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FY 1991-1992 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year Ended June 30, 1992 (with Independent Auditor's Report Thereon) LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1992 TABLE OF CONTENTS Page Independent Auditors' Report Financial Statements: o Combined Balance Sheet - All Fund Types and Account Groups s Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 3 a Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - All Government Fund Types 4 • Notes to Financial Statements: Note 1 - Summary of Significant Accounting Policies 5 Note 2 - Organization and Tax Increment Financing 7 Note 3 - Prior Period Adjustments 8 Note 4 - Cash and Investments 9 Note 5 - General Long -Term Debt 11 Note 6 - Tax Allocation Bonds, Series 1989 13 Note 7 - Tax Allocation Bonds, Series 1990 13 Note 8 - Tax Allocation Bonds, Series 1991 14 Note 9 - Due to County of Riverside Note 10- Notes Payable to Desert Sands Unified School District 15 Note 11 - Notes Payable to Coachella Valley Unified School District 15 Note 12- Notes Payable to Individuals 15 Note 13- Advances from the City of La Quinta 16 Note 14- Pledged Tax Revenues 16 Note 15- Changes in General Fixed Assets 16 Note 16- Contingencies 16 Supplemental Information: Special Revenue Funds: e Combining Balance Sheet 18 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 19 LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1992 TABLE OF CONTENTS. CCQNTINUED) Debt Service Funds: Pave • Combining Balance Sheet 20 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 21 Capital Projects Funds: • Combining Balance Sheet 22 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 23 Independent Auditors' Report on Compliance with Audit Guidelines for California Redevelopment Agencies 24 M r r CERTIFIED PUBLIC ACCOUNTANTS �1 A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Board of Directors La Quinta Redevelopment Agency La Quinta, California INDEPENDENT AUDITORS' REPORT 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92714 (714) 474-2020 We have audited the accompanying financial statements 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, 1992, as listed in the table of contents. These component unit financial statements are the responsibility of the management of the La Quinta Redevelopment Agency. Our responsibility is to express an opinion on these component unit financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the component unit financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the component unit financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall component unit financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the component unit financial statements referred to above present fairly, in all material respects, the financial position of the La Quinta Redevelopment Agency as of June 30, 1992, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. As discussed in Note 16, the City is a defendant in lawsuits from other municipal investors whose investments were mismanaged by an outside investment advisor utilized by the City. The ultimate outcome of this uncertainty cannot be presently determined. Accordingly, the accompanying financial statements do not include any adjustments to the financial statements of the Agency that might result from the outcome of this uncertainty. Our audit was made for the purpose of forming an opinion on the component unit financial statements taken as a whole. The supplemental information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the component unit financial statements of the La Quinta Redevelopment Agency. Such information has been subjected to the auditing procedures applied in the audit of the component unit financial statements and, in our opinion, is fairly presented in all material respects in relation to the component unit financial statements taken as a whole. G -N a WdfOcr�'.lD September 4, 1992 -1- MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION LA QUINTA REDEVELOPMENT AGENCY Combined Balance Sheet -All Fund Types and Account Groups June 30, 1992 See accompanying notes to financial statements. -2- Account Groups Governmental Fund Types General General Special Debt Capital Fixed Long -Term Totals Revenue Service Projects Assets Debt (Memorandum OnTy) Assets and other debits Cash and investments (note 4) $4,584,176 3,385,953 12,832,101 - - 20,802,230 Cash with fiscal agent (note 4) - 1,554,708 - - - 1,554,708 Accounts receivable - - 1,299 - - 1,299 Due from other governments - 303,987 384,353 - - 688,340 Property, plant and equipment (note 15) - - - 5,879,910 - 5,879,910 Amounts available in debt service funds - - - - 5,024,697 5,024,697 Amount to be provided for retirement of long-term debt - - - 64.225.476 64,225,476 Total assets and other debits v� T 6 13.217.753 79.910 9.250.1.73 98,176,660 _�$ Liabilities, fund equity. and other credits Liabilities: Retentions payable $ - 20,698 - - 20,698 Due to other governments (note 9) - - - - 8,219,503 8,219,503 Advances payable to the City of La Quinta (notes 5 and 13) - - - - 6,166,497 6,166,497 Obligations under pass-through agreements (notes 5, 10 and 11) - 219,951 - - 17,657,673 17,877,624 Tax allocation bonds payable (notes 5, 6, 7 and 8) - - - - 35,000,000 35,000,000 Notes payable (note 5 and 12) - - - - 2,206,500 2,206„500 Total liabilities - 219,951 20,698 69,250,173 69,490,822 Fund equity and other credits: Investment in general fixed assets - - - 5,879,910 - 5,879,910 Fund balances: Reserved for: Debt service - 5,024,697 - - - 5,024,697 Unreserved: Designated for special projects 4,584,176 - 13.197,055 17.781.231 Total fund equity and other credits 4,584,176 5,024,697 13.197,055 5379,910 28,645,838 Total liabilities, fund equity, and other credits 84.584.176 17.753 879.91Q 69.250.173MiaLko See accompanying notes to financial statements. -2- LA QUINTA REDEVELOPMENT AGENCY Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Year ended June 30, 1992 Revenues: Taxes Interest Miscellaneous Total revenues Expenditures: General government Planning and development Capital projects Debt Service: Principal Interest Repayment of advances from City Interest accrued on advances from City Payments under pass through agreements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of bonds (net of bond issuance costs of $291,065) Proceeds of advances from City Loss on investments Total other financing sources (uses) Excess (deficiency) of revenues and other sources over (under) expenditures and other uses Fund balances at beginning of year as restated (note 3) Fund balances at end of year Special Debt Capital Totals Revenue Service Projects Memorandum Only) 8,408,935 824,730 508,456 8,311,676 9,644,862 $1,903,385 9,986,924 - 11,890,309 74,739 420,921 315,327 810,987 7,996 - 110,000 117,996 1,986,120 10,407,845 425,327 12,819,292 3,904 - 723,969 727,873 552,620 - - 552,620 443,198 - 6,447,801 6,890,999 - 550,000 - 550,000 - 2,248,448 - 2,248,448 - 6,150,707 - 6,150,707 - 505,696 - 505,696 943,267 248.267 999,722 10,403,118 7,171,770 18.574,610 9861398 4,727 f6.746.443) (5,755,318) 203,306 824,664 - 1,027,970 - (259,550) (768,420) (1,027,970) - - 8,408,935 8,408,935 824,730 508,456 8,311,676 9,644,862 - (162,461) -(Jb2afyI) 1,028,036 1,073,570 15,789,730 17,891,336 2,014,434 1,078,297 9,043,287 12,136,018 2,569,742 3,,946,400 4 7 10,669,910 5.024.697 13.147 Q55 22.805-928 See accompanying notes to financial statements. -3- Revenues: Tax increment Interest Miscellaneous Total revenues Expenditures: General government Planning and development Capital projects Debt Service: Principal Interest Payment of advances Interest accrued on advances from City I Payment under pass through agreements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of bonds payable Proceeds of advances from City Proceeds of notes Loss on investments Total other financing sources (uses) Excess (deficiency) of revenues and other sources over (under) expenditures and other uses Fund balances at beginning of year, as restated Fund balances at end of year LA QUINTA REDEVELOPMENT AGENCY Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Government Fund Types Year ended June 30, 1992 Special Revenue Funds Debt Service Funds _. _ Capital Projects Funds 1,346,501 723,969 Variance- 1,015,941 552,620 Variance- - - Variance - - - Favorable 600,000 443,198 Favorable - - Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) $1,605,401 1,903,385 297,984 8,811,567 9,986,924 1,175,357 - - - 150,200 74,739 (75,461) 651,200 420,921 (230,279) 186,667 315,327 128,660 - 7,99b 7,996 - - - - 110,000 110,000 1,755,601 1,986,120 230,519 9,462,767 10,407,845 945,078 186,667 425,327 238,660 37,800 3,904 33,896 - - - 1,346,501 723,969 622,532 1,015,941 552,620 463,321 - - - - - - 600,000 443,198 156,802 - - - 9,083,912 6,447,801 2,636,111 - - - 708,353 550,000 158,353 - - - - - - 2,613,827 2,248,448 365,379 - - - - - 431,000 6,150,707 (5,719,707) - _ - - - - - 505,696 (505,696) - - - 1,381,157 948.267 432.890 - - - 1,653,741 999,722 654,019 5.134,337 10.403,118 (5.268,781) 10,430,413 7,171,770 3,258,643 101,860 986,398 884,538 4.328430 4,727 (4,323,703) (10.243,746) (6,746,443) 3 497,303 - 203,306 203,306 - 824,664 824,664 - - - - - - - (259,550) (259,550) - (768,420) (768,420) - - -- - - - 8,000,000 8,408,935 408,935 - 824,730 824,730 - 508,456 508,456 1,020,136 8,311,676 7,291,540 _ - - - - -- - (162,461) -A162,461) 1,028,036 1.028,036 1,073,570 1.073,570 9.020,136 15,789,730 6-769 594 101,860 2,014,434 1,912,574 4,328,430 1,078,297 (3,250,133) (1,223,610) 9,043,287 10,266,897 2,569,742 2,569,742 - 3,946,400 3,946,400 - 4.153,768 4,153.768 - 52,671,602 45$� 1.912.574 8.274.830 5.024.697 (3.250.133) 2.930.15$ 13.197.055 10.66 M See accompanying notes to financial statements. CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements June 30, 1992 1) summaa of Signiflicant Accounting -Policies The following is a summary of the significant accounting policies of the City of La Quinta Redevelopment Agency. (a) Fund A untie The basic accounting and reporting entity is a "fund". A fund is defined as an independent fiscal and accounting entity with a self -balancing set of accounts, recording resources, related liabilities, obligations, reserves and equities segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulation, restrictions or limitations. The accounting records of the Agency are organized on the basis of funds and account groups classified for reporting purposes as follows: GOVERNMENTAL FUNDS Special Revenue Funds The Special Revenue Funds consist of the Low and Moderate Income Housing Funds of the Redevelopment Agency and are used to account for the portion of the Agency's tax increment revenue that is legally restricted for increasing or improving housing for low or moderate income households. Debt Service Funds The Debt Service Funds account for tax increment revenues, bond proceeds required to be set aside for future debt service and related interest income. The funds are used to repay principal and interest on indebtedness of the Agency. Under provisions of the Health and Safety Code and the Agency's bond resolutions, these funds are referred to as "Special Funds". Capinl PraitgtFunds The Capital Project Funds account for bond proceeds available for project improvements, interest income on invested funds and certain other income. The funds are expended primarily for redevelopment project costs and administrative expenses. Under provisions of the Health and Safety Code and the Agency's bond resolutions, these funds are referred to as "Redevelopment Funds". -5- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (l) Summary of Significant Accounting Police, (Continued) ACCOUNT GROUPS General_Lona—Term Debt Account Grou This account group is to account for all long—term debt of the Agency. The proceeds of the indebtedness is recorded in the Capital Projects (Redevelopment) fund and serves as a financing source for redevelopment expenditures. General Fixed Assets Account Gro p The General Fixed Assets Account Group is used to account for the cost of fixed assets acquired to perform general government functions. Assets purchased are recorded as expenditures in the governmental funds and capitalized at cost in the general fixed asset account group. Contributed fixed assets are recorded in general fixed assets at fair market value at the time received. Fixed assets acquired under a capital lease are recorded at the net present value of future lease payments. No depreciation has been provided on general fixed assets. (b) Basis of Accounting The modified accrual basis of accounting is utilized by all funds of the Agency. Under the modified accrual basis of accounting, expenditures are recorded when a current liability is incurred and revenues are recorded when received in cash unless susceptible to accrual (i.e., measurable and available to finance the Agency's operations). (c) Relationship to the City of La Quinta The Agency is an integral part of the reporting entity of the City of La Quinta. The funds and account groups of the Agency have been included within the scope of the financial statements of the City because the City Council of the City of La Quinta exercises oversight responsibility over the operations of the Agency. Only the funds and account groups of the Agency are included herein and these financial statements, therefore, do not purport to represent the financial position or results of operations of the City of La Quinta, California. —6— CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 1 Summa of 5ignificant &cglinting Poli ie n inu d (d) Cash and Investments Investments are reported at cost. An estimated loss is accrued for an impairment of investment market value when it is probable that the loss will become realized and the amount of loss can be reasonably estimated. (e) Budgetary Reporting The Agency adopts an annual budget prepared on the modified accrual basis for all of its governmental funds. (f) Fund Balance Reserves The Agency established "reserves" of fund equity to segregate fund balances which are not appropriable for expenditures in future periods, or which are set aside for a specific future use. At June 30, 1992, the Agency had reserved the entire fund balance of debt service funds in accordance with the State law, which requires all tax increment revenues to be used solely to service debt. (g) Memorandum Only Totals Columns in the accompanying financial statements captioned "Totals (Memorandum Only)" are not necessary for a fair presentation of the financial statements in accordance with generally accepted accounting principles, but are presented as additional analytical data. (2) Organization and Tax Increment Financing Redevelopment Goals and Objectives The general objective of the Redevelopment Plan adopted by the Agency is to encourage investment in the Redevelopment Project Area 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. -7- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (2) Organization and Tax Increment Financing, (Continued) Redevelopment Proiect Are 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 which was found to exist in the project areas. The Coachella Valley Water District is jointly financing projects with the Agency to help prevent the potential flooding of the project areas. Tax Increment Financing The Law provides a means for financing redevelopment projects based upon an allocation of taxes collected within a redevelopment project. The assessed valuation of a redevelopment project last equalized prior to adoption of a redevelopment plan or amendment to such redevelopment plan, or "base roll', is established and, except for any period during which the assessed valuation drops below the base year level, the taxing bodies thereafter receive the taxes produced by the levy of the current tax rate upon the base roll. Taxes collected upon any increase in assessed valuation over the base roll ("tax increment") are paid and may be pledged by a redevelopment agency to the repayment of any indebtedness incurred in financing or refinancing a redevelopment project. Redevelopment agencies themselves have no authority to levy property taxes. 3 Prior Period Ad'us ments At June 30, 1991, a pass-through accrued liability to the County of Riverside in the amount of $146,394 was overstated in Project Area No. 2 Debt Service Fund. It has been determined through an analysis of pass-through agreements that monies are directly apportioned to the County of Riverside before payment of tax increment revenue is made to the Agency. As a result, fund balance has been increased at June 30, 1991 by $146,394, as follows: Debt Service Fund balances as previously reported at June 30, 1991 $3,800,006 Adjustment to prior period accrued expenses 146,394 Fund balance, June 30, 1991, as restated $3,94 (1 -8- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (4) Cash and Investments Cash and investments held by the La Quinta Redevelopment Agency at June 30, 1992 consisted of the following: Deposits Investments Total Carrying Amount $ 6,350,367 15,006,571 Rate of Interest 0.0 — 3.45% 3.72-5.45% Cash and investments are classified in the accompanying combined balance sheet as follows: Cash and investments $20,802,230 Cash with fiscal agent 1,554,708 Total cash and investments $22,356,938 The Agency is generally authorized under state statutes and local resolutions to invest in the following investments: Demand deposits with financial institutions Savings accounts Certificate of deposit U.S. treasury securities Federal agency securities State of California notes or bonds Notes or bonds of agencies within the State of California Obligation by the Small Business Administration Bankers' acceptances Commercial paper Los Angeles County Investment Fund California Local Agency Investment Fund Under the California Government Code, a financial institution is required to secure deposits made by state or local governmental units by pledging securities held in the form of an undivided collateral pool. The market value of the pledged securities in the collateral pool must be equal at least 100% of the total amount deposited by the public agencies. California law also allows financial institutions to secure public deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. so CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) Cash and Inve5tMgnts, fContinued) Deposits of cities and other state or local governments are classified in three categories to give an indication of the level of custodial risk assumed by the entity: Category I - includes deposits that are insured or collateralized with securities held by the Agency or its agent in the Agency's name. Category - includes deposits collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name. Category 2 also includes deposits collateralized by an interest in an undivided collateral pool held by an authorized Agent of Depository and subject to certain regulatory requirements under State Law. C41eeory 3 - includes deposits collateralized with securities held by the pledging institution, or by its trust department or agent but not in the Agency's name. Category 3 also includes any uncollateralized deposits: Category Farm of Deposit 1 2 3 Demand deposits $10Q.M 6.264.167 Bank Balance Carrying Amount Investments of cities in securities are classified in three categories to give an indication of the level of custodial risk assumed by the entity: Category i - includes investments that are insured or registered or for which the securities are held by the Agency or the Agency's custodial agent (which must be a different institution other than the party through which the Agency purchased the securities) in the Agency's name. Investments held "in the Agency's name" include securities held in a separate custodial or fiduciary account and identified as owned by the Agency in the custodian's internal accounting records. Category 2 - includes uninsured and unregistered investments for which the securities are held in the Agency's name by the dealer's agent (or by the institution and another department of the institution purchased the securities for the Agency). Category 3 - includes uninsured and unregistered investments for which the securities are held by the dealer's trust department or agent, but not in the Agency's name. Category 3 also includes all securities held by the broker-dealer agent of the Agency (the party that purchased the securities for the Agency) regardless of whether or not the securities are being held in the Agency's name. -10- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (4) Cash and Investments. (Continued) Form of Investment Mutual funds Local Agency Investment Fund Total investments (Continued) Carrying Market Amount Value $ 1,554,708 1,554,708 14.451.863 14.451.832 [[ uoili--sm The above investments are not classified in risk categories because they do not represent an investment in securities. 5 General Long -Terre Debt Changes is general long-term debt for the year ended June 30, 1992, were as follows: Project Area No. 1: Tax allocation bonds Due to County of Riverside Pass through agreements payable: Desert Sands Unified School District Coachella Valley Unified School District Notes payable - individuals Advances payable to City of La Quinta Project Area No. 2: Notes payable - individuals Advances payable to City of La Quinta Total long-term debt Balance at Balance at July 1. 1991 Additions Deletions June 30, 1 292 $26,850,000 8,700,000 550,000 35,000,000 6,007,041 2,212,462 -- 8,219,503 3,514,140 - 259,260 3,254,880 14,756,492 - 353,699 14,402,793 1,332,870 - 446,985 885,885 1,044,274 7,778,435 6,150,707 2,672,002 2,050,630 -- 730,015 1,320,615 1.628.068 1,866.427 - 3.494,495 57�I5. U.557.3.2�1 8,, k2 ?SD.I:U —11— CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (5) General Long -Term Debt, `(CQntint ed) The following is a schedule of debt service requirements until maturity: -12- Project Area No. _1 Pass-through Agreements `Coachella Tax Tax Tax Desert Sands Valley Fiscal Allocation Allocation Allocation Unified Unified Notes Total Debt Year Series Series Series School School Payable Service Ending 1989_ 1990 1991 District District _(PA #1 & 2)� Rtquirements 1992-93 $ 727,186 1,839,355 701,669 344,610 730,081 731,526 5,074,427 1993-94 726,263 1,841,535 728,175 434,050 776,353 565,488 5,071,864 1994-95 729,270 1,836,768 725,743 571,560 624,173 528,066 5,015,580 1995-96 726,225 1,839,850 722,675 628,000 474,517 490,644 4,881,911 1996-97 727,100 1,835,335 723,210 707,650 526,560 453,222 4,973,077 1997-98 726,690 1,833,155 723,988 569,010 580,683 - 4,433,526 1998-99 724,965 1,832,913 723,210 - 621,976 - 3,903,064 1999-00 721,895 1,829,532 721,475 - 649,927 - 3,922,829 2000-01 722,260 1,827,948 723,625 - 670,817 - 3,944,650 2001-02 720,400 1,828,158 724,500 - 684,233 - 3,957,291 2002-03 721,200 1,825,171 719,259 - 697,918 - 3,963,548 2003-04 720,000 1,823,639 722,744 - 711,876 - 3,978,259 2004-05 716,800 1,823,227 719,794 - 726,114 - 3,985,935 2005-06 716,400 1,818,764 720,409 - 740,636 - 3,996,209 2006-07 718,400 1,811,210 719,431 - 755,449 - 4,004,490 2007-08 712,800 1,808,810 716,860 - 770,558 - 4,009,028 2008-09 714,400 1,803,640 717,535 - 785,968 - 4,021,543 2009-10 712,800 1,800,070 716,297 - 801,688 - 4,030,855 2010-11 708,000 1,792,470 713,080 - 817,722 - 4,031,272 2011-12 709,600 1,789,999 712,720 - 834,076 - 4,046,395 2012-13 707,199 1,781,815 714,959 - 421,468 - 3,625,441 2013-14 -- - 709,799 - - - 709,799 2014-15 712,679 712,679 Principal & interest 15,109,853 38,223,364 16,533,836 3,254,880 14,402,793 2,768,946 90,293,672 Less interest (7,714,853) (19_.318.364) .(7.833,836) (562,446) ((33 X429,499) Total principal S 7.395000 9 8.700.000 $$ 14.402,793 2.206.500 54,864,173 -12- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 6) Tax Allocation Bonds. Sees 1489 La Quinta Redevelopment Project Tax Allocation Bonds, Series 1989, were issued by the Agency in January 1, 1989, in the amount of $8,000,000. The proceeds are to be used for flood control improvements within Project Area No. 1. Interest rates range from 6.2% to 7.6% per annum, with interest payable semi-annually, on March 1 and September 1, beginning March 1, 1989. Bonds maturing on or after September 1, 1999 are subject to redemption, at the option of the Agency, as a whole or in part, on any interest payment date, on or after September 1, 1988, at a redemption price equal to the principal amount, plus accrued interest, plus a premium of 1/2% to 2%. The interest on, and principal of the bonds are payable solely from pledged tax increment revenues. Bonds maturing on September 1, 2012 are subject to mandatory redemption, in part from sinking account payments on September 1, 2001 and on each September 1 thereafter, through September 1, 2012, at a prepayment price equal to 100% of the principal amount plus accrued interest. Under terms of the issue, a minimum of $7,345,182, the maximum annual debt service amounts, is to be set aside in reserve funds. A total of $801,665 was set aside at June 30, 1992. The amount of principal outstanding on the 1989 Tax Allocation Bonds at June 30, 1992 was $7,395,000. 7) Tax Allocation Bonds. Series 1990 La Quinta Redevelopment Project Serial Tax Allocation Bonds, Series 1990, in the amount of $19,695,000 were issued by the Agency in April 1, 1990 to finance the acquisition and improvement of land within the La Quinta Redevelopment Project Area No. 1 and for other lawful redevelopment purposes. A portion of the proceeds were used to refund the 1985 Tax Allocation Bonds previously issued by the Agency. Interest is due on the bonds at rates ranging from 5.8% to 6.8% is payable on September 1, 1990 and semi-annually thereafter, on March I and September 1 of each year until maturity. The interest on, and principal of the bonds are payable solely from pledged tax increment revenues. Bonds maturing on September 1, 2005 and September 1, 2012, are subject to mandatory redemption, in part from sinking account payments on September 1, 2001, respectively, and each September 1, 2006 thereafter, through September 1, 2005 and September 1, 2012, respectively, at a premium price equal 100% of the principal amount plus accrued interest. Bonds maturing on September 1, 2005 and September 1, 2012, are subject to redemption, at the option of the agency, as a whole or in part, on any interest payment date, on or before September 1, 2000, at a redemption price equal to the principal amount, plus accrued interest, plus a premium of 1/2% to 2%. The amount of principal outstanding in the 1990 Tax Allocation Bonds at June 30, 1992 was $18,905,000. -13- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (8) Tax Allocation Bvnd$, $grks 1991 La Quinta Redevelopment Project Tax Allocation Bonds, Series 1991, were issued by the Agency, October 1, 1991, in the amount of $8,700,000 for Project Area No. 1. Interest is payable semi-annually, on March 1, and September 1 of each year commencing March 1, 1992. Interest rates are 6.375% per annum. Bonds maturing on or after September 1, 2000 are subject to redemption, at the option of the Agency, as a whole or in part, on any interest payment date, on or after September 1, 1999, at a redemption price equal to the principal amount, plus accrued interest, plus a premium of 1% to 2%. The interest on, and principal of the bonds are payable solely from pledged tax increment revenues. Term Bonds maturing on September 1, 2014 are also subject to mandatory sinking fund redemption, in whole or in part, on September 1, 2010 and on each September 1, thereafter, through September 1, 2014, at a prepayment price equal to 100% of the principal amount plus accrued interest. Under the terms of the issue, the maximum annual debt service amount of $734,480 is to be set aside in reserve funds unless the Agency elects to maintain the reserve requirement by obtaining a letter of credit for the amount. A total of $752,980 was set aside at June 30, 1992. The amount of principal outstanding on the 1991 Tax Allocation Bonds payable at June 30, 1992 was $8,700,000. (21 Due to Cgunty of Riverside Based on an agreement dated November 29, 1983 between the Agency, the City of La Quinta and the County of Riverside (County), the Agency will pay to the County its 50% share of tax increment received by the Agency pursuant to the guidelines of the agreement. These payments are subordinate to certain debt service Project Area No. 1 of the Agency and exclude the amount allocated to the low income housing fund. The payments 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, 1992 is $8,219,503 including $644,264 of current year accrued interest. This amount has been recorded in the general long-term debt account group. From the remaining fifty percent of tax increment revenue, the Agency shall set aside related required amounts in the low income housing fund. Then, the Agency will pay debt and expenditures of no more the $3,000,000 annually and $10,000,000 total on mutually agreeable project costs. The County is to receive the remainder of this 50% share after these payments are made. No amounts are due under this provision at June 30, 1992. -14- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (10) Notes Payable to Desert Sands Unified School District Based on an agreement dated June 21, 1988 between the Agency, the City of La Quinta and the Desert Sands Unified School District (District), the Agency will identify tax increment revenue associated with the District for Project Area No. 1. The tax increment is to be paid to the District over a payment schedule from June 29, 1988 to July 1, 1998 in amounts ranging from $21,505 to $547,505 for a total amount of $4,132,020. Tax increment payments outstanding at June 30, 1992 totalled $3,254,880. Alternatively, such tax increment revenues plus interest accrued required by this agreement may be retained by the Agency to pay on behalf of the District principal and interest on loans, construction projects or money advanced to finance a sports complex and related amenities as specified by the District. 0 1) Nate Pay&e to Coachella Valley Unified School Di, is rict 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 of a portion of tax increment revenue associated with properties within District confines. Such payments are subordinated to other indebtedness of the Agency incurred in furtherance of the Redevelopment Plan for Project Area No. 1. This tax increment will be paid to the district over the payment schedule from June 30, 1991 to August 1, 2012 in amounts ranging from $353,699 to $834,076 for a total amount of $15,284,042. Tax increment payments outstanding at June 30, 1992 totalled $14,402,793. The district agrees to use such funds to provide classroom and other construction costs, site acquisition, school busses or expansion or rehabilitation of current facilities. (12) Notes Payable to Individuals In the fiscal year ended June 30, 1991, the Agency purchased several parcels of land from individuals and as a result incurred $3,383,500 of debt. Interest on the notes ranges from 9% to 10.5% per annum and is payable monthly and quarterly. The principal balance outstanding on the notes at June 30, 1992 for Project Area No 1. is $885,885 and $1,320,615 for Project Area No. 2. —15— CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 1 A v -nce-5 from the City of La Quinta The following represents a summary of the various transactions between the City of La Quinta and the Agency, accounted for as advances from the City: (14) Pledged T-gx 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. (15) Changes in General Fixed Assets The Agency purchased land during the fiscal year ended June 30, 1991 for $5,372,978 which will be used for community facilities. During the year ended June 30, 1992, the Agency sold a parcel of land for $60,000, which had an original historical cost of $101,742. A summary of general fixed assets transactions for the fiscal year ended June 30, 1992 is as follows: Balances at Balances at July 1. 191 Additions Deletions June 30, 1992 Land - 101,742 5.879.910 (16) Contingencies Prior to December 11, 1991, the Agency used an investment advisor who served as broker/dealer for a significant portion of the Agency's investment portfolio. On December 11, 1991, approximately $7,656,000 of these investments were withdrawn and deposited into other accounts of the Agency, leaving a balance with the advisor of approximately $162,000. On the same date, the Securities and Exchange Commission froze all cash and investments under the control of the advisor because of alleged misappropriation by the advisor of client funds. -16- Balances at Balances at July 1. 1991 Prggeeds Rep-ayments June 30 1922 Agency expenditures incurred by the City: Project Area No. 1 $1,044,274 7,778,435 6,150,707 2,672,002 Project Area No. 2 1,628.067 1,866.427 - 3,4-24,494 Totals X2.6 341 9,644,8kZ 6,150,701 (14) Pledged T-gx 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. (15) Changes in General Fixed Assets The Agency purchased land during the fiscal year ended June 30, 1991 for $5,372,978 which will be used for community facilities. During the year ended June 30, 1992, the Agency sold a parcel of land for $60,000, which had an original historical cost of $101,742. A summary of general fixed assets transactions for the fiscal year ended June 30, 1992 is as follows: Balances at Balances at July 1. 191 Additions Deletions June 30, 1992 Land - 101,742 5.879.910 (16) Contingencies Prior to December 11, 1991, the Agency used an investment advisor who served as broker/dealer for a significant portion of the Agency's investment portfolio. On December 11, 1991, approximately $7,656,000 of these investments were withdrawn and deposited into other accounts of the Agency, leaving a balance with the advisor of approximately $162,000. On the same date, the Securities and Exchange Commission froze all cash and investments under the control of the advisor because of alleged misappropriation by the advisor of client funds. -16- CITY OF LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 16) Contingencies. (Continu d The accompanying financial statements reflect a loss recognized for the write—off of the funds held by the advisor on December 11, 1991 in the amount of $162,461. On February 5, 1992, the receiver for another government agency that had used the services of the advisor filed a civil action alleging that approximately $5,400,000 of the funds withdrawn by the City and Agency on December 11, 1991 were actually funds of the other government agency. The claimant has further indicated that the amount of its claim may be increased. Other claims may be filed by other defrauded clients of the advisor. The City has filed a petition with the Riverside County Superior Court seeking a declaration that the amounts withdrawn were actually funds of the City and Agency. Trial is currently set to commence in March of 1993. The laws and facts associated with this case are very complex and are under investigation. The ultimate outcome of this lawsuit cannot presently be determined. Therefore, no estimate as to any additional losses that may result have been reflected in the accompanying financial statements. —17— LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Balance Sheet June 30, 1992 Assets Cash and investments Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Total liabilities Fund balances: Unreserved: Designated for special projects Total liabilities and fund balances -18- Low Income Housing Project Area #1 $4,087,476 NMI 4,087.476 4 [ 8.7_. M Low Income Housing Project Area #2 Totals 4,584,176 4,584,176 496,700 4,584 176 LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1992 Revenues: Taxes Interest Miscellaneous Total revenues Expenditures: General government Planning and development Capital projects Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of advances from City Total other financing sources (uses) Excess (deficiency) of revenues and other sources over expenditures and uses Fund balances at beginning of year Fund balances at end of year -19- Low Income Low Income Housing Housing Project Project PA #1 PA #2 Totals $1,614,171 289,214 1,903,385 69,145 5,594 74,739 7,996 - 7,926 1,691,312 294.808 1,986,120 - 3,904 3,904 552,620 - 552,620 443.198. - 443,198 995,818 3.904 99� 695.494 290,9{14 986,398 189,245 14,061 203,306 820,826 3.904 824.730 1,010.071 17.965 1_..028.036 1,705,565 308,869 2,014,434 2.381.911 4.0 187831 496.7004,584,176 2.562.342 LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Balance Sheet June 30, 1992 Assets Cash and investments Cash with fiscal agent Interest receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Obligations under pass- through agreements Total liabilities Fund balances: Reserved for debt service Total liabilities and fund balances Redevelopment Agency PA #1 $1,657,809 1,554,708 232,953 104,620 104.620 3.340,850 -20- 115,..33.1 20- Redevelopment Agency PA #2 1,728,144 71.034 IMIUU 11 5 331 115,331 Tote 1s 3,385,953 1,554,708 X03.987 219.951 21,51 1,683.847 5.024.697 LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1992 Revenues: Taxes Interest Total revenues Expenditures: Debt service: Principal Interest Repayment of advances from City Interest accrued on advances from City Payment under pass-through agreements Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of advances from City Total other financing sources (uses) Excess (deficiency) of revenues and other sources over expenditures and other uses Fund balances at beginning of year, as restated Fund balances at end of year Redevelopment Agency PA #1 $8,830,070 364,960 _9,195.030 550,000 2,248,448 6,150,707 181,652 717.604 9,848.411 (653,381) 768,420 (259,550) 181.652 690,522 37,141 3_,303,709 $3.340.850 -21- Redevelopment Agency PA #2 1,156,854 55.961 1,212.815 324,044 233 554,707 Totals 9,986,924 420,921 10,407.845 550,000 2,248,448 6,150,707 505,696 248,267 1403.118 658,108 4,727 56,244 824,664 - (259,550) 326.804 508,456 383,048 _1_,073,570 1,041,156 1,078,297 642.691 3,946.400 1.83 47 _5.024,697 LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Balance Sheet June 30, 1992 Liabililie5 and Fund Bal n ces Liabilities: Retentions payable $ 20,698 - 20,698 Total liabilities 20.698 _ 20,698 Fund balances: Unreserved: Designated for special projects 13,116,873 80,182 13,197.055 Total liabilities and fund balances $13.137.57113-2� 1717 .3 1 3 ry 13 � -22- Redevelopment Redevelopment Agency Agency PA #1 PA #2 Totals Assets Cash and investments $12,751,919 80,182 12,832,101 Accounts receivable 1,299 - 1,299 Due from other governments 384,353 -384353 Total assets $13,137.571 $ 13.2 Liabililie5 and Fund Bal n ces Liabilities: Retentions payable $ 20,698 - 20,698 Total liabilities 20.698 _ 20,698 Fund balances: Unreserved: Designated for special projects 13,116,873 80,182 13,197.055 Total liabilities and fund balances $13.137.57113-2� 1717 .3 1 3 ry 13 � -22- LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1992 Redevelopment Redevelopment Agency Agency PA #1 PA #2 Totals Revenues: Interest $ 312,717 2,610 315,327 Miscellaneous 110,000 110.000 Total revenues 422,717 2,610 425,327 Expenditures: General government 464,008 259,961 723,969 Capital projects 5r,241,815 1,205.986 6,447,801 Total expenditures _5_,705,823 1_,465.947 7.171.770 Excess (deficiency) of revenues over expenditures (S.283,106) (1,463,337) (6,746,443) Other financing sources (uses): Operating transfers in Operating transfers out (768,420) - (768,420) Proceeds of bonds payable 8,408,935 - 8,408,935 Proceeds of advances from City 6,775,957 1,535,719 8,311,676 Proceeds of notes - _ _ Loss on investments (162,461) - (162,461) Total other financing sources (uses) 14,254,011 1,535.719 15,789,730 Excess (deficiency) of revenues and other sources over expenditures and other uses 8,970,905 72,382 9,043,287 Fund balances at beginning of year 4,145,968 7,800 4,153,768 Fund balances at end of year $13,116,813 80.18.2 13.19' X55 -23- A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Board of Directors La Quinta Redevelopment Agency La Quinta, California CERTIFIED PUBLIC ACCOUNTANT 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92714 (714) 474-1020 AUDITORS' REPORT ON COMPLIANCE WITH AUDIT GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES We have audited the component unit financial statements of the La Quinta Redevelopment Agency ("Agency") for the year ended June 30, 1992 and have issued our report thereon dated September 4, 1992. Our audit was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. We performed the procedures contained in the publication entitled Guidelines for Compliance Audits of California Redgvelogment Agencies as promulgated by the Agency's compliance with laws, regulations and administrative requirements governing activities of the Agency, as required by Section 33080.1(a) of the Health and Safety Code of the State of California. The procedures we performed would not necessarily disclose instances of noncompliance because they were based on selective tests of accounting records and related data. During the performance of the aforementioned procedures, nothing came to our attention that would lead us to believe that the Agency did not comply with applicable laws, regulations and administrative requirements governing its activities, except that the Annual Redevelopment Report for the Fiscal Year 1990-1991 was submitted during the twenty day period following December 31, 1991. This report is intended solely for the use of management and filings with appropriate regulatory agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which, upon acceptance by the Agency, is a matter of public record. G�,►u� Q �t o u %r f -Ge September 4, 1992 —24— MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION