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2012 12 18 HAI Housing Authority agendas and staff reports are available on the City's web site: www. ia-quinta. org HOUSING AUTHORITY AGENDA CITY HALL COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta REGULAR MEETING on TUESDAY, DECEMBER 18, 2012 AT 4:00 P.M. Beginning Resolution No. HA 2012-007 CALL TO ORDER ROLL CALL: Authority Members: Adolph, Franklin, Henderson, Osborne, Chairperson Evans VERBAL ANNOUNCEMENT — AB 23 [AUTHORITY SECRETARY] PUBLIC COMMENT At this time, members of the public may address the Housing Authority on any matter not listed on the agenda. Please complete a "request to speak" form and limit your comments to three minutes. The Housing Authority values your comments; however in accordance with State law, no action shall be taken on any item not appearing on the agenda unless it is an emergency item authorized by GC 54954.2(b). CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1. MINUTES OF NOVEMBER 20, 2012 CONSENT CALENDAR NOTE: Consent Calendar items are routine in nature and can be approved by one motion. 1. AMENDMENT NO. 3 TO THE AGREEMENT FOR CONTRACT SERVICES WITH LA QUINTA PALMS REALTY FOR THE LA QUINTA RENTAL HOUSING PROGRAM HOUSING AUTHORITY AGENDA 1 DECEMBER 18, 2012 ., �� 2. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED OCTOBER 31, 2012 3. LA QUINTA HOUSING AUTHORITY FINANCIAL STATEMENTS CONTAINED WITHIN THE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 4. FINANCIAL AND COMPLIANCE REPORTS FOR WASHINGTON STREET APARTMENTS FOR THE YEAR ENDED JUNE 30, 2012 5. APPROVAL OF DEMAND REGISTER DATED DECEMBER 18, 2012 6. RECEIVE AND FILE TREASURER'S REPORT DATED OCTOBER 31, 2012 BUSINESS SESSION - NONE REPORTS AND INFORMATION ITEMS 1. HOUSING COMMISSION MINUTES OF JUNE 13, 2012 CHAIR AND BOARD MEMBERS' ITEMS - NONE PUBLIC HEARINGS - NONE ADJOURNMENT The next regular meeting of the Housing Authority will be held on January 15, 2013, at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Susan Maysels, Authority Secretary of the La Quinta Housing Authority, do hereby declare that the foregoing agenda for the La Quinta Housing Authority was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at the La Quinta Post Office at 51-321 Avenida Bermudas and at the Stater Brothers at 78-630 Highway 111, on December 14, 2012. DATED: December 13, 2012 SUSAN MAYSELS, &thority Secretary La Quinta Housing Authority HOUSING AUTHORITY AGENDA 2 DECEMBER 18, 2012» ( 02 Public Notices Any writings or documents provided to a majority of the Housing 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. HOUSING AUTHORITY AGENDA 3 DECEMBER 18, 2012'..h 003 CITY / SA / HA / FA MEETING DATE: December 18, 201 2 AGENDA CATEGORY: BUSINESS SESSION: ITEM TITLE: Amendment No. 3 to the Agreement for 1 Contract Services with La Quinta Palms Realty for the CONSENT CALENDAR: _ La Quinta Rental Housing Program STUDY SESSION: PUBLIC HEARING: RECOMMENDED ACTION: Approve Amendment No. 3 to the Agreement for Contract Services with La Quinta Palms Realty for the La Quinta Rental Housing Program and authorize the Executive Director to execute the amendment. EXECUTIVE SUMMARY: At its October 16, 2012 meeting, the Housing Authority Board authorized staff to negotiate a contract extension/amendment with La Quinta Palms Realty to manage the Housing Authority's 28 affordable rental homes in the Cove. The attached Amendment No. 3 reduces the monthly management fee from $125 per unit to $115 per unit; extends the term through February 28, 2015; and updates the list of Housing Authority -owned Cove rental homes. FISCAL IMPACT: The rental income covers property management, maintenance, and other related expenses. The current management fee is $125 per house per month, which totals $42,000 per year. The renegotiated management fee is $115 per house per month, which totals $38,640 per year, resulting in an annual savings of $3,360. BACKGROUND/ANALYSIS: In 1995, the former La Quinta Redevelopment Agency purchased 50 single-family homes in the Cove to secure very low and low-income affordable housing covenants. The dwellings have been rented to very low- and low-income Section 8 households. Twenty-eight homes remain in this inventory — the balance has been sold to low-income households. Property management and maintenance services are currently provided by La Quinta Palms Realty. 1 004 In February 2002, La Quinta Palms Realty was selected through a Request for Proposal process to provide Property Management Services to the City of La Quinta and has continued to provide said services. In 2011, the former Redevelopment Agency purchased several foreclosed homes for rehabilitation and sales purposes. La Quinta Palms Realty was involved in this process including locating the properties, working with staff during the rehabilitation process as well as finding appropriate buyers for the homes. The Housing Authority has followed the City's procedures for awarding service contracts. Pursuant to Chapter 3.32 of the La Quinta Municipal Code, the City may award service contracts with no competitive proposals where experience with the proposed service provider has demonstrated competence and satisfactory performance La Quinta Palms Realty has demonstrated competence and satisfactory performance in managing the La Quinta Rental Housing Program. Therefore, staff recommends approval of the attached Contract Amendment. La Quinta Palms Realty has a long standing relationship with the City and its residents. They are cost efficient, reliable, have knowledge of city programs and work well with staff. La Quinta Palms Realty is a progressive company with sufficient staff.to meet City needs in providing excellent property management services. ALTERNATIVE: The Housing Authority Board could elect to not approve the attached Contract Amendment and provide staff with alternative direction. Respectfully submitted, Ld Debbie Powell Economic Development/Housing Manager Attachment: 1. Contract Amendment No. 3 005, ATTACHMENT .1_. AMENDMENT NO. 3 TO AGREEMENT FOR CONTRACT SERVICES THIS AMENDMENT NO. 3 TO AGREEMENT FOR CONTRACT SERVICES - PROPERTY MANAGEMENT SERVICES ("Amendment No. 3") is made and entered into as of the day of , 2012 ("Effective Date"), by and between the LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and LA QUINTA PALMS REALTY, a California corporation ("Contractor"). RECITALS A. On or about February 23, 2009, the La Quinta Redevelopment Agency ("Agency") and Contractor entered into that certain Agreement for Contract Services -Property Management Services with Contractor ("Original Agreement"), pursuant to which Agency and Contractor agreed to the terms and conditions to provide those services related to residential property management and sales for Agency -owned Properties ("Properties"). B. On or about December 21, 2009, the Agency and Contractor entered into Amendment No. 1 to the Original Agreement ("Amendment No. 1 "). Amendment No. 1 provides that Contractor shall serve as the Agency's Real Estate Agent and handle the transactions necessary to acquire individual units to become part of this portion of the Agency's Affordable Housing Program and increased the per unit management fee from $110 to $125. All commissions and/or compensation to be paid by the sellers of the units. C. On or about March 17, 2010, the Agency and Contractor entered into that certain Amendment No. 2 to Agreement for Contract Services ("Amendment No. 2"). Amendment No. 2 increased the scope of services to include services for the Agency's Foreclosure Home Purchase and Rehabilitation Program, including acting as the Agency's purchase and sales agent, and property manager and included a monthly management fee for these homes of $75 per unit. D. The Original Agreement, as modified by Amendment No. 1 and Amendment No. 2, is hereinafter referred to as the "Agreement." E. Pursuant to Assembly Bill 26 from the 2011/12 First Extraordinary Session of the California Legislature, which was signed by the Governor on June 28, 2011 ("ABx1 26"), all redevelopment agency activities, except continued performance of "enforceable obligations," were immediately suspended. A lawsuit was filed, challenging the constitutionality of ABx1 26 and companion bill ABx1 27 (which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if the legislative bodies that established the agencies elected to participate in a "voluntary alternative redevelopment program" and make certain remittance payments). The California Supreme Court upheld the . * 006 constitutionality of ABx1 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABx1 27. (California Redevelopment Assn. v. Matosantos (201 1) 53 Cal.4th 231. ABx1 26 is chapter 5, Statutes 2012, First Extraordinary Session, which added Part 1.8 (suspension provisions) and Part 1.85 (dissolution provisions) ("Part 1.85") of Division 24 of the Health and Safety Code. Pursuant to Health and Safety Code Section 34171(j), added by Part 1.85, the City of La Quinta ("City") is the "successor agency" to the Agency. On January 3, 2012, the La Quinta City Council adopted Resolution No. 2012-002, pursuant to which the City elected (a) to be the "successor agency" to the Agency, and (b) to have the Authority be the "housing successor" to the Agency. On January 17, 2012, the Authority adopted HA Resolution No. 2012-002, affirmatively electing to be the "housing successor" to the Agency. Pursuant to Health and Safety Code Section 34176(b), added by Part 1.85, all of the housing, assets and functions of the Agency were transferred to the Authority. The Agreement is a function of the Agency that was transferred to the Authority. F. Contractor and Authority now wish to amend the Agreement ("Amendment No. 3) to decrease the monthly per unit fee, update Exhibit A-2 Property List, and extend the term of the Agreement for two (2) additional years, until February 28, 2015. AMENDMENT In consideration of the foregoing Recitals, which are incorporated herein by this reference, and the covenants and promises hereinafter contained, and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Section 2.1 of this Agreement is replaced, in its entirety, with the following: 2.1 Contract Sum. For the services rendered pursuant to this Agreement, the Contactor shall be compensated One Hundred and Fifteen Dollars ($115) per unit monthly (as identified in Exhibit A-2 Property List), in accordance with the "Schedule of Compensation" attached hereto as Exhibit "C" and incorporated herein by this reference, over the term of the Agreement, except as provided in Section 1.6. The method of compensation shall be as set forth in the Schedule of Compensation (Exhibit "C"). Section 2. Section 3.4 of the Agreement is hereby replaced, in its entirety, with the following: Q0l 2 3.4 Term. Unless terminated earlier in accordance with Section 7.7 or 7.8, this Agreement shall continue in full force and effect until February 28, 2015. Notwithstanding the foregoing, the term of this Agreement may be extended for one (1) additional year upon mutual agreement by both parties, and in such event, all of the terms and conditions of this Agreement shall be applicable during such one (1) year extension period. Section 3. Exhibit "A-2" (Property List) of the Agreement is hereby replaced, in its entirety, with the property list attached hereto and incorporated herein as Exhibit 1. Section 4. Section 1 of Exhibit "C": (Schedule of Compensation) of the Agreement is hereby replaced, in its entirety, with the following: 1. Subject to Section 2.1 of the Agreement, Contractor shall receive a monthly fee of $1 15 per unit based upon the number managed and rented during each month. Section 5. Section 1 of Exhibit "D" (Schedule of Performance) of the Agreement is hereby replaced, in its entirety, with the following: 1. Term of Agreement Contractor shall provide the stated services throughout the term of the Agreement, as such term may be extended pursuant to the terms of Section 3.4 of the Agreement. Said term, as it may be extended, is subject to earlier termination pursuant to the terms of the Agreement. Section 6. Except as expressly provided in this Amendment No. 3, all of the terms, conditions, and provisions set forth in the Agreement shall remain in full force and effect. Section 7. The Effective Date of this Amendment No. 3 shall be the later of the dates set forth next to the signatures of the parties hereto, after the parties hereto have signed this Amendment No. 3, which date shall be inserted into the preamble to this Amendment No. 3. Section 8. This Amendment No. 3 may be executed in counterparts, each of which, when all the parties hereto have signed this Amendment No. 3, shall be deemed an original. [END - SIGNATURE PAGE FOLLOWS] 1�• 3 IN WITNESS WHEREOF, the Agency and Contractor have signed - this Amendment No. 3 on the respective dates set forth below. "Authority" LA QUINTA HOUSING AUTHORITY By: Date: 2012 Frank J. Spevacek Executive Director ATTEST: Susan Maysels, Authority Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP Counsel to the La Quinta Housing Authority "Contractor" LA QUINTA PALMS REALTY, a California corporation Date: 2012 By: Name: Its: 4 009 QjdArC4VIV AGENDA CATEGORY: CITY/SA jFA MEETING DATE: December 18, 2012 BUSINESS SESSION: ITEM TITLE: Receive and File Revenues and CONSENT CALENDAR: 7— Expenditures Report dated October 31, 2012 STUDY SESSION: PUBLIC HEARING: RECOMMENDED ACTION: Receive and File EXECUTIVES SUMMARY: Monthly and year-to-date revenues and expenditures of the La Quints Housing Authority dated October 31, 2012. FISCAL IMPACT: None. BACKGROUND/ANAYLSIS: Receive and File Transmittal of the October 31, 2012 Statement of Revenues and Expenditures for the La Quinta Housing Authority. ALTERNATIVES: None. Respectfully submitted, 4� .� Robbeyn Bird, Finance Director Attachment: 1. Revenues and Expenditures Report for October 31, 2012 ' 010 07/0112012 .1013112012 LA QUINTA HOUSING AUTHORITY ADJUSTED REMAINING % REVENUE SUMMARY BUDGET RECEIVED BUDGET RECEIVED PROJECT AREA NO 1 HOUSING AUTHORITY(241) Proceeds From Home Sale 125,000.00 460.79 124,539.21 0.370% Allocated Interest Income 3,800.00 783.25 3,016.75 20.610% Non Allocated Interest Income 0.00 311.60 (311.60) 0.000% Rental Income 240,000.00 105,353.20 134,646.80 43.900% 2nd Trust Deed Repayments 0.00 0.00 0.00 0.000% Transfer In 192,876.00 0.00 192,876.00 0.000% TOTAL LQ HOUSING AUTHORITY PA 1 561,676.00 106,908.84 454,767.16 19.030% PROJECT AREA NO 2 HOUSING AUTHORITY(242) WSA Fed Govt Assistance Pymts 451,400.00 144,122.00 307,278.00 31.930% WSA Fed Govt Interest Rate Subsidy 46,800.00 0.00 46,800.00 0,000% WSA Interest Income 0.00 0.00 0.00 0.000% WSA Non Allocated Interest Income 1,090.00, 897.13 192.87 82.310% WSA Rental Income 163,300.00 59,167.00 104.133.00 36.230% WSA Other Revenues 3,700.00 15,988.15 (12,288.15) 432.110% Transfer In 18,141,988.00 17,939,497.78 202,490.22 98.880% TOTAL LQ HOUSING AUTHORITY PA 2 18,808,278.00 18,159,672.06 648,605.94 96.550% LA QUINTA HOUSING AUTHORITY EXPENDITURE SUMMARY ADJUSTED 10/31/2012 REMAINING BUDGET EXPENDITURES ENCUMBERED BUDGET PROJECT AREA NO 1 HOUSING AUTHORITY SERVICES 69.500.00 41,058.24 28,441.76 2NO TRUST DEED PROGRAM 65,000.00 0.00 65,000.00 FORECLOSURE ACQUISITION 0.00 HOUSING DEVELOPMENT PROGRAM 350,000.00 71,416.49 278,583.51 TRANSFER OUT 178,750.00 0.00 118150.00 TOTAL PROJECT AREA NO HOUSING AUTHORITY 602,650.00 PROJECT AREA NO 2 HOUSING AUTHORITY SERVICES 3,000.00 500.00 2,500.00 WASH ST APTS EXPENSES 362,710.00 116,817.85 245,892.15 WSA PRIN/PROVIDENT LOAN - 32.615.00 10,538.99 21.976.01 WSA PRINAISDA LOAN 14.267.00 4,598.84 9.668.16 WSA INTEREST/PROVIDENTI 121,959.00 40,962.49 81,00651 WSA INTEREST/USDA LOAN 71,014,00 8,191.24 62,822,76 WSA ADVANCE INTEREST EX 0.00 0.00 0.00 TRANSFER OUT 24,972,905.00 25,261,35].96 (308452.961 TOTAL PROJECT AREA NO 2 HOUSING AUTHORITY—YS5/637GOb 253bZ,95i.d7�66 TT5;di3-6'.i TOTAL HOUSING AUTHORITY *..V n12 10 o4 4129&z �y CITY/SA if�A FA MEETING DATE: December 18, 2012 ITEM TITLE: The La Quinta Housing Authority Financial Statements Contained within the Comprehensive Annual Financial Report for the Year Ended June 30, 2012 RECOMMENDED ACTION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve, receive and file the La Quinta Housing Authority Financial Statements contained within the Comprehensive Annual Financial Report (CAFR) for the Year Ended June 30, 2012. EXECUTIVE SUMMARY: The financial activities of the La Quinta Housing Authority are contained in the CAFR which was presented at the December 4, 2012 City Council meeting and are reported as a Special Revenue Fund type. FISCAL IMPACT: None. BACKGROUND/ANALYSIS: The La Quinta Housing Authority was established on September 15, 2009. The purpose of the Housing Authority is to provide safe and sanitary housing opportunities for La Quinta residents. Although the housing authority is legally separate, it is reported as if it were part of the City because the governing board of both entities is identical. Therefore, the financial activities of the La Quinta Housing Authority are contained within the CAFR and are reported as a Special Revenue Fund type. .A. 013 ALTERNATIVES: No recommended alternatives at this time. Respectfully submitted, Robbeyn 8ird, Finance Director r14 Ise AGENDA CATEGORY: CITY/SA i;I /FA MEETING DATE: December 18, 2012 BUSINESS SESSION: ITEM TITLE: Financial and Compliance Reports for CONSENT CALENDAR: Washington Street Apartments for the Year Ended June 30, 2012 STUDY SESSION: PUBLIC HEARING: RECOMMENDED ACTION: Approve and file the Financial and Compliance Reports for Washington Street Apartments for the Year Ended June 30, 2012. EXECUTIVE SUMMARY: The La Quinta Redevelopment Agency acquired Washington Street Apartments in October 2008. Subsequently, the apartments were transferred into joint ownership with the La Quinta Housing Authority. An annual audit is required by the United States Department of Agriculture (USDA) and Board approval is required. FISCAL IMPACT: Page 23 of the Audit contains a summary of Audit Results. There is no fiscal impact as a result of this report. BACKGROUND/ANALYSIS: In October 2008, the La Quinta Redevelopment Agency acquired a 73 unit low- income apartment complex, Washington Street Apartments, which was subsequently transferred into joint ownership with the La Quinta Housing Authority in 2011. The apartment complex is managed by Hyder & Company and the audit was performed by Joyce Rethmeier, CPA. The USDA provides Federal funding for the Washington Street Apartments and; therefore, an annual audit is required. The audit (Attachment 1) is submitted for your review and approval. .11 015 ALTERNATIVES: No recommended alternatives at this time. Respectfully submitted, Robbeyn gird, Finance Director Attachment: 1. Washington Street Apartments Financial and Compliance Report for the Year Ended June 30, 2012 ,..0 P16 TTA -HlV[E19 T-1- WASHINGTON STREET APARTMENTS FINANCIAL AND COMPLIANCE REPORTS JUNE 30, 2012 AND 2011 017 CONTENTS PAGE Independent Auditors' Report 3-4 Financial Statements Statements of Financial Position 5-6 Statements of Activities 7 Statements of Cash Flows 8 9 Notes to the Financial Statements 10-13 Supplemental Information 15-17 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 18-19 Audit Findings on Compliance 20 Report on Compliance with Requirements that Could Have a Direct and Material Effect on the Federal Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 21-22 Schedule of Findings and Questioned Costs 23 Schedules of Expenditures of Federal Awards 24 Accompanying Multiple Family Housing Borrower Balance Sheet — Form RD 3560- 10 25-26 Accompanying Multiple Family Housing Project Budget — Form RD 3560-7 27-32 '. +r.. 018 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT Independent Auditors' Report To La Quinta Housing Authority Washington Street Apartments (An elderly housing development owned by La Quinta Housing Authority) La Quinta, CA USDA Rural Development Moreno Valley Office Moreno Valley, CA I have audited the accompanying statements of financial position of Washington Street Apartments (An elderly housing development owned by La Quinta Housing Authority), Case No. 04-033-764165310, as of June 30, 2012 and 2011, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the Project's management. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, the 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. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Washington Street Apartments, as of June 30, 2012 and 2011, and changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, I have also issued a report dated August 31, 2012, on my consideration of Washington Street Apartment's internal control over financial reporting and my tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of my audit. 235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants . 019 My audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplementary information shown on page 15-17 and 25-32 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Washington Street Apartments. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations, and is also not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statement and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. Joyce E. Rethmeier Certified Public Accountant August 31, 2012 " 020 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority ) CASE NO.04-033-764165310 STATEMENTS OF FINANCIAL POSITION JUNE 30, ASSETS 2012 2011 Current Assets Cash $ 78,471 $ 95,855 Rental assistance receivable 33,494 33,789 Tenant receivable 2,791 3,293 Prepaid expenses 12,875 10,563 Receivable - other 1,673 - Total Current Assets 129,304 143,500 Restricted Deposits and Funded Reserves Cash restricted for tenant security deposits 26,340 26,344 Real estate tax and insurance reserve 11,834 13,914 Replacement reserve 585,582 461,652 623,756 501,910 Rental Property Land 3,447,094 3,447,094 Buildings & Improvements 2,748,477 2,748,477 6,195,571 6,195,571 Less: Accumulated Depreciation (336,884) (244,857) 5,858,687 5,950,714 Other Assets Permanent loan fees, net of accumulated amortization of $5,090 and $3,702 in 2012 and 2011 12,844 14,232 Deposits 13,600 6,000 26,444 20,232 Total Assets $ 6,638,191 $ 6,616,356 The accompanying notes are an integral pan of these financial statements. -5- .X 021 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) CASE NO.04-033-764165310 STATEMENTS OF FINANCIAL POSITION (continued) JUNE 30, LIABILITIES AND NET ASSETS Current Liabilities Current portion of mortgage note payable Accounts payable Accrued expenses Total Current Liabilities Deposits and Prepaid Liabilities Tenants' security deposits Tenants' prepaid rents Long -Term Liabilities Mortgage note payable, net of current portion Total Liabilities Commitments Net Assets Total Liabilities and Net Assets 2012 2011 $ 46,783 $ 42,832 5,639 97 13,112 12,978 65,534 55,907 26,276 26,160 506 113 26,782 26,273 2,143,299 2,190,081 2,235,615 2,272,261 4,402,576 4,344,095 $ 6,638,191 $ 6,616,356 The accompanying notes are an integral part of these financial statements. -6- C22 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quints Housing Authority) CASE NO.04-033-764165310 STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30, 2012 2011 Rental Income Apartments $ 184,438 $ 180,075 Tenant Assistance Payments 442,245 446,272 Potential Rental income 626,683 626,347 Less: Vacancies (3,611) (4,851) Total Rental Income 623,072 621,496 Other Income Laundry & Vending 1,755 1,908 Interest Income 601 1,046 Tenant Charges 424 1,277 Other Income 23 - Total Other Income 2,803 4,231 Total Income 625,875 625,727 Expenses Operating & Maintenance Expenses 222,520 218,905 Utilities Expenses 64,145 61,757 Taxes & Insurance 28,721 27,810 Bad Debts 1,080 2,758 Interest on Mortgage Payable 150,013 154,180 Total Expenses 466,479 465,410 Incomet(Loss) from Operations 159,396 160,317 Non -Operating (Income) & Expense Interest Subsidy Income (46,912) (46,912) Interest Subsidy Expense 46,912 46,912 Depreciation & Amortization 93,415 93,415 Total Non -Operating Income & Expense (100,915) (100,915) Change in Net Assets 58,481 59,402 Net Assets - Beginning of Year 4,344,095 4,284,693 Net Assets - End of Year $ 4,402,576 $ 4,344,095 The accompanying notes are an integral part of these financial statements. .7. .a 023 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) CASE NO.04-033-764165310 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 301 2012 2011 Operating Activities Rental receipts $ 180,642 $ 172,046 Rental subsidy 442,540 447,267 Interest receipts 601 1,046 Other receipts 2,202 3,185 Net tenant security deposits (paid) received 120 (40) Net deposits (paid) received (7,600) 400 Payroll (51,128) (43,803) Administrative ((7,29) ((8,915) Professional fees (7,500) (7,500) Management fee (7,500) (7,500) Utilities (58,897) (61,757) Maintenance (88,382) (84,634) Insurance and taxes (42,657) (44,529) Interest on mortgage note payable (150,013) (154,180) Net Cash From Operating Activities 147,297 ]44,172 Investing Activities Reserve for Taxes & Insurance 2,080 32,406 Reserve for Replacement (123,930) (130,609) Purchase/Disposal of Rental Property Net Cash From Investing Activities (121,850) (98,203) Financing Activities Mortgage Principal Payments (42,831) (39,201) Net Cash From Financing Activities (42,831) (39,201) Net increase/(Decrease) in Cash (17,384) 6,768 Cash at Beginning of Period 95,855 89,087 Cash at End of Period $ 78,471 $ 95,855 The accompanying notes are an integral part of these financial statements. -8- 024 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) CASE NO.04-033-764165310 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED NNE 309 Operating Activities Increase in net assets Adjustments to Reconcile Increase/(Decrease) in Net Assets to Net Cash From Operating Activities Depreciation & Amortization Decrease (Increase) in Assets: Rental Assistance Receivable Tenant Receivables Receivable - Other Prepaid Expenses Cash restricted for tenant security deposits Deposits Increase (Decrease) in Liabilities: Accounts Payable Accrued Expenses Security Deposits - Liability Prepaid Rents Net Cash From Operating Activities Supplemental Disclosures Interest Subsidy 2012 2011 $ 58,481 $ 59,402 93,415 93,415 295 1 995 502 1,768 (1,673) 8,300 (2,312) (9,740) 4 (95) (7,600) 400 5,542 67 134 (8,207) 116 55 393 (2,188) $ 147,297 $ 144,172 $ 46,912 S 46,912 The accompanying notes are an integral part of these financial statements. -9- 025 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2012 Organization Washington Street Apartments ("the Project") is an elderly housing development owned by La Quints, Housing Authority (herein referred to as the Project). The Project operates a 73 unit elderly housing development for low-income seniors, as defined in Section 521 of the Housing Act of 1949. The Project commenced rental operations in November 2008. Legal title to the Project is held by La Quints Housing Authority, a government agency. The accompanying financial statements are those of the Project and do not represent the financial statements of La Quinta Housing Authority. The Project operates as an enterprise fund and, as such, follows governmental accounting standards and uses the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded in the accounting period in which they are earned and become measurable. Expenses are recorded in the period incurred, if measurable. B. Significant Accounting policies A summary of the Project's significant accounting policies consistently applied in the preparation of the accompanying financial statements are as follows: Basis of Accounting The Project utilized the accrual basis of accounting, whereby income is recognized as earned and expenses are recognized as obligations are incurred. Cash and Cash Equivalents Cash and cash equivalents consist of short-term investments with an original maturity of three months or less, cash on deposit, money market funds and certificates of deposit. Tenant Receivable and Bad Debt Policy Tenant receivables are charged to bad debt expense when they are determined to be uncollectible based upon a periodic review of the accounts by management. Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. 10- 026 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30,2012 B. Slanificant Accounfino Policies — (Continued Rental Property Rental property is recorded at cost. Improvements are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the statements of operations. The rental property is depreciated over estimated service lives as follows: Buildings & Improvements 30 years straight-line Land Improvements 15 years accelerated Furnishings & Equipment 5-7 years accelerated The Project reviews its investment in real estate for impairment whenever events or changes in circumstances indicate that the carrying value of such property may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the real estate to the future net undiscounted cash flow expected to be generated by the rental property and any estimated proceeds from the eventual disposition of the real estate. If the real estate is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the real estate exceeds the fair value of such property. There were no impairment losses recognized in 2012 and 2011. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Advertising Advertising costs are expensed when incurred. During 2012 and 2011 there was $641 and $574, respectively, in advertising expense. Date of Management's Review Subsequent events were evaluated through August 31, 2012, which is the date the financial statements were available to be issued. P.27 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2012 C. Mortaaae Pavable Rural Development The mortgage note was assumed by the Project and is payable to Rural Development in monthly installments of $7,107, at an interest rate of 10% and a term of 30 years, maturing in the year 2036. As part of the Loan Agreement, the Partnership entered into an Interest Credit and Rental Assistance Agreement that reduces the monthly mortgage payment to $3,198, which effectively lowers the interest rate to approximately 1% over the term of the loan. The mortgage liability of the Partnership is limited to the underlying value of the real estate collateral pledged. Under the loan agreement, the Project is required to make monthly escrow deposits for real estate, taxes and insurance premiums, and is subject to operating and return to owner restrictions. The Project's real and personal property are pledged as collateral for the trust deed note. Maturities of the mortgage notes in each of the next five years are approximated as follows: 2013 $ 14,267 2014 15,760 2015 17,412 2016 19,235 2017 21,249 Thereafter 628,643 $ 716,566 There has been no significant change in interest rates available to the Project. Therefore, the fair value of the mortgage notes approximate the book value. Provident Savings Bank, FSB The Project is financed under a deed of trust with Provident Savings Bank, FSB, dated October 31, 2008 in the original amount of $1,572,031. Monthly installments are $12,873 through October, 2038. The interest rate on the note is 8.36°/u. Maturities of the Permanent Loan in each of the next five years are approximated as follows: -12- el28 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2012 C. Mortdacie Payable (continued) Year ending June 30, 2013 $ 32,516 2014 35,341 2015 38,411 2016 41,748 2017 45,375 Thereafter 1,280,125 $ 1,473,516 D. Commitments and Contingencies Rental Assistance Agreement The Project has entered into a Rental Assistance Agreement with Rural Development commencing April 2011, providing rental assistance for 72 units. The agreement provides for a maximum rental assistance commitment of $392,256. The agreement expires January 31, 2013, but is then renewable under contract with Rural Development pending congressional approval of budget authority. E. Current Vulnerability Due to Certain Concentrations The Project's sole asset is Washington Street Apartments. The Project's operations are concentrated in the affordable housing real estate market. In addition, the Project operates in a heavily regulated environment. The operations of the Project are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies, including, but not limited to, Rural Development and the State Housing Agency. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by Rural Development or the State Housing Agency. Such changes may occur with little notice or inadequate funding to pay for the related cost, including the additional administrative burden, to comply with a change. F. Concentration of Credit Risk The Project maintains its cash in financial institutions insured by Federal Deposit Insurance Corporation (FDIC). Deposit accounts, at times, may exceed federally insured limits. As of June 30, 2012 the cash balance did not exceed those limits. As of June 30, 2011 the cash balance exceeded those limits by $37,458. The Project has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. -13 - %.11. 029 SUPPLEMENTAL INFORMATION ,t r 30 WASHINGTON STREET APARTMENTS ( An elderly housing development owned by La Quints. Housing Authority ) CASE NO.04-033-764165310 REPLACEMENT RESERVE RECONCILIATION FOR THE YEAR ENDED NNE 30, 2012 Reserve requirement 6/30/11 (Per Rural Development area office) Required annual reserve deposit (From loan agreement and any subsequent amendments) Actual reserve account deposit Total all authorized reeu[ar reserve withdrawals' Total all authorized excess reserve withdrawals Total all unauthorized reserve withdrawals Required reserve balance 06/30/12 (l)+(2)-(3)=(5) Verified Balance 06/30/12 Amount account over (+) under (-) funded ■ Detail of all reserve withdrawals during the fiscal year: Regular Excess u ose Reserve Reserve 72 ADA Doors 05/11/12 1,929 10 Security doors 07/19/11 879 Water heaters D8,H5,J3,E8,B2 11/15/12 2,258 CNA Specialist 02/22/12 2,950 Carpet C8,B 1 0522/12 1,010 Range C1,H3,E6 06/19/12 1,386 76 Co2 Alarms 03/19/12 2,978 Subtotal 1,929 11,461 See independent auditor's report on additional information. -15- (1) 388,941 (2) 64,800 137,320 (3) 1,929 11,461 (5) 451,812 585,582 133,770 Authorize Yes Yes Yes Yes Yes Yes Yes ..0 r, 31 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2012 1. Management Fee Calculation The management fee is based on a fee per unit occupied by tenants during the month. Total Qualified Units (73 " 12 months) 876 Less: Rent Free Unit (12) Vacancies 0 Total Occupied Units 864 Fee Per Unit (Effective July 1, 2009) $58 Management Fee Expense $ 50,112 2. Insurance Disclosure The Project maintains Insurance coverage as follows: Deductibl Coverage Building Insurance $5,000 $6,500,000 Comprehensive Business Liability No Deductible $2,000,000 per occurrence Fidelity / Employee Dishonesty $5,000 $500,000 Earthquake Insurance $25,000 $53,348,000 3. Return to Owner In accordance with the Loan Agreement, the annual return to owner is as follows: Asset Management Fee $ 7,500 4 See Independent Auditors' Report. -16- .0 032 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2012 4. Proiect Accounts AccountTvoe Account Title Account Financial Interest Balance Number Institution Rate Checking Operating Account 2120367221 California Bank & Trust - 47,758 Savings Operating Savings 2110112028 Union Bank .25% 30,513 Checking Tax & Insurance 2120367491 California Bank & Trust 11,834 Checking Security Deposit 2120276859 California Bank & Trust .05% 26,340 Checking Replacement Reserve 2120277909 California Bank & Trust .15% 49,908 Savings Replacement Reserve 2110153387 Union Bank .05% 200,674 Savings Replacement Reserve NZD-I68009 Zions Direct .40% 200,000 Savings Replacement Reserve NZD-168009 Zions Direct .35% 135,000 5. Changes to Owner Entity The La Quinta Housing Authority has been added to the title of the property. A request for approval of this transfer of title has been submitted to Rural Development. There has been a verbal approval but a written approval has not been received to the date of this report. La Quinta Housing Authority is part of the City of La Quinta. The La Quinta Redevelopment Agency is no longer in existence. s S See Independent Auditors' Report. 17- �33 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To La Quinta Housing Authority USDA Rural Development Washington Street Apartments Moreno Valley Office (An elderly housing development owned by Moreno Valley, CA La Quinta Housing Authority) La Quinta, CA I have audited the financial statements of Washington Street Apartments (An elderly housing development owned by La Quinta Housing Authority), RD Case No. 04-033-764165310, as of and for the year ended June 30, 2012, and have issued my report thereon dated August 31, 2012. 1 conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting Management of Washington Street Apartments is responsible for establishing and maintaining effective internal control over financial reporting. hr planning and performing my audit, I considered Washington Street Apartments internal control over financial reporting as a basis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Washington Street Apartments internal control over financial reporting. Accordingly, I do not express an opinion on the effectiveness of the Project's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented, or detected and corrected on a timely basis. My consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. I did not identify any deficiencies in internal control over financial reporting that I consider to be material weaknesses, as defined previously. 235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants 034 Compliance and Other Matters As part of obtaining reasonable assurance about whether Washington Street Apartments financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information of the La Quinta Housing Authority, management, others within the organization and the U.S. Department of Agriculture Rural Development and is not intended to be and should not be used by anyone other than these specified parties. qq& 9 ht�wj Cam? Joyce E. Rethmeier Certified Public Accountant August 31, 2012 035 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quints Housing Authority) Case No.04-033-764165310 NOTES TO THE FINANCIAL STATEMENTS Year Ended June 30, 2012 Reportable Conditions of Non Compliance There were no findings in 2012. Auditee's Comments on Prior Audit Resolution Matters Related to United States Department of Agriculture Rural Development Programs. There were no findings in 2011. 036 JOYCE E. RETHMEIER CERTIFIED PUBLIC ACCOUNTANT REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DRECT AND MATERIAL EFFECT ON THE FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To La Quints Housing Authority Washington Street Apartments Compliance I have audited Washington Street Apartments (An elderly housing development owned by La Quints Housing Authority), RD Case No. 04-033-764165310, compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) CircularA-133 Compliance Supplement that could have a direct and material effect on Washington Street Apartment's major federal program for the year ended June 30, 2012. Washington Street Apartment's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grains applicable to its major federal program is the responsibility of Washington Street Apartment's management My responsibility is to express an opinion on Washington Street Apartment's compliance based on my audit. I conducted my audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133. Those standards and OMB Circular A-133 require that I plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Washington Street Apartment's compliance with those requirements and performing such other procedures as I considered necessary in the circumstances. I believe that my audit provides a reasonable basis for my opinion. My audit does not provide a legal determination on the Washington Street Apartments compliance with those requirements. In my opinion, Washington Street Apartments complied, in all material respects, with the compliance requirements referred to above that could have direct and material effect on its major federal program for the year ended June 30, 2012. Internal Control Over Compliance Management of Washington Street Apartments is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing my audit, I considered Washington Street Apartments internal control over compliance with requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing my opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of Washington Street Apartments internal control over compliance. 235 West Fifth Avenue, Suite G, Escondido, CA 92025 Tel (760) 233-2244 Fax (760) 233-2166 Member of American Institute of Certified Public Accountants California Society of Certified Public Accountants 037 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. My consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. 1 did not identify any deficiencies in internal control over compliance that I consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the La Quinta Housing Authority, others within the organization and the U.S. Department of Agriculture, Rural Development and is not intended to be and should not be used by anyone other than these specified parties. C./'! I Joyce E. Reduneier Certified Public Accountant August 31, 2012 0,38 WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quinta Housing Authority) Case No. 04-033-764165310 SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEARS ENDED JUNE 30, 2012 AND JUNE 30, 2011 SUMMARY OF AUDIT RESULTS 1. The auditor's report expresses an unqualified opinion on the financial statements of Washington Street Apartments. 2. No material weaknesses were identified during the audit of the financial statements 3. No instances of noncompliance material to the financial statement of Washington Street Apartments were disclosed during the audit. 4. No material weaknesses were identified during the audit of the major federal award programs. 5. The auditor's report on compliance for the major federal award programs for Washington Street Apartments expresses an unqualified opinion. 6. There were no audit findings that are required to be reported in accordance with Section 510(a) of OMB Circular A-] 33. 7. The programs tested as major programs included: CFDA # Farmers Home Administration pursuant to Section 521 of the Housing Act of 1949, Sec. 515 Rural Rental Housing Loans 10.415 Rental Assistance 10.427 8. The threshold for distinguishing Types A and B programs was $300,000. 9. Washington Street Apartments qualifies as a low -risk auditee. FINDINGS None See independent auditor's report on additional information. -23- WASHINGTON STREET APARTMENTS (An elderly housing development owned by La Quints Housing Authority) Case No. 04-033-764165310 SCHEDULE OF EXPENDITURES AND FEDERAL AWARDS FOR THE YEARS ENDED JUNE 30, 2012 AND JUNE 30, 2011 Federal Grantor/Pass-through CFDA Federal Expenditures Grantor/Program Title Number 2012 2011 U.S. Department of Agriculture Rural Development Fanners Home Administration pursuant to Section 521 of the Housing Act of 1949, Sec, 515 Rural Rental Housing Loans 10.415 $716,566 $729,480 Rental Assistance 10.427 442,245 446,272 Total $1,158,811 $1,175,752 NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS NOTE A -BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards includes the federal grant activity of Washington Street Apartments (An elderly housing development owned by La Quints Housing Authority), RD Case No. 04-033-764165310, and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-] 33, Audits of States, Local Governments, and Non -Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. See independent auditor's report on additional information. -24- Form RD 3560-10 (02-05) MULTI -FAMILY HOUSING BORROWER BALANCE SHEET PART I - BALANCE SHEET BEGINNING DATE! ASSETS ENDING DATI CURRENT ASSETS 1. GENERAL OPERATING ACCOUNT .......................... i 2. R.E. TAX & INSURANCE ACCOUNT ........................ 3. RESERVE ACCOUNT ............................................. 4. SECURITY DEPOSIT ACCOUNT ............................. 5. OTHER CASH (identify) Petty Cash ............................ 6. OTHER................................................................ 7. TOTAL ACCOUNTS RECEIVABLE (Attach list) ..........., ACCTS RCVBLE 0-30 DAYS $ ACCTS RCVBLE 30-60 DAYS $ ACCTS RCVBLE 60-90 DAYS $ ACCTS RCVBLE OVER 90 DAYS $ 8. LESS: ALLOWANCE FOR DOUBTFUL ACCOUNTS ..... 9. INVENTORIES (supplies) ......................................... 10. PREPAYMENTS.................................................... 11. 12. TOTAL CURRENT ASSETS (Add 1 thru 11)............ FIXED ASSETS 13. LAND.................................................................. 14. BUILDINGS.......................................................... 15. LESS: ACCUMULATED DEPRECIATION ................... 16. FURNITURE & EQUIPMENT .................................... 17. LESS: ACCUMULATED DEPRECIATION ................... 18. DEFERRED FINANCING COSTS 19. TOTAL FIXED ASSETS (Add 13 thru 18).................. OTHER ASSETS 20. DEPOSITS 21. TOTAL ASSETS (Add 12, 19, and 20). LIABILITIES AND OWNERS EQUITY CURRENT LIABILITIES 22. TOTAL ACCOUNTS PAYABLE (Attach list) ................. ACCTS PAYABLE 0-30 DAYS $ ACCTS PAYABLE 30-60 DAYS $ ACCTS PAYABLE 60-90 DAYS $ ACCTS PAYABLE OVER 90 DAYS $ 23. NOTES PAYABLE (Attach frsf)ACCRUED EXPENSES... 24. SECURITY DEPOSITS ............................................ 25. TOTAL CURRENT LIABILITIES (Add 22 thru 24) .... FORM APPROVED OMB NO, 0575.0189 3,447,094 3,447,094 2,748,477 2,748,477 336,884 244,857 12,844 14,232 5,871,531 5,964,946 13,600 1 6,000 6,538,191 1 6,616,356 ACCORZIng 10 trio PapOnVOW RO-MC00h Act Or , an agency may not conductor sponsor, and a person is not required to respond o a co Won o information unless it displays a valid OMB control number. The valid OMS control number for this information collection Is 0575-0189. The time required to complete this information collection is estimated to average 2 hours par response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed and completing and reviewing the collection of Information. See independent auditors report on additional information. -25- ..n rj41 LONG TERM LIABILITIES 26. NOTES PAYABLE 27. OTHER (Identify) 28. TOTAL LONG RURAL DEVELOPMENT Tenants' oreosid rents •TERM 2,190,082 2,232,913 I 506 1131 LIABILITIES (Add 26 and 27)..... 2,190.588 1 2,233,026 29. TOTAL LIABILITIES (Add 25 and 28) .................. J 2,235 615 2,272,261 30, OWNER'S EQUITY (Net Worth) (21 minus 29) ............. 1 4.402,5761 4,344,095 31. TOTAL LIABILITIES AND OWNER'S EQUITY 1 6,638,191 6,616 356 (Add 29 and 30) Section 1001 of Title 18. United States Code provides: "Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined under this title or imprisoned not more than five years, or both. I HAVE READ THE ABOVE WARNING STATEMENT AND I HEREBY CERTIFY THE FOREGOING INFORMATION IS COMPLETE AND ACCURATE TO THE BEST OF MY KNOWLEDGE. (Date) (Signature of Borrower or Borrower's Representative) (Title) PART II -THIRD PARTY VERIFICATION OF REVIEW INye have reviewed the borrower's records. The accompanying balance sheet, and statement of actual budget and income on Form RD 3660-7, is a fair presentation of the borrower's records. I/We certify that no Identity of interest exists between me/us and any individual or organization doing business with the project or borrower. (Date) (Signature) (Name and Title) (Address) ❑ In lieu of the above verification and signature, a review completed, dated and signed by a person or firm qualified by license or certification is attached. See independent auditor's report on additional information. -26- _0 042 Foam RD 3560.7 (OS-061 terse Tres a a: 1 V.. v aae .,a FORM APPROVED OMB NO.0575-0189 PROJECT NAME BORROWER NAME BORROWER ID AND PROJECT NO. wASN1NGTON STREET APARTMENTS LA UINTA REDEVELOPMENT AGENCY 04-033-764165310 Repenting Period Budges Type Project Rental Type Project Type Ulhereby requan ©Amud Qhatt.l 0F. E, O (F,11Prof, QF30oeie _muaofEA. camel, embrn 00-sly Mitcular ltgwa MEW" XO (Ums,a Nah Mwoe, ❑ou ar RAsns 72 ow,am, QRem chew QConpgpb (Nenwa ®h»w ©Scum emuntma EJWR QCneuFhonw Oft. Mdn4 ❑enlmsmwwa pwhea ODt peam ©Acmes BEGINNING DATES > ENDING DATES - OPERATIONAL CASH SOURCES 1. Rental lncenn,............................................................ 2. RHS Rental Assistance Received ................... I.................. i3. Oceupancy Surcharges Received ...................................... 4. Laundry and Vending............................................................ 5. Interest Income........................................ .................... 6. Tenser Charges ......... ...................... I............................ 7. Other- Project Sources......................................................... 8. Less(y,edWy gad CenlntauyAlto wa,e) ........................ 9. 19"(A4encYAPP'aaad lnceade Allotwnce) ............. ........... 10. SUB-TOTAL((/rhru 7)-(8di 9)1...................................... NON -OPERATIONAL CASH SOURCES 11. Cash - Non Project............................................................ ` 12. Authorized Loan N".RHp....................................... 13. Transfer From Reserve......................................................... .i 14. SUIT-70TAL(1 mn131............................. I........................ i 15. TOTAL CASH SOURCES flo.14)....................................... OPERATIONAL CASH USES i16, Total O&M Expenses(F. Pan/) ................................... 17. RHS Deb Payment ............................................... :......... iIs. RIIS Payment (7weraffe)................................................... 19. RHS Paym nl avn Fae)................................................... 20. RHS Payment(OccsrpaneySlaeMrge)................................... ' 21. Teresa U61ily Payments :...................................................... i22. Transfer tp Reserve......................................................... t 23, R4mnt to Owner Alen af.nagen4.t F.................................. 24. SUB-TOTAL(1611ou23)................................................... NON -OPERATIONAL CASH USES I 25. Authorized Debt Payment Mm Mjp....................................... 26. Annual Capital Budget (From Part Ill, Linos C6y ........................ 27. Miscelhneoa,............................................................ 28. SUB-TOTAL(2Sfhrv27)...................................................... 29. TOTAL CASH USES(14428)....................................... 30. NET CASH (DEFICIT) (15-19) CASH BALANCE 31. Beginning Cash Balanee ... 32. AceroalmGsh Adjtmment i 33. E1ding Cash BaIuam(30+31+32) 1 Pxw/k m'arli4g bada(ortl4 rollanw aJln)i r,lnr.lNni M/ar xde4 anf cordedq as CURRENT PROPOSED COMMENTS BUDGET ACTUAL BUDGET w(YTD) (07/O1111) (07/01111) (07/01/12) 627 264 BEGINNING DATES > ENDING DATES - OPERATIONAL CASH SOURCES 1. Rental lncenn,............................................................ 2. RHS Rental Assistance Received ................... I.................. i3. Oceupancy Surcharges Received ...................................... 4. Laundry and Vending............................................................ 5. Interest Income........................................ .................... 6. Tenser Charges ......... ...................... I............................ 7. Other- Project Sources......................................................... 8. Less(y,edWy gad CenlntauyAlto wa,e) ........................ 9. 19"(A4encYAPP'aaad lnceade Allotwnce) ............. ........... 10. SUB-TOTAL((/rhru 7)-(8di 9)1...................................... NON -OPERATIONAL CASH SOURCES 11. Cash - Non Project............................................................ ` 12. Authorized Loan N".RHp....................................... 13. Transfer From Reserve......................................................... .i 14. SUIT-70TAL(1 mn131............................. I........................ i 15. TOTAL CASH SOURCES flo.14)....................................... OPERATIONAL CASH USES i16, Total O&M Expenses(F. Pan/) ................................... 17. RHS Deb Payment ............................................... :......... iIs. RIIS Payment (7weraffe)................................................... 19. RHS Paym nl avn Fae)................................................... 20. RHS Payment(OccsrpaneySlaeMrge)................................... ' 21. Teresa U61ily Payments :...................................................... i22. Transfer tp Reserve......................................................... t 23, R4mnt to Owner Alen af.nagen4.t F.................................. 24. SUB-TOTAL(1611ou23)................................................... NON -OPERATIONAL CASH USES I 25. Authorized Debt Payment Mm Mjp....................................... 26. Annual Capital Budget (From Part Ill, Linos C6y ........................ 27. Miscelhneoa,............................................................ 28. SUB-TOTAL(2Sfhrv27)...................................................... 29. TOTAL CASH USES(14428)....................................... 30. NET CASH (DEFICIT) (15-19) CASH BALANCE 31. Beginning Cash Balanee ... 32. AceroalmGsh Adjtmment i 33. E1ding Cash BaIuam(30+31+32) 1 Pxw/k m'arli4g bada(ortl4 rollanw aJln)i r,lnr.lNni M/ar xde4 anf cordedq as CURRENT PROPOSED COMMENTS BUDGET ACTUAL BUDGET w(YTD) (07/O1111) (07/01111) (07/01/12) 627 264 179 747 4 f'Y3 .: SMR .yY�AI 442,245 fs+_r�,G4 N.: Went wn:pR.... , 2000 1,755 1,050 601 1700 424 40 23 12,545 :f g, Y 619,509 624,)95 638,768 1 638.185 353.210 301.996 39.370 39.370 Elm 64 800 137.320 7 50D 7,500 463,880 495,186 657.613 1 653.050 1.155 14 86T 96.700 1 109.769 1799 87,955 1 90,105 See independent auditor's report on Eddilionsl information _27_ mnafnsamx.nr.aree.. 043 1. Maintenance and Repairs Payroll ................................ 2. Maintenance and Repairs Supply ................................ 3. Maintenance and Repair Contract........I....................... 4. Painting and Decorating ................................ S. Snow Removal........................................................ 6. Elevator Maintenince/Contract .......... I ..................... 7. Grounds........................................I.:............. S. Services........................................................ 9. Annual Capital Budget (From Pan V - Operating) 10. Other Operating Expenses ................................ 11. SUB -TOTAL MAINT. & OPERATING (I rba 10) .............. 12. Electricity ........................................................ 13. Water .............................. I......................... 14. Sewer ........................................................ 15. Fuel (OibCwWas)................................ 16. Garbage & Trash Removal ......... 1.. 1. 1................. 17. Other Utilities........................................................ 18. SUB -TOTAL UTILITIES()? tarn. I7) ............ I ..... I........ 19. Site Management Payroll ................................ 20, Management Fee ........................................................ 21. Project Auditing Expense ................................ 22. Project BookkeepinglAccounung................................ 23. Legal Expenses .............................................. I........ 24. Advertising........................................................ 25. Telephone& Answering Service ................................ 26. Office Supplies........................................................ 27. Office Furniture & Equipment ................................ 28. Training Expense........................................................ 29. Health Ins. & Other Emp. Benefits ................................ 30. Payroll Taxes ........................................................ 31. Workman's Compensation ................................ 32. Other Administrative Expenses ................................ 33. SUB -TOTAL ADMINISTRATIVE f19tbru 32) .............. 34. Reel Estate Taxes ........................................................ 35. Special Assessments ................................ 36. Other Taxes, licenses & Permits .......................I ........ 37. Property & Liability Insurance ........... I .................... 38. Fidelity Coverage Insurance ................................ 39. Other Insurance........................................................ 40. SUB -TOTAL TAXES & INSURANCE (34 tarn 39) .............. CURRENT I I PROPOSED I COMMENTS 30,160 22,102 16,035 9,361 22,000 t0 522 4,000 1,270 29,319 25,729 4,788, 4,390 21,415 18966 5 080 3 185 132 796 1 95,525 8,500 6,077 23,000 24,252 26,000 25,444 1,750 1,215 8500 7157 67,750 64,145 27,040 29,306 50,112 50,112 7500 7000 2,600 290 850 641 2850 2434 4100 2753 1000 73 8,784 5,676 41992 5,948 &580 'I" 6 616 3,694 125 024 113 605 11,098 11,296 62 45 16,480 17,380 27,640 1 28,721 41. TOTAL O&M EXPENSES (II+I8+33+40) ............... 1 353.210 1 301,996 See independent auditor's report on additional information. . 28 _ 4 044 I I I RESERVE ACCOUNT: I BEGINNING BALANCE ............................. 452654 461652 - 2 TRANSFER TO RESERVE .......................... -648W 137320 - TRANSFER FROM RESERVE... ..................... - 3 OPERATING DEFICIT ............................... - 4 ANNUAL CAPITAL BUDGET (Part V - Reserve 39,259 13.390 5 EQUB'MENT REPAIR & REPLACEMENT...... 6 OTHER NON -OPERATING EXPENSES.......... - 7 TOTAL (3 Ihru 6)...................................... 39,259 13,390 - 8 ENDING BALANCE 1(1+2 )-71...... ............ — 478,195 595,582 - GENERAL OPERATING ACCOUNT:' BEGINNING BALANCE ............................. 95555 ENDING BALANCE .................................. 79.271 REAL ESTATE TAX AND INSURANCE ESCROW ACCOUNT:• BEGINNING BALANCE ............................. ENDING BALANCE 13914 .................................. I1 834 TENANT SECURITY DEPOSIT ACCOUNT:* BEGINNING BALANCE ............................. 26344 ENDING BALANCE .................................. 2Q40 �/CMIp!<ltl(QM tuaulllli0lI 0JOCNCI eiplNel.J NUMBEBOFAPPUCANTSONW.VTINOUST...� RESERVEACCT. REQ. BALANCE..... NUNMEROFAPPLICANTS NEEDING RA.. AMOUNT AHEAD/BEHIND............... - See indepondent auditors report on additional information. -29- 0 045 I I I PART IV — RENT SCHEDULE AND UTILITY ALLOWANCE A CURRENT APPROVED RENTSMT(L17-YAL-OWANCE: UNIT DESCRIPTION RENTAL RATES POTEN7IALINCOME FROM FACIi RATE BR S17,C' I I UNIT TYPE M M NUMBER 72 I BASIC $726 NOTE RATE t861 HUD BASIC S 627 264 NOTE RATH 11 743 904 HUD UTILITY ALLOWANCE $ 73 CURRENT RENT TOTALS t 627,264 1S 743 904 $ ISAWL NOTE HUD C. PROPOSED U77WTY ALLOWANCE- Eftmlve Dim: I 7 See independent auditors mpon on additional information. -30- 1 W o, Appliances: Range Refrigerator Range Hood Washers & Dryers Carpet & Vinyl: 1 Sr. 2 Br. 3 Br. 4 Br. Other Cabinets: Kitchens Bathroom Other Doors: Exterior Interior Window Coverings: List: Heating & Alr Conditioning: Heating Air Conditioning Plumbing: Water Heater Beth Sinks Kitchen Sinks Faucets Toilets Shower/tub and Major Electrical: List: Structures: Windows Screens Walls Rooting Siding Exterior Painting Community Room Paving: Asphalt Concrete Seal & Stripe Landscape & Grounds: Landscaping Lawn Equipment Fencing Recreating Area Signs Accessibility Features: List Automation Equipment: Site Management Common Area Other: List: List: List: List: Number of I from _ from I from from Total Actual 121 2.7001 1.3861 2,7001 1,386 3 3 1650 508 508 1 8 11,360 Ciallina tans q 280 Water Leak 713 1 713 1 Smoke Alarms and Batteries 2,9781 1 1 2,978 76 .Capital Needs Assessment 2,950 2,9501 1 TOTAL CAPITAL EXPENSES: 1 122 1 39,259 1 13,3901 21,4151 18,966 32 356 187 See independent auditor's report on additional information. .31. n f 41 PART V I - SIGNATURES, DATES AND COMMENTS Section 1001 of Title 18, United States Code provides: "Whoever, in any matter within the jurisdiction of department or agency of the United States knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry shall be fined under this title or imprisoned not more than five •. L_ai I HAVE READ THE ABOVE WARNING STATEMENT AND I HEREBY CERTIFY THAT THE FOREGOING INFORMATION IS COMPLETE AND ACCURATE TO THE BEST OF MY KNOWLEDGE. (DATE) (Signature of Borrower or Borrower's Representative) (Title) See independent auditor's report on additional information. -32- M �48 4W CITY / SA / H"A / FA MEETING DATE: December 18, 2012 AGENDA CATEGORY: ITEM TITLE: Approval of Demand Register Dated BUSINESS SESSION: December 18, 2012 CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: RECOMMENDED ACTION: It is recommended the Housing Authority Board: Receive and File the Demand Register Dated December 18, 2012 of which $1285.03 represents Housing Authority Expenditures. PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA EXECUTIVE SUMMARY: None. FISCAL IMPACT: None. BACKGROUND/ANALYSIS: None. ALTERNATIVES: None. ...k_. 049 Respectfully submitted, Robbeyn Birid, Finance Director 050 F `y tin p OF AGENDA CATEGORY: CITY/SA HMFA MEETING DATE: December 18, 2012 BUSINESS SESSION: /` ITEM TITLE: Receive and File Transmittal of CONSENT CALENDAR: (0 Treasurer's Reports as of October 31, 2012 STUDY SESSION: PUBLIC HEARING: RECOMMENDED ACTION: It is recommended the La Quinta Housing Authority: Receive and file. PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA b 051 Reports & Informational Items: 1 MINUTES HOUSING COMMISSION MEETING A Special Meeting Held in the Study Session Room at La Quinta City Hall 78-495 Calle Tampico, La Quinta, CA June 13, 2012 This meeting of the Housing Commission was called to order at 6:00 p.m. by Chairperson Leidner. CALL TO ORDER A. Roll Call B. Pledge of Allegiance Present: Commissioners Dorsey, LaRocca, McDonough Chairperson Leidner Absent: Commissioner Hunter submitted his verbal resignation in May, 2012. His term is expired on June 30, 2012 Staff Present: Debbie Powell, Economic Development/Housing Manager Lori Lafond, Executive Assistant PUBLIC COMMENT: None. CONFIRMATION OF AGENDA: It was moved by Commissioners LaRocca/Dorsey to confirm the agenda as submitted. Motion carried unanimously. APPROVAL OF MINUTES: A motion was made by Commissioners LaRocca/McDonough to approve the minutes of the March 14, 2012 meeting as submitted. Motion carried unanimously. PRESENTATIONS: 1. Introduction of City Manager Staff introduced the City of La Quinta's new City Manager, Frank J. Spevacek. 2. Tour of the City of La Quinta Emergency Operations Center (EOC) Paul Hess, Emergency Services Coordinator, conducted a tour of the EOC for the Housing Commissioners R C52 BUSINESS ITEMS: 1. Consideration of the Housing Commission Work Plan for Fiscal Year 2012/2013 Staff presented staff report. A motion was made by Commissioners LaRocca/McDonough to approve the Housing Commission Work Plan for Fiscal Year 2012/2013 as submitted. Motion carried unanimously. REPORTS AND INFORMTIONAL ITEMS: 1. Update on Oversight Board Actions Staff presented staff report. 2. Review of Recent Housing Authority and Oversight Board Actions Staff presented staff report. 3. Update Regarding Washington Street Apartments Rehabilitation Project Staff presented staff report. ADJOURNMENT: There being no further business, it was moved by Commissioners Dorsey/McDonough to adjourn this meeting of the Housing Commission at 7:35 p.m. Motion carried unanimously. Submitted by: Lori Lafond Executive Assistant Housing Commission Minutes June 13, 2012 2 C 5 3