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HomeMy WebLinkAboutRDA 03 2001-02 ANL RPT 12-16-02AGENDA REPORT ~RDA NO. 3 12-16-02 MEETING DATE: DECEMBER 16, 2002 TO: FROM: sUBJECT: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR REDEVELOPMENT AGENCY STAFF 2001-2002 ANNUAL REPORT SUMMARY Redevelopment Law requires that the Redevelopment Agency submit to the legislative body an annual report of housing activity for the preceding fiscal year. RECOMMENDATION It is recommended the Community Redevelopment Agency take the following actions: 1. Receive and File an annual report of housing activity for 2001-2002. 2. Direct that a copy of an annual report of housing activity for 2001-2002 and all reporting documents and forms be filed with the State Controller and State Department of Housing and Community Development. FISCAL IMPACT There is no fiscal impact associated with this action. BACKGROUND/DISCUSSION California Health and Safety Code Section 33080.1 requires the preparation and filing of an annual report of housing activity by a redevelopment agency with its legislative body. A copy of this report must be filed with the State Controller and also with the State Department of Housing and Community Development. The annual report must contain the following information: 1. An independent financial audit of the previous fiscal year. The audit must include an opinion of the Agency's compliance with laws, regulations and administrative requirements governing activities of the Agency. 2. A fiscal statement containing the following information: a. The amount of outstanding indebtedness of the Agency. b. The amount of tax increment property tax revenue generated. Redevelopment Agency Report Annual Report for 2000-2001 December 3, 2001 Page 2 , , c, The amount of tax increment revenues paid to taxing agencies pursuant to Section 33401. d, The required Annual Report of Financial Transactions to the State Controller's Office. Any other fiscal information the Agency believes is useful. A description of the Agency's activities affecting housing and displacement containing the following information: a, The total number of households displaced or moved from their dwelling units as part of a redevelopment project during 2001-2002. b, An estimate of the total number of households that will be displaced during 2002-2003. C, The total number of dwelling units assisted housing persons and families of Iow-to moderate income as a part of a redevelopment project. do The total number of Agency assisted dwelling units constructed, substantially rehabilitated, acquired or subsidized during 2001-2002 for occupancy at affordable cost by persons and families of Iow to moderate income. eo The status and use of the Low to Moderate Income Housing Fund, created pursuant to Section 33334.3. Any other information the Agency believes useful to explain its housing program. g, Any excess surplus funds which have accumulated in the Low to Moderate Income Housing Funds. Excess surplus funds are defined as any unexpended or unencumbered amount in the Housing Fund that exceeds the greater of $1,000,000 or the aggregate amount deposited in the fund in the preceding four (4) fiscal years. Monies are deemed encumbered if committed by a legally enforceable contract or agreement. Any other information the Agency believes is useful to explain its housing program. Redevelopment Agency Report Annual Report for 2000-2001 December 3, 2001 Page 3 ANALYSIS The following responds to specific information required by the State. 1. Independent Financial Audit and Compliance Audit: A copy of the independent financial audit and compliance audit for 2000-2001 is attached. 2. Fiscal statement: a. The amount of outstanding indebtedness of the Redevelopment Agency, as of June 30, 2002, was reported to be $24,662,424. b. The amount of tax increment property tax revenue received by the Redevelopment Agency in 2001-2002 was $5,602,061 c. The amount of tax increment paid to taxing agencies pursuant to Section 33401 was $0. d. The required annual report of financial transactions to the State Controller will be submitted with all final reporting documentation and forms. 3. There is no other fiscal information, which the Agency believes to be useful at the present time. 4. Activities Affecting Housing and Displacement: a. The total number of households displaced or moved as part of the Town Center and South Central Redevelopment projects during 2001-2002 was 0. b. The total number of households estimated to be displaced as part of the Town Center or South Central project areas in 2002-2003 is 0. c. The total number of Iow to moderate-income dwelling units demolished or removed from the housing stock in 2001-2002 was 0. d. The total number of Agency assisted dwelling units which were constructed, rehabilitated, acquired or subsidized in 2001-2002 for occupancy at affordable cost by persons and families of Iow to moderate income was 0. Redevelopment Agency Report Annual Report for 2000-2001 December 3, 2001 Page 4 For 2001-2002 the Redevelopment Agency will complete construction of 54 Iow and very Iow-income senior citizen rental units at Tustin Heritage Place located on Sycamore Avenue and conclude negotiations with the qualified Owner Participant in the Kenyon Drive Neighborhood regarding the acquisition and substantial rehabilitation of approximately 111 units in the area. These projects will be undertaken in furtherance of the Planning Study for Housing Opportunities in the South Central Project Area, the City-wide Comprehensive Affordable Housing Strategy and the Second Five-Year Housing Implementation Plan completed during the 1999-2000 reporting period. In addition, the Agency will be continuing with ongoing programs to provide additional opportunities for affordable housing. These programs include the Mortgage Credit Certificate Program and' rehabilitation of dwelling units through the Housing Rehabilitation Program. e, As of June 30, 2002, the accrued balance in the Agency's Iow to moderate-income housing set-aside fund' for the South Central Project Area was $4,825,198. As of June 30, 2002, the accrued balance in the Agency's Iow to moderate-income housing set-aside fund for the Town Center Project Area was $3,415,879. g, As of June 30, 200w, there are no excess surplus funds in the Housing Fund for the combined Project Areas. Agency staff will be available to respond to any questions at the Agency's meeting of December 16, 2002. As a result of the Redevelopment Agency's action, all final reporting documentation and forms will be filed with the State Controller and State Department of Housing and Community Development prior to December 31,2002. .Christine A. Shingleton/// Assistant City Manage¢' ~ Draughon / .,) "' Redevelopment-~t'og ram Manager Attachments: June 30, 2002 Independent Financial Audit and Compliance Audit TUSTIN COMMUNITY REDEVELOPMENT AGENCY GENERAL PURPOSE FINANCIAL STATEMENTS WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 2002 TUSTIN COMMUNITY REDEVELOPMENT AGENCY TABLE OF CONTENTS June 30, 2002 Page Number Independent Auditors' Report 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 - Ail Governmental Fund Types Notes to Financial Statements 5-12 Supplemental Information: Combining Balance Sheet - Ail Debt Service Funds 13- 14 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - All Debt Service Funds 15- 16 Combining Balance Sheet - All Capital Projects Funds 17-18 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Ail Capital Projects Funds 19- 20 Computation of Low/Moderate Income Housing Funds- Excess/Surplus 21 Independent Auditors' Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 22 - 23 DIEHL, EVANS 6,T COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS 2121 ALTON PARKWAY, SUITE 100 IRVINE, CALIFORNIA 92606-.4906 (949) 399-0600 * FAX (949) 399-0610 www. diehlevans.com · September 19, 2002 INDEPENDENT AUDITORS' REPORT MICHAEL R. LUDtN, CPA CRAIG W. SPRAKER, CPA NITIN R PATEL, CPA ROBERT J. CALLANAN, CPA · , PItILIP H. HOLIKAMP, CPA · THOMAS M. PERLOWSKI, CPA · HARVEYJ. SCHROEDER, CPA MICHAEL C. FRIEDMAN, CPA · A PROFESSIONAL CORPORATION The Board of Directors Tustin Community Redevelopment Agency Tustin, California We have audited the general purpose financial statements of the Tustin Community Redevelopment Agency (the Agency), a component unit of the City of Tustin, California, as of and for the year ended June 30, 2002, as listed . in the table of contents. These general purpose financial statements are the responsibility of the Agency's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Audith!g Standards, issued by the Comptroller General of the United States. 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 Tustin Community Redevelopment Agency as of June 30, 2002, and the results of its operations for the year then ended in conformity with accounting principles generally accepted in the United Stated of America. In accordance with Government Auditing Standar&, we have also issued our report dated September 19, 2002 on our consideratio'n of the Tustin Community Redevelopment Agency's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying combining financial statements and excess surplus computation of Low/Moderate Income Housing Funds listed as supplemental iriformation in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. 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. OTHER OFFICES AT: 2965 ROOSEVELT STREET CARLSBAD, CALIFORNIA 92008-2389 (760) 729-2343 , FAX (760) 729-2234 613 W. VALLEY PARKWAY, SUITE 330 ESCONDIDO, CALIFORNIA 92025-2598 . (760) 741-3141 ° FAX (760) 741-9890 Account Groups General Fixed Assets 11,468,196 $ 11,468,196 ,." . General Long - Term Debt 13,046,049 4,603,951 $ 17,650,000 Totals (Memorandum Only) 2002 29,786,626 1,706,997 57,755 7,700 10,625 760,892 1,537,510 2,905,000 11,468,196 13,046,049 4,603,951 $ 65,891,301 2001 $ 26,298,359 1,715A63 45,340 207,922 37,570 150,618 2,905,000 11,468,196 10,422,609 8,052,391 $ 61,303,468 17,650,000 I7,650,000 $ 81,843 3,529,512 1,139,604 250,000. 17,650,000 22,650,959 $ 28,971 37,570 2,909,535 18,475,000 21,451,076 11,468,196 11,468,196 $ 11,468,196 $ 17,650,000 11,468,196 23,880,381 8,865,673 (973,908) 43,240,342 $ 65,891,301 11,468,196 19,441,988 9,479,056 (536,848) 39,852,392 $ 61,303,468 -3- TUSTIN COMMUNITY REDEVELOPMENT AOENCY NOTES TO FINANCIAL STATEMENTS June 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Description of Reporting Entity: The Tustin Community Redevelopment Agency, a component unit of the City of Tustin, was established October 20, 1976, pursuant to the State of California Health and Safety Code, Section 33000, entitled "Community Redevelopment Law". Its purpose is to prepare and carry out plans for improvement, rehabilitation and redevelopment of blighted areas within the territorial limits of the City of Tustin. The City provides management assistance to the Agency, and the members of the City Council also act as the governing body of the Agency. In accordance with GASB Code Section 2100, "Defining the Reporting Entity",. the Agency's financial activities will be included (blended) with the financial activities of the City of Tustin for reporting purposes. Tax Increment Financing: The Agency's primary source of revenue, other than loans and advances from the City, comes from property taxes. Property taxes allocated to the Agency are computed in the following manner: (a) The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan. Co) Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Agency. All taxes on the "frozen" assessed valuation of the property are allocated to the City and other districts. The Agency has no' power to levy and collect taxes, and any legislative property tax reduction might correspondingly reduce the mount of tax revenues that would otherwise be available to pay the principal of, and interest on, long-term debt. Broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or assessed valuation, or any reduction or eli~mination of present exemptions would necessarily increase the mount of tax revenues that would be available to pay principal and interest on long-term debt. See independent auditors' report. -5- TUSTIN COMMUNITY REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): Budgetary Data: The budgets of the Agency are primarily "long-term" budgets which emphasize capital outlay plans extending over one year. Because of the long-term nature of redevelopment projects, "annual" budget comparisons are not considered meaning~ and accordingly, no budgetary information is included in the accompanying financial statements. Investments: Investments are stated at fair value (the value at which a financial instrument could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale), except for certain investments which have a remaining maturity of less than one year when purchased, which are stated at amortized cost. General Fixed Assets: General fixed assets are recorded as expenditures in the governmental, funds at the time of purchase. Such assets include buildings and furniture and equipment, and are capitalized at cost in the General Fixed Assets Account Group. No depreciation is provided on general fixed assets. Land Held for Resale: Land held for resale is carded at the lower of cost or estimated realizable value. The Capital Projects Fund fund balance is reserved in an amount equal to the carrying value of land held for resale because such assets are not available to finance the Agency's current operations. Comparative Data: Comparative total data for the prior year has 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 data by fund type has 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. -7- TUSTIN COMMUNITY REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2002 , CASH AND INVESTMENTS (CONTINUED): Pooled Deposits/Credit Risk (Continued),: In accordance with GASB Statement No. 3, deposits are classified as to credit risk by three categories as follows: Category 1 - Insured or collateralized with securities held by the Agency or by its agent in the Agency's name. Category 2- Collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name. Category 3 - Uncollateralized. At June 30, 2002, the bank balance is the demand account of $75,000 was insured. Cash and Investments with Fiscal Agent: The cash and investments with fiscal agent consisted of $29,984 in money market mutual funds and $1,677,013 in investment agreements which are not required to be categorized by GASB 3. The additional information required by GASB 3 related to the cash and investments pooled with the City is available in the annual report of the City. Cash and investments in the combined balance sheet at June 30, 2002 are shown as follows: Cash and investments $ 29,786,626 Investments with fiscal agents 1,706,997 $ 31,493..623 See independent auditors' report. -9- TUSTIN COMMUNITY REDEVELOPMENT AGENCY NOTES TO FINANCIAL STATEMENTS (CONTINUED) June 30, 2002 5. GENERAL LONG-TERM DEBT (CONTINUED): Tax Allocation Bonds: On July 1, 1998, the Tustin Community Redevelopment Agency issued $20,805,000 Tax Allocation Refunding Bonds to refund the Agency's Town Center Area Redevelopment Project Tax Allocation Refunding Bonds, Series 1987 in aggregate principal amount of $5,145,000 and the Agency's Town Center Area Redevelopment Project Subordinate Tax Allocation Bonds, Series 1991 in aggregate principal amount of $12,880,000. The net proceeds of $20,192,172 (after payment of $552,424 in underwriting fees, insurance, and other issuance costs) plus an additional $805,500 of 1987 Series sinking fund monies were used to purchase U.S. government securities. Securities for the 1987 and 1991 bonds were deposited in an irrevocable trust with an escrow agent to provide for all future payments when Tax Allocation Bonds, Series 1987 and 1991 are called for redemption. As a result, the 1987 Tax Allocation Refunding Bonds and 1991 Tax Allocation Bonds have been removed from the general long-term debt account group. As of June 30, 2002, the 1987 bonds have been fully redeemed and $12,650,000 of the defeased 1991 bonds are outstanding. Serial bonds are payable in annual installments ranging from $775,000 commencing on December 1, 1998. Interest is payable semiannually on June 1 and December 1, with rates ranging from 3.5% to 5.0% per annum. The bonds maturing on or after December 1, 2009, are subject to redemption prior to maturity as a whole or in part, at the option of the Agency, on any date on or after December 1, 2008 at prices ranging from 100% to 101% of principal. .$ 17,650,000 The annual requirements to amortize the tax allocation refunding bonds are as follows: Year Ending June 30, Principal Interest Total 2003 $ 850,000 $ 800,450 2004 890,000 765,205 2005 920,000 727,640 2006 960,000 687,680 2007 1,000,000 642,040 2008-2023 13,030,000 3,389,409 1,650,450 1,655,205 1,647,640 1,647,680 1,642,040 16,419,409 Totals $ 17,650,000 $ 7,012,424 $ 24.662.424 , . See independent auditors' report. -11- SUPPLEMENTAL INFORMATION Totals 2002 2001 $ 10,799,776 $ 8,817,844 1,706,997 1,715,463 46,033 32,352 7,700 - 730,892 - $ 13,291,398 $ 10,565,659 $ - $ 945 - 22,570 245,349 119,535 · 245,349 143,050 13,291,398 10,564,714 (245,349) (142,105) 13,046,049 10,422,609 $ 13,291,398 $ 10,565,659 - 14- Totals 2002 2001 $ 4,481,443 $ 3,991,543 644,480 597,147 5,125,923 4,588,690 43,443 40,848 628,810 426,257 825,000 795,000 1,005,230 1,049,649 2,502,483 2,311,754 2,623,440 2,276,936 10,422,609 8,145,673 $ 13,046,049 $ 10,422,609 -16- Town Center Low Income Housing Marine Base Project Area 3,395,073 $ 67,137 7,675 - - 425 15,000 - 228,936 = 3,646,684 $ 67,562 Totals 2002 2001 18,986,850 $ 17,480,515 11,722 12,988 207,922 10,625 - 37,570 30,000 - 1,537,510 150,618 2,905,000 2,905,000 $ 23,481,707 $ 20,794,613 1,869 $ 6,121 228,936 - - 790,000 81,843 $ 28,026 - 15,000 1,139,604 - 250,000 - 3,284,163 2,790,000 230,805 796,121 4,755,610 2,833,026 3,415,879' 3,415,879 $ 3,646,684 147,906 150,618 7,536,077 5,821,656 2,905,000 2,905,000 - 8,865,673 9,479,056 (728,559) (728,559) (394,743) (728,559) $ 67,562 18,726,097 17,961,587 $ 23,481,707 $ 20,794,613 -18- Town Center Low Income Housing $ 590,215 305,834 896,049 Marine Base Project Area m 33,227 33,227 Totals 2002 2001 1,120,619 1,187,657 147,408 997,885 1,255,930 289,635 2,455,684 2,543,450 24,877 24,877 367,043 367,043 643,461 367,043 680,670 1,691,174 848,222 311,238' 1,159,460 871,172 2,544,707 $ 3,415,879 (333,816) (394,743) (728,559) 764,510 17,961,587 $ 18,726,097 1,383,990 16,577,597 '17,961,587 - 20 - DIEHL, EVANS &T COMPANY, LLP CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS 2121 ALTON PARKWAY, SUITE 100 IRVINE, CALIFORNIA 92606-4906 (949) 399-0600 · FAX (949) 399-0610 www. diehlevans.com September 19, 2002 MICHAEL IL LUDIN, CPA CRAIG W. SPRAK~R, CPA NITIN P. PATEL, CPA ROBERT J. CALLANAN, CPA * PHILIP H. HOLTKAMP, CPA * THOMAS M. PERLOWSKI, CPA * HARVEY J. $CHROEDER, CPA MICHAEL C. FRIEDMAN, CPA * A PROFF~SIONAL CORPORATION INDEPE~ENT AUDITORS' RBPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMtgD IN ACCORDANCE BflTH GOVBRNN[ENT AUDITING STANDARDS To the Board of Directors of the Tustin Community Redevelopment Agency Tustin, Caligornia We have audited the financial statements of the Tustin Community Redevelopment Agency, a component unit of the City of Tustin, as of and for the year ended June 30, 2002 and have issued our opinion report thereon dated September 19, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the financial statements of the Tustin Community Kedevelopment Agency are free of material misstatements, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement mounts. Such provisions include those provisions of laws and regulations identified in the Guidelines For Compliance Audits of California Redevelopment Agencies, issued by the State Controller's Office and as interpreted in the .Suggested Auditing Procedures for Accompanying Compliance Audits of California Redevelopment Agencies, issued by the Governmental Accounting and auditing Committee of the Califomia Society of Certified Public Accountants. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Govemment Auditing Standards. - 22- OTHER OFFICES AT: 2965 ROOSEVELT STREET CARLSBAD, CALIFORNIA 92008-2389 (760) 729-2343 . FAX (760) 729-2234 613 W. VALLEY PARKWAY, SUITE 330 ESCONDIDO, CALIFORNIA 92025-2598 (760) 741-3141 , FAX (760) 741-9890