FY 2009-2010 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY
LA QUINTA, CALIFORNIA
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
203 North Brea Blvd
Suite 203
Brea, CA 92821
Lance Soll & Lunghard, LLP
41185 Golden Gate Circle
Suite 103
Murrieta, CA 92562
LA QUINTA REDEVELOPMENT AGENCY
LA QUINTA, CALIFORNIA
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
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LA QUINTA REDEVELOPMENT AGENCY
JUNE 30, 2010
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS' REPORT
Financial Audit ................................................................................................................................ 1
Compliance Audit ............................................................................................................................ 3
Management’s Discussion and Analysis ........................................................................................... 5
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Assets ............................................................................................................ 12
Statement of Activities ............................................................................................................... 13
Fund Financial Statements:
Balance Sheet - Governmental Funds ...................................................................................... 14
Reconciliation of the Balance Sheet of Government Funds
to the Statement of Net Assets .................................................................................................. 17
Statement of Revenues, Expenditures and Changes in Fund
Balances - Governmental Funds ............................................................................................... 18
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities ............................................................................................................... 21
Budgetary Comparison Statement – Low/Moderate Income Housing Fund – PA No. 1 .......... 22
Budgetary Comparison Statement – Low/Moderate Income Housing Fund – PA No. 2 .......... 23
Notes to Financial Statements ...................................................................................................... 25
COMBINING AND INDIVIDUAL FUND SCHEDULES
Combining Project Area Balance Sheet -
All Governmental Funds ............................................................................................................... 42
Combining Project Area Statement of Revenues,
Expenditures and Changes in Fund Balances -
All Governmental Funds ............................................................................................................... 46
Computation of Low and Moderate Income Housing
Funds Excess/Surplus .................................................................................................................. 49
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INDEPENDENT AUDITORS’ REPORT
To the Honorable Chair and Members of the Governing Board
La Quinta Redevelopment Agency, California
We have audited the accompanying financial statements of the governmental activities, each major fund,
and the aggregate remaining fund information of the La Quinta Redevelopment Agency, a component unit
of the City of La Quinta, California as of and for the year ended June 30, 2010, which collectively comprise
the Agency’s basic financial statements as listed in the table of contents. These basic financial statements
are the responsibility of the La Quinta Redevelopment Agency’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and Government Auditing Standards issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the basic financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the La Quinta
Redevelopment Agency at June 30, 2010, and the respective changes in financial position thereof and the
respective budgetary comparisons for the Low/Moderate Income Housing Fund – PA No. 1 and the
Low/Moderate Income Housing Fund - PA No. 2 for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
In accordance with Government Auditing Standards issued by the Comptroller General of the United
States, we have also issued our report dated October 8, 2010, on our consideration of the La Quinta
Redevelopment Agency’s internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose
of that report is to describe the scope of our testing of internal controls over financial reporting and
compliance and the results of that testing, and not to provide and opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis is not a required part of the basic financial statements, but is
supplementary information required by the Governmental Accounting Standards Board. We have applied
certain limited procedures, which consisted principally of inquiries of management regarding the methods
of measurement and presentation of the required supplementary information. However, we did not audit
the information and express no opinion on it.
Lance, Soll & Lunghard, LLP 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
Brandon W. Burrows, CPA
Donald L. Parker, CPA
Michael K. Chu, 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
To the Honorable Chair and Members of the Governing Board
Redevelopment Agency of the City of La Quinta, California
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Agency’s basic financial statements. The combining project area statements and
computation of low and moderate income housing funds excess/surplus are presented for purposes of
additional analysis and are not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a
whole.
October 8, 2010
2
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 Mayor and Members of the City Council
La Quinta Redevelopment Agency, 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 as of and for the year
ended June 30, 2010, which collectively comprise the Agency’s basic financial statements and have
issued our report thereon dated October 8, 2010. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the La Quinta Redevelopment Agency’s internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on
the effectiveness of the La Quinta Redevelopment Agency’s internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the La Quinta Redevelopment Agency’s
internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control
deficiencies, that adversely affects the La Quinta Redevelopment Agency’s ability to initiate, authorize,
record, process, or report financial data reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that a misstatement of the La Quinta
Redevelopment Agency’s financial statements that is more than inconsequential will not be prevented or
detected by the La Quinta Redevelopment Agency’s internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the La Quinta Redevelopment Agency’s internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal
control over financial reporting that we consider to be material weaknesses, as defined above.
Lance, Soll & Lunghard, LLP 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
Brandon W. Burrows, CPA
Donald L. Parker, CPA
Michael K. Chu, 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
To the Honorable Chair and Members of the Governing Board
Redevelopment Agency of the City of La Quinta, California
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the financial statements of the La Quinta
Redevelopment Agency’s financial statements are free of material misstatements, we performed tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements;
noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. Such provisions included those provisions of laws and regulations identified in the
Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller
and as interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of
California Redevelopment Agencies, issued by the Governmental Accounting and Auditing Committee of
the California Society of Certified Public Accountants. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed the following instance of noncompliance or other matters that are
required to be reported under Government Auditing Standards.
Redevelopment Agency Five-year Implementation Plan
The Redevelopment Agency must produce an implementation plan in accordance with
the Health and Safety Code for each project area every five years, on or before
December 31, 1994, and every five years thereafter. The Agency was required to adopt a
five year implementation plan before December 31, 2009, however we noted that the
Agency did not adopt a five year implementation plan until January 19, 2010.
Management Response
The Redevelopment Agency staff was aware that the implementation plan was required to be
adopted by December 31, 2009. The revisions to the implementation plan were well underway
prior to the required adoption date but due to final editing and scheduling it was approved by the
Redevelopment Agency Board on January 19, 2010. Measures have been put in place to
complete the next 5 year implementation plan prior to the required date.
We did not audit the City’s responses to the findings described above and, accordingly, we express no
opinion on it.
We noted no instances of other matters that are required to be reported under Government Auditing
Standards issued by the Comptroller General of the United States.
This report is intended solely for the information and use of management, governing board, State
Controller, and 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.
October 8, 2010
4
LA QUINTA REDEVELOPMENT AGENCY
MANAGEMENT’S DISCUSSION AND ANALYSIS
June 30, 2010
Our discussion and analysis of the La Quinta Redevelopment Agency’s (Agency)
financial performance for the fiscal year ended June 30, 2010, 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 to 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
$17.95 million, or -27.50%.
• During the year, the Agency had expenses that were $11.44 million more
than the $45.03 million in expenses recorded by the Agency in its
governmental activities in prior years.
• The Agency’s governmental activities program revenues and general
revenues decreased by $805,000, or -2.05% from the prior year, and program
expenses increased $11.44 million, or 25.40%.
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 term 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:
5
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 the 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 be 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.
6
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 $17.95 million, or -27.50 %.
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 $(152.49) million to $(166.33) million, or
9.08 %. 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 $1.30 million, which generally represents an increase
in cash of $7.81 million, an increase of capital assets of $1.02 million and a
decrease in loans receivable of $12.32 million.
Total liabilities increased by $16.65 million, which generally represents an
increase in pass through payments to other governmental entities of $12.78
million and a net increase $3.78 million in long term liabilities due in more than
one year.
Description 2010 2009 Change
Current and other assets $ 126,077,764 $ 128,400,554 $ (2,322,790)
Capital assets 73,459,707 72,438,150 1,021,557
Total assets 199,537,471 200,838,704 (1,301,233)
Current liabilities 17,809,384 5,229,441 12,579,943
Non-current liabilities 264,980,257 260,906,711 4,073,546
Total liabilities 282,789,641 266,136,152 16,653,489
Net assets:
Invested in capital assets,
net of related debt
Restricted 54,781,140 59,870,074 (5,088,934)
Unrestricted (166,329,057) (152,485,912) (13,843,145)
977,357 28,295,747 27,318,390
NET ASSETS
Governmental activities
$ (17,954,722) $ (65,297,448) $ (83,252,170)Total net assets
7
Total revenues decreased by $805,000 to $38.51 million, or -2.05%. The major
reasons that contributed to the decrease were the following:
• Decrease in property values that provided less tax increment revenue (net of
pass-through payments of – 3.71%.
• Decrease in interest income from the use of money as a result of a lower
interest rate environment - 50.22 %.
The major factors that contributed to the increase in expenses from $45.03
million to $56.47 million or 25.40% was:
• Increase of $23.58 million in contributions from other governments for the
Supplemental Educational Relief Augmentation Fund (SERAF) payment.
This payment was made to the County of Riverside on behalf of the State of
California in May 2010.
• Decrease of $6.1 million from the prior year for the acquisition of Low and
Moderate income property.
GOVERNMENTAL FUNDS
The combined fund balance of $106.07 million decreased from $111.69 million,
or - 5.03%. The Agency has restricted as nonspendable a total of $ 58.21 million
in long term receivables, future debt service and low and moderate income
housing purposes. In addition, $47.86 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.
Description 2010 2009 Change
Program revenues:
Charges for services $ - $ 16,136 $ (16,136)
Operating grants and contributions - - -
Capital grants and contributions 1,101,442 - 1,101,442
General revenues:
Property taxes (net of pass-through payments) 35,390,317 36,702,197 (1,311,880)
Use of money and property 1,062,027 2,133,507 (1,071,480)
Intergovernmental 498,682 327,205 171,477
Other 461,550 140,015 321,535
Total revenues 38,514,018 39,319,060 (805,042)
Expenses:
General government 4,320,577 4,175,208 145,369
Planning and development 13,506,150 25,835,058 (12,328,908)
Contributions to other governments 23,582,367 - 23,582,367
Interest on long-term debt 15,059,646 15,021,766 37,880
Total expenses 56,468,740 45,032,032 11,436,708
Change in Net Assets (17,954,722) (5,712,972) (12,241,750)
Net assets - 7/1/2009 (65,297,448) (59,584,476) (5,712,972)
CHANGES IN NET ASSETS
Net assets - 6/30/2010 $(83,252,170) $ (65,297,448)$ (17,954,722)
8
Major funds balance changes are noted below:
• For the 2004 Low and Moderate Income Housing Fund, fund balance
decreased $1.43 million.
• For the Redevelopment Agency Debt Service PA 1 and PA 2 Funds, fund
balances decreased by $8.67 million and $1.79 million, respectively, based
upon tax increment revenues and interest earnings exceeding debt service,
pass through payments, and transfers.
• For the Redevelopment Agency Low and Moderate Income PA 1 and PA 2
Funds, fund balance increased by $3.43 million and $1.94 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 $1.05
million based upon interest earnings and transfers in exceeding capital outlay
and general costs.
• The Redevelopment Agency Capital Project PA 2 Fund increased by $1.95
million based upon expenditures being less than the $2.6 million transfer from
the Debt Service PA 2 Fund.
More detailed information on the fund financial statements balances is presented
in the notes to the financial statements.
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 to 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 line 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.
9
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 2010, the Agency had $73.46 million invested in a broad range of
capital assets, including land and buildings and improvements. This amount
represents a net increase (including additions and deductions) of $1.02 million, or
1.41% over last year.
This year’s major additions to capital assets were as follows:
Purchase of five (5) Cove Homes for rehabilitation - $ 708,900
Purchase of land at Westward Ho and Dune Palms Road - $302,000.
There were no deletions to capital assets during Fiscal Year 2009-2010.
Debt
At year-end, the Agency’s governmental activities had $264.98 million in bonds
and notes versus $260.91 million last year, an increase of $4.07 million, or
1.56%.
Description 2010 2009 Change
Land $ 69,855,143 $ 69,286,119 $ 569,024
Buildings 4,010,888 3,434,270 576,618
Less Accumulated depreciation (406,324) (282,239) (124,085)
Net Buildings after depreciation 3,604,564 3,152,031 452,533
CAPITAL ASSETS ( NET OF DEPRECIATION)
Total $ 73,459,707 $ 72,438,150 $ 1,021,557
10
The Agency was able to meet its current year debt obligation in a timely manner.
In addition to the repayment of the long term debt bond principal, $10.00 million
in an advance from the City of La Quinta General Fund was made in Fiscal Year
2009-2010 to partially pay for the $23.58 million SERAF payment. Debts issued
in the prior years have been used to finance various capital projects. An example
of this is the purchase of land, and construction of the City’s municipal golf
course – SilverRock.
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:
As the State of California attempts to balance their budget, it has passed Senate
Bill 26 which creates a Supplemental Educational Revenue Augmentation Fund
(SERAF) to require the County auditor to transfer property tax increment that
would otherwise be sent to the Redevelopment Agency instead be sent to the
schools to meet the State’s Proposition 98 obligations. For Fiscal Year, the
amount of the SERAF shift is estimated to be $4.85 million.
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.
Description 2010 2009 Change
Loans Payable $ 2,272,129 $ 2,308,037 $ (35,908)
City Advances 41,378,966 31,378,966 $ 10,000,000
Pass through agreement 3,272,965 4,274,652 $ (1,001,687)
135,031,234 138,244,468 $ (3,213,234)
83,024,965 84,700,588 $ (1,675,623)
Revenue bonds (net original
issue premium)
Tax allocation bonds ( net
original issue discount)
OUTSTANDING DEBT AT YEAR END
Total $ 264,980,259 $ 260,906,711 $ 4,073,548
11
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF NET ASSETS
JUNE 30, 2010
Governmental Activities
Assets:
Cash and investments 96,619,523$
Receivables:
Tax increment 208,297$
Accounts 81,989
Interest 76,330
Loans 3,920,107
Total Receivables 4,286,723
Due from other governments 4,290,375
Deposits with others 6,400
Prepaid costs 824
Deferred charges 4,196,372
Net pension asset 107,336
Restricted assets:
Cash and investments with trustees 16,570,211
Capital assets (Net of Depreciation):
Buildings, net 3,604,564
Land 69,855,143
Total Capital Assets 73,459,707
Total Assets 199,537,471
Liabilities:
Accounts payable and accrued expenses 4,029,188
Due to other governments 13,733,378
Deposits from others 46,818
Long-term liabilities:
Due within one year 6,251,938
Due in more than one year 258,728,319
Total Long-Term Liabilities 264,980,257
Total Liabilities 282,789,641
Net Assets:
Invested in capital assets, net of related debt 28,295,747
Restricted for:
Community development 31,504,866
Debt service 23,276,274
Unrestricted (166,329,057)
Total Net Assets (83,252,170)$
See Notes to Financial Statements 12
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
Net (Expense)
Revenues and
Changes in
Operating Capital Net Assets
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Governmental Activities:
General government 4,320,577$ -$ -$ -$ (4,320,577)$
Planning and development 13,506,150 - - 1,101,442 (12,404,708)
Interest on long-term debt 15,059,646 - - - (15,059,646)
Contributions to other governments 23,582,367 - - - (23,582,367)
Total Governmental Activities 56,468,740$ -$ -$ 1,101,442$ (55,367,298)
General Revenues:
Taxes (net of pass-through payments)35,390,317
Intergovernmental 498,682
Use of money and property 1,062,027
Other 461,550
Total General Revenues 37,412,576
Program Revenues
See Notes to Financial Statements
Change in Net Assets (17,954,722)
Net Assets at Beginning of Year (65,297,448)
Net Assets at End of Year (83,252,170)$
See Notes to Financial Statements 13
LA QUINTA REDEVELOPMENT AGENCY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2010
Special Special Capital Capital
Revenue Revenue Projects Projects
Combined
Low and Moderate
Housing
Low and Low and 2004
Moderate Moderate Low/Mod
Housing Housing Bond Project
Assets:
Cash and investments 7,575,402$ 19,678,116$ -$ 29,504,571$
Cash and investments with trustee - - 5,569,552 11,000,659
Receivables:
Tax increment 26,768 14,891 - -
Accounts 12,844 48,145 - -
Interest 5,059 15,405 - 22,764
Loans 3,920,107 - - -
Prepaid costs - 824 - -
Due from Low and Moderate
Housing Funds - 2,143,702 - -
Due from City - - - 3,355,081
Deposits with others - 6,400 - -
Advances to other funds 2,791 - - -
Total Assets 11,542,971$ 21,907,483$ 5,569,552$ 43,883,075$
Liabilities and Fund Balances:
Liabilities:
Accounts payable 10,970$ 53,611$ -$ 5,423$
Deposits from others 18,266 28,552 - -
Due to Low and Moderate
Housing Funds - - 2,143,702 -
Due to other governments - - - -
Deferred revenue 1,831,398 - - -
Advances from other funds - - - -
Total Liabilities 1,860,634 82,163 2,143,702 5,423
Fund Balances:
Nonspendable:
Prepaid expenditures - 824 - -
Long-term receivables and deposits 2,088,709 6,400 - -
Restricted for:
Debt utilization and/or by debt covenants - - - -
Low and moderate income housing 7,593,628 21,818,096 3,425,850 -
Assigned to:
Community development - - - 43,877,652
Unassigned - - - -
Total Fund Balances 9,682,337 21,825,320 3,425,850 43,877,652
Total Liabilities and
Fund Balances 11,542,971$ 21,907,483$ 5,569,552$ 43,883,075$
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See Notes to Financial Statements 14
LA QUINTA REDEVELOPMENT AGENCY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2010
Assets:
Cash and investments
Cash and investments with trustee
Receivables:
Tax increment
Accounts
Interest
Loans
Prepaid costs
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 Low and Moderate
Housing Funds
Due to other governments
Deferred revenue
Advances from other funds
Total Liabilities
Fund Balances:
Nonspendable:
Prepaid expenditures
Long-term receivables and deposits
Restricted for:
Debt utilization and/or by debt covenants
Low and moderate income housing
Assigned to:
Community development
Unassigned
Total Fund Balances
Total Liabilities and
Fund Balances
(Continued)
Capital Debt Debt
Projects Service Service
Other
Tax Tax Governmental
Project Increment Increment Funds
3,048,979$ 13,697,886$ 23,114,569$ -$
- - - -
- 107,071 59,567 -
21,000 - - -
2,543 13,709 16,850 -
- - - -
- - - -
-
- - - -
935,294 - - -
- - - -
- - - -
4,007,816$ 13,818,666$ 23,190,986$ -$
25,415$ -$ -$ -$
- - - -
- - - -
- 5,006,556 8,726,822 -
- - - -
- - - 2,791
25,415 5,006,556 8,726,822 2,791
- - - -
- - - -
- 8,812,110 14,464,164 -
- - - -
3,982,401 - - -
- - - (2,791)
3,982,401 8,812,110 14,464,164 (2,791)
4,007,816$ 13,818,666$ 23,190,986$ -$
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See Notes to Financial Statements 15
LA QUINTA REDEVELOPMENT AGENCY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2010
Assets:
Cash and investments
Cash and investments with trustee
Receivables:
Tax increment
Accounts
Interest
Loans
Prepaid costs
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 Low and Moderate
Housing Funds
Due to other governments
Deferred revenue
Advances from other funds
Total Liabilities
Fund Balances:
Nonspendable:
Prepaid expenditures
Long-term receivables and deposits
Restricted for:
Debt utilization and/or by debt covenants
Low and moderate income housing
Assigned to:
Community development
Unassigned
Total Fund Balances
Total Liabilities and
Fund Balances
Total
Governmental
Funds
96,619,523$
16,570,211
208,297
81,989
76,330
3,920,107
824
2,143,702
4,290,375
6,400
2,791
123,920,549$
95,419$
46,818
2,143,702
13,733,378
1,831,398
2,791
17,853,506
824
2,095,109
23,276,274
32,837,574
47,860,053
(2,791)
106,067,043
123,920,549$
See Notes to Financial Statements 16
LA QUINTA REDEVELOPMENT AGENCY
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2010
Fund balances of governmental funds 106,067,043$
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 73,459,707
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. 1,831,398
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 107,336
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 4,196,372
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 (221,097,129)
Loans from City (41,378,966)
Other debt (3,272,964)
Unamortized net original issue discounts and (premiums) 768,802
Accrued interest payable for the current portion of interest due on Tax Allocation
Bonds has not been reported in the governmental funds. (3,933,769)
Net assets of governmental activities (83,252,170)$
See Notes to Financial Statements 17
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
Special Special Capital Capital
Revenue Revenue Projects Projects
Combined
Low and Moderate
Housing
Low and Low and 2004
Moderate Moderate Low/Mod
Housing Housing Bond Project
Revenues:
Taxes and assessments 9,629,447$ 5,190,795$ -$ -$
Use of money and property 280,021 263,002 14,464 196,204
Intergovernmental - 498,682 - -
Other revenue 105,300 31,250 - 325,000
Total Revenues 10,014,768 5,983,729 14,464 521,204
Expenditures:
Current:
General government 1,433,064 980,541 - 969,116
Planning and development - 348,484 618,000 -
Capital outlay 708,869 525,551 826,033 603,719
Debt service - 239,756 - -
Total Expenditures 2 141 933 2 094 332 1 444 033 1 572 835
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Total Expenditures 2,141,933 2,094,332 1,444,033 1,572,835
Excess (Deficiency) of Revenues
Over (Under) Expenditures 7,872,835 3,889,397 (1,429,569) (1,051,631)
Other Financing Sources (Uses):
Transfers in - - - -
Transfers out (4,438,891) (1,951,398) - -
Long-term debt issued - - - -
Pass-through agreement payments - - - -
Payment to Educational Revenue
Augmentation Fund - - - -
Total Other Financing
Sources (Uses):(4,438,891) (1,951,398) - -
Excess (Deficiency) of Revenues and
Other Sources Over (Under)
Expenditures and Other Uses 3,433,944 1,937,999 (1,429,569) (1,051,631)
Fund Balances:
Beginning of Year 6,248,393 19,887,321 4,855,419 44,929,283
End of Year 9,682,337$ 21,825,320$ 3,425,850$ 43,877,652$
See Notes to Financial Statements 18
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
Revenues:
Taxes and assessments
Use of money and property
Intergovernmental
Other revenue
Total Revenues
Expenditures:
Current:
General government
Planning and development
Capital outlay
Debt service
Total Expenditures
(Continued)
Capital Debt Debt
Projects Service Service
Other
Tax Tax Governmental
Project Increment Increment Funds
-$ 38,517,789$ 20,763,180$ -$
16,256 94,785 94,615 -
- - - -
- - - -
16,256 38,612,574 20,857,795 -
191,327 473,766 253,227 2,787
- - - -
475,892 - - -
- 16,471,015 4,227,475 4
667 219 16 944 781 4 480 702 2 791
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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
Payment to Educational Revenue
Augmentation Fund
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
667,219 16,944,781 4,480,702 2,791
(650,963) 21,667,793 16,377,093 (2,791)
2,600,000 4,438,892 1,951,399 -
- - (2,600,002) -
- 10,000,000 - -
- (21,194,350) (17,516,544) -
- (23,582,367) - -
2,600,000 (30,337,825) (18,165,147) -
1,949,037 (8,670,032) (1,788,054) (2,791)
2,033,364 17,482,142 16,252,218 -
3,982,401$ 8,812,110$ 14,464,164$ (2,791)$
See Notes to Financial Statements 19
LA QUINTA REDEVELOPMENT AGENCY
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
Revenues:
Taxes and assessments
Use of money and property
Intergovernmental
Other revenue
Total Revenues
Expenditures:
Current:
General government
Planning and development
Capital outlay
Debt service
Total Expenditures
Total
Governmental
Funds
74,101,211$
959,347
498,682
461,550
76,020,790
4,303,828
966,484
3,140,064
20,938,250
29 348 626 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
Payment to Educational Revenue
Augmentation Fund
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
29,348,626
46,672,164
8,990,291
(8,990,291)
10,000,000
(38,710,894)
(23,582,367)
(52,293,261)
(5,621,097)
111,688,140
106,067,043$
See Notes to Financial Statements 20
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, 2010
Net change in fund balances - total governmental funds (5,621,097)$
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. 5,962,596
Bond issuance costs is an expenditure in the governmental funds, but it is
deferred charges in the statement of net assets:
Amortization for current fiscal year (185,679)
Unamortized premium or discounts on bonds issued are revenue or expenditures
in the governmental funds, but these are spread to future periods over the life of
the new bonds:
Amortization for current fiscal year (36,142)
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 44,200
Transfer of capital assets from the City 1,101,442
Depreciation (124,085)
Proceeds of debt is revenue in the governmental funds, but these are additions
to the statement of net assets.(10,000,000)
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.102,680
Loans receivable which was forgiven in the current year (9,443,802)
Governmental funds report all contributions in relation to the required
contribution as expenditures, however in the statement of activities
only the annual required contribution is an expense.107,336
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 (3,933,769)
Prior year accrual of interest due on bonds 4,071,598
Change in net assets of governmental activities (17,954,722)$
See Notes to Financial Statements 21
CITY OF LA QUINTA
BUDGETARY COMPARISON STATEMENT
LOW/MODERATE INCOME HOUSING PA NO. 1
YEAR ENDED JUNE 30, 2010
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 6,248,393$ 6,248,393$ 6,248,393$ -$
Resources (Inflows):
Taxes and Assessments:
Tax increment 10,833,900 9,623,500 9,629,447 5,947
Use of Money and Property:
Interest income 68,700 68,700 23,060 (45,640)
Rental income 225,000 225,000 256,961 31,961
Other revenue:
Loan repayments - 19,444 105,300 85,856
Proceeds from sale of capital asset 150,000 150,000 - (150,000)
Amounts Available for Appropriation 17,525,993$ 16,335,037$ 16,263,161$ (71,876)$
Charges to Appropriation (Outflow):
Current:
General Government:
Administrative costs 834,081$ 980,811$ 975,110$ 5,701$
Professional services 504,740 525,240 457,954 67,286
Planning and development:
Acquisition cost 750,000 - - -
Subsidy to low and moderate
housing 250,000 250,000 - 250,000
Capital Outlay:-
Project improvement costs - - 708,869 (708,869)
Transfer to other funds 4,478,892 5,228,892 4,438,891 790,001
Total Charges to Appropriations 6,817,713 6,984,943 6,580,824 404,119
Budgetary Fund Balance, June 30 10,708,280$ 9,350,094$ 9,682,337$ 332,243$
See Notes to Financial Statements 22
CITY OF LA QUINTA
BUDGETARY COMPARISON STATEMENT
LOW/MODERATE INCOME HOUSING PA NO. 2
YEAR ENDED JUNE 30, 2010
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 19,887,321$ 19,887,321$ 19,887,321$ -$
Resources (Inflows):
Taxes and Assessments:
Tax increment 5,668,000 5,411,100 5,190,795 (220,305)
Use of Money and Property:
Interest income 171,700 101,700 98,807 (2,893)
Rental income 163,300 163,300 164,195 895
Intergovernmental:
Federal grants 498,200 498,200 498,682 482
Other revenue:
Miscellaneous revenues 4,200 4,200 7,806 3,606
Loan repayments - 25,000 23,444 (1,556)
Amounts Available for Appropriation 26,392,721$ 26,090,821$ 25,871,050$ (219,771)$
Charges to Appropriation (Outflow):
Current:
General Government:
Administrative costs 465,772$ 548,469$ 539,783$ 8,686$
Professional services 342,900 483,961 440,758 43,203
Planning and development:
Acquisition cost 250,000 250,000 - 250,000
Subsidy to low and moderate
housing 432,300 435,300 348,484 86,816
Capital Outlay:
Project improvement costs - - 525,551 (525,551)
Debt Service:
Interest expense 203,760 203,760 203,848 (88)
Long-term debt repayments 35,996 35,996 35,908 88
Transfer to other funds 11,705,921 12,177,388 1,951,398 10,225,990
Total Charges to Appropriations 13,436,649 14,134,874 4,045,730 10,089,144
Budgetary Fund Balance, June 30 12,956,072$ 11,955,947$21,825,320$ 9,869,373$
See Notes to Financial Statements 23
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24
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2010
Note 1: Organization and Summary of Significant Accounting Policies
a. Organization and Tax Increment Financing
The La Quinta Redevelopment Agency is a component unit of a reporting entity that
consists of the following primary and component units:
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 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 e stablished 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
25
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
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
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 La Quinta Redevelopment Agency has no business-type activities
or discretely presented component units. For the most part, effect of interfund activity has
been removed from these statements. Eliminations have been made in the Statement of
Activities so that certain allocated expenses are recorded only once (by the function to
which they were allocated). However, general government expenses have not been
allocated as indirect expenses to the various functions of the Agency.
The accompanying government-wide financial statements for the Agency present
negative net assets because the primary activity of the Agency is to issue debt to
construct infrastructure that will be owned and maintained by the City.
Government-wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic resources
measurement focus, all (both current and long-term) economic resources and obligations
of the reporting government are reported in the government-wide financial statements.
Basis of accounting refers to when revenues and expenditures are recognized in the
accounts and reported in the financial statements. Under the accrual basis of accounting,
revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and
exchange-like transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from non-exchange transaction
are recognized in accordance with the requirements of GASB Statement No. 33.
Program revenues include charges for services and payments made by parties outside of
the reporting government’s citizenry if that money is restricted to a particular program.
Program revenues are netted with program expenses in the statement of activities to
present the net cost of each program. Amounts paid to acquire capital assets are
capitalized as assets in the government-wide financial statements, rather than reported as
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 are reported as a
reduction of the related liability, rather than as an expenditure.
26
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
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 sixty day
availability period.
Revenue recognition is subject to the measurable and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related goods or
services are provided). Locally imposed derived tax revenues are recognized as
revenues in the period in which the underlying exchange transaction upon which they are
based takes place. Imposed non-exchange transactions are recognized as revenues in
the period for which they were imposed. If the period of use is not specified, they are
recognized as revenues when an enforceable legal claim to the revenues arises or when
they are received, whichever occurs first. Government-mandated and voluntary
non-exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the current
financial resources measurement focus. This means that only current assets and current
liabilities are generally included on their balance sheets. The reported fund balance
(net current assets) is considered to be a measure of “available spendable resources.”
Governmental fund operating statements present increases (revenues and other
financing sources) and decreases (expenditures and other financing uses) in net current
assets. Accordingly, they are said to present a summary of sources and uses of
“available spendable resources” during a period.
27
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
Non-current portions of long-term receivables due to governmental funds are reported on
their balance sheets in spite of their spending measurement focus. Special reporting
treatments are used to indicate, however, that they should not be considered “available
spendable resources,” since they do not represent net current assets. Recognition of
governmental fund type revenues represented by noncurrent receivables are deferred
until they become current receivables. Noncurrent portions of other long-term receivables
are offset by fund balance reserve accounts.
Because of their spending measurement focus, expenditure recognition for governmental
fund types excludes amounts represented by noncurrent liabilities. Since they do not
affect net current assets, such long-term amounts are not recognized as governmental
fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that
resources were expended, rather than as fund assets. The proceeds of long-term debt
are recorded as an other financing source rather than as a fund liability. Amounts paid to
reduce long-term indebtedness are reported as fund expenditures.
When both restricted and unrestricted resources are combined in a fund, expenses are
considered to be paid first from restricted resources and then unrestricted resources.
c. Major Funds
The following funds are presented as major funds in the accompanying basic financial
statements:
Special Revenue, Low and Moderate Income Housing P.A. No. 1 and No. 2 Funds – To
account for the required 20% set aside of property tax increments that is legally restricted
for increasing or improving housing for low and moderate income households.
Debt Service Funds, P.A. No. 1 and No. 2 – To account for the accumulation of resources
for the payment of debt service for bond principal, interest and trustee fees.
Capital Projects Funds, P.A. No. 1 and No. 2 – To account for the bond proceeds, interest
and other funding that will be used for development, planning, construction and land
acquisition.
2004 Low 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.
28
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
e. Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical records are
available and at an estimated historical cost where no historical records exist.
Contributed fixed assets are valued at their estimated fair market value at the date of the
contribution. Generally, fixed asset purchases in excess of $5,000 are capitalized if they
have an expected useful life of three years or more. Buildings are depreciated over a
useful life of thirty years.
Capital assets include public domain (infrastructure) general fixed assets consisting of
certain improvements including roads, streets, sidewalks, medians, and storm drains.
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, 2010. 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 constraints on the use of
resources by being externally imposed, im posed by law through constitution, or through
enabling legislation.
Assigned Fund Balance – Includes amounts that are constrained by the Agency’s intent to
be used for a specific purpose.
Unassigned Fund Balance - The residual classification which includes all spendable
amounts not contained in other classifications.
The Agency’s Board authorizes assigned amounts for specific purposes pursuant to the
policy-making powers granted through a resolution. When an expenditure is incurred for
purposes for which both restricted and unrestricted fund balance is available, the Agency
considers restricted amounts to be used first, then unrestricted. When an expenditure is
incurred for purposes for which amounts in any of the unrestricted fund balance
classifications could be used, they are considered to be spent in the order as follows:
committed, assigned and then unassigned.
Note 2: Stewardship, Compliance and Accountability
a. Budgetary Data
Budgets and Budgetary Accounting
The Governing Board adopts an annual budget prepared on the modified accrual basis of
accounting for its governmental funds. The City Manager or his designee is authorized to
transfer budgeted amounts between the accounts of any department. Revisions that alter
the total appropriations of any department or fund are approved by the Governing Board.
29
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
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 $ 96,619,523
Cash and investments with trustees 16,570,211
$ 113,189,734
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
Outstanding
Balance at
June 30, 2010
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.
$ 3,866,786
Other notes receivable
53,321
Total notes receivable
$ 3,920,107
In December 2000, the Agency entered into an agreement with LINC Housing to receive
$9,500,000 as a reimbursement for Agency costs incurred for the construction of
infrastructure related to the development of senior apartments. Payments are due to the
Agency in the amount of annual positive cash flow generated by the rental of the units. All
unpaid principal and interest on the note are due fifty-five years after the completion of the
project. Interest on the note accrues at 3% per annum. The note was forgiven by the
Redevelopment Agency during the current fiscal year.
30
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 5: Due from Other Governments
The Redevelopment Agency advanced funds to the City of La Quinta to help the City meet the
cost of developing the public-owned improvements to the La Quinta Community Park and La
Quinta Library and the North Fire Station. There is no stipulated repayment date established
for the Agency advances. Interest accrues at the earning rate of the City’s Investment Pool
funds, and shall be adjusted quarterly. At June 30, 2010, outstanding Project Area No. 1
advances were $3,355,081 and Project Area No. 2 advances were $935,294.
Note 6: Capital Assets
Capital asset activity for the year ended June 30, 2010, was as follows:
Balances at
July 1, 2009
Additions
Deletions
Balances at
June 30, 2010
Buildings $ 3,434,270
$ 576,618
$ -
$ 4,010,888
Total cost of depreciable assets 3,434,270 - 4,010,888
Less accumulated depreciation:
Buildings (282,239)
(124,085)
-
(406,324)
Net depreciable assets 3,152,031
452,533
-
3,604,564
Capital assets not depreciated:
Land 69,286,119
569,024
-
69,855,143
Capital assets, net $ 72,438,150
$ 1,021,557
$ -
$ 73,459,707
Depreciation expense was charged to the following functions of the primary government:
Governmental Activities:
General government - $ 124,085
Note 7: Property Taxes
Under California law, property taxes are assessed and collected by the counties up to 1% of
assessed value, plus other increases approved by the voters. The property taxes are
recorded initially in a pool, and are then allocated to the cities based on complex formulas.
Accordingly, the City of La Quinta accrues only those taxes that are received from the County
within sixty days after year-end.
Lien date January 1
Levy date July 1
Due dates November 1 and February 1
Collection dates December 10 and April 10
The La Quinta Redevelopment Agency’s primary source of revenue comes from property
taxes. Property taxes allocated to the Agency are computed in the following manner:
31
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
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-Term Liabilities
Tax Allocation Refunding Bonds, Series 1994
Tax allocation refunding bonds, Series 1994, in the amount of $26,665,000 were issued by
the Agency to refund the outstanding aggregate principal amount of the Agency’s Tax
Allocation Bonds, Series 1989 and 1990. The remaining proceeds were used to finance
certain capital improvements within the La Quinta Redevelopment Project Area No. 1.
Interest rates on the bonds range from 3.80% to 8% and are payable semi-annually on
March 1 and September 1 of each year until maturity. The interest and principal of the bonds
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, 2010, is $6,920,000.
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, 2010, is $15,760,000.
32
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
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, 2010, is $5,680,000.
Tax Allocation Bonds, Series 2001 – Project Area No. 1
On August 15, 2001, the Agency issued tax allocation bonds in the amount of $48,000,000 to
finance capital projects benefiting the La Quinta Redevelopment Project Area No. 1. The
2001 tax allocation bonds were issued at a discount of $422,400 and issuance costs of
$1,517,325.
The bonds consist of $17,280,000 of term bonds that accrue interest at 5.00% and mature on
September 1, 2021, and $30,720,000 of term bonds that accrue interest at 5.18% and mature
on September 1, 2031. The interest and principal on the bonds are payable from pledged tax
increment revenues.
A portion of the proceeds were used to obtain a surety agreement to satisfy the bond reserve
requirement. The principal balance of outstanding bonds at June 30, 2010, 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, 2010, is $35,765,000.
33
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
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 Quinta Redevelopment Project Area No. 1. The
2003 tax allocation bonds were issued at a discount of $277,200 issuance costs of $629,191.
Interest is payable semi-annually on March 1 and September 1 of each year, commencing
March 1, 2004. Interest payments range from 4.24% to 6.44% per annum. The interest and
principal on the bonds are payable from pledged tax increment revenues. 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, 2010, is $23,810,000.
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, 2010, is $82,890,000.
34
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 8: Long-Term Liabilities (Continued)
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, 2010, is
$1,200,000.
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
$834,076 for a total amount of $15,284,042. Tax increment payments outstanding at
June 30, 2010, totaled $2,072,964. 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 La Quinta Redevelopment 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, 2010, is $1,530,958.
35
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 8: Long-Term Liabilities (Continued)
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, 2010, is $741,171.
Advances from the City of La Quinta
The City of La Quinta advances money to the Redevelopment Agency to cover operating and
capital shortfalls. As of June 30, 2010, the amount due to the General Fund from Project
Area No. 1 was $22,000,000. This consists of an outstanding advance of:
1) $6,000,000 loaned to the Redevelopment Agency with repayments beginning in
2030/31 and accrues interest at 10% per annum.
2) $6,000,000 loaned to the Redevelopment Agency requires repayments beginning in
2030/31 and accrues interest at 7% per annum.
2) $10,000,000 loaned to the Redevelopment Agency requires repayments no later than
2033 and accrues interest at 7% per annum.
As of June 30, 2010, the amount due to the General Fund from Project Area No. 2 was
$19,378,966. This consists of an outstanding advance of:
1) $10,000,000 loaned to the Redevelopment Agency with repayment beginning in
2035/36 and accrues interest at 10% per annum.
2) $9,378,966 loaned to the Redevelopment Agency for the acquisition of nine acres
located on south side of Highway 111 and East of Dune Palms Road with no
repayment schedule and accruing interest at the City’s Local Agency Investment
Fund rate.
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 and pass through allocations) that it receives. These bonds were to
provide financing for various capital projects, accomplish Low and Moderate Income Housing
projects and to defease previously issued bonds. 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 $381,872,526 -
with annual debt service requirements as indicated below. For the current year, the total tax
increment revenue, net of pass through payments, recognized by the Agency was
$35,390,317 and the debt service obligation on the bonds was $16,611,943.
36
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 8: Long-Term Liabilities (Continued)
The following is a schedule of changes in long-term debt of the Agency for the fiscal year ended
June 30, 2010:
The following schedule illustrates the debt service requirements to maturity for the debt outstanding as of
June 30, 2010:
Principal Interest Principal Interest Principal Interest
2010 - 2011 2,145,000$ 426,868$ -$ 819,520$ 125,000$ 293,272$
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 - 2020 - - 4,025,000 3,245,970 885,000 1,196,406
2020 - 2025 - - 5,190,000 2,054,000 1,145,000 933,844
2025 - 2030 - - 5,200,000 557,700 1,475,000 591,281
2030 - 2035 - - - - 1,485,000 160,781
Totals 6,920,000$ 781,466$ 15,760,000$ 9,886,240$ 5,680,000$ 4,279,613$
Tax Allocation Refunding Bonds,
Series 1994 - PA No. 1
Tax Allocation Refunding
Bonds, Series 1998 - PA No. 1
Tax Allocation Refunding Bonds
Series 1998 - PA No. 2
Balance Balance Due Within
July 1, 2009 Additions Repayments June 30, 2010 One Year
Project Area No. 1
City Loans - Principal 12,000,000$ 10,000,000$ -$ 22,000,000$ -$
Coachella Valley USD Pass-Through Payable 2,874,652 - 801,688 2,072,964 817,722
1994 Tax Allocation Bonds 8,920,000 - 2,000,000 6,920,000 2,145,000
1998 Tax Allocation Bonds 15,760,000 - - 15,760,000 -
2001 Tax Allocation Bonds 48,000,000 - - 48,000,000 -
2002 Tax Allocation Bonds 36,425,000 - 660,000 35,765,000 680,000
2003 Tax Allocation Bonds 24,285,000 - 475,000 23,810,000 505,000
2004 Series A Local Agency Revenue Bonds 16,323,167 - 322,310 16,000,857 335,820
Total 164,587,819 10,000,000 4,258,998 170,328,821 4,483,542
Project Area No. 2
City Loans - Principal 19,378,966 - - 19,378,966 -
Provident Loan 1,556,283 - 25,325 1,530,958 27,525
US Department of Agriculture 751,754 - 10,583 741,171 11,691
1998 Tax Allocation Bonds 5,800,000 - 120,000 5,680,000 125,000
Due to the County of Riverside 1,400,000 - 200,000 1,200,000 200,000
2004 Series A Local Agency Revenue Bonds 4,411,538 - 87,174 4,324,364 90,828
Total 33,298,541 - 443,082 32,855,459 455,044
Unallocated Between Project Areas
2004 Series A Local Agency Revenue Bonds 63,825,295 - 1,260,516 62,564,779 1,313,352
Total 63,825,295 - 1,260,516 62,564,779 1,313,352
Total - All Project Areas 261,711,655$ 10,000,000$ 5,962,596$ 265,749,059$ 6,251,938$
Adjustments:
Unamortized net original issue (discount) or premium (768,802)
Net Long-term Debt 264,980,257$
37
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 8: Long-Term Liabilities (Continued)
Principal Interest Principal Interest Principal Interest
2010 - 2011 -$ 2,430,720$ 680,000$ 1,782,926$ 505,000$ 1,481,401$
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 - 2020 9,550,000 10,203,600 4,270,000 7,693,906 3,735,000 6,132,380
2020 - 2025 12,190,000 7,488,600 5,450,000 6,481,519 5,070,000 4,767,956
2025 - 2030 15,625,000 3,965,123 8,475,000 4,862,472 6,900,000 2,872,562
2030 - 2035 7,425,000 383,393 14,010,000 1,299,188 5,300,000 526,470
Totals 48,000,000$ 34,035,816$ 35,765,000$ 28,959,733$ 23,810,000$ 21,406,356$
Principal Interest Principal Interest Principal Interest
2010 - 2011 1,740,000$ 4,175,131$ 200,000$ -$ 817,722$ -$
2011 - 2012 1,805,000 4,099,719 250,000 - 834,076 -
2012 - 2013 1,890,000 4,016,581 750,000 - 421,166 -
2013 - 2014 1,975,000 3,924,681 - - - -
2014 - 2015 2,075,000 3,823,431 - - - -
2015 - 2020 12,080,000 17,337,119 - - - -
2020 - 2025 15,610,000 13,721,706 - - - -
2025 - 2030 20,050,000 9,180,406 - - - -
2030 - 2035 25,665,000 3,419,528 - - - -
Totals 82,890,000$ 63,698,302$ 1,200,000$ -$ 2,072,964$ -$
2004 Series A Local Agency
Revenue Bonds
Tax Allocation Bonds, Series
2001 - PA No. 1
Tax Allocation Bonds, Series
2002 - PA No. 1
Tax Allocation Bonds Series 2003
- PA No. 1
Due to County of Riverside
Pass-through Payable -
Coachella Valley Unified School
Principal Interest Principal Interest
2010 - 2011 11,691$ 73,591$ 27,525$ 126,949$
2011 - 2012 12,915 72,367 29,916 124,558
2012 - 2013 14,267 71,014 32,516 121,959
2013 - 2014 15,761 69,520 35,341 119,134
2014 - 2015 17,412 67,870 38,411 116,064
2015 - 2020 118,539 307,870 248,301 524,072
2020 - 2025 195,033 231,376 1,118,948 105,824
2025 - 2030 320,890 105,519 - -
2030 - 2035 34,663 871 - -
Totals 741,171$ 999,998$ 1,530,958$ 1,238,560$
USDA Rural Development Provident Bank Loan
38
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 9: Pledge Tax Revenues
All tax revenues received by the Agency other than the amount required by law to be
deposited in a low and moderate income housing fund, are required to be used to meet debt
service requirements of the bond indentures before any payments may be made on other
obligations of the Agency.
Note 10: Transfers In and Out
The following transfers were made during the year ended June 30, 2010:
a) $4,438,892 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 debt service.
b) $1,951,399 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) $2,600,000 was transferred from the Redevelopment Agency Project Area No. 1 to
the Redevelopment Agency Capital Projects PA No. 2 Fund to fund various capital
projects.
Note 11: Due To/From Other Funds
The following interfund receivables and payables were made during the year ended
June 30, 2010:
Due From Other Funds Due To Other Funds Amount
Special Revenue Low/Mod– PA
No. 2 Capital Projects – 2004 Low/Mod Bond $ 2,143,702 (a)
(a) Short term borrowing to cover temporary cash shortfall.
Capital Projects
PA No. 2 PA No. 1 PA No. 2 Total
Transfers Out:
Special Revenue:
Low/Moderate Income Housing PA No. 1 -$ 4,438,892$ -$ 4,438,892$
Low/Moderate Income Housing PA No. 2 - - 1,951,399 1,951,399
Debt Service:
Redevelopment Agency - PA No. 1 2,600,000 - - 2,600,000
Total 2,600,000$ 4,438,892$ 1,951,399$ 8,990,291$
Transfers in
Debt Service
39
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 12: Advances To/From other funds
Advances To Other Funds Advances From Other Funds Amount
Special Revenue Low/Mod – PA No. 1 Other Governmental Funds $ 2,791 (a)
(a) Monies advanced to the Housing Authority for operating costs.
Note 13: Insurance
The La Quinta Redevelopment Agency is covered under the City of La Quinta’s insurance
policies. Therefore, the limitations and self-insured retentions applicable to the City of
La Quinta also apply to its Redevelopment Agency. Additional information as to coverage and
self-insured retentions can be obtained by contacting the City.
Note 14: 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 Redevelopment 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 CalPERS. Additional information on the plan can be obtained from the annual report of the
City.
Note 15: Transactions with the State of California
SERAF Shift for fiscal year 2009-2010 and 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 these amounts from having to
be paid; however, in May 2010 the Sacramento Superior Court upheld the legislation. This
decision is in the process of being appealed by CRA and its member agencies. Additionally,
the question as to the ability of the State to take resources for these purposes will be
considered by the voters in November 2010.
The payment of the SERAF was due on May 10, 2010, for fiscal year 2009-2010 and it was
made in the amount of $23,582,367. The legislation allowed this payment to be made from
any available monies present in any project area(s). Subsequent legislation was passed
which even allowed the funding for this payment to be borrowed from the Low and Moderate
Income Housing Fund with appropriate findings from its legislative body. Any amounts
borrowed from Low and Moderate Income Housing (including any suspended set-aside
amounts) are to be repaid by June 30, 2015. If those amounts are not repaid, by that date,
then the set-aside percentage to Low and Moderate Income Housing will increase from 20%
to 25% for the remainder of the life of the Agency.
To accomplish the payment, the Agency utilized a $10,000,000 advance from General Fund
Reserves, $10,000,000 that was previously budgeted to be transferred to the Project Area
No. 1 Capital Project Fund that was not done, and the remaining $3,582,367 was a transfer
from the Project Area No. 1 Capital Project to the Project Area No. 1 Debt Service fund for the
payment. No Low and Moderate Income Housing Funds were utilized to make the fiscal year
2009-2010 SERAF payment.
40
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2010
Note 15: Transactions with the State of California (Continued)
It is estimated that the Agency’s share of the SERAF shift for fiscal year 2010-2011 will
amount to approximately $4,850,687 and this amount will be payable in May 2011 if the
appeal and/or the voter question above are not successful.
Note 16: Subsequent Event
Owner Participation Agreement (OPA) with Garff Properties
In July 2010, the La Quinta Redevelopment Agency entered into an Owner Participation
Agreement (OPA) with an autodealer, 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 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.
41
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA BALANCE SHEET
ALL GOVERNMENTAL FUNDS
JUNE 30, 2010
Capital Debt Capital Special Special
Projects Service Projects Revenue Revenue
2004 Low and
Low/Mod Tax Housing Moderate
Bond Increment Project Authority Housing
ASSETS
Cash and investments -$13,697,886$29,504,571$-$7,575,402$
Cash and investments with trustee 5,569,552 - 11,000,659 --
Receivables:
Tax increment - 107,071 --26,768
Accounts ----12,844
Interest -13,709 22,764 -5,059
Loans ---- 3,920,107
Prepaid costs -----
Due from Low and Moderate
Housing Funds -----
Due from City -- 3,355,081 --
Deposits with others -----
Advances to other funds ----2,791
Total Assets 5,569,552$ 13,818,666$ 43,883,075$ -$ 11,542,971$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable -$-$5,423$-$10,970$
Deposits from others ----18,266
Due to Low and Moderate
Housing Funds 2,143,702 ----
Due to other governments - 5,006,556 ---
Deferred revenue ---- 1,831,398
Advances from other funds --- 1,414 -
Total Liabilities 2,143,702 5,006,556 5,423 1,414 1,860,634
Fund Balances:
Nonspendable:
Prepaid costs -----
Long-term receivables and deposits ---- 2,088,709
Restricted for:
Debt utilization and/or by debt covenants - 8,812,110 ---
Low and moderate income housing 3,425,850 --- 7,593,628
Assigned to:
Community development -- 43,877,652 --
Unassigned --- (1,414)-
Total Fund Balances 3,425,850 8,812,110 43,877,652 (1,414) 9,682,337
Total Liabilities and
Fund Balances 5,569,552$13,818,666$43,883,075$-$11,542,971$
Redevelopment Agency - PA No. 1
42
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA BALANCE SHEET
ALL GOVERNMENTAL FUNDS
JUNE 30, 2010
ASSETS
Cash and investments
Cash and investments with trustee
Receivables:
Tax increment
Accounts
Interest
Loans
Prepaid costs
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 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 utilization and/or by debt covenants
Low and moderate income housing
Assigned to:
Community development
Unassigned
Total Fund Balances
Total Liabilities and
Fund Balances
(Continued)
Debt Capital Special Special
Service Projects Revenue Revenue
Low and
Tax Housing Moderate
Increment Project Authority Housing
23,114,569$3,048,979$-$19,678,116$
-- - -
59,567 - - 14,891
- 21,000 - 48,145
16,850 2,543 - 15,405
-- - -
- - - 824
- - - 2,143,702
- 935,294 - -
- - - 6,400
-- - -
23,190,986$ 4,007,816$ -$ 21,907,483$
-$25,415$-$53,611$
---28,552
-- - -
8,726,822 ---
-- - -
--1,377 -
8,726,822 25,415 1,377 82,163
---824
---6,400
14,464,164 ---
--- 21,818,096
- 3,982,401 --
--(1,377)-
14,464,164 3,982,401 (1,377) 21,825,320
23,190,986$4,007,816$-$21,907,483$
Redevelopment Agency PA No. 2
43
LA QUINTA REDEVELOPMENT AGENCY
COMBINING PROJECT AREA BALANCE SHEET
ALL GOVERNMENTAL FUNDS
JUNE 30, 2010
ASSETS
Cash and investments
Cash and investments with trustee
Receivables:
Tax increment
Accounts
Interest
Loans
Prepaid costs
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 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 utilization and/or by debt covenants
Low and moderate income housing
Assigned to:
Community development
Unassigned
Total Fund Balances
Total Liabilities and
Fund Balances
Debt Capital Special
Service Projects Revenue
Funds Funds Funds
36,812,455$32,553,550$27,253,518$
- 16,570,211 -
166,638 -41,659
-21,000 60,989
30,559 25,307 20,464
-- 3,920,107
--824
-- 2,143,702
- 4,290,375 -
--6,400
--2,791
37,009,652$ 53,460,443$ 33,450,454$
-$30,838$64,581$
--46,818
- 2,143,702 -
13,733,378 --
-- 1,831,398
--2,791
13,733,378 2,174,540 1,945,588
--824
-- 2,095,109
23,276,274 --
- 3,425,850 29,411,724
- 47,860,053 -
--(2,791)
23,276,274 51,285,903 31,504,866
37,009,652$53,460,443$33,450,454$
T O T A L S
44
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45
COMBINING PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
LA QUINTA REDEVELOPMENT AGENCY
Capital Debt Capital Special Special
Projects Service Projects Revenue Revenue
2004 Low and
Low/Mod Tax Housing Moderate
Bond Increment Project Authority Housing
Revenues:
Taxes and Assessments:
Tax increment -$38,517,789$ -$ -$9,629,447$
Use of Money and Property:
Interest income 14,464 94,785 196,204 -23,060
Rental income ---- 256,961
Intergovernmental:
Federal grants -----
Other revenue:
Miscellaneous revenues -- 325,000 --
Loan repayments ---- 105,300
Total Revenues 14,464 38,612,574 521,204 - 10,014,768
Expenditures:
Current:
General Government:
Administrative costs - 473,766 399,870 1,412 975,110
Professional services -- 569,246 - 457,954
Planning and Development:
Subsidy to low and moderate
housing 618,000 ----
Capital Outlay:
Project improvement costs 826,033 - 603,719 - 708,869
Debt Service:
Interest expense - 11,415,427 -2 -
Long-term debt repayments - 5,055,588 ---
Total Expenditures 1,444,033 16,944,781 1,572,835 1,414 2,141,933
Excess of Revenues over
(under) Expenditures (1,429,569) 21,667,793 (1,051,631) (1,414) 7,872,835
Other Financing Sources (Uses)
Transfers in - 4,438,892 ---
Transfers out ---- (4,438,891)
Long-term debt issued - 10,000,000 ---
Pass through agreement payments - (21,194,350)---
Payment to Educational Revenue
Augmentation Fund - (23,582,367)---
Total Other Financing Sources
(Uses)- (30,337,825)-- (4,438,891)
Excess of Revenues and
Other Sources over (under)
Expenditures and Other Uses (1,429,569) (8,670,032) (1,051,631) (1,414) 3,433,944
Fund Balances
Beginning of Year 4,855,419 17,482,142 44,929,283 - 6,248,393
End of Year 3,425,850$8,812,110$43,877,652$(1,414)$9,682,337$
Redevelopment Agency - PA No. 1
46
COMBINING PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
LA QUINTA REDEVELOPMENT AGENCY
Revenues:
Taxes and Assessments:
Tax increment
Use of Money and Property:
Interest income
Rental income
Intergovernmental:
Federal grants
Other revenue:
Miscellaneous revenues
Loan repayments
Total Revenues
Expenditures:
Current:
General Government:
Administrative costs
Professional services
Planning and Development:
Subsidy to low and moderate
housing
Capital Outlay:
Project improvement costs
Debt Service:
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
Payment to Educational Revenue
Augmentation Fund
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
(Continued)
Debt Capital Special Special
Service Projects Revenue Revenue
Low and
Tax Housing Moderate
Increment Project Authority Housing
20,763,180$ -$ -$5,190,795$
94,615 16,256 -98,807
---164,195
---498,682
---7,806
---23,444
20,857,795 16,256 - 5,983,729
253,227 76,930 1,375 539,783
- 114,397 -440,758
---348,484
- 475,892 -525,551
3,356,375 -2 203,848
871,100 --35,908
4,480,702 667,219 1,377 2,094,332
16,377,093 (650,963) (1,377) 3,889,397
1,951,399 2,600,000 --
(2,600,002)-- (1,951,398)
-- - -
(17,516,544)---
-- - -
(18,165,147) 2,600,000 - (1,951,398)
(1,788,054) 1,949,037 (1,377) 1,937,999
16,252,218 2,033,364 - 19,887,321
14,464,164$3,982,401$(1,377)$21,825,320$
Redevelopment Agency PA No. 2
47
COMBINING PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2010
LA QUINTA REDEVELOPMENT AGENCY
Revenues:
Taxes and Assessments:
Tax increment
Use of Money and Property:
Interest income
Rental income
Intergovernmental:
Federal grants
Other revenue:
Miscellaneous revenues
Loan repayments
Total Revenues
Expenditures:
Current:
General Government:
Administrative costs
Professional services
Planning and Development:
Subsidy to low and moderate
housing
Capital Outlay:
Project improvement costs
Debt Service:
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
Payment to Educational Revenue
Augmentation Fund
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
Debt Capital Special
Service Projects Revenue
Funds Funds Funds
59,280,969$ -$14,820,242$
189,400 226,924 121,867
--421,156
--498,682
-325,000 7,806
--128,744
59,470,369 551,924 15,998,497
726,993 476,800 1,517,680
-683,643 898,712
-618,000 348,484
- 1,905,644 1,234,420
14,771,802 -203,852
5,926,688 -35,908
21,425,483 3,684,087 4,239,056
38,044,886 (3,132,163) 11,759,441
6,390,291 2,600,000 -
(2,600,002)- (6,390,289)
10,000,000 --
(38,710,894)--
(23,582,367)--
(48,502,972) 2,600,000 (6,390,289)
(10,458,086) (532,163) 5,369,152
33,734,360 51,818,066 26,135,714
23,276,274$51,285,903$31,504,866$
T O T A L S
48
LA QUINTA REDEVELOPMENT AGENCY
COMPUTATION OF LOW AND MODERATE
INCOME HOUSING FUNDS
EXCESS/SURPLUS
Low and Moderate Low and Moderate
Housing Funds - All Project Areas Housing Funds - All Project Areas
July 1, 2009 July 1, 2010
Opening Fund Balance 30,991,133$ 34,933,507$
Less Unavailable Amounts:
Unspent debt proceeds (Section 33334.12 (g)(3)(B)) (4,855,419)$ (3,425,850)$
Notes receivable (2,067,028) (2,088,709)
(6,922,447) (5,514,559)
Available Low and Moderate Income Housing Funds 24,068,686 29,418,948
Limitation (greater of $1,000,000 or four years set-aside)
Set-Aside for last four years:
2009 - 2010 - 14,820,242
2008 - 2009 15,825,773 15,825,773
2007 - 2008 16,641,016 16,641,016
2006 - 2007 15,701,666 15,701,666
2005 - 2006 14,089,024 -
Total 62,257,479$ 62,988,697$
Base Limitation 1,000,000$ 1,000,000$
Greater amount 62,257,479 62,988,697
Computed Excess/Surplus None None
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50