FY 1986-1987 RDA Financial StatementsLA QUINTA REDEVELOPMENT AGENCY
FINANCIAL STATEMENTS
WITH REPORT ON EXAMINATION BY
CERTIFIED PUBLIC ACCOUNTANTS
JUNE 30, 1987
LA QUINTA REDEVELOPMENT AGENCY
June 30, 1987
CONTENTS
Accountants' Report
General Purpose Financial Statements:
Page
Number
1
Combined Balance Sheet - All Fund Types and Account Group 2
Combined Statement of Revenues, Expenditures and Changes
in Fund Balances - All Governmental Fund Types 3
Notes to Financial Statements
Supplementary Information:
4 - 10
Combining Balance Sheet - Capital Project Funds 11
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - Capital Project Funds 12
Accountants' Report on Compliance with Audit Guidelines
for California Redevelopment Agencies 13
DIEHLXVANS
&COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS
1910 NORTH BUSH STREET
SANTA ANA • CALIFORNIA 92706-2894
PHONE (714) 542-4453
August 20, 1987
ACCOUNTANTS' REPORT
Board of Directors
La Quinta Redevelopment Agency
La Quinta, California
WIN G. PETERS, CPA
DONALD H. PETERSON, CPA
DONALD E. CALLAHAN, CPA
L. PETER SCHERER, CPA
RODNEY K, McDANIEL, CPA
RALPH H. WEINTRAUB, CPA
MICHAEL R. LUDIN, CPA
PHILIP H. HOLTKAMP, CPA
THOMAS M. PERLOWSKL CPA
We have examined the general purpose financial statements of the La Quinta
Redevelopment Agency, as of and for the year ended June 30, 1987, as listed in
the table of contents. Our examination was made in accordance with generally
accepted auditing standards and, accordingly, included such tests of the
accounting records and such other auditing procedures as we considered necessary
in the circumstances.
In our opinion, the general purpose financial statements referred to above
present fairly the financial position of the La Quinta Redevelopment Agency at
June 30, 1987 and the results of its operations for the year then ended, in
conformity with generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
Our examination was made for the purpose of forming an opinion on the general
purpose financial statements taken as a whole. The supplementary information
listed in the table of contents is presented for purposes of additional analysis
and is not a required part of the general purpose financial statements of the La
Quinta Redevelopment Agency. The information has been subjected to the auditing
procedures applied in the examination of the general purpose financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the general purpose financial statements taken as a whole.
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OTHER OFFICES AT: ONE CMC PLAZA • SUITE 265 2965 ROOSEVELT ST. 120 WEST WOODWARD AVE.
NEWPORT BEACH, CA 92660-5915 CARLSBAD, CA 92008-2389 ESCONDIDO, CA 920259990
(714) 644-6156 (619) 729-2343 (619) 741-3141
LA QUINTA REDEVELOPMENT AGENCY
COMBINED BALANCE SHEET -
ALL FUND TYPES AND ACCOUNT GROUP
June 30, 1987
ASSETS:
Cash and temporary investments
(Notes lc and 3)
Accrued interest receivable
Tax increment revenue
receivable (Note 4)
Restricted Assets (Note 6):
Cash
Amount available for retirement
of long-term debt
Amount to be provided for
repayment of debt
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
LIABILITIES:
Bonds payable (Note 8)
Due to County of Riverside
(Note 8)
Note payable to Water District
(Note 8)
Accounts payable
TOTAL LIABILITIES
FUND BALANCES (NOTES 7 AND 8):
Reserved for debt service
Reserved for capital projects
TOTAL FUND BALANCES
TOTAL LIABILITIES AND
FUND EQUITY
Governmental Account
Fund Types Group
Totals
Capital Debt Long -Term (Memorandum
Projects Service Debt Only)
$ 7,381 $ 422,173 $ - $ 429,554
- 8,951 - 8,951
142,480 - 142,480
3,787,908 - 3,787,908
- 4,361,512 4,361,512
17,524,659 17,5242659
$ 7,381 $4,361,512 $ 21,886,171 $ 26,255,064
$ - $ - $ 20,000,000 $ 20,000,000
1,035,196 1,035,196
850,975 850,975
6,643 - - 6,643
6,643 - 21,886,171 212892,814
- 4,361,512 - 4,361,512
738 - - 738
738 4,361,512 - 4,362,250
$ 71381 $ 4,361,512 $ 21,886 ,171 $ 2652553064
See accountants' report and notes to financial statements.
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LA QUINTA REDEVELOPMENT AGENCY
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - ALL GOVERNMENTAL FUND TYPES
For the year ended June 30, 1987
REVENUES:
Tax increment revenue (Note 4)
Interest income
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES:
Trustee fees
Administrative (Note 5)
Professional and consulting services
Debt Service:
Taxing agency payments
Interest on bonds
Principal payments (Note 5)
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES):
Loans from City (Note 5)
Operating transfers in (Note 5)
Operating transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER SOURCES
OVER EXPENDITURES AND OTHER USES
FUND BALANCES, JULY 1, 1986
FUND BALANCES, JUNE 30, 1987
Totals
Capital Debt (Memorandum
ProjectsService Only)
$ 521,122 $ 2,084,489 $ 2,605,611
43,477 101,131 144,658
5 - 5
564,604 2,185,670 2,750,274
- 15,823 15,823
66,763 - 66,763
36,180 - 36,180
28,808 28,808
1,900,478 1,900,478
103.000 103.000
102,943 2,048,109 2,151,052
461,661 137,561 599,222
103,000 - 103,000
- 564,599 564,599
(564,599) - (564,599)
(4612599) 5641599 103,000
62 702,160 702,222
676 3,659,352 3,660,028
$ 738 $ 4,3612_512 $ 4,362,250
See accountants' report and notes to financial statements.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
June 30, 1987
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. Description of funds and account group:
The accounts of the La Quinta Redevelopment Agency (the Agency) are
organized on the basis of funds and account group, each of which is
considered a separate accounting entity with a self -balancing set of
accounts. The funds and account group used in the accompanying
financial statements and described below are those specified for
governmental units by the Governmental Accounting Standards Board
(GASB).
Capital Project Funds
Capital Project Funds are established to account for bond proceeds
available for project improvements and interest income on invested
funds. The funds are expended primarily for administrative expenses and
redevelopment project costs. Included as a capital project fund is the
low income housing fund which accounts for twenty percent of all taxes
which are allocated by the Agency pursuant to the California Health and
Safety Code. These funds shall be used by the Agency for the purpose of
providing affordable housing. Under provisions of the Health and Safety
Code such funds are referred to as "Redevelopment Funds".
Debt Service Fund
Debt service funds are established to account for tax increment
revenues, bond proceeds required to be set aside for future debt service
and related interest income. The fund is used to repay principal and
interest on indebtedness of the Agency. Under provisions of the Health
and Safety Code, such funds are referred to as "Special Funds".
Long -Term Debt Group of Accounts
The Long -Term Debt Group of Accounts is used to account for bonds
payable and other long-term debt indebtedness of the Agency.
b. Basis of Accounting:
The modified accrual basis of accounting is used for all funds of the
Agency. Revenues are recognized when they become measurable and
available to finance expenditures of the current period. Accrued
revenues include tax increment revenue and accrued interest on
investments received within 60 days after year end. Expenditures are
recorded when the related liability is incurred, except that principal
and interest payments on bonds are recorded as expenditures when due.
Accrued interest on amounts due to the County of Riverside and the
Coachella Valley Water District is reflected in the long-term debt group
of accounts.
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1987
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Investments:
Investments are stated at cost, or amortized cost, which approximates
market value. (See Note 3).
d. Bond Discounts and Bond Issue Costs:
As described at Note lb. above, interest on bonds payable is not
accrued, but rather is recorded as an expenditure when due. Consistent
with this policy, discounts on the sale of bonds and bond issue costs
are recorded as expenditures when paid in the year the bonds are issued.
e. Budgetary Reporting:
The budgets of the Agency are primarily "long-term" budgets which
emphasize major programs and capital outlay plans extending over a
number of years. Because of the long-term nature of projects, "annual"
budget comparisons are not considered meaningful, and accordingly, no
budgetary information is included in the accompanying financial
statements.
f. Total Columns on Combined Statements:
Total columns on the financial statements are captioned "Memorandum
Only" to indicate that they are presented only to facilitate financial
analysis and such data is not comparable to a consolidation. Interfund
eliminations have not been made in the aggregation of this data.
2. HISTORY AND ORGANIZATION:
The Agency was activated on July 5, 1983. The primary purpose of the Agency
is to eliminate blight through the process of redevelopment. On November
29, 1983 the City Council approved and adopted the Redevelopment Plan for
the La Quinta Redevelopment Project. This plan provides for the elimination
of blight and deterioration which was found to exist in the project area.
The project area encompasses approximately 17.5 square miles of the City.
The Coachella Valley Water District is constructing the Agency's first
project to correct flooding of the project area.
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1987
3. CASH AND INVESTMENTS:
Cash and investments at June 30, 1987 consisted of the following:
Deposits:
Banks:
Demand accounts (all insured)
Investments:
U.S. Treasury Notes
California Local Agency Investment
Fund (LAIF)
Total cash and investments
Market
l+.. ..�
17-1....
$ 12,518 $
3,775,944
12,518
3,748,986
429,000 429,000
$ 4,2172462 $ 4,190,504
Cash and investments are recorded in the accompanying combined balance sheet
as follows:
Cash and Investments - unrestricted $ 429,554
Cash and Investments - restricted 3,787,908
$ 4,217,462
Authorized Investments:
Under provisions of the Commission's Investment Policy, and in accordance
with Section 53601 of the California Government Code, the Commission may
invest in the following types of investments:
- U.S. Government Obligations
- Obligations of U.S. Government Agencies
- U.S. Government Instrumentality Obligations
- Repurchase Agreements (Repos) whose underlying collateral
consists of the foregoing specified securities
- Bankers' Acceptances that are "prime" rated
- State Investment Pool
- Other instruments as may become available and authorized
by California Law
- Bonds issued by the City of La Quinta or the La Quinta
Redevelopment Agency
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1987
3. CASH AND INVESTMENTS (CONTINUED):
California Local Agency Investment Fund (LAIF)
The LAIF is a special fund of the California State Treasury through which
local governments may pool investments. The City and the Commission each
may invest up to $5,000,000 in the fund. Investments in LAIF are highly
liquid, as deposits can be converted to cash within 24 hours without loss of
interest.
Classification of Cash and Investments by Credit Risk
Deposits:
All deposits 100% insured $ 12,518
Investments:
Category 3:
Investments not registered in City's name,
uninsured, etc. 3,787,908
California Local Agency Investment Fund:
All investments with LAIF secured by the full
faith and credit of the State of California 429,000
$_4,217,462
Allocation of Interest Income Among Funds
Interest income is allocated to each fund based on the preceding month's
ending cash balance.
4. TAX INCREMENT FINANCING AND RELATED RECEIVABLES:
The Agency's primary source of revenue comes from property taxes, referred
to in the accompanying financial statements as "tax increment revenue".
Property taxes allocated to the Agency are computed in the following manner:
a. The assessed valuation of all property within the project area is
determined on the date of adoption of the Redevelopment Plan.
b. Property taxes related to the incremental increase in assessed values
after the adoption of the Redevelopment Plan are allocated to the
Agency; all taxes on the "frozen" assessed valuation of the property are
allocated to the City and other districts.
The Agency has no power to levy and collect taxes and any legislative
property tax de -emphasis might necessarily reduce the amount of tax revenues
that would otherwise be available to pay the principal of, and interest on
bonds payable. Broadened property tax exemptions could have a similar
effect. Conversely, any increase in the tax rate or assessed valuation, or
any reduction or elimination of present exemptions would necessarily
increase the amount of tax revenues that would be available to pay principal
and interest on bonds payable.
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1987
4. TAX INCREMENT FINANCING AND RELATED RECEIVABLES (CONTINUED):
The tax increment receivable of $142,480 represents assessments attributable
to the fiscal year ended June 30, 1987 that were remitted to the Agency by
the County of Riverside after the year end.
5. REIMBURSEMENT AGREEMENT:
Pursuant to the terms of a reimbursement agreement, the Agency has
reimbursed the City $60,000 for the use of City facilities during the past
year. This amount is included in the administrative expenditures of the
Capital Projects Fund.
During the year ended June 30, 1987, the City loaned the Agency $103,000
which was repaid by the Debt Service Fund.
During the year ended June 30, 1986 a finding was made by the Agency that a
project of the Capital Project Fund of the Agency was of benefit to the
entire project area and that the low income housing portion of this project
met the requirements of the City for low -and -moderate income housing.
Accordingly the low income housing fund of the Agency transferred tax
increment revenue in the amount of $564,599 to the Debt Service Fund of the
Agency during the year ended June 30, 1987.
6. RESTRICTED ASSETS:
These assets are restricted in their use to the retirement of principal and
interest on bonds and Water District advances (see Note 8), and are not
available for use by the Agency for any other purpose.
7. FUND BALANCE RESERVES:
Under generally accepted accounting principles, a municipal entity may set
up "reserves" of fund equity to segregate fund balances which are not
appropriable for expenditure in future periods, or which are legally set
aside for a specific future use. Fund "designations" also are established
to indicate tentative plans for financial resource utilization in a future
period.
At June 30, 1987, a "Reserve for Capital Projects" was set up in the Capital
Projects Fund to indicate that the related assets were not "available" as a
current asset.
The entire net equity of the debt service fund is reserved for future debt
service, and accordingly, is not available for general expenditures. The
bond indenture requires $2,115,350 to be reserved. The trustee has
currently reserved $1,551,428 and the remaining required reserve is expected
to be funded by tax increment revenue through 1988. Other funds held by the
trustee also are pledged for debt service.
See accountants' report.
LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1987
8. LONG-TERM DEBT:
All long-term debt of the Agency originated during the year ended June 30,
1987 and include the following:
Bonds payable $ 20,000,000
Due to County of Riverside 1,035,196
Note payable to Water District 850,975
Total $ 21,886,171
Bonds Payable
La Quinta Redevelopment Project Tax Allocation Bonds, Series 1985 were
issued during the fiscal year ending June 30, 1987. The bonds were issued
in the amount of $20,000,000 and have an average interest rate of 9.404% per
annum. Principal payments are paid annually on September 1, beginning in
1989. Interest payments are payable semi-annually on March 1 and September
1, beginning in 1987. Bonds maturing on or before September 1, 1995 are not
subject to call and redemption prior to maturity. Bonds maturing on or
after September 1, 1996 are subject to redemption on any interest payment
date at par plus a premium together with accrued interest to the date of
redemption.
The scheduled future debt service payments on the bonds is as follows:
Year Ended
June 30, Principal
1988 $ -
1989 245,000
1990 265,000
1991 290,000
1992 320,000
All subsequent years 18,880,000
Total $ 20,000,000
Due to County of Riverside
Interest
$ 1,900,000
1,900,000
1,876,725
1,851,550
1,824,000
27,759,000
$ 37,111,275
Total
$ 11900,000
2,145,000
2,141,725
2,141,550
2,144,000
46 X639,000
$ 57,111,275
Based on an agreement with the County of Riverside, the Agency shall repay
to the County 50 percent of tax increment received which would have been
retained by the County if the Agency did not exist. These repayments are
subordinate to certain debt service of the Agency and exclude amounts
allocated to the low-income housing fund. The repayments will begin when
See accountants' report.
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LA QUINTA REDEVELOPMENT AGENCY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1987
8. LONG-TERM DEBT (CONTINUED):
Due to County of Riverside (Continued)
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, 1987 is $1,035,196 including $49,556
of accrued interest. This amount has been recorded in the long-term debt
group of accounts.
Notes Payable
The Coachella Valley Water District advanced $778,000 to the Agency during
the fiscal year ending June 30, 1986 engineering costs incurred for a flood
control project. This amount accrues interest at the rate of interest being
earned by funds deposited with the State of California Local Agency
Investment Fund. The amount payable as of June 30, 1987 is $850,975
including accrued interest of $72,975. This amount is held by the trustee
and included in restricted assets. The Agency must begin repaying principal
and accrued interest by August 15, 1990. No payment schedule has been
determined.
See accountants' report.
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SOPPI NTARY INFORMATION
LA QUINTA REDEVELOPMENT AGENCY
COMBINING BALANCE SHEET -
CAPITAL PROJECT FUNDS
June 30, 1987
ASSETS
Cash and temporary investments
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accounts payable and accrued expenses
FUND BALANCE:
Reserved for capital projects
TOTAL LIABILITIES AND FUND BALANCE
See accountants' report.
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Flood Low
Control Income
Project_ Housing_ Totals
$ 7,381 $ - $ 71381
$ 6,643 $ - $ 6,643
738 _ 738
$ 7,381 $ - $ 7,381
LA QUINTA REDEVELOPMENT AGENCY
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - CAPITAL PROJECT FUNDS
For the year ended June 30, 1987
REVENUES:
Tax increment revenue $
Miscellaneous revenue
Interest income
TOTAL REVENUES
EXPENDITURES:
Administrative
Professional and consulting services
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING SOURCES (USES):
Loan from City
Operating transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER USES
FUND BALANCES, JULY 1, 1986
FUND BALANCES, JUNE 30, 1987
See accountants' report.
Flood Low
Control Income
Project Housing
Totals
$ 521,122 $ 521,122
5 - 5
43,477 43 477
5 564,599 564,604
66,763 - 66,763
36,180 - _36,_180
102,943 - 102,943
(102,938) 564,599 461,661
103,000
103,000
(564,599_) _(564,599)
103,000 (564.599) 461,599
62 - 62
676 - 676
$ 738 $ - $ 738
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LA QUINTA REDEVELOPMENT AGENCY
August 20, 1987
ACCOUNTANTS' REPORT ON
COMPLIANCE WITH AUDIT GUIDELINES FOR
CALIFORNIA REDEVELOPMENT AGENCIES
In connection with our examination of the financial statements of the La Quinta
Redevelopment Agency for the year ended June 30, 1987, we have performed, to the
extent applicable, the tasks contained in Sections I through V of the
"Guidelines for Compliance Audits of California Redevelopment Agencies"
published by the State Controller.
Based on the above procedures, we are of the opinion that the Agency complied in
all material respects with criteria established in the State Controller's
guidelines referred to above.
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