SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREAS NO. 1 AND 2 SUBORDINATE TAX ALLOCATION REFUNDING BONDS

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1 SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREAS NO. 1 AND 2 SUBORDINATE TAX ALLOCATION REFUNDING BONDS $97,190, SERIES A $23,055, TAXABLE SERIES B Riverside County, California Dated: December 23, 2013 Base CUSIP + : 50420B 2015 ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT As of March 31, 2016 Also available at: + Copyright, American Bankers Association. CUSIP data is provided by Standard and Poor s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP service. The issuer takes no responsibility for the accuracy of such number.

2 LIST OF PARTICIPANTS SUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY Rita Conrad Finance Director/Treasurer Calle Tampico La Quinta, California (760) DISCLOSURE CONSULTANT & DISSEMINATION AGENT Willdan Financial Services * Temecula, California (951) Report available for UNDERWRITER Southwest Securities, Inc. BOND COUNSEL Rutan & Tucker LLP Costa Mesa, California DISCLOSURE COUNSEL Stradling Yocca Carlson & Rauth a Professional Corporation Newport Beach, California TRUSTEE Brad Scarbrough U.S. Bank Trust, N.A. 633 West 5 th Street, 24 th Floor Los Angeles, California (213) * In its role as Disclosure Consultant and Dissemination Agent, Willdan Financial Services has not passed upon the accuracy, completeness or fairness of the statements contained herein.

3 TABLE OF CONTENTS I. INTRODUCTION... 1 II. BOND INFORMATION... 3 A. PRINCIPAL OUTSTANDING... 3 B. FUND BALANCES... 3 III. FINANCIAL INFORMATION... 3 A. AUDITED FINANCIAL STATEMENTS... 3 IV. OPERATING INFORMATION... 4 A. ASSESSED VALUATIONS AND GROSS TAX INCREMENT REVENUES... 4 B. TAX INCREMENT REVENUES... 5 C. REDEVELOPMENT PROPERTY TAX TRUST FUND (RPTTF) DISTRIBUTIONS... 6 D. DEBT SERVICE COVERAGE... 6 E. PROJECTED DEBT SERVICE COVERAGE... 7 F. TOP LOCAL SECURED TAXPAYERS... 8 V. REDEVELOPMENT AGENCY DISSOLUTION... 9 VI. OCCURRENCE OF LISTED EVENTS Successor Agency to La Quinta RDA

4 I. INTRODUCTION Pursuant to an Official Statement dated December 17, 2013, the Successor Agency to the La Quinta Redevelopment Agency (the Successor Agency ) issued $97,190,000 La Quinta Redevelopment Project Areas No. 1 and 2 Subordinate Tax Allocation Refunding Bonds, 2013 Series A (the Series A Bonds ) and $23,055,000 La Quinta Redevelopment Project Areas No. 1 and 2 Subordinate Tax Allocation Refunding Bonds, 2013 Taxable Series B (the Series B Bonds, and together with the Series A Bonds, the Bonds ). The proceeds of the Bonds were used to refinance the La Quinta Redevelopment Agency s (the Former Agency ) La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998; the La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Series 1998; the La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 2001; the La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 2002; and the La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Taxable Series The City of La Quinta (the City ), encompassing an area of approximately square miles, is located 127 miles east of Los Angeles and 20 miles east of Palm Springs in the eastern portion of Riverside County known as the Coachella Valley. Upon the dissolution of California redevelopment agencies effective February 1, 2012, the City elected to become Successor to the Former Agency. The Successor Agency is a separate public entity from the City and cannot be merged with the City, nor can the liabilities of the Former Agency be transferred to the City or the assets of the Former Agency become assets of the City. The Redevelopment Project Area No. 1 (the Project Area No. 1 ) encompasses an area of approximately 17.9 square miles (11,475 acres) accounting for approximately 50% of the total current corporate area of the City. The Redevelopment Project Area No. 2 (the Project Area No. 2, and together with Project Area No. 1, the Project Areas ) encompasses an area approximately 4.9 square miles (3,130 acres) accounting for approximately 14% of the total current corporate area of the City. The Bonds were issued on a subordinate basis to the Former Agency s loan obligation under the Loan Agreement, dated as of February 3, 2004 as supplemented by the First Supplemental Loan Agreement, dated as of June 1, 2004 (the 2004 Loan Obligation ) in connection with the La Quinta Financing Authority s (the Authority ) Local Agency Revenue Bonds, 2004 Series A (the 2004 Bonds ); the Former Agency s La Quinta Redevelopment Project Area No. 2, Subordinate Taxable Tax Allocations Bonds, Series 2011 (the 2011 Bonds ); and the Former Agency s loan obligation under the Loan Agreement, dated February 3, 2004 as supplemented by the Second Supplemental Loan Agreement, dated as of March 1, 2011 (the 2011 Loan Obligation ) in connection with the Authority s Local Agency Subordinate Taxable Revenue Bonds, 2011 Series A (the 2011 Series A Bonds, and together with the 2004 Loan Obligation, 2004 Bonds, 2011 Bonds and the 2011 Loan Obligation, the Senior Obligations ). Pursuant to an Official Statement dated June 17, 2014, the Successor Agency issued $65,600,000 La Quinta Redevelopment Project Areas No. 1 and 2 Tax Allocation Refunding Bonds, 2014 Series A (the 2014 Bonds ) on a senior basis to the Bonds. The proceeds of 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 1

5 the 2014 Bonds were used to refinance the outstanding 2004 Loan Obligation in connection with the 2004 Bonds. As such, no further updates will be provided for the 2004 Loan Obligation or the 2004 Bonds. The Bonds are special obligations of the Successor Agency payable from and secured by Pledged Tax Revenues, as defined in the Official Statement, to be derived from the Project Areas. Taxes levied on the property within the Project Areas on that portion of the taxable valuation over and above the taxable valuation of the base year property tax rolls deposited in the Redevelopment Property Tax Trust Fund ( RPTTF ) and, to the extent they constitute Pledged Tax Revenues, will be deposited in the Redevelopment Obligation Retirement Fund, and administered by the Successor Agency and the Trustee in accordance with the Indentures. The Bonds are not a debt of the City, the State of California (the State ) or any of its political subdivisions (except the Successor Agency) and neither the City, State nor any of its political subdivisions (except the Successor Agency) is liable therefor. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction. This Annual Continuing Disclosure Information Statement is being provided pursuant to a covenant made by the Successor Agency for the benefit of the holders of the Bonds and includes the information specified in a Continuing Disclosure Agreement. For further information and a more complete description of the Successor Agency and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the Successor Agency and by other sources, which is believed to be accurate and reliable, but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Continuing Disclosure Information Statement that involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Continuing Disclosure Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the City, Successor Agency or any other parties described herein. This report is of a factual nature without subjective assumptions, opinions, or views and may not be relied upon as advice or recommendation to purchase or sell any product or utilize any particular strategy relating to the issuance of municipal securities or purchase of financial products. Willdan Financial Services and its employees (collectively Willdan ) do not recommend any actions and are not acting as an advisor to any municipal entity, board, officer, agent, employee or obligated person pursuant to Section 15B of the Exchange Act. Prior to acting on any information or material contained in this communication, you should discuss it with appropriate internal or external advisors and experts and only rely upon their advice. 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 2

6 II. BOND INFORMATION A. PRINCIPAL OUTSTANDING Bonds As of October 31, 2015 Series A Bonds $89,095,000 Series B Bonds $21,010,000 B. FUND BALANCES Fund As of October 31, 2015 Series A Reserve Fund $7,842,713 (1) Series A Reserve Requirement $7,842,713 Series B Reserve Fund $1,908,286 (1) Series B Reserve Requirement $1,908,286 (1) The Reserve Fund is funded by a Reserve Account Surety Bond issued by Assured Guaranty Municipal Corp in an amount equal to the Reserve Requirement of the Bonds. III. FINANCIAL INFORMATION A. AUDITED FINANCIAL STATEMENTS Due to the dissolution of California redevelopment agencies effective February 1, 2012, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (agency trust fund), which is in accordance with guidance issued by the Department of Finance and available on its website as of February 4, 2013, interpreting Section 34177(n) of the California Health and Safety Code concerning certain successor agency postaudit obligations. There will not be separate audited financial statements prepared for the Successor Agency. In lieu of the Successor Agency s audited financial statements, the financial information for the Successor Agency is incorporated in the Comprehensive Annual Financial Report for the City for the fiscal year ended June 30, The City s Comprehensive Annual Financial Report has been separately filed with the Electronic Municipal Market Access website ( EMMA ) and is hereby incorporated by reference into this Annual Continuing Disclosure Information Statement. 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 3

7 IV. OPERATING INFORMATION A. ASSESSED VALUATIONS AND GROSS TAX INCREMENT REVENUES The following tables set forth the taxable valuations and Pledged Tax Revenues for the Project Areas. Project Area No. 1 Fiscal Year 2012/ / / /16 Secured Assessed Value $4,220,927,365 $4,376,573,490 $4,634,034,985 $4,835,885,419 Unsecured Assessed Value 33,872,601 29,894,413 28,724,053 36,642,726 Total Assessed Valuation $4,254,799,966 $4,406,467,903 $4,662,759,038 $4,872,528,145 Base Year Valuation 199,398, ,398, ,398, ,398,233 Incremental Valuation $4,055,401,733 $4,207,069,670 $4,463,360,805 $4,673,129,912 1% Tax Rate 1.000% 1.000% 1.000% Tax Increment Revenues 40,554,017 42,070,697 44,633,608 Unitary Revenue 468, , ,264 Gross Tax Revenues $41,022,948 $42,570,225 $45,140,872 Actual Tax Revenues $41,190,251 $42,763,689 $45,882,054 Project Area No. 2 Fiscal Year 2012/ / / /16 Secured Assessed Value $2,318,312,944 $2,426,052,754 $2,537,426,288 $2,671,084,328 Unsecured Assessed Value 62,055,089 67,195,981 59,204,039 56,591,534 Total Assessed Valuation $2,380,368,033 $2,493,248,735 $2,596,630,327 $2,727,675,862 Base Year Valuation 95,182,755 95,182,755 95,182,755 95,182,755 Incremental Valuation $2,285,185,278 $2,398,065,980 $2,501,447,572 $2,632,493,107 1% Tax Rate 1.000% 1.000% 1.000% Tax Increment Revenues 22,851,853 23,980,660 25,014,476 Unitary Revenue 174, , ,417 Gross Tax Revenues $23,026,015 $24,169,551 $25,206,893 Actual Tax Revenues $22,893,003 $24,281,764 $25,548, /15, 2013 Sub TARB Successor Agency to La Quinta RDA 4

8 B. TAX INCREMENT REVENUES The following tables set forth the actual Tax Increment collections and deductions from Tax Increment Revenues for the Project Areas for the last three fiscal years. Project Area No. 1 Fiscal Year 2012/ / /15 Actual Tax Revenues $41,190,251 $42,763,689 $45,882,054 Loan Obligations (1) 5,553,989 5,512,504 1,729,768 Senior Pass-Throughs 1,382,643 1,463,564 1,059,941 Pledged Tax Revenue $34,253,619 $35,787,622 $43,092,345 Subordinate Pass-Throughs 16,693,136 18,170,485 18,640,060 Net Revenue $17,560,483 $17,617,136 $24,452,285 (1) Prorata share of the 2004 Loan and the 2011 Loan based on amounts from each Project Area that would have been required to be set aside for Low and Moderate Income Housing prior to the dissolution of the Former Agency. The 2004 Loan Obligations were refunded on July 9, 2014 and will be excluded commencing fiscal year 2014/15 and each fiscal year thereafter. Project Area No. 2 Fiscal Year 2012/ / /15 Actual Tax Revenues $22,893,003 $24,281,764 $25,548,831 Loan Obligations (1) 3,086,834 3,130, ,199 Senior Pass-Throughs 15,684,399 16,619,279 17,473,783 Pledged Tax Revenue $4,121,770 $4,532,416 $7,111,849 (1) Prorata share of the 2004 Loan and the 2011 Loan based on amounts from each Project Area that would have been required to be set aside for Low and Moderate Income Housing prior to the dissolution of the Former Agency. The 2004 Loan Obligations were refunded on July 9, 2014 and will be excluded commencing fiscal year 2014/15 and each fiscal year thereafter. 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 5

9 C. REDEVELOPMENT PROPERTY TAX TRUST FUND (RPTTF) DISTRIBUTIONS The following table sets forth the Property Tax Revenue distributions from the RPTTF for fiscal years 2012/13 through 2014/15. Fiscal Year January Distribution Amount June Distribution Amount Total Distributed 2012/13 $6,940,029 $13,053,286 $19,993, /14 4,246,007 15,765,674 20,011, /15 2,749,294 11,716,243 14,465,537 D. DEBT SERVICE COVERAGE The following table sets forth debt service coverage of the Bonds and the Senior Obligations using Pledged Tax Revenues. Bond Year Ending September 1 Pledged Tax Revenue (1) Combined Annual Debt Service (2) Combined Debt Service Coverage 2013 $30,323,076 $9,152, ,792,125 18,902, ,257,101 18,213, (1) Actual Tax Revenues less Pass-Through amounts. (2) Includes the 2004 Loan Obligation, 2011 Loan Obligation, 2011 Bonds, the Tax Allocation Refunding Bonds, 2014 Series A (the 2014 Bonds ) and the Bonds. Debt service on the 2014 Bonds commenced in fiscal year 2014/15. The 2004 Loan Obligations were refunded on July 9, 2014 and will be excluded commencing fiscal year 2014/15 and each fiscal year thereafter. 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 6

10 E. PROJECTED DEBT SERVICE COVERAGE Bond Year Ending September 1 Pledged Tax Revenue (1) Combined Annual Debt Service (2) Combined Debt Service Coverage 2016 $34,257,101 $18,206, ,257,101 18,217, ,257,101 18,213, ,257,101 18,220, ,257,101 18,218, ,257,101 18,226, ,257,101 18,220, ,257,101 18,214, ,257,101 18,214, ,257,101 18,213, ,257,101 18,217, ,257,101 18,219, ,257,101 18,212, ,257,101 18,209, ,257,101 18,218, ,257,101 18,216, ,257,101 18,217, ,257,101 8,858, ,257,101 8,895, ,257,101 3,625, ,257,101 3,627, ,257, , ,257, , ,257, , (1) Actual Tax Revenues less Pass-Through amounts. (2) Includes the 2011 Loan Obligation, the 2011 Bonds, the 2014 Bonds, and the Bonds. Debt service on the 2014 Bonds commenced in fiscal year 2014/15. The former California Community Redevelopment Law, Health and Safety Code ( HSC ) Section 33000, et seq., required redevelopment agencies to include certain time and financial limits in adopted redevelopment plans. Pursuant to SB 107, which took immediate effect upon signature by the California Governor on September 22, 2015, and the amended HSC 34189, successor agencies are no longer bound by time and financial limits of adopted redevelopment plans. HSC now states: (a) Commencing on the effective date of this part, all provisions of the Community Redevelopment Law that depend on the allocation of tax increment to redevelopment agencies, including, but not limited to, Sections 33445, 33640, 33641, and 33645, and subdivision (b) of Section 33670, shall be inoperative. Solely for the purposes of the payment of enforceable obligations defined by 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 7

11 subparagraphs (A) to (G), inclusive, of paragraph (1) of subdivision (d) of Section and subdivision (b) of Section , and for no other purpose whatsoever, a successor agency is not subject to the limitations relating to time, number of tax dollars, or any other matters set forth in Sections , , and Notwithstanding any other provision in this section, this subdivision shall not result in the restoration or continuation of funding for projects whose contractual terms specified that project funding would cease once the limitations specified in any of Section , , or were realized. With this change, the Successor Agency will continue to be allocated revenue from the Project Area through the Redevelopment Property Tax Trust Fund until all enforceable obligations have been repaid. F. TOP LOCAL SECURED TAXPAYERS The following tables set forth the largest secured taxpayers for the Project Areas based on the 2015/16 Secured Property Tax Roll. Project Area No. 1 Property Owner Land Use 2015/16 Secured Assessed Valuation % of Total (1) LQR Properties Hotel $130,527, % Sunrise Desert Partners Residential Properties 72,953, % LQR Golf Country Club 49,298, % Nadador Timeshare Properties 25,588, % RREF II CWC LAQ Residential Properties 22,440, % Village Resort Hotel 21,872, % Lands LP Apartments 21,480, % Old Town La Quinta LLC Commercial 18,235, % LQ Inv Commercial 15,491, % Tradition Golf Club Country Club 14,015, % Total $391,903, % (1) 2015/16 Local Secured Assessed Valuation: $4,835,885,419. Source: California Municipal Statistics, Inc. 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 8

12 Project Area No. 2 Property Owner Land Use 2015/16 Secured Assessed Valuation % of Total (1) Inland American La Quinta Pavilion Commercial $45,356, % Wal Mart Real Estate Business Trust Commercial 26,162, % Health Care REIT Inc. Commercial 25,000, % Aventine Development Apartments 24,915, % Costco Wholesale Corp. Commercial 23,220, % P6K Portfolio KDP Commercial 21,672, % TD Desert Development LP Country Club 17,966, % Target Corp. Commercial 16,866, % Eagle Hardware & Garden Inc. Commercial 16,081, % Washington 111 Ltd. Commercial 14,083, % Total $231,326, % (1) 2015/16 Local Secured Assessed Valuation: $2,671,084,328. Source: California Municipal Statistics, Inc. For information on the largest local secured property taxpayers within Project Area Nos. 1 and 2 for fiscal year 2014/15, reference is made to the 2013/14 Annual Continuing Disclosure Information Statement, dated as of March 31, 2015, filed on EMMA and hereby incorporated by reference into this Annual Continuing Disclosure Information Statement. V. REDEVELOPMENT AGENCY DISSOLUTION On December 29, 2011, the California Supreme Court upheld ABx1 26, which dissolved all redevelopment agencies ( RDA ) in California, effective February 1, Each successor agency is now responsible for drafting an annual Recognized Obligation Payment Schedule ( ROPS ) delineating the enforceable obligations of the former RDA and their source of payment. ROPS are subject to the approval of the local oversight board, County Auditor-Controller, and Department of Finance. The Successor Agency s schedule can be accessed by the link below /15, 2013 Sub TARB Successor Agency to La Quinta RDA 9

13 VI. OCCURRENCE OF LISTED EVENTS The Continuing Disclosure Covenants outline the Occurrence of Listed Events that must be reported in not more than ten (10) business days after the occurrence of the event, irrespective of any determination as to whether such event may or may not be deemed material. The Successor Agency has no knowledge that any of the events listed below have occurred or have not been previously reported during the fiscal year ended June 30, Principal and interest payment delinquencies on the Bonds. 2. Unscheduled draws on debt service reserves reflecting financial difficulties. 3. Unscheduled draws on credit enhancements reflecting financial difficulties. 4. Substitution of credit or liquidity providers, or their failure to perform. 5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds. 6. Defeasances. 7. Tender offers. 8. Bankruptcy, insolvency, receivership or similar proceedings pertaining to the Successor Agency. 9. Ratings changes. The Continuing Disclosure Covenants outline the Occurrence of Listed Events that must be reported in not more than ten (10) business days after the occurrence of the event, if deemed material. The Successor Agency has no knowledge that any of the events listed below have occurred or have not been previously reported during the fiscal year ended June 30, Mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the Successor Agency or the dissolution of the Successor Agency. 11. Appointment of a successor or additional Trustee or the change of the name of the Trustee or any successor or additional Trustee. 12. Non-payment related defaults. 13. Modifications to the rights of Holders. 14. Optional, contingent or unscheduled bond calls, prepayment or redemptions other than defeasances. 15. Release, substitution or sale of property securing repayment of the Bonds. 2014/15, 2013 Sub TARB Successor Agency to La Quinta RDA 10