HomeMy WebLinkAbout01/08/2013 Independent Accountants' ReportSUCCESSOR AGENCY TO THE LAKE ELSINORE REDEVELOPMENT AGENCY
Independent Accountants' Report on Applying Agreed -Upon Procedures
On the Lake Elsinore Redevelopment Agency's
And
The Successor Agency to the Lake Elsinore Redevelopment Agency's
All Other Funds
Pursuant to California Health and Safety Code Section 34179.5
Independent Accountants' Report on Applying
Agreed -Upon Procedures Related to All Other Funds
Oversight Board of the Successor Agency
to the Lake Elsinore Redevelopment Agency
Lake Elsinore, California
We have performed the minimum required agreed -upon procedures (AUP) enumerated in
Attachment A, which were agreed to by the California Department of Finance, the California State
Controller's Office, the Riverside County Auditor - Controller, and the Successor Agency to the Lake
Elsinore Redevelopment Agency (Successor Agency), (collectively, the Specified Parties), solely to
assist you in meeting the statutory requirements of Health and Safety Code Section 34179.5 related to
all other funds except for the Low and Moderate Income Housing Fund (All Other Funds) of the
former Lake Elsinore Redevelopment Agency and the Successor Agency. Management of the
Successor Agency is responsible for meeting the statutory requirements of Health and Safety Code
Section 34179.5 related to All Other Funds. This agreed -upon procedures engagement was conducted
in accordance with attestation standards established by the American Institute of Certified Public
Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified
in the report. Consequently, we make no representation regarding the sufficiency of the procedures
described below, either for the propose for which this report has been requested or for any other
purpose.
The scope of this engagement was limited to performing the agreed -upon procedures as set forth in
Attachment A. Attachment A also identifies the findings noted as a result of the procedures
performed.
We were not engaged to and did not conduct an audit, the objective of which would be the expression
of an opinion on whether the Successor Agency has met the statutory requirements of Health and
Safety Code Section 34179.5 related to All Other Funds. Accordingly, we do not express such an
opinion. Had we performed additional procedures, other matters might have come to our attention that
would have been reported to you.
This report is intended solely for the information and use of the Oversight Board and management of
the Successor Agency to the Lake Elsinore Redevelopment Agency, the California Department of
Finance, the California State Controller's Office, and the Riverside County Auditor - Controller, and is
not intended to be, and should not be, used by anyone other than these specified parties.
Irvine, California
January 4, 2013
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
01fices located in Orange and Sun Diego Counlies
SUCCESSOR AGENCY TO THE LAKE ELSINORE REDEVELOPMENT AGENCY
ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS
RELATED TO ALL OTHER FUNDS
2C. Procedure:
For each transfer, obtain the legal document that formed the basis for the enforceable obligation
that required the transfer. Note in the AUP report the absence of any such legal document or the
absence of language in the document that required the transfer.
Finding:
Schedule 2 shows the details for the enforceable obligation or other legal requirement supporting
the transfers.
3A. Procedure:
Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods
and services) from All Other Funds of the former redevelopment agency to any other public
agency or to private parties for the period from January 1, 2011 through January 31, 2012. For
each transfer, the Successor Agency should describe the purpose of the transfer and describe in
what sense the transfer was required by one of the Agency's enforceable obligations or other
legal requirements. Provide this listing as an attachment to the AUP report.
Finding:
This procedure is not applicable as the former redevelopment agency did not make any transfers
to other public agencies or private parties other than payments for goods and services from All
Other Funds during the period from January 1, 2011 through January 31, 2012.
3B. Procedure:
Obtain a listing prepared by the Successor Agency of transfers (excluding payments for goods
and services) from All Other Funds of the Successor Agency to any other public agency or to
private parties for the period from February 1, 2012 through June 30, 2012. For each transfer, the
Successor Agency should describe the purpose of the transfer and described in what sense the
transfer was required by one of the Agency's enforceable obligations or other legal requirements.
Provide this listing as an attachment to the AUP report.
Finding:
This procedure is not applicable as the Successor Agency did not make any transfers to other
public agencies or private parties other than payments for goods and services from All Other
Funds during the period from February 1, 2012 through June 30, 2012.
3
SUCCESSOR AGENCY TO THE LAKE ELSINORE REDEVELOPMENT AGENCY
ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS
RELATED TO ALL OTHER FUNDS
6. Procedure:
Obtain from the Successor Agency a listing of asset balances held on June 30, 2012 that were
restricted for the following purposes:
• unspent bond proceeds,
• grant proceeds and program income restricted by third parties, and
• other assets with legal restrictions.
6A. Procedure - Unspent Bond Proceeds:
Obtain the Successor Agency's computation of the restricted balances and trace individual
components of this computation to related account balances in the accounting records, or to other
supporting documentation. Obtain the legal document that sets forth the restriction pertaining to
these balances.
Finding:
The Successor Agency has $3,820,896 in cash and investments held by Union Bank as reserve
balances on bonds issued by the former redevelopment agency. The balance of $3,820,896 is
restricted to pay for debt service under the bond documents and indenture.
6B. Procedure - Grant Proceeds and Program Income Restricted by Third Parties:
Obtain the Successor Agency's computation of the restricted balances and trace individual
components of this computation to related account balances in the accounting records, or to other
supporting documentation. Obtain a copy of the grant agreement that sets forth the restriction
pertaining to these balances.
Finding:
This procedure is not applicable as the Successor Agency did not hold any grant proceeds or
program income as of June 30, 2012.
6C. Procedure - Other Assets Considered to be Legally Restricted:
Obtain the Successor Agency's computation of the restricted balances and trace individual
components of this computation to related account balances in the accounting records or other
supporting documentation. We obtained the legal document that sets forth the restriction
pertaining to these balances.
Finding:
As of June 30, 2012, the Successor Agency's other legally restricted assets related to All Other
Funds of the former redevelopment agency amounted to $6,512,667 as shown in Schedule 5.
5
SUCCESSOR AGENCY TO THE LAKE ELSINORE REDEVELOPMENT AGENCY
ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS
RELATED TO ALL OTHER FUNDS
8B. Procedure:
If the Successor Agency identified that future revenues together with balances dedicated or
restricted to an enforceable obligation are insufficient to fund future obligation payments and
thus retention of current balances is required, obtain from the Successor Agency a schedule of
approved enforceable obligations that include a projection of the annual spending requirements to
satisfy each obligation and a projection of the annual revenues available to fund those
requirements. Compare the enforceable obligations to those that were approved by the California
Department of Finance for the six month period from January 1, 2012 through June 30, 2012 and
for the six month period July 1, 2012 through December 31, 2012. Compare the forecasted
annual spending requirements to the legal document supporting the enforceable obligation and
obtain the Successor Agency's assumptions relating to the forecasted annual spending
requirements. Obtain the Successor Agency's assumptions for the forecasted annual revenues.
Disclose the major assumptions for the forecasted annual spending requirements and the
forecasted annual revenues in this AUP report.
Finding:
This procedure is not applicable as the Successor Agency did not identify any assets to be
retained under this procedure.
8C. Procedure:
If the Successor Agency identified that projected property tax revenues and other general purpose
revenues to be received by the Successor Agency are insufficient to pay bond debt service
payments (considering both the timing and amount of the related cash flows), obtain a schedule
demonstrating this insufficiency. Compare the timing and amounts of bond debt service
payments to the related bond debt service schedules in the bond agreement. Obtain the
assumptions for the forecasted property tax revenues and other general purpose revenues and
disclose them in this AUP report.
Finding:
This procedure is not applicable as the Successor Agency did not identify any assets to be
retained under this procedure.
8D. Procedure:
If Procedures 8A, 8B and 8C were performed, calculate the amount of unrestricted balances
necessary for retention in order to meet enforceable obligations. Combine the amount identified
as currently restricted balances and the forecasted annual revenues to arrive at the amount of total
resources available to fund enforceable obligations. Reduce the total resources available by the
amount of forecasted annual spending requirements. Include the calculation in this AUP report.
7
SUCCESSOR AGENCY TO THE LAKE ELSINORE REDEVELOPMENT AGENCY
ATTACHMENT A - AGREED -UPON PROCEDURES AND FINDINGS
RELATED TO ALL OTHER FUNDS
11. Procedure:
Obtain a representation letter from management of the Successor Agency acknowledging their
responsibility for the data provided and the data presented in the report or in any schedules or
exhibits to the report. Included in the representations is an acknowledgment that management is
not aware of any transfers (as defined by Section 34179.5) from either the former redevelopment
agency or the Successor Agency to other parties for the period from January 1, 2011 through
June 30, 2012 that have not been properly identified in this AUP report and its related schedules
or exhibits. Management's refusal to sign the representation letter should be noted in the AUP
report as required by attestation standards.
Finding:
No exceptions were noted as a result of this Procedure.
9
N
G+
a
.`J
Q
Z
U
r
2
Q
z
C w W
G �
O �
F
w O
� Q
W F
rL Q
O
F
7- a
a W
W R
Q
a Q
Z W
F �
� a
Z rz
W O
a
Q O
W
Q
wQ
U
V
h
L
0
co
O
N
v
W
E
n
L
O
M ^ M L
S L H
W N W W W ry d
_ X
V P
V O
�Q�n Ev�Q h
in�Q mp �,E
V A t
E cK 2 • , � . � Q v�
F
E
ry
0
T L
m
7
E) O V
F � X
.-
v v v x 5—
VirAN W q G
y oe� 2 .:i
N a �
v v
C F F C a b b
4 0.
awa ay, O
N Vl Vl lA v �
6 0 0 E
E c c
wwrnt" E.7
C G C G o F 6
.;a a.aravi
O O O O E W
W W W W
L
Z
O
s
u
w
W
Pe
W
0
�i
N
W
O
w'
rn
a
v
c c
6
N
O
� k.... o W ...
ti u
C L Y y s L
L O 1J 'V Q
Ev�a'a.n;yF-
O O V O ✓�
N
L2
F
0
0
0
V
V
4.
O W
V
C] F
U V U V U V V
p O O O O O O
N N N N N N N
^ V y V V
M? V V V V V
m m
0. 0.
N N
r }
o
IA^ fl' N
f W
O O
O
° o
c o
O ^
L s
^ E E m
U •'
0
R 'LI 'O F KV
A R
;
`o
0
ti
0
a
L y y L t
U U U U V
N N N N N
O O O O O
a
L
CC
F
F
w
N
U
0.
O
FL
0
O
a
L
V
m
F
w
0
0
V
V
L
U
N
L
W
r
a
0.
O
a
0
O
N
r
w
V�
E
a
a
0
c
t
U
U
O
ry ry
O W O O
V y O
Q `ti N M
W
G..
F
H
Q
SCHEDULE
SUCCESSOR AGENCY TO LAKE ELSINORE REDEVELOPML'NT AGENCY
AGREED -UPON PROCEDURES RELATED TO ALI., OTHER FUNDS
LISTING OF ASSETS TRANSFERRED TO SUCCESSOR AGENCY
June 30, 2012
Total
Assets
as of
June 30, 2012
ASSETS
Cash and investments
$ 19,894,876
Cash with fiscal agent (Bond Trustee)
3,820,896
Interest receivable
496
Due from other Redevelopment Agency Funds
17,038,599
Land held for resale
6,088,480
SUBTOTAL TOTAL ASSETS (MODIFIED ACCRUAL)
46,843,347
Capital assets
17,839,207
Deferred bond issue costs
2,699,312
TOTAL ASSETS
$ 67,381,866
SCHEDULE 6a
Civic Partners-
Elsinore, LLC
Union Bank, N.A.
Union Bank, N.A.
Union Bank, N.A.
Union Bank, N.A.
City of Lake Elsinore
City of Lake Elsinore
City of Lake Elsinm e
City of Lake Elsinore
White Nelson
Diehl Evans, LLP
SUCCESSOR AGENCY TO THE LAKE ELSINORE REDEVELOPMENT AGENCY
AGREED -UPON PROCEDURES RELATED TO ALL OTHER FUNDS
CASH BALANCE'S FOR RETENTION TO MEET
ENFORCEABF-, OBLIGATIONS IN FISCAL YEAR 2012 -2013 ON ROPS I
June 30, 2012
Entorecable Obligation/Other Legal
Description Amount Requirement Supporting Retention
DDA Obligation S 226,662 ROPS 1, Page 1, Line 12
Tax Allocation Revenue Bonds, 421,447 ROPS L Page 1, Line 1
2010 Series A
Tax Allocation Revenue Bonds, 1,678,607 ROPS 1, Page 1, Line 3
2010 Series C
Tax Allocation Revenue Bonds, 592,756 BOPS 1, Page I. Line 4
2011 Series A
Local Agency Revenue Bonds, 257,636 ROPS 1, Page 1. Line 5
2011 Series A
Diamond Stadium Annual Capital
300,000
RODS I, Page I, Line 16
Contribution
LERA - Debt service from
83,578
RODS 1, Page 1, Line 17
February 2012 to June 2012
Housing Fund Loan Repayment
5,512,653
ROPS 1, Page 2, Line 19
City Staff suppmt from
153,938
ROPS 1, Page 3, Line I
February 2012 to June 2012
Annual audit services for
9.000
ROPS 1, Page 1, Line 23
fiscal year 2011 -2012
$ 9.236,277
SCHEDULE?
SUCCESSOR AGENCY TO LAKE ELSINORE REDEVELOPMENT AGENCY
AGREED -UPON PROCEDURES RELATED TO ALL OTHER FUNDS
LISTING OF NONLIQUID ASSETS
As of June 30, 2012
Basis for
Balance at
Asset Desa iption
Determining Value
June 30. 2012
Due from other Redevelopment Agency Funds
Cost
$ 17,038,599
Land field for resale
Cost
6,088,480
Capital assets
Cost
17,839,207
Deferred bond issue costs
Cost
2,699,312
$ 43,665,598