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2008 12 16 FAa�T � �E€ S cry 0- OF94 FINANCING AUTHORITY AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting TUESDAY. DECEMBER 16, 2008 — 4:00 P.M. Beginning Resolution No. FA 2008-003 CALL TO ORDER Roll Call: Board Members: Franklin, Henderson, Kirk, Sniff, and Chairman Adolph PUBLIC COMMENT At this time members of the public may address the Financing Authority on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1. APPROVAL OF MINUTES OF NOVEMBER 18, 2008. CONSENT CALENDAR NOTE: Consent Calendar items are considered to be routine in nature and will be approved by one motion. 1. RECEIVE AND FILE TREASURER'S REPORT DATED OCTOBER 31, 2008. Financing Authority Agenda 1 December 16, 2008 2. RECEIVE AND FILE REVENUE & EXPENDITURES REPORT DATED OCTOBER 31, 2008. 3. APPROVAL OF ANNUAL CONTINUING DISCLOSURE FOR THE LA QUINTA FINANCING AUTHORITY 1996 LEASE REVENUE REFUNDING BONDS AND 2004 LOCAL AGENCY REVENUE BONDS FOR FISCAL YEAR ENDING JUNE 30, 2008. BUSINESS SESSION — NONE CHAIR AND BOARD MEMBERS' ITEMS — NONE PUBLIC HEARINGS — NONE ADJOURNMENT The next regular meeting of the Financing Authority will be held on January 20, 2009, at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Financing Authority meeting of December 16, 2008, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 111, on December 12, 2008. DATED: December 12 2008 VERONICA J. TECINO, City Clerk City of La Quinta, California Public Notice Any writings or documents provided to a majority of the Financing Authority regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. Financing Authority Agenda 2 December 16, 2008 a •� 04 , o'Pt Ceit�t 4 4& Q,mrcv C `b OF TKF' AGENDA CATEGORY: COUNCIL/RDA MEETING DATE: December 16, 2008 BUSINESS SESSION: _ ITEM TITLE: Receive and File Treasurer's Report dated October 31, 2008 CONSENT CALENDAR: _ Mrig 1WI Mxy 1110 PUBLIC HEARING: RECOMMENDATION: It is recommended the La Quinta Financing Authority: Receive and file. PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA 04 �OZce �-dl 4 XP Q9!Arcv cFM OF "ftSC9 COUNCIL/RDA MEETING DATE: December 16, 2008 ITEM TITLE: Receive and File Revenue and Expenditure Report dated October 31, 2008 RECOMMENDATION: Receive and File. BACKGROUND AND OVERVIEW: AGENDA CATEGORY: BUSINESS SESSION: _hh CONSENT CALENDAR: d+ STUDY SESSION: PUBLIC HEARING: Transmittal of the October 31, 2008 Statement of Revenue and Expenditures for the La Quinta Financing Authority. Respectfully submitted, John M. Falconer, Finance Director Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Revenue and Expenditures, October 31, 2008 LA OUINTA FINANCING AUTHORITY REVENUE DETAIL ADJUSTED REMAINING % BUDGET RECEIVED BUDGET RECEIVED DEST SERVICE REVENUE: Contractual Services Fees Non Allocated Interest Rental Income Transfer In TOTAL DEBT SERVICE CAPITAL IMPROVEMENT REVENUE: Pooled Cash Allocated Interest Non Allocated Interest TOTAL CIP REVENUE TOTAL FINANCING AUTHORITY 15,000 00 coo 15,01)0.00 0 000% 0.00 0.00 0.00 0,000% 675,880.00 533,260 00 142,620.00 78 900% 5,919,994.00 3,781,62813 2,138,36587 63880% 6,610,87400 4,314,88813 2,295,98587 65270% 000 0 00 000 0 000% 000 0 00 000 0.000% 000 Dab 000 0000% 6,610,874.00 4,314,88813 2,295,98587 65.270% 2 LA QUINTA FINANCING AUTHORITY EXPENDITURE SUMMARY 07/01/2008 - 10/31/2008 ADJUSTED REMAINING BUDGET EXPENDITURES ENCUMBERED BUDGET DEBT SERVICE EXPENDITURES SERVICES BOND PRINCIPAL - 1990 BOND PRINCIPAL - 2004 BOND INTEREST- 1996 BOND INTEREST - 2004 TRANSFER OUT CAPITAL IMPROVEMENT EXPENDITURES BOND ISSUANCE COSTS TRANSFER OUT 15,800 00 6.20242 0.00 9,597.58 380,000.00 380,000 OD 0.00 0.00 1,615,000.00 1,615,000.D0 0.00 000 296,45000 153,260.00 0.00 143,190.0W 4,304,99400 2,166,628.13 000 2,138,365.87 0.00 000 000 0.00 TOTAL DEBT SERVICE 000 0.00 0.00 000 000 0.00 0.00 0.00 TOTAL CAPITAL IMPROVEMENT u.uu 000 0.00 0.00 TOTAL FINANCING AUTHORITY 3 `r';ty of 1wQuiAr�, COUNCIL/RDA MEETING DATE: December 16, 2008 ITEM TITLE: Approval of Annual Continuing Disclosure for the La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds and 2004 Local Agency Revenue Bonds for Fiscal Year End June 30, 2008 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve, receive and file the Annual Continuing Disclosure for the La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds and 2004 Local Agency Revenue Bonds for Fiscal Year End June 30, 2008. FISCAL IMPLICATIONS: None. CHARTER CITY IMPLICATIONS: None. BACKGROUND AND OVERVIEW: On November 10, 1994, the Securities and Exchange Commission adopted amendments to existing federal regulations (Rule 15c2-12) for bonds issued after July 3, 1995, requiring issuers of municipal securities (bond issues) to do the following annually for each bond issue: 1. Prepare official statements meeting the content requirement of Rule 15c2-12. 2. File certain financial information and operating data with national and state repositories each year. 3. Prepare announcements of the significant events including payment defaults, defeasances and draws on a reserve fund as the events occur. Attachment 1 is the 2007/2008 Annual Continuing Disclosure Statement for the La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds prepared in accordance with the three aforementioned requirements. Additionally, no announcement of significant events was necessary for Fiscal Year 2007/2008, however, after June 30, 2008, the ratings of bond insurer MBIA and AMBAC have been downgraded twice. Material event notices (Attachment 2) has been filed with the appropriate repositories on July 23, 2008 and December 1, 2008 reporting these downgrades. It is important to note that the Agency has continued to pay debt service to the bondholders who invested in these bonds. FINDINGS AND ALTERNATIVES: The alternatives available to the Financing Authority include: 1. Approve, receive and file the Annual Continuing Disclosure for the La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds and 2004 Local Agency Revenue Bonds for Fiscal Year End June 30, 2008; or 2. Do not approve, receive and file the Annual Continuing Disclosure for the La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds and 2004 Local Agency Revenue Bonds for Fiscal Year End June 30, 2008; or 3. Provide staff with alternative direction. Respectfully submitted, John M. Falconer, Finance Director Approved for submission by: Thomas P. Genovese, Executive Director Attachments: 1. 2007/2008 Annual Continuing Disclosure Statements for the La Quinta Financing Authority 2. Material Event Disclosures dated July 23, 2008 and December 1, 1996 Lease Revenue and 2004 Local Agency Revenue Bonds 2008 ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT As of December 16, 2008 Also available at: WILLDAN Financial Services www.willdan.com LIST OF PARTICIPANTS CITY OF LA QUINTA www.la-guinta.org John Falconer Finance Director P.O. Box 1504 78-495 Calle Tampico La Quinta, California 92247 (619) 777-7150 DISCLOSURE CONSULTANT & DISSEMINATION AGENT Willdan Financial Services* (formerly Munifinancial) Temecula, California 92590 (951)587-3500 Report available for viewing @ www.wilidan.com UNDERWRITER Miller & Schroeder Financial, Inc. BOND COUNSEL Rutan & Tucker, LLP Costa Mesa, California FISCAL AGENT Brad Scarbrough U.S. Bank Trust, N.A. 633 West 5th Street, 24th Floor Los Angeles, California 90071 (213) 615-6047 In its role as Disclosure Consultant and Dissemination Agent, Willdan Financial Services has not passed upon the accuracy, completeness or fairness of the statements contained herein. 1. INTRODUCTION Pursuant to an Official Statement dated November 15, 1996 the La Quinta Financing Authority (the "Authority") issued $8,790,000 1996 Lease Revenue Refunding Bonds (La Quinta City Hall Project) (the "Bonds") to refinance the Authority's previously issued Local Agency Revenue Bonds, Series 1991 (City Hall Project). The City of La Quinta, (the "City") which comprises approximately 35.1 square miles, is located in the Coachella Valley, twenty miles from Palm Springs and 127 miles from Los Angeles. The Bonds are payable solely from the lease payments relating to the La Quinta City Hall Project, and amounts held in certain funds and accounts established under a trust agreement. The City has covenanted to provide for the lease payments in its annual budget and to make the necessary appropriation for such payments. However, the Bonds and the obligation of the City to make lease payments does not constitute an obligation for which the City is obligated to levy or pledge any form of taxation. Neither the Bonds nor the obligation of the City to make lease payments constitutes an indebtedness of the City, the State of California or any political subdivisions thereof within the meaning of any constitutional or statutory debt limit or restriction. This Annual Continuing Disclosure Information Statement is being provided pursuant to a covenant made by the City and the Authority for the benefit of the holders of the Bonds and includes the information specified in a Continuing Disclosure Agreement. For further information and a more complete description of the City, the Authority and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the Authority and the City and by sources, which are believed to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Continuing Disclosure Information Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Continuing Disclosure Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the Authority and the City or any other parties described herein. 20007/08— 1996 Lease Rev City of La Quinta 1 It- BOND INFORMATION A. PRINCIPAL OUTSTANDING Bonds As of June 30, 2008 1996 Lease Revenue Bonds $5,540,000 B. FUND BALANCES Fund Reserve Fund I'I $689,350 2008 (1) The Reserve Fund is funded by a Reserve Account Surety Bond issued by the MBIA Insurance Corporation. Ill. FINANCIAL INFORMATION The audited financial statements for the City for the Fiscal Year Ended June 30, 2008 and the Adopted Budget for fiscal year 2008/09 will be separately filed with the Nationally Recognized Municipal Securities Information Repositories and are hereby incorporated by reference into this Annual Continuing Disclosure Information Statement. IV. OPERATING INFORMATION A. GENERAL FUND EXPENDITURES BY FUNCTION Fiscal Year Ending General Public Public Community Planning & Capital June 30 Government Safety Works Service Development Projects Total 1999 $2,473,241 $4,468,294 $1,546,650 $732,741 $626,074 $0 $9,847.000 2000 2,814,604 4,992,811 1,704,996 768,528 748,949 0 11,029,888 2001 3,063,641 5,636,154 1,417,528 817,460 733,579 0 11,668,362 2002 2,954,060 7,609,121 1,536,033 1,014,474 726,589 0 13,840,277 2003 3,140,576 8,202,407 2,311,436 991,558 674,450 0 15,320,427 2004 3,892,220 9,672,180 3,130,794 1,025,397 750,444 0 18,444,035 2005 3,765,511 12,364,583 4,794,685 1,104,509 862,890 0 22,892,178 2006 4,426,484 13,029,187 5,044,896 1,248,308 955,569 0 24,704,444 2007 5,246,378 15,634,761 5,019,859 2,994,586 1,384,466 0 30,280,050 2008 6,566,585 17,142,443 5,075,195 2,914,422 1,209,935 0 32,908,580 20007/08— 1996 Lease Rev City of La Quints B. GENERAL FUND REVENUE BY SOURCE Fiscal Year Licenses Charges Ending and Inter- for Rental June 30 Taxes Permits Governmental Services Interest Income Miscellaneous Total 2001 $10,331,970 $2,057.423 $2,164,891 $1,998,589 $2,513,789 $0 $43,545 $19,110,207 2002 10,443,436 1,857,691 3,683,490 1,757,744 2,030,346 0 529,190 20,301,897 2003 11,572.985 1,982,127 4,394,045 2,302,759 1,894,03 0 87,240 22,233,459 2004 13,184,050 3,096,145 4,895,986 2,619,578 2,335,154 0 109,338 26,240,301 2005 16,762,028 3,226,167 7,552,035 3,402,602 3,238,808 0 513,030 34,694,670 2006 19,259,829 5,145,430 6,530,777 2,180,058 4,115,872 123,500 315,812 37,671,278 2007 21,594,996 2,788.882 7,400,101 1,544,190 5,188,103 0 504,144 39,020,416 2008 22,665,855 2,107,035 9,142,554 1,213,519 5,239,652 0 668,4710) 41,036,986 ftl Includes Contribution from property owners of $154,417 and Fines and forfeitures of $359,114 C. PROPERTY TAX LEVIES AND COLLECTIONS Fiscal Year Total Current Percent Collections in Total Ending Tax Tax of Levy Subsequent Collections June 30 Levy Collection Collected Years to Tax Levy 2006 $60,716,047 $73,097,360 120.39% $2,092,065 123.84% 2007 79,252,191 74,533,984 93.46% 1,802,076 95.72% 2008 84,100,395 87,804,912 10440% 3,216,547 108.23% Note: The amounts presented include City property taxes and Redevelopment Agency lax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed -through to other agencies. Source: County of Riverside Auditor Controller's Office D. SCHEDULE OF NET TAXABLE VALUE Fiscal Year Assessed Net Ending Secured Unsecured Property Less Taxable June 30 Property Property Value Exemptions Value 2001 $3,162,945,116 $30,599,753 $3.193,544,869 ($50,149,068) $3,143,395,801 2002 3,789,678,041 32,607,713 3,822,285,754 (54,726,303) 3,767,559,451 2003 5,412,382,710 40,940,877 5,453,323,587 (95,420,075) 5,357,903,512 2004 6,289,493,552 44,014,548 6,333,508,100 (113,037,003) 6,220,471,097 2005 7,856,383,375 72,554,357 7,928,937,732 (115,071,146) 7,813,866,586 2006 9,986,151,525 88,740,840 10,074,892,365 (99,245,721) 9,975,646,644 2007 11,854,669,637 101,433,002 11,956,102,639 (89,688,505) 11,866,414,134 2008 12,410,626,893 113,185,065 12,523,811,958 (107,777,195) 12,416,034,763 Source: County of Riverside Auditor -Controller 20007/08-1996 Lease Rev City of La Quinta E. SCHEDULE OF DIRECT AND OVERLAPPING DEBT City Assessed Valuation $ 4,607,425.776 Redevelopment Agency Incremental Valuation 7,808,608,987 Total Assessed Valuation $ 12,416,034,763 Source: Riverside Comity Auditor Controller Estimated Share of Percentage Outstanding Overlapping Applicable' Debt 6130108 Debt Overlapping Debt Repaid with Property Taxes And Assessments: Desert Community College District 7.438% $ 337,870,330 25,130,795 Coachella Valley Unified School District 29.508% 93,982,458 27,732,344 Desert Sands Unified School District (DSUSD) 7.8366A 214,839,044 16,834,787 DSUSD Lease Tax Obligations 7.836% 13,590,000 1,064,912 Coachella Valley County Water District I.D. No. 55 83.015% 4,590,000 3,810,389 Coachella Valley County Water District J.D. No. 58 6.80996 2,160,000 147,074 DSUSD Community Facilities District No.1 100.000% 1,945,000 1,945,000 City of La Quints 1915 Act Bonds 100.0000% 1,705,000 1,705,000 Coachella Valley Water District Assessment District No. 68 86.247% 2,255.000 1,944,870 Total overlapping debt repaid with property taxes 672,936,832 $0,315,171 Overlapping Other Debt including Certifications of Participation (COP) Riverside County General Fund Obligations 1.516% Riverside County Pension Obligations 1.516% Riverside County Board of Education COP 1.516% Coachella Valley Unified School District COP 29.508% DSUSD COP 7.836% Coachella Valley County Water District I.D. No. 71 COP 10.850% Coachella Valley Recreation and Park District COP 12.5I 1% Total overlapping otter debt Total overlapping debt City direct debt Total direct and overlapping debt $ 701,562,556 10,635,688 387,995,000 5,882,004 9,275,000 140,609 53,930,000 15,884,156 12,420,000 973,231 6,390,000 693,315 2,510,000 314,026 1,173,982,556.... 34,523,029 $ 1,173,982,556 114,838,200 240,664,278 S 355,502.478 Notes: t For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental Units taxable assessed value that is within dte city's boundaries and dividing it by each unit's total taxable assessed value. Overlapping governments are those that coincide, at least in pan, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is bome by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government Source: California Municipal Statistics, Inc: overlapping debt Source: City of la Quints . City Direct debt 20007/08-1996 Lease Rev City of La Quinta F. COMPUTATION OF LEGAL DEBT MARGIN (JUNE 30, 2008) Net Assessed Valuation $12,416,034,763 Debt Limit -15 % of Assessed Valuation 1,862,405,214 Amount of Debt Applicable to Debt Limit 0 Legal Debt Margin $1,862,405,412 Note: Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the City. The City of La Quinta has no general bonded indebtedness. G. REVENUE BOND COVERAGE H Local Agency Revenue Bonds (City Hall Project) Fiscal Year Debt Service Requirements Ending Revenue Available June 30 for Debt Service Principal Interest Total Coverage 2001 $678,955 $260,000 $418,955 $678,955 1.00 2002 682,178 275,000 407,178 682,178 1.00 2003 679,435 285,000 394,435 679,435 1.00 2004 680,830 300,000 380,830 680,830 1.00 2005 681,220 315,000 366,220 681,220 1.00 2006 680,575 330,000 350,575 680,575 1.00 2007 678,865 345,000 333,865 678,865 100 2008 675,880 360,000 315,880 675,880 1.00 Note: Revenue available consists of payments from the City General Fund, Civic Center Development Impact Fee Fund and the Redevelopment Agency Capital Project Fund. DEMOGRAPHIC STATISTICS Calendar Year 2008 City Land (Sq. Miles) (3) 35.31 Population (1) 42,958 Median Household Income (in dollars) (4) $74,683 Number of Dwelling Units (3) 21,058 Persons per Household (3) 2.851 Average Income per person per household $26,195 Labor Force (2) 15,200 Employment (2) 14,600 Unemployment Rate (2) 3.95% Median Age (4) 36.4 (1) Slate of California Department of Finance - January 1 of each year (2) State of California Economic Development Department websile (3) City of La Quints Building & Safety and Community Development Departments (4) Desert Wheeler's Newsletter City Overview 20007/08- 1996 Lease Rev City of La Quinta 5 J. PRINCIPAL TAXPAYERS (JUNE 30, 2008) Percent of Total Taxable City Taxable Taxpayer Assessed Value Assessed Value KSL Desert Resort, Inc. $381,086,929 3.07% TO Desert Development 47,028,524 0.38% Sams Real Estate Trust / Wal Mart 36,819,850 0.30% Village Resort 33,146,143 0.27% Quarry at La Quints, Inc. 31,377,029 0.25% CNL Desert Resort 26,665,873 0.21% Fourth Quarter Properties XLIII 26,491,514 0.21% WKL Canyon Ridge Associates 24,531,000 0 20% Aventine Development 22,350,100 0.18% Apartment at La Quints Village II 20,194,087 0 16% One Eleven La Quints 15,950,227 0.13% Total $665,641,276 5.36% Note. The amounts shown above include assessed value data for both the City and Redevelopment Agency. MAJOR EMPLOYERS (JUNE 30, 2008) Employer Employees Activity Desert Sands Unified School District 2,398 Government La Quints Resort & Club 1,550 Hotel & Golf Resort Wal-Mart Super Center 400 Retailer Costco 207 Retailer Rancho La Quints 200 Golf Resort Imperial Irrigation District 200 Public Utility Target 185 Retailer Lowe's Home Improvement 150 Retailer Stater Brother's 150 Grocery Store Home Depot 147 Retailer Total Employment Listed 5,587 Total City Employment —July 1 14,600 20007/08— 1996 Lease Rev City of La Quetta 6 K. SCHEDULE OF INSURANCE IN FORCE (JUNE 30, 2008) Company Name Policy Number Coverage Limits Term Premium Hartford 72BPEEW0254 Employee Dishonesty, $1,000,000 12/03/08 -09 $3,013 Forgery, Computer Fraud American Wholesale 5467276 Pacific Ins ZG0036449 Endurance Ins 10000326200 California N/A Joint Powers Insurance Authority California N/A Joint Powers Insurance Authority All Risk Property Insurance 40,900,000 07/01/07 - 09 Including Auto Physical Damage (Excluding Earthquake) Earthquake & Flood, Real & 7,500,000 02/07/07 -09 Personal Property Including Contingent Tax Interruption Comprehensive General Liability $0 Deductible 07/01/07-09 Retention $50 Million Worker's Compensation 5,000,000 07/01/07 - 09 L. CASH AND INVESTMENTS (JUNE 30, 2008) Cash and Investments 59,258 131,630 281,125 175,642 Cash and investments as of June 30, 2008, are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments Cash with fiscal agent Statement of Fiduciary Net Assets: Cash and investments Total cash and investments Cash and investments as of June 30, 2008, consist of the following: Cash on hand Deposits with financial institutions Investments Total cash and investments $ 165,927,887 40,831,407 609,164 $ 197.368,458 $ 1,250 (1,533,145) 198,900,353 $ 197,368,458 20007108- 1996 Lease Rev City of La Quinta 7 L. REPORTING OF SIGNIFICANT EVENTS The Continuing Disclosure Covenants outline the Significant Events that must be reported if they are deemed material. None of the items below has occurred or has been previously reported during the fiscal year ended June 30, 2008. 1. Principal and interest payment delinquencies on the Bonds. 2. Non-payment related defaults. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions or events affecting the tax-exempt status of the security. 7. Modifications to rights of security holders. 8. Contingent or unscheduled bond calls. 9. Defeasances. 10. Release, substitution, or sale of property securing repayments of the securities. 11. Rating changes. V. SUBSEQUENT EVENTS The rating of MBIA, Bond Insurer for the 1996 Bonds, has changed. A Material Event Notice has been disseminated regarding this matter. 20007/08— 1996 Lease Rev City of La Quinta LA QUINTA FINANCING AUTHORITY $90,000,000 LOCAL AGENCY REVENUE BONDS 2004 SERIES A Riverside County, California Dated: June 29, 2004 CUSIP: 50420A 2008 ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT As of December 16, 2008 Also available at: WILLDAN AN (_...j Financial S0 www.willdanxom LIST OF PARTICIPANTS CITY OF LA QUINTA www.ia-guinta.org John Falconer Finance Director P.O. Box 1504 78-495 Calle Tampico La Quinta, California 92247 (760) 777-7150 DISCLOSURE CONSULTANT & DISSEMINATION AGENT Willdan Financial Services` (formerly Munifinancial) Temecula, CA 92590 (951) 587-3500 Report available for viewing (& www.wilidan.com UNDERWRITER Stone & Youngberg BOND COUNSEL Stradling, Yocca, Carlson & Rauth Newport Beach, California FISCAL AGENT Brad Scarbrough U.S. Bank Trust, N.A. 633 West 5th Street, 24th Floor Los Angeles, California 90071 (213) 615-6047 In its role as Disclosure Consultant and Dissemination Agent, vvniean Financial Services has not passed upon ,,,G accuracy, completeness or fairness of the statements contained herein. INTRODUCTION Pursuant to an Official Statement dated June 21, 2004, the La Quinta Financing Authority (the "Authority") issued $90,000,000 Local Agency Revenue Bonds, 2004 Series A (the "Bonds") to provide a loan to the La Quinta Redevelopment Agency (the "Agency") to finance affordable low and moderate housing in or of benefit to the Community Redevelopment Project Areas No. 1 and 2 (collectively the "Redevelopment Projects") and to advance refund the Agency's Redevelopment Project Areas No. 1 and No. 2, 1995 Housing Tax Allocation Bonds of which $19,955,000 are currently outstanding (the "1995 Bonds"). The City of La Quinta, (the "City") which comprises approximately 35.1 square miles, is located in the Coachella Valley, twenty miles from Palm Springs and 127 miles from Los Angeles. Redevelopment Project Area No. 1, (the "Project Area No. 1") encompasses an area of approximately 11,200 acres, which includes approximately 50.3% of the current area of the City. Redevelopment Project Area No. 2 (the "Project Area No. 2") encompasses an area of approximately 3,116 acres north of Project Area No. 1. The objective of the Agency is to eliminate or reduce the many instances of economic, physical or social blight presently existing within the boundaries of the Redevelopment Projects. The Bonds were sold by the Agency for the purpose of increasing, improving and/or preserving the supply of low and moderate income housing within the Redevelopment Projects. The Bonds are special obligations of the Agency and are secured by a pledge of Housing Set - Aside Tax Revenues, as defined in the Official Statement. The Agency also has outstanding Tax Allocation Refunding Bonds, Series 1994 (the "1994 Bonds'), a portion of the debt service on which is payable prior to the Bonds from Tax Revenues required to be deposited in the Project Area No. 1 Low and Moderate Income Housing Fund. The Bonds are not a debt of the City, the State of California, or any of its political subdivisions and neither the City, the State of California, nor any of its political subdivisions is liable. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction. This Annual Continuing Disclosure Information Statement is being provided pursuant to a covenant made by the Agency for the benefit of the holders of the Bonds and includes the information specified in a Continuing Disclosure Certificate. For further information and a more complete description of the Agency and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the Agency and by sources, which are believed to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Continuing Disclosure Information Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Continuing Disclosure Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the Agency or any other parties described herein. 2007108, 2004 Revenue City of La Quinta 11. BOND INFORMATION A. PRINCIPAL OUTSTANDING Bonds As of October 9, 2008 Loral Agency Revenue Bonds, 2004 Series A $84,560,000.00 B. FUND BALANCES Fund As of October 9, 2008 Reserve Fund $5,950,356.67 /it. FINANCIAL INFORMATION The audited financial statements for the Agency for the fiscal year ended June 30, 2008 will be separately filed with the Nationally Recognized Municipal Securities Information Repositories and are hereby incorporated by reference into this Annual Continuing Disclosure Information Statement. IV. OPERATING INFORMATION A. ASSESSED VALUATIONS The following table set forth the Taxable Values and the Gross Tax Increment for the Redevelopment Project Areas. Area No. 1 Fiscal Secured Unsecured Utility Total Taxable Taxable Value Gross Tax Year Value Value Value Value Above Base 0) Increment 1999/00 $1,627,578,717 $8,034,814 $0 $1,635,613,531 $1,436,215,298 $15,659,371 2000/01 1,927,812,440 14,948,366 0 1,942,760,806 1,743,362,573 18,685,564 2001/02 2,287,724,601 14,486,563 0 2,302,211,164 2,102,812,931 20,929,840 2002/03 2,688,732,575 13,980,069 0 2,702,712,644 2,503,314,411 26,357,623 2003/04 3,062,917,787 13,537,804 0 3,076,455,591 2,877,057,358 29,958,693 2004/05 3,411,082,100 13,813,852 0 3,424,895,952 3,225,497,719 33,867,116 2005/06 3,956,642,179 29,248,534 0 3,985,890,713 3,786,492,480 45,632,751 2006/07 4,779,973,573 34,084,343 0 4,814,057,916 4,614,659,683 52,536,879 2007108 5,210,779,209 34,173,241 0 5,244,952,450 5,045,554,217 54,345,390 2008/09 5,246,680,334 31,678,392 0 5,278,358,726 5,078,960,493 N/A (1) The Base Value for the Project Area No 1 is $199,398,233 Source: Riverside County and Audited Financial Statements of the La Quints Redevelopment Agency. 2007108, 2004 Revenue City of La Quinta PROJECT AREA NO. 2 Fiscal Secured Unsecured Utility Total Taxable Taxable Value Gross Tax Year Value Value Value Value Above Base (1) Increment 1999100 $653,544,147 $5,472,923 $0 $659,017,070 $563,834,315 $6,127,144 2000/01 790,754,123 9,600,421 0 800,354,544 705,171,789 7,587,996 2001/02 1,003,653,582 12,084,137 0 1,015,737,719 920,554,964 9,004,474 2002103 1,260,121,204 14,535,754 0 1,274,656,958 1,179,474,203 12,396,203 2003/04 1,510,073,642 20,167,571 0 1,530,241,213 1,435,058,458 15,158,339 2004/05 1,745,868,028 21,504,380 0 1,767.372,408 1,672,189,653 17,546,203 2005/06 2,080,975,290 32,295,383 0 2,113,270,673 2,018,087,918 24,812,367 2006/07 2,420,689,543 42,208,337 0 2,462,897,880 2,367,715,125 25,971,446 2007/08 2,724,518,603 50,446,080 0 2,774,964,683 2,679,781,928 28,859,688 2008109 2,805,349,012 61,576,037 0 2,866,925,049 2,771,742,294 N/A (1) The Base Value for the Project Area No. 2 is $95,182,755. Source: Riverside County and Audited Financial Statements of the La Quinta Redevelopment Agency. B. HOUSING SET -ASIDE REVENUE The following table sets forth the Housing Set -Aside revenue for the Redevelopment Project Areas. PROJECT AREA NO.1 Total Taxable Gross Tax Housing Fiscal Year Value Increment Set Aside 1998/99 $1,445,536,682 $12,877,280 $2,575,456 1999/00 1,635,613,531 15,659,371 3,131,874 2000/01 1,942,760,806 18,685,564 3,737,113 2001/02 2,302,211,164 20,929,840 4,488,487 2002/03 2,702,712,644 26,357,623 5,271,524 2003/04 3,076,455,591 29,958,693 5,991,739 2004/05 3,985,890,713 33,867,116 6,773,423 2005/06 4,814,057,916 45,632,751 9,126,550 2006/07 5,244,952,450 52,536,879 10,507,377 2007/08 5,278,358,726 54,345,390 10,869,078 Source. Audited Financial Statements of the La Quinta Redevelopment Agency and the Statement of Indebtedness filed Nth the Riverside County Auditor -Controller's Office. PROJECT AREA NO.2 Total Taxable Gross Tax Housing Fiscal Year Value Increment Set Aside 1998199 $563,669,127 $5,085,079 $1,017,016 1999/00 659,017,070 6,127,144 1,225,429 2000101 800,354,544 7,587,996 1,517,600 2001/02 1,015,737,719 9,004,474 2,025,212 2002/03 1,274,656,958 12,396,203 2,479,241 2003104 1,530,241,213 15,158,339 3,031,668 2004/05 2,113,270,673 17,546,203 3,509,241 2005/06 2,462,897,880 24,812,367 4,962,474 2006/07 2,774,964,683 25,971,446 5,194,289 2007/08 2,866,925,049 28,859,688 5,771,938 Source: Audited Financial Statements of the La Quints Redevelopment Agency and the Statement of Indebtedness filed with the Riverside County Auditor -Controllers Office 2007/08, 2004 Revenue City of La Quinta C. LAND USE PROJECT AREA NO. 1 Land Use 2008109 Total Secured Value Percent of Total Residential $4,471,424,726 8382% Commercial 539,217,129 10.11 % Timeshare Estates 33,020,330 062% Vacant 282,051,845 5.29% Miscellaneous/Unknown 9,011,342 0.17% Total Project Area No. 1 $5,334,725,372 100.00% Source: County of Riverside 2008/09 Secured Property Roll, as compiled by Wlldan Financial Services. PROJECT AREA NO. 2 2008109 Total Percent Land Use Secured Value of Total Residential $2,122,206,608 75,31% Commercial 600,010,603 21.29% Apartments 21,801,189 0.77% Vacant 49,699,463 1.76% Miscellaneous/Unknown 24,333,071 0.86% Total Project Area No. 2 $2 818,050,934 100.00% Source County of Riverside 2008/09 Secured Property Roll, as compiled by Wlldan Financial Services. D. DEBT SERVICE COVERAGE The following table sets forth the debt service for the Bonds and the portion of debt service on the 1994 Bonds payable from Housing Set -Aside revenue. 1994 Bonds Total Debt Debt Service Payable Fiscal Debt Service Service From Housing Housing Debt Service Year Payment Payment ('( Set -Aside Set -Aside (') Coverage 2003/04 $1,352,853 $490,521 $1,843,374 $9,023,407 4.89 2004/05 5,183,006 490,771 5,673,777 10,282,664 1.81 2005/06 5,945,956 490,728 6,225,306 14,086,024 2.18 2006/07 5,950,356 491,050 6,441,406 15,701,666 2.44 2007108 5,948,256 490,676 6,438,932 16,641,016 2.58 (1) Represents the 18.5% portion of annual debt service on the 1994 Bonds to which the Agency has allocated Housing Set -Aside revenue derived from Project Area No. 1. (2) Housing Set -Aside includes revenue from Project Area No. 1 and Project Area No 2. 2007108, 2004 Revenue City of La Qwnta E. ANNUAL DEBT SERVICE The following table sets forth the annual debt service for the Bonds and the portion of debt service for 1994 Bonds payable from the Housing Set -Aside revenue. Information contained in the table below was gathered and verified from the corresponding Official Statements. Maturity Date 1994 Bonds Annual Total September 1 Debt Service I'I Principal Interest Debt Service Combined 2008 $490,676.43 $1,615,000 $2,166,628.13 $5,948,256.25 $6,438,932.68 2009 490,464.60 1,670,000 2,138,365.63 5,946,731.25 6,437,195.85 2010 490,279.60 1,740,000 2,104,965.63 5,949,931.25 6,440,210.85 2011 490,911.38 1,805,000 2,070,165.63 5,945,331.25 6,436,24263 2012 490,307.35 1,890,000 2,029,553.13 5,949,106.25 6,439,413.60 2013 1,975,000 1,987,028.13 5,949,056.25 5,949,056.25 2014 2,075,000 1,937,653.13 5,950,306.25 5,950,306.25 2015 2,175,000 1,885,778.13 5,946,556.25 5,946,556.25 2016 2,290,000 1,828,684 38 5,947,368.75 5,947,368.75 2017 2,410,000 1,768,571.88 5,947,143.75 5,947,143.75 2018 2,535,000 1,705,309.38 5,945,618.75 5,945,618.75 2019 2,670,000 1,638,7155.63 5,947,531.25 5,947,531.25 2020 2,810,000 1,568,678.13 5,947,356.25 5,947,356.25 2021 2,960,000 1,494,915.63 5,949,831.25 5,949,83125 2022 3,115,000 1,417,215.63 5,949,431.25 5,949,431.25 2023 3,275,000 1,335,446.88 5,945,893.75 5,945,893.75 2024 3,450,000 1,249,478A3 5,948,956.25 5,948,956.25 2025 3,630,000 1,158,91563 5,947,831.25 5,947,831.25 2026 3,810,000 1,068,165.63 5,946,331.25 5,946,331.25 2027 4,000,000 972,91563 5,945,831.25 5,945,831.25 2028 4,200,000 872,91563 5,945,831.25 5,945,83125 2029 4,410,000 767,915.63 5,945,83125 5,945,83125 2030 4,635,000 657,665.63 5,950,331 25 5,950,331 25 2031 4,870.000 538,893.75 5,947,787 50 5,947,787 50 2032 5,120,000 414,100.00 5,948,200.00 5,948,200.00 2033 5,380,000 282,900.00 5,945,800.00 5,945,800.00 2034 5,660,000 145,037 50 5,950,075.00 5,950,075.00 (1) Represents the 18.5% of annual debt service on the 1994 Bonds to which the Agency has allocated Housing Set -Aside revenue derived from Project Area No. 1. 2007108, 2004 Revenue City of La Quinta F. REPORTING OF SIGNIFICANT EVENTS The Continuing Disclosure Covenants outline the Significant Events that must be reported if they are deemed material. None of the items below has occurred or has been previously reported during the fiscal year ended June 30, 2008. 1. Principal and interest payment delinquencies on the Bonds. 2. Non-payment related defaults. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. Adverse tax opinions or events affecting the tax-exempt status of the security. 7. Modifications to rights of security holders. 8. Contingent or unscheduled bond calls. 9. Defeasances. 10. Release, substitution, or sale of property securing repayments of the securities. 11. Rating changes. V. SUBSEQUENT EVENTS The rating of Ambac, Bond Insurer for the 2004 Bonds, has changed. A Material Event Notice has been disseminated regarding this matter. 2007108, 2004 Revenue City of La Quinta 141 11WV1111vIC1V I L LA QUINTA FINANCING AUTHORITY $8,790,000 1996 LEASE REVENUE REFUNDING BONDS (LA QUINTA CITY HALL PROJECT) Riverside County, California Dated: November 15,1996 CUSIP: 50419R Material Event Notice As of July 23, 2008 Also available at: lWILLDAN Financial Services Imnm www.willdanxom NOTICE OF MATERIAL EVENT $8,790,000 La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds (La Quinta City Hall Project) Ratings Change On June 5, 2008, Standard and Poor's Rating Service ("S&P") downgraded MBIA Insurance Corporation ("MBIA") from "AAA" to "AA". On June 19, 2008, Moody's Investors Service ("Moody's") downgraded MBIA from 'Aaa" to 'A2". MBIA is the Bond Insurer for the $8,790,000 La Quinta Financing Authority's (the "Authority") 1996 Lease Revenue Refunding Bonds (the "Bonds"). An explanation of the significance of the rating downgrade may be obtained from S&P and Moody's. Although the rating downgrade by S&P and Moody's reflects MBIA's financial ability to comply with the terms of its policy of insurance, such rating downgrade is not a measure or reflection of the Authority's underlying ability to pay principal and interest on the Bonds. This Material Event Notice is dated July 23, 2008. LA QUINTA FINANCING AUTHORITY $8,790,000 1996 LEASE REVENUE REFUNDING BONDS (LA QUINTA CITY HALL PROJECT) Riverside County, California Dated: November 15,1996 CUSIP: 50419R Material Event Notice As of December 1, 2008 Also available at: WILLDAN Financial Sarvion www.wilidan.com NOTICE OF MATERIAL EVENT $8,790,000 La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds (La Quinta City Hall Project) Ratings Change On November 7, 2008, Moody's Investors Service ("Moody's") downgraded MBIA Insurance Corporation ("MBIA") from 'A2" to "Baal". MBIA is the Bond Insurer for the $8,790,000 La Quinta Financing Authority's (the "Authority") 1996 Lease Revenue Refunding Bonds (the "Bonds"). An explanation of the significance of the rating downgrade may be obtained from Moody's. Although the rating downgrade by Moody's reflects MBIA's financial ability to comply with the terms of its policy of insurance, such rating downgrade is not a measure or reflection of the Authority's underlying ability to pay principal and interest on the Bonds. This Material Event Notice is dated December 1, 2008. LA QUINTA FINANCING AUTHORITY $900000,000 LOCAL AGENCY REVENUE BONDS 2004 SERIES A Riverside County, California Dated: June 29, 2004 CUSIP: 50420A Material Event Notice As of July 23, 2008 Also available at: WILLDAN I w °' Financial Services m www.willdanxom NOTICE OF MATERIAL EVENT $90,000,000 La Quints Financing Authority Local Agency Revenue Bonds 2004 Series A Ratings Change On June 5, 2008, Standard and Poor's Rating Service ("S&P") downgraded Ambac Financial Group ('Ambac") from 'AAA" to 'AA". On June 19, 2008, Moody's Investors Service ("Moody's") downgraded Ambac from 'Aaa" to 'Aa3". Ambac is the Bond Insurer for the $90,000,000 La Quinta Financing Authority's (the "Authority") Local Agency Revenue Bonds, 2004 Series A (the "Bonds"). An explanation of the significance of the rating downgrade may be obtained from S&P and Moody's. Although the rating downgrade by S&P and Moody's reflects Ambac's financial ability to comply with the terms of its Financial Guaranty Insurance Policy, such rating downgrade is not a measure or reflection of the Authority's underlying ability to pay principal and interest on the Bonds. This Material Event Notice is dated July 23, 2008. LA QUINTA FINANCING AUTHORITY $90, 000, 000 LOCAL AGENCY REVENUE BONDS 2004 SERIES A Riverside County, California Dated: June 29, 2004 CUSIP: 50420A Material Event Notice As of December 1, 2008 AISo available at: WILLDAN 1. Firauldal Swim www.willdan.00m NOTICE OF MATERIAL EVENT $90,000,000 La Quinta Financing Authority Local Agency Revenue Bonds 2004 Series A Ratings Change On November 5, 2008, Moody's Investors Service ("Moody's") downgraded Ambac Financial Group ('Ambac") from'Aa3" to "Baal". On November 19, 2008, Standard and Poor's Rating Service ("S&P") downgraded Ambac from 'AA" to 'A". Ambac is the Bond Insurer for the $90,000,000 La Quinta Financing Authority's (the "Authority") Local Agency Revenue Bonds, 2004 Series A (the "Bonds"). An explanation of the significance of the rating downgrade may be obtained from S&P and Moody's. Although the rating downgrade by S&P and Moody's reflects Ambac's financial ability to comply with the terms of its Financial Guaranty Insurance Policy, such rating downgrade is not a measure or reflection of the Authority's underlying ability to pay principal and interest on the Bonds. This Material Event Notice is dated December 1 2008.