SR-12-08-1987-RA2
.
,
'//3-00/
u..,z
DEe 8 1987
C/ED:EDD:PC:JPM:CSR:se
council Meeting: 12/8/87
Santa Monica, california
TO:
Redevelopment Agency Chairperson and Board
FROM:
City staff
SUBJECT: Transmittal of Annual Report for Fiscal Year 1986-87 of
the Redevelopment Agency of the city of Santa Monica
INTRODUCTION
The California Health & Safety Code requires that every
redevelopment agency file an annual report with the California
Housing and Community Development Department within six months of
the end of the agency's fiscal year. This staff report transmits
the Santa Monica Redevelopment Agency's Annual Report for Fiscal
Year 1986-87, which includes an independent financial audit,
pursuant to Health and safety Code section 33080.
ANNUAL REPORT CONTENTS
As required by law, the Agency's Annual Report includes:
1) A specific description of the agency's activities affecting
housing and displacement:
2) An independently prepared financial audit report conducted in
accordance with generally accepted auditing standards:
3) A fiscal statement that provides information on the
outstanding indebtedness of and the amount of tax increment
revenue generated by the agency and by each project:
4) Any other information which the agency bel ieves useful to
explain its programs and activities.
For the audit portion of the Annual Report, the Agency contracted
with the accounting firm of Peat, Marwick, Main & Co. for an
- 1 -
J2A-.z..
DEe 8 19S"1
~
~
independent financial audit of the fiscal year July 1, 1986
through June 30, 1987. The audit was performed to comply with
standards set out in Section 33080.1 of the Health and Safety
Code. Peat, Marwick, Main & Co. found that the Agency's records
fairly present the financial position of the various funds and
account groups of the Redevelopment Agency as of June 30, 1987,
and found no negative audit findings.
The Annual Report also reviews the objectives and activities of
the Agency in FY 1986-87, previews the Agency's obj ectives and
work plan for FY 1987-88, and provides recommendations for needed
legislation to carryon a program of housing and community
development.
BUDGET/FISCAL IMPACT
There is no bUdget/financial impact resulting from the approval
of the Redevelopment Agency's annual report for FY 1986-87
RECOMMENDATIONS
It is recommended that the Redevelopment Agency approve the
Annual Report and direct the Executive Director to transmit the
report to the California Department of Housing and Community
Development.
Prepared by: Christopher S. Rudd, Sr. Administrative Analyst
Economic Development Division
Community and Economic Development Department
Attachment: Santa Monica Redevelopment Agency Annual Report
for Fiscal Year 1986-87
- 2 -
ratocc
- 3 -
SANTA MONICA REDEVELOPMENT AGENCY
ANNUAL REPORT FOR FISCAL YEAR 1986-87
TABLE OF CONTENTS
~age
Introduction
Descripton of Redevelopment Projects
Ocean Park Project 1a
Ocean Park Project 1b
Downtown Project
Off-site Projects
Agency Objectives and Activities for Fiscal Year 1986-87
Ocean Park Projects
Downtown
Agency Objectives for Fiscal Year 1987-88
Agency Activities Affecting Housing and Displacement
Housing Activities
status and Use of Housing Trust Funds
Recommendations Concerning Needed Legislation
Combined Financial statement
Fiscal statement
raar
1
1
2
2
3
3
4
4
5
6
6
7
8
8
Appendix A
Appendix B
ANNUAL REPORT FOR FISCAL YEAR 1986-87
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
INTRODUCTION
As required by California Health & Safety Code section 33080,
each redevelopment agency must file an annual report with the
California Housing and Community Development Department within
six months of the end of the agency's fiscal year. The annual
report must contain for the agency and each project:
1) A specific description of the agency's activities affecting
housing and displacement.
2) An independently prepared financial audit report conducted in
accordance with generally accepted auditing standards.
3) A fiscal statement that provides information on the
outstanding indebtedness of and the amount of tax increment
revenue generated by the agency and by each project.
4) Any other information which the agency believes useful to
explain its programs and activities.
This annual report for the Santa Monica Redevelopment Agency
contains the information required by State law and also includes
a review of the objectives and activities of the Redevelopment
Agency in FY 1986-87, previews the Agency's objectives and work
plan for FY 1987-88, and provides recommendations for needed
legislation to carryon a program of housing and community
development.
DESCRIPTION OF REDEVELOPMENT PROJECTS
The santa Monica Redevelopment Agency has
redevelopment project areas:
three active
1) Ocean Park Redevelopment Project (la)
2) Ocean Park Redevelopment Project (lb)
3) Downtown Redevelopment project
Ocean Park Redevelopment Project
The Ocean Park Redevelopment Project was the first project
undertaken by the Santa Monica Redevelopment Agency which was
activated on August 13, 1957. The Ocean Park Project was first
designated for study as a potential redevelopment proj ect in
April 1958 when an application was made to the Federal government
- 1 -
for survey and planning funds. with these funds, the Agency
staff commenced preparation of formal plans for the area
encompassing some thirty-three acres of land in the southwest
corner of the City adjacent to the Venice community of the City
of Los Angeles.
In October 1959, as a result of a reduction in the availability
of Federal funds for the project, the proposed thirty-three acre
Ocean Park project was divided into two separate projects so that
at least one project could go forward with the funds available to
the Agency at the time.
ocean Park Redevelopment project la
Ocean Park Redevelopment Project la encompasses approximately 25
acres of property on the northern portion of the originally
proposed 33 acre project. The Redevelopment Plan for Project la
was approved by the City council on June 30, 1960, following
requisite studies and hearings by the Planning Commission,
Redevelopment Agency, and the city Council. The Redevelopment
Plan was amended on November 14, 1967, principally to change the
permitted land uses in the project area.
Ocean Park Redevelopment proj ect la is bounded by Ocean Park
Boulevard on the north, Neilson Way on the east, Ocean Park
project No. lb on the south, and the state beach parking lots and
beach on the west. project la is zoned R4 High Density Multiple
Family Residential which permits the highest residential density
in the city.
Ocean Park Redevelopment proj ect la was completed in May 1987.
The project contains two 17-story high rise apartment buildings
which were completed in 1967. Each tower contains 250 rental
apartment units. On both sides of the apartment complex is
located the Sea Colony condominium project. Sea Colony contains
340 condominium units which were constructed in two phases.
Phase 1 of the development was completed in 1980 and Phase 2 was
completed and available for sale and occupancy in May 1987. In
the center of Proj ect Area la facing the beach is Ocean view
Park. This public park contains six tennis courts, two paddle
ball courts, one basketball court, walkways, and landscaping.
The park offers a rest area with a panoramic view of the Pacific
Ocean.
Ocean Park Redevelopment project 1b
Ocean Park Redevelopment Project Ib encompasses approximately 8
acres of property on the southern portion of the originally
proposed 33 acre project. The Redevelopment Plan for Project 1b
was approved by the city Council on January 24, 1961, following
requisite studies and hearings by the Planning Commission,
Redevelopment Agency, and the City Council. The Redevelopment
Plan was amended on January 26, 1965, and again on september 12,
1972, principally to change the permitted land uses in the
project area.
- 2 -
Ocean Park Redevelopment Project No. Ib is bounded by Ocean Park
Redevelopment Project la on the north, Neilson Way on the east,
the city limit on the south (adjacent to the Venice community of
the City of Los Angeles), and the state beach parking lots and
beach on the west. proj ect Ib is zoned C3 General Commercial
which permits commercial uses and the highest residential density
in the City.
Ocean Park Redevelopment Project No. 1b was completed in 1983.
The project contains two senior citizen residential apartment
complexes and a former utility building. Neilson Villas contains
100 rental apartment units and was completed in 1977. Barnard
Park Villas contains 61 units and was completed in 1983. The
utility building contained telephone switching equipment and was
replaced in 1986 by a facility outside the project area
containing more modern switching equipment. The former utility
building is proposed to house offices and storage for an arts
foundation.
Downtown Redevelopment Project
The Downtown Redevelopment Project encompasses about 9.9 acres of
property located at the southern end of the city's Third street
pedestrian mall in the downtown core of Santa Monica. The
Redevelopment Plan for the Downtown Project was approved by the
City council in January 1976.
The Downtown Redevelopment Project is bounded by Broadway on the
north, 4th street on the east, Colorado Avenue on the south, and
2nd street on the west. The project is zoned C3 General
Commercial which permits commercial uses.
The Downtown Redevelopment Project, Santa Monica Place and
attached parking structures, was completed in 1980. The retail
portion of the project contains approximately 570,000 square feet
of floor area and includes two major department store anchors,
160 specialty retail shops and food establishments, all of which
are linked by a three level enclosed pedestrian space that
extends diagonally across two ci ty blocks. The proj ect also
includes two Agency-owned parking structures containing 2,020
parking spaces.
Off-Site projects
Both the Ocean Park Redevelopment Projects and the Downtown
Redevelopment Project includes certain off-site improvements that
are found to be 1I0f-benefit" to each project. In addition to
various housing and other housing related proj ects for low and
moderate income individuals and families either funded in whole
or in part by each project, major off-site improvements include:
Ocean Park Projects' Off-site Improvements
1) Renovation and enhancement of the beach parking lot and
surrounding streets that consist of a landscaped central
park adjacent to the beach at the end of Ocean Park
- 3 -
Boulevard, a linear park along Barnard Way from the
southern City limit to Bicknell Avenue, landscaping and
restriping of the beach parking lot, reconstruction of
the pedestrian promenade and bikepath, and construction
of new concession and restroom facilities.
2) Rehabilitation and expansion of the Ocean Park Branch
Library.
3) Rehabilitation of 22 apartment units for very low income
households at 175 Ocean Park Boulevard.
4) construction of 12 units of rental apartments and 43
units of cooperative housing for low and moderate income
families located in several projects in the Ocean Park
neighborhood of the City.
Downtown Project Off-Site Improvements
1) Various improvements to the City's Third street Mall and
downtown district adjacent to the Downtown Redevelopment
Project were found to be "of-benefit" to the Downtown
proj ect. While primary funding for these improvements
has been provided by other sources, the Downtown Project
will likely provide funds for future improvements in the
area that are needed.
AGENCY OBJECTIVES AND ACTIVITIES FOR FISCAL YEAR 1986-87
In Fiscal Year 1986-87, the Santa Monica Redevelopment Agency
accomplished its objectives for the Fiscal Year and conducted the
following activities:
Ocean Park Projects
Objective:
Complete construction of the Ocean Park
Redevelopment Proj ect beach plan and monitor
implementation of off-site housing improvements.
workplan:
1)
Monitor construction of the Beach Plan and
related on-site improvements.
2) Monitor private developer implementation of
Citywide Housing Acquisition and
Rehabilitation Program (CHARP).
3) Coordinate implementation of Ocean Park
off-site Affordable Housing Program (55 units)
with the Housing Division:
a)
Monitor financing
dispostion.
plan
and
site
- 4 -
Monitor construction
developer.
Construction was successfully completed on the on-site Ocean View
Park in February 1987 and was nearly completed on the off-site
beach improvements by June 1987. (Completion of the beach
improvements was anticipated for September 1987.) The
rehabilitation of the apartments at 175 Ocean Park Boulevard was
substantially completed by June 1987 and construction commenced
on 12 units (of the 55 units) of rental housing. The Agency
completed pre-development site planning and design for the
remaining 43 units of cooperative housing.
b)
by
non-profit
Funds from the Ocean Park Redevelopment project Low and Moderate
Income Housing Trust Fund, combined with the Downtown Project
Housing Trust Fund, were used to assist in the construction of a
19 unit public housing project, for pre-development planning for
a 72 unit senior housing project, to rehabilitate 62 units of low
and moderate income senior and family housing, to assist in the
development of 22 units of low and moderate income family
housing, and in the construction of a senior shared housing
project.
Downtown project
Objective:
Monitor the housing activities resulting from the
Downtown Project and the preparation for
construction of the Third street Mall area
improvements which are "of benefit" to the Downtown
Project.
Workp1an:
I}
Monitor private developer implementation of
Citywide Housing Acquisition and
Rehabilitation Program (CHARP).
2) Monitor private developer implementation of
Vitale Gilpin assisted housing for low and
very low income persons and families.
3)
Coordinate with
construction of
improvements.
the City in preparing for
the Third street Mall area
During Fiscal Year 1986-87, the Agency coordinated with the city
in improving the Third street Mall and in expanding the parking
facilities in the downtown area. The Agency coordinated with the
City in the selection of an architect and the approval of a
conceptual design plan for the Third street Mall. The Agency
also coordinated with the City in selection of an architect,
approval of a design, and the preparation of plans for the
expansion of the public parking structure on the 1400 block of
4th street. Construction of improvements to the Third street
Mall are anticipated to commence in May 1988 and expansion of the
parking structure is expected to commence in January 1988.
- 5 -
In addition, the Agency administered the Downtown Low and
Moderate Income Housing Trust Fund. Funds from this trust fund,
combined with those from the Ocean Park Redevelopment Project Low
and Moderate Income Housing Trust Fund, were used to assist in
the construction of a 19 unit public housing project, for
pre-development planning for a 72 unit senior housing project, to
rehabilitate 62 units of low and moderate income senior and
family housing, to assist in the development of 22 units of low
and moderate income family housing, and in the construction of a
senior shared housing project.
The Agency also used its Vitale Gilpin housing funds to assist in
the housing projects described above. The Vitale Gilpin Fund is
a legal settlement requiring the Agency to set aside a portion of
the tax increment revenue generated by the Downtown Redevelopment
Project to fund programs that provide housing for low and very
low income persons and families.
AGENCY OBJECTIVES FOR FISCAL YEAR 1987-88
The Agency has the following objective for the upcoming Fiscal
Year 1987-88:
Ocean Park Redevelopment Projects
Objective
Monitor implementation
improvements resulting
Projects.
of
from
off-site housing
the Ocean Park
Downtown Redevelopment project
Objective
Complete the design and working drawings for public
improvements for the Third street Mall common area
and begin construction on key elements of the
project.
Monitor the housing activities resulting from the
Downtown Project.
AGENCY ACTIVITIES AFFECTING HOUSING AND DISPLACEMENT
The Santa Monica Redevelopment Agency contributed funds to
finance the construction or rehabilitation of 252 units of low
and moderate income housing that were in various stages of
development in FY 1986-87. Of these 252 units, 146 units were in
housing projects that were in the the predevelopment or
construction phase and 106 units were in projects that received
their Certificate of Occupancy during the Fiscal Year.
Government Code Section 33080.4 requires that the Annual Report
include the following information concerning displacement of
residents, demolition of units, and provision of housing
activities of redevelopment projects during the fiscal year.
- 6 -
Information concerning the prov1s1on of housing is to include any
agency-assisted housing regardless of the agency's funding source
and is to include only that housing available for occupancy in
the fiscal year.
In Fiscal Year 1986-87, 106 units of Santa Monica Redevelopment
Agency assisted housing was available for occupancy. The
remaining 146 units were in housing projects that were in
predevelopment and construction phases.
Housing Activities
No. of units
Project areas
Aqency
Off-site Downtown D.P. la D.P. lb
o
o
o
o
o
o
o
o
o
o
o
o
106
o
o
o
Activity
The total number of
households, including
households for persons and
families of low or moderate
income, that were displaced
or moved from their dwelling
units as part of a
redevelopment proj ect of the
Agency during the previous
fiscal year.
The total number of
households that the Agency
estimates will be displaced
or will move from their
dwellings as part of a
redevelopment proj ect of the
Agency during the present
fiscal year.
The total number of dwelling
units housing persons and
families of low and moderate
income which were destroyed
or removed from the low and
moderate income housing
market during the previous
fiscal year as part of a
redevelopment proj ect of the
Agency.
The total number of
Agency-assisted units
constructed, rehabilitated,
acquired, or subsidized for
occupancy at an affordable
cost to persons and families
of low and moderate income.
- 7 -
Of these 106 units that received their certificates of Occupancy
in the Fiscal Year, 39 units were occupied by very low income
households and 67 units were occupied by low and moderate income
households.
status and Use of the LoW and Moderate Income Housing Fund
Of the total 252 units of Agency assisted housing in various
stages of development in FY 1986-87, the Agency's Low and
Moderate Income Housing Trust Fund provided funds for the
construction and rehabilitation of 91 units of housing for very
low, lower, and low/moderate income households. Most of these
units (84 units) received their Certificates of Occupancy in FY
1986-87 and the remaining 7 were under construction. Of the 91
units, 19 units were for households with very low incomes, 52
units were for households with lower incomes, and 20 units were
for households with low and moderate incomes.
RECOMMENDATIONS CONCERNING NEEDED LEGISLATION
Pursuant to Health and safety Code section 33080, this report
should transmit any recommendations concerning needed legislation
for redevelopment agencies. At this time, there are no bills
before the state Legislature which could have an impact on the
Agency's ability to carryon a program of redevelopment given the
status of both project areas. Therefore, no recommendations
regarding needed legislation are provided. The Agency will
continue to monitor legislative information on items concerning
redevelopment.
Prepared by: Christopher Rudd, Sr. Administrative Analyst
Economic Development Division
community and Economic Development Department
Candy Rupp, Housing Manager
Community and Economic Development Department
Mike Dennis, Director of Finance
Bill Jias, Senior Accountant
raannrpt
- 8 -
KPMG-Peat Marwick
THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA, CALIFO~~IA
Combined Financial Statements
June 30, 1987
(With Accountants' Report Thereon)
KPMG Peat Marwick
Certified Public Accountants
Peat MSfWlck Mam 8< Co
725 South Figueroa Street
Los Angeles CA 90017
The Members of the Redevelopment Agency of
the City of Santa Monica, California:
We have examined the combined balance sheet of the Redevelopment Agency of the
City of Santa Monica, California as of June 30, 1987 and the related comblned
statement of revenues, expenditures and changes in fund balances for the year
then ended. Our examination was made in accordance with generally accepted
auditing standards and, accordingly, lncluded such tests of the accounting
records and such other auditing procedures as we considered necessary in the
circumstances.
In our opinion, the aforementioned combined financial statements present fairly
the financial position of the Redevelopment Agency of the City of Santa Monica,
Callfornia at June 30, 1987 and the results of its operations for the year then
ended, in conformity with generally accepted accounting principles applied on a
basis consistent wlth that of the preceding year.
M~~/t:;
September 11, 1987
.vemoer Finn of
Klyn'eld Peat t,,~a'-wlck G::}erdele'-
Assets
Cash and investments (note 2)
Cash and investments - restricted for
projects (note 2)
Property tax increments receivable
Interest receivable
Investments ma1ntained witn f1scal agent -
restricted assets (note 4)
Accounts receivable
Capitalized lease receivable (note 5)
Amount available in Debt Serv1ce Fund
Amount to be provided for payment of
long-term debt (note 5):
Capitalized lease receivable
Other sources
Liabilities and Fund Balances
Liabili ties:
Contracts payable
Accounts payable and accrued expenses
Deferred revenue (note 5)
Bonds payable (note 3)
Notes payable to the City (note 3)
Total liabilities
Fund balances:
Reserved for debt service
Designated for continuing cap1ta1 projects
Unreserved - undesignated
THE REDEVELOPM
CITY OF SANTA !
Combined 1
June
Downto.
Redevelol
proJe(
$ 926
774
12
8
154.
13,190.
$ 15,067
$
201
13,190
13,391.
2,625.
(949.
Total fund balances 11676
Total liabilities and fund balances $ 15,067.
See accompanying notes to combined financial statements.
THE REDEVELOPMB~T AG~~CY OF THE
CITY OF SANTA MONICA, CALIF01L~IA
Comb~ned Statement of Revenues, Expend1
and Changes in Fund Balances
Year ended June 30, 1987
Downtov.'1l
Redevelopment
Pro jec!:
PrOject revenues:
Incremental property taxes
Interest
Rent
Other
$ 647,305
333,114
1,189,705
115,226
Total project revenues 2,285,350
Less project expenditures:
Program salaries and administrative costs,
including technical and professional
personnel 938,422
Interest
Bond principal payment
Housing 472,829
Total project expenditures 1,411,251
Excess (deficiency) of revenues
over expenditures 874,P,~9
Other financing sources (uses):
Increase (decrease) in long-term advances
from the City of Santa Monica (893,057)
Transfers in
Transfers out, including transfers to the
City of Santa Monica of $505,708 (1,638,723)
Total other financ~ng sources (uses) (2,531,780)
Excess (deficiency) of revenues and
other financing sources over
expenditures and other financing
uses (1,657,681)
Fund balances at beginning of year 3,333,944
Fund balances at end of year $ 1,676,263
See accompanying notes to combined f~nancial statements.
Dee.
Redel
p]
1,(
h
3 '
,
~
~
c~
(I
-.i
(3,
~
h
THE REDEVELOPMENT AGENCY OF THE
CITY OF S&~TA MONICAt CALIFORNIA
Notes to Comb~ned Financial Statements
June 30t 1987
(1) Summary of Sianificant Ac~ounting Policies
General
The Redevelopment Agency of the City of Santa Monica (Agency) was
established by the Santa Monica City Council in 1957 pursuant to the
Community Redevelopment Law of California as codified in the State of
Cal~fornia Health and Safety Code. The purpose of the Agency is to
el~m~nate blight and to promote economic revitalization within designated
project areas of the City of Santa Monica.
Local funds are provided principally from incremental property taxes and
rentals for parking facilities.
B~sis of Accountins
The accompanying combined financial statements of the Agency have been
prepared on the modif~ed-accrual basis of account~ng. The modified-
accrual basis of accounting is defined as the bas~s of accounting under
wh~ch revenues are recognized when they become both measurable and
available to finance operations of the current period. Expenditures are
recognized when the related liability is incurredt except for principal
and ~nterest on general long-term debt~ wh~ch is recognized when due.
lnvestments
lnvestments are stated at cost and generally consist of Federal
Government-backed securities (note 2).
Lon~-Term Liabilities
Long-term liabilities are accounted for in the General Long-Term Debt
Account Group.
1
THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA, CALIFORNIA
Notes to Combined Financial Statements, Continued
Tax Increment Revenues
Incremental property taxes are considered as project revenues by the
Agency when they become both measurable and available for financing the
Agency's redevelopment activities during the year. Property taxes are
considered available if rece~ved within 60 days following year-end in
accordance with generally accepted accounting principles.
Incremental property tax revenues represent property taxes collected from
the excess of taxes levied and collected each year on any redevelopment
project over that amount which would have been levied and collected on
the base year property tax assessment. A property tax base year is
determined to be the year prior to the establishment of a redevelopment
project area.
Reportins Entity
The Redevelopment Agency of the City of Santa Monica is a component unit
of the City of Santa Monica as defined by the National Council on Govern-
mental Accounting's Statement No.7 as adopted by the Governmental
Accounting Standards Board. As such, the operations of the Agency are
also included in the Comprehensive Annual Financial Report of the City of
Santa Monica.
Total Column
The column in the accompany~ng comb~ned financial statements captioned
"Total (memorandum only)" ~s not necessary for a fair presentation in
accordance with generally accepted accounting principles, but is
presented as additional analytic data.
(2) Gash and Investments
Cash and investments of the Redevlopment Agency are pooled and invested
with all other idle funds of the City of Santa Mon~ca. The Redevelopment
Agency's portion of this pooled amount was $3,366,121 at June 30, 1987.
In addition, $2,391,812 was held by fiscal agents in accordance with bond
indenture agreements (note 4). The following summarizes total pooled
cash and investments for the City of Santa Monica as a whole:
D~posi ts
As of June 30, 1987, the amount of the City of Santa Monica's deposits
was $661,809. This represents both the carrying amount and the bank
balance.
2
THE REDEVELOPl'lliNT AGENCY OF THE
CITY OF SANTA MONICA, CALIFORNIA
Notes to Comb~ned F~nancial Statements, Continued
Investments
The City of Santa Mon2ca manages its pooled idle cah ~nveBtment
the guidelines of the State of California Government Code 56301
specifically authorizes investments 1n the following instrument
treasury bills, treasury notes, Federal agency secur~ties, bank
acceptances, nonnegotiable cert~ficates of deposit and commerCl
All investment activities are conducted wlth banks and savlngs
associations specifically approved by resolution of the Santa ~
Council.
The City of Santa Monica's 1nvestments are categorized in the i
table:
Category 1 - Includes investments that are insured or regJ
for which the securities are held by the City or its agent
City's name.
Cate&ory 2 - Includes un~nsured and unregistered 1nvestmeI
which the securities are held by the broker's or dealer's
department or agent in the Cityts name.
Category 3 - Includes uninsured and unregistered investmet
wh1ch securit~es are held by the broker or dealer or by i1
department or agent but not in the City's name.
Bankers' acceptances
Certificates of deposit
Federal agencies
Treasury notes
Investments held in trust
by banks and savings
and loan associations
on behalf of the City
of Santa Monica
Category 1
Insured or
registered
held by City
$ 10.724,236
500,000
15,396,773
28,110,997
Category 2
Uninsured
trust dept.
Ci ty .nam~
Catl
Un,
not
Cil
22,'
Subtotal
40,335,598
$ 95,067,604
22.,
State Treasurer's Local
Agency Investment Fund
Total investments
* All certificates of deposit are backed by 110% market value
as required by California state law. Collaterals are held i
major banks and monitored by the State Superintendent of Ban
3
THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA, CALIFORNIA
Notes to Comb~ned F~nancial Statements, Continued
(3) Bonds and Notes Payable
On November 2, 1978, the Agency authorlzed the offering of $14,4
Downtown Redevelopment ProJect Parking Lease Revenue Bonds. Pro-
from the bonds have been used by the Agency to finance the acqul
and constructlon of two garages (the Park1ng Facility), which pr
park~ng faci1it1es for a major shopping center in tne City of Sa
Monica.
On October 1, 19B4, the Redevelopment Agency author1zed the offe
t5,700,000 in Ocean Park ProJect Bonds in order to prov~de addlt
funds to aid in financing projects known as Ocean Park Project n
l(a) and l{b).
A summary of project bonds payable accounted for in the Agency's
Long-Term Debt Account Group at June 30. 1987 is as follows:
Annual
Date of Interest Outstanding. princiJ:
Bond issue issue rate June 30, 1987 requireme
Ocean Park Project
Bonds 10/1/84 8.75-10.75% $ 5,700,000 Various al[
from $S
to $62(
Downtown Redevelop-
ment Project-
Bonds 12/1/78 6.25- 7.75 13,190,000 Various all
froD! $~
to $1,]
Total bonds outstanding $ 18,890,000
In addition, the Agency was indebted to the City of Santa Monice
following general loans, wi th interest per annum accrulng on pr_
only, as follows:
Date Original
of amount Intt
Note payable to note of note r.
City of Santa Monica General Fund 1/1/87 $ 512,385
City of Santa Monica General Fund 1/1/87 925,145 6.
City of Santa Monica CDBG Fund 1/1/87 2.266,586 6.
City of Santa Monica General Fund 1/1/87 1,461,357 6.
City of Santa Monica General Fund 1/1/87 1,100.129 6.
City of Santa Monica CDBG Fund 1/1/87 399,795 6.
City of Santa Monica General Fund 1/1/87 6,555.080 7.
-
Total $ 13,220/477
The above bonds and notes are payable when future tax ~ncrement
are rece~ved by the proJects. It 1S not anticipated that these
will be repaid with available spendable resources.
4
THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONrCA~ CALIFORNIA
Notes to Combined Financial Statements~ Continued
(4) Investments Maintained by F1scal Agent
A. ~owntown Redevelopment Project
As part of the covenants for the Agency's DOwntOlnl Redevelopment
Project Parking Lease Revenue Bonds, the fiscal agent is required to
maintain three separate cash funds, as follows.
Bond Service Account
Monies are transferred into this account each May 15 in amounts
equal to interest due on the next ensuing interest payment dates.
In addition, on each November 15, an amount equal to the principal
amount of bonds maturing on the next ensuing December 1 is
transferred into th1s account.
Uorking Capital Account
The amounts provided in this account are to be used to pay any taxes
and assessments levied on the Agency's interest in the leased
premises, insurance premiums~ annual fiscal costs of maintenance and
operation if the City defaults on the lease. The fund is to be
maintained at 55,000.
Reserve Fund Account
An amount equal to at least the maximum annual debt service amount
over the life of the bonds is to he ma1ntained in this account.
Monies in the Reserve Fund may be used by the Agency; first~ for the
payment of losses sustained by reason of accident or destruction of
the Parking Facility financed by issuance of the bonds and not
covered by the required insurance, so long as the balance remaining
in the Fund is equal to 50% of maximum annual debt service; second,
to help redeem the bonds outstanding under circumstances where the
Parking Fac11ity is not to be repaired or rebuilt; and third, for
the payment of interest on, and principal of, the bonds in the ~vent
that no other funds are ava1lable therefore or for the final
retirement of all bonds then outstanding.
5
THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICAi CALIFORNIA
Notes to Combined Financial Statements, Continued
At June 30, 1987, the aforementioned accounts reflected the
following balances:
Downtown
Project Bonds
Bond Service Fund
IJorking Capital Fund
Reserve Fund
~ 441,508
5,000
1,189,705
Total
$ ;1-,636,213
B. Ocean Park Redevelopment Project
As part of the covenants for the Agency's Ocean Park Project Bonds,
the fiscal agent 1S required to maintain the following cash fund.
Bond Service Account
Monies are transferred into this account each ~ay 15 ~n amounts
equal to interest due on the next ensuing interest payment dates.
In addition, on each August 15, an amount equal to the principal
amount of bonds maturing on the next ensuing October 1 15
transferred into this account.
At June 30, 1987, the aforementioned account had a balance of
$755,599.
(?) Capitalized Lease
On May 1, 1978, the City of Santa Monica entered 1nto a lease agreement
with the Agency to provide parking for the shopping center in the
Downtown Project. The lease requires the City to pay the Agency a base
rental at an estimated rate of approximately $1,190,000 per year, and in
addit~on, the lease requires the City to make additional payments each
year sufficient to operate and maintain the Parking Facility. The lease
extends for a period of 35 years or repayment of the bonds issued to
finance construction of the Parking Facility, whichever occurs earlier.
Upon termination of the lease, ownership of the Parking Facility will
rest with the City. Such lease meets the cr~teria of a capitalizable
financing lease; however, in accordance with generally accepted account-
ing principles, this long-tern rece~vable is recorded in the Downtown
Project Fund with an offsetting equal amount of deferred revenue since it
does not represent available spendable resources. At June 30, 1987, the
present value of the lease payments receivable from the City was
$13,190,000.
6
KP1IIf8~ Peat Marwick
CertIfied Public Accountants
Peat Marwlck MaIO & Co
725 South Figueroa Street
Los Angeles, CA 90017
The Board of Directors
The Redevelopment Agency of the
City of Santa Monica, California:
We have examined the combined financial statements of the Redevelopment Agency
of the City of Santa Monica, California (Agency) as of and for the year ended
June 30, 1987 and have issued our report thereon, dated September 11, 1987.
Our examination was made in accordance with generally accepted auditing
standards and, accordingly, included such tests of the accounting records and
such other auditing procedures as we considered necessary in the
circumstances.
We performed the procedures contained in the publication entitled Guidelines
for Compliance Audits of California Redevelopment Agencies as promulgated by
the Controller of the State of California in connection with a review of the
Agency's compliance with laws, regulations and administrative requirements
governing activities of the Agency, as required by Section 33080.l(a) of the
Health and Safety Code of the State of Ca11fornia. The procedures we performed
would not necessarily disclose instances of noncompliance because they were
based on selective tests of accounting records and related data.
During the performance of the aforementioned procedures, nothing came to our
attention that would lead us to believe that the Agency did not comply with
applicable laws, regulations and administrative requirements governing its
activities. This report is to be used solely for filings with appropriate
regulatory agencies and is not intended for any other purpose.
Ad~~~c;.
September 11, 1987
MElTlber F_r...... c1
i<: -,''1w"eld Pei!~ t...-'larwll:;k Go-erdele-'