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Home My WebLink AboutRDA Audited Financial Reports FYE 06-30-1995 PALM DESERT REDEVELOPMENT AGENCY INTEROFFICE MEMORANDUM TO: Honorable Chairman and Members of the Redevelopment Agency Board FROM: Paul Gibson, Finance Director/City Treasurer DATE: December 14, 1995 SUBJECT: AUDITED FINANCIAL REPORTS FOR FISCAL YEAR ENDING JUNE 30, 1995 Recommendations: 1) Receive and file the audited Financial Statements for the Palm Desert Redevelopment Agency for fiscal year ending June 30, 1995 Background: Diehl Evans and Company in joint venture with a local firm, Oscar Armijo, CPA performed and completed the annual independent audit for fiscal year ending June 30, 1995 for the Palm Desert in September, 1995 in accordance with generally accepted auditing standards . In the auditor' s opinion, the general purpose financial statements present fairly, in all material respects, the financial position of the Palm Desert Redevelopment Agency as of June 30, 1995, and the results of its operations for the year then ended in conformity with generally accepted accounting principles The audited financial statements were presented to the Finance Committee at their December 7, 1995 meeting. Staff recommends to receive and file the audited financial statements for the Palm Desert Redevelopment Agency for fiscal year ending June 30, 1995 . Mr. Oscar Armijo, CPA and Engagement Partner from the local audit firm is available for further questions . Reviewed and concur: 4,‘1) 6<e^ it„ Paul S . Gibson Carlos L. Ortega Director of F��inaance/Ci7.ty Treasurer RDA Executive Director enclosures Pize-4 1-7 Zf �IIDce..13Y RDA N afstfrep/fincty95 VERIRED BYc "/ Cr i ;maw ide with City Germ's Office PALM DESERT REDEVELOPMENT AGENCY COMPONENT UNIT FINANCIAL STATEMENTS WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 1995 PALM DESERT REDEVELOPMENT AGENCY TABLE OF CONTENTS June 30, 1995 Page Number Independent Auditors' Report 1 General Purpose Financial Statements: Combined Balance Sheet - All Fund Types and Account Groups 2 - 3 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 4 - 5 Notes to Financial Statements 6 - 24 Supplemental Information: Combining Balance Sheet - All Debt Service Funds 25 - 26 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - All Debt Service Funds 27 - 28 Combining Balance Sheet - All Capital Projects Funds 29 - 30 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - All Capital Projects Funds 31 - 32 Supplemental Schedule - Tax Increment Shift to Educational Revenue Augmentation Fund 33 Independent Auditors' Compliance Report 34 &rani. & eom,Aany CERTIFIED PUBLIC ACCOUNTANTS (pica/A. ¶. c7q2mI/o CERTIFIED PUBLIC ACCOUNTANT 18401 VON KARMAN,SUITE 200 a joint venture 74-133 EL PASEO, SUITE 8 IRVINE,CALIFORNIA 92715-1542 PALM DESERT,CALIFORNIA 92260 (714)757-7700 September 22, 1995 (619)773-4078 INDEPENDENT AUDITORS' REPORT Agency Members Palm Desert Redevelopment Agency Palm Desert, California We have audited the general purpose financial statements of the Palm Desert Redevelopment Agency (a component unit of the City of Palm Desert), as of and for the year ended June 30, 1995, as listed in the table of contents. These financial statements are the responsibility of the Agency's management. 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 and Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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 general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Palm Desert Redevelopment Agency as of June 30, 1995, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. As discussed in Note 11 to the financial statements, the ultimate realization of the Agency's investment in litigation is dependent on a favorable outcome of the litigation. The effect of the present uncertainties on the outcome and the amount of final adjustment to the net realizable value of the Agency's investment, if any, are not presently determinable. Accordingly, the financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The financial statements listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Palm Desert Redevelopment Agency. The information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. GENERAL PURPOSE FINANCIAL STATEMENTS PALM DESERT REDEVELOPMENT AGENCY COMBINED BALANCE SHEET—ALL FUND TYPES AND ACCOUNT GROUPS June 30, 1995 Governmental Fund Types Special Debt Capital Revenue Service Projects ASSETS AND OTHER DEBITS ASSETS: Cash and investments(Notes 3 and 11) $ 746,888 $ 22,039,498 $ 3,702,513 Cash with fiscal agent(Notes 3 and 11) 782,681 35,265,445 36,872,668 Interest receivable 3,481 440,535 459,248 Due from other governmental agencies — — 3,700,919 Due from other funds — 2,851,423 — Loans receivable(Note 4) 1,821,601 5,899,000 — Prepaid expenses and deposits — — 3,157 Land held for resale(Note 1g) — — — Allowance for decline in value of land(Note lg) — — — General fixed assets(Note 5) — — — Amount available in debt service funds — — — Amount to be provided for payment of long-term debt — — — TOTAL ASSETS AND OTHER DEBITS $ 3,354,651 $ 66,495,901 $ 44,738,505 LIABILITIES,EQUITY AND OTHER CREDITS LIABILITIES: Accounts payable $ 339,274 $ 61,519 $ 237,134 Accrued liabilities — — 9,183 Deferred revenue — 584,364 — Due to other funds — — 2,851,423 Amounts due under pass-through agreements(Note 6) — 10,579,574 — General long-term debt(Note 7) — — — TOTAL LIABILITIES 339,274 11,225,457 3,097,740 EQUITY AND OTHER CREDITS: Investment in general fixed assets — — — Fund balances(Note 10): Reserved 2,885,018 17,318,252 23,242,216 Unreserved—designated 130,359 37,952,192 18,398,549 TOTAL EQUITY AND OTHER CREDITS 3,015,377 55,270,444 41,640,765 TOTAL LIABILITIES,EQUITY AND OTHER CREDITS $ 3,354,651 $ 66,495,901 $ 44,738,505 See independent auditors'report and notes to financial statements. —2— Account Groups Totals(Memorandum Only) General General Fixed Long-Term Assets Debt June 30, 1995 June 30, 1994 $ - $ - $ 26,488,899 $ 12,239,360 - - 72,920,794 61,480,618 - - 903,264 238,287 - - 3,700,919 194,200 - - 2,851,423 11,280,084 - - 7,720,601 8,491,248 - - 3,157 487,800 - - - 3,065,000 - - - (3,064,999) 65,252,523 - 65,252,523 56,784,555 - 55,270,444 55,270,444 36,760,062 - 111,359,556 111,359,556 95,968,938 $ 65,252,523 $ 166,630,000 $ 346,471,580 $ 283,925,153 $ - $ - $ 637,927 $ 1,113,291 - - 9,183 - - - 584,364 98,000 - - 2,851,423 11,280,084 - - 10,579,574 7,243,565 - 166,630,000 166,630,000 132,729,000 - 166,630,000 181,292,471 152,463,940 65,252,523 - 65,252,523 56,784,555 - - 43,445,486 42,207,679 - - 56,481,100 32,468,979 65,252,523 - 165,179,109 131,461,213 $ 65,252,523 $ 166,630,000 $ 346,471,580 $ 283,925,153 -3- PALM DESERT REDEVELOPMENT AGENCY COMBINED STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES—ALL GOVERNMENTAL FUND TYPES For the year ended June 30, 1995 Special Debt Capital Revenue Service _ Projects REVENUES: Tax increment $ — $ 22,822,814 $ — Use of money and property 175,281 1,628,383 788,773 Sale of land — — — Reimbursement from other agencies — 461,799 3,692,719 Other revenues 8,000 — 1,113 TOTAL REVENUES 183,281 24,912,996 4,482,605 EXPENDITURES: Administrative costs 316,361 — 637,881 Professional services — — 690,271 Planning, survey and design — — 650,163 Assessment district taxes — — — Capital outlay 3,829,349 — 6,764,342 Cost of land sold — — — Land purchases — — 3,742,206 Housing subsidies 4,618,356 — — Educational revenue augmentation fund — 781,872 — Payment to other governmental agencies — 6,502,102 — Debt service: Bond issuance costs — 613,623 — Bond discount — 351,438 — Interest and fiscal charges 471,005 8,260,985 — Principal payments 260,000 1,954,000 — TOTAL EXPENDITURES 9,495,071 18,464,020 12,484,863 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES (9,311,790) 6,448,976 (8,002,258) OTHER FINANCING SOURCES(USES): Proceeds from bonds(Note 7b) — 18,850,555 9,264,445 Operating transfers in 6,599,679 8,547,692 2,118,470 Operating transfers out — (15,336,841) (1,929,000) Advance from City(Note 7a) — — 8,000,000 TOTAL OTHER FINANCING SOURCES (USES) 6,599,679 12,061,406 17,453,915 EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER(UNDER)EXPENDITURES AND OTHER FINANCING USES (2,712,111) 18,510,382 9,451,657 FUND BALANCES—BEGINNING OF YEAR 5,727,488 36,760,062 32,189,108 FUND BALANCES—END OF YEAR $ 3,015,377 $ 55.270,444 $ 41,640,765 See independent auditors' report and notes to financial statements. —4— Totals (Memorandum Only) June 30, June 30, 1995 1994 $ 22,822,814 $ 21,086,221 2,592,437 6,555,491 — 5,969,999 4,154,518 491,571 9,113 415,778 29,578,882 34,519,060 954,242 535,094 690,271 1,350,046 650,163 98,254 — 202,375 10,593,691 5,420,157 — 5,031,432 3,742,206 12,012,348 4,618,356 3,509,511 781,872 781,686 6,502,102 5,637,629 613,623 — 351,438 — 8,731,990 8,481,410 2,214,000 5,100,532 40,443,954 48,160,474 (10,865,072) (13,641,414) 28,115,000 — 17,265,841 12,479,988 (17,265,841) (12,479,988) 8,000,000 5,000,000 36,115,000 5,000,000 25,249,928 (8,641,414) 74,676,658 83,318,072 $ 99,926,586 $ 74,676,658 —5— NOTES TO FINANCIAL STATEMENTS PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS June 30, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Description of Funds and Account Groups: The Agency utilizes fund accounting. Its accounts are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenues and expenditures. Government resources are allocated and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds and account groups are classified for reporting purposes as follows: Governmental Funds: Special Revenue Fund - Used to account for the proceeds of specific revenue sources or to finance specified activities as required by law or administrative regulation. The Special Revenue Fund consists solely of the Low and Moderate Income Housing Fund. Debt Service Funds - Used to account for the payment of interest and principal on long-term obligations. Capital Projects Funds - Used to account for financial resources used for the acquisition or construction of redevelopment projects. Account Groups: The General Fixed Asset Account Group - Used to maintain control and cost information on capital assets owned by the Agency. General fixed assets are recorded as expenditures in the Capital Projects Fund at the time of purchase. These assets are capitalized at cost. No depreciation is provided on general fixed assets. The General Long-Term Debt Account Group - Used to account for the Agency's liability for long-term indebtedness. See independent auditors' report. -6- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): b. Basis of Accounting: Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. All governmental funds are accounted for using the modified accrual basis of accounting. Revenues are recognized when they become measurable and available as net current assets. Expenditures generally are recognized under the accrual basis of accounting when the related fund liability is incurred. An exception to this general rule is principal and interest on general long-term debt, which are recognized when due. c. Measurement Focus: All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets, in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources", since they do not represent net current assets. Noncurrent portions of long-term receivables are offset by fund balance reserve accounts. d. Budgetary Accounting: The Agency uses the following procedures in establishing its budgetary data: 1) Before the beginning of the fiscal year, the Executive Director submits to the Board of Directors a proposed budget for the year commencing the following July 1. 2) Public hearings are conducted to obtain taxpayer comments. 3) The Budget is subsequently adopted through passage of a resolution. See independent auditors' report. -7- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): d. Budgetary Accounting (Continued): 4) Original appropriations are modified by supplementary appropriations and transfers among budget categories. The Board approves all significant changes. Annual appropriations lapse at year end. 5) Encumbrances and Continuing Appropriations are rebudgeted as of July 1 by Board action. 6) Formal budgetary integration is employed as a management control device during the year for the Special Revenue and Capital Project Funds. Formal budgetary integration is not employed for Debt Service Funds because effective budgetary control is alternatively achieved through debt indenture provisions. 7) Budgets are adopted on a basis consistent with generally accepted accounting principles. e. Encumbrances: Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration. Encumbrances outstanding at year-end are reported as reservations of fund balances since they are commitments, but do not constitute expenditures or liabilities. f. Investments: Investments are stated at cost. No loss is recorded when market values decline below cost as such declines are considered temporary. The Agency intends to either hold the investments until maturity, or until market values equal or exceed cost. (See Note 11). g. Land Held for Resale: Costs of land held for resale are capitalized in the Special Revenue Fund as inventory at the lower of acquisition cost or net realizable value. As of June 30, 1994, the cost of land held for resale was $3,065,000, with an allowance for decline in value in the amount of $3,064,999. The land was sold in fiscal year 1994-95. See independent auditors' report. -8- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): h. Property Tax Calendar: Property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien Date March 1 Levy Date July 1 to June 30 Due Date November 1- 1st Installment March 1- 2nd Installment Delinquent Date December 10- 1st Installment April 10- 2nd Installment Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the agencies based on complex formulas prescribed by the state statutes. i. Relationship to the City of Palm Desert: The Community Redevelopment Agency of the City of Palm Desert is an integral part of the reporting entity of the City of Palm Desert, California. The funds and account groups of the Agency have been included within the scope of the general purpose financial statements of the City because the City Council of the City of Palm Desert exercises oversight responsibility over the operations of the Agency. Only the funds and account groups of the Agency are included herein and these financial statements, therefore, do not purport to represent the financial position or results of operations of the City of Palm Desert. j. Comparative Data: Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the Agency's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund type) data have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. See independent auditors' report. -9- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): k. Total Columns on Combined Statements: Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns is not comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 2. ORGANIZATION AND TAX INCREMENT FINANCING: The Agency is a separate governmental entity as prescribed in the California Community Redevelopment law and as set forth in the Health and Safety Code of the State of California. The Agency consists of Project Area 1, Project Area 2, Project Area 3 and Project Area 4. Agency expenses include capital improvement projects and operating costs which include required staff support and consultant services. The Agency's primary source of revenue comes from property taxes, referred to in the accompanying financial statements as "tax increment revenue". The assessed valuation of all property within each project area was determined on the date of adoption of the Project Area. Property taxes related to the incremental increase in assessed values after the adoption of the Project Area have been allocated to the Agency; all taxes on the "frozen" assessed valuation of the property have been allocated to the City and other districts. 3. CASH AND INVESTMENTS: Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments pooled with the City $ 22,276,755 Investments in litigation (Note 11) 4,212,144 Cash and investments with fiscal agent 72,920,794 $ 99,409,693 The Agency's funds are pooled with the City of Palm Desert cash and investments in order to generate optimum interest income. The information required by GASB Statement No. 3 related to authorized investments, credit risk, etc. is available in the annual report for the City. See independent auditors' report. -10- PALM DESERT REDEVELOPMENT AGENC' NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 3. CASH AND INVESTMENTS (CONTINUED): Cash and investments held by fiscal agent consisted of the following: Market Cost Values Bank of America $ 72,911,473 $73,525,836 Bank of America - Housing 9,321 9,321 $ 72,920,794 $73,535,157 4. LOANS RECEIVABLE: Special Revenue Fund Loans receivable include the following: a) A $1,375,100 loan receivable from Portola Palms Mobilehome Park Acquisition Association, Inc. (Association). Funds in the amount of $1,701,500 were loaned to the Association to allow the Association to purchase the first trust deed note securing the property from Ring Financial, Inc. The Redevelopment Agency's loan is secured by a first trust deed and as of June 30 1995, $326,400 has been repaid to the Redevelopment Agency from the sale of individual lots by the Association. The remaining balance will be repaid as the Association sells other lots in the mobile home park. b) Other loans of$429,000 consists of loans made to low income households to assist in the purchase of individual homes. The notes are secured by a deed of trust and will not be repaid until the homes are sold. See independent auditors' report. -11- ' PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 4. LOANS RECEIVABLE (CONTINUED): Debt Service Fund Included in loans receivable is a $5,899,000 loan to "The Brothers", a California partnership which developed a portion of the Civic Center Site. The Redevelopment Agency funded the loan by remitting to Palm Desert National Bank the $5,899,000 to set up a construction loan to the Brothers. The note is payable to the Palm Desert National Bank but has been assigned to the Redevelopment Agency. Interest accrues on the unpaid principal balance at the rate of 10 percent per annum. Monthly payments of interest only are payable until June 1, 1996, or five years after the issuance of a certificate of completion, at which time principal and interest shall be paid in equal monthly installments in an amount sufficient to apply all principal and interest in full within 25 years of the issuance of a certificate of completion. 5. GENERAL FIXED ASSETS: A summary of changes in General Fixed Assets for the year ended June 30, 1995 is as follows: Beginning Ending Balance Additions Deletions Balance Land $40,036,480 $ 3,796,821 $ - $43,833,301 Buildings and improvements 15,211,155 1,609,066 - 16,820,221 Equipment - 8,079 - 8,079 Work-in-Progress 1,536,920 3,054,002 - 4,590,922 $56,784,555 $ 8,467,968 $ - $65,252,523 Certain land has been included in the general fixed assets account group until a determination is made on the use of the land. 6. AMOUNTS DUE UNDER PASS THROUGH AGREEMENTS: Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are, except where otherwise provided by specific agreement, allocated to the Agency. The Agency has entered into various pass-through agreements with other agencies to allocate its tax increment revenue. At June 30, 1995, the Agency is holding $10,579,574 in trust on behalf of other agencies and entities related to specific pass-through agreements detailed as follows: See independent auditors' report. -12- PALM DESERT REDEVELc-- v1ENT AGENCY • NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 • 6. AMOUNTS DUE UNDER PASS-THROUGH AGREEMENTS (CONTINUED): Balance Balance at July 1, at June 30, Entity 1994 Additions Payments 1995 Riverside County - Capital Improvement $ 4,776,468 $ 3,173,396 $ 304,385 $ 7,645,479 Riverside County - Schools 51,271 59,949 - 111,220 Riverside County - Library 221,370 207,031 - 428,401 Riverside County - Fire 268,332 326,095 414,500 179,927 Coachella Valley Mosquito Abatement District 319,817 104,227 319,817 104,227 Coachella Valley Water District 74,221 106,440 - 180,661 Desert Community College District 44,001 100,258 44,001 100,258 Desert Sands Unified School District 739,044 508,953 157,412 1,090,585 Coachella Valley Recreation and Park District 51,303 35,661 51,303 35,661 Coachella Valley Resources District 2,209 392 - 2,601 Palm Springs Unified School District 4,816 256 - 5,072 County Juvenile Health District 326,689 482,688 497,244 312,133 Ahmanson Trust 364,024 19,325 - 383,349 $ 7,243,565 $ 5,124,671 $ 1,788,662 $ 10,579,574 7. GENERAL LONG-TERM DEBT: The changes in the General Long-Term for the year ended June 30, 1995 were as follows: Balance at Balance at July 1, June 30, 1994 Additions Deletions 1995 Advances from City $ 11,334,000 $ 8,000,000 $ 334,000 $ 19,000,000 Tax Allocation Bonds 121,395,000 28,115,000 1,880,000 147,630,000 $132,729,000 $36,115,000 $ 2,214,000 $166,630,000 See independent auditors' report. -13- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 7. GENERAL LONG-TERM DEBT (CONTINUED): a. Advances From City: The Redevelopment Agency has received advances from.the City which have been recorded as an "Other Financing Sources" in the Agency's Capital Project Funds. Since payment by the Agency back to the City will be made from tax increment revenues in future years, the debt from the Agency to the City has been classified in the Long-Term Debt account group. Below is a summary of the activity for the advances from the City to the Redevelopment Agency: Date of Rates of Amount Beginning Ending Issue Interest Authorized Balance Additions Payments Balance 12/05/86 Varies $6,000,000 $ 6,000,000 $ - $ - $ 6,000,000 12/12/91 Varies 120,000 120,000 - 120,000 - 01/14/93 Varies 164,000 164,000 - 164,000 - 06/24/93 Varies 50,000 50,000 - 50,000 - 09/23/93 Varies 5,000,000 5,000,000 - - 5,000,000 03/23/95 Varies 8,000,000 - 8,000,000 - 8,000,000 Principal Balance 11,334,000 8,000,000 334,000 19,000,000 Accrued Interest - 327,514 327,514 - $11,334,000 $ 8,327,514 $ 661,514 $19,000,000 b. Tax Allocation Bonds: Tax allocation bonds are special obligations of the Agency and the Palm Desert Financing Authority (a component unit of the Redevelopment Agency), and are secured by an irrevocable pledge of tax revenues and other funds as provided under the Bond Resolution. The Bonds, and any interest thereon are not a debt of the City, the State of California or any of its political subdivisions and neither the City, the State of California nor any of its political subdivisions is liable on the Bonds, nor in any event shall the Bonds, and interest thereon be payable out of any funds or properties other than those provided under the Bond Resolution. See independent auditors' report. -14- PALM DESERT REDEVELO1-:vIENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds (Continued): 1995 Series Tax Allocation Revenue Bonds (Project Area No. 1) In June 1995, the Palm Desert Financing Authority issued $24,025,000 of Tax Allocation Bonds, (Project Area No. 1) Series 1995. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 1. Interest rates on the bonds vary from 4.0% to 5.2% per annum payable semiannually on April 1 and October 1 with principal maturing annually. The future debt service requirements on the 1995 Series Tax Allocation Revenue Bonds (Project Area No. 1) are as follows: Year Ending June 30, Principal Interest Total 1996 $ - $ 1,169,848 $ 1,169,848 1997 160,000 1,403,818 1,563,818 1998 170,000 1,396,778 1,566,778 1999 180,000 1,388,873 1,568,873 2000 185,000 1,380,323 1,565,323 Thereafter 23,330,000 22,497,015 45,827,015 $ 24,025,000 $ 29,236,655 $ 53,261,655 See independent auditors' report. -15- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds (Continued): 1995 Series Tax Allocation Revenue Bonds (Project Area No. 2) In June 1995, The Palm Desert Financing Authority issued $4,090,000 of Tax Allocation Bonds, (Project Area No. 2) Series 1995. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 2. Interest rates on the bonds vary from 4.75% to 5.2% per annum payable semiannually on February 1 and August 1 with principal maturing annually on August 1. The future debt service requirements on the 1995 Series Tax Allocation Revenues Bonds (Project Area No. 2) are as follows: Year Ending June 30, Principal Interest Total 1996 $ - $ 159,957 $ 159,957 1997 - 239,935 239,935 1998 - 239,935 239,935 1999 - 239,935 239,935 2000 25,000 239,342 264,342 Thereafter 4,065,000 4,009,455 8,074,455 $ 4,090,000 $ 5,128,559 $ 9,218,559 See independent auditors' report. -16- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds (Continued): 1992 Series A Tax Allocation Revenue Bonds (Project Area No. 1 as Amended) In April 1992, the Palm Desert Financing Authority issued $100,000,000 in Palm Desert Financing Authority Tax Allocation Revenue Bonds (Project Area No. 1 as Amended) 1992 Series A. $42,764,702 of the $100,000,000 was loaned to the Agency to advance refund the 1985 Tax Allocation Bonds, 1985 Tax Allocation Refunding Bonds and the 1989 Tax Allocation Bonds. $40,844,733 was loaned to the Redevelopment Agency to fund additional projects in the project area. Interest on the Current Interest Bonds (the "Current Interest Bonds") (which consist of the portion of the Bonds not constituting the Dutch Action Floating Securities and the Inverse Floating Securities, described later), varies from 4.00% to 6.625% and is payable on October 1, 1992, and semi-annually thereafter on April 1 and October 1. The Bonds maturing on April 1, 2022 consist of $39,350,000 Dutch Auction Floating Securities and $39,350,000 Inverse Floating Securities. Interest on the Dutch Auction Floating Securities and Inverse Floating Securities was initially paid on June 4, 1992 and is due generally every 35 days from that date. The future estimated debt service requirements on the 1992 Series A Tax Allocation Revenue Bonds (Project Area No. 1 as Amended) are as follows: Year Ending June 30, Principal Interest Total 1996 $ 1,425,000 $ 5,852,563 $ 7,277,563 1997 1,580,000 5,777,751 7,357,751 1998 1,670,000 6,170,479 7,840,479 1999 1,760,000 5,595,557 7,355,557 2000 1,860,000 5,974,935 7,834,935 Thereafter 87,795,000 77,056,353 164,851,353 $ 96,090,000 $106,427,638 $202,517,638 See independent auditors' report. -17- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds (Continued): 1992 Series A Tax Allocation Revenue Bonds (Project Area No. 2) In August 1992, the Palm Desert Financing Authority issued $17,505,000 of Tax Allocation Bonds, (Project Area No. 2) 1992 Series A. The Palm Desert Financing Authority loaned the bond proceeds to the Palm Desert Redevelopment Agency to finance certain redevelopment activities of the Agency in Project Area No. 2. Interest rates on the bonds vary from 2.7% to 6.125% per annum payable semiannually on February 1 and August 1 with principal maturing annually on August 1 from 1993 to 2002. The future debt service requirements on the 1992 Series A Tax Allocation Revenue Bonds (Project Area No. 2) are as follows: Year Ending June 30, Principal Interest Total 1996 $ 265,000 $ 1,003,713 $ 1,268,713 1997 280,000 992,462 1,272,462 1998 290,000 979,988 1,269,988 1999 300,000 966,337 1,266,337 2000 315,000 951,338 1,266,338 Thereafter 15,545,000 13,341,291 28,886,291 $ 16,995,000 $ 18,235,129 $ 35,230,129 See independent auditors' report. -18- PALM DESERT REDEVELOPMENT AGENCY • NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 • 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds (Continued): • 1988 Tax Allocation Bonds The Bonds were issued in an original amount of $7,800,000 on September 1, 1988 to finance improvements in Project Area 1 as amended. Interest rates on the Bonds vary from 5.75% to 7.30% with interest payable semi-annually on March 1 and September 1 with principal maturing annually on September 1. Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total 1996 $ 280,000 $ 453,045 $ 733,045 1997 295,000 433,635 728,635 1998 320,000 412,565 732,565 1999 340,000 389,625 729,625 2000 365,000 364,768 729,768 2001 390,000 337,965 727,965 2002 420,000 308,790 728,790 2003 455,000 276,853 731,853 2004 490,000 242,360 732,360 2005 525,000 205,313 730,313 2006 570,000 165,345 735,345 2007 610,000 122,275 732,275 2008 660,000 75,920 735,920 2009 710,000 25,915 735,915 $ 6,430,000 $ 3,814,374 $ 10,244,374 See independent auditors' report. -19- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 7 GENERAL LONG-TERM DEBT (CONTINUED) b. Tax Allocation Bonds (Continued): Below is a summary of the changes in Tax Allocation Bonds: Balance at Balance at July 1, 1994 Additions Payments June 30, 1995 1995 Tax Allocation Bonds (Project Area No. 1 as Amended) $ - $ 24,025,000 $ - $ 24,025,000 1995 Tax Allocation Bonds (Project Area No. 2) - 4,090,000 - 4,090,000 1992 Tax Allocation Bonds (Project Area No.1 as Amended) 97,450,000 - 1,360,000 96,090,000 1992 Tax Allocation Bonds (Project Area No. 2) 17,255,000 - 260,000 16,995,000 1988 Tax Allocation Bonds 6,690,000 - 260,000 6,430,000 $ 121,395,000 $ 28,115,000 $ 1,880,000 $ 147,630,000 See independent auditors' report. -20- PALM DESERT REDEVELOPMENT AGENT NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 8. BOND REQUIREMENTS: At June 30, 1995 the reserve balance requirements and actual balances were as follows: Issue Requirement Actual 1988 Tax Allocation Bonds $ 643,000 $ 773,359 1992 Series A Tax Allocation Bonds (Project Area No. 1 as Amended) $ 7,841,271 $ 16,189,558 1992 Series A Tax Allocation Bonds (Project Area No. 2) $ 1,278,556 $ 1,448,992 1995 Series Tax Allocation Bonds (Project Area No. 1 as Amended) $ 1,955,525 $ 15,327,950 1995 Series Tax Allocation Bonds (Project Area No. 2) $ 343,900 $ 2,560,087 These actual amounts are included in the Fund Balance Reserved or designated for Debt Service (see Note 10). 9. DEFEASED OBLIGATIONS: The Agency defeased certain Redevelopment obligations by placing the proceeds of new obligations in an irrevocable trust to provide for all future debt service payments on the old obligations. Accordingly, the trust account assets and the liability for the defeased obligations are not included in the accompanying financial statements. The amount of defeased debts still outstanding at June 30, 1995 was as follows: Amount Defeased Issue Outstanding 1982 Tax Allocation Bonds $ 5,290,000 1985 Refunding Tax Allocation Bonds $ 13,000,000 1985 Tax Allocation Bonds $ 20,095,000 1989 Tax Allocation $ 4,935,000 See independent auditors' report. -21- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 10. RESERVES AND DESIGNATIONS OF FUND EQUITY: Special Debt Capital Revenue Service Projects Reserves Fund Fund Fund Continuing appropriations $ - $ - $21,974,708 Encumbrances 26,431 - 1,264,351 Receivables 1,821,601 5,899,000 - Prepaid expense - - 3,157 Debt service 643,000 11,419,252 - Low income purposes 393,986 - - $ 2,885,018 $ 17,318,252 $23,242,216 Designations Debt service $ 130,359 $ 37,952,192 $ - Capital outlay - - 18,398,549 $ 130,359 $ 37,952,192 $ 18,398,549 Reserved for Continuing Appropriations - This reserve is for appropriations for capital projects which are unexpected as of June 30, 1995 and are carried forward as continuing appropriations to be expended in 1995-96. Reserved for Encumbrances - These reserves represent the portion of purchase orders awarded for which the goods or services had not yet been received at June 30, 1995. Although all appropriations lapse at year-end, even if encumbered, the City intends either to honor the contracts in progress or to cancel them. Reserve for encumbrances are rebudgeted on July 1, by Council action. Reserved for Receivables - This reserve is set up to reflect the non-current portion receivables so that they will not be considered as current funds available. Reserved for Prepaid Expenses - This reserve represents contracted obligations for cash payments made before June 30, 1995, but not recognized as an expenditure until after July 1, 1995. Reserved for Debt Service -These reserves for Debt Service represent reserves accumulated by the Agency that are legally restricted to the payment of long-term debt principal and interest amounts that mature in future years. See independent auditors' report. -22- PALM DESERT REDEVELOPMi';NT AGEivCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 10. RESERVES AND DESIGNATIONS OF FUND EQUITY (CONTINUED): Reserved for Low Income Purposes - This reserve is for amounts set aside from tax increment money received by the Agency and is to be spent on projects benefitting low income families. Designated for Debt Service - These funds are designated for payment of principal and interest on General Long-Term Debt. Designated for Capital Outlay - These funds are designed for capital outlay for future projects. 11. INVESTMENTS IN LITIGATION: In December 1991, it was learned that the Securities and Exchange Commission (SEC) was conducting an investigation of the Institutional Treasury Management (ITM) and had frozen certain assets administered by ITM including the Agency's. It was subsequently announced that ITM had diverted funds and/or securities in the client accounts to other accounts without the client's knowledge. The Redevelopment Agency internal records identify $4,212,144 being invested with ITM but the investments have not been verified with a third party. At June 30, 1995, the financial statements reflect the amounts invested with ITM which have not been confirmed with a third party. The Agency has retained counsel to discover the facts in this case and to take appropriate legal action to protect the interests of the Agency. Management is confident that the actions legal counsel has taken to date will result in the best possible return of the funds. As of June 30, 1995, management does not know the amount of funds the court may award from the investment principal of $4,212,144. The Agency will pursue recovery from third parties of any amounts not recovered. See independent auditors' report. -23- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1995 12. MORTGAGE REVENUE BONDS: In August 1994, the Palm Desert Redevelopment Agency issued $15,100,000 in Variable Rate Demand 1994 Multifamily Housing Revenue Bonds (Bonds). The Agency issued the bonds to finance a loan to Civic Center Barrio Housing Corporation (Corporation), a California Non-Profit Public Benefit Corporation pursuant to a financing agreement between the Agency and the Corporation dated August 1, 1994 to provide funds to provide permanent financing for 161 newly constructed residences and related improvements in the City of Palm Desert to be owned by the Corporation and sold or leased, with an option to purchase, to low and moderate income persons and families. The Bonds are limited revenue obligations of the Agency payable solely from the repayment of mortgage loans (with respect to the Bonds other than the Tax Allocation Bonds), the pledged tax revenues (with respect to the Tax Allocation Bonds), and the funds and accounts pledged under the indenture. The Agency has pledged tax revenues in a sum not to exceed $600,000 per annum to pay debt service on any bonds converted to Tax Allocation Bonds. 13. SUBSEQUENT EVENT In August 1995, the Palm Desert Financing Authority issued $6,305,000 in Tax Allocation Revenue Refunding Bonds 1995 Series A. The proceeds from the tax allocation bonds were loaned to the Agency to provide funds to refund in advance $6,430,000 in the 1988 Tax Allocation Bonds (see Note 7). The advance refunding resulted in an economic gain of $907,760 (difference between the present value of the annual debt service payments between the old debt and new debt) and a decrease in aggregate debt service payments of $1,441,052. See independent auditors' report. -24- PALM DESERT REDEVELOPMENT AGENCY COMBINING BALANCE SHEET—ALL DEBT SERVICE FUNDS June 30, 1995 Project Project Project Project Area 1 Area 2 Area 3 Area 4 ASSETS Cash and investments $ 19,290,108 $ 1,823,046 $ 389,678 $ 536,666 Cash with fiscal agent — — —Interest receivable 90,037 — — — Due from other governmental agencies — — — — Due from other funds 2,851,423 — — — Loans receivable 5,899,000 — —Prepaid expenses and deposits — — — — TOTAL ASSETS $ 28,130,568 $ 1,823,046 $ 389,678 $ 536,666 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable $ 2,163 $ — $ — $ — Deferred revenue 584,364 — — — Amounts due under pass-through agreements 9,621,189 265,619 184,699 508,067 TOTAL LIABILITIES 10,207,716 265,619 184,699 508,067 FUND BALANCES: Reserved: Prepaid expenses — — — — Loan receivable 5,899,000 — — — Accounts receivable — — — — Debt service — — — — Unreserved: Designated for debt service 12,023,852 1,557,427 204,979 28,599 TOTAL FUND BALANCES 17,922,852 1,557,427 204,979 28,599 TOTAL LIABILITIES AND FUND BALANCES $ 28,130,568 $ 1,823,046 $ 389,678 $ 536,666 —25— Financing Totals Authority 1995 1994 $ — $ 22,039,498 $ 9,085,989 35,265,445 35,265,445 17,185,693 350,498 440,535 45,674 125,110 — 2,851,423 11,280,085 — 5,899,000 5,899,000 480,528 $ 35,615,943 $ 66,495,901 $ 44,102,079 $ 59,356 $ 61,519 $ 452 584,364 98,000 — 10,579,574 7,243,565 59,356 11,225,457 7,342,017 480,528 — 5,899,000 5,899,000 — — 125,106 11,419,252 11,419,252 8,572,406 24,137,335 37,952,192 21,683,022 35,556,587 55,270,444 36,760,062 $ 35,615,943 $ 66,495,901 $ 44,102,079 —26— PALM DESERT REDEVELOPMENT AGENCY COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES—ALL DEBT SERVICE FUNDS For the year ended June 30, 1995 Project Project Project Project Area 1 Area 2 Area 3 Area 4 REVENUES: Tax increment $ 16,505,934 $ 4,906,863 $ 464,930 $ 945,087 Use of money and property 1,036,544 71,346 7,929 19,109 Reimbursement from other agencies 461,799 — — — TOTAL REVENUES 18,004,277 4,978,209 472,859 964,196 EXPENDITURES: Educational revenue augmentation fund 604,387 177,485 — — Payment to other governmental agencies 4,349,003 1,573,562 71,470 508,067 Bond issuance costs — — — — Bond discount — — — — Interest and fiscal charges 32,035 778,335 3,110 24,513 Principal payments — — 120,000 214,000 TOTAL EXPENDITURES 4,985,425 2,529,382 194,580 746,580 EXCESS OF REVENUES OVER (UNDER)EXPENDITURES 13,018,852 2,448,827 278,279 217,616 OTHER FINANCING SOURCES (USES): Proceeds from bonds — — — — Operating transfers in — — — — Operating transfers out (12,800,312) (2,254,526) (92,986) (189,017) TOTAL OTHER FINANCING SOURCES (USES) (12,800,312) (2,254,526) (92,986) (189,017) EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES 218,540 194,301 185,293 28,599 FUND BALANCES—BEGINNING OF YEAR 17,704,312 1,363,126 19,686 — FUND BALANCES—END OF YEAR $ 17,922,852 $ 1,557,427 $ 204,979 $ 28,599 —27— Financing Totals Authority 1995 1994 $ — $ 22,822,814 $ 16,766,222 493,455 1,628,383 2,692,261 — 461,799 491,571 493,455 24,912,996 19,950,054 — 781,872 781,686 — 6,502,102 5,637,629 613,623 613,623 — 351,438 351,438 — 7,422,992 8,260,985 7,993,862 1,620,000 1,954,000 4,855,532 10,008,053 18,464,020 19,268,709 (9,514,598) 6,448,976 681,345 18,850,555 18,850,555 — 8,547,692 8,547,692 12,071,871 — (15,336,841) (9,424,456) 27,398,247 12,061,406 2,647,415 17,883,649 18,510,382 3,328,760 17,672,938 36,760,062 33,431,302 $ 35,556,587 $ 55,270,444 $ 36,760,062 —28— PALM DESERT REDEVELOPMENT AGENCY COMBINING BALANCE SHEET—ALL CAPITAL PROJECTS FUNDS June 30, 1995 Project Project Project Project Area 1 Area 2 Area 3 Area 4 ASSETS Cash and investments $ — $ 3,549,805 $ 92,880 $ 59,828 Cash with fiscal agent 32,076,816 4,795,852 — — Interest receivable 409,105 50,143 — — Due from other governmental agencies 3,692,719 8,200 — — Prepaid expenses and deposits 3,157 — — — TOTAL ASSETS $_36,181,797 $ 8,404,000 $ 92,880 $ 59,828 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable $ 161,528 $ 75,606 $ — $ — Accrued liabilities 9,183 — — — Due to other funds 2,851,423 — — — TOTAL LIABILITIES 3,022,134 75,606 — — FUND BALANCES: Reserved: Prepaid expenses 3,157 — — — Continuing appropriations 15,549,708 6,425,000 — — Encumbrances 1,137,645 63,044 10,000 53,662 Receivables — — — — Unreserved: Designated for capital outlay 16,469,153 1,840,350 82,880 6,166 TOTAL FUND BALANCES 33,159,663 8,328,394 92,880 59,828 TOTAL LIABILITIES AND FUND BALANCES $ 36,181,797 $ 8,404,000 $ 92,880 $ 59,828 —29— Totals 1995 1994 $ 3,702,513 $ 437,451 36,872,668 43,534,187 459,248 190,338 3,700,919 69,090 3,157 7,272 $ 44,738,505 $ 44,238,338 $ 237,134 $ 769,146 9,183 — 2,851,423 11,280,084 3,097,740 12,049,230 3,157 7,272 21,974,708 20,744,091 1,264,351 582,698 69,090 18,398,549 10,785,957 41,640,765 32,189,108 $ 44,738,505 $ 44,238,338 —30— PALM DESERT REDEVELOPMENT AGENCY COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES—ALL CAPITAL PROJECTS FUNDS For the year ended June 30, 1995 Project Project Project Project Area 1 Area 2 Area 3 Area 4 REVENUES: Use of money and property $ 584,004 $ 195,086 $ 5,374 $ 4,309 Sale of land — — — — Reimbursement from other agencies 3,692,719 — — — Other revenues 1,077 36 — — TOTAL REVENUES 4,277,800 195,122 5,374 4,309 EXPENDITURES: Administrative costs 423,512 179,051 11,658 23,660 Professional services 570,204 112,934 3,567 3,566 Planning, survey and design — 650,163 — — Assessment district taxes — — — — Capital outlay 6,761,798 2,544 — — Cost of land sold — — — — Land purchases 3,439,233 302,973 — — TOTAL EXPENDITURES 11,194,747 1,247,665 15,225 27,226 EXCESS OF REVENUES (UNDER)EXPENDITURES (6,916,947) (1,052,543) (9,851) (22,917) OTHER FINANCING SOURCES(USES): Proceeds from bonds 7,888,162 1,376,283 — — Operating transfers in 2,118,470 — — — Operating transfers out (1,929,000) — — — Advance from City 2,500,000 5,500,000 — — TOTAL OTHER FINANCING SOURCES(USES) 10,577,632 6,876,283 — — EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER)EXPENDITURES AND OTHER FINANCING USES 3,660,685 5,823,740 (9,851) (22,917) FUND BALANCES—BEGINNING OF YEAR 29,498,978 2,504,654 102,731 82,745 FUND BALANCES—END OF YEAR $ 33,159,663 $ 8,328,394 $ 92,880 $ 59,828 —31— Totals 1995 1994 $ 788,773 $ 3,749,568 — 5,969,999 3,692,719 — 1,113 383,628 4,482,605 10,103,195 637,881 404,814 690,271 1,243,676 650,163 98,254 — 199,175 6,764,342 5,341,578 — 5,031,432 3,742,206 12,012,348 12,484,863 24,331,277 (8,002,258) (14,228,082) 9,264,445 — 2,118,470 408,117 (1,929,000) (3,055,532) 8,000,000 5,000,000 17,453,915 2,352,585 9,451,657 (11,875,497) 32,189,108 44,064,605 $ 41,640,765 $ 32,189,108 —32— SUPPLEMENTAL INFORMATION PALM DESERT REDEVELOPMENT AGENCY SUPPLEMENTAL SCHEDULE TAX INCREMENT SHIFT TO EDUCATIONAL REVENUE AUGMENTATION FUND June 30, 1995 Total Tax Increment to be shifted to the Educational Revenue Augmentation Fund (ERAF) per State Department of Finance (DOF) letter dated October 3, 1994 $ 781,872 Funding Sources: Redevelopment Agency: Agency tax increment $ 781,872 Other agency funds - Total Agency Funds $ 781,872 Agency Borrowing: From current 20% Low & Moderate Income Housing Funds From legislative body - Total Borrowed Funds Total Tax Increment Shift to ERAF $ 781,872 See independent auditors' compliance opinion. -33- &Tani & Comh,anty ��((��CERTIFIED PUBLIC ACCOUNTANTS (DiCa'Z 1. CERTIFIED PUBLIC ACCOUNTANT 18401 VON KARMAN, SUITE 200 a joint venture 74-133 EL PASEO, SUITE 8 IRVINE,CALIFORNIA 92715-1542 PALM DESERT,CALIFORNIA 92260 (714)757-7700 (619)773-4078 September 22, 1995 INDEPENDENT AUDITORS' COMPLIANCE REPORT Agency Members Palm Desert Redevelopment Agency Palm Desert, California We have audited the financial statements of the Palm Desert Redevelopment Agency (a component unit of the City of Palm Desert), as of and for the year ended June 30, 1995, and have issued our opinion thereon dated September 22, 1995. We conducted our audit in accordance with generally accepted auditing standards and Government 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 misstatements. Compliance with laws and regulations applicable to the Palm Desert Redevelopment Agency is the responsibility of the Palm Desert Redevelopment Agency's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of compliance with provisions of laws and regulations contained in the Guidelines For Compliance Audits of California Redevelopment Agencies issued by the State Controller's Office, Division of Local Governmental Fiscal Affairs. The result of our tests indicted that, with respect to the items tested, the Palm Desert Redevelopment Agency complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to out attention that caused us to believe that the Palm Desert Redevelopment Agency had not complied, in all material respects, with those provisions. This report is intended for the information of the Palm Desert Redevelopment Agency, and the State Controller's Office. However, this report is a matter of public record and its distribution is not limited. 00_1_44,( -34-