2012 10 02 SACITY AS SUCCESSOR ACENCY
TOTH E LA QUINTA REPEVELOPMENT ACIENCY
Agendas and staff reports are
available on the City's web page:
www.la-quinta.org
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico I La Quinta, California
Regular Meeting
TUESDAY, OCTOBER 2, 2012 AT 4:00 P.M.
Beginning Resolution No. SA 2012-011
CALL TO ORDER
ROLL CALL
Agency Members: Evans, Franklin, Henderson, Osborne. and Chairperson Adolph
CLOSED SESSION - NONE
PUBLIC COMMENT
At this time, members of the public may address the Successor Agency on any matter not
listed on the agenda. Please complete a "request to speak" form and limit your comments
to three minutes. The Successor Agency values your comments; however in accordance
with State law, no action shall be taken on any item not appearing on the agenda unless it
is an emergency item authorized by GC 54954.2(b).
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
APPROVAL OF MINUTES OF SEPTEMBER 18, 2012
CONSENT CALENDAR
NOTE: Consent Calendar items are routine in nature and can be approved by one motion.
1 APPROVAL OF DEMAND REGISTER DATED OCTOBER 2, 2012
CITY AS SUCCESSOR AGENCY TO RDA 1 OCTOBER 2, 2012
2. APPROVAL OF A RESOLUTION AUTHORIZING THE PROCESSING OF
DOCUMENTATION CONFIRMING THE SUCCESSOR AGENCY'S OWNERSHIP
OF CERTAIN NON -HOUSING PROPERTIES AND CONDITIONALLY
AUTHORIZING PROCESSING OF DOCUMENTATION TO REVERSE CERTAIN
PURCHASE AND SALE TRANSACTIONS PURSUANT TO HEALTH & SAFETY
CODE SECTION 34167.5
BUSINESS SESSION _- NONE
STUDY SESSION — NONE
DEPARTMENT REPORT
TRANSMITTAL OF AB 1484 LOW -MOD INCOME HOUSING FUND DUE
DILIGENCE REVIEW
ADJOURNMENT
The next regular meeting of the City as Successor Agency to the La Quints Redevelopment
Agency will be held on October 16, 2012 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
1, Susan Maysels, Agency Secretary of the City as Successor Agency to the La Quinta
Redevelopment Agency, do hereby declare that the foregoing agenda 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 September 28, 2012.
DATED: September 27, 2012
SUSAN MAYSELS, Agencl StecretarY
City of La Quinta, California
CITY AS SUCCESSOR AGENCY TO RDA 2 OCTOBER 2, 2012 00902
Public Notices
The La Quinta City Council Chamber is handicapped accessible. If special equipment is
needed for the hearing impaired, please call the City Clerk's Office at 777-7103, twenty-
four (24) hours in advance of the meeting and accommodations will be made.
If special electronic equipment is needed to make presentations to the Successor Agency,
arrangement should be made in advance by contacting the City Clerk's Office at 777-7103.
A one (1) week notice is required.
If background material is to be presented to the Successor Agency meeting, please be
advised that eight (8) copies of all documents, exhibits, etc., must be supplied to the
Agency Secretary for distribution. It is requested that this take place prior to the beginning
of the meeting.
Any writings or documents provided to a majority of the 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.
CITY AS SUCCESSOR AGENCY TO RDA 3 OCTOBER 2, 2012' 00�1
Tar 4 4 a"
CITY / "A HA / FA MEETING DATE: October 2, 2012
ITEM TITLE: Approval of Demand Register Dated
October 2, 2012
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLTr. HFARINGi
RECOMMENDED ACTION:
It is recommended the Successor Agency of the La Quinta Redevelopment Agency:
Receive and File the Demand Register Dated
October 2, 2012 of which $166,968.50
Represents Successor Agency Expenditures as detailed below:
Vendor:
Account #:
Amount:
Purpose:
Rutan & Tucker
231-9001-702.32-01
$960.00
Retainer
Rutan & Tucker
232-9002-702.32-01
$480.00
Retainer
Rutan & Tucker
232-9002-702.32-01
$5,628.50
SA -Coral Mt DDA
Rutan & Tucker
232-9002-702.32-01
$144.00
SA -Washington St Apt
Rutan & Tucker
237-9001-702.32-01
$480.00
Retainer
Rutan & Tucker
237-9001-702.32-01
$4,468.50
SA-AB26 Implementation
Rutan & Tucker
238-9002-702.32-01
$960.00
SA-AB26 Implementation
Torre Nissan
417-9002-702.80-05
$153,847.50
Disbursement Request
0000 4
By adoption of Resolution No. 2012-002, the City of La Quinta has affirmatively elected to be
the Successor Agency of the La Quinta Redevelopment Agency. Pursuant to Health and
Safety Code Section 34177(a), the Successor Agency of the La Quinta Redevelopment
Agency shall continue to make payments required pursuant to an adopted enforceable
obligations payment schedule. The payments above are required pursuant to the enforceable
obligations payments schedule adopted by the La Quinta Redevelopment Agency on January
17,2012.
Pursuant to Health and Safety Code Seciton 34173(e), the liability of the Successor Agency of
the La Quinta Redevelopment Agency, when acting pursuant to the powers granted under
ABX126, are limited to the extent of the total sum of property tax revenues it receives pursuant
to part 1.85 of ABX126 (e.g., Health and Safety Code Sections 34170 — 34190) and the value
of assets transferred to it as Successor Agency for the dissolved La Quinta Redevelopment
Agency.
EXECUTIVE SUMMARY:
None.
FISCAL IMPACT:
None.
BACKGROUNDIANALYSIS:
None.
ALTERNATIVES:
None.
Respectfully submitted,
644&n�z S-IArj
Robbeyn BIrd, Finance Director
In
M #
rA MEETING DATE: October 2, 2012
ITEM TITLE: Adoption of a Resolution Authorizing the
Processing of Documentation Confirming the Successor
Agency's Ownership of Certain Non -Housing Properties
and Conditionally Authorizing Processing of
Documentation to Reverse Certain Purchase and Sale
Transactions Pursuant to Health & Safety Code Section
:34167.5
RECOMMENDED ACTION:
AGENDA CATEGORY:
BUSINESS SESSION:
*17
CONSENT CALENDAR: I
61t111ri&3*$30xF
Adopt a Resolution (1) authorizing the processing of documentation confirming the
Successor Agency's ownership of 10 non�housing public use properties; and (2)
conditionally authorizing the processing of documentation to reverse the purchase
and sale transactions for the City's purchase of (a) the 86 acres of vacant land
zoned for private development at the southwest corner of Jefferson Street and
Ave. 52, and (b) the 9.89 acres of commercial property on Highway 111 and Dune
Palms, including all actions necessary to refund the purchase price paid by the City,
such as adding the obligation to refund the purchase price to the Recognized
Obligation Payment Schedule.
EXECUTIVE SUMMARY:
The attorneys in the Post Redevelopment Working Group for the League of
California Cities have been in general agreement until just recently that city -
redevelopment agency property transfers that predated June 27, 2011, the
effective date of Al3x1 26 ("AB 26") should be left in place until the completion of
upcoming audits and the State Controller's review of the audit results. However, in
late September, the Working Group reached a consensus that with regard to non -
housing properties that were transferred by redevelopment agencies to their host
cities from January 1, 2011 to June 30, 2011, the host city should consider
transferring the properties to the successor agencies and, in essence, rescinding
(e.g. unwinding) the 2011 transfers. It is suggested that these steps be taken prior
to the commencement (or at least the completion) of the Due Diligence Review
("DDR")/Audit relating to the former redevelopment agencies' non -housing assets,
which must be completed by December 15, 2012. The auditors conducting the
DDR/Audit concurred that these steps are advisable given certain language in AB
26 and AB 1484.
FISCAL IMPACT:
The City and the Successor Agency will incur some administrative and legal costs
related to preparing and recording quitclaim deeds. If the purchase and sale
transactions are fully reversed, or "rescinded," the City should receive a refund of
$8,320,000, the consideration it paid for some of the properties from the
Successor Agency. This repayment obligation would have to be listed on the ROPS
and be paid out of future tax increment. It is difficult to predict the other potential
impacts of these actions.
BACKGROUND/ANALYSIS:
In anticipation of the passage of AB 26, many redevelopment agencies transferred
their assets to their host cities. AB 26 included a provision intended to reverse
these wholesale transfers. Specifically, AB 26 states that "[tlhe Legislature hereby
f inds that a transf er of assets by a redevelopment agency [after January 1 , 20111
is deemed not to be in the furtherance of the Community Redevelopment Law and
is thereby unauthorized." AB 26 further states, in part, that 1clornmencing
[February 1, 20121, ... arrangements between the city ... that created the
redevelopment agency and the redevelopment agency are invalid ......
AB 26 envisioned all of a redevelopment agency's assets going to its successor
agency for appropriate disposition. In this regard, AB 26 states, in part, that "[alll
... properties [and] buildings ... of the former redevelopment agency are transferred
on [February 1, 20121, to the control of the successor agency."
On April 20, 2012, the California State Controller issued a letter to all public
agencies that stated "[ilf your city ... received any assets from a redevelopment
agency after January 1, 2011, your city ... hereby is ordered to ... reverse the
transfer and return the applicable assets to the successor agency of the relevant
redevelopment agency."
AB 1484 ("AB 1484") was signed by the Governor on June 27, 2012. It makes
changes to AB 26 and establishes the DDR/Audit process. The DDR/Audit process
includes a review of the property transfers from redevelopment agencies to their
host cities. The DDR/Audit includes a process by which the auditor is to calculate
the amount of funds available to be distributed to affected taxing agencies. Of
0001";
particular concern is a provision stating that the auditor is to "add any amounts
that were transferred as identified in [section 34179.5(c)(2)] if an enforceable
obligation to make that transfer did not exist." (Health & Safety Code section
34179.5(c)(6).) Section 34179.5(c)(2) consists of "the dollar value of assets and
cash and cash equivalents transferred after January 1, 2011 ."
AB 1484 contains a definition of "transferred," but unfortunately, like many other
provisions of AB 26 and AB 1484, the definition is ambiguous. Section
341 79.5(b)(3) defines "transferred" as "the transmission of money to another party
that is not a payment for goods or services or an investment...." It is unclear if or
how this definition is intended to apply to the conveyance of real property.
Moreover, it is unclear how it applies in situations where the conveyance is made
for fair consideration (e.g., the fair market value of the property).
Based upon the language in AB 1484, concerns have been raised by the League
Working Group that the accountants performing the non -housing DDR/Audit will
add the value of real property transferred during the subject time frame to the
remittance amount that is to be turned over to the County Auditor/Controllers for
distribution to the taxing agencies. (Health & Safety Code section 34179.5(c)(6).)
The auditor conducting the La Quinta DDR/Audit indicated that this would be an
unlikely result given the fact that the real property assets are not liquid assets.
Nonetheless, in order to be conservative and to comply with the letter of the
legislation, transferring the properties to the Successor Agency is recommended.
In addition, based upon the two completed "Asset Transfer Review Reports" issued
by the State Controller's Office (Milpitas and Morgan Hill), it is likely that the 10
properties that were transferred without compensation will ultimately be ordered to
be conveyed to the Successor Agency for distribution consistent with AB 26. The
State Controller's office has taken the position that even public use properties that
ultimately may be transferred to the City for public use must first be held by the
Successor Agency and then transferred to the appropriate agency or entity with the
approval of the Oversight Board. Is it important to note that Health & Safety Code
section 34181 (a) allows the Oversight Board to permit the transfer of government
use property to the City.
Twelve non -housing properties held by the former Redevelopment Agency were
conveyed to the City in the subject time period. Of those, ten were transferred as
existing or future public/government facilities for which no compensation was paid
by the City (Attachment 1). The other* two properties - the commercial/hotel
development pads comprising approximately 86 acres of SilverRock Resort and
9.89 acres on Highway 111 north of the Coral Mountain project - were purchased
by the City for their fair market value as determined by independent appraisals. A
total of $8,320,000 was paid by the City for those properties.
In order to convey the 10 government purpose properties to the Successor Agency,
the City will need to execute quitclaim deeds in favor of the Successor Agency,
and the Successor Agency will need to execute an acceptance of those properties.
The City and the Successor Agency, through these actions, are essentially
rescinding the prior transfers. The actions are authorized by the accompanying
resolution. The resolution specifies that the City may still use these properties
even though title is being taken in the name of the Successor Agency.
As to the properties ultimately slated for private redevelopment, it is illogical to
assume that the fair market value transactions between the City and the former La
Quinta RDA should be reversed, since that would further deplete the former La
Quinta RDA's funding. Unfortunately, AB 26 and AB 1484 do not address asset
transfers made for fair market value. Even if the law clearly required reversal,
reversing the purchase and sale transactions would require the purchase price and
property maintenance costs to be refunded to the City. However, the Successor
Agency is not authorized to make such a refund unless the refund is approved by
the Oversight Board and the Department of Finance. Moreover, the refund would
have to be paid from future tax increment and the refund obligation would have to
be added to the ROPS. Given that the reversal of these two purchase and sale
arrangements require these steps, the proposed resolution only conditionally
authorizes the reversal of those transactions. We anticipate that these transactions
will be examined both in the DDR/Audit and ultimately by the State Controller in its
report on the Asset Transfers. For this reason, we are recommending that the City,
in essence, offer to unwind the purchase and sale transactions if, and only if, the
purchase price and property maintenance costs paid by the City with respect to the
transactions are fully refunded to the City. If the City were ordered to return these
properties without a return of the purchase price and property maintenance costs
paid by the City, staff and the City Attorney would Want to address the appropriate
course of action at that time.
Under AB 26 and AB 1484, once the DDR/Audit is completed, a long -range
property management plan (the "Property Management Plan") will be prepared that
will outline the proposed use or disposition of all properties then -owned by the
Successor Agency. In addition, if at the time the Property Management Plan is
prepared any of the 10 public use properties have not already been transferred
back to the City pursuant to the process set forth in Health & Safety Code section
34181(a) (which authorizes the Oversight Board to permit the transfer of
government use property to the City), the Property Management Plan should
provide for any of such properties to be transferred back to the City for
governmental use.
While these circumstances will preclude a sale of the Highway 111 and SilverRock
Resort properties pending the completion of the DDRs/Audit and the Controller's
001i)g
review of the same, the City and/or Successor Agency remain free to negotiate
transactions that are conditioned upon the completion of the wind down process.
ALTERNATIVES:
Decline to accept the 12 properties pending the completion of the DDRs/Audit and
the Controller's review of the same.
Authorize the Executive Director to accept the conveyance of the 10 government
use properties but take no action with regard to the(a) the 86 acres of vacant land
zoned for private development at the southwest corner of Jefferson Street and
Ave. 52, and (b) the 9.89 acres of commercial property on Highway 111 and Dune
Palms.
Respectfully submitted,
---"3 K Ka e,
a e Jenson
r
A�t;tornr Success r Agency
Attachment: 1 List of 10 Non -Housing Public Use Properties Transferred
From the RDA to the City between Jan. 1, 2011 and
June 30, 2011 for Public Use Purposes
00010
ATTAcHMENT 1
List of 10 Non -Housing Public Use Properties
Transferred From the RDA to the City between Jan. 1,
2011 and June 30, 2011 for Public Use Purposes
1
243 acres of vacant land purchased with tax exempt
bonds intended and zoned for public use at the
southwest corner of Jefferson and Ave. 52
2
Addition to Fritz Burns Park
,3
La Quinta Museum
41
Library Parking Lot (Paved with Shade Structures)
5
Parking Lot behind Village Community Police Station
6
Public �arking Lot in Village
7
Landscaped Lot Next to Senior Center
8
Pioneer Park
9
La Quinta Park
I 101Highway
.30 acre landscape lot -Parcel Map 33588, SW Corner
111 and Dune Palms Road
0001,
RESOLUTION NO. SA 2012-
A RESOLUTION OF THE CITY OF LA QUINTA
ACTING AS SUCCESSOR AGENCY TO THE LA
QUINTA REDEVELOPMENT AGENCY
AUTHORIZING THE PROCESSING OF
DOCUMENTATION CONFIRMING ITS OWNERSHIP
OF CERTAIN NON -HOUSING PROPERTIES AND
CONDITIONALLY AUTHORIZING PROCESSING OF
DOCUMENTATION TO REVERSE CERTAIN
PURCHASE AND SALE TRANSACTIONS
WHEREAS, the City Council of the City of La Quinta ("City Council" or "City,"
as applicable) approved and adopted (i) the Redevelopment Plan for La Quinta Project
Area No. 1 ("Project Area No. 1" or "Project Area No. 1 Redevelopment Plan," as
applicable) on November 29, 1983, by Ordinance No. 43, as amended on December
20, 1994, by Ordinance No. 258, on August 19, 2003, by Ordinance No. 388, and on
March 16, 2004, by Ordinance No. 402; and (ii) the Redevelopment Plan for La Quinta
Redevelopment Project Area No. 2 ("Project Area No. 2" or "Project Area No. 2
Redevelopment Plan," as applicable) on May 16, 1989, by Ordinance No. 139, as
amended on December 20, 1994, by Ordinance No. 259, on February 3, 2004, by
Ordinance No. 399, on March 16, 2004, by Ordinance No. 403, and on March 16,
2004, by Ordinance No. 404; and
WHEREAS, the former La Quinta Redevelopment Agency ("Agency") was
engaged in activities to execute and implement the Project Area No. 1
Redevelopment Plan and the Project Area No. 2 Redevelopment Plan (collectively,
the "Redevelopment Plans,") pursuant to the provisions of the California Community
Redevelopment Law (Health and Safety Code § 33000, et seq.) ("CRL"); and
WHEREAS, as part of the 2011-12 State budget bill, the California
Legislature enacted and the Governor signed, ABx1 26 ("AB 26") requiring that
each redevelopment agency be dissolved; and
WHEREAS, an action challenging the constitutionality of AB 26 and
companion bill ABx1 27 was filed in the California Supreme Court by the California
Redevelopment Association, the League of California Cities, and two individual
cities; and
WHEREAS, on December 29, 2011, the Court upheld AB 26; and
WHEREAS, the Agency was responsible for the administration of
redevelopment activities within the City; and
Resolution No. SA 2012-
Non-Housing Agency/City Real Property Transactions
Adopted: October 2, 2012
Page 2
WHEREAS, Section 33220 of the CRL provides that certain public bodies
may aid and cooperate in the planning, undertaking, construction or operation of
redevelopment projects; and
WHEREAS, pursuant to such authority, the City and the Agency worked
cooperatively to implement redevelopment projects and to provide funding
necessary to effectuate the completion of redevelopment projects; and
WHEREAS, pursuant to this cooperative effort, numerous public use
properties were acquired, developed, and/or prepared for development as publically
owned City facilities available for public use, a list of which is attached hereto as
Exhibit A and incorporated herein by this reference (the "Public Use Properties").
The City has assumed operation of the Public Use Properties. These Public Use
Properties were and are intended for use by the City for municipal purposes for
ongoing efforts to redevelop, provide recreational opportunities, revitalize and/or
eliminate blight in the Agency's redevelopment project areas; and
WHEREAS, pursuant to its powers under the CRL, the Agency acquired the
following two additional properties intended for future redevelopment purposes: (1)
a 9.89-acre property on Highway 111 east of Dune Palms Road, which was the
site of a now abandoned mobile home park, and (2) 86 acres within the City's
SilverRock Resort, which are identified for future resort/commercial development, a
list of which is attached hereto as Exhibit B and incorporated herein by this
reference (the "Future Development Properties ");and
WHEREAS, during the time period of January 1, 2011, to June 30, 2011,
the City approved and agreed to accept the ownership of the Public Use Properties,
executing certificates of acceptance (the "Certificates of Acceptance") for the
Agency deeds designed to transfer ownership of the Public Use Properties from the
Agency to the City (the "Agency Deeds"); and
WHEREAS, on or about the dates listed on Exhibit A, the Agency Deeds,
along with the Certificates of Acceptance, were recorded in the official records of
the County of Riverside; and
WHEREAS, the Agency caused the preparation of appraisals of the Future
Development Properties in 2011, and thereafter, the City and Agency entered into
purchase and sale transactions whereby the City acquired the properties in
exchange for paying to the Agency the fair market value of the Future
Development Parcels ($8,320,000); and
WHEREAS, during the time period of January 1, 2011, to June 30, 2011,
the City approved and agreed to accept the ownership of the Future Development
00013
Resolution No. SA 2012-
Non-Housing Agency/City Real Property Transactions
Adopted: October 2, 2012
Page 3
Properties, executing certificates of acceptance (the "FDP Certificates of
Acceptance") for the Agency deeds designed to transfer ownership of the Future
Development Parcels from the Agency to the City (the "FDP Agency Deeds"); and
WHEREAS, none of the transfers of the Public Use Properties, the Future
Development Properties, or any of the related documents and actions, were
challenged within the applicable statute of limitations; and
WHEREAS, AB 26 states, in part, that "Whe Legislature hereby finds that a
transfer of assets by a redevelopment agency [after January 1, 2011 ] is deemed
not to be in the furtherance of the [CRLI and is thereby unauthorized;" and
WHEREAS, AB 26 is unclear whether this provision relating to asset
transfers is intended to extend to fair market value transactions such as those
entered by the City and the Agency for the Future Development Properties; and
WHEREAS, AB 26 further states, in part, that Iclornmencing [February 1,
20121, ... arrangements between the city ... that created the redevelopment
agency and the redevelopment agency are invalid ... ;" and
WHEREAS, by February 1, 2012, the transaction between the City and the
Agency for the purchase and sale of the Future Development Parcels was
complete; and
WHEREAS, AB 26 further states, in part, that "[aIll ... properties [and]
buildings ... of the former redevelopment agency are transferred on [February 1,
20121, to the control of the successor agency;" and
WHEREAS, on or about April 20, 2012, the California State Controller issued
correspondence stating, in part, that "Jilf your city ... received any assets from a
redevelopment agency after January 1, 2011, your city ... hereby is ordered to ...
reverse the transfer and return the applicable assets to the successor agency of the
relevant redevelopment agency;" and
WHEREAS, Assembly Bill 1484 ("AB 1484") was signed by the Governor of
California on June 27, 2012, making changes to AB 26 and certain additional
changes to the CRL; and
WHEREAS, AB 1484, at California Health and Safety Code Section
34179.5(c)(2), categorizes certain assets as those "transferred after January 1,
2011 ... by the redevelopment agency ... to the city ... that formed the
redevelopment agency ...... ("Section 34179.5(c)(2) Assets"); and
00014
Resolution No. SA 2012-
Non-Housing Agency/City Real Property Transactions
Adopted: October 2, 2012
Page 4
WHEREAS, AB 1484, at California Health and Safety Code Section
34179.5(c)(1), categorizes certain other assets as those "transferred from the
former redevelopment agency to the successor agency on or about February 1,
2012." ("Section 34179.5(c)(1) Assets"); and
WHEREAS, because M AB 26 states that a transfer of assets by a
redevelopment agency after January 1, 2011 was "unauthorized," (ii) AB 26
further states that commencing February 1, 2012, arrangements between a
redevelopment agency and the city that created it are "invalid" and (iii) the State
Controller has purported to order that ownership of certain assets be vested in
successor agencies, the Public Use Properties therefore should not be categorized
as Section 341 79.5(c)(2) Assets; and
WHEREAS, because AB 26 states that all properties and buildings of the
former redevelopment agency are transferred on February 1, 2012, to the control
of the successor agency, the Public Use Properties therefore should be categorized
as Section 341 79.5(c)(1) Assets; and
WHEREAS, because the Future Development Properties were conveyed to
the City in exchange for payment of their fair market value, those transactions
cannot be reversed unless and until the purchase prices and property maintenance
costs are refunded to the City; and
WHEREAS, the Successor Agency is willing to accept title to the Future
Development Properties only if the Oversight Board and the State require the
Successor Agency to take title to those properties and also provide for the
Successor Agency to refund the purchase payments and property maintenance
costs to the City; and
WHEREAS, the Successor Agency does not acknowledge that the purported
transfer of the Public Use Properties or the Future Development Properties by the
Agency to the City was not in furtherance of the CRL; and
WHEREAS, the Successor Agency does not acknowledge the effectiveness
of the Legislature's purported deeming not to be in furtherance of the CRL the
purported transfer of assets that was conducted in accordance with the CRL at the
time when made and not challenged within the applicable statute of limitations; and
WHEREAS, the Successor Agency does not acknowledge that commencing
February 1, 2012, arrangements between the redevelopment agency and the city
that created it are invalid; and
00q15
Resolution No. SA 2012-
Non-Housing Agency/City Real Property Transactions
Adopted: October 2, 2012
Page 5
WHEREAS, the Successor Agency does not acknowledge the effectiveness
of the California State Controller's order to reverse the transfer of the Public Use
Properties or the Future Development Properties and return the applicable assets to
the Successor Agency; and
WHEREAS, the Successor Agency has limited financial resources and desires
not to initiate litigation at this time with regard to AB 26, AB 1484 and/or the
purported order by the California State Controller that ownership of the Public Use
Properties be vested in the Successor Agency; and
WHEREAS, in order to avoid the costs of litigation and other costs, the
Successor Agency desires to take action in a manner consistent with AB 26, AB
1484 and the California State Controller's purported order, and in furtherance of its
duties under California Health and Safety Code Sections 34179.6(h)(1) and
341 79.6(f), by processing documentation reflecting its ownership of the Public Use
Properties, without acknowledging the effectiveness of AB 26, AB 1484 and/or
such order and duties, expressly disclaiming the same; and
WHEREAS, the Successor Agency's processing of documentation reflecting
its ownership of the Public Use Properties is not intended to waive, and shall not
constitute a waiver, by the Successor Agency of any constitutional, legal or
equitable rights that the Successor Agency may have to challenge, through
administrative or judicial proceedings, the effectiveness and/or legality of all or any
portion of AB 26 or AB 1484, any determinations rendered or actions or omissions
to act by any public agency or government entity or division in the implementation
of AB 26 and AB 1484, and any and all related legal and factual issues, and the
Successor Agency expressly reserves any and all rights, privileges, and defenses
available under law and equity; and
WHEREAS, this Resolution has been reviewed with respect to applicability of
the California Environmental Quality Act ("CEQA"), the State CEQA Guidelines
(California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the
"Guidelines"), and the City's environmental guidelines; and
WHEREAS, per Section 15301 of the State CEQA Guidelines, the transfer of
real property is exempt from environmental review under CEQA because the
transfer will result in a continuation of an existing facility involving no expansion of
use and is therefore exempt from environmental review, and any future
development of the real property will require separate environmental review; and
WHEREAS, all of the prerequisites with respect to the approval of this
Resolution have been met.
. 001ro
Resolution No. SA 2012-
Non-Housing Agency/City Real Property Transactions
Adopted: October 2, 2012
Page 6
NOW THEREFORE, BE IT RESOLVED, by the City of La Quinta acting as
Successor Agency to the La Quinta Redevelopment Agency, as follows:
Section 1. The foregoing recitals are true and correct and are a substantive
part of this Resolution.
Section 2. The Governing Board of the Successor Agency hereby
authorizes the processing of documentation confirming its ownership of the Public
Use Properties, including the execution of certificates of acceptance therefor. As
to the Future Development Properties, the Board authorizes the processing of
documentation for the reversal of the transactions in which the City purchased
those properties if the purchase price is refunded to the City and if it is conclusively
determined that those transactions are required to be rescinded pursuant to AB 26
and/or AB 1484. If the Future Development Parcels are required to be conveyed to
the Successor Agency, the Executive Director is authorized and directed to take all
steps necessary to ensure the repayment of the purchase price and property
maintenance costs to the City, including adding the repayment obligation to the
Recognized Obligation Payment Schedule.
Section 3. The Executive Director, or designee, is hereby authorized and
directed to take such actions and execute such documents as are necessary to
effectuate the intent of this Resolution on behalf of the Successor Agency.
Section 4. The City shall have the right to continue to use the Public Use
Properties for their intended purpose.
Section 5. This Resolution shall take effect upon the date of its adoption.
Section 6. If any provision of this Resolution or the application thereof to
any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications of this Resolution that can be given effect without the
invalid provision or application, and to this end the provisions of this Resolution are
severable. The Successor Agency hereby declares that it would have adopted this
Resolution irrespective of the invalidity of any particular portion thereof.
PASSED, APPROVED, AND ADOPTED at the meeting of the City of La Quinta
acting as Successor Agency to the La Quinta Redevelopment Agency held this 2 nd
of October, 2012, by the following vote, to wit:
AYES:
NOES:
00117
Resolution No. SA 2012-
Non-Housing Agency/City Real Property Transactions
Adopted: October 2, 2012
Page 7
ASSENT:
ABSTAIN:
DON ADOLPH, Mayor
City as Successor Agency to the La Quinta
Redevelopment Agency
ATTEST:
SUSAN MAYSELS, Successor Agency Secretary
City as Successor Agency
to the La Quinta Redevelopment Agency
(AGENCY SEAL)
APPROVED AS TO FORM-
M. KATHERINE JENSON, Successor Agency Counsel
City as Successor Agency
to the La Quinta Redevelopment Agency
00018
EXHIBIT A
F_ ASSET DESCRIPTION
TRANSFER DATE
1
243 acres of vacant land purchased with tax exempt
bonds intended and zoned for public use at the
southwest corner of Jefferson and Ave. 52
3/4/2011
2
Addition to Fritz Burns Park
3/4/2011
3
La Quinta Museum
3/4/2011
4
Library Parking Lot (Paved with Shade Structures)
3/412011
5
Parking Lot behind Village Community Police Station
314/2011
6
Public Parking Lot in Village
3/4/2011
7
Landscaped Lot Next to Senior Center
3/4/2011
8
Pioneer Park
3/4
9
La Quinta Park
3/4/2011
1 10
.30 acre landscape lot -Parcel Map 33588, SW Corner
lHighway 111 and Dune Palms Road
3/4/2011
EXHIBIT B
SilverRock Resort.
Acreage
Parcel Descri tion
Use
86.87
Parcels within Parcel Map
33367
Future Private Development
Hiahwav 11 IlEast of Dune Palms Road -
Acreage
Parcel Description
Use
-
(Assessors Parcel Number)
9.89
600-020-047
Future Private Development
00020
Department Report: _I
MEMORANDUM
TO: Honorable Mayor and Members of the Successor Agency
FROM: Debbie Powell, Economic Development/Housing Manager —T')4&0'j Q Q
DATE: October 2, 2012
SUBJECT: Transmittal of AB 1484 Low -Mod Income Housing Fund Due Diligence
Review
AB 1484, the 2012 State Budget Trailer Bill, amended the Health & Safety Code
relative to redevelopment dissolution. Section 34179.5 was added requiring each
successor agency to employ a licensed accountant to conduct a due diligence
review (i.e., audit) of the housing and non -housing funds to determine the amount
of unobligated funds available for distribution to taxing agencies. The housing fund
review must be completed by October 1, 2012; the non -housing fund review by
December 1, 2012.
Successor agencies must transmit completed reviews to the oversight board, the
county administrative officer, the county auditor -controller, and the Department of
Finance (DOF). Oversight boards are required to convene a public comment
session at least five business days prior to formally approving the reviews. Prior to
submitting a final approved review to the DOF, an oversight board must consider
public comments, county auditor -controller input, and is also empowered to
authorize a successor agency to retain assets and funds that are legally restricted
(such as bond proceeds), or are considered enforceable obligations. However, the
DOF has power to reverse oversight board decisions. The Oversight Board to the
former La Quinta Redevelopment Agency will hold its public comment session on
October 3, 2012, and will formally review/approve the review on October 10,
2012. The DOF is required to provide its determination no later than November 9,
2012 for the housing fund review, and no later than April 1, 2013 for the non -
housing fund review.
The Low -Mod Income Housing Fund due diligence review is attached. Based on
the review, it appears that all housing funds are obligated, and La Quinta will not
be required to distribute funds to taxing agencies.
A TTA CHMENT
-"-P,AFT
Successor Agency of the Former
La Quinta Redevelopment Agency
Due Diligence Review
of the Low and Moderate Income Housing Fund
Pursuant to Sections 34179.5(c)(1) through 34179.5(c)(3)
and Sections 34179.5(c)(5) through 34179.5(c)(6)
of Assembly Bill No. 1484 of 2012
00022
Successor Agency of the Former
La Quinta Redevelopment Agency
Due Diligence Review
of the Low and Moderate Income Housing Fund
Pursuant to Sections 34179.5(c)(1) through 34179.5(c)(3)
and Sections 34179.5(c)(5) through 34179.5(c)(6)
of Assembly Bill No. 1484 of 2012
00003
A 00
CERTIFIED PUBLIC ACCOUNTANTS
Brandon W. Burrows, CPA
David E. Hale, CPA, CFP RAFT
A Provessonal Corporation
Donald G. Slater. CPA
Richard K. Kikuchi, CPA
Susan F. Matz, CPA
Shelly K. Jacklay, CPA
Bryan S. Gruber, CPA
Deborah A. Harper, CPA 1�
INDEPENDENT ACCOUNTANTS'REPORT ON APPLYING
AGREED -UPON PROCEDURES
To the Successor Agency
of the Former LET Quinta Redevelopment Agency
City of LET Quinta, California
We have performed the procedures enumerated in Attachment A for the Low and Moderate Housing Fund,
which were agreed to by the California State Controller's Office and the State of California Department of
Finance (State Agencies) solely to assist you in ensuring that the dissolved redevelopment agency is
complying with Assembly Bill 1484, Chapter 26, Section 17's amendment to health and safety code 34179.5.
This agreed -upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. Management of the successor agency
is responsible for providing all the information obtained in performing these procedures. The sufficiency of
these procedures is solely the responsibility of those parties specified in the report. Consequently, we make
no representations regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
As stated above, the scope of this engagement was limited to performing the procedures identified in
Attachment A, which specified the "List of Procedures for the Due Diligence Review" obtained from the
California Department of Finance Website.
The results of the procedures performed are identified in Attachment B1 through 13111.
We were not engaged to and did not conduct an audit, the objective of which would be the expression of a
certified opinion as to the appropriateness of the results of the procedures performed. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to our
attention that would have been reported to the Successor Agency.
This report is intended solely for the information and use of the Successor Agency Oversight Board, the
Successor Agency and the applicable State Agencies, and is not intended to be, and should not be used by
anyone other than these specified parties. This restriction is not intended to limit distribution of this report,
which is a matter of public record.
51 z , , W
Brea, California
September 23, 2012
Lance, Wl & Longhand, LLP 203 North Brea Boulevard - Suite 203 - Brea, CA 92821 TEL: 714.672.0022 - Fax: 714.672.0331 www.lslcpps.com
Orange County - Temecula Valley Silicon Valley 000.94
SCHEDULE A
List of Procedures for Due Diligence Review of the Low and Moderate Housing Fund
1. Obtain from the Successor Agency a listing of all assets that were transferred from the former
redevelopment agency to the Successor Agency on February 1, 2012. Agreethe amountson this listing to
account balances established in the accounting records of the Successor Agency. Identify in theAgreed-
Upon Procedures (AUP) report the amount of the assets transferred to the Successor Agency as of that
date.
2. If the State Controller's Office has completed its review of transfers required under both sections 34167.5
and 34178.8 and issued its report regarding such review, attach a copy of that report as an exhibit to the
AUP report. If this has not yet occurred, perform the following procedures:
a. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and
services) from the former redevelopment agency to the city, county, or city and county that formed the
redevelopment agency for the period from January 1, 2011 through January 31, 2012. For each
transfer, the Successor Agency should describe the purpose of the transfer and describe in what
sense the transfer was required by one of the Agency's enforceable obligations or other legal
requirements. Provide this listing as an attachment to the ALP report.
b. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and
services) from the Successor Agency to the city, county, or city and county that formed the
redevelopment agencyforthe period from February 1, 2012 through June 30, 2012. For each transfer,
the Successor Agency should describe the purpose of the transfer and describe in what sense the
transfer was required by one of the Agency's enforceable obligations or other legal requirements.
Provide this listing as an attachment to the ALP report.
c. For each transfer, obtain the legal document that formed the basis for the enforceable obligation that
required any transfer. Note in the ALP report the absence of any such legal document or the absence
of language in the document that required the transfer.
3. If the State Controller's Office has completed its review of transfers required under both Sections 34167.5
and 34178.8 and issued its report regarding such review, attach a copy of that report as an exhibit to the
ALP report. If this has not yet occurred, perform the following procedures:
a. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and
services) from the former redevelopment agency to any other public agency or to private parties for
the period from January 1, 2011 through January 31, 2012. For each transfer, the Successor Agency
should describe the purpose of the transfer and describe in what sense the transfer was required by
one of the Agency's enforceable obligations or other legal requirements. Provide this listing as an
attachment to the AUP report.
b. Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods and
services) from the Successor Agency to any other public agency or private parties for the period from
February 1, 2012 through June 30, 2012. For each transfer, the Successor Agency should describe
the purpose of the transfer and describe in what sense the transfer was required by one of the
Agency's enforceable obligations or other legal requirements. Provide this listing as an attachment to
the AUP report.
c. For each transfer, obtain the legal document that formed the basis for the enforceable obligation that
required any transfer. Note in the ALP report the absence of any Such legal document or the absence
of language in the document that required the transfer.
00025
SCHEDULE A (Continued)
List of Procedures for Due Dilluence Review for the Low and Moderate Housina Fund (Continued)
4. Perform the following procedures:
a. Obtain from the Successor Agency a summary of the financial transactions of the Redevelopment
Agency and the Successor Agency in the format set forth in the attacked schedule for the fiscal
periods indicated in the schedule. For purposes of this summary, the financial transactions should be
presented using the modified accrual basis of accounting. End of year balances for capital assets (in
total) and long-term liabilities (in total) should be presented at the bottom of this summary schedule for
information purposes.
b. Ascertain that for each period presented, the total of revenues, expenditures, and transfers accounts
fully for the changes in equity from the previous fiscal period.
c. Compare amounts in the schedule relevant to the fiscal year ended June 30, 2010 to the state
controllers report filed for the Redevelopment Agency for that period.
d. Compare amounts in the schedule for the other fiscal periods presented to account balances in the
accounting records or other supporting schedules. Describe in the report the type of support provided
for each fiscal period.
5. Obtain from the Successor Agency a listing of all assets of the Low and Moderate Income Housing Fund
as of June 30, 2012 for the report that is due October 1, 2012 and a listing of all assets of all other funds
of the Successor Agency as of June 30, 2012 (excluding the previously reported assets of the Low and
Moderate Income Housing Fund) for the report that is due December 15, 2012. When this procedure is
applied to the Low and Moderate Income Housing Fund, the schedule attached as an exhibit will include
only those assets of the Low and Moderate Income Housing Fund that were held by the Successor
Agency as of June 30, 2012 and will exclude all assets held by the entity that assumed the housing
function previously performed by the former redevelopment agency. Agree the assets so listed to recorded
balances reflected in the accounting records of the Successor Agency. The listing should be attached as
an exhibit to the appropriate AUP report.
6. Obtain from the Successor Agency a listing of asset balances held on June 30,2012 that are restricted for
the following purposes:
a. Unspent bond proceeds:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less
eligible project expenditures, amounts set aside for debt service payments, etc.).
ii. Trace individual components of this computation to related account balances in the accounting
records, or to other supporting documentation (specify in the AUP report a description of such
documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction
pertaining to these balances. Note in the AUP report the absence of language restricting the use
of the balances that were identified by the Successor Agency as restricted.
b. Grant proceeds and program income that are restricted by third parties:
i. Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less
eligible project expenditures).
ii. Trace individual components of this computation to related account balances in the accounting
records, or to other supporting documentation (specify in the ALP report a description of such
documentation).
SCHEDULE A (Continued)
List of Procedures for Due Diflaence Review for the Low and Moderate Housina Fund (Continued)
iii. Obtain from the Successor Agency a copy of the grant agreement that sets forth the restriction
pertaining to these balances. Note in the AUP report the absence of language restricting the use
of the balances that were identified by the Successor Agency as restricted.
c. Other assets considered to be legally restricted:
Obtain the Successor Agency's computation of the restricted balances (e.g., total proceeds less
eligible project expenditures).
ii. Trace individual components of this computation to related account balances in the accounting
records, or to other supporting documentation (specify in the AUP report a description of such
documentation).
iii. Obtain from the Successor Agency a copy of the legal document that sets forth the restriction
pertaining to these balances. Note in the AUP report the absence of language restricting the use
of the balances that were identified by Successor the Agency as restricted.
d. Attach the above mentioned Successor Agency prepared schedule(s) as an exhibit to the AUP report.
For each restriction identified on these schedules, indicate in the report the period of time for which
the restrictions are in effect. If the restrictions are in effect until the related assets are expended for
their intended purpose, this should be indicated in the report.
7. Perform the following:
a. Obtain from the Successor Agency a listing of assets as of June 30, 2012 that are not liquid or
otherwise available for distribution (such as capital assets, land held for resale, long-term receivables,
etc.) and ascertain if the values are listed at either purchase cost (based on book value reflected in
the accounting records of the Successor Agency) or market value as recently estimated by the
Successor Agency.
b. If the assets listed at 7(A) are listed at purchase cost, trace the amounts to a previously audited
financial statement (or to the accounting records of the Successor Agency) and note any differences.
c. For any differences noted in 7(B), inspect evidence of disposal of the asset and ascertain that the
proceeds were deposited into the Successor Agency trust fund. If the differences are due to additions
(this generally is not expected to occur), inspect the supporting documentation and note the
circumstances.
d. If the assets listed at 7(A) are listed at recently estimated market value, inspect the evidence (if any)
supporting the value and note the methodology used. If no evidence is available to support the value
and\or methodology, note the lack of evidence.
B. Perform the following:
a. If the Successor Agency believes that asset balances need to be retained to satisfy enforceable
obligations, obtain from the Successor Agency an itemized schedule of asset balances (resources) as
of June 30, 2012 that are dedicated or restricted for the funding of enforceable obligations and
perform the following procedures. The schedule should identify the amount dedicated or restricted, the
nature of the dedication or restriction, the specific enforceable obligation to which the dedication or
restriction relates, and the language in the legal document that is associated with the enforceable
obligation that specifies the dedication of existing asset balances toward payment of that obligation.
i. Compare all information on the schedule to the legal documents that form the basis for the
dedication or restriction of the resource balance in question.
60 9?
SCHEDULE A (Continued)
List of Procedures for Due Diligence Review for the Low and Moderate Housing Fund (Continued)
Compare all current balances to the amounts reported in the accounting records of the Successor
Agency or to an alternative computation.
Compare the specified enforceable obligations to those that were included in the final Recognized
Obligation Payment Schedule approved by the California Department of Finance.
iv. Attach as an exhibit to the report the listing obtained from the Successor Agency. Identify in the
report any listed balances for which the Successor Agency was unable to provide appropriate
restricting language in the legal document associated with the enforceable obligation.
b. If the Successor Agency believes that future revenues together with balances dedicated or restricted
to an enforceable obligation are insufficient to fund future obligation payments and thus retention of
current balances is required, obtain from the Successor Agency a schedule of approved enforceable
obligations that includes a projection of the annual spending requirements to satisfy each obligation
and a projection of the annual revenues available to fund those requirements arid perform the
following procedures:
Compare the enforceable obligations to those that were approved by the California Department of
Finance. Procedures to accomplish this may include reviewing the letter from the California
Department of Finance approving the Recognized Enforceable Obligation Payment Schedules for
the six month period from January 1, 2012 through June 30, 2012 and for the six month period
July 1, 2012 through December 31, 2012.
Compare the forecasted annual spending requirements to the legal document supporting each
enforceable obligation.
a. Obtain from the Successor Agency its assumptions relating to the forecasted annual
spending requirements and disclose in the report major assumptions associated with the
projections.
iii. For the forecasted annual revenues:
a. Obtain from the Successor Agency its assumptions for the forecasted annual revenues and
disclose in the report major assumptions associated with the projections.
c. If the Successor Agency believes that projected property tax revenues and other general purpose
revenues to be received by the SuccessorAgency are insufficient to pay bond debt service payments
(considering both the timing and amount of the related cash flows), obtain from the SuccessorAgency
a schedule demonstrating this insufficiency and apply the following procedures to the information
reflected in that schedule.
Compare the timing and amounts of bond debt service payments to the related bond debt service
schedules in the bond agreement.
ii. Obtain the assumptions forthe forecasted property tax revenues and disclose major assumptions
associated with the projections.
iii. Obtain the assumptions for the forecasted other general purpose revenues and disclose major
assumptions associated, with the projections.
d. If procedures A, B, or C were performed, calculate the amount of current unrestricted balances
necessary for retention in order to meet the enforceable obligations by performing the following
procedures.
NXIM
SCHEDULE A (Continued)
List of Procedures for Due Dilinence Review for the Low and Moderate Housing Fund (Continued)
Combine the amount of identified current dedicated or restricted balances and the amount of
forecasted annual revenues to arrive at the amount of total resources available to fund
enforceable obligations.
ii. Reduce the amount of total resources available by the amount forecasted for the annual spending
requirements. A negative result indicates the amount of current unrestricted balances that needs
to be retained.
Include the calculation in the ALP report
9. If the Successor Agency believes that cash balances as of June 30, 2012 need to be retained to satisfy
obligations on the Recognized Obligation Payment Schedule (ROPS) for the period of July 1, 2012
through June 30, 2013, obtain a copy of the final ROPS for the period of July 1, 2012 through
December 31, 2012 and a copy of the final ROPS for the period January 1, 2013 through June 30, 2013.
For each obligation listed on the ROPS, the Successor Agency should add columns identifying (1) any
dollar amounts of existing cash that are needed to satisfy that obligation and (2) the Successor Agency's
explanation as to why the Successor Agency believes that such balances are needed to satisfy the
obligation. Include this schedule as an attachment to the AUP report.
10. Include (or present) a schedule detailing the computation of the Balance Available for Allocation to
Affected Taxing Entities. Amounts included in the calculation should agree to the results of the procedures
performed in each section above. The schedule should also include a deduction to recognize amounts
already paid to the County Auditor -Controller on July 12, 2012 as directed by the California Department of
Finance. The amount of this deduction presented should be agreed to evidence of payment. The attached
example summary schedule may be considered for this purpose. Separate schedules should be
completed for the Low and Moderate Income Housing Fund and for all other funds combined (excluding
the Low and Moderate Income Housing Fund).
11, Obtain a representation letter from Successor Agency management acknowledging their responsibility for
the data provided to the practitioner and the data presented in the report or in any attachments to the
report. Included in the representations should be an acknowledgment that management is not aware of
any transfers (as defined by Section 34179.5) from either the former redevelopment agency or the
Successor Agency to other parties for the period from January 1, 2011 through June 30, 2012 that have
not been properly identified in the ALP report and its related exhibits. Management's refusal to sign the
representation letter should be noted in the ALP report as required by attestation standards.
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