALLE TAMPICO, PROJECT NO. 2010-09, AND
MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND SAFETY CODE
SECTION 33445(a) WITH RESPECT TO SUCH EXPENDITURES
BUSINESS SESSION
1. CONSIDERATION OF A RESOLUTION APPROVING A REPLACEMENT
HOUSING PLAN FOR 78181 AVENIDA LA FONDA (APN 770-125-003,
78182 AVENIDA LA FONDA (APN 770-124-007), AND 78153 MAIN
STREET (APN 770-124-004)
A. RESOLUTION ACTION
2. CONSIDERATION OF FISCAL YEAR 2011 /2012 PRELIMINARY BUDGET
A. MINUTE ORDER ACTION
n 002
REDEVELOPMENT AGENCY AGENDA 2 JUNE 21, 2011
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 July 5,
2011 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 June
21, 2011, 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 June 17, 2011.
DATED: Jwm, 112011
b?A pt
VERONICA J. MONTECINO, 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.
wb
000
REDEVELOPMENT AGENCY AGENDA 3 JUNE21,2011
RDA MEETING DATE: June 21, 2011
ITEM TITLE: Approval of Demand Register Dated'
June 21, 2011
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and File the Demand Register Dated
June 21, 2011 of which $13,102,620.57
AGENDA CATEGORY:
BUSINESS SESSION
CONSENT CALENDAR I
STUDY SESSION
PUBLIC HEARING
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
.n 004
W4&t 4 4 Qamrcv
AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: June 21, 2011 BUSINESS SESSION: _
ITEM TITLE: Receive and File Transmittal of Revenue CONSENT CALENDAR: Z
and Expenditure Report for April 30, 2011
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
Receive and File.
BACKGROUND AND OVERVIEW:
Receive and File Transmittal of the Statement of Revenue and Expenditures for
April 30, 2011 for the La Quinta Redevelopment Agency.
Respectfully submitted,
11 l
JohGn M. Falconer, Finance Director
Approved for submission by:
(7/ /We-��
Thomas P. Genovese, Executive
Director
Attachment: 1. Revenue and Expenditures for April 30, 2011
•..a 005
LA QUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO. 1'
ATTACHMENT 1
07/01/2010 - 04/30/2011
ADJUSTED REMAINING %
BUDGET RECEIVED BUDGET RECEIVED
LOWIMODERATE TAX FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Miscellaneous revenue
Non Allocated Interest
LQRP-Rent Revenue
Home Sales Proceeds
Sale of Land
Starer Subsidy Reimbursements
Rehabilitation Loan Repayments
2nd Trust Deed Repayment
Williams Note Payment
Transfer In
TOTAL LOW/MOD TAX
DEBT SERVICE FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Interest- County Loan
Interest Advance Proceeds
Transfers In
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND
Pooled Cash Allocated Interest
Non Allocated Interest
Developer Agreement Funding
Sale of Land Proceeds
Rental Income
Litigation Proceeds
Transfers In
TOTAL CAPITAL IMPROVEMENT
8.802,408.00
4,401,203.19
4,401,204.81
50.000%
46,800.00
13,127.55
33,672.45
28.050%
0.00
1,333.32
(1,333.32)
0.000%
0.00
0.00
0.00
0.000%
0.00
0.00
0.00
0.000%
0.00
0.00
ODD
0.000%
215,000.00
243.222.04
(28,222.04)
113.130%
0.00
0.00
0.00
0.000%
0.00
779.52
(779.52)
O.000%
0.00
0.00
0.00
0.000%
0.00
30.350.00
(30,350.00)
0.000%
23,029.D0
23,029.00
0.00
100.000%
40,000.00
40,000.00
000
100000%
9.127,237.00
4,753,044.62
4376192.38
52080%
35.209,626.00
17,604,812.73
17,604.813.27
50,000%
6.600.00
6,178.38
421.62
93.610%
0.00
1,543.37
(1,543.37)
0.000%
0.00
0.00
0.00
0.000%
0.00
0.00
0.00
0.000%
28 378 127.00
19 577 971 23
8 800155 77
68 990%'
63,594,353.00
37,190,505.71
26,403,Btl.29
58480%
113,600.00
75,846.97
37,753.03
66.770%
25,000.00
20,404.37
4,595.63
81.620%
250.000.00
305,464.69
(55,454.69)
122.180%
4,875,000.00
4,875.000.00
0.00
100.000%
0.00
0.00
0.00
0.000%
0.00
0.00
0.00
0.000%
8,900,000.00
0.00
8,9DO,000.00
0 000%
14.163.600.00
5,276,706.03
8,886,893.97
37260%
".M, 006
2
LA OUINTA REDEVELOPMENT AGENCY ADJUSTED W30111 REMAINING
EXPENDITURE SUMMARY BUDGET EXPENDITURES ENCUMBERED BUDGET
PROJECT AREA NO 1-
LOINNODERATE TAX FUND:
PERSONNEL
0.00
0.00
000
0.00
SERVICES
373,040.00
260,364,68
0,00
112.675,32
LO RENTAL PROGRAM
0.00
0.00
0.00
0,00
2n0 TRUST DEED PROGRAM
65,000.00
150,000.W
0,00
(85,000.00)
HABITAT FOR HUMANITY
250,000.D0
91 443,30
0.00
158,5 ,70
LANDACOUISITION
0,00
0.00
0.00
0.00
LOW MOD HOUSING PROJECTS
0.00
7,55000
3,250.00
(10,800.00)
FORECLOSURE
W.W7.00
4,859,10
0.00
378,W7.90
REIMBURSEMENT TO GEN FUND
947,565.00
789,840.00
0.00
157,925.00
TRANSFERS OUT
7874014.00
6344516.01
0.00
15261!Z9l
TOTAL LOWIMOD TAXgT
DEBT SERVICE FUND:
SERVICES
186,6w0oo
386,144.87
0,00
100,455,13
BOND PRINCIPAL
3,330,000,00
3,330, XOW
0.00
0.00
BOND INTEREST
6,941,43500
6,941,435.01
0,00
(0.01)
INTEREST CITY ADVANCE
1,146,667.00
1,146,666.96
000
0.04
PASS THROUGH PAYMENTS
20,190,059.00
8, 196,61372
0.00
ll,991,44528
ERAF SHIFT
4,855,19300
0,00
0.00
4, 855,193.D0
TRANSFERS OUT
12,863,138.00
3,963,13T94
0.00
Q900000.06
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
PERSONNEL
0.00
000
0.00
0.00
SERVICES
510.722.00
326,143,50
0.00
184,578.50
LANDACOUISITION
0.00
Dw
0.00
0.00
ASSESSMENT DISTRICT
0,00
DIX
0.00
0.00
ADVERTISING -ECONOMIC DEV
0.00
0.00
0.00
0.00
ECONOMIC DEVELOPMENT
5,821.00
000
5,425.25
395.75
BOND ISSUANCE COSTS
0.00
0,00
0.00
0.00
CAPITAL - BUILDING
000
000
0,00
O.DO
REIMBURSEMENT TO GEN FUND
509,493,W
355,580.W
0.00
153,913.00
TRANSFERS OUT
51,8]1941.00
19,321405.23
0.00
325 535.77
TOTAL CAPITAL IMPROVEMENT-
52 97!977M
KM
07101/2010. W3012011
LA QUINTA REDEVELOPMENT AGENCY
ADJUSTED-
REMAINING
%
REVENUE SUMMARY
BUDGET
RECEIVED
BUDGET
RECEIVED
PROJECT AREA NO 2�
LOW/MODERATE TAX FUND:
Tax Increment
Allocated Interest
4,800,480.00
2,400.240.52
2,400.239.48
50.000%
Non Allocated Interest
51,700.00
55.423.86
(3,723.86)
107200%
Wash St Apls Interest Income
2,500.00
O.OD
2.500.00
0AD0%
WSA Fed Govt Assistance Pymts
0.00
0.00
0.00
0,000%
WSA Fed Govt Interest Rate Subsidy
0.00
0.00
0.00
0.000%
Developer funding
0.00
0.00
0.00
p 000%
Wash St Apia Rental Income
0.00
0.00
0.00
0.000%
Wash St Apia Other Revenues
0.00
0.00
0.00
0.000%
2nd Trust Deed Repayment
0.00
8,720.00
0.00
8,719.00
0.00
0.000%
ERAF Shift - Interest
1,00
99.990%
Sale of Land
0.00
0.00
0.00
0.000%
Transfer In
0.00
0.00
0.00
0.000%
TOTAL LOW/MOD TAX
0.00
000
000
0000%
4,863,400.00
24tA383.38
239901662
50670%
2004 LOWIMODERATE BOND FUND:
Allocated Interest
Home Sale Proceeds
0.00
0.00
0.00
0.000%
Non Allocated Interest
0.00
0.00
0.00
0.000%
Transfer In
8,700.00
5,708.81
2.991.19
65.620%
TOTAL LOW/MOD BOND
0.00
8.700.00
000
5708.81
000
0000%
2991.19
65.620%
DEBT SERVICE FUND:
Tax Increment
19.201,924.00
9,600,962.12
9,600,961Z8
50.OD0%
Allocated Interest
Non Allocated Interest
49,600.00
29,406.26
20,193.74
59.290%
Interest Advance Proceeds
0.00
3,379.34
(3,379.34)
0.000%
Transfer In
0.00
0.00
0.00
0.000%
TOTAL DEBT SERVICE
9,935,134.00
8.23513525
169999875
82890%
29,186.658.00
1786888297
1131777503
61220%
CAPITAL IMPROVEMENT FUND:
Allocated Interest
Non Allocated Interest
10,000.00
6,872.96
3.127.04
68.730%
Misc Revenue
5,000.00
3,262.59
1,737.41
65.250%
Sale of land
0.00
0.00
0.00
0.000%
Transfers In
3,445,000.00
3.445,000.00
0.00
100.000%
TOTAL CAPITAL IMPROVEMENT
4,300,000.00
2,60Q00000
170.--
60470%
7,760,000.00
605513555
'170486445
78030%
.,b 008
LA OUINTA REDEVELOPMENT AGENCY
EXPENDITURE SUMMARY
PROJECT AREA NO 2-
ADJUSTED 04/30/11 REMAINING
BUDGET EXPENDITURES ENCUMBERED BUDGET
LOW/MODERATE TAX FUND:
2004
PERSONNEL
DD0
0.00
0.0D
0.00
SERVICES
470,4 &(X)
365,787.42
0.00
104,677SS
WASH ST APTS OTHER EXPENSES
0.DO
000
0.00
0,00
2ND TRUST DEEDS
0.00
0,00
0.00
0.00
LOW MOD HOUSING PROJECTS
6.035.00
9,91200
4,300.00
(8,177.00)
FORECLOSURE ACQUISITION
450,00000
0.00
0.00
450,00000
VISTA DUNES PARK
0,00
Bw
0.00
0,00
LAND ACQUISITION
0.00
0,00
0.00
0.00
WSA PRIN/PROVIDENT LOAN
0.00
Dw
0.D0
Bw
WSA PRIN/USDA LOAN
0.00
0.00
0.00
0,00
WSA INTEREST/PROVIDENT LOAN
0.00
0,00
0.00
0.00
WSA INTEREST/USDA LOAN
0.00
0.00
0.D0
0.00
REIMBURSEMENT TO GEN FUND
551,634.00
459,690.W
0.00
91,944.00
TRANSFERS OUT
13:0541;;. 0
2816503.7'
0.00
10239447.22
TOTAL LOWIMOD TAX
HOUSING PROGRAMS 0.00 0.DO 0.00 0.00
LAND BOD 0.DO 0.00 0.D0
TRANSFERS OUT 3,437,765.00 ]02210' 0.00 33W 543.93
TOTAL LOW/MOD BOND43
DEBT SERVICE FUND:
SERVICES
274,000.00
215,555.28
0,00
58,44412
BOND PRINCIPAL
325,000.D0
325.000,00
0.00
0,00
BOND INTEREST
293,272.D0
293.271.88
Dw
0,12
INTEREST CITY ADVANCE
1.094,531. DO
1,094,5WS3
0.00
0.47
PASS THROUGH PAYMENTS
15,999,408. 00
3,960,790A0
0.00
12,038.617.60
ERAF SHIFT
0.D0
000
0.00
00D
TRANSFERS OUT
6,251,99300
4551993.32
0.00
1699999.68
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
_ _
PERSONNEL
000
0.00
0.00
000
SERVICES
172.150.DO
74,868.22
0.00
97,261.78
CAPITAL
0.00
Bw
000
10.00
ECONOMIC DEVELOPMENT ACTIVITY
2,",000.00
2,002.W9.12
0.00
297,630.8E
REIMBURSEMENT TO GEN FUND
131,811.00
63,850.00
0.DO
67,951.00
TRANSFERS OUT
10,041, 555.00
8918 ]09.62
0.00
3124845.3E
TOTAL CAPITAL IMPROVEMENT
009
A
e"✓ T 4&K"'^'Q
AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: June 21, 2011 BUSINESS SESSION: _
ITEM TITLE: Receive and File Transmittal of CONSENT CALENDAR: 3
Treasurer's Report as of April 30, 2011
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and file.
PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
" 010
ceit!t 4 u4P QKmAZj
COUNCILIRDA MEETING DATE: June. 21, 2011
ITEM TITLE: Adoption of a Resolution Adopting the
Investment Policy of the City of La Quinta for Fiscal
Year 201 1-2012
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: A'
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution of the City Council approving the Investment Policy for the La
Quinta Redevelopment Agency for Fiscal Year 201 1 /2012.
PLEASE SEE BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
RESOLUTION NO. RA 2011-
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT
AGENCY OF THE CITY OF LA QUINTA APPROVING AND
ADOPTING THE AMENDED INVESTMENT POLICY FOR
FISCAL YEAR 2011 /2012
WHEREAS, the general purpose of the Investment Policy is to provide the rules
and standards users must follow in investing funds of the City of La Quinta; and
WHEREAS, the primary objectives, in order of priority, of the City of La Quinta's
investment activity shall be:
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio.
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a
market rate of return or yield throughout budgetary and economic cycles, taking
into account the investment risk constraints and liquidity needs.
WHEREAS, authority to manage the City of La Quinta's investment portfolio is
derived from the City Ordinance. Management responsibility for the investment
program is delegated to the City Treasurer, who shall establish and implement written
procedures for the operation of the City's investment program consistent with the
Investment Policy for Fiscal Year 201 1 /2012; and
WHEREAS, the Investment Policy will be adopted before the end of June of
each year and amended as considered necessary; and
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City
of La Quinta to adopt the Fiscal Year Investment Policy (Exhibit A).
" 012
Resolution No. 2011-
Investment Policy
Adopted: dune 21, 2011
Page 2 of
PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta
Redevelopment Agency, held on this day of
2011 by the following vote, to wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
TERRY HENDERSON, Chair
La Quinta Redevelopment Agency
ATTEST:
VERONICA J. MONTECINO, CMC, Agency Secretary
La Quinta Redevelopment Agency
(SEAL)
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
La Quinta Redevelopment Agency
013
EXHIBIT_ A
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2011/2012
Table of Contents
Section Topic
Executive Summary
General Purpose
11 Investment Policy
III Scope
IV Objectives
► Safety of Principal
► Provide Liquidity
► Yield A Risk -Based Market Rate Of Return
V Maximum Maturities
VI Prudence
VII Authority
Vlll Ethics and Conflicts of Interest
IX Authorized Financial Dealers and Institutions
► Broker/Dealers
► Financial Institutions
X Permissible Deposits and Investments
XI Investment Pools .
XII Payment and Custody
X111 Interest Earning Distribution Policy
XIV Internal Controls and Independent Auditors
XV Reporting Standards
XVI Financial Assets and Investment Activity Not Subject to this Policy
XVII Investment of Bond Proceeds
All Investment Advisory Board = City of La Quinta
XIX Investment Policy Adoption
Appendices Topic
Pape
2
4
4
4
4
6
6
7
7
7
8
13
13
13
14
15
15
15
16
16
Pape
A
Summary of Permissible Deposits and Investments
18
B
City of La Quinta Municipal Code Ordinance 2.70 - Investment Advisory Board
20
C
City of La Quinta Municipal Code Ordinance 3.08 - Investment of Moneys and Funds2i
D
Segregation of Major Investment Responsibilities
23
E
Listing of Approved Financial Institutions
24
F
Broker/Dealer Questionnaire and Certification
25
G
Request for Proposal for Professional Portfolio Management Firm
29
H
Permissible Investment Chart — Professional Portfolio Management Firm
35
1
Investment Management Process and Risk
36
J
Glossary
37
•.% 014.
1
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2011 /2012
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards that must be
followed in administering the City of La Quinta's deposits and investments.
The City's Investment Policy conforms to all state and local statutes and applies to all deposits
and investments of the City of La Quinta, City of La Quinta Redevelopment Agency, and the
City of La Quinta Financing and Housing Authorities (the"City").
It is the City's policy to deposit and invest public funds in a manner that shall provide:
► Safety of principal;
► Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated;
► A risk -based market rate of return.
It is the City's policy to hold securities and other investments until maturity. This buy -and -hold
policy shall not prevent the sale of a security to minimize loss of principal when an issuer or
backer suffers declining credit worthiness or when the liquidity needs of the portfolio require
that a security be sold.
Authority to manage the City's investment portfolio is derived from the City Ordinance.
Management responsibility for the investment program is delegated to the City Treasurer, who
shall establish and implement written procedures for the operation of the City's investment
program consistent with the Investment Policy. The Treasurer shall establish and implement a
system of internal controls to accdmplish the following objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to all City
management policies;
► Prevention or detection of errors and fraud;
► The accuracy and completeness of accounting records;
► Timely preparation of reliable financial information.
The System of Internal Controls developed by the City Treasurer shall be reviewed annually by the
independent auditors in connection with the annual audit of the City's Financial Statements.
The City Manager, City Treasurer and city employees involved in the City's banking and
investment process shall conduct the City's business in an ethical manner and refrain from any
activity or relationship that may be, or have the appearance of, a conflict of interest.
The City Treasurer maintains a listing of financial institutions which are approved for investment
purposes. All Broker/Dealers and financial institutions that provide investment services will be
subject to City Council approval.
The Treasurer will be permitted to invest only in the permissible deposits and investments
described in Section X and Appendix A up to the specified maximum allowable percentages
,,a 015
2
and/or dollar limitations and, where applicable, through the bid process requirements. Permissible
deposits and investments include, in general:
► FDIC -Insured Checking, Savings, and Sweep Accounts;
► Collateralized Bank Deposits;
► Certificates of Deposit;
► U.S. Government Agency Securities and Federal Government Securities;
► Prime Commercial Paper;
► Local Agency Investment Fund (LAIF);
► Money Market Mutual Funds;
► Corporate Notes;
► Professionally Managed Accounts.
The City's deposits and investments are generally limited to three years' maximum maturity.
However, the projected amount of funds not expected to be disbursed within five years may be
invested in U.S. Treasury bills, notes and bonds maturing between three and five years.
Additionally, funds may be invested for up to ten (10) years as further discussed in Section V.
The City's Investment Policy does not specify a single benchmark as a goal or target yield for a
rate of return on its investment portfolio. As a basis for comparison only, the Treasurer's
monthly report will display the rates of return on the three-month Bill, six-month Bill, and the one
and two-year U.S. Treasury Note, comparable -period rates for commercial paper, and the yield
for the State Treasurer's Local Agency Investment Fund (LAIF).
The Investment Policy shall be adopted by resolution of the La Quinta City Council on an annual
basis. The Investment Policy will be adopted before the end of June of each year.
This Executive Summary is only an overview of the City's Investment Policy. Reading this
summary does not constitute a complete review, which can only be accomplished by reviewing all
of the pages herein.
•.p 016
3
City of La Quinta
Statement of Investment Policy
July 1, 2011 through June 30, 2012
Adopted by the City Council on June 21, 2011
GENERAL PURPOSE
The general purpose of this document is to provide the rules and standards that must be followed
in administering the City of La Quinta's deposits and investments.
11 INVESTMENT POLICY
It is the policy of the City of La Quinta to deposit and invest public funds in a manner that shall
provide:
➢ Safety of principal;
➢ Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated;
➢ A risk -based market rate of return.
The Investment Policy conforms to all State and local statutes governing the investment of public
funds and sets forth the permissible deposits and investments of the City's funds and the
limitations thereon.
III SCOPE
Except as further detailed in Section XVII, this Investment Policy applies to all deposits and
investments of the City of La Quinta, City of La Quinta Redevelopment Agency and the City of La
Quinta Financing and Housing Authorities (hereafter referred to in this document as the "City").
These funds are reported in the City's Comprehensive Annual Financial Report (CAFR) and include
all funds within the following fund types:
► General
► Special Revenue
► Capital Projects
► Debt Service
► Enterprise
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
IV OBJECTIVES
The objectives of the City's investment activity, in order of priority and importance, are:
1. Safety of Principal
Safety of principal is the foremost objective of the City's investment program.
4 »p.. 017
Investments shall be undertaken in a manner that seeks to ensure the preservation of
principal of the overall portfolio in accordance with the permissible deposits and
investments.
The City shall endeavor to preserve its investment principal by making only permissible
deposits and investments, undertaken in a controlled manner to minimize the possibility of
loss or misappropriation through malfeasance or otherwise. Investments not backed by
the full faith and credit of the United States Government shall be diversified by allocating
assets between different types of permissible investments, maturities, and issuers as a
means to mitigate credit risk and interest rate risk.
A. Credit Risk is the risk of loss from the failure of the security issuer or backer.
Credit risk may be mitigated by:
► Limiting investments to investment grade securities as permitted in Section X;
► Diversifying the issuers of the securities in the investment portfolio so that
potential losses due to issuer failure or individual securities downgrades may be
minimized.
B. Interest Rate Risk is the risk that market values of securities in the portfolio will
decline due to changes in general interest rates. Interest rate risk may be mitigated
by:
► Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell securities
on the open market prior to maturity; and
► Investing operating funds primarily in shorter -term securities.
C. Liquidity Risk is the risk that a security cannot be liquidated because of its unique
features or structure or because it is thinly traded. Liquidity risk is not a material
issue for the City's portfolio because of the permissible deposits and investments
(see Section X) and because the City maintains a buy -and -hold policy and holds
securities and other investments to maturity. A discussion of the City's investment
process and risk is presented in Appendix I.
2. Provide Liquidity
The investment portfolio shall remain sufficiently liquid to meet all of the City's cash needs
that may be reasonably anticipated. This is accomplished by structuring the portfolio so
that sufficient liquid funds are available to meet anticipated demands. Furthermore, since
all possible cash needs cannot be anticipated the portfolio should be diversified and
consist of securities with active secondary or resale markets.
The City's policy is to hold securities and other investments to maturity. Accordingly,
securities shall not be sold prior to maturity with the following exceptions:
► A security with declining credit quality can be sold early to minimize loss of
principal;
► Unanticipated liquidity needs of the portfolio require that one or more securities be
sold.
,,p 018
5
3. Yield A Risk -Based Market Rate Of Return
The City's investment portfolio shall be structured with the objective of yielding a risk -
based market rate of return throughout budgetary and economic cycles. Return on
investment is less important than the safety and liquidity objectives described above..
The City's Investment Policy does not specify a single benchmark as a goal or target yield
for a rate of return on its investment portfolio. The portfolio's rates of return will be
influenced by several factors, including actions by the Federal Reserve Board, the
marketplace, and overall economic perceptions and conditions. These factors will not
affect yield during the securities' holding period because the City's buy -and -hold policy
fixes the securities' yield at.the time of purchase.
As a basis for comparison only, the Treasurer's monthly reports will display the rates of
return on the three-month Bill, six-month Bill, and one and two-year U.S. Treasury Note,
comparable -period rates for commercial paper, and the yield for the State Treasurer's
Local Agency Investment Fund (LAIF). The Treasurer may use these or any other
published rates of return that the Treasurer deems appropriate for comparison to the return
on the City's investment portfolio.
V MAXIMUM MATURITIES
It is the City's policy to hold securities and other investments until maturity, thus avoiding the risk
of market value fluctuations with overall market interest rates. This buy -and -hold policy shall not
prevent the sale of a security to minimize loss of principal when an issuer or backer suffers
declining credit worthiness or when the liquidity needs of the City require that a security be sold.
The buy -and -hold policy requires that the City's investment portfolio be structured so that
sufficient liquid funds are available from maturing investments and other sources to meet all
reasonably -anticipated cash needs. To meet anticipated cash needs, it is essential that the
Treasurer have reliable, diligently prepared cash flow projections.
Annually, the Treasurer shall project the amount of funds not expected to be disbursed within ten
years. For FY 2011 /2012, the amount of such funds is projected to be $30 million. Funds up to
that amount may be invested in U.S. Treasury, notes and bonds Local Agency Obligations, and
California Local Agency Obligations maturing between 3 and 10 years. For all other funds,
investments are limited to three years maximum maturity, with no more than 25% of surplus
funds invested in maturities exceeding two years and less than three years.
VI PRUDENCE
The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in
Probate Code Sections 16045 through 16054.
Section 16053 sets forth the terms of a prudent person which areas follows: "Investments shall
be made with judgment and care - under circumstances then prevailing - which persons of
prudence, discretion, and intelligence exercise. in the professional management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income to be derived."
q. 019
9
r VII AUTHORITY
Authority to manage the City's investment portfolio is derived from sections 35607 and 35608 of
City Ordinance 3.08.010. Management responsibility for the investment program is delegated to
the City Treasurer for a period of one year pursuant to the City Council's annual adoption of the
Investment Policy.
The City Treasurer shall establish written procedures for the operation of the investment program
consistent with the Investment Policy. Procedures should include reference to safekeeping, wire
transfer agreements, banking service contracts, and collateral/depository agreements. Such
procedures shall include explicit delegation of authority to persons responsible for investment
transactions. No person may engage in an investment transaction except as provided under the
terms of this Investment Policy and the procedures established by the City Treasurer. The City
Treasurer shall be responsible for all transactions undertaken and shall establish a system of
controls to regulate the activities of subordinate officials. The City Manager or his/her designee
shall acknowledge in writing all purchases and sales of investments prior to their execution by the
City Treasurer.
VIII ETHICS AND CONFLICTS OF INTEREST
The City Manager, City Treasurer and city employees involved in the City's banking and
investment process shall conduct the City's business in an ethical manner and refrain from any
activity or relationship that may be, or have the appearance of, a conflict of interest. Any
questionable activity or relationship shall be reported immediately and in compliance with the
procedures set forth in Section 1.40 — Conflicts of Interest and Acceptance of Gifts and other
Gratuities of the City of La Quinta Personnel Manual. Reporting must be made in accordance with
the personnel policies of the City and, until resolved, the officer or employee shall refrain from
participating in the City's business related to the matter.
The City Manager, City Treasurer and city employees may conduct personal business with banks,
brokers, and other financial institutions that are authorized to conduct business with the City
provided that the terms of the activity to the accountholder with the City are the same as those
that are available to the public in general.
IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Treasurer maintains a listing of financial institutions which are approved for direct
investment purposes. In addition a list will also be maintained of approved broker/dealers selected
by credit worthiness, who maintain an office in the State of California.
1. Broker/Dealers who desire to become bidders for direct investment transactions must
supply the City with the following:
► Current audited financial statements;
► Proof of Financial Industry Regulatory Authority (FINRA) Certification;
► Trading resolution;
► Proof of California registration;
► Resume of Financial broker; and
► Completion of the City of La Quinta Broker/Dealer questionnaire (see Appendix F)
which contains a certification of having read the City's Investment Policy.
7 "• 020
The City Treasurer shall evaluate the documentation submitted by the broker/dealer and
independently verify existing reports on file for any firm and individual conducting
investment related business.
The City Treasurer will also contact the following agencies during the verification process:
► Financial Industry Regulatory Authority (FINRA) Public Disclosure Report File (1-
800-289-9999).
► State of California Department of Corporations (1-916-445-3062).
The City Treasurer maintains a listing of financial institutions which are approved for
investment purposes. All Broker/Dealers and financial institutions that provide investment
services will be subject to City Council approval.
Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S. Treasury
Department regulations. Each mutual fund shall provide a prospectus and statement of additional
information.
2. Financial Institutions will be required to meet the following criteria in order to receive City
funds for deposit or investment (see Appendix E, "Listing of Approved Financial
Institutions"):
A. Insurance - Public Funds shall be deposited only in financial institutions having
accounts insured by the Federal Deposit Insurance Corporation (FDIC).
B. Collateral - The amount of the City's deposits or investments not insured by the
FDIC —shall be collateralized by securities with market values of 110%, or by
mortgages with market values 150%, of the amount of invested funds plus unpaid
interest earnings.
C. Disclosure - Each financial institution maintaining invested funds in excess of the
FDIC insured amount shall furnish the City a copy of the most recent Call Report.
The City shall not invest in excess of the FDIC insured amount in banking
institutions which do not disclose to the city a current listing of securities pledged
for collateralization in public monies.
X PERMISSIBLE DEPOSITS AND INVESTMENTS
Permissible deposits and investments are summarized below. A more comprehensive list is
included in Appendix A.
Permissible Investments and Limitations
(See Appendix A for Additional Information)
Maximum
Allocation
Maximum
Maturity
Restrictions
Checking 8 Savings Accounts FDIC Insured 8 Sweep Accounts
86% Portfolio
Current/
Sweep Account:On
U.S. Treasuries
Demand
and/or GSE's
Interest bearing active bank deposits — non FDIC insured collateralized by
60% Portfolio
Current 1
$40 million
110% of eligible securities
-
On Demand
per bank
8 1,.". 021
Permissible Investments and Limitations
Maximum
Maximum
(See Appendix A for Additional Information)
Allocation
Maturity
Restrictions
Certificates of Deposes -FDIC Insured
60% Portfolio
3 Years
including interest
per institution
<=$30,0000,000
U.S. Treasury Bills, Notes and Bonds,. and Government National
100% Portfolio
3 Years
maturing X10
Mortgage Association (GNMA) Securities
Yrs.
<=$30,0000,000
maturing 3-10
Local Agency Bonds/Califomia Local Agency Obligations
100% Portfolio
10 Years
Yrs.
Longterm
"A, A2, A' or
better
U.S. Government Agency Securities and Federal Government Securities
(except collateralized mortgage obligations (CMO's) or structured notes
which contain embedded rate options):
- Federal National Mortgage Association (FNMA)
$20.000,000
3 Years
- Federal Home Loan Bank Notes & Bonds (FHLB)
$25,000,000
3 Years
- Federal Farm Credit Bank (FFCB)
$30,000,000
3 Years
- Federal Home Loan Mortgage Corporation (FHLMC)
$20,000,000
3 years
Prime Commercial Paper including Temporary Liquidity Guarantee
15 % Portfolio
90 Da
$5,000,000 per
Program(TLGP)
issuer maximum.
Local Agency Investment Fund (LAIF)
30% Portfolio
Current /
$40 million
On Demand
per account.
Money market mutual funds regulated by the SEC that consist only of US
20% Portfolio
Curren /
Maintain $1 per
Treasury Securities or GSE's and maintain a par value of $1 per share
On Demand
share par value
$5,000,000 max
Corporate Notes
10%
3 Years
per issuer AA
rated or better
$10,000,000 max
Corporate Notes - Temporary Liquidity Guarantee Program (TLGP)
20%
3 Years
per issuer, AA
rated or better.
Requires
Professionally Managed Account
10%
3 Years
City Council -
Approved RFP
Long -Term Scale
S&P AAA, AA+, AA, AA-, A+, A
Moody's Aaa, Aa1, Aa2, Aa3, Al, A2
Fitch AAA, AA+, AA, AA-, A+, A
Checking, Savings, and Sweep Accounts — The City will only maintain checking, savings,
and sweep accounts with FDIC insured financial institutions. As authorized by the City
Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account
with a $50,000 target balance may be maintained in conjunction with the checking
account.
In addition, the Treasurer may investment in an interest bearing active deposit account as
approved Government Code Section 53632. The deposit account must be collateralized
with securities that are in accordance with Government Code Sections 53632.5(c). In
addition the market value of the collateralized securities must be maintained in accordance
with 53652 (a), and be held by a custodian in accordance with the requirements of
Government Code Section 53656. The proposition of the City's share of the deposit
account shall be determined in accordance with Government Code Section 53658. 022
9 11
2. Certificates of Deposit - As authorized in Government Code Section 53649, Certificates of
Deposit are fixed term investments which are required to be collateralized from 110% to
150% depending on the specific security pledged as collateral in accordance with
Government Code Section 53652. There are no portfolio limits on the amount or maturity
for this investment vehicle.
Collateralization will be required for Certificates of Deposits in excess of the FDIC insured
amount. The type of collateral is limited to City authorized investments. Collateral will
always be held by an independent third party from the institution that sells the Certificates
of Deposit to the City. Evidence of compliance with State Collateralization policies must
be supplied to the City and retained by the City Treasurer as follows:
A. Certificates of Deposits Insured by the FDIC: The City Treasurer may waive
collateralization of a deposit that is federally insured.
B. Certificates of Deposit in excess of FDIC Limits: The amount not federally insured
shall be 110% collateralized securities or 150% mortgages market value of that
amount of invested funds plus unpaid interest earnings.
The City's Investment Policy limits the percentage of Certificates of Deposit to 60% of the
portfolio.
➢ The City does not allow investments in CDAR's, or negotiable (secondary market)
certificates of deposit.
U.S. Treasury Bills, Notes and Bonds and Government National Mortgage Associations
(GNMA) securities — The City may invest in U.S. Treasury bills, notes, and bonds, and
GNMA securities directly issued and backed by the full faith and credit of the U.S.
Government. The City's Investment Policy limits investments in U.S. Treasury issues and
GNMA's to 100% of the portfolio.
➢ The City's Investment Policy does not allow investments in state indebtedness
4. U.S. Government Agency Securities and Federal Government Securities — The City may
invest in securities issued by U.S. Government instrumentalities and agencies (commonly
referred to as government sponsored enterprises or GSE's). These securities are not
backed by the full faith and credit of the U.S. Government. Publicly owned GSE's include
Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation
(FHLMC) and Student Loan Marketing Association (SLMA). Non -publicly owned GSE's
include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal
Land Bank (FLB) and Federal Intermediate Credit Bank (FICB).
The City's Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB
and FFCB. For Fiscal Year 2010/2011, the maximum face amount per issuer is $20
million for FNMA and FHLMC, $25 million for FHLB and $30 million for FFCB. In addition,
no more than 30% of the portfolio surplus may be invested in all GSE's combined with, a
maximum $10 million face amount per purchase.
Prime Commercial Paper - As authorized in Government Code Section 53601(g), a portion
of the City's portfolio may be invested in commercial paper of the highest rating (A-1 or P-
1) as rated by Moody's or Standard and Poor's. There are a number of other qualifications
10 023
regarding investments in commercial paper based on the financial strength of the
corporation and the size of the investment. The City's Investment Policy permits
investments in commercial paper with the following limitations:
A. Maximum 15% of the portfolio.
B. Maximum maturity of 90 days.
C. Maximum of $5 million per issuer.
These limitations are more restrictive than the State code allowed amounts of 25% of the
total portfolio with maturities up to 270 days with no per -issuer limitations.
The City is also permitted to invest in commercial paper issued under the FDIC Temporary
Liquidity Guarantee Program subject to the aforementioned commercial paper limitations.
6. State Treasurer's Local Agency Investment Fund (LAIF) - As authorized in Government
Code Section 16429.1 and by LAIF procedures, local government agencies are each
authorized to invest a maximum of $50 million per account in this investment program
administered by the California State Treasurer.
The City Treasurer may not invest more than $40 million per account in LAIF.
The City's investment in LAIF is allowable as long as the average maturity of its
investment portfolio does not exceed two years, unless specific approval is authorized by
the City Council. The City has two accounts with LAIF and limits investment to 30% of
the portfolio.
7. Money Market Mutual Funds - As authorized in Government Code Section 53601(k), local
agencies are authorized to invest in shares of beneficial interest issued by diversified
management companies (mutual funds) in an amount not to exceed 20% of the agency's
portfolio. There are a number of other qualifications and restrictions regarding allowable
investments in corporate notes and shares of beneficial interest issued by mutual funds
which include (1) attaining the highest ranking or the highest letter and numerical rating
provided by not less than two of the three largest nationally recognized rating services, or
(2) having an investment advisor registered with the Securities and Exchange Commission
with not less than five years' experience investing in the securities and obligations and
with assets under management in excess of five hundred million dollars ($500,000,000).
The City's Investment Policy only allows investments in mutual funds that are money
market funds maintaining a par value of $1 per share that invest in direct issues of the
U.S. Treasury and/or US Agency Securities with an average maturity of their portfolio not
exceeding 90 days and the City limits such investments to 20% of the portfolio.
8. Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies
may invest in corporate -notes. The notes must be issued by corporations organized and
operating in the United States or by depository institutions licensed by the United States
or any other state and operating in the United States. The City's Investment Policy allows
investment in corporate notes authorized by the Government Code with the following
limitations:
► Maturities shall not exceed three years from date of purchase.
► Eligible notes shall.be regularly quoted and traded in the marketplace.
► Eligible notes shall berated "AA"or better.
► Total investment shall not exceed 10% of the portfolio for non- Temporary
Liquidity Guarantee Program (TLGP) Corporate Notes and 20% of the portfolio for
11 024
TLGP Corporate Notes, and
► The maximum aggregate investment shall not exceed $5 million face amount for
each issuer.
This is more restrictive than the State code allowed amounts of 30% of the total portfolio
with maturities up to five years with no per -issuer limitations.
The City is also permitted to invest in corporate notes issued under the FDIC
Temporary Liquidity Guarantee Program subject to the aforementioned corporate note
limitations, except that corporate notes issued under the Temporary Liquidity Guarantee
Program or otherwise backed by the United States government shall be limited to 20% of
the portfolio and the maximum aggregate investment for such notes shall not exceed $10
million face amount for each issuer.
Professionally Managed Account(s) - The City Treasurer may place up to 10% of the
portfolio with a professional portfolio management firm ("PPMF"). The PPMF will be
approved by the City Council based upon the City Treasurer's recommendation pursuant to
completion of a request for proposal (RFP) as outlined in Appendix G. The PPMF shall
have:
(a) An established professional reputation for asset or investment management;
(b) Knowledge and working familiarity with State and Federal laws governing and
restricting the investment of public funds;
(c) Substantial experience providing investment management services to local public
agencies whose investment policies and portfolio size are similar to those of the
City;
(d) Professional liability (errors and omissions) insurance and fidelity bonding in such
amounts as are required by the City;
(e) Registration with the Securities and Exchange Commission under the Investment
Advisers Act of 1940.
Before engagement by the City and except as may be specifically waived or revised, the
PPMF shall commit to adhere to the provisions of the City's Investment Policy with the
following exceptions:
(f1 The PPMF may be granted the discretion to purchase and sell investment securities
in accordance with Appendix I of this Investment Policy;
(g) The PPMF is not required to adhere to the buy -and -hold policy of the City's
Investment Policy, and;
(h) The PPMF does not need City Manager or City Treasurer approval to make
permissible investments as detailed in column 8 of Appendix H of this Investment
Policy.
10. Local Agency Bonds and California Local Agency Obligations - The City may invest in
California local agency obligations pursuant to 56301(a) and 53301(e). 53601(a) pertains
to investing in bonds issued by a local agency, department, board, agency or authority of
the local agency. 53601(a) pertains to investing in bonds and other defined indebtedness
of a local agency or department, board, agency or authority of the local agency within the
State of California.
The City's Investment Policy limits investments in Local Agency Bonds and California
Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity.
In addition, the Agency obligations must be invested in the long term rating of A, A2, A or
better by S&P, Moody's or Fitch.
12 .�n 025
In the case of an initial public offering, including refinancings, the Treasurer may purchase
directly from the Bond Underwriter. If the case of secondary issues, the Treasurer will rely
on the approved Broker/Dealers.
XI INVESTMENT POOLS
There are three (3) types of investment pools:
► State -run pools (e.g., LAIF);
► Pools that are operated by a political subdivision where allowed by law and the political
subdivision is the trustee (e.g., County Pools);
► Pools that are operated for profit by third parties.
The City's Investment Policy permits investment only in pools authorized in Section X.
XII PAYMENT AND CUSTODY
The City shall engage qualified third party custodians to act in a fiduciary capacity to maintain
appropriate evidence of the City's ownership of securities and other eligible investments. Such
custodians shall disburse funds, received from the City for a purchase, to the broker, dealer or
seller only after receiving evidence that the City has legal, record ownership of the securities.
Even though ownership is evidenced in book -entry form rather than by actual certificates, this
procedure is commonly accepted as the delivery versus payment (DVP) method for the transfer of
securities. .
XIII INTEREST EARNING DISTRIBUTION POLICY
Interest earnings are generated from pooled investments and specific investments.
1. Pooled Investments - It is the general policy of the City to pool all available operating cash
of the City of La Quinta, La Quinta Redevelopment Agency and La Quinta Financing and
Housing Authorities and allocate interest earnings, in the following order, as follows:
A. Payment to the General Fund of an amount equal to the total annual bank service
charges as incurred by the general fund for all operating funds as included in the
annual operating budget.
B. Payment to the General Fund of a management fee equal to 5% of the annual
pooled cash fund investment earnings.
C. Payment to each fund of an amount based on the average computerized
daily cash balance included in the common portfolio for the earning period.
2. Specific Investments - Specific investments purchased by a fund shall incur all earnings
and expenses to that particular fund.
13 ••" 026
XIV INTERNAL CONTROLS AND INDEPENDENT AUDITOR
The City Treasurer shall establish a system of internal controls to accomplish the following
objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to management
policies;
► Prevention or detection of errors and fraud;
► The accuracy and completeness of accounting records; and
► Timely preparation of reliable financial information.
While no internal control system, however elaborate, can guarantee absolute assurance that the
City's assets are safeguarded, it is the intent of the City's internal control to provide a reasonable
assurance that management of the investment function meets the City's objectives.
The internal controls shall address the following:
1. Control of collusion. Collusion is a situation where two or more employees are working in
conjunction to defraud their employer.
2. Separation of transaction authority from accounting and record keeping. By separating the
person who authorizes or performs the transaction from the people who record or
otherwise account for the transaction, a separation of duties is achieved.
3. Custodial safekeeping. Securities purchased from any bank or dealer including appropriate
collateral (as defined by State Law) shall be placed with an independent third party for
custodial safekeeping.
4. Avoidance of physical delivery securities. Book entry securities are much easier to
transfer and account for since actual delivery of a document never takes place. Delivered
securities must be properly safeguarded against loss or destruction. The potential for
fraud and loss increases with physically delivered securities.
5. Clear delegation of authority to subordinate staff members. Subordinate staff members
must have a clear understanding of their authority and responsibilities to avoid improper
actions. Clear delegation of authority also preserves the internal control structure that is
contingent on the various staff positions and their respective responsibilities as outlined in
the Segregation of Major Investment Responsibilities appendices.
6. Written confirmation or telephone transactions for investments and wire transfers. Due to
the potential for error and improprieties arising from telephone transactions, all telephone
transactions shall be supported by written communications or electronic confirmations and
approved by the appropriate person. Written communications may be via fax if on
letterhead and the safekeeping institution has a list of authorized signatures. Fax
correspondence must be supported by evidence of verbal or written follow-up.
7. Development of a wire transfer agreement with the City's bank and third party
This agreement should outline the various controls, security provisions, and
responsibilities of each party making and receiving wire transfers.
The System of Internal Controls developed by the City, shall be reviewed annually by the
independent auditor in connection with the annual audit of the City's Financial Statements.
14 0.." 027
The independent auditor's letter on internal control over financial reporting and compliance as it
pertains to cash and investments, if any, shall be directed to the City Manager who will direct the
City Treasurer to provide a written response to the independent auditor's letter. The auditor's
letter, as it pertains, to cash and investment activities and the City Treasurer's response shall be
provided to the City's Investment Advisory Board for their consideration. Following the
completion of each annual audit, the independent auditor shall meet with the Investment Advisory
Board and discuss the auditing procedures performed and the review of internal controls for cash
and investment activities.
See Appendix D, "Segregation of Major Investment Responsibilities."
XV REPORTING STANDARDS
The City Treasurer shall submit a monthly Treasurers Report to the City Council and the
Investment Advisory Board that includes all cash and investments under the authority of the
Treasurer.
The Treasurer's Report shall summarize cash and investment activity and changes in balances and
include the following:
► A certification by the City Treasurer.
► A listing of purchases and sales/maturities of investments.
► Cash and Investments categorized by authorized investments, except for LAW
which will be provided quarterly and show yield and maturity.
► Comparison of month end actual holdings to Investment Policy limitations.
► Current year and prior year monthly history of cash and investments for trend
analysis.
► Balance Sheet.
► Distribution of cash and investment balances by fund.
► A year to date historical cash flow analysis and projection for the next six months.
► A two-year list of historical interest rates.
XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY
The City's Investment Policy does not apply to the following:
► Cash and Investments raised from Conduit Debt Financing;
► Funds held in trust in the City's name in pension or other post -retirement benefit
programs;
► Cash and Investments held in lieu of retention by banks or other financial
institutions for construction projects;
► Short or long term loans made to other entities by the City or Agency; and
Short term (Due to/from) or long term (Advances from/to) obligations made
either between the City and its funds or between the City and Agency.
XVII INVESTMENT OF BOND PROCEEDS
The City's Investment Policy shall govern bond proceeds and bond reserve fund investments.
California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in
accordance with bond indenture provisions which.shall be structured in accordance with the
City's Investment Policy.
15 ,.e.. 028
Arbitrage Requirement - The US Tax Reform Act of 1986 requires the City to perform arbitrage
calculations as required and return excess earnings to the US Treasury from investments of
proceeds of bond issues sold after the effective date of this law. These arbitrage calculations
may be contracted with an outside source to provide the necessary technical assistance to
comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will be kept
segregated from other funds and records will be kept in a fashion to facilitate the calculations.
The City's investment position relative to the new arbitrage restrictions is to continue pursuing
the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It
is the City's position to continue maximization of yield and to rebate excess earnings, if
necessary.
XVIII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA
The Investment Advisory Board (IAB) is a standing board composed of five members from the
public that are appointed by the City Council. Background information will be requested and
potential candidates must agree to a background check and verification. On an annual basis, in
conjunction with the Political Reform Act disclosure statutes, or at any time if a change in
circumstances warrants, each board member will provide the City Council with a disclosure
statement which identifies any matters that have a bearing on the appropriateness of that
member's service on the board. All board members shall report annually to the City Clerk on
Form 700, Statement of Economic Interests, any activities, interests, or relationships that may be,
or have the appearance of, a conflict of interest.
The IAB must meet at least quarterly, but usually meets monthly, to:
1. Review at least annually the City's Investment Policy and recommend appropriate
changes;
2.
3. Review monthly treasury report and note compliance with the Investment Policy and
adequacy of cash and investments for anticipated obligations;
4. Receive and consider other reports provided by the City Treasurer;
5. Meet with the independent auditor after completion of the annual audit of the City's
financial statements, and receive and consider the auditor's comments on auditing
procedures, internal controls and findings for cash and investment activities, and;
6. Serve as a resource for the City Treasurer on matters such as proposed investments,
internal controls, use or change of financial institutions, custodians, brokers and dealers.
The IAB will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting. See Appendix B: "Investment Advisory Board
Provisions".
XIX INVESTMENT POLICY ADOPTION
The City's Investment Policy will be reviewed annually by the City's Investment Advisory Board
and the City Treasurer. The Investment Advisory Board will forward the Investment Policy with
any revisions to the City Manager and City Attorney for their review and comment. A joint
16 029
meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City
Treasurer to review the Investment Policy and any comments prior to submission to the City
Council for their consideration.
The Investment Policy shall be adopted by resolution of the City Council annually before the end
of June of each year.
'�1r 030
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19
Appendix B
City of La Quinta Municipal Code
Chapter 2.70
INVESTMENT ADVISORY BOARD PROVISIONS
Sections:
2.70.010 General Rules Regarding Appointment.
2.70.020 Board meetings.
2.70.030 Board functions.
2.70.010 General rules regarding appointment
A. Except as set out below, see Chapter 2.06 for General Provisions.
B. The Investment Advisory Board (the"board") is a standing board composed of five (5)
members from the public that are appointed by city council.
C. Applicants for the board should have a background in finance, preferably with knowledge
and/or experience in markets, controls and accounting for securities. Background information will
be requested and potential candidates must agree to a background check and verification.
D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at
any time if a change in circumstances warrants, each board member will provide the City Council
with a disclosure statement which identifies any matters that have a bearing on the
appropriateness of that member's service on the board. Such matters may include, but are not
limited to, changes in employment, changes in residence, or changes in clients.
E. To promote continuity, the expiration of the terms of the members of the board shall be
staggered. The term of service is three years, with one or two terms expiring each year.
2.70.020 Board meetings.
The Board usually will meet monthly, but this schedule may be extended to quarterly
meetings upon the concurrence of the Board and the City Council. The specific meeting dates will
be determined by the Board Members and meetings may be called for on an as needed basis.
2.70.030 Board functions.
A. The principal functions of the Board are: (1) review at least annually the City's Investment
Policy and recommend appropriate changes; (2) review monthly Treasury Report and note
compliance with the Investment Policy and adequacy of cash and investments for anticipated
obligations; (3) receive and consider other reports provided by the City Treasurer; (Q meet with
the independent auditor after completion of the annual audit of the City's financial statements, and
receive and consider the auditor's comments on auditing procedures, internal controls, and findings
for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters
such as proposed investments, internal controls, use or change of financial institutions, custodians,
brokers and dealers.
B. The Board will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting.
20
p. 033
Appendix C
City of La Quinta Municipal Code
Chapter 3.08
INVESTMENT OF MONEYS AND FUNDS
Sections:
3.08.010 Investment of city moneys and deposit of securities.
3.08.020 Authorized investments.
3.08.030 Sales of securities.
3.08.040 City bonds.
3.08.050 Reports.
3.08.060 Deposits of securities.
3.08.070 Trust fund administration.
3.08.010 Investment of city moneys and deposit of securities.
Pursuant to, and in accordance with, and to the extent allowed by, Sections
53607 and 53608 of the Government Code, the authority to invest and reinvest
moneys of. the city, to sell or exchange securities, and to deposit them and provide for
their safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982)
3.08.020 Authorized investments.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to purchase, at their, original sale or after they have been issued, securities
which are permissible investments under any provision of state law relating to the
investing of general city funds, including but not limited to Sections 53601 and 53635 of
the Government Code, as said sections now read or may hereafter be amended, from
moneys in his custody which are not required for the immediate necessities of the city
and as he may deem wise and expedient, and to sell or exchange for other eligible
securities and reinvest the proceeds of the securities so purchased. (Ord. 2 § 1 (part),
1982)
3.08.030 Sales of Securities.
From time to time the city treasurer shall sell the securities in which city moneys have
been invested pursuant to this chapter, so that the proceeds may, as appropriate, be
applied to the purchase for which the original purchase money may have been designated
or placed in the city treasury. (Ord.2 § I (part),
3.08.040 City bonds.
Bonds issued by the city and purchased pursuant to this chapter may be cancelled
either in satisfaction of sinking fund obligations or otherwise if proper and appropriate;
provided, however, that the bonds may be held uncancelled and while so held may
resold. (Ord. 2 § 1 (part), 1982)
21
.,N 034
3.08.050 Reports.
The city treasurer shall make a monthly report to the city council of all investments
made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982)
3.08.060 Deposits of securities.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to deposit for safekeeping, the securities in which city moneys have been
invested pursuant to this chapter, in any institution or depository authorized by the terms
of any state law, including but not limited to Section 53608 of the Government Code as
it now reads or may hereafter be amended. In accordance with said section, the city
treasurer shall take from the institution or depository a receipt for the securities so
deposited and shall not be responsible for the securities delivered to and receipted for by
the institution or depository until they are withdrawn therefrom by the city treasurer.
(Ord. 2 § 1 (part), 1982
3.08.070 Trust fund administration.
Any departmental trust fund established by the city council pursuant to Section
36523 of the Government Code shall be administered by the city treasurer in accordance
with Section 36523 and 26524 of the Government code and any other applicable
provisions of law. (Ord. 2 § 1 (part), 1982)
22
'..V 035
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
Funntinn
Develop and Recommend Modifications
to City's Formal Investment Policy
Review City's Investment Policy
and Recommend City Council Action
Adopt Formal Investment Policy
Implement Formal Investment Policy
Review Financial Institutions & Select Investments
Acknowledge Investment Selections
Execute Investment transactions
Confirm Wires (if applicable)
Record Investment Transactions in City's
Accounting Records
Investment Verification (match broker confirmation
to City investment records)
Reconcile Investment Records
to Accounting Records and Bank Statements
Reconcile Investment Records
to Treasurers Report of Investments
Security of Investments at City
Security of Investments outside City
Review Internal Control Procedures
23
Appendix D
Responsible Parties
Investment Advisory Board
and City Treasurer
City Manager
and City Attorney
City Council
City Treasurer
City Treasurer
City Manager or his/her
designee
City Treasurer or City Manager
Accounting Manager or
Financial Services Assistant
Accounting Manager or
Financial Services Assistant
City Treasurer and Financial
Services Assistant
Financial Services Assistant
Accounting Manager
Accounting Manager or Senior
Secretary
Third Party Custodian
External Auditor
,..to 036
Appendix E
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services Wells Fargo Bank, Government Services,
Los Angeles, CA (Banking Services)
Rabobank N.A., Government Banking
Group, Roseville, CA (Collateralized Bank
Deposits)
2. Custodian Services Bank of New York/Mellon, Los Angeles,
CA
3. Deferred Compensation International City/County Management
Association Retirement Corporation
4. Broker/Dealer Services Banc of America Securities/ Merrill
Lynch, San Francisco, CA
Morgan Stanley, San Rafael, CA
CitiGroup, Costa Mesa, CA
5. Government Pool - State of California Local Agency
Investment Fund
City of La Quinta Account
La Quinta Redevelopment Agency
Account
6. Bond Trustees 1991 City Hall Revenue Bonds - US Bank
1991 RDA Project Area 1 US Bank
1992 RDA Project Area 2 - US Bank
1994 RDA Project Area 1 - US Bank
1998 RDA Project Area 1 &2 — US Bank
2001 RDA Project Area 1 — US Bank
2002 RDA Project Area 1 — US Bank
2003 RDA Project Area 1 — US Bank
2011 RDA Project Area 2 — US Bank
2011 Fin Auth Housing 1 &2 — US Bank
Assessment Districts — US Bank
No Changes to this listing may be made without City Council approval
24
•»a. 037
Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1. Name of
2.
3. Telephone: (_) (_ )
4. Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephone:
6. List all personnel who will be trading with or quoting securities to City employees (attach
resume)
Name:
Title:
Telephone:
7. Which of the above personnel have read the City's Investment Policy?
8. Which instruments are offered regularly by your local office? (Must equal 100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% CD's
% Mutual Funds
% Agencies (specify):
% Repos
% Reverse Repos
• CMO's
% Derivatives
% Stocks/Equities
% Other (specify):
9. References -- Please identify your most directly comparable public sector clients in our
geographical area.
Entity
`41
Entity
C38
Contact Contact
Telephone O Telephone (_)
Client Since Client Since
10. Have any of your clients ever sustained a loss on a securities transaction arising from a
misunderstanding or misrepresentation of the risk characteristics of the instrument? If so,
explain.
11. Has your firm or your local office ever been subject to a regulatory or state/ federal
agency investigation for alleged improper, fraudulent, disreputable or unfair activities
related to the sale of securities? Have any of your employees been so investigated? If
so, explain.
12. Has a client ever claimed in writing that you were responsible for an investment loss?
Yes No If yes, please provide action taken
Has a client ever claimed in writing that your firm was responsible for an investment
loss? Yes No If yes, please provide action taken
Do you have any current or pending complaints that are unreported to FINRA?
Yes No If yes, please provide action taken
Does your firm have any current, or pending complaints that are unreported to FINRA?
Yes No If yes, please provide action taken
13. Explain your clearing and safekeeping procedures, custody and delivery process.
Who audits these fiduciary responsibilities?
26
M. 039
Latest Audit Report Date
14. How many and what percentage of your transactions failed?
Last month? % $
Last year? % $
15. Describe the method your firm would use to establish capital trading limits for the City of
La Quinta.
16. Is your firm a member in the S.I.P.C. insurance program? Yes No
If yes, explain primary and excess coverage and carriers.
17. What portfolio information, if any, do you require from your clients?
18. What reports and transaction confirmations or any other research publications will the City
receive?
19.
20.
Does your firm offer investment training to your clients? Yes
Does your firm have professional liability insurance? Yes
If yes, please provide the insurance carrier, limits and expiration date.
No
- No
21.
Please list your FINRA/NASD Registration Number
22.
Do you have any relatives who work at the City of La Quinta?
Yes No If yes, Name and Department
23.
Do you maintain an office in California?
Yes
No
24.
Do you maintain an office in La Quinta or Riverside County?
Yes
No
25. Please enclose the following:
► Latest audited financial statements.
► Samples of reports, transaction confirmations and any other research/publications the
City will receive.
► Samples of research reports and/or publications that your firm regularly provides to
clients.
► Complete schedule of fees and charges for various transactions.
27
.,.M. 040
'CERTIFICATION'
I hereby certify that I have personally read the Statement of Investment Policy of the City of La
Quints, and have implemented reasonable procedures and a system of controls designed to
preclude imprudent investment activities arising out of transactions conducted between our firm
and the City of La Quinta. All sales personnel will be routinely informed of the City's investment
objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the
City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable
risks associated with financial transactions conducted with our firm.
By signing this document the City of La Quinta is authorized to conduct any and all background
checks.
Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of
my knowledge.
Broker Representative
Date Title
Sales Manager and/or Managing Partner'
Date
Title
m
p 041
Appendix G
Request for Proposals
Professional Portfolio Management Firm
City of La Quinta, CA
The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the
provision of a discretionary investment management services for City of La Quinta, CA. The
portfolio to be managed of the invested assets is will be approximately 10% of the City's
investment portfolio and will be invested between 0 — 3 years.
The investment of City of La Quinta, CA's funds is guided by the applicable State statutes and
the City of La Quinta, CA's investment policy. A copy of the investment policy is attached for
your information.
Questions regarding this RFP should be directed to:
Name:
Title:
City of:
Address:
City, State, Zip Code:
Phone Number:
John M. Falconer
Finance Director/Treasurer
La Quinta, CA
P.O. Box 1504
La Quinta, CA 92247-1504
(760)777-7150
I. CRITERIA FOR EVALUATION AND SELECTION
■ Experience of the firm in providing services to public sector entities of similar size
and with similar investment objectives;
■ Professional experience and qualifications of the individuals assigned to the
account;
■ Portfolio management resources, investment philosophy and approach;
■ Responsiveness to the RFP, communicating an understanding of the overall
program and services required;
■ Reporting capabilities;
■ Fees.
IL SELECTION TIMETABLE
A. [Month, Day and Year] Proposals due by [Time] PST.
B. [Month, Day and Year] Proposals evaluated: to be determined
C. [Month, Day and Year] [City of La Quinta, CA] [Board/Council] approves selection
and awards contract.
III. FORMAT FOR PROPOSALS
Please format your response to this RFP in the following manner:
A. Organization
29 ,.N. 042
1. Describe your organization, date founded, ownership and other business
affiliations. Provide number and location of affiliated offices. Specify the number
of years your organization has provided investment management service.
2. Describe your firm's revenue sources (e.g., investment management, institutional
research, etc.) and comment on your firm's financial condition.
3. Within the past three years, have there been any significant developments in your
organization (e.g., changes in ownership, new business ventures)? Do you expect
any changes in the near future?
4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation.
involving your organization, any officer, or employee at any time in the last ten
years.
5. Describe the firm's fiduciary liability and/or errors and omissions insurance.
coverage. Include dollar amount of coverage.
B. Personnel
1. Identify the number of professionals employed by your firm by classification.
2. Provide an organization chart showing function, positions, and titles of all the
professionals in your organization.
3. Provide biographical information on investment professionals that will be involved
in the decision -making process for our portfolio, including number of years at your
firm. Identify the person who will be the primary portfolio manager assigned to the
account.
4. Describe your firm's compensation policies for investment professionals and
address any incentive compensation programs.
C. Assets Under Management
1. Summarize your institutional investment management asset totals by category for
your latest reporting period in the following table:
Other Restrictive
Number Operating Funds Number of Funds
of Clients Clients
Governmental $ $
Governmental Pension $ N/A N/A
Non Governmental $ N/A N/A
Pension
30 043
Corporate $ N/A N/A
High Net Worth Client $ N/A N/A
Endowmental/Foun- $ N/A N/A
dation
2. Provide the number of separate accounts whose portfolios consist of operating
funds.
3. List in the following table the percentage by market value of aggregate assets
under all governmental accounts under management for your latest reporting
period:
Type of Asset
U.S. Treasury securities
Federal Agency obligations
Corporate securities rated AAA -AA
Corporate securities rated A
Corporate securities rated BBB or
lower
Other
(specify ►
Percent by Market
Value
4. Describe the procedures that your firm has in place to address the potential or
actual credit downgrade of an issuer and to disclose and advise a client of the
situation.
5. Provide data on account/asset growth over the past five years. Indicate the
number of government accounts gained and the number of government accounts
lost.
6. List your five governmental largest clients. Identify those that are exclusively
operating fund relationships and/or those that are other relationships (e.g., bond
fund, retirement fund).
7. Provide,a copy of the firm's Form ADV, Parts I and II (including all schedules).
8. Provide proof of. State of California Registration, if your firm is not eligible for SEC
registration.
9. Provide a sample contract for services.
31 .,•N 044
J
D. Philosophy/Approach
1. Describe your firm's investment philosophy for public clients, including your firm's
philosophy regarding average duration, maturity, investment types, credit quality,
and yield.
2. Describe in detail your investment process, as you would apply it to City of La
Quinta, CA's portfolio.
3. What are the primary strategies for adding value to portfolios?
4. Describe the process you would recommend for establishing the investment
objectives and constraints for this account.
5. Describe in detail your process of credit risk management, including how you
analyze credit quality, monitor credits on an ongoing basis, and report credit to
governmental accounts.
6. Describe your firm's trading methodology.
7. Describe your firm's decision -making process in terms of structure, committees,
membership, meeting frequency, responsibilities, integration of research ideas, and
portfolio management.
8. Describe your research capabilities as they would pertain to governmental
accounts. What types of analysis do you use?
9. Describe the firm's approach to managing relationships with the broker -dealer
community.
E. Portfolio Management
1. Are portfolios managed by teams or by one individual?
2. What is the average number of accounts handled per manager?
3. Which professional staff member will be the primary client contact for City of La
Quinta, CA?
4. How frequently are you willing to meet with us?
5. Describe procedures used to ensure that portfolios comply with client investment
objectives, policies, and bond resolutions.
F. Fees Charged
1. Please include a copy of your firm's fee schedule applicable to this RFP.
2. Identify any expenses that would not be covered through this fee structure and
would be required in order to implement the firm's program.
32
«. 045
3. Is there a minimum annual fee?
G. Performance Reporting
1. Please report on all accounts under $100 million.
2., Please provide performance history for governmental accounts for the last five
years.
3. Please provide risk measurements for governmental accounts for the last five
years.
4. Indicate whether your returns are calculated and compiled in accordance with
the Association for Investment Management and Research (AIMR/CFA Institute)
standards.
5. Do your reports conform to the State of California reporting standards? Are you
willing to customize your reports to meet our specifications?
6. How will you notify us of investment transactions?
7. Are confirmations of investment transactions sent directly by the broker/dealer to
the client?
8. Do your reports include rating information on investments which is required by
GASB 40?
H. References
Provide a list of at least five (5) client references in California. References should be
public agencies with portfolio size and investment objectives similar to City of La Quinta,
CA. Include length of time managing the assets, contact name, and phone number.
Insurance Requirements
Exhibit A defines the insurance requirements that will need to be met prior to the
[Board/Council]'s approval of any agreement for services.
J. Submittal of proposals
1. Seven (7) copies: of the proposal shall be submitted in a sealed envelope bearing
the caption RFP for (City of La Quinta, CA) and addressed to:
City of La Quinta, CA
P.O. Box1504
La Quinta, CA 92247-1504
Attention: John Falconer, Finance Director/Treasurer
2. Proposal must be received no later than [Time] PST on [Month, Day, and Year].
33 „a e46
Proposals should be verified before submission. The City of La Quinta, CA shall
not be responsible for errors or omissions on the part of the respondent in
preparation of a proposal. The City of La Quinta, CA reserves the right to reject
any and all proposals, to wave any irregularities, or informalities in the
proposals, and to negotiate modifications to any proposal.
Enclosures: Investment Policy
Treasurers Report
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Appendix I
Investment Management Process and Risk
Except as provided for in Section 27000.3, Government Code Section 53600.3 declares as a trustee
each person, treasurer, or governing body authorized to make investment decisions on behalf of local
agencies. As trustees are subject to the prudent investor standard. These persons shall act with care,
skill, prudence, and diligence under the circumstances then prevailing when investing, reinvesting,
purchasing, acquiring, exchanging, selling, and managing funds. Section 53600.5 further stipulates
that the primary objective of any person investing public funds is to safeguard principal; secondly, to
meet liquidity needs of the depositor; and lastly, to achieve a return or yield on invested funds
(Government Code Section 27000.5 specifies the same objectives for county treasurers and board of
supervisors).
Risk is inherent throughout the investment process. There is investment risk associated with any
investment activity and opportunity risk related to inactivity. Market risk is derived from exposure to
overall changes in the general level of interest rates while credit risk is the risk of loss due to the failure
of the insurer of a security. The market value of a security varies inversely with the level of interest
rates. If an investor is required to sell an investment with a five percent yield in a comparable seven
percent rate environment, that security will be sold at a loss. The magnitude of that loss will depend on
the amount of time until maturity.
Purchasing certain allowable securities with a maturity of greater than five years requires approval of
the governing board (see Government Code Section 53601). Part of that approval process involves
assessing and disclosing the risk and possible volatility of longer -term investments
Another element of market risk is liquidity risk. Instruments with unique call features or special
structures, or those issued by little known companies, are examples of "story bonds" and are often
thinly traded. Their uniqueness often makes finding prospective buyers in a secondary market more
difficult and, consequently, the securities' marketability and price are discounted. However, under
certain market conditions, gains are also possible with these types of securities.
Default risk represents the possibility that the borrower may be unable to repay the obligation as
scheduled. Generally, securities issued by the federal government and its agencies are considered the
most secure, while securities issued by private corporations or negotiable certificates of deposit issued
by commercial banks have a greater degree of risk. Securities with additional credit enhancements,
such as bankers acceptances, collateralized repurchase agreements and collateralized bank deposits are
somewhere between the two on the risk spectrum.
The vast majority of portfolios are managed within a buy and hold policy. Investments are purchased
with the intent and capacity to hold that security until maturity. At times, market forces or operations
may dictate swapping one security for another or selling a security before maturity. Continuous analysis
and fine tuning of the investment portfolio are considered prudent investment management. [... I
The Government Code contains specific provisions regarding the types of investments and practices
permitted after considering the broad requirement of preserving principal and maintaining liquidity before
seeking yield. These provisions are intended to promote the use of reliable, diverse, and safe investment
instruments to better ensure a prudently managed portfolio worthy of public trust.
Chapter 11. Fund Management
Local Agency Investment Guidelines 2010 Issued by California Debt and Investment Advisory Commission
"- 049
�R
Appendix J
GLOSSARY
(Adopted from the Municipal Treasurers Association)
The purpose of this glossary is to provide the reader of the City of La Quinta investment
policies with a better understanding of financial terms used in municipal investing.
AGENCIES: Federal agency securities and/or
Government -sponsored enterprises.
ASKED: The price at which securities are offered.
BANKERS' ACCEPTANCE (BA): A draft or bill or
exchange accepted by a bank or trust company.
The accepting institution guarantees payment of
the bill, as well as the issuer.
BID: The price offered by a buyer of securities.
(When you are selling securities, you ask for a
bid.) See Offer.
BROKER: A broker brings buyers and sellers
together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit
with a specific maturity evidenced by a
certificate. Large -denomination CD's are typically
negotiable.
COLLATERAL: Securities, evidence of deposit or
other property which a borrower pledges to
secure repayment of a loan. Also refers to
securities pledged by a bank to secure deposits of
public monies.
COMMERCIAL PAPER: Short-term unsecured
promissory notes issued by a corporation to raise
working capital. These negotiable instruments
are purchased at a discount to par value or at par
value with interest bearing. Commercial paper is
issued by corporations such as General Motors
Acceptance Corporation, IBM, Bank America, etc.
COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR): The official annual report for the City.of
La Quinta. It includes five combined statements
for each individual fund and account group
prepared in conformity with GAAP. It also
includes supporting schedules necessary to
demonstrate compliance with finance -related
legal and contractual provisions, extensive
introductory material, and a detailed Statistical
Section.
CONDUIT FINANCING: A form of Financing in
which a government or a government agency
lends its name to a bond issue, although it is
acting only as a conduit between a specific project
and bond holders. The bond holders can look only
to the revenues from the project being financed
for repayment and not to the government or
agency whose name appears on the bond.
COUPON: (a) The annual rate of interest that a
bond's issuer promises to pay the bondholder on
the bond's face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts as
a principal in all transactions, buying and selling
for his own account.
DEBENTURE: A bond secured only by the general
credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two
methods of delivery of securities: delivery versus
payment and delivery versus receipt. Delivery
versus payment is delivery of securities with an
exchange of money for the securities. Delivery
versus receipt is delivery of securities with an
exchange of a signed receipt for the securities.
DERIVATIVES: (1) Financial instruments whose
return profile is linked to, or derived from, the
movement of one or more underlying index or
security, and may include a leveraging factor, or
(2) financial contracts based upon notional
amounts whose value is derived from an
underlying index or security (interest rates, foreign
exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price
of a security and its maturity when quoted at
37 050
lower than face value. A security selling below
original offering price shortly after sale also is
considered to be at a discount.
DISCOUNT SECURITIES: Non -interest bearing
money market instruments that are issued a
discount and redeemed at maturity for full face
value, e.g., U.S. Treasury Bills.
El
DIVERSIFICATION: Dividing investment funds
among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of the
Federal government set up to supply credit to
various classes of institutions and individuals,
e.g., S&L's, small business firms, students,
farmers, farm cooperatives, and exporters. 5
1. FNMAs (Federal National Mortgage
Association) - Like GNMA was chartered
under the Federal National Mortgage
Association Act in 1938. FNMA is a federal
corporation working under the auspices.of the
Department of Housing and Urban
Development (HUD). It is the largest single
provider of residential mortgage funds in the
United States. Fannie Mae, as the corporation
is called, is a private stockholder -owned
corporation. The corporation's, purchases
include a variety of adjustable mortgages and
second loans, in addition . to fixed-rate
mortgages. FNMA's securities are also highly
liquid and are widely accepted. FNMA
assumes and guarantees that all security
holders will receive timely payment of
principal and interest.
2. FHLBs (Federal Home Loan Bank Notes and
Bonds) - Issued by the Federal Home Loan
Bank System to help finance the housing
industry. The notes and bonds provide
liquidity and home mortgage credit to savings
and loan associations, mutual savings banks,
cooperative banks, insurance companies, and
mortgage -lending institutions. They are
issued irregularly for various maturities. The
minimum denomination is $5,000. The notes
are issued with maturities of less than one
year and interest is paid at maturity.
3. FLBs (Federal Land Bank Bonds) - Long-term
38
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is $1,000. They carry
semi-annual coupons. Interest is calculated on
a 360-day, 30 day month basis.
FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and the
national agricultural industry. They are issued
monthly with three- and six-month maturities.
The FFCB issues larger issues (one to ten
year) on a periodic basis. These issues are
highly liquid.
FICBs (Federal Intermediate Credit Bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually issued
monthly in minimum denominations of $3,000
with a nine -month maturity. Interest is
payable at maturity and is calculated on a 360-
day, 30-day month basis.
6. FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored entity
established in 1970 to provide a secondary
market for conventional home mortgages.
Mortgages are purchased solely from the
Federal Home Loan Bank System member
lending institutions whose deposits are insured
by agencies of the United States Government.
They are issued for various maturities and in
minimum denominations of $10,000. Principal
and interest is paid monthly. Other federal
agency issues are Small Business
Administration notes (SBA's), Government
National Mortgage Association notes
(GNMA's), Tennessee Valley Authority notes
(TVA's), and Student Loan Association notes
(SALLIE-MAE's).
FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC): A federal agency that insures bank
deposits, currently up to $250,000 per deposit
through December 31, 2013.
FEDERAL FUNDS RATE: The rate of interest at
which Fed funds are traded. This rate is currently
0 051
pegged by the Federal Reserve through open -
market operations.
FEDERAL HOME LOAN BANKS (FHLB):
Government sponsored wholesale banks
(currently 12 regional banks) which lend funds
and provide correspondent banking services to
member commercial banks, thrift institutions,
credit unions and insurance companies. The
mission of the FHLBs is to liquefy the housing
related assets of its members who must purchase
stock in their district Bank.
FEDERAL OPEN MARKET COMMITTEE (FOMC):
Consists of seven members of the Federal
Reserve Board and five of the twelve Federal
Reserve Bank Presidents. The President of the
New York Federal Reserve Bank is a permanent
member, while the other Presidents serve on a
rotating basis. The Committee periodically meets
to set Federal Reserve guidelines regarding
purchases and sales of Government Securities in
the open market as a means of influencing the
volume of bank credit and money.
FEDERAL RESERVE SYSTEM: The central bank of
the United States created by Congress and
consisting of a seven member Board of Governors
in Washington, D.C., 12 regional banks and about
5,700 commercial banks that are members of the
system.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed
by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations,
and other institutions. Security holder is
protected by full faith and credit of the U.S.
Government. Ginnie Mae securities are backed
by the FHA, VA or FMHM mortgages. The term
"pass-throughs" is often used to describe Ginnie
Maes.
LAIF (Local Agency Investment Fund) - A special
fund in the State Treasury which local agencies
may use to deposit funds for investment. There
is no minimum investment period and the
minimum transaction is $5,000, in multiples of
$1,000 above that, with a maximum balance of
$50,000,000 for any agency. The City is
restricted to a maximum of ten transactions per
39
month. It offers high liquidity because deposits
can be converted to cash in 24 hours and no
interest is lost. All interest is distributed to those
agencies participating on a proportionate share
basis determined by the amounts deposited and
the length of time they are deposited. Interest is
paid quarterly. The State retains an amount for
reasonable costs of making the investments, not
to exceed one-half of one percent of the earnings.
LIQUIDITY: A liquid asset is one that can be
converted easily and rapidly into cash without a
substantial loss of value. In the money market, a
security is said to be liquid if the spread between
bid and asked prices is narrow and reasonable size
can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP):
The aggregate of all funds from political
subdivisions that are placed in the custody of the
State Treasurer for investment and reinvestment
MARKET VALUE: The price at which a security is
trading and could presumably be purchased or
sold.
MASTER REPURCHASE AGREEMENT: A written
contract covering all future transactions between
the parties to repurchase --reverse repurchase
agreements that establishes each party's rights in
the transactions. A master agreement will often
specify, among other things, the right of the
buyer -lender to liquidate the underlying securities
in the event of default by the seller -borrower.
MATURITY: The date upon which the principal or
stated value of an investment becomes due and
payable
MONEY MARKET: The market in which short-term
debt instruments (bills, commercial paper,
bankers' acceptances, etc.) are issued and traded.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other securities in
the open market by the New York Federal Reserve
Bank as directed by the FOMC in order to
influence the volume of money and credit in the
economy. Purchases inject reserves into the
bank system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve's most
important and most flexible monetary policy tool.
PORTFOLIO: Collection of all cash and securities
under the direction of the City Treasurer,
including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity and positions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC) -registered securities
broker -dealers, banks and' a few unregulated
firms.
QUALIFIED PUBLIC DEPOSITORIES: A financial
institution which.does not claim exemption from
the payment of any sales or compensating use or
ad valorem taxes under the laws of this state,
which has segregated for the benefit of the
commission eligible collateral having a value of
not less than its maximum liability and which has
been approved by the Public Deposit Protection
Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its current
market price. This may be the amortized yield to
maturity on a bond the current income return.
REPURCHASE AGREEMENT (RP OR REP0): A
holder of securities sells these securities to an
investor with an agreement to repurchase them
at a fixed price on a fixed date. The security
"buyer" in effect lends the "seller" money for, the
period of the agreement, and the terms of the
agreement are structured to compensate him for
this. Dealers use RP extensively to finance their
positions. Exception: When the Fed is said to be
doing RP, it is lending money that is increasing
bank reserves.
REVERSE REPURCHASE AGREEMENTS (RRP or
RevRepo) - A holder of securities sells these
securities to an investor with an agreement to
repurchase them at a fixed price on a fixed date.
The security"buyer" in effect lends the"seller"
money for the period of the agreement, and the
terms of the agreement are structured to
compensate him for this. Dealers use RRP
extensively to finance their positions. Exception:
When the Fed is said to be doing RRP, it is lending
money that is increasing bank reserves.
SAFEKEEPING: A service to customers rendered
by banks for a fee whereby securities and
valuables of all types and descriptions are held in
the bank's vaults for protection.
SECONDARY MARKET: A market made for the
purchase and sale of outstanding issues following
the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency
created by Congress to protect investors in
securities transactions by administering securities
legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by
Government Sponsored Enterprises (FHLB, FNMA,
SLMA, etc.) and Corporations which have
imbedded options (e.g., call features, step-up
coupons, floating rate coupons, derivative -based
returns) into their debt structure. Their market
performance is impacted by the fluctuation of
interest rates, the volatility of the imbedded
options and shifts in the shape of the yield curve.
SURPLUS FUNDS: Section 53601 of the California
Government Code defines surplus funds as any
money not required for immediate necessities of
the local agency. The City has defined immediate
necessities to be payment due within one week.
TREASURY BILLS: A non -interest bearing discount
security issued by the U.S. Treasury to finance the
national debt. Most bills are issued to mature in
three months, six months or one year.
TREASURY BONDS: Long-term coupon -bearing
U.S. Treasury securities issued as direct
obligations of the U.S. Government and having
initial maturities of more than 10 years.
TREASURY NOTES: Medium -term coupon -bearing
U.S. Treasury securities issued as direct
M
053
obligations of the U.S. Government and having
initial maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and
Exchange Commission requirement that member
firms as well as nonmember broker -dealers in
securities maintain a maximum ratio of
indebtedness to liquid capital of 15 to 1; also
called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm,
including margin loans and commitments to
purchase securities, one reason new public issues
are spread among members of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.
UNIFORM PRUDENT INVESTOR ACT: The State
of California has adopted this Act. The Act
contains the following sections: duty of care,
diversification, review of assets, costs,
compliance determinations, delegation of
investments, terms of prudent investor rule, and
application.
YIELD: The rate of annual income return on an
investment, expressed as a percentage. (a)
INCOME YIELD is obtained by dividing the current
dollar income by the current market price for the
security. (b) NET YIELD or YIELD TO MATURITY
is the current income yield minus any premium
above par or plus any discount from par in
purchase price, with the adjustment spread over
the period from the date of purchase to the date
of maturity of the bond.
U o 54
41
COUNCIL/RDA MEETING DATE: June 21, 2011
ITEM TITLE: Approval of an Assignment and Assumption
Agreement by and between CP Development La Quinta
and La Quinta Retirement Residence Limited Partnership
for Property Located at the Southeast Corner of
Washington Street and Miles Avenue Pursuant to the
Disposition and Development Agreement
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 5
STUDY SESSION:
PUBLIC HEARING:
Approve an Assignment and Assumption Agreement by and between CP Development
La Quinta, LLC, and La Quinta Retirement Residence Limited Partnership for property
located at the southeast corner of Washington Street and Miles Avenue (Attachment
1).
FISCAL IMPLICATIONS:
None for this action.
BACKGROUND AND OVERVIEW:
On December 18, 2003, the La Quinta Redevelopment Agency entered into a
Disposition and Development Agreement ("DDA") with CP Development, La Quinta,
LLC, for the sale and development of approximately 50 acres located at the southeast
corner of Washington Street and Miles Avenue. The scope of development includes a
multi -use commercial and residential project consisting of the following components: a
medical facility; two restaurants; a suites hotel; resort -style condominium/casitas
development; and a residential component that includes 40 affordable homes. To
date, the following components have been constructed: a Homewood Suites Hotel; the
Eisenhower George and Julia Argyros Health Center; 44 casitas units; and Applebee's
Restaurant.
CP Development has been exploring various options for the residential lot ("Lot 7"),
and has negotiated a sales agreement with La Quinta Retirement Residence Limited
Partnership for the 9.45 acre parcel. This sale requires City and Agency consent to
assign all DDA and Development Agreement ("DA") rights and obligations specific to
,p 055
this parcel to La Quinta Retirement Residence Limited.
Amendments to the DDA and DA, which will include a project description, scope, and
schedule of performance, will come before the Agency Board review at a later date.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Approve an Assignment and Assumption Agreement by and between CP
Development La Quinta, LLC, and La Quinta Retirement Residence Limited
Partnership for property located at the southeast corner of Washington Street
and Miles Avenue; or
2. Do not Approve an Assignment and Assumption Agreement by and between CP
Development La Quinta, LLC, and La Quinta Retirement Residence Limited
Partnership for property located at the southeast corner of Washington Street
and Miles Avenue; or
3. Provide staff with alternative direction.
Respectfully submitted,
Debbie Powell
Economic Development Project Manager
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachment: 1. Assignment and Assumption Agreement
C.56
ATTACHMENT
RECORDINO REQUESTED BY
AND WHEN RECORDED MAIL TO:
La Quints Redevelopment Agency
78-495 Calle Tampico
La Quints, CA 92253
Attn: Executive Director
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ( "Assigument") is entered into this
day of June, 2011 by and between CP DEVELOPMENT LA QUINTA, LLC, a
California limited liability company ("Cg') and LA QUINTA RETIREMENT
RESIDENCE LIMITED PARTNERSHIP, a Washington Limited partnership ("LQRR'l
with reference to the following:
A. WHEREAS, CP is the owner in fee simple of certain real property located '
at the southeast corner of Miles Avenue and Washington Street in the City of La Quinta,
California, as more particularly described on Exbibit. "A" attached hereto and
incorporated herein by this reference (the "Subject Pronerty").
B. WHEREAS, CP acquired the Subject Property and certain other adjacent
real property from the La Quints. Redevelopment Agency, a public body, corporate and
politic ("AA") pursuant to the terms of that certain Disposition and Development
Agreement dated on or about December 18, 2003, and as further amended over time
through a series of six amendments on or about the following dates: October 28, 2004;
December 7, 2004; November 2, 2005; October 20, 2006; August 23, 2007; and March
19, 2008 (hereinafter collectively referred to as the "DDA'),
C. WHEREAS, concurrently with the execution of the DDA, the City of La
Quints C'!g ' and CP entered into that certain Development Agreement, which 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, and amended
by 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 by 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 by 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-Q303530
(hereinafter collectively referred to as the "DA").
D. WHEREAS, LQRR and CP have entered into that certain Offer and
Contract to Purchase Real Property dated January 18, 2011, as amended by that certain
WMMFST.3UPCIWO008"6,J 01W 'I-
M G57
First Amendment to Offer and Contract to Purchase Real Estate dated June 9, 2011,
wherein LQRR agreed to purchase and CP agreed to sell the Subject Property, and CP
agreed, concurrently with such sale, to transfer and assign to LQRR all of CP's rights and
responsibilities under the DDA and the DA with respect to the Subject Property.
E. VgMEAS, prior to CP effecting any such sale or assignment, the
Agency and the City require that LQRR and CP execute this Assignment to memorialize
the acknowledgement by LQRR of the rights and development obligations of the Subject
Property as further detailed in the DDA and DA and to provide for the assumption of
such obligations.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. CP Transfer to LOIiR
2.
a. CP hereby assigns to LQRR all of CP's rights and responsibilities under
the terms of the DDA and the DA with respect to the Subject Property
from and after the Effective Date of this Assignment.
b. LQRR hereby accepts the foregoing assignment and agrees to be bound by
the terms of the DDA and the DA with respect to the Subject Property
from and after the Effective Date.
c. The parties hereto acknowledge and agree that LQRR shall not be
responsible for any of the obligations of the DDA or the DA which arise
from ownership of the Subject Property existing prior to the Effective
Date hereof. As such, a default by CP under either the DDA or the DA
with respect to the Subject Property prior to the Effective Date hereof shall
not be deemed a default by LQRR. A default by LQRR under either the
DDA or the DA with respect to the Subject Property on or after the
Effective Date hereof shall not be deemed a default by CP, and LQRR
shall indemnify, defend and hold harmless CP from any and all losses,
claims or liability, including without limitation reasonable attorneys' fees
and costs, arising from any such default by LQRR.
LQRR intends to construct on the Subject Property a senior congregate care
residential facility including both independent living and assisted living units.
LQRR acknowledges and agrees that (i) prior to LQRR commencing such
development on the Subject Property, LQRR shall be required to process through
the City amendments to the DDA, DA, and Center Point Specific Plan (SP2001-
055) that permit the development contemplated on the Subject Property by LQRR
(collectively, the "Proposed Amendments"); (ii) the Agency, City, and Planning
Commission (as applicable) will review and consider all of the Proposed
Amendments in their sole and absolute discretion; and (iii) the Agency's and
W02-WEST.3DPC7 -2-
City's consent to this Assignment does not constitute any approval or
precommitment to approve of any of the Proposed Amendments.
3. Effective Date. This Assignment shall be deemed effective (the "Effective
Date") upon the last of the following events to occur: (a) the written consent to
this Assignment by the City with respect to the assigned rights and obligations
arising under the DA, (b) the written consent to this Assignment by the Agency
with respect to the assigned rights and obligations arising under the DDA, (c) or
conveyance of the Subject Property to LQRR, as evidenced by the, recording of
the grant deed therefor in the Official Records.
4. Recording of Documents. This Assignment is to be recorded in the Official
Records.
5. Corporate Authority. The parties hereto each warrant and represent that they have
taken all necessary corporate action to authorize the execution and performance of
this Assignment and that the individuals executing this document on behalf of the
parties are authorized to do so, and by doing so, create binding obligations as
described herein of the party represented.
6. Governing Law. This Assignment shall be governed by the internal laws of the
State of California, without regard to conflict of law principles.
7. Counterparts. This Assignment may be executed in counterparts, and counterpart
signature pages may be combined into one or more fully executed original for
recording purposes.
[Signature pages follow]
W07-WEST3DPCI%"008B`F2A¢10080s5. -3-
.,«. 059
WHEREFOR, the parties hereto have executed this Assignment on the date first written
above.
.CCPI$
CP DUFLOPMENT LA QUINTA, LLC
a California limited liability company
By: Oliphant Family Trust
Its: Member n
P
By; �, 6
Richard R. Oliphant
Its: Trustee
By: Oliphan"Inc.: Manager r
By:
Richard R. Oliphant
Its: President
«LQW„
LA QUNITA RETIREMENT RESIDENCE LEWFED
PARTNERSHIP,
a Washington Limited Partnership
By: La Quinta GP LLC, A Washington limited liability
company
Its: General partner
By: Hawthorn Management Services Corp.,
A Washington corporation
Its: Manager
By:
Barton G. Colson, President
W02-WMT:3DPCi -4"
WHEREFOR, the parties hereto have executed this Assignment on the date first written
above,
„CP„
CP DEVELOPMENT LA QUINTA, LLC
a California limited liability company
By: Oliphant Family Trust
Its: Member
By:
Its:
By:
Richard R. Oliphant
Its: Trustee
Oliphant Enterprises, Inc.
Manager
By:
Richard R. Oliphant
Its: President
"LQRIV„
LA QUNITA RETMEMENT RESIDENCE LIMITED
PARTNERSHIP,
a Washington Limited Partnership
By: La Quinta GP LLC, A Washington limited liability
company
Its: General partner
By: Hawthorn Management Services Corp.,
A Washington corporation
Its: Manager
By:
Barton G. Colson, President
W02•WEST:3DPC1%WQQ80!Sd441008054.3 -4-
u Q61
State of California )
County of )
On before me, Notary
Public,
(here insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument, and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument,
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct,
WITNESS my hand and official seal.
Signature
(seal)
W U'y��q, (seG-n�
State of�ali�'er� )
County`` of CtdX
On A t_! t� 1,_11) --D I t before me, r'. Notary
Public, 4ov D)"41-vebr%,
- n (here Insert mama and title of the officer)
personally appeared 6Gau-1-rk (— l�l�tsn
who proved to me on the basis of satisfactory evidence to be the personJ,<whose namgW'
is/we subscribed to the within instrument, and acknowledged to me that he/sheAhay
executed the same in his/keAhok authorized capacity(ies), and that by his/her/their
signature,(e'j on the instrument the perso];K, or the entity upon behalf of which the
personKacted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my and and official seal. NOTARY PUBLIC
STATE OF WASHINGTON
ROBIN R. GOINS
$ignatlYe COnlmleaW Expires September 26. 2011
.... ............ ....... _ _........(seal)
W02•WEST:3DPCl%4GQ9HMQja1009= -S-
,� C62
State of California �-`
County of jm
On :, . ,e before me, c��� ram., /y% V4,1 . Notary
Public,
_ . _ (here insert namaend title of the officer)
personally appeared O ------ who proved to me on the basis of satisfactory Bence to be the person(A whose names,9'j
is/are subscribed to the within instrument, and acknowledged to me that he/she/the
executed the same in his/her/their authorized capacity(i4, and that by his; /flm r
signature(a) on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Is SUSAN M. MALEK
1�/� � %f Commlasion,N 1924889
Signatur .�.0 9& /i/ !U Notary Public - Calffomis
Riverside County
M Comm. Expires Mar 2 2015 r
State of Califolnia )
County of ✓ 47
-before me,Z-t dA 1 ! / �1 e
IAZZC Notary
Public,
{� p,
(hero i rt name and j!tla of the officer)
personally appeared A-ZIAgre
who proved to me on the basis of satisfactory evidence to be the person(,4 whose nameW
is/are subscribed to the within instrument, and acknowledged to me that he/she/the
executed the same in his/her/their authorized capacity(ie9), and that by his/1u.6/twin
signature(s) on the instrument the person(4, or the entity upon behalf of which the
person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SUSAN M. MALEK
Co
Sign&// / m PaieR M 1924669
-�s�A�/�� � Notary Public • California
Riverside County
Mv Comm. Ex Tres Mar 2 2015
Tsbal
Wo2.WMT:3DPCl\404QQ80P- 4UQ= -5
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CONSENT
By execution below, the Agency and City hereby (i) consent to the foregoing
Assignment; and (ii) release CP from any further obligations under the DA or DDA
with respect to the Subject Property,
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
politic
By:
Its: Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Agency Counsel
CITY OF LA QUINTA, a California
municipal corporation and charter city .
organized and existing under the laws of
the State of California
Rv�
Ita: City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
City Attorney
W02-WEST3DPCIW0IW"Q 54M0080s v -6-
». 064
EXHIBIT A
Subject Property Legal Description
Real property in the City of La Quints, County of Riverside, State of California, described as
follows:
PARCEL B AS SHOWN ON LOT LINE ADJUSTMENT NO, 2006.452 AS EVIDENCED BY DOCUMENT
RECORDED APRIL 19, 2006 AS INSTRUMENT NO, 2006-0280726 OF OFFICIAL RECORDS; BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, PARCEL 8 TOGETHER
WITH THAT PORTION OF PARCEL 7 OF PARCEL MAP NO, 31116, AS SHOWN BY MAP ON FILE IN
BOOK 212, AT PAGES 60 THROUGH 66, INCLUSIVE, OF PARCEL MAPS, RIVERSIDE COUNTY
RECORDS, BEING IN THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M.,
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 8;
THENCE ALONG THE SOUTHEASTERLY, EASTERLY AND NORTHERLY BOUNDARY LINES OF SAID
PARCEL 8 THROUGH THE FOLLOWING FIVE (5) COURSES:
(1) NORTH 430 56' 44" EAST, A DISTANCE OF 152.65 FEET;
(2) THENCE NORTH 000 12' 13" WEST, A DISTANCE OF 790.73 FEET;
(3) THENCE SOUTH 89° 47' 47" WEST, A DISTANCE OF 239.56 FEET TO THE BEGINNING OF A
TANGENT CURVE, CONCAVENORTHEASTERLY, HAVING A RADIUS OF 80.00 FEET,
(4) THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF
45° 27' 41 ", AN ARC DISTANCE OF 63.4E FEET;
(5) THENCE TANGENT TO SAID CURVE NORTH 44° 44' 32" WEST, A DISTANCE OF 91.61 FEET TO THE
BEGINNING OF A NON -TANGENT CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF
440.00 FEET, A RADIAL LINE PASSING THROUGH SAID POINT BEARS SOUTH 49° 06' 37" EAST;
THENCE SOUTHWESTERLY ALONG TBEARC OF SAID CURVE AND CONTINUING ALONG SAID
NORTHERLY LINE OF PARCEL BAND ALONG THE NORTHERLY LINE OF SAID PARCEL 7, THROUGH
A CENTRAL ANGLE OF 230 54' 45", AN ARC DISTANCE OF 183.63 FEET TO THE BEGINNING OF A
COMPOUND CURVE, CONCAVE NORTHWESTERLY, HAVING A RADIUS OF 840.00 FEET, A RADIAL
LINE PASSING THROUGH SAID POE�IT BEARS SOUTH 25° 11' S2"EAST;
THENCE SOUTHWESTERLY ALONG THE ARC OF SAID CURVE AND CONTINUING ALONG SAID
NORTHERLY LINE OF PARCEL 7, THROUGH A CENTRAL ANGLE OF 04° 02' 08", AN ARC DISTANCE
OF 59.16 FEET TO THE MOST NORTHERLYNORTHWEST CORNER OF SAID PARCEL 7;
THENCE ALONG THE WESTERLY LINES OF SAID PARCEL 7 THROUGH THE FOLLOWING THREE (3)
COURSES:
_..._ (1)SOUTH 16°-3944"—EAST-AND PION TANGENT--0-LABT-SAID-C-URVE;AS-DIS-T-ANEE-OF-55-.87-FEET..._•......... ......
TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY, HAVING A RADIUS OF 250.00
FEET;
OM US 27229661-10.046614,0074
».. C65
(2) THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE, THROUGH A CENTRAL ANGLE OF 20"
4I' 22", AN ARC DISTANCE OF 90.27 FEET;
(3) THENCE TANGENT TO SAID CURVE SOUTH 04° 02' 08" WEST, A DISTANCE OF 333.46 FEET TO THE
NORTHWESTERLY PROLONGATION OF THE SOUTHWESTERLY LINE OF SAID PARCEL 8;
THENCE LEAVING SAID WESTERLY LINES OF PARCEL 7 AND ALONG SAID PROLONGATION AND
SAID SOUTHWESTERLY LINE OF PARCEL S, SOUTH 50° 10' 13" EAST, A DISTANCE OF 592.88 FBET TO
THE POINT OF BEGINNING.
EXCEPTING THEREFROM AGENCY EXCEPTS AND RESERVES FROM THE CONVEYANCE HEREIN
DESCRIBED ALL INTEREST OF THE AGENCY IN OIL, GAS, HYDROCARBON SUBSTANCES AND
MINERALS OF EVERY RIND AND CHARACTER LYING MORE THAN FIVE HUNDRED (500) FEET
BELOW THE SURFACE, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND
OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN FIVE HUNDRED (500) FEET BELOW
THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCM13NTAL TO THE EXPLORATION FOR
AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID
PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE
SURFACE OF THE PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF
THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR TO USE THE PROPERTY IN
SUCH A MANNER AS TO CREATE A DISTURBANCE TO THE USE OR.ENJOYMENT OF THE
PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA REDEVELOPMENT AGENCY, RECORDED
DECEMBER 09, 2004 AS INSTRUMENT NO.04-979137 OF OFFICIAL RECORDS.
APN: 604.630-027-6
DM US 27829661•10.046314.0074
I'll., C66
COUNCIL/RDA MEETING DATE: June 21, 2011
ITEM TITLE: Adoption of a Resolution Approving a Cost
Sharing Agreement Among the La Quinta
Redevelopment Agency, The City of La Quinta, and the
Coachella Valley Water District for the Reconstruction of
the Coachella Canal, a Regional Water Conveyance
System, Within the SilverRock Property and Making
Certain Findings Pursuant to Health and Safety Code
Section 33445 With Respect to the Agency's
Expenditure
AGENDA CATEGORY:
BUSINESS SESSION: _
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Due to the large number of edits proposed by the Coachella Valley Water District
("CVWD") to the Cost Sharing Agreement, further discussions between City staff and
CVWD staff as well as both agencies' legal counsels before this item can be brought
back to the City Council and Agency Boards for consideration. The item will be
brought back in July, 2011.
Respectfully submitted,
Timothy R. Jonas of , P.E.
Public Works Dire or/City Engineer
" cs7
Tjht 4 4 Qum&
MEMORANDUM
TO: The Honorable Mayor and Members of the City Council
FROM: Tim Jonasson, Public Works Director
DATE: June 16, 2011///
SUBJECT: Item No. - to Redevelopment Agency Consent — June 21, 2011
Adoption of a Resolution Appropriating Redevelopment Funds for the
Washington Street Turn Lane Improvements at Eisenhower Drive/Calle
Tampico, Project No. 2010-09, and Making Certain Findings Pursuant
to Health and Safety Code Section 33445(a) with Respect to Such
Expenditures
The staff report and resolution will be distributed to the Agency on Monday, June
20, 201 1.
.." C63
way/ 4 4 Quiperru
COUNCIURDA MEETING DATE: June 21, 2011
ITEM TITLE: Adoption of a Resolution Appropriating
Redevelopment Funds for the Washington Street
Turn Lane Improvements at Eisenhower Drive/Calle
Tampico, Project Number 2010-09, and Making
Certain Findings Pursuant to Health and Safety Code
Section 33445(a) with Respect to Such Expenditures
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION: (%h
CONSENT CALENDAR: `
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution of the La Quinta Redevelopment Agency, appropriating
$165,000 from Project Area Number 1 for the Left Turn Lane Improvements at
Calle Tampico, and appropriating $255,670 from Project Area Number 2, for the
Washington Street Right Turn Lane Improvements at Eisenhower Drive, and making
certain findings pursuant to Health and Safety Code Section 33445(a) with respect
to the Agency's expenditures.
FISCAL IMPLICATIONS:
Staff is recommending the Washington Street Right Turn Lane Improvements at
Eisenhower Drive and Left Turn Lane Improvements at Calle Tampico be funded
with RDA Project Area funds. No other funding is available to replace these funds.
Staff would like to proceed expeditiously with this project in order to allow the
majority of the work to be completed over the summer months. Summer
construction results in the least adverse impacts to motorists.
The following represents the project's recommended funding and funding sources:
RDA Project Area Number 1
$165,000
RDA Project Area Number 2
$255,670
Total Recommended Funding:
420,670
N C69
The following is the anticipated project budget:
Design: $51,000
Inspection/Testing/Survey: $30,000
Construction: $288,715
Contingency (15%►: $50,955
Total Anticipated Budget: $420,670
The anticipated project budget was prepared using the engineer's estimate rather
than actual project bids. Staff is recommending that the Redevelopment Agency
appropriate funding at this time to allow the project to be awarded in an
expeditious manner.
The Washington Street right turn lane at Ave 48 RDA Project Area Number 2
funding will be reduced from $364,177 to $108,507.
CHARTER CITY IMPLICATIONS:
The project will be funded with RDA Project Area funds. As such, the project will
be bid as a prevailing wage improvement.
BACKGROUND AND OVERVIEW:
The improvements at Washington Street and Eisenhower Drive will construct a
dedicated right turn lane from southbound Washington Street onto westbound
Eisenhower Drive, and include new curb and gutter, new meandering sidewalk and
an ADA compliant access ramp, signal modification, and signing and striping.
Construction of these improvements will require a minor right-of-way dedication
from the Laguna de la Paz Home Owners Association (HOA).
Additional left turn lane improvements are proposed to be constructed at the
intersection of Washington Street and Calle Tampico. The additional improvements
would modify the intersection to allow for an additional left turn lane from
eastbound Calle Tampico to northbound Washington Street, and include
modifications to the traffic signal, median curb, and signing and striping.
Due to the similar scope and nature of these projects, the projects were combined
into one engineering and construction effort, in an attempt to realize the cost
savings associated with economies of scale.
a, e70
On August 3, 2010, the City Council approved a Request for Proposal (RFP) to
solicit professional engineering services to prepare the plans, specifications and
engineer's estimate (PS&E) for the combined projects (Washington Street Dual Left
Turn at Avenue 48, Project Number 2010-06 and Washington Street Dedicated
Right Turn Lane at Eisenhower Drive, Project Number 2010-09).
On November 16, 2010, the City Council approved a Professional Services
Agreement (PSA) with Albert A. Webb Associates, in the amount of $70,696, to
prepare the PS&E for the combined projects Washington Street dual left turn at
Avenue 48, Project Number 2010-06 and Washington Street dedicated right turn
lane at Eisenhower Drive, Project Number 2010-09 and authorized City Manager to
execute the Agreement.
On March 1, 2011, the City Council appropriated Unspent Proposition 1 B Funds for
use on the Washington Street Dual Left Turn Lanes at Avenue 48 and the
Washington Street Dedicated Right Turn Lane at Eisenhower Drive, and Approved
Amendment No. 1 to the PSA with Albert A Webb Associates for Additional
Engineering Services to Modify the Signal and Raised Median at the Intersection of
Washington Street and Calle Tampico.
The combined project originally envisioned the proposed left turn lanes on
Washington Street and Avenue 48 be constructed along with these improvements.
Staff recently discovered right of way issues that have delayed the turn lane
improvements on Washington Street and Avenue 48. Staff is recommending the
City proceed expeditiously with the remaining two projects in order to allow the
majority of the work to be completed over the summer months.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Redevelopment Agency include:
1. Adopt a Resolution of the La Quinta Redevelopment Agency, appropriating
$165,000 from Project Area Number 1 for the Left Turn Lane Improvements
at Calle Tampico, and appropriating $255,670 from Project Area Number 2,
for the Washington Street Right Turn Lane Improvements at Eisenhower
Drive, and making certain findings pursuant to Health and Safety Code
Section 33445(a) with respect to the Agency's expenditures.
.,.If 071
2. Do not adopt the proposed Resolution; or
3. Provide staff with alternative direction.
Respectfully submitted,
Timothy R. Jona s P.E.
Public Works Dir or/City Engineer
Approved for submission by:
Debbie Powell,
Economic Development Project Manager
N._ 072
RESOLUTION NO. 2011-
A RESOLUTION OF THE LA QUINTA
REDEVELOPMENT AGENCY OF THE CITY OF LA
QUINTA CALIFORNIA CONSENTING TO THE
EXPENDITURE OF FUNDS FOR THE WASHINGTON
STREET TURN LANE IMPROVEMENTS AT
EISENHOWER DRIVE AND LEFT TURN LANE
IMPROVEMENTS AT CALLE TAMPICO, AND
MAKING CERTAIN FINDINGS PURSUANT TO
HEALTH AND SAFETY CODE SECTION 33445(a)
WITH RESPECT TO THE AGENCY'S
EXPENDITURES
WHEREAS, the Washington Street Turn Lane Improvements at
Eisenhower Drive are located in La Quinta Redevelopment Project Area No. 2, and the
Left Turn Lane Improvements on Calle Tampico are located in La Quinta
Redevelopment Project Area No. 1 (the "Project Areas"); and
WHEREAS, the construction and installation of the Washington Street
Right Turn Lane Improvements at Eisenhower Drive and Left Turn Lane Improvements
at Calle Tampico would afford the Redevelopment Agency the opportunity to address
the blighted conditions; and
WHEREAS, there is inadequate funding within the City's General Fund,
Development Impact Fee Fund or from other sources to construct the proposed
Washington Street Right Turn Lane Improvements at Eisenhower Drive and Left Turn
Lane Improvements at Calle Tampico, in that (1) the City's General Funds are needed
to provide essential public services, such a police services and maintenance of existing
public improvements, (2) payments into the City's Development Impact Fee Fund have
sharply declined with the economic downturn, and (3) the amounts currently on
deposit in Development Impact Fee Fund are needed for other public infrastructure
projects and to fund the repayment of certain financing and reimbursement agreements
and;
WHEREAS, proceeding with the construction and installation of the
Washington Street Right Turn Lane Improvements at Eisenhower Drive and Left Turn
Lane Improvements at Calle Tampico at this point in time will help to stimulate the
local economy by providing local jobs and construction -related expenditures; and
WHEREAS, it would be in the best interest of the public to construct and
install the Washington Street Right Turn Lane Improvements at Eisenhower Drive and
Left Turn Lane Improvements at Calle Tampico.
Resolution 2011-
Washington Street Turn Lanes
Adopted: June 21, 2011
Page 2
NOW, THEREFORE, BE IT RESOLVED, by the La Quinta Redevelopment Agency of the
City of La Quinta, California, as follows:
SECTION 1. The above recitals are true and correct and are adopted as
the findings of the Agency Board.
SECTION 2. The Agency Board hereby appropriates Agency funding to be
utilized for the Washington Street Right Turn Lane Improvements at Eisenhower Drive
from Project Area No. 2 in the amount of $255,670 and for the Left Turn Lane
Improvements at Calle Tampico from Project Area No. 1 in the amount of $165,000.
SECTION 3. Pursuant to Health and Safety Code Section 334451a1, the
Agency finds and determines that:
A. The construction and installation of Washington Street Right Turn Lane
Improvements at Eisenhower Drive and Left Turn Lane Improvements at Calle
Tampico is of benefit to the Project Areas and to the immediate neighborhoods
in which the improvements are located.
B. No other reasonable means of financing the Washington Street Right Turn Lane
Improvements at Eisenhower Drive and Left Turn Lane Improvements at Calle
Tampico are available to the community at this point in time.
C. The Washington Street Right Turn Lane Improvements at Eisenhower Drive and
Left Turn Lane Improvements at Calle Tampico will assist in the elimination of
one or more blighted conditions inside the Project Areas, and are consistent with
the Redevelopment Agency's implementation plan adopted pursuant to Section
33490.
"M. 074
Resolution 2011-
Washington Street Turn Lanes
Adopted: June 21, 2011
Page 3
PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta
Redevelopment Agency held on this 21 st day of June 2011, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
TERRY HENDERSON, Chairperson
La Quinta Redevelopment Agency
ATTEST:
VERONICA J. MONTECINO, CMC, Secretary
La Quinta Redevelopment Agency
(SEAL)
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
La Quinta Redevelopment Agency
City of La Quinta, California
5;
T4t!t 4 4 Q"
MEMORANDUM
TO: The Honorable Chair and Members of the Redevelopment Agency
FROM: Thomas P. Genovese, Executive Director
DATE: June 21, 2011
SUBJECT: Redevelopment Agency Agenda Business Item
Consideration of a Resolution Approving a Replacement Housing Plan for
78181 Avenida La Fonda (APN: 770-125-003), 78182 Avenida La Fonda
(APN: 770-124-007) and 78153 Main Street (APN: 770-124-004)
The staff report and the Replacement Housing Plan (Attachment 1) will be
distributed to the Board on Monday, June 20, 2011.
COUNCIL/RDA MEETING DATE: June 21, 2011
ITEM TITLE: Consideration of a Resolution Approving
a Replacement Housing Plan for 78181 Avenida La
Fonda (APN 770-125-003), 78182 Avenida La Fonda
(APN 770-124-007) and 78153 Main Street (APN
770-124-004)
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION: �p{�
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution approving a Replacement Housing Plan for 78181 Avenida La
Fonda (APN: 770-125-003), 78182 Avenida La Fonda (APN: 770-124-007) and
78153 Main Street (APN: 770-124-004).
FISCAL IMPLICATIONS:
Expenditures associated with Implementation of the Replacement Housing Plan are
incorporated in the cost of the Home Purchase and Rehabilitation Program and
Washington Street Apartments, as displaced units will be replaced with affordable
units in these projects. Replacement costs will not require the expenditure of City
funds.
BACKGROUND AND OVERVIEW:
La Quinta Redevelopment Project Area No. 1 ("Project Area No. 1 ") was
established in November 1983 to redevelop and expand deficient public
infrastructure and facilities, facilitate economic development, expand recreation
opportunities, and revitalize the La Quinta Village. As part of redevelopment efforts
in the La Quinta Village (located in Project Area No. 1), the Agency has been
acquiring vacant and developed properties. These properties will subsequently
facilitate redevelopment in the La Quinta Village, including the expansion of mixed -
use development with affordable housing, and public improvements.
The Agency is acquiring three properties in the La Quinta Village, 78181 and
78182 Avenida La Fonda and 78153 Main Street ("Properties"). The Properties are
4 077
improved with four- and five-plexes that house a total of 11 permitted (with
Certificates of Occupancy) studio units, of which eight units are occupied. All
units are rentals.
Health and Safety Code Section 33413(a) of the Community Redevelopment Law
Health and Safety Code Section 33000 et. Seq. ("CRL") requires that whenever
dwelling units housing persons or families of extremely low, very low, low-, or
moderate- income are destroyed or removed as part of a redevelopment project,
they must be replaced within four years. Replacement can take the form of
rehabilitating existing units, or constructing new units. The replacement units must
have an equal or greater number of bedrooms as the units that were removed. The
CRL also requires that 100 percent of the replacement dwelling units be available
at a cost affordable to, and occupied by, persons in the same or lower income
category as the removed units. Currently, eight (8) units are occupied at extremely
low, low, and moderate income rents. Since three of the permitted units on the
Properties are vacant, it is assumed that the vacant units would be rented at
equivalent rents as those currently occupied. The number of units by bedroom and
affordability count is as follows:
Units Being Removed Table 1
Extremely
Bedrooms
4 6 11
Section 33413.5 of the CRL requires the Agency to adopt a Replacement Housing
Plan a minimum of 30 days prior to one of the following: the execution of an
agreement for acquisition of real property, the execution of an agreement for the
disposition and development of property, or the execution of an owner participation
agreement.
Attachment 1 is the Replacement Housing Plan for the Properties. At the time of
this report, the Replacement Housing Plan was under review by Agency Counsel.
The Replacement Housing Plan provides information required by the CRL,
specifically that:
• The replacement housing will be located within the City of La Quinta;
• The principal source of funding for the replacement housing will be the
Agency's Low- and Moderate -Income Housing Fund;
• Within the next four years the Agency will replace the units at affordable
costs to persons in the same, or lower, income category as the displaced
units to meet its replacement housing obligations under the Replacement
Housing Plan and the CRL; and
• The replacement units do not require voter approval pursuant to Article
XXXIV of the California Constitution.
The Agency has been aggressively implementing the affordable housing mandates
prescribed by the CRL. To date, the Agency has secured 1,059 units with
affordability covenants. With the Washington Street Apartments and Home
Purchase and Rehabilitation Program, the Agency will be able to meet its
replacement housing obligations.
A draft of the Replacement Housing Plan was made available for public review and
comment prior to the Agency taking action.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Adopt a Resolution approving a Replacement Housing Plan for 78181 and
78182 Avenida La Fonda and 78153 Main Street;
2. Do not adopt a Resolution approving a Replacement Housing Plan for 78181
and 78182 Avenida La Fonda and 78153 Main Street; or
3. Provide staff with alternative direction.
Respectfully submitted,
Debbie Powell,
Economic Development Project Manager
Approved for submission by:
(W�� -� ", ���
Thomas P. Genovese, Executive Director
Attachment: 1. Replacement Housing Plan
+1 079
RESOLUTION NO. 2011-
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY
ADOPTING A REPLACEMENT HOUSING PLAN FOR 78181 AND
78182 AVENIDA LA FONDA AND 78153 MAIN STREET
WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a public
body, corporate and politic, organized and existing under the California Community
Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("Law"); and
WHEREAS, the City Council of the City of La Quinta ("City Council") approved
and adopted the Redevelopment Plan for Redevelopment Project No. 1
("Redevelopment Plan"), by Ordinance No. 43 on November 29, 1983, as amended by
Ordinance No. 258 on December 20, 1994, Ordinance No. 264 on March 21, 1995,
Ordinance No. 388 on August 19, 2003 and Ordinance No. 402 on March 16, 2004;
and
WHEREAS, the Agency has entered into Purchase and Sale Agreements with
Thomas H. Casey, Chapter 7 Bankruptcy Trustee for 78181 Avenida La Fonda
(APN 770-125-003), Michael A. Fischer for 78182 Avenida La Fonda (APN 770-
124-007) and Yessayian Family Ltd. Partnership for 78153 Main Street (APN 770-
124-004) ("Properties") respectively, for the purposes of implementing the
Redevelopment Plan which would result in the removal of 11 low and moderate
income units; and
WHEREAS, Section 33413 of the Law requires that whenever dwelling units
housing persons and families of extremely low, very low, low-, or moderate -income
are destroyed or removed from the low and moderate income housing market as
part of a redevelopment project subject to a written agreement with the Agency,
the Agency shall, within four (4) years of such destruction or removal, rehabilitate,
develop or construct, or cause to be rehabilitated, developed or constructed, for
sale or for rent, an equal number of replacement dwelling units with an equal or
greater number of bedrooms as those units destroyed or removed, within the
Agency's territorial jurisdiction; and
WHEREAS, Section 33413 of the Law also requires that 100 percent of the
replacement dwelling units be affordable to persons and families of the same or
lower income category as those households displaced from the destroyed or
removed units; and
WHEREAS, Section 33413.5 of the Law requires that the Agency adopt a
Replacement Housing Plan prior to executing an agreement for the acquisition or
the disposition and development of real property, or to executing an owner
,.0 080
Resolution No.
Adopting the Replacement Housing Plan for 78181 and 78182 Avenida La Fonda and 78153 Main
Street
Adopted:
Page 2
participation agreement, when any such agreement would lead to the destruction
or removal of dwelling units from the low- and moderate -income housing market, to
address specific issues related to the replacement of those dwelling units housing
low and moderate income persons and families to be destroyed or removed as a
result; and
WHEREAS, the Agency has prepared a Replacement Housing Plan in
accordance with Section 33413.5 of the Law; and
WHEREAS, a draft of the Replacement Housing Plan was made available for
public review and comments a reasonable time prior to the Agency considering the
Replacement Housing Plan for adoption.
NOW, THEREFORE, THE LA QUINTA REDEVELOPMENT AGENCY DOES
HEREBY RESOLVE, ORDER, AND DETERMINE AS FOLLOWS:
Section 1. The Replacement Housing Plan, a copy of which has been
presented to the Redevelopment Agency and is now on file with the City Clerk, is
hereby approved.
Section 2. The Agency Secretary shall certify as to the adoption of this
resolution.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the La Quinta
Redevelopment Agency held this 21 st day of June, 2011, by the following vote, to
wit:
AYES:
NOES:
ABSENT:
/_1.1+1t1t11 A
TERRY HENDERSON, Chair
La Quinta Redevelopment Agency
a 081
Resolution No.
Adopting the Replacement Housing Plan for 78181 and 78182 Avenida La Fonda and 78153 Main
Street
Adopted:
Page 3
ATTEST:
VERONICA MONTECINO, Agency Secretary
La Quinta Redevelopment Agency
(AGENCY SEAL)
APROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
La Quinta Redevelopment Agency
N
ATTACHMENT
LA QUINTA REDEVELOPMENT AGENCY
78495 CALLE TAMPICO LA QUINTA, CA 92253
GC--1
RSC -,,
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78153 MAIN STREET
La Quinta Redevelopment Agency
June 21, 2011
ROSENOW SPEVACEK GROUP, INC. a.. o 8 3
www.webrsg.com
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78163 MAIN STREET
LA QUINTA REDEVELOPMENT AGENCY
INTRODUCTION............................................................................................................................. 1
ReplacementHousing Plan............................................................................................................. 1
Replacement Housing Plan Requirements....................................................................................... 1
EXISTING CONDITIONS AND REDEVELOPMENT PROJECT ...................................................... 2
TheProperties................................................................................................................................. 2
The Redevelopment Project............................................................................................................. 2
LOCATION, TIMING, AND FINANCING OF REPLACEMENT HOUSING ....................................... 2
Replacement Housing Obligations................................................................................................... 3
ReplacementHousing Development................................................................................................ 3
Timetable for Replacement Housing Development.......................................................................... 4
Means of Financing the Replacement Housing Obligations .............. :.............................................. 4
Article XXXIV of the California Constitution Requirements............................................................... 4
s_
«. 0,84
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78153 MAIN STREET
LA QUINTA REDEVELOPMENT AGENCY
INTRODUCTION
The La Quinta Redevelopment Agency ("Agency') is acquiring 78181 and 78182 Avenida La Fonda, and
78153 Main Street ("Properties') in the La Quinta Village. These Properties, along with the adjacent vacant
properties the Agency currently owns, would facilitate redevelopment in the La Quinta Village, including public
improvements and facilities, mixed -use development, and affordable housing. Specific project details are not
known at this time.
The Properties are located in Redevelopment Project Area No. 1 on Avenida La Fonda and Main Street, east
of Desert Club Drive, and are improved with two four-plexes and one five-plex that house a total of 11 rental
units that have been issued certificates of occupancy and available for lawful residential use. Eight of these
units are currently being rented to and occupied and three of these units are available for rental occupancy by
low and moderate income households. Due to the dilapidated condition of these properties, the Agency
anticipates relocating the current residents and demolishing the Properties within the next several months.
Replacement Housing Plan
This document is the Replacement Housing Plan ('Plan") for the Properties, and serves as the baseline for
compliance with Health & Safety Code Section 33413(a) and Section 33413(f) of California Community
Redevelopment Law, Health and Safety Code Section 33000 at seq. ("Law") as described in the following
sections. Replacement housing obligations are tied to formulas for matching lost units according to income
category, and total bedroom count on a one -for -one basis. Countable replacement housing units must be
within the Agency's territorial jurisdiction, in standard condition, and for rental units, designed to remain
affordable to low and moderate income households for no less than 55 years. In addition to addressing the
legally required items, this Plan also documents the existing conditions at the Properties in order to define its
replacement housing obligations.
Replacement Housing Plan Reguirements
Pursuant to the Law, when an agency assists a project that causes the removal or displacement of affordable
housing units, it is required to provide for the replacement of those units. Specifically, the agency must
provide an equal number of replacement dwelling units that have an equal or greater number of bedrooms as
the displaced or removed units. In addition, for rental units, the replacement dwellings must be available at a
rent affordable to, and occupied by, persons in the same or lower income category as the displaced units. The
agency must replace the units within four years of their removal or displacement.
Eitght units at the Properties are occupied at extremely low, low, or moderate income rents, as shown in Table
1. For the purposes of this Plan, it is assumed that the three vacant units would be rented at equivalent rents
as those currently occupied.2 Therefore, as the Agency will be removing 11 rental units affordable to
extremely low, low, and moderate income households, the Law requires the Agency to prepare this Plan that
details how the Agency will replace the 11 rental units within a four year period. Section 33413.5 of the Law
requires that this Plan address the following:
• The general location of housing to be rehabilitated, developed, or constructed to serve as the
replacement units for the current 11 rental units,
• The number of dwelling units housing persons and families of extremely low, very low, low, or
moderate income planned for construction or rehabilitation,
' Based upon the income limits set forth by the Department of Housing and Community Development
2 The property located at 78181 Avenida La Fonda has plans that have approved three additional rental units, but those
units do not have certificates of occupancy and have not been available for lawful occupancy. Therefore, no replacement
nits are required for these three units.
Fl,, 1
• 's G
p 085
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78153 MAIN STREET
LA QUINTA REDEVELOPMENT AGENCY
• The timetable for meeting the replacement housing plan's relocation, rehabilitation, and replacement
housing obligations;
• A description of the means of financing such rehabilitation, development or construction; and
• A finding that the replacement housing does or will not require voter approval pursuant to
Article XXXIV of the California Constitution, or that such approval has been obtained.
EXISTING CONDITIONS AND REDEVELOPMENT PROJECT
This section presents the data that was used in developing this Plan. It details the type of units that will be
removed, and the household income levels the units serve.
The Properties
The Properties are located in the La Quinta Village on Avenida La Fonda and Main Street, in La Quinta
Redevelopment Project No. 1. The Properties are improved with four- and five-plexes that house a total of 11
studio units for rent.
• 78181 Avenida La Fonda ("La Fonda Five Plex") — the Agency entered into escrow to purchase this
property on May 26, 2011. The parcel is approximately 16,000 square feet, is Assessor Parcel
Number 770-125-003, and is located on the south side of Avenida La Fonda, across from the La
Fonda Four Plex.
78182 Avenida La Fonda ("La Fonda Four Plex") — this property was purchased by the Agency on
May 27, 2011. The parcel is approximately 12,400 square feet, is Assessor Parcel Number 770-124-
007, and is located on the north side of Avenida La Fonda between Desert Club Drive and Main
Street.
• 78153 Main Street ("Main Street Five Plex") — the Agency entered into escrow to purchase this
property on May 26, 2011. The parcel is approximately 13,700 square feet, is Assessor Parcel
Number 770-124-004, and is located on the south side of Main Street, just east of Desert Club Drive.
The total number of units by bedroom and affordability count is as follows:
Units Bemp Removed Table 1
Extremely
Bedrooms Low Very Low
11
The Redevelopment Project
The Agency is acquiring the Properties for the purpose of consolidating them with adjacent vacant properties
the Agency currently owns, to continue implementation of redevelopment activities within the La Quinta
Village, including a mixed -use development, library and senior center expansion and parking, and affordable
housing development. Details regarding a specific development project are not available at this time.
LOCATION, TIMING, AND FINANCING OF REPLACEMENT HOUSING
The Agency has been aggressively implementing the affordable housing mandates prescribed by the Law.
To date, the Agency has secured 1,059 units with affordability covenants. Through the Washington Street
0111)!P,tS G, 2
�,; r,86
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78153 MAIN STREET
LA QUINTA REDEVELOPMENT AGENCY
Apartments Project and Home Purchase and Rehabilitation Program described below, the Agency will be able.
to meet the replacement housing obligations generated by removal of units at the Properties.
Replacement Housing Obligations
Pursuant to the Law, the Agency must replace 100% of the number of destroyed or removed affordable units
at an affordable housing cost to persons in the same or lower income category as those of the persons
displaced. The Agency may satisfy its replacement housing obligation, however, with a fewer number of units
if the replacement program meets both of the following criteria: (1) the total number of bedrooms in the
replacement units equals or exceeds the number of bedrooms in the destroyed or removed units, and (2) the
replacement units are affordable to the same or lower income categories as those persons displaced from the
destroyed or removed units.
The Agency will be implementing these provisions to satisfy the replacement housing obligation, thereby
generating an equal amount of replacement bedrooms to those removed, at income levels at or lower than
the persons to be displaced.
Replacement Housing Development
The Agency intends to satisfy the replacement housing obligations through two separate housing
developments in La Quinta Redevelopment Project Area Nos. 1 and 2. The two developments are as follows:
Home Purchase and Rehabilitation Program
Through the Home Purchase and Rehabilitation Program the Agency has been acquiring vacant foreclosed
single-family homes and rehabilitating the homes for rent or sale to very low, low, or moderate income
families. The Agency is currently rehabilitating three three -bedroom single family homes in Project Area No.
1. These homes will have either 45- or 55-year affordable covenants depending on whether they are sold or
rented to eligible low and moderate income households. The Home Purchase and Rehabilitation Program will
satisfy a portion of the replacement housing obligations generated by the Properties: units will be affordable to
persons in the same or lower income category, and the units will have an equal or greater number bedrooms
as those removed.
Washington Street Apartments
The Agency will be substantially rehabilitating and constructing 98 one -bedroom units at 42800 Washington
Street; 96 of the dwellings will be at rents affordable to extremely low and very low income seniors and
disabled households, and 2 of the dwellings will be affordable to moderate income households (the manager
and on -site maintenance personnel units). The Washington Street Apartments will satisfy a portion of the
replacement housing obligations generated by the Properties: units will be affordable to persons in the same
or lower income category, and the units will have an equal or greater number bedrooms as those removed.
Table 2 below presents the replacement housing obligations and the number of units the Washington Street
Apartments and Home Purchase and Rehabilitation Program will generate.
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78153 MAIN STREET
LA QUINTA REDEVELOPMENT AGENCY
Replacement Units Table 2
Project
Area
Units Proposed to be Removed
78181 Avenida La Fonda 1
78182 Avenida La Fonda 1
78153 Main Street 1
Total
Replacement Units
Home Purchase and
Rehabilitation Program' 1
Washington Street Apartments 2
Total
Units
Bedrooms
xireme q
-Extremely
Low
Very Low
Low
Moderate
Low
Very Low
Low
Moderate
Total
Income
Income
Income
Income
Total
income
Income
Income
Income
2
0
0
0
2
2
0
0
0
2
4
0
0
0
4
4
0
0
0
4
5
1
4
0
0
5
1
4
0
0
11
1
4
0
6
11
1
4
0
6
3
0
3
0
0
9
0
9
0
- 0
2
1
1
0
0
2
1
1
0
0
5
1
4
0
0
11
1
10
0
0
Units removed are studio units
] Per Section 33413(a) of the Law removed units may be replaced weh a greater number of bedrooms and affordable to persons n,he same or lower
income category
IncNdes53645 Avenida Navarro, 52691 Avenida Mendoza, and 52050 Avenida Carranza
Timetable for Replacement Housing Development
The rehabilitation of the three three -bedroom residences for the Home Purchase and Rehabilitation Program
began at different times, between January and May 2011, and are anticipated to be completed by December
2011. Rehabilitation and construction of the Washington Street Apartments is expected to begin in April
2013, with anticipated completion in March 2014.
Means of Financing the Replacement Housing Obligations
The replacement housing obligations will be funded from the Agency's Low and Moderate Income Housing
Fund.
Article XXXIV of the California Constitution Requirements
Article XXXIV of the California Constitution provides that no low -rent housing project may be developed,
constructed, or acquired by a state public body without the majority of voter approval. Pursuant to the Public
Housing Election Implementation Law, Health and Safety Code Section 37000 et seq. ("PHEIL"), which
implements and governs when a rental housing project must comply with Article XXXIV, the words
"developed, constructed, or acquired" do not apply, and therefore no voter approval is required, when a state
public body provides assistance to a low -rent housing project and monitor construction or rehabilitation of a
project while complying with the following conditions of such assistance to the extent of:
• Carrying out routine governmental functions.
• Performing conventional activities of a lender.
• Imposing constitutionally mandated or statutorily authorized conditions accepted by the grantee of
assistance.
Additionally, Section 37001 of the PHEIL provides that a "low -rent housing project' does not include any
development of residential dwellings or living accommodations that consist of the rehabilitation, replacement,
improvement or reconstruction of a previously existing low rent project, or residential projects previously or
currently occupied by low income households.
o RSA; 4
,,, 083
REPLACEMENT HOUSING PLAN
78181 AVENIDA LA FONDA
78182 AVENIDA LA FONDA
78163 MAIN STREET
LA QUINTA REDEVELOPMENT AGENCY
Based on the provisions in the PHIEL, including those cited above, the replacement housing to be developed
and constructed pursuant to this Plan does not require approval of the voters of the City of La Quinta under
Article XXXIV. The rental housing slated for the Washington Street Apartments is partially replacing existing
low income rental housing. Furthermore, by providing assistance to these replacement housing projects and
monitoring their construction or rehabilitation, as proposed in this Plan, the Agency will be complying with
conditions that are imposed by the Law, including Health and Safety Code Section 33413, and thereby
carrying out routine governmental functions.
a
�sc�� oe „Rom
COUNCIL/RDA MEETING DATE: June 21, 2011 AGENDA CATEGORY:
BUSINESS SESSION:
ITEM TITLE: Consideration of Fiscal Year
201 1 /2012 Preliminary Budget CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
Adopt the Fiscal Year 2011 /2012 Preliminary Budget and direct staff to prepare a
Fiscal Year 201 1 /2012 Final Budget for the July 5, 2011 La Quinta Redevelopment
Agency Meeting.
FISCAL IMPLICATIONS:
All Preliminary Fiscal Year 201 1 /2012 revenues, operational appropriations and debt
service funding are included in this Preliminary Budget. The Fiscal Year 201 1 /2012
budget totals $77,308,287 in appropriations and transfers of which $50,544,612 is
budgeted from PA 1 and $26,763,675 is budgeted from PA 2, and $81,552,385 in
estimated revenues and transfers of which $53,535,609 is budgeted from PA 1 and
$28,016,776 from PA 2, as reflected on C-1 of the Preliminary Budget.
CHARTER CITY IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
Introduction
The purpose of the La Quinta Redevelopment Agency budget is threefold: 1) account
for the debt service payments on outstanding debt the Agency has incurred and the
tax increment that is collected, 2) account for capital projects that the Agency will
construct from the funds obtained from the debt issues and advances from the General
Fund, and 3) account for low and moderate housing payments and projects and the tax
increment that is collected.
Since the La Quinta Redevelopment Agency has two project areas (PA 1 & PA 2), a
separate set of funds has been established to account for each of the aforementioned
activities.
DEBT SERVICE FUNDS
For Fiscal Year 2011/2012, the debt service budget -for PA 1 is $39,843,422 and
$21,007,692 for PA 2 as reflected on Page C-1 of the Fiscal Year 2011/2012 Budget.
The following chart is a breakdown of the major expenditure categories:
Debt Service
Purpose
Project Area
Original Budget
- FY 20102011
Increase
(Decrease)
1
2
FY 2011/2012
Contract Services
Debt Service:
Tax Allocation Bonds
City of La Oui Me Interest on Advances
Pass Through Payments to Others
Subtotal
Transfers:
Capital Projects Fund
Financing Authority -2004 Housing Bonds
Subtotal
$ 411,600
$ 255,100
$ 666,700
$ 739.500
$ (72,800)
10,264,310
-
20,211,350
416,737
16,387.298
10,681,047
-
36,598,648
10.689.707
3,376,500
46,524,946
(8,660)
(3,376,500)
(9,926,298)
30,475,660
18,804,035
47 279695
57,351,142
13311 458
5,000,000
3 956 162
2,000,000
1 948 557
7,000,000
521 719
7,000,000
5 915131
10 412
8,958, 182
3,948,557
12,904,719
15,913,331
(10,412)
Total
$ 39,843,422
1 $ 21,007,692
1 $ 60,851,114
1 $ 74,040,673
1 $ (13,394,670)
Contract Services
Contract services consist of professional services for audit, fiscal agent, and property
tax administration. The reason for the decrease of $72,800 is in County of Riverside
Administration fees.
Tax Allocation Bonds (TABS)
During Fiscal Year 2009-2010, no TABS were issued. Debt service payments
remained at $10.7 million in Fiscal Year 2010/2011 and in Fiscal Year 2011/2012.
City of La Quinta Interest on Advances
The City of La Quinta General Fund had previously advanced $41.4 million to the
Agency PA 1 and 2 to accelerate capital improvement projects. Interest on these
advances ranged from 7%-10% with $3,376,500 due in Fiscal Year 2010/2011.
During Fiscal Year 2010/2011 these advances were repaid and no interest expense
has been budgeted in Fiscal Year 2011/2012.
N 091
Pass -Through Payments to Others
The following chart lists the Pass -Through payments to Others for Fiscal Year
2011 /2012 which decreased by $9,926,298 from the previous fiscal year:
Project Area
Original Budget
Increase
1
2
FY 11112
Agency
FY 10/11
(Decrease)
County of Riverside,Library,Fire
$ 14,803,383
$ 8,253,362
$ 23,056,745
$ 26,161,839
$ (3,105,094)
City of La Quints
157,832
157,832
226,589
(68,757)
Desert Sands USD
2,537,415
4,441,405
6,978,820
8,013,886
(1,035,066)
County Superintendent of Schools
120,452
501,170
621,622
749,816
(128,194)
Desert Community College
670,813
923,613
1,594,426
1,827,721
(233,295)
Mosquito Abatement District
488,287
336,034
824,321
939,992
(115,671)
Coachella Valley Water Dstrict
527,123
1,804,981
2,332,104
2,689,199
(357,095)
Desert Recreati on District
60,937
126,733
187,670
232,106
(44,436)
Coachella Valley Unified School District
834,077
-
834,077
817,722
16,355
Coachella Valley Resource Conservation District
1,032
-
1,032
1,445
(413)
Supplemental Education Relief Augmentation Fund
4,850,687
(4,850,687)
Coachella Valley Public Cemetery
9,999
9,999
13,944
(3,946)
$ 20,211,350
$ 16,387,29;
$ 36,598,648
$ 46,524,946
$ (9,926,298)
Pass -through payments are paid based upon the actual amount of tax increment
property taxes collected in accordance with agreed upon formulas that vary from
agency to agency. A decrease of $5,075,61 1 in pass -through payments is anticipated
due to a forecasted 12.6% decrease in PA No. 1 tax increment property tax collections
from the Fiscal Year 2010/201 1 original budget and a 16.1 % decrease in PA No. 2 tax
increment property taxes from the Fiscal Year 2010/201 1 original budget.
A Supplemental Educational Relief Augmentation Fund (SERAF) payment in the amount
of $4,850,687 from the PA 2 Debt Service Fund to the State of California was
budgeted for and paid in Fiscal Year 2010/2011 and has not been budgeted for in
Fiscal Y 201 1 /2012.
Transfers Out — Capital Projects Fund
The Fiscal Year 201 1 /2012 preliminary budget contains a $5 million transfer from Debt
Service PA 1 to the Capital Project PA 1 Fund for future Capital Projects and a $2
million transfer from Debt Service PA 2 to the Capital Project PA 2 Fund.
Transfer Out — 2004 Housing Bonds
Funding to pay the 2004 Local Agency Revenue Bonds is paid through two separate
transfers. The first set of transfers occurs between the RDA 1 &2 Low & Moderate
Housing Funds and the RDA 1 &2 Debt Service Funds. The second set of transfers
occurs between the RDA 1 &2 Debt Service Funds and the Financing Authority Debt
p 092
Service Fund. These bonds were issued in June 2004 for low & moderate housing
purposes through the Financing Authority with the Redevelopment Agency making the
annual debt service payment. The allocation between Project Areas 1 & 2 to fund the
annual debt service is based upon tax increment revenues with 2/3 of the debt service
payment coming from Project Area 1 and 1 /3 coming from Project Area 2. The debt
service payments are made every six months and are due September 1"and March 15L.
The final payment is scheduled to be made in Fiscal Year 2034-2035. To fund the
debt service payment of the 2004 Local Agency Revenue Bonds, the PA 1 Debt
Service fund will transfer $3,956,162 to the La Quinta Financing Authority Debt
Service Fund and PA 2 debt service fund will transfer an additional $1,948,557 to the
La Quinta Financing Authority Debt Service Fund.
CAPITAL PROJECT FUNDS
For Fiscal Year 2011/2012, the capital project budget for PA 1 is $2,871,520 and
$2,413,234 for PA 2 as reflected on C-1 of the Fiscal Year 201 1 /2012 budget.
The following table lists the Capital Projects that are included in this year's budget as
outlined in H-1:
PrgectArea
capitalprojects
CIP1
LOWMODI
Subtotal.
CIP2
LOWMODI
Subtotal
FY 20110012
Sidewalks -Various Locations
-
-
25,000
25,000
Handicap Access Ramps- Various Locations
-
10,000
10.000
Highway III Sidewalk knpvenents
-
12,000112.000
T
Fred WadngPalm Royale Island Median lmpnow
-
100.000100,000
Coral Mountain Apartments
2,871,520
2A71,520
2,1
5,037.754
Total
E -
$ 2,671,520
5 2,671,520
E 247,000
E 2, 788,23/
$ 2A73,234
E 5284,750
In addition to the projects listed above in PA 1 and 2, expenditures are planned for
economic, legal matters and General Fund reimbursements for services.
LOW AND MODERATE HOUSING FUNDS
For Fiscal Year 201 1 /2012, the low and moderate housing budget for PA 1 is
$10,171,165 and $5,346,751 for PA 2 as reflected on Page C-1 of the Fiscal Year
2011 /2012 Budget.
The source of funding for these funds comes from 20% of the tax increment on
property taxes generated in each project area. The funds are used directly for low- and
moderate -income housing or to pay debt service on bonds that are raised to generate
low- and moderate -income housing.
In PA 1, $800,000 was set aside for foreclosure acquisitions, $220,000 was set aside
for a Habitat for Humanity project, and $520,000 was set aside for 2nd trust deed
•" 0,93
home purchase payments. A transfer of $3,956,162 will be made to the Debt Service
1 Fund to pay a portion of the 2004 Local Agency Bond debt service and $475,347 to
pay for an 18.50% portion of the 1994 Tax Allocation Bonds. The balance is used to
reimburse the General Fund for its services and for professional consultant and legal
services.
In PA 2, $1,948,557 will be transferred to the Debt Service 2 Fund to pay a portion of
the 2004 Local Agency Bond, and $450,000 is budgeted for foreclosure acquisition.
The balance of funds will be used to reimburse the General Fund for its services and
for professional consultant and legal services.
REVENUES
The total revenue for the Redevelopment Agency for Fiscal Year 201 1 /2012 is
estimated to be $68.2 million, of which tax increment totals over $68.0 million as
detailed on the following chart:
Project Area 1
Capital
Low/Moderate
2004 Housing
FY 2011/2012
FY 2010/2011
Increase
Revenue Type
Debt Service
Projects
Income
Bond
T
I Total
(Decrease)
Tax Increment
$ 35,209,600
$ 8,802,400
$ 44,012,000
1 $ 49,561,000
$ (5,649,000)
Interest
3,000
44,600
44,600
92,100
85,400
6,700
LQ Rental Program
Home Sale Proceeds
-
150,000
(150,000)
Saleof Land
-
Total
$ 35,212,600
$ 44,500
$ 8,847,000
$ -
$ 44,104,100
$ 49,796.400
$ (5,692,300)
Pro ect Area 2
Capital
Low/Moderate
2004 Housing
FY 201112012
FY 2010/2011
Increase
Revenue Type
Debt Service
Projects
Income
Bond
T
I Total
(Decrease)
Tax Increment
$ 19,201,924
$ 4,800,480
$ 24,102,414
$ 27,867,200
$ (3,864,796)
Interest -
200
60,800
4,815
65,815
73,100
(7,285)
LQ Rental Program
669,300
(669,300)
Home Sale Proceeds
-
SaleofLantl
Total
$ 19202,124
$ -
$ 4,861,280
$ 4,815
$ 24,068.219
$ 28,609,600
It (4,541,381)
Pro ect Areas 1 &
2
Capital
Low/Moderate
2004 Housing
FY 2011/2012
FY 2010/2011
Increase
Revenue Type
Debt Service
Projects
Income
Bond
Total
Total
(Decrease)
Tax Increment
$ 54,411,524
$ -
$ 13,602,880
$ -
$ 68,014,404
$ 77,428,200
$ (9,413,796)
Interest
3,200
44,500
105,400
4,815
157,915
158,500
(585)
LQ Rental Program
-
-
669,300
(669,300)
Home Sale Proceeds
-
-
-
- 150,000
(150,000)
Sale of Land
-
-
Tolal
$ 54,414,724
$ 44,500
$ 13,708,280
$ 4,815
$ 68,172,319
$ 78,406,000
$ (10,233,681)
Major changes from last year include a reduction of $9.41 million in tax increment
property taxes. In addition, the La Quinta Rental program rent revenues in PA 2 were
transferred to the La Quinta Housing Authority in Fiscal Year 2010/201 1.
FINDINGS AND ALTERNATIVES:
Staff is requesting:
1) Review and comment on the Fiscal Year 201 1 /2012 La Quinta Redevelopment
Agency Preliminary Budget and provide direction regarding any proposed
changes to the document; and
2) Approval of the Fiscal Year 2011 /2012 Fiscal Year La Quinta Redevelopment
Agency Preliminary Budget as amended at the June 21, 2011, La Quinta
Redevelopment Agency Meeting. (Any approved changes by the Agency will
be incorporated into the Final Budget for adoption on July 5, 2011.)
Respectfully submitted,
v� 1� d—'C'A�
John M. Falconer, Finance Director
Approved for submission by:
Thomas P. Genovese, Executive Director
~" C95
c&,,,,, 4 4 Q"
MEMORANDUM
TO: The Honorable Mayor and Members of the City Council
FROM: Thomas P. Genovese, City Manage,F-�fJ
DATE: June 16, 2011 ! T
SUBJECT: REDEVELOPMENT AGENCY AGENDA ITEM:
CONSIDERATION OF FISCAL YEAR 2011/12 PRELIMINARY
BUDGET
Moved from B1 to B2
This item was distributed to Council Members on June 14, 2011 for early
review. It was designated as agenda item number 61 at that time.
On the final agenda for the June 2155 Redevelopment Agency meeting, this
item was moved to 62 so that one item, which is expected to draw
attendees, could be heard first.
«. C96