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FY 1998-1999 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1999 (with Independent Auditors' Report Thereon) (This page intentionally left blank) LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1999 ABLE OF CONTENTS Independent Auditors' Report Financial Statements: Page 1 • Combined Balance Sheet - All Fund Types and Account Groups 4 • Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 5 • Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Governmental Fund Types 6 • Notes to the Financial Statements 8 Required Supplementary Information 25 Supplemental Data: Special Revenue Funds: • Combining Balance Sheet 28 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 29 Debt Service Funds: • Combining Balance Sheet 30 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 31 Capital Projects Funds: • Combining Balance Sheet 32 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 33 Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 34 (This page intentionally left blank) CONRADAND ASSOCIATES, L.L.P Board of Directors La Quinta Redevelopment Agency La Quinta, California CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITORS' REPORT 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92614 (949) 474-2020 Fax (949) 263-5520 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, 1999, as listed in the table of contents. These financial statements are the responsibility of the management of the La Quinta Redevelopment Agency. Our responsibility is to express an opinion on these 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and 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 prevent fairly, in all material respects, the financial position of the La Quinta Redevelopment Agency at June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. The supplementary information regarding the year 2000 issue presented on page 25 is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We did not audit and do not express an opinion on such information. Further, we were unable to apply to this information the procedures prescribed by professional standards because of the difficulty in ascertaining whether the information presented includes a sufficiently complete description of the year 2000 issue as it relates to the reporting government. In addition, we do not provide assurance that the La Quinta Redevelopment Agency is or will become year 2000 compliant, that the Agency's year 2000 remediation efforts will be successful in whole or in part, or that parties with which the Agency does business are or will become year 2000 compliant. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental data listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements of the La Quinta Redevelopment Agency. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole. MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Board of Directors La Quinta Redevelopment Agency Page Two In accordance with Government Auditing Standards, we have also issued a report dated August 13, 1999 on our consideration of the Agency's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. August 13, 1999 (This page intentionally left blank) LA QUINTA REDEVELOPMENT AGENCY Combined Balance Sheet - All Fund Types and Account Groups June 30, 1999 Total assets and other debits $ 15,441,296 3,862,758 11191,734 10,233,506 97,892,863 137,922,157 143,944,814 Liabilities. Eauitv and Other Credits Liabilities: Accounts payable Governmental Fund Types Account Groups 9,718 - - 54,928 87,894 Accrued expenses - - General General Totals Deposits payable 15,596 Special Debt Capital Fixed Long -Term (Memorandum Only) Assets and Other Debits Revenue Service Projects Assets Debt 1999 1998 775,477 Assets: Advances from other funds (notes 6) Cash and investments (note 3) $ 5,950,451 3,641,336 2,384,351 - Long-term debt 11,976,138 12,022,037 Cash with fiscal agent (note 3) 6,110,194 183,946 7,909,930 - - 14,204,070 16,082,890 Accounts receivable 44,006 - 60,900 - 99,290,493 104,906 104,570 Interest receivable 229,099 37,465 23,619 - Investment in general fixed assets 290,183 177,582 Notes receivable (note 4) 2,556,508 - 112,343 - - 2,668,851 2,528,967 Due from other funds (note 5) - - 591 - 591 62,192 Due from other governments - 11 - 4,286,709 - 11 - Advances to other funds (note 6) 551,038 - - - - 551,038 551,038 Property, plant and Notes receivable 2,556,508 - 112,343 - - 2,668,851 2,528,967 Unreserved: equipment (note 7) - - - 10,233,506 - 10,233,506 11,438,745 Other debits: 8,463,522 6,851,646 Undesignated 612,103 - - - - (612,103) Amount available in Total equity and other credits debt service funds - - - - 3,306,726 3,306,726 4,286,709 Amount to be provided for and other credits $ 15,441,296 3,862,758 10,491,734 I0,233,506 97,892,863 137,922,157 retirement of long-term debt - - - - 94,586,137 94,586,137 96,690,084 Total assets and other debits $ 15,441,296 3,862,758 11191,734 10,233,506 97,892,863 137,922,157 143,944,814 Liabilities. Eauitv and Other Credits Liabilities: Accounts payable $ 40'307 4,403 9,718 - - 54,928 87,894 Accrued expenses - - - - - 504,731 Deposits payable 15,596 - - - - 15,596 14,426 Due to other funds (note 5) - 591 - - - 591 62,192 Due to the City of La Quinta 775,406 - 71 - - 775,477 162,702 Advances from other funds (notes 6) - 551,038 - - - 551,038 551,038 Long-term debt (notes 9 through 15) - - - - 97,892,863 97,892,863 100,976,793 Total liabilities 831,809 556,032 9,789 - 97,892,863 99,290,493 102,359,776 Equity and other credits: Investment in general fixed assets - - - 10,233,506 - 10,233,506 11,438,745 Fund balances: Reserved for: Debt service - 3,306,726 - - - 3,306,726 4,286,709 Bond projects 6,110,194 - 7,909,930 - - 14,020,124 16,008,655 Advances to other funds 551,038 - - - 551,038 551,038 Notes receivable 2,556,508 - 112,343 - - 2,668,851 2,528,967 Unreserved: Designations 6,003,850 - 2,459,672 - 8,463,522 6,851,646 Undesignated 612,103 - - - - (612,103) (80,722) Total equity and other credits 14,609,487 3,306,726 10,481,945 10,233,506 - 38,631,664 41,585,038 Total liabilities, equity and other credits $ 15,441,296 3,862,758 10,491,734 I0,233,506 97,892,863 137,922,157 143,944,814 See accompanying notes to financial statements. 4 LA QUINTA REDEVELOPMENT AGENCY Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Year ended June 30, 1999 Other financing sources (uses): Operating transfers in - 1,569,263 1,397,868 Totals 7,148,980 Special Debt Capital (Meiiioraiicliuii Only) (2,967,131) Revenue Service Projects 1999 1998 T Revenues: 25,570 Transfers to the City of La Quinta (3,501,574) - (556,846) Taxes $ 3,592,472 14,369,887 - 17,962,359 16,269,234 Developer fees 638,215 - 5,000 643,215 11,127 Investment income 1,044,786 212,862 274,710 1,532,358 1,079,031 Rental income 414,236 - - 414,236 395,414 Gain (loss) on sale of land 195,945 - - 195,945 (22,678) Litigation settlement proceeds - - 821,589 821,589 204 Total revenues 5,885,654 14,582,749 1,101,299 21,569,702 17,732,332 Expenditures: (under) expenditures and other Current: financing uses (1,622,582) (979,983) 854,430 Planning and development 2,704,025 261,530 677,515 3,643,070 3,584,866 Capital projects - - - - 2,691,777 Debt service: 30,146,293 Principal - 3,160,000 - 3,160,000 1,675,000 Interest - 4,561,667 - 4,561,667 4,584,546 Payments under pass-through obligations - 8,728,082 - 8,728,082 9,255,220 Total expenditures 2,704,025 16,711,279 677,515 20,092,819 21,791,409 Excess (deficiency) of revenues over (under) expenditures 3,181,629 2,128,530) 423,784 1,476,883 (4,059,077) Other financing sources (uses): Operating transfers in - 1,569,263 1,397,868 2,967,131 7,148,980 Operating transfers out (1,302,637) (1,254,118) (410,376) (2,967,131) (7,148,980) Transfers from the City of La Quinta - - - - 25,570 Transfers to the City of La Quinta (3,501,574) - (556,846) (4,058,420) - Proceeds of bonds (net of issuance costs) - - - - 21,565,688 Payments to refunded bond escrow agent - - - - (13,430,939) Proceeds of advances from City - 833,402 - 833,402 810,006 Total other financing sources (uses) (4,804,211) 1,148,547 430,646 (3,225,018) 8,970,325 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (1,622,582) (979,983) 854,430 (1,748,135) 4,911,248 Fund balances at beginning of year 16,232,069 4,256,709 9,627,515 30,146,293 25,235,045 Fund balances at end of year $ 14,609,487 3,306,726 10,481,945 28,398,158 30,146,293 See accompanying notes to financial statements. 5 LA QUINTA REDEVELOPMENT AGENCY Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Governmental Fund Types Year ended June 30, 1999 Revenues: Taxes Developer fees Investment income Rental income Gain (loss) on sale of land Litigation settlement proceeds Total revenues Expenditures: Current: Planning and development Debt service: Principal Interest Payr,z.,nts under pass-through obligations Total expenditures Excess (deficiency) of revenues over (under) expenditures Other fudancing sources (uses): Operating transfers in Operating transfers out Transfer to the City of La Quinta Proceeds of advances Total other financing sources (uses) Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses Fund balances at beginning of year Fund balances at end of year Special Revenue Funds Variance Favorable/ Budget Actual (Unfavorable) $ 3,429,250 3,592,472 163,222 - 638,215 638,215 422,500 1,044,786 622,286 341,000 414,236 73,236 150,000 195,945 45,945 4,342,750 5,885,654 1,542,904 3,501,426 2,704,025 797,401 3,501,426 2,704,025 797,401 841,324 3,181,629 2,340,305 (3,219,687) (1,302,637) 1,917,050 (8,613,984) (3,501,574) 5,112,410 (11,833,671) (4,804,211) 7,029.460 (10,992,347) (1,622,582) 9,369,765 16,232,069 16,232,069 - $ 5,239,722 14,609,487 9,369,765 See accompanying notes to financial statements. 6 Debt Service Funds Variance Favorable/ Budget Actual (Unfavorable) 13,716,999 14,369,887 652,888 212,862 212,862 13,716,999 14,582,749 865,750 (1,254,118) (1,254,118) - 280,350 261,530 18,820 3,160,000 3,160,000 - 4,561,667 4,561,667 - 8,675,938 8,728,082 (52,144) 16,677,955 16,711,279 (33,324) (2,960,956) (2,128,530) 832,426 2,077,475 1,569,263 (508,212) (1,254,118) (1,254,118) - 833,402 833,402 - 1,656,759 1,148,547 (508,212) (1,304,197) (979,983) 324,214 4,286,709 4,286,709 - 2,982,512 3,306,726 324,214 7 Czipital Projects Funds Variance Favorable/ Budget Actual (Unfavorable) - 5,000 5,000 216,800 274,710 57,910 - 821,589 821,589 216,800 1,101,299 884,499 2,873,836 677,515 2,196,321 2,873,836 677,515 2,196,321 (2,657,036) 423,784 3,080,820 1,254,118 1,397,868 143,750 (5,218,529) (410,376) 4,808,153 (556,846) (556,846) - (4,521,257) 430,646 4,951,903 (7,178,293) 854,430 8,032,723 9,627,515 9,627,515 - 2,449,222 10,481,945 8,032,723 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements June 30, 1999 G) Summary of Significant Accounting Policies The following is a summary of the significant accounting policies of the La Quinta Redevelopment Agency: (a) I'Lind Accountin 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 regulations, 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 Tlie Debt Service Funds account for tax increment revenues, bond proceeds and any related interest income required to be set aside for future debt service. 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". Capital Projects Funds The Capital Projects 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 fuj ids are referred to as "Redevelopment Funds". LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) 1 Summary of Significant Accounting Policies Continued ACCOUNT GROUPS General Lona -Term Debt Account Grou This account group is used to account for all long-term debt of the Agency. The proceeds of the indebtedness are recorded in the Capital Projects (Redevelopment) funds and serve as a financing source for redevelopment expenditures. General Fixed Assets Account GroH2 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 assets 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 LaOuinta 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, and therefore, do not purport to represent the financial position or results of operations of the City of La Quinta, California. LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (1 ) Summary of Significant Accounting Policies, (Continued) (d) Cash and Investments Investments are reported in the accompanying balance sheet at fair 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. (e) Budgetary -Reporting The Agency adopts an annual budget prepared on the modified accrual basis for all of its governmental funds. (f) 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 Financi« Redevelonment Goals and Obiectives 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 which was found to exist in the project areas. 10 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (2) Organization and Tax Increment Financing, (Continued) 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) Cash and Investments Cash and investments held by the Agency at June 30, 1999 consisted of the following: State of California Local Agency Investment Fund $ 4,944,921 Equity in City cash and investment pool 7.031,217 Total cash and investments held by the Agency $11,976,138 Cash and investments held by fiscal agent at June 30, 1999 consisted of the following: United States Treasury Notes $11,049,252 Mutual funds - First American Treasury ObligationsU54,818 � Total cash and investments held by fiscal agent $ 14,204,070 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (3) Cash and Investments, (Continued) The City and its component units are authorized by its investment policy to invest in the following types of investments: Investment Tyne Maximum % Savings/operating accounts 85% Local Agency Investment Fund (LAIF) 35% U.S. government and agency securities 75% Commercial Paper 30% Mutual Funds 20% Certificates of Deposit 60% 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 1 - includes investments that are insured or registered or for which the securities are held by the City or the City's custodial agent (which must be a different institution other than the party through which the City purchased the securities) in the City's name. Investments held "in the City's name" include securities held in a separate custodial or fiduciary account and identified as owned by the City in the custodian's internal accounting records. Category 2 - includes uninsured and unregistered investments for which the securities are held in the City's name by the dealer's agent (or by the trust department of the dealer if the dealer was a financial institution and another department of the institution purchased the securities for the City.) 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 City's name. Category 3 also includes all securities held by the broker-dealer agent of the City (the party that purchased the securities for the City) regardless of whether or not the securities are being held in the C ty's name. 12 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (3) Cash and Investments (Continued) Category 1 2 3 Carrying_ Amount Investments held by fiscal agent: U.S. Treasury Notes $- 11.049,252 - 11,049,252 Investments held by the City not subject to categorization: Investment in State of California Local Agency Investment Fund 4,944,921 Equity in City cash and investment pool 7,031,217 Investments held by fiscal agent not subject to categorization: Investment in mutual funds: First American Treasury Obligations 3,154,818 :"26,180,208 The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage- backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. (4) Notes Receivables In September 1994, the Agency sold certain real property to E.G. Williams Development Corporation for `.[x2,112,847. 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 bear interest at 6% per annum and is due in full on June 15, 2029. At June 30, 1999, the outstanding balance plus accrued interest is $2,556,508. At June 30, 1999, the total outstanding balance of all notes receivable (including other notes aggregating $112,343) is $2,668,851. 13 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (5) Due From and To Other Funds Current interfund receivables and payables balances at June 30, 1999 are as follows: Debt Service Fund: Redevelopment Agency - PA No. 2 Capital Projects Fund: Redevelopment Agency - PA No. 2 (6) Advances to and From Other Funds Current Current Interfund Interfund Receivables Payables $ - 591 591 $591 591 The Agency elected to borrow $511,903, and $39,135 from Project Area No. 1 and Project Area No. 2, respectively, of the Low/Moderate Income Housing Funds to make the ERAF payment in fiscal year ended June 30, 1994. The Redevelopment Agency Project Area No. 1 and project Area No. 2 Debt Service Funds will repay the Low/Moderate Income Housing Special Revenue Funds. The Agency has ten years to repay this loan. The Agency has elected to make repayment in the tenth year (2003-04). 7 Changes in General Fixed Assets The Agency has purchased land which is intended to be used for community facilities. A summary of general fixed assets transactions for the fiscal year ended June 30, 1999 is as follows: Land Balances at July 1, 1998 $11,438,745 14 Additions Deletions (1,205,239) Balances at June 30, 1999 10,233,506 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (81 Propert. 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 which are received from the County within sixty days after year end. Lien date Levy date Due dates Collection dates March 1 June 30 November 1 and February 1 December 10 and April 10 The La Quinta Redevelopment Agency's primary source of revenues comes from property taxes. 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. 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. 15 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (9) General ILonj,aTcrin Debt Changes in general long-term debt for the year ended June 30, 1999, were as follows: Project Area No. 1: Tax allocation bonds Housing tax allocation bonds Pass through agreements payable: Due to County of Riverside Coachella Valley Unified School District Advances from City of La Quinta Project Area No. 2: Tax allocation bonds Housing tax allocation bonds Due to County of Riverside Advances from City of La Quinta Total long-term debt (10) Tax Allocation Bonds Balance at Balance at July 1, 1998 Additions Deletions June 30 1999 $ 39,885,000 - (1,035,000) 38,850,000 17,429,406 - (257,128) 17,172,278 10,322,052 - (205,815) 10,116,237 10,690,125 - (621,976) 10,068,149 4,014,837 371,521 (800,000) 3,586,358 6,750,000 - - 6,750,000 4,710,594 - (67,872) 4,642,722 2,279,540 70,460 - 2,350,000 4,895,239 461 8801 0(, 00,000,) 4,357,11.9 $100,976,793 903,861 (3,987.791) 97,892,863 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 ranges 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. 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, 1999 is $23,090,000. 16 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (10) Tax Allocation Bonds. (Continued) Tax Allocation Refunding Bonds, Series 1994. (Continued) A portion of the bond proceeds, in the amount of $27,922,526, was deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1989 and 1990 Tax Allocation Bonds. As a result, the bonds are considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. As of June 30, 1999, $15,250,000 of 1990 defeased bonds are outstanding. Tax Allocation. Refunding Bonds, Series 1998 - Proiect 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 I and September 1 of each year until maturity. The interest and principal of the bonds are payable from pledged tax increment revenues on a parity with the Agency's previously issued Tax Allocation Refunding Bonds, Series 1994. 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, 1999 is $15,760,000. A portion of the bond proceeds, in the amount of $7,822,592, was deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1991 Tax Allocation Bonds. As a result, the bonds are considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. As of June 30, 1999, $7,205,000 of the defeased bonds are outstanding. 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. 17 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (10) Tax Allocation Bonds, (Continued) Tax Allocation Refunding Bonds, Series 1.998 - Project Area. No. 2, (Continued) 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. 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, 1999 is $6,750,000. A portion of the bond proceeds, in the amount of $5,608,347, was deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1992 Tax Allocation Bonds. As a result, the bonds are considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. As of June 30, 1999, $5,240,000 of the defeased bonds are outstanding. (11) 1995 Housing Tax Allocation Bonds La Quinta Redevelopment Project Areas Nos. 1 and 2 1995 Housing Tax Allocation Bonds, were issued by the Agency, July 1, 1995, in the amount of $22,455,000 to increase, improve and/or preserve the supply of low and moderate income housing in the City. Interest is payable semi-annually on March 1 and September 1 of each year commencing March 1, 1996. Interest payments range from 4% to 6% per annum. Term Bonds maturing on September 1, 2025 are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2011 and on each September 1, thereafter, through September 1, 2025, at a price equal to the principal amount 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, 1999 is $21,815,000. 18 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (12) Due to County of Riverside Project Area No. I Based on an agreement amended December 21, 1993 between the Agency, the City of La Quinta, and the County of Riverside (County), the Agency will pay to the County $10,517,138 from tax increment revenue relating to Project Area No. 1. This agreement is in consideration of the tax revenues lost by the County as a result of the formation of Project Area No. 1. The tax increment is to be paid to the County over a payment schedule through June 30, 2006 in annual amounts ranging from $386,764 to $2,190,473. Unpaid balances accrue interest at 5.5% per annum. The balance at June 30, 1999 is $10,116,235. Proiect 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 mance 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, 1999 is $2,350,000. 13 Notes Payable to Coachella Valle 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 of 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, 1999 totaled $10,068,149. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school buses, expansion or rehabilitation of current facilities. 19 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (14) Advances from the City of La Ouinta 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: Balances at Balances at July 1, 1998 Proceeds Repayments .lune 30 1999 Agency expenditures incurred by the City: Project Area No. 1 $4,014,837 371,521 (800,000) 3,586,358 Project Area No.2 4,895,239 461,880 (I00, 0.000 4,357,119 Totals $8,910,076 833,401 1800 000) 7,943.477 There is no stipulated repayment date established for the City advance. Interest is paid at 10% per year. (15) Debt Service Requirements to Maturity The minimum annual requirements (including sinking fund requirements) to amortize the long-term debt of the Agency as of June 30, 1999 are as follows (advances payable to the City have been excluded since minimum annual debt service payments have not been established): 20 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) 151 Debt Service Reouirements to Maturity. [Continued Principal and interest 36,348,185 34,660,960 14,571,748 43,772,612 10,068,149 15,106,062 154,527,716 Less: Interest (13,258,185) (18,900,960} (7,821.748} 21,957 612) - (2,639.825) (64.578.330} Total Principal j„23.090,000 15 ,760,000 6,750,000 21,815.000 10,068.149 12,466.237 89,949.386 21 Redevelopment Agency RDA RDA PA No. 1 Project Area No. 1 PA No. 2 and No. 2 Pass -throe h Agreement,,, Tax Tax Tax Coachella Allocation Allocation Allocation 1995 Valley Bonds Bonds Bonds Housing Tax Unified County Fiscal Series Series Series Allocation School of Year 1994 1998 1998 Bonds District Riverside Total 1999-00 $ 2,624,696 819,520 420,507 1,592,570 649,927 773,528 6,880,748 2000-01 2,624,885 819,520 417,467 1,592,187 670,817 1,803,705 7,928,581 2001-02 2,620,315 819,520 419,249 1,590,690 684,233 1,903,705 8,037,712 2002-03 2,620,855 819,520 420,747 1,592,820 697,918 1,903,705 8,055,565 2003-04 2,599,465 819,520 417,080 1,588,538 711,877 2,290,473 8,426,953 2004-05 2,612,140 819,520 418,264 1,587,990 726,114 2,290,473 8,454,501 2005-06 2,597,700 819,520 419,167 1,590,890 740,636 2,290,473 8,458,386 2006-07 2,593,456 819,520 419,785 1,645,502 755,449 100,000 6,333,712 2007-08 2,590,816 819,520 420,135 1,646,470 770,558 150,000 6,397,499 2008-09 2,584,232 819,520 420,184 1,645,125 785,968 200,000 6,455,029 2009-10 2,578,160 819,520 419,550 1,641,540 801,688 200,000 6,460,458 2010-11 2,571,868 819,520 418,272 1,640,840 817,722 200,000 6,468,222 2011-12 2,569,442 819,520 416,738 1,641,650 834,076 250,000 6,531,426 2012-13 2,560,155 819,520 419,819 1,638,750 421,166 250,000 6,109,410 2013-14 - 1,457,490 417,516 1,638,300 - 250,000 3,763,306 2014-15 - 1,457,520 414,956 1,635,150 - 250,000 3,757,626 2015-16 - 1,455,730 417,012 1,634,150 - - 3,506,892 2016-17 - 1,456,990 418,556 1,630,150 - - 3,505,696 2017-18 - 1,451,300 414,716 1,632,850 - - 3,498,866 2018-19 - 1,453,530 415,491 1,627,100 - - 3,496,121 2019-20 - 1,453,420 415,631 1,627,750 - - 3,496,801 2020-21 - 1,450,970 415,131 1,624,500 - - 3,490,601 2021-22 - 1,451,050 414,106 1,622,200 - - 3,487,356 2022-23 - 1,448,530 417,425 1,620,550 - - 3,486,505 2023-24 - 1,448,280 415,088 1,619,250 - - 3,482,618 2024-25 - 1,445,170 417,094 1,613,150 - - 3,475,414 2025-26 - 1,444,070 413,444 1,611,950 - - 3,469,464 2026-27 - 1,439,850 414,137 - - 1,853,987 2027-28 1,437,380 414,044 - - - 1,851,424 2028-29 - 1,436,400 413,162 - - - 1,849,562 2029-30 - - 411,494 - - - 411,494 2030-31 - - 413,906 - - - 413,906 2031-32 - - 410,400 - - - 410,400 2032-33 - - 410,975 - - 410,975 2033-34 410,500 - 410.500 Principal and interest 36,348,185 34,660,960 14,571,748 43,772,612 10,068,149 15,106,062 154,527,716 Less: Interest (13,258,185) (18,900,960} (7,821.748} 21,957 612) - (2,639.825) (64.578.330} Total Principal j„23.090,000 15 ,760,000 6,750,000 21,815.000 10,068.149 12,466.237 89,949.386 21 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (16) Pledged 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. 22 REQUIRED SUPPLEMENTARY INFORMATION 23 (This page intentionally left blank) 24 LA QUINTA REDEVELOPMENT AGENCY Required Supplementary Information Year ended June 30, 1999 Risk Mitigation for the Year 2000 Issue The Agency is a component unit of the City of La Quinta. The City is in the process of evaluating its computer systems and other equipment that may contain embedded chips to ascertain which of these might be impacted by a failure to properly recognize and process transactions dated on or after the year 2000. As of June 30, 1999, the unexpended portion of contracts entered into by the City with various vendors to replace or upgrade its computer systems and other equipment to reduce the risk of year 2000 difficulties was approximately $30,950. Additional amounts may be expended for the City's year 2000 assessment, remediation, and testing activities, as well as amounts that may need to be expended after January 1, 2000 to correct problems not previously detected and corrected by the City. Because of the unprecedented nature of the year 2000 issue, it is not possible to provide assurances that the City has or will achieve complete year 2000 compliance, even after completing all planned year 2000 corrective actions and related testing. Nor can the City determine the effect, if any, on Agency operations should entities external to the Agency (other governments, significant vendors, suppliers, service providers, customers, taxpayers, businesses, etc.) fail to achieve year 2000 compliance in a timely manner. An audit is not designed to substantiate the assertions of management with respect to this issue or to evaluate the adequacy of management's plans with respect to this issue. Equipment and systems considered by management to be critical to conducting operations include the following: Data Processing Systems - The data processing systems under evaluation include Accounting Systems, Animal License Software, Builders Square Program, Questas City Clerk Program, and the Code Track Program. As of June 30, 1999, the Agency has assessed one hundred percent of their data processing systems and identified options for replacing obsolete systems or locating new vendors to correct non-compliant systems. Ninety percent of data processing hardware and software systems have been tested for year 2000 compliance. Roughly ninety-five percent of upgrades have been implemented for non-compliant data processing systems, with the remaining five percent to be completed by July 1999. Non -Data Processing Systems - The non -data processing systems under evaluation include Heating and Air Conditioning, Phone Systems, Mobile Phones, Street Lights, Traffic Signals, Irrigation Software, Stadium Lights, Drainage Pumps, and the Civic Center Alarm System. As of June 30, 1999, the Agency has assessed ninety percent of non -data processing systems for year 2000 compliance. The systems still to be assessed for year 2000 compliance include mobile phones, traffic signals and the Civic Center alarm system. Assessment of non -data processing systems will continue through July 1999. The Agency has identified options for replacing systems or locating new vendors to correct non-compliant systems for ninety percent of non -data processing systems. Seventy percent of non -data processing systems have been tested for year 2000 compliance, with the exception of traffic signals, Civic Center alarms, and mobile phones. As of June 30, 1999, fifteen percent of non -data processing systems have been upgraded, and the remaining eighty-five percent will be upgraded by September 1999. 25 (This page intentionally left blank) 26 SUPPLEMENTAL DATA 27 Assets Cash and investments Cash with fiscal agent Accounts receivable Interest receivable Notes receivable Due from other funds Advances to other funds Total assets Liabilities and Fund Balances Liabilities: Accounts payable Deposits payable Due to other funds Due to the City of La Quint Total liabilities Fund balances: Reserved for: Bond projects Advances to other. funds Notes receivable Unreserved: Designations Undesignated Total fund balances Total liabilities and fund balances LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Balance Sheet June 30, 1999 Low/ Low/ 8,129,831 511,903 39,135 - - 551,038 551,038 Moderate Moderate Low/ Low/ - - 6,003,850 5,211,172 Income Income Moderate Moderate 3,346,765 2,151,326 14,609,487 16,232,069 Housing- Housing- Bond- Bond- Totals PA No. 1 PA No. 2 PA No. 1 PA No. 2 1999 1998 $ 3,167,751 2,782,700 - - 5,950,451 5,304,639 - - 3,839,690 2,270,504 6,110,194 8,129,831 44,006 - - - 44,006 23,301 22,659 29,209 140,046 37,185 229,099 34,626 2,556,508 - - - 2,556,508 2,420,750 - - - - - 62,192 511,903 39,135 - - 551,038 551,038 $ 6,302,827 2,851,044 3,979,736 2,307,689 15,441,296 16,526,377 $ 18,935 7,919 6,171 7,782 40,807 54,988 15,596 - - - 15,596 14,426 - - - - - 62,192 15 10 626,800 148,581 775,406 162,702 34,546 7,929 632,971 156,363 831,809 294,308 - - 3,839,690 2,270,504 6,110,194 8,129,831 511,903 39,135 - - 551,038 551,038 2,556,508 - - - 2,556,508 2,420,750 3,199,870 2,803,980 - - 6,003,850 5,211,172 - - (492,925) (119,178) (612,103) (80,722) 6,268,281 2,843,115 3,346,765 2,151,326 14,609,487 16,232,069 $ 6,302,827 2,851,044 3,979,736 2,307,689 15,441,296 16,526,377 28 LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Statement of Re4,enucs, Expenditures and Changes in Fund Balances Year ended June 30, 1999 29 Low/ Low/ Moderate Moderate Low/ Low/ Income Income Moderate Moderate Housing- Housing- Bond- Bond- Totals PA No. 1 PA No. 2 PA No. 1 PA No. 2 1999 1998 Rc;yciwes: Taxes $ 2,575,456 1,017,016 - - 3,592,472 3,253,847 Developer fees 15,911 622,304 - - 638,215 11,127 Investment income 275,497 139,342 490,032 139,915 1,044,786 679,976 Rental income 414,236 - - - 414,236 395,414 Gain (loss) on sale of land 195,945 - - - 195,945 (22,678) Total revenues 3,477,045 1,778,662 490,032 139,915 5,885,654 4,317,686 Expenditures: Current: Planning and development 2,127,114 471,575 45,011 60,325 2,704,025 2,729,873 Capital projects - - - - - 2,691,777 Total expenditures 2,127,114 471,575 45,011 60,325 2,704,025 5,421,650 Excess (deficiency) of revenues over (under) expenditures 1,349,931 1,307,087 445,021 79,590 3,181,629 (1,103,964) Other financing sources (uses): Operating transfers in - - - - - 3,280,377 Operating transfers out (1,099,888) (202,749) - - (1,302,637) (5,364,051) Transfer to the City of La Quinta - - (2,392,558) (1,109,016) (3,501,574) - Total other financing sources (uses) (1,099,888) (202,749) (2,392,558) (1,109,016) (4,804,211) (2,083,674) Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 250,043 1,104,338 (1,947,537) (1,029,426) (1,622,582) (3,187,638) Fund balances at beginning of year 6,018,238 1,738,777 5,294,302 3,180,752 16,232,069 19,419,707 Fund balances at end of year $ 6,268,281 2,843,115 3,346,765 2,151,326 14,609,487 16,232,069 29 LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Balance Sheet June 30, 1999 30 Redevelopment Redevelopment Totals Agency -PA No. 1 Agency -PA No. 2 1999 1998 Assets Cash and investments $ 2,996,002 645,334 3,641,336 5,272,572 Cash with fiscal agent 183,946 - 183,946 74,235 Accounts receivable - - - 11 Interest receivable 26,453 11,012 37,465 - Due from other governments 11 - 11 - Total assets $ 3,206,412 656,346 3,862,758 5,346,318 Liabilities and Fund Balances Liabilities: Accounts payable $ 4,403 - 4,403 4,340 Accrued expenses - - - 504,731 Due to other funds - 591 591 - Advances from other funds 511,903 39,135 551,038 551,038 Total liabilities 516,306 39,726 556,032 1,060,109 Fund balances: Reserved for: Debt service 2,690,106 616,620 3,306,726 4,286,709 Total fund balances 2,690,106 616,620 3,306,726 4,286,709 Total liabilities and fund balances $ 3,206,412 656,346 3,862,758 5,346,818 30 LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1999 Redevelopment Redevelopment Agency -PA No. 1 Agency -PA No.2 Totals 1999 1998 Revenues: Taxes $ 10,301,824 4,068,063 14,369,887 13,015,387 Investment income 131,849 81,013 212,862 110,618 Total revenues 10,433,673 4,149,076 14,582,749 13,126,005 Expenditures: Current: Planning and development 193,047 68,483 261,530 2033161 Debt service: Principal 2,092,128 1,067,872 3,160,000 1,675,000 Interest 3,578,729 982,938 4,5613667 4,584,546 Payments under pass- through obligations 5,882,820 2,8453262 8,728,082 9,255,220 Total expenditures 11,746,724 4,964,555 16,711,279 15,717,927 Excess (deficiency) of revenues over (under) expenditures (1,313,051) (815,479) (2,128 530 2,591 922) Other financing sources (uses): Operating transfers in 1,366,514 202,749 1,569,263 2,957,882 Operating transfers out (511,509) (742,609) (1,254,118) (910,721) Proceeds of advances from City 371,521 461,881 833,402 810,006 Total other financing sources (uses) 1,226,526 (77,979) 1,148,547 2,857,167 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (86,525) (893,458) (979,983) 265,245 Fund balances at beginning of year 2,776,631 1,510,078 4,286,709 4,021,464 Fund balances at end of year $ 2,690,106 616,620 3,306,726 4,286,709 31 LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Balance Sheet June 30, 1999 Liabilities and Fund Balances Liabilities: Accounts payable Redevelopment Redevelopment Totals 28,566 Agency -PA No. l Agency -PA No.2 1999 1998 Assets City of La Quinta 47 24 71 Cash and investments $ 1,000,971 1,383,380 2,384,351 1,444,826 Cash with fiscal agent 7,307,105 602,825 7,909,930 7,878,824 Accounts receivable - 60,900 60,900 81,258 Interest receivable 9,974 13,645 23,619 142,956 Notes receivable - 112,343 112,343 108,217 Due from other funds - 591 591 - Total assets $ 8,318,050 2,173,684 10,491,734 9,656,081 Liabilities and Fund Balances Liabilities: Accounts payable $ 6,196 3,522 9,718 28,566 Due to the City of La Quinta 47 24 71 - Total liabilities 6,243 3,546 9,789 28,566 Fund balances: Reserved for: Bond projects 7,307,105 602,825 7,909,930 7,878,824 Notes receivable - 112,343 112,343 108,217 Unreserved: Designations 1,004,702 1,454,970 2,459,672 1,640,474 Total fund balances 8,311,807 2,170,138 10,481,945 9,627,515 Total liabilities and fund balances $ 8,318,050 2,173,684 10,491,734 9,656,081 32 LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1999 Redevelopment Redevelopment Agency -PA No.1 Agency -PA No.2 Revenues: 854,430 Developer fees $ - Investment income 164,275 Litigation settlement proceeds 821,589 Total revenues 985,864 Expenditures: Current: Planning and development 356,105 Total expenditures 356,105 Excess (deficiency) of revenues over (under) expenditures 629,759 Other financing sources (uses): Operating transfers in 655,259 Operating transfers out (266,626) Transfers from the City of La Quinta - Transfer to the City of La Quinta (12,261) Proceeds of bonds (net of issuance costs) - Payments to refunded bond escrow agent - Total other financing sources (uses) 376,372 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 1,006,131 Fund balances at beginning of year 7,305,676 Fund balances at end of year $ 8,311,807 33 5,000 110,435 115,435 321,410 321,410 Totals 1999 1998 5,000 - 274,710 288,437 821,589 204 1,101,299 288,641 677,515 651,832 677,515 651,832 (205,975) 423,784 (363,191) 742,609 1,397,868 910,721 (143,750) (410,376) (874,208) - - 25,570 (544,585) (556,846) - 21,565,688 (13,430,939) 54,274 430,616 8,196,832 (151,701) 854,430 7,833,641 2,321,839 9,627,515 1.793,874 2,170,138 10,481,945 9,627,515 CONRADAND ASSOCIATES, L.L.P Board of Directors La Quinta Redevelopment Agency La Quinta, California CERTIFIED PUBLIC ACCOUNTANTS 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92614 (949) 474-2020 Fax (949) 263-5520 REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A UDI? ING STANDARDS We have audited the financial statements of the La Quinta Redevelopment Agency as of and for the year ended June 30, 1999, and have issued our report thereon dated August 13, 1999. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the financial statements of the La Quinta Redevelopment Agency are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Such provisions include those provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the La Quinta Redevelopment Agency's internal control over financial "reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial repot/ ing and its operation that we consider to be material weaknesses. 34 MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Board of Directors La Quinta Redevelopment Agency Page Two This report is intended for the information of the Audit committee, management, and the State Controller. However, this report is a matter of public record and its distribution is not limited. August 13, 1999 �jyyl�r4 unl /�rsr�ti4� L. G . ;D 35