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FY 1997-1998 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1998 (with Independent Auditors' Report Thereon) C OND SO'C.1NFES, L .L P CERTIFIED PUBLIC ACCOUNTANTS LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1998 (with Independent Auditors' Report Thereon) (This page intentionally left blank) LA QUINTA REDEVELOPMENT AGENCY Financial Statements and Supplemental Data Year ended June 30, 1998 TABLE OF CONTENTS Page Independent Auditors' Report 1 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 • Notes to the Financial Statements 6 Supplemental Data: Special Revenue Funds: • Combining Balance Sheet 24 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 25 Debt Service Funds: • Combining Balance Sheet 26 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 27 Capital Projects Funds: • Combining Balance Sheet 28 • Combining Statement of Revenues, Expenditures and Changes in Fund Balances 29 Independent Auditors' Compliance Report 30 (This page intentionally left blank) �IASSOCI 1TES, L.L.P. A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS 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, 1998, 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 that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the La Quinta Redevelopment Agency at June 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. During the year ended June 30, 1998, the Agency implemented GASB Statement No. 31 which changed the manner in which the Agency accounts for investments, as discussed further in note 16 to the financial statements. 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. August 19, 1998 1 MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION LA QUINTA REDEVELOPMENT AGENCY Combined Balance Sheet -All Fund Types and Account Groups June 30, 1998 See accompanying notes to the financial statements. 2 Governmental Fund Types Account Groups General General Totals Special Debt Capital Fixed Long -Term (Memorandum Only} Revenue Service Proiects Assets Debt 1998 1997 Assets and other debits Cash and investments (note 3) $ 5,304,639 5,272,572 1,444,826 - 12,022,037 10,995,260 Cash with fiscal agent (note 3) 8,129,831 74,235 7,878,824 - 16,082,890 12,063,206 Accounts receivable 23,301 11 81,258 - 104,570 260,567 Prepaid items - - - - - 276,546 Interest receivable 34,626 - 142,956 - 177,582 32,517 Notes receivable 2,420,750 - 108,217 - 2,528,967 2,552,074 Due from other funds (note 4) 62,192 - - 62,192 - Due from other governments - - - 6,187 Land held for resale - - - 86,320 Advances to other funds (note 5) 551,038 - - - - 551,038 551,038 Property, plant and equipment (note 6) - - - 11,438,745 - 11,438,745 11,438,745 Other debits: Amounts available in debt service funds - - - - 4,286,709 4,286,709 4,021,464 Amount to be provided for retirement of long-term debt - - 96.690.084 96,690,084 89,019,080 Total assets and other debits $16,526,377 5.346.818 9.656.081 11,43.8.745 100.976,793 143,944,814 13 .303,004 Liabilities, fund equity, and other credits Liabilities: Accounts payable $ 54,988 4,340 28,566 - 87,894 45,153 Accrued expenses - 504,731 - - 504,731 948,073 Deposits payable 14,426 - - - 14,426 14,398 Contracts payable - - - - - 30,008 Due to other funds (note 4) 62,192 - - - - 62,192 - Due to the City of La Quinta 162,702 - - - - 162,702 - Advances from other funds (note 5) - 551,038 - - - 551,038 551,038 General long-term debt (notes 8 through 14) - - 100.976.793 100,976,793 93,040,544 Total liabilities 291.308 I.060.109 28,566 100.976.793 102.359.776 94.629.214 Fund equity and other credits: Investment in general fixed assets - - - 11,438,745 - 11,438,745 11,438,745 Fund balances: Reserved for: Debt service - 4,286,709 - - 4,286,709 3,744,918 Bond Projects 8,129,831 - 7,878,824 - 16,008,655 11,538,593 Advances to other funds 551,038 - - 551,038 551,038 Notes receivable 2,420,750 108,217 - 2,528,967 2,552,074 Land held for resale - - - - 86,320 Prepaid items - - - - - 276,546 Unreserved: Designations 5,211,172 - 1,640,474 - 6,851,646 6,485,556 Undesignated (80,722) - (80,722) Total fund equity and other credits 16,232,069 4.286.709 9,627,515 11,438,745 41,585,038 36,673.790 Total liabilities, fund equity, and other credits $16.526,377 5.346.818 9.656.081 1.1.438,745 100.976,793 143,944,814 131 303.004 See accompanying notes to the 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, 1998 Fund balances at end of year $16,232,069 4286'709 9 627,515 30,146,293 25,235,045 See accompanying notes to the financial statements. 3 Totals Special Debt Capital ((Memorandum Only) Revenue Service Projects 1998 1997 Revenues: Tax increment $ 3,253,847 13,015,387 16,269,234 14,855,676 Developer reimbursements 11,127 - - 11,127 2,219,075 Intergovernmental - - - - 860 Investment income 679,976 110,618 288,437 1,079,031 1,559,559 Rental income 395,414 - - 395,414 715,203 Loss on sale of land (22,678) - - (22,678) - Litigation settlement proceeds - - 204 204 29,991 Miscellaneous - - - - 54,611 Total revenues 4,317,686 13,126,005 288,611 17,732,332 19,434,975 Expenditures: Current: Administrative - - - - 1,457,118 Professional fees - - - - 902,749 Planning and development 2,729,873 203,161 651,832 3,584,866 1,082,095 Capital projects 2,691,777 - - 2,691,777 2,654,400 Debt service: Principal - 1,675,000 - 1,675,000 1,295000 Interest - 4,584,546 - 4,584,546 4,483,550 Payments under pass-through obligations - 9,255,220 - 9,255,220 _7 505,062 Total expenditures 5,421.650 15,717,927 651,832 21,791,409 19,379,974 Excess (deficiency) of revenues over expenditures (1,103,964) (2,591,922) (363,191 (4,059,077) 55,001 Other financing sources (uses): Operating transfers in 3,280,377 2,957,882 910,721 7,148,980 3,360,568 Operating transfers out (5,364,051) (910,721) (874,208) (7,148,980) (3,360,568) Transfers from the City of La Quinta - - 25,570 25,570 - Proceeds of bonds (net of issuance costs) - - 21,565,688 21,565,688 - Payments to refunded bond escrow agent - - (13,430,939) (13,430,939) - Proceeds of advances from City - 810,006 810,006 1,446,215 Total other financing sources (uses) (2,083,674) 2,857,167 8 1� ,_96 832 8,970325 1,446,215 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (3,187,638) 265,245 7,833,641 4,911,248 1,501,216 Fund balances at beginning of year 19,419,707 4,021,464 _1,793874 25,235,045 23,733,829 Fund balances at end of year $16,232,069 4286'709 9 627,515 30,146,293 25,235,045 See accompanying notes to the financial statements. 3 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, 1998 4 Special Revenue Funds Variance - Favorable Budget Actual (Unfavorable) Revenues: Tax increment $ 3,227,037 3,253,847 26,810 Developer reimbursements - 11,127 11,127 Investment income 599,750 679,976 80,226 Rental income 341,000 395,414 54,414 Loss on sale of land - (22,678) (22,678) Litigation settlement proceeds - - - Miscellaneous - - - Total revenues 4,167,787 4,317,686 149,899 Expenditures: Current: Planning and development 7,382,180 2,729,873 4,652,307 Capital projects - 2,691,777 (2,691,777) Debt service: Principal - - _ Interest - - - Payments under pass-through obligations - - - Total expenditures 7382.180 5.421,650 1,960,530 Excess (deficiency) of revenues over expenditures (3,214,343) (1,103.964) 2,110,429 Other financing sources (uses): Operating transfers in 2,822,336 3,280,377 458,041 Operating transfers out (9,466,009) (5,364,051) 4,101,958 Transfer from the City of La Quinta - - - Proceeds of bonds (net of issuance costs) - - - Payments to refunded bond escrow agent - - - Proceeds of advances from City of La Quinta - - Total other financing sources (uses) 6 643,673) (2,083,674) 4,559,999 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (9,858,066) (3,187,638) 6,670,428 Fund balances at beginning of year 19.419.707 19,419.,707 _ Fund balances at end of year $ 9.561,641 16.232,069 6,670,428 See accompanying notes to the financial statements. 4 Debt Service Funds 203,161 45,344 Variance - 651,832 Favorable Budget Actual (Unfavorable) 12,908,147 13,015,387 107,240 - 110,618 110,618 12,908,147 13,126,005 217,858 Capital Projects Funds Variance - Favorable Budget Actual (Unfavorable) 101,208 288,437 187,229 204 204 101,208 288.641 187,433 248,505 203,161 45,344 2,374,637 651,832 1,722,805 1,675,000 1,675,000 - - - - 4,584,546 4,584,546 - - - - 8,436,663 9,255x220 (818,557) - - - 14,944,714 15,717,927 (773,213) 2,374,637 651,832 1,722,805 (2,036,567) (2,591,922) (555,355) (2.273,429) (363,191) 1,910,238 2,956,049 2,957,882 1,833 1,810,595 910,721 (899,874) (1,810,595) (910,721) 899,874 (1,076,888) (874,208) 202,680 - _ - - 25,570 25,570 - - - 21,56508 21,565,688 - - - - (13,430,939) (13,430,939) - 810,006 810,006 - - - - 1,955,460 2,857,167 901,707 8.868,456 8,196.832 (671.624) (81,107) 265,245 346,352 6,595,027 7,833,641 1,238,614 -1021,464 4,021,464 - 1,793,874 1.793.874 - 3,940,357 4,286,709 346,352 8,388,901_ 9,627,515 1,238,614 5 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements June 30, 1998 1 Summa of Significant AccountinPolicies The following is a summary of the significant accounting policies of the La Quinta Redevelopment Agency: (a) Fund Accounting 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 The 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 funds 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 is recorded in the Capital Projects (Redevelopment) fund and serves as a financing source for redevelopment expenditures. General Fixed Assets Account Grou 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 fixture lease payments. No depreciation has been provided on general fixed assets. (b) Basis of Accountant; 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 Quints 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. 7 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, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. 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) Land Held for Resale Land held for resale represents property acquired by the Agency for resale. The property is recorded at original cost. No write-down for a lower market value has been reflected in the accompanying financial statements. (f) Budgetary Reporting; The Agency adopts an annual budget prepared on the modified accrual basis for all of its governmental funds. (g) Memorandum Only Totals Columns in the accompanying financial statements captioned "Totals (Memorandum Only)" are not necessary for a fair presentation of the financial statements in accordance with generally accepted accounting principles, but are presented as additional analytical data. (2) Organization and Tax Increment Financing Redevelopment Goals and Objectives The general objective of the Redevelopment Plan adopted by the Agency is to encourage investment in the Redevelopment Project 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. LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (2) Organization and Tax Increment Financing, (Continued) 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. 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, 1998 consisted of the following: State of California Local Agency Investment Fund $ 5,730,676 Equity in City cash and investment pool 6,291,361 Total cash and investments held by the Agency $12,022,037 Cash and investments held by fiscal agent at June 30, 1998 consisted of the following: United States Treasury Notes $ 8,013,696 FNMA 1,931,253 Federal Home Loan Bank 973,554 Mutual funds - First American Treasury Obligations 5,164,387 Total cash and investments held by fiscal agent $16,082,890 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 Type Maximum % Savings/operating accounts 85% Government pools 35% U.S. government and agency securities 75% Bankers' Acceptances 30% 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 City's name. 10 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements 3 Cash and Investments Continued (Continued) CateRory 1 2 3 Investments held by fiscal agent: U.S. Treasury Notes $ - 8,013,696 FNMA - 1,931,253 Federal Home Loan Bank - 973.554 $ - 10,918,503 - Investments held by the City not subject to categorization: Investment in State of California Local Agency Investment Fund Equity in City cash and investment pool Investments held by fiscal agent not subject to categorization: Investment in mutual funds: First American Treasury Obligations Carrying Amount 8,013,696 1,931,253 973,554 10,918,503 5,730,676 6,291,361 5,164,387 $28,104,927 The carrying amount of all investments reflected in the above table is at fair value, except for investment contracts that are carried at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. 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. 11 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (4) Due From and To Other Funds Current interfund receivables and payables balances at June 30, 1998 are as follows: Special Revenue Funds: Low/Moderate Income Housing - PAI Low/Moderate Bond - PA 1 l'5L Advances to and From Other Funds Current Current Interfund Interfund Receivables Payables $62,192 - - 62,192 62 192 62,192 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). ,(6)_Changes in Geraeral Fixed Assets The Agency has purchased land which is intended to be used for community facilities. A summary of general faxed assets transactions for the fiscal year ended June 30, 1998 is as follows: Balances at Balances at July 1, 1997 Additions Deletions June 30, 1998 Land $11,438,745 - - 11,438J45 (7) Property Taxes Under California law, property taxes are assessed and collected by the counties up to I% 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. 12 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (7) Property Taxes, (Continued) 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. 13 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (8) General Long -Term Debt Changes in general long-term debt for the year ended June 30, 1998, were as follows: Project Area No. 1: Tax allocation bonds Housing tax allocation bonds Pass through agreements payable: Due to County of Riverside Desert Sands Unified School District 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 (9) 'Tax Allocation Bonds Balance at Balance at July 1_1997 Additin:is Deletions June 30, 1998 $32,820,000 15,760,000 (8,695,000) 39,885,000 17,677,385 - (247,979) 17,429,406 10,517,138 _ (195,086) 10,322,052 569,010 - (569,010) - 11,270,808 - (580,683) 10,690,125 3,649,852 364,985 - 4,014,837 5,505,000 6,750,000 (5,505,000) 6,750,000 4,777,615 - (67,021) 4,710,594 1,803,518 476,022 - 2,279,540 4.450.218 445.021 _ 4.895,239 $930544 23,796,028(15,859,779) 100,976,793 Tax Allocation Refitnding 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 7.3% 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, 1998 is $24,125,000. 14 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (9) 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, 1998, $6,280,000 and $15,875,000 of the 1989 and 1990 defeased bonds are outstanding, respectively. 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 Bands, Series 1991. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 1. The interest rate on the bonds is 5.20% payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable from pledged tax increment revenues 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, 1998 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. The total debt service payments on the new debt (refunding portion) are $6,022,599 greater than the total debt service payments on the old debt, primarily as a result of extending the period over which the new debt service will be paid. However, this was almost entirely offset by the interest savings associated with the reduction in interest rates, thereby resulting in a small economic lass of only $111,737. As of June 30, 1998, $7,460,000 of the deceased bonds are outstanding. 15 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (9) Tax Allocation Bonds, (Continued) Tax Allocation Reftindina Bonds, Series 1998 - Proiect Area No. 2 Tax allocation refunding bonds, Series 1998, in the amount of $6,750,000 were issued by the Agency to refund the outstanding aggregate principal amount of the Agency's Tax Allocation Bonds, Series 1992. The remaining proceeds were used to finance certain capital improvements within the La Quinta Redevelopment Project Area No. 2. Interest rates on the bonds range from 3.75% to 5.25% and are payable semi-annually on March 1 and September 1 of each year until maturity. The interest and principal of the bonds are payable solely from pledged tax increment revenues of Project Area No. 2. Term Bonds maturing September 1, 2028 and September 1, 2033 are subject to mandatory sinking fund redemption, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September 1 thereafter at a price equal to the principal amount thereof plus accrued interest. 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, 1998 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. The total debt service payments on the new debt (refunding portion) are $1,561,149 greater than the total debt service payments on the old debt, primarily as a result of extending the period over which the new debt service will be paid. However, the present value of the difference between the old debt service and the new debt service resulted in an economic gain of $1,026,531 after taking into account the time value of money. This reflects the savings associated with the reduction of interest rates that resulted from the refunding. As of June 30, 1998, $5,380,000 of the defeased bonds are outstanding. f IIQ __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. 16 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) 10 1995 Housing Tax Allocation Bonds Continued 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, 1998 is $22,140,000. 11 Due to Counly of Riverside Continued Project Area No. 1 Based on an agreement amended December 21, 1993 between the Agency, the City of La Q Uinta, and the County of Riverside (County), the Agency will pay to the County $10,517,138 froin 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 with principal payments commencing in June 1998. Unpaid balances accrue interest at 5.5% per annum. The balance at June 30, 1998 was $10,322,052. 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 finance new County facilities or land costs that benefit the County and serve the La Quinta population. Per the agreement, the Agency must repay all amounts withheld from the County. The Agency is required to begin repayment in the year in which tax increment reaches $5,000,000 in ten equal annual installments. Interest does not accrue on this obligation. The balance at June 30, 1998 was $2,279,540. 17 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) 12 Notes Pa able 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 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, 1998 totaled $10,690,125. The District agrees to use such funds to provide classroom and other construction costs, site acquisition, school buses, expansion or rehabilitation of current facilities. 13 Advances from the City of La Quinta The following represents a summary of the various transactions between the City of La Quinta and the Agency, accounted for as advances from the City: Balances at Balances at July 1, 1997 Proceeds Repayments June 30, 1998 Agency expenditures incurred by the City: Project Area No. 1 $3,649,852 364,985 - 4,014,837 Project Area No. 2 4,450,218 445,021 - 4,.895.239 Totals $8,100.070 810.006 - 8,910,076 14 Debt Service Re uirements to Maturit The minimum annual requirements (including sinking fund requirements) to amortize the long-term debt of the Agency as of June 30, 1998 are as follows (advances payable to the City and the pass-through obligation owed by Project Area No. 2 to the County have been excluded since minimum annual debt service payments have not been established): 18 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) 14) Debt Service Requirements to Maturity. (Continued 19 Redevelopment Agency RDA RDA PA No. 1 Pass-through Agreements Project Area No. 1 PA No. 2 and No. 2 Proiect Area No. I Tax Tax Tax Coachella Allocation Allocation Allocation 1995 Valley Year Bonds Bonds Bonds Housing Tax Unified County Ending Series Series Series Allocation School of June 30 1994 1998 1998 Bonds District Riverside Total 1998-99 $ 2,625,330 614,640 256.506 1,591,790 621,976 773,528 6,483,770 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 1,803,705 7,937.712 2002-03 2,620,855 819,520 420,747 1,592,820 697,918 1,803,705 7,955.565 2003-04 2,599,465 819,520 417,080 1,588,538 711,877 2,190,473 8,326,953 2004-05 2,612,140 819,520 418,264 1,587,990 726,114 2,190,473 8,354,501 2005-06 2,597,700 819,520 419,167 1,590,890 740,636 2,190,473 8,358,386 2006-07 2,593,456 819,520 419,785 1,645,502 755,449 - 6,233,712 2007-08 2,590,816 819,520 420,135 1,646,470 770,558 - 6,247,499 2008-09 2,584,232 819,520 420,184 1,645,125 785,968 - 6,255,029 2009-10 2,578,160 819,520 419,550 1,641,540 801,688 - 6,260,458 2010-11 2,571,868 819,520 418,272 1,640,840 817,722 - 6,268,222 2011-12 2,569.442 819,520 416,738 1,641,650 834,076 - 6,281,426 2012-13 2,560,155 819,520 419,819 1,638,750 421,166 - 5,859,410 2013-14 - 1,457,490 417,516 1,638,300 - - 3,513,306 2014-15 1,457,520 414,956 1,635,150 - 3,507,626 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 38,973,515 35,275,600 14,828,254 45,364,402 10,690,125 13,529,590 158,661,486 Less: Interest (14,848,515 {19.515,600) 8.078:254 (23.224,402) - (3.207,538)68 8� 74309) Total Principal $24,125,000 15,760,0005,750,000 22.140;000 _10.690 125 10.32.2.052 89.787.177 19 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (15) 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. (16) Change in Accountina Principle During the year ended June 30, 1998, the Agency implemented GASB Statement No. 31 which requires that the Agency use investment fair values (instead of amortized cost) for financial reporting purposes, as described more fully in note 1 to the financial statements. The cumulative effect of applying this statement upon the beginning fund balances of each fund was not material, and accordingly, those balances have not been restated. (17) Year 2000 Project The Agency uses the computer systems and equipment of the City of La Quinta. The City of La Quinta is in the process of evaluating its computer systems to ascertain which of its systems might be impacted by a failure of the computer hardware or programming code to properly recognize and process transactions dated on or after the year 2000. The systems under evaluation include: Air Conditioning/Heating Systems Phone Systems (G3iV1) Phone Systems (Audix 2.1.1) Phone System (Homisco) Mobile Phones (Nextel) Street Lights Traffic Signals User Software (Various Applications) Accounting Software (ForFUND by Mirasoft, Inc.) Irrigation Systems Stadium Lights Drainage Pumps Computer Operating System Software Generally, the City is in the Assessment Stage of completion for all systems listed above. The City has incurred (or will incur) the following estimated costs associated with its Year 2000 project: 20 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) (17) Year 2000 Project, (Continued) Evaluation of Y2K_Compliance • Money spent before June 30, 1998 on Y2K evaluation $ - • Money expected to be spent to complete Y2K evaluation in 1998-99 5,000 • Money to be spent in the future correcting Y2K problems To be determined Hardware and Software Upgrades Money spent before June 30, 1998 on Y2K upgrades $ - Money expected to be spent on Y2K upgrades during 1998-99 25,000 Money to be spent in 1999-2000 to correct Y2K problems Depends on final assessment The scope of the financial statement audit does not include an evaluation of the adequacy of management's plans with respect to this issue. Action taken or planned by the City for each stage relating to this project is as follows: Awareness Stage - The City of La Quinta has conducted a thorough inventory of its computer systems, software and related systems, which may be affected by the year 2000 date. It has completed this initial identification and has identified 95% of the items as either compliant or non-compliant. The City of La Quinta has also sent out a vendor survey to gain information from vendors as to their Y2K awareness and the steps they are taking to ensure compliance. Assessment Stage - The City of La Quinta is just starting the assessment stage. Review of the audit finding will identify compliant and non-compliant systems. Responses to outside vendor surveys will be received and potential problems will need to be identified. Some of the non-compliant issues may not affect City operations. Each case of non- compliance will be evaluated on an individual basis. Contingency plans should also be worked up for each department, in case of system failure due for whatever reason (i.e., streetlights, payroll systems, delivery of electricity, etc.). Completion of assessment to be completed January 1999. Remediation Stage - Once non-compliance has been identified, and this non-compliance has been found to impact negatively on City operations, the City of La Quinta will review options for replacing this system or switching vendors. At this time, the City of La Quinta is requiring all purchases of systems and related items be Y2K compliant. Remediation stage to be completed February 1999. Validation/Testing - Validation and testing will be started in Spring of 1999. The nature of the testing for the data processing system will be to change the dates on the hardware and process batches to identify potential problems. This testing will be done after hours or weekends. 21 LA QUINTA REDEVELOPMENT AGENCY Notes to the Financial Statements (Continued) 17 Year 2000 Project. (Continued) Implementation Stage - The implementation of Year 2000 compliance will depend largely on the cost of items identified and the amount of time required to correct the problem. The work done thus far indicates that implementation will occur during the 1999-00 fiscal year. 22 SUPPLEMENTAL DATA 23 LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Balance Sheet June 30, 1998 Low/Moderate Low/Moderate - 571,188 5,304,639 5,387,341 Income Income Low/ Low/ Housing Housing Moderate Moderate Project Project Bond Bond Totals Area No. 1 Area No. 2 PA No. 1 PA No. 2 1998 1997 Assets Cash and investments $3,029,624 1,703,827 - 571,188 5,304,639 5,387,341 Cash with fiscal agent - - 5,375,024 2,754,807 8,129,831 10,809,165 Accounts receivable 23,301 - - 23,301 197,567 Interest receivable - 34,626 34,626 24,091 Notes receivable 2,420,750 - 2,420,750 2,452,283 Due from other funds 62,192 - 62,192 - Due from other governments - - - - - 1,237 Land held for resale - - - - - 86,320 Advances to other funds 511,903 39,135 551,038 551,038 Total assets $6,047,770 1,742,962 5,409,650 3.325.995 16,526,377 19,509,042 Liabilities and Fund Balances Liabilities: Accounts payable $ 15,106 4,185 5,657 30,040 54,988 10,929 Accrued expenses - - - - - 34,000 Deposits payable 14,426 - - - 14,426 14,398 Contracts payable - - - - - 30,008 Due to other funds - - 62,192 - 62,192 - Due to the City of La Quinta - 47,499 115,203 162,702 - Total liabilities 29,532 4,185 115,348 145,243 294,308 89,335 Fund balances: Reserved for: Bond projects - - 5,375,024 2,754,807 8,129,831 10,809,165 Advances to other funds 511,903 39,135 - 551,038 551,038 Notes receivable 2,420,750 - - - 2,420,750 2,452,283 Land held for resale - - - - - 86,320 Unreserved: Designations 3,085,585 1,699,642 - 425,945 5,211,172 5,520,901 Undesignated - - (80,722 (80,722) Total fund balances 6,018,238 1,738,777 5,294,302 3.180.752 16.232.469 19.419.707 Total liabilities and fund balances $6.047,770 1,,742,962 5,409,650 3,325,995 16,526.377 19,509,042 24 LA QUINTA REDEVELOPMENT AGENCY Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances . Year ended June 30, 1998 Low/Moderate Low/Moderate Moderate Income Income Bond Housing Housing 395,414 Project Project (3,360,568) Area No. 1 Area No. 2 Revenues: Tax increment $2,432,379 821,468 Developer reimbursements 11,127 - Investment income 105,590 55,851 Rental income 395,414 - Loss on sale of land (22,678) Miscellaneous Total revenues 2.921,832 877,319 Expenditures: Current: Administrative - - Professional fees - - Planning and development 1,795,539 247,158 Capital projects - - Total expenditures 1,795,539 247,158 Excess (deficiency) of revenues over (under expenditures 1,126,293 630,161 Other financing sources (uses): Operating transfers in 212,193 265,517 Operating transfers out (1,742,501) (339,341 Total other financing sources (uses) (1,530,3081 (73,824 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (404,015) 556,337 Fund balances at beginning of year 6,422,253 1.182.440 Fund balances at end of year $6.018,238 1,738,777 pill Low/ Low/ Moderate Moderate Bond Bond PA No. 1 PA No. 2 416,525 102,010 416,525 102.010 Totals 1998 1997 3,253,847 2,971,135 11,127 2,119,347 679,976 1,275,590 395,414 715,203 (22,678) - 54.611 4,317,686 7,135,886 728,046 - - - 432,755 456,081 231,095 2,729,873 962,595 - 2.691.777 2,691,777 453.062 456,081 2,922.872 5,421,650 2,576,458 (39,556) 2 820 862 (1,103,9641 4,559,428 - 2,802,667 3,280,377 1,587,792 (3,016.305)26( 5,904) (5.361.051) (3,360,568) 3 q(_,0 16_A305j 2,536,763 (2,083,674} (1,772,776) (3,055,861) (284,099) (3,187,638) 2,786,652 8.350.163 3.464.851 19.419.707 16.633,055 5,294,302 3,180,752 16.232.069 19 419J07 LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Balance Sheet June 30, 1998 Redevelopment Redevelopment Liabilities and Fund Balances Liabilities: Accounts payable Agency Agency 4,340 Totals Accrued expenses PA No. 1 PA No. 2 1998 1997 Assets 511,903 39,135 551,038 551,038 Cash and investments $3,389,702 1,882,870 5,272,572 4,680,466 Cash with fiscal agent 52,385 21,850 74,235 524,613 Accounts receivable 11 - 11 - Prepaid expenses - - - 276,546 Due from other governments - - - 4,950 Total assets IL442,098 1,904,720 5,346,818 5.,486,575 Liabilities and Fund Balances Liabilities: Accounts payable $ 4,340 - 4,340 - Accrued expenses 149,224 355,507 504,731 914,073 Advances from other funds 511,903 39,135 551,038 551,038 Total liabilities 665.467 394,642 1,060,10!9 1,465,111 Fund balances: Reserved for: Debt service 2,776,631 1,510,078 4,286,709 3,744,918 Prepaid expenses - - - 276,546 Total fund balances 2,776,631 1,510,078 4,286,709 4,021,464 Total liabilities and fund balances $3-442,098 1,904,720 5,346,818 5,486,575 26 LA QUINTA REDEVELOPMENT AGENCY Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1998 Revenues: Tax increment Investment income Total revenues Expenditures: Current: Professional fees Planning and development Debt service: Principal Interest Payments under pass- through obligations Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of advances from City Redevelopment Agency PA No. 1 $ 9,729,515 29,829 9,759,344 152,565 1,482,979 3,496,109 6,251.259 11,382,912 (1,623.568) 1,796,304 (368,565) 364,985 Total other financing sources (uses) 1.792,724 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 169,156 Fund balances at beginning of year 2,607,475 Fund balances at end of year $ 2,776,631 27 Redevelopment Agency PA No. 2 3,285,872 80,789 3,366,661 50,596 192,021 1,088,437 3,003,961 4,335,015 Totals 1998 1997 13,015,387 110,618 13,126,005 203,161 1,675,000 4,584,546 9.255.220 15,717,927 96�) (2,591.922) 1,161,578 (542,156) 445,021 1,064,443 96,089 1,413,989 1,510, 078 2,957,882 (910,721) 810,006 2 ,857,167 265,245 4,021.464 4,286,709 . 11,884,541 131,982 12.016.523 147,126 1,295,000 4,450,140 7,505.062 13,397,328 (1,380,845) 1,772,776 604.895 _2,377,671 3,024,598 4,021,464 LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Balance Sheet June 30, 1998 Redevelopment Redevelopment Agency Agency Totals PA No. 1 PA No. 2 1998 1997 Assets Cash and investments $ 8,045 1,436,781 1,444,826 927,453 Cash with fiscal agent 7,170,042 708,782 7,878,824 729,428 Accounts receivable - 81,258 81,258 63,000 Interest receivable 142,956 - 142,956 8,426 Notes receivable - 108,217 108,217 99,791 Total assets 7 321 043 2,335,038 9,656,081 1,828.098 Liabilities and Fund Balances Liabilities: Accounts payable 15,367 13,199 28,566 34,224 Total liabilities 15,367 13,199 28,566 34,224 Fund balances: Reserved for: Bond projects 7,170,042 708,782 7,878,824 729,428 Notes receivable - 108,217 108,217 99,791 Unreserved: Designated for special projects 135,.634 .1,504,840 1640,474 964,655 Total fund balances 7,305,676 2,321,839 9,627,515 1,793,874 Total liabilities and fund balances $7,321,043 2,335,038 9,656,081 1,828,098 28 LA QUINTA REDEVELOPMENT AGENCY Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1998 Redevelopment Redevelopment Agency Agency Totals PA No. 1 PA No. 2 1998 1997 Revenues: Developer reimbursements $ - - - 99,728 Intergovernmental - - - 860 Investment income 42,161 246,276 288,437 151,987 Litigation settlement proceeds 204 - 204 29,991 Total revenues 42,365 246,276 288,641 282,566 Expenditures: Current: Administrative Professional fees - Planning and development 370,024 Debt service: Interest - Total expenditures 370,024 Excess (deficiency) of revenues over expenditures 327,659) Other financing sources (uses): Operating transfer in 368,565 Operating transfer out (52,358) Transfers from the City of La Quinta - Transfers to the City of La Quinta - Proceeds of bonds (net of issuance costs) 15,134,466 Payments to refunded bond escrow agent (7,822,592) Proceeds of advances from City of La Quinta - Total other financing sources (uses) 7,628,081 Excess (deficiency) of revenues and other financing sources over (under) expenditure and other financing uses 7,300,422 Fund balances at beginning of year 5,254 Fund balances at end of year $ 7,305,676 29 281,808 651,832 281,808 651,832 729,072 322,868 119,500 33.410 1,204, 850 35,532) (363.191)—f222,284) 542,156 (821,850) 25,570 910,721 (874,208) 25,570 6,431,222 21,565,688 (5,608,347) (13,430,939) (2,201,338) 841.320 568.751 8,196,832 (1,360,018 533,219 7,833,641 1.,788,620 1,793,874 2,321,839 9,627,515 (2,282,302) 4,076,176 1_,793,874 N R/ND 1 'LSSOOAT EJ, L.L.P. 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 92614 (949) 474-2020 Fax (949) 263-5520 INDEPENDENT AUDITORS' COMPLIANCE REPORT We have audited the financial statements of the La Quinta Redevelopment Agency ("Agency") as of and for the year ended June 30, 1998 and have issued our report thereon dated August 19, 1998. 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 La Quinta Redevelopment Agency complied, in all material respects, with the provisions referred to in the preceding paragraph except as follows: The Agency did not perform all of the public notice and disclosure procedures specified in Health and Safety Code Section 33411.3 that are applicable to the sale of Agency -owned property. With respect to 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. August 19, 1998 l�rrir.�•r�� �rs®ua1�� � �..� 30 MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION