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Home My WebLink AboutAG RPTS 2009 0218 RDA REGMEMT {� ESTABLISHED �c �k MARCH A1NIr IFO fin' OF Ma Resolution No. 2009 -206 MOORPARK REDEVELOPMENT AGENCY REGULAR MEETING AGENDA WEDNESDAY, FEBRUARY 18, 2009 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 February 4, 2009. Staff Recommendation: Approve the minutes. B. Consider Resolution Authorizing Mid -Year Amendments to 2008/2009 Fiscal Year Budget. Staff Recommendation: Adopt Resolution No. 2009- , amending the FY 2008/09 budget as noted in Exhibits A & B of the resolution. ROLL CALL VOTE REQUIRED (Staff: Ron Ahlers) C. Consider Component Unit Financial Statements for the Fiscal Year Ended June 30. 2008 for the Redevelopment Aaencv of the Citv of Moorpark. Staff Recommendation: Accept the Component Unit Financial Statements and receive and file this report. ROLL CALL VOTE REQUIRED (Staff: Ron Ahlers) D. Consider Authorizing the Executive Director to Write a Letter to the County- Auditor Reaardina Pavment into the Educational Revenue Auamentation Fund (ERAF) for Fiscal Year 2008 -09. Staff Recommendation: Authorize the Executive Director to send a letter to the Ventura County- Auditor advising of our intention to pay ERAF with redevelopment tax increment funds. (Staff: Ron Ahlers) Redevelopment Agency Agenda February 18, 2009 Page 2 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: 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.moorpark.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 bythe 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. 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 II). Redevelopment Agency Agenda February 18, 2009 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 Assistant City Clerk of the City of Moorpark and that a notice for a Regular Meeting of the Moorpark Redevelopment Agency to be held Wednesday, February 18, 2009, at 7:00 p.m. in the Council Chambers of the Moorpark Community Center, 799 Moorpark Avenue, Moorpark, California, was posted on February 13, 2009, at a conspicuous place at the Moorpark Community Center, 799 Moorpark Avenue, Moorpark, California. declare under penalty of perjury that the foregoing is true and correct. Executed on February 13, 2009. Maureen Benson, Assistant City Clerk Me rF--M- s.A. ES OF THE REDEVELOPMENT AGENCY Moorpark, California -- Februa ry 4, 2009 A Regular Meeting of the Redevelopment Agency of the City of Moorpark was held on February 4, 2009, 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 7:12 p.m. 2. ROLL CALL: Present: Agency Members Lowenberg, Mikos, Van Dam, and Chair Parvin. Absent: Agency Member Millhouse. Staff Present: Steven Kueny, Executive Director; Hugh Riley, Assistant Executive Director; Yugal Lail, City Engineer /Public Works Director; and Deborah Traffenstedt, Agency Secretary. 3. PUBLIC COMMENT: None. 4. REORDERING OF, AND ADDITIONS TO, THE AGENDA: None. 5. CONSENT CALENDAR: (ROLL CALL VOTE REQUIRED) MOTION: Agency Member Mikos moved and Agency Member Van Dam seconded a motion to approve the Consent Calendar. The motion carried by roll call vote 4 -0, Agency Member Millhouse absent. A. Consider Minutes of Special Meeting of January 21, 2009. Staff Recommendation: Approve the minutes. B. Consider Minutes of Regular Meeting of January 21, 2009. Staff Recommendation: Approve the minutes. C. Consider Award of Contract for the Manufacture and Delivery of Walnut Canvon Storm Drain Reinforced Concrete Piges /Box (Project 5052). Staff Recommendation: 1) Award contract to Rialto Concrete Products, Inc, and authorize the Executive Director to execute the construction contract A�, (J1�� Minutes of the Redevelopment Agency Moorpark, California Page 2 Date, 2009 in the amount of $202,415.00 for the subject project; 2) Authorize the Executive Director to amend the construction contract for project contingencies in an amount not -to- exceed $25,000 if and when the need arises for extra work and services; and 3) Authorize the Executive Director to award a consultant agreement for inspection services in an amount not- to- exceed $10,000. 6. CLOSED SESSION: None was held. 7. ADJOURNMENT: Chair Parvin adjourned the meeting at 7:13 p.m. Janice S. Parvin, Chair ATTEST: Deborah S. Traffenstedt Agency Secretary )"02 ITEM 5.3. MWANNIFEWROMW MOORPARK REDEVELOPMENT AGENCY ao09v ..._....� AGENDA REPORT TO: Honorable Board of Directors FROM: Ron Ahlers, Finance Director Prepared by: Deborah BurdorF, Accountant I� DATE: January 12, 2009 (Agency meeting of February 18, 2009) SUBJECT: Consider Resolution Authorizing Mid -Year Amendments to 2008/2009 Fiscal Year Budget BACKGROUND The Board of Directors adopted a budget for fiscal year 2008/2009 on July 2, 2008, and has amended it several times for various projects and programs. After a review of the current budget status, and in anticipation of developing a budget recommendation for the new fiscal year, staff compiled additional recommended budget amendments for the Board's consideration. DISCUSSION The attached resolution makes several revenue and expenditure adjustments to the currently adopted 2008/2009 fiscal year budget, with an explanation for each item contained in Exhibit "B ". Revenue adjustments are increases due to changes in revenue projections from the original budget. Expenditure adjustments are critical items that were not previously included in the budget or requests for increases in funds based on the MRA's activities. These increases will be covered by additional projected revenues or available reserves. As shown in Exhibit "B ", the MRA Area 1 Operating Fund (2902) revenues show an increase of $22,793 resulting from unbudgeted ticket sales at the High Street Arts Center. The Debt Service Fund revenues show an increase of $1,000,000 for the tax increment settlement payment received from the County of Ventura in December 2008. Expenditure increases in the MRA/Low Mod Housing Fund totaled $5,166 due to a debt service interest payment that exceeded collected funds. The Redevelopment Agency Fund has an expenditure increase of $395,977 for the ERAF {Educational Revenue Augmentation Fund) payment they will be required to make by May 10th to the County of Ventura. The ERAF payment is part of the solution to solving the State of California's budget crisis. While this is being portrayed as a one -time payment in this year's budget, re0(?U3 Honorable Board of Directors January 12, 2009 Page 2 there are no protections in the law to prevent the State from further raids on redevelopment agency monies. FISCAL IMPACT Exhibit "A" summarizes the projected changes to revenues and expenditures and the net fiscal impact by fund. Overall, the net increase in revenue is $1,022,793 with a net increase in expenditures of $401,143 for all MRA funds. STAFF RECOMMENDATION (Roll Call Vote Required) Adopt Resolution No. 2009- amending the fiscal year 2008/2009 budget as noted in Exhibits "A & B" to the attached resolution. 110004 RESOLUTION NO. 2009- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK, CALIFORNIA, AUTHORIZING AN AMENDMENT TO THE FISCAL YEAR 2008/2009 ADOPTED OPERATING AND CAPITAL IMPROVEMENTS BUDGET WHEREAS, on July 2, 2008, the Moorpark Redevelopment Agency adopted the Operating and Capital Improvements Budget for fiscal year 2008/2009; and WHEREAS, certain additions and adjustments to the budget are proposed to allow for effective service delivery for the balance of the fiscal year; and WHEREAS, the Board of Directors of the Moorpark Redevelopment Agency now wishes to amend the 2008/2009 fiscal year budget as noted in Exhibits "A & B ". NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. A budget amendment as more particularly described in Exhibits "A & B" attached hereto is hereby approved. SECTION 2. The Agency Secretary shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. PASSED AND ADOPTED this 18th day of February, 2009. Janice S. Parvin, Chair ATTEST: Deborah S. Traffenstedt, Agency Secretary Attachment: Exhibits A and B — Mid Year Budget Amendment 00CWS Exhibit "A" MOORPARK REDEVELOPMENT AGENCY Mid Year Budget Amendment for the 2008/2009 Fiscal Year Summary by Fund Fund 2901 - Low /Mod Housing 2902 - MRA Operation 2905 - MRA 2006 TA Bonds 3900 - MRA Debt Service Projected Projected Net Fund Revenue Expenditure Impact Increase Increase Increase (Decrease) (Decrease) (Decrease) $ 57166 $ (51166) 227793 395,977 (373,184) 1,000,000 17000,000 $ 110221793 $ 4017143 $ 6217650 .:r Oki S: \Finance \Ron Folder\Midyear Analysis\2008 -09 Mid Year\Mid Year Budget Amendment doc 08 -09 (no color) Exhibit "B" Moorpark Redevelopment Agency Mid Year Budget Amendment for the 2008/2009 Fiscal Year Object Current Current Amended Budget Unit Code Fund /Division Description Budget Actual Revision Budget Explanation REVENUE: 2902 - 2610 -5044 3410 High Street Arts Center Ticket sales $ - $ 13,273 $ 13,273 $ 13,273 Summer program tickets 2902 - 2610 -5045 3410 High Street Arts Center Ticket sales - 9,520 9,520 9,520 Fall program tickets Subtotal 22,793 3900 3330 Debt Service Settlements - 1,000,000 1,000,000 9,520 County of Ventura settlement Subtotal 1,000,000 Total revenue $ 1,022,793 EXPENDITURES: 2901 9720 MRA Low /Mod Income Hsng Debt Service Interest $ 31,000 $ 36,166 $ 5,166 $ 36,166 Debt service interest Subtotal 51166 2902 9287 Redevelopment Agency ERAF payment to State - 395,977 395,977 395,977 ERAF payment to County of Ventura Subtotal 395,977 Total expenditures $ 401,143 .:r Oki S: \Finance \Ron Folder\Midyear Analysis\2008 -09 Mid Year\Mid Year Budget Amendment doc 08 -09 (no color) ITEM 5' M ORPARK REDEVELOPMENT AGENCY AGENDA REPORT Y .. ^ TO: Honorable Agency Board of Directors FROM: Ron Ahlers, Finance Director 62� DATE: January 29, 2009 (Agency Meeting of February 18, 2009) SUBJECT: Consider Component Unit Financial Statements for the Fiscal Year Ended June 30, 2008 for the Redevelopment Agency of the City of Moorpark SUMMARY The Component Unit Financial Statements for the Redevelopment Agency of the City of Moorpark for June 30, 2008 are hereby submitted 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 and accepted by the Moorpark Redevelopment Agency by December 31, 2008. This report must include an independent auditor's report. 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, 2008. A copy of the annual financial report of the Moorpark Redevelopment Agency for June 307 2008 is hereby submitted. Once again the Agency has received an unqualified opinion for their Financial Statements. The Agency's financial position is measured by increases or decreases in net assets. As of fiscal year June 30, 2008, the Agency has an unrestricted net asset of approximately $2.7 million. Redevelopment agencies typically have a deficit in their net assets. Redevelopment agencies typically leverage current property tax increment revenues by issuing long term debt (including loans from the City of Moorpark) in order to qualify for receipt of property tax increment revenue and to raise capital to promote economic development within the project area. The new projects constructed, in turn, generate additional property tax increment revenues, which again, may only be captured to the extent that the Agency incurs indebtedness. Indebtedness includes bonded indebtedness, City loans and advances. The Agency incurs debt based on future property tax increments to fund redevelopment projects. Once the redevelopment projects are completed, the asset is transferred to the City; however, the debt remains Honorable Agency Board of Directors February 18, 2009 Page 2 with the Agency resulting in deficit net assets. During the current fiscal year the Agency's total debt decreased by approximately $444,000 or 1.5 %. This decrease is due to on -going debt service payments. Additionally, the Agency's gross property tax increment revenue during the current fiscal year increased by $540,000. This was due to an increase in the assessed values of taxable properties in the project area. Other highlights of the report can be found by reading Management's Discussion and Analysis on pages ii -vii. STAFF RECOMMENDATION (Roll Call Vote) Accept the Component Unit Financial Statements and receive and file this report. Attached: Component Unit Financial Statements of the Redevelopment Agency of the City of Moorpark .� � � 0 ATTACHMENT REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK COMPONENT UNIT FINANCIAL STATEMENTS Year Ended June 30, 2008 • TEAMAN, RAMIR &SMITH, INC. C E R T 1 f I E D PUBLIC ACC 0 U N T A N T S : I (t -10- lf"k ti i me 44 AN qQ Am as fte 40 do 1" am 1. 40 so REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK COMPONENT UNIT FINANCIAL STATEMENTS Year Ended June 30, 2008 Prepared by: Ron Ahlers, Finance Director Innina Lumbad, Finance & Accounting Manager Debbie Burdorf, Accountant I Redevelopment Agency of the City of Moorpark Component Unit Financial Statements Year Ended June 30, 2008 TABLE OF CONTENTS Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Notes to Financial Statements Required Supplementary Information Statement of Revenues, Expenditures, and Changes in Fund Balance Low and Moderate Income Housing Fund - Budget and Actual Supplementary Information Major Fund Budgetary Comparison Schedules Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Capital Projects Fund Debt Service Fund Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards PAGE i n - vu 1 2 3 4 S 6 7 -20 21 22 23 24 25-26 �� X112 *DT TFAMAN, RAMIREZ & SMITH, INC. CERTIFIED PUBLIC ACCOUNTANTS Indet�endent Auditors' Report The Honorable Chairman and Members of the Agency Redevelopment Agency of the City of Moorpark Moorpark, California We have audited the accompanying component unit financial statements of the governmental activities and each major fund of the Redevelopment Agency of the City of Moorpark (the "Agency"), a component unit of the City of Moorpark, California (City), as of and for the year ended June 30, 2008, 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. ow 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 e . ' g, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and each major fund of the Agency, as of June 30, 2008, 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. to In accordance with Government Auditing Standards, we have also issued our report dated December 16, 2008 on our consideration of the Agency's internal control over financial reporting and on our tests of its compliance with certain provisions Im 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 on compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. 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. The required supplementary information, such as management's discussion and analysis on pages ii through vii and the major Special Revenue Fund budgetary comparison schedule on page 21, are not a required part of the basic financial statements, but ' are supplementary information required by the accounting principles generally accepted in the United States of America. We go have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express 40 no opinion on it. dw Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Agency's basic financial statements. The other supplementary information listed in the table of contents, including additional budgetary comparison schedules are presented for purposes of additional analysis and are not a required part of the basis financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. 40 go '� December 16, 2008 Richard A. Teaman, CPA • Greg W. Fankhanel, CPA • David M. Ramirez, CPA • Javier H. Carrillo, CPA 4201 Brockton Ave. Suite 100, Riverside CA 92501 • 951.274.9500 • 951 .274.7828 FAx • www.trscpas.com H REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2008 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, 2008. It is encouraged that the readers 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 $8;943,366 (net assets). • The Agency's total debt decreased by $444,15.3 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 $36,464,697, an increase of approximately $952,000 from the prior year. 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 and 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 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 cashflows. 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. t ") 0 0-1 REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 3 0, 2008 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 three individual governmental funds and all of them are considered to be major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the Low - Moderate Income Housing Fund, Debt Service Fund and the Capital Projects Fund. The Agency adopts an annual appropriated budget for each of its governmental funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with the budget. 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. The Agency's Capital Projects Fund and Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual are presented. 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 $8,943,366 at the close of the most recent fiscal year. Of the $35,750,564 in total liabilities, $29,370,869 is outstanding debt for the 1999 Tax Allocation Bonds, 2001 Tax Allocation Bonds and 2006 Tax Allocation Bonds. sp REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MANAGEMENT' S DISCUSSION AND ANALYSIS JUNE 305 2008 The Agency's net assets increased by $1,256,237 during the 2007 /08 fiscal year. Table 1 Net Assets Governmental Activities As of June 30, 2008 and 2007 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 2008 $ 30,3205662 14,373,268 44,693,930 28,906,716 6,843,848 35,750,564 6,247,751 2,695,615 $ 8,943,366 iv 2007 $ 30,346,463 10,123,102 40,469,565 29,815,022 2,967,414 32,782,436 6,292,944 1,394,185 $ 7,687,129 REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 305 2008 Table 2 Changes in Net Assets Governmental Activities As of June 30, 2008 and 2007 2008 Revenues Property tax - Redevelopment Agency tax increment $ 607,079 Investment income 1,519,173 Other/Rentals 51,45 3 Gain from sale of property 0 Total Revenues, Transfers & Special Items 814579705 Expenses Public Services 5,4275627 Interest on long -term debt 15773,841 Total Expenses 792019468 Prior Period Adjustments (see note # 13) 0 Increase /(decrease) in net assets $ 1,2569237 FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS 2007 $ 6,347,692 1,635,814 9,142 275,797 8,268,445 4,727,371 1,332,541 6,059,912 189,579 $293989112 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 $26,464,697. The Capital Projects Fund is the chief operating fund of the Agency. At the end of the current fiscal year, the fund balance of the Capital Projects Fund was $28,602,889. e .4 .4 10017 v 1',,$ a, REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 3 0, 2008 The Agency has two other major funds: Low- Moderate Income Housing and the Debt Service Fund. 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. The Debt Service Fund is for the accumulation of resources to be used for the repayment of Agency debt. BUDGETARY HIGHLIGHTS Supplemental appropriations were approved during -the 2007/08 fiscal year for the Mobile Rehabilitation Loan Program, Additional Property Acquisition, Relocation Assistance and Demolition. Capital projects budgeted during the year included: 81 First Street Building Construction, Property Acquisition/Rehabilitation, Moorpark Human Services Complex, Flinn Avenue Remnant Parcel Landscaping, Granary Station, Moorpark Avenue Widening from Casey to 3rd Street, High Street Streetscape, and the Aszkenazy Project. LONG -TERM DEBT At the end of the current fiscal year, the Agency had total debt outstanding of $29,370,869. Agency Outstanding Debt Governmental Activities T„nP NO W)OR 1999 Tax Allocation Bonds 2001 Tax Allocation Bonds 2006 Tax Allocation Bonds $654309000 11,555,000 11,385,869 Governmental Activities Timp '10 ')007 $658703000 11,570,000 1 1,375,022 Total $ 29,3705869 $ 29,8155022 The Agency's total debt decreased by $444,153 during the current fiscal year, due to the normal pay down of the principal. vi 0 0 REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 3 0, 2008 ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES • In addition to various Capital Improvement Projects, the Redevelopment Agency budgeted $230,820 for the High Street Arts Center expenditure in the upcoming fiscal year. The estimated revenue from the Center will be approximately $94,750, resulting in a net loss of approximately $136,070. This loss will be absorbed by MRA Funds and is part of the revitalization efforts in the downtown area. � Assessed property values are expected to remain static or have a nominal increase. • Interest income should decrease, reflecting the decrease in interest rates. All of these factors were considered in preparing the Agency's budget for FY 2008/09. REQUESTS FOR INFORIVLATION This financial report is designed to provide a general overview of the Moorpark Redevelopment 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 Finance Department, Moorpark Redevelopment Agency, 799 Moorpark Avenue, Moorpark, California 93 021. vii BASIC FINANCIAL STATEMENTS � €►t ►213 Redevelopment Agency of the City of Moorpark Statement of Net Assets June 30, 2008 Total Assets Governmental LIABILITIES Activities ASSETS 5,949,616 Cash and Investments $ 2551893,651 Receivables: 78,13 8 Accounts 46,151 Interest 227,013 Notes 1,721,170 Property Held for Resale/Development 145373,268 Restricted Cash and Investments 21656,368 Debt Issuance Costs 4809309 Total Assets 44,6935930 LIABILITIES Accounts Payable and Accrued Liabilities 5,949,616 Interest Payable 351,941 Due to the City of Moorpark 78,13 8 Noncurrent Liabilities: Due Within One Year 464,153 Due in More Than One Year 28,9065716 Total Liabilities 35,7505564 NET ASSETS Restricted for: Housing Set -Aside 652475751 Unrestricted 256955615 Total Net Assets $ 8,9435366 The accompanying notes are an integral part of this statement. 1 . 0 021 Redevelopment Agency of the City of Moorpark Statement of Activities Year Ended June 30, 2008 General Revenues: Taxes: Property Tax, Redevelopment Agency Tax Increment 618875079 Investment Income 19519,173 Other 51,453 Total General Revenues 89457,705 Change in Net Assets 1,256,237 Total Net Assets, Beginning 7,6879129 Total Net Assets, Ending $ 83,9439366 The accompanying notes are an integral part of this statement. 10022 Program Revenues Charges Operating Capital Net for Grants and Grants and (Expense) Functions/Programs Expenses Services Contributions Contributions Revenue Governmental Activities: Public Services $ 5,4275627 $ - $ - $ - $ (5,427,627) Interest on Long -Term Debt 197739841 - - - (11773,841) Total Governmental Activities $ 7,201,468 $ - $ - $ - (7,2015468) General Revenues: Taxes: Property Tax, Redevelopment Agency Tax Increment 618875079 Investment Income 19519,173 Other 51,453 Total General Revenues 89457,705 Change in Net Assets 1,256,237 Total Net Assets, Beginning 7,6879129 Total Net Assets, Ending $ 83,9439366 The accompanying notes are an integral part of this statement. 10022 Redevelopment Agency of the City of Moorpark Balance Sheet Governmental Funds June 30, 2008 ASSETS Cash and Investments Restricted Cash and Investments Receivables: Accounts Interest Notes Receivable Due From Other Funds Property Held for Resale/Development Total Assets LIABILITIES AND FUND BALANCES Liabilities: Accounts Payable and Accrued Liabilities Due to the City of Moorpark Due to Other Funds Deferred Revenue Total Liabilities Fund Balances: Reserved for: Debt Service Property Held for Resale/Development Unreserved, Reported in: Special Revenue Fund Capital Projects Fund Debt Service Fund Total Fund Balances Total Liabilities and Fund Balances Special Revenue Low and Moderate Capital Income Housing Projects Debt $ 862,688 $ 19,4005781 $ 4,9261182 $ 25,189,651 216565368 216561,368 13,390 2,010 305751 465151 227,013 2275013 16,384 15704,786 1,721,170 40,531 714 41,245 5,333,368 95039,900 14,373,268 The accompanying notes are an integral part of this statement. $ 65266,361 $ 30,375,204 $ 75613,301 $ 44,254,866 $ 18,610 $ 49,250 $ 5,881,756 $ 55949,616 18,279 59,859 78,13 8 419245 41,245 16,384 1,704,786 1,721,170 343994 1,772,315 5,982,860 75790,169 59333,368 95039,900 897,999 19,562,989 61,2319367 285602,889 256569368 2,656,368 14,373,268 897,999 19,562,989 (110255927) (19025,927) $ 61,2665361 $ 30,3753204 $ 7,613,301 $ 44,2545866 %'0023 Redevelopment Agency of the City of Moorpark Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2008 Fund balances of governmental funds $ 36,464,697 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. 1, 7215170 Other long -term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds. - Interest expenditures are recognized when due, and therefore, interest payable is not recorded in the governmental funds. (3515941) Long -term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. Bonds Payable (29,680,000) Less: Issuance Discount 309,131 Issuance costs net of accumulated - amortization were recorded as expenditures in the governmental funds. 480,309 Net assets of governmental activities $ 8,943,3 66 The accompanying notes are an integral part of this statement. 4 „)OQ24 Redevelopment Agency of the City of Moorpark Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds June 30, 2008 Special Revenue Low and Moderate Capital Debt Income Housing Projects Service Total Revenues Taxes Use of Money and Property Intergovernmental Other Revenue Total Revenues Expenditures Current: Public Services Capital Outlay Debt Service: Principal Interest $ $ $ 658875079 $ 6,8875079 1115546 999,972 4075655 115195173 555489 555489 750 45330 55080 1 1? 796 1.059.791 7.294.734 8.466.821 369,804 62,326 4,861 Total Expenditures 4369991 Excess (Deficiency) of Revenues 865,575 3,392,760 45628,139 737J62 799,488 4555000 455,000 1,602,737 51474,831 7,514,559 over Expenditures (324,695) (5425946) 1,819,903 Other Financing Sources (Uses) 952,262 Transfers In 1,377,416 212415298 1515830 357705544 Transfers Out (15 15830) (356185714) (3,7705544) Total Other Financing Sources (Uses) 1,2255586 2,241,298 (3,4665884) - Net Change in Fund Balances 9005891 1,698;352 (1,646,981) 952,262 Fund Balances, Beginning of Year 553305476 2659045537 3,277,422 3555125435 Fund Balances, End of Year $ 6,2317367 $ 289602,889 $ 1,6303441 $ 365464,697 The accompanying notes are an integral part of this statements. Redevelopment Agency of the City of Moorpark Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2008 Net change in fund balances -total governmental funds $ 952,262 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. This activity is reconciled as follows: Cost of Assets Capitalized Depreciation 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. (9,116) The issuance of long -term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repa�mnent of the principal or 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 455,000 Amortization of Issuance Costs (16,852) Amortization of Bond Discounts (10,847) Accrued Interest for Tex Allocation Bonds. This is the net change in accrued interest for the current period. (1 14,210) Change in Net Assets of Governmental Activities The accompanying notes are an integral part of this statement. 0 $ 152565237 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 NOTE DESCRIPTION 1 Reporting Entity and Summary of Significant Accounting Policies 2 Cash and Investments 3 Notes Receivable 4 Interfund Activity 5 Due to the City of Moorpark 6 Long -term Debt 7 Classification of Net Assets and Fund Balance 8 Expenditures in Excess of Appropriations 9 Agreements with Various Taxing Agencies 10 Low and Moderate Income Housing Set Aside 11 Contingencies 7 PAGE 8-11 11 -14 14 15 15 15-18 18 18 19-20 20 20 A.)0 027 !,. Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Redevelopment Agency of the City of Moorpark (the 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 the City of Moorpark (the City) for purposes of the City's annual financial report. The Agency has responsibility for elimination of blight within the limits of the project areas 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 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. 8 �.t0028 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B) Basis of Presentation - Continued Taxes and other items that are properly not 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. 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 revenues of the current fiscal period. The Agency reports the following major governmental funds: The Low and Moderate Income Housing Special Revenue Fund is used to account for the receipt of 20 percent of the gross tax increment allocation, which is restricted for use on projects that increase or preserve the supply of low and moderate income housing in accordance with Health and Safety Code Section 33334. The Capital Projects Fund is used to account for all project expenditures, including acquisition of properties, cost of site improvements, and other costs within the Project Area. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of principal and interest on the Agency's debt and other long -term obligations. 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. 9 0 2.9 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued D) Budgetary Controls and Encumbrances 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. Adopted budget and budget amendments made during the year are reflected in the accompanying component unit financial statements. E) 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. F) 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). G) Property Held for Resale/Development Property held for resale in the Low and Moderate Income Housing Special Revenue Fund and the Capital Projects Fund represent 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 has been offset by a reservation of fund balance to indicate that assets constitute future capital projects and are not available spendable resources. The balance outstanding at June 30, 2008 was $14,373,268. H) 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. 10 : .� 0 0 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 1) 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 3 0 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. 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. J) New Accounting Pronouncements GASB Statement No. 45 - In June 2004, the GASB issued Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions" (OPEB). This Statement establishes standards for the measurement, recognition, and display of OPEB expense /expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial reports of state and local governmental employers. This statement is effective for the Agency as of fiscal year 2008 /09. The Agency has not determined its effect on the financial statements. I) Relationship to the City of Moorpark The Agency is an integral part of the reporting entity of the City of Moorpark. The funds of the Agency have been blended within the financial statements of the City because the City Council of the City of Moorpark 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 of Moorpark. 2) CASH AND 04VESTMENTS Cash and investments as of June 30, 2008 are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and Investments $ 25,1895651 Restricted Cash and Investments 2.656.368 Total Cash and Investments 27,846,019 °�0 U31 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 2) CASH AND EWESTMENTS - Continued Cash and investments as of June 30, 2008, consist of the following: Unrestricted: Demand Deposits $ 1173490 Cash on Hand 1,500 Investments 25,070,661 Total Unrestricted Cash and Investments 25,189,651 Restricted Cash and Investments (Held by Fiscal Agent Money Market Funds 1,300,594 Guaranteed Investment Contracts 1.355.774 Total Restricted Cash and Investments 2,656.368 Total Cash and Investments S-27.846.019 Investments Authorized by the Agency's Investment Policy The Agency's investment policy only authorizes investment in the local government investment pool administered by the State of California (LAIF) and pooled cash and investment with the City of Moorpark (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 for the year ended June 30, 2008. 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 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. �:Vfl }32 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 2) CASH AND INVESTMENTS - Continued Information about the sensitivity of the fair values of the Entity'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 Transamerica Occidental Life Total Disclosures Relating to Credit Risk Value Maturity $ 255070,661 Less than One Year 1,300,594 Less than One Year 5845674 October 1, 2031 771.100 October 1, 2018 $ 27,727L029 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 Investments in any one issuer that represent 5 percent or more of total investments by reporting unit (primary government, governmental activities, major fund, etc.) are as follows: $771,100 of the cash and investments (including amount held with bond trustee) reported in the Debt Service Fund (a major fund of the Agency) is held in the form of a nonnegotiable unrated investment contract issued by Transamerica Occidental Life Insurance Company that matures on October ,1, 2018. $584,674 of the cash and investments (including amount held with bond trustee) reported in the Debt Service Fund (a major fund of the Agency) is held in the form of a nonnegotiable unrated investment contract issued by CDC that matures on October 1, 2031. 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 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. 13 y�03 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 2) CASH AND INVESTMENTS - Continued All of the Agency's $117,490 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 Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the 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. 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. 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. The balance of the remaining note (note no. 7) outstanding at June 30, 2008 was $1,704,786. Principal and interest are due on September 2, 2029. Rehab Loans The Agency operates rehabilitation loan program for the renovation of low /moderate - income housing. The total balance outstanding at June 30, 2008 was $16,384. 15 'sOU34 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 4) 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, 2008 are presented below: TRANSFER FROM Low/Mod Housing Special Revenue Debt Service Total TRANSFER Low/Mod Housing Special Revenue $ $ 1,377,416 $ 1,377,416 TO Capital Projects 2,241,298 2,241,298 Debt Service 151.830 151.830 Total $ 151 X830 3,618.714 S 3.770.544 The Debt Service Fund transferred funds to the Low/Mod Housing Special Revenue Fund to meet the low and moderate income housing 20 percent tax increment set -aside requirement. The Debt Service Fund transferred funds to the Capital Projects Fund to fund future capital projects. The Low/Mod Housing Special Revenue Fund transferred funds to the Debt Service Fund to pay the 20% debt service on bond issues. 5) DUE TO THE CITY OF MOORPARK During the fiscal year, the City's General Fund advanced the Agency's Capital Projects Fund $18,279 and the Agency's Debt Service Fund $59,859. These advances are expected to be paid back to the City's General Fund in 2008/09. 6) LONGTERM DEBT Changes in long -term debt for the year ended June 30, 2008 are as follows: 1999 Tax Allocation Bonds 2001 Tax Allocation Bonds 2006 Tax Allocation Bonds Discount on Bonds Totals Balance Beginning of Year Additions $ 6,8709000 $ 1 1,570,000 11,695,000 X319.978) $ 29.815,022 - 15 • "4O1a35 Balance Due End within Reductions of Year One Year $ (440,000) $ 6,4309000 $ 460,000 (15,000) 1135555000 155000 11,695,000 10.847 (309.131) (10,847) (4440153) 29;3701,869 $ 464,153 • "4O1a35 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 6) LONG -TERM DEBT - Continued 1999 Tax Allocation Bonds In 1999, the Redevelopment Agency issued a $9,860,000 aggregated principal amount of Moorpark Redevelopment Project 1999 Tax Allocation Refunding Bonds (the Bonds). The purpose of the Bonds was to advance refund the Agency's previously issued $10,000,000 Moorpark Redevelopment Project, 1993 Tax Allocation 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 Fm &g 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 Bonds are payable from and secured by the tax revenues to be derived from the project area. The bonds are secured by all property tax increment revenues, which are deposited in the 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 Tax Allocation Bonds. In addition, the bond resolutions require retention of funds held by the fiscal agent prior to use for other than debt service. The Redevelopment Agency is in compliance with the covenants contained in debt indentures, which require the establishment of certain specific accounts for the Tax Allocation Bonds. Debt service payments on the 1999 Tax Allocation Refunding Bonds payable will be made from the Debt Service Fund. Annual debt service requirements to maturity are as follows: Year Ended June 30. Tax Allocation Bonds Principal Interest Total 2009 $ 4605000 $ 3001583 $ 7605583 .2010 475,000 279,459 7545459 2011 5005000 255,694 7555694 2012 5255000 2305709 7555709 2013 5501000 2043506 7543506 2014 -2018 35185,000 581,953 3,766,953 2019 735.000 17,916 752,916 Total S 6,430,000 1.870.820 S 8.300.820 2001 Tax Allocation Bonds In December 2001, the Redevelopment Agency of the City of Moorpark issued $11,625,000 of Tax Allocation Parity Bonds (the Bonds). The proceeds of the 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 bonds are payable from and secured by the tax revenues to be derived from the project area. 16 !!10 036 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 6) LONG -TERM DEBT - Continued The bonds are secured by all property tax increment revenues, which are deposited in the 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 Tax Allocation Bonds. In addition, the bond resolution requires retention of funds held by the fiscal agent prior to use for other than debt service. The Redevelopment Agency is in compliance with the covenants contained in debt indentures, which require the establishment of certain specific accounts for the Tax Allocation Bonds. Debt service payments on the 2001 Tax Allocation Parity Bonds payable will be made from the Debt Service Fund. Annual debt service requirements to maturity are as follows: Year Ended June 3 0, 2009 2010 2011 2012 2013 2014 -2018 2019 -2023 2024 -2028 2029 -2032 Total 2006 Tax Allocation Bonds Tax Allocation Bonds Principal Interest Total $ 155000 205000 15,000 15,000 2000 95,000 2,775,000 4,300,000 4,300,000 11.55.0 $ 5893176 588,469 587,743 587,098 586,319 2,918,594 2,633,121 1,675,108 454,332 10.619.960 $ 604,176 608,469 602,743 602,098 606,319 3,013,594 5,408,121 5,975,108 4.754,332 $ 22,174.960 In 2006, the Redevelopment Agency issued an $11,695,000 aggregated principal amount of Moorpark Redevelopment Project 2006 Tax Allocation Bonds (the Bonds). The purpose of the Bonds was to finance redevelopment activities related to the Agency's Moorpark Redevelopment Project (the "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 Bonds are payable from and secured by the tax revenues to be derived from the project area. The bonds are secured by all property tax increment revenue, which is recorded in the 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 Tax Allocation Bonds. The Redevelopment Agency is in compliance with the covenants contained in the debt indenture, which require the establishment of certain specific accounts for the Tax Allocation Bonds. "yOl)37 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 6) LONGTERM DEBT - Continued Debt service payments on the 2006 Tax Allocation Bonds payable will be made from the Debt Service Fund. Annual debt service requirements to maturity are as follows: Year Ending Tax Allocation Bonds June 30, Principal Interest Total 2009 $ $ 5085163 $ 508,163 2010 508,163 5089163 2011 403,000 507,437 5475437 2012 405000 505,987 5455987 2013 353000 504,628 539,628 2014-2018' 2159000 2,500,944 2,715,944 2019 -2023 2655000 2,454,187 2,719,187 2024 -2028 335,000 293919469 21726,469 2029 -3033 156305000 2,2845844 359149844 2034 -2038 75445,000 1,211,765 836563765 2039 1,690,000 36,969 1.726,969 Total $ 11.695,000 $ 1354140556 $ 250109.556 7) CLASSIFICATION OF NET ASSETS AND FUND BALANCE Via& A ecate 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. Flinn Ralan ,-P Under accounting principles generally accepted in the United States of America a governmental entity may set up "reserves" of fund equity to segregate fund balances, which are not appropriable for expenditure in future periods, or which are legally set aside for a specific future use. Fund "designations" also may be established to indicate tentative plans for financial resources utilization in a future period. 8) EXPENDITURES IN EXCESS OF APPROPRIATIONS The following fund had expenditures in excess of the budget in the following amounts for the year ended June 30, 2008: Debt Service Fund $ 797,760 The variance of $797,760 is mainly a result of the required tax increment pass - through payments that were higher than budgeted reflecting the increase in property tax revenue received. 18 0 0 *,3 8 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 9) AGREEMENTS WITH VARIOUS TAXING AGENCIES The Redevelopment Agency of the City of Moorpark has entered into five (5) 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. Additionally, the agreement calls for the Agency to receive a $1,000,000 payment from the tax increment disbursed to the County pursuant to the agreement, by December 31, 20085 if and only if the Agency's annual debt statements which are filed with the County Auditor - Controller from fiscal year 1993/94 to fiscal year 2008/09 list debts in an amount equal to or in excess of the maximum tax increment available to the Agency in each of such fiscal years. With respect to the first paragraph, 4.2 percent of the County Taxing Entities share is allocated to the County Library District (aka County Free Library System). The City of Moorpark 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 of Moorpark is entitled to the share of annual tax increment previously allocated to the County Library District under the first agreement. The City and County are in the process of finalizing documents to effectuate the allocation to the City, rather than to the County Library District. The second agreement is with the City of Moorpark Vector Control, formerly knoNNm as the Moorpark Mosquito Abatement District and states that the City of Moorpark Vector Control shall receive 87.5 percent of its share (1.53 percent) of annual tax increment revenue, following a deduction from total increment revenues for amounts required to be used for housing purposes (currently 20 percent of total tax increment revenue). The third agreement is with the Moorpark Unified School District (the School District), and states that the .School District 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 School District'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 School District's share of annual tax increment revenue. Per the agreement between the School District and the RDA of the City of Moorpark, the distributions to the School District 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; 19 ,.)0039 Redevelopment Agency of the City of Moorpark Notes to Financial Statements Year Ended June 30, 2008 9) AGREEMENTS WITH VARIOUS TAXING AGENCIES - Continued 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 School District overhead or salary/benefits for regular School District employees. The Agency may pre- approve other proposed expenditures that are submitted in writing by the School District. The fourth agreement is with the Ventura County Community College District (the Community College District), and states that the Community College District will 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 Community College District'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 Community College District's share of annual tax increment revenue. The fifth agreement is with the Ventura County Superintendent of School Office (the 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 .4ND 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 Agency's unspent commitment for its low and moderate income housing program amounted to $897,999 and has been reflected as unreserved fund balance in the Agency's Special Revenue Fund. 11) CONTINGENCIES 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 component unit financial statements of the Agency. zo ^1t)Q40 REQUIRED SUPPLEMENTARY INFORMATION ,1!)041 Redevelopment Agency of the City of Moorpark Statement of Revenues, Expenditures, and Changes in Fund Balances Low and Moderate Income Housing Special Revenue Fund Budget and Actual Year Ended June 30, 2008 21 0 0,, 4 2 Variances with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Use of Money and Property $ 3085790 $ 308,790 $ 1115546 $ (197,244) Other Revenue 750 750 Total Revenues 308,790 3083790 1125296 (1965494) Expenditures Current: Public Services 431,823 548,323 3695804 178519 Capital Outlay 25078,343 3,4515508 62,326 3,3 89,182 Debt Service: Principal 165000 16,000 163000 Interest 215000 21,000 45861 165139 Total Expenditures 2,5479166 45,036,831 436,991 315995840 Excess (Deficiency) of Revenues over Expenditures (25238,376) (35728,041) (324,695) 35403.346 Other Financing Sources (Uses) Transfers In 1,197,600 15297,600 1,377,416 793816 Transfers Out (151,829) (1515829) (151,830) (1) Total Other Financing Sources (Uses) 110455771 151459771 1,225,586 79,815 Net Change in Fund Balance (1,192,605) (2,582,270) 900,891 35483,161 Fund Balance, Beginning of Year 51,330,476 5,3305476 59330,476 Fund Balance, End of Year $ 45137,871 $ 2,748,206 $ 6,231,367 $ 35483,161 21 0 0,, 4 2 SUPPLEMENTARY INFORMATION A budgetary comparison schedule is presented as part of the required supplementary information for the major special revenue fund 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. z "tUl ?44 Redevelopment Agency of the City of Moorpark Statement of Revenues, Expenditures, and Changes in Fund Balances Capital Projects Fund Budget and Actual Year Ended June 30, 2008 Budgeted Amounts Original Final Revenues Variances with Actual Final Budget Amounts Positive (Negative) Use of Money and Property $ 1,0739432 $ 11458,432 $ 999,972 $ (458,460) Intergovernmental 55,489 557489 Other Revenue 7010000 41100 4,330 230 Total Revenues 1,1435432 15462,532 150593791 (402,741) Expenditures ' Current: Public Services 8925167 954,307 8655575 88,732 Capital Outlay 2,8361,627 4,561,969 73 7, 162 33824,807 Total Expenditures 3,728,794 53516;276 1,6025737 339139539 Excess (Deficiency) of Revenues over Expenditures (2,5853362) (430539744) (542,946) 395101,798 Other Financing Sources (Uses) Transfers In 2,2809529 21280,529 2,241,298 (39,231) Total Other Financing Sources (Uses) 2,280,529 29280,529 2,241,298 (39,231) Net Change in Fund Balance (3043833) (1,773,215) 11698,352 33471,567 Fund Balance, Beginning of Year 265904,537 26,9045537 26,9041537 Fund Balance, End of Year $ 2615991704 $ 2551319322 $ 28,602,889 $ 39,471,567 23 14.10045 Redevelopment Agency of the City of Moorpark Statement of Revenues, Expenditures, and Changes in Fund Balances Debt Service Fund Budget and Actual Year Ended June 30, 2008 24 Variances with Budgeted Amounts Actual Final Budget Original Final Amounts Positive (Negative) Revenues Taxes $ 559885000 $ 6,4885000 $ 6,8875079 $ 3995079 Use of Money and Property 336,260 3365260 407,655 71,395 Total Revenues 6,3245260 658245260 752945734 4709474 Expenditures Current: Public Services 2,5005000 2550000 3,3925760 (8925760) Debt Service: Principal 455,000 4551000 45500 - Interest 1,7225071 1,722,071 156275071 95,000 Total Expenditures 456775071 416771,071 5,4745831 (7975760) Excess (Deficiency) of Revenues over Expenditures 1,647,189 25147,189 15819.903 (3273286) Other Financing Sources (Uses) Transfers In 1515829 151,829 1515830 1 Transfers Out (3,4785129) (35478,129) (356183714) (140,5 85) Total Other Financing Sources (Uses) (3,326,300) (3,326,300) (33,4665884) (1405584) Net Change in Fund Balance (156795111) (191795111) (1,646,981) (467,870) Fund Balance, Beginning of Year 3,2775422 3,277,422 3 277942 Fund Balance, End of Year $ 15598,311 $ 250985311 $ 11630441 $ (467,870) 24 0 Of 4*7 07RSTEAMAN, INC. C _IR i t�?tC P U 8 L A CTC06N'A'N i 5 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based On an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Honorable Chairman and Members of the Agency Redevelopment Agency of the City of Moorpark Moorpark, California We have audited the financial statements of the Moorpark Redevelopment Agency (the "Agency') as of and for the year ended June 30, 2008, and have issued our report thereon dated December 16, 2008. 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. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Agency's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Agency's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Agency's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Agency's financial statements that is more than inconsequential will not be prevented or detected by the Agency's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Agency's internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Agency's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial ii 25 D- �( Ait. I is 3 ri 1 i s h1 C? VI NIL �i�i1 l�;f' i f� til::�i "!, _ r�,=\ i9 ( r f 1 ( '' d 4` 0 -1 Brockton Ave. SLIite 1 ^C), t ivie- r-SKIC CIA 9250 s 951.274.91500 a � '�' � � �:�� t9a ak tt u'Y^��r'4i, s et ..k• -. ?Y- Y, mot.. 'i.. statement amounts. Such provisions include those provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies, issued by the State Controller. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management in a separate letter dated December 16, 2008. This report is intended solely for the information and use of management, and the State Controller's Office, and is not intended to be and should not be used by anyone other than these specified parties. ja-ev*�� X4.0. " i J I December 16, 2008 26 VIA Am UEM A - 4.?00 MOORPARK REDEVELOPMENT AGENCY � AGENDA REPORT TO: Honorable Board of Directors FROM: Ron Ahlers, Finance Director DATE: February 12, 2009 (Agency meeting of February 18, 2009) SUBJECT: Consider Authorizing the Executive Director to Write a Letter to the County- Auditor Regarding Payment into ERAF for Fiscal Year 2008 -09 BACKGROUND As part of the budget balancing by the State of California, the California legislature and the Governor approved taking $350 million from redevelopment agencies through -out the State. The Moorpark Redevelopment Agency's share is $395,977. This amount must be paid by May 10, 2009. Prior to the payment, each redevelopment agency must inform their County- Auditor on the method of payment. The redevelopment agency is currently facing a March 1 deadline by which we must inform the Ventura County Auditor of how we intend to fund the ERAF payments required to be made by May 10 in AB 1389. The redevelopment agency intents to pay the Ventura County- Auditor, with a check, from redevelopment tax increment funds. DISCUSSION After AB 1389 was signed by the Governor, various entities joined together in a lawsuit challenging the authority of the legislature and the Governor to the "taking" of these funds. Written below is the latest information from the California Redevelopment Association {CRA} regarding the lawsuit with the State over ERAF payments from redevelopment agencies. Honorable Board of Directors February 1.8, 2009 Page 2 CRA Wins Round One of Lawsuit to Protect Redevelopment Funds On February 6, Sacramento Superior Court Judge Lloyd Connelly granted CRA's request to certify all county auditors in counties with redevelopment agencies as a class of defendants in CRA's lawsuit against the State of California. The hearing on the merits of the lawsuit will be held on March 6 before the same judge. Late last year, CRA and the Cities of Moreno Valley and Madera filed a lawsuit in Sacramento Superior Court seeking to block sections of budget trailer bill AB 1389, which was approved as a part of the FY 2008 -09 state budget and which authorizes a one -time raid of $350 million in redevelopment funds. The lawsuit seeks both to invalidate sections of AB 1389 and to prohibit the State from forcing county auditors to divert redevelopment funds to the Educational Revenue Augmentation Funds (ERAF). The lawsuit contends that State takes of redevelopment funds to balance the State's budget violate Article XVI, Section 16 of the Constitution. In the meantime, agencies are facing a March 1 deadline by which they must inform their respective county auditors how they intend to fund the ERAF payments required to be made by May 10 in AB 1389, or that the local legislative body intends to make the payment in lieu of the agency. In order to recognize that the payments are being challenged in court, CRA recommends that the following language be included in the formal transmittals to county auditors before the March 1 deadline: As you may know, the validity of the legislation mandating this ERAF transfer has been challenged in litigation pending in the Superior Court for Sacramento County, California Redevelopment Association et al v. Genest et al, Case No. 34- 2008 - 00028334- CU -WM- GDS ( "CRA v. Genest "). This case alleges, among other things, that the duties of county auditors under Health and Safety Code Sections 33685(a) and 33687(a) to deposit funds received from redevelopment agencies in County Educational Revenue Augmentation Funds are inconsistent with various state and federal constitutional provisions and are therefore unlawful and unenforceable. The [name of sender's agency] Redevelopment Agency reserves any rights it may have to withhold the payment of funds to you under Health and Safety Code Section 33685 or to recover those funds after payment or transfer based on any order or judgment of the Court in CRA v. Genest. We hope to have a decision on the case by the May 10 deadline when ERAF payments are due, but obviously, there is no way we can predict with certainty how long court proceedings will take. CRA may also seek an injunction at the appropriate time to bar collection of payments. Honorable Board of Directors February 18, 2009 Page 3 We are requesting that the Executive Director of the Redevelopment Agency be authorized to write a letter to the Ventura County- Auditor stating that we intend to pay $395,977 in redevelopment tax increment funds. We shall also include the verbiage recommended by the CRA in this memo. STAFF RECOMMENDATION Authorize the Executive Director of the Redevelopment Agency to send a letter to the Ventura County- Auditor advising them of our intention to pay ERAF with redevelopment tax increment funds.