Successor Agency to the
Redevelopment Agency of the City of Riverside
Independent Auditor’s Reports and Financial Statements
June 30, 2022
Prepared by the City of Riverside
Edward Enriquez, Chief Finance Officer/Treasurer
3900 Main Street, Riverside, California 92522
Successor Agency to the Redevelopment Agency of the City of Riverside Contents
Independent Auditor’
s Report ....................................................................................................................... 1 Financial Statements
Statement of Fiduciary Net Position/(Deficit) ............................................................................................. 4 Statement of Changes of Fiduciary Net Position/(Deficit) ......................................................................... 5 Notes to Financial Statements ................................................................................................................... 6 Independent Auditor’s 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 .................................................................................. 14
203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
INDEPENDE
NT AUDITORS’ REPORT
To the Honorable Members of the Oversight Board
Successor Agency to the Redevelopment Agency of the City of Riverside City of Riverside, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the Successor Agency to the Redevelopment Agency of the City of Riverside (the Successor Agency), a fiduc iary component unit of the City of Riverside, California, (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Successor Agency’s financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the fiduciary net position of the Successor A gency to the Redevelopment Agenc y of the City of Riverside as of June 30, 2022, and the changes in fiduciary net position for th e year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards ge nerally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our r esponsibilities under those standards are further described in the Auditor’s Responsibiliti es for the Audit of the Financial Statements section of our report. We are required to be independent of the Successor Agency and to meet our other ethical responsibilities, in accordance with the relevant ethic al requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Successor Agency to the Redevelopment Agency of the City of Riverside and do not purport to, and do not present fairly the financial position of the City as of June 30, 2022, or the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presenta tion of these financial statements in accordance with accounting prin ciples generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control rel evant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
To the Honorable Members of the Oversight Board
Successor Agency to the Redevelopment Agency of the City of Riverside City of Riverside, California
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial dou bt about the Successor Agency’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with G AAS and Government Auditing Standards will always detect a material mi sstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, mi srepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures inclu
de examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement
s.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effective
ness of the Successor Agency’s internal control. Accor dingly, no such opinion i s exp
ressed.
Evaluate the appropriateness of accounting policies used and t he reasonableness of significant accounting estimates made by management, as well as evaluate th e overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or eve nts, considered in the aggreg ate, that
raise substantial doubt about the Successor Agency’s ability to continue as a going concer n for a reasonable period of time.
We
are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Other Reporting Responsibilities
Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presente d to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standar ds Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 2 To the Honorable Members of the Oversight Board
Successor Agency to the Redevelopment Agency of the City of Riverside City of Riverside, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated January 26, 2023, on our consideration of the Successor Agency’s internal control over financial reporting and on our tests of its compliance with certain provisions of l aws, regulations, c ontracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and th e results of that testing, and not to provide an opinion on the effectiveness of the Successor Agency’s inter nal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Successor Agency’s internal control over financial reporting and compliance.
Brea, California
January 26, 2023
3 4
Successor Agency of the Redevelopment Agency of the City of Riverside State
ment of Fiduciary Net Position/(Deficit)
For the year ended June 30, 2022
(amounts expressed in thousands)
Assets
Cash and investments $ 27,851
Cash and investments with fiscal agent 4,033
Receivables:
Interest 56
Accounts 475
Intergovernmental 795
Notes 1,989
Direct financing lease receivable 7,570
Leases receivable 826
Deposits 2
Land and improvements held for resale 7,361
Capital assets:
Land 185
Total assets 51,143
Liabilities
Accounts payable 392
Accrued interest 2,419
Adv ances from City of Riv erside 2,454
Noncurrent liabilities
Due within one year
Long-term obligations 7,143
Due in more than one year
Long-term obligations 171,467
Total liabilities 183,875
Deferred Inflows of Resources
Deferred charge on refunding 693
Deferred inflows from leases 820
Total deferred inflows of resources 1,513
Net Position/(Deficit)
Restricted for other governments (134,245)
Total net position/(deficit) $ (134,245)
The note
s to financial statements are an integral part of this statement. 5 Successor Agency to the Redevelopment Agency of the City of Riverside State
ment of Changes in Fiduciary Net Position/(Deficit)
For the year ended June 30, 2022
(amounts expressed in thousands)
Additions
Property tax revenue 16,012 $
Rental and investment income (87)
Miscellaneous 36
Total additions 15,961
Deductions
Professional services and other deductions 2,133
Redevelopment projects 123
Interest expense 6,173
Total deductions 8,429
Change in Net Position 7,532
Net position/(deficit) - beginning (141,777)
Net position/(deficit) - ending (134,245)$
The note
s to financial statements are an integral part of this statement.
Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements
For the year ended June 30, 2022 (amounts expressed in thousands) 6 Note 1. Description of Reporting Entity and Summary of Significant Accounting Policies A. Re
porting entity: The Redevelopment Agency of the City of Riverside (Redevelopment Agency) was establi
shed in 1967 to provide affordable housing, revitalize communities, eliminate blig ht, and fuel eco
nomic growth through focused reinvestment of local funds back into local projects and programs that supported job growth and private investment.
There are six project areas throughout the City of Riverside (City) including Arlington, Casa Blanca, merged Downtown/Airport, Industrial/Hunter Park/Northside, La Sierra/Arlanza, Magnolia Center, and University Corridor/Sycamore Canyon (Project Areas). Over the years, the Re development Agency was active in implementing housing programs, business incentiv e programs, commercial improvement programs, planning and development of projects, capital improvement projects, and property acquisition in the Project Areas.
On June 29, 2011, Governor Brown signed Assembly Bill 1X 26 (AB 1X 26) eliminating redevelopment agencies throughout the state. On July 18, 2011, the California Redevelopment Association and the League of California Cities filed a lawsuit against the State of California (State) in response to the passage of AB 1X 26. On December 29, 2011, the California Supr eme Court upheld AB 1X 26. The bill provided that upon dissolution of the Redevelopment Agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government.
Pursuant to City Council actions taken on March 15, 2011, and January 10, 2012 the City elected to serve as the Successor Agency to the Redevelopment Agency of the City of Riverside (Successor Agency). The Successor Agency is a separate legal entity, which serves as a custodian for the assets and liabilities of the dissolved Redevelopment Agency pending distribut ion to the appropriate taxing entities after the payment of enforceable obligations. The activity of the Successor Agency is overseen by an Oversight Board comprised of individuals appointed by variou s government agencies and the City of Riverside as Successor Agency of the former R edevelopment Agency. In 2018, the ov ersight was transferred to the Riverside Countywide Oversight Board, as a result of state legislation that consolidated all oversight boards of successor agencies. The Countywide Oversight Board was created to oversee the wind down activities of the various successor agencies in Riverside County.
In 1987, the Riverside Public Financing Authority (Aut hority), a non-profit corpor ation, was created as a joint-powers authority between the former Redevelopment Agency and the City to serve as a conduit for the issuance of bonds to fund impr ovements in various redevelopment project areas. The Authority has issued tax allocation bonds secured by loan agreements between the former Redevelopment Agency and the Authority. These loan agreements are secured by a first pledge of and lien on a portion of property tax revenues within the respective project areas. Financial data of the Authority is included in the activity of the Successor Agency. Separate Authority financial stat ements may be obtained from the City's Finance Department, 3900 Main Street, Riverside, California 92522.
B. Measure
ment Focus, Basis of Accounting, and Financial Statement Presentation: The Successor Agency i
s presented herein as a private-purpose trust fund and is reported using the economic resources measurement
focus and the accrual basis of accounting.
Successo
r agencies will only be allocated revenue in t he amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former Redevelopment Agency until all enforceable obligations of the former Redevelopment Agency have been paid in full and all assets have been liquidated. Such funds are paid from the Redevelopment Property Tax Trust Fund (RPTTF), which is administered by the County Auditor-Co ntroller of the County of Riversid e (County Auditor-Controller). In January and June of each year, the County Audito r-Controller allocates revenue from the RPTTF to each successor agency for payments listed on the Recognized Obligation Payment Schedule (ROPS) for each six-month period. Property taxes are recognized as reven ues in the year for which they are levied.
Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 7 C. Cash and Investments
The Succe
ssor Agency's cash and investments, exc ept for cash and investments with fiscal agents, are invested in a pool managed by the Treasurer of the City. The Successor Agency does not own specific, identifiable investments of the pool. The pooled intere st earned is allocated monthly based on the month end cash balances. The pooled funds are not subject to level 1, 2, or 3 of the fair value hierarchy prescribed by Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application.
The City values its cash and investments in accordan ce with the provisions of Governmental Accounting Standards Board Statement No. 72 (GASB 72), Fair Value Measurement and Application, which requires governmental entities to use valuation techniques th at are appropriate under the circumstances and for which sufficient data are available to measure fair value. The techniques should be consistent with one or more of the following approaches: the market approach, the cost approach or the income approach.
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of assets. Level 1 are quoted prices in an active mark et for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City does not value any of its investments using Level 1 and Level 3 inputs. The levels of valuation inputs are as follows:
Level 1 – Quoted prices for identical assets or liabilities in an active market Level 2 – Observable inputs other than quoted market prices; and Level 3 – Unobservable inputs
Cash accounts of all funds are pooled for invest ment purposes to enhance safety and liquidity while maximizing interest earnings.
Citywide information concerning cash and investm ents for the year ended June 30, 2022 including authorized investments, custodial credit risk, credi t and interest rate risk for debt securities, and concentration of investments, carrying amount, and market value of deposits and investments may be found in the notes of the City’s “Annual Comprehensive Financial Report” at https://riversideca.gov/finance/acfr D. Cas
h and Investments with Fiscal Agent
Ca
sh and investments maintained by fiscal agents are considered restricted because their use is limited by applicable bond covenants. Provisions of debt agreem ents govern investments of debt proceeds held by bond fiscal agents. Permitted investments are specified in the related trust agreements and include the following types of investments:
Investments in money market funds rated in the single highest classification Investments in the Local Agency Investment Fund (State Investment Pool) No maximum percentage of the related debt issue or maximum investment in one issuer is specified.
Cash and investments with fiscal agent are as follows:
Total
12 Months
or Less
13 to 24
Months
25 to 60
Months
Money Market Funds 2,789 $ 2,789 $ - $ - $ State Investment Pool 1,244 1,244 - -
Total 4,033$ 4,033 $ - $ - $
Remaining Maturity (in Months)
Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 8 Total AAA A Unrated
Money Market Funds 2,789 $ 2,789$ -$ -$
State Investment Pool 1,244 - - 1,244
Total 4,033$ 2,789$ -$ 1,244$
Ratings as of Year End
E. Land and Improvements Held for Resale
Land and im
provements held for resale were generally acquired for future development projects. The properties are carried at the lower of cost or net realizable value.
F. Leases
Lea
ses are defined by the general government as the right to use an underlying asset. As lessor, the Agency recognizes a lease receivable. The lease receivable is measured using the net present value of future lease payments to be received for the lease term and deferred inflow of receivables at the beginning of the lease term. Periodic amortization of the discount on the receivable are reported as interest revenue for that period. Deferred inflows of resources are recognized as inflow s on a straight-line basis over the term of the lease. This recognition does not apply to sh ort-term leases, contracts that transfer ownership, leases of assets that are investment s, or certain regulated leases. Any initial direct costs are reported as an outflow of resources for that period. Re-measu rement of lease receivables occur when there are modifications, including but not limited to changes in the contract price, lease term, and adding or removing an underlying asset to the lease agreements. In the case of a partial or full lease termination, the carrying value of the lease receivable and the related deferred inflow of resources will be reduced and will include a gain or loss for the difference. For lease contracts t hat are short-term, the Agency recognizes short-term lease payments as inflows of resources (revenues) based on the payment provisions of the lease contract.
Liabilities are only recognized if payments are received in advance, and receivables are only recognized if payments are received subsequent to the reporting per iod. Additional disclosures regarding regulated leases are in Note 3.
G. Bond Pre
miums
Bond p
remiums are deferred and amortized over the life of the bonds using the effective interest method.
Bonds payable are reported net of the applicable bond premiums.
H. Deferre
d Inflows of Resources
The statement of fiduciary net position reports a separate section for deferred inflows of resources.
Deferred inflows of resources represent inflows of resources (consumption of net position) that apply to future periods and that, therefore, are not recognized as an inflow of resources (revenue) until that time.
The deferred amount on refunding is deferred and amortized over the life of the bonds using the effective interest method. The deferred amount on refunding is re corded as a deferred inflow of resources. The deferred amount related to leases is reported for the value of lease receivable payments to be recognized as inflows of resources in a systematic and rational manner over the term of the lease agreements.
I. Use of Esti
mates
The pre
paration of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that can affect certain reported amounts and disclosures. Actual results could differ from those estimates.
Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 9 J. Implementation of G
overnmental Accounting Standards Board (GASB) Pronouncements At June 30, 2022, Governmental Accounting Standards Board No. 87 (GASB 87), Leases, has been implemented by the Agency. GASB 87 defines a lease as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. It requires recognition of certain lease assets and liabilities, for leases that were previously classified as operat ing leases, and establishes a single model for lease accounting. Under this Statement, a lessee is required to recognize a lease liability and an intangible right- to-use asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources.
Note 2. Notes and Direct Financing Lease Receivable
Rehabilitation Notes Receivable
Note
s receivable consist of $1,989 of rehabilitation loans. The loans were granted for a period of up to 55 years and bear interest at rates from 0 to 12 percent, which are secured by deeds of trust to individuals and businesses.
Direct Financing Lease Receivable
The former Redevelopment Agency had a direct financ ing lease arrangement with the State for the California Tower Office Complex, located in the merged Downtown/Airport Industrial/Hunter Park/Northside. The Agreement is for a thirty-year period and at maturity the ownership of California Tower will be transferred to the State. The lease calls fo r semi-annual payments not less than the debt service owed on the related lease revenue bonds issued by the former Redevelopment Agency for the purchase and renovation of the building. The future minimum lease payments to be received are as follows:
Fiscal Year Amount
2023 2,759
2024 2,786
2025 2,823
Total Due 8,368
Less: Amount applicable to interest (798)
Total direct financing lease receivable 7,570$
Note 3. Leas
es Receivable
For the year ended June 30, 2022, the financial stat ements include the adoption of GASB Statement No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. Th is statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset.
Between February 2006 and December 2018, the Agency ente red into nine lease agreements for building and structures as the lessor, with the latest lease ending January 2028. As of June 30, 2022, the value of the lease receivables is $826. The lessees are requir ed to make monthly fixed payments ranging from $2 to $10. The leases have an interest rate ranging between 0.52% to 1.24%. The various building and structures estimated useful life was 0 months as of the contract commencement. The value of the deferred inflow of resources as of June 30, 2022, was $ 820, and the Agency recognized lease revenues of $406 during the fiscal year. The leases do not include any options to extend.
Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 10 Principal and interest payments expected to maturity are as follows:
Fiscal Year Principal Interest Total
2023 370$
4$ 374$
2024 291 2 293
2025 104 1 105
2026 23 1 24
2027 24 - 24
2028 14 - 14
Total 826$
8$ 834$
Note 4. Long
-Term Obligations
Changes in Long-Term Obligations:
Below is a
summary of changes in long-term obligations during the fiscal year:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Lease revenue bonds 11,641 $ - $
(2,291) $ 9,350$ 2,399$
Tax allocations bonds 171,416 - (6,074) 165,342 4,710 Direct borrowings:
3,918 - - 3,918 34
186,975$ - $
(8,365) $ 178,610$ 7,143 $
Notes payable
Lea
se Revenue Bonds: Principal Outstanding
$26,25
5 State of California Department of General Services Project, 2003 Lease Revenue Refunding Bonds, Series A ar e secured by lease payments made by the State of California Department of General Services for the California Tower office building; 2% to 5% due in annual installments from $545 to $2,230 through October 1, 2024. The bonds are subject to acceleration under the Trust Agreement upon the occurrence of an event of default and with the consent of the Insurer. There is no remedy of acceleration of the total Base Rental over the term of the Lease.
$
6,265
$4,810 State of California Department of General Services Project, 2003 Lease Revenue Refunding Bonds, Series B ar e secured by lease payments made by the State of California Department of General Services for the California Tower office building; $310 serial bonds 1.20% to 1.42% through October 1, 2004; $620 term bonds at 3.090% due October 1, 2008; $1,110 term bonds at 4.340% due October 1, 2014 and $2,770 term bond s at 5.480% due October 1, 2024. The bonds are subject to acceleration under the Trust Agreement upon the occurrence of an event of default and with the consent of the Insurer. There is no remedy of acceleration of the total Base Rental over the term of the Lease. 995 In 2019, the 2012A Lease Revenue Refunding bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency to properly reflect their proportional share.
$41,240 Lease Revenue Refunding Bonds, Series 2012A. The bonds are secured b
y lease payments on a portion of the City Hall Complex and the Lincoln Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 11 Police Patrol Center. The bonds were issued to refin ance the 2003 Certificates of Participation. Interest on the bonds is payable semi-annually on May 1 and November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum depending on maturity date. Principal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and ending November 1, 2033. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. $2,415 relates to the Successor Agency 1,941
Subtotal 9,201
Add: Unamortized bond premium 149
Total Lease Revenue Bonds $ 9,350
Remaining debt service will be paid by the Successor Agency from future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2023 2,399$ 392$
2,791$
2024 2,556
267
2,823
20 25 2,716
135
2,851
20 26 141
64 205
20 27 147
58 205
20 28-2032 850
174
1,024
20 33-2037 392
16 408
Pr
emium 149
-
149
To
tal 9,350$ 1,106$ 10,456$
Tax Allo
cation Bonds: Principal Outstanding
The Succe
ssor Agency Tax Allocation Bonds are secured by tax revenues deposited in the Redevelopment Property Tax Trust Fund for the Agency established and held by the County of Riverside Auditor-Controller pursuant to Section 34813(a)(2) of the Dissolution Ac t. Upon event of default, the principal due on the Bonds is subject to acceleration.
$62,980 Subordinate Tax Allocation Refunding Bonds (2014 Series A and B).
The bonds were issued to refund certain obligations of the former Redevelopment Agency. Interest is due semi-annually on March 1 and September 1, commencing March 1, 2015. Principal is due in annual installments from $160 to $4,745 through September 1, 2034. The rate of interest varies from 0.6% to 5% per annum. 32,980
$114,815 Tax Allocation Refunding Bonds (2018 Series A and B). The bonds were issued to refund the 2007 Riverside Public Financing Authority Redevelopment Agency Tax Allocation Bonds (Series A, B, C and D). Principal is payable in annual installments from $140 to $9,180 through September 1, 2037. The rate of interest varies from 3.125% to 5% per annum. The refunding transaction resulted in a total net present value savings of $20,000.
Subtotal
114,815
147,79
5 Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 12 Add: Unamortized bond premium 17,547
Total Tax Allocation Bonds $165,3 42
Remaining debt service will be paid by the Successor Agency from future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2023 4,710$ 6,823$ 11,533$
2024 10,280 6,450 16,730
2025 10,690 5,928 16,618
2026 10,795 5,392 16,187
2027 11,135 4,844 15,979
2028-2032 48,915 16,512 65,427
2033-2037 44,435 5,835 50,270
2038-2042 6,835 137 6,972
P
remium 17,547 -
17,547
Total 165,342$ 51,921$ 217,263$
Dire
ct Borrowings: Notes Payable: Principal Outstanding
These notes payable have been issued to promote development and expansion within the Cit
y’s redevelopment areas.
Pepsi Cola Bottling Company of Los Angeles, 10.5%, payable in net annual installme
nts of $341, subject to recording of completion. Interest accrues on the outstanding note balance upon issuance of the Certificate of Completion.
Principal and interest on the note are pa yable solely from Project Property Tax Increment. Payments start upon the time sufficient increment is generated in one year to pay the annual principal and interest on the note. Upon 25 years from the first anniversary date of the certificate of completion, all unpaid principal together with any accrued interest will be forgiven. $ 2,987
Smith’s Foo
d and Drug Centers Inc., 6% payable in variable installments, subject to payment of annual Community Facilities District assessment. The note is secured under a developer a
greement.
931
Total Notes
Payable $ 3,918
Succes
sor Agency to the Redevelopment Agency of the City of Riverside Notes to Financial Statements (Continued)
For the year ended June 30, 2022 (amounts expressed in thousands) 13 Remaining debt service will be paid by the Successor Agency fro m future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2023 34$ 307$ 341$
2024 38 304 342
2025 42 300 342
2026 46 295 341
2027 51 291 342
2028-2032 349 1,360 1,709
20 33-2037 576 1,134 1,710
20 38-2042 948 761 1,709
20 43-2047 1,834 807 2,641
To
tal 3,918$ 5,559$ 9,477$
Note 5. Advances from the City of Riverside
The former Redevelopment Agency had entered into various arrangements with the City. The State of California, Department of Finance had concluded that certain loans were not enforceable obligations, which would have resulted in the repayment of only 80 percent of the loans. The City sued the State of California, Department of Finance and in July 2013, a Sacrament o County Superior Court ruled that the loans are enforceable obligations and therefore must be repaid in full. The outstanding Advance from the City of Riverside at June 30, 2022 was $2,454, which is related to the Riverside Golf Course acquisition. The Advance from the City of Riverside will be paid with future property tax revenues.
Note 6. Net Position/(Deficit)
The deficit in the Successor Agency Trust Fund will be reduced over the years as the related debt is paid- off with funds received from the RPTTF, which is administered by the County Auditor-Controller.
203 N. Brea Blvd., Suite 203
Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 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
To the Honorable Members of the Oversight Board
Successor Agency of the Redevelopment Agency
of the City of Riverside
We have audited, in accordance with the 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, the financial statements of the Successor Agency of the Redevelopment Agency of the City of Riverside (the Successor Agency), a fiduciary component unit of the City of Riverside, California, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which colle ctively comprise the Successor Agency’s financial statements, and have issued our report thereon dated January 26, 2023.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Successor Agency’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effecti veness of the Successor Agency’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Successor Agency’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that ther e is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and cor rected, on a timely basis. A significant deficiency is a deficiency, or a combinati on of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal c ontrol was for the limited purpo se described in the first paragraph of this section and was not designed to i dentify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitation s, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Successor Agency’s financial statements are free from material misstatement, we performed tests of its comp liance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was To the Hon
orable Members of the Oversight Board
Successor Agency of the Redevelopment Agency
of the City of Riverside
not an objective of our audit, and accordingly, we do not expre ss such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that a re required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of o ur testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Agency’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency’s internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
Brea, California
January 26, 2023
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