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AG RPTS 2012 0104 RDA REG
J EBTABZIM NARCI'+ 11.1N1 atF0RO' O r1' OF M�, Resolution No. 2012 -252 REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK REGULAR MEETING AGENDA WEDNESDAY, JANUARY 4, 2012 7 :00 P.M. Moorpark Community Center 799 Moorpark Avenue 1. CALL TO ORDER: 2. ROLL CALL: 3. PUBLIC COMMENT: 4. REORDERING OF, AND ADDITIONS TO, THE AGENDA: 5. CONSENT CALENDAR: (ROLL CALL VOTE REQUIRED) A. Consider Minutes of Regular Meeting of December 7 2011. Staff Recommendation: Approve the minutes. B. Consider Annual Financial Report for the Fiscal Year Ended June 30, 2011 for the Moorpark Redevelopment Agency. Staff Recommendation: Accept the Annual Report and receive and file. ROLL CALL VOTE REQUIRED (Staff: Ron Ahlers) All writings and documents provided to the majority of the Agency regarding all open- session agenda items are available for public inspection at the City Hall public counter located at 799 Moorpark Avenue during regular business hours. The agenda packet for all regular Redevelopment Agency meetings is also available on the City's website at www.ci.mooroark.ca.us. Any member of the public may address the Agency during the Public Comments portion of the Agenda, unless it is a Public Hearing or a Presentation /Action/ Discussion item. Speakers who wish to address the Agency concerning a Public Hearing or Presentations /Action /Discussion item must do so during the Public Hearing or Presentations /Action/ Discussion portion of the Agenda for that item. Speaker cards must be received by the City Clerk for Public Comment prior to the beginning of the Public Comments portion of the meeting; for a Presentation /Action /Discussion item, prior to the Chair's call for speaker cards for each Presentation /Action/ Discussion agenda item; and for a Public Hearing item, prior to the opening of each Public Hearing, or beginning of public testimony for a continued hearing. A limitation of three minutes shall be imposed upon each Public Comment and Presentation /Action /Discussion item speaker. A limitation of three to five minutes shall be imposed upon each Public Hearing item speaker. Written Statement Cards may be submitted in lieu of speaking orally for open Public Hearings and Presentation /Action /Discussion items. Any questions concerning any agenda item may be directed to the City Clerk's office at 517 -6223. Redevelopment Agency Agenda January 4, 2012 Page 2 5. CONSENT CALENDAR: (continued) C. Consider Authorization of Recordation of the Notice of Completion for Demolition of Structures at 1083 Walnut Canyon Road and 112 First Street and Authorization for Release of Project Bonds in Accordance with Contract Provisions. Staff Recommendation: Authorize the City Clerk to file the Notice of Completion and release the project bonds in accordance with the contract provisions. (Staff: David Moe) 6. CLOSED SESSION: A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Subdivision (b) of Section 54956.9 of the Government Code: (Number of cases to be discussed - 4) B. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Initiation of litigation pursuant to Subdivision (c) of Section 54956.9 of the Government Code: (Number of cases to be discussed - 4) 7. ADJOURNMENT: In compliance with the Americans with Disabilities Act, if you need special assistance to review an agenda or participate in this meeting, including auxiliary aids or services, please contact the City Clerk's Division at (805) 517 -6223. Upon request, the agenda can be made available in appropriate alternative formats to persons with a disability. Any request for disability- related modification or accommodation should be made at least 48 hours prior to the scheduled meeting to assist the City staff in assuring reasonable arrangements can be made to provide accessibility to the meeting (28 CFR 35.102- 35.104; ADA Title 19. Redevelopment Agency Agenda January 4, 2012 Page 3 STATE OF CALIFORNIA ) COUNTY OF VENTURA ) ss CITY OF MOORPARK ) AFFIDAVIT OF POSTING I, Maureen Benson, declare as follows: That I am the City Clerk of the City of Moorpark and that a notice for a Regular Meeting of the Redevelopment Agency of the City of Moorpark to be held Wednesday, January 4, 2012, at 7:00 p.m. in the Council Chambers of the Moorpark Community Center, 799 Moorpark Avenue, Moorpark, California, was posted on December 29, 2011, at a conspicuous place at the Moorpark Community Center, 799 Moorpark Avenue, Moorpark, California. I declare under penalty of perjury that the foregoing is true and correct. Executed on December 29, 2011. Maureen Benson, City Clerk CITY OF MOORPARK, CALIFORNIA Redevelopment Agency Meeting `` ITEM S.A. of__ - 4 -AP/ 1 ACT10N:_ MINUTES OF THE REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK a* ' Mnnrp_ rk, Califfirnon December 7, 2011 A Regular Meeting of the Redevelopment Agency of the City of Moorpark was held on December 7, 2011, in the Community Center of said City located at 799 Moorpark Avenue, Moorpark, California. 1. CALL TO ORDER: Chair Parvin called the meeting to order at 7:16 p.m. 2. ROLL CALL: Present: Agency Members Mikos, Millhouse, Pollock, Van Dam, and Chair Parvin. Staff Present: Steven Kueny, Executive Director; Joseph Montes, General Counsel; Hugh Riley, Assistant Executive Director; Deborah Traffenstedt, Deputy City Manager; Ron Ahlers, Agency Treasurer; David Bobardt, Community Development Director; and Maureen Benson, Agency Secretary. 3. PUBLIC COMMENT: None. 4. REORDERING OF, AND ADDITIONS TO, THE AGENDA: None. 5. PRESENTATION /ACTION /DISCUSSION: A. Consider Name for Affordable Housing Project on Charles Street. Staff Recommendation: Approve "Charles Street Terrace" for the official name of the affordable housing project on Charles Street. Mr. Bobardt gave the staff report. There were no speakers. MOTION: Agency Member Millhouse moved and Agency Member Mikos seconded a motion to approve "Charles Street Terrace" for the official name of the affordable housing project on Charles Street. The motion carried by unanimous voice vote. 1 Minutes of the Redevelopment Agency Moorpark, California Page 2 December 2 2011 6. CONSENT CALENDAR: (ROLL CALL VOTE REQUIRED) MOTION: Agency Member Millhouse moved and Agency Member Van Dam seconded a motion to approve the Consent Calendar. The motion carried by unanimous roll call vote. A. Consider Minutes of Regular Meeting of October 5, 2011. Staff Recommendation: Approve the minutes. B. Consider Resolution Amending the Fiscal Year 2011 -12 Operating and Capital Improvement Budget to Include an Annual Work Plan for the Low /Moderate Income Housing Fund and these Annual Reports: 1)State Controllers Report — Redevelopment Agencies Financial Transactions Report for Fiscal Year 2010 -11; 2) California Redevelopment Agencies - Fiscal Year 2010 -11 Proiect Area Contributions to Low and Moderate Income Housing Funds; 3) Blight Removal Progress Report Fiscal Year 2010 -11; and 4) Statement of Indebtedness for 2011 -12 Tax Year for the Agency. Staff Recommendation: 1) Adopt Resolution No. 2011 -251; and 2) Accept agenda report and other reports of the Redevelopment Agency of the City of Moorpark as listed in the agenda report title. 7. CLOSED SESSION: None was held. 8. ADJOURNMENT: Chair Parvin adjourned the meeting at 7:18 p.m. Janice S. Parvin, Chair ATTEST: Maureen Benson, Agency Secretary E TO: FROM: DATE: MOORPARK REDEVELOPMENT AGENCY ITEM 5.13. CITY OF MOORPARK, CALIFORNIA Redevelopment Agency Meeting AGENDA REPORT of I- 34-A01 ACTT ©N: /l D -_A— Honorable Agency Board of Directors Ron Ahlers, Finance Director l_ December 12, 2011 (Agency Meeting of January 4, 2012) SUBJECT: Consider the Annual Financial Report for the Fiscal Year Ended June 30, 2011 for the Moorpark Redevelopment Agency SUMMARY The Annual Financial Report for the Moorpark Redevelopment Agency for June 30, 2011 is hereby presented for Agency approval. BACKGROUND Pursuant to Section 33080.1 of the Health and Safety Code of the State of California, an annual financial report must be presented to the Moorpark Redevelopment Agency by December 31, 2011. The Agency Board of Directors was presented this report on December 16, 2011; thereby fulfilling the requirement of the law. DISCUSSION The firm of Teaman, Ramirez & Smith, Inc., Certified Public Accountants (Independent Auditors) has been engaged to perform the audit for fiscal year ending June 30, 2011. A copy of the annual financial report of the Moorpark Redevelopment Agency for June 30, 2011 is hereby submitted. The Agency has received an unqualified opinion on this Annual Financial Report. FISCAL IMPACT The Agency paid $396,345 into the State of California Supplemental Educational Revenue Augmentation Fund (SERAF) on May 10, 2011. The assets of the Agency exceeded its liabilities by $3,552,000 (positive net assets). The Agency's total debt decreased by approximately $544,000 or 1.9 %. This decrease is due to on -going debt service payments. Gross property tax increment revenue during the fiscal year decreased by approximately $109,000 (1.6 %) to $6,755,960. 3 Honorable Agency Board of Directors January 4, 2012 Page 2 As of the end of June 30, 2011, the governmental funds reported combined ending fund balances of $30,719,000. This amount is further divided: $ 1,885,000 Restricted for Debt Service $ 7,652,000 Restricted for construction Ruben Castro Human Services Center $20,796,000 Land held for resale or development, which for each fund: $8,302,000 Low & Moderate Income Housing Fund $6,857,000 MRA Operating Fund $5,637,000 Bond Proceeds Funds The Low - Moderate Income Housing Fund, a special revenue fund, is used to account for funds that are set aside for low and moderate income housing, as well as related expenditures. At the end of the current fiscal year, the fund balance was $8,246,000, the majority of which is in Land held for resale or development of $8,302,000. Therefore, there is approximately $56,000 in negative fund balance. The Agency Operating Fund, a special revenue fund, is the chief operating fund of the Agency. At the end of the current fiscal year, the fund balance of the Agency Operating Fund was $7,005,000, the majority of which is in Land held for resale or development of $6,857,000. Therefore, there is approximately $149,000 in available fund balance. The Agency has two Capital Projects Funds which account for the expenditures of the 2001 and 2006 bond proceeds. Their available fund balances are approximately $494,000. The restricted amount set -aside for the Ruben Castro Human Services Center is $7,652,000. Other highlights of the report can be found by reading the Letter of Transmittal (pages i- iv) and Management's Discussion and Analysis (pages vii -xii). STAFF RECOMMENDATION (Roll Call Vote) Accept the Annual Financial Report of the Moorpark Redevelopment Agency and receive and file this report. Attachment: Annual Financial Report of the Moorpark Redevelopment Agency for the fiscal year ended June 30, 2011. E Moorpark Redevelopment Agency Ruben Castro Human Services Center Scheduled to Open in 2012 Annual Financial Report Fiscal Year Ending June 30, 2011 E ���w MOORPARK REDEVELOPMENT AGENCY ANNUAL FINANCIAL REPORT Year Ended June 30, 2011 Chairperson Janice S. Parvin Agency Members Roscann Mikos Keith Millhouse David Pollock Mark Van Dam Executive Director Steven Kueny Assistant Executive Director Hugh Riley Report Prepared by: Ron Ahlers, Agency Treasurer Irmina Lumbad, Budget & Finance Manager Debbie Burdorf, Accountant I C THIS PAGE LEFT BLANK INTENTIONALLY Moorpark Redevelopment Agency Annual Financial Report Year Ended June 30, 2011 TABLE OF CONTENTS PAGE Letter of Transmittal i - iv Independent Auditors' Report v - vi Management's Discussion and Analysis vii- xii Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets 1 Statement of Activities 2 Fund Financial Statements Balance Sheet - Governmental Funds 3 - 4 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 5 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 6 - 7 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 8 Notes to Financial Statements 9 -33 Required Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance Low and Moderate Income Housing Fund - Budget and Actual 34 MRA Operating Fund - Budget and Actual 35 Notes to Required Supplementary Information 36 Supplementary Information: Major Fund Budgetary Comparison Schedules: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual 1999 Tax Allocation Bonds Debt Service Fund 37 2001 Tax Allocation Bonds Debt Service Fund 38 2006 Tax Allocation Bonds Debt Service Fund 39 2001 Bond Proceeds Capital Projects Fund 40 2006 Bond Proceeds Capital Projects Fund 41 Computation of Low and Moderate Housing Funds Excess Surplus 42 Independent Auditors' Report on Compliance and Internal Control Over Compliance Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 43-47 n THIS PAGE LEFT BLANK INTENTIONALLY December 6, 2011 Honorable Chair and Members of the Moorpark Redevelopment Agency City of Moorpark Moorpark, CA 93021 INTRODUCTION California (State) law requires that all general - purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited by a firm of licensed certified public accountants 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. Pursuant to the requirement, we hereby issue the annual financial report of the Moorpark Redevelopment Agency (Agency) for the fiscal year ended June 30, 2011. This report consists of management's representations concerning the finances of the Agency. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Agency has established a comprehensive internal control framework that is designed both to protect the Agency's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Agency's financial statements in conformity with GAAP. Because the costs of internal controls should not outweigh their benefits, the Agency's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Teaman, Ramirez & Smith, Inc., a firm of certified public accountants, has audited the Agency's financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Agency for the fiscal year ended June 30, 2011, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Agency's financial statements for the fiscal year ended June 30, 2011, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. 10 GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The Agency's MD &A can be found immediately following the report of the independent auditors. PROFILE OF THE MOORPARK REDEVELOPMENT AGENCY The Agency was created by the Moorpark City Council Ordinance No. 87, adopted March 18, 1987. The City Council appointed the Board of Directors and established bylaws of the Agency on May 20, 1987, by Resolution No. 87 -387. The Agency was established pursuant to the Community Redevelopment Law of California as modified in Part I of Division 24 of the State of California Health and Safety Code. As such, the Agency acts as a legal entity, separate and distinct from the City of Moorpark (City) even though the City Council has the authority to appoint the Agency's Governing Board. The Agency has a Redevelopment Plan which was adopted by the Moorpark City Council Ordinance No. 110, on July 5, 1989. At present, the Moorpark City Council serves as the governing body of the Agency with the authority to carry out redevelopment activities. The City Manager serves as Executive Director; the Finance Director serves as the Treasurer of the Agency; the City Clerk serves as Secretary of the Agency; and the City Attorney serves as Agency Counsel. The Agency currently has one project area: 1. The Project Area consists of one large contiguous area consisting of approximately 1,217 acres. The Project Area is comprised of a mixture of residential, commercial, industrial and institutional land uses along with parcels that are undeveloped and /or under - utilized, parking areas, and public rights -of -way. The actions of the Agency are binding, and its appointed representatives routinely transact business, including the incurrence of long -term debt, in the Agency's name. The Agency is broadly empowered to engage in the general economic revitalization and redevelopment of the City through acquisition and development of property in those areas of the City determined to be in a blighted condition, as defined under State law. The Community Redevelopment Law of California provides that, pursuant to the adoption of a redevelopment plan, the Agency is entitled to a proportional amount based on tax - sharing agreements for all future incremental property tax revenues attributable to increases in the property tax base within the Project Area. Property taxes levied for the fiscal year ended on June 30 are payable in equal installments due on November 1 and February 1 and collectible December 10 and April 10, respectively. 11 FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Agency operates. STATE OF CALIFORNIA On June 29, 2011, as part of adopting the State of California Fiscal Year (FY) 2011 -12 budget, the Governor signed two trailer bills, ABx1 26 ( "Dissolution Act ") and ABx1 27 ( "Voluntary Alternative Redevelopment Program" (VARP)), into law. The legislation became effective on June 29, 2011. ABx1 26 eliminates redevelopment agencies as of October 1, 2011. ABx1 27 provides an opportunity for cities to voluntarily "opt -in" and continue to have their redevelopment agencies operate and function "only upon the enactment of an ordinance enacted by the community to comply with this part on or before November 1, 2011 ". The California Redevelopment Association ( "CRA ") and the California League of Cities filed a lawsuit in the California Supreme Court challenging the constitutionality of ABx1 26 and ABx1 27. On August 11, 2011, the California Supreme Court announced it would hear the lawsuit, which requests that the Court declare ABx1 26 and ABx1 27 unconstitutional. The court established an expedited briefing schedule designed to facilitate oral argument as early as possible in 2011, and a decision before January 15, 2012. The Court also issued a partial stay regarding suspension of the effectiveness of ABx1 26 and ABx1 27 until it can rule on the constitutionality of these two bills. The Court allowed the first statute to remain in effect insofar as it precludes existing redevelopment agencies from incurring new indebtedness, transferring assets, acquiring real property, entering into new contracts or modifying existing contracts or entering into new partnerships, adopting or amending redevelopment plans, but it stayed enforcement of both statutes in all other respects. While the case is being litigated, the City prudently elected to opt -in and continues to operate the Agency simply to preserve the Agency's authority in the event the CRA and League prevail in the litigation and redevelopment agencies remain in place. Because the City adopted the Ordinance authorizing the City to participate in VARP, the payment for FY 2011 -12 is $1,606,569 and $381,000 (estimate) for FY 2012 -13 and ever increasing amounts in the following years. LOCALECONOMY Economic growth in the City is relatively flat. During the last year, there has been a minimal decline in property tax revenue due to real estate sales and property tax reassessments. This trend is expected to continue with the on -going housing crisis and lower values for properties being sold. Overall, sales tax revenue increased by 10.7% versus the prior year. Sales tax revenue is greater than the pre- recession levels. 12 AGENCY LOANS As of June 30, 2011, the Agency's outstanding loan total is $616,384. The Agency's loan to Mission Bell Partners in the amount of $1,704,786 was assigned to the City in March 2011 and is no longer a receivable of the Agency. During this past year the Agency received a complete loan payoff totaling $349,607 from Moorpark 20, LP, which represents the short-term loan to the Ventura County Area Housing Authority (AHA) for a low and moderate income housing project on Charles Street. Additionally, the Agency loaned $600,000 to the AHA for this same project for a period of 30 years at a rate of 2.5% interest. The Agency operates rehabilitation loan programs for the renovation of low and moderate income housing; total outstanding is in the amount of $16,384. Please refer to Note 3 for further detailed information. CASH MANAGEMENT POLICIES AND PRACTICES Cash temporarily idle during the year was invested in the City Treasurer's portfolio, mainly with the State of California Local Agency Investment Fund (LAIF). The average yield is less than Y2 of one percent for the fiscal year. Investment income includes appreciation in the fair value of investments. Increases in fair value during the current year, however, do not necessarily represent trends that will continue; nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments that the government intends to hold to maturity. RISK MANAGEMENT As a component unit of the City, the Agency is covered under the City's policies for general liability, property insurance and workers compensation coverage. Additional information on the Agency's risk management can be found in Note 12 of the financial statements. SUMMARY In conclusion, I would like to take this opportunity to express my appreciation to the staff of the Finance Department and Redevelopment Agency, led by the efforts of the Budget and Finance Manager, Irmina Lumbad and Accountant I, Debbie Burdorf, whose hard work and dedication have made the preparation of this report possible. I would like to express my appreciation to the Agency Members, Steve Kueny as Executive Director and Hugh Riley as Assistant Executive Director, for their support and responsible planning of the Agency's financial affairs. Respectfully submitted, RON AHLERS AGENCY TREASURER iv 13 IF-�,Ni;` —.i ! — ':i'ARE7 c SMI1H, INC. co1�1�:e auatir ..,coearsals Independent Auditors' Report The Honorable Chair and Members of the Agency Moorpark Redevelopment Agency Moorpark, California We have audited the accompanying financial statements of the governmental activities and each major fund of the Redevelopment Agency of the City of Moorpark (Agency), a component unit of the City of Moorpark, California (City), as of and for the year ended June 30, 2011, which collectively comprise the Agency's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Agency's management. Our responsibility is to express opinions on these 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 Auditing 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 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 opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Agency, as of June 30, 2011, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As described in Note 1 to the financial statements, the Agency adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as of June 30, 2011. In accordance with Government Auditing Standards, we have also issued our report dated December 6, 2011 on our consideration of the Agency's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and to provide an opinion on compliance but not on internal control over financial reporting. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Richard A. Team-in, cr,,A o Greg W. Fankha nel. CPi 0 David M. Ramirez, CPA 0 Javier H. Cwrillo, CPA 4201 Brockton Awc. Suil� 100, Riverside C^. 92501 0 951.274.9500 0 951.274.7826 rn 0 vewwArscpas.com s 14 Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages vii through xii and the budgetary information on pages 34 and 35 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financials statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of' preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Agency's financial statements as a whole. The letter of transmittal and supplementary information listed in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. The supplementary information is the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statement themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation the financial statements as a whole. The letter of transmittal has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or provide any assurance on it. j," A.,7, December 6, 2011 15 MOORPARK REDEVELOPMENT AGENCY MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2011 As management of the Moorpark Redevelopment Agency (Agency), we offer readers of the Agency's financial statements this narrative overview and analysis of the financial activities of the Agency for the fiscal year ended June 30, 2011. Readers are highly encouraged to consider the information presented here in conjunction with the accompanying basic financial statements which immediately follow this section. FINANCIAL HIGHLIGHTS • The assets of the Agency exceeded its liabilities at the close of the most recent fiscal year by $3,552,000(net assets). • The Agency's total debt decreased by $544,000 during the current fiscal year due to the normal pay down of the principal. • The Agency's governmental funds reported combined ending fund balances of $30,719,000, a decrease of $3,174,000 from the prior year. • The Agency's gross property tax increment revenue during the current fiscal year decreased by $109,000 to $6,756,000. • The Agency paid $396,000 into the State of California Supplemental Educational Revenue Augmentation Fund (SERAF). Last year's payment was $1,925,000. • The Agency paid $2,943,000 in pass- through payments to other government agencies. OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Agency's basic financial statements. The Agency's basic financial statements comprise three components: 1) Government -wide financial statements 2) Fund financial statements 3) Notes to the financial statements This report also contains other supplementary information in addition to the basic financial statements themselves. Government -wide financial statements. These statements are designed to provide readers with a broad overview of the Agency's finances, in a manner similar to a private- sector business. The Statement of Net Assets presents information on all of the Agency's assets and liabilities, with the difference between the two reported as net assets. In time, increases vii 16 MOORPARK REDEVELOPMENT AGENCY MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2011 or decreases in net assets may serve as a useful indicator of whether the financial position of the Agency is improving or deteriorating. The Statement of Activities presents information on how the Agency's net assets changed during the fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods; (i.e., uncollected taxes). The government -wide financial statements include only the Agency itself. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Agency, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. The Agency uses only governmental funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government - wide financial statements. By doing so, readers may better understand the long -term impact of the Agency's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Agency maintains seven individual governmental funds and all of them are considered to be major funds. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances for: Special Revenue Funds Debt Service Funds _Capital Projects Funds Low & Moderate Income Housing 1999 Tax Allocation Bond 2001 Bond Proceeds MRA Operating 2001 Tax Allocation Bond 2006 Bond Proceeds 2006 Tax Allocation Bond viii 17 MOORPARK REDEVELOPMENT AGENCY MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2011 The Agency adopts an annual appropriated A budgetary comparison statement has bei compliance with the budget. budget for each of its governmental funds. n provided for these funds to demonstrate Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. Supplementary Information. All of the governmental funds listed above are shown Budget and Actual for the Schedule of Revenues, Expenditures and Changes in Fund Balances. GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Agency, assets exceeded liabilities by $3.6 million at the close of the most recent fiscal year. Of the $32.8 million in total liabilities, $27.9 million is outstanding debt for the 1999 Tax Allocation Bonds, 2001 Tax Allocation Bonds and 2006 Tax Allocation Bonds. Table 1 Net Assets Governmental Activities As of June 30, 2011 and 2010 Assets: Current and other assets Capital assets Total Assets Liabilities: Long -term debt outstanding Other liabilities Total Liabilities Net Assets: Restricted Unrestricted Total Net Assets 2011 $ 15, 567,178 20,795,867 36,363,045 27,309,257 5,501,889 32,811,146 7,630,017 (4,078,118) $ 3,551,899 2010 $ 21,403,711 19,428,853 40,832,564 27,878,410 4,071,921 31,950,331 7,407,798 1,474,435 8,882,233 The Agency's net assets decreased by $5.3 million during the 2010 /11 fiscal year. ix S MOORPARK REDEVELOPMENT AGENCY MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2011 Table 2 Changes in Net Assets Governmental Activities As of June 30, 2011 and 2010 FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS As noted earlier, the Agency uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds. The focus of the Agency's governmental funds is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Agency's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, governmental funds reported combined ending fund balances of $30,719,000, with Nonspendable fund balance of $11,968,000; Restricted fund balance of $17,838,000; Assigned fund balance of $968,000 and Unassigned fund balance of negative ($56,000). r W 2011 2010 Revenues Property tax - Redevelopment Tax Increment $ 6,755,960 $ 6,864,776 Investment income 227,238 254,316 Other /Rentals 10,727 68,115 Total Revenues, Transfers & Special Items 6,993,925 7,187,207 Expenses Public Services 10,831,656 7,722,700 Interest on long -term debt 1,492,603 1,504,500 Total Expenses 12,324,259 9,227,200 Increase /(decrease) in net assets (5,330,334) (2,039,993) Net Assets, beginning 8,882,233 10,522,079 Prior Period Adjustment 0 400,147 Net Assets, ending $ 3,551,899 $ 8,882,233 FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS As noted earlier, the Agency uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental Funds. The focus of the Agency's governmental funds is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the Agency's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, governmental funds reported combined ending fund balances of $30,719,000, with Nonspendable fund balance of $11,968,000; Restricted fund balance of $17,838,000; Assigned fund balance of $968,000 and Unassigned fund balance of negative ($56,000). r W MOORPARK REDEVELOPMENT AGENCY MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2011 The Low and Moderate Income Housing Fund, a special revenue fund, is used to account for funds that are set aside for low and moderate income housing, as well as related expenditures. At the end of the current fiscal year, the fund balance was $8,246,000, with Land held for resale or development at $8,302,000. The MRA Operating Fund, special revenue fund, is the chief operating fund of the Agency. At June 30, 2011, the fund balance of the MRA Operating Fund was $7,005,000; the majority is in Land held for resale or development at $6,856,000. The three debt service funds account for the accumulation of resources to be used for the repayment of Agency debt. Their fund balances are mainly for the contractual reserves for the bond indentures of the 1999, 2001 and 2006 bond issuances. The Agency has two Capital Projects Funds which account for the expenditures of the 2001 and 2006 bond proceeds. Their fund balances are approximately $13.3 million, with Land held for resale or development at $5.6 million. BUDGETARY HIGHLIGHTS Capital projects budgeted during the year: Ruben Castro Human Services Complex, 81 First Street Building and the Aszkenazy Project revitalizing High Street. Supplemental appropriations were approved during the 2010 /11 fiscal year for the: purchase of 450 High Street, purchase and demolition of 124 First Street, demolition of 1083 Walnut Canyon Road, Area Housing Authority Loan, Ruben Castro Human Service Complex and High Street Streetscape. LONG -TERM DEBT At the end of the current fiscal year, the Agency had total debt outstanding of $27.9 million. 1999 Tax Allocation Bonds 2001 Tax Allocation Bonds 2006 Tax Allocation Bonds Agency Outstanding Debt Governmental Activities June 30. 2011 $ 4,995,000 11,505,000 11,378,410 Governmental Activities June 30. 2010 $ 5,495,000 11,520,000 11,407,563 Total $ 27,878,410 $ 28,422,563 The Agency's total debt decreased by $544,000during the current fiscal year, due to the normal pay down of the principal. xi 20 MOORPARK REDEVELOPMENT AGENCY MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2011 ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES The State of California passed ABx1 26 and ABx1 27 on June 29, 2011. These two laws abolish redevelopment agencies and grant local governments the ability to resurrect those same redevelopment agencies if they agree to a permanent payment to their associated school districts, respectively. The payment amount for 2011/12 is $1,606,569 and the estimate for 2012/13 and subsequent years are $381,000 annually. The Agency shall pay over $3 million in pass- through payments to other government entities. In addition to various Capital Improvement Projects, the Agency budgeted $210,000 for the High Street Arts Center expenditure in the upcoming fiscal year. The estimated revenue is approximately $130,000, resulting in a net loss of approximately $80,000. This loss will be absorbed by the MRA Operating Fund and is part of the revitalization efforts in the downtown area. Assessed property values are expected to have a nominal decrease. Therefore, property tax increment revenue shall decrease. • Interest income should decrease, reflecting the decrease in interest rates. All of these factors were considered in preparing the Agency's budget for fiscal year 2011/12. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the Agency's finances for all those with an interest in the Agency's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Moorpark Redevelopment Agency, Finance Department, 799 Moorpark Avenue, Moorpark, California 93021. xii 21 BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2011 22 Moorpark Redevelopment Agency Statement of Net Assets June 30, 2011 ASSETS Cash and Investments Receivables: Accounts Interest Notes Property Held for Resale /Development Restricted Cash and Investments Debt Issuance Costs Total Assets LIABILITIES Accounts Payable and Accrued Liabilities Interest Payable Deposits Due to the City of Moorpark Noncurrent Liabilities: Due Within One Year Due in More Than One Year Total Liabilities NET ASSETS Restricted for: Low and Moderate Income Housing Unrestricted Total Net Assets The accompanying notes are an integral part of this statement. Governmental Activities $ 12,595,695 19,830 20,745 616,384 20,795,867 1,884,771 429.753 36,363,045 3,821,939 334,413 11,750 764,634 569,153 27,309,257 32,811,146 7,630,017 (4,078,118) $ 3,551,899 23 Moorpark Redevelopment Agency Statement of Activities Year Ended June 30, 2011 Functions /Programs Expenses Governmental Activities: Public Services $ 10,948,164 Interest on Long -Term Debt 1,492,603 Total Governmental Activities Procram Revenues Charges Operating Capital for Grants and Grants and Services Contributions Contributions $ 116,508 $ - $ - Net (Expense) $ (10,831,656) (1,492,603) $ 12,440,767 $ 116,508 $ - $ - (12,324,259) General Revenues: Taxes: Property Tax, Redevelopment Agency Tax Increment Investment Income Other Total General Revenues Change in Net Assets Total Net Assets, Beginning Total Net Assets, Ending The accompanying notes are an integral part of this statement. 2 6,755,960 227,238 10,727 6,993,925 (5,330,334) $ 3,551,899 %51 Moorpark Redevelopment Agency Balance Sheet Governmental Funds June 30, 2011 ASSETS Cash and Investments Imprest Cash Cash with Fiscal Agent Receivables Accounts Interest Notes Due from Other Funds Property Held for Resale/Development Total Assets LIABILITIES AND FUND BALANCES Liabilities Accounts Payable Accrued Wages and Withholdings Due to the City of Moorpark Due to other Funds Deferred Revenue Deposits Total Liabilities Fund Balances: Nonspendable: Property Held for Resale/Development Restricted: Low and Moderate Income Housing Debt Service Construction of Human Services Center Redevelopment Activities Unassigned Total Fund Balances Total Liabilities and Fund Balances The accompanying notes are an integral part of this statement. Special Revenue Funds Low ano Moderate Income MRA Housing Operating $ 571,499 $ 3,499,902 $ 1,500 Debt Service Funds 1999 Tax Allocation Bonds 325,486 $ 771,148 2001 Tax Allocation Bonds 584,675 7,252 12,578 546 7,676 616,384 8,302,304 6,856,424 $ 9,497,985 $ 10,378,080 $ 1,096,634 $ 584,675 $ 629 $ 3,289,078 $ 7,930 9,740 614,891 73,968 616,384 11,750 1,251,584 3,372,786 6,856,424 8,302,304 771,148 584,675 148,870 325,486 (55,903) 8,246,401 7,005,294 1,096,634 584,675 $ 9,497,985 $ 10,378,080 $ 1,096,634 $ 584,675 3 25 Moorpark Redevelopment Agency Balance Sheet Governmental Funds June 30, 2011 Debt Service Fund Capital Projects Funds 2006 Tax Total Allocation 2001 Bond 2006 Bond Governmental Bonds Proceeds Proceeds Funds $ $ 494,370 $ 7,702,938 $ 12,594,195 1,500 528,948 1,884,771 19,830 718 11,805 20,745 616,384 5,111,349 525,790 20,795,867 $ 528,948 $ 5,606,437 $ 8,240,533 $ 35,933,292 $ $ $ 514,562 $ 3,804,269 17,670 1,320 74,455 764,634 616,384 11,750 - 1,320 589,017 5,214,707 5,111,349 11,967,773 8,302,304 528,948 1,884,771 7,651,516 7,651,516 493,768 968,124 (55,903) 528,948 5,605,117 7,651,516 30,718,585 $ 528,948 $ 5,606,437 $ 8,240,533 $ 35,933,292 The accompanying notes are an integral part of this statement. 4 26 Moorpark Redevelopment Agency Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2011 Fund balances of governmental funds Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Long -term loans and notes receivable are not current financial resources. Therefore, they are deferred in the governmental funds. Interest expenditures are recognized when due, and therefore, interest payable is not recorded in the governmental funds. Long -term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. Bonds Payable Less: Issuance Discount Issuance costs net of accumulated amortization were recorded as expenditures in the governmental funds. Net assets of governmental activities The accompanying notes are an integral part of this statement. 5 $ 30,718,585 616,384 (334,413) (28,155,000) 276,590 429,753 $ 3,551,899 27 This page intentionally left blank Moorpark Redevelopment Agency Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2011 REVENUES Taxes Fines and Forfeitures Use of Money and Property Integovernmental Other Revenues Total Revenues EXPENDITURES Current: Public Services: Pass -Thru Agreements SERAF Payment to State Administration Community Development Capital Outlay Debt Service: Principal Retirement Interest on Bonds Interest on Short-term Loan from City Total Expenditures Special Revenue Funds LOW ana Moderate Income MRA Housing Operating $ 1,351,192 $ 3,651,369 4,490 Debt Service Funds 1999 Tax 2001 Tax Allocation Allocation $ 603,219 $ 602,743 36,936 107,415 32,668 1,176,500 356,409 120,433 2,921,037 3,883,707 635,887 602,743 363,064 1,896,419 20,642 2,942,683 396,345 919,143 702,629 500,000 15,000 255,694 587,743 100,000 2,280,125 5,060,800 755,694 602,743 Excess (Deficiency) of Revenues over Expenditures 640,912 (1,177,093) (119,807) - OTHER FINANCING SOURCES (USES) Transfers In 151,139 Transfers Out (151,139) Total Other Financing Sources (Uses) (151,139) - 151,139 - Net Change in Fund Balances 489,773 (1,177,093) 31,332 - Fund Balances, Beginning of Year 7,756,628 8,182,387 1,065,302 584,675 Fund Balances, End of Year $ 8,246,401 $ 7,005,294 $ 1,096,634 $ 584,675 'Be accompanying notes are an integral part of this statement. 6 29 Moorpark Redevelopment Agency Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2011 Debt Service Fund Capital Projects Funds 2006 Tax Total Allocation 2001 Bond 2006 Bond Governmental Bonds Proceeds Proceeds Funds $ 547,437 $ $ $ 6,755,960 4,490 3,713 46,506 227,238 1,176,500 476,842 547,437 3,713 46,506 8,641,030 2,942,683 396,345 1,320 1,283,527 2,599,048 491,943 2,074,802 2,566,745 40,000 555,000 507,437 1,371,516 100,000 547,437 493,263 2,074,802 11,814,864 - (489,550) (2,028,296) (3,173,834) 151,139 (151,139) - (489,550) (2,028,296) (3,173,834) 528,948 6,094,667 9,679,812 33,892,419 $ 528,948 $ 5,605,117 $ 7,651,516 $ 30,718,585 The accompanying notes are an integral part of this statement. 7 30 Moorpark Redevelopment Agency Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2011 Net change in fund balances -total governmental funds $ (3,173,834) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report revenues when notes receivable are repaid and expenditures when new notes are funded. These changes in notes receivable are not reflected in the Statement of Activities. This amount represents the current year change in notes receivable. Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. The issuance of long -term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. The detail of these differences in the treatment of long -term debt is as follows: Debt Issued or Incurred: Principal Repayments Amortization of Issuance Costs Amortization of Bond Discounts Accrued Interest for Tax Allocation Bonds. This is the net change in accrued interest for the current period. Change in Net Assets of Governmental Activities The accompanying notes are an integral part of this statement. 8 (2,690,413) 555,000 (16,852) (10,847) 6,612 $ (5,330,334) 31 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 NOTE DESCRIPTION PAGE 1 Reporting Entity and Summary of Significant Accounting Policies 10-15 2 Cash and Investments 16-19 3 Notes Receivable 20 4 Property Held for Resale/Development 21 5 Interfund Activity 22 6 Due To/Due From the City of Moorpark 22 7 Long -term Debt 22-25 8 Short -Term Debt 26 9 Agreements with Various Taxing Agencies 26-27 10 Low and Moderate Income Housing Set Aside 27-28 11 Retirement Plan 28 12 Risk Management 29-31 13 Contingencies 31 -33 14 Subsequent Events 33 W 32 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Moorpark Redevelopment Agency (Agency) conform to accounting principles generally accepted in the United States of America as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting and financial reporting principles. The following is a summary of the significant policies. A) Reporting Entity The Agency is a separate governmental entity created in 1987, pursuant to the Community Redevelopment Law of the State of California Health and Safety Code. It has been included as a component unit of the City of Moorpark (City) for purposes of the City's annual financial report. The Agency has responsibility for elimination of blight within the limits of the project area by preparing and carrying out redevelopment plans for area improvements and rehabilitation. The Agency's primary source of revenue comes from property taxes (tax increment), referred to in the accompanying financial statements as "taxes ". The assessed valuation of all property within the project area is determined on the date of adoption of the Redevelopment Plan. 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 de- emphasis might reduce the amount of tax revenues that would otherwise be available to pay the principal and interest on debt. Broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or assessed valuation, or any reduction or elimination of present exemptions would increase the amount of tax revenues that would be available to pay principal and interest on debt. Members of the City Council act as the governing body of the Agency. The Agency is also staffed by employees of the City. B) Basis of Presentation Government -Wide Financial Statements The government -wide financial statements (i.e. the Statement of Net Assets and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these 10 33 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B) Basis of Presentation - Continued statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. All Agency activities are governmental; no business -type activities are reported in these financial statements. The Statement of Activities demonstrates the degree to which the direct expenses of given functions or segments are offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project, function or segment. Program revenues of the Agency include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items that are not properly included among program revenues are reported instead as general revenues. Fund Financial Statements Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements. C) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. 11 34 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C) Measurement Focus, Basis of Accounting, and Financial Statement Presentation - Continued For this purpose, the Agency considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred as under accrual accounting. However, debt service expenditures are recorded only when payment is due. Interest associated with the current fiscal period is considered to be susceptible to accrual, and is therefore recognized as revenue of the current fiscal period. The Agency reports the following major governmental funds: Special Revenue Funds Low and Moderate Income Housing Fund - To account for 20% tax increment set aside required under redevelopment laws of the State of California for low and moderate income housing activities. MRA Operating Fund - To account for tax increment and other monies received and expended within the project area in accordance with the Redevelopment Plan of the Agency made pursuant to redevelopment laws of the State of California. Debt Service Funds 1999 Tax Allocation Bonds Fund - To accumulate monies for the payment of interest and principal of the 1999 Tax Allocation Refunding Bonds. Debt service is financed via the incremental property tax from the Agency. 2001 Tax Allocation Bonds Fund - To accumulate monies for the payment of interest and principal of the 2001 Tax Allocation Bonds. Debt service is financed via the incremental property tax from the Agency. 2006 Tax Allocation Bonds Fund - To accumulate monies for the payment of interest and principal of the 2006 Tax Allocation Bonds. Debt service is financed via the incremental property tax from the Agency. 12 35 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C) Measurement Focus, Basis of Accounting, and Financial Statement Presentation - Continued Capital Projects Funds 2001 Bond Proceeds Fund - Development fund for the 2001 Tax Allocation Bonds proceeds. 2006 Bond Proceeds Fund - Development fund for the 2006 Tax Allocation Bonds proceeds. As a general rule, the effect of inter -fund activity has been eliminated from the government -wide financial statements. Direct expenses have not been eliminated from the functional categories; indirect expenses and internal payments have been eliminated, if any. When both restricted and unrestricted resources are available for use, it is the Agency's policy to use restricted resources first, and then use unrestricted resources as they are needed. D) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. E) Investments The Agency has adopted the provisions of GASB Statement No. 31, "Accounting and Financial Reporting for Certain Investments and External Pools ", which require governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred. In accordance with GASB Statement No. 31, the Agency has adjusted certain investments to fair value (when material). F) Property Held for Resale/Development Property held for resale /development represents land and buildings (properties) purchased by the Agency. Such properties are valued at the lower of cost or estimated net realizable value (as determined by a disposition and development agreement between the Agency and a developer) and 13 36 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued F) Property Held for Resale/Development - Continued has been offset by nonspendable or restricted fund balance to indicate that assets constitute future capital projects and are restricted or not available spendable resources. The balance outstanding at June 30, 2011 was $20,795,867. G) Capital Assets Capital assets, if any, are reported in Governmental Activities column of the Government -wide Financial Statements. Capital assets are defined by the Agency as vehicles, computers and equipment with an initial individual cost of more than $5,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated or annexed capital assets are recorded at estimated market value at the date of donation or annexation. H) Fund Equity The Agency implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions as of June 30, 2011. Fund balances in governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the Agency is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The Agency considers restricted fund balance to have been spent first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the Agency considers committed amounts to be reduced first, followed by assigned amounts and then unassigned amounts. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: Nonspendable Fund Balance - Amounts that cannot be spent either because they are in nonspendable form or are required to be maintained intact. Restricted Fund Balance - Amounts that are constrained to specific purposes by state or federal laws, or externally imposed conditions by grantors or creditors. 14 37 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued H) Fund Equity - Continued Committed Fund Balance - Amounts that may be specified by the Board of Directors by ordinance or resolution to formally commit part of the Agency's fund balances or future revenues for a specific purpose(s) or program. To change or repeal any such commitment will require an additional formal Board of Directors' action utilizing the same type of action that was originally used. Assigned Fund Balance - Amounts that are constrained by the Board's intent to use specified financial resources for specific purposes, but are neither restricted nor committed. It is the policy of the Agency's Board of Directors that assignment of fund balances must be approved by the Board prior to the fiscal year end. Unassigned Fund Balance - These are either residual positive net resources of fund balance in excess of what can properly be classified in one of the other four categories, or negative balances. I) Net Assets Net assets are the differences between assets and liabilities. Net assets invested in capital assets, net of related debt are capital assets, less accumulated depreciation and any outstanding debt related to the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are legal limitations imposed on their use by Agency legislation or external restrictions by other governments, creditors or grantors. J) Property Taxes The Agency receives incremental property taxes on property within its project area over a base - assessed valuation on the date the project area was established. The duties of assessing and collecting property taxes are performed by the Ventura County Assessor and Tax Collector, respectively. Tax levies cover the period from July 1 to June 30 of each year. All tax liens attach annually on the first day in January preceding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property, as it exists on that date. 15 S Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued ,n Property Taxes - Continued Secured property taxes are levied against real property and are due and payable in two equal installments. The first installment is due on November 1 and becomes delinquent if not paid by December 10. The second installment is due on February 1 and become delinquent if not paid by April 10. Unsecured personal property taxes are due on July 1 each year. These taxes become delinquent if not paid by August 31. I) Relationship to the City of Moorpark The Agency is an integral part of the reporting entity of the City. The funds of the Agency have been blended within the financial statements of the City because the City Council of the City is the governing board of the Agency and exercises control over the operations of the Agency. Only the funds of the Agency are included herein; therefore, these financial statements do not purport to represent the financial position or the results of operations of the City. 2) CASH AND INVESTMENTS Cash and investments as of June 30, 2011 are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and Investments $ 12,595,695 Restricted Cash and Investments 1,884,771 Total Cash and Investments $ 14,480,466 Cash and investments as of June 30, 2011, consist of the following: Unrestricted: Demand Deposits $ 103,790 Cash on Hand 1,500 Investments 12,490,405 Total Unrestricted Cash and Investments 12,595,695 16 39 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 2) CASH AND INVESTMENTS - Continued Restricted Cash and Investments (Held by Fiscal Agent) Money Market Funds 1,300,097 CDC Investment Agreement 584,674 Total Restricted Cash and Investments 1,884,771 Total Cash and Investments $ 14.480.466 Investments Authorized by the Agency's Investment Policy The Agency's investment policy only authorizes investment in the Local Agency Investment Fund (LAIF) administered by the State of California and pooled cash and investments with the City. The Agency's investment policy also identifies certain provisions of the California Government Code that address interest rate risk, credit risk, and concentration of credit risk. Detailed information concerning the City's pooled cash and investments can be found in the City's Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2011. Investments Authorized by Debt Agreements Investment of debt proceeds held by the bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the Agency's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment Type Maximum Maturity U.S. Treasury Obligations None U.S. Agency Securities None Banker's Acceptances 180 Days Commercial Paper 270 Days Money Market Mutual Funds N/A Investment Contracts 30 years 17 we Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 2) CASH AND INVESTMENTS - Continued Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. As of year end, the weighted average maturity of the investments contained in the LAIF investment pool was less than one year. Information about the sensitivity of the fair values of the Agency's investments to market interest rate fluctuations is provided by the following table that shows the maturity of each investment: Investment Type State Investment Pool Money Market Funds CDC Investment Agreement Total Disclosures Relating to Credit Risk Value $ 12,490,405 1,300,097 584.674 $ 14,375,176 Maturity Less than One Year Less than One Year October 1, 2031 Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The Agency's investment in LAIF, investment contracts, and money market fund do not have a rating provided by a nationally recognized statistical rating organization. Concentration of Credit Risk The investment policy of the Agency contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The Agency did not have investments that represent more than 5% of the Agency's total investments (other than LAIF). Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the 18 41 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 2) CASH AND INVESTMENTS - Continued Custodial Credit Risk - Continued Agency's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure public agency deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits. All of the Agency's $103,790 demand deposits with financial institutions are covered by Federal depository insurance limits. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker - dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the Agency's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF). Investment in State Investment Pool The Agency is a voluntary participant in the LAIF that is regulated by the California Government Code under the oversight of the elected Treasurer of the State of California. The fair value of the Agency's investment in this pool is reported in the accompanying financial statements at amounts based upon the Agency's pro -rated share of the fair value provided by LAIF for the Agency LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is a governmental investment pool managed and directed by the California State Treasurer and is not registered with the Securities and Exchange Commission. An oversight committee comprised of California State officials and various participants, provide oversight to the management of the fund. The daily operations and responsibilities of LAIF fall under the auspices of the State Treasurer's Office. 19 M Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 3) NOTES RECEIVABLE Mission Bell Note On August 2, 1995, the Agency entered into an agreement with Mission Bell Partners whereby in return for land disposition, the Agency received seven promissory notes totaling $3,934,500. The notes bear simple interest rates ranging from 4 percent to 6 percent per annum from August 29, 1995 until August 29, 2029. Prior to 2004 one note was paid off. In June 2004, the Agency, per a settlement agreement, discharged three of the remaining six of the original seven promissory notes totaling $500,000. In September of 2006, notes number 2 and 6 were paid off. In early 2011, a notice of default was issued by the senior lender for the property. There was a possibility that the $1,704,786 note could be foreclosed out. Therefore, on March 16, 2011, the Agency assigned note no. 7 to the City in partial satisfaction of the $5 million annual operating loan between the City and the Agency. If and to the extent that any moneys are recovered from the Mission Bell note, those moneys will be credited toward the outstanding balance owed pursuant to the City /Agency loan agreement. Also, see note 14. Rehab Loans The Agency operates a rehabilitation loan program for the renovation of low and moderate income housing. The total balance outstanding at June 30, 2011 was $16,384. Other Notes Receivable The Agency has entered into an agreement to loan the County of Ventura Area Housing Authority (AHA) up to $600,000 to assist in developing residential rental units on Agency owned property. As of June 30, 2011, the AHA has drawn down the entire $600,000 on the available loan. The term of the loan is 30 years with a fixed interest rate of 2.5 %. Payments are to be made annually by June 30'' each year. FAX 43 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 4) PROPERTY HELD FOR RESALUDEVELOPMENT Fiscal Year Acquired 1993 -94 1993 -94 1999 -00 2000 -01 2000 -01 2000 -01 2001 -02 2001 -02 2001 -02 2002 -03 2002 -03 2003 -04 2004 -05 2005 -06 2005 -06 2006 -07 2006 -07 2006 -07 2006 -07 2006 -07 2007 -08 2007 -08 2007 -08 2007 -08 2007 -08 2007 -08 2007 -08 2007 -08 2008 -09 2008 -09 2008 -09 2008 -09 2009 -10 2009 -10 2010 -11 2010 -11 2010 -11 Location 18 High Street 661 Moorpark Avenue SW Terminus of Millard Street 285 High Street 500 Spring Road 782 Moorpark Avenue 798 Moorpark Avenue 83 High Street Fitch Avenue Cul -de -sac 467 E High Street 47 -51 High Street 81 Charles Street 81 First Street 347 Moorpark Avenue 45 High Street 1095 Walnut Canyon Road 250 E Los Angeles Avenue 460 Charles Street 765 Walnut Street Lots 69 -82 Princeton Avenue 1113 Walnut Canyon Road 1123 Walnut Canyon Road 1293 Walnut Canyon Road 1331 Walnut Canyon Road 18 High Street 33 High Street 450 Charles Street 484 Charles Street 1063 Walnut Canyon Road 1073 Walnut Canyon Road 512 Los Angeles Avenue 780 Walnut Street 112 First Street 1083 Walnut Canyon Road 161 Second Street 450 High Street 124 First Street Nature Economic Development Economic Development Low & Moderate Housing Economic Development Economic Development Economic Development Economic Development Economic Development Economic Development Economic Development Economic Development Low & Moderate Housing Low & Moderate Housing Economic Development Economic Development Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Economic Development Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Economic Development Economic Development Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Economic Development Low & Moderate Housing Low & Moderate Housing Low & Moderate Housing Economic Development Economic Development Low & Moderate Housing Total Property Held for Resale/Development 21 Carrying Value $ 425,162 119,363 170,100 110,737 1,741,861 115,271 225,854 883,244 1,022,164 451,439 352,645 823,787 276,013 668,713 1,250,880 374,464 578,814 450,860 518,026 574,837 411,800 488,732 535,103 397,974 107,800 960,609 531,329 498,291 474,534 301,073 1,869,200 251,041 320,443 703,202 525,789 928,653 356,060 $ 20,795,867 it Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 5) INTERFUND ACTIVITY Interfund Transfers With the Agency Board approval, resources may be transferred from one fund to another. Transfers between individual funds during the fiscal year ended June 30, 2011 are presented below: TRANSFER FROM Low and Moderate Income Housing TRANSFER TO 1 1999 Tax Allocation Bonds $ 151,139 Total $ 151,139 The Low and Moderate Income Housing Fund transferred funds to the 1999 Tax Allocation Bonds Fund to pay the 20% debt service on the 1999 Tax Allocation Refunding Bonds. 6) DUE TO/DUE FROM THE CITY OF MOORPARK The City's General Fund has advanced $614,891, $73,968, $1,320 and $74,455 to the Low and Moderate Income Housing, MRA Operating, 2001 Bond Proceeds and 2006 Bond Proceeds funds respectively. These advances are expected to be paid back to the City's General Fund in 2011/12. 7) LONG -TERM DEBT Changes in long -term debt for the year ended June 30, 2011 are as follows: 22 D161 Balance Balance Due Beginning End Within of Year Additions Reductions of Year One Year 1999 Tax Allocation Bonds $ 5,495,000 $ $ (500,000) $ 4,995,000 $ 525,000 2001 Tax Allocation Bonds 11,520,000 (15,000) 11,505,000 15,000 2006 Tax Allocation Bonds 11,695,000 (40,000) 11,655,000 40,000 Discount on Bonds (287,437) 10,847 (276,590) (10,847) Totals $ 28,422,563 $ - $ (544,153) $ 27,878,410 $ 569,153 22 D161 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 7) LONG -TERM DEBT - Continued 1999 Tax Allocation Bonds In 1999, the Agency issued $9,860,000 aggregated principal amount of Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds (1999 Bonds). The purpose of the 1999 Bonds was to advance refund the Agency's previously issued $10,000,000 Moorpark Redevelopment Project, 1993 Tax Allocation Bonds (1993 Bonds). The purpose of the 1993 Bonds was to finance a portion of the costs of implementing the Redevelopment Plan, including low and moderate income housing projects. The 1999 Bonds bear interest at rates ranging from 3.05 percent to 4.875 percent per annum, payable semi - annually on April 1 and October 1 of each year, commencing on October 1, 1999 and are subject to mandatory sinking fund redemption commencing on October 1, 2009 and on each October 1 thereafter. The 1999 Bonds are payable from and secured by the tax revenues to be derived from the project area. The 1999 Bonds are secured by all property tax increment revenues, which are deposited in the 1999 Tax Allocation Bonds Debt Service Fund. Cash and investments in the custody of the fiscal agent are restricted by the bond resolutions for payment of principal and interest on the 1999 Bonds. In addition, the bond resolutions require retention of funds held by the fiscal agent prior to use for other than debt service. The Agency is in compliance with the covenants contained in debt indentures, which require the establishment of certain specific accounts for the 1999 Bonds. Debt service payments on the 1999 Bonds payable will be made from the 1999 Tax Allocation Bonds Debt Service Fund. Annual debt service requirements to maturity are as follows: Year Ending June 30, Tax Allocation Bonds Principal Interest Total 2012 $ 525,000 $ 230,709 $ 755,709 2013 550,000 204,506 754,506 2014 580,000 176,962 756,962 2015 605,000 148,078 753,078 2016 635,000 117,853 752,853 2017 665,000 86,166 751,166 2018 700,000 52,893 752,893 2019 735,000 17,915 752,915 Total $ 4,995,000 $ 1,035,082 $ 6,030,082 23 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 7) LONG -TERM DEBT - Continued 2001 Tax Allocation Bonds In December 2001, the Agency issued $11,625,000 of Tax Allocation Parity Bonds (2001 Bonds). The proceeds of the 2001 Bonds are to be used to fund redevelopment activities within the Moorpark Redevelopment Project area. Interest on the 2001 Bonds is payable semi - annually on April 1 and October 1, commencing April 1, 2002, at rates ranging from 2.85 percent to 5.13 percent per annum. The 2001 Bonds maturing October 2031, are subject to mandatory sinking fund redemption. The 2001 Bonds are payable from and secured by the tax revenues to be derived from the project area. The 2001 Bonds are secured by all property tax increment revenues, which are deposited in the 2001 Tax Allocation Bonds Debt Service Fund. Cash and investments in the custody of the fiscal agent are restricted by the bond resolutions for payment of principal and interest on the 2001 Bonds. In addition, the bond resolution requires retention of funds held by the fiscal agent prior to use for other than debt service. The Agency is in compliance with the covenants contained in debt indentures, which require the establishment of certain specific accounts for the 2001 Bonds. Debt service payments on the 2001 Bonds payable will be made from the 2001 Tax Allocation Bonds Debt Service Fund. Annual debt service requirements to maturity are as follows: Year Ending Tax Allocation Bonds June 30, Principal Interest Total 2012 $ 15,000 $ 587,098 $ 602,098 2013 20,000 586,319 606,319 2014 15,000 585,525 600,525 2015 20,000 584,711 604,711 2016 20,000 583,759 603,759 2017 -2021 1,370,000 2,841,265 4,211,265 2022 -2026 3,895,000 2,094,716 5,989,716 2027 -2031 4,995,000 961,579 5,956,579 2032 1,155,000 29,597 1,184,597 Total $ 11,505,000 $ 8,854,569 $ 20,359,569 24 47 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 7) LONG -TERM DEBT - Continued 2006 Tax Allocation Bonds In 2006, the Agency issued an $11,695,000 aggregated principal amount of Moorpark Redevelopment Project 2006 Tax Allocation Bonds (2006 Bonds). The purpose of the 2006 Bonds was to finance redevelopment activities within the Moorpark Redevelopment Project Area. The 2006 Bonds bear interest at rates ranging from 3.625 percent to 4.375 percent per annum, payable semi - annually on April 1 and October 1 of each year, commencing on April 1, 2007, and are subject to mandatory sinking fund redemption commencing on October 1, 2016, and on each October 1 thereafter. The 2006 Bonds are payable from and secured by the tax revenues to be derived from the project area. The 2006 Bonds are secured by all property tax increment revenue, which is recorded in the 2006 Tax Allocation Bonds Debt Service Fund. Cash and investments in the custody of the fiscal agent are restricted by the bond resolutions for payment of principal and interest on the 2006 Bonds. The Agency is in compliance with the covenants contained in the debt indenture, which require the establishment of certain specific accounts for the 2006 Bonds. Debt service payments on the 2006 Bonds payable will be made from the 2006 Tax Allocation Bonds Debt Service Fund. Annual debt service requirements to maturity are as follows: Year Ending June 30. 2012 2013 2014 2015 2016 2017 -2021 2022 -2026 2027 -2031 2032 -3036 2037 -2039 Total Tax Allocation Bonds Principal Interest $ 40,000 35,000 40,000 40,000 45,000 245,000 305,000 375,000 5,670,000 4,860,000 $ 11,655,000 25 $ 505,987 504,627 503,269 501,819 500,277 2,474,572 2,418,644 2,345,941 1,810,594 325,063 $ 11,890,793 Totnl $ 545,987 539,627 543,269 541,819 545,277 2,719,572 2,723,644 2,720,941 7,480,594 5,185,063 $ 23,545,793 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 8) SHORT TERM DEBT At the beginning of the fiscal year, the Agency borrowed $5,000,000 from the City for cash flow purposes throughout the year. The Agency repaid the balance before June 30, 2011. 9) AGREEMENTS WITH VARIOUS TAXING AGENCIES The Agency has entered into four (4) agreements for allocation and distribution of tax increment revenues: The first agreement is with the County of Ventura, County Library District, Ventura County Fire Protection District, and Ventura Flood Control District (collectively, the "County Taxing Entities "), which provides for the Agency to retain 100 percent of the County Taxing Entities' share (55.82 percent) of annual tax increment revenues up to $1,750,000. For annual tax increment revenue in excess of $1,750,000, the Agency shall distribute 55.82 percent of such revenues to the County on behalf of the County Taxing Entities. The County Taxing Entities have agreed to defer payments in the initial years of the Redevelopment Plan, and consequently, the parties agree that the County Taxing Entities may receive payments in any single fiscal year in excess of the amount of tax revenues the County Taxing Entities would otherwise be entitled to, but for the adoption of the Redevelopment Plan. With respect to the first paragraph, 4.2 percent of the County Taxing Entities' share is allocated to the County Library District (County Free Library System). The City has withdrawn from the County Free Library System and now operates the Moorpark Library. Pursuant to the Memorandum of Understanding governing the County Free Library System, upon withdrawal, a city is entitled to all property taxes allocated to library purposes from within the corporate boundaries of such city. The County has agreed that the City is entitled to the share of annual tax increment previously allocated to the County Library District under the first agreement. The second agreement is with the Moorpark Unified School District (MUSD), and states that the MUSD shall receive, after the Agency has satisfied debt service payments to bond or note holders or to the holder of any other instruments of Agency indebtedness (provided such indebtedness is not reasonably foreseeable to impair the Agency's obligation under the agreement), the MUSD's share (33.41 percent) of tax increment revenues generated by an annual 2 percent increase in assessed valuation, and beginning in fiscal year 1995/96, 14 percent of the MUSD's share of annual tax increment revenue. 26 • Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 9) AGREEMENTS WITH VARIOUS TAXING AGENCIES - Continued Per the agreement between the MUSD and the Agency, the distributions to the MUSD shall be expended for the following purposes at school sites in the incorporated boundaries of the City: 1. Telephone systems for new buildings; 2. Computer hardware and educational systems; 3. Land acquisition; 4. Books; and 5. School buildings and facilities and related capital improvements and modernization projects (collectively "public works "); such public works may include design, inspection and administration costs, but not MUSD overhead or salary/benefits for regular MUSD employees. The Agency may pre- approve other proposed expenditures that are submitted in writing by the MUSD. The third agreement is with the Ventura County Community College District (the VCCCD), and states that the VCCCD shall receive, after the Agency has satisfied debt service payments to bond or note holders or to the holders of any other instruments of agency indebtedness (provided such indebtedness is not reasonably foreseeable to impair the Agency's obligation under the agreement), the VCCCD's share (5.81 percent) of tax increment revenues generated by an annual 2 percent increase in assessed valuation, and beginning in fiscal year 1993/94, 14 percent of the VCCCD's share of annual tax increment revenue. An agreement, dated May 1, 2008, between the City and the VCCCD redirects the VCCCD's tax increment allocation. The Agency shall transfer to the City the VCCCD's tax increment allocations, up to One Million Dollars ($1,000,000), beginning with fiscal year 2006/07 and for every fiscal year thereafter through and including the 2024/25 fiscal year for the purpose of constructing certain public improvements near Moorpark College. The fourth agreement is with the Ventura County Superintendent of School Office (Superintendent), and states that the Superintendent shall receive its share (2.49 percent) of tax increment revenues generated by an annual 2 percent increase in assessed valuation. 10) LOW AND MODERATE INCOME HOUSING SET ASIDE The California Health and Safety Code Section 33334.2 requires a redevelopment agency to use at least 20 percent of tax increment revenues generated by a redevelopment project area to increase and improve the supply of low and moderate income housing in the community. Accordingly, the 27 50 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 10) LOW AND MODERATE INCOME HOUSING SET ASIDE Agency's unspent commitment for its low and moderate income housing program (if any) is reflected as restricted fund balance in the Agency's Low and Moderate Income Housing Special Revenue Fund. 11) RETIREMENT PLAN A) Plan Description Employees of the Agency are all City employees. The City contributes to the California Public Employees Retirement System (CaIPERS), a cost - sharing multiple - employer public employee defined benefit pension plan. Ca1PERS provides retirement and disability benefits, annual cost -of- living adjustments, and death benefits to plan members and beneficiaries. CaIPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of CaIPERS' annual financial report may be obtained from their executive office: 400 P Street, Sacramento, California 95814. B) Funding Policy Active plan members are required to contribute 7% of their covered salary. The City makes the contribution required of the City employees on their behalf. The City is also required to make an additional contribution at an actuarially determined rate. The required employer contribution rate for the fiscal year 2010/11 was 11.040 %. The contribution requirements for plan members are established by State statute and the employer contribution rate is established and may be amended by CaIPERS. The following represents the required contributions of the City for the past three fiscal years: Fiscal Required Year Contributions Percent Contributed 2008/09 $ 491,357 100% 2009/10 $ 566,161 100% 2010/11 $ 504,158 100% 28 51 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 12) RISK MANAGEMENT A) Description of Self - Insurance Pool Pursuant to Joint Powers Agreement The City (which includes the Agency) is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of over 100 California public entities and is organized under a joint powers agreement pursuant to California Government Code 6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self - insured losses, to purchase excess insurance or reinsurance, and to arrange for group - purchased insurance for property and other coverages. The Authority's pool began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine - member Executive Committee. B) Self Insurance Programs of the Authority Beginning coverage period 2010/2011, the Authority implemented a new funding and cost allocation formula, from retrospective funding model to a prospective funding model and increased the funding estimate goal to 75% confidence level. This change aims to improve the Authority's long -term financial viability by sufficiently pre- funding each period to cover expected claims and expenses. Under the new formula, the General Liability and Workers' Compensation annual contributions are separately calculated for public safety and non - public safety categories based on the member's exposure and experience factors. Exposure factor is determined by the annual reported payroll, with the minimum imputed payroll of $420,000 for the liability formula. While experience factors are defined by loss layer weighting ratio equivalent to 50% on the agency's first layer losses ($0 to $30,000 for liability and $0 to $50,000 for worker's compensation) and 50% on its second layer of losses ($30,000 to $750,000 for liability and $50,000 to $100,000 for worker's compensation). A credibility weighting component, ranging from 80% to 20 %, is applied to determine the portion of the member's cost attributable to its own loss experience relative to its payroll size. The annual contribution is subject to 0 % -35% volatility band, so that no member will pay have an increase of more than 35% or pay less than prior year amount. General Liability: Costs of claims above $5,000,000 are currently paid by reinsurance. The Protection for each member is $50,000,000 per occurrence and $50,000,000 annual aggregate. Workers Compensation: Members retain the first $50,000 of each claim. Losses up to $2,000,000 are pooled by members and excess coverage is purchased by statutory limits. Administrative expenses are paid from the Authority's investment earnings. 29 52 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 12) RISK MANAGEMENT - Continued B) Self Insurance Programs of the Authority - Continued During the year, the City took advantage of the Authority's incentive program by paying off the $503,501 aggregate retrospective balance due on the liability pool and was able to receive a 6 percent or $30,210 discount. The Authority owes the City $181,621 from the Workers' Compensation pool and the City received 25 percent or $45,405 refund as a reduction on the 2010/2011 annual contribution. C) Purchased Insurance The City participates in the all -risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City property is currently insured according to a schedule of covered property submitted by the City to the Authority. Total all -risk property insurance coverage is $37,087,004. There is a $5,000 per loss deductible. Premiums for the coverage are paid annually and are not subject to retroactive adjustments. D) Earthquake and Flood Insurance The City purchased earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. The City property currently has earthquake protection in the amount of $33,254,981. There is a deductible of 5 percent of the value with a minimum deduction of $100,000. Premiums for the coverage are paid annually and are not subject to retroactive adjustments. E) Adequacy of Protection During the past three fiscal (claims) years none of the above program of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year. F) Claims and Judgments The City accounts for uninsured, material claims and judgments and associated legal and administrative costs when it is probable that the liability claim has been incurred and the amount of the loss can be reasonably estimated. Included therein are claims incurred but not reported, which consists of (a) known loss events expected to be presented as claims later, (b) unknown 30 53 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 12) RISK MANAGEMENT - Continued F) Claims and Judgments - Continued loss events that are expected to become claims, and (c) expected future development on claims already reported. This is based upon historical actual results that have established a reliable pattern supplemented by specific information about current matters. Small dollar claims and judgments are recorded as expenditures when paid. 13) CONTINGENCIES On June 29, 2011, the Governor of the State of California signed Assembly Bills X 1 26 and 27 as part of the State's budget package. Assembly Bill X1 26 requires each California redevelopment agency to suspend (effective July 1, 2011) nearly all activities except to implement existing contracts, meet already - incurred obligations, preserve its assets and prepare for the impending dissolution of the agency. Assembly Bill X1 27 provides a means for redevelopment agencies to continue to exist and operate by means of a Voluntary Alternative Redevelopment Program. Under this program, each local government would adopt an ordinance agreeing to make certain payments to the County Auditor Controller in fiscal year 2011 -12 and annual payments each fiscal year thereafter. Assembly Bill X1 26 indicates that the city, special district or county "may use any available funds not otherwise obligated for other uses" to make this payment. The City of Moorpark (City) and the Agency intend to use available monies of its redevelopment agency for this purpose. The amounts to be paid after fiscal year 2012 -13 have yet to be determined by the state legislature. Assembly Bill X1 26 directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by Assembly Bill X1 26. In the event that Assembly Bill X1 26 is upheld, the receivable recognized by funds of the City that had previously loaned or advanced funds to the redevelopment agency would become uncollectible with a loss recognized to the City. Additionally, the City would be impacted by the elimination of reimbursements previously paid to the City by the redevelopment agency for shared administrative services. 31 54 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 13) CONTINGENCIES - Continued The League of California Cities and the California Redevelopment Association (CRA) filed a lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the California Supreme Court to overturn Assembly Bills X1 26 and 27 on the grounds that they violate the California Constitution. On August 11, 2011, the California Supreme Court issued a stay of all of Assembly Bill X1 27 and most of Assembly Bill XI 26. The California Supreme Court stated in its order that "the briefing schedule is designed to facilitate oral argument as early as possible in 2011, and a decision before January 15, 2012." A second order issued by the California Supreme Court on August 17, 2011 indicated that certain provisions of Assembly Bills X1 26 and 27 were still in effect and not affected by its previous stay, including requirements to file an appeal of the determination of the community remittance payment by August 15, the requirement to adopt an Enforceable Obligations Payment Schedule ( "EOPS ") by August 29, 2011, and the requirement to prepare a preliminary draft of the initial Recognized Obligation Payment Schedule ( "ROPS ") by September 30, 2011. Because the stay provided by Assembly Bill XI 26 only affects enforcement, each agency must adopt an Enforceable Obligation Payment Schedule and draft Recognized Obligation Payment Schedule prior to September 30, as required by the statute. Enforceable obligations include bonds, loans and payments required by the federal or State government; legally enforceable payments required in connection with agency employees such as pension payments and unemployment payments judgments or settlements; legally binding and enforceable agreements or contracts; and contracts or agreements necessary for the continued administration or operation of the agency that are permitted for purposes set forth in AB X1 26. On September 7 and 14, 2011, City of Moorpark Ordinance No. 406 and No. 407 were adopted indicating that the City will comply with the Voluntary Alternative Redevelopment Program in order to permit the continued existence and operation of the Agency, in the event Assembly Bills X1 26 and/or 27 are upheld as constitutional. The initial payment by the City is estimated to be $1,606,569 with one half due on January 15, 2012 and the other half due May 15, 2012. Thereafter, an estimated $381,000. will be due annually. The amounts to be paid after fiscal year 2012 -13 have yet to be determined by the State Legislature. The semi - annual payments will be due on January 15 and May 15 of each year and would increase or decrease with changes in tax increment. Additionally, an increased amount would be due to schools if any "new debt" is incurred. Assembly Bill XI 27 allows a one -year reprieve on the agency's obligation to contribute 20% of tax increment to the low - and- moderate - income housing fund so as to permit the Agency to assemble sufficient funds to make its initial payments. Failure to make these payments would require agencies to be terminated under the provisions of AB X1 26. 32 55 Moorpark Redevelopment Agency Notes to Financial Statements Year Ended June 30, 2011 13) CONTINGENCIES - Continued Management believes that the Agency will have sufficient funds to pay its obligations as they become due during the fiscal year ending June 30, 2012 and for a period shortly thereafter. The nature and extent of the operation of redevelopment agencies in the State of California beyond that time frame are dependent upon the outcome of litigation surrounding the actions of the State. In the event that Assembly Bills X1 26 and /or 27 are specifically found by the courts to be unconstitutional, there is a possibility that future legislative acts may create new challenges to the ability of redevelopment agencies in the State of California to continue in view of the California State Legislature's declared intent to eliminate redevelopment agencies and to reduce their funding. There are certain legal actions currently pending against the Agency arising in the normal course of the Agency's operations. In the opinion of management and the Agency Attorney, the ultimate resolution of such actions is not expected to have a significant effect upon the financial statements of the Agency. 14) SUBSEQUENT EVENTS Subsequent to June 30, 2011, the City and Mission Bell Partners entered into a settlement agreement whereby Mission Bell Partners would give $900,000 to the City in exchange for the total discharge of note no. 7. This agreement was consummated in October 2011. Also, see note 3 of the financial statements. Subsequent to June 30, 2011, the City exercised its option to purchase 39 parcels of land from the Agency's land held for resale /development, including properties owned by the Low and Moderate Income Housing Fund. These purchases were completed in August 2011 by recording the deeds of trusts with the County. 33 6Y *1 REQUIRED SUPPLEMENTARY INFORMATION 57 Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances Low and Moderate Income Housing Special Revenue Fund Budget and Actual Year Ended June 30, 2011 Revenues Taxes Use of Money and Property Intergovermental Other Revenues Total Revenues Expenditures Current: Public Services Administration Community Development Capital Outlay Debt Service: Principal Interest on Bonds Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources (Uses) Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balance Budgeted Amounts Original Final Variances with Actual Final Budget Amounts Positive (Negative) $ 1,407,000 $ 1,447,000 $ 1,351,192 31,000 31,000 36,936 1,176,500 356,000 356,409 1,438,000 $ (95,808) 5,936 1,176,500 409 1,834,000 2,921,037 1,087,037 345,833 363,496 363,064 432 Fund Balance, End of Year $ 763,107 1,896,419 (1,133,312) 45,383 - 16,000 16,000 16,000 20,000 20,000 20,642 (642) 427,216 1,162,603 2,280,125 (1,117,522) 1,010,784 671,397 640,912 (30,485) (151,139) (151,139) (151,139) (151,139) (151,139) (151,139) 859,645 520,258 489,773 (30,485) Fund Balance, Beginning of Year 7,756,628 7,756,628 7,756,628 - Fund Balance, End of Year $ 8,616,273 $ 8,276,886 $ 8,246,401 $ (30,485) 34 Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances MRA Operating Special Revenue Fund Budget and Actual Year Ended June 30, 2011 Revenues Taxes $ Fines and Forfeitures Use of Money and Property Other Revenue Total Revenues Expenditures Current: Public Services Pass -Thru Agreements ERAF Payment to State Administration Community Development Capital Outlay Debt Service: Principal Interest Budgeted Amounts Original Final Variances with Actual Final Budget Amounts Positive (Negative) 3,879,000 $ 3,994,000 $ 3,651,369 $ (342,631) 4,490 4,490 93,500 93,500 107,415 13,915 57,000 92,000 120,433 28,433 4,029,500 4,179,500 3,883,707 (295,793) 3,200,000 396,000 961,385 330,360 864,136 3,200,000 396,000 974,677 332,160 815,659 2,942,683 396,345 919,143 702,629 257,317 (345) 55,534 (370,469) 815,659 100,000 (100,000) Total Expenditures 5,751,881 5,718,496 5,060,800 Excess (Deficiency) of Revenues over Expenditures (1,722,381) (1,538,996) (1,177,093) 657,696 361,903 Other Financing Sources (Uses) Transfers In - Transfers Out (11,000) (11,000) 11,000 Total Other Financing Sources (Uses) (11,000) (11,000) - 11,000 Net Change in Fund Balance (1,733,381) (1,549,996) (1,177,093) 372,903 Fund Balance, Beginning of Year Fund Balance, End of Year 8,182,387 8,182,387 8,182,387 - $ 6,449,006 $ 6,632,391 $ 7,005,294 $ 372,903 35 59 Moorpark Redevelopment Agency Notes to Required Supplementary Information Year Ended June 30, 2011 BUDGETS AND BUDGETARY ACCOUNTING The Agency adopts an annual budget using the modified- accrual basis of accounting, consistent with accounting principles generally accepted in the United States of America. Budgetary controls are established at the department level. At year end, unexpended appropriations lapse. The Agency Executive Director may transfer budget appropriations between major categories within a fund in conformance with the policies set by the Agency Board. Any major changes or amendments must be approved by the Agency Board. The adopted budget and budget amendments made during the year are reflected in the accompanying financial statements. A budgetary comparison schedule is presented as part of the required supplementary information for the major special revenue funds as provided for by GASB Statement No. 34. The budgetary comparison schedules for the remaining major funds are presented to aid in additional analysis and are not a required part of the basic financial statements. The Low and Moderate Income Housing fund had $1,117,522 excess of expenditures over appropriations. 36 I SUPPLEMENTARY INFORMATION 61 Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances 1999 Tax Allocation Bonds Debt Service Fund Budget and Actual Year Ended June 30, 2011 37 62 Variances with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes $ 604,555 $ 604,555 $ 603,219 $ (1,336) Use of Money and Property 40,000 40,000 32,668 (7,332) Total Revenues 644,555 644,555 635,887 (8,668) Expenditures Current: Public Services Debt Service: Principal 500,000 500,000 500,000 Interest 255,694 255,694 255,694 - Total Expenditures 755,694 755,694 755,694 - Excess (Deficiency) of Revenues over Expenditures (111,139) (111,139) (119,807) (8,668) Other Financing Sources (Uses) Transfers In 151,139 151,139 151,139 - Transfers Out - Total Other Financing Sources (Uses) 151,139 151,139 151,139 Net Change in Fund Balance 40,000 40,000 31,332 (8,668) Fund Balance, Beginning of Year 1,065,302 1,065,302 1,065,302 Fund Balance, End of Year $ 1,1052302 $ 1,105,302 $ 1,096,634 $ (8,668) 37 62 Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances 2001 Tax Allocation Bonds Debt Service Fund Budget and Actual Year Ended June 30, 2011 38 63 Variances with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes $ 602,743 $ 602,743 $ 602,743 $ Use of Money and Property - Total Revenues 602,743 602,743 602,743 - Expenditures Current: Public Services - Debt Service: Principal 15,000 15,000 15,000 - Interest 587,743 587,743 587,743 - Total Expenditures 602,743 602,743 602,743 - Excess (Deficiency) of Revenues over Expenditures 602,743 - - - Other Financing Sources (Uses) Transfers In - Transfers Out - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balance 602,743 - - - Fund Balance, Beginning of Year 584,675 584,675 584,675 - Fund Balance, End of Year $ 1,187,418 $ 584,675 $ 584,675 $ - 38 63 Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances 2006 Tax Allocation Bonds Debt Service Fund Budget and Actual Year Ended June 30, 2011 Budgeted Amounts Original Final Revenues Variances with Actual Final Budget Amounts Positive (Negative) Taxes $ 547,437 $ 547,437 $ 547,437 $ Use of Money and Property - Total Revenues 547,437 547,437 547,437 - Expenditures Current: Public Services - Debt Service: Principal 40,000 40,000 40,000 - Interest 507,437 507,437 507,437 - Total Expenditures 547,437 547,437 547,437 - Excess (Deficiency) of Revenues over Expenditures - - - - Other Financing Sources (Uses) Transfers In - Transfers Out - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balance - - - - Fund Balance, Beginning of Year 528,948 528,948 528,948 - Fund Balance, End of Year $ 528,948 $ 528,948 $ 528,948 $ - 39 M Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances 2001 Bond Proceeds Capital Projects Fund Budget and Actual Year Ended June 30, 2011 Budgeted Amounts Original Final Revenues Use of Money and Property $ $ Other Revenue Total Revenues Expenditures Current: Public Services: Administration Capital Outlay Total Expenditures Excess (Deficiency) of Revenues over Expenditures Other Financing Sources (Uses) Transfers In Transfers Out Variances with Actual Final Budget Amounts Positive (Negative) $ 3,713 3,713 $ 3,713 3.713 1,320 (1,320) 407,475 551,922 491,943 59,979 407,475 551,922 493,263 58,659 (407,475) (551,922) (489,550) 62,372 (42,000) (42,000) - 42,000 Total Other Financing Sources (Uses) (42,000) (42,000) - 42,000 Net Change in Fund Balance (449,475) (593,922) (489,550) 104,372 Fund Balance, Beginning of Year 6,094,667 6,094,667 6,094,667 - Fund Balance, End of Year $ 5,645,192 $ 5,500,745 $ 5,605,117 $ 104,372 40 65 Moorpark Redevelopment Agency Schedule of Revenues, Expenditures, and Changes in Fund Balances 2006 Bond Proceeds Capital Projects Fund Budget and Actual Year Ended June 30, 2011 41 .. Variances with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Use of Money and Property $ 70,000 $ 70,000 $ 46,506 $ (23,494) Total Revenues 70,000 70,000 46,506 (23,494) Expenditures Current: Public Services Administration - Capital Outlay 9,198,126 11,905,796 2,074,802 9,830,994 Total Expenditures 9,198,126 11,905,796 2,074,802 9,830,994 Excess (Deficiency) of Revenues over Expenditures (9,128,126) (11,835,796) (2,028,296) 9,807,500 Other Financing Sources (Uses) Transfers In - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balance (9,128,126) (11,835,796) (2,028,296) 9,807,500 Fund Balance, Beginning of Year 9,679,812 9,679,812 9,679,812 - Fund Balance, End of Year $ 551,686 $ (2,155,984) $ 7,651,516 $ 9,807,500 41 .. Moorpark Redevelopment Agency Computation of Low and Moderate Housing Excess /Surplus Funds Opening Fund Balance Less Unavailable Amounts: Low and Moderate Low and Moderate Income Housing Funds Income Housing Funds July 1, 2010 July 1, 2011 $ 7,756,628 Unspent Bond Proceeds $ - $ - Encumbrances [Section 33334.12 (g)(2)] - - Loans Receivable - - Land Held for Resale (7,887,425) (8,302,304) (7,887,425) Available Low and Moderate Income Housing Funds $ (130,797) Limitation (greater of $1,000,000 or four years set - aside) Set -Aside for last four years: 2010 -11 $ - $ 1,351,192 2009 -10 1,372,988 1,372,988 2008 -09 1,410,886 1,410,886 2007 -08 1,377,416 1,377,416 2006 -07 1,269,538 - Total $ 5,430,828 $ 5,512,482 Base Limitation $ 1,000,000 $ 1,000,000 Greater amount Computed Excess /Surplus 42 $ 5,430,828 NONE $ 8,246,401 (8,302,304) $ (55,903) $ 5,512,482 NONE 67 TEAMAN, RAMIREZ & SMFH, INC. CEAiIFIEO P119LIC ACC 0 NTAN T Independent Auditors' Report on Compliance and Internal Control Over Compliance Based on an Audit of the Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Chair and Members of the Agency Moorpark Redevelopment Agency Moorpark, California Compliance We have audited the Moorpark Redevelopment Agency's (the "Agency ") compliance with the types of compliance requirements described in the Guidelines for Compliance Audits of California Redevelopment Agencies, June 2011, issued by the State Controller, applicable to the Agency's activities for the year ended June 30, 2011. Compliance with the requirements referred to above is the responsibility of the Agency's management. Our responsibility is to express an opinion on the Agency's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Guidelines for Compliance Audits of California Redevelopment Agencies, June 2011, issued by the State Controller, and as interpreted in the Auditing Procedures for Accomplishing Compliance Audits of California Redevelopment Agencies, August 2011, issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. Those standards and the State's Guidelines for Compliance Audits of California Redevelopment Agencies require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a material effect on the Agency occurred. An audit includes examining, on a test basis, evidence about the Agency's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Agency's compliance with those requirements. In our opinion, the Agency complied, in all material respects, with the compliance requirements referred to above that are applicable for the year ended June 30, 2011. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with the Guidelines for Compliance Audits of California Redevelopment Agencies, June 2011, and which are described in the accompanying Schedule of Findings and Responses, as items 2011 -1 and 2011 -2. 43 Richard A. Teaman, CPA ® Greg W. Fankhanel, CPA 6 David M. Ramirez, CPA ® Javier H. Carrillo, CPA 4201 Brockton Ave. Suite 100, Riverside CA 92501 ® 951.27d_9500 e 95 i _274.7828 Fax m www.irscpas.com IN • i - ws °� Internal Control Over Compliance Management of the Agency is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit, we considered the Agency's internal control over compliance to determine the auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Agency's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over compliance, described in the accompanying Schedule of Findings and Responses as items 2011 -1 and 2011 -2, that we consider to be significant deficiencies. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. The Agency's responses to the findings identified in our audit are described in the accompanying Schedule of Findings and Responses. We did not audit the Agency's responses, and accordingly, we express no opinion on the responses. This report is intended solely for the information and use of management, the Board of Directors, others within the Agency, the State Controller's Office, Division of Accounting and Reporting and is not intended to be and should not be used by anyone other than these specified parties. December 6, 2011 44 Ell] Moorpark Redevelopment Agency Schedule of Findings and Responses Year Ended June 30, 2011 2011 -1 Filing of the Fiscal Year 2010 Annual Report Health and Safety Code Section 33080.1 requires each redevelopment agency to file an annual report with its legislative body within six months of the end of the Agency's fiscal year. The annual report should include the following: a) Financial Statement Audit; b) Fiscal Statement for the previous fiscal year, which includes the following: i. The amount of outstanding indebtedness of the agency and each project area. ii. The amount of tax increment property tax revenue generated in the agency and in each project area. iii. The amount of tax increment revenues paid to, or spent on behalf of, a taxing agency, other than a school or community college district, pursuant to subdivision (b) of Section 33401 or Section 33676. Moneys expended on behalf of a taxing agency shall be itemized per each individual capital improvement. iv. The financial transactions report required pursuant to Section 53891 of the Government Code. v. The amount allocated to school or community college districts pursuant to each of the following provisions: (1) Section 33401; (2) Section 33445; (3) Section 33445.5; (4) paragraph (2) of subdivision (a) of Section 33676; and (5) Section 33681. vi. The amount of existing indebtedness, as defined in Section 33682, and the total amount of payments required to be paid on existing indebtedness for that fiscal year. vii. Any other financial information which the agency believes useful to describe its programs. c) A description of the Agency's activities in the previous fiscal year affecting housing and displacement; d) A description of the Agency's progress, including specific actions and expenditures, in alleviating blight in the previous fiscal year; e) A list of, and status report on all loans $50,000 or more, that in the previous fiscal year were in default or not in compliance with the terms of the loan; 45 70 Moorpark Redevelopment Agency Schedule of Findings and Responses Year Ended June 30, 2011 2011 -1 Filing of the Fiscal Year 2010 Annual Report f) A description of the total number and nature of the properties that the Agency owns and those properties the Agency has acquired in the previous fiscal year; g) A list of the fiscal years that the Agency expects specified time limits of the plans to expire; h) Any Other Information that the Agency believes useful to explain its programs, including, but not limited to, the number of jobs created and lost in the previous fiscal year as a result of its activities. Except for item a) above, there was no indication that the Agency submitted the required reports to the Board of Directors, within the required time period, for the year ended June 30, 2010. Recommendation: We recommend that the Agency prepare and submit the required annual report, as described above, to the Board of Directors in the required time frame for the 2010 -11 fiscal year. In addition, we recommend the Agency establish documented procedures to ensure compliance with Section 33080.1 of the Health and Safety Code. Response: Staff believes we met the intent of the law but in order to comply with the State Controller's letter of instruction staff has expanded the Agency agenda report regarding the annual financial reports to fulfill all of the requirements of this section of the HSC. The Agency shall be in compliance by the submission of the Agency agenda report and the final copy of the Moorpark Redevelopment Agency Annual Financial Report to the Agency Board. 2011 -2 Preparation of Annual Budget Health and Safety Code Section 33606 requires each redevelopment . agency to adopt an annual budget containing all of the following specific information, including all activities to be financed by the Low and Moderate Income Housing Fund: a) The proposed expenditures of the agency. b) The proposed indebtedness to be incurred by the agency. 46 71 Moorpark Redevelopment Agency Schedule of Findings and Responses Year Ended June 30, 2011 2011 -2 Preparation of Annual Budget c) The anticipated revenues of the agency. d) The work program for the coming year, including goals. e) An examination of the previous year's achievements and a comparison of the achievements with the goals of the previous year's work program. The annual budget may be amended from time to time as determined by the Agency. All expenditures and indebtedness of the Agency shall be in conformity with the adopted or amended budget (Health and Safety Code section 33606). Although the Agency's adopted budget for the 2010 -11 fiscal year included items a) through c) above, it did not appear to include the information required in items d. and e. Recommendation: We recommend that the Agency include the required information, as described above, in its annual budget and/or amend the 2011 -12 budget to include such information. In addition, we recommend the agency establish documented procedures to ensure compliance with Section 33606 of the Health and Safety Code. Response: The information required in Finding 2011 -2 has been previously transmitted to the Agency Board through the adoption of the Annual Goals and Objectives and the allocation of funding to activities in the Low and Moderate Income Housing Fund. However, the housing activities listed in the budget were not specifically called a work program or plan and the Annual Goals and Objectives were not included with the adoption of the annual budget of the Agency. The Agency shall be in compliance by adopting a resolution amending the FY 2011 -12 Operating and Capital Improvement Budget to include the Work Plan. 47 72 ITEM 5.C. CITY OF MOORPARK, CALIFORNIA Redevelopment Agency Meeting MOORPARK REDEVELOPMENT AGENCY- - - -_. _-='�"a °�a AGENDA REPORT ACTION -ale. 4 BY: , TO: Honorable Agency Board FROM: David C. Moe II, Redevelopment Manager X BY: Ky Spangler, Special Projects Consultant DATE: December 14, 2011 (Agency Meeting of 1/4/12) SUBJECT: Consider Authorization of Recordation of the Notice of Completion for Demolition of Structures at 1083 Walnut Canyon Road and 112 First Street and Authorization for Release of Project Bonds in Accordance with Contract Provisions BACKGROUND On April 20, 2011, the Redevelopment Agency of the City of Moorpark ( "Agency ") awarded a contract for demolition of Agency -owned structures located at 1083 Walnut Canyon Road and 112 First Street to Flores- Sierra Contractors, Inc. in the amount of $16,094 plus a 10% contingency for an overall budget of $17,703.40. While demolition activities were ongoing, ownership of these properties was transferred to the City of Moorpark. When demolition took place, below grade basement -like areas were uncovered at both properties. Additionally, the original bid specification did not contemplate removal of the foundation walls at either site. So that the sites were left in a flat, safe condition, a second Agreement was issued to provide for filling the below grade areas and removal of protruding foundation walls. Flores- Sierra Contractors, Inc. has now completed its work and staff is requesting that the Agency authorize the recordation of the Notice of Completion. DISCUSSION The work began Monday, August 8, 2011. Demolition was completed on Friday, September 16, 2011 and punch list items were fully completed by December 1, 2011. With the Agency's authorization to record the Notice of Completion, the City Clerk's office will be authorized to release the project bonds in accordance with contract provisions as follows: Material Suppliers and Laborers Bond No. BDC12384 shall be released six (6) months after the recordation of the Notice of Completion. Faithful Performance Bond No. BDC12384 shall be released one (1) year after the recordation of the Notice of Completion. 73 Honorable Agency Board January 4, 2012 Page 2 FISCAL IMPACT None. STAFF RECOMMENDATION Authorize the City Clerk to file the Notice of Completion and release the project bonds in accordance with the contract provisions. Attachment 1: Notice of Completion 74 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO r NAME City of Moorpark STREET 799 Moorpark Avenue ADDRESS CITY Moorpark, CA 93021 STATE ZIP Attn: City Clerk L No Fee Required (Govt Code Sec 6103 & 27383) yu.c, , kur: rna acr•nanrn—, IISF NOTICE OF COMPLETION Notice pursuant to Civil Code Section 3093, must be filed within 10 days after completion. (See reverse side for complete requirements.) Notice is hereby given that: 1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described: 2. The fun name of the owner is Redevelopment Agency of the City of Moorpark 3. The full address of the owner is /Ry MoorparK Ave 4. The nature of the interest or estate of the owner is: In fee. (If other than Fee, strike 'In fee' and insert, for example, 'purchaser under contract of purchase; or 'Lessee') 5. The full names and full addresses of all persons, if any, who hold title with the undersigned as joint tenants or as tenants in common are: NAMES ADDRESSES 6. The full names and full addresses of the predecessors in interest of the undersigned, if the property was transferred subsequent to the commencement of the work or improvements herein referred to: NAMES ADDRESSES 7. A work of improvement on the property hereinafter described was completed on January 4, 2012 The work done was: 1083 Walnut Canyon Road and 112 First Street Moorpark CA 8. The names of the contractor, if any, for such work of improvement was Flores- Sierra Contractors, Inc. July 5 2011 (If no contractor for work of improvement as a whole, insert 'None') (Date of Contract) 9. The property on which said work of improvement was completed is in the City of Moorpark County of Ventura State of CA , and is described as follows: demolition of structures 10. The street address of said property is 1083 Walnut Canyon Road and 112 First Street Ilf no street address has been officially assigned, insert 'none".) Dated (Signature of Owner or corporate officer of Owner named in paragraph 2, or his agent) Steven Kueny, txecutive ulrectol VERIFICATION 1, the undersigned, say: I am the Fvarl ltiva flirartof the declarant of the foregoing Notice of Completion; fpresi $ of, Manager of, partner of, Owner of, etc.) I have read said Notice of Completion and know the contents thereof; the same is true to my own knowledge. I declare under penalty of per)'ury that the foregoing is true and correct. Executed on , 2012 at Moorpark , California the contents Before you use this form, fig in all blanks, and make whatever changes are if you doubt and necessary syouryouti purpose se and us Consults makes WOLCOTTS FORM 1 114 - {price class 38) if you doubt the form's fitness for your purpose and use. Wdcotts makes �pUr1l 1p�j NOTICE OF COMPLETION - Rev. 7 -99 no representation or warranty, express or implied, with respect to the 01999 WOLCOTTS FORMS, INC. merchantability or fitness of this form for an intended use or purpose. 67775 3911 5 75