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HomeMy WebLinkAboutMINUTES - 01231990 - 1.92 TO: REDEVELOPMENT AGENCY FROM: PHIL BATCHELOR, EXECUTIVE DIRECTOR Contra DATE: January 9, 1990 Costa SUBJECT: Agency Audit Fiscal Year 1988-89 County SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Accept audit of Contra Costa County Redevelopment Agency Financial Statements, as of June 30, 1989, as performed by Peat Marwick Main & Co. FISCAL. IMPACT. None BACKGROUND/REASONS FOR RECOMMENDATIONS Pursuant to Section 33080. 1 of the California Health and Safety Code, redevelopment agencies are required to prepare and present an independent financial audit report for the prior fiscal year. Peat Marwick Main & Co. have completed said audit report. CONTINUED ON ATTACHMENT: YES SIGNATURE: JaAmA�, e A' RECOP9 ENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION Or GENCY fOMMI APPROVE OTHER SIGNATURE(S) : ACTION OF AGENCY ON January 9,. 1990 APPROVED AS RECOMMENDED X OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. . cc: Redevelopment Director ATTESTED January 9, 1990 CAO PHIL BATCHELOR, Auditor-Controller AGENCY SECRETARY County Counsel BY a , DEPUTY 1-092 Peat Marwick Certified Public Accountants • • • Peat Marwick • • • CONTRA COSTA COUNTY REDEVELOPMENT AGENCY • Financial Statements June 30, 1989 (With Independent Auditors' Report Thereon) • Peat Marwick Certified Public Accountants Peat Marwick Main&Co. 2121 No.California Blvd.,Suite 840 Walnut Creek,CA 94596,3572 Independent Auditors' Report ! To the Members of the Contra Costa County Redevelopment Agency: We have audited the accompanying combined balance sheet of the Contra Costa County Redevelopment Agency (the Agency) as of June 30, 1989, and the related combined statement of revenues, expenditures and changes in fund balance for the year then ended. 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. Those ! standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. ! In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Contra Costa Redevelopment Agency as of June 30, 1989, and the results of its operations for the year then ended in conformity with generally accepted accounting principles. October 13, 1989 soo Member Firm of Klynveld Peat Marwick Goerdeler CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Combined Balance Sheet June 30, 1989 General Long-Terni Capital Debt Totals Projects Account (Memorandum Assets Funds Groupnl f Cash and investments $. 2,912,156 — 2,912,156 Due from other governments (Note 4) 750,000 — 750,000 Accounts receivable 40,039 — 40,039 Due from Contra Costa County 14,330 — 14,330 Prepaid expenses and deposits 55,646 — 55,646 Amount to be provided for retirement of long-term debt — 12.174.317 12.174.317 Total assets $ 3,772,171 12,174,317 15,946,488 Liabilities and Fund Equi Liabilities: Accounts payable and accrued liabilities 134,234 — 134,234 Due to Contra Costa County 53,544 — 53,544 Notes payable (Note 6) — 7,900,000 7,900,000 Advances from Contra Costa County (Note 6) 1.361.161 4.274,317 5.635.478 Total liabilities 1.548.939 12,174,317 13.723,256 Fund equity: Fund balance: Reserved for: Encumbrances 125,179 — 125,179 Prepaid expenses and deposits 55,646 — 55,646 Unreserved 2.042,407 2,042,407 Total fund equity 2,223.232 2,223.232 Total liabilities and fund equity $ 3,772,171 12,174,317 15,946,488 See accompanying notes to combined financial statements. f • CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Combined Statement of Revenues, Expenditures and Changes in Fund Balance Year ended June 30, 1989 • Capital Projects Funds Revenues: Aid from other governmental agencies $ 785,553 Tax increment 784,375 Use of money and property 371,044 Sales of real property 357,000 Specific plan fees 84,105 Other revenue 325.220 Total revenues $ 2,707.297 Expenditures: Acquisition of property 2,595,752 Project improvements 994,954 Operation and management of acquired property 10,069 Interest expense 506,146 General and administrative (Note 5) 499.810 Total expenditures 4.606.731 Deficiency of revenues over expenditures (1,899,434) Adjustments to fund balance (Note 6) 143,341 Fund balance at beginning of year 3,979,325 Fund balance at end of year $ 2,223,232 • See accompanying notes to combined financial statements. • • CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Notes to Combined Financial Statements June 30, 1989 (1) Activities of the Contra Costa County Redevelopment AgenQy The Contra Costa County Redevelopment Agency (the Agency) was activated on December 6, 1983, for the purpose of redeveloping certain areas of Contra Costa County (the County), designated as project areas. Currently, the members of the County Board of Supervisors serve as the Agency members. The principal sources of funding for the Agency's activities are: • Proceeds from issuance of debt. • Advances and loans from the County of Contra Costa. • Development fees for services provided to developers in the project area. • Property tax revenue attributable to increases in assessed valuations in the project areas. The Agency's only project with significant activity to date has been the Pleasant Hill BART Station Area Redevelopment Project. The purpose of the project is to eliminate blight and traffic congestion problems and to facilitate new commercial and residential development. Two other project areas have been established with little or no activity to date. The Agency is an integral part of the County and the accompanying financial statements.are included as a component unit of the combined financial statements prepared by the County. (2) Summary of Significant Accounting_Policies The significant accounting policies of the Agency used in preparation of the accompanying combined financial statements are as follows: (a) Basis of Presentation—Fund Accounting The accounts of the Agency are organized on the basis of funds or as an account group, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for within a separate set of self-balancing accounts that comprise its assets, liabilities,reserves, fund balance,revenues and expenditures. The following fund type and account group are used by the Agency: Capital Project Funds are used to account for financial resources designated to be used for the acquisition or construction of capital facilities or significant repairs or improvements thereto. (Continued) • Q CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Notes to Combined Financial Statements (2) Summ=of Significant Accounting Policies. Continued General Long-Term Debt Account Group accounts for the Agency's long-term debt that is expected to be repaid from future tax revenues anticipated to be realized by the Capital Projects Funds. (b) Basis of Accounting The modified accrual basis of accounting is followed by the Agency under the modified accrual basis of accounting,revenues are recognized when they become measurable and available. Expenditures are recognized when the liability is incurred, with the exception of principal and interest on general long-term debt, which is recognized when due. (c) Project Expenditures 0 Project expenditures, including acquisition of real property, site clearance and project improvements, are charged to expenditures when incurred. Such costs are not recorded as assets in the accompanying combined balance sheet. Public domain (infrastructure) general fixed assets consisting of roads, curbs and . gutters, streets and sidewalks, drainage and lighting systems are not capitalized, as these assets are immovable and of value only to the government. (d) Tax Increment California Redevelopment Law provides a means of financing and refinancing • redevelopment projects based upon the allocation of taxes collected within a project. The assessment valuation of a project prior to adoption of the redevelopment plan, or base roll, is established and, except for any period during which the assessed valuation drops below the base roll, the taxing bodies thereafter receive the taxes produced by the levy of the current tax rate upon the base roll. Taxes collected upon any increase in assessed valuation over the base roll are called tax increments. Each year the redevelopment project receives this incremental amount. The annual tax increment may be pledged by a redevelopment agency for the repayment of any indebtedness incurred in financing or refinancing the project. Incremental property taxes are recognized as revenue when claimed and available from local taxing authorities. • (e) Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditures of monies are recorded in order to reserve that portion of the applicable appropriation, is employed by the Agency. Encumbrances outstanding at year-end are reported as reservations of fund • balances since they do not constitute expenditures or liabilities. (Continued) 2 CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Notes to Combined Financial Statements (2) Summary of Significant Accounting Policies. Continued (f) Budgetary Data The Agency operates on a project basis. Annual budgetary data is not presented as it would not provide a meaningful comparison to actual revenues and expenditures. (g) Totals Column on Combined Balance Sheet The "Totals" column on the combined balance sheet is presented only to facilitate financial analysis. Data in this column does not present financial position in conformity with generally accepted accounting principles nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. (3) Cash and Investments The Agency's cash is pooled and invested by the County Treasurer for the purpose of maximizing investment earnings. As permitted by the Government Code, depositing entities may direct the County Treasurer to make specific investments separate from the pool. Statutes authorize the County to invest in obligations of the U.S. Treasury, federal agencies, municipalities, commercial paper rated A-1 by Standard & Poor's Corporation or P-1 by Moody's Commercial Paper Record, bankers' acceptances, repurchase agreements and reverse repurchase agreements. Such investments are stated at cost, which approximates market value. The pooled investments of the County are categorized in the County's combined financial statements to give an indication of the level of security assumed by the County. (4) Due from Other Governments At June 30, 1989, the Agency had a receivable due from the Department of Transportation, State of California, in the amount of$750,000. The receivable relates to the Agency's acquisition of a parcel of land obtained for the Pleasant Hill BART Station Area Redevelopment Project. (5) Relationship with Contra Costa County A The Agency and the County are closely related but are separate legal entities. The Agency does not have any employees and does not have facilities separate from the County. Therefore, a portion of the Agency's expenditures represents services provided to the Agency by the County. In addition to these administrative services, the County provides materials and services related to the project, as well as operating transfers and advances. For the year ended June 30, 1989, the Agency paid . $490,535 to the County for expenditures incurred by the Agency. The Agency has entered into repayment agreements to reimburse the County for all amounts advanced, including related interest,for Agency projects. (Continued) 3 CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Notes to Combined Financial Statements • (6) Low-Term Debt Following is a summary of changes in long-term debt for the year ended June 30, 1989: Advances from Notes Contra Costa Payable Count Total Balance at July 1, 1988 $ 7,900,000 3,443,231 11,343,231 Additions — 831,086 831,086 Retirements Balance at June 30, 1989 $ 7,900,000 4,274,317 12,174,317 Advances from Contra Costa County The advances from the County represent funds received for land acquisition, improvements and various other expenditures, including related interest. Such advances and interest are not expected to be repaid in the fiscal year ending June 30, 1990. Accordingly, the liability has been recorded in the General Long-Term Debt Account Group. On December 4, 2014, $1,000,000 of the advanced amount shall become due and payable and the remainder shall be due and payable when sufficient tax increment funds become available. The pledge of tax increment funds to the County, however, is subordinated to any such pledge of funds that the Agency makes in connection with the sale of bonds, notes or similar Agency obligation. Notes Payable On December 1, 1987, the Agency issued $7,500,000 in Tax Allocation Notes. The notes bear interest at 6% per annum payable semiannually and mature on December 1, 1992. The notes are payable from and secured by a pledge of the Tax Increment Revenues from the project area. The Agency also has a note payable in the amount of$400,000, representing an amount due to third parties for land purchased in the project areas. The note, bearing interest at 12% per annum with payment of interest due monthly, is secured by a deed of trust and is due on December 5, 1992. (Continued) 4 • CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Notes to Combined Financial Statements • (7) Adjustments to Fund Balance The Capital Project's fund equity was increased by $293,341 to reflect the transfer to • the General Long-Term Debt Account Group long-term accrued interest not due to be paid in the ensuing period. The Capital Project's fund equity was reduced by $150,000 for prior year accrual adjustments. (8) Commitments and ContinizencieS The Agency, as a component unit of the County, is included under the County's self-insurance program for public liability. As such, the Agency is charged by the County amounts sufficient to cover estimated charges for self-insured claims. • • • • • • 5 f Peat Marwick Certified Public Accountants Peat Marwick Main&Co. 2121 No.California Blvd.,Suite 840 Walnut Creek,CA 94596-3572 • Indelendent Auditors'Report on Compliance of, California Redevelopment Agencies • To the Members of the Contra Costa County Redevelopment Agency: • We have audited the accompanying financial statements of the Contra Costa County Redevelopment Agency (the Agency) as of June 30, 1989 and have issued our report thereon dated October 13, 1989. These financial statements are the responsibility of the Redevelopment 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 the generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement • presentation. We believe that our audit provides a reasonable basis for our opinion. In conjunction with our audit, we performed the procedures contained in the publications entitled Guidelines for Compliance Audits of California Redevelopment Agencies as promulgated by the Controller of the State of California in connection with a review of the Agency's compliance with laws, regulations, and administrative requirements governing • activities of the Contra Costa County Redevelopment Agency as required by Section 33080.1(x) of the Health and Safety Code of the State of California. The procedures we performed would not necessarily disclose all instances of noncompliance because they were based on selective tests of accounting records and related data. During the performance of the aforementioned procedures, nothing came to our attention • that would lead us to believe that the Contra Costa County Redevelopment Agency did not comply with applicable laws, regulations, and administrative requirements governing its activities. This report is to be used solely for filings with appropriate regulatory agencies and is not intended for any other purpose. • October 13, 1989 • NookMember Firm of Klynveld Peat Marwick Goerdeler