Loading...
FY 1987-1988 RDA Financial StatementsLA QULNTA REDEVELOPMENT AGENCY June 30, 1988 CONTENTS Page Number Accountants' Report 1 General Purpose Financial Statements::: Combined Balance Sheet - All Fund Types and.Account Group 2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental -Fund Types .3 - Notes to Financial Statements 4 - 10 Supplementary Information: Combining Balance Sheet — Capital Project Funds 11 Combining Statement -of Revenues, Expenditures -and Changes - in Fund Balances - Capital Project Funds 12 Accountants' Report on Compliance with Audit Guidelines for California Redevelopment Agencies 13 DIEHL,EVANs &COMPANY .ERTIFIED PUBLIC ACCOUNTANTS A PARTNERSHIP INCWpING ACCOUNTANCY CORPORATIONS 1910 NORTH BUSH'STREET SANTA ANA - CALIFORNIA 92706.2894 PHONE (714) -542 -OM August 25, 1988 WIN Q PETERS. CPA DONALD H. PETERSON, CPA - - -DONALD E. CALLAHAN, CPA L. PETMSCHERER, CPA' .. RODNEY K. ?&DANIEL: CPA - -. RALPH N. WEINTRAUB• CPA MICHAEL R. LUDIN, CPA PHILIP H. HOLTKAMP, CPA . . THOMAS M. PERLOWSIO, CPA Board of Directors La Quints Redevelopment Agency La Quinta, California We have examined the.general purpose financial statements of -the La Quinta Redevelopment Agency, as of and for the year ended June 30, 1988, as listed in the table of contents. Our examination was made in -accordance with generally accepted audit-ing standards and; accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the -general purpose financi-al statements -referred to .above present fairly the financial position of the La Quinta Redevelopment Agency at June 30, 1988 and the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The supplementary information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the La Quinta Redevelopment Agency. The information has been subjected to the auditing procedures applied in the examination of the general purpose financial.` statements and, in our opinion, is.fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. -1- OTHER OFFICES AT: ONE CMC PLAZA - SUITE 265 2965 ROOSEVELT ST. 120 WEST WOODWARD. AVE. NEWPORT BEACH, CA 926645915 CARLSBAD, CA 9200&2389 ESCONDIDO, CA 92025-9990- (714) 20T5 999p(714) 644'•6156 (619) 7292343 (619) 741-3141 LA QUINTA REDEVELOPMENT AGENCY. COMBINED_ BALANCE SHEET ALL' FUND TYPES. AND ACCOUNT GROUP ' June 30, 1988 LIABILITIES AND FUND EQUITY LIABILITIES: Bonds payable_(Note 8) Due to County of Riverside (Note 8) Note payable to Water District (Note 8) Loan payable to City of La Quinta (Note 8) TOTAL LIABILITIES FUND BALANCES (NOTES 7 AND 8): Reserved for debt service Reserved for capital projects TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND EQUITY $ - $ $ 20,000;000 $205000,000 .2,206,812 .2,206,812 - • 4,596,593 13,670 - 13,670 4,596,593 96,005 A 96,005 86,003 -86,003 22,388,820 22,388,820 4,596,593 13,670 4,610,263 13 670 $4,596,593 $ 22,388,820 $ 26,999,083 See accountants' report and notes,to financial statements. -2- Governmental Account Fund Types Group Totals Capital Debt Long -Term (Memorandum Projects Service Debt Only) ASSETS: - _ Cash and temporary investments (ib (Notes lc and 3) $ 13,670 $ 1,454,000 $ - $,/1,467,670 Accrued interest receivable - 26,291 - 26,291 Tax increment revenue receivable (Note 4) - 39,942 - 39,942 Restricted Assets (Note 6): - Cash - 3,076-9-360 - 3,07.6,360 Amount available for retirement of long-term debt - - 5,096,593. - 5,096,593 Amount to be provided for repayment of debt - - 17,292,227 179292,227 TOTAL ASSETS L12.L670 $ 4,596,593 $ 22,388,820 $ 26,999,083 LIABILITIES AND FUND EQUITY LIABILITIES: Bonds payable_(Note 8) Due to County of Riverside (Note 8) Note payable to Water District (Note 8) Loan payable to City of La Quinta (Note 8) TOTAL LIABILITIES FUND BALANCES (NOTES 7 AND 8): Reserved for debt service Reserved for capital projects TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND EQUITY $ - $ $ 20,000;000 $205000,000 .2,206,812 .2,206,812 - • 4,596,593 13,670 - 13,670 4,596,593 96,005 A 96,005 86,003 -86,003 22,388,820 22,388,820 4,596,593 13,670 4,610,263 13 670 $4,596,593 $ 22,388,820 $ 26,999,083 See accountants' report and notes,to financial statements. -2- LA QUINTA REDEVELOPMENT 'AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES --ALL GOVERNMENTAL FUND`TYPES- For the year ended June -30, 1988` Totals Capital Debt. (Memorandum _- Proiects -Service Only) REVENUES: Tax increment revenue (Note 4) $ 703,737 $ 2,814;947. $ 3,5181684 Interest income - 264,787; 264,787 Miscellaneous revenue 45 45 TOTAL REVENUES 703,782 3,079,734- 3;783,51b EXPENDITURES: - Trustee fees Administrative (Note 5) Professional and consulting services Project costs Debt Service: Taxing agency payments (Note 4b) Interest on bonds Principal payments (Note 8) TOTAL EXPENDITURES EXCESS OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES): Loans from City (Note 8)' Operating transfers in (Note 5) Operating transfers out (Note 5) TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCES, JULY 1, 1987 FUND BALANCES, JUNE 30, 1988 - - 11,301 - -119301 80,000 - - 80,000 - 7,555 - 7,555 314,174 314,174 - 530,000 530,000 - 1,900,477 1,900,477 12106,612 1,106i612 401,729 3,548,390 3,950,119 302,053 (468,656) (166,603) 414,616 - 414,616 703,737 -703,737 (703,737) - (703,737) (289,121) 703,737 414,616 12,932 235,081 248,013 738 4,361,512 4,362,250 $ 13,670 $ 4,596,593 $ 4,610,263 See accountants' report and notes.to financial statements. -3- LA QUINTA REDEVELOPMENT. AGENCY NOTES TO FINANCIAL STATEMENTS June 30, 1988 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a -Description of funds and account group: The accounts of the La Quinta Redevelopment Agency (the Agency) are organized on the basis of funds and account group, each of which is considered a separate accounting entity with a self-bal-ancing set of accounts. The funds and account group used in the accompanying financial statements and described below are those -specif-ied for governmental units by the Governmental Accounting Standards Board (GASB). Cavital Proiect Funds Capital Project Funds are established to account for bond proceeds available for project improvements and interest income on invested funds. The funds are expended primarily for administrative expenses and redevelopment project costs. Included as a capital project fund is the low income housing fund which accounts for twenty percent of all taxes which are allocated by the Agency pursuant to the California Health and _Safety Code. These funds shall be used by -the Agency for the purpose of providing affordable housing.- Under provisions of the Health and Safety Code, such funds are referred to as "Redevelopment Funds". Debt Service Fund Debt service funds are established to account -for tax increment revenues, bond proceeds required to be set aside for future debt.service and related interest income. The fund is used to repay principal and interest on indebtedness of the Agency. Under provisions of the,Health and Safety Code, such funds are referred to as "Special Funds". Long -Term Debt Group of Accounts The Long -Term Debt Group of Accounts is used to account for bonds payable and other long-term debt indebtedness of the.Agency. b. Basis of Accounting: The modified accrual basis of accounting is used for all funds of the Agency. Revenues are re -cognized when they become measurable and available to finance expenditures of the current period. Accrued revenues include tax increment revenue and accrued interest on -- investments received within 60 days after year end. -Expenditures, are recorded when the related -liability is incur.red,-.except that principal and interest payments on -bonds are recorded a,s expenditures when due. Accrued interest on amounts due to the County of Riverside and the Coachella Valley Water District is reflected -in the long-term debt -group of accounts. See accountants' report. -4- LA QUINTA REDEVELOPMENT AGENCY _ NOTES --TO FINANCIAL STATEMENTS (Continued) = June 30, 1988. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) c. Investments: Investments are stated at cost, or amortized cost, which -approximates market value. (See Note 3). d. Bond Discounts and Bond Issue Costs: As described at Note lb. above, interest on bonds pa.yab-le- is not accrued, but rather is recorded as an expenditure when due:'- Consistent with this policy, discounts on the sale of bonds and bond issue costs are recorded as expenditures when -paid-in-the year -the bonds are issued. e. Budgetary Reporting: The budgets of the Agency are primarily "long-term" budgets which emphasize major programs and capital outlay plans extending over a number of years. Because of the long-term nature of projects, "annual" budget comparisons are not considered meaningful, and accordingly, no budgetary information is included in the accompanying financial statements. f. Total Columns on Combined -Statements: Total columns on the financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis and such .data is not comparable to a consolidation. Interfund eliminations have not been made -in the aggregation of this data. - g. Measurement Focus: All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that generally only current assets and current liabilities are included on their balance sheets, with the exception that the noncurrent portion of long-term receivables due to governmental funds are reported on their -balance sheets, offset by fund balance reserve accounts. Statements.of revenue, expenditures and changes in fund balances for governmental funds generally present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. 2. HISTORY AND ORGANIZATION: The Agency was activated on July 5, 1983. The -primary purpose of the Agency-: is to eliminate blight through the process of _redev-e-lo_pment.. --.:On N.ov:ember_.- 29, 1983 the City Council approved and adopted.the Redeve-lopment Plan for•_ the La Quinta Redevelopment Project. This plan provides for the -elimination-._ of blight and deterioration which- was found to exi-st in the project area.- The rea._The project area encompasses approximately 17.5 square miles of the City. The Coachella Valley Water District is constructing -the Agency's -projects to correct flooding of the project area. See accountants' report. -5- LA QUINTA REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1988 3., CASH AND INVESTMENTS: Cash and investments at June 30, 1988 consisted of the following: Market Cost Value Deposits: Banks: Demand accounts (all insured) $ 13,670 $ 13_,670 Investments held by fiscal agent: U.S. Treasury Notes 3,076,360 3,076,360 California Local -Agency Investment Fund (LAIF) 1,454,000_ 1,454-,000 Total cash and investments $ 4,544,030 $ 4,544,030 Cash and investments are recorded in the accompanying combined balance sheet as follows: Cash and Investments - unrestricted $ 1,467,670 Cash and Investments - restricted 3,076,360 Authorized Investments: Under provisions of the Agency's Investment Policy, and in accordance with Section 53601 of the California Government Code, the Agency may invest in the following types of investments: - U.S. Government Obligations - Obligations of U.S. Government Agencies - U.S. Government Instrumentality Obligations - Repurchase Agreements (Repos) whose underlying collateral consists of the foregoing specified securities - Bankers' Acceptances that are "prime" rated - State Investment Pool - Other instruments as may become available and authorized by California Law - Bonds issued by the City of La Quinta or the La Quints Redevelopment Agency LA QUINTA REDEVELOPMENT-, AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1988 3.. CASH AND INVESTMENTS (CONTINUED): California Local Agency Investment Fund (LAIF) The LAIF is a special fund of the California State Treasury through which local governments may pool investments. The City and the Agency each may invest up to $5,000,000 in the fund. Investments in LAIF ar.e=highly-liquid, as deposits can be converted to -cash within 24 hours withoutlogs of interest. Classification of Cash and Investments -b Cred-it Risk Deposits: All deposits 100% insured $ 13 ;6 70 Investments: Category 3: Investments not registered in City's name, uninsured, etc. 3,076,360 California Local Agency Investment Fund: All investments with LAIF secured by the full faith and credit of the State of California 1,454,000 ,$ 4,544,030 Allocation of Interest Income Among Funds Interest income is allocated to each fund based on the preceding month's ending cash balance. 4. TAX INCREMENT FINANCING AND RELATED RECEIVABLES: The Agency's primary source of revenue comes from property taxes, referred to in the accompanying financi-al statements as "tax increment revenue". Property taxes allocated to the Agency are computed in the following manner: 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 per agreements for specific _ amounts of tax increment each year. In 1988 these districts received a total of $530,000 in tax increment revenue: See accountants' report. -7- LA QUINTA REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1988 4.. TAX INCREMENT FINANCING AND RELATED RECEIVABLES (CONTINUED): The Agency has no power to levy and collect taxes and =any legislative property tax de -emphasis might necessarily reduce the amount of tax revenues that would otherwise be available to pay the principal of, and interest on bonds payable. 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 necessarily increase the amount of tax revenues that would be available to pay principal and interest on bonds payable. The tax increment receivable of $39,942 represents assessments attributable to the fiscal year ended June 30, 1988 that were remitted to - the- Agenc-y by the County of Riverside after the year end. 5. REIMBURSEMENT AGREEMENT: Pursuant to the terms of a reimbursement agreement, the Agency has reimbursed the City $80,000 for the use of City facilities during the past year. This amount is included in the administrative expenditures of the Capital Projects Fund. During the year ended June 30, 1986 a finding was made by the. Agency that a project of the Capital Project Fund of the Agency was of benefit to the entire project area and that the low income housing portion of this project met the requirements of the City for low -and -moderate income housing. It was estimated in the finding that -all tax increment to be received through June 30, 1988 would equal the cost of the benefit allocable to .low -and - moderate income housing. Accordingly the low income housing fund -,of the Agency transferred tax increment revenue in the amount of $703,737 to the Debt Service Fund of the Agency during the year ended June 30, 1988. 6. RESTRICTED ASSETS: These assets are restricted in their use to the retirement of principal and interest on bonds and Water District advances (see Note 8), and are not available for use by the Agency for any other purpose. 7. FUND BALANCE RESERVES: Under generally accepted accounting principles, a municipal entity may set up "reserves" of fund equity to segregate fund balances which are not appropriable for expenditure in future periods, or which are legally. set aside for a specific future use. Fund "designations" a lso-are.estab.lished to indicate tentative plans for financial resource utilization in a future period. See accountants' report. M -C LA QUINTA REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1988 7.. FUND BALANCE RESERVES (CONTINUED): The entire net equity of the debt -service fund is reserved for future debt service, and accordingly, is not available for general expenditures. The bond indenture requires $2,115,350 to be reserved. The -trustee -has currently reserved $2,226,769 which exceeds the bond indenture requirement. Other funds held by the trustee also are pledged for debt service. At June 30, 1988, a "Reserve for Capital Projects" was set up in -the Capita -1 Projects Fund to indicate that the related assets were not "available" as a current asset. 8. LONG-TERM DEBT: Changes in long-term debt during'theyear ended June 30, 1988 was as follows: June 30, June 30, 1987 Additions Payments 1988 Bonds payable $ 20,000,000 $ $ - $ 20,000,000 Due to County of ` Riverside 1,035,196 1,171,616 - 2,206,812 Note payable to Water District 850,975 23,030 778,000 96,005 Loan payable to City of La Quinta - 414,616 328,612 86,003 Total $ 21,886,171 $ 1,609,262,$ 1,106,612 $ 22,388,820 Unpaid accrued interest and. -subventions due to the County of Riverside totalling $1,194,646 have been added to long-term debt, however, these amounts have not been included -as an expenditure for the year ended June 30, 1988. Bonds Pavable La Quinta Redevelopment Project Tax Allocation Bonds, Series 1985 were issued during the fiscal year ending June 30, 1987. The bonds were issued in the amount of $20,000,000 and have an average interest rate of 9.404% per_- annum. Principal payments are -paid annually on September 1, beginning in 1989. Interest payments are payable semi-annually on March 1 and September 1, beginning in 1987. Bonds maturing on or before September 1, 1995 are not e subject to call and redemption prior to maturity. Bonds maturing on or = after September 1, 1996 are subject. to redemption- on. a-ny interest ' payment date at par plus a premium together with accrued interest -to the date of' redemption. See accountants' report. -9- LA QUINTA REDEVELOPMENT -AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1988 8.. LONG-TERM DEBT (CONTINUED): The scheduled future debt service payments on the bonds is as follows: Year Ended June 30, Principal Interest Total 1989 $ 245,:000 $ 1,900,000 $ 2,145,000 1990 265,000 1,876,725 2,141,725 1991 290,000 1,851,550 2,141,550 1992 320,000 1,824,000 2,144,000 1993 350,000 1,793,600 2,143,600 All subsequent years 18,530,000 27,865,400 461395,400 Total $ 20,000,000 $ 37,111,275 $ 57,111,275 Due to County of Riverside Based on an agreement with the County of Riverside, the Agency shall repay to the County 50 percent of tax increment received which would have been retained by the County if the Agency did not -exist. These repayments are subordinate to certain debt -service of the -Agency and exclude amounts allocated to the low-income housing fund. The repayments will begin when certain conditions of the bond indenture agreement have been met. Unpaid balances accrue interest at 10% per annum. The total amount payable to the County under this agreement at June 30, 1988 is $2,206,812 including $133,790 of accrued interest. This amount has been recorded in the long- term debt group of accounts. Notes Payable to Water District The Coachella Valley Water District advanced $778,000 to the Agency during the fiscal year ending June 30, 1986 for engineering costs incurred for a flood control project. This amount accrued interest at the rate of interest being earned by funds deposited with the State of California Local Agency Investment Fund. The original advance was repaid to the Water District in November, 1987 and the accumulated accrued interest of $96,005 remain's as long-term debt. Loans Payable to the City of La Quinta The City of La Quinta periodically makes operating advances to the Agency." Outstanding advances from the City to the Agency were $86,003 at June -30, -- 1988. See accountants' report. -10- LA QUINTA REDEVELOPMENT AGENCY COMBINING BALANCE SHEET - CAPITAL=PROJECT FUNDS June 30, 1988 Flood Low Control Income Project Housing Totals ASSETS Cash and temporary investments L12j670 $ - $ 13.,670 LIABILITIES AND FUND BALANCE LIABILITIES: Accounts payable and accrued expenses $ _ $ $ _ FUND BALANCE: Reserved for capital projects 13,670 - 13,670 TOTAL LIABILITIES AND FUND BALANCE -$_13_L670 $ - $ 13,670 See accountants' report. -11- LA QUINTA REDEVELOPMENT AGENCY COMBINING STATEMENT -OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - CAPITAL PROJECT FUNDS-- For UNDS_For the year ended June 30, 1988 REVENUES: Tax increment revenue Miscellaneous revenue TOTAL REVENUES EXPENDITURES: Administrative Professional and consulting services Project costs TOTAL EXPENDITURES EXCESS OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Loan from City Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES FUND BALANCES, JULY 1, 1987 FUND BALANCES, JUNE 30, 1988 See accountants' report. Flood Low Control Income Project Housing Totals $ - $ 703,737 $ 703,737 45 - 45 45 703,737 703,782 80,000 - 80,000 7,555 - 7,555 314,174 - 314,174 401,729 - 401,729 (401,684) 703,737 302,053 414,616 414,616 (703,737) (703,737) 414,616 (703,737) (2895121) 12,932 - 12,932 738 - 738 $ 132670 $ - $ 13,670 -12- LA QUINTA REDEVELOPMENT AGENCY August_ 25,' 1988 ACCOUNTANTS' REPORT ON COMPLIANCE WITH AUDIT GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES In connection with our examination of the financial statements of the La Quints Redevelopment Agency for the year ended June 30, 1988, we have performed, to -the extent applicable, -the tasks contained in Sections I through V of -the- "Guidelines for Compliance Audits of California Redevelopment-Agenc-ies" published by the State Controller. Based on the above procedures, we are of the opinion that the Agency complied in all material respects with criteria established in the State Controller's guidelines referred to above.