1999 01 05 FAtom. � OZ
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amro
OF INS
La Quinta Financing Authority
Agenda
CITY COUNCIL CHAMBER
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
January 5, 1999 - 2:00 PM
CALL TO ORDER
a. Roll Call
PUBLIC COMMENT
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
a. Approval of Minutes of December 1, 1998
BUSINESS SESSION - None
CONSENT CALENDAR
Beginning Res. No. FA 99-01
1. APPROVAL OF ANNUAL CONTINUING DISCLOSURE FOR THE LA QUINTA FINANCING
AUTHORITY 1996 LEASE REVENUE REFUNDING BONDS FOR FISCAL YEAR END JUNE 30,
1998.
DEPARTMENT REPORTS - None
CHAIR AND BOARD MEMBERS' ITEMS - None
PUBLIC HEARINGS - None
ADJOURNMENT
DECLARATION OF POSTING
I, SAUNDRA L. JUHOLA, Secretary of the La Quinta Financing Authority, do hereby declare that
the forgoing agenda for the La Quinta Financing Authority meeting of January 5, 1999 was posted
on the outside entry to the Council Chamber, 78-495 Calle Tampico and on the bulletin board at
the La Quinta Chamber of Commerce on Thursday, December 31, 1998.
Da December 31, 1998
SAUNDRAL. J OLA, Secretary
La Quinta Financing Authority
Page 2 009
T4hf 4 stP Q"
COUNCIL/RDA MEETING DATE: January 5, 1999
ITEM TITLE:
Approval of Annual Continuing Disclosure
for the La Quinta Financing Authority
1996 Lease Revenue Refunding Bonds
for Fiscal Year End June 30, 1998
RECOMMENDATION:
Receive and File.
FISCAL IMPLICATIONS: - None
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
BACKGROUND AND OVERVIEW:
On November 10, 1994, the Securities and Exchange Commission adopted
amendments to existing federal regulations (Rule 1 5c2-12) for bonds issued after July
3, 1995, requiring issuers of municipal securities (Bond issues) to do 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.
Therefore, attached is the 1997/98 Annual Continuing Disclosure Statement for the
La Quinta Financing Authority 1996 Lease Revenue Refunding Bonds Allocation Bonds
prepared in accordance with the three aforementioned requirements. Additionally, no
announcement of significant events was necessary for Fiscal Year 1997/98.
FINDINGS AND ALTERNATIVES: - Receive and File.
JJohn M. Falc er, Finance Director
Attachment: 1997/98 Annual Continuing Disclosure Statement for the La
Quinta Financing Authority
003
ANNUAL INFORMATION STATEMENT
FOR
FISCAL YEAR ENDED JUKE 305 1998
1996 LEASE REVENUE REFUNDING BONDS
(LA QUINTA CITY HALL PROJECT)
LA QUINTA FINANCING AUTHORITY
CITY OF LA QUINTA
RIVERSIDE COUNTY, CALIFORNIA
004
LIST OF PARTICIPANTS
CITY OF LA QUINTA
John Falconer
Finance Director
P.O. Box 1504
La Quinta, California 92253
(619) 777-7150
DISCLOSURE CONSULTANT & DISSEMINATION AGENT
MBIA MuniFinanciala
Temecula, California 92590
(909) 699-3990
www.muni.com
UNDERWRITER
Miller & Schroeder Financial, Inc.
BOND COUNSEL
Rutan & Tucker, LLP
Costa Mesa, California
FISCAL AGENT
Grace Yang
U.S. Bank Trust, N.A.
Los Angeles, California
(213) 533-8713
* In its role as Disclosure Consultant and Dissemination Agent, MBIA MuniFinanciai has not passed upon the accuracy,
completeness or fairness of the statements contained herein.
005
I. INTRODUCTION
Pursuant to an Official Statement dated November 13, 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 31.18 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 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 Certificate. For further information and a
more complete description of the City, the Authority and the Bonds, reference is made to the
Official Statement.
006
II. AUDITED FINANCIAL STATEMENTS
The audited financial statements for the City for the Fiscal Year Ended June 30, 1998 will be
separately filed with the Nationally Recognized Municipal Securities Information Repositories
and are hereby incorporated by reference into this Annual Information Statement.
III. FINANCIAL AND OPERATING DATA
A. PRINCIPAL OUTSTANDING
Bonds
1996 Lease Revenue Bonds
B. FUND BALANCES
Account
Reserve Fund 1'1
Balance as of October 30, 1998
$ 8,260,000
Balance as of November 18, 1998
N/A
(1) The Reserve Fund is funded by a Reserve Account Surety Bond issued by the MBIA Insurance Corporation.
C. General Fund Expenditures by Function
Fiscal Year
Ending
General
Public
Public
Community
Planning &
Capital
June 30
Government
Safety
Works
Service
Development
Projects
Total
1989
$1,040,895
$1,491,594
(1)
$701,175
(1)
$0
$3,233,663
1990
1,514,110
1,883,105
(1)
928,798
(1)
0
4,326,012
1991
1,968,275
2,501,105
(1)
777,366
(1)
0
5,246,745
1992
1,921,155
2,155,813
$618,612
157,897
$904,171
11,813
5,769,461
1993
1,807,205
2,393,202
600,253
146,686
884,537
0
5,831,883
1994
2,359,673
2,786,575
673,144
119,265
511,416
0
6,450,073
1995
1,565,265
3,143,697
576,304
199,115
538,610
282,113
6,305,104
1996
1,793,301
3,227,438
813,352
413,142
453,656
201,475
6,902,364
1997
2,376,935
3,442,056
889,694
469,110
455,563
170,000
7,803,358
1998
2,229,389
4,099,523
1,159,372
494,402
345,054
0
8,327,740
(1) Prior to fiscal year 1992 Public Works and Planning & Development expenditures were included with Community Service
Source: City of La Quinta Audited Financial Statements
00�
2
v
D.
General Fund Revenue by Source
Fiscal Year
Licenses
Charges
Litigation
Ending
and
Inter-
for
Settlement
Tune 30
Taxes
Permits
Governmental
Services
Proceeds
Interest
Miscellaneous
Total
1989
$2,306,887
$3,656,307
$496,621
(1)
(2)
$368,136
$336,445
$7,164,396
1990
3,154,942
3,286,872
630,791
(1)
(2)
155,530
114,686
7,342,821
1991
3,288,565
785,381
790,880
$602,600
(2)
642,813
101,411
6,211,650
1992
3,135,04-4
576,293
930,503
488,015
(2)
261,380
120,867
5,512,102
1993
3,581,830
622,107
1,157,587
384,000
(2)
238,321
219,641
6,203,486
1994
4,212,604
777,241
1,600,032
469,695
(2)
585,264
1,042,872
8,687,708,
1995
4,946,304
902,914
747,784
551,727
$477,872
718,310
137,028
8,481,939
1996
5,393,456
998,030
815,980
610,873
12,386
905,420
230,705
8,966,850
1997
5,942,698
793,689
1,072,803
976,897
40,593
941,327
22,712
9,790,719
1998
6,764,355
1,144,562
1,110,553
1,228,269
281,382
1,164,145
114,969
11,808,235
(1) Previously included in Licenses and Permits
(2) 1995 was the first year Litigation Settlement Proceeds was identified as a revenue source
Source City of La Quinta Audited Financial Statements
E.
Property Tax Levies and Collections
Fiscal Year
Total
Current
Percent
Delinquent
Total
Ending
Tax
Tax
of Levy
Tax
Collections
June 30
Levy
Collection
Collected
Collections
to Tax Levy
1991
$280,339
$256,297
91.4%
$21,921
99.2%
1992
282,201
260,365
92.3%
25,703
101.4%
1993
282,630
244,731
86.6%
14,824
91.8%
1994
288,407
275,752
95.6%
900
95.9%
1995
549,273
487,043
88.7%
786
88.8%
1996
670,398
643,309
96.0%
2,312
96.3%
1997
824,073
760,350
92.3%
0
92.3%
1998
886,175
980,838
110.7%
0
110.7%
Note 1. Proposition 13 limits cities to levying a tax rate for bonded indebtedness only after 1978.
2. Levies and collections are for General Fund only excluding no -low and supplemental property taxes.
3. Detail prior to fiscal year 1991 not available.
Source: City of La Quinta and County of Riverside
F.
Schedule of Net Taxable Value
Fiscal Year
Assessed
Less
Less
Net
Ending
Secured Unsecured
Property
Property
Homeowner's
Taxable
Tune 30
Property Pro a
Value
Exemptions
Exemptions
Value
1991
$1,278,307,230 $7,156,844
$1,285,464,074
$3,474,595
(1)
$1,281,989,479
1992
1,594,767,374 6,396,816
1,601,164,190
3,605,829
(1)
1,597,558,361
1993
1,773,323,102 6,943,559
1,780,266,661
3,814,434
(1)
1,776,452,227
1994
1,872,768,156 8,119,527
1,890,887,683
3,946,378
$18,901,202
1,858,040,103
1995
1,927,834,908 22,822,285
1,950,657,193
4,357,954
20,518,400
1,925,780,839
1996
2,043,276,054 23,801,872
2,067,077,926
6,936,774
22,399,068
2,037,742,048
1997
2,164,204,951 22,511,720
2,186,716,671
6,919,376
22,407,418
2,157,389,877
1998
2,305,593,997 18,844,880
2,324,438,867
9,676,787
24,877,018
2,289,885,062
Note: Detail
prior to fiscal year 1991 not available
(1) Homeowner's
exemption not available
008
Source:
County of Riverside
3
i)1
G. Property Tax Rate - Direct and Overlapping Governments
(Per $100 of Assessed Value)
1997/98
1996/97
1995/96
1994/95
1993/94
General
1.00000
1.00000
1.00000
1.00000
1.00000
Desert Sands Unified
0.09750
0.09750
0.09750
0.09750
0.09750
College of the Desert
0.00000
0.00000
0.00000
0.00000
0.00000
Coachella Valley Water District
0.02080
0.02090
0.02080
0.02090
0.02080
Total Tax Rate
1.11830
1.11830
1.11830
1.11830
1.11830
Source: County of Riverside
H. Special Assessment Billings and Collections
Year Ended
Special Assessment
Special Assessment
Ratio of Collections
June 30
Billings
Collections (I
to Billings
1991
$355,924
$335,177
99.8
1992
557,574
552,249
99.0
1993
559,029
548,291
98.8
1994
766,011
734,560
95.9
1995
836,502
737,700
88.2
1996
729,647
699,351
95.8
1997
791,012
757,256
95.7
1998
791,012
761,109
96.2
(1) Includes Prepayments and Foreclosures
Source: Riverside County Assessor's Office as compiled by MBIA Muni Financial.
I. Schedule of Direct and Overlapping Bonded Debt (June 30, 1998)
Percent
June 30, 1998
Direct and Overlapping Bonded Debt
Applicable 0)
Bonded Debt
Riverside County General Fund Obligations
1.022
$5,901,318
Riverside County Board of Education Certificates of Participation
1.022
202,633 .
Desert Community College District Certificates of Participation
3.866
93,403
Desert Sands Unified School District Certificates of Participation
9,176
2,478,983
Desert Sands Unified School District Lease Tax Obligation
9.176
7,995,457
Coachella Valley County Water District, I.D. #55
69.767
8,281,343
Coachella Valley County Water District, I.D. #58
1.939
175,867
Coachella Valley County Water District, I.D. #71 Storm
6.410
990,025
Water Unit Certificates of Participation
Coachella Valley Unified School District
4.827
482,700
City of La Quinta Certificates of Participation
100.000
8,505,0001�>
City of La Quinta 1915 Act Bonds
100.000
4,525,000
Total Direct and Overlapping Bonded Debt
$39,631,729
(1) Based on 1996/97 ratios.
(2) Excludes tax allocation bonds to be sold
(3) Excludes tax and revenue anticipation notes, revenue, mortgage revenue
and tax allocation bonds and nonbonded
capital lease obligations.
Source: California Municipal Statistics, Inc
4
009
J. Computation of Legal Debt Margin (June 30, 1998)
Assessed Valuation $2,324,438,867
Debt Limit - 15 % of Assessed Valuation 348,665,830
Amount of Debt Applicable to Debt Limit 0.000
Legal Debt Margin $348,665,830
Notes: 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.
Source: City of La Quinta
K. Revenue Bond Coverage
Local Agency Revenue Bonds (City Hall Project)
Fiscal Year
Debt Service Requirements
Ending Revenue Available
June 30 for Debt Service
Principal
Interest
Total
Coverage
1992 $182,784
$0
$192,784
$192,784
1.00
1993 548,352
0
548,352
548,352
1.00
1994 548,352
0
548,352
548,352
1.00
1995 699,477
155,000
544,477
699,477
1.00
1996 696,402
160,000
536,402
696,402
1.00
1997 607,950
170,000
437,950
607,950
1.00
1998 734,623
285,000
449,623
734,623
1.00
Note: Revenue available consists of lease payments
made by the City of La Quinta
to the La
Quinta
Financing Authority.
Source: City of La Quinta
L. Demographic Statistics
Total
Population
Riverside
Fiscal Year Square
Percent
County
City
Population
Ending Miles Population (I) Change
Population 0)
Percent of County
1988 23.2 9,274
13.3%
983,800
0.9%
1989 23.2 10,267
10.7%
1,057,200
1.0%
1990 23.3 10,587
3.1%
1,144,400
0.9%
1991 23.8 13,070
23.5%
1,225,800
1.1%
1992 28.0 14,727
12.7%
1,281,000
1.1%
1993 28.2 15,589
5.9%
1,323,500
1.2%
1994 28.2 16,680
7.0%
1,357,400
1.2%
1995 31.2 17,591
5.5%
1,393,500
1.3%
1996 31.2 18,050
2.6%
1,381,879
1.3%
1997 31.2 18,931
4.9%
1,379,956
1.4%
1998 31.2 20,444
8.0%
1,441,237
1.4%
Source: (1) City of La Quinta
(2) State of California Department of Finance
010
5 1�1
M. Property Value and Construction Activities
N.
Fiscal Year
Ending
June 30
1991
1992
1993
1994
1995
1996
1997
1998
Property
Value 0)
$1,278,307,230
1,594,767,374
1,773,323,102
1,872,768,156
1,927,834,908
2,043,276,054
2,164,204,951
2,305,593,987
Commercial
Con.truction
Units Value
3
$7,299,000
12
7,334,871
7
2,441,392
13
6,081,796
4
1,100,119
8
1,018.940
11
1,876,747
14
2,689,642
Note:: Detail prior to fiscal year 1991 not available
(1) From Schedule of Net Taxable Value
Source: City of La Quinta
Principal Taxpayers (June 30, 1998)
Taxpayer
KSL La Quinta Hotel Corporation
KSL PGA West Corporation
Sunrise Desert Partners
KSL Landmark Corporation
KSL Land Corporation
KSL La Quinta Corporation
TD Desert Development
La Quinta Golf Properties, Inc.
M & H Realty Partnership
Washington Adams Partnership
Source: City of La Quinta
Major Employers (June 30, 1998)
Employer Emplovees
La Quinta Hotel and Golf Resort
1,500
PGA West
1,100
Wal-Mart
250
Albertson's
126
Voris
103
Ralph's
100
City of La Quinta
72
Simon Motors
65
Cliff House
65
Red Robin
50
Source: City of La Quinta
6
Residential
Construction
Units Value
304
$38,320,527
320
35,744,443
324
39,145,539
531
79,318,969
238
29,163,494
336
53,973,239
322
36,971,047
461
70,403,691
Tvpe of Activi
Hotel
Residences
Condominium
Vacant Land
Residential Land
Golf Course
Residential/Vacant Land
Golf Course
Shopping Centers
Commercial
Activities
Resort Hotel
Golf Resort
Retailer
Groceries
Groceries
Groceries
Municipal Government
Auto Dealer
Restaurant
Restaurant
Oil
P. Schedule of Insurance in Force (June 30, 1998)
Company Name
Policy Number
Hartford
PEBAO7068
Reliance Insurance
NZB1500917
Company
Reliance Insurance
IMF 016349
Company
California
Certificate #5
Joint Powers
Insurance Authority
California
Certificate
Joint Powers
#5009-056
Insurance Authority
American National
IMP9880468
Source: City of La Quinta
Coverage
Employee Dishonesty,
Forgery, Computer Fraud
All Risk Property Insurance
Including Auto Physical Damage
(Excluding Quake & Flood)
Earthquake & Flood
Real & Personal Property
Including Contigent Tax Interruption
Comprehensive General
Liability
Worker's Compensation
Earthquake & Flood
Real & Personal Property
Including Contingent Tax Interruption
Limits
Term
$1,000,000
7/1/98 - 99
$25,459,250
7/1/98 - 99
$5,000,000 7/1/98 - 99
$0 Deductible Retention 7/1/98 - 99
$50 Million
$250,000 7/1/98 - 99
Q. Miscellaneous Statistical Data (June 30, 1998)
Premium
$2,500
$14,486
$23,700
$60,630
$37,637
$2,500,000 7/1/98 - 99 $5,000
Date of Incorporation
May 2, 1982
Type of City
Charter City
Form of Government
Council / Manager
City Employees
72
City Land Area (Square Miles)
31.2
Population
20,444
Number of Parks
5
Total Acreage
26
Miles of Streets
144
Miles of Bike Paths
3
Number of Major Intersections
32
Number of Traffic Signals and Safety Lights
32
Number of Traffic Signs
2,530
Number of Street Lights
7
Public Schools
4
Private Schools
1
Churches
3
Banks / Savings and Loan
2
Number of Single Family Units -Detached
9,448
Number of Single Family Units -Attached
2,260
Number of Multiple Family Units
697
Number of Mobile Homes
247
0
IV. SIGNATURE
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 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 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.
LA QUINTA FINANCING
AUTHORITY
CITY OF LA QUINTA
Jbhn Falconer J
Finance Director
Decembery1998
012
LA QUINTA
FINANCING AUTHORITY
Financial Statements and Supplemental Data
Year ended June 30, 1998
(With Independent Auditors' Report Thereon)
014
LA QUINTA FINANCING AUTHORITY
Financial Statements and Supplemental Data
Year ended June 30, 1998
TABLE OF CONTENTS
Independent Auditors' Report
Page
Combined Balance Sheet - All Fund Types and Account Groups 2
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - All Governmental Fund Types
Notes to the Financial Statements
.19
015
CERTIFIED PUBLIC ACCOUNTANTS
ASSOCIATES, L.L.P.
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
Board of Directors
La Quinta Financing Authority
La Quinta, California
INDEPENDENT AUDITORS' REPORT
1100 MAIN STREET, SUITE C
IRVINE, CALIFORNIA 92614
(949) 474-2020
Fax (949) 263-5520
We have audited the financial statements of the La Quinta Financing Authority (a component
unit of the City of La Quinta) 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 City of
La Quinta, California. 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 Financing Authority (a component unit of the City of
La Quinta) 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 Authority implemented GASB Statement No. 31 which
changed the manner in which the Authority accounts for investments, as discussed further in note
6 to the financial statements.
August 19, 1998
016
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
LA QUINTA FINANCING AUTHORITY
Combined Balance Sheet - All Fund Types and Account Groups
June 30, 1998
Governmental
Fund Types Account Group
Debt Capital General Long
Service Pro: et cts Term Debt
Assets
Cash with fiscal agent (note 3) $ - 601,119 -
Lease receivable (note 4) 8,505,000 - -
Amount to be provided for
retirement of general
Totals
(Memorandum Only)
1998 1997
601,119 738,234
8,505,000 8,790,000
long-term debt - - 8.505,000 8.505,000 8.790,000
Total assets $8,505,000 601,119 8.505.000 17.611,119 18.318.234
Liabilities and Fund Balances
Liabilities:
Due to City of La Quinta
Revenue bonds payable
(note 5)
Deferred revenue
Total liabilities
Fund balances (deficit):
Reserved for construction
Unreserved
Total fund balances
Total liabilities and
fund balances
$ - 11,815 - 11,815 1,470
- 8,505,000 8,505,000 8,790,000
8,505,000 - - 8.505,000 8,790.000
8,505.000 11,815 8.505.000 17.021,815 17.581,470
589,304 - 589,304 738,234
- - - (1,470)
589.304 - 589.304 736,764
$8,505,000 601,119 8,505.000 17.611,119 18.318,234
017
See accompanying notes to the financial statements.
M
2
LA QUINTA FINANCING AUTHORITY
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - All Governmental Fund Types
Year ended June 30, 1998
Totals
Debt Capital (Memorandum Only)
Service Projects 1998 1997
Revenues:
Intergovernmental
$ -
-
-
4,614
Investment income
-
27,277
27,277
36,209
Lease payments received
734,623
-
734,623
584,468
Total revenues
734.623
27.277
761.900
625,291
Expenditures:
Current:
Planning and development
6,427
-
6,427
4,615
Debt service:
Principal
285,000
-
285,000
170,000
Interest
449,623
-
449,623
437,950
Total expenditures
741,050
-
741.050
612,565
Excess (deficiency) of
revenues over (under)
expenditures
(6,427)
27,277
20,850
12,726
Other financing sources (uses):
Operating transfers in
1,470
-
1,470
738,234
Operating transfers out
-
(1,470)
(1,470)
(738,234)
Transfer from City of La Quinta
6,427
-
6,427
713,606
Transfer to City of La Quinta
-
(174,737)
(174,737)
(1,470)
Proceeds of refunding bonds (net
of issuance costs)
-
-
-
8,500,101
Payment to bond escrow agent
-
-
-
(8,488,199)
Total other financing sources
7,897
(176,207)
(168,310)
724,038
Excess (deficiency) of revenues
and other financing sources
over (under) expenditures
and other financing uses
1,470
(148,930)
(147,460)
736,764
Fund balances at beginning of year
(1,470)
738,234
736,764
-
Fund balances at end of year
$ -
589,304
589,304
736.764
1
See accompanying notes to the financial statements.
3
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
Year ended June 30, 1998
(1) Summary of Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the La Quinta Financing Authority ("Authority") have
been prepared on the modified accrual basis. Revenues are recognized when they
become measurable and available. Expenditures are recorded when a related
liability is incurred, except that prepaid expenses are not recorded, and interest
and principal on revenue bonds and transfers to the City of La Quinta are recorded
as expenditures when due.
(b) Fund Accounting
The accounts of the Authority are organized on the basis of funds and account
groups as follows:
Debt Service Fund - used to account for the accumulation and holding of
resources for, and the payment of, principal and interest when due. Revenue
sources are lease repayments and bond proceeds.
Capital Projects Fund - accounts for all expenditures during construction of
remaining improvements to streets and public facilities at the La Quinta Civic
Center site. Revenue sources are the moneys released from the 1991 Revenue
Bond reserve and a portion of the 1996 Refunding Revenue bond proceeds.
General Long -Term Debt Account Group - used to account for the outstanding
principal of long-term debt.
(c) Budgetary Data
Annual budgets of revenues and expenditures are not applicable to the Authority.
This is due to the legal structure of the bond indentures, which specifically directs
the timing and amounts of receipts and disbursements.
(d) 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
changed in market interest rates.
019
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
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) Lease Revenue
Amounts presented as lease revenue in the accompanying financial statements
include cash payments from the City of La Quinta as well as any credits toward
the City's payment due to capitalized interest or interest earnings on reserve
accounts held by the City.
(f) Memorandum Only Totals
Columns in the accompanying financial statements captioned "Totals
(Memorandum Only)" are not necessary for a fair presentation of the financial
statements in accordance with generally accepted accounting principles, but are
presented as additional analytical data. Interfund balances and transactions have
not been eliminated. Therefore, the data in this column does not represent
consolidated financial information.
(2) Description of Reporting Entity
The La Quinta Financing Authority is a joint exercise of powers authority created by a
joint powers agreement between the City of La Quinta and the La Quinta Redevelopment
Agency, dated November 19, 1991. The purpose of the Authority is to provide, through
the issuance of debt, financing necessary for the construction of various public
improvements. The Authority is an integral part of the City of La Quinta and the
financial transactions of the Authority are also included in the general purpose financial
statements of the City of La Quinta.
(3) Cash and Investments
Cash and investments held by the Authority at June 30, 1998 consisted of the following:
Carrying Amount
Deposits $
Investments 601.119
$601,119 020
LA QUINTA FINANCING AUTHORITY
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%
Governmental 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 (including component units) 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, in the Authority's
name, or for which the securities are held by the Authority or the
Authority's custodial agent (which must be a different institution other
than the party through which the Authority purchased the securities) in
the Authority's name. Investments held "in the Authority's name"
include securities held in a separate custodial or fiduciary account and
identified as owned by the Authority in the custodian's internal
accounting records.
Category 2 - includes uninsured and unregistered investments for which the securities
are held in the Authority'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
Authority).
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
Authority's name. Category 3 also includes all securities held by the
broker -dealer agent of the Authority (the party that purchased the
securities for the Authority) regardless of whether or not the securities
are being held in the Authority's name.
021
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
(Continued)
(3) Cash and Investments, (Continued)
Form of Investment
U.S. Treasury Bill
Mutual Funds
Total investments
Carrying Amount
$487,306
113.813
$601.119
The carrying amount of all investments reflected in the above table is at fair value.
Category
1 2 3 Carrying Amount
Investments held by fiscal agent:
U.S. Treasury Bill $ - 487,306 - 487306
$ - 487,306 - 487,306
Investments held by fiscal agent not subject to categorization:
Investment in mutual funds:
First American Treasury Obligation Fund 113.813
$601,119
(4) Lease Receivable
On November 19, 1991, the Authority leased from the City the land that was to be used
as the site for the future City Hall facility. Under the terms of the operating lease, an
advance rent of one dollar was paid at the inception of the lease as full consideration for
the Authority's use of the land for the term of the operating lease which ends on
October 8, 2028, unless terminated earlier as provided in the lease agreement. The City
retains title to the land during the term of the lease.
On November 19, 1991, the Authority entered into a sublease agreement to lease the land
along with the City Hall improvements ("the Project") back to the City. The lease
payments to be received by the Authority from the City are equal to the Authority's semi-
annual debt service payment required on the $8,515,000 of 1991 Local Agency Revenue
Bonds until fiscal year 1997. The Authority defeased the 1991 Local Agency Revenue
Bonds with the issuance of $8,790,000 of 1996 Lease Revenue Refunding Bonds during
fiscal year 1997. As a result of this refunding, the sublease agreement was amended on
October 1, 1996 to provide that the Authority shall receive from the City lease payments
which are equal to the Authority's semi-annual debt service required on the 1996 Lease
n
�.,
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
(Continued)
(4) Lease Receivable, (Continued)
Revenue Refunding Bonds and the term of the sublease agreement ends September 30,
2028, unless terminated earlier as provided in the first amendment to the sublease
agreement.
The sublease provides that upon payment by the City of all required lease payments, title
to the City Hall improvements is transferred to the City. Accordingly, the Authority's
sublease of the Project to the City is accounted for as a capital lease and the project assets
have been transferred to the City. Upon transfer of the Project to the City, the Authority
recorded a lease receivable and related deferred revenue to account for its interest in lease
payments to be received from the City. At June 30, 1998, the balance of the lease
receivable was $8,505,000.
(5) General Long -Term Debt
The following is a schedule of future debt service payments for the bonds:
Year Ending
June 30 Principal
Interest Total
1998-99
$ 245,000
439,573
684,573
1999-00
250,000
429,670
679,670
2000-01
260,000
418,955
678,955
2001-02
275,000
407,178
682,178
2002-03
285,000
394,435
679,435
2003-04
300,000
380,830
680,830
2004-05
315,000
366,220
681,220
2005-06
330,000
350,575
680,575
2006-07
345,000
333,865
678,865
2007-08
360,000
315,880
675,880
2008-09
380,000
296,450
676,450
2009-10
400,000
275,280
675,280
2010-11
420,000
252,525
672,525
2011-12
445,000
228,521
673,521
2012-13
470,000
203,130
673,130
2013-14
495,000
176,351
671,351
2014-15
525,000
148,046
673,046
2015-16
555,000
118,076
673,076
2016-17
585,000
86,441
671,441
2017-18
615,000
53,141
668,141
2018-19
650.000
18,038
668.038
$8.505,000
5.693.180
14.198.180
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
(Continued)
(5) General Long -Term Debt, (Continued)
Changes in general long-term debt for the year ended June 30, 1998 were as follows:
Lease revenue refunding bonds,
series 1996
Lease Revenue Refunding Bonds
Balance at
Balance at
Julv 1. 1997
Additions Repayments
June 30. 1998
$8,790.000
- (285,000)
8,505,000
$8.790,000
- (285.000)
8.505,000
On November 15, 1996, the Authority issued $8,790,000 of 1996 Lease Revenue
Refunding Bonds to defease the remaining 1991 Local Agency Revenue Bonds in the
amount of $8,200,000 and to provide funds for construction of remaining improvements
to the La Quinta Civic Center site.
The bonds consist of $3,630,000 of serial bonds and $5,160,000 of term bonds. The
serial bonds will accrue interest at rates between 3.70% to 5.30% and principal amounts
mature between October 1, 1997 to October 1, 2008 in amounts ranging from $285,000 to
$380,000. The term bonds accrue interest at a rate of 5.55% and mature on October 1,
2018.
A surety agreement has been purchased to satisfy the bond reserve requirement. The
amount of principal outstanding on the 1996 Lease Revenue Refunding Bonds at June 30,
1998 was $8,505,000.
A portion of the $8,790,000 bond proceeds, along with the remaining reserve from the
1991 Local Agency Revenue Bonds were used to purchase state and local government
securities that were deposited in a trust with an escrow bank to provide for all future debt
service payments on $8,200,000 of the outstanding 1991 Local Agency Revenue Bonds.
As a result, these certain bonds are considered to be defeased and the liability has been
removed from the long term debt account group of the Authority. This advance
refunding resulted in a debt service savings in the amount of $338,148 and an economic
gain (difference between the present values of the debt service payments on the old and
new debt) of $211,318. At June 30, 1998, the amount of defeased bonds outstanding is
$7,460,000.
024
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
(Continued)
(6) Change in Accounting Principle
During the year ended June 30, 1998, the Authority implemented GASB No. 31 which
requires that the Authority 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 (or
retained earnings) of each fund was not material, and accordingly, those balances have
not been restated.
(7) Year 2000 Proiect
The Authority uses the computer systems (and other electronic 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:
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
10
LA QUINTA FINANCING AUTHORITY
Notes to the Financial Statements
(Continued)
(7) Year 2000 Project, (Continued)
Hardware and Software Upgrades
• Money spent before June 30, 1998 on Y2K upgrades
• Money expected to be spent on Y2K upgrades during 1998-99
• Money to be spent in 1999-2000 to correct Y2K problems
25,000
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.
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.
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