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Home My WebLink AboutRDA Audited Financial Statements FYE 06-30-1997 � D N T ER MEMO OF F ICE To: HONORABLE CHAIRMAN o . Ml MEMBERS OF THE REDEVELOPMENT AGENCY BOARD From: Paul S. Gibson, Director of Finance/City Treasurer Subject: Audited Financial Reports for the Fiscal Year Ending June 30. 1996 0 Date: January 23, 1997 c >-- I*1 RECOMMENDATION: n )i Ez,) Receive and file the audited Financial Statements for the Palm Desert Redevelopment Atnc c o for fiscal year ending June 30, 1996. L rvo BACKGROUND: -02 O > O Diehl, Evans and Company in joint venture with a local firm, Oscar G. Armijo, CPA, performed and completed the annual independent audit for fiscal year ending June 30, 1996, for the Palm Desert Redevelopment Agency in September 1996, 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, 1996, 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 Investment&Finance Committee at their January 15, 1997, regular meeting. Staff recommends to receive and file the audited financial statements for the Palm Desert Redevelopment Agency for fiscal year ending June 30, 1996. Mr. Oscar Armijo, CPA and Engagement Partner from the local audit firm, is available for further questions. Respectfully submitted, Reviewed and concur: Paul S. Gibson Carlos L. Ortega, E utive Director Director of Finance/City Treasurer of the Redevelopment Agency /rk PALM DESERT REDEVELOPMENT AGENCY COMPONENT UNIT FINANCIAL STATEMENTS WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 1996 p PALivi DESERT REDEVELOPMENT AGE ' TABLE OF CONTENTS June 30, 1996 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 Statement of Revenues, Expenses and Changes in Retained Earnings - Enterprise Fund 6 Statement of Cash Flows - Enterprise Fund 7 Notes to Financial Statements 8 - 28 Supplemental Information: Combining Balance Sheet - All Debt Service Funds 29 - 30 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - All Debt Service Funds 31 - 32 Combining Balance Sheet - All Capital Projects Funds 33 - 34 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - All Capital Projects Funds 35 - 36 Independent Auditors' Compliance Report 37 • • )iEI L, Euani & Comtaney CERTIFIED PUBLIC ACCOUNTANTS acaz �. ogtmi/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 INDEPENDENT AUDITORS' REPORT (619) i i 3-4078 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, 1996 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, 1996, and the results of its operations and cash flows for its proprietary fund type for the year then ended in conformity with generally accepted accounting principles. 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. /91,1ill 4-441474PHAd_ OZ77-9 September 24, 1996 (except for the information in Note 14a, as to which the date is October 3, 1996). -1- ti GENERAL PURPOSE FINANCIAL STATEMENTS ir 7111 PALM DESERT REDEVELOPMENT Aw NCY COMBINED BALANCE SHEET—ALL FUND TYPES AND ACCOUNT GROUPS June 30, 1996 Governmental Fund Types Special Debt Capital Revenue Service Projects ASSETS AND OTHER DEBITS ASSETS: Cash and investments (Notes 3 and 11) $ 640,400 $ 16,942,468 S 579,872 Cash with fiscal agent(Notes 3 and 11) 1,110,763 35,873,065 31,882,163 Accounts receivable 569,926 — 34,934 Interest receivable 1,569 20,561 694,754 Due from other governmental agencies — 7,826 6,051,353 Due from other funds — 1,568,365 5,401,360 — Loans receivable(Note 4) — — Prepaid expenses and deposits — 10,950,000 2,375 275,341 Inventory held for resale (Notes lg and 7c) — — Fixed assets (Note 5) — — — OTHER DEBITS: Amount available in debt service funds — — — Amount to be provided for payment of long—term debt — — — TOTAL ASSETS AND OTHER DEBITS $ 14,841,023 $ 58,247,655 S 39,518,417 LIABILITIES, EQUITY AND OTHER CREDITS LIABILITIES: Accounts payable $ 408,296 $ 44,568 $ 1,856,854 Accrued liabilities — — 14,864 Deposits payable — — — Deferred revenue — — — Due to other funds — — 5,401,360 Amounts due under pass—through agreements(Note 6) — 9,236,868 — General long—term debt(Notes 7 and 14) — — — TOTAL LIABILITIES 408,296 9,281,436 7,273,078 EQUITY AND OTHER CREDITS: Investment in general fixed assets — — — Contributed capital(Note 12) — — — Retained earnings: Unreserved — — — Fund balances (Note 10): Reserved 14,432,727 12,051,947 13,760,082 Unreserved—designated — 36,914,272 18,485,257 TOTAL EQUITY AND OTHER CREDITS 14,432,727 48,966,219 32,245,339 TOTAL LIABILITIES, EQUITY AND OTHER CREDITS $ 14,841,023 S 58,247,655 $ 39,518,417 See independent auditors' report and notes to financial statements. —2— -1"'-- 1 . , . , Proprietary Fund Type Account Groups Totals (Memorandum Only) General General Fixed Long—Term Enterprise Assets Debt June 30, 1996 June 30, 1995 $ 298,890 $ — $ — $ 18,461,630 $ 26,488,899. — — — 68,865.991 72,920,794 — — — 604,860 - — — — 716,884 903,264 — — — 6,059,179 3,700,919 — — — 5,401,360 2,851,423 — — — 1,568,365 7,720,601 — — — 277,716 3,157 — — — 10,950,000 — 3,680,259 77,666,089 — 81,346,348 65,252,523 — — 48,966,219 48,966,219 55,270,444 — — 130,948,781 130,948,781 111,359,556 $ 3,979,149 S 77,666,089 $ 179,915,000 $ 374,167,333 $ 346,471,580 $ — $ — $ — $ 2,309,718 $ 637,927 — — — 14,864 9,183 I 25,600 — — 25,600 — 1,499 — — 1,499 584,364 — — — 5,401,360 2,851,423 — — — 9,236,868 10,579,574 — — 179,915,000 179,915,000 166,630,000 27,099 — 179,915,000 196,904,909 181,292,471 — 77,666,089 — 77,666,089 65,252,523 3,670,000 — — 3,670,000 — 282,050 — — 282,050 — — — — 40,244,756 43,445,486 — — — 55,399,529 56,481,100 3,952,050 77,666,089 — 177,262,424 165,179,109 $ 3,979,149 $ 77,666,089 $ 179,915,000 $ 374,167,333 $ 346,471,580 —3— PALM DESERT REDEVELOPMENT rivnNCY • COMBINED STATEMENT OF REVENUES.EXPENDITURES AND CHANGES IN FUND BALANCES—ALL GOVERNMENTAL FUND TYPES For the year ended June 30, 1996 Special Debt Capital Revenue Service Projects REVENUES: Tax increment S — $ 23,439,375 $ — Use of money and property 173,141 2,315,975 2,862,941 Sale of property 1,031,764 — — Reimbursement from other agencies 912,196 461,827 2,736,964 Other revenues 2,020 227,795 134,646 TOTAL REVENUES 2,119,121 26,444,972 5,734,551 EXPENDITURES: Administrative costs 273,208 — 836,114 Professional services 64,127 — 962,117 Planning, survey and design — — — Property tax administrative fee — — 374,722 — Loss on investment(Note 11) — 3,627,780 — Bad debt(Note 12) — 2,229,000 Cost of inventory sold 803,000 — — Capital outlay 164,187 — 9,828,412 Land purchases — — 3,563,819 Housing subsidies 5,774,074 — — Decline in value on inventory held for resale 3,347,000 — — Educational revenue augmentation fund — — — Payment to other governmental agencies — 6,386,052 — Debt service (Note 7) Bond issuance costs — 211,824 — Bond discount — 85,118 — Interest and fiscal charges 178,731 9,634,785 — Principal payments — 1,690,000 — TOTAL EXPENDITURES 10,604,327 24,239,281 15,190,462 • EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (8,485,206) 2,205,691 (9,455,911) OTHER FINANCING SOURCES(USES) Operating transfers in 11,263,431 9,986,555 2,879,018 Operating transfers out (179,000) (21,131,471) (2,818,533) Advance from City — — — Proceeds from bonds(Note 7) 15,100,000 6,305,000 — Payment to refund escrow agent(Note 7) (6,755,100) — — TOTAL OTHER FINANCING SOURCES(USES) 19,429,331 (4.839,916) 60,485 EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER(UNDER) EXPENDITURES AND OTHER FINANCING USES 10,944;125 (2,634,225) (9,395,426) FUND BALANCES—BEGINNING OF YEAR(NOTE 13) 3,488,602 55,270,444 41,640,765 RESIDUAL EQUITY TRANSFER OUT(NOTE 12) — (3,670,000) — FUND BALANCES—END OF YEAR $ 14,432.727 S 48,966.219 S 32.245.339 See independent auditors' report and notes to financial statements. —4— (Memorandum Only) June 30, June 30, 1996 1995 $ 23,439,375 $ 22,822,814 5,352,057 2,592,437 1,031,764 — 4,110,987 4,154,518 364,461 9,113 34,298,644 29,578,882 1,109,322 Lsioz1Y 954,242 zz.946.64 1,026,244 690,271 — 650,163 374,722 — 3,627,780 • — 2,229,000 • — 803,000. — 9,992,599• 10,593,691 3,563,819 • 3,742,206 5,774,074. 4,145,131 3,347,000 i — 781,872 6,386,052• 6,502,102 211,824 613,623 85,118 351,438 9,813,516 8,731,990 1,690,000 2,214,000 50,034,070 39,970,729 (15,735,426) (10,391,847) 24,129,004 17,265,841 (24,129,004) (17,265,841) 8,000,000 21,405,000 28,115,000 (6,755,100) — 14,649,900 36,115,000 (1,085,526) 25,723,153 100,399,811 74,676,658 (3,670,000) — $ 95,644,285 $ 100,399,811 —5— PALM DESERT REDEVELOPMENT A ICY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS—ENTERPRISE FUND For the year ended June 30, 1996 OPERATING REVENUES: Rental income S 490,772 OPERATING EXPENSES: Administrative 45,528 Insurance 2,322 Repairs and maintenance 36,816 Telephone 1,706 Trash disposal 3,521 Property taxes 46,163 Utilities 18,493 Depreciation 54,893 TOTAL OPERATING EXPENSES 209,442 OPERATING INCOME 281,330 NONOPERATING REVENUES(EXPENSES): Interest income 720 NET INCOME 282,050 RETAINED EARNINGS AT BEGINNING OF YEAR — RETAINED EARNINGS AT END OF YEAR S 282,050 See independent auditors' report and notes to financial statements. —6— 177— PALL.•%LESERT REDEVELOPMENT AGENCY STATEMENT OF CASH FLOWS ENTERPRISE FUND For the year ended June 30, 1996 CASH FLOWS FROM OPERATING ACTIVITIES: Operating income $ 281,330 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 54,893 Changes in operating assets and liabilities: Increase in deposit 27,099 Total adjustments 81,992 NET CASH PROVIDED BY OPERATING ACTIVITIES 363,322 CASH FLOWS USED BY CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets (65,153) CASH FLOWS FROM INVESTING ACTIVITIES: Interest income 720 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR — CASH AND CASH EQUIVALENTS AT END OF YEAR $ 298,889 Noncash items included contribution of capital assets in the amount of$3,670,000. See independent auditors' report and notes to financial statements. —7— 177 NOTES TO FINANCIAL STATEMENTS PALM DESERT REDEVELOPMENT AGi,NCY NOTES TO FINANCIAL STATEMENTS June 30, 1996 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 or expenses, as appropriate. 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 Fund Types: 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. Proprietary Fund Type: Enterprise Fund - Used to maintain accountability of assets, liabilities, revenues and expenses related to a commercial building owned by the Agency. Account Groups: The General Fixed Asset Account Group - Used to maintain control and cost information on capital assets owned by the Agency, not accounted for in the Building Enterprise Fund. General fixed assets are recorded as expenditures in the Capital Projects Fund at the time of purchase or construction. 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. -8- LM DESERT REDEVELOPMENT r-tyENCY • NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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 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. The accrual basis of accounting is followed by the proprietary fund. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. 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 balances (net current assets) are considered a measure of "available spendable resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other fmancing 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. The proprietary fund is accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and liabilities (whether current or noncurrent) associated with the activity are included on the balance sheet. Its reported fund equity represents total net assets. Proprietary fund operating statements presents increases (revenues) and decreases (expenses) in total net assets. See independent auditors' report. -9- • PAL ESERT REDEVELOPMENT AGED NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 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. 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. See independent auditors' report. -10- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 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. However, if the liquidity needs of the Agency were to require that investments be sold at a loss subsequent to year end, the decline in value would be recorded as a loss at year end. The Agency considers all highly liquid investments with a maturity of three months or less when purchased and all funds held in its commingled pool that are available to it and have the general characteristics of demand deposit accounts to be cash equivalents for purpose of the statement of cash flows. g. Inventory Held for Resale: Inventory held for resale is capitalized in the Special Revenue Fund at the lower of acquisition cost or net realizable value. As of June 30, 1996, the cost of inventory held for resale was $14,608,321, with an allowance for decline in value in the amount of $3,118,321, for a net amount of $10,950,000. 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. See independent auditors' report. -11- P, DESERT REDEVELOPMENT AC �Y NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): i. Relationship to the City of Palm Desert: The Palm Desert Redevelopment Agency 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. 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. In addition, the Agency and the City of Palm Desert (the City) have established the Palm Desert Financing Authority as a joint power of authority between the Agency and the City for purposes of financing and funding capital improvements. Transactions related to the joint power for the Agency are recorded in a debt service fund. Agency expenses include capital improvement projects and operating costs which include required staff support and consultant services. See independent auditors' report. -12- PALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 2. ORGANIZATION AND TAX INCREMENT FINANCING (CONTINUED): 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. Except for certain amounts provided by specific agreement (see Note 6), property taxes related to the incremental increase in assessed values after the adoption of the Project Area have been allocated to the Agency, while all property taxes on the "frozen" assessed valuation as of the adoption date 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 $ 18,461,630 Cash and investments with fiscal agent 68,865,991 $ 87,327,621 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 of the City. 4. LOANS RECEIVABLE: Special Revenue Fund Loans receivable include the following: a) A $1,189,400 loan receivable from Portola Palms Mobilehome Park Acquisition Association, Inc. (the Association). A loan of $1,701,500 was made to the Association to allow it 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 1996 $512,100 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) The Agency has loaned $212,830 in below market loans, secured by deeds of trust, to eligible low income households. Monthly payments of interest and principal are due over a period of 30 years unless the homes are sold, in which case the entire loan balance is due and payable. See independent auditors' report. -13- P.___.1 DESERT REDEVELOPMENT AC �Y NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 4. LOANS RECEIVABLE (CONTINUED): c) The Agency has $16,398 in home improvement loans. Payments of interest and principal are due monthly on these loans. d) The Agency has a loan receivable which is secured by a deed of trust on the Portola Palms Mobilehome Park property in the amount of $149,737. The balance on this loan will be paid when the Association has sold all the lots in the mobile park home. Other Loans: The Agency has issued loans for several other projects, all of which are secured by a deed of trust. A valuation allowance equal to the loan balance has been recognized where there is a significant possibility that these loans either become uncollectible or forgiven by the Agency at a future date if all the terms of the loans have been met. Detailed information for these loans is as follows: Loan Balance Interest Maturity Project Name Outstanding Rate Date Secured By Special Provisions of Loan Self-Help Housing Program $ 429,000 7.25% 30 yrs. Deed of Trust Loan balance and interest or 2024 due upon maturity,unpaid balance of loan or interest will bear an interest rate of 12%. Home Improvement Loans 20,095 N/A N/A Deed of Trust Loan is payable upon change or transfer of title, refinancing or upon the death of the borrower. Portola Palms Mobilehome Park 490,775 5.00% 15 years Deed of Trust Loan balance and interest from date due upon maturity.If debtor of loan is not in default with the note, deed of trust, loan agreement or restrictive covenant,then the Agency will forgive 2%per annum of the interest. Desert Rose 114,137 3.00% Year 2026 Deed of Trust Loan will be forgiven at maturity unless the debtor is in violation of the unit regulatory agreement or the deed of trust. See independent auditors' report. -14- P. 1 DESERT REDEVELOPMENT A( CY NaTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 5. FIXED ASSETS: A summary of changes in Fixed Assets for the year ended June 30, 1996 is as follows: General Fixed Assets Beginning Ending Balance Additions Deletions Balance Land $43,833,301 $ 3,563,819 $ 777 $47,396,343 Buildings and improvements 16,820,221 8,455,279 - 25,275,000 Equipment 8,079 12,486 - 20,565 Work-in-Progress 4,590,922 5,044,379 4,661,620 4,973,681 $65,252,523, $17,075,963 $.4,662t397 $77 666,089 Certain land has been included in the general fixed assets account group until a determination is made on the use of the land. Enterprise Fund Beginning Ending Balance Additions Deletions Balance Building $ - $ 3,670,000 $ - $3,670,000 Improvements - 65,152 - 65.152 Total - 3,735,152 - 3,735,152 Less accumulated depreciation - (54,893) - (54,893) $ - $ 3,680,259 $ - $3,680,259 Fixed assets purchased by the Enterprise Fund are capitalized at cost, while contributed assets are recorded at fair market value on the date donated. Depreciation is charged to operations using a straight-line method, based on the useful life of the asset. The estimated useful life of the building and improvements is 40 years. See independent auditors' report. -15- P�.�... DESERT REDEVELOPMENT AG__.y NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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, 1996, the Agency is holding $9,236,868 in trust on behalf of other agencies and entities related to specific pass-through agreements detailed as follows: Balance Balance at July 1, at June 30, Entity 1995 Additions Payments 1996 Riverside County - Capital Improvement $ 7,645,479 $ 3,203,197 $ 5,462,802 $ 5,385,874 * Riverside County - Schools 111,220 70,939 170,265 11,894 Riverside County - Library 428,401 237,854 - 666,255 * Riverside County - Fire 179,927 348,957 162,500 366,384 Coachella Valley Mosquito Abatement District 104,227 101,470 104,227 101,470 Coachella Valley Water District 180,661 132,439 - 313,100 Desert Community College District 100,258 115,311 73,522 142,047 * Desert Sands Unified School District 1,090,585 601,724 157,421 1,534,888 * Coachella Valley Recreation and Park District 35,661 40,680 35,661 40,680 Coachella Valley Resources District 2,601 582 - 3,183 Palm Springs Unified School District 5,072 432 - 5,504 County Juvenile Health District 312,133 442,691 505,253 249,571 Ahmanson Trust 383.349 32.669 - 416,018 $ 10,579,574 $ 5.328,945 $ 6,671,651 $ 9,236,868 * The Redevelopment Agency has used bond proceeds for the construction of capital improvements which benefit these entity's. These entities have agreements with the Redevelopment Agency will allow it to use a portion of these amounts to offset debt service costs. See independent auditors' report. -16- ammimmi .r. 1 /I DESERT REDEVELOPMENT A CY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 7. GENERAL LONG-TERM DEBT: The changes in the General Long-Term for the year ended June 30, 1996 were as follows: Balance at Balance at July 1, June 30, 1995 Additions Deletions 1996 Advances from City $ 19,000,000 $ - $ - $ 19,000,000 Tax Allocation Bonds 147,630,000 6,305,000 8,120,000 145,815,000 1994 Multifamily Housing Revenue Bonds - 15,100,000 - 15,100,000 $166,630,000 $21,405,000 $ 8,120,000 $179,915,000 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 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 19,000,000 - - 19,000,000 Accrued Interest - 1,085,340 1,085,340 - $19,000,000 $ 1,085,340 $ 1,085,340 $19,000,000 See independent auditors' report. -17- -7,7 • P) DESERT REDEVELOPMENT AG :Y NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds: Tax allocation bonds are special obligations of the Agency and the Palm Desert Financing Authority (a component unit of the 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. 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 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 2001 195,000 1,371,350 1,566,350 Thereafter 23,135.000 21,125,665 44,260,665 $ 24,025,000 $ 28,066,807 52 091 807 See independent auditors' report. -18- 'ALM DESERT REDEVELOPMEII 3ENCY • NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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 1997 $ - $ 239,935 $ 239,935 1998 - 239,935 239,935 1999 - 239,935 239,935 2000 25,000 239,342 264,342 2001 30,000 238,020 268,020 Thereafter 4,035,000 3,771.435 7,806,435 $ 4,090,000 1 4,968,602 $ 9,058,602 See independent auditors' report. -19- l 4 DESERT REDEVELOPMENT A CY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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. The Authority loaned $42,764,702 of the $100,000,000 to the Agency to advance refund the 1985 Tax Allocation Bonds, 1985 Tax Allocation Refunding Bonds and the 1989 Tax Allocation Bonds. The Authority also loaned $40,844,733 to the Redevelopment Agency to fund additional projects in the project area. The remaining bonds are comprised of$15,965,000 of "Current Interest" Bonds, $39,350,000 of Dutch Auction Floating Securities and $39,350,000 of Inverse Floating Securities. Principal maturities of the Current Interest Bonds occur annually on April 1. Interest on the Current Interest Bonds varies from 4.00% to 6.625% and is payable semi-annually on April 1 and October 1. The Dutch Auction Floating Securities and Inverse Floating Securities mature each April 1 through 2022. Interest on the Dutch Auction Floating Securities and Inverse Floating Securities 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 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 2001 1,975,000 5,385,743 7,360,743 Thereafter 85,820.000 71,670,610 157.490,610 $ 94.665.000 $100.575.075 $195.240,075 See independent auditors' report. -20- r r LM DESERT REDEVELOPMENT ?NCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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 Authority loaned the bond proceeds to the 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 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 2001 335,000 934,753 1,269,753 Thereafter 15,210,000 12,406,538 27,616,538 $ 16,730,000 $ 17,231,416 $ 33,961,415 See independent auditors' report. -21- DESERT REDEVELOPMENT AC :Y NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 7. GENERAL LONG-TERM DEBT (CONTINUED): b. Tax Allocation Bonds (Continued): 1995 Series A - Tax Allocation Revenue Refunding Bonds 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 of the 1988 Tax Allocation Bonds. 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. Interest rates on the Bonds vary from 3.80% to 5.55% 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 1997 $ 350,000 $ 300,208 $ 650,208 1998 385,000 285,858 670,858 1999 400,000 269,758 669,758 2000 420,000 252,223 672,223 2001 435,000 233,300 668,300 Thereafter 4,315,000 977,971 5,292,971 $ 6,305,000 2,319,318 � 8,624,318 See independent auditors' report. -22- r LM DESERT REDEVELOPMENT ENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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, 1995 Additions Payments June 30, 1996 1995 Tax Allocation Bonds (Project Area No.1) $ 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) 96,090,000 - 1,425,000 94,665,000 1992 Tax Allocation Bonds (Project Area No.2) 16,995,000 - 265,000 16,730,000 1988 Tax Allocation Bonds 6,430,000 - 6,430,000 - 1995 Refunding Tax Allocation Bonds - 6,305,000 - 6,305,000 $ 147,630,000 $ 6,305,000 $ 8,120,000 $ 145,815,000 c. 1994 Multifamily Housing 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, the Agency loaned 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. At the time of the issuance of the Bonds, it was anticipated that approximately one-half of the residences would be sold within 24 months from the issuance of the bonds and that the proceeds of the sales would be used to redeem the Bonds. It was also anticipated that all homes would be sold within 6 years and that all the Bonds would be redeemed. See independent auditors' report. -23- • 1ALM DESERT REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 7. GENERAL LONG-TERM DEBT (CONTINUED): c. 1994 Multifamily Housing Revenue Bonds (Continued): The Bonds are secured by a letter of credit which expires six years from the date of the issuance of the Bonds with up to two one-year extensions exercisable by the borrower at the credit bank's sole and absolute discretion. The Bonds are issued in denominations of$100,000 or any integral multiple thereof for Bonds bearing interest at the variable rate, and in denominations of $5,000 or any integral multiple thereof for Bonds on which the interest is converted to a fixed rate. The Bonds mature on August 1, 2000, and are subject to prior redemption. Interest on the variable rate Bonds is payable on the second Tuesday of each month commencing September 13, 1994. Interest is payable February 1 and August 1 of each year on the Bonds, which convert to a fixed rate. In April 1996, the Agency acquired the assets (the 161 homes) and assumed liability for the $15,100,000 1994 Multifamily Housing Revenue Bonds as the project was not being administered properly. 8. BOND RESERVE REQUIREMENTS: At June 30, 1996 the reserve balance requirements and actual balances were as follows: Issue Requirement Actual 1992 Series A Tax Allocation Bonds (Project Area No. 1 as Amended) $ 7,841,271 $ 16,044,756 1992 Series A Tax Allocation Bonds (Project Area No. 2) $ 1,278,556 $ 1,624,198 1995 Series Tax Allocation Bonds (Project Area No. 1 as Amended) $ 1,955,525 $ 16,821,348 1995 Series Tax Allocation Bonds (Project Area No. 2) $ 343,900 $ 2,817,115 1995 Refunding Tax Allocation Bonds $ 630,500 $ 714,893 These actual amounts are included in the Fund Balance reserved or designated for Debt Service (see Note 10). See independent auditors' report. -24- DESERT REDEVELOPMENT NCY • NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 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 amounts of defeased debts still outstanding at June 30, 1996 were as follows: Defeased Amount Issue Outstanding 1982 Tax Allocation Bonds $ 3,720,000 1989 Tax Allocation $ 4,720,000 10. RESERVES AND DESIGNATIONS OF FUND BALANCE: Special Debt Capital Revenue Service Projects Reserves Fund Fund Fund Continuing appropriations $ - $ - $ 9,127,723 Encumbrances 47,446 - 4,357,018 Loans receivable 1,568,365 - - Prepaid expenses - 2,375 341 Deposits - - 275,000 Debt service - 12,049,572 - Low income purposes 1,866,916 - - Inventory held for resale 10,950.000 - - $ 14,432,727 $ 12,051,947 $ 13,760,082 Designations Debt service $ - $ 36,914,272 $ - Capital outlay - - 18,485,257 $ - $ 36,914,272 $ 18,485,257 See independent auditors' report. -25- ruL M DESERT REDEVELOPMENT A 1CY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 10. RESERVES AND DESIGNATIONS OF FUND BALANCE: Reserved for Continuing Appropriations - This reserve is for appropriations for capital projects which are unexpected as of June 30, 1996 and are carried forward as continuing appropriations to be expended in 1996-97. 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, 1996. 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 Board 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, 1996, but not recognized as an expenditure until after July 1, 1996. Reserved for Deposits - This reserve is to indicate that these funds are not available to finance current expenditures. 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. 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. Reserved for Inventory Held for Resale - This reserve for inventory held for resale has been set aside to indicate that they will not be considered as current funds available. 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. See independent auditors' report. -26- r .M DESERT REDEVELOPMENT . NCY NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 11. LOSS ON INVESTMENT: 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 Agency assets. It was subsequently announced that ITM had diverted funds and/or securities in the client accounts to other accounts without the clients' knowledge. The Agency records identified $4,212,144 being invested with ITM, however the investment could not be verified with a third party. For the year ended June 30, 1996, the Agency recorded a loss on the investment in the amount of $3,627,780, which represents the original investment of $4,212,144 less recoveries of $584,364 from other parties. 12. CONTRIBUTED CAPITAL: During fiscal year 1995-96, the Debt Service Fund received a building with a value of $3,670,000 in consideration for a note receivable with a cost basis of $5,899,000. A bad debt expenditure of $2,229,000 was recorded in the Debt Service Fund. The transfer of the building from the Debt Service Fund to the Building Enterprise Fund was recorded as a residual equity transfer out in the Debt Service Fund and as contributed capital in the Building Enterprise Fund. 13. RESTATEMENT OF BEGINNING FUND BALANCE: Fund balance in the Special Revenue Fund was restated as follows: Fund Balance - June 30, 1995 $ 3,015,377 Reduce loans receivable to record uncollectible amounts as of June 30, 1995 (165,838) Increase in deposits for amounts incorrectly expended in prior years 639,063 Fund Balance - June 30, 1996 as restated $ 3,488,602 See independent auditors' report. -27- • P. [ DESERT REDEVELOPMENT AC -2Y NOTES TO FINANCIAL STATEMENTS (Continued) June 30, 1996 14. SUBSEQUENT EVENTS: a. 1996 Tax Allocation Revenue Bonds On October 3, 1996, the Palm Desert Redevelopment Agency issued $10,880,000 1996 Series A (Desert Rose Project Refunding) and $8,170,000 1996 Series B bonds for the purpose of refunding its $15,100,000 Variable Rate Demand Multifamily Housing Revenue Bonds and finance working capital to preserve the supply of low and moderate income housing within the City of Palm Desert and pay costs of issuance of the bonds. b. Series 1996 - $7,010,000 Lease Revenue Bonds In August 1996, the Palm Desert Financing Authority (the Authority) issued $7,010,000 in Lease Revenue Bonds. The proceeds of the Bonds will be used to finance the construction of a County Administrative Center and related facilities upon a site located in the City of Blythe, County of Riverside, fund a reserve account, fund approximately eight months of capitalized interest and pay costs of issuance of the Bonds. The Authority will lease the site from the County of Riverside (the County) pursuant to a site lease dated August 1, 1996, by and between the Authority and the County and will lease back to the Authority the site and the facilities (together "the Project") pursuant to a Lease Agreement dated as of August 1, 1996, by and between the Authority and County (the "Lease"). Under the Lease, the County will pay the Trustee Base Rental Payments to the trustee in an amount equal to the scheduled debt service payments on the Bonds. The Authority will assign its right to receive the Base Rental payments to the trustee for the benefit of the owners of the Bonds. See independent auditors' report. -28- SUPPLEMENTAL INFORMATION i T • PALM DESERT REDEVELOPMENT AGENCY COMBINING BALANCE SHEET—ALL DEBT SERVICE FUNDS June 30, 1996 Project Project Project Project Area 1 Area 2 Area 3 Area 4 ASSETS Cash and investments $ 11.541,234 $ 944,440 $ 1,119,076 $ 1,209,034 Cash with fiscal agent — — — — Interest receivable — — — Due from other governmental agencies 3,387 306 799 3,334 Due from other funds 4,518,052 883,308 — — Loans receivable — — — Prepaid expenses and deposits 2,375 — — — TOTAL ASSETS $ 16,065,048 $ 1,828,054 $ 1,119,875 $ 1,212,368 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable $ 44,568 $ — $ — $ — Deferred revenue — — — Amounts due under pass—through agreements 7,507,232 293,518 532,490 903,628 TOTAL LIABILITIES 7,551,800 293,518 532,490 903,628 FUND BALANCES: Reserved: Prepaid expenses 2,375 — Loan receivable — — Debt service — — Unreserved: Designated for debt service 8,510,873 1,534,536 587,385 308,740 TOTAL FUND BALANCES 8,513,248 1,534,536 587,385 308,740 {( TOTAL LIABILITIES AND FUND BALANCES $ 16,065,048 $ 1,828,054 S 1,119,875 $ 1,212,368 —29— Financing Totals Authority 1996 1995 $ 2,128,684 $ 16,942,468 $ 22,039,498 35,873,065 35,873,065 35,265,445 20,561 20,561 440,535 7,826 - - 5,401,360 2,851,423 5,899,000 — 2,375 — $ 38,022,310 $ 58.247,655 $ 66,495,901 $ — $ 44,568 $ 61,519 584,364 — 9,236,868 10,579,574 - 9,281.436 11,225,457 2,375 - - 5,899,000 12,049,5 72 12,049,572 11,419,252 25,972,738 36,914,272 37,952,192 38,022,310 48,966,219 55,270,444 $ 38,022,310 $ 58,247,655 $ 66,495,901 —30— 'ALM DESERT REDEVELOPMENT A( ;Y . ir COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES—ALL DEBT SERVICE FUNDS For the year ended June 30, 1996 Project Project Project Project Area 1 Area 2 Area 3 Area 4 REVENUES: Tax increment $ 16,539,718 $ 5,113,949 $ 550,528 $ 1,235,180 Use of money and property 204,421 106,258 26,816 30,715 Reimbursement from other agencies 461,827 — — — Other revenues 227,795 — — — TOTAL REVENUES 17,433,761 5,220,207 577,344 1,265.895 EXPENDITURES: Property tax administrative fee 292,481 60,171 7,856 14,214 Loss on investment 3,627,780 — — — Bad debt 2,229,000 — — — Educational revenue augmentation fund — — / — — Payment to other governmental agencies 4,058,586 1,586,471 76,976 664,019 Bond issuance costs — — — — Bond discount — — — — Interest and fiscal charges 160,017 1,155,161 — — Principal payments — — — — TOTAL EXPENDITURES 10,367,864 2,801,803 84,832 678,233 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 7,065,897 2,418,404 492,512 587,662 4 OTHER FINANCING SOURCES(USES) Operating transfers in — — — — Operating transfers out (12,805,501) (2,441,295) (110,106) (307,521) Proceeds from bonds — — — — TOTAL OTHER FINANCING SOURCES(USES) (12,805,501) (2,441,295) (110,106) (307,521) EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER(UNDER) EXPENDITURES AND OTHER FINANCING USES (5,739,604) (22,891) 382,406 280,141 FUND BALANCES—BEGINNING OF YEAR 17,922,852 1,557,427 204,979 28,599 RESIDUAL EQUITY TRANSFER OUT (3,670,000) — — — FUND BALANCES—END OF YEAR $ 8,513,248 $ 1,534,536 $ 587,385 $ 308,740 —31— 41111119r."7 Financing Totals Authority 1996 1995 $ — $ 23,439,375 $ 22,822,814 1,947,765 2,315,975 1,628,383 461,827 — 227,795 461,799 1,947,765 26,444,972 24,912,996 — 374,722 - - 3,627,780 — - 2,229,000 — 781,872 6,386,052 6,502,102 211,824 211,824 613,623 85,118 85,118 351,438 8,319,607 9,634,785 8,260,985 1,690,000 1,690,000 1,954,000 10,306,549 24,239,281 18,464,020 (8,358,784) 2,205,691 6,448,976 9,986,555 9,986,555 8,547,692 (5,467,048) (21,131,471) (15,336,841) 6,305,000 6,305,000 18,850,555 10,824,507 (4,839,916) 12,061,406 2,465,723 (2,634,225) 18,510,382 35,556,587 55,270,444 36,760,062 — (3,670,000) — $ 38,022,310 $ 48,966,219 $ 55,270,444 —32— kLM DESERT REDEVELOPMENT AG Y • r COMBINING BALANCE SHEET—ALL CAPITAL PROJECTS FUNDS June 30, 1996 Project Project Project Project Area 1 Area 2 Area 3 Area 4 ASSETS Cash and investments $ — $ 411,773 $ 84,437 $ 83,662 Cash with fiscal agent 26,880,022 5,002,141 — — Accounts receivable 34,156 778 — — Interest receivable 575,060 119,694 — — Due from other governmental agencies 6,051,353 — — — Deposits — 275,000 — — Prepaid expenses 341 — — — TOTAL ASSETS $ 33,540,932 $ 5,809,386 $ 84,437 $ 83,662 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable $ 70,947 $ 1,768,930 $ 6,977 $ 10,000 Accrued liabilities 14,864 — — — Due to other funds 4,518,052 883,308 — — TOTAL LIABILITIES 4,603,863 2,652,238 6,977 10,000 FUND BALANCES: Reserved: Deposits — 275,000 — — Prepaid expenses 341 — — — Continuing appropriations 9,127,723 — — — Encumbrances 1,431,847 2,882,148 23,023 20,000 Unreserved: Designated for capital outlay 18,377,158 — 54,437 53,662 TOTAL FUND BALANCES 28,937,069 - 3,157,148 77,460 73,662 TOTAL LIABILITIES AND FUND BALANCES $ 33,540,932 $ 5,809,386 $ 84,437 $ 83,662 —33— Totals 1996 1995 $ 579,872 $ 3,702,513 31,882,163 36,872,668 34,934 — 694,754 459,248 6,051,353 3,700,919 275,000 — 341 3,157 $ 39,518,417 $ 44,738,505 $ 1,856,854 $ 237,134 14,864 9,183 5,401,360 2,851,423 7,273,078 3,097,740 275,000 — 341 3,157 9,127,723 21,974,708 4,357,018 1,264,351 18,485,257 18,398,549 32,245,339 41,640,765 $ 39,518,417 $ 44,738,505 —34— ,LM DESERT REDEVELOPMENT AGI ( - COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES—ALL CAPITAL PROJECTS FUNDS For the year ended June 30, 1996 Project Project Project Project Area 1 Area 2 Area 3 Area 4 REVENUES: Use of money and property $ 2,509,498 $ 340,673 $ 7,805 $ 4,965 Reimbursement from other agencies 2,736,964 — — — Other revenues 134,646 — — — TOTAL REVENUES 5,381,108 340.673 7,805 4,965 EXPENDITURES: Administrative costs 619,542 158,708 16,248 41,616 Professional services 660,901 284,239 6,977 10,000 Planning, survey and design — — — — Capital outlay 5,504,726 4,323,686 — — Land purchases — 3,563,819 — — TOTAL EXPENDITURES 6,785,169 8.330,452 23,225 51,616 EXCESS OF REVENUES (UNDER) EXPENDITURES (1,404,061) (7,989,779) (15,420) (46,651) OTHER FINANCING SOURCES(USES): Operating transfers in — 2,818,533 — 60,485 Operating transfers out (2,818,533) — — — Advance from City — — — — Proceeds from bonds — — — — TOTAL OTHER FINANCING SOURCES(USES) (2,818,533) 2,818,533 — 60,485 EXCESS OF REVENUES AND OTHER FINANCING SOURCES OVER(UNDER) EXPENDITURES AND OTHER FINANCING USES (4,222,594) (5,171,246) (15,420) 13,834 FUND BALANCES—BEGINNING OF YEAR 33,159,663 8,328,394 92,880 59,828 FUND BALANCES—END OF YEAR $ 28,937,069 $ 3,157,148 $ 77,460 $ 73,662 —35— .41141r— _ _ Totals 1996 1995 $ 2,862,941 $ 788,773 2,736,964 3,692,719 134,646 1,113 5,734,551 4,482,605 836,114 637,881 962,117 690,271 650,163 9,828,412 6,764,342 3,563,819 3,742,206 15,190,462 12,484,863 (9,455,911) (8,002,258) 2,879,018 2,118,470 (2,818,533) (1,929,000) - 8,000,000 — 9,264,445 60,485 17,453,915 (9,395,426) 9,451,657 41,640,765 32,189,108 $ 32,245.339 $ 41,640,765 —36— )(.Ei2L, Evans & £om/anty CERTIFIED PUBLIC ACCOUNTANTS (pleat 0. oiq mL/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 (619)773-4078 September 24, 1996 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, 1996, and have issued our opinion thereon dated September 24, 1996. 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. Z6iff a9t,S1..e s"-t-AQ C-CvYrD'I'd• -37