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FY 1992-1993 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year Ended June 30, 1993 (with Independent Auditors' Report Thereon) CERTIFIED f UBLICACCOUNTAKS LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year Ended June 30, 1993 (with Independent Auditors' Report Thereon) LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1993 TABLE OF CQNTENTS Page Independent Auditors' Report I Financial Statements: • Combined Balance Sheet - All Fund Types and Account Groups 2 • Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 3 • Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Governmental Fund Types 4 a Notes to Financial Statements: Note 1 - Summary of Significant Accounting Policies 5 Note 2- Organization and Tax Increment Financing 7 Note 3- Cash and Investments 8 Note 4- Property Taxes 10 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- Tax Allocation Bonds, Series 1992 14 Note 10 - Due to County of Riverside 15 Note 11 - Notes Payable to Desert Sands Unified School District 15 Note 12 - Notes Payable to Coachella Valley Unified School District 15 Note 13- Notes Payable to Individuals 16 Note 14 - Advances from the City of La Quinta 16 Note 15 - Pledged Tax Revenues 16 Note 16- Changes in General Fixed Assets 16 Note 17 - Commitments under Development Agreements 17 Note 18- Contingencies 17 Supplemental Information: Special Revenue Funds: * 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, 1993 TABLE OF CONTENTS. (CUNTINUD) Debt Service Funds: Pace • 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 • Tax Increment Shift to Educational Revenue Augmentation Fund 24 Independent Auditors' Opinion on Compliance with Audit Guidelines for California Redevelopment Agencies 25 OCJ. E A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Board of Directors La Quinta Redevelopment Agency La Quinta, California CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT A[]DITQRS' 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, 1993, 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, 1993, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. 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. September 8, 1993 -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 REDEVELOPhiEEI9T AGENCY Combined Balance Sheet -All Fund Types and Account Groups June 30, 1993 Account Groups vernmental Fund Types General General Totals Special Debt Capital Fixed Long -Term _(_Memorandum Only) Revenue Service Prolects Assets Debt 1993 1992 Assets and ilher debits Cash and investments (note 3) $4,875.983 1,846,144 3,434,311 - - 10,156,438 20,802,230 Cash with fiscal agent (note 3) - 1.892.568 5,075.978 - - 6.968.546 1,554,708 Accounts receivable - - 3.973 - - 3,973 1,299 Notes receivable 127,520 - - - - 127,520 - Due from other funds - - 1.928,918 - - 1,928,918 - Due from other governments - 57,059 601,409 - - 658,468 688,340 Property, plant and equipment (note 16) - - - 5.879,910 - 5,879,910 5,879,910 Amounts available in debt service funds - - - - 2.167,172 2,167,172 5,024,697 Amount to be provided for retirement of long-term debt - - - - 68,305,074 68,305,074 64,225,4L6 Total assets and other debits 3.795.771 11,044.589 5.879.910 7D.47 .246 26..�96,QGg 98.176,660 Liabilities, fun¢guitr. and -W her credits Liabilities: Accounts payable $ - - 424,827 - - 424,827 - Accrued expenses - - 547 - - 547 - Retentions payable - - - - - - 20,698 Claims and settlements payable (note 18) - - - - 2,000,000 2,000,000 - Due to other funds - 1,337,422 591,496 - - 1,928,918 - Advances payable to the City of La Quints. (nDte 14) - - - - 5,291,736 5,291,736 6,166,497 Obligations under pass-through agreements (notes 10, 11, and 12) - 291,177 - - 21,432.310 21,723,487 26,097,127 Tax allocation bonds payable (notes 6, 7, 8 and 9) - - - - 40,085,000 40,085,000 35,000,000 Notes payable (note 13) - - - - 1.663.200 1,663,200 2,206,500 Total liabilities - 1,628,599 1,016,870 - 70,472,246 73,117,715 69-490,822 Fund equity and other credits: Investment in general fixed assets - - - 5,879,910 - 5,879,910 5,879,910 Fund balances: Reserved for: Debt service - 2,167,172 - - - 2,167,172 22,805,928 Unreserved: Designated for special projects 5.003,5Q3 - 10,027.719 - - 15,031,222 Total fund equity and other credits 5,003,503 2,167,172 10,027,719 5,879,910 - 23,07$.344 28,685,838 Total liabilities, fund equity, and other credits 5.{)+133.503 3.795.771 11,044.582 5.879.910 70J72,246 26_,_ 176,660 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, 1993 Revenues: Tax increment Intergovernmental Developer fees 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 Mandated education contribution Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Transfers to the City of La Quinta Proceeds of bonds (net of bond issuance costs of $254,584) 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 Fund balances at end of year Totals Special Debt Capital (Memorandum Only)— Revenue Service Protects 1993 1992 $2,068,455 10,646,741 - 12,715,196 11,890,309 - - 225,605 225,605 - 75,464 - - 75,464 -- 120,110 183,673 498,279 802,062 810,987 28,472 9,249 37,721 117,996 2,292,501 10.830,414 733,133 13,856,048 12,819,292 45,861 10,902 1,421,255 1,478,018 727,873 1,484,635 - -- 1,484,635 552,620 256,840 - 6,981,405 7,238,245 6,890,999 - 760,000 - 760,000 550,000 - 2,747,292 - 2,747,292 2,248,448 - 9,851,766 - 9,851,766 6,150,707 - 558,297 - 558,297 505,696 8,152,245 - 8,152,245 948,267 1,587,351 1,587,351 - 1,787,336 23,667,853 8,442.660 33,857,$49 18,$74,610 505,165 (12,837,439) (7,669,527) (20,001,801) (5,755,318) - 9,979,914 - 9,979,914 1,027,970 (603,617) -- (9,376,297) (9,979,914) (1,027,970) (475,168) (475,168) - - - 5,590,416 5,590,416 8,408,935 517,779 - 8,761,240 9,279,019 9,644,862 (162,461) (85 838) 9,979,914 4,500,191 14,_394.267 17,891,336 419,327 (2,857,525) (3,169,336) (5,607,534) 12,136,018 4 5,024,697 13 1 22,805,228 10,669,910 $5,003,503 17.198.394 22.805.928 See accompanying notes to financial statements. -3- Revenues: Tax increment Intergovernmental Developer fees Interest Miscellaneous Total revenues Expenditures: General government Planning and development Capital projects Debt service: Principal Interest Payment of advances ,A Interest accrued on advances from City Payment under pass through agreements Mandated education contribution Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Transfers to the City of La Quinta Proceeds of bonds payable Proceeds of advances from City Total other financing sources (uses) Excess (deficiency) of revenues and other sources over (under) expenditures and other uses Fund balances at beginning of year Fund balances at end of year 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, 1993 Special Revenue Funds Debt Service.. Funds Capital Projects Funds 256,840 67 (475,168) - - - - - - 3,600,000 5,590,416 1,990,416 Variance- 7,779 - - - 4,441,247 Variance- 4,319,993 Variance - - (85,838) (85,838) Favorable 4,500,191 (3,541,056) Favorable 136,262 419,327 Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) $1,994,560 2,068,455 73,895 8,988,905 10,646,741 1,657,836 - -- - - - - - - - 693,150 225,605 (467,545) - 75,464 75,464 - - - - - - 150,200 120,110 (30,090) 620,400 183,673 (436,727) - 498,279 498,279 28,472 28,472 - 9,249 9,249 2,144,760 2,292,501 147,741 9,609,305 10,830,414 1,221,109 693,150 733,133 39,983 48,611 45,861 2,750 1,702,980 1,484,635 218,345 256,907 256,840 67 2,008,498 1,787,336 221,162 136,262 505,165 368,903 - 10,902 (10,902) 760,000 760,000 - 6,986,385 2,747,292 4,239,093 - 9,851,766 (9,851,766) 558,297 (558,297 1,225,915 8,152,245 (6,926,330 l 587,3SI (1,587,351) 8,972,300 23,667,853 (14,695,553) 637,005 (12„837,439) (13,474,444) 9,979,914 9,979.914 404,875 1,421,255 (1,016,380) 8,329,522 6,981,405 1,348,117 8,734,397 8,402,660 331,737 (8,041,247) (7,669,527) 371,720 - (603,617) (603,617) - - - - (9,376,297) (9,376,297) - - - - - - (475,168) (475,168) - - - - - - 3,600,000 5,590,416 1,990,416 - 517,77915 7,779 - - - 4,441,247 8,761,240 4,319,993 - (85,838) (85,838) - 9.979,914 9,979,914 8,041,247 4,500,191 (3,541,056) 136,262 419,327 283,065 637,005 (2,857,525) (3,494,530) - (3,169,336) (3,169,336) 4,5£4,176 4,584,176 S72D.438 5.003.503 - 283065 5,024,697 5,024,697 13,197,055 5.661.702 2.167.172 [3. 94.530) ]3.19T,055 13,197,055 - L*169.336) 10.027.719 See accompanying notes to financial statements. LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements June 30, 1993 (1) Summary of Significant Accounting Policies The following is a summary of the significant accounting policies of the La Quinta Redevelopment Agency. (a) Fund Ac!�4unting 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: GQVERNMENTALFUNDS Special RCvenMe 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 Finds The Debt Service Funds account for tax increment revenues and 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". Capital Project Funds 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- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 1mm f i Hifi n A n in P li i n in ) ACCOUNT GROUPS General Long -Term Debt Accpot rou This account group is used 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 Fixe Assets Account Group 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 Account] 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 pinta 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- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 1 Summaa of Significant Accounting Policies. n in (d) Cash and lnyg5tmenjs 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) B11dgeta1:y Re rain 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, 1993, 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 T©tats 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- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (2) Organization and Tax Increment Financing, (Continued) Redevelonment Proiect Ar 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 Incremgl3l FinInCing 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 andInvestments Cash and investments held by the La Quinta Redevelopment Agency at June 30, 1993 consisted of the following: Carrying Amount Deposits $(2,802,944) Investments 19.927.928 Total $17.124.984 -8- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) C h nd Inv m n(Continued) Cash and investments are classified in the accompanying combined balance sheet as follows: Cash and investments $10,156,438 Cash with fiscal agent 6.968.546 Total cash and investments $17,121,28-4 ,124.984 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 Bankers' acceptances 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 to 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. 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 1 - includes deposits that are insured or collateralized with securities held by the Agency or its agent in the Agency's name. Category 2 - 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. Category 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: -9- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (3) Cash and lnvestmenjs. (Continued) Form of Deposit Demand deposits (Continued) Category Bank 1 2 3 Balance Book Balanc? 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 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 - 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. Form of Investment Mutual funds Local Agency Investment Fund Total investments Carrying Market Amount Value $ 6,968,546 6,968,546 12.959.382 12.959.382 The above investments are not classified in risk categories because they do not represent an investment in securities. (4) Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes are recorded initially in a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City of La Quinta accrues only those taxes which are received from the County within sixty days after year end. -10- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (4) Property Taxes. (CQntlnuQd) Lien date March 1 Levy date June 30 Due dates November 1 and February 1 Collection dates December 10 and April 10 The La Quinta Redevelopment Agency's primary sources of revenue 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 of elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. (5) General Lone -Term Debt Changes in general long-term debt for the year ended June 30, 1993, were as follows: Project Area No. 1: Tax allocation bonds Pass through agreements payable: Due to County of Riverside Desert Sands Unified School District Coachella Valley Unified School District Notes payable - individuals Advances payable from City of La Quinta Claims and settlements payable Project Area No. 2: Tax allocation bonds Notes payable - individuals Advances payable from City of La Quinta Total long-term debt Balance at Balance at July 1. 1992 Additions Deletions .lune 30. 1993 $35,000,000 8,219,503 3,254,880 14,402,793 885,885 - 760,000 34,240,000 698,044 4,248,219 4,669,328 180,000 344,610 730,081 304,677 2,672,002 7,330,235 9,881,904 3,090,270 13,672,712 581,208 120,333 - 2,000,000 - 2,000,000 - 5,845,000 - 5,845,000 1,320,615 - 238,623 1,081,992 3.494,495 1,948,783 271,875 $69.250.173 18.002.062 16.779.989 -11- 5.171.403 LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (5) Generai Long, -Terra Debt, (Continued) Principal & Interest 14,381,997 36,384,232 15,832,167 12,524,333 3,090,270 13,672,712 2,037,420 97,923,131 Less: Interest (7,141.99 )(17,909,232) (7.307,167) (6,679.333) - - (374,220)(39,411,949) Total Principal S 7,240.000 18 4OOU $ 525_,_044 45,044 13,67Z_. 1.563.2005,11? • $90,000 each to be paid in 1993-94 and 1994-95 for project area #2. -12- *Pass-through Redevelopment Agency RDA Agreements PA #1 Notes Pr9iggl Area No. 1 PA #2 Desert Coachella Payable Tax Tax Tax Tax Sands Valley to Year Allocation Allocation Allocation Allocation Unified Unified Individuals Ending Series Series Series Series School School (PA #1 43% June 30 1989 1990 1991 1992 District District PA #2 57X) Total 1993-94 $ 726,263 1,841,535 728,175 428,770 524,050 776,353 565,488 5,590,634 1994-95 729,270 1,836,768 725,743 472,457 661,560 624,473 528,066 5,578,337 1995-96 726,225 1,839,850 722,675 493,857 628,000 474,517 490,644 5,375,768 1996-97 727,100 1,835,555 723,810 503,607 707,650 526,560 453,222 5,477,504 1997-98 726,690 1,833,155 723,988 502,127 569,010 580,683 - 4,935,653 1998-99 724,695 1,832,913 723,210 510,065 - 621,976 - 4,412,859 1999-00 721,895 1,829,532 721,475 501,805 - 649,927 - 4,424,634 2000-01 722,260 1,827,948 723,625 508,265 - 670,817 - 4,452,915 2001-02 720,400 1,828,158 724,500 503,500 - 684,233 - 4,460,791 2002-03 721,200 1,825,171 719,259 508,100 - 697,918 - 4,471,648 2003-04 720,000 1,823,639 722,744 501,550 - 711,877 - 4,479,810 2004-05 716,800 1,823,227 719,794 509,490 - 726,114 - 4,495,425 2005-06 716,400 1,818,764 720,409 505,890 - 740,636 - 4,502,099 2006-07 718,400 1,811,210 719,431 506,400 - 755,449 - 4,510,890 2007-08 712,800 1,808,810 716,860 505,650 - 770,558 - 4,514,678 2008-09 714,000 1,803,640 717,535 503,850 - 785,968 - 4,524,993 2009-10 712,800 1,800,070 716,297 506,000 - 801,688 - 4,536,855 2010-11 708,000 1,792,470 713,080 506,750 - 817,722 - 4,538,022 2011-12 709,600 1,789,999 712,720 506,100 - 834,076 - 4,552,495 2012-13 707,199 1,781,818 714,959 509,050 - 421,167 - 4,134,193 2013-14 - - 709,799 505,250 - - - 1,215,049 2014-15 - - 712,079 505,050 - - - 1,217,129 2015-16 - - - 503,100 - - - 503,100 2016-17 - - - 509.400 - - - 509,400 2017-18 508.250 508.250 Principal & Interest 14,381,997 36,384,232 15,832,167 12,524,333 3,090,270 13,672,712 2,037,420 97,923,131 Less: Interest (7,141.99 )(17,909,232) (7.307,167) (6,679.333) - - (374,220)(39,411,949) Total Principal S 7,240.000 18 4OOU $ 525_,_044 45,044 13,67Z_. 1.563.2005,11? • $90,000 each to be paid in 1993-94 and 1994-95 for project area #2. -12- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 6) Tax Allocation Bonds. Series 1989 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. 'L. 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 $735,518, the maximum annual debt service amounts, is to be set aside in reserve funds. A total of $752,569 was set aside at June 30, 1993. The amount of principal outstanding on the 1989 Tax Allocation Bonds at June 30, 1993 was $7,240,000. 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 1 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 to 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, 1993 was $18,475,000. -13- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (8) Tax Allocation Bonds. Series 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 $744,967 was set aside at June 30, 1993. The amount of principal outstanding on the 1991 Tax Allocation Bonds payable at June 30, 1993 was $8,525,000. (9) Tax Allocation Bonds, Series 1992 La Quinta Redevelopment Project Tax Allocation Bonds, Series 1992, were issued by the Agency, December 1, 1992, in the amount of $5,845,000 for Project Area No. 2. Interest is payable semi-annually on June 1 and December 1 of each year, commencing June 1, 1993. The interest on and principal of the bonds are payable solely from pledged tax increment revenues. Interest payments range from 3.75% to 6.90% per annum. The bonds maturing on or before December 1, 1999 shall not be subject to optional redemption prior to maturity; however, bonds maturing on or after December 1, 2000 may be called before maturity and redeemed in whole or in part on any interest payment date thereafter at a redemption price equal to the principal amount, plus accrued interest, plus a premium of 1% to 2%. The bonds maturing on or after December 1, 1996 are subject to mandatory redemption in part without premium on June 1, 1996. Under the terms of the bond, the maximum annual debt service or 10% of the principal amount of the bonds 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 account. The principal balance of outstanding bonds at June 30, 1993 was $5,845,000. -14- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 1O Due to County 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 the amounts allocated to the low income housing fund. The payments 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, 1993 is $4,669,328 including $698,044 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 is to set aside the 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, 1993. Certain aspects of the Agency's agreement with the County are currently being re -negotiated. 11 Notes PayablgZ 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 identified tax increment revenue associated with the District for Project Area No. I. The tax increment is paid to the District over a payment schedule through 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, 1993 totaled $3,090,270. 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. 12 Nate Payable to Coachella Valley Unified School District An agreement was entered into in 1991 between the Agency, the City of La Quinta and the Coachella Valley Unified School District (District) which provides for the payment to the District 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 is paid to the district over a payment schedule through 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, 1993 totaled $13,672,712. 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. -15- LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) 13 Notgt5 Paygble 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, 1993 for Project Area No 1. is $581,208 and $1,081,992 for Project Area No. 2. (14) Advances from the City of La Qginta 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, 1992 Proceeds Repayments June 30, 1993 Agency expenditures incurred by the City: Project Area No. 1 $2,672,002 7,330,235 9,881,904 120,333 Project Area No. 2 3.494.495 1.948.783 271.875 5.171.403 Totals $6.166-497 9.279.018 10,15-3.774 5.291.736 (151 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. (1.6) 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. A summary of general fixed assets transactions for the fiscal year ended June 30, 1993 is as follows: Balances at. Balances at July 1, 1992 Additions Deletions June 30, 1993 Land 5.879.91 Q -16- -87� 9.91Q LA QUINTA REDEVELOPMENT AGENCY Notes to Combined Financial Statements (Continued) (17) Commitments under Development Agreements The Agency has entered into an Owner Participation Agreement (OPA) with Washington/Adams, a California limited partnership. Washing;ton/Adams is responsible for the development of a retail center located at the intersection of Washington Avenue and Highway 111. Certain infrastructure improvements will be necessary as a result of this retail development project. Because of the regional benefit of these improvements, the Agency has agreed to contribute toward the cost of certain of the infrastructure improvements up to a maximum cost of $3,156,000. (18) 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. On February 5, 1992, the receiver for Iowa Trust, 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 Iowa Trust. On July 30, 1993 the Agency settled the above described civil action and agreed to pay Iowa Trust $2,000,000. The Agency also agreed to pay Iowa Trust the first $500,000 recovered by it in claims or actions against third parties arising out of the fraud scheme. After that, the Agency will split, fifty/fifty (50/50), all recoveries from third party actions up to such time as Iowa Trust receives from the Agency a total of $5,300,000. -17- LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Balance Sheet June 30, 1993 Low Income Low Income Housing Housing Project Project Totals Area #1 Area #2 1993 1992 Assets Cash and investments $3,957,532 918,451 4,875,983 4,584,176 Notes receivable 127,520 127,5220 - Total assets $4,085,052 918,451 5.003,503 4. 8 175 Fund Balances Fund balances: Unreserved: Designated for special projects 4,085,052 Total liabilities and fund balances $4.085,,052 -18- 918,451 5,003,503 4,584,176 LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1993 Low Income Low Income Housing Housing Project Project Totals Area #1 Area #2 1993 1992 Revenues: Tax increment $1,664,567 403,888 2,068,455 1,903,385 Developer fees 75,464 - 75,464 - Interest 102,247 17,863 120,110 74,739 Miscellaneous 28,472 - 28_,472 7.996 Total revenues 1,870,750 421,751 2,292,501 1.986,120 Expenditures: and other sources over General government - 45,861 45,861 3,904 Planning and development 1,484,635 - 1,484,635 552,620 Capital projects 256.840 - 256,840 443,198 Total expenditures 1.741.475 45.861 1,787,336 999,722 Excess (deficiency) of revenues over expenditures 129,275 375,890 505,165 986,398 Other financing sources (uses): Operating transfers in - - - 203,306 Operating transfers out (603,617) - (603,617) - Proceeds of advances from City 471.918 45,861 517,779 824.730 Total other financing sources (uses) (131,699) 45,861 (85,838) 1,028,036 Excess (deficiency) of revenues and other sources over expenditures and uses (2,424) 421,751 419,327 2,014,434 Fund balances at beginning of year 4,087,476 4%.700 4 884 17656742 Fund balances at end of year -19- LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Balance Sheet June 30, 1993 Assets Cash and investments Cash with fiscal agent Due from other governments Total assets Liabilities an Fpnc Balances Liabilities: Due to other funds Obligations under pass- through agreements Total liabilities Fund balances: Reserved for debt service Total liabilities and fund.balances Redevelopment Redevelopment Agency Agency Totals PA #1 PA #2 1993 1992 $ - 1,846,144 1,846,144 3,385,953 1,498,030 394,538 1,892,568 1,554,708 42,453 14,606 57.059 3-03.9$7 $1.540.483 2.255.288 3.795.771 5,244.648 $1,337,422 - 1,337,422 - 132,661 158,516 291,177 219,951 1,470,083 158,516 1,628,599 219,951 70,400 2,096,772 2,167,172 5,024,697 -20- LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1993 Revenues: Tax increment Interest Total revenues Expenditures: General government Debt service: Principal Interest Repayment of advances from City Interest accrued on advances from City Payment under pass-through obligations Mandated education contribution 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 Fund balances at end of year Redevelopment Redevelopment Agency Agency PA #1 PA #2 $ 9,031,189 1,615,552 80.265 103.408 9.111,45_4 1,718,960 Total 1993 1992 10,646,741 9,986,924 183.673 420,921 10,830,414 10.407.845 10,902 - 10,902 25 760,000 - 760,000 550,000 2,550,294 196,998 2,747,292 2,248,448 9,629,729 222,037 9,851,766 6,150,707 131,504 426,793 558,297 505,696 7,435,947 716,298 8,152,245 948,242 1,437,383 149,968 1,587,351 21, 55,759 1,712.094 23,667,853 10,403,,_118 (12,844,305) 6.866 (12,837,439) 4.727 9,573,855 406,059 9,979,914 824,664 - - - (259,550) 508,456 9,573,855 _406,059 9,979,914 1,073,570 (3,270,450) 3,340,850 $ 70.400 -21- 412,925 (2,857,525) 1,078,297 1.683.847 5.024,697 3,946,400 2.096.772 2,,167 5.024.697 LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Balance Sheet June 30, 1993 Redevelopment Redevelopment Agency Agency Totals PA #1 PA #2 1993 1992 Assets Cash and investments $3,434,311 - 3,434,311 12,832,101 Cash with fiscal agent - 5,075,978 5,075,978 - Accounts receivable 3,973 - 3,973 1,299 Due from other funds 1,928,918 - 1,928,918 - Due from other governments 375,804 _ 225,605 601x409 384.353 Total assets $5.743.006 5.301.583 11.044.589 13.21,7. 753 Liabilities n Fun"alances Liabilities: Accounts payable $ 424,827 - 424,827 - Accrued expenses 401 146 547 - Retentions payable - - - 20,698 Due to other funds - 591,46 591=49 Total liabilities 425,229 591,642 1,016,870 20,698 Fund balances: Unreserved: Designated for special projects 5.317,778 4,709.941 10.027.719 13,197,055 Total liabilities and fund balances $5.743.006 �JQ1.583 11_044.589 13.217.753 -22- LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1993 Revenues: Intergovernmental Interest Miscellaneous Total revenues Expenditures: General government Capital projects Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Redevelopment Redevelopment Agency Agency Totals PA #1 PA #2 1993 1992 $ - 225,605 225,605 -- 427,151 71,128 498,279 315,327 9.249 - 9,249 110.000 436,400 296,733 733,133 425,327 1,008,623 412,632 1,421,255 723,969 4.639,783 2,341,622 6,981,405 6,447 801 5,648,406 2,754,254 8,402,660 7.171.770 (5,212,006) (2,457,521) (7,669,527) (6,746,443) Transfers to City (475,168) - (475,168) - Operating transfers out (8,970,238) (406,059) (9,376,297) (768,420) Proceeds of bonds payable - 5,590,416 5,590,416 8,408,935 Proceeds of advances from City 6,858,317 1,902,923 8,761,240 8,311,676 Loss on investments - (162,461) Total other financing sources (uses) (2,587,089) 7,,487,280 Excess (deficiency) of revenues and other sources over expenditures and other uses (7,799,095) 4,629,759 Fund balances at beginning of year 13,116,873 80.182 Fund balances at end of year $ 5.317.778 4.709.941 -23- 4500,191 15,789,730 (3,169,336) 9,043,287 13,197,055 4,153,768 10-027.719 LA QUINTA REDEVELOPMENT AGENCY Supplemental Schedule of Tax Increment Shift to Educational Revenue Augmentation Fund Year ended June 30, 1993 Total Tax Increment to be shifted to the Educational Revenue Augmentation Fund (ERAF) per State Department of Finance (DOF) letter dated October 1, 1992 Funding sources: Redevelopment Agency: Agency tax increment Other agency funds Total agency funds Agency borrowing: From current 20% low and moderate income housing funds From legislative body Total borrowed funds $1,587,351 Total tax increment shift to ERAF -24- _1,587,351 �-"A-LSSCIA1 ES A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Board of Directors La Quinta Redevelopment Agency La Quinta, California CERTIFIED PUBLIC ACCOUNTANTS 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92714 (714) 474-2020 AUDITORS' OPINI N N MPLIANCE WITH AUDIT GUIDELINES FOR CALIFORNIA REDEVELOPMENT AGENCIES We have audited the component unit financial statements of the La Quinta Redevelopment Agency ("Agency") as of and for the year ended June 30, 1993 and have issued our report thereon dated September 8, 1993. 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. Compliance with laws and regulations applicable to the Agency is the responsibility of the Agency's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Agency's compliance with provisions of laws and regulations contained in the Guidelines for Compliance Audits of California Redevelopment Agencies issued by the State Controller's Office, Division of Local Government Fiscal Affairs. The results of our tests indicated that, with respect to the items tested, the Agency complied, in all material respects, with the provisions referred to on the preceding paragraph. With respect to the items not tested, nothing came to our attention that caused us to believe that the Agency had not complied, in all material respects, with those provisions. This report is intended for the information of the Agency and the State Controller's office. However, this report is a matter of public record and its distribution is not limited. September 8, 1993 -25- MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION