2011 10 18 RDA6v# 4 44dja
Redevelopment Agency agendas are
available on the City' web page
@ www.la-quinta.org
REDEVELOPMENT AGENCY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
TUESDAY. OCTOBER 18. 2011 AT 4:00 P.M.
Beginning Resolution No. RA 2011-034
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 MINUTES OF OCTOBER 4, 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 OCTOBER 18, 2011
REDEVELOPMENT AGENCY AGENDA 1 OCTOBER 18, 2QIG.' 0
2. RECEIVE AND FILE TREASURER'S REPORT DATED AUGUST 31, 2011
3. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED AUGUST
31, 2011 AND INVESTMENT SUMMARY REPORT FOR THE QUARTER
ENDING SEPTEMBER 30, 2011
4. APPROVAL OF SEPARATELY ISSUED LA QUINTA REDEVELOPMENT
AGENCY ANNUAL AUDITED FINANCIAL STATEMENTS FOR THE YEAR
ENDED JUNE 30, 2011
BUSINESS SESSION - NONE
STUDY SESSION
DISCUSSION REGARDING WASHINGTON STREET APARTMENTS
CHAIR AND BOARD MEMBERS' ITEMS — NONE
PUBLIC HEARINGS — NONE
ADJOURNMENT
The next regular meeting of the Redevelopment Agency will be held on November
1, 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 October
18, 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 October 14, 2011.
DATED: ctober 14, 2011
VERONICA J. ONTECINO,
City of La inta, California
p 002
REDEVELOPMENT AGENCY AGENDA 2 OCTOBER 18,2011
Public Notice
Any writings or documents provided to a majority of the Redevelopment Agency regarding
any item on this agenda will be made available for public inspection at the City Clerk
counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during
normal business hours.
REDEVELOPMENT AGENCY AGENDA 3
OCTOBER 18, 2011
RDA MEETING DATE: October 18, 2011
ITEM TITLE: Approval of Demand Register Dated
October 18, 2011
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and File the Demand Register Dated
October 18, 2011 of which $141.88
represents Redevelopment Agency Expenditures.
AGENDA CATEGORY:
BUSINESS SESSION
CONSENT CALENDAR I
STUDY SESSION
PUBLIC HEARING
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
M• 004
`ei� 4 4& Qu&rcv
COUNCILIRDA MEETING DATE: October 18, 2011
ITEM TITLE: Receive and File Transmittal of
Treasurer's Report as of August 31, 2011
RECOMMENDATION:
It is recommended the La Quinta Redevelopment Agency:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 2-
STUDY SESSION:
PUBLIC HEARING:
Receive and File the Treasurer's Report dated August 31, 2011.
PLEASE SEE BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
��.` 005
T4t�v 4 CP QuIRAL
COUNCIL/RDA MEETING DATE: October 18, 2011
ITEM TITLE: Receive and File Transmittal of Revenue
and Expenditure Report dated August 31, 2011 and
Investment Summary Report for the Quarter Ending
September 30, 2011
RECOMMENDATION:
Receive and File.
FISCAL IMPLICATIONS:
None.
CHARTER CITY IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
AGENDA CATEGORY:
BUSINESS SESSION: _
CONSENT CALENDAR: 3
STUDY SESSION:
PUBLIC HEARING:
Receive and File Transmittal of the August 31, 2011 Statement of Revenue and
Expenditures for the La Quinta Redevelopment Agency and Investment Summary
Report for the Quarter Ending September 30, 2011.
Respectfully submitted,
John M. Falconer, Finance Director
006
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachments: 1. Revenue and Expenditures Report, August 31, 2011
2. Investment Summary Report for the Quarter Ending September
30, 201 1
007
N 1 1 NVn1r1�.� .
LA GUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO, 1:
LOW/MODERATE TAX FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Miscellaneous revenue
Non Allocated Interest
Home Sales Proceeds
Sale of Land
Sewer Subsidy Reimbursements
Rehabilitation Loan Repayments
2nd Trust Dead Repayment
Williams Nate Payment
Transfer In
TOTAL LOWIMOD 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
2011 TAXABLE HOUSING BOND FUND:
Pooled Cash Allocated Interest
Non Allocated Interest
Developer Agreement Funding
Sale of Land Proceeds
Rental Income
Litigation Proceeds
Transfers In
TOTAL 2011 TAXABLE HOUSING BOND
07MI/Ol l - 08131I20T1
ADJUSTED REMAINING %
BUDGET RECEIVED BUDGET RECEIVED
8,802,400.00
0,00
8,802,400.00
0,000%
4,600.00
(11,098.49)
55,69849
-24,880%
0.00
210,33
(210,33)
0.000%
0,00
0.00
0.00
0.000%
000
0,00
0.00
0.000%
0.00
0.00
0.00
0.000 %
coo
0.00
000
0.000%
a.ao
0.00
0.00
0.000%
0,00
0,00
0,00
0000%
000
0.00
0,00
0,000%
0.00
0.00
0.00
Cow%
0.00
0,00
0.00
0.000%
8,847,000.00
(10,888.16)
8,857,888. 16
-0.120%
35,209,WO 00
0,00
35,209 600 00
0,wo-A
3,000.00
(3,947,16)
6,947.16
-131.570%
0.00
0.00
0.00
0.000%
0.00
0.00
0.00
0.000%
0,00
000
0.00
0.000%
5486445.00
0.00
5,486,445.00
0,000%
40,699,04500
(3,947.16)
40,702,992,16
-0.010%
25,700.00
(39,723,14)
65,423.14
-154,560%
18,800.00
0.00
18,800,00
0.000%
0.00
000
0.00
0.000%
0.00
0.00
0.00
0.000%
000
0.00
0.00
0.000%
0.00
0.00
000
0.000%
5000, 000.00
0.00
5.0W,(XX) 0
0.000%
5,044,500.00
(39,723.14)
5,084,223.14
-0.790%
0.00
0.00
000
0,000%
0.00
0.00
0.00
0.000%
0.00
0.00
0,00
0.000%
0.00
0.00
0.00
0,wo%.
0.00
0.00
0.00
0.000%
0.00
0,00
0.00
0,000%
0.00
0,00
0.00
0.000%
0.00
0.00
000
0.000%
008
LA OUINTA REDEVELOPMENT AGENCY
EXPENDITURE SUMMARY
PROJECT AREA NO. 1:
ADJUSTED OW31111 REMAINING
BUDGET EXPENDITURES ENCUMBERED BUDGET
LOWNODERATE TAX FUND:
SERVICES
536,575.00
2,600.00
0.00
533,975.00
2n0 TRUST DEED PROGRAM
520,000.00
81,000.00
ODD
439,000.00
HABITAT FOR HUMANITY
3W,160.00
5, Im.00
0.DO
295,080.00
LANDACOUISITION
0.00
0.00
0.00
0.00
LOW MOD HOUSING PROJECTS
0.00
0.00
0.00
0.00
FORECLOSURE
809000.00
0.00
0.00
809000.00
REIMBURSEMENT TO GEN FUND
791,561.D0
131.928.00
0.00
659,63&W
TRANSFERS OUT
9622246W
75.254.18
0.00
9548990.82
TOTAL LMNOD TAX
DEBT SERVICE FUND:
SERVICES
411600.00
3,180A0
0.00
408,420.00
BOND PRINCIPAL
3,540,000.00
0.00
0.00
3,540,000.00
BOND INTEREST
6,724.310.00
0.00
0.00
6,724,310.00
PASS THROUGH PAYMENTS
20,211,350.00
412,909.22
0.00
19,798,440,78
ERAF SHIFT
0.00
0.00
0.00
0,00
TRANSFERS OUT
10011,098.00
0.00
0.00
10,011098.00
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
_
2011 TAXABLE HOUSING BOND
SERVICES 205, 700.00 92WOO 0.00 IN 450.00
REIMBURSEMENT TO GEN FUND 407, 125,00 67,856.00 0.00 339,269,00
TRANSFERS OUT 22.683,%4.00 325,348.06 0.00 22358,615.94
TOTAL CAPITAL IMPROVEMENT ,4 .
SERVICES 0.00 8.678.22 0,00 (8,678.22)
TRANSFERS OUT 0.00 0.00 0,00 0.00
TOTAL 2011 TAXABLE HOUSING BOND 0,00 867822 0 wI
�• ' 009
LA GUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO. 2:
07/0112011-0813112011
ADJUSTED REMAINING %
BUDGET RECEIVED BUDGET RECEIVED
LOWNODERATE TAX FUND:
Tart Increment
Allocated Interest
Nan Allocated Interest
Developer funding
2nd Trust Dead Repayment
Sale of Land
Transfer In
TOTAL LOW/MOD TAX
2004 LOW/MODERATE BOND FUND:
Allocated Interest
Home Sale Proceeds
Non Allocated Interest
Transfer In
TOTAL LOW/MOD BOND
DEBT SERVICE FUND:
Tex Increment
Allocated Interest
Non Allocated Interest
Interest Advance Proceeds
Transfer In
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
Allocated Interest
Non Allocated Interest
Misc Revenue
Sale of land
Transfers In
TOTAL CAPITAL IMPROVEMENT
4,SZO 480.00
0.00
4St0,480.W
O.WO%
60,800.W
(40,572.28)
101,372.28
-66.730%
0.00
0.00
0.00
0.000%
0.00
0.00
0,00
0,000%
O.W
8,744.99
(8,744.99)
0.000%
0 W
o.o0
0,00
0.000%
0,00
0.00
0,00
0000%
4,861,280.00
(31,827,29)
4,893,107.29
-0.65D%
0.00
0Oo
ow
o.Wo%
0.00
0.00
0.0o
O.Wo%
4,815.00
0.00
4,815.00
0.000%
0.00
0.00
0.00
0.000%
4, 815W
0.00
4,815.00
0. WO%
19,201,924.00
0.00
19,201,924C0
0.000%
200.00
(15,100,60)
15,300.60
-7550.300%
0.00
0.00
0.00
0. W0%
0,00
0.00
0.00
0.000%
2,468,152.W
0.00
2,468152.W
0.000%
21,670 276 00
(15,100.60)
21,685,376.60
-0.070%
0.W
(3,485,75)
3,485,75
O.WO%
0DO
0,00
0.00
0,000%
O.W
O.W
0.00
0,00%
000
000
0,00
0.000%
1,6W,OW.W
O.W
1,6W,OW.00
O.WO%
1,650,OOO.W
(3,485.75)
1653,485.75
-0.210%
2011 TAXABLE NON -HOUSING BOND FUND:
Pooled Cash Allocated Interest
0.00
000
0,00
0.000%
Non Allocated Interest
0,00
0.00
0.00
0,000%
Developer Agreement Funding
0.00
0.00
000
0,000%
Sale of Land Proceeds
000
0,00
0.00
a000%
Rental Income
0,00
000
0.00
0.000%
Litigation Proceeds
0.00
0.00
0.00
0.000%
Transfers In
0.00
0.00
0.00
0,000%
TOTAL 2011 TAXABLE NON41OUSING BOND
0,00
0.00
0.00
0.000%
0 010
LA OUINTA REDEVELOPMENT AGENCY
EXPENDITURE SUMMARY
PROJECT AREA NO 2-
LOW/MODERATE TAX FUND:
ADJUSTED O8t31111 REMAINING
BUDGET EXPENDITURES ENCUMBERED BUDGET
SERVICES
330,470.00
2,6WW
0D0
327,870.00
2ND TRUST DEEDS
0.00
0.00
0.00
0.00'
LOW MOD HOUSING PROJECTS
3,000.00
0.00
0.00
3,000.00
FORECLOSURE ACQUISITION
450,000.00
0.00
0.D0
45g000.00
REIMBURSEMENT TO GEN FUND
448,4W 00
74, 748.OD
0.00
373,742,W
TRANSFERS OUT
14,720,646.W
116,029.53
0.00
14604816.47
TOTAL LOW/MOD TAX
ON LOWIMODERATE BOND FUND
-
HOUSING PROGRAMS
0.00
0.00
0.00
0.00
LAND
0,00
0.00
0.00
0.00
TRANSFERS OUT
3307,155M
(2666191
0.00
330982119
TOTAL LOW/MOD BOND
3!3b7.T55:IXf
-17,898-7Er--
�o-3'AN24
DEBT SERVICE FUND:
SERVICES
255,100.00
3,025.00
0.00
252,075.00
BOND PRINCIPAL
380,000,00
0.00
0.00
380,000.00
BOND INTEREST
633,843 W
0.00
0.00
633.843.W
PASS THROUGH PAYMENTS
16.137,298 W
0.00
0.00
16, 137.298 W
ERAF SHIFT
0.00
0.00
0.00
0w
TRANSFERS OUT
4118, 152.00
0 m
0.00
4118152.00
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
2011 RDA 2 TAXABLE BOND FUND:
SERVICES 99,845.00 9,2WM 0.00 90,595,00
CAPITAL 0.00 0.00 0.00 0,00
REIMBURSEMENT TO GEN FUND 117,587.00 19,598,00 0.00 97989.00
SERVICES 0.00 8,491.31 0.00 (8,491.31)
ECONOMIC DEVELOPMENT 1,50g000A0 0.00 0.00 1, 500.000A0
TRANSFERS OUT 20,500.00 0.00 0.00 20,500.00
TOTAL RDA NO. 2 TAXABLE BOND
AIIACHMENT 2
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AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: October 18, 2011 BUSINESS SESSION:
—
CONSENT CALENDAR:
ITEM TITLE: Approval of -the Separately Issued La STUDY SESSION:
Quinta Redevelopment Agency Annual Audited —
Financial Statements for the Year Ended June 30, PUBLIC HEARING:
2011 —
RECOMMENDATION:
Approve, receive and file the Annual Audited Financial Statement for the year
ended June 30, 2011 (Attachment 1).
i
FISCAL IMPLICATIONS:
The report reflects the financial transactions for the Agency for the fiscal year. In
addition, a report on internal controls over financial reporting has been included
(Attachment 2) which reports no reportable findings.
BACKGROUND AND OVERVIEW:
At the end of every fiscal year, the Redevelopment Agency prepares an audited
financial report. ' Several of the highlights discussed in the Management's
Discussion and Analysis (MDA) Section include:
• The Agency's governmental activities net assets deficit increased $62.64
million, or-75.24%. This was primarily a result of the transfeering agency land
and buildings to the City or the La Quinta Housing Authority.
• During the year, the Agency had expenses that were $45.58 million more than
the $56.47 million in expenses recorded by the Agency in its governmental
activities in the prior year. This was primarily a result of the $41 million
repayment of Agency loans to the City.
-�. 013
• The Agency's governmental activities program revenues and general revenues
increased by $898,000, or 2.33% from the prior year, and program expenses
increased $45.58 million, or 80.73%.
Tax Increment Collections and Debt Service Payments
The Agency was able to meet its current year debt obligation in a timely manner
despite a decrease of 8.63% in actual Project Area 1 tax increment revenue
collections from the prior year and a decrease of 6.81 % in actual Project Area 2
tax increment revenue collections from the prior year. The decrease in tax
increment revenues experienced in Fiscal Year 2010-2011 is in addition to a
decrease of 4.94% and 8.87% in PA1 and PA 2 tax increment collections in Fiscal
Year 2009-2010. This is the first time since the inception of the La Quinta
Redevelopment Agency twenty two (22) years ago that the tax increment has
declined three consecutive years in a row and only the fourth time (Fiscal Year
1996-1997) that the tax increment has declined on a year to year basis.
The Agency paid $4.85 million during Fiscal Year 2010-2011 to fund the
Supplemental Educational Relief Augmentation Fund (SERAF) payment mandated
by the State of California.
Low- and Moderate -Income and La Quinta Housing Authority Activities
The operations of the La Quinta Housing Authority are separate funds that are
included in the La Quinta Redevelopment Agency Statements to compliment the
Low- and Moderate -Income activities being undertaken in the City. This year the
operations of the La Quinta Rental Program and the Washington Street Apartments
were transferred from the Redevelopment Agency to the Housing Authority. In
addition, the La Quinta Finance Authority issued $28.85 million of revenue bonds
to be used for low and moderate income projects to continue our commitment to
promoting high quality affordable housing in the community.
Capital Projects and Assets
This year's major additions (deletions) to capital assets were as follows:
Purchase of Village Properties - $ 8.23 million
Transfer of $27.73 million and $27.45 million in land and buildings used for public
purposes to the La Quinta Housing Authority and the City of La Quinta,
respectively.
•..0 014
The sale of two parcels of property, with a historical cost of $17.16 million, to the
City of La Quinta.
The La Quinta Redevelopment Agency issued $6 million Project Area No. 2 Non -
Housing bonds to fund future economic development/capital projects within the
project area.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Redevelopment Agency include:
Approve, receive and file the Annual Audited Financial Statement for the
year ended June 30, 2011; or
2. Do not approve, receive and file the Annual Audited Financial Statement for
the year ended June 30, 201 1; or
3. Provide staff with alternative direction.
Respectfully submitted,
John M. Falconer, Finance Director
Approved for submission by:
i
Thomas P. Genovese, Executive Director
Attachment: 1. Annual Audited Financial Statement for the year ended June
30, 201 1
2. Report on Internal Controls over Financial Reporting
.'a 015
ATTACHMENT 1
LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA, CALIFORNIA
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2011
.w.J 016
LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA, CALIFORNIA
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2011
-" 017
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"a. ; 018
LA QUINTA REDEVELOPMENT AGENCY
JUNE 30, 2011
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITOR'S REPORT.............................................................................................1
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND INTERNAL
CONTROL OVER COMPLIANCE............................................................................................... 3
Management's Discussion and Analysis ......
BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements:
.......................................................................... 5
Statementof Net Assets. ........................................................ ............... .................... ............. 13
Statementof Activities...............................................................................................................15
Fund Financial Statements:
Balance Sheet - Governmental Funds......................................................................................
16
Reconciliation of the Balance Sheet of Government Funds
to the Statement of Net Assets..................................................................................................
19
Statement of Revenues, Expenditures and Changes in Fund
Balances - Governmental Funds...............................................................................................
20
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statementof Activities...............................................................................................................
23
Budgetary Comparison Statement — Low/Moderate Income Housing Fund — PA No. 1..........
24
Budgetary Comparison Statement — Low%Moderate Income Housing Fund — PA No. 2..........
25
Budgetary Comparison Statement — Housing Authority Fund — PA No. 1................................
26
Budgetary Comparison Statement — Housing Authority Fund — PA No. 2................................
27
Notes to Financial Statements......................................................................................................
29
COMBINING AND INDIVIDUAL FUND SCHEDULES
Combining Project Area Balance Sheet -
AIIGovernmental Funds...............................................................................................................48
Combining Project Area Statement of Revenues,
Expenditures and Changes in Fund Balances -
AII Governmental Funds...........................................................
Computation of Low and Moderate Income Housing
Funds Excess/Surplus '..............................................................
.......................................... 52
......................................... 55
a. , 019
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020
aL A
CERTIFIED PUBLIC ACCOUNTANTS
Brandon W. Burrows, CPA
• David E. Hale, CPA, CFP
A Professional Corporation
* Donald G. Slater, CPA
" Richard K. Kikuchi, CPA
" Susan F. Matz, CPA
Shelly K. Jackley, CPA
Bryan S. Gruber, CPA
INDEPENDENT AUDITOR'S REPORT
To the Honorable Chair and Members of the Governing Board
La Quinta Redevelopment Agency
City of La Quinta, California
We have audited the accompanying financial statements of the governmental activities, each major fund,
and the aggregate remaining fund information of the La Quinta Redevelopment Agency (Agency), a
component unit of the City of La Quinta, California, as of and for the year ended June 30, 2011, which
collectively comprise the Agency's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Agency's management. Our responsibility is to express
opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Gouemment Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. 1 An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and the significant estimates made by management, as well as evaluating the overall financial
statement presentation! We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of the Agency, as of June 30, 2011, and the respective changes in financial position and
budgetary comparisons for the Low/Moderate Income Housing Fund — PA No. 1, Low/Moderate Income
Housing Fund — PA No; 2, Housing Authority Fund — PA No. 1 and Housing Authority Fund — PA No. 2,
thereof for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
We would like to draw the reader's attention to Note 16 — "California Redevelopment Agency
Uncertainty'. The note provides information on two bills passed, AB1X26 and 27 which dissolve
redevelopment agencies effective October 1, 2011 and provide an option to avoid dissolution by making
certain defined payments.
In accordance with Gouernment Auditing Standards, we have also issued our report dated
September 27, 2011, on our consideration of the Agency's internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing
the results of our audit.
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis'las listed in the table of contents be presented to supplement the basic financial
Lance, Sall & Lundhard, UP 203 North Brea Boulevard , Suite 203 " Brea, CA 92821 • TEL: 714.672.0022 " Fax: 714.672,0331 www.lslcpas.com
41185 Golden Gate Circle • Suite 103 , Murrieta, CA 92562 - TEL: 951.304.2728 Fax: 951.304.3940 .. 071
Juk%o64e
To the Honorable Chair and Members of the Governing Board
La Quinta Redevelopment Agency
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Agency's financial statements as a whole. The combining project area statements and
computation of low and moderate income housing funds excess/surplus are presented for purposes of
additional analysis and pare not a required part of the financial statements. These are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the financial statements. The information has been subjected to the auditing procedures
applied in the audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the information is fairly stated in all material respects in relation to the financial statements as a whole.
11 i50,
- M"VA I '. , - ,
Brea, California
September 27, 2011
•N0 i . 022
0
LSL
CERTIFIED PUBLIC ACCOUNTANTS
• Brandon W. Burrows, CPA
• David E. Hale, CPA, CFP
A Protesslonal Corpora Non
• Donald G. Slater, CPA
• Richard K. Kikuchi, CPA
• Susan F. Mat[, CPA
+ Shelly K. Jackley, CPA
• Bryan S. Gruber, CPA
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE
AND INTERNAL CONTROL OVER COMPLIANCE
To the Honorable Chair and Members of the Governing Board
La Quintal Redevelopment Agency
City of La Quinta, California
Compliance
We have audited La Quinta Redevelopment Agency's (Agency) compliance with the California Health and
Safety Code as required by Section 33080.1 for the year ended June 30, 2011. Compliance with the
requirements referred to above is the responsibility of Agency's management. Our responsibility is to
express an opinion on Agency's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and the Guidelines for Compliance
Audits of Califomia Redevelopment Agencies, June 2011, issued by the State Controller and as
interpreted in the Auditing Procedures for Accomplishing Compliance Audits of California Redevelopment
Agencies, August 2011, issued by the Governmental Accounting and Auditing Committee of the California
Society of Certified Public Accountants. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether noncompliance with the compliance requirements referred to
above that could have a material effect on redevelopment program has occurred. An audit includes
examining, on a test basis, evidence about the Agency's compliance with those requirements and
performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the
Agency's compliance with those requirements.
In our opinion, the Agency complied, in all material respects, with the compliance requirements referred to
above that are applicable to the redevelopment program for the year ended June 30, 2011.
Internal Control Over Compliance
Management of the Agency is responsible for establishing and maintaining effective internal control over
compliance with the compliance requirements referred to above. In planning and performing our audit, we
considered the Agency;s internal control over compliance to determine the auditing procedures for the
purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of the Agency's internal control over compliance.
A deficiency in internal 'control over compliance exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned functions; to prevent,
or detect and correct, noncompliance on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that
there is a reasonable possibility that material noncompliance with a compliance requirement will not be
prevented, or detected and corrected, on a timely basis.
Lance, Soil 6 Lunghard, LLP 203 North Brea Boulevard • Suite 203 • Brea, CA 92821 • TEL: 714.672.0022 • Fax 714.672.0331 wwr.lslcgas.eom
41185 Golden Gate Circle • Suite 103 • Murrieta, CA 92562 TEL: 951.304.2728 - Fax: 951.304.3940
"4.v 0 2 3
Gorda
0e
CErtlIf1F0IYlli[A[COYYTAMI8
To the Honorable Chair;and Members of the Governing Board
La Quinta Redevelopment Agency
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control that might be
deficiencies, significant deficiencies, or material weaknesses in internal control over compliance. We did
not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
This report is intended flor the information of management, the Audit Committee, and the California State
Controller and it is not! intended to be and should not be used by anyone other then these specified
parties.
Brea, California
September 27, 2011
-.11.: 024
LA QUINTA REDEVELOPMENT AGENCY
MANAGEMENT'S DISCUSSION AND ANALYSIS
June 30, 2011
Our discussion and analysis of the La Quinta Redevelopment Agency's (Agency)
financial performance for the fiscal year ended June 30, 2011, provides a
comparison of current year to prior year ending results based on the government -
wide statements, an analysis of the Agency's overall financial position and results
of operations tol assist users in evaluating the Agency's financial position, and a
discussion of significant changes that occurred within each fund. In addition, it
describes the activities during the year for capital assets and long-term debt. We
end our discussion and analysis with a description of currently known facts,
decisions and conditions that are expected to have a significant effect on the
financial position or results of operations. Please read it in conjunction with the
Agency's financial statements.
FINANCIAL HIGHLIGHTS
• The Agency's governmental activities net assets deficit increased $59.70
million, or -72%.
• During the year, the Agency had expenses that were $45.58 million more than
the $56.47 million in expenses recorded by the Agency in its governmental
activities in prior years.
• The Agency's'governmental activities program revenues and general revenues
increased by $3,839,000, or 10% from the prior year, and program expenses
increased $45.58 million, or 80.73%.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of
Net Assets and Statement of Activities provide information about the activities of
the Agency as a whole and present a long-term view of the Agency's finances.
Following these, Statements are governmental fund statements that tell how
these services were financed in the short teen as well as what remains for future
spending. Fund financial statements also report the Agency's operation in more
detail than the government -wide statements by providing information about the
Agency's most significant funds.
REPORTING THE AGENCY AS A WHOLE
The financial reports contained in this document are prepared on two basis of
accounting — accrual and the modified accrual basis of accounting as follows:
-.4.0 025
Government -Wide Financial Statements:
The Statement of Net Assets and the Statement of Activities report information
using the accrual basis of accounting, which is similar to the accounting used by
most private -sector companies. All of the current year's revenues and expenses
are taken into account regardless of when cash is received or paid.
These two statements report the Agency's net assets and changes in them. Net
assets are thee, difference between assets and liabilities, which is one way to
measure the Agency's financial health, or financial position. Over time, increases
or decreases in the Agency's net assets are an indication of whether its financial
health is improving or deteriorating.
In the Statement of Activities, we separate the Agency expenditures into general
government, planning and development and interest on long-term debt.
Revenues are separated into program and General revenues. The major General
revenue is property taxes, which are netted against the payments the Agency
must pay to other agencies in accordance with Tax Sharing Agreements.
Both of these Statements are summary in nature as opposed to the following
discussion of the Fund Financial Statements, which are more detailed in nature.
Fund Financial Statements:
The fund financial statements provide detailed information about the most
significant funds and other funds — not the Agency as a whole. Some funds are
required to bel established by State law and by bond covenants. However,
management established many other funds to help it control and manage money
for particular purposes or to show that it is meeting legal responsibilities for using
certain taxes, grants and other resources.
The Agency only has governmental type funds.
Governmental' Funds - Most of the Agency's basic services are reported in
governmental funds, which focus on how money flows in and out of those funds
and the balances left at year-end that are available for spending. These funds
are reported using the modified accrual basis of accounting, which measures
cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the Agency's
general government operations and the basic services it provides. Governmental
fund information helps determine whether there are more or fewer financial
resources that can be spent in the near future to finance the Agency's programs.
The differences of results in the Governmental Fund financial statements to
those in the Government -Wide financial statements are explained in a
reconciliation following each Governmental Fund financial statement.
«a. • 026
THE AGENCY 'AS A WHOLE
The analysis below focuses on the net deficit and changes in net deficit of the
Agency's Government -Wide activities.
The Agency's net assets deficit increased $59.7 million, or -72%.
NET ASSETS '
Governmental activities
Description
ZU11
201 u
unange
Current and other assets
$ 102, 669,302
$ 126,077,764
$ (23,2 88,462)
Capital assets
t0,630,944 -
73,459,707
(62,828,763)
Total assets
113,500,246
199,537,471
(86,037,225)
Uument liabilities
,
Non -current liabilities
251,841,013
264,980,257
(13,139,244)
Total liabilities
256,452,077
282,789,641.
(26,337,564
Net assets,
-
28,295,747
(28,295,747)
Invested in capital assets,
net of related debt
Restricted
36,262,681
54,781,140
(18, 118,4 99)
Unrestricted
(179,214,512)
(166,329,057)
(12,855,455)
otal net assets
The Agency's Net Assets are made up of three components: Investment in
Capital Assets, Net of Related Debt, Restricted Net Assets and Unrestricted Net
Deficit. Unrestricted deficit, the part of net deficit that can be used to finance
day-to-day operations, increased from $(166.33) million to $(179.21) million, or
7.75%. The Agency currently has an unrestricted net deficit because of the debt
it has issued. Proceeds from the debt were used for capital improvements on
behalf of the City or contributed to other taxing agencies or the public and is not
offset by investments in capital assets. Examples of these contributions would be
the issuing of bonds to construct flood control improvements which were donated
to the Coachella Valley Water District, bond proceeds that were used for street
improvements in the Cove that were dedicated to the City, and bond proceeds for
the construction of SilverRock that were dedicated to the Golf Enterprise Fund.
Total assets decreased by $86.04 million, which generally represents a decrease
in cash of $52.58 million, a decrease of capital assets of $62.83 million, an
increase of restricted cash from bond proceeds of $26.03 million and an increase
in loans receivable of $ 3.03 million.
Total liabilities '!decreased by $26.34 million, which generally represent an
increase in accounts payable of $3.99 million, a decrease of pass through
payments to other governmental entities of $13.26 million, and a net decrease of
$13.49 million in' long term liabilities due in more than one year.
.p 027
CHANGES IN NET ASSETS
escrip ion
Program revenues:
2011 2010 Change
Charges or services
Operating grans and con n u ons
Uapitai grans and contriDutions
_
t3eneral revenues:
ropey taxes(net of pass -through paymen s
Use of money and property
Intergovernmental
_
Gain on sale ot asses,
IZU,bZ_
Uther
o revenues
x anses:
_
enera govemmen
arming and development
Contributions to other -governments
Capital contrioutions to o er agencies
_
interest on ong- rn dent
otal expenses
Change in Net Assets
Net assets -
e asse -
Total revenuesl',increased by $3,839,000 to $42.35 million, or 10%. The major
reasons that contributed to the net increase were the following:
• Decrease in property values that provided less tax increment revenue (net of
pass -through payments of — 8.66%.
• Increase in use of money and property from the sale of property at Silver -Rock
($4.88 million) and along Highway 111 ($3.45 million).
The major factors that contributed to the increase in expenses from $56.47
million to $102.1, million or 80.81 % was:
Increase
primarily
Housing
GOVERN
1 million in capital contributions
transfer of public property an(
y and the City of La Quinta.
FUNDS
to other agencies consisting
buildings to the La Quinta
The combined fund balance of $92.73 million decreased from $106.07 million, or
- 12.58%. The Agency has restricted as nonspendable a total of $ 65.13 million in
long term receivables, future debt service and low and moderate income housing
purposes. In addition, $27.60 million has been assigned for future community
development construction projects. More detailed information about the
combined fund balance reserves may be found in the notes to the financial
statements.
028
Major funds balance changes are noted below:
• For the 2011 Low and Moderate Income Housing Fund, fund balance
increased by $25.54 million from a $28.85 million bond issue.
• For the 2004 Low and Moderate Income Housing Fund, fund balance
decreased $119,000.
• For the Redevelopment Agency Debt Service PA 1 and PA 2 Funds, fund
balances decreased by $8.07 million and $13.90 million, respectively, based
upon tax increment revenues and interest earnings exceeding debt service,
pass throughh payments, and transfers. In addition, $22 million in debt service
payments for the repayment of an outstanding advance to the City in Debt
Service PA No. 1 Fund and a similar increase of $19.38 million in debt service
payments for the repayment of an outstanding advance to the City in Debt
Service PA No. 2 Fund were made.
• For the Redevelopment Agency Low and Moderate Income PA 1 and PA 2
Funds, fund balance increased by $811,000 and $1.16 million, respectively,
based upon ,tax increment revenues and interest earnings exceeding debt
service transfers, capital outlay, and general and planning and development
expenditures!
• The Redevelopment Agency Capital Project PA 1 Fund decreased by $20.85
million based upon the use of money and property being less than general
costs, capital 'outlays, and transfers.
• The Redevelopment Agency Capital Project PA 2 Fund increased by $587,000
based upon the use of money and property and the issuance of $6 million in
bonds being more than general costs, capital outlays, and transfers.
• For the Housing Authority Special Revenue PA 1 and PA 2 Funds, fund
balances increased by $930,000 and $620,000, respectively, based upon
transfers into Ithe funds for the La Quinta Cove and Washington Street rental
programs.
More detailed information on the fund financial statements balances is presented
in the notes to the financial statements.
..4 029
I
I
Budgetary Highlights
During the Fiscal Year, the Agency's Board makes revisions to the Agency
budget. Revisions are made on a case by case basis and presented to the
Agency Board by staff for their consideration at Agency Board meetings. These
revisions are generally for appropriations relating. to Capital Improvement
Projects to request an additional appropriation o cover the cost of a change
order or an additional construction amount based ,on a bid opening. In addition, a
review of all revenue and expenditure Agency lire items is conducted by staff
based upon mid -year data to determine if changes in other revenue and
expenditure line items should be presented to the Agency Board for their
consideration.
Formal budgetary integration is employed as a \management control device
during the year for all Agency Funds. Budgetary data for the Agency two (2)
Special Revenue Housing Funds has been presented herein. More detailed
information about the Agency's budget is presented in the Notes to the financial
statements. In addition, the Capital Projects No. 2 Fund includes the unspent
bond proceeds from the 2011 Subordinate Taxable Tax Allocation Bonds.
In addition, during Fiscal Year 2009-2010, the La Quinta Housing Authority was
created. This separate legal entity has been included in the La Quinta
Redevelopment Agency Statements and follows the same budgetary practices
that were previously discussed.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of 2011, the Agency had $10.63 million invested in land. This amount
represents a decrease of $62.83 million, or 85.53% over last year.
CAPITAL ASSETS NET OF DEPRECIATION)
escnplon
2011
2010
Change
Land
w Ings
Less ACCUMu a epreaa Ion
Net Buildings a er eprecla Ion
oa
This year's additions to capital assets were as follows:
The Agency purchased $8.23 million in land in the Village of La Quinta.
10 030
This year's deletions to capital assets were as follows:
• The Agency transferred land and buildings with a historical cost of $27.73
million, to be used for public purposes, to the La Quinta Housing Authority.
• The Agency transferred land and buildings with a historical cost of $27.45
million, to be used for public purposes, 'to the City of La Quinta.
• The Agency sold two single family homes with a historical cost of $283,000 to
income eligible families.
• The Agency sold two parcels of property with a historical cost of $17.16
million, to be used for public purposes, to the City of La Quinta.
Debt
At year-end, the Agency's governmental activities had $251.84 million in bonds
and notes versus $264.98 million last year, a decrease of $13.14 million, or
-4.96%.
OUTSTANDING DEBT AT YSkR END
escnpion
2011
2010
Change
Loans Payable
i y Advances
Pass through agreement
Tax allocation bonds ( net
originalissuediscount)
137,531,922
135,031,234
$ 2,500,688
evenue on st net ongina
issue premium)
109,821,032
83,024,965
1 $ 26,796,067
oa
The Agency was able to meet its current year debt obligation in a timely manner.
In addition the Agency repaid the City $41.38 million in advances during the year
and issued two bond issues - $6 million in subordinated non -housing taxable
bonds and $28.85 million in subordinated housing taxable revenue bonds.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
In preparing for Fiscal Year 2011-2012, management is looking at the following
factors that will impact its operations:
The State of California Budget for Fiscal Year 2011/2012 included AB x1 26 (the
"Dissolution Act") which immediately suspends all new redevelopment activities
and incurrence of indebtedness, and dissolves redevelopment agencies effective
October 1, 2011; and AB x1 27 (the "Continuation Act") which allows
redevelopment agencies to avoid dissolution under the Dissolution Act if their
11 031
host cities/counties elect to comply with the alternative redevelopment program
described in Part 1.9 thereof. Under the Continuation Act, a redevelopment
agency can continue to exist if its host community commits to. making certain
payments beginning in January of 2012. On August 2, 2011, the City Council
adopted an ordinance declaring the City's decision to comply with the
Continuation Act in order to enable the Agency to resume its redevelopment
activities.
The California Redevelopment Association, the League of California Cities, and
two cities filed a legal challenge to the Dissolution Act and the Continuation Act
directly in the California Supreme Court. On August 11, 2012, the Court issued
an order indicating that it would exercise jurisdiction over the lawsuit. The Court
set an expedited briefing schedule to allow it to decide the case before the first
payment is due in January 2012. The Court also stayed the effectiveness of all
of the Continuation Act, and portions of the Dissolution Act.
Because the Continuation Act is currently on hold, the Agreement provides that it
is not effective until the Dissolution Act and Continuation Act have been upheld
by the Court. The Agreement also attempts to preserve the Agency's and City's
right to challenge the Dissolution Act and/or Continuation Act, and provides that it
automatically terminates if any court of competent jurisdiction determines that
either the Dissolution Act or Continuation Act are unconstitutional or otherwise
invalid.
While the Redevelopment Agency's Project Areas have available land for future
development, the recent economic downturn has impacted property tax values in
two ways. Construction activity has slowed significantly and projects that had
been approved and planned have been postponed due to the inability of builders
and buyers to obtain financing. In addition, existing properties have had their
property values reassessed downward by the County Assessor.
CONTACTING THE AGENCY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers,
and investors and creditors with a general overview of the Agency's finances and
to show the Agency's accountability for the money it receives. If you have
questions about this report or need additional financial information, contact
Mr. John Falconer in the Finance Department at the City of La Quinta, 78-495
Calle Tampico, La Quinta, California 92253-1504, or (760) 777-7150.
12 -° 032
LA OUINTA REDEVELOPMENT AGENCY
STATEMENT OF NET ASSETS
JUNE 30, 2011 -
Assets:
Cash and investments
Receivables:
Tax increment
Accounts
Interest
Loans
Total Receivables
Due from other governments
Deposits with others
Prepaid costs
Deferred charges
Net pension asset
Restricted assets:
Cash and investments with trustees
Capital assets (net of depreciation):
Land
Total Capital Assets
Total Assets
Liabilities:
Accounts payable and accrued expenses
Due to other governments
Deposits from others
Long-term liabilities:
Due within one year
Due in more than one year
Total Long -Term Liabilities
Total Liabilities
Net Assets:
Restricted for:
Community development
Debt service
Unrestricted
Total Net Assets
Governmental Activities
$ 40,746
78,624
31,191
6,953,592
10,630,944
6,601,909
245,239,104
$ 44,037,780
7,104,153
4,564,860
6,000
10,563
4.441,840
100,393
42,603,713
10,630,944
113,500,246
4,089,937
474,741
46,386
251,841.013
256,452,077
34,957,138
1,305,543
(179,214,512)
$ (142,951,831)
.,.
See Notes to Financial Statements 13
033
THIS PAGE INTENTIONALLY LEFT BLANK
14 . 034
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Net(Expense)
Revenues and
Program Revenues
Changesin
. Operating Capital
Net Assets
Charges for Contributions Contributions
Governmental
Expenses Services and Grants and Grants
Activities
Functions/Programs
Governmental Activities
General government $ 4,171,683 $ - $ - $ - $ (4,171,683)
Planning and development 17,246,705 - - - (17,246,705)
Interest on long-term debt 14,023,088 - - - (14,023,088)
Contributions to other governments 7,549,574 - _ - _ (7,549,574)
Capital contributions
to other agencies 59,061,958 - - - (59,061,958)
Total Governmental Activities $102,053,008 $ - $ - E - (102,053,008)
General Revenues:
Taxes (net of pass -through payments)
Use of money and property
Gain on sale of assets
Other
Total General Revenues
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
See Notes to Financial Statements 15
32,569,795
9,290,106
120,628
372,818
42,353,347
(59,699,661)
(83,252,170)
$ (142,951,831)
n35
LA OUINTA REDEVELOPMENT AGENCY
BALANCE SHEET
GOVERNMENTALFUNDS
JUNE 30, 2011
Special
Special
Special
Special
Revenue
Revenue
Revenue
Revenue
Redevelopment
Redevelopment
Redevelopment
Redevelopment
Agency
Agency
Agency
Agency
PA No. 1
PA No. 2
PA No. 1
PA No. 2
Low and
Low and
Moderate
Moderate
Housing
Housing
Housing
Housing
Authority
Authority
Assets:
Cash and investments $ 8,474,291
$ 22,939,847
$ 934,767
$ 597,765
Cash and investments with trustee
-
-
- -
Receivables:
Tax increment
6,871
1,278
- -
Accounts
-
-
13,542 37,082
Interest
5,414
15,926
616 -
Loans
4,012,106
641,486
- -
Prepaid costs
-
-
- 10,563
Due from capital projects funds
-
-
- -
Due from low and moderate
housing funds
3,500
24,760
- -
Due from City
-
-
- -
Deposits with others
-
-
- 6,000
Advances to other funds
4,328
-
- -
Total Assets
$ 12,506,510
$ 23,623,297 $
948,925 $ 651,410
Liabilities and Fund Balances:
Liabilities:
Accounts payable $ 82,824 $ 40,465 $ - $ 2,263
Deposits from others - - 19,967 26,419
Due to capital projects funds - - - -
Due to low and moderate
housing funds - - - -
Due to other governments - - - -
Deferred revenue 1,930,492 641,486 - -
Advances from other funds - - - 4,328
Total Liabilities 2,013,316 681,951 19,967 33,010
Fund Balances:
Nonspendable:
Prepaid expenditures - - - 10,563
Long-term receivables and deposits 2,081,614 - - 6,000
Restricted for:
Debt service - - - -
Low and moderate income housing 8,411,580 22,941,346 928,958 601,837
Community development - - - -
Total Fund Balances 10,493,194 22,941,346 928,958 618,400
Total Liabilities and
Fund Balances - $ 12,506,510 $ 23,623,297 $ 948,925 $ 651,410
See Notes to Financial Statements 16 - 4 036
LA QUINTA REDEVELOPMENT AGENCY
BALANCE SHEET
GOVERNMENTALFUNDS -
JUNE 30, 2011
(Continued)
Capital
Capital
Capital
Capital
Projects
Projects
Projects
Projects
Combined
Combined
Redevelopment
Redevelopment
Low/Moderate
Low/Moderate
Agency
Agency
Housing
Housing
PA No. 1
PA No. 2 .
2011
2004
Low/Mod
Low/Mod
Bond
Bond
Project
Project
Assets:
Cash and investments
$ - $ - $ 9,943,802
$ -
Cash and investments with trustee
25,635,470 3,331,915 9,204,891
3,931,437
Receivables
Tax increment
- - - -
-
Accounts
3,500 - -
24,500
Interest
- - 8,549
307
Loans
- - -
2,300,000
Prepaid costs
- - -
-
Due from capital projects funds
- - 637,754
-
Due from low and moderate
housing funds
- - -
-
Due from City
- - 3,284,621
1,280,239
Deposits with others
- - -
-
Advances to other funds
- - -
-
Total Assets
$ 25,538,970 $ 3,331,915 $ 23,079,617
$ 7,536,483
Liabilities and Fund Balances
Liabilities:
Accounts payable $ - $ - $ 53,296 $ 28.944
Deposits from others - - -
Due to capital projects funds - - - 637,754
Due to low and moderate
housing funds 3,500 24,760 - -
Due to other governments - - - -
Deferred revenue - - - 2,300,000
Advances from other funds
Total Liabilities 3,500 24,760-53,296 2,966,698
Fund Balances:
Nonspendable:
Prepaid expenditures - - - -
Long-term receivables and deposits - - - -
Restricted for:
Debt service - - - -
Low and moderate income housing 25,535,470 3,307,155 - -
Community development - - 23,026,321 4,569,785
Total Fund Balances 25,535,470 3,307,155 23,026,321 4,569,785
Total Liabilities and
Fund Balances $ 25,538,970 $ 3,331,915. $ 23,079,617 $ 7,536,483
See Notes to Financial Statements 17 - •� 037
LA OUINTA REDEVELOPMENT AGENCY
BALANCE SHEET
GOVERNMENTALFUNDS
JUNE 30, 2011
Debt Debt
Service Service
Redevelopment Redevelopment
Agency Agency
Total
Tax
Tax
Governmental
Increment
Increment
Funds
Assets:
Cash and investments
$
1,132,207
$
15,101
$
44,037,780
Cash and investments with trustee
-
600,000
42,603,713
Receivables:
Tax increment
27,485
5,112
40,746
Accounts
-
-
78,624
Interest
379
-
31,191
Loans
-
-
6,953,592
Prepaid costs
-
-
10.563
Due from capital projects funds
-
-
637,754
Due from low and moderate
housing funds
-
-
28,260
Due from City
-
-
4,564,860
Deposits with others
-
-
6,000
Advances to other funds
-
-
4,328
Total Assets
$
1,160,071
$
620,213
$
98,997,411
Liabilities and Fund Balances:
Liabilities:
Accounts payable
$
-
$
-
$
207,792
Deposits from others
-
-
46,386
Due to capital projects funds
-
-
637,754
Due to low and moderate
housing funds
-
-
28,260
Due to other governments
414,728
60,013
474,741
Deferred revenue
-
-
4,871.978
Advances from other funds
-
-
4,328
Total Liabilities
414,728
60,013
6,271,239
Fund Balances:
Nonspendable:
Prepaid expenditures
-
-
10,563
Long-term receivables and deposits
-
-
2,087,614
Restricted for:
Debt service
745,343
560,200
1,305,543
Low and moderate income housing -
-
-
61,726,346
Community development
-
-
27,596,106
Total Fund Balances
745,343
- 560,200
92,726,172
Total Liabilities and
Fund Balances
$
1,160,071
$
620,213
$
98,997,411
See Notes to Financial Statements
18
.MM 038
LA QUINTA REDEVELOPMENT AGENCY
GOVERNMENTALFUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2011
Fund balances of governmental funds $ 92,726,172
Amounts reported for governmental activities in the Statement of Net Assets are
different because:
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds. 10,630,944
Deferred revenue is present in governmental fund financial statements to
indicate that receivables are not available currently; however, in the Statement of
Net Assets these deferrals are eliminated. 4,871,978
Governmental funds report all pension contributions as expenditures, however
in the Statement of Net Assets any excesses or deficiencies in contributions
in relation to the required contribution are recorded as an asset or liability. 100.393
Bond issuance costs is an expenditure in the governmental funds, but it is
deferred charges in the statement of net assets:
Unamortized debt issuance costs - amortized over life of new bonds 4,441,840
Long-term liabilities, including bonds payable, are not due and payable in the
current period and, therefore, are not reported in the funds:
Bonds payable (250,712,816)
Other debt (2,255,242)
Unamortized net original issue discounts/(premiums) 1,127,045
Accrued interest payable for the current portion of interest due on Tax Allocation
Bonds has not been reported in the governmental funds. (3,882,145)
Net assets of governmental activities $ (142,951,831)
See Notes to Financial Statements 19 ...111
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Special
Special
Special
Special
Revenue
Revenue
Revenue
Revenue
Redevelopment
Redevelopment
Redevelopment Redevelopmerr
Agency
Agency
Agency
Agency
PA No. 1
PA No. 2
PA No. 1
PA No. 2
Low and
Low and
Moderate
Moderate
Housing
Housing
Housing
Housing
Authority
Authority
Revenues:
Taxes and assessments
$ 8,798,118
$ 4,837,259
$ -
$ -
Use of money and property
285,314
143,643
251,940
666,159
Otherrevenue
54,157
8,719
1,302
3,185
669,344
Total Revenues
9,137,589
4,989,621
253,242
Expenditures:
Current:
Planning and development
2,786,661
1,002,756
224,581
318,911
Capital outlay
320,045
409,734
-
-
Debt service
-
-
11
239,768
558,679
Total Expenditures 3,106,706 1,412,490 224,592
Excess (Deficiency) of Revenues
Over (Under) Expenditures
6,030,883
3,577,131
28,650
110,665
Other Financing Sources (Uses):
Transfers in
-
-
781,094
509,112
Transfers out
(5,220,026)
(2,461,105)
-
-
Long4erm debt issued
-
-
-
-
Pass -through agreement payments
-
-
-
-
Gain/(loss) on sale of land held for resale
-
-
120,628
-
Payment to Supplemental Educational
Revenue Augmentation Fund
-
-
-
-
Miscellaneous
-
-
-
-
Total Other Financing
Sources (Uses):
(5,220,026)
(2,461,105)
901,722
509,112
Excess (Deficiency) of Revenues and
Other Sources Over (Under)
Expenditures and Other Uses
810,857
1,116,026
930,372
619,777
Fund Balances:
Beginning of Year
9,682,337
21,825,320
(1,414)
(1,377
618,400
End of Year $ 10,493,194 $ 22,941,346 $ 928,958
'See Notes to Financial Statements 20 '•» 040
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
(Continued)
Capital
Capital
Capital
Capital
Projects
Projects
Projects
Projects
Combined
Combined
Redevelopment
Redevelopment
Low/Moderate
Low/Moderate
Agency
Agency
Housing
Housing
PA No. 1
PA No. 2
2011
2004
Low/Mod
Low/Mod
Bond
Bond
Project
Project
Revenues:
Taxes and assessments
Use of money and property
Other revenue
Total Revenues
Expenditures:
Current:
Planning and development
Capital outlay
Debt service
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses),
Transfers in
Transfers out
Long-term debt issued
Pass -through agreement payments
Gain/(loss) on sale of land held for resale
Payment to Supplemental Educational
Revenue Augmentation Fund
Miscellaneous
Total Other Financing
Sources (Uses):
Excess (Deficiency) of Revenues and
Other Sources Over (Under)
Expenditures and Other Uses
Fund Balances:
Beginning of Year
End of Year
12,065 6,429 5,045,584 3,465,925
- - 305,455 -
12,065 6,429 5,351,039 3,465,925
- 9,144.495 2,582,605
- 125,124 2,018,681 1,797,569
632,214 - - 194,707
632,214 125,124 11,163,176 4,574,881
(620,149) (118,695) (5,812,137) (1,108,956)
- - (15,039,194) (4,303,660)
28,850,000 - - 6,000,000
(2,694,381) -
26,155,619 - (15,039,194) 1,696,340
25,535,470 (118,695) (20,851,331) 587,384
- 3,425,850 43,877,652 3,982,401
$ 25,535,470 $ 3,307,155 $ 23,026,321 $ 4,569,785
..w
See Notes to Financial Statements 21
041
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Debt
Debt
Service
Service
Redevelopment
Redevelopment
Agency
Agency
PA No. 1
PA No. 2
Revenues:
Taxes and assessments
Use of money and property
Other revenue
Total Revenues
Expenditures:
Current:
Planning and development
Capital outlay
Debt service
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Long-term debt issued
Pass -through agreement payments
Gain/(loss) on sale of land held for resale
Payment to Supplemental Educational
Revenue Augmentation Fund
Miscellaneous
Total Other Financing
Sources (Uses):
Excess (Deficiency) of Revenues and
Other Sources Over (Under)
Expenditures and Other Uses
Fund Balances:
Beginning of Year
End of Year
Total
Tax
Tax
Governmental
Increment
Increment
Funds
$ 35,192,471
$ 19,349,036
$ 68,176,884
12,802
47,887
9,937,748
-
-
372,818
35,205,273
19,396,923
78,487,450
386,145
215,555
16,661,709
-
-
4,671,153
38,198,962
23,043,762
62,309,424
38,585,107
23,259,317
83,642,286
(3,379,834)
(3,862,394)
(5,154,836)
19,478,126
(19,309,866)
(4,855,193)
6,255,653
(16,297,223)
27,023,985
(27,023,985)
34,850,000
(35,607,089)
120.628
(4,855,193)
(2,694,381)
(4,686,933) (10,041,570) (8,186,035)
(8,066,767) (13,903,964) (13,340,871)
8,812,110 14,464,164 106,067,043
$ 745,343 $ 560,200 $ 92,726,172
042
See Notes to Financial Statements 22 - -
LA QUINTA REDEVELOPMENT AGENCY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Net change in fund balances - total governmental funds $ (13,340,871)
Amounts reported for governmental activities in the Statement of Activities differs from the amounts reported in the statement of activities because:
Repayment of bond principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the Statement of Net Assets. 47,631,001
Bond issuance costs is an expenditure in the governmental funds, but it is
deferred charges in the Statement of Net Assets:
Debt issuance costs on bonds issued 431,875
Amortization for current fiscal year (186,407)
Unamortized premium or discounts on bonds issued are revenue or expenditures
in the governmental funds, but these are spread to future periods over the life of
the new bonds:
Current year original issuance premium on bonds issued 395,047
Amortization for current fiscal year (36,803)
Governmental funds report capital outlay as expenditures. However, in the
Statement of Activities the cost of those assets is capitalized and allocated
over their estimated useful lives through depreciation expense:
Capital outlay expenditures
4,668
Sale of capital assets
(3,688,222)
Transfer of capital assets to the City
(59.061,958)
Depreciation
(83,251)
Proceeds of debt is revenue in the governmental funds, but these are additions
to the Statement of Net Assets.
(34,850,000)
Revenues reported as deferred revenue in the governmental funds and recognized
in the Statement of Activities. These are included in the intergovernmental revenues
in the governmental fund activity.
3,040,580
Contributions in excess to the required contribution to PERS are expenditures
in the governmental funds, however in the Statement of Activity only the
current contribution is an expense.
(6,944)
Expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures
in governmental funds:
Current accrual of interest due on bonds (3,882.145)
Prior year accrual of interest due on bonds 3,933,769
Change in net assets of governmental activities - $ (59,699,661)
See Notes to Financial Statements 23 - MN 043
LA OUINTA REDEVELOPMENT AGENCY
BUDGETARY COMPARISON STATEMENT
LOW/MODERATE INCOME HOUSING PA NO.1
YEAR ENDED JUNE 30, 2011
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ 9,682,337
$ 9,682,337
$ 9,682,337
$ -
Resources (Inflows):
Taxes and Assessments:
Tax increment
9,912,200
8,802,408
8,798,118
(4,290)
Use of Money and Property:
Interest income
46,800
46,800
42,092
- (4,708)
Otherrevenue:
Miscellaneous revenues
-
-
780
780
Loan repayments
-
23,029
53,377
30,348
Transfers from other funds
-
40,000
-
(40,000)
Proceeds from sale of capital asset
150,000
243,222
243,222
-
Amounts Available for Appropriation
19,791,337
18,837,796
18,819,926
(17,870)
Charges to Appropriation (Outflow):
Current:
Planning and development:
Real estate acquisitions
-
-
678,600
(678,600)
Administrative costs
1,071,265
1,071,265
382,103
689,162
Professional services
250,440
250,440
907,077
(656,637)
Acquisition cost
1,350,000
51,624
23,383
28,241
Rehabilitation costs
470,558
(470,558)
Subsidy to low and moderate housing
-
466,000
324,940
141,060
Capital Outlay:
Project improvement costs
-
-
320,045
(320,045)
Transfer to other funds
4,631,684
8,205,277
5,220,026
2,985,251
Total Charges to Appropriations
7,303,389
10,044,606
8,326,732
1,717,874
Budgetary Fund Balance, June 30
$ 12,487,948
$ 8,793,190
$ 10,493,194
$ 1,700,004
See Notes to Financial Statements 24 044
LA OUINTA REDEVELOPMENT AGENCY
BUDGETARY COMPARISON STATEMENT
LOW/MODERATE INCOME HOUSING PA NO. 2
YEAR ENDED JUNE 30, 2011
Budgetary Fund Balance, July 1
Resources (Inflows):
Taxes and Assessments:
Tax increment
Use of Money and Property:
Interest income
Rental income
Other revenue:
Loan repayments
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
Current:
Planning and development:
Administrative costs
Professional services
Acquisition cost
Subsidy to low and moderate
housing
Capital Outlay:
Project improvement costs
Debt Service:
Interest expense
Long-term debt repayments
Transfer to other funds
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 21,825,320
$ 21,825,320
$ 21,825,320
$ -
5,573,400
4,800,480
4,837,259
36,779
' 56,900
54,200
143,643
89,443
665,700
-
-
-
-
8,719
8,719
-
28,121,320
26,688,719
26,814,941
126,222
628,134
625,099
225,496
399,603
354,700
512,000
765,192
(253,192)
450,000
450,000
-
450,000
432,300
435,335
- 12,068
423,267
-
-
409,734
(409,734)
200,443
200,443
-
200,443
39,313
39,313
-
39,313
1,951,993
12,785,865
2,461,105
10,324,760
4,056,883
15,048,055
3,873,595
11,174,460
$ 24,064,437 $ 11,640,664 $ 22,941,346 $ 11,300,682
See Notes to Financial Statements 25 s 045,
LA QUINTA REDEVELOPMENT AGENCY
BUDGETARY COMPARISON STATEMENT
HOUSING AUTHORITY PA NO. 1
YEAR ENDED JUNE 30, 2011
Budgetary Fund Balance, July 1
Resources (Inflows):
Use of Money and Property:
Interest income
Rental income
Sale of real estate
Other revenue:
Miscellaneous revenues
Transfers from other funds
Amounts Available for Appropriation
Charges to Appropriation (Outflow):
Current:
Planning and development:
Administrative costs
Professional services
Operation of acquired property
Debt Service:
Interest expense
Transfer to other funds
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
$ (1,414) $ (1,414) $ (1,414) $ -
- - - 3,744 3,744
216,000 216,000 248,196 32,196
- 120,628 120,628 -
- - 1,302 1,302
167,075 979,075 781,094 (197,981)
381,661 1,314,289 1,153,550 (160,739)
6,600
6,850
1,939
4,911
22,000
39,000
1,139
37,861
350,000
350,000
221,503
128,497
11
(11)
-
40,000
-
40,000
378,600
435,850
224,692
211,258
$ 3,061 $ 878,439 $ - 928,958 $ 50,519
046
See Notes to Financial Statements 26
LA QUINTA REDEVELOPMENT AGENCY
BUDGETARY COMPARISON STATEMENT
HOUSING AUTHORITY PA NO. 2
YEAR ENDED JUNE 30, 2011
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ (1,377)
$ (1,377)
$ (1,377)
$ -
Resources (Inflows):
Use of Money and Property:
Interest income
-
3,600
1,046
(2,554)
Rental income
-
661,500
665,113
3,613
Other revenue:
Miscellaneous revenues
-
4,200
3,185
(1,015)
Transfers from other funds
25,675
534,787
509,112
(25,675)
Amounts Available for Appropriation
24,298
1,202,710
1,177,079
(25,631)
Charges to Appropriation (Outflow):
Current:
Planning and development:
Administrative costs
4,000
4,000
1,800
2,200
Professional services
15,000
15,000
1,139
13,861
Operation of acquired property
4,500
433,800
315,972
117,828
Interest expense
-
200,443
200,455
(12) .
Long-term debt repayments
-
39,313
39,313
-
Total Charges to Appropriations
23,600
692,556
658,679
133,877
Budgetary Fund Balance, June 30 $ 798 $ 510,154 S 618,400 S 108,246
..4 047
See Notes to Financial Statements 27
THIS PAGE INTENTIONALLY LEFT BLANK
28 .: 048
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Note 1: Organization and Summary of Significant Accounting Policies
a. Organization and Tax Increment Financing
The La Quinta Redevelopment Agency (Agency) is a component unit of a reporting entity
that consists of the following primary and component units:
Reporting Entity:
Primary Government:
City of La Quinta
Component Units:
La Quinta Redevelopment Agency
City of La Quinta Public Financing Authority
La Quinta Housing Authority
The La Quinta Housing Authority (Authority) was established pursuant to California
Housing Authorities Law (Health and Safety Code Sections 34200 et seq.) on
September 15, 2009. The purpose of the Authority is to provide safe and sanitary
housing opportunities for La Quinta residents. Although the Authority is legally separate, it
is reported as if it were part of the Agency because the Agency's governing board also
serves on the governing board for the Authority. Separate financial statements of the
Authority are not prepared.
Redevelopment Goals and Objectives
The general objective of the Redevelopment Plan adopted by the Agency is to encourage
investment in the Redevelopment Project Areas by the private sector. The
Redevelopment Plan provides for the demolition of buildings and improvements, the
relocation of any displaced occupants, and the construction of streets, parking facilities,
utilities and other public improvements. The Redevelopment Plan also includes the ability
to redevelop land by private enterprise or public agencies, the rehabilitation of structures,
the rehabilitation or construction of single family and low and moderate income housing,
and participation by owners and tenants of properties in the Redevelopment Project.
Redevelopment Project Areas
The Agency has established two redevelopment project areas. On November 29, 1983,
the City Council approved and adopted the Redevelopment Plan for the La Quinta
Redevelopment Project Area No. 1. On May 16, 1989, the City Council approved and
adopted the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2.
These plans provide for the elimination of blight and deterioration that was found to exist
in the project areas.
Tax Increment Financing
The Law provides a means for financing redevelopment projects based upon an
allocation of taxes collected within a redevelopment project. The assessed valuation of a
redevelopment project last equalized prior to adoption of a redevelopment plan or
amendment to such redevelopment plan, or "base roll", is established and, except for any
period during which the assessed valuation drops below the base year level, the taxing
bodies, thereafter, receive the taxes produced by the levy of the current tax rate upon the
base roll. Taxes collected upon any increase in assessed valuation over the base roll
("tax increment") are paid and may be pledged by a redevelopment agency to the
29 049
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
repayment of any indebtedness incurred in financing or refinancing a redevelopment
project. Redevelopment agencies themselves have no authority to levy property taxes.
b. Basis of Accounting and Measurement Focus
The basic financial statements of the Agency are composed of the following:
• Government -wide financial statements
• Fund financial statements
• Notes to the basic financial statements
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements include
separate columns for the governmental and business -type activities of the primary
government (including its blended component units), as well as it's discreetly presented
component units. The Agency has no business -type activities or discretely presented
component units. For the most part, effect of interfund activity has been removed from
these statements. Eliminations have been made in the Statement of Activities so that
certain allocated expenses are recorded only once (by the function to which they were
allocated). However, general government expenses have not been allocated as indirect
expenses to the various functions of the Agency.
The accompanying government -wide financial statements for the Agency present
negative net assets because the primary activity of the Agency is to issue debt to
construct infrastructure that will be owned and maintained by the City.
Government -wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic resources
measurement focus, all (both current and long-term) economic resources and obligations
of the reporting government are reported in the government -wide financial statements.
Basis of accounting refers to when revenues and expenditures are recognized in the
accounts and reported in the financial statements. Under the accrual basis of accounting,
revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and
exchange -like transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from non -exchange transaction
are recognized in accordance with the requirements of GASB Statement No. 33.
Program revenues include charges for services and payments made by parties outside of
the reporting government's citizenry if that money is restricted to a particular program.
Program revenues are netted with program expenses in the statement of activities to
present the net cost of each program. Amounts paid to acquire capital assets are
capitalized as assets in the government -wide financial statements, rather than reported as
expenditures. Proceeds of long-term debt are recorded as a liability in the
government -wide financial statements, rather than as other financing source. Amounts
paid to reduce long-term indebtedness of the reporting government arereportedas a
reduction of the related liability, rather than as an expenditure.
30 0 r50
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
Fund Financial Statements
The underlying accounting system of the Agency is organized and operated on the basis
of separate funds, each of which is considered to be a separate accounting entity. The
operations of each fund are accounted for with a separate set of self -balancing accounts
that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses,
as appropriate. Governmental resources are allocated to and accounted for in individual
funds based upon the purposes for which they are to be spent and the means by which
spending activities are controlled.
Fund financial statements for the primary government's governmental, proprietary, and
fiduciary funds are presented after the government -wide financial statements. These
statements display information about major funds individually and non -major funds in the
aggregate for governmental and enterprise funds. Fiduciary statements include financial
information for fiduciary funds and similar component units. Fiduciary funds primarily
represent assets held by the Agency in a custodial capacity for other individuals or
organizations. The Agency has no non -major funds, enterprise funds, or fiduciary funds.
Governmental Funds
In the fund financial statements, governmental funds and agency funds are presented
using the modified -accrual basis of accounting. Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that the
amounts can be estimated, or otherwise determined. Available means that the amounts
were collected during the reporting period or soon enough thereafter to be available to
finance the expenditures accrued for the reporting period. The Agency uses a 60 day
availability period.
Revenue recognition is subject to the measurable and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related goods or
services are provided). Locally imposed derived tax revenues are recognized as
revenues in the period in which the underlying exchange transaction upon which they are
based takes place. Imposed non -exchange transactions are recognized as revenues in
the period for which they were imposed. If the period of use is not specified, they are
recognized as revenues when an enforceable legal claim to the revenues arises or when
they are received, whichever occurs first. Government -mandated and voluntary
non -exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the current
financial resources measurement focus. This means that only current assets and current
liabilities are generally included on their balance sheets. The reported fund balance
(net current assets) is considered to be a measure of "available spendable resources."
Governmental fund operating statements present increases (revenues and other
financing sources) and decreases (expenditures and other financing uses) in net current
assets. Accordingly, they are said to present a summary of sources and uses of
"available spendable resources" during a period.
Non -current portions of long-term receivables due to governmental funds are reported on
their balance sheets in spite of their spending measurement focus. Special reporting
treatments are used to indicate, however, that they should not be considered "available
spendable resources," since they do not represent net current assets. Recognition of
31 o 51
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
governmental fund type revenues represented by noncurrent receivables are deferred
until they become current receivables. Noncurrent portions of other long-term receivables
are offset by fund balance reserve accounts.
Because of their spending measurement focus, expenditure recognition for governmental
fund types excludes amounts represented by noncurrent liabilities. Since they do not
affect net current assets, such long-term amounts are not recognized as governmental
fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that
resources were expended, rather than as fund assets. The proceeds of long-term debt
are recorded as an other financing source rather than as a fund liability. Amounts paid to
reduce long-term indebtedness are reported as fund expenditures.
When both restricted and unrestricted resources are combined in a fund, expenses are
considered to be paid first from restricted resources and then unrestricted resources.
c. Major Funds
The following funds are presented as major funds in the accompanying basic financial
statements:
Special Revenue. Low and Moderate Income Housing P.A. No 1 and No 2 Funds — To
account for the required 20% set aside of property tax increments that is legally restricted
for increasing or improving housing for low and moderate income households.
Special Revenue, Housing Authority P.A. No. 1 and No. 2 Funds — To account for
activities of the Housing Authority, including the operation of the Authority's housing units.
Debt Service Funds, P.A. No. 1 and No. 2 — To account for the accumulation of resources
for the payment of debt service for bond principal, interest and trustee fees.
Capital Projects Funds, P.A. No. 1 and No. 2 — To account for the bond proceeds, interest
and other funding that will be used for development, planning, construction and land
acquisition.
2004 and 2011 Low and Moderate Income Housing Fund — To account for the bond
proceeds, interest and other funding that will be used for development, planning,
construction, and land acquisition for low and moderate income housing projects.
d. Cash and Investments
For financial reporting purposes, investments are reported at their fair market value.
Changes in fair value that occur during a fiscal year are recognized as investment income
reported for that fiscal year. Investment income includes interest earnings, changes in fair
value, and any gains or losses realized upon the liquidation or sale of investments.
32 052
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 1
Organization and Summary of Significant Accounting Policies
e. Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical records are
available and at an estimated historical cost where no historical records exist.
Contributed fixed assets are valued at their estimated fair market value at the date of the
contribution. Generally, fixed asset purchases in excess of $5,OOOIare capitalized if they
have an expected useful life of three years or more. Buildings are depreciated over a
useful life of thirty years.
Capital assets include public domain (infrastructure) general fixed assets consisting of
certain improvements including roads, streets, sidewalks, medians, and storm drains.
f. Fund Balance
The Agency implemented Governmental Accounting Standards Board Statement 54,
"Fund Balance Reporting and Governmental Fund Type Definitions", for the year ended
June 30, 2011. As a result, the Agency now reports the following' classifications of fund
balance:
Nonspendable Fund Balance - Includes amounts that cannot be spent because they
are either (a) not in spendable form or (b) legally or contractually required to be
maintained intact.
Restricted Fund Balance - Includes amounts that have c
resources by being externally imposed, imposed by law
through enabling legislation.
Assigned Fund Balance — Includes amounts that are
intent to be used for a specific purpose.
Unassigned Fund Balance - The residual classification which
amounts not contained in other classifications.
The Agency's Board authorizes assigned amounts for specific purl
policy -making powers granted through a resolution. When an exp<
purposes for which both restricted and unrestricted fund balance is
considers restricted amounts to be used first, then unrestricted. W
incurred for purposes for which amounts in any of the unre;
classifications could be used, they are considered to be spent in
committed, assigned and then unassigned.
Note 2: Stewardship, Compliance and Accountability
a. Budgetary Data
Budgets and Budgetary Accounting
on the use of
constitution, or
by the Agency's
all spendable
s pursuant to the
ure is incurred for
ilable, the Agency
an expenditure is
ed fund balance
order as follows:
The Governing Board adopts an annual budget prepared on the modified accrual basis of
accounting for its governmental funds. The City Manager or his designee is authorized to
transfer budgeted amounts between the accounts of any department. Revisions that alter
the total appropriations of any department or fund are approved by the Governing Board.
33 053
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 2: Stewardship, Compliance and Accountability (Continued)
Prior year appropriations lapse unless they are approved for carryover into the following
fiscal year. Expenditures may not legally exceed appropriations at the department level.
b. Budget Basis of Accounting
Budgets for governmental funds are adopted on a basis consistent with generally
accepted accounting principles (GAAP).
Note 3: Cash and Investments
Cash and investments reported in the accompanying financial statements consisted of the
following:
Cash and investments pooled with the City $ 44,037,780
Cash and investments with trustees 42,603,713
$ 86,641,493
The Agency's funds are pooled with the City of La Quinta's cash and investments in order to
generate optimum interest income. The information required by GASB Statement No. 40
related to investments, credit risk, etc., is available in the annual report of the City.
Note 4: Notes Receivable
In September 1994, the Agency sold certain real property to LINC Housing for $2,112,847.
The property was used to construct single-family homes and rental units to increase the City's
supply of low and moderate income housing. The note bears interest at 6% per annum and is
due in full on June 15, 2029. The balance at June 30, 2011 including matured, unpaid interest
of $1,930,492 is $3,965,880.
In July 2010, the Agency entered into an Owner Participation Agreement (OPA) with an Garff
Properties -La Quinta, LLC ("Garff") that provides for the Agency to provide a rehabilitation
loan to Garff of up to $2,300,000 for the construction of a new auto dealership facility and
rehabilitation of an existing dealership facility. In connection with the OPA, Garff has
executed a promissory note which is secured by a deed of trust, and an operating covenant.
The loan will be repaid by crediting future sales and property tax increment taxes generated
on the site until the cumulative taxes collected equals the loan amount. At that time, the note
will be cancelled and the operating covenant will terminate. If, after ten years of operation, a
shortfall exists between the revenues collected and the outstanding loan amount, the note will
be cancelled and the operating covenant will terminate. Further, if at any time through no fault
of the dealership certain future events outside of the dealership control occur the note will be
cancelled and the operating covenant will terminate. The balance at June 30, 2011 is
$2,300,000.
In February 2011, the Agency entered into Disposition and Development Agreement with
Coral Mountain Partners L.P. ("Coral Mountain") to fund up to $29,000,000 for the
construction of a low and moderate income apartment complex with an estimated completion
date of the apartment complex of March 2015. The Agency's $29,000,000 loan is evidenced
by a Promissory Note executed by Coral Mountain ("Note"). Interest on the outstanding note
amount will bear simple interest of 1%. Principal and interest will be repaid on or before May
I" of each year from annual residual receipts as defined in the Note once the project is
completed and may be repaid early if the property is refinanced, or if the property is
transferred to another entity. As of June 30, 2011, the outstanding principal portion on the
Note is $640,090 and the outstanding interest portion is $1,396.
Other notes receivable totaled $46,226 at June 30, 2011. 34 a 054
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 5:
Note 6:
Note 7:
Due from Other Governments
The Agency advanced funds to the City of La Quinta to help the City meet the cost of
developing the public -owned improvements to the La Quinta Park, La Quinta Library and the
Highway 111 Median Improvement Project. There is no stipulated repayment date
established for the Agency advances. Interest accrues at the eaming rate of the City's
Investment Pool funds, and shall be adjusted quarterly. At June 30, 2011, outstanding Project
Area No. 1 advances were $3,284,621 and Project Area No. 2 advances were $1,280,239.
Capital Assets
Capital asset activity for the year ended June 30, 2011, was as follows:
Balances at Balances at
July 1, 2010 Additions Deletions' June 30, 2011
Depreciable assets:
Buildings $ 4,010,888 $ - $ 4,010,888 $ -
Total cost of depreciable assets 4,010,888 - 4,010,888 -
Less accumulated depreciation:
Buildings (406,324) (83,251) (489,575)
Net depreciable assets 3,604,564 (83,251) 3,521,313
Capital assets not depreciated:
Land 69,855,143 4,668 59,228,867 10,630,944
Capital assets, net $ 73,459,707 $ (78,583) $ 62,750,180 $ 10,630,944
'Note: Deletions include transfer of capital assets to the City of La Quinta.
Depreciation expense was charged to the following functions of the primary government:
Governmental Activities:
General government - $83,251
Property Taxes
Under California law, property taxes are assessed and collected by the counties up to 1% of
assessed value, plus other increases approved by the voters. The property taxes are
recorded initially in a pool, and are then allocated to the cities based on complex formulas.
Accordingly, the City of La Quinta accrues only those taxes that are received from the County
within sixty days after year-end.
Lien date January t
Levy date July 1
Due dates November 1 and February 1
Collection dates December 10 and April 10
The Agency's primary source of revenue comes from property taxes. Property taxes allocated
to the Agency are computed in the following manner.
35 4 055
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 7: Property Taxes (Continued)
a. The assessed valuation of all property within the project area is determined on the
date of adoption of the Redevelopment Plan.
b. Property taxes related to the incremental increase in assessed values after the
adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the
"frozen" assessed valuation of the property are allocated to the City and other
districts.
The Agency has no power to levy and collect taxes and any legislative property tax shift might
reduce the amount of tax revenues that would otherwise be available to pay the principal of,
and interest on, debt. Broadened property tax exemptions could have a similar effect.
Conversely, any increase in the tax rate or assessed valuation, or any reduction or elimination
of present exemptions would increase the amount of tax revenues that would be available to
pay principal and interest on debt.
Note 8: Long -Tenn Liabilities
Tax Allocation Refunding Bonds, Series 1994
Tax allocation refunding bonds, Series 1994, in the amount of $26,665,000 were issued by
the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance
certain capital improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds range from 3.80% to 8% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the bonds
are payable solely from pledged tax increment revenues. The bonds are not subject to
redemption prior to maturity. There are certain limitations regarding the issuance of parity
debt as further described in the official statement. A portion of the proceeds was used to
obtain a surety agreement to satisfy the bond reserve requirement. The principal balance of
outstanding bonds at June 30, 2011 is $4,775,000.
Tax Allocation Refunding Bonds, Series 1998 - Project Area No. 1
Tax allocation refunding bonds, Series 1998, in the amount of $15,760,000 were issued by
the Agency to refund the outstanding aggregate principal amount of the Agency's Tax
Allocation Bonds, Series 1991. The remaining proceeds were used to finance certain capital
improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds range from 5.20% to 5.25% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the bonds
are payable from pledged tax increment revenues. There are certain limitations regarding the
issuance of parity debt as further described in the official statement.
Term Bonds maturing September 1, 2028, are subject to mandatory sinking fund redemption,
in part by lot, on September 1, 2013, and on each September 1 thereafter, through
September 1, 2028, at a price equal to the principal amount thereof plus accrued interest. A
portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve
requirement. The principal balance of outstanding bonds at June 30, 2011 is $15,760,000.
36 .. 056
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8: Long -Term Liabilities (Continued)
Tax Allocation Refunding Bonds, Series 1998 - Project Area No. 2
Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the
Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation
Bonds, Series 1992. The remaining proceeds were used to finance certain capital
improvements within the La Quinta Redevelopment Project Area No. 2.
Interest rates on the bonds range from 3.75% to 5.25% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the bonds
are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds
maturing September 1, 2028 and September 1, 2033, are subject to mandatory sinking fund
redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on
each September 1, thereafter at a price equal to the principal amount thereof plus accrued
interest. There are certain limitations regarding the issuance of parity debt as further
described in the official statement. A portion of the proceeds was used to obtain a surety
agreement to satisfy the bond reserve requirement. The principal balance of outstanding
bonds at June 30, 2011 is $5,555,000.
Tax Allocation Bonds, Series 2001 — Project Area No. 1
On August 15, 2001, the Agency issued tax allocation bonds in the amount of $48,000,000 to
finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The
2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of
$1,517,325.
The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on
September 1, 2021, and $30,720,000 of tens bonds that accrue interest at 5.18% and mature
on September 1, 2031. The interest and principal on the bonds are payable from pledged tax
increment revenues.
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve
requirement. The principal balance of outstanding bonds at June 30, 2011 is $48,000,000.
Tax Allocation Bonds, Series 2002 — Project Area No. 1
On June 12, 2002, the Agency issued tax allocation bonds in the amount of $40,000,000 to
finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The
2002 tax allocation bonds were issued at a discount of $360,000 and issuance costs of
$1,250,096.
The bonds consist of $6,355,000 of serial bonds and $33,645,000 of term bonds. Interest
rates on serial bonds range from 1.75% and 4.00% and are payable semi-annually on
March 1 and September 1 of each year until maturity. Term bonds accrue interest at 5.00%
and 5.125% and mature on September 1, 2022 and September 1, 2023. The interest and
principal on the bonds are payable from pledged tax increment revenues.
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve
requirement. The principal balance of outstanding bonds at June 30, 2011 is $35,085,000.
37
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8: Long -Term Liabilities (Continued)
Tax Allocation Bonds, Series 2003 - Project Area No. 1
On September 1, 2003, the Agency issued tax allocation bonds in the amount of $26,400,000
to finance capital projects benefiting the La Quints Redevelopment Project Area No. 1. The
2003 tax allocation bonds were issued at a discount of $277,200 issuance costs of $629,191.
Interest is payable semi-annually on March 1 and September 1 of each year, commencing
March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and
principal on the bonds are payable from pledged tax increment revenues. Term bonds
maturing on September 1, 2013 through September 1, 2032, are subject to mandatory
redemption from minimum sinking fund payments, in part by lot, on September 1, 2004,
September 1, 2014 and September 1, 2024, respectively, and on each September 1
thereafter at a redemption price equal to the principal amount thereof plus accrued interest to
the redemption date.
A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve
requirement. There are certain limitations regarding the issuance of parity debt as further
described in the official statement. The principal balance of outstanding bonds at
June 30, 2011 is $23,305,000.
2004 Series A Local Agency Revenue Bonds
On June 29, 2004, the La Quinta Financing Authority issued revenue bonds in the amount of
$90,000,000 to finance projects benefiting low and moderate income housing in La Quinta
Redevelopment Project Area No. 1 and the La Quinta Redevelopment Project Area No. 2 and
to advance refund the Agency's Redevelopment Project Areas No. 1 and 2, 1995 Housing
Tax Allocation Bonds. The 2004 local agency revenue bonds were issued with issuance
costs of $2,600,229 and a premium of $476,496.
Interest is payable semi-annually on March 1 and September 1, of each year, commencing
September 1, 2004. Interest payments range from 3% to 5.25% per annum. The interest and
principal on the bonds are payable from pledged tax increment revenues.
Term bonds maturing on September 1, 2024, September 1, 2029 and September 1, 2034, are
subject to mandatory redemption from minimum sinking fund payments, in part by lot, on
September 1, 2017, September 1, 2025 and September 1, 2030, respectively, and on each
September 1 thereafter at a redemption price equal to the principal amount thereof plus
accrued interest to the redemption date.
A portion of the proceeds was used to obtain a surety agreement to satisfy the bond reserve
requirement. There are certain limitations regarding the issuance of parity debt as further
described in the official statement. The principal balance of outstanding bonds at
June 30, 2011 is $81,150,000.
2011 Subordinate Taxable Tax Allocation Bonds
On June 6, 2011, the Agency issued subordinate taxable tax.allocation bonds in the amount
of $6,000,000 to finance capital projects benefiting the La Quinta Redevelopment Project
Area No. 2. The 2001 tax allocation bonds were issued at a discount of $86,207 and
issuance costs of $108,500.
38 058
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8: Long -Term Liabilities (Continued)
The bonds consist of $190,000 of term bonds that accrue interest at 5.375% and mature on
September 1, 2016. $280,000 of term bonds that accrue interest at 7.125% and mature on
September 1, 2021, $380,000 of term bonds that accrue interest at 7.600% and mature on
September 1, 2026, and $5,150,000 of term bonds that accrue interest at 8.150% and mature
on September 1, 2031. The interest and principal on the bonds are payable from pledged tax
increment revenues.
A portion of the proceeds were used to obtain fund the bond reserve requirement. The
principal balance of outstanding bonds at June 30, 2011 is $6,000,000.
2011 Series A Local Agency Subordinate Taxable Revenue Bonds
On June 9, 2011, the La Quinta Financing Authority issued revenue bonds in the amount of
$28,850,000 to finance projects benefiting low and moderate income housing in La Quinta
Redevelopment Project Area No. 1 and La Quinta Redevelopment Project Area No. 2. The
2011 local agency subordinate taxable revenue bonds were issued with issuance costs of
$323,375 and a discount of $308,839.
Interest is payable semi-annually on March 1 and September 1 of each year, commencing
September 1, 2011. Interest payments range from 3.750% to 8.185% per annum. The
interest and principal on the bonds are payable from pledged tax increment revenues.
Term bonds maturing on September 1, 2026, September 1, 2031 and September 1, 2036, are
subject to mandatory redemption from minimum sinking fund payments, in part by lot, on
September 1, 2022, September 1, 2027, and September 1, 2032, respectively, and on each
September 1 thereafter at a redemption price equal to the principal amount thereof plus
accrued interest to the redemption date.
A portion of the proceeds was used to fund the bond reserve requirement. There are certain
limitations regarding the issuance of parity debt as further described in the official statement.
The principal balance of outstanding bonds at June 30, 2011 is $28,850,000.
Due to County of Riverside — Project Area No. 2
Based on an agreement dated July 5, 1989, between the Agency and the County, until the tax
increment reaches $5,000,000 annually in Project Area No. 2, the Agency will pay to the
County 50% of the County portion of tax increment. At the County's option, the County's
pass -through portion can be retained by the Agency to finance new County facilities or land
costs that benefit the County and serve the La Quinta population. Per the agreement, the
Agency must repay all amounts withheld from the County. The tax increment is to be paid to
the County in amounts ranging from $100,000 to $250,000 over a payment schedule through
June 30, 2015. Interest does not accrue on this obligation. The balance at June 30, 2011 is
$1,000,000.
Pass -through Agreement Payable to Coachella Valley Unified School District
An agreement was entered into in 1991 between the Agency, the City of La Quinta and the
Coachella Valley Unified School District (District), which provides for the payment to the
District a portion of tax increment revenue associated with properties within District confines.
Such payments are subordinate to other indebtedness of the Agency incurred in furtherance
of the Redevelopment Plan for Project Area No. 1. This tax increment is paid to the District
over a payment schedule through August 1, 2012, in amounts ranging from $474,517 to
39 0 59 .
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8: Long -Tenn Liabilities (Continued)
$834,076 for a total amount of $15,284,042. Tax increment payments outstanding at
June 30, 2011 totaled $1,255,242. The District agrees to use such funds to provide
classroom and other construction costs, site acquisition, school buses, expansion or
rehabilitation of current facilities.
Washington Street Apartments
In October 2008, the Agency acquired the Washington Street Apartments for cash and the
assumption of the following debt:
Provident Bank Loan
This loan was originally entered into with the previous owner of the Washington Street
Apartments and Provident Bank for $1,696,000 in August 2001 at an 8.36% interest rate.
The loan is amortized on a thirty year basis with the outstanding balance due in twenty
years or August 2021. The outstanding principal balance in October 2008, when the
property was acquired by the Agency was $1,572,031. The loan is secured by a deed of
trust on the property and is senior to the United States Department of Agriculture (USDA)
loan which is also secured by a deed of trust on the property. Repayment of the monthly
loan amount of $12,873 is made from tenant rent receipts. The source for the final
principal payment due in August 2021, of $1,050,109 will be determined at a future date.
The principal balance of this loan at June 30, 2011 is $1,503,433.
United States Department of Agriculture (USDA) Rural Development Promissory Note
This promissory note was originally entered into with the previous owner of the
Washington Street Apartments and USDA — Rural Development for $1,500,000 in
November 1980 at a 10.00% interest rate. The note is amortized on a fifty year basis with
the outstanding balance due in October 2030. The outstanding principal balance, in
October 2008, when the property was acquired by the Agency was $760,721. The loan is
secured by a deed of trust on the property and is subordinated to the Provident loan which
is also secured by a deed of trust on the property. Repayment of the monthly loan amount
of $7,107 is made from tenant rent receipts and a rental subsidy from the USDA. Rural
Development has agreed to a 9% interest rate subsidy on the Promissory Note as long as
the Apartment renters meet certain program eligibility requirements. The principal
balance of this note at June 30, 2011 is $729,383.
Advances from the City of La Quinta
The City of La Quinta advances money to the Agency to cover operating and capital shortfalls.
As of June 30, 2011, the amount due to the General Fund from Project Area No. 1 and
Project Area No. 2 were $0.
40 060
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8: Long -Term Liabilities (Continued)
The following is a schedule of changes in long-term debt of the Agency for the fiscal year
ended June 30, 2011:
Redevelopment Agency PA No 1
City Loans - Principal
Coachella Valley USD Pass -Through Payable
1994 Tax Allocation Bonds
1998 TAB Project Area #1
2001 Tax Allocation Bonds
2002 Tax Allocation Bonds
2003 Tax Allocation Bonds
2004 Series A Local Agency Revenue Bonds
Total
Redevelopment Agency PA No 2
City Loans - Principal
Provident Loan
US Department of Agriculture
Notes - Due to the County of Riverside
1998 TAB Project Area #2
2011A Subordinate TAB Bonds
2004 Series A Local Agency Revenue Bonds
Taxable Revenue Bonds 2011 Series A
Total
Unallocated Between Proiect Areas
2004 Series A Local Agency Revenue Bonds
Total
Total - All Proiect Areas
Balance Balance Due Within
July 1, 2010 Additions Repayments June 30, 2011 One Year
$ 22,000,000 $
- $ 22.000.000
$ -
$ -
2,072,964
- 817,722
1,255,242
834,076
6,920,000
- 2,145,000
4,775,000
2,305.000
15,760,000
- -
15.760,000
-
48,000,000
- -
48,000,000
-
35,765,000
- 680,000
35,085,000
705,000
23,810,000
- 505,000
23,305,000
530,000
16,000,857
335,820
15,665,037
348.365
170,328,821
26,483,542
143,845.279
4,722,441
19,378,966
1.530,958
741,171
1,200,000
5,680,000
- 6,000,000
4,324,364 -
28,850,000
19,378.966
27,525
1,503,433
29,918
11,788
729,383
12,915
200,000
1,000,000
250,000
125,000
5,555,000
130.000
-
- 6,000,000
-
90,828
4,233,536
94,221
28,850,000
32,855,459 34,850,000 19,834,107 47,871,352 51T054
62,564,779 1,313.352 61,251,427 1,362.414
62,564,779 1,313,352 61.251,427 1,362,414
$ 265,749,059 $ 34,850,000 $ 47,631,001 $ 252,968,058 $ 6,601,909
Adjustments:
Unamortized net original issue (discount) or premium
Net Lang -term Debt
(1,127,045)
$ 251.841,013
10 061
41
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8:
Long -Term Liabilities (Continued)
The following schedule illustrates the debt service requirements to maturity for the debt
outstanding as of June 30, 2011:
Tax Allocation Refunding Bonds, Tax Allocation Refunding Tax Allocation Refunding Bonds
Series 1994 - PA No. 1 Bonds, Series 1998 - PA No. 1 Series 1998 - PA No. 2
Principal
Interest
Principal
Interest
Principal -
Interest
2011 -2012
$ 2,305,000
$ 264,443
$ -
$ 819,520
$ 130,000
$ 286,738
2012-2013
2,470,000
90,155
-
819,520
140,000
279,819
2013 - 2014
-
-
655,000
802,490
145,000
272,516
2014 - 2015
-
-
690, 000
767,520
150,000
264,956
2015-2016
-
-
725,000
730,730
160,000
257,013
2016-2021
-
-
4,235,000
3,031,210
930,000
1,149,525
2021 -2026
-
-
5,460,000 -
1,777,100
1.205,000
872,156
2026-2031
-
-
3,995,000
318,630
1,555.000
511,744
2031 -2036
-
-
1,140,000
91,875
Totals
$ 4,775,000
$ 354,598
$ 15,760,000
$ 9,066,720
$ 5,555,000
$ 3,986,342
Tax Allocation
Bonds, Series
Tax Allocation
Bonds, Series
Tax Allocation Bonds Series 2003
2001 - PA No. 1
2002 - PA No. 1
- PA No. 1
Principal
Interest
Principal
Interest
Principal
Interest
2011 -2012
$ -
$ 2,430,720
$ 705,000
$ 1,756,429
$ 530,000
$ 1,453,198
2012-2013
-
2,430,720
735,000
1,727,981
560,000
1,423,495
2013-2014
1,565,000
2,391,595
705,000
1,695,656
590,000
1,392,158
2014-2015
1,645,000
2,311,345
735,000
1.659,656
620,000
1,356,736
2015-2016
1,730,000
2,226,970
770,000
1,622,031
660,000
1,316,800
2016-2021
10,025,000
9,714.225
4.485,000
7,475,031
3,970.000
5,891,984
2021 -2026
12,805.000
6,854,645
5,730,000
6,198.303
5,390,000
4,438,109
2026-2031
16,425,000
3,147,848
10,380,000
4,379,313
7,340,000
2,414,034
2031 - 2036
3,805,000
97,028
10,840,000
662,406
3,645,000
238,441
Totals
$ 48,000,000
$ 31,605,096
$ 35,085,000
$ 27,176,806
$ 23,305.000
$ 19,924,955
2004 Series A
Local Agency
Pass -through Payable -
Revenue Bonds
Due to County
of Riverside
Coachella Valley
Unified School
- Principal
Interest
Principal
Interest
Principal
Interest
2011 - 2012
$ 1,805,000
$ 4,099,719
$ 250,000
$ -
$ 834,076
$ -
2012-2013
1,890,000
4,016,581
- 256,000
-
421,166
-
2013 - 2014
1.975,000
3,924,681
250,000
-
-
-
2014 - 2015
2,075,000
3,823,431
250,000
-
-
-
2015-2016
2,175,000
3,714,463
-
-
-
-
2016- 2021
12,715,000
16,686,250
-
-
-
-
2021-2026
16,430,000
12,885,194
-
-
-
-
2026- 2031
21,055,000
8,149,884
-
-
-
-
2031 - 2036
21,030,000
2,222,969
Totals
$ 81,150,000
$ 59,523,172
$ 1,000,000
$
$ 1,255,242
$
42 ..• 062
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 8:
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2021
2021-2026
2026-2031
2031-2036
2036 - 2041
Long -Term Liabilities (Continued)
USDA Rural Development
Principal
Interest
$ 12,915
$ 72,367
14,267
71,014
15,761
69,520
17,412
67,870
19,235
66,047
130,952
295,458
215,456
210,953
303,385
73,179
Provident Bank
Principal
$ 29,918
32,515
35,341
38,411
41,748
269,873
1,055,627
Interest
$ 124,558
121,959
119,134
116,064
112,726
502,499
14,670
2011 Series A Local Agency
Subordinate Taxable
Revenue Bonds
Principal
Interest
$ -
$ 488,648
-
2,171,767
520,000
2,171,767
540,000
2,152.267
565,000
2,127,967
3,340,000
10,117,192
4,685,000
8,774,045
6,780,000
6,681,460
9,930,000
3,530,174
2,490,000
200,943
Totals $ 729,383 $ 926,408 $ 1,503,433 $ 1,111,610 $ 28,850,000 $ 38,416,230
2011 Subordinate Taxable Tax
Allocation Bonds
Principal
Interest
2011 - 2012
$ -
$ 107,723
2012 - 2013
35,000
478,768
2013-2014
35,000
476,886
2014-2015
40,000
475,005
2015-2016
40,000
472,855
2016-2021
255.000
2,323,194
2021 -2026
355,000
2,216,496
2026-2031
515,000
2,056,974
2031-2036
1,635,000
1,776,702
2036-2041
3,090,000
654,033
Totals
$ 6,000,000
$ 11,038,636
Note 9: Pledge Tax Revenues
As previously discussed, the Agency has pledged, as security for bonds it has issued, either
directly or through the Financing Authority, a portion of the tax increment revenue (including
Low and Moderate Income Housing set -aside) that it receives. These bonds were to provide
financing for various capital projects and accomplish Low and Moderate Income Housing
projects. The Agency has committed to appropriate each year, from these resources amounts
sufficient to cover the principal and interest requirements on the debt. Total principal and
interest remaining on the debt is $449,572,555 with annual debt service requirements as
indicated above. For the current year, the total tax increment revenue, net of pass through
payments, recognized by the City was $32,569,795 and.the debt service obligation on the
bonds was $16,604,838.
43 0 063
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 10: Transfers In and Out
The following transfers were made during the year ended June 30, 2011:
Transfers Out:
Capital Project
Redevelopment Agency - PA No. 1
Redevelopment Agency - PA No. 2
Special Revenue:
Low/Moderate Income Housing PA No. 1
Low/Moderate Income Housing PA No. 2
Total
Transfers in
Debt Service
Special
Revenue
Housing
Housing
Authority PA
Authority PA
PA No. 1
PA No. 2
No. 1
No. 2
Total
$ 15,039,194
$ -
$ -
$ -
$ 15,039,194
-
4,303,660
-
-
4,303,660
4,438,932
-
781.094
-
5,220.026
1,951,993
-
509,112
2,461,105
$ 19,478.126
$ 6,255.653
$ 781,094
$ 509,112
$ 27,023,985
a) $4,438,932 was transferred from the Low/Moderate Income Housing PA No. 1 Fund
to the Redevelopment Agency Debt Service Project Area No. 1 Debt Service Fund to
pay a portion of the 2004 Series A Local Agency Revenue Bond and 1994 Tax
Allocation Bonds debt services.
b) $1,951,993 was transferred from the Low/Moderate Income Housing PA No. 2 Fund
to the Redevelopment Agency Debt Service PA No. 2 Fund to pay a portion of the
2004 Series A Local Agency Revenue Bond debt service.
c) $781,094 was transferred from the Low/Moderate Income Housing PA No. 1 Fund to
the Housing Authority PA No. 1 to pay for rental subsidies associated with the La
Quinta Cove Homes.
d) $509,112 was transferred from the Low/Moderate Income Housing PA No. 2 Fund to
the Housing Authority PA No. 2 to pay for rental subsidies associated with the
Washington Street Apartments.
e) $15,039,194 was transferred from the Redevelopment Agency Capital Project Area
No. 1 to the Redevelopment Agency Debt Service PA No. 1 Fund to repay its part of
the City advances.
f) $4,303,660 was transferred from the Redevelopment Agency Capital Project Area
No. 2 to the Redevelopment Agency Debt Service PA No. 2 Fund to repay its part of
the City advances and to fund the SERAF payment.
44
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 11: Due To/From Other Funds
The following interfund receivables and payables were made during the year ended
June 30, 2011:
Due From Other Funds
Special Revenue Low/Mod PA
No. 1
Special Revenue Low/Mod PA
No. 2
Capital Projects
Redevelopment PA No. 1
Due To Other Funds Amount
Capital Projects - 2011 Low/Mod
Bond $ 3,500
Capital Projects - 2004 Low/Mod
Bond 24,760
Capital Projects Redevelopment
PA No. 2 637,754
Total $ 666,014
All amounts were for short term borrowing to cover temporary cash shortfall.
Note 12: Advances To/From other funds
Advances To Other Funds Advances From Other Funds
Special Revenue Low/Mod PA Special Revenue Low/Mod PA
No. 1 No. 2
The advance was for operating costs.
Note 13: Insurance
Note 14:
Amount
$ 4,328
The Agency is covered under the City of La Quinta's insurance policies. Therefore, the
limitations and self -insured retentions applicable to the City of La Quinta also apply to its
Agency. Additional information as to coverage and self -insured retentions can be obtained by
contacting the City.
Net Pension Asset
In September 2009, the City contributed funds to CalPERS to payoff the side fund for the Past
Service Cost in order to reduce future contribution rates. This amount will be amortized over
the next twelve years. The Agency's portion of the payoff was $107,336. The contribution
requirements of plan member and the City are established and may be amended by
CaIPERS. Additional information on the plan can be obtained from the annual report of the
City. The balance of the net pension asset as of June 30, 2011 is $100,393.
Note 15: Transactions with the State of California
a. SERAF Shift for fiscal year 2010-2011
On July 23, 2009, the State adopted legislation, requiring a shift of monies during fiscal
years 2009-2010 and 2010-2011 to be deposited into the County "Supplemental"
Educational Revenue Augmentation Fund (SERAF). These monies were to be distributed
to meet the State's Prop 98 obligations to schools. The California Redevelopment
Association (CRA) and its member agencies filed a legal action in an attempt to stop
45
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 15: Transactions with the State of California (Continued)
these amounts from having to be paid; however, in May 2010 the Sacramento Superior
Court upheld the legislation.
The payment of the SERAF was due on May 10, 2011 for fiscal year 2010-2011 and it
was made in the amount of $4,855,193 using available resources.
Note 16: California Redevelopment Agency Uncertainty
On July 18, 2011, the California Redevelopment Association ("CRA") and the League of
California Cities ("League') filed a petition for writ of mandate with the California Supreme
Court, requesting the Court to declare unconstitutional two bills that were passed as part of
the 2011-12 State Budget, AB1X 26 and 27. AB1X 26 dissolves redevelopment agencies
effective October 1, 2011. AB1X 27, give redevelopment agencies an option to avoid
dissolution if it commits to making defined payments for the benefit of the State, school
districts and certain special districts. In 2011-12, these payments amount to a state-wide total
of $1.7 billion. In 2012-13 and subsequent years, the payments total $400 million, annually.
Each city or county's share of these payments is determined based on its proportionate share
of state-wide tax increment.
CRA and the League contend that AB1X 26 and 27 are unconstitutional because they violate
Proposition 22 which was passed by the voters in November, 2010. The effect of the
legislation is to achieve a possible unconstitutional result, the use of redevelopment agencies'
tax increment funds to benefit the State and other units of local government, by way of
threatening of the dissolution of redevelopment agencies.
Therefore, the CRA and the League have requested that the Court issue a stay, suspending
the effectiveness of AB1X 26 and 27 until the Court can rule on its constitutionality. CRA and
the League also asked the Court to expedite the briefing and hearing of the case so that a
decision can be rendered by the Court before January 15, 2012, when the first payments are
due. On August 11'", the California Supreme Court agreed to hear the case and granted a
partial stay which was subsequently clarified.
As of the time of the issuance of this report, the outcome of AB1X 26 and 27 upon the Agency
is unknown and consequently the status and even future existence of the Agency is uncertain
as such. In accordance with AB1X 27, the Agency has passed a resolution of intent to
continue and will be required to make a payment to the State by January 15, 2012 to avoid
dissolution. The Department of Finance issued their estimated payment amounts and the
Agency filed an appeal regarding the calculation. The estimated payment amount based on
the revised calculation is $17,018,721.
Note 17: Subsequent Event
In June 2011, the Agency entered into an Owner Participation Agreement (OPA) with an
autodealer, Mega Dealer, LLC ("Torre Nissan") that provides for the Agency to provide a
rehabilitation loan to Torre Nissan of up to $1,500,000 for the remodeling of the existing
dealership and an expansion of the dealership facility to accommodate a new line of electric
and commercial vehicles. The new expansion will also include service and parts sales
facilitates. In connection with the OPA, Torre Nissan has executed a promissory note, which
is secured by a subordinated deed of trust and an operating covenant. Interest on the note
46 •,111 0,66
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2011
Note 17: Subsequent Event (Continued)
shall accrue on the outstanding principal balance at the 1-year LIBOR Rate, adjusted annually
on each June 30' . The loan will be repaid by crediting future sales and property tax
increment taxes generated on the site until the cumulative taxes collected equals the
outstanding loan amount. At that time, the note will be cancelled and the operating covenant
will terminate. If at any time during the term of the note Nissan Motor Company ceases to
exist, the note will be cancelled and the operating covenant will terminate. At the end of the
ten-year operating covenant, the operating covenant will terminate and the note will be
cancelled, and any outstanding loan balance will be forgiven. As of June 30, 2011 no
payments have been made under this agreement.
.is 061
47
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA BALANCE SHEET
ALL GOVERNMENTAL FUNDS
JUNE 30, 2011
Redevelopment Agency
PA No. 1
Capital
Capital
Debt Capital
Projects
Projects
Service Projects
2004
2011
Low/Mod
LOW/Mod
Tax
Bond
Bond
Increment Project
ASSETS
Cash and investments
$ -
$ -
$ 1,132,207 $ 9,943,802
Cash and investments with trustee
3,331,915
25.535,470
- 9,204,891
Receivables:
Tax increment
-
-
27,485 -
Accounts
-
3,500
- -
Interest
-
-
379 8,549
Loans
-
-
- -
Prepaid costs
-
-
- -
Due from capital projects funds
-
- -
- 637,754
Due from low and moderate
housing funds
-
-
- -
Due from City
-
-
- 3,284,621
Deposits with others
Advances to other funds
Total Assets - $ 3,331,915 $ 25,538,970 $ 1,160,071 $ 23,079,617
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ - $ - $ - $ 53,296
Deposits from others - - - -
Due to capital projects funds - - - -
Due to low and moderate
housing funds 24,760 3,500 - -
Due to other governments - - 414,728 -
Deferred revenue - - - -
Advances from other funds - - - -
Total Liabilities 24,760 3,500 414,728 53,296
Fund Balances:
Nonspendable:
Prepaid costs - - - -
Long-term receivables and deposits - - - -
Restricted for:
Debt service - - 745,343 -
Low and moderate income housing 3,307,155 25,535,470 - -
Community development - - - - 23,026,321
Total Fund Balances 3,307,155 25,535,470 745,343 23,026,321
Total Liabilities and
Fund Balances $ 3,331,915 $ 25,538,970 $ 1,160,071 $ 23,079,617
48 p 068
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA BALANCE SHEET -
ALL GOVERNMENTAL FUNDS
JUNE 30, 2011 (Continued)
ASSETS
Cash and investments
Cash and investments with trustee
Receivables:
Tax increment
Accounts
Interest
Loans
Prepaid costs
Due from capital projects funds
Due from low and moderate
housing funds
Due from City
Deposits with others
Advances to other funds
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Deposits from others
Due to capital projects funds
Due to low and moderate
housing funds
Due to other governments
Deferred revenue
Advances from other funds
Total Liabilities
Fund Balances:
Nonspendable:
Prepaid costs
Long-term receivables and deposits
Restricted for:
Debt service
Low and moderate income housing
Community development
Total Fund Balances
Total Liabilities and
Fund Balances
Redevelopment Agency
Redevelopment Agency
PA No. 1
PA No. 2
Special
Special
Debt
Capital
Revenue
Revenue
Service
Projects
Low and
Housing
Moderate
Tax
Authority
Housing
Increment
Project
$ 934,767
$ 8,474,291
$ 15,101
$ -
-
-
600,000
3.931,437
-
6,871
5,112
-
13,542
-
-
24,500
616
5,414
-
307
-
4,012,106
-
2,300,000
3,500
-
-
-
-
1,280,239
4,328
$ 948,925
$ 12,506,510
$ 620,213
$ 7,536,483
$ -
$ 82,824
$ -
$ 28,944
19,967
-
-
-
-
-
637,754
-
60,013
-
-
1,930,492
-
2,300,000
19,967
2,013,316
60,013
2,966,698
2,081,614 - -
- - 560,200 -
928,958 8,411,580 - -
- - - 4,569,785
928,958 10,493,194 560,200 4,569,785
$ 948,925 $ 12,506,510 $ 620,213 $ 7,536,483
49
os9
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA BALANCE SHEET
ALL GOVERNMENTAL FUNDS
JUNE 30, 2011
ASSETS
Cash and investments
Cash and investments with trustee
Receivables:
Tax increment
Accounts
Interest
Loans
Prepaid costs
Due from capital projects funds
Due from low and moderate
housing funds
Due from City
Deposits with others
Advances to other funds
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Deposits from others
Due to capital projects funds
Due to low and moderate
housing funds
Due to other governments
Deferred revenue
Advances from other funds
Total Liabilities
Fund Balances:
Nonspendable:
Prepaid costs
Long-term receivables and deposits
Restricted for:
Debt service
Low and moderate income housing
Community development -
Total Fund Balances
Total Liabilities and
Fund Balances
Redevelopment Agency
PA
No. 2
Special
Special
Revenue
Revenue
TOTALS
Low and
Debt
Capital
Special
Housing
Moderate
Service
Projects
Revenue
Authority
Housing
Funds
Funds
Funds
$ 597,765
$ 22,939,847
$1,147,308
$ 9,943,802
$ 32,946,670
-
-
600,000
42,003,713
-
-
1,278
32,597
-
8,149
37,082
-
-
28,000
50,624
-
15,926
379
8,856
21,956
-
641,486
-
2,300,000
4,653,592
10,563
-
-
-
10,563
-
-
-
637,754
-
24,760 - - 28,260
- - - 4,564,860 -
6,000 - - - 6,000
- 4,328
$ 651,410 $ 23,623,297 $1,780,284 $ 59,486,985 $ 37,730,142
$ 2,263 $ 40,465 $ - $ 82,240 $ 125,552
26,419 - - - 46,386
- - - 637,754 -
- - - 28,260 -
- - 474,741 - -
- 641,486 - 2,300.000 2,571,978
4,328 - - - 4,328
33,010 681,951 474,741 3,048,254 2,748,244
10,563 - - - 10,563
6,000 - - - 2,087,614
- - 1,305,543 - -
601,837 22,941.346 - 28,842,625 32,883,721
- - - 27,596,106 -
618,400 22,941,346 1,305,543 56,438,731 34,981,898
$ 651,410 $ 23,623,297 $1,780,284 $ 59,486,985 $ 37,730,142
50 • O7O
THIS PAGE INTENTIONALLY LEFT BLANK
51 0 071
LA OUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Revenues:
Taxes and Assessments:
Tax increment
Use of Money and Property:
Interest income
Rental income
Sale of real estate
Other revenue:
Miscellaneous revenues
Loan repayments
Total Revenues
Expenditures:
Current:
Planning and Development:
Administrative costs
Professional services
Real estate acquisitions
Acquisition cost
Operation of acquired property
Relocation costs
Site clearance costs
Rehabilitation costs
Subsidy to low and moderate
housing
Capital Outlay:
Project improvement costs
Debt Service:
Debt issuance costs
Interest expense
Long-term debt repayments
Total Expenditures
Excess of Revenues over
(under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Long-term debt issued
Pass through agreement payments
Proceeds from sale of capital assets
Gain (Loss) on sale of land held for resale
Payment to Supplemental Educational
Revenue Augmentation Fund
Contributions to other agencies
Total Other Financing Sources
(Uses)
Excess of Revenues and
Other Sources over (under)
Expenditures and Other Uses
Fund Balances
Beginning of Year
End of Year
Redevelopment Agency
PA No. 1
Capital
Capital
Debt
Capital
Projects
Projects
Service
Projects
2004
2011
Low/Mod
Low/Mod
Tax
Bond
Bond
Increment
Project
$ - $ - $ 35,192,471 $
6,429 12,065 12,802 170,584
4,875,000
305,455
6,429 12,065 35,205,273 5,351,039
386,145 169,567
- 741,732
8,199,012
22,184
1,257
10,743
125,124
-
-
2,018.681
-
632,214
-
-
-
-
10,885,440
-
-
-
27,313,522
-
125,124
632,214
38,585,107
11,163,176
(118,695)
(620,149)
(3,379,834)
(5,812,137)
-
-
19,478,126
-
-
-
-
(15,039,194)
-
28,850,000
-
-
-
-
(19,309,866)
-
-
-
(4,855,193)
-
-
(2,694,381)
-
-
26,155,619 (4,686,933) (15,039,194)
(118,695) 25,535,470 (8,066,767) (20,851,331)
3,425,850 - 8,812,110 43,877,652
$ 3,307,155 S 25,535,470 $ 745,343 $ 23,026,321
52
072
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
(Continued)
Redevelopment Agenc
Redevelopment Agency
PA
No. 1
PA No. 2
Special
Special
Debt
Capital
Revenue
Revenue
Service
Projects
Low and
Housing
Moderate
Tax
Authority
Housing
Increment
Project
Revenues:
Taxes and Assessments:
Tax increment $
-
$ 8,798,118
$ 19,349,036
$
Use of Money and Property:
Interest income
3.744
42,092
47,887
20,925
Rental income
248,196
-
-
-
Sale of real estate
-
-
_
_
Other revenue:
Miscellaneous revenues
1,302
780
-
-
Loan repayments
-
53,377
-
-
Total Revenues
253,242
8,894,367
19,396,923
20,925
Expenditures:
Current:
Planning and Development:
Administrative costs
1,939
382,103
215,555
50,632
Professional services
1,139
907,077
-
231,973
Real estate acquisitions
-
678,600
-
-
Acquisition cost
-
_ 23,383
-
-
Operation of acquired property
221,503
-
-
-
Relocation costs
-
Site clearance costs
-
-
_
_
Rehabilitation costs
-
470,558
-
2,300,000
Subsidy to low and moderate
housing
-
324,940
-
-
Capital Outlay:
Project improvement costs
-
320,045
-
1,797,569
Debt Service:
Debt issuance costs
-
-
-
194,707
Interest expense
11
-
2,765,596
-
Long-term debt repayments
-
-
20,278,166
-
Total Expenditures
224,592
3,106,706
23,259,317
4,574,881
Excess of Revenues over
(under) Expenditures
28,650
5,787,661
(3,862,394)
(4,553,956)
Other Financing Sources (Uses)
Transfers in
781,094
-
6,255,653
-
Transfers out
-
(5,220,026)
-
(4,303,660)
Long-term debt issued
-
-
-
6,000,000
Pass through agreement payments
-
-
(16,297,223)
-
Proceeds from sale of capital assets
-
243,222
-
3,445.000
Gain (Loss) on sale of land held for resale
120,628
-
-
-
Payment to Supplemental Educational
Revenue Augmentation Fund
-
-
-
-
Conbibutions to other agencies
-
-
-
-
Total Other Financing Sources
(Uses)
901,722
(4,976,804)
(10,041,570)
5,141,340
Excess of Revenues and
Other Sources over (under)
Expenditures and Other Uses
930,372
810,857
(13,903,964)
587,384
Fund Balances
Beginning of Year
(1,414) .
9,682,337
14,464,164
3,982,401
End of Year
$ 928,958
$ 10,493,194
$ 560,200
$ 4,569,785
53
e n73
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Redevelopment Agency
PA No. 2
Special
Special
Revenue
Revenue
TOTALS
Low and
Debt
Capital
Special
Housing
Moderate
Service
Projects
Revenue
Authority
Housing
Funds
Funds
Funds
Revenues:
Taxes and Assessments:
Tax increment
$ -
$ 4,837,259
$ 54,541,507
$ -
$ 13,635,377
Use of Money and Property:
Interest income
1,046
143,643
60,689
210,G03
190,525
Rental income
665,113
-
-
-
913,309
Sale of real estate
-
-
-
4,875,000
-
Other revenue:
Miscellaneous revenues
3,185
-
-
305,455
5,267
Loan repayments
-
8,719
-
-
62,096
Total Revenues
669,344
4,989,621
54,602.196
5,390,458
14,806,574
Expenditures:
Current:
Planning and Development:
Administrative costs
1,800
225,496
601,700
220,199
611,338
Professional services
1,139
765,192
-
973,705
1,674,547
Real estate acquisitions
-
-
-
8,199,012
678,600
Acquisition cost
-
-
-
-
22,184
23,383
Operation of acquired property
315,972
-
-
-
537,475
Relocation costs
-
-
-
1,257
-
Site clearance costs
-
-
-
10,743
-
Rehabilitation costs
-
-
-
2,300,000
470,558
Subsidy to low and moderate
housing
-
12,068
-
-
337,008
Capital Outlay:
Project improvement costs
-
409,734
-
3,941,374
729,779
Debt Service:
Debt issuance costs
-
-
-
826,921
-
Interest expense
200,455
-
13,651,036
200,466
Long -tens debt repayments
39,313
-
47,591,688
-
39,313
Total Expenditures
558,679
1,412,490
61,844,424
16,495,395
5,302,467
Excess of Revenues over
(under) Expenditures
110,665
3.577,131
(7,242,228)
(11,104,937)
9,504,107
Other Financing Sources (Uses)
Transfers in
509,112
-
25,733,779
-
1,290.206
Transfers out
-
(2,461,105)
-
(19,342,854)
(7,681,131)
Long-term debt issued
-
-
-
34,850,000
-
Pass through agreement payments
-
-
(35,607,089)
-
-
Proceeds from sale of capital assets
-
-
-
3,445,000
243,222
Gain (Loss) on sale of land held for resale
-
-
-
-
120,628
Payment to Supplemental Educational
Revenue Augmentation Fund
-
-
(4,855,193)
-
-
Contributions to other agencies
-
-
-
(2,694.381)
-
Total Other Financing Sources
(Uses)
509,112
(2,461,105)
(14,728,503)
16,257,765
(6,027,075)
Excess of Revenues and
Other Sources over (under)
Expenditures and Other Uses
619,777
1,116,026
(21,970,731)
5,152,828
3,477,032
Fund Balances
Beginning of Year -
(1,377)
21,825,320
23.276,274
51,285,903
31,504,866
End of Year -
$ 618,400
$ 22,941,346
$ 1,305,543
$ 56,438,731 $
34,981,898
54
0- 074
LA QUINTA REDEVELOPMENT AGENCY
COMPUTATION OF LOW AND MODERATE
INCOME HOUSING FUNDS
evreeercuoolue
Opening Fund Balance
Less Unavailable Amounts:
Unspent debt proceeds (Section 33334.12 (g)(3)(13))
Rehabilitation loans and advances
Available Low and Moderate Income Housing Funds
Low and Moderate Housing Funds Low and Moderate Housing Funds
All Project Areas All Project Areas
July 1, 2010 July 1, 2011
$ 34,933,507
$ 62,277.165
$ (5,569,552) $(28,867,385)
(2,088,709) (2,081,614)
(7,658,261) (30,948,999)
27,275,246 31,328,166
Limitation (greater of $1,000,000 or four years set -aside)
Set -Aside for last four years:
2010 - 2011
-
2009- 2010
14,820,242
2008 - 2009
15,825,773
2007 - 2008
16,641,016
2006 - 2007
15,701,666
Total $
62,988,697
Base Limitation $
1,000,000
Greater amount
Computed Excess/Surplus
13,635,337
14,820,242
15,825,773
16,641,016
$ 60,922,368
$ 1,000,000
62,988,697
None
60,922,368
None
55 075
THIS PAGE INTENTIONALLY LEFT BLANK
56 .• 076
ATTACHMENT 2
oil
CERTIFIED PUBLIC ACCOUNTANTS
• Brandon W Burrows, CPA
• David E. Hale, CPA, CFP
A Professional Corporacon
• Donald G. Slater, CPA
• Richard K. Kikuchi, CPA
• Susan F Matz, CPA
• Shelly K. Jackley, CPA
• Bryan S. Gruber, CPA
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Chair and Members of the Governing Board
La Quinta Redevelopment Agency
City of La Quinta, California
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the La Quinta Redevelopment Agency, (the Agency) as of and
for the year ended June 30, 2011, which collectively comprise the Agency's basic financial statements
and have issued our report thereon dated September 27, 2011. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Agency's internal control over financial reporting
as a basis for designing our auditing procedures for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
Agency's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the Agency's internal control over financial reporting.
A deficiency in intemal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect misstatements on a timely basis. A material weakness is a deficiency, or combination of
deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of
the Agency's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses, as defined above.
Lance, Soll B Longhard, LLP 203 North Brea Boulevard -Suite 203 - Brea, CA 92821 -TEL: 714.672.0022 • Fax: 714.672.0331 lar"Aslcpas.cona
41185 Golden Gate Circle • Suite 103 • Murrieta, CA 92562 -TEL: 95IM40 2728 -Fax: 951_304.3940
4 077
O 93�9
If811HE0D FUNNLIC OCf OOM1OO13
To the Honorable Chair and Members of the Governing Board
La Quinta Redevelopment Agency
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Agency's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
This report is intended solely for the information and use of management, governing board, State
Controller, and the federal awarding agencies and pass -through entities, and is not intended to be and
should not be used by anyone other than these specified parties.
04 '10tv .9,-4 4a,
Brea, California
September 27, 2011
• 078
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OF TF�
COUNCIL/RDA MEETING DATE: October 18, 2011
ITEM TITLE: Discussion Regarding Washington
Street Apartments
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: _
STUDY SESSION:
PUBLIC HEARING:
Review the site plan, draft architectural drawings, draft floor plans, and schedule for
the Washington Street Apartment Rehabilitation project.
FISCAL IMPLICATIONS:
Funding for the Washington Street Apartment Rehabilitation Project is included in the
Fiscal Year 2010/201 1 Capital Improvement Program. Additional appropriations will be
required to fund construction activities.
BACKGROUND AND OVERVIEW:
On May 17, 2011, the Redevelopment Agency Board ("Board") reviewed a preliminary
site plan and schedule for the Washington Street Apartments ("WSA") Rehabilitation
Project. The following is a summary of the project which was included in that report:
Existing Condition:
• 30 year -old apartment complex on approximately 4.7 acres
• 72 one -bedroom units, plus one manager's unit
• Commons building includes an office, manager's unit, recreation room, laundry
room, restrooms, and storage areas
• Rented to very -low income seniors (age 62+) and disabled adults
• USDA Rural Development provides 100% rental subsidy
• Low wall along Washington Street, dead oleanders, no noise attenuation
4 0?9
Phase 1:
• Improve existing wall along Washington Street
• Re -landscape Washington Street frontage
• Add 1 .69 acres of the vacant property to the WSA property; total of 6.4 acres
• Demolish existing commons building and manager's unit
• Construct new main drive aisle and parking areas
• Construct retention basin
• Construct 24 new one -bedroom units on the site for same population; becomes
part of the Washington Street Apartment complex
• Construct two additional units to house manager & maintenance person
• Construct new commons building with office, recreation room, storage, laundry,
restrooms, outdoor swimming pool and spas, if possible
• Possible utility undergrounding (note -this will occur along the Washington Street
frontage as part of the sound wall improvements)
Phase 2:
• Relocate 24 residents at a time to new units; substantially rehabilitate old units;
continue process until all 72 existing units have been rehabilitated
• Work with Rural Development to add the new units to its rental subsidy
program
• When completed, total unit count, including manager & maintenance units = 98
(15.3 units per acre)
Since the last Agency Board review, the project team has been refining the site plan
and has completed draft architectural drawings and floor plans in preparation for the
entitlement process. Please note the landscaping depicted in the attachment is
conceptual only. The landscape architect is currently working on a planting plan that
will include a variety of trees, water efficient shrubs, and ground cover.
Attachment 1 is the revised site plan. Some of the major changes that were made
since the Board's last update include:
• Relocating one of the access drives to the southern end of the project, instead
of having dwelling units along the south property line.
• Combining the manager's office and Commons area in the same building.
• The Laundry & Maintenance Building area has been separated from the
Commons building and will have a trellis -shaded sitting area that will face a
water feature.
• In the central parking area, provide a fire engine access turn ("hammerhead")
that doubles as a "plaza" which can be used for community gatherings.
• Removing the spas that were located in each of the courtyard areas and adding
a spa closer to the pool located south of the Commons building and office.
• Designating an area for a larger recreation area and retention basin.
• The pedestrian access on Hidden River Road has been moved to the west of the
project and will no longer be adjacent to the vehicle access drive. The
0 r%Rn
pedestrian walkway will have a raised speed table in the area between the two
parking lots for a traffic calming effect.
Attachment 2 contains the architectural renderings and floor plans for the existing
units. The existing buildings will be completely rehabilitated on the inside and also
include additional changes to the exterior of the buildings. The architectural rendering
depicts the rooftop "thermal chimneys" that provide additional air circulation and hide
the mechanical units. The patios have been opened up from their current
configuration, allowing for more light to enter the units and providing opportunities to
interact with neighbors. Unique patio features include 18" high seat walls, a planter
area, and a horizontal screen for privacy in front of the living room window. The floor
plans provide for handicap accessibility in every unit. Each unit is approximately 650
square feet, with one bedroom, kitchen and dining area, and built-in storage in the
living room.
Four of the six new buildings that will be constructed in the first phase of the project
are for housing and consist of residential units, manager's unit, and a maintenance
person's unit. Three of the buildings will be located at the south end of the property
and the fourth building will be located on the northeast corner of the site. Attachment
3 includes an architectural rendering of the new buildings, a view of the relationship
between the new and existing buildings, and floor plans. The new buildings will
include some design elements that will be similar to the rehabilitated existing units,
such as thermal chimneys and partially enclosed patios with low seat walls. The new
rooflines include interlaced, alternately sloped roofs, which respect the "butterfly"
roofs of the existing units. Each unit proposed for the new building will be a "through
unit," in which the apartment will run from the front to the back of the building. Each
unit will have a porch with an 18" seat wall. Both the front and back of each unit will
have a reed -like metal screen to protect privacy. All units will have one bedroom, with
the exception of the manager and maintenance person units, which will have two
bedrooms. At 685 square feet, the new one bedroom units are slightly larger than the
rehabilitated units, which are attributed to the addition of a hallway. All units will also
provide handicap accessibility.
As previously noted, the Laundry and Maintenance Building will include a shaded
sitting area that will face a water feature (Attachment 4-renderings and floor plans).
The building will be placed in between two different parking areas with a "living
screen" provided on the north and south sides.
The brand new Commons building (Attachment 5-rendering and floor plans) will be
located north of the retention basin/outdoor recreation area. The Commons building
will include a multipurpose room, outdoor sitting garden, outdoor lounge area, kitchen,
storage room, and restrooms. The building will also include an office for the on -site
manager. The pool will be partially shaded by the patio cover, and the spa will be next
to the pool.
081
Attachment 6 provides photographs of examples of details that will be utilized
throughout the site. Some of the images include living screens, the use of color, and
overall ideas on how to enhance the outdoor living environment of the residents.
Attachment 7 is the revised project entitlement schedule, which has been greatly
accelerated. This is due to the potential State actions regarding redevelopment. The
Supreme Court will be ruling on the constitutionality of AB x1 26 ("Dissolution Act")
and AB x1 27 ("Continuation Act") on or before January 15, 2012. However, there is
concern that no matter which way the Court rules, the State may attempt other
measures to obtain or divert redevelopment funds.
The project development plans will be taken through the development review process,
with Planning Commission review and potential approval of the Site Development
Permit/Tentative Parcel Map/Conditional Use Permit scheduled for January 10, 2012.
Staff will provide more information about the attachments during the Agency Board
and Housing Authority Board study session.
Respectfully submitted,
Debbie Powell
Economic Development/Housing Manager
Approved for submission by:
�homas P. Genovese, Executive Director
Attachments: 1 .
Revised Site Plan
2.
Architectural Rendering and Floor Plans for Existing Units
3.
Architectural Rendering and Floor Plans for New Units
4.
Architectural Rendering and Floor Plan for Laundry Room
and Maintenance Building
5.
Architectural Rendering and Floor Plan of Commons Building
6.
Photographs
7.
Revised Project Schedule
0 082
ATTACHMENT
Site Plan
Washington Street Apartments • Lo Quinta, California
9
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